Prologis, Inc.: Prologis Reports Fourth Quarter and Full Year 2024 Results

Strong uptick in leasing activity post-election

SAN FRANCISCO, Jan. 21, 2025 /PRNewswire/ -- Prologis, Inc. (NYSE: PLD), the global leader in logistics real estate, today announced the following results for the quarter and fiscal year ended December 31, 2024, as compared to the corresponding periods in 2023:

4Q24

• Net earnings per diluted share was $1.37 and increased 101.5%, due to higher gains and promotes.
• Core funds from operations (Core FFO)* per diluted share was $1.50 and increased 19.0%.
• Core FFO, excluding Net Promote Income (Expense)* per diluted share was $1.42 and increased 10.1%.

FY 2024

• Net earnings per diluted share was $4.01 and increased 21.9%.
• Core FFO* per diluted share was $5.56 and decreased 0.9%.
• Core FFO, excluding Net Promote Income (Expense)* per diluted share was $5.53 and increased 8.4%.

"We closed out 2024 with solid results. It was capped off with the sale of our Elk Grove data center - a turnkey facility under development - that led to significant value creation and demonstrated the end-to-end capabilities of our platform," said Dan Letter, president of Prologis. "Looking ahead, our team is focused on anticipating customer needs and staying ahead of market trends to deliver on our 2025 plan."

"Post-election leasing activity has been strong, and our ongoing conversations with customers support our expectation that the market is nearing an inflection point," said Hamid R. Moghadam, co-founder and CEO of Prologis. "Meanwhile, our platform is uniquely positioned to seize the opportunities created by favorable trends in our data center and energy businesses. The long-term outlook for Prologis is bright."

OPERATING PERFORMANCE

Owned & Managed	4Q24
Average Occupancy	95.6 %
Leases Commenced (Operating and Development Portfolio)	46.5MSF
Retention	78.4 %
Prologis Share	4Q24
Average Occupancy	95.8 %
Cash Same Store NOI*	6.7 %
Net Effective Rent Change	66.3 %
Cash Rent Change	40.1 %

DEPLOYMENT ACTIVITY

Prologis Share	4Q24	FY 2024
Acquisitions	$384M	$1,917M
Weighted avg stabilized cap rate (excluding other real estate)	5.9 %	5.1 %
Development Stabilizations	$827M	$4,168M
Estimated weighted avg yield	7.0 %	6.1 %
Estimated weighted avg margin	36.1 %	18.5 %
Estimated value creation	$298M	$773M
% Build-to-suit	54.0 %	32.8 %
Development Starts	$375M	$1,339M
Estimated weighted avg yield	5.9 %	7.3 %
Estimated weighted avg margin	17.5 %	26.9 %
Estimated value creation	$65M	$366M
% Build-to-suit	37.3 %	33.4 %
Total Dispositions and Contributions	$1,955M	$3,985M
Weighted avg stabilized cap rate (excluding land and other real estate)	4.4 %	4.8 %

BALANCE SHEET STRENGTH & LIQUIDITY
During the quarter, the company:

• Issued, together with its co-investment ventures, an aggregate of $1.5 billion of debt at a weighted average interest rate of 3.5% and a weighted average term of 7.1 years.

As of quarter-end:

• Total available liquidity was approximately $7.4 billion.
• Debt-to-EBITDA was 4.6x and debt as a percentage of total market capitalization was 25.6%.
• The weighted average interest rate on the company's share of total debt was 3.2%, with a weighted average term of 9.0 years.
• Forecasted earnings for 2025, 2026 and 2027 are 99%, 98% and 96%, respectively, in USD or hedged through derivative contracts and 96.0% of Prologis' equity was in USD.

2025 GUIDANCE
Prologis' guidance for net earnings is included in the table below as well as guidance for Core FFO*, which are reconciled in our supplemental information.

2025 GUIDANCE
Earnings (per diluted share)
Net earnings attributable to common stockholders	$3.45 to $3.70
Core FFO attributable to common stockholders/unitholders*	$5.65 to $5.81
Core FFO attributable to common stockholders/unitholders, excluding Net Promote Income (Expense)*	$5.70 to $5.86
Operations - Prologis Share
Average occupancy	94.50% to 95.50%
Cash Same Store NOI*	4.00% to 5.00%
Net Effective Same Store NOI*	3.50% to 4.50%
Strategic Capital (in millions)
Strategic Capital revenue, excluding promote revenue	$560 to $580
Net Promote Income (Expense)1	$(50)
G&A (in millions)
General & administrative expenses	$440 to $460
Capital Deployment - Prologis Share (in millions)
Development stabilizations	$2,250 to $2,750
Development starts	$2,250 to $2,750
Acquisitions	$750 to $1,250
Contributions	$1,500 to $2,000
Dispositions	$1,000 to $1,500
Realized development gains	$450 to $600

1.	Net promote expense relates to amortization of stock compensation issued to employees related to promote income recognized in prior periods.
*	This is a non-GAAP financial measure. See the Notes and Definitions in our supplemental information for further explanation and a reconciliation to the most directly comparable GAAP measure.

