10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2024

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

For the transition period from ______________ to ______________

Commission File Number: 001-13545 (Prologis, Inc.) 001-14245 (Prologis, L.P.)

Prologis, Inc.

Prologis, L.P.

(Exact name of registrant as specified in its charter)


Maryland (Prologis, Inc.) Delaware (Prologis, L.P.)		94-3281941 (Prologis, Inc.) 94-3285362 (Prologis, L.P.)
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Pier 1, Bay 1, San Francisco, California		94111
(Address or principal executive offices)		(Zip Code)

(415) 394-9000

(Registrants’ telephone number, including area code)

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

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


	Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Prologis, Inc.	Common Stock, $0.01 par value	PLD	New York Stock Exchange
Prologis, L.P.	3.000% Notes due 2026	PLD/26	New York Stock Exchange
Prologis, L.P.	2.250% Notes due 2029	PLD/29	New York Stock Exchange
Prologis, L.P.	5.625% Notes due 2040	PLD/40	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter periods that the registrant was required to submit such files).


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

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


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


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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).


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

The number of shares of Prologis, Inc.’s common stock outstanding at October 23, 2024, was approximately 926,175,000.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2024, of Prologis, Inc. and Prologis, L.P. Unless stated otherwise or the context otherwise requires, references to “Prologis, Inc.” or the “Parent” mean Prologis, Inc. and its consolidated subsidiaries; and references to “Prologis, L.P.” or the “Operating Partnership” or the “OP” mean Prologis, L.P., and its consolidated subsidiaries. The terms “the Company,” “Prologis,” “we,” “our” or “us” means the Parent and the OP collectively.

The Parent is a real estate investment trust (a “REIT”) and the general partner of the OP. At September 30, 2024, the Parent owned a 97.59% common general partnership interest in the OP and substantially all of the preferred units in the OP. The remaining 2.41% common limited partnership interests are owned by unaffiliated investors and certain current and former directors and officers of the Parent.

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

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

•

enhances investors’ understanding of the Parent and the OP by enabling investors to view the business as a whole in the same manner as management views and operates the business;

•

eliminates duplicative disclosure and provides a more streamlined and readable presentation as a substantial portion of the Company’s disclosure applies to both the Parent and the OP; and

•

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

It is important to understand the few differences between the Parent and the OP in the context of how we operate the Company. The Parent does not conduct business itself, other than acting as the sole general partner of the OP and issuing public equity from time to time. The OP holds substantially all the assets of the business, directly or indirectly. The OP conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Parent, which are contributed to the OP in exchange for partnership units, the OP generates capital required by the business through the OP’s operations, incurrence of indebtedness and issuance of partnership units to third parties.

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

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

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

PROLOGIS

INDEX


			Page Number
PART I.	Financial Information
	Item 1.	Financial Statements		1
	Prologis, Inc.:
		Consolidated Balance Sheets – September 30, 2024 and December 31, 2023		1
		Consolidated Statements of Income – Three and Nine Months Ended September 30, 2024 and 2023		2
		Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2024 and 2023		3
		Consolidated Statements of Equity – Three and Nine Months Ended September 30, 2024 and 2023		4
		Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2024 and 2023		5
	Prologis, L.P.:
		Consolidated Balance Sheets – September 30, 2024 and December 31, 2023		6
		Consolidated Statements of Income – Three and Nine Months Ended September 30, 2024 and 2023		7
		Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2024 and 2023		8
		Consolidated Statements of Capital – Three and Nine Months Ended September 30, 2024 and 2023		9
		Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2024 and 2023		10
	Prologis, Inc. and Prologis, L.P.:
		Notes to the Consolidated Financial Statements		11
		Note 1. General		11
		Note 2. Real Estate		12
		Note 3. Unconsolidated Entities		13
		Note 4. Assets Held for Sale or Contribution		15
		Note 5. Debt		15
		Note 6. Noncontrolling Interests		18
		Note 7. Long-Term Compensation		18
		Note 8. Earnings Per Common Share or Unit		20
		Note 9. Financial Instruments and Fair Value Measurements		21
		Note 10. Business Segments		25
		Note 11. Supplemental Cash Flow Information		27
		Reports of Independent Registered Public Accounting Firm		28
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		30
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		50
	Item 4.	Controls and Procedures		51
PART II.	Other Information
	Item 1.	Legal Proceedings		52
	Item 1A.	Risk Factors		52
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		52
	Item 3.	Defaults Upon Senior Securities		52
	Item 4.	Mine Safety Disclosures		52
	Item 5.	Other Information		52
	Item 6.	Exhibits		52

