Unconsolidated Entities (Tables)

6 Months Ended

Jun. 30, 2014

Equity Method Investments And Joint Ventures [Abstract]

Summary of Investments

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

	June 30,		December 31,
	2014		2013
Unconsolidated co-investment ventures	$	5,400,293	$	4,250,015
Other ventures		175,130		180,224
Totals	$	5,575,423	$	4,430,239

Earnings on Investment in Co-Investment Ventures

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Earnings (loss) from unconsolidated co-investment ventures:
Americas (1)	$	(8,526	)	$	(874	)	$	(8,855	)	$	13,394
Europe		26,742			8,761			52,237			16,303
Asia		2,838			(16	)		6,503			2,469
Total earnings from unconsolidated co-investment ventures, net	$	21,054		$	7,871		$	49,885		$	32,166
Strategic capital and other income:
Americas (2)	$	47,230		$	14,818		$	61,555		$	30,895
Europe		19,453			13,854			41,153			24,467
Asia (3)		9,410			14,239			18,207			20,981
Total strategic capital income		76,093			42,911			120,915			76,343
Development management and other income		874			333			1,581			1,380
Total strategic capital and other income	$	76,967		$	43,244		$	122,496		$	77,723

(1) In June 2014, we recognized our share of acquisition costs that were expensed by FIBRA upon acquisition of its initial portfolio. During 2014 and 2013, we recognized earnings of $4.8 million and $8.7 million, respectively, representing our share of the gains from the disposition of properties.

(2) In June 2014, we earned a promote fee from the Prologis Targeted U.S. Logistics Fund of $42.1 million, which was based on the venture’s cumulative returns to the investors over the last three years. Of that amount, $31.3 million represented the third party investors’ portion and is reflected in Strategic Capital Income in the Consolidated Statement of Operations. We also recognized $6.2 million of expense, during the three months ended June 30, 2014, and is reflected in Strategic Capital Expenses in the Consolidated Statements of Operations, representing an estimate of the associated cash bonus earned pursuant to the terms of the Prologis Promote Plan.

(3) In June 2013, we earned acquisition fees of $5.8 million from Nippon Prologis REIT (“NPR”) in connection with the acquisition of eight properties from another co-investment venture.

Summary of Outstanding Unconsolidated Co-investment Ventures

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):

	June 30, 2014		December 31, 2013		June 30, 2013
Americas:
Number of properties owned		808		709		805
Square feet		128,962		108,537		128,422
Total assets	$	9,450,029	$	8,014,339	$	9,074,309
Europe:
Number of properties owned		589		571		510
Square feet		137,802		132,876		119,829
Total assets	$	12,235,906	$	11,818,786	$	9,937,366
Asia:
Number of properties owned		46		43		38
Square feet		23,553		22,880		17,710
Total assets	$	4,269,690	$	4,032,125	$	3,440,894
Total:
Number of properties owned		1,443		1,323		1,353
Square feet		290,317		264,293		265,961
Total assets	$	25,955,625	$	23,865,250	$	22,452,569

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 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 June 30, 2014:
Revenues	$	178.7		$	252.3		$	69.7		$	500.7
Net operating income		132.2			196.8			53.7			382.7
Net earnings (loss) (2)	$	(9.7	)	$	65.6		$	16.5		$	72.4
For the six months ended June 30, 2014:
Revenues	$	346.9		$	499.0		$	138.2		$	984.1
Net operating income	$	251.4		$	392.9		$	107.3		$	751.6
Net earnings (loss)	$	(7.5	)	$	128.2		$	38.5		$	159.2
As of June 30, 2014:
Amounts due to us (3)	$	47.1		$	28.8		$	105.5		$	181.4
Third party debt (4)	$	3,334.4		$	2,703.8		$	1,807.0		$	7,845.2
Total liabilities	$	3,584.1		$	3,895.7		$	2,048.9		$	9,528.7
Our weighted average ownership		27.7	%		38.7	%		15.0	%		30.7	%
Our investment balance	$	2,067.4		$	2,969.4		$	363.5		$	5,400.3
Deferred gains, net of amortization (5)	$	121.4		$	198.0		$	93.3		$	412.7
2013 (1)	Americas			Europe			Asia			Total
For the three months ended June 30, 2013:
Revenues	$	183.1		$	206.9		$	53.8		$	443.8
Net operating income	$	134.2		$	159.4		$	40.5		$	334.1
Net earnings	$	3.5		$	14.2		$	8.2		$	25.9
For the six months ended June 30, 2013:
Revenues	$	365.2		$	355.3		$	99.1		$	819.6
Net operating income	$	267.3		$	264.7		$	76.7		$	608.7
Net earnings (2)	$	33.8		$	44.8		$	12.4		$	91.0
As of December 31, 2013:
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		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 (5)	$	139.6		$	196.7		$	94.8		$	431.1

(1) We had significant activity with our unconsolidated co-investment ventures in 2014 and 2013. As described above, we started FIBRA 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.

(2) During the second quarter of 2014, two ventures in the Americas recorded net gains of $14.2 million from the disposition of 12 properties and FIBRA recorded acquisition costs of $36.8 million ($16.5 million was our share). During the first quarter of 2013, one venture in the Americas recorded net gains of $21.1 million from the disposition of two properties.

(3) At June 30, 2014, we had a receivable of $42.1 million from one of our ventures in the Americas for a promote fee earned, as discussed above. As of June 30, 2014 and December 31, 2013, we had receivables 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 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 that 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.

(4) As of June 30, 2014 and December 31, 2013, we did not guarantee any third party debt of our co-investment ventures.

(5) 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, 2014 (in millions):

	Equity commitments						Expiration date for remaining commitments
	Prologis		Venture Partners		Total
Prologis Targeted U.S. Logistics Fund	$	—	$	453.3	$	453.3	2014-2015
Prologis Targeted Europe Logistics Fund (1)		165.1		219.1		384.2	June 2015
Prologis European Properties Fund II (1)		96.7		253.0		349.7	September 2015
Europe Logistics Venture 1 (1)		23.7		134.5		158.2	December 2014
Prologis European Logistics Partners (2)		113.5		113.5		227.0	February 2016
Prologis China Logistics Venture (3)		142.1		805.3		947.4	2015 and 2017
Total	$	541.1	$	1,978.7	$	2,519.8

(1) Equity commitments are denominated in euro and reported above in U.S. dollars based on an exchange rate of 1.37 U.S. dollars to the euro.

(2) The equity commitments for this venture are expected to fund the future repayment of debt and are denominated in British pounds sterling, will be called in euros and are reported above in U.S. dollars using an exchange rate of 1.70 U.S. dollars to the British pounds sterling.

(3) In July 2014, we secured a $500 million increase in committed third-party equity for this venture.