Prologis 8K Results of Operations and Financial Condition | PLD 26 Oct 11

Prologis (PLD) 8-KResults of Operations and Financial Condition

Exhibit 99.1


Overview
Press Release			3
Highlights
Company Profile			6
Financial Statements
Balance Sheets			8
Consolidated Statements of Operations			9
Consolidated Statements of Funds From Operations (FFO)			10
Reconciliations of Net Earnings (Loss) to FFO			11
EBITDA Reconciliation			12
Operations Overview
Operating Portfolio – Owned and Managed			13
Operating Portfolio – Prologis Share			14
Operating Metrics			15
Customer Information			16
Capital Deployment
Building Acquisitions			17
Building Dispositions			18
Development Starts			19
Development Portfolio			20
Land Portfolio – Owned and Managed			21
Private Capital
Detail Fund Information			23
Fund Operating and Balance Sheet Information			24
Capitalization
Debt and Equity Summary			25
Debt Covenants and Other Metrics			26
Assets Under Management			27
Net Asset Value
Components			28
Notes and Definitions			30

Prologis, Inc. Announces Third Quarter 2011 Earnings Results

- Strategic Business Priorities Ahead of Plan -
- Solid Leasing Across All Regions -
- Company Increases Core FFO and Disposition Guidance -

SAN FRANCISCO, October 26, 2011 — Prologis, Inc. (NYSE: PLD), the leading global owner, operator and developer of industrial real estate, today reported results for the third quarter of 2011.

On June 3, 2011, AMB Property Corporation and ProLogis completed their merger and became Prologis, Inc. Under the structure of the merger, AMB Property Corporation was the legal acquirer and ProLogis was the accounting acquirer. Financial results for the third quarter 2011 represent the performance of the combined company whereas financial results for the third quarter of 2010 reflect stand-alone legacy ProLogis and therefore are not directly comparable.

Core funds from operations (“Core FFO”) per fully diluted share was $0.44 for the third quarter of 2011. Funds from operations (“FFO”) as defined by Prologis per fully diluted share was $0.45 for the third quarter of 2011. The differential between Core FFO and FFO in the third quarter of 2011 primarily relates to net gains on dispositions of real estate of $0.03 per share offset by merger costs of $0.02 per share.

Net income per share for the third quarter of 2011 was $0.12.

“Our third-quarter results are a testament to the quality of execution by our dedicated teams around the world,” said Hamid R. Moghadam, chairman and co-chief executive officer. “Given the weaker global economic backdrop, our success this quarter affirms we are achieving the synergies we anticipated from the merger of AMB and ProLogis. We’ll continue to advance our strategic priorities as we manage the business for the long term.”

Operating Portfolio Metrics

Prologis’ operating portfolio was 91.0 percent occupied at the end of the third quarter, up 30 basis points from 90.7 percent occupied at June 30, 2011. Same-store net operating income (NOI) decreased by (0.7) percent in the third quarter, compared to an increase of 3.1 percent in the second quarter of 2011. Rental rates on leases signed in the same-store pool decreased (8.6) percent for the third quarter.

During the third quarter, the company leased a total of 33.4 million square feet (3.1 million square meters) in its operating and development portfolios. The company also achieved a 76.3 percent tenant retention rate for the quarter, signing 20.1 million square feet (1.9 million square meters) of renewals.

“On a combined basis, we had the strongest third quarter of leasing since 2008, and we believe that this momentum will carry through the fourth quarter. Leasing volume was strong across all of our regions including Europe, where occupancy increased 70 basis

points from the second quarter,” said Walter C. Rakowich, co-chief executive officer. “Our ability to meet demand and retain customers is unparalleled given our global platform.”

Private Capital Activity

Year-to-date through September 30, 2011, Prologis raised or received commitments for $1.8 billion of new third-party equity in its private capital business. This activity includes the approval on a $500 million allocation from the Oregon Public Employees Retirement Fund. Under this arrangement Oregon intends to invest in several of the company’s funds around the world. The initial €75 million (approximately $100 million) was invested in the Prologis Targeted Europe Logistics Fund subsequent to quarter end.

As previously announced, the company sold its 20 percent interest in its ProLogis Korea Fund during the third quarter. The fund consisted of 12 properties, totaling 1.7 million square feet (161,048 square meters).

Contributions & Dispositions

Prologis is ahead of its 2011 plan and has completed approximately $844 million in building and land dispositions and contributions. The company’s share of the proceeds was $745 million.

During the third quarter, the company completed $391 million in building and land dispositions and contributions. Prologis’ share of the proceeds was $292 million. Disposition and contribution activity during the quarter included:

	•		$334 million of building and land dispositions of which $236 million was Prologis’ share; and

	•		$57 million in contributions from the company’s balance sheet to its ProLogis European Property Fund II and the Prologis China Logistics Venture.

Subsequent to quarter end, the company contributed an additional $453 million of its balance sheet assets to its co-investment ventures in the United States and Europe and received 100 percent of the proceeds.

Capital Deployment Activity

New development starts in the third quarter totaled approximately 1.4 million square feet (130,000 square meters) in 10 projects across Asia, Europe, and the Americas; the estimated total expected investment was $134 million, of which $98 million was

Prologis’ share. At quarter end, Prologis’ global development portfolio totaled approximately 12.7 million square feet (1.2 million square meters), with an estimated total investment of $1.4 billion, of which $1.2 billion was Prologis’ share.

Deepening the company’s presence in its global markets, Prologis acquired 9 industrial properties and 10.5 acres of land from third parties at a total cost of $152 million, $101 million of which was Prologis’ share.

Capital Markets Activity

During the third quarter the company completed more than $975 million of capital markets activities, of which $550 million was Prologis’ share, including debt repayments, repurchases, extensions and new financings.

“Our capital markets activities in the third quarter focused principally on addressing near-term debt maturities,” said William E. Sullivan, Prologis’ chief financial officer. “With our increased contribution and disposition activity planned for the fourth-quarter, we will make significant progress on reducing our debt by year end and expect to exceed our 2011 delevering plan.”

Guidance for the Remainder of 2011

“Our solid performance in the third quarter and our expectations for the fourth quarter operating environment give us the basis for raising our Core FFO guidance for the second half of 2011,” said Sullivan.

The company is increasing its Core FFO guidance for the second half of 2011 to $0.83 to $0.85 per share, up from its previous guidance of $0.78 to $0.82 per share, resulting in a fourth-quarter Core FFO guidance of $0.39 to $0.41 per share.

Prologis also expects to recognize net income (loss) of $(0.05) to $0.05 per share for the second half of 2011. In reconciling from net earnings to Core FFO, Prologis makes certain adjustments including the removal of gains (losses) recognized from property dispositions, real estate depreciation and amortization expense, deferred taxes, transaction and merger costs.

“In light of the robust sales environment for industrial real estate, we are also substantially increasing our disposition guidance,” said Sullivan. “We will continue to be selective in our capital deployment decisions, acquiring properties and commencing development where demand is sound and where understanding economics justify the risk.”

Based upon the company’s view of current market conditions, Prologis is increasing disposition and contribution guidance for the second half of 2011 to $1.8 to $2.0 billion, of which 90 percent represents Prologis’ share. The previous disposition and contribution guidance range was $1.2 billion to $1.5 billion.

The company is lowering its second half 2011 development starts guidance range to $325 million to $375 million, of which 65 percent represents Prologis’ share. Prologis is

also reducing its second half 2011 property acquisition range to $225 million to $275 million, of which 30 percent represents Prologis’ share.

Webcast and Conference Call Information

The company will host a webcast /conference call to discuss quarterly results, current market conditions and future outlook today, October 26, 2011, at 12:00 p.m. Eastern Time. Interested parties are encouraged to access the live webcast by clicking the microphone icon located near the top of the opening page at: http://ir.prologis.com. Interested parties also can participate via conference call by dialing (877) 256-7020 domestically or (706) 643-7823 internationally with reservation code 14936609.

About Prologis

Prologis, Inc. is the leading owner, operator and developer of industrial real estate, focused on global and regional markets across the Americas, Europe and Asia. As of September 30, 2011, Prologis owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects expected to total approximately 600 million square feet (55.7 million square meters) in 22 countries. The company leases modern distribution facilities to more than 4,500 customers, including manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises.

Some of the information included in this press release contains forward-looking statements which are made pursuant to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from those in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future events. The events or circumstances reflected in forward-looking statements might not occur. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We caution you not to place undue reliance on forward-looking statements, which reflect our analysis only and speak only as of the date of this report or the dates indicated in the statements. We assume no obligation to update or supplement forward-looking statements. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: changes in general economic conditions in California, the U.S. or globally (including financial market fluctuations), global trade or in the real estate sector (including risks relating to decreasing real estate valuations and impairment charges); risks associated with using debt to fund the company’s business activities, including refinancing and interest rate risks; the company’s failure to obtain, renew, or extend necessary financing or access the debt or equity markets; the company’s failure to maintain its current credit agency ratings or comply with its debt covenants; risks related to the merger transaction with ProLogis, including the risk that the merger may not achieve its intended results; risks related to the company’s obligations in the event of certain defaults under co-investment venture and other debt; defaults on or non-renewal of leases by customers, lease renewals at lower than expected rent or failure to lease properties at all or on favorable rents and terms; difficulties in identifying properties, portfolios of properties, or interests in real-estate related entities or platforms to acquire and in effecting acquisitions on advantageous terms and the failure of acquisitions to perform as the company expects; unknown liabilities acquired in connection with the acquired properties, portfolios of properties, or interests in real-estate related entities; the company’s failure to successfully integrate acquired properties and operations; risks and uncertainties affecting property development, redevelopment and value-added

conversion (including construction delays, cost overruns, the company’s inability to obtain necessary permits and financing, the company’s inability to lease properties at all or at favorable rents and terms, and public opposition to these activities); the company’s failure to set up additional funds, attract additional investment in existing funds or to contribute properties to its co-investment ventures due to such factors as its inability to acquire, develop, or lease properties that meet the investment criteria of such ventures, or the co-investment ventures’ inability to access debt and equity capital to pay for property contributions or their allocation of available capital to cover other capital requirements; risks and uncertainties relating to the disposition of properties to third parties and the company’s ability to effect such transactions on advantageous terms and to timely reinvest proceeds from any such dispositions; risks of doing business internationally and global expansion, including unfamiliarity with the new markets and currency risks; risks of changing personnel and roles; losses in excess of the company’s insurance coverage; changes in local, state and federal regulatory requirements, including changes in real estate and zoning laws; increases in real property tax rates; risks associated with the company’s tax structuring; increases in interest rates

and operating costs or greater than expected capital expenditures; environmental uncertainties and risks related to natural disasters; and our failure to qualify and maintain our status as a real estate investment trust. Our success also depends upon economic trends generally, various market conditions and fluctuations and those other risk factors discussed under the heading “Risk Factors” and elsewhere in our most recent annual report on Form 10-K for the year ended December 31, 2010 and our other public reports.

Prologis Contacts


Tracy A. Ward		Sara M. Klein
SVP, IR & Corporate Communications		Manager, Media and Public Relations
Direct +1 415 733 9565		Direct +1 415 680 4032
Email tward@prologis.com		Email sklein@prologis.com

Prologis, Inc. is the leading owner, operator and developer of industrial real estate, focused on global and regional markets across the Americas, Europe and Asia. As of September 30 2011, Prologis owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects totaling approximately 600 million square feet (55.7 million square meters) in 22 countries. The company leases modern distribution facilities to more than 4,500 customers, including manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises.


	AMERICAS		EUROPE		ASIA		TOTAL

Operating Portfolio (msf)		396		146		24		566
Development Portfolio (msf)		4		2		7		13
Other (msf) (A)		18		—		2		20

Total (msf)		418		148		33		599

Development portfolio TEI (millions)		$309		$201		$867		$1,377
Land (acres)		7,285		3,757		148		11,190
Land gross book value (millions)		$1,059		$776		$212		$2,047


(A)		Generally represents properties managed by Prologis on behalf of other third parties (10 msf), properties in which Prologis has an ownership interest but doesn’t manage (9 msf) and non-industrial properties owned by Prologis (1 msf).


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2011 (A)		2010 (A)		2011 (A)		2010 (A)
Revenues	$	501,393	$	228,614	$	1,075,683	$	665,191
Net earnings (loss) attributable to common shares	$	54,906	$	(15,052)	$	(143,181)	$	(129,331)
FFO, as defined by Prologis	$	207,200	$	104,050	$	277,541	$	179,011
Core FFO	$	205,903	$	69,871	$	389,972	$	182,542
Core EBITDA, as adjusted	$	412,192	$	225,368	$	1,172,958	$	648,235



Per common share — diluted:
Net earnings (loss) attributable to common shares	$	0.12	$	(0.07)	$	(0.42)	$	(0.61)
FFO, as defined by Prologis	$	0.45	$	0.48	$	0.81	$	0.84
Core FFO	$	0.44	$	0.33	$	1.13	$	0.85


(A)		We completed the merger with AMB (the “Merger”) on June 3, 2011. The financial results presented throughout this supplemental include Prologis for the full period and AMB results from the date of the Merger going forward. Results for the nine months ended September 30, 2011 include approximately four months of the impact from both the Merger and PEPR acquisition. See the Notes and Definitions for more information.
(B)		Includes legacy AMB and Prologis for all periods.