The earnings guidance described above includes potential gains recognized from real estate transactions but excludes any future or potential foreign currency or derivative gains or losses as our guidance assumes constant foreign currency rates. In reconciling from net earnings to Core FFO*, Prologis makes certain adjustments, including but not limited to real estate depreciation and amortization expense, gains (losses) recognized from real estate transactions and early extinguishment of debt, impairment charges, deferred taxes and unrealized gains or losses on foreign currency or derivative activity. The difference between the company's Core FFO* and net earnings guidance relates predominantly to these items. Please refer to our quarterly Supplemental Information, which is available on our Investor Relations website at https://ir.prologis.com and on the SEC's website at www.sec.gov for a definition of Core FFO* and other non-GAAP measures used by Prologis, along with reconciliations of these items to the closest GAAP measure for our results and guidance.

January 21, 2025, CALL DETAILS
The call will take place on Tuesday, January 21, 2025, at 9:00 a.m. PT / 12:00 p.m. ET. To access a live broadcast of the call, please dial [phone] (toll-free from the United States and Canada) or [phone] (from all other countries). A live webcast can be accessed from the Investor Relations section of www.prologis.com.

A telephonic replay will be available January 21 - February 4 at [phone] (from the United States and Canada) or [phone] (from all other countries) using access code 13750493. The webcast replay will be posted in the Investor Relations section of www.prologis.com under "Events & Presentations."

ABOUT PROLOGIS
Prologis, Inc. is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. At December 31, 2024, the company owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 1.3 billion square feet (120 million square meters) in 20 countries. Prologis leases modern logistics facilities to a diverse base of approximately 6,500 customers principally across two major categories: business-to-business and retail/online fulfillment.

FORWARD-LOOKING STATEMENTS
The statements in this document that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate as well as management's beliefs and assumptions. Such statements involve uncertainties that could significantly impact our financial results. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," and "estimates" including variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future-including statements relating to rent and occupancy growth, acquisition and development activity, contribution and disposition activity, general conditions in the geographic areas where we operate, expectations regarding new lines of business, our debt, capital structure and financial position, our ability to earn revenues from co-investment ventures, form new co-investment ventures and the availability of capital in existing or new co-investment ventures-are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained and, therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) international, national, regional and local economic and political climates and conditions; (ii) changes in global financial markets, interest rates and foreign currency exchange rates; (iii) increased or unanticipated competition for our properties; (iv) risks associated with acquisitions, dispositions and development of properties, including the integration of the operations of significant real estate portfolios; (v) maintenance of Real Estate Investment Trust status, tax structuring and changes in income tax laws and rates; (vi) availability of financing and capital, the levels of debt that we maintain and our credit ratings; (vii) risks related to our investments in our co-investment ventures, including our ability to establish new co-investment ventures; (viii) risks of doing business internationally, including currency risks; (ix) environmental uncertainties, including risks of natural disasters; (x) risks related to global pandemics; and (xi) those additional factors discussed in reports filed with the Securities and Exchange Commission by us under the heading "Risk Factors." We undertake no duty to update any forward-looking statements appearing in this document except as may be required by law.

dollars in millions, except per share/unit data				Three Months Ended December 31,			Twelve Months Ended December 31,
				2024	2023		2024	2023
Rental and other revenues				$ 1,947	$ 1,759		$ 7,530	$ 6,823
Strategic capital revenues				254	130		672	1,200
	Total revenues			2,201	1,889		8,202	8,023
Net earnings attributable to common stockholders				1,277	629		3,726	3,053
Core FFO attributable to common stockholders/unitholders*				1,435	1,202		5,305	5,334
AFFO attributable to common stockholders/unitholders*				1,303	1,034		4,422	4,711
Adjusted EBITDA attributable to common stockholders/unitholders*				2,112	1,724		7,162	7,048
Estimated value creation from development stabilizations - Prologis Share				298	276		773	917
Common stock dividends and common limited partnership unit distributions				917	830		3,667	3,315
Per common share - diluted:
	Net earnings attributable to common stockholders			$ 1.37	$ 0.68		$ 4.01	$ 3.29
	Core FFO attributable to common stockholders/unitholders*			1.50	1.26		5.56	5.61
	Core FFO attributable to common stockholders/unitholders, excluding Net Promote Income (Expense)*			1.42	1.29		5.53	5.10
	Business line reporting:
		Real estate*		1.34	1.23		5.25	4.84
		Strategic capital*		0.16	0.03		0.31	0.77
		Core FFO attributable to common stockholders/unitholders*		1.50	1.26		5.56	5.61
		Realized development gains, net of taxes*		0.29	0.18		0.45	0.44
Dividends and distributions per common share/unit				0.96	0.87		3.84	3.48
*This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation.

