Item 1. Financial Statements

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Item 1. Financial Statements

PROLOGIS, INC.

CONSOLIDATED BA****LANCE SHEETS

(Unaudited)

(In thousands, except per share data)



	March 31, 2024			December 31, 2023
ASSETS
Investments in real estate properties	$	89,427,505		$	88,666,575
Less accumulated depreciation		11,430,899			10,931,485
Net investments in real estate properties		77,996,606			77,735,090
Investments in and advances to unconsolidated entities		9,691,101			9,543,970
Assets held for sale or contribution		382,793			461,657
Net investments in real estate		88,070,500			87,740,717

Cash and cash equivalents		500,589			530,388
Other assets		4,739,221			4,749,735
Total assets	$	93,310,310		$	93,020,840

LIABILITIES AND EQUITY
Liabilities:
Debt	$	29,557,667		$	29,000,501
Accounts payable and accrued expenses		1,752,485			1,766,018
Other liabilities		4,203,040			4,430,601
Total liabilities		35,513,192			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 March 31, 2024 and December 31, 2023		63,948			63,948
Common stock; $0.01 par value; 925,790 shares and 924,391 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		9,258			9,244
Additional paid-in capital		54,336,001			54,249,801
Accumulated other comprehensive loss		(285,395	)		(514,201	)
Distributions in excess of net earnings		(933,159	)		(627,068	)
Total Prologis, Inc. stockholders’ equity		53,190,653			53,181,724
Noncontrolling interests		4,606,465			4,641,996
Total equity		57,797,118			57,823,720
Total liabilities and equity	$	93,310,310		$	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
	March 31,
	2024			2023
Revenues:
Rental	$	1,827,658		$	1,633,770
Strategic capital		128,412			134,701
Development management and other		551			116
Total revenues		1,956,621			1,768,587
Expenses:
Rental		454,257			412,554
Strategic capital		78,811			71,709
General and administrative		111,291			99,777
Depreciation and amortization		637,505			602,367
Other		12,244			7,184
Total expenses		1,294,108			1,193,591

Operating income before gains on real estate transactions, net		662,513			574,996
Gains on dispositions of development properties and land, net		40,308			-
Gains on other dispositions of investments in real estate, net		17,534			4,047
Operating income		720,355			579,043

Other income (expense):
Earnings from unconsolidated entities, net		72,472			75,779
Interest expense		(193,320	)		(136,011	)
Foreign currency, derivative and other gains and other income, net		63,564			8,614
Gains on early extinguishment of debt, net		536			3,275
Total other expense		(56,748	)		(48,343	)
Earnings before income taxes		663,607			530,700
Income tax expense		(32,800	)		(32,071	)
Consolidated net earnings		630,807			498,629
Less net earnings attributable to noncontrolling interests		45,092			34,006
Net earnings attributable to controlling interests		585,715			464,623
Less preferred stock dividends		1,452			1,453
Net earnings attributable to common stockholders	$	584,263		$	463,170

Weighted average common shares outstanding – Basic		925,322			923,888
Weighted average common shares outstanding – Diluted		953,912			951,624

Net earnings per share attributable to common stockholders – Basic	$	0.63		$	0.50
Net earnings per share attributable to common stockholders – Diluted	$	0.63		$	0.50

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

Index

PROLOGIS, INC.

CONSOLIDATED STATEMENTS OF CO****MPREHENSIVE INCOME

(Unaudited)

(In thousands)


	Three Months Ended
	March 31,
	2024			2023
Consolidated net earnings	$	630,807		$	498,629
Other comprehensive income:
Foreign currency translation gains (losses), net		208,972			(28,101	)
Unrealized gains (losses) on derivative contracts, net		24,836			(25,853	)
Comprehensive income		864,615			444,675
Net earnings attributable to noncontrolling interests		(45,092	)		(34,006	)
Other comprehensive loss (income) attributable to noncontrolling interests		(5,002	)		1,139
Comprehensive income attributable to common stockholders	$	814,521		$	411,808

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

Index

PROLOGIS, INC.

CON****SOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands)

Three Months Ended March 31, 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			Income (Loss)			Earnings			Interests			Equity
Balance at January 1, 2024	$	63,948		924,391	$	9,244	$	54,249,801		$	(514,201	)	$	(627,068	)	$	4,641,996		$	57,823,720
Consolidated net earnings		-		-		-		-			-			585,715			45,092			630,807
Effect of equity compensation plans		-		318		3		15,101			-			-			54,833			69,937
Capital contributions		-		-		-		-			-			-			1,270			1,270
Redemption of noncontrolling interests		-		1,081		11		62,020			-			-			(62,277	)		(246	)
Foreign currency translation gains, net		-		-		-		-			204,561			-			4,411			208,972
Unrealized gains on derivative contracts, net		-		-		-		-			24,245			-			591			24,836
Reallocation of equity		-		-		-		9,088			-			-			(9,088	)		-
Dividends ($0.96 per common share) and other distributions		-		-		-		(9	)		-			(891,806	)		(70,363	)		(962,178	)
Balance at March 31, 2024	$	63,948		925,790	$	9,258	$	54,336,001		$	(285,395	)	$	(933,159	)	$	4,606,465		$	57,797,118


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

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

Index

PROLOGIS, INC.

CONSOL****IDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Three Months Ended
	March 31,
	2024			2023
Operating activities:
Consolidated net earnings	$	630,807		$	498,629
Adjustments to reconcile net earnings to net cash provided by operating activities:
Straight-lined rents and amortization of above and below market leases		(158,960	)		(143,686	)
Equity-based compensation awards		67,237			62,906
Depreciation and amortization		637,505			602,367
Earnings from unconsolidated entities, net		(72,472	)		(75,779	)
Operating distributions from unconsolidated entities		126,653			135,081
Decrease in operating receivables from unconsolidated entities		44,841			51,164
Amortization of debt discounts and debt issuance costs, net		18,044			17,623
Gains on dispositions of development properties and land, net		(40,308	)		-
Gains on other dispositions of investments in real estate, net		(17,534	)		(4,047	)
Unrealized foreign currency and derivative losses (gains), net		(35,046	)		10,113
Gains on early extinguishment of debt, net		(536	)		(3,275	)
Deferred income tax expense		334			3,577
Decrease (increase) in other assets		(11,782	)		21,742
Decrease in accounts payable and accrued expenses and other liabilities		(133,323	)		(62,118	)
Net cash provided by operating activities		1,055,460			1,114,297
Investing activities:
Real estate development		(719,795	)		(936,921	)
Real estate acquisitions		(126,177	)		(51,866	)
Duke Transaction, net of cash acquired		-			(3,828	)
Tenant improvements and lease commissions on previously leased space		(104,306	)		(78,955	)
Property improvements		(30,200	)		(19,302	)
Proceeds from dispositions and contributions of real estate		199,538			54,903
Investments in and advances to unconsolidated entities		(314,842	)		(39,677	)
Return of investment from unconsolidated entities		1,360			21,169
Proceeds from the settlement of net investment hedges		10,357			5,323
Net cash used in investing activities		(1,084,065	)		(1,049,154	)
Financing activities:
Dividends paid on common and preferred stock		(891,806	)		(806,505	)
Noncontrolling interests contributions		1,270			-
Noncontrolling interests distributions		(70,363	)		(58,653	)
Settlement of noncontrolling interests		(246	)		(42,269	)
Tax paid with shares withheld		(21,720	)		(18,690	)
Debt and equity issuance costs paid		(13,073	)		(17,868	)
Net proceeds from (payments on) credit facilities		53,964			(1,337,857	)
Repurchase of and payments on debt		(913,935	)		(90,793	)
Proceeds from the issuance of debt		1,858,297			2,545,042
Net cash provided by financing activities		2,388			172,407