	September 30, 2011			June 30, 2011			December 31, 2010 (A)

Assets:
Investments in real estate assets:
Operating portfolio	$	22,474,206		$	22,629,855		$	10,714,799
Development portfolio		676,019			632,196			365,362
Land		1,972,277			2,045,826			1,533,611
Other real estate investments		469,852			440,877			265,869

		25,592,354			25,748,754			12,879,641
Less accumulated depreciation		1,908,152			1,764,289			1,595,678

Net investments in properties		23,684,202			23,984,465			11,283,963
Investments in and advances to unconsolidated investees		2,900,646			3,012,144			2,024,661
Notes receivable backed by real estate		354,254			359,228			302,144
Assets held for sale		89,519			171,765			574,791

Net investments in real estate		27,028,621			27,527,602			14,185,559

Cash and cash equivalents		216,749			260,893			37,634
Restricted cash		77,798			68,390			27,081
Accounts receivable		216,423			197,475			58,979
Other assets		1,046,713			1,080,146			593,414

Total assets	$	28,586,304		$	29,134,506		$	14,902,667


Liabilities and Equity:
Liabilities:
Debt	$	12,147,277		$	12,119,952		$	6,506,029
Accounts payable, accrued expenses, and other liabilities		1,837,061			1,944,309			876,283

Total liabilities		13,984,338			14,064,261			7,382,312


Equity:
Stockholders’ equity:
Preferred stock		582,200			582,200			350,000
Common stock		4,592			4,589			2,545
Additional paid-in capital		16,365,581			16,384,229			9,671,560
Accumulated other comprehensive income (loss)		(102,546	)		225,364			(3,160	)
Distributions in excess of net earnings		(2,916,997	)		(2,842,842	)		(2,515,722	)

Total stockholders’ equity		13,932,830			14,353,540			7,505,223
Noncontrolling interests		609,259			654,912			15,132
Noncontrolling interests — limited partnership unitholders		59,877			61,793			—

Total equity		14,601,966			15,070,245			7,520,355

Total liabilities and equity	$	28,586,304		$	29,134,506		$	14,902,667


(A)		Represents legacy Prologis only.


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010 (A)			2011 (A)			2010 (A)
Revenues:
Rental income	$	462,539		$	194,018		$	960,779		$	568,816
Private capital revenue		34,578			29,812			97,389			87,881
Development management and other income		4,276			4,784			17,515			8,494

Total revenues		501,393			228,614			1,075,683			665,191


Expenses:
Rental expenses		126,994			56,531			270,760			166,207
Private capital expenses		17,080			9,829			39,228			30,079
General and administrative expenses		53,341			34,959			144,364			115,886
Merger, acquisition and other integration expenses		12,683			—			121,723			—
Depreciation, amortization and other expenses		200,529			91,558			417,269			253,524

Total expenses		410,627			192,877			993,344			565,696


Operating income		90,766			35,737			82,339			99,495

Other income (expense):
Earnings from unconsolidated property funds, net		27,855			7,455			48,422			13,305
Earnings from other unconsolidated investees, net		3,120			1,770			7,593			7,197
Interest income		4,960			1,681			14,063			2,178
Interest expense		(136,064	)		(120,233	)		(339,579	)		(349,132	)
Impairment of other assets		—			—			(103,823	)		—
Gains (losses) on acquisitions and dispositions of investments in real estate, net		8,396			35,922			114,650			58,688
Foreign currency and derivative gains (losses) and other income (expenses), net		52,208			11,838			36,921			6,281

Gain (loss) on early extinguishment of debt, net		(298	)		(1,791	)		(298	)		(48,449	)

Total other income (expense)		(39,823	)		(63,358	)		(222,051	)		(309,932	)


Earnings (loss) before income taxes		50,943			(27,621	)		(139,712	)		(210,437	)
Income tax expense (benefit) — current and deferred		(2,838	)		7,455			9,960			(24,592	)

Earnings (loss) from continuing operations		53,781			(35,076	)		(149,672	)		(185,845	)
Discontinued operations:
Income attributable to disposed properties and assets held for sale		677			18,557			10,204			59,102
Net gains on dispositions, net of related impairment charges and taxes		11,410			8,026			21,545			17,153

Total discontinued operations		12,087			26,583			31,749			76,255

Consolidated net earnings (loss)		65,868			(8,493	)		(117,923	)		(109,590	)
Net earnings attributable to noncontrolling interests		(553	)		(190	)		(838	)		(634	)

Net earnings (loss) attributable to controlling interests		65,315			(8,683	)		(118,761	)		(110,224	)
Less preferred stock dividends		10,409			6,369			24,420			19,107

Net earnings (loss) attributable to common shares	$	54,906		$	(15,052	)	$	(143,181	)	$	(129,331	)

Weighted average common shares outstanding — Diluted (B)		462,408			212,945			340,923			212,611

Net earnings (loss) per share attributable to common shares — Diluted	$	0.12		$	(0.07	)	$	(0.42	)	$	(0.61	)


(A)		The financial results include Prologis for the full period and AMB and PEPR results from approximately June 1, 2011.
(B)		See Calculation of Per Share Amounts in theNotes and Definitions.


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010 (A)			2011 (A)			2010 (A)
Revenues:
Rental income	$	466,954		$	236,252		$	979,957		$	697,419
Private capital revenue		34,578			29,812			97,389			87,881
Development management and other income		4,276			4,784			17,515			8,494

Total revenues		505,808			270,848			1,094,861			793,794


Expenses:
Rental expenses		129,136			69,326			276,951			202,607
Private capital expenses		17,080			9,829			39,228			30,079
General and administrative expenses		53,341			34,959			144,364			115,886
Merger, acquisition and other integration expenses		12,683			—			121,723			—
Depreciation and amortization of non-real estate assets and other expenses		10,026			12,157			31,022			29,041

Total operating expenses		222,266			126,271			613,288			377,613


Operating FFO		283,542			144,577			481,573			416,181

Other income (expense):
FFO from unconsolidated property funds		54,367			42,315			147,263			116,016
FFO from other unconsolidated investees		6,385			3,660			11,888			12,135
Interest income		4,960			1,681			14,063			2,178
Interest expense		(136,188	)		(120,233	)		(339,809	)		(349,132	)
Impairment of other assets		—			—			(103,823	)		—
Gains on acquisitions and dispositions of investments in real estate, net		11,018			40,899			120,338			62,001
Foreign currency exchange gains (losses) and other income (expenses), net		(1,479	)		5,000			(8,115	)		3,672
Gain (loss) on early extinguishment of debt, net		(298	)		(1,791	)		(298	)		(48,449	)
Current income tax (expense) benefit		4,611			(5,499	)		(9,121	)		(15,850	)

Total other income (expense)		(56,624	)		(33,968	)		(167,614	)		(217,429	)

Less preferred share dividends		10,409			6,369			24,420			19,107
Less FFO attributable to noncontrolling interests		9,309			190			11,998			634

FFO, as defined by Prologis		207,200			104,050			277,541			179,011
Impairment charges		—			2,929			106,482			3,296
Japan disaster expenses		(400	)		—			5,210			—
Merger and other integration expenses		12,683			—			121,723			—
Our share of gains on acquisitions and dispositions of investments in real estate, net		(13,878	)		(40,899	)		(123,198	)		(62,001	)
Loss (gain) on early extinguishment of debt, net		298			1,791			298			16,049
Income tax expense on dispositions		—			2,000			1,916			2,851
Adjustments made in 2010, not applicable to 2011		—			—			—			43,336

Total of adjustments		(1,297	)		(34,179	)		112,431			3,531


Core FFO	$	205,903		$	69,871		$	389,972		$	182,542

Weighted average common shares outstanding — Diluted (B)		474,287			214,407			355,540			214,109

Core FFO per share — Diluted	$	0.44		$	0.33		$	1.13		$	0.85


(A)		The financial results include Prologis for the full period and AMB and PEPR results from approximately June 1, 2011
(B)		See Calculation of Per Share Amounts in the Notes and Definitions.


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010 (A)			2011 (A)			2010 (A)
Reconciliation of net earnings (loss) to FFO

Net earnings (loss) attributable to common shares	$	54,906		$	(15,052	)	$	(143,181	)	$	(129,331	)
Add (deduct) NAREIT defined adjustments:
Real estate related depreciation and amortization		190,503			79,401			388,906			224,483
Adjustments related to dispositions		(7,316	)		7,833			(17,880	)		19,261
Reconciling items related to noncontrolling interests		(8,756	)		—			(11,160	)		—
Our share of reconciling items from unconsolidated investees		31,393			35,987			103,730			105,830

Subtotal-NAREIT defined FFO		260,730			108,169			320,415			220,243

Add (deduct) our defined adjustments:
Unrealized foreign currency and derivative gains, net		(53,688	)		(6,838	)		(45,036	)		(2,609	)
Deferred income tax expense (benefit)		1,773			1,956			2,755			(40,442	)
Our share of reconciling items from unconsolidated investees		(1,615	)		763			(593	)		1,819

FFO, as defined by Prologis		207,200			104,050			277,541			179,011

Adjustments to arrive at Core FFO		(1,297	)		(34,179	)		112,431			3,531

Core FFO	$	205,903		$	69,871		$	389,972		$	182,542


(A)		The financial results include Prologis for the full period and AMB and PEPR results from approximately June 1, 2011

Reconciliation of Consolidated Net Earnings (Loss) to Core EBITDA


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Consolidated net earnings (loss)	$	65,868		$	(8,493	)	$	(117,923	)	$	(109,590	)
Net gains on acquisitions and dispositions of investments in real estate		(19,806	)		(45,948	)		(140,770	)		(78,692	)
Depreciation and amortization		196,558			83,220			403,027			235,903
Interest expense		136,064			120,233			339,579			349,132
Impairment charges		—			2,929			106,482			3,296
Merger, acquisition and other integration expenses		12,683			—			121,723			—
Current and deferred income tax expense (benefit)		(2,838	)		9,455			11,876			(21,741	)
Pro forma adjustment (A)		—			—			263,994			—
Income on properties sold during the quarter included in discontinued operations		(677	)		(18,557	)		(10,204	)		(59,102	)
Other non-cash charges (gains)		(44,680	)		(1,717	)		(23,409	)		14,764
Other adjustments made to arrive at Core FFO		(102	)		1,791			5,508			59,385

Core EBITDA, prior to our share of unconsolidated investees		343,070			142,913			959,883			393,355

Our share of reconciling items from unconsolidated investees:
Depreciation and amortization		31,393			35,987			103,730			105,830
Interest expense		38,043			43,214			105,051			134,740
Current and deferred income tax expense (benefit)		1,301			2,491			4,661			6,507
Other non-cash charges (gains)		(1,615	)		763			(593	)		1,819
Realized losses (gains) on derivative activity		—			—			226			5,984

Core EBITDA	$	412,192		$	225,368		$	1,172,958		$	648,235


(A)		Adjustments for the effects of the Merger and PEPR acquisition to reflect NOI for the full period.


						Owned &			Total Portfolio			Total Portfolio			Total Portfolio
	Region	# of Bldgs		Square Feet			Managed NOI		Leased %			Occupied %			Gross Book Value		% of Total

Global Markets
U.S.
Atlanta	East		129		18,088			$10,964		83.8	%		83.6	%		$783,010		1.8	%
Baltimore/Washington	East		90		9,219			12,316		92.9	%		92.9	%		738,993		1.7	%
Central Valley	Northwest		23		8,140			5,580		84.6	%		81.4	%		438,237		1.0	%
Central & Eastern PA	East		32		15,317			14,974		93.6	%		92.0	%		955,265		2.2	%
Chicago	Central		214		37,245			28,704		91.3	%		90.8	%		2,208,553		5.1	%
Dallas/Ft. Worth	Central		172		24,992			15,337		91.8	%		90.6	%		1,198,944		2.8	%
Houston	Central		85		9,971			9,019		97.0	%		97.0	%		523,299		1.2	%
New Jersey/New York City	East		184		22,908			29,116		91.2	%		91.2	%		1,997,443		4.6	%
San Francisco Bay Area	Northwest		244		20,400			27,440		91.9	%		90.8	%		1,957,587		4.5	%
Seattle	Northwest		63		8,242			9,881		92.0	%		92.0	%		787,651		1.8	%
South Florida	East		92		10,522			12,704		92.2	%		92.2	%		1,031,458		2.4	%
Southern California	Southwest		344		64,664			72,352		97.2	%		96.9	%		5,366,651		12.4	%
On Tarmac	Various		32		2,649			7,550		91.7	%		91.7	%		316,554		0.7	%
Canada	East		18		6,235			8,127		91.3	%		91.3	%		599,999		1.4	%
Mexico	Latin America		178		28,997			27,520		89.6	%		89.5	%		1,807,523		4.2	%
Brazil	Latin America		2		624			708		100.0	%		100.0	%		132,652		0.3	%

Americas total			1,902		288,213			292,292		92.3	%		91.8	%		20,843,819		48.1	%
Belgium	Northern		9		2,016			2,924		95.4	%		95.4	%		173,186		0.4	%
France	Southern		141		34,770			48,739		94.0	%		93.7	%		2,941,835		6.8	%
Germany	Northern		92		19,191			26,866		96.3	%		95.8	%		1,588,969		3.7	%
Netherlands	Northern		49		9,986			12,692		78.4	%		76.5	%		992,723		2.3	%
Poland	CEE		107		22,808			21,689		87.0	%		84.4	%		1,550,682		3.6	%
Spain	Southern		23		6,470			8,119		71.5	%		71.4	%		601,454		1.4	%
UK	UK		86		21,224			39,303		93.7	%		93.7	%		2,351,140		5.4	%

