8-K
Prologis, Inc. (PLD)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 19, 2022
Prologis, Inc.
Prologis, L.P.
(Exact name of registrant as specified in charter)
| Maryland (Prologis, Inc.)<br>Delaware (Prologis, L.P.)<br>(State or other jurisdiction <br>of Incorporation) | 001-13545 (Prologis, Inc.)<br>001-14245 (Prologis, L.P.)<br>(Commission File Number) | 94-3281941 (Prologis, Inc.)<br>94-3285362 (Prologis, L.P.)<br>(I.R.S. Employer Identification<br>No.) |
|---|---|---|
| Pier 1, Bay 1, San Francisco, California | 94111 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrants’ Telephone Number, including Area Code: (415) 394-9000
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | |
|---|---|---|---|
| Prologis, Inc. | Common Stock, $0.01 par value | PLD | New York Stock Exchange |
| Prologis, L.P. | 3.000% Notes due 2026 | PLD/26 | New York Stock Exchange |
| Prologis, L.P. | 2.250% Notes due 2029 | PLD/29 | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth 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. ☐
| Item 2.02. | Results of Operations and Financial Condition (Prologis, Inc.) and |
|---|---|
| Item 7.01. | Regulation FD Disclosure (Prologis, Inc. and Prologis, L.P.). |
| --- | --- |
On October 19, 2022, Prologis, Inc., the general partner of Prologis, L.P., issued a press release announcing third quarter 2022 financial results. A copy of the supplemental information as well as the press release is furnished with this report as Exhibit 99.1 and Exhibit 99.2, respectively, and incorporated herein by reference.
The information in this report and the exhibits attached hereto is being furnished, not filed, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and pursuant to Items 2.02 and 7.01 of Form 8-K will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits |
| --- | --- |
| Exhibit No. | Description |
| --- | --- |
| 99.1 | Supplemental information, dated October 19, 2022. |
| --- | --- |
| 99.2 | Press release, dated October 19, 2022. |
| --- | --- |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| --- | --- |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
| PROLOGIS, INC. | ||
|---|---|---|
| October 19, 2022 | By: | /s/ Timothy D. Arndt |
| Name:Timothy D. Arndt | ||
| Title:Chief Financial Officer | ||
| PROLOGIS, L.P., | ||
| --- | --- | --- |
| October 19, 2022 | By: Prologis, Inc., its general partner | |
| By: | /s/ Timothy D. Arndt | |
| Name:Timothy D. Arndt | ||
| Title:Chief Financial Officer |
2
Prologis Supplemental Information Third Quarter 2022 Unaudited 11250 Poplar Avenue, Fontana, CA. Prologis completes the acquisition of Duke Realty on 10/3/2022.
Highlights 1 Company Profile 2 Company Performance 4 Prologis Leading Indicators and Proprietary Metrics 5 Guidance Financial Information 6 Consolidated Balance Sheets 7 Consolidated Statements of Income 8 Reconciliations of Net Earnings to FFO 9 Reconciliations of Net Earnings to Adjusted EBITDA Operations 10 Overview 11 Operating Metrics 13 Operating Portfolio 16 Customer Information Capital Deployment 17 Overview 18 Development Stabilizations 19 Development Starts 20 Development Portfolio 21 Third Party Acquisitions 22 Dispositions and Contributions 23 Land Portfolio Strategic Capital 25 Overview 26 Summary and Financial Highlights 27 Operating and Balance Sheet Information of the Unconsolidated Co-Investment Ventures 28 Non-GAAP Pro-Rata Financial Information Capitalization 29 Overview 30 Debt Components - Consolidated 31 Debt Components - Noncontrolling Interests and Unconsolidated Net Asset Value 32 Components Appendix, Notes and Definitions 35 Appendix A - Duke Realty Portfolio 36 Notes and Definitions Contents 3Q 2022 Supplemental
* This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. Prologis completed the acquisition of Duke Realty Corporation (“Duke Realty”) on October 3, 2022. Our third quarter results exclude this acquisition. Refer to Appendix A for information on the Duke Realty portfolio. NOI calculation based on Prologis Share of the Operating Portfolio. 3Q 2022 Supplemental Overview(A) Prologis, Inc., is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. As of September 30, 2022, 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 1.0 billion square feet (97 million square meters) in 19 countries. Prologis leases modern logistics facilities to a diverse base of approximately 5,800 customers principally across two major categories: business-to-business and retail/online fulfillment. 4,914 Buildings 1.0B Square Feet ~$33.2B Build Out of Land (TEI) U.S. 618M SF 82% of NOI*(B) Other Americas 77M SF 5% of NOI*(B) Europe 239M SF 10% of NOI*(B) Asia 107M SF 3% of NOI*(B)
