UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 20122014
or
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:001-13545 (Prologis, Inc.) 001-14245 (Prologis, L.P.)
Prologis, Inc.
Prologis, L.P.
(Exact name of registrant as specified in its charter)
Maryland (Prologis, Inc.) Delaware (Prologis, L.P.) | 94-3281941 (Prologis, Inc.) 94-3285362 (Prologis, L.P.) | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
Pier 1, Bay 1, San Francisco, California | 94111 | |
(Address or principal executive offices) | (Zip Code) |
(415) 394-9000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
(Former name, former address and former fiscal year, if changed since last report)
AMB Property Corporation
AMB Property, L.P.
Title of Each Class | Name of Each Exchange on Which Registered | |||
Prologis, Inc. | Common Stock, $.01 par value | New York Stock Exchange | ||
Prologis, | ||||
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| New York Stock Exchange | |||
Prologis, L.P. | ||||
Prologis, L.P. | 3.000% Notes due 2022 | New York Stock Exchange | ||
Prologis, L.P. | 3.375% Notes due 2024 | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act:
Prologis, Inc. -NONE
Prologis, L.P. -NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Prologis, Inc.: Yes þ No ¨ Prologis, L.P.: Yesþ No¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Prologis, Inc.: Yes¨ Noþ Prologis, L.P.: Yes¨ Noþ
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Prologis, Inc.: Yesþ No¨ Prologis, L.P.: Yesþ No¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website; if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter periods that the registrant was required to submit and post such files). Prologis, Inc.: Yesþ No¨ Prologis, L.P.: Yesþ No¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to thisForm 10-K.¨þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):
Prologis, Inc.: | þ Large accelerated filer | ¨ Accelerated filer | ||
¨ Non-accelerated filer (do not check if a smaller reporting company) | ¨ Smaller reporting company |
Prologis, L.P.: | ¨ Large accelerated filer | ¨ Accelerated filer | ||
þ Non-accelerated filer (do not check if a smaller reporting company) | ¨ Smaller reporting company |
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¨ Noþ Prologis, L.P.: Yes¨ Noþ
Based on the closing price of Prologis, Inc.’s common stock on June 30, 2012,2014, the aggregate market value of the voting common equity held by non-affiliates of Prologis, Inc. was $15,163,537,027.$20,348,477,088.
The number of shares of Prologis, Inc.’s common stock outstanding as ofat February 22, 201320, 2015, was approximately 462,807,491.512,138,000
.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Part III of this report are incorporated by reference to the registrant’s definitive proxy statement for the 20132015 annual meeting of its stockholders or will be provided in an amendment filed on Form 10-K/A.
EXPLANATORY NOTE
This report combines the annual reports on Form 10-K for the year ended December 31, 20122014, 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” mean Prologis, L.P., and its consolidated subsidiaries. The terms “the Company”, “Prologis”,Company,” “Prologis,” “we,” “our” or “us” means Prologis, Inc. and the Operating Partnership collectively.
Prologis, Inc. is a real estate investment trust (a “REIT”) and the general partner of the Operating Partnership. As ofAt December 31, 2012,2014, Prologis, Inc. owned an approximate 99.59%99.65% common general partnership interest in the Operating Partnership and 100% of the preferred units in the Operating Partnership. The remaining approximate 0.41%0.35% common limited partnership interests are owned by non-affiliated investors and certain current and former directors and officers of Prologis, Inc. As the sole general partner of the Operating Partnership, Prologis, Inc. has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership.
We operate Prologis, Inc. and the Operating Partnership as one enterprise. The management of Prologis, Inc. consists of the same members as the management of the Operating Partnership. These members are officers of Prologis, Inc. and employees of the Operating Partnership or one of its direct or indirect subsidiaries. As general partner with control of the Operating Partnership, Prologis, Inc. consolidates the Operating Partnership for financial reporting purposes, andpurposes. Since the only significant asset of Prologis, Inc. does not have significant assets other thanis its investment in the Operating Partnership. Therefore,Partnership, the assets and liabilities of Prologis, Inc. and the Operating Partnership are the same on their respective financial statements.
We believe combining the combined annual reportsreport on Form 10-K of Prologis, Inc. and the Operating Partnership into this single report results in the following benefits:
enhances investors’ understanding of Prologis, Inc. and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the Company’s disclosure applies to both Prologis, Inc. and the Operating Partnership; and
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
We believe it is important to understand the few differences between Prologis, Inc. and the Operating Partnership in the context of how we operate as an interrelated consolidated company. Prologis, Inc.’s only material asset is its ownership of partnership interests in the Operating Partnership. As a result,Company. Prologis, Inc. does not conduct business itself, other than acting as the sole general partner of the Operating Partnership and issuing public equity from time to time. Prologis, Inc. itself does not issueincur any indebtedness, but guarantees the unsecured debt of the Operating Partnership. The Operating Partnership holds substantially all the assets of the business, directly or indirectly, and holds the ownership interests in the Company’s investment in certain entities. The Operating Partnership 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 Prologis, Inc., which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required by the business through the Operating Partnership’s operations, its incurrence of indebtedness and the issuance of partnership units to third parties.
Noncontrolling interests, stockholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of Prologis, Inc. and those of the Operating Partnership. The noncontrolling interests in the Operating Partnership’s financial statements include the interests in consolidated entities not owned by the Operating Partnership. The noncontrolling interests in Prologis, Inc.’s financial statements include the same noncontrolling interests at the Operating Partnership level, as well as the common limited partnership interests in the Operating Partnership, not owned by Prologis, Inc., which are accounted for as partners’ capital by the Operating Partnership.
In order to highlight the differences between Prologis, Inc. and the Operating Partnership, there are separate sections in this report, as applicable, that separately discuss Prologis, Inc. and the Operating Partnership, including separate financial statements controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of Prologis, Inc. and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of Prologis.
The statements in this report that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate, management’s beliefs and assumptions made by management. Such statements involve uncertainties that could significantly impact our financial results. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to rent and occupancy growth, development activity and changes in sales or contribution volume of properties, disposition activity, general conditions in the geographic areas where we operate, our debt, capital structure and financial position, our ability to form new co-investment ventures and the availability of capital in existing or new co-investment ventures — are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and therefore actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) national, international, regional and local economic climates, (ii) changes in financial markets, interest rates and foreign currency exchange rates, (iii) increased or unanticipated competition for our properties, (iv) risks associated with acquisitions, dispositions and development of properties, (v) maintenance of REIT status and tax structuring, (vi) availability of financing and capital, the levels of debt that we maintain and our credit ratings, (vii) risks related to our investments in our co-investment ventures, including our ability to establish new co-investment ventures, (viii) risks of doing business internationally, including currency risks, (ix) environmental uncertainties, including risks of natural disasters, and (x) those additional factors discussed under “ItemItem 1A. Risk Factors”Factors in this report. We undertake no duty to update any forward-looking statements appearing in this report except as may be required by law.
PART I
We are the leading global owner, operator and developer ofleader in industrial real estate, focused on global and regional markets across the Americas, Europe and Asia. As ofAt December 31, 2012,2014, we owned or had investments in, on a wholly-owned basis or through co-investment ventures, properties and development projects expected to total approximately 590 million square feet (55 million square meters) in 21 countries. We lease modern distribution facilities to more than 4,700 customers, including third-party logistics providers, transportation companies, retailers and manufacturers.
Details of the 590 million square feet, which represents an expected investment on an owned and managed basis we had properties and development projects totaling 554 million square feet (51.5 million square meters) in 21 countries. These properties are leased to approximately 4,500 customers, including third-party logistics providers, manufacturers, retailers, transportation companies, and other enterprises.
Of the 554 million square feet of our owned and managed portfolio$45.6 billion, were as of December 31, 2012:follows:
522537 million square feet were in our operating portfolio with a gross book value of $40.1$40.6 billion that were 94.0% occupied;and 96.1% occupancy;
2240 million square feet were in our development portfolio with a total expected investment of $2.1$3.2 billion that were 50.8%40.9% leased;
10$1.8 billion of land was available for future development;
13 million square feet consisted of valued added properties, properties in which we have an ownership interest but do not manage and other non-industrial properties we own, including assets held for sale;own; and
2.1% and 18.6% of the annualized net effective rent were attributable to our largest customer and 25 largest customers, accounted for 2.0% and 18.7%, respectively, of the annualized base rent.respectively.
Prologis, Inc. commenced operationsbegan operating as a fully integrated real estate company in 1997 and elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (“Internal Revenue Code”), and believes. We believe the current organization and method of operation will enable Prologis, Inc. to maintain its status as a REIT. The Operating Partnership also was also formed in 1997.
We have investments in entities through a variety of ventures. We co-invest in entities that own multiple properties with private capital investors and provide asset and property management services to these entities. We refer to these entities as co-investment ventures. Our ownership interest in these entities generally ranges from 15-50%. These entities may be consolidated or unconsolidated, depending on the structure, our partner’s participating and other rights and our level of control of the entity. The co-investment ventures may have one or more investors. We also have investments in joint ventures, generally with one partner and that we do not manage. We refer to our investments in the entities accounted for on the equity method, both unconsolidated co-investment ventures and joint ventures, as unconsolidated entities.
Our global corporate headquarters are located at Pier 1, Bay 1, San Francisco, California 94111, and our global operational headquarters are located at 4545 Airport Way, Denver, Colorado 80239. Our otherOther principal office locationsoffices are in Amsterdam, the Grand Duchy of Luxembourg, Mexico City, Sao Paulo, Shanghai, Singapore and Tokyo.
Our Internet website address iswww.prologis.com. All reports required to be filed with the Securities and Exchange Commission (the “SEC”(“SEC”) are available or maycan be accessed free of charge through the Investor Relations section of our Internet website as soon as reasonably practicable after we electronically file suchsubmit material with, or furnish it to the SEC. The common stock of Prologis, Inc. is listed on the New York Stock Exchange (“NYSE”) under the ticker “PLD” and is a component of the Standard & Poors (“S&P 500.
Merger of AMB and ProLogis and Acquisition of PEPR
On June 3, 2011, AMB Property Corporation (“AMB”&P”) completed a merger with ProLogis, a Maryland REIT (“ProLogis”) in which ProLogis shareholders received 0.4464 of a share of common stock of AMB for each outstanding common share of beneficial interest in ProLogis (the “Merger”). In the Merger, AMB was the legal acquirer and ProLogis was the accounting acquirer. Following the Merger, AMB changed its
name to Prologis, Inc. In May 2011, we also acquired a controlling interest in and began consolidating ProLogis European Properties (“PEPR”) (the “PEPR Acquisition”). Our results for 2011 reflect approximately seven months of the impact of the Merger and the PEPR Acquisition. Therefore, period to period comparisons may not be meaningful. See Note 3 to the Consolidated Financial Statements in Item 8 for more information relating to both the Merger and PEPR Acquisition.500.
We believe that gross domestic product (“GDP”) growthBoth macroeconomics and growth in global tradedemographics are important drivers of our business, including population growth, consumption and rising affluence. In developed markets, including in the U.S., Europe and Japan, the reconfiguration of supply chains, and the operational efficiencies that can be realized from our modern logistics facilities, are an important driver. In emerging markets, such as Mexico, Brazil and China, increases in affluence and the rise of consumer classes create demand for our product. Trade and GDPas new supply chains are correlated as higher levelsconstructed. Taken together, logistics real estate markets benefit from economic growth, but depend to a greater degree upon the modernization of investment, production and consumption within a globalized economy are consistent with increased levels of imports and exports. Assupply chains around the world produces and consumesdemographic growth.
We have investments in entities through a variety of ventures. We co-invest with partners and investors in entities that own multiple properties and provide asset and property management services to these entities. We refer to these entities as co-investment ventures. These entities may be consolidated or unconsolidated, depending on the structure, our partners’ participating and other rights and our level of control. The co-investment ventures may have one or more we believe that the volume of global trade will continue to increase at a rate in excess of growth in global GDP. Significant supply chain reconfiguration, obsolescence and customers’ preference to lease, rather than own, facilities also drive demand for quality distribution space.investors.
Our investment strategy focuses on providing distribution and logistics spacefacilities to customers whose businesses are tied to global trade and depend on the efficient movement of goods through the global supply chain to support global trade.chain. We have a deep globalworldwide presence with assets under management of $43.1$45.6 billion (based on expected investment) in our owned and managed portfolio spanning 21 countries on four continents. OurWe classify our properties are primarily located ininto two main market categories,categories: global markets and regional markets.regional. Global markets comprise approximately 30 of the largest markets tied to global trade. These marketsThey feature large population centers with high per-capita consumption rates and are located near major airports, seaports and ground transportation systems. Similar to global markets, regionalRegional markets benefit from large population centers but typically are not as tied to the global supply chainchain; instead, they serve local consumption and are often less supply constrained. We intend to hold primarily hold only the highest quality class-AClass-A product in our global and regional markets. As ofAt December 31, 2012,2014, global and regional markets represented approximately 83%86% and 12%13%, respectively, of our overall owned and managed platformportfolio (based on our share of net operating income of the properties)properties’ gross book value). We also ownhave a small number of assetsinvestment in other markets which accountthat accounts for approximately 5%1% of our owned and managed platform, and from which we generally plan to exit from in an orderly fashion in the next few years, although we may continue to opportunistically invest in other markets. Our portfolio allows us toportfolio. We have deep knowledge of our local market knowledge,markets, construction expertise and a commitment to sustainable design.design across our portfolio. We are supported by a broad and diverse customer base comprisingand have relationships with multinational corporations that result in repeatable business.bring us repeat business across our portfolio. For more detail on our properties, see Item 2. Properties.
Business Strategy and Operating Segments
Our business strategy includescomprises two operating segments: Real Estate Operations and PrivateStrategic Capital. We generate revenue,
Real Estate Operations
Rental Operations.Rental operations represent the main source of our revenues, earnings net operating income (calculated as rental income less rental expenses),and funds from operations (or(“FFO”). See definition and a complete reconciliation of net earnings to FFO as defined in “ItemItem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”) and cash flows through our segments primarily through three lines of business, as follows:
Real Estate Operations Segment
Rental Operations- This represents the primary source of our core revenue, earnings and FFO.Operations. We collect rent from our customers underthrough operating leases, including reimbursements for the vast majority of our operating costs. We seekexpect to generate long-term internal growth in rental income by maintaining a high occupancy rate at our properties, byrates, controlling expenses and through contractual rent increases on existing spaceincreases. Our rental income is diversified due to our global presence and renewals on rollover space, thus capitalizingbroad customer base. We believe our property management, leasing and maintenance teams, together with our capital expenditure, energy management and risk management programs, create cost efficiencies that allow us to capitalize on the economies of scale inherent in owning, operating and growing a large global portfolio. Our rental income is diversified due to both our global presence and our broad customer base. We expect to generate long-term internal growth in rents by increasing our occupancy rate and through rent increases on existing space and renewals on rollovers. We believe that our property management and leasing teams, regular maintenance programs, capital expenditure programs, energy management and sustainability programs create cost efficiencies, allowing us to leverage our global platform and provide flexible solutions for our customers as well as for us.
Capital Deployment Activities -Deployment.OurCapital deployment includes the development, re-development and re-development activities support ouracquisition of industrial properties that lead to rental operations and areis therefore included with that line of businessrental operations for segment reporting. We develop and re-develop industrial propertiesdeploy capital primarily in global and regional markets to meet our customers’ needs. Within this line of business, we provide additional value creation by utilizing:We capitalize on the following: (i) theour land that we currently own in global and regional markets;bank; (ii) the development expertise of our local personnel;teams; (iii) our global customer relationships; and (iv) the demand for high qualityhigh-quality distribution facilities in key markets.facilities. We seekaim to increase our rental income and the Company’s net asset value of the Company through theby leasing of newly developed space as well as through the acquisition of newand acquiring operating properties. Depending on several factors, we mayWe develop properties directly or in co-investment ventures for long-term hold, for contribution into one ofto our co-investment ventures orand, occasionally, for sale to third parties. Properties that we choose to contribute or sell may result in the recognition of gains or losses. Generally, in the United States, Europe and Japan we are developing directly while in emerging markets such as Brazil, China and Mexico we are developing with our private capital partners in a variety of co-investment ventures.
PrivateStrategic Capital Segment -
We co-invest in propertiesinvest with private capitalpartners and investors through a variety of co-investment ventures. We have a directprivate and long-standing relationship with a significant number of institutional investors.public ventures which may be consolidated or unconsolidated. We tailor industrial portfolios to investors’ specific needs, and deploy capital in both close-endedwith a focus on long-term ventures and open-ended venture structuresfunds. We also access alternative sources of equity through publicly traded vehicles such as Nippon Prologis REIT, Inc. (“NPR”) and other joint ventures, while providing complete portfolio managementFIBRA Prologis. These private and financial reporting services.public vehicles provide capital for distinct geographies across our global platform. We generally own 15-50%hold a significant ownership interest in these ventures. We believeventures, aligning our co-investment in eachinterests with those of our ventures provides a strong alignment of interests with our co-investment partners’ interests.partners. We generate strategic capital revenues from our unconsolidated co-investment ventures by providingthrough asset
management and property management services. We may alsoservices and we earn additional revenues through additional services provided such asfrom leasing, acquisition, construction, development and disposition legal and tax services.services provided. Depending on the structure of the venture and the returns provided to our partners, we may also earn revenues through incentive returnsfees during the life of a venture or promotes.upon liquidation (we refer to these incentive fees as promotes). We believe our co-investment program with private capital investorsventures will continue to serve as a source of capital for new investments, and provide incremental revenues for
our stockholders, as well asand mitigate risk associated with our foreign currency exposure. We expectplan to grow this business with the formation of new ventures, such as the two ventures discussed below under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and by raising additional third-party capital in ourgenerally through existing ventures.
As discussed above, our current business strategy includes two operating segments: Real Estate Operations, which includes our Capital Deployment activities, and Private Capital. Please see “Item 1A Risk Factors”, our property information and market presence as presented in “Item 2. Properties”, a discussion of our segment results in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our segment footnote – Note 22 to our Consolidated Financial Statements in Item 8 for more information with regard to the investments and results of operations of our segments.
Competition
The existence of competitivelyCompetitively priced distribution space available in any market could impact our occupancy rates and have a material impactan adverse effect on our ability tohow much rent space and on the rents that we can charge, which impactsin turn could affect both of our operating segments. To the extent we wish to acquire land for future development of properties in our Real Estate Operations segment or dispose of land, we may compete with local, regional and national operators and/or developers. We also face competition from investment managers for institutional capital within our Private Capital segment.strategic capital business.
We believe we have competitive advantages due to (i) our our:
ability to respond quickly to customers’ needs for high-quality distribution space in key global distributionand regional markets; (ii) our
established relationships with key customers served by our local personnel; (iii) our teams;
ability to leverage our organizational scale and structure to provide a single point of contact for our global customers through our Global Customer Solutionsthe Prologis global customer solutions team; (iv) our
property management and leasing expertise; (v) our
relationships and proven track record with current and prospective investors in our privatestrategic capital business; (vi) our
global experience in the developmentdeveloping and management ofmanaging industrial properties; (vii) the strategic locations of our
well-positioned land that we expect to develop;bank; and (viii) our personnel who are experienced
team members with experience in the land entitlement process.
Customers
We have developed aOur broad customer base that is diverse in terms of industry concentration and represents a broad spectrum of international, national, regional and local distribution space users. At December 31, 2012,2014, in our Real Estate Operations, segment, we had 3,832more than 3,900 customers occupying 296.5271.6 million square feet of distribution space. In the unconsolidated properties we manage,On an owned and managed basis, we had 2,703more than 4,700 customers occupying 195.9519.1 million square feet of distribution space. In our Real Estate Operations segment, ourOur largest customer and 25 largest customers accounted for 1.6%1.9% and 18.7%19.5%, respectively, of our annualized basenet effective rent at December 31, 2012.
Within our Global Customer Solutions team, we develop long-term relationships with our customers and understand their business and needs, serving as their strategic partner2014, for real estate on a global basis. Keeping in close contact with customers and focusing on exceptional customer service sets us apart from other real estate providers as much more than a landlord. We believe that what we offer in terms of scope, scale and quality of assets is unique. Our in-depth knowledge of our markets helps us stay ahead of trends and create forward-thinking solutions for their distribution networks. This depth of customer knowledge results in greater retention and expanded service, which garners additional business from the same customer across multiple geographies. In our Real Estate Operations segment, approximately 50.0% ofand 2.1% and 18.6%, respectively, for our annual base rent is derived from customers who lease from us in more than one locationowned and more than one country.managed portfolio.
In Strategic Capital, we view our Private Capital segment, we considerpartners and investors as our customers. At December 31, 2014, in our private capital investors to be our customers. As of December 31, 2012,ventures, we partnered with 107more than 100 investors, several of which invest in multiple ventures.
Employees
We employ 1,445 persons in our entire organization.1,505 people across the globe. Our employees work in four countries in the Americas (875 persons)(900 people), in 1514 countries in Europe (385 persons)(360 people) and in three countries in Asia (185 persons)(245 people). Of the total, we have assigned 885955 employees to our Real Estate Operations segment and 10090 employees to our Private Capital segment. WeStrategic Capital. Further, we have 460 employeesindividuals who work in corporate and support positions who are not assigned to a segment who may assist with segment activities.that support both segments. We believe ourwe have good relationships with our employees are good. Ouremployees. Prologis employees are not organized under collective bargaining agreements, although some of our employees in Europe are represented by statutory Works Councils and as such they benefit from applicable labor agreements.
At the time of the Merger, we established our key strategic priorities to guide our path through the end of 2013. These priorities were:
to align our portfolio with our investment strategy while serving the needs of our customers;
to strengthen our financial position and build one of the top balance sheets in the REIT industry;
to streamline our private capital business and position it for substantial growth;
to improve the utilization of our low yielding assets; and
to build the most effective and efficient organization in the REIT industry and to become the employer of choice among top professionals interested in real estate as a career.
Align our Portfolio with our Investment Strategy
As discussed above, we have categorized our portfolio into three main segments – global, regional and other markets. By segmenting our markets in this manner, we were able to construct a plan that includes culling the portfolio for buildings and potentially submarkets that are no longer a strategic fit. We expect to use the proceeds from dispositions to pay down debt that is secured by the disposed assets, if any, repay other debt and to recycle capital into new development projects and/or strategic acquisitions.
Strengthen our Financial Position
We intend to further strengthen our financial position by lowering our financial risk and currency exposure and building one of the strongest balance sheets in the REIT industry. We expect to lower our financial risk by reducing leverage and maintaining staggered debt maturities, which will increase our financial flexibility and provide for continued access to capital markets. This financial flexibility will position us to capitalize on market opportunities across the entire business cycle as they arise. We expect to reduce our exposure to foreign currency exchange fluctuations by borrowing in local currency where appropriate, and utilizing derivative contracts to hedge our foreign denominated equity and swap U.S. dollar–denominated debt into obligations denominated in foreign currencies. We expect to also lower our foreign currency risk by holding assets outside the United States primarily in co-investment ventures in which we maintain an ownership interest and provide services generating private capital revenue. We will accomplish this through contributions and sales to our existing and newly formed co-investment ventures, including the new ventures in Europe and Japan discussed below under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”. In addition, we expect that new development projects, particularly in those emerging markets such as Brazil, China and Mexico, will be done in conjunction with our private capital partners.
Streamline Private Capital Business
We are working with our private capital investors to rationalize certain of our co-investment ventures. Some of our legacy co-investment ventures have fee structures that do not adequately compensate us for the services we provide. Therefore, we have terminated or restructured certain of these co-investment ventures. In other cases, we may combine some co-investment ventures to gain operational efficiencies. In every case, however, we have and will continue to work very closely with our partners and venture investors who have been and will be active participants in these decisions. We expect to continue with these activities during 2013. We plan to grow our private capital business with the deployment of the private capital commitments we have already raised, formation of new co-investment ventures, including the new ventures in Europe and Japan, and raising incremental capital for our existing co-investment ventures.
Improve the Utilization of Our Low Yielding Assets
We plan to increase the value of our low yielding assets by stabilizing our operating portfolio to 95% leased, completing the build-out and lease-up of our development projects as well as monetizing our land through development or sale to third parties.
Build the most effective and efficient organization in the REIT industry and become the employer of choice among top professionals interested in real estate as a career
We realized more than $115 million of cost synergies on an annualized basis, compared to the combined expenses of AMB and ProLogis on a pre-Merger basis. These synergies included gross general and administrative savings, reduced global line of credit facility fees and lower amortization of non real estate assets. We will continue to look for and achieve additional savings opportunities. In addition, we implemented a new enterprise wide system that includes a property management/billing system (implemented in April 2012), a human resources system (implemented in July 2012), a general ledger and accounting system and a data warehouse (implemented in January 2013). In connection with this implementation, we are striving to utilize the most effective global business processes with the enhanced system functionality, and have also implemented several analytical tools to further empower and assist our regional and local teams. In early 2012, we implemented two new compensation plans that we believe will better align employees’ compensation to our company performance. We believe these efforts and others will help us with the attainment of this objective.
See “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of our 2012 results and progress attaining the objectives outlined above.
Code of Ethics and Business Conduct
We maintain a Code of Ethics and Business Conduct applicable to our Board of Directors (“Board”) and all of our officers and employees, including the principal executive officer, the principal financial officer and the principal accounting officer, or persons performing similar functions. A copy of our Code of Ethics and Business Conduct is available on our website,www.prologis.com. In addition to being accessible through our website, copies of our Code of Ethics and Business Conduct can be obtained, free of charge, upon written request to Investor Relations, Pier 1, Bay 1, San Francisco, California 94111. Any amendments to or waivers of our Code of Ethics and Business Conduct that apply to the principal executive officer, the principal financial officer, or the principal accounting officer, or persons performing similar functions, and that relate to any matter enumerated in Item 406(b) of Regulation S-K, will be disclosed on our website.
We are exposed to various environmental risks that may result in unanticipated losses and affect our operating results and financial condition. Either the previous owners or we have subjected a majority of the properties we have acquired, including land, to environmental reviews. While
some of these assessments have led to further investigation and sampling, none of the environmental assessments has revealed an
environmental liability that we believe would have a material adverse effect on our business, financial condition or results of operations. See Item 1A. Risk Factors and Note 2119 to ourthe Consolidated Financial Statements in Item 8 and “Item 1A. Risk Factors”.8.
We carry insurance coverage on our properties. We determine the type of coverage and the policy specifications and limits based on what we deem to be the risks associated with our ownership of properties and our business operations in specific markets. Such coverage typically includes property damage and rental loss insurance resulting from such perils as fire, additional perils as covered under an extended coverage policy, namely windstorm, flood, earthquake and terrorism; commercial general liability insurance; and environmental insurance. Insurance is maintained through a combination of commercial insurance, self insurance and through a wholly-owned captive insurance entity. The costs to insure our properties are primarily covered through reimbursements from our customers. We believe that our insurance coverage contains policy specifications and insured limits that are customary for similar properties, business activities and markets and we believe our properties are adequately insured. However, an uninsured loss could result in loss of capital investment and anticipated revenues and earnings. See further discussion in “ItemItem 1A. Risk Factors”.Factors.
Our operations and structure involve various risks that could adversely affect our financial condition, results of operations, distributable cash flow and value of our securities. These risks include, among others:
General
Disruptions in the Global Capital and Credit Markets may adversely affect our operating results and financial condition.
Global market and economic conditions have been challenging with tighter credit conditions and slower growth in most major economies during the last few years. Although signs of recovery are emerging, there are continued concerns about the systemic impact of inflation, the availability and cost of credit, a lagging real estate market and geopolitical issues that contribute to increased market volatility and uncertain expectations for the global economy. To the extent there is turmoil in the financial markets, it has the potential to materially affect the value of our properties and investments in our unconsolidated entities, the availability or the terms of financing that we and our unconsolidated entities have or may anticipate utilizing, our ability and that of our unconsolidated entities to make principal and interest payments on, or refinance any outstanding debt when due and may impact the ability of our customers to enter into new leasing transactions or satisfy rental payments under existing leases.
The market volatility over the last several years has made the valuation of our properties and those of our unconsolidated entities more difficult. There may be significant uncertainty in the valuation, or in the stability of the value, of our properties and those we invest in through unconsolidated entities, that could result in a decrease in the value of our properties and our investments in unconsolidated entities. As a result, we may not be able to recover the current carrying amount of our investments in real estate properties, including our unconsolidated entities, which may require us to recognize an impairment charge in earnings where it is known in addition to the charges we previously recognized.
Any additional, continued or recurring disruptions in the capital and credit markets may adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to our security holders and the market price of our securities.
As a global company, we are subject to social, political and economic risks of doing business in many countries.
We conduct a significant portion of our business and employ a substantial number of people outside of the United States. During 2012,2014, we generated approximately 41.8%$369.6 million or $838.6 million21.0% of our revenue from operations outside the United States. Circumstances and developments related to international operations that could negatively affect our business, financial condition, results of operations or cash flow include, but are not limited to, the following factors:
difficulties and costs of staffing and managing international operations in certain regions;
differing employment practices and labor issues;
local businesses and cultural factors that differ from our usual standards and practices;
volatility in currencies;
currency restrictions, which may prevent the transfer of capital and profits to the United States;
unexpected changes in regulatory requirements and other laws;
potentially adverse tax consequences;
the responsibility of complying with multiple and potentially conflicting laws, e.g., with respect to corrupt practices, employment and licensing;
the impact of regional or country-specific business cycles and economic instability;
political instability, uncertainty over property rights, civil unrest, drug trafficking, political activism or the continuation or escalation of terrorist or gang activities (particularly with respect to our operations in Mexico);
foreign ownership restrictions in operations with respect to operations inthe respective countries; and
access to capital may be more restricted, or unavailable on favorable terms or at all in certain locations.
Our global growth also subjects us to certain risks, including risks associated with funding increasing headcount, integrating new offices, and establishing effective controls and procedures to regulate the operations of new offices and to monitor compliance with regulations such as the Foreign Corrupt Practices Act, the United Kingdom Bribery Act and similar laws.
Although we have committed substantial resources to expand our global platform, if we are unable to successfully manage the risks associated with our global business or to adequately manage operational fluctuations, our business, financial condition, and results of operations and cash flow could be harmed.
In addition, our international operations and, specifically,we may be impacted by, the ability of our non-United States subsidiaries to dividend or otherwise transfer cash among our subsidiaries, including transfers of cash to pay interest and principal on our debt, may be affecteddue to by currency exchange control regulations, transfer pricing regulations and potentially adverse tax consequences, among other things.
The depreciation in the value of the foreign currency in countries where we have a significant investment may adversely affect our results of operations and financial position.
We have pursued, and intend to continue to pursue, growth opportunities in international markets where the U.S. dollar is not the functional currency. At December 31, 2012,2014, approximately 40.6%$6.4 billion or $11.1 billion24.9% of our total assets are invested in a currency other than the U.S. dollar,
primarily the British pound sterling, euro and Japanese yen. As a result, we are subject to foreign currency risk due to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar. A significant change in the value of the foreign currency of one or more countries where we have a significant investment may have a material adverse effect on our U.S. dollar reported financial position, debt covenant ratios, results of operations and cash flow. Although we attempt to mitigate adverse effects by borrowing under debt agreements denominated in foreign currencies and using derivative contracts, there can be no assurance that those attempts to mitigate foreign currency risk will be successful. Hedging arrangements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements and the risk of fluctuation in the relative value of the foreign currency. The funds required to settle such arrangements could be significant depending on the stability and movement of the hedged foreign currency. The failure to hedge effectively against exchange rate changes may materially adversely affect our results of operations and financial position.
Disruptions in the global capital and credit markets may adversely affect our operating results and financial condition.
To the extent there is turmoil in the global financial markets, it has the potential to adversely affect the value of our properties and investments in our unconsolidated entities, the availability or the terms of financing that we and our unconsolidated entities have or may anticipate utilizing, our ability and that of our unconsolidated entities to make principal and interest payments on, or refinance any outstanding debt when due and may impact the ability of our customers to enter into new leasing transactions or satisfy rental payments under existing leases.
Any additional, continued or recurring disruptions in the capital and credit markets may adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to our security holders and the market price of our securities.
Risks Related to our Business
Real estate investments are not as liquid as certain other types of assets, which may reduce economic returns to investors.
Real estate investments are not as liquid as certain other types of investments and this lack of liquidity may limit our ability to react promptly to changes in economic or other conditions. In addition, significant expenditures associated with real estate investments, such as secured mortgage payments, real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investments. Like other companies qualifying as REITs under the Internal Revenue Code, we are only able to hold property for sale in the ordinary course of business through taxable REIT subsidiaries in order to not incur punitive taxation on any tax gain from the sale of such property. While we may dispose of certain properties that have been held for investment in order to generate liquidity, if we do not satisfy certain safe harbors or we believe there is too much risk of incurring the punitive tax on any tax gain from the sale, we may not pursue such sales.
In the event that we do not have sufficient cash available to us through our operations or available credit facilities to continue operating our business as usual, we may need to find alternative ways to increase our liquidity. Such alternatives may include, without limitation, divesting ourselves of properties, whether or not they otherwise meet our strategic objectives to keep in the long term, at less than optimal terms, incurring debt, entering into leases with ournew customers at lower rental rates or less than optimal terms or entering into lease renewals with our existing customers without an increase in rental rates at turnover.rates. There can be no assurance, however, that such alternative ways to increase our liquidity will be available to us. Additionally, taking such measures to increase our liquidity may adversely affect our financial condition, results of operations, cash flow, our ability to make distributions and payments to our security holders and the market price of our securities.
Risks Related to our Business
General economic conditions and other events or occurrences that affect areas in which our properties are geographically concentrated, may impact financial results.
We are exposed to general economic conditions, local, regional, national and international economic conditions and other events and occurrences that affect the markets in which we own properties. Our operating performance is further impacted by the economic conditions of the specific markets in which we have concentrations of properties.
As ofAt December 31, 2012,2014, approximately 25.1%33.6% of our consolidated operating properties or $5.7$6.3 billion (based on investment before depreciation) are located in California, which represented 20.5%25.9% of the aggregate square footage of our operating properties and 23.1%31.9% of our annualized base rent.net operating income. Our revenue from, and the value of, our properties located in California may be affected by local real estate conditions (such as an oversupply of or reduced demand for industrial properties) and the local economic climate. Business layoffs, downsizing, industry slowdowns, changing demographics and other factors may adversely impact California’s economic climate. Because of the number of properties we have located in California, a downturn in California’s economy or real estate conditions could adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to our security holders and the market price of our securities.
In addition to California, we also have significant holdings (defined as more than 3% of total investment before depreciation) in operating properties in certain global and regional markets located in Central & Eastern Pennsylvania, Chicago, Dallas/Fort Worth, France, Japan, Mexico, New Jersey/New York City, South Florida and the United Kingdom.Canada. Our operating performance could be adversely affected if conditions become less favorable in any of the markets in which we have a concentration of properties. Conditions such as an oversupply of distribution space or a reduction in demand for distribution space, among other factors, may impact operating conditions. Any material oversupply of distribution space or material reduction in demand for distribution space could adversely affect our results of operations, distributable cash flow and the value of our securities.
In addition, the unconsolidated entitiesco-investment ventures in which we invest have concentrations of properties in the same markets mentioned above, as well as in markets in France, Germany, Japan, Mexico, the Netherlands, Poland and Seattlethe United Kingdom, and are subject to the economic conditions in those markets.
A number of our propertiesinvestments, both wholly-owned and owned through co-investment ventures, are located in areas that are known to be subject to earthquake activity. United States properties located in active seismic areas include properties in the San Francisco Bay Area, Los Angeles, and Seattle. International properties located in active seismic areas include Japan and Mexico. We generally carry earthquake insurance on our properties located in areas historically subject to seismic activity, subject to coverage limitations and deductibles if we believe it is commercially reasonable. We evaluate our earthquake insurance coverage annually in light of current industry practice through an analysis prepared by outside consultants and in some specific instances have elected to self insure our earthquake exposure based on this analysis. We have elected not to carry earthquake insurance for wholly ownedour assets in Japan based on this analysis.
Further, a number of our properties are located in areas that are known to be subject to hurricane and/or flood risk. We carry hurricane and flood hazard insurance on all of our properties located in areas historically subject to such activity, subject to coverage limitations and deductibles if we believe it is commercially reasonable. We evaluate our insurance coverage annually in light of current industry practice through an analysis prepared by outside consultants.
Our insurance coverage does not include all potential losses.
We and our unconsolidated entitiesco-investment ventures currently carry insurance coverage including property damage and rental loss insurance resulting from certain perils such as fire and additional perils as covered under an extended coverage policy, namely windstorm, flood, earthquake and terrorism; commercial general liability insurance; and environmental insurance, as appropriate for the markets where each of our properties and business operations are located. The insurance coverage contains policy specifications and insured limits customarily carried for similar properties, business activities and markets. We believe our properties and the properties of our unconsolidated entitiesco-investment ventures are adequately insured. However, there are certain losses, including losses from floods, earthquakes, acts of war, acts of terrorism or riots, that are not generally insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so. If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of our properties, we could experience a significant loss of capital invested and future revenues in these properties and could potentially remain obligated under any recourse debt associated with the property.
Furthermore, we cannot be sure that the insurance companies will be able to continue to offer products with sufficient coverage at commercially reasonable rates. If we experience a loss that is uninsured or that exceeds insured limits with respect to one or more of our properties or if the insurance companies fail to meet their coverage commitments to us in the event of an insured loss, then we could lose the capital invested in the damaged properties, as well as the anticipated future revenue from those properties and, if there is recourse debt, then we would remain obligated for any mortgage debt or other financial obligations related to the properties. Any such losses or higher insurance costs could adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to our security holders and the market price of our securities.
Investments in real estate properties are subject to risks that could adversely affect our business.
Investments in real estate properties are subject to varying degrees of risk. While we seek to minimize these risks through geographic diversification of our portfolio, market research and our property management capabilities, these risks cannot be eliminated. Some of the factors that may affect real estate values include:
local conditions, such as an oversupply of distribution space or a reduction in demand for distribution space in an area;
the attractiveness of our properties to potential customers;
competition from other available properties;
increasing costs of rehabilitating, repositioning, renovating and making improvements to our properties;
our ability to provide adequate maintenance of, and insurance on, our properties;
our ability to control rents and variable operating costs;
governmental regulations, including zoning, usage and tax laws and changes in these laws; and
potential liability under, and changes in, environmental, zoning and other laws.
Our investments are concentrated in the industrial distribution sector and our business would be adversely affected by an economic downturn in that sector.
Our investments in real estate assets are primarily concentrated in the industrial distribution sector. This concentration may expose us to the risk of economic downturns in this sector to a greater extent than if our business activities were more diversified.
Our operating results and distributable cash flow will depend on the continued generation of lease revenues from customers and we may be unable to lease vacant space or renew leases or re-lease space on favorable terms as leases expire.
Our operating results and distributable cash flow would be adversely affected if a significant number of our customers were unable to meet their lease obligations. We are also subject to the risk that, upon the expiration of leases for space located in our properties, leases may not be
renewed by existing customers, the space may not be re-leased to new customers or the terms of renewal or re-leasing (including the cost of required renovations or concessions to customers) may be less favorable to us than current lease terms. Our competitors may offer space at rental rates below current market rates or below the rental rates we currently charge our customers, we may lose potential customers, and we may be pressured to reduce our rental rates below those we currently charge in order to retain customers when our customers’ leases expire. In the event of default by a significant number of customers, we may experience delays and incur substantial costs in enforcing our rights as landlord, and may be unable to re-lease spaces. A customer may experience a downturn in its business, which may cause the loss of the customer or may weaken its financial condition, resulting in the customer’s failure to make rental payments when due or requiring a restructuring that might reduce cash flow from the lease. In addition, a customer may seek the protection of bankruptcy, insolvency or similar laws, which could result in the rejection and termination of such customer’s lease and thereby cause a reduction in our available cash flow.
If we decide to contribute or sell properties to an unconsolidated entity or third parties to generate proceeds, we may not be successful.
We may contribute or sell properties to certain of our unconsolidated entities or third parties on a case-by-case basis. Our ability to sell properties on advantageous terms is affected by competition from other owners of properties that are trying to dispose of their properties; market conditions, including the capitalization rates applicable to our properties; and other factors beyond our control. If our competitors sell assets similar to assets we intend to divest in the same markets and/or at valuations below our valuations for comparable assets, we may be unable to divest our assets at favorable pricing or on favorable terms or at all. The unconsolidated entity or third parties who might acquire our properties may need to have access to debt and equity capital, in the private and public markets, in order to acquire properties from us. Should they have limited or no access to capital on favorable terms, then dispositions could be delayed. If we are unable to generate proceeds through property sales we may have to delay our deleveraging plans, which may result in adverse effects on our liquidity, distributable cash flow, debt covenant ratio, and the market price of our securities.
We may acquire properties, which involves risks that could adversely affect our operating results and the value of our securities.
We mayhave acquired properties and will continue to acquire industrial properties.properties, both through the direct acquisition of real estate and through the acquisition of entities that own the real estate. The acquisition of properties involves risks, including the risk that the acquired property will not perform as anticipated and that any actual costs for rehabilitation, repositioning, renovation and improvements identified in the pre-acquisition due diligence process will exceed estimates. When we acquire properties, we may face risks associated with a lack of market knowledge or understanding of the local economy, forging new business relationships in the area and unfamiliarity with local government and permitting procedures. Additionally, there is, and it is expected there will continue to be, significant competition for properties that meet our investment criteria as well as risks associated with obtaining financing for acquisition activities. The acquired properties or entities may also be subject to liabilities, which may be without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of any of these entities or properties, then we may have to pay substantial sums to settle it.
Our real estate development strategies may not be successful.
Our real estate development strategy is focused on monetizing land in the future through sales to third parties, development of industrial properties to hold for long-term investment or contribution or sale to an unconsolidated entity,a co-investment venture, depending on market conditions, our liquidity needs and other factors. We may expandincrease our investment in ourthe development, renovation and redevelopment business and we will complete the build-out and leasing of our development platform.portfolio. We may also develop, renovate and redevelop properties within existing or newly formed development co-investment ventures. The real estate development, renovation and redevelopment business involves significant risks that could adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to our security holders and the market price of our securities, which include the following risks:
we may not be able to obtain financing for development projects on favorable terms or at all;
we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations;
we may seek to sell certain land parcels and not be able to find a third party to acquire such land or the sales price will not allow us to recover our investment, resulting in additional impairment charges;
development opportunities that we explore may be abandoned and the related investment impaired;
the properties may perform below anticipated levels, producing cash flow below budgeted amounts;
we may not be able to lease properties on favorable terms or at all;
construction costs, total investment amounts and our share of remaining funding may exceed our estimates and projects may not be completed, delivered or stabilized as planned;
we may not be able to attract third partythird-party investment in new development co-investment ventures or sufficient customer demand for our product;
we may not be able to capture the anticipated enhanced value created by our redevelopment projects on expected timetables or at all;
we may experience delays (temporary or permanent) if there is public or government opposition to our activities; and
substantial renovation, new development and redevelopment activities, regardless of their ultimate success, typically require a significant amount of management’s time and attention, diverting their attention from our day-to-day operations.
We are exposed to various environmental risks that may result in unanticipated losses that could affect our operating results, financial condition and cash flow.
Under various federal, state and local laws, ordinances and regulations, a current or previous owner, developer or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances. The costs of removal or remediation of such substances could be substantial. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of such hazardous substances. In addition, third parties may sue the owner or operator of a site for damages based on personal injury, property damage or other costs, including investigation and clean-up costs, resulting from the environmental contamination.contamination.
Environmental laws in some countries, including the United States, also require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos, adequately inform or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is disturbed during building renovation or demolition. These laws may impose fines and penalties on building owners or operators who fail to comply with these requirements and may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos. Some of our properties are known to contain asbestos-containing building materials.
In addition, some of our properties are leased or have been leased, in part, to owners and operators of businesses that use, store or otherwise handle petroleum products or other hazardous or toxic substances, creating a potential for the release of such hazardous or toxic substances. Further, certain of our properties are on, adjacent to or near other properties that have contained or currently contain petroleum products or other hazardous or toxic substances, or upon which others have engaged, are engaged or may engage in activities that may release such hazardous or toxic substances. From time to time, we may acquire properties, or interests in properties, with known adverse environmental conditions where we believe that the environmental liabilities associated with these conditions are quantifiable and that the acquisition will yield a superior risk-adjusted return. In connection with certain divested properties, we have agreed to remain responsible for, and to bear the cost of, remediating or monitoring certain environmental conditions on the properties.
We cannot give any assurance that other such conditions do not exist or may not arise in the future. The presence of such substances on our real estate properties could adversely affect our ability to lease, develop or sell such properties or to borrow using such properties as collateral, and may have an adverse effect on our distributable cash flow.
If we decide to contribute or sell properties to unconsolidated co-investment ventures or third parties to generate proceeds, we may not be successful.
We may decide to contribute or sell properties to certain of our unconsolidated co-investment ventures or third parties depending on a number of factors. Our ability to sell properties on advantageous terms is affected by: competition from other owners of properties that are trying to dispose of their properties; market conditions, including the capitalization rates applicable to our properties; and other factors beyond our control. If our competitors sell assets similar to assets we intend to divest in the same markets and/or at valuations below our valuations for comparable assets, we may be unable to divest our assets at favorable pricing or at all. The unconsolidated co-investment venture or third party who might acquire our properties may need to have access to debt and equity capital, in the private and public markets, in order to acquire properties from us. Should they have limited or no access to capital on favorable terms, then dispositions could be delayed. If we are unable to generate proceeds through property sales, this may result in adverse effects on our liquidity, distributable cash flow, debt covenants, and the market price of our securities.
We are subject to risks and liabilities in connection with forming co-investment ventures, investing in new or existing co-investment ventures, attracting third partythird-party investment and investing in and managing properties through co-investment ventures.
As ofAt December 31, 2012,2014, we had an investment in real estate containing approximately 214.5261 million square feet held through unconsolidated entities.co-investment ventures, both public and private. Our organizational documents do not limit the amount of available funds that we may invest in unconsolidated entities,ventures, and we may and currently intend to develop and acquire properties through co-investment ventures and investments in other entities when warranted by the circumstances. However, there can be no assurance that we will be able to form new co-investment ventures, attract third partythird-party investment or make additional investments in new or existing co-investment ventures, successfully develop or acquire properties through unconsolidated entities,ventures, or realize value from such unconsolidated entities.investments. Our inability to do so may have an adverse effect on our growth, our earningsresults of operations, cash flows and the market price of our securities.
Our partners in co-investment ventures involve certain additional risks that we do not otherwise face, including:
our unconsolidated investmentspartners may share certain approval rights over major decisions and some partners may managemade on behalf of the properties in the unconsolidated entities. Our unconsolidated investments involve certain risks, including:ventures;
if our partners fail to fund their share of any required capital contributions, then we may choose to contribute such capital;
our partners might have economic or other business interests or goals that are inconsistent with our business interests or goals that would affect our ability to operate the property;
the venture or other governing agreements often restrict the transfer of an interest in the co-investment venture or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms;
our relationships with our partners are generally contractual in nature and may be terminated or dissolved under the terms of the agreements, and in such event, we may not continue to manage or invest in the assets underlying such relationships resulting in reduced fee revenue or causing a need to purchase such interest to continue ownership; and
disputes between us and our partners may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and result in subjecting the properties owned by the applicable co-investment venture to additional risk.
We generally seek to maintain sufficient influence over our unconsolidated entitiesco-investment ventures to permit us to achieve our business objectives; however, we may not be able to continue to do so.so indefinitely. We have formed publicly traded investment vehicles, like our publicly traded REIT in Japan,such as NPR and FIBRA Prologis, for which we serve as sponsor and/or manager. We have contributed, and may continue to contribute, assets into such vehicles. As with any of our publicly traded entities or funds, thereThere is a risk that we may not be able to continue to manage such entities and their assets in the event that our managerial relationship ismay be terminated.
The occurrence of one or more of the events described above could adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to our security holders and the market price of our securities.
Contingent or unknown liabilities could adversely affect our financial condition.
We have acquired and may in the future acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of any of these entities or properties, then we might have to pay substantial sums to settle it, which could adversely affect our cash flow. Contingent or unknown liabilities with respect to entities or properties acquired might include:
liabilities for environmental conditions;
losses in excess of our insured coverage;
accrued but unpaid liabilities incurred in the ordinary course of business;
tax, legal and regulatory liabilities; and
claims for indemnification by the general partners, officers and directors and others indemnified by the former owners of our properties.
Risks Related to Financing and Capital
We face risks associated with the use of debt to fund our business activities, including refinancing and interest rate risks, andwhich may adversely affect our operating results and financial condition could be adversely affected if we are unable to make required payments on our debt or are unable to refinance our debt.
We are subject to risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest. There can be no assurance that we will be able to refinance any maturing indebtedness, that such refinancing would be on terms as favorable as the terms of the maturing indebtedness, or that we will be able to otherwise obtain funds by selling assets or raising equity to make required payments on maturing indebtedness. If we are unable to refinance our indebtedness at maturity or meet our payment obligations, the amount of our distributable cash flow and our financial condition would be adversely affected and, if the maturing debt is secured, the lender may foreclose on the property securing such indebtedness. Our Global Senior Credit Agreement, Japanese yen-based credit agreementfacilities and certain other debt bears interest at variable rates. Increases in interest rates would increase our interest expense under these agreements. From time to time, we may enter into interest rate swap or cap agreements. Such hedging arrangements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements. The funds required to settle any swap breakage arrangements, if any, could be significant depending on the size of the underlying financing and the applicable interest rates at the time of breakage. The failure to hedge effectively against interest rate changes may materially adversely affect our results of operations and financial position. In addition, our unconsolidated entitiesco-investment ventures may be unable to refinance indebtedness or meet payment obligations, which may impact our distributable cash flow and our financial condition and/or we may be required to recognize impairment charges of our investments.condition.
Covenants in our credit agreements could limit our flexibility and breaches of these covenants could adversely affect our financial condition.
The terms of our various credit agreements, including our Global Senior Credit Agreement and Japanese yen-based credit agreement,facilities, the indentures under which our senior notes are issued and other note agreements, require us to comply with a number of customary financial covenants, such as maintaining debt service coverage, leverage ratios, fixed charge ratios and other operating covenants including maintaining insurance coverage. These covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness. If we default under the covenant provisions and are unable to cure the default, refinance the indebtedness or meet payment obligations, the amount of our distributable cash flow, our operating results and our financial condition could be adversely affected.
Adverse changes in our credit ratings could negatively affect our financing activity.
The credit ratings of our senior unsecured notes and preferred stock are based on our operating performance, liquidity and leverage ratios, overall financial position and other factors employed by the credit rating agencies in their rating analyses of us. Our credit ratings can affect the amount of capital we can access, as well as the terms and pricing of any debt we may incur. There can be no assurance that we will be able to maintain our current credit ratings, and in the event our credit ratings are downgraded, we would likely incur higher borrowing costs and may encounter difficulty in obtaining additional financing. Also, a downgrade in our credit ratings may trigger additional payments or other negative consequences under our current and future credit facilities and debt instruments. Adverse changes in our credit ratings could negatively impact our refinancing and other capital market activities, our ability to manage debt maturities, our future growth, our financial condition, the market price of our securities, and our development and acquisition activity.
At December 31, 2014, our credit ratings were Baa1 from Moody’s and BBB+ from S&P, both with outlook stable. A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization.
We are dependent on external sources of capitalcapital..
In order to qualify as a REIT, we are required each year to distribute to our stockholders at least 90% of our REIT taxable income (determined without regard to the dividends-paid deduction and by excluding any net capital gain) and we may be subject to tax to the extent our taxable income is not fully distributed. While historically we have satisfied these distribution requirements by making cash distributions to our stockholders, we may choose to satisfy these requirements by making distributions of cash or other property, including, in limited circumstances, our own stock. For distributions with respect to taxable years ending on or before December 31, 2012,2014, and in some cases declared as late as December 31, 2013,2015, the REIT can satisfy up to 90% of the distribution requirements discussed above through the distribution of shares of our stock if certain conditions are met. Assuming we continue to satisfy these distribution requirements with cash, we may not be able to fund all future capital needs, including acquisition and development activities, from cash retained from operations and may have to rely on third-party sources of capital. Further, in order to maintain our REIT status and not have to pay federal income and excise taxes, we may need to borrow funds on a short-term basis to meet the REIT distribution requirements even if the then-prevailing market conditions are not favorable for these borrowings. These short-term borrowing needs could result from differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes, or the effect of non-deductible capital expenditures, the creation of reserves or required debt or amortization payments. Our ability to access debt and equity capital on favorable terms or at all is dependent upon a number of factors, including general market conditions, the market’s perception of our growth potential, our current and potential future earnings and cash distributions and the market price of our securities.
Our stockholders may experience dilution if we issue additional common stock.stock or units in the Operating Partnership.
Any additional future issuance of common stock or operating partnership units will reduce the percentage of our common stockstock/units owned by investors. In most circumstances, stockholdersstockholders/unitholders will not be entitled to vote on whether or not we issue additional common stock.stock/units. In addition, depending on the terms and pricing of anany additional offering of our common stockstock/units and the value of the properties, our stockholdersstockholders/unitholders may experience dilution in both book value and fair value of their common stock.stock/units.
Federal Income Tax Risks
Our failure of Prologis, Inc. to qualify as a REIT would have serious adverse consequences.
WePrologis, Inc. elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 1997. We believe we have operated so asPrologis, Inc. to qualify as a REIT under the Internal Revenue Code and believe that ourthe current organization and method of operation comply with the rules and regulations promulgated under the Internal Revenue Code to enable usPrologis, Inc. to continue to qualify as a REIT. However, it is possible that we are organized or have operated in a manner that would not allow usPrologis, Inc. to qualify as a REIT, or that our future operations could cause usPrologis, Inc. to fail to qualify. Qualification as a REIT requires us to satisfy numerous requirements (some on an annualannually and others on a quarterly basis) established under highly technical and complex sections of the Internal Revenue Code for which there are only limited judicial and administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. For example, in order to qualify as a REIT, Prologis, Inc. must derive at least 95% of its gross income in any year from qualifying sources. In addition, wePrologis, Inc. must pay dividends to ourits stockholders aggregating annually at least 90% of ourits taxable income (determined without regard to the dividends paid deduction and by excluding capital gains) and must satisfy specified asset tests on a quarterly basis. The provisions of the Internal Revenue Code and applicable Treasury regulations regarding qualification as a REIT are more complicated in our casefor Prologis, Inc. because we hold assets through the Operating Partnership.
If we failPrologis, Inc. fails to qualify as a REIT in any taxable year, we will be required to pay federal income tax (including any applicable alternative minimum tax) on taxable income at regular corporate rates. Unless we are entitled to relief under certain statutory provisions, wePrologis, Inc. would be disqualified from treatment as a REIT for the four taxable years following the year in which weit lost the qualification. If wePrologis, Inc. lost ourits REIT status, our net earnings would be significantly reduced for each of the years involved.
Furthermore, we own a direct or indirect interest in certain subsidiary REITs which elected to be taxed as REITs under Sections 856 through 860 of the Internal Revenue Code. Provided that each subsidiary REIT qualifies as a REIT, our interest in such subsidiary REIT will be treated as a qualifying real estate asset for purposes of the REIT asset tests, and any dividend income or gains derived by us from such subsidiary REIT will generally be treated as income that qualifies for purposes of the REIT gross income tests. To qualify as a REIT, the subsidiary REIT must independently satisfy all of the REIT qualification requirements. If such subsidiary REIT were to fail to qualify as a REIT, and certain relief provisions did not apply, it would be treated as a regular taxable corporation and its income would be subject to United States federal income tax. In addition, a failure of the subsidiary REIT to qualify as a REIT would have an adverse effect on ourthe ability of Prologis, Inc. to comply with the REIT income and asset tests, and thus ourits ability to qualify as a REIT.
Certain property transfers may generate prohibited transaction income, resulting in a penalty tax on gain attributable to the transaction.
From time to time, we may transfer or otherwise dispose of some of our properties, including by contributing properties to our co-investment ventures. Under the Internal Revenue Code, any gain resulting from transfers of properties we hold as inventory or primarily for sale to customers in the ordinary course of business is treated as income from a prohibited transaction subject to a 100% penalty tax. We do not believe that our transfers or disposals of property or our contributions of properties into our co-investment ventures are prohibited transactions. However, whether property is held for investment purposes is a question of fact that depends on all the facts and circumstances surrounding the particular transaction. The Internal Revenue CodeService may contend that certain transfers or dispositions of properties by us or contributions of properties into our co-investment ventures are prohibited transactions. While we believe that the Internal Revenue CodeService would not prevail in any such dispute, if the Internal Revenue Code were to argue successfully that a transfer, disposition or contribution of property constituted a prohibited transaction, we would be required to pay a 100% penalty tax on any gain allocable to us from the prohibited transaction. In addition, income from a prohibited transaction might adversely affect our ability to satisfy the income tests for qualification as a REIT.
Legislative or regulatory action could adversely affect us.
In recent years, numerous legislative, judicial and administrative changes have been made to the federal income tax taws applicable to investments in REITs and similar entities. Additional changes to tax laws are likely to continue to occur in the future, and may impact our taxation or that of our stockholders.
Other Risks
Our business and operations could suffer in the event of system failures or cyber security attacks.
Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for our internal information technology systems, our systems are vulnerable to damages from any number of sources, including energy blackouts, natural disasters, terrorism, war, telecommunication failures and cyber security attacks, such as computer viruses or unauthorized access. Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. We may also incur additional costs to remedy damages caused by such disruptions. Any compromise of our security could also result in a violation of applicable privacy and other laws, unauthorized access to information of ours and others, significant legal and financial exposure, damage to our reputation, loss or misuse of the information and a loss of confidence in our security measures, which could harm our business.
Risks Associatedassociated with our Dependencedependence on Key Personnel.key personnel.
We depend on the efforts of our executive officers and other key employees. From time to time, our personnel and their roles may change. In connection with the completion of the Merger, there were changes to our personnel and their roles. While we believe that we have retainedretain our key talent and have foundfind suitable employees to meet our personnel needs, the loss of key personnel, any change in their roles or the limitation of their availability could adversely affect our financial condition, results of operations, cash flow and ability to make distributions and payments to security holders and the market price of our securities. If we are unable to continue to attract and retain our executive officers, or if compensation costs required to attract and retain key employees become more expensive, our performance and competitive position could be materially adversely affected.
Compliance or failure to comply with the Americans with Disabilities Act and other similar regulations could result in substantial costs.
Under the Americans with Disabilities Act, places of public accommodation must meet certain federal requirements related to access and use by disabled persons. Noncompliance could result in the imposition of fines by the federal government or the award of damages to private litigants. If we are required to make unanticipated expenditures to comply with the Americans with Disabilities Act, including removing access barriers, then our cash flow and the amounts available to make distributions and payments to our security holders may be adversely affected. Our properties are also subject to various federal, state and local regulatory requirements, such as state and local fire and life-safety requirements. We could incur fines or private damage awards if we fail to comply with these requirements. While we believe that our properties are currently in material compliance with these regulatory requirements, the requirements may change or new requirements may be imposed that could require significant unanticipated expenditures by us that will affect our cash flow and results of operations.
We are subject to governmental regulations and actions that affect operating results and financial condition.
Many laws, including tax laws, and governmental regulations apply to us, our unconsolidated entities and our properties. Changes in these laws and governmental regulations, or their interpretation by agencies or the courts, could occur, which might affect our ability to conduct business.
Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting.
The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. While management will continue to reviewcontinually reviews the effectiveness of our disclosure controls and procedures
and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Deficiencies, including any material weakness, in our internal control over financial reporting that may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in the price of our securities, or otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity.
We are exposed to the potential impacts of future climate change and climate change relatedchange-related risks.
We consider that we are exposed to potential physical risks from possible future changes in climate. Our distribution facilities may be exposed to rare catastrophic weather events, such as severe storms and/or floods. If the frequency of extreme weather events increases due to climate change, our exposure to these events could increase.
We do not currently consider ourselves to be exposed to regulatory risks related to climate change, as our operations do not emit a significant amount of greenhouse gases. However, we may be adversely impacted as a real estate developer in the future by potential impacts to the supply chain and/or stricter energy efficiency standards for buildings.
ITEM 1B. Unresolved Staff Comments
None.
We are invested in real estate properties that are primarily genericpredominately industrial properties. In Japan, our industrial properties are generally multi-level centers, which is common in Japan due to the high cost and limited availability of land. Our properties are typically used for distribution, storage, packaging, assembly and light manufacturing of consumer and industrial products. Based on the square footageThe vast majority of theour operating properties included inare used by our Real Estate Operations segment at December 31, 2012 (and discussed below), all of our properties are industrial properties; consisting of 92.8% usedcustomers for bulk distribution, 4.7% used for light manufacturing and assembly, 1.0% used for flex industrial, 0.9% used for on-tarmac and 0.6% used for other purposes.distribution.
Our investment strategy focuses on providing distribution and logistics spacefacilities to customers whose businesses are tied to global trade and depend on the efficient movement of goods through the global supply chain. OurWe classify our properties are primarily located ininto two main market types,categories: global markets and regional markets. Global markets account for 84.7%regional.
We manage our business on an owned and managed basis without regard to whether a particular property is wholly-owned by us or owned by one of our co-investment ventures. We believe that the operating fundamentals of our owned and managed portfolio are consistent with those of our consolidated portfolio and therefore allow us to make business decisions based on the property operations versus our ownership. As such, we have included operating property information for Real Estate Operations and our owned and managed portfolio. The owned and managed portfolio includes the properties (based on investment balance)we consolidate and comprise approximately 30the properties owned by our unconsolidated co-investment ventures reflected at 100% of the largest and most liquid markets tied to global trade. These markets feature large population centers with high per-capita consumption rates and close proximity to airports, seaports and ground transportation systems. Regional markets account for 11.6% ofventures, not our consolidated operating properties. Similar to global markets, regional markets benefit from large population centers but typicallyproportionate share.
Included in Real Estate Operations are not as tied to the global supply chain and are often less supply constrained.
The information in the following tables is as of December 31, 2012 for our consolidated operating properties, properties in our development portfolio and land, including 157321 buildings owned by entities we consolidate but of which we own less than 100%. All of these assets are included in our Real Estate Operations segment. This includes our portfolio of operating properties we developed or are currently developing.the equity. No individual property or group of properties operating as a single business unit amounted to 10% or more of our consolidated total assets at December 31, 20122014, or generated income equal to 10% or more of our consolidated gross revenues for the year ended December 31, 2012. These2014.
Dollars and square feet in the following tables do not include properties that are owned by unconsolidated entities.in thousands.
Consolidated operating properties in the Real Estate (dollars and rentable square footage in thousands): | No. of Bldgs. | Percentage Occupied (1) | Rentable Square Footage | Investment Before Depreciation | Encumbrances (2) | |||||||||||||||||||||||||||||||||||
Americas: | ||||||||||||||||||||||||||||||||||||||||
Global Markets: | ||||||||||||||||||||||||||||||||||||||||
Consolidated - Real Estate Operations | Owned and Managed | |||||||||||||||||||||||||||||||||||||||
Operating properties | Rentable Square Footage | Gross Book Value | Encumbrances (1) | Rentable Square Footage | Gross Book Value | |||||||||||||||||||||||||||||||||||
Global Markets - Americas: | ||||||||||||||||||||||||||||||||||||||||
United States: | ||||||||||||||||||||||||||||||||||||||||
Atlanta | 78 | 86.0 | % | 10,472 | $ 424,410 | $ 75,335 | 11,455 | $ | 495,377 | $ | 76,218 | 14,343 | $ | 657,146 | ||||||||||||||||||||||||||
Baltimore/Washington | 41 | 94.6 | % | 4,492 | 299,283 | 35,188 | 5,967 | 524,429 | 115,225 | 8,073 | 706,223 | |||||||||||||||||||||||||||||
Central & Eastern PA | 11 | 97.8 | % | 5,309 | 285,152 | 69,977 | ||||||||||||||||||||||||||||||||||
Central Valley, CA | 16 | 92.4 | % | 6,575 | 333,683 | 25,590 | ||||||||||||||||||||||||||||||||||
Central Valley California | 10,093 | 553,989 | 86,451 | 10,197 | 558,138 | |||||||||||||||||||||||||||||||||||
Central & Eastern Pennsylvania | 14,925 | 927,252 | 84,543 | 14,925 | 927,252 | |||||||||||||||||||||||||||||||||||
Chicago | 154 | 91.8 | % | 25,890 | 1,469,246 | 222,846 | 28,888 | 1,620,872 | 187,287 | 35,591 | 2,137,078 | |||||||||||||||||||||||||||||
Dallas/Fort Worth | 114 | 96.0 | % | 17,633 | 774,282 | 161,134 | 20,971 | 982,684 | 160,562 | 24,405 | 1,245,974 | |||||||||||||||||||||||||||||
Houston | 57 | 98.7 | % | 6,015 | 271,037 | 55,036 | 8,574 | 461,757 | 92,131 | 12,373 | 754,346 | |||||||||||||||||||||||||||||
New Jersey/New York City | 109 | 94.3 | % | 14,187 | 1,070,086 | 184,581 | 17,364 | 1,384,633 | 134,335 | 21,926 | 1,978,072 | |||||||||||||||||||||||||||||
San Francisco Bay Area | 199 | 92.2 | % | 16,069 | 1,592,440 | 95,256 | 14,650 | 1,487,808 | 48,042 | 18,261 | 1,837,550 | |||||||||||||||||||||||||||||
Seattle | 26 | 97.5 | % | 3,386 | 317,331 | 14,292 | 3,821 | 362,005 | 47,252 | 10,923 | 1,044,750 | |||||||||||||||||||||||||||||
South Florida | 68 | 95.0 | % | 6,653 | 686,232 | 58,425 | 7,222 | 773,855 | 70,119 | 10,679 | 1,081,769 | |||||||||||||||||||||||||||||
Southern California | 227 | 98.4 | % | 42,215 | 3,740,092 | 495,623 | 48,233 | 4,223,267 | 288,407 | 58,793 | 5,295,266 | |||||||||||||||||||||||||||||
On Tarmac | 28 | 90.9 | % | 2,302 | 263,253 | 7,834 | ||||||||||||||||||||||||||||||||||
Canada | 14 | 100.0 | % | 4,690 | 464,319 | - | 7,065 | 642,728 | - | 7,065 | 642,728 | |||||||||||||||||||||||||||||
Mexico | 85 | 92.6 | % | 13,969 | 770,367 | 196,335 | ||||||||||||||||||||||||||||||||||
Regional Markets - United States: | ||||||||||||||||||||||||||||||||||||||||
Mexico: | ||||||||||||||||||||||||||||||||||||||||
Guadalajara | 60 | 4,379 | - | 5,872 | 315,122 | |||||||||||||||||||||||||||||||||||
Mexico City | 387 | 24,901 | - | 10,762 | 724,319 | |||||||||||||||||||||||||||||||||||
Monterrey | - | - | - | 3,413 | 196,639 | |||||||||||||||||||||||||||||||||||
Brazil | - | - | - | 5,266 | 414,355 | |||||||||||||||||||||||||||||||||||
Regional Markets - Americas: | ||||||||||||||||||||||||||||||||||||||||
United States: | ||||||||||||||||||||||||||||||||||||||||
Austin | 2,213 | 147,661 | 29,640 | 2,213 | 147,661 | |||||||||||||||||||||||||||||||||||
Charlotte | 2,527 | 117,250 | 21,603 | 2,527 | 117,250 | |||||||||||||||||||||||||||||||||||
Cincinnati | 17 | 97.8 | % | 3,387 | 116,234 | 44,907 | 5,899 | 256,015 | 132,023 | 5,899 | 256,015 | |||||||||||||||||||||||||||||
Columbus | 31 | 95.3 | % | 7,174 | 261,857 | 32,638 | 8,545 | 297,320 | 102,553 | 8,545 | 297,320 | |||||||||||||||||||||||||||||
Denver | 24 | 95.6 | % | 3,968 | 226,971 | 31,367 | 4,491 | 272,418 | 56,196 | 4,491 | 272,418 | |||||||||||||||||||||||||||||
Indianapolis | 22 | 93.3 | % | 2,614 | 94,862 | 41,079 | 5,095 | 206,916 | 87,282 | 5,095 | 206,916 | |||||||||||||||||||||||||||||
Las Vegas | 3,610 | 200,462 | 31,253 | 3,610 | 200,462 | |||||||||||||||||||||||||||||||||||
Louisville | 8 | 93.7 | % | 3,435 | 141,268 | 22,067 | 3,435 | 144,441 | 14,580 | 3,435 | 144,441 | |||||||||||||||||||||||||||||
Memphis | 13 | 99.8 | % | 5,236 | 170,873 | 9,091 | 5,297 | 184,815 | 6,026 | 5,297 | 184,815 | |||||||||||||||||||||||||||||
Nashville | 25 | 94.0 | % | 2,957 | 83,783 | 9,056 | 4,660 | 178,113 | 65,827 | 4,660 | 178,113 | |||||||||||||||||||||||||||||
Orlando | 26 | 88.5 | % | 3,141 | 190,981 | - | 3,488 | 234,777 | 38,633 | 3,895 | 261,761 | |||||||||||||||||||||||||||||
Phoenix | 2,139 | 116,259 | 8,208 | 2,139 | 116,259 | |||||||||||||||||||||||||||||||||||
Portland | 2,010 | 151,401 | 56,109 | 2,010 | 151,401 | |||||||||||||||||||||||||||||||||||
Reno | 3,543 | 161,482 | 33,252 | 3,543 | 161,482 | |||||||||||||||||||||||||||||||||||
San Antonio | 29 | 95.5 | % | 3,759 | 159,485 | 19,526 | 5,606 | 255,715 | 61,924 | 5,606 | 255,715 | |||||||||||||||||||||||||||||
Savannah | 1 | 100.0 | % | 346 | 16,890 | - | ||||||||||||||||||||||||||||||||||
Other Markets - United States (11 Markets): | 106 | 94.5 | % | 16,776 | 776,964 | 112,890 | ||||||||||||||||||||||||||||||||||
Mexico: | ||||||||||||||||||||||||||||||||||||||||
Juarez | - | - | - | 3,106 | 135,764 | |||||||||||||||||||||||||||||||||||
Reynosa | - | - | - | 4,385 | 205,649 | |||||||||||||||||||||||||||||||||||
Tijuana | - | - | - | 4,217 | 204,525 | |||||||||||||||||||||||||||||||||||
Other Markets - United States | 3,907 | 171,685 | 5,186 | 4,681 | 249,064 | |||||||||||||||||||||||||||||||||||
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Subtotal Americas | 1,529 | 94.7 | % | 232,650 | 15,001,381 | 2,020,073 | 266,140 | 17,566,666 | 2,140,867 | 352,221 | 24,263,758 | |||||||||||||||||||||||||||||
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Europe: | ||||||||||||||||||||||||||||||||||||||||
Global Markets: | ||||||||||||||||||||||||||||||||||||||||
Global Markets - Europe: | ||||||||||||||||||||||||||||||||||||||||
Belgium | 3 | 99.2 | % | 908 | 71,888 | 7,189 | 439 | 32,231 | - | 2,497 | 179,404 | |||||||||||||||||||||||||||||
Czech Republic | 278 | 20,142 | - | 7,737 | 518,874 | |||||||||||||||||||||||||||||||||||
France | 67 | 93.6 | % | 17,215 | 1,290,990 | 211,503 | 1,873 | 97,795 | - | 32,010 | 2,354,233 | |||||||||||||||||||||||||||||
Germany | 21 | 99.3 | % | 3,688 | 252,767 | 32,708 | 1,161 | 65,688 | - | 20,405 | 1,655,157 | |||||||||||||||||||||||||||||
Italy | 1,277 | 76,600 | - | 8,813 | 498,953 | |||||||||||||||||||||||||||||||||||
Netherlands | 16 | 89.4 | % | 3,515 | 282,811 | 25,008 | - | - | - | 14,526 | 1,197,299 | |||||||||||||||||||||||||||||
Poland | 33 | 83.6 | % | 8,081 | 432,368 | 89,666 | 2,142 | 99,331 | - | 23,056 | 1,421,752 | |||||||||||||||||||||||||||||
Spain | 21 | 83.4 | % | 5,532 | 490,378 | 36,121 | 449 | 40,213 | - | 8,191 | 577,083 | |||||||||||||||||||||||||||||
United Kingdom | 39 | 96.4 | % | 7,666 | 745,172 | 171,244 | 834 | 79,825 | - | 21,033 | 2,784,984 | |||||||||||||||||||||||||||||
Regional Markets: | ||||||||||||||||||||||||||||||||||||||||
Czech Republic | 21 | 92.1 | % | 4,369 | 317,245 | 40,548 | ||||||||||||||||||||||||||||||||||
Regional Markets - Europe: | ||||||||||||||||||||||||||||||||||||||||
Hungary | 19 | 87.0 | % | 3,178 | 178,597 | 6,550 | 285 | 17,717 | - | 5,837 | 362,611 | |||||||||||||||||||||||||||||
Italy | 23 | 85.3 | % | 7,400 | 466,725 | 78,513 | ||||||||||||||||||||||||||||||||||
Slovakia | 1 | 100.0 | % | 287 | 16,947 | - | 549 | 28,796 | - | 4,897 | 314,811 | |||||||||||||||||||||||||||||
Sweden | 4 | 100.0 | % | 2,012 | 161,522 | - | 524 | 34,264 | - | 3,807 | 305,756 | |||||||||||||||||||||||||||||
Other Markets (2 Markets) | 5 | 96.1 | % | 1,276 | 64,139 | - | ||||||||||||||||||||||||||||||||||
Other Markets - Europe | 1,275 | 58,865 | - | 1,275 | 58,865 | |||||||||||||||||||||||||||||||||||
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Subtotal Europe | 273 | 90.9 | % | 65,127 | 4,771,549 | 699,050 | 11,086 | 651,467 | - | 154,084 | 12,229,782 | |||||||||||||||||||||||||||||
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Global Markets - Asia: | ||||||||||||||||||||||||||||||||||||||||
China | 7 | 97.9 | % | 1,750 | 55,000 | - | 2,324 | 79,540 | - | 7,597 | 387,508 | |||||||||||||||||||||||||||||
Japan | 21 | 97.7 | % | 13,526 | 2,534,601 | 1,260,752 | 1,215 | 180,157 | - | 22,113 | 3,567,803 | |||||||||||||||||||||||||||||
Singapore | 5 | 100.0 | % | 942 | 149,669 | - | 959 | 140,303 | - | 959 | 140,303 | |||||||||||||||||||||||||||||
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Subtotal Asia | 33 | 97.9 | % | 16,218 | 2,739,270 | 1,260,752 | 4,498 | 400,000 | - | 30,669 | 4,095,614 | |||||||||||||||||||||||||||||
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Total operating portfolio | 1,835 | 94.1 | % | 313,995 | $ 22,512,200 | $ 3,979,875 | 281,724 | 18,618,133 | 2,140,867 | 536,974 | 40,589,154 | |||||||||||||||||||||||||||||
Value added properties (5 Markets) | 18 | 45.6 | % | 2,352 | 96,048 | - | ||||||||||||||||||||||||||||||||||
Value added properties (2) | 558 | 17,319 | - | 6,008 | 342,611 | |||||||||||||||||||||||||||||||||||
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Total operating properties | 1,853 | 93.7 | % | 316,347 | $ 22,608,248 | $ 3,979,875 | 282,282 | $ | 18,635,452 | $2,140,867 | 542,982 | $ | 40,931,765 |
Investment in Land | Development Portfolio | Investment in Land | Development Portfolio | |||||||||||||||||||||||||||||||||||||||||||||
Consolidated land and development portfolio in the (dollars and rentable square footage in thousands): | Acres | Investment | No. of Bldgs. | Percentage Leased (1) | Rentable Square Footage | Current Investment | Total Expected Investment (3) | |||||||||||||||||||||||||||||||||||||||||
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Consolidated land and development portfolio in Real Estate Operations | Acres | Estimated Build (sq. ft.) (3) | Current Investment | Rentable Square Footage | Total Expected Investment (4) | |||||||||||||||||||||||||||||||||||||||||||
Global Markets - Americas: | ||||||||||||||||||||||||||||||||||||||||||||||||
United States: | ||||||||||||||||||||||||||||||||||||||||||||||||
Atlanta | 616 | $25,656 | 1 | 100.0 | % | 1,119 | $20,539 | $43,925 | 473 | 6,619 | $ | 23,071 | 715 | $ | 30,869 | |||||||||||||||||||||||||||||||||
Baltimore/Washington | 106 | 13,137 | 2 | 40.5 | % | 171 | 15,136 | 17,078 | 39 | 400 | 1,567 | - | - | |||||||||||||||||||||||||||||||||||
Central & Eastern PA | 311 | 27,187 | 1 | 0 | % | 493 | 11,710 | 25,257 | ||||||||||||||||||||||||||||||||||||||||
Central Valley | 1,155 | 37,521 | 1 | 100.0 | % | 1,017 | 24,912 | 117,226 | ||||||||||||||||||||||||||||||||||||||||
Central Valley California | 1,025 | 19,560 | 54,016 | 1,001 | 63,614 | |||||||||||||||||||||||||||||||||||||||||||
Central & Eastern Pennsylvania | 188 | 2,474 | 26,079 | 3,009 | 149,410 | |||||||||||||||||||||||||||||||||||||||||||
Chicago | 567 | 49,233 | - | - | - | - | - | 510 | 9,479 | 38,791 | 330 | 19,912 | ||||||||||||||||||||||||||||||||||||
Dallas/Ft. Worth | 459 | 26,909 | 2 | 37.9 | % | 1,052 | 25,087 | 40,473 | 552 | 9,156 | 46,451 | 1,286 | 74,373 | |||||||||||||||||||||||||||||||||||
Houston | 47 | 5,422 | 3 | 23.5 | % | 429 | 11,769 | 24,494 | 70 | 1,112 | 8,636 | 229 | 15,459 | |||||||||||||||||||||||||||||||||||
New Jersey/New York City | 323 | 132,340 | 3 | 86.3 | % | 1,224 | 53,585 | 140,800 | 148 | 2,356 | 66,964 | 1,767 | 169,899 | |||||||||||||||||||||||||||||||||||
Seattle | - | - | 1 | 0 | % | 241 | 5,547 | 16,995 | ||||||||||||||||||||||||||||||||||||||||
San Francisco Bay Area | 66 | 1,248 | 21,372 | - | - | |||||||||||||||||||||||||||||||||||||||||||
South Florida | 377 | 148,691 | 1 | 89.2 | % | 190 | 12,606 | 15,580 | 316 | 5,629 | 158,140 | 330 | 30,626 | |||||||||||||||||||||||||||||||||||
Southern California | 882 | 184,053 | 2 | 0 | % | 1,215 | 58,400 | 74,995 | 660 | 12,993 | 116,844 | 1,818 | 131,459 | |||||||||||||||||||||||||||||||||||
Canada | 183 | 62,451 | 2 | 0 | % | 910 | 53,502 | 107,351 | 171 | 3,281 | 49,686 | 1,169 | 110,809 | |||||||||||||||||||||||||||||||||||
Mexico | 901 | 177,060 | 5 | 8.1 | % | 1,237 | 43,660 | 72,453 | ||||||||||||||||||||||||||||||||||||||||
Regional Markets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Mexico: | ||||||||||||||||||||||||||||||||||||||||||||||||
Guadalajara | 50 | 1,066 | 11,615 | 231 | 13,958 | |||||||||||||||||||||||||||||||||||||||||||
Mexico City | 301 | 5,661 | 112,503 | 1,333 | 88,783 | |||||||||||||||||||||||||||||||||||||||||||
Monterrey | 161 | 2,656 | 30,995 | 501 | 30,437 | |||||||||||||||||||||||||||||||||||||||||||
Regional Markets - Americas: | ||||||||||||||||||||||||||||||||||||||||||||||||
United States: | ||||||||||||||||||||||||||||||||||||||||||||||||
Central Florida | 129 | 25,686 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Cincinnati | 15 | 1,480 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Charlotte | 7 | 103 | 651 | 205 | 10,849 | |||||||||||||||||||||||||||||||||||||||||||
Columbus | 199 | 6,692 | - | - | - | - | - | 121 | 1,861 | 4,397 | 410 | 17,149 | ||||||||||||||||||||||||||||||||||||
Denver | 66 | 8,727 | - | - | - | - | - | 26 | 444 | 4,175 | 795 | 46,465 | ||||||||||||||||||||||||||||||||||||
Indianapolis | 127 | 4,474 | - | - | - | - | - | 13 | 231 | 981 | - | - | ||||||||||||||||||||||||||||||||||||
Las Vegas | 54 | 1,076 | 5,876 | 464 | 26,901 | |||||||||||||||||||||||||||||||||||||||||||
Memphis | 165 | 7,293 | - | - | - | - | - | 151 | 2,586 | 7,306 | 218 | 10,746 | ||||||||||||||||||||||||||||||||||||
Savannah | 229 | 13,097 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Other Markets - United States (8 Markets) | 488 | 39,052 | 1 | 0 | % | 486 | 9,730 | 22,694 | ||||||||||||||||||||||||||||||||||||||||
Orlando | 122 | 1,768 | 27,055 | 124 | 8,637 | |||||||||||||||||||||||||||||||||||||||||||
Phoenix | 38 | 698 | 3,058 | - | - | |||||||||||||||||||||||||||||||||||||||||||
Portland | 11 | 181 | 1,390 | 208 | 14,232 | |||||||||||||||||||||||||||||||||||||||||||
Reno | 117 | 1,911 | 5,116 | - | - | |||||||||||||||||||||||||||||||||||||||||||
Mexico: | ||||||||||||||||||||||||||||||||||||||||||||||||
Juarez | 137 | 2,692 | 13,864 | 210 | 11,324 | |||||||||||||||||||||||||||||||||||||||||||
Reynosa | 196 | 3,460 | 12,221 | 163 | 9,421 | |||||||||||||||||||||||||||||||||||||||||||
Tijuana | 34 | 626 | 5,723 | - | - | |||||||||||||||||||||||||||||||||||||||||||
Other Markets - United States | 401 | 6,051 | 30,552 | 740 | 46,931 | |||||||||||||||||||||||||||||||||||||||||||
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Subtotal Americas | 7,345 | 996,161 | 25 | 41.2 | % | 9,784 | 346,183 | 719,321 | 6,158 | 107,378 | 889,095 | 17,256 | 1,132,263 | |||||||||||||||||||||||||||||||||||
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Europe: | ||||||||||||||||||||||||||||||||||||||||||||||||
Global Markets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Global Markets - Europe: | ||||||||||||||||||||||||||||||||||||||||||||||||
Belgium | 30 | 10,363 | - | - | - | - | - | 27 | 526 | 9,534 | - | - | ||||||||||||||||||||||||||||||||||||
Czech Republic | 217 | 3,504 | 42,074 | 1,132 | 69,935 | |||||||||||||||||||||||||||||||||||||||||||
France | 503 | 89,911 | 3 | 48.4 | % | 769 | 37,924 | 55,543 | 449 | 8,398 | 78,831 | 880 | 65,637 | |||||||||||||||||||||||||||||||||||
Germany | 116 | 22,405 | - | - | - | - | - | 58 | 1,161 | 13,540 | 282 | 17,369 | ||||||||||||||||||||||||||||||||||||
Italy | 107 | 2,451 | 30,084 | - | - | |||||||||||||||||||||||||||||||||||||||||||
Netherlands | 68 | 67,839 | - | - | - | - | - | 56 | 1,538 | 47,789 | 657 | 45,817 | ||||||||||||||||||||||||||||||||||||
Poland | 775 | 96,606 | 3 | 100.0 | % | 466 | 11,375 | 25,420 | 634 | 12,215 | 74,576 | 486 | 28,292 | |||||||||||||||||||||||||||||||||||
Spain | 100 | 15,717 | - | - | - | - | - | 100 | 2,021 | 16,507 | 139 | 15,959 | ||||||||||||||||||||||||||||||||||||
United Kingdom | 987 | 257,055 | 3 | 100.0 | % | 698 | 36,968 | 76,575 | 609 | 9,401 | 211,340 | 2,719 | 370,444 | |||||||||||||||||||||||||||||||||||
Regional Markets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Czech Republic | 247 | 40,530 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Regional Markets - Europe: | ||||||||||||||||||||||||||||||||||||||||||||||||
Hungary | 338 | 38,111 | - | - | - | - | - | 335 | 5,604 | 35,348 | - | - | ||||||||||||||||||||||||||||||||||||
Italy | 107 | 32,840 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Slovakia | 95 | 16,915 | 1 | 0.5 | % | 260 | 13,057 | 14,648 | 78 | 1,708 | 13,076 | 255 | 13,154 | |||||||||||||||||||||||||||||||||||
Other markets (2 Markets) | 119 | 21,381 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Sweden | - | - | - | 447 | 35,649 | |||||||||||||||||||||||||||||||||||||||||||
Other Markets - Europe | 118 | 2,600 | 19,641 | - | - | |||||||||||||||||||||||||||||||||||||||||||
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Subtotal Europe | 3,485 | 709,673 | 10 | 70.1 | % | 2,193 | 99,324 | 172,186 | 2,788 | 51,127 | 592,340 | 6,997 | 662,256 | |||||||||||||||||||||||||||||||||||
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Asia: | ||||||||||||||||||||||||||||||||||||||||||||||||
Global Markets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Global Markets - Asia: | ||||||||||||||||||||||||||||||||||||||||||||||||
China | 18 | 8,459 | 3 | 77.0 | % | 568 | 5,373 | 22,913 | 18 | 172 | 5,889 | - | - | |||||||||||||||||||||||||||||||||||
Japan | 67 | 80,071 | 7 | 79.2 | % | 5,456 | 500,763 | 804,534 | 53 | 2,423 | 90,462 | 6,039 | 747,128 | |||||||||||||||||||||||||||||||||||
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Subtotal Asia | 85 | 88,530 | 10 | 79.0 | % | 6,024 | 506,136 | 827,447 | 71 | 2,595 | 96,351 | 6,039 | 747,128 | |||||||||||||||||||||||||||||||||||
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Total land and development portfolio | 10,915 | $ 1,794,364 | 45 | 57.4 | % | 18,001 | $ 951,643 | $ 1,718,954 | 9,017 | 161,100 | $ | 1,577,786 | 30,292 | $ | 2,541,647 |
The following is a summary of our investment in consolidated real estate properties at December 31, 2012:2014 (in thousands):
Investment Before Depreciation (in thousands) | Investment Before Depreciation | |||||||
Industrial operating properties | $ | 22,608,248 | $ | 18,635,452 | ||||
Development portfolio, including cost of land | 951,643 | 1,473,980 | ||||||
Land | 1,794,364 | 1,577,786 | ||||||
Other real estate investments | 454,868 | 502,927 | ||||||
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Total | $ | 25,809,123 | ||||||
Total consolidated real estate properties | $ | 22,190,145 |
(1) |
(2) | Value-added properties represent properties that are expected to be repurposed to a better use or acquired properties with opportunities to improve operating challenges and create higher value. |
(3) | Represents the estimated finished square feet available for rent upon development of an industrial building on existing parcels of land included in this table. |
(4) | Represents the total expected investment when the property under development is completed and leased. This includes the cost of land and development and leasing costs. At December 31, 2014, 65% of the properties under development in the development portfolio were expected to be complete by December 31, 2015, and 25% of the properties in the development portfolio were already completed but not yet stabilized. A property is defined as stabilized when it has been completed for one year or is 90% occupied. |
Included in other real estate investments are: (i) certain non-industrial real estate; (ii) our corporate office buildings; (iii) |
We generally lease our properties on a long term basis (with a weighted average lease term of seven years). The following table summarizes the lease expirations of our consolidated operating portfolio for leases in place at December 201231, 2014, without giving effect to the exercise of renewal options or termination rights, if any (dollars and February 2013, we announced the formation of two new co-investment venturessquare feet in Europe and Japan, respectively. We have 207 operating properties aggregating approximately $5.0 billion that we have contributed or expect to contribute these two entities in 2013. See further discussion below under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”thousands):
Number of Leases | Occupied Square Feet | Net Effective Rent | ||||||||||||||||||
Year | $ | % of Total | $ Per Square Foot | |||||||||||||||||
2015 | 851 | 42,596 | $ | 185,671 | 15.7% | $ | 4.36 | |||||||||||||
2016 | 837 | 53,225 | 217,042 | 18.3% | 4.08 | |||||||||||||||
2017 | 773 | 51,082 | 224,117 | 18.9% | 4.39 | |||||||||||||||
2018 | 484 | 36,944 | 173,210 | 14.6% | 4.69 | |||||||||||||||
2019 | 395 | 30,749 | 138,710 | 11.7% | 4.51 | |||||||||||||||
2020 | 183 | 13,529 | 65,701 | 5.6% | 4.86 | |||||||||||||||
2021 | 92 | 10,334 | 43,440 | 3.7% | 4.20 | |||||||||||||||
2022 | 37 | 5,116 | 22,695 | 1.9% | 4.44 | |||||||||||||||
2023 | 41 | 6,145 | 30,735 | 2.6% | 5.00 | |||||||||||||||
2024 | 32 | 6,169 | 29,425 | 2.5% | 4.77 | |||||||||||||||
Thereafter | 38 | 9,509 | 52,927 | 4.5% | 5.60 | |||||||||||||||
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3,763 | 265,398 | $ | 1,183,673 | 100% | $ | 4.46 | ||||||||||||||
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Month to month | 181 | 6,126 | ||||||||||||||||||
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Total | 3,944 | 271,524 |
Unconsolidated Co-Investment Ventures
At December 31, 2012, we hadIncluded in our owned and managed portfolio are investments in real estate properties primarily industrial properties that we also manage,hold through our equity investments in unconsolidated co-investment ventures. These investments include 1,163ventures, primarily industrial properties aggregating 208.8 million square feet andthat we also manage. Below is a total gross book valuesummary of operating buildingsour unconsolidated co-investment ventures, which represents 100% of $17.6 billion. See further discussion inthe venture, not our proportionate share, at December 31, 2014 (in thousands):
Operating Properties | Development Portfolio - Total Expected Investment | Investment in Land | ||||||||||||||
Unconsolidated Co-Investment Venture | Square Feet | Gross Book Value | ||||||||||||||
Americas: | ||||||||||||||||
Prologis Targeted U.S. Logistics Fund | 50,491 | $ | 4,592,157 | $ | - | $ | - | |||||||||
FIBRA Prologis | 31,364 | 1,755,544 | 11,895 | 1,230 | ||||||||||||
Prologis Brazil Logistics Partners Fund (“Brazil Fund”) and related joint ventures | 5,266 | 414,355 | 154,613 | 147,272 | ||||||||||||
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Subtotal Americas | 87,121 | 6,762,056 | 166,508 | 148,502 | ||||||||||||
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Europe: | ||||||||||||||||
Prologis Targeted Europe Logistics Fund | 15,535 | 1,832,926 | - | - | ||||||||||||
Prologis European Properties Fund II | 68,928 | 5,516,778 | 6,231 | 2,475 | ||||||||||||
Europe Logistics Venture 1 | 5,257 | 405,761 | - | - | ||||||||||||
Prologis European Logistics Partners Sàrl | 57,688 | 4,083,178 | 17,985 | 9,847 | ||||||||||||
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Subtotal Europe | 147,408 | 11,838,643 | 24,216 | 12,322 | ||||||||||||
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Asia: | ||||||||||||||||
Nippon Prologis REIT | 20,898 | 3,387,646 | - | - | ||||||||||||
Prologis China Logistics Venture | 5,273 | 307,968 | 414,299 | 58,758 | ||||||||||||
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Subtotal Asia | 26,171 | 3,695,614 | 414,299 | 58,758 | ||||||||||||
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Total | 260,700 | $ | 22,296,313 | $ | 605,023 | $ | 219,582 |
For more information regarding our unconsolidated co-investment ventures, see Note 65 to ourthe Consolidated Financial Statements in Item 8.
From time to time, we and our unconsolidated entitiesco-investment ventures are parties to a variety of legal proceedings arising in the ordinary course of business. We believe that, with respect to any such matters thatto which we are currently a party, to, the ultimate disposition of any such matter will not result in a material adverse effect on our business, financial position or results of operations.
ITEM 4. Mine Safety Disclosures
Not Applicable
PART II
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information and Holders
Our common stock is listed on the NYSE under the symbol “PLD”.“PLD.” The following table sets forth the high and low sale price of theour common stock, of Prologis, Inc. (AMB pre-Merger), as reported in the NYSE Composite Tape, and the declared dividends per common share, for the periods indicated.
High | Low | Dividends (1) | High | Low | Dividends | |||||||||||||||||||
2011 | ||||||||||||||||||||||||
First Quarter (1) | $ | 36.47 | $ | 31.75 | $ | 0.28 | ||||||||||||||||||
Second Quarter (1) | 37.44 | 31.76 | 0.28 | |||||||||||||||||||||
Third Quarter | 37.46 | 23.94 | 0.28 | |||||||||||||||||||||
Fourth Quarter | 30.56 | 21.74 | 0.28 | |||||||||||||||||||||
2012 | ||||||||||||||||||||||||
2013 | ||||||||||||||||||||||||
First Quarter | $ | 36.03 | $ | 28.16 | $ | 0.28 | $ | 41.02 | $ | 37.04 | $ | 0.28 | ||||||||||||
Second Quarter | 36.62 | 30.03 | 0.28 | 45.52 | 35.09 | 0.28 | ||||||||||||||||||
Third Quarter | 37.58 | 31.03 | 0.28 | 40.58 | 34.60 | 0.28 | ||||||||||||||||||
Fourth Quarter | 36.80 | 32.31 | 0.28 | 40.99 | 35.71 | 0.28 | ||||||||||||||||||
2013 | ||||||||||||||||||||||||
First Quarter (through February 22) | $ | 40.74 | $ | 37.35 | $ | 0.28 | (2) | |||||||||||||||||
2014 | ||||||||||||||||||||||||
First Quarter | $ | 42.10 | $ | 36.33 | $ | 0.33 | ||||||||||||||||||
Second Quarter | 42.66 | 39.72 | 0.33 | |||||||||||||||||||||
Third Quarter | 42.38 | 37.28 | 0.33 | |||||||||||||||||||||
Fourth Quarter | 44.05 | 37.12 | 0.33 |
Our future common stock dividends may vary and will be determined by our Board upon the circumstances prevailing at the time, including our financial condition, operating results, estimated taxable income and REIT distribution requirements, and may be adjusted at the discretion of the Board during the year.
On February 22, 2013,20, 2015, we had approximately 462,807,491512,138,000 shares of common stock outstanding, which were held of record by approximately 6,2005,290 stockholders.
Stock Performance Graph
The following line graph compares the change in Prologis, Inc. cumulative total stockholder’s return on shares of its common stock from December 31, 20072009, to the cumulative total return of the Standard and Poor’sS&P 500 Stock Index and the FTSE NAREIT Equity REITs Index from December 31, 20072009 to December 31, 2012.2014. The graph assumes an initial investment of $100 in theour common stock of Prologis, Inc. (AMB pre-Merger) and each of the indices on December 31, 20072009, and, as required by the SEC, the reinvestment of all dividends. The return shown on the graph is not necessarily indicative of future performance.
*$100 invested on 12/31/0709 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
Copyright© 20132015 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.
This graph and the accompanying text are not “soliciting material,” are not deemed filed with the SEC and are not to be incorporated by reference in any filing by the company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
In order to comply with the REIT requirements of the Internal Revenue Code, we are generally required to make common and preferred stock dividends (other than capital gain distributions) to our stockholders in amounts that together at least equal (i) the sum of (a) 90% of our “REIT taxable income” computed without regard to the dividends paid deduction and net capital gains and (b) 90% of the net income (after tax), if any, from foreclosure property, minus (ii) certain excess non-cash income. Our common stock distribution policy is to distribute a percentage of our cash flow that ensures that we will meet the distribution requirements of the Internal Revenue Code and that allows us to also retain cash to meet other needs, such as capital improvements and other investment activities.
In 2012, we paid a quarterly cash dividend of $0.28 per common share. Our future common stock dividends may vary and will be determined by our Board upon the circumstances prevailing at the time, including our financial condition, operating results and REIT distribution requirements, and may be adjusted at the discretion of the Board during the year.
In addition to common stock, atAt December 31, 2012,2014, we had sevenone series of preferred stock outstanding (“Series– the “series Q preferred stock.” On April 19, 2013, we redeemed all of the outstanding series L, Preferred Stock”, “Series M, Preferred Stock”, “Series O, Preferred Stock”, “Series P, Preferred Stock”, “Series Q Preferred Stock”, “Series R Preferred Stock” and “Series S Preferred Stock”).
Holders of each series of preferred stock outstanding have limited voting rights, subject to certain conditions, and are entitled to receive cumulative preferential dividends based upon each series’ respective liquidation preference. Dividends for Series Q, R, and S are payable quarterly in arrears on the last day of March, June, September and December. Dividends for Series L, M, O and P are payable quarterly in arrears on the 15th day of April, July, October and January. Dividends on preferred stock are payable when, and if, they have been declared by the Board, out of funds legally available for payment of dividends. After the respective redemption dates, each series of preferred stock can be redeemed at our option. With respect to the payment of dividends, each series of preferred stock ranks on parity with our other series of preferred stock.
The following table sets forth the Company’s dividends paid or payable per share for the years ended December 31, 2012 and 2011:31:
Years Ended December 31, | ||||||||
2012 | 2011(1) | |||||||
Series L Preferred stock | $ | 1.63 | $ | 1.63 | ||||
Series M Preferred stock | $ | 1.69 | $ | 1.69 | ||||
Series O Preferred stock | $ | 1.75 | $ | 1.75 | ||||
Series P Preferred stock | $ | 1.71 | $ | 1.71 | ||||
Series Q Preferred stock | $ | 4.27 | $ | 3.20 | ||||
Series R Preferred stock | $ | 1.69 | $ | 1.27 | ||||
Series S Preferred stock | $ | 1.69 | $ | 1.27 |
Pursuant to the terms of our preferred stock, we are restricted from declaring or paying any dividend with respect to our common stock unless and until all cumulative dividends with respect to the preferred stock have been paid and sufficient funds have been set aside for dividends that have been declared for the relevant dividend period with respect to the preferred stock.
2014 | 2013 | |||||||
Series L preferred stock | n/a | $ | 0.41 | |||||
Series M, R and S preferred stock | n/a | $ | 0.42 | |||||
Series O preferred stock | n/a | $ | 0.44 | |||||
Series P preferred stock | n/a | $ | 0.43 | |||||
Series Q preferred stock | $ | 4.27 | $ | 4.27 |
For more information regarding our dividends, see Note 1110 to ourthe Consolidated Financial Statements in Item 8.
Securities Authorized for Issuance Under Equity Compensation Plans
For information regarding securities authorized for issuance under our equity compensation plans, see Notes 1110 and 1413 to ourthe Consolidated Financial Statements in Item 8.
Common Stock Plans
SeeFurther information relative to our 2013equity compensation plans will be provided in our 2015 Proxy Statement or our subsequentin an amendment of this Form 10-K for further information relative to our equity compensation plans.
ITEM 6. Selected Financial Data
The following table sets forth selected financial data related to our historical financial condition and results of operations for 2012both Prologis, Inc. and the four preceding years. As previously discussed, since Prologis was the accounting acquirer in the Merger, the historical results of Prologis are included for the entire period presented and AMB’s results are included subsequent to the Merger. Certain amounts for the years prior to 2012 presented in the table below have been reclassified to conform to the 2012 financial statement presentation and to reflect discontinued operations.Operating Partnership. The amounts in the tables below are in millions, except for per shareshare/unit amounts.
Prologis, Inc.