Europe total			507		116,465			160,332		90.4	%		89.6	%		10,199,989		23.6	%
China	China		18		4,360			4,163		95.8	%		95.8	%		217,127		0.5	%
Japan	Japan		44		18,478			57,657		94.5	%		94.5	%		4,178,272		9.7	%
Singapore	Singapore		5		942			2,710		100.0	%		100.0	%		139,869		0.3	%

Asia total			67		23,780			64,530		95.0	%		95.0	%		4,535,268		10.5	%


Total global markets			2,476		428,458			517,154		91.9	%		91.4	%		35,579,076		82.2	%

Regional markets by NOI
Cincinnati- Americas	Central		30		6,898			4,929		93.9	%		93.9	%		290,061		0.7	%
Columbus- Americas	Central		39		10,309			5,878		96.8	%		95.7	%		421,704		1.0	%
Czech Republic- Europe	CEE		28		6,511			7,838		91.4	%		90.0	%		538,947		1.2	%
Denver- Americas	Northwest		34		5,492			4,725		90.0	%		89.3	%		326,812		0.8	%
Hungary- Europe	CEE		30		5,339			6,760		86.6	%		86.4	%		392,733		0.9	%
Indianapolis- Americas	Central		34		7,443			3,877		94.1	%		94.0	%		324,551		0.7	%
Italy- Europe	Southern		27		8,378			8,687		87.9	%		87.9	%		572,510		1.3	%
San Antonio- Americas	Central		61		6,358			4,778		94.1	%		94.0	%		300,874		0.7	%
Slovakia- Europe	CEE		15		4,164			5,582		100.0	%		98.4	%		307,629		0.7	%
Sweden- Europe	Northern		10		3,808			6,220		100.0	%		100.0	%		344,118		0.8	%
Remaining regional	5 Various		114		22,303			13,128		90.3	%		89.6	%		937,501		2.2	%

Regional markets total			422		87,003			72,402		92.4	%		91.7	%		4,757,440		11.0	%



Other markets	18 various		355		50,436			42,683		87.3	%		86.5	%		2,946,776		6.8	%



Total operating portfolio — owned and managed			3,253		565,897			$632,239		91.6	%		91.0	%		$43,283,292		100.0	%




Consolidated
Americas			1,522		207,885			$187,702		90.9	%		90.2	%		$13,549,674		31.3	%
Europe			344		80,682			101,679		87.8	%		86.8	%		6,289,861		14.5	%
Asia			29		13,907			38,665		93.5	%		93.5	%		2,634,671		6.1	%

Total operating portfolio — consolidated			1,895		302,474			328,046		90.1	%		89.4	%		22,474,206		51.9	%


Unconsolidated
Americas			1,042		188,292			182,849		92.6	%		92.1	%		12,778,634		29.5	%
Europe			278		65,258			95,479		94.4	%		93.9	%		6,129,855		14.2	%
Asia			38		9,873			25,865		97.1	%		97.1	%		1,900,597		4.4	%

Total operating portfolio — unconsolidated			1,358		263,423			304,193		93.2	%		92.7	%		20,809,086		48.1	%


Total
Americas			2,564		396,177			370,551		91.7	%		91.1	%		26,328,308		60.8	%
Europe			622		145,940			197,158		90.7	%		90.0	%		12,419,716		28.7	%
Asia			67		23,780			64,530		95.0	%		95.0	%		4,535,268		10.5	%

Total operating portfolio — owned and managed			3,253		565,897			$632,239		91.6	%		91.0	%		$43,283,292		100.0	%


	Region	Square Feet									Third Quarter NOI									Occupancy									Gross Book Value
				Prologis Share of		Prologis Share of							Prologis Share of		Prologis Share of																Prologis Share of		Prologis Share of
		Consolidated		Unconsolidated		Total		% of Total			Consolidated ($)		Unconsolidated ($)		Total ($)		% of Total			Consolidated			Unconsolidated			Total			Consolidated ($)		Unconsolidated ($)		Total ($)		% of Total
Global Markets
U.S.
Atlanta	East		10,030		2,715		12,745		3.0	%		5,498		1,867		7,365		2.0	%		81.8	%		86.8	%		82.9	%		409,300		123,288		532,588		2.0	%
Baltimore/Washington	East		5,399		1,084		6,483		2.0	%		6,570		1,613		8,183		2.0	%		89.2	%		98.4	%		90.7	%		400,636		95,797		496,433		2.0	%
Central Valley	Northwest		5,251		736		5,987		2.0	%		3,723		436		4,159		1.0	%		82.8	%		73.2	%		81.6	%		273,989		41,839		315,828		1.0	%
Central & Eastern PA	East		3,794		2,642		6,436		2.0	%		2,803		2,811		5,614		1.0	%		91.2	%		93.2	%		92.1	%		192,351		174,797		367,148		1.0	%
Chicago	Central		24,959		3,373		28,332		7.0	%		17,024		3,342		20,366		5.0	%		88.7	%		95.4	%		89.5	%		1,425,061		222,174		1,647,235		6.0	%
Dallas/Ft. Worth	Central		15,956		2,828		18,784		5.0	%		8,535		2,178		10,713		3.0	%		89.8	%		92.9	%		90.2	%		706,503		153,884		860,387		3.0	%
Houston	Central		4,665		1,631		6,296		2.0	%		3,604		1,667		5,271		1.0	%		96.4	%		97.6	%		96.7	%		169,564		108,893		278,457		1.0	%
New Jersey/New York City	East		13,441		2,872		16,313		4.0	%		15,608		4,020		19,628		5.0	%		89.9	%		92.0	%		90.2	%		1,060,992		281,985		1,342,977		5.0	%
San Francisco Bay Area	Northwest		18,298		636		18,934		5.0	%		23,914		1,076		24,990		6.0	%		91.5	%		84.5	%		91.3	%		1,718,067		73,210		1,791,277		6.0	%
Seattle	Northwest		3,777		1,375		5,152		1.0	%		4,069		1,798		5,867		1.0	%		90.9	%		93.2	%		91.5	%		339,872		138,054		477,926		2.0	%
South Florida	East		6,680		1,148		7,828		2.0	%		7,952		1,412		9,364		2.0	%		92.4	%		91.8	%		92.3	%		676,483		106,203		782,686		3.0	%
Southern California	Southwest		33,755		12,059		45,814		12.0	%		37,956		13,705		51,661		12.0	%		96.6	%		97.5	%		96.8	%		3,120,105		815,542		3,935,647		14.0	%
On Tarmac	Various		2,354		92		2,446		1.0	%		6,452		340		6,792		2.0	%		90.7	%		100.0	%		91.0	%		265,786		15,738		281,524		1.0	%
Canada	East		4,541		391		4,932		1.0	%		5,463		616		6,079		1.0	%		88.0	%		100.0	%		89.0	%		433,195		38,532		471,727		2.0	%
Mexico	Latin America		9,213		4,753		13,966		4.0	%		8,562		4,642		13,204		3.0	%		89.1	%		90.1	%		89.5	%		505,548		321,760		827,308		3.0	%
Brazil	Latin America		—		312		312		0.0	%		—		354		354		0.0	%		—			100.0	%		100.0	%		—		53,588		53,588		0.0	%

Americas total			162,113		38,647		200,760		53.0	%		157,733		41,877		199,610		48.0	%		90.8	%		93.7	%		91.3	%		11,697,452		2,765,284		14,462,736		51.0	%
Belgium	Northern		1,497		161		1,658		0.0	%		1,827		353		2,180		1.0	%		93.8	%		100.0	%		94.4	%		123,189		16,363		139,552		0.0	%
France	Southern		22,108		4,103		26,211		7.0	%		28,101		6,821		34,922		8.0	%		91.0	%		98.4	%		92.1	%		1,754,010		391,189		2,145,199		8.0	%
Germany	Northern		6,531		3,990		10,521		3.0	%		9,206		5,637		14,843		4.0	%		1.0	%		97.4	%		94.7	%		515,649		343,297		858,946		3.0	%
Netherlands	Northern		4,754		1,763		6,517		2.0	%		5,361		2,523		7,884		2.0	%		77.4	%		76.2	%		77.0	%		407,153		202,019		609,172		2.0	%
Poland	CEE		10,521		3,652		14,173		4.0	%		8,977		3,778		12,755		3.0	%		79.7	%		88.3	%		81.9	%		610,511		279,419		889,930		3.0	%
Spain	Southern		5,529		280		5,809		2.0	%		7,511		181		7,692		2.0	%		74.2	%		54.9	%		73.3	%		524,780		22,788		547,568		2.0	%
UK	UK		10,958		3,290		14,248		4.0	%		18,317		6,687		25,004		6.0	%		87.8	%		100.0	%		90.6	%		1,041,786		415,173		1,456,959		5.0	%

Europe total			61,898		17,239		79,137		21.0	%		79,300		25,980		105,280		25.0	%		86.2	%		93.4	%		87.8	%		4,977,078		1,670,248		6,647,326		23.0	%
China	China		1,750		392		2,142		1.0	%		1,167		450		1,617		0.0	%		93.6	%		97.3	%		94.3	%		53,309		24,573		77,882		0.0	%
Japan	Japan		11,215		1,452		12,667		3.0	%		34,788		4,574		39,362		9.0	%		92.9	%		97.0	%		93.4	%		2,441,493		347,356		2,788,849		10.0	%
Singapore	Singapore		942		—		942		0.0	%		2,710		—		2,710		1.0	%		100.0	%		—			100.0	%		139,869		—		139,869		0.0	%

Asia total			13,907		1,844		15,751		4.0	%		38,665		5,024		43,689		10.0	%		93.5	%		97.1	%		93.9	%		2,634,671		371,929		3,006,600		11.0	%


Total global markets			237,918		57,730		295,648		78.0	%		275,698		72,881		348,579		83.0	%		89.7	%		93.7	%		90.5	%		19,309,201		4,807,461		24,116,662		85.0	%

Regional markets by our share of NOI
Cincinnati- Americas	Central		2,513		1,167		3,680		1.0	%		1,230		963		2,193		1.0	%		86.0	%		98.2	%		89.9	%		84,495		54,913		139,408		0.0	%
Columbus- Americas	Central		5,143		1,579		6,722		2.0	%		2,103		1,140		3,243		1.0	%		91.5	%		100.0	%		93.5	%		202,745		66,785		269,530		1.0	%
Czech Republic- Europe	CEE		4,057		730		4,787		1.0	%		4,573		970		5,543		1.0	%		84.7	%		98.8	%		86.9	%		310,468		67,904		378,372		1.0	%
Denver- Americas	Northwest		3,563		587		4,150		1.0	%		3,176		450		3,626		1.0	%		92.5	%		86.5	%		91.6	%		205,876		29,182		235,058		1.0	%
Hungary- Europe	CEE		3,174		643		3,817		1.0	%		3,810		877		4,687		1.0	%		84.8	%		88.7	%		85.5	%		190,929		59,976		250,905		1.0	%
Indianapolis- Americas	Central		1,274		1,538		2,812		1.0	%		731		791		1,522		0.0	%		89.8	%		90.3	%		90.1	%		42,260		71,560		113,820		0.0	%
Italy- Europe	Southern		7,400		291		7,691		2.0	%		7,530		344		7,874		2.0	%		86.3	%		100.0	%		86.8	%		494,538		23,173		517,711		2.0	%
San Antonio- Americas	Central		3,056		957		4,013		1.0	%		1,601		947		2,548		1.0	%		88.6	%		99.2	%		91.1	%		117,565		54,172		171,737		1.0	%
Slovakia- Europe	CEE		594		1,061		1,655		0.0	%		834		1,411		2,245		1.0	%		100.0	%		98.1	%		98.8	%		48,149		77,117		125,266		0.0	%
Sweden- Europe	Northern		2,285		453		2,738		1.0	%		3,895		691		4,586		1.0	%		100.0	%		100.0	%		100.0	%		204,907		41,373		246,280		1.0	%
Remaining other regional	5 Various		11,826		3,456		15,282		4.0	%		6,198		2,249		8,447		2.0	%		86.3	%		93.4	%		87.9	%		456,481		157,554		614,035		2.0	%

Regional markets total			44,885		12,462		57,347		15.0	%		35,681		10,833		46,514		11.0	%		88.3	%		95.3	%		89.8	%		2,358,413		703,709		3,062,122		11.0	%

Other markets	18 various		19,671		7,412		27,083		7.0	%		16,667		6,327		22,994		5.0	%		88.4	%		86.6	%		87.9	%		806,592		504,355		1,310,947		5.0	%



Total operating portfolio- Prologis share			302,474		77,604		380,078		100.0	%		328,046		90,041		418,087		100.0	%		89.4	%		93.3	%		90.2	%		22,474,206		6,015,525		28,489,731		100.0	%


Leasing Activity	(B)		(A)		(A)		(A)
	Q4 2010		Q1 2011		Q2 2011		Q3 2011
Square feet of leases signed:
Properties under development		1,100		877		1,360		1,810
Operating properties:
New leases		12,285		14,773		11,841		11,545
Renewals		21,130		17,225		21,697		20,095

Total square feet of leases signed		34,515		32,875		34,898		33,450
Weighted average customer retention		87.4%		65.8%		76.7%		76.3%
Turnover costs (per square foot)		$1.02		$1.35		$1.37		$1.36

Capital Expenditures	(B)		(A)		(A)		(A)
	Q4 2010		Q1 2011		Q2 2011		Q3 2011
Property improvements		$20,262		$16,701		$24,880		$33,611
$ per square feet		$0.05		$0.03		$0.04		$0.06

Tenant improvements		22,771		19,787		24,741		23,934
Leasing commissions		14,161		19,741		21,682		19,136

Total capital expenditures		$57,194		$56,229		$71,303		$76,681
% of gross NOI (D)		12.6%		8.9%		11.3%		12.4%

Weighted average ownership percent		60.7%		65.2%		69.0%		76.5%
Prologis share		$34,689		$36,645		$49,215		$58,687


Same Store Information (C)
	Q1 2011		Q2 2011		Q3 2011
Square feet of population		554,504		552,370		547,380
Percentage change:
Rental income		2.0%		2.2%		(0.1%)
Rental expenses		2.3%		(0.3%)		1.5%
Net operating income		0.7%		3.1%		(0.7%)
Average occupancy		3.0%		2.5%		1.6%

Square feet of leasing activity		28,233		27,721		27,969
Percentage change in rental rates		(8.9%)		(6.1%)		(8.6%)


(A)		Includes legacy AMB and Prologis for the combined operating portfolio for the periods presented.
(B)		Includes only legacy Prologis.
(C)		Portfolio includes legacy AMB and Prologis for all periods. See the Notes and Definitions for further explanations.
(D)		Pre-merger information is based on pro forma NOI of the combined company for the respective period.


