10-Q 1 pld-10q_20170331.htm FORM 10-Q pld-10q_20170331.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2017

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to ______________

 

Commission File Number:  001-13545 (Prologis, Inc.)  001-14245 (Prologis, L.P.)

 

Prologis, Inc.

Prologis, L.P.

(Exact name of registrant as specified in its charter)

 

Maryland (Prologis, Inc.)

Delaware (Prologis, L.P.)

 

94-3281941 (Prologis, Inc.)

94-3285362 (Prologis, L.P.)

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

Pier 1, Bay 1, San Francisco, California

 

94111

(Address or principal executive offices)

 

(Zip Code)

 

(415) 394-9000

(Registrants’ telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing for the past 90 days.

Prologis, Inc.

Yes

No

Prologis, L.P.

Yes

No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website; if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter periods that the registrant was required to submit and post such files).

Prologis, Inc.

Yes

No

Prologis, L.P.

Yes

No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one):

 

Prologis, Inc.:

 

 

 

 

 

Large accelerated filer   

 

Accelerated filer   

Non-accelerated filer   

Smaller reporting company   

Emerging growth company    

 

 

(Do not check if a smaller reporting company)

 

 

 

Prologis, L.P.:

 

 

 

 

 

Large accelerated filer   

 

Accelerated filer   

Non-accelerated filer   

Smaller reporting company   

Emerging growth company    

 

 

(Do not check if a smaller reporting company)

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Prologis, Inc.

Yes

No

Prologis, L.P.

Yes

No

 

The number of shares of Prologis, Inc.’s common stock outstanding at April 21, 2017, was approximately 530,315,000.

 

 

 

 


 

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended March 31, 2017, of Prologis, Inc. and Prologis, L.P. Unless stated otherwise or the context otherwise requires, references to “Prologis, Inc.” or the “Parent” mean Prologis, Inc. and its consolidated subsidiaries; and references to “Prologis, L.P.” or the “Operating Partnership” mean Prologis, L.P., and its consolidated subsidiaries. The terms “the Company,” “Prologis,” “we,” “our” or “us” means the Parent and the Operating Partnership collectively.

 

The Parent is a real estate investment trust (“REIT”) and the general partner of the Operating Partnership. At March 31, 2017, the Parent owned an approximate 97.31% common general partnership interest in the Operating Partnership and 100% of the preferred units in the Operating Partnership. The remaining approximate 2.69% common limited partnership interests are owned by nonaffiliated investors and certain current and former directors and officers of the Parent. As the sole general partner of the Operating Partnership, the Parent has complete responsibility and discretion in the day-to-day management and control of the Operating Partnership.

 

We operate the Parent and the Operating Partnership as one enterprise. The management of the Parent consists of the same members as the management of the Operating Partnership. These members are officers of the Parent and employees of the Operating Partnership or one of its subsidiaries. As general partner with control of the Operating Partnership, the Parent consolidates the Operating Partnership for financial reporting purposes. Because the only significant asset of the Parent is its investment in the Operating Partnership, the assets and liabilities of the Parent and the Operating Partnership are the same on their respective financial statements.

We believe combining the quarterly reports on Form 10-Q of the Parent and the Operating Partnership into this single report results in the following benefits:

enhances investors’ understanding of the Parent and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

eliminates duplicative disclosure and provides a more streamlined and readable presentation as a substantial portion of the Company’s disclosure applies to both the Parent and the Operating Partnership; and

creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

 

It is important to understand the few differences between the Parent and the Operating Partnership in the context of how we operate the Company. The Parent does not conduct business itself, other than acting as the sole general partner of the Operating Partnership and issuing public equity from time to time. The Parent itself does not incur any indebtedness, but it guarantees the unsecured debt of the Operating Partnership. The Operating Partnership holds substantially all the assets of the business, directly or indirectly, and holds the ownership interests in the Company’s investment in certain entities. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Parent, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates capital required by the business through the Operating Partnership’s operations, incurrence of indebtedness and issuance of partnership units to third parties.

