Prologis, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - FORM 8-K - Prologis, Inc.	d330103d8k.htm

Earnings Release and Supplemental Information

Unaudited

First Quarter 2012

2012 Prologis

First Quarter 2012 Report

Table of Contents

Overview

Press Release

Highlights

Company Profile

Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Funds from Operations (FFO)

Reconciliation of Net Earnings (Loss) to FFO

EBITDA Reconciliation

Operations Overview

Operating Portfolio

Operating Metrics

Customer Information

Capital Deployment

Building Dispositions and Contributions

Building Acquisitions

Development Starts

Development Portfolio

Land Portfolio

Private Capital

Detail Fund Information

Fund Operating and Balance Sheet Information

Capitalization

Debt and Equity Summary

Debt Covenants and Other Metrics

Assets Under Management

Net Asset Value

Components

Notes and Definitions

Duck

Creek,

Stockton,

United

States

Suscon,

Dartford,

Prologis

Park

Narita

III,

Iwayama,

Japan

2012 Prologis

Prologis, Inc. Announces First Quarter 2012 Earnings Results

Core FFO Exceeds Internal Expectations -

Same Store Net Operating Income Ahead of Plan -

Progress on Fund Rationalization -

SAN FRANCISCO, May 1, 2012 – Prologis, Inc. (NYSE: PLD), the

leading global owner, operator and developer of industrial real estate,

today reported results for the first quarter of 2012.

Core funds from operations (Core FFO) per fully diluted share was

$0.40 for the first quarter 2012 compared to $0.29 for the same period

in 2011. Funds from operations (FFO) as defined by Prologis per fully

diluted share was $0.56 for the first quarter 2012 compared to $0.24 for

the same period in 2011. The difference between Core FFO and FFO

in the first quarter 2012 primarily relates to gains on real estate

transactions. Net earnings per share were $0.44 for the first quarter

2012 compared to a net loss of $(0.18) for the same period in 2011.

The first quarter 2011 comparative results represent solely legacy

ProLogis and therefore are not directly comparable to the 2012

reported results.

"We started the year with a strong quarter, demonstrating solid

execution from the team, bolstered by the strength of global trade,

domestic consumption and the rebuilding of customer inventories,”

said Hamid R. Moghadam, chairman and co-chief executive officer,

Prologis. “We continue to make excellent progress on our key

priorities, completing nearly $1 billion in dispositions and contributions,

rationalizing two of our funds, and increasing occupancy in our

operating portfolio.”

Operating Portfolio Metrics

During the first quarter, the company leased a total of 30.9 million

square feet (2.9 million square meters) in its combined operating and

development portfolios. Prologis ended the quarter with 92.3 percent

occupancy in its operating portfolio, which was up 10 basis points over

the prior quarter. The quarter-end occupancy was ahead of plan, driven

by a 78.3 percent tenant retention rate for the quarter with existing

customers who signed renewals totaling 19.8 million square feet (1.8

million square meters), and the continued recovery of global logistics

markets.

Same-store net operating income (NOI) in the first quarter of 2012

increased 1.7 percent over the first quarter 2011, compared to an

increase of 0.4 percent in the fourth quarter of 2011. Rental rates on

leases signed in the first quarter same-store pool decreased by 1.1

percent from in-place rents, as compared to a decrease of 4.5 percent

in the fourth quarter 2011.

“The teams delivered strong leasing volume in what is typically the

year’s slowest quarter,” said Walter C. Rakowich, co-chief executive

officer, Prologis. “Space utilization remains very high and the strongest

demand continues to be for large Class-A facilities, of which there is

very little available supply. Consequently, our build-to-suit development

pipeline is increasing.”

Dispositions and Contributions

During the first quarter 2012, the company completed approximately

$994 million in building and land dispositions and contributions.

Prologis' share of the proceeds was $762 million, reflecting a weighted

average stabilized capitalization rate of 7.2 percent on building sales

and contributions.

Development Starts & Acquisitions

Capital deployed or committed during the first quarter 2012 totaled

approximately $322 million, of which $244 million was Prologis’ share,

including the following:

Development starts of $211 million totaling 1.5 million square feet

(143,257 square meters) in three projects, which monetized $51

million of land. Of the total expected investment of $211 million,

$197 million was in build-to-suit projects. Prologis’ share of the total

expected investment is $186 million and the company’s share of

estimated value creation on development starts in the first quarter

is $49.5 million; and

2012 Prologis

Acquisitions & Development Starts

Capital deployed or committed during the fourth quarter 2011 totaled

approximately $345 million, of which $210 million was Prologis’ share, including:

Acquisitions of $178 million including 11 industrial properties totaling to 1.6

million square feet (150,000 square meters) with a stabilized capitalization rate

of 7.0 percent and 10 acres of land. Of the total acquisitions, $106 million

was Prologis’ share; and

Development starts of $166 million totaling 2.2 million square feet (206,500

square meters) in 9 projects, which monetized $41 million of land. Prologis’

share of the total expected investment is $105 million.

At quarter end, Prologis’ global development portfolio totaled 13.1 million square

feet (1.2 million square meters), with an estimated total investment of $1.4 billion.

Prologis’ share of the estimated total investment was $1.2 billion with an

estimated value creation at stabilization of $238 million.

Private Capital Activity

In 2011, Prologis raised or received new, third-party equity commitments of

approximately $1.8 billion.

Consistent with the company’s priority to streamline its private capital business, it

has implemented a plan to rationalize its co-investment ventures into a smaller

number of differentiated investment vehicles.

As previously announced the company sold its 20 percent interest in its

Prologis Korea Fund and liquidated the first phase of its Prologis North

America Properties Fund I during the second half of 2011.

Subsequent to year end, the company purchased its partner’s 63 percent

interest in Prologis North America Fund II and brought the portfolio entirely

onto its balance sheet.

Financing Activity

During the fourth quarter, Prologis completed approximately $1.4 billion of

capital markets activities, including debt repurchases, refinancings, and new

financings.

As a result and in combination with the significant disposition and contribution

activity, the company:

Reduced its share of total debt by $907 million;

Lowered its share of 2012 debt maturities by $399 million; and

Improved its key debt metrics in line with its previously stated strategic

priorities.

“We exceeded our balance sheet management and delevering objectives for 2011

and remain committed to building one of the top balance sheets in the industry,”

said William Sullivan, chief financial officer, Prologis. “Carrying this momentum

into 2012, a key area of focus is on further improving our financial position and

mitigating our exposure to foreign currency.”

Guidance for 2012

Prologis established a full-year 2012 Core FFO guidance range of $1.60 to $1.70

per diluted share. The company also expects to recognize a net loss for GAAP

purposes, on a relative basis, of $(0.40) to $(0.50) per share. The difference

between the company’s Core FFO and net earnings guidance for 2012

predominately relates to real estate depreciation and merger related expenses.

The Core FFO and earnings guidance reflected above excludes any potential gains

(losses) recognized from property dispositions, due to the variability of timing,

composition of properties and estimate of proceeds. In reconciling from net

earnings to Core FFO, Prologis makes certain adjustments including but not

limited to real estate depreciation and amortization expense, impairment charges,

deferred taxes, unrealized gains or losses on foreign currency or derivative activity,

as well as transaction and merger costs.

The principal drivers supporting Prologis’ 2012 guidance include the following:

Year end occupancy in its operating portfolio between 92.5 and 93.5 percent

(consistent with historical seasonal trends, the company expects occupancy to

decrease in the first quarter and trend higher through the remainder of the

year);

Same-store NOI growth flat to 1.0 percent, excluding the impact of foreign

exchange movements;

Acquisitions of $111 million, including $71 million in 10 logistics

facilities totaling approximately 1.0 million square feet (91,231

square meters) with a stabilized capitalization rate of 6.6 percent

and an investment of $40 million in land and land infrastructure. Of

the total acquisitions, $58 million was Prologis’ share.

At quarter end, Prologis’ global development portfolio totaled 12.0

million square feet (128,131 square meters), with a total expected

investment of $1.4 billion. Prologis’ share of the estimated total

investment is $1.2 billion, with an estimated value creation at

stabilization of $248 million.

Private Capital Activity

During the first quarter 2012, Prologis raised $128 million in new third-

party equity for the Prologis Targeted U.S. Logistics Fund.

The company continued the rationalization of its co-investment

ventures into fewer, more profitable and differentiated investment

vehicles. As previously announced, during the first quarter the

company:

Purchased its partner's interest in Prologis North American Fund II

and brought the entire $1.6 billion portfolio directly onto its balance

sheet;

Concluded the Prologis California Fund, as it had reached the end

of the venture’s term. The portfolio was equally divided with its

partner, and Prologis' 50 percent share of the fund's $1.0 billion of

real estate was brought directly onto its balance sheet; and

Disposed of 11 of the 12 assets held in Prologis North American

Fund XI.

Capital Markets

During the first quarter 2012, Prologis completed more than $1.3 billion

of debt financings and refinancings, with approximately $1.0 billion

related to the REIT and $296 million on behalf of our property funds.

Significant financing activity during the first quarter included the

following:

A $642 million (€487.5 million) multi-currency senior term loan

agreement at an all-in drawn margin of 150 basis points over

LIBOR, extendable at the company’s option through 2017; and

$372 million (¥ 30.5 billion) in three TMK bond financings with a

weighted average term of five years and weighted average rate of

1.05 percent.

Subsequent to quarter end the company paid off $449million of its 2.25

percent convertible notes and repaid $59 million of senior unsecured

notes at maturity.

“During the first quarter, we made excellent progress toward our stated

goal of streamlining our private capital business by rationalizing two

funds,” said William E. Sullivan, chief financial officer, Prologis. “While

this activity modestly increased our total debt in the interim, it

enhanced the simplification of the balance sheet and brought a

substantial amount of high-quality assets directly into the REIT. We

remain highly focused on de-levering the balance sheet and expect to

make progress on improving our debt metrics throughout the course of

2012 and 2013.”

Guidance for 2012

Prologis re-affirmed its full-year 2012 Core FFO guidance range of

$1.60 to $1.70 per diluted share. The company also expects to

recognize net earnings, for GAAP purposes, of $0.05 to $0.15 per

share. The difference between the company’s Core FFO and net

earnings guidance for 2012 predominantly relates to real estate

depreciation, recognized gains on real estate transactions, and

merger-related expenses.

The Core FFO and earnings guidance reflected above excludes any

potential future gains (losses) recognized from real estate

transactions. In reconciling from net earnings to Core FFO, Prologis

makes certain adjustments, including but not limited to real estate

depreciation and amortization expense, impairment charges, deferred

taxes, unrealized gains or losses on foreign currency or derivative

activity, as well as transaction and merger costs.

2012 Prologis

Development starts of $1.1 to $1.4 billion, of which approximately 70 percent

is expected to be the company’s share;

Acquisitions of buildings of $400 to $600 million, of which approximately 40

percent is expected to be the company’s share;

Building and land dispositions and contributions of $4.5 to $5.5 billion, of

which approximately 70 percent is expected to be the company’s share. A

substantial portion of the disposition and contribution guidance relates to the

formation of the Prologis Targeted Japan Logistics Fund and subsequent

contribution of assets from its balance sheet; and

An average euro exchange rate of $1.30 and an average yen exchange rate of

¥80 per U.S. dollar.

Webcast and Conference Call Information

The company will host a webcast /conference call to discuss quarterly results,

current market conditions and future outlook today, February 8, 2012, at 12:00

p.m. Eastern Time. Interested parties are encouraged to access the live webcast by

clicking the microphone icon located near the top of the opening page at:

http://ir.prologis.com. Interested parties also can participate via conference call

by dialing (877) 256-7020 from the U.S. and Canada or (+1 973-409-9692)

internationally with reservation code 40596350.

A telephonic replay will be available from February 8, 2012, through March 8,

2012, at 855-859-2056 (from the U.S. and Canada) or +1 404-537-3406 (from all

other countries), with the reservation code 40596350. The webcast and podcast

replay will be posted when available in the "Financial Information" section of the

Prologis Investor Relations website.

About Prologis

Prologis, Inc. is the leading owner, operator and developer of industrial real estate,

focused on global and regional markets across the Americas, Europe and Asia. As

of December 31, 2011, Prologis owned or had investments in, on a consolidated

basis or through unconsolidated joint ventures, properties and development

projects expected to total approximately 600 million square feet (55.7 million

square meters) in 22 countries. The company leases modern distribution facilities

to more than 4,500 customers, including manufacturers, retailers, transportation

companies, third-party logistics providers and other enterprises.

The statements in this release 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 Prologis operates, management’s beliefs and assumptions made by

management. Such statements involve uncertainties that could significantly impact

Prologis’ financial results. Words such as “expects,” “anticipates,” “intends,” “plans,”

“believes,” “seeks,” “estimates,” 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 and changes in sales or contribution volume of

developed properties, disposition activity, general conditions in the geographic areas where

we operate, synergies to be realized from our recent merger transaction, our debt and

financial position, our ability to form new property funds and the availability of capital in

existing or new property funds — 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 climates, (ii) changes in

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 (“REIT”) status and tax structuring, (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 and funds, including our ability to establish new co-

investment ventures and funds, (viii) risks of doing business internationally, including

currency risks, (ix) environmental uncertainties, including risks of natural disasters, and (x)

those additional factors discussed in reports filed with the Securities and Exchange

Commission by Prologis under the heading “Risk Factors.” Prologis undertakes no duty to

update any forward-looking statements appearing in this release.