Top Customers
	% of Annual Base			Total Square
	Rent			Feet
1 DHL		2.4	%		11,040
2 CEVA Logistics		1.5	%		7,543
3 Kuehne & Nagel		1.2	%		6,411
4 Home Depot, Inc		1.1	%		5,685
5 SNCF Geodis		0.9	%		5,194
6 Amazon.Com, Inc.		0.9	%		3,948
7 FedEx Corporation		0.7	%		2,641
8 United States Government		0.7	%		1,473
9 Unilever		0.7	%		4,965
10 PepsiCo		0.6	%		3,806
Top 10 Customers		10.7	%		52,706

11 DB Schenker		0.6	%		2,376
12 Nippon Express		0.6	%		1,467
13 Tesco PLC		0.6	%		2,603
14 Sagawa Express		0.5	%		947
15 Panasonic Logistics Co Ltd.		0.5	%		1,305
16 Hitachi Ltd.		0.5	%		1,244
17 APL (Neptune Orient Lines)		0.5	%		4,271
18 Kraft Foods, Inc.		0.5	%		2,969
19 Panalpina, Inc.		0.5	%		2,265
20 Sears Holdings Corporation		0.4	%		3,423
21 UTi Worldwide		0.4	%		1,970
22 C&S Wholesale Grocers, Inc.		0.4	%		2,222
23 Caterpillar Logistics Services		0.4	%		1,137
24 Procter & Gamble		0.4	%		2,259
25 NYK Group		0.4	%		1,882
Top 25 Customers		17.9	%		85,046


Lease Expirations — Consolidated
Year	Annual Base		Percentage of			Occupied		Percentage
Year	Rent		Total			Square Feet		of Total
Month to month customers	$	27,971		1.9	%		7,070		2.6%
Remainder of 2011		28,872		1.9	%		5,394		2.0%
2012		230,265		15.5	%		43,802		16.2%
2013		240,160		16.1	%		42,178		15.6%
2014		221,712		14.9	%		42,373		15.7%
2015		201,925		13.6	%		36,608		13.5%
2016		160,138		10.8	%		29,675		11.0%
Thereafter		377,783		25.3	%		63,423		23.4%
Total	$	1,488,826		100	%		270,523		100%


Lease Expirations — Unconsolidated
Year	Annual Base		Percentage of			Occupied		Percentage
Year	Rent		Total			Square Feet		of Total
Month to month customers	$	11,840		0.9	%		3,528		1.4%
Remainder of 2011		29,247		2.2	%		5,958		2.4%
2012		209,072		15.5	%		41,010		16.8%
2013		210,043		15.6	%		40,629		16.6%
2014		180,414		13.4	%		31,967		13.1%
2015		163,665		12.1	%		30,555		12.5%
2016		144,435		10.7	%		26,477		10.9%
Thereafter		400,571		29.6	%		64,164		26.3%
Total	$	1,349,287		100	%		244,288		100%


Third Party Building Acquisitions (A) (B)
	Q3 2011						YTD 2011

					Prologis Share of						Prologis Share of
	Square Feet		Acquisition Costs		Acquisition Costs		Square Feet		Acquisition Costs		Acquisition Costs
Consolidated
Americas		785		$46,122		$46,122		948		$54,466		$54,466
Europe		—		—		—		—		—		—
Asia		—		—		—		—		—		—

Total consolidated		785		46,122		46,122		948		54,466		54,466

Unconsolidated
Prologis Targeted U.S. Logistics Fund		438		36,762		11,030		759		66,754		20,030
Prologis Targeted Europe Logistics Fund		204		23,681		8,762		234		28,996		10,729
Prologis European Properties Fund II		267		14,592		4,378		267		14,592		4,378

Total unconsolidated		909		75,035		24,170		1,260		110,342		35,137



Total third party acquisitions		1,694		$121,157		$70,292		2,208		$164,808		$89,603


Weighted average stabilized cap rate						7.2%						7.8%


(A)		Includes legacy AMB and Prologis for all periods.

(B)		Does not include acquisition of units in PEPR, the acquisition of SGP Property Fund or the acquisition of other joint venture interests.


			Q3 2011						YTD 2011

					Prologis Share of						Prologis Share of
	Square Feet		Total Proceeds		Proceeds		Square Feet		Total Proceeds		Proceeds
Third Party Building Dispositions


Consolidated

Americas		1,618		$63,952		$63,952		4,957		$196,363		$196,363
Europe		—		—		—		—		—		—
Asia		1,686		52,438		52,438		1,865		95,389		95,389

Total consolidated		3,304		116,390		116,390		6,822		291,752		291,752


Unconsolidated

Prologis North American Properties Fund I		2,794		118,000		48,380		2,794		118,000		48,380
Prologis Targeted U.S. Logistics Fund		733		40,800		12,240		961		72,600		21,780
Prologis North American Industrial Fund II		—		—		—		400		5,798		2,145

Total unconsolidated		3,527		158,800		60,620		4,155		196,398		72,305



Total third party dispositions		6,831		275,190		177,010		10,977		488,150		364,057


Building Contributions to Funds


ProLogis European Properties Fund II		676		49,511		49,511		1,038		75,500		75,500
Prologis China Logistics Venture 1		602		7,906		6,720		5,072		165,832		140,957

Total		1,278		57,417		56,231		6,110		241,332		216,457


Total Building Dispositions and Contributions



Grand total		8,109		$332,607		$233,241		17,087		$729,482		$580,514


Weighted average stabilized cap rate						7.3%						7.4%


(A) Amounts include legacy AMB and Prologis industrial building dispositions, but do not include dispositions of non-industrial buildings or joint venture investments of $20.4million and $501.1million in the third quarter and year to date, respectively.


			Q3 2011						YTD 2011
	Consolidated		Unconsolidated		Total		Consolidated		Unconsolidated		Total

Americas
Square Feet		423		272		695		1,030		896		1,926
Total expected investment		$33,632		$29,936		$63,568		$83,284		$88,695		$171,979
Cost per square foot		$80		$110		$91		$81		$99		$89
Leased % at start		0.0%		0.0%		0.0%		33.6%		2.4%		19.1%

Europe
Square Feet		136		181		317		2,077		465		2,542
Total expected investment		$16,333		$14,971		$31,304		$183,736		$31,243		$214,979
Cost per square foot		$120		$83		$99		$88		$67		$85
Leased % at start		100.0%		74.0%		85.2%		66.3%		90.1%		70.7%

Asia
Square Feet		233		168		401		3,901		168		4,069
Total expected investment		$33,314		$6,086		$39,400		$457,408		$6,086		$463,494
Cost per square foot		$143		$36		$98		$117		$36		$114
Leased % at start		100.0%		100.0%		100.0%		11.5%		100.0%		15.1%

Total
Square Feet		792		621		1,413		7,008		1,529		8,537
Total expected investment		$83,279		$50,993		$134,272		$724,428		$126,024		$850,452
PLD share of total expected investment		$83,279		$15,107		$98,386		$724,428		$48,964		$773,392
Cost per square foot		$105		$82		$95		$103		$82		$100
Leased % at start		46.6%		48.6%		47.5%		31.0%		39.8%		32.6%
Weighted average targeted stabilized yield (%)						7.53%						8.05%
Pro forma NOI						$10,097						$68,461
Weighted average stabilized cap rate						6.55%						6.80%
Estimated value creation						$20,086						$156,333
Prologis share of value creation						$12,567						$135,905


(A)		Amounts include legacy AMB and Prologis.


	2011 Expected				2012 Expected								Pre-Stabilized
	Completion				Completion				Total Under Development				Developments				Total Development Portfolio
																			Prologis share
	Sq Ft		TEI $		Sq Ft		TEI $		Sq Ft		TEI $		Sq Ft		TEI $		TEI $		of TEI $		% of Total			Leased %
Consolidated
U.S.
Central		—		—		150		7,549		150		7,549		—		—		7,549		7,549		0.6	%		—
East		244		27,388		424		53,199		668		80,587		—		—		80,587		80,587		6.7	%		47.3	%
Northwest		—		—		—		—		—		—		232		25,671		25,671		25,671		2.1	%		—
Southwest		—		—		—		—		—		—		271		34,766		34,766		34,766		2.9	%		—
U.S. Total		244		27,388		574		60,748		818		88,136		503		60,437		148,573		148,573		12.3	%		23.9	%
Latin America		109		5,236		347		21,870		456		27,106		221		13,051		40,157		40,157		3.3	%		49.8	%

Americas total		353		32,624		921		82,618		1,274		115,242		724		73,488		188,730		188,730		15.6	%		32.7	%

Europe
Northern Europe		320		31,112		136		16,333		456		47,445		111		10,518		57,963		57,963		4.8	%		43.6	%
Southern Europe		187		13,749		319		23,063		506		36,812		—		—		36,812		36,812		3.1	%		43.9	%
Central Europe		206		16,037		—		—		206		16,037		—		—		16,037		16,037		1.3	%		100.0	%
United Kingdom		—		—		458		41,496		458		41,496		—		—		41,496		41,496		3.4	%		100.0	%

Europe total		713		60,898		913		80,892		1,626		141,790		111		10,518		152,308		152,308		12.6	%		65.3	%

Asia
Japan		—		—		2,378		416,327		2,378		416,327		1,557		277,031		693,358		693,358		57.5	%		32.5	%
China		—		—		—		—		—		—		—		—		—		—		—			—

Asia total		—		—		2,378		416,327		2,378		416,327		1,557		277,031		693,358		693,358		57.5	%		32.5	%

Total global markets		1,066		93,522		4,212		579,837		5,278		673,359		2,392		361,037		1,034,396		1,034,396		85.7	%		40.0	%

Regional and other markets
Americas		—		—		—		—		—		—		303		10,610		10,610		10,610		0.9	%		—
Europe		314		18,519		—		—		314		18,519		—		—		18,519		18,519		1.5	%		100.0	%
Asia		—		—		543		74,581		543		74,581		—		—		74,581		74,581		6.2	%		100.0	%

Total regional and other markets		314		18,519		543		74,581		857		93,100		303		10,610		103,710		103,710		8.6	%		73.9	%



Total consolidated development portfolio		1,380		112,041		4,755		654,418		6,135		766,459		2,695		371,647		1,138,106		1,138,106		94.3	%		44.4	%

Unconsolidated
Prologis Targeted U.S. Logistics Fund		—		—		272		29,936		272		29,936		311		21,795		51,731		15,522		1.3	%		3.7	%
Prologis SGP Mexico		—		—		22		770		22		770		—		—		770		169		0.0	%		100.0	%
Prologis Brazil Logistics Partners Fund I		603		57,142		—		—		603		57,142		—		—		57,142		28,571		2.4	%		—
Prologis China Logistics Venture I		683		24,290		1,490		74,761		2,173		99,051		—		—		99,051		14,858		1.2	%		30.7	%
Prologis European Properties Fund II		285		15,508		134		10,770		419		26,278		—		—		26,278		7,810		0.7	%		100.0	%
Prologis Targeted Europe Logistics Fund		—		—		47		4,201		47		4,201		—		—		4,201		1,554		0.1	%		—

Total unconsolidated development portfolio		1,571		96,940		1,965		120,438		3,536		217,378		311		21,795		239,173		68,484		5.7	%		29.4	%



Total development portfolio — owned & managed		2,951		208,981		6,720		774,856		9,671		983,837		3,006		393,442		1,377,279		1,206,590		100.0	%		39.9	%

Total development portfolio — Prologis share		1,867		148,865		5,122		679,539		6,989		828,404		2,788		378,187		1,206,590
Prologis share of cost to complete				65,491				393,660				459,151				27,929		487,080
Percent build to suit (based on Prologis TEI)				30.57%				31.86%				31.63%				2.78%
Weighted average stabilized yield				9.52%				7.44%				7.88%						7.53%
Pro forma NOI																		103,584
Weighted average stabilized cap rate																		6.51%
Estimated value creation																		217,232
Prologis share of value creation																		189,875


