4.	Unconsolidated Entities

Summary of Investments

We have investments in entities through a variety of ventures. We co-invest in entities that own multiple properties with strategic 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 range from 15-55%. These entities may be consolidated or unconsolidated, depending on the structure, our partner’s rights and participation and our level of control of the entity. This note details our investments in unconsolidated co-investment ventures, which are accounted for using the equity method of accounting. See Note 7 for more detail regarding our consolidated investments.

We also have other 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 ventures, collectively, as unconsolidated entities.

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


	March 31, 2014		December 31, 2013
Unconsolidated co-investment ventures	$	4,513,180	$	4,250,015
Other ventures		174,742		180,224

Totals	$	4,687,922	$	4,430,239

Unconsolidated Co-Investment Ventures

As of March 31, 2014, we had investments in and managed unconsolidated co-investment ventures that own portfolios of operating industrial properties and may also develop properties. We account for our investments in these ventures under the equity method of accounting and, therefore, we record our share of each venture’s net earnings or loss as Earnings from Unconsolidated Entities, Net in the Consolidated Statements of Operations. We earn fees for the management services we provide to these ventures. 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 incentive returns or promotes based on the third party investor returns over time. We report these fees and incentives as Investment Management Income in the Consolidated Statements of Operations. In addition, we may earn fees for services provided to develop a building within these ventures and those fees are reflected as Development Management and Other Income in the Consolidated Statements of Operations.

Summarized information regarding the amounts we recognize in the Consolidated Statements of Operations from our investments in the unconsolidated co-investment ventures is as follows (in thousands):


	Three Months Ended
	March 31,
	2014			2013
Earnings (loss) from unconsolidated co-investment ventures:
Americas (1)	$	(329	)	$	14,268
Europe (2)		25,495			7,542
Asia (2)		3,665			2,485

Total earnings from unconsolidated co-investment ventures, net	$	28,831		$	24,295

Investment management and other income:
Americas	$	14,325		$	16,077
Europe (2)		21,700			10,613
Asia (2)		8,797			6,742

Total investment management income		44,822			33,432
Development management and other income		707			1,047

Total investment management and other income	$	45,529		$	34,479

(1)	During the first quarter of 2013, we recognized a gain of $9.7 million representing our share of the sale of two properties in the Prologis Brazil Logistics Partners Fund.

(2)	During the first quarter of 2013, we started two new co-investment ventures, one in Europe and one in Japan, and started accounting for these ventures under the equity method and recognizing investment management income from these two new co-investment ventures.

The amounts of Investment Management income and earnings we recognize depend on the size of co-investment ventures that we manage and in which we have an ownership interest. A summary of our outstanding unconsolidated co-investment ventures was as follows (square feet and total assets in thousands and represents 100% of the venture):


	March 31,		December 31,		March 31,
	2014		2013		2013
Americas:
Number of properties owned		712		709		804
Square feet		109,147		108,537		127,869
Total assets	$	8,074,306	$	8,014,339	$	9,329,047
Europe:
Number of properties owned		585		571		514
Square feet		136,647		132,876		119,736
Total assets	$	12,119,512	$	11,818,786	$	9,698,216
Asia:
Number of properties owned		45		43		53
Square feet		23,332		22,880		20,027
Total assets	$	4,047,560	$	4,032,125	$	3,666,689
Total:
Number of properties owned		1,342		1,323		1,371
Square feet		269,126		264,293		267,632
Total assets	$	24,241,378	$	23,865,250	$	22,693,952

The following is summarized financial information of the unconsolidated co-investment ventures and our investment (dollars in millions). The co-investment venture information represents the venture’s information (not our proportionate share) based on our U.S. GAAP basis in the entity.


2014 (1)	Americas			Europe			Asia			Total
For the three months ended March 31, 2014:
Revenues	$	168.2		$	246.7		$	68.5		$	483.4
Net operating income	$	119.2		$	196.1		$	53.6		$	368.9
Net earnings	$	2.2		$	62.6		$	22.0		$	86.8
As of March 31, 2014:
Amounts due to us (2)	$	14.7		$	8.8		$	99.1		$	122.6
Third party debt (3)	$	2,961.1		$	2,685.2		$	1,737.6		$	7,383.9
Total liabilities	$	3,110.8		$	3,818.8		$	1,911.3		$	8,840.9
Our weighted average ownership		23.3	%		38.9	%		15.0	%		29.4	%
Our investment balance	$	1,225.4		$	2,943.8		$	344.0		$	4,513.2
Deferred gains, net of amortization (4)	$	138.0		$	195.7		$	93.6		$	427.3


2013 (1)	Americas			Europe			Asia			Total
For the three months ended March 31, 2013:
Revenues	$	182.1		$	148.4		$	45.3		$	375.8
Net operating income	$	133.1		$	105.3		$	36.2		$	274.6
Net earnings (5)	$	26.1		$	24.1		$	4.2		$	54.4
As of December 31, 2013:
Amounts due to us (2)	$	10.3		$	43.7		$	110.0		$	164.0
Third party debt (3)	$	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		22.7	%		39.0	%		15.0	%		29.2	%
Our investment balance	$	1,194.0		$	2,703.3		$	352.7		$	4,250.0
Deferred gains, net of amortization (4)	$	139.6		$	196.7		$	94.8		$	431.1

(1)

We have had significant activity with our unconsolidated co-investment ventures in 2013. We concluded three co-investment ventures (the results of these ventures are included only through the transaction dates), and we launched two new co-investment ventures (the results of these ventures are included from the date these ventures acquired the properties).

(2)

As of March 31, 2014, and December 31, 2013, we had receivables from NPR of $87.8 million and $88.5 million, respectively, 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 customers in Other Liabilities in the Consolidated Balance Sheets. As of December 31, 2013, we had receivables from Prologis European Logistics Partners Sàrl (“PELP”) for remaining sale proceeds of $35.5 million which were received in the first quarter of 2014. The remaining amounts generally represent current balances for services provided by us to the co-investment ventures.

(3)	As of March 31, 2014 and December 31, 2013, we did not guarantee any third party debt of our co-investment ventures.

(4)	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.

(5)	During the first quarter of 2013, one venture in the Americas recorded net gains of $21.1 million from the disposition of two properties.

In April 2014, we acquired a partner’s 5.6% ownership interest in the Prologis North American Industrial Fund for $83.5 million and now own 28.7% of the venture.

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 contributions of properties to these ventures through the remaining commitment period and we may make additional cash investments in these ventures.

The following table is a summary of remaining equity commitments as of March 31, 2014 (in millions):


	Equity commitments						Expiration date for remaining commitments
	Prologis		Venture Partners		Total
Prologis Targeted U.S. Logistics Fund	$	—	$	319.8	$	319.8	2014-2015
Prologis Targeted Europe Logistics Fund (1)		181.1		242.0		423.1	June 2015
Prologis European Properties Fund II (1)		100.6		293.8		394.4	September 2015
Europe Logistics Venture 1 (1)		24.0		135.7		159.7	December 2014
Prologis European Logistics Partners (2)		110.9		110.9		221.8	February 2016
Prologis China Logistics Venture 1 and 2		148.1		839.3		987.4	2015 and 2017

Total	$	564.7	$	1,941.5	$	2,506.2

(1)	Equity commitments are denominated in euro and reported above in U.S. dollars based on an exchange rate of 1.38 U.S. dollars to the euro.

(2)	The equity commitments as of March 31, 2014, are expected to fund the future repayment of debt and are denominated in British pound sterling, will be called in euros and are reported above in U.S. dollar using an exchange rate of 1.66 U.S. dollars to the British pound sterling.