in thousands					December 31, 2024		September 30, 2024		December 31, 2023
Assets:
	Investments in real estate properties:
		Operating properties			$ 78,279,353		$ 79,178,259		$ 75,435,497
		Development portfolio			2,829,613		3,143,543		4,367,455
		Land			4,453,522		4,395,022		3,775,553
		Other real estate investments			5,683,688		5,376,749		5,088,070
					91,246,176		92,093,573		88,666,575
		Less accumulated depreciation			12,758,159		12,332,799		10,931,485
				Net investments in real estate properties	78,488,017		79,760,774		77,735,090
	Investments in and advances to unconsolidated entities				10,079,448		10,092,765		9,543,970
	Assets held for sale or contribution				248,511		325,987		461,657
				Net investments in real estate	88,815,976		90,179,526		87,740,717
	Cash and cash equivalents				1,318,591		780,871		530,388
	Other assets				5,194,342		4,944,799		4,749,735
				Total assets	$ 95,328,909		$ 95,905,196		$ 93,020,840
Liabilities and Equity:
	Liabilities:
		Debt			$ 30,879,263		$ 32,289,832		$ 29,000,501
		Accounts payable, accrued expenses and other liabilities			5,832,876		5,951,272		6,196,619
				Total liabilities	36,712,139		38,241,104		35,197,120
	Equity:
		Stockholders' equity			53,951,138		53,071,769		53,181,724
		Noncontrolling interests			3,323,047		3,284,845		3,324,275
		Noncontrolling interests - limited partnership unitholders			1,342,585		1,307,478		1,317,721
				Total equity	58,616,770		57,664,092		57,823,720
				Total liabilities and equity	$ 95,328,909		$ 95,905,196		$ 93,020,840

				Three Months Ended			Twelve Months Ended
				December 31,			December 31,
in thousands, except per share amounts				2024	2023		2024	2023
Revenues:
	Rental			$ 1,937,507	$ 1,755,959		$ 7,514,705	$ 6,818,542
	Strategic capital			253,386	129,648		671,907	1,200,232
	Development management and other			9,753	3,640		14,998	4,695
		Total revenues		2,200,646	1,889,247		8,201,610	8,023,469
Expenses:
	Rental			438,468	408,225		1,765,385	1,624,793
	Strategic capital			81,167	78,858		291,856	385,542
	General and administrative			102,724	98,309		418,765	390,406
	Depreciation and amortization			656,444	638,346		2,580,519	2,484,891
	Other			7,673	21,668		47,044	53,354
		Total expenses		1,286,476	1,245,406		5,103,569	4,938,986
Operating income before gains on real estate transactions, net				$ 914,170	$ 643,841		$ 3,098,041	$ 3,084,483
	Gains on dispositions of development properties and land, net			254,256	188,363		413,743	462,270
	Gains on other dispositions of investments in real estate, net			252,830	2,647		904,136	161,039
Operating income				$ 1,421,256	$ 834,851		$ 4,415,920	$ 3,707,792
Other income (expense):
	Earnings from unconsolidated entities, net			94,065	89,441		353,623	307,227
	Interest expense			(232,232)	(174,450)		(863,932)	(641,332)
	Foreign currency, derivative and other gains (losses) and other income (expense), net			145,957	(15,461)		208,731	87,221
	Gains (losses) on early extinguishment of debt, net			-	-		536	3,275
		Total other income (expense)		7,790	(100,470)		(301,042)	(243,609)
Earnings before income taxes				1,429,046	734,381		4,114,878	3,464,183
	Current income tax benefit (expense)			(67,910)	(50,625)		(145,782)	(193,330)
	Deferred income tax benefit (expense)			(18,960)	(7,872)		(21,161)	(17,708)
Consolidated net earnings				1,342,176	675,884		3,947,935	3,253,145
Net earnings attributable to noncontrolling interests				(31,354)	(28,824)		(123,192)	(116,657)
Net earnings attributable to noncontrolling interests - limited partnership units				(31,969)	(16,124)		(93,108)	(77,274)
Net earnings attributable to controlling interests				1,278,853	630,936		3,731,635	3,059,214
Preferred stock dividends				(1,474)	(1,460)		(5,881)	(5,841)
Net earnings attributable to common stockholders				$ 1,277,379	$ 629,476		$ 3,725,754	$ 3,053,373
Weighted average common shares outstanding - Diluted				954,080	952,399		953,590	951,791
Net earnings per share attributable to common stockholders - Diluted				$ 1.37	$ 0.68		$ 4.01	$ 3.29

				Three Months Ended			Twelve Months Ended
				December 31,			December 31,
in thousands				2024	2023		2024	2023
Net earnings attributable to common stockholders				$ 1,277,379	$ 629,476		$ 3,725,754	$ 3,053,373
Add (deduct) NAREIT defined adjustments:
	Real estate related depreciation and amortization			633,940	622,829		2,504,001	2,433,610
	Gains on other dispositions of investments in real estate, net of taxes (excluding development properties and land)			(248,705)	(2,232)		(899,270)	(157,940)
	Adjustments related to noncontrolling interests			58	(14,006)		(31,334)	(38,246)
	Our proportionate share of adjustments related to unconsolidated entities			162,573	112,964		495,448	455,355
NAREIT defined FFO attributable to common stockholders/unitholders*				$ 1,825,245	$ 1,349,031		$ 5,794,599	$ 5,746,152
Add (deduct) our modified adjustments:
	Unrealized foreign currency, derivative and other losses (gains), net			(129,109)	43,646		(68,095)	17,619
	Deferred income tax expense (benefit)			18,960	7,872		21,161	17,708
	Current income tax benefit on dispositions related to acquired tax liabilities			-	(11,003)		-	(11,003)
	Adjustments related to noncontrolling interests			-	403		-	403
	Our proportionate share of adjustments related to unconsolidated entities			(3,379)	(5,129)		(7,038)	(11,224)
FFO, as modified by Prologis attributable to common stockholders/ unitholders*				$ 1,711,717	$ 1,384,820		$ 5,740,627	$ 5,759,655
Add (deduct) Core FFO defined adjustments:
	Gains on dispositions of development properties and land, net			(254,256)	(188,363)		(413,743)	(462,270)
	Current income tax expense on dispositions			18,311	12,515		24,876	36,125
	Losses (gains) on early extinguishment of debt, net			-	-		(536)	(3,275)
	Adjustments related to noncontrolling interests			6,166	-		6,244	9,359
	Our proportionate share of adjustments related to unconsolidated entities			(47,276)	(7,124)		(52,529)	(5,344)
Core FFO attributable to common stockholders/unitholders*				$ 1,434,662	$ 1,201,848		$ 5,304,939	$ 5,334,250
Add (deduct) AFFO defined adjustments:
	Gains on dispositions of development properties and land, net			254,256	188,363		413,743	462,270
	Current income tax expense on dispositions			(18,311)	(12,515)		(24,876)	(36,125)
	Straight-lined rents and amortization of lease intangibles			(174,317)	(147,558)		(644,606)	(625,356)
	Property improvements			(137,613)	(146,522)		(386,481)	(303,042)
	Turnover costs			(152,439)	(117,803)		(499,927)	(388,814)
	Amortization of debt discount, financing costs and management contracts, net			20,695	19,382		80,028	76,294
	Stock compensation amortization expense			67,445	57,626		231,747	267,648
	Adjustments related to noncontrolling interests			14,558	24,468		53,432	48,049
	Our proportionate share of adjustments related to unconsolidated entities			(5,681)	(33,746)		(106,433)	(124,544)
AFFO attributable to common stockholders/unitholders*				$ 1,303,255	$ 1,033,543		$ 4,421,566	$ 4,710,630
*This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation.