Index

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

PROLOGIS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share data)



	September 30, 2024			December 31, 2023
ASSETS
Investments in real estate properties	$	92,093,573		$	88,666,575
Less accumulated depreciation		12,332,799			10,931,485
Net investments in real estate properties		79,760,774			77,735,090
Investments in and advances to unconsolidated entities		10,092,765			9,543,970
Assets held for sale or contribution		325,987			461,657
Net investments in real estate		90,179,526			87,740,717

Cash and cash equivalents		780,871			530,388
Other assets		4,944,799			4,749,735
Total assets	$	95,905,196		$	93,020,840

LIABILITIES AND EQUITY
Liabilities:
Debt	$	32,289,832		$	29,000,501
Accounts payable and accrued expenses		1,808,142			1,766,018
Other liabilities		4,143,130			4,430,601
Total liabilities		38,241,104			35,197,120

Equity:
Prologis, Inc. stockholders’ equity:
Series Q preferred stock at stated liquidation preference of $50 per share; $0.01 par value; 1,279 shares issued and outstanding and 100,000 preferred shares authorized at September 30, 2024 and December 31, 2023		63,948			63,948
Common stock; $0.01 par value; 926,146 and 924,391 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		9,261			9,244
Additional paid-in capital		54,422,574			54,249,801
Accumulated other comprehensive loss		(572,251	)		(514,201	)
Distributions in excess of net earnings		(851,763	)		(627,068	)
Total Prologis, Inc. stockholders’ equity		53,071,769			53,181,724
Noncontrolling interests		4,592,323			4,641,996
Total equity		57,664,092			57,823,720
Total liabilities and equity	$	95,905,196		$	93,020,840

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

Index

PROLOGIS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Revenues:
Rental	$	1,897,164		$	1,777,359		$	5,577,198		$	5,062,583
Strategic capital		135,367			136,848			418,521			1,070,584
Development management and other		3,858			457			5,245			1,055
Total revenues		2,036,389			1,914,664			6,000,964			6,134,222
Expenses:
Rental		427,425			416,076			1,326,917			1,216,568
Strategic capital		61,342			84,069			210,689			306,684
General and administrative		98,154			96,673			316,041			292,097
Depreciation and amortization		649,265			642,010			1,924,075			1,846,545
Other		15,683			12,342			39,371			31,686
Total expenses		1,251,869			1,251,170			3,817,093			3,693,580

Operating income before gains on real estate transactions, net		784,520			663,494			2,183,871			2,440,642
Gains on dispositions of development properties and land, net		32,005			89,030			159,487			273,907
Gains on other dispositions of investments in real estate, net		434,446			129,584			651,306			158,392
Operating income		1,250,971			882,108			2,994,664			2,872,941

