UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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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:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address or principal executive offices) |
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(Zip Code) |
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(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:
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Title of Each Class |
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Trading Symbol(s) |
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Name of Each Exchange on Which Registered |
Prologis, Inc. |
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Prologis, L.P. |
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Prologis, L.P. |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing for the past 90 days.
Prologis, Inc. |
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☒ |
No |
☐ |
Prologis, L.P. |
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☒ |
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. |
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☒ |
No |
☐ |
Prologis, L.P. |
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☒ |
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.: |
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Accelerated filer ☐ |
Non-accelerated filer ☐ |
Smaller reporting company |
Emerging growth company |
Prologis, L.P.: |
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Large accelerated filer ☐ |
Accelerated filer ☐ |
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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 |
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No |
☒ |
Prologis, L.P. |
Yes |
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No |
☒ |
The number of shares of Prologis, Inc.’s common stock outstanding at August 4, 2022, was approximately
EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the period ended June 30, 2022, 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 June 30, 2022, the Parent owned 97.28% common general partnership interest in the OP and substantially all of the preferred units in the OP. The remaining 2.72% 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:
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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; |
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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 |
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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
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
PROLOGIS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share data)
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June 30, 2022 |
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December 31, 2021 |
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ASSETS |
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Investments in real estate properties |
$ |
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$ |
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Less accumulated depreciation |
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Net investments in real estate properties |
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Investments in and advances to unconsolidated entities |
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Assets held for sale or contribution |
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Net investments in real estate |
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Cash and cash equivalents |
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Other assets |
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Total assets |
$ |
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$ |
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LIABILITIES AND EQUITY |
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Liabilities: |
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Debt |
$ |
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$ |
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Accounts payable and accrued expenses |
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Other liabilities |
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Total liabilities |
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Equity: |
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Prologis, Inc. stockholders’ equity: |
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Series Q preferred stock at stated liquidation preference of $ June 30, 2022 and December 31, 2021 |
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Common stock; $ June 30, 2022 and December 31, 2021, respectively |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Distributions in excess of net earnings |
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( |
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Total Prologis, Inc. stockholders’ equity |
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Noncontrolling interests |
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Total equity |
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Total liabilities and equity |
$ |
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$ |
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The accompanying notes are an integral part of these Consolidated Financial Statements.
1
PROLOGIS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenues: |
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Rental |
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$ |
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$ |
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$ |
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$ |
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Strategic capital |
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Development management and other |
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Total revenues |
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Expenses: |
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Rental |
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Strategic capital |
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General and administrative |
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Depreciation and amortization |
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Other |
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Total expenses |
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Operating income before gains on real estate transactions, net |
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Gains on dispositions of development properties and land, net |
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Gains on other dispositions of investments in real estate, net |
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Operating income |
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Other income (expense): |
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Earnings from unconsolidated entities, net |
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Interest expense |
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( |
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( |
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( |
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( |
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Interest and other income, net |
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Foreign currency and derivative gains (losses), net |
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( |
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Losses on early extinguishment of debt, net |
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( |
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Total other income (expense) |
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( |
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Earnings before income taxes |
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Income tax expense |
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( |
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( |
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( |
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( |
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Consolidated net earnings |
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Less net earnings attributable to noncontrolling interests |
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Net earnings attributable to controlling interests |
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Less preferred stock dividends |
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Net earnings attributable to common stockholders |
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$ |
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$ |
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$ |
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$ |
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Weighted average common shares outstanding – Basic |
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Weighted average common shares outstanding – Diluted |
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Net earnings per share attributable to common stockholders – Basic |
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$ |
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$ |
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$ |
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$ |
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Net earnings per share attributable to common stockholders – Diluted |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these Consolidated Financial Statements.
2
PROLOGIS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In thousands)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Consolidated net earnings |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss): |
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Foreign currency translation gains (losses), net |
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( |
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Unrealized gains on derivative contracts, net |
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Comprehensive income |
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Net earnings attributable to noncontrolling interests |
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( |
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( |
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( |
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( |
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Other comprehensive loss (income) attributable to noncontrolling interests |
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( |
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( |
) |
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( |
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Comprehensive income attributable to common stockholders |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these Consolidated Financial Statements.