Company Profile * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. 3Q 2022 Prologis Share of NOI of the Operating Portfolio annualized. 3Q 2022 third-party share of asset management fees annualized plus trailing twelve months third-party share of transactional fees and Net Promote Income. Prologis Share of trailing twelve month Estimated Value Creation from development stabilizations. Mexico is included in the U.S. as it is U.S. dollar functional. 3Q 2022 Supplemental Highlights 1 U.S.(D) Outside the U.S. U.S.(D) Outside the U.S. U.S.(D) Outside the U.S.
Company Performance * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. 3Q 2022 Supplemental Highlights Core FFO* AFFO* Estimated Value Creation from stabilizations - Prologis Share 2
Core FFO* in millions AFFO* in millions Estimated Value Creation from stabilizations - Prologis Share in millions Dividends and distributions in millions * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. Highlights Company Performance 3Q 2022 Supplemental 3
Lease Proposals in millions of square feet U.s. IBI activity index diffusion index, points New Lease negotiation Gestation in days U.S. space utilization * Please see our Notes and Definitions for further explanation. Highlights Prologis Leading Indicators and Proprietary Metrics* 3Q 2022 Supplemental Average 23 4 percent
Guidance (A) * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. Our guidance for 2022 is based on management’s current beliefs and assumptions about our business, the industry and the markets in which we operate. The earnings guidance described above gives effect to the acquisition of Duke Realty Corporation that closed on October 3, 2022. Please refer to “Forward-Looking Statements” and “Risk Factors” referred to in our reports filed with the Securities and Exchange Commission for more information. The difference between Core FFO and Net Earnings predominately relates to real estate depreciation and gains or losses on real estate transactions. See the Notes and Definitions for a reconciliation. 3Q 2022 Supplemental Highlights 5
Consolidated Balance Sheets 3Q 2022 Supplemental Financial Information 6
Consolidated Statements of Income 3Q 2022 Supplemental Financial Information 7
Reconciliations of Net Earnings to FFO* * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. 3Q 2022 Supplemental Financial Information 8
Reconciliations of Net Earnings to Adjusted EBITDA* * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. 3Q 2022 Supplemental Financial Information 9
Occupancy Customer Retention Same Store Change Over Prior Year - Prologis Share* Rent Change - Prologis Share * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. Operations Overview 3Q 2022 Supplemental Trailing four quarters – net effective 10
Operating Metrics – Owned and Managed Amounts exclusive of leases of less than one year, unless otherwise noted. 3Q 2022 Supplemental Operations 11
Operating Metrics – Owned and Managed * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. 3Q 2022 Supplemental Operations CAPITAL EXPENDITURES Thousands, except for percentages SAME STORE INFORMATION Thousands, except for percentages PROPERTY IMPROVEMENTS TURNOVER COSTS ON LEASES COMMENCED COMPOSITION OF PORTFOLIO (by Unit Size) Free rent as a % of lease value – trailing four quarters 3.1% 3.1% 3.0% 2.6% 2.4% Occupancy 95.9% 98.1% 98.4% 99.7% Trailing four quarter average Per square foot ($) As a % of lease value Per square foot ($) 12
Operating Portfolio(A) – Square Feet, Occupied and Leased Data in the Operating Portfolio excludes non-strategic industrial properties acquired from LPT due to our intent not to hold long-term. These properties are classified as Other Real Estate Investments. This data excludes 11 million square feet related to non-strategic industrial properties. 3Q 2022 Supplemental Operations 13