Other income (expense):
Earnings from unconsolidated entities, net		84,749			71,365			259,558			217,786
Interest expense		(230,113	)		(181,053	)		(631,700	)		(466,882	)
Foreign currency, derivative and other gains (losses) and other income (expense), net		(37,942	)		67,964			62,774			102,682
Gains on early extinguishment of debt, net		-			-			536			3,275
Total other expense		(183,306	)		(41,724	)		(308,832	)		(143,139	)
Earnings before income taxes		1,067,665			840,384			2,685,832			2,729,802
Income tax expense		(4,214	)		(41,243	)		(80,073	)		(152,541	)
Consolidated net earnings		1,063,451			799,141			2,605,759			2,577,261
Less net earnings attributable to noncontrolling interests		57,732			51,514			152,977			148,983
Net earnings attributable to controlling interests		1,005,719			747,627			2,452,782			2,428,278
Less preferred stock dividends		1,452			1,453			4,407			4,381
Net earnings attributable to common stockholders	$	1,004,267		$	746,174		$	2,448,375		$	2,423,897

Weighted average common shares outstanding – Basic		926,427			924,395			926,017			924,228
Weighted average common shares outstanding – Diluted		953,813			951,908			953,530			951,643

Net earnings per share attributable to common stockholders – Basic	$	1.08		$	0.81		$	2.64		$	2.62

Net earnings per share attributable to common stockholders – Diluted	$	1.08		$	0.80		$	2.63		$	2.61

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

Index

PROLOGIS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Consolidated net earnings	$	1,063,451		$	799,141		$	2,605,759		$	2,577,261
Other comprehensive income:
Foreign currency translation gains (losses), net		(417,102	)		146,281			(87,659	)		284,229
Unrealized gains (losses) on derivative contracts, net		(8,669	)		3,702			26,854			(19,998	)
Comprehensive income		637,680			949,124			2,544,954			2,841,492
Net earnings attributable to noncontrolling interests		(57,732	)		(51,514	)		(152,977	)		(148,983	)
Other comprehensive loss (income) attributable to noncontrolling interests		9,573			(3,396	)		2,755			(6,405	)
Comprehensive income attributable to common stockholders	$	589,521		$	894,214		$	2,394,732		$	2,686,104

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

Index

PROLOGIS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands)

Three Months Ended September 30, 2024 and 2023


			Common Stock							Accumulated			Distributions
			Number				Additional			Other			in Excess of			Non-
	Preferred		of		Par		Paid-in			Comprehensive			Net			controlling			Total
	Stock		Shares		Value		Capital			Loss			Earnings			Interests			Equity
Balance at July 1, 2024	$	63,948		925,880	$	9,259	$	54,392,526		$	(156,053	)	$	(964,620	)	$	4,578,261		$	57,923,321
Consolidated net earnings		-		-		-		-			-			1,005,719			57,732			1,063,451
Effect of equity compensation plans		-		112		1		16,167			-			-			30,565			46,733
Capital contributions		-		-		-		-			-			-			15,214			15,214
Redemption of noncontrolling interests		-		154		1		8,814			-			-			(8,815	)		-
Foreign currency translation losses, net		-		-		-		-			(407,729	)		-			(9,373	)		(417,102	)
Unrealized losses on derivative contracts, net		-		-		-		-			(8,469	)		-			(200	)		(8,669	)
Reallocation of equity		-		-		-		5,071			-			-			(5,071	)		-
Dividends ($0.96 per common share) and other distributions		-		-		-		(4	)		-			(892,862	)		(65,990	)		(958,856	)
Balance at September 30, 2024	$	63,948		926,146	$	9,261	$	54,422,574		$	(572,251	)	$	(851,763	)	$	4,592,323		$	57,664,092


			Common Stock						Accumulated			Distributions
			Number				Additional		Other			in Excess of			Non-
	Preferred		of		Par		Paid-in		Comprehensive			Net			controlling		Total
	Stock		Shares		Value		Capital		Income (Loss)			Earnings			Interests		Equity
Balance at July 1, 2023	$	63,948		923,861	$	9,239	$	54,115,592	$	(332,370	)	$	(390,779	)	$	4,612,194	$	58,077,824
Consolidated net earnings		-		-		-		-		-			747,627			51,514		799,141
Effect of equity compensation plans		-		6		-		35,021		-			-			68,350		103,371
Capital contributions		-		-