3
PROLOGIS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(In thousands)
Three Months Ended June 30, 2022 and 2021
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Common Stock |
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Accumulated |
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Distributions |
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Number |
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Additional |
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Other |
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in Excess of |
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Non- |
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Preferred |
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of |
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Par |
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Paid-in |
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Comprehensive |
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Net |
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controlling |
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Total |
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Stock |
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Shares |
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Value |
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Capital |
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Income (Loss) |
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Earnings |
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Interests |
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Equity |
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Balance at April 1, 2022 |
$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
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Consolidated net earnings |
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- |
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- |
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- |
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- |
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- |
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Effect of equity compensation plans |
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- |
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- |
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- |
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Capital contributions |
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- |
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- |
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- |
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- |
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- |
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- |
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Redemption of noncontrolling interests |
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- |
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- |
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- |
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( |
) |
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( |
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Foreign currency translation gains, net |
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- |
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- |
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- |
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- |
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- |
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Unrealized gains on derivative contracts, net |
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- |
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- |
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- |
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- |
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- |
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Reallocation of equity |
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- |
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- |
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- |
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- |
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- |
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( |
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- |
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Dividends ($ and other distributions |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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( |
) |
Balance at June 30, 2022 |
$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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$ |
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Common Stock |
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Accumulated |
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Distributions |
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Number |
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Additional |
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Other |
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in Excess of |
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Non- |
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Preferred |
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of |
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Par |
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Paid-in |
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Comprehensive |
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Net |
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controlling |
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Total |
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Stock |
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Shares |
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Value |
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Capital |
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Income (Loss) |
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Earnings |
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Interests |
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Equity |
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Balance at April 1, 2021 |
$ |
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$ |
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$ |
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|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
Consolidated net earnings |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of equity compensation plans |
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Capital contributions |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Redemption of noncontrolling interests |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Consolidation of other venture |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Foreign currency translation losses, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Unrealized gains on derivative contracts, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
Reallocation of equity |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
Dividends ($ and other distributions |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2021 |
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2022 and 2021
|
|
|
|
|
Common Stock |
|
|
|
|
|
|
Accumulated |
|
|
Distributions |
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
Number |
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
in Excess of |
|
|
Non- |
|
|
|
|
|
|||||
|
Preferred |
|
|
of |
|
|
Par |
|
|
Paid-in |
|
|
Comprehensive |
|
|
Net |
|
|
controlling |
|
|
Total |
|
||||||||
|
Stock |
|
|
Shares |
|
|
Value |
|
|
Capital |
|
|
Income (Loss) |
|
|
Earnings |
|
|
Interests |
|
|
Equity |
|
||||||||
Balance at January 1, 2022 |
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
Consolidated net earnings |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of equity compensation plans |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Capital contributions |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Redemption of noncontrolling interests |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Foreign currency translation gains, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
Unrealized gains on derivative contracts, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
Reallocation of equity |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
Dividends ($ and other distributions |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2022 |
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
Common Stock |
|
|
|
|
|
|
Accumulated |
|
|
Distributions |
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
Number |
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
in Excess of |
|
|
Non- |
|
|
|
|
|
|||||
|
Preferred |
|
|
of |
|
|
Par |
|
|
Paid-in |
|
|
Comprehensive |
|
|
Net |
|
|
controlling |
|
|
Total |
|
||||||||
|
Stock |
|
|
Shares |
|
|
Value |
|
|
Capital |
|
|
Income (Loss) |
|
|
Earnings |
|
|
Interests |
|
|
Equity |
|
||||||||
Balance at January 1, 2021 |
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
Consolidated net earnings |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of equity compensation plans |
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Capital contributions |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Redemption of noncontrolling interests |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Consolidation of other venture |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Foreign currency translation gains, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
Unrealized gains on derivative contracts, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
Reallocation of equity |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
Dividends ($ and other distributions |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2021 |
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
4
PROLOGIS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
|
|
Six Months Ended |
|
|||||
|
|
June 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Operating activities: |
|
|
|
|
|
|
|
|
Consolidated net earnings |
|
$ |
|
|
|
$ |
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Straight-lined rents and amortization of above and below market leases |
|
|
( |
) |
|
|
( |
) |
Equity-based compensation awards |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
Earnings from unconsolidated entities, net |
|
|
( |
) |
|
|
( |
) |
Operating distributions from unconsolidated entities |
|
|
|
|
|
|
|
|
Decrease (increase) in operating receivables from unconsolidated entities |
|
|
( |
) |
|
|