Land by Market	Acres										Current Book Value
									Prologis								Prologis		% of
	Region		Consolidated		Unconsolidated		Total		Share		Consolidated		Unconsolidated		Total		Share		Total
Global markets
U.S.
Atlanta	East			732		—		732		732	$	27,964	$	—	$	27,964	$	27,964		1.4	%
Baltimore/Washington	East			106		—		106		106		14,846		—		14,846		14,846		0.7	%
Central Valley	Northwest			160		—		160		160		12,688		—		12,688		12,688		0.6	%
Central & Eastern PA	East			339		—		339		339		28,733		—		28,733		28,733		1.4	%
Chicago	Central			638		—		638		638		59,744		—		59,744		59,744		3.0	%
Dallas/Ft. Worth	Central			471		—		471		471		23,065		—		23,065		23,065		1.2	%
Houston	Central			69		—		69		69		7,874		—		7,874		7,874		0.4	%
New Jersey/New York City	East			306		—		306		306		123,631		—		123,631		123,631		6.2	%
Seattle	Northwest			15		—		15		15		2,110		—		2,110		2,110		0.1	%
South Florida	East			404		—		404		404		140,622		—		140,622		140,622		7.0	%
Southern California	Southwest			807		—		807		807		130,443		—		130,443		130,443		6.5	%
Canada	Canada			230		—		230		230		89,203		—		89,203		89,203		4.5	%
Mexico	Mexico			1,032		—		1,032		1,032		207,421		—		207,421		207,421		10.4	%
Brazil	Brazil			—		302		302		151		—		64,542		64,542		32,271		1.6	%

Americas total				5,309		302		5,611		5,460		868,344		64,542		932,886		900,615		45.0	%
Belgium	Northern			30		—		30		30		10,593		—		10,593		10,593		0.5	%
France	Southern			396		—		396		396		70,262		—		70,262		70,262		3.5	%
Germany	Northern			217		—		217		217		55,972		—		55,972		55,972		2.8	%
Netherlands	Northern			63		—		63		63		59,023		—		59,023		59,023		2.9	%
Poland		C.E.E.		904		—		904		904		123,416		—		123,416		123,416		6.2	%
Spain	Southern			100		—		100		100		18,908		—		18,908		18,908		0.9	%
UK	UK			1,081		—		1,081		1,081		268,580		—		268,580		268,580		13.4	%

Europe total				2,791		—		2,791		2,791		606,754		—		606,754		606,754		30.2	%
China	China			42		18		60		45		11,212		10,128		21,340		12,731		0.6	%
Japan	Japan			88		—		88		88		190,660		—		190,660		190,660		9.5	%

Asia total				130		18		148		133		201,872		10,128		212,000		203,391		10.1	%


Total global markets				8,230		320		8,550		8,384		1,676,970		74,670		1,751,640		1,710,760		85.3	%

Top regional markets by investment
Central Florida	East			150		—		150		150		26,382		—		26,382		26,382		1.3	%
Cincinnati	Central			75		—		75		75		4,915		—		4,915		4,915		0.2	%
Columbus	Central			199		—		199		199		6,694		—		6,694		6,694		0.3	%
Czech Republic	Central			308		—		308		308		46,576		—		46,576		46,576		2.3	%
Denver	Northwest			66		—		66		66		8,143		—		8,143		8,143		0.4	%
Hungary	Central			338		—		338		338		47,968		—		47,968		47,968		2.4	%
Italy	Southern			94		—		94		94		28,464		—		28,464		28,464		1.4	%
Memphis	Central			159		—		159		159		6,448		—		6,448		6,448		0.3	%
Savannah	East			229		—		229		229		13,082		—		13,082		13,082		0.7	%
Slovakia	Central			108		—		108		108		19,123		—		19,123		19,123		1.0	%
Remaining regional markets	2 various			141		—		141		141		4,895		—		4,895		4,895		0.3	%

Total regional markets				1,867		—		1,867		1,867		212,690		—		212,690		212,690		10.6	%



Total other markets	11 various			773		—		773		773		82,617		—		82,617		82,617		4.1	%



Total land portfolio — owned and managed				10,870		320		11,190		11,024	$	1,972,277	$	74,670		$2,046,947		$2,006,067		100.0	%


					Investment at
Land Portfolio Summary	Acres		% of Total		September 30, 2011		% of Total


Consolidated land portfolio
Americas		6,983		62.4%		$994,683		48.6%
Europe		3,757		33.6%		775,722		37.9%
Asia		130		1.1%		201,872		9.9%

Total consolidated land portfolio		10,870		97.1%		1,972,277		96.4%


Unconsolidated land portfolio
Americas		302		2.7%		64,542		3.1%
Asia		18		0.2%		10,128		0.5%

Total unconsolidated land portfolio		320		2.9%		74,670		3.6%


Land portfolio — owned and managed
Americas		7,285		65.1%		1,059,225		51.7%
Europe		3,757		33.6%		775,722		37.9%
Asia		148		1.3%		212,000		10.4%

Total land portfolio — owned and managed		11,190		100.0%		$2,046,947		100.0%


Consolidated - Land Rollforward	Americas		Europe		Asia		Total


As of June 30, 2011		$1,006,184		$820,999		$218,643		$2,045,826
Acquisitions		—		—		31,279		31,279
Dispositions		(557)		(3,439)		(47,888)		(51,884)
Development starts		(7,639)		(6,082)		(6,713)		(20,434)
Infrastructure costs and reclasses		3,846		8,246		210		12,302
Effect of changes in foreign exchange rates and other		(7,151)		(44,002)		6,341		(44,812)

As of September 30, 2011		$994,683		$775,722		$201,872		$1,972,277

Fund Investment Information

Ownership

Property Funds/Co-Investment Ventures (A)

Type

Investment Type

Geographic Focus

Percentage

Date Established

Term

Prologis Institutional Alliance Fund II

Core

Consolidated

June 2001

December 2014 (estimated)

Prologis AMS

Core

Consolidated

June 2004

December 2012, extendable 4 years

Prologis Mexico Fondo Logistico (B)

Core/Development

Consolidated

Mexico

July 2010

July 2020

Prologis European Properties

Core

Consolidated

Europe

September 1999

Open end

Prologis California

Core

Unconsolidated

August 1999

Perpetual

Prologis North American Properties Fund I

Core

Unconsolidated

June 2000

January 2013

Prologis North American Properties Fund XI

Core

Unconsolidated

February 2003

December 2023

Prologis Targeted U.S. Logistics Fund (B)

Core

Unconsolidated

October 2004

Open end

Prologis North American Industrial Fund (B)

Core

Unconsolidated

March 2006

Open end

Prologis DFS Fund I

Development

Unconsolidated

October 2006

Upon final sale

Prologis North American Industrial Fund III

Core

Unconsolidated

July 2007

July 2015

Prologis North American Industrial Fund II

Core

Unconsolidated

August 2007

August 2017

Prologis SGP Mexico (B)

Core

Unconsolidated

Mexico

December 2004

December 2016; extendable 5 years

Prologis Mexico Industrial Fund

Core

Unconsolidated

Mexico

August 2007

August 2017; extendable 5 years

Prologis Brazil Logistics Partners Fund I (B)(C)

Development

Unconsolidated

Brazil

December 2010

December 2017; extendable 2 years

Prologis Targeted Europe Logistics Fund (B)

Core

Unconsolidated

Europe

June 2007

Open end

Prologis European Properties Fund II (B)

Core

Unconsolidated

Europe

August 2007

Open end

Europe Logistics Venture 1 (B)

Core

Unconsolidated

Europe

February 2011

Perpetual

Prologis Japan Fund 1

Core

Unconsolidated

Japan

June 2005

June 2013; extendable 2 years

Prologis China Logistics Venture 1 (B)

Core/Development

Unconsolidated

China

March 2011

March 2018


Information by Unconsolidated Property Fund/Co-investment Venture:
									Prologis’ Share
			Third Quarter		Gross Book				Third Quarter		Annualized				Total Other Tangible			Prologis Investment In
(in thousands)	Square Feet		NOI		Value		Debt		NOI		Pro forma NOI		Debt		Assets (Liabilities)			and Advances To
Prologis California		14,179	$	16,534	$	706,571	$	310,000	$	8,267	$	33,068	$	155,000	$	1,390		$	84,736
Prologis North American Properties Fund I		6,239		5,187		265,902		109,147		2,142		8,568		45,078		432			33,722
Prologis North American Properties Fund XI		3,616		2,334		185,310		1,263		467		1,868		253		677			29,784
Prologis North American Industrial Fund		49,909		45,208		2,989,713		1,244,165		10,955		43,820		286,904		7,770			224,262
Prologis North American Industrial Fund II		35,618		29,122		2,171,025		1,302,442		10,775		43,100		481,643		(5,246	)		338,878
Prologis North American Industrial Fund III		24,693		20,031		1,762,810		1,014,652		4,006		16,024		202,930		1,943			29,446
Prologis Targeted U.S. Logistics Fund		37,284		48,876		3,541,046		1,497,467		14,664		58,656		449,315		27,845			665,250
Prologis Mexico Industrial Fund		9,494		8,220		583,275		214,149		1,644		6,576		42,830		1,267			52,721
Prologis SGP Mexico		6,352		6,502		405,425		221,915		1,404		5,616		47,934		(8,370	)		37,941
Prologis Brazil Logistics Partners Fund I		624		708		132,652		—		354		1,416		—		7,661			103,671
Operating Joint Venture		284		127		34,905		—		64		256		—		—			210

Americas Sub-total		188,292		182,849		12,778,634		5,915,200		54,742		218,968		1,711,887		35,369			1,600,621


Prologis European Properties Fund II		53,042		72,559		4,653,676		1,506,936		21,565		86,260		447,861		(38,946	)		431,517
Prologis Targeted Europe Logistics Fund		11,201		21,152		1,395,155		670,393		7,826		31,304		247,509		(36,285	)		237,419
Operating Joint Venture		1,015		1,768		81,024		—		884		3,536		—		—			43,512

Europe Sub-total		65,258		95,479		6,129,855		2,177,329		30,275		121,100		695,370		(75,231	)		712,448


Prologis Japan Fund 1		7,263		22,869		1,736,779		974,179		4,574		18,296		194,836		20,428			199,646
Prologis China Logistics Venture 1		2,610		2,996		163,818		—		450		1,800		—		1,057			45,052

Asia Sub-total		9,873		25,865		1,900,597		974,179		5,024		20,096		194,836		21,485			244,698

Grand Total		263,423	$	304,193	$	20,809,086	$	9,066,708	$	90,041	$	360,164	$	2,602,093	$	(18,377	)	$	2,557,767


(A)		Legal name changes have not been made for all entities at this time.
(B)		These funds are or will be actively investing in new properties through acquisition and/or development activities, whereas the remaining funds do not expect to be actively investing in new properties.
(C)		Our effective ownership percentage is 25%, as our investment is included in a consolidated entity of which we own 50%.


(dollars in thousands)

	Americas			Europe			Asia			Total

FFO and Net Earnings (Loss) of the Unconsolidated Property Funds, Aggregated (A) (B)	For the Three Months Ended September 30, 2011
Rental income	$	256,523		$	123,188		$	38,199		$	417,910
Rental expenses		(62,103	)		(27,620	)		(12,816	)		(102,539	)

Net operating income from properties		194,420			95,568			25,383			315,371
Other income (expense) net, including G&A		(7,742	)		(863	)		(4,502	)		(13,107	)
Interest expense		(96,038	)		(30,240	)		(6,065	)		(132,343	)
Current income tax expense		(1,881	)		(1,830	)		(566	)		(4,277	)

FFO of the property funds		88,759			62,635			14,250			165,644
Real estate related depreciation and amortization		(101,477	)		(38,591	)		(17,568	)		(157,636	)
Gains on acquisitions/dispositions, net		31,038			6,397			—			37,435
Deferred tax benefit (expense) and other income (expense), net		9,029			(4,118	)		(224	)		4,687

Net earnings (loss) of the property funds	$	27,349		$	26,323		$	(3,542	)	$	50,130

Prologis’ Share of FFO and Net Earnings (Loss) of the Unconsolidated Property Funds, Aggregated (A)	For the Three Months Ended September 30, 2011

Prologis’ share of the property funds’ FFO	$	29,470		$	19,243		$	3,509		$	52,222
Interest and preferred dividend income		2,089			—			56			2,145
Fees paid to Prologis		19,291			8,612			4,808			32,711

FFO recognized by Prologis	$	50,850		$	27,855		$	8,373		$	87,078

Prologis’ share of the property funds’ net earnings	$	16,842		$	8,706		$	162		$	25,710
Interest and preferred dividend income		2,089			—			56			2,145
Fees paid to Prologis		19,291			8,612			4,808			32,711

Net earnings recognized by Prologis	$	38,222		$	17,318		$	5,026		$	60,566

Condensed Balance Sheet of the Unconsolidated Property Funds, Aggregated (A)(B)	As of September 30, 2011
Operating industrial properties, before depreciation	$	12,743,729		$	6,048,831		$	1,900,597		$	20,693,157
Accumulated depreciation		(1,181,055	)		(295,783	)		(19,817	)		(1,496,655	)
Properties under development and land		144,564			10,807			47,287			202,658
Other assets		223,043			231,907			384,300			839,250

Total assets	$	11,930,281		$	5,995,762		$	2,312,367		$	20,238,410


Third party debt	$	5,915,200		$	2,177,329		$	974,179		$	9,066,708
Other liabilities		443,548			460,267			137,697			1,041,512

Total liabilities	$	6,358,748		$	2,637,596		$	1,111,876		$	10,108,220

Weighted average ownership		28.70	%		31.32	%		19.45	%		28.46	%


(A)		Includes the unconsolidated property funds listed on the previous page.

(B)		Represents the entire entity, not our proportionate share.