 

The presentation of noncontrolling interests, stockholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of the Parent and those of the Operating Partnership. The preferred stock, common stock, additional paid-in capital, accumulated other comprehensive loss and distributions in excess of net earnings of the Parent are presented as stockholders’ equity in the Parent’s consolidated financial statements. These items represent the common and preferred general partnership interests held by the Parent in the Operating Partnership and are presented as general partner’s capital within partners’ capital in the Operating Partnership’s consolidated financial statements. The common limited partnership interests held by the limited partners in the Operating Partnership are presented as noncontrolling interest within equity in the Parent’s consolidated financial statements and as limited partners’ capital within partners’ capital in the Operating Partnership’s consolidated financial statements. The differences in the presentations between stockholders’ equity and partners’ capital result from the differences in the equity and capital issuances at the Parent and Operating Partnership levels.

                

To highlight the differences between the Parent and the Operating Partnership, separate sections in this report, as applicable, individually discuss the Parent and the Operating Partnership, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of the Parent and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of Prologis.

 

 

 


 

PROLOGIS

INDEX

 

 

 

 

 

Page

Number

 

PART I.

 

Financial Information

 

 

 

 

 

Item 1.

Financial Statements

 

1

 

 

 

            Prologis, Inc.:

 

 

 

 

 

 

Consolidated Balance Sheets – March 31, 2017, and December 31, 2016

 

1

 

 

 

 

Consolidated Statements of Income – Three Months Ended March 31, 2017, and 2016

 

2

 

 

 

 

Consolidated Statements of Comprehensive Income – Three Months Ended March 31, 2017, and 2016

 

3

 

 

 

 

Consolidated Statement of Equity – Three Months Ended March 31, 2017

 

3

 

 

 

 

Consolidated Statements of Cash Flows – Three Months Ended March 31, 2017, and 2016

 

4

 

 

 

            Prologis, L.P.:

 

 

 

 

 

 

Consolidated Balance Sheets – March 31, 2017, and December 31, 2016

 

5

 

 

 

 

Consolidated Statements of Income – Three Months Ended March 31, 2017, and 2016

 

6

 

 

 

 

Consolidated Statements of Comprehensive Income – Three Months Ended March 31, 2017, and 2016

 

7

 

 

 

 

Consolidated Statement of Capital – Three Months Ended March 31, 2017

 

7

 

 

 

 

Consolidated Statements of Cash Flows – Three Months Ended March 31, 2017, and 2016

 

8

 

 

 

            Prologis, Inc. and Prologis, L.P.:

 

 

 

 

 

 

Notes to the Consolidated Financial Statements

 

9

 

 

 

 

Note 1. General

 

9

 

 

 

 

Note 2. Real Estate

 

11

 

 

 

 

Note 3. Unconsolidated Entities

 

11

 

 

 

 

Note 4. Assets Held for Sale or Contribution

 

15

 

 

 

 

Note 5. Debt

 

15

 

 

 

 

Note 6. Noncontrolling Interests

 

16

 

 

 

 

Note 7. Long-Term Compensation

 

17

 

 

 

 

Note 8. Earnings Per Common Share or Unit

 

18

 

 

 

 

Note 9. Financial Instruments and Fair Value Measurements

 

19

 

 

 

 

Note 10. Business Segments

 

23

 

 

 

 

Note 11. Supplemental Cash Flow Information

 

25

 

 

 

 

Reports of Independent Registered Public Accounting Firm

 

26

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

28

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

45

 

 

 

Item 4.

Controls and Procedures

 

46

 

PART II.

 

Other Information

 

 

 

 

 

Item 1.

Legal Proceedings

 

46

 

 

 

Item 1A.

Risk Factors

 

46

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

46

 

 

 

Item 3.

Defaults Upon Senior Securities

 

46

 

 

 

Item 4.

Mine Safety Disclosures

 

47

 

 

 

Item 5.

Other Information

 

47

 

 

 

Item 6.

