UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2017~~March 31, 2023

☐	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE 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)~~ (415) 394-9000

(Registrants’ telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


	Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Prologis, Inc.	Common Stock, $0.01 par value	PLD	New York Stock Exchange
Prologis, L.P.	3.000% Notes due 2026	PLD/26	New York Stock Exchange
Prologis, L.P.	2.250% Notes due 2029	PLD/29	New York Stock Exchange

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 for the past 90 days.


Prologis, Inc.	Yes	☒	No	☐
Prologis, L.P.	Yes	☒	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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter periods that the registrant was required to submit ~~and post~~ such files).


Prologis, Inc.	Yes	☒	No	☐
Prologis, L.P.	Yes	☒	No	☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, ~~or a~~ smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated ~~filer” and~~filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange ~~Act (check one):~~Act:


Prologis, Inc.:
Large accelerated filer☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐	Emerging growth company ☐


Prologis, L.P.:
Large accelerated filer ☒☐	Accelerated filer ☐	~~Accelerated~~Non-accelerated filer☐☒	~~Non-accelerated filer~~ ☐	Smaller reporting company ☐	Emerging growth company ☐
		~~(Do not check if a smaller reporting company)~~

~~Prologis, L.P.:~~
~~Large accelerated filer~~ ☐	~~Accelerated filer~~ ☐	~~Non-accelerated filer~~ ☒	~~Smaller reporting company~~ ☐	~~Emerging growth company~~ ☐
	~~(Do not check if a smaller reporting company)~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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	☐	No	☒
Prologis, L.P.	Yes	☐	No	☒

The number of shares of Prologis, Inc.’s common stock outstanding at ~~October 25, 2017,~~April 26, 2023, was approximately ~~532,082,000.~~923,466,000.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended ~~September 30, 2017,~~March 31, 2023, 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” or the “OP” mean Prologis, L.P., and its consolidated subsidiaries. The terms “the Company,” “Prologis,” “we,” “our” or “us” means the Parent and the ~~Operating Partnership~~OP collectively.

The Parent is a real estate investment trust ~~(“REIT”~~(a “REIT”) and the general partner of the ~~Operating Partnership.~~OP. At ~~September 30, 2017,~~March 31, 2023, the Parent owned ~~an approximate 97.33%~~a 97.55% common general partnership interest in the ~~Operating Partnership~~OP and ~~100%~~substantially all of the preferred units in the ~~Operating Partnership.~~OP. The remaining ~~approximate 2.67%~~2.45% common limited partnership interests are owned by ~~nonaffiliated~~unaffiliated investors and certain current and former directors and officers of the Parent. ~~As the sole general partner of the Operating Partnership, the Parent has complete responsibility and discretion in the day-to-day management and control of the Operating Partnership.~~

We operate the Parent and the ~~Operating Partnership~~OP as one enterprise. The management of the Parent consists of the same members as the management of the ~~Operating Partnership.~~OP. These members are officers of the Parent and employees of the ~~Operating Partnership~~OP or one of its subsidiaries. As sole general partner, ~~with~~the Parent has control of the ~~Operating Partnership,~~OP through complete responsibility and discretion in the ~~Parent~~day-to-day management and therefore, consolidates the ~~Operating Partnership~~OP for financial reporting purposes. Because the only significant asset of the Parent is its investment in the ~~Operating Partnership,~~OP, the assets and liabilities of the Parent and the ~~Operating Partnership~~OP are the same on their respective financial statements.

We believe combining the quarterly reports on Form 10-Q of the Parent and the ~~Operating Partnership~~OP into this single report results in the following benefits:

•

enhances investors’ understanding of the Parent and the ~~Operating Partnership~~OP 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 as a substantial portion of the Company’s disclosure applies to both the Parent and the ~~Operating Partnership;~~OP; and

•

creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

It is important to understand the few differences between the Parent and the ~~Operating Partnership~~OP in the context of how we operate the Company. The Parent does not conduct business itself, other than acting as the sole general partner of the ~~Operating Partnership~~OP and issuing public equity from time to time. The ~~Parent itself does not incur any indebtedness, but it guarantees the unsecured debt of the Operating Partnership. The Operating Partnership~~OP holds substantially all the assets of the business, directly or ~~indirectly, and holds the ownership interests in the Company’s investment in certain entities.~~indirectly. The ~~Operating Partnership~~OP 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 the Parent, which are contributed to the ~~Operating Partnership~~OP in exchange for partnership units, the ~~Operating Partnership~~OP generates capital required by the business through the ~~Operating Partnership’s~~OP’s operations, incurrence of indebtedness and issuance of partnership units to third parties.

The presentation of noncontrolling interests, stockholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of the Parent and those of the ~~Operating Partnership.~~ OP. The differences in the presentations between stockholders’ equity and partners’ capital result from the differences in the equity and capital issuances in the Parent and in the OP.

The preferred stock, common stock, additional paid-in capital, accumulated other comprehensive ~~loss~~income (loss) and distributions in excess of net earnings of the Parent are presented as stockholders’ equity in the Parent’s consolidated financial statements. These items represent the common and preferred general partnership interests held by the Parent in the ~~Operating Partnership~~OP and are presented as general partner’s capital within partners’ capital in the ~~Operating Partnership’s~~OP’s consolidated financial statements. The common limited partnership interests held by the limited partners in the ~~Operating Partnership~~OP are presented as noncontrolling interest within equity in the Parent’s consolidated financial statements and as limited partners’ capital within partners’ capital in the ~~Operating Partnership’s~~OP’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.

To highlight the differences between the Parent and the ~~Operating Partnership,~~OP, separate sections in this report, as applicable, individually discuss the Parent and the ~~Operating Partnership,~~OP, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of the Parent and the ~~Operating Partnership,~~OP, this report refers to actions or holdings as being actions or holdings of Prologis.

PROLOGIS

~~PROLOGIS~~INDEX

~~INDEX~~


			Page Number
PART I.	Financial Information
	Item 1.	Financial Statements		1
	Prologis, Inc.:
		Consolidated Balance Sheets – ~~September 30, 2017,~~March 31, 2023 and December 31, ~~2016~~2022		1
		Consolidated Statements of Income – Three ~~and Nine~~ Months Ended ~~September 30, 2017,~~March 31, 2023 and ~~2016~~2022		2
		Consolidated Statements of Comprehensive Income – Three ~~and Nine~~ Months Ended ~~September 30, 2017,~~March 31, 2023 and ~~2016~~2022		3
		Consolidated ~~Statement~~Statements of Equity – ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2023 and 2022		34
		Consolidated Statements of Cash Flows – ~~Nine~~Three Months Ended ~~September 30, 2017,~~March 31, 2023 and ~~2016~~2022		45
	Prologis, L.P.:
		Consolidated Balance Sheets – ~~September 30, 2017,~~March 31, 2023 and December 31, ~~2016~~2022		56
		Consolidated Statements of Income – Three ~~and Nine~~ Months Ended ~~September 30, 2017,~~March 31, 2023 and ~~2016~~2022		67
		Consolidated Statements of Comprehensive Income – Three ~~and Nine~~ Months Ended ~~September 30, 2017,~~March 31, 2023 and ~~2016~~2022		78
		Consolidated ~~Statement~~Statements of Capital – ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2023 and 2022		79
		Consolidated Statements of Cash Flows – ~~Nine~~Three Months Ended ~~September 30, 2017,~~March 31, 2023 and ~~2016~~2022		810
	Prologis, Inc. and Prologis, L.P.:
		Notes to the Consolidated Financial Statements		911
		Note 1. General		911
		Note 2. ~~Real Estate~~Duke Transaction		11
		Note 3. ~~Unconsolidated Entities~~Real Estate		12
		Note 4. Unconsolidated Entities		13
		Note 5. Assets Held for Sale or Contribution		1615
		Note 5.6. Debt		1615
		Note 6.7. Noncontrolling Interests		1817
		Note 7.8. Long-Term Compensation		1918
		Note 8.9. Earnings Per Common Share or Unit		2019
		Note 9.10. Financial Instruments and Fair Value Measurements		2120
		Note ~~10.~~11. Business Segments		2523
		Note ~~11.~~12. Supplemental Cash Flow Information		2725
		Reports of Independent Registered Public Accounting Firm		2826
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		3028
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		4948
	Item 4.	Controls and Procedures		5049
PART II.	Other Information
	Item 1.	Legal Proceedings		5049
	Item 1A.	Risk Factors		5049
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		5049
	Item 3.	Defaults Upon Senior Securities		5049
	Item 4.	Mine Safety Disclosures		50
	Item 5.	Other Information		5150
	Item 6.	Exhibits		5150

Index

PART I. ~~FINANCIAL~~FINANCIAL INFORMATION

ITEM 1. Financial Statements

PROLOGIS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share data)



	March 31, 2023			December 31, 2022
ASSETS
Investments in real estate properties	$	82,385,546		$	81,623,396
Less accumulated depreciation		9,508,351			9,036,085
Net investments in real estate properties		72,877,195			72,587,311
Investments in and advances to unconsolidated entities		9,680,097			9,698,898
Assets held for sale or contribution		734,106			531,257
Net investments in real estate		83,291,398			82,817,466

Cash and cash equivalents		522,501			278,483
Other assets		4,706,985			4,801,499
Total assets	$	88,520,884		$	87,897,448

LIABILITIES AND EQUITY
Liabilities:
Debt	$	25,153,342		$	23,875,961
Accounts payable and accrued expenses		1,507,748			1,711,885
Other liabilities		4,394,565			4,446,509
Total liabilities		31,055,655			30,034,355

Equity:
Prologis, Inc. stockholders’ equity:
Series Q preferred stock at stated liquidation preference of $50 per share; $0.01 par value; 1,279 shares issued and outstanding and 100,000 preferred shares authorized at March 31, 2023 and December 31, 2022		63,948			63,948
Common stock; $0.01 par value; 923,453 shares and 923,142 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		9,235			9,231
Additional paid-in capital		54,058,036			54,065,407
Accumulated other comprehensive loss		(496,424	)		(443,609	)
Distributions in excess of net earnings		(799,577	)		(457,695	)
Total Prologis, Inc. stockholders’ equity		52,835,218			53,237,282
Noncontrolling interests		4,630,011			4,625,811
Total equity		57,465,229			57,863,093
Total liabilities and equity	$	88,520,884		$	87,897,448

September 30, 2017

December 31,

(Unaudited)

2016

ASSETS

Investments in real estate properties
$
25,977,157

$
27,119,330

Less accumulated depreciation

3,977,667

3,758,372

Net investments in real estate properties

21,999,490

23,360,958

Investments in and advances to unconsolidated entities

5,371,758

4,230,429

Assets held for sale or contribution

321,905

322,139

Notes receivable backed by real estate

-

32,100

Net investments in real estate

27,693,153

27,945,626

Cash and cash equivalents

568,726

807,316

Other assets

1,392,271

1,496,990

Total assets
$
29,654,150

$
30,249,932

LIABILITIES AND EQUITY

Liabilities:

Debt
$
9,721,065

$
10,608,294

Accounts payable and accrued expenses

707,049

556,179

Other liabilities

666,780

627,319

Total liabilities

11,094,894

11,791,792

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 September 30, 2017, and
         December 31, 2016

78,235

78,235

Common stock: $0.01 par value; 532,081 shares and 528,671 shares issued and outstanding at
     September 30, 2017, and December 31, 2016, respectively

5,321

5,287

Additional paid-in capital

19,350,643

19,455,039

Accumulated other comprehensive loss

(924,620
)

(937,473
)
Distributions in excess of net earnings

(2,965,828
)

(3,610,007
)
Total Prologis, Inc. stockholders’ equity

15,543,751

14,991,081

Noncontrolling interests

3,015,505

3,467,059

Total equity

18,559,256

18,458,140

Total liabilities and equity
$
29,654,150

$
30,249,932

The accompanying notes are an integral part of these Consolidated Financial Statements.

Index

PROLOGIS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2017			2016			2017			2016			2023			2022
Revenues:
Rental	$	416,427		$	435,868		$	1,304,271		$	1,299,122		$	1,633,770		$	1,076,861
Rental recoveries		114,755			124,409			370,221			361,402
Strategic capital		68,042			142,581			305,741			247,119			134,701			133,925
Development management and other		3,650			1,707			17,979			5,377			116			8,342
Total revenues		602,874			704,565			1,998,212			1,913,020			1,768,587			1,219,128
Expenses:
Rental		128,735			140,514			429,185			427,820			412,554			275,674
Strategic capital		35,996			44,624			119,781			97,783			71,709			51,811
General and administrative		57,656			58,157			171,350			165,634			99,777			74,646
Depreciation and amortization		201,903			224,867			656,639			705,249			602,367			396,647
Other		3,093			3,779			8,608			12,364			7,184			9,589
Total expenses		427,383			471,941			1,385,563			1,408,850			1,193,591			808,367

Operating income before gains on real estate transactions, net														574,996			410,761
Gains on dispositions of development properties and land, net														-			210,206
Gains on other dispositions of investments in real estate, net														4,047			584,835
Operating income		175,491			232,624			612,649			504,170			579,043			1,205,802

Other income (expense):
Earnings from unconsolidated entities, net		55,066			45,857			172,267			145,622			75,779			76,962
Interest expense		(64,190	)		(75,310	)		(212,456	)		(232,577	)		(136,011	)		(64,064	)
Interest and other income, net		4,816			2,932			9,493			7,051
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net		779,053			117,296			959,384			461,963
Foreign currency and derivative losses, net		(18,872	)		(1,730	)		(46,327	)		(26,277	)
Foreign currency and derivative gains and other income, net														8,614			48,409
Gains (losses) on early extinguishment of debt, net		-			1,492			(30,596	)		2,484			3,275			(18,165	)
Total other income		755,873			90,537			851,765			358,266
Total other income (expense)														(48,343	)		43,142
Earnings before income taxes		931,364			323,161			1,464,414			862,436			530,700			1,248,944
Total income tax expense		17,947			15,919			42,328			36,598
Income tax expense														(32,071	)		(29,222	)
Consolidated net earnings		913,417			307,242			1,422,086			825,838			498,629			1,219,722
Less net earnings attributable to noncontrolling interests		35,524			26,316			70,647			58,103			34,006			68,937
Net earnings attributable to controlling interests		877,893			280,926			1,351,439			767,735			464,623			1,150,785
Less preferred stock dividends		1,675			1,671			5,023			5,056			1,453			1,531
Net earnings attributable to common stockholders	$	876,218		$	279,255		$	1,346,416		$	762,679		$	463,170		$	1,149,254

Weighted average common shares outstanding – Basic		531,288			527,288			530,036			525,462			923,888			740,368
Weighted average common shares outstanding – Diluted		554,163			547,200			551,618			545,228			951,624			765,517

Net earnings per share attributable to common stockholders – Basic	$	1.65		$	0.53		$	2.54		$	1.45		$	0.50		$	1.55

Net earnings per share attributable to common stockholders – Diluted	$	1.63		$	0.52		$	2.51		$	1.44		$	0.50		$	1.54

Dividends per common share	$	0.44		$	0.42		$	1.32		$	1.26

The accompanying notes are an integral part of these Consolidated Financial Statements.

Index

PROLOGIS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2017			2016			2017			2016			2023			2022
Consolidated net earnings	$	913,417		$	307,242		$	1,422,086		$	825,838		$	498,629		$	1,219,722
Other comprehensive income (loss):
Foreign currency translation gains (losses), net		4,061			(48,232	)		46,890			(69,832	)		(28,101	)		189,523
Unrealized gains (losses) on derivative contracts, net		6,091			4,696			15,457			(17,122	)		(25,853	)		13,349
Comprehensive income		923,569			263,706			1,484,433			738,884			444,675			1,422,594
Net earnings attributable to noncontrolling interests		(35,524	)		(26,316	)		(70,647	)		(58,103	)		(34,006	)		(68,937	)
Other comprehensive loss (income) attributable to noncontrolling interests		(576	)		2,392			(49,494	)		(10,840	)		1,139			(5,739	)
Comprehensive income attributable to common stockholders	$	887,469		$	239,782		$	1,364,292		$	669,941		$	411,808		$	1,347,918

The accompanying notes are an integral part of these Consolidated Financial Statements.

Index

PROLOGIS, INC.

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF EQUITY

~~Nine~~(Unaudited)

(In thousands)

Three Months Ended ~~September 30, 2017~~March 31, 2023 and 2022

~~(Unaudited)~~


			Common Stock							Accumulated			Distributions
			Number				Additional			Other			in Excess of			Non-
	Preferred		of		Par		Paid-in			Comprehensive			Net			controlling			Total
	Stock		Shares		Value		Capital			Loss			Earnings			Interests			Equity
Balance at January 1, 2023	$	63,948		923,142	$	9,231	$	54,065,407		$	(443,609	)	$	(457,695	)	$	4,625,811		$	57,863,093
Consolidated net earnings		-		-		-		-			-			464,623			34,006			498,629
Effect of equity compensation plans		-		288		4		13,468			-			-			51,416			64,888
Capital contributions		-		-		-		-			-			-			-			-
Redemption of noncontrolling interests		-		23		-		1,304			-			-			(43,573	)		(42,269	)
Foreign currency translation losses, net		-		-		-		-			(27,595	)		-			(506	)		(28,101	)
Unrealized losses on derivative contracts, net		-		-		-		-			(25,220	)		-			(633	)		(25,853	)
Reallocation of equity		-		-		-		(22,143	)		-			-			22,143			-
Dividends ($0.87 per common share) and other distributions		-		-		-		-			-			(806,505	)		(58,653	)		(865,158	)
Balance at March 31, 2023	$	63,948		923,453	$	9,235	$	54,058,036		$	(496,424	)	$	(799,577	)	$	4,630,011		$	57,465,229


			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, 2022	$	63,948		739,827	$	7,398	$	35,561,608		$	(878,253	)	$	(1,327,828	)	$	4,315,337		$	37,742,210
Consolidated net earnings		-		-		-		-			-			1,150,785			68,937			1,219,722
Effect of equity compensation plans		-		290		3		4,217			-			-			35,947			40,167
Capital contributions		-		-		-		-			-			-			434			434
Redemption of noncontrolling interests		-		72		1		3,300			-			-			(29,570	)		(26,269	)
Foreign currency translation gains, net		-		-		-		-			184,152			-			5,371			189,523
Unrealized gains on derivative contracts, net		-		-		-		-			12,981			-			368			13,349
Reallocation of equity		-		-		-		(22,852	)		-			-			22,852			-
Dividends ($0.79 per common share) and other distributions		-		-		-		(10	)		-			(587,382	)		(129,542	)		(716,934	)
Balance at March 31, 2022	$	63,948		740,189	$	7,402	$	35,546,263		$	(681,120	)	$	(764,425	)	$	4,290,134		$	38,462,202

~~(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

Loss

Earnings

Interests

Equity

Balance at January 1, 2017
$
78,235

528,671

$
5,287

$
19,455,039

$
(937,473
)

$
(3,610,007
)

$
3,467,059

$
18,458,140

Consolidated net earnings

-

-

-

-

-

1,351,439

70,647

1,422,086

Effect of equity compensation
     plans

-

1,895

19

58,679

-

-

29,980

88,678

Capital contributions

-

-

-

-

-

-

150,076

150,076

Settlement of noncontrolling
     interests

-

-

-

(202,040
)

-

-

(587,976
)

(790,016
)
Conversion of noncontrolling
     interests

-

1,515

15

47,711

-

-

(47,726
)

-

Foreign currency translation
     gains (losses), net

-

-

-

-

(2,191
)

-

49,081

46,890

Unrealized gains on derivative
     contracts, net

-

-

-

-

15,044

-

413

15,457

Reallocation of equity

-

-

-

(8,712
)

-

-

8,712

-

Distributions and other

-

-

-

(34
)

-

(707,260
)

(124,761
)

(832,055
)
Balance at September 30, 2017
$
78,235

532,081

$
5,321

$
19,350,643

$
(924,620
)

$
(2,965,828
)

$
3,015,505

$
18,559,256

The accompanying notes are an integral part of these Consolidated Financial Statements.

Index

PROLOGIS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Nine Months Ended						Three Months Ended
	September 30,						March 31,
	2017			2016			2023			2022
Operating activities:
Consolidated net earnings	$	1,422,086		$	825,838		$	498,629		$	1,219,722
Adjustments to reconcile net earnings to net cash provided by operating activities:
Straight-lined rents and amortization of above and below market leases		(66,234	)		(74,664	)		(143,686	)		(37,374	)
Equity-based compensation awards		58,091			43,658			62,906			41,429
Depreciation and amortization		656,639			705,249			602,367			396,647
Earnings from unconsolidated entities, net		(172,267	)		(145,622	)		(75,779	)		(76,962	)
Distributions from unconsolidated entities		231,441			210,439
Net increase in operating receivables from unconsolidated entities		(19,530	)		(56,992	)
Amortization of debt premiums, net of debt issuance costs		(1,585	)		(13,047	)
Gains on dispositions of investments in real estate, net		(959,384	)		(461,963	)
Unrealized foreign currency and derivative losses, net		55,646			21,266
Operating distributions from unconsolidated entities								135,081			95,665
Decrease (increase) in operating receivables from unconsolidated entities								51,164			(819	)
Amortization of debt discounts and debt issuance costs, net								17,623			1,980
Gains on dispositions of development properties and land, net								-			(210,206	)
Gains on other dispositions of investments in real estate, net								(4,047	)		(584,835	)
Unrealized foreign currency and derivative losses (gains), net								10,113			(33,273	)
Losses (gains) on early extinguishment of debt, net		30,596			(2,484	)		(3,275	)		18,165
Deferred income tax benefit		(197	)		(1,737	)
Decrease (increase) in accounts receivable and other assets		76,170			(48,231	)
Increase (decrease) in accounts payable and accrued expenses and other liabilities		48,841			(4,699	)
Deferred income tax expense								3,577			7,492
Decrease in other assets								21,742			107,702
Decrease in accounts payable and accrued expenses and other liabilities								(62,118	)		(103,806	)
Net cash provided by operating activities		1,360,313			997,011			1,114,297			841,527
Investing activities:
Real estate development		(1,095,623	)		(1,225,613	)		(936,921	)		(639,636	)
Real estate acquisitions		(295,178	)		(280,797	)		(51,866	)		(451,343	)
Duke Transaction, net of cash acquired								(3,828	)		-
Tenant improvements and lease commissions on previously leased space		(112,442	)		(125,041	)		(78,955	)		(85,024	)
Nondevelopment capital expenditures		(68,698	)		(66,298	)
Proceeds from dispositions and contributions of real estate properties		2,354,547			1,859,317
Property improvements								(19,302	)		(18,280	)
Proceeds from dispositions and contributions of real estate								54,903			1,495,260
Investments in and advances to unconsolidated entities		(244,301	)		(228,588	)		(39,677	)		(34,811	)
Acquisition of a controlling interest in an unconsolidated venture, net of cash received		(374,605	)		-
Return of investment from unconsolidated entities		143,604			579,134			21,169			14,302
Proceeds from repayment of notes receivable backed by real estate		32,100			201,250
Proceeds from the settlement of net investment hedges		7,541			16,768			5,323			3,732
Payments on the settlement of net investment hedges		(5,058	)		-			-			(771	)
Net cash provided by investing activities		341,887			730,132
Net cash provided by (used in) investing activities								(1,049,154	)		283,429
Financing activities:
Proceeds from issuance of common stock		30,684			38,101
Dividends paid on common and preferred stock		(707,260	)		(669,384	)		(806,505	)		(587,382	)
Noncontrolling interests contributions		135,857			1,026			-			434
Noncontrolling interests distributions		(132,004	)		(301,268	)		(58,653	)		(129,542	)
Purchase of noncontrolling interests		(790,016	)		(2,979	)
Tax paid for shares withheld		(19,626	)		(7,862	)
Settlement of noncontrolling interests								(42,269	)		(26,269	)
Tax paid with shares withheld								(18,690	)		(22,602	)
Debt and equity issuance costs paid		(7,020	)		(19,265	)		(17,868	)		(8,058	)
Net payments on credit facilities		(33,745	)		(3,545	)		(1,337,857	)		(492,552	)
Repurchase and payments of debt		(2,728,198	)		(1,675,818	)
Proceeds from issuance of debt		2,294,041			1,012,331
Net cash used in financing activities		(1,957,287	)		(1,628,663	)
Repurchase of and payments on debt								(90,793	)		(332,995	)
Proceeds from the issuance of debt								2,545,042			1,841,450
Net cash provided by financing activities								172,407			242,484

Effect of foreign currency exchange rate changes on cash		16,497			12,560			6,468			(10,807	)
Net increase (decrease) in cash and cash equivalents		(238,590	)		111,040
Net increase in cash and cash equivalents								244,018			1,356,633
Cash and cash equivalents, beginning of period		807,316			264,080			278,483			556,117
Cash and cash equivalents, end of period	$	568,726		$	375,120		$	522,501		$	1,912,750

See Note 1112 for information on noncash investing and financing activities and other information.

The accompanying notes are an integral part of these Consolidated Financial Statements.

Index

PROLOGIS, L.P.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)



	March 31, 2023		December 31, 2022
ASSETS
Investments in real estate properties	$	82,385,546	$	81,623,396
Less accumulated depreciation		9,508,351		9,036,085
Net investments in real estate properties		72,877,195		72,587,311
Investments in and advances to unconsolidated entities		9,680,097		9,698,898
Assets held for sale or contribution		734,106		531,257
Net investments in real estate		83,291,398		82,817,466

Cash and cash equivalents		522,501		278,483
Other assets		4,706,985		4,801,499
Total assets	$	88,520,884	$	87,897,448

LIABILITIES AND CAPITAL
Liabilities:
Debt	$	25,153,342	$	23,875,961
Accounts payable and accrued expenses		1,507,748		1,711,885
Other liabilities		4,394,565		4,446,509
Total liabilities		31,055,655		30,034,355

Capital:
Partners’ capital:
General partner – preferred		63,948		63,948
General partner – common		52,771,270		53,173,334
Limited partners – common		862,734		843,263
Limited partners – Class A common		462,634		464,781
Total partners’ capital		54,160,586		54,545,326
Noncontrolling interests		3,304,643		3,317,767
Total capital		57,465,229		57,863,093
Total liabilities and capital	$	88,520,884	$	87,897,448

September 30, 2017

December 31,

(Unaudited)

2016

ASSETS

Investments in real estate properties
$
25,977,157

$
27,119,330

Less accumulated depreciation

3,977,667

3,758,372

Net investments in real estate properties

21,999,490

23,360,958

Investments in and advances to unconsolidated entities

5,371,758

4,230,429

Assets held for sale or contribution

321,905

322,139

Notes receivable backed by real estate

-

32,100

Net investments in real estate

27,693,153

27,945,626

Cash and cash equivalents

568,726

807,316

Other assets

1,392,271

1,496,990

Total assets
$
29,654,150

$
30,249,932

LIABILITIES AND CAPITAL

Liabilities:

Debt
$
9,721,065

$
10,608,294

Accounts payable and accrued expenses

707,049

556,179

Other liabilities

666,780

627,319

Total liabilities

11,094,894

11,791,792

Capital:

Partners’ capital:

General partner – preferred

78,235

78,235

General partner – common

15,465,516

14,912,846

Limited partners – common

174,354

150,173

Limited partners – Class A common

249,607

244,417

Total partners’ capital

15,967,712

15,385,671

Noncontrolling interests

2,591,544

3,072,469

Total capital

18,559,256

18,458,140

Total liabilities and capital
$
29,654,150

$
30,249,932

~~The accompanying notes are an integral part of these Consolidated Financial Statements~~.

~~PROLOGIS, L.P.~~

~~CONSOLIDATED STATEMENTS OF INCOME~~

~~(Unaudited)~~

~~(In thousands, except per unit amounts)~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Revenues:

Rental

$
416,427

$
435,868

$
1,304,271

$
1,299,122

Rental recoveries

114,755

124,409

370,221

361,402

Strategic capital

68,042

142,581

305,741

247,119

Development management and other

3,650

1,707

17,979

5,377

Total revenues

602,874

704,565

1,998,212

1,913,020

Expenses:

Rental

128,735

140,514

429,185

427,820

Strategic capital

35,996

44,624

119,781

97,783

General and administrative

57,656

58,157

171,350

165,634

Depreciation and amortization

201,903

224,867

656,639

705,249

Other

3,093

3,779

8,608

12,364

Total expenses

427,383

471,941

1,385,563

1,408,850

Operating income

175,491

232,624

612,649

504,170

Other income (expense):

Earnings from unconsolidated entities, net

55,066

45,857

172,267

145,622

Interest expense

(64,190
)

(75,310
)

(212,456
)

(232,577
)
Interest and other income, net

4,816

2,932

9,493

7,051

Gains on dispositions of investments in real estate and revaluation of equity
investments upon acquisition of a controlling interest, net

779,053

117,296

959,384

461,963

Foreign currency and derivative losses, net

(18,872
)

(1,730
)

(46,327
)

(26,277
)
Gains (losses) on early extinguishment of debt, net

-

1,492

(30,596
)

2,484

Total other income

755,873

90,537

851,765

358,266

Earnings before income taxes

931,364

323,161

1,464,414

862,436

Total income tax expense

17,947

15,919

42,328

36,598

Consolidated net earnings

913,417

307,242

1,422,086

825,838

Less net earnings attributable to noncontrolling interests

11,411

18,628

33,534

35,865

Net earnings attributable to controlling interests

902,006

288,614

1,388,552

789,973

Less preferred unit distributions

1,675

1,671

5,023

5,056

Net earnings attributable to common unitholders

$
900,331

$
286,943

$
1,383,529

$
784,917

Weighted average common units outstanding – Basic

537,257

532,934

536,021

531,985

Weighted average common units outstanding – Diluted

554,163

547,200

551,618

545,228

Net earnings per unit attributable to common unitholders – Basic

$
1.65

$
0.53

$
2.54

$
1.45

Net earnings per unit attributable to common unitholders – Diluted

$
1.63

$
0.52

$
2.51

$
1.44

Distributions per common unit

$
0.44

$
0.42

$
1.32

$
1.26

The accompanying notes are an integral part of these Consolidated Financial Statements.

Index

PROLOGIS, L.P.

CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE~~ INCOME

(Unaudited)

(In ~~thousands)~~thousands, except per unit amounts)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Consolidated net earnings

$
913,417

$
307,242

$
1,422,086

$
825,838

Other comprehensive income (loss):

Foreign currency translation gains (losses), net

4,061

(48,232
)

46,890

(69,832
)
Unrealized gains (losses) on derivative contracts, net

6,091

4,696

15,457

(17,122
)
Comprehensive income

923,569

263,706

1,484,433

738,884

Net earnings attributable to noncontrolling interests

(11,411
)

(18,628
)

(33,534
)

(35,865
)
Other comprehensive loss (income) attributable to noncontrolling interests

(313
)

1,406

(49,141
)

(13,438
)
Comprehensive income attributable to common unitholders

$
911,845

$
246,484

$
1,401,758

$
689,581


	Three Months Ended
	March 31,
	2023			2022
Revenues:
Rental	$	1,633,770		$	1,076,861
Strategic capital		134,701			133,925
Development management and other		116			8,342
Total revenues		1,768,587			1,219,128
Expenses:
Rental		412,554			275,674
Strategic capital		71,709			51,811
General and administrative		99,777			74,646
Depreciation and amortization		602,367			396,647
Other		7,184			9,589
Total expenses		1,193,591			808,367

Operating income before gains on real estate transactions, net		574,996			410,761
Gains on dispositions of development properties and land, net		-			210,206
Gains on other dispositions of investments in real estate, net		4,047			584,835
Operating income		579,043			1,205,802

Other income (expense):
Earnings from unconsolidated entities, net		75,779			76,962
Interest expense		(136,011	)		(64,064	)
Foreign currency and derivative gains and other income, net		8,614			48,409
Gains (losses) on early extinguishment of debt, net		3,275			(18,165	)
Total other income (expense)		(48,343	)		43,142
Earnings before income taxes		530,700			1,248,944
Income tax expense		(32,071	)		(29,222	)
Consolidated net earnings		498,629			1,219,722
Less net earnings attributable to noncontrolling interests		22,357			36,666
Net earnings attributable to controlling interests		476,272			1,183,056
Less preferred unit distributions		1,453			1,531
Net earnings attributable to common unitholders	$	474,819		$	1,181,525

Weighted average common units outstanding – Basic		939,054			753,159
Weighted average common units outstanding – Diluted		951,624			765,517

Net earnings per unit attributable to common unitholders – Basic	$	0.50		$	1.55

Net earnings per unit attributable to common unitholders – Diluted	$	0.50		$	1.54

The accompanying notes are an integral part of these Consolidated Financial Statements.

Index

PROLOGIS, L.P.

CONSOLIDATED ~~STATEMENT~~ STATEMENTS OF ~~CAPITAL~~COMPREHENSIVE INCOME

~~Nine Months Ended September 30, 2017~~(Unaudited)

~~(Unaudited)~~

(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, 2017

1,565

$
78,235

528,671

$
14,912,846

5,323

$
150,173

8,894

$
244,417

$
3,072,469

$
18,458,140

Consolidated net earnings

-

-

-

1,351,439

-

15,202

-

21,911

33,534

1,422,086

Effect of equity compensation
     plans

-

-

1,895

58,698

1,353

29,980

-

-

-

88,678

Capital contributions

-

-

-

-

-

-

-

-

150,076

150,076

Settlement of noncontrolling
     interests

-

-

-

(202,040
)

-

-

-

-

(587,976
)

(790,016
)
Conversion of limited partners
     units

-

-

1,515

47,726

(677
)

(18,753
)

-

-

(28,973
)

-

Foreign currency translation
     gains (losses), net

-

-

-

(2,191
)

-

(25
)

-

(35
)

49,141

46,890

Unrealized gains on
     derivative contracts, net

-

-

-

15,044

-

170

-

243

-

15,457

Reallocation of capital

-

-

-

(8,712
)

-

8,386

-

326

-

-

Distributions and other

-

-

-

(707,294
)

-

(10,779
)

-

(17,255
)

(96,727
)

(832,055
)
Balance at September 30, 2017

1,565

$
78,235

532,081

$
15,465,516

5,999

$
174,354

8,894

$
249,607

$
2,591,544

$
18,559,256


	Three Months Ended
	March 31,
	2023			2022
Consolidated net earnings	$	498,629		$	1,219,722
Other comprehensive income (loss):
Foreign currency translation gains (losses), net		(28,101	)		189,523
Unrealized gains (losses) on derivative contracts, net		(25,853	)		13,349
Comprehensive income		444,675			1,422,594
Net earnings attributable to noncontrolling interests		(22,357	)		(36,666	)
Other comprehensive income attributable to noncontrolling interests		(187	)		(155	)
Comprehensive income attributable to common unitholders	$	422,131		$	1,385,773

The accompanying notes are an integral part of these Consolidated Financial Statements.

Index ~~PROLOGIS, L.P.~~

PROLOGIS, L.P.

CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~CAPITAL

(Unaudited)

(In thousands)

Nine Months Ended

September 30,

2017

2016

Operating activities:

Consolidated net earnings

$
1,422,086

$
825,838

Adjustments to reconcile net earnings to net cash provided by operating activities:

Straight-lined rents and amortization of above and below market leases

(66,234
)

(74,664
)
Equity-based compensation awards

58,091

43,658

Depreciation and amortization

656,639

705,249

Earnings from unconsolidated entities, net

(172,267
)

(145,622
)
Distributions from unconsolidated entities

231,441

210,439

Net increase in operating receivables from unconsolidated entities

(19,530
)

(56,992
)
Amortization of debt premiums, net of debt issuance costs

(1,585
)

(13,047
)
Gains on dispositions of investments in real estate, net

(959,384
)

(461,963
)
Unrealized foreign currency and derivative losses, net

55,646

21,266

Losses (gains) on early extinguishment of debt, net

30,596

(2,484
)
Deferred income tax benefit

(197
)

(1,737
)
Decrease (increase) in accounts receivable and other assets

76,170

(48,231
)
Increase (decrease) in accounts payable and accrued expenses and other liabilities

48,841

(4,699
)
Net cash provided by operating activities

1,360,313

997,011

Investing activities:

Real estate development

(1,095,623
)

(1,225,613
)
Real estate acquisitions

(295,178
)

(280,797
)
Tenant improvements and lease commissions on previously leased space

(112,442
)

(125,041
)
Nondevelopment capital expenditures

(68,698
)

(66,298
)
Proceeds from dispositions and contributions of real estate properties

2,354,547

1,859,317

Investments in and advances to unconsolidated entities

(244,301
)

(228,588
)
Acquisition of a controlling interest in an unconsolidated venture, net of cash received

(374,605
)

-

Return of investment from unconsolidated entities

143,604

579,134

Proceeds from repayment of notes receivable backed by real estate

32,100

201,250

Proceeds from the settlement of net investment hedges

7,541

16,768

Payments on the settlement of net investment hedges

(5,058
)

-

Net cash provided by investing activities

341,887

730,132

Financing activities:

Proceeds from issuance of common partnership units in exchange for contributions from Prologis, Inc.

30,684

38,101

Distributions paid on common and preferred units

(735,294
)

(698,647
)
Noncontrolling interests contributions

135,857

1,026

Noncontrolling interests distributions

(103,970
)

(272,856
)
Purchase of noncontrolling interests

(790,016
)

(2,128
)
Tax paid for shares withheld

(19,626
)

(7,862
)
Debt and capital issuance costs paid

(7,020
)

(19,265
)
Net payments on credit facilities

(33,745
)

(3,545
)
Repurchase and payments of debt

(2,728,198
)

(1,675,818
)
Proceeds from issuance of debt

2,294,041

1,012,331

Net cash used in financing activities

(1,957,287
)

(1,628,663
)

Effect of foreign currency exchange rate changes on cash

16,497

12,560

Net increase (decrease) in cash and cash equivalents

(238,590
)

111,040

Cash and cash equivalents, beginning of period

807,316

264,080

Cash and cash equivalents, end of period

$
568,726

$
375,120

~~See Note 11 for information on noncash investing~~Three Months Ended March 31, 2023 and ~~financing activities and other information.~~2022


	General Partner									Limited Partners											Non-
	Preferred				Common					Common						Class A Common					controlling			Total
	Units		Amount		Units		Amount			Units			Amount			Units		Amount			Interests			Capital
Balance at January 1, 2023		1,279	$	63,948		923,142	$	53,173,334			14,640		$	843,263			8,595	$	464,781		$	3,317,767		$	57,863,093
Consolidated net earnings		-		-		-		464,623			-			7,604			-		4,045			22,357			498,629
Effect of equity compensation plans		-		-		288		13,472			843			51,416			-		-			-			64,888
Capital contributions		-		-		-		-			-			-			-		-			-			-
Redemption of limited partners units		-		-		23		1,304			(386	)		(43,573	)		-		-			-			(42,269	)
Foreign currency translation gains (losses), net		-		-		-		(27,595	)		-			(451	)		-		(242	)		187			(28,101	)
Unrealized losses on derivative contracts, net		-		-		-		(25,220	)		-			(412	)		-		(221	)		-			(25,853	)
Reallocation of capital		-		-		-		(22,143	)		-			22,313			-		(170	)		-			-
Distributions ($0.87 per common unit) and other		-		-		-		(806,505	)		-			(17,426	)		-		(5,559	)		(35,668	)		(865,158	)
Balance at March 31, 2023		1,279	$	63,948		923,453	$	52,771,270			15,097		$	862,734			8,595	$	462,634		$	3,304,643		$	57,465,229


	General Partner									Limited Partners											Non-
	Preferred				Common					Common						Class A Common					controlling			Total
	Units		Amount		Units		Amount			Units			Amount			Units		Amount			Interests			Capital
Balance at January 1, 2022		1,279	$	63,948		739,827	$	33,362,925			12,354		$	557,097			8,595	$	360,702		$	3,397,538		$	37,742,210
Consolidated net earnings		-		-		-		1,150,785			-			19,856			-		12,415			36,666			1,219,722
Effect of equity compensation plans		-		-		290		4,220			837			35,947			-		-			-			40,167
Capital contributions		-		-		-		-			-			-			-		-			434			434
Redemption of limited partners units		-		-		72		3,301			(242	)		(29,570	)		-		-			-			(26,269	)
Foreign currency translation gains, net		-		-		-		184,152			-			3,222			-		1,994			155			189,523
Unrealized gains on derivative contracts, net		-		-		-		12,981			-			227			-		141			-			13,349
Reallocation of capital		-		-		-		(22,852	)		-			23,144			-		(292	)		-			-
Distributions ($0.79 per common unit) and other		-		-		-		(587,392	)		-			(13,241	)		-		(5,558	)		(110,743	)		(716,934	)
Balance at March 31, 2022		1,279	$	63,948		740,189	$	34,108,120			12,949		$	596,682			8,595	$	369,402		$	3,324,050		$	38,462,202

The accompanying notes are an integral part of these Consolidated Financial Statements.

Index

PROLOGIS, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


		Three Months Ended
		March 31,
		2023			2022
Operating activities:
Consolidated net earnings		$	498,629		$	1,219,722
Adjustments to reconcile net earnings to net cash provided by operating activities:
Straight-lined rents and amortization of above and below market leases			(143,686	)		(37,374	)
Equity-based compensation awards			62,906			41,429
Depreciation and amortization			602,367			396,647
Earnings from unconsolidated entities, net			(75,779	)		(76,962	)
Operating distributions from unconsolidated entities			135,081			95,665
Decrease (increase) in operating receivables from unconsolidated entities			51,164			(819	)
Amortization of debt discounts and debt issuance costs, net			17,623			1,980
Gains on dispositions of development properties and land, net			-			(210,206	)
Gains on other dispositions of investments in real estate, net			(4,047	)		(584,835	)
Unrealized foreign currency and derivative losses (gains), net			10,113			(33,273	)
Losses (gains) on early extinguishment of debt, net			(3,275	)		18,165
Deferred income tax expense			3,577			7,492
Decrease in other assets			21,742			107,702
Decrease in accounts payable and accrued expenses and other liabilities			(62,118	)		(103,806	)
Net cash provided by operating activities			1,114,297			841,527
Investing activities:
Real estate development			(936,921	)		(639,636	)
Real estate acquisitions	��		(51,866	)		(451,343	)
Duke Transaction, net of cash acquired			(3,828	)		-
Tenant improvements and lease commissions on previously leased space			(78,955	)		(85,024	)
Property improvements			(19,302	)		(18,280	)
Proceeds from dispositions and contributions of real estate			54,903			1,495,260
Investments in and advances to unconsolidated entities			(39,677	)		(34,811	)
Return of investment from unconsolidated entities			21,169			14,302
Proceeds from the settlement of net investment hedges			5,323			3,732
Payments on the settlement of net investment hedges			-			(771	)
Net cash provided by (used in) investing activities			(1,049,154	)		283,429
Financing activities:
Distributions paid on common and preferred units			(829,490	)		(606,181	)
Noncontrolling interests contributions			-			434
Noncontrolling interests distributions			(35,668	)		(110,743	)
Redemption of common limited partnership units			(42,269	)		(26,269	)
Tax paid with shares of the Parent withheld			(18,690	)		(22,602	)
Debt and equity issuance costs paid			(17,868	)		(8,058	)
Net payments on credit facilities			(1,337,857	)		(492,552	)
Repurchase of and payments on debt			(90,793	)		(332,995	)
Proceeds from the issuance of debt			2,545,042			1,841,450
Net cash provided by financing activities			172,407			242,484

Effect of foreign currency exchange rate changes on cash			6,468			(10,807	)
Net increase in cash and cash equivalents			244,018			1,356,633
Cash and cash equivalents, beginning of period			278,483			556,117
Cash and cash equivalents, end of period		$	522,501		$	1,912,750

See Note 12 for information on noncash investing and financing activities and other information.

The accompanying notes are an integral part of these Consolidated Financial Statements.

Index

PROLOGIS, INC. AND PROLOGIS, L.P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. GENERAL

Business. Prologis, Inc. (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 (the “Internal Revenue Code” or “IRC”), and believes the current organization and method of operation will enable it to maintain its status as a REIT. The Parent is the general partner of Prologis, L.P. (or the “Operating Partnership” or “OP”). Through the ~~Operating Partnership,~~OP, we are engaged in the ownership, acquisition, development and management of logistics ~~properties~~facilities with a focus on key markets in 19 countries on four continents. We invest in real estate through wholly owned subsidiaries and other entities through which we co-invest with partners and investors. We maintain a significant level of ownership in these co-investment ventures, which may be consolidated or unconsolidated based on our level of control of the ~~world’s primary population centers and in those supported by extensive transportation infrastructure.~~entity. Our current business strategy consists of two operating business segments: Real Estate (Rental Operations and Development) and Strategic Capital. Our Real Estate ~~Operations segment~~Segment represents the ownership, leasing and development of logistics properties. Our Strategic Capital ~~segment~~Segment represents the management of properties owned by our unconsolidated co-investment ventures and other ~~unconsolidated entities.~~ventures. See Note 1011 for further discussion of our business segments. Unless otherwise indicated, the Notes to the Consolidated Financial Statements apply to both the Parent and the ~~Operating Partnership.~~OP. The terms “the Company,” “Prologis,” “we,” “our” or “us” means the Parent and ~~Operating Partnership~~OP collectively.

For each share of ~~common stock~~preferred or ~~preferred~~common stock the Parent issues, the ~~Operating Partnership~~OP issues a corresponding ~~common~~preferred or ~~preferred~~common partnership unit, as applicable, to the Parent in exchange for the contribution of the proceeds from the stock issuance. At ~~September 30, 2017,~~March 31, 2023, the Parent owned ~~an approximate 97.33%~~a 97.55% common general partnership interest in the ~~Operating Partnership~~OP and ~~100%~~substantially all of the preferred units in the ~~Operating Partnership.~~OP. The remaining ~~approximate 2.67%~~2.45% common limited partnership interests, which include ~~8.9 million~~ Class A common limited partnership units (“Class A Units”) in the ~~Operating Partnership,~~OP, are owned by unaffiliated investors and certain current and former directors and officers of the Parent. Each partner’s percentage interest in the ~~Operating Partnership~~OP is determined based on the number of ~~Operating Partnership~~OP units held, including the number of ~~Operating Partnership~~OP units into which Class A Units are convertible, compared to total ~~Operating Partnership~~OP 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~~OP 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~~Statements of Equity of the Parent and Reallocation of Capital in the Consolidated ~~Statement~~Statements of ~~Capital.~~Capital of the OP.

As the sole general partner of the ~~Operating Partnership,~~OP, the Parent has complete responsibility and discretion in the day-to-day management and control of the ~~Operating Partnership~~OP and we operate the Parent and the ~~Operating Partnership~~OP as one enterprise. The management of the Parent consists of the same members as the management of the ~~Operating Partnership.~~OP. These members are officers of the Parent and employees of the ~~Operating Partnership~~OP or one of its subsidiaries. As general partner with control of the ~~Operating Partnership,~~OP, the Parent is the primary beneficiary and therefore consolidates the ~~Operating Partnership.~~OP. Because the Parent’s only significant asset is its investment in the ~~Operating Partnership,~~OP, the assets and liabilities of the Parent and the ~~Operating Partnership~~OP are the same on their respective financial statements.

Basis of Presentation. The accompanying Consolidated 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~~Intercompany transactions with consolidated entities have been eliminated.

The accompanying unaudited interim financial information has been prepared according to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and ~~footnote~~note disclosures normally included in our annual financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations. Our management believes that the disclosures presented in these financial statements are adequate to make the information presented not misleading. In our opinion, all adjustments and eliminations, consisting only of normal recurring adjustments, necessary to present fairly the financial position and results of operations for both the Parent and the ~~Operating Partnership~~OP for the reported periods have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year. The accompanying unaudited interim financial information should be read in conjunction with our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016,~~2022, as filed with the SEC, and other public information.

NOTE 2. DUKE TRANSACTION

~~Certain amounts included~~On October 3, 2022, we acquired Duke Realty Corporation and Duke Realty Limited Partnership (collectively “Duke” or the “Duke Transaction”). Through the Duke Transaction, we acquired a portfolio primarily comprised of logistics real estate assets, including 494 industrial operating properties, aggregating 144.4 million square feet, which are highly complementary to our U.S. portfolio in terms of product quality, location and growth potential in our key markets. There was approximately 15 million square feet of non-strategic industrial operating properties acquired in the ~~accompanying~~Duke Transaction for which our intent is not to operate these properties long term. These assets are classified asother real estate investments within Investments in Real Estate Properties in the Consolidated ~~Financial Statements~~Balance Sheets. The portfolio also included properties under development, land for ~~2016 have been reclassified to conform to~~future development and investments in other ventures.

The Duke Transaction was completed for $23.2 billion through the ~~2017 financial statement presentation.~~issuance of equity based on the value of the Prologis common stock and units issued of $18.8 billion, the assumption of debt of $4.2 billion and transaction costs. In connection with the transaction, each

~~New Accounting Pronouncements.~~

Index

~~New Accounting Standards Adopted~~issued and outstanding share or unit held by a Duke shareholder or unitholder was converted automatically into 0.475 shares of Prologis common stock or common units of Prologis, L.P., respectively, including shares and units under Duke’s equity incentive plan that became fully vested at closing.

The aggregate equity consideration is calculated below (in millions, except price per share):

In January 2017, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update that clarifies the definition of a business. The update adds further guidance that assists preparers in evaluating whether a transaction will be


Number of Prologis shares and units issued upon conversion of Duke's shares and units at October 3, 2022		184.80
Multiplied by price of Prologis' common stock on September 30, 2022	$	101.60
Fair value of Prologis shares and units issued	$	18,776

We accounted for the Duke Transaction as an asset acquisition and as a result, the transaction costs of ~~an asset or a business. We expect most of our real estate property acquisitions to qualify as asset acquisitions under the standard that permits the capitalization of acquisition costs~~$239.8 million were capitalized to the basis of the acquired properties. Transaction costs included the direct costs incurred to acquire the real estate ~~property. We adopted this standard on January 1, 2017,~~assets.

Under acquisition accounting, the total cost or total consideration exchanged is allocated to the real estate properties and related lease intangibles on a ~~prospective basis,~~relative fair value basis. As the fair value of the properties acquired exceeded the purchase price, we allocated the bargain consideration at a property-level based on the relative fair value of the property in comparison to the total portfolio. All other assets acquired and liabilities assumed, including debt, and real estate assets that we intend to sell in the ~~adoption did not have a significant impact~~next twelve months were recorded at fair value. The total purchase price, including transaction costs, was allocated as follows (in millions):


Net investments in real estate	$	24,915
Cash and other assets		441
Debt		(4,162	)
Intangible liabilities, net of intangible assets (1)		(1,457	)
Accounts payable, accrued expenses and other liabilities		(719	)
Noncontrolling interests		(2	)
Total purchase price, including transaction costs	$	19,016

(1)

Intangible assets of $836.6 million and intangible liabilities of $2.3 billion were included within Other Assets and Other Liabilities, respectively, on the Consolidated ~~Financial Statements.~~

~~New Accounting Standards Issued but not yet Adopted~~

~~Revenue Recognition.~~ ~~In May 2014,~~Balance Sheets. The acquired lease intangibles from the FASB issued an accounting standard update 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 evaluated each of our revenue streams and their related accounting policies under the standard. Rental revenues and recoveries earned from leasing our operating propertiesDuke Transaction will be ~~assessed with~~amortized over the ~~adoption~~terms of the lease accounting standard update discussed below. Our evaluation under the revenue recognition standard also includes recurring fees and promotes earned from our co-investment ventures as well as sales to third parties and contributions of properties to unconsolidated co-investment ventures. While we do not expect changes in the recognition of recurring fees earned, we may begin recognizing promote fees earlier in the incentive period to the extent it is probable that a revenue reversal will not occur in a future period.

For dispositions of real estate to third parties, we do not expect the standard to impact the recognition of the sale. In February 2017, the FASB issued an additional accounting standard update that provides the accounting treatment for gains and losses from the derecognition of non-financial assets, including the accounting for partial sales of real estate properties. Upon adoption of the standard, we will recognize, on a prospective basis, the entire gain attributed to contributions or sales of real estate properties to unconsolidated co-investment ventures rather than the third-party share we recognize today. For deferred gains from existing partial sales recorded prior to the adoption of the standard, we will continue to recognize these gains into earnings over the lives of the underlying real estate properties. Both the revenue recognition and derecognition of non-financial assets standards are 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 these standards. We expect to adopt the standards on a modified retrospective basis.

~~Leases.~~ ~~In February 2016, the FASB issued an accounting standard update that provides the principles for the recognition, measurement, presentation and disclosure of leases.~~

~~As a lessor.~~ 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, these costs are capitalizable and therefore this new standard will result in certain of these costs being expensed as incurred after adoption. This standard may also impact the timing, recognition, presentation and disclosures related to our rental recoveries from tenants earned from leasing our operating properties, although we do not expect a significant impact.

~~As a lessee.~~ ~~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~~respective leases with a weighted average remaining lease term of ~~greater than 12~~64 months regardless of their lease classification. We are a lessee of ground leases and office space leases. At December 31, 2016, we had 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. We are in the process of calculating and estimating the initial right-of-use assets and lease liabilities that will be recorded upon adoption. There have been no significant changes to our ground and office space leases since December 31, 2016.

at October 3, 2022.

NOTE 3. REAL ESTATE

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 accompanying notes to the 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.

~~Derivatives and Hedging~~. In August 2017, the FASB issued an accounting standard update that simplifies the application of hedge accounting guidance in current GAAP and improves the reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. Among the simplification updates, the standard eliminates the requirement in current GAAP to separately recognize periodic hedge ineffectiveness. Mismatches between the changes in value of the hedged item and hedging instrument may still occur but they will no longer be separately reported. The standard requires the presentation of the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The standard is effective for annual and interim reporting periods beginning after December 15, 2018, but early adoption is permitted. We are currently evaluating the impact the adoption of this standard will have on the Consolidated Financial Statements.

~~NOTE 2. REAL ESTATE~~

Investments in real estate properties consisted of the following (dollars and square feet in thousands):


	Square Feet				Number of Buildings
	Mar 31,		Dec 31,		Mar 31,		Dec 31,		Mar 31,		Dec 31,
	2023		2022		2023		2022		2023		2022
Operating properties:
Buildings and improvements		600,985		597,362		2,836		2,825	$	49,020,423	$	48,650,334
Improved land										20,549,061		20,388,461
Development portfolio, including land costs:
Prestabilized		5,844		4,874		21		15		680,951		597,553
Properties under development		37,600		44,011		102		121		3,571,692		3,614,601
Land (1)										3,444,294		3,338,121
Other real estate investments (2)										5,119,125		5,034,326
Total investments in real estate properties										82,385,546		81,623,396
Less accumulated depreciation										9,508,351		9,036,085
Net investments in real estate properties									$	72,877,195	$	72,587,311

(1)

At March 31, 2023 and December 31, 2022, our land was comprised of 7,335 and 7,188 acres, respectively.

Square Feet

Number of Buildings

September 30,

December 31,

September 30,

December 31,

September 30,

December 31,

2017

2016

2017

2016

2017

2016

Operating properties

Buildings and
    improvements

298,240

331,210

1,566

1,776

$
16,829,500

$
17,905,914

Improved land

5,826,773

6,037,543

Development portfolio,
   including land costs:

Prestabilized

7,394

8,256

24

29

441,235

798,233

Properties under
   development

22,189

19,539

55

60

1,059,764

633,849

Land (1)

1,313,268

1,218,904

Other real estate
    investments (2)

506,617

524,887

Total investments in real
    estate properties

25,977,157

27,119,330

Less accumulated
    depreciation

3,977,667

3,758,372

Net investments in
    real estate properties

$
21,999,490

$
23,360,958

(2)

Included in other real estate investments were: (i) land parcels we own and lease to third parties; (ii) non-strategic real estate assets, primarily acquired from the Duke Transaction, that we do not intend to operate long term; (iii) non-industrial real estate assets that we intend to redevelop into industrial properties; and (iv) costs associated with potential acquisitions and future development projects, including purchase options on land.

Index

Acquisitions

~~(1)~~

~~Included in our investments in real estate at September 30, 2017, and December 31, 2016, were 5,871 and 5,892 acres of land, respectively.~~

~~(2)~~

Included in other real estate investments are: (i) non-logistics real estate; (ii) land parcels that are ground leased to third parties; (iii) our corporate office buildings; (iv) costs related to future development projects, including purchase options on land; (v) infrastructure costs related to projects we are developing on behalf of others; and (vi) earnest money deposits associated with potential acquisitions.

~~Acquisitions~~

The following table summarizes our real estate acquisition activity ~~for the three and nine months ended September 30~~ (dollars and square feet in thousands):


	Three Months Ended March 31,
	2023		2022
Number of operating properties		-		1
Square feet		-		303
Acres of land		120		578
Acquisition cost of net investments in real estate, excluding other real estate investments	$	40,474	$	264,485

Acquisition cost of other real estate investments	$	6,185	$	223,411

Dispositions

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

Acquisitions of operating properties from third parties and a controlling
interest in an unconsolidated venture

Number of operating properties

12

1

14

7

Square feet

6,328

42

6,478

931

Acquisition value of net investments in real estate properties (1)

$
703,686

$
16,795

$
744,581

$
86,840

~~(1)~~

In August 2017, we acquired our partner’s interest in certain joint ventures in Brazil for an aggregate price of R$1.2 billion ($381.7 million). As a result of this transaction, we began consolidating total real estate that included the operating properties above, two prestabilized properties and 531.4 acres of undeveloped land. We accounted for the acquisition as a business combination and the results of operations for these real estate properties were not significant in 2017. The current allocation of the purchase price is preliminary and the valuation of the real estate properties and other assets acquired is still being finalized.

~~Dispositions~~

The following table summarizes our dispositions of net investments in real estate ~~disposition activity for the three~~that include contributions to unconsolidated co-investment ventures and ~~nine months ended September 30~~dispositions to third parties (dollars and square feet in thousands):


	Three Months Ended March 31,
	2023		2022
Dispositions of development properties and land, net (1)
Number of properties		-		7
Square feet		-		2,583
Net proceeds	$	-	$	442,555
Gains on dispositions of development properties and land, net	$	-	$	210,206

Other dispositions of investments in real estate, net
Number of properties		5		102
Square feet		360		8,676
Net proceeds	$	57,008	$	1,264,280
Gains on other dispositions of investments in real estate, net	$	4,047	$	584,835

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

Contributions to unconsolidated co-investment ventures (1)

Number of properties

201

11

211

21

Square feet

41,776

2,657

45,420

6,676

Net proceeds (2)

$
2,356,322

$
185,811

$
2,869,428

$
649,511

Gains on contributions, net (2)

$
647,647

$
29,197

$
773,715

$
132,787

Dispositions to third parties

Number of properties

7

48

45

147

Square feet

2,179

5,041

8,217

15,606

Net proceeds (2) (3)

$
155,227

$
410,602

$
614,906

$
1,300,209

Gains on dispositions, net (2) (3)

$
50,259

$
88,099

$
104,522

$
242,561

Total gains on contributions and dispositions, net

$
697,906

$
117,296

$
878,237

$
375,348

Gains on revaluation of equity investments upon acquisition of a
     controlling interest and redemption of investment in
          co-investment ventures

81,147

-

81,147

86,615

Total gains on dispositions of investments in real estate and
     revaluation of equity investments upon acquisition of a
          controlling interest, net

$
779,053

$
117,296

$
959,384

$
461,963

(1)

The gains we recognize in Gains on Dispositions of Development Properties and Land, Net are principally driven by the contribution of newly developed properties to our unconsolidated co-investment ventures and occasionally sales to a third party.

Leases

We recognized lease right-of-use assets of $735.1 million and $735.4 million within Other Assets and lease liabilities of $642.4 million and $638.8 million within Other Liabilities, for land and office space leases in which we are the lessee, on the Consolidated Balance Sheets at March 31, 2023 and December 31, 2022, respectively.

~~(1)~~

In July 2017, we contributed 190 operating properties totaling 37.1 million square feet owned by Prologis North American Industrial Fund (“NAIF”), which was wholly-owned beginning March 2017, to Prologis Targeted U.S. Logistics Fund (“USLF”), our unconsolidated co-investment venture, for an aggregate price of $2.8 billion. We received cash proceeds and additional units, which increased our ownership interest in USLF to 27.1% and USLF assumed $956.0 million of secured debt.

~~(2)~~

~~Also includes the contribution and disposition of land parcels.~~

~~(3)~~

~~Also includes the sale of our investment in Europe Logistics Venture 1 (“ELV”) in January 2017. See Note 3 for more information on this transaction.~~

NOTE 3.4. UNCONSOLIDATED ENTITIES

Summary of Investments

We have investments in entities through a variety of ventures. We co-invest in entities that own multiple properties with partners and investors and we provide asset management and property management services to these entities, which we refer to as co-investment ventures. These entities may be consolidated or unconsolidated depending on the structure, our partner’s participation and other rights and our level of control of the entity. This note details our investments in unconsolidated co-investment ventures, which are related parties and accounted for using the equity method of accounting. See Note 67 for more detail regarding our consolidated ~~investments.~~investments that are not wholly owned.

We also have investments in other ventures, generally with one partner, ~~and that we do not manage,~~ which we account for ~~primarily~~ using the equity method. We refer to our investments in ~~all entities accounted for using the equity method,~~ both unconsolidated co-investment ventures and other ventures, collectively, as unconsolidated entities.

Index

The following table summarizes our investments in and advances to ~~our~~ unconsolidated entities (in thousands):


	March 31,		December 31,
	2023		2022
Unconsolidated co-investment ventures	$	8,055,322	$	8,073,927
Other ventures (1)		1,624,775		1,624,971
Total	$	9,680,097	$	9,698,898

September 30,

December 31,

2017

2016

Unconsolidated co-investment ventures

$
5,118,553

$
4,057,524

Other ventures

253,205

172,905

Totals

$
5,371,758

$
4,230,429

(1)

Included in other ventures is our $174.9 million and $162.6 million investment in early and growth-stage companies that are focused on emerging technologies at March 31, 2023 and December 31, 2022, respectively.

Unconsolidated Co-Investment Ventures

~~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~~Strategic Capital Revenues we recognized in the Consolidated Statements of Income related to ~~the~~our unconsolidated co-investment ventures (in thousands):


	Three Months Ended March 31,
	2023		2022
Recurring fees	$	113,557	$	113,237
Transactional fees		15,080		17,229
Promote revenue		320		-
Total strategic capital revenues from unconsolidated co-investment ventures (1)	$	128,957	$	130,466

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Strategic capital revenues from unconsolidated
co-investment ventures, net:

U.S.