Prologis Contacts

Tracy A. Ward

James Larkin

SVP, IR & Corporate Communications

VP, Corporate Communications

Direct: +1 415 733 9565

Direct: +1 415 733 9411

Email: tward@prologis.com

Email: jlarkin@prologis.com

Webcast and Conference Call Information

The company will host a webcast /conference call to discuss quarterly results,

current market conditions and future outlook today, May 1, 2012, at 12:00 p.m.

Eastern Time. Interested parties are encouraged to access the live webcast

by clicking the microphone icon located near the top of the opening page at:

http://ir.prologis.com. Interested parties also can participate via conference

call by dialing 877-256-7020 from the United States and Canada or

(+1) 973-409-9692 internationally with reservation code 67489991.

A telephonic replay will be available from May 2, 2012, through June 2, 2012,

at 855-859-2056 (from the United States and Canada) or (+1) 404-537-3406

(from all other countries), with the reservation code 67489991. The webcast

and podcast replay will be posted when available in the "Financial Information"

section of the Prologis Investor Relations website.

About Prologis

Prologis, Inc. is the leading owner, operator and developer of industrial real

estate, focused on global and regional markets across the Americas, Europe

and Asia. As of March 31, 2012, Prologis owned or had investments in, on a

consolidated basis or through unconsolidated joint ventures, properties and

development projects expected to total approximately 584 million square feet

(54.2 million square meters) in 22 countries. The company leases modern

distribution facilities to more than 4,500 customers, including manufacturers,

retailers, transportation companies, third-party logistics providers and other

enterprises.

The statements in this release 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 Prologis operates, management’s beliefs and assumptions made by

management. Such statements involve uncertainties that could significantly

impact Prologis’ financial results. Words such as “expects,” “anticipates,”

“intends,” “plans,” “believes,” “seeks,” “estimates,” 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 and changes in sales or contribution volume of

developed properties, disposition activity, general conditions in the geographic

areas where we operate, synergies to be realized from our recent merger

transaction, our debt and financial position, our ability to form new property funds

and the availability of capital in existing or new property funds — 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 climates, (ii)

changes in 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 (“REIT”) status and tax structuring, (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 and funds, including

our ability to establish new co-investment ventures and funds, (viii) risks of doing

business internationally, including currency risks, (ix) environmental uncertainties,

including risks of natural disasters, and (x) those additional factors discussed in

reports filed with the Securities and Exchange Commission by Prologis under the

heading “Risk Factors.” Prologis undertakes no duty to update any forward-looking

statements appearing in this release.

Prologis Contacts

Tracy A. Ward

James Larkin

SVP, IR & Corporate Communications

VP, Corporate Communications

Direct: +1 415 733 9565

Direct: +1 415 733 9411

Email: tward@prologis.com

Email: jlarkin@prologis.com

2012 Prologis

First Quarter 2012 Report

Highlights

Company Profile

(A)

(B)

Original cost basis for the total land portfolio is $3.1 billion.

Number of operating portfolio buildings

2,419

595

373

139

Total (msf)

410

142

$348

$147

$858

7,265

3,578

146

$1,056

$741

$196

TOTAL

537

1,993

1,353

584

10,989

3,089

Land (acres)

Land gross book value (millions) (B)

AMERICAS (4 countries)

ASIA (4 countries)

EUROPE (14 countries)

Operating Portfolio (msf)

Development Portfolio (msf)

Other (msf) (A)

Development portfolio TEI (millions)

Generally represents properties managed by Prologis on behalf of other third parties (17 msf), properties in which Prologis has an ownership interest but doesn’t manage (10 msf)

and other properties owned by Prologis (8 msf).

Prologis, Inc. is the leading owner, operator and developer of industrial real estate, focused on global and regional markets across the Americas, Europe and Asia.

As of March 31, 2012, Prologis owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development

projects totaling approximately 584 million square feet (54.3 million square meters) in 22 countries. The company leases modern distribution facilities to more than

4,500 customers, including manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises.

2012 Prologis

First Quarter 2012 Report

Highlights

Company Profile

(A) AMB and Prologis completed a merger (the “Merger”) on June 3, 2011. The financial results presented throughout this supplemental include Prologis for the full period and AMB results from the

date of the Merger going forward. As such, results for the three months ended March 31, 2011 are not impacted by the Merger. See the Notes and Definitions for more information.

2012

2011 (A)

500,064

229,867

202,412

(46,616)

262,072

62,146

184,765

74,407

133,823

51,131

388,869

211,667

Net earnings (loss) attributable to common stockholders

0.44

(0.18)

FFO, as defined by Prologis

0.56

0.24

Core FFO

0.40

0.29

Per common share -

diluted:

FFO, as defined by Prologis

(dollars in thousands, except per share data)

Core FFO

AFFO

Core EBITDA

Three months ended March 31,

Revenues

Net earnings (loss) attributable to common stockholders

$50

$100

$150

$200

$250

$300

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Funds from Operations (in millions) (A)

Core FFO

FFO, as defined by Prologis

90.7%

91.0%

92.2%

92.3%

80%

85%

90%

95%

100%

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Period Ending Occupancy %

2012 Prologis

First Quarter 2012 Report

Financial Statements

Consolidated Balance Sheets

(in thousands)

23,438,703

21,552,548

787,029

860,531

1,933,321

1,984,233

419,432

390,225

26,578,485

24,787,537

2,256,901

2,157,907

Net investments in properties

24,321,584

22,629,630

2,452,939

2,857,755

247,241

322,834

102,183

444,850

Net investments in real estate

27,123,947

26,255,069

343,736

176,072

91,957

71,992

163,679

147,999

1,144,634

1,072,780

Total assets

28,867,953

27,723,912

12,380,921

11,382,408

1,936,372

1,886,030

Total liabilities

14,317,293

13,268,438

582,200

4,604

4,594

16,370,254

16,349,328

(219,574)

(182,321)

(3,019,829)

(3,092,162)

Total stockholders' equity

13,717,655

13,661,639

774,950

735,222

58,055

58,613

Total equity

14,550,660

14,455,474

Total liabilities and equity

28,867,953

27,723,912

Noncontrolling interests - limited partnership unitholders

Preferred stock

Accounts payable, accrued expenses, and other liabilities

Debt

Distributions in excess of net earnings

Equity:

Common stock

Additional paid-in capital

Accumulated other comprehensive loss

Noncontrolling interests

Stockholders' equity:

Other assets

Liabilities:

Less accumulated depreciation

Restricted cash

Accounts receivable

Cash and cash equivalents

Liabilities and Equity:

December 31, 2011

Investments in and advances to unconsolidated investees

Land

Assets held for sale

Operating properties

Development portfolio

Notes receivable backed by real estate

March 31, 2012

Investments in real estate assets:

Assets:

Other real estate investments

2012 Prologis

First Quarter 2012 Report

Financial Statements

Consolidated Statements of Operations

(A) The financial results include Prologis for the full period and no impact from the AMB results.

(B) See Calculation of Per Share Amounts in the Notes and Definitions.

(in thousands, except per share amounts)

464,594

195,714

32,357

29,834

3,113

4,319

500,064

229,867

125,096

60,624

16,881

10,552

60,159

39,183

10,728

5,988

3,185

193,136

84,733

409,185

201,080

90,879

28,787

11,758

11,921

2,237

1,720

5,427

4,436

(133,447)

(90,527)

(16,135)

267,771

3,725

(27,101)

(5,641)

5,419

115,929

(74,366)

206,808

(45,579)

12,124

6,369

194,684

(51,948)

7,164

9,824

11,249

1,960

18,413

11,784

213,097

(40,164)

(118)

(83)

212,979

(40,247)

10,567

6,369

202,412

(46,616)

476,107

254,698

0.44

(0.18)

Expenses:

2012

2011 (A)

Revenues:

Rental income

Private capital revenue

Development management and other income

Total revenues

Three Months Ended

March 31,

Interest expense

Earnings from other unconsolidated investees, net

Rental expenses

Private capital expenses

General and administrative expenses

Impairment of real estate properties

Depreciation, amortization and other expenses

Merger, acquisition and other integration expenses

Total expenses

Operating income

Other income (expense):

Earnings from unconsolidated co-investment ventures, net

Interest income

Discontinued operations:

Impairment of other assets

Gains on acquisitions and dispositions of investments in real estate, net

Foreign currency and derivative gains (losses) and other income (expenses), net

Gain on early extinguishment of debt, net

Total other income (expense)

Earnings (loss) before income taxes

Income tax expense - current and deferred

Earnings (loss) from continuing operations

Income attributable to disposed properties and assets held for sale

Net gains on dispositions, net of related impairment charges and taxes

Consolidated net earnings (loss)

Net earnings attributable to noncontrolling interests

Net earnings (loss) attributable to controlling interests

Less preferred stock dividends

Net earnings (loss) available for common stockholders

Total discontinued operations

Net earnings (loss) per share available for common stockholders - Diluted

Weighted average common shares outstanding - Diluted (B)

2012 Prologis

First Quarter 2012 Report

Financial Statements

Consolidated Statements of Funds from Operations (FFO)

(A) The financial results include Prologis for the full period and no impact from the AMB results.

(B) See Calculation of Per Share Amounts in the Notes and Definitions.

(in thousands, except per share amounts)

477,501

215,372

32,357

29,834

3,113

4,319

Total revenues

512,971

249,525

127,815

66,687

16,881

10,552

60,159

39,183

10,728

5,988

8,445

8,957

Total operating expenses

224,028

131,367

288,943

118,158

40,691

45,425

6,305

3,270

5,427

4,436

(133,447)

(90,562)

(19,320)

104,731

2,568

(2,865)

(7,276)

5,419

(11,073)

(7,421)

Total other income (expense)

(4,132)

(49,560)

10,567

6,369

12,172

262,072

62,146

19,320

6,925

10,728

5,988

(102,918)

(2,568)

(4,437)

1,916

Total of adjustments

(77,307)

12,261

184,765

74,407

476,107

256,200

0.40

0.29

Our share of gains on early extinguishment of debt, net

Revenues:

2012

Depreciation and amortization of non-real estate assets and other expenses

FFO from unconsolidated co-investment ventures, net

Impairment of real estate properties and other assets

FFO from other unconsolidated investees, net

Interest expense

Other income (expense):

Interest income

Rental income

Operating FFO

Private capital revenue

Merger, acquisition and other integration expenses

Core FFO per share - Diluted

Weighted average common shares outstanding - Diluted (B)

Gains on acquisitions and dispositions of investments in real estate, net

Japan disaster expenses

Our share of gains on acquisitions and dispositions of investments in real estate, net

FFO, as defined by Prologis

Less FFO attributable to noncontrolling interests

Income tax expense on dispositions

Impairment charges

Less preferred share dividends

Core FFO

Current income tax benefit (expense)

Gain on early extinguishment of debt, net

Foreign currency exchange gains (losses) and other income (expenses), net

Merger, acquisition and other integration expenses

2011 (A)

Three Months Ended

March 31,

Private capital expenses

Development management and other income

Expenses:

General and administrative expenses

Rental expenses

2012 Prologis

First Quarter 2012 Report

Financial Statements

Reconciliations of Net Earnings (Loss) to FFO

(A) The financial results include Prologis for the full period and no impact from the AMB results.

202,412

(46,616)

184,691

75,776

(171,265)

(1,297)

(12,054)

34,538

35,677

238,322

63,540

24,236

(1,635)

1,051

864

(1,537)

(623)

262,072

62,146

(77,307)

12,261

184,765

74,407

Adjustments to arrive at Adjusted FFO ("AFFO"), including our share of unconsolidated investees:

(11,347)

(14,685)

(13,414)

(6,930)

(23,987)

(9,042)

(10,333)

(7,299)

Amortization of management contracts

1,216

665

Amortization of debt discounts/(premiums) and financing costs, net of capitalization

(1,389)

9,403

Stock compensation expense

8,312

4,612

AFFO

133,823

51,131

Common stock dividends

130,080

64,042

2012

2011 (A)

Three Months Ended

March 31,

Our share of reconciling items from unconsolidated investees

Unrealized foreign currency and derivative losses (gains), net

Deferred income tax expense (benefit)

Our share of reconciling items from unconsolidated investees

Straight-lined rents and amortization of lease intangibles

Property improvements

Tenant improvements

Leasing commissions

Reconciliation of net earnings (loss) to FFO

Subtotal-NAREIT defined FFO

FFO, as defined by Prologis

Reconciling items related to noncontrolling interests

Core FFO

Net earnings (loss) attributable to common shares

Add (deduct) NAREIT defined adjustments:

Add (deduct) our defined adjustments:

Adjustments to arrive at Core FFO

Real estate related depreciation and amortization

Net gains on non-FFO dispositions

(in thousands)

2012 Prologis

First Quarter 2012 Report

Financial Statements

EBITDA Reconciliation

(A) Adjustments for the effects of the Prologis North American Industrial Fund II and Prologis California acquisitions to reflect NOI for the full period. See Notes and Definitions for more detail.

