Unconsolidated Entities (Tables)

12 Months Ended

Dec. 31, 2013

Equity Method Investments And Joint Ventures [Abstract]

Our investments in and advances to our unconsolidated entities as of December 31, are summarized below (in thousands):


	2013		2012
Unconsolidated co-investment ventures	$	4,250,015	$	2,013,080
Other ventures		180,224		182,702

Totals	$	4,430,239	$	2,195,782

Earnings on Investment in Co-Investment Ventures

Summarized information regarding the amounts we recognize in the Consolidated Statements of Operations from our investments in the unconsolidated co-investment ventures for the years ended December 31 was as follows (in thousands):


	2013		2012		2011
Earnings (loss) from unconsolidated co-investment ventures:
Americas	$	21,724	$	(7,843)	$	22,709
Europe		63,839		31,174		25,709
Asia		9,091		2,372		908

Total earnings (loss) from unconsolidated co-investment ventures, net	$	94,654	$	25,703	$	49,326


Investment management and other income:
Americas (1)	$	70,642	$	68,142	$	67,293
Europe		63,794		37,173		45,758
Asia		42,749		19,870		14,149

Total investment management income		177,185		125,185		127,200
Development management and other income		4,007		535		5,943

Total investment management and other income	$	181,192	$	125,720	$	133,143

In connection with the conclusion of SGP Mexico in October 2013, we earned a promote fee from the venture of $7.9 million, which was based on the venture’s cumulative returns to the investors over the life of the venture. Of that amount, $6.4 million represented the third party investors’ portion and is reflected in Investment Management Income in the Consolidated Statements of Operation. We also recognized approximately $1.3 million of expense in Investment Management Expenses in the Consolidated Statements of Operations, representing the associated cash bonus paid out to certain employees pursuant to the terms of the Prologis Promote Plan, previously referred to as the Private Capital Plan.

Summary of Outstanding Unconsolidated Co-investment Venture

A summary of our outstanding unconsolidated co-investment ventures at December 31 was as follows (square feet and total assets in thousands and represents 100% of the venture):


	2013		2012		2011
Number of ventures		10		11		15
Square feet		264,293		208,753		267,752
Total assets	$	23,865,250	$	17,612,590	$	20,692,939

Information About Investments in Co-investment Ventures by Property Funds

Information about our investments in the co-investment ventures as of December 31 was as follows (dollars and square feet in thousands):


	Number of properties owned		Square feet		Ownership Percentage				Investment in and Advances to
Co-Investment Venture	2013		2013		2013		2012		2013		2012
Prologis Targeted U.S. Logistics Fund (Prologis U.S. Logistics Fund, LP) (1)		385		48,490		25.9 %		23.9 %	$	743,454	$	645,241
Prologis North American Industrial Fund (2)		237		46,500		23.1 %		23.1 %		201,482		209,580
Prologis North American Industrial Fund III (Prologis NA 3 LP) (3)		-		-		-		20.0 %		-		20,860
Prologis Mexico Industrial Fund (Prologis MX Fund LP) (4)		74		9,503		20.0 %		20.0 %		49,684		50,681
Prologis SGP Mexico (Prologis-SGP Mexico, LLC) (5)		-		-		-		21.6 %		-		33,245
Prologis Brazil Logistics Partners Fund (“Brazil Fund”) and related joint ventures (“Brazil Ventures”) (6)		11		4,044		50.0 %		50.0 %		199,392		152,224
Prologis Targeted Europe Logistics Fund (Prologis Europe Logistics Fund, FCP-FIS) (7)		84		13,652		43.1 %		32.4 %		471,896		280,430
Prologis European Properties Fund II (8)		250		62,364		32.5 %		29.7 %		582,828		398,291
Europe Logistics Venture 1 (Europe Logistics JV, FCP-FIS) (9) (10)		24		5,070		15.0 %		15.0 %		62,654		44,027
Prologis European Logistics Partners (9) (11)		209		51,790		50.0 %		-		1,585,923		-
Nippon Prologis REIT (12)		24		18,508		15.1 %		-		309,715		-
Prologis Japan Fund 1 (Prologis Japan Fund I, LP) (13)		-		-		-		20.0 %		-		144,352
Prologis China Logistics Venture 1 (Prologis China Logistics Venture I, LP) (9)		19		4,372		15.0 %		15.0 %		42,987		34,149

Totals		1,317		264,293					$	4,250,015	$	2,013,080

(1)

We have an ownership interest in this co-investment venture along with numerous third party investors. During 2013, this venture disposed of 14 properties for a gain of $35.5 million. In addition, this venture acquired 34 properties from third parties in 2013 aggregating 4.4 million square feet for $274.7 million.