Effect of foreign currency exchange rate changes on cash		(3,582	)		6,468
Net increase (decrease) in cash and cash equivalents		(29,799	)		244,018
Cash and cash equivalents, beginning of period		530,388			278,483
Cash and cash equivalents, end of period	$	500,589		$	522,501

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.

Index

PROLOGIS, L.P.

CONS****OLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)



	March 31, 2024		December 31, 2023
ASSETS
Investments in real estate properties	$	89,427,505	$	88,666,575
Less accumulated depreciation		11,430,899		10,931,485
Net investments in real estate properties		77,996,606		77,735,090
Investments in and advances to unconsolidated entities		9,691,101		9,543,970
Assets held for sale or contribution		382,793		461,657
Net investments in real estate		88,070,500		87,740,717

Cash and cash equivalents		500,589		530,388
Other assets		4,739,221		4,749,735
Total assets	$	93,310,310	$	93,020,840

LIABILITIES AND CAPITAL
Liabilities:
Debt	$	29,557,667	$	29,000,501
Accounts payable and accrued expenses		1,752,485		1,766,018
Other liabilities		4,203,040		4,430,601
Total liabilities		35,513,192		35,197,120

Capital:
Partners’ capital:
General partner – preferred		63,948		63,948
General partner – common		53,126,705		53,117,776
Limited partners – common		863,303		848,160
Limited partners – Class A common		432,386		469,561
Total partners’ capital		54,486,342		54,499,445
Noncontrolling interests		3,310,776		3,324,275
Total capital		57,797,118		57,823,720
Total liabilities and capital	$	93,310,310	$	93,020,840

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

Index

PROLOGIS, L.P.

CONSOLIDATED STAT****EMENTS OF INCOME

(Unaudited)

(In thousands, except per unit amounts)


	Three Months Ended
	March 31,
	2024			2023
Revenues:
Rental	$	1,827,658		$	1,633,770
Strategic capital		128,412			134,701
Development management and other		551			116
Total revenues		1,956,621			1,768,587
Expenses:
Rental		454,257			412,554
Strategic capital		78,811			71,709
General and administrative		111,291			99,777
Depreciation and amortization		637,505			602,367
Other		12,244			7,184
Total expenses		1,294,108			1,193,591

Operating income before gains on real estate transactions, net		662,513			574,996
Gains on dispositions of development properties and land, net		40,308			-
Gains on other dispositions of investments in real estate, net		17,534			4,047
Operating income		720,355			579,043

Other income (expense):
Earnings from unconsolidated entities, net		72,472			75,779
Interest expense		(193,320	)		(136,011	)
Foreign currency, derivative and other gains and other income, net		63,564			8,614
Gains on early extinguishment of debt, net		536			3,275
Total other expense		(56,748	)		(48,343	)
Earnings before income taxes		663,607			530,700
Income tax expense		(32,800	)		(32,071	)
Consolidated net earnings		630,807			498,629
Less net earnings attributable to noncontrolling interests		30,308			22,357
Net earnings attributable to controlling interests		600,499			476,272
Less preferred unit distributions		1,452			1,453
Net earnings attributable to common unitholders	$	599,047		$	474,819

Weighted average common units outstanding – Basic		940,608			939,054
Weighted average common units outstanding – Diluted		953,912			951,624

Net earnings per unit attributable to common unitholders – Basic	$	0.63		$	0.50
Net earnings per unit attributable to common unitholders – Diluted	$	0.63		$	0.50

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

Index

PROLOGIS, L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)


	Three Months Ended
	March 31,
	2024			2023
Consolidated net earnings	$	630,807		$	498,629
Other comprehensive income:
Foreign currency translation gains (losses), net		208,972			(28,101	)
Unrealized gains (losses) on derivative contracts, net		24,836			(25,853	)
Comprehensive income		864,615			444,675
Net earnings attributable to noncontrolling interests		(30,308	)		(22,357	)
Other comprehensive loss (income) attributable to noncontrolling interests		578			(187	)
Comprehensive income attributable to common unitholders	$	834,885		$	422,131

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

Index

PROLOGIS, L.P.

CONSOLI****DATED STATEMENTS OF CAPITAL

(Unaudited)

(In thousands)

Three Months Ended March 31, 2024 and 2023


	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, 2024		1,279	$	63,948		924,391	$	53,117,776			14,760		$	848,160			8,595		$	469,561		$	3,324,275		$	57,823,720
Consolidated net earnings		-		-		-		585,715			-			9,652			-			5,132			30,308			630,807
Effect of equity compensation plans		-		-		318		15,104			708			54,833			-			-			-			69,937
Capital contributions		-		-		-		-			-			-			-			-			1,270			1,270
Redemption of limited partners units		-		-		1,081		62,031			(424	)		(23,926	)		(700	)		(38,351	)		-			(246	)
Foreign currency translation gains (losses), net		-		-		-		204,561			-			3,324			-			1,665			(578	)		208,972
Unrealized gains on derivative contracts, net		-		-		-		24,245			-			394			-			197			-			24,836
Reallocation of capital		-		-		-		9,088			-			(8,828	)		-			(260	)		-			-
Distributions ($0.96 per common unit) and other		-		-		-		(891,815	)		-			(20,306	)		-			(5,558	)		(44,499	)		(962,178	)
Balance at March 31, 2024		1,279	$	63,948		925,790	$	53,126,705			15,044		$	863,303			7,895		$	432,386		$	3,310,776		$	57,797,118


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

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

Index

PROLOGIS, L.P.