				Three Months Ended			Three Months Ended
				December 31,			December 31,
in thousands				2024	2023		2024	2023
Net earnings attributable to common stockholders				$ 1,277,379	$ 629,476		$ 3,725,754	$ 3,053,373
		Gains on other dispositions of investments in real estate, net (excluding development properties and land)		(252,830)	(2,647)		(904,136)	(161,039)
		Depreciation and amortization expense		656,444	638,346		2,580,519	2,484,891
		Interest charges		214,550	164,239		804,541	599,283
		Current and deferred income tax expense, net		86,870	58,497		166,943	211,038
		Net earnings attributable to noncontrolling interests - limited partnership units		31,969	16,124		93,108	77,274
		Pro forma adjustments		(16,970)	6,498		(4,043)	39,904
		Preferred stock dividends		1,474	1,460		5,881	5,841
		Unrealized foreign currency, derivative and other losses (gains), net		(129,109)	43,646		(68,095)	17,619
		Stock compensation amortization expense		67,445	57,626		231,747	267,648
		Losses (gains) on early extinguishment of debt, net		-	-		(536)	(3,275)
		Adjustments related to noncontrolling interests		(32,590)	(30,020)		(126,308)	(118,534)
		Our proportionate share of adjustments related to unconsolidated entities		206,904	140,806		656,825	574,310
Adjusted EBITDA attributable to common stockholders/unitholders*				$ 2,111,536	$ 1,724,051		$ 7,162,200	$ 7,048,333
		*This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation.

Adjusted EBITDA. We use Adjusted EBITDA attributable to common stockholders/unitholders ("Adjusted EBITDA"), a non-GAAP financial measure, as a measure of our operating performance. The most directly comparable GAAP measure to Adjusted EBITDA is net earnings.

We calculate Adjusted EBITDA by beginning with consolidated net earnings attributable to common stockholders and removing the effect of: interest charges, income taxes, depreciation and amortization, impairment charges, gains or losses from the disposition of investments in real estate (excluding development properties and land), gains from the revaluation of equity investments upon acquisition of a controlling interest, gains or losses on early extinguishment of debt and derivative contracts (including cash charges), similar adjustments we make to our FFO measures (see definition below), and other items, such as, amortization of stock based compensation and unrealized gains or losses on foreign currency and derivatives. We also include a pro forma adjustment to reflect a full period of NOI on the operating properties we acquire or stabilize during the quarter and to remove NOI on properties we dispose of during the quarter, assuming all transactions occurred at the beginning of the quarter. For properties we contribute, we make an adjustment to reflect NOI at the new ownership percentage for the full quarter.

We believe Adjusted EBITDA provides investors relevant and useful information because it permits investors to view our operating performance, analyze our ability to meet interest payment obligations and make quarterly preferred stock dividends on an unleveraged basis before the effects of income tax, depreciation and amortization expense, gains and losses on the disposition of non-development properties and other items (outlined above), that affect comparability. While all items are not infrequent or unusual in nature, these items may result from market fluctuations that can have inconsistent effects on our results of operations. The economics underlying these items reflect market and financing conditions in the short-term but can obscure our performance and the value of our long-term investment decisions and strategies.

We calculate our Adjusted EBITDA, based on our proportionate ownership share of both our unconsolidated and consolidated ventures. We reflect our share of our Adjusted EBITDA measures for unconsolidated ventures by applying our average ownership percentage for the period to the applicable adjusting items on an entity by entity basis. We reflect our share for consolidated ventures in which we do not own 100% of the equity by adjusting our Adjusted EBITDA measures to remove the noncontrolling interests share of the applicable adjusting items based on our average ownership percentage for the applicable periods.