(in thousands)

Reconciliation of consolidated net earnings (loss) to Core EBITDA

202,412

(46,616)

(279,020)

(7,601)

188,801

80,049

133,447

90,527

19,320

10,728

5,988

(5,419)

12,124

8,285

12,352

(7,164)

(9,824)

118

10,567

6,369

32,548

2,977

6,925

330,814

137,162

1,813

31,531

35,677

23,723

36,536

982

1,543

2,689

(1,537)

(623)

226

388,869

211,667

Depreciation and amortization

Pro forma adjustment (A)

2011

2012

Interest expense

Current and deferred income tax expense (benefit)

Impairment charges

Merger, acquisition and other integration expenses

Net gains on acquisitions and dispositions of investments in real estate, net

Consolidated net earnings (loss)

Three Months Ended

March 31,

Gain on early extinguishment of debt

Core EBITDA

Interest expense

Current and deferred income tax expense (benefit)

Realized losses on derivative activity

Depreciation and amortization

Other non-cash gains

Our share of reconciling items from unconsolidated investees:

Income on properties sold during the period included in discontinued operations

Net gains on disposition of real estate, net

Other adjustments made to arrive at Core FFO

Core EBITDA, prior to our share of unconsolidated investees

Unrealized losses (gains) and stock compensation expense

Loss on early extinguishment of debt

Net earnings attributable to noncontrolling interest

Preferred stock dividends

2012 Prologis

First Quarter 2012 Report

Operations Overview

Operating Portfolio –

Square Feet, Occupied and Leased

(A) Selected and ordered by Prologis share of NOI.

(square feet in thousands)

Region

# of Buildings

Total Owned and

Managed

Prologis

Share (%)

% of Total

Total Owned and

Managed

Prologis

Total Owned and

Managed

Prologis

Atlanta

East

130

18,135

14,277

78.7%

3.7%

85.0%

84.4%

85.6%

85.1%

Baltimore/Washington

East

7,862

5,349

68.0%

1.4%

93.5%

92.2%

93.6%

92.3%

Central Valley

Northwest

7,981

6,139

76.9%

1.6%

88.8%

87.4%

88.8%

87.4%

Central & Eastern PA

East

14,049

7,137

50.8%

1.9%

94.5%

96.9%

94.5%

96.9%

Chicago

Central

211

35,573

27,690

77.8%

7.2%

90.9%

92.3%

90.9%

92.3%

Dallas/Ft. Worth

Central

172

24,999

20,566

82.3%

5.4%

92.8%

93.0%

92.8%

93.0%

Houston

Central

9,907

7,223

72.9%

1.9%

97.6%

98.4%

97.9%

98.8%

New Jersey/New York City

East

183

22,818

16,630

72.9%

4.3%

91.6%

90.4%

91.6%

90.4%

San Francisco Bay Area

Northwest

238

20,012

17,541

87.7%

4.6%

91.0%

90.7%

91.1%

90.9%

Seattle

Northwest

8,630

4,901

56.8%

1.3%

92.7%

93.2%

92.7%

93.2%

South Florida

East

10,578

7,699

72.8%

2.0%

90.2%

91.4%

90.2%

91.4%

Southern California

Southwest

305

56,621

46,582

82.3%

12.2%

96.3%

96.4%

96.6%

96.8%

On Tarmac

Various

2,649

2,435

91.9%

0.6%

91.0%

90.2%

91.0%

90.2%

East

6,383

5,081

79.6%

1.3%

97.7%

97.2%

97.7%

97.2%

Latin America

181

29,242

16,650

56.9%

4.4%

92.0%

91.4%

92.0%

91.4%

Latin America

934

10.0%

0.0%

100.0%

Americas total

1,834

276,373

205,993

74.5%

53.8%

92.6%

92.7%

92.8%

92.9%

Northern

2,016

1,654

82.0%

0.4%

99.6%

Southern

143

35,139

26,069

74.2%

6.8%

93.1%

92.3%

93.4%

92.7%

Northern

17,261

8,238

47.7%

2.2%

98.8%

97.7%

98.8%

97.7%

Northern

10,300

6,399

62.1%

1.7%

89.4%

89.9%

90.1%

90.2%

CEE

20,766

12,373

59.6%

3.2%

87.2%

85.4%

89.6%

88.3%

Southern

6,470

5,809

89.8%

1.5%

74.2%

76.4%

74.6%

76.9%

17,195

10,485

61.0%

2.8%

96.8%

95.8%

96.8%

95.8%

478

109,147

71,027

65.1%

18.6%

92.1%

90.9%

92.8%

91.6%

China

5,331

2,287

42.9%

0.6%

97.9%

96.8%

97.9%

96.8%

Japan

18,998

13,188

69.4%

3.5%

95.6%

94.8%

95.9%

95.2%

Singapore

942

100.0%

0.2%

100.0%

25,271

16,417

65.0%

4.3%

96.2%

95.3%

96.4%

95.7%

2,387

410,791

293,437

71.4%

76.7%

92.7%

92.4%

93.0%

92.7%

Southern

8,378

7,690

91.8%

2.0%

90.0%

89.1%

91.3%

90.6%

CEE

6,821

5,096

74.7%

1.3%

90.9%

89.2%

92.3%

89.7%

Northern

3,808

2,738

71.9%

0.7%

100.0%

CEE

5,336

3,815

71.5%

1.0%

84.0%

84.3%

85.1%

85.9%

Central

10,309

8,046

78.0%

2.1%

93.9%

92.1%

93.9%

92.1%

Northwest

5,208

4,138

79.5%

1.1%

96.8%

96.2%

97.2%

96.8%

Central

8,310

7,515

90.4%

2.0%

95.8%

95.4%

95.8%

95.4%

Central

6,358

4,892

76.9%

1.3%

93.0%

93.1%

93.2%

93.3%

Central

4,341

3,809

87.7%

1.0%

98.2%

99.2%

98.2%

99.2%

Central

6,898

4,379

63.5%

1.1%

95.7%

93.3%

97.5%

96.1%

Various

115

18,619

11,532

61.9%

3.0%

89.5%

86.3%

90.7%

86.7%

410

84,386

63,650

75.4%

16.6%

92.6%

91.6%

93.4%

92.2%

Various

292

41,757

25,510

61.1%

6.7%

87.7%

89.9%

88.0%

90.2%

3,089

536,934

382,597

71.3%

100.0%

92.3%

92.1%

92.7%

92.5%

Occupied

Leased

Japan

Global Markets

U.S.

Canada

Belgium

Mexico

Brazil

Square Feet

Singapore

China

France

Germany

Netherlands

Poland

Spain

Europe total

United Kingdom

Regional markets (A)

Czech Republic -

Europe

Asia total

Total global markets

Italy -Europe

Hungary -

Europe

Sweden -Europe

Columbus -Americas

Denver -

Americas

San Antonio -Americas

Other markets (18 markets)

Total operating portfolio -

owned and managed

Memphis -Americas

Louisville -

Americas

Cincinnati -Americas

Remaining other regional (5 markets)

Regional markets total

2012 Prologis

First Quarter 2012 Report

Operations Overview

Operating Portfolio –

NOI and Gross Book Value

(A) Selected and ordered by Prologis share of NOI.

(dollars in thousands)

Region

Atlanta

East

$10,203

$7,568

74.2%

1.9%

$770,523

$574,082

74.5%

2.0%

Baltimore/Washington

East

9,723

6,155

63.3%

1.6%

589,878

370,361

62.8%

1.3%

Central Valley

Northwest

6,268

4,761

76.0%

1.2%

428,258

323,503

75.5%

1.2%

Central & Eastern PA

East

11,685

5,533

47.4%

1.4%

865,454

404,585

46.7%

1.4%

Chicago

Central

22,462

17,027

75.8%

4.3%

2,109,699

1,604,661

76.1%

5.7%

Dallas/Ft. Worth

Central

15,450

11,815

76.5%

3.0%

1,185,508

927,440

78.2%

3.3%

Houston

Central

9,011

6,075

67.4%

1.5%

531,427

337,782

63.6%

1.2%

New Jersey/New York City

East

25,767

16,960

65.8%

4.3%

1,976,619

1,332,249

67.4%

4.8%

San Francisco Bay Area

Northwest

26,870

23,471

87.4%

5.9%

1,917,623

1,675,528

87.4%

6.0%

Seattle

Northwest

10,335

5,641

54.6%

1.4%

811,228

455,586

56.2%

1.6%

South Florida

East

11,832

8,664

73.2%

2.2%

1,025,693

773,509

75.4%

2.8%

Southern California

Southwest

57,509

46,492

80.8%

11.7%

5,044,244

4,106,572

81.4%

14.7%

On Tarmac

Various

7,346

6,489

88.3%

1.6%

317,371

280,803

88.5%

1.0%

East

8,563

6,639

77.5%

1.7%

660,169

525,725

79.6%

1.9%

Latin America

30,500

17,930

58.8%

4.5%

1,726,551

938,346

54.3%

3.4%

Latin America

2,676

268

10.0%

0.1%

96,542

9,654

10.0%

0.0%

266,200

191,488

71.9%

48.3%

20,056,787

14,640,386

73.0%

52.3%

Northern

2,724

2,094

76.9%

0.5%

173,635

136,590

78.7%

0.5%

Southern

44,786

32,040

71.5%

8.1%

2,932,362

2,089,899

71.3%

7.5%

Northern

25,395

11,971

47.1%

3.0%

1,486,566

684,120

46.0%

2.4%

Northern

14,003

8,297

59.3%

2.1%

990,890

565,830

57.1%

2.0%

CEE

19,663

11,858

60.3%

3.0%

1,380,914

748,350

54.2%

2.7%

Southern

7,277

6,885

94.6%

1.8%

584,687

532,012

91.0%

1.9%

33,767

19,446

57.6%

4.9%

2,019,909

1,124,135

55.7%

4.0%

147,615

92,591

62.7%

23.4%

9,568,963

5,880,936

61.5%

21.0%

China

3,796

1,138

30.0%

0.3%

275,578

87,765

31.8%

0.3%

Japan

59,332

39,606

66.8%

10.0%

4,107,697

2,721,163

66.2%

9.8%

Singapore

2,473

100.0%

0.6%

145,059

100.0%

0.5%

65,601

43,217

65.9%

10.9%

4,528,334

2,953,987

65.2%

10.6%

479,416

327,296

68.3%

82.6%

34,154,084

23,475,309

68.7%

83.9%

Southern

7,989

7,219

90.4%

1.8%

553,589

499,898

90.3%

1.8%

CEE

8,035

5,886

73.3%

1.5%

546,314

388,286

71.1%

1.4%

Northern

5,825

4,191

71.9%

1.1%

349,551

249,964

71.5%

0.9%

CEE

5,999

4,168

69.5%

1.0%

379,443

240,602

63.4%

0.9%

Central

5,604

3,942

70.3%

1.0%

385,428

290,831

75.5%

1.0%

Northwest

4,341

3,450

79.5%

0.9%

289,658

234,800

81.1%

0.8%

Central

3,621

3,193

88.2%

0.8%

264,206

236,373

89.5%

0.9%

Central

4,385

3,119

71.1%

0.8%

282,826

206,844

73.1%

0.7%

Central

3,127

2,748

87.9%

0.7%

173,660

153,602

88.4%

0.5%

Central

4,412

2,311

52.4%

0.6%

277,630

160,382

57.8%

0.6%

Various

13,939

7,292

52.3%

1.8%

950,500

536,387

56.4%

1.9%

67,277

47,519

70.6%

12.0%

4,452,805

3,197,969

71.8%

11.4%

Various

35,588

21,504

60.4%

5.4%

2,481,648

1,318,521

53.1%

4.7%

$582,281

$396,319

68.1%

100.0%

$41,088,537

$27,991,799

68.1%

100.0%

First Quarter NOI

Total Owned and

Managed

Prologis

Share ($)

Prologis

Share (%)

% of Total

Total Owned and

Managed

Prologis

Share ($)

Prologis

Share (%)

Gross Book Value

% of Total

Global Markets

U.S.