CONSOLIDA****TED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Three Months Ended
	March 31,
	2024			2023
Operating activities:
Consolidated net earnings	$	630,807		$	498,629
Adjustments to reconcile net earnings to net cash provided by operating activities:
Straight-lined rents and amortization of above and below market leases		(158,960	)		(143,686	)
Equity-based compensation awards		67,237			62,906
Depreciation and amortization		637,505			602,367
Earnings from unconsolidated entities, net		(72,472	)		(75,779	)
Operating distributions from unconsolidated entities		126,653			135,081
Decrease in operating receivables from unconsolidated entities		44,841			51,164
Amortization of debt discounts and debt issuance costs, net		18,044			17,623
Gains on dispositions of development properties and land, net		(40,308	)		-
Gains on other dispositions of investments in real estate, net		(17,534	)		(4,047	)
Unrealized foreign currency and derivative losses (gains), net		(35,046	)		10,113
Gains on early extinguishment of debt, net		(536	)		(3,275	)
Deferred income tax expense		334			3,577
Decrease (increase) in other assets		(11,782	)		21,742
Decrease in accounts payable and accrued expenses and other liabilities		(133,323	)		(62,118	)
Net cash provided by operating activities		1,055,460			1,114,297
Investing activities:
Real estate development		(719,795	)		(936,921	)
Real estate acquisitions		(126,177	)		(51,866	)
Duke Transaction, net of cash acquired		-			(3,828	)
Tenant improvements and lease commissions on previously leased space		(104,306	)		(78,955	)
Property improvements		(30,200	)		(19,302	)
Proceeds from dispositions and contributions of real estate		199,538			54,903
Investments in and advances to unconsolidated entities		(314,842	)		(39,677	)
Return of investment from unconsolidated entities		1,360			21,169
Proceeds from the settlement of net investment hedges		10,357			5,323
Net cash used in investing activities		(1,084,065	)		(1,049,154	)
Financing activities:
Distributions paid on common and preferred units		(917,670	)		(829,490	)
Noncontrolling interests contributions		1,270			-
Noncontrolling interests distributions		(44,499	)		(35,668	)
Redemption of common limited partnership units		(246	)		(42,269	)
Tax paid with shares of the Parent withheld		(21,720	)		(18,690	)
Debt and equity issuance costs paid		(13,073	)		(17,868	)
Net proceeds from (payments on) credit facilities		53,964			(1,337,857	)
Repurchase of and payments on debt		(913,935	)		(90,793	)
Proceeds from the issuance of debt		1,858,297			2,545,042
Net cash provided by financing activities		2,388			172,407

Effect of foreign currency exchange rate changes on cash		(3,582	)		6,468
Net increase (decrease) in cash and cash equivalents		(29,799	)		244,018
Cash and cash equivalents, beginning of period		530,388			278,483
Cash and cash equivalents, end of period	$	500,589		$	522,501

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.

Index

PROLOGIS, INC. AND PROLOGIS, L.P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. GENERAL

Business. Prologis, Inc. (or the “Parent”) commenced operations as a fully integrated real estate company in 1997, elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code” or “IRC”), and believes the current organization and method of operation will enable it to maintain its status as a REIT. The Parent is the general partner of Prologis, L.P. (or the “Operating Partnership” or “OP”). Through the 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 two operating business segments: Real Estate (Rental Operations and Development) and Strategic Capital. Our Real Estate Segment represents the ownership, leasing and development of logistics properties. Our Strategic Capital Segment represents the management of properties owned by our unconsolidated co-investment ventures and other ventures. See Note 10 for further discussion of our business segments. Unless otherwise indicated, the Notes to the Consolidated Financial Statements apply to both the Parent and the OP. The terms “the Company,” “Prologis,” “we,” “our” or “us” means the Parent and OP collectively.

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 March 31, 2024, the Parent owned a 97.62% common general partnership interest in the OP and substantially all of the preferred units in the OP. The remaining 2.38% common limited partnership interests, which include Class A common limited partnership units (“Class A Units”) in the OP, are owned by unaffiliated investors and certain current and former directors and officers of the Parent. Each partner’s percentage interest in the OP is determined based on the number of OP units held, including the number of OP units into which Class A Units are convertible, compared to total OP units outstanding at each period end and is used as the basis for the allocation of net income or loss to each partner. At the end of each reporting period, a capital adjustment is made in the OP to reflect the appropriate ownership interest for each of the common unitholders. These adjustments are reflected in the line items Reallocation of Equity in the Consolidated Statements of Equity of the Parent and Reallocation of Capital in the Consolidated Statements of Capital of the OP.

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, 2023, as filed with the SEC, and other public information.

Accounting Pronouncements.

New Accounting Standards Issued but not yet Adopted

Segment Reporting. In November 2023, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update (“ASU”) to improve reportable segments disclosure requirements. The ASU requires existing annual segment disclosures to also be disclosed on an interim basis, and also requires additional disclosures around significant segment expenses and disclosures to identify the title and position of the CODM. The standard is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We do not expect the standard to have a material impact on our Consolidated Financial Statements as we anticipate the primary change will be additional disclosures in Note 10.

Index

NOTE 2. REAL ESTATE

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


	Square Feet				Number of Buildings
	Mar 31,		Dec 31,		Mar 31,		Dec 31,		Mar 31,		Dec 31,
	2024		2023		2024		2023		2024		2023
Operating properties:
Buildings and improvements		635,249		630,955		2,974		2,960	$	53,099,926	$	52,626,191
Improved land										22,874,101		22,809,306
Development portfolio, including land costs:
Prestabilized		12,421		13,369		39		45		1,735,328		1,838,805
Properties under development		25,717		26,438		82		85		2,627,424		2,528,650
Land (1)										4,072,212		3,775,553
Other real estate investments (2)										5,018,514		5,088,070
Total investments in real estate properties										89,427,505		88,666,575
Less accumulated depreciation										11,430,899		10,931,485
Net investments in real estate properties									$	77,996,606	$	77,735,090

(1)

At March 31, 2024 and December 31, 2023, our land was comprised of 8,345 and 8,197 acres, respectively.

(2)

Included in other real estate investments were: (i) land parcels we own and lease to third parties; (ii) non-strategic real estate assets that we do not intend to operate long term; (iii) non-industrial real estate assets that we intend to redevelop as industrial properties or other higher use assets; and (iv) energy assets. Energy assets include solar panels, battery storage and mobility solutions.

Acquisitions

The following table summarizes our real estate acquisition activity (dollars and square feet in thousands):


	Three Months Ended March 31,
	2024		2023
Number of operating properties		-		-
Square feet		-		-
Acres of land		243		120
Acquisition cost of net investments in real estate, excluding other real estate investments	$	284,024	$	40,474

Acquisition cost of other real estate investments	$	167	$	6,185

Index

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 March 31,
	2024		2023
Dispositions of development properties and land, net (1)
Number of properties		1		-
Square feet		629		-
Net proceeds	$	136,789	$	-
Gains on dispositions of development properties and land, net	$	40,308	$	-

Other dispositions of investments in real estate, net
Number of properties		1		5
Square feet		196		360
Net proceeds	$	147,836	$	57,008
Gains on other dispositions of investments in real estate, net	$	17,534	$	4,047

(1)

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

Leases

We recognized lease right-of-use assets of $678.0 million and $683.7 million within Other Assets and lease liabilities of $593.8 million and $597.6 million within Other Liabilities, for land and office space leases in which we are the lessee, in the Consolidated Balance Sheets at March 31, 2024 and December 31, 2023, respectively.