While we believe Adjusted EBITDA is an important measure, it should not be used alone because it excludes significant components of net earnings, such as our historical cash expenditures or future cash requirements for working capital, capital expenditures, distribution requirements, contractual commitments or interest and principal payments on our outstanding debt and is therefore limited as an analytical tool.

Our computation of Adjusted EBITDA may not be comparable to EBITDA reported by other companies in both the real estate industry and other industries. We compensate for the limitations of Adjusted EBITDA by providing investors with financial statements prepared according to GAAP, along with this detailed discussion of Adjusted EBITDA and a reconciliation to Adjusted EBITDA from consolidated net earnings attributable to common stockholders.

Business Line Reporting is a non-GAAP financial measure. Core FFO and development gains are generated by our three lines of business: (i) real estate operations; (ii) strategic capital; and (iii) development. The real estate operations line of business represents total Prologis Core FFO, less the amount allocated to the strategic capital line of business. The amount of Core FFO allocated to the strategic capital line of business represents the third-party share of asset management fees and transactional fees that we earn from our consolidated and unconsolidated co-investment ventures less costs directly associated with our strategic capital group and Net Promote Income (Expense). Realized development gains include our share of gains on dispositions of development properties and land, net of taxes. To calculate the per share amount, the amount generated by each line of business is divided by the weighted average diluted common shares outstanding used in our Core FFO per share calculation. Management believes evaluating our results by line of business is a useful supplemental measure of our operating performance because it helps the investing public compare the operating performance of Prologis' respective businesses to other companies' comparable businesses. Prologis' computation of FFO by line of business may not be comparable to that reported by other real estate companies as they may use different methodologies in computing such measures.

Calculation of Per Share Amounts

	Three Months Ended			Twelve Months Ended
	Dec. 31,			Dec. 31,
in thousands, except per share amount	2024	2023		2024	2023
Net earnings
Net earnings attributable to common stockholders	$ 1,277,379	$ 629,476		$ 3,725,754	$ 3,053,373
Noncontrolling interest attributable to exchangeable limited partnership units	32,201	16,191		94,052	77,806
Adjusted net earnings attributable to common stockholders - Diluted	$ 1,309,580	$ 645,667		$ 3,819,806	$ 3,131,179
Weighted average common shares outstanding - Basic	926,637	924,605		926,172	924,351
Incremental weighted average effect on exchange of limited partnership units	23,496	23,687		23,445	23,693
Incremental weighted average effect of equity awards	3,947	4,107		3,973	3,747
Weighted average common shares outstanding - Diluted	954,080	952,399		953,590	951,791
Net earnings per share - Basic	$ 1.38	$ 0.68		$ 4.02	$ 3.30
Net earnings per share - Diluted	$ 1.37	$ 0.68		$ 4.01	$ 3.29
	Three Months Ended			Twelve Months Ended
	Dec. 31,			Dec. 31,
in thousands, except per share amount	2024	2023		2024	2023
Core FFO
Core FFO attributable to common stockholders/unitholders	$ 1,434,662	$ 1,201,848		$ 5,304,939	$ 5,334,250
Noncontrolling interest attributable to exchangeable limited partnership units	314	271		1,177	862
Core FFO attributable to common stockholders /unitholders - Diluted	$ 1,434,976	$ 1,202,119		$ 5,306,116	$ 5,335,112
Net Promote Income (Expense)	82,674	(26,401)		31,714	478,944
Core FFO attributable to common stockholders /unitholders, excluding Net Promote Income (Expense) - Diluted	$ 1,352,302	$ 1,228,520		$ 5,274,402	$ 4,856,168
Weighted average common shares outstanding - Basic	926,637	924,605		926,172	924,351
Incremental weighted average effect on exchange of limited partnership units	23,496	23,846		23,445	23,693
Incremental weighted average effect of equity awards	3,947	4,107		3,973	3,747
Weighted average common shares outstanding - Diluted	954,080	952,558		953,590	951,791
Core FFO per share - Diluted	$ 1.50	$ 1.26		$ 5.56	$ 5.61
Core FFO per share, excluding Net Promote Income (Expense) - Diluted	$ 1.42	$ 1.29		$ 5.53	$ 5.10

Development Portfolio includes industrial and non-industrial properties, yards and parking lots that are under development and properties that are developed but have not met Stabilization. At December 31, 2024, total TEI for yards, parking lots and non-industrial assets was $1.2 billion and $1.1 billion on an Owned and Managed and Prologis Share basis, respectively. We do not disclose square footage for yards and parking lots.

Estimated Value Creation represents the value that we expect to create through our development and leasing activities. We calculate Estimated Value Creation by estimating the Stabilized NOI that the property will generate and applying a stabilized capitalization rate applicable to that property. Estimated Value Creation is calculated as the amount by which the value exceeds our TEI, including closing costs and taxes, if any, and does not include any fees or promotes we may earn.

Estimated Weighted Average Margin is calculated on development properties as Estimated Value Creation, less estimated closing costs and taxes, if any, on properties expected to be sold or contributed, divided by TEI.