|
|
Amortization of debt discounts and debt issuance costs, net |
|
|
|
|
|
|
|
|
Gains on dispositions of development properties and land, net |
|
|
( |
) |
|
|
( |
) |
Gains on other dispositions of investments in real estate, net |
|
|
( |
) |
|
|
( |
) |
Unrealized foreign currency and derivative gains, net |
|
|
( |
) |
|
|
( |
) |
Losses on early extinguishment of debt, net |
|
|
|
|
|
|
|
|
Deferred income tax expense |
|
|
|
|
|
|
|
|
Decrease in accounts receivable and other assets |
|
|
|
|
|
|
|
|
Decrease in accounts payable and accrued expenses and other liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Real estate development |
|
|
( |
) |
|
|
( |
) |
Real estate acquisitions |
|
|
( |
) |
|
|
( |
) |
Tenant improvements and lease commissions on previously leased space |
|
|
( |
) |
|
|
( |
) |
Property improvements |
|
|
( |
) |
|
|
( |
) |
Proceeds from dispositions and contributions of real estate |
|
|
|
|
|
|
|
|
Investments in and advances to unconsolidated entities |
|
|
( |
) |
|
|
( |
) |
Return of investment from unconsolidated entities |
|
|
|
|
|
|
|
|
Proceeds from the settlement of net investment hedges |
|
|
|
|
|
|
|
|
Payments on the settlement of net investment hedges |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Financing activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock |
|
|
|
|
|
|
|
|
Dividends paid on common and preferred stock |
|
|
( |
) |
|
|
( |
) |
Noncontrolling interests contributions |
|
|
|
|
|
|
|
|
Noncontrolling interests distributions |
|
|
( |
) |
|
|
( |
) |
Settlement of noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
Tax paid with shares withheld |
|
|
( |
) |
|
|
( |
) |
Debt and equity issuance costs paid |
|
|
( |
) |
|
|
( |
) |
Net proceeds from (payments on) credit facilities |
|
|
|
|
|
|
( |
) |
Repurchase of and payments on debt |
|
|
( |
) |
|
|
( |
) |
Proceeds from the issuance of debt |
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
Effect of foreign currency exchange rate changes on cash |
|
|
( |
) |
|
|
( |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
( |
) |
|
|
|
|
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
|
|
|
$ |
|
|
See Note 11 for information on noncash investing and financing activities and other information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
5
PROLOGIS, L.P.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
||
ASSETS |
|
|
|
|
|
|
|
Investments in real estate properties |
$ |
|
|
|
$ |
|
|
Less accumulated depreciation |
|
|
|
|
|
|
|
Net investments in real estate properties |
|
|
|
|
|
|
|
Investments in and advances to unconsolidated entities |
|
|
|
|
|
|
|
Assets held for sale or contribution |
|
|
|
|
|
|
|
Net investments in real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
Other assets |
|
|
|
|
|
|
|
Total assets |
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND CAPITAL |
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
Debt |
$ |
|
|
|
$ |
|
|
Accounts payable and accrued expenses |
|
|
|
|
|
|
|
Other liabilities |
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital: |
|
|
|
|
|
|
|
Partners’ capital: |
|
|
|
|
|
|
|
General partner – preferred |
|
|
|
|
|
|
|
General partner – common |
|
|
|
|
|
|
|
Limited partners – common |
|
|
|
|
|
|
|
Limited partners – Class A common |
|
|
|
|
|
|
|
Total partners’ capital |
|
|
|
|
|
|
|
Noncontrolling interests |
|
|
|
|
|
|
|
Total capital |
|
|
|
|
|
|
|
Total liabilities and capital |
$ |
|
|
|
$ |
|
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
6
PROLOGIS, L.P.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per unit amounts)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Strategic capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development management and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategic capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income before gains on real estate transactions, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on dispositions of development properties and land, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on other dispositions of investments in real estate, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from unconsolidated entities, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest and other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency and derivative gains (losses), net |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
Losses on early extinguishment of debt, net |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Total other income (expense) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Earnings before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Consolidated net earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less net earnings attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less preferred unit distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to common unitholders |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common units outstanding – Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common units outstanding – Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per unit attributable to common unitholders – Basic |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per unit attributable to common unitholders – Diluted |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
7
PROLOGIS, L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In thousands)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Consolidated net earnings |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation gains (losses), net |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
Unrealized gains on derivative contracts, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other comprehensive loss (income) attributable to noncontrolling interests |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
Comprehensive income attributable to common unitholders |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
8
PROLOGIS, L.P.
CONSOLIDATED STATEMENTS OF CAPITAL
(Unaudited)
(In thousands)
Three Months Ended June 30, 2022 and 2021
|
General Partner |
|
|
Limited Partners |
|
|
Non- |
|
|
|
|
|
|||||||||||||||||||||||||||
|
Preferred |
|
|
Common |
|
|
Common |
|
|
Class A Common |
|
|
controlling |
|
|
Total |
|
||||||||||||||||||||||
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Interests |
|
|
Capital |
|
||||||||||
Balance at April 1, 2022 |
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Consolidated net earnings |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of equity compensation plans |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Capital contributions |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Redemption of limited partners units |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Foreign currency translation gains (losses), net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Unrealized gains on derivative contracts, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
Reallocation of capital |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
Distributions ($ and other |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2022 |
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Partner |
|
|
Limited Partners |
|
|
Non- |
|
|
|
|
|
|||||||||||||||||||||||||||
|
Preferred |
|
|
Common |
|
|
Common |
|
|
Class A Common |
|
|
controlling |
|
|
Total |
|
||||||||||||||||||||||
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Interests |
|
|
Capital |
|
||||||||||
Balance at April 1, 2021 |
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Consolidated net earnings |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of equity compensation plans |
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Capital contributions |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Redemption of limited partners units |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Consolidation of other venture |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Foreign currency translation gains (losses), net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Unrealized gains on derivative contracts, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
Reallocation of capital |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
Distributions ($ and other |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2021 |
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2022 and 2021
|
General Partner |
|
|
Limited Partners |
|
|
Non- |
|
|
|
|
|
|||||||||||||||||||||||||||
|
Preferred |
|
|
Common |
|
|
Common |
|
|
Class A Common |
|
|
controlling |
|
|
Total |
|
||||||||||||||||||||||
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Interests |
|
|
Capital |
|
||||||||||
Balance at January 1, 2022 |
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Consolidated net earnings |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of equity compensation plans |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Capital contributions |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Redemption of limited partners units |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Foreign currency translation gains (losses), net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Unrealized gains on derivative contracts, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
Reallocation of capital |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
Distributions ($ and other |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2022 |
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Partner |
|
|
Limited Partners |
|
|
Non- |
|
|
|
|
|
|||||||||||||||||||||||||||
|
Preferred |
|
|
Common |
|
|
Common |
|
|
Class A Common |
|
|
controlling |
|
|
Total |
|
||||||||||||||||||||||
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Units |
|
|
Amount |
|
|
Interests |
|
|
Capital |
|
||||||||||
Balance at January 1, 2021 |
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Consolidated net earnings |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of equity compensation plans |
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Capital contributions |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Redemption of limited partners units |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Consolidation of other venture |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Foreign currency translation gains (losses), net |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Unrealized gains on derivative contracts, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
Reallocation of capital |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
Distributions ($ and other |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2021 |
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these Consolidated Financial Statements.