Off-Balance Sheet Liabilities

We have issued performance and surety bonds, standby letters of credit and guarantees in connection with certain development and energy projects. At March 31, 2024 and December 31, 2023, we had $581.0 million and $498.5 million, respectively, outstanding under such arrangements.

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 generally account for using the equity method. We refer to our investments in both unconsolidated co-investment ventures and other ventures, collectively, as unconsolidated entities.

Index

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


	March 31,		December 31,
	2024		2023
Unconsolidated co-investment ventures	$	8,539,251	$	8,379,265
Other ventures		1,151,850		1,164,705
Total	$	9,691,101	$	9,543,970

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 March 31,
	2024		2023
Recurring fees	$	113,142	$	113,557
Transactional fees		12,244		15,080
Promote revenue		262		320
Total strategic capital revenues from unconsolidated co-investment ventures (1)	$	125,648	$	128,957

(1)

These amounts exclude strategic capital revenues from other ventures.

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:	Mar 31, 2024			Dec 31, 2023			Mar 31, 2024			Dec 31, 2023			Mar 31, 2024			Dec 31, 2023			Mar 31, 2024			Dec 31, 2023			Mar 31, 2024			Dec 31, 2023
Key property information:
Ventures		1			1			2			2			2			2			4			4			9			9
Operating properties		745			745			276			275			1,008			1,007			229			228			2,258			2,255
Square feet		126			126			65			65			223			223			95			94			509			508

Financial position:
Total assets ($)		12,359			11,884			4,654			4,106			23,173			23,504			9,685			10,226			49,871			49,720
Third-party debt ($)		4,903			4,185			914			915			5,746			5,804			3,808			3,983			15,371			14,887
Total liabilities ($)		5,605			4,930			982			997			7,792			7,849			4,207			4,429			18,586			18,205

Our investment balance ($) (2)		2,475			2,257			1,190			1,152			4,096			4,126			778			844			8,539			8,379
Our weighted average ownership (3)		28.8	%		27.3	%		38.8	%		39.3	%		32.2	%		31.9	%		15.2	%		15.2	%		28.8	%		28.1	%

	U.S.						Other Americas (1)						Europe						Asia						Total
Operating Information:	Mar 31, 2024			Mar 31, 2023			Mar 31, 2024			Mar 31, 2023			Mar 31, 2024			Mar 31, 2023			Mar 31, 2024			Mar 31, 2023			Mar 31, 2024			Mar 31, 2023
For the three months ended:
Total revenues ($)		353			324			120			103			462			414			160			165			1,095			1,006
Net earnings ($)		88			101			53			43			72			69			28			27			241			240

Our earnings from unconsolidated co-investment ventures, net ($)		26			27			18			16			24			21			5			4			73			68

(1)

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

(2)

Prologis’ investment balance is presented at our adjusted basis. The difference between our ownership interest of a venture’s equity and our investment balance at March 31, 2024 and December 31, 2023, 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 ($161.2 million and $199.9 million, respectively); and (iv) customer security deposits retained subsequent to property contributions to Nippon Prologis REIT, Inc. and Prologis Japan Core Logistics Fund.

(3)

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

Equity Commitments Related to Certain Unconsolidated Co-Investment Ventures

At March 31, 2024, our outstanding equity commitments were $347.3 million, primarily for Prologis China Logistics Venture. The equity commitments expire from 2024 to 2033 if they have not been previously called. Typically, equity commitments are used for future development and acquisitions in the unconsolidated co-investment ventures.

Index

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 March 31, 2024 and December 31, 2023. 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 in the Consolidated Balance Sheets 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):


	March 31, 2024		December 31, 2023
Number of operating properties		17		12
Square feet		3,940		3,469
Total assets held for sale or contribution	$	382,793	$	461,657
Total liabilities associated with assets held for sale or contribution – included in Other Liabilities	$	8,938	$	14,182

NOTE 5. DEBT

All debt is incurred by the OP or its consolidated subsidiaries. The following table summarizes our debt (dollars in thousands):


	March 31, 2024					December 31, 2023
	Weighted Average			Amount		Weighted Average		Amount
	Interest Rate (1)	Years (2)		Outstanding (3)		Interest Rate (1)	Years (2)	Outstanding (3)
Credit facilities	4.1%		3.0	$	1,031,266	5.9%	3.1	$	979,313
Senior notes	3.0%		10.2		26,500,864	2.9%	10.1		25,311,647
Term loans and unsecured other (4)	1.9%		4.1		1,737,132	2.8%	3.7		2,330,520
Secured mortgage	4.4%		4.1		288,405	3.9%	3.4		379,021
Total	3.0%		9.6	$	29,557,667	3.0%	9.3	$	29,000,501

(1)

The weighted average interest rates presented represent the effective interest rates (including amortization of debt issuance costs and noncash premiums or discounts) 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 years 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:


	March 31, 2024								December 31, 2023
	Weighted Average Interest Rate			Amount Outstanding		% of Total			Weighted Average Interest Rate			Amount Outstanding		% of Total
British pound sterling		2.1	%	$	1,292,368		4.4	%		2.1	%	$	1,299,628		4.5	%
Canadian dollar		5.1	%		1,123,875		3.8	%		5.0	%		829,886		2.9	%
Chinese renminbi		3.7	%		452,164		1.5	%		3.7	%		241,820		0.8	%
Euro		2.1	%		9,946,713		33.7	%		2.0	%		10,083,601		34.8	%
Japanese yen		1.0	%		3,106,411		10.5	%		1.0	%		3,085,970		10.6	%
U.S. dollar		4.0	%		13,636,136		46.1	%		4.1	%		13,459,596		46.4	%
Total		3.0	%	$	29,557,667		100.0	%		3.0	%	$	29,000,501		100.0	%

(4)

In February 2024, we extinguished a $500.0 million U.S. dollar term loan.

Index

Credit Facilities

The following table summarizes information about our available liquidity at March 31, 2024 (in millions):



Aggregate lender commitments
Credit facilities	$	6,405
Less:
Borrowings outstanding		1,031
Outstanding letters of credit		26
Current availability		5,348
Cash and cash equivalents		501
Total liquidity	$	5,849

We have two global senior credit facilities (the “2022 Global Facility” and "2023 Global Facility"), each with a borrowing capacity of $3.0 billion (subject to currency fluctuations). We may draw on both facilities in British pounds sterling, Canadian dollars, euro, Japanese yen, Mexican pesos and U.S. dollars on a revolving basis. The 2022 Global Facility is scheduled to initially mature in June 2026 and the 2023 Global Facility in June 2027; however, we can extend the maturity date for each facility by six months on two occasions, subject to the payment of extension fees. We also have the ability to increase each credit facility to $4.0 billion, subject to currency fluctuations and obtaining additional lender commitments.

