Unconsolidated Entities (Tables)

6 Months Ended

Jun. 30, 2013

Our investments in and advances to our unconsolidated entities are summarized below (in thousands):


	June 30,		December 31,
	2013		2012
Unconsolidated co-investment ventures	$	3,708,196	$	2,013,080
Other joint ventures		176,570		182,702

Totals	$	3,884,766	$	2,195,782

Earnings on Investment in Co-Investment Ventures

Summarized information regarding our investments in the co-investment ventures is as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013		2012
Earnings from unconsolidated co-investment ventures:
Americas (1)	$	(874	)	$	(6,749	)	$	13,394	$	(4,466	)
Europe (2)		8,761			7,172			16,303		15,169
Asia (3)		(16	)		730			2,469		2,208

Total earnings from unconsolidated co-investment ventures, net	$	7,871		$	1,153		$	32,166	$	12,911

Investment management and other income:
Americas	$	14,818		$	16,081		$	30,895	$	33,604
Europe (2)		13,854			9,325			24,467		18,462
Asia (3)		14,239			5,088			20,981		9,842

Total investment management income		42,911			30,494			76,343		61,908
Development management and other income		333			2			1,380		78

Total	$	43,244		$	30,496		$	77,723	$	61,986

1)	During the first quarter of 2013, we recognized a gain of $8.7 million representing our share of the gain from the sale of two properties in February 2013 in the Prologis Brazil Logistics Partners Fund (“Brazil Fund”).

2)	In the first quarter of 2013, we launched PELP, which we started accounting for under the equity method. Our proportionate share of its net earnings is included in 2013 from the date it commenced operations (see above for additional information).

In the first quarter of 2013, we launched NPR, which we started accounting for under the equity method. Our proportionate share of its net earnings is included in 2013 from the date it commenced operations. In addition, in connection with the wind down of Prologis Japan Fund I in June 2013, the venture sold eight properties to NPR and we acquired the remaining 14 properties (see above for additional information).

Investments in Co-Investment Ventures by Region

Information about our investments in the co-investment ventures is as follows (dollars in thousands):


	Weighted Average Ownership Percentage						Investment in and Advances to
	June 30,			December 31,			June 30,		December 31,
Unconsolidated co-investment ventures by region	2013			2012			2013		2012
Americas		21.6	%		23.2	%	$	1,106,713	$	1,111,831
Europe (1)		39.6	%		29.7	%		2,173,996		722,748
Asia (1)(2)		17.2	%		19.2	%		427,487		178,501

Totals		28.4	%		25.1	%	$	3,708,196	$	2,013,080

(1)	As discussed above, the primary reason for the increase in our investments in and advances to our unconsolidated entities in Europe and Asia is due to PELP and NPR.

(2)	As discussed above, we substantially completed the wind down of Prologis Japan Fund I in June 2013. The investments in and advances to amount for Asia, as of June 30, 2013, includes a receivable from Prologis Japan Fund I of $93.1 million for the estimated remaining net proceeds.

Summarized Financial Information of Co-Investment Ventures

Summarized financial information of the co-investment ventures (for the entire entity, not our proportionate share) and our investment in such ventures is presented below (dollars in millions):


2013	Americas			Europe			Asia			Total
For the three months ended June 30, 2013 (1):
Revenues	$	183.1		$	206.9		$	53.8		$	443.8
Net earnings	$	3.5		$	14.2		$	8.2		$	25.9
For the six months ended June 30, 2013 (1):
Revenues	$	365.2		$	355.3		$	99.1		$	819.6
Net earnings (2)	$	33.8		$	44.8		$	12.4		$	91.0
As of June 30, 2013(1):
Total assets	$	9,074.3		$	9,937.4		$	4,122.0		$	23,133.7
Amounts due to us (3)	$	26.9		$	79.2		$	153.8		$	259.9
Third party debt (4)	$	3,950.2		$	2,639.5		$	1,404.5		$	7,994.2
Total liabilities	$	4,160.2		$	3,647.4		$	1,582.8		$	9,390.4
Noncontrolling interest	$	1.5		$	9.4		$	—		$	10.9
Venture partners’ equity	$	4,912.6		$	6,280.6		$	2,539.2		$	13,732.4
Our weighted average ownership (5)		21.6	%		39.6	%		17.2	%		28.4	%
Our investment balance (6)	$	1,106.7		$	2,174.0		$	427.5		$	3,708.2
Deferred gains, net of amortization (7)	$	145.3		$	181.6		$	69.8		$	396.7


2012	Americas			Europe			Asia			Total
For the three months ended June 30, 2012:
Revenues	$	185.8		$	120.9		$	35.0		$	341.7
Net earnings (loss)	$	(28.0	)	$	24.3		$	(0.9	)	$	(4.6	)
For the six months ended June 30, 2012 (1):
Revenues	$	396.2		$	245.9		$	69.8		$	711.9
Net earnings (loss)	$	(38.1	)	$	48.0		$	4.7		$	14.6
As of December 31, 2012:
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
Venture partners’ 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

(1)

As discussed in Note 2, in 2012, we concluded two of our co-investment ventures in the Americas whose results are not included in 2013 (NAIF II and Prologis California). First quarter of 2012 included activities for these ventures only through the transaction date. In addition, in the first quarter of 2013, we launched two new co-investment ventures, PELP and NPR, and the results of these ventures are included in the three and six months ended June 30, 2013. In June 2013, Prologis Japan Fund I substantially completed the wind down process. See above for more details on these transactions.