Estimated Weighted Average Stabilized Yield is calculated on the properties in the Development Portfolio as Stabilized NOI divided by TEI. The yields on a Prologis Share basis were as follows:

	Pre-Stabilized Developments	2025 Expected Completion	2026 and Thereafter Expected Completion	Total Development Portfolio
U.S.	6.7 %	7.0 %	6.8 %	6.9 %
Other Americas	6.9 %	8.4 %	7.6 %	7.9 %
Europe	6.5 %	6.0 %	5.3 %	6.0 %
Asia	2.7 %	5.2 %	5.4 %	5.3 %
Total	6.7 %	6.9 %	6.3 %	6.7 %

FFO, as modified by Prologis attributable to common stockholders/unitholders ("FFO, as modified by Prologis"); Core FFO attributable to common stockholders/unitholders ("Core FFO"); AFFO attributable to common stockholders/unitholders ("AFFO"); (collectively referred to as "FFO"). FFO is a non-GAAP financial measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net earnings. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as earnings computed under GAAP to exclude historical cost depreciation and gains and losses from sales net of any related tax, along with impairment charges, of previously depreciated properties. We also exclude the gains on revaluation of equity investments upon acquisition of a controlling interest and the gain recognized from a partial sale of our investment, as these are similar to gains from the sales of previously depreciated properties. We exclude similar adjustments from our unconsolidated entities and the third parties' share of our consolidated ventures.

Our FFO Measures

Our FFO measures begin with NARElT's definition and we make certain adjustments to reflect our business and the way that management plans and executes our business strategy. While not infrequent or unusual, the additional items we adjust for in calculating FFO, as modified by Prologis, Core FFO and AFFO, as defined below, are subject to significant fluctuations from period to period. Although these items may have a material impact on our operations and are reflected in our financial statements, the removal of the effects of these items allows us to better understand the core operating performance of our properties over the long term. These items have both positive and negative short-term effects on our results of operations in inconsistent and unpredictable directions that are not relevant to our long-term outlook.

We calculate our FFO measures, as defined below, based on our proportionate ownership share of both our unconsolidated entities and consolidated ventures. We reflect our share of our FFO measures for unconsolidated entities by applying our average ownership percentage for the period to the applicable adjusting items on an entity-by-entity basis. We reflect our share for consolidated ventures in which we do not own 100% of the equity by adjusting our FFO measures to remove the noncontrolling interests share of the applicable adjusting items based on our average ownership percentage for the applicable periods.

These FFO measures are used by management as supplemental financial measures of operating performance and we believe that it is important that stockholders, potential investors and financial analysts understand the measures management uses. We do not use our FFO measures as, nor should they be considered to be, alternatives to net earnings computed under GAAP, as indicators of our operating performance, as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs.

We analyze our operating performance principally by the rental revenues of our real estate and the revenues from our strategic capital business, net of operating, administrative and financing expenses. This income stream is not directly impacted by fluctuations in the market value of our investments in real estate or debt securities.

FFO, as modified by Prologis

To arrive at FFO, as modified by Prologis, we adjust the NAREIT defined FFO measure to exclude the impact of foreign currency related items and deferred tax, specifically:

(i)	deferred income tax benefits and deferred income tax expenses recognized by our subsidiaries;
(ii)	current income tax expense related to acquired tax liabilities that were recorded as deferred tax liabilities in an acquisition, to the extent the expense is offset with a deferred income tax benefit in earnings that is excluded from our defined FFO measure;
(iii)	foreign currency exchange gains and losses resulting from (a) debt transactions between us and our foreign entities; (b) third-party debt that is used to hedge our investment in foreign entities; (c) derivative financial instruments related to any such debt transactions; and (d) mark-to-market adjustments associated with derivative and other financial instruments.

We use FFO, as modified by Prologis, so that management, analysts and investors are able to evaluate our performance against other REITs that do not have similar operations or operations in jurisdictions outside the U.S.

Core FFO

In addition to FFO, as modified by Prologis, we also use Core FFO. To arrive at Core FFO, we adjust FFO, as modified by Prologis, to exclude the following recurring and nonrecurring items that we recognize directly in FFO, as modified by Prologis:

(i)	gains or losses from the disposition of land and development properties that were developed with the intent to contribute or sell;
(ii)	income tax expense related to the sale of investments in real estate;
(iii)	impairment charges recognized related to our investments in real estate generally as a result of our change in intent to contribute or sell these properties; and
(iv)	gains or losses from the early extinguishment of debt and redemption and repurchase of preferred stock.

We use Core FFO, including by segment and region, to: (i) assess our operating performance as compared to other real estate companies; (ii) evaluate our performance and the performance of our properties in comparison with expected results and results of previous periods; (iii) evaluate the performance of our management; (iv) budget and forecast future results to assist in the allocation of resources; (v) provide guidance to the financial markets to understand our expected operating performance; and (vi) evaluate how a specific potential investment will impact our future results.

AFFO

To arrive at AFFO, we adjust Core FFO to include realized gains from the disposition of land and development properties, net of current tax expense, and recurring capital expenditures and exclude the following items that we recognize directly in Core FFO:

(i)	straight-line rents;
(ii)	amortization of above- and below-market lease intangibles;
(iii)	amortization of management contracts;
(iv)	amortization of debt premiums and discounts and financing costs, net of amounts capitalized, and;
(v)	stock compensation amortization expense.

We use AFFO to (i) assess our operating performance as compared to other real estate companies; (ii) evaluate our performance and the performance of our properties in comparison with expected results and results of previous periods; (iii) evaluate the performance of our management; (iv) budget and forecast future results to assist in the allocation of resources; and (v) evaluate how a specific potential investment will impact our future results.