We also have a Japanese yen revolver (the "Yen Credit Facility") with a borrowing capacity of ¥58.5 billion ($386.9 million at March 31, 2024). We have the ability to increase the borrowing capacity of the Yen Credit Facility to ¥75.0 billion ($496.1 million at March 31, 2024), subject to obtaining additional lender commitments. The Yen Credit Facility is initially scheduled to mature in August 2027; however, we may extend the maturity date for one year, subject to the payment of extension fees.

We refer to the 2022 Global Facility, the 2023 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.

Our Credit Facilities are utilized to support our cash needs for development and acquisition activities on a short-term basis. The original maturity of our borrowings under the Credit Facilities ranges from overnight to three months.

Commercial Paper Program ("CPP")

In March 2024, we established a CPP, under which we may issue, repay and re-issue short-term unsecured commercial paper notes (“CPNs”) denominated in U.S. dollars. The aggregate principal amount of CPNs outstanding under the CPP at any time cannot exceed $1.0 billion and the net proceeds of the CPNs are expected to be used for general corporate purposes. The maturities of the CPNs generally range from overnight to three months. The CPNs are issued under customary terms in the commercial paper market and are issued at a discount from par or, alternatively, can be issued at par and bear varying interest rates on a fixed or floating basis. At any point in time, we are required to maintain available commitments under our Credit Facilities in an amount at least equal to the amount of the CPNs outstanding. At March 31, 2024, we had no issuances or repayments under the CPP.

Senior Notes

The following table summarizes the issuances of senior notes during the three months ended March 31, 2024 (principal in thousands):


	Aggregate Principal				Issuance Date Weighted Average
Issuance Date	Borrowing Currency		USD (1)		Interest Rate	Years	Maturity Dates
January	$	1,250,000	$	1,250,000	5.1%	17.3	March 2034 – 2054
February	CN¥	1,500,000	$	211,024	3.5%	3.0	February 2027
March	C$	550,000	$	405,147	4.7%	5.0	March 2029
Total			$	1,866,171	4.8%	13.0

(1)

The exchange rate used to calculate into U.S. dollars was the spot rate at the settlement date.

Index

Long-Term Debt Maturities

Scheduled principal payments due on our debt for the remainder of 2024 and for each year through the period ended December 31, 2028, and thereafter were as follows at March 31, 2024 (in thousands):


	Unsecured
	Credit		Senior			Term Loans			Secured
Maturity	Facilities		Notes			and Other			Mortgage			Total
2024 (1)(2)	$	-	$	-		$	101,480		$	5,352		$	106,832
2025 (1)(3)		-		33,071			221,636			178,913			433,620
2026 (4)		329,744		1,305,718			703,204			3,980			2,342,646
2027 (5)		701,522		1,930,348			47,237			4,156			2,683,263
2028		-		2,553,897			97,891			3,041			2,654,829
Thereafter		-		21,265,036			569,727			86,094			21,920,857
Subtotal		1,031,266		27,088,070			1,741,175			281,536			30,142,047
Unamortized premiums (discounts), net		-		(465,706	)		-			7,752			(457,954	)
Unamortized debt issuance costs, net		-		(121,500	)		(4,043	)		(883	)		(126,426	)
Total	$	1,031,266	$	26,500,864		$	1,737,132		$	288,405		$	29,557,667

(1)

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

(2)

Included in the 2024 maturities was a Chinese term loan ($101.5 million at March 31, 2024) that can be extended until 2026, subject to the prevailing interest rate at the time of extension.

(3)

Included in the 2025 maturities was a Canadian term loan ($221.1 million at March 31, 2024) that can be extended until 2027.

(4)

Included in the 2026 maturities was the 2022 Global Facility ($329.7 million at March 31, 2024) that can be extended until 2027.

(5)

Included in the 2027 maturities were the 2023 Global Facility and Yen Credit Facility ($483.3 million and $218.3 million, respectively at March 31, 2024) that can be extended until 2028.

Financial Debt Covenants

Our senior notes, term loans and Credit Facilities outstanding at March 31, 2024 were subject to certain financial covenants under their related documents. At March 31, 2024, we were in compliance with all of our financial debt covenants.

Guarantee of Finance Subsidiary Debt

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

NOTE 6. NONCONTROLLING INTERESTS

Prologis, L.P.

We report noncontrolling interests related to several entities we consolidate but of which we do not own 100% of the equity. These entities include two real estate partnerships that have issued limited partnership units to third parties. Depending on the specific partnership agreements, these limited partnership units are redeemable for cash or, at our option, shares of the Parent’s common stock, generally at a rate of one share of common stock to one limited partnership unit. We also consolidate certain entities in which we do not own 100% of the equity but the equity of these entities is not exchangeable into our common stock.

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.

Index

The following table summarizes these entities (dollars in thousands):


	Our Ownership Percentage						Noncontrolling Interests				Total Assets				Total Liabilities
	Mar 31, 2024			Dec 31, 2023			Mar 31, 2024		Dec 31, 2023		Mar 31, 2024		Dec 31, 2023		Mar 31, 2024		Dec 31, 2023
Prologis U.S. Logistics Venture		55.0	%		55.0	%	$	3,132,913	$	3,147,790	$	7,097,731	$	7,142,889	$	144,152	$	156,303
Other consolidated entities (1)	various			various				177,863		176,485		2,438,303		2,369,959		340,330		333,114
Prologis, L.P.								3,310,776		3,324,275		9,536,034		9,512,848		484,482		489,417
Limited partners in Prologis, L.P. (2)(3)								1,295,689		1,317,721		-		-		-		-
Prologis, Inc.							$	4,606,465	$	4,641,996	$	9,536,034	$	9,512,848	$	484,482	$	489,417

(1)

Includes two partnerships that have issued limited partnership units to third parties, as discussed above, along with various other consolidated entities. The limited partnership units outstanding at March 31, 2024 and December 31, 2023 were exchangeable into cash or, at our option, 0.3 million shares of the Parent’s common stock.

(2)

We had 7.9 million and 8.6 million Class A Units at March 31, 2024 and December 31, 2023, that were convertible into 7.5 million and 8.2 million limited partnership units of the OP, respectively.

(3)

There were limited partnership units in the OP, excluding the Class A Units, that were exchangeable into cash or, at our option, 8.9 million and 9.1 million shares of the Parent’s common stock, at March 31, 2024 and December 31, 2023, respectively. Also included are the vested OP Long-Term Incentive Plan Units (“LTIP Units”) associated with our long-term compensation plans of 6.1 million and 5.7 million shares of the Parent’s common stock at March 31, 2024 and December 31, 2023, respectively. See further discussion of LTIP Units in Note 7.