	Prologis

	Unsecured												Secured						Consolidated			Total			Unconsolidated						Prologis
	Senior			Convertible			Credit			Other			Mortgage						Investees			Consolidated			Investees			Total			Share of
Maturity	Debt			Debt			Facilities			Debt			Debt			Total			Debt			Debt			Debt			Debt			Total Debt
2011		$—			$—			$—			$—			$49			$49			$40			$89			$131			$220			$98
2012		76			458			—			163			456			1,153			382			1,535			1,183			2,718			1,705
2013		376			528			—			1			140			1,045			620			1,665			1,618			3,283			1,968
2014		373			—			163			1			295			832			1,073			1,905			1,570			3,475			2,375
2015		286			460			1,189			207			179			2,321			18			2,339			1,064			3,403			2,661
2016		641			—			—			1			261			903			41			944			1,032			1,976			1,212
2017		700			—			—			1			80			781			—			781			740			1,521			975
2018		900			—			—			1			148			1,049			1			1,050			650			1,700			1,212
2019		647			—			—			1			251			899			1			900			169			1,069			974
2020		691			—			—			1			6			698			1			699			402			1,101			808
Thereafter		—			—			—			11			149			160			2			162			472			634			303

Subtotal		4,690			1,446			1,352			388			2,014			9,890			2,179			12,069			9,031			21,100			14,291
Unamortized net (discounts) premiums		89			(95	)		2			8			22			26			52			78			36			114			78

Subtotal		4,779			1,351			1,354			396			2,036			9,916			2,231			12,147			9,067			21,214			14,369
Third party share of debt		—			—			—			—			—			—			(380	)		(380)			(6,465	)		(6,845	)		—

Prologis share of debt		$4,779			$1,351			$1,354			$396			$2,036			$9,916			$1,851			$11,767			$2,602			$14,369			$14,369

Prologis share of debt by local currency

Dollars		$4,647			$1,351			$298			$19			$1,255			$7,570			$95			$7,665			$1,714						$9,379
Euro		—			—			677			212			—			889			1,350			2,239			566						2,805
GBP		—			—			12			—			—			12			406			418			117						535
Yen		132			—			367			165			759			1,423			—			1,423			193						1,616
Other		—			—			—			—			22			22			—			22			12						34

Prologis share of debt		$4,779			$1,351			$1,354			$396			$2,036			$9,916			$1,851			$11,767			$2,602						$14,369

Weighted average interest rate (A)		6.3	%		4.9	%		2.1	%		2.4	%		4.6	%		5.0	%		4.9	%		5.0	%		5.0	%					5.0	%
Weighted average remaining maturity in years		5.8			1.8			3.5			3.4			4.6			4.6			2.2			4.1			3.9						4.1

Market Equity


Security	Shares		Price		Value
Common Stock		458.3		$24.25		$11,120
Partnership Units		3.4		$24.25		81

Total		461.7				$11,201

Preferred Stock


	Dividend
Series	Rate			Value
Series L		6.50	%		$49
Series M		6.75	%		58
Series O		7.00	%		75
Series P		6.85	%		50
Series Q		8.54	%		100
Series R		6.75	%		125
Series S		6.75	%		125

		7.08	%		$582

Liquidity


Aggregate lender commitments			$2,208
Less:
Borrowings outstanding			1,352
Outstanding letters of credit			88

Current availability			$768


Unrestricted cash			217

Total liquidity			$985


Covenants as of September 30, 2011(A)
	Legacy AMB Indenture				New Prologis Indenture
	Covenant		Actual		Covenant		Actual
Outstanding indebtedness to adjusted total assets		<60%		42.0%		<60%		39.4%
Fixed charge coverage ratio		>1.5x		2.50x		>1.5x		2.67x
Maximum secured debt to adjusted total assets		<40%		12.4%		<40%		11.0%
Unencumbered assets ratio to unsecured debt		>150%		248.8%		>150%		262.1%

	Global Line
	Covenant		Actual
Maximum consolidated leverage to total asset value		<60%		41.1%
Fixed charge coverage ratio		>1.5x		2.18x
Unencumbered debt service coverage ratio		>1.5x		2.46x
Maximum secured debt to total asset value		<35%		12.2%
Minimum net worth	>$10.0 billion		>$15.6 billion

Debt Metrics (B) (C)
	Third Quarter
		2011		2010
Debt as % of gross real estate assets		45.7%		52.1%
Secured debt as % of gross real estate assets		18.4%		16.6%
Unencumbered gross real estate assets to unsecured debt		221.9%		184.9%
Fixed charge coverage ratio		2.04x		1.40x
Debt/Core EBITDA		8.89x		12.02x

Encumbrances as of September 30, 2011
	Unencumbered		Encumbered		Total
Consolidated:
Operating portfolio		$14,791,968		$7,682,238		$22,474,206
Development portfolio		640,077		35,942		676,019
Land		1,937,577		34,700		1,972,277
Other real estate investments		386,564		83,288		469,852
Notes receivable backed by real estate		—		354,254		354,254
Assets held for sale		74,464		15,055		89,519

Total consolidated		17,830,650		8,205,477		26,036,127
Unconsolidated operating portfolio — Prologis’ share		1,499,626		4,515,899		6,015,525
Unconsolidated development portfolio and land — Prologis’ share		60,939		5,874		66,813

Gross real estate assets		$19,391,215		$12,727,250		$32,118,465


Secured and Unsecured Debt as of September 30, 2011
	Secured Mortgage Dept		Unsecured Dept		Total
Prologis debt		$2,013,481		$7,876,060		$9,889,541
Consolidated investees debt		1,356,783		822,596		2,179,379
Our share of unconsolidated investees debt		2,553,454		39,847		2,593,301

Total debt		5,923,718		8,738,503		14,662,221
Premium (discount) — consolidated		37,282		41,174		78,456
Our share of premium (discount) — unconsolidated		8,792		—		8,792

Total debt, net of premium (discount)		$5,969,792		$8,779,677		$14,749,469


(A)		These calculations are made in accordance with the respective debt agreements and may be different than other covenants or metrics presented.
(B)		All metrics include both consolidated and Prologis share of unconsolidated investees.
(C)		See Notes and Definitions for calculation of amounts.

Real Estate Operations


(dollars in thousands, except for percentages and per square foot)							Third Quarter			Third Quarter Pro
	Square Feet		Gross Book Value		GBV per Sq. Ft.		NOI			Forma NOI		Annualized NOI		Percent Occupied
CONSOLIDATED OPERATING PORTFOLIO
Properties generating net operating income
Americas		193,926	$	12,802,061	$	66	$	191,516		$	191,516	$	766,064		94.2	%
Europe		72,922		5,714,390		78		105,692			105,692		422,768		94.4	%
Asia		13,907		2,634,671		189		38,665			38,665		154,660		93.5	%
Pro forma adjustment for mid-quarter acquisitions/development completions											171		684

Sub-total		280,755		21,151,122		75		335,873			336,044		1,344,176		94.2	%

Properties generating net operating loss
Americas		13,959		747,613		54		(3,814	)						34.4	%
Europe		7,760		575,471		74		(4,013	)						15.4	%

Sub-total		21,719		1,323,084		61		(7,827	)						27.6	%

Total operating portfolio		302,474	$	22,474,206	$	74	$	328,046		$	336,044	$	1,344,176		89.4	%

UNCONSOLIDATED OPERATING PORTFOLIO (Prologis share)
Prologis interest in unconsolidated operating portfolio
Americas		55,344	$	3,698,356	$	67	$	54,742		$	54,742	$	218,968		92.9	%
Europe		20,416		1,945,240		95		30,275			30,275		121,100		93.9	%
Asia		1,844		371,929		202		5,024			5,024		20,096		97.1	%
Pro forma adjustment for mid-quarter acquisitions/development completions											114		456
Adjustment for North American Industrial Fund II (A)											18,347		73,388

Prologis share of unconsolidated operating portfolio		77,604	$	6,015,525	$	78	$	90,041		$	108,502	$	434,008		93.3	%

Totals		380,078	$	28,489,731	$	75	$	418,087		$	444,546	$	1,778,184		90.2	%

Development


									Annualized Pro
	Square Feet		Investment Balance		TEI		TEI per Sq. Ft.		Forma NOI		Percent Occupied
CONSOLIDATED
Prestabilized
Americas		1,027	$	70,075	$	84,098	$	82	$	6,095		13.9	%
Europe		111		7,166		10,518		95		839		0	%
Asia		1,557		265,684		277,031		178		17,844		68.4	%

												44.8	%

Properties under development
Americas		1,274		50,357		115,242		90		9,360
Europe		1,940		86,534		160,309		83		13,778
Asia		2,921		196,203		490,908		168		34,301

Total consolidated		8,830		676,019		1,138,106		129		82,217

UNCONSOLIDATED (Prologis share)
Development portfolio
Americas		481		33,023		44,262		92		4,285
Europe		142		3,212		9,364		66		862
Asia		326		5,574		14,858		46		1,289

Total unconsolidated		949		41,809		68,484		72		6,436



Total development portfolio		9,779	$	717,828	$	1,206,590	$	123	$	88,653

Development Platform (see development pages)


(A)		An adjustment is made to reflect 100% of the NOI for this fund to account for our preferred interest.

Balance Sheet and Other Items


(in thousands)	As of September
	30, 2011
CONSOLIDATED
Other assets
Cash and cash equivalents	$	216,749
Restricted cash		77,798
Deposits, prepaid assets and other tangible assets		480,570
Other real estate investments		469,852
Accounts receivable		216,423
Notes receivable backed by real estate		354,254
Prologis receivable from unconsolidated property funds		55,371
Investments in and advances to other unconsolidated investees		342,879
Assets held for sale, net of liabilities		87,126

Total other assets	$	2,301,022


Other liabilities
Accounts payable and other current liabilities		633,044
Deferred income taxes		604,302
Value added tax and other tax liabilities		79,904
Tenant security deposits		160,998
Other liabilites		356,420
Noncontrolling interests		669,136

Total liabilities and noncontrolling interests	$	2,503,804


UNCONSOLIDATED

Prologis share of net assets (liabilities)	$	(18,377	)

Land


	Investment
	Balance
Original land basis	$	3,049,349

Current book value of land	$	1,972,277
Prologis share of book value of land in unconsolidated investees		33,790

Total	$	2,006,067

Private Capital / Development Management


	Third Quarter			Annualized
Private capital
Private capital revenue	$	34,578		$	138,312
Private capital expenses		(17,080	)		(68,320	)

Profit margin	$	17,498		$	69,992

Development management income	$	4,276

Debt and Preferred Stock


	As of September
	30, 2011
Consolidated debt	$	12,068,520
Prologis share of unconsolidated debt		2,593,301

		14,661,821
Adjustment for North American Industrial Fund II (A)		820,799

Subtotal debt		15,482,620
Preferred stock		582,200

Total debt and preferred stock	$	16,064,820


(A)		An adjustment is made to reflect 100% of the debt for this fund to account for our preferred interest.

Please refer to our annual and quarterly financial statements filed with the Securities and Exchange Commission on Forms 10-K and 10-Q and other public reports for further information about us and our business. Certain amounts from previous periods presented in the Supplemental Information have been reclassified to conform to the 2011 presentation.

Our direct owned segment represents the direct, long-term ownership of industrial properties. Our investment strategy in this segment focuses primarily on the ownership and leasing of industrial properties in global and regional markets. Our intent is to hold and use these properties; however, depending on market and other conditions, we may contribute or sell these properties to property funds/co-investment ventures or sell to third parties. When we contribute or sell properties we have developed, we recognize FFO to the extent the proceeds received exceed our original investment (i.e. prior to depreciation) and present the results as Net Gains on Dispositions. In addition, we have industrial properties that are currently under development and land available for development that are part of this segment as well. We may develop the land or sell to third parties, depending on market conditions, customer demand and other factors. The private capital segment represents primarily the management of unconsolidated property funds and joint ventures and the properties they own.

On June 3, 2011, AMB Property Corporation (“AMB”) and ProLogis combined through a merger of equals (the “Merger”). As a result of the Merger, each outstanding ProLogis common share was converted into 0.4464 shares of AMB common stock. At the time of the Merger, AMB changed its name to Prologis, Inc. After consideration of all applicable factors pursuant to the business combination accounting rules, the Merger resulted in a reverse acquisition in which AMB was considered the “legal acquirer” and ProLogis was considered the “accounting acquirer”. As such, the historical results of ProLogis are included for the full period and AMB results are included from the date of the Merger going forward.

During the second quarter of 2011, we increased our ownership of ProLogis European Properties (“PEPR”), through open market purchases and a mandatory tender offer. On May 25, 2011, we settled on our mandatory tender offer. Pursuant to the tender offer and open-market purchases made during the tender period, we acquired an additional 96.5 million ordinary units and 2.7 million convertible preferred units of PEPR for an aggregate purchase price of approximately €615.5 million. We funded the aggregate purchases through borrowings under our existing credit facilities and a new €500 million bridge facility, which was subsequently repaid with proceeds received from our June equity offering.

After completion of the tender offer, we began consolidating PEPR and recognized a gain of €59.6 million ($85.9 million). Following the tender offer, and including open market purchases and our participation in new equity offerings through September 30, 2011, we owned approximately 93.7% of the voting ordinary units of PEPR and 94.9% of the convertible preferred units as of September 30, 2011.

We have preliminarily allocated the aggregate purchase price related to the Merger of $5.9 billion and PEPR of €1.1 billion ($1.6 billion) as set forth below. The allocations are based on our preliminary valuations, estimates and assumptions and are subject to change.