Years Ended December 31, | ||||||||||||||||||||
2012 | 2011 (1) | 2010 | 2009 | 2008 | ||||||||||||||||
Operating Data: | ||||||||||||||||||||
Total revenues (2) | $ | 2,006 | $ | 1,451 | $ | 840 | $ | 987 | $ | 5,329 | ||||||||||
Total expenses (2) | $ | 1,898 | $ | 1,347 | $ | 1,454 | $ | 1,045 | $ | 4,851 | ||||||||||
Operating income (loss) (2)(3) | $ | 108 | $ | 104 | $ | (614) | $ | (58) | $ | 478 | ||||||||||
Interest expense | $ | 507 | $ | 468 | $ | 461 | $ | 373 | $ | 384 | ||||||||||
Earnings (loss) from continuing operations (3) | $ | (93) | $ | (267) | $ | (1,601) | $ | (368) | $ | (379) | ||||||||||
Discontinued operations (3) | $ | 63 | $ | 109 | $ | 331 | $ | 392 | $ | (71) | ||||||||||
Consolidated net earnings (loss) (3) | $ | (30) | $ | (158) | $ | (1,270) | $ | 24 | $ | (450) | ||||||||||
Net earnings (loss) attributable to common stockholders (3) | $ | (81) | $ | (188) | $ | (1,296) | $ | (3) | $ | (479) | ||||||||||
Net earnings (loss) per share attributable to common stockholders — Basic: | ||||||||||||||||||||
Continuing operations (4) | $ | (0.32) | $ | (0.80) | $ | (7.41) | $ | (2.19) | $ | (3.47) | ||||||||||
Discontinued operations (4) | 0.14 | 0.29 | 1.51 | 2.18 | (0.61) | |||||||||||||||
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Net earnings (loss) per share attributable to common stockholders - Basic (3)(4) | $ | (0.18) | $ | (0.51) | $ | (5.90) | $ | (0.01) | $ | (4.08) | ||||||||||
Net earnings (loss) per share attributable to common stockholders - Diluted: | ||||||||||||||||||||
Continuing operations (4) | $ | (0.32) | $ | (0.80) | $ | (7.41) | $ | (2.19) | $ | (3.47) | ||||||||||
Discontinued operations (4) | 0.14 | 0.29 | 1.51 | 2.18 | (0.61) | |||||||||||||||
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Net earnings (loss) per share attributable to common stockholders — Diluted (3)(4) | $ | (0.18) | $ | (0.51) | $ | (5.90) | $ | (0.01) | $ | (4.08) | ||||||||||
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Weighted average common shares outstanding: | ||||||||||||||||||||
Basic (4) | 460 | 371 | 220 | 180 | 117 | |||||||||||||||
Diluted (4) | 460 | 371 | 220 | 180 | 117 | |||||||||||||||
Common Share Distributions: | ||||||||||||||||||||
Common share cash distributions paid | $ | 520 | $ | 387 | $ | 281 | $ | 272 | $ | 543 | ||||||||||
Common share distributions per share (4) | $ | 1.12 | $ | 1.06 | $ | 1.25 | $ | 1.57 | $ | 4.63 | ||||||||||
FFO (5): | ||||||||||||||||||||
Reconciliation of net earnings (loss) to FFO: | ||||||||||||||||||||
Net earnings (loss) attributable to common shares (3) | $ | (81) | $ | (188) | $ | (1,296) | $ | (3) | $ | (479) | ||||||||||
Total NAREIT defined adjustments | 633 | 660 | 368 | 260 | 449 | |||||||||||||||
Total our defined adjustments | - | (60) | (46) | (71) | 164 | |||||||||||||||
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FFO attributable to common shares as defined by Prologis | $ | 552 | $ | 412 | $ | (974) | $ | 186 | $ | 134 | ||||||||||
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Cash Flow Data: | ||||||||||||||||||||
Net cash provided by operating activities (2) | $ | 463 | $ | 207 | $ | 241 | $ | 89 | $ | 888 | ||||||||||
Net cash provided by (used in) investing activities (2) | $ | 530 | $ | (233) | $ | 733 | $ | 1,235 | $ | (1,347) | ||||||||||
Net cash provided by (used in) financing activities | $ | (1,072) | $ | 163 | $ | (970) | $ | (1,463) | $ | 358 |
As of December 31, | ||||||||||||||||||||
2012 | 2011 (1) | 2010 | 2009 | 2008 | ||||||||||||||||
Financial Position: | ||||||||||||||||||||
Real estate properties, excluding land, before depreciation | $ | 24,015 | $ | 22,803 | $ | 11,346 | $ | 12,606 | $ | 13,234 | ||||||||||
Land | $ | 1,794 | $ | 1,984 | $ | 1,534 | $ | 2,574 | $ | 2,483 | ||||||||||
Net investments in properties | $ | 23,328 | $ | 22,630 | $ | 11,284 | $ | 13,508 | $ | 14,134 | ||||||||||
Investments in and advances to unconsolidated entities | $ | 2,196 | $ | 2,858 | $ | 2,025 | $ | 2,107 | $ | 2,195 | ||||||||||
Total assets | $ | 27,310 | $ | 27,724 | $ | 14,903 | $ | 16,797 | $ | 19,210 | ||||||||||
Total debt | $ | 11,791 | $ | 11,382 | $ | 6,506 | $ | 7,978 | $ | 10,711 | ||||||||||
Total liabilities | $ | 13,537 | $ | 13,268 | $ | 7,382 | $ | 8,790 | $ | 12,452 | ||||||||||
Noncontrolling interests | $ | 704 | $ | 794 | $ | 15 | $ | 20 | $ | 20 | ||||||||||
Stockholders’ equity | $ | 13,069 | $ | 13,662 | $ | 7,505 | $ | 7,987 | $ | 6,738 | ||||||||||
Number of common shares outstanding (4) | 462 | 459 | 254 | 212 | 119 |
Operating Partnership
Years Ended December 31, | ||||||||||||||||||||
2012 | 2011 (1) | 2010 | 2009 | 2008 | ||||||||||||||||
Operating Data: | ||||||||||||||||||||
Total revenues (2) | $ | 2,006 | $ | 1,451 | $ | 840 | $ | 987 | $ | 5,329 | ||||||||||
Total expenses (2) | $ | 1,898 | $ | 1,347 | $ | 1,454 | $ | 1,045 | $ | 4,851 | ||||||||||
Operating income (loss) (2)(3) | $ | 108 | $ | 104 | $ | (614 | ) | $ | (58 | ) | $ | 478 | ||||||||
Interest expense | $ | 507 | $ | 468 | $ | 461 | $ | 373 | $ | 384 | ||||||||||
Earnings (loss) from continuing operations (3) | $ | (93 | ) | $ | (267 | ) | $ | (1,601 | ) | $ | (368 | ) | $ | (379 | ) | |||||
Discontinued operations (3) | $ | 63 | $ | 109 | $ | 331 | $ | 392 | $ | (71 | ) | |||||||||
Consolidated net earnings (loss) (3) | $ | (30 | ) | $ | (158 | ) | $ | (1,270 | ) | $ | 24 | $ | (450 | ) | ||||||
Net earnings (loss) attributable to common unitholders (3) | $ | (81 | ) | $ | (188 | ) | $ | (1,296 | ) | $ | (3 | ) | $ | (479 | ) | |||||
Net earnings (loss) per unit attributable to common unitholders - Basic: | ||||||||||||||||||||
Continuing operations (4) | $ | (0.32 | ) | $ | (0.80 | ) | $ | (7.41 | ) | $ | (2.19 | ) | $ | (3.47 | ) | |||||
Discontinued operations (4) | 0.14 | 0.29 | 1.51 | 2.18 | (0.61 | ) | ||||||||||||||
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Net earnings (loss) per unit attributable to common unitholders - Basic (3)(4) | $ | (0.18 | ) | $ | (0.51 | ) | $ | (5.90 | ) | $ | (0.01 | ) | $ | (4.08 | ) | |||||
Net earnings (loss) per unit attributable to common unitholders - Diluted: | ||||||||||||||||||||
Continuing operations (4) | $ | (0.32 | ) | $ | (0.80 | ) | $ | (7.41 | ) | $ | (2.19 | ) | $ | (3.47 | ) | |||||
Discontinued operations (4) | 0.14 | 0.29 | 1.51 | 2.18 | (0.61 | ) | ||||||||||||||
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Net earnings (loss) per unit attributable to common unitholders - Diluted (3)(4) | $ | (0.18 | ) | $ | (0.51 | ) | $ | (5.90 | ) | $ | (0.01 | ) | $ | (4.08 | ) | |||||
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Weighted average common units outstanding: | ||||||||||||||||||||
Basic (4) | 462 | 372 | 220 | 180 | 117 | |||||||||||||||
Diluted (4) | 462 | 372 | 220 | 180 | 117 | |||||||||||||||
Common Unit Distributions: | ||||||||||||||||||||
Common unit cash distributions paid | $ | 528 | $ | 388 | $ | 281 | $ | 272 | $ | 543 | ||||||||||
Common unit distributions per unit (4) | $ | 1.12 | $ | 1.06 | $ | 1.25 | $ | 1.57 | $ | 4.63 | ||||||||||
FFO (5): | ||||||||||||||||||||
Reconciliation of net earnings (loss) to FFO: | ||||||||||||||||||||
Net earnings (loss) attributable to common units (3) | $ | (81 | ) | $ | (188 | ) | $ | (1,296 | ) | $ | (3 | ) | $ | (479 | ) | |||||
Total NAREIT defined adjustments | 633 | 660 | 368 | 260 | 449 | |||||||||||||||
Total our defined adjustments | - | (60 | ) | (46 | ) | (71 | ) | 164 | ||||||||||||
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FFO attributable to common units as defined by Prologis | $ | 552 | $ | 412 | $ | (974 | ) | $ | 186 | $ | 134 | |||||||||
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Cash Flow Data: | ||||||||||||||||||||
Net cash provided by operating activities (2) | $ | 463 | $ | 207 | $ | 241 | $ | 89 | $ | 888 | ||||||||||
Net cash provided by (used in) investing activities (2) | $ | 530 | $ | (233 | ) | $ | 733 | $ | 1,235 | $ | (1,347 | ) | ||||||||
Net cash provided by (used in) financing activities | $ | (1,072 | ) | $ | 163 | $ | (970 | ) | $ | (1,463 | ) | $ | 358 |
As of December 31, | ||||||||||||||||||||
2012 | 2011 (1) | 2010 | 2009 | 2008 | ||||||||||||||||
Financial Position: | ||||||||||||||||||||
Real estate properties, excluding land, before depreciation | $ | 24,015 | $ | 22,803 | $ | 11,346 | $ | 12,606 | $ | 13,234 | ||||||||||
Land | $ | 1,794 | $ | 1,984 | $ | 1,534 | $ | 2,574 | $ | 2,483 | ||||||||||
Net investments in properties | $ | 23,328 | $ | 22,630 | $ | 11,284 | $ | 13,508 | $ | 14,134 | ||||||||||
Investments in and advances to unconsolidated entities | $ | 2,196 | $ | 2,858 | $ | 2,025 | $ | 2,107 | $ | 2,195 | ||||||||||
Total assets | $ | 27,310 | $ | 27,724 | $ | 14,903 | $ | 16,797 | $ | 19,210 | ||||||||||
Total debt | $ | 11,791 | $ | 11,382 | $ | 6,506 | $ | 7,978 | $ | 10,711 | ||||||||||
Total liabilities | $ | 13,537 | $ | 13,268 | $ | 7,382 | $ | 8,790 | $ | 12,452 | ||||||||||
Noncontrolling interests | $ | 653 | $ | 735 | $ | 15 | $ | 20 | $ | 20 | ||||||||||
Partner’s capital | $ | 13,120 | $ | 13,721 | $ | 7,505 | $ | 7,987 | $ | 6,738 | ||||||||||
Number of common units outstanding (4) | 464 | 461 | 254 | 212 | 119 |
Years Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 (1) | 2010 (2) | ||||||||||||||||
Operating Data: | ||||||||||||||||||||
Total revenues | $ | 1,761 | $ | 1,750 | $ | 1,961 | $ | 1,422 | $ | 827 | ||||||||||
Earnings (loss) from continuing operations (3) | $ | 739 | $ | 230 | $ | (106) | $ | (275) | $ | (1,605) | ||||||||||
Net earnings (loss) per share attributable to common stock/unitholders - Basic (3): | ||||||||||||||||||||
Continuing operations (4) | $ | 1.25 | $ | 0.40 | $ | (0.35) | $ | (0.83) | $ | (7.42) | ||||||||||
Discontinued operations (4)(5) | $ | - | $ | 0.25 | $ | 0.17 | $ | 0.32 | $ | 1.52 | ||||||||||
Net earnings (loss) per share attributable to common stock/unitholders - Basic | $ | 1.25 | $ | 0.65 | $ | (0.18) | $ | (0.51) | $ | (5.90) | ||||||||||
Net earnings (loss) per share attributable to common stock/unitholders - Diluted (3): | ||||||||||||||||||||
Continuing operations | $ | 1.24 | $ | 0.39 | $ | (0.34) | $ | (0.82) | $ | (7.42) | ||||||||||
Discontinued operations (5) | $ | - | $ | 0.25 | $ | 0.16 | $ | 0.31 | $ | 1.52 | ||||||||||
Net earnings (loss) per share attributable to common stock/unitholders - Diluted | $ | 1.24 | $ | 0.64 | $ | (0.18) | $ | (0.51) | $ | (5.90) | ||||||||||
Common share/unit distributions per share/unit (3) | $ | 1.32 | $ | 1.12 | $ | 1.12 | $ | 1.06 | $ | 1.25 | ||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Total assets | $ | 25,818 | $ | 24,572 | $ | 27,310 | $ | 27,724 | $ | 14,903 | ||||||||||
Total debt | $ | 9,380 | $ | 9,011 | $ | 11,791 | $ | 11,382 | $ | 6,506 | ||||||||||
FFO (6): | ||||||||||||||||||||
Reconciliation of net earnings (loss) to FFO: | ||||||||||||||||||||
Net earnings (loss) attributable to common shares | $ | 622 | $ | 315 | $ | (81) | $ | (188) | $ | (1,296) | ||||||||||
Total NAREIT defined adjustments | 299 | 504 | 633 | 660 | 368 | |||||||||||||||
Total our defined adjustments | (33) | 36 | - | (60) | (46) | |||||||||||||||
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FFO, as defined by Prologis | $ | 888 | $ | 855 | $ | 552 | $ | 412 | $ | (974) | ||||||||||
Total core defined adjustments | 65 | (42) | 262 | 182 | 1,255 | |||||||||||||||
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Core FFO (6) | $ | 953 | $ | 813 | $ | 814 | $ | 594 | $ | 281 |
(1) | In 2011, |
(2) |
(3) |
goodwill. The historical shares and units of ProLogis were adjusted by the Merger exchange ratio of 0.4464 for the periods prior to the Merger. As a result, the per share/unit calculations |
(4) | For 2014 and 2013, the amounts for the Operating Partnership were the same as Prologis, Inc. Net earnings (loss) attributable to common unitholders for the Operating Partnership was $(0.34) and $0.16 for continuing operations and discontinued operations, respectively, in 2012, and was $(0.82) and $0.31 for continuing operations and discontinued operations, respectively, in 2011. Pre-Merger, there was no Operating Partnership. |
(5) | In 2014, the accounting standard changed for classifying and reporting discontinued operations and as such, none of our dispositions in 2014 met the qualifications to be reported as discontinued operations. |
(6) | FFO; FFO, as defined by Prologis and Core FFO are non-GAAP measures used in the real estate industry. See definitions and a complete reconciliation of net earnings to FFO and Core FFO in |
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with ourthe Consolidated Financial Statements included in Item 8 of this report and the matters described under “ItemItem 1A. Risk Factors”.Factors.
AtWe believe the timescale and quality of our operating platform, the Merger,skills of our team and the strength of our balance sheet give us unique competitive advantages. Our plan to grow revenue, earnings, net operating income (“NOI”), cash flows and Core FFO (see below for definition) is based on:
• | Rising Rents.Market rents are increasing across many of our markets. We expect growth to continue as demand for logistics facilities is strong across the globe. As many of our leases originated during low rent period following the global financial crisis, there is considerable room for growth of in-place leases, which translates into increased NOI, earnings and cash flow. We had positive rent change on rollovers (when comparing the net effective rent of the new lease to the prior lease for the same space) during each quarter of 2014, ranging between 6.2% and 9.7%, and the fourth quarter marked the eighth consecutive quarter of positive rental increases. |
• | Value Creation from Development.We believe a successful development program involves maintaining control of well-positioned land. Based on our current estimates, our land bank has the potential to support the development of nearly 180 million additional square feet. We believe the carrying value of our land bank is below its current fair value, and we expect to realize this value going forward through development or land sales. During 2014, in our owned and managed portfolio, we stabilized development projects with a total expected investment of $1.1 billion. We estimate that post-stabilization, the value of these buildings will be approximately 23.0% more than their book value or the cost to develop (defined as estimated margin and calculated using estimated yield and capitalization rates from our underwriting models). |
• | Economies of Scale from Growth in Assets Under Management.We believe we have the infrastructure and an acquisition pipeline that will allow us to increase our investments in real estate, with minimal increases to general and administrative expenses. During 2014, our owned and managed real estate assets increased through the acquisition of $1.5 billion of buildings, principally in our unconsolidated ventures in Europe, and development starts with a total expected investment of $2.0 billion; offset partially by dispositions to third parties of $1.5 billion. With all of this activity, we had minimal incremental gross general and administrative expenses. |
Summary of 2014
During the year ended December 31, 2014, we established our key strategic priorities to guide our path throughcompleted the end of 2013. These priorities were:following activities as further described in the Consolidated Financial Statements:
to align ourIn January, we closed on a U.S. co-investment venture, Prologis U.S. Logistics Venture (“USLV”), in which we have a 55% equity ownership and consolidate for financial reporting purposes. At closing, the venture acquired a portfolio with our investment strategy while serving the needs of our customers;66 operating properties from us, aggregating 12.8 million square feet for a purchase price of $1.0 billion.
to strengthen our financial positionIn June, we completed the initial public offering for FIBRA Prologis, a Mexican REIT on the Mexican Stock Exchange. In connection with the offering, FIBRA Prologis purchased its initial portfolio of $1.6 billion from us and build one of the top balance sheets in the REIT industry;
to streamline our private capital business and position it for substantial growth;
to improve the utilization of our low yielding assets; and
to build the most effective and efficient organization in the REIT industry and to become the employer of choice among top professionals interested in real estate as a career.
Align our Portfolio with our Investment Strategy
We have categorized our portfolio into three main segments – global, regional and other markets. By segmenting our markets in this manner, we were able to construct a plan that includes culling the portfolio for buildings and potentially submarkets that are no longer a strategic fit. We expect to use the proceeds from dispositions to pay down debt that is secured by the disposed assets, if any, repay other debt and to recycle capital into new development projects and/or strategic acquisitions.
Strengthen our Financial Position
We intend to further strengthen our financial position by lowering our financial risk and currency exposure and building one of the strongest balance sheets in the REIT industry. We expect to lower our financial risk by reducing leverage and maintaining staggered debt maturities, which will increase our financial flexibility and provide for continued access to capital markets. This financial flexibility will position us to capitalize on market opportunities across the entire business cycle as they arise. We expect to reduce our exposure to foreign currency exchange fluctuations by borrowing in local currency where appropriate, and utilizing derivative contracts to hedge our foreign denominated equity and swap U.S. dollar–denominated debt into obligations denominated in foreign currencies. We expect to also lower our foreign currency risk by holding assets outside the United States primarily in co-investment ventures in which we maintain an ownership interest and provide services generating private capital revenue. We will accomplish this through contributions and sales to our existing and newly formed co-investment ventures, including the new ventures in Europe and Japan discussed below. In addition, we expect that new development projects, particularly in those emerging markets such as Brazil, China and Mexico, will be done in conjunction with our private capital partners.
Streamline Private Capital Business
We are working with our private capital investors to rationalize certaintwo of our co-investment ventures. Some of our legacy co-investment ventures have fee structures that do not adequately compensate us for the services we provide. Therefore, we have terminated or restructured certain of these co-investment ventures. In other cases, we may combine some co-investment ventures to gain operational efficiencies. In every case, however, we have and will continue to work very closely with our partners and venture investors who have been and will be active participantsWe received equity units in these decisions. We expect to continue with these activities during 2013. We plan to grow our private capital business with the deployment of the private capital commitments we have already raised, formation of new co-investment ventures, including the new venturesFIBRA Prologis in Europe and Japan, and raising incremental capitalexchange for our existing co-investment ventures.
Improve the Utilization of Our Low Yielding Assets
We plan to increase the value of our low yielding assets by stabilizing our operating portfolio to 95% leased, completing the build-out and lease-up of our development projects as well as monetizing our land through development or sale to third parties.
Build the most effective and efficient organizationcombined investments resulting in the REIT industry and become the employer of choice among top professionals interesteda 45% ownership interest in real estate as a career
We realized more than $115 million of cost synergies on an annualized basis, compared to the combined expenses of AMB and ProLogis on a pre-Merger basis. These synergies included gross general and administrative savings, reduced global line of credit facility fees and lower amortization of non real estate assets. We will continue to look for and achieve additional savings opportunities. In addition, we implemented a new enterprise wide system that includes a property management/billing system (implemented in April 2012), a human resources system (implemented in July 2012), a general ledger and accounting system and a data warehouse (implemented in January 2013). In connection with this implementation, we are striving to utilize the most effective global business processes with the enhanced system functionality, and have also implemented several analytical tools to further empower and assist our regional and local teams. In early 2012, we implemented two new compensation plansFIBRA Prologis that we believe will better align employees’ compensation to our company performance. We believe these efforts and others will help us withaccount for under the attainment of this objective.equity method.
Summary of 2012
• | We earned a promote of $42.1 million in June from our co-investment venture, Prologis Targeted U.S. Logistics Fund (“USLF”), which was based on the venture’s cumulative returns to the investors over the previous three calendar years. Of that amount, $31.3 million represented the third-party investors’ portion and is reflected inStrategic Capital Income in the Consolidated Statements of Operations. |
In supportWe increased our ownership of our objective to streamline our private capital co-investment ventures, we successfully concluded five co-investment ventures (six since the Merger) and one other unconsolidated joint venture (further discussed in Notes 3 and 6 to our Consolidated Financial Statements in Item 8), as follows:
During the third quarter, we completed the delisting of PEPR from two European stock exchanges and we acquired 100% of its assets and liabilities. We plan to contribute the majority of these properties to a new co-investment venture as discussed below.
During the first quarter, we acquired our partner’s interest in Prologis North AmericaAmerican Industrial Fund II (“NAIF II”NAIF”) to 66.1% by acquiring equity units from all but one partner for an aggregate purchase price of $679.0 million, which resulted in us obtaining control over and dissolved Prologis California and divided the portfolio equally with our partner. In the fourth quarter, we dissolved Prologis North America Properties Fund I (“Fund I”) and divided the portfolio according to the ownership of each partner. These three transactions increased our investment in real estate by $2.2 billion and our debt by $1.4 billion. We recognized net gains on acquisitions of real estate properties of $294.2 million asconsolidating NAIF. As a result of adjustingremeasuring our equity investment to fair value atupon consolidation in the timefourth quarter, we recognized a gain of consolidation. We refer to these transactions collectively as “Co-Investment Venture Acquisitions”.$201.3 million.
We concluded Prologis North American Properties Fund XI by disposinginvested $587.2 million in three of our European unconsolidated co-investment ventures, which represented our proportionate ownership interest, for the remaining asset in the co-investment venture during the third quarter.acquisition of properties and repayment of debt.
InWe generated net proceeds of $3.2 billion and net gains of $524.5 million from the fourth quarter, we dissolved onecontribution and disposition of real estate investments, including the initial portfolio of FIBRA Prologis discussed above. The gains were principally driven by dispositions in the United States and contribution of stabilized properties in Japan and Mexico.
We issued €1.8 billion ($2.4 billion) of senior notes, entered into a new yen term loan and replaced our other unconsolidated jointeuro term loan. We used the net proceeds to buy back senior notes through private transactions, repay secured mortgage debt, fund additional investments in our co-investment ventures and divided the portfolio according to the ownership of the partners.for general corporate purposes. This activity reduced our weighted average interest rate and extended our maturities, as further discussed below in Liquidity and Capital Resources.
In December, 2012, we announced our plan to form two new venturesreceived proceeds of $353.9 million through the issuance of equity securities from the exercise of a warrant issued in Japan and Europe:
On December 12, we announcedconnection with the approval from our Board to sponsor a Japanese REIT (“J-REIT”) to serve as the long-term investment vehicle for our properties developed in Japan. In early 2013, we launched the initial public offering for Nippon Prologis REIT, Inc. (“NPR”). On February 14, 2013, NPR was listed on the Japan Stock Exchange and commenced trading. At that time, NPR acquired a portfolioformation of 12 properties from us for an aggregate purchase price of ¥173 billion ($1.9 billion), resulting in ¥153 billion ($1.7 billion at February 14, 2013) in net cash proceeds. We will retain at least a 15% equity ownership interest in NPR and will provide pipeline, operational and personnel assistance under a support agreement. As a result of this transaction, in the first quarter we will recognize a gain of approximately $300 million after the deferral of the gain related to our ongoing investment. We intend to use the proceeds primarily for the repayment of debt and future investment in Japan.
On December 20, we signed a definitive agreement to form a euro-denominated co-investment venture, Prologis European Logistics Partners SarlSàrl (“PELP”). Our partner is Norges Bank Investment Management, which is and through our at-the-market (“ATM”) program. See Note 10 to the manager of the Norwegian Government Pension Fund Global. PELP will be structured as a 50/50 joint venture. The venture has an initial term of 15 years, which may be extendedConsolidated Financial Statements for additional 15-year periods. We will have the ability to reduceinformation about our ownership to 20% following the second anniversary of closing. The venture will acquire a portfolio of high-quality properties currently owned by us in 11 target European global markets. We expect to contribute 195 properties for total estimated proceeds of approximately of €2.3 billion ($3.1 billion at December 31, 2012). As the expected proceeds were less than our carrying cost at December 31, 2012, we recognized an impairment charge of $135 million in the fourth quarter of 2012 related to the expected contribution in March 2013. This charge represented the loss on the entire portfolio of properties and was driven primarily by properties that we had developed during 2008 and 2009 at peak values.ATM program.
Although our strategic objective is to further improve our credit metrics, we temporarily increased our total debt to $11.8 billion at December 31, 2012 from $11.4 billion at December 31, 2011. Our significant debt activity during the year was as follows:
We increased our debt by $1.4 billion in connection with the Co-Investment Venture Acquisitions, as discussed above.
We issued secured property-level debt on assets in Japan (known as TMK bonds) or increased existing TMK bonds for a combined amount of ¥49.0 billion ($569.0 million as of December 31, 2012).
We entered into a €487.5 million ($648.5 million as of December 31, 2012) multi-currency senior term loan agreement and used the proceeds to pay off two outstanding term loans with the remainder used to pay down our credit facilities.
We repaid $1.9 billion of debt with the proceeds from dispositions and contributions of properties. In 2013, we plan to significantly reduce debt with the proceeds received from contributions to the two co-investment ventures discussed above, along with other dispositions and contributions of properties as we align our portfolio with our investment strategy.
In order to reduce our exposure to the risk of movements in exchange rates, we entered into derivative contracts with an aggregate notional amount of €1.0 billion to hedge our euro denominated net investment. These hedges qualify for hedge accounting. We plan to further reduce our currency risk by completing the contribution of real estate properties to co-investment ventures in Japan and Europe in which we maintain an ownership interest (as discussed above).
We generated aggregate proceeds of $2.0 billion from the disposition of land, land subject to ground leases and 200 operating buildings to third parties and the contribution of 25 operating buildings to three unconsolidated co-investment ventures. We used the proceeds primarily to reduce our outstanding debt, acquire real estate properties and fund our development activities. We recognized net gains of $19.3 million in continuing operations and $65.9 million in discontinued operations as a result of these transactions.
We commenced construction of 40 projects on an owned and managed basis aggregating 16.9 million square feet with a total expected investment of $1.6 billion (our share was $1.4 billion), including 20 projects (or 57% of the total expected investment) that were 100% leased prior to the start of development. We used $384.2 million of land we already owned for these projects. This represents an increase in development activity that we expect to further increase in 2013.
We leased a total of 145.3 million square feet in our owned and managed portfolio and increased the occupancy of the total operating portfolio to 94.0% and 94.5% leased at December 31, 2012 as compared to 92.2% occupied and 92.5% leased at December 31, 2011.
We increased the percentage of our total owned and managed portfolio that is in global markets to 84.5% (based on gross investment balance).
Operational Outlook
The recovery in industrial real estate markets continues around the world. We believe all signals point to a positive outlook for our sector. The International Monetary Fund is forecasting global trade growth at 3.8% for 2013 and approximately 5% for 2014. Improving industrial production and new goods orders also indicate strengthening economic growth. According to the United States Bureau of Economic Analysis, inventories in the United States have now been growing for the last 11 out of 12 quarters, and are almost back to their pre-crisis levels. We expect further rebuilding of inventories this year to levels that will surpass the previous peak. This increase in inventories is driven primarily by the fact that the United States population has grown by 12 million during that same timeframe.
Total net absorption during the fourth quarter was 56 million square feet according to CBRE, Inc., the strongest single quarter since 2006. The availability rate continues to fall (12.8% at December 31, 2012) and supply remains at historically low levels. Further, as the recovery broadens throughout the United States, demand should increase across more of the major tenant business sectors, further reducing vacancy spaces smaller than 100,000 square feet. This segment is closely tied to the recovery in the housing market and we expect demand to increase in the future. Thus, overall conditions in the United States industrial market should continue to improve and as such we are forecasting 150 million square feet of net absorption in 2013.
In Europe, net absorption continues to be positive, and has been, since we began collecting the data series, in the first quarter of 2011. The supply of class-A distribution space remains constrained in both Japan and China. We expect the supply chain reconfiguration in Japan and growing consumption in China to continue to drive demand for our product in the long-term. Demand for class-A facilities remains strong in Latin America. Brazil continues to be an underserved logistics market as growing GDP and increasing consumption is driving high levels of new requirements into the market. Demand momentum has been similarly positive in Mexico, benefitting from the economic recovery in the U.S. and increasingly frequent instances of ‘near-shoring’ of production activities. Net absorption has been positive for several years and market occupancy rates increased 80 basis points to 91.5 percent during 2012 across the six largest markets.
In our total owned and managed operating portfolio, we leased a record 145.3 million square feet of space in 2012. We ended the year with 94.0% occupancy in our owned and managed operating portfolio, up 180 basis points over year end 2011. The effective rental rates on leases signed during the fourth quarter of 2012 in our same store portfolio (as defined below) decreased by 2.4% when compared with the rental
rates on the previous leases on that same space. The decline was primarily attributed to regional markets in Europe where leases were signed at the high point of the prior cycle. Rent change is continuing its upward trend in our portfolio and we expect positive rollover in 2013. Tenant retention in the fourth quarter was 87.3%.
Due to the lack of supply of class-A facilities, high space utilization rates and decreasing vacancy rates, we expect development volume to increase in our markets. Our development business comprises speculative development, build-to-suit development, value-added conversions and redevelopment. We expect to develop directly and within our co-investment structures depending on location, market conditions, submarkets or building sites and availability of capital. In response to this increasing demand, we are actively pursuing various development opportunities, and we commenced development of 40 properties in our owned and managed portfolio during 2012.
Summary
The following table illustrates the net operating income for each of our segments, along with the reconciling items toLoss from Continuing Operationsin our Consolidated Statements of Operations for the years ended December 31 (in thousands):
2012 | 2011 | 2010 | ||||||||||
Net operating income – Real Estate Operations segment | $ | 1,347,127 | $ | 931,118 | $ | 502,072 | ||||||
Net operating income – Private Capital segment | 62,959 | 82,657 | 81,867 | |||||||||
Other: | ||||||||||||
General and administrative expenses | (228,068) | (195,161) | (165,981) | |||||||||
Merger, acquisition and other integration expenses | (80,676) | (140,495) | - | |||||||||
Impairment of real estate properties | (252,914) | (21,237) | (736,612) | |||||||||
Depreciation and amortization | (739,981) | (552,849) | (294,867) | |||||||||
Earnings from unconsolidated entities, net | 31,676 | 59,935 | 23,678 | |||||||||
Interest expense | (507,484) | (468,072) | (461,166) | |||||||||
Impairment of goodwill and other assets | (16,135) | (126,432) | (412,745) | |||||||||
Interest and other income, net | 22,878 | 12,008 | 15,847 | |||||||||
Gains on acquisitions and dispositions of investments in real estate, net | 305,607 | 111,684 | 28,488 | |||||||||
Foreign currency and derivative gains (losses), net | (20,497) | 41,172 | (11,081) | |||||||||
Gain (loss) on early extinguishment of debt, net | (14,114) | 258 | (201,486) | |||||||||
Income tax benefit (expense) | (3,580) | (1,776) | 30,499 | |||||||||
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Loss from continuing operations | $ | (93,202) | $ | (267,190) | $ | (1,601,487) |
See Note 22 to our Consolidated Financial Statements in Item 8 for additional information regarding our segments and a reconciliation of net operating income toLoss Before Income Taxes.
Real Estate Operations Segment
The net operating income of the Real Estate OperationsIncluded in this segment consisted ofis rental income and rental expensesexpense recognized from industrial propertiesour consolidated operating properties. We had significant real estate activity during 2014 and 2013 that we own and consolidate and is impacted by our capital deployment activities. This segment excludes amounts presented asDiscontinued Operationsin our Consolidated Financial Statements for all periods. Thethe size and percentage of occupancy of our consolidated portfolio. In addition, the operating fundamentals in the markets of our operating portfolio fluctuates due tohave been improving, which has positively impacted both the timing of acquisitions,occupancy and rental rates we have experienced, and has also fueled development activity and contributions. Such fluctuations affect the net operating income we recognize in this segment in a particular period.activity. Also included in this segment is revenue from land we own and lease to customers under ground leases and development management and other income, offset bynet of acquisition, disposition and land holding costs. The net operating income from the
Real Estate Operations segmentNOI for the years ended December 31 was as follows (in(dollars in thousands):
2012 | 2011 | 2010 | 2014 | 2013 | 2012 | |||||||||||||||||||
Rental and other income | $ | 1,879,182 | $ | 1,313,708 | $ | 717,626 | $ | 1,192,176 | $ | 1,239,496 | $ | 1,469,419 | ||||||||||||
Rental recoveries | 348,740 | 331,518 | 364,320 | |||||||||||||||||||||
Rental and other expenses | 532,055 | 382,590 | 215,554 | (454,254) | (478,920) | (517,795) | ||||||||||||||||||
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Total net operating income - Real Estate Operations segment | $ | 1,347,127 | $ | 931,118 | $ | 502,072 | ||||||||||||||||||
Real Estate Operations - NOI | $ | 1,086,662 | $ | 1,092,094 | $ | 1,315,944 | ||||||||||||||||||
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Operating margin | 70.5% | 69.5% | 71.8% | |||||||||||||||||||||
Average occupancy | 94.5% | 93.6% | 92.6% |
The increase in rental income and rental expense in 2012 from 2011 was due primarily to the impactDetail of the Merger and the PEPR Acquisition in the second quarter of 2011, the Co-Investment Venture Acquisitions and other acquisitions in 2012 and increased occupancy in our consolidated operating properties (from 91.4% at December 31 2011was as follows (square feet in thousands):
2014 | 2013 | 2012 | ||||||||||
Number of properties | 1,607 | 1,610 | 1,853 | |||||||||
Square Feet | 282,282 | 267,097 | 316,347 | |||||||||
Occupied % | 96.3% | 94.9% | 93.7% |
Below are the key drivers of Real Estate Operations NOI:
We had significant activity within the portfolio, including acquisitions, contributions to 93.7%co-investment ventures and dispositions to third parties. This impacted NOI as follows:
2014 as compared to 2013
Acquisitions and development activity: $84.8 million increase;
Consolidation of NAIF: $35.8 million increase;
Contribution activity: $140.3 million decrease;
Disposition activity: $44.0 million decrease
2013 as compared to 2012
Acquisitions and development activity: $71.6 million increase;
Contribution activity: $299.4 million decrease
Average occupancy in our operating properties increased 90 basis points in 2014 from 2013 and 100 basis points in 2013 from 2012.
We leased a total of 72.9 million square feet, 87.6 million square feet and 92.4 million square feet during 2014, 2013 and 2012, respectively.
We recognize changes in rental income from certain contractual rent increases from our existing leases and from rent change on new leases. If a lease has a contractual rent increase based on the consumer price index or similar metric that is not known at December 31, 2012), including the completiontime of lease signing, the rent increase is not included in rent leveling and stabilizationtherefore any rent increase will impact the rental income we recognize.
We have experienced an increase in rental rates on the turnover of new development properties. The resultsexisting leases for 2012 includedthe last eight quarters that has resulted in higher average rental rates in our portfolio and increased rental income and expenses from properties acquired through the Merger and PEPR Acquisition of $834.0 million and $228.9 million, respectively, while 2011 included approximately seven months of rental income and expense of properties acquired through the Merger and PEPR Acquisition of $524.7 million and $142.5 million, respectively. In our consolidated portfolio, we leased 88.5 million square feet in 2012 compared to 63.4 million square feet in 2011.
The increase in net operating income in 2011 over 2010 was due primarily to the impact of the Merger and the PEPR Acquisition in the second quarter of 2011, increased occupancy in our consolidated operating properties (from 85.9% at December 2010 to 91.4% at December 2011) and the completion and stabilization of new development properties.
We calculate the change in effective rental rates onNOI as those leases signed during the quarter as compared to the previous rent on that same space in our same store portfolio (as defined below). During 2012 (over the four quarters), the percentage change in rental rates ranged from a decrease of 3.9% to a decrease of 1.1%. During 2011 (over the four quarters), the percentage change in rental rates ranged from a decrease of 8.9% to a decrease of 4.5%. A decline in rental rates was due to: (i) leases turning that were put in place when market rents were at or near peak and (ii) decreased market rents.commenced.
Under the terms of our lease agreements, we are able to recover the majority of our rental expenses from customers. Rental expense recoveries, included in both rental income and rental expenses, were 74.0%81.0%, 73.7%73.4% and 75.6%74.2% of total rental expenses for the yearsyear ended December 31, 2014, 2013, and 2012 2011 and 2010, respectively. The increase was due in part to the higher average occupancy of our portfolio.
Our consolidated operating properties
We adopted a new accounting standard, as of December 31 were as follows (square feetJanuary 1, 2014, that changed the criteria for classifying and reporting discontinued operations. The results of the third-party dispositions remained in thousands):
Number of Properties | Square Feet | Occupied % | ||||||||||
2012 | 1,853 | 316,347 | 93.7% | |||||||||
2011(1) | 1,797 | 291,051 | 91.4% | |||||||||
2010 | 985 | 168,547 | 85.9% |
As discussed earlier, we have 207 operating properties aggregating approximately $5.0 billion that we have contributedcontinuing operations in 2014, whereas in 2013 or expectand 2012, the results were reclassified to contribute to NPRdiscontinued operations and PELP. As a result, we expect to have decreased rental income and rental expensesnot included in 2013Real Estate Operations.
Strategic Capital
Included in this segment. We will account for our continuing ownership in the properties through our equity ownership in the ventures by recognizing our share of the netsegment is income or loss of the ventures. We will also recognize additional revenue in our Private Capital segment from the property management and asset management services we will provide.
Private Capital Segment
The net operating income of the Private Capital segment consistedcomprised of fees and incentivespromotes earned for services performed for our unconsolidated co-investment ventures and certain joint ventures and third parties, reduced by ourthe expenses recognized for the direct costs of managing these entities and the properties they own.
The direct costs associated with our Private Capital segment totaled $63.8 million, $55.0 million and $40.7 million for the years ended December 31, 2012, 2011 and 2010, respectively, and are included in the line item Private Capital Expenses in our Consolidated Statements of Operations. These expenses include the direct expenses associated with the asset management of the unconsolidated co-investmentthese ventures provided by our employees who are assigned to our Private Capital segment. In addition, in order to achieve efficiencies and economies of scale, all of our property management functions are provided by a team of professionals who are assigned to our Real Estate Operations segment. These individuals perform theallocated property-level management of the properties in our owned and managed portfolio including properties we consolidate and the properties we manage that are owned by the unconsolidated entities. We allocate the costs of our property management function to the properties we consolidate (reported inRental Expenses) andfor the properties owned by the unconsolidated entities (included inPrivateventures. Income associated with Strategic Capital Expenses), by using the square feet owned by the respective portfolios. The increase in Private Capital Expenses in 2012 isfluctuates due to the increased private capital platform and infrastructuresize of co-investment ventures that was part ofare under management, the Merger, offset partially with a declinetransactional activity in the portion of our property management expenses that are allocated to this segment due to the consolidation of PEPR in June 2011venture and the Co-Investment Venture Acquisitionstiming of promotes. We had significant co-investment venture activity in 2012.2014 and 2013 that impacted Strategic Capital NOI as detailed below.
The net operating income from the PrivateStrategic Capital segment, representing fees earned reduced by private capital expenses,NOI for the years ended December 31 was as follows (in thousands):
2012 | 2011 | 2010 | ||||||||||
Unconsolidated entities: | ||||||||||||
Americas (1) | $ | 31,637 | $ | 42,644 | $ | 40,354 | ||||||
Europe (2) | 21,699 | 30,708 | 41,200 | |||||||||
Asia (3) | 9,623 | 9,305 | 313 | |||||||||
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Total net operating income - Private Capital segment | $ | 62,959 | $ | 82,657 | $ | 81,867 |
2014 | 2013 | 2012 | ||||||||||
Strategic Capital - NOI: | ||||||||||||
Americas: | ||||||||||||
Asset management and other fees | $ | 51,490 | $ | 52,030 | $ | 55,448 | ||||||
Leasing commissions, acquisition and other transaction fees | 12,348 | 14,078 | 13,974 | |||||||||
Promotes | 31,330 | 6,366 | - | |||||||||
Strategic capital expenses | (53,126) | (53,689) | (37,785) | |||||||||
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Subtotal Americas | 42,042 | 18,785 | 31,637 | |||||||||
Europe: | ||||||||||||
Asset management and other fees | 70,539 | 53,190 | 32,951 | |||||||||
Leasing commissions, acquisition and other transaction fees | 16,010 | 10,604 | 4,096 | |||||||||
Strategic capital expenses | (29,283) | (22,531) | (15,348) | |||||||||
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Subtotal Europe | 57,266 | 41,263 | 21,699 | |||||||||
Asia: | ||||||||||||
Asset management and other fees | 32,252 | 29,861 | 19,026 | |||||||||
Leasing commissions, acquisition and other transaction fees | 5,902 | 13,343 | 1,284 | |||||||||
Strategic capital expenses | (14,087) | (13,059) | (10,687) | |||||||||
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Subtotal Asia | 24,067 | 30,145 | 9,623 | |||||||||
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Strategic Capital - NOI | $ | 123,375 | $ | 90,193 | $ | 62,959 |
We had the following assets under management held through our unconsolidated co-investment ventures at December 31 as follows (dollars and square feet in millions):
2014 | 2013 | 2012 | ||||||||||
Americas: | ||||||||||||
Number of ventures | 3 | 4 | 6 | |||||||||
Square feet | 87.1 | 108.5 | 127.5 | |||||||||
Total assets | $ | 7,063 | $ | 8,014 | $ | 9,070 | ||||||
Europe: | ||||||||||||
Number of ventures | 4 | 4 | 3 | |||||||||
Square feet | 147.4 | 132.9 | 70.3 | |||||||||
Total assets | $ | 11,463 | $ | 11,819 | $ | 6,605 | ||||||
Asia: | ||||||||||||
Number of ventures | 2 | 2 | 2 | |||||||||
Square feet | 26.2 | 22.9 | 11.0 | |||||||||
Total assets | $ | 4,135 | $ | 4,032 | $ | 1,937 | ||||||
Total: | ||||||||||||
Number of ventures | 9 | 10 | 11 | |||||||||
Square feet | 260.7 | 264.3 | 208.8 | |||||||||
Total assets | $ | 22,661 | $ | 23,865 | $ | 17,612 |
Below are the key drivers of Strategic Capital NOI:
We acquired a controlling interest in our co-investment venture NAIF in the fourth quarter of 2014 and began consolidating the venture.
We formed the co-investment venture FIBRA Prologis in Mexico in June 2014 and in connection with this transaction, we concluded the Mexico Industrial Fund.
We acquired a controlling interest in Prologis SGP Mexico and purchased our partner’s interest in Prologis North American Industrial Fund III in 2013.
We formed two co-investment ventures in early 2013 (one in Europe and one in Japan). In connection with the formation of the Japan co-investment venture, we concluded Japan Fund I.
We contributed 126, 254 and 25 properties to several co-investment ventures during 2014, 2013 and 2012, respectively.
In June 2014, we earned a promote of $42.1 million from our co-investment venture USLF. Of that amount, $31.3 million represented the |
We expectThe direct costs associated with Strategic Capital totaled $96.5 million, $89.3 million and $63.8 million for the net operating incomeyears ended December 31, 2014, 2013 and 2012, respectively, and are included in the line itemStrategic Capital Expenses in the Consolidated Statements of this segmentOperations. These expenses include the direct expenses associated with asset management of the unconsolidated co-investment ventures and the property management expenses associated with the property-level management of the properties owned by these ventures.
The increase inStrategic Capital Expensesin 2014 from 2013 was due to the increased size of our co-investment ventures and additional expense that represents the associated bonus paid pursuant to the terms of the Prologis Promote Plan for the promote we earned, offset partially by the conclusion of several ventures. The increase inStrategic Capital Expenses in 2013 from 2012 was due to NPR and PELP and from the contributionsaddition of properties to existingthe two co-investment ventures in Europe and Asia and additional expense related to the promote we earned, offset slightlysomewhat by the decrease in revenue from some other co-investment ventures as they are concluded.conclusion of several ventures.
See Note 65 to ourthe Consolidated Financial Statements in Item 8 for additional information on our unconsolidated entities.
Our Owned and Managed Portfolio
We manage our business on an owned and managed basis without regard to whether a particular property is wholly-owned by us or owned by one of our co-investment ventures. As further discussed below, we believe that the operating fundamentals of our owned and managed portfolio are consistent with those of our consolidated portfolio. The activity in our owned and managed portfolio impacts Real Estate Operations NOI, Strategic Capital revenues and the net earnings we recognize from our unconsolidated co-investment ventures.
Our total owned and managed portfolio includes operating industrial properties and does not include properties under development or held for sale and was as follows at December 31 (square feet in millions):
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Number of Properties | Square Feet | Occupancy | Number of Properties | Square Feet | Occupancy | Number of Properties | Square Feet | Occupancy | ||||||||||||||||||||||||||||
Consolidated | 1,607 | 282.3 | 96.3% | 1,610 | 267.1 | 94.9% | 1,853 | 316.3 | 93.7% | |||||||||||||||||||||||||||
Unconsolidated | 1,278 | 260.7 | 95.0% | 1,323 | 264.3 | 94.7% | 1,163 | 208.8 | 93.8% | |||||||||||||||||||||||||||
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Totals | 2,885 | 543.0 | 95.6% | 2,933 | 531.4 | 94.8% | 3,016 | 525.1 | 93.8% |
Operating Activity
Information on our operating activity for the years ended December 31 is summarized below (square feet in millions):
2014 | 2013 | 2012 | ||||||||||
Aggregate leased square feet | 130.3 | 151.9 | 145.3 | |||||||||
Average turnover costs per square foot | $ | 1.46 | $ | 1.42 | $ | 1.38 | ||||||
Rent change on rollover (range of each quarter during the year) | 6.2 - 9.7% | 2.0 - 6.1% | (1.1) - (3.9)% | |||||||||
Retention percentage on aggregate leased square feet | 85.5% | 82.6% | 87.3% |
Development Start Activity
Information on our development starts for the years ended December 31 is summarized below (dollars and square feet in millions):
2014 (1) | 2013 | 2012 | ||||||||||
Number of properties | 76 | 68 | 40 | |||||||||
Aggregated square feet | 26.0 | 23.0 | 17.0 | |||||||||
Total expected investment (“TEI”) | $ | 2,034 | $ | 1,771 | $ | 1,553 | ||||||
Our proportionate share of TEI based on ownership | $ | 1,792 | $ | 1,473 | $ | 1,359 | ||||||
Percentage of build-to-suits based on TEI | 32.6% | 41.8% | 63.8% | |||||||||
Weighted average expected yield on TEI | 7.2% | 7.6% | 7.9% | |||||||||
Estimated value at completion | $ | 2,441 | $ | 2,109 | $ | 1,834 | ||||||
Estimated margin | 20.0% | 19.1% | 18.1% |
(1) | We expect these developments to be completed on or before July 2016. |
For information on our development portfolio at December 31, 2014, see Item 2. Properties.
Same Store Analysis
We evaluate the performance of the operating properties we own and manage using a “same store” analysis because the population of properties in this analysis is consistent from period to period, thereby eliminating the effects of changes in the composition of the portfolio on performance measures. We include properties from our consolidated portfolio, as well as properties owned by the unconsolidated co-investment ventures that are managed by us, in our same store analysis. We have defined the same store portfolio, for the three months ended December 31, 2014, as those properties that were in operation at January 1, 2013, and have been in operation throughout the same three-month periods in both 2014 and 2013. We have removed all properties that were disposed of to a third party or were classified as held for sale from the population for both periods. We believe the factors that impact rental income, rental expenses and NOI in the same store portfolio are generally the same as for the total portfolio. In order to derive an appropriate measure of period-to-period operating performance, we remove the effects of foreign currency exchange rate movements by using the current exchange rate to translate from local currency into U.S. dollars, for both periods.
We calculate our same store results on a quarterly basis and provide a reconciliation of those results to our Consolidated Statements of Operations. The following is a summary of same store NOI and the change from prior period for the four quarters of 2014 and on a cumulative year-to-date basis and the square feet of the portfolio used in the calculation (dollars and square feet in thousands):
Three Months Ended | ||||||||||||||||||||
March 31 (1) | June 30 (1) | September 30 (1) | December 31 | Full Year | ||||||||||||||||
2014 NOI - same store portfolio | $ | 586,579 | $ | 584,422 | $ | 581,912 | $ | 568,742 | $ | 2,321,655 | ||||||||||
2013 NOI - same store portfolio | $ | 569,596 | $ | 562,899 | $ | 561,270 | $ | 546,214 | $ | 2,239,979 | ||||||||||
Percentage change | 2.98% | 3.82% | 3.68% | 4.12% | 3.65% | |||||||||||||||
Square feet of portfolio | 505.6 | 496.9 | 490.6 | 487.2 |
(1) | A reconciliation of our same store results for these fiscal quarters to our Consolidated Statements of Operations is provided in our previously filed quarterly reports on Form 10-Q for the respective quarter. |
The following is a reconciliation of our consolidated rental income, rental expenses and NOI (calculated as rental income and recoveries less rental expenses) for the full year, as included in the Consolidated Statements of Operations, to the respective amounts in our same store portfolio analysis for the three months ended December 31 (dollars in thousands):
Three Months Ended | ||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | Full Year | ||||||||||||||||
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2014 | ||||||||||||||||||||
Rental income and rental recoveries | $ | 388,240 | $ | 381,273 | $ | 355,822 | $ | 402,014 | $ | 1,527,349 | ||||||||||
Rental expenses | 110,517 | 109,576 | 102,324 | 108,370 | 430,787 | |||||||||||||||
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NOI | $ | 277,723 | $ | 271,697 | $ | 253,498 | $ | 293,644 | $ | 1,096,562 | ||||||||||
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2013 | ||||||||||||||||||||
Rental income and rental recoveries | $ | 444,144 | $ | 363,956 | $ | 372,185 | $ | 379,208 | $ | 1,559,493 | ||||||||||
Rental expenses | 130,354 | 109,837 | 106,811 | 104,936 | 451,938 | |||||||||||||||
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NOI | $ | 313,790 | $ | 254,119 | $ | 265,374 | $ | 274,272 | $ | 1,107,555 |
For the Three Months Ended December 31, | ||||||||||||
2014 | 2013 | Percentage Change | ||||||||||
Rental Income (1)(2) | ||||||||||||
Consolidated: | ||||||||||||
Rental income per the Consolidated Statements of Operations | $ | 307,584 | $ | 301,627 | ||||||||
Rental recoveries per the Consolidated Statements of Operations | 94,430 | 77,581 | ||||||||||
Consolidated adjustments to derive same store results: | ||||||||||||
Rental income and recoveries of properties not in the same store portfolio — properties developed and acquired during the period and land subject to ground leases | (45,387) | (41,562) | ||||||||||
Effect of changes in foreign currency exchange rates and other | 112 | (4,467) | ||||||||||
Unconsolidated co-investment ventures – rental income | 412,873 | 402,185 | ||||||||||
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Same store portfolio – rental income (2) | $ | 769,612 | $ | 735,364 | 4.7% | |||||||
Rental Expenses (1)(3) | ||||||||||||
Consolidated: | ||||||||||||
Rental expenses per the Consolidated Statements of Operations | $ | 108,370 | $ | 104,936 | ||||||||
Consolidated adjustments to derive same store results: | ||||||||||||
Rental expenses of properties not in the same store portfolio — properties developed and acquired during the period and land subject to ground leases | (13,699) | (12,996) | ||||||||||
Effect of changes in foreign currency exchange rates and other | 10,139 | 3,830 | ||||||||||
Unconsolidated co-investment ventures — rental expenses | 96,060 | 93,380 | ||||||||||
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Same store portfolio – rental expenses (3) | $ | 200,870 | $ | 189,150 | 6.2% | |||||||
NOI (1) | ||||||||||||
Consolidated: | ||||||||||||
NOI per the Consolidated Statements of Operations | $ | 293,644 | $ | 274,272 | ||||||||
Consolidated adjustments to derive same store results: | ||||||||||||
NOI of properties not in the same store portfolio — properties developed and acquired during the period and land subject to ground leases | (31,688) | (28,566) | ||||||||||
Effect of changes in foreign currency exchange rates and other | (10,027) | (8,297) | ||||||||||
Unconsolidated co-investment ventures — NOI | 316,813 | 308,805 | ||||||||||
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Same store portfolio – NOI | $ | 568,742 | $ | 546,214 | 4.1% |
(1) | As discussed above, our same store portfolio includes industrial properties from our consolidated portfolio and owned by the unconsolidated co-investment ventures that are managed by us. During the periods presented, certain properties owned by us were |
contributed to a co-investment venture and are included in the same store portfolio on an aggregate basis. Neither our consolidated results nor those of the co-investment ventures, when viewed individually, would be comparable on a same store basis due to the changes in composition of the respective portfolios from period to period (for example, the results of a contributed property are included in our consolidated results through the contribution date and in the results of the unconsolidated entities subsequent to the contribution date). |
(2) | We exclude the net termination and renegotiation fees from our same store rental income to allow us to evaluate the growth or decline in each property’s rental income without regard to items that are not indicative of the property’s recurring operating performance. Net termination and renegotiation fees represent the gross fee negotiated to allow a customer to terminate or renegotiate their lease, offset by the write-off of the asset recorded due to the adjustment to straight-line rents over the lease term. The adjustments to remove these items are included in “effect of changes in foreign currency exchange rates and other” in the above table. |
(3) | Rental expenses include the direct operating expenses of the property such as property taxes, insurance, utilities, etc. In addition, we include an allocation of the property management expenses for our direct-owned properties based on the property management services provided to each property (generally, based on a percentage of revenues). On consolidation, these amounts are eliminated and the actual costs of providing property management services are recognized as part of our consolidated rental expenses. These expenses fluctuate based on the level of properties included in the same store portfolio and any adjustment is included as “effect of changes in foreign currency exchange rates and other” in the above table. |
Other Components of Income
General and Administrative (“G&A”) Expenses
G&A expenses for the years ended December 31 consisted of the following (in thousands):
2012 | 2011 | 2010 | ||||||||||
Gross G&A expense | $ | 394,845 | $ | 332,632 | $ | 266,932 | ||||||
Reported as rental expenses | (35,954) | (24,741) | (19,709) | |||||||||
Reported as private capital expenses | (63,820) | (54,962) | (40,659) | |||||||||
Capitalized amounts | (67,003) | (57,768) | (40,583) | |||||||||
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Net G&A | $ | 228,068 | $ | 195,161 | $ | 165,981 |
2014 | 2013 | 2012 | ||||||||||
Gross overhead | $ | 461,647 | $ | 434,933 | $ | 394,845 | ||||||
Reported as rental expenses | (30,075) | (32,918) | (35,954) | |||||||||
Reported as strategic capital expenses | (96,496) | (89,278) | (63,820) | |||||||||
Capitalized amounts | (87,308) | (83,530) | (67,003) | |||||||||
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G&A expenses | $ | 247,768 | $ | 229,207 | $ | 228,068 |
Gross overhead includes all costs related to our business, including the Real Estate Operations and Strategic Capital segments. We allocate a portion of our gross overhead that relates to property management functions to both segments based on the size of the respective portfolios. Costs directly associated to Strategic Capital are allocated to that segment.
The increase in G&A expenses and the various componentsgross overhead from 20112013 to 2012 and from 20102014 was principally due to 2011 was due principally to the larger infrastructure associated with the combined company following the Merger and the PEPR Acquisition.increased compensation. The increase in capitalized G&A isgross overhead from 2012 to 2013 was primarily due to increased infrastructure to accommodate our growing business. In 2013, the gross book value for our owned and managed portfolio increased development and leasing activities since the Merger.$1.4 billion to $45.5 billion at December 31, 2013.
We capitalize certain costs directly related to our development and leasing activities. Capitalized G&A expenses included salaries and related costs, as well as other general and administrative costs. The capitalized G&A costs for the years ended December 31 waswere as follows (in thousands):
2012 | 2011 | 2010 | 2014 | 2013 | 2012 | |||||||||||||||||||
Development activities | $ | 42,417 | $ | 34,301 | $ | 14,612 | $ | 68,008 | $ | 64,113 | $ | 42,417 | ||||||||||||
Leasing activities | 23,183 | 21,390 | 24,775 | 17,888 | 18,301 | 23,183 | ||||||||||||||||||
Costs related to internally developed software | 1,403 | 2,077 | 1,196 | 1,412 | 1,116 | 1,403 | ||||||||||||||||||
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Total capitalized G&A expenses | $ | 67,003 | $ | 57,768 | $ | 40,583 | $ | 87,308 | $ | 83,530 | $ | 67,003 |
For the years ended December 31, 2012, 2011In 2014, 2013 and 2010,2012, the capitalized salaries and related costs represented 19.1%23.9%, 19.3%23.7% and 16.1%20.3%, respectively, of our total capitalizable salaries and related costs. In addition, in 2012, we capitalized $1.2 million of salaries and related costs, related to internally developed software that were included asMerger, Acquisitionwhich includes cash and Other Integration Expenses. Salaries and related costs are comprised primarily of wages, otherequity compensation and other employee-related expenses. In
Depreciation and Amortization
Depreciation and amortization was $642.5 million, $648.7 million and $724.3 million for 2014, 2013 and 2012, we began consolidatedrespectively. The decrease over the last two years was principally a result of the disposition and contribution of properties, offset slightly by additional depreciation and amortization from completed development projects with a total expected investment of $1.3 billion ($0.6 billion in the fourth quarter) as compared to $0.8 billion in 2011. As discussed earlier, we expect our development activity to continue to increase in 2013.and acquired properties.
Merger, Acquisition and Other Integration Expenses
In connection with the Merger and other related activities, weWe incurred significant transaction, integration and transitional costs in 2012 related to the Merger in 2011 and integration of $80.7 million and $140.5 million during the years ended December 31, 2012 and 2011, respectively. We believe the majority of these costs have been realized as of December 31, 2012 and any additional costs incurred in 2013 will be included inG&A Expenses.systems. See Note 1514 to ourthe Consolidated Financial Statements in Item 8 for more detail on these expenses.
Impairment of Real Estate Properties
During 2012, 2011 and 2010, we recognized impairment charges of real estate properties in continuing operations of $252.9 million, $21.2 million and $736.6 million, respectively, due to our change of intent to no longer hold thesecertain assets for long-term investment. In 2012, these impairment charges relatedSee Notes 2 and 15 to our planned contribution of properties to PELP ($135.3 million), land parcels that we expected to sell to third parties ($88.9 million) and operating buildings we expected to contribute or sell ($28.7 million). In 2010, the charges primarily included land as a result of our change in strategy. Changes in economic and operating conditions and our ultimate intent with regard to our
investments in real estate that occur in the future may result in additional impairment charges or gains at the time of sale. See Note 16 to our Consolidated Financial Statements in Item 8 for more detail on the process we took to value these assets and the related impairment charges recognized.
Depreciation and Amortization
Depreciation and amortization was $740.0 million, $552.8 million and $294.9 million for the years ended December 31, 2012, 2011 and 2010, respectively. The increase from 2011 to 2012 is due to additional depreciation and amortization expenses associated with the assets (including intangible assets) acquired in the Merger and PEPR Acquisition during the second quarter of 2011 and the Co-Investment Venture Acquisitions in 2012, as well as completed and leased development properties and additional leasing and capital improvements in our operating properties. The increase from 2010 to 2011 is primarily due to additional depreciation and amortization expenses associated with the properties acquired through the Merger and PEPR Acquisition, completed and leased development properties and increased leasing activity.
Earnings from Unconsolidated Entities, Net
We recognized net earnings of $31.7 million, $59.9 million and $23.7 million for the years ended December 31, 2012, 2011 and 2010, respectively. These earnings relate to our investment infrom unconsolidated entities that are accounted for on the equity method. The earnings decreased in 2012 from 2011 due to the consolidation of PEPR and the Co-Investment Venture Acquisitions, as such ventures were previously accounted for under the equity method. This decrease was partially offset by earnings from investments acquired through the Merger. In 2012, we recorded a lossmethod of $9.3$134.3 million, $97.2 million and $31.7 million for our share of a loss on the early extinguishment of debt in Prologis North American Industrial Fund III. The primary reason for the increase in 2011 over 2010 is due to the investments we acquired through the Merger, partially offset by the consolidation of PEPR.2014, 2013 and 2012, respectively. The earnings we recognize are impacted by: (i) varianceschanges in revenues and expenses of the entity;each venture; (ii) the size and occupancy rate of the portfolio of properties owned by the entity;each venture; (iii) our ownership interest in the entity;each venture; and (iv) fluctuations in foreign currency exchange rates used to translate our share of net earnings to U.S. dollars, if applicable. We manageSee the majority of the properties in which we have an ownership interest as part of our total owned and managed portfolio. See discussion of our portfolio resultsco-investment ventures above in the section, “Portfolio Information”. See alsoStrategic Capital segment discussion and in Note 65 to ourthe Consolidated Financial Statements in Item 8 for a further breakdown of our share of net earnings recognized.
We expect increases in earnings from unconsolidated entities in 2013 due to our share of net earnings from NPR and PELP that we expect to recognize after contributions made in 2013.
Interest Expense
InterestGross interest expense decreased in 2014, compared to 2013, due to lower average debt levels and a decrease in interest rates. Although our debt levels were consistent at year ends ($9.4 billion at December 31, 2014 compared to $9.0 billion at December 31, 2013), we had higher debt outstanding during the first quarter of 2013. We decreased our debt by $2.7 billion near the end of the first quarter of 2013, primarily from continuing operations included the following components (in thousands) forproceeds received from the years ended December 31:contributions made to our unconsolidated co-investment ventures.
2012 | 2011 | 2010 | ||||||||||
Gross interest expense | $ | 580,787 | $ | 500,019 | $ | 435,289 | ||||||
Amortization of discount (premium), net | (36,687) | 228 | 47,136 | |||||||||
Amortization of deferred loan costs | 16,781 | 20,476 | 32,402 | |||||||||
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Interest expense before capitalization | 560,881 | 520,723 | 514,827 | |||||||||
Capitalized amounts | (53,397) | (52,651) | (53,661) | |||||||||
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Net interest expense | $ | 507,484 | $ | 468,072 | $ | 461,166 |
Gross interest expense increaseddecreased in 2013 compared to 2012 and 2011 from the previous year primarily due to higherlower debt levels as a result of the Merger, the PEPR Acquisitionlevels.
Our weighted average effective interest rate was 4.2%, 4.7% and the Co-Investment Venture Acquisitions in4.6% for 2014, 2013 and 2012, partially offset byrespectively. During 2014, 2013 and 2012, we issued new debt with lower effective borrowing costs and replacement of debt at lower rates.
Although our strategic objective is to reduce our debt and leverage withused the proceeds from property dispositions, we temporarily increased our debt in 2012 by $1.4 billion from the Co-Investment Venture Acquisitions. We plan to pay down debt with the proceeds from the contribution of properties in early 2013 and disposition of properties in 2013. As a result of the Merger and PEPR Acquisition, we added approximately $5.9 billion of debt at fair value at the beginning of June 2011 and approximately seven months of related interest expense in 2011, which increasedor buy back our debt balance as of December 31, 2011 to $11.4 billion. higher cost debt.
See Note 109 to ourthe Consolidated Financial Statements for a further breakdown of gross interest expense, amortization and capitalized amounts included in Item 8 andnet interest expense.
See also Liquidity and Capital Resources for further discussion of our debt and borrowing costs.
Our weighted average effective borrowing cost was 4.6%, 5.6% and 6.5% for the years ended December 31, 2012, 2011 and 2010, respectively. Our future interest expense, both gross interest and the portion capitalized, will vary depending on, among other things, our effective borrowing rate and the level of our development activities.
Impairment of Goodwill and Other Assets
Based on our review of goodwill in 2010, we recognized an impairment charge of $368.5 million related to goodwill allocated to the Real Estate Operations segment in the Americas and Europe reporting units. The review of goodwill was triggered by the strategic decision we made in the fourth quarter of 2010 to significantly downsize our development platform and, as a result, to sell to third parties certain other assets, some of which were acquired in the acquisitions that originally created the goodwill.
In 2012, 2011 and 2010, we recorded impairment charges of $16.1 million, $126.4 million and $44.3 million, respectively, on certain of our investments in and advances to unconsolidated entities, notes receivable and other assets, as we did not believe these amounts to be recoverable based on the present value of the estimated future cash flows associated with these assets, including estimated sales proceeds, or we believed the decline in fair value to be other than temporary.
See Notes 2 and 16 to our Consolidated Financial Statements in Item 8 for further information on our process with regard to analyzing the recoverability of goodwill and other assets.
Gains on Acquisitions and Dispositions of Investments in Real Estate and Revaluation of Equity Investments upon Acquisition of a Controlling Interest, Net
In 2012, weWe recognized net gains on acquisitions$0.7 billion, $0.6 billion and dispositions of investments in real estate$0.3 billion in continuing operations of $305.6 million, whichduring 2014, 2013 and 2012, respectively. In 2014, these also included $294.2 million of gains related to the Co-Investment Venture Acquisitions and $11.4 million of gains principally related to contribution activity. We received proceeds of $381.9 million from the contribution of 25 properties aggregating 4.8 million square feet.
During 2011, we recognized net gains on acquisitions andthe dispositions of investments in real estate in continuing operations of $111.7 million. This included gains recognized in the second quarter related to the PEPR Acquisition ($85.9 million) and the acquisition of our partner’s interest in one of our other unconsolidated joint ventures in Japan ($13.5 million). The gains represent the adjustment to fair value of our equity investments at the time we gained control and consolidated the entities. The contribution activity in 2011 resulted in cash proceeds of $590.8 million and net gains of $12.3 million.
During 2010, we recognized net gains on dispositions of investments in real estate in continuing operations of $28.5 million, which related to the contribution of land and operating properties to unconsolidated entities ($58.3 million gain), additional proceeds from contributions we made to PEPF II in 2009 based on valuations received as of December 31, 2010 and our contribution agreement with the venture ($27.4 million gain) and the sale of land parcels to third parties ($7.4 million gain), offset by a loss of $64.6 million relateddue to the salechange in reporting under the new accounting standard. We expect to have contributions to co-investments in the future, primarily in Europe, Japan and Mexico, as well as the disposition of certain unconsolidated entities.
The 2010 contribution activity resultedproperties to third parties, primarily in cash proceeds of $469.7 million relatedthe U.S., all depending on market conditions and other factors. See Note 4 to the contribution of development properties aggregating 2.1 million square feet and land to unconsolidated entities, andConsolidated Financial Statements for further information on the sale of 90% of two development properties in Japan aggregating 1.3 million square feet. We continue to own 10% of the Japan properties, which are accounted for under the equity method of accounting, andgains we continue to manage the properties.
If we realize a gain on contribution or sale of a property to an unconsolidated entity, we recognize the portion attributable to the third party ownership in the entity. If we realize a loss on contribution, we recognize the full amount as soon as it is known. Due to our continuing involvement through our ownership in the unconsolidated entity, these dispositions are not included in discontinued operations.recognized.
Foreign Currency and Derivative Gains (Losses), Net
WeTo mitigate our foreign currency exchange exposure, we borrow in the functional currency of the borrowing entity when appropriate. However, we and certain of our foreign consolidated subsidiaries may have intercompany or third partythird-party debt that is not denominated in the entity’s functional currency. When the debt is remeasured against the functional currency of the entity, a gain or loss may result. To mitigate our foreign currency exchange exposure, we borrow in the functional currency of the borrowing entity when appropriate. Certain of our third-party and intercompany debt is remeasured with the resulting adjustment recognized as a cumulative translation adjustment inForeign Currency Translation Loss,Losses, Net in ourthe Consolidated Statements of Comprehensive Income (Loss). This treatment is applicable to third-party debt that is designated as a hedge of our net investment and intercompany debt that is deemed to be long-term in nature.
If the third-party debt is not designated as a hedge or the intercompany debt is deemed short-term in nature when the debt is remeasured, we recognize a gain or loss in earnings.earnings when the debt is remeasured. We recognized net foreign currency exchange losses of $4.5 million in 2014 and exchange gains of $9.2 million and $7.4 million in 2012,2013 and losses of $5.9 million and $11.5 million in 2011 and 2010,2012, respectively, related to the settlement and remeasurement of debt. Predominantly the gains or losses recognized in earnings relate to the remeasurement of intercompany loans between the United States parent and certain consolidated subsidiaries in Japan and Europe and result from fluctuations in the exchange rates of U.S. dollar to the euro, Japanese yen and British pound sterling. In addition, we recognized net foreign currency exchange losses of $5.6$0.6 million, $0.6 million and gains of $2.1 million and $0.4$5.6 million from the settlement of transactions with third parties during December 31,of certain assets or liabilities that are denominated in a currency other than an entity’s functional currency in 2014, 2013 and 2012, 2011 and 2010, respectively.
We recognized an unrealized losslosses of $13.3 million, $42.2 million and $22.3 million in 2014, 2013 and 2012, and an unrealized gain of $45.0 million in 2011respectively on the derivative instrument (exchange feature) related to our exchangeable senior notes, which became exchangeable at the time of the Merger.are due in March 2015.
Gains (Losses) on Early Extinguishment of Debt, Net
During the years ended December 31,2014, 2013 and 2012, 2011 and 2010, we purchased portions of several series of senior notes, senior exchangeable notes and Eurobonds outstanding and extinguished some secured mortgage debt prior to maturity, which resulted in the recognition of losses of $165.3 million, $277.0 million and $14.1 million in 2014, 2013 and 2012, gains of $0.3 million in 2011, and losses of $201.5 million in 2010. The gains or losses represent the difference between the recorded debt (net of premiums and discounts and including related debt issuance costs) and the consideration we paid to retire the debt, including fees. Included in this amount in 2012 are losses that were included inOther Comprehensive Income (Loss) in our Consolidated Statements of Comprehensive Income (Loss) related to hedge transactions and were deemed unrecoverable in the fourth quarter of 2012. These hedges were associated with debt that is expected to be repaid before maturity in Europe with the proceeds from the contributions to PELP in early 2013.respectively. See Note 109 to ourthe Consolidated Financial Statements in Item 8 for more information regarding our debt repurchases.
Income Tax Benefit (Expense)
During the years ended December 31,2014, 2013 and 2012, 2011 and 2010, our current income tax expense was $17.9$61.6 million, $21.6$126.2 million and $21.7$17.9 million, respectively. We recognize current income tax expense for income taxes incurred by our taxable REIT subsidiaries (“TRSs”), state and local income taxes and taxes incurred in certainour foreign jurisdictions, as well as certain state taxes. We also include in current income tax expense the interest associated with our liability for uncertain tax positions.jurisdictions. Our current income tax expense fluctuates from period to period based primarily on the timing of our taxable income. Current income tax expense recognized during 2014 is principally due to tax triggered upon the contribution of the initial portfolio of properties by certain wholly-owned entities and changesMexico Fondo Logistico (“AFORES”) to FIBRA Prologis, as the transaction was structured as an asset sale for Mexican tax purposes. The tax expense was offset slightly by the net current tax benefit from the operating losses generated by our United States TRS. The current tax expense recognized during 2013 was due to the initial contribution of certain properties to PELP and NPR that were previously held in taxforeign jurisdictions and interest rates.United States TRSs.
InDuring 2014, 2013 and 2012, 2011 and 2010, we recognized a net deferred tax benefit of $14.3$87.2 million, $19.8$19.4 million and $52.2$14.3 million, respectively. Deferred income tax expensebenefit (expense) is generally a function of the period’s temporary differences and the utilization of net operating losses generated in prior years that had been previously recognized as deferred income tax assets in certain of our taxable subsidiaries operating in the United States or in foreign jurisdictions. TheDuring 2014, the majority of the deferred tax benefit recorded during 2010 is primarily due to impairment charges recorded to the book basiswe recognized was a result of real estate properties and investments in unconsolidated entities, net operating loss (“NOL”) carryforwards recorded for certain jurisdictions, and the reversal of deferred tax liabilities related to built-in-gains. In addition, duringof $62.8 million as part of the second quarter of 2010, we recognized a deferredFIBRA Prologis transaction ($30.4 million was offset by current income tax benefit of approximately $27.5expense) and $27.1 million resulting from the conversion of two of our European management companies to taxable entities. This conversion was approved by the applicable tax authorities in June 2010 and created an asset for tax purposes that will be utilized against future taxable income as it is amortized. The deferred tax benefit was partially offset by an increasedue to the valuation allowance in certain jurisdictions because we could not sustain a conclusion that it was more likely than not that we could realizeexpiration of the deferred tax assets and NOL carryforwards.holding period on properties previously acquired with existing built-in gains.
Our income taxes are discussed in more detail in Note 1716 to ourthe Consolidated Financial Statements in Item 8.Statements.
Discontinued Operations
Discontinued operations representAs discussed above, we adopted a component of an entity that has either been disposed of or is classified as held for sale if both the operations and cash flows of the component have been or will be eliminated from ongoing operations of the entity as a result of the disposal transaction and the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. The results of operations that have been classified asnew accounting standard regarding discontinued operations are reported separatelyeffective January 1, 2014, and none of our property dispositions in our Consolidated Financial Statements in Item 8.
During 2012, 2011 and 2010, we disposed of land subject to ground leases and 200, 94 and 205 operating properties, respectively, to third parties that2014 met the requirementscriteria to be classified as discontinued operations. We recognized aggregate net gains on these transactions, net of impairment charges, of $35.1 million, $58.6In 2014, 2013 and 2012, earnings from discontinued operations were $123.5 million and $234.6$75.9 million, during 2012, 2011 and 2010, respectively. TheDiscontinued operations under the previous standard represent the results of operations of these properties for 2012, 2011that were sold to third parties along with the related gain or loss on sale.
Net Earnings Attributable to Noncontrolling Interests
This amount represents the third-party investors’ share of the earnings generated in consolidated ventures in which we do not own 100% of the equity, as well as the limited partners’ interests in the Operating Partnership. In 2014, we recognized net earnings attributable to noncontrolling interests in AFORES of $64.8 million due to the FIBRA Prologis transaction, primarily related to the third-party investors’ share of the gain on disposition and 2010 were $27.6the net deferred income tax benefit.
In 2013, we earned a promote of $18.8 million $50.6from the cumulative returns of the investors of our consolidated co-investment venture, Prologis Institutional Alliance Fund II, over the life of the venture. Of that amount, $13.5 million represents the third-party investors’ portion and $96.5 million, respectively.is reflected as a component of noncontrolling interest.
See Notes 4 and 9Note 12 to ourthe Consolidated Financial Statements in Item 8.for further information on our consolidated co-investment ventures.
Other Comprehensive Income (Loss) – Foreign Currency Translation Losses, Net
ForWe recognized unrealized gains or losses related to the translation of our consolidated subsidiaries whose functional currency is notforeign subsidiaries’ assets and liabilities into U.S. dollars, along with realized and unrealized gains or losses associated with the changes in the fair value of derivative and non-derivative financial instruments that are designated and qualify as hedges of net investments in foreign operations. During 2014, we recorded net losses of $171.4 million principally due to the weakening of the Japanese yen, euro and British pound sterling to the U.S. dollar, we translate their financial statements into U.S. dollars at the time we consolidate those subsidiaries’ financial statements. Generally, assets and liabilities are translated at the exchange rate in effect as of the balance sheet date. The resulting translation adjustments, due to the fluctuations in exchange rates from the beginning of the period to the end of the period. In 2013, we recorded net losses of $234.7 million, which included approximately $190 million of foreign currency translation losses on the properties contributed to PELP and NPR due to the weakening of the euro and Japanese yen, respectively, to the U.S. dollar from December 31, 2012, through the date of the contributions. Also in 2013, we recorded net unrealized losses due to the weakening of the Japanese yen to the U.S. dollar, from the beginning of the period are included inForeign Currency Translation Losses, Net in ourConsolidated Statementsto the end of Comprehensive Income (Loss).
the period. During 2012, we recorded unrealized net losses of $79.0 million as the Japanese yen rates weakened relative to the U.S. dollar, by 10.1% from December 31, 2011 to December 31, 2012, offset slightly by the euro and British pound sterling slightly strengthening against the U.S. dollar, during the same period. During 2011, we recorded unrealized net losses of $192.6 million as the euro and British pound sterling remained relatively flat from December 31, 2010 to December 31, 2011, but both weakened to the U.S. dollar from the Merger and PEPR Acquisition date to December 31, 2011. These losses were offset slightly by the strengthening of the Japanese yen to the U.S. dollar during 2011. During 2010, we recognized unrealized net losses of $45.2 million mainly as a result of the weakening of the euro and British pound sterling to the U.S. dollar, offset by the Japanese yen strengthening against the U.S. dollar, from the beginning of the yearperiod to December 31, 2010.
Our total owned and managed properties includes operating industrial properties but not properties under development, properties held for sale or non-industrial properties and was as follows as of December 31 (square feet in thousands):
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Number of Properties | Square Feet | Number of Properties | Square Feet | Number of Properties | Square Feet | |||||||||||||||||||
Consolidated | 1,853 | 316,347 | 1,797 | 291,051 | 985 | 168,547 | ||||||||||||||||||
Unconsolidated | 1,163 | 208,753 | 1,403 | 267,752 | 1,179 | 255,367 | ||||||||||||||||||
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Totals | 3,016 | 525,100 | 3,200 | 558,803 | 2,164 | 423,914 |
Same Store Analysis
We evaluate the performanceend of the operating properties we own and manage using a “same store” analysis because the population of properties in this analysis is consistent from period to period, thereby eliminating the effects of changesperiod. See Note 18 in the composition of the portfolio on performance measures. We include properties from our consolidated portfolio, and properties owned by the co-investment ventures (accountedConsolidated Financial Statements for on the equity method) that are managed by us (referred to as “unconsolidated entities”), including those owned and managed by AMB prior to the Merger, in our same store analysis. We have defined the same store portfolio, for the three months ended December 31, 2012, as those properties that were in operation at January 1, 2011 and have been in operation throughout the same three-month periods in both 2012 and 2011. We have removed all properties that were disposed of to a third party or were classified as held for sale from the population for both periods. We believe the factors that impact rental income, rental expenses and net operating income in the same store portfolio are generally the same as for the total portfolio. In order to derive an appropriate measure of period-to-period operating performance, we remove the effects of foreign currency exchange rate movements by using the current exchange rate to translate from local currency into U.S. dollars, for both periods. The same store portfolio, for the three months ended December 31, 2012, included 502.0 million of aggregated square feet.further detail.
The following is a reconciliation of our consolidated rental income, rental expenses and net operating income (calculated as rental income and recoveries less rental expenses) for the full year, as included in our Consolidated Statements of Operations in Item 8, to the respective amounts in our same store portfolio analysis (dollars in thousands).
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2012 | ||||||||||||||||||||
Rental income and recoveries | $ | 445,405 | $ | 470,388 | $ | 471,688 | $ | 481,743 | $ | 1,869,224 | ||||||||||
Rental expenses | 119,278 | 126,746 | 127,779 | 131,696 | 505,499 | |||||||||||||||
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Net operating income | $ | 326,127 | $ | 343,642 | $ | 343,909 | $ | 350,047 | $ | 1,363,725 | ||||||||||
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Rental income and recoveries | $ | 187,931 | $ | 268,429 | $ | 423,286 | $ | 415,226 | $ | 1,294,872 | ||||||||||
Rental expenses | 57,680 | 73,667 | 117,043 | 110,169 | 358,559 | |||||||||||||||
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Net operating income | $ | 130,251 | $ | 194,762 | $ | 306,243 | $ | 305,057 | $ | 936,313 |
Rental Income (1)(2) Consolidated: Rental income per our Consolidated Statements of Operations Rental recoveries per our Consolidated Statements of Operations Adjustments to derive same store results: Rental income and recoveries of properties not in the same store portfolio — properties developed and acquired during the period and land subject to ground leases Effect of changes in foreign currency exchange rates and other Unconsolidated entities: Rental income of properties managed by us and owned by our unconsolidated entities Same store portfolio – rental income (2)(3) Rental Expenses (1)(4) Consolidated: Rental expenses per our Consolidated Statements of Operations Adjustments to derive same store results: Rental expenses of properties not in the same store portfolio — properties developed and acquired during the period and land subject to ground leases Effect of changes in foreign currency exchange rates and other Unconsolidated entities: Rental expenses of properties managed by us and owned by our unconsolidated entities Adjusted same store portfolio – rental expenses (3)(4) Net Operating Income (1) Consolidated: Net operating income per our Consolidated Statements of Operations Adjustments to derive same store results: Net operating income of properties not in the same store portfolio — properties developed and acquired during the period and land subject to ground leases Effect of changes in foreign currency exchange rates and other Unconsolidated entities: Net operating income of properties managed by us and owned by our unconsolidated entities Adjusted same store portfolio – net operating income (3) For the Three Months Ended December 31, 2012 2011 Percentage
Change $ 387,299 $ 332,721 94,444 82,505 (31,849) (16,711) (227) (7,748) 318,070 363,190 $ 767,737 $ 753,957 1.8% $ 131,696 $ 110,169 (8,246) (8,287) 1,302 579 83,927 93,018 $ 208,679 $ 195,479 6.8% $ 350,047 $ 305,057 (23,603) (8,424) (1,529) (8,327) 234,143 270,172 $ 559,058 $ 558,478 0.1%
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A majority of the properties acquired by us were subjected to environmental reviews either by us or the previous owners. While some of these assessments have led to further investigation and sampling, none of the environmental assessments have revealed an environmental liability that we believe would have a material adverse effect on our business, financial condition or results of operations.
We record a liabilitySee Note 19 in the Consolidated Financial Statements for the estimated costs offurther information about environmental remediation to be incurred in connection with certain operating properties we acquire, as well as certain land parcels we acquire in connection with the planned development of the land. The liability is established to cover the environmental remediation costs, including cleanup costs, consulting fees for studies and investigations, monitoring costs and legal costs relating to cleanup, litigation defense, and the pursuit of responsible third parties. We purchase various environmental insurance policies to mitigate our exposure to environmental liabilities. We are not aware of any environmental liability that we believe would have a material adverse effect on our business, financial condition or results of operations.
Liquidity and Capital Resources
Overview
We consider our ability to generate cash from operating activities, dispositions of properties and from available financing sources to be adequate to meet our anticipated future development, acquisition, operating, debt service, dividend and distribution requirements.
Near-Term Principal Cash Sources and Uses
In addition to dividends to the common and preferred stockholders of Prologis Inc. and distributions to the holders of limited partnership units of the Operating Partnership and other partnerships, we expect our primary cash needs will consist of the following:
repayment of debt, including payments on our credit facilities and scheduled principal payments in 20132015 of $599 million (which includes $460 million due March 15, 2015, on exchangeable/convertible notes that are exchangeable/convertible at a rate of 25.8244 shares of our common stock per $1,000 principal amount of notes (equivalent to an exchange or conversion price of $38.72));
completion of the development and leasing of the properties in our consolidated development portfolio (we had 79 properties at December 31, 2014, in our development portfolio that were 46.7% leased with a current investment of $1.5 billion;billion and a total expected investment of $2.5 billion when completed and leased, leaving $1.0 billion remaining to be spent);
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development of new properties for long-term investment, including the acquisition of land in certain markets;
capital expenditures and leasing costs on properties in our operating portfolio;
additional investments in current unconsolidated entities or new investments in future unconsolidated entities;
depending on market and other conditions, acquisition of operating properties and/or portfolios of operating properties in global or regional markets for direct, long-term investment in our consolidated portfolio (this might include acquisitions from our co-investment ventures); and
depending on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors, we may repurchase our outstanding debt or equity securities through cash purchases, in open market purchases, privately negotiated transactions, tender offers or otherwise.
We expect to fund our cash needs principally from the following sources, all subject to market conditions:
available unrestricted cash balances ($100.8350.7 million at December 31, 2012)2014);
property operations;
fees and incentives earned for services performed on behalf of the co-investment ventures and distributions received from the co-investment ventures;
proceeds from the disposition of properties, land parcels or other investments to third parties;
proceeds from the contributions or sales of properties to current or future co-investment ventures, including our planned contributions to NPR and PELP;ventures;
borrowing capacity under our current credit facility arrangements discussed below ($1.22.7 billion available as ofat December 31, 2012)2014), other facilities or borrowing arrangements;
proceeds from the issuance of equity securities;securities, including through the ATM program (we issued 3.3 million shares of common stock in 2014, generating net proceeds of $140.1 million – see Note 10 to the Consolidated Financial Statements for details on this program); and
proceeds from the issuance of debt securities, including secured mortgage debt.
Debt
As ofDebt balances at December 31 2012,consisted of the following (dollars in millions):
2014 | 2013 | |||||||
Debt outstanding | $ | 9,380 | $ | 9,011 | ||||
Weighted average interest rate | 3.6% | 4.2% | ||||||
Weighted average maturity (in months) | 70 | 58 |
In order to economically hedge our investment in Europe, reduce our borrowing costs and extend our maturities, during 2014 we had $11.8issued several series of notes denominated in euro, as follows (dollars and euros in thousands):
2014 | Principal Amount | Interest Rate | Effective Interest Rate | Maturity Date | ||||||||||||||||
February 2014 | € | 700,000 | $ | 959,420 | 3.375% | 3.52% | February 2024 | |||||||||||||
June 2014 | € | 500,000 | $ | 680,550 | 3.000% | 3.10% | June 2026 | |||||||||||||
October 2014 | € | 600,000 | $ | 756,420 | 1.375% | 1.40% | October 2020 |
We used the proceeds from these issuances to repay or redeem $1.3 billion of debt. During 2012outstanding senior notes scheduled to mature in 2015 through 2022, secured mortgage debt of $528.0 million, fund additional investments in our co-investment ventures and general corporate purposes.
In 2014, we temporarily increasedterminated our debt by $1.4 billion as part of the Co-Investment Venture Acquisitionsexisting senior term loan agreement and the issuance of $493.1entered into a new agreement under which loans can be obtained in U.S. dollars, euro, Japanese yen and British pounds sterling in an aggregate amount not to exceed €500 million of new debt, offset partially by repayments of debt.
As of($607.1 million at December 31, 2012,2014). We may pay down and re-borrow under this arrangement. We had borrowings of €190 million ($230.7 million at December 31, 2014). We also entered into a Japanese yen term loan under which we may obtain loans in an aggregate amount not to exceed ¥40.9 billion ($342.1 million at December 31, 2014). We had fully drawn this term loan at December 31, 2014.
At December 31, 2014, we had credit facilities with an aggregate borrowing capacity of $2.1$2.7 billion, all of which $1.2 billion was available remaining capacity.for borrowing.
As ofAt December 31, 2012,2014, we were in compliance with all of our debt covenants. These covenants, which include customary financial covenants for total debt ratios, encumbered debt ratios and fixed charge coverage ratios.
In February 2013, we entered into a $500 million bridge loan under which we can borrow in U.S. dollar, euro or yen. We borrowed ¥20 billion under the bridge loan to make our initial cash investment in NPR. As discussed earlier, on February 14, 2013 we closed on the contribution of properties to NPR and received ¥153 billion ($1.7 billion) in net cash proceeds, which were used to pay down existing secured mortgage debt on the properties being contributed, the borrowings outstanding on this bridge loan and the remainder will be used to repay the outstanding borrowings on our credit facilities.
In connection with the PELP contribution, we expect to use the proceeds to further reduce debt and to fund our development and acquisition activities.
See Note 109 to ourthe Consolidated Financial Statements in Item 8 for further information on our debt.
Equity Commitments Related to Certain Co-Investment Ventures
Certain co-investment ventures have equity commitments from us and our venture partners. Our venture partners fulfill their equity commitment with cash. We may fulfill our equity commitment through contributions of properties or cash. Our venture partners fulfill their equity commitment with cash. We are committed to offer to contribute certain properties that we develop and stabilize in select markets in Europe, Mexico and Japan to certain co-investment ventures. These ventures are committed to acquire such properties, subject to certain exceptions, including that the properties meet certain specified leasing and other criteria, and that the ventures have available capital. Generally the venture obtains financing for the properties and therefore the equity commitment is less than the acquisition price of the real estate. We are not obligated to contribute properties at a loss. Depending on market conditions, the investment objectives of the ventures, our liquidity needs and other factors, we may make contributions of properties to these ventures through the remaining commitment period.
The following table is a summary of remaining equity commitments as of December 31, 2012 (in millions):
Equity commitments | Expiration date for remaining commitments | |||||||
Prologis Targeted U.S. Logistics Fund (1) | ||||||||
Prologis | $ | - | Open-Ended | (1) | ||||
Venture Partners | $ | 30.0 | ||||||
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Prologis SGP Mexico (2) | ||||||||
Prologis | $ | 24.6 | (2 | ) | ||||
Venture Partner | $ | 98.1 | ||||||
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Europe Logistics Venture 1 (3) | ||||||||
Prologis | $ | 54.5 | February 2014 | |||||
Venture Partner | $ | 309.0 | ||||||
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Prologis China Logistics Venture 1 | ||||||||
Prologis | $ | 68.6 | March 2015 | |||||
Venture Partner | $ | 388.7 | ||||||
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Total Unconsolidated | ||||||||
Prologis | $ | 147.7 | ||||||
Venture Partner | $ | 825.8 | ||||||
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Prologis Brazil Fund | ||||||||
Prologis | $ | 118.5 | December 2013 | |||||
Venture Partner | $ | 118.5 | ||||||
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Total Consolidated | ||||||||
Prologis | $ | 118.5 | ||||||
Venture Partner | $ | 118.5 | ||||||
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Grand Total | ||||||||
Prologis | $ | 266.2 | ||||||
Venture Partners | $ | 944.3 |
For more information on equity commitments for our unconsolidated co-investment ventures, see Note 65 to ourthe Consolidated Financial StatementsStatements. We have one consolidated co-investment venture, the Brazil Fund, with equity commitments at December 31, 2014, of $75.4 million, of which $37.7 million is our share and expires in Item 8.December 2017. The equity commitments are denominated in Brazilian real and called and reported in U.S. dollars.
Cash Provided by Operating Activities
Net cash provided by operating activities was $463.5$704.5 million, $207.1$485.0 million and $240.8$463.5 million for the years ended December 31, 2012, 20112014, 2013 and 2010,2012, respectively. In 2012, 20112013 and 2010,2012, cash provided by operating activities was less than the cash dividends paid on common and preferred stock by $88.9 million and $104.3 million, $207.0 million and $65.3 million, respectively. WeIn both years, we used a portion of the cash proceeds from the disposition of real estate properties ($2.05.4 billion in 2012, $1.62013 and $2.0 billion in both 2011 and 2010)2012) to fund dividends on common and preferred stock not covered by cash flows from operating activities.
Cash Investing and Cash Financing Activities
For the years ended December 31, 2012, 20112014, 2013 and 2010,2012, investing activities provided net cash of $529.6 million, used net cash of $233.1$488.3 million and provided net cash of $733.3$2.3 billion and $529.6 million, respectively. The following are the significant activities for all periods presented:
We generated cash from contributions and dispositions of properties and land parcels of $2.0 billion in 2012 and $1.6 billion in both 2011 and 2010. In 2012, we disposed of land, land subject to ground leases and 200 operating properties and contributed 25 operating properties to unconsolidated entities. We have a stated objective to reduce debt that we expect to achieve in part with proceeds received from sales and contributions of properties and, therefore, expect this activity to continue. In 2011, we disposed of land, land subject to ground leases and 94 operating properties that included the majority of our non-industrial assets and contributed 57 operating properties to unconsolidated entities. In 2010, we disposed of land and 205 operating properties and contributed 9 operating properties to unconsolidated entities.
• | Real estate development.In 2014, 2013 and 2012, we invested $1.1 billion, $845.2 million and $793.3 million, respectively, in real estate development and leasing costs for first generation leases. We have 55 properties under development and 24 properties that were completed but not stabilized at December 31, 2014, and we expect to continue to develop new properties as the opportunities arise. |
In 2012, 2011 and 2010, we invested $793.3 million, $811.0 million and $324.5 million, respectively, in real estate development and leasing costs for first generation leases. We have 30 properties under development and 15 properties that are completed but not stabilized as of December 31, 2012 and we expect to continue to develop new properties as the opportunities arise.
• | Real estate acquisitions.In 2014, we acquired total real estate of $612.3 million, which included 1,055 acres of land and eight operating properties. In 2013, we acquired 536 acres of land and 26 operating properties for a combined total of $514.6 million, which includes properties acquired in connection with the wind-down of Prologis Japan Fund I. In 2012, we acquired 1,537 acres of land and 12 operating properties for a combined total of $254.4 million. |
We invested $214.2 million, $144.1 million and $85.8 million in our operating properties during 2012, 2011 and 2010, respectively, which included recurring capital expenditures, tenant improvements and leasing commissions on existing operating properties that were previously leased. The increase in 2012 is primarily a result of our larger portfolio from the Merger, PEPR Acquisition and Co-Investment Venture Acquisitions and our significant leasing activity.
• | Capital expenditures.We invested $212.6 million, $228.0 million and $214.2 million in our operating properties during 2014, 2013 and 2012, respectively, which included recurring capital expenditures, tenant improvements and leasing commissions on existing operating properties that were previously leased. |
• | Investments in and advances to.In 2014, 2013 and 2012, we invested cash of $739.6 million, $1.2 billion and $165.0 million, respectively, in our unconsolidated co-investment ventures and other ventures, net of repayment of advances. Our investment in 2014 principally relates to additional investments in PELP of $461.2 million, Brazil Fund and related joint ventures of $66.3 million, Prologis Targeted Europe Logistics Fund of $72.9 million, NPR of $56.6 million and Prologis European Properties Fund II of $53.1 million, in each case, representing our proportionate share. The co-investment ventures used these investments for the acquisition of operating properties, the repayment of debt by the ventures and development costs. Our investment in 2013 |
In 2012, we acquired 1,537 acres of land and 12 operating properties aggregating 1.6 million square feet for a combined total of $254.4 million. In 2011, we acquired 78 acres of land and 8 operating properties aggregating 1.5 million square feet for a combined total of $214.8 million. In 2010, we acquired 33 acres of land and 10 operating properties aggregating 2.4 million square feet for a combined total of $133.7 million.
principally relates to our investment in NPR of $411.5 million, Prologis Targeted Europe Logistics Fund of $210.2 million, Prologis European Properties Fund II of $167.2 million, PELP of $162.3 million, Brazil Fund and related joint ventures of $111.5 million and Prologis Targeted U.S. Logistics Fund of $104.8 million. See Note 5 to the Consolidated Financial Statements for more detail on these investments. |
In connection with the acquisition of NAIF II in 2012, we repaid the loan from NAIF II to our partner for a total of $336.1 million. Also in 2012, we paid $47.8 million in connection with the acquisition of two of our unconsolidated entities.
• | Return of investment.We received distributions from unconsolidated co-investment ventures and other ventures as a return of investment of $244.3 million, $411.9 million and $291.7 million during 2014, 2013 and 2012, respectively. In 2013, we received $106.3 million in connection with the wind down of Prologis Japan Fund I. During 2012, we received $95.0 million, which represented a return of capital from one of our other joint ventures that held a note receivable that was repaid. |
In 2012, 2011 and 2010, we invested cash of $165.0 million, $37.8 million and $335.4 million, respectively, in unconsolidated entities net of repayment of advances by the entities. Our investment in 2012 primarily relates to an increase in our unconsolidated joint ventures in Brazil.
• | Proceeds from dispositions and contributions.We generated cash from dispositions and contributions of real estate properties of $2.3 billion in 2014, $5.4 billion in 2013 and $2.0 billion in 2012. In 2014, we contributed 115 real estate properties owned on a consolidated basis to FIBRA Prologis and received cash proceeds of $390.6 million, primarily attributable to the third-party partners in AFORES and subsequently distributed the proceeds to them. We also disposed of land, ground leases and 145 operating properties to third parties and contributed 11 operating properties to unconsolidated co-investment ventures. In 2013, we disposed of land and 89 operating properties to third parties and contributed 254 operating properties to unconsolidated co-investment ventures. The activity in 2013 primarily included the contribution of real estate properties to our co-investment ventures, PELP and NPR of $1.3 billion and $1.9 billion, respectively. In 2012, we disposed of land and 200 operating properties to third parties and contributed 25 operating properties to unconsolidated co-investment ventures. |
We received distributions from unconsolidated entities as a return of investment of $291.7 million, $170.2 million and $220.2 million during 2012, 2011 and 2010, respectively. We received $95.0 million during 2012, which represented a return of capital, from one of our other joint ventures that held a note receivable that was repaid during the year.
• | Purchase of a controlling interest.In 2014, we paid net cash of $590.4 million to acquire a controlling interest in NAIF. In 2013, we paid net cash of $678.6 million to acquire our partners’ interest in Prologis North American Industrial Fund III and SGP Mexico. In connection with the acquisition of Prologis North American Industrial Fund II (“NAIF II”) in 2012, we repaid the loan from NAIF II to our partner for a total of $336.1 million. The loan repayment was reduced by the cash acquired in the consolidation of NAIF II. Also in 2012, we paid $47.8 million in connection with the acquisition of two of our unconsolidated co-investment ventures. |
In 2012 we received a full redemption of a $55.0 million note receivable that was issued in 2011 through the sale of non-industrial assets. In 2010, we invested $188.0 million in a preferred equity interest in a subsidiary of a buyer of a portfolio of assets and we purchased an $81.0 million loan to NAIF II from the lender.
In connection with the Merger in 2011, we acquired $234.0 million in cash.
During the second quarter of 2011, we used $1.0 billion of cash to purchase units in PEPR. The acquisition was funded with borrowings on a new €500 million bridge facility (“PEPR Bridge Facility”), put in place for the acquisition, and borrowings under our other credit facilities that were subsequently paid from our equity offering (see below for more detail).
• | Proceeds from repayment of notes receivable.In June 2014, we received $188.0 million for the payment in full of the notes receivable backed by real estate that originated in 2010 through the sale of a portfolio of industrial properties. In 2012, we received a full redemption of a $55.0 million note receivable that was issued in 2011 through the sale of non-industrial assets. |
For the years ended December 31, 2012, 20112014, 2013 and 2010,2012, financing activities used net cash of $1.1 billion, provided net cash of $163.3$337.8 million and used net cash of $1.0$2.4 billion and $1.1 billion, respectively. The following are the significant activities for all periods presented:
• | Proceeds from issuance of common stock. |
In 2012,December 2014, we repurchased and extinguished exchangeable senior notes, secured mortgage debt, senior term loans, and secured mortgage and other debtreceived gross proceeds of consolidated entities for $1.7 billion.$142.1 million from the issuance of 3.3 million shares of common stock from our ATM program. In 2011 and 2010,April 2013, we repurchased and extinguished senior notes, exchangeable senior notes and secured mortgage debt for $894.2received net proceeds of $1.4 billion from the issuance of 35.65 million and $3.1 billion, respectively.shares of common stock.
In 2012, we incurred $1.4 billion of debt, principally secured mortgage debt and senior term loan debt. We used the proceeds from the senior term loan to pay off the two outstanding term loans assumed in connection with the Merger and the remainder to pay down borrowings on our credit facilities. In 2011, we incurred $577.9December 2014, Norges Bank Investment Management exercised a warrant for $213.8 million in secured mortgage debt and borrowed $721.0exchange for six million onshares of Prologis common stock. See Note 4 to the PEPR Bridge Facility. In 2010, we issued $1.1 billion of senior notes due 2017 and 2020 and $460.0 million of exchangeable senior notes due 2015. The proceeds were used to repay borrowings under our credit facilities. We also incurred $300.3 million in secured mortgage debt.
We received net proceeds on our credit facilities of $9.1 million in 2012 and borrowed a net $37.6 million and $246.3 million in 2011 and 2010, respectively. In connection with the Merger in 2011, we repaid the outstanding balance under our existing global line of credit and entered into new credit facilities.
We made net payments of $196.7 million, $975.5 million and $257.5 million on regularly scheduled debt principal and maturity payments during 2012, 2011 and 2010, respectively. In 2011, we used $711.8 million in proceeds from our equity offering to repay the amounts borrowed under the PEPR Bridge Facility. Additionally, 2011 activity included the repayment of €101.3 million ($146.8 million) of the euro notes that matured in April 2011.Consolidated Financial Statements for more detail.
We generated proceeds from the issuance of common stock under our incentive stock plans, principallyprimarily from the exercise of stock options, of $22.3 million, $22.4 million and $31.0 million in 2012. We had minimal activity in 2011. We generated proceeds from the sale2014, 2013 and issuance of common stock under our various common share plans of $30.8 million during 2010, primarily from our at-the-market equity issuance program. The at-the-market equity program was terminated in connection with the Merger.