Operating Portfolio – NOI* and Gross Book Value * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. This data excludes $14 million of NOI related to non-strategic industrial properties. 3Q 2022 Supplemental Operations 14
Operating Portfolio – Summary by Division * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. 3Q 2022 Supplemental Operations 15
Customer Information We have signed leases, which were due to expire, totaling 25 million square feet in our owned and managed portfolio (2.3% of total net effective rent) and 17 million square feet on a Prologis share basis (2.5% of total net effective rent). These are excluded from 2022 expirations and are reflected in the new year of expiration. 3Q 2022 Supplemental Operations 16
Development Starts (TEI) in millions Development Stabilizations (TEI) dollars in millions Acquisitions(a) and M&A Activity in millions Land Portfolio in millions
This data excludes all acquisitions of land. Prologis completed the acquisition of Duke Realty for approximately $23 billion on October 3, 2022, therefore the acquisition is excluded from this data. The estimated build out includes the land portfolio, Covered Land Plays and other land that we could develop through options, ground leases, unconsolidated joint ventures and other contractual arrangements. Capital Deployment Overview – Prologis Share 3Q 2022 Supplemental Outside the U.S. U.S. YTD Q3 17
Development Stabilizations 3Q 2022 Supplemental Capital Deployment 18
Development Starts TEI amount includes development starts on yards and parking lots that will be included in Other Real Estate Investments upon completion. 3Q 2022 Supplemental Capital Deployment 19
Development Portfolio TEI amount includes development starts on yards and parking lots that will be included in Other Real Estate Investments upon completion. 3Q 2022 Supplemental Capital Deployment 20
Third Party Acquisitions 3Q 2022 Supplemental Capital Deployment 21
Dispositions and Contributions 3Q 2022 Supplemental Capital Deployment 22
Land Portfolio – Owned and Managed 3Q 2022 Supplemental Capital Deployment 23
Land Portfolio – Summary and Roll Forward Amounts include approximately 2,800 acres that we could develop through options, ground leases, unconsolidated joint ventures and other contractual arrangements. 3Q 2022 Supplemental Capital Deployment 24
Third party aum dollars in billions third Party Fee Related and promote revenues in millions Fee related earnings annualized* in millions Net Promote income dollars in millions This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. Strategic Capital Overview 3Q 2022 Supplemental 87.2% 90.1% 91.4% 94.9% 95.4% % Open end/Public 29.1 27.9 27.2 21.6 37.8 Trailing 3 year basis points of 3rd party AUM 25
Summary and Financial Highlights * The next promote opportunity is related to the Stabilization of individual development project(s). Values represent the entire venture at 100%, not Prologis’ proportionate share. Values are presented at Prologis’ adjusted basis derived from the ventures’ U.S. GAAP information and may not be comparable to values reflected in the ventures’ stand alone financial statements calculated on a different basis. Throughout this document we use the most recent public information for these co-investment ventures. 3Q 2022 Supplemental Strategic Capital 26
Operating and Balance Sheet Information of the Unconsolidated Co-Investment Ventures (at 100%)(A) * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. Values represent the entire venture at 100%, not Prologis’ proportionate share. Values are presented at Prologis’ adjusted basis derived from the ventures’ U.S. GAAP information and may not be comparable to values reflected in the ventures’ stand alone financial statements calculated on a different basis. 3Q 2022 Supplemental Strategic Capital 27
Non-GAAP Pro-Rata Financial Information(A) * This is a non-GAAP financial measure, please see our Notes and Definitions for further explanation. See our Notes and Definitions for further explanation of how these amounts are calculated. 3Q 2022 Supplemental Strategic Capital 28