(amounts in thousands)	Merger			PEPR			Total
Investments in real estate properties	$	8,133,798		$	4,497,598		$	12,631,396
Investments in and advances to unconsolidated investees.		1,588,222			—			1,588,222
Cash, accounts receivable and other assets		741,542			137,644			879,186
Debt		(3,646,719	)		(2,240,764	)		(5,887,483	)
Accounts payable, accrued expenses and other liabilities		(418,090	)		(633,889	)		(1,051,979	)
Noncontrolling interests		(542,304	)		(133,651	)		(675,955	)

Total purchase price	$	5,856,449		$	1,626,938		$	7,483,387

Acquisition costrepresents economic cost and not necessarily what is capitalized. It includes the initial purchase price; the effects of marking assumed debt to market; if applicable, all due diligence

and closing costs, lease intangibles; and estimated acquisition capital expenditures including leasing costs to achieve stabilization.

Assets Held For Sale and Discontinued Operations.As of September 30, 2011, we had 2 land parcels and 5 operating properties that met the criteria of held for sale. The amounts included inAssets Held for Saleinclude real estate investment balances and the related assets and liabilities for each property.

During the nine months ended September 30, 2011, we disposed of 54 non-development properties aggregating 5.8 million square feet to third parties, including 31 properties aggregating 1.3 million square feet that were included inAssets Held for Saleat December 31, 2010. During all of 2010, we disposed of land subject to ground leases and 205 properties aggregating 25.4 million square feet to third parties, two of which were development properties.

The operations of the properties held for sale and properties that are disposed of to third parties during a period, including the aggregate net gains or losses recognized upon their disposition, are presented as discontinued operations in our Consolidated Statements of Operations for all periods presented. The income attributable to these properties was as follows (in thousands):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Rental income	$	4,415		$	42,234		$	19,178		$	128,603
Rental expenses		(2,142	)		(12,795	)		(6,191	)		(36,400	)
Depreciation and amortization		(1,472	)		(10,882	)		(2,553	)		(33,101	)
Interest expense		(124	)		—			(230	)		—

Income attributable to disposed properties and assets held for sale	$	677		$	18,557		$	10,204		$	59,102

For purposes of our Consolidated Statements of FFO, we do not segregate discontinued operations. In addition, we include the gains or losses from disposition of land parcels and development properties in the calculation of FFO, including those classified as discontinued operations.

Assets Under Management (“AUM”)represents the estimated value of the real estate we own or manage through our consolidated entities and unconsolidated investees. We calculate AUM by adding the noncontrolling interests’s share of the estimated fair value of the real estate investment to our share of total market capitalization.

Calculation of Per Share Amountsare as follows(in thousands, except per share amounts):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Net earnings (loss)

Net earnings (loss)	$	54,906		$	(15,052	)	$	(143,181	)	$	(129,331	)
Noncontrolling interest attributable to convertible limited partnership units		45			—			—			—

Adjusted net earnings (loss) — Diluted	$	54,951		$	(15,052	)	$	(143,181	)	$	(129,331	)

Weighted average common shares outstanding — Basic (a)		458,256			212,945			340,923			212,611
Incremental weighted average effect of conversion of limited partnership units		3,362			—			—			—
Incremental weighted average effect of stock awards		790			—			—			—

Weighted average common shares outstanding — Diluted (a)		462,408			212,945			340,923			212,611


Net earnings (loss) per share — Basic	$	0.12		$	(0.07	)	$	(0.42	)	$	(0.61	)

Net earnings (loss) per share — Diluted	$	0.12		$	(0.07	)	$	(0.42	)	$	(0.61	)


FFO, as defined by Prologis

FFO, as defined by Prologis	$	207,200		$	104,050		$	277,541		$	179,011
Noncontrolling interest attributable to convertible limited partnership units		45			157			181			—
Interest expense on convertible debt assumed converted		4,114			4,216			—			—

FFO — Diluted, as defined by Prologis	$	211,359		$	108,423		$	277,722		$	179,011


Weighted average common shares outstanding — Basic (a)		458,256			212,945			340,923			212,611
Incremental weighted average effect of conversion of limited partnership units		3,362			339			1,668			—
Incremental weighted average effect of stock awards		790			1,462			1,070			1,498
Incremental weighted average effect of conversion of certain convertible debt		11,879			11,879			—			—

Weighted average common shares outstanding — Diluted (a)		474,287			226,625			343,661			214,109


FFO per share — Diluted, as defined by Prologis	$	0.45		$	0.48		$	0.81		$	0.84

			��
Core FFO

Core FFO	$	205,903		$	69,871		$	389,972		$	182,542
Noncontrolling interest attributable to convertible limited partnership units		45			—			181			—
Interest expense on convertible debt assumed converted		4,114			—			12,659			—

Core FFO — Diluted	$	210,062		$	69,871		$	402,812		$	182,542


Weighted average common shares outstanding — Basic (a)		458,256			212,945			340,923			212,611
Incremental weighted average effect of conversion of limited partnership units		3,362			—			1,668			—
Incremental weighted average effect of stock awards		790			1,462			1,070			1,498
Incremental weighted average effect of conversion of certain convertible debt		11,879			—			11,879			—

Weighted average common shares outstanding — Diluted (a)		474,287			214,407			355,540			214,109


Core FFO per share — Diluted	$	0.44		$	0.33		$	1.13		$	0.85


(a)		The historical Prologis shares outstanding have been adjusted by the Merger exchange ratio of 0.4464. Amounts in 2011 include the assumed issuance of 254.8 million shares as of the Merger date.

Core EBITDA.We use Core EBITDA to measure both our operating performance and liquidity. We calculate Core EBITDA beginning with consolidated net earnings/loss and removing the affect of interest, income taxes, depreciation and amortization, impairment charges, gains or losses from the acquisition or disposition of investments in real estate, gains or losses on early extinguishment of debt and derivative contracts (including cash charges), similar adjustments we make to our Core FFO (see definition below), and other non-cash charges or gains (such as stock based compensation amortization and unrealized gains or losses on foreign currency and derivative activity), including our share of these items from unconsolidated investees.

We consider Core EBITDA to provide investors relevant and useful information because it permits investors to view income from operations on an unleveraged basis before the effects of income tax, non-cash depreciation and amortization expense and other items (including stock-based compensation amortization and certain unrealized gains and losses), gains or losses from the acquisition or disposition of investments in real estate, items that affect comparability, and other significant non-cash items. In 2011, we adjusted Core EBITDA to include a pro forma adjustment to reflect a full period of NOI on the operating properties we acquired through the Merger and PEPR acquisition and to exclude Merger, Acquisition and Other Integration Expenses and costs associated with the hurricane and tsunami that occurred in first quarter 2011 in Japan. By excluding interest expense EBITDA allows investors to measure our operating performance independent of our capital structure and indebtedness and, therefore, allows for a more meaningful comparison of our operating performance to that of other companies, both in the real estate industry and in other industries. Gains and losses on the early extinguishment of debt and derivatives contracts generally included the costs of repurchasing debt securities. Although difficult to predict, these items may be recurring given the uncertainty of the current economic climate and its adverse effects on the real estate and financial markets. While not infrequent or unusual in nature, these items result from market fluctuations that can have inconsistent effects on our results of operations. The economics underlying these items reflect market and financing conditions in the short-term but can obscure our performance and the value of our long-term investment decisions and strategies.

As a liquidity measure, we believe that Core EBITDA helps investors to analyze our ability to meet interest payment obligations and to make quarterly preferred share dividends. We believe that investors should consider Core EBITDA in conjunction with net income (the primary measure of our performance) and the other required Generally Accepted Accounting Principles (“GAAP”) measures of our performance and liquidity, to improve their understanding of our operating results and liquidity, and to make more meaningful comparisons of our performance against other companies. By using Core EBITDA an investor is assessing the earnings generated by our operations, but not taking into account the eliminated expenses or gains incurred in connection with such operations. As a result, Core EBITDA has limitations as an analytical tool and should be used in conjunction with our required GAAP presentations. Core EBITDA does not reflect our historical cash expenditures or future cash requirements for working capital, capital expenditures distribution requirements or contractual commitments. Core EBITDA also does not reflect the cash required to make interest and principal payments on our outstanding debt.

While EBITDA is a relevant and widely used measure of operating performance and liquidity, it does not represent net income or cash flow from operations as defined by GAAP and it should not be considered as an alternative to those indicators in evaluating operating performance or liquidity. Further, our computation of Core EBITDA may not be comparable to EBITDA reported by other companies. We compensate for the limitations of Core EBITDA by providing investors with financial statements prepared according to GAAP, along with this detailed discussion of Core EBITDA and a reconciliation of Core EBITDA to consolidated net earnings (loss), a GAAP measurement.

Committed Equity/Investmentis our estimate of the gross real estate, which could be acquired through the use of the equity commitments from our property fund or co-investment venture partners, plus our funding obligations and estimated debt capitalization.

Debt Metrics.See below for the detail calculations for the three months ended for the respective period (dollars in thousands):


	Three Months Ended
	Sept. 30			Sept. 30

	2011			2010
Debt as a % of gross real estate assets:

Total debt	$	14,662,221		$	10,836,097

Gross real estate assets	$	32,118,465		$	20,809,845


Debt as a % of gross real estate assets:		45.7	%		52.1	%


Secured debt as a % of gross real estate assets:
Secured debt	$	5,923,718		$	3,459,142

Gross real estate assets	$	32,118,465		$	20,809,845


Secured debt as a % of gross real estate assets		18.4	%		16.6	%


Unencumbered gross real estate assets to unsecured debt:

Unencumbered gross real estate assets	$	19,391,215		$	13,639,816
Unsecured debt	$	8,738,503		$	7,376,955


Unencumbered gross real estate assets to unsecured debt		221.9	%		184.9	%


Fixed Charge Coverage ratio:

Core EBITDA	$	412,192		$	225,368


Interest expense	$	136,064		$	120,233
Amortization and write-off of deferred loan costs		(3,572	)		(6,110	)
Amortization of debt premium (discount), net		7,079			(10,880	)
Capitalized interest		14,753			11,048
Preferred stock dividends		10,409			6,369
Our share of fixed charges from unconsolidated entities		37,187			39,794

Total fixed charges	$	201,920		$	160,454


Fixed charge coverage ratio		2.04			1.40


	Three Months Ended
	Sept. 30		June 30		Sept. 30

	2011		2011		2010
Debt to Core EBITDA:

Total debt, including our share of unconsolidated investees	$	14,662,221	$	14,713,181	$	10,836,097
Core EBITDA-annualized	$	1,648,768	$	1,531,728	$	901,472


Debt to Core EBITDA ratio		8.89x		9.61x		12.02X

FFO; FFO, as defined by Prologis; Core FFO (collectively referred to as “FFO”).FFO is a non-GAAP measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net earnings. Although the National Association of Real Estate Investment Trusts (“NAREIT”) has published a definition of FFO, modifications to the NAREIT calculation of FFO are common among REITs, as companies seek to provide financial measures that meaningfully reflect their business.

FFO is not meant to represent a comprehensive system of financial reporting and does not present, nor do we intend it to present, a complete picture of our financial condition and operating performance. We believe net earnings computed under GAAP remains the primary measure of performance and that FFO is only meaningful when it is used in conjunction with net earnings computed under GAAP. Further, we believe our consolidated financial statements, prepared in accordance with GAAP, provide the most meaningful picture of our financial condition and our operating performance.

NAREIT’s FFO measure adjusts net earnings computed under GAAP to exclude historical cost depreciation and gains and losses from the sales of previously depreciated properties. We agree that these two NAREIT adjustments are useful to investors for the following reasons:

(i)		historical cost accounting for real estate assets in accordance with GAAP assumes, through depreciation charges, that the value of real estate assets diminishes predictably over time. NAREIT stated in its White Paper on FFO “since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.” Consequently, NAREIT’s definition of FFO reflects the fact that real estate, as an asset class, generally appreciates over time and depreciation charges required by GAAP do not reflect the underlying economic realities.

(ii)		REITs were created as a legal form of organization in order to encourage public ownership of real estate as an asset class through investment in firms that were in the business of long-term ownership and management of real estate. The exclusion, in NAREIT’s definition of FFO, of gains and losses from the sales of previously depreciated operating real estate assets allows investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT’s activity and assists in comparing those operating results between periods. We include the gains and losses from dispositions of land and development properties, as well as our proportionate share of the gains and losses from dispositions recognized by our unconsolidated investees, in our definition of FFO.

Our FFO Measures

At the same time that NAREIT created and defined its FFO measure for the REIT industry, it also recognized that “management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community.” We believe stockholders, potential investors and financial analysts who review our operating results are best served by a defined FFO measure that includes other adjustments to net earnings computed under GAAP in addition to those included in the NAREIT defined measure of FFO. Our FFO measures are used by management in analyzing our business and the performance of our properties and we believe that it is important that stockholders, potential investors and financial analysts understand the measures management uses.

We use these FFO measures, including by segment and region, to: (i) evaluate our performance and the performance of our properties in comparison to expected results and results of previous periods, relative to resource allocation decisions; (ii) evaluate the performance of our management; (iii) budget and forecast future results to assist in the allocation of resources; (iv) assess our performance as compared to similar real estate companies and the industry in general; and (v) evaluate how a specific potential investment will impact our future results. Because we make decisions with regard to our performance with a long-term outlook, we believe it is appropriate to remove the effects of short-term items that we do not expect to affect the underlying long-term performance of the properties. The long-term performance of our properties is principally driven by rental income. While not infrequent or unusual, these additional items we exclude in calculatingFFO, as defined by Prologis, are subject to significant fluctuations from period to period that cause both positive and negative short-term effects on our results of operations, in inconsistent and unpredictable directions that are not relevant to our long-term outlook.

We use our FFO measures as supplemental financial measures of operating performance. We do not use our FFO measures as, nor should they be considered to be, alternatives to net earnings computed under GAAP, as indicators of our operating performance, as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs.