We paid distributions of $520.3 million, $387.1 million and $280.7 million to our common stockholders during 2012, 2011 and 2010, respectively. We paid dividends on our preferred stock of $47.6 million, $27.0 million and $25.4 million during 2012, 2011 and 2010, respectively.
As part of the liquidation of PEPR, we made payments of $117.3 million in 2012 to purchase additional units of PEPR. Also in 2012, we purchased shares in Prologis Institutional Alliance Fund II for $14.1 million and our partner’s interest in certain properties in the Brazil Fund of $4.4 million and redeemed units of our limited partners in the Operating Partnership for cash of $5.8 million.
• | Dividends paid on common and preferred stock.We paid dividends of $672.2 million, $573.9 million and $567.8 million to our common and preferred stockholders during 2014, 2013 and 2012, respectively. |
In 2012 and 2011, noncontrolling interest partners made contributions of $70.8 million and $123.9 million, respectively, primarily for the purchase of real estate properties by our consolidated co-investment venture, Mexico Fondo Logistico. In addition, we distributed $44.1 million and $17.4 million to various noncontrolling interests in 2012 and 2011, respectively.
• | Redemption and repurchase of preferred stock.In 2014, we paid $27.6 million to repurchase shares of series Q preferred stock. In 2013, we paid $482.5 million to redeem all of the outstanding series L, M, O, P, R and S of preferred stock. |
• | Noncontrolling interest contributions.In 2014, 2013 and 2012, partners in consolidated co-investment ventures made contributions of $468.3 million, $145.5 million and $70.8 million, respectively. In 2014, the contributions were primarily related to the newly formed co-investment venture USLV. In 2013 and 2012, contributions from noncontrolling interest partners were primarily for the purchase of real estate properties by AFORES and development within Brazil Fund and related joint ventures. |
In June 2011, we completed an equity offering and issued 34.5 million shares of common stock and received net proceeds of approximately $1.1 billion. The proceeds were used to repay the PEPR Bridge Facility completely and the remainder was used to repay a portion of the borrowings outstanding under our credit facilities. In 2010, we received net proceeds of $1.1 billion from the issuance of 41.1 million common shares.
• | Noncontrolling interest distributions.We distributed $315.4 million, $116.0 million and $44.1 million to various noncontrolling interests in 2014, 2013 and 2012, respectively. The distributions in 2014 were principally related to a cash distribution of $249.9 million to our partners in AFORES due to buildings contributed to FIBRA Prologis and $28.6 million to our partners in Prologis AMS due to the disposition of the remaining properties of the venture. Distributions in 2013 include cash distributions of $40.6 million to our partners in Prologis AMS due to the disposition of a portfolio of properties. |
• | Purchase of noncontrolling interest.In 2013, we purchased our partner’s interest in Prologis Alliance Fund II (“Fund II”), a consolidated co-investment venture, for $245.8 million. In 2012, we purchased an additional interest in ProLogis European Properties (“PEPR”) for $117.3 million and Fund II for $14.1 million. |
• | Net proceeds from (payments on) credit facilities.We made net payments of $717.4 million and $93.1 million in 2014 and 2013 respectively, on our credit facilities and received net proceeds of $9.1 million in 2012 from our credit facilities. |
• | Repurchase and payment of debt.During 2014, we made payments of $2.2 billion on our previous term loan, $0.1 billion on regularly scheduled debt principal payments and payments at maturity and repurchased and extinguished exchangeable senior notes and secured mortgage debt of $1.9 billion. During 2013, we repurchased and extinguished exchangeable senior notes, secured mortgage debt, senior term loans and other debt of consolidated entities and made regularly scheduled debt principal payments and payments at maturity for a combined total of $6.0 billion. During 2012, we extinguished certain senior notes, exchangeable senior notes, secured mortgage debt, senior term loans, other debt and made regularly scheduled debt principal payments and payments at maturity for a combined total of $1.9 billion. |
• | Proceeds from the issuance of debt.In 2014, we issued €1.8 billion ($2.4 billion) of senior notes, $2.3 billion of term loans and $70.7 million of secured debt. In 2013, we issued senior notes, secured mortgage debt, term loan debt and other debt of $3.6 billion. In 2012, we issued $1.4 billion of debt, principally secured mortgage debt and senior term loan debt. See Note 9 to the Consolidated Financial Statements for more detail on the senior note issuances in 2014. |
Off-Balance Sheet Arrangements
Unconsolidated Co-Investment Ventures Debt
We had investments in and advances to certainour unconsolidated co-investment ventures, at December 31, 20122014, of $2.0$4.7 billion. These unconsolidated ventures had total third partythird-party debt of $7.2$6.6 billion (in the aggregate, not(of which $1.9 billion was our proportionate share) at December 31, 2012.2014. This debt is primarily secured, or collateralized by properties within the venture and is non-recourse to Prologis or the other investors in the co-investment ventures and matures as follows (in(dollars in millions):
2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | Discount/ Premium | Total (1) | Prologis Ownership % at 12/31/12 | ||||||||||||||||||||||||||||
Prologis North American Industrial Fund | $ | 80.0 | $ | - | $ | 108.7 | $ | 444.0 | $ | 205.0 | $ | 354.5 | $ | - | $ | 1,192.2 | 23.1 | % | ||||||||||||||||||
Prologis North American Industrial Fund III (2) | 502.4 | 146.2 | - | - | - | - | (0.8 | ) | 647.8 | 20.0 | % | |||||||||||||||||||||||||
Prologis Targeted U.S. Logistics Fund (3) | 187.1 | 103.3 | 180.2 | 241.5 | 14.2 | 823.2 | 16.6 | 1,566.1 | 23.9 | % | ||||||||||||||||||||||||||
Prologis Mexico Industrial Fund | - | - | - | - | 214.1 | - | - | 214.1 | 20.0 | % | ||||||||||||||||||||||||||
Prologis SGP Mexico | 62.5 | 3.9 | 4.1 | 144.8 | - | - | - | 215.3 | 21.6 | % | ||||||||||||||||||||||||||
Prologis European Properties Fund II | 84.7 | 574.0 | 258.9 | 233.8 | 66.5 | 520.3 | (4.1 | ) | 1,734.1 | 29.7 | % | |||||||||||||||||||||||||
Prologis Targeted Europe Logistics Fund | 9.6 | 395.2 | 232.1 | 2.3 | 2.5 | - | 8.4 | 650.1 | 32.4 | % | ||||||||||||||||||||||||||
Prologis Japan Fund 1 (4) | 478.6 | 2.4 | 4.1 | 110.4 | 249.5 | - | 3.9 | 848.9 | 20.0 | % | ||||||||||||||||||||||||||
Prologis China Logistics Venture 1 | - | - | - | 124.0 | - | - | - | 124.0 | 15.0 | % | ||||||||||||||||||||||||||
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Total co-investment ventures | $ | 1,404.9 | $ | 1,225.0 | $ | 788.1 | $ | 1,300.8 | $ | 751.8 | $ | 1,698.0 | $ | 24.0 | $ | 7,192.6 |
Weighted | Prologis Share | |||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | Thereafter | Disc/ Prem | Total | $ | % | |||||||||||||||||||||||||||||
Prologis Targeted U.S. Logistics Fund | $ | 149 | $ | 158 | $ | 14 | $ | 1,268 | $ | 9 | $ | 1,598 | 4.6% | $ | 389 | 24.3 | % | |||||||||||||||||||
FIBRA Prologis | 9 | 252 | 216 | 172 | 32 | 681 | 5.3% | 312 | 45.9 | % | ||||||||||||||||||||||||||
Prologis Targeted Europe Logistics Fund | 4 | 4 | 4 | 468 | - | 480 | 2.6% | 207 | 43.2 | % | ||||||||||||||||||||||||||
Prologis European Properties Fund II | 270 | 195 | 76 | 1,421 | (6) | 1,956 | 3.8% | 608 | 31.1 | % | ||||||||||||||||||||||||||
Prologis European Logistics Partners Sàrl | 3 | 203 | - | - | 2 | 208 | 3.8% | 104 | 50.0 | % | ||||||||||||||||||||||||||
Nippon Prologis REIT | - | 195 | 19 | 1,142 | 3 | 1,359 | 1.1% | 205 | 15.1 | % | ||||||||||||||||||||||||||
Prologis China Logistics Venture | 173 | - | - | 120 | - | 293 | 3.1% | 44 | 15.0 | % | ||||||||||||||||||||||||||
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Total co-investment ventures | $ | 608 | $ | 1,007 | $ | 329 | $ | 4,591 | $ | 40 | $ | 6,575 | 3.5% | $ | 1,869 |
At December 31, 2014, we did not guarantee any third-party debt of the co-investment ventures. In our role as the manager, we work with the co-investment ventures to refinance their maturing debt. There can be no assurance that the co-investment ventures will be able to refinance any maturing indebtedness on terms as favorable as the maturing debt, or at all. If the ventures are unable to refinance the maturing indebtedness with newly issued debt, they may be able to obtain funds by voluntary capital contributions from us and our partners or by selling assets. Certain of the ventures also have credit facilities, or unencumbered properties, both of which may be used to obtain funds.
Long-Term Contractual Obligations
We had long-term contractual obligations at December 31, 20122014 as follows (in millions):
Payments Due By Period | ||||||||||||||||||||
Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | Total | ||||||||||||||||
Debt obligations, other than credit facilities | $ | 1,476 | $ | 3,580 | $ | 2,335 | $ | 3,445 | $ | 10,836 | ||||||||||
Interest on debt obligations, other than credit facilities | 483 | 764 | 558 | 432 | 2,237 | |||||||||||||||
Unfunded commitments on the development portfolio (1) | 546 | 213 | - | - | 759 | |||||||||||||||
Operating lease payments | 38 | 71 | 58 | 385 | 552 | |||||||||||||||
Amounts due on credit facilities | - | 889 | - | - | 889 | |||||||||||||||
Interest on credit facilities | 16 | 11 | - | - | 27 | |||||||||||||||
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Totals | $ | 2,559 | $ | 5,528 | $ | 2,951 | $ | 4,262 | $ | 15,300 |
Payments Due By Period | ||||||||||||||||||||
Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | Total | ||||||||||||||||
Debt obligations, other than credit facilities and exchangeable debt | $ | 139 | $ | 1,712 | $ | 1,520 | $ | 5,462 | $ | 8,833 | ||||||||||
Interest on debt obligations, other than credit facilities and exchangeable debt | 352 | 623 | 471 | - | 1,446 | |||||||||||||||
Exchangeable debt | 460 | - | - | - | 460 | |||||||||||||||
Interest on exchangeable debt | 3 | - | - | - | 3 | |||||||||||||||
Unfunded commitments on the development portfolio (1) | 746 | 193 | - | - | 939 | |||||||||||||||
Operating lease payments | 32 | 58 | 51 | 392 | 533 | |||||||||||||||
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Total | $ | 1,732 | $ | 2,586 | $ | 2,042 | $ | 5,854 | $ | 12,214 |
(1) | We had properties in our development portfolio (completed and under development) at December 31, |
Distribution and Dividend Requirements
Our dividend policy on our common stock is to distribute a percentage of our cash flow to ensure we will meet the dividend requirements of the Internal Revenue Code, relative to maintaining our real estate investment trust status, while still allowing us to retain cash to meet other needs such as capital improvements and other investment activities.
In 2014 and 2013, we paid a quarterly cash dividend of $0.33 and $0.28 per common share, respectively. Our future common stock dividends may vary and will be determined by our board of directors upon the circumstances prevailing at the time, including our financial condition, operating results and real estate investment trust distribution requirements, and may be adjusted at the discretion of the board of directors during the year.
At December 31, 2014, we had one series of preferred stock outstanding – series Q. The annual dividend rate is 8.54% per share and dividends are payable quarterly in arrears.
Pursuant to the terms of our preferred stock, we are restricted from declaring or paying any dividend with respect to our common stock unless and until all cumulative dividends with respect to the preferred stock have been paid and sufficient funds have been set aside for dividends that have been declared for the relevant dividend period with respect to the preferred stock.
Other Commitments
On a continuing basis, we are engaged in various stages of negotiations for the acquisition and/or disposition of individual properties or portfolios of properties.
Distribution and Dividend Requirements
Our dividend policy on our common stock is to distribute a percentage of our cash flow to ensure we will meet the dividend requirements of the Internal Revenue Code, relative to maintaining our REIT status, while still allowing us to retain cash to meet other needs such as capital improvements and other investment activities.
In 2012, we paid a quarterly cash dividend of $0.28 per common share. A cash dividend of $0.28 for the first quarter of 2013 was declared on February 27, 2013. This dividend will be paid on March 29, 2013 to holders of common shares on March 12, 2013. Our future common stock dividends may vary and will be determined by our Board upon the circumstances prevailing at the time, including our financial condition, operating results and REIT distribution requirements, and may be adjusted at the discretion of the Board during the year.
At December 31, 2012, we had seven series of preferred stock outstanding. The annual dividend rates on preferred stock are 6.5% per Series L share, 6.75% per Series M share, 7.0% per Series O share, 6.85% per Series P share, 8.54% per Series Q share, 6.75% per Series R share and 6.75% per Series S share. The dividends on preferred stock are payable quarterly in arrears.
Pursuant to the terms of our preferred stock, we are restricted from declaring or paying any dividend with respect to our common stock unless and until all cumulative dividends with respect to the preferred stock has been paid and sufficient funds have been set aside for dividends that have been declared for the relevant dividend period with respect to the preferred stock.
A critical accounting policy is one that is both important to the portrayal of an entity’s financial condition and results of operations and requires judgment on the part of management. Generally, the judgment requires management to make estimates and assumptions about the effect of matters that are inherently uncertain. Estimates are prepared using management’s best judgment, after considering past and current economic conditions and expectations for the future. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. Changes in estimates could affect our financial position and specific items in our results of operations that are used by stockholders, potential investors, industry analysts and lenders in their evaluation of our performance. Of the accounting policies discussed in Note 2 to ourthe Consolidated Financial Statements, in Item 8, those presented below have been identified by us as critical accounting policies.
Impairment of Long-Lived Assets and Goodwill
We assess the carrying values of our respective long-lived assets, including goodwill, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable.
Recoverability of real estate assets is measured by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows. In order to review our real estate assets for recoverability, we consider current market conditions, as well as our intent with respect to holding or disposing of the asset. Our intent with regard to the underlying assets might change as market conditions change, as well as other factors, especially in the current global economic environment. Fair value is determined through various valuation techniques; including discounted cash flow models, applying a capitalization rate to estimated net operating income of a property, quoted market values and third party appraisals, where considered necessary. The use of projected future cash flows is based on assumptions that are consistent with our estimates of future expectations and the strategic plan we use to manage our underlying business. If our analysis indicates that the carrying value of the real estate asset is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the carrying value exceeds the current estimated fair value of the real estate property.
Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. We perform an annual impairment test for goodwill at the reporting unit level. The annual review is performed during the fourth quarter for all our reporting units. Additionally, we evaluate the recoverability of goodwill whenever events or changes in circumstances indicate that the carrying amounts of goodwill may not be fully recoverable.
In September 2011, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update that permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. We utilized the qualitative assessment for our 2012 annual impairment test.
Assumptions and estimates used in the recoverability analyses for future cash flows, discount rates and capitalization rates are complex and subjective. Changes in economic and operating conditions or our intent with regard to our investment that occurs subsequent to our impairment analyses could impact these assumptions and result in future impairment of our real estate properties and/or goodwill.
Other than Temporary Impairment of Investments in Unconsolidated Entities
When circumstances indicate there may have been a reduction in the value of an equity investment, we evaluate whether the loss in value is other than temporary. If we determine there is a loss in value that is other than temporary, we recognize an impairment charge to reflect the
investment at fair value. The use of projected future cash flows and other estimates of fair value, the determination of when a loss is other than temporary, and the calculation of the amount of the loss, is complex and subjective. Use of other estimates and assumptions may result in different conclusions. Changes in economic and operating conditions, as well as changes in our intent with regard to our investment, that occur subsequent to our review could impact these assumptions and result in future impairment charges of our equity investments.
Revenue Recognition – Gains on Disposition of Real Estate
We recognize gains from the contributions and sales of real estate assets, generally at the time the title is transferred, consideration is received and we no longer have substantial continuing involvement with the real estate sold. In many of our transactions, an entity in which we have an ownership interest will acquire a real estate asset from us. We make judgments based on the specific terms of each transaction as to the amount of the total profit from the transaction that we recognize given our continuing ownership interest and our level of future involvement with the entity that acquires the assets. We also make judgments regarding recognition in earnings of certain fees and incentives based on when they are earned, fixed and determinable.
Business Combinations
We acquire individual properties, as well as portfolios of properties, or businesses. When we acquire a business or individual operating properties, with the intention to hold the investment for the long-term, we allocate the purchase price to the various components of the acquisition based upon the fair value of each component. The components typically include land, building, debt, intangible assets related to above and below market leases, value of costs to obtain tenants, deferred tax liabilities and other assumed assets and liabilities in the case of an acquisition of a business. In an acquisition of multiple properties, we must also allocate the purchase price among the properties. The allocation of the purchase price is based on our assessment of estimated fair value and often times is based upon the expected future cash flows of the property and various characteristics of the markets where the property is located. The fair value may also include an enterprise value premium that we estimate a third party would be willing to pay for a portfolio of properties. The initial allocation of the purchase price is based on management’s preliminary assessment, which may differ when final information becomes available. Subsequent adjustments made to the initial purchase price allocation are made within the allocation period, which typically does not exceed one year.
Consolidation
We consolidate all entities that are wholly ownedwholly-owned and those in which we own less than 100% of the equity but control, as well as any variable interest entities in which we are the primary beneficiary. We evaluate our ability to control an entity and whether the entity is a variable interest entity and we are the primary beneficiary through consideration of the substantive terms of the arrangement to identify which enterprise has the power to direct the activities of the entity that most significantly impacts the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Investments in entities in whichthat we do not control but over which we have the ability to exercise significant influence over operating and financial policies are presented under the equity method. Investments in entities that we do not control and over which we do not exercise significant influence are carried at the lower of cost or fair value, as appropriate. Our ability to correctly assess our influence and/or control over an entity affects the presentation of these investments in our consolidated financial statements.the Consolidated Financial Statements.
Business Combinations
Upon acquisition of real estate that constitutes a business, which includes acquiring a controlling interest in an entity previously accounted for under the equity method of accounting, we allocate the purchase price to the various components of the acquisition based upon the fair value of each component. The components typically include land, building, debt, intangible assets related to above and below market leases, value of costs to obtain tenants, deferred tax liability and other assumed assets and liabilities in the case of an acquisition of a business. In an acquisition of multiple properties, we must also allocate the purchase price among the properties. The allocation of the purchase price is based on our assessment of estimated fair value and often is based upon the expected future cash flows of the property and various characteristics of the markets where the property is located. The fair value may also include an enterprise value premium that we estimate a third party would be willing to pay for a portfolio of properties. In the case of an acquisition of a controlling interest in an entity previously accounted for under the equity method of accounting, this allocation may result in a gain or a loss. The initial allocation of the purchase price is based on management’s preliminary assessment, which may differ when final information becomes available. Subsequent adjustments made to the initial purchase price allocation are made within the allocation period, not to exceed one year.
Capitalization of Costs and Depreciation
We capitalize costs incurred in developing, renovating, rehabilitating and improving real estate assets as part of the investment basis. Costs incurred in making repairs and maintaining real estate assets are expensed as incurred. During the land development and construction periods, we capitalize interest costs, insurance, real estate taxes and certain general and administrative costs of the personnel performing development, renovations and rehabilitation if such costs are incremental and identifiable to a specific activity to get the asset ready for its intended use. Capitalized costs are included in the investment basis of real estate assets. We also capitalize costs incurred to successfully originate a lease that result directly from, and are essential to, the acquisition of that lease. Leasing costs that meet the requirements for capitalization are presented as a component of other assets.
We estimate the depreciable portion of our real estate assets and related useful lives in order to record depreciation expense. Our ability to estimate the depreciable portions of our real estate assets and useful lives is critical to the determination of the appropriate amount of depreciation expense recorded and the carrying value of the underlying assets. Any change to the assets to be depreciated and the estimated depreciable lives of these assets would have an impact on the depreciation expense recognized.
Revenue Recognition – Gains on Disposition of Real Estate and Strategic Capital Income
We recognize gains from the contributions and sales of real estate assets, generally at the time the title is transferred, consideration is received and we no longer have substantial continuing involvement with the real estate sold. In many of our transactions, an entity in which we have an equity investment will acquire a real estate asset from us. We make judgments based on the specific terms of each transaction as to the amount of the total profit from the transaction that we recognize given our continuing ownership interest and our level of future involvement with the entity that acquires the assets. In addition, we make judgments regarding recognition in earnings of certain fees and incentives earned for services provided to these entities based on when they are earned, fixed and determinable.
Other than Temporary Impairment of Investments in Unconsolidated Entities
When circumstances indicate there may have been a reduction in the value of an equity investment, we evaluate whether the loss in value is other than temporary. If we determine there is a loss in value that is other than temporary, we recognize an impairment charge to reflect the investment at fair value. The use of projected future cash flows and other estimates of fair value, the determination of when a loss is other than temporary and the calculation of the amount of the loss is complex and subjective. Use of other estimates and assumptions may result in different conclusions. Changes in economic and operating conditions, as well as changes in our intent with regard to our investment that occur subsequent to our review, could impact these assumptions and result in future impairment charges of our equity investments.
Derivative Financial Instruments
Derivatives instruments can be designated as fair value hedges, cash flow hedges or hedges of net investments in foreign operations. We do not use derivatives for trading or speculative purposes. Accounting for derivatives as hedges requires that at inception, and over the term of the instruments, the hedged item and derivative qualify for hedge accounting. The rules and interpretations for derivatives are complex. Failure to apply this guidance correctly may result in all changes in fair value of the derivative being recognized in earnings.
We assess both at inception, and at least quarterly thereafter, whether the derivatives used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. Any ineffective portion of a derivative financial instrument’s change in fair value is immediately recognized in earnings. Derivatives not designated as hedges are to manage our exposure to foreign currency fluctuations and variable interest rates but do not meet the strict hedge accounting requirements.
See Note 18 to the Consolidated Financial Statements for additional information about our derivative financial instrument policy.
Income Taxes
As part of the process of preparing our consolidated financial statements, significant management judgment is required to estimate our income tax liability for each taxable entity, the liability associated with open tax years that are under review, our REIT taxable income and our compliance with REIT requirements. Our estimates are based on interpretation of tax laws. We estimate our actual current income tax due and assess temporary differences resulting from differing treatment of items for book and tax purposes resulting in the recognition of deferred income tax assets and liabilities. These estimates may have an impact on the income tax expense recognized. Adjustments may be required by a change in assessment of our deferred income tax assets and liabilities,liabilities; changes in assessments of the recognition of income tax benefits for certain non-routine transactions,transactions; changes due to audit adjustments by federal, international and state tax authorities,authorities; our inability to qualify as a REIT,REIT; the potential for built-in-gain recognition,built-in gain recognition; changes in the assessment of properties to be contributed to taxable REIT subsidiaries and changes in tax laws. Adjustments required in any given period are included within income tax expense. We recognize the tax benefit from an uncertain tax position only if it is “more-likely-than-not”“more likely than not” that the tax position will be sustained on examination by taxing authorities.
Derivative Financial InstrumentsImpairment of Long-Lived Assets
All derivatives are recognized at fair value inWe assess the carrying values of our Consolidated Balance Sheets within the line itemsOther Assetsrespective long-lived assets whenever events orAccounts Payable and Accrued Expenses, as applicable. We do not net our derivative position by counterparty for purposes of balance sheet presentation and disclosure. The accounting for gains and losses that result from changes in circumstances indicate that the fair valuescarrying amounts of derivative instruments depends on whetherthese assets may not be fully recoverable.
Recoverability of real estate assets is measured by comparison of the derivatives are designatedcarrying amount of the asset to the estimated future undiscounted cash flows. In order to review our real estate assets for recoverability, we consider current market conditions, as and qualifywell as hedging instruments. Derivatives can be designatedour intent with respect to holding or disposing of the asset. Our intent with regard to the underlying assets might change as fairmarket conditions change. Fair value hedges,is determined through various valuation techniques, including discounted cash flow hedges or hedges of net investments in foreign operations.
For derivatives that will be accounted for as hedging instruments in accordance with the accounting standards, we formally designate and document, at inception, the financial instrument asmodels, applying a hedgecapitalization rate to estimated NOI of a specific underlying exposure, the risk management objectiveproperty, quoted market values and third-party appraisals, where considered necessary. The use of projected future cash flows is based on assumptions that are consistent with our estimates of future expectations and the strategy for undertaking the hedge transaction. In addition,strategic plan we formally assess both at inception and at least quarterly thereafter, whether the derivatives used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. Any ineffective portion of a derivative financial instrument’s change in fair value is immediately recognized in earnings. Derivatives not designated as hedges are not speculative and may be useduse to manage our exposureunderlying business. If our analysis indicates that the carrying value of a real estate property that we expect to foreign currency fluctuations and variable interest rates but dohold is not meetrecoverable on an undiscounted cash flow basis, we recognize an impairment charge for the strict hedge accounting requirements.
Changes inamount by which the carrying value exceeds the current estimated fair value of derivatives that are designated and qualify as cash flow hedges and hedgesthe real estate property. At the time our intent changes to dispose of net investments in foreign operations are recorded inAccumulated Other Comprehensive Loss inone of our Consolidated Balance Sheets. Due toreal estate properties, we compare the high degree of effectiveness between the hedging instruments and the underlying exposures hedged, fluctuations in thecarrying value of the derivative instruments will generally be offset by changesproperty to the estimated proceeds from disposition. If there is an impairment, we record an impairment for any excess, including costs to sell.
Assumptions and estimates used in the fair values orrecoverability analyses for future cash flows, discount rates and capitalization rates are complex and subjective. Changes in economic and operating conditions or our intent with regard to our investment that occurs subsequent to our impairment analyses could impact these assumptions and result in future impairment of the underlying exposures being hedged. The changes in fair values of derivatives that were not designated and/or did not qualify as hedging instruments are immediately recognized in earnings. For cash flow hedges, we reclassify changes in the fair value of derivatives into the applicable line item in our Consolidated Statements of Operations in which the hedged items are recorded in the same period that the underlying hedged items affect earnings.long-lived assets.
See Note 2 to ourthe Consolidated Financial Statements in Item 8.Statements.
FFO is a non-GAAPfinancial measure that is not determined in accordance with U.S. generally accepted accounting principles (“GAAP”), but is a measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net earnings. Although the National Association of Real Estate Investment Trusts (“NAREIT”) has published a definition of FFO, modifications to the NAREIT calculation of FFO are common among REITs,real estate investment trusts, as companies seek to provide financial measures that meaningfully reflect their business.
FFO is not meant to represent a comprehensive system of financial reporting and does not present, nor do we intend it to present, a complete picture of our financial condition and operating performance. We believe net earnings computed under GAAP remains the primary measure of performance and that FFO is only meaningful when it is used in conjunction with net earnings computed under GAAP. Further, we believe our consolidated financial statements, prepared in accordance with GAAP, provide the most meaningful picture of our financial condition and our operating performance.
NAREIT’s FFO measure adjusts net earnings computed under GAAP to exclude historical cost depreciation and gains and losses from the sales, along with impairment charges, of previously depreciated properties. We agree that these NAREIT adjustments are useful to investors for the following reasons:
(i) | historical cost accounting for real estate assets in accordance with GAAP assumes, through depreciation charges, that the value of real estate assets diminishes predictably over time. NAREIT stated in its White Paper on FFO “since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.” Consequently, NAREIT’s definition of FFO reflects the fact that real estate, as an asset class, generally appreciates over time and depreciation charges required by GAAP do not reflect the underlying economic realities. |
(ii) | REITs were created |
Our FFO Measures
At the same time that NAREIT created and defined its FFO measure for the REIT industry, it also recognized that “management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community.” We believe stockholders, potential investors and financial analysts who review our operating results are best served by a defined FFO measure
that includes other adjustments to net earnings computed under GAAP in addition to those included in the NAREIT definedNAREIT-defined measure of FFO. Our FFO measures are used by management in analyzing our business and the performance of our properties and we believe that it is important that stockholders, potential investors and financial analysts understand the measures management uses.
We use these FFO measures, including by segment and region, to: (i) evaluate our performance and the performance of our properties in comparison to expected results and results of previous periods, relative to resource allocation decisions; (ii) evaluate the performance of our management; (iii) budget and forecast future results to assist in the allocation of resources; (iv) assess our performance as compared to similar real estate companies and the industry in general; and (v) evaluate how a specific potential investment will impact our future results. Because we make decisions with regard to our performance with a long-term outlook, we believe it is appropriate to remove the effects of short-term items that we do not expect to affect the underlying long-term performance of the properties. The long-term performance of our properties is principally driven by rental income. While not infrequent or unusual, these additional items we exclude in calculatingFFO, as defined by Prologis, defined below, are subject to significant fluctuations from period to period that cause both positive and negative short-term effects on our results of operations in inconsistent and unpredictable directions that are not relevant to our long-term outlook.
We use our FFO measures as supplemental financial measures of operating performance. We do not use our FFO measures as, nor should they be considered to be, alternatives to net earnings computed under GAAP, as indicators of our operating performance, as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs.
FFO, as defined by Prologis
To arrive atFFO, as defined by Prologis, we adjust the NAREIT definedNAREIT-defined FFO measure to exclude:
(i) | deferred income tax benefits and deferred income tax expenses recognized by our subsidiaries; |
(ii) | current income tax expense related to acquired tax liabilities that were recorded as deferred tax liabilities in an acquisition, to the extent the expense is offset with a deferred income tax benefit in GAAP earnings that is excluded from our defined FFO measure; |
(iii) | unhedged foreign currency exchange gains and losses resulting from debt transactions between us and our foreign consolidated subsidiaries and our foreign unconsolidated entities; |
(iv) | foreign currency exchange gains and losses from the remeasurement (based on current foreign currency exchange rates) of certain |
(v) | mark-to-market adjustments and related amortization of debt discounts associated with derivative financial instruments. |
We calculateFFO, as defined by Prologisfor our unconsolidated entities on the same basis as we calculate ourFFO, as defined by Prologis.
We believe investors are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in planning and executing our business strategy.
Core FFO
In addition toFFO, as defined by Prologis, we also useCore FFO.To arrive atCore FFO, we adjustFFO, as defined by Prologis,, to exclude the following recurring and non-recurring items that we recognized directly or our share of these items recognized by our unconsolidated entities to the extent they are included inFFO, as defined by Prologis:
(i) | gains or losses from |
(ii) | income tax expense related to the sale of investments in real estate and third-party acquisition costs related to the acquisition of real estate; |
(iii) | impairment charges recognized related to our investments in real estate |
(iv) |
gains or losses from the early extinguishment of |
merger, acquisition and other integration expenses; and |
expenses related to natural disasters. |
We believe it is appropriate to further adjust ourFFO, as defined by Prologis for certain recurring items as they were driven by transactional activity and factors relating to the financial and real estate markets, rather than factors specific to the on-going operating performance of our properties or investments. The impairment charges we have recognized were primarily based on valuations of real estate, which had declined due to market conditions, that we no longer expected to hold for long-term investment. We currently have and have had overOver the past severallast few years, we made it a stated priority to strengthen our financial position. We expect to accomplish thisposition by reducing our debt, our investment in certain low yielding assets such as land that we decide not to develop and our exposure to foreign currency exchange fluctuations. As a result, we have soldchanged our intent to third partiessell or contributed to unconsolidated entitiescontribute certain of our real estate properties that, depending on market conditions, might result in a gain or loss. Theand recorded impairment charges relatedwhen we did not expect to goodwill and other assets thatrecover the costs of our investment. Also, we have recognized were similarly caused by the decline in the real estate markets. Also in connection with our stated priority to reduce debt and extend debt maturities, we have purchased portions of our debt securities.securities when we believed it was advantageous to do so, which was based on market conditions, and in an effort to lower our borrowing costs and extend our debt maturities. As a result, we have recognized net gains or losses on the early extinguishment of certain debt due to the financial market conditions at that time.
We have also adjusted for some non-recurring items. The merger, acquisition and other integration expenses includeincluded costs we incurred in 2011 and 2012 associated with the Merger between AMB and PEPR AcquisitionProLogis, the acquisition of ProLogis European Properties and the integration of our systems and processes. We have not adjusted for the
acquisition costs thatIn addition, we have incurred as a resultand our co-investment ventures make acquisitions of routine acquisitions but onlyreal estate and we believe the costs associated with significant business combinations that we would expect to be infrequent in nature. Similarly, the expenses related to the natural disaster in Japan that we recognized in 2011these transactions are a rare occurrence but we may incur similar expenses again in the future.transaction based and not part of our core operations.
We analyze our operating performance primarily by the rental income of our real estate and the revenue driven by our privatestrategic capital business, net of operating, administrative and financing expenses. This income stream is not directly impacted by fluctuations in the market value of our investments in real estate or debt securities. As a result, althoughAlthough these items discussed above have had a material impact on our operations and are reflected in our financial statements, the removal of the effects of these items allows us to better understand the core operating performance of our properties over the long-term.long term.
We useCore FFO, including by segment and region, to: (i) evaluate our performance and the performance of our properties in comparison to expected results and results of previous periods, relative to resource allocation decisions; (ii) evaluate the performance of our management; (iii) budget and forecast future results to assist in the allocation of resources; (iv) provide guidance to the financial markets to understand our
expected operating performance; (v) assess our operating performance as compared to similar real estate companies and the industry in general; and (vi) evaluate how a specific potential investment will impact our future results. Because we make decisions with regard to our performance with a long-term outlook, we believe it is appropriate to remove the effects of items that we do not expect to affect the underlying long-term performance of the properties we own. As noted above, we believe the long-term performance of our properties is principally driven by rental income. We believe investors are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in planning and executing our business strategy.
Limitations on Use of our FFO Measures
While we believe our defined FFO measures are important supplemental measures, neither NAREIT’s nor our measures of FFO should be used alone because they exclude significant economic components of net earnings computed under GAAP and are, therefore, limited as an analytical tool. Accordingly, theythese are twoonly a few of the many measures we use when analyzing our business. Some of these limitations are:
The current income tax expenses that are excluded from our defined FFO measures represent the taxes that are payable.
(i) | The current income tax expenses and acquisition costs that are excluded from our defined FFO measures represent the taxes and transaction costs that are payable. |
Depreciation and amortization of real estate assets are economic costs that are excluded from FFO. FFO is limited, as it does not reflect the cash requirements that may be necessary for future replacements of the real estate assets. Further, the amortization of capital expenditures and leasing costs necessary to maintain the operating performance of industrial properties are not reflected in FFO.
(ii) | Depreciation and amortization of real estate assets are economic costs that are excluded from FFO. FFO is limited, as it does not reflect the cash requirements that may be necessary for future replacements of the real estate assets. Further, the amortization of capital expenditures and leasing costs necessary to maintain the operating performance of industrial properties are not reflected in FFO. |
Gains or losses from property acquisitions and dispositions or impairment charges related to expected dispositions represent changes in the value of the properties. By excluding these gains and losses, FFO does not capture realized changes in the value of acquired or disposed properties arising from changes in market conditions.
(iii) | Gains or losses from property acquisitions and dispositions or impairment charges related to expected dispositions represent changes in value of the properties. By excluding these gains and losses, FFO does not capture realized changes in the value of acquired or disposed properties arising from changes in market conditions. |
The deferred income tax benefits and expenses that are excluded from our defined FFO measures result from the creation of a deferred income tax asset or liability that may have to be settled at some future point. Our defined FFO measures do not currently reflect any income or expense that may result from such settlement.
(iv) | The deferred income tax benefits and expenses that are excluded from our defined FFO measures result from the creation of a deferred income tax asset or liability that may have to be settled at some future point. Our defined FFO measures do not currently reflect any income or expense that may result from such settlement. |
The foreign currency exchange gains and losses that are excluded from our defined FFO measures are generally recognized based on movements in foreign currency exchange rates through a specific point in time. The ultimate settlement of our foreign currency-denominated net assets is indefinite as to timing and amount. Our FFO measures are limited in that they do not reflect the current period changes in these net assets that result from periodic foreign currency exchange rate movements.
(v) | The foreign currency exchange gains and losses that are excluded from our defined FFO measures are generally recognized based on movements in foreign currency exchange rates through a specific point in time. The ultimate settlement of our foreign currency-denominated net assets is indefinite as to timing and amount. Our FFO measures are limited in that they do not reflect the current period changes in these net assets that result from periodic foreign currency exchange rate movements. |
The impairment charges of goodwill and other assets that we exclude from Core FFO, have been or may be realized as a loss in the future upon the ultimate disposition of the related investments or other assets through the form of lower cash proceeds.
(vi) | The gains and losses on extinguishment of debt that we exclude from ourCore FFO, may provide a benefit or cost to us as we may be settling our debt at less or more than our future obligation. |
The gains and losses on extinguishment of debt that we exclude from our Core FFO, may provide a benefit or cost to us as we may be settling our debt at less or more than our future obligation.
The Merger, acquisition and other integration expenses and the natural disaster expenses that we exclude from Core FFO are costs that we have incurred.
(vii) | The merger, acquisition and other integration expenses and the natural disaster expenses that we exclude fromCore FFO are costs that we have incurred. |
We compensate for these limitations by using our FFO measures only in conjunction with net earnings computed under GAAP when making our decisions. This information should be read with our complete consolidated financial statements prepared under GAAP. To assist investors in compensating for these limitations, we reconcile our defined FFO measures to our net earnings computed under GAAP for the years ended December 31 as follows (in thousands).
2012 | 2011 | 2010 | ||||||||||
FFO: | ||||||||||||
Reconciliation of net loss to FFO measures: | ||||||||||||
Net loss attributable to common stockholders | $ | (80,946) | $ | (188,110) | $ | (1,295,920) | ||||||
Add (deduct) NAREIT defined adjustments: | ||||||||||||
Real estate related depreciation and amortization | 721,436 | 533,854 | 278,781 | |||||||||
Impairment charges on certain real estate properties | 34,801 | 5,300 | 126,987 | |||||||||
Net gain on non-FFO dispositions and acquisitions | (222,752) | (7,338) | (179,679) | |||||||||
Reconciling items related to noncontrolling interests | (27,680) | (19,889) | - | |||||||||
Our share of reconciling items included in earnings from unconsolidated entities | 127,323 | 147,608 | 141,721 | |||||||||
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Subtotal-NAREIT defined FFO | 552,182 | 471,425 | (928,110) | |||||||||
Add (deduct) our defined adjustments: | ||||||||||||
Unrealized foreign currency and derivative losses (gains), net | 14,892 | (39,034) | 11,487 | |||||||||
Deferred income tax benefit | (8,804) | (19,803) | (52,223) | |||||||||
Our share of reconciling items included in earnings from unconsolidated entities | (5,835) | (900) | (5,351) | |||||||||
|
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|
|
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| |||||||
FFO, as defined by Prologis | 552,435 | 411,688 | (974,197) | |||||||||
Impairment charges | 264,844 | 145,028 | 1,110,072 | |||||||||
Natural disaster expenses | - | 5,210 | - | |||||||||
Merger, acquisition and other integration expenses | 80,676 | 140,495 | - | |||||||||
Gains on acquisitions and dispositions of investments in real estate, net | (121,303) | (117,800) | (110,786) | |||||||||
Loss (gain) on early extinguishment of debt | 14,114 | (258) | 201,486 | |||||||||
Income tax expense on dispositions | - | 7,331 | 10,783 | |||||||||
Our share of reconciling items included in earnings from unconsolidated entities | 23,097 | 2,223 | - | |||||||||
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Core FFO | $ | 813,863 | $ | 593,917 | $ | 237,358 |
2014 | 2013 | 2012 | ||||||||||
FFO | ||||||||||||
Reconciliation of net earnings (loss) to FFO measures: | ||||||||||||
Net earnings (loss) attributable to common stockholders | $ | 622,235 | $ | 315,422 | $ | (80,946) | ||||||
Add (deduct) NAREIT–defined adjustments: | ||||||||||||
Real estate related depreciation and amortization | 617,814 | 624,573 | 705,717 | |||||||||
Impairment charges on certain real estate properties | - | - | 34,801 | |||||||||
Gains on dispositions of non-development properties and revaluation of equity investments upon acquisition of a controlling interest, net | (553,298) | (271,315) | (207,033) | |||||||||
Reconciling items related to noncontrolling interests | 47,939 | (8,993) | (27,680) | |||||||||
Our share of reconciling items included in earnings from unconsolidated entities | 186,540 | 159,792 | 127,323 | |||||||||
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| |||||||
Subtotal–NAREIT–defined FFO | 921,230 | 819,479 | 552,182 | |||||||||
Add (deduct) our defined adjustments: | ||||||||||||
Unrealized foreign currency and derivative losses (gains) and related amortization, net | 18,984 | 32,870 | 14,892 | |||||||||
Deferred income tax expense (benefit) | (56,720) | 656 | (8,804) | |||||||||
Our share of reconciling items included in earnings from unconsolidated entities | 4,015 | 2,168 | (5,835) | |||||||||
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| |||||||
FFO, as defined by Prologis | 887,509 | 855,173 | 552,435 | |||||||||
Adjustments to arrive at Core FFO: | ||||||||||||
Net gains on dispositions of development properties and land, net | (152,798) | (336,815) | (121,303) | |||||||||
Losses on early extinguishment of debt and redemption / repurchase of preferred stock, net | 171,817 | 286,122 | 14,114 | |||||||||
Our share of reconciling items included in earnings from unconsolidated entities less third-party share of consolidated entities | 46,619 | 8,744 | 23,097 | |||||||||
Impairment charges | - | - | 264,844 | |||||||||
Merger, acquisition and other integration expenses | - | - | 80,676 | |||||||||
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Core FFO | $ | 953,147 | $ | 813,224 | $ | 813,863 |
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to the impact of interest rate changes and foreign-exchange related variability and earnings volatility on our foreign investments. See our risk factors in Item 1A. Risk Factors, specifically:The depreciation in the value of the foreign currency in countries where we have a significant investment may adversely affect our results of operations and financial position andWe have used certainface risks associated with the use of debt to fund our business activities, including refinancing and interest rate risks, which may adversely affect our operating results and financial condition if we are unable to make required payments on our debt or are unable to refinance our debt. See also Notes 2 and 18 in the Consolidated Financial Statements in Item 8 for more information about our foreign operations and derivative financial instruments, primarily foreign currency put option and forward contracts, to reduce our foreign currency market risk, as we deem appropriate. We have also used interest rate swap agreements to reduce our interest rate market risk. We do not use financial instruments for trading or speculative purposes and all financial instruments are entered into in accordance with established policies and procedures.instruments.
We monitor our market risk exposures using a sensitivity analysis. Our sensitivity analysis estimates the exposure to market risk sensitive instruments assuming a hypothetical 10% adverse change in year endexchange or interest rates.rates at December 31, 2014. The results of the sensitivity analysis are summarized below. The sensitivity analysis is of limited predictive value. As a result, our ultimate realized gains or losses with respect to interest rate and foreign currency exchange rate fluctuations will depend on the exposures that arise during a future period, hedging strategies at the time and the prevailing interest and foreign currency exchange rates. The failure
Foreign Currency Risk
We are exposed to foreign exchange-related variability and earnings volatility on our foreign investments. Foreign currency market risk is the possibility that our financial results or financial position could be better or worse than planned because of changes in foreign currency exchange rates. At December 31, 2014, we had net equity of approximately $1.5 billion, or 11% of total net equity, denominated in a currency other than the U.S. dollar, after consideration of our derivative and non-derivative financial instruments. Based on our sensitivity analysis, a 10% reduction in exchange rates would cause a reduction of $150 million to our net equity.
At December 31, 2014, we had foreign currency forward contracts, which were designated and qualify as net investment hedges, with an aggregate notional amount of $1.1 billion to hedge effectivelya portion of our investments in Europe, including the United Kingdom, and Japan. Based on our sensitivity analysis, a weakening of the U.S. dollar against exchangeeach of the euro, British pound sterling and interest rate changes may materially adversely affectJapanese yen by 10% would
result in a $105 million negative change in our resultscash flows upon settlement. In addition, we also have euro option contracts, which were not designated as hedges, with an aggregate notional amount of operations and financial position.$0.4 billion to mitigate risk associated with the translation of projected net income of our subsidiaries in Europe. A weakening of the U.S. dollar against the euro by 10% would result in a $35 million negative change in our cash flows upon settlement.
Interest Rate Risk
Our interest rate risk objective isWe are exposed to limit the impact of future interest rate changes on future earnings and cash flows. To achieve this objective, we primarily borrow on a fixed rate basis for longer-term debt issuances. As ofAt December 31, 2012,2014, we had a total of $3.3 billion$572.7 million of variable rate debt outstanding, all of which $0.9 billion was outstanding on our credit facilities, $0.6 billion was outstanding under a multi-currency senior term loan and $1.8 billion was outstanding secured mortgage debt. As ofloans. At December 31, 2012,2014, we havehad entered into interest rate swap agreements to fix $1.3 billion$342.1 million of our variable rate secured mortgage debt.
Our primary interest rate risk not subject to interest rate swap agreements is created by the variable rate credit facilities, seniorJapanese yen term loan and selected secured mortgage debt.loan. During the year ended December 31, 2012,2014, we had weighted average daily outstanding borrowings of $1.2 billion$181.6 million on our variable rate debtcredit facilities not subject to interest rate swap agreements. Based on the results of a sensitivity analysis assuming a 10% adverse change in interest rates based on our average outstanding balances during the period, the impact was $2.0$0.5 million, which equates to a change in interest rates of 1713 basis points.
Foreign Currency Risk
Foreign currency risk is the possibility that our financial results could be better or worse than planned because of changes in foreign currency exchange rates.
Our primary exposure to foreign currency exchange rates relates to the translation of the net income and net investment of our foreign subsidiaries into U.S. dollar, principally euro, British pound sterling and Japanese yen, especially to the extent we wish to repatriate funds to the United States. To mitigate our foreign currency exchange exposure, we borrow in the functional currency of the borrowing entity, when appropriate. We also may use foreign currency put option contracts or other forms of hedging instruments to manage foreign currency exchange rate risk associated with the projected net operating income or net equity of our foreign consolidated subsidiaries and unconsolidated entities. Hedging arrangements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements and the risk of fluctuation in the relative value of the foreign currency. The funds required to settle such arrangements could be significant depending on the stability and movement of foreign currency. The failure to hedge effectively against exchange and interest rate changes may materially adversely affect our results of operations and financial position. We may experience fluctuations in our earnings as a result of changes in foreign currency exchange rates. In fourth quarter 2012, we entered into foreign currency forward contracts that expire in April 2013 with an aggregate notional amount of €1.0 billion ($1.3 billion using the forward rate of 1.30) to further hedge a portion of our investment in Europe at a fixed euro rate in U.S. dollars. Based on a sensitivity analysis, a strengthening or weakening of the U.S. dollar against the euro by 10% would result in a $130.0 million positive or negative change, respectively, in our cash flows upon settlement of the forward contract. These derivatives were designated and qualify as hedging instruments and therefore the changes in fair value of these derivatives will be recorded inAccumulated Other Comprehensive Loss in our Consolidated Balance Sheets. We may enter into similar agreements in the future to further hedge our investment in Europe or other jurisdictions.
We also have some exposure to movements in exchange rates related to certain intercompany loans we issue from time to time and we may use foreign currency forward contracts to manage these risks. At December 31, 2012, we had no forward contracts outstanding and, therefore, we may experience fluctuations in our earnings from the remeasurement of these intercompany loans due to changes in foreign currency exchange rates.
ITEM 8. Financial Statements and Supplementary Data
OurThe Consolidated Balance Sheets as ofat December 31, 20122014 and 2011, our2013, the Consolidated Statements of Operations, Comprehensive Income (Loss), Equity/Capital and Cash Flows for each of the years in the three-year period ended December 31, 2012,2014, Notes to Consolidated Financial Statements and Schedule III — Real Estate and Accumulated Depreciation, together with the reports of KPMG LLP, Independent Registered Public Accounting Firm,independent registered public accounting firm, are included under Item 15 of this report and are incorporated herein by reference. Selected unaudited quarterly financial data is presented in Note 2422 of ourthe Consolidated Financial Statements.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
ITEM 9A. Controls and Procedures
Controls and Procedures (Prologis, Inc.)
Prologis, Inc. carried out an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as ofat December 31, 2012.2014. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Subsequent to December 31, 2012,2014, there were no significant changes in the internal controls or in other factors that could significantly affect these controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2012,2014, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting
We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the internal control over financial reporting was conducted as ofat December 31, 20122014, based on the criteria described in “Internal Control — Integrated Framework” (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that, as ofat December 31, 2012,2014, the internal control over financial reporting was effective.
Our internal control over financial reporting as ofat December 31, 20122014, has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their attestation report which is included herein.
Limitations of the Effectiveness of Controls
Management’s assessment included an evaluation of the design of the internal control over financial reporting and testing of the operational effectiveness of the internal control over financial reporting. The internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Controls and Procedures (Prologis, L.P.)
Prologis, L.P. carried out an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act as ofAct) at December 31, 2012.2014. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Subsequent to December 31, 2012,2014, there were no significant changes in the internal controls or in other factors that could significantly affect these controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2012,2014, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting
We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the internal control over financial reporting was conducted as ofat December 31, 20122014, based on the criteria described in “Internal Control — Integrated Framework” (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that, as ofat December 31, 2012,2014, the internal control over financial reporting was effective.
Our internal control over financial reporting as of December 31, 2012 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their attestation report which is included herein.
Limitations of the Effectiveness of Controls
Management’s assessment included an evaluation of the design of the internal control over financial reporting and testing of the operational effectiveness of the internal control over financial reporting. The internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
None.
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance
Directors and Officers
The information required by this item is incorporated herein by reference to the descriptions under the captions “Election of Directors — Nominees,” Information Relating to Stockholders, Directors, Nominees and Executive Officers — Certain Information with Respect to Executive Officers, “Additional Information — Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Governance — Code of Ethics and Business Conduct,”Governance” and “Board of Directors and Committees — Audit Committee”Directors” in our 20132015 Proxy Statement or will be provided in an amendment filed on Form 10-K/A.
ITEM 11. Executive Compensation
The information required by this item is incorporated herein by reference to the descriptions under the captions “Compensation“Executive Compensation Matters” and “Board of Directors and Committees — Compensation Committee — Compensation Committee Interlocks and Insider Participation”Committees” in our 20132015 Proxy Statement or will be provided in an amendment filed on Form 10-K/A.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated herein by reference to the descriptions under the captions “Information Relating to Stockholders, Directors, Nominees, and Executive Officers — Security Ownership” and “Equity Compensation Plans” in our 20132015 Proxy Statement or will be provided in an amendment filed on Form 10-K/A.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated herein by reference to the descriptions under the captions “Information Relating to Stockholders, Directors, Nominees, and Executive Officers — Certain Relationships and Related Transactions” and “Corporate Governance — Director Independence”Governance” in our 20132015 Proxy Statement or will be provided in an amendment filed on Form 10-K/A.
ITEM 14. Principal Accounting Fees and Services
The information required by this item is incorporated herein by reference to the description under the caption “Independent Registered Public Accounting Firm” in our 20132015 Proxy Statement or will be provided in an amendment filed on Form 10-K/A.
PART IV
ITEM 15. Exhibits, Financial Statement Schedules
The following documents are filed as a part of this report:
(a) Financial Statements and Schedules:
1. Financial Statements:
See Index to Consolidated Financial Statements and Schedule III on page 4944 of this report, which is incorporated herein by reference.
2. Financial Statement Schedules:
Schedule III — Real Estate and Accumulated Depreciation
All other schedules have been omitted since the required information is presented in the Consolidated Financial Statements and the related Notes or is not applicable.
(b) Exhibits: The Exhibits required by Item 601 of Regulation S-K are listed in the Index to Exhibits on pages 128115 to 134120 of this report, which is incorporated herein by reference.
(c) Financial Statements: See Index to Consolidated Financial Statements and Schedule III on page 4944 of this report, which is incorporated by reference.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE III
Page | ||||
Prologis, Inc. and Prologis L.P.: | ||||
Prologis, Inc.: | ||||
Prologis, L.P.: | ||||
Prologis, Inc. and Prologis L.P.: | ||||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
Prologis, Inc.:
We have audited the accompanying consolidated balance sheets of Prologis, Inc. and subsidiaries (the “Company”) as of December 31, 20122014 and 2011,2013, and the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2012.2014. These consolidated financial statements are the responsibility of Prologis, Inc.’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Prologis, Inc. and subsidiaries as of December 31, 20122014 and 2011,2013, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012,2014, in conformity with U.S. generally accepted accounting principles.
As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for discontinued operations as of January 1, 2014, on a prospective basis, due to the adoption of Accounting Standards Update 2014-08.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Prologis, Inc.’s internal control over financial reporting as of December 31, 2012,2014, based on criteria established inInternal Control — Integrated Framework(1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 27, 201325, 2015 expressed an unqualified opinion on the effectiveness of Prologis, Inc.’s internal control over financial reporting.
KPMG LLP
Denver, Colorado
February 27, 201325, 2015
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Partners
Prologis, L.P.:
We have audited the accompanying consolidated balance sheets of Prologis, L.P. and subsidiaries (the “Company”) as of December 31, 20122014 and 2011,2013, and the related consolidated statements of operations, comprehensive income (loss), capital, and cash flows for each of the years in the three-year period ended December 31, 2012.2014. These consolidated financial statements are the responsibility of Prologis, L.P.’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for discontinued operations as of January 1, 2014, on a prospective basis, due to the adoption of Accounting Standards Update 2014-08.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Prologis, L.P. and subsidiaries as of December 31, 20122014 and 2011,2013, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012,2014, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Prologis, L.P.’s internal control over financial reporting as of December 31, 2012, based on criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 27, 2013 expressed an unqualified opinion on the effectiveness of Prologis, L.P.’s internal control over financial reporting.
KPMG LLP
Denver, Colorado
February 27, 201325, 2015
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
Prologis, Inc.:
We have audited Prologis, Inc.’s internal control over financial reporting as of December 31, 2012,2014, based on criteria established inInternal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Prologis, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on Prologis, Inc.’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Prologis, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012,2014, based on criteria established inInternal Control — Integrated Framework(1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Prologis, Inc. and subsidiaries as of December 31, 20122014 and 2011,2013, and the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2012,2014, and our report dated February 27, 201325, 2015 expressed an unqualified opinion on those consolidated financial statements.
KPMG LLP
Denver, Colorado
February 27, 201325, 2015
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Partners
Prologis, L.P.:
We have audited Prologis, L.P.’s internal control over financial reporting as of December 31, 2012, based on criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Prologis, L.P.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on Prologis, L.P.’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Prologis, L.P. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Prologis, L.P. and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income (loss), capital, and cash flows for each of the years in the three-year period ended December 31, 2012, and our report dated February 27, 2013 expressed an unqualified opinion on those consolidated financial statements.
KPMG LLP
Denver, Colorado
February 27, 2013
(In thousands, except per share data)
December 31, | December 31, | |||||||||||||||
2012 | 2011 | 2014 | 2013 | |||||||||||||
ASSETS | ASSETS |
| ||||||||||||||
Investments in real estate properties | $ | 25,809,123 | $ | 24,787,537 | $ | 22,190,145 | $ | 20,824,477 | ||||||||
Less accumulated depreciation | 2,480,660 | 2,157,907 | 2,790,781 | 2,568,998 | ||||||||||||
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|
|
| |||||||||||||
Net investments in real estate properties | 23,328,463 | 22,629,630 | 19,399,364 | 18,255,479 | ||||||||||||
Investments in and advances to unconsolidated entities | 2,195,782 | 2,857,755 | 4,824,724 | 4,430,239 | ||||||||||||
Assets held for sale | 43,934 | 4,042 | ||||||||||||||
Notes receivable backed by real estate | 188,000 | 322,834 | - | 188,000 | ||||||||||||
Assets held for sale | 26,027 | 444,850 | ||||||||||||||
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|
|
| |||||||||||||
Net investments in real estate | 25,738,272 | 26,255,069 | 24,268,022 | 22,877,760 | ||||||||||||
Cash and cash equivalents | 100,810 | 176,072 | 350,692 | 491,129 | ||||||||||||
Restricted cash | 176,926 | 71,992 | ||||||||||||||
Accounts receivable | 171,084 | 147,999 | 103,445 | 107,955 | ||||||||||||
Other assets | 1,123,053 | 1,072,780 | 1,096,064 | 1,095,463 | ||||||||||||
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|
|
| |||||||||||||
Total assets | $ | 27,310,145 | $ | 27,723,912 | $ | 25,818,223 | $ | 24,572,307 | ||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
Liabilities: | ||||||||||||||||
Debt | $ | 11,790,794 | $ | 11,382,408 | $ | 9,380,199 | $ | 9,011,216 | ||||||||
Accounts payable and accrued expenses | 611,770 | 639,490 | 627,999 | 563,993 | ||||||||||||
Other liabilities | 1,115,911 | 1,225,548 | 626,426 | 820,645 | ||||||||||||
Liabilities related to assets held for sale | 18,334 | 20,992 | ||||||||||||||
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|
|
| |||||||||||||
Total liabilities | 13,536,809 | 13,268,438 | 10,634,624 | 10,395,854 | ||||||||||||
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| |||||||||||||
Equity: | ||||||||||||||||
Prologis, Inc. stockholders’ equity: | ||||||||||||||||
Preferred stock | 582,200 | 582,200 | ||||||||||||||
Common stock; $0.01 par value; 461,770 shares and 459,401 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively | 4,618 | 4,594 | ||||||||||||||
Series Q preferred stock at stated liquidation preference of $50 per share; $0.01 par value; 100,000 shares authorized; 1,565 shares and 2,000 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively | 78,235 | 100,000 | ||||||||||||||
Common stock; $0.01 par value; 509,498 shares and 498,799 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively | 5,095 | 4,988 | ||||||||||||||
Additional paid-in capital | 16,411,855 | 16,349,328 | 18,467,009 | 17,974,509 | ||||||||||||
Accumulated other comprehensive loss | (233,563) | (182,321) | (600,337) | (435,675) | ||||||||||||
Distributions in excess of net earnings | (3,696,093) | (3,092,162) | (3,974,493) | (3,932,664) | ||||||||||||
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|
| |||||||||||||
Total Prologis, Inc. stockholders’ equity | 13,069,017 | 13,661,639 | 13,975,509 | 13,711,158 | ||||||||||||
Noncontrolling interests | 704,319 | 793,835 | 1,208,090 | 465,295 | ||||||||||||
|
|
|
| |||||||||||||
Total equity | 13,773,336 | 14,455,474 | 15,183,599 | 14,176,453 | ||||||||||||
|
|
|
| |||||||||||||
Total liabilities and equity | $ | 27,310,145 | $ | 27,723,912 | $ | 25,818,223 | $ | 24,572,307 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2014, 2013, 2012 2011, 2010
(In thousands, except per share amounts)
2012 | 2011 | 2010 | 2014 | 2013 | 2012 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Rental income | $ | 1,495,202 | $ | 1,030,670 | $ | 549,605 | $ | 1,178,609 | $ | 1,227,975 | $ | 1,459,461 | ||||||||||||
Rental recoveries | 374,022 | 264,202 | 150,500 | 348,740 | 331,518 | 364,320 | ||||||||||||||||||
Private capital revenue | 126,779 | 137,619 | 122,526 | |||||||||||||||||||||
Strategic capital income | 219,871 | 179,472 | 126,779 | |||||||||||||||||||||
Development management and other income | 9,958 | 18,836 | 17,521 | 13,567 | 11,521 | 9,958 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total revenues | 2,005,961 | 1,451,327 | 840,152 | 1,760,787 | 1,750,486 | 1,960,518 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Rental expenses | 505,499 | 358,559 | 199,199 | 430,787 | 451,938 | 491,239 | ||||||||||||||||||
Private capital expenses | 63,820 | 54,962 | 40,659 | |||||||||||||||||||||
Strategic capital expenses | 96,496 | 89,279 | 63,820 | |||||||||||||||||||||
General and administrative expenses | 228,068 | 195,161 | 165,981 | 247,768 | 229,207 | 228,068 | ||||||||||||||||||
Depreciation and amortization | 642,461 | 648,668 | 724,262 | |||||||||||||||||||||
Other expenses | 23,467 | 26,982 | 26,556 | |||||||||||||||||||||
Merger, acquisition and other integration expenses | 80,676 | 140,495 | - | - | - | 80,676 | ||||||||||||||||||
Impairment of real estate properties | 252,914 | 21,237 | 736,612 | - | - | 252,914 | ||||||||||||||||||
Depreciation and amortization | 739,981 | 552,849 | 294,867 | |||||||||||||||||||||
Other expenses | 26,556 | 24,031 | 16,355 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total expenses | 1,897,514 | 1,347,294 | 1,453,673 | 1,440,979 | 1,446,074 | 1,867,535 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Operating income (loss) | 108,447 | 104,033 | (613,521) | |||||||||||||||||||||
Operating income | 319,808 | 304,412 | 92,983 | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Earnings from unconsolidated entities, net | 31,676 | 59,935 | 23,678 | 134,288 | 97,220 | 31,676 | ||||||||||||||||||
Interest expense | (507,484) | (468,072) | (461,166) | (308,885) | (379,327) | (505,215) | ||||||||||||||||||
Impairment of goodwill and other assets | (16,135) | (126,432) | (412,745) | |||||||||||||||||||||
Interest and other income, net | 22,878 | 12,008 | 15,847 | 25,768 | 26,948 | 22,878 | ||||||||||||||||||
Gains on acquisitions and dispositions of investments in real estate, net | 305,607 | 111,684 | 28,488 | |||||||||||||||||||||
Foreign currency and derivative gains (losses), net | (20,497) | 41,172 | (11,081) | |||||||||||||||||||||
Gain (loss) on early extinguishment of debt, net | (14,114) | 258 | (201,486) | |||||||||||||||||||||
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net | 725,790 | 597,656 | 305,607 | |||||||||||||||||||||
Foreign currency and derivative losses and related amortization, net | (17,841) | (33,633) | (20,497) | |||||||||||||||||||||
Losses on early extinguishment of debt, net | (165,300) | (277,014) | (14,114) | |||||||||||||||||||||
Impairment of other assets | - | - | (16,135) | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total other income (expense) | (198,069) | (369,447) | (1,018,465) | 393,820 | 31,850 | (195,800) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Loss before income taxes | (89,622) | (265,414) | (1,631,986) | |||||||||||||||||||||
Earnings (loss) before income taxes | 713,628 | 336,262 | (102,817) | |||||||||||||||||||||
Current income tax expense | 17,870 | 21,579 | 21,724 | (61,584) | (126,180) | (17,870) | ||||||||||||||||||
Deferred income tax benefit | (14,290) | (19,803) | (52,223) | 87,240 | 19,447 | 14,290 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total income tax expense (benefit) | 3,580 | 1,776 | (30,499) | |||||||||||||||||||||
Total income tax benefit (expense) | 25,656 | (106,733) | (3,580) | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Loss from continuing operations | (93,202) | (267,190) | (1,601,487) | |||||||||||||||||||||
Earnings (loss) from continuing operations | 739,284 | 229,529 | (106,397) | |||||||||||||||||||||
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|
| �� |
|
|
| ||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||
Income attributable to disposed properties and assets held for sale | 27,632 | 50,638 | 96,460 | - | 6,970 | 40,827 | ||||||||||||||||||
Net gains on dispositions, including related impairment charges and taxes | 35,098 | 58,614 | 234,574 | - | 116,550 | 35,098 | ||||||||||||||||||
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|
|
|
|
| |||||||||||||||||||
Total discontinued operations | 62,730 | 109,252 | 331,034 | - | 123,520 | 75,925 | ||||||||||||||||||
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|
|
|
|
| |||||||||||||||||||
Consolidated net loss | (30,472) | (157,938) | (1,270,453) | |||||||||||||||||||||
Net loss (earnings) attributable to noncontrolling interests | (9,248) | 4,524 | (43) | |||||||||||||||||||||
Consolidated net earnings (loss) | 739,284 | 353,049 | (30,472) | |||||||||||||||||||||
Net earnings attributable to noncontrolling interests | (103,101) | (10,128) | (9,248) | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net loss attributable to controlling interests | (39,720) | (153,414) | (1,270,496) | |||||||||||||||||||||
Less preferred stock dividend | 41,226 | 34,696 | 25,424 | |||||||||||||||||||||
Net earnings (loss) attributable to controlling interests | 636,183 | 342,921 | (39,720) | |||||||||||||||||||||
Less preferred stock dividends | 7,431 | 18,391 | 41,226 | |||||||||||||||||||||
Loss on preferred stock redemption / repurchase | 6,517 | 9,108 | - | |||||||||||||||||||||
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|
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|
|
| |||||||||||||||||||
Net loss attributable to common stockholders | $ | (80,946) | $ | (188,110) | $ | (1,295,920) | ||||||||||||||||||
Net earnings (loss) attributable to common stockholders | $ | 622,235 | $ | 315,422 | $ | (80,946) | ||||||||||||||||||
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|
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|
|
| |||||||||||||||||||
Weighted average common shares outstanding - Basic | 459,895 | 370,534 | 219,515 | 499,583 | 486,076 | 459,895 | ||||||||||||||||||
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|
| ||||||||||||||||||||||
Weighted average common shares outstanding - Diluted | 459,895 | 370,534 | 219,515 | 506,391 | 491,546 | 461,848 | ||||||||||||||||||
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|
| ||||||||||||||||||||||
Net earnings (loss) per share attributable to common stockholders - Basic: | ||||||||||||||||||||||||
Continuing operations | $ | (0.32) | $ | (0.80) | $ | (7.41) | $ | 1.25 | $ | 0.40 | $ | (0.35) | ||||||||||||
Discontinued operations | 0.14 | 0.29 | 1.51 | - | 0.25 | 0.17 | ||||||||||||||||||
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|
|
| |||||||||||||||||||
Net loss per share attributable to common stockholders - Basic | $ | (0.18) | $ | (0.51) | $ | (5.90) | ||||||||||||||||||
Net earnings (loss) per share attributable to common stockholders - Basic | $ | 1.25 | $ | 0.65 | $ | (0.18) | ||||||||||||||||||
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| |||||||||||||||||||
Net earnings (loss) per share attributable to common stockholders - Diluted: | ||||||||||||||||||||||||
Continuing operations | $ | (0.32) | $ | (0.80) | $ | (7.41) | $ | 1.24 | $ | 0.39 | $ | (0.34) | ||||||||||||
Discontinued operations | 0.14 | 0.29 | 1.51 | - | 0.25 | 0.16 | ||||||||||||||||||
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|
|
| |||||||||||||||||||
Net loss per share attributable to common stockholders - Diluted | $ | (0.18) | $ | (0.51) | $ | (5.90) | ||||||||||||||||||
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|
| ||||||||||||||||||||||
Net earnings (loss) per share attributable to common stockholders - Diluted | $ | 1.24 | $ | 0.64 | $ | (0.18) | ||||||||||||||||||
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|
| ||||||||||||||||||||||
Dividends per common share | $ | 1.12 | $ | 1.06 | $ | 1.25 | $ | 1.32 | $ | 1.12 | $ | 1.12 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Years Ended December 31, 2012, 20112014, 2013 and 20102012
(In thousands)
2012 | 2011 | 2010 | ||||||||||
Consolidated net loss | $ | (30,472) | $ | (157,938) | $ | (1,270,453) | ||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation losses, net | (79,014) | (192,591) | (45,248) | |||||||||
Unrealized gain (loss) and amortization on derivative contracts, net | 17,986 | (8,166) | (3,143) | |||||||||
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|
|
|
|
| |||||||
Comprehensive loss | (91,500) | (358,695) | (1,318,844) | |||||||||
Net loss (earnings) attributable to noncontrolling interests | (9,248) | 4,524 | (43) | |||||||||
Other comprehensive loss attributable to noncontrolling interest | 9,786 | 21,596 | 2,933 | |||||||||
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|
|
|
|
| |||||||
Comprehensive loss attributable to common stockholders | $ | (90,962) | $ | (332,575) | $ | (1,315,954) |
2014 | 2013 | 2012 | ||||||||||
Consolidated net earnings (loss) | $ | 739,284 | $ | 353,049 | $ | (30,472) | ||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation losses, net | (171,401) | (234,680) | (79,014) | |||||||||
Unrealized gains (losses) and amortization on derivative contracts, net | (6,498) | 19,590 | 17,986 | |||||||||
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|
|
|
|
| |||||||
Comprehensive income (loss) | 561,385 | 137,959 | (91,500) | |||||||||
Net earnings attributable to noncontrolling interests | (103,101) | (10,128) | (9,248) | |||||||||
Other comprehensive loss attributable to noncontrolling interest | 13,237 | 12,978 | 9,786 | |||||||||
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|
|
|
|
| |||||||
Comprehensive income (loss) attributable to common stockholders | $ | 471,521 | $ | 140,809 | $ | (90,962) |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF EQUITY
Years Ended December 31, 2012, 20112014, 2013 and 20102012
(In thousands)
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Distributions in Excess of Net Earnings | Non- controlling Interests | Total Equity | ||||||||||||||||||||||||||
Number of Shares | Par Value | |||||||||||||||||||||||||||||||
Balance as of January 1, 2010 | $ | 350,000 | 211,666 | $ | 2,117 | $ | 8,527,492 | $ | 42,298 | $ | (934,583) | $ | 19,962 | $ | 8,007,286 | |||||||||||||||||
Consolidated net earnings (loss) | - | - | - | - | - | (1,270,496) | 43 | (1,270,453) | ||||||||||||||||||||||||
Issuances of stock in equity offering, net of issuance costs | - | 41,069 | 411 | 1,086,873 | - | - | - | 1,087,284 | ||||||||||||||||||||||||
Effect of common stock plans | - | 1,725 | 17 | 56,595 | - | - | - | 56,612 | ||||||||||||||||||||||||
Noncontrolling interests, issuances (conversions), net | - | 22 | - | 600 | - | - | (600) | - | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | - | (42,315) | - | (2,933) | (45,248) | ||||||||||||||||||||||||
Unrealized loss and amortization on derivative contracts, net | - | - | - | - | (3,143) | - | - | (3,143) | ||||||||||||||||||||||||
Distributions | - | - | - | - | - | (310,643) | (1,340) | (311,983) | ||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2010 | $ | 350,000 | 254,482 | $ | 2,545 | $ | 9,671,560 | $ | (3,160) | $ | (2,515,722) | $ | 15,132 | $ | 7,520,355 | |||||||||||||||||
Consolidated net loss | - | - | - | - | - | (153,414) | (4,524) | (157,938) | ||||||||||||||||||||||||
Merger and PEPR Acquisition | 232,200 | 169,626 | 1,696 | 5,552,412 | - | - | 751,068 | 6,537,376 | ||||||||||||||||||||||||
Issuances of stock in equity offering, net of issuance costs | - | 34,500 | 345 | 1,111,787 | - | - | - | 1,112,132 | ||||||||||||||||||||||||
Effect of common stock plans | - | 793 | 8 | 2,390 | - | - | - | 2,398 | ||||||||||||||||||||||||
Capital contributions, net | - | - | - | - | - | - | 94,020 | 94,020 | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | - | (170,995) | - | (21,596) | (192,591) | ||||||||||||||||||||||||
Unrealized loss and amortization on derivative contracts, net | - | - | - | - | (8,166) | - | - | (8,166) | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | 11,179 | - | (423,026 | ) | (40,265 | ) | (452,112 | ) | |||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2011 | $ | 582,200 | 459,401 | $ | 4,594 | $ | 16,349,328 | $ | (182,321) | $ | (3,092,162) | $ | 793,835 | $ | 14,455,474 | |||||||||||||||||
Consolidated net earnings (loss) | - | - | - | - | - | (39,720) | 9,248 | (30,472) | ||||||||||||||||||||||||
Adjustment to the Merger purchase price allocation | - | - | - | - | - | - | 10,163 | 10,163 | ||||||||||||||||||||||||
Effect of common stock plans | - | 2,258 | 23 | 72,909 | - | - | - | 72,932 | ||||||||||||||||||||||||
Noncontrolling interests, issuances (conversions), net | - | 111 | 1 | 2,380 | - | - | (2,381) | - | ||||||||||||||||||||||||
Capital contributions, net | - | - | - | - | - | - | 74,447 | 74,447 | ||||||||||||||||||||||||
Purchase of noncontrolling interests | - | - | - | (13,998) | - | - | (128,066) | (142,064) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | - | (69,155) | - | (9,859) | (79,014) | ||||||||||||||||||||||||
Unrealized gain and amortization on derivative contracts, net | - | - | - | - | 17,913 | - | 73 | 17,986 | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | 1,236 | - | (564,211 | ) | (43,141 | ) | (606,116 | ) | |||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2012 | $ | 582,200 | 461,770 | $ | 4,618 | $ | 16,411,855 | $ | (233,563) | $ | (3,696,093) | $ | 704,319 | $ | 13,773,336 |
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Distributions in Excess of Net Earnings | Non- controlling Interests | Total Equity | ||||||||||||||||||||||||||
Number of Shares | Par Value | |||||||||||||||||||||||||||||||
Balance at January 1, 2012 | $ | 582,200 | 459,401 | $ | 4,594 | $ | 16,349,328 | $ | (182,321) | $ | (3,092,162) | $ | 793,835 | $ | 14,455,474 | |||||||||||||||||
Consolidated net earnings (loss) | - | - | - | - | - | (39,720) | 9,248 | (30,472) | ||||||||||||||||||||||||
Adjustment to the Merger purchase price allocation | - | - | - | - | - | - | 10,163 | 10,163 | ||||||||||||||||||||||||
Effect of equity compensation plans | - | 2,258 | 23 | 72,909 | - | - | - | 72,932 | ||||||||||||||||||||||||
Noncontrolling interests, issuances (conversions), net | - | 111 | 1 | 2,380 | - | - | (2,381) | - | ||||||||||||||||||||||||
Capital contributions, net | - | - | - | - | - | - | 74,447 | 74,447 | ||||||||||||||||||||||||
Purchase of noncontrolling interests | - | - | - | (13,998) | - | - | (128,066) | (142,064) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | - | (69,155) | - | (9,859) | (79,014) | ||||||||||||||||||||||||
Unrealized gains and amortization on derivative contracts, net | - | - | - | - | 17,913 | - | 73 | 17,986 | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | 1,236 | - | (564,211) | (43,141) | (606,116) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance at December 31, 2012 | $ | 582,200 | 461,770 | $ | 4,618 | $ | 16,411,855 | $ | (233,563) | $ | (3,696,093) | $ | 704,319 | $ | 13,773,336 | |||||||||||||||||
Consolidated net earnings | - | - | - | - | - | 342,921 | 10,128 | 353,049 | ||||||||||||||||||||||||
Effect of equity compensation plans | - | 1,351 | 13 | 93,692 | - | - | - | 93,705 | ||||||||||||||||||||||||
Issuance of stock in equity offering, net of issuance costs | - | 35,650 | 357 | 1,437,340 | - | - | - | 1,437,697 | ||||||||||||||||||||||||
Redemption of preferred stock | (482,200) | - | - | 8,593 | - | (9,108) | - | (482,715) | ||||||||||||||||||||||||
Issuance of warrant | - | - | - | 32,359 | - | - | - | 32,359 | ||||||||||||||||||||||||
Capital contributions | - | - | - | - | - | - | 146,130 | 146,130 | ||||||||||||||||||||||||
Settlement of noncontrolling interests | - | 28 | - | (7,868) | - | - | (247,683) | (255,551) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | - | (221,633) | - | (13,047) | (234,680) | ||||||||||||||||||||||||
Unrealized gains and amortization on derivative contracts, net | - | - | - | - | 19,521 | - | 69 | 19,590 | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | (1,462) | - | (570,384) | (134,621) | (706,467) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance at December 31, 2013 | $ | 100,000 | 498,799 | $ | 4,988 | $ | 17,974,509 | $ | (435,675) | $ | (3,932,664) | $ | 465,295 | $ | 14,176,453 | |||||||||||||||||
Consolidated net earnings | - | - | - | - | - | 636,183 | 103,101 | 739,284 | ||||||||||||||||||||||||
Effect of equity compensation plans | - | 1,383 | 14 | 88,424 | - | - | 450 | 88,888 | ||||||||||||||||||||||||
Issuance of stock in at-the-market program, net of issuance costs | - | 3,316 | 33 | 140,102 | - | - | - | 140,135 | ||||||||||||||||||||||||
Repurchase of preferred stock | (21,765) | - | - | 639 | - | (6,517) | - | (27,643) | ||||||||||||||||||||||||
Issuance of stock from exercise of warrant | - | 6,000 | 60 | 213,780 | - | - | - | 213,840 | ||||||||||||||||||||||||
Formation of Prologis U.S. Logistics Venture | - | - | - | 13,721 | - | - | 442,251 | 455,972 | ||||||||||||||||||||||||
Consolidation of Prologis North American Industrial Fund | - | - | - | - | 12,507 | - | 554,493 | 567,000 | ||||||||||||||||||||||||
Capital contributions | - | - | - | - | - | - | 14,464 | 14,464 | ||||||||||||||||||||||||
Settlement of noncontrolling interests | - | - | - | 33,803 | - | - | (36,243) | (2,440) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | - | (167,950) | - | (13,214) | (181,164) | ||||||||||||||||||||||||
Unrealized losses and amortization on derivative contracts, net | - | - | - | - | (9,219) | - | (23) | (9,242) | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | 2,031 | - | (671,495) | (322,484) | (991,948) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance at December 31, 2014 | $ | 78,235 | 509,498 | $ | 5,095 | $ | 18,467,009 | $ | (600,337) | $ | (3,974,493) | $ | 1,208,090 | $ | 15,183,599 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2012, 20112014, 2013 and 20102012
(In thousands)
2012 | 2011 | 2010 | 2014 | 2013 | 2012 | |||||||||||||||||||
Operating activities: | ||||||||||||||||||||||||
Consolidated net loss | $ | (30,472) | $ | (157,938) | $ | (1,270,453) | ||||||||||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||||||||||
Consolidated net earnings (loss) | $ | 739,284 | $ | 353,049 | $ | (30,472) | ||||||||||||||||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||
Straight-lined rents | (62,290) | (59,384) | (40,983) | (42,829) | (46,861) | (62,290) | ||||||||||||||||||
Stock-based compensation awards, net | 32,138 | 28,920 | 25,085 | |||||||||||||||||||||
Equity-based compensation awards | 57,478 | 49,239 | 32,138 | |||||||||||||||||||||
Depreciation and amortization | 767,459 | 603,884 | 356,694 | 642,461 | 664,007 | 767,459 | ||||||||||||||||||
Earnings from unconsolidated entities, net | (31,676) | (59,935) | (23,678) | (134,288) | (97,220) | (31,676) | ||||||||||||||||||
Distributions and changes in operating receivables from unconsolidated entities | 6,581 | 58,981 | 79,671 | |||||||||||||||||||||
Distributions and net changes in operating receivables from unconsolidated entities | 110,435 | 75,859 | 6,581 | |||||||||||||||||||||
Amortization of debt and lease intangibles | 21,008 | 43,556 | 79,538 | 21,113 | 10,140 | 21,008 | ||||||||||||||||||
Non-cash Merger, acquisition and other integration expenses | 17,581 | 20,290 | - | |||||||||||||||||||||
Non-cash merger, acquisition and other integration expenses | - | - | 17,581 | |||||||||||||||||||||
Impairment of real estate properties and other assets | 269,049 | 147,669 | 1,149,357 | - | - | 269,049 | ||||||||||||||||||
Net gains on dispositions, including related impairment charges, in discontinued operations | (43,008) | (61,830) | (234,574) | |||||||||||||||||||||
Gains on acquisitions and dispositions of investments in real estate, net | (305,607) | (111,684) | (28,488) | |||||||||||||||||||||
Loss (gain) on early extinguishment of debt, net | 14,114 | (258) | 201,486 | |||||||||||||||||||||
Unrealized foreign currency and derivative losses (gains), net | 14,892 | (38,398) | 11,487 | |||||||||||||||||||||
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net | (725,790) | (715,758) | (348,615) | |||||||||||||||||||||
Losses on early extinguishment of debt, net | 165,300 | 277,014 | 14,114 | |||||||||||||||||||||
Unrealized foreign currency and derivative losses and related amortization, net | 22,571 | 28,619 | 14,892 | |||||||||||||||||||||
Deferred income tax benefit | (21,967) | (19,803) | (52,223) | (87,240) | (20,067) | (21,967) | ||||||||||||||||||
Decrease (increase) in restricted cash, accounts receivable and other assets | (178,387) | (40,095) | 63,701 | |||||||||||||||||||||
Increase in accounts receivable and other assets | (93) | (12,912) | (178,387) | |||||||||||||||||||||
Decrease in accounts payable and accrued expenses and other liabilities | (5,923) | (146,911) | (75,837) | (63,871) | (80,120) | (5,923) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net cash provided by operating activities | 463,492 | 207,064 | 240,783 | 704,531 | 484,989 | 463,492 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Real estate development activity | (793,349) | (811,035) | (324,471) | (1,051,181) | (845,234) | (793,349) | ||||||||||||||||||
Real estate acquisitions | (254,414) | (214,759) | (133,654) | (612,330) | (514,611) | (254,414) | ||||||||||||||||||
Tenant improvements and lease commissions on previously leased space | (133,558) | (88,368) | (57,240) | (133,957) | (145,424) | (133,558) | ||||||||||||||||||
Non-development capital expenditures | (80,612) | (55,702) | (28,565) | (78,610) | (82,610) | (80,612) | ||||||||||||||||||
Investments in and advances to unconsolidated entities, net | (165,011) | (37,755) | (335,396) | |||||||||||||||||||||
Investments in and advances to unconsolidated entities | (739,635) | (1,221,155) | (165,011) | |||||||||||||||||||||
Return of investment from unconsolidated entities | 291,679 | 170,158 | 220,195 | 244,306 | 411,853 | 291,679 | ||||||||||||||||||
Proceeds from dispositions of real estate properties | 1,975,036 | 1,644,152 | 1,642,986 | |||||||||||||||||||||
Proceeds from repayment of notes receivable backed by real estate and other notes receivable | 55,000 | 6,450 | 18,440 | |||||||||||||||||||||
Investments in notes receivable backed by real estate and advances on other notes receivable | - | (55,000) | (269,000) | |||||||||||||||||||||
Cash acquired in connection with the Merger | - | 234,045 | - | |||||||||||||||||||||
Acquisition of PEPR, net of cash received | - | (1,025,251) | - | |||||||||||||||||||||
Acquisition of NAIF II and other unconsolidated entities, net of cash received | (365,156) | - | - | |||||||||||||||||||||
Proceeds from dispositions and contributions of real estate properties | 2,285,488 | 5,409,745 | 1,975,036 | |||||||||||||||||||||
Acquisition of a controlling interest in unconsolidated co-investment ventures, net of cash received | (590,390) | (678,642) | (365,156) | |||||||||||||||||||||
Proceeds from repayment of notes receivable backed by real estate | 188,000 | - | 55,000 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net cash provided by (used in) investing activities | 529,615 | (233,065) | 733,295 | (488,309) | 2,333,922 | 529,615 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Financing activities: | ||||||||||||||||||||||||
Proceeds from issuance of common stock, net | 30,981 | 1,156,493 | 1,162,461 | |||||||||||||||||||||
Dividends paid on common stock | (520,253) | (387,133) | (280,658) | |||||||||||||||||||||
Dividends paid on preferred stock | (47,581) | (26,965) | (25,416) | |||||||||||||||||||||
Proceeds from issuance of common stock | 378,247 | 1,505,791 | 30,981 | |||||||||||||||||||||
Dividends paid on common and preferred stock | (672,190) | (573,854) | (567,834) | |||||||||||||||||||||
Redemption of preferred stock | (27,643) | (482,500) | - | |||||||||||||||||||||
Noncontrolling interest contributions | 70,820 | 123,924 | - | 468,280 | 145,522 | 70,820 | ||||||||||||||||||
Noncontrolling interest distributions | (44,070) | (17,378) | (1,610) | (315,426) | (115,999) | (44,070) | ||||||||||||||||||
Purchase of noncontrolling interest | (142,064) | - | - | (2,440) | (250,740) | (142,064) | ||||||||||||||||||
Debt and equity issuance costs paid | (10,963) | (77,241) | (76,580) | (23,420) | (77,017) | (10,963) | ||||||||||||||||||
Net proceeds from (payments on) Credit Facilities | 9,064 | (37,558) | (246,280) | |||||||||||||||||||||
Repurchase of debt | (1,653,989) | (894,249) | (3,104,476) | |||||||||||||||||||||
Net proceeds from (payments on) credit facilities | (717,369) | (93,075) | 9,064 | |||||||||||||||||||||
Repurchase and payment of debt | (4,205,806) | (6,012,433) | (1,850,699) | |||||||||||||||||||||
Proceeds from the issuance of debt | 1,433,254 | 1,298,891 | 1,860,299 | 4,779,950 | 3,588,683 | 1,433,254 | ||||||||||||||||||
Payments on debt | (196,710) | (975,466) | (257,502) | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net cash provided by (used in) financing activities | (1,071,511) | 163,318 | (969,762) | |||||||||||||||||||||
Net cash used in financing activities | (337,817) | (2,365,622) | (1,071,511) | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Effect of foreign currency exchange rate changes on cash | 3,142 | 1,121 | (1,044) | (18,842) | (62,970) | 3,142 | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (75,262) | 138,438 | 3,272 | (140,437) | 390,319 | (75,262) | ||||||||||||||||||
Cash and cash equivalents, beginning of year | 176,072 | 37,634 | 34,362 | 491,129 | 100,810 | 176,072 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Cash and cash equivalents, end of year | $ | 100,810 | $ | 176,072 | $ | 37,634 | $ | 350,692 | $ | 491,129 | $ | 100,810 |
See Note 2321 for information on non-cash investing and financing activities and other information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
PROLOGIS, L.P.
(In thousands)
December 31, | ||||||||
2012 | 2011 | |||||||
ASSETS |
| |||||||
Investments in real estate properties | $ | 25,809,123 | $ | 24,787,537 | ||||
Less accumulated depreciation | 2,480,660 | 2,157,907 | ||||||
|
|
|
| |||||
Net investments in real estate properties | 23,328,463 | 22,629,630 | ||||||
Investments in and advances to unconsolidated entities | 2,195,782 | 2,857,755 | ||||||
Notes receivable backed by real estate | 188,000 | 322,834 | ||||||
Assets held for sale | 26,027 | 444,850 | ||||||
|
|
|
| |||||
Net investments in real estate | 25,738,272 | 26,255,069 | ||||||
Cash and cash equivalents | 100,810 | 176,072 | ||||||
Restricted cash | 176,926 | 71,992 | ||||||
Accounts receivable | 171,084 | 147,999 | ||||||
Other assets | 1,123,053 | 1,072,780 | ||||||
|
|
|
| |||||
Total assets | $ | 27,310,145 | $ | 27,723,912 | ||||
LIABILITIES AND CAPITAL | ||||||||
Liabilities: | ||||||||
Debt | $ | 11,790,794 | $ | 11,382,408 | ||||
Accounts payable and accrued expenses | 611,770 | 639,490 | ||||||
Other liabilities | 1,115,911 | 1,225,548 | ||||||
Liabilities related to assets held for sale | 18,334 | 20,992 | ||||||
|
|
|
| |||||
Total liabilities | 13,536,809 | 13,268,438 | ||||||
|
|
|
| |||||
Capital: | ||||||||
Partners’ capital: | ||||||||
General partner - preferred | 582,200 | 582,200 | ||||||
General partner - common | 12,486,817 | 13,079,439 | ||||||
Limited partners | 51,194 | 58,613 | ||||||
|
|
|
| |||||
Total partners’ capital | 13,120,211 | 13,720,252 | ||||||
Noncontrolling interests | 653,125 | 735,222 | ||||||
|
|
|
| |||||
Total capital | 13,773,336 | 14,455,474 | ||||||
|
|
|
| |||||
Total liabilities and capital | $ | 27,310,145 | $ | 27,723,912 |
December 31, | ||||||||
2014 | 2013 | |||||||
ASSETS |
| |||||||
Investments in real estate properties | $ | 22,190,145 | $ | 20,824,477 | ||||
Less accumulated depreciation | 2,790,781 | 2,568,998 | ||||||
|
|
|
| |||||
Net investments in real estate properties | 19,399,364 | 18,255,479 | ||||||
Investments in and advances to unconsolidated entities | 4,824,724 | 4,430,239 | ||||||
Assets held for sale | 43,934 | 4,042 | ||||||
Notes receivable backed by real estate | - | 188,000 | ||||||
|
|
|
| |||||
Net investments in real estate | 24,268,022 | 22,877,760 | ||||||
Cash and cash equivalents | 350,692 | 491,129 | ||||||
Accounts receivable | 103,445 | 107,955 | ||||||
Other assets | 1,096,064 | 1,095,463 | ||||||
|
|
|
| |||||
Total assets | $ | 25,818,223 | $ | 24,572,307 | ||||
LIABILITIES AND CAPITAL | ||||||||
Liabilities: | ||||||||
Debt | $ | 9,380,199 | $ | 9,011,216 | ||||
Accounts payable and accrued expenses | 627,999 | 563,993 | ||||||
Other liabilities | 626,426 | 820,645 | ||||||
|
|
|
| |||||
Total liabilities | 10,634,624 | 10,395,854 | ||||||
|
|
|
| |||||
Capital: | ||||||||
Partners’ capital: | ||||||||
General partner - preferred | 78,235 | 100,000 | ||||||
General partner - common | 13,897,274 | 13,611,158 | ||||||
Limited partners | 48,189 | 48,209 | ||||||
|
|
|
| |||||
Total partners’ capital | 14,023,698 | 13,759,367 | ||||||
Noncontrolling interests | 1,159,901 | 417,086 | ||||||
|
|
|
| |||||
Total capital | 15,183,599 | 14,176,453 | ||||||
|
|
|
| |||||
Total liabilities and capital | $ | 25,818,223 | $ | 24,572,307 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
PROLOGIS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2014, 2013, 2012 2011, 2010
(In thousands, except per unit amounts)
2012 | 2011 | 2010 | ||||||||||
Revenues: | ||||||||||||
Rental income | $ | 1,495,202 | $ | 1,030,670 | $ | 549,605 | ||||||
Rental recoveries | 374,022 | 264,202 | 150,500 | |||||||||
Private capital revenue | 126,779 | 137,619 | 122,526 | |||||||||
Development management and other income | 9,958 | 18,836 | 17,521 | |||||||||
|
|
|
|
|
| |||||||
Total revenues | 2,005,961 | 1,451,327 | 840,152 | |||||||||
|
|
|
|
|
| |||||||
Expenses: | ||||||||||||
Rental expenses | 505,499 | 358,559 | 199,199 | |||||||||
Private capital expenses | 63,820 | 54,962 | 40,659 | |||||||||
General and administrative expenses | 228,068 | 195,161 | 165,981 | |||||||||
Merger, acquisition and other integration expenses | 80,676 | 140,495 | - | |||||||||
Impairment of real estate properties | 252,914 | 21,237 | 736,612 | |||||||||
Depreciation and amortization | 739,981 | 552,849 | 294,867 | |||||||||
Other expenses | 26,556 | 24,031 | 16,355 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 1,897,514 | 1,347,294 | 1,453,673 | |||||||||
|
|
|
|
|
| |||||||
Operating income (loss) | 108,447 | 104,033 | (613,521) | |||||||||
Other income (expense): | ||||||||||||
Earnings from unconsolidated entities, net | 31,676 | 59,935 | 23,678 | |||||||||
Interest expense | (507,484) | (468,072) | (461,166) | |||||||||
Impairment of goodwill and other assets | (16,135) | (126,432) | (412,745) | |||||||||
Interest and other income, net | 22,878 | 12,008 | 15,847 | |||||||||
Gains on acquisitions and dispositions of investments in real estate, net | 305,607 | 111,684 | 28,488 | |||||||||
Foreign currency and derivative gains (losses), net | (20,497) | 41,172 | (11,081) | |||||||||
Gain (loss) on early extinguishment of debt, net | (14,114) | 258 | (201,486) | |||||||||
|
|
|
|
|
| |||||||
Total other income (expense) | (198,069) | (369,447) | (1,018,465) | |||||||||
|
|
|
|
|
| |||||||
Loss before income taxes | (89,622) | (265,414) | (1,631,986) | |||||||||
Current income tax expense | 17,870 | 21,579 | 21,724 | |||||||||
Deferred income tax benefit | (14,290) | (19,803) | (52,223) | |||||||||
|
|
|
|
|
| |||||||
Total income tax expense (benefit) | 3,580 | 1,776 | (30,499) | |||||||||
|
|
|
|
|
| |||||||
Loss from continuing operations | (93,202) | (267,190) | (1,601,487) | |||||||||
|
|
|
|
|
| |||||||
Discontinued operations: | ||||||||||||
Income attributable to disposed properties and assets held for sale | 27,632 | 50,638 | 96,460 | |||||||||
Net gains on dispositions, including related impairment charges and taxes | 35,098 | 58,614 | 234,574 | |||||||||
|
|
|
|
|
| |||||||
Total discontinued operations | 62,730 | 109,252 | 331,034 | |||||||||
|
|
|
|
|
| |||||||
Consolidated net loss | (30,472) | (157,938) | (1,270,453) | |||||||||
Net loss (earnings) attributable to noncontrolling interests | (9,410) | 4,175 | (43) | |||||||||
|
|
|
|
|
| |||||||
Net loss attributable to controlling interests | (39,882) | (153,763) | (1,270,496) | |||||||||
Less preferred unit distribution | 41,226 | 34,696 | 25,424 | |||||||||
|
|
|
|
|
| |||||||
Net loss attributable to common unitholders | $ | (81,108) | $ | (188,459) | $ | (1,295,920) | ||||||
|
|
|
|
|
| |||||||
Weighted average common units outstanding - Basic | 461,848 | 371,730 | 219,515 | |||||||||
|
|
|
|
|
| |||||||
Weighted average common units outstanding - Diluted | 461,848 | 371,730 | 219,515 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per unit attributable to common unitholders - Basic: | ||||||||||||
Continuing operations | $ | (0.32) | $ | (0.80) | $ | (7.41) | ||||||
Discontinued operations | 0.14 | 0.29 | 1.51 | |||||||||
|
|
|
|
|
| |||||||
Net loss per unit attributable to common unitholders - Basic | $ | (0.18) | $ | (0.51) | $ | (5.90) | ||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per unit attributable to common unitholders - Diluted: | ||||||||||||
Continuing operations | $ | (0.32) | $ | (0.80) | $ | (7.41) | ||||||
Discontinued operations | 0.14 | 0.29 | 1.51 | |||||||||
|
|
|
|
|
| |||||||
Net loss per unit attributable to common unitholders - Diluted | $ | (0.18) | $ | (0.51) | $ | (5.90) | ||||||
|
|
|
|
|
| |||||||
Distributions per common unit | $ | 1.12 | $ | 1.06 | $ | 1.25 |
2014 | 2013 | 2012 | ||||||||||
Revenues: | ||||||||||||
Rental income | $ | 1,178,609 | $ | 1,227,975 | $ | 1,459,461 | ||||||
Rental recoveries | 348,740 | 331,518 | 364,320 | |||||||||
Strategic capital income | 219,871 | 179,472 | 126,779 | |||||||||
Development management and other income | 13,567 | 11,521 | 9,958 | |||||||||
|
|
|
|
|
| |||||||
Total revenues | 1,760,787 | 1,750,486 | 1,960,518 | |||||||||
|
|
|
|
|
| |||||||
Expenses: | ||||||||||||
Rental expenses | 430,787 | 451,938 | 491,239 | |||||||||
Strategic capital expenses | 96,496 | 89,279 | 63,820 | |||||||||
General and administrative expenses | 247,768 | 229,207 | 228,068 | |||||||||
Depreciation and amortization | 642,461 | 648,668 | 724,262 | |||||||||
Other expenses | 23,467 | 26,982 | 26,556 | |||||||||
Merger, acquisition and other integration expenses | - | - | 80,676 | |||||||||
Impairment of real estate properties | - | - | 252,914 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 1,440,979 | 1,446,074 | 1,867,535 | |||||||||
|
|
|
|
|
| |||||||
Operating income | 319,808 | 304,412 | 92,983 | |||||||||
Other income (expense): | ||||||||||||
Earnings from unconsolidated entities, net | 134,288 | 97,220 | 31,676 | |||||||||
Interest expense | (308,885) | (379,327) | (505,215) | |||||||||
Interest and other income, net | 25,768 | 26,948 | 22,878 | |||||||||
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net | 725,790 | 597,656 | 305,607 | |||||||||
Foreign currency and derivative losses and related amortization, net | (17,841) | (33,633) | (20,497) | |||||||||
Losses on early extinguishment of debt, net | (165,300) | (277,014) | (14,114) | |||||||||
Impairment of other assets | - | - | (16,135) | |||||||||
|
|
|
|
|
| |||||||
Total other income (expense) | 393,820 | 31,850 | (195,800) | |||||||||
|
|
|
|
|
| |||||||
Earnings (loss) before income taxes | 713,628 | 336,262 | (102,817) | |||||||||
Current income tax expense | (61,584) | (126,180) | (17,870) | |||||||||
Deferred income tax benefit | 87,240 | 19,447 | 14,290 | |||||||||
|
|
|
|
|
| |||||||
Total income tax benefit (expense) | 25,656 | (106,733) | (3,580) | |||||||||
|
|
|
|
|
| |||||||
Earnings (loss) from continuing operations | 739,284 | 229,529 | (106,397) | |||||||||
|
|
|
|
|
| |||||||
Discontinued operations: | ||||||||||||
Income attributable to disposed properties and assets held for sale | - | 6,970 | 40,827 | |||||||||
Net gains on dispositions, including related impairment charges and taxes | - | 116,550 | 35,098 | |||||||||
|
|
|
|
|
| |||||||
Total discontinued operations | - | 123,520 | 75,925 | |||||||||
|
|
|
|
|
| |||||||
Consolidated net earnings (loss) | 739,284 | 353,049 | (30,472) | |||||||||
Net earnings attributable to noncontrolling interests | (100,900) | (8,920) | (9,410) | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) attributable to controlling interests | 638,384 | 344,129 | (39,882) | |||||||||
Less preferred unit distributions | 7,431 | 18,391 | 41,226 | |||||||||
Loss on preferred unit redemption / repurchase | 6,517 | 9,108 | - | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) attributable to common unitholders | $ | 624,436 | $ | 316,630 | $ | (81,108) | ||||||
|
|
|
|
|
| |||||||
Weighted average common units outstanding - Basic | 501,349 | 487,936 | 461,848 | |||||||||
|
|
|
|
|
| |||||||
Weighted average common units outstanding - Diluted | 506,391 | 491,546 | 461,848 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per unit attributable to common unitholders - Basic: | ||||||||||||
Continuing operations | $ | 1.25 | $ | 0.40 | $ | (0.34) | ||||||
Discontinued operations | - | 0.25 | 0.16 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per unit attributable to common unitholders - Basic | $ | 1.25 | $ | 0.65 | $ | (0.18) | ||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per unit attributable to common unitholders - Diluted: | ||||||||||||
Continuing operations | $ | 1.24 | $ | 0.39 | $ | (0.34) | ||||||
Discontinued operations | - | 0.25 | 0.16 | |||||||||
|
|
|
|
|
| |||||||
Net earnings (loss) per unit attributable to common unitholders - Diluted | $ | 1.24 | $ | 0.64 | $ | (0.18) | ||||||
|
|
|
|
|
| |||||||
Distributions per common unit | $ | 1.32 | $ | 1.12 | $ | 1.12 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
PROLOGIS, L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Years Ended December 31, 2012, 20112014, 2013 and 20102012
(In thousands)
2012 | 2011 | 2010 | ||||||||||
Consolidated net loss | $ | (30,472) | $ | (157,938) | $ | (1,270,453) | ||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation losses, net | (79,014) | (192,591) | (45,248) | |||||||||
Unrealized gain (loss) and amortization on derivative contracts, net | 17,986 | (8,166) | (3,143) | |||||||||
|
|
|
|
|
| |||||||
Comprehensive loss | (91,500) | (358,695) | (1,318,844) | |||||||||
Net loss (earnings) attributable to noncontrolling interests | (9,410) | 4,175 | (43) | |||||||||
Other comprehensive loss attributable to noncontrolling interests | 9,573 | 21,596 | 2,933 | |||||||||
|
|
|
|
|
| |||||||
Comprehensive loss attributable to common unitholders | $ | (91,337) | $ | (332,924) | $ | (1,315,954) |
2014 | 2013 | 2012 | ||||||||||
Consolidated net earnings (loss) | $ | 739,284 | $ | 353,049 | $ | (30,472) | ||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation losses, net | (171,401) | (234,680) | (79,014) | |||||||||
Unrealized gains (losses) and amortization on derivative contracts, net | (6,498) | 19,590 | 17,986 | |||||||||
|
|
|
|
|
| |||||||
Comprehensive income (loss) | 561,385 | 137,959 | (91,500) | |||||||||
Net earnings attributable to noncontrolling interests | (100,900) | (8,920) | (9,410) | |||||||||
Other comprehensive loss attributable to noncontrolling interests | 12,666 | 12,261 | 9,573 | |||||||||
|
|
|
|
|
| |||||||
Comprehensive income (loss) attributable to common unitholders | $ | 473,151 | $ | 141,300 | $ | (91,337) |
The accompanying notes are an integral part of these Consolidated Financial Statements.