(2)	During the first quarter of 2013, the Brazil Fund sold two buildings for a net gain of $21.1 million.

(3)

As of June 30, 2013, we had one note receivable from Prologis SGP Mexico of $19.8 million; a receivable from PELP for the remaining sale proceeds of $67.7 million until final closing audits are completed; and a receivable from Prologis Japan Fund I for the estimated remaining net sale proceeds of $93.1 million that will be repaid by the end of the year. As of December 31, 2012, we had one note receivable from Prologis SGP Mexico of $19.7 million. The remaining amounts generally represent current balances from services provided by us to the co-investment ventures.

(4)	As of June 30, 2013, we did not guarantee any third party debt of our co-investment ventures. As of December 31, 2012, we guaranteed $30.4 million of the third party debt of certain co-investment ventures.

(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 subfootnote); (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 June 30, 2013 (in millions):


	Equity commitments		Expiration date for remaining commitments
Prologis Targeted U.S. Logistics Fund (1)
Prologis	$	100.0	Open-Ended
Venture Partners	$	31.5

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

Prologis European Properties Fund II (3) (4)
Prologis	$	111.2	March 2015
Venture Partner	$	27.5

Europe Logistics Venture 1 (3)
Prologis	$	53.7	February 2014
Venture Partner	$	304.3

Prologis European Logistics Partners (3) (5)
Prologis	$	277.5	January 2014
Venture Partner	$	277.5

Prologis Targeted Europe Logistics Fund (3) (6)
Prologis	$	143.9	(6)
Venture Partner	$	2.6

Prologis China Logistics Venture 1 (7)
Prologis	$	65.9	March 2015
Venture Partner	$	373.4

Total
Prologis	$	776.8
Venture Partners	$	1,114.9

(1)

During the six months ended June 30, 2013, equity commitments of $11.5 million were obtained from third party investors and $10.0 million of third party equity commitments were called. In June 2013, we committed to contribute an additional $100.0 million to the venture. In July 2013, additional equity commitments of $30.0 million were obtained from third party investors and the venture called all outstanding commitments from us and the third parties, which increased our ownership.

(2)	These equity commitments will be called only to pay outstanding debt of the venture. The relevant debt is due in the third quarter of 2013, with an option to extend until the third quarter of 2014.

(3)	Equity commitments are denominated in euro and reported above in U.S. dollar.

(4)

During the six months ended June 30, 2013, equity commitments of €30.0 million ($39.2 million) were obtained from a new third party investor and we committed to contribute €125.0 million ($163.5 million). To fund the extension of a building and to repay debt, this venture called capital of €49.0 million ($63.7 million) in April 2013. We contributed €40.0 million ($52.0 million), which included our share of the capital called, as well as an additional investment that increased our ownership interest in this venture, while the remaining €9.0 million ($11.8 million) was called from third parties. In July 2013, an additional €95.0 million ($124.3 million) of equity commitments were obtained from third party investors. Also in July, the venture called capital of €160.0 million ($209.3 million) to fund a contribution from us and increase net equity of which €92.3 million ($120.7 million) was from third parties and €67.7 million ($88.6 million) was our share thereby increasing our ownership.

(5)

This venture was formed in March 2013, with an equity commitment of €2.4 billion ($3.1 billion), which included €1.2 billion ($1.6 billion) commitment from both our partner and us. As discussed above, in March we contributed 195 properties to this venture using the majority of the equity commitments. In June 2013, the venture obtained additional equity commitments of €138 million ($180.5 million) of which €69.0 million ($90.3 million) was our share. These commitments were called in July 2013 to fund the acquisition of properties from a third party.

(6)

Equity commitments of €160.0 million ($209.5 million) and €2.0 million ($2.6 million) were obtained from us and a third party, respectively, during the second quarter of 2013. Subsequently, we contributed €50.0 million ($65.6 million) reducing our total equity commitment as of June 30, 2013. In July 2013, the venture called the remaining commitments from us and the third party to repay debt, which increased our ownership.

(7)	Equity commitments of $10.0 million of which $1.5 million was our share were called during the second quarter of 2013 to fund development.

Other Joint Ventures, Investment in and Advances to by Region

Our investments in and advances to these entities are as follows (in thousands):


	June 30,		December 31,
	2013		2012
Americas	$	102,142	$	106,655
Europe		47,303		48,503
Asia		27,125		27,544

Total investments in and advances to other joint ventures	$	176,570	$	182,702