Exhibit 99.1
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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 |
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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 -
- 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
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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
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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 |
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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.
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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). |
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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 | ||||||||
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(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. |
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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. |
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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. |
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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. |
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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 |
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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. |
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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 | % | $43,283,292 | 100.0 | % | |||||||||||||||||||||||
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Region | Square Feet | Third Quarter NOI | Occupancy | Gross Book Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prologis Share of | Prologis Share of | Prologis Share of | Prologis Share of | Prologis Share of | Prologis Share of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | Unconsolidated | Total | % of Total | Consolidated ($) | 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 | % | |||||||||||||||||||||||||||||||||||||||||||
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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. |
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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 | ||||||||||||
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 | ||||||||||||
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% | ||||||||||
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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. |
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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. |
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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 |
Historical Development Starts (TEI) | Year to Date Development Starts | |||||
![]() | ![]() | ![]() | ![]() |
(A) | Amounts include legacy AMB and Prologis. |
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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 | |||||||||||||||||||||||||||||||||||||||||||||||
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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 | % | ||||||||||||||||||||||||||||
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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 | ||||||||||||
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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 | US | 24 | % | June 2001 | December 2014 (estimated) | |||||||
Prologis AMS | Core | Consolidated | US | 39 | % | June 2004 | December 2012, extendable 4 years | |||||||
Prologis Mexico Fondo Logistico (B) | Core/Development | Consolidated | Mexico | 20 | % | July 2010 | July 2020 | |||||||
Prologis European Properties | Core | Consolidated | Europe | 93 | % | September 1999 | Open end | |||||||
Prologis California | Core | Unconsolidated | US | 50 | % | August 1999 | Perpetual | |||||||
Prologis North American Properties Fund I | Core | Unconsolidated | US | 41 | % | June 2000 | January 2013 | |||||||
Prologis North American Properties Fund XI | Core | Unconsolidated | US | 20 | % | February 2003 | December 2023 | |||||||
Prologis Targeted U.S. Logistics Fund (B) | Core | Unconsolidated | US | 30 | % | October 2004 | Open end | |||||||
Prologis North American Industrial Fund (B) | Core | Unconsolidated | US | 23 | % | March 2006 | Open end | |||||||
Prologis DFS Fund I | Development | Unconsolidated | US | 15 | % | October 2006 | Upon final sale | |||||||
Prologis North American Industrial Fund III | Core | Unconsolidated | US | 20 | % | July 2007 | July 2015 | |||||||
Prologis North American Industrial Fund II | Core | Unconsolidated | US | 37 | % | August 2007 | August 2017 | |||||||
Prologis SGP Mexico (B) | Core | Unconsolidated | Mexico | 22 | % | December 2004 | December 2016; extendable 5 years | |||||||
Prologis Mexico Industrial Fund | Core | Unconsolidated | Mexico | 20 | % | August 2007 | August 2017; extendable 5 years | |||||||
Prologis Brazil Logistics Partners Fund I (B)(C) | Development | Unconsolidated | Brazil | 50 | % | December 2010 | December 2017; extendable 2 years | |||||||
Prologis Targeted Europe Logistics Fund (B) | Core | Unconsolidated | Europe | 37 | % | June 2007 | Open end | |||||||
Prologis European Properties Fund II (B) | Core | Unconsolidated | Europe | 30 | % | August 2007 | Open end | |||||||
Europe Logistics Venture 1 (B) | Core | Unconsolidated | Europe | 15 | % | February 2011 | Perpetual | |||||||
Prologis Japan Fund 1 | Core | Unconsolidated | Japan | 20 | % | June 2005 | June 2013; extendable 2 years | |||||||
Prologis China Logistics Venture 1 (B) | Core/Development | Unconsolidated | China | 15 | % | 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%. |
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(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. |
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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 | |||
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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. |
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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. |
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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. |
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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):
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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.
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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
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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 | ||||||||
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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 | |||||||||
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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.
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