PROLOGIS, L.P.
CONSOLIDATED STATEMENTS OF CAPITAL
Years Ended December 31, 2012, 20112014, 2013 and 20102012
(In thousands)
General Partner | Limited Partners | Non- controlling Interests | Total | |||||||||||||||||||||||||||||
Preferred | Common | Common | ||||||||||||||||||||||||||||||
Units | Amount | Units | Amount | Units | Amount | |||||||||||||||||||||||||||
Balance as of January 1, 2010 | 12,000 | $ | 350,000 | 211,666 | $ | 7,637,324 | - | $ | - | $ | 19,962 | $ | 8,007,286 | |||||||||||||||||||
Consolidated net earnings (loss) | - | - | - | (1,270,496) | - | - | 43 | (1,270,453) | ||||||||||||||||||||||||
Issuance of units in exchange for contributions of equity offering proceeds | - | - | 41,069 | 1,087,284 | - | - | - | 1,087,284 | ||||||||||||||||||||||||
Effect of REIT’s common stock plans | - | - | 1,725 | 25,420 | - | - | - | 25,420 | ||||||||||||||||||||||||
Noncontrolling interests, issuances (conversions), net | - | - | 22 | 600 | - | - | (600) | - | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | (42,315) | - | - | (2,933) | (45,248) | ||||||||||||||||||||||||
Unrealized gain and amortization on derivative contracts, net | - | - | - | (3,143) | - | - | - | (3,143) | ||||||||||||||||||||||||
Costs of share-based compensation awards | - | - | - | 31,192 | - | - | - | 31,192 | ||||||||||||||||||||||||
Distributions | - | - | - | (310,643) | - | - | (1,340) | (311,983) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2010 | 12,000 | $ | 350,000 | 254,482 | $ | 7,155,223 | - | $ | - | $ | 15,132 | $ | 7,520,355 | |||||||||||||||||||
Consolidated net loss | - | - | - | (153,414) | - | (349) | (4,175) | (157,938) | ||||||||||||||||||||||||
Merger and PEPR Acquisition | 9,300 | 232,200 | 169,626 | 5,554,108 | 2,059 | 70,141 | 680,927 | 6,537,376 | ||||||||||||||||||||||||
Issuance of units in exchange for contributions of equity offering proceeds | - | - | 34,500 | 1,112,132 | - | - | - | 1,112,132 | ||||||||||||||||||||||||
Effect of REIT’s common stock plans | - | - | 793 | 2,398 | - | - | - | 2,398 | ||||||||||||||||||||||||
Capital contributions, net | - | - | - | - | - | - | 94,020 | 94,020 | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | (170,995) | - | - | (21,596) | (192,591) | ||||||||||||||||||||||||
Unrealized loss and amortization on derivative contracts, net | - | - | - | (8,166) | - | - | - | (8,166) | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | (411,847) | - | (11,179) | (29,086) | (452,112) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2011 | 21,300 | $ | 582,200 | 459,401 | $ | 13,079,439 | 2,059 | $ | 58,613 | $ | 735,222 | $ | 14,455,474 | |||||||||||||||||||
Consolidated net earnings (loss) | - | - | - | (39,720) | - | (162) | 9,410 | (30,472) | ||||||||||||||||||||||||
Adjustment to the Merger purchase price allocation | - | - | - | - | - | - | 10,163 | 10,163 | ||||||||||||||||||||||||
Effect of REIT’s common stock plans | - | - | 2,258 | 72,932 | - | - | - | 72,932 | ||||||||||||||||||||||||
Noncontrolling interests, issuances (conversions), net | - | - | 111 | 2,381 | - | - | (2,381) | - | ||||||||||||||||||||||||
Capital contributions, net | - | - | - | - | - | - | 74,447 | 74,447 | ||||||||||||||||||||||||
Purchase of noncontrolling interests | - | - | - | (13,998) | - | - | (122,258) | (136,256) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | (69,155) | - | (286) | (9,573) | (79,014) | ||||||||||||||||||||||||
Unrealized gain and amortization on derivative contracts, net | - | - | - | 17,913 | - | 73 | - | 17,986 | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | (562,975) | (166) | (7,044) | (41,905) | (611,924) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance as of December 31, 2012 | 21,300 | $ | 582,200 | 461,770 | $ | 12,486,817 | 1,893 | $ | 51,194 | $ | 653,125 | $ | 13,773,336 |
General Partner | Limited Partners | Non- controlling Interests | Total | |||||||||||||||||||||||||||||
Preferred | Common | Common | ||||||||||||||||||||||||||||||
Units | Amount | Units | Amount | Units | Amount | |||||||||||||||||||||||||||
Balance at January 1, 2012 | 21,300 | $ | 582,200 | 459,401 | $ | 13,079,439 | 2,059 | $ | 58,613 | $ | 735,222 | $ | 14,455,474 | |||||||||||||||||||
Consolidated net earnings (loss) | - | - | - | (39,720) | - | (162) | 9,410 | (30,472) | ||||||||||||||||||||||||
Adjustment to the Merger purchase price allocation | - | - | - | - | - | - | 10,163 | 10,163 | ||||||||||||||||||||||||
Effect of equity compensation plans | - | - | 2,258 | 72,932 | - | - | - | 72,932 | ||||||||||||||||||||||||
Noncontrolling interests, issuances (conversions), net | - | - | 111 | 2,381 | - | - | (2,381) | - | ||||||||||||||||||||||||
Capital contributions, net | - | - | - | - | - | - | 74,447 | 74,447 | ||||||||||||||||||||||||
Purchase of noncontrolling interests | - | - | - | (13,998) | - | - | (122,258) | (136,256) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | (69,155) | - | (286) | (9,573) | (79,014) | ||||||||||||||||||||||||
Unrealized gains and amortization on derivative contracts, net | - | - | - | 17,913 | - | 73 | �� | - | 17,986 | |||||||||||||||||||||||
Distributions and allocations | - | - | - | (562,975) | (166) | (7,044) | (41,905) | (611,924) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance at December 31, 2012 | 21,300 | $ | 582,200 | 461,770 | $ | 12,486,817 | 1,893 | $ | 51,194 | $ | 653,125 | $ | 13,773,336 | |||||||||||||||||||
Consolidated net earnings | - | - | - | 342,921 | - | 1,208 | 8,920 | 353,049 | ||||||||||||||||||||||||
Effect of equity compensation plans | - | - | 1,351 | 93,705 | - | - | - | 93,705 | ||||||||||||||||||||||||
Issuance of units in exchange for contribution of equity offering proceeds | - | - | 35,650 | 1,437,697 | - | - | - | 1,437,697 | ||||||||||||||||||||||||
Redemption of preferred units | (19,300) | (482,200) | - | (515) | - | - | - | (482,715) | ||||||||||||||||||||||||
Issuance of warrant by Prologis, Inc. | - | - | - | 32,359 | - | - | - | 32,359 | ||||||||||||||||||||||||
Capital contributions | - | - | - | - | - | - | 146,130 | 146,130 | ||||||||||||||||||||||||
Settlement of noncontrolling interests | - | - | 28 | (7,868) | - | - | (242,745) | (250,613) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | (221,633) | - | (786) | (12,261) | (234,680) | ||||||||||||||||||||||||
Unrealized gains and amortization on derivative contracts, net | - | - | - | 19,521 | - | 69 | - | 19,590 | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | (571,846) | (126) | (3,476) | (136,083) | (711,405) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance at December 31, 2013 | 2,000 | $ | 100,000 | 498,799 | $ | 13,611,158 | 1,767 | $ | 48,209 | $ | 417,086 | $ | 14,176,453 | |||||||||||||||||||
Consolidated net earnings | - | - | - | 636,183 | - | 2,201 | 100,900 | 739,284 | ||||||||||||||||||||||||
Effect of equity compensation plans | - | - | 1,383 | 88,438 | - | 450 | - | 88,888 | ||||||||||||||||||||||||
Issuance of units in exchange for contribution of at-the-market offering proceeds | - | - | 3,316 | 140,135 | - | - | - | 140,135 | ||||||||||||||||||||||||
Repurchase of preferred units | (435) | (21,765) | - | (5,878) | - | - | - | (27,643) | ||||||||||||||||||||||||
Issuance of units in exchange for proceeds from exercise of warrant | - | - | 6,000 | 213,840 | - | - | - | 213,840 | ||||||||||||||||||||||||
Formation of Prologis U.S. Logistics Venture | - | - | - | 13,721 | - | - | 442,251 | 455,972 | ||||||||||||||||||||||||
Consolidation of Prologis North American Industrial Fund | - | - | - | 12,507 | - | - | 554,493 | 567,000 | ||||||||||||||||||||||||
Capital contributions | - | - | - | - | - | - | 14,464 | 14,464 | ||||||||||||||||||||||||
Settlement of noncontrolling interests | - | - | - | 33,803 | - | - | (36,243) | (2,440) | ||||||||||||||||||||||||
Foreign currency translation losses, net | - | - | - | (167,950) | - | (548) | (12,666) | (181,164) | ||||||||||||||||||||||||
Unrealized losses and amortization on derivative contracts, net | - | - | - | (9,219) | - | (23) | - | (9,242) | ||||||||||||||||||||||||
Distributions and allocations | - | - | - | (669,464) | - | (2,100) | (320,384) | (991,948) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance at December 31, 2014 | 1,565 | $ | 78,235 | 509,498 | $ | 13,897,274 | 1,767 | $ | 48,189 | $ | 1,159,901 | $ | 15,183,599 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
PROLOGIS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2012, 20112014, 2013 and 20102012
(In thousands)
2012 | 2011 | 2010 | 2014 | 2013 | 2012 | |||||||||||||||||||
Operating activities: | ||||||||||||||||||||||||
Consolidated net loss | $ | (30,472) | $ | (157,938) | $ | (1,270,453) | ||||||||||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||||||||||
Consolidated net earnings (loss) | $ | 739,284 | $ | 353,049 | $ | (30,472) | ||||||||||||||||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||
Straight-lined rents | (62,290) | (59,384) | (40,983) | (42,829) | (46,861) | (62,290) | ||||||||||||||||||
REIT stock-based compensation awards, net | 32,138 | 28,920 | 25,085 | |||||||||||||||||||||
Equity-based compensation awards | 57,478 | 49,239 | 32,138 | |||||||||||||||||||||
Depreciation and amortization | 767,459 | 603,884 | 356,694 | 642,461 | 664,007 | 767,459 | ||||||||||||||||||
Earnings from unconsolidated entities, net | (31,676) | (59,935) | (23,678) | (134,288) | (97,220) | (31,676) | ||||||||||||||||||
Distributions and changes in operating receivables from unconsolidated entities | 6,581 | 58,981 | 79,671 | |||||||||||||||||||||
Distributions and net changes in operating receivables from unconsolidated entities | 110,435 | 75,859 | 6,581 | |||||||||||||||||||||
Amortization of debt and lease intangibles | 21,008 | 43,556 | 79,538 | 21,113 | 10,140 | 21,008 | ||||||||||||||||||
Non-cash Merger, acquisition and other integration expenses | 17,581 | 20,290 | - | - | - | 17,581 | ||||||||||||||||||
Impairment of real estate properties and other assets | 269,049 | 147,669 | 1,149,357 | - | - | 269,049 | ||||||||||||||||||
Net gains on dispositions, including related impairment charges, in discontinued operations | (43,008) | (61,830) | (234,574) | |||||||||||||||||||||
Gains on acquisitions and dispositions of investments in real estate, net | (305,607) | (111,684) | (28,488) | |||||||||||||||||||||
Loss (gain) on early extinguishment of debt, net | 14,114 | (258) | 201,486 | |||||||||||||||||||||
Unrealized foreign currency and derivative losses (gains), net | 14,892 | (38,398) | 11,487 | |||||||||||||||||||||
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net | (725,790) | (715,758) | (348,615) | |||||||||||||||||||||
Losses on early extinguishment of debt, net | 165,300 | 277,014 | 14,114 | |||||||||||||||||||||
Unrealized foreign currency and derivative losses (gains) and related amortization, net | 22,571 | 28,619 | 14,892 | |||||||||||||||||||||
Deferred income tax benefit | (21,967) | (19,803) | (52,223) | (87,240) | (20,067) | (21,967) | ||||||||||||||||||
Decrease (increase) in restricted cash, accounts receivable and other assets | (178,387) | (40,095) | 63,701 | |||||||||||||||||||||
Increase in accounts receivable and other assets | (93) | (12,912) | (178,387) | |||||||||||||||||||||
Decrease in accounts payable and accrued expenses and other liabilities | (5,923) | (146,911) | (75,837) | (63,871) | (80,120) | (5,923) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net cash provided by operating activities | 463,492 | 207,064 | 240,783 | 704,531 | 484,989 | 463,492 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Real estate development activity | (793,349) | (811,035) | (324,471) | (1,051,181) | (845,234) | (793,349) | ||||||||||||||||||
Real estate acquisitions | (254,414) | (214,759) | (133,654) | (612,330) | (514,611) | (254,414) | ||||||||||||||||||
Tenant improvements and lease commissions on previously leased space | (133,558) | (88,368) | (57,240) | (133,957) | (145,424) | (133,558) | ||||||||||||||||||
Non-development capital expenditures | (80,612) | (55,702) | (28,565) | (78,610) | (82,610) | (80,612) | ||||||||||||||||||
Investments in and advances to unconsolidated entities, net | (165,011) | (37,755) | (335,396) | |||||||||||||||||||||
Investments in and advances to unconsolidated entities | (739,635) | (1,221,155) | (165,011) | |||||||||||||||||||||
Return of investment from unconsolidated entities | 291,679 | 170,158 | 220,195 | 244,306 | 411,853 | 291,679 | ||||||||||||||||||
Proceeds from dispositions of real estate properties | 1,975,036 | 1,644,152 | 1,642,986 | |||||||||||||||||||||
Proceeds from repayment of notes receivable backed by real estate and other notes receivable | 55,000 | 6,450 | 18,440 | |||||||||||||||||||||
Investments in notes receivable backed by real estate and advances on other notes receivable | - | (55,000) | (269,000) | |||||||||||||||||||||
Cash acquired in connection with the Merger | - | 234,045 | - | |||||||||||||||||||||
Acquisition of PEPR, net of cash received | - | (1,025,251) | - | |||||||||||||||||||||
Acquisition of NAIF II and other unconsolidated entities, net of cash received | (365,156) | - | - | |||||||||||||||||||||
Proceeds from dispositions and contributions of real estate properties | 2,285,488 | 5,409,745 | 1,975,036 | |||||||||||||||||||||
Acquisition of a controlling interest in unconsolidated co-investment ventures, net of cash received | (590,390) | (678,642) | (365,156) | |||||||||||||||||||||
Proceeds from repayment of notes receivable backed by real estate | 188,000 | - | 55,000 | |||||||||||||||||||||
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Net cash provided by (used in) investing activities | 529,615 | (233,065) | 733,295 | (488,309) | 2,333,922 | 529,615 | ||||||||||||||||||
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Proceeds from issuance of common partnership units in exchange for contributions from the REIT, net | 30,981 | 1,156,493 | 1,162,461 | |||||||||||||||||||||
Distributions paid on common partnership units | (528,226) | (388,333) | (280,658) | |||||||||||||||||||||
Distributions paid on preferred units | (47,581) | (26,965) | (25,416) | |||||||||||||||||||||
Proceeds from issuance of common partnership units in exchange for contributions from Prologis, Inc. | 378,247 | 1,505,791 | 30,981 | |||||||||||||||||||||
Distributions paid on common and preferred units | (674,344) | (580,862) | (575,807) | |||||||||||||||||||||
Redemption of preferred units | (27,643) | (482,500) | - | |||||||||||||||||||||
Noncontrolling interest contributions | 70,820 | 123,924 | - | 468,280 | 145,522 | 70,820 | ||||||||||||||||||
Noncontrolling interest distributions | (41,905) | (16,178) | (1,610) | (313,272) | (113,928) | (41,905) | ||||||||||||||||||
Purchase of noncontrolling interest | (136,256) | - | - | (2,440) | (245,803) | (136,256) | ||||||||||||||||||
Debt and equity issuance costs paid | (10,963) | (77,241) | (76,580) | |||||||||||||||||||||
Net proceeds from (payments on) Credit Facilities | 9,064 | (37,558) | (246,280) | |||||||||||||||||||||
Repurchase of debt | (1,653,989) | (894,249) | (3,104,476) | |||||||||||||||||||||
Debt and capital issuance costs paid | (23,420) | (77,017) | (10,963) | |||||||||||||||||||||
Net proceeds from (payments on) credit facilities | (717,369) | (93,075) | 9,064 | |||||||||||||||||||||
Repurchase and payment of debt | (4,205,806) | (6,012,433) | (1,850,699) | |||||||||||||||||||||
Proceeds from the issuance of debt | 1,433,254 | 1,298,891 | 1,860,299 | 4,779,950 | 3,588,683 | 1,433,254 | ||||||||||||||||||
Payments on debt | (196,710) | (975,466) | (257,502) | |||||||||||||||||||||
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Net cash provided by (used in) financing activities | (1,071,511) | 163,318 | (969,762) | |||||||||||||||||||||
Net cash used in financing activities | (337,817) | (2,365,622) | (1,071,511) | |||||||||||||||||||||
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Effect of foreign currency exchange rate changes on cash | 3,142 | 1,121 | (1,044) | (18,842) | (62,970) | 3,142 | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (75,262) | 138,438 | 3,272 | (140,437) | 390,319 | (75,262) | ||||||||||||||||||
Cash and cash equivalents, beginning of year | 176,072 | 37,634 | 34,362 | 491,129 | 100,810 | 176,072 | ||||||||||||||||||
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Cash and cash equivalents, end of year | $ | 100,810 | $ | 176,072 | $ | 37,634 | $ | 350,692 | $ | 491,129 | $ | 100,810 |
See Note 2321 for information on non-cash investing and financing activities and other information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. | Description of Business |
On June 3, 2011, AMB Property Corporation (“AMB”) and AMB Property, L.P. completed the merger contemplated by the Agreement and Plan of Merger with ProLogis, a Maryland real estate investment trust (“ProLogis”) and its subsidiaries (the “Merger”). Following the Merger, AMB changed its name to Prologis, Inc. (the “REIT”). As a result of(or the Merger, each outstanding common share of beneficial interest of ProLogis was converted into 0.4464 of a newly issued share of common stock of the REIT. As further discussed in Note 3, AMB was the legal acquirer and ProLogis was the accounting acquirer. As such, in the Consolidated Financial Statements the historical results of ProLogis were included for the pre-Merger period and the combined results were included subsequent to the Merger. See Note 3 for further discussion on the Merger.
Prologis, Inc.“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 (“Internal(the “Internal Revenue Code”), and believes the current organization and method of operation will enable the REITit to maintain its status as a real estate investment trust.REIT. The REITParent is the general partner of Prologis, L.P. (the(or the “Operating Partnership”). Through our controlling interest in the Operating Partnership, we are engaged in the ownership, acquisition, development and operation of industrial properties in global regional and other distributionregional markets throughout the Americas, Europe and Asia. Our current business strategy includesis comprised of two reportableoperating business segments: Real Estate Operations and PrivateStrategic Capital. Our Real Estate Operations segment represents the long-term ownership of industrial properties. Our PrivateStrategic Capital segment represents the long-term management of co-investment ventures and other unconsolidated entities. See Note 2220 for further discussion of our business segments. Unless otherwise indicated, the notes to the Consolidated Financial Statements apply to both the REITParent and the Operating Partnership. The terms “the Company,” “Prologis,” “we,” “our” or “us” means the REITParent and Operating Partnership collectively.
AsFor each share of common stock or preferred stock the Parent issues, the Operating Partnership issues a corresponding common or preferred partnership unit, as applicable, to the Parent in exchange for the contribution of the proceeds from the stock issuance. At December 31, 2012,2014, the REITParent owned an approximate 99.59%99.65% common general partnership interest in the Operating Partnership, and 100% of the preferred units.units in the Operating Partnership. The remaining approximate 0.41%0.35% common limited partnership interests are owned by non-affiliated investors and certain current and former directors and officers of the REIT.Parent. As the sole general partner of the Operating Partnership, the REITParent has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership.
We operate the REITParent and the Operating Partnership as one enterprise. The management of the REITParent consists of the same members as the management of the Operating Partnership. These members are officers of the REITParent and employees of the Operating Partnership or one of its direct or indirect subsidiaries. As general partner with control of the Operating Partnership, the REITParent consolidates the Operating Partnership for financial reporting purposes, andPartnership. Since the REIT does not haveParent’s only significant assets other thanasset is its investment in the Operating Partnership. Therefore,Partnership, the assets and liabilities of the REITParent and the Operating Partnership are the same on their respective financial statements.
Information with respect to the square footage, number of buildings and acres of land is unaudited.
2. | Summary of Significant Accounting Policies |
Basis of Presentation and Consolidation. The accompanying consolidated financial statementsConsolidated Financial Statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”) and are presented in our reporting currency, the U.S. dollar. All material intercompany transactions with consolidated entities have been eliminated.
We consolidate all entities that are wholly ownedwholly-owned and those in which we own less than 100% of the equity but control, as well as any variable interest entities in which we are the primary beneficiary. We evaluate our ability to control an entity and whether the entity is a variable interest entity and we are the primary beneficiary through consideration of substantive terms of the arrangement to identify which enterprise has the power to direct the activities of the entity that most significantly impacts the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity.
For entities that are not defined as variable interest entities, we first consider whether Prologis iswe are the general partner or the limited partner (or the equivalent in such investments which are not structured as partnerships). We consolidate entities in which we are the general partner and the limited partners in such investmentsentities do not have rights which would preclude control. For entities in which we are the general partner but do not control the entity as the other partners hold substantive participating rights and/or kick-out rights we apply the equity method of accounting is applied.since as the general partner we have the ability to influence the venture. For joint ventures for which we are thea limited partner or our investment is in an entity that is not structured similar to a partnership, we consider factors such as ownership interest, voting control, authority to make decisions, and contractual and substantive participating rights of the partners to determine if the presumption that the general partner controls the entity is overcome.partners. In instances where the factors indicate that we control the joint venture, we consolidate the entity.
Adjustments and Reclassifications. Rental recoveries,Certain amounts included in the Consolidated Financial Statements of Operations,for 2013 and cash used for real estate acquisition investing activities, included in the Consolidated Statements of Cash Flows for 2011 and 20102012 have been reclassified to conform to the 20122014 financial statement presentation. In addition, certain other amounts includedWe reclassified the balances in the accompanying consolidated financial statementsConsolidated Balance Sheet at December 31, 2013, for 2011derivative assets fromAccounts Receivable toOther Assets and 2010 have been reclassifiedfor derivative liabilities fromAccounts Payable and Accrued Expenses to conform toOther Liabilities. See Note 7 for the 2012 financial statement presentation.detail of these amounts.
Use of Estimates. The accompanying consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as ofat the date of the financial statements, and revenue and expenses during the reporting period. Our actual results could differ from those estimates and assumptions. Although we believe the assumptions and estimates we made are reasonable and appropriate, as discussed in the applicable sections throughout thesethe Consolidated Financial Statements, different
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
assumptions and estimates could materially impact our reported results. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions and future changes in market conditions could impact our future operating results.
Foreign Operations. The U.S. dollar is the functional currency for our consolidated subsidiaries and unconsolidated entities operating in the United States and Mexico and certain of our consolidated subsidiaries that operate as holding companies for foreign investments. The
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
functional currency for our consolidated subsidiaries and unconsolidated entities operating in countries other than the United States and Mexico is the principal currency in which the entity’s assets, liabilities, income and expenses are denominated, which may be different from the local currency of the country of incorporation or the country where the entity conducts its operations.
The functional currencies of our consolidated subsidiaries and unconsolidated entities generally include the Brazilian real, British pound sterling, Canadian dollar, Chinese renminbi, euro, Japanese yen, and Singapore dollar. We are parties to business transactions denominated in these and other currencies.local currencies where we operate.
For our consolidated subsidiaries whose functional currency is not the U.S. dollar, we translate their financial statements into the U.S. dollarsdollar at the time we consolidate those subsidiaries’ financial statements. Generally, assets and liabilities are translated at the exchange rate in effect as ofat the balance sheet date. The resulting translation adjustments are included in theAccumulated Other Comprehensive Loss (“AOCI”) in ourthe Consolidated Balance Sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical exchange rate. Income statement accounts are translated using the average exchange rate for the period and income statement accounts that represent significant non-recurring transactions are translated at the rate in effect as ofat the date of the transaction. We translate our share of the net earnings or losses of our unconsolidated entities whose functional currency is not the U.S. dollar at the average exchange rate for the period.
We and certain of our consolidated subsidiaries have intercompany and third partythird-party debt that is not denominated in the entity’s functional currency. When the debt is remeasured against the functional currency of the entity, a gain or loss can result. The resulting adjustment is reflected in results of operations, unless it is intercompany debt that is deemed to be long-term in nature and then the adjustment is reflected in equity. The remeasurement results in the recognition ofas a cumulative translation adjustment inAccumulated Other Comprehensive LossAOCI.
We are subject to foreign currency risk due to potential fluctuations in exchange rates between certain foreign currencies and the U.S. dollar. A significant change in the value of the foreign currency of one or more countries where we have a significant investment would have an effect on our reported results of operations and financial position. Although we attempt to mitigate adverse effects by borrowing under debt agreements denominated in the same functional currency as the investment and, on occasion and when deemed appropriate, through the use of derivative contracts, there can be no assurance that those attempts to mitigate foreign currency risk will be successful.Consolidated Balance Sheets.
Business Combinations. When we acquire a business, which includesmay include an operating property, we record the acquisition at “fullthe fair value”.value of assets acquired and liabilities assumed. Transaction costs related to the acquisition of a business combinations are expensed as incurred. We generally acquire operating properties that meet the definition of a business. The transaction costs related to the acquisition of land and the formation of equity method investments continue to be capitalized, as these are not considered to be business combinations.capitalized.
When we acquire a business or individual operating properties, with the intention to hold the investment for the long-term,we allocate the purchase price to the various components of the acquisition based upon the fair value of the acquired assets and liabilities. The initial allocation of the purchase price is based on management’s preliminary assessment, which may differ when final information becomes available. Subsequent adjustments made to the initial purchase price allocation are made within the allocation period, which typically does not to exceed one year. Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. A gain may be recognized to the extent the purchase price is less than the fair value of net tangible and intangible assets acquired.
When we obtain control of an unconsolidated entity, we account for the acquisition of the entity in accordance with the guidance for a business combination achieved in stages. We measureremeasure our previously held interest in the unconsolidated entity at its acquisition-date fair value and recognize the resulting gain or loss, if any, in earnings at the acquisition date.
We allocate the purchase price using primarily level 2 and level 3 inputs (further defined inFair Value Measurements)Measurementsbelow) as follows:
Investments in Real Estate Properties.IndustrialWe value operating properties are valued as if vacant.We estimate fair value generally by applying an income approach methodology using a discounted cash flow analysis. Key assumptions in the discounted cash flow analysis include origination costsmarket rents, growth rates and discount and capitalization rates. DiscountWe determine discount and capitalization rates are determined by market based on recent appraisals, transactions and other market data. The fair value of land is generally based on relevant market data, such as a comparison of the subject site to similar parcels that have recently been sold or are currently being offered on the market for sale.
Investments in Unconsolidated Entities.We estimate the fair value of the entity by using similar valuation methods as those used for consolidated real estate properties and debt. We multiply the estimated net asset value of the entity by our ownership percentage to estimate the fair value of our investment.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Intangible Assets.We determine the portion of the purchase price related to intangible assets as follows:
• | In Place Leases. |
• | Above and Below Market Leases. |
• | Contracts to Provide Management |
Debt. TheWe estimate the fair value of debt is estimated based on contractual future cash flows discounted using borrowing spreads and market interest rates that would be available to us for the issuance of debt with similar terms and remaining maturities. In the case of publicly traded debt, we estimate the fair value is estimated based on available market data. Any discount or premium to the principal amount is included in the carrying value and amortized over the remaining term of the related debt using the effective interest method to interest expense.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Noncontrolling Interest.We estimate the portion of the fair value of the net assets owned by third parties based on the fair value of the consolidated net assets, principally real estate properties and debt.
Working Capital. TheWe base the fair value of all other assumedacquired assets and assumed liabilities is based on the best information available.
Fair Value Measurements. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). We estimate fair value using available market information and valuation methodologies we believe to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that we would realize upon disposition. The fair value hierarchy consists of three broad levels:
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity hascan access at the ability to access.measurement date.
Level 2 — Observable inputs,Inputs other than quoted prices included inwithin Level 1 such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable for the asset or can be corroborated by observable market data.liability, either directly or indirectly.
Level 3 — Unobservable inputs that are supported by littlefor the asset or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.liability.
Long-Lived Assets.
Real Estate Assets. Real estate assets are carried at depreciated cost. CostsWe capitalize costs incurred in developing, renovating, rehabilitating and improving real estate assets are capitalized as part of the investment basis of the real estate assets. Costs incurred in acquiring real estate properties andWe expense costs for making repairs and maintaining the real estate assets are expensed as incurred.
During the land development and construction periods of qualifying projects, we capitalize interest costs, insurance, real estate taxes and general and administrative costs of the personnel performing the development, renovation, and rehabilitation; if such costs are incremental and identifiable to a specific activity to getready the asset ready for its intended use. Capitalized costs are included in the investment basis of real estate assets. When a municipal district finances costs we incur for public infrastructure improvements, we record the costs in real estate until we are reimbursed or we credit the reimbursement to our tenants through real estate taxes. We capitalize costs incurred to successfully originate a lease that results directly from and are essential to acquire that lease, including internal costs that are incremental and identifiable as leasing activities. Leasing costs that meet the requirements for capitalization are presented as a component of other assets.Other Assetsin the Consolidated Balance Sheets.
TheWe charge the depreciable portions of real estate assets are charged to depreciation expense on a straight-line basis over theirthe respective estimated useful lives. Depreciation commences atwhen the asset is ready for its intended use, which we define as the earlier of stabilization (defined as 90%(90% occupied) or one year after completion of construction. We generally use the following useful lives: 5five to 7seven years for capital improvements, 10 years for standard tenant improvements, 25 years for depreciable land improvements, on developed buildings, 30 years for operating properties acquired and 40 years for operating properties we develop. Investments that are locatedWe depreciate building improvements on tarmac, which is land owned by federal, state or local airport authorities, andparcels subject to ground leases are depreciated over the shorter of the investmentestimated building improvement life or the contractual term of the underlying ground lease. Capitalized leasing costs are amortized over the estimated remaining lease term. Our weighted average lease term based on square feet for all leases, in effect at December 31, 20122014, was seven years.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
We assess the carrying values of our respective long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Recoverability of the assets is measured by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows. In order to review our assets for recoverability, weWe consider current market conditions, as well as our intent with respect to holding or disposing of the asset. Fair value is determined through various valuation techniques; including discountedWe measure the recoverability of the real estate asset by comparison of the carrying amount of the asset to the estimated future undiscounted cash flow models; quoted market values; and third party appraisals, where considered necessary.flows. If our analysis indicates that the carrying value of the long-lived assetreal estate property that we expect to hold is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the carrying value exceeds the current estimated fair value of the real estate property. We determine fair value through various valuation techniques; including discounted cash flow models, quoted market values, and third-party appraisals; where considered necessary. When we decide to sell an asset we compare the carrying value of the property to its estimated fair value based on estimated selling price less costs to sell and recognize an impairment for any excess.
We estimate the future undiscounted cash flows based on our intent as follows:
(i) | for real estate properties that we intend to hold long-term; including land held for development, properties currently under development and operating buildings; recoverability is assessed based on the estimated undiscounted future net rental income from operating the property and the terminal value; |
(ii) | for land parcels we intend to sell, recoverability is assessed based on estimated |
(iii) | for real estate properties currently under development and operating buildings we intend to sell, recoverability is assessed based on proceeds from disposition that are estimated based on future net rental income of the property and expected market capitalization rates; and |
(iv) | for costs incurred related to the potential acquisition of land or development of a real estate property, recoverability is assessed based on the probability that the acquisition or development is likely to occur |
The use of
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
We base projected future cash flows is based on assumptions that are consistent with our estimates of future expectations and the strategic plan we use to manage our underlying business. However, assumptions and estimates about future cash flows, discount rates and capitalization rates are complex and subjective. Changes in economic and operating conditions and our ultimateintent with regard to our investment intent that occuroccurs subsequent to our impairment analyses could impact these assumptions and result in future impairment of our real estate properties or the recognition of a gain or loss at time of disposal.
Goodwill. Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. We perform an annual impairment test for goodwill at the reporting unit level. We have $25.3 million of goodwill associated with our Private Capital segment in Europe. We perform an annual review of recoverability during the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable.long-lived assets.
Assets Held for Sale and Discontinued Operations.Sale. Discontinued operations represent a component of an entity that has either been disposed of or is classified as held for sale if both the operations and cash flows of the component have been or will be eliminated from ongoing operations of the entity as a result of the disposal transaction and the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. The results of operations of a component of our business or properties that have been classified as discontinued operations are also reported as discontinued operations for all periods presented. We classify a component of our business or property as held for sale when certain criteria are met, which are in accordance with GAAP. At such time, the respective assets and liabilities are presented separately on ourin the Consolidated Balance Sheets and depreciation is no longer recognized. Assets held for sale are reported at the lower of their carrying amount or their estimated fair value less the costs to sell the assets.
AssetsDiscontinued Operations. As discussed in theNew Accounting Pronouncementsbelow, beginning in 2014, only disposals of a component of an entity, or a group of components of an entity, representing a strategic shift in operations would be presented as discontinued operations. Under this guidance, none of our property dispositions qualified as discontinued operations in 2014. However, in 2013 and 2012 the results of operations for real estate properties sold during the reported periods or held for sale and properties disposedat the end of are considered discontinued operations if sold to a third party. Properties contributed or sold to entitiesthe reported periods were shown underDiscontinued Operations in which we maintain an ownership interest, act as manager or account for under the equity method are not considered discontinued operations due to our continuing involvement withConsolidated Statements of Operations following the properties.previous accounting standard.
Investments in Unconsolidated Entities. OurWe present our investments in certain entities are presented under the equity method. TheWe use the equity method is used when we have the ability to exercise significant influence over operating and financial policies of the venture but do not have control of the entity. Under the equity method, we initially recognize these investments (including advances) are initially recognized in the balance sheet at our cost and arewhich would include deferred gains from the contribution of properties, if applicable. We subsequently adjustedadjust the accounts to reflect our proportionate share of net earnings or losses recognized, our share of accumulated other comprehensive income or loss, distributions received deferred gains from the contribution of properties and certain other adjustments, as appropriate. When circumstances indicate there may have been a reduction in the value of an equity investment, we evaluate whether the loss in value is other than temporary. If we conclude it is other than temporary, we recognize an impairment charge to reflect the equity investment at fair value.
Notes Receivable Backed by Real Estate. We hold certain investments in debt securities that are backed by real estate assets. We regularly review the creditworthiness of the entities with which we hold the note agreements and reduce the notes receivable balance by estimating an allowance for amounts that may become uncollectible in the future. The notes are also evaluated individually for impairment. We consider a loan to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the agreement.
Cash and Cash Equivalents. We consider all cash on hand, demand deposits with financial institutions, and short-term highly liquid investments with original maturities of three months or less to be cash equivalents. Our cash and cash equivalents are financial instruments
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
that are exposed to concentrations of credit risk. We invest our cash with high-credit quality institutions. Cash balances may be invested in money market accounts that are not insured. We have not realized any losses in such cash investments or accounts and believe that we are not exposed to any significant credit risk.
Restricted Cash. Restricted cash consists primarily of escrows under secured mortgage agreements for taxes, insurance and certain other reserve requirements relating to the underlying collateral. In certain circumstances, the lender retains control over cash received for rental income for a period of three to six months prior to releasing it to us.
Financial Instruments. We may use certain types of derivative financial instruments for the purpose of managing certain foreign currency exchange rate and interest rate risk. We reflect our derivative financial instruments at fair value and record changes in the fair value of these derivatives each period in earnings, unless specific hedge accounting criteria are met. To qualifySee Note 18 for hedge accounting treatment, generally the derivative instruments used for risk management purposes must effectively reduce the risk exposure that they are designed to hedge (primarily interest rate swaps and net investment hedges) and, if a derivative instrument is utilized to hedge an anticipated transaction, the anticipated transaction must be probable of occurring. Derivative instruments meeting these hedging criteria are formally designated as hedges at the inception of the contract or at the redesignation process, if applicable.
The unrealized gains and losses resulting from changes in fair value of an effective hedge are recorded inAccumulated Other Comprehensive Lossfor the REIT and Partners’ Capitalfor the Operating Partnership. For hedges related to debt, these amounts are amortized to earnings over the remaining term of the hedged items. Changes in fair value of a net investment hedge remain in equity until the investment is substantially liquidated. The ineffective portion of a hedge, if any, is immediately recognized in earnings to the extent that the change in value of the derivative instrument does not perfectly offset the change in value of the item being hedged. We estimate the fair valuediscussion of our financial instruments through a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date. Primarily, we use quoted market prices or quotes from brokers or dealers for the same or similar instruments. These values represent a general approximation of possible value and may never actually be realized.
Exchangeable Debt. For the convertibleOur exchangeable notes we issued in 2008 and 2007, we were required to separate the accounting for the debt and equity components as we have the ability to settle the conversion of the debt and conversion spread, at our option, in cash, common stock, or a combination of cash and stock. The liability and equity components of convertible debt are accounted for separately. The value assigned to the debt component is the estimated fair value at the date of issuance of a similar bond without the conversion feature, which results in the debt being recorded at a discount. The resulting debt discount is amortized over the estimated remaining life of the debt as additional non-cash interest expense. The carrying amount of the equity component is determined by deducting the fair value of the debt component from the initial proceeds of the convertible debt instrument as a whole. Under the terms of the issuance of the 2010 convertible notes, we were required to settle the conversion by issuance of common shares and therefore this accounting did not apply to these notes.
In connection with the Merger and the debt exchange offer in June 2011, all issuances of our convertible notes became exchangeable notes issued by the Operating Partnership thatand are exchangeable into common stock of the REIT. As a result, theParent. The accounting for the exchangeable senior notes now requiresrequired us to separate the fair value of the derivative instrument (exchange feature) from the debt instrument and account for it separately as a derivative. At each reporting period, we adjust the derivative instrument to fair value with the adjustment being recorded in earnings asForeign Currency Exchange and Derivative Gains (Losses),Losses and Related Amortization, Net and the derivative reflected inOther Liabilities. We continue to amortize the discount over the remaining term of the exchangeable notes.
Noncontrolling Interests. Noncontrolling interests represent the share of consolidated entities owned by third parties. We recognize the noncontrolling interests in entities that we consolidate but of which we do not own 100% by using each noncontrolling holder’s respective share of the estimated fair value of the net assets as ofat the date of formation or acquisition. Noncontrolling interest that was created or assumed as a part of a business combination is recognized at fair value as of the date of the transaction. Noncontrolling interest is subsequently adjusted for the noncontrolling holder’s share of additional contributions, distributions to noncontrolling holders and the noncontrolling holders’ proportionate share of the net earnings or losses of each respective entity. If we establish a new consolidated entity or contribute a property to or liquidate an existing consolidated entity in which we do not own 100% of the ownership interests, we reflect the difference in cash received or paid from the noncontrolling interests carrying amount as paid-in-capital with no gain or loss recognized.
Certain limited partnership interests issued by us in connection with the formation of a real estate partnership and as consideration in a business combination are exchangeable into our common stock. Common stock issued upon exchange of a holder’s noncontrolling interest is accounted for at our carrying value of the surrendered noncontrolling interest.interest, and any differences reflected inAdditional Paid-in-Capital on the Consolidated Balance Sheets.
Costs of Raising Capital. CostsWe treat costs incurred in connection with the issuance of both common stock and preferred stock are treated as a reduction to additional paid-in capital. CostsWe capitalize costs incurred in connection with the issuance or renewal of debt are capitalized in other assets, and amortizedamortize to interest expense over the term of the related debt. Costs associated with debt modifications are expensed when incurred.
Accumulated Other Comprehensive Income (Loss).. For the REIT,Parent, we includeAccumulated Other Comprehensive LossAOCI as a separate component of stockholders’ equity in the Consolidated Balance Sheets. For the Operating Partnership,Accumulated Other Comprehensive LossAOCI is included in partners’ capital in the Consolidated Balance Sheets. Any reference toAccumulated Other Comprehensive LossAOCIin this document is referring to the component of stockholders’ equity for the REITParent and partners’ capital for the Operating Partnership.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Revenue Recognition.
Rental Income. We lease our operating properties to customers under agreements that are classified as operating leases. We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term. Generally, under the terms of our leases,
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
the majority of our rental expenses are recovered from our customers. We reflect amounts recovered from customers as revenue in the period that the applicable expenses are incurred. AWe make a provision for possible loss is made if the collection of a receivable balance is considered doubtful.
PrivateStrategic Capital Revenue.Income. PrivateStrategic capital revenueincome includes revenues we earn from the management services we provide to unconsolidated entities and certain third parties.entities. These fees are recognized as earned anddetermined in accordance with the terms specific to each arrangement and may include property and asset management fees or transactional fees for leasing, acquisition, construction, financing, legal and tax services provided. We may also earn promote paymentsincentive returns (we refer to these as promotes) based on third partythird-party investor returns over time.time, which may be during the duration of the venture or at the time of liquidation. We recognize these fees when they are earned, fixed and determinable. We report these fees inStrategic Capital Income in the Consolidated Statements of Operations. In addition, we may earn fees for services provided to develop properties within these ventures and those fees are reflected inDevelopment Management and Other Income in the Consolidated Statements of Operations on a percentage of completion basis.
Gains (Losses) on DispositionDispositions of Investments in Real Estate. GainsWe recognize gains on the disposition of real estate are recorded when the recognition criteria have been met, generally at the time the risks and rewards and title have transferred and we no longer have substantial continuing involvement with the real estate sold. LossesWe recognize losses from the disposition of real estate are recognized when known.
When we contribute or sell a property to an unconsolidated entity in which we have an ownership interest, we do not recognize a portion of the gain realized. If a loss is realized it is recognized when known. The amount of gain not recognized, based on our ownership interest in the entity acquiring the property, is deferred by recognizing a reduction to our investment in the applicable unconsolidated entity. We adjust our proportionate share of net earnings or losses recognized in future periods to reflect the entities’ recorded depreciation expense as if it were computed on our lower basis in the contributed properties rather than on the entity’s basis.
When a property that we originally contributed to an unconsolidated entity is disposed of to a third party, we recognize the amount of the gain we had previously deferred, along with our proportionate share of the gain recognized by the unconsolidated entity. During periods whenIf our ownership interest in an unconsolidated entity decreases and the decrease is expected to be permanent, we recognize the amounts relating to previously deferred gains to coincide with our new ownership interest.
Rental Expenses. Rental expenses primarily include the cost of our property management personnel, utilities, repairs and maintenance, property insurance and real estate taxes.
PrivateStrategic Capital Expenses. These costsStrategic capital expenses include the property management expenses associated with the property-level management of the properties owned by our unconsolidated entities and the direct expenses associated with the asset management of the unconsolidated entities.co-investment ventures provided by our employees who are assigned to our Strategic Capital segment. In addition, in order to achieve efficiencies and economies of scale, all of our property management functions are provided by property management personnel who are assigned to our Real Estate Operations segment. These individuals perform the property-level management of the properties in our owned and managed portfolio including properties we consolidated and the properties we manage that are owned by the unconsolidated co-investment ventures. We allocate the costs of our property management to the properties we consolidate (included inRental Expenses) and the properties owned by the unconsolidated co-investment ventures (included inStrategic Capital Expenses) by using the square feet owned by the respective portfolios.
Stock-BasedEquity-Based Compensation. We account for stock-basedequity-based compensation by measuring the cost of employee services received in exchange for an award of an equity instrument based on the fair value of the award on the grant date. We recognize the cost of the entire award on a straight-linedstraight-line basis over the period during which an employee is required to provide service in exchange for the award, generally the vesting period.
Income Taxes. Prologis, Inc. commenced operations as a fully integrated real estate company in 1997, elected to be taxed as a real estate investment trust under the Internal Revenue Code, and believes the current organization and method of operation will enable the REIT to maintain its status as a real estate investment trust. Under the Internal Revenue Code, real estate investment trustsREITs are generally not required to pay federal income taxes if they distribute 100% of their taxable income and meet certain income, asset and stockholder tests. If we fail to qualify as a real estate investment trustREIT in any taxable year, we will be subject to federal income taxes at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a real estate investment trustREIT for the four subsequent taxable years. Even as a real estate investment trust,REIT, we may be subject to certain state and local taxes on our own income and property, and to federal income and excise taxes on our undistributed taxable income.
We have elected taxable real estate investment trustREIT subsidiary (“TRS”) status for some of our consolidated subsidiaries. This allows us to provide services that would otherwise be considered impermissible for real estate investment trusts.REITs. Many of the foreign countries in which we have operations do not recognize real estate investment trustsREITs or do not accord real estate investment trustREIT status under their respective tax laws to our entities that operate in their jurisdiction. In the United States, we are taxed in certain states in which we operate. Accordingly, we recognize income tax expense for the federal and state income taxes incurred by our TRSs, taxes incurred in certain states and foreign jurisdictions, and interest and penalties associated with our unrecognized tax benefit liabilities.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
We evaluate tax positions taken in the financial statements on a quarterly basisConsolidated Financial Statements under the interpretation for accounting for uncertainty in income taxes. As a result of this evaluation, we may recognize a tax benefit from an uncertain tax position only if it is “more-likely-than-not” that the tax position will be sustained on examination by taxing authorities.
DeferredWe recognize deferred income taxes are recognized in certain taxable entities. For federal income tax purposes, certain acquisitions have been treated as tax-free transactions resulting in a carry-over basis in assets and liabilities. For financial reporting purposes and in accordance with purchase accounting, we record all of the acquired assets and liabilities at the estimated fair value at the date of acquisition. For our taxable subsidiaries, including international jurisdictions, we recognize the deferred income tax liabilities that represent the tax effect of the difference between the tax basis carried over and the fair value of the tangible and intangible assets at the date of acquisition. Any increases or decreases to the deferred income tax liability recorded in connection with these acquisitions, related to tax uncertainties acquired, are reflected in earnings.
If taxable income is generated in these subsidiaries, we recognize a benefit in earnings as a result of the reversal of the deferred income tax liability previously recorded at the acquisition date and we record current income tax expense representing the entire current income tax liability. If the reversal of the deferred income tax liability results from a sale or contribution of assets, the classification of the reversal to the Consolidated Statement of Operations is based on the taxability of the transaction. We record the reversal toDeferred Income Tax Benefit as a taxable transaction if we dispose of the asset. We record the reversal asGains on Dispositions of Investments in Real Estate and Revaluation of Equity Investments upon Acquisition of a Controlling Interest, Net as a non-taxable transaction if we dispose of the asset, as well as the entity that owns the asset.
Deferred income tax expense is generally a function of the period’s temporary differences (items that are treated differently for tax purposes than for financial reporting purposes) and the utilization of tax net operating losses generated in prior years that had been previously recognized as deferred income tax assets. AWe provide for a valuation allowance for deferred income tax assets is provided if we believe all or some portion of the deferred income tax asset may not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances that causes a change in the estimated realizability of the related deferred income tax asset is included in deferred tax expense.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Environmental Costs. We incur certain environmental remediation costs, including cleanup costs, consulting fees for environmental studies and investigations, monitoring costs, and legal costs relating to cleanup, litigation defense, and the pursuit of responsible third parties. CostsWe expense costs incurred in connection with operating properties and properties previously sold are expensed. Costssold. We capitalize costs related to undeveloped land are capitalized as development costs. Costscosts and include any expected future environmental liabilities at the time of acquisition. We include costs incurred for properties to be disposed are included in the cost of the properties upon disposition. We maintain a liability for the estimated costs of environmental remediation expected to be incurred in connection with undeveloped land, operating properties and properties previously sold that we adjust as appropriate as information becomes available.
Recently AdoptedNew Accounting Standards.Pronouncements.In September 2011,May 2014, the FASBFinancial Accounting Standards Board (the “FASB”) issued an accounting standard update that requires companies to amend and simplify the rules related to testing goodwill for impairment. The update allows an entity to make an initial qualitative evaluation, based on the entity’s events and circumstances,use a five step model to determine whether itwhen to recognize revenue from customer contracts in an effort to increase consistency and comparability throughout global capital markets and across industries. Under the model, a company will identify the contract, identify any separate performance obligations in the contract, determine the transaction price, allocate the transaction price and recognize revenue when the performance obligation is more likely than not that the fair value of a reporting unit is less than its carrying amount. The results of this qualitative assessment determine whether it is necessary to perform the currently required two-step impairment test.satisfied. The new standard will replace most existing revenue recognition guidance wasin GAAP when it becomes effective for us on January 1, 2012 for annual and interim goodwill impairment tests performed.2017. We adopted thishave not yet selected a transition method nor have we determined the effect of the standard and it did not have a material impact on our Consolidated Financial Statements.ongoing financial reporting.
In June 2011,April 2014, the FASB issued an accounting standard update that eliminateschanged the option to present componentscriteria for classifying and reporting discontinued operations while enhancing disclosures. Under the new guidance, only disposals of other comprehensive income (“OCI”) as parta component of the changes in stockholders’ equity, and requires the presentationan entity, or a group of components of net incomean entity, representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have, or will have, a major effect on the organization’s operations and other comprehensive income either infinancial results. Examples of disposals that may meet the new criteria include a single continuous statementdisposal of a major geographic area, a major line of business, or in two separate but consecutive statements.a major equity method investment. In addition, the new guidance requires additional disclosures about discontinued operations and the disposal of an individually significant component of an entity that does not meet the criteria for discontinued operations. We early adopted this standard as ofprospectively for all disposals subsequent to January 1, 20122014. Prior to adoption, the results of operations for real estate properties sold or held for sale during the reported periods were shown underDiscontinued Operations in the Consolidated Statements of Operations (see Note 8). Going forward, we expect the majority of our property dispositions will not qualify as discontinued operations and it was effective on a retrospective basis. As this standard is for presentation purposes only, it had no impact on our Consolidated Financial Statements.the results of the dispositions will be presented inIncome from Continuing Operations.
In May 2011, the FASB issued an accounting standard update to amend the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements in order to achieve further convergence with International Financial Reporting Standards. We adopted this standard as of January 1, 2012. See Note 20 for additional disclosures.
Recently Issued Accounting Standards. In FebruaryMarch 2013, the FASB issued an accounting standard update that requires disclosure of the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income. The disclosure requirements are effective for us on January 1, 2013, and we do not expect the guidance to have a material impact on our Consolidated Financial Statements.
In January 2013, a final consensus was reached by the Emerging Issues Task Force (“EITF”) and ratified by the FASB on the accounting for currency translation adjustment (“CTA”) when a parent sells or transfers part of its ownership interest in a foreign subsidiary.entity. When a company sells a subsidiary or group of assets that constitute a business while maintaining ownership of the foreign entity in which those assets or subsidiary reside, a complete or substantially complete liquidation of the foreign entity is required in order for a parent entity to release CTA to earnings. However, for a company that sells all or part of its ownership interest in a foreign entity, CTA is released upon the loss of a controlling financial interest in a consolidated foreign entity or partial sale of an equity method investment in a foreign entity. The guidanceFor step acquisitions, the CTA associated with the previous equity-method investment is effective for us onfully released when control is obtained and consolidation occurs. We adopted this standard at January 1, 2014, and we doit did not expect the guidance to have a material impact on ourin the Consolidated Financial Statements.
In December 2011, the FASB issued an accounting standard update that requires disclosures about offsetting and related arrangements to enable financial statements users to evaluate the effect or potential effect of netting arrangements on an entity’s financial position, including rights of setoff associated with certain financial instruments and derivative instruments. In January 2013, the FASB clarified that the guidance applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transaction that are either offset in accordance with specific criteria under GAAP or subject to a master netting arrangement or similar agreement. The disclosure requirements are effective for us on January 1, 2013, and we do not expect the guidance to have a material impact on our Consolidated Financial Statements.
In December 2011, the FASB issued an accounting standard update to clarify the scope of current U.S. GAAP. The update clarifies that the real estate sales guidance applies to the derecognition of in-substance real estate as a result of default on the subsidiary’s nonrecourse debt. That is, even if the reporting entity ceases to have a controlling financial interest under the consolidation guidance, the reporting entity would continue to include the real estate, debt, and the results of the subsidiary’s operations in its consolidated financial statements until legal title to the real estate is transferred to legally satisfy the debt. This accounting standard update is effective for us on January 1, 2013, and we do not expect the guidance to impact our Consolidated Financial Statements.
Merger of AMB and ProLogis
As discussed in Note 1, we completed the Merger on June 3, 2011. After consideration of all applicable factors pursuant to the business combination accounting rules, the Merger resulted in a reverse acquisition in which AMB was the “legal acquirer” because AMB issued its common stock to ProLogis shareholders and ProLogis was the “accounting acquirer” due to various factors, including the fact that ProLogis shareholders held the largest portion of the voting rights in the merged entity and ProLogis appointees represented the majority of the Board of Directors (“Board”). In our Consolidated Financial Statements, the period ended December 31, 2011 includes the historical results of ProLogis for the entire period presented, and the results of the merged company are included subsequent to the Merger.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
As ProLogis was the accounting acquirer, the calculation of the purchase price for accounting purposes is based on the price of ProLogis common shares and common shares ProLogis would have had to issue to achieve a similar ownership split between AMB stockholders and ProLogis shareholders. We estimated the fair value of the pre-combination portion of AMB’s share-based payment awards based on market data and, in the case of stock options, we used a Black-Scholes model to estimate the fair value of these awards as of the Merger date. An adjustment was made to equity for the vested portion while the unvested portion will be expensed over the remaining service period. The purchase price allocation reflects aggregate consideration of approximately $5.9 billion, as calculated below (in millions, except price per share):
ProLogis shares and limited partnership units outstanding at June 2, 2011 (60% of total shares of the combined company) | 571.4 | |||
Total shares of the combined company (for accounting purposes) | 952.3 | |||
|
| |||
Number of AMB shares to be issued (40% of total shares of the combined company) | 380.9 | |||
Multiplied by price of ProLogis common share on June 2, 2011 | $ | 15.21 | ||
|
| |||
Consideration associated with common shares issued | $ | 5,794.1 | ||
Add consideration associated with share based payment awards. | 62.4 | |||
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| |||
Total consideration of the Operating Partnership | $ | 5,856.5 |
The allocation of the purchase price requires a significant amount of judgment. The allocation was based on our valuation, estimates and assumptions of the acquisition date fair value of the tangible and intangible assets and liabilities acquired. The purchase price allocation is complete and adjustments recorded during the one year measurement period were not considered to be material to our financial position or results of operations. The allocation of the purchase price was as follows (in millions):
Investments in real estate properties | $ | 8,197.6 | ||
Investments in and advances to unconsolidated entities | 1,592.3 | |||
Cash, accounts receivable and other assets | 691.3 | |||
Debt | (3,646.7) | |||
Accounts payable, accrued expenses and other liabilities | (420.5) | |||
Noncontrolling interests | (557.5) | |||
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| |||
Total purchase price of the Operating Partnership | $ | 5,856.5 |
3. | Business Combinations |
Acquisition of ProLogis European Propertiesa Controlling Interest in Prologis North American Industrial Fund
During the second quarter of 2011,2014, we increased our ownership in Prologis North American Industrial Fund (“NAIF”) from 23.1% to 66.1% by acquiring the equity units from all but one partner for an aggregate of ProLogis European Properties (“PEPR”) through open market purchases and a mandatory tender offer. In May 2011, we settled our mandatory tender offer$679.0 million. This included the acquisition of $46.8 million on October 20, 2014 that resulted in our gaining control over NAIF, based on the acquisition of an additional 96.5 million ordinary units and 2.7 million convertible preferred units of PEPR. During allrights of the second quarterlimited partners, and therefore we began consolidating NAIF as of 2011,that date. When we made aggregate cash purchases totaling €715.8 million ($1.0 billion). We funded the purchases through borrowings under our global line of credit andacquire a new €500 million bridge facility, which was subsequently repaid with proceeds fromcontrolling interest in an equity offering in June 2011.
Upon completion of the tender offer,investment, we met the requirements to consolidate PEPR. In accordance with the accounting rules for business combinations, we markedremeasure our equity investment in PEPR from its carrying value to fair value, of approximately €486 million, which resulted in the recognition ofand as a result we may recognize a gain or loss. We recognized a gain of €59.6$201.3 million ($85.9 million). We refer to this transaction asinGains on Dispositions of Investments in Real Estate and Revaluation of Equity Investments upon Acquisition of a Controlling Interest, Netin the “PEPR Acquisition”.Consolidated Statements of Operations. The fair value was primarily based on the trading price for our previously owned units and our acquisition price for the PEPR units purchased during the tender offer period.external valuations.
We have allocated the aggregateThe total purchase price representing the share of PEPR we ownedwas $1.1 billion, which included our investment in NAIF at the time of consolidation of €1.1 billion ($1.6 billion).consolidation. The allocation of the purchase price required a significant amount of judgment and was based on our valuation, estimates and assumptions of the acquisition date fair value of the tangible and intangible assets and liabilities acquired. The purchase price allocation is complete and adjustments recorded during the one year measurement period were not considered to be material to our financial position or results of operations. The allocation of the purchase price wasacquired, for which we used external valuations as follows (in millions):
Investments in real estate properties | $ | 4,448.2 | ||
Cash, accounts receivable and other assets | 251.4 | |||
Debt | (2,240.8) | |||
Accounts payable, accrued expenses and other liabilities | (698.2) | |||
Noncontrolling interests | (133.7) | |||
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Total purchase price | $ | 1,626.9 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Pro forma Information (unaudited)
The following unaudited pro forma financial information presents our results as though the Merger and the PEPR Acquisition, as well as the equity offering in June 2011 that was used, in part, to repay the loans used to fund the PEPR Acquisition, had been consummated as of January 1, 2010. The pro forma information does not necessarily reflect the actual results of operations had the transactions been consummated at the beginning of the period indicated nor is it necessarily indicative of future operating results. The pro forma information does not give effect to any cost synergies or other operating efficiencies that have resulted or could result from the Merger and also does not include any merger and integration expenses. The results for the year ended December 31, 2011 included approximately seven months of actual results for both the Merger and PEPR Acquisition, and pro forma adjustments for five months. Actual results in 2011 include rental income and rental expenses of the properties acquired through the Merger and PEPR Acquisition of $575.2 million and $154.4 million, respectively, of which $50.5 million of rental income and $11.9 million of rental expenses are included in discontinued operations.
(amounts in thousands, except per share amounts) | 2011 | 2010 | ||||||
Total revenues | $ | 1,981,579 | $ | 1,898,083 | ||||
Net loss attributable to common stockholders | $ | (70,988) | $ | (1,374,283) | ||||
Net loss per share attributable to common stockholders - basic | $ | (0.15) | $ | (3.24) | ||||
Net loss per share attributable to common stockholders - diluted | $ | (0.15) | $ | (3.24) |
These results include certain adjustments, primarily decreased revenues resulting from the amortization of the net asset from the acquired leases with favorable or unfavorable rents relative to estimated market rents, increased depreciation and amortization expense resulting from the adjustment of real estate assets to estimated fair value and recognition of intangible assets related to in-place leases and acquired management contracts and lower interest expense due to the accretion of the fair value adjustment of debt.
Acquisitions of Unconsolidated Co-Investment Ventures
On February 3, 2012, we acquired our partner’s 63% interest in and now own 100% of our previously unconsolidated co-investment venture Prologis North American Industrial Fund II (“NAIF II”) and we repaid the loan from NAIF II to our partner for a total of $336.1 million. The assets and liabilities of this venture, as well as the activity since the acquisition date, have been included in our Consolidated Financial Statements. In accordance with the accounting rules for business combinations, we marked our equity investment in NAIF II from its carrying value to the estimated fair value. The fair value was determined and allocated based on our valuation, estimates, and assumptions of the acquisition date fair value of the tangible and intangible assets and liabilities. The preliminary allocation of net assets acquired is approximately $1.6 billion in real estate assets, $27.3 million of net other assets and $875.4 million in debt. We have not recorded a gain or loss with this transaction, as the carrying value of our investment was equal to the estimated fair value.appropriate. While the current allocation of the purchase price is substantially complete, the valuation of the real estate properties is still being finalized. We do not expect future revisions, if any, to have a significant impact on our financial position or results of operations. The allocation of the purchase price was as follows (in thousands):
Investments in real estate properties | $ | 2,770,191 | ||
Cash, accounts receivable and other assets | 132,261 | |||
Debt | (1,195,213) | |||
Accounts payable, accrued expenses and other liabilities | (70,226) | |||
Noncontrolling interests | (554,493) | |||
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| |||
Total purchase price | $ | 1,082,520 |
Our results of operations for 2014 include rental income and rental expenses of the properties acquired in the NAIF acquisition of $49.2 million and $13.3 million, respectively, offset by the impact of noncontrolling interests.
On February 22, 2012,2013 Acquisitions of Controlling Interests in Unconsolidated Co-Investment Ventures
During 2013, we dissolved theacquired real estate from three unconsolidated co-investment venture Prologis California and dividedventures through the portfolio equally with our partner. The net valueconclusion of the assets and liabilities distributed representedventure or the fair valueacquisition of our ownership interest in the co-investment venture on that date.partner’s interest. In accordanceconnection with the accounting rules for business combinations,these transactions, we markedremeasured our equity investment in Prologis California from its carrying value to the estimated fair value which resulted in a gainand recognized gains of $273.0 million. The gain is recorded$34.8 million inGains on Acquisitions and Dispositions of Investments in Real Estate and Revaluation of Equity Investments upon Acquisition of a Controlling Interest, Net in the Consolidated Statements of Operations. The fair value was determined and allocatedprimarily based on external valuations.
On October 2, 2013, we acquired our valuation, estimates,partner’s 78.4% interest in the unconsolidated co-investment venture Prologis SGP Mexico and assumptions ofconcluded the acquisition date fair value of the tangible and intangible assets and liabilities.venture. The preliminary allocation of net assets acquired is approximately $496.3was $409.5 million in real estate assets, $17.7properties and $4.0 million of net other assets and $150.0$158.4 million in debt. WhileAll properties acquired in this transaction were contributed in June 2014 to our new unconsolidated co-investment venture in Mexico, as discussed in Note 4.
On August 6, 2013, we concluded the currentunconsolidated co-investment venture Prologis North American Industrial Fund III. The venture sold 73 properties to a third party and we subsequently acquired the remaining properties through the purchase of our partner’s 80% ownership interest in the venture. The allocation of the purchase price is substantially complete, the valuation of thenet assets acquired was $519.2 million in real estate properties is being finalized. We do not expect future revisions, if any,and $22.0 million of net other assets. These properties were contributed in January 2014 to have a significant impact on our financial position orconsolidated venture in which we own 55% of the equity as discussed in Note 12.
In the second quarter of 2013, we concluded an unconsolidated co-investment venture in Japan.
The results of operations.operations for these properties were not significant in 2013.
2012 Acquisitions of Controlling Interests in Unconsolidated Co-Investment Ventures
On November 30,In 2012, Prologis North American Properties Fund 1 (“Fund 1”) distributed real estatewe acquired all or a portion of the total properties based onin three of our unconsolidated co-investment ventures in the United States, collectively the “2012 Co-Investment Venture Acquisitions.” As a result of the 2012 Co-Investment Venture Acquisitions, we remeasured our equity investments in these co-investment ventures to fair value to our partner. We acquired the remaining interest in Fund 1 for total consideration of $33.2 million. In accordance with the accounting rules for business combinations, we marked our equity investment in Fund 1 from its carrying value to the estimated fair value which resultedresulting in a gain of $21.2 million. The gain is recorded$286.3 million inGains on Acquisitions and Dispositions of Investments in Real Estate and Revaluation of Equity Investments upon Acquisition of a Controlling Interest, Netin ourthe Consolidated Statements of Operations. The fair value was determined and allocatedprimarily based on our valuation, estimates, and assumptions of the acquisition date fair value, which consisted primarily of real estate and intangible assets of $117.0 million. While the currentexternal valuations. The allocation of the purchase price is substantially complete, the valuation of thenet assets acquired for these acquisitions was approximately $2.3 billion in real estate properties, is being finalized. We do not expect future revisions, if any, to have a significant impact on our financial position or results$50.3 million of operations.
We refer to these three transactions collectively as “Co-Investment Venture Acquisitions”.net other assets and $1.0 billion in debt. Our results for 2012 include rental income and rental expenses of the properties acquired in the 2012 Co-Investment Venture Acquisitions of $170.6 million and $42.5 million, respectively, of which $4.9 million of rental income and $0.9 million of rental expenses are included in discontinued operations.respectively.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. |
During 2012, we disposed of land, land subject to ground leases and 200 operating properties to third parties aggregating 27.2 million square feet, resulting in net proceeds of $1.7 billion and net gains of $83.2 million ($17.3 million in continuing operations and $65.9 million in discontinued operations).
During 2011 we disposed of land, land subject to ground leases and 94 operating properties to third parties aggregating 10.7 million square feet, resulting in net proceeds of $1.1 billion and net gains of $74.0 million ($9.5 million in continuing operations and $64.5 million in discontinued operations).
In December 2010, we entered into a definitive agreement to sell a portfolio of United States retail, mixed-use and other non-core assets. The properties, owned directly or through equity interests, sold in the transaction included: four shopping centers, two office buildings, 11 mixed-use projects with related land and development agreements, two residential development joint ventures, a railway station and certain ground leases. In 2010, we recognized an impairment charge of $168.8 million related to this transaction and a gain of $4.4 million in 2011 when the sale of these assets was completed.
During the fourth quarter of 2010, we sold a portfolio of industrial properties and several equity method investments for gross proceeds of approximately $1.0 billion resulting in a net gain of $203.1 million ($66.1 million loss in continuing operations and $269.2 million gain in discontinued operations). The industrial portfolio included 182 properties aggregating 23 million square feet and the equity method investments included our 20% ownership interest in three co-investment ventures (ProLogis North American Properties Fund VI-VIII) and an investment in one of our other unconsolidated joint ventures that owned a hotel property.
Real Estate |
Investments in real estate properties are presented at cost, and consist of the following as ofat December 31 (in(dollars and square feet in thousands):
2012 | 2011 | Square Feet /Acres (1) | No. of Buildings (1) | Investment Balance | ||||||||||||||||||||||||||||
Industrial operating properties (1): | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||
Industrial operating properties: | ||||||||||||||||||||||||||||||||
Improved land | $ | 5,317,123 | $ | 4,813,145 | - - | - - | - - | - - | $ | 4,227,637 | $ | 4,074,647 | ||||||||||||||||||||
Buildings and improvements | 17,291,125 | 16,739,403 | 282,282 | 267,097 | 1,607 | 1,610 | 14,407,815 | 13,726,417 | ||||||||||||||||||||||||
Development portfolio, including cost of land (2) | 951,643 | 860,531 | ||||||||||||||||||||||||||||||
Land (3) | 1,794,364 | 1,984,233 | ||||||||||||||||||||||||||||||
Other real estate investments (4) | 454,868 | 390,225 | ||||||||||||||||||||||||||||||
Development portfolio, including land costs: | ||||||||||||||||||||||||||||||||
Pre-stabilized | 7,448 | 4,491 | 24 | 11 | 547,982 | 204,022 | ||||||||||||||||||||||||||
Properties under development | 22,844 | 18,587 | 55 | 46 | 925,998 | 816,995 | ||||||||||||||||||||||||||
Land | 9,017 | 9,747 | - - | - - | 1,577,786 | 1,516,166 | ||||||||||||||||||||||||||
Other real estate investments (2) | 502,927 | 486,230 | ||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||
Total investments in real estate properties | 25,809,123 | 24,787,537 | 22,190,145 | 20,824,477 | ||||||||||||||||||||||||||||
Less accumulated depreciation | 2,480,660 | 2,157,907 | 2,790,781 | 2,568,998 | ||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||
Net investments in real estate properties | $ | 23,328,463 | $ | 22,629,630 | $ | 19,399,364 | $ | 18,255,479 |
(1) |
(2) |
Included in other real estate investments |
At December 31, 2012, excluding our assets held for sale,2014, we owned real estate assets in the Americas (Canada, Mexico and the United States), Europe (Austria, Belgium, the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Romania, Slovakia, Spain, Sweden and the United Kingdom) and Asia (China, Japan and Singapore).
Acquisitions
Real estate acquisition activity for the years ended December 31 was as follows (dollars and square feet in thousands):
2014 | 2013 | 2012 | ||||||||||
Acquisitions of properties from unconsolidated co-investment ventures | ||||||||||||
Number of industrial operating properties | 231 | 58 | 215 | |||||||||
Square feet | 45,663 | 16,319 | 46,277 | |||||||||
Real estate acquisition value | $ | 2,770,191 | $ | 1,141,128 | $ | 2,294,892 | ||||||
Gains on revaluation of equity investments upon acquisition of a controlling interest | $ | 201,319 | $ | 34,787 | $ | 286,335 | ||||||
Acquisitions of properties from third parties | ||||||||||||
Number of industrial operating properties | 8 | 12 | 12 | |||||||||
Square feet | 1,004 | 3,262 | 1,622 | |||||||||
Real estate acquisition value | $ | 78,314 | $ | 146,331 | $ | 77,397 |
The acquisitions of controlling interests in unconsolidated co-investment ventures is discussed in Note 3.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Dispositions
DuringReal estate disposition activity for the yearyears ended December 31 was as follows (dollars and square feet in thousands):
2014 | 2013 | 2012 | ||||||||||
Continuing Operations | ||||||||||||
Contributions to unconsolidated co-investment ventures | ||||||||||||
Number of properties | 126 | 254 | 25 | |||||||||
Square feet | 25,247 | 71,503 | 4,784 | |||||||||
Net proceeds | $ | 1,825,311 | $ | 6,479,707 | $ | 380,880 | ||||||
Net gains on contributions | $ | 188,268 | $ | 555,196 | $ | 1,958 | ||||||
Dispositions to third parties | ||||||||||||
Number of properties | 145 | - | - | |||||||||
Square feet | 19,856 | - | - | |||||||||
Net proceeds (1) | $ | 1,365,318 | $ | 177,273 | $ | 94,587 | ||||||
Net gains on dispositions (1) | $ | 336,203 | $ | 7,673 | $ | 17,314 | ||||||
Discontinued Operations | ||||||||||||
Number of properties | - | 89 | 200 | |||||||||
Square feet | - | 9,196 | 27,169 | |||||||||
Net proceeds from dispositions | $ | - | $ | 608,286 | $ | 1,562,189 | ||||||
Net gains from dispositions, including related impairment charges and taxes (2) | $ | - | $ | 116,550 | $ | 35,098 |
(1) | Dispositions to third parties include land sales. |
(2) | We recorded $1.2 million and $0.2 million of income tax expense in 2013 and 2012, respectively, related to the disposition of properties in discontinued operations. |
Detail of significant transactions with related parties (co-investment ventures)
In June 2014, we completed the initial public offering of FIBRA Prologis, a Mexican REIT, on the Mexican Stock Exchange. In connection with the offering, FIBRA Prologis purchased 177 properties aggregating 29.7 million square feet (12.6 million square feet related to wholly-owned properties, 7.6 million square feet from our consolidated co-investment venture Prologis Mexico Fondo Logistico (“AFORES”) and 9.5 million square feet from our unconsolidated co-investment venture Prologis Mexico Industrial Fund). We received 287.3 million equity units of FIBRA Prologis (priced at Ps 27.00 ($2.09)) in exchange for our combined investments, resulting in a 45% ownership interest that we account for under the equity method. Based on this transaction, we recognized a gain on disposition of investments in real estate of $52.5 million; current tax expense of $32.4 million; deferred tax benefit of $55.5 million; and earnings attributable to noncontrolling interest of $61.0 million.
In the first quarter of 2013, we completed the initial public offering of Nippon Prologis REIT, Inc. (“NPR”), a publicly traded company listed on the Tokyo Stock Exchange. NPR acquired a portfolio of 12 properties totaling 9.6 million square feet from us for an aggregate purchase price of ¥173 billion ($1.9 billion). As a result of this transaction, we recognized a gain of $337.9 million, net of a $59.6 million deferral due to our ongoing investment. The gain was recorded inGains on Acquisitions and Dispositions of Investments in Real Estate and Revaluation of Equity Investments upon Acquisition of a Controlling Interest, Netin continuing operationsthe Consolidated Statements of $305.6 million, which included gainsOperations.
Also during the first quarter of $294.2 million related to the Co-Investment Venture Acquisitions2013, we closed Prologis European Logistics Partners Sàrl (“PELP”), a European joint venture with Norges Bank Investment Management (“NBIM”). The venture acquired a portfolio from us for approximately €2.3 billion ($3.0 billion) consisting of 195 properties and $11.4 million of gains principally related to contribution activity.
In 2012, we received cash proceeds of $381.9 million related to the contribution of 25 properties aggregating 4.848.7 million square feet in 11 European target global markets. As a result of this transaction, we recognized a gain of $1.8 million, net of a deferred gain due to three of our unconsolidated co-investment ventures. See Note 6 for more details.
ongoing investment. In 2012, we acquired 227 operating properties aggregating 47.9 million square feet with total real estate value of $2.4 billion. This includes the acquisition of 24 operating properties from one of our other unconsolidated joint ventures for $92.5 million and 191 operating properties in connection with the Co-Investment Venture Acquisitionsclosing, a warrant NBIM received at signing to acquire six million shares of our common stock with a strike price of $35.64 became exercisable. We used a Black-Scholes pricing model to value the warrant and this value was included as discussedconsideration in Note 3.the overall result of the transaction. On December 12, 2014, NBIM exercised the warrant to receive six million shares of our common stock for an aggregate strike price of $213.8 million.
During the years ended December 31, 2012, 2011 and 2010, we recorded impairment charges related to real estate properties and land. See Note 16 for further discussion on these impairment charges.
In December 2012 and February 2013, we announced the formation of two new co-investment ventures in Europe and Japan, respectively. We have 207 operating properties aggregating approximately $5.0 billion that we have or expect to contribute to these ventures in 2013. See Note 6 and 25 for more information.PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Lease Commitments
We have entered into operating ground leases as a lessee on certain land parcels, primarily on-tarmac facilities and office space with remaining lease terms of 1 to 6075 years. Buildings and improvements subject to ground leases are depreciated ratably over the shorter of the term of the related leases or the useful life of the real estate. Future minimum rental payments under non-cancelable operating leases in effect as ofat December 31, 20122014, were as follows (in thousands):
2013 | $ | 37,680 | ||||||
2014 | 36,475 | |||||||
2015 | 34,971 | $ | 32,307 | |||||
2016 | 29,569 | 30,237 | ||||||
2017 | 28,274 | 27,490 | ||||||
2018 | 25,896 | |||||||
2019 | 25,110 | |||||||
Thereafter | 384,825 | 391,634 | ||||||
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| |||||||
Total | $ | 551,794 | $ | 532,674 |
Operating Lease Agreements
We lease our operating properties and certain land parcels to customers under agreements that are generally classified as operating leases. Our largest customer and 25 largest customers accounted for 1.6%1.9% and 18.7%19.5%, respectively, of our annualized base rentsnet effective rent at December 31, 2012.2014. We determine net effective rent at the beginning of a lease based upon total estimated cash to be received through the term of the lease on an annual basis. At December 31, 2012,2014, minimum lease payments on leases with lease periods greater than one year for space in our operating properties and leases of land subject to ground leases during each of the years in the five-year period ending December 31, 2017 and thereafter were as follows (in thousands):
2013 | $ | 1,304,476 | ||||||
2014 | 1,120,418 | |||||||
2015 | 909,425 | $ | 1,193,676 | |||||
2016 | 702,224 | 1,025,162 | ||||||
2017 | 530,208 | 798,922 | ||||||
2018 | 601,492 | |||||||
2019 | 427,600 | |||||||
Thereafter | 1,522,733 | 1,326,106 | ||||||
|
| |||||||
Total | $ | 6,089,304 | $ | 5,372,958 |
These amounts do not reflect future rental revenues from the renewal or replacement of existing leases and exclude reimbursements of operating expenses. These reimbursements are reflected as rental recoveries and rental expenses in the accompanying Consolidated Statements of Operations.
Unconsolidated |
Summary of Investments
We have investments in entities through a variety of ventures. We co-invest in entities that own multiple properties with private capitalpartners and investors and provide asset and property management services to these entities. Weentities, which we refer to these entities as co-investment ventures. Our ownership interest in these entities generally ranges from 15-50%. 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 primarily details our investments in unconsolidated co-investment ventures, which are accounted for using the equity method of accounting. See Note 12 for more detail regarding our consolidated investments.
We also have other ventures, generally with one partner and that we do not manage, which we account for on the equity method. We refer to our investments in all entities accounted for under the equity method, both unconsolidated co-investment ventures and other ventures, collectively, as unconsolidated entities.
Our investments in and advances to our unconsolidated entities at December 31 are summarized below (in thousands):
2014 | 2013 | |||||||
Unconsolidated co-investment ventures | $ | 4,665,918 | $ | 4,250,015 | ||||
Other ventures | 158,806 | 180,224 | ||||||
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| |||||
Totals | $ | 4,824,724 | $ | 4,430,239 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
structure, our partner’s rights and participation and our level of control of the entity. This note details our unconsolidated co-investment ventures. See Note 13 for more detail regarding our consolidated investments.
We also have investments in joint ventures, generally with one partner and that we do not manage. We refer to our investments in the entities accounted for on the equity method, both unconsolidated co-investment ventures and other joint ventures, collectively, as unconsolidated entities.
Our investments in and advances to our unconsolidated entities as of December 31, are summarized below (in thousands):
2012 | 2011 | |||||||
Unconsolidated co-investment ventures | $ | 2,013,080 | $ | 2,471,179 | ||||
Other joint ventures | 182,702 | 386,576 | ||||||
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| |||||
Totals | $ | 2,195,782 | $ | 2,857,755 |
Unconsolidated Co-Investment Ventures
As of December 31, 2012, we had investmentsThe amounts recognized in and managed 11 unconsolidated co-investment ventures that own portfolios of operating industrial properties and may also develop properties.PrivateStrategic Capital RevenueIncome includes revenues we earn for the management services we provide to unconsolidated entities and certain third parties. These fees are recognized as earned and may include property and asset management fees or transactional fees for leasing, acquisition, construction, financing, legal and tax services. We may also earn promote payments based on the third party investor returns over time. In addition, we may earn fees for services provided to develop a building within an unconsolidated co-investment venture and those fees are reflected asDevelopment Management and Other Income Earnings from Unconsolidated Entities, Net in the Consolidated Statements of Operations.
SummarizedOperations depend on the size and operations of the co-investment ventures. Our ownership interest in these ventures also impacts the equity in earnings we recognize. The co-investment venture information regardingrepresents the venture’s information (not our investments inproportionate share) prepared on a GAAP basis. The following tables are summarized information of the unconsolidated co-investment ventures at December 31, and for the three years ended December 31 was as follows (in thousands):31.
2012 | 2011 | 2010 | ||||||||||
Earnings (loss) from unconsolidated co-investment ventures: | ||||||||||||
Americas | $ | (7,843) | $ | 22,709 | $ | (13,243) | ||||||
Europe | 31,174 | 25,709 | 28,024 | |||||||||
Asia | 2,372 | 908 | (4,233) | |||||||||
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Total earnings (loss) from unconsolidated co-investment ventures, net | $ | 25,703 | $ | 49,326 | $ | 10,548 | ||||||
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Private capital revenue and other income: | ||||||||||||
Americas | $ | 68,142 | $ | 67,293 | $ | 61,159 | ||||||
Europe | 37,173 | 45,758 | 54,834 | |||||||||
Asia | 19,870 | 14,149 | 758 | |||||||||
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Total private capital revenue | 125,185 | 127,200 | 116,751 | |||||||||
Development management and other income | 535 | 5,943 | 7,413 | |||||||||
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Total private capital revenue and other income | $ | 125,720 | $ | 133,143 | $ | 124,164 |
We completed the Merger and PEPR Acquisition in the second quarter of 2011. During 2012, we also acquired the interests in three of our unconsolidated co-investment ventures, all located in the Americas. Therefore, 2011 may not be comparable to 2012. See Note 3 for more information on these transactions.
Americas: Number of ventures Number of properties owned Square feet Total assets Third-party debt Total liabilities Our investment balance (1) Our weighted average ownership (2) Europe: Number of ventures Number of properties owned Square feet Total assets Third-party debt Total liabilities Our investment balance (1) Our weighted average ownership (2) Asia: Number of ventures Number of properties owned Square feet Total assets Third-party debt Total liabilities Our investment balance (1) Our weighted average ownership (2) Total: Number of ventures Number of properties owned Square feet Total assets Third-party debt Total liabilities Our investment balance (1) Our weighted average ownership (2)Private Capital Revenue includes fees and incentives we earn for services provided to our unconsolidated co-investment ventures (shown above), as well as fees earned from other unconsolidated entities and third parties of $1.6 million, $10.4 million and $5.8 million during 2012, 2011 and 2010, respectively.(dollars and square feet in millions) 2014 2013 2012 3 4 6 590 709 801 87.1 108.5 127.5 $ 7,063 $ 8,014 $ 9,070 $ 2,280 $ 2,999 $ 3,836 $ 2,421 $ 3,177 $ 4,170 $ 1,537 $ 1,194 $ 1,112 31.0% 22.7% 23.2% 4 4 3 636 571 312 147.4 132.9 70.3 $ 11,463 $ 11,819 $ 6,605 $ 2,644 $ 2,998 $ 2,384 $ 3,524 $ 4,114 $ 2,954 $ 2,773 $ 2,703 $ 723 38.8% 39.0% 29.7% 2 2 2 52 43 44 26.2 22.9 11.0 $ 4,135 $ 4,032 $ 1,937 $ 1,652 $ 1,715 $ 973 $ 1,749 $ 1,899 $ 1,063 $ 356 $ 353 $ 179 15.0% 15.0% 19.2% 9 10 11 1,278 1,323 1,157 260.7 264.3 208.8 $ 22,661 $ 23,865 $ 17,612 $ 6,576 $ 7,712 $ 7,193 $ 7,694 $ 9,190 $ 8,187 $ 4,666 $ 4,250 $ 2,014 32.0% 29.2% 25.1%
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(in millions) | 2014 (3) | 2013 (3) | 2012 | |||||||||
Americas: | ||||||||||||
Revenues | $ | 711 | $ | 702 | $ | 759 | ||||||
Net operating income | $ | 527 | $ | 513 | $ | 561 | ||||||
Net earnings (loss) | $ | 54 | $ | 58 | $ | (88) | ||||||
Europe: | ||||||||||||
Revenues | $ | 1,001 | $ | 801 | $ | 490 | ||||||
Net operating income | $ | 787 | $ | 621 | $ | 380 | ||||||
Net earnings | $ | 268 | $ | 131 | $ | 86 | ||||||
Asia: | ||||||||||||
Revenues | $ | 280 | $ | 224 | $ | 141 | ||||||
Net operating income | $ | 219 | $ | 175 | $ | 109 | ||||||
Net earnings | $ | 86 | $ | 48 | $ | 8 | ||||||
Total: | ||||||||||||
Revenues | $ | 1,992 | $ | 1,727 | $ | 1,390 | ||||||
Net operating income | $ | 1,533 | $ | 1,309 | $ | 1,050 | ||||||
Net earnings | $ | 408 | $ | 237 | $ | 6 |
(1) | The difference between our ownership interest of the venture’s equity and our investment balance results principally from three types of transactions: (i) deferring a portion of the gains we recognize from a contribution of a property to the venture ($322.9 million, $139.6 million and $147.9 million at December 31, 2014, 2013 and 2012, respectively); (ii) recording additional costs associated with our investment in the venture; and (iii) advances to the venture. |
(2) | Represents our weighted average ownership interest in all co-investment ventures based on each entity’s contribution to total assets, before depreciation, net of other liabilities. |
(3) | We had significant activity with our unconsolidated co-investment ventures in 2014 and 2013. As described above, we formed and invested in FIBRA Prologis in June 2014. In connection with this transaction, we concluded our unconsolidated co-investment venture in Mexico. During 2013, we concluded three co-investment ventures and we started two new co-investment ventures. |
Summarized information regarding the amounts we recognized in the Consolidated Statements of Operations as our share of the earnings from our investments in unconsolidated co-investment ventures for the years ended December 31 was as follows (in thousands):
2014 | 2013 | 2012 | ||||||||||
Earnings (loss) from unconsolidated co-investment ventures: | ||||||||||||
Americas | $ | 8,596 | $ | 21,724 | $ | (7,843) | ||||||
Europe | 108,430 | 63,839 | 31,174 | |||||||||
Asia | 14,022 | 9,091 | 2,372 | |||||||||
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Total earnings from unconsolidated co-investment ventures, net | $ | 131,048 | $ | 94,654 | $ | 25,703 | ||||||
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Strategic capital and other income: | ||||||||||||
Americas | $ | 94,354 | $ | 70,642 | $ | 68,142 | ||||||
Europe | 86,487 | 63,794 | 37,173 | |||||||||
Asia | 37,509 | 42,749 | 19,870 | |||||||||
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Total strategic capital income | 218,350 | 177,185 | 125,185 | |||||||||
Development management and other income | 5,424 | 4,007 | 535 | |||||||||
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Total strategic capital and other income | $ | 223,774 | $ | 181,192 | $ | 125,720 |
We may earn promotes based on the third-party investor returns over time. In June 2014, we earned a promote of $42.1 million from Prologis Targeted U.S. Logistics Fund, which was based on the venture’s cumulative returns to the investors over the last three years. In October 2013, we earned a promote of $7.9 million in connection with the conclusion of SGP Mexico, which was based on the venture’s cumulative returns to the investor over the life of the venture. We recognized the third-party investors’ portion of the promote of $31.3 million and $6.4 million
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
in 2014 and 2013, respectively, which is reflected inStrategic Capital Income in the Consolidated Statements of Operations. We also recognized $4.2 million and $1.3 million of expense in 2014 and 2013, respectively that is reflected inStrategic Capital Expenses in the Consolidated Statements of Operations, and represents the associated cash bonus paid pursuant to the terms of the Prologis Promote Plan. See Note 13 for more information about this plan.
Information about our investments in the individual co-investment ventures as ofat December 31 was as follows (dollars in thousands):
Number of properties owned | Square feet (in millions) | Ownership Percentage | Investment in and Advances to | |||||||||||||||||||||
Co-Investment Venture | 2012 | 2012 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Prologis California (Prologis California I LLC) (1) | - | - | - | 50.0 % | $ | - | $ | 83,994 | ||||||||||||||||
Prologis North American Properties Fund I (“Fund I”) | - | - | - | 41.3 % | - | 33,194 | ||||||||||||||||||
Prologis North American Properties Fund | - | - | - | 20.0 % | - | 29,868 | ||||||||||||||||||
Prologis North American Industrial Fund (3) | 243 | 47.3 | 23.1 % | 23.1 % | 209,580 | 219,160 | ||||||||||||||||||
Prologis North American Industrial Fund II (“NAIF II”) | - | - | - | 37.0 % | - | 335,397 | ||||||||||||||||||
Prologis North American Industrial Fund III (“Prologis NAIII”), | 91 | 17.7 | 20.0 % | 20.0 % | 20,860 | 26,066 | ||||||||||||||||||
Prologis Targeted U.S. Logistics Fund (“USLF”) | 366 | 44.4 | 23.9 % | 27.5 % | 645,241 | 665,594 | ||||||||||||||||||
Prologis Mexico Industrial Fund (Prologis MX Fund LP) (6) | 74 | 9.5 | 20.0 % | 20.0 % | 50,681 | 52,243 | ||||||||||||||||||
Prologis SGP Mexico (Prologis-SGP Mexico, LLC) (4) | 26 | 6.4 | 21.6 % | 21.6 % | 33,245 | 36,794 | ||||||||||||||||||
Prologis Brazil Logistics Partners Fund (“Brazil Fund”) and related joint ventures (“Brazil Ventures”) (7) | 7 | 2.2 | 50.0 % | 50.0 % | 152,224 | 113,985 | ||||||||||||||||||
Prologis European Properties Fund II (“PEPF II”) (8) | 224 | 55.3 | 29.7 % | 29.7 % | 398,291 | 404,298 | ||||||||||||||||||
Prologis Targeted Europe Logistics Fund (“PTELF”) | 74 | 11.9 | 32.4 % | 31.5 % | 280,430 | 245,859 | ||||||||||||||||||
Europe Logistics Venture 1 (Europe | 14 | 3.1 | 15.0 % | 15.0 % | 44,027 | 11,853 | ||||||||||||||||||
Prologis Japan Fund 1 (Prologis Japan Fund I, LP) (11) | 26 | 7.3 | 20.0 % | 20.0 % | 144,352 | 180,999 | ||||||||||||||||||
Prologis China Logistics Venture 1 (Prologis China | 18 | 3.8 | 15.0 % | 15.0 % | 34,149 | 31,875 | ||||||||||||||||||
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Totals | 1,163 | 208.8 | $ | 2,013,080 | $ | 2,471,179 |
Ownership Percentage | Investment in and Advances to | |||||||||||||||
Co-Investment Venture | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Prologis Targeted U.S. Logistics Fund, L.P. | 24.3% | 25.9% | $ | 712,044 | $ | 743,454 | ||||||||||
Prologis North American Industrial Fund, LP (NAIF) (1) | - | 23.1% | - | 201,482 | ||||||||||||
FIBRA Prologis (2) (3) | 45.9% | - | 589,627 | - | ||||||||||||
Prologis MX Fund LP (Prologis Mexico Industrial Fund) (2) | - | 20.0% | - | 49,684 | ||||||||||||
Prologis Brazil Logistics Partners Fund I, L.P. (“Brazil Fund”) and related joint ventures (“Brazil Ventures”) (4) | 50.0% | 50.0% | 235,496 | 199,392 | ||||||||||||
Prologis Targeted Europe Logistics Fund, FCP-FIS | 43.2% | 43.1% | 458,702 | 471,896 | ||||||||||||
Prologis European Properties Fund II, FCP-FIS | 31.1% | 32.5% | 488,503 | 582,828 | ||||||||||||
Europe Logistics Venture 1, FCP-FIS (5) | 15.0% | 15.0% | 56,127 | 62,654 | ||||||||||||
Prologis European Logistics Partners Sàrl (PELP) (5) | 50.0% | 50.0% | 1,769,720 | 1,585,923 | ||||||||||||
Nippon Prologis REIT (NPR) (6)(7) | 15.1% | 15.1% | 303,178 | 309,715 | ||||||||||||
Prologis China Logistics Venture I, LP & II, LP (Prologis China Logistics Venture) (5) | 15.0% | 15.0% | 52,521 | 42,987 | ||||||||||||
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| |||||||||||||
Totals | $ | 4,665,918 | $ | 4,250,015 |
(1) |
(2) |
(3) | We |
(4) |
We have a 50% ownership interest in and consolidate an entity that in turn owns 50% of several entities that we account for on the equity |
We have |
(6) | At December 31, 2014, we |
(7) | For any properties |
Equity Commitments Related to Certain Unconsolidated Co-Investment Ventures
Certain co-investment ventures have equity commitments from us and our venture partners. Our venture partners fulfill their equity commitment with cash. We may fulfill our equity commitment through contributions of properties or cash. The venture may obtain financing for the properties and therefore the acquisition price of additional investments that the venture could make may be more than the equity commitment. Depending on market conditions, the investment objectives of the ventures, our liquidity needs and other factors, we may make additional contributions of properties and/or additional cash investments in these ventures through the remaining commitment period.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
On December 20, 2012 we announced the signing of a definitive agreement for the formation of Prologis European Logistics Partners (“PELP”) with Norges Bank Investment Management (“NBIM”). We will have a 50% ownership interest in PELP that we will account for under the equity method of accounting. NBIM will have equity commitments of €1.2 billion ($1.6 billion). The venture has an initial term of 15 years, which may be extended for an additional 15 year period. Prologis will have the ability to reduce its ownership to 20% following the second anniversary of closing. Upon the closing of PELP (which is expected to be in the first quarter of 2013), the venture will acquire 195 operating properties from us. In connection with the signing of the transaction, NBIM received a warrant to acquire six million shares of Prologis common stock with a strike price of $35.64, which we expect to become exercisable upon closing of the transaction.
On February 14, 2013, we formed a new co-investment venture in Japan in which we contributed twelve properties for an aggregate purchase price of ¥173 billion ($1.9 billion). See Note 25 for more details.
The following is summarized financial information of the unconsolidated co-investment ventures and our investment (dollars in millions). The co-investment venture information represents 100% of Prologis’ stepped up basis, not our proportionate share, and may not be comparable to values reflected in the entities’ stand alone financial statements calculated on a different basis.
2012 (1) | Americas | Europe | Asia | Total | ||||||||||||
Revenues | $ | 759.3 | $ | 489.8 | $ | 140.5 | $ | 1,389.6 | ||||||||
Net earnings (loss) (2) | $ | (72.4) | $ | 85.7 | $ | 8.2 | $ | 21.5 | ||||||||
Total assets | $ | 9,070.4 | $ | 6,605.2 | $ | 1,937.0 | $ | 17,612.6 | ||||||||
Amounts due to us (3) | $ | 31.9 | $ | 33.3 | $ | 7.7 | $ | 72.9 | ||||||||
Third party debt (4) | $ | 3,835.5 | $ | 2,384.2 | $ | 972.9 | $ | 7,192.6 | ||||||||
Total liabilities | $ | 4,170.4 | $ | 2,953.8 | $ | 1,062.5 | $ | 8,186.7 | ||||||||
Noncontrolling interest | $ | 1.4 | $ | 7.5 | $ | - | $ | 8.9 | ||||||||
Co-investment ventures’ equity | $ | 4,898.6 | $ | 3,643.9 | $ | 874.5 | $ | 9,417.0 | ||||||||
Our weighted average ownership (5) | 23.2 % | 29.7 % | 19.2 % | 25.1 % | ||||||||||||
Our investment balance (6) | $ | 1,111.8 | $ | 722.8 | $ | 178.5 | $ | 2,013.1 | ||||||||
Deferred gains, net of amortization (7) | $ | 147.9 | $ | 181.6 | $ | 0.1 | $ | 329.6 | ||||||||
2011 (1) | Americas | Europe | Asia | Total | ||||||||||||
Revenues | $ | 871.8 | $ | 600.1 | $ | 95.5 | $ | 1,567.4 | ||||||||
Net earnings (loss) (2) | $ | (23.8) | $ | 73.6 | $ | (0.5) | $ | 49.3 | ||||||||
Total assets | $ | 12,236.0 | $ | 6,211.8 | $ | 2,245.1 | $ | 20,692.9 | ||||||||
Amounts due to us (3) | $ | 59.5 | $ | 8.1 | $ | 9.3 | $ | 76.9 | ||||||||
Third party debt (4) | $ | 5,952.8 | $ | 2,275.8 | $ | 1,061.4 | $ | 9,290.0 | ||||||||
Total liabilities | $ | 6,386.4 | $ | 2,758.9 | $ | 1,174.0 | $ | 10,319.3 | ||||||||
Noncontrolling interest | $ | 1.7 | $ | 6.2 | $ | - | $ | 7.9 | ||||||||
Co-investment ventures’ equity | $ | 5,847.9 | $ | 3,446.7 | $ | 1,071.1 | $ | 10,365.7 | ||||||||
Our weighted average ownership (5) | 28.2 % | 29.9 % | 19.4 % | 27.9 % | ||||||||||||
Our investment balance (6) | $ | 1,596.3 | $ | 662.0 | $ | 212.9 | $ | 2,471.2 | ||||||||
Deferred gains, net of amortization (7) | $ | 227.6 | $ | 191.0 | $ | 0.1 | $ | 418.7 |
|
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Included in 2011 net earnings (loss) in Americas is a net gain of $17.1 million from the disposition of 21 properties by two ventures. Also included in net earnings (loss) in Americas is a loss of $20.3 million for the year ended December 31, 2011 due to the impairment of two operating buildings in two of the ventures. Included in the net earnings (loss) in Europe is a gain of $6.4 million from the acquisition of a property by one of our co-investment ventures.
Equity Commitments Related to Certain Unconsolidated Co-Investment Ventures
Certain unconsolidated co-investment ventures have equity commitments from us and our venture partners. We may fulfill our equity commitment through contributions of properties or cash. Our venture partners fulfill their equity commitment with cash. We are committed to offer to contribute certain properties that we develop and stabilize in select markets in Europe and Mexico to certain ventures. These ventures are committed to acquire such properties, subject to certain exceptions, including that the properties meet certain specified leasing and other criteria, and that the ventures have available capital. We are not obligated to contribute properties at a loss. Depending on market conditions, the investment objectives of the ventures and other factors, we may make contributions of properties to these ventures through the remaining commitment period.
The following table is a summary of remaining equity commitments as ofat December 31, 20122014 (in millions):
Equity commitments | Expiration date for remaining commitments | |||||
Prologis Targeted U.S. Logistics Fund (1) | ||||||
Prologis | $ | - | Open-Ended (1) | |||
Venture Partners | $ | 30.0 | ||||
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Prologis SGP Mexico (2) | ||||||
Prologis | $ | 24.6 | (2) | |||
Venture Partner | $ | 98.1 | ||||
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Europe Logistics Venture 1 (3) | ||||||
Prologis | $ | 54.5 | February 2014 | |||
Venture Partner | $ | 309.0 | ||||
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Prologis China Logistics Venture 1 | ||||||
Prologis | $ | 68.6 | March 2015 | |||
Venture Partner | $ | 388.7 | ||||
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Total | ||||||
Prologis | $ | 147.7 | ||||
Venture Partners | $ | 825.8 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Equity commitments | Expiration date for remaining commitments | |||||||||||||||
Prologis | Venture Partners | Total | ||||||||||||||
Prologis Targeted U.S. Logistics Fund | $ | - | $ | 376 | $ | 376 | 2015-2017 | |||||||||
Prologis Targeted Europe Logistics Fund (1) | 117 | 197 | 314 | June 2015 | ||||||||||||
Prologis European Properties Fund II (1) | 46 | 106 | 152 | September 2015 | ||||||||||||
Europe Logistics Venture 1 (1) | 4 | 21 | 25 | June 2015 | ||||||||||||
Prologis European Logistics Partners Sàrl (2) | 104 | 104 | 208 | February 2016 | ||||||||||||
Prologis China Logistics Venture (3) | 225 | 1,277 | 1,502 | 2015 and 2017 | ||||||||||||
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Total | $ | 496 | $ | 2,081 | $ | 2,577 |
(1) |
Equity commitments are denominated in euro and reported above in U.S. |
(2) | The equity commitments for this venture |
To the extent an unconsolidated entity acquires properties from a third party or requires cash to retire debt or has other cash needs, we may be required or agree to contribute our proportionate share of the equity component in cash to the unconsolidated entity.
(3) | In July 2014, we secured a $500 million increase in committed third-party equity for this venture. |
Other joint venturesVentures
We have acquired several investments in other unconsolidated joint ventures that own real estate properties and/or perform development activity. We recognized our proportionate share of the earnings from our investments in these entities of $3.2 million, $2.6 million and have summarized this information$6.0 million for the years ended December 31, as follows (in thousands):
2012 | 2011 | 2010 | ||||||||||
Americas | $ | 1,842 | $ | 5,239 | $ | 6,502 | ||||||
Europe | 2,606 | 2,161 | 4,861 | |||||||||
Asia | 1,525 | 3,209 | 1,767 | |||||||||
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Total earnings from other joint ventures | $ | 5,973 | $ | 10,609 | $ | 13,130 |
Our investments in2014, 2013 and advances to these entities as of December 31 was as follows (in thousands):2012, respectively.
