Unconsolidated Entities (Tables)

12 Months Ended

Dec. 31, 2012

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

Totals	$	2,195,782	$	2,857,755

Earnings on Investment in Co-Investment Ventures

Summarized information regarding our investments in the unconsolidated co-investment ventures for the years ended December 31 was as follows (in thousands):


	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	)

Total earnings (loss) from unconsolidated co-investment ventures, net	$	25,703		$	49,326	$	10,548

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
Total private capital revenue		125,185			127,200		116,751
Development management and other income		535			5,943		7,413

Total private capital revenue and other income	$	125,720		$	133,143	$	124,164

Information About Investments in Property Funds

Information about our investments in the co-investment ventures as of 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”) (Prologis North American Properties Fund I LLC) (1)		-		-		-		41.3 %		-		33,194
Prologis North American Properties Fund XI (KPJV, LLP) (2)		-		-		-		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”) (Prologis NA2 LP) (1)		-		-		-		37.0 %		-		335,397
Prologis North American Industrial Fund III (“Prologis NAIII”), (Prologis NA3 LP) (4)		91		17.7		20.0 %		20.0 %		20,860		26,066
Prologis Targeted U.S. Logistics Fund (“USLF”) (Prologis U.S. Logistics Fund, LP) (5)		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”) (Prologis Europe Logistics Fund, FCP-FIS) (9)		74		11.9		32.4 %		31.5 %		280,430		245,859
Europe Logistics Venture 1 (Europe Logistics JV, FCP-FIS) (4)(10)		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 Logistics Venture I, LP) (4)		18		3.8		15.0 %		15.0 %		34,149		31,875

Totals		1,163		208.8					$	2,013,080	$	2,471,179

(1)	In 2012, we concluded this co-investment venture. For additional information on this transaction see Note 3.

(2)	We concluded this co-investment venture by disposing of the remaining asset in this venture during 2012.

(3)

We refer to the combined entities in which we have an ownership interest with nine institutional investors as one unconsolidated co-investment venture named Prologis North American Industrial Fund. Our ownership percentage is based on our levels of ownership interest in these different entities. During 2012, the venture disposed of 12 properties for a loss of $13.5 million.

(4)	We have one partner in each of these co-investment ventures.

(5)

We have an ownership interest in this co-investment venture along with numerous third party investors. During 2012, this venture disposed of nine properties for a gain of $2.1 million. In addition, this venture acquired 26 properties aggregating 3.1 million square feet with capital of $201.6 million called from third party investors, which reduced our ownership in this venture.

(6)	We refer to the combined entities in which we have ownership interests as one co-investment venture named Prologis Mexico Industrial Fund, which was formed with several institutional investors.

(7)

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 method (the “Brazil Fund”). Also, we have additional investments in other unconsolidated entities in Brazil that we account for on the equity method with various ownership interests ranging from 5-50%. We refer to the Brazil Fund and the other unconsolidated entities collectively as the “Brazil Ventures.” The Brazil Ventures develop and operate industrial properties in Brazil.

(8)

We have an ownership interest in this co-investment venture along with numerous third party investors. During 2012, we contributed 13 properties aggregating 2.2 million square feet for total proceeds of $185.9 million. Additionally, this venture acquired four properties from third parties in 2012 for $36.3 million aggregating 0.7 million square feet and disposed of 11 properties for a gain of $3.7 million.

(9)

We have an ownership interest in this co-investment venture along with 20 third party investors. During 2012, we contributed three properties aggregating 0.6 million square feet in exchange for $47.4 million in proceeds raised from third parties and additional ownership interests in the venture. As a result, our ownership percentage in this venture increased in 2012. Also during 2012, the venture disposed of three properties for a loss of $1.7 million.

(10)

During 2012, this co-investment venture acquired two properties aggregating 0.4 million square feet for $24.0 million from a third party with proceeds from commitments previously called in 2011. Also during 2012, the venture called capital of $178.6 million, of which $26.8 million was our share, in order to acquire nine properties from us aggregating 1.9 million square feet for proceeds of $148.5 million and one property from a third party aggregating 0.4 million square feet for $25.8 million.

(11)	We have an ownership interest in this co-investment venture along with various third party investors.