(2)

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 2013, the venture disposed of six properties for a gain of $2.3 million.

(3)	In August 2013, we acquired a controlling interest in and began consolidating NAIF III. See Note 3 for information regarding this transaction.

(4)	We refer to the combined entities in which we have an ownership interest with several institutional investors as one co-investment venture named Prologis Mexico Industrial Fund.

(5)	In October 2013, we purchased our partner’s interest and began consolidating this venture. See Note 3 for information regarding this transaction.

(6)

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.” During 2013, the Brazil Ventures contributed three properties to unconsolidated ventures in Brazil aggregating 1.1 million square feet for total proceeds of $122.6 million.

(7)

We have an ownership interest in this co-investment venture along with numerous third party investors. During 2013, we contributed eight properties aggregating 1.6 million square feet in exchange for $144.6 million in proceeds raised from us and third parties and additional ownership interests in the venture. As a result, our ownership percentage in this venture increased in 2013.

(8)

We have an ownership interest in this co-investment venture along with numerous third party investors. During 2013, we contributed 21 properties aggregating 4.5 million square feet for total proceeds of $391.6 million. Additionally, this venture acquired 10 properties from third parties in 2013 for $222.4 million aggregating 2.6 million square feet.

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

(10)	During 2013, we contributed 10 properties aggregating 1.9 million square feet for proceeds of $189.9 million.

(11)

We established this co-investment venture in 2013, as discussed above. Since the initial contribution, we contributed four properties aggregating 0.5 million square feet for total proceeds of $57.6 million. Additionally, this venture acquired 12 properties from third parties in 2013 for $380.4 million aggregating 2.6 million square feet.

(12)

We established this co-investment venture in 2013, as discussed above. Since the initial contribution, we contributed six properties aggregating 4.6 million square feet for total proceeds of $963.9 million. These contributions were funded by NPR with two follow on offerings in 2013. In addition, NPR acquired six properties from Prologis Japan Fund I aggregating 4.3 million square feet.

(13)	We concluded this co-investment venture in 2013 through the acquisition of 14 properties by us and the sale of the remaining six properties to NPR (as discussed above).

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.


2013 (1)	Americas		Europe		Asia		Total
Revenues	$	702.4	$	801.4	$	223.8	$	1,727.6
Net operating income	$	512.9	$	621.1	$	174.7	$	1,308.7
Net earnings (loss) (2)	$	58.3	$	130.6	$	47.5	$	236.4
Total assets	$	8,014.4	$	11,818.8	$	4,032.1	$	23,865.3
Amounts due to us (3)	$	10.3	$	43.7	$	110.0	$	164.0
Third party debt (4)	$	2,999.1	$	2,998.2	$	1,715.2	$	7,712.5
Total liabilities	$	3,177.1	$	4,113.6	$	1,899.2	$	9,189.9
Our weighted average ownership (5)		22.7%		39.0%		15.0%		29.2%
Our investment balance (6)	$	1,194.0	$	2,703.3	$	352.7	$	4,250.0
Our deferred gains, net of amortization (7)	$	139.6	$	196.7	$	94.8	$	431.1

2012 (1)	Americas		Europe		Asia		Total
Revenues	$	759.3	$	489.8	$	140.5	$	1,389.6
Net operating income	$	560.8	$	380.2	$	109.4	$	1,050.4
Net earnings (loss) (2)	$	(88.1)	$	85.7	$	8.2	$	5.8
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
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
Our deferred gains, net of amortization (7)	$	147.9	$	181.6	$	0.1	$	329.6

(1)

We have had significant activity with our unconsolidated co-investment ventures in 2012 and 2013. We concluded Prologis California and NAIF II in 2012 and NAIF III, Prologis Japan Fund I and SGP Mexico in 2013 and only included the results of these ventures through the transaction dates. In 2013, we launched two new co-investment ventures (PELP and NPR) and the results of these ventures are included from the date these ventures acquired the properties.