2012 | 2011 | |||||||
Americas (1) | $ | 106,655 | $ | 305,352 | ||||
Europe | 48,503 | 50,474 | ||||||
Asia | 27,544 | 30,750 | ||||||
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Total | $ | 182,702 | $ | 386,576 |
Notes Receivable Backed by Real Estate |
The activity on theAt December 31, 2013, we had $188.0 million of notes receivable backed by real estate that represented an investment in a preferred equity interest made in 2010 through the sale of a portfolio of industrial properties. We earned a preferred return at an annual rate of 7% for the year ended December 31, 2012 was as follows (in thousands):
$188 million Equity Interest (1) | $55 million Equity Interest (2) | NAIF II Secured Mortgage | Total | |||||||||||||
Balance as of December 31, 2011 | $ | 188,000 | $ | 55,970 | $ | 78,864 | $ | 322,834 | ||||||||
Elimination upon acquisition of NAIF II | - | - | (78,864) | (78,864) | ||||||||||||
Principal payment received | - | (55,000) | - | (55,000) | ||||||||||||
Accrued interest, net of interest payments received | - | (970) | �� | - | (970) | |||||||||||
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Balance as of December 31, 2012 | $ | 188,000 | $ | - | $ | - | $ | 188,000 |
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PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Other Assets and Other Liabilities |
Our other assets consisted of the following, net of amortization and depreciation, if applicable, as ofat December 31 (in thousands):
2012 | 2011 | 2014 | 2013 | |||||||||||||
Leasing commissions | $ | 241,557 | $ | 222,267 | ||||||||||||
Rent leveling and above market leases | 349,634 | 337,812 | 224,589 | 256,018 | ||||||||||||
Leasing commissions | 218,506 | 220,602 | ||||||||||||||
Value added taxes receivable | 110,906 | 93,721 | ||||||||||||||
Derivative assets | 106,664 | 20,241 | ||||||||||||||
Prepaid assets | 104,012 | 89,620 | 105,093 | 136,729 | ||||||||||||
Fixed assets | 90,177 | 53,525 | 86,927 | 85,389 | ||||||||||||
Value added taxes receivable | 86,331 | 106,074 | ||||||||||||||
Loan fees | 53,025 | 49,920 | ||||||||||||||
Management contracts | 66,466 | 89,427 | 52,896 | 61,082 | ||||||||||||
Loan fees | 49,344 | 57,266 | ||||||||||||||
Other notes receivable | 34,763 | 37,734 | 46,570 | 38,860 | ||||||||||||
Deferred income taxes | 31,733 | 35,565 | 7,887 | 19,020 | ||||||||||||
Other assets | 67,512 | 57,508 | ||||||||||||||
Other | 84,525 | 99,863 | ||||||||||||||
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Totals | $ | 1,123,053 | $ | 1,072,780 | $ | 1,096,064 | $ | 1,095,463 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Our other liabilities consisted of the following, net of amortization, if applicable, as ofat December 31 (in thousands):
2012 | 2011 | 2014 | 2013 | |||||||||||||
Tenant security deposits | $ | 169,326 | $ | 191,070 | ||||||||||||
Income tax liabilities | $ | 463,102 | $ | 599,967 | 85,200 | 184,888 | ||||||||||
Tenant security deposits | 174,137 | 158,544 | ||||||||||||||
Unearned rents | 115,020 | 115,093 | 74,873 | 64,156 | ||||||||||||
Lease intangible liabilities | 53,289 | 68,256 | ||||||||||||||
Derivative liabilities | 52,740 | 77,018 | ||||||||||||||
Below market leases | 30,651 | 30,031 | ||||||||||||||
Deferred income | 50,025 | 52,045 | 16,326 | 39,565 | ||||||||||||
Value added taxes payable | 31,399 | 42,895 | 13,358 | 57,260 | ||||||||||||
Environmental | 30,075 | 40,206 | 10,878 | 16,926 | ||||||||||||
Other | 198,864 | 148,542 | 173,074 | 159,731 | ||||||||||||
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Totals | $ | 1,115,911 | $ | 1,225,548 | $ | 626,426 | $ | 820,645 |
The expected future amortization of leasing commissions into rental expense of $218.5$241.6 million is summarized in the table below. We also expect our above and below market leases and rent leveling net assets, which total $296.3$193.9 million at December 31, 2012,2014, to be amortized into rental income as follows (in thousands):
Amortization Expense | Net Charge to Rental Income | |||||||
2013 | $ | 71,246 | $ | 56,289 | ||||
2014 | 52,987 | 67,937 | ||||||
2015 | 39,423 | 48,360 | ||||||
2016 | 23,109 | 29,254 | ||||||
2017 | 12,570 | 23,369 | ||||||
Thereafter | 19,171 | 71,136 | ||||||
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Totals | $ | 218,506 | $ | 296,345 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Amortization Expense | Net Charge to Rental Income | |||||||
2015 | $ | 69,815 | $ | 10,678 | ||||
2016 | 55,330 | 22,322 | ||||||
2017 | 41,783 | 25,152 | ||||||
2018 | 25,342 | 23,843 | ||||||
2019 | 15,531 | 20,413 | ||||||
Thereafter | 33,756 | 91,530 | ||||||
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Totals | $ | 241,557 | $ | 193,938 |
Assets Held for Sale and Discontinued Operations |
We had five land parcels and oneseven operating propertyproperties that met the criteria to be classified as held for sale at December 31, 2012.2014, and three land parcels that met the criteria at December 31, 2013. The amounts included in held for sale as ofat December 31, 20122014 and 2013, respectively, represented the real estate investment balances and the related assets and liabilities for each property.
As discussed in Note 1, the FASB issued a standard updating the accounting and disclosure regarding discontinued operations in April 2014 which we adopted as of January 1, 2014. None of our property dispositions in 2014 met the new criteria to be classified as discontinued operations. The operations of the properties held for sale orthat were disposed of to third parties during 2013 and 2012 that met the criteria for discontinued operations, including the aggregate net gains or losses recognized upon their disposition (See Note 4 for more detail on gains on dispositions), are presented asDiscontinued Operations discontinued operations in ourthe Consolidated Statements of Operations for all periods presented. Interest expense is included in discontinued operations only if it is directlyOperations. Income attributable to these properties.
Discontinued operations are summarizeddisposed properties and assets held for sale was as follows for the years ended December 31 (in thousands):
2012 | 2011 | 2010 | ||||||||||
Rental income and recoveries | $ | 82,719 | $ | 141,547 | $ | 225,064 | ||||||
Rental expenses | (26,665) | (38,657) | (64,577) | |||||||||
Depreciation and amortization | (27,478) | (51,035) | (64,027) | |||||||||
Interest expense | (944) | (1,217) | - | |||||||||
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Income attributable to disposed properties and assets held for sale | 27,632 | 50,638 | 96,460 | |||||||||
Net gains on dispositions | 65,927 | 64,489 | 326,004 | |||||||||
Impairment charges | (30,596) | (2,659) | (87,702) | |||||||||
Income tax on dispositions | (233) | (3,216) | (3,728) | |||||||||
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Total discontinued operations | $ | 62,730 | $ | 109,252 | $ | 331,034 |
2013 | 2012 | |||||||
Rental income and recoveries | $ | 34,105 | $ | 128,162 | ||||
Rental expenses | (10,633) | (40,925) | ||||||
Depreciation and amortization | (15,339) | (43,197) | ||||||
Interest expense | (1,163) | (3,213) | ||||||
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Income attributable to disposed properties | $ | 6,970 | $ | 40,827 |
Debt |
All debt is heldincurred directly or indirectly by the Operating Partnership. The REIT itselfParent does not have any indebtedness, but guarantees the unsecured debt of the Operating Partnership. We generally do not guarantee the debt issued by non-wholly ownednon-wholly-owned subsidiaries.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Our debt consisted of the following as ofat December 31 (dollars in thousands):
2012 | 2011 | 2014 | 2013 | |||||||||||||||||||||||||||||
Weighted Average Interest Rate (1) | Amount Outstanding (2) | Weighted Average Interest Rate (1) | Amount Outstanding | Weighted Average Interest Rate (1) | Amount Outstanding (2) | Weighted Average Interest Rate (1) | Amount Outstanding | |||||||||||||||||||||||||
Credit Facilities | 1.5 % | $ | 888,966 | 2.2 % | $ | 936,796 | ||||||||||||||||||||||||||
Credit facilities | - % | $ | - | 1.2% | $ | 725,483 | ||||||||||||||||||||||||||
Senior notes | 5.6 % | 5,223,136 | 6.3 % | 4,772,607 | 3.6% | 6,076,920 | 4.5% | 5,357,933 | ||||||||||||||||||||||||
Exchangeable senior notes | 4.6 % | 876,884 | 4.8 % | 1,315,448 | 3.3% | 456,766 | 3.3% | 438,481 | ||||||||||||||||||||||||
Secured mortgage debt | 4.0 % | 3,625,908 | 4.7 % | 1,725,773 | 6.1% | 1,050,591 | 5.6% | 1,696,597 | ||||||||||||||||||||||||
Secured mortgage debt of consolidated entities | 4.4 % | 450,923 | 4.5 % | 1,468,637 | 2.5% | 1,207,106 | 4.7% | 239,992 | ||||||||||||||||||||||||
Other debt of consolidated entities (3) | 4.8 % | 67,749 | 5.3 % | 775,763 | ||||||||||||||||||||||||||||
Term loans | 1.3% | 572,730 | 1.7% | 535,908 | ||||||||||||||||||||||||||||
Other debt | 1.8 % | 657,228 | 2.4 % | 387,384 | 6.2% | 16,086 | 6.2% | 16,822 | ||||||||||||||||||||||||
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Totals | 4.4 % | $ | 11,790,794 | 5.1 % | $ | 11,382,408 | 3.6% | $ | 9,380,199 | 4.2% | $ | 9,011,216 |
(1) | The interest rates presented represent the effective interest rates (including amortization of the non-cash premiums or discount). |
(2) | Included in the outstanding balances are borrowings denominated in non-U.S. |
(3) |
(4) |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Debt is due |
The |
During 2011 and 2010, we repurchased certain senior and exchangeable senior notes outstanding, and also repaid certain secured mortgage debt in Japan. The original principal amount of the debt activity during 2011 and 2010 was $894.5 million and $3.0 billion, respectively, creating a gain of less than $1.0 million and a loss of $201.5 million in 2011 and 2010, respectively.
Credit Facilities
We have a global senior credit facility (“Global(the “Global Facility”), fromunder which fundswe may be drawndraw in U.S. dollar,dollars, euro, Japanese yen, British poundpounds sterling and Canadian dollardollars on a revolving basis. The loans cannot exceed $1.7In June 2014, the Global Facility was amended to increase the availability to $2.5 billion (subject to currency fluctuations). We may increase the Global Facility to $2.7fluctuations, approximately $2.4 billion subject to currency fluctuations and obtaining additional lender commitments.at December 31, 2014). The Global Facility is scheduled to mature on June 3, 2015, butJuly 11, 2017; however, we may at our option andextend the maturity date twice, by six months each, subject to the satisfaction of certain conditions and payment of an extension fee, extend the maturity date to June 3, 2016.fees. Pricing under the Global Facility, including the spread over LIBOR, facility fees and letter of credit fees, varies based upon the public debt ratings of the Operating Partnership. The Global Facility contains customary representations, covenants and defaults (including a cross-acceleration to other recourse indebtedness of more than $50 million).
We also have a ¥36.5¥45 billion (approximately $424.0($376.2 million at December 31, 2012)2014) Japanese yen revolver (the “Revolver”). The Revolver matures on March 1, 2014, but we may, at our option and subject with the ability to the satisfaction of customary conditions and payment of an extension fee, extend the maturity dateincrease to February 27, 2015. We may increase availability under the Revolver to an amount not exceeding ¥56.5 billion (approximately $656.0($472.3 million at December 31, 2012)2014) subject to obtaining additional lender commitments. Pricing under the Revolver iswas consistent with the Global Facility pricing.at December 31, 2014. The Revolver contains certain customary representations, covenants and defaults that are substantially the same as the corresponding provisions of the Global Facility.
We refer to the Global Facility and the Revolver, collectively, as our “Credit Facilities”.Facilities.”
CommitmentsIn the first quarter of 2013, we entered into a $500 million bridge loan under which we could borrow in U.S. dollar, euro, or yen. We borrowed ¥20 billion ($215.7 million) under the bridge loan to make our initial investment in our co-investment venture in Japan. In connection with the contribution of properties to this venture, we paid the borrowings outstanding on this bridge loan and availability underterminated the facility.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Information about our Credit Facilities wereat December 31 was as follows (dollars in(in millions):
2012 | 2011 | 2010 | 2014 | 2013 | 2012 | |||||||||||||||||||
For the years ended December 31: | ||||||||||||||||||||||||
Weighted average daily interest rate | 1.6 % | 2.7 % | 2.5 % | 1.1 % | 1.7 % | 1.6 % | ||||||||||||||||||
Weighted average daily borrowings | $ | 815.2 | $ | 870.9 | $ | 501.1 | $ | 182 | $ | 789 | $ | 815 | ||||||||||||
Maximum borrowings outstanding at any month-end | $ | 1,633.9 | $ | 2,368.1 | $ | 1,010.2 | $ | 742 | $ | 1,325 | $ | 1,634 | ||||||||||||
As of December 31: | ||||||||||||||||||||||||
Aggregate borrowing capacity | $ | 2,118.3 | $ | 2,184.6 | $ | 1,601.5 | ||||||||||||||||||
At December 31: | ||||||||||||||||||||||||
Aggregate lender - commitments | $ | 2,742 | $ | 2,451 | $ | 2,118 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Borrowings outstanding | $ | 888.9 | $ | 934.9 | $ | 520.1 | - | 726 | 889 | |||||||||||||||
Outstanding letters of credit | $ | 68.0 | $ | 85.0 | $ | 88.2 | 35 | 73 | 68 | |||||||||||||||
Aggregate remaining capacity available | $ | 1,161.4 | $ | 1,164.7 | $ | 993.2 | ||||||||||||||||||
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Current availability | $ | 2,707 | $ | 1,652 | $ | 1,161 |
Senior Notes
The senior unsecured notes are issued by the Operating Partnership and guaranteed by the REIT.Parent. Our obligations under the senior notes are effectively subordinated in certain respects to any of our debt that is secured by a lien on real property, to the extent of the value of such real property. The senior notes require interest payments be made quarterly, semi-annually or annually. All of the senior and other notes are redeemable at any time at our option, subject to certain prepayment penalties. Such redemption and other terms are governed by the provisions of indenture agreements, various note purchase agreements and/or trust deeds.
During the years ended December 31, we issued the following senior notes (dollars and a trust deed.euros in thousands):
2014 | Principal Amount | Interest Rate | Effective Interest Rate | Maturity Date | ||||||||||||||||
February 2014 (1) | € | 700,000 | $ | 959,420 | 3.375% | 3.52% | February 2024 | |||||||||||||
June 2014 (1) | € | 500,000 | $ | 680,550 | 3.000% | 3.10% | June 2026 | |||||||||||||
October 2014 (1) | € | 600,000 | $ | 756,420 | 1.375% | 1.40% | October 2020 |
2013 | Principal Amount | Interest Rate | Effective Interest Rate | Maturity Date | ||||||||||||||||
August 2013 | $ | 400,000 | 2.750% | 2.76% | February 2019 | |||||||||||||||
August 2013 | $ | 850,000 | 4.250% | 4.28% | August 2023 | |||||||||||||||
November 2013 | $ | 500,000 | 3.350% | 3.35% | February 2021 | |||||||||||||||
December 2013 (1) | € | 700,000 | $ | 950,500 | 3.000% | 3.08% | January 2022 |
(1) | This debt is denominated in euro and the exchange rate used to calculate into U.S. dollar was the effective rate at the date of the transaction. |
Exchangeable Senior Notes
On March 16, 2010,At December 31, 2014, we issuedhad $460.0 million of 3.3%3.25% exchangeable senior notes maturing inthat mature on March 15, 2015 (“2010 Exchangeable Notes”). The 2010 Exchangeable Notes are exchangeable at any time by holders at an initial conversion rate of 25.8244 shares of our common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $38.72 per share, subject to adjustment upon the occurrence of certain events. The holders of the notes have the right to require us to repurchase their notes for cash at any time on or prior to the maturity date upon a
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
change in control or a termination of trading (each as defined in the notes). Due to the terms of the 2010 Exchangeable Notes, including that a conversion must be settled in common stock, the accounting for these notes is different than the exchangeable senior notes we issued in 2007 and 2008. The 2010 Exchangeable Notes are reflected at the issuance amount and interest is recognized basedtrading. Based on the stated coupon rate and the amortization of the cash discount.
We also issued three series of exchangeable senior notes in 2007 and 2008 and refer to them collectively as the “2007 and 2008 Exchangeable Notes”. The 2007 and 2008 Exchangeable Notes are senior obligations of Prologis and are exchangeable, under certain circumstances, for cash, our common stock or a combination of cash and our common stock, at our option, at a conversion rate per $1,000 of principal amount of the notes of 5.8752 shares for the March 2007 issuance, 5.4874 shares for the November 2007 issuance and 5.8569 shares for the May 2008 issuance. The initial conversion price ($170.21 for the March 2007 issuance, $182.24 for the November 2007 issuance and $170.74 for the May 2008 issuance) represented a premium of approximately 20% over the closing price of our common stock at the date of first sale and is subject to adjustment under certain circumstances. The 2007 and 2008 Exchangeable Notes are redeemable at our option beginning in 2012 and 2013, respectively, for the principal amount plus accrued and unpaid interest and at any time prior to maturity to the extent necessary to preserve our status as a real estate investment trust. Holders of the 2007 and 2008 Exchangeable Notes have the right to require us to repurchase their notes for cash on specific dates approximately every five years beginning in 2012 and 2013, respectively, and at any time prior to their maturity upon certain limited circumstances. Therefore, we have reflected these amounts in 2013 in the schedule of debt maturities below based on the first put date and we amortized the discount through these dates.
In April 2012, we redeemed $448.9 million of the exchangeable notes that were issued in March 2007, which was when the holders had the right to require us to repurchase their notes for cash. In January 2013, we redeemed $141.4 million of the exchangeable notes issued in November 2007.
Interest expense related to our 2007 and 2008 exchangeable notes for the years ended December 31 included the following components (in thousands):
2012 | 2011 | 2010 | ||||||||||
Coupon rate | $ | 14,312 | $ | 24,810 | $ | 37,562 | ||||||
Amortization of discount | 18,425 | 32,393 | 48,128 | |||||||||
Amortization of deferred loan costs | 1,280 | 2,071 | 2,691 | |||||||||
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Interest expense | $ | 34,017 | $ | 59,274 | $ | 88,381 | ||||||
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Effective interest rate | 4.6 % | 4.8 % | 4.9 % |
The unamortized discount at December 31, 2012 and 2011 was $4.2 million and $22.6 million, respectively. The carrying amount of the equity component is determined by deducting the fair value of the debt component from the initial proceeds of the exchangeable debt instrument as a whole. Additional paid-in capital under the conversion option was $381.5 million at December 31, 2012 and 2011.
While we have the legal right to settle the conversion in either cash or stock, we intend to settle the principal balance of the 2007 and 2008 Exchangeable Notes in cash. As stated above, the 2010 Exchangeable Notes are required to be settled in common stock. Based on current conversion rates, 2.8 million and2014, 11.9 million shares would be required to settle the principal amount in stock for the 2007 and 2008 Exchangeable Notes and the 2010 Exchangeable Notes, respectively.Notes. The conversion of the exchangeable notesExchangeable Notes into stock, and the corresponding adjustment to interest expense, are included in our computation of diluted earnings per share/unit, unless the impact is anti-dilutive. DuringFor the years ended December 31, 2014, 2013 and 2012, 2011, and 2010, the impact of these notes was anti-dilutive.
The exchangeable senior notes are issued by the Operating Partnership and are exchangeable into common stock of the REIT. The accounting for the exchangeable senior notes requires us to separate the fair value ofWe recognized unrealized losses on the derivative instrument (exchange feature) fromassociated with exchangeable debt of $10.3 million, $1.2 million and $22.3 million for the debt instrument and account for it separately as a derivative contract. We have determined that the exchangeable notes issued in 2010 are the only exchangeable notes where the fair value of the derivative is not zero atyears ended December 31, 2012. At each reporting period, we adjust the derivative instrument to fair value with the resulting adjustment being recorded in earnings asForeign Currency2014, 2013 and Derivative Gains (Losses), Net.2012, respectively. The fair value of the derivative associated with our exchangeable notesthe Exchangeable Notes was a liability of $39.8$51.3 million and $17.5$41.0 million at December 31, 20122014 and December 31, 2011,2013, respectively. We recognized an unrealized loss of $22.3 million and an unrealized gain of $45.0 million for the years ended December 31, 2012 and 2011, respectively.
Secured Mortgage Debt
TMK bonds are a financing vehicle in Japan for special purpose companies known as TMKs. In 2012, we issued ¥36.6 billion ($424.5 million as of December 31, 2012) of new TMK bonds with maturity dates ranging from December 2013 to May 2019 with interest rates ranging from 0.8% to 1.4% and secured by nine properties with an undepreciated cost at December 31, 2012 of $767.3 million.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Secured Mortgage Debt and Secured Mortgage Debt of Consolidated Entities
In addition, in 2012, we amended our existing TMK bonds increasing amountsare a financing vehicle in Japan for special purposes companies known as TMKs. In 2013, we issued ¥10.6 billion ($106.4 million) of new TMK bonds and paid off or transferred substantially all of our outstanding by ¥12.4 billion ($144.5 million as ofTMK bonds. At December 31, 2012)2013, we had one TMK bond outstanding for ¥1.5 billion ($14.3 million). As a result, the rangeIn 2014, we issued ¥7.2 billion ($70.7 million) of maturities on thesenew TMK bonds changed from 2012 to 2014 to a rangeand paid off or transferred all of December 2014 to April 2018, and the interest rates were reduced from a range of 1.8% to 4.0% to a range of 1.0% to 1.8%.our outstanding TMK bonds.
In connection with the Co-Investment Venture Acquisitionsacquisitions of a controlling interest in 2012, along with one other land acquisition,certain of our co-investment ventures in 2014 and 2013, we assumed secured mortgage debt of $1.0$1.2 billion that is secured by land and 107 properties with$190.4 million, respectively. See Note 3 for more information on these transactions.
Term Loans
In June 2014, we terminated our existing senior term loan agreement and entered into a total undepreciated cost of $1.3new agreement (the “Euro Term Loan”) under which loans can be obtained in U.S. dollars, euro, Japanese yen, and British pounds sterling in an aggregate amount not to exceed €500 million ($607.1 million at December 31, 2014). We may pay down and re-borrow under the Euro Term Loan and increase the borrowings up to €1.0 billion ($1.2 billion at December 31, 2012.2014), subject to obtaining additional lender commitments. The interest rate on the Euro Term Loan is LIBOR plus 98 basis points and the loan is scheduled to mature in June 2017; however, we may extend the maturity date twice, by one year each, subject to the satisfaction of certain conditions and payment of an extension fee. The Euro Term Loan has borrowings of €190 million ($230.7 million) at December 31, 2014.
Other Debt
On February 2, 2012,In May 2014, we entered into a seniorJapanese yen term loan agreement where(“Yen Term Loan”), under which we may obtain loans in an aggregate amount not to exceed €487.5 million¥40.9 billion ($648.5342.1 million at December 31, 2012)2014). The loans can be obtained in U.S. dollar, euro, Japanese yen, and British pound sterling. We may increase the borrowings to approximately €987.5¥51.1 billion ($427.2 million ($1.3 billion at December 31, 2012)2014), subject to obtaining additional lender commitments. The loan agreementYen Term Loan is scheduled to mature on February 2, 2014, but we may extend the maturity date three times at our option, in each case up to one year, subject to satisfaction of certain conditions and payment of an extension fee. We fully drew the senior term loan and used the proceeds to pay off two term loans assumed in connection with the Merger2021, and the remainder to pay down borrowings on our Credit Facilities.interest rate is yen LIBOR plus 120 basis points. The Yen Term Loan was fully drawn at December 31, 2014.
Debt Covenants
We have approximately $6.1$6.5 billion of senior notes and exchangeable senior notes outstanding as ofat December 31, 2012. The senior notes2014 that were issued under twothree separate indentures, as supplemented, and are subject to certain financial covenants. The exchangeable senior notes, as well as approximately $180.7 million of notes that were not exchanged for Prologis senior notes at the time of the Merger, are not subject to financial covenants.
We are also subject to financial covenants under our Credit Facilities and certain secured mortgage debt.
As of At December 31, 2012,2014, we were in compliance with all of our debt covenants.
Long-Term Debt Maturities
Principal payments due on our consolidated debt, duringfor each ofyear through the years in the ten-year period ending December 31, 20222024, and thereafter arewere as follows at December 31, 2014 (in millions):
Prologis | Consolidated Entities’ | Total Consolidated | Prologis | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured | Secured Mortgage | Unsecured | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity | Senior Debt | Exchangeable Notes | Credit Facilities | Other Debt | Total | Senior | Exchangeable Notes | Credit Facilities | Term Loans Other Debt | Secured Debt | Total | Consolidated Debt | Total Debt | |||||||||||||||||||||||||||||||||||||||||||||||||||
2013(2)(3) | $ | 376 | $ | 484 | $ | - | $ | - | $ | 410 | $ | 1,270 | $ | 207 | $ | 1,477 | ||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 916 | - | 420 | 640 | 981 | 2,957 | 65 | 3,022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015(3) | 287 | 460 | 469 | 1 | 205 | 1,422 | 25 | 1,447 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015(1) | $ | - | $ | 460 | $ | - | $ | 1 | $ | 24 | $ | 485 | $ | 114 | $ | 599 | ||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 640 | - | - | 1 | 318 | 959 | 127 | 1,086 | - | - | - | 1 | 294 | 295 | 446 | 741 | ||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 700 | - | - | 1 | 544 | 1,245 | 4 | 1,249 | 377 | - | - | 232 | 156 | 765 | 206 | 971 | ||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 900 | - | - | 1 | 309 | 1,210 | 74 | 1,284 | 262 | - | - | 1 | 111 | 374 | 166 | 540 | ||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 647 | - | - | 1 | 501 | 1,149 | 2 | 1,151 | 693 | - | - | 1 | 285 | 979 | 1 | 980 | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 677 | - | - | 1 | 9 | 687 | 2 | 689 | 1,096 | - | - | 1 | 6 | 1,103 | 189 | 1,292 | ||||||||||||||||||||||||||||||||||||||||||||||||
2021 | - | - | - | 1 | 155 | 156 | 2 | 158 | 500 | - | - | 342 | 11 | 853 | 1 | 854 | ||||||||||||||||||||||||||||||||||||||||||||||||
2022 | - | - | - | - | 7 | 7 | 3 | 10 | 850 | - | - | 1 | 7 | 858 | 1 | 859 | ||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 850 | - | - | 1 | 7 | 858 | 1 | 859 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 850 | - | - | 1 | 129 | 980 | 1 | 981 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Thereafter | - | - | - | 10 | 137 | 147 | 5 | 152 | 607 | - | - | 7 | - | 614 | 3 | 617 | ||||||||||||||||||||||||||||||||||||||||||||||||
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Subtotal | $ | 5,143 | $ | 944 | $ | 889 | $ | 657 | $ | 3,576 | $ | 11,209 | $ | 516 | $ | 11,725 | 6,085 | 460 | - | 589 | 1,030 | 8,164 | 1,129 | 9,293 | ||||||||||||||||||||||||||||||||||||||||
Unamortized (discounts) premiums, net | 80 | (67) | - | - | 50 | 63 | 3 | 66 | (8) | (3) | - | - | 20 | 9 | 78 | 87 | ||||||||||||||||||||||||||||||||||||||||||||||||
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Total | $ | 5,223 | $ | 877 | $ | 889 | $ | 657 | $ | 3,626 | $ | 11,272 | $ | 519 | $ | 11,791 | $ | 6,077 | $ | 457 | $ | - | $ | 589 | $ | 1,050 | $ | 8,173 | $ | 1,207 | $ | 9,380 |
(1) |
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PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Interest Expense
Interest expense from continuing operations included the following components for the years ended December 31 (in thousands):
2012 | 2011 | 2010 | 2014 | 2013 | 2012 | |||||||||||||||||||
Gross interest expense | $ | 580,787 | $ | 500,019 | $ | 435,289 | $ | 377,666 | $ | 471,923 | $ | 578,518 | ||||||||||||
Amortization of discount (premium), net | (36,687) | 228 | 47,136 | |||||||||||||||||||||
Amortization of premium, net | (21,440) | (39,015) | (36,687) | |||||||||||||||||||||
Amortization of deferred loan costs | 16,781 | 20,476 | 32,402 | 14,116 | 14,374 | 16,781 | ||||||||||||||||||
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560,881 | 520,723 | 514,827 | ||||||||||||||||||||||
Interest expense before capitalization | 370,342 | 447,282 | 558,612 | |||||||||||||||||||||
Capitalized amounts | (53,397) | (52,651) | (53,661) | (61,457) | (67,955) | (53,397) | ||||||||||||||||||
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Net interest expense | $ | 507,484 | $ | 468,072 | $ | 461,166 | $ | 308,885 | $ | 379,327 | $ | 505,215 | ||||||||||||
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Total cash paid for interest, net of amounts capitalized | $ | 258,441 | $ | 426,528 | $ | 546,627 |
Early Extinguishment of Debt
In an effort to reduce our borrowing costs and extend our debt maturities, we repurchased certain debt, principally outstanding senior notes and secured mortgage debt, generally with proceeds from the issuance of senior notes outlined above and an equity offering in April 2013 (as described in Note 10). As a result, we may recognize a gain or loss represented by the difference between the recorded debt (net of premiums and discounts and including related debt costs) and the consideration we paid to retire the debt, including fees.
A summary of the activity related to the repurchase of debt and net loss on early extinguishment of debt is as follows (in millions):
2014 | 2013 | |||||||
Repurchase of senior notes | $ | 1,290 | $ | 2,142 | ||||
Repurchase of secured mortgage debt | $ | 528 | $ | 1,571 | ||||
Loss on early extinguishment of debt | $ | 165 | $ | 277 |
The amountrepurchase of interest paid in cash, net of amounts capitalized, for the years ended December 31, 2012, 2011 and 2010debt activity was $546.6 million, $467.4 million and $381.8 million, respectively.not considered significant during 2012.
Stockholders’ Equity of |
Shares Authorized
At December 31, 2012,2014, 1.1 billion shares were authorized to be issued by the REIT,Parent, of which 1.0 billion shares represent common stock. The Board may, without stockholder approval, classify or reclassify any unissued shares of our stock from time to time by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications and terms or conditions of redemption of such shares.
Common Stock
In 2011, in connection with the Merger, holders of ProLogis common shares received 0.4464 of a newly issued share of AMB common stock, ProLogis became a subsidiary of AMB and AMB changed its name to Prologis, Inc. Because ProLogis was the accounting acquirer (asAs discussed in Note 3), the historical ProLogis shares outstanding were adjusted by the Merger4, NBIM exercised a warrant and paid $213.8 million in exchange ratio and restated. As of the Merger date, 169.6for six million shares were added to reflect the outstanding shares of common stockstock.
In the fourth quarter of AMB. In addition, in late June 20112014, we issued 34.53.3 million shares of common stock generatingunder our at-the-market program, which generated $140.1 million in net proceeds. We had an equity distribution agreement that allowed us to sell up to $750 million aggregate gross sales proceeds of $1.1 billion. Asshares of December 31, 2012,common stock in this program, through two designated agents, who earn a fee of up to 2% of the gross proceeds, as agreed to on a transaction-by-transaction basis. On February 5, 2015, we had 461.8entered into a new equity distribution agreement that replaced and superseded the previous agreement. The new agreement allows us to sell up to $750 million aggregate gross sales proceeds of shares of common stock in this program, through six designated agents, who earn a fee of up to 2% of the gross proceeds, as agreed to on a transaction-by-transaction basis.
On April 30, 2013, we completed a public offering of 35.65 million shares of common stock outstanding.at a price of $41.60 per share, generating approximately $1.4 billion in net proceeds.
We have sold or issued sharesUnder the 2012 Long-Term Incentive Plan (the “LTIP”), certain of our employees and outside directors are able to participate in equity-based compensation plans. Under this plan, we received gross proceeds for the issuance of common stock under various common stock plans, including stock-based compensation plans as follows:of $25.8 million, $22.4 million and $31.0 million, for the years ended December 31, 2014, 2013 and 2012, respectfully. See Note 13 for additional information on this plan.
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PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Under the common stock plans discussed above, we received gross proceeds of $31.0 million, $0.7 million and $30.8 million for the year ended December 31, 2012, 2011 and 2010, respectively, adjusted by the Merger exchange ratio of 0.4464 and issued shares of common stock for the years ended December 31, as follows (in thousands):
2012 | 2011 | 2010 | ||||||||||
Incentive Plan and Outside Trustees Plan | 2,258 | 793 | 617 | |||||||||
1999 Dividend Reinvestment Plan | - | - | 54 | |||||||||
Controlled Offering Program | - | - | 978 | |||||||||
Employee Share Plan | - | - | 76 | |||||||||
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Total | 2,258 | 793 | 1,725 |
Limited partnership units were redeemed for 0.1 million and 0.1 million common shares in 2012 and 2010, respectively. We did not redeem any limited partnership units in 2011. See Note 13 for more details.
Preferred Stock
At December 31, 2012,2014 and 2013, we had sevenone series of preferred stock outstanding. Holders of eachoutstanding, the series ofQ preferred stock, with a liquidation preference of $50 per share, a par value of $0.01 and a dividend rate of 8.54%, which will be redeemable at our option on or after November 13, 2026. Holders have, subject to certain conditions, limited voting rights and all holders are entitled to receive cumulative preferential dividends based upon each series’ respective liquidation preference. The dividends for Series Q, R and S are payable quarterly in arrears on the last day of March, June, September, and December. The dividends for Series L, M, O and P are payable quarterly in arrears on the 15th day of April, July, October and January.each quarter-end. Dividends on preferred stock are payable when, and if, they have been declared by the Board, out of funds legally available for the payment of dividends. After
During the respectivesecond quarter of 2014, we repurchased approximately 435 thousand shares of Series Q preferred stock and recognized a loss on preferred stock redemption dates, eachof $6.5 million, which primarily represented the difference between the repurchase price and the carrying value of the preferred stock net of original issuance costs. In the second quarter of 2013, we redeemed all of the outstanding series L, M, O, P, R and S preferred stock and recognized a loss of $9.1 million in the first quarter of 2013, when we notified the holders of our intent to redeem these series of preferred stock can be redeemed at our option. The cash redemption price (other than the portion consisting of accrued and unpaid dividends) with respect to Series Q Preferred Stock is payable solely out of the cumulative sales proceeds of our other capital stock, which may include stock of other series of preferred stock. With respect to the payment of dividends, each series of preferred stock ranks on parity with the other series of preferred stock.
We had the following preferred stock issued and outstanding as of December 31 (in thousands):
2012 | 2011 | |||||||
Series L | $ | 49,100 | $ | 49,100 | ||||
Series M | 57,500 | 57,500 | ||||||
Series O | 75,300 | 75,300 | ||||||
Series P | 50,300 | 50,300 | ||||||
Series Q | 100,000 | 100,000 | ||||||
Series R | 125,000 | 125,000 | ||||||
Series S | 125,000 | 125,000 | ||||||
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Total preferred stock | $ | 582,200 | $ | 582,200 |
Terms and conditions of our preferred stock outstanding at December 31, 2012 was as follows (dollars and shares in thousands):
Series of Preferred Stock | Shares Outstanding | Liquidation Preference | Par Value | Dividend Rate | Optional Redemption Date | |||||||||||
Series L | 2,000 | $ | 50,000 | $ | 0.01 | 6.50 % | (a) | |||||||||
Series M | 2,300 | 57,500 | $ | 0.01 | 6.75 % | (a) | ||||||||||
Series O | 3,000 | 75,000 | $ | 0.01 | 7.00 % | (a) | ||||||||||
Series P | 2,000 | 50,000 | $ | 0.01 | 6.85 % | (a) | ||||||||||
Series Q | 2,000 | 100,000 | $ | 0.01 | 8.54 % | 11/13/26 | ||||||||||
Series R | 5,000 | 125,000 | $ | 0.01 | 6.75 % | (a) | ||||||||||
Series S | 5,000 | 125,000 | $ | 0.01 | 6.75 % | (a) | ||||||||||
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21,300 | $ | 582,500 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Ownership Restrictions
For us to qualify as a real estate investment trust under the Internal Revenue Code,REIT, five or fewer individuals may not own more than 50% of the value of our outstanding stock at any time during the last half of our taxable year. Therefore, our charter restricts beneficial ownership (or ownership generally attributed to a person under the real estate investment trustREIT tax rules, (i) by a person, or persons acting as a group, of each of our issued and outstanding common series Land preferred stock series M preferred stock, series O preferred stock and series P preferred stock, or (ii) series Q preferred stock, series R preferred stock or series S preferred stock that together with all other capital stock owned or deemed owned by that person, would cause that person to own or be deemed to own more than 9.8% (by value or number of shares, whichever is more restrictive) of our issued and outstanding capital stock. Further, subject to certain exceptions, no person shall at any time directly or indirectly acquire ownership of more than 25% of any of the series Q preferred stock, series R preferred stock and series S preferred stock. These provisions assist us in protecting and preserving our real estate investment trustREIT status and protect the interests of stockholders in takeover transactions by preventing the acquisition of a substantial block of outstanding shares of stock.
Shares of stock owned by a person or group of persons in excess of these limits are subject to redemption by us. The provision does not apply where a majority of the Board, in its sole and absolute discretion, waives such limit after determining that theour status of us as a real estate investment trustREIT for federal income tax purposes will not be jeopardized or the disqualification of us as a real estate investment trustour REIT status is advantageous to our shareholders.
PROLOGIS, INC. AND PROLOGIS, L.P.stockholders.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)Dividends
Dividends
In 2012, 2011 and 2010, we paid all of our dividends in cash. The following summarizes the taxability of our common and preferred stock dividends for the years ended December 31:
2012 (1) | 2011 | 2010 | ||||||||||
Common Stock: (2) | ||||||||||||
Ordinary income | $ | 0.38 | $ | 0.07 | $ | - | ||||||
Qualified dividend | 0.20 | 0.01 | - | |||||||||
Capital gains | 0.54 | 0.84 | 1.25 | |||||||||
Return of capital | - | 0.14 | - | |||||||||
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Total distribution | $ | 1.12 | $ | 1.06 | $ | 1.25 | ||||||
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Preferred Stock - Series L (3): | ||||||||||||
Ordinary income | $ | 0.55 | 0.15 | |||||||||
Qualified dividend | 0.28 | - | ||||||||||
Capital gains | 0.80 | 1.07 | ||||||||||
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Total dividend | $ | 1.63 | 1.22 | N/A | ||||||||
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Preferred Stock - Series M (3): | ||||||||||||
Ordinary income | $ | 0.57 | 0.15 | |||||||||
Qualified dividend | 0.30 | - | ||||||||||
Capital gains | 0.82 | 1.11 | ||||||||||
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Total dividend | $ | 1.69 | 1.26 | N/A | ||||||||
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Preferred Stock - Series O (3): | ||||||||||||
Ordinary income | $ | 0.59 | 0.16 | |||||||||
Qualified dividend | 0.31 | - | ||||||||||
Capital gains | 0.85 | 1.15 | ||||||||||
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Total dividend | $ | 1.75 | 1.31 | N/A | ||||||||
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Preferred Stock - Series P (3): | ||||||||||||
Ordinary income | $ | 0.58 | 0.15 | |||||||||
Qualified dividend | 0.30 | - | ||||||||||
Capital gains | 0.83 | 1.13 | ||||||||||
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Total dividend | $ | 1.71 | 1.28 | N/A | ||||||||
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Preferred Stock - Series Q (4): | ||||||||||||
Ordinary income | $ | 1.44 | $ | 0.38 | $ | - | ||||||
Qualified dividend | 0.75 | 0.04 | - | |||||||||
Capital gains | 2.08 | 3.85 | 4.27 | |||||||||
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Total dividend | $ | 4.27 | $ | 4.27 | $ | 4.27 | ||||||
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Preferred Stock - Series R (4): | ||||||||||||
Ordinary income | $ | 0.57 | $ | 0.15 | $ | - | ||||||
Qualified dividend | 0.30 | 0.02 | - | |||||||||
Capital gains | 0.82 | 1.52 | 1.69 | |||||||||
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Total dividend | $ | 1.69 | $ | 1.69 | $ | 1.69 | ||||||
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Preferred Stock - Series S (4): | ||||||||||||
Ordinary income | $ | 0.57 | $ | 0.15 | $ | - | ||||||
Qualified dividend | 0.30 | 0.02 | -�� | |||||||||
Capital gains | 0.82 | 1.52 | 1.69 | |||||||||
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Total dividend | $ | 1.69 | $ | 1.69 | $ | 1.69 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
In order to comply with the real estate investment trustREIT requirements of the Internal Revenue Code, we are generally required to make common and preferred stock distributionsdividends (other than capital gain distributions) to our stockholders in amounts that together at least equal to (i) the sum of (a) 90% of our “REIT taxable income” computed without regard to the dividends paid deduction and net capital gains and (b) 90% of the net income (after tax), if any, from foreclosure property, minus (ii) certain excess non-cash income. Our common stock dividenddistribution policy is to distribute a percentage of our cash flow to ensurethat ensures that we will meet the distribution requirements of the Internal Revenue Code while allowingand that allows us to also retain cash to meet other needs, such as capital improvements and other investment activities.
Our tax return for the year ended December 31, 2014 has not been filed. The taxability information presented for our dividends paid in 2014 is based upon management’s estimate. Our tax returns for open tax years have not been examined by the Internal Revenue Service, other than those discussed in Note 15. Consequently, the taxability of dividends is subject to change.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
In 2014, 2013 and 2012, we paid all of our dividends in cash. The following summarizes the taxability of our common and preferred stock dividends for the years ended December 31:
2014 (1)(2) | 2013 | 2012 | ||||||||||
Common Stock: | ||||||||||||
Ordinary income | $ | 0.29 | $ | - | $ | 0.38 | ||||||
Qualified dividend | 0.41 | - | 0.20 | |||||||||
Capital gains | 0.62 | 1.12 | 0.54 | |||||||||
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Total distribution | $ | 1.32 | $ | 1.12 | $ | 1.12 | ||||||
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Preferred Stock - Series L (3): | ||||||||||||
Ordinary income | $ | - - | $ | - | $ | 0.55 | ||||||
Qualified dividend | - - | - | 0.28 | |||||||||
Capital gains | - - | 0.41 | 0.80 | |||||||||
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Total dividend | $ | - - | $ | 0.41 | $ | 1.63 | ||||||
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Preferred Stock - Series M, R and S (3): | ||||||||||||
Ordinary income | $ | - - | $ | - | $ | 0.57 | ||||||
Qualified dividend | - - | - | 0.30 | |||||||||
Capital gains | - - | 0.42 | 0.82 | |||||||||
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Total dividend | $ | - - | $ | 0.42 | $ | 1.69 | ||||||
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Preferred Stock - Series O (3): | ||||||||||||
Ordinary income | $ | - - | $ | - | $ | 0.59 | ||||||
Qualified dividend | - - | - | 0.31 | |||||||||
Capital gains | - - | 0.44 | 0.85 | |||||||||
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Total dividend | $ | - - | $ | 0.44 | $ | 1.75 | ||||||
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Preferred Stock - Series P (3): | ||||||||||||
Ordinary income | $ | - - | $ | - | $ | 0.58 | ||||||
Qualified dividend | - - | - | 0.30 | |||||||||
Capital gains | - - | 0.43 | 0.83 | |||||||||
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Total dividend | $ | - - | $ | 0.43 | $ | 1.71 | ||||||
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Preferred Stock - Series Q: | ||||||||||||
Ordinary income | $ | 0.71 | $ | - | $ | 1.44 | ||||||
Qualified dividend | 1.01 | - | 0.75 | |||||||||
Capital gains | 2.55 | 4.27 | 2.08 | |||||||||
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Total dividend | $ | 4.27 | $ | 4.27 | $ | 4.27 |
(1) | Items indicated by ‘- - ‘ are not applicable. |
(2) | Taxability for 2014 is estimated. |
(3) | As discussed above, in April 2013, we redeemed all of the outstanding series L, M, O, P, R and S preferred stock. |
Common stock dividends are characterized for federal income tax purposes as ordinary income, qualified dividend, capital gains, non-taxable return of capital or a combination of the four. Common stock dividends that exceed our current and accumulated earnings and profits (calculated for tax purposes) constitute a return of capital rather than a dividend and generally reduce the stockholder’s basis in the common stock. To the extent that a dividend exceeds both current and accumulated earnings and profits and the stockholder’s basis in the common stock, it will generally be treated as a gain from the sale or exchange of that stockholder’s common stock. At the beginning of each year, we notify our stockholders of the taxability of the common stock dividends paid during the preceding year.
The payment of common stock dividends is dependent upon our financial condition, operating results and real estate investment trust distribution requirements and may be adjusted at the discretion of the Board during the year. A cash dividend of $0.28 per common share for the first quarter of 2013 was declared on February 27, 2013. The dividend will be paid on March 29, 2013 to holders of common shares on March 12, 2013.
Pursuant to the terms of our preferred stock, we are restricted from declaring or paying any dividend with respect to our common stock unless and until all cumulative dividends with respect to the preferred stock have been paid and sufficient funds have been set aside for dividends that have been declared for the relevant dividend period with respect to the preferred stock.
Our tax return for the year ended December 31, 2012 has not been filed. The taxability information presented for our dividends paid in 2012 is based upon management’s estimate. Our tax returns for open tax years have not been examined by the Internal Revenue Service, other than those discussed in Note 17. Consequently, the taxability of dividends is subject to change.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Partners’ Capital of |
For each share of common stock or preferred stock the REIT issues, the Operating Partnership issues a corresponding common or preferred partnership unit, as applicable, to the REIT in exchange for the contribution of the proceeds from the stock issuance. In addition, other third parties own common limited partnership units that make up 0.41% of the common partnership units.
As of December 31, 2012, the Operating Partnership had outstanding 461.8 million common general partnership units, 1.9 million common limited partnership units and 21.3 million preferred general partnership units.
Distributions paid to the common limited partnership units and the taxability of the distributions are similar to the REIT’sParent’s common stock disclosed above.
Noncontrolling Interests |
Operating PartnershipPrologis, L.P.
We report noncontrolling interests related to several entities we consolidate but of which we do not own 100% of the common equity. These entities include threetwo real estate partnerships that have issued limited partnership units to third parties. Depending on the specific partnership agreements, these limited partnership units are exchangeable into shares of ourthe Parent’s common stock (or cash), generally at a rate of one share of common stock to one unit. We evaluated the noncontrolling interests with redemption provisions that permit the issuer to settle in either cash or common stock at the option of the issuer to determine whether temporary or permanent equity classification on the balance sheet is appropriate, including the requirement to settle in unregistered shares, and determined that these units meet the requirements to qualify for presentation as permanent equity. We also consolidate several entities in which we do not own 100% of the equity and the units of the entity are not exchangeable into our common stock.
IfAs discussed in Note 3, we contributebegan consolidating the co-investment venture NAIF in October 2014.
In the first quarter of 2014, we formed a propertynew U.S. co-investment venture, Prologis U.S. Logistics Venture, in which we hold a 55% equity ownership interest and have one partner. The venture is consolidated due to the structure and voting rights of the venture. At closing, the venture acquired from us a portfolio of 66 operating properties aggregating 12.8 million square feet for an aggregate purchase price of $1.0 billion.
In the second quarter of 2013, we acquired our partners’ interest in Prologis Institutional Alliance Fund II (“Fund II”), a consolidated co-investment venture,venture. In connection with this transaction, we paid $245.8 million and issued approximately 805,000 limited partnership units worth $31.3 million in one of our limited partnerships based primarily on appraised values of the propertyproperties. These units are exchangeable into cash or an equal number of shares of our common stock, at our option.
In the second quarter of 2013, we earned a promote from Fund II, of $18.8 million from the fund, which was based on the venture’s cumulative returns of the investors over the life of the venture. Of that amount, $13.5 million represented the third-party investors’ portion and is still reflected as a component ofNoncontrolling Interestin ourthe Consolidated Financial Statements but due to our ownership of less than 100%, there is an increase in noncontrolling interest related to the contributed properties, which represents the cash we receive from our partners.
PROLOGIS, INC. AND PROLOGIS, L.P.Operations.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
REITPrologis, Inc.
The noncontrolling interest of the REITParent includes the noncontrolling interests presented in the Operating Partnership, as well as the common limited partnership units in the Operating Partnership that are not owned by the REIT. AsParent.
During 2013, net earnings attributable to noncontrolling interests was $10.1 million, of December 31,which $0.5 million was a loss from continuing operations and $10.6 million was income from discontinued operations. Amounts allocated to discontinued operations for 2012 the REIT owned 99.59% of the common partnership units of the Operating Partnership.were not considered significant.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following is a summary of the noncontrolling interest and the consolidated entity’s total investment in real estate and debt at December 31 (dollars and units in thousands):
Our Ownership Percentage | Noncontrolling Interest | Total Investment In Real Estate | Debt | |||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||||
Partnerships with exchangeable units (1) | various | various | $ | 44,476 | $ | 11,173 | $ | 826,605 | $ | 827,263 | $ | - | $ | 26,417 | ||||||||||||||||||
Prologis Institutional Alliance Fund II (2) | 28.2 % | 24.1 % | 280,751 | 324,721 | 571,668 | 624,318 | 178,778 | 220,625 | ||||||||||||||||||||||||
Mexico Fondo Logistico (AFORES) (3) | 20.0 % | 20.0 % | 157,843 | 118,580 | 388,960 | 312,914 | 214,084 | 177,000 | ||||||||||||||||||||||||
Brazil Fund (4) | 50.0 % | 50.0 % | 66,494 | 53,186 | - | - | - | - | ||||||||||||||||||||||||
Prologis AMS (5) | 38.6 % | 38.6 % | 59,631 | 83,897 | 160,649 | 211,627 | 63,749 | 77,041 | ||||||||||||||||||||||||
PEPR (6) | 100.0 % | 93.7 % | - | 106,759 | - | 4,047,329 | - | 1,699,587 | ||||||||||||||||||||||||
Other consolidated entities | various | various | 43,930 | 36,906 | 404,825 | 620,052 | 62,061 | 70,140 | ||||||||||||||||||||||||
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Operating Partnership noncontrolling interests | 653,125 | 735,222 | 2,352,707 | 6,643,503 | 518,672 | 2,270,810 | ||||||||||||||||||||||||||
Limited partners in the Operating Partnership (7) | 51,194 | 58,613 | - | - | - | - | ||||||||||||||||||||||||||
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REIT noncontrolling interests | $ | 704,319 | $ | 793,835 | $ | 2,352,707 | $ | 6,643,503 | $ | 518,672 | $ | 2,270,810 |
Our Ownership Percentage | Noncontrolling Interest | Total Investment In Real Estate | Debt | |||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
Partnerships with exchangeable units (1) | various | various | $ | 70,716 | $ | 75,532 | $ | 711,310 | $ | 783,052 | $ | - | $ | - | ||||||||||||||||||
Prologis North American Industrial Fund | 66.1% | N/A | 544,718 | - | 2,771,299 | - | 1,188,836 | - | ||||||||||||||||||||||||
Prologis U.S. Logistics Venture | 55.0% | N/A | 427,307 | - | 1,006,183 | - | - | - | ||||||||||||||||||||||||
Brazil Fund (2) | 50.0% | 50.0% | 68,533 | 65,006 | - | - | - | - | ||||||||||||||||||||||||
Mexico Fondo Logistico (AFORES) (3) | 20.0% | 20.0% | 17,122 | 220,292 | - | 457,006 | - | 191,866 | ||||||||||||||||||||||||
Other consolidated entities | various | various | 31,505 | 56,256 | 307,686 | 370,933 | 18,269 | 48,126 | ||||||||||||||||||||||||
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Prologis, L.P. noncontrolling interests | 1,159,901 | 417,086 | 4,796,478 | 1,610,991 | 1,207,105 | 239,992 | ||||||||||||||||||||||||||
Limited partners in Prologis, L.P. (4) | 48,189 | 48,209 | - | - | - | - | ||||||||||||||||||||||||||
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Prologis, Inc. noncontrolling interests | $ | 1,208,090 | $ | 465,295 | $ | 4,796,478 | $ | 1,610,991 | $ | 1,207,105 | $ | 239,992 |
(1) | At December 31, |
(2) |
We have a 50% ownership interest in and consolidate the Brazil |
In |
At December 31, |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Long-Term Compensation |
In May 2012, the stockholders of the REIT approved the 2012 Long-Term Incentive Plan (the “2012 LTIP”), which replaced all prior active long term incentive plans (“Prior Plans”). After approval of the 2012 LTIP, no furtherLTIP. All outstanding awards could be madegranted under the Prior Plans but outstanding awards previously granted under Prior Plans willprevious plans remain outstanding in accordance with their terms. The number of shares of common stock that may be issued under the 2012 LTIP is equalprovides for grants of awards to 12.0 million plus the aggregate number of shares available for issuance under the Prior Plans at the time the 2012 LTIP was approved, resulting in a total of 27.2 million shares that have been reserved for issuance under the 2012 LTIP. As of December 31, 2012, there were 25.9 million shares of common stock available for future issuance at December 31, 2012 of which 9.5 million are subject to outstanding awards.
Officers,officers, directors, employees, and other employees, consultants and independent contractors of the REITParent or its subsidiaries are eligible to become participants in the 2012 LTIP.subsidiaries. Awards made under the 2012 LTIP can be in the form of stock options (non-qualified options and incentive stock options), stock appreciation rights (“SAR”),and full value awards (restricted stock, restricted stock units (“RSUs”) and performance based shares)performance-based shares, restricted Operating Partnership units (“LTIP Units”) and cash incentive awards.awards). No participant can be granted more than 1.5 million sharesawards under the 2012 LTIP in any one calendar year. Awards canmay be made under the 2012 LTIP until it is terminated by the Board or until the ten-year anniversary of the effective date of the plan.
In 2011, in connection with the Merger, each outstanding award of ProLogis was converted into 0.4464 of a newly issued award of the REIT. Additionally, the exercise prices of stock options and the grant date fair values of full value We began granting awards have been adjusted to reflect the conversion of the underlying award. Values of stock options, restricted stock and restricted stock units of AMB were adjusted to their current fair value pursuant to the Merger. The fair value adjustment related to vested awards was recognized as an adjustment to paid-in capital and the portion of the adjustment related to unvested awards is being amortized to expense over their remaining service periods.
Performance Plans
In 2012, we granted performance-based cash incentive awards under two performance compensation plans approved by the compensation committee of the Board. Under the approved performance plans, referred to as the Outperformance Plan and the Private Capital Plan, certain officers and employees may earn incentive compensation in the form of cash incentive awards orLTIP Units during 2014. An LTIP Unit represents a partnership interest in the Operating Partnership. After vesting and the satisfaction of certain conditions, an LTIP Unit may be exchangeable for a common unit in the Operating Partnership and then redeemable for a share of common stock.
We have 27.2 million shares reserved for issuance, of which 23.1 million shares of common stock awards. The plans are designed suchwere available for future issuance at December 31, 2014. Each LTIP Unit counts as one share of common stock for purposes of calculating the limit on shares that awards willmay be paid only as a result of extraordinary performance by the Company.issued.
OutperformanceOut-Performance Plan (“OPP”)
For plan year 2012, cash incentiveWe grant awards were granted in February 2012 with athe form of points under our OPP corresponding to three-year performance period that began on January 1, 2012periods. The fair value of the awards are measured at the grant date and will end on December 31, 2014. Theseamortized over the performance period. OPP awards will only beare earned to the extent our total shareholderstockholder return
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(“TSR”) for the performance period exceeds the TSR for the MSCI US REIT Index for the same period plus 100 basis points. If this outperformance hurdle is met, the compensation pool will beis equal to 3% of the excess value created, subject to a maximum of the greater of $75 million or 0.5% of the our equity market capitalization at the start of the performance period. For 2012, eachEach participant wasis allocated a percentage of the total compensation pool. Awards earned, if any, for the performance period beginning in 2012 will be paid in cash. Awards earned at the end of the performance period cannot be paid to participants unless our absolute TSR, as defined in the plan, is positive for the performance period. If we outperform the TSR for the MSCI US REIT Index plus 100 basis points, but the absolute TSR is not positive, payment will be delayed until such time as our absolute TSR becomes positive. If after seven years our absolute TSR has not become positive, the awards will be forfeited.
AsWe used the initialMonte Carlo valuation model to value the points granted in 2014, 2013 and 2012. The points relate to a three-year performance period is payablethat begins on January 1 of the year granted. If the performance criteria are met, the participants’ points will be paid in the form of common stock or LTIP Units. In 2014, we gave certain participants the election to choose the form of payment of awards earned, if any, in common stock of the Parent or a special OPP type of LTIP Units (the “OPP LTIP Units”) that represents restricted operating partnership units in the Operating Partnership. For future performance periods, a participant may elect to receive common stock in the event that the performance criteria under the OPP are met or OPP LTIP Units upon the award of participation points. If the performance criteria are not met, the participation points and the OPP LTIP Units will be forfeited. At December 31, 2014, all awards are equity classified.
The 2012 grant was originally liability classified as the payment was expected to be in cash and the awards are liability-classified. The grant-date fair value of the award is measured at the beginning of the performance period and is amortized over the performance period. Onwas re-measured on a quarterly basis from the date of grant through the end of the performance period, the fair value of the award is re-measured and the expense iswas adjusted. We measureOn May 1, 2013, the compensation committee of the Board approved a modification of the settlement terms for the awards to be paid in shares of common stock. The award was reclassified from liability at fair value each reporting period using the Monte Carlo simulation model. We recognized $9.0 million of compensation expense related to plan year 2012equity based on the fair value at the date of the liability of $27.1 million as ofmodification date. At December 31, 2012.2014, the performance criteria were not met for the 2012 grant, and, therefore, no awards were earned and the points and OPP LTIP Units for the 2012-2014 performance period were forfeited.
Private CapitalThe following table details the assumptions of each grant based on the year it was granted (dollars in thousands):
2014 | 2013 | 2012 (1) | ||||||||||
Risk free interest rate | 0.67% | 0.39% | 0.17% | |||||||||
Expected volatility | 38% | 38% | 23% | |||||||||
Aggregate fair value | $ | 23,100 | $ | 23,900 | $ | 36,100 |
(1) | These assumptions are based on the date the grant was modified in 2013. |
Prologis Promote Plan (“PCP”PPP”)
Under the PCP,PPP, we established a compensation pool equal to 40% of the aggregate incentive feespromotes earned by Prologis under agreements with our co-investment ventures. Eachventures, representing the third-party portion. The awards may be settled in cash or RSUs and, as of August 2014, participants may elect to receive LTIP Units in lieu of RSUs. The RSUs and LTIP Units have a three-year vesting period. At the beginning of each year, each participant wasis allocated a percentage of the total compensation pool for each applicable new co-investment venture.
A compensation pool was funded in February 2012. For plan year 2012, any awardsAugust 2014 and 2013 associated with promotes earned under the PCP would be payable in cash. We evaluate the likelihood that we will earn incentive fees from two of our co-investment ventures, onas discussed in Note 5. The total value of the awards in the third quarter of 2014 was $11.3 million, of which $4.2 million was paid in cash, approximately 57,000 RSUs were issued with a quarterly basis. grant date fair value of $2.4 million and approximately 113,000 LTIP Units were issued with a grant date fair value of $4.7 million. The total value of the awards issued in the third quarter of 2013 was $5.3 million, of which $2.7 million was paid in cash and approximately 69,000 RSUs were issued with a grant date fair value of $2.6 million.
We record an accrual when it becomes probablefor the estimated cash portion of the PPP at the same time the revenue is recognized.
Restricted Stock Units (“RSUs”)
In addition to the RSU’s granted under the OPP and estimateable thatPPP, we willgrant RSUs to certain employees, generally on an annual basis. Each award represents one share of common stock of the Parent and generally vests over a continued service period. The RSUs earn these fees. Atcash dividends during the vesting period and are, therefore, considered participating securities. We charge the value of the dividend to retained earnings. The fair value of the RSU is generally based on the market price of the Parent’s common stock on the date the award is granted and is charged to compensation expense during the vesting period, which is generally three years.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The activity for the year ended December 31, 2014 with respect to our RSUs was as follows (awards in thousands):
Number of Unvested RSUs | Weighted Average Grant-Date Fair Value | Number of Awards Vested | ||||||||||
Balance at January 1, 2014 | 2,266 | $ | 36.82 | 79 | ||||||||
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Granted | 1,329 | 40.85 | ||||||||||
Vested and distributed | (1,019) | 35.70 | ||||||||||
Forfeited | (55) | 38.20 | ||||||||||
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Balance at December 31, 2014 | 2,521 | $ | 39.38 | 106 |
Total remaining compensation cost related to RSUs outstanding at December 31, 2014 was $52.4 million, prior to adjustments for capitalized amounts due to our development and leasing activities. The remaining compensation cost will be recognized through 2018, with a weighted average period of 1.4 years.
Restricted Operating Partnership Units (“LTIP Units”)
LTIP Units are valued based on the market price of the Parent’s common stock on the date the award is granted and generally vest ratably over three years. Distributions are paid with respect to the LTIP Units during the vesting period and, therefore, such LTIP Units are considered participating securities. OPP LTIP Units are paid distributions during the performance period equal to one tenth of a common stock dividend and may not be exchanged for a common unit in the Operating Partnership until earned and certain conditions are met. OPP LTIP units are therefore not considered a participating security. The value of the distribution is charged toNet Income Attributable to Noncontrolling Interest in the Operating Partnership in the Consolidated Statements of Operations.
The activity for the year ended December 31, 2014 with respect to the LTIP Units issued under the PPP (as explained above) was as follows (units in thousands):
Number of Unvested LTIP Units | Weighted Average Grant-Date Fair Value | |||||||
Balance at January 1, 2014 | - | $ | - | |||||
Granted | 113 | 41.43 | ||||||
Vested and distributed | - | - | ||||||
Forfeited | - | - | ||||||
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Balance at December 31, 2014 | 113 | $ | 41.43 |
Total remaining compensation cost related to LTIP Units at December 31, 2014 was $4.2 million, prior to adjustments for capitalized amounts due to our development and leasing activities. The remaining compensation cost will be recognized through 2017, with a weighted average period of 1.9 years.
During 2014, certain participants of the 2012 we determined that itLTIP were offered the election to exchange outstanding but unvested full value awards for LTIP Units, which exchange was completed in January 2015. In addition, in 2014, certain participants were offered an election to receive grants of LTIP Units in lieu of future grants of RSUs under the 2012 LTIP and PPP. The LTIP Units issued pursuant to such elections will have the same vesting period and grant date fair value as the RSUs issuable under such awards.
In December 2014, participants in the OPP were offered the election to exchange their previously granted participation points into OPP LTIP Units. In such election, participation points were exchanged into 2.8 million OPP LTIP Units with respect to the 2012-2014, 2013-2015 and 2014-2016 performance periods. The performance criteria for the 2012-2014 performance period was not probablemet. As a result, no OPP awards for the 2012-2014 performance period were earned and, in January 2015, all OPP LTIP Units that we would earn incentive fees from our co-investment ventures and therefore did not recognize any revenue or compensation costswere associated 2012-2014 performance period were forfeited with the PCPno impact in 2012.2014.
Stock Options
We have granted various5.3 million stock options to our employeesoutstanding and outside directors, subject to certain conditions. Each stock option is exercisable into one share of common stock. Stock options granted to employees generally have graded vesting over a three or four year period and have an exercise price equal to the market price on the date of the grant. Stock options granted to outside directors generally vest immediately or within one year of the grant. The maximum contractual term of the stock option is ten years. No stock options were granted in 2012, 2011 and 2010. The outstanding options are primarily AMB stock options that we fair valued as of the Merger date.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The activity for the year endedat December 31, 2012,2014 with respect to our stock options is presented below:
Options Outstanding | Options Exercisable | |||||||||||||||||||
Number of Options | Weighted Average Price | Number of Options | Weighted Average Exercise Price | Weighted Average Life (in years) | ||||||||||||||||
Balance at January 1, 2012 | 9,879,960 | $ | 34.93 | |||||||||||||||||
Exercised | (2,060,994) | 24.12 | ||||||||||||||||||
Forfeited/Expired | (305,749) | 56.46 | ||||||||||||||||||
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Balance at December 31, 2012 | 7,513,217 | $ | 37.02 | 6,957,148 | $ | 37.76 | 4.7 |
Total remaining compensation cost related to unvested options as of December 31, 2012, is $2.2 million, prior to adjustments for capitalized amounts due to our development and leasing activities. The remaining expense will be recognized through 2015, which equates to a weighted average periodexercise price of 0.6$34.80 and a weighted average life of 3.8 years. The aggregate intrinsic value of exercised options was $5.8 million, $9.6 million, and $21.3 million.
As discussed in Note 3, we estimated the fair value of the AMB stock options using the Black-Scholes pricing model as of the Merger date. The fair value of the vested awards were included as part of the total Merger consideration. We used the following assumptions:
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We use historical data to estimate dividend yield, expected term and employee departure behavior used in the Black-Scholes pricing model. The risk-free interestmillion for periods within the expected term of the share option is based on the United States treasury yield curve in effect at the time of the Merger. To calculate the expected volatility of Prologis we weighted the historical volatility of ProLogis and AMB, as well as peer group data.
Full Value Awards
We have granted full value awards, generally in the form of restricted stock units (“RSUs”) and performance-based awards (“PSAs”), to certain employees, generally on an annual basis. We also grant deferred stock units (“DSUs”) to our outside directors. Full value awards each represent one share of common stock and generally vest over a continued service period. Full value awards earn cash dividends or dividend equivalent units (“DEUs”) (at our common stock dividend rate) over the vesting period that are charged to retained earnings.
The fair value of the full value awards is generally based on the market price of our common stock on the date the award is granted and is charged to compensation expense over the vesting or service period. For RSUs and PSAs the vesting period is generally three years. DSUs issued in 2011 and 2010 were fully vested at grant. DSUs granted in 2012 vest on the earlier of the date of the first annual stockholders meeting after the grant date or the first anniversary of the grant date.
The weighted average fair value of the full value awards granted during the years ended December 31, 2014, 2013 and 2012, 2011 and 2010 was $32.60, $34.13 and $23.75, respectively.
We granted PSAs in 2011 and 2010, but none No stock options were granted in 2012. Employees were granted a targeted number of PSAs, which were then earned, based on specified performance criteria over a one-year performance period. PSAs earned are then subject to an additional two-year vesting period. During the performancethree-year period the unearned PSAs accrue DEUs, which will be earned and vested according to the underlying award.
In 2011, we granted 280,525 PSAs and based on the attainment of specified individual and company performance goals, a total of 326,475 were earned. In 2010, we granted 242,406 PSAs and based on the attainment of specified individual and company performance goals, a total of 225,943 were earned.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Summary of Activity of our RSUs and PSAs
The activity for the year ended December 31, 2012 with respect to our RSU and PSA awards was as follows:
Number of Shares | Weighted Average Grant-Date Fair Value | Number of Shares Vested | ||||||||||
Balance at January 1, 2012 | 1,684,713 | $ | 30.43 | 48,735 | ||||||||
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Granted | 1,609,527 | 32.60 | ||||||||||
Vested | (1,238,036) | 30.26 | ||||||||||
Forfeited | (56,856) | 31.60 | ||||||||||
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Balance at December 31, 2012 | 1,999,348 | $ | 32.28 | 47,680 |
Restricted Stock
Restricted stock awards are full value awards that were granted under the AMB’s Prior Plans until the 2012 LTIP was approved. Restricted stock awards are valued based on the market price of common stock on the grant date. The vesting period for restricted stock is generally three to four years. We recognize the value of the restricted stock earned as compensation expense over the applicable service period, which is generally the vesting period. Restricted stock has voting rights during the vesting period.
The activity for the year ended December 31, 2012, with respect to our unvested restricted stock was as follows:
Number of Shares | Weighted Average Grant-Date Fair Value | |||||||
Balance at January 1, 2012 | 1,192,982 | $ | 34.07 | |||||
Granted | 5,000 | 29.24 | ||||||
Vested | (507,840) | 34.07 | ||||||
Forfeited | (2,865) | 34.07 | ||||||
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Balance at December 31, 2012 | 687,277 | $ | 34.03 |
Compensation Expense2014.
During the years ended December 31, 2012, 2011 and 2010, we recognized $49.6 million, $31.5 million and $25.1 million, respectively, of compensation expense including awards granted to our outside directors and net of forfeited awards. These amounts include expense reported asGeneral and Administrative Expenses andMerger, Acquisition and Other Integrated Expenses and are net of $8.8 million, $8.7 million and $5.3 million, respectively, that was capitalized due to our development and leasing activities.
Total remaining compensation cost related to unvested full value awards as of December 31, 2012 was $51.4 million, prior to adjustments for capitalized amounts due to our development and leasing activities. The remaining expense will be recognized through 2015, which equates to a weighted average period of 1.4 years. The fair value of the full value awards which vested in 2012 was $60.3 million.
Other Plans
In 2011, we had two 401(k) Savings Plan and Trusts (“401(k) Plans”), one from ProLogis and one from AMB. Effective January 1, 2012, the AMBThe Prologis 401(k) Plan merged into( the ProLogis 401(k) Plan, with the Prologis Plan (the “Plan”“401(k) Plan”) continuing on as the surviving plan. The new Plan provides for matching employer contributions of 50 cents for every dollar contributed by an employee, up to 6% of the employee’s annual compensation (within the statutory compensation limit). In the 401(k) Plan, vesting in the
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
matching employer contributions is based on the employee’s years of service, with 100% vesting at the completion of one year of service.
In 2011, the ProLogis 401(k) plan provided for matching employer Our contributions of 50 cents for every dollar contributed by an employee, up to 6% of the employee’s annual compensation (within the statutory compensation limit). Vesting inunder the matching employer contributions was based on the employee’s years of service, with 20% vesting each year of service, overprovisions were $2.2 million, $2.1 million and $1.8 million for 2014, 2013 and 2012, respectively.
We have a five-year period. In the AMB 401(k)non-qualified savings plan matching employer contributions vested in full after one year of service by the employee.
In 2011, we had two nonqualified savings plans to provide benefits for certain employees, one from ProLogis and one from AMB. The purpose of these plans was to allowthat allows highly compensated employees the opportunity to defer the receipt and income taxation of a certain portion of their compensation in excess of the amount permitted under the 401(k) Plans. In the ProLogis deferred compensation plan, we matched the lesser of (a) 50% of the sum of deferrals under both the 401(k) Plan and this plan, and (b) 3% of total compensation up to certain levels. ThesePlan. There has been no employer matching contributions vested in the same manner as the ProLogis 401(k) Plan. In the AMB deferred compensation plan, employer matching was not offered. Effective as of January 1, 2012, a new deferred compensation plan for Prologis was established. Employer matching is not offered in the new plan.
On a combined basis for all plans, our contributions under the matching provisions were $1.8 million, $1.6 million and $1.3 million for 2012, 2011 and 2010, respectively.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Merger, Acquisition and Other Integration Expenses |
In connection2011, AMB Property Corporation (“AMB”) completed a merger (the “Merger”) with ProLogis. In the Merger, AMB was the legal acquirer and other related activities,ProLogis was the accounting acquirer. Following the Merger, AMB changed its name to Prologis.
In 2012, we incurred significant transaction, integration, and transitional$80.7 million of costs in 2011 and 2012. These costs included investment banker advisory fees; legal, tax, accounting and valuation fees; termination and severance costs (both cash and stock based compensation awards) for terminated and transitional employees; non-capitalized system conversion costs and other integration costs. Certain costs were obligations of AMB and expensed prior to the closing of the Merger by AMB. The following is a breakdown ofthese costs incurred for the years ended December 31 (in thousands):
2012 | 2011 | |||||||
Termination, severance and transitional employee costs | $ | 54,283 | $ | 58,445 | ||||
Professional fees | 17,599 | 46,467 | ||||||
Office closure, travel and other costs | 8,794 | 24,714 | ||||||
Write-off of deferred loan costs | - | 10,869 | ||||||
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Total | $ | 80,676 | $ | 140,495 |
The costs incurred during 2011 principally included transaction and transitional costs directly related to the Merger, including severance, and transactional costs associated with the PEPR Acquisition. At the time of the Merger, we terminated our existing credit facilities and wrote-off the remaining unamortized deferred loan costs associated with such facilities, which is included in these costs.The costs in 2012 were related principally to severance in connection with the Merger; non-capitalizable system implementation costs, as portions of the project move into the phase when the costs are expensed (i.e., training and data conversion);implementation; additional costs due to the liquidation of PEPRan unconsolidated co-investment venture we acquired in 2011 and severance and related costs due to organizational changes in Europe to centralize finance activities and gain efficiencies.
Impairment Charges |
Impairment of Real Estate Properties
We recorded no impairment charges during 2014 or 2013. During the year ended December 31, 2012, we recognized impairment charges related to certain of our real estate properties for the years ended December 31 as outlined below (in thousands):totaling $283.5 million.
2012 | 2011 | 2010 | ||||||||||
Included in Continuing Operations: | ||||||||||||
Land | $ | 88,969 | $ | - | $ | 734,668 | ||||||
Operating properties | 163,945 | 21,237 | 1,349 | |||||||||
Other real estate | - | - | 595 | |||||||||
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Impairment of real estate properties - continuing operations | 252,914 | 21,237 | 736,612 | |||||||||
Discontinued Operations - operating properties and land subject to ground leases | 30,596 | 2,659 | 87,702 | |||||||||
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Total impairment charges | $ | 283,510 | $ | 23,896 | $ | 824,314 |
Land
In the fourth quarter of 2012, we reviewed ourrecognized impairment charges of $77.5 million on land bankparcels located in Central and Eastern Europe. This impairment was based on our current intent to hold long-term (through the development of an industrial property) or to sell. Thisa review that resulted in a change in our intent from long-termdevelop and hold to sell for somecertain land parcels andparcels. We based the identification of other land parcels that had previously been impaired, through the 2010 review as discussed below, that are located primarily in Central and Eastern Europe for which the market has continued to lag in the global economic recovery. We have not experienced the same improvement in land values in these regional and other European markets that we have had in a majority of our global markets. The fair value of the land parcels was based on internal valuations, which were corroborated primarily from brokers’ opinion of value and comparable land sales, if available. If the carrying value of the land parcel exceeded fair value we adjusted the carrying value of the land. Accordingly, we recognized impairment charges of $77.5 million based on our evaluation of our investment in land as of December 31, 2012.
Additionally during 2012, weWe also recorded impairment charges of $11.4 million in 2012 on land parcels that we expected to sell as the carrying value exceeded the fair value at that time. TheWe based the fair value of the land was based on purchase and sale agreements.
DuringOperating Properties
In the fourth quarter of 2010, we made a strategic decision to more aggressively pursue land sales. As a result of this decision, we undertook a complete evaluation of all land positions. As a result of our change in intent, if the carrying value of the land exceeded fair value, based on valuations and other relevant market data, we adjusted the carrying value of the land targeted for disposition to fair value. Accordingly, we recognized impairment charges of $687.6 million based on our change in intent and evaluation of the fair value of our land as of December 31, 2010. We also recognized impairment charges of $47.1 million related to land sold as part of a larger transaction as discussed below.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Operating Properties
As discussed in Note 6,2012, we announced the signing of a definitive agreement for the formation of a new fund in Europe, PELP. Based on this agreement, we assessed the recoverability of the portfolio of assets we expectexpected to contribute to PELP by comparing the total expected proceeds to the carrying value of the portfolio of assets as ofat December 31, 2012. As a result, of this analysis, we recorded impairment charges of $135.3 million in continuing operations.
Additionally, at December 31,During 2012, we also recorded impairment charges for properties we expected to sell to third parties or contribute to co-investment ventures of $30.6 million in discontinued operations and $28.7 million in continuing operations, related to operating properties that we expect to sell or contribute to co-investment ventures. Therespectively. We calculated the impairment charges were calculated based on the carrying values of thesethose assets as compared withto the fair value.
Impairment charges of $30.6 million recorded in discontinued operations relate to operating properties that we expect to sell to third parties at less than our carrying value, at that time. We estimated fair valuewhich was primarily based upon letters of intent, purchase and sale agreements and third partythird-party appraisals. These properties were either sold during 2012 or are held for sale as of December 31, 2012.
Other Assets
In 2011,2012, we recorded impairment charges of $21.2 million in continuing operations related to real estate properties we expected to sell. Impairment charges of $2.7 million recorded in discontinued operations related to the South Korean properties sold to a third party in 2011.
In 2010, we made a decision to sell our retail and mixed-use properties and certain other non-core real estate investments. As a result, we classified all of these assets and related liabilities asAssets and Liabilities Held for Sale in our accompanying Consolidated Balance Sheet as of December 31, 2010. Based on the carrying values of these assets and liabilities, as compared with the estimated sales proceeds less costs to sell, we recognized an impairment charge of $168.8$16.1 million ($47.1 million related toon land and includedthat was received in Impairmentexchange for a note receivable from an entity in Europe that went into administration in 2011.
16. | Income Taxes |
Components of Real Estate Properties, $44.3 million related to the joint ventures and other assets and recorded inImpairment of Goodwill and Other Assets (described below); and $77.4 million was associated with operating properties and included in Discontinued Operations –Net Gains on Dispositions, Net of RelatedImpairment Charges andEarnings (Loss) before Income Taxes). We also recorded impairment charges of $10.3 million related primarily to our industrial properties in South Korea that we sold in 2011.
Impairment of Goodwill and Other Assets
We recognized impairment charges related to goodwill and other assetsComponents of earnings (loss) before income taxes for the years ended December 31 were as outlined belowfollows (in thousands):
2012 | 2011 | 2010 | ||||||||||
Goodwill | $ | - | $ | - | $ | 368,451 | ||||||
Investment in and advances to unconsolidated entities | - | 103,824 | 41,437 | |||||||||
Notes receivable | 16,135 | 22,608 | 2,857 | |||||||||
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Total impairment of goodwill and other assets | $ | 16,135 | $ | 126,432 | $ | 412,745 |
Goodwill
In 2010, we recorded an impairment charge related to goodwill allocated to the Americas and Europe Real Estate Operations reporting units of $235.5 million and $132.9 million, respectively. As part of our review, we compared the estimated fair value of each reporting unit with its carrying value, including goodwill. We estimated the fair value of assets and liabilities in each reporting unit through various valuation techniques as outlined in our summary of significant accounting policies. For the Real Estate Operations reporting units in the Americas and Europe, the carrying values exceeded the fair values. We then calculated the implied goodwill for each reporting unit by allocating the estimated fair values to the underlying assets and liabilities and determined that goodwill was impaired for each reporting unit.
The fair value of these reporting units in 2010 decreased due principally to the strategic decision we made in the fourth quarter of 2010 to significantly downsize our development platform. As a result, we targeted for sale to third parties a substantial portion of our land that we had previously expected to develop, some of which was acquired in the acquisitions that originally created the goodwill. In addition, we planned to sell to third parties our non-core and certain other assets that we acquired in connection with these same acquisitions.
Other Assets
Domestic International Earnings (loss) before income taxesIn the second quarter of 2011, we recorded impairment charges of $103.8 million primarily related to two of our investments in unconsolidated entities. This included one investment in the United States, Prologis NAIII, where our carrying value exceeded the fair value. This entity has not had the same appreciation in value in its portfolio that we have experienced in our consolidated portfolio and in several of our other entities. We determined the fair value of the underlying real estate assets using discounted cash flow models developed externally by a third party, which we corroborated through our discounted cash flow models. Based on the duration of time that the value of our investment has been less than carrying value and the lack of recovery as compared to our other real estate investments, we no longer believed the decline to be temporary. Also included was our investment in a co-investment venture in South Korea that we sold to our venture partner in July 2011. We had previously recognized an impairment associated with this investment due to the decline in value that we believed to be other than temporary. 2014 2013 2012 $ 390,874 $ (404,910) $ (65,566) 322,754 741,172 (37,251) $ 713,628 $ 336,262 $ (102,817)
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
We had a receivable from an entity that developed retail and mixed use properties in Europe that was secured by land parcels. In late 2011, the entity went into administration. In exchange for the note receivable, we received three land parcels and debt. Based on the fair value of the land less the assumption of debt received in the exchange and information available to us in the fourth quarter of 2011, the remaining receivable balance of $20.5 million was impaired. In the first quarter of 2012, we recorded an additional impairment charge of $16.1 million as a result of additional information that became available in the first quarter of 2012 and provided additional evidence indicating that the value of the land is less than originally estimated in the fourth quarter of 2011.
In 2010, we recorded impairment charges of $41.4 million for investments in other joint ventures and $2.9 million for a note receivable in connection with the expected sale of these non-core real estate investments, as discussed above in real estate impairments.
Components of Loss before Income Taxes
Components of loss before income taxes for the years ended December 31, were as follows (in thousands):
2012 | 2011 | 2010 | ||||||||||
Domestic | $ | (58,183) | $ | (300,445) | $ | (1,098,438) | ||||||
International | (31,439) | 35,031 | (533,548) | |||||||||
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Loss before income taxes | $ | (89,622) | $ | (265,414) | $ | (1,631,986) |
Summary of Current and Deferred Income Taxes
Components of the provision for income taxes for the years ended December 31 were as follows (in thousands):
2012 | 2011 | 2010 | ||||||||||
Current income tax expense (benefit) | ||||||||||||
United States Federal | $ | (27,897) | $ | (9,392) | $ | 15,257 | ||||||
International | 46,294 | 30,010 | 248 | |||||||||
State and local | 7,383 | 4,177 | 9,947 | |||||||||
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Total Current | 25,780 | 24,795 | 25,452 | |||||||||
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Deferred income tax expense (benefit) | ||||||||||||
United States Federal | 152 | (1,333) | 13,913 | |||||||||
International | (22,119) | (18,470) | (66,136) | |||||||||
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Total Deferred | (21,967) | (19,803) | (52,223) | |||||||||
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Total income tax expense (benefit), included in continuing and discontinued operations | $ | 3,813 | $ | 4,992 | $ | (26,771) |
2014 | 2013 | 2012 | ||||||||||
Current income tax expense (benefit): | ||||||||||||
United States federal | $ | (6,585) | $ | 20,009 | $ | (27,897) | ||||||
International | 52,155 | 99,478 | 46,294 | |||||||||
State and local | 16,014 | 8,501 | 7,383 | |||||||||
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Total current tax expense | 61,584 | 127,988 | 25,780 | |||||||||
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Deferred income tax expense (benefit): | ||||||||||||
United States federal | (27,374) | (1,133) | 152 | |||||||||
International | (59,866) | (18,934) | (22,119) | |||||||||
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Total deferred tax benefit | (87,240) | (20,067) | (21,967) | |||||||||
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Total income tax expense (benefit), included in continuing and discontinued operations | $ | (25,656) | $ | 107,921 | $ | 3,813 |
Current Income Taxes
Current income tax expense is generally a functionconsists of the level offederal income recognized bytax from our TRSs,taxable REIT subsidiaries (“TRSs”), state and local income taxes and taxes incurred in foreign jurisdictions. Current income tax expense recognized during 2014 is principally due to tax triggered upon the contribution of the initial portfolio of properties by certain wholly-owned and AFORES entities to FIBRA Prologis, as the transaction was structured as an asset sale for Mexican tax purposes. The tax expense was netted against a current benefit recognized during 2014 from the operating losses generated by our United States TRS. Current tax expense in 2013 was due to the net tax expense recognized on the initial contribution of properties to PELP and NPR that were previously held in certain foreign jurisdictions and interest and penalties associated with our uncertain tax positions. United States TRSs.
For the years ended December 31, 2012, 20112014, 2013 and 2010,2012, we recognized a net $28.5 million benefit $9.0 million benefit and $11.8 million expense, respectively, for uncertain tax positions.positions of $1.1 million, $1.8 million and $28.5 million, respectively. The benefit that was recognized in all years relates to the reversal of certain expenses due to the expiration of the statute of limitations and settlements with the taxing authorities and the expense recognized relates to interest and penalties associated with our uncertain tax positions.authorities.
During the years ended December 31, 2012, 20112014, 2013 and 2010,2012, cash paid for income taxes, net of refunds, was $38.4$105.4 million, $41.2$99.5 million and $25.9$38.4 million, respectively.
Deferred Income Taxes
Deferred income tax expense (benefit) is generally a function of the period’s temporary differences (principally basis differences between tax and financial reporting for real estate assets and equity investments) and generation of tax net operating losses that may be realized in future periods depending on sufficient taxable income.
For federal income tax purposes, certain acquisitions have been treated as tax-free transactions resulting in a carry-over basis in assets and liabilities for tax purposes. For financial reporting purposes and in accordance with purchase accounting, we record all of the acquired assets
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
and liabilities at the estimated fair values at the date of acquisition. For our taxable subsidiaries, including international jurisdictions, we recognize the deferred income tax liabilities that represent the tax effect of the difference between the tax basis carried over and the fair value of the tangible and intangible assets at the date of acquisition. If taxable income is generated in these subsidiaries, we recognize a deferred income tax benefit in earnings as a result of the reversal of the deferred income tax liability previously recorded at the acquisition date and we record current income tax expense representing the entire current income tax liability. Any increases or decreases to the deferred income tax liability recorded in connection with these acquisitions, related to tax uncertainties acquired, are reflected in earnings.
Deferred income tax assets and liabilities as ofat December 31 were as follows (in thousands):
2012 | 2011 | 2014 | 2013 | |||||||||||||
Gross deferred income tax assets: | ||||||||||||||||
Net operating loss carryforwards (1) | $ | 611,027 | $ | 443,026 | $ | 346,978 | $ | 391,764 | ||||||||
Basis difference - real estate properties | 172,336 | 185,266 | 105,205 | 133,767 | ||||||||||||
Basis difference - equity investments | 13,163 | 20,008 | 12,401 | 9,238 | ||||||||||||
Basis difference - intangibles | 17,408 | 24,664 | 5,952 | 8,113 | ||||||||||||
Alternative minimum tax credit carryforward | 1,387 | 1,388 | ||||||||||||||
Foreign tax credit carryforward | 1,963 | 1,944 | ||||||||||||||
Section 163(j) interest limitation | 53,542 | 36,733 | 32,703 | 33,224 | ||||||||||||
Capital loss carryforward | 30,395 | - | 25,282 | 32,054 | ||||||||||||
Other - temporary differences | 16,746 | 14,784 | 10,701 | 20,124 | ||||||||||||
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Total gross deferred income tax assets | 917,967 | 727,813 | 539,222 | 628,284 | ||||||||||||
Valuation allowance | (859,305) | (641,064) | (518,241) | (583,675) | ||||||||||||
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Gross deferred income tax assets, net of valuation allowance | 58,662 | 86,749 | 20,981 | 44,609 | ||||||||||||
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Gross deferred income tax liabilities: | ||||||||||||||||
Basis difference - real estate properties | 436,961 | 567,943 | 89,998 | 167,951 | ||||||||||||
Built-in-gains - real estate properties | 6,402 | 6,402 | ||||||||||||||
Basis difference - equity investments | 958 | 1,118 | ||||||||||||||
Built-in-gains - equity investments | 22,053 | 22,111 | ||||||||||||||
Basis difference - intangibles | 10,591 | 9,742 | ||||||||||||||
Built-in-gains - equity investments and real estate properties | - | 27,116 | ||||||||||||||
Basis difference- intangibles | 7,324 | 8,823 | ||||||||||||||
Other - temporary differences | 5,123 | 7,384 | 716 | 5,269 | ||||||||||||
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Total gross deferred income tax liabilities | 482,088 | 614,700 | 98,038 | 209,159 | ||||||||||||
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Net deferred income tax liabilities | $ | 423,426 | $ | 527,951 | $ | 77,057 | $ | 164,550 |
(1) | At December 31, |
U.S. | Europe | Mexico | Japan | Other | U.S. | Europe | Mexico | Japan | Other | |||||||||||||||||||||||||||||||
Gross NOL carryforward | $ | 96.8 | $ | 1,447.7 | $ | 494.3 | $ | 186.8 | $ | 57.0 | $ | 92 | $ | 747 | $ | 246 | $ | 132 | $ | 67 | ||||||||||||||||||||
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Tax-effected NOL carryforward | 36.3 | 393.7 | 140.8 | 26.6 | 13.6 | 35 | 197 | 74 | 25 | 16 | ||||||||||||||||||||||||||||||
Valuation allowance | (36.3) | (374.5) | (136.7) | (26.6) | (13.6) | (35) | (188) | (74) | (25) | (16) | ||||||||||||||||||||||||||||||
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Net deferred tax asset-NOL carryforward | $ | - | $ | 19.2 | $ | 4.1 | $ | - | $ | - | $ | - | $ | 9 | $ | - | $ | - | $ | - | ||||||||||||||||||||
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Expiration periods | 2022-2032 | 2013-indefinite | 2013-2022 | 2013-2021 | 2013-indefinite | 2022-2033 | 2015-indefinite | 2015-2025 | 2015-2023 | 2015-indefinite |
The increasedecrease in deferred income tax assets from 2011 to 2012liabilities during 2014 is primarily due to NOL carryforwards recorded for certain jurisdictions based on taxable losses incurred during 2012. Additionally, the increase isprincipally due to the capital loss carryforward createdreversal of deferred tax liabilities of $62.8 million in connection with the initial contribution of properties to FIBRA Prologis in June 2014, as discussed above, and $27.1 million due to the expiration of the holding period on properties previously acquired with existing built-in-gains. These decreases were partially offset by the NAIF II transaction for onereversal of our United States TRS entities.
The increase in deferred tax assets was more than offset by an increaseliabilities in 2013 related to the contribution of properties to PELP.
In addition, we utilized net operating losses (“NOLs”), for which we had previously recorded a valuation allowance recorded against, of $37.6 million which were generated in prior years to offset current income tax expense which was triggered as part of the deferred tax assets. FIBRA transaction.
We recordedrecord a valuation allowance against deferred tax assets in certain jurisdictions becausewhen we could notcannot sustain a conclusion that it wasis more likely than not that we couldcan realize the deferred tax assets and NOL carryforwards.carryforwards during the periods in which these temporary differences become deductible. The deferred tax asset valuation allowance is adequate to reduce the total deferred tax asset to an amount that we estimate will “more-likely-than-not” be realized, as we are not currently forecasting sufficient taxable income for these benefits to be realized.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The decrease in deferred tax liabilities from 2011 to 2012 is primarily due the reversal of deferred tax liabilities on real estate properties in Europe that were either sold to third parties or contributed to our co-investment ventures.
Liability for Uncertain Tax Positions
During the years ended December 31, 2012, 20112014, 2013 and 2010,2012, we believe that we and our consolidated REIT subsidiary have complied with the real estate investment trustREIT requirements of the Internal Revenue Code. The statute of limitations for our tax returns is generally three years. As such, our tax returns that remain subject to examination would be primarily from 20092011 and thereafter. Our major tax jurisdictions outside the United States are Brazil, Canada, China, France, Germany, Japan, Luxembourg, Mexico, Netherlands, Poland, Singapore, Spain, and the United Kingdom.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The liability for uncertain tax positions principally consisted of estimated federal and state income tax liabilities and included accrued interest and penalties of $0.8$0.3 million and $26.4$0.9 million at December 31, 20122014 and 2011,2013, respectively. A reconciliation of the liability for uncertain tax positions for the years ended December 31 was as follows (in thousands):
2012 | 2011 | |||||||
Balance at January 1, | $ | 36,464 | $ | 70,496 | ||||
Additions for tax positions taken during the current year | - | 8,061 | ||||||
Additions for tax positions taken during a prior year | 407 | 7,058 | ||||||
Reductions for tax positions taken during a prior year | (124) | (11,464) | ||||||
Settlements with taxing authorities | - | (24,835) | ||||||
Reductions due to lapse of applicable statute of limitations | (28,804) | (12,852) | ||||||
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Balance at December 31, | $ | 7,943 | $ | 36,464 |
2014 | 2013 | |||||||
Balance at January 1 | $ | 1,318 | $ | 7,943 | ||||
Additions for tax positions taken during a prior year | 256 | 405 | ||||||
Settlements with taxing authorities | - | (7,030) | ||||||
Reductions due to lapse of applicable statute of limitations | (1,318) | - | ||||||
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Balance at December 31 | $ | 256 | $ | 1,318 |
Earnings / Loss Per Common Share / Unit |
We determine basic earnings per share/unit based on the weighted average number of shares of common stock/units outstanding during the period. We compute diluted earnings per share/unit based on the weighted average number of shares outstanding combined with the incremental weighted average effect from all outstanding potentially dilutive instruments.
The following table sets forth the computation of our basic and diluted earnings per share/unit for the years ended December 31 (in thousands, except per share/unit amounts):
REIT | 2012 (1) | 2011 (1) | 2010 (1) | |||||||||
Net loss attributable to common stockholders | $ | (80,946) | $ | (188,110) | $ | (1,295,920) | ||||||
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Weighted average common shares outstanding - Basic and Diluted (2)(3)(4) | 459,895 | 370,534 | 219,515 | |||||||||
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Net loss per share attributable to common stockholders - Basic and Diluted | $ | (0.18) | $ | (0.51) | $ | (5.90) | ||||||
Operating Partnership | ||||||||||||
Net loss attributable to common unitholders | $ | (81,108) | $ | (188,459) | $ | (1,295,920) | ||||||
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Weighted average common partnership units outstanding - Basic and Diluted (2)(3)(4) | 461,848 | 371,730 | 219,515 | |||||||||
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Net loss per unit attributable to common unitholders - Basic and Diluted | $ | (0.18) | $ | (0.51) | $ | (5.90) |
Prologis, Inc. | 2014 | 2013 | 2012 | |||||||||
Net earnings (loss) attributable to common stockholders | $ | 622,235 | $ | 315,422 | $ | (80,946) | ||||||
Noncontrolling interest attributable to exchangeable limited partnership units | 3,636 | 1,305 | (162) | |||||||||
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Adjusted net earnings (loss) attributable to common stockholders | $ | 625,871 | $ | 316,727 | $ | (81,108) | ||||||
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Weighted average common shares outstanding - Basic (1) | 499,583 | 486,076 | 459,895 | |||||||||
Incremental weighted average effect on exchange of limited partnership units (2) | 3,501 | 2,060 | 1,953 | |||||||||
Incremental weighted average effect of equity awards and warrants | 3,307 | 3,410 | - | |||||||||
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Weighted average common shares outstanding - Diluted (3) | 506,391 | 491,546 | 461,848 | |||||||||
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Net earnings (loss) per share attributable to common stockholders - | ||||||||||||
Basic | $ | 1.25 | $ | 0.65 | $ | (0.18) | ||||||
Diluted | $ | 1.24 | $ | 0.64 | $ | (0.18) | ||||||
Prologis, L.P. | 2014 | 2013 | 2012 | |||||||||
Net earnings (loss) attributable to common unitholders | $ | 624,436 | $ | 316,630 | $ | (81,108) | ||||||
Noncontrolling interest attributable to exchangeable limited partnership units | 1,435 | 97 | - | |||||||||
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Adjusted net earnings (loss) attributable to common unitholders | $ | 625,871 | $ | 316,727 | $ | (81,108) | ||||||
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Weighted average common partnership units outstanding - Basic (1) | 501,349 | 487,936 | 461,848 | |||||||||
Incremental weighted average effect on exchange of limited partnership units | 1,735 | 200 | - | |||||||||
Incremental weighted average effect of equity awards and warrants of Prologis, Inc. | 3,307 | 3,410 | - | |||||||||
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Weighted average common partnership units outstanding - Diluted (3) | 506,391 | 491,546 | 461,848 | |||||||||
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Net earnings (loss) per unit attributable to common unitholders - | ||||||||||||
Basic | $ | 1.25 | $ | 0.65 | $ | (0.18) | ||||||
Diluted | $ | 1.24 | $ | 0.64 | $ | (0.18) |
(1) |
The increase in shares/units between the periods is primarily due to |
In 2012 and 2010, Irving F. Lyons, III, member of the Board, Trustee of ProLogis prior to the Merger and former Chief Investment Officer, converted limited partnership units in the limited partnerships, in which we own a majority interest and consolidate, into 45,600 and 22,431 shares of our common stock, respectively. As of December 31, 2012, Mr. Lyons owned 27,752 of the outstanding partnership units. See Note 13 for more information regarding these limited partnerships in the Americas.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Also see Note 6 for a discussion of transactions between us and the unconsolidated entities in which we invest.
(3) | Total weighted average potentially dilutive stock awards and warrant outstanding (in thousands) were 14,366, 13,998, and 9,805 for the years ended December 31, 2014, 2013 and 2012, respectively. Total weighted average potentially dilutive shares/units from exchangeable debt outstanding (in thousands) were 11,879 for all periods presented. Total weighted average potentially dilutive limited partnership units outstanding (in thousands) were 1,932, 1,558, and 1,284 for the years ended December 31, 2014, 2013 and 2012, respectively. |
Financial Instruments and Fair Value Measurements |
Derivative Financial Instruments
In the normal course of business, our operations are exposed to global market risks, including the effect of changes in foreign currency exchange rates and interest rates. To manage these risks, we may enter into various derivative contracts. Foreigncontracts, such as foreign currency contracts including forwards and options, may be used to manage foreign currency exposure. We may useexposure, and interest rate swaps to manage the effect of interest rate fluctuations. We do not use derivative financial instruments for trading or speculative purposes. The majorityAll of our derivative financial instruments are customized derivative transactions and are not exchange-traded. Management reviews our hedging program, derivative positions, and overall risk management strategy on a regular basis. We only enter into transactions that we believe will be highly effective at offsetting the underlying risk.
Our use of derivatives does involveinvolves the risk that counterparties may default on a derivative contract. We establish exposure limits for each counterparty to minimize this risk and provide counterparty diversification. Substantially all of our derivative exposures are with counterparties that have long-term credit ratings of single-A or better. We enter into master agreements with counterparties that generally allow for netting of certain exposures; thereby significantly reducing the actual loss that would be incurred should a counterparty fail to perform its contractual obligations. To mitigate pre-settlement risk, minimum credit standards become more stringent as the duration of the derivative financial instrument increases. To minimize the concentration of credit risk, we enter into derivative transactions with a portfolio of financial institutions. Based on these factors, we consider the risk of counterparty default to be minimal.
AllWe recognize all derivatives are recognized at fair value in ourthe Consolidated Balance Sheets within the line itemsOther Assets orAccounts Payable and Accrued ExpensesOther Liabilities, as applicable. We do not net our derivative position by counterparty for purposes of balance sheet presentation and disclosure. Derivatives can be designated as fair value hedges, cash flow hedges or hedges of net investments in foreign operations. The accounting for gains and losses that result from changes in the fair values of derivative instruments depends on whether the derivatives are designated as, and qualify as, hedging instruments.
For derivatives that will be accounted for as hedging instruments, in accordance with the accounting standards, at inception of the transaction, we formally designate and document the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the strategy for undertaking the hedge transaction. In addition, we formally assess both at inception and at least quarterly thereafter, whether the derivatives used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. The ineffective portion of a derivative financial instrument’s change in fair value, if any, is immediately recognized in earnings. DerivativesWe also use derivatives that are not designated as hedges are(and may not speculative and are usedmeet the hedge accounting requirements) to manage our exposure to foreign currency fluctuations but do not meet the strict hedge accounting requirements.fluctuations.
Changes in the fair value of derivatives that are designated and qualify as cash flow hedges and hedges of net investments in foreign operations are recorded inAccumulated Other Comprehensive LossAOCIin ourthe Consolidated Balance Sheets. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures hedged, fluctuations in the value of the derivative instruments will generally be offset by changes in the fair values or cash flows of the underlying exposures being hedged. The changes in fair values of derivatives that were not designated and/or did not qualify as hedging instruments are immediately recognized in earnings. For cash flow hedges, we reclassify changes in the fair value of derivatives into the applicable line item in ourthe Consolidated Statements of Operations in which the hedged items are recorded in the same period that the underlying hedged items affect earnings.
Foreign currency hedgesOur co-investment ventures may also enter into derivative contracts. As we act as the manager of these ventures, these ventures primarily follow the same hedging strategy and risk mitigation that we use. For our consolidated co-investment ventures, the accounting treatment is as described in this footnote. For our unconsolidated co-investment ventures, we record our proportionate share of any earnings impact inEarnings from Unconsolidated Entities, Netin the Consolidated Statements of Operations. In addition, for derivatives in our unconsolidated ventures that have been designated and qualify as hedging instruments, we record our proportionate share of the effective gain or loss as a component ofAOCI in the Consolidated Balance Sheets. In both circumstances, we record the offsetting amount asInvestments in and Advances to Unconsolidated Entities in the Consolidated Balance Sheets.