Canada

Mexico

Brazil

Americas total

Belgium

France

Germany

Netherlands

Poland

Spain

United Kingdom

Europe total

China

Japan

Singapore

Asia total

Total global markets

Regional markets (A)

Italy -

Europe

Czech Republic -

Europe

Hungary -

Europe

Sweden -

Europe

Columbus -

Americas

Denver -

Americas

San Antonio -

Americas

Memphis -

Americas

Louisville -

Americas

Cincinnati -

Americas

Remaining other regional (5 markets)

Regional markets total

Other markets (18 markets)

Total operating portfolio

2012 Prologis

First Quarter 2012 Report

Operations Overview

Operating Portfolio –

Summary by Region

(square feet and dollars in thousands)

# of Buildings

Total Owned

and Managed

Prologis

Share (%)

% of Total

Total Owned

and Managed

Prologis

Total Owned

and Managed

Prologis

1,595

240,598

100.0%

62.9%

92.4%

92.6%

306

73,420

100.0%

19.1%

89.9%

90.7%

14,427

100.0%

3.8%

95.0%

95.4%

Total

operating

portfolio

consolidated

1,932

328,445

100.0%

85.8%

91.9%

92.3%

824

131,943

32,444

24.6%

8.5%

91.7%

91.9%

91.8%

92.1%

289

65,702

19,718

30.0%

5.2%

94.5%

95.2%

95.1%

10,844

1,990

18.4%

0.5%

97.8%

97.7%

97.8%

97.7%

Total

operating

portfolio

unconsolidated

1,157

208,489

54,152

26.0%

14.2%

92.9%

93.1%

93.2%

93.4%

2,419

372,541

273,042

73.3%

71.4%

92.1%

92.3%

92.6%

595

139,122

93,138

66.9%

24.3%

92.1%

90.9%

92.8%

91.6%

25,271

16,417

65.0%

4.3%

96.2%

95.3%

96.4%

95.7%

Total

operating

portfolio

owned

and

managed

3,089

536,934

382,597

71.3%

100.0%

92.3%

92.1%

92.7%

92.5%

748

100.0%

13.1%

286

27.6%

0.0%

Total owned and managed

3,095

537,968

383,424

71.3%

92.2%

91.9%

92.5%

92.3%

$203,206

100.0%

51.3%

$15,263,484

100.0%

54.5%

89,491

100.0%

22.6%

5,547,856

100.0%

19.8%

37,816

100.0%

9.5%

2,574,210

100.0%

9.2%

$330,513

100.0%

83.4%

$23,385,550

100.0%

83.5%

$131,156

$32,407

24.7%

8.2%

$9,529,048

$2,348,432

24.6%

8.4%

92,827

27,998

30.2%

7.0%

6,219,815

1,878,040

30.2%

6.7%

27,785

5,401

19.4%

1.4%

1,954,124

379,777

19.4%

1.4%

$251,768

$65,806

26.1%

16.6%

$17,702,987

$4,606,249

26.0%

16.5%

$334,362

$235,613

70.5%

59.5%

$24,792,532

$17,611,916

71.0%

62.9%

182,318

117,489

64.4%

29.6%

11,767,671

7,425,896

63.1%

26.5%

65,601

43,217

65.9%

10.9%

4,528,334

2,953,987

65.2%

10.6%

$582,281

$396,319

68.1%

100.0%

$41,088,537

$27,991,799

68.1%

100.0%

(16)

100.0%

53,153

100.0%

(149)

(41)

27.5%

17,203

4,744

27.6%

$582,116

$396,262

68.1%

$41,158,893

$28,049,696

68.1%

Value added properties -

consolidated

Value added properties -

unconsolidated

Total owned and managed

Square Feet

Gross Book Value

Prologis

Share ($)

Prologis

Share (%)

Europe

Asia

First Quarter NOI

Americas

Europe

Asia

Total

Value added properties -

consolidated

% of Total

Prologis

Share ($)

Prologis

Share (%)

% of Total

Total Owned

and Managed

Value added properties -

unconsolidated

Asia

Total

operating

portfolio

owned

and

managed

Unconsolidated

Europe

Asia

Total

operating

portfolio

unconsolidated

Americas

Occupied

Leased

Europe

Consolidated

Europe

Total

operating

portfolio

consolidated

Americas

Asia

Americas

Consolidated

Americas

Europe

Asia

Unconsolidated

Total Owned

and Managed

2012 Prologis

First Quarter 2012 Report

Operations Overview

Operating Metrics –

Owned and Managed

(A) See the Notes and Definitions for further explanations.

(B) Turnover costs

per

foot

represent

expected

costs

based

the

leases

signed

during

the

quarter,

rather

than

costs

incurred

presented

the

“Capital

Expenditures

Incurred”

section.

(C) This metric is calculated using the trailing twelve month NOI based on pro forma information for the pre-Merger period.

(square feet and dollars in thousands)

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2011

Q3 2011

Q4 2011

Q1 2012

1,360

1,810

1,365

1,017

552,370

547,380

538,400

522,571

New leases

11,841

11,545

13,663

10,023

2.2%

(0.1%)

0.9%

(0.6%)

Renewals

21,697

20,095

22,533

19,812

(0.3%)

1.5%

2.0%

(6.6%)

34,898

33,450

37,561

30,852

3.1%

(0.7%)

0.4%

1.7%

76.7%

76.3%

80.1%

78.3%

2.5%

1.6%

2.6%

$ 1.37

$ 1.36

$ 1.40

$ 1.14

27,721

27,969

32,159

28,227

Q2 2011

Q3 2011

Q4 2011

Q1 2012

(6.1%)

(8.6%)

(4.5%)

(1.1%)

24,880

33,611

32,297

17,100

0.04

0.06

0.03

24,741

23,934

29,418

28,598

21,682

19,136

23,674

16,401

Total turnover costs

46,423

43,070

53,092

44,999

71,303

76,681

85,389

62,099

N/A

11.5%

11.9%

69.0%

76.5%

66.5%

76.9%

49,215

58,687

56,770

47,734

Same Store Information (A)

Prologis share

Weighted average ownership percent

Leasing Activity

Total square feet of leases signed

Properties under development

Trailing four

quarters

gross

NOI

(C)

$ per square foot

Average occupancy

Total capital expenditures

Leasing commissions

Property improvements

Rental income

Rental expenses

Operating properties:

Weighted average customer retention

Percentage change in rental rates

Tenant improvements

Capital Expenditures Incurred

Square feet of leases signed:

Square feet of population

Percentage change:

Net operating income

Square feet of leasing activity

Turnover costs (per square foot) (B)

91.0%

89.3%

93.4%

90.7%

91.1%

90.0%

95.0%

91.0%

92.2%

91.6%

96.0%

92.2%

92.1%

96.2%

92.3%

80%

85%

90%

95%

100%

Total

Asia

Americas

Europe

Q2 2011 Q3 2011

Q4 2011 Q1 2012

Q2 2011 Q3 2011

Q4 2011 Q1 2012

Q2 2011 Q3 2011

Q4 2011 Q1 2012

Q2 2011 Q3 2011

Q4 2011 Q1 2012

Period

Ending

Occupancy

Region

2012 Prologis

First Quarter 2012 Report

Operations Overview

Customer

Information

–

Owned

and

Managed

(square feet and dollars in thousands)

10.7%

18.4%

2012 Prologis

First Quarter 2012 Report

Capital Deployment

Building Dispositions and Contributions (A)

(A) Amounts include industrial building dispositions, but do not include dispositions of wholly owned non-industrial buildings or land subject to ground leases of $6.0 million of which $5.0 million is Prologis’ share.

(B) Prologis share reflects actual ownership on consolidated funds. For contributions, this amount reflects cash proceeds to Prologis (net of units received for partial consideration).

(square feet and dollars in thousands)

2,307

$219,487

100.0%

Prologis North American Properties Fund XI

3,516

703

135,362

27,072

20.0%

Total Americas

5,823

3,010

354,849

246,559

69.5%

1,969

122,671

100.0%

ProLogis European Properties (C)

3,670

3,439

338,862

317,513

93.7%

ProLogis European Properties Fund II

1,937

576

141,268

41,985

29.7%

Total Europe

7,576

5,984

602,801

482,169

80.0%

Asia

Total Third Party Building Dispositions

13,399

8,994

$957,650

$728,728

76.1%

Total Americas

139

$16,875

$14,343

85.0%

Total Europe

139

16,875

14,343

85.0%

Asia

139

$16,875

$14,343

85.0%

13,538

9,133

$974,525

$743,071

76.2%

7.2%

Building Contributions and Dispositions to Co-Investment Ventures

Prologis Europe Logistics Venture

Total Asia

Weighted average stabilized cap rate

Americas

Europe

Total Contributions and Dispositions to the Co-Investment Ventures

Total Building Dispositions and Contributions

Square Feet

Total Proceeds

Prologis Share

of Proceeds ($)

Prologis Share

of Square Feet

Prologis Share of

Proceeds (%) (B)

Q1 2012

Total Asia

Prologis wholly owned

Third Party Building Dispositions

Americas

Europe

Prologis wholly owned

2012 Prologis

First Quarter 2012 Report

Capital Deployment

Third Party Building Acquisitions

Prologis wholly owned

182

$ 12,580

100.0%

Prologis Targeted U.S. Logistics Fund

389

107

28,690

7,913

27.6%

Total Americas

571

289

41,270

20,493

49.7%

Prologis European Properties Fund II

5,115

1,520

29.7%

Europe Logistics Venture I

347

24,293

3,644

15.0%

Total Europe

411

29,408

5,164

17.6%

Asia

982

360

$ 70,678

$ 25,657

36.3%

6.6%

Q1 2012

Prologis Share of

Acquisition Costs

($)

Prologis Share of

Acquisition Costs

(%)

Square Feet

Acquisition

Costs

Americas

Weighted average stabilized cap rate

Prologis Share

of Square

Feet

Total Third Party Acquisitions

Europe

(square feet and dollars in thousands)

2012 Prologis

First Quarter 2012 Report

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

2009

2010

2011

Americas

Europe

Asia

Capital Deployment

Development Starts

(A)

Value creation excludes fees or promotes that we may earn. See complete definition in the Notes and Definitions section.

(B)

This represents the economic gain realized from the sale of a Value Added Conversion property during the quarter. The gain represents the amount by which the sales proceeds exceeds our

original cost, which equated to 38% this quarter.

First Quarter 2012 Development Starts

Regional Break Out

Prologis share vs. Third Party

Build to Suit vs. Speculative

Historical Development Starts (TEI)

(in thousands, except percent and per square foot)

$313,877

$758,905

$1,016,763

$211,038

Americas

Europe

Asia

Prologis Share

Third Party

Speculative

Build to Suit

Square Feet

Total Expected

Investment

Cost Per

Square Foot

Leased % at

Start

Square Feet

Total Expected

Investment

Cost Per

Square Foot

Leased % at

Start

Square Feet

Total Expected

Investment

Americas

Brazil Fund and related joint ventures

317

$33,935

$107

100.0%

$8,484

$107

100.0%

25.0%

Total Americas

317

33,935

107

100.0%

8,484

107

100.0%

25.0%

Europe

264

14,255

0.0%

264

14,255

0.0%

100.0%

264

14,255

0.0%

264

14,255

0.0%

100.0%

Asia

961

162,848

169

100.0%

961

162,848

169

100.0%

Prologis China Logisitics Venture I

961

162,848

169

100.0%

961

162,848

169

100.0%

Total

1,542

$211,038

$137

82.9%

1,304

$185,587

$142

79.8%

84.6%

87.9%

Weighted average estimated stabilized yield (%)

8.3%

$17,516

Weighted average estimated cap rate at stabilization (%)

6.6%

$54,356

Prologis share of value creation on development starts (%) (A)

91.0%

Prologis share of value creation on development starts ($) (A)

$49,486

Prologis share of value creation realized on VACs (B)

22,844

Total Prologis share of estimated and realized value creation this quarter

$72,330

Pro forma NOI ($)

Estimated value creation ($) (A)

Total Asia

Total Q1 2012

Prologis wholly owned

Prologis Share ($) -

Prologis Share (%) -

Prologis wholly owned

Total Europe

Prologis wholly owned

2012 Prologis

First Quarter 2012 Report

Capital Deployment

Development Portfolio

(in thousands, except percent)

(A) Value creation excludes fees or promotes that we may earn. See complete definition in the Notes and Definitions section.

Sq Ft

TEI $

Sq Ft

TEI $

Sq Ft

TEI $

Sq Ft

TEI $

Prologis share of

TEI $

% of Total

Leased %

$ -

147

$7,858

$ -

147

$7,858

0.7%

0.0%

244

28,024

614

71,663

614

71,663

99,687

8.4%

36.8%

0.0%

415

26,103

415

26,103

2.2%

0.0%

U.S. Total

244

28,024

1,176

105,624

1,176

105,624

133,648

11.3%

22.2%

482

27,640

140

6,416

140

6,416

34,056

2.9%

52.9%

Americas total

726

55,664

1,316

112,040

1,316

112,040

167,704

14.2%

31.6%

319

31,183

447

36,027

447

36,027

67,210

5.7%

58.3%

507

38,836

3.3%

43.8%

201

9,957

201

9,957

0.8%

0.0%

Europe total

826

70,019

648

45,984

648

45,984

116,003

9.8%

45.4%

1,557

255,285

2,397

374,405

961

162,848

3,358

537,253

792,538

66.6%

66.0%

Asia total

1,557

255,285

2,397

374,405

961

162,848

3,358

537,253

792,538

66.6%

66.0%

3,109

380,968

4,361

532,429

961

162,848

5,322

695,277

1,076,245

90.6%

54.1%

0.0%

264

14,255

264

14,255

1.2%

0.0%

264

14,255

264

14,255

1.2%

0.0%

3,109

380,968

4,625

546,684

961

162,848

5,586

709,532

1,090,500

91.8%

52.4%

Prologis Targeted U.S. Logistics Fund

272

27,796

272

27,796

7,666

0.6%

0.0%

Brazil Fund and related joint ventures

295

31,749

1,279

120,681

1,279

120,681

152,430

76,215

6.4%

32.7%

Prologis European Properties Fund II

134

11,718

134

11,718

3,483

0.3%

100.0%

Prologis Targeted Europe Logistics Fund

5,286

1,717

0.1%

0.0%

Prologis China Logistics Venture I

168

6,435

1,078

58,665

1,078

58,665

65,100

9,764

0.8%

0.0%

463

38,184

1,732

165,481

1,078

58,665

2,810

224,146

262,330

98,845

8.2%

19.8%

3,572

$ 419,152

6,357

$ 712,165

2,039

$ 221,513

8,396

$ 933,678

$ 1,352,830

$ 1,189,345

100.0%

43.5%

3,283

$397,775

5,397

$619,584

1,118

$171,779

6,515

$791,363

$1,189,138

49.5%

Total development portfolio -

Prologis share (%)

91.9%

94.9%

84.9%

87.0%

54.9%

77.5%

77.6%

84.8%

87.9%

$17,785

$252,086

$162,731

$414,817

$432,602

$17,306

$203,126

$128,983

$332,109

$349,415

0.0%

18.5%

94.9%

35.1%

n/a

32.2%

47.1%

35.8%

7.8%

8.2%

7.7%

8.1%

8.0%

$108,226

Weighted average estimated cap rate at stabilization (%)

6.6%

$286,958

$247,748

86.3%

Under Development

Total development portfolio -

owned & managed

Total development portfolio -

Prologis share

Cost to complete ($)

Central

East

Northwest

United Kingdom

Europe

Southwest

Northern Europe

Southern Europe

Latin America

Europe

Central Europe

Prologis share of value creation (%) (A)

Prologis share of cost to complete ($)

Percent build to suit (based on Prologis share) (%)

Pre-leased percent (%)

Prologis share of value creation ($) (A)

Pro forma NOI ($)

Estimated value creation ($) (A)

Weighted average estimated stabilized yield (%)

Japan

Asia

Total global markets

Total Development Portfolio

Consolidated

Total Under

Development

U.S.