9
PROLOGIS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
|
|
Six Months Ended |
|
|||||
|
|
June 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Operating activities: |
|
|
|
|
|
|
|
|
Consolidated net earnings |
|
$ |
|
|
|
$ |
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Straight-lined rents and amortization of above and below market leases |
|
|
( |
) |
|
|
( |
) |
Equity-based compensation awards |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
Earnings from unconsolidated entities, net |
|
|
( |
) |
|
|
( |
) |
Operating distributions from unconsolidated entities |
|
|
|
|
|
|
|
|
Decrease (increase) in operating receivables from unconsolidated entities |
|
|
( |
) |
|
|
|
|
Amortization of debt discounts and debt issuance costs, net |
|
|
|
|
|
|
|
|
Gains on dispositions of development properties and land, net |
|
|
( |
) |
|
|
( |
) |
Gains on other dispositions of investments in real estate, net |
|
|
( |
) |
|
|
( |
) |
Unrealized foreign currency and derivative gains, net |
|
|
( |
) |
|
|
( |
) |
Losses on early extinguishment of debt, net |
|
|
|
|
|
|
|
|
Deferred income tax expense |
|
|
|
|
|
|
|
|
Decrease in accounts receivable and other assets |
|
|
|
|
|
|
|
|
Decrease in accounts payable and accrued expenses and other liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Real estate development |
|
|
( |
) |
|
|
( |
) |
Real estate acquisitions |
|
|
( |
) |
|
|
( |
) |
Tenant improvements and lease commissions on previously leased space |
|
|
( |
) |
|
|
( |
) |
Property improvements |
|
|
( |
) |
|
|
( |
) |
Proceeds from dispositions and contributions of real estate |
|
|
|
|
|
|
|
|
Investments in and advances to unconsolidated entities |
|
|
( |
) |
|
|
( |
) |
Return of investment from unconsolidated entities |
|
|
|
|
|
|
|
|
Proceeds from the settlement of net investment hedges |
|
|
|
|
|
|
|
|
Payments on the settlement of net investment hedges |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Financing activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of common partnership units in exchange for contributions from Prologis, Inc. |
|
|
|
|
|
|
|
|
Distributions paid on common and preferred units |
|
|
( |
) |
|
|
( |
) |
Noncontrolling interests contributions |
|
|
|
|
|
|
|
|
Noncontrolling interests distributions |
|
|
( |
) |
|
|
( |
) |
Redemption of common limited partnership units |
|
|
( |
) |
|
|
( |
) |
Tax paid with shares of the Parent withheld |
|
|
( |
) |
|
|
( |
) |
Debt and equity issuance costs paid |
|
|
( |
) |
|
|
( |
) |
Net proceeds from (payments on) credit facilities |
|
|
|
|
|
|
( |
) |
Repurchase of and payments on debt |
|
|
( |
) |
|
|
( |
) |
Proceeds from the issuance of debt |
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
Effect of foreign currency exchange rate changes on cash |
|
|
( |
) |
|
|
( |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
( |
) |
|
|
|
|
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
|
|
|
$ |
|
|
See Note 11 for information on noncash investing and financing activities and other information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
10
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. GENERAL
Business. Prologis, Inc. (or the “Parent”) commenced operations as a fully integrated real estate company in 1997, elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code” or “IRC”), and believes the current organization and method of operation will enable it to maintain its status as a REIT. The Parent is the general partner of Prologis, L.P. (or the “Operating Partnership” or “OP”). Through the OP, we are engaged in the ownership, acquisition, development and management of logistics facilities with a focus on key markets in 19 countries on four continents. We invest in real estate through wholly owned subsidiaries and other entities through which we co-invest with partners and investors. We maintain a significant level of ownership in these co-investment ventures, which may be consolidated or unconsolidated based on our level of control of the entity. Our current business strategy consists of
For each share of preferred or common stock the Parent issues, the OP issues a corresponding preferred or common partnership unit, as applicable, to the Parent in exchange for the contribution of the proceeds from the stock issuance. At June 30, 2022, the Parent owned a
As the sole general partner of the OP, the Parent has complete responsibility and discretion in the day-to-day management and control of the OP and 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 general partner with control of the OP, the Parent is the primary beneficiary and therefore consolidates the OP. Because the Parent’s only significant asset is its investment in the OP, the assets and liabilities of the Parent and the OP are the same on their respective financial statements.