Foreign Currency
We hedge the net assets of certain ofprimarily manage our international subsidiaries (net investment hedges) using foreign currency forward contractsexposure by borrowing in the currencies in which we invest. In certain circumstances, we may also borrow debt in a currency that is not the same functional currency of the borrowing entity to offset the translation and economic exposures related to our net investment in international subsidiaries. To mitigate the impact to our earnings from the fluctuations in exchange rates, we may designate the debt as a non-derivative financial instrument hedge. We also hedge our investments in certain international subsidiaries using foreign currency derivative contracts (net investment hedges) to offset the translation and economic exposures related to our
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
investments in these subsidiaries.subsidiaries by locking in a forward exchange rate at the inception of the hedge. We measure the effectiveness of our net investment hedges and our non-derivative financial instrument hedges by using the changes in forward exchange rates because this method reflects our risk management strategies, the economics of those strategies in ourthe financial statements and better manages interest rate differentials between different countries. Under this method, we report all changes in fair value of the forward contract are reportednon-derivative financial instrument and net investment hedges in stockholders’ equity in the foreign currency translation component ofAccumulated Other Comprehensive LossAOCI and offsetsin the Consolidated Balance Sheets. These amounts offset the translation adjustments on the underlying net assets of our foreign subsidiaries and affiliates,investments, which arewe also recordedrecord inAccumulated Other Comprehensive Loss AOCI. Ineffectiveness,We recognize ineffectiveness, if any, is recognized in earnings.
In 2012, we entered into 11earnings at the time the ineffectiveness occurred. We did not record any ineffectiveness on our foreign currency forwardderivative contracts that expire in Aprilduring the three years ended December 31, 2014.
We may use foreign currency option contracts, including puts, calls and May 2013collars to mitigate foreign currency exchange rate risk associated with an aggregate notional amount of €1.0 billion ($1.3 billion using the forward rate of 1.30) to hedge a portiontranslation of our investmentprojected net operating income of our international subsidiaries, principally in Europe and Japan. The put option contracts provide us with the option to exchange euros or yen for U.S. dollars at a fixed exchange rate if the euro or yen were to depreciate against the U.S. dollar, such that, if the euro or yen were to depreciate against the U.S. dollar to predetermined levels as set by the contracts, we could exercise our options and mitigate our foreign currency exchange losses. Call option contracts would create an obligation to exchange euro or yen for U.S. dollars at a fixed exchange rate if the euro or yen were to appreciate against the U.S. dollar, such that, if the euro or yen were to appreciate against the U.S. dollar to predetermined levels as set by the contracts we would be obligated to pay out under the contract and offset our foreign currency exchange gains. A collar contract combines the put and call options into one contract with the purchase of a foreign currency put option, combined with the sale of a foreign currency call option such that there is no cash outlay at execution. This strategy effectively locks in a range around the rate at which net operating earnings of our international subsidiaries will be translated into U.S. dollars. These derivatives were
Foreign currency option contracts are not designated and qualify as hedging instruments and, therefore, the changeshedges as they do not meet hedge accounting requirements. Changes in fair value of these derivatives were recorded in the foreign currency translation component ofAccumulated Other Comprehensive Lossin our Consolidated Balance Sheets. We had $17.5 million recorded inAccounts Payable and Accrued Expenses in our Consolidated Balance Sheets relating to the fair value of these derivative contracts at December 31, 2012. Amounts includedderivatives not designated in hedging relationships are recorded directly in earnings within the line itemAccumulated Other Comprehensive LossForeign Currency and Derivative Gains (Losses) and Related Amortization, Net in ourthe Consolidated Balance Sheets at December 31, 2012, were lossesStatements of $17.5 million. None of these hedges were ineffective during the year ended December 31, 2012, therefore, there was no impact on earnings.
PROLOGIS, INC. AND PROLOGIS, L.P.Operations.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Interest rate hedgesRate
Our interest rate risk management strategy is to limit the impact of future interest rate changes on earnings and cash flows as well as to stabilize interest expense and manage our exposure to interest rate movements. To achieveWe primarily accomplish this objective, weby issuing fixed rate debt with staggering maturities. We may enter into interest rate swap agreements, which allow us to borrow on a fixed rate basis for longer-term debt issuances, or interest rate cap agreements, which allow us to minimize the impact of increases in interest rates. We typically designate our interest rate swap and interest rate cap agreements as cash flow hedges as these derivative instruments may be used to manage the interest rate risk on potential future debt issuances or to fix the interest rate on variable rate debt issuances. The maximum length of time that we hedge our exposure to future cash flows is typically less than 10 years. We use cash flow hedges to minimize the variability in cash flows of assets, liabilities or forecasted transactions caused by fluctuations in interest rates.
We have entered into interest rate swap agreements whichthat allow us to receive variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of our agreements without the exchange of the underlying notional amount. We had 32 interest rate swap contracts, which included 24 contracts denominated in euro, two contracts denominated in British pound sterling, five contracts denominated in Japanese yen and one contract denominated in U.S dollar, outstanding at December 31, 2012. During 2011, we acquired and settled an interest rate cap agreement that allowed us to receive variable-rate amounts from a counterparty if interest rates rose above the strike rate on the contract in exchange for an upfront premium. We had $28.0 million and $28.5 million accrued inAccounts Payable and Accrued Expenses in our Consolidated Balance Sheets relating to these unsettled derivative contracts at December 31, 2012 and December 31, 2011, respectively.
TheWe report the effective portion of the gain or loss on the derivative is reported as a component ofAccumulated Other Comprehensive LossAOCI in ourthe Consolidated Balance Sheets, and reclassifiedreclassify it toInterest Expense in the Consolidated Statements of Operations over the corresponding period of the hedged item. TheTo the extent the hedged debt is paid off early, we recognize the amounts reclassified to interest expense for the year ended December 31, 2012 was $14.7 million. The amounts reclassified to interest expense for the years ended December 31, 2011 and 2010 were not considered material. For the next twelve months from December 31, 2012, we estimate that an additional expenseinAOCIasGains (Losses) on Early Extinguishment of $1.5 million will be reclassified into interest expense. Amounts included inAccumulated Other Comprehensive LossDebt, Net in ourthe Consolidated Balance Sheets at December 31, 2012 and 2011 were lossesStatements of $33.8 million and $51.7 million, respectively.Operations.
LossesWe recognize losses on a derivative representing hedge ineffectiveness are recognized inInterest Expense at the time the ineffectiveness occurred. We recorded lossesLosses due to hedge ineffectiveness of $2.4 million and $1.8 millionwere not considered material during the yearthree years ended December 31, 2012 and 2011, respectively. We did not have any losses due to hedge ineffectiveness during the year ended December 31, 2010. Also in2014. In 2012, we recorded a loss of $11.0 million inGain (Loss) on Early Extinguishment of Debt, Net related to interest rate swaps that were considered ineffective with a notional amount of $703.8 million.million that were considered ineffective. These derivatives arewere associated with debt that was paid off or transferred in late January and early Februarythe first quarter of 2013, or are expected to be transferred, in connection with the contribution to our new European co-investment venture, PELP (see Note 64 for more details of this venture). When it was probable the related forecasted transaction would not occur, we deemed the hedge was deemed ineffective and wrote-off the balance inAccumulated Other Comprehensive LossAOCI was written off..
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table summarizes the activity in our derivative instruments for the years ended December 31 as follows (in millions):
2012 | 2011 | 2010 | ||||||||||||||||||
Foreign Currency Forwards | Interest Rate Swaps (1) | Interest Rate Swaps (1) | Interest Caps | Interest Rate Swaps (1) | ||||||||||||||||
Notional amounts at January 1, | $ | - | $ | 1,496.5 | $ | 268.1 | $ | - | $ | 157.7 | ||||||||||
New contracts | 1,303.8 | 445.4 | - | - | 155.0 | |||||||||||||||
Acquired contracts (2) | - | 71.0 | 1,337.3 | 25.7 | - | |||||||||||||||
Matured or expired contracts | - | (698.1) | (108.9) | (25.7) | (44.6) | |||||||||||||||
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Notional amounts at December 31, | $ | 1,303.8 | $ | 1,314.8 | $ | 1,496.5 | $ | — | $ | 268.1 |
2014 | ||||||||||||||||||||||||||||||||||||
Foreign Currency Contracts | Interest Rate Swaps (2) | |||||||||||||||||||||||||||||||||||
Net Investment Contracts | Euro Option Contracts (1) | |||||||||||||||||||||||||||||||||||
Notional amounts at January 1 | € | 600 | $ | 800 | £ | - | $ | - | ¥ | 24,136 | $ | 250 | € | - | $ | - | $ | 71 | ||||||||||||||||||
New contracts | 1,746 | 2,354 | 238 | 400 | 79,010 | 769 | 365 | 464 | 398 | |||||||||||||||||||||||||||
Matured or expired contracts | (2,046) | (2,754) | - | - | (79,010) | (769) | (81) | (110) | (71) | |||||||||||||||||||||||||||
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Notional amounts at December 31 | € | 300 | $ | 400 | £ | 238 | $ | 400 | ¥ | 24,136 | $ | 250 | € | 284 | $ | 354 | $ | 398 | ||||||||||||||||||
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Weighted Average Forward Rate at December 31 | 1.33 | 1.68 | 96.54 | 1.25 | ||||||||||||||||||||||||||||||||
Active contracts at December 31 | 4 | 3 | 3 | 8 | 2 |
2013 | ||||||||||||||||||||
Foreign Currency Contracts | Interest Rate Swaps (3) | |||||||||||||||||||
Net Investment Contracts | ||||||||||||||||||||
Notional amounts at January 1 | € | 1,000 | $ | 1,304 | ¥ | - | $ | - | $ | 1,315 | ||||||||||
New contracts | 600 | 800 | 24,136 | 250 | - | |||||||||||||||
Matured or expired contracts | (1,000) | (1,304) | - | - | (1,244) | |||||||||||||||
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Notional amounts at December 31 | € | 600 | $ | 800 | ¥ | 24,136 | $ | 250 | $ | 71 |
2012 | ||||||||||||
Foreign Currency Contracts | Interest Rate Swaps (4) | |||||||||||
Net Investment Contracts | ||||||||||||
Notional amounts at January 1 | € | - | $ | - | $ | 1,497 | ||||||
New contracts | 1,000 | 1,304 | 445 | |||||||||
Acquired contracts | - | - | 71 | |||||||||
Matured or expired contracts | - | - | (698) | |||||||||
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Notional amounts at December 31 | € | 1,000 | $ | 1,304 | $ | 1,315 |
(1) | During 2014, we exercised three foreign currency option contracts, and recognized a net gain of approximately $1.1 million. |
(2) | During the third quarter of 2014, we entered into two contracts with a total notional amount of ¥40.9 billion to effectively fix the interest rate on the Yen Term Loan. See Note 9 for more information on the Yen Term Loan. |
(3) | During 2013, we settled 13 contracts with a notional value of $333.5 million, and contributed 13 contracts with a notional value of $383.9 million related to the transfer of assets to the newly formed PELP co-investment venture. We also settled five contracts in Japan with a notional value of $526.4 million in connection with the contributions of properties to NPR. |
(4) | In 2012, we entered into four interest rate swap contracts with combined notional amounts of $445.4 million, with various expiration dates between 2017 and 2019. In addition, we acquired one interest rate swap contract with a notional amount of $71.0 million in connection with the acquisition of |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table presents the fair value of our derivative instruments (in thousands):
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
Asset | Liability | AOCI | Asset | Liability | AOCI | |||||||||||||||||||
Net investment hedges - euro denominated | $ | 22,891 | $ | - | $ | 37,295 | $ | 137 | $ | 30,302 | $ | (21,705) | ||||||||||||
Net investment hedges - yen denominated | 46,934 | - | 56,169 | 20,104 | - | 22,102 | ||||||||||||||||||
Net investment hedges - pounds sterling denominated | 29,097 | - | 29,097 | - | - | - | ||||||||||||||||||
Foreign currency options - euro denominated (1) | 7,742 | - | - | - | - | - | ||||||||||||||||||
Interest rate swap hedges (2) | - | 1,395 | (1,395) | - | 5,638 | (591) | ||||||||||||||||||
Our share of derivatives from unconsolidated co-investment ventures (3) | - | - | (19,545) | - | - | (13,851) | ||||||||||||||||||
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Total fair value of derivatives | $ | 106,664 | $ | 1,395 | $ | 101,621 | $ | 20,241 | $ | 35,940 | $ | (14,045) |
(1) | As discussed above, the foreign currency options are not designated as hedges. We recognized gains of $7.7 million inForeign Currency and Derivative Losses and Related Amortization, Netin the Consolidated Statements of Operations from the change in value of our outstanding foreign currency option contracts for the year ended December 31, 2014. |
(2) | In connection with the contributions to NPR, we reclassified a loss related to interest rate swaps of $7.8 million during the first quarter of 2013 fromAOCI in the Consolidated Balance Sheets toLosses on Early Extinguishment of Debt, Net in the Consolidated Statements of Operations. |
(3) | Items indicated by ‘- - ‘ are not applicable |
The change inOther Comprehensive Income (Loss)in the Consolidated Statements of Comprehensive Income (Loss) during the periods presented is due to the translation upon consolidation of the financial statements into U.S. dollars of our consolidated subsidiaries whose functional currency is not the U.S. dollar for which we recorded losses of $614.8 million, $237.6 million and $61.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. It also includes the change in fair value for the effective portion of our derivative and non-derivative instruments. The following table presents the gains and losses associated with the change in fair value for the effective portion of our derivative and non-derivative instruments included inOther Comprehensive Income (Loss) (in thousands):
2014 | 2013 | 2012 | ||||||||||
Derivative net investment hedges (1) | $ | 122,164 | $ | 17,847 | $ | (17,450) | ||||||
Interest rate swap hedges (2) | (804) | (69) | 6,651 | |||||||||
Our share of derivatives from unconsolidated co-investment ventures | (5,694) | 19,659 | 11,335 | |||||||||
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Total gain (loss) on derivative instruments | 115,666 | 37,437 | 536 | |||||||||
Non-derivative net investment hedges (3) | 321,196 | (14,910) | - | |||||||||
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Total gain on derivative and non-derivative instruments | $ | 436,862 | $ | 22,527 | $ | 536 |
(1) | This includes gains of $6.3 million and $4.3 million for the years ended December 31, 2014 and 2013, respectively, upon the settlement of net investment hedges. |
(2) | The amounts reclassified to interest expense for the years ended December 31, 2014 and 2013 were not considered significant. The amount reclassified to interest expense for the year ended December 31, 2012, was $14.7 million. We do not expect the amounts reclassified to interest expense for the next 12 months to be significant. |
(3) | As discussed in Note 9, we issued €1.8 billion ($2.4 billion) of debt in 2014. This debt was issued by the Operating Partnership, which is a U.S. dollar functional entity, and designated as a non-derivative financial instrument hedge. At December 31, 2014 and 2013, we had €2.5 billion ($3.0 billion) and €700 million ($1.0 billion) of debt, net of accrued interest, respectively, designated as non-derivative financial instrument hedges of our net investment in international subsidiaries. We had €97.6 million ($118.5 million) of debt that was not designated as a non-derivative financial instrument hedge at December 31, 2014. We recognized unrealized gains of $7.5 million inForeign Currency and Derivative Gains (Losses) and Related Amortization, Net in the Consolidated Statements of Operations on the unhedged portion or our debt in 2014. |
Fair Value Measurements
We have estimated the fair value of our financial instruments using available market information and valuation methodologies we believe to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that we would realize upon disposition.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Fair Value Measurements on a Recurring and Non-Recurring Basis
At December 31, 20122014 and December 31, 2011,2013, other than the derivatives discussed in this noteabove and in Note 10,9, we dodid not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in ourthe Consolidated Financial Statements.
Non-financial assets measured at fair value on a non-recurring basis in our Consolidated Financial Statements consist of real estate assets and investments in and advances to unconsolidated entities that were subject to impairment charges as discussed in Note 16. The table below aggregates the fair value of these assets at December 31, 2012 and 2011, respectively, by the levels in the fair value hierarchy (in thousands):
2012 | 2011 | |||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Real estate assets | $ | - | $ | - | $ | 3,677,365 | $ | 3,677,365 | $ | - | $ | - | $ | 122,088 | $ | 122,088 | ||||||||||||||||
Investments in and advances to other unconsolidated entities | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 26,066 | $ | 26,066 |
Fair Value of Financial Instruments
At December 31, 2012 and December 31, 2011, the carrying amounts of certain of our financial instruments, including cash and cash equivalents, restricted cash, accounts and notes receivable and accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments.
At December 31, 2012 and 2011, We determined the fair value of our derivative instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. TheWe determined the fair values of our interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts or payments and the discounted expected variable cash payments. TheWe based the variable cash payments are based on an expectation of future interest rates, or forward curves, derived from observable market interest rate curves. TheWe based the fair values of our net investment hedges are based upon the change in the spot rate at the end of the period as compared to the strike price at inception.
We incorporate credit valuation adjustments to appropriately reflect both our nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.
We have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy. Although the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, all of our derivatives held at December 31, 2014 and 2013, were classified as Level 2 of the fair value hierarchy.
Fair Value Measurements on Non-Recurring Basis
Assets measured at fair value on a non-recurring basis in the Consolidated Financial Statements consist of real estate assets and investments in and advances to unconsolidated entities that were subject to impairment charges. There were no assets that met this criteria at December 31, 2014 or 2013.
Fair Value of Financial Instruments
At December 31, 20122014 and 2011,2013, our carrying amounts of certain financial instruments, including cash and cash equivalents, restricted cash, accounts and notes receivable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments.
At December 31, 2014 and 2013, we estimated the fair value of our senior notes and exchangeable senior notes has been estimated based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available, the fair value of our Credit Facilities has been estimated by discounting the future cash flows using rates and borrowing spreads currently available to us (Level 3), and the fair value of our secured mortgage debt and assessment bonds that do not have current quoted market prices available has been estimated by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value in the table below are the result of differences in interest rates and/or borrowing spreads that were available to us at December 31, 20122014 and 2011,2013, as compared with those in effect when the debt was issued or acquired.acquired, including reduced borrowing spreads due to our improved credit ratings. The senior notes and many of the issues of secured mortgage debt contain pre-payment penalties or yield maintenance provisions that could make the cost of refinancing the debt at lower rates exceed the benefit that would be derived from doing so.
The following table reflects the carrying amounts and estimated fair values of our debt at December 31 (in thousands):
2014 | 2013 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Credit Facilities | $ | - | $ | - | $ | 725,483 | $ | 725,679 | ||||||||
Senior notes | 6,076,920 | 6,593,657 | 5,357,933 | 5,698,864 | ||||||||||||
Exchangeable senior notes | 456,766 | 511,931 | 438,481 | 514,381 | ||||||||||||
Secured mortgage debt | 1,050,591 | 1,173,488 | 1,696,597 | 1,840,829 | ||||||||||||
Secured mortgage debt of consolidated entities | 1,207,106 | 1,209,271 | 239,992 | 246,324 | ||||||||||||
Term loans and other debt | 588,816 | 591,810 | 552,730 | 560,714 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total debt | $ | 9,380,199 | $ | 10,080,157 | $ | 9,011,216 | $ | 9,586,791 |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table reflects the carrying amounts and estimated fair values of our debt as of December 31 (in thousands):
2012 | 2011 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Debt: | ||||||||||||||||
Credit Facilities | $ | 888,966 | $ | 893,577 | $ | 936,796 | $ | 940,334 | ||||||||
Senior notes | 5,223,136 | 5,867,124 | 4,772,607 | 5,038,678 | ||||||||||||
Exchangeable senior notes | 876,884 | 1,007,236 | 1,315,448 | 1,431,805 | ||||||||||||
Secured mortgage debt | 3,625,908 | 3,765,556 | 1,725,773 | 1,832,931 | ||||||||||||
Secured mortgage debt of consolidated entities | 450,923 | 455,880 | 1,468,637 | 1,485,808 | ||||||||||||
Other debt of consolidated entities | 67,749 | 68,751 | 775,763 | 751,075 | ||||||||||||
Other debt | 657,228 | 660,951 | 387,384 | 389,804 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total debt | $ | 11,790,794 | $ | 12,719,075 | $ | 11,382,408 | $ | 11,870,435 |
Commitments and Contingencies |
Environmental Matters
A majority of the properties we acquire, including land, are subjected to environmental reviews either by us or the previous owners. In addition, we may incur environmental remediation costs associated with certain land parcels we acquire in connection with the development of the land. We have acquired certain properties in urban and industrial areas that may have been leased to or previously owned by commercial and industrial companies that discharged hazardous materials. We establish a liability at the time of acquisition to cover such costs and adjust the liabilities as appropriate when additional information becomes available. We record our environmental liabilities inOther Liabilitiesin the Consolidated Balance Sheets. We purchase various environmental insurance policies to mitigate our exposure to environmental liabilities. We are not aware of any environmental liability that we believe would have a material adverse effect on our business, financial condition or results of operations.
Indemnification Agreements
We have indemnification agreements related to certain co-investment ventures operating outside of the United States for the contribution of certain properties. We may enter into agreements whereby we indemnify the ventures, or our venture partners, for taxes that may be assessed with respect to certain properties we contribute to these ventures. Our contributions to these ventures are generally structured as contributions of shares of companies that own the real estate assets. Accordingly, the capital gains associated with the step up in the value of the underlying real estate assets, for tax purposes, are deferred and transferred at contribution. We have generally indemnified these ventures to the extent that the ventures: (i) incur capital gains or withholding tax as a result of a direct sale of the real estate asset, as opposed to a transaction in which the shares of the company owning the real estate asset are transferred or sold or (ii) are required to grant a discount to the buyer of shares under a share transfer transaction as a result of the ventures transferring the embedded capital gain tax liability to the buyer of the shares in the transaction. The agreements limit the amount that is subject to our indemnification with respect to each property to 100% of the actual tax liabilities related to the capital gains that are deferred and transferred by us to the ventures at the time of the initial contribution less any deferred tax assets transferred with the property.
The ultimate outcome under these agreements is uncertain as it is dependent on the method and timing of dissolution of the related venture or disposition of any properties by the venture. Two of our previous agreements were terminated without any amounts being due or payable by us. We consider the probability, timing and amounts in estimating our potential liability under the agreements. Liabilitiesrecord liabilities related to the indemnification agreements are recorded inOther Liabilitiesin ourthe Consolidated Balance Sheets. We continue to monitor these agreements and the likelihood of the sale of assets that would result in recognition and will adjust the potential liability in the future as facts and circumstances dictate.
Off-Balance Sheet Liabilities
We have issued performance and surety bonds and standby letters of credit in connection with certain development projects. Performance and surety bonds are commonly required by public agencies from real estate developers. Performance and surety bonds are renewable and expire upon the completion of the improvements and infrastructure. As ofAt December 31, 20122014 and 2011,2013, we had approximately $27.8$54.5 million and $27.6$25.5 million, respectively, outstanding under such arrangements.
At December 31, 2012, we guaranteed $30.4 million of debt of certain of our unconsolidated entities. We may be required under capital commitments or choose to make additional capital contributions to certain of our unconsolidated entities, representing our proportionate ownership interest, should additional capital contributions be necessary to fund development or acquisition costs, repayment of debt or operation shortfalls. See Note 65 for further discussion related to equity commitments to our unconsolidated entities.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Litigation
In the normal course of business, from time to time, we and our unconsolidated entities are parties to a variety of legal proceedings arising in the ordinary course of business. We believe that, with respect to any such matters that we are currently a party to, the ultimate disposition of any such matter will not result in a material adverse effect on our business, financial position or results of operations.
In December 2011, arbitration hearings began in connection with a dispute related to a real estate development project known as Pacific Commons. The plaintiff, Cisco Technology, Inc., was seeking rescission of a 2007 Restructuring and Settlement Agreement (the “Contract”) and other agreements, and declaratory relief, and damages for breach of the Contract. In August 2012, the arbitrator issued a ruling denying the relief sought by Cisco, and therefore Prologis had no further obligation.
Business Segments |
Our current business strategy includes two operating segments: Real Estate Operations and PrivateStrategic Capital. We generate revenues, earnings, net operating income and cash flows through our segments, as follows:
• | Real Estate Operations. This represents the ownership of industrial operating properties and is the main source of our revenue and earnings. We collect rent from our customers through operating leases, including reimbursements for the majority of our operating costs. Each operating property is considered to be an individual operating segment having similar economic characteristics that are combined within the reportable segment based upon geographic location. Our Real Estate Operations segment also includes development, re-development and acquisition activities that lead to rental operations. We develop, re-develop and acquire industrial properties primarily in global and regional markets to meet our customers’ needs. Within this line of business, we capitalize on: (i) the land that we currently own; (ii) the development expertise of our local teams; (iii) our global customer |
Real Estate Operations — This represents the direct long-term ownership of industrial operating properties and is the primary source of our core revenue and earnings. We collect rent from our customers under operating leases, including reimbursements for the vast majority of our operating costs. Each operating property is considered to be an individual operating segment having similar economic characteristics that are combined within the reportable segment based upon geographic location. Our real estate operations segment also includes development and re-development activities. We develop and re-develop industrial properties primarily in global and regional markets to meet our customers’ needs. We provide additional value creation by utilizing: (i) the land that we currently own in global and regional markets; (ii) the development expertise of our local personnel; (iii) our global customer relationships; and (iv) the demand for high quality distribution facilities in key markets. Land held for development, properties currently under development and land we own and lease to customers under ground leases are also included in this segment.
PROLOGIS, INC. AND PROLOGIS, L.P.
We own real estate in the Americas (Canada, Mexico and the United States), Europe (Austria, Belgium, the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Romania, Slovakia, Spain, Sweden and the United Kingdom) and Asia (China, Japan and Singapore).NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Private Capital — This represents the long-term management of unconsolidated co-investment ventures and other joint ventures. We have a direct and long-standing relationships with a significant number of institutional investors. We tailor industrial portfolios to investors’ specific needs and deploy capital in both close-ended and open-ended venture structures and other joint ventures, while providing complete portfolio management and financial reporting services. We recognize fees and incentives earned for services performed on behalf of the unconsolidated entities and certain third parties.
relationships; and (iv) the demand for high-quality distribution facilities. Land held for development, properties currently under development and land we own and lease to customers under ground leases are also included in this segment. |
We report the costs associated with our Private Capital segment for all periods presented in the line item Private Capital Expenses in our Consolidated Statements of Operations. These costs include the direct expenses associated with the asset management of the co-investment ventures provided by individuals who are assigned to our private capital segment. In addition, in order to achieve efficiencies and economies of scale, all of our property management functions are provided by a team of professionals who are assigned to our real estate operations segment. These individuals perform the property-level management of the properties we own and the properties we manage that are owned by the unconsolidated entities. We allocate the costs of our property management function to the properties we consolidate (reported inRental Expenses) and the properties owned by the unconsolidated entities (included inPrivate Capital Expenses), by using the square feet owned by the respective portfolios. We are further reimbursed by the co-investment ventures for certain expenses associated with managing these co-investment ventures.
Each entity we manage is considered to be an individual operating segment having similar economic characteristics that are combined within the reportable segment based upon geographic location. Our operations in the Private Capital segment are in the Americas (Brazil, Canada, Mexico and the United States), Europe (Belgium, the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Slovakia, Spain, Sweden and the United Kingdom) and Asia (China and Japan).
We present the operations and net gains associated with properties sold to third parties or classified as held for sale as discontinued operations, which results in the restatement of prior year operating results to exclude the items presented as discontinued operations.
• | Strategic Capital. This represents the management of unconsolidated co-investment ventures. We invest with partners and investors through our ventures, both private and public. We tailor industrial portfolios to investors’ specific needs and deploy capital with a focus on larger, ventures with longer duration and open-ended funds with leading global institutions. These private and public vehicles provide capital for distinct geographies across our global platform. We hold a significant ownership interest in these ventures; we believe this aligns our interests with those of our partners. We generate strategic capital revenues from our unconsolidated co-investment ventures through asset management and property management services and we earn additional revenues from leasing, acquisition, construction, development and disposition services provided. Depending on the structure of the venture and the returns provided to our partners, we also earn revenues through promotes during the life of a venture or upon liquidation. Each unconsolidated co-investment venture we manage is considered to be an individual operating segment having similar economic characteristics that are combined within the reportable segment based upon geographic location. |
Reconciliations are presented below for: (i) each reportable business segment’s revenue from external customers to ourTotal Revenues; in the Consolidated Statements of Operations; (ii) each reportable business segment’s net operating income from external customers to ourLossEarnings (Loss) before Income Taxes; in the Consolidated Statements of Operations; and (iii) each reportable business segment’s assets to ourTotal Assets. in the Consolidated Balance Sheets. Our chief operating decision makers rely primarily on net operating income and similar measures to make decisions about allocating resources and assessing segment performance. The applicable components of ourTotal
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Revenues,LossEarnings (Loss) before Income Taxes andTotal Assets are allocated to each reportable business segment’s revenues, net operating income and assets. Items that are not directly assignable to a segment, such as certain corporate income and expenses, are reflected as reconciling items. The following reconciliations are presented in thousands:
Years Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||
2012 | 2011 | 2010 | 2014 | 2013 | 2012 | |||||||||||||||||||
Revenues (1): | ||||||||||||||||||||||||
Real estate operations: | ||||||||||||||||||||||||
Americas | $ | 1,211,462 | $ | 842,845 | $ | 556,389 | $ | 1,403,564 | $ | 1,288,925 | $ | 1,176,920 | ||||||||||||
Europe | 436,206 | 309,575 | 78,545 | 74,413 | 174,397 | 435,244 | ||||||||||||||||||
Asia | 231,514 | 161,288 | 82,692 | 62,939 | 107,692 | 221,575 | ||||||||||||||||||
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| |||||||||||||||||||
Total Real Estate Operations segment | 1,879,182 | 1,313,708 | 717,626 | 1,540,916 | 1,571,014 | 1,833,739 | ||||||||||||||||||
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Private capital: | ||||||||||||||||||||||||
Strategic capital: | ||||||||||||||||||||||||
Americas | 69,422 | 76,872 | 66,653 | 95,168 | 72,474 | 69,422 | ||||||||||||||||||
Europe | 37,047 | 46,087 | 54,835 | 86,549 | 63,794 | 37,047 | ||||||||||||||||||
Asia | 20,310 | 14,660 | 1,038 | 38,154 | 43,204 | 20,310 | ||||||||||||||||||
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| |||||||||||||||||||
Total Private Capital segment | 126,779 | 137,619 | 122,526 | |||||||||||||||||||||
Total Strategic Capital segment | 219,871 | 179,472 | 126,779 | |||||||||||||||||||||
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Total revenues | $ | 2,005,961 | $ | 1,451,327 | $ | 840,152 | $ | 1,760,787 | $ | 1,750,486 | $ | 1,960,518 | ||||||||||||
Net operating income: | ||||||||||||||||||||||||
Real estate operations: | ||||||||||||||||||||||||
Americas | $ | 841,319 | $ | 584,081 | $ | 397,708 | $ | 1,000,773 | $ | 899,053 | $ | 818,393 | ||||||||||||
Europe | 326,126 | 223,950 | 43,452 | 40,627 | 116,178 | 325,571 | ||||||||||||||||||
Asia | 179,682 | 123,087 | 60,912 | 45,262 | 76,863 | 171,980 | ||||||||||||||||||
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| |||||||||||||||||||
Total Real Estate Operations segment | 1,347,127 | 931,118 | 502,072 | 1,086,662 | 1,092,094 | 1,315,944 | ||||||||||||||||||
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Private capital: | ||||||||||||||||||||||||
Strategic capital: | ||||||||||||||||||||||||
Americas | 31,637 | 42,644 | 40,354 | 42,042 | 18,785 | 31,637 | ||||||||||||||||||
Europe | 21,699 | 30,708 | 41,200 | 57,266 | 41,263 | 21,699 | ||||||||||||||||||
Asia | 9,623 | 9,305 | 313 | 24,067 | 30,145 | 9,623 | ||||||||||||||||||
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Total Private Capital segment | 62,959 | 82,657 | 81,867 | |||||||||||||||||||||
Total Strategic Capital segment | 123,375 | 90,193 | 62,959 | |||||||||||||||||||||
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Total segment net operating income | 1,410,086 | 1,013,775 | 583,939 | 1,210,037 | 1,182,287 | 1,378,903 | ||||||||||||||||||
Reconciling items: | ||||||||||||||||||||||||
General and administrative expenses | (228,068) | (195,161) | (165,981) | |||||||||||||||||||||
Merger, acquisition and other integration expenses | (80,676) | (140,495) | - | |||||||||||||||||||||
Impairment of real estate properties | (252,914) | (21,237) | (736,612) | |||||||||||||||||||||
Depreciation and amortization | (739,981) | (552,849) | (294,867) | |||||||||||||||||||||
Earnings from unconsolidated entities, net | 31,676 | 59,935 | 23,678 | |||||||||||||||||||||
Interest expense | (507,484) | (468,072) | (461,166) | |||||||||||||||||||||
Impairment of goodwill and other assets | (16,135) | (126,432) | (412,745) | |||||||||||||||||||||
Interest and other income, net | 22,878 | 12,008 | 15,847 | |||||||||||||||||||||
Gains on acquisitions and dispositions of investments in real estate, net | 305,607 | 111,684 | 28,488 | |||||||||||||||||||||
Foreign currency and derivative gains (losses), net | (20,497) | 41,172 | (11,081) | |||||||||||||||||||||
Gain (loss) on early extinguishment of debt, net | (14,114) | 258 | (201,486) | |||||||||||||||||||||
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| ||||||||||||||||||||||
Total reconciling items | (1,499,708) | (1,279,189) | (2,215,925) | |||||||||||||||||||||
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Loss before income taxes | $ | (89,622) | $ | (265,414) | $ | (1,631,986) |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Reconciling items: | ||||||||||||
General and administrative expenses | (247,768) | (229,207) | (228,068) | |||||||||
Depreciation and amortization | (642,461) | (648,668) | (724,262) | |||||||||
Merger, acquisition and other integration expenses | - | - | (80,676) | |||||||||
Impairment of real estate properties | - | - | (252,914) | |||||||||
Earnings from unconsolidated entities, net | 134,288 | 97,220 | 31,676 | |||||||||
Interest expense | (308,885) | (379,327) | (505,215) | |||||||||
Interest and other income, net | 25,768 | 26,948 | 22,878 | |||||||||
Gains on dispositions of investments in real estate and revaluation of equity investments upon acquisition of a controlling interest, net | 725,790 | 597,656 | 305,607 | |||||||||
Foreign currency and derivative losses and related amortization, net | (17,841) | (33,633) | (20,497) | |||||||||
Losses on early extinguishment of debt, net | (165,300) | (277,014) | (14,114) | |||||||||
Impairment of other assets | - | - | (16,135) | |||||||||
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| |||||||
Total reconciling items | (496,409) | (846,025) | (1,481,720) | |||||||||
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| |||||||
Earnings (loss) before income taxes | $ | 713,628 | $ | 336,262 | $ | (102,817) |
December 31, | December 31, | |||||||||||||||
2012 | 2011 | 2014 | 2013 | |||||||||||||
Assets (2): | ||||||||||||||||
Real estate operations: | ||||||||||||||||
Americas | $ | 15,304,053 | $ | 13,305,147 | $ | 17,432,909 | $ | 16,272,868 | ||||||||
Europe | 5,738,257 | 6,823,814 | 1,820,529 | 1,634,867 | ||||||||||||
Asia | 3,476,996 | 3,502,033 | 926,645 | 1,176,774 | ||||||||||||
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Total Real Estate Operations segment | 24,519,306 | 23,630,994 | 20,180,083 | 19,084,509 | ||||||||||||
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Private capital (3): | ||||||||||||||||
Strategic capital (3): | ||||||||||||||||
Americas | 24,373 | 43,394 | 20,635 | 22,154 | ||||||||||||
Europe | 61,266 | 61,946 | 54,577 | 60,327 | ||||||||||||
Asia | 6,108 | 9,368 | 2,718 | 3,634 | ||||||||||||
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| |||||||||||||
Total Private Capital segment | 91,747 | 114,708 | ||||||||||||||
Total Strategic Capital segment | 77,930 | 86,115 | ||||||||||||||
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| |||||||||||||
Total segment assets | 24,611,053 | 23,745,702 | 20,258,013 | 19,170,624 | ||||||||||||
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| |||||||||||||
Reconciling items: | ||||||||||||||||
Investments in and advances to other unconsolidated entities | 2,195,782 | 2,857,755 | ||||||||||||||
Investments in and advances to unconsolidated entities | 4,824,724 | 4,430,239 | ||||||||||||||
Assets held for sale | 43,934 | 4,042 | ||||||||||||||
Notes receivable backed by real estate | 188,000 | 322,834 | - | 188,000 | ||||||||||||
Assets held for sale | 26,027 | 444,850 | ||||||||||||||
Cash and cash equivalents | 100,810 | 176,072 | 350,692 | 491,129 | ||||||||||||
Other assets | 188,473 | 176,699 | 340,860 | 288,273 | ||||||||||||
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| |||||||||||||
Total reconciling items | 2,699,092 | 3,978,210 | 5,560,210 | 5,401,683 | ||||||||||||
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| |||||||||||||
Total assets | $ | 27,310,145 | $ | 27,723,912 | $ | 25,818,223 | $ | 24,572,307 |
(1) | Includes revenues attributable to the United States for the years ended December 31, 2014, 2013 and 2012 |
(2) | Includes long-lived assets attributable to the United States |
(3) | Represents management contracts and goodwill recorded in connection with business combinations |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Supplemental Cash Flow Information |
Non-cashSignificant non-cash investing and financing activities for the years ended December 31, 2014, 2013 and 2012 2011 and 2010 are as follows:discussed below.
See Note 3 for information relatedWe capitalized $21.6 million, $18.8 million and $10.6 million of equity-based compensation expense due to the Mergerour development and PEPR Acquisition in 2011leasing activities during 2014, 2013 and the Co-Investment Venture Acquisitions in 2012.2012, respectively.
WeAs partial consideration for properties we contributed to FIBRA Prologis and the conclusion of an unconsolidated co-investment venture during 2014, we received ownership interests in FIBRA Prologis initially valued at $609.7 million and FIBRA Prologis assumed $345.1 million of secured mortgage debt associated with the properties. See Note 4 for additional information. In 2013, as partial consideration for contributions and dispositions, the buyers assumed debt of $194.9 million.
As partial consideration for properties we contributed to PELP during the first quarter of 2013, we received ownership interests initially valued at $1.3 billion, representing a 50% ownership interest in PELP, and PELP assumed $353.2 million of secured mortgage debt.
During 2013 and 2012, we received $31.2 million and $17.7 million, $5.0 million and $4.6 million ofrepresenting ownership interests in certain unconsolidated entities as a portion of our proceeds from the contribution of properties to these entities, during 2012, 2011excluding PELP and 2010, respectively.FIBRA Prologis.
In April 2011, we assumed $61.7 millionSee Note 3 for information related to acquisitions of debt upon the acquisition of the remaining interestcontrolling interests in a joint venture that owned one propertyour unconsolidated co-investment ventures in Japan.2014, 2013 and 2012.
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Selected Quarterly Financial Data (Unaudited) |
Selected quarterly 2012 and 2011 data has been adjusted from previously disclosed amounts due to the disposal of properties in 2012 whose results of operations were reclassified toDiscontinued Operations in our Consolidated Statements of Operations. The selected quarterly data was as follows (in thousands, except per share data):
Three Months Ended, | ||||||||||||||||
REIT | March 31, | June 30, | September 30, | December 31, | ||||||||||||
2012: | ||||||||||||||||
Total revenues | $ | 480,875 | $ | 503,110 | $ | 504,419 | $ | 517,557 | ||||||||
Operating income (loss) | $ | 85,589 | $ | 101,789 | $ | 80,375 | $ | (159,306) | ||||||||
Earnings (loss) from continuing operations | $ | 189,677 | $ | (11,442) | $ | (4,519) | $ | (266,918) | ||||||||
Net earnings (loss) attributable to common stockholders | $ | 202,412 | $ | (8,119) | $ | (46,526) | $ | (228,713) | ||||||||
Net earnings (loss) attributable to common stockholders - Basic (1) | $ | 0.44 | $ | (0.02) | $ | (0.10) | $ | (0.50) | ||||||||
Net earnings (loss) attributable to common stockholders - Diluted (1)(2) | $ | 0.44 | $ | (0.02) | $ | (0.10) | $ | (0.50) | ||||||||
2011(3): | ||||||||||||||||
Total revenues | $ | 222,084 | $ | 310,326 | $ | 462,141 | $ | 456,777 | ||||||||
Operating income (loss) | $ | 26,929 | $ | (50,833) | $ | 78,286 | $ | 49,651 | ||||||||
Earnings (loss) from continuing operations | $ | (53,807) | $ | (164,974) | $ | 41,714 | $ | (90,123) | ||||||||
Net earnings (loss) attributable to common stockholders | $ | (46,616) | $ | (151,471) | $ | 55,436 | $ | (45,459) | ||||||||
Net earnings (loss) attributable to common stockholders - Basic (1)(4) | $ | (0.18) | $ | (0.49) | $ | 0.12 | $ | (0.10) | ||||||||
Net earnings (loss) attributable to common stockholders - | $ | (0.18) | $ | (0.49) | $ | 0.12 | $ | (0.10) | ||||||||
Operating Partnership | ||||||||||||||||
2012: | ||||||||||||||||
Total revenues | $ | 480,875 | $ | 503,110 | $ | 504,419 | $ | 517,557 | ||||||||
Operating income (loss) | $ | 85,589 | $ | 101,789 | $ | 80,375 | $ | (159,306) | ||||||||
Earnings (loss) from continuing operations | $ | 189,677 | $ | (11,442) | $ | (4,519) | $ | (266,918) | ||||||||
Net earnings (loss) attributable to common unitholders | $ | 203,353 | $ | (8,173) | $ | (4,668) | $ | (229,610) | ||||||||
Net earnings (loss) attributable to common unitholders - Basic (1) | $ | 0.44 | $ | (0.02) | $ | (0.10) | $ | (0.50) | ||||||||
Net earnings (loss) attributable to common unitholders - Diluted (1)(2) | $ | 0.44 | $ | (0.02) | $ | (0.10) | $ | (0.50) | ||||||||
2011(3): | ||||||||||||||||
Total revenues | $ | 222,084 | $ | 310,326 | $ | 462,141 | $ | 456,777 | ||||||||
Operating income (loss) | $ | 26,929 | $ | (50,833) | $ | 78,286 | $ | 49,651 | ||||||||
Earnings (loss) from continuing operations | $ | (53,807) | $ | (164,974) | $ | 41,714 | $ | (90,123) | ||||||||
Net earnings (loss) attributable to common stockholders | $ | (46,616) | $ | (151,471) | $ | 54,906 | $ | (45,278) | ||||||||
Net earnings (loss) attributable to common unitholders - Basic (1)(4) | $ | (0.18) | $ | (0.49) | $ | 0.12 | $ | (0.10) | ||||||||
Net earnings (loss) attributable to common unitholders - | $ | (0.18) | $ | (0.49) | $ | 0.12 | $ | (0.10) |
Three Months Ended, | ||||||||||||||||
Prologis, Inc. | March 31, | June 30, | September 30, | December 31, | ||||||||||||
2014: | ||||||||||||||||
Total revenues | $ | 434,682 | $ | 460,089 | $ | 415,151 | $ | 450,865 | ||||||||
Operating income | $ | 71,466 | $ | 95,274 | $ | 78,112 | $ | 74,956 | ||||||||
Earnings from continuing operations | $ | 12,003 | $ | 152,430 | $ | 147,127 | $ | 427,724 | ||||||||
Net earnings attributable to common stockholders | $ | 4,666 | $ | 72,715 | $ | 136,245 | $ | 408,609 | ||||||||
Net earnings per share attributable to common stockholders - Basic (1) | $ | 0.01 | $ | 0.15 | $ | 0.27 | $ | 0.82 | ||||||||
Net earnings per share attributable to common stockholders - Diluted (1)(2) | $ | 0.01 | $ | 0.13 | $ | 0.23 | $ | 0.81 | ||||||||
2013: | ||||||||||||||||
Total revenues | $ | 479,971 | $ | 410,693 | $ | 423,058 | $ | 436,764 | ||||||||
Operating income | $ | 97,039 | $ | 58,514 | $ | 77,380 | $ | 71,479 | ||||||||
Earnings (loss) from continuing operations | $ | 289,306 | $ | (20,591) | $ | (48,671) | $ | 9,485 | ||||||||
Net earnings (loss) attributable to common stockholders | $ | 265,416 | $ | (1,517) | $ | (7,534) | $ | 59,057 | ||||||||
Net earnings (loss) per share attributable to common stockholders - Basic (1) | $ | 0.58 | $ | 0.00 | $ | (0.02) | $ | 0.12 | ||||||||
Net earnings (loss) per share attributable to common stockholders - Diluted (1)(2) | $ | 0.57 | $ | 0.00 | $ | (0.02) | $ | 0.12 | ||||||||
Prologis, L.P. | ||||||||||||||||
2014: | ||||||||||||||||
Total revenues | $ | 434,682 | $ | 460,089 | $ | 415,151 | $ | 450,865 | ||||||||
Operating income | $ | 71,466 | $ | 95,274 | $ | 78,112 | $ | 74,956 | ||||||||
Earnings from continuing operations | $ | 12,003 | $ | 152,430 | $ | 147,127 | $ | 427,724 | ||||||||
Net earnings attributable to common unitholders | $ | 4,683 | $ | 72,973 | $ | 136,738 | $ | 410,042 | ||||||||
Net earnings per unit attributable to common unitholders - Basic (1) | $ | 0.01 | $ | 0.15 | $ | 0.27 | $ | 0.82 | ||||||||
Net earnings per unit attributable to common unitholders - Diluted (1) (2) | $ | 0.01 | $ | 0.13 | $ | 0.23 | $ | 0.81 | ||||||||
2013: | ||||||||||||||||
Total revenues | $ | 479,971 | $ | 410,693 | $ | 423,058 | $ | 436,764 | ||||||||
Operating income | $ | 97,039 | $ | 58,514 | $ | 77,380 | $ | 71,479 | ||||||||
Earnings (loss) from continuing operations | $ | 289,306 | $ | (20,591) | $ | (48,671) | $ | 9,485 | ||||||||
Net earnings (loss) attributable to common unitholders | $ | 266,548 | $ | (1,592) | $ | (7,582) | $ | 59,256 | ||||||||
Net earnings (loss) per unit attributable to common unitholders - Basic (1) | $ | 0.58 | $ | 0.00 | $ | (0.02) | $ | 0.12 | ||||||||
Net earnings (loss) per unit attributable to common unitholders - Diluted (1)(2) | $ | 0.57 | $ | 0.00 | $ | (0.02) | $ | 0.12 |
(1) | Quarterly earnings (loss) per common |
(2) |
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Nippon Prologis REIT, Inc.
On December 12, we announced the approval from our Board to sponsor a Japanese REIT (“J-REIT”) to serve as the long-term investment vehicle for our properties developed in Japan. In early 2013, we launched the initial public offering for Nippon Prologis REIT, Inc. (“NPR”). On February 14, 2013, NPR was listed on the Japan Stock Exchange and commenced trading. At that time, NPR acquired a portfolio of twelve properties from us for an aggregate purchase price of ¥173 billion ($1.9 billion), resulting in ¥153 billion ($1.7 billion at February 14, 2013) in net cash proceeds. We will retain at least a 15% equity ownership interest in NPR and will provide pipeline, operational and personnel assistance under a support agreement. As a result of this transaction, in the first quarter we will recognize a gain of approximately $300 million (unaudited) after the deferral of the gain related to our ongoing investment. We intend to use the proceeds primarily for the repayment of debt and future investment in Japan.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of DirectorDirectors and Stockholders
Prologis, Inc.:
Under date of February 27, 2013,25, 2015, we reported on the consolidated balance sheets of Prologis, Inc. and subsidiaries as of December 31, 20122014 and 20112013 and the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2012.2014. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related financial statement schedule, Schedule III — Real Estate and Accumulated Depreciation (Schedule III). Schedule III is the responsibility of Prologis, Inc.’s management. Our responsibility is to express an opinion on Schedule III based on our audits.
In our opinion, Schedule III — Real Estate and Accumulated Depreciation, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
KPMG LLP
Denver, Colorado
February 27, 201325, 2015
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Partners
Prologis, L.P.:
Under date of February 27, 2013,25, 2015, we reported on the consolidated balance sheets of Prologis, L.P. and subsidiaries as of December 31, 20122014 and 20112013 and the related consolidated statements of operations, comprehensive income (loss), capital, and cash flows for each of the years in the three-year period ended December 31, 2012.2014. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related financial statement schedule, Schedule III — Real Estate and Accumulated Depreciation (Schedule III). Schedule III is the responsibility of Prologis, L.P.’s management. Our responsibility is to express an opinion on Schedule III based on our audits.
In our opinion, Schedule III — Real Estate and Accumulated Depreciation, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
KPMG LLP
Denver, Colorado
February 27, 201325, 2015
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Industrial Operating Properties (d) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Americas Markets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
North American Markets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
United States: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Atlanta, Georgia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Atlanta Airport Dist Ctr | 3 | (d) | 2,510 | 10,830 | 126 | 2,510 | 10,956 | 13,466 | (86) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Atlanta NE at Sugarloaf | 1 | (d) | 620 | 2,621 | 28 | 620 | 2,649 | 3,269 | (20) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Atlanta NE Distribution Center | 8 | (d) | 5,582 | 3,047 | 28,671 | 6,276 | 31,024 | 37,300 | (15,893) | 1996, 1997 | 8 | (d) | 5,582 | 3,047 | 30,356 | 6,276 | 32,709 | 38,985 | (17,908) | 1996, 1997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Atlanta South Business Park | 9 | 5,353 | 28,895 | 1,213 | 5,353 | 30,108 | 35,461 | (1,687) | 2011 | 9 | 5,353 | 28,895 | 2,478 | 5,353 | 31,373 | 36,726 | (4,056) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Atlanta West Distribution Center | 7 | (d) | 7,274 | 26,566 | 10,269 | 7,274 | 36,835 | 44,109 | (11,917) | 1994, 2006, 2012 | 6 | (d) | 6,684 | 23,463 | 9,898 | 6,684 | 33,361 | 40,045 | (11,543) | 1994, 2006, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Berkeley Lake Distribution Center | 1 | (d) | 2,046 | 8,712 | 699 | 2,046 | 9,411 | 11,457 | (1,504) | 2006 | 1 | (d) | 2,046 | 8,712 | 742 | 2,046 | 9,454 | 11,500 | (2,048) | 2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Breckenridge Dist Ctr | 1 | (d) | 1,645 | 7,030 | - | 1,645 | 7,030 | 8,675 | (55) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Buford Distribution Center | 1 | 1,487 | - | 5,502 | 1,487 | 5,502 | 6,989 | (802) | 2007 | 1 | 1,487 | - | 5,577 | 1,487 | 5,577 | 7,064 | (1,219) | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carter-Pacific Bus Ctr | 3 | (d) | 1,484 | 6,269 | 12 | 1,484 | 6,281 | 7,765 | (69) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cobb Place Dist Ctr | 2 | (d) | 3,195 | 13,604 | 122 | 3,195 | 13,726 | 16,921 | (450) | 2012 | 2 | (d) | 2,970 | 12,702 | 218 | 2,970 | 12,920 | 15,890 | (1,413) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Dekalb Ind Ctr | 1 | (d) | 1,509 | 6,584 | 8 | 1,509 | 6,592 | 8,101 | (259) | 2012 | 1 | 1,401 | 6,154 | 1,451 | 1,401 | 7,605 | 9,006 | (819) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Douglas Hill Distribution Center | 4 | 11,599 | 46,826 | 3,122 | 11,677 | 49,870 | 61,547 | (11,766) | 2005 | 4 | 11,599 | 46,826 | 3,674 | 11,677 | 50,422 | 62,099 | (15,482) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hartsfield East DC | 1 | 697 | 6,466 | 7 | 697 | 6,473 | 7,170 | (309) | 2011 | 1 | 697 | 6,466 | 268 | 697 | 6,734 | 7,431 | (703) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Horizon Distribution Center | 1 | 2,846 | 11,385 | 1,202 | 2,846 | 12,587 | 15,433 | (1,976) | 2006 | 1 | 2,846 | 11,385 | 1,515 | 2,846 | 12,900 | 15,746 | (2,699) | 2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
LaGrange Distribution Center | 1 | 174 | 986 | 832 | 174 | 1,818 | 1,992 | (1,238) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Macon Dist Ctr | 1 | (d) | 649 | 2,871 | - | 649 | 2,871 | 3,520 | (138) | 2012 | 1 | 604 | 2,691 | 633 | 604 | 3,324 | 3,928 | (438) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Midland Distribution Center | 1 | 1,919 | 7,679 | 1,468 | 1,919 | 9,147 | 11,066 | (1,990) | 2006 | 1 | 1,919 | 7,679 | 1,506 | 1,919 | 9,185 | 11,104 | (2,723) | 2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northeast Industrial Center | 5 | (d) | 3,676 | 17,212 | 2,794 | 3,676 | 20,006 | 23,682 | (5,406) | 2006, 2012 | 3 | 3,142 | 14,036 | 2,706 | 3,142 | 16,742 | 19,884 | (3,762) | 1996, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Northmont Industrial Center | 1 | 566 | 3,209 | 1,358 | 566 | 4,567 | 5,133 | (2,906) | 1994 | 1 | 566 | 3,209 | 1,482 | 566 | 4,691 | 5,257 | (3,250) | 1994 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Olympic Ind Ctr | 2 | (d) | 2,156 | 9,417 | 15 | 2,156 | 9,432 | 11,588 | (107) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Park I-75 South | 1 | 8,369 | - | 35,435 | 8,382 | 35,422 | 43,804 | (1,151) | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Peachtree Corners Business Center | 5 | 1,519 | 7,253 | 2,969 | 1,519 | 10,222 | 11,741 | (4,993) | 1994, 2006 | 4 | 707 | 4,685 | 2,342 | 707 | 7,027 | 7,734 | (4,800) | 1994 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Piedmont Ct. Distribution Center | 2 | 885 | 5,013 | 3,628 | 885 | 8,641 | 9,526 | (5,028) | 1997 | 2 | 885 | 5,013 | 3,929 | 885 | 8,942 | 9,827 | (5,731) | 1997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Riverside Distribution Center (ATL) | 3 | 2,533 | 13,336 | 3,664 | 2,556 | 16,977 | 19,533 | (8,358) | 1999 | 4 | (d) | 3,306 | 16,750 | 4,300 | 3,329 | 21,027 | 24,356 | (9,692) | 1999, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
South Royal Atlanta Distribution Center | 2 | (d) | 1,259 | 5,990 | 1,332 | 1,259 | 7,322 | 8,581 | (1,133) | 2002, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Southfield-KRDC Industrial SG | 8 | 5,033 | 28,725 | 832 | 5,033 | 29,557 | 34,590 | (1,962) | 2011 | 8 | 5,033 | 28,725 | 1,837 | 5,033 | 30,562 | 35,595 | (4,634) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Southside Distribution Center | 1 | 1,186 | 2,859 | 400 | 1,186 | 3,259 | 4,445 | (229) | 2011 | 1 | 1,186 | 2,859 | 595 | 1,186 | 3,454 | 4,640 | (589) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Suwanee Creek Dist Ctr | 1 | 462 | 1,871 | 26 | 462 | 1,897 | 2,359 | (165) | 2010 | 2 | 1,045 | 4,201 | 202 | 1,045 | 4,403 | 5,448 | (448) | 2010, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tradeport Distribution Center | 3 | (d) | 1,464 | 4,563 | 7,559 | 1,479 | 12,107 | 13,586 | (7,140) | 1994, 1996 | 3 | (d) | 1,464 | 4,563 | 8,022 | 1,479 | 12,570 | 14,049 | (7,923) | 1994, 1996 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Weaver Distribution Center | 2 | 935 | 5,182 | 2,160 | 935 | 7,342 | 8,277 | (4,684) | 1995 | 2 | 935 | 5,182 | 2,351 | 935 | 7,533 | 8,468 | (5,243) | 1995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Westfork Industrial Center | 2 | (d) | 579 | 3,910 | 164 | 579 | 4,074 | 4,653 | (2,399) | 1995 | 2 | (d) | 579 | 3,910 | 428 | 579 | 4,338 | 4,917 | (2,749) | 1995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Westgate Ind Ctr | 5 | (d) | 3,096 | 13,637 | 505 | 3,096 | 14,142 | 17,238 | (549) | 2012 | 1 | 1,277 | 5,620 | 214 | 1,277 | 5,834 | 7,111 | (757) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Atlanta, Georgia | 78 | 67,523 | 276,381 | 80,506 | 68,333 | 356,077 | 424,410 | (94,881) | 80 | 80,097 | 292,940 | 122,340 | 80,920 | 414,457 | 495,377 | (112,117) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Austin, Texas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corridor Park Corporate Center | 4 | 4,579 | 19,046 | 75 | 4,579 | 19,121 | 23,700 | (1,024) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MET 4-12 LTD | 1 | 4,300 | 20,456 | 98 | 4,300 | 20,554 | 24,854 | (1,242) | 2011 | 1 | 4,300 | 20,456 | 268 | 4,300 | 20,724 | 25,024 | (2,743) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
MET PHASE 1 95 LTD | 4 | 5,593 | 17,211 | 702 | 5,593 | 17,913 | 23,506 | (1,032) | 2011 | 4 | 5,593 | 17,211 | 1,286 | 5,593 | 18,497 | 24,090 | (2,474) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Montopolis Distribution Center | 1 | 580 | 3,384 | 2,475 | 580 | 5,859 | 6,439 | (3,640) | 1994 | 1 | 580 | 3,384 | 2,585 | 580 | 5,969 | 6,549 | (4,257) | 1994 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Southpark Corporate Center | 3 | 1,470 | 6,154 | 1 | 1,470 | 6,155 | 7,625 | (47) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Walnut Creek Corporate Center | 3 | 461 | 4,089 | 314 | 515 | 4,349 | 4,864 | (2,733) | 1994 | 17 | (d) | 11,152 | 49,110 | 411 | 11,206 | 49,467 | 60,673 | (3,468) | 1994, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Austin, Texas | 9 | 10,934 | 45,140 | 3,589 | 10,988 | 48,675 | 59,663 | (8,647) | 30 | 27,674 | 115,361 | 4,626 | 27,728 | 119,933 | 147,661 | (14,013) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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1901 Park 100 Drive | 1 | 2,409 | 7,227 | 899 | 2,409 | 8,126 | 10,535 | (1,940) | 2006 | 1 | (d) | 2,409 | 7,227 | 1,148 | 2,409 | 8,375 | 10,784 | (2,616) | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Airport Commons Distribution Center | 2 | (d) | 2,320 | - | 9,049 | 2,360 | 9,009 | 11,369 | (3,953) | 1997 | 2 | (d) | 2,320 | - | 10,570 | 2,360 | 10,530 | 12,890 | (4,648) | 1997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Ardmore Distribution Center | 3 | 1,431 | 8,110 | 2,601 | 1,431 | 10,711 | 12,142 | (6,435) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ardmore Industrial Center | 2 | 984 | 5,581 | 1,462 | 985 | 7,042 | 8,027 | (4,588) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beltway Distribution | 1 | 9,211 | 33,922 | 335 | 9,211 | 34,257 | 43,468 | (1,955) | 2011 | 1 | 9,211 | 33,922 | 426 | 9,211 | 34,348 | 43,559 | (4,486) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
BWI Cargo Center E | 1 | - | 10,725 | 108 | - | 10,833 | 10,833 | (4,598) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corcorde Industrial Center | 4 | (d) | 1,538 | 8,717 | 3,729 | 1,538 | 12,446 | 13,984 | (7,877) | 1995 | 4 | (d) | 1,538 | 8,717 | 4,711 | 1,538 | 13,428 | 14,966 | (8,832) | 1995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Corridor Industrial | 1 | 1,921 | 7,224 | - | 1,921 | 7,224 | 9,145 | (431) | 2011 | 1 | 1,921 | 7,224 | 12 | 1,921 | 7,236 | 9,157 | (975) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crysen Industrial | 1 | 2,285 | 6,267 | 350 | 2,285 | 6,617 | 8,902 | (417) | 2011 | 1 | 2,285 | 6,267 | 454 | 2,285 | 6,721 | 9,006 | (1,001) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
DeSoto Business Park | 6 | 2,709 | 12,892 | 8,869 | 2,710 | 21,760 | 24,470 | (10,848) | 1996, 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gateway Bus Ctr | 10 | (d) | 30,263 | 26,530 | 36,269 | 30,400 | 62,662 | 93,062 | (849) | 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gateway Distribution Center | 3 | 2,628 | 5,960 | 4,616 | 3,268 | 9,936 | 13,204 | (1,883) | 1998, 2012 | 3 | 2,523 | 5,715 | 4,817 | 3,164 | 9,891 | 13,055 | (2,539) | 1998, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Granite Hill Dist. Center | 2 | 2,959 | 9,344 | 47 | 2,959 | 9,391 | 12,350 | (679) | 2011 | 2 | 2,959 | 9,344 | 74 | 2,959 | 9,418 | 12,377 | (1,551) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greenwood Industrial | 3 | 6,828 | 24,253 | 449 | 6,828 | 24,702 | 31,530 | (1,482) | 2011 | 3 | 6,828 | 24,253 | 583 | 6,828 | 24,836 | 31,664 | (3,379) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hampton Central Dist Ctr | 3 | (d) | 8,928 | 28,015 | 64 | 8,928 | 28,079 | 37,007 | (214) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IAD Cargo Center 5 | 1 | - | 43,060 | 75 | - | 43,135 | 43,135 | (25,257) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meadowridge Distribution Center | 1 | (d) | 1,757 | - | 6,403 | 1,902 | 6,258 | 8,160 | (2,592) | 1998 | 3 | (d) | 7,827 | 18,990 | 6,527 | 7,972 | 25,372 | 33,344 | (3,134) | 1998, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Meadowridge Industrial | 3 | 4,845 | 20,576 | 1,266 | 4,845 | 21,842 | 26,687 | (1,068) | 2011 | 3 | 4,845 | 20,576 | 4,091 | 4,845 | 24,667 | 29,512 | (2,769) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Patuxent Range Road | 2 | 2,281 | 9,638 | 313 | 2,281 | 9,951 | 12,232 | (584) | 2011 | 2 | 2,281 | 9,638 | 1,243 | 2,281 | 10,881 | 13,162 | (1,472) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preston Court | 1 | 2,326 | 10,146 | 23 | 2,326 | 10,169 | 12,495 | (595) | 2011 | 1 | 2,326 | 10,146 | 202 | 2,326 | 10,348 | 12,674 | (1,372) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
ProLogis Park - Dulles | 3 | (d) | 8,407 | 20,321 | 218 | 8,407 | 20,539 | 28,946 | (634) | 2012 | 7 | (d) | 16,703 | 36,268 | 576 | 16,703 | 36,844 | 53,547 | (2,189) | 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Troy Hill Dist Ctr | 2 | (d) | 2,198 | 9,426 | 13 | 2,198 | 9,439 | 11,637 | (312) | 2012 | 3 | (d) | 9,179 | 31,489 | 27 | 9,179 | 31,516 | 40,695 | (1,298) | 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Baltimore/Washington | 41 | 59,037 | 199,604 | 40,642 | 59,864 | 239,419 | 299,283 | (48,273) | 52 | 114,346 | 338,106 | 71,977 | 115,309 | 409,120 | 524,429 | (73,179) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Boston Industrial | 9 | 21,160 | 45,009 | (1,796 | ) | 21,164 | 43,209 | 64,373 | (3,583) | 2011 | 4 | 11,810 | 25,975 | (238 | ) | 11,810 | 25,737 | 37,547 | (5,254) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cabot Business Park | 9 | 15,977 | 41,088 | (6,071 | ) | 15,977 | 35,017 | 50,994 | (3,055) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cabot Business Park SGP | 3 | 6,380 | 19,563 | (1,282 | ) | 6,380 | 18,281 | 24,661 | (1,548) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Boston, Massachusetts | 21 | 43,517 | 105,660 | (9,149 | ) | 43,521 | 96,507 | 140,028 | (8,186) | 4 | 11,810 | 25,975 | (238 | ) | 11,810 | 25,737 | 37,547 | (5,254) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Central & Eastern, Pennsylvania | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carlisle Dist Ctr | 1 | (d) | 12,535 | 52,987 | - | 12,535 | 52,987 | 65,522 | (1,712) | 2012 | 6 | (d) | 54,852 | 233,619 | 6,048 | 54,852 | 239,667 | 294,519 | (15,392) | 2012, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chambersburg Dist Ctr | 1 | 4,188 | 17,796 | 76 | 4,188 | 17,872 | 22,060 | (924) | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Harrisburg Distribution Center | 1 | 2,231 | 12,572 | 651 | 2,231 | 13,223 | 15,454 | (3,844) | 2004 | 5 | 21,950 | 96,007 | 1,946 | 21,950 | 97,953 | 119,903 | (9,168) | 2004, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Harrisburg Industrial Center | 1 | 782 | 6,190 | 890 | 782 | 7,080 | 7,862 | (2,064) | 2002 | 1 | 782 | 6,190 | 1,581 | 782 | 7,771 | 8,553 | (2,461) | 2002 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
I-78 Dist. Center | 1 | 13,030 | 30,007 | 131 | 13,030 | 30,138 | 43,168 | (1,606) | 2011 | 1 | 13,030 | 30,007 | 335 | 13,030 | 30,342 | 43,372 | (3,655) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
I-81 Distribution | 1 | 1,822 | 21,583 | 161 | 1,822 | 21,744 | 23,566 | (1,130) | 2011 | 1 | 1,822 | 21,583 | 328 | 1,822 | 21,911 | 23,733 | (2,575) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kraft Distribution Center | 1 | 7,450 | 23,863 | - | 7,450 | 23,863 | 31,313 | (187) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lehigh Valley Distribution Center | 3 | 2,356 | 9,552 | 3,231 | 2,356 | 12,783 | 15,139 | (2,956) | 2004, 2010 | 8 | (d) | 26,795 | 89,400 | 24,540 | 26,875 | 113,860 | 140,735 | (7,994) | 2004, 2010, 2013, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northport Ind Ctr | 1 | (d) | 12,282 | 39,621 | 1 | 12,282 | 39,622 | 51,904 | (314) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Park 33 Distribution Center | 1 | (d | ) | 13,411 | - | 41,071 | 15,698 | 38,784 | 54,482 | (3,508) | 2007 | 2 | 28,947 | 49,500 | 41,138 | 31,207 | 88,378 | 119,585 | (6,061) | 2007, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
PHL Cargo Center C2 | 1 | - | 11,966 | 25 | - | 11,991 | 11,991 | (4,327) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pottsville Dist Ctr | 1 | 4,720 | 20,464 | 118 | 4,720 | 20,582 | 25,302 | (694) | 2012 | 1 | 4,486 | 19,527 | 907 | 4,486 | 20,434 | 24,920 | (2,249) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quakertown Distribution Center | 1 | 6,966 | - | 27,691 | 6,966 | 27,691 | 34,657 | (4,555) | 2006 | 1 | 6,966 | - | 27,698 | 6,966 | 27,698 | 34,664 | (5,960) | 2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Central & Eastern, Pennsylvania | 11 | 57,853 | 153,355 | 73,944 | 60,140 | 225,012 | 285,152 | (22,069) | 30 | 183,550 | 639,079 | 104,623 | 185,890 | 741,362 | 927,252 | (61,267) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Central Valley, CA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arch Road Logistics Center | 2 | (d | ) | 9,492 | 38,060 | 1,229 | 9,492 | 39,289 | 48,781 | (2,825) | 2010 | 2 | (d) | 9,492 | 38,060 | 2,310 | 9,492 | 40,370 | 49,862 | (5,680) | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Central Valley Distribution Center | 3 | (d) | 5,339 | 32,838 | 526 | 5,339 | 33,364 | 38,703 | (266) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Central Valley Industrial Center | 4 | (d | ) | 11,418 | 48,726 | 7,631 | 11,868 | 55,907 | 67,775 | (21,065) | 1999, 2002, 2005 | 5 | (d) | 14,110 | 65,026 | 8,648 | 14,560 | 73,224 | 87,784 | (25,728) | 1999, 2002, 2005, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Chabot Commerce Ctr | 2 | 5,222 | 13,697 | 3,307 | 5,222 | 17,004 | 22,226 | (1,285) | 2011 | 2 | 5,222 | 13,697 | 6,601 | 5,222 | 20,298 | 25,520 | (3,516) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Duck Creek Dist Ctr | 1 | (d) | 6,690 | 39,683 | - | 6,690 | 39,683 | 46,373 | (300) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manteca Distribution Center | 1 | 9,280 | 27,840 | 395 | 9,480 | 28,035 | 37,515 | (6,825) | 2005 | 1 | 9,280 | 27,840 | 591 | 9,480 | 28,231 | 37,711 | (8,733) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Patterson Pass Business Center | 3 | (d | ) | 9,762 | 24,636 | 5,535 | 9,774 | 30,159 | 39,933 | (1,695) | 2007, 2012 | 4 | (d) | 10,004 | 27,878 | 7,397 | 10,017 | 35,262 | 45,279 | (3,868) | 2007, 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Tracy Dist Ctr | 1 | (d) | 2,056 | 12,248 | - | 2,056 | 12,248 | 14,304 | (93) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tracy II Distribution Center | 4 | 9,707 | 32,080 | 75,666 | 15,048 | 102,405 | 117,453 | (10,378) | 2007, 2009, 2012 | 5 | 23,905 | 32,080 | 152,468 | 29,246 | 179,207 | 208,453 | (19,640) | 2007, 2009, 2012, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Central Valley, CA | 16 | 54,881 | 185,039 | 93,763 | 60,884 | 272,799 | 333,683 | (44,073) | 24 | 86,098 | 289,350 | 178,541 | 92,102 | 461,887 | 553,989 | (67,824) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Charlotte, North Carolina | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charlotte Distribution Center | 9 | (d | ) | 4,578 | - | 27,620 | 6,096 | 26,102 | 32,198 | (14,041) | 1995, 1996, 1997, 1998 | 11 | (d) | 6,596 | 8,581 | 28,810 | 8,114 | 35,873 | 43,987 | (15,719) | 1995, 1996, 1997, 1998, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Northpark Distribution Center | 2 | (d | ) | 1,183 | 6,707 | 2,611 | 1,184 | 9,317 | 10,501 | (5,663) | 1994, 1998 | 2 | (d) | 1,183 | 6,707 | 2,919 | 1,184 | 9,625 | 10,809 | (6,353) | 1994, 1998 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ridge Creek Dist Ctr | 1 | (d | ) | 2,074 | 9,044 | 35 | 2,074 | 9,079 | 11,153 | (308) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
West Pointe Business Center | 2 | 5,440 | 12,953 | 9,590 | 5,440 | 22,543 | 27,983 | (2,200) | 2006,2012 | 5 | (d) | 12,138 | 40,423 | 9,893 | 12,138 | 50,316 | 62,454 | (4,220) | 2006, 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wilson Business Park Distribution Center | 1 | 968 | 5,598 | 79 | 968 | 5,677 | 6,645 | (1,155) | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Charlotte, North Carolina | 15 | 14,243 | 34,302 | 39,935 | 15,762 | 72,718 | 88,480 | (23,367) | 18 | 19,917 | 55,711 | 41,622 | 21,436 | 95,814 | 117,250 | (26,292) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Chicago, Illinois | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Addison Business Center | 1 | 1,293 | 2,907 | 396 | 1,293 | 3,303 | 4,596 | (173) | 2011 | 1 | 1,293 | 2,907 | 515 | 1,293 | 3,422 | 4,715 | (488) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Addison Distribution Center | 1 | 640 | 3,661 | 1,191 | 640 | 4,852 | 5,492 | (2,632) | 1997 | 1 | 640 | 3,661 | 1,834 | 640 | 5,495 | 6,135 | (3,037) | 1997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alsip Distribution Center | 2 | 2,093 | 11,859 | 11,042 | 2,549 | 22,445 | 24,994 | (13,534) | 1997,1999 | 1 | 1,416 | 9,009 | 9,086 | 1,724 | 17,787 | 19,511 | (12,168) | 1997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alsip Industrial | 1 | 1,422 | 2,336 | - | 1,422 | 2,336 | 3,758 | (296) | 2011 | 1 | 1,422 | 2,336 | 22 | 1,422 | 2,358 | 3,780 | (670) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arlington Heights Distribution Center | 1 | 831 | 3,326 | 1,140 | 831 | 4,466 | 5,297 | (1,000) | 2006 | 1 | 831 | 3,326 | 2,345 | 831 | 5,671 | 6,502 | (1,582) | 2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bensenville Distribution Center | 1 | 926 | 3,842 | 6,146 | 940 | 9,974 | 10,914 | (6,571) | 1997 | 1 | 926 | 3,842 | 6,319 | 940 | 10,147 | 11,087 | (7,198) | 1997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bensenville Ind Park | 13 | 37,681 | 92,909 | 1,853 | 37,681 | 94,762 | 132,443 | (6,321) | 2011 | 13 | 37,681 | 92,909 | 5,219 | 37,681 | 98,128 | 135,809 | (14,800) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bloomingdale 100 Business Center | 4 | (d) | 6,563 | 27,579 | 68 | 6,563 | 27,647 | 34,210 | (210) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bolingbrook Distribution Center | 5 | (d | ) | 15,110 | 68,440 | 3,694 | 15,110 | 72,134 | 87,244 | (22,359) | 1999,2006 | 6 | (d) | 19,068 | 85,317 | 5,355 | 19,068 | 90,672 | 109,740 | (27,639) | 1999, 2006, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Bridgeview Dist Ctr | 4 | (d) | 1,662 | 7,726 | - | 1,662 | 7,726 | 9,388 | (92) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bridgeview Industrial | 1 | 1,380 | 3,404 | 310 | 1,380 | 3,714 | 5,094 | (245) | 2011 | 1 | 1,380 | 3,404 | 404 | 1,380 | 3,808 | 5,188 | (616) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chicago Industrial Portfolio | 1 | 1,330 | 2,876 | 81 | 1,330 | 2,957 | 4,287 | (225) | 2011 | 1 | 1,330 | 2,876 | 423 | 1,330 | 3,299 | 4,629 | (561) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chicago Ridge Freight Terminal | 1 | 1,789 | 6,187 | 243 | 1,789 | 6,430 | 8,219 | (327) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Des Plaines Distribution Center | 3 | (d | ) | 2,158 | 12,232 | 5,763 | 2,159 | 17,994 | 20,153 | (11,323) | 1995,1996 | 3 | 2,158 | 12,232 | 6,884 | 2,159 | 19,115 | 21,274 | (12,660) | 1995, 1996 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
District Industrial | 1 | 993 | 1,364 | - | 993 | 1,364 | 2,357 | (112) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Elk Grove Distribution Center | 23 | (d | ) | 31,138 | 82,034 | 46,202 | 31,138 | 128,236 | 159,374 | (43,759) | 1995, 1996, 1997, 1999, 2006, 2009 | 20 | (d) | 30,227 | 78,013 | 49,831 | 30,227 | 127,844 | 158,071 | (50,971) | 1995, 1996, 1997, 1999, 2006, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Elk Grove Du Page | 24 | (d | ) | 17,552 | 71,359 | (1,150 | ) | 16,402 | 71,359 | 87,761 | (431) | 2012 | 21 | (d) | 14,830 | 64,408 | 10,528 | 14,830 | 74,936 | 89,766 | (8,108) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Elk Grove Village SG | 9 | 9,580 | 18,750 | 772 | 9,580 | 19,522 | 29,102 | (1,540) | 2011 | 6 | 6,367 | 12,010 | 859 | 6,367 | 12,869 | 19,236 | (2,314) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Elmhurst Distribution Center | 1 | 713 | 4,043 | 1,140 | 713 | 5,183 | 5,896 | (2,992) | 1997 | 1 | 713 | 4,043 | 1,240 | 713 | 5,283 | 5,996 | (3,345) | 1997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Drive | 1 | 1,371 | 6,430 | 93 | 1,371 | 6,523 | 7,894 | (380) | 2011 | 1 | 1,371 | 6,430 | 509 | 1,371 | 6,939 | 8,310 | (887) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Glendale Heights Distribution Center | 3 | (d | ) | 3,903 | 22,119 | 3,252 | 3,903 | 25,371 | 29,274 | (12,296) | 1999 | 3 | (d) | 3,903 | 22,119 | 4,423 | 3,903 | 26,542 | 30,445 | (14,410) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Glenview Distribution Center | 2 | 1,156 | 6,550 | 1,976 | 1,156 | 8,526 | 9,682 | (4,623) | 1996, 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Golf Distribution | 1 | (d | ) | 5,372 | 16,619 | 7 | 5,372 | 16,626 | 21,998 | (1,273) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gurnee Dist Ctr | 2 | 2,297 | 9,991 | - | 2,297 | 9,991 | 12,288 | (97) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hintz Building | 1 | 354 | 1,970 | 9 | 354 | 1,979 | 2,333 | (125) | 2011 | 1 | 354 | 1,970 | 103 | 354 | 2,073 | 2,427 | (289) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
I-294 Dist Ctr | 1 | 4,581 | 19,408 | - | 4,581 | 19,408 | 23,989 | (629) | 2012 | 3 | (d) | 7,922 | 33,730 | 15 | 7,922 | 33,745 | 41,667 | (1,929) | 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
I-55 Distribution Center | 2 | (d | ) | 5,383 | 25,504 | 34,402 | 11,786 | 53,503 | 65,289 | (9,105) | 2007 | 2 | (d) | 5,383 | 25,504 | 35,513 | 11,786 | 54,614 | 66,400 | (14,082) | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
I-80 Morris | 1 | 6,349 | 27,134 | - | 6,349 | 27,134 | 33,483 | (213) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Itasca Distribution Center | 2 | 604 | 3,382 | 1,515 | 585 | 4,916 | 5,501 | (2,738) | 1996, 1997 | 2 | (d) | 1,522 | 7,119 | 1,562 | 1,522 | 8,681 | 10,203 | (1,968) | 1996, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Itasca Industrial Portfolio | 4 | 5,942 | 13,574 | 42 | 5,942 | 13,616 | 19,558 | (932) | 2011 | 3 | 3,053 | 5,879 | 245 | 3,053 | 6,124 | 9,177 | (938) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kehoe Industrial | 1 | 1,394 | 3,247 | 335 | 1,394 | 3,582 | 4,976 | (180) | 2011 | 1 | 1,394 | 3,247 | 446 | 1,394 | 3,693 | 5,087 | (459) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lombard Distribution Center | 1 | 1,170 | 6,630 | 840 | 1,170 | 7,470 | 8,640 | (3,508) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Melrose Park Distribution Ctr. | 1 | 2,657 | 9,292 | 17 | 2,657 | 9,309 | 11,966 | (682) | 2011 | 1 | 2,657 | 9,292 | 283 | 2,657 | 9,575 | 12,232 | (1,584) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minooka Distribution Center | 2 | (d | ) | 12,240 | 41,745 | 16,934 | 13,223 | 57,696 | 70,919 | (12,450) | 2005, 2008 | 3 | (d) | 18,420 | 68,912 | 17,991 | 19,404 | 85,919 | 105,323 | (16,871) | 2005, 2008, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Mitchell Distribution Center | 1 | 1,236 | 7,004 | 3,744 | 1,236 | 10,748 | 11,984 | (6,025) | 1996 | 1 | 1,236 | 7,004 | 3,748 | 1,236 | 10,752 | 11,988 | (6,970) | 1996 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NDP - Chicago | 1 | 461 | 1,362 | - | 461 | 1,362 | 1,823 | (80) | 2011 | 1 | 461 | 1,362 | 27 | 461 | 1,389 | 1,850 | (183) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nicholas Logistics Center | 1 | 2,354 | 10,799 | - | 2,354 | 10,799 | 13,153 | (769) | 2011 | 1 | 2,354 | 10,799 | 44 | 2,354 | 10,843 | 13,197 | (1,744) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northbrook Distribution Center | 1 | 2,056 | 8,227 | 374 | 2,056 | 8,601 | 10,657 | (1,708) | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northlake Distribution Center | 1 | 372 | 2,105 | 725 | 372 | 2,830 | 3,202 | (1,817) | 1996 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OHare Industrial Portfolio | 10 | 6,941 | 16,888 | 33 | 6,941 | 16,921 | 23,862 | (1,348) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pleasant Prairie Distribution Center | 1 | (d | ) | 1,314 | 7,450 | 2,475 | 1,315 | 9,924 | 11,239 | (4,987) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Poplar Gateway Truck Terminal | 1 | 2,321 | 4,699 | 525 | 2,321 | 5,224 | 7,545 | (286) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Port OHare | 2 | (d | ) | 4,819 | 5,547 | 44 | 4,819 | 5,591 | 10,410 | (424) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remington Lakes Dist | 1 | 2,382 | 11,657 | 480 | 2,382 | 12,137 | 14,519 | (586) | 2011 |
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northbrook Distribution Center | 1 | 2,056 | 8,227 | 1,981 | 2,056 | 10,208 | 12,264 | (2,340) | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northlake Distribution Center | 1 | 372 | 2,105 | 800 | 372 | 2,905 | 3,277 | (2,005) | 1996 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OHare Industrial Portfolio | 6 | 4,126 | 10,096 | 137 | 4,126 | 10,233 | 14,359 | (1,766) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pleasant Prairie Distribution Center | 1 | 1,314 | 7,450 | 2,733 | 1,315 | 10,182 | 11,497 | (6,008) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Poplar Gateway Truck Terminal | 1 | 2,321 | 4,699 | 519 | 2,321 | 5,218 | 7,539 | (725) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Port OHare | 2 | 4,819 | 5,547 | 256 | 4,819 | 5,803 | 10,622 | (971) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remington Lakes Dist | 1 | 2,382 | 11,657 | 606 | 2,382 | 12,263 | 14,645 | (1,380) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rochelle Distribution Center | 1 | 4,457 | 20,100 | 11,049 | 5,254 | 30,352 | 35,606 | (2,933) | 2008 | 1 | 4,457 | 20,100 | 11,131 | 5,254 | 30,434 | 35,688 | (4,789) | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Romeoville Distribution Center | 5 | (d | ) | 23,325 | 94,197 | 1,557 | 23,325 | 95,754 | 119,079 | (24,395) | 1995, 2005 | 5 | (d) | 23,325 | 94,197 | 10,129 | 23,325 | 104,326 | 127,651 | (31,396) | 1999, 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
S.C. Johnson & Son | 1 | 2,267 | 15,911 | 1,531 | 3,152 | 16,557 | 19,709 | (2,049) | 2008 | 1 | 2,267 | 15,911 | 1,552 | 3,152 | 16,578 | 19,730 | (3,156) | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sivert Distribution | 1 | 1,497 | 1,470 | - | 1,497 | 1,470 | 2,967 | (105) | 2011 | 1 | 1,497 | 1,470 | 8 | 1,497 | 1,478 | 2,975 | (236) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Touhy Cargo Terminal | 1 | (d | ) | 2,697 | 8,909 | - | 2,697 | 8,909 | 11,606 | (429) | 2011 | 1 | 2,697 | 8,909 | - | 2,697 | 8,909 | 11,606 | (970) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Waukegan Distribution Center | 2 | (d | ) | 4,368 | 17,632 | 806 | 4,368 | 18,438 | 22,806 | (3,817) | 2007 | 2 | 4,368 | 17,632 | 1,075 | 4,368 | 18,707 | 23,075 | (5,232) | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
West Chicago Distribution Center | 1 | 3,125 | 12,499 | 2,243 | 3,125 | 14,742 | 17,867 | (3,220) | 2005 | 1 | 3,125 | 12,499 | 3,299 | 3,125 | 15,798 | 18,923 | (4,622) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Windsor Court | 1 | 635 | 3,493 | 180 | 635 | 3,673 | 4,308 | (224) | 2011 | 1 | 635 | 3,493 | 184 | 635 | 3,677 | 4,312 | (555) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wood Dale Industrial SG | 5 | 4,343 | 10,174 | 130 | 4,343 | 10,304 | 14,647 | (650) | 2011 | 5 | 4,343 | 10,174 | 717 | 4,343 | 10,891 | 15,234 | (1,548) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Woodale Distribution Center | 1 | 263 | 1,490 | 460 | 263 | 1,950 | 2,213 | (1,177) | 1997 | 1 | 263 | 1,490 | 589 | 263 | 2,079 | 2,342 | (1,313) | 1997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Woodridge Distribution Center | 14 | (d | ) | 46,575 | 197,289 | 18,082 | 49,942 | 212,004 | 261,946 | (49,813) | 2005, 2007 | 14 | (d) | 46,575 | 197,289 | 21,583 | 49,942 | 215,505 | 265,447 | (65,513) | 2005, 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Yohan Industrial | 3 | (d | ) | 4,219 | 12,306 | 353 | 4,219 | 12,659 | 16,878 | (731) | 2011 | 3 | 4,219 | 12,306 | 1,157 | 4,219 | 13,463 | 17,682 | (1,768) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Chicago, Illinois | 167 | 294,783 | 1,039,207 | 183,036 | 306,521 | 1,210,505 | 1,517,026 | (270,334) | 161 | 302,344 | 1,101,341 | 224,297 | 315,104 | 1,312,878 | 1,627,982 | (345,376) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Cincinnati, Ohio | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Airpark Distribution Center | 2 | (d | ) | 2,958 | 9,894 | 12,662 | 3,938 | 21,576 | 25,514 | (6,066) | 1996,2012 | 4 | (d) | 5,851 | 22,543 | 14,311 | 6,831 | 35,874 | 42,705 | (7,717) | 1996, 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Distribution Center II | 5 | (d | ) | 1,953 | 11,067 | 6,646 | 1,953 | 17,713 | 19,666 | (10,679) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Empire Distribution Center | 3 | (d | ) | 529 | 2,995 | 2,626 | 529 | 5,621 | 6,150 | (3,698) | 1995 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fairfield Business Center | 1 | 348 | 1,971 | 683 | 381 | 2,621 | 3,002 | (883) | 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DAY Cargo Center | 5 | - | 4,749 | 531 | - | 5,280 | 5,280 | (1,480) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fairfield Comm Ctr | 1 | (d) | 2,526 | 10,864 | 29 | 2,526 | 10,893 | 13,419 | (86) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monroe Park | 1 | (d) | 7,222 | 30,988 | 301 | 7,222 | 31,289 | 38,511 | (244) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mosteller Dist Ctr | 1 | (d) | 921 | 4,192 | 28 | 921 | 4,220 | 5,141 | (40) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Park I-275 | 2 | (d | ) | 7,109 | 26,097 | 2,627 | 7,109 | 28,724 | 35,833 | (1,815) | 2008, 2012 | 4 | (d) | 15,939 | 63,846 | 3,153 | 15,939 | 66,999 | 82,938 | (4,261) | 2008, 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Sharonville Distribution Center | 2 | (d | ) | 1,202 | - | 14,502 | 2,424 | 13,280 | 15,704 | (5,327) | 1997 | 2 | (d) | 1,202 | - | 15,047 | 2,424 | 13,825 | 16,249 | (6,391) | 1997 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
West Chester Comm Park I | 2 | (d | ) | 1,939 | 8,224 | 202 | 1,939 | 8,426 | 10,365 | (268) | 2012 | 5 | (d) | 9,466 | 39,950 | 2,356 | 9,466 | 42,306 | 51,772 | (1,193) | 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Cincinnati, Ohio | 17 | 16,038 | 60,248 | 39,948 | 18,273 | 97,961 | 116,234 | (28,736) | 23 | 43,127 | 177,132 | 35,756 | 45,329 | 210,686 | 256,015 | (21,412) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Columbus, Ohio | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alum Creek Dist Ctr | 1 | 1,042 | 5,087 | 122 | 1,042 | 5,209 | 6,251 | (204) | 2012 | 1 | 917 | 4,584 | 277 | 917 | 4,861 | 5,778 | (659) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brookham Distribution Center | 2 | 5,964 | 23,858 | 4,063 | 5,965 | 27,920 | 33,885 | (7,674) | 2005 | 2 | 5,964 | 23,858 | 4,946 | 5,965 | 28,803 | 34,768 | (10,113) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Canal Pointe Distribution Center | 1 | 1,237 | 7,013 | 1,469 | 1,280 | 8,439 | 9,719 | (3,808) | 1999 | 1 | 1,237 | 7,013 | 1,728 | 1,280 | 8,698 | 9,978 | (4,572) | 1999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Park South Distribution Center | 7 | (d | ) | 8,484 | 30,385 | 26,735 | 8,876 | 56,728 | 65,604 | (13,970) | 1996, 2012 | 8 | (d) | 10,077 | 40,234 | 29,285 | 10,470 | 69,126 | 79,596 | (18,495) | 1996, 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Charter Street Distribution Center | 1 | (d | ) | 1,245 | 7,055 | 726 | 1,245 | 7,781 | 9,026 | (3,499) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Columbus West Ind Ctr | 1 | (d) | 427 | 2,600 | - | 427 | 2,600 | 3,027 | (29) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate Park West | 2 | (d | ) | 679 | 3,847 | 2,201 | 679 | 6,048 | 6,727 | (3,701) | 1996 | 2 | (d) | 994 | 6,150 | 1,409 | 994 | 7,559 | 8,553 | (2,494) | 1996, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Crosswinds Dist Ctr | 1 | (d) | 3,058 | 19,240 | - | 3,058 | 19,240 | 22,298 | (162) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Etna Distribution Center | 1 | 1,669 | - | 19,785 | 1,669 | 19,785 | 21,454 | (3,060) | 2007 | 4 | (d) | 10,789 | 35,577 | 42,552 | 10,789 | 78,129 | 88,918 | (5,941) | 2007, 2013, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fisher Distribution Center | 1 | 1,197 | 6,785 | 4,361 | 1,197 | 11,146 | 12,343 | (6,287) | 1995 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Trade Center I | 4 | (d | ) | 4,696 | 26,999 | 7,381 | 5,161 | 33,915 | 39,076 | (15,783) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
International Street Comm Ctr | 2 | (d | ) | 1,503 | 6,356 | 129 | 1,503 | 6,485 | 7,988 | (207) | 2012 | 2 | 1,503 | 6,356 | 383 | 1,503 | 6,739 | 8,242 | (735) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lockbourne Dist Ctr | 1 | 540 | 3,030 | 157 | 540 | 3,187 | 3,727 | (156) | 2012 | 1 | 540 | 3,030 | 352 | 540 | 3,382 | 3,922 | (575) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New World Distribution Center | 1 | 207 | 1,173 | 2,414 | 207 | 3,587 | 3,794 | (2,407) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