Exhibits

 

47

 

 

 

 

 

 


 

PART I. FINANCIAL INFORMATION

 

ITEM 1. Financial Statements

 

PROLOGIS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

March 31, 2017

 

 

December 31,

 

 

(Unaudited)

 

 

2016

 

ASSETS

 

 

 

 

 

 

 

Investments in real estate properties

$

27,131,229

 

 

$

27,119,330

 

Less accumulated depreciation

 

3,914,817

 

 

 

3,758,372

 

Net investments in real estate properties

 

23,216,412

 

 

 

23,360,958

 

Investments in and advances to unconsolidated entities

 

4,305,881

 

 

 

4,230,429

 

Assets held for sale or contribution

 

439,743

 

 

 

322,139

 

Notes receivable backed by real estate

 

17,006

 

 

 

32,100

 

Net investments in real estate

 

27,979,042

 

 

 

27,945,626

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

395,829

 

 

 

807,316

 

Other assets

 

1,440,087

 

 

 

1,496,990

 

Total assets

$

29,814,958

 

 

$

30,249,932

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Debt

$

10,966,932

 

 

$

10,608,294

 

Accounts payable and accrued expenses

 

549,836

 

 

 

556,179

 

Other liabilities

 

629,769

 

 

 

627,319

 

Total liabilities

 

12,146,537

 

 

 

11,791,792

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

Prologis, Inc. stockholders’ equity:

 

 

 

 

 

 

 

Series Q preferred stock at stated liquidation preference of $50 per share: $0.01 par value; 1,565 shares

     issued and outstanding and 100,000 preferred shares authorized at March 31, 2017, and

         December 31, 2016

 

78,235

 

 

 

78,235

 

Common stock: $0.01 par value; 530,213 shares and 528,671 shares issued and outstanding at

     March 31, 2017, and December 31, 2016, respectively

 

5,302

 

 

 

5,287

 

Additional paid-in capital

 

19,246,762

 

 

 

19,455,039

 

Accumulated other comprehensive loss

 

(943,282

)

 

 

(937,473

)

Distributions in excess of net earnings

 

(3,640,150

)

 

 

(3,610,007

)

Total Prologis, Inc. stockholders’ equity

 

14,746,867

 

 

 

14,991,081

 

Noncontrolling interests

 

2,921,554

 

 

 

3,467,059

 

Total equity

 

17,668,421

 

 

 

18,458,140

 

Total liabilities and equity

$

29,814,958

 

 

$

30,249,932

 

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

 

1

 


 

PROLOGIS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2017

 

 

2016

 

Revenues:

 

 

 

 

 

 

 

 

Rental

 

$

439,884

 

 

$

437,104

 

Rental recoveries

 

 

127,049

 

 

 

117,012

 

Strategic capital

 

 

57,045

 

 

 

51,003

 

Development management and other

 

 

5,177

 

 

 

1,181

 

Total revenues

 

 

629,155

 

 

 

606,300

 

Expenses:

 

 

 

 

 

 

 

 

Rental

 

 

152,656

 

 

 

146,581

 

Strategic capital

 

 

31,799

 

 

 

25,293

 

General and administrative

 

 

53,617

 

 

 

50,543

 

Depreciation and amortization

 

 

226,591

 

 

 

250,000

 

Other

 

 

2,606

 

 

 

4,685

 

Total expenses

 

 

467,269

 

 

 

477,102

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

161,886

 

 

 

129,198

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Earnings from unconsolidated entities, net

 

 

48,605

 

 

 

58,311

 

Interest expense

 

 

(72,912

)

 

 

(80,812

)

Interest and other income, net

 

 

2,785

 

 

 

2,591

 

Gains on dispositions of investments in real estate, net

 

 

97,325

 

 

 

144,317

 

Foreign currency and derivative losses, net

 

 

(7,400

)

 

 

(14,211

)

Losses on early extinguishment of debt, net

 

 

-

 

 

 

(1,052

)

Total other income

 

 

68,403

 

 

 

109,144

 

Earnings before income taxes

 

 

230,289

 

 

 

238,342

 

Total income tax expense

 

 

9,600

 

 

 

15,537

 

Consolidated net earnings

 

 

220,689

 

 

 

222,805

 

Less net earnings attributable to noncontrolling interests

 

 

15,760

 

 

 

13,075

 

Net earnings attributable to controlling interests

 

 

204,929

 

 

 

209,730

 

Less preferred stock dividends

 

 

1,674

 

 

 

1,689

 

