NOTE 3. BUSINESS COMBINATIONS

KTR Capital Partners and Its Affiliates

In 2015, we acquired high quality real estate assets and the operating platform of KTR Capital Partners and its affiliates (“KTR”) through our consolidated co-investment venture, Prologis U.S. Logistics Venture (“USLV”). The portfolio consisted of 315 operating properties, aggregating 59.0 million square feet, 3.6 million square feet of properties under development and land parcels. The total purchase price was $5.0 billion, net of assumed debt of $735.2 million. The purchase price was funded through cash contributions of $2.6 billion from Prologis and $2.3 billion from our venture partner, and the issuance of 4.5 million common limited partnership units in the OP. We incurred $24.7 million of acquisition costs that are included in Other Expenses during 2015.

The following unaudited pro forma financial information presents our results as though the KTR transaction had been completed on January 1, 2015. The pro forma information does not reflect the actual results of operations had the transaction actually been completed on January 1, 2015, and it is not indicative of future operating results. The results for the year ended December 31, 2015, include approximately seven months of actual results for the transaction, the acquisition expenses, and five months of pro forma adjustments. Actual results in 2015 include rental revenues and rental expenses of the properties acquired of $235.7 million and $56.9 million, respectively, representing the period from acquisition through December 31, 2015.

The following amounts are in thousands, except per share amounts:

	2015
Total revenues	$	2,358,643
Net earnings attributable to common stockholders	$	866,753
Net earnings per share attributable to common stockholders – Basic	$	1.66
Net earnings per share attributable to common stockholders – Diluted	$	1.65

These results include certain adjustments, primarily: (i) decreased revenues from the amortization of the net assets from the acquired leases with net favorable rents relative to estimated market rents; (ii) increased depreciation and amortization expense resulting from the adjustment of real estate assets to estimated fair value and recognition of intangible assets related to in-place leases; and (iii) additional interest expense attributable to the debt issued to finance our cash portion of the acquisition offset by lower interest expense due to the accretion of the fair value adjustment of debt.