$
16,841

$
9,565

$
158,064

$
27,739

Other Americas

6,216

5,806

22,131

16,885

Europe

26,323

113,489

78,450

161,257

Asia

18,271

13,174

44,990

39,429

Total

$
67,651

$
142,034

$
303,635

$
245,310

Earnings from unconsolidated co-investment
ventures, net:

U.S.

$
18,307

$
1,763

$
25,216

$
9,140

Other Americas

6,570

8,077

22,073

20,885

Europe

23,848

29,802

89,622

90,395

Asia

5,050

4,905

23,489

12,253

Total

$
53,775

$
44,547

$
160,400

$
132,673

(1)

These amounts exclude strategic capital revenues from other ventures.

The following table summarizes the ~~promotes earned~~key property information, financial position and ~~recognized in~~ ~~Strategic Capital Revenues~~ ~~(in thousands):~~

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Total promote (1)

$
-

$
99,766

$
150,898

$
99,766

Less: Prologis' share

-

11,222

23,806

11,222

Net promote recognized (third-party share) in strategic capital revenues

$
-

$
88,544

$
127,092

$
88,544

~~(1)~~

~~We earned promotes from ELV, FIBRA Prologis and USLF in 2017 and~~ ~~Prologis European Properties Fund II and~~ ~~Prologis Targeted Europe Logistics Fund (“PTELF”)~~ ~~in 2016. Promotes are based on the venture’s cumulative returns to investors over a certain time-period, generally three years~~.

~~The following tables summarize the~~ operating information ~~and financial position~~ of our unconsolidated co-investment ventures on a U.S. GAAP basis (not our proportionate share), and the amounts we recognized in the Consolidated Financial Statements related to these ventures (dollars and square feet in millions):


	U.S.						Other Americas (1)						Europe						Asia						Total
At:	Mar 31, 2023			Dec 31, 2022			Mar 31, 2023			Dec 31, 2022			Mar 31, 2023			Dec 31, 2022			Mar 31, 2023			Dec 31, 2022			Mar 31, 2023			Dec 31, 2022
Key property information:
Ventures		1			1			2			2			2			2			3			3			8			8
Operating properties		740			739			260			260			992			989			220			217			2,212			2,205
Square feet		123			123			60			60			220			219			90			89			493			491

Financial position:
Total assets ($)		12,609			12,617			3,760			3,744			22,957			22,502			9,844			9,964			49,170			48,827
Third-party debt ($)		3,468			3,468			919			919			5,426			5,315			3,827			3,811			13,640			13,513
Total liabilities ($)		4,179			4,143			983			1,011			7,502			7,292			4,259			4,279			16,923			16,725

Our investment balance ($) (2)		2,371			2,398			1,041			1,070			3,850			3,786			793			820			8,055			8,074
Our weighted average ownership (3)		26.2	%		26.2	%		40.6	%		41.0	%		31.0	%		31.0	%		15.2	%		15.2	%		27.4	%		27.4	%

	U.S.						Other Americas (1)						Europe						Asia						Total
Operating Information:	Mar 31, 2023			Mar 31, 2022			Mar 31, 2023			Mar 31, 2022			Mar 31, 2023			Mar 31, 2022			Mar 31, 2023			Mar 31, 2022			Mar 31, 2023			Mar 31, 2022
For the three months ended:
Total revenues ($)		324			286			103			89			414			356			165			169			1,006			900
Net earnings ($)		101			72			43			33			69			104			27			34			240			243

Our earnings from unconsolidated co-investment ventures, net ($)		27			19			16			12			21			31			4			6			68			68

(1)

Prologis Brazil Logistics Venture (“PBLV”) and our other Brazilian joint ventures are combined as one venture for the purpose of this table.

(2)

Prologis’ investment balance is presented at our adjusted ~~basis derived~~basis. The difference between our ownership interest of a venture’s equity and our investment balance at March 31, 2023 and December 31, 2022, results principally from four types of transactions: (i) deferred gains from the ~~ventures’ U.S. GAAP information:~~contribution of property to a venture prior to January 1, 2018; (ii) recording additional costs associated with our investment in the venture; (iii) receivables, principally for fees and promotes ($146.4 million and $193.7 million, respectively); and (iv) customer security deposits retained subsequent to property contributions to Nippon Prologis REIT, Inc.

(3)

Represents our weighted average ownership interest in all unconsolidated co-investment ventures based on each entity’s contribution of total assets before depreciation, net of other liabilities.

September 30,

December 31,

September 30,

(dollars and square feet in millions)

2017

2016

2016

U.S. (1):

Number of ventures

1

1

1

Number of operating properties owned

552

369

366

Square feet

88

50

49

Total assets

$
7,311

$
4,238

$
4,167

Third-party debt

$
2,270

$
1,414

$
1,421

Total liabilities

$
2,473

$
1,540

$
1,509

Our investment balance (2) (3)

$
1,393

$
435

$
514

Our weighted average ownership (3) (4)

27.1
%

14.9
%

17.8
%
Other Americas (5):

Number of ventures

1

2

2

Number of operating properties owned

203

213

209

Square feet

37

42

41

Total assets

$
2,107

$
2,793

$
2,679

Third-party debt

$
727

$
739

$
671

Total liabilities

$
761

$
814

$
754

Our investment balance (2)

$
564

$
845

$
851

Our weighted average ownership (4)

42.9
%

43.9
%

43.7
%
Europe (6) (7):

Number of ventures

4

4

4

Number of operating properties owned

709

700

694

Square feet

167

163

160

Total assets

$
12,767

$
10,853

$
11,291

Third-party debt

$
2,742

$
2,446

$
2,628

Total liabilities

$
3,748

$
3,283

$
3,620

Our investment balance (2) (3)

$
2,649

$
2,327

$
2,565

Our weighted average ownership (3) (4)

33.2
%

35.1
%

36.3
%
Asia:

Number of ventures

2

2

2

Number of operating properties owned

93

85

79

Square feet

40

36

34

Total assets

$
5,907

$
5,173

$
5,439

Third-party debt

$
2,186

$
1,947

$
2,004

Total liabilities

$
2,504

$
2,239

$
2,313

Our investment balance (2)

$
513

$
451

$
493

Our weighted average ownership (4)

15.1
%

15.1
%

15.0
%
Total:

Number of ventures

8

9

9

Number of operating properties owned

1,557

1,367

1,348

Square feet

332

291

284

Total assets

$
28,092

$
23,057

$
23,576

Third-party debt

$
7,925

$
6,546

$
6,724

Total liabilities

$
9,486

$
7,876

$
8,196

Our investment balance (2)

$
5,119

$
4,058

$
4,423

Our weighted average ownership (4)

28.7
%

27.9
%

28.9
%

Three Months Ended September 30,

Nine Months Ended September 30,

(in millions)

2017

2016

2017

2016

Revenues:

U.S.

$
160

$
100

$
369

$
296

Other Americas

60

63

190

179

Europe

266

232

758

724

Asia

95

91

272

253

Total revenues

$
581

$
486

$
1,589

$
1,452

Net earnings:

U.S.

$
64

$
11

$
115

$
47

Other Americas

19

20

58

53

Europe

63

77

229

218

Asia

30

30

147

74

Total net earnings

$
176

$
138

$
549

$
392

~~(1)~~

In July 2017, we contributed operating properties to USLF. We received cash proceeds and additional units, which increased our ownership interest in USLF to 27.1%. See Note 2 for more information on this transaction.

~~(2)~~

The difference between our ownership interest of a venture’s equity and our investment balance at September 30, 2017, and December 31, 2016, results principally from three types of transactions: (i) deferring a portion of the gains we recognize from a contribution of a real estate property to a venture ($667.7 million and $469.9 million, respectively); (ii) recording additional costs associated with our investment in a venture ($106.3 million and $124.1 million, respectively); and (iii) advances to a venture ($195.2 million and $166.1 million, respectively).

~~(3)~~

In April 2016, we redeemed a portion of our investment in PTELF and USLF for €185.0 million ($210.6 million) and $200.0 million, respectively. The amounts received for the redemptions were included in ~~Return of Investment from Unconsolidated Entities~~ ~~in the Consolidated Financial Statements of Cash Flows.~~

~~(4)~~

~~Represents our weighted average ownership interest in all co-investment ventures based on each entity’s contribution of total assets, before depreciation, net of other liabilities.~~

~~(5)~~

In August 2017, we acquired our partner’s interest in certain joint ventures in Brazil. See Note 2 for more information on this acquisition. Included in the Other Americas’ balances are nine properties aggregating 2.8 million square feet associated with the remaining Brazil joint ventures.

~~(6)~~

~~In January 2017, we sold our investment in ELV to our fund partner for $84.3 million and ELV contributed its properties to PTELF in exchange for equity interests.~~

~~(7)~~

In February 2017, we formed the Prologis UK Logistics Venture (“UKLV”), an unconsolidated co-investment venture in which we have a 15.0% ownership interest. UKLV will acquire land, develop buildings and operate and hold logistics real estate assets in the United Kingdom. Upon formation, we, along with our venture partner, committed £380.0 million ($508.9 million at September 30, 2017), of which our share is £57.0 million ($76.0 million at September 30, 2017). During the nine months ended September 30, 2017, we contributed 1.4 million square feet of stabilized properties, 0.6 million square feet of properties under development and 144.8 acres of land for an aggregate price of £269.5 million ($336.4 million). We expect to continue to contribute properties and land into UKLV.

Index

Equity Commitments Related to Certain Unconsolidated Co-Investment Ventures

~~The following table summarizes the remaining~~At March 31, 2023, our outstanding equity commitments ~~at September 30, 2017 (in millions):~~were $285.8 million, primarily for Prologis China Logistics Venture. The equity commitments expire from 2023 to 2028 if they have not been previously called. Typically, equity commitments are used for future development and acquisitions in the unconsolidated co-investment ventures.

Equity Commitments

Expiration Date
for Remaining Commitments

Prologis

Venture Partners

Total

Prologis Targeted U.S. Logistics Fund

$
-

$
195

$
195

2019
Prologis Targeted Europe Logistics Fund (1)

-

623

623

2018 – 2019
Prologis United Kingdom Logistics Venture (2)

37

207

244

2021
Prologis China Logistics Venture

294

1,665

1,959

2020 – 2024
Totals

$
331

$
2,690

$
3,021

~~(1)~~

~~Equity commitments are denominated in euro and reported in U.S. dollars based on an exchange rate of $1.18 U.S. dollars to the euro.~~

~~(2)~~

~~Equity commitments are denominated in British pounds sterling and reported in U.S. dollars based on an exchange rate of $1.34 U.S. dollars to the British pound sterling.~~

NOTE 4.5. ASSETS HELD FOR SALE OR CONTRIBUTION

We ~~have~~had investments in certain real estate properties that met the criteria to be classified as held for sale or contribution at ~~September 30, 2017,~~March 31, 2023 and December 31, ~~2016. These real estate~~2022. At the time of classification, these properties ~~are~~were expected to be sold to third parties or were recently stabilized and expected to be contributed to unconsolidated co-investment ventures within twelve months. The amounts included in Assets Held for Sale or Contributionrepresented real estate investment balances and the related assets and ~~liabilities for each property.~~liabilities.

Assets held for sale or contribution consisted of the following (dollars and square feet in thousands):


	March 31,		December 31,
	2023		2022
Number of operating properties		23		21
Square feet		5,771		4,061
Total assets held for sale or contribution	$	734,106	$	531,257
Total liabilities associated with assets held for sale or contribution – included in Other Liabilities	$	10,533	$	4,536

September 30,

December 31,

2017

2016

Number of operating properties

26

13

Square feet

4,952

4,167

Total assets held for sale or contribution

$
321,905

$
322,139

Total liabilities associated with assets held for sale or contribution – included in Other Liabilities

$
7,389

$
4,984

NOTE 6. DEBT

~~NOTE 5. DEBT~~

All debt is incurred by the ~~Operating Partnership. The Parent does not have any indebtedness, but guarantees the unsecured debt of the Operating Partnership.~~

OP or its consolidated subsidiaries. The following table summarizes our debt (dollars in thousands):


	March 31, 2023					December 31, 2022
	Weighted Average			Amount		Weighted Average			Amount
	Interest Rate (1)	Years (2)		Outstanding (3)		Interest Rate (1)	Years (2)		Outstanding (3)
Credit facilities	2.0%		2.3	$	212,553	4.2%		2.8	$	1,538,461
Senior notes	2.6%		10.7		22,399,340	2.3%		10.3		19,786,253
Term loans and unsecured other	2.4%		4.6		2,093,006	2.3%		4.9		2,106,592
Secured mortgage	3.2%		4.0		448,443	3.0%		4.3		444,655
Total	2.6%		10.0	$	25,153,342	2.5%		9.2	$	23,875,961

September 30, 2017

December 31, 2016

Weighted Average Interest Rate (1)

Amount Outstanding (2)

Weighted Average Interest Rate (1)

Amount Outstanding

Credit facilities

-

$
-

1.0
%

$
35,023

Senior notes

3.1
%

6,874,108

3.3
%

6,417,492

Term loans

1.5
%

1,620,688

1.4
%

1,484,523

Unsecured other

6.1
%

13,994

6.1
%

14,478

Secured mortgages

5.7
%

812,371

4.9
%

979,585

Secured mortgages of consolidated entities (3)

2.8
%

399,904

3.0
%

1,677,193

Totals

3.0
%

$
9,721,065

3.2
%

$
10,608,294

(1)

The weighted average interest rates represent the effective interest rates (including amortization of debt issuance costs and noncash premiums or discounts) at the end of the period for the debt outstanding and include the impact of designated interest rate swaps, which effectively fix the interest rate on certain variable rate debt.

~~(1)~~

The interest rates presented represent the effective interest rates (including amortization of debt issuance costs and the noncash premiums or discounts) at the end of the period for the debt outstanding.

(2)

The weighted average years represents the remaining maturity in years on the debt outstanding at period end.

~~(2)~~

Included in the outstanding balances are borrowings denominated in non-U.S. dollars, principally: euro ($3.7 billion), Japanese yen ($1.3 billion), British pounds sterling ($0.7 billion) and Canadian dollars ($0.5 billion).

(3)

We borrow in the functional currencies of the countries where we invest. Included in the outstanding balances were borrowings denominated in the following currencies:

~~(3)~~

March 31, 2023

December 31, 2022

Weighted Average Interest Rate

Amount Outstanding

% of Total

Weighted Average Interest Rate

Amount Outstanding

% of Total

British pound sterling

2.1
%

$
1,263,807

5.0
%

2.1
%

$
1,228,483

5.1
%

Canadian dollar

4.9
%

813,415

3.2
%

4.5
%

814,491

3.4
%

Euro

1.7
%

9,100,801

36.2
%

1.3
%

7,991,301

33.5
%

Japanese yen

1.0
%

3,367,643

13.4
%

1.0
%

3,308,009

13.9
%

U.S. dollar

3.6
%

10,607,676

42.2
%

3.6
%

10,533,677

44.1
%

Total

2.6
%

$
25,153,342

100.0
%

2.5
%

$
23,875,961

100.0
%

In March 2017 we acquired all of our partner’s interest in NAIF, which resulted in $956.0 million of secured mortgage debt to become wholly-owned and reported as secured mortgages, as discussed in Note 6. In July 2017, USLF assumed these secured mortgages in conjunction with our contribution of the associated real estate properties, as discussed in Note 2.

Credit Facilities

~~We have a~~At March 31, 2023, we had two global senior credit ~~facility (the “Global Facility”), under which we~~facilities: the 2021 Global Facility and the 2022 Global Facility. We may draw on both facilities in British pounds sterling, Canadian dollars, euro, Japanese yen, Mexican pesos and U.S. dollars on a revolving basis up to ~~$3.0~~$2.0 billion and $3.0 billion (subject to currency fluctuations). on the 2021 and 2022 Global Facility, respectively. The 2021 Global Facility is scheduled to initially mature in April 2024 and the 2022 Global Facility in June 2026; however, we can extend the maturity date for each facility by six months on two occasions, subject to the payment of extension fees. We have the ability to increase the

Index

2021 Global Facility to ~~$3.8~~$2.5 billion and the 2022 Global Facility to $4.0 billion, subject to currency fluctuations and obtaining additional lender commitments.

On April 5, 2023, we amended and restated the 2021 Global Facility as the 2023 Global Facility and upsized its borrowing capacity to $3.0 billion (subject to currency fluctuations). The 2023 Global Facility is scheduled to initially mature in June 2027; however, we can extend the maturity date for the facility by six months on two occasions, subject to the payment of extension fees. We have the ability to increase the 2023 Global Facility to $4.0 billion, subject to currency fluctuations and obtaining additional lender commitments.

We also have a Japanese yen revolver (the “Yen Credit Facility”) with total commitments of ¥55.0 billion ($413.0 million at March 31, 2023). We have the ability to increase the borrowing capacity of the Yen Credit Facility to ¥75.0 billion ($563.2 million at March 31, 2023), subject to obtaining additional lender commitments. The Yen Credit Facility is initially scheduled to mature in July 2024; however, we may extend the maturity date for one year, subject to the payment of extension fees.

We refer to the 2021 Global Facility, the 2022 Global Facility and the Yen Credit Facility, collectively, as our “Credit Facilities.” Pricing ~~under~~for the ~~Global Facility,~~Credit Facilities, including the spread over ~~LIBOR,~~the applicable benchmark and the rates applicable to facility fees and letter of credit fees, varies based on the public debt ratings of the Operating Partnership. The Global Facility is 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 payment of extension fees.OP.

We also have a Japanese yen revolver (the “Revolver”). In February 2017, we renewed and amended the Revolver to increase our availability from ¥45.0 billion to ¥50.0 billion ($444.4 million at September 30, 2017). We have the ability to increase the Revolver to ¥65.0 billion ($577.8 million at September 30, 2017), subject to obtaining additional lender commitments. Pricing under the Revolver, including the spread over LIBOR, facility fees and letter of credit fees, varies based on the public debt ratings of the Operating

Partnership. The Revolver is scheduled to mature in February 2021; however, we may extend the maturity date for one year, subject to the satisfaction of certain conditions and payment of extension fees.

~~We refer to the Global Facility and the Revolver, collectively, as our “Credit Facilities.”~~

The following table summarizes information about our ~~Credit Facilities~~available liquidity at ~~September 30, 2017~~March 31, 2023 (in millions):



Aggregate lender commitments
Credit Facilities	$	5,473
Less:
Borrowings outstanding		213
Outstanding letters of credit		39
Current availability		5,221
Cash and cash equivalents		523
Total liquidity	$	5,744

Aggregate lender commitments

$
3,476

Less:

Borrowings outstanding

-

Outstanding letters of credit

38

Current availability

$
3,438

Senior Notes

~~In June 2017, we issued £500.0 million ($645.3 million)~~The following table summarizes the issuances of senior notes ~~bearing an interest~~during the three months ended March 31, 2023 (principal in thousands):


	Aggregate Principal				Issuance Date Weighted Average
Issuance Date	Borrowing Currency		USD (1)		Interest Rate	Years	Maturity Dates
January	€	1,250,000	$	1,354,125	4.1%	13.8	January 2030 – 2043
March	$	1,200,000	$	1,200,000	4.9%	17.7	June 2033 – 2053
Total			$	2,554,125	4.5%	15.6

(1)

The exchange rate ~~of 2.25%, maturing in June 2029, at 99.94% of par value for an all-in-rate of 2.30%. Following the issuance, we paid cash of $652.0 million~~used to ~~redeem $618.3 million of previously issued senior notes before the maturity date in an effort to reduce our borrowing costs and extend our debt maturities. In 2017, we recognized a loss in~~ ~~Gains (Losses) on Early Extinguishment of Debt, Net~~ of $30.6 million, primarily from this transaction, for 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.

~~Term Loans~~

~~In March 2017, we entered~~calculate into ~~an unsecured senior term loan agreement (the “2017 Yen Term Loan”) under which we can draw in Japanese yen, of which ¥7.2 billion ($64.0 million at~~ ~~September~~ ~~30, 2017) matures in March 2027 and bears an interest rate of 0.92% and ¥4.8 billion ($42.7 million at~~ ~~September~~ 30, 2017) matures in March 2028 and bears an interest rate of 1.01%. In the first quarter of 2017, we borrowed ¥12.0 billion ($107.3 million), causing the 2017 Yen Term Loan to be fully drawn at September 30, 2017.

In May 2017, we renewed and amended our existing senior term loan agreement (the “2017 Term Loan,” formerly the “Euro Term Loan”) under which loans can be obtained in British pounds sterling, euro, Japanese yen and U.S. dollars ~~in an aggregate amount not to exceed $500.0 million. We may increase~~was the ~~borrowings up to $1.0 billion, subject to obtaining additional lender commitments. We may also pay down and reborrow under this term loan. The 2017 Term Loan bears an interest~~spot rate ~~of LIBOR plus 0.90% and is scheduled to mature in May 2020; however, we may extend~~at the maturity date twice, by one year each, subject to the satisfaction of certain conditions and the payment of an extension fee. In the second quarter of 2017, we borrowed $500.0 million. In the third quarter of 2017, we repaid this balance and subsequently borrowed $160.0 million, which remained outstanding at September 30, 2017.settlement date.

Long-Term Debt Maturities

~~Principal~~Scheduled principal payments due on our debt for the remainder of ~~2017~~2023 and for each ~~of the years in~~year through the period ~~ending~~ended December 31, ~~2026,~~2027, and thereafter were as follows at ~~September 30, 2017~~March 31, 2023 (in thousands):


	Unsecured
	Credit		Senior			Term Loans			Secured
Maturity	Facilities		Notes			and Other			Mortgage			Total
2023 (1)	$	-	$	-		$	-		$	31,619		$	31,619
2024 (1) (2)		98,365		326,250			-			95,292			519,907
2025 (3)		-		37,544			722,420			153,480			913,444
2026 (4)		114,188		1,308,918			638,310			67,805			2,129,221
2027		-		1,738,332			53,787			4,156			1,796,275
Thereafter		-		19,569,982			682,140			89,135			20,341,257
Subtotal		212,553		22,981,026			2,096,657			441,487			25,731,723
Unamortized premiums (discounts), net		-		(481,289	)		946			8,554			(471,789	)
Unamortized debt issuance costs, net		-		(100,397	)		(4,597	)		(1,598	)		(106,592	)
Total	$	212,553	$	22,399,340		$	2,093,006		$	448,443		$	25,153,342

Index

Unsecured

Senior

Term Loans

Secured

Maturity

Notes

and Other

Mortgage Debt

Total

2017 (1)

$
-

$
453

$
3,180

$
3,633

2018 (1)

175,000

934

404,668

580,602

2019

-

1,013

446,324

447,337

2020 (2)

910,437

161,077

12,401

1,083,915

2021

1,326,420

910

14,804

1,342,134

2022

826,420

445,170

10,815

1,282,405

2023

850,000

921,982

33,866

1,805,848

2024

826,420

874

133,551

960,845

2025

750,000

950

145,671

896,621

2026

590,300

591

1,232

592,123

Thereafter

669,441

112,320

1,169

782,930

Subtotal

6,924,438

1,646,274

1,207,681

9,778,393

Premiums (discounts), net

(22,100
)

-

8,554

(13,546
)
Debt issuance costs, net

(28,230
)

(11,592
)

(3,960
)

(43,782
)
Totals

$
6,874,108

$
1,634,682

$
1,212,275

$
9,721,065

(1)

We expect to repay the amounts maturing in the next twelve months with cash generated from operations, proceeds from dispositions of real estate properties, or as necessary, with additional borrowings.

~~(1)~~

We expect to repay the amounts maturing in 2017 and 2018 with cash generated from operations, proceeds from the dispositions of real estate properties or, as necessary, with borrowings on our Credit Facilities.

~~(2)~~

~~Included in the 2020 maturities is the 2017 Term Loan that can be extended until 2022, as discussed above.~~

(2)

Included in the 2024 maturities is the Yen Credit Facility that can be extended until 2025.

(3)

Included in the 2025 maturities is a Canadian term loan that we entered into in 2022 that can be extended until 2027.

(4)

Included in the 2026 maturities is the 2022 Global Facility that can be extended until 2027.

Financial Debt Covenants

~~We have $6.9 billion of~~Our senior notes, ~~and $1.6 billion of~~ term loans and Credit Facilities outstanding at ~~September 30, 2017, under three separate indentures, as supplemented, which are~~March 31, 2023 were subject to certain financial ~~covenants. We are also subject to financial~~ covenants under ~~our Credit Facilities and certain secured mortgage debt.~~their related documents. At ~~September 30, 2017,~~March 31, 2023, we were in compliance with all of our financial debt covenants.

Guarantee of Finance Subsidiary Debt

We have finance subsidiaries as part of our operations in Europe (Prologis Euro Finance LLC), Japan (Prologis Yen Finance LLC) and the U.K. (Prologis Sterling Finance LLC) in order to mitigate our foreign currency risk by borrowing in the currencies in which we invest. These entities are 100% indirectly owned by the OP and all unsecured debt issued or to be issued by each entity is or will be fully and unconditionally guaranteed by the OP. There are no restrictions or limits on the OP’s ability to obtain funds from its subsidiaries by dividend or loan. In reliance on Rule 13-01 of Regulation S-X, the separate financial statements of Prologis Euro Finance LLC, Prologis Yen Finance LLC and Prologis Sterling Finance LLC are not provided.

NOTE 6.7. 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 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 redeemable for cash or, at our option, shares of the Parent’s common stock, generally at a rate of one share of common stock to one ~~unit.~~limited partnership unit. We also consolidate ~~several~~certain entities in which we do not own 100% of the equity ~~and~~but the ~~units~~equity of ~~the entity are~~these entities is not ~~convertible or redeemable.~~exchangeable into our common stock.

Prologis, Inc.

The noncontrolling interests of the Parent include the noncontrolling interests ~~presented in~~described above for the ~~Operating Partnership,~~OP, as well as the ~~common~~ limited partnership units in the ~~Operating Partnership~~OP that are not owned by the Parent. The outstanding limited partnership units receive quarterly cash distributions equal to the quarterly dividends paid on our common stock pursuant to the terms of the applicable partnership agreements.

The following table summarizes ~~our ownership percentages and noncontrolling interests and the~~these entities (dollars in thousands):


	Our Ownership Percentage						Noncontrolling Interests				Total Assets				Total Liabilities
	Mar 31, 2023			Dec 31, 2022			Mar 31, 2023		Dec 31, 2022		Mar 31, 2023		Dec 31, 2022		Mar 31, 2023		Dec 31, 2022
Prologis U.S. Logistics Venture		55.0	%		55.0	%	$	3,170,301	$	3,182,858	$	7,200,384	$	7,225,438	$	150,401	$	158,453
Other consolidated entities (1)	various			various				134,342		134,909		1,679,510		1,737,311		253,241		259,524
Prologis, L.P.								3,304,643		3,317,767		8,879,894		8,962,749		403,642		417,977
Limited partners in Prologis, L.P. (2)(3)								1,325,368		1,308,044		-		-		-		-
Prologis, Inc.							$	4,630,011	$	4,625,811	$	8,879,894	$	8,962,749	$	403,642	$	417,977

(1)

Includes two partnerships that have issued limited partnership units to third parties, as discussed above, along with various other consolidated ~~entities’ total assets and liabilities~~entities. The limited partnership units outstanding at ~~September 30, 2017,~~March 31, 2023 and December 31, ~~2016 (dollars~~2022 were exchangeable into cash or, at our option, 0.3 million shares of the Parent’s common stock.

(2)

We had 8.6 million Class A Units that were convertible into 8.1 million and 8.0 million limited partnership units of the OP at March 31, 2023 and December 31, 2022, respectively.

(3)

There were limited partnership units in ~~thousands):~~the OP, excluding the Class A Units, that were exchangeable into cash or, at our option, 9.7 million and 10.0 million shares of the Parent’s common stock, at March 31, 2023 and December 31, 2022, respectively. Also included are the vested OP Long-Term Incentive Plan Units (“LTIP Units”) associated with our long-term compensation plans of 5.4 million and 4.6 million shares of the Parent’s common stock at March 31, 2023 and December 31, 2022, respectively. See further discussion of LTIP Units in Note 8.

Index

Our Ownership Percentage

Noncontrolling Interests

Total Assets

Total Liabilities

2017

2016

2017

2016

2017

2016

2017

2016

Prologis U.S. Logistics Venture

55.0
%

55.0
%

$
2,512,472

$
2,424,800

$
6,105,053

$
6,201,278

$
515,962

$
797,593

Prologis North American Industrial
     Fund (1)
N/A

66.1
%

-

486,648

-

2,479,072

-

1,038,708

Prologis Brazil Logistics Partners
     Fund I (2)
N/A

50.0
%

-

61,836

-

131,581

-

720

Other consolidated entities (3)
various

various

79,072

99,185

845,660

866,821

30,396

34,073

Prologis, L.P. noncontrolling
     interests

2,591,544

3,072,469

6,950,713

9,678,752

546,358

1,871,094

Limited partners in Prologis, L.P.
    (4) (5)

423,961

394,590

-

-

-

-

Prologis, Inc. noncontrolling
     interests

$
3,015,505

$
3,467,059

$
6,950,713

$
9,678,752

$
546,358

$
1,871,094

~~(1)~~

~~In March 2017, we acquired all of our partner’s interest for $710.2 million. The difference between the amount we paid and the noncontrolling interest balance was adjusted through~~ ~~Additional Paid-in Capital~~ ~~with no gain or loss recognized.~~

~~(2)~~

~~In March 2017, we acquired all of our partner’s interest for $79.8 million. The difference between the amount we paid and the noncontrolling interest balance was adjusted through~~ ~~Additional Paid-in Capital~~ with no gain or loss recognized. At December 31, 2016, the assets of the Prologis Brazil Logistics Partners Fund I were primarily investments in unconsolidated entities of $113.1 million. For additional information on our unconsolidated investments, see Note 3.

~~(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 September 30, 2017, and December 31, 2016, limited partnership units were redeemable for cash or, at our option, 1.0 million and 1.8 million shares of the Parent’s common stock. During the first nine months of 2017, limited partnership units were redeemed for 0.8 million shares of the Parent’s common stock.

~~(4)~~

We had 8.9 million Class A Units that were convertible into 8.6 million and 8.7 million common limited partnership units of the Operating Partnership at September 30, 2017 and December 31, 2016, respectively.

~~(5)~~

At September 30, 2017, and December 31, 2016, excluding the Class A Units, there were common limited partnership units in the Operating Partnership outstanding that were redeemable for cash or, at our option, 4.1 million shares and 4.6 million shares of the Parent’s common stock with a fair value of $262.2 million and $241.8 million, respectively, based on the closing stock price of the Parent’s common stock. In 2017, unitholders redeemed 0.7 million common limited partnership units for an equal number of shares of the Parent’s common stock with a value of $18.8 million. At September 30, 2017, and December 31, 2016, there were 3.7 million and 2.2 million LTIP Units (as defined in Note 7) outstanding, respectively, associated with our long-term compensation plan that are convertible into common units of the Operating Partnership after they vest and other applicable conditions are met.

