Note 12. Noncontrolling Interests

Prologis, L.P.

We report noncontrolling interests related to several entities we consolidate but of which we do not own 100% of the equity. These entities include two real estate partnerships that have issued limited partnership units to third parties. Depending on the specific partnership agreements, these limited partnership units are exchangeable into shares of the Parent’s common stock (or cash), generally at a rate of one share of common stock to one unit. We evaluated the noncontrolling interests with redemption provisions that permit the issuer to settle in either cash or common stock at the option of the issuer to determine whether temporary or permanent equity classification on the balance sheet is appropriate, including the requirement to settle in unregistered shares, and determined that these units meet the requirements to qualify for presentation as permanent equity. We also consolidate several entities in which we do not own 100% of the equity and the units of these entities are not exchangeable into our common stock.

As discussed in Note 3, we began consolidating the co-investment venture NAIF in 2014.

In the first quarter of 2014, we formed a new U.S. co-investment venture, USLV, in which we hold a 55% equity ownership interest and have one partner. The venture is consolidated due to the structure and voting rights of the venture. At closing, the venture acquired from us a portfolio of 66 operating properties aggregating 12.8 million square feet for an aggregate purchase price of $1.0 billion.

Prologis, Inc.

The noncontrolling interests of the Parent include the noncontrolling interests presented in the Operating Partnership, as well as the common limited partnership units in the Operating Partnership that are not owned by the Parent.

During 2013, net earnings attributable to noncontrolling interests were $10.1 million, of which $0.5 million was a loss from continuing operations and $10.6 million was income from discontinued operations.

The following table summarizes our noncontrolling interests and the consolidated entity’s total investment in real estate and debt at December 31 (dollars and units in thousands):

	Our Ownership Percentage						Noncontrolling Interests				Total Investment in Real Estate				Debt
	2015			2014			2015		2014		2015		2014		2015		2014
Prologis U.S. Logistics Venture (1)		55.0	%		55.0	%		2,677,642		427,307		6,533,089		1,006,183		724,256		-
Prologis North American Industrial Fund		66.1	%		66.1	%		490,444		544,718		2,571,092		2,771,299		1,083,650		1,188,836
Prologis Brazil Logistics Partners Fund I (2)		50.0	%		50.0	%		49,313		68,533		-		-		-		-
Other consolidated entities (3)	various			various				102,828		119,343		1,006,224		1,018,996		14,603		18,051
Prologis, L.P. noncontrolling interests								3,320,227		1,159,901		10,110,405		4,796,478		1,822,509		1,206,887
Limited partners in Prologis, L.P. (4) (5)								432,674		48,189		-		-		-		-
Prologis, Inc. noncontrolling interests							$	3,752,901	$	1,208,090	$	10,110,405	$	4,796,478	$	1,822,509	$	1,206,887

(1)	As discussed in Note 3, USLV acquired a portfolio of properties from KTR in May 2015. We received a contribution of $2.3 billion from our venture partner to fund their share of this acquisition.

(2)	The assets of Prologis Brazil Logistics Partners Fund I (“Brazil Fund”) are primarily investments in unconsolidated entities of $103.1 million and $152.0 million at December 31, 2015 and 2014, respectively. For additional information on our unconsolidated investments, see Note 5.

(3)

This line item includes our two partnerships that have issued limited partnership units to third parties, as discussed above, along with various other consolidated entities. At December 31, 2015 and 2014, limited partnership units were exchangeable into cash or, at our option, 1,835 and 1,887 shares, respectively, of the Parent’s common stock. In 2015, 52 limited partnership units were redeemed for cash of $3.2 million. All of these outstanding limited partnership units receive quarterly cash distributions equal to the quarterly dividends paid on our common stock pursuant to the terms of the applicable partnership agreements.

(4)	Includes 8.9 million of Class A Units issued in the fourth quarter of 2015. See Note 11 for further discussion of our Class A Units.

(5)

We issued 4.7 million common limited partnership units in the Operating Partnership, principally in connection with the KTR acquisition. At December 31, 2015 and 2014, excluding the Class A Units, there were common limited partnership units in the Operating Partnership that were exchangeable into cash or, at our option, 6.4 million and 1.8 million shares of the Parent’s common stock. At December 31, 2015 and 2014, the fair value of the 6.4 million and 1.8 million shares, respectively, would be $275.0 million and $76.0 million, respectively, based on the closing stock price of the Parent’s common stock. At December 31, 2015 and 2014, there were 1.2 million and 0.1 million LTIP Units (as defined in Note 13) outstanding, respectively, associated with our long-term compensation plan that are not exchangeable into common units of the Operating Partnership and redeemable into the Parent’s common stock until they vest and other applicable conditions are met. All of these outstanding limited partnership units receive quarterly cash distributions equal to the quarterly distributions paid on our common stock pursuant to the terms of the partnership agreement.