2013 Expected

Completion

2012 Expected

Completion

Pre-Stabilized

Developments

Total unconsolidated development portfolio

Total regional and other markets

Regional and other markets

Americas

Unconsolidated

Total consolidated development portfolio

2012 Prologis

First Quarter 2012 Report

Capital Deployment

Land Portfolio –

Owned and Managed

(A) Ordered by our share of current book value.

(dollars in thousands)

Region

Prologis

% of

Share (%)

Share ($)

Share (%)

Total

Atlanta

East

732

100.0%

$ 28,031

100.0%

1.4%

Baltimore/Washington

East

106

100.0%

14,868

100.0%

0.8%

Central Valley

Northwest

170

100.0%

16,409

100.0%

0.8%

Central & Eastern PA

East

339

100.0%

29,657

100.0%

1.5%

Chicago

Central

638

100.0%

60,506

100.0%

3.1%

Dallas/Ft. Worth

Central

470

100.0%

23,044

100.0%

1.2%

Houston

Central

100.0%

7,884

100.0%

0.4%

New Jersey/New York City

East

305

100.0%

127,056

100.0%

6.5%

Seattle

Northwest

100.0%

2,148

100.0%

0.1%

South Florida

East

377

100.0%

143,787

100.0%

7.3%

Southern California

Southwest

779

100.0%

123,167

100.0%

6.3%

Canada

230

100.0%

95,423

100.0%

4.9%

Mexico

1,009

100.0%

209,856

100.0%

10.7%

Brazil

376

188

50.0%

47,054

23,527

50.0%

1.2%

5,611

5,423

96.6%

928,890

905,363

97.5%

46.2%

Northern

100.0%

10,371

100.0%

0.5%

Southern

396

100.0%

69,396

100.0%

3.5%

Northern

193

100.0%

46,508

100.0%

2.4%

Northern

100.0%

57,790

100.0%

3.0%

CEE

893

100.0%

118,215

100.0%

6.0%

Southern

100

100.0%

19,960

100.0%

1.0%

981

100.0%

250,697

100.0%

12.8%

2,656

100.0%

572,937

100.0%

29.2%

China

75.0%

24,645

13,508

54.8%

0.7%

Japan

100.0%

171,809

100.0%

8.8%

146

131

89.7%

196,454

185,317

94.3%

9.5%

8,413

8,210

97.6%

1,698,281

1,663,617

98.0%

84.9%

CEE

338

100.0%

47,137

100.0%

2.4%

CEE

263

100.0%

42,941

100.0%

2.2%

Southern

107

100.0%

32,507

100.0%

1.7%

East

129

100.0%

25,566

100.0%

1.3%

CEE

100.0%

18,600

100.0%

0.9%

East

229

100.0%

13,082

100.0%

0.7%

Northwest

100.0%

8,480

100.0%

0.4%

Central

166

100.0%

7,229

100.0%

0.4%

Central

199

100.0%

6,692

100.0%

0.3%

Central

100.0%

4,919

100.0%

0.3%

Central

127

100.0%

4,469

100.0%

0.3%

Central

100.0%

425

100.0%

0.0%

1,807

100.0%

212,047

100.0%

10.9%

Total other markets

(11

markets)

Various

769

100.0%

83,149

100.0%

4.2%

Total

land

portfolio

owned

and

managed

10,989

10,786

98.2%

$ 1,993,477

$ 1,958,813

98.3%

100.0%

Original Cost Basis

$ 3,073,677

Indianapolis

Americas total

Total Owned &

Managed

Louisville

Total regional markets

Central Florida

Savannah

Slovakia

Memphis

Cincinnati

Czech Republic

Italy

Hungary

Belgium

France

Germany

Land by Market

Total Owned &

Managed

Current Book Value

Brazil

Mexico

Acres

Global markets

U.S.

Canada

Denver

Columbus

Regional markets (A)

Netherlands

Poland

Spain

Total global markets

China

Japan

Asia total

Europe total

United Kingdom

2012 Prologis

First Quarter 2012 Report

Capital Deployment

Land Portfolio –

Summary and Roll Forward

Investment at

Acres

% of Total

March 31, 2012

% of Total

6,889

62.7%

1,009,129

50.6%

Brazil Fund and related joint ventures

376

3.4%

47,054

2.4%

Total Americas

7,265

66.1%

1,056,183

53.0%

3,578

32.5%

740,840

37.2%

128

1.2%

183,352

9.2%

Prologis China Logistics Venture 1

0.2%

13,102

0.6%

Total Asia

146

1.4%

196,454

9.8%

10,989

100.0%

1,993,477

100.0%

Americas

Europe

Asia

Total

1,053,806

737,001

249,100

2,039,907

Acquisitions

14,584

Dispositions (A)

(3,982)

(6,877)

(10,859)

Development starts

(10,574)

(2,092)

(38,209)

(50,875)

Infrastructure costs

17,318

5,809

2,731

25,858

Reclasses

(13,556)

Impairment charges

(3,185)

Effect of changes in foreign exchange rates and other

(1,413)

6,999

(13,983)

(8,397)

1,056,183

740,840

196,454

1,993,477

Land Portfolio Summary

Prologis wholly owned

Americas

Total land portfolio - owned and managed

Prologis wholly owned

Europe

Asia

Prologis wholly owned

As of March 31, 2012

Land Roll Forward - Owned and Managed

As of December 31, 2011

(dollars in thousands)

(A) Includes 116 acres that were sold for $13.5 million in proceeds.

2012 Prologis

First Quarter 2012 Report

Private Capital

Detail Fund Information

(A)

These

funds

are

will

actively

investing

new

properties

through

acquisition

and/or

development

activities,

whereas

the

remaining

funds

not

expect

actively

investing

new

properties.

(B)

During the first quarter, this co-investment venture sold all but one of its operating buildings.

(C)

We have a 50% ownership interest in and consolidate an entity that in turn owns 50% of an entity that is accounted for on the equity method (“Brazil Fund”). The Brazil Fund develops industrial

properties

Brazil.

During

2011,

the

Brazil

Fund

sold

90%

three

properties

third

party

and

retained

10%

ownership

interest

the

properties

(“Brazil

JVs”).

Therefore,

effectively

own

25%

the

Brazil

Fund

and

the

operating

properties

the

Brazil

JVs,

which

are

included

our

Owned

and

Managed

operating

pool.

(D)

Values

represent

Prologis’

stepped

basis

and

may

not

equal

the

entities

stand

alone

financial

statements.

2012 Prologis

First Quarter 2012 Report

Private Capital

Fund Operating and Balance Sheet Information

(A)

Includes the unconsolidated property funds listed on the previous page.

(B)

Includes Prologis California and Prologis North American Industrial Fund II. We acquired all of the assets and liabilities of Prologis North America Industrial Fund II and our 50% share of the

assets and liabilities of Prologis California during the quarter.

(C)

Represents the entire entity, not our proportionate share.

(dollars in thousands)

2012 Prologis

First Quarter 2012 Report

Capitalization

Debt and Equity Summary

(A) Interest rate is based on the

effective

rate

(which

includes

the

amortization

premiums

and

discounts)

and

weighted

based

borrowings

outstanding.

Dividend

Security

Value

Series

Rate

Value

Common Stock

459.6

$36

$16,555

Series L

6.5%

$49

$2,146

Partnership Units

3.3

$36

119

Series M

6.8%

Total

462.9

$16,674

Series O

7.0%

Borrowings outstanding

850

Series P

6.9%

Outstanding letters of credit

Series Q

8.5%

100

$1,223

Series R

6.8%

125

Series S

6.8%

125

344

7.1%

$582

$1,567

Less:

Current availability

Unrestricted cash

Total liquidity

Market Equity

Preferred Stock

Liquidity

Price

Aggregate lender commitments

(dollars and shares in millions)

$64

$458

$33

$556

$113

$669

$405

$1,074

$708

65.9%

376

482

202

1,061

573

1,634

1,564

3,198

1,861

58.2%

374

409

643

578

2,004

1,070

3,074

835

3,909

3,205

82.0%

287

460

441

208

1,397

1,418

1,143

2,561

1,735

67.7%

638

314

953

111

1,064

1,203

2,267

1,264

55.8%

700

558

1,259

1,261

698

1,959

1,407

71.8%

900

247

1,148

1,212

265

1,477

1,227

83.1%

647

284

932

933

222

1,155

998

86.4%

683

694

695

402

1,097

796

72.6%

162

163

333

496

255

51.4%

143

153

155

139

294

193

65.6%

Subtotal

4,669

1,400

850

661

2,739

10,319

1,959

12,278

7,209

19,487

13,649

70.0%

(78)

103

136

108

79.4%

Subtotal

4,748

1,322

851

661

2,807

10,389

1,992

12,381

7,242

19,623

$13,757

70.1%

(484)

(5,382)

(5,866)

Prologis share of debt

$4,748

$1,322

$851

$661

$2,807

$10,389

$1,508

$11,897

$1,860

$13,757

$4,625

$1,322

$155

$30

$1,773

$7,905

$122

$8,027

$1,021

9,395

$9,048

276

477

770

1,216

1,986

528

2,887

2,514

167

175

116

533

291

123

412

154

995

1,684

182

1,617

1,866

Prologis share of debt

$4,748

$1,322

$851

$661

$2,807

$10,389

$1,508

$11,897

$1,860

$13,757

5.7%

4.8%

1.7%

2.0%

4.2%

4.6%

4.4%

4.6%

4.7%

5.0%

4.7%

5.3

1.3

2.6

2.3

5.0

4.3

2.2

3.9

4.1

4.0

Weighted average interest rate (A)

Weighted average remaining maturity in years

Unamortized net (discounts) premiums

Third party share of debt

Prologis share of debt by local currency

Dollars

Euro

GBP

2019

2020

2021

Yen

Other

Thereafter

2018

Investees

Consolidated

Investees

2016

Debt

Maturity

Debt

2012

2013

2014

2015

Total

Mortgage

Debt

2017

Facilities

Debt

Senior

Convertible

Credit

Other

Prologis

Unsecured

Consolidated

Total

Unconsolidated

Secured

Prologis

Share (%)

Prologis

Total

Share of

Debt

Total Debt

2012 Prologis

First Quarter 2012 Report

Capitalization

Debt Covenants and Other Metrics

(A)

These calculations are made in accordance with the respective debt agreements, may be different than other covenants or metrics presented and are not calculated in accordance with the

applicable SEC rules.

(B)

All metrics include both consolidated and Prologis share of unconsolidated investees.

(C)

See Notes and Definitions for calculation of amounts.