NOTE 7.8. LONG-TERM COMPENSATION

Equity-Based Compensation Plans and Programs

Prologis Outperformance Plan (“POP”)

~~Participation~~We have allocated participation points ~~represent~~or a ~~portion~~percentage of the compensation pool to participants under our POP corresponding to three-year performance periods beginning every January 1. The fair value of the awards is measured at the grant date and amortized over the period from the grant date to the date at which the awards vest, which ranges from three to ten years. The performance hurdle (“Outperformance Hurdle”) at the end of the initial three-year performance period requires our three-year compound annualized total stockholder return (“TSR”) to exceed a threshold set at the three-year compound annualized TSR for the Morgan Stanley Capital International (“MSCI”) US REIT Index for the same period plus 100 basis points. If the Outperformance Hurdle is met, a compensation pool ~~that can~~will be ~~earned if and when certain performance criteria are met under~~formed equal to 3% of the ~~POP for the applicable~~excess value created, subject to a maximum as defined by each performance period. POP awards cannot be paid at a time when we meet the outperformance hurdle yet our absolute TSR is negative. If after seven years our absolute TSR has not been positive, the awards will be forfeited.

We granted participation points for the ~~2017~~2023 – ~~2019~~2025 performance period in January ~~2017,~~2023, with a fair value of ~~$20.4~~$28.3 million using a Monte Carlo valuation model that assumed a risk-free interest rate of ~~1.49%~~4.2% and an expected volatility of ~~22.2%.~~35.0% for Prologis and 31.0% for the MSCI US REIT Index. The 2023 – 2025 performance period has an absolute maximum cap of $100.0 million. If an award is earned at the end of the initial three-year performance period, then 20% of the POP award is paid at the end of the initial performance period and the remaining 80% is subject to additional seven-year cliff vesting. The 20% that is paid at the end of the initial three-year performance period is subject to an additional three-year holding requirement. Awards are in the form of common stock, restricted stock units, POP LTIP Units and LTIP Units.

The ~~POP performance criteria were~~Outperformance Hurdle was met for the ~~2014~~2020 – ~~2016~~2022 performance period, which resulted in awards ~~for this performance period~~of $100.0 million being ~~earned. An aggregate performance pool of $62.2 million was~~earned at December 31, 2022 and awarded in January ~~2017~~2023. Additionally, awards of $22.4 million were earned at December 31, 2022 and awarded in January 2023 for prior performance periods related to the compensation pool in excess of the initial award based on the terms of the POP awards granted prior to 2018. The tables below include POP awards that were earned but are unvested, while any vested awards are reflected within the Consolidated Statements of Equity and Capital. The initial grant date fair value derived using a Monte Carlo valuation model was used in determining the grant date fair value per unit in the tables below.

Other Equity-Based Compensation Plans and Programs

Our other equity-based compensation plans and programs include (i) the Prologis Promote Plan (“PPP”); (ii) the annual long-term incentive (“LTI”) equity award program (“Annual LTI Award”); and (iii) the annual bonus exchange program. Awards under these plans and programs may be issued in the form of restricted stock units (“RSUs”) or LTIP Units at the participant’s election. RSUs and LTIP Units are valued based on the market price of the Parent’s common stock ~~or vested POP LTIP Units.~~on the date the award is granted and the grant date value is charged to compensation expense over the service period.

~~Prologis Promote Plan (“PPP”)~~Summary of Award Activity

~~The following table details the equity awards granted under the PPP for the nine months ended~~ ~~September~~ ~~30 (in thousands):~~RSUs

2017

2016

RSUs granted

88

53

Grant date fair value of RSUs granted

$
4,800

$
2,300

LTIP Units granted

203

114

Grant date fair value of LTIP Units granted

$
11,100

$
4,900

~~Prologis Outperformance Plan Operating Partnership Long-Term Incentive Plan Units (“POP LTIP Units”)~~

The following table summarizes the activity for ~~the unvested POP LTIP Units~~RSUs for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 (units in thousands):


				Weighted Average
	Unvested RSUs			Grant Date Fair Value
Balance at January 1, 2023		1,533		$	100.59
Granted		764			96.37
Vested and distributed		(333	)		115.60
Forfeited		(11	)		129.01
Balance at March 31, 2023		1,953		$	96.22

LTIP Units

	~~Number of Unvested~~
	~~POP LTIP Units~~
~~Balance at January 1, 2017~~		~~3,490~~
~~Granted~~		38
~~Vested POP LTIP Units (1)~~		~~(698~~	)
~~Forfeited~~		~~(576~~	)
~~Balance at September 30, 2017~~		~~2,254~~

~~(1)~~

Vested units were based on the POP performance criteria being met for the 2014 – 2016 performance period and represented the earned award amount. Vested units are included in LTIP Units in the table below. Any excess outstanding unvested POP LTIP Units for the 2014 – 2016 performance period were forfeited to the extent not earned.

~~Operating Partnership Long-Term Incentive Plan Units (“LTIP Units”)~~

The following table summarizes the activity for LTIP Units for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 (units in thousands):


	Unvested			Weighted Average
	LTIP Units			Grant Date Fair Value
Balance at January 1, 2023		4,214		$	73.31
Granted		1,292			78.94
Vested LTIP Units		(688	)		105.99
Balance at March 31, 2023		4,818		$	70.16

Index

Number of

Weighted Average

Number of

LTIP Units

Grant-Date Fair Value

LTIP Units Vested

Balance at January 1, 2017

2,219

$
40.81

743

Granted

1,032

Vested POP LTIP Units

698

Conversion to common limited partnership units

(234
)

Balance at September 30, 2017

3,715

$
45.54

1,868

~~Restricted Stock Units (“RSUs”)~~

~~The following table summarizes the activity for RSUs for the nine months ended September 30, 2017 (units in thousands):~~

Number of

Weighted Average

Number of

RSUs

Grant-Date Fair Value

RSUs Vested

Balance at January 1, 2017

1,617

$
40.58

125

Granted

757

Vested and distributed

(802
)

Forfeited

(63
)

Balance at September 30, 2017

1,509

$
45.35

106

~~Stock Options~~

We have 0.8 million stock options outstanding and exercisable at September 30, 2017, with a weighted average exercise price of $30.81. The aggregate intrinsic value of exercised options was $24.4 million and $43.9 million for the nine months ended September 30, 2017, and 2016, respectively. No stock options were granted in 2017 or 2016.

NOTE 8.9. EARNINGS PER COMMON SHARE OR UNIT

We determine basic earnings per share or unit based on the weighted average number of shares of common stock or units outstanding during the period. We compute diluted earnings per 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.

The computation of our basic and diluted earnings per share and unit was as follows (in thousands, except per share and unit amounts):


	Three Months Ended
	March 31,
Prologis, Inc.	2023		2022
Net earnings attributable to common stockholders – Basic		463,170	$	1,149,254
Net earnings attributable to exchangeable limited partnership units (1)		11,743		32,338
Adjusted net earnings attributable to common stockholders – Diluted	$	474,913	$	1,181,592

Weighted average common shares outstanding – Basic		923,888		740,368
Incremental weighted average effect on exchange of limited partnership units (1)		23,535		21,089
Incremental weighted average effect of equity awards		4,201		4,060
Weighted average common shares outstanding – Diluted (2)		951,624		765,517

Net earnings per share attributable to common stockholders:
Basic	$	0.50	$	1.55
Diluted	$	0.50	$	1.54


	Three Months Ended
	March 31,
Prologis, L.P.	2023			2022
Net earnings attributable to common unitholders	$	474,819		$	1,181,525
Net earnings attributable to Class A Units		(4,045	)		(12,415	)
Net earnings attributable to common unitholders – Basic		470,774			1,169,110
Net earnings attributable to Class A Units		4,045			12,415
Net earnings attributable to exchangeable other limited partnership units		94			67
Adjusted net earnings attributable to common unitholders – Diluted	$	474,913		$	1,181,592

Weighted average common partnership units outstanding – Basic		939,054			753,159
Incremental weighted average effect on exchange of Class A Units		8,070			7,999
Incremental weighted average effect on exchange of other limited partnership units		299			299
Incremental weighted average effect of equity awards of Prologis, Inc.		4,201			4,060
Weighted average common units outstanding – Diluted (2)		951,624			765,517

Net earnings per unit attributable to common unitholders:
Basic	$	0.50		$	1.55
Diluted	$	0.50		$	1.54

(1)

Earnings allocated to the exchangeable OP units not held by the Parent have been included in the numerator and exchangeable common units have been included in the denominator for the purpose of computing diluted earnings per share for all periods as the per share and unit amount is ~~as follows:~~the same.

(2)

Our total weighted average potentially dilutive shares and units outstanding consisted of the following:


	Three Months Ended
	March 31,
	2023		2022
Class A Units		8,070		7,999
Other limited partnership units		299		299
Equity awards		7,773		5,839
Prologis, L.P.		16,142		14,137
Common limited partnership units		15,166		12,791
Prologis, Inc.		31,308		26,928

Index

Three Months Ended

Nine Months Ended

September 30,

September 30,

Prologis, Inc.

2017

2016

2017

2016

Net earnings attributable to common stockholders – Basic

$
876,218

$
279,255

$
1,346,416

$
762,679

Net earnings attributable to redeemable limited partnership unitholders (1)

24,362

7,713

38,127

24,479

Adjusted net earnings attributable to common stockholders – Diluted

$
900,580

$
286,968

$
1,384,543

$
787,158

Weighted average common shares outstanding – Basic

531,288

527,288

530,036

525,462

Incremental weighted average effect on redemption of limited partnership units (1)

15,641

14,568

16,150

17,156

Incremental weighted average effect of equity awards

7,234

5,344

5,432

2,610

Weighted average common shares outstanding – Diluted (2)

554,163

547,200

551,618

545,228

Net earnings per share attributable to common stockholders:

Basic

$
1.65

$
0.53

$
2.54

$
1.45

Diluted

$
1.63

$
0.52

$
2.51

$
1.44

Three Months Ended

Nine Months Ended

September 30,

September 30,

Prologis, L.P.

2017

2016

2017

2016

Net earnings attributable to common unitholders

$
900,331

$
286,943

$
1,383,529

$
784,917

Net earnings attributable to Class A common unitholders

(14,233
)

(4,641
)

(21,911
)

(12,769
)
Net earnings attributable to common unitholders – Basic

886,098

282,302

1,361,618

772,148

Net earnings attributable to Class A common unitholders

14,233

4,641

21,911

12,769

Net earnings attributable to limited partnership unitholders

249

25

1,014

2,241

Adjusted net earnings attributable to common unitholders – Diluted

$
900,580

$
286,968

$
1,384,543

$
787,158

Weighted average common partnership units outstanding – Basic

537,257

532,934

536,021

531,985

Incremental weighted average effect on conversion of Class A Units

8,588

8,753

8,625

8,798

Incremental weighted average effect on redemption of limited partnership units into
common stock of Prologis, Inc.

1,084

169

1,540

1,835

Incremental weighted average effect of equity awards of Prologis, Inc.

7,234

5,344

5,432

2,610

Weighted average common partnership units outstanding – Diluted (2)

554,163

547,200

551,618

545,228

Net earnings per unit attributable to common unitholders:

Basic

$
1.65

$
0.53

$
2.54

$
1.45

Diluted

$
1.63

$
0.52

$
2.51

$
1.44

~~(1)~~

Earnings allocated to the redeemable Operating Partnership units not held by the Parent has been included in the numerator and redeemable Operating Partnership units have been included in the denominator for the purpose of computing diluted earnings per share for all periods as the per share and unit amount is the same.

~~(2)~~

~~Our total potentially dilutive shares and units outstanding consisted of the following:~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Total weighted average potentially dilutive limited partnership units

9,672

10,587

10,166

10,633

Total potentially dilutive stock awards

9,934

9,220

9,038

7,783

Total Prologis, L.P.

19,606

19,807

19,204

18,416

Limited partners in Prologis, L.P.

5,969

5,646

5,984

6,523

Total Prologis, Inc.

25,575

25,453

25,188

24,939

NOTE 9.10. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Derivative Financial Instruments

In the normal course of business, our operations are exposed to market risks, including the effect of changes in foreign currency exchange rates and interest rates. ~~To manage these risks, we~~We may enter into derivative ~~contracts, such as foreign currency contracts to manage foreign currency exposure, and interest rate swaps to manage the effect of interest rate fluctuations. We do not use derivative~~ financial instruments for trading or speculative purposes. Our derivative financial instruments are customized transactions and are not exchange-traded. Management reviews our hedging program, derivative positions and overall risk management strategy on a regular basis. We enter into only those transactions we believe will be highly effective at offsetting theto offset these underlying ~~risk.~~market risks. There have been no significant changes in our policy or strategy from what was disclosed in our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016.~~2022.

The following table presents the fair value ~~and classification~~ of our derivative ~~instruments (in thousands):~~

September 30, 2017

December 31, 2016

Asset

Liability

Asset

Liability

Net investment hedges

British pound sterling denominated

$
-

$
-

$
7,439

$
-

Canadian dollar denominated

-

7,683

1,245

-

Forwards and options (1)

British pound sterling denominated

4,932

7,158

16,985

-

Canadian dollar denominated

-

1,709

831

197

Euro denominated

-

12,144

10,933

-

Japanese yen denominated

6,671

1,100

9,246

1,071

Interest rate hedges

8,707

-

435

-

Total fair value of derivatives

$
20,310

$
29,794

$
47,114

$
1,268

~~(1)~~

As discussed below, these foreign currency options are not designated as hedges. We recognized unrealized losses of $12.3 million and $44.8 million for the three and nine months ended September 30, 2017, respectively, from the change in value of our outstanding foreign currency options within ~~Foreign Currency and Derivative Losses, Net~~ in the Consolidated Statements of Income. We recognized unrealized gains of $3.1 million and losses of $10.4 million for the three and nine months ended September 30, 2016, respectively, from the change in value of our outstanding foreign currency options.

~~Foreign Currency~~

We primarily manage our foreign currency exposure by borrowing in the currencies in which we invest. 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 of the translation from the fluctuations in exchange rates, we may designate this debt as a nonderivative financial instrument hedge. We also hedge our investments in certain international subsidiaries using foreign currency derivative contracts (net investment hedges) 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. To the extent we have an effective hedging relationship, we report all changes in fair value of the hedged portion of the nonderivative financial instruments recognized within Other Assets and ~~net investment hedges in equity in the foreign currency translation component of~~ ~~Accumulated~~ Other ~~Comprehensive Loss (“AOCI”)~~ inLiabilities on the Consolidated Balance ~~Sheets. These amounts offset~~Sheets (in thousands):


	March 31, 2023				December 31, 2022
	Asset		Liability		Asset		Liability
Undesignated derivatives
Foreign currency contracts
Forwards
Brazilian real	$	-	$	741	$	35	$	494
British pound sterling		20,796		915		29,187		648
Canadian dollar		8,316		10		12,074		2
Chinese renminbi		443		434		657		364
Euro		41,794		3,051		51,317		2,801
Japanese yen		33,454		807		34,022		2,344
Swedish krona		5,568		26		6,292		-

Designated derivatives
Foreign currency contracts
Net investment hedges
British pound sterling		16,305		555		23,534		-
Canadian dollar		18,002		-		24,552		-
Chinese renminbi		-		34		-		-

Interest rate swaps
Cash flow hedges
Euro		2,842		-		44,982		-
U.S. dollar		-		-		584		29
Total fair value of derivatives	$	147,520	$	6,573	$	227,236	$	6,682

Undesignated Derivative Financial Instruments

Foreign Currency Contracts

The following table summarizes the ~~translation adjustments on the underlying net assets~~activity of our ~~foreign investments, which we also record in~~ ~~AOCI. The changes in fair value of the portion of the nonderivative financial instruments that are not designated as hedges are recorded in~~ ~~Foreign Currency and Derivative 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 net operating income of our international subsidiaries. These 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 in ~~Foreign Currency and Derivative Losses, Net~~.

~~The following tables summarize the activity in our~~undesignated foreign currency contracts for the ~~nine~~three months ended ~~September 30~~March 31 (in millions, except for weighted average forward rates and number of active contracts):


	2023																		2022
	CAD			EUR			GBP			JPY			Other			Total			CAD			EUR			GBP			JPY			SEK			Other			Total
Notional amounts at January 1 ($)		283			601			349			331			81			1,645			175			749			383			250			85			20			1,662
New contracts ($)		6			9			49			27			41			132			45			350			(21	)		61			9			13			457
Matured, expired or settled contracts ($)		(54	)		(43	)		(22	)		(21	)		(7	)		(147	)		(16	)		(182	)		(19	)		(22	)		(4	)		(4	)		(247	)
Notional amounts at March 31 ($)		235			567			376			337			115			1,630			204			917			343			289			90			29			1,872

Weighted average forward rate at March 31		1.29			1.18			1.30			110.58									1.27			1.19			1.27			104.39			9.30
Active contracts at March 31		88			94			100			97									81			93			77			85			84

Index

2017

Foreign Currency Contracts

Local Currency

Net Investment Hedges

Forwards and Options

CAD

GBP

CAD

EUR

GBP

JPY

Notional amounts at January 1

$
133

£
31

$
50

€
174

£
48

¥
15,500

New contracts

133

100

24

56

107

4,000

Matured, expired or settled contracts

(133
)

(131
)

(22
)

(72
)

(48
)

(5,400
)
Notional amounts at September 30

$
133

£
-

$
52

€
158

£
107

¥
14,100

Foreign Currency Contracts

U.S. Dollar

Net Investment Hedges

Forwards and Options

Notional amounts at January 1

$
100

$
46

$
38

$
197

$
78

$
144

New contracts

99

127

19

63

137

38

Matured, expired or settled contracts

(100
)

(173
)

(17
)

(81
)

(75
)

(49
)
Notional amounts at September 30

$
99

$
-

$
40

$
179

$
140

$
133

Weighted average forward
rate at September 30

1.34

-

1.30

1.13

1.31

106.11

Active contracts at September 30

2

-

18

23

19

29

The following table summarizes the undesignated derivative financial instruments exercised and outstanding recognized in realized and unrealized gains (losses), respectively, in Foreign Currency and Derivative Gains and Other Income, Net in the Consolidated Statements of Income (in millions, except for number of exercised contracts):


	Three Months Ended
	March 31,
	2023			2022
Exercised contracts		52			32
Realized gains on the matured, expired or settled contracts	$	14		$	15
Unrealized gains (losses) on the change in fair value of outstanding contracts	$	(14	)	$	15

2016

Foreign Currency Contracts

Local Currency

Net Investment Hedges

Forwards and Options

CAD

GBP

JPY

EUR

GBP

JPY

Other

Notional amounts at January 1

$
-

£
238

¥
-

€
275

£
97

¥
12,840

New contracts

133

60

11,189

321

-

15,460

Matured, expired or settled contracts

-

(60
)

(11,189
)

(440
)

(36
)

(10,940
)

Notional amounts at September 30

$
133

£
238

¥
-

€
156

£
61

¥
17,360

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

85

99

359

-

147

15

Matured, expired or settled contracts

-

(100
)

(99
)

(492
)

(55
)

(95
)

(21
)
Notional amounts at September 30

$
100

$
371

$
-

$
177

$
93

$
161

$
44

~~(1)~~

During the nine months ended September 30, 2017, and 2016, we exercised 33 and 41 forward and option contracts, respectively. We realized gains of $1.6 million and $10.5 million for the three and nine months ended September 30, 2017, respectively, and losses of $3.1 million and $1.2 million for the three and nine months ended September 30, 2016, respectively, in ~~Foreign Currency and Derivative Losses, Net.~~

Designated Derivative Financial Instruments

~~Interest Rate~~

~~We may enter into interest rate swap agreements~~Changes in the fair value of derivatives that ~~allow us to receive variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life~~are designated as net investment hedges of our ~~agreements without~~foreign operations and cash flow hedges are recorded in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) and reflected within the ~~exchange~~Other Comprehensive Income (Loss) table below.

Foreign Currency Contracts

The following table summarizes the activity of our foreign currency contracts designated as net investment hedges for the ~~underlying notional amount.~~

~~We report the effective portion of the gain or loss on the derivative as a component of~~ ~~AOCI~~ ~~and reclassify it to~~ ~~Interest Expense~~ ~~over the corresponding period of the hedged item. We recognize any hedge ineffectiveness in~~ ~~Interest Expense~~ ~~at the time the ineffectiveness occurred. During the nine~~three months ended ~~September 30, 2017,~~March 31 (in millions, except for weighted average forward rates and ~~2016, we had no losses due to hedge ineffectiveness.~~number of active contracts):


	2023										2022
	CAD			CNH		GBP		Total			BRL			CAD			GBP			Total
Notional amounts at January 1 ($)		534			-		440		974			-			535			432			967
New contracts ($)		119			100		-		219			44			204			229			477
Matured, expired or settled contracts ($)		(124	)		-		-		(124	)		(44	)		(125	)		(100	)		(269	)
Notional amounts at March 31 ($)		529			100		440		1,069			-			614			561			1,175

Weighted average forward rate at March 31		1.30			6.72		1.28					-			1.26			1.35
Active contracts at March 31		6			1		4					-			7			5

~~At September 30, 2017, and December 31, 2016, we had three interest rate swaps outstanding with a notional amount of $271.2 million. We did not enter into or settle any interest rate swaps during~~Interest Rate Swaps

The following table summarizes the ~~nine months ended September 30, 2017. During the nine months ended September 30, 2016, we did not enter into any interest rate swap contracts, and we settled~~ ~~¥105.9 billion~~ ~~($924.6 million)~~activity of our interest rate swaps ~~outstanding.~~designated as cash flow hedges for the three months ended March 31 (in millions):


	2023									2022
	EUR			USD			Total			EUR			Total
Notional amounts at January 1 ($)		447			150			597			165			165
New contracts ($)		434			550			984			1,004			1,004
Matured, expired or settled contracts ($) (1)		(709	)		(700	)		(1,409	)		(722	)		(722	)
Notional amounts at March 31 ($)		172			-			172			447			447

(1)

Included in AOCI(L) are cash flow hedges of $268.6 million notional, that settled during the three months ended March 31, 2023, to hedge our exposure to the variability in future cash flows for forecasted debt transactions that have not occurred and will be hedged over 10 years.

Designated Nonderivative Financial Instruments

The following table summarizes our debt and accrued interest, designated as a hedge of our net investment in international subsidiaries at the quarter ended (in millions):


	March 31, 2023		December 31, 2022
British pound sterling	$	1,252	$	1,237
Canadian dollar	$	373	$	370

Index

The following table summarizes the unrealized gains (losses) in Foreign Currency and Derivative Gains and Other Income, Net on the remeasurement of the unhedged portion of our euro denominated debt and accrued interest (in millions):


	Three Months Ended
	March 31,
	2023			2022
Unrealized gains (losses) on the unhedged portion	$	(4	)	$	15

Other Comprehensive Income (Loss)

The change in Other Comprehensive Income (Loss)in the Consolidated Statements of Comprehensive Income during the periods presented iswas due to the translation into U.S. dollars from the consolidation of the financial statements of our consolidated subsidiaries whose functional currency is not the U.S. dollar. We recorded gains of $147.6 million and $474.1 million for the three and nine months ended September 30, 2017, respectively, and losses of $40.8 million and $22.0 million for the three and nine months ended September 30, 2016, respectively. The ~~gains and losses recognized in~~ ~~Other Comprehensive Income~~ ~~during these periods were offset by net losses on the translation of our derivative and nonderivative net investment hedges detailed below. This includes the~~ change in fair value ~~for~~of the effective portion of our derivative ~~and nonderivative~~financial instruments that have been designated as ~~hedges.~~net investment hedges and cash flow hedges and the translation of the hedged portion of our debt, as discussed above, are also included in Other Comprehensive Income (Loss).

The following table presents ~~the gains and (losses) associated with the change~~these changes in ~~fair value for the effective portion of our derivative and nonderivative hedging instruments included in~~ Other Comprehensive Income (Loss) (in thousands):


	Three Months Ended March 31,
	2023			2022
Derivative net investment hedges (1)	$	(8,163	)	$	4,093
Debt designated as nonderivative net investment hedges		(41,499	)		33,597
Cumulative translation adjustment		21,561			151,833
Total foreign currency translation gains (losses), net	$	(28,101	)	$	189,523

Cash flow hedges (1) (2)	$	(19,327	)	$	4,422
Our share of derivatives from unconsolidated co-investment ventures		(6,526	)		8,927
Total unrealized gains (losses) on derivative contracts, net	$	(25,853	)	$	13,349
Total change in other comprehensive income (losses)	$	(53,954	)	$	202,872

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

Derivative net investment hedges (1)

$
(3,623
)

$
11,546

$
(13,114
)

$
40,966

Interest rate and cash flow hedges (2)

5,553

3,110

10,382

(10,714
)
Our share of derivatives from unconsolidated co-investment ventures

538

1,586

5,075

(6,408
)
Total derivative instruments

2,468

16,242

2,343

23,844

Nonderivative net investment hedges (3) (4)

(139,885
)

(19,019
)

(414,077
)

(88,792
)
Total derivative and nonderivative hedging instruments

$
(137,417
)

$
(2,777
)

$
(411,734
)

$
(64,948
)

(1)

The ending balance in AOCI/L for accumulated derivative gains on net investment hedges was $324.8 million and $333.0 million at March 31, 2023 and December 31, 2022, respectively. Additionally, the ending balance in AOCI/L for accumulated derivative gains on cash flow hedges was $13.4 million and $32.7 million at March 31, 2023 and December 31, 2022, respectively.

~~(1)~~

We received $2.5 million and $16.8 million for the nine months ended September 30, 2017, and 2016, respectively, upon the settlement of net investment hedges. We did not settle any new investment hedges during the three months ended September 30, 2017, and 2016.

~~(2)~~

The amounts reclassified to interest expense for the three and nine months ended September 30, 2017, were $1.3 million and $4.2 million, respectively. The amounts reclassified to interest expense for the three and nine months ended September 30, 2016, were $2.0 million and $4.1 million, respectively. For the next 12 months from September 30, 2017, we estimate an additional expense of $3.5 million will be reclassified to ~~Interest Expense~~.

(2)

We estimate an additional expense of $1.0million will be reclassified to Interest Expense over the next 12 months from March 31, 2023, due to the amortization of previously settled derivatives designated as cash flow hedges.

~~(3)~~

At September 30, 2017, and December 31, 2016, we had €3.0 billion ($3.6 billion) and €3.2 billion ($3.4 billion) of debt, net of accrued interest, respectively, designated as nonderivative financial instrument hedges of our net investment in international subsidiaries. We recognized unrealized losses of $3.8 million and $15.1 million in ~~Foreign Currency and Derivative Losses, Net~~ ~~on the unhedged portion of our debt for the three and nine months ended September 30, 2017. We did not recognize any gains or losses for the three months ended September 30, 2016.~~

~~(4)~~

~~In June 2017, we issued~~ £500.0 million ($645.3 million) of debt, as discussed in Note 5, and £322.8 million ($415.0 million) of the debt was designated as a nonderivative financial instrument hedge of our net investment in international subsidiaries at September 30, 2017. We recognized unrealized losses of $4.2 million in ~~Foreign Currency and Derivative Losses, Net~~ ~~on the unhedged portion of our debt for the three and nine months ended September 30, 2017.~~

Fair Value Measurements

There have been no significant changes in our policy from what was disclosed in our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016.~~2022.

Fair Value Measurements on a Recurring Basis

At ~~September 30, 2017,~~March 31, 2023 and December 31, ~~2016,~~2022, other than the derivatives discussed previously, we ~~did not have any~~had no significant financial assets or financial liabilities that were measured at fair value on a recurring basis in the Consolidated Financial Statements. All of our derivatives held at ~~September 30, 2017,~~March 31, 2023 and December 31, ~~2016,~~2022, were classified as Level 2 of the fair value hierarchy.

Fair Value Measurements on Nonrecurring Basis

NoAcquired properties and assets we expect to sell or contribute are significant nonfinancial assets that met the criteria to be measured at fair value on a nonrecurring ~~basis at September 30, 2017, or~~basis. At March 31, 2023 and December 31, ~~2016.~~2022, we estimated the fair value of our properties using Level 2 or Level 3 inputs from the fair value hierarchy. See more information on our acquired properties in Note 3 and assets held for sale or contribution in Note 5.

Fair Value of Financial Instruments

At ~~September 30, 2017,~~March 31, 2023 and December 31, ~~2016,~~2022, 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 because of the short-term nature of these instruments.~~values.

The differences in the fair value of our debt from the carrying value in the table below ~~are~~were the result of differences in interest rates or borrowing spreads that were available to us at ~~September 30, 2017,~~March 31, 2023 and December 31, ~~2016,~~2022, as compared with those in effect when the

Index

debt was issued or ~~assumed.~~assumed, including reduced borrowing spreads due to our improved credit ratings. The senior notes and many of the ~~issues~~issuances of secured mortgage debt contain ~~pre-payment~~prepayment 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. We evaluate this on an on-going basis and take the opportunity to refinance our debt at lower rates and longer maturities based on market conditions and other factors. See Note 6 for more information on our debt activity.

The following table reflects the carrying amounts and estimated fair values of our debt (in thousands):


	March 31, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
Credit facilities	$	212,553	$	212,553	$	1,538,461	$	1,538,461
Senior notes		22,399,340		19,275,513		19,786,253		16,604,241
Term loans and unsecured other		2,093,006		2,079,813		2,106,592		2,092,264
Secured mortgage		448,443		428,330		444,655		420,964
Total	$	25,153,342	$	21,996,209	$	23,875,961	$	20,655,930

September 30, 2017

December 31, 2016

Carrying Value

Fair Value

Carrying Value

Fair Value

Credit Facilities

$
-

$
-

$
35,023

$
35,061

Senior notes

6,874,108

7,390,221

6,417,492

6,935,485

Term loans and unsecured other

1,634,682

1,653,113

1,499,001

1,510,661

Secured mortgages

812,371

874,491

979,585

1,055,020

Secured mortgages of consolidated entities

399,904

399,515

1,677,193

1,683,489

Total debt

$
9,721,065

$
10,317,340

$
10,608,294

$
11,219,716

NOTE ~~10.~~11. BUSINESS SEGMENTS

Our current business strategy ~~consists of~~ includes two operating segments: Real Estate (Rental Operations and Development) and Strategic Capital. We generate revenues, earnings, net operating income and cash flows through our segments, as follows:

•

Real Estate ~~Operations.~~Segment. This operating segment represents the ownership and development of operating properties and is the largest component of our ~~revenues~~revenue and earnings. We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. Each operating property is considered to be an individual operating segment with similar economic characteristics; these properties are combined within the reportable business segment based on geographic location. ~~Our~~The Real Estate ~~Operations segment~~Segment also includes development activities that lead to rental operations, including land held for development and properties currently under ~~development.~~development, and other real estate investments. Within this line of business, we utilize the following: (i) our land bank; (ii) the development and leasing expertise of our local teams; and (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.~~

relationships.

•

Strategic ~~Capital.~~Capital Segment. This operating segment represents the management of unconsolidated co-investment ventures. We generate strategic capital revenues primarily 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 structure of the venture and the returns provided to our partners, we also earn revenues through promotes periodically during the life of a venture or upon liquidation. Each unconsolidated co-investment venture we manage is considered to be an individual operating segment with similar economic characteristics; these ventures are combined within the reportable business segment based on geographic location.