Overview * This is a non-GAAP financial measure. Please see our Notes and Definitions for detailed calculation. Enterprise value is calculated using Prologis’ stock price of $101.60 as of September 30, 2022. Prologis’ stock price was $117.65 as of June 30, 2022. Mexico is included in the U.S. as it is U.S. dollar functional. The detail calculations are included in the Notes and Definitions section and are not in accordance with the applicable SEC rules. A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization. 3Q 2022 Supplemental Capitalization ASSETS UNDER MANAGEMENT (dollars in millions) Enterprise Value(A) AUM by Geography Market Equity U.S. DOLLAR EXPOSURE (dollars in millions) Enterprise Value Debt U.S. Dollar(B) 23.2% U.S. Dollar (B) 83.1% Outside U.S. 16.9% Outside U.S. 76.8% DEBT BY CURRENCY- PROLOGIS SHARE UNENCUMBERED ASSETS – PROLOGIS SHARE: $65.5B (in billions) AUM by Ownership 29
Debt Components – Consolidated
The maturities for the 2021 Global Facility ($346 million), 2022 Global Facility ($143 million) and the yen revolver ($31 million) are reflected at the extended maturity date, as the extension is at our option. The maturity of certain debt ($218 million) is reflected at the extended maturity dates as the extension is at our option. We manage our exposure to changes in foreign currency exchange rates using foreign currency forward contracts, including those that are accounted for as net investment hedges, to economically reduce our exposure to fluctuations in foreign currency rates. The effect is reflected in the table under Investment Hedges. See also page 29 for our market equity exposure by currency. 3Q 2022 Supplemental Capitalization 30
Debt Components – Noncontrolling Interests and Unconsolidated (A) Refer to Notes and Definitions under Non-GAAP Pro-Rata Financial Information for further explanation on how these amounts are calculated. The maturity of certain unsecured debt (Prologis Share $118 million) is reflected at the extended maturity dates as the extension is at the venture’s option. We manage our exposure to changes in foreign currency exchange rates using foreign currency forward contracts, including those that are accounted for as net investment hedges, to economically reduce our exposure to fluctuations in foreign currency rates. The effect is reflected in the table under Investment Hedges. See also page 29 for our market equity exposure by currency. 3Q 2022 Supplemental Capitalization 31
Components – Prologis Share * This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation. 3Q 2022 Supplemental Net Asset Value 32
Components – continued For the quarter, Net Promote Income includes promote revenue of $456 million, foreign currency derivative gains of $69 million, and cash and stock compensation expenses of $85 million. 3Q 2022 Supplemental Net Asset Value 33
Appendix, Notes and Definitions Prologis Park Venlo, Venlo, the Netherlands 3Q 2022 Supplemental
Total Portfolio – Owned and Managed(A) On October 3, 2022, Prologis completed the acquisition of Duke Realty. The information presented is the portfolio of Duke Realty as of September 30, 2022, which will be reported in the Prologis portfolio in the fourth quarter. Duke Realty was invested in certain joint ventures that will be reported as other unconsolidated ventures by Prologis and the properties will be excluded from our Owned and Managed Portfolio. The table above excludes 44 operating properties (15.7 million square feet), 2 development properties (1.1 million square feet) and 9 acres of land owned by these joint ventures. 3Q 2022 Supplemental Appendix A – Duke Realty Portfolio 35
3Q 2022 Supplemental Notes and Definitions 36
3Q 2022 Supplemental Notes and Definitions (continued) 37
3Q 2022 Supplemental Notes and Definitions (continued) 38
3Q 2022 Supplemental Notes and Definitions (continued) 39
3Q 2022 Supplemental Notes and Definitions (continued) 40
3Q 2022 Supplemental Notes and Definitions (continued) 41
3Q 2022 Supplemental Notes and Definitions (continued) 42
3Q 2022 Supplemental Notes and Definitions (continued) 43
pld-ex992_7.htm
FOR IMMEDIATE RELEASE
Prologis Reports Third Quarter 2022 Earnings Results
Amid an uncertain economic backdrop, business growth indicators remain strong
SAN FRANCISCO (October 19, 2022) – Prologis, Inc. (NYSE: PLD), the global leader in logistics real estate, today reported results for the third quarter of 2022.