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 three-year performance periods beginning every January 1. The fair value of the awards is measured at the grant date and amortized over the period from the grant date to the date at which the awards vest, which ranges from three to ten years. The performance hurdle (“Outperformance Hurdle”) at the end of the initial three-year performance period requires our three-year compound annualized total stockholder return (“TSR”) to exceed a threshold set at the three-year compound annualized TSR for the Morgan Stanley Capital International US REIT Index (the "Index") for the same period plus 100 basis points. If the Outperformance Hurdle is met, a compensation pool will be formed equal to 3.0% of the excess value created, subject to a maximum as defined by each performance period. POP awards cannot be paid at a time when we meet the outperformance hurdle yet our absolute TSR is negative. If after seven years our absolute TSR has not been positive, the awards will be forfeited.

The Outperformance Hurdle was met for the 2021 – 2023 performance period and the absolute maximum cap was earned and awarded in January 2024. The tables below include POP awards that were earned but are unvested, while any vested awards are reflected within the Consolidated Statements of Equity and Capital. The initial grant date fair value derived using a Monte Carlo valuation model was used in determining the grant date fair value per unit in the tables below.

Commencing in 2024, the named executive officers ("NEOs") and certain select employees will receive performance stock units ("PSUs") discussed below and no new awards will be made to these individuals under the POP. We granted participation points for the 2024 – 2026 performance period in January 2024, with a fair value of $19.0 million using a Monte Carlo valuation model that assumed a risk-free interest rate of 4.2% and an expected volatility of 27.0% for Prologis and 20.0% for the Index. The 2024 – 2026 performance period has an absolute maximum cap of $60.0 million. If an award is earned at the end of the initial three-year performance period, then 20.0% of the POP award is paid at the end of the initial performance period and the remaining 80.0% is subject to additional seven-year cliff vesting. The 20.0% that is paid at the end of the initial three-year performance period is subject to an additional three-year holding requirement. Awards are in the form of common stock, restricted stock units, POP LTIP Units and LTIP Units.

Performance Stock Unit Plan ("PSU Plan")

On January 16, 2024, PSUs were granted under the Company's 2020 Long-Term Incentive Plan and will be settled in equity at the end of a three-year performance period, if applicable performance hurdles are met. Such hurdles are based on a performance scale of Prologis’ percentile ranking in the Index for a three-year performance period. Prologis must perform at the 55th percentile to earn a target award of 100.0%. The award is capped at 200.0% of target for performance at or above the 85th percentile. There is no payout in the event Prologis’ performance is below the 35th percentile and only 50.0% of target is earned at the 35th percentile. The fair value of the awards is measured at the grant date and amortized over the period from the grant date to the date at which the awards vest, which ranges from three to five years.

Index

We granted PSUs for the 2024 – 2026 performance period in January 2024, with a fair value of $30.6 million using a Monte Carlo valuation model. If an award is earned at the end of the initial three-year performance period, one-third of the award vests at the end of the performance period and the remaining award vests equally one and two years after the award is earned. The award is subject to an additional three-year holding requirement. Awards are in the form of common stock, restricted stock units (“RSUs”) and LTIP Units.

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 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.

Summary of Award Activity

RSUs

The following table summarizes the activity for RSUs for the three months ended March 31, 2024 (units in thousands):


				Weighted Average
	Unvested RSUs			Grant Date Fair Value
Balance at January 1, 2024		2,097		$	98.23
Granted		758			110.61
Vested and distributed		(437	)		115.58
Forfeited		(15	)		125.42
Balance at March 31, 2024		2,403		$	98.81

LTIP Units

The following table summarizes the activity for LTIP Units for the three months ended March 31, 2024 (units in thousands):


	Unvested			Weighted Average
	LTIP Units			Grant Date Fair Value
Balance at January 1, 2024		5,379		$	76.72
Granted		1,142			96.45
Vested LTIP Units		(600	)		119.06
Forfeited		(4	)		128.83
Balance at March 31, 2024		5,917		$	76.20

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):


	Three Months Ended
	March 31,
Prologis, Inc.	2024		2023
Net earnings attributable to common stockholders – Basic	$	584,263	$	463,170
Net earnings attributable to exchangeable limited partnership units (1)		14,852		11,743
Adjusted net earnings attributable to common stockholders – Diluted	$	599,115	$	474,913

Weighted average common shares outstanding – Basic		925,322		923,888
Incremental weighted average effect on exchange of limited partnership units (1)		23,555		23,535
Incremental weighted average effect of equity awards		5,035		4,201
Weighted average common shares outstanding – Diluted (2)		953,912		951,624

Net earnings per share attributable to common stockholders:
Basic	$	0.63	$	0.50
Diluted	$	0.63	$	0.50

Index


	Three Months Ended
	March 31,
Prologis, L.P.	2024			2023
Net earnings attributable to common unitholders	$	599,047		$	474,819
Net earnings attributable to Class A Units		(5,132	)		(4,045	)
Net earnings attributable to common unitholders – Basic		593,915			470,774
Net earnings attributable to Class A Units		5,132			4,045
Net earnings attributable to exchangeable other limited partnership units		68			94
Adjusted net earnings attributable to common unitholders – Diluted	$	599,115		$	474,913

Weighted average common partnership units outstanding – Basic		940,608			939,054
Incremental weighted average effect on exchange of Class A Units		8,128			8,070
Incremental weighted average effect on exchange of other limited partnership units		141			299
Incremental weighted average effect of equity awards of Prologis, Inc.		5,035			4,201
Weighted average common units outstanding – Diluted (2)		953,912			951,624

Net earnings per unit attributable to common unitholders:
Basic	$	0.63		$	0.50
Diluted	$	0.63		$	0.50

(1)

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

(2)

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


	Three Months Ended
	March 31,
	2024		2023
Class A Units		8,128		8,070
Other limited partnership units		299		299
Equity awards		8,963		7,773
Prologis, L.P.		17,390		16,142
Common limited partnership units		15,286		15,166
Prologis, Inc.		32,676		31,308

Index

NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Derivative Financial Instruments

In the normal course of business, our operations are exposed to market risks, including the effect of changes in foreign currency exchange rates and interest rates. We may enter into derivative financial instruments to offset these underlying market risks. There have been no significant changes in our policy and strategy from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

The following table presents the fair value of our derivative financial instruments recognized within Other Assets and Other Liabilities in the Consolidated Balance Sheets (in thousands):


	March 31, 2024				December 31, 2023
	Asset		Liability		Asset		Liability
Undesignated derivatives
Foreign currency contracts
Forwards
Brazilian real	$	-	$	-	$	-	$	291
British pound sterling		8,926		7,453		9,608		9,862
Canadian dollar		6,916		183		4,480		1,225
Chinese renminbi		2,158		-		1,630		50
Euro		22,522		3,232		19,252		8,229
Japanese yen		61,338		133		45,149		589
Swedish krona		4,617		633		3,304		2,279
Options
Mexican peso		1,306		-		1,263		-