Reconciliations are presented below for: (i) each reportable business segment’s revenues from external customers to Total Revenues; (ii) each reportable business segment’s net operating income from external customers to Operating Incomeand Earnings Before Income Taxes; and (iii) each reportable business segment’s assets to Total Assets. 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 of Total Revenues, Operating Income, Earnings Before Income Taxes and Total 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.

Index

The following reconciliations are presented in thousands:


	Three Months Ended March 31,
	2023			2022
Revenues:
Real estate segment:
U.S.	$	1,574,567		$	1,038,991
Other Americas		25,572			22,191
Europe		19,156			12,008
Asia		14,591			12,013
Total real estate segment		1,633,886			1,085,203
Strategic capital segment:
U.S.		53,696			50,635
Other Americas		14,195			11,653
Europe		43,533			46,196
Asia		23,277			25,441
Total strategic capital segment		134,701			133,925

Total revenues		1,768,587			1,219,128

Segment net operating income: (1)
Real estate segment:
U.S. (2)		1,171,983			771,210
Other Americas		19,178			16,107
Europe		14,210			3,970
Asia		8,777			8,653
Total real estate segment		1,214,148			799,940
Strategic capital segment:
U.S. (2)		21,567			27,677
Other Americas		8,942			7,374
Europe		22,604			32,463
Asia		9,879			14,600
Total strategic capital segment		62,992			82,114

Total segment net operating income		1,277,140			882,054

Reconciling items:
General and administrative expenses		(99,777	)		(74,646	)
Depreciation and amortization expenses		(602,367	)		(396,647	)
Gains on dispositions of development properties and land, net		-			210,206
Gains on other dispositions of investments in real estate, net		4,047			584,835
Operating income		579,043			1,205,802

Earnings from unconsolidated entities, net		75,779			76,962
Interest expense		(136,011	)		(64,064	)
Foreign currency and derivative gains and other income, net		8,614			48,409
Gains (losses) on early extinguishment of debt, net		3,275			(18,165	)
Earnings before income taxes	$	530,700		$	1,248,944

Index


	March 31, 2023		December 31, 2022
Segment assets:
Real estate segment:
U.S.	$	71,965,308	$	71,858,560
Other Americas		1,899,350		1,831,956
Europe		2,159,880		1,952,160
Asia		934,822		1,031,135
Total real estate segment		76,959,360		76,673,811
Strategic capital segment: (3)
U.S.		10,605		10,817
Europe		25,280		25,280
Asia		224		231
Total strategic capital segment		36,109		36,328
Total segment assets		76,995,469		76,710,139

Reconciling items:
Investments in and advances to unconsolidated entities		9,680,097		9,698,898
Assets held for sale or contribution		734,106		531,257
Cash and cash equivalents		522,501		278,483
Other assets		588,711		678,671
Total reconciling items		11,525,415		11,187,309
Total assets	$	88,520,884	$	87,897,448

(1)

Net Operating Income ("NOI") from the Real Estate Segment is calculated directly from our Consolidated Financial Statements as Rental Revenues and Development Management and Other Revenues less Rental Expenses and Other Expenses. NOI from the Strategic Capital Segment is calculated directly from our Consolidated Financial Statements as Strategic CapitalRevenues less Strategic CapitalExpenses.

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Revenues:

Real estate operations segment:

U.S.

$
478,718

$
512,759

$
1,532,706

$
1,525,623

Other Americas

23,157

15,598

54,690

44,616

Europe

16,369

18,967

56,676

54,975

Asia

16,588

14,660

48,399

40,687

Total real estate operations segment

534,832

561,984

1,692,471

1,665,901

Strategic capital segment:

U.S.

17,340

9,940

159,925

28,876

Other Americas

6,061

5,805

21,976

16,884

Europe

26,289

113,577

78,524

161,686

Asia

18,352

13,259

45,316

39,673

Total strategic capital segment

68,042

142,581

305,741

247,119

Total revenues

602,874

704,565

1,998,212

1,913,020

Segment net operating income:

Real estate operations segment:

U.S.

363,802

385,837

1,144,176

1,131,340

Other Americas

16,037

10,417

36,403

29,127

Europe

11,454

13,787

40,713

40,420

Asia

11,711

7,650

33,386

24,830
��
Total real estate operations segment

403,004

417,691

1,254,678

1,225,717

Strategic capital segment:

U.S.

1,645

(577
)

103,252

1,959

Other Americas

3,934

2,975

14,666

9,163

Europe

16,497

91,390

49,229

125,460

Asia

9,970

4,169

18,813

12,754

Total strategic capital segment

32,046

97,957

185,960

149,336

Total segment net operating income

435,050

515,648

1,440,638

1,375,053

Reconciling items:

General and administrative expenses

57,656

58,157

171,350

165,634

Depreciation and amortization expenses

201,903

224,867

656,639

705,249

Operating income

175,491

232,624

612,649

504,170

Earnings from unconsolidated entities, net

55,066

45,857

172,267

145,622

Interest expense

(64,190
)

(75,310
)

(212,456
)

(232,577
)
Interest and other income, net

4,816

2,932

9,493

7,051

Gains on dispositions of investments in real estate and revaluation of
equity investments upon acquisition of a controlling interest, net

779,053

117,296

959,384

461,963

Foreign currency and derivative losses, net

(18,872
)

(1,730
)

(46,327
)

(26,277
)
Gains (losses) on early extinguishment of debt, net

-

1,492

(30,596
)

2,484

Earnings before income taxes

$
931,364

$
323,161

$
1,464,414

$
862,436

(2)

This includes compensation and personnel costs for employees who were located in the U.S. but also support other geographies.

(3)

Represents management contracts and goodwill recorded in connection with business combinations associated with the Strategic Capital Segment. Goodwill was $25.3 million at March 31, 2023 and December 31, 2022.

September 30,

December 31,

2017

2016

Assets:

Real estate operations segment:

U.S.

$
19,199,770

$
21,286,422

Other Americas

1,857,678

978,476

Europe

1,058,894

1,346,589

Asia

1,008,217

936,462

Total real estate operations segment

23,124,559

24,547,949

Strategic capital segment:

U.S.

17,136

18,090

Europe

44,990

47,635

Asia

748

1,301

Total strategic capital segment

62,874

67,026

Total segment assets

23,187,433

24,614,975

Reconciling items:

Investments in and advances to unconsolidated entities

5,371,758

4,230,429

Assets held for sale or contribution

321,905

322,139

Notes receivable backed by real estate

-

32,100

Cash and cash equivalents

568,726

807,316

Other assets

204,328

242,973

Total reconciling items

6,466,717

5,634,957

Total assets

$
29,654,150

$
30,249,932

NOTE ~~11.~~12. SUPPLEMENTAL CASH FLOW INFORMATION

Our significant noncash investing and financing activities for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023 and ~~2016~~2022 included the following:

•

We ~~contributed operating properties owned by NAIF~~recognized lease right-of-use assets and lease liabilities related to ~~USLF~~leases in which we are the ~~third quarter~~lessee within Other Assets and Other Liabilities on the Consolidated Balance Sheets, including any new leases, renewals and modifications of ~~2017. See Notes 2, 3~~$12.1million in 2023 and 5$3.7 million in 2022 for more information on this transaction. As a result, we received $1.1 billion of ownership interest in USLF as a portion of our proceeds from this contribution. In addition, USLF assumed the $19.5 million note receivable backed by real estate we received in the second quarter of 2017both assets and ~~$956.0 million of secured mortgage debt.~~

liabilities.

•

We capitalized ~~$20.8~~$14.7 million and ~~$19.7~~$10.6 million in ~~2017~~2023 and ~~2016,~~2022, respectively, of equity-based compensation ~~expense resulting from our development and leasing activities.~~

expense.

•

We issued 0.7 million shares in 2017 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 6, and we issued 1.9 million shares in 2016.

We received ~~$83.6~~$216.4 million in 2022, of ownership interests in certain unconsolidated co-investment ventures as a portion of our proceeds from the contribution of properties to these entities, ~~during 2017,~~ as disclosed in Note ~~3. We received $31.8 million of ownership interests in an unconsolidated co-investment venture from the contribution of properties to these entities during 2016.~~

•

We issued less than 0.1 million shares in 2023 and 2022, of the Parent’s common stock upon redemption of an equal number of common limited partnership units in the OP.

We paid ~~$232.4~~$129.9 million and ~~$267.2~~$62.9 million for interest, net of amounts capitalized, ~~for~~during the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023 and ~~2016,~~2022, respectively.

We paid ~~$29.7~~$46.2 million and ~~$16.4~~$30.7 million for income taxes, net of refunds, ~~for~~during the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023 and ~~2016,~~2022, respectively.

Index

Report of Independent Registered Public Accounting Firm

~~The~~

To the Stockholders and Board of Directors ~~and Stockholders~~

Prologis, Inc.:

Results of Review of Interim Financial Information

We have reviewed the ~~accompanying~~ consolidated balance sheet of Prologis, Inc. and subsidiaries (the Company) as of ~~September 30, 2017,~~March 31, 2023, the related consolidated statements of income, ~~and consolidated statements of~~ comprehensive income, ~~for the three-month~~equity, and ~~nine-month periods ended September 30, 2017 and 2016, the related consolidated statement of equity for the nine-month period ended September 30, 2017, and the related consolidated statements of~~ cash flows for the ~~nine-month~~three-month periods ended ~~September 30, 2017~~March 31, 2023 and ~~2016. These~~2022, and the related notes (collectively, the consolidated interim financial ~~statements are the responsibility of the Company’s management.~~

~~We conducted~~information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the consolidated balance sheet of the Company as of December 31, 2022, and the related consolidated statements of income, comprehensive income, equity, and cash flows for the year then ended (not presented herein); and in our report dated February 14, 2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2022 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States),~~PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ KPMG LLP

Denver, Colorado
April 28, 2023

Index

Report of Independent Registered Public Accounting Firm

To the Partners of Prologis, L.P. and the Board of Directors of Prologis, Inc.:

Results of Review of Interim Financial Information

We have reviewed the consolidated balance sheet of Prologis, L.P. and subsidiaries (the Operating Partnership) as of March 31, 2023, the related consolidated statements of income, comprehensive income, capital, and cash flows for the three-month periods ended March 31, 2023 and 2022, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial ~~statements referred to above~~information for ~~them~~it to be in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 of the consolidated financial statements, the Company adopted Accounting Standards Update 2017-01. The new standard clarifies the definition of a business and was adopted on January 1, 2017 on a prospective basis.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of ~~Prologis, Inc. and subsidiaries~~the Operating Partnership as of December 31, ~~2016,~~2022, and the related consolidated statements of income, comprehensive income, ~~equity~~capital, and cash flows for the year then ended (not presented herein); and in our report dated February 14, ~~2017,~~2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, ~~2016,~~2022 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

~~/s/ KPMG LLP~~

Denver, Colorado
October 27, 2017

~~Report of Independent Registered Public Accounting Firm~~

The Partners
Prologis, L.P.:

~~We have reviewed the accompanying~~This consolidated balance sheet of Prologis, L.P. and subsidiaries (the Operating Partnership) as of September 30, 2017, the related consolidated statements of income, and consolidated statements of comprehensive income for the three-month and nine-month periods ended September 30, 2017 and 2016, the related consolidated statement of capital for the nine-month period ended September 30, 2017, and the related consolidated statements of cash flows for the nine-month periods ended September 30, 2017 and 2016. These consolidatedinterim financial ~~statements are~~information is the responsibility of the Operating Partnership’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States),~~PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 of the consolidated financial statements, the Operating Partnership adopted Accounting Standards Update 2017-01. The new standard clarifies the definition of a business and was adopted on January 1, 2017 on a prospective basis.

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Prologis, L.P. and subsidiaries as of December 31, 2016, and the related consolidated statements of income, comprehensive income, capital and cash flows for the year then ended (not presented herein); and in our report dated February 14, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2016, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ KPMG LLP

Denver, Colorado
~~October 27, 2017~~April 28, 2023

Index

ITEM 2. Management’s Discussion andand Analysis of Financial Condition and Results of Operations

The following should be read in conjunction with the Consolidated Financial Statements and related Notes included in Item 1 of this report and our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016,~~2022, as filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”).

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. Such statements involve uncertainties that could significantly impact our financial results. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” ~~“seeks”~~“seeks,” 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, acquisition and development activity, ~~and~~ contribution orand disposition activity, general conditions in the geographic areas where we operate, our debt, capital structure and financial position, our ability to earn revenues from co-investment ventures, 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) international, national, ~~international,~~ regional and local economic and political ~~climates;~~climates and conditions; (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;~~properties, including the integration of the operations of significant real estate portfolios; (v) maintenance of ~~REIT~~Real Estate Investment Trust (“REIT”) status, tax structuring and changes in income tax laws and 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; (x) risks related to global pandemics; and ~~(x)~~(xi) those additional factors discussed under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016.~~2022. We undertake no duty to update any forward-looking statements appearing in this report except as may be required by law.

Prologis, Inc. is a self-administered and self-managed ~~real estate investment trust (a “REIT”)~~REIT and is the sole general partner of Prologis, L.P. through which it holds substantially all of its assets. We operate Prologis, Inc. and ~~Prologs~~Prologis, L.P. as one enterprise and, therefore, our discussion and analysis refers to Prologis, Inc. and its consolidated subsidiaries, including Prologis, L.P. We invest in real estate through wholly owned subsidiaries and other entities through which we co-invest with partners and investors. We have a significant ownership interest in the co-investment ventures, which are either consolidated or unconsolidated based on our level of control of the entity.

We operate, manage and measure the operating performance of our properties on an owned and managed (“O&M”) basis. Our O&M portfolio includes our consolidated properties as well as properties owned by our unconsolidated co-investment ventures, which we manage. We make operating decisions based on our total O&M portfolio as we manage the properties without regard to their ownership. We also evaluate our results based on our proportionate economic ownership of each entity or property included in the O&M portfolio (“our share”), ~~collectively.~~whether consolidated or unconsolidated, to reflect our share of the financial results of the O&M portfolio.

~~MANAGEMENT’S~~Included in our discussion below are references to funds from operations (“FFO”) and net operating income (“NOI”), neither of which are United States ("U.S.") generally accepted accounting principles (“GAAP”). See below for a reconciliation of Net Earnings Attributable to Common Stockholders/Unitholders in the Consolidated Statements of Income to our FFO measures and a reconciliation of NOI to Operating Income, the most directly comparable GAAP measures.

MANAGEMENT'S OVERVIEW

Prologis is the global leader in logistics real estate with a focus on high-barrier, ~~high-growth markets across 19 countries.~~high growth markets. We own, manage and develop well-located, high-quality logistics facilities in 19 countries across four continents. Our portfolio focuses on the ~~consumption markets that matter most. An investment in Prologis taps into key drivers~~world’s most vibrant centers of ~~economic growth, including consumption, supply chain modernization, e-commerce~~commerce and ~~urbanization.~~

~~Our business is global and many of~~our scale across these locations allows us to better serve our customers’ businesses are global. 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 moderndiverse logistics ~~facilities to a diverse base of approximately 5,200 customers.~~requirements. Our ~~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 and rail and highway networks). We believe our portfolio is the highest-quality logistics property portfolio in the industry because it is focused in these key markets. Our local teams actively manage ~~the~~our portfolio ~~which encompasses~~and provide comprehensive real estate services, including leasing, ~~and~~ property management, development, acquisitions and dispositions. We invest significant capital ~~deployment~~into new logistics properties principally through our development activity and ~~an opportunistic disposition program.~~third-party acquisitions. The contribution of newly developed properties to our co-investment ventures and the sale of non-strategic properties to third parties allows us to recycle capital back into our development and acquisition activities.

While the majority of our properties in the ~~United States (“U.S.”) are wholly-owned, while our properties outside the~~ U.S. are ~~generally held~~wholly owned, we hold a significant ownership interest in ~~co-investment ventures. We are principally an owner/operator~~properties both in the U.S. and ~~a manager/developer outside~~internationally through our investment in the ~~U.S.~~

~~We operate our business on an owned and managed basis, including properties that we wholly own and properties that are owned by one of our~~ co-investment ventures. ~~This~~Partnering with the world’s largest institutional investors through co-investment ventures allows us to ~~make decisions based on property operations, regardless~~enhance and diversify our real estate returns as well as mitigate our exposure to foreign currency movements.

Index

Logistics supply chains have increased dramatically in their importance to our customers and the global economy. The long-term trends of e-commerce adoption and supply chain resiliency continue to drive the need for increased warehouse space to store and distribute goods. This demand has translated into meaningful increases in rents and has resulted in low vacancy. We believe this demand is driven by three primary factors: (i) customer supply chains re-positioning to address the significant shift to e-commerce and heightened service expectations; (ii) overall consumption and household growth; and (iii) our customers’ desire for more supply chain resiliency. We believe these forces will keep demand strong for the long term.

The nature of the services we are providing to our customers is expanding. The scale of our ~~ownership interest. We believe~~1.2 billion square foot portfolio allows us to provide a platform of solutions to address challenges that companies face in global fulfillment today. Through Prologis Essentials, we focus on innovative ways to meet our customers’ operations, energy and sustainability, mobility and workforce needs. Our customer experience teams, proprietary technology and strategic partnerships are foundational to Prologis Essentials and allow us to provide our customers with unique and actionable insights to drive greater efficiency in their operations.

Our long-standing dedication to Environmental, Social and Governance (“ESG”) practices strengthens our relationships with our customers, investors, employees and the ~~operating fundamentals~~communities in which we do business. The principles of ESG are an important aspect of our ~~owned~~business strategy that we believe delivers a strategic business advantage while positively impacting the environment.

Our Global Presence

In October 2022, we completed the acquisition of Duke Realty Corporation and ~~managed~~Duke Realty Limited Partnership (collectively “Duke”) through a merger transaction that we refer to as the “Duke Transaction” and is detailed in Note 2 to the Consolidated Financial Statements. The Duke portfolio ~~are consistent with those~~was primarily comprised of ~~our consolidated portfolio,~~logistics real estate assets, including 494 industrial operating properties, aggregating 144 million square feet. The total acquisition price, including transaction costs, was $23.2 billion and ~~therefore we generally look at operating metrics on an owned~~was funded through the issuance of equity and ~~managed basis.~~the assumption of debt.

At ~~September 30, 2017,~~March 31, 2023, we owned or had investments in, on a wholly-owned basis or through co-investment ventures, properties and development projects ~~(based on gross book value and~~expected to total ~~expected investment, respectively) totaling $56.4~~approximately 1.2 billion ~~across 687 million~~ square feet ~~(64 million square meters)~~ across ~~four continents. Our investment totals $32.5 billion~~the following geographies:

Throughout this discussion, we reflect amounts in U.S. dollars, our reporting currency. Included in these amounts are consolidated and ~~consists~~unconsolidated investments denominated in foreign currencies, principally the British pound sterling, Canadian dollar, euro and Japanese yen that are impacted by fluctuations in exchange rates when translated to U.S. dollars. We mitigate our exposure to foreign currency fluctuations by investing outside the U.S. through co-investment ventures, borrowing in the functional currency of our ~~wholly-owned properties~~subsidiaries and ~~our pro rata (or ownership) share of the properties owned by our co-investment ventures.~~utilizing derivative financial instruments.

Index~~Operating Segments~~

Our business comprises two operating segments: Real Estate (Rental Operations and Development) and Strategic Capital. ~~See below for~~

Below is information summarizing consolidated activity within our ~~consolidated information for the nine months ended September 30, 2017:~~segments (in millions):

~~REAL ESTATE –~~

~~RENTAL OPERATIONS~~

~~Grow revenues, net operating income (“NOI”) and cash flows by increasing rents and maintaining high occupancy rates~~

~~REAL ESTATE –~~

~~DEVELOPMENT~~

~~Provides significant earnings growth as projects lease up and generate income~~

~~STRATEGIC CAPITAL~~

~~Access third-party capital to grow our business and earn recurring fees and promotes through long-term co-investment ventures~~

•~~28.2% weighted average rent change on rollover during 2017~~

•~~96.0% average occupancy~~

•~~28.7% weighted average margins on $1.4 billion total estimated investment of stabilized development projects~~

•~~$414 million of value created by development stabilizations~~

•~~We co-invest with some of the world’s largest institutional partners~~

•~~23.7% increase in Strategic Capital revenues~~(1)

NOI from the ~~same period in 2016~~

Real Estate ~~Operations~~Segment is calculated directly from our Consolidated Financial Statements as Rental Revenues and Development Management and Other Revenues less Rental Expenses and Other Expenses. NOI from the Strategic Capital Segment is calculated directly from our Consolidated Financial Statements as Strategic CapitalRevenues less Strategic CapitalExpenses.‌

(2)

A developed property moves into the operating portfolio when it meets our definition of stabilization, which is the earlier of when a property that was developed has been completed for one year, is contributed to a co-investment venture following completion or is 90% occupied. Amounts represent our total expected investment ("TEI") upon stabilization, which includes the estimated cost of development or expansion, including land, construction and leasing costs.

Real Estate Segment

Rental Operations.Rental operations ~~comprise~~comprises the largest component of our operating segments and generally contributes ~~approximately~~85% to 90% of our consolidated revenues, earnings and ~~funds from operations (see below for more information on funds from operations, a non-GAAP measure).~~FFO. We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. For leases that commenced during the three months ended March 31, 2023, within the consolidated operating portfolio, the weighted average lease term was 58 months. We expect to generate ~~long-term~~ internal growth by increasing rents, maintaining high occupancy rates and controlling expenses. The primary driver of our revenue growth will be the rolling of in-place leases to current market rents when leases expire, as discussed further below. We believe our active portfolio management, ~~coupled~~combined with the skills of our property, leasing, maintenance, capital, energy, sustainability and risk management teams ~~will~~ allow us to maximize ~~rental revenues~~NOI across our portfolio. ~~The majority~~Substantially all of our consolidated rental ~~revenues~~revenue, NOI and ~~NOI~~cash flows from rental operations are generated in the U.S. ~~NOI from this segment is calculated directly from~~

Development. Given the scarcity of modern logistics facilities in our ~~financial statements as rental revenues, rental recoveries~~target markets, our development business provides the opportunity to build to the requirements of our customers while deepening our market presence. We believe we have a competitive advantage due to (i) the strategic locations of our global land bank and ~~development management and other revenues less rental expenses and other expenses.~~

~~Development.~~ ~~We use (i) our land bank;~~redevelopment sites; (ii) the development expertise of our local teams; (iii) the depth of our customer relationships; ~~and~~ (iv) our ~~in-depth local knowledge~~ability to integrate sustainable design features that result in ~~connection with~~cost-savings and operational efficiencies for our ~~value creation activities.~~customers; and (v) our procurement capabilities that allow us to secure high-demand construction materials at lower cost. Successful development and redevelopment efforts provide significant earnings growth as projects are leased, generate income and increase ~~both~~ the ~~rental revenues and the net asset~~ value of our Real Estate ~~Operations segment. We measure the value~~Segment. Generally, we ~~create based on the increase in estimated fair value of a stabilized development property, as compared to the costs incurred. We~~ develop properties in the U.S. for ~~long-term~~long- term hold ~~or for contribution to Prologis Targeted U.S. Logistics Fund (“USLF”)~~ and outside the U.S. ~~we develop primarily~~ for contribution to our unconsolidated co-investment ventures. ~~Occasionally, we develop for sale to third parties.~~

Strategic Capital Segment

~~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, allowing~~Strategic Capital Segment allows us to ~~diversify our sources of capital and providing us~~partner with ~~a broader range of options to fund our growth, while reducing our exposure to movements in foreign currency. We co-invest with some~~many of the world’s largest institutional ~~partners to grow our~~investors. The business is capitalized principally through private and ~~provide incremental revenues, with a focus on~~public equity of which 95% is either in perpetual open-ended or long-term ventures, and ~~open-ended funds. We also access alternative sources of equity through~~ two publicly traded ~~vehicles: Nippon~~vehicles (Nippon Prologis REIT, Inc. in Japan and FIBRA Prologis in ~~Mexico.~~Mexico). We ~~hold~~align our interests with our partners by holding significant ownership interests in ~~these ventures (approximately 30% on a weighted average basis at September 30, 2017), aligning our interests with those~~all of our ~~partners.~~eight unconsolidated co-investment ventures (ranging from 15% to 50%). This structure allows us to reduce our exposure to foreign currency movements for investments outside the U.S.

This segment produces ~~stable,~~durable, long-term cash flows and generally contributes 10% to 15% of our recurring consolidated revenues, earnings and ~~funds from operations.~~FFO, all while requiring minimal capital other than our investment in the venture. We generate strategic capital revenues ~~primarily~~ from our unconsolidated co-investment ventures, principally through asset management and property management services. Asset management fees are primarily driven by the quarterly valuation of the real estate properties owned by the respective ventures. We earn additional revenues by providing leasing, acquisition, construction management, development ~~financing~~ and disposition services. In certain ventures, we also have the ability to earn revenues through incentive fees (“promotes” or “promote revenues”) periodically during the life of a venture, upon liquidation of a venture or upon ~~liquidation.~~stabilization of individual venture assets based primarily on the total return of the investments over certain financial hurdles. We plan to ~~profitably~~ grow this business and increase revenues by increasing our assets under management in existing or new ventures. The majority of ~~the~~ strategic capital revenues ~~excluding promotes,~~ are generated outside the U.S. ~~NOI in this segment is calculated directly from our financial statements as strategic capital revenues less strategic capital expenses and does not include property-related NOI.~~

Index~~Growth Strategies~~

FUTURE GROWTH

We believe that the quality and scale of our ~~global owned and managed operating~~ portfolio, our ability to build out our land bank, our strategic capital business, the expertise of our team, the depth of our customer relationships and the strength of our balance sheet ~~give~~are differentiators that allow us ~~unique competitive advantages. Our plan~~ to ~~grow~~drive growth in revenues, NOI, earnings, ~~NOI,~~FFO and cash ~~flows and funds from operations is based on~~flows.

(1)

Calculated using the ~~following:~~

trailing twelve months immediately prior to the period ended.

•

Rent Growth. We expect ~~market~~ rents in our markets to continue to ~~grow for~~increase due to healthy demand combined with low vacancy.Due to strong market rent growth over the ~~foreseeable~~last several years, our in-place leases have considerable upside potential to drive future ~~driven by demand for~~organic NOI growth. We estimate that our lease mark-to-market is approximately 68% (on a net effective basis), which represents the ~~location and quality~~growth rate from in-place rents to current market rents based on our share of ~~our properties. Strong~~the O&M portfolio at March 31, 2023. Therefore, even if there was no additional market rent growth in the ~~last several years has elevated the mark~~future, we expect our lease renewals to market of our portfolio. Even if market rents remain flat, our in-place leases have considerable room to rise back to market levels. We estimate that across our owned and managed portfolio, our leases on an aggregate basis are 12% below market; this means that a lease renewal would translate into ~~increased~~significant increases in 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 growth potential is reflected in theincome. We have experienced positive rent change on rollover (comparing the net effective rent (“NER”) of the new lease to the prior lease for the same space) ~~on our owned and managed portfolio. We have experienced positive rent change on rollover for~~in every quarter since ~~2013, and we expect this to continue for several more years.~~

2013.

•

Value Creation from Development. ~~A successful~~ The global nature of our development program provides a wide landscape of opportunities to pursue based on our judgment of market conditions, opportunities and risks. One of the ways in which we create value is through our focus on sourcing well-located land and redevelopment ~~program involves maintaining control of well-positioned land. On~~sites through acquisition opportunities, including our innovative approach with Covered Land Plays, which are income-producing assets acquired with the ~~basis of~~intention to redevelop for higher and better use as industrial properties. Based on our current estimates, our ~~owned~~consolidated land, including options and ~~managed land bank~~Covered Land Plays, has the potential to support the development of ~~$9.1~~$34.0 billion ($38.4 billion on an O&M basis) of ~~total expected investment (“TEI”)~~TEI of new logistics space. We ~~have additional~~measure the estimated value creation ~~opportunities from land we have under option~~of a development project as the stabilized value above our TEI. As properties are completed and ~~from re-development of land under existing operating buildings. We believe the carrying value of our land bank is below its current fair value, and~~leased, we expect to realize ~~this value going forward—primarily through development. We have recognized~~the value creation principally through gains realized through contributions of ~~23% or more on our development stabilizations each year since 2013.~~

these properties to unconsolidated co-investment ventures and increases in the NOI of the consolidated portfolio.

•

Strategic Capital Advantages.We raise capital to support the long-term growth of the co-investment ventures while maintaining our own substantial investments in these vehicles. At March 31, 2023, the gross book value of the operating portfolio held by our eight unconsolidated co-investment ventures was $50.3 billion across 491 million square feet.

•

Balance Sheet Strength. At March 31, 2023, the weighted average remaining maturity of our consolidated debt was 10 years and the weighted average interest rate was 2.6%, primarily as a result of our refinancing activities over the last several years. Through our refinancing activities we have substantially addressed all our debt maturities until 2026 and have taken advantage of previously low interest rates. At March 31, 2023, we had total available liquidity of $5.7 billion. On April 5, 2023, we amended and restated our second global senior credit facility (the "2021 Global Facility" as the "2023 Global Facility") and upsized it by $1.0 billion, bringing the total borrowing capacity under our credit facilities to $6.5 billion. We continue to maintain low leverage as a percentage of our real estate investments and our market capitalization. As a result of our low leverage, available liquidity and investment capacity in the co-investment ventures, we have significant ability to capitalize on opportunistic value-added investments as they arise.

•

Economies of Scale from ~~Growth~~Growth. We have scalable systems and infrastructure in ~~Assets Under Management.~~ ~~Over~~place to grow both our consolidated and O&M portfolios with limited incremental G&A expense. We believe we can continue to grow NOI and strategic capital revenues organically and through accretive development and acquisition activity while further reducing G&A as a percentage of our investments in real estate. The acquisition of the Duke portfolio in 2022 is a key example of this, where we increased our O&M portfolio significantly in the fourth quarter of 2022 and had minimal increases to G&A expenses, resulting in lower G&A expenses as a percentage of investments in real estate. While we plan to make future investments in our new lines of business through Prologis Essentials, we expect to maintain our operational efficiency.

•

Staying “Ahead of What’s Next™”. We are focused on creating value beyond real estate by enhancing our customers’ experience, leveraging our scale to obtain procurement savings and innovating through data analytics and digitization efforts. This includes $175 million of investments, at March 31, 2023, in early and growth-stage companies that are focused on emerging

Index

technology. Through Prologis Essentials we support our customers through service and product offerings, including innovative solutions to operations, energy and sustainability, mobility and workforce that can make our customers' decision process easier and their enterprise more efficient.