(dollars in thousands)

Covenant

Actual

Covenant

Actual

<60%

39.5%

<60%

39.5%

>1.5x

2.86x

>1.5x

2.85x

<40%

13.2%

<40%

13.2%

>150%

273.4%

>150%

273.4%

Covenant

Actual

<60%

39.7%

>1.5x

2.68x

>1.5x

3.33x

<35%

13.7%

>$10.0 billion

$15.9 billion

2012

2011

First Quarter

Fourth Quarter

43.6%

43.5%

18.5%

17.9%

228.5%

228.7%

2.11x

2.07x

8.86x

8.62x

Unencumbered

Encumbered

Total

14,705,821

8,732,882

23,438,703

787,029

1,898,563

34,758

1,933,321

419,432

247,241

84,271

17,912

102,183

Total consolidated

17,895,116

9,032,793

26,927,909

978,919

3,627,330

4,606,249

68,788

5,498

74,286

Gross real estate assets

18,942,823

12,665,621

31,608,444

Unsecured

Secured

Debt

Mortgage Debt

Total

7,579,959

2,738,957

10,318,916

601,013

1,357,862

1,958,875

107,935

1,742,573

1,850,508

Total debt -

at par

8,288,907

5,839,392

14,128,299

(82,861)

(395,020)

(477,881)

Total Prologis share of debt -

at par

8,206,046

5,444,372

13,650,418

26,679

76,451

103,130

(1,708)

(3,756)

(5,464)

9,116

Total debt, net of premium (discount)

8,231,017

5,526,183

13,757,200

Our share of premium (discount) -

unconsolidated

Premium (discount) -

consolidated

Secured and Unsecured Debt as of March 31, 2012

Prologis debt

Consolidated investees debt

Our share of unconsolidated investees debt

Third party share of premium (discount)

Third party share of consolidated debt

Unconsolidated development portfolio and land -

Prologis' share

Operating portfolio

Unconsolidated operating portfolio -

Prologis' share

Encumbrances as of March 31, 2012

Secured debt as % of gross real estate assets

Unencumbered gross real estate assets to unsecured debt

Consolidated:

Development portfolio

Land

Other real estate investments

Notes receivable backed by real estate

Assets held for sale

Covenants as of March 31, 2012 (A)

Minimum net worth

Fixed charge coverage ratio

Maximum secured debt to adjusted total assets

Unencumbered assets ratio to unsecured debt

Fixed charge coverage ratio

Maximum secured debt to total asset value

New Prologis Indenture

Legacy AMB Indenture

Debt as % of gross real estate assets

Debt/Core EBITDA

Unencumbered debt service coverage ratio

Outstanding indebtedness to adjusted total assets

Maximum consolidated leverage to total asset value

Global Line

Debt Metrics (A) (B) (C)

Fixed charge coverage ratio

2012 Prologis

First Quarter 2012 Report

Capitalization

Assets Under Management

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Europe

31.9%

Asia

12.0%

$ 31,013

$ 45,355

Debt

$13,757

Committed Equity/Investment

$2,341

Americas

56.1%

$ 45,355

Direct owned

and other

assets

$23,729

Equity

Cap

$16,674

AUM

Private

Capital

$21,626

Preferred Shares

$582

Investors' share of assets

in JVs/funds

$12,001

Prologis share of assets in

JVs/funds

$7,284

Total

Enterprise

Value

$31,013

Total Enterprise Value

Total AUM by Division

Assets Under Management

(dollars in millions)

2012 Prologis

First Quarter 2012 Report

229,391

14,609,221

207,569

830,276

95.4%

69,456

5,273,447

90,989

363,956

94.4%

14,427

2,574,210

178

37,816

151,264

95.0%

17,221

68,884

313,274

22,456,878

336,374

353,595

1,414,380

95.1%

11,207

654,263

(4,363)

31.6%

3,964

274,409

(1,498)

11.0%

15,171

928,672

(5,861)

26.2%

328,445

23,385,550

330,513

353,595

1,414,380

91.9%

32,444

2,348,432

32,407

129,628

91.9%

19,718

1,878,040

27,998

111,992

94.5%

1,990

379,777

191

5,401

21,604

97.7%

228

54,152

4,606,249

65,806

65,863

263,452

93.1%

382,597

27,991,799

396,319

419,458

1,677,832

92.1%

Square Feet

726

46,888

55,664

4,391

45.4%

826

60,490

70,019

5,463

26.9%

1,557

252,781

255,285

164

18,296

80.2%

57.9%

1,316

78,244

112,040

7,944

912

25,097

60,239

5,318

3,358

323,529

537,253

160

38,214

8,695

787,029

1,090,500

125

79,626

863

41,258

83,880

10,163

3,810

5,200

409

187

3,726

9,765

868

1,106

48,794

98,845

11,440

9,801

835,823

1,189,345

121

91,066

Prologis share of unconsolidated operating portfolio

Americas

Asia

Properties under development

Total operating portfolio

CONSOLIDATED

Prestabilized

Annualized NOI

CONSOLIDATED OPERATING PORTFOLIO

First Quarter

NOI (Actual)

Americas

Gross Book Value

Americas

Europe

Prologis interest in unconsolidated operating portfolio

UNCONSOLIDATED OPERATING PORTFOLIO (Prologis Share)

Europe

Properties generating net operating loss

Sub-total

Pro forma adjustment for mid-quarter acquisitions/development completions

Total consolidated portfolio

Square Feet

Real Estate Operations

Europe

Asia

Properties generating net operating income

Percent

Occupied

GBV per Sq. Ft.

First Quarter

NOI (Pro Forma)

Development

TEI per Sq Ft.

Percent

Occupied

Investment

Balance

TEI

Pro forma adjustment for mid-quarter acquisitions/development completions (A)

Annualized Pro

Forma NOI

Europe

Asia

Americas

Europe

Americas

UNCONSOLIDATED (Prologis Share)

Prologis interest in unconsolidated development portfolio

Development Platform (see development pages)

Prologis share of unconsolidated development portfolio

Europe

Asia

Total development portfolio

Total consolidated portfolio

Asia

Americas

Net Asset Value

Components

(A) This adjustment also includes pro-forma adjustments for the 100% of the NOI related to Prologis California and Prologis North America Fund II.

(in thousands, except for percentages and per square foot)

2012 Prologis

First Quarter 2012 Report

Net Asset Value

Components -

Continued

(in thousands)

343,736

91,957

512,890

419,432

57,897

163,679

247,241

55,866

Investments in and advances to other unconsolidated investees

386,310

98,337

2,377,345

674,084

621,211

73,691

168,495

395,045

833,005

2,765,531

37,759

3,073,677

1,933,321

25,492

1,958,813

Private capital revenue

32,357

129,428

Private capital expenses

(16,881)

(67,524)

Profit margin

15,476

61,904

3,113

10,318,916

Consolidated investee debt - at par

1,958,875

1,850,508

14,128,299

582,200

14,710,499

Outstanding shares of common stock

459,555

Preferred stock

Total debt and preferred stock

Debt and Preferred Stock

Private capital

Development management income

As of March 31, 2012

Prologis debt - at par

Prologis share of unconsolidated debt - at par

Subtotal debt

Current book value of land

Total

Private Capital / Development Management

First Quarter

Annualized

Prologis share of book value of land in unconsolidated investees

Original land basis

Tenant security deposits

Other liabilities

Noncontrolling interests

UNCONSOLIDATED

Prologis share of net assets (liabilities)

Land

Investment Balance

Total liabilities and noncontrolling interests

Value added tax and other tax liabilities

Deferred income taxes

Restricted cash

Deposits, prepaid assets and other tangible assets

Other real estate investments

Accounts receivable

Notes receivable backed by real estate

Assets held for sale, net of liabilities

Total other assets

Other liabilities

Prologis receivable from unconsolidated co-investment ventures

Accounts payable and other current liabilities

Prologis' share of value added operating propertie

Cash and cash equivalents

Balance Sheet and Other Items

As of March 31, 2012

CONSOLIDATED

Other assets

Notes and Definitions

2012 Prologis

First Quarter 2012 Report

For purposes of our Consolidated Statements of FFO, we do not segregate discontinued operations.

In addition, we include the gains or losses from disposition and impairment charges of land parcels

and development properties in the calculation of FFO, including those classified as discontinued

operations.

Please refer to our annual and quarterly financial statements filed with the Securities and

Exchange Commission on Forms 10-K and 10-Q and other public reports for further

information about us and our business. Certain amounts from previous periods presented in

the Supplemental Information have been reclassified to conform to the current presentation.

Our real estate operations segment represents the direct, long-term ownership of industrial

properties. Our investment strategy in this segment focuses primarily on the ownership and

leasing

industrial

properties

global

and

regional

markets.

Our

intent

hold

and

use

these properties; however, depending on market and other conditions, we may contribute or

sell

these

properties

co-investment

ventures

sell

third

parties.

When

contribute

an unconsolidated co-investment venture or sell properties we have developed, we recognize

FFO to the extent the proceeds received exceed our original investment (i.e. prior to

depreciation) and present the results as

Gains (Losses) on Acquisition and Dispositions of

Investments in Real Estate, Net.

We have industrial properties that are currently under

development and land available for development that are part of this segment as well.

We may develop the land or sell to third parties, depending on market conditions,

customer demand

and

other

factors.

The

private

capital

segment

represents

the

long-

term

management of unconsolidated co-investment ventures and other joint ventures.

In June 2011, AMB Property Corporation (“AMB”) and ProLogis combined through a

merger of equals (the “Merger”). As a result of the Merger, each outstanding ProLogis

common share was converted into 0.4464 shares of AMB common stock. At the time

of the Merger, AMB changed its name to Prologis, Inc. After consideration of all

applicable factors pursuant to the business combination accounting rules, the Merger

resulted in a reverse acquisition in which AMB was considered the “legal acquirer” and

ProLogis was considered the “accounting acquirer”. As such, the historical results of

AMB have not been included in the 2011 results.

During the second quarter of 2011, we increased our ownership of ProLogis European

Properties (“PEPR”), through open market purchases and a mandatory tender offer.

Pursuant to the tender offer and open-market purchases made during the tender

period, we acquired additional ordinary units and convertible preferred units of PEPR

that were funded through borrowings under our existing credit facilities and a new

€500 million bridge facility, which was subsequently repaid with proceeds received

from our June equity offering. After completion of the tender offer, we began

consolidating PEPR.

During the first quarter of 2012, we acquired our partner’s 63% interest in and now

own 100% of Prologis North American Industrial Fund II. We also acquired our share

of the assets and liabilities in Prologis California. These two transactions increased our

real estate by $2.1 billion and debt by $1.0 billion.

Acquisition cost

represents economic cost and not necessarily what is capitalized. It

includes the initial purchase price; the effects of marking assumed debt to market; if

applicable, all due diligence and closing costs, lease intangibles; and estimated

acquisition capital expenditures including leasing costs to achieve stabilization.

Assets Held For Sale and Discontinued Operations.

During the three months ended March 31, 2012, we disposed of 70 properties

aggregating 7.9 million square feet to third parties. During all of 2011, we disposed of

land subject to ground leases and 94 properties aggregating 10.7 million square feet to

third parties.

As of March 31, 2012, we had

land and nine operating properties that met the criteria to be presented as held for sale.

The amounts included in Assets Held for Sale include real estate investment balances

and the related assets and liabilities for each property.

The operations of the properties held for sale and properties that were disposed of to third parties

during a period, including the aggregate net gains or losses recognized upon their disposition, are

presented as discontinued operations in our Consolidated Statements of Operations for all periods

presented. The income attributable to these properties was as follows (in thousands):

Three Months Ended

March 31,

2012

2011

Rental income ……………………………………………………………………………

$ 12,907

$ 19,658

Rental expenses………………………………………………………………………….

(2,719)

(6,063)

Depreciation and amortization………………………………………………………….

(3,024)

(3,736)

Interest expense…………………………………………………………………………

(35)

Income attributable to disposed properties and assets held for sale

$ 7,164

$ 9,824

Assets Under Management (“AUM”)

represents the estimated value of the real estate we own or

manage through our consolidated entities and unconsolidated investees. We calculate AUM by adding

the noncontrolling interests’ share of the estimated fair value of the real estate investment to our share

of total market capitalization.

Notes and Definitions

Three Months Ended

March 31,

2012

2011 (a)

Net earnings (loss)

$ 202,412

$ (46,616)

Noncontrolling interest attributable to exchangeable limited partnership units

1,003

Interest expense on exchangeable debt assumed exchanged

4,216

Adjusted net earnings (loss) -

Diluted

$ 207,631

$ (46,616)

Weighted average common shares outstanding -

Basic (b)

459,203

254,698

Incremental weighted average effect on exchange of limited partnership units

3,347

Incremental weighted average effect of stock awards

1,678

Incremental weighted average effect on exchange of certain exchangeable debt

11,879

Weighted average common shares outstanding -

Diluted (b)

476,107

254,698

Net earnings (loss) per share -

Basic

$ 0.44

$ (0.18)

Net earnings (loss) per share -

Diluted

$ 0.44

$ (0.18)

FFO, as defined by Prologis

$ 262,072

$ 62,146

Noncontrolling interest attributable to exchangeable limited partnership units

1,003

Interest expense on exchangeable debt assumed exchanged

4,216

FFO -

Diluted, as defined by Prologis

$ 267,291

$ 62,213

Weighted average common shares outstanding -

Basic (b)

459,203

254,698

Incremental weighted average effect of exchange of limited partnership units

3,347

339

Incremental weighted average effect of stock awards

1,678

1,163

Incremental weighted average effect of exchange of certain exchangeable debt

11,879

Weighted average common shares outstanding -

Diluted (b)

476,107

256,200

FFO per share -

Diluted, as defined by Prologis

$ 0.56

$ 0.24

Core FFO

$ 184,765

$ 74,407

Noncontrolling interest attributable to exchangeable limited partnership units

1,003

Interest expense on exchangeable debt assumed exchanged

4,216

Core FFO –

Diluted

$ 189,984

$ 74,474

Weighted average common shares outstanding -

Basic (b)

459,203

254,698

Incremental weighted average effect of exchange of limited partnership units

3,347

339

Incremental weighted average effect of stock awards

1,678

1,163

Incremental weighted average effect of exchange of certain exchangeable debt

11,879

Weighted average common shares outstanding -

Diluted (b)

476,107

256,200

Core FFO per share -

Diluted

$ 0.40

$ 0.29

(a) In periods with a net loss, the inclusion of any incremental shares is anti-dilutive, and therefore, both basic and diluted

shares are the same.