Net earnings attributable to common stockholders

 

$

203,255

 

 

$

208,041

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – Basic

 

 

528,721

 

 

 

524,205

 

Weighted average common shares outstanding – Diluted

 

 

550,010

 

 

 

543,562

 

 

 

 

 

 

 

 

 

 

Net earnings per share attributable to common stockholders – Basic

 

$

0.38

 

 

$

0.40

 

 

 

 

 

 

 

 

 

 

Net earnings per share attributable to common stockholders – Diluted

 

$

0.38

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

Dividends per common share

 

$

0.44

 

 

$

0.42

 

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

 

2

 


 

PROLOGIS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2017

 

 

2016

 

Consolidated net earnings

 

$

220,689

 

 

$

222,805

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Foreign currency translation gains, net

 

 

39,667

 

 

 

1,461

 

Unrealized gains (losses) on derivative contracts, net

 

 

2,631

 

 

 

(15,892

)

Comprehensive income

 

 

262,987

 

 

 

208,374

 

Net earnings attributable to noncontrolling interests

 

 

(15,760

)

 

 

(13,075

)

Other comprehensive income attributable to noncontrolling interests

 

 

(48,107

)

 

 

(8,040

)

Comprehensive income attributable to common stockholders

 

$

199,120

 

 

$

187,259

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

 

PROLOGIS, INC.

CONSOLIDATED STATEMENT OF EQUITY

Three Months Ended March 31, 2017

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

Accumulated

 

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number

 

 

 

 

 

 

Additional

 

 

Other

 

 

in Excess of

 

 

Non-

 

 

 

 

 

 

 

Preferred

 

 

of

 

 

Par

 

 

Paid-in

 

 

Comprehensive

 

 

Net

 

 

controlling

 

 

Total

 

 

 

Stock

 

 

Shares

 

 

Value

 

 

Capital

 

 

Loss

 

 

Earnings

 

 

Interests

 

 

Equity

 

Balance at January 1, 2017

 

$

78,235

 

 

 

528,671

 

 

$

5,287

 

 

$

19,455,039

 

 

$

(937,473

)

 

$

(3,610,007

)

 

$

3,467,059

 

 

$

18,458,140

 

Consolidated net earnings

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

204,929

 

 

 

15,760

 

 

 

220,689

 

Effect of equity compensation

     plans

 

 

-

 

 

 

930

 

 

 

9

 

 

 

(1,239

)

 

 

-

 

 

 

-

 

 

 

8,286

 

 

 

7,056

 

Settlement of noncontrolling

     interests

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(201,797

)

 

 

-

 

 

 

-

 

 

 

(588,006

)

 

 

(789,803

)

Conversion of noncontrolling

     interests

 

 

-

 

 

 

612

 

 

 

6

 

 

 

17,229

 

 

 

-

 

 

 

-

 

 

 

(17,235

)

 

 

-

 

Foreign currency translation

     gains (losses), net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(8,369

)

 

 

-

 

 

 

48,036

 

 

 

39,667

 

Unrealized gains on derivative

     contracts, net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,560

 

 

 

-

 

 

 

71

 

 

 

2,631

 

Reallocation of equity

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(22,457

)

 

 

-

 

 

 

-

 

 

 

22,457

 

 

 

-

 

Distributions and other

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(13

)

 

 

-

 

 

 

(235,072

)

 

 

(34,874

)

 

 

(269,959

)

Balance at March 31, 2017

 

$

78,235

 

 

 

530,213

 

 

$

5,302

 

 

$

19,246,762

 

 

$

(943,282

)

 

$

(3,640,150

)

 

$

2,921,554

 

 

$

17,668,421

 

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

 

3

 


 

PROLOGIS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2017

 

 

2016

 

Operating activities:

 

 

 

 

 

 

 

 

Consolidated net earnings

 

$

220,689

 

 

$

222,805

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Straight-lined rents and amortization of above and below market leases

 

 

(25,497

)

 

 

(20,283

)

Equity-based compensation awards

 

 

18,380

 

 

 

12,465

 

Depreciation and amortization

 

 

226,591

 

 

 

250,000

 

Earnings from unconsolidated entities, net

 