Basis of Presentation. The accompanying Consolidated Financial Statements are prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and are presented in our reporting currency, the U.S. dollar. Intercompany transactions with consolidated entities have been eliminated.
The accompanying unaudited interim financial information has been prepared according to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in our annual financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations. Our management believes that the disclosures presented in these financial statements are adequate to make the information presented not misleading. In our opinion, all adjustments and eliminations, consisting only of normal recurring adjustments, necessary to present fairly the financial position and results of operations for both the Parent and the OP for the reported periods have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year. The accompanying unaudited interim financial information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC, and other public information.
Accounting Pronouncements.
Reference Rate Reform. In March 2020, the Financial Accounting Standards Board issued an Accounting Standard Update (“ASU”) that provided practical expedients to address existing guidance on contract modifications and hedge accounting due to the expected market transition from the London Inter-bank Offered Rate (“LIBOR”) and other interbank offered rates (together “IBORs”) to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). We refer to this transition as “reference rate reform.” The ASU was effective upon issuance on a prospective basis beginning January 1, 2020, and we elected to adopt the ASU over time as our reference rate reform activities occurred.
In March 2021, the Financial Conduct Authority formally announced that the publication of LIBOR was ending and confirmed that U.S. dollar LIBOR-indexed rates would cease to be published after June 30, 2023. In June 2022, we modified the base rate of the aggregate lender commitments in U.S. dollars from U.S. dollar LIBOR to SOFR for both of our global senior credit facilities. See Note 5 for more information on these modifications. There was no material impact on our Consolidated Financial Statements due to the adoption of this ASU. We do not anticipate modifying any derivative financial instruments, as none are impacted by this ASU at June 30, 2022.
11
Proposed Merger. On June 11, 2022, we entered into a definitive agreement (the “Merger Agreement”) with Duke Realty Corporation (“Duke Realty”) and Duke Realty Limited Partnership. The purchase price consideration will be determined on the closing date as this is a stock-for-stock transaction based upon a fixed exchange ratio. The estimated acquisition price is approximately $
NOTE 2. REAL ESTATE
Investments in real estate properties consisted of the following (dollars and square feet in thousands):
|
Square Feet |
Number of Buildings |
|
|
||||||||||||||
|
Jun 30, |
|
Dec 31, |
|
Jun 30, |
|
Dec 31, |
|
Jun 30, |
|
Dec 31, |
|
||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
||||||
Operating properties: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buildings and improvements |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
Improved land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development portfolio, including land costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prestabilized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties under development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other real estate investments (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments in real estate properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investments in real estate properties |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
(2) |
Included in other real estate investments were: (i) non-strategic real estate assets acquired that we do not intend to operate long-term; (ii) land parcels we own and lease to third parties; (iii) non-industrial real estate assets that we intend to redevelop into industrial properties; and (iv) costs associated with potential acquisitions and future development projects, including purchase options on land. |
Acquisitions
The following table summarizes our real estate acquisition activity (dollars and square feet in thousands):
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Number of operating properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Square feet |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition cost of net investments in real estate, excluding land and other real estate investments |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acres of land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition cost of land |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition cost of other real estate investments |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
12
Dispositions
The following table summarizes our dispositions of net investments in real estate which include contributions to unconsolidated co-investment ventures and dispositions to third parties (dollars and square feet in thousands):
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Dispositions of development properties and land, net (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Square feet |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Gains on dispositions of development properties and land, net |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other dispositions of investments in real estate, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Square feet |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Gains on other dispositions of investments in real estate, net |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
(1) |
|
Leases
We recognized lease right-of-use assets of $
NOTE 3. UNCONSOLIDATED ENTITIES
Summary of Investments
We have investments in entities through a variety of ventures. We co-invest in entities that own multiple properties with partners and investors and we provide asset management and property management services to these entities, which we refer to as co-investment ventures. These entities may be consolidated or unconsolidated depending on the structure, our partner’s participation and other rights and our level of control of the entity. This note details our investments in unconsolidated co-investment ventures, which are related parties and accounted for using the equity method of accounting. See Note 6 for more detail regarding our consolidated investments that are not wholly owned.
We also have investments in other ventures, generally with one partner, which we account for using the equity method. We refer to our investments in both unconsolidated co-investment ventures and other ventures, collectively, as unconsolidated entities.