(b) The historical Prologis shares outstanding have been adjusted by the Merger exchange ratio of 0.4464.

calculate Core EBITDA beginning with consolidated net earnings(loss) and removing the affect of

interest, income taxes, depreciation and amortization, impairment charges, gains or losses from the

acquisition or disposition of investments in real estate, gains or losses on early extinguishment of

debt and derivative contracts (including cash charges), similar adjustments we make to our Core

FFO (see definition below), and other non-cash charges or gains (such as stock based

compensation amortization and unrealized gains or losses on foreign currency and derivative

activity), including our share of these items from unconsolidated investees.

non-cash depreciation and amortization expense and other items (including stock-based

compensation amortization and certain unrealized gains and losses), gains or losses from the

acquisition or disposition of investments in real estate, items that affect comparability, and other

significant non-cash items. We also adjusted Core EBITDA to include a pro forma adjustment to

reflect a full period of NOI on the operating properties we acquire in a significant transaction, such

as the Merger, PEPR acquisition, acquisition of assets from Prologis California and the acquisition

of Prologis North American Industrial Fund II. In addition, we excluded Merger, Acquisition and

Other Integration Expenses and costs associated with the hurricane and tsunami that occurred in

first quarter 2011 in Japan. By excluding interest expense EBITDA allows investors to measure our

operating performance independent of our capital structure and indebtedness and, therefore,

allows for a more meaningful comparison of our operating performance to that of other

companies, both in the real estate industry and in other industries. Gains and losses on the early

extinguishment of debt generally included the costs of repurchasing debt securities. Although

difficult to predict, these items may be recurring given the uncertainty of the current economic

climate and its adverse effects on the real estate and financial markets. While not infrequent or

unusual in nature, these items 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.

As a liquidity measure, we believe that Core EBITDA helps investors to analyze our ability to

meet interest payment obligations and to make quarterly preferred share dividends. We believe

that investors should consider Core EBITDA in conjunction with net income (the primary measure

of our performance) and the other required Generally Accepted Accounting Principles (“GAAP”)

measures of our performance and liquidity, to improve their understanding of our operating results

and liquidity, and to make more meaningful comparisons of our performance against other

companies. By using Core EBITDA an investor is assessing the earnings generated by our

operations, but not taking into account the eliminated expenses or gains incurred in connection with

such operations. As a result, Core EBITDA has limitations as an analytical tool and should be used

in conjunction with our required GAAP presentations. Core EBITDA does not reflect our historical

cash expenditures or future cash requirements for working capital, capital expenditures

distribution requirements or contractual commitments. Core EBITDA, also does not reflect the

cash required to make interest and principal payments on our outstanding debt.

While EBITDA is a relevant and widely used measure of operating performance and liquidity, it

does not represent net income or cash flow from operations as defined by GAAP and it should not

be considered as an alternative to those indicators in evaluating operating performance or liquidity.

Further, our computation of Core EBITDA may not be comparable to EBITDA reported by other

companies. We compensate for the limitations of Core EBITDA by providing investors with financial

statements prepared according to GAAP, along with this detailed discussion of Core EBITDA and a

reconciliation of Core EBITDA to consolidated net earnings (loss), a GAAP measurement.

2012 Prologis

use

Core

EBITDA

measure

both

our

operating

performance

and

liquidity.

core EBITDA.

First Quarter 2012 Report

We consider Core EBITDA to provide investors relevant and useful information because it permits

investors to view income from operations on an unleveraged basis before the effects of income tax,

Calculation

Per

Amounts

follows

(in

thousands,

except

per

amounts):

2012 Prologis

First Quarter 2012 Report

FFO is not meant to represent a comprehensive system of financial reporting and does not present,

nor do we intend it to present, a complete picture of our financial condition and operating

performance. We believe net earnings computed under GAAP remains the primary measure of

performance and that FFO is only meaningful when it is used in conjunction with net earnings

computed under GAAP. Further, we believe our consolidated financial statements, prepared in

accordance with GAAP, provide the most meaningful picture of our financial condition and our

operating performance.

NAREIT’s FFO measure adjusts net earnings computed under GAAP to exclude historical cost

depreciation and gains and losses from the sales and impairment charges of previously depreciated

properties. We agree that these two NAREIT adjustments are useful to investors for the following

reasons:

(i) historical cost accounting for real estate assets in accordance with GAAP assumes,

through depreciation charges, that the value of real estate assets diminishes

predictably over time. NAREIT stated in its White Paper on FFO “since real estate

asset values have historically risen or fallen with market conditions, many industry

investors have considered presentations of operating results for real estate companies

that use historical cost accounting to be insufficient by themselves.” Consequently,

NAREIT’s definition of FFO reflects the fact that real estate, as an asset class,

generally appreciates over time and depreciation charges required by GAAP do not

reflect the underlying economic realities.

(ii) REITs were created as a legal form of organization in order to encourage public ownership of

real estate as an asset class through investment in firms that were in the business of long-

term ownership and management of real estate. The exclusion, in NAREIT’s definition of

FFO, of gains and losses from the sales of previously depreciated operating real estate

assets allows investors and analysts to readily identify the operating results of the long-term

assets that form the core of a REIT’s activity and assists in comparing those operating

results between periods. We include the gains and losses from dispositions of land and

development properties, as well as our proportionate share of the gains and losses from

dispositions recognized by our unconsolidated investees, in our definition of FFO.

Our FFO Measures

At the same time that NAREIT created and defined its FFO measure for the REIT industry, it also

recognized that “management of each of its member companies has the responsibility and authority

to publish financial information that it regards as useful to the financial community.” We believe

stockholders, potential investors and financial analysts who review our operating results are best

served by a defined FFO measure that includes other adjustments to net earnings computed under

GAAP in addition to those included in the NAREIT defined measure of FFO. Our FFO measures

are used by management in analyzing our business and the performance of our properties and we

believe that it is important that stockholders, potential investors and financial analysts understand

the measures management uses.

We use these FFO measures, including by segment and region, to: (i) evaluate our performance

and the performance of our properties in comparison to expected results and results of previous

periods, relative to resource allocation decisions; (ii) evaluate the performance of our management;

(iii) budget and forecast future results to assist in the allocation of resources; (iv) assess our

performance as compared to similar real estate companies and the industry in general; and (v)

evaluate how a specific potential investment will impact our future results. Because we make

decisions with regard to our performance with a long-term outlook, we believe it is appropriate to

remove the effects of short-term items that we do not expect to affect the underlying long-term

performance of the properties. The long-term performance of our properties is principally driven by

rental income. While not infrequent or unusual, these additional items we exclude in calculating

See below for the detailed calculations for the three months ended for the respective period

(dollars in thousands):

is our estimate of the gross real estate, which could be acquired

through the use of the equity commitments from our property fund or co-investment venture

partners, plus our funding obligations and estimated debt capitalization.

FFO is a non-GAAP measure that is commonly used in the real estate industry. The most directly

comparable GAAP measure to FFO is net earnings. Although the National Association of Real

Estate Investment Trusts (“NAREIT”) has published a definition of FFO, modifications to the

NAREIT calculation of FFO are common among REITs, as companies seek to provide financial

measures that meaningfully reflect their business.

Debt Metrics.

Committed Equity/Investment

FFO; FFO, as defined by Prologis; Core FFO; AFFO (collectively referred to as “FFO”).

FFO, as defined by Prologis,

Three Months Ended

Mar. 31

Dec. 31

2012

2011

Debt as a % of gross real estate assets:

Total debt - at par

14,128,299

13,888,412

Less: cash and cash equivalents

(343,736)

(176,072)

Total debt, net of cash

13,784,563

13,712,340

Gross real estate assets

31,608,444

31,492,422

Debt as a % of gross real estate assets

43.6%

43.5%

Secured debt as a % of gross real estate assets:

Secured debt - at par

5,839,392

5,626,474

Gross real estate assets

31,608,444

31,492,422

Secured debt as a % of gross real estate assets

18.5%

17.9%

Unencumbered gross real estate assets to unsecured debt:

Unencumbered gross real estate assets

18,942,823

18,896,910

Unsecured debt - at par

8,288,907

8,261,938

Unencumbered gross real estate assets to unsecured debt

228.5%

228.7%

Fixed Charge Coverage ratio:

Core EBITDA

388,869

397,629

Interest expense

133,447

129,341

Amortization and write-off of deferred loan costs

(4,956)

(4,316)

Amortization of debt premium (discount), net

6,737

5,682

Capitalized interest

13,619

14,090

Preferred stock dividends

10,567

10,276

Our share of fixed charges from unconsolidated entities

24,474

37,003

Total fixed charges

183,888

192,076

Fixed charge coverage ratio

2.11x

2.07x

Debt to Core EBITDA:

Total debt, net of cash

13,784,563

13,712,340

Core EBITDA-annualized

1,555,476

1,590,516

Debt to Core EBITDA ratio

8.86x

8.62x

are subject to significant fluctuations from period to period that

cause 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.

Notes and Definitions

2012 Prologis

First Quarter 2012 Report

We use our FFO measures as supplemental financial measures of operating performance. 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.

FFO, as defined by Prologis

To arrive at FFO, as defined by Prologis, we adjust the NAREIT defined FFO measure to exclude:

(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 GAAP earnings that is excluded from our defined FFO measure;

(iii)

foreign currency exchange gains and losses resulting from debt transactions between us and

our foreign consolidated subsidiaries and our foreign unconsolidated investees;

(iv)

foreign currency exchange gains and losses from the remeasurement (based on current

foreign currency exchange rates) of certain third party debt of our foreign consolidated

subsidiaries and our foreign unconsolidated investees; and

(v)

mark-to-market adjustments associated with derivative financial instruments.

We calculate FFO, as defined by Prologis for our unconsolidated investees on the same basis as

we calculate our FFO, as defined by Prologis.

We believe investors are best served if the information that is made available to them allows them

to align their analysis and evaluation of our operating results along the same lines that our

management uses in planning and executing our business strategy.

Core FFO

In addition to FFO, as defined by Prologis, we also use Core FFO. To arrive at Core FFO, we

adjust FFO, as defined by Prologis, to exclude the following recurring and non-recurring items that

we recognized directly or our share recognized by our unconsolidated investees to the extent they

are included in FFO, as defined by Prologis:

gains or losses from acquisition, contribution or sale of land or development properties;

income tax expense related to the sale of investments in real estate;

impairment charges recognized related to our investments in real estate (either directly

or through our investments in unconsolidated investees) generally as a result of our

change in intent to contribute or sell these properties;

impairment charges of goodwill and other assets;

gains or losses from the early extinguishment of debt;

merger, acquisition and other integration expenses; and

expenses related to natural disasters

We believe it is appropriate to further adjust our FFO, as defined by Prologis for certain recurring

items as they were driven by transactional activity and factors relating to the financial and real

estate markets, rather than factors specific to the on-going operating performance of our

properties or investments. The impairment charges we recognized were primarily based on

valuations of real estate, which had declined due to market conditions, that we no longer expected

to hold for long-term investment. We currently have and have had over the past several years a

stated priority to strengthen our financial position. We expect to accomplish this by reducing our

debt, our investment in certain low yielding assets, such as land that we decide not to develop and

our exposure to foreign currency exchange fluctuations. As a result, we have sold to third parties or

contributed to unconsolidated investees real estate properties that, depending on market

conditions, might result in a gain or loss. The impairment charges related to goodwill and other

assets that we have recognized were similarly caused by the decline in the real estate markets.

Also in connection with our stated priority to reduce debt and extend debt maturities, we have

purchased portions of our debt securities. As a result, we recognized net gains or losses on the

early extinguishment of certain debt due to the financial market conditions at that time.

We have also adjusted for some non-recurring items. The merger, acquisition and other integration

expenses include costs we incurred in 2011 and that we expect to incur in 2012 associated with the

Merger and PEPR Acquisition and the integration of our systems and processes. We have not

adjusted for the acquisition costs that we have incurred as a result of routine acquisitions but only

the costs associated with significant business combinations that we would expect to be infrequent

in nature. Similarly, the expenses related to the natural disaster in Japan that we recognized in

2011 are a rare occurrence but we may incur similar expenses again in the future.

We analyze our operating performance primarily by the rental income of our real estate and the

revenue driven by our private 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. As a result, although these items have had 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.

We use Core FFO, including by segment and region, to: (i) evaluate our performance and the

performance of our properties in comparison to expected results and results of previous periods,

relative to resource allocation decisions; (ii) evaluate the performance of our management; (iii)

budget and forecast future results to assist in the allocation of resources; (iv) provide guidance to

the financial markets to understand our expected operating performance; (v) assess our operating

performance as compared to similar real estate companies and the industry in general; and (vi)

evaluate how a specific potential investment will impact our future results. Because we make

decisions with regard to our performance with a long-term outlook, we believe it is appropriate to

remove the effects of items that we do not expect to affect the underlying long-term performance of

the properties we own. As noted above, we believe the long-term performance of our properties is

principally driven by rental income. We believe investors are best served if the information that is

made available to them allows them to align their analysis and evaluation of our operating results

along the same lines that our management uses in planning and executing our business strategy.

AFFO

To arrive at AFFO, we adjust Core FFO to further exclude; (i) straight-line rents; (ii) amortization of

above- and below-market lease intangibles; (iii) recurring capital expenditures; (iv) amortization of

management contracts; (v) amortization of debt premiums and discounts, net of amounts

capitalized, and; (vi) stock compensation expense.