 

(48,605

)

 

 

(58,311

)

Distributions from unconsolidated entities

 

 

77,347

 

 

 

80,088

 

Net changes in operating receivables from unconsolidated entities

 

 

3,880

 

 

 

30,599

 

Amortization of debt premiums, net of debt issuance costs

 

 

(2,905

)

 

 

(5,391

)

Gains on dispositions of investments in real estate, net

 

 

(97,325

)

 

 

(144,317

)

Unrealized foreign currency and derivative losses, net

 

 

12,078

 

 

 

15,079

 

Losses on early extinguishment of debt, net

 

 

-

 

 

 

1,052

 

Deferred income tax expense (benefit)

 

 

2,439

 

 

 

(619

)

Increase in accounts receivable and other assets

 

 

33,470

 

 

 

11,455

 

Decrease in accounts payable and accrued expenses and other liabilities

 

 

(67,748

)

 

 

(110,746

)

Net cash provided by operating activities

 

 

352,794

 

 

 

283,876

 

Investing activities:

 

 

 

 

 

 

 

 

Real estate development

 

 

(320,986

)

 

 

(343,955

)

Real estate acquisitions

 

 

(132,358

)

 

 

(67,346

)

Tenant improvements and lease commissions on previously leased space

 

 

(40,278

)

 

 

(41,569

)

Nondevelopment capital expenditures

 

 

(10,851

)

 

 

(10,721

)

Proceeds from dispositions and contributions of real estate properties

 

 

542,192

 

 

 

603,387

 

Investments in and advances to unconsolidated entities

 

 

(106,658

)

 

 

(117,017

)

Return of investment from unconsolidated entities

 

 

108,543

 

 

 

111,141

 

Proceeds from repayment of notes receivable backed by real estate

 

 

15,094

 

 

 

197,500

 

Proceeds from the settlement of net investment hedges

 

 

1,789

 

 

 

869

 

Net cash provided by investing activities

 

 

56,487

 

 

 

332,289

 

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

1,899

 

 

 

1,192

 

Dividends paid on common and preferred stock

 

 

(235,072

)

 

 

(222,559

)

Noncontrolling interests contributions

 

 

-

 

 

 

256

 

Noncontrolling interests distributions

 

 

(35,989

)

 

 

(78,888

)

Purchase of noncontrolling interests

 

 

(789,803

)

 

 

(2,128

)

Tax paid for shares withheld

 

 

(19,179

)

 

 

(7,268

)

Debt and equity issuance costs paid

 

 

(735

)

 

 

(315

)

Net proceeds from (payments on) credit facilities

 

 

(33,745

)

 

 

302,983

 

Repurchase and payments of debt

 

 

(201,800

)

 

 

(809,309

)

Proceeds from issuance of debt

 

 

485,496

 

 

 

299,497

 

Net cash used in financing activities

 

 

(828,928

)

 

 

(516,539

)

 

 

 

 

 

 

 

 

 

Effect of foreign currency exchange rate changes on cash

 

 

8,160

 

 

 

6,031

 

Net increase (decrease) in cash and cash equivalents

 

 

(411,487

)

 

 

105,657

 

Cash and cash equivalents, beginning of period

 

 

807,316

 

 

 

264,080

 

Cash and cash equivalents, end of period

 

$

395,829

 

 

$

369,737

 

 

See Note 11 for information on noncash investing and financing activities and other information.

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

4

 


 

PROLOGIS, L.P.

CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

 

 

 

 

 

 

 

March 31, 2017

 

 

December 31,

 

 

(Unaudited)

 

 

2016

 

ASSETS

 

 

 

 

 

 

 

Investments in real estate properties

$

27,131,229

 

 

$

27,119,330

 

Less accumulated depreciation

 

3,914,817

 

 

 

3,758,372

 

Net investments in real estate properties

 

23,216,412

 

 

 

23,360,958

 

Investments in and advances to unconsolidated entities

 

4,305,881

 

 

 

4,230,429

 

Assets held for sale or contribution

 

439,743

 

 

 

322,139

 

Notes receivable backed by real estate

 

17,006

 

 

 

32,100

 

Net investments in real estate

 