SUMMARY OF THE THREE MONTHS ENDED MARCH 31, 2023

Our operating results were strong during the three months ended March 31, 2023. Consistent demand and low vacancy in the global logistics markets drove increases in market rents, which along with our significant lease mark-to-market, translated into positive rent change on rollover and same-store growth in our O&M portfolio. Our O&M operating portfolio occupancy was 98.0% at March 31, 2023 and rent change on leases commenced during the three months ended March 31, 2023 was 68.8%, on a net effective basis, based on our ownership share. We believe our results for the three months ended March 31, 2023 are representative of the health of our business despite a slowing economy. Due to current market conditions, we continue to expect some decline in asset valuations and will remain disciplined as we evaluate capital deployment activities. We anticipate the pace of development starts and contributions into our open ended funds to increase in the second half of the year. We believe we are well-positioned to organically grow revenues given the increase in market rents over the last several years ~~we have invested in a variety of technologies that have allowed us to achieve efficiencies~~ and ~~increase~~ our investments in real estate with minimal increases to general and administrative (“G&A”) expenses. We have increased our owned and managed real estate assets by 21 million square feet (or approximately 3%) over the last two years primarily through development, andhigh lease mark-to-market. However, we ~~have integrated the assets with only minimal increases overhead related to property management and leasing functions, which are reported in rental expenses. We~~ will continue to ~~leverage these technologies to further streamline~~be cautious as we manage our ~~operations and reduce our costs as a percentage of assets under management, along with advanced data analytics to enhance decision-making.~~

business in this uncertain macroeconomic environment.

~~Summary of 2017~~

~~During~~At March 31, 2023, the nine months ended September 30, 2017, operating fundamentals remained strong for our owned and managed operating portfolio and we ended the period with occupancy of 96.3%. See below for details of the operating and development activityweighted average remaining maturity of our ~~Owned and Managed Portfolio~~consolidated debt was 10 years and the ~~results of our two business segments. In 2017, and through the date of this report, we~~weighted average interest rate was 2.6%. We completed the following ~~significant~~financing activities ~~as further described in~~during the ~~accompanying notes to the Consolidated Financial Statements:~~three months ended March 31, 2023:

•

~~During the first nine months~~At March 31, 2023, we had total available liquidity of ~~2017, we completed several transactions that further repositioned~~$5.7 billion, with aggregate availability under our ~~portfolio~~credit facilities of $5.2 billion and ~~streamlined our co-investment ventures, including:~~

In January, we sold our investment in Europe Logistics Venture 1 (“ELV”) to our fund partner for $84 million and ELV contributed its properties to Prologis Targeted Europe Logistics Fund (“PTELF”) in exchange for equity interests.

In February, we formed the Prologis UK Logistics Venture (“UKLV”), in which we have a 15.0% ownership interest. This unconsolidated co-investment venture currently holds stabilized properties, properties under development and land. We ~~expect to contribute additional properties and land into UKLV.~~

In March, we acquired our partner’s interest in Prologis North American Industrial Fund (“NAIF”), a consolidated co-investment venture, for $710 million. In July 2017, we contributed 190 operating properties owned by NAIF to USLF. We received cash proceeds and additional units, which increased our ownership interest in USLF to 27.1%, and USLF assumed secured debt.

In March, we purchased our venture partner’s interest in the Prologis Brazil Logistics Partners Fund I (“Brazil Fund”), a consolidated co-investment venture, for $80 million and now own 100% of the venture. In August 2017, we acquired our partner’s interest in certain unconsolidated joint ventures in Brazil for an aggregate price of R$1.2 billion ($382 million). As a result of this transaction, we consolidate the majority of our investments in Brazil.

In addition to the transactions discussed above, we also contributed primarily development properties to existing co-investment ventures in Europe and Japan and disposed of build-to-suit properties and non-strategic operating properties to third parties, primarily in the U.S.

~~As a result of these transactions, we generated net proceeds of $3.5 billion and recorded net gains of $959 million ($779 million of which was in the third quarter).~~

•

~~In October 2017, we closed the combination of PTELF and~~ ~~Prologis European Properties Fund II~~ to create Prologis European Logistics Fund (“PELF”). Under the terms of the transaction, the assets of PTELF were contributed to PELF in exchange for units. Following the combination of these two ventures, we expect to hold an ownership interest of approximately 26% in PELF, which is economically similar to our ownership in the previous ventures.

~~As a result~~unrestricted cash balances of ~~these activities, we have eight co-investment ventures.~~

~~In February,~~$0.5 billion. On April 5, 2023, we amended and restated our ~~Japanese yen revolver~~2021 Global Facility as the 2023 Global Facility and ~~increased~~upsized it by $1.0 billion, bringing the total borrowing capacity of our credit facilities to ~~¥50.0 billion ($444 million at September 30, 2017).~~

$6.5 billion.

•

~~In June, we~~We issued ~~£500 million ($645 million)~~$2.6 billion of senior notes ~~with an interest~~(principal in millions):


	Aggregate Principal				Issuance Date Weighted Average
Issuance Date	Borrowing Currency		USD (1)		Interest Rate	Years	Maturity Dates
January	€	1,250	$	1,354	4.1%	13.8	January 2030 – 2043
March	$	1,200	$	1,200	4.9%	17.7	June 2033 – 2053
Total			$	2,554	4.5%	15.6

(1)

The exchange rate ~~of 2.3%, maturing in June 2029,~~used to calculate into U.S. dollars was the spot rate at ~~99.9% of par value. Following~~ the ~~issuance, we used the cash proceeds to redeem $618 million of previously issued senior notes.~~

settlement date.

RESULTS OF OPERATIONS – ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30, 2017~~MARCH 31, 2023 AND ~~2016~~2022

We evaluate our business operations based on the NOI of our two operating ~~segments,~~segments: Real Estate (Rental Operations and Development) and Strategic Capital. NOI by segment is a non-GAAP ~~financial~~performance measure that is calculated using revenues and expenses directly from our financial statements. We consider NOI by segment to be an appropriate supplemental measure of our performance because it helps ~~both~~ management and investors to understand ~~the core operations of~~ our ~~business.~~operating results.

Index

Below is ~~a reconciliation of~~ our NOI by segment per our Consolidated Financial Statements and a reconciliation of NOI by segment to Operating Income per the Consolidated Financial Statements for the ~~nine~~three months ended ~~September 30~~March 31 (in millions). ~~Each segment’s NOI is reconciled to a line item in the Consolidated Financial Statements in the respective segment discussion below.~~

	2017			2016
Real Estate Operations segment – NOI	$	1,255		$	1,226
Strategic Capital segment – NOI		186			149
							2023			2022
Real estate segment:
Rental revenues							$	1,634		$	1,077
Development management and other revenues								-			8
Rental expenses								(413	)		(276	)
Other expenses								(7	)		(9	)
Real Estate Segment – NOI								1,214			800

Strategic capital segment:
Strategic capital revenues								135			134
Strategic capital expenses								(72	)		(52	)
Strategic Capital Segment– NOI								63			82

General and administrative expenses		(171	)		(166	)		(100	)		(74	)
Depreciation and amortization expenses		(657	)		(705	)		(602	)		(397	)
Operating income before gains on real estate transactions, net								575			411
Gains on dispositions of development properties and land, net								-			210
Gains on other dispositions of investments in real estate, net								4			585
Operating income	$	613		$	504		$	579		$	1,206

See Note 1011 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.

Real Estate ~~Operations~~Segment

This operating segment principally includes rental ~~revenues, rental recoveries~~revenue and rental expenses recognized from our consolidated properties. We allocate the costs of our property management and leasing functions to the Real Estate ~~Operations segment~~Segment through Rental Expenses and to the Strategic Capital ~~segment~~Segment through Strategic Capital Expenses based on the ~~size~~square footage of the relative ~~portfolios as compared to~~portfolios. In addition, this segment is impacted by our ~~total owned~~development, acquisition and ~~managed portfolio. The operating fundamentals in the markets in which we operate continue to be strong, which has driven rents higher, kept occupancies high and has fueled development activity.~~disposition activities.

Below are the components of Real Estate ~~Operations revenues, expenses and~~Segment NOI for the ~~nine~~three months ended ~~September 30 (in millions),~~March 31, derived directly from line items in the Consolidated Financial ~~Statements.~~Statements (in millions):


	2017			2016			2023			2022
Rental revenues	$	1,304		$	1,299		$	1,634		$	1,077
Rental recoveries		370			361
Development management and other revenues		18			6			-			8
Rental expenses		(429	)		(428	)		(413	)		(276	)
Other expenses		(8	)		(12	)		(7	)		(9	)
Real Estate Operations segment – NOI	$	1,255		$	1,226
Real Estate Segment – NOI							$	1,214		$	800

Index

The change in Real Estate ~~Operations revenues, expenses and NOI are impacted by changes in rental rates, occupancy and capital deployment activities. The following items highlight the key changes in~~Segment (“RES”) NOI for the ~~nine~~three months ended ~~September 30, 2017, from~~March 31, 2023 compared to the same period in ~~2016~~2022 of $414 million was impacted by the following activities (in millions):

Rent rate and occupancy growth (1)

$
69

Development activity (2)

35

Contributions and dispositions (3)

(96
)
Acquisitions

17

Other

4

Total change in Real Estate Operations segment – NOI

$
29

(1)

Acquisition activity is primarily due to the Duke Transaction on October 3, 2022. This includes the net below market lease liabilities that are amortized to rental revenues over the remaining lease term, which on average was 64 months at acquisition.

~~(1)~~

Rent rate growth is a combination of the rollover of existing leases and increases in certain 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 positive rent change on rollover for every quarter since 2013 which has resulted in higher average rental rates in our portfolio and increased rental revenues and NOI as those leases commenced. Our weighted average rent change for 2017 was 28.2%.

~~(2)~~

~~We have completed 65 properties with 17 million square feet leased since September 30, 2016.~~

(2)

During both periods, we experienced positive rental rate growth. Rental rate growth is a combination of higher rental rates on rollover of leases (or rent change) and contractual rent increases on existing leases. If a lease has a contractual rent increase driven by a metric that is not known at the time the lease commences, such as the consumer price index or a similar metric, the rent increase is not included in rent leveling and therefore impacts the rental revenue we recognize. Significant rent change during both periods continues to be a key driver in increasing rental income. See below for key metrics on rent change on rollover and occupancy.

~~(3)~~

~~Contributions and disposition activity increased in 2017, compared to 2016, primarily due to the contribution of 190 operating properties owned by NAIF to USLF, resulting in a larger reduction in NOI.~~

(3)

We calculate changes in NOI from development completions period over period by comparing the change in NOI generated on the pool of developments that completed on or after January 1, 2022 through March 31, 2023.

(4)

The change is partially due to higher insurance costs from an unusually active storm season during the three months ended March 31, 2023.

Below are ~~the~~ key operating metrics of our consolidated operating ~~portfolio:~~portfolio, which excludes non-strategic industrial properties.

(1)

In October 2022, we completed the Duke Transaction, which increased our consolidated square feet.

(2)

Consolidated square feet ~~decreased~~of leases commenced and weighted average net effective rent change were calculated for leases with initial terms of one year or greater.

(3)

Calculated using the trailing twelve months immediately prior to the period ended.

Index

Development Activity

The following table summarizes consolidated development activity for the three months ended ~~September 30, 2017 due~~March 31 (dollars and square feet in millions):


	2023			2022
Starts:
Number of new development buildings during the period		2			31
Square feet		1			7
TEI	$	59		$	1,041
Percentage of build-to-suits based on TEI		100.0	%		36.6	%

Stabilizations:
Number of development buildings stabilized during the period		15			6
Square feet		6			3
TEI	$	700		$	197
Percentage of build-to-suits based on TEI		50.8	%		51.2	%
Weighted average stabilized yield (1)		6.5	%		6.0	%
Estimated value at completion	$	961		$	360
Estimated weighted average margin (2)		37.3	%		82.9	%
Estimated value creation	$	261		$	163

(1)

We calculate the weighted average stabilized yield as estimated NOI assuming stabilized occupancy divided by TEI.

(2)

Estimated weighted average margin is calculated on development properties as estimated value creation, less estimated closing costs and taxes, if any, on properties expected to be sold or contributed, divided by TEI.

At March 31, 2023, the ~~contribution~~consolidated development portfolio, including properties under development and pre-stabilized properties, was expected to be completed before April 2025 with a TEI of ~~190~~$6.8 billion and was 43.4% leased. Our investment in the development portfolio was $4.3 billion at March 31, 2023, leaving $2.5 billion remaining to be spent.

Capital Expenditures

We capitalize costs incurred in improving and leasing our operating properties ~~owned by NAIF to USLF.~~as part of the investment basis or within other assets. The following graph summarizes capitalized expenditures, excluding development costs of our consolidated operating properties during each quarter:

Strategic Capital Segment

This operating segment includes revenues from asset management and ~~other fees, as well as promotes~~property management services, transactional services for acquisition, disposition and leasing activity and promote revenue earned ~~for services performed for our~~primarily from the unconsolidated co-investment ventures. Revenues associated with the Strategic Capital ~~segment~~Segment fluctuate because of changes in the size of ~~co-investment ventures under management,~~ the portfolios through acquisitions and dispositions, the fair value of the properties and other transactional activity ~~in the ventures~~including foreign currency exchange rates and ~~the~~ timing of promotes. These revenues are reduced ~~generally~~ by the direct costs associated with the asset ~~management~~ and property-level management expenses for the properties owned by these ventures. We allocate the costs of our property management and leasing functions to the Strategic Capital ~~segment~~Segment through Strategic Capital Expenses and to the Real Estate ~~Operations segment~~Segment through Rental Expenses based on the ~~size~~square footage of the relative ~~portfolios as compared~~portfolios. For further details regarding the key property information and summarized financial condition and operating results of our unconsolidated co-investment ventures, refer to ~~our total owned and managed portfolio.~~Note 4 to the Consolidated Financial Statements.

Index

Below are the components of Strategic Capital ~~revenues, expenses and~~Segment NOI for the ~~nine~~three months ended ~~September 30,~~March 31, derived directly from the line items in the Consolidated Financial Statements (in millions):


	2017			2016			2023			2022
Strategic capital revenues	$	306		$	247		$	135		$	134
Strategic capital expenses		(120	)		(98	)		(72	)		(52	)
Strategic Capital segment – NOI	$	186		$	149
Strategic Capital Segment – NOI							$	63		$	82

Below is additional detail of our Strategic Capital Segment revenues, expenses and NOI for the ~~nine~~three months ended ~~September 30~~March 31 (in millions):


	U.S. (1)						Other Americas						Europe						Asia						Total
	2023			2022			2023			2022			2023			2022			2023			2022			2023			2022
Strategic capital revenues ($) (2)
Recurring fees (3)		46			42			12			11			40			43			20			20			118			116
Transactional fees (4)		8			9			2			1			4			3			3			5			17			18
Total strategic capital revenues ($)		54			51			14			12			44			46			23			25			135			134
Strategic capital expenses ($) (2)		(33	)		(23	)		(5	)		(5	)		(21	)		(14	)		(13	)		(10	)		(72	)		(52	)
Strategic Capital Segment– NOI ($)		21			28			9			7			23			32			10			15			63			82

(1)

The U.S. expenses include compensation and personnel costs for employees who are based in the U.S. but also support other geographies.

2017

2016

U.S.:

Asset management and other fees

$
31

$
25

Leasing commissions, acquisition, development and other transaction fees

9

4

Promote (1)

120

-

Strategic capital expenses (2)

(57
)

(27
)
Subtotal U.S.

103

2

Other Americas:

Asset management and other fees

16

16

Leasing commissions, acquisition, development and other transaction fees

2

1

Promote (1)

4

-

Strategic capital expenses

(7
)

(8
)
Subtotal Other Americas

15

9

Europe:

Asset management and other fees

66

63

Leasing commissions, acquisition, development and other transaction fees

10

10

Promote (1)

3

88

Strategic capital expenses

(30
)

(36
)
Subtotal Europe

49

125

Asia:

Asset management and other fees

28

28

Leasing commissions, acquisition, development and other transaction fees

17

12

Strategic capital expenses

(26
)

(27
)
Subtotal Asia

19

13

Strategic Capital segment – NOI

$
186

$
149

(2)

We generally earn promote revenue directly from third-party investors in the co-investment ventures based on the cumulative returns of the venture over a three-year period or the stabilization of individual development projects owned by the venture. Changes in asset valuations within the co-investment ventures during the promote period is one of the significant inputs into the calculation of promote revenues. The asset valuations are prepared by third-party valuation firms. There were no significant promotes earned during the three months ended March 31, 2023 and 2022, respectively.

Approximately 40% of the promote earned by us from the co-investment ventures is paid to our employees as a combination of cash and stock-based awards pursuant to the terms of the PPP and expensed through Strategic Capital Expenses, as vested. The increase in strategic capital expenses is partially due to higher expenses for PPP awards related to promotes earned in the third quarter of 2022.

~~(1)~~

During 2017, the promotes in the U.S. and Mexico were earned in the second quarter and the promote in Europe was earned in the first quarter. During 2016, the promotes in Europe were earned in the third quarter. The promotes represent our third-party partners’ share based on the venture’s cumulative returns to investors over a certain time-period, generally three years. Approximately 40% of promote revenues are paid to our employees as a combination of cash and stock awards pursuant to the terms of the Prologis Promote Plan and expensed through ~~Strategic Capital Expenses, as vested.~~

(3)

Recurring fees include asset management and property management fees.

~~(2)~~

~~This includes compensation and personnel costs for employees who are located in the U.S. but also support other regions.~~

(4)

Transactional fees include leasing commissions and acquisition, disposition, development and other fees.

G&A Expenses

G&A expenses were $100 million and $74 million for the three months ended March 31, 2023 and 2022, respectively. G&A expenses increased in 2023 as compared to 2022, principally due to inflationary increases and higher compensation expenses based on our performance. We capitalize certain internal costs that are incremental and directly related to our development and building improvement activities.

The following table summarizes capitalized G&A for the three months ended March 31 (dollars in millions):


	2023			2022
Building and land development activities	$	37		$	25
Operating building improvements and other		15			11
Total capitalized G&A expenses	$	52		$	36
Capitalized salaries and related costs as a percent of total salaries and related costs		24.5	%		23.4	%

Index

Depreciation and Amortization Expenses

Depreciation and amortization expenses were $602 million and $397 million for the three months ended March 31, 2023 and 2022.

The change in depreciation and amortization expenses during the three months ended March 31, 2023 from the same period in 2022 of approximately $205 million was impacted by the following activities (in millions):

(1)

Included in acquisitions are the operating properties, other real estate ~~investments were held through~~properties and related lease intangibles acquired in the Duke Transaction.

Gains on Real Estate Transactions, Net

During the three months ended March 31, 2023, due to current market conditions we did not contribute any properties to the unconsolidated co-investment ventures and sold a minimal number of properties to third parties. During the three months ended March 31, 2022, we recognized gains on the disposition of development properties and land of $210 million, primarily from the contribution of properties we developed to our unconsolidated co-investment ventures ~~(dollars~~in Europe, and ~~square feet~~we recognized gains on other dispositions of investments in ~~millions):~~

September 30,

December 31,

September 30,

2017

2016

2016

U.S. (1):

Number of ventures

1

1

1

Number of operating properties owned

552

369

366

Square feet

88

50

49

Total assets

$
7,311

$
4,238

$
4,167

Other Americas (2):

Number of ventures

1

2

2

Number of operating properties owned

203

213

209

Square feet

37

42

41

Total assets

$
2,107

$
2,793

$
2,679

Europe (3):

Number of ventures

4

4

4

Number of operating properties owned

709

700

694

Square feet

167

163

160

Total assets

$
12,767

$
10,853

$
11,291

Asia:

Number of ventures

2

2

2

Number of operating properties owned

93

85

79

Square feet

40

36

34

Total assets

$
5,907

$
5,173

$
5,439

Total:

Number of ventures

8

9

9

Number of operating properties owned

1,557

1,367

1,348

Square feet

332

291

284

Total assets

$
28,092

$
23,057

$
23,576

~~(1)~~

~~In March 2017, we acquired our partner’s interest in NAIF, a consolidated co-investment venture. In July 2017, we contributed 190 operating properties owned by NAIF to USLF.~~

~~(2)~~

~~In August 2017, we acquired our partner’s interest in certain joint ventures in Brazil.~~

~~(3)~~

~~In January 2017, ELV contributed its properties to PTELF. In February 2017, we formed the co-investment venture UKLV.~~

real estate of $585 million, primarily due to the sale of non-strategic operating properties to third parties. Historically, we have utilized the proceeds from these transactions primarily to fund our development activities. See Note 3 to the Consolidated Financial Statements for ~~additional information.~~further information on these transactions.

~~G&A Expenses~~

G&A expenses increased $6 million for the nine months ended September 30, 2017, compared to the same period in 2016, primarily due to additional compensation expense based on the company’s performance.

We capitalize certain costs directly related to our development and leasing activities. Capitalized G&A expenses include salaries and related costs, as well as certain other G&A costs. The following table summarizes capitalized G&A amounts for the nine months ended September 30 (dollars in millions):

2017

2016

Building and land development activities

$
47

$
46

Leasing activities

18

18

Operating building improvements and other

11

12

Total capitalized G&A expenses

$
76

$
76

Capitalized salaries and related costs as a percent of total salaries and related costs

24.9
%

22.1
%

~~Depreciation and Amortization Expenses~~

~~The following table highlights the key changes in depreciation and amortization expenses for the nine months ended September 30, 2017, from the same period in 2016 (in millions):~~

Acquisition of properties

$
14

Development properties placed into service

24

Disposition and contribution of properties

(69
)
Other

(18
)
Total change in depreciation and amortization expenses

$
(49
)

Our Owned and Managed (“O&M”) Operating Portfolio

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 O&M basis, which includes our consolidated properties and properties owned ~~and managed basis.~~by our unconsolidated co-investment ventures. We believe reviewing ~~these~~the fundamentals this way allows management to understand the entire impact to the financial statements, as it will affect both the Real Estate ~~Operations~~Segment and the Strategic Capital ~~segments,~~Segment, as well as the net earnings we recognize from our unconsolidated co-investment ventures based on our ~~ownership share.~~ownership. We do not control the unconsolidated co-investment ventures for purposes of GAAP and the presentation of the ventures’ operating information does not represent a legal ~~claim to such items.~~claim.

Our ~~owned and managed~~O&M operating portfolio ~~includes operating properties and~~ does not include our development portfolio, value-added properties, ~~under development~~non-industrial properties or properties that we consider non-strategic and do not have the intent to hold long term that are classified as either held for sale or within other real estate investments. Value-added properties are properties we have either acquired at a discount and believe we could provide greater

Index

returns post-stabilization or properties we expect to ~~third parties (square feet in millions):~~

September 30, 2017

December 31, 2016

September 30, 2016

Number of Properties

Square
Feet

Percentage Occupied

Number of Properties

Square
Feet

Percentage Occupied

Number of Properties

Square
Feet

Percentage Occupied

Consolidated

1,577

300

96.7
%

1,777

332

97.0
%

1,796

333

96.4
%
Unconsolidated

1,554

331

95.9
%

1,359

290

97.2
%

1,335

282

96.8
%
Totals

3,131

631

96.3
%

3,136

622

97.1
%

3,131

615

96.6
%

~~Our operating portfolio excludes value-added properties, which are defined as properties that are expected to be repurposed or redeveloped~~repurpose to a higher and better use and recently acquired properties that present opportunities to create greater value. We had seven consolidated value-added properties totaling two million square feet and three unconsolidated value-added properties totaling less than one million square feet at September 30, 2017.

~~Operating Activity~~

~~Below is~~use. See below for information ~~summarizing the leasing activity of~~on our ~~owned and managed~~O&M operating ~~portfolio:~~

~~(1)~~

~~We retained more than 70% of our customers, based on the total square feet of leases signed, for each quarter in 2016 and 2017.~~

~~(2)~~

~~Turnover costs represent the obligations incurred in connection with the signing of a lease, including leasing commissions and tenant improvements.~~

~~Capital Expenditures~~

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 nine months ended September 30 (in millions):~~

2017

2016

Property improvements

$
115

$
105

Turnover costs:

Tenant improvements

91

91

Leasing commissions

87

84

Total turnover costs

178

175

Total capital expenditures

$
293

$
280

Our proportionate share of capital expenditures based on ownership (1)

$
189

$
184

~~(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 our development starts for the nine months ended September 30 (dollars and square~~(square feet in millions):


	March 31, 2023							December 31, 2022
	Number of Properties		Square Feet		Percentage Occupied			Number of Properties		Square Feet		Percentage Occupied
Consolidated		2,833		602		98.3	%		2,812		595		98.3	%
Unconsolidated		2,192		491		97.7	%		2,177		488		98.1	%
Total		5,025		1,093		98.0	%		4,989		1,083		98.2	%

Below are the key leasing metrics of our O&M operating portfolio.

2017 (1)

2016

Number of new development projects during the period

57

58

Square feet

21

16

TEI

$
1,841

$
1,219

Our proportionate share of TEI (2)

$
1,641

$
1,092

Percentage of build-to-suits based on TEI

47.8
%

42.8
%

(1)

~~(1)~~

~~We expect our properties under development at September 30, 2017, to be completed before April 2019.~~

~~(2)~~

~~We calculate our proportionate share~~Square feet of leases commenced and weighted average net effective rent change were calculated for leases with initial terms of one year or greater. We retained approximately 70% or more of ~~TEI by applying our ownership percentage of each co-investment venture on an entity-by-entity basis to the TEI of each co-investment venture for the period.~~

~~Development Stabilization Activity~~

~~The following table summarizes~~ our ~~development stabilization activity for~~customers, based on the ~~nine months ended September 30 (dollars and~~total square feet of leases commenced during these periods.

(2)

Calculated using the trailing twelve months immediately prior to the period ended.

(3)

Turnover costs include external leasing commissions and tenant improvements and represent the obligations incurred in ~~millions):~~connection with the lease commencement for leases greater than one year.

2017

2016

Number of development projects stabilized during the period

68

74

Square feet

21

24

TEI

$
1,718

$
1,767

Our proportionate share of TEI (1)

$
1,513

$
1,481

Weighted average expected yield on TEI (2)

6.7
%

7.0
%
Estimated value at completion

$
2,200

$
2,241

Our proportionate share of estimated value at completion (1)

$
1,944

$
1,891

Estimated weighted average margin

28.0
%

26.8
%

~~(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 co-investment venture for the period.

~~(2)~~

~~We calculate the weighted average expected yield on TEI as estimated NOI assuming stabilized occupancy divided by TEI.~~

Same Store Analysis

Our same store metrics are non-GAAP financial measures, which are commonly used in the real estate industry and expected from the financial community, on both a net effective and cash basis. 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, which ~~eliminates~~allows us and investors to analyze our ongoing business operations. We determine our same store metrics on property NOI, which is calculated as rental revenue less rental expense for the ~~effects of changes~~applicable properties in ~~the composition of the portfolio. We have defined~~ the same store ~~portfolio,~~population for both consolidated and unconsolidated properties based on our ownership interest, as further defined below.

We define our same store population for the three months ended ~~September 30, 2017,~~March 31, 2023 as ~~those~~the properties in our O&M operating portfolio, including the property NOI for both consolidated properties and properties owned ~~and managed properties that were in operation~~by the unconsolidated co-investment ventures, at January 1, ~~2016~~2022 and ~~have been in operation~~owned throughout the same three-month ~~periods~~period in both ~~2017~~2022 and 2016 (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.2023. We believe the

~~factors that affect rental revenues, rental expenses and~~ drivers of property NOI infor the ~~same store~~consolidated portfolio are generally the same as for the ~~total operating portfolio.~~properties owned by the ventures in which we invest and therefore we evaluate the same store metrics of the O&M portfolio based on Prologis’ ownership in the properties (“Prologis Share”). The same store population excludes properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the period (January 1, 2022) and properties acquired or disposed of to third parties during the period. To derive an appropriate measure of period-to-period operating performance, we remove the effects of foreign currency exchange rate movements by using the ~~recent period end~~reported period-end exchange rate to translate from local currency into the U.S. dollar for both periods.

~~Same store is a commonly used measure in the real estate industry. Our same store measures are~~38

Index

As non-GAAP financial measures, ~~that are calculated beginning with rental revenues, rental recoveries and rental expenses from~~ the ~~financial statements prepared in accordance with GAAP. As our~~ same store ~~measures are non-GAAP financial measures, they~~metrics have certain limitations as analytical tools and may vary among real estate companies. As a result, we provide a reconciliation of Rental Revenues less Rental Expenses (“Property NOI”) (from our Consolidated Financial Statements prepared in accordance with U.S. GAAP) to our Same Store Property NOI measures, as follows for the three months ended March 31 (dollars in millions):


							Percentage
	2023			2022			Change
Reconciliation of Consolidated Property NOI to Same Store Property NOI measures:

Rental revenues	$	1,634		$	1,077
Rental expenses		(413	)		(276	)
Consolidated Property NOI		1,221			801

Adjustments to derive same store results:
Property NOI from consolidated properties not included in same store portfolio and other adjustments (1)		(418	)		(71	)
Property NOI from unconsolidated co-investment ventures included in same store portfolio (1)(2)		701			645
Third parties' share of Property NOI from properties included in same store portfolio (1)(2)		(567	)		(522	)
Prologis Share of Same Store Property NOI – Net Effective (2)	$	937		$	853			9.9	%
Consolidated properties straight-line rent and fair value lease adjustments included in same store portfolio (3)		(18	)		(23	)
Unconsolidated co-investment ventures straight-line rent and fair value lease adjustments included in same store portfolio (3)		(7	)		(24	)
Third parties' share of straight-line rent and fair value lease adjustments included in same store portfolio (2)(3)		6			18
Prologis Share of Same Store Property NOI – Cash (2)(3)	$	918		$	824			11.4	%

(1)

We exclude properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the period and properties acquired or disposed of to third parties during the period. We also exclude net termination and renegotiation fees to allow us to evaluate the growth or decline in each property’s rental revenues without regard to one-time items that are not indicative of the property’s recurring operating performance. Net termination and renegotiation fees represent the gross fee negotiated to allow a customer to terminate or renegotiate their lease, offset by the write-off of the asset recorded due to the adjustment to straight-line rents over the lease term. Same Store Property NOI is adjusted to include an allocation of property management expenses for our consolidated properties based on the property management services provided to each property (generally, based on a percentage of revenues). On consolidation, these amounts are eliminated and the actual costs of providing property management and leasing services are recognized as part of our consolidated rental expense.

(2)

We include the Property NOI for the same store portfolio for both consolidated properties and properties owned by the co-investment ventures based on our investment in the underlying properties. In order to calculate our share of Same Store Property NOI from the co-investment ventures in which we own less than 100%, we use the co-investment ventures’ underlying Property NOI for the same store portfolio and apply our ownership percentage at March 31, 2023 to the Property NOI for both periods, including the properties contributed during the period. We adjust the total Property NOI from the same store portfolio of the co-investment ventures by subtracting the third parties’ share of both consolidated and unconsolidated co-investment ventures.

During the periods presented, certain wholly owned properties were contributed to a co-investment venture and are included in the same store portfolio. Neither our consolidated results nor those of the co-investment ventures, when viewed individually, would be comparable on a same store basis because of the changes in composition of the respective portfolios from period to period (e.g. the results of a contributed property are included in our consolidated results through the contribution date and in the results of the venture subsequent to the contribution date based on our ownership interest at the end of the period). As a result, only line items labeled “Prologis Share of Same Store Property NOI” are comparable period over period.

(3)

We further remove certain noncash items (straight-line rent and amortization of fair value lease adjustments) included in the financial statements prepared in accordance with U.S. GAAP to reflect a Same Store Property NOI – Cash measure.

We manage our business and compensate our executives based on the same store ~~property NOI with explanations of how these metrics are calculated.~~

~~The following is a reconciliation~~results of our ~~consolidated rental revenues, rental recoveries, rental expenses and property NOI,~~O&M portfolio at 100% as ~~included in~~we manage our portfolio on an ownership blind basis. We calculate those results by including 100% of the ~~Consolidated Statements of Income, to the respective amounts~~properties included in our same store ~~portfolio analysis for the three months ended September 30 (dollars in millions):~~portfolio.