Limitations on the use of our FFO measures

While we believe our modified FFO measures are important supplemental measures, neither NAREIT's nor our measures of FFO should be used alone because they exclude significant economic components of net earnings computed under GAAP and are, therefore, limited as an analytical tool. Accordingly, these are only a few of the many measures we use when analyzing our business. Some of the limitations are:

• The current income tax expenses that are excluded from our modified FFO measures represent the taxes that are payable.
• Depreciation and amortization of real estate assets are economic costs that are excluded from FFO. FFO is limited, as it does not reflect the cash requirements that may be necessary for future replacements of the real estate assets. Furthermore, the amortization of capital expenditures and leasing costs necessary to maintain the operating performance of logistics facilities are not reflected in FFO.
• Gains or losses from property dispositions and impairment charges related to expected dispositions represent changes in value of the properties. By excluding these gains and losses, FFO does not capture realized changes in the value of disposed properties arising from changes in market conditions.
• The deferred income tax benefits and expenses that are excluded from our modified FFO measures result from the creation of a deferred income tax asset or liability that may have to be settled at some future point. Our modified FFO measures do not currently reflect any income or expense that may result from such settlement.
• The foreign currency exchange gains and losses that are excluded from our modified FFO measures are generally recognized based on movements in foreign currency exchange rates through a specific point in time. The ultimate settlement of our foreign currency-denominated net assets is indefinite as to timing and amount. Our FFO measures are limited in that they do not reflect the current period changes in these net assets that result from periodic foreign currency exchange rate movements.
• The gains and losses on extinguishment of debt or preferred stock that we exclude from our Core FFO, may provide a benefit or cost to us as we may be settling our obligation at less or more than our future obligation.

We compensate for these limitations by using our FFO measures only in conjunction with net earnings computed under GAAP when making our decisions. This information should be read with our complete Consolidated Financial Statements prepared under GAAP. To assist investors in compensating for these limitations, we reconcile our modified FFO measures to our net earnings computed under GAAP.

Guidance. The following is a reconciliation of our annual guided Net Earnings per share to our guided Core FFO per share:

	Low			High
Net earnings attributable to common stockholders (a)	$	3.45		$	3.70
Our share of:
Depreciation and amortization		3.07			3.12
Net gains on real estate transactions, net of taxes		(0.87)			(1.01)
Unrealized foreign currency losses (gains), losses (gains) on early extinguishment of debt and other, net		0.00			0.00
Core FFO attributable to common stockholders/unitholders	$	5.65		$	5.81
Add (deduct): Net Promote Expense (Income)		0.05			0.05
Core FFO attributable to common stockholders/unitholders, excluding Net Promote Income (Expense)	$	5.70		$	5.86

(a)	Earnings guidance includes potential future gains recognized from real estate transactions, but excludes future foreign currency or derivative gains or losses as these items are difficult to predict.

Market Capitalization equals Market Equity, less liquidation preference of the preferred shares/units, plus our share of total debt.

Net Promote Income (Expense) is promote revenue earned from third-party investors during the period, net of related cash and stock compensation expenses, and taxes and foreign currency derivative gains and losses, if applicable.

Operating Portfolio represents industrial properties in our Owned and Managed portfolio that have reached Stabilization. Assets held for sale, Non-Strategic Assets and non-industrial assets are excluded from the portfolio. Prologis Share of NOI excludes termination fees and adjustments and includes NOI for the properties contributed to or acquired from co-investment ventures at our actual share prior to and subsequent to change in ownership. The U.S. markets not presented consist of Austin, Charlotte, Columbus, Denver, Louisville, Portland, Raleigh-Durham, Reno, San Antonio, Savannah and Tampa. The European countries not presented consist of Belgium, Czech Republic, Hungary, Italy, Poland, Slovakia, Spain and Sweden.

Owned and Managed represents the consolidated properties as well as properties owned by our unconsolidated co-investment ventures, which we manage.

Prologis Share represents our proportionate economic ownership of each entity, or property included in our total Owned and Managed portfolio, whether consolidated or unconsolidated.

Rent Change (Cash) represents the percentage change in starting rental rates per the lease agreement, on new and renewed leases, commenced during the period compared with the previous ending rental rates in that same space. This measure excludes any short-term leases of less than one-year, holdover payments, free rent periods and introductory (teaser rates) defined as 50% or less of the stabilized rate.

Rent Change (Net Effective) represents the percentage change in net effective rental rates (average rate over the lease term), on new and renewed leases, commenced during the period compared with the previous net effective rental rates in that same space. This measure excludes any short-term leases of less than one year and holdover payments.

Retention is the square footage of all leases commenced during the period that are rented by existing tenants divided by the square footage of all expiring leases during the reporting period. The square footage of tenants that default or buy-out prior to expiration of their lease and short-term leases of less than one year, are not included in the calculation.

Same Store. Our same store metrics are non-GAAP financial measures, which are commonly used in the real estate industry and expected from the financial community, on both a net effective and cash basis. We evaluate the performance of the operating properties we own and manage using a "same store" analysis because the population of properties in this analysis is consistent from period to period, which allows us and investors to analyze our ongoing business operations. We determine our same store metrics on property NOI, which is calculated as rental revenue less rental expense for the applicable properties in the same store population for both consolidated and unconsolidated properties based on our ownership interest, as further defined below.