The following table summarizes our investments in and advances to unconsolidated entities (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2022 |
|
|
2021 |
|
||
Unconsolidated co-investment ventures |
|
$ |
|
|
|
$ |
|
|
Other ventures |
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
|
$ |
|
|
13
Unconsolidated Co-Investment Ventures
The following table summarizes the Strategic Capital Revenues we recognized in the Consolidated Statements of Income related to our unconsolidated co-investment ventures (in thousands):
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Recurring fees |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Transactional fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Promote revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total strategic capital revenues from unconsolidated co-investment ventures (1) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
(1) |
|
The following table summarizes the key property information, financial position and operating information of our unconsolidated co-investment ventures on a U.S. GAAP basis (not our proportionate share) and the amounts we recognized in the Consolidated Financial Statements related to these ventures (dollars and square feet in millions):
|
U.S. |
|
|
Other Americas (1) |
|
|
Europe |
|
|
Asia |
|
|
Total |
|
|||||||||||||||||||||||||
At: |
Jun 30, 2022 |
|
|
Dec 31, 2021 |
|
|
Jun 30, 2022 |
|
|
Dec 31, 2021 |
|
|
Jun 30, 2022 |
|
|
Dec 31, 2021 |
|
|
Jun 30, 2022 |
|
|
Dec 31, 2021 |
|
|
Jun 30, 2022 |
|
|
Dec 31, 2021 |
|
||||||||||
Key property information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Square feet |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial position: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
Total assets ($) |
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|
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|
|
|
Third-party debt ($) |
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|
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|
|
|
|
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|
|
|
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|
|
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|
Total liabilities ($) |
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|
|
|
|
|
Our investment balance ($) (2) |
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|
|
Our weighted average ownership (3) |
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
U.S. |
|
|
Other Americas (1) |
|
|
Europe |
|
|
Asia |
|
|
Total |
|
|||||||||||||||||||||||||
Operating Information: |
Jun 30, 2022 |
|
|
Jun 30, 2021 |
|
|
Jun 30, 2022 |
|
|
Jun 30, 2021 |
|
|
Jun 30, 2022 |
|
|
Jun 30, 2021 |
|
|
Jun 30, 2022 |
|
|
Jun 30, 2021 |
|
|
Jun 30, 2022 |
|
|
Jun 30, 2021 |
|
||||||||||
For the three months ended: |
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|
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|
|
|
|
|
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|
Total revenues ($) |
|
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings ($) |
|
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|
|
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|
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|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our earnings from unconsolidated co-investment ventures, net ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
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|
|
|
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|
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|
|
|
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|
|
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|
|
|
|
|
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|
|
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|
|
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|
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|
|
|
|
|
|
|
|
For the six months ended: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our earnings from unconsolidated co-investment ventures, net ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
(2) |
Prologis’ investment balance is presented at our adjusted basis. The difference between our ownership interest of a venture’s equity and our investment balance at June 30, 2022 and December 31, 2021, results principally from four types of transactions: (i) deferred gains from the contribution of property to a venture prior to January 1, 2018; (ii) recording additional costs associated with our investment in the venture; (iii) receivables, principally for fees and promotes ($ |
(3) |
|
14
Equity Commitments Related to Certain Unconsolidated Co-Investment Ventures
At June 30, 2022, our outstanding equity commitments were $
NOTE 4. ASSETS HELD FOR SALE OR CONTRIBUTION
We had investments in certain real estate properties that met the criteria to be classified as held for sale or contribution at June 30, 2022 and December 31, 2021. At the time of classification, these properties were expected to be sold to third parties or were recently stabilized and expected to be contributed to unconsolidated co-investment ventures within twelve months. The amounts included in Assets Held for Sale or Contribution represented real estate investment balances and the related assets and liabilities.
Assets held for sale or contribution consisted of the following (dollars and square feet in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2022 |
|
|
2021 |
|
||
Number of operating properties |
|
|
|
|
|
|
|
|
Square feet |
|
|
|
|
|
|
|
|
Total assets held for sale or contribution |
|
$ |
|
|
|
$ |
|
|
Total liabilities associated with assets held for sale or contribution – included in Other Liabilities |
|
$ |
|
|
|
$ |
|
|
NOTE 5. DEBT
All debt is incurred by the OP or its consolidated subsidiaries. The following table summarizes our debt (dollars in thousands):
|
June 30, 2022 |