Percentage

2017

2016

Change

Rental revenues (1) (2)

Consolidated:

Rental revenues per the Consolidated Statements of Income

$
416

$
436

Rental recoveries per the Consolidated Statements of Income

115

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

(63
)

(57
)

Effect of changes in foreign currency exchange rates and other

(1
)

-

Unconsolidated co-investment ventures – rental revenues

525

456

Same store portfolio – rental revenues (2)

992

959

3.4
%
Rental expenses (1) (3)

Consolidated:

Rental expenses per the Consolidated Statements of Income

129

141

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

(18
)

(17
)

Effect of changes in foreign currency exchange rates and other

13

12

Unconsolidated co-investment ventures – rental expenses

116

93

Same store portfolio – rental expenses (3)

240

229

4.8
%
NOI (1)

Consolidated:

Property NOI (calculated as rental revenues and rental recoveries less rental expenses
     per the Consolidated Statements of Income)

402

419

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

(45
)

(40
)

Effect of changes in foreign currency exchange rates and other

(14
)

(12
)

Unconsolidated co-investment ventures – property NOI

409

363

Same store portfolio – NOI

$
752

$
730

2.9
%

~~(1)~~

We include 100% of the same store NOI from the properties in our same store portfolio. During the periods presented, certain properties owned by us were contributed to a co-investment venture and are included in the same store portfolio. Neither our consolidated results nor those of the co-investment ventures, when viewed individually, would be comparable on a same store basis because of the changes in composition of the respective portfolios from period to period (e.g. the results of a contributed property are included in our consolidated results through the contribution date and in the results of the unconsolidated entities subsequent to the contribution date).

~~(2)~~

We exclude the net termination and renegotiation fees from our same store rental revenues to allow us to evaluate the growth or decline in each property’s rental revenues without regard to one-time items that are not indicative of the property’s recurring operating performance. Net termination and renegotiation fees represent the gross fee negotiated to allow a customer to terminate or renegotiate their lease, offset by the write-off of the asset recorded due to the adjustment to straight-line rents over the lease term. The adjustments to remove these items are included in “effect of changes in foreign currency exchange rates and other” in this table.

~~(3)~~

Rental expenses include the direct operating expenses of the property such as property taxes, insurance and utilities. In addition, we include an allocation of the property management expenses for our direct-owned properties based on the property management services provided to each property (generally, based on a percentage of revenues). On consolidation, these amounts are eliminated and the actual costs of providing property management services are recognized as part of our consolidated rental expenses. These expenses fluctuate based on the level of properties included in the same store portfolio and any adjustment is included as “effect of changes in foreign currency exchange rates and other” in this table.

Index

Other Components of Income (Expense)

Earnings from Unconsolidated Entities, Net

We recognized net earnings from unconsolidated entities, which are accounted for using the equity method, of ~~$172~~$76 million and ~~$146~~$77 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023 and ~~2016,~~2022, 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;~~properties and extinguishment of debt; (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~~unconsolidated entities above in the Strategic Capital ~~segment~~Segment discussion and in Note 34 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 ~~nine~~three months ended ~~September 30~~March 31 (dollars in millions):


	2017			2016			2023			2022
Gross interest expense	$	256		$	292		$	141		$	73
Amortization of premiums, net and debt issuance costs, net		(2	)		(13	)
Amortization of debt discount and debt issuance costs, net								18			2
Capitalized amounts		(42	)		(46	)		(23	)		(11	)
Net interest expense	$	212		$	233		$	136		$	64
Weighted average effective interest rate		3.2	%		3.3	%
Weighted average effective interest rate during the period								2.5	%		1.6	%

Our overall debt decreased by $887 million from December 31, 2016, to September 30, 2017, primarily from USLF assuming secured debt in conjunction with our contribution of real estate properties. Gross interestInterest expense ~~decreased for~~increased during the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023, as compared to the same period in ~~2016, principally~~2022, primarily due to ~~decreased secured~~assuming $4.2 billion of debt ~~as a result of the USLF contribution and pay downs, and lower interest rates due to the change~~ in the ~~composition~~Duke Transaction with a weighted average interest rate at fair value of ~~our~~4.9%, which included $2.9 billion of senior ~~notes.~~notes and a $501 million term loan. Additionally, we issued $2.6 billion of senior notes during the first quarter of 2023 and $3.3 billion during the year ended December 31, 2022, with a weighted average interest rate of 4.5% and 2.3%, respectively, at the issuance date.

See Note 56 to the Consolidated Financial Statements and the Liquidity and Capital Resources section below, 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~~

During the nine months ended September 30, 2017 and 2016, we recognized gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net of $959 million and $462 million, respectively. The increase was primarily from the contribution of 190 operating properties owned by NAIF, which was wholly-owned beginning March 2017, to our unconsolidated co-investment venture USLF in July 2017. See Note 2 and 3 to the Consolidated Financial Statements for further information on these activities.

Foreign Currency and Derivative ~~Losses,~~Gains and Other Income, Net

We recognized foreign currency and derivative gains and other income, net, of $9 million and $48 million for the three months ended March 31, 2023 and 2022, respectively.

We are exposed to foreign currency exchange risk related to investments in and earnings from our foreign investments. We primarily hedge our foreign currency risk related to our investments by borrowing in the currencies in which we invest thereby providing a natural hedge. We have issued debt in a currency that is not the same functional currency of the borrowing entity and have designated a portion of the debt as a nonderivative net investment hedge. We recognize the remeasurement and settlement of the translation adjustment on the unhedged portion of the debt and accrued interest in unrealized gains or losses. We may use derivative financial instruments to manage foreign currency exchange rate risk related to our earnings. We recognize the change in fair value of the undesignated derivative contracts in unrealized gains and losses. Upon settlement of these transactions, we recognize realized gains or losses.

The following table details our foreign currency and derivative ~~losses,~~gains, net for the ~~nine~~three months ended ~~September 30~~March 31 (in millions):

2017

2016

Realized foreign currency and derivative gains (losses):

Gains (losses) on the settlement of unhedged derivative transactions

$
11

$
(1
)
Losses on the settlement of transactions with third parties

(1
)

(4
)
Total realized foreign currency and derivative gains (losses)

10

(5
)

Unrealized foreign currency and derivative gains (losses), net:

Losses on the change in fair value of unhedged derivative transactions

(64
)

(25
)
Gains on remeasurement of certain assets and liabilities (1)

8

4

Total unrealized foreign currency and derivative losses, net

(56
)

(21
)
Total foreign currency and derivative losses, net

$
(46
)

$
(26
)

~~(1)~~

These gains or losses are from 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.


	2023			2022
Realized foreign currency and derivative gains (losses), net:
Gains on the settlement of undesignated derivatives	$	14		$	15
Losses on the settlement of transactions with third parties	-				(1	)
Total realized foreign currency and derivative gains, net		14			14

Unrealized foreign currency and derivative gains (losses), net:
Gains (losses) on the change in fair value of undesignated derivatives and unhedged debt		(18	)		30
Gains on remeasurement of certain assets and liabilities		8			3
Total unrealized foreign currency and derivative gains (losses), net		(10	)		33
Total foreign currency and derivative gains, net	$	4		$	47

Index

See Note 910 to the Consolidated Financial Statements for more information about our derivative and nonderivative transactions.

~~Gains (Losses) on Early Extinguishment of Debt, Net~~

During the nine months ended September 30, 2017, we redeemed $618 million of senior notes and repaid $302 million of secured mortgage debt prior to maturity, which resulted in a loss of $31 million. During the nine months ended September 30, 2016, we repaid $457 million of secured mortgage debt prior to maturity, which resulted in a gain of $2 million.

Income Tax Expense

We recognize ~~current~~ income tax expense ~~for income taxes incurred by~~related to our taxable REIT subsidiaries and in the local, state and ~~local income taxes and taxes incurred in the~~ foreign jurisdictions in which we operate. Our current income tax expense (benefit) fluctuates from period to period based ~~predominantly~~primarily on the timing of our taxable income, including gains on the disposition of properties and fees earned from the ~~dispositions of real estate.~~co-investment ventures. 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.~~subsidiaries.

The following table summarizes our income tax expense for the ~~nine~~three months ended ~~September 30~~March 31 (in millions):


	2017		2016			2023		2022
Current income tax expense (benefit):
Income tax expense	$	30	$	24		$	26	$	23
Income tax expense on dispositions		12		15
Income tax expense (benefit) on dispositions							2		(1	)
Total current income tax expense		42		39			28		22

Deferred income tax expense (benefit):
Income tax benefit		-		(2	)
Deferred income tax expense:
Income tax expense							4		7
Total deferred income tax expense							4		7
Total income tax expense	$	42	$	37		$	32	$	29

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~~ We had net earnings attributable to noncontrolling interests of $34 million and $69 million for the ~~nine~~three months ended ~~September 30 (in millions):~~March 31, 2023 and 2022, respectively. Included in these amounts were $12 million and $32 million for the three months ended March 31, 2023 and 2022, of net earnings attributable to the common limited partnership unitholders of Prologis, L.P.

2017

2016

Prologis U.S. Logistics Venture

$
31

$
14

Prologis North American Industrial Fund (1)

2

15

Other consolidated entities (2)

1

7

Prologis, L.P. net earnings attributable to noncontrolling interests

34

36

Limited partners in Prologis, L.P.

37

22

Prologis, Inc. net earnings attributable to noncontrolling interests

$
71

$
58

~~(1)~~

~~In March 2017, we acquired all of our partner’s interest in NAIF.~~

~~(2)~~

~~In March 2017, we acquired all of our partner’s interest in the Brazil Fund and own 100% of this venture.~~

See Note 67 to the Consolidated Financial Statements for further information on our ~~consolidated co-investment ventures.~~noncontrolling interests.

Other Comprehensive Income (Loss)

~~During~~The key driver of changes in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) during the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023 and 2022, was the currency translation adjustment derived from changes in exchange rates during both periods primarily on our net investments in real estate outside the U.S. and the borrowings we ~~recorded net gains of $47 million~~issue in the ~~Statements~~functional currencies of ~~Comprehensive Income related to foreign currency translations~~the countries where we invest. These borrowings serve as a natural hedge of our foreign ~~subsidiaries into U.S. dollars upon consolidation, offset by net losses on the translation of~~investments. In addition, we use derivative financial instruments, such as foreign currency forward and option contracts to manage foreign currency exchange rate risk related to our ~~derivative~~foreign investments and ~~nonderivative net investment hedges. These gains were principally due~~interest rate swaps to the strengthening of the British pound sterling, euro, Brazilian real and Japanese yen to the U.S. dollar. During the nine months ended September 30, 2016, we recorded net losses of $70 million, principally due to the weakening of the British pound sterling, offset slightly by the strengthening of the Brazilian real, euro and Japanese yen, all to the U.S. dollar.

During the nine months ended September 30, 2017, we recorded unrealized gains of $15 million and during the nine months ended September 30, 2016, we recorded unrealized losses of $17 million in the Statements of Comprehensive Income, related tomanage interest rate risk, that when designated the change in fair value ~~of our cash flow hedges and our share of derivatives~~is included in ~~our unconsolidated co-investment ventures.~~AOCI/L.

See Note 910 to the Consolidated Financial Statements for more information on changes in other comprehensive income (loss) and about our derivative and nonderivative transactions.

~~RESULTS OF OPERATIONS – THREE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016~~

Except as separately discussed above, the changes in comprehensive income attributable to common stockholders and its components for the three months ended September 30, 2017, as compared to the three months ended September 30, 2016, are similar to the changes for the nine month periods ended on the same dates.

LIQUIDITY AND CAPITAL RESOURCES

Overview

We consider our ability to generate cash from operating activities, distributions from our co-investment ventures, contributions and 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.

Given the uncertain macro environment and the impact on real estate valuations, we expect to be cautious as we evaluate capital deployment activities. We anticipate the pace of development starts and contributions into our open ended funds to increase in the second half of the year.

Near-Term Principal Cash Sources and Uses

In addition to dividends ~~to the common and preferred stockholders of Prologis, Inc.~~ and distributions, ~~to the holders of limited partnership units of Prologis, L.P. and our partner in our consolidated co-investment venture,~~ we expect our primary cash needs will consist of the following:

Index

•

completion of the development and leasing of the properties in our consolidated development portfolio (at ~~September 30, 2017, 79~~ March 31, 2023, 123properties in our development portfolio were ~~62.5%~~43.4% leased with a current investment of ~~$1.5~~$4.3 billion and a TEI of ~~$2.7~~$6.8 billion when completed and leased, leaving ~~$1.2~~$2.5 billion ~~remaining to be spent)~~of estimated additional required investment);

•

development of new properties that we may hold for long-term investment or subsequently contribute to unconsolidated co-investment ventures, including the acquisition of ~~land in certain markets;~~

land;

•

the acquisition of other real estate investments that we acquire with the intention of redeveloping into industrial properties;

•

capital expenditures and leasing costs on properties in our operating ~~portfolio;~~

portfolio, including investments in solar panels and other renewable energy improvements;

•

repayment of debt and scheduled principal payments of $4$32 million ~~for~~in the remainder of ~~2017~~2023 and ~~$581~~$520 million in ~~2018;~~

2024;

•

additional investments in current ~~unconsolidated entities or new investments in~~and future unconsolidated co-investment ventures and other ventures;

and

•

the acquisition of operating properties or portfolios of operating properties (depending on market and other conditions) for direct, long-term investment in our consolidated portfolio (this might include acquisitions from our unconsolidated entities).

•	acquisition of operating properties or portfolios of operating properties (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

We expect to fund our cash needs principally from the following sources (subject to market conditions):

•

net cash flow from property operations;

•

fees earned for services performed on behalf of co-investment ventures;

•

distributions received from co-investment ventures;

•

proceeds from the contribution of properties to current or future co-investment ventures;

•

proceeds from the disposition of properties or other investments to third parties;

•

available unrestricted cash balances ($523 million at March 31, 2023);

•

borrowing capacity under our current credit facility arrangements ($5.2 billion available at March 31, 2023 and on April 5, 2023, we amended and restated our 2021 Global Facility as the 2023 Global Facility and upsized it by $1.0 billion, bringing the total borrowing capacity of our credit facilities to $6.5 billion); and

•

proceeds from the issuance of debt.

Long-term, we may also voluntarily repurchase of our outstanding debt or equity securities (depending on prevailing market conditions, our liquidity, ~~requirements,~~ contractual restrictions and other factors) through cash purchases, open-market purchases, privately negotiated transactions, tender offers or otherwise.

We ~~expect to~~may also fund our cash needs ~~principally~~ from the ~~following sources (subject~~issuance of equity securities, subject to market ~~conditions):~~

~~available unrestricted cash balances ($569 million at September 30, 2017);~~

~~property operations;~~

~~fees earned for services performed on behalf of the co-investment ventures, 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;~~

~~proceeds from~~conditions, and through the sale of a portion of our investments in co-investment ~~ventures;~~

~~borrowing capacity under our current credit facility arrangements discussed in the following section, other facilities or borrowing arrangements ($3.5 billion at September 30, 2017); and~~

~~proceeds from the issuance of debt.~~

ventures.

~~We may also generate proceeds from the issuance of equity securities, subject to market conditions.~~

Debt

~~Debt~~

The following table summarizes information about our consolidated debt by currency (dollars in millions):


	March 31, 2023								December 31, 2022
	Weighted Average Interest Rate			Amount Outstanding		% of Total			Weighted Average Interest Rate			Amount Outstanding		% of Total
British pound sterling		2.1	%	$	1,264		5.0	%		2.1	%	$	1,228		5.1	%
Canadian dollar		4.9	%		813		3.2	%		4.5	%		815		3.4	%
Euro		1.7	%		9,101		36.2	%		1.3	%		7,991		33.5	%
Japanese yen		1.0	%		3,367		13.4	%		1.0	%		3,308		13.9	%
U.S. dollar		3.6	%		10,608		42.2	%		3.6	%		10,534		44.1	%
Total debt (1)		2.6	%	$	25,153		100.0	%		2.5	%	$	23,876		100.0	%

September 30,
2017

December 31,
2016

Debt outstanding

$
9,721

$
10,608

Weighted average interest rate

3.0
%

3.2
%
Weighted average maturity in months

66

60

(1)

The weighted average remaining maturity for total debt outstanding at March 31, 2023 and December 31, 2022 was 10 and 9 years, respectively.

~~In February 2017, we renewed~~42

Index

Our credit ratings at March 31, 2023, were A3 from Moody’s with a stable outlook and ~~amended~~A from Standard & Poor’s with a stable outlook. These ratings allow us to borrow at an advantageous interest rate. Adverse changes in our ~~Japanese yen revolver (the “Revolver”)~~credit ratings could negatively impact our business and, ~~increased~~in particular, our ~~availability under the Revolver~~refinancing and other capital market activities, our ability to ~~¥50.0 billion ($444 million at September 30, 2017).~~

~~In March 2017, we entered into an unsecured senior term loan agreement (the “2017 Yen Term Loan”) under which we can draw in Japanese yen, of which ¥7.2 billion ($64 million at September 30, 2017) matures in March 2027~~manage debt maturities, our future growth and ~~bears an interest rate of 0.9%~~our development and ~~¥4.8 billion ($43 million at September 30, 2017) matures in March 2028 and bears an interest rate of 1.0%. In the first quarter of 2017, we borrowed ¥12.0 billion ($107.3 million), causing the 2017 Yen Term Loan~~acquisition activity. A securities rating is not a recommendation to ~~be fully drawn at September 30, 2017.~~

In May 2017, we renewed and amended our existing senior term loan agreement (the “2017 Term Loan,” formerly the “Euro Term Loan”) under which loans can be obtained in British pounds sterling, euro, Japanese yen and U.S. dollars in an aggregate amount not to exceed $500 million. We may pay down and reborrow under the 2017 Term Loan. The 2017 Term Loan bears an interest rate of LIBOR plus 0.9%buy, sell or hold securities and is ~~scheduled to mature in~~ ~~May 2020; however, we may extend the maturity date twice, by one year each,~~ subject to revision or withdrawal at any time by the satisfaction of certain conditions and the payment of an extension fee. In the second quarter of 2017, we borrowed $500 million. In the third quarter of 2017, we repaid this balance and subsequently borrowed $160 million, which remained outstanding at September 30, 2017.rating organization.

In June 2017, we issued £500 million ($645 million) of senior notes with an interest rate of 2.3%, maturing in June 2029, at 99.9% of par value. Following the issuance, we used the cash proceeds to redeem $618 million of previously issued senior notes.

In July 2017, we contributed 190 operating properties owned by NAIF to USLF and received cash proceeds of $720 million that was used to pay down term loans and other borrowings. Also, USLF assumed $956 million of secured mortgage debt related to the properties.

At ~~September 30, 2017, we had credit facilities with an aggregate borrowing capacity of $3.5 billion, of which $3.4 billion was available for borrowing.~~

~~At September 30, 2017,~~March 31, 2023, we were in compliance with all of our financial debt covenants. These covenants include a number of customary financial covenants, ~~for total~~such as maintaining debt ~~encumbered debt~~service coverage ratios, leverage ratios and fixed charge coverage ratios.

See Note 56 to the Consolidated Financial Statements for further discussion 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. ~~For more information on~~

The following table summarizes the remaining equity commitments at March 31, 2023 (dollars in millions):


	Equity Commitments (1)
	Prologis		Venture Partners		Total		Expiration Date
Prologis Targeted U.S. Logistics Fund	$	-	$	1,125	$	1,125	2024 – 2026 (2)
Prologis European Logistics Fund		-		262		262	2025 – 2026 (2)
Prologis China Logistics Venture		252		1,318		1,570	2023 – 2028
Prologis Brazil Logistics Venture		34		135		169	2026
Total	$	286	$	2,840	$	3,126

(1)

The equity commitments for ~~our unconsolidated~~the co-investment ventures ~~see Note 3~~that operate in a different functional currency than the U.S. dollar were calculated using the foreign currency exchange rate at March 31, 2023.

(2)

Venture partners have the option to cancel their equity commitment starting 18 months after the ~~Consolidated Financial Statements.~~initial commitment date.

See the Cash Flow Summary below for more information about our investment activity in our co-investment ventures.

Cash Flow Summary

The following table summarizes our cash flow activity for the ~~nine~~three months ended ~~September 30 (in~~March 31(in millions):

2017

2016

Net cash provided by operating activities

$
1,360

$
997

Net cash provided by investing activities

$
342

$
730

Net cash used in financing activities

$
(1,957
)

$
(1,629
)


	2023			2022
Net cash provided by operating activities	$	1,114		$	842
Net cash provided by (used in) investing activities	$	(1,049	)	$	283
Net cash provided by financing activities	$	172		$	242
Net increase in cash and cash equivalents, including the effect of foreign currency exchange rates on cash	$	244		$	1,357

~~Cash Provided by~~ Operating Activities

Cash provided by and used in operating activities, exclusive of changes in receivables and payables, iswas impacted by the following significant ~~activity:~~activities during the three months ended March 31, 2023 and 2022:

•

Real ~~estate operations.~~Estate Segment. We receive the majority of our operating cash through the net revenues of our Real Estate ~~Operations segment.~~Segment, including the recovery of our operating costs. Cash flows generated by the Real Estate Segment are impacted by our acquisition, development and disposition activities, which are drivers of NOI recognized during each period. See the Results of Operations section above for further explanation of our Real Estate ~~Operations segment.~~Segment. The revenues from this segment include noncash adjustments for straight-lined ~~rent~~rents and amortization of above and below market leases of ~~$66~~$144 million and ~~$75~~$37 million ~~for 2017~~in 2023 and ~~2016,~~2022, respectively.

•

Strategic ~~capital.~~Capital Segment. We also generate operating cash through our Strategic Capital ~~segment~~Segment by providing asset management and property management and other services to our unconsolidated co-investment ~~ventures, including promotes.~~ventures. See the ~~Strategic Capital~~ Results of Operations section above for the key drivers of the net revenues from our ~~strategic capital revenues and expenses. We earned $88 million of~~Strategic Capital Segment. Included in Strategic Capital Revenues is the third-party investors’ share that is owed for promotes, which is recognized in operating activities in the ~~third quarter of 2016, which were included as strategic capital revenues but excluded from cash provided by operating activities as~~period the cash ~~was not~~is received, ~~until~~generally the ~~fourth~~ quarter ~~of 2016. Included in~~after the ~~cash provided by operating activities for 2016~~revenue is ~~$30 million of cash received, which represented the third-parties’ share of promotes earned in 2015.~~

recognized.

Index

•

G&A ~~expenses.~~expenses and equity-based compensation awards. We incurred ~~$171~~$100 million and ~~$166~~$74 million of G&A ~~costs~~expenses in ~~2017~~2023 and ~~2016,~~2022, respectively.

~~Equity-based compensation awards.~~ We ~~record~~recognized equity-based, noncash compensation expenses of $63 million and $41 million in 2023 and 2022, respectively, which were recorded to Rental Expensesin the Real Estate ~~Operations segment,~~ Segment, Strategic Capital Expenses in the Strategic Capital ~~segment~~Segment and G&A ~~expenses. The total amounts expensed were $58 million and $44 million in 2017 and 2016, respectively.~~

Expenses.

•

~~Distributions~~Operating distributions from unconsolidated entities. We received ~~$231~~$135 million and ~~$210~~$96 million of distributions as a return on our investment from the cash flows generated from the operations of our unconsolidated entities in ~~2017~~2023 and ~~2016,~~2022, respectively. ~~Included in 2016 are distributions of $27 million that represented our share of promotes earned in 2015.~~

•

Cash paid for interest, net of amounts capitalized. We paid interest, net of amounts capitalized, of $130 million and ~~income taxes.~~ ~~As disclosed~~$63 million in ~~Note 11, we~~2023 and 2022, respectively.

•

Cash paid ~~combined amounts~~ for ~~interest and~~ income taxes, net of ~~$262~~refunds. We paid income taxes, net of refunds, of $46 million and ~~$284~~$31 million in ~~2017~~2023 and ~~2016,~~2022, respectively.

~~Cash Provided by~~ Investing Activities

~~Real~~Cash provided by investing activities is driven by proceeds from the sale of real estate ~~development.~~ ~~We invested $1.1 billion~~assets that include the contribution of properties we developed to our unconsolidated co-investment ventures as well as the sale of operating properties. Contribution and ~~$1.2 billion~~disposition activity in ~~2017~~2023 was significantly lower than in 2022 due to a pause on contributions into our open ended funds given current market conditions and ~~2016, respectively,~~minimal sales of properties to third parties. Cash used in investing activities is principally driven by our capital deployment activities of investing in real estate development, acquisitions and ~~leasing costs~~capital expenditures as discussed above. Acquisition activity includes land for ~~first generation leases. We had 55~~future development, operating properties ~~under development~~ and ~~24 properties that were completed but not stabilized at September 30, 2017, and we expect to continue to develop new properties as the opportunities arise.~~

~~Real estate acquisitions.~~ ~~We acquired total~~other real estate of $295 million, which included 669 acres of land and 2 operating properties in 2017. We acquired total real estate of $281 million, which included 687 acres of land and 7 operating properties in 2016.

•	~~Capital expenditures.~~ We invested $181 million and $191 million in our operating properties during 2017 and 2016, respectively; which included recurring capital expenditures, tenant improvements and leasing commissions on existing operating properties that were previously leased.

~~Proceeds from contributions and dispositions.~~We generated cash from contributions and dispositions of real estate properties of $2.4 billion and $1.9 billion during 2017 and 2016, respectively. Included in this amount for 2017 is $720 million from the contribution of operating properties owned by NAIF to USLF.assets. See ~~Notes 2 and~~Note 3 to the Consolidated Financial Statements for further information on these activities. In addition, the following significant transactions also impacted our cash used in and provided by investing activities during the three months ended March 31, 2023 and 2022:

•

Duke Transaction, net of cash acquired. We paid transaction costs of $4 million in 2023 that were accrued at the time of the Duke acquisition. The acquisition was financed through the issuance of equity and the assumption of debt in 2022. See Note 2 to the Consolidated Financial Statements for more ~~detail about our contributions and dispositions.~~

information on this transaction.

•

Investments in and advances ~~to.~~to our unconsolidated entities.We ~~invest~~invested cash in our unconsolidated ~~co-investment ventures and other ventures, which represents~~entities that represented our proportionate ~~share.~~share, of $40 million and $35 million in 2023 and 2022, respectively. The ventures ~~primarily use~~used the funds for the acquisition of ~~operating~~ properties, development and repayment of debt. ~~The following table summarizes the cash investments we made in our unconsolidated co-investment ventures for the nine months ended September 30 (in millions):~~

2017

2016

Unconsolidated co-investment ventures:

Other Americas

Prologis Brazil Logistics Partners Fund I and related joint ventures

$
27

$
32

Europe

Europe Logistics Venture 1

19

-

Prologis European Logistics Partners Sàrl

10

124

Prologis United Kingdom Logistics Venture

31

-

Asia

Nippon Prologis REIT, Inc.

46

34

Remaining unconsolidated co-investment ventures

13

12

Total unconsolidated co-investment ventures

146

202

Other ventures

98

27

Total investments in and advances to unconsolidated entities

$
244

$
229

See Note 34 to the Consolidated Financial Statements for more detail on our unconsolidated co-investment ventures.

~~Purchase of a controlling interest.~~ ~~We paid net cash of $375 million to acquire a controlling interest in certain joint ventures in Brazil in 2017.~~

•

Return of ~~investment.~~investment from unconsolidated entities.We received distributions from unconsolidated ~~co-investment ventures and other ventures~~entities as a return of investment of ~~$144~~$21 million and ~~$579~~$14 million ~~during 2017~~in 2023 and ~~2016,~~2022, respectively. Included in ~~this amount for 2017 is $84 million~~these amounts were distributions from venture activities including proceeds from property sales, debt refinancing and the ~~disposition~~redemption of our investment in ~~ELV and $59 million~~certain unconsolidated entities.

•

Net proceeds from ~~property dispositions within our unconsolidated co-investment ventures. Included in this amount for 2016 is $411 million from~~(payments on) the ~~redemption~~settlement of ~~a portion of our investments in PTELF and USLF, $68 million from dispositions within Prologis European Logistics Partners Sàrl and $79 million from the disposition of our~~net investment ~~in a joint venture. The remaining amount was from property dispositions within our other unconsolidated entities.~~

~~Proceeds from repayment of notes receivable backed by real estate.~~hedges. We received ~~$32~~net proceeds of $5 million and ~~$201 million in 2017 and 2016, respectively, for the payment of notes receivable received in connection with dispositions of real estate to third parties.~~

~~Cash Used in Financing Activities~~

~~Dividends paid on common and preferred stock.~~ ~~We paid dividends of $707 million and $669 million to our common and preferred stockholders during 2017 and 2016, respectively.~~

~~Noncontrolling interests contributions.~~ ~~Our partner in U.S. Logistics Venture (“USLV”) made contributions of $136~~$3 million for the ~~pay down~~settlement of ~~secured mortgage debt~~net investment hedges in ~~2017.~~

~~Noncontrolling interests distributions.We distributed $132 million~~2023 and ~~$301 million to various noncontrolling interests in 2017 and 2016,~~2022, respectively. Distributions in 2017 included $28 million related to proceeds from dispositions of real estate. Distributions in 2016 included $199 million related to proceeds from dispositions of real estate, primarily to our partner in USLV. Included in these amounts in both 2017 and 2016 were $28 million of distributions to common limited partnership unitholders of Prologis, L.P.

~~Purchase of noncontrolling interests.~~ ~~We paid $710 million to acquire our partner’s interest in NAIF and $80 million to acquire our partner’s interest in the Brazil Fund in 2017.~~

•

~~Repurchase and payments of debt.~~ During 2017, we made payments of $1.5 billion, primarily on our outstanding term loans and $234 million on regularly scheduled debt principal payments and payments at maturity. We also repurchased and extinguished senior notes and secured mortgage debt for a combined total of $954 million, which included extinguishment costs. During 2016,

we made payments of $1.0 billion on our outstanding term loans and $169 million on regularly scheduled debt principal payments and payments at maturity. We also repurchased and extinguished secured mortgage debt of $461 million, which included extinguishment costs.

~~Proceeds from issuance of debt.~~In 2017, we issued $1.5 billion of term loans, £500 million ($645 million) of senior notes and $148 million of secured mortgage debt and used the net proceeds to repurchase and extinguish senior notes and secured mortgage debt and for general corporate purposes. In 2016, we issued $638 million of term loans and $374 million of secured mortgage debt and used the net proceeds for general corporate purposes. See Note 510 to the Consolidated Financial Statements for ~~more detail~~further information on ~~debt.~~

our derivative transactions.

~~Off-Balance Sheet Arrangements~~Financing Activities

Cash provided by and used in financing activities is principally driven by proceeds from and payments on credit facilities and other debt, along with dividends paid on common and preferred stock and noncontrolling interest contributions and distributions.