(2)	In 2013, three ventures in the Americas recorded net gains of $60.6 million from the disposition of 23 properties.

In 2012, five ventures in the Americas recorded net gains of $9.4 million from the disposition of 38 properties. During 2012, NAIF III 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 and the settlement of interest rate swap agreements in which the related debt is no longer expected to reach maturity for $21.5 million.

(3)

As of December 31, 2013, we had receivables from Prologis European Logistics Partners for remaining sale proceeds of $35.5 million which has subsequently been received. We also had a receivable from NPR of $88.5 million related to customer security deposits that are made through a leasing company owned by Prologis that pertain to properties owned by NPR. There is a corresponding payable to NPR’s customer in Other Liabilities in the Consolidated Balance Sheets.

As of December 31 2012, we had a note receivable from SGP Mexico of $19.8 million which was settled upon our acquisition of

our partner’s interest on October 2, 2013. The remaining amounts represent current balances from services provided by us to the venture.

(4)	As of December 31, 2013, we did not guarantee any third party debt of our 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 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, 2013 (in millions):


	Equity commitments						Expiration date for remaining commitments
	Prologis		Venture Partners		Total		Expiration date for remaining commitments
Prologis Targeted U.S. Logistics Fund (1)	$	-	$	294.8	$	294.8	Various
Prologis Targeted Europe Logistics Fund (2) (3)	$	136.0	$	183.4	$	319.4	June 2015
Prologis European Properties Fund II (2) (4)	$	12.0	$	154.9	$	166.9	September 2015
Europe Logistics Venture 1 (2) (5)	$	25.7	$	145.8	$	171.5	December 2014
Prologis European Logistics Partners (6)	$	255.7	$	255.7	$	511.4	February 2016
Prologis China Logistics Venture 1 (7)	$	61.7	$	349.6	$	411.3	March 2015
Prologis China Logistics Venture 2 (8)	$	88.2	$	500.0	$	588.2	November 2017

Total	$	579.3	$	1,884.2	$	2,463.5

(1)

During 2013, equity commitments of $438.0 million were obtained from third party investors and we committed to contribute $100.0 million. To fund the acquisition of properties during 2013, the venture called capital of $273.3 million, of which $173.3 million was from third parties and $100.0 million was from us. Of the remaining commitments at December 31, 2013, approximately $245 million will expire by June 2014 and the remaining commitments are open-ended.

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

(3)

During 2013, equity commitments of €234.0 million ($322.7 million) were obtained from third party investors and we committed €258.6 million ($346.8 million). To fund acquisition of properties and pay down debt, the venture called capital of €261.0 million ($350.1 million) of which €101.0 million ($139.3 million) was from third parties and €160.0 million ($210.9 million) was our share.

(4)

During 2013, equity commitments of €325.0 million ($438.4 million) were obtained from third party investors and we committed to contribute €125.0 million ($165.7 million). To meet the capital requirements of the venture, including the repayment of debt and contribution of properties by us, the venture called capital of €329.0 million ($438.4 million) of which €212.7 million ($284.7 million) was from third parties and €116.3 million ($153.7 million) was our share.

(5)	During the fourth quarter of 2013, the venture called capital of €149.7 million ($203.4 million) of which €127.2 million ($172.9 million) was from third parties and €22.4 million ($30.5 million) was our share.

(6)

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. We contributed 195 properties to this venture in March using the majority of the equity commitments. Additional equity commitments of €339.8 million ($457.9 million) were obtained, of which €169.9 million ($229.1 million) was our share. Of these commitments €159.8 million ($220.3 million) are denominated in British pound sterling, will be called in euro and are reported above in U.S. dollar. After the initial contribution, the venture called €241.0 million ($319.5 million) of additional capital to fund the acquisition of properties, of which €120.5 million ($159.8 million) was our share. The remaining equity commitments as of December 31, 2013, are to fund the future repayment of debt.

(7)	During 2013, equity commitments of $39.1 million, of which $6.9 million was our share, were called.

(8)	In the fourth quarter of 2013, we formed Prologis China Logistics Venture 2 and equity commitments of $588.2 million were obtained of which $500.0 million was from third parties and $88.2 million was our share.

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 ventures

We have several investments in other unconsolidated 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 $2.6 million, $6.0 million and $10.6 million for the years ended December 31, 2013, 2012 and 2011, respectively.