Designated derivatives
Foreign currency contracts
Net investment hedges
British pound sterling		976		4,317		1,759		7,030
Canadian dollar		68		1,045		756		5,608

Interest rate contracts
Cash flow hedges
Euro		-		20,835		118		27,034
U.S. dollar		-		-		-		31,964
Total fair value of derivatives	$	108,827	$	37,831	$	87,319	$	94,161

Undesignated Derivative Financial Instruments

Foreign Currency Contracts

The following table summarizes the activity of our undesignated foreign currency contracts for the three months ended March 31 (in millions, except for weighted average forward rates and number of active contracts):


	2024																		2023
	CAD			EUR			GBP			JPY			Other			Total			CAD			EUR			GBP			JPY			Other			Total
Notional amounts at January 1 ($)		213			524			442			384			56			1,619			283			601			349			331			81			1,645
New contracts ($)		51			88			46			59			8			252			6			9			49			27			41			132
Matured, expired or settled contracts ($)		(7	)		(25	)		(39	)		(61	)		(9	)		(141	)		(54	)		(43	)		(22	)		(21	)		(7	)		(147	)
Notional amounts at March 31 ($)		257			587			449			382			55			1,730			235			567			376			337			115			1,630

Weighted average forward rate at March 31		1.30			1.16			1.27			118.16									1.29			1.18			1.30			110.58
Active contracts at March 31		92			84			96			98									88			94			100			97

Index

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


	Three Months Ended March 31,
	2024		2023
Exercised contracts		45		52
Realized gains on the matured, expired or settled contracts	$	18	$	14
Unrealized gains (losses) on the change in fair value of outstanding contracts	$	29	$	(14	)

Designated Derivative Financial Instruments

Changes in the fair value of derivatives that are designated as net investment hedges ("NIHs") of our foreign operations and cash flow hedges ("CFHs") are recorded in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Balance Sheets and reflected within the AOCI/L table below.

Foreign Currency Contracts

The following table summarizes the activity of our foreign currency contracts designated as NIHs for the three months ended March 31 (in millions, except for weighted average forward rates and number of active contracts):


	2024									2023
	CAD			GBP			Total			CAD			CNH		GBP		Total
Notional amounts at January 1 ($)		516			432			948			534			-		440		974
New contracts ($)		47			92			139			119			100		-		219
Matured, expired or settled contracts ($)		(400	)		(93	)		(493	)		(124	)		-		-		(124	)
Notional amounts at March 31 ($)		163			431			594			529			100		440		1,069

Weighted average forward rate at March 31		1.36			1.25						1.30			6.72		1.28
Active contracts at March 31		2			4						6			1		4

Interest Rate Contracts

The following table summarizes the activity of our interest rate contracts designated as CFHs for the three months ended March 31 (in millions):


	2024									2023
	EUR			USD			Total			EUR			USD			Total
Notional amounts at January 1 ($)		700			550			1,250			447			150			597
New contracts ($)		-			-			-			434			550			984
Matured, expired or settled contracts ($)		(171	)		(550	)		(721	)		(709	)		(700	)		(1,409	)
Notional amounts at March 31 ($)		529			-			529			172			-			172

Designated Nonderivative Financial Instruments

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


	March 31, 2024		December 31, 2023
British pound sterling	$	1,307	$	1,305
Canadian dollar	$	369	$	373

Index

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



	Three Months Ended March 31,
	2024		2023
Unrealized gains (losses) on the unhedged portion	$	10	$	(4	)

Accumulated Other Comprehensive Income (Loss) ("AOCI/L")

The change in AOCI/L in the Consolidated Statements of Equity during the periods presented was due to the following: i) the currency translation adjustments ("CTA") that we recognize due to the translation of the financial statements of our consolidated subsidiaries, whose functional currency is not the U.S. dollar, into U.S. dollars; and ii) the change in the fair value of the effective portion of our derivative financial instruments that have been designated as NIHs and CFHs and the translation of the hedged portion of our debt.

The following tables presents these changes in AOCI/L (in thousands):


	Unrealized gains (losses) on CFHs (1)			Our share of derivatives from unconsolidated entities		Derivative NIHs		Debt designated as nonderivative NIHs (2)		CTA			Total AOCI/L
Balance at January 1, 2024	$	(45,744	)	$	8,414	$	310,526	$	254,102	$	(1,041,499	)	$	(514,201	)
Other comprehensive income (loss), net		19,096			5,149		16,162		14,369		174,030			228,806
Balance at March 31, 2024	$	(26,648	)	$	13,563	$	326,688	$	268,471	$	(867,469	)	$	(285,395	)


	Unrealized gains (losses) on CFHs			Our share of derivatives from unconsolidated entities			Derivative NIHs			Debt designated as nonderivative NIHs (2)			CTA			Total AOCI/L
Balance at January 1, 2023	$	30,545		$	22,584		$	332,973		$	329,983		$	(1,159,694	)	$	(443,609	)
Other comprehensive income (loss), net		(18,693	)		(6,527	)		(8,163	)		(41,500	)		22,068			(52,815	)
Balance at March 31, 2023	$	11,852		$	16,057		$	324,810		$	288,483		$	(1,137,626	)	$	(496,424	)

(1)

We estimate an additional expense of $3.4 million will be reclassified to Interest Expense in the Consolidated Statements of Income over the next 12 months from March 31, 2024, due to the amortization of settled derivatives designated as cash flow hedges.

(2)

Reclassification of amounts out of AOCI/L due to the remeasurement of the unhedged portion of our euro-denominated and Chinese renminbi-denominated debt and accrued interest is included herein.

Fair Value Measurements

There have been no significant changes in our policy from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Fair Value Measurements on a Recurring Basis

At March 31, 2024 and December 31, 2023, other than the derivatives discussed previously, we had no significant financial assets or financial liabilities that were measured at fair value on a recurring basis in the Consolidated Financial Statements. All of our derivatives held at March 31, 2024 and December 31, 2023, were classified as Level 2 of the fair value hierarchy.

Fair Value Measurements on Nonrecurring Basis

Acquired properties and assets we expect to sell or contribute are significant nonfinancial assets that met the criteria to be measured at fair value on a nonrecurring basis. At March 31, 2024 and December 31, 2023, we estimated the fair value of our properties using Level 2 or Level 3 inputs from the fair value hierarchy. See more information on our acquired properties in Note 2 and assets held for sale or contribution in Note 4.

Index

Fair Value of Financial Instruments

At March 31, 2024 and December 31, 2023, the carrying amounts of certain financial instruments, including cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses were representative of their fair values.