|
|
December 31, 2021 |
|
||||||||||||||||
|
Weighted Average |
|
|
Amount |
|
|
Weighted Average |
|
|
Amount |
|
||||||||||
|
Interest Rate (1) |
|
|
Term (2) |
|
|
Outstanding (3) |
|
|
Interest Rate (1) |
|
|
Term (2) |
|
|
Outstanding (3) |
|
||||
Credit facilities |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
Senior notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term loans and unsecured other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
(1) |
The weighted average interest rates presented represent the effective interest rates (including amortization of debt issuance costs and noncash premiums or discounts) at the end of the period for the debt outstanding and include the impact of designated interest rate swaps, which effectively fix the interest rate on certain variable rate debt. |
(2) |
The weighted average term represents the remaining maturity in years on the debt outstanding at period end. |
(3) |
We borrow in the functional currencies of the countries where we invest. Included in the outstanding balances were borrowings denominated in the following currencies: |
|
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
||||||||||||||||||
|
|
|
Weighted Average Interest Rate |
|
|
Amount Outstanding |
|
|
% of Total |
|
|
Weighted Average Interest Rate |
|
|
Amount Outstanding |
|
|
% of Total |
|
||||||
|
British pound sterling |
|
|
|
% |
|
$ |
|
|
|
|
|
% |
|
|
|
% |
|
$ |
|
|
|
|
|
% |
|
Canadian dollar |
|
|
|
% |
|
|
|
|
|
|
|
% |
|
|
|
% |
|
|
|
|
|
|
|
% |
|
Euro |
|
|
|
% |
|
|
|
|
|
|
|
% |
|
|
|
% |
|
|
|
|
|
|
|
% |
|
Japanese yen |
|
|
|
% |
|
|
|
|
|
|
|
% |
|
|
|
% |
|
|
|
|
|
|
|
% |
|
U.S. dollar |
|
|
|
% |
|
|
|
|
|
|
|
% |
|
|
|
% |
|
|
|
|
|
|
|
% |
|
Total |
|
|
|
% |
|
$ |
|
|
|
|
|
% |
|
|
|
% |
|
$ |
|
|
|
|
|
% |
15
Credit Facilities
In June, we terminated our global senior credit facility (the “2019 Global Facility”) and entered into the 2022 Global Facility with a borrowing capacity of up to $
We also have a Japanese yen revolver (the “Yen Credit Facility”) with total commitments of ¥
We refer to the 2021 Global Facility, the 2022 Global Facility and the Yen Credit Facility, collectively, as our “Credit Facilities.” Pricing for the Credit Facilities, including the spread over the applicable benchmark and the rates applicable to facility fees and letter of credit fees, varies based on the public debt ratings of the OP.
Liquidity
The following table summarizes information about our available liquidity at June 30, 2022 (in millions):
|
|
|
|
|
Aggregate lender commitments |
|
|
|
|
Credit Facilities |
|
$ |
|
|
Less: |
|
|
|
|
Borrowings outstanding |
|
|
|
|
Outstanding letters of credit |
|
|
|
|
Current availability |
|
$ |
|
|
Cash and cash equivalents |
|
|
|
|
Total liquidity |
|
$ |
|
|
Senior Notes
The following table summarizes the issuances of senior notes during the six months ended June 30, 2022 (principal in thousands):
|
|
Aggregate Principal |
|
|
Issuance Date Weighted Average |
|
|
|
|||||||||
Issuance Date |
|
Borrowing Currency |
|
|
USD (1) |
|
|
Interest Rate (2) |
|
|
Term (3) |
|
|
Maturity Dates |
|||
January |
|
£ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
February (4) |
|
€ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
(1) |
The exchange rate used to calculate into U.S. dollars was the spot rate at the settlement date. |
(2) |
The weighted average interest rate represents the fixed or variable interest rates of the related debt at the issuance date. |
(3) |
The weighted average term represents the remaining maturity in years on the related debt at the issuance date. |
(4) |
Net proceeds from the issuance of these notes were used to finance green projects eligible under our green bond framework, repay or refinance indebtedness and for general corporate purposes. |
16
Long-Term Debt Maturities
Scheduled principal payments due on our debt for the remainder of 2022 and for each year through the period ended December 31, 2026, and thereafter were as follows at June 30, 2022 (in thousands):
|
|
|
|
|
|
Unsecured |
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Credit |
|
|
Senior |
|
|
Term Loans |
|
|
Secured |
|
|
|
|
|
||||
Maturity |
|
Facilities |
|
|
Notes |
|
|
and Other |
|
|
Mortgage |
|
|
Total |
|
|||||
2022 (1) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
2023 (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2026 (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thereafter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unamortized premiums (discounts), net |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Unamortized debt issuance costs, net |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
(1) |
We expect to repay the amounts maturing in the |
(2) |
Included in the 2024 maturities is the 2021 Global Facility that can be extended until 2025. |
(3) |
|
Financial Debt Covenants
Our senior notes, term loans and Credit Facilities outstanding at June 30, 2022 were subject to certain financial covenants under their related documents. At June 30, 2022, we were in compliance with all of our financial debt covenants.
Guarantee of Finance Subsidiary Debt
We have finance subsidiaries as part of our operations in Europe (Prologis Euro Finance LLC), Japan (Prologis Yen Finance LLC) and the U.K. (Prologis Sterling Finance LLC) in order to mitigate our foreign currency risk by borrowing in the currencies in which we invest. These entities are
NOTE 6. NONCONTROLLING INTERESTS
Prologis, L.P.
We report noncontrolling interests related to several entities we consolidate but of which we do not own 100% of the equity. These entities include two real estate partnerships that have issued limited partnership units to third parties. Depending on the specific partnership agreements, these limited partnership units are redeemable for cash or, at our option, shares of the Parent’s common stock, generally at a rate of
Prologis, Inc.