South Park Distribution Center | 2 | (d | ) | 3,343 | 15,182 | 3,109 | 3,343 | 18,291 | 21,634 | (6,095) | 1999, 2005 | 2 | (d) | 3,343 | 15,182 | 3,370 | 3,343 | 18,552 | 21,895 | (7,766) | 1999, 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Westbelt Business Center | 3 | 1,777 | 7,168 | 1,769 | 1,777 | 8,937 | 10,714 | (1,745) | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Westpointe Distribution Center | 2 | (d | ) | 1,446 | 7,601 | 868 | 1,446 | 8,469 | 9,915 | (2,445) | 2007 | 2 | 1,446 | 7,601 | 1,298 | 1,446 | 8,899 | 10,345 | (3,474) | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Columbus, Ohio | 31 | 35,029 | 151,539 | 75,289 | 35,930 | 225,927 | 261,857 | (71,041) | 27 | 40,295 | 171,425 | 85,600 | 40,732 | 256,588 | 297,320 | (55,015) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dallas/Fort Worth, Texas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Addison Technology Center | 1 | 858 | 3,996 | - | 858 | 3,996 | 4,854 | (239) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arlington Corp Ctr | 1 | 3,212 | 13,971 | 1 | 3,437 | 13,747 | 17,184 | (68) | 2012 | 3 | (d) | 6,509 | 28,032 | 125 | 6,509 | 28,157 | 34,666 | (1,268) | 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Centerport Distribution Center | 1 | 1,250 | 7,082 | 1,175 | 1,250 | 8,257 | 9,507 | (3,810) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dallas Corporate Center | 11 | (d | ) | 6,449 | 5,441 | 33,056 | 6,645 | 38,301 | 44,946 | (15,945) | 1996, 1997, 1998, 1999, 2012 | 11 | (d) | 6,449 | 5,441 | 34,632 | 6,645 | 39,877 | 46,522 | (18,407) | 1996, 1997, 1998, 1999, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dallas Industrial | 12 | 7,180 | 26,514 | 647 | 7,180 | 27,161 | 34,341 | (1,776) | 2011 | 12 | 7,180 | 26,514 | 2,682 | 7,180 | 29,196 | 36,376 | (4,290) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DFW Cargo Center 1 | 1 | - | 35,117 | 973 | - | 36,090 | 36,090 | (5,105) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DFW Cargo Center 2 | 1 | - | 27,916 | 200 | - | 28,116 | 28,116 | (3,849) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DFW Cargo Center East | 3 | - | 19,730 | 333 | - | 20,063 | 20,063 | (4,469) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Flower Mound Distribution Center | 1 | (d | ) | 5,157 | 20,991 | 2,443 | 5,157 | 23,434 | 28,591 | (4,311) | 2007 | 1 | (d) | 5,157 | 20,991 | 2,470 | 5,157 | 23,461 | 28,618 | (6,250) | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Freeport Corp Ctr | 2 | (d | ) | 8,183 | 35,161 | 277 | 8,183 | 35,438 | 43,621 | (1,171) | 2012 | 5 | (d) | 15,415 | 65,273 | 702 | 15,415 | 65,975 | 81,390 | (4,424) | 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Freeport Distribution Center | 4 | (d | ) | 1,393 | 5,549 | 5,330 | 1,440 | 10,832 | 12,272 | (5,664) | 1996, 1997, 1998 | 4 | 1,393 | 5,549 | 5,947 | 1,440 | 11,449 | 12,889 | (6,427) | 1996, 1997, 1998 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Great Southwest Corp Ctr | 3 | 4,476 | 19,302 | 210 | 4,476 | 19,512 | 23,988 | (153) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Great Southwest Distribution Center | 32 | (d | ) | 40,791 | 177,237 | 26,002 | 40,793 | 203,237 | 244,030 | (59,028) | 1995, 1996, 1997, 1999, 2000, 2001, 2002, 2005, 2012 | 24 | (d) | 38,395 | 160,253 | 25,811 | 38,395 | 186,064 | 224,459 | (58,819) | 1995, 1996, 1997, 1999, 2000, 2001, 2002, 2005, 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater Dallas Industrial Port | 3 | 3,525 | 16,375 | 181 | 3,525 | 16,556 | 20,081 | (1,065) | 2011 | 3 | 3,525 | 16,375 | 967 | 3,525 | 17,342 | 20,867 | (2,481) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lancaster Distribution Center | 2 | (d | ) | 5,350 | 14,362 | 24,470 | 5,005 | 39,177 | 44,182 | (4,483) | 2007, 2008 | 5 | (d) | 20,635 | 14,362 | 93,709 | 19,969 | 108,737 | 128,706 | (9,024) | 2007, 2008, 2013, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Lincoln Industrial Center | 1 | 738 | 1,600 | 33 | 738 | 1,633 | 2,371 | (148) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lonestar Portfolio | 3 | 4,736 | 13,035 | 261 | 4,736 | 13,296 | 18,032 | (996) | 2011 | 3 | 4,736 | 13,035 | 2,835 | 4,736 | 15,870 | 20,606 | (2,374) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mesquite Dist Ctr | 1 | (d | ) | 3,128 | 13,217 | 20 | 3,128 | 13,237 | 16,365 | (427) | 2012 | 2 | (d) | 8,355 | 35,440 | 104 | 8,355 | 35,544 | 43,899 | (1,781) | 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Northfield Dist. Center | 8 | 10,106 | 54,061 | 1,876 | 10,106 | 55,937 | 66,043 | (2,858) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mesquite Dist III | 1 | 1,691 | - | 11,894 | 1,691 | 11,894 | 13,585 | (564) | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northgate Distribution Center | 8 | (d | ) | 10,323 | 51,100 | 5,525 | 10,809 | 56,139 | 66,948 | (13,869) | 1999, 2005, 2008, 2012 | 10 | (d) | 13,001 | 62,680 | 6,772 | 13,488 | 68,965 | 82,453 | (18,380) | 1999, 2005, 2008, 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pinnacle Park Distribution Center | 1 | (d | ) | 1,657 | 6,940 | 43 | 1,657 | 6,983 | 8,640 | (221) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Richardson Tech Center SGP | 2 | 1,462 | 4,557 | 154 | 1,462 | 4,711 | 6,173 | (307) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Royal Distribution Center | 1 | 811 | 4,598 | 1,109 | 811 | 5,707 | 6,518 | (2,223) | 2001 | 1 | 811 | 4,598 | 2,235 | 811 | 6,833 | 7,644 | (2,725) | 2001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stemmons Distribution Center | 1 | 272 | 1,544 | 836 | 272 | 2,380 | 2,652 | (1,464) | 1995 | 1 | 272 | 1,544 | 962 | 272 | 2,506 | 2,778 | (1,667) | 1995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stemmons Industrial Center | 8 | 1,653 | 10,526 | 5,332 | 1,653 | 15,858 | 17,511 | (9,753) | 1994, 1995, 1996, 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trinity Mills Distribution Center | 4 | (d | ) | 3,181 | 18,090 | 4,267 | 3,181 | 22,357 | 25,538 | (10,796) | 1996, 1999, 2001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valwood Business Center | 3 | 2,842 | 11,715 | 1,054 | 2,842 | 12,769 | 15,611 | (3,405) | 2001, 2006 |
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stemmons Industrial Center | 8 | 1,653 | 10,526 | 6,198 | 1,653 | 16,724 | 18,377 | (11,143) | 1994, 1995, 1996, 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trinity Mills Distribution Center | 1 | (d) | 735 | 3,774 | 1,020 | 735 | 4,794 | 5,529 | (2,535) | 1999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valwood Business Center | 5 | (d) | 4,679 | 19,674 | 1,146 | 4,679 | 20,820 | 25,499 | (4,485) | 2001, 2006, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valwood Distribution Center | 1 | 850 | 4,890 | 885 | 850 | 5,775 | 6,625 | (2,509) | 1999 | 5 | (d) | 4,742 | 21,498 | 1,289 | 4,742 | 22,787 | 27,529 | (3,179) | 1999, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valwood Industrial | 2 | 1,802 | 9,658 | 186 | 1,802 | 9,844 | 11,646 | (694) | 2011 | 2 | 1,802 | 9,658 | 575 | 1,802 | 10,233 | 12,035 | (1,620) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dallas/Fort Worth, Texas | 114 | 126,909 | 532,210 | 115,163 | 127,520 | 646,762 | 774,282 | (147,230) | 115 | 151,611 | 627,282 | 203,791 | 151,675 | 831,009 | 982,684 | (175,419) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Denver, Colorado | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Denver Business Center | 5 | (d | ) | 3,644 | 16,429 | 197 | 3,662 | 16,608 | 20,270 | (1,148) | 2002, 2012 | 3 | (d) | 3,142 | 13,396 | 775 | 3,142 | 14,171 | 17,313 | (1,312) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Havana Dist Ctr | 1 | (d) | 1,421 | 5,958 | 70 | 1,421 | 6,028 | 7,449 | (65) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pagosa Distribution Center | 1 | (d | ) | 406 | 2,322 | 1,427 | 406 | 3,749 | 4,155 | (2,476) | 1993 | 1 | (d) | 398 | 2,322 | 1,675 | 398 | 3,997 | 4,395 | (2,849) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Peoria Dist Ctr | 2 | (d) | 4,129 | 17,465 | 14 | 4,129 | 17,479 | 21,608 | (138) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stapleton Business Center | 12 | (d | ) | 34,634 | 139,257 | 6,962 | 34,635 | 146,218 | 180,853 | (36,247) | 2005 | 12 | (d) | 34,634 | 139,257 | 9,384 | 34,635 | 148,640 | 183,275 | (47,204) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Upland Distribution Center | 3 | 385 | 4,421 | 4,641 | 398 | 9,049 | 9,447 | (4,570) | 1994,1995 | 6 | (d) | 4,064 | 19,844 | 5,335 | 4,077 | 25,166 | 29,243 | (5,414) | 1994, 1995, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Upland Distribution Center II | 3 | 1,295 | 5,159 | 5,792 | 1,328 | 10,918 | 12,246 | (7,256) | 1993 | 2 | (d) | 1,396 | 5,603 | 2,136 | 1,409 | 7,726 | 9,135 | (2,756) | 1993, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Denver, Colorado | 24 | 40,364 | 167,588 | 19,019 | 40,429 | 186,542 | 226,971 | (51,697) | 27 | 49,184 | 203,845 | 19,389 | 49,211 | 223,207 | 272,418 | (59,738) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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El Paso, Texas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Billy the Kid Distribution Center | 1 | 273 | 1,547 | 1,660 | 273 | 3,207 | 3,480 | (2,088) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northwestern Corporate Center | 7 | (d) | 6,450 | 23,222 | 21,727 | 7,455 | 43,944 | 51,399 | (11,085) | | 1992, 1993, 1994, 1997, 2012 | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vista Corporate Center | 1 | 649 | 6,220 | - | 649 | 6,220 | 6,869 | (48) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vista Del Sol Ind Ctr III | 1 | 2,040 | 8,840 | - | 2,040 | 8,840 | 10,880 | (43) | 2012 | 1 | 2,040 | 8,840 | 85 | 2,040 | 8,925 | 10,965 | (739) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vista Del Sol Industrial Center II | 3 | 4,235 | 16,385 | 7,860 | 4,665 | 23,815 | 28,480 | (4,066) | 1997, 1998, 2012 | 2 | 366 | - | 7,829 | 796 | 7,399 | 8,195 | (3,931) | 1997, 1998 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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El Paso, Texas | 12 | 12,998 | 49,994 | 31,247 | 14,433 | 79,806 | 94,239 | (17,282) | 4 | 3,055 | 15,060 | 7,914 | 3,485 | 22,544 | 26,029 | (4,718) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Houston, Texas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Blalock Distribution Center | 3 | (d) | 4,762 | 20,903 | 2,429 | 4,761 | 23,333 | 28,094 | (2,352) | 2002, 2012 | 3 | (d) | 5,032 | 21,983 | 3,178 | 5,031 | 25,162 | 30,193 | (4,540) | 2002, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crosstimbers Distribution Center | 1 | 359 | 2,035 | 1,191 | 359 | 3,226 | 3,585 | (2,056) | 1994 | 1 | 359 | 2,035 | 1,284 | 359 | 3,319 | 3,678 | (2,350) | 1994 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IAH Cargo Center 1 | 1 | - | 13,267 | 252 | - | 13,519 | 13,519 | (904) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jersey Village Corp Ctr | 2 | (d) | 9,506 | 39,840 | 38 | 9,506 | 39,878 | 49,384 | (1,268) | 2012 | 4 | (d) | 17,971 | 74,804 | 309 | 17,971 | 75,113 | 93,084 | (4,553) | 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kempwood Business Center | 4 | 1,746 | 9,894 | 3,023 | 1,746 | 12,917 | 14,663 | (5,648) | 2001 | 4 | 1,746 | 9,894 | 3,504 | 1,746 | 13,398 | 15,144 | (6,763) | 2001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northpark Distribution Center | 3 | (d) | 3,873 | 16,568 | 2,899 | 3,873 | 19,467 | 23,340 | (2,829) | 2006, 2008 | 10 | (d) | 13,003 | 37,428 | 23,729 | 13,003 | 61,157 | 74,160 | (5,023) | 2006, 2008, 2012, 2013, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Perimeter Distribution Center | 2 | 813 | 4,604 | 1,489 | 813 | 6,093 | 6,906 | (3,072) | 1999 | 2 | 676 | 4,604 | 1,004 | 676 | 5,608 | 6,284 | (2,878) | 1999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pine Forest Business Center | 9 | 2,665 | 14,132 | 7,284 | 2,665 | 21,416 | 24,081 | (12,878) | 1993, 1995 | 11 | (d) | 6,042 | 28,833 | 8,637 | 6,042 | 37,470 | 43,512 | (15,103) | 1993, 1995, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pine North Distribution Center | 2 | 847 | 4,800 | 1,092 | 847 | 5,892 | 6,739 | (2,901) | 1999 | 2 | 847 | 4,800 | 1,203 | 847 | 6,003 | 6,850 | (3,366) | 1999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pinemont Distribution Center | 2 | 642 | 3,636 | 862 | 642 | 4,498 | 5,140 | (2,225) | 1999 | 2 | 642 | 3,636 | 1,000 | 642 | 4,636 | 5,278 | (2,601) | 1999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Post Oak Business Center | 11 | 2,334 | 11,655 | 8,527 | 2,334 | 20,182 | 22,516 | (12,178) | 1993, 1994, 1996 | 11 | 2,334 | 11,655 | 9,663 | 2,334 | 21,318 | 23,652 | (14,285) | 1993, 1994, 1996 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Post Oak Distribution Center | 5 | 1,522 | 8,758 | 5,212 | 1,522 | 13,970 | 15,492 | (9,612) | 1993, 1994 | 5 | 1,522 | 8,758 | 6,107 | 1,522 | 14,865 | 16,387 | (10,719) | 1993, 1994 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
South Loop Distribution Center | 2 | 418 | 1,943 | 1,904 | 418 | 3,847 | 4,265 | (2,308) | 1994 | 2 | 418 | 1,943 | 2,213 | 418 | 4,156 | 4,574 | (2,699) | 1994 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Southland Distribution Center | 2 | 2,444 | 12,190 | 1,899 | 2,443 | 14,090 | 16,533 | (2,958) | 2002, 2012 | 2 | 2,505 | 12,437 | 2,000 | 2,505 | 14,437 | 16,942 | (4,414) | 2002, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sugarland Corp Ctr | 2 | (d) | 3,506 | 14,856 | - | 3,506 | 14,856 | 18,362 | (115) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
West by Northwest Industrial Center | 6 | (d) | 4,543 | 19,310 | 4,393 | 4,739 | 23,507 | 28,246 | (4,422) | 1993, 1994, 2012 | 9 | (d) | 11,316 | 47,649 | 3,713 | 11,456 | 51,222 | 62,678 | (5,342) | 1993, 1994, 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
White Street Distribution Center | 1 | 469 | 2,656 | 1,828 | 469 | 4,484 | 4,953 | (2,778) | 1995 | 1 | 469 | 2,656 | 2,420 | 469 | 5,076 | 5,545 | (3,308) | 1995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wingfoot Dist Ctr | 1 | (d) | 1,702 | 7,510 | 33 | 1,702 | 7,543 | 9,245 | (300) | 2012 | 2 | 1,976 | 8,606 | 3,436 | 1,976 | 12,042 | 14,018 | (1,226) | 2012, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
World Houston Dist Ctr | 1 | 1,529 | 6,326 | - | 1,529 | 6,326 | 7,855 | (28) | 2012 | 1 | 1,529 | 6,326 | 42 | 1,529 | 6,368 | 7,897 | (486) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Houston, Texas | 57 | 40,174 | 186,760 | 44,103 | 40,368 | 230,669 | 271,037 | (69,813) | 75 | 71,893 | 316,170 | 73,694 | 72,032 | 389,725 | 461,757 | (90,675) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Indianapolis, Indiana | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Airport Bus Ctr | 2 | (d) | 1,667 | 7,244 | 6 | 1,667 | 7,250 | 8,917 | (58) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Airtech Park | 1 | (d) | 7,305 | 31,388 | 1 | 7,305 | 31,389 | 38,694 | (250) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eastside Distribution Center | 1 | 228 | 1,187 | 1,803 | 299 | 2,919 | 3,218 | (1,477) | 1995 | 1 | 228 | 1,187 | 2,068 | 299 | 3,184 | 3,483 | (1,807) | 1995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
North by Northeast Corporate Center | 1 | 1,058 | - | 8,236 | 1,059 | 8,235 | 9,294 | (3,974) | 1995 | 1 | 1,058 | - | 9,157 | 1,059 | 9,156 | 10,215 | (4,848) | 1995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
North Plainfield Park Dist Ctr | 1 | (d) | 8,562 | 36,687 | - | 8,562 | 36,687 | 45,249 | (289) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Park 100 Industrial Center | 17 | (d) | 11,982 | 49,334 | 15,649 | 11,982 | 64,983 | 76,965 | (15,524) | 1995, 2012 | 17 | (d) | 10,410 | 43,048 | 21,491 | 10,410 | 64,539 | 74,949 | (21,704) | 1995, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Park 267 | 1 | 3,705 | 15,695 | - | 3,705 | 15,695 | 19,400 | (122) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shadeland Industrial Center | 3 | 428 | 2,431 | 2,526 | 429 | 4,956 | 5,385 | (3,343) | 1995 | 3 | 428 | 2,431 | 3,150 | 429 | 5,580 | 6,009 | (3,782) | 1995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Indianapolis, Indiana | 22 | 13,696 | 52,952 | 28,214 | 13,769 | 81,093 | 94,862 | (24,318) | 27 | 33,363 | 137,680 | 35,873 | 33,436 | 173,480 | 206,916 | (32,860) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jacksonville, Florida | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
JAX Cargo Center | 1 | - | 2,892 | 176 | - | 3,068 | 3,068 | (894) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jacksonville, Florida | 1 | - | 2,892 | 176 | - | 3,068 | 3,068 | (894) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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MCI Cargo Center 1 | 1 | - | 2,781 | 11 | - | 2,792 | 2,792 | (1,297) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MCI Cargo Center 2 | 1 | - | 11,630 | - | - | 11,630 | 11,630 | (2,557) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Kansas City, Kansas | 2 | - | 14,411 | 11 | - | 14,422 | 14,422 | (3,854) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Las Vegas, Nevada | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Black Mountain Distribution Center | 2 | 1,108 | - | 7,583 | 1,206 | 7,485 | 8,691 | (3,547 | ) | 1997 | 2 | 1,108 | - | 8,022 | 1,206 | 7,924 | 9,130 | (3,972) | 1997 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cameron Business Center | 1 | 1,634 | 9,255 | 890 | 1,634 | 10,145 | 11,779 | (4,529 | ) | 1999 | 1 | 1,634 | 9,255 | 1,580 | 1,634 | 10,835 | 12,469 | (5,332) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Las Vegas Corporate Center | 3 | (d) | 7,800 | 32,899 | - | 7,800 | 32,899 | 40,699 | (251) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunrise Ind Park | 1 | 1,400 | 5,600 | 120 | 1,401 | 5,719 | 7,120 | (197 | ) | 2011 | 9 | 21,369 | 92,503 | 2,578 | 21,369 | 95,081 | 116,450 | (5,132) | 2011, 2013, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
West One Business Center | 4 | 2,468 | 13,985 | 4,065 | 2,468 | 18,050 | 20,518 | (9,729 | ) | 1996 | 4 | 2,468 | 13,985 | 5,261 | 2,468 | 19,246 | 21,714 | (11,475) | 1996 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Las Vegas, Nevada | 8 | 6,610 | 28,840 | 12,658 | 6,709 | 41,399 | 48,108 | (18,002) | 19 | 34,379 | 148,642 | 17,441 | 34,477 | 165,985 | 200,462 | (26,162) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Louisville, Kentucky | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cedar Grove Distribution Center | 3 | 9,475 | 45,421 | 2,370 | 9,474 | 47,792 | 57,266 | (6,603) | 2005, 2008, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commerce Crossings Distribution Center | 1 | 1,912 | 7,649 | 113 | 1,912 | 7,762 | 9,674 | (1,908) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
I-65 Meyer Dist. Center | 2 | (d) | 7,770 | 15,282 | 23,940 | 8,077 | 38,915 | 46,992 | (4,534) | 2006, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Cut Road Dist Ctr | 1 | (d) | 2,711 | 11,694 | 235 | 2,711 | 11,929 | 14,640 | (395) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Riverport Distribution Center | 1 | 1,515 | 8,585 | 2,596 | 1,515 | 11,181 | 12,696 | (5,389) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Louisville, Kentucky | 8 | 23,383 | 88,631 | 29,254 | 23,689 | 117,579 | 141,268 | (18,829) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Louisville, Kentucky | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cedar Grove Distribution Center | 3 | 9,611 | 45,964 | 3,582 | 9,610 | 49,547 | 59,157 | (10,348) | 2005, 2008, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commerce Crossings Distribution Center | 1 | 1,912 | 7,649 | 186 | 1,912 | 7,835 | 9,747 | (2,454) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
I-65 Meyer Dist. Center | 2 | (d | ) | 7,770 | 15,282 | 24,535 | 8,077 | 39,510 | 47,587 | (7,640) | 2006, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Cut Road Dist Ctr | 1 | 2,711 | 11,694 | 621 | 2,711 | 12,315 | 15,026 | (1,378) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Riverport Distribution Center | 1 | 1,515 | 8,585 | 2,824 | 1,515 | 11,409 | 12,924 | (6,894) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Louisville, Kentucky | 8 | �� | 23,519 | 89,174 | 31,748 | 23,825 | 120,616 | 144,441 | (28,714) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Memphis, Tennessee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Delp Distribution Center | 3 | 1,068 | 10,546 | (785) | 1,068 | 9,761 | 10,829 | (6,376) | 1995 | 3 | 1,068 | 10,546 | 583 | 1,068 | 11,129 | 12,197 | (7,304) | 1995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DeSoto Distribution Center | 1 | 4,761 | - | 26,809 | 4,761 | 26,809 | 31,570 | (3,706) | 2007 | 2 | (d | ) | 5,769 | 4,359 | 27,079 | 5,769 | 31,438 | 37,207 | (5,904) | 2007, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Memphis Distribution Center | 4 | (d) | 9,506 | 42,731 | 1,177 | 9,507 | 43,907 | 53,414 | (2,665) | 2002, 2012 | 4 | 9,506 | 42,731 | 1,365 | 9,390 | 44,212 | 53,602 | (6,307) | 2002, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Memphis Ind Park | 2 | 3,279 | 14,554 | 67 | 3,279 | 14,621 | 17,900 | (510) | 2012 | 2 | 3,252 | 14,448 | 190 | 3,252 | 14,638 | 17,890 | (1,694) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Olive Branch Distribution Center | 1 | 6,584 | 30,592 | 72 | 6,584 | 30,664 | 37,248 | (1,144) | 2012 | 1 | (d | ) | 6,719 | 31,134 | 328 | 6,719 | 31,462 | 38,181 | (3,856) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Raines Distribution Center | 1 | 1,635 | 4,262 | 9,987 | 1,635 | 14,249 | 15,884 | (8,609) | 1998 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stateline Park | 1 | 3,943 | 17,714 | 19 | 3,943 | 17,733 | 21,676 | (150) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Willow Lake Distribution Center | 1 | 613 | 3,474 | (59) | 613 | 3,415 | 4,028 | (1,838) | 1999 | 1 | 613 | 3,474 | (25) | 613 | 3,449 | 4,062 | (2,068) | 1999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Memphis, Tennessee | 13 | 27,446 | 106,159 | 37,268 | 27,447 | 143,426 | 170,873 | (24,848) | 14 | 30,870 | 124,406 | 29,539 | 30,754 | 154,061 | 184,815 | (27,283) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nashville, Tennessee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bakertown Distribution Center | 2 | 463 | 2,626 | 962 | 463 | 3,588 | 4,051 | (2,128) | 1995 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CentrePointe Distribution Center | 2 | (d | ) | 3,760 | 15,042 | 72 | 3,760 | 15,114 | 18,874 | (525) | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Elam Farms Park | 1 | 2,097 | 8,386 | 1,834 | 2,097 | 10,220 | 12,317 | (585) | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
I-40 Industrial Center | 5 | (d) | 3,122 | 16,075 | 3,167 | 3,123 | 19,241 | 22,364 | (6,529) | 1995, 1996, 1999, 2012 | 4 | 3,075 | 15,333 | 3,713 | 3,075 | 19,046 | 22,121 | (7,202) | 1995, 1996, 1999, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interchange City Distribution Center | 3 | (d) | 2,844 | 13,939 | 4,467 | 3,358 | 17,892 | 21,250 | (2,936) | 1998, 2012 | 11 | (d | ) | 11,460 | 51,905 | 1,640 | 11,460 | 53,545 | 65,005 | (2,203) | 1999, 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Space Park South Distribution Center | 15 | 3,499 | 19,830 | 12,789 | 3,499 | 32,619 | 36,118 | (20,463) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Southpark Distribution Center | 4 | (d | ) | 11,834 | 47,336 | 626 | 11,834 | 47,962 | 59,796 | (1,654) | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nashville, Tennessee | 25 | 9,928 | 52,470 | 21,385 | 10,443 | 73,340 | 83,783 | (32,056) | 22 | 32,226 | 138,002 | 7,885 | 32,226 | 145,887 | 178,113 | (12,169) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Bellmawr Distribution Center | 1 | 211 | 1,197 | 421 | 211 | 1,618 | 1,829 | (914) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Brunswick Distribution Center | 2 | 870 | 4,928 | 2,550 | 870 | 7,478 | 8,348 | (4,500) | 1997 | 2 | 870 | 4,928 | 2,855 | 870 | 7,783 | 8,653 | (5,055) | 1997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CenterPoint Dist Ctr | 1 | (d) | 4,258 | 11,070 | 67 | 4,258 | 11,137 | 15,395 | (448) | 2012 | 1 | 2,839 | 12,490 | 1,753 | 2,839 | 14,243 | 17,082 | (1,684) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chester Distribution Center | 1 | 548 | 5,319 | 300 | 548 | 5,619 | 6,167 | (3,779) | 2002 | 1 | 548 | 5,319 | 300 | 548 | 5,619 | 6,167 | (4,169) | 2002 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Clifton Dist Ctr | 1 | 8,064 | 12,096 | 330 | 8,064 | 12,426 | 20,490 | (1,058) | 2010 | 1 | 8,064 | 12,096 | 1,322 | 8,064 | 13,418 | 21,482 | (2,031) | 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cranbury Bus Park | 5 | (d) | 19,866 | 50,872 | 356 | 15,068 | 56,026 | 71,094 | (636) | 2012 | 8 | (d | ) | 43,056 | 93,306 | 2,013 | 43,056 | 95,319 | 138,375 | (5,391) | 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dellamor | 7 | (d) | 6,710 | 35,478 | 498 | 6,710 | 35,976 | 42,686 | (2,562) | 2011 | 7 | 6,710 | 35,478 | 2,029 | 6,710 | 37,507 | 44,217 | (5,876) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Docks Corner SG (Phase II) | 1 | 16,232 | 19,264 | 1,138 | 16,232 | 20,402 | 36,634 | (2,303) | 2011 | 1 | 16,232 | 19,264 | 5,677 | 16,232 | 24,941 | 41,173 | (5,680) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exit 10 Distribution Center | 7 | (d) | 24,152 | 130,270 | 3,982 | 24,152 | 134,252 | 158,404 | (32,229) | 2005, 2010 | 7 | (d | ) | 24,152 | 130,270 | 7,881 | 24,152 | 138,151 | 162,303 | (42,058) | 2005, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exit 8A Distribution Center | 1 | 7,626 | 44,103 | 522 | 7,787 | 44,464 | 52,251 | (10,830) | 2005 | 2 | (d | ) | 21,164 | 87,001 | 563 | 21,164 | 87,564 | 108,728 | (14,166) | 2005, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fairfalls Portfolio | 28 | (d) | 20,388 | 64,619 | 1,457 | 20,388 | 66,076 | 86,464 | (4,809) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Franklin Comm Ctr | 1 | 9,304 | 23,768 | 59 | 9,304 | 23,827 | 33,131 | (1,166) | 2011 | 1 | 9,304 | 23,768 | 81 | 9,304 | 23,849 | 33,153 | (2,641) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Highway 17 55 Madis | 1 | 2,937 | 13,477 | 16 | 2,937 | 13,493 | 16,430 | (930) | 2011 | 1 | 2,937 | 13,477 | 1,057 | 2,937 | 14,534 | 17,471 | (2,114) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
JFK Cargo Center 75_77 | 2 | - | 35,916 | 3,031 | - | 38,947 | 38,947 | (15,166) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kilmer Distribution Center | 4 | (d) | 2,526 | 14,313 | 3,383 | 2,526 | 17,696 | 20,222 | (10,297) | 1996 | 4 | (d | ) | 2,526 | 14,313 | 4,206 | 2,526 | 18,519 | 21,045 | (11,514) | 1996 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Liberty Log Ctr | 1 | 3,273 | 24,029 | 15 | 3,273 | 24,044 | 27,317 | (1,071) | 2011 | 1 | 3,273 | 24,029 | 82 | 3,273 | 24,111 | 27,384 | (2,429) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Linden Industrial | 1 | 1,321 | 7,523 | 328 | 1,321 | 7,851 | 9,172 | (451) | 2011 | 1 | 1,321 | 7,523 | 517 | 1,321 | 8,040 | 9,361 | (1,077) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mahwah Corporate Center | 4 | 12,695 | 27,342 | 8 | 12,695 | 27,350 | 40,045 | (1,678) | 2011 | 4 | 12,695 | 27,342 | 894 | 12,695 | 28,236 | 40,931 | (3,813) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meadow Lane | 1 | 1,036 | 6,388 | - | 1,036 | 6,388 | 7,424 | (432) | 2011 | 1 | 1,036 | 6,388 | 2 | 1,036 | 6,390 | 7,426 | (977) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meadowland Distribution Center | 4 | (d) | 10,271 | 57,480 | 3,328 | 10,271 | 60,808 | 71,079 | (14,909) | 2005 | 4 | (d | ) | 10,271 | 57,480 | 4,923 | 10,271 | 62,403 | 72,674 | (19,387) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Meadowland Industrial Center | 7 | (d) | 4,190 | 13,469 | 16,840 | 4,190 | 30,309 | 34,499 | (17,718) | 1996, 1998 | 7 | (d | ) | 4,190 | 13,469 | 17,338 | 4,190 | 30,807 | 34,997 | (19,933) | 1996, 1998 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Meadowlands ALFII | 3 | (d) | 3,972 | 18,895 | 464 | 3,972 | 19,359 | 23,331 | (1,124) | 2011 | 3 | 3,972 | 18,895 | 3,042 | 3,972 | 21,937 | 25,909 | (2,768) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meadowlands Cross Dock | 1 | 1,607 | 5,049 | 632 | 1,607 | 5,681 | 7,288 | (344) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meadowlands Park | 8 | 6,898 | 41,471 | 729 | 6,898 | 42,200 | 49,098 | (2,815) | 2011 | 8 | 6,898 | 41,471 | 1,790 | 6,898 | 43,261 | 50,159 | (6,510) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mooncreek Distribution Center | 1 | 3,319 | 13,422 | 12 | 3,319 | 13,434 | 16,753 | (984) | 2011 | 1 | 3,319 | 13,422 | 15 | 3,319 | 13,437 | 16,756 | (2,227) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mt. Laurel Distribution Center | 1 | 229 | 951 | 781 | 230 | 1,731 | 1,961 | (713) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Murray Hill Parkway | 2 | 2,907 | 12,040 | 56 | 2,907 | 12,096 | 15,003 | (740) | 2011 | 2 | 2,907 | 12,040 | 225 | 2,907 | 12,265 | 15,172 | (1,686) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
National Dist Ctr | 2 | (d | ) | 2,417 | 4,244 | 128 | 2,417 | 4,372 | 6,789 | (58) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Newark Airport I and II | 2 | 2,757 | 8,749 | - | 2,757 | 8,749 | 11,506 | (509) | 2011 | 2 | 2,757 | 8,749 | 368 | 2,757 | 9,117 | 11,874 | (1,154) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Orchard Hill | 1 | 678 | 3,756 | - | 678 | 3,756 | 4,434 | (272) | 2011 | 1 | 678 | 3,756 | 20 | 678 | 3,776 | 4,454 | (616) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pennsauken Distribution Center | 2 | 192 | 959 | 509 | 203 | 1,457 | 1,660 | (700) | 1999 | 2 | 192 | 959 | 509 | 203 | 1,457 | 1,660 | (827) | 1999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Porete Avenue Warehouse | 1 | 5,386 | 21,869 | 266 | 5,386 | 22,135 | 27,521 | (1,129) | 2011 | 1 | 5,386 | 21,869 | 435 | 5,386 | 22,304 | 27,690 | (2,645) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Port Reading Business Park | 1 | (d) | 3,370 | - | 24,519 | 3,370 | 24,519 | 27,889 | (5,756) | 2005 | 2 | (d | ) | 28,374 | 39,914 | 24,819 | 28,374 | 64,733 | 93,107 | (8,306) | 2005, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ports Jersey City Distribution Center | 1 | 34,133 | - | 60,354 | 34,133 | 60,354 | 94,487 | (663) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portview Commerce Center | 3 | (d) | 9,577 | 21,581 | 19,369 | 9,577 | 40,950 | 50,527 | (1,217) | 2011, 2012 | 3 | (d | ) | 9,577 | 21,581 | 17,790 | 9,797 | 39,151 | 48,948 | (3,267) | 2011, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Rancocas Dist Ctr | 1 | (d) | 6,154 | 15,239 | 4 | 6,154 | 15,243 | 21,397 | (500) | 2012 | 1 | 4,103 | 17,291 | 235 | 4,103 | 17,526 | 21,629 | (1,832) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Secaucus Dist Ctr | 2 | (d | ) | 9,603 | - | 26,882 | 9,603 | 26,882 | 36,485 | (1,384) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Skyland Crossdock | 1 | - | 9,831 | 956 | - | 10,787 | 10,787 | (687) | 2011 | 1 | - | 9,831 | 1,293 | - | 11,124 | 11,124 | (1,825) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
South Jersey Distribution Center | 1 | 6,912 | 17,437 | 181 | 6,912 | 17,618 | 24,530 | (922) | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Teterboro Meadowlands 15 | 1 | (d) | 5,837 | 23,214 | - | 5,837 | 23,214 | 29,051 | (1,363) | 2011 | 1 | 5,837 | 23,214 | - | 5,837 | 23,214 | 29,051 | (3,067) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Two South Middlesex | 1 | 4,389 | 8,410 | - | 4,389 | 8,410 | 12,799 | (647) | 2011 | 1 | 4,389 | 8,410 | 441 | 4,389 | 8,851 | 13,240 | (1,494) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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New Jersey/New York City | 109 | 213,750 | 772,441 | 83,895 | 209,125 | 860,961 | 1,070,086 | (132,220) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Jersey/New York | 91 | 302,642 | 886,940 | 195,051 | 302,873 | 1,081,760 | 1,384,633 | (206,412) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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On Tarmac | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BWI Cargo Center E | 1 | - | 10,725 | 108 | - | 10,833 | 10,833 | (2,019) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DAY Cargo Center | 5 | - | 4,749 | 212 | - | 4,961 | 4,961 | (623) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DFW Cargo Center 1 | �� | 1 | - | 35,117 | 475 | - | 35,592 | 35,592 | (2,198) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DFW Cargo Center 2 | 1 | - | 27,916 | 123 | - | 28,039 | 28,039 | (1,684) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DFW Cargo Center East | 3 | - | 19,730 | 36 | - | 19,766 | 19,766 | (1,959) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IAD Cargo Center 5 | 1 | - | 43,060 | 50 | - | 43,110 | 43,110 | (11,156) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IAH Cargo Center 1 | 1 | - | 13,267 | - | - | 13,267 | 13,267 | - | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
JAX Cargo Center | 1 | - | 2,892 | - | - | 2,892 | 2,892 | (394) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
JFK Cargo Center 75_77 | 2 | - | 35,916 | 1,571 | - | 37,487 | 37,487 | (10,724) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LAX Cargo Center | 3 | - | 19,217 | 13 | - | 19,230 | 19,230 | (2,114) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Norfolk, Virginia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chesapeake Dist Ctr | 1 | 2,335 | 9,665 | - | 2,335 | 9,665 | 12,000 | (72) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Norfolk, Virginia | 1 | 2,335 | 9,665 | - | 2,335 | 9,665 | 12,000 | (72) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MCI Cargo Center 1 | 1 | - | 2,781 | 11 | - | 2,792 | 2,792 | (573) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MCI Cargo Center 2 | 1 | (d) | - | 11,630 | - | - | 11,630 | 11,630 | (1,130) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PDX Cargo Center Airtrans | 2 | - | 13,697 | 16 | - | 13,713 | 13,713 | (1,198) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PHL Cargo Center C2 | 1 | - | 11,966 | 25 | - | 11,991 | 11,991 | (1,911) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RNO Cargo Center 10_11 | 2 | - | 4,265 | - | - | 4,265 | 4,265 | (448) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEA Cargo Center North | 2 | (d) | - | 14,170 | 27 | - | 14,197 | 14,197 | (3,453) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEA Cargo Center South | 1 | - | 2,745 | 10 | - | 2,755 | 2,755 | (1,259) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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On Tarmac | 29 | - | 273,843 | 2,677 | - | 276,520 | 276,520 | (42,843) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Orlando, Florida | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beltway Commerce Center | 3 | 17,082 | 25,526 | 4,235 | 17,082 | 29,761 | 46,843 | (2,506) | 2008 | 3 | 17,082 | 25,526 | 8,595 | 17,082 | 34,121 | 51,203 | (4,497) | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chancellor Distribution Center | 1 | 380 | 2,157 | 2,161 | 380 | 4,318 | 4,698 | (2,495) | 1994 | 1 | 380 | 2,157 | 2,566 | 380 | 4,723 | 5,103 | (2,933) | 1994 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chancellor Square | 3 | 2,087 | 9,708 | 145 | 2,087 | 9,853 | 11,940 | (573) | 2011 | 3 | 2,087 | 9,708 | 2,150 | 2,087 | 11,858 | 13,945 | (1,615) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulate Distribution Center | 3 | 4,148 | 23,617 | 1,754 | 4,148 | 25,371 | 29,519 | (11,900) | 1999 | 5 | (d | ) | 6,105 | 31,961 | 2,111 | 6,105 | 34,072 | 40,177 | (13,678) | 1999, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Davenport Dist Ctr | 1 | 934 | 3,991 | 60 | 934 | 4,051 | 4,985 | (131) | 2012 | 1 | 934 | 3,991 | 96 | 934 | 4,087 | 5,021 | (439) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jacksonville Dist Ctr | 1 | 3,453 | 14,707 | 33 | 3,453 | 14,740 | 18,193 | (683) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LaQuinta Distribution Center | 1 | 354 | 2,006 | 2,034 | 354 | 4,040 | 4,394 | (2,754) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Orlando Central Park | 1 | 1,398 | 5,977 | 11 | 1,398 | 5,988 | 7,386 | (230) | 2012 | 1 | 1,398 | 5,977 | 400 | 1,398 | 6,377 | 7,775 | (765) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Orlando Corp Ctr | 6 | (d | ) | 8,061 | 34,860 | 251 | 8,061 | 35,111 | 43,172 | (279) | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Presidents Drive | 6 | 6,845 | 31,180 | 492 | 6,845 | 31,672 | 38,517 | (2,134) | 2011 | 6 | 6,845 | 31,180 | 3,937 | 6,845 | 35,117 | 41,962 | (5,198) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sand Lake Service Center | 6 | 3,704 | 19,546 | 1,256 | 3,704 | 20,802 | 24,506 | (1,271) | 2011 | 6 | 3,704 | 19,546 | 3,169 | 3,704 | 22,715 | 26,419 | (3,410) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Orlando, Florida | 26 | 40,385 | 138,415 | 12,181 | 40,385 | 150,596 | 190,981 | (24,677) | 32 | 46,596 | 164,906 | 23,275 | 46,596 | 188,181 | 234,777 | (32,814) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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24th Street Industrial Center | 2 | 503 | 2,852 | 1,759 | 561 | 4,553 | 5,114 | (3,133) | 1994 | 2 | 503 | 2,852 | 1,909 | 561 | 4,703 | 5,264 | (3,458 | ) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alameda Distribution Center | 2 | 3,872 | 14,358 | 2,309 | 3,872 | 16,667 | 20,539 | (4,258) | 2005 | 2 | 3,872 | 14,358 | 2,474 | 3,872 | 16,832 | 20,704 | (5,566 | ) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brookridge Dist Ctr | 1 | (d | ) | 3,897 | 16,852 | 7 | 3,897 | 16,859 | 20,756 | (135 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hohokam 10 Business Center | 1 | 1,317 | 7,468 | 1,269 | 1,318 | 8,736 | 10,054 | (3,823) | 1999 | 1 | 1,317 | 7,468 | 1,306 | 1,318 | 8,773 | 10,091 | (4,587 | ) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kyrene Commons Distribution Center | 3 | 1,093 | 5,475 | 2,284 | 1,093 | 7,759 | 8,852 | (4,297) | 1992, 1998, 1999 | 3 | 1,093 | 5,475 | 2,500 | 1,093 | 7,975 | 9,068 | (4,895 | ) | 1992, 1998, 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Papago Distribution Center | 3 | 4,828 | 20,017 | 4,334 | 4,829 | 24,350 | 29,179 | (7,336) | 1994, 2005 | 3 | 4,828 | 20,017 | 4,919 | 4,829 | 24,935 | 29,764 | (9,573 | ) | 1994, 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Phoenix Distribution Center | 1 | 1,441 | 5,578 | 107 | 1,441 | 5,685 | 7,126 | (103) | 2012 | 1 | 1,441 | 5,578 | 216 | 1,441 | 5,794 | �� | 7,235 | (501 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Riverside Dist Ctr (PHX) | 1 | 1,783 | 7,130 | 116 | 1,783 | 7,246 | 9,029 | (328) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Roosevelt Distribution Center | 1 | 1,766 | 7,065 | 116 | 1,766 | 7,181 | 8,947 | (1,768) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
University Dr Distribution Center | 1 | 683 | 2,735 | 225 | 683 | 2,960 | 3,643 | (761) | 2005 | 1 | 683 | 2,735 | 454 | 683 | 3,189 | 3,872 | (1,009 | ) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Watkins Street Distribution Center | 1 | 242 | 1,375 | 477 | 243 | 1,851 | 2,094 | (1,189) | 1995 | 1 | 242 | 1,375 | 596 | 243 | 1,970 | 2,213 | (1,340 | ) | 1995 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wilson Drive Distribution Center | 1 | 1,273 | 5,093 | 884 | 1,273 | 5,977 | 7,250 | (1,411) | 2005 | 1 | 1,273 | 5,093 | 926 | 1,273 | 6,019 | 7,292 | (1,951 | ) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Phoenix, Arizona | 17 | 18,801 | 79,146 | 13,880 | 18,862 | 92,965 | 111,827 | (28,407) | 16 | 19,149 | 81,803 | 15,307 | 19,210 | 97,049 | 116,259 | (33,015 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Clackamas Dist Ctr | 1 | (d) | 1,648 | 6,850 | 19 | 1,648 | 6,869 | 8,517 | (215) | 2012 | 5 | (d | ) | 8,828 | 29,081 | 80 | 8,828 | 29,161 | 37,989 | (841 | ) | 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
PDX Cargo Center Airtrans | 2 | - | 13,697 | 211 | - | 13,908 | 13,908 | (2,725 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PDX Corporate Center East | 4 | (d | ) | 7,126 | 22,413 | 47 | 7,126 | 22,460 | 29,586 | (171 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PDX Corporate Center North Phase II | 1 | (d)(e) | 5,051 | 9,895 | 1,687 | 5,051 | 11,582 | 16,633 | (1,345) | 2008 | 4 | (d | )(e) | 10,293 | 26,183 | 1,835 | 10,293 | 28,018 | 38,311 | (2,290 | ) | 2008, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Southshore Corporate Center | 1 | (d)(e) | 3,521 | 13,915 | (294) | 3,578 | 13,564 | 17,142 | (2,900) | 2006 | 2 | (d | )(e) | 7,059 | 24,799 | (251 | ) | 7,117 | 24,490 | 31,607 | (3,934 | ) | 2006, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Wilsonville Corporate Center | 3 | (d) | 1,570 | - | 7,808 | 1,588 | 7,790 | 9,378 | (4,371) | 1995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Portland, Oregon | 6 | 11,790 | 30,660 | 9,220 | 11,865 | 39,805 | 51,670 | (8,831) | 17 | 33,306 | 116,173 | 1,922 | 33,364 | 118,037 | 151,401 | (9,961 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Reno, Nevada | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Damonte Ranch Dist Ctr | 2 | (d) | 7,056 | 29,742 | 132 | 7,056 | 29,874 | 36,930 | (957) | 2012 | 3 | (d | ) | 8,764 | 37,135 | 877 | 8,764 | 38,012 | 46,776 | (3,290 | ) | 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Golden Valley Distribution Center | 1 | 940 | 13,686 | 2,125 | 2,415 | 14,336 | 16,751 | (3,521) | 2005 | 1 | 940 | 13,686 | 2,223 | 2,415 | 14,434 | 16,849 | (4,570 | ) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meredith Kleppe Business Center | 1 | 526 | 753 | 3,594 | 526 | 4,347 | 4,873 | (2,771) | 1993 | 5 | (d | ) | 2,988 | 11,271 | 3,674 | 2,988 | 14,945 | 17,933 | (3,274 | ) | 1993, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Packer Way Distribution Center | 2 | 506 | 2,879 | 1,656 | 506 | 4,535 | 5,041 | (3,163) | 1993 | 2 | 506 | 2,879 | 1,921 | 506 | 4,800 | 5,306 | (3,480 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
RNO Cargo Center 10_11 | 2 | - | 4,265 | 306 | - | 4,571 | 4,571 | (1,103 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tahoe-Reno Industrial Center | 1 | 3,281 | - | 23,732 | 3,281 | 23,732 | 27,013 | (3,267) | 2007 | 1 | 3,281 | - | 23,844 | 3,281 | 23,844 | 27,125 | (4,971 | ) | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vista Industrial Park | 6 | (d) | 5,923 | 26,807 | 8,960 | 5,923 | 35,767 | 41,690 | (14,786) | 1994, 2001 | 6 | (d | ) | 5,923 | 26,807 | 10,192 | 5,923 | 36,999 | 42,922 | (17,670 | ) | 1994, 2001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Reno, Nevada | 13 | 18,232 | 73,867 | 40,199 | 19,707 | 112,591 | 132,298 | (28,465) | 20 | 22,402 | 96,043 | 43,037 | 23,877 | 137,605 | 161,482 | (38,358 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Clearfield Ind Ctr | 1 | 3,485 | 15,581 | - | 3,485 | 15,581 | 19,066 | (184 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crossroads Corp Ctr | 1 | 1,549 | 6,549 | 63 | 1,549 | 6,612 | 8,161 | (214) | 2012 | 2 | (d | ) | 4,007 | 16,855 | 106 | 4,005 | 16,963 | 20,968 | (794 | ) | 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Salt Lake City, Utah | 1 | 1,549 | 6,549 | 63 | 1,549 | 6,612 | 8,161 | (214) | 3 | 7,492 | 32,436 | 106 | 7,490 | 32,544 | 40,034 | (978 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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San Antonio, Texas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Coliseum Distribution Center | 2 | (d | ) | 1,607 | 6,968 | - | 1,607 | 6,968 | 8,575 | (56 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Director Drive Dist Ctr | 2 | 1,111 | 4,814 | 81 | 1,111 | 4,895 | 6,006 | (191) | 2012 | 2 | 1,271 | 5,455 | 220 | 1,271 | 5,675 | 6,946 | (729 | ) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Downtown Dist Ctr | 1 | 579 | 2,539 | - | 579 | 2,539 | 3,118 | (21 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eisenhauer Distribution Center | 3 | 3,693 | 15,848 | 153 | 3,693 | 16,001 | 19,694 | (528) | 2012 | 5 | (d | ) | 5,042 | 21,684 | 388 | 5,042 | 22,072 | 27,114 | (1,840 | ) | 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interchange East Dist Ctr | 1 | (d) | 1,471 | 6,433 | 208 | 1,471 | 6,641 | 8,112 | (323) | 2012 | 1 | 1,496 | 6,535 | 234 | 1,496 | 6,769 | 8,265 | (1,098 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Landmark One Dist Ctr | 1 | (d | ) | 857 | 3,699 | - | 857 | 3,699 | 4,556 | (29 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Macro Distribution Center | 3 | 1,705 | 9,024 | 2,927 | 1,705 | 11,951 | 13,656 | (3,551) | 2002 | 4 | (d | ) | 2,535 | 12,647 | 3,900 | 2,535 | 16,547 | 19,082 | (4,757 | ) | 2002, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Perrin Creek Corporate Center | 2 | (d) | 5,454 | 22,689 | 14 | 5,454 | 22,703 | 28,157 | (713) | 2012 | 10 | (d | ) | 9,770 | 41,337 | 177 | 9,770 | 41,514 | 51,284 | (2,503 | ) | 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Rittiman East Industrial Park | 2 | 4,848 | 19,223 | 1,428 | 4,849 | 20,650 | 25,499 | (4,368) | 2006 | 2 | 4,848 | 19,223 | 2,804 | 4,848 | 22,027 | 26,875 | (6,192 | ) | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rittiman West Industrial Park | 2 | 1,230 | 4,950 | 899 | 1,230 | 5,849 | 7,079 | (1,358) | 2006 | 2 | 1,230 | 4,950 | 1,159 | 1,230 | 6,109 | 7,339 | (1,949 | ) | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
San Antonio Distribution Center I | 6 | 1,203 | 4,648 | 6,863 | 1,203 | 11,511 | 12,714 | (7,824) | 1993 | 6 | 1,203 | 4,648 | 7,363 | 1,203 | 12,011 | 13,214 | (8,928 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
San Antonio Distribution Center II | 3 | 885 | - | 6,955 | 885 | 6,955 | 7,840 | (3,852) | 1994 | 3 | 885 | - | 7,588 | 885 | 7,588 | 8,473 | (4,297 | ) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
San Antonio Distribution Center III | 2 | 1,405 | 7,519 | 126 | 1,409 | 7,641 | 9,050 | (2,277) | 1996 | 6 | (d | ) | 5,079 | 23,372 | 956 | 5,083 | 24,324 | 29,407 | (2,976 | ) | 1996, 2012, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Tri-County Distribution Center | 4 | (d | ) | 6,888 | 28,693 | 651 | 6,889 | 29,343 | 36,232 | (3,467 | ) | 2007, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valley Industrial Center | 1 | 363 | - | 4,872 | 363 | 4,872 | 5,235 | (2,504 | ) | 1997 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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San Antonio, Texas | 50 | 43,653 | 181,750 | 30,312 | 43,658 | 212,057 | 255,715 | (41,346 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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San Francisco Bay Area, California | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acer Distribution Center | 1 | (d | ) | 3,368 | 15,139 | 209 | 3,368 | 15,348 | 18,716 | (2,423 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alvarado Business Center | 10 | (d | ) | 20,739 | 62,595 | 6,332 | 20,739 | 68,927 | 89,666 | (22,002 | ) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bayshore Distribution Center | 1 | 6,450 | 15,049 | 2,696 | 6,450 | 17,745 | 24,195 | (2,595 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bayside Corporate Center | 7 | 4,365 | - | 20,611 | 4,365 | 20,611 | 24,976 | (13,119 | ) | 1995, 1996 |
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tri-County Distribution Center | 2 | (d) | 3,183 | 12,743 | 563 | 3,184 | 13,305 | 16,489 | (2,357) | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valley Industrial Center | 1 | 363 | - | 4,826 | 363 | 4,826 | 5,189 | (2,323) | 1997 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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San Antonio, Texas | 29 | 26,551 | 107,891 | 25,043 | 26,557 | 132,928 | 159,485 | (29,665) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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San Francisco Bay Area, California | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acer Distribution Center | 1 | (d) | 3,368 | 15,139 | 161 | 3,368 | 15,300 | 18,668 | (1,058) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Albrae Business Center | 1 | (d) | 2,771 | 7,536 | 20 | 2,771 | 7,556 | 10,327 | (546) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alvarado Business Center | 10 | (d) | 20,739 | 62,595 | 4,752 | 20,739 | 67,347 | 88,086 | (16,677) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arques Business Pk | 2 | 4,895 | 12,848 | 1,481 | 4,895 | 14,329 | 19,224 | (824) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bayshore Distribution Center | 1 | 6,450 | 15,049 | 560 | 6,450 | 15,609 | 22,059 | (1,068) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bayside Corporate Center | 7 | 4,365 | - | 20,458 | 4,365 | 20,458 | 24,823 | (11,702) | 1995, 1996 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bayside Plaza I | 12 | 5,212 | 18,008 | 6,738 | 5,216 | 24,742 | 29,958 | (15,323) | 1993 | 12 | 5,212 | 18,008 | 8,311 | 5,216 | 26,315 | 31,531 | (17,701 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bayside Plaza II | 2 | 634 | - | 3,427 | 634 | 3,427 | 4,061 | (2,227) | 1994 | 2 | 634 | - | 3,576 | 634 | 3,576 | 4,210 | (2,427 | ) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brennan Distribution | 1 | (d) | 1,912 | 7,553 | 7 | 1,912 | 7,560 | 9,472 | (530) | 2011 | 1 | 1,912 | 7,553 | 63 | 1,912 | 7,616 | 9,528 | (1,181 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Component Drive Ind Port | 3 | 2,829 | 13,532 | 392 | 2,829 | 13,924 | 16,753 | (934) | 2011 | 3 | 2,829 | 13,532 | 677 | 2,829 | 14,209 | 17,038 | (2,183 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cypress | 1 | 1,065 | 5,103 | 30 | 1,065 | 5,133 | 6,198 | (344) | 2011 | 1 | 1,065 | 5,103 | 246 | 1,065 | 5,349 | 6,414 | (794 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dado Distribution | 1 | 2,194 | 11,079 | 224 | 2,194 | 11,303 | 13,497 | (805) | 2011 | 1 | 2,194 | 11,079 | 267 | 2,194 | 11,346 | 13,540 | (1,863 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doolittle Distribution Center | 1 | 2,843 | 18,849 | 600 | 2,843 | 19,449 | 22,292 | (1,099) | 2011 | 1 | 2,843 | 18,849 | 848 | 2,843 | 19,697 | 22,540 | (2,640 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dowe Industrial Center | 2 | (d) | 5,884 | 20,400 | 155 | 5,884 | 20,555 | 26,439 | (1,438) | 2011 | 2 | (d | ) | 5,884 | 20,400 | 809 | 5,884 | 21,209 | 27,093 | (3,357 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Dublin Ind Portfolio | 1 | 3,241 | 15,951 | 993 | 3,241 | 16,944 | 20,185 | (962) | 2011 | 1 | 3,241 | 15,951 | 993 | 3,241 | 16,944 | 20,185 | (2,179 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
East Bay Doolittle | 1 | 4,015 | 15,988 | 148 | 4,015 | 16,136 | 20,151 | (1,179) | 2011 | 1 | 4,015 | 15,988 | 1,296 | 4,015 | 17,284 | 21,299 | (2,866 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
East Grand Airfreight | 2 | 3,977 | 11,730 | 85 | 3,977 | 11,815 | 15,792 | (659) | 2011 | 2 | 3,977 | 11,730 | 464 | 3,977 | 12,194 | 16,171 | (1,523 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Edgewater Industrial Center | 1 | 6,630 | 31,153 | 128 | 6,630 | 31,281 | 37,911 | (2,207) | 2011 | 1 | 6,630 | 31,153 | 1,968 | 6,630 | 33,121 | 39,751 | (5,206 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eigenbrodt Way Distribution Center | 1 | 393 | 2,228 | 603 | 393 | 2,831 | 3,224 | (1,823) | 1993 | 1 | 393 | 2,228 | 694 | 393 | 2,922 | 3,315 | (2,038 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gateway Corporate Center | 10 | 6,736 | 24,747 | 7,999 | 6,744 | 32,738 | 39,482 | (20,781) | 1993 | 10 | 6,736 | 24,747 | 10,340 | 6,744 | 35,079 | 41,823 | (23,670 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hayward Commerce Center | 4 | 1,933 | 10,955 | 3,144 | 1,933 | 14,099 | 16,032 | (8,932) | 1993 | 4 | 1,933 | 10,955 | 3,550 | 1,933 | 14,505 | 16,438 | (10,191 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hayward Commerce Park | 2 | (d | ) | 7,131 | 11,144 | 325 | 7,131 | 11,469 | 18,600 | (121 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hayward Distribution Center | 3 | 1,234 | 7,930 | 4,465 | 1,541 | 12,088 | 13,629 | (8,286) | 1993 | 2 | 831 | 5,510 | 3,213 | 1,038 | 8,516 | 9,554 | (6,423 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hayward Ind - Hathaway | 2 | 6,177 | 8,271 | - | 6,177 | 8,271 | 14,448 | (1,431) | 2011 | 2 | 6,177 | 8,271 | 25 | 6,177 | 8,296 | 14,473 | (3,244 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hayward Industrial Center | 13 | 4,481 | 25,393 | 8,243 | 4,481 | 33,636 | 38,117 | (21,125) | 1993 | 13 | 4,481 | 25,393 | 9,298 | 4,481 | 34,691 | 39,172 | (24,063 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Junction Industrial Park | 4 | 7,658 | 39,106 | 1,044 | 7,658 | 40,150 | 47,808 | (2,238) | 2011 | 4 | 7,658 | 39,106 | 1,369 | 7,658 | 40,475 | 48,133 | (5,202 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lakeside BC | 2 | 7,280 | 21,116 | 250 | 7,280 | 21,366 | 28,646 | (1,032) | 2011 | 1 | 3,969 | 11,181 | 871 | 3,969 | 12,052 | 16,021 | (1,281 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Laurelwood Drive | 2 | 3,941 | 13,161 | 103 | 3,941 | 13,264 | 17,205 | (740) | 2011 | 2 | 3,941 | 13,161 | 318 | 3,941 | 13,479 | 17,420 | (1,708 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lawrence SSF | 1 | 2,189 | 7,498 | 91 | 2,189 | 7,589 | 9,778 | (491) | 2011 | 1 | 2,189 | 7,498 | 149 | 2,189 | 7,647 | 9,836 | (1,128 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Livermore Distribution Center | 4 | 8,992 | 26,976 | 2,075 | 8,992 | 29,051 | 38,043 | (7,522) | 2005 | 4 | 8,992 | 26,976 | 2,377 | 8,992 | 29,353 | 38,345 | (9,724 | ) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manzanita R and D | 1 | 1,420 | 3,454 | - | 1,420 | 3,454 | 4,874 | (190) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Martin-Scott Ind Port | 2 | 3,546 | 9,717 | 107 | 3,546 | 9,824 | 13,370 | (675) | 2011 | 2 | �� | 3,546 | 9,717 | 328 | 3,546 | 10,045 | 13,591 | (1,554 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Moffett Distribution | 7 | (d) | 16,889 | 30,590 | 174 | 16,889 | 30,764 | 47,653 | (1,854) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Moffett Park - Bordeaux R and D | 4 | 6,663 | 19,552 | 206 | 6,663 | 19,758 | 26,421 | (1,280) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oakland Industrial Center | 3 | (d) | 8,234 | 24,704 | 2,117 | 8,235 | 26,820 | 35,055 | (6,585) | 2005 | 3 | (d | ) | 8,234 | 24,704 | 2,487 | 8,235 | 27,190 | 35,425 | (8,482 | ) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Overlook Distribution Center | 1 | 1,573 | 8,915 | 389 | 1,573 | 9,304 | 10,877 | (4,152) | 1999 | 1 | 1,573 | 8,915 | 2,585 | 1,573 | 11,500 | 13,073 | (4,897 | ) | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pacific Business Center | 2 | 6,075 | 26,260 | 2,633 | 6,075 | 28,893 | 34,968 | (1,541) | 2011 | 2 | 6,075 | 26,260 | 3,909 | 6,075 | 30,169 | 36,244 | (4,122 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pacific Commons Industrial Center | 6 | (d)(e) | 27,568 | 82,855 | 2,105 | 27,591 | 84,937 | 112,528 | (20,954) | 2005 | 5 | (d | )(e) | 25,784 | 77,594 | 2,190 | 25,805 | 79,763 | 105,568 | (25,247 | ) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Pacific Industrial Center | 6 | (d) | 21,675 | 65,083 | 3,133 | 21,675 | 68,216 | 89,891 | (16,868) | 2005 | 6 | (d | ) | 21,675 | 65,083 | 4,067 | 21,675 | 69,150 | 90,825 | (21,895 | ) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
San Leandro Distribution Center | 3 | 1,387 | 7,862 | 2,363 | 1,387 | 10,225 | 11,612 | (6,670) | 1993 | 3 | 1,387 | 7,862 | 2,860 | 1,387 | 10,722 | 12,109 | (7,618 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shoreline Business Center | 8 | 4,328 | 16,101 | 4,451 | 4,328 | 20,552 | 24,880 | (12,213) | 1993 | 8 | 4,328 | 16,101 | 6,520 | 4,328 | 22,621 | 26,949 | (14,204 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Silicon Valley R and D | 4 | 6,059 | 21,762 | 930 | 6,059 | 22,692 | 28,751 | (1,393) | 2011 | 2 | 2,567 | 10,313 | 340 | 2,567 | 10,653 | 13,220 | (1,415 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
South Bay Brokaw | 3 | 4,014 | 23,296 | 512 | 4,014 | 23,808 | 27,822 | (1,377) | 2011 | 3 | 4,014 | 23,296 | 822 | 4,014 | 24,118 | 28,132 | (3,174 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
South Bay Junction | 2 | 3,662 | 21,120 | 134 | 3,662 | 21,254 | 24,916 | (1,252) | 2011 | 2 | 3,662 | 21,120 | 1,402 | 3,662 | 22,522 | 26,184 | (2,859 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
South Bay Lundy | 2 | 6,500 | 33,642 | 1,245 | 6,500 | 34,887 | 41,387 | (2,002) | 2011 | 2 | 6,500 | 33,642 | 2,496 | 6,500 | 36,138 | 42,638 | (4,802 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Spinnaker Business Center | 12 | 7,043 | 25,220 | 9,765 | 7,043 | 34,985 | 42,028 | (20,712) | 1993 | 12 | 7,043 | 25,220 | 11,321 | 7,043 | 36,541 | 43,584 | (23,885 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Thornton Business Center | 4 | 2,047 | 11,706 | 3,657 | 2,066 | 15,344 | 17,410 | (8,898) | 1993 | 4 | 2,047 | 11,706 | 4,285 | 2,066 | 15,972 | 18,038 | (10,372 | ) | 1993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
TriPoint Bus Park | 4 | 9,057 | 23,727 | 2,484 | 9,057 | 26,211 | 35,268 | (1,351) | 2011 | 4 | 9,057 | 23,727 | 4,071 | 9,057 | 27,798 | 36,855 | (3,275 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Utah Airfreight | 1 | (d) | 10,657 | 42,842 | 108 | 10,657 | 42,950 | 53,607 | (2,478) | 2011 | 1 | 10,657 | 42,842 | 932 | 10,657 | 43,774 | 54,431 | (5,746 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wiegman Road | 1 | 2,285 | 12,531 | 55 | 2,285 | 12,586 | 14,871 | (615) | 2011 | 1 | 2,285 | 12,531 | 401 | 2,285 | 12,932 | 15,217 | (1,439 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Willow Park Ind - Ph 1 | 7 | 6,628 | 18,118 | 336 | 6,628 | 18,454 | 25,082 | (1,409) | 2011 | 7 | 6,628 | 18,118 | 553 | 6,628 | 18,671 | 25,299 | (3,249 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Willow Park Ind - Ph 2 and 3 | 4 | 15,086 | 27,044 | 721 | 15,086 | 27,765 | 42,851 | (1,943) | 2011 | 4 | 15,086 | 27,044 | 1,616 | 15,086 | 28,660 | 43,746 | (4,559 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Willow Park Ind - Ph 4 5 7 8 | 8 | 12,131 | 65,486 | 1,824 | 12,131 | 67,310 | 79,441 | (4,050) | 2011 | 8 | 12,131 | 65,486 | 2,694 | 12,131 | 68,180 | 80,311 | (9,436 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Willow Park Ind - Ph 6 | 2 | 3,696 | 20,929 | 1,366 | 3,696 | 22,295 | 25,991 | (1,494) | 2011 | 2 | 3,696 | 20,929 | 2,196 | 3,696 | 23,125 | 26,821 | (3,626 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Yosemite Drive | 1 | 2,439 | 12,068 | 165 | 2,439 | 12,233 | 14,672 | (677) | 2011 | 1 | 2,439 | 12,068 | 288 | 2,439 | 12,356 | 14,795 | (1,567 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Zanker-Charcot Industrial | 5 | 4,867 | 28,750 | 289 | 4,867 | 29,039 | 33,906 | (1,647) | 2011 | 5 | 4,867 | 28,750 | 1,362 | 4,867 | 30,112 | 34,979 | (3,832 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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San Francisco Bay Area, California | 199 | 329,567 | 1,153,228 | 109,645 | 329,929 | 1,262,511 | 1,592,440 | (258,263) | 181 | 295,070 | 1,061,327 | 141,620 | 295,330 | 1,202,687 | 1,498,017 | (344,107 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Morgan Bus Ctr | 1 | 2,161 | 14,680 | 49 | 2,161 | 14,729 | 16,890 | (733) | 2011 | 1 | 2,161 | 14,680 | 1,234 | 2,161 | 15,914 | 18,075 | (1,675 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Savannah, Georgia | 1 | 2,161 | 14,680 | 49 | 2,161 | 14,729 | 16,890 | (733) | 1 | 2,161 | 14,680 | 1,234 | 2,161 | 15,914 | 18,075 | (1,675 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Seattle, Washington | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
East Valley Warehouse | 1 | (d | )(e) | 10,472 | 57,825 | 793 | 10,472 | 58,618 | 69,090 | (6,704 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fife Distribution Center | 1 | 3,245 | - | 13,366 | 3,245 | 13,366 | 16,611 | (401 | ) | 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Harvest Business Park | 3 | 3,541 | 18,827 | 747 | 3,541 | 19,574 | 23,115 | (2,488 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kent Centre Corporate Park | 4 | 5,397 | 21,599 | 656 | 5,397 | 22,255 | 27,652 | (2,856 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kingsport Industrial Park | 7 | 16,605 | 48,942 | 2,233 | 16,800 | 50,980 | 67,780 | (8,620 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northwest Distribution Center | 3 | 5,114 | 24,090 | 1,747 | 5,114 | 25,837 | 30,951 | (3,273 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ProLogis Park SeaTac | 2 | (d | ) | 12,230 | 14,170 | 3,453 | 12,457 | 17,396 | 29,853 | (3,124 | ) | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Puget Sound Airfreight | 1 | 1,408 | 4,201 | 210 | 1,408 | 4,411 | 5,819 | (572 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Renton Northwest Corp. Park | 4 | 5,102 | 17,946 | 478 | 5,102 | 18,424 | 23,526 | (2,800 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEA Cargo Center North | 1 | - | 10,279 | 40 | - | 10,319 | 10,319 | (5,674 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEA Cargo Center South | 1 | - | 2,745 | 11 | - | 2,756 | 2,756 | (2,722 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sumner Landing | 1 | (e | ) | 10,332 | 32,545 | 767 | 10,332 | 33,312 | 43,644 | (3,391 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Van Doren’s Distribution Center | 1 | (d | ) | 3,166 | 7,716 | 7 | 3,166 | 7,723 | 10,889 | (58 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Seattle, Washington | 30 | 76,612 | 260,885 | 24,508 | 77,034 | 284,971 | 362,005 | (42,683 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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South Florida | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Airport West Distribution Center | 2 | (d | ) | 1,253 | 3,825 | 4,109 | 1,974 | 7,213 | 9,187 | (3,697 | ) | 1995, 1998 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beacon Centre | 18 | 37,998 | 196,004 | 8,256 | 37,998 | 204,260 | 242,258 | (24,652 | ) | 2011 |
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Seattle, Washington | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
East Valley Warehouse | 1 | (e) | 10,472 | 57,825 | 668 | 10,472 | 58,493 | 68,965 | (2,946) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Harvest Business Park | 3 | (e) | 3,541 | 18,827 | 108 | 3,541 | 18,935 | 22,476 | (1,063) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kent Centre Corporate Park | 4 | (e) | 5,397 | 21,599 | 335 | 5,397 | 21,934 | 27,331 | (1,222) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kingsport Industrial Park | 7 | 16,605 | 48,942 | 1,035 | 16,605 | 49,977 | 66,582 | (3,706) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northwest Distribution Center | 3 | (e) | 5,114 | 24,090 | 1,013 | 5,114 | 25,103 | 30,217 | (1,374) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ProLogis Park SeaTac | 2 | (d) | 12,230 | 14,170 | 3,345 | 12,457 | 17,288 | 29,745 | (1,841) | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Puget Sound Airfreight | 1 | 1,408 | 4,201 | 37 | 1,408 | 4,238 | 5,646 | (251) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Renton Northwest Corp. Park | 4 | (d) | 5,102 | 17,946 | 183 | 5,102 | 18,129 | 23,231 | (1,222) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sumner 3/4 Landing | 1 | (e) | 10,332 | 32,545 | 261 | 10,332 | 32,806 | 43,138 | (1,468) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Seattle, Washington | 26 | 70,201 | 240,145 | 6,985 | 70,428 | 246,903 | 317,331 | (15,093) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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South Florida | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Airport West Distribution Center | 2 | (d) | 1,253 | 3,825 | 3,720 | 1,974 | 6,824 | 8,798 | (3,202) | 1995, 1998 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beacon Centre | 18 | 37,998 | 196,004 | 3,515 | 37,998 | 199,519 | 237,517 | (10,527) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beacon Industrial Park | 8 | (d) | 20,139 | 68,093 | 1,239 | 20,139 | 69,332 | 89,471 | (3,621) | 2011 | 8 | (d | ) | 20,139 | 68,093 | 3,405 | 20,139 | 71,498 | 91,637 | (8,627 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Beacon Lakes | 2 | 6,504 | - | 18,865 | 6,504 | 18,865 | 25,369 | (308 | ) | 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Blue Lagoon Business Park | 2 | (d) | 9,189 | 29,451 | 1,082 | 9,189 | 30,533 | 39,722 | (1,733) | 2011 | 2 | (d | ) | 9,189 | 29,451 | 1,336 | 9,189 | 30,787 | 39,976 | (4,025 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Boca Distribution Center | 1 | 1,474 | 5,918 | 805 | 1,474 | 6,723 | 8,197 | (1,420) | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CenterPort Distribution Center | 5 | (d) | 8,977 | 22,766 | 1,861 | 9,096 | 24,508 | 33,604 | (6,613) | 1999, 2012 | 5 | (d | ) | 8,802 | 22,504 | 3,121 | 8,922 | 25,505 | 34,427 | (8,511 | ) | 1999, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cobia Distribution Center | 2 | (d) | 4,632 | 10,565 | 696 | 4,632 | 11,261 | 15,893 | (701) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Copans Distribution Center | 2 | 504 | 2,857 | 1,098 | 504 | 3,955 | 4,459 | (1,852) | 1997, 1998 | 2 | 504 | 2,857 | 1,486 | 504 | 4,343 | 4,847 | (2,151 | ) | 1997, 1998 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dade Distribution Center | 1 | 2,589 | 14,669 | 327 | 2,589 | 14,996 | 17,585 | (3,795) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dolphin Distribution Center | 1 | 2,716 | 7,364 | 828 | 2,716 | 8,192 | 10,908 | (572) | 2011 | 1 | 2,716 | 7,364 | 866 | 2,716 | 8,230 | 10,946 | (1,397 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
International Corp Park | 2 | 10,596 | 15,898 | 428 | 10,596 | 16,326 | 26,922 | (1,375) | 2010 | 2 | 10,596 | 15,898 | 2,211 | 10,596 | 18,109 | 28,705 | (2,643 | ) | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marlin Distribution Center | 1 | 1,844 | 6,603 | 9 | 1,844 | 6,612 | 8,456 | (459) | 2011 | 1 | 1,844 | 6,603 | 361 | 1,844 | 6,964 | 8,808 | (1,041 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Miami Airport Business Center | 6 | 11,173 | 45,921 | 1,591 | 11,173 | 47,512 | 58,685 | (2,795) | 2011 | 6 | 11,173 | 45,921 | 2,115 | 11,173 | 48,036 | 59,209 | (6,548 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
North Andrews Distribution Center | 1 | 698 | 3,956 | 258 | 698 | 4,214 | 4,912 | (2,483) | 1994 | 1 | 698 | 3,956 | 391 | 698 | 4,347 | 5,045 | (2,804 | ) | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pompano Beach Distribution Center | 3 | 11,035 | 15,136 | 3,324 | 11,035 | 18,460 | 29,495 | (1,605) | 2008 | 3 | 11,035 | 15,136 | 3,692 | 11,035 | 18,828 | 29,863 | (2,772 | ) | 2008 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pompano Center of Commer | 5 | 5,171 | 13,930 | 167 | 5,171 | 14,097 | 19,268 | (736) | 2011 | 5 | 5,171 | 13,930 | 391 | 5,171 | 14,321 | 19,492 | (1,689 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Port Lauderdale Distribution Center | 3 | (d) | 6,517 | 9,133 | 9,253 | 7,826 | 17,077 | 24,903 | (3,639) | 1997, 2012 | 7 | (d | ) | 37,472 | 69,457 | 9,239 | 38,781 | 77,387 | 116,168 | (5,328 | ) | 1997, 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
ProLogis Park I-595 | 2 | (d) | 1,998 | 11,326 | 697 | 1,999 | 12,022 | 14,021 | (4,027) | 2003 | 2 | (d | ) | 1,998 | 11,326 | 959 | 1,999 | 12,284 | 14,283 | (4,932 | ) | 2003 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Sawgrass Distribution Center | 2 | 10,016 | - | 14,964 | 10,016 | 14,964 | 24,980 | (943) | 2009 | 2 | 10,016 | - | 15,142 | 10,016 | 15,142 | 25,158 | (1,876 | ) | 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tarpon Distribution Center | 1 | (d) | 1,847 | 6,451 | 138 | 1,847 | 6,589 | 8,436 | (498) | 2011 | 1 | 1,847 | 6,451 | 179 | 1,847 | 6,630 | 8,477 | (1,153 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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South Florida | 68 | 150,366 | 489,866 | 46,000 | 152,516 | 533,716 | 686,232 | (52,596) | 70 | 178,955 | 518,776 | 76,124 | 181,106 | 592,749 | 773,855 | (84,154 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Anaheim Industrial Center | 13 | (d) | 32,275 | 59,983 | 2,284 | 32,275 | 62,267 | 94,542 | (15,234) | 2005 | 12 | 31,086 | 57,836 | 2,815 | 31,086 | 60,651 | 91,737 | (19,039 | ) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Anaheim Industrial Property | 1 | 5,096 | 10,816 | 3 | 5,096 | 10,819 | 15,915 | (606) | 2011 | 1 | 5,096 | 10,816 | 71 | 5,096 | 10,887 | 15,983 | (1,375 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arrow Ind. Park | 2 | (d) | 4,840 | 8,120 | 555 | 4,840 | 8,675 | 13,515 | (309) | 2012 | 2 | 4,840 | 8,120 | 866 | 4,840 | 8,986 | 13,826 | (1,125 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Artesia Industrial | 19 | 68,691 | 145,492 | 1,945 | 68,691 | 147,437 | 216,128 | (9,151) | 2011 | 19 | 68,691 | 145,492 | 5,223 | 68,691 | 150,715 | 219,406 | (21,283 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bell Ranch Distribution | 4 | 5,539 | 23,092 | 1,376 | 5,539 | 24,468 | 30,007 | (1,426) | 2011 | 4 | 5,539 | 23,092 | 1,657 | 5,539 | 24,749 | 30,288 | (3,491 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brea Ind Ctr | 1 | 2,488 | 4,062 | 29 | 2,488 | 4,091 | 6,579 | (138) | 2012 | 1 | 2,488 | 4,062 | 287 | 2,488 | 4,349 | 6,837 | (471 | ) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
California Commerce Center | 4 | (d) | 16,432 | 26,531 | 1,626 | 16,432 | 28,157 | 44,589 | (895) | 2012 | 5 | 18,708 | 35,633 | 2,465 | 18,708 | 38,098 | 56,806 | (3,457 | ) | 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carson Dist Ctr | 1 | 15,491 | - | 16,967 | 15,491 | 16,967 | 32,458 | (344) | 2011 | 1 | 15,491 | - | 17,000 | 15,491 | 17,000 | 32,491 | (1,330 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carson Industrial | 12 | 13,608 | 32,802 | 562 | 13,608 | 33,364 | 46,972 | (2,133) | 2011 | 12 | 13,608 | 32,802 | 3,166 | 13,608 | 35,968 | 49,576 | (5,068 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carson Town Center | 2 | 11,781 | 31,572 | 171 | 11,781 | 31,743 | 43,524 | (1,624) | 2011 | 2 | 11,781 | 31,572 | 698 | 11,781 | 32,270 | 44,051 | (3,711 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cedarpointe Ind Park | 5 | (d) | 7,824 | 12,476 | 443 | 7,824 | 12,919 | 20,743 | (421) | 2012 | 5 | 7,824 | 12,476 | 664 | 7,824 | 13,140 | 20,964 | (1,488 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chartwell Distribution Center | 1 | 6,417 | 16,964 | 204 | 6,417 | 17,168 | 23,585 | (997) | 2011 | 1 | 6,417 | 16,964 | 801 | 6,417 | 17,765 | 24,182 | (2,347 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chino Ind Ctr | 4 | 850 | 1,274 | 10 | 850 | 1,284 | 2,134 | (138) | 2012 | 4 | 850 | 1,274 | 10 | 850 | 1,284 | 2,134 | (649 | ) | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commerce Ind Ctr | 1 | (d) | 11,345 | 17,653 | 62 | 11,345 | 17,715 | 29,060 | (552) | 2012 | 1 | 11,345 | 17,653 | 88 | 11,345 | 17,741 | 29,086 | (1,833 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corona Dist Ctr | 1 | (d) | 4,249 | 6,657 | - | 4,249 | 6,657 | 10,906 | (211) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crossroads Business Park | 7 | (d) | 21,393 | 82,655 | 97,222 | 74,914 | 126,356 | 201,270 | (25,557) | 2005, 2010 | 9 | (d | ) | 36,131 | 98,797 | 126,748 | 89,658 | 172,018 | 261,676 | (35,650 | ) | 2005, 2010, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Del Amo Industrial Center | 1 | 7,471 | 17,889 | 240 | 7,471 | 18,129 | 25,600 | (1,204) | 2011 | 1 | 7,471 | 17,889 | 386 | 7,471 | 18,275 | 25,746 | (2,734 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dominguez North Industrial Center | 7 | (d) | 21,951 | 36,464 | 1,038 | 21,976 | 37,477 | 59,453 | (3,467) | 2007, 2012 | 6 | (d | ) | 20,662 | 34,382 | 2,883 | 20,688 | 37,239 | 57,927 | (6,222 | ) | 2007, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Eaves Distribution Center | 3 | (d) | 13,914 | 31,041 | 1,167 | 13,914 | 32,208 | 46,122 | (2,171) | 2011 | 3 | 13,914 | 31,041 | 1,953 | 13,914 | 32,994 | 46,908 | (5,156 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foothill Bus Ctr | 3 | (d) | 5,254 | 8,096 | 40 | 5,254 | 8,136 | 13,390 | (249) | 2012 | 3 | 5,254 | 8,096 | 117 | 5,254 | 8,213 | 13,467 | (836 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ford Distribution Cntr | 7 | 29,895 | 81,433 | 659 | 29,895 | 82,092 | 111,987 | (5,826) | 2011 | 7 | 29,895 | 81,433 | 2,875 | 29,895 | 84,308 | 114,203 | (13,365 | ) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fordyce Distribution Center | 1 | (d) | 6,110 | 19,485 | 292 | 6,110 | 19,777 | 25,887 | (1,461) | 2011 | 1 | 6,110 | 19,485 | 765 | 6,110 | 20,250 | 26,360 | (3,379 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fullerton Industrial Center | 1 | 3,831 | 7,115 | 298 | 3,831 | 7,413 | 11,244 | (1,822) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Harris Bus Ctr Alliance II | 9 | (d) | 13,134 | 66,195 | 613 | 13,134 | 66,808 | 79,942 | (3,912) | 2011 | 9 | 13,134 | 66,195 | 1,967 | 13,134 | 68,162 | 81,296 | (8,942 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Haven Distribution Center | 4 | (d) | 96,975 | 73,903 | 7,237 | 96,975 | 81,140 | 178,115 | (8,257) | 2008 | 4 | (d | ) | 96,975 | 73,903 | 7,620 | 96,975 | 81,523 | 178,498 | (13,312 | ) | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Industry Distribution Center | 8 | (d)(e) | 54,170 | 99,434 | 4,325 | 54,170 | 103,759 | 157,929 | (24,122) | 2005, 2012 | 8 | (d | )(e) | 54,170 | 99,434 | 4,891 | 54,170 | 104,325 | 158,495 | (31,872 | ) | 2005, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Inland Empire Distribution Center | 8 | (d) | 47,859 | 101,753 | 7,702 | 48,639 | 108,675 | 157,314 | (17,365) | 2005, 2012 | 6 | (d | ) | 37,805 | 66,530 | 8,469 | 38,585 | 74,219 | 112,804 | (21,549 | ) | 2005, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
International Multifoods | 1 | 4,700 | 8,036 | 404 | 4,700 | 8,440 | 13,140 | (505) | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kaiser Distribution Center | 8 | (d)(e) | 131,819 | 242,618 | 26,714 | 136,030 | 265,121 | 401,151 | (65,791) | 2008, 2008 | 8 | (d | )(e) | 131,819 | 242,618 | 20,367 | 136,030 | 258,774 | 394,804 | (80,093 | ) | 2005, 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
LAX Cargo Center | 3 | - | 19,217 | 193 | - | 19,410 | 19,410 | (4,789 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Los Angeles Industrial Center | 2 | 3,777 | 7,015 | 335 | 3,777 | 7,350 | 11,127 | (1,867) | 2005 | 2 | 3,777 | 7,015 | 353 | 3,777 | 7,368 | 11,145 | (2,425 | ) | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Meridian Park | 1 | 12,931 | 24,268 | 86 | 12,931 | 24,354 | 37,285 | (3,952) | 2008 | 1 | 12,931 | 24,268 | 142 | 12,931 | 24,410 | 37,341 | (5,629 | ) | 2008 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mid Counties Industrial Center | 18 | (d | ) | 55,436 | 96,453 | 15,386 | 55,437 | 111,838 | 167,275 | (35,190 | ) | 2005, 2006, 2010, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mill Street Dist Ctr | 1 | 1,825 | 4,572 | - | 1,825 | 4,572 | 6,397 | (36 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mill Street Spec Dist Ctr | 1 | (d | ) | 15,691 | 38,520 | 1 | 15,691 | 38,521 | 54,212 | (294 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Milliken Dist Ctr | 1 | 18,831 | 30,811 | 219 | 18,831 | 31,030 | 49,861 | (3,458 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NDP—Los Angeles | 5 | 14,855 | 41,115 | 2,020 | 14,855 | 43,135 | 57,990 | (6,677 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Normandie Industrial | 1 | 12,297 | 14,957 | 726 | 12,297 | 15,683 | 27,980 | (2,717 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
North County Dist Ctr | 3 | 49,949 | 76,943 | 4,061 | 49,949 | 81,004 | 130,953 | (8,910 | ) | 2011, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ontario Dist Ctr | 1 | 18,823 | 29,524 | 482 | 18,823 | 30,006 | 48,829 | (3,099 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Orange Industrial Center | 1 | 4,156 | 7,836 | 349 | 4,157 | 8,184 | 12,341 | (2,561 | ) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pacific Bus Ctr | 5 | 20,810 | 32,169 | 1,675 | 20,810 | 33,844 | 54,654 | (3,467 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ProLogis Park Ontario | 2 | (d | ) | 25,499 | 47,366 | 813 | 25,499 | 48,179 | 73,678 | (12,505 | ) | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rancho Cucamonga Distribution Center | 4 | (d | )(e) | 46,471 | 86,305 | 2,091 | 46,472 | 88,395 | 134,867 | (27,341 | ) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redlands Comm Ctr | 1 | 20,583 | 32,750 | - | 20,583 | 32,750 | 53,333 | (254 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redlands Distribution Center | 7 | (d | ) | 69,051 | 99,842 | 74,367 | 72,589 | 170,671 | 243,260 | (18,529 | ) | 2006, 2007, 2012, 2013, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rialto Dist Ctr | 4 | (d | ) | 73,396 | 204,161 | 442 | 73,396 | 204,603 | 277,999 | (15,058 | ) | 2012, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Riverbluff Distribution Center | 1 | (d | ) | 42,964 | - | 32,928 | 42,964 | 32,928 | 75,892 | (6,090 | ) | 2009 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Riverside Dist Ctr (LAX) | 2 | 2,178 | 3,440 | 150 | 2,178 | 3,590 | 5,768 | (375 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Santa Ana Distribution Center | 2 | 4,318 | 8,019 | 759 | 4,318 | 8,778 | 13,096 | (2,786 | ) | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
South Bay Distribution Center | 4 | (d | ) | 14,478 | 27,511 | 3,489 | 15,280 | 30,198 | 45,478 | (10,026 | ) | 2005, 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Starboard Distribution Ctr | 1 | 18,763 | 53,824 | 119 | 18,763 | 53,943 | 72,706 | (6,883 | ) | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Terra Francesco | 1 | 11,196 | - | 15,591 | 11,196 | 15,591 | 26,787 | (117 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Torrance Dist Ctr | 1 | 25,730 | 40,414 | 287 | 25,730 | 40,701 | 66,431 | (4,234 | ) | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transpark Inland Empire Dist Ctr | 1 | (d | ) | 28,936 | 44,721 | - | 28,936 | 44,721 | 73,657 | (329 | ) | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Van Nuys Airport Industrial | 4 | 23,455 | 39,916 | 2,588 | 23,455 | 42,504 | 65,959 | (5,018 | ) | 2011 |
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||
Mid Counties Industrial Center | 18 | (d) | 55,436 | 96,453 | 14,038 | 55,437 | 110,490 | 165,927 | (26,202) | 2005, 2006, 2010, 2012 | ||||||||||||||||||||||||||
Milliken Dist Ctr | 1 | (d) | 18,906 | 30,811 | 167 | 18,906 | 30,978 | 49,884 | (1,042) | 2012 | ||||||||||||||||||||||||||
NDP - Los Angeles | 5 | 14,855 | 41,115 | 511 | 14,855 | 41,626 | 56,481 | (2,868) | 2011 | |||||||||||||||||||||||||||
Normandie Industrial | 1 | 12,297 | 14,957 | 448 | 12,297 | 15,405 | 27,702 | (1,159) | 2,011 | |||||||||||||||||||||||||||
North County Dist Ctr | 3 | 49,949 | 76,943 | 130 | 49,949 | 77,073 | 127,022 | (2,596) | 2011, 2012 | |||||||||||||||||||||||||||
Ontario Dist Ctr | 1 | (d) | 18,823 | 29,524 | 68 | 18,823 | 29,592 | 48,415 | (937) | 2012 | ||||||||||||||||||||||||||
Orange Industrial Center | 1 | 4,156 | 7,836 | 334 | 4,157 | 8,169 | 12,326 | (1,954) | 2005 | |||||||||||||||||||||||||||
Pacific Bus Ctr | 5 | (d) | 20,810 | 32,169 | 937 | 20,810 | 33,106 | 53,916 | (994) | 2012 | ||||||||||||||||||||||||||
ProLogis Park Ontario | 2 | (d) | 25,499 | 47,366 | 512 | 25,499 | 47,878 | 73,377 | (9,228) | 2007 | ||||||||||||||||||||||||||
Rancho Cucamonga Distribution Center | 4 | (d)(e) | 46,471 | 86,305 | 1,249 | 46,472 | 87,553 | 134,025 | (21,199) | 2005 | ||||||||||||||||||||||||||
Redlands Distribution Center | 3 | (d) | 27,060 | 66,820 | 28,466 | 28,328 | 94,018 | 122,346 | (11,462) | 2006, 2007, 2012 | ||||||||||||||||||||||||||
Rialto Dist Ctr | 2 | (d) | 26,499 | 109,921 | 114 | 26,499 | 110,035 | 136,534 | (3,435) | 2012 | ||||||||||||||||||||||||||
Riverbluff Distribution Center | 1 | (d) | 42,964 | - | 32,809 | 42,964 | 32,809 | 75,773 | (3,810) | 2009 | ||||||||||||||||||||||||||
Riverside Dist Ctr (LAX) | 2 | 2,178 | 3,440 | 32 | 2,178 | 3,472 | 5,650 | (111) | 2012 | |||||||||||||||||||||||||||
Santa Ana Distribution Center | 2 | 4,318 | 8,019 | 662 | 4,318 | 8,681 | 12,999 | (2,100) | 2005 | |||||||||||||||||||||||||||
South Bay Distribution Center | 4 | (d) | 14,478 | 27,511 | 3,042 | 15,280 | 29,751 | 45,031 | (7,441) | 2005, 2007 | ||||||||||||||||||||||||||
Spinnaker Logistics | 1 | (d) | 13,483 | 22,081 | 716 | 13,483 | 22,797 | 36,280 | (1,363) | 2011 | ||||||||||||||||||||||||||
Starboard Distribution Ctr | 1 | 18,763 | 53,824 | 35 | 18,763 | 53,859 | 72,622 | (3,035) | 2011 | |||||||||||||||||||||||||||
Torrance Dist Ctr | 1 | 25,038 | 39,377 | 4 | 25,038 | 39,381 | 64,419 | (1,255) | 2012 | |||||||||||||||||||||||||||
Union Pacific Dist Ctr | 1 | 1,746 | 2,783 | 3 | 1,746 | 2,786 | 4,532 | (129) | 2012 | |||||||||||||||||||||||||||
Van Nuys Airport Industrial | 4 | 23,455 | 39,916 | 234 | 23,455 | 40,150 | 63,605 | (2,075) | 2011 | |||||||||||||||||||||||||||
Vernon Distribution Center | 15 | 25,439 | 47,250 | 3,373 | 25,441 | 50,621 | 76,062 | (12,812) | 2005 | |||||||||||||||||||||||||||
Vernon Industrial | 2 | 3,626 | 3,319 | 175 | 3,626 | 3,494 | 7,120 | (914) | 2011 | |||||||||||||||||||||||||||
Vista Distribution Center | 1 | 4,150 | 6,225 | 2,153 | 4,150 | 8,378 | 12,528 | (330) | 2012 | |||||||||||||||||||||||||||
Vista Rialto Distrib Ctr | 1 | 5,885 | 25,991 | 24 | 5,885 | 26,015 | 31,900 | (1,305) | 2011 | |||||||||||||||||||||||||||
Walnut Drive | 1 | 2,665 | 7,397 | 5 | 2,665 | 7,402 | 10,067 | (420) | 2011 | |||||||||||||||||||||||||||
Watson Industrial Center AFdII | 1 | (d) | 6,944 | 11,193 | - | 6,944 | 11,193 | 18,137 | (652) | 2011 | ||||||||||||||||||||||||||
Wilmington Avenue Warehouse | 2 | 11,172 | 34,723 | 432 | 11,172 | 35,155 | 46,327 | (1,946) | 2011 | |||||||||||||||||||||||||||
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Southern California | 228 | 1,209,175 | 2,278,163 | 265,282 | 1,269,787 | 2,482,833 | 3,752,620 | (324,481) | ||||||||||||||||||||||||||||
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St. Louis, Missouri | ||||||||||||||||||||||||||||||||||||
Earth City Industrial Center | 2 | 657 | 4,141 | 1,930 | 657 | 6,071 | 6,728 | (3,315) | 1998 | |||||||||||||||||||||||||||
Gateway Commerce Ctr | 1 | (d) | 6,285 | 27,662 | - | 6,285 | 27,662 | 33,947 | (954) | 2012 | ||||||||||||||||||||||||||
Westport Distribution Center | 1 | 365 | 1,247 | 2,296 | 365 | 3,543 | 3,908 | (1,890) | 1997 | |||||||||||||||||||||||||||
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St. Louis, Missouri | 4 | 7,307 | 33,050 | 4,226 | 7,307 | 37,276 | 44,583 | (6,159) | ||||||||||||||||||||||||||||
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Tampa, Florida | ||||||||||||||||||||||||||||||||||||
Tampa West Distribution Center | 1 | 578 | 4,051 | 396 | 578 | 4,447 | 5,025 | (2,775) | 1994 | |||||||||||||||||||||||||||
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Tampa, Florida | 1 | 578 | 4,051 | 396 | 578 | 4,447 | 5,025 | (2,775) | ||||||||||||||||||||||||||||
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Mexico: | ||||||||||||||||||||||||||||||||||||
Agua Fria Ind. Park | 5 | (d) | 8,073 | 24,560 | 8,312 | 8,073 | 32,872 | 40,945 | (771) | 2011, 2012 | ||||||||||||||||||||||||||
Arrayanes IP (REIT) | 1 | 2,016 | 3,775 | 2,681 | 2,016 | 6,456 | 8,472 | (116) | 2011 | |||||||||||||||||||||||||||
Bermudez Industrial Center | 2 | 1,155 | 4,619 | 4,110 | 1,158 | 8,726 | 9,884 | (2,257 | ) | 2007 | ||||||||||||||||||||||||||
Bosques Industrial Park | 1 | (d) | 1,983 | 6,256 | 1,029 | 1,983 | 7,285 | 9,268 | (616 | ) | 2011 | |||||||||||||||||||||||||
Carrizal Ind Park | 3 | (d) | 2,778 | 42,692 | 273 | 2,778 | 42,965 | 45,743 | (1,597 | ) | 2011 | |||||||||||||||||||||||||
Cedros-Tepotzotlan Distribution Center | 2 | (d) | 11,990 | 6,719 | 17,158 | 12,799 | 23,068 | 35,867 | (3,945 | ) | 2006, 2007 | |||||||||||||||||||||||||
Centro Industrial Center | 3 | 8,274 | - | 14,172 | 8,274 | 14,172 | 22,446 | (1,445 | ) | 2009 | ||||||||||||||||||||||||||
Del Norte Industrial Center II | 3 | 2,803 | 13,515 | 1,038 | 2,803 | 14,553 | 17,356 | (846 | ) | 2008, 2012 | ||||||||||||||||||||||||||
El Puente Industrial Center | 2 | 1,906 | 5,823 | 1,827 | 1,889 | 7,667 | 9,556 | (1,233 | ) | 2008 | ||||||||||||||||||||||||||
El Salto Distribution Center | 2 | (d) | 4,473 | 6,159 | 2,141 | 4,449 | 8,324 | 12,773 | (666 | ) | 2008 | |||||||||||||||||||||||||
Iztapalapa Distribution Center | 1 | 1,287 | 7,294 | - | 1,287 | 7,294 | 8,581 | (95 | ) | 2012 | ||||||||||||||||||||||||||
Libramiento Aeropuerto | 2 | 1,614 | 8,289 | - | 1,614 | 8,289 | 9,903 | (285 | ) | 2012 | ||||||||||||||||||||||||||
Los Altos Ind Park | 3 | (d) | 4,579 | 26,300 | 8,113 | 4,579 | 34,413 | 38,992 | (1,235 | ) | 2011 | |||||||||||||||||||||||||
Mezquite III prefund | 1 | (d) | 906 | 14,419 | 41 | 906 | 14,460 | 15,366 | (795 | ) | 2011 | |||||||||||||||||||||||||
Monterrey Airport | 3 | (d) | 9,263 | 12,878 | 17,026 | 9,218 | 29,949 | 39,167 | (2,376 | ) | 2007, 2008 | |||||||||||||||||||||||||
Monterrey Industrial Park | 8 | (d) | 12,079 | 32,861 | 1,111 | 12,409 | 33,642 | 46,051 | (1,074 | ) | 1997, 2011 | |||||||||||||||||||||||||
Nor-T Distribution Center | 4 | 7,247 | 32,135 | 5,731 | 5,898 | 39,215 | 45,113 | (8,566 | ) | 2006 | ||||||||||||||||||||||||||
Ojo de Agua Ind Ctr | 1 | (d) | 1,826 | 11,447 | 1,139 | 1,826 | 12,586 | 14,412 | (450 | ) | 2011 | |||||||||||||||||||||||||
Pacifico Distr Ctr | 4 | 2,886 | 14,736 | 325 | 2,886 | 15,061 | 17,947 | (1,093 | ) | 2011 | ||||||||||||||||||||||||||
Palma 1 Dist. Ctr. | 1 | 1,972 | 4,888 | 201 | 1,972 | 5,089 | 7,061 | (377 | ) | 2011 | ||||||||||||||||||||||||||
Parque Opcion | 1 | 730 | 2,287 | - | 730 | 2,287 | 3,017 | (209 | ) | 2011 | ||||||||||||||||||||||||||
Periferico Sur Industrial Park | 1 | 1,016 | 5,757 | - | 1,016 | 5,757 | 6,773 | - | 2012 | |||||||||||||||||||||||||||
Pharr Bridge Industrial Center | 3 | 6,460 | 18,516 | 12,889 | 6,523 | 31,342 | 37,865 | (2,342 | ) | 2008, 2009, 2012 | ||||||||||||||||||||||||||
Piracanto Ind Park | 4 | 11,646 | 33,660 | 27 | 11,646 | 33,687 | 45,333 | (1,847 | ) | 2011 | ||||||||||||||||||||||||||
ProLogis Park Alamar | 3 | 20,540 | 17,081 | (203 | ) | 20,536 | 16,882 | 37,418 | (1,579 | ) | 2008 |
No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | |||||||||||||||||||||||||||||||
Description | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | ||||||||||||||||||||||||||||||
Vernon Distribution Center | 15 | 25,439 | 47,250 | 3,912 | 25,441 | 51,160 | 76,601 | (16,728 | ) | 2005 | ||||||||||||||||||||||||||
Vernon Industrial | 2 | 3,626 | 3,319 | 197 | 3,626 | 3,516 | 7,142 | (2,084 | ) | 2011 | ||||||||||||||||||||||||||
Vista Distribution Center | 1 | 4,150 | 6,225 | 3,415 | 4,150 | 9,640 | 13,790 | (1,569 | ) | 2012 | ||||||||||||||||||||||||||
Vista Rialto Distrib Ctr | 1 | 5,885 | 25,991 | 242 | 5,885 | 26,233 | 32,118 | (3,188 | ) | 2011 | ||||||||||||||||||||||||||
Walnut Drive | 1 | 2,665 | 7,397 | 218 | 2,665 | 7,615 | 10,280 | (960 | ) | 2011 | ||||||||||||||||||||||||||
Watson Industrial Center AFdII | 1 | 6,944 | 11,193 | 65 | 6,944 | 11,258 | 18,202 | (1,478 | ) | 2011 | ||||||||||||||||||||||||||
Wilmington Avenue Warehouse | 2 | 11,172 | 34,723 | 2,389 | 11,172 | 37,112 | 48,284 | (4,629 | ) | 2011 | ||||||||||||||||||||||||||
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Southern California | 236 | 1,353,384 | 2,485,362 | 384,521 | 1,416,273 | 2,806,994 | 4,223,267 | (509,210 | ) | |||||||||||||||||||||||||||
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St. Louis, Missouri | ||||||||||||||||||||||||||||||||||||
Earth City Industrial Center | 3 | 807 | 4,992 | 2,057 | 807 | 7,049 | 7,856 | (3,800 | ) | 1998, 2014 | ||||||||||||||||||||||||||
Hazelwood Dist Ctr | 2 | 833 | 4,721 | 24 | 833 | 4,745 | 5,578 | (49 | ) | 2014 | ||||||||||||||||||||||||||
Westport Distribution Center | 3 | 824 | 3,849 | 2,403 | 824 | 6,252 | 7,076 | (2,316 | ) | 1997, 2014 | ||||||||||||||||||||||||||
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St. Louis, Missouri | 8 | 2,464 | 13,562 | 4,484 | 2,464 | 18,046 | 20,510 | (6,165 | ) | |||||||||||||||||||||||||||
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Guadalajara | ||||||||||||||||||||||||||||||||||||
Parque Opcion | 1 | 730 | 2,287 | 1,362 | 730 | 3,649 | 4,379 | (504 | ) | 2011 | ||||||||||||||||||||||||||
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Guadalajara | 1 | 730 | 2,287 | 1,362 | 730 | 3,649 | 4,379 | (504 | ) | |||||||||||||||||||||||||||
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Mexico City | ||||||||||||||||||||||||||||||||||||
Puente Grande Distribution Center | 1 | 9,106 | - | 15,795 | 9,106 | 15,795 | 24,901 | (137 | ) | 2014 | ||||||||||||||||||||||||||
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Mexico City | 1 | 9,106 | - | 15,795 | 9,106 | �� | 15,795 | 24,901 | (137 | ) | ||||||||||||||||||||||||||
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Canada - Toronto | ||||||||||||||||||||||||||||||||||||
Airport Rd. Dist Ctr | 1 | 26,084 | 73,382 | 2,343 | 27,262 | 74,547 | 101,809 | (7,860 | ) | 2011 | ||||||||||||||||||||||||||
Annagem Dist. Center | 1 | 3,518 | 12,035 | 850 | 3,677 | 12,726 | 16,403 | (1,394 | ) | 2011 | ||||||||||||||||||||||||||
Annagem Distrib Centre II | 1 | 1,981 | 5,076 | 873 | 2,070 | 5,860 | 7,930 | (708 | ) | 2011 | ||||||||||||||||||||||||||
Bolton Distribution Center | 1 | 7,973 | - | 24,803 | 8,333 | 24,443 | 32,776 | (2,890 | ) | 2009 | ||||||||||||||||||||||||||
Keele Distribution Center | 1 | 1,239 | 4,972 | 529 | 1,295 | 5,445 | 6,740 | (823 | ) | 2011 | ||||||||||||||||||||||||||
Meadowvale Dist Ctr | 1 | 14,647 | - | 21,297 | 15,027 | 20,917 | 35,944 | (135 | ) | 2014 | ||||||||||||||||||||||||||
Millcreek Distribution Ctr | 2 | 8,630 | 32,829 | 688 | 9,020 | 33,127 | 42,147 | (3,612 | ) | 2011 | ||||||||||||||||||||||||||
Milton 401 Bus. Park | 1 | 6,733 | 22,057 | 3,087 | 7,036 | 24,841 | 31,877 | (2,985 | ) | 2011 | ||||||||||||||||||||||||||
Milton 402 Bus Park | 2 | 11,044 | 37,861 | 868 | 11,416 | 38,357 | 49,773 | (2,412 | ) | 2011, 2014 | ||||||||||||||||||||||||||
Milton Crossings Bus Pk | 2 | 19,664 | 47,864 | 3,555 | 20,551 | 50,532 | 71,083 | (5,415 | ) | 2011 | ||||||||||||||||||||||||||
Mississauga Gateway Center | 6 | 54,233 | 132,288 | 830 | 54,509 | 132,842 | 187,351 | (2,398 | ) | 2008, 2014 | ||||||||||||||||||||||||||
Pearson Logist. Ctr | 2 | 12,545 | 44,969 | 1,381 | 13,111 | 45,784 | 58,895 | (4,815 | ) | 2011 | ||||||||||||||||||||||||||
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Canada | 21 | 168,291 | 413,333 | 61,104 | 173,307 | 469,421 | 642,728 | (35,447 | ) | |||||||||||||||||||||||||||
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Subtotal North American Markets: | 1,542 | 3,903,706 | 11,363,912 | 2,316,367 | 4,004,395 | 13,579,590 | 17,583,985 | (2,631,273 | ) | |||||||||||||||||||||||||||
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European Markets | ||||||||||||||||||||||||||||||||||||
Austria | ||||||||||||||||||||||||||||||||||||
Himberg DC | 1 | 3,714 | - | 5,872 | 3,724 | 5,862 | 9,586 | (571 | ) | 2011 | ||||||||||||||||||||||||||
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Austria | 1 | 3,714 | - | 5,872 | 3,724 | 5,862 | 9,586 | (571 | ) | |||||||||||||||||||||||||||
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Belgium | ||||||||||||||||||||||||||||||||||||
Boom Distribution Ct | 1 | 13,672 | 18,478 | 81 | 13,672 | 18,559 | 32,231 | (2,090 | ) | 2011 | ||||||||||||||||||||||||||
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Belgium | 1 | 13,672 | 18,478 | 81 | 13,672 | 18,559 | 32,231 | (2,090 | ) | |||||||||||||||||||||||||||
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Czech Republic | ||||||||||||||||||||||||||||||||||||
Uzice Distribution Center | 1 | 2,701 | - | 17,441 | 2,701 | 17,441 | 20,142 | (3,517 | ) | 2007 | ||||||||||||||||||||||||||
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Czech Republic | 1 | 2,701 | - | 17,441 | 2,701 | 17,441 | 20,142 | (3,517 | ) | |||||||||||||||||||||||||||
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France | ||||||||||||||||||||||||||||||||||||
Bonneuil Distribution Center | 1 | - | - | 16,587 | - | 16,587 | 16,587 | (3,852 | ) | 2012 | ||||||||||||||||||||||||||
Isle d’Abeau Distribution Center | 1 | 3,175 | 14,247 | 3,428 | 4,332 | 16,518 | 20,850 | (2,493 | ) | 2011 | ||||||||||||||||||||||||||
LGR Genevill. 1 SAS | 1 | 2,237 | 2,427 | 817 | 2,237 | 3,244 | 5,481 | (326 | ) | 2011 | ||||||||||||||||||||||||||
LGR Genevill. 2 SAS | 1 | 1,720 | 3,564 | 41 | 1,720 | 3,605 | 5,325 | (349 | ) | 2011 | ||||||||||||||||||||||||||
Moissy II Distribution Center | 1 | 5,551 | - | 7,454 | 5,501 | 7,504 | 13,005 | (93 | ) | 2014 | ||||||||||||||||||||||||||
Port of Rouen | 1 | - | 15,480 | 88 | - | 15,568 | 15,568 | (2,054 | ) | 2011 | ||||||||||||||||||||||||||