Our repurchase of and payments on debt and proceeds from the issuance of debt consisted of the following activity for the three months ended March 31 (in millions):


	2023		2022
Repurchase of and payments on debt (including extinguishment costs)
Regularly scheduled debt principal payments and payments at maturity	$	2	$	174
Secured mortgage debt		-		159
Senior notes		89		-
Total	$	91	$	333

Proceeds from the issuance of debt
Secured mortgage debt	$	7	$	-
Senior notes		2,538		1,841
Total	$	2,545	$	1,841

Index

Unconsolidated Co-Investment Venture Debt

We had investments in and advances to our unconsolidated co-investment ventures of $8.1 billion at ~~September 30, 2017, of $5.1 billion.~~March 31, 2023. These ventures had total third-party debt of ~~$7.9~~$13.6 billion at ~~September 30, 2017.~~March 31, 2023with a weighted average remaining maturity of 7 years and weighted average interest rate of 2.9%. The weighted average loan-to-value ratio for all unconsolidated co-investment ventures was 26.2% at March 31, 2023 based on gross book value. Loan-to-value, a non-GAAP measure, was calculated as the percentage of total third-party debt to the gross book value of real estate for each venture and weighted based on the cumulative gross book value of all unconsolidated co-investment ventures.

At ~~September 30, 2017,~~March 31, 2023, we did not guarantee any third-party debt of the unconsolidated co-investment ventures. In our role as the manager or sponsor, we work with the ventures to refinance their maturing debt. There can be no assurance that the 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

Dividend 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.~~Distribution Requirements

~~Contractual Obligations~~

~~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,~~IRC, relative to maintaining our REIT status, while still allowing us to retain cash to ~~meet other needs such as~~fund our capital ~~improvements~~deployment and other investment activities.

Under the IRC, REITs may be subject to certain federal income and excise taxes on undistributed taxable income.

We paid aquarterly cash ~~dividend~~dividends of ~~$0.44~~$0.87 and $0.79 per common share in the first ~~three quarters~~quarter of ~~2017.~~2023 and 2022, respectively. Our future common stock dividends, if and as declared, may vary and will be determined by the ~~board of directors (the “Board”)~~Board based 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.

We make distributions on the common limited partnership units outstanding at the same per unit amount as our common stock dividend. The Class A Units in the OP 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. We paid a quarterly cash distribution of $0.64665 per Class A Unit in the first quarter of 2023 and 2022.

At ~~September 30, 2017, we had one series of~~March 31, 2023, our Series Q preferred stock ~~outstanding, the series Q. The~~had an annual dividend rate isof 8.54% per share and the 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~~an ongoing basis, we are engaged in various stages of negotiations for the acquisition or disposition of individual properties or portfolios of properties.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 1 to the Consolidated Financial Statements.

FUNDS 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.

The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as earnings computed under GAAP to exclude historical cost depreciation and gains and losses from the sales net of any related tax, along with impairment charges, of previously depreciated properties. We also exclude the gains on revaluation of equity investments upon acquisition of a controlling interest and the gain recognized from a partial sale of our investment, as these are similar to gains from the sales of previously depreciated properties. We exclude similar adjustments from our unconsolidated entities and the third parties’ share of our consolidated co-investment ventures.

Our FFO Measures

Our FFO measures begin with NAREIT’s definition and we make certain adjustments to reflect our business and the way that management plans and executes our business strategy. While not infrequent or unusual, the additional items we adjust for in calculating FFO, as modified by Prologis and Core FFO, both as defined below, are subject to significant fluctuations from period to period. 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

Index

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 calculate our FFO measures, as defined below, 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 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.

We analyze our operating performance ~~primarily~~principally by the rental ~~revenues~~revenue of our real estate and the revenues from our strategic 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.

FFO, as modified by Prologis attributable to common ~~stockholders and~~ stockholders/unitholders (“FFO, as modified by Prologis”)

To arrive at FFO, as modified by Prologis, we adjust the NAREIT defined FFO measure to exclude the impact of foreign currency related items and deferred tax, specifically:

•

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;

and

•

~~unhedged~~ foreign currency exchange gains and losses resulting from (i) 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~~entities, (ii) third-party debt ofthat is used to hedge our investment in foreign ~~consolidated~~entities, (iii) derivative financial instruments related to any such debt transactions, and ~~unconsolidated entities; and~~

(iv) mark-to-market adjustments associated with other 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~~ stockholders/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~~recognize directly in FFO, as modified by Prologis:

•

gains or losses from the disposition of land and 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 of our change in intent to contribute or sell these properties;

•

gains or losses from the early extinguishment of debt and redemption and repurchase of preferred stock; and

•

expenses related to natural disasters.

We use Core FFO, including by segment and region, to: (i) assess our operating performance as compared to other real estate companies; (ii) evaluate our performance and the performance of our properties in comparison with expected results and results of previous periods; (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)~~(vi) evaluate how a specific potential investment will impact our future results.

Limitations on the use of our FFO measures

While we believe our modified 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 the limitations are:

Index

•

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 ~~and~~ dispositions orand 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 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 or preferred stock that we exclude from our Core FFO, may provide a benefit or cost to us as we may be settling our ~~debt~~obligation at less or more than our future obligation.

•

The natural disaster expenses that we exclude from Core FFO are costs that we have incurred.

We compensate for these limitations by using our FFO measures only in conjunction with net earnings computed under GAAP when making our decisions. This information should be read with our complete Consolidated Financial Statements prepared under GAAP. To assist investors in compensating for these limitations, we reconcile our modified FFO measures to our net earnings computed under GAAP for ~~nine~~three months ended ~~September 30~~March 31 as follows (in millions).:

2017

2016

FFO

Reconciliation of net earnings to FFO measures:

Net earnings attributable to common stockholders

$
1,346

$
763

Add (deduct) NAREIT defined adjustments:

Real estate related depreciation and amortization

633

682

Gains on dispositions of investments in real estate properties and revaluation of equity investments
upon acquisition of a controlling interest, net

(723
)

(302
)
Reconciling items related to noncontrolling interests

(41
)

(87
)
Our share of reconciling items included in earnings from unconsolidated entities

108

117

NAREIT defined FFO

1,323

1,173

Add (deduct) our modified adjustments:

Unrealized foreign currency and derivative losses, net

56

22

Deferred income tax benefit, net

-

(2
)
Our share of reconciling items included in earnings from unconsolidated entities

(3
)

1

FFO, as modified by Prologis

1,376

1,194

Adjustments to arrive at Core FFO:

Gains on dispositions of development properties and land, net

(236
)

(160
)
Current income tax expense on dispositions

12

15

Acquisition expenses

-

2

Losses (gains) on early extinguishment of debt, net

31

(2
)
Reconciling items related to noncontrolling interests

-

4

Our share of reconciling items included in earnings from unconsolidated entities

(5
)

3

Core FFO

$
1,178

$
1,056


	2023			2022
Reconciliation of net earnings attributable to common stockholders to FFO measures:
Net earnings attributable to common stockholders	$	463		$	1,149

Add (deduct) NAREIT defined adjustments:
Real estate related depreciation and amortization		590			385
Gains on other dispositions of investments in real estate, net of taxes		(3	)		(589	)
Reconciling items related to noncontrolling interests		(18	)		17
Our share of reconciling items included in earnings related to unconsolidated entities		115			82
NAREIT defined FFO attributable to common stockholders/unitholders		1,147			1,044

Add (deduct) our modified adjustments:
Unrealized foreign currency and derivative losses (gains), net		8			(33	)
Deferred income tax expense		4			7
FFO, as modified by Prologis attributable to common stockholders/unitholders		1,159			1,018

Adjustments to arrive at Core FFO:
Gains on dispositions of development properties and land, net		-			(210	)
Current income tax expense on dispositions		-			4
Losses (gains) on early extinguishment of debt, net		(3	)		18
Reconciling items related to noncontrolling interests		-			4
Our share of reconciling items included in earnings related to unconsolidated entities		1			-
Core FFO attributable to common stockholders/unitholders	$	1,157		$	834

Index

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to the impact of ~~foreign-exchange related~~foreign exchange-related variability and earnings volatility on our foreign investments and interest rate changes. See our risk factors in Part 1, Item 1A. Risk Factors in our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016.~~2022. See also Note ~~9 to~~10 in the Consolidated Financial Statements in Item 1 for more information about our foreign operations and derivative financial 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 foreign currency exchange rates or interest rates at ~~September 30, 2017.~~March 31, 2023. The results of the sensitivity analysis are summarized 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~~foreign currency exchange rate and ~~foreign currency exchange~~interest 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 and interest rates.

Foreign Currency Risk

We are exposed to foreign ~~exchange-related~~currency exchange variability ofrelated to investments in and earnings from our foreign investments. Foreign currency market risk is the possibility that our ~~financial~~ results of operations or financial position could be better or worse than planned because of changes in foreign currency exchange rates. We primarily hedge our foreign currency risk by borrowing in the currencies in which we invest thereby providing a natural hedge. Additionally, we hedge our foreign currency risk by entering into derivative financial instruments that we designate as net investment hedges, as these amounts offset the translation adjustments on the underlying net assets of our foreign investments. At ~~September 30, 2017,~~March 31, 2023, after consideration of our ability to borrow in the foreign currencies in which we invest and also derivative and nonderivative financial instruments as discussed in Note 10 to the Consolidated Financial Statements, we had ~~net equity of approximately $1.7 billion, or 8.1% of total~~minimal net equity denominated in a currency other than the U.S. ~~dollar, after consideration~~dollar.

For the three months ended March 31, 2023, $128 million or 7% of our ~~derivative and nonderivative financial instruments. Based on our sensitivity analysis, a 10% adverse change~~total consolidated revenue was denominated in ~~exchange rates would cause a reduction of $172 million to our net equity.~~

~~At September 30, 2017, we had~~foreign currencies. We enter into other foreign currency contracts, such as forwards, to reduce fluctuations in foreign currency associated with the translation of the future earnings of our international subsidiaries. We have forward contracts ~~which~~that were not designated ~~and qualify~~ as ~~net investment~~ hedges, ~~with an aggregate notional amount of $99 million to hedge a portion of our investments~~denominated principally in Canada. On the basis of our sensitivity analysis, a weakening of the U.S. dollar against the Canadian dollar by 10% would result in a $10 million negative change in our cash flows on 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 ~~$492 million~~$1.6 billion to mitigate risk associated with the translation of the ~~projected financial results~~future earnings of our subsidiaries denominated in ~~Canada, Europe~~these currencies. The gain or loss on settlement of these contracts is included in our earnings and ~~Japan. A~~offsets the lower or higher translation of earnings from our investments denominated in currencies other than the U.S. dollar. Although the impact to net earnings is mitigated through higher translated U.S. dollar earnings from these currencies, a weakening of the U.S. dollar against these currencies by 10% ~~would~~could result in a ~~$49~~$163 million ~~negative change in our net income and~~ cash ~~flows~~payment on ~~settlement.~~settlement of these contracts.

Interest Rate Risk

We are also ~~are~~ exposed to the impact of interest rate changes on future earnings and cash flows. ~~At September 30, 2017,~~To mitigate that risk, we ~~had $1.7 billion of variable~~generally borrow with fixed rate debt ~~outstanding, of which $1.6 billion was outstanding on our term loans~~ and ~~$50 million was outstanding on secured mortgage debt. At September 30, 2017,~~ we ~~had interest rate swap agreements~~may use derivative instruments to fix the interest rate on ~~$299~~our variable rate debt. At March 31, 2023, $23.7 billion of our debt bore interest at fixed rates and therefore the fair value of these instruments was affected by changes in market interest rates. At March 31, 2023, $2.0 billion of our debt bore interest at variable rates. The following table summarizes the future repayment of debt and scheduled principal payments at March 31, 2023 (dollars in millions):


	2023			2024			2025			2026			Thereafter			Total			Fair Value
Fixed rate debt (1)	$	28		$	258		$	175		$	1,313		$	21,950		$	23,724		$	19,992
Weighted average interest rate (2)		3.9	%		1.3	%		3.2	%		3.3	%		2.5	%		2.6	%

Variable rate debt
Credit facilities	$	-		$	99		$	-		$	114		$	-		$	213		$	213
Secured mortgage debt		4			-			17			64			-			85			84
Senior notes		-			163			-			-			-			163			163
Term loans		-			-			721			638			188			1,547			1,544
Total variable rate debt	$	4		$	262		$	738		$	816		$	188		$	2,008		$	2,004

(1)

At March 31, 2023, we had one interest rate swap agreement to fix €150 million ~~(CAD $372~~($156 million) of our ~~Canadian term loan. During the nine months ended September 30, 2017, we had~~floating rate euro senior notes which is included in fixed rate debt.

(2)

The weighted average ~~daily~~interest rates represent the effective interest rates (including amortization of debt issuance costs and noncash premiums and discounts) at March 31, 2023 for the debt outstanding ~~borrowings~~and include the impact of ~~$56 million~~designated interest rate swaps, which effectively fix the interest rate on certain variable rate debt.

Index

At March 31, 2023, the weighted average effective interest rate on our variable rate debt was 2.9% which was calculated using an average balance on our credit ~~facilities.~~facilities throughout the year and our other variable rate debt balances at March 31, 2023. Changes in interest rates can cause interest expense to fluctuate on our variable rate debt. On the basis of our sensitivity analysis, a 10% ~~adverse change~~increase in interest rates ~~based~~ on our average outstanding variable rate debt balances ~~not subject to interest rate swap agreements during the period~~ would result in additional annual interest expense of $1$6 million for the quarter ended March 31, 2023, which equates to a change in interest rates of 929 basis ~~points.~~points on our average outstanding variable rate debt balances and 2 basis points on our average total debt portfolio balances.

ITEM 4. Controls and Procedures

Controls and Procedures ~~(The Parent)~~(Prologis, Inc.)

~~The Parent~~Prologis, Inc. carried out an evaluation under the supervision and with the participation of management, including the ~~chief executive officer~~Chief Executive Officer and ~~chief financial officer,~~Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-14(c)) under the Securities and Exchange Act of 1934 (the “Exchange Act”) at ~~September 30, 2017. On the basis of~~March 31, 2023. Based on this evaluation, the ~~chief executive officer~~Chief Executive Officer and the ~~chief financial officer~~Chief Financial Officer have concluded that the disclosure controls and procedures are effective to ensure that ~~the~~ information required to be disclosed by us in reports that ~~are filed~~we file or ~~submitted~~submit under the Exchange Act ~~are~~is recorded, processed, summarized and reported within the time periods specified in the ~~Securities and Exchange Commission (“SEC”)~~SEC rules and forms.

NoChanges in Internal Control over Financial Reporting

There have not been any changes in ~~the~~Prologis, Inc.’s internal ~~controls~~control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the ~~most recent fiscal~~ quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, Prologis, Inc.’s internal control over financial reporting.

Controls and Procedures ~~(The Operating Partnership)~~(Prologis, L.P.)

~~The Operating Partnership~~Prologis, L.P. carried out an evaluation under the supervision and with the participation of management, including the ~~chief executive officer~~Chief Executive Officer and ~~chief financial officer,~~Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-14(c)) under the Exchange Act at ~~September 30, 2017. On the basis of~~March 31, 2023. Based on this evaluation, the ~~chief executive officer~~Chief Executive Officer and the ~~chief financial officer~~Chief Financial Officer have concluded that the disclosure controls and procedures are effective to ensure that ~~the~~ information required to be disclosed by us in reports that ~~are filed~~we file or ~~submitted~~submit under the Exchange Act ~~are~~is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.

NoChanges in Internal Control over Financial Reporting

There have not been any changes in ~~the~~Prologis, L.P.’s internal ~~controls~~control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the ~~most recent fiscal~~ quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, Prologis, L.P.’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

Prologis and our unconsolidated ~~investees~~entities are party to a variety of legal proceedings arising in the ordinary course of business. With respect to any such matters to which we are currently a party, the ultimate disposition of any such matters will not result in a material adverse effect on our business, financial position or results of operations.

ITEM 1A. Risk Factors

At ~~September 30, 2017,~~March 31, 2023, no material changes had occurred in our risk factors as discussed in Item 1A1A. in our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016.~~2022.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the ~~quarter~~quarterly period ended ~~September 30, 2017,~~March 31, 2023, we issued ~~an aggregate of 0.6~~less than 0.1 million shares of common stock of Prologis, Inc. in connection with the ~~Parent upon~~ redemption of common units of ~~the Operating Partnership. The shares of common stock were issued~~Prologis, L.P. in reliance on the exemption from registration requirements of the Securities Act of 1933, as amended, afforded by Section 4(a)(2) thereof.

ITEM 3. Defaults Upon Senior Securities

None.

Index

ITEM 4. Mine Safety Disclosures

Not Applicable.

ITEM 5. Other Information

~~None.~~On April 27, 2023, the Parent amended the partnership agreement of the Operating Partnership to clarify the allocation and treatment of certain entity level taxes that are attributable to specific limited partners or that relate to tax elections made by specific limited partners.

ITEM 6. Exhibits

The exhibits required by this item are set forth on the Exhibit Index attached hereto.

Index

INDEX TO EXHIBITS

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 (“SEC”) and, pursuant to Rule 12-b-32, are incorporated herein by reference.


~~12.1†~~3.1†	~~Computation~~Fourth Amendment to Thirteenth Amended and Restated Agreement of ~~Ratio of Earnings to Fixed Charges~~Limited Partnership of Prologis, ~~Inc. and Prologis,~~ L.P., dated April 27, 2023.

~~12.2†~~4.1	~~Computation~~Form of ~~Ratio of Earnings~~Officers’ Certificate related to ~~Combined Fixed Charges and Preferred Stock/Unit Dividends, of Prologis, Inc. and Prologis, L.P.~~the 3.875% Notes due 2030 (incorporated by reference to Exhibit 4.1 to Prologis' Current Report Form 8-K filed on January 31, 2023).

~~15.1†~~4.2	Form of 3.875% Notes due 2030 (incorporated by reference to Exhibit 4.2 to Prologis' Current Report Form 8-K filed on January 31, 2023).

4.3	Form of Officers’ Certificate related to the 4.250% Notes due 2043 (incorporated by reference to Exhibit 4.3 to Prologis' Current Report Form 8-K filed on January 31, 2023).

4.4	Form of 4.250% Notes due 2043 (incorporated by reference to Exhibit 4.4 to Prologis' Current Report Form 8-K filed on January 31, 2023).

4.5	Form of Officers’ Certificate related to the 4.750% Notes due 2033 (incorporated by reference to Exhibit 4.1 to Prologis' Current Report Form 8-K filed on March 30, 2023).

4.6	Form of 4.750% Notes due 2033 (incorporated by reference to Exhibit 4.2 to Prologis' Current Report Form 8-K filed on March 30, 2023).

4.7	Form of Officers’ Certificate related to the 5.250% Notes due 2053 (incorporated by reference to Exhibit 4.3 to Prologis' Current Report Form 8-K filed on March 30, 2023).

4.8	Form of 5.250% Notes due 2053 (incorporated by reference to Exhibit 4.4 to Prologis' Current Report Form 8-K filed on March 30, 2023).

10.1	Form of Change of Control and Noncompetition Agreement by and between Prologis, Inc. and its executive officers (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report Form 8-K filed on January 5, 2023).

10.2	Form of Retirement Eligibility Waiver Amendment for Named Executive Officers (other than Hamid Moghadam) (incorporated by reference to Exhibit 10.2 to Prologis’ Current Report Form 8-K filed on January 5, 2023).

15.1†	KPMG LLP Awareness Letter of Prologis, Inc.

15.2†	KPMG LLP Awareness Letter of Prologis, L.P.

~~31.1†~~22.1†	Subsidiary guarantors and issuers of guaranteed securities.

31.1†	Certification of Chief Executive Officer of Prologis, Inc.

31.2†	Certification of Chief Financial Officer of Prologis, Inc.

31.3†	Certification of Chief Executive Officer for Prologis, L.P.

31.4†	Certification of Chief Financial Officer for Prologis, L.P.

32.1†	Certification of Chief Executive Officer and Chief Financial Officer of Prologis, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2†	Certification of Chief Executive Officer and Chief Financial Officer for Prologis, L.P., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS†	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document.

101.SCH†	Inline XBRL Taxonomy Extension Schema

101.CAL†	Inline XBRL Taxonomy Extension Calculation Linkbase

Index


101.DEF†	Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB†	Inline XBRL Taxonomy Extension Label Linkbase

101.PRE†	Inline XBRL Taxonomy Extension Presentation Linkbase

†104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

†	Filed herewith

~~SIGNATURES~~

Index

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.


	PROLOGIS, INC.

~~By:~~	By:	/s/ ~~Thomas S. Olinger~~Timothy D. Arndt
	~~Thomas S. Olinger~~	Timothy D. Arndt
		Chief Financial Officer

~~By:~~	By:	/s/ Lori A. Palazzolo
		Lori A. Palazzolo
		Managing Director and Chief Accounting Officer

	PROLOGIS, L.P.
~~By:~~
	By:	Prologis, Inc., its general partner

~~By:~~	By:	/s/ ~~Thomas S. Olinger~~Timothy D. Arndt
	~~Thomas S. Olinger~~	Timothy D. Arndt
		Chief Financial Officer

~~By:~~	By:	/s/ Lori A. Palazzolo
		Lori A. Palazzolo
		Managing Director and Chief Accounting Officer

Date: ~~October 27, 2017~~April 28, 2023


	September 30, 2017			December 31,
	(Unaudited)			2016
ASSETS
Investments in real estate properties	$	25,977,157		$	27,119,330
Less accumulated depreciation		3,977,667			3,758,372
Net investments in real estate properties		21,999,490			23,360,958
Investments in and advances to unconsolidated entities		5,371,758			4,230,429
Assets held for sale or contribution		321,905			322,139
Notes receivable backed by real estate		-			32,100
Net investments in real estate		27,693,153			27,945,626

Cash and cash equivalents		568,726			807,316
Other assets		1,392,271			1,496,990
Total assets	$	29,654,150		$	30,249,932

LIABILITIES AND EQUITY
Liabilities:
Debt	$	9,721,065		$	10,608,294
Accounts payable and accrued expenses		707,049			556,179
Other liabilities		666,780			627,319
Total liabilities		11,094,894			11,791,792

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 September 30, 2017, and December 31, 2016		78,235			78,235
Common stock: $0.01 par value; 532,081 shares and 528,671 shares issued and outstanding at September 30, 2017, and December 31, 2016, respectively		5,321			5,287
Additional paid-in capital		19,350,643			19,455,039
Accumulated other comprehensive loss		(924,620	)		(937,473	)
Distributions in excess of net earnings		(2,965,828	)		(3,610,007	)
Total Prologis, Inc. stockholders’ equity		15,543,751			14,991,081
Noncontrolling interests		3,015,505			3,467,059
Total equity		18,559,256			18,458,140
Total liabilities and equity	$	29,654,150		$	30,249,932


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Acquisitions of operating properties from third parties and a controlling interest in an unconsolidated venture
Number of operating properties		12		1		14		7
Square feet		6,328		42		6,478		931
Acquisition value of net investments in real estate properties (1)	$	703,686	$	16,795	$	744,581	$	86,840

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Strategic capital revenues from unconsolidated co-investment ventures, net:
U.S.	$	16,841	$	9,565	$	158,064	$	27,739
Other Americas		6,216		5,806		22,131		16,885
Europe		26,323		113,489		78,450		161,257
Asia		18,271		13,174		44,990		39,429
Total	$	67,651	$	142,034	$	303,635	$	245,310

Earnings from unconsolidated co-investment ventures, net:
U.S.	$	18,307	$	1,763	$	25,216	$	9,140
Other Americas		6,570		8,077		22,073		20,885
Europe		23,848		29,802		89,622		90,395
Asia		5,050		4,905		23,489		12,253
Total	$	53,775	$	44,547	$	160,400	$	132,673

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2017		2016		2017		2016
Revenues:
U.S.	$	160	$	100	$	369	$	296
Other Americas		60		63		190		179
Europe		266		232		758		724
Asia		95		91		272		253
Total revenues	$	581	$	486	$	1,589	$	1,452

Net earnings:
U.S.	$	64	$	11	$	115	$	47
Other Americas		19		20		58		53
Europe		63		77		229		218
Asia		30		30		147		74
Total net earnings	$	176	$	138	$	549	$	392

	Equity Commitments						Expiration Date for Remaining Commitments
	Prologis		Venture Partners		Total
Prologis Targeted U.S. Logistics Fund	$	-	$	195	$	195	2019
Prologis Targeted Europe Logistics Fund (1)		-		623		623	2018 – 2019
Prologis United Kingdom Logistics Venture (2)		37		207		244	2021
Prologis China Logistics Venture		294		1,665		1,959	2020 – 2024
Totals	$	331	$	2,690	$	3,021

	September 30, 2017					December 31, 2016
	Weighted Average Interest Rate (1)			Amount Outstanding (2)		Weighted Average Interest Rate (1)			Amount Outstanding
Credit facilities		-		$	-		1.0	%	$	35,023
Senior notes		3.1	%		6,874,108		3.3	%		6,417,492
Term loans		1.5	%		1,620,688		1.4	%		1,484,523
Unsecured other		6.1	%		13,994		6.1	%		14,478
Secured mortgages		5.7	%		812,371		4.9	%		979,585
Secured mortgages of consolidated entities (3)		2.8	%		399,904		3.0	%		1,677,193
Totals		3.0	%	$	9,721,065		3.2	%	$	10,608,294

Aggregate lender commitments	$	3,476
Less:
Borrowings outstanding		-
Outstanding letters of credit		38
Current availability	$	3,438

	2017		2016
RSUs granted		88		53
Grant date fair value of RSUs granted	$	4,800	$	2,300
LTIP Units granted		203		114
Grant date fair value of LTIP Units granted	$	11,100	$	4,900

	Number of			Weighted Average		Number of
	LTIP Units			Grant-Date Fair Value		LTIP Units Vested
Balance at January 1, 2017		2,219		$	40.81		743
Granted		1,032
Vested POP LTIP Units		698
Conversion to common limited partnership units		(234	)
Balance at September 30, 2017		3,715		$	45.54		1,868

2017
	Foreign Currency Contracts
Local Currency	Net Investment Hedges						Forwards and Options
	CAD			GBP			CAD			EUR			GBP			JPY
Notional amounts at January 1	$	133		£	31		$	50		€	174		£	48		¥	15,500
New contracts		133			100			24			56			107			4,000
Matured, expired or settled contracts		(133	)		(131	)		(22	)		(72	)		(48	)		(5,400	)
Notional amounts at September 30	$	133		£	-		$	52		€	158		£	107		¥	14,100

	Foreign Currency Contracts
U.S. Dollar	Net Investment Hedges						Forwards and Options
Notional amounts at January 1	$	100		$	46		$	38		$	197		$	78		$	144
New contracts		99			127			19			63			137			38
Matured, expired or settled contracts		(100	)		(173	)		(17	)		(81	)		(75	)		(49	)
Notional amounts at September 30	$	99		$	-		$	40		$	179		$	140		$	133

Weighted average forward rate at September 30		1.34			-			1.30			1.13			1.31			106.11
Active contracts at September 30		2			-			18			23			19			29

Rent rate and occupancy growth (1)	$	69
Development activity (2)		35
Contributions and dispositions (3)		(96	)
Acquisitions		17
Other		4
Total change in Real Estate Operations segment – NOI	$	29

	2017			2016
U.S.:
Asset management and other fees	$	31		$	25
Leasing commissions, acquisition, development and other transaction fees		9			4
Promote (1)		120			-
Strategic capital expenses (2)		(57	)		(27	)
Subtotal U.S.		103			2
Other Americas:
Asset management and other fees		16			16
Leasing commissions, acquisition, development and other transaction fees		2			1
Promote (1)		4			-
Strategic capital expenses		(7	)		(8	)
Subtotal Other Americas		15			9
Europe:
Asset management and other fees		66			63
Leasing commissions, acquisition, development and other transaction fees		10			10
Promote (1)		3			88
Strategic capital expenses		(30	)		(36	)
Subtotal Europe		49			125
Asia:
Asset management and other fees		28			28
Leasing commissions, acquisition, development and other transaction fees		17			12
Strategic capital expenses		(26	)		(27	)
Subtotal Asia		19			13
Strategic Capital segment – NOI	$	186		$	149

Acquisition of properties	$	14
Development properties placed into service		24
Disposition and contribution of properties		(69	)
Other		(18	)
Total change in depreciation and amortization expenses	$	(49	)

	September 30, 2017							December 31, 2016							September 30, 2016
	Number of Properties		Square Feet		Percentage Occupied			Number of Properties		Square Feet		Percentage Occupied			Number of Properties		Square Feet		Percentage Occupied
Consolidated		1,577		300		96.7	%		1,777		332		97.0	%		1,796		333		96.4	%
Unconsolidated		1,554		331		95.9	%		1,359		290		97.2	%		1,335		282		96.8	%
Totals		3,131		631		96.3	%		3,136		622		97.1	%		3,131		615		96.6	%

	2017 (1)			2016
Number of new development projects during the period		57			58
Square feet		21			16
TEI	$	1,841		$	1,219
Our proportionate share of TEI (2)	$	1,641		$	1,092
Percentage of build-to-suits based on TEI		47.8	%		42.8	%

	2017			2016
Number of development projects stabilized during the period		68			74
Square feet		21			24
TEI	$	1,718		$	1,767
Our proportionate share of TEI (1)	$	1,513		$	1,481
Weighted average expected yield on TEI (2)		6.7	%		7.0	%
Estimated value at completion	$	2,200		$	2,241
Our proportionate share of estimated value at completion (1)	$	1,944		$	1,891
Estimated weighted average margin		28.0	%		26.8	%

	September 30, 2017			December 31, 2016
Debt outstanding	$	9,721		$	10,608
Weighted average interest rate		3.0	%		3.2	%
Weighted average maturity in months	66			60

	2017		2016
Unconsolidated co-investment ventures:
Other Americas
Prologis Brazil Logistics Partners Fund I and related joint ventures	$	27	$	32
Europe
Europe Logistics Venture 1		19		-
Prologis European Logistics Partners Sàrl		10		124
Prologis United Kingdom Logistics Venture		31		-
Asia
Nippon Prologis REIT, Inc.		46		34
Remaining unconsolidated co-investment ventures		13		12
Total unconsolidated co-investment ventures		146		202

Other ventures		98		27
Total investments in and advances to unconsolidated entities	$	244	$	229

	2017			2016
FFO
Reconciliation of net earnings to FFO measures:
Net earnings attributable to common stockholders	$	1,346		$	763

Add (deduct) NAREIT defined adjustments:
Real estate related depreciation and amortization		633			682
Gains on dispositions of investments in real estate properties and revaluation of equity investments upon acquisition of a controlling interest, net		(723	)		(302	)
Reconciling items related to noncontrolling interests		(41	)		(87	)
Our share of reconciling items included in earnings from unconsolidated entities		108			117
NAREIT defined FFO		1,323			1,173

Add (deduct) our modified adjustments:
Unrealized foreign currency and derivative losses, net		56			22
Deferred income tax benefit, net		-			(2	)
Our share of reconciling items included in earnings from unconsolidated entities		(3	)		1
FFO, as modified by Prologis		1,376			1,194

Adjustments to arrive at Core FFO:
Gains on dispositions of development properties and land, net		(236	)		(160	)
Current income tax expense on dispositions		12			15
Acquisition expenses		-			2
Losses (gains) on early extinguishment of debt, net		31			(2	)
Reconciling items related to noncontrolling interests		-			4
Our share of reconciling items included in earnings from unconsolidated entities		(5	)		3
Core FFO	$	1,178		$	1,056