FFO, as defined by Prologis

To arrive atFFO, as defined by Prologis, we adjust the NAREIT defined FFO measure to exclude:

(i)		deferred income tax benefits and deferred income tax expenses recognized by our subsidiaries;

(ii)		current income tax expense related to acquired tax liabilities that were recorded as deferred tax liabilities in an acquisition, to the extent the expense is offset with a deferred income tax benefit in GAAP earnings that is excluded from our defined FFO measure;

(iii)		foreign currency exchange gains and losses resulting from debt transactions between us and our foreign consolidated subsidiaries and our foreign unconsolidated investees;

(iv)		foreign currency exchange gains and losses from the remeasurement (based on current foreign currency exchange rates) of certain third party debt of our foreign consolidated subsidiaries and our foreign unconsolidated investees; and

(v)		mark-to-market adjustments associated with derivative financial instruments.

We calculateFFO, as defined by Prologisfor our unconsolidated investees on the same basis as we calculate ourFFO, as defined by Prologis.

We believe investors are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in planning and executing our business strategy.

FFO, excluding significant non-cash items

When we began to experience the effects of the global economic crises in the fourth quarter of 2008, we decided thatFFO, as defined by Prologis, did not provide all of the information we needed to evaluate our business in this environment. As a result, we developedFFO, excluding significant non-cash itemsto provide additional information that allowed us to better evaluate our operating performance during that unprecedented economic time. Beginning in 2011, we no longer use FFO, excluding significant non-cash items.

Core FFO

Core FFOincludesFFO, as defined by Prologis, adjusted to remove gains (losses) on acquisitions or dispositions of investments in real estate that are included inFFO, as defined by Prologis. If we recognize impairment charges due to the expected disposition of investments in real estate, we exclude those impairment charges. We may also adjust for certain other significant items that affect comparability as noted in the reconciliation. In 2011, we have adjusted to exclude Merger, Acquisitions and Other Integration Expenses; early extinguishment of debt; and losses for the disaster expenses that occurred in March 2011 in Japan.

Limitations on Use of our FFO Measures

While we believe our defined FFO measures are important supplemental measures, neither NAREIT’s nor our measures of FFO should be used alone because they exclude significant economic components of net earnings computed under GAAP and are, therefore, limited as an analytical tool. Accordingly, they are two of many measures we use when analyzing our business. Some of these limitations are:

•		The current income tax expenses that are excluded from our defined FFO measures represent the taxes that are payable.

•		Depreciation and amortization of real estate assets are economic costs that are excluded from FFO. FFO is limited, as it does not reflect the cash requirements that may be necessary for future replacements of the real estate assets. Further, the amortization of capital expenditures and leasing costs necessary to maintain the operating performance of industrial properties are not reflected in FFO.

•		Gains or losses from property acquisitions and dispositions or impairment charges related to expected dispositions represent changes in the value of the properties. By excluding these gains and losses, FFO does not capture realized changes in the value of acquired or disposed properties arising from changes in market conditions.

•		The deferred income tax benefits and expenses that are excluded from our defined FFO measures result from the creation of a deferred income tax asset or liability that may have to be settled at some future point. Our defined FFO measures do not currently reflect any income or expense that may result from such settlement.

•		The foreign currency exchange gains and losses that are excluded from our defined FFO measures are generally recognized based on movements in foreign currency exchange rates through a specific point in time. The ultimate settlement of our foreign currency-denominated net assets is indefinite as to timing and amount. Our FFO measures are limited in that they do not reflect the current period changes in these net assets that result from periodic foreign currency exchange rate movements.

We compensate for these limitations by using our FFO measures only in conjunction with net earnings computed under GAAP when making our decisions. To assist investors in compensating for these limitations, we reconcile our defined FFO measures to our net earnings computed under GAAP. This information should be read with our complete financial statements prepared under GAAP.

Fixed charge coverageis defined as Core EBITDA, divided by total fixed charges. Fixed charges consist of net interest expense adjusted for amortization of finance costs and debt discount (premium), capitalized interest, and preferred stock dividends. Prologis uses fixed charge coverage to measure its liquidity. Prologis believes that the fixed charge coverage is relevant and useful to investors because it allows fixed income investors to measure Prologis’ ability to meet its interest payments on outstanding debt, make distributions to it preferred unit holders and pay dividends to its preferred stockholders. Prologis’ computation of fixed charge coverage is not calculated in accordance with applicable SEC rules and may not be comparable to fixed charge coverage reported by other companies.

General and Administrative Expenses (“G&A”)consisted of the following (in thousands):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Gross G&A expense	$	94,741		$	59,795		$	243,373		$	190,529
Reported as rental expense		(7,192	)		(4,988	)		(17,257	)		(14,822	)
Reported as private capital expenses		(17,080	)		(9,829	)		(39,228	)		(30,079	)
Capitalized amounts		(17,128	)		(10,019	)		(42,524	)		(29,742	)

Net G&A	$	53,341		$	34,959		$	144,364		$	115,886

Global Marketscomprise the largest, most liquid markets benefiting from demand tied to global trade. These markets are defined by large population centers with high consumption per capita and typically feature major seaports, airports, and other transportation infrastructure tied to global trade. While initial returns might be lower, global markets tend to outperform overall markets in terms of growth and total return.

Interest Expenseconsisted of the following (in thousands):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Gross interest expense	$	154,324		$	114,291		$	355,986		$	332,525
Amortization of discount (premium), net		(7,079	)		10,880			5,829			38,412
Amortization of deferred loan costs		3,572			6,110			16,324			20,027

Interest expense before capitalization		150,817			131,281			378,139			390,964
Capitalized amounts		(14,753	)		(11,048	)		(38,560	)		(41,832	)

Net interest expense	$	136,064		$	120,233		$	339,579		$	349,132

Market Equityis defined as the total number of outstanding shares of our common stock and common limited partnership units multiplied by the closing price per share of our common stock at period end.

Merger, Acquisition and Other Integration Expenses.In connection with the Merger, we have incurred and expect to incur additional significant transaction, integration, and transitional costs. These costs include investment banker advisory fees; legal, tax, accounting and valuation fees; termination and severance costs (both cash and stock based compensation awards) for terminated and transitional employees; system conversion; and other integration costs. Certain of these costs were obligations of AMB and were expensed prior to the closing of the Merger by AMB. The remainder of the costs will be expensed by us as incurred, which in some cases will be through the end of 2012. At the time of the Merger, we cancelled our existing credit facilities and wrote-off the remaining unamortized deferred loan costs associated with such facilities, which is included in Merger, Acquisition and Other Integration Expenses. In addition, we have included costs associated with the acquisition of a controlling interest in PEPR and reduction in workforce charges associated with dispositions made in 2011. The following is a breakdown of the costs incurred (in thousands):


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2011		2011
Professional Fees	$	909	$	42,398
Termination, severance and transitional employee costs		11,107		45,444
Office closure, travel and other costs		667		23,012
Write-off of deferred loan costs		—		10,869

Total	$	12,683	$	121,723

Net Asset Value (“NAV”).We consider NAV to be a useful supplemental measure of our operating performance because it enables both management and investors to estimate the fair value of our business. The assessment of the fair value of a particular segment of our business is subjective in that it involves estimates and can be calculated using various methods. Therefore, in this supplemental report, we have presented the financial results and investments related to our business segments that we believe are important in calculating our NAV but have not presented any specific methodology nor provided any guidance on the assumptions or estimates that should be used in the calculation.

The components of NAV do not consider the potential changes in rental and fee income streams or the franchise value associated with our global operating platform, private capital platform, or development platform.

Net Gains on Acquisitions and Dispositions of Investments in Real Estateincludes the gains we recognized from the consolidation of PEPR and the acquisition of a controlling interest in a joint venture in Japan, both in the second quarter of 2011.

Net Operating Income (“NOI”)represents rental income less rental expenses.

Operating Portfolioincludes stabilized operating industrial properties we own or that we manage and are owned by an unconsolidated investee accounted for by the equity method of accounting.

Operating Segments — Direct Owned represents the direct long-term ownership of industrial properties, including land and the development of properties.

Operating Segments — Private Capitalrepresents the management of unconsolidated property funds and joint ventures and the properties they own.

Pre-stabilized Developmentrepresents properties that are complete but have not yet reached Stabilization.

Pro forma NOI reflects the NOI for a full quarter for operating properties that were acquired, or contributed or stabilized during the quarter. Pro forma NOI for the properties in our development portfolio is based on current total expected investment and an estimated stabilized yield.

A reconciliation of our rental income and rental expenses, computed under GAAP, to pro forma net operating income (NOI) for purposes of the Net Asset Value calculation is as follows:

(in thousands)


Calculation of pro forma NOI:

Rental income	$	462,539
Rental expenses		(126,994	)

NOI		335,545
Net termination fees and adjustments (a)		(227	)
Less: Actual NOI for development portfolio and other		(7,272	)
Less: NOI on contributed properties (b)		—

Adjusted NOI for operating portfolio owned at September 30, 2011		328,046
Straight-lined rents and amortization of lease intangibles (c)		(8,303	)

NOI for operating portfolio owned at September 30, 2011 - Cash	$	319,743


(a)		Net termination fees generally represent the gross fee negotiated at the time a customer is allowed to terminate its lease agreement offset by that customer’s rent leveling asset or liability, if any, that has been previously recognized under GAAP. Removing the net termination fees from rental income allows for the calculation of pro forma NOI to include only rental income that is indicative of the property’s recurring operating performance.

(b)		The actual NOI for properties that were contributed and not part of discontinued operations during the three-month period is removed.

(c)		Straight-lined rents and amortization of above and below market leases are removed from rental income computed under GAAP to allow for the calculation of a cash yield.

Regional Markets, similar to global markets, also benefit from large-population centers and demand. They are located at key crossroads in the supply chain and/or near economic centers for leading national or global industries. Our assets reflect the highest quality class-A product in that market and are often less supply- constrained and focus on delivering bulk goods to customers.

Rental Incomeincludes the following (in thousands):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Rental income	$	359,668		$	145,270		$	733,015		$	417,383
Amortization of lease intangibles		(11,600	)		(140	)		(13,740	)		(306	)
Rental expense recoveries		94,568			40,792			198,305			123,927
Straight-lined rents		19,903			8,096			43,199			27,812

	$	462,539		$	194,018		$	960,779		$	568,816

Same Store.We evaluate the operating performance of the industrial operating properties we own and manage using a “same store” analysis because the population of properties in this analysis is consistent from period to period, thereby eliminating the effects of changes in the composition of the portfolio on performance measures. We include all consolidated properties, and properties owned by property funds and joint ventures that are managed by us and in which we have an equity interest (referred to as “unconsolidated investees”), in our same store analysis. We have defined the same store portfolio, for the quarter ended September 30, 2011, as those operating properties in operation at January 1, 2010 that were in operation throughout the full periods in both 2011 and 2010 either by Prologis or AMB or their unconsolidated investees. We have removed all properties that were disposed of to a third party from the population for both periods. We believe the factors that impact rental income, rental expenses and net operating income in the same store portfolio are generally the same as for the total operating portfolio. In order to derive an appropriate measure of period-to-period operating performance, we remove the effects of foreign currency exchange rate movements by using the current exchange rate to translate from local currency into U.S. dollars, for both periods, to derive the same store results.

Same Store Average Occupancyrepresents the average occupied percentage for the period.

Same Store Rental Expenserepresents gross property operating expenses. In computing the percentage change in rental expenses for the same store analysis, rental expenses include property management expenses for our direct owned properties based on the property management fee that has been computed as provided in the individual agreements under which our wholly owned management companies provide property management services to each property (generally, the fee is based on a percentage of revenues).

Same Store Change in Rental Raterepresents the change in effective rental rates (average rate over the lease term) on new leases signed during the period as compared with the previous effective rental rates in that same space.

Same Store Rental Incomeincludes the amount of rental expenses that are recovered from customers under the terms of their respective lease agreements. In computing the percentage change in rental income for the same store analysis, rental income (as computed under GAAP) is adjusted to remove the net termination fees recognized for each period. Removing the net termination fees for the same store calculation allows us to evaluate the growth or decline in each property’s rental income without regard to items that are not indicative of the property’s recurring operating performance.

Stabilizationis defined when a property that was developed has been completed for one year or is 90% occupied. Upon stabilization, a property is moved into our operating portfolio.

Tenant Retentionis the square footage of all leases rented by existing tenants divided by the square footage of all expiring and rented leases during the reporting period, excluding the square footage of tenants that default or buy-out prior to expiration of their lease, short-term tenants and the square footage of month-to-month leases.

Total Estimated Investment (“TEI”)represents total estimated cost of development or expansion, including land, development and leasing costs. TEI is based on current projections and is subject to change. Non-U.S. Dollar investments are translated to U.S. Dollars using the exchange rate at period end or the date of development start for purposes of calculating development starts in any period.

Total Market Capitalizationis defined as market equity plus our share of total debt and preferred stock.

Turnover Costsrepresent the costs incurred in connection with the signing of a lease, including leasing commissions and tenant improvements. Tenant improvements include costs to prepare a space for a new tenant and for a lease renewal with the same tenant. It excludes costs to prepare a space that is being leased for the first time (i.e. in a new development property).

Value Creation represents the value that was created through our development and leasing activities. We calculate value by estimating the NOI that the property will generate at Stabilization and applying estimated stabilized cap rate applicable to that property. The value creation is calculated as the amount by which that exceeds our total expected investment.

Weighted Average Cap Stabilized Rateis calculated as NOI adjusted to reflect stabilized occupancy divided by Acquisition Cost or TEI, as applicable.

Historical Development Starts (TEI)

Year to Date Development Starts