The differences in the fair value of our debt from the carrying value in the table below were the result of differences in interest rates or borrowing spreads that were available to us at March 31, 2024 and December 31, 2023, as compared with those in effect when the debt was issued or assumed, including lower borrowing spreads due to our credit ratings. See Note 5 for more information on our debt activity.

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


	March 31, 2024				December 31, 2023
	Carrying Value		Fair Value		Carrying Value		Fair Value
Credit facilities	$	1,031,266	$	1,031,266	$	979,313	$	979,313
Senior notes		26,500,864		24,067,338		25,311,647		23,121,936
Term loans and unsecured other		1,737,132		1,725,043		2,330,520		2,322,827
Secured mortgage		288,405		268,125		379,021		357,731
Total	$	29,557,667	$	27,091,772	$	29,000,501	$	26,781,807

NOTE 10. BUSINESS SEGMENTS

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

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

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

Below we present: (i) each reportable business segment’s revenues from external customers to Total Revenues; (ii) each reportable business segment’s net operating income from external customers to Operating Income and Earnings Before Income Taxes; and (iii) each reportable business segment’s assets to Total Assets. Our chief operating decision makers ("CODMs") rely principally on net operating income and similar measures to make decisions about allocating resources and assessing segment performance. The applicable components of Total Revenues, Operating Income, Earnings Before Income Taxes and Total Assets in the Consolidated Financial Statements are allocated to each reportable business segment’s revenues, net operating income and assets. Items that are not directly assignable to a segment are not allocated but reflected as non-segment items (G&A expenses and real estate adjustments for depreciation and gains and losses on contributions and sales) due to how our CODMs utilize segment information for planning and execution of our business strategy.

Index

The following reportable business segment revenues, net operating income and assets are presented in thousands:


	Three Months Ended March 31,
	2024			2023
Revenues:
Real estate segment:
U.S.	$	1,757,371		$	1,574,567
Other Americas		29,723			25,572
Europe		28,733			19,156
Asia		12,382			14,591
Total real estate segment		1,828,209			1,633,886
Strategic capital segment:
U.S.		46,103			53,696
Other Americas		16,285			14,195
Europe		44,800			43,533
Asia		21,224			23,277
Total strategic capital segment		128,412			134,701

Total revenues		1,956,621			1,768,587

Segment net operating income: (1)
Real estate segment:
U.S. (2)		1,312,621			1,171,983
Other Americas		22,893			19,178
Europe		18,774			14,210
Asia		7,420			8,777
Total real estate segment		1,361,708			1,214,148
Strategic capital segment:
U.S. (2)		5,146			21,567
Other Americas		9,963			8,942
Europe		23,092			22,604
Asia		11,400			9,879
Total strategic capital segment		49,601			62,992

Total segment net operating income		1,411,309			1,277,140

Non-segment items:
General and administrative expenses		(111,291	)		(99,777	)
Depreciation and amortization expenses		(637,505	)		(602,367	)
Gains on dispositions of development properties and land, net		40,308			-
Gains on other dispositions of investments in real estate, net		17,534			4,047
Operating income		720,355			579,043

Earnings from unconsolidated entities, net		72,472			75,779
Interest expense		(193,320	)		(136,011	)
Foreign currency, derivative and other gains and other income, net		63,564			8,614
Gains on early extinguishment of debt, net		536			3,275
Earnings before income taxes	$	663,607		$	530,700

Index


	March 31, 2024		December 31, 2023
Segment assets:
Real estate segment:
U.S.	$	76,732,394	$	76,633,566
Other Americas		2,186,421		2,029,438
Europe		2,356,294		2,366,539
Asia		754,985		793,916
Total real estate segment		82,030,094		81,823,459
Strategic capital segment: (3)
U.S.		10,499		10,499
Europe		25,280		25,280
Asia		186		203
Total strategic capital segment		35,965		35,982
Total segment assets		82,066,059		81,859,441

Non-segment items:
Investments in and advances to unconsolidated entities		9,691,101		9,543,970
Assets held for sale or contribution		382,793		461,657
Cash and cash equivalents		500,589		530,388
Other assets		669,768		625,384
Total non-segment items		11,244,251		11,161,399
Total assets	$	93,310,310	$	93,020,840

(1)

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

(2)

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

(3)

Represents management contracts and goodwill recorded in connection with business combinations associated with the Strategic Capital Segment. Goodwill was $25.3 million at March 31, 2024 and December 31, 2023.

NOTE 11. SUPPLEMENTAL CASH FLOW INFORMATION

Our significant noncash investing and financing activities for the three months ended March 31, 2024 and 2023 included the following:

We recognized lease right-of-use assets and lease liabilities related to leases in which we are the lessee within Other Assets and Other Liabilities on the Consolidated Balance Sheets, including any new leases, renewals and modifications of $7.1 million in 2024 and $12.1 million in 2023 for both assets and liabilities.

We capitalized $15.5 million and $14.7 million in 2024 and 2023, respectively, of equity-based compensation expense.

We received $85.1 million of ownership interests in certain unconsolidated co-investment ventures, primarily as a portion of our proceeds from the contribution of properties to these entities in 2024, as disclosed in Note 3.

We issued 1.1 million and less than 0.1 million shares in 2024 and 2023, respectively, of the Parent’s common stock upon redemption of an equal number of common limited partnership units in the OP.

We recognized a $150.1 million liability for installment payments to be made related to an acquisition of land in 2024.

We reinvested a distribution from an unconsolidated co-investment venture of $51.1 million in 2024.

We paid $210.7 million and $129.9 million for interest, net of amounts capitalized, during the three months ended March 31, 2024 and 2023, respectively.

We paid $58.1 million and $46.2 million for income taxes, net of refunds, during the three months ended March 31, 2024 and 2023, respectively.

Index

Re****port of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Prologis, Inc.:

Results of Review of Interim Financial Information

We have reviewed the consolidated balance sheet of Prologis, Inc. and subsidiaries (the Company) as of March 31, 2024, the related consolidated statements of income, comprehensive income, equity, and cash flows for the three-month periods ended March 31, 2024 and 2023, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2023, and the related consolidated statements of income, comprehensive income, equity, and cash flows for the year then ended (not presented herein); and in our report dated February 13, 2024, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2023 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

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

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

/s/ KPMG LLP

Denver, Colorado April 25, 2024

Index

Report of Independent Registered Public Accounting Firm

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

Results of Review of Interim Financial Information

We have reviewed the consolidated balance sheet of Prologis, L.P. and subsidiaries (the Operating Partnership) as of March 31, 2024, the related consolidated statements of income, comprehensive income, capital, and cash flows for the three-month periods ended March 31, 2024 and 2023, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Operating Partnership as of December 31, 2023, and the related consolidated statements of income, comprehensive income, capital, and cash flows for the year then ended (not presented herein); and in our report dated February 13, 2024, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2023 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

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

/s/ KPMG LLP

Denver, Colorado April 25, 2024

Index

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