The noncontrolling interests of the Parent include the noncontrolling interests described above for the OP, as well as the limited partnership units in the OP that are not owned by the Parent. The outstanding limited partnership units receive quarterly cash distributions equal to the quarterly dividends paid on our common stock pursuant to the terms of the applicable partnership agreements.
17
The following table summarizes these entities (dollars in thousands):
|
Our Ownership Percentage |
|
|
Noncontrolling Interests |
|
|
Total Assets |
|
|
Total Liabilities |
|
||||||||||||||||||||
|
Jun 30, 2022 |
|
|
Dec 31, 2021 |
|
|
Jun 30, 2022 |
|
|
Dec 31, 2021 |
|
|
Jun 30, 2022 |
|
|
Dec 31, 2021 |
|
|
Jun 30, 2022 |
|
|
Dec 31, 2021 |
|
||||||||
Prologis U.S. Logistics Venture |
|
|
% |
|
|
|
% |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Other consolidated entities (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Prologis, L.P. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited partners in Prologis, L.P. (2)(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Prologis, Inc. |
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Includes |
(2) |
We had |
(3) |
There were limited partnership units in the OP, excluding the Class A Units, that were exchangeable into cash or, at our option, |
NOTE 7. LONG-TERM COMPENSATION
Equity-Based Compensation Plans and Programs
Prologis Outperformance Plan (“POP”)
We have allocated participation points or a percentage of the compensation pool to participants under our POP corresponding to
We granted participation points for the 2022 – 2024 performance period in January 2022, with a fair value of $
The Outperformance Hurdle was met for the 2019 – 2021 performance period, which resulted in awards of $
Other Equity-Based Compensation Plans and Programs
Our other equity-based compensation plans and programs include (i) the Prologis Promote Plan (“PPP”); (ii) the annual long-term incentive (“LTI”) equity award program (“Annual LTI Award”); and (iii) the annual bonus exchange program. Awards under these plans and programs may be issued in the form of restricted stock units (“RSUs”) or LTIP Units at the participant’s election. RSUs and LTIP Units are valued based on the market price of the Parent’s common stock on the date the award is granted and the grant date value is charged to compensation expense over the service period.
18
Summary of Award Activity
RSUs
The following table summarizes the activity for RSUs for the six months ended June 30, 2022 (units in thousands):
|
|
|
|
|
|
Weighted Average |
|
|
|
|
Unvested RSUs |
|
|
Grant Date Fair Value |
|
||
Balance at January 1, 2022 |
|
|
|
|
|
$ |
|
|
Granted |
|
|
|
|
|
|
|
|
Vested and distributed |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Balance at June 30, 2022 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
LTIP Units
The following table summarizes the activity for LTIP Units for the six months ended June 30, 2022 (units in thousands):
|
|
Unvested |
|
|
Weighted Average |
|
||
|
|
LTIP Units |
|
|
Grant Date Fair Value |
|
||
Balance at January 1, 2022 |
|
|
|
|
|
$ |
|
|
Granted |
|
|
|
|
|
|
|
|
Vested LTIP Units |
|
|
( |
) |
|
|
|
|
Balance at June 30, 2022 |
|
|
|
|
|
$ |
|
|
NOTE 8. EARNINGS PER COMMON SHARE OR UNIT
We determine basic earnings per share or unit based on the weighted average number of shares of common stock or units outstanding during the period. We compute diluted earnings per share or unit based on the weighted average number of shares or units outstanding combined with the incremental weighted average effect from all outstanding potentially dilutive instruments.
The computation of our basic and diluted earnings per share and unit was as follows (in thousands, except per share and unit amounts):
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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Prologis, Inc. |
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2022 |
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2021 |
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2022 |
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2021 |
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Net earnings attributable to common stockholders – Basic |
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$ |
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$ |
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$ |
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$ |
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Net earnings attributable to exchangeable limited partnership units (1) |
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Adjusted net earnings attributable to common stockholders – Diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average common shares outstanding – Basic |
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Incremental weighted average effect on exchange of limited partnership units (1) |
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Incremental weighted average effect of equity awards |
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Weighted average common shares outstanding – Diluted (2) |
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Net earnings per share attributable to common stockholders: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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19
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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Prologis, L.P. |
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2022 |
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2021 |
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2022 |
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2021 |
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Net earnings attributable to common unitholders |
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$ |
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$ |
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$ |
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$ |
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Net earnings attributable to Class A Units |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Net earnings attributable to common unitholders – Basic |
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Net earnings attributable to Class A Units |
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Net earnings attributable to exchangeable other limited partnership units |
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Adjusted net earnings attributable to common unitholders – Diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average common partnership units outstanding – Basic |
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Incremental weighted average effect on exchange of Class A Units |
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Incremental weighted average effect on exchange of other limited partnership units |
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Incremental weighted average effect of equity awards of Prologis, Inc. |
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Weighted average common units outstanding – Diluted (2) |
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Net earnings per unit attributable to common unitholders: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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(1) |
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(2) |
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Class A Units |
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Other limited partnership units |
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Equity awards |
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Prologis, L.P. |
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Common limited partnership units |
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