Net earnings per diluted share was $1.36 for the quarter compared with $0.97 for the third quarter of 2021. Core funds from operations (Core FFO)* per diluted share was $1.73 for the quarter compared with $1.04 for the same period in 2021. The third quarter of 2022 included $0.57 of net promote income, while the same period in 2021 included $0.01.
"Our record results for the quarter point to the continued strength of our business; however, given the impact of aggressive Fed tightening and the rapid change in market sentiment, we will run our company assuming an economic slowdown,” said Hamid R. Moghadam, co-founder and CEO, Prologis. “We have built our portfolio to outperform and our balance sheet to be resilient throughout cycles - we view this as a time of opportunity. We will remain patient to capitalize on growth opportunities as they emerge.”
OPERATING PERFORMANCE
| Owned & Managed | 3Q22 | Notes |
|---|---|---|
| Average Occupancy | 97.7% | |
| Leases Commenced | 51.0MSF | 45.2MSF operating portfolio and 5.8MSF development portfolio |
| Retention | 76.4% | |
| Prologis Share | 3Q22 | Notes |
| --- | --- | --- |
| Net Effective Rent Change | 59.7% | All-time high; Led by U.S. at 67.0% |
| Cash Rent Change | 38.5% | |
| Cash Same Store NOI* | 9.3% | All-time high; Led by Europe at 10.6% |
DUKE PORTFOLIO EXPANDS MARKETS, CUSTOMERS AND OPPORTUNITIES
The acquisition of Duke Realty Corporation, which closed on October 3, 2022, provides Prologis with additional growth from high-quality properties and more than 500 new customers. Having completed the integration and accomplished day-one cost synergies, the company will now focus on building accretion through incremental property cash flows and Essentials income. The acquisition is not included in Prologis’ third quarter results but is factored into updated 2022 guidance.
DEPLOYMENT ACTIVITY
| Prologis Share | 3Q22 |
|---|---|
| Acquisitions | $714M |
| Weighted avg stabilized cap rate (excluding other real estate) | 4.2% |
| Development Stabilizations | $1,039M |
| Estimated weighted avg yield | 6.1% |
| Estimated weighted avg margin | 40.9% |
| Estimated value creation | $425M |
| % Build-to-suit | 60.4% |
| Development Starts | $1,139M |
| Estimated weighted avg yield | 6.3% |
| Estimated weighted avg margin | 33.6% |
| Estimated value creation | $383M |
| % Build-to-suit | 52.8% |
| Total Dispositions and Contributions | $129M |
| Weighted avg stabilized cap rate (excluding land and other real estate) | 3.7% |
BALANCE SHEET & LIQUIDITY
“We have significant liquidity, low leverage and investment capacity to support our operations and to allow for opportunistic investments,” said Timothy D. Arndt, chief financial officer. “Additionally, our embedded lease mark-to-market continued to expand to 62%, and we have substantially insulated our earnings and equity from foreign currency movements over the next several years.”
During the third quarter, Prologis and its co-investment ventures issued $3.1 billion of debt at a weighted average interest rate of 3.6%, and a weighted average term of 7.5 years. This activity includes $1.2 billion in green bonds. Year-to-date, Prologis and its co-investment ventures issued $10.8 billion of debt at a weighted average interest rate of 2.6% and a weighted average term of 7.0 years.
“The capital markets remain open for us, as demonstrated by our most recent green bond raise in late September,” Arndt added. “This is a testament to the hard work and discipline we have exhibited in building an industry-leading balance sheet.”
The company has maintained its leading liquidity position with approximately $5.3 billion in cash and availability on its credit facilities. As of September 30, 2022, debt as a percentage of total market capitalization was 20.7%, and the company’s weighted average interest rate on its share of total debt was 1.9% with a weighted average term of 9.6 years. In addition, the company has no significant debt maturities until 2026.