We believe AFFO provides a meaningful indicator of our ability to fund cash needs, including cash

distributions to our stockholders.

Limitations on Use of our FFO Measures

While we believe our defined 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, they are two of many measures we use when analyzing our business.

Some of these limitations are:

The current income tax expenses that are excluded from our defined 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. Further, the amortization of capital expenditures

Notes and Definitions

2012 Prologis

First Quarter 2012 Report

Notes and Definitions

Global

Markets

comprise

the

largest,

most

liquid

markets

benefiting

from

demand

tied

global

trade.

These

markets

are

defined

large

population

centers

with

high

consumption

per

capita

and

typically

feature

major

seaports,

airports,

and

other

transportation

infrastructure

tied

global

trade.

While

initial

returns

might

lower,

global

markets

tend

outperform

overall

markets

terms

growth

and

total return.

Interest Expense

consisted of the following (in thousands):

Market

Equity

defined

the

total

number

outstanding

our

common

stock

and common limited

partnership units multiplied by the closing price per share of our common stock at period end.

Merger,

Acquisition

and

Other

Integration

Expenses.

connection

with

the

Merger,

have incurred

significant transaction, integration, and transitional costs. These costs include investment banker advisory fees;

legal, tax, accounting and valuation fees; termination and severance costs (both cash and stock based

compensation awards) for terminated and transitional employees; system conversion; and other integration

costs. Certain of these costs were obligations of AMB and were expensed prior to the closing of the Merger by

AMB. The remainder of the costs are being expensed by us as incurred, which in some cases will be through

the end of 2012. In addition, we have included costs associated with the acquisition of a controlling interest in

PEPR and reduction in workforce charges associated with dispositions made in 2011. The following is a

breakdown of the costs incurred:

Net

Asset

Value

(“NAV”).

consider

NAV

useful

supplemental

measure

our

operating

performance because it enables both management and investors to estimate the fair value of our business.

The assessment of the fair value of a particular segment of our business is subjective in that it involves

estimates and can be calculated using various methods. Therefore, in this supplemental report, we have

presented the financial results and investments related to our business segments that we believe are important

in calculating our NAV but have not presented any specific methodology nor provided any guidance on the

assumptions or estimates that should be used in the calculation.

The

components

NAV

not

consider

the

potential

changes

rental

and

fee

income

streams or the

franchise value associated with our global operating platform, private capital platform, or development platform.

Net

Gains

Acquisitions

and

Dispositions

Investments

Real

Estate

includes

the

gains we

recognized from the acquisition of our share of the real estate properties in one of our unconsolidated co-

investment

ventures,

Prologis

California

the

first

quarter

2012.

and leasing costs necessary to maintain the operating performance of industrial properties are

not reflected in FFO.

Gains or losses from property acquisitions and dispositions or impairment charges related to

expected dispositions represent changes in the value of the properties. By excluding these gains

and losses, FFO does not capture realized changes in the value of acquired or disposed

properties arising from changes in market conditions.

The deferred income tax benefits and expenses that are excluded from our defined 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 defined 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 defined 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 impairment charges of goodwill and other assets that we exclude from Core FFO, have been

or may be realized as a loss in the future upon the ultimate disposition of the related investments

or other assets through the form of lower cash proceeds.

The gains and losses on extinguishment of debt that we exclude from our Core FFO, may

provide a benefit or cost to us as we may be settling our debt at less or more than our future

obligation.

The Merger, acquisition and other integration expenses and the natural disaster expenses

that we exclude from Core FFO are costs that we have incurred.

We compensate for these limitations by using our FFO measures only in conjunction with net

earnings computed under GAAP when making our decisions. To assist investors in

compensating for these limitations, we reconcile our defined FFO measures to our net

earnings computed under GAAP. This information should be read with our complete financial

statements prepared under GAAP.

Fixed Charge Coverage

is defined as Core EBITDA divided by total fixed charges. Fixed

charges consist of net interest expense adjusted for amortization of finance costs and debt

discount (premium), capitalized interest, and preferred stock dividends. Prologis uses fixed

charge coverage to measure its liquidity. Prologis believes that

the fixed charge coverage is

relevant and useful to investors because it allows fixed income investors to measure Prologis’

ability to meet its interest payments on outstanding debt, make distributions to its preferred

unitholders and pay dividends to its preferred stockholders. Prologis’

computation of fixed

charge coverage is not calculated in accordance with applicable SEC rules and may not be

comparable to fixed charge coverage reported by other companies.

General and Administrative Expenses (“G&A”)

Three Months Ended

March 31,

2012

2011

Gross G&A expense

101,814

66,543

Reported as rental expense

(8,158)

(4,911)

Reported as private capital expenses

(16,881)

(10,552)

Capitalized amounts

(16,616)

(11,897)

Net G&A

60,159

39,183

Gross interest expense

148,847

89,023

Amortization of discount (premium), net

(6,737)

7,838

Amortization of deferred loan costs

4,956

4,997

Interest expense before capitalization

147,066

101,858

Capitalized amounts

(13,619)

(11,331)

Net interest expense

133,447

90,527

Three Months Ended

March 31,

2012

2011

Termination, severance and transitional employee costs

7,685

3,807

Professional fees

2,216

2,181

Office closure, travel and other costs

827

Total

10,728

5,988

Three Months Ended

March 31,

2012

2011

consisted of the following (in thousands):

Net

Operating

Income

(“NOI”)

represents

rental

income

less

rental

expenses.

Operating

Portfolio

includes

stabilized

operating

industrial

properties

own

that

manage

and

are

owned

unconsolidated

investee

accounted

for

the

equity

method

accounting.

Operating

Segments

–

Real

Estate

Operations

represents

the

direct

long-term

ownership

industrial

properties,

including

land

and

the

development

properties.

Operating

Segments

–

Private

Capital

represents

the

management

unconsolidated

property

funds/co-

investment ventures and other joint ventures and the properties they own.

Pre-stabilized

Development

represents

properties

that

are

complete

but

have

not

yet

reached

Stabilization.

Pro

forma

NOI

reflects

the

NOI

for

full

quarter

operating

properties

that

were

acquired,

contributed

stabilized during the quarter. Pro forma NOI for the properties in our development portfolio is based on current

total expected investment and an estimated stabilized yield.

A reconciliation of our rental income and rental expenses, computed under GAAP, to adjusted net operating

income

(NOI)

for

the

operating

portfolio

for

purposes

the

Net

Asset

Value

calculation

follows:

Net termination fees generally represent the gross fee negotiated at the time a customer is allowed to

terminate its lease agreement offset by that customer's rent leveling asset or liability, if any, that has been

previously recognized under GAAP. Removing the net termination fees from rental income allows for the

calculation of pro forma NOI to include only rental income that is indicative of the property's recurring

operating performance.

The

actual

NOI

for

properties

that

were

contributed

and

not

part

discontinued

operations

during

the

three-month period is removed.

Straight-lined rents and amortization of above and below market leases are removed from rental income

computed under GAAP to allow for the calculation of a cash yield.

(a)

(b)

(c)

Regional

Markets,

similar

global

markets,

also

benefit

from

large-population

centers

and

demand.

They

are located at key crossroads in the supply chain and/or near economic centers for leading national or global

industries. Our assets reflect the highest quality class-A product in that market and are often less supply-

constrained and focus on delivering bulk goods to customers.

Rental

Income

includes

the

following

(in

thousands):

Same Store.

We evaluate the operating performance of the industrial operating properties we own and

manage

using

“same

store”

analysis

because

the

population

properties

this

analysis

consistent

from

period to period, thereby eliminating the effects of changes in the composition of the portfolio on performance

measures.

include

all

consolidated

properties,

and

properties

owned

property

funds

and

joint

ventures

that are managed by us and in which we have an equity interest (referred to as “unconsolidated investees”), in

our same store analysis. We have defined the same store portfolio, for the quarter ended March 31, 2012, as

those operating properties in operation at January 1, 2011 that were in operation throughout the full periods in

both 2011 and 2012 either by Prologis or AMB or their unconsolidated investees. We have removed all

properties that were disposed of to a third party from the population for both periods. We believe the factors

that impact rental income, rental expenses and net operating income in the same store portfolio are generally

the same as for the total operating portfolio. In order to derive an appropriate measure of period-to-period

operating

performance,

remove

the

effects

foreign

currency

exchange

rate

movements

using

the

current

exchange

rate

translate

from

local

currency

into

U.S.

dollars,

for

both

periods,

derive

the

same

store results.

Same

Store

Average

Occupancy

represents

the

average

occupied

percentage

for

the

period.

Same

Store

Rental

Expense

represents

gross

property

operating

expenses.

computing

the

percentage

change in rental expenses for the same store analysis, rental expenses include property management

expenses for our direct owned properties based on the property management fee that has been computed as

provided in the individual agreements under which our wholly owned management companies provide property

management services to each property (generally, the fee is based on a percentage of revenues).

Same

Store

Change

Rental

Rate

represents

the

change

effective

rental

rates

(average

rate

over

the

lease term) on new leases signed during the period as compared with the previous effective rental rates in that

same space.

Same

Store

Rental

Income

includes

the

amount

rental

expenses

that

are

recovered

from

customers

under

the

terms

their

respective

lease

agreements.

computing

the

percentage

change

rental

income

for

the

same store analysis, rental income (as computed under GAAP) is adjusted to remove the net termination fees

recognized for each period. Removing the net termination fees for the same store calculation allows us to

evaluate the growth or decline in each property's rental income without regard to items that are not indicative of

the property's recurring operating performance.

Stabilization

is defined when a property that was developed has been completed for one year or is 90%

occupied. Upon stabilization, a property is moved into our operating portfolio.

Tenant Retention

is the square footage of all leases rented by existing tenants divided by the square footage

of all expiring and rented leases during the reporting period, excluding the square footage of tenants that

default or buy-out prior to expiration of their lease, short-term tenants and the square footage of month-to-

month leases.

Notes and Definitions

2012 Prologis

First Quarter 2012 Report

Three Months Ended

March 31,

2012

2011

(in thousands)

Reconciliation of NOI

Rental income

...............................................................................................................................................

464,594

Rental expenses

..........................................................................................................................................

(125,096)

NOI

.................................................................................................................................................................

339,498

.............................................................................................

(993)

Less: Actual NOI for development portfolio and other

...............................................................................

(7,711)

Less: NOI on contributed properties (b)

........................................................................................................

(281)

Adjusted NOI for operating portfolio owned at March 31, 2012

330,513

................................................................

(8,002)

322,511

NOI

for

operating

portfolio

owned

March

31,

2012

Cash

Net termination fees and adjustments (a)

Rental income

.............................................................................................................

363,911

Amortization of lease intangibles

(9,463)

Rental expense recoveries

91,858

Straight

lined rents

.....................................................................................................

18,288

464,594

..........................................................................................

...................................................................................

141,757

(202)

42,999

11,160

195,714

Straight

lined rents and amortization of lease intangibles (c)

2012 Prologis

First Quarter 2012 Report

Value Creation

represents the value that will be created through our development and leasing activities at

stabilization.

calculate

value

estimating

the

NOI

that

the

property

will

generate

Stabilization

and applying an

estimated stabilized cap rate applicable to that property. The value creation is calculated as the amount by which the

estimated value exceeds our total expected investment and does not include any fees or promotes we may earn.

Weighted

Average

Estimated

Stabilized

Yeild

calculated

NOI

adjusted

reflect

stabilized

occupancy

divided by Acquisition Cost or TEI, as appilicable.

Turnover

Costs

represent

the

costs

incurred

connection

with

the

signing

lease,

including

leasing commissions and

tenant improvements. Tenant improvements include costs to prepare a space for a new tenant

and for a lease renewal with the same tenant. It excludes costs to prepare a space that is being leased for the first

time (i.e. in a new development property).

Value-Added Acquisitions

are properties which Prologis acquires as part of management’s current belief that the

discount in pricing attributed to the operating challenges of the property could provide greater returns, once stabilized,

than the returns of stabilized properties, which are not value added acquisitions. Value Added Acquisitions must have

one

the

following

characteristics:

(i)

existing

vacancy

excess

20%;

(ii)

short-term

lease

roll-over,

typically

during

the

first

two

years

ownership;

(iii)

significant

capital

improvement

requirements

excess

10%

of the purchase price and must be invested within the first two years of ownership

Value-Added Conversions

represent the repurposing of industrial properties to a higher and better use, including office,

residential,

retail,

research

and

development,

data

center,

self

storage

manufacturing

with

the

intent

ultimately

sell the

property once repositioned. Activities required to prepare the property for conversion to a higher and better use may include

such activities as re-zoning, re-designing, re-constructing, and re-tenanting. The economic gain on sales of value

added

conversions

represents

the

amount

which

the

sales

proceeds

exceed

our

original

cost

dollars

and percentages.

Total

Market

Capitalization

defined

market

equity

plus

our

total

debt

and

preferred

stock.

Total

Estimated

Investment

(“TEI”)

represents

total

estimated

cost

development

expansion,

including

land,

development and leasing costs. TEI is based on current projections and is subject to change. Non-U.S. Dollar

investments are translated to U.S. Dollars using the exchange rate at period end or the date of development start for

purposes of calculating development starts in any period.

Notes and Definitions

Prologis, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - May 1, 2012

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