We define our same store population for the three months ended December 31, 2024 as the properties in our Owned and Managed Operating Portfolio, including the property NOI for both consolidated properties and properties owned by the unconsolidated co-investment ventures at January 1, 2023 and owned throughout the same three-month period in both 2023 and 2024.

We believe the drivers of property NOI for the consolidated portfolio are generally the same for the properties owned by the ventures in which we invest and therefore we evaluate the same store metrics of the Owned and Managed portfolio based on Prologis' ownership in the properties ("Prologis Share").

The same store population excludes properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the period (January 1, 2023) and properties acquired or disposed of to third parties during the period. To derive an appropriate measure of period-to-period operating performance, we remove the effects of foreign currency exchange rate movements by using the reported period-end exchange rate to translate from local currency into the U.S. dollar, for both periods.

As non-GAAP financial measures, the same store metrics have certain limitations as an analytical tool and may vary among real estate companies. As a result, we provide a reconciliation of Rental Revenues less Rental Expenses ("Property NOI") (from our Consolidated Financial Statements prepared in accordance with U.S. GAAP) to our Same Store Property NOI measures, as follows:

		Three Months Ended
		Dec. 31,
dollars in thousands		2024	2023	Change (%)
Reconciliation of Consolidated Property NOI to Same Store Property NOI measures:
Rental revenues		$ 1,937,507	$ 1,755,959
Rental expenses		(438,468)	(408,225)
Consolidated Property NOI		$ 1,499,039	$ 1,347,734
Adjustments to derive same store results:
	Property NOI from consolidated properties not included in same store portfolio and other adjustments (a)	(263,141)	(173,966)
	Property NOI from unconsolidated co-investment ventures included in same store portfolio (a)(b)	806,993	753,521
	Third parties' share of Property NOI from properties included in same store portfolio (a)(b)	(641,212)	(612,336)
Prologis Share of Same Store Property NOI - Net Effective (b)		$ 1,401,679	$ 1,314,953	6.6 %
	Consolidated properties straight-line rent and fair value lease amortization included in the same store portfolio (c)	$ (116,016)	$ (113,440)
	Unconsolidated co-investment ventures straight-line rent and fair value lease amortization included in the same store portfolio (c)	(16,938)	(10,998)
	Third parties' share of straight-line rent and fair value lease amortization included in the same store portfolio (b)(c)	$ 10,792	$ 8,942
Prologis Share of Same Store Property NOI - Cash (b)(c)		$ 1,279,517	$ 1,199,457	6.7 %

(a)	We exclude properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the period and properties acquired or disposed of to third parties during the period. We also exclude net termination and renegotiation fees to allow us to evaluate the growth or decline in each property's rental revenues without regard to one-time items that are not indicative of the property's recurring operating performance. Net termination and renegotiation fees represent the gross fee negotiated to allow a customer to terminate or renegotiate their lease, offset by the write-off of the asset recorded due to the adjustment to straight-line rents over the lease term. Same Store Property NOI is adjusted to include an allocation of property management expenses for our consolidated properties based on the property management services provided to each property (generally, based on a percentage of revenues). On consolidation, these amounts are eliminated and the actual costs of providing property management and leasing services are recognized as part of our consolidated rental expense.
(b)	We include the Property NOI for the same store portfolio for both consolidated properties and properties owned by the co-investment ventures based on our investment in the underlying properties. In order to calculate our share of Same Store Property NOI from the co-investment ventures in which we own less than 100%, we use the co-investment ventures' underlying Property NOI for the same store portfolio and apply our ownership percentage at September 30, 2024 to the Property NOI for both periods, including the properties contributed during the period. We adjust the total Property NOI from the same store portfolio of the co-investment ventures by subtracting the third parties' share of both consolidated and unconsolidated co-investment ventures.
	During the periods presented, certain wholly-owned properties were contributed to a co-investment venture and are included in the same store portfolio. Neither our consolidated results nor those of the co-investment ventures, when viewed individually, would be comparable on a same store basis because of the changes in composition of the respective portfolios from period to period (e.g. the results of a contributed property are included in our consolidated results through the contribution date and in the results of the venture subsequent to the contribution date based on our ownership interest at the end of the period). As a result, only line items labeled "Prologis Share of Same Store Property NOI" are comparable period over period.
(c)	We further remove certain noncash items (straight-line rent and fair value lease amortization) included in the financial statements prepared in accordance with U.S. GAAP to reflect a Same Store Property NOI - Cash measure.
	We manage our business and compensate our executives based on the same store results of our Owned and Managed portfolio at 100% as we manage our portfolio on an ownership blind basis. We calculate those results by including 100% of the properties included in our same store portfolio.

Stabilization is defined as the earlier of when a property that was developed has been completed for one year, is contributed to a co-investment venture following completion or is 90% occupied. Upon Stabilization, a property is moved into our Operating Portfolio.

Total Expected Investment ("TEI") represents total estimated cost of development or expansion, including land, development and leasing costs. TEI is based on current projections and is subject to change.

Weighted Average Interest Rate is based on the effective rate, which includes the amortization of related premiums and discounts and finance costs.

Weighted Average Stabilized Capitalization ("Cap") Rate is calculated as Stabilized NOI divided by the Acquisition Price.

SOURCE Prologis, Inc.