Vemars Distribution Center | 1 | 8,300 | - | 12,679 | 8,300 | 12,679 | 20,979 | (210 | ) | 2014 | ||||||||||||||||||||||||||
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France | 7 | 20,983 | 35,718 | 41,094 | 22,090 | 75,705 | 97,795 | (9,377 | ) | |||||||||||||||||||||||||||
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Germany | ||||||||||||||||||||||||||||||||||||
Hausbruch Ind Ctr 4-B | 1 | 8,294 | 5,395 | 130 | 8,294 | 5,525 | 13,819 | (1,571 | ) | 2011 | ||||||||||||||||||||||||||
Hausbruch Ind Ctr 5-650 | 1 | 2,986 | 460 | 244 | 2,986 | 704 | 3,690 | (120 | ) | 2011 | ||||||||||||||||||||||||||
Huenxe Dist Ctr | 1 | 2,062 | - | 9,220 | 1,587 | 9,695 | 11,282 | (572 | ) | 2012 | ||||||||||||||||||||||||||
Kolleda Distribution Center | 1 | 257 | 3,974 | (318 | ) | 257 | 3,656 | 3,913 | (514 | ) | 2008 | |||||||||||||||||||||||||
Lauenau Dist Ctr | 1 | 2,784 | 6,197 | 296 | 2,784 | 6,493 | 9,277 | (819 | ) | 2011 | ||||||||||||||||||||||||||
Meerane Distribution Center | 1 | 686 | 5,274 | (242 | ) | 686 | 5,032 | 5,718 | (670 | ) | 2008 | |||||||||||||||||||||||||
Muggensturm | 2 | 3,533 | 14,328 | 128 | 3,533 | 14,456 | 17,989 | (1,876 | ) | 2011 | ||||||||||||||||||||||||||
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Germany | 8 | 20,602 | 35,628 | 9,458 | 20,127 | 45,561 | 65,688 | (6,142 | ) | |||||||||||||||||||||||||||
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PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
Puente Grande Distribution Center | 2 | (d) | 14,975 | 6,813 | 14,394 | 14,889 | 21,293 | 36,182 | (2,287) | 2008, 2009 | ||||||||||||||||||||||||||||
Ramon Rivera Lara Industrial Center | 1 | 444 | - | 4,494 | 2,269 | 2,669 | 4,938 | (891) | 2000 | |||||||||||||||||||||||||||||
Reynosa Ind Ctr | 1 | 756 | 3,976 | - | 756 | 3,976 | 4,732 | (143) | 2012 | |||||||||||||||||||||||||||||
Reynosa Ind Ctr III | 4 | 3,072 | 16,676 | - | 3,072 | 16,676 | 19,748 | (589) | 2012 | |||||||||||||||||||||||||||||
Tijuana Ind Ctr Iilam | 1 | 1,297 | 7,160 | - | 1,297 | 7,160 | 8,457 | (232) | 2012 | |||||||||||||||||||||||||||||
Tijuana Infd Ctr | 9 | 9,587 | 52,761 | - | 9,587 | 52,761 | 62,348 | (1,829) | 2012 | |||||||||||||||||||||||||||||
Toluca Distribution Center | 1 | (d) | 7,952 | - | 16,344 | 7,952 | 16,344 | 24,296 | (1,289) | 2009 | ||||||||||||||||||||||||||||
Tres Rios | 4 | (d) | 14,009 | 14,600 | 11,103 | 14,750 | 24,962 | 39,712 | (331) | 2011, 2012 | ||||||||||||||||||||||||||||
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Mexico | 87 | 181,594 | 458,652 | 145,476 | 183,840 | 601,882 | 785,722 | (43,406) | ||||||||||||||||||||||||||||||
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Canada: | ||||||||||||||||||||||||||||||||||||||
Airport Rd. Dist Ctr | 1 | 30,345 | 85,368 | 1,678 | 31,715 | 85,676 | 117,391 | (4,035) | 2011 | |||||||||||||||||||||||||||||
Annagem Dist. Center | 1 | 4,093 | 14,000 | 878 | 4,278 | 14,693 | 18,971 | (708) | 2011 | |||||||||||||||||||||||||||||
Annagem Distrib Centre II | 1 | 2,304 | 5,905 | 437 | 2,408 | 6,238 | 8,646 | (335) | 2011 | |||||||||||||||||||||||||||||
Bolton Distribution Center | 1 | 9,275 | - | 28,789 | 9,694 | 28,370 | 38,064 | (1,823) | 2009 | |||||||||||||||||||||||||||||
Keele Distribution Center | 1 | 1,442 | 5,785 | 326 | 1,507 | 6,046 | 7,553 | (340) | 2011 | |||||||||||||||||||||||||||||
Millcreek Distribution Ctr | 2 | 10,040 | 38,191 | 524 | 10,493 | 38,262 | 48,755 | (1,857) | 2011 | |||||||||||||||||||||||||||||
Milton 401 Bus. Park | 1 | 7,832 | 25,660 | 355 | 8,186 | 25,661 | 33,847 | (1,181) | 2011 | |||||||||||||||||||||||||||||
Milton 402 Bus Park | 1 | 7,288 | 21,804 | 328 | 7,616 | 21,804 | 29,420 | (1,044) | 2011 | |||||||||||||||||||||||||||||
Milton Crossings Bus Pk | 2 | 22,876 | 55,682 | 3,903 | 23,908 | 58,553 | 82,461 | (2,756) | 2011 | |||||||||||||||||||||||||||||
Mississauga Gateway Center | 1 | 2,338 | 8,121 | 452 | 2,424 | 8,487 | 10,911 | (1,098) | 2008 | |||||||||||||||||||||||||||||
Pearson Logist. Ctr | 2 | 14,594 | 52,313 | 1,393 | 15,253 | 53,047 | 68,300 | (2,452) | 2011 | |||||||||||||||||||||||||||||
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Canada | 14 | 112,427 | 312,829 | 39,063 | 117,482 | 346,837 | 464,319 | (17,629) | ||||||||||||||||||||||||||||||
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Subtotal Americas | 1,547 | 3,349,780 | 9,983,555 | 1,764,094 | 3,447,101 | 11,650,328 | 15,097,429 | (2,040,139) | ||||||||||||||||||||||||||||||
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European Markets: | ||||||||||||||||||||||||||||||||||||||
Austria | ||||||||||||||||||||||||||||||||||||||
Himberg DC | 1 | 4,070 | - | 6,415 | 4,082 | 6,403 | 10,485 | (265) | 2011 | |||||||||||||||||||||||||||||
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Austria | 1 | 4,070 | - | 6,415 | 4,082 | 6,403 | 10,485 | (265) | ||||||||||||||||||||||||||||||
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Belgium | ||||||||||||||||||||||||||||||||||||||
Boom Distribution Ct | 1 | 14,979 | 20,246 | - | 14,979 | 20,246 | 35,225 | (999) | 2011 | |||||||||||||||||||||||||||||
Liege Park | 1 | 499 | 20,156 | 74 | 499 | 20,230 | 20,729 | (1,221) | 2011 | |||||||||||||||||||||||||||||
Tongeren Dist Ctr | 1 | (d) | 858 | 15,577 | (501 | ) | 858 | 15,076 | 15,934 | (915) | 2011 | |||||||||||||||||||||||||||
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Belgium | 3 | 16,336 | 55,979 | (427 | ) | 16,336 | 55,552 | 71,888 | (3,135) | |||||||||||||||||||||||||||||
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Czech Republic | ||||||||||||||||||||||||||||||||||||||
Ostrava Distribution Center | 2 | 8,082 | 58,144 | (5,289 | ) | 9,718 | 51,219 | 60,937 | (5,315) | 2008 | ||||||||||||||||||||||||||||
Prague East Dist Ctr | 9 | (d) | 22,937 | 74,285 | (3,537 | ) | 22,966 | 70,719 | 93,685 | (5,623) | 2011 | |||||||||||||||||||||||||||
Prague West | 3 | (d) | 5,800 | 24,156 | 601 | 5,800 | 24,757 | 30,557 | (1,895) | 2011 | ||||||||||||||||||||||||||||
Prague-Jirny Dist. Ctr | 1 | 6,093 | - | 11,573 | 6,093 | 11,573 | 17,666 | (344) | 2012 | |||||||||||||||||||||||||||||
Stenovice Distribution Center | 3 | 4,270 | 32,786 | 12,215 | 4,902 | 44,369 | 49,271 | (4,183) | 2008, 2009 | |||||||||||||||||||||||||||||
Uzice Distribution Center | 3 | 8,289 | - | 56,840 | 8,289 | 56,840 | 65,129 | (7,403) | 2007, 2009 | |||||||||||||||||||||||||||||
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Czech Republic | 21 | 55,471 | 189,371 | 72,403 | 57,768 | 259,477 | 317,245 | (24,763) | ||||||||||||||||||||||||||||||
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France | ||||||||||||||||||||||||||||||||||||||
Aulnay Dist Ctr | 2 | 7,875 | 42,816 | (8,547 | ) | 7,875 | 34,269 | 42,144 | (2,458) | 2011 | ||||||||||||||||||||||||||||
Belfort Dist Ctr | 1 | 2,494 | 20,334 | (702 | ) | 2,494 | 19,632 | 22,126 | (1,319) | 2011 | ||||||||||||||||||||||||||||
Blois Dist Ctr | 1 | 4,922 | 35,247 | (1,311 | ) | 4,922 | 33,936 | 38,858 | (3,156) | 2011 | ||||||||||||||||||||||||||||
Cavaillon Dist Ctr | 1 | (d | ) | 1,330 | 18,140 | (287 | ) | 1,330 | 17,853 | 19,183 | (1,413) | 2011 | ||||||||||||||||||||||||||
Clesud Grans Miramas Distribution Center | 6 | (d | ) | 11,109 | 101,463 | (2,365 | ) | 11,109 | 99,098 | 110,207 | (6,628) | 2011 | ||||||||||||||||||||||||||
Evry Dist Ctr | 5 | (d | ) | 20,415 | 129,473 | (1,965 | ) | 20,415 | 127,508 | 147,923 | (10,132) | 2011 | ||||||||||||||||||||||||||
FM Portfolio Acquisition | 1 | 6,861 | 23,141 | (455 | ) | 6,861 | 22,686 | 29,547 | (1,816) | 2011 | ||||||||||||||||||||||||||||
Isle dAbeau C | 1 | 3,782 | 13,646 | 5 | 3,782 | 13,651 | 17,433 | (687) | 2011 | |||||||||||||||||||||||||||||
Isle d’Abeau DC | 1 | 3,815 | 25,223 | 7 | 3,815 | 25,230 | 29,045 | (1,008) | 2011 | |||||||||||||||||||||||||||||
Isle d’Abeau Distribution Center | 12 | (d | ) | 33,160 | 167,372 | 8,292 | 33,160 | 175,664 | 208,824 | (16,236) | 2011 | |||||||||||||||||||||||||||
Le Havre DC | 1 | 6,278 | 12,573 | (576 | ) | 6,278 | 11,997 | 18,275 | (582) | 2011 | ||||||||||||||||||||||||||||
Le Havre Distribution Center | 6 | (d | ) | 13,785 | 91,818 | 12,441 | 13,785 | 104,259 | 118,044 | (7,650) | 2009, 2011 | |||||||||||||||||||||||||||
LGR Genevill. 1 SAS | 1 | 2,451 | 2,659 | 869 | 2,451 | 3,528 | 5,979 | (152) | 2011 | |||||||||||||||||||||||||||||
LGR Genevill. 2 SAS | 1 | 1,884 | 3,905 | 12 | 1,884 | 3,917 | 5,801 | (164) | 2011 | |||||||||||||||||||||||||||||
Lille Dist Ctr | 3 | (d | ) | 5,284 | 39,849 | (989 | ) | 5,284 | 38,860 | 44,144 | (2,383) | 2011 | ||||||||||||||||||||||||||
Lognes Dist Ctr | 1 | 3,059 | 10,807 | (560 | ) | 3,059 | 10,247 | 13,306 | (884) | 2011 | ||||||||||||||||||||||||||||
Metz Dist Ctr | 1 | (d | ) | 2,235 | 8,112 | (286 | ) | 2,235 | 7,826 | 10,061 | (630) | 2011 | ||||||||||||||||||||||||||
Mitry Mory Distribution Center | 2 | 6,996 | 44,314 | (2,060 | ) | 6,996 | 42,254 | 49,250 | (3,696) | 2011 |
No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | |||||||||||||||||||||||||||||||
Description | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | ||||||||||||||||||||||||||||||
Hungary | ||||||||||||||||||||||||||||||||||||
Budapest-Sziget Dist. Center | 2 | 3,361 | 8,768 | 5,588 | 3,399 | 14,318 | 17,717 | (1,125 | ) | 2008, 2014 | ||||||||||||||||||||||||||
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Hungary | 2 | 3,361 | 8,768 | 5,588 | 3,399 | 14,318 | 17,717 | (1,125 | ) | |||||||||||||||||||||||||||
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Italy | ||||||||||||||||||||||||||||||||||||
Arena Po Dist Ctr | 2 | 8,275 | 22,399 | 103 | 8,275 | 22,502 | 30,777 | (3,939 | ) | 2011 | ||||||||||||||||||||||||||
Castel San Giovanni Dist Ctr | 1 | 3,439 | 10,501 | 146 | 3,439 | 10,647 | 14,086 | (1,460 | ) | 2011 | ||||||||||||||||||||||||||
Siziano Logis Park | 1 | 10,985 | 19,914 | 838 | 10,985 | 20,752 | 31,737 | (2,412 | ) | 2011 | ||||||||||||||||||||||||||
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Italy | 4 | 22,699 | 52,814 | 1,087 | 22,699 | 53,901 | 76,600 | (7,811 | ) | |||||||||||||||||||||||||||
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Poland | ||||||||||||||||||||||||||||||||||||
Nadarzyn Distribution Center | 1 | 2,511 | - | 7,733 | 2,508 | 7,736 | 10,244 | (1,138 | ) | 2009 | ||||||||||||||||||||||||||
Piotrkow II Distribution Center | 1 | 1,633 | - | 5,564 | 1,590 | 5,607 | 7,197 | (947 | ) | 2009 | ||||||||||||||||||||||||||
Sochaczew Distribution Center. | 2 | 133 | 11,797 | 1,997 | 773 | 13,154 | 13,927 | (2,430 | ) | 2008 | ||||||||||||||||||||||||||
Szczecin Distribution Center | 1 | 310 | - | 4,419 | 310 | 4,419 | 4,729 | (32 | ) | 2014 | ||||||||||||||||||||||||||
Teresin Dist Ctr | 2 | 3,395 | 17,739 | 951 | 4,024 | 18,061 | 22,085 | (2,486 | ) | 2011 | ||||||||||||||||||||||||||
Wroclaw V DC | 3 | 8,687 | - | 32,462 | 8,687 | 32,462 | 41,149 | (944 | ) | 2013, 2014 | ||||||||||||||||||||||||||
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Poland | 10 | 16,669 | 29,536 | 53,126 | 17,892 | 81,439 | 99,331 | (7,977 | ) | |||||||||||||||||||||||||||
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Romania | ||||||||||||||||||||||||||||||||||||
Bucharest Distribution Center | 4 | 7,007 | 30,630 | 11,642 | 8,758 | 40,521 | 49,279 | (7,729 | ) | 2007, 2008 | ||||||||||||||||||||||||||
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Romania | 4 | 7,007 | 30,630 | 11,642 | 8,758 | 40,521 | 49,279 | (7,729 | ) | |||||||||||||||||||||||||||
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Slovakia | ||||||||||||||||||||||||||||||||||||
Bratislava Distribution Center | 1 | 2,393 | - | 10,840 | 2,393 | 10,840 | 13,233 | (346 | ) | 2012 | ||||||||||||||||||||||||||
Sered Distribution Center | 1 | 2,424 | - | 13,139 | 2,424 | 13,139 | 15,563 | (1,791 | ) | 2009 | ||||||||||||||||||||||||||
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Slovakia | 2 | 4,817 | - | 23,979 | 4,817 | 23,979 | 28,796 | (2,137 | ) | |||||||||||||||||||||||||||
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Spain | ||||||||||||||||||||||||||||||||||||
Barajas MAD Logistics | 4 | - | 39,276 | 937 | - | 40,213 | 40,213 | (5,759 | ) | 2011 | ||||||||||||||||||||||||||
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Spain | 4 | - | 39,276 | 937 | - | 40,213 | 40,213 | (5,759 | ) | |||||||||||||||||||||||||||
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Sweden | ||||||||||||||||||||||||||||||||||||
Orebro Dist Ctr | 1 | 10,064 | 22,004 | 2,196 | 10,064 | 24,200 | 34,264 | (4,551 | ) | 2011 | ||||||||||||||||||||||||||
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Sweden | 1 | 10,064 | 22,004 | 2,196 | 10,064 | 24,200 | 34,264 | (4,551 | ) | |||||||||||||||||||||||||||
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United Kingdom | ||||||||||||||||||||||||||||||||||||
Midpoint Park | 2 | 31,375 | 12,061 | 19,207 | 31,407 | 31,236 | 62,643 | (1,972 | ) | 2008, 2013 | ||||||||||||||||||||||||||
North Kettering Bus Pk | 1 | 2,518 | 7,477 | 7,187 | 3,759 | 13,423 | 17,182 | (3,634 | ) | 2007 | ||||||||||||||||||||||||||
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United Kingdom | 3 | 33,893 | 19,538 | 26,394 | 35,166 | 44,659 | 79,825 | (5,606 | ) | |||||||||||||||||||||||||||
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Subtotal European Markets: | 48 | 160,182 | 292,390 | 198,895 | 165,109 | 486,358 | 651,467 | (64,392 | ) | |||||||||||||||||||||||||||
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Asia Markets | ||||||||||||||||||||||||||||||||||||
China | ||||||||||||||||||||||||||||||||||||
Dalian Ind. Park DC | 1 | 2,538 | 14,543 | 108 | 2,443 | 14,746 | 17,189 | (1,468 | ) | 2011 | ||||||||||||||||||||||||||
Fengxian Logistics C | 3 | - | 13,773 | 624 | - | 14,397 | 14,397 | (3,566 | ) | 2011 | ||||||||||||||||||||||||||
Jiaxing Distri Ctr | 4 | 11,454 | 11,104 | 14,288 | 11,103 | 25,743 | 36,846 | (1,625 | ) | 2011, 2013 | ||||||||||||||||||||||||||
Tianjin Bonded LP | 2 | 1,565 | 9,485 | 58 | 1,502 | 9,606 | 11,108 | (1,090 | ) | 2011 | ||||||||||||||||||||||||||
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China | 10 | 15,557 | 48,905 | 15,078 | 15,048 | 64,492 | 79,540 | (7,749 | ) | |||||||||||||||||||||||||||
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Japan | ||||||||||||||||||||||||||||||||||||
ProLogis Park Aichi Distribution Center | 1 | 18,428 | - | 74,195 | 24,691 | 67,932 | 92,623 | (12,927 | ) | 2007 | ||||||||||||||||||||||||||
ProLogis Park Narita III | 1 | 17,145 | 60,785 | 9,604 | 18,394 | 69,140 | 87,534 | (9,674 | ) | 2008 | ||||||||||||||||||||||||||
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Japan | 2 | 35,573 | 60,785 | 83,799 | 43,085 | 137,072 | 180,157 | (22,601 | ) | |||||||||||||||||||||||||||
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Singapore | ||||||||||||||||||||||||||||||||||||
Airport Logistics Center 3 | 1 | - | 25,736 | 121 | - | 25,857 | 25,857 | (4,124 | ) | 2011 | ||||||||||||||||||||||||||
Changi South Distr Ctr 1 | 1 | - | 41,942 | 113 | - | 42,055 | 42,055 | (6,144 | ) | 2011 | ||||||||||||||||||||||||||
Changi-North DC1 | 1 | - | 13,877 | 1,844 | - | 15,721 | 15,721 | (2,108 | ) | 2011 | ||||||||||||||||||||||||||
Singapore Airport Logist Ctr 2 | 1 | - | 37,267 | 201 | - | 37,468 | 37,468 | (5,983 | ) | 2011 | ||||||||||||||||||||||||||
Tuas Distribution Center | 1 | - | 18,929 | 273 | - | 19,202 | 19,202 | (4,461 | ) | 2011 | ||||||||||||||||||||||||||
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Singapore | 5 | - | 137,751 | 2,552 | - | 140,303 | 140,303 | (22,820 | ) | |||||||||||||||||||||||||||
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Subtotal Asian Markets: | 17 | 51,130 | 247,441 | 101,429 | 58,133 | 341,867 | 400,000 | (53,170 | ) | |||||||||||||||||||||||||||
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Total Industrial Operating Properties: | 1,607 | 4,115,018 | 11,903,743 | 2,616,691 | 4,227,637 | 14,407,815 | 18,635,452 | (2,748,835 | ) | |||||||||||||||||||||||||||
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PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
Moissy Cramayel Distribution Center | 2 | 5,127 | 6,230 | 19,377 | 5,158 | 25,576 | 30,734 | (1,734) | 2009, 2011 | |||||||||||||||||||||||||||||
Orleans Dist Ctr | 7 | (d | ) | 20,901 | 133,287 | (4,060 | ) | 20,901 | 129,227 | 150,128 | (8,766) | 2011 | ||||||||||||||||||||||||||
Plessis Dist Ctr | 2 | 5,221 | 31,824 | (991 | ) | 5,221 | 30,833 | 36,054 | (2,391) | 2011 | ||||||||||||||||||||||||||||
Port of Rouen | 1 | - | 16,960 | 19 | - | 16,979 | 16,979 | (987) | 2011 | |||||||||||||||||||||||||||||
Rennes Distribution Center | 1 | 571 | - | 11,785 | 571 | 11,785 | 12,356 | (910) | 2009 | |||||||||||||||||||||||||||||
Savigny le Temple Dist Ctr | 1 | (d | ) | 1,876 | 29,923 | (903 | ) | 1,876 | 29,020 | 30,896 | (2,253) | 2011 | ||||||||||||||||||||||||||
Strasbourg Distribution Center | 2 | - | 30,767 | (4,255 | ) | - | 26,512 | 26,512 | (2,663) | 2008 | ||||||||||||||||||||||||||||
Vemars Distribution Center | 4 | 12,992 | - | 44,189 | 12,992 | 44,189 | 57,181 | (3,173) | 2009 | |||||||||||||||||||||||||||||
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France | 67 | 184,423 | 1,039,883 | 66,684 | 184,454 | 1,106,536 | 1,290,990 | (83,871) | ||||||||||||||||||||||||||||||
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Germany | ||||||||||||||||||||||||||||||||||||||
Alzenau Distribution Center | 2 | (d | ) | 8,080 | 22,362 | (2,693 | ) | 8,080 | 19,669 | 27,749 | (1,540) | 2008, 2011 | ||||||||||||||||||||||||||
Augsburg Distribution Center | 3 | 12,261 | - | 24,670 | 12,261 | 24,670 | 36,931 | (1,350) | 2009, 2012 | |||||||||||||||||||||||||||||
Bingen Dist Ctr | 1 | (d | ) | 5,563 | 13,210 | (695 | ) | 5,563 | 12,515 | 18,078 | (1,109) | 2011 | ||||||||||||||||||||||||||
Cologne Eifeltor Distribution Center | 3 | (d | ) | 13,291 | 25,717 | 7,501 | 13,000 | 33,509 | 46,509 | (1,717) | 2011, 2012 | |||||||||||||||||||||||||||
Gernsheim Dist Ctr | 1 | (d | ) | 4,867 | 8,051 | (455 | ) | 4,867 | 7,596 | 12,463 | (521) | 2011 | ||||||||||||||||||||||||||
Hannover Airport Dist Ctr | 1 | 3,490 | - | 8,365 | 3,490 | 8,365 | 11,855 | (365) | 2010 | |||||||||||||||||||||||||||||
Hausbruch Ind Ctr 4-B | 1 | 9,087 | 5,910 | 132 | 9,087 | 6,042 | 15,129 | (768) | 2011 | |||||||||||||||||||||||||||||
Hausbruch Ind Ctr 5-650 | 1 | 3,271 | 504 | 7 | 3,271 | 511 | 3,782 | (47) | 2011 | |||||||||||||||||||||||||||||
Huenxe Dist Ctr | 1 | 2,259 | - | 10,220 | 1,739 | 10,740 | 12,479 | (79) | 2012 | |||||||||||||||||||||||||||||
Kolleda Distribution Center | 1 | 282 | 4,354 | (348 | ) | 282 | 4,006 | 4,288 | (363) | 2008 | ||||||||||||||||||||||||||||
Lauenau Dist Ctr | 1 | 3,050 | 6,789 | 36 | 3,050 | 6,825 | 9,875 | (446) | 2011 | |||||||||||||||||||||||||||||
Martinszehnten Dist Ctr | 1 | 5,332 | 7,812 | 40 | 5,332 | 7,852 | 13,184 | (580) | 2011 | |||||||||||||||||||||||||||||
Meerane Distribution Center | 1 | 751 | 5,778 | (266 | ) | 751 | 5,512 | 6,263 | (450) | 2008 | ||||||||||||||||||||||||||||
Muggensturm | 2 | 3,871 | 15,698 | 59 | 3,871 | 15,757 | 19,628 | (1,021) | 2011 | |||||||||||||||||||||||||||||
Neustadt Dist Ctr | 1 | (d | ) | 4,661 | 10,322 | (429 | ) | 4,661 | 9,893 | 14,554 | (639) | 2011 | ||||||||||||||||||||||||||
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Germany | 21 | 80,116 | 126,507 | 46,144 | 79,305 | 173,462 | 252,767 | (10,995) | ||||||||||||||||||||||||||||||
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Hungary | ||||||||||||||||||||||||||||||||||||||
Batta Distribution Center | 2 | 4,147 | 16,006 | 3,785 | 6,046 | 17,892 | 23,938 | (1,741) | 2008, 2010 | |||||||||||||||||||||||||||||
Budaors Dist Ctr | 1 | 3,059 | 16,267 | (729 | ) | 3,059 | 15,538 | 18,597 | (1,139) | 2011 | ||||||||||||||||||||||||||||
Budapest Park | 3 | (d | ) | 2,270 | 27,162 | (677 | ) | 2,270 | 26,485 | 28,755 | (2,015) | 2011 | ||||||||||||||||||||||||||
Budapest Park Phase II | 1 | 963 | 21,452 | (5,039 | ) | 4,353 | 13,023 | 17,376 | (1,886) | 2008 | ||||||||||||||||||||||||||||
Budapest-Sziget Dist. Center | 1 | 2,794 | 9,606 | (734 | ) | 2,835 | 8,831 | 11,666 | (732) | 2008 | ||||||||||||||||||||||||||||
Harbor Park Dist Ctr | 10 | 5,720 | 62,663 | (2,196 | ) | 5,720 | 60,467 | 66,187 | (5,178) | 2011 | ||||||||||||||||||||||||||||
Hegyeshalom Distribution Center | 1 | 976 | - | 11,102 | 1,070 | 11,008 | 12,078 | (1,328) | 2007 | |||||||||||||||||||||||||||||
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Hungary | 19 | 19,929 | 153,156 | 5,512 | 25,353 | 153,244 | 178,597 | (14,019) | ||||||||||||||||||||||||||||||
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Italy | ||||||||||||||||||||||||||||||||||||||
Arena Po Dist Ctr | 2 | 9,066 | 24,541 | 109 | 9,066 | 24,650 | 33,716 | (1,894) | 2011 | |||||||||||||||||||||||||||||
Bologna Distribution Center | 1 | (d | ) | 7,836 | 31,848 | (1,304 | ) | 7,836 | 30,544 | 38,380 | (2,499) | 2011 | ||||||||||||||||||||||||||
Castel San Giovanni Dist Ctr | 1 | 3,768 | 11,505 | 34 | 3,768 | 11,539 | 15,307 | (847) | 2011 | |||||||||||||||||||||||||||||
Cortemaggiore Dist Ctr | 1 | 6,652 | 24,237 | (558 | ) | 6,652 | 23,679 | 30,331 | (1,843) | 2011 | ||||||||||||||||||||||||||||
Lodi Distribution Center | 7 | (d | ) | 35,692 | 110,061 | (875 | ) | 39,721 | 105,157 | 144,878 | (13,450) | 2005, 2006, 2011 | ||||||||||||||||||||||||||
Milan West Dist Ctr | 1 | 4,489 | 17,468 | 81 | 4,489 | 17,549 | 22,038 | (1,315) | 2011 | |||||||||||||||||||||||||||||
Piacenza Dist Ctr | 4 | (d | ) | 14,516 | 46,064 | (1,317 | ) | 14,516 | 44,747 | 59,263 | (2,819) | 2011 | ||||||||||||||||||||||||||
Romentino Distribution Center | 4 | (d | ) | 12,319 | 29,656 | 28,394 | 12,319 | 58,050 | 70,369 | (6,604) | 2006, 2011 | |||||||||||||||||||||||||||
Siziano Logis Park | 1 | 12,036 | 21,819 | - | 12,036 | 21,819 | 33,855 | (471) | 2011 | |||||||||||||||||||||||||||||
Turin Distribution Center | 1 | 3,703 | 15,437 | (552 | ) | 3,703 | 14,885 | 18,588 | (1,291) | 2011 | ||||||||||||||||||||||||||||
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Italy | 23 | 110,077 | 332,636 | 24,012 | 114,106 | 352,619 | 466,725 | (33,033) | ||||||||||||||||||||||||||||||
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Netherlands | ||||||||||||||||||||||||||||||||||||||
Bleiswijk DC | 1 | 26,959 | 13,669 | (1,769 | ) | 26,959 | 11,900 | 38,859 | (738) | 2011 | ||||||||||||||||||||||||||||
DistriPark Maasvlakte | 3 | - | 28,104 | (1,319 | ) | - | 26,785 | 26,785 | (1,867) | 2011 | ||||||||||||||||||||||||||||
Eemhaven Ind Park | 1 | - | 7,325 | 339 | - | 7,664 | 7,664 | (455) | 2011 | |||||||||||||||||||||||||||||
Lijnden DC | 1 | 7,699 | 4,947 | (543 | ) | �� | 7,699 | 4,404 | 12,103 | (226) | 2011 | |||||||||||||||||||||||||||
Schiphol Dist Ctr | 4 | 19,288 | 64,227 | 285 | 19,288 | 64,512 | 83,800 | (3,672) | 2011 | |||||||||||||||||||||||||||||
Tilburg Dist Ctr | 2 | 8,979 | 48,321 | (1,915 | ) | 8,979 | 46,406 | 55,385 | (2,835) | 2011 | ||||||||||||||||||||||||||||
Trade Port West Dist Ctr | 3 | 13,547 | 29,216 | (1,465 | ) | 13,547 | 27,751 | 41,298 | (2,007) | 2011 | ||||||||||||||||||||||||||||
Veghel Dist Ctr | 1 | 3,671 | 13,793 | (547 | ) | 3,671 | 13,246 | 16,917 | (913) | 2011 | ||||||||||||||||||||||||||||
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Netherlands | 16 | 80,143 | 209,602 | (6,934 | ) | 80,143 | 202,668 | 282,811 | (12,713) | |||||||||||||||||||||||||||||
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Poland | ||||||||||||||||||||||||||||||||||||||
Blonie II Distribution Center | 2 | 6,793 | - | 23,405 | 6,793 | 23,405 | 30,198 | (2,006) | 2009 | |||||||||||||||||||||||||||||
Blonie Ind Park | 4 | (d | ) | 7,080 | 33,835 | (913 | ) | 7,080 | 32,922 | 40,002 | (2,185) | 2011 | ||||||||||||||||||||||||||
Chorzow Distribution Center | 2 | 15,621 | - | 45,725 | 15,621 | 45,725 | 61,346 | (3,526) | 2009 | |||||||||||||||||||||||||||||
Nadarzyn Distribution Center | 1 | 2,751 | - | 8,443 | 2,751 | 8,443 | 11,194 | (672) | 2009 |
No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | |||||||||||||||||||||||||||||
Description | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | ||||||||||||||||||||||||||||
Development Portfolio | ||||||||||||||||||||||||||||||||||
North American Markets: | ||||||||||||||||||||||||||||||||||
United States: | ||||||||||||||||||||||||||||||||||
Atlanta, Georgia | ||||||||||||||||||||||||||||||||||
Park I-85 | 1 | 3,493 | - | 1,643 | 3,493 | 1,643 | 5,136 | |||||||||||||||||||||||||||
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Atlanta, Georgia | 1 | 3,493 | - | 1,643 | 3,493 | 1,643 | 5,136 | |||||||||||||||||||||||||||
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Boston, Massachusetts | ||||||||||||||||||||||||||||||||||
Londonderry | 1 | 10,808 | - | 22,717 | 10,808 | 22,717 | 33,525 | |||||||||||||||||||||||||||
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Boston, Massachusetts | 1 | 10,808 | - | 22,717 | 10,808 | 22,717 | 33,525 | |||||||||||||||||||||||||||
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Central & Eastern, Pennsylvania | ||||||||||||||||||||||||||||||||||
Carlisle Dist Ctr | 1 | 13,931 | - | 5,963 | 13,931 | 5,963 | 19,894 | |||||||||||||||||||||||||||
I-81 Dist Ctr | 1 | 6,416 | - | 11,128 | 6,416 | 11,128 | 17,544 | |||||||||||||||||||||||||||
Lehigh Valley Distribution Center | 1 | 2,897 | - | 1,213 | 2,897 | 1,213 | 4,110 | |||||||||||||||||||||||||||
Central & Eastern, Pennsylvania | 3 | 23,244 | - | 18,304 | 23,244 | 18,304 | 41,548 | |||||||||||||||||||||||||||
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Central Valley, CA | ||||||||||||||||||||||||||||||||||
Patterson Pass Business Center | 1 | - | - | 12,234 | - | 12,234 | 12,234 | |||||||||||||||||||||||||||
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Central Valley, CA | 1 | - | - | 12,234 | - | 12,234 | 12,234 | |||||||||||||||||||||||||||
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Charlotte, North Carolina | ||||||||||||||||||||||||||||||||||
West Pointe Business Center | 1 | 790 | - | 1,819 | 790 | 1,819 | 2,609 | |||||||||||||||||||||||||||
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Charlotte, North Carolina | 1 | 790 | - | 1,819 | 790 | 1,819 | 2,609 | |||||||||||||||||||||||||||
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Chicago, Illinois | ||||||||||||||||||||||||||||||||||
Bolingbrook Distribution Center | 1 | 3,926 | - | 9,937 | 3,926 | 9,937 | 13,863 | |||||||||||||||||||||||||||
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Chicago, Illinois | 1 | 3,926 | - | 9,937 | 3,926 | 9,937 | 13,863 | |||||||||||||||||||||||||||
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Columbus, Ohio | ||||||||||||||||||||||||||||||||||
Etna Distribution Center | 1 | 1,167 | - | 12,811 | 1,167 | 12,811 | 13,978 | 2014 | ||||||||||||||||||||||||||
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Columbus, Ohio | 1 | 1,167 | - | 12,811 | 1,167 | 12,811 | 13,978 | |||||||||||||||||||||||||||
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Dallas/Fort Worth, Texas | ||||||||||||||||||||||||||||||||||
Dallas Corporate Center North Distribution Center | 2 | 4,430 | - | 993 | 4,430 | 993 | 5,423 | |||||||||||||||||||||||||||
Freeport Corp Ctr | 1 | 458 | - | 6,628 | 458 | 6,628 | 7,086 | 2014 | ||||||||||||||||||||||||||
Mountain Creek | 1 | - | - | 4,012 | - | 4,012 | 4,012 | |||||||||||||||||||||||||||
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Dallas/Fort Worth, Texas | 4 | 4,888 | - | 11,633 | 4,888 | 11,633 | 16,521 | |||||||||||||||||||||||||||
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Denver, Colorado | ||||||||||||||||||||||||||||||||||
Stapleton Bus Ctr North | 2 | 7,149 | - | 30,482 | 7,149 | 30,482 | 37,631 | 2014 | ||||||||||||||||||||||||||
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Denver, Colorado | 2 | 7,149 | - | 30,482 | 7,149 | 30,482 | 37,631 | |||||||||||||||||||||||||||
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El Paso, Texas | ||||||||||||||||||||||||||||||||||
Northwestern Corporate Center | 1 | 768 | - | 2,203 | 768 | 2,203 | 2,971 | |||||||||||||||||||||||||||
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El Paso, Texas | 1 | 768 | - | 2,203 | 768 | 2,203 | 2,971 | |||||||||||||||||||||||||||
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Houston, Texas | ||||||||||||||||||||||||||||||||||
Northpark Distribution Center | 2 | 2,012 | - | 10,411 | 2,012 | 10,411 | 12,423 | 2014 | ||||||||||||||||||||||||||
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Houston, Texas | 2 | 2,012 | - | 10,411 | 2,012 | 10,411 | 12,423 | |||||||||||||||||||||||||||
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Las Vegas, Nevada | ||||||||||||||||||||||||||||||||||
Las Vegas Corporate Center | 1 | 2,881 | - | 7,655 | 2,881 | 7,655 | 10,536 | |||||||||||||||||||||||||||
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Las Vegas, Nevada | 1 | 2,881 | - | 7,655 | 2,881 | 7,655 | 10,536 | |||||||||||||||||||||||||||
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Memphis, Tennessee | ||||||||||||||||||||||||||||||||||
DeSoto Distribution Center | 1 | 938 | - | 8,168 | 938 | 8,168 | 9,106 | 2014 | ||||||||||||||||||||||||||
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Memphis, Tennessee | 1 | 938 | - | 8,168 | 938 | 8,168 | 9,106 | |||||||||||||||||||||||||||
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New Jersey | ||||||||||||||||||||||||||||||||||
Port Reading Business Park | 4 | 56,803 | - | 92,208 | 56,803 | 92,208 | 149,011 | 2014 | ||||||||||||||||||||||||||
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New Jersey | 4 | 56,803 | - | 92,208 | 56,803 | 92,208 | 149,011 | |||||||||||||||||||||||||||
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Orlando, Florida | ||||||||||||||||||||||||||||||||||
Beltway Commerce Center | 1 | 1,485 | - | 4,814 | 1,485 | 4,814 | 6,299 | |||||||||||||||||||||||||||
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Orlando, Florida | 1 | 1,485 | - | 4,814 | 1,485 | 4,814 | 6,299 | |||||||||||||||||||||||||||
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PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||
Piotrkow Distribution Center | 5 | (d | ) | 10,595 | 50,429 | (2,590 | ) | 12,122 | 46,312 | 58,434 | (3,505) | 2008, 2011 | ||||||||||||||||||||||||||
Piotrkow II Distribution Center | 1 | 1,789 | - | 6,006 | 1,789 | 6,006 | 7,795 | (523) | 2009 | |||||||||||||||||||||||||||||
Poznan Park | 4 | (d | ) | 5,188 | 18,437 | (915 | ) | 5,188 | 17,522 | 22,710 | (1,071) | 2011 | ||||||||||||||||||||||||||
Sochaczew Distribution Center. | 2 | 146 | 12,925 | 2,059 | 815 | 14,315 | 15,130 | (1,710) | 2008 | |||||||||||||||||||||||||||||
Szczecin Distribution Center | 1 | 3,288 | 21,583 | (31 | ) | 3,295 | 21,545 | 24,840 | (1,930) | 2008 | ||||||||||||||||||||||||||||
Teresin Dist Ctr | 4 | (d | ) | 7,981 | 39,002 | 623 | 8,023 | 39,583 | 47,606 | (2,473) | 2011 | |||||||||||||||||||||||||||
Wroclaw Distribution Center | 4 | (d | ) | 9,469 | 53,375 | (1,551 | ) | 12,034 | 49,259 | 61,293 | (5,155) | 2008, 2011 | ||||||||||||||||||||||||||
Wroclaw III Distribution Center | 2 | 6,599 | - | 31,403 | 6,599 | 31,403 | 38,002 | (2,784) | 2009 | |||||||||||||||||||||||||||||
Wroclaw V DC | 1 | 6,039 | - | 7,779 | 6,039 | 7,779 | 13,818 | (799) | 2011 | |||||||||||||||||||||||||||||
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Poland | 33 | 83,339 | 229,586 | 119,443 | 88,149 | 344,219 | 432,368 | (28,339) | ||||||||||||||||||||||||||||||
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Romania | ||||||||||||||||||||||||||||||||||||||
Bucharest Distribution Center | 4 | 7,677 | 33,559 | 12,418 | 9,596 | 44,058 | 53,654 | (5,412) | 2007, 2008 | |||||||||||||||||||||||||||||
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Romania | 4 | 7,677 | 33,559 | 12,418 | 9,596 | 44,058 | 53,654 | (5,412) | ||||||||||||||||||||||||||||||
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Slovakia | ||||||||||||||||||||||||||||||||||||||
Sered Distribution Center | 1 | 2,656 | - | 14,291 | 2,656 | 14,291 | 16,947 | (1,153) | 2009 | |||||||||||||||||||||||||||||
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Slovakia | 1 | 2,656 | - | 14,291 | 2,656 | 14,291 | 16,947 | (1,153) | ||||||||||||||||||||||||||||||
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Spain | ||||||||||||||||||||||||||||||||||||||
Alcala Dist Ctr | 5 | (d | ) | 33,641 | 87,414 | (4,005 | ) | 33,641 | 83,409 | 117,050 | (6,108) | 2011 | ||||||||||||||||||||||||||
Barajas MAD Logistics | 4 | - | 43,031 | 850 | - | 43,881 | 43,881 | (2,608) | 2011 | |||||||||||||||||||||||||||||
Coslada Dist Ctr | 1 | 5,707 | 8,815 | 29 | 5,707 | 8,844 | 14,551 | (666) | 2011 | |||||||||||||||||||||||||||||
Massalaves Distribution Center | 1 | 2,845 | - | 8,506 | 2,845 | 8,506 | 11,351 | (663) | 2009 | |||||||||||||||||||||||||||||
Penedes Dist Ctr | 1 | 7,742 | 13,058 | (791 | ) | 7,742 | 12,267 | 20,009 | (1,082) | 2011 | ||||||||||||||||||||||||||||
Sallent Distribution Center | 1 | 9,409 | - | 5,757 | 9,409 | 5,757 | 15,166 | (409) | 2009 | |||||||||||||||||||||||||||||
Sant Boi Park | 5 | 82,049 | 89,902 | (5,766 | ) | 82,049 | 84,136 | 166,185 | (5,356) | 2011 | ||||||||||||||||||||||||||||
Tarancon Distribution Center | 1 | 3,728 | 18,524 | (1,181 | ) | 3,728 | 17,343 | 21,071 | (1,537) | 2008 | ||||||||||||||||||||||||||||
Valls Dist Ctr | 1 | 6,651 | 18,332 | (425 | ) | 6,651 | 17,907 | 24,558 | (1,416) | 2011 | ||||||||||||||||||||||||||||
Zaragoza Distribution Center | 1 | 23,289 | - | 33,267 | 23,289 | 33,267 | 56,556 | (2,208) | 2010 | |||||||||||||||||||||||||||||
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Spain | 21 | 175,061 | 279,076 | 36,241 | 175,061 | 315,317 | 490,378 | (22,053) | ||||||||||||||||||||||||||||||
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Sweden | ||||||||||||||||||||||||||||||||||||||
Jonkoping Distribution Center | 1 | 2,419 | - | 63,510 | 2,672 | 63,257 | 65,929 | (4,773) | 2009 | |||||||||||||||||||||||||||||
Norrkoping Dist Ctr | 2 | 18,127 | 42,081 | (1,020 | ) | 18,127 | 41,061 | 59,188 | (3,342) | 2011 | ||||||||||||||||||||||||||||
Orebro Dist Ctr | 1 | 11,027 | 24,108 | 1,270 | 11,027 | 25,378 | 36,405 | (2,354) | 2011 | |||||||||||||||||||||||||||||
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Sweden | 4 | 31,573 | 66,189 | 63,760 | 31,826 | 129,696 | 161,522 | (10,469) | ||||||||||||||||||||||||||||||
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United Kingdom | ||||||||||||||||||||||||||||||||||||||
Bermuda Park Dist Ctr | 1 | (d | ) | 5,126 | 24,336 | (980 | ) | 5,126 | 23,356 | 28,482 | (1,826) | 2011 | ||||||||||||||||||||||||||
Bromford Gate Dist Ctr | 5 | (d | ) | 13,040 | 24,306 | (1,252 | ) | 13,040 | 23,054 | 36,094 | (1,927) | 2011 | ||||||||||||||||||||||||||
Central Park Rugby Dist Ctr | 1 | 9,091 | 7,856 | (466 | ) | 9,128 | 7,353 | 16,481 | (578) | 2011 | ||||||||||||||||||||||||||||
Coventry Distribution Center | 3 | (d | ) | 11,535 | 57,852 | (2,324 | ) | 11,535 | 55,528 | 67,063 | (3,916) | 2011 | ||||||||||||||||||||||||||
Crewe Distribution Center | 1 | 12,099 | 19,906 | 2,416 | 12,099 | 22,322 | 34,421 | (1,917) | 2008 | |||||||||||||||||||||||||||||
Dagenham | 1 | 11,492 | 9,000 | 544 | 11,492 | 9,544 | 21,036 | (538) | 2011 | |||||||||||||||||||||||||||||
Daventry Phase II Dist Ctr | 2 | (d | ) | 4,559 | 23,623 | (900 | ) | 4,559 | 22,723 | 27,282 | (1,526) | 2011 | ||||||||||||||||||||||||||
Dirft Dist Ctr | 1 | 11,279 | - | 9,171 | 11,279 | 9,171 | 20,450 | (332) | 2011 | |||||||||||||||||||||||||||||
Drayton Fields Dist Ctr | 3 | (d | ) | 6,011 | 31,031 | 618 | 6,011 | 31,649 | 37,660 | (1,967) | 2011 | |||||||||||||||||||||||||||
Fort Dunlop Dist Ctr | 1 | 6,169 | 6,820 | (319 | ) | 6,194 | 6,476 | 12,670 | (512) | 2011 | ||||||||||||||||||||||||||||
Grange Park | 1 | (d | ) | 2,125 | 11,451 | (419 | ) | 2,134 | 11,023 | 13,157 | (762) | 2011 | ||||||||||||||||||||||||||
Hayes Distribution Center | 1 | 6,021 | - | 18,350 | 15,968 | 8,403 | 24,371 | (997) | 2007 | |||||||||||||||||||||||||||||
Marston Gate Dist Ctr | 6 | (d | ) | 61,361 | 60,185 | (1,946 | ) | 61,612 | 57,988 | 119,600 | (3,757) | 2011 | ||||||||||||||||||||||||||
Middlewhich Dist Ctr | 1 | 2,132 | 11,493 | (448 | ) | 2,141 | 11,036 | 13,177 | (769) | 2011 | ||||||||||||||||||||||||||||
Midpoint Park | 2 | 30,502 | 31,452 | (4,845 | ) | 30,811 | 26,298 | 57,109 | (2,143) | 2008 | ||||||||||||||||||||||||||||
New Parks Leicester | 1 | (d | ) | 4,708 | 12,427 | (572 | ) | 4,727 | 11,836 | 16,563 | (752) | 2011 | ||||||||||||||||||||||||||
North Kettering Bus Pk | 2 | (d | ) | 12,405 | 24,714 | 7,744 | 12,472 | 32,391 | 44,863 | (2,813) | 2007, 2011 | |||||||||||||||||||||||||||
Pineham Distribution Center | 3 | 46,238 | 31,106 | 23,303 | 40,263 | 60,384 | 100,647 | (4,323) | 2008, 2012 | |||||||||||||||||||||||||||||
Stafford Distribution Center | 1 | 7,870 | - | 15,856 | 7,934 | 15,792 | 23,726 | (2,377) | 2007 | |||||||||||||||||||||||||||||
Wakefield Bldg | 1 | 1,386 | 7,556 | (196 | ) | 1,392 | 7,354 | 8,746 | (472) | 2011 | ||||||||||||||||||||||||||||
Wembley Dist Ctr | 1 | 14,610 | 6,824 | 140 | 14,670 | 6,904 | 21,574 | (413) | 2011 | |||||||||||||||||||||||||||||
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United Kingdom | 39 | 279,759 | 401,938 | 63,475 | 284,587 | 460,585 | 745,172 | (34,617) | ||||||||||||||||||||||||||||||
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Subtotal European Markets: | 273 | 1,130,630 | 3,117,482 | 523,437 | 1,153,422 | 3,618,127 | 4,771,549 | (284,837) | ||||||||||||||||||||||||||||||
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Asian Markets: | ||||||||||||||||||||||||||||||||||||||
China | ||||||||||||||||||||||||||||||||||||||
Dalian Ind. Park DC | 1 | 2,493 | 14,283 | 37 | 2,493 | 14,320 | 16,813 | (614) | 2011 | |||||||||||||||||||||||||||||
Fengxian Logistics C | 3 | — | 13,526 | 19 | — | 13,545 | 13,545 | (1,479) | 2011 |
No. of Bldgs. | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried at December 31, 2014 | Accumulated | Date of | |||||||||||||||||||||||||||||||
Description | Encum- brances | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | ||||||||||||||||||||||||||||||
Portland, Oregon | ||||||||||||||||||||||||||||||||||||
Southshore Corporate Center | 1 | 1,003 | - | 9,986 | 1,003 | 9,986 | 10,989 | |||||||||||||||||||||||||||||
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Portland, Oregon | 1 | 1,003 | - | 9,986 | 1,003 | 9,986 | 10,989 | |||||||||||||||||||||||||||||
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South Florida | ||||||||||||||||||||||||||||||||||||
Beacon Lakes | 2 | 7,369 | - | 17,464 | 7,369 | 17,464 | 24,833 | 2014 | ||||||||||||||||||||||||||||
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South Florida | 2 | 7,369 | - | 17,464 | 7,369 | 17,464 | 24,833 | |||||||||||||||||||||||||||||
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Southern California | ||||||||||||||||||||||||||||||||||||
CAT - Kaiser Comm Ctr | 1 | 4,851 | - | 2,648 | 4,851 | 2,648 | 7,499 | |||||||||||||||||||||||||||||
International Multifoods | 1 | 4,700 | - | 9,135 | 4,700 | 9,135 | 13,835 | |||||||||||||||||||||||||||||
Redlands Distribution Center | 1 | 16,628 | - | 24,565 | 16,628 | 24,565 | 41,193 | 2014 | ||||||||||||||||||||||||||||
Rialto Dist Ctr | 1 | 13,026 | - | 8,502 | 13,026 | 8,502 | 21,528 | |||||||||||||||||||||||||||||
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Southern California | 4 | 39,205 | - | 44,850 | 39,205 | 44,850 | 84,055 | |||||||||||||||||||||||||||||
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Mexico | ||||||||||||||||||||||||||||||||||||
Centro Industrial Center | 1 | 1,252 | - | 270 | 1,252 | 270 | 1,522 | |||||||||||||||||||||||||||||
El Puente Industrial Center | 1 | 1,767 | - | 4,944 | 1,767 | 4,944 | 6,711 | |||||||||||||||||||||||||||||
Los Altos Ind Park | 1 | 2,586 | - | 8,421 | 2,586 | 8,421 | 11,007 | 2014 | ||||||||||||||||||||||||||||
Monterrey Airport | 1 | 11,917 | - | 12,850 | 11,917 | 12,850 | 24,767 | |||||||||||||||||||||||||||||
PDX Corporate Center North/South | 1 | 14,493 | - | 10,850 | 14,493 | 10,850 | 25,343 | |||||||||||||||||||||||||||||
Toluca Distribution Center | 1 | 5,336 | - | 3,492 | 5,336 | 3,492 | 8,828 | |||||||||||||||||||||||||||||
Tres Rios | 2 | 8,364 | - | 13,627 | 8,364 | 13,627 | 21,991 | 2014 | ||||||||||||||||||||||||||||
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Mexico | 8 | 45,715 | - | 54,454 | 45,715 | 54,454 | 100,169 | |||||||||||||||||||||||||||||
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Canada | ||||||||||||||||||||||||||||||||||||
Meadowvale Dist Ctr | 1 | 21,456 | - | 28,624 | 21,456 | 28,624 | 50,080 | 2014 | ||||||||||||||||||||||||||||
Milton 402 Bus Park | 3 | 10,311 | - | 33 | 10,311 | 33 | 10,344 | |||||||||||||||||||||||||||||
Tapscott Dist Ctr | 1 | 3,110 | - | 4,227 | 3,110 | 4,227 | 7,337 | |||||||||||||||||||||||||||||
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Canada | 5 | 34,877 | - | 32,884 | 34,877 | 32,884 | 67,761 | |||||||||||||||||||||||||||||
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Subtotal North American Markets: | 45 | 248,521 | - | 406,677 | 248,521 | 406,677 | 655,198 | |||||||||||||||||||||||||||||
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European Markets | ||||||||||||||||||||||||||||||||||||
Czech Republic | ||||||||||||||||||||||||||||||||||||
Prague Airport Distribution Center | 2 | 5,087 | - | 8,737 | 5,087 | 8,737 | 13,824 | |||||||||||||||||||||||||||||
Prague-Jirny Dist. Ctr | 2 | 5,411 | - | 1,911 | 5,411 | 1,911 | 7,322 | |||||||||||||||||||||||||||||
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Czech Republic | 4 | 10,498 | - | 10,648 | 10,498 | 10,648 | 21,146 | |||||||||||||||||||||||||||||
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France | ||||||||||||||||||||||||||||||||||||
LG Roissy Sorbiers SAS | 1 | 5,508 | - | 13,600 | 5,508 | 13,600 | 19,108 | |||||||||||||||||||||||||||||
Presles Dist Ctr | 1 | 537 | - | 8,656 | 537 | 8,656 | 9,193 | |||||||||||||||||||||||||||||
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France | 2 | 6,045 | - | 22,256 | 6,045 | 22,256 | 28,301 | |||||||||||||||||||||||||||||
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Germany | ||||||||||||||||||||||||||||||||||||
Peine Dist Ctr | 1 | 3,411 | - | 1,677 | 3,411 | 1,677 | 5,088 | |||||||||||||||||||||||||||||
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Germany | 1 | 3,411 | - | 1,677 | 3,411 | 1,677 | 5,088 | |||||||||||||||||||||||||||||
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Netherlands | ||||||||||||||||||||||||||||||||||||
Tilburg Dist Ctr | 1 | 5,381 | - | 4,390 | 5,381 | 4,390 | 9,771 | |||||||||||||||||||||||||||||
Venlo Dist. Center. | 1 | 7,085 | - | 9,724 | 7,085 | 9,724 | 16,809 | |||||||||||||||||||||||||||||
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Netherlands | 2 | 12,466 | - | 14,114 | 12,466 | 14,114 | 26,580 | |||||||||||||||||||||||||||||
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Poland | ||||||||||||||||||||||||||||||||||||
Wroclaw Distribution Center | 1 | 3,937 | - | 8,290 | 3,937 | 8,290 | 12,227 | 2014 | ||||||||||||||||||||||||||||
Wroclaw V DC | 1 | 2,787 | - | 9,411 | 2,787 | 9,411 | 12,198 | 2014 | ||||||||||||||||||||||||||||
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Poland | 2 | 6,724 | - | 17,701 | 6,724 | 17,701 | 24,425 | |||||||||||||||||||||||||||||
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Slovakia | ||||||||||||||||||||||||||||||||||||
Bratislava Distribution Center | 1 | 1,919 | - | 8,024 | 1,919 | 8,024 | 9,943 | |||||||||||||||||||||||||||||
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Slovakia | 1 | 1,919 | - | 8,024 | 1,919 | 8,024 | 9,943 | |||||||||||||||||||||||||||||
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Spain | ||||||||||||||||||||||||||||||||||||
Puerta de Madrid Distribution Center | 1 | 7,126 | - | 1,263 | 7,126 | 1,263 | 8,389 | |||||||||||||||||||||||||||||
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Spain | 1 | 7,126 | - | 1,263 | 7,126 | 1,263 | 8,389 | |||||||||||||||||||||||||||||
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Sweden | ||||||||||||||||||||||||||||||||||||
Gothenburg Distribution Center | 1 | 3,720 | - | 11,953 | 3,720 | 11,953 | 15,673 | 2014 | ||||||||||||||||||||||||||||
Ljungby Distribution Center | 1 | 647 | - | 2,437 | 647 | 2,437 | 3,084 | |||||||||||||||||||||||||||||
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Sweden | 2 | 4,367 | - | 14,390 | 4,367 | 14,390 | 18,757 | |||||||||||||||||||||||||||||
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PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 20122014
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||||||
Jiaxing Distri Ctr | 1 | 2,694 | 10,905 | 182 | 2,615 | 11,166 | 13,781 | (492) | 2011 | |||||||||||||||||||||||||||||||
Tianjin Bonded LP | 2 | 1,537 | 9,315 | 9 | 1,537 | 9,324 | 10,861 | (458) | 2011 | |||||||||||||||||||||||||||||||
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China | 7 | 6,724 | 48,029 | 247 | 6,645 | 48,355 | 55,000 | (3,043) | ||||||||||||||||||||||||||||||||
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Japan | ||||||||||||||||||||||||||||||||||||||||
Ebina Distribution Center | 1 | (d | ) | 61,221 | - | 36,975 | 61,221 | 36,975 | 98,196 | (2,542) | 2010 | |||||||||||||||||||||||||||||
Fukuoka Manami DC 2 | 1 | (d | ) | 14,492 | 45,434 | 34 | 14,492 | 45,468 | 59,960 | (2,291) | 2011 | |||||||||||||||||||||||||||||
Iwanuma I Land | 1 | 6,193 | 37,120 | 6,906 | 6,607 | 43,612 | 50,219 | (3,609) | 2008 | |||||||||||||||||||||||||||||||
Kasugai DC 1 | 1 | (d | ) | 59,969 | 81,898 | 210 | 59,969 | 82,108 | 142,077 | (3,465) | 2011 | |||||||||||||||||||||||||||||
Kawajima Park | 1 | (d | ) | 616 | - | 241,420 | 47,788 | 194,248 | 242,036 | (3,299) | 2011 | |||||||||||||||||||||||||||||
Kitanagoya Distribution Center | 1 | (d | ) | 27,349 | - | 67,010 | 30,231 | 64,128 | 94,359 | (4,030) | 2009 | |||||||||||||||||||||||||||||
Nanko Naka DC 1 | 1 | (d | ) | 13,171 | 52,040 | 107 | 13,171 | 52,147 | 65,318 | (2,337) | 2011 | |||||||||||||||||||||||||||||
ProLogis Park Aichi Distribution Center | 1 | 25,600 | - | 102,799 | 34,301 | 94,098 | 128,399 | (11,734) | 2007 | |||||||||||||||||||||||||||||||
ProLogis Park Ichikawa | 1 | (d | ) | 88,676 | 160,919 | 34,288 | 95,509 | 188,374 | 283,883 | (16,547) | 2008 | |||||||||||||||||||||||||||||
ProLogis Park Maishima III | 1 | (d | ) | 24,398 | 95,668 | 12,350 | 26,151 | 106,265 | 132,416 | (10,252) | 2008 | |||||||||||||||||||||||||||||
ProLogis Park Maishima IV | 1 | (d | ) | 29,174 | 97,693 | 54 | 29,174 | 97,747 | 126,921 | (4,331) | 2010 | |||||||||||||||||||||||||||||
ProLogis Park Narita III | 1 | 23,818 | 84,443 | 13,167 | 25,552 | 95,876 | 121,428 | (8,515) | 2008 | |||||||||||||||||||||||||||||||
ProLogis Park Osaka II | 1 | (d | ) | 29,745 | - | 194,904 | 39,854 | 184,795 | 224,649 | (22,076) | 2007 | |||||||||||||||||||||||||||||
Sendai Tagajo DC | 1 | (d | ) | 18,006 | 38,124 | 3,235 | 18,006 | 41,359 | 59,365 | (2,480) | 2011 | |||||||||||||||||||||||||||||
Shinkiba Dist Crtr 1 | 1 | (d | ) | 52,694 | 97,860 | 222 | 52,694 | 98,082 | 150,776 | (4,437) | 2011 | |||||||||||||||||||||||||||||
Shiohama Distr Ctr 1 | 1 | 24,105 | 28,907 | - | 24,105 | 28,907 | 53,012 | (576) | 2011 | |||||||||||||||||||||||||||||||
Takatsuki Distribution Center | 1 | (d | ) | 268 | - | 41,120 | 20,464 | 20,924 | 41,388 | (477) | 2012 | |||||||||||||||||||||||||||||
Tosu II Land | 1 | (d | ) | 80 | - | 27,374 | 6,300 | 21,154 | 27,454 | (221) | 2012 | |||||||||||||||||||||||||||||
Tosu lV | 1 | (d | ) | 120 | - | 35,225 | 9,667 | 25,678 | 35,345 | (538) | 2012 | |||||||||||||||||||||||||||||
Tsurumi Dist Ctr 1 | 1 | (d | ) | 30,511 | 122,592 | 89 | 30,511 | 122,681 | 153,192 | (5,401) | 2011 | |||||||||||||||||||||||||||||
Zama Distribution Center | 1 | (d | ) | 58,069 | - | 186,139 | 64,188 | 180,020 | 244,208 | (12,807) | 2009 | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Japan | 21 | 588,275 | 942,698 | 1,003,628 | 709,955 | 1,824,646 | 2,534,601 | (121,965) | ||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Singapore | ||||||||||||||||||||||||||||||||||||||||
Airport Logistics Center 3 | 1 | - | 27,877 | 129 | - | 28,006 | 28,006 | (1,930) | 2011 | |||||||||||||||||||||||||||||||
Changi South Distr Ctr 1 | 1 | - | 45,429 | - | - | 45,429 | 45,429 | (2,884) | 2011 | |||||||||||||||||||||||||||||||
Changi-North DC1 | 1 | - | 15,031 | 66 | - | 15,097 | 15,097 | (969) | 2011 | |||||||||||||||||||||||||||||||
Singapore Airport Logist Ctr 2 | 1 | - | 40,366 | 156 | - | 40,522 | 40,522 | (2,801) | 2011 | |||||||||||||||||||||||||||||||
Tuas Distribution Center | 1 | - | 20,503 | 112 | - | 20,615 | 20,615 | (2,074) | 2011 | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Singapore | 5 | - | 149,206 | 463 | - | 149,669 | 149,669 | (10,658) | ||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||||||
Subtotal Asian Markets: | 33 | 594,999 | 1,139,933 | 1,004,338 | 716,600 | 2,022,670 | 2,739,270 | (135,666) | ||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||||||
Total Industrial Operating Properties: | 1,853 | 5,075,409 | 14,240,970 | 3,291,869 | 5,317,123 | 17,291,125 | 22,608,248 | (2,460,642) | ||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||||||
Development Portfolio | ||||||||||||||||||||||||||||||||||||||||
Americas Markets: | ||||||||||||||||||||||||||||||||||||||||
United States: | ||||||||||||||||||||||||||||||||||||||||
Atlanta, GA | ||||||||||||||||||||||||||||||||||||||||
Park I-75 South | 1 | 6,571 | - | 13,968 | 6,571 | 13,968 | 20,539 | 2012 | ||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Atlanta, GA | 1 | 6,571 | - | 13,968 | 6,571 | 13,968 | 20,539 | |||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Baltimore/Washington | ||||||||||||||||||||||||||||||||||||||||
Gateway Bus Ctr | 2 | 2,356 | - | 12,780 | 2,356 | 12,780 | 15,136 | 2012 | ||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Baltimore/Washington | 2 | 2,356 | - | 12,780 | 2,356 | 12,780 | 15,136 | |||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Central & Eastern PA | ||||||||||||||||||||||||||||||||||||||||
Lehigh Valley Distribution Center | 1 | 4,465 | - | 7,245 | 4,465 | 7,245 | 11,710 | 2012 | ||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||||||
Central & Eastern PA | 1 | 4,465 | - | 7,245 | 4,465 | 7,245 | 11,710 | |||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||||||
Central Valley, CA | ||||||||||||||||||||||||||||||||||||||||
Tracy II Distribution Center | 1 | 12,765 | - | 12,147 | 12,765 | 12,147 | 24,912 | 2012 | ||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Central Valley, CA | 1 | 12,765 | - | 12,147 | 12,765 | 12,147 | 24,912 | |||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||||||
Dallas/Fort Worth, TX | ||||||||||||||||||||||||||||||||||||||||
Lancaster Distribution Center | 1 | 2,974 | - | 10,785 | 2,974 | 10,785 | 13,759 | 2012 | ||||||||||||||||||||||||||||||||
Mesquite Dist III | 1 | 1,411 | - | 9,917 | 1,411 | 9,917 | 11,328 | 2012 | ||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Dallas/Fort Worth, TX | 2 | 4,385 | - | 20,702 | 4,385 | 20,702 | 25,087 | |||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||||||
Houston, TX | ||||||||||||||||||||||||||||||||||||||||
Northpark Distribution Center | 3 | 3,807 | - | 7,962 | 3,807 | 7,962 | 11,769 | 2012 | ||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Houston, TX | 3 | 3,807 | - | 7,962 | 3,807 | 7,962 | 11,769 | |||||||||||||||||||||||||||||||||
|
|
|
|
Accumulated Date of United Kingdom Boscombe Road Distribution Center Dirft Dist Ctr Grange Park Heathrow Phase 3 Distribution Center Littlebrook Dist Ctr Midpoint Park United Kingdom Subtotal European Markets: Asian Markets Japan Chiba New Town Distribution Center Hisayama Dist Ctr Joso Dist Ctr Kitamoto Distribution Center Narashino IV Distribution Center Narita 1 Osaka 5 ProLogis Parc Tomiya III ProLogis Park Sendai Yoshimi Distribution Center Japan Subtotal Asian Markets: Total Development Portfolio GRAND TOTAL PROLOGIS, INC. AND PROLOGIS, L.P. No. of
Bldgs. Initial Cost to
Prologis Costs
Capitalized
Subsequent
To
Acquisition Gross Amounts At Which Carried at
December 31, 2014
Depreciation
(c)
Construction/
Acquisition Description Encum-
brances Land Building &
Improvements Land Building &
Improvements Total (a,b) 1 16,206 - 14,850 16,206 14,850 31,056 2014 2 85,368 - 60,515 85,368 60,515 145,883 1 16,797 - 14,451 16,797 14,451 31,248 2 14,174 - 11,409 14,174 11,409 25,583 2014 1 12,360 - 14,817 12,360 14,817 27,177 2 - - 12,275 - 12,275 12,275 9 144,905 - 128,317 144,905 128,317 273,222 24 197,461 - 218,390 197,461 218,390 415,851 1 31,079 - 1,166 31,079 1,166 32,245 1 5,120 - 18,739 5,120 18,739 23,859 1 12,140 - 26,160 12,140 26,160 38,300 2014 1 18,460 - 55,668 18,460 55,668 74,128 2014 1 - - 19,239 - 19,239 19,239 1 9,361 - 20,368 9,361 20,368 29,729 1 35,475 - 70,429 35,475 70,429 105,904 1 8,609 - 22,868 8,609 22,868 31,477 1 4,913 - 3,437 4,913 3,437 8,350 1 21,258 - 18,442 21,258 18,442 39,700 10 146,415 - 256,516 146,415 256,516 402,931 10 146,415 - 256,516 146,415 256,516 402,931 79 592,397 - 881,583 592,397 881,583 1,473,980 1,686 4,707,415 11,903,743 3,498,274 4,820,034 15,289,398 20,109,432 (2,748,835 )
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2012
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||
New Jersey/New York City | ||||||||||||||||||||||||||||||||||
Ports Jersey City Distribution Center | 1 | 17,672 | - | 1,176 | 17,672 | 1,176 | 18,848 | 2012 | ||||||||||||||||||||||||||
Secaucus Dist Ctr | 2 | 9,599 | - | 25,137 | 9,599 | 25,137 | 34,737 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
New Jersey/New York City | 3 | 27,271 | - | 26,313 | 27,271 | 26,313 | 53,585 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Phoenix, AZ | ||||||||||||||||||||||||||||||||||
Riverside Dist Ctr (PHX) | 1 | 2,251 | - | 7,479 | 2,251 | 7,479 | 9,730 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Phoenix, AZ | 1 | 2,251 | - | 7,479 | 2,251 | 7,479 | 9,730 | |||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||
Seattle, WA | ||||||||||||||||||||||||||||||||||
Fife Distribution Center | 1 | 2,803 | - | 2,744 | 2,803 | 2,744 | 5,547 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Seattle, WA | 1 | 2,803 | - | 2,744 | 2,803 | 2,744 | 5,547 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
South Florida | ||||||||||||||||||||||||||||||||||
Beacon Lakes | 1 | 3,288 | - | 9,318 | 3,288 | 9,318 | 12,606 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
South Florida | 1 | 3,288 | - | 9,318 | 3,288 | 9,318 | 12,606 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||
Redlands Distribution Center | 1 | 18,620 | - | 15,308 | 18,620 | 15,308 | 33,927 | 2012 | ||||||||||||||||||||||||||
Terra Francesco | 1 | 11,196 | - | 13,277 | 11,196 | 13,277 | 24,473 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Southern California | 2 | 29,816 | - | 28,585 | 29,816 | 28,585 | 58,400 | |||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||
Mexico: | ||||||||||||||||||||||||||||||||||
Los Altos Ind Park | 1 | 3,376 | - | 5,264 | 3,376 | 5,264 | 8,640 | 2012 | ||||||||||||||||||||||||||
Monterrey Airport | 1 | 3,563 | - | 3,384 | 3,563 | 3,384 | 6,947 | 2012 | ||||||||||||||||||||||||||
Toluca Distribution Center | 1 | 3,951 | - | 1,564 | 3,951 | 1,564 | 5,515 | 2012 | ||||||||||||||||||||||||||
Tres Rios | 2 | 14,140 | - | 8,418 | 14,140 | 8,418 | 22,558 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Mexico | 5 | 25,030 | - | 18,630 | 25,030 | 18,630 | 43,660 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Canada: | ||||||||||||||||||||||||||||||||||
Meadowvale Dist Ctr | 2 | 38,773 | - | 14,729 | 38,773 | 14,729 | 53,502 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Canada | 2 | 38,773 | - | 14,729 | 38,773 | 14,729 | 53,502 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Subtotal Americas Markets: | 25 | 163,581 | - | 182,602 | 163,581 | 182,602 | 346,183 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
European Markets: | ||||||||||||||||||||||||||||||||||
France | ||||||||||||||||||||||||||||||||||
Bonneuil Distribution Center | 1 | - | - | 13,711 | - | 13,711 | 13,711 | 2012 | ||||||||||||||||||||||||||
Evry Dist Ctr | 1 | - | - | 1,036 | - | 1,036 | 1,036 | 2012 | ||||||||||||||||||||||||||
Moissy Cramayel Distribution Center | 1 | 4,387 | - | 18,790 | 4,387 | 18,790 | 23,177 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
France | 3 | 4,387 | - | 33,537 | 4,387 | 33,537 | 37,924 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Poland | ||||||||||||||||||||||||||||||||||
Janki Distribution Center | 2 | 943 | - | 8,099 | 943 | 8,099 | 9,042 | 2012 | ||||||||||||||||||||||||||
Wroclaw V DC | 1 | 2,324 | - | 9 | 2,324 | 9 | 2,333 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Poland | 3 | 3,267 | - | 8,108 | 3,267 | 8,108 | 11,375 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Slovakia | ||||||||||||||||||||||||||||||||||
Bratislava Distribution Center | 1 | 2,622 | - | 10,435 | 2,622 | 10,435 | 13,057 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Slovakia | 1 | 2,622 | - | 10,435 | 2,622 | 10,435 | 13,057 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
United Kingdom | ||||||||||||||||||||||||||||||||||
Midpoint Park | 1 | 16,228 | - | 313 | 16,228 | 313 | 16,541 | 2012 | ||||||||||||||||||||||||||
North Kettering Bus Pk | 1 | 684 | - | 999 | 684 | 999 | 1,683 | 2012 | ||||||||||||||||||||||||||
Park Ryton Dist Ctr | 1 | 10,799 | - | 7,945 | 10,799 | 7,945 | 18,744 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
United Kingdom | 3 | 27,711 | - | 9,257 | 27,711 | 9,257 | 36,968 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Subtotal European Markets: | 10 | 37,987 | - | 61,337 | 37,987 | 61,337 | 99,324 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Asian Markets: | ||||||||||||||||||||||||||||||||||
China | ||||||||||||||||||||||||||||||||||
Jiaxing Distri Ctr | 3 | 3,020 | - | 2,353 | 3,020 | 2,353 | 5,373 | 2012 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
China | 3 | 3,020 | - | 2,353 | 3,020 | 2,353 | 5,373 | |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
Japan | ||||||||||||||||||||||||||||||||||
Amagasaki DC 2 (fund) | 1 | 29,549 | - | 5,021 | 29,549 | 5,021 | 34,570 | 2012 | ||||||||||||||||||||||||||
Kawanishi Distribution Center | 1 | 32,057 | - | 7,601 | 32,057 | 7,601 | 39,658 | 2012 | ||||||||||||||||||||||||||
Kitamoto Distribution Center | 1 | 24,297 | - | 659 | 24,297 | 659 | 24,956 | 2012 | ||||||||||||||||||||||||||
Kobe Distribution Center | 1 | 12,060 | - | 790 | 12,060 | 790 | 12,850 | 2012 |
PROLOGIS, INC. AND PROLOGIS, L.P.
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2012
(In thousands of U.S. dollars, as applicable)
No. of Bldgs. | Encum- brances | Initial Cost to Prologis | Costs Capitalized Subsequent To Acquisition | Gross Amounts At Which Carried as of December 31, 2012 | Accumulated Depreciation (c) | Date of Construction/ Acquisition | ||||||||||||||||||||||||||||||
Description | Land | Building & Improvements | Land | Building & Improvements | Total (a,b) | |||||||||||||||||||||||||||||||
Narashino IV Distribution Center | 1 | 37,718 | - | 47,100 | 37,718 | 47,100 | 84,818 | 2012 | ||||||||||||||||||||||||||||
Nishiyodogawa DC | 1 | - | - | 131,887 | - | 131,887 | 131,887 | 2012 | ||||||||||||||||||||||||||||
Zama Distribution Center | 1 | 60,478 | - | 111,547 | 60,478 | 111,547 | 172,024 | 2012 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Japan | 7 | 196,159 | - | 304,605 | 196,159 | 304,605 | 500,763 | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Subtotal Asian Markets: | 10 | 199,179 | - | 306,958 | 199,179 | 306,958 | 506,136 | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
Total Development Portfolio | 45 | 400,747 | - | 550,897 | 400,747 | 550,897 | 951,643 | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
GRAND TOTAL | 1,898 | 5,476,156 | 14,240,970 | 3,842,766 | 5,717,870 | 17,842,022 | 23,559,891 | (2,460,642) | ||||||||||||||||||||||||||||
|
|
|
|
Schedule III – Footnotes
(a) | Reconciliation of real estate assets per Schedule III to |
Total per Schedule III | $ | 23,559,891 | $ | 20,109,432 | ||||||||
Land | 1,794,364 | 1,577,786 | ||||||||||
Other real estate investments | 454,868 | 502,927 | ||||||||||
|
| |||||||||||
Total per consolidated balance sheet | $ | 25,809,123 | (f | ) | $ | 22,190,145 | (f) |
(b) | The aggregate cost for Federal tax purposes at December 31, |
(c) | Real estate assets (excluding land balances) are depreciated over their estimated useful lives. These useful lives are generally |
Reconciliation of accumulated depreciation per Schedule III to ourthe Consolidated Balance Sheets as ofat December 31, 20122014 (in thousands):
Total accumulated depreciation per Schedule III | $ | 2,460,642 | $ | 2,748,835 | ||||
Accumulated depreciation on other real estate investments | 20,018 | 41,946 | ||||||
|
| |||||||
Total per consolidated balance sheet | $ | 2,480,660 | $ | 2,790,781 |
(d) | Properties with an aggregate undepreciated cost of |
(e) | Assessment bonds of |
(f) | A summary of activity for our real estate assets and accumulated depreciation for the years ended December 31 (in thousands): |
2012 | 2011 | 2010 | 2014 | 2013 | 2012 | |||||||||||||||||||
Real estate assets: | ||||||||||||||||||||||||
Balance at beginning of year | $ | 22,413,079 | $ | 11,080,161 | $ | 12,010,668 | $ | 18,822,081 | $ | 23,559,891 | $ | 22,413,079 | ||||||||||||
Acquisitions of operating properties, transfers of development completions from CIP, improvements to operating properties and net effect of changes in foreign exchange rates and other | 2,881,005 | 12,150,482 | 631,860 | |||||||||||||||||||||
Acquisitions of operating properties, improvements to operating properties, development activity, transfers of land to CIP and net effect of changes in foreign exchange rates and other | 3,595,836 | 2,050,810 | 2,881,005 | |||||||||||||||||||||
Basis of operating properties disposed of | (1,630,764) | (906,602) | (1,410,511) | (2,713,300) | (6,857,994) | (1,630,764) | ||||||||||||||||||
Change in the development portfolio balance, including the acquisition of properties | 91,112 | 495,169 | 174,235 | 452,963 | 69,374 | 91,112 | ||||||||||||||||||
Impairment of real estate properties (1) | (194,541) | (21,237) | (400) | - | - | (194,541) | ||||||||||||||||||
Assets transferred to held-for-sale | - | (384,894) | (325,691) | (48,148) | - | - | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Balance at end of year | $ | 23,559,891 | $ | 22,413,079 | $ | 11,080,161 | $ | 20,109,432 | $ | 18,822,081 | $ | 23,559,891 | ||||||||||||
|
|
| ||||||||||||||||||||||
Accumulated Depreciation: | ||||||||||||||||||||||||
Balance at beginning of year | $ | 2,150,713 | $ | 1,589,251 | $ | 1,663,233 | $ | 2,540,267 | $ | 2,460,642 | $ | 2,150,713 | ||||||||||||
Depreciation expense | 665,239 | 574,524 | 298,164 | 490,298 | 505,691 | 665,239 | ||||||||||||||||||
Balances retired upon disposition of operating properties and net effect of changes in foreign exchange rates and other | (355,310) | (994) | (337,845) | (277,516) | (426,066) | (355,310) | ||||||||||||||||||
Assets transferred to held-for-sale | - | (12,068) | (34,301) | (4,214) | - | - | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Balance at end of year | $ | 2,460,642 | $ | 2,150,713 | $ | 1,589,251 | $ | 2,748,835 | $ | 2,540,267 | $ | 2,460,642 | ||||||||||||
|
(1) | The impairment charges we recognized in 2012 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PROLOGIS, INC. | ||
By: | /s/ | |
Hamid R. Moghadam | ||
Chief Executive Officer |
Date: February 27, 201325, 2015
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of Prologis, Inc., hereby severally constitute Hamid R. Moghadam, Thomas S. Olinger and Edward S. Nekritz, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, the Form 10-K filed herewith and any and all amendments to said Form 10-K, and generally to do all such things in our names and in our capacities as officers and directors to enable Prologis, Inc. to comply with the provisions of the Securities Exchange Act of 1934, and all requirements of the U.S. Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Form 10-K and any and all amendments thereto.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
/s/ HAMID R. MOGHADAM Hamid R. Moghadam | Chairman of the Board and | February | ||
/s/ THOMAS S. OLINGER Thomas S. Olinger | Chief Financial Officer | February | ||
/s/ LORI A. PALAZZOLO Lori A. Palazzolo | February | |||
/s/ GEORGE L. FOTIADES George L. Fotiades | Director | February | ||
/s/ CHRISTINE N. GARVEY Christine N. Garvey | Director | February | ||
/s/ LYDIA H. KENNARD Lydia H. Kennard | Director | February | ||
/s/ J. MICHAEL LOSH J. Michael Losh | Director | February | ||
/s/ IRVING F. LYONS III Irving F. Lyons III | Director | February | ||
/s/ DAVID P. O’CONNOR David P. O’Connor | Director | February 25, 2015 | ||
/s/ JEFFREY L. SKELTON Jeffrey L. Skelton | Director | February | ||
/s/ D. MICHAEL STEUERT D. Michael Steuert | Director | February | ||
/s/ CARL B. WEBB Carl B. Webb | Director | February | ||
/s/ WILLIAM D. ZOLLARS William D. Zollars | Director | February |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PROLOGIS, L.P. | ||
By: | Prologis, Inc., its general partner | |
By: | /s/ | |
Hamid R. Moghadam | ||
Chief Executive Officer |
Date: February 27, 201325, 2015
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of Prologis, L.P., hereby severally constitute Hamid R. Moghadam, Thomas S. Olinger and Edward S. Nekritz, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, the Form 10-K filed herewith and any and all amendments to said Form 10-K, and generally to do all such things in our names and in our capacities as officers and directors to enable Prologis, L.P. to comply with the provisions of the Securities Exchange Act of 1934, and all requirements of the U.S. Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Form 10-K and any and all amendments thereto.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
/s/ HAMID R. MOGHADAM Hamid R. Moghadam | Chairman of the Board and Chief Executive Officer | February | ||
/s/ THOMAS S. OLINGER Thomas S. Olinger | Chief Financial Officer | February | ||
/s/ LORI A. PALAZZOLO Lori A. Palazzolo | February | |||
/s/ GEORGE L. FOTIADES George L. Fotiades | Director | February | ||
/s/ CHRISTINE N. GARVEY Christine N. Garvey | Director | February | ||
/s/ LYDIA H. KENNARD Lydia H. Kennard | Director | February | ||
/s/ J. MICHAEL LOSH J. Michael Losh | Director | February | ||
/s/ IRVING F. LYONS III Irving F. Lyons III | Director | February | ||
/s/ DAVID P. O’CONNOR David P. O’Connor | Director | February 25, 2015 | ||
/s/ JEFFREY L. SKELTON Jeffrey L. Skelton | Director | February | ||
/s/ D. MICHAEL STEUERT D. Michael Steuert | Director | February | ||
/s/ CARL B. WEBB Carl B. Webb | Director | February | ||
/s/ WILLIAM D. ZOLLARS William D. Zollars | Director | February |
Certain of the following documents are filed herewith. Certain other of the following documents that have been previously filed with the Securities and Exchange Commission and, pursuant to Rule 12b-32, are incorporated herein by reference.
3.1 | Articles of Incorporation of Prologis (incorporated by reference to Exhibit 3.1 to Prologis’ Registration Statement onForm S-11 (No. 333-35915) filed September 18, 1997). | |
3.2 | Articles Supplementary establishing and fixing the rights and preferences of the 6 | |
3.3 | Articles Supplementary establishing and fixing the rights and preferences of the 6 | |
3.4 | Articles Supplementary establishing and fixing the rights and preferences of the 7.00% Series O Cumulative Redeemable Preferred Stock of Prologis (incorporated by reference to Exhibit 3.19 to Prologis’ Registration Statement on Form 8-A filed December 12, 2005). | |
3.5 | Articles Supplementary establishing and fixing the rights and preferences of the 6.85% Series P Cumulative Redeemable Preferred Stock of Prologis (incorporated by reference to Exhibit 3.18 to Prologis’ Registration Statement on Form 8-A filed August 24, 2006). | |
3.6 | Articles Supplementary establishing and fixing the rights and preferences of the Series Q Cumulative Redeemable Preferred Stock of Prologis (incorporated by reference to Exhibit 3.4 to Prologis’ Registration Statement on Form 8-A filed June 2, 2011). | |
3.7 | Articles Supplementary establishing and fixing the rights and preferences of the Series R Cumulative Redeemable Preferred Stock of Prologis (incorporated by reference to Exhibit 3.5 to Prologis’ Registration Statement on Form 8-A filed June 2, 2011). | |
3.8 | Articles Supplementary establishing and fixing the rights and preferences of the Series S Cumulative Redeemable Preferred Stock of Prologis (incorporated by reference to Exhibit 3.6 to Prologis’ Registration Statement on Form 8-A filed June 2, 2011). | |
3.9 | Articles of Merger of New Pumpkin Inc., a Maryland corporation, with and into Prologis, Inc., a Maryland corporation, changing the name of “AMB Property Corporation” to “Prologis, Inc.”, as filed with the Stated Department of Assessments and Taxation of Maryland on June 2, 2011, and effective June 3, 2011 (incorporated by reference to Exhibit 3.1 to Prologis’ Current Report on Form 8-K filed June 8, 2011). | |
3.10 | Articles of Amendment (incorporated by reference to Exhibit 3.1 to Prologis’ Current Report on Form 8-K filed May 8, 2012). | |
3.11 | Seventh Amended and Restated Bylaws of Prologis (incorporated by reference to Exhibit 3.2 to Prologis’ Current Report on Form 8-K filed June 8, 2011). | |
3.12 | Thirteenth Amended and Restated Agreement of Limited Partnership of the Operating Partnership (incorporated by reference to Exhibit 3.6 to Prologis’ Current Report on Form 8-K filed June 8, 2011). | |
3.13 | Amended and Restated Certificate of Limited Partnership of the Operating Partnership (incorporated by reference to Exhibit 3.7 to Prologis’ Current Report on Form 8-K filed June 8, 2011). | |
3.14 | First Amendment to Thirteenth Amended and Restated Agreement of Limited Partnership of Prologis, L.P., dated February 27, 2014, (incorporated by reference to Exhibit 3.1 to Prologis’ Current Report on Form 8-K filed on February 27, 2014). | |
3.15 | Articles Supplementary dated April 3, 2014, (incorporated by reference to Exhibit 3.1 to Prologis’ Current Report onForm 8-K filed on April 3, 2014). | |
3.16 | Articles Supplementary redesignating and reclassifying all 300,000 shares of 6.5% Series L Cumulative Redeemable Preferred Stock as Preferred Stock (incorporated by reference to Exhibit 3.1 to Prologis’ Current Report Form 8-K filed on May 5, 2014). | |
4.1 | Form of Certificate for Common Stock of Prologis (incorporated by reference to Exhibit 4.1 to Prologis’ Registration Statement on Form S-4/A (No. 333-172741) filed April 12, 2011). | |
4.2 | ||
Form of Certificate for the Series Q Cumulative Redeemable Preferred Stock of Prologis (incorporated by reference to Exhibit 4.2 to Prologis’ Registration Statement on Form S-4/A (No. 333-172741) filed April 28, 2011). | ||
Indenture, dated as of June 8, 2011, by and among the Operating Partnership, as issuer, Prologis, as guarantor, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to Prologis’ Registration Statement on Form S-3 (No. 333-177112) filed September 30, 2011). | ||
Fourth Supplemental Indenture, dated as of June 8, 2011, in respect of the Operating Partnership’s 3.25% Exchangeable Senior Notes due 2015, by and among the Operating Partnership, as issuer, Prologis, as guarantor, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.6 to Prologis’ Registration Statement on Form S-3 | ||
Fifth Supplemental Indenture, dated as of August 15, 2013, among Prologis, Inc., Prologis, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed August 15, 2013). | ||
4.6 | Form of Sixth Supplemental Indenture among Prologis, Inc., Prologis, L.P., Elavon Financial Services Limited, UK Branch, Elavon Financial Services Limited and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed December 2, 2013). |
4.7 | Form of Seventh Supplemental Indenture among Prologis, Inc., Prologis, L.P., Elavon Financial Services Limited, UK Branch, Elavon Financial Services Limited and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed February 18, 2014). | |
4.8 | Indenture, dated as of June 30, 1998, by and among the Operating Partnership, Prologis and State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed August 10, 2006 and also incorporated by reference to Exhibit 4.1 to the Operating Partnership’s Current Report on Form 8-K filed August 10, 2006). | |
First Supplemental Indenture, dated as of June 30, 1998, by and among the Operating Partnership, Prologis and State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.2 to Prologis’ Registration Statement on Form S-11 (No. 333-49163) filed April 2, 1998). | ||
Second Supplemental Indenture, dated as of June 30, 1998, by and among the Operating Partnership, Prologis and State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.3 to Prologis’ Registration Statement on Form S-11 (No. 333-49163) filed April 2, 1998). | ||
Third Supplemental Indenture, dated as of June 30, 1998, by and among the Operating Partnership, Prologis and State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.4 to Prologis’ Registration Statement on Form S-11 (No. 333-49163) filed April 2, 1998). | ||
Seventh Supplemental Indenture, dated as of August 10, 2006, by and among the Operating Partnership, Prologis and U.S. Bank National Association, as successor-in-interest to State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed August 10, 2006 and also incorporated by reference to Exhibit 4.2 to the Operating Partnership’s Current Report on Form 8-K filed August 10, 2006). | ||
Eighth Supplemental Indenture, dated as of November 20, 2009, by and among the Operating Partnership, Prologis and U.S. Bank National Association, as successor-in-interest to State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed November 20, 2009). | ||
Ninth Supplemental Indenture, dated as of November 20, 2009, by and among the Operating Partnership, Prologis and U.S. Bank National Association, as successor-in-interest to State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed November 20, 2009). | ||
Tenth Supplemental Indenture, dated as of August 9, 2010, by and among the Operating Partnership, Prologis and U.S. Bank National Association, as successor-in-interest to State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed August 9, 2010). | ||
Eleventh Supplemental Indenture, dated as of November 12, 2010, by and among the Operating Partnership, Prologis and U.S. Bank National Association, as successor-in-interest to State Street Bank and Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed November 10, 2010). | ||
Specimen of 7.50% Notes due 2018 (incorporated by reference to and included in Exhibit 4.3 to Prologis’ Registration Statement on Form S-11 (No. 333-49163) filed April 2, 1998). | ||
6.625% Notes due 2019 and Related Guarantee (incorporated by reference to Exhibit 4.4 to Prologis’ Current Report on Form 8-K filed November 20, 2009). | ||
4.500% Notes due 2017 and Related Guarantee (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed August 9, 2010). | ||
4.00% Notes due 2018 and Related Guarantee (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed November 10, 2010). | ||
Form of Global Note Representing the Operating Partnership’s 7.625% Notes due July 1, 2017 and Related Guarantee (incorporated by reference to Exhibit 4.51 to Prologis’ Registration Statement on Form S-4 (No. 333-173891) filed May 3, 2011). | ||
Form of Global Note Representing the Operating Partnership’s 7.375% Notes due October 30, 2019 and Related Guarantee (incorporated by reference to Exhibit 4.53 to Prologis’ Registration Statement on Form S-4 (No. 333-173891) filed May 3, 2011). | ||
Form of Global Note Representing the Operating Partnership’s 6.875% Notes due March 15, 2020 and Related Guarantee (incorporated by reference to Exhibit 4.54 to Prologis’ Current Report on Form 8-K filed May 3, 2011). | ||
Form of Global Note Representing the Operating Partnership’s 3.250% Exchangeable Senior Notes due 2015 and Related Guarantee (incorporated by reference to and included in Exhibit 4.6 to Prologis’ Registration Statement on Form S-3 | ||
Form of | ||
4.26 | Form of 4.250% Notes due 2023 (incorporated by reference to Exhibit 4.5 to Prologis’ Current Report on Form 8-K filed August 15, 2013). | |
4.27 | 3.350% Notes due 2021 (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed November 1, 2013). | |
4.28 | Form of 3.000% Notes due 2022 (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed December 2, 2013). |
Form of | ||
Form of | ||
Form of | ||
Form of Officer’s Certificate related to the Operating Partnership’s 7.625% Notes due July 1, 2017 (incorporated by reference to Exhibit 4.69 to Prologis’ Registration Statement on Form S-4 (No. 333-173891) filed May 3, 2011). | ||
Form of Officer’s Certificate related to the Operating Partnership’s 7.375% Notes due October 30, 2019 (incorporated by reference to Exhibit 4.71 to Prologis’ Registration Statement on Form S-4 (No. 333-173891) filed May 3, 2011). | ||
Form of Officer’s Certificate related to the Operating Partnership’s 6.875% Notes due March 15, 2020 (incorporated by reference to Exhibit 4.72 to Prologis’ Registration Statement on Form S-4 (No. 333-173891) filed May 3, 2011). | ||
4.36 | Officers’ Certificate related to the 4.250% Notes due 2023 (incorporated by reference to Exhibit 4.3 to Prologis’ Current Report on Form 8-K filed August 15, 2013). | |
4.37 | Officers’ Certificate related to the 3.350% Notes due 2021 (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed | |
4.38 | Form of Officers’ Certificate related to the 3.375% Notes due 2024 (incorporated by reference to Exhibit 4.2 to Prologis’ Current Report on Form 8-K filed February 18, 2014). | |
4.39 | Form of Officer’s Certificate related to the 3.00% Notes due 2026 (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed on May 28, 2014). | |
4.40 | Form of Officer’s Certificate related to 1.375% Notes due 2020 (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-k filed on October 6, 2014). |
Other debt instruments are omitted in accordance with Item 601(b)(4)(iii)(A) of Registration S-K. Copies of such instruments will be furnished to the Securities and Exchange Commission upon request.
10.1 | Agreement of Limited Partnership of ProLogis Limited Partnership-I, dated as of December 22, 1993 (incorporated by reference to Exhibit 10.4 to the Trust’s Registration Statement (No. 33-73382)) . | |
10.2 | Amended and Restated Agreement of Limited Partnership of ProLogis Fraser, L.P., dated as of August 4, 2004 (incorporated by reference to Exhibit 10.1 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004). | |
10.3 | Fifteenth Amended and Restated Agreement of Limited Partnership of Prologis 2, L.P., (f/k/a AMB Property II, L.P.) dated February 19, 2010 (incorporated by reference to Exhibit 10.6 to Prologis’ Annual Report on Form 10-K for the year ended December 31, 2009). | |
10.4 | Exchange Agreement, dated as of July 8, 2005, by and between the Operating Partnership and Teachers Insurance and Annuity Association of America (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed July 13, 2005 and also incorporated by reference to Exhibit 10.1 to the Operating Partnership’s Current Report on Form 8-K filed July 13, 2005). | |
10.5 | Transfer and Registration Rights Agreement, dated as of December 22, 1993, by and among the Trust and the persons set forth therein (incorporated by reference to Exhibit 10.10 to the Trust’s Registration Statement (No. 33-73382)). | |
10.6 | Registration Rights Agreement dated February 9, 2007, between the Trust and each of the parties identified therein (incorporated by reference to Exhibit 99.10 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2006). | |
10.7 | Form of Registration Rights Agreement, by and among Prologis and the persons named therein (incorporated by reference to Exhibit 10.2 to Prologis’ Registration Statement on Form S-11 (No. 333-35915) filed September 18, 1997). | |
10.8 | Registration Rights Agreement, dated as of November 10, 2009, by and between Prologis and J.P. Morgan Securities Inc. (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed November 10, 2009). | |
10.9 | Registration Rights Agreement, dated November 26, 1997, by and among Prologis and the persons named therein (incorporated by reference to Exhibit 4.1 to Prologis’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2010). | |
10.10 | Registration Rights Agreement, dated as of July 8, 2005, by and between the Operating Partnership and Teachers Insurance and Annuity Association of America (incorporated by reference to Exhibit 4.3 to the Operating Partnership’s Current Report on Form 8-K filed July 13, 2005). | |
10.11 | Registration Rights Agreement, dated November 14, 2003, by and among Prologis 2, L.P.(formerly known as AMB Property II, L.P.) and the unitholders whose names are set forth on the signature pages thereto (incorporated by reference to Exhibit 4.1 to Prologis’ Current Report on Form 8-K filed November 17, 2003). | |
10.12 | Registration Rights Agreement, dated as of May 5, 1999, by and among Prologis, Prologis 2, L.P. and the unitholders whose names are set forth on the signature pages thereto (incorporated by reference to Exhibit 4.33 to Prologis’ Annual Report on Form 10-K for the year ended December 31, 2006). |
10.13 | Registration Rights Agreement, dated as of November 1, 2006, by and among Prologis, Prologis 2, L.P., J.A. Green Development Corp. and JAGI, Inc (incorporated by reference to Exhibit 4.34 to Prologis’ Annual Report on Form 10-K for the year ended December 31, 2006). | |
Registration Rights Agreement, dated as of June 30, 2013, by and among Prologis, Inc., Prologis 2, L.P. and Bakar AMB Limited Partnership (incorporated by reference to Exhibit 10.14 to Prologis’ Annual Report on Form 10-K for the year ended December 31, 2013). | ||
10.15 | Equity Distribution Agreement, dated as of February 5, 2015, among Prologis, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Goldman, Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC. (incorporated by reference to Exhibit 1.1 to Prologis’ Current Report on Form 8-K filed February 5, 2015). | |
10.16* | The Third Amended and Restated 1997 Stock Option and Incentive Plan of AMB Property Corporation and AMB Property, L.P. (incorporated by reference to Exhibit 10.22 to Prologis’ Annual Report on Form 10-K for the year ended December 31, 2001 and also incorporated by reference to Exhibit 10.19 to the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2001). | |
Amendment No. 1 to the Third Amended and Restated 1997 Stock Option and Incentive Plan of AMB Property Corporation and AMB Property, L.P. (incorporated by reference to Exhibit 10.23 to Prologis’ Annual Report on Form 10-K for the year ended December 31, 2001 and also incorporated by reference to Exhibit 10.20 to the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2001). | ||
Amendment No. 2 to the Third Amended and Restated 1997 Stock Option and Incentive Plan of AMB Property Corporation and AMB Property, L.P. (incorporated by reference to Exhibit 10.5 to Prologis’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 and also incorporated by reference to Exhibit 10.4 to the Operating Partnership’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004). | ||
Amended and Restated 2002 Nonqualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.2 to Prologis’ Current Report on Form 8-K filed October 4, 2006 and also incorporated by reference to Exhibit 10.2 to the Operating Partnership’s Current Report on Form 8-K filed October 4, 2006). | ||
The Amended and Restated 2002 Stock Option and Incentive Plan of AMB Property Corporation and AMB Property, L.P. (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed May 15, 2007 and also incorporated by reference to Exhibit 10.1 to the Operating Partnership’s Current Report on Form 8-K filed May 15, 2007). | ||
10.21* | ||
Prologis Outperformance Plan (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed December 22, 2011). | ||
10.23* | Second Amended and Restated Prologis Promote Plan (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed on August 1, 2014). | |
10.24* | Form of Prologis, Inc. Second Amended and Restated Prologis Promote Plan LTIP Unit Award Agreement (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed on August 18, 2014). | |
10.25* | Form of Prologis, Inc. Long-term Incentive Plan LTIP Unit Award Agreement (General) (incorporated by reference to Exhibit 10.3 to Prologis’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2014). | |
10.26* | Form of Prologis, Inc. 2012 Long-term Incentive Plan Restricted Stock Unit Agreement (LTIP Unit election) (incorporated by reference to Exhibit 10.4 to Prologis’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2014). | |
10.27* | Form of Prologis, Inc. 2012 Long-term Incentive Plan Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.5 to Prologis’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2014) . | |
10.28* | Form of Prologis, Inc. 2012 Long-term Incentive Plan Restricted Stock Unit Agreement (Bonus exchange) (incorporated by reference to Exhibit 10.6 to Prologis’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2014). | |
10.29* | ProLogis 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Trust’s Current Report onForm 8-K filed June 2, 2006). | |
First Amendment of the ProLogis 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010). | ||
Second Amendment of the ProLogis 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed May 19, 2010). | ||
Third Amendment of the ProLogis 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010). | ||
Form of Non Qualified Share Option Award Terms; The Trust 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.25 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2009). | ||
Form of Restricted Share Award Terms; ProLogis 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.26 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2009). | ||
Form of Performance Share Award Terms; ProLogis 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.27 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2009). |
10.36* | ProLogis 2000 Share Option Plan for Outside Trustees (as Amended and Restated Effective as of December 31, 2009) (incorporated by reference to exhibit 10.13 to ProLogis’ Form 10-K for the year ended December 31, 2008). | |
ProLogis Trust 1997 Long-Term Incentive Plan (as Amended and Restated Effective as of September 26, 2002) (incorporated by reference to exhibit 10.1 to ProLogis’ Form 8-K dated February 19, 2003). | ||
First Amendment of ProLogis 1997 Long-Term Incentive Plan (incorporated by reference to exhibit 10.2 to ProLogis’ Form8-K filed on May 19, 2010). | ||
ProLogis Deferred Fee Plan for Trustees (As Amended and Restated Effective as of May 14, 2010) (incorporated by reference to exhibit 10.3 to ProLogis’ Form 8-K filed on May 19, 2010). | ||
Form of Indemnification Agreement between ProLogis and certain directors and executive officers (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed June 8, | ||
10.41* | Form of Restricted Stock Unit Agreement; Prologis, Inc. 2012 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to Prologis’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2012). | |
10.42* | Employment Agreement made and entered into on January 30, 2011 and effective | |
10.43* | ||
10.44* | Form of Director Deferred Stock Unit Award terms (incorporated by reference to Exhibit 10.2 to Prologis’ Current Report on Form 8-K filed May 8, 2012). | |
10.45* | First Amendment to Employment Agreement effective as of December 6, 2012, by and between Walter C. Rakowich and Prologis (incorporated by reference to Exhibit 10.55 to Prologis’ Annual Report on Form 10-K for the year ended December 31, | |
Form of | ||
10.47* | Consulting Agreement, dated January 22, 2014, by and between Guy Jaquier and Prologis, L.P. (incorporated by reference to Exhibit 10.1 to Prologis’ Quarterly Report on Form 10-Q for the | |
Credit Agreement, dated as of November 29, 2010, by and among the Operating Partnership, as borrower, the banks listed on the signature pages thereof, HSBC Bank USA, National Association, as administrative agent, Credit Agricole Corporate and Investment Bank, as syndication agent, and HSBC Securities, Inc. and Credit Agricole Corporate and Investment Bank, as joint lead arrangers and joint bookrunners, and Morgan Stanley Senior Funding, Inc. as documentation agent (incorporated by reference to Exhibit 10.1 to Prologis’ Current Report on Form 8-K filed December 1, 2010). | ||
Guaranty of Payment, dated as of November 29, 2010, by Prologis for the benefit of HSBC Bank USA, National Association, as administrative agent for the banks that are from time to time parties to the Credit Agreement, dated as of November 29, 2010 (incorporated by reference to Exhibit 10.2 to Prologis’ Current Report on Form 8-K filed December 1, 2010). | ||
Qualified Borrower Guaranty, dated as of November 29, 2010, by the Operating Partnership for the benefit of HSBC Bank USA, National Association, as administrative agent for the banks that are from time to time parties to the Credit Agreement, dated as of November 29, 2010 (incorporated by reference to Exhibit 10.3 to Prologis’ Current Report on Form 8-K filed December 1, 2010). | ||
First Amendment and Waiver, dated as of June 3, 2011, by and among Operating Partnership, as borrower, Prologis, as guarantor, various banks and HSBC Bank USA, National Association, as administrative agent, to the Credit Agreement, dated as of November 29, 2010, (incorporated by reference to Exhibit 10.4 to Prologis’ Current Report on Form 8-K filed June 9, 2011). | ||
Global Senior Credit Agreement dated as of | ||
10.54 | Guaranty of Payment, dated as of August 14, 2013, among Prologis, Inc. and Prologis, L.P., as guarantors, Sumitomo Mitsui Banking Corporation, as Administrative Agent, for the banks that are from time to time parties to the Fourth Amended and Restated Revolving Credit Agreement, dated as of August 14, 2013 (incorporated by reference to Exhibit 10.2 to Prologis’ Current Report on Form 8-K filed | |
Senior Term Loan Agreement dated as of | ||
First Amendment to the Global Senior Credit Agreement dated as of June 26, 2014 among Prologis, Inc. |
Form of | ||
10.59†* | Form of Prologis, Inc. Long-term Incentive Plan Equity Exchange Offer LTIP Unit Award Agreement. | |
10.60†* | Amended and Restated Prologis, Inc. 2011 Notional Account Deferred Compensation Plan. | |
10.61†* | Amended and Restated Prologis, Inc. Nonqualified Deferred Compensation Plan. | |
10.62†* | Second Amended and Restated Prologis 2005 Nonqualified Deferred Compensation Plan. | |
10.63†* | Time-Sharing Agreement, | |
12.1† | Computation of Ratio of Earnings to Fixed Charges of Prologis, Inc. and Prologis, L.P. | |
12.2† | Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock/Unit Dividends of Prologis, Inc. and Prologis, L.P. |
21.1† | Subsidiaries of Prologis, Inc. and Prologis, L.P. | |
23.1† | Consent of KPMG LLP with respect to Prologis, Inc. | |
23.2† | Consent of KPMG LLP with respect to Prologis, L.P. | |
24.1† | ||
24.2† | Power of Attorney for Prologis, L.P. (included in signature page of this annual report). | |
31.1† | Certification of Chief Executive Officer of Prologis, Inc. | |
31.2† | Certification of Chief Financial Officer of Prologis, Inc. | |
31.3† | Certification of Chief Executive Officer for Prologis, L.P. | |
31.4† | Certification of Chief Financial Officer for Prologis, L.P. | |
32.1† | Certification of Chief Executive Officer and Chief Financial Officer of Prologis, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2† | Certification of Chief Executive Officer and Chief Financial Officer for Prologis, L.P., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101. INS† | XBRL Instance Document | |
101. SCH† | XBRL Taxonomy Extension Schema | |
101. CAL† | XBRL Taxonomy Extension Calculation Linkbase | |
101. DEF† | XBRL Taxonomy Extension Definition Linkbase | |
101. LAB† | XBRL Taxonomy Extension Label Linkbase | |
101. PRE† | XBRL Taxonomy Extension Presentation Linkbase |
* | Management Contract or Compensatory Plan or Arrangement |
† | Filed herewith |
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