Summarized Financial Information of Co-Investment Ventures

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

(1)

During 2012, we concluded three of our co-investment ventures in the Americas whose results are included in both periods through the transaction date (see Note 3 for further details). Amounts presented for 2011 reflect the acquisition of seven ventures in the Merger, offset by PEPR, which is now consolidated. Amounts include approximately seven months of activity in 2011 from the investments acquired through the Merger and five months of activity for PEPR.

(2)

In 2012, five ventures in the Americas recorded net gains of $9.4 million from the disposition of 38 properties. During 2012, Prologis NAIII wrote off accumulated other comprehensive loss due to the settlement of debt before maturity by transferring the secured properties to the lender in lieu of payment for $25.1 million (Prologis share was $5.0 million) and the settlement of interest rate swap agreements in which the related debt is no longer expected to reach maturity for $21.5 million (Prologis share was $4.3 million).

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.

(3)

As of December 31, 2012, we had one note receivable from Prologis SGP Mexico of $19.7 million. As of December 31, 2011, we had notes receivable aggregating $41.2 million from Prologis NAIII ($21.4 million) and Prologis SGP Mexico ($19.8 million). In February 2012, the note receivable to us and loan from Prologis North American Industrial Fund III payable to our partner were restructured into equity according to our ownership percentages. The remaining amounts represent current balances from services provided by us to the venture.

(4)

As discussed in Note 3, debt was reduced by $1.4 billion related to the conclusion of three unconsolidated co-investment ventures during 2012. As of December 31, 2012 and 2011, we guaranteed $30.4 million and $28.0 million, respectively, of the third party debt of certain unconsolidated ventures. As of December 31, 2011, we had pledged properties included in our Real Estate Operations segment with an undepreciated cost of approximately $277.0 million, to serve as additional collateral for the secured mortgage loan of NAIF II payable to an affiliate of our venture partner. In connection with the acquisition of our partner’s interest in February 2012, we repaid this loan, and these assets are no longer pledged.

(5)	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.

(6)

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 one of our properties to the venture (see next sub-footnote); (ii) recording additional costs associated with our investment in the venture; and (iii) advances to the venture.

(7)	This amount is recorded as a reduction to our investment and represents the gains that were deferred when we contributed a property to a venture due to our continuing ownership in the property.

Summary of Remaining Equity Commitments

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

Prologis SGP Mexico (2)
Prologis	$	24.6	(2)
Venture Partner	$	98.1

Europe Logistics Venture 1 (3)
Prologis	$	54.5	February 2014
Venture Partner	$	309.0

Prologis China Logistics Venture 1
Prologis	$	68.6	March 2015
Venture Partner	$	388.7

Total
Prologis	$	147.7
Venture Partners	$	825.8

(1)

We secured $295.5 million in commitments from third parties in 2012 in order to fund future acquisitions from us and third parties that meet the venture’s investment strategy, or to pay down existing debt. During 2012, the venture called capital of $265.5 million from these investors primarily to fund third party acquisitions.

(2)	These equity commitments will be called only if needed to pay outstanding debt of the venture. The relevant debt was due in 2012, which was automatically extended until the third quarter of 2013. There is also an option to extend until the third quarter of 2014.

(3)

Equity commitments are denominated in euro and reported above in U.S. dollar. During 2012, this venture acquired two buildings from third parties with capital previously called. Also during 2012, this venture called capital of €136.0 million ($178.6 million) of which €20.4 million ($26.8 million) represented our share to fund the contribution of nine buildings from us and the acquisition of one building from a third party.

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.

Other Unconsolidated Investees, Investment in and Advances to Entities

We recognized our proportionate share of the earnings from our investments in these entities and have summarized this information 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

Total earnings from other joint ventures	$	5,973	$	10,609	$	13,130

Our investments in and advances to these entities as of December 31 was as follows (in thousands):


	2012		2011
Americas (1)	$	106,655	$	305,352
Europe		48,503		50,474
Asia		27,544		30,750

Total	$	182,702	$	386,576

(1)

During the second quarter of 2012, we received $95.0 million, which represented a return of capital from one of our joint ventures that held a note receivable that was repaid in full during the quarter. During the fourth quarter of 2012, we dissolved one joint venture and divided the portfolio according to the ownership of the partners. The investment in this entity prior to dissolution was $80.8 million. See Note 5 for more detail.