FOREIGN CURRENCY STRATEGY
Prologis hedges its exposure to foreign currency fluctuations by borrowing in the currencies in which it invests and using derivative financial instruments. As of September 30, 2022, 95% of Prologis’ equity was in USD and Core FFO* forecasted in foreign currencies for 2023, 2024, and 2025 were 99%, 98 % and 95%, respectively, hedged through derivative contracts.
2022 GUIDANCE
"While confident as ever about the resiliency of our business, we are exercising caution in the near term," said Arndt. “Accordingly, we are taking a more conservative approach in how we choose to allocate our capital, and are therefore lowering our guidance for development starts, dispositions and contributions while we closely monitor the market.”
2022 GUIDANCE
Earnings (per diluted share) Previous Revised Change at M.P.
| Net Earnings | $5.15 to $5.25 | $4.25 to $4.30 | (17.8)% |
|---|---|---|---|
| Core FFO* | $5.14 to $5.18 | $5.12 to $5.14** | (0.6)% |
| Core FFO, excluding net promote income* | $4.54 to $4.58 | $4.60 to $4.62 | 1.1% |
Operations
| Average occupancy | 97.25% to 97.75% | 97.25% to 97.75% | - bps |
|---|---|---|---|
| Cash Same Store NOI* - PLD share | 8.25% to 8.75% | 8.50% to 8.75% | 12.5 bps |
Strategic Capital (in millions) Previous Revised Change at M.P.
| Strategic Capital revenue,<br><br><br>excluding promote revenue | $550 to $560 | $535 to $545 | (2.7)% |
|---|---|---|---|
| Net promote income | $460 | $420 | (8.7)% |
G&A (in millions)
| General & administrative expenses | $315 to $320 | $325 to $330 | 3.1% |
|---|
Capital Deployment – Prologis Share (in millions)
| Development stabilizations | $2,300 to $2,600 | $2,700 to $3,000 | 16.3% |
|---|---|---|---|
| Development starts | $4,500 to $5,000 | $4,200 to $4,600 | (7.4)% |
| Acquisitions | $1,200 to $1,700 | $1,900 to $2,100 | 37.9% |
| Contributions | $1,600 to $1,900 | $800 to $900 | (51.4)% |
| Dispositions | $1,900 to $2,200 | $1,300 to $1,400 | (34.1)% |
| Net sources/(uses) | $(2,200) to $(2,600) | $(4,000) to $(4,400) | $(1,800) |
| Realized development gains | $750 to $850 | $400 to $500 | $(350) |
| * | 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 decrease in Core FFO 2022 guidance was mostly attributed to lower promote guidance.
The earnings guidance described above gives effect to the acquisition of Duke Realty Corporation that closed on October 3, 2022, as well as 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 for 2022 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.
OCTOBER 19, 2022, CALL DETAILS The call will take place outlook on Wednesday, October 19, 2022, at 9:00 a.m. PT/12:00 p.m. ET. To access a live broadcast of the call, please dial +1 (877) 897-2615 (toll-free from the United States and Canada) or +1 (201) 689-8514 (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 October 19 – November 2 at +1 (877) 660-6853 (from the United States and Canada) or +1 (201) 612-7415 (from all other countries) using access code 13733185. 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. As of September 30, 2022, 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 1.0 billion square feet (97 million square meters) in 19 countries. Prologis leases modern logistics facilities to a diverse base of approximately 5,800 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, development activity, contribution and disposition activity, general conditions in the geographic areas where we operate, our debt, capital structure and financial position, our ability to 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) national, international, regional and local economic and political climates; (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; (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 the current coronavirus pandemic; 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.
CONTACTS
Investors: Jill Sawyer, +1 (415) 733-9526, jsawyer@prologis.com, San Francisco
Media: Jennifer Nelson, +1 (415) 733-9409, jnelson2@prologis.com, San Francisco
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