27,979,042

 

 

 

27,945,626

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

395,829

 

 

 

807,316

 

Other assets

 

1,440,087

 

 

 

1,496,990

 

Total assets

$

29,814,958

 

 

$

30,249,932

 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITAL

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Debt

$

10,966,932

 

 

$

10,608,294

 

Accounts payable and accrued expenses

 

549,836

 

 

 

556,179

 

Other liabilities

 

629,769

 

 

 

627,319

 

Total liabilities

 

12,146,537

 

 

 

11,791,792

 

 

 

 

 

 

 

 

 

Capital:

 

 

 

 

 

 

 

Partners’ capital:

 

 

 

 

 

 

 

General partner – preferred

 

78,235

 

 

 

78,235

 

General partner – common

 

14,668,632

 

 

 

14,912,846

 

Limited partners – common

 

166,902

 

 

 

150,173

 

Limited partners – Class A common

 

238,637

 

 

 

244,417

 

Total partners’ capital

 

15,152,406

 

 

 

15,385,671

 

Noncontrolling interests

 

2,516,015

 

 

 

3,072,469

 

Total capital

 

17,668,421

 

 

 

18,458,140

 

Total liabilities and capital

$

29,814,958

 

 

$

30,249,932

 

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

 

5

 


 

PROLOGIS, L.P.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per unit amounts)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2017

 

 

2016

 

Revenues:

 

 

 

 

 

 

 

 

Rental

 

$

439,884

 

 

$

437,104

 

Rental recoveries

 

 

127,049

 

 

 

117,012

 

Strategic capital

 

 

57,045

 

 

 

51,003

 

Development management and other

 

 

5,177

 

 

 

1,181

 

Total revenues

 

 

629,155

 

 

 

606,300

 

Expenses:

 

 

 

 

 

 

 

 

Rental

 

 

152,656

 

 

 

146,581

 

Strategic capital

 

 

31,799

 

 

 

25,293

 

General and administrative

 

 

53,617

 

 

 

50,543

 

Depreciation and amortization

 

 

226,591

 

 

 

250,000

 

Other

 

 

2,606

 

 

 

4,685

 

Total expenses

 

 

467,269

 

 

 

477,102

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

161,886

 

 

 

129,198

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Earnings from unconsolidated entities, net

 

 

48,605

 

 

 

58,311

 

Interest expense

 

 

(72,912

)

 

 

(80,812

)

Interest and other income, net

 

 

2,785

 

 

 

2,591

 

Gains on dispositions of investments in real estate, net

 

 

97,325

 

 

 

144,317

 

Foreign currency and derivative losses, net

 

 

(7,400

)

 

 

(14,211

)

Losses on early extinguishment of debt, net

 

 

-

 

 

 

(1,052

)

Total other income

 

 

68,403

 

 

 

109,144

 

Earnings before income taxes

 

 

230,289

 

 

 

238,342

 

Total income tax expense

 

 

9,600

 

 

 

15,537

 

Consolidated net earnings

 

 

220,689

 

 

 

222,805

 

Less net earnings attributable to noncontrolling interests

 

 

10,137

 

 

 

6,841

 

Net earnings attributable to controlling interests

 

 

210,552

 

 

 

215,964

 

Less preferred unit distributions

 

 

1,674

 

 

 

1,689

 

Net earnings attributable to common unitholders

 

$

208,878

 

 

$

214,275

 

 

 

 

 

 

 

 

 

 

Weighted average common units outstanding – Basic

 

 

534,685

 

 

 

531,070

 

Weighted average common units outstanding – Diluted

 

 

550,010

 

 

 

543,562

 

 

 

 

 

 

 

 

 

 

Net earnings per unit attributable to common unitholders – Basic

 

$

0.38

 

 

$

0.40

 

 

 

 

 

 

 

 

 

 

Net earnings per unit attributable to common unitholders – Diluted

 

$

0.38

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

Distributions per common unit

 

$

0.44

 

 

$

0.42

 

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

 

6

 


 

PROLOGIS, L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2017

 

 

2016

 

Consolidated net earnings

 

$

220,689

 

 

$

222,805

 

Other comprehensive income (loss):