Prologis Inc

Previous wording

The statements in this report that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate as well as management’s beliefs and assumptions. Such statements involve uncertainties that could significantly impact our financial results. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “aims,” and “estimates” including variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to rent and occupancy growth, acquisition and development activity, contribution and disposition activity, general conditions in the geographic areas where we operate, our debt, capital structure and financial position, our ability to earn revenues from co-investment ventures, form new co-investment ventures and the availability of capital in existing or new co-investment ventures — are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and therefore actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) international, national, regional and local economic and political climates and conditions; (ii) changes in global financial markets, interest rates and foreign currency exchange rates; (iii) increased or unanticipated competition for our properties; (iv) risks associated with acquisitions, dispositions and development of properties, including the integration of the operations of significant real estate portfolios; (v) maintenance of Real Estate Investment Trust (“REIT”) status, tax structuring and changes in income tax laws and rates; (vi) availability of financing and capital, the levels of debt that we maintain and our credit ratings; (vii) risks related to our investments in and management of our co-investment ventures, including our ability to establish new co-investment ventures; (viii) risks of doing business internationally, including currency risks; (ix) environmental uncertainties, including risks of natural disasters; (x) risks related to global pandemics; and (xi) those additional factors discussed under Part I, Item 1A. Risk Factors in our An…

Excerpt shortened here; the source contains the full paragraph.

Current wording

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

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Rental Operations. Rental operations comprise the largest component of our operating segments and generally contributes 90% to 95% of our consolidated revenues, earnings and FFO. We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. For leases that commenced during the three months ended March 31, 2024, within the consolidated operating portfolio, the weighted average lease term was 57 months. We expect to generate earnings growth by increasing rents, maintaining high occupancy rates and controlling expenses. The primary driver of our revenue growth will be the rolling of in-place leases to current market rents when leases expire, as discussed further below. We believe our active portfolio management, combined with the skills of our property, leasing, maintenance, energy, sustainability and risk management teams allow us to maximize NOI across our portfolio. Substantially all of our consolidated rental revenue, NOI and cash flows from rental operations are generated in the U.S.

Current wording

Rental Operations. Rental operations comprise the largest component of our operating segments and generally contributes 90% to 95% of our consolidated revenues, earnings and FFO. We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. For leases that commenced during the six months ended June 30, 2024, within the consolidated operating portfolio, the weighted average lease term was 57 months. We expect to generate earnings growth by increasing rents, maintaining high occupancy rates and controlling expenses. The primary driver of our revenue growth will be the rolling of in-place leases to current market rents when leases expire, as discussed further below. We believe our active portfolio management, combined with the skills of our property, leasing, maintenance, energy, sustainability and risk management teams allow us to maximize NOI across our portfolio. Substantially all of our consolidated rental revenue, NOI and cash flows from rental operations are generated in the U.S.

Previous wording

Through the Strategic Capital Segment, we partner with many of the world’s largest institutional investors through unconsolidated co-investment ventures. The business is capitalized through private and public equity, of which 93% is in open ended ventures, long-term ventures or two publicly traded vehicles (Nippon Prologis REIT, Inc. in Japan and FIBRA Prologis in Mexico). We align our interests with our partners by holding significant ownership interests in our nine unconsolidated co-investment ventures (ranging from 15% to 50%). This structure allows us to reduce our exposure to foreign currency movements for investments outside the U.S.

Current wording

Through the Strategic Capital Segment, we partner with many of the world’s largest institutional investors through unconsolidated co-investment ventures. The business is capitalized through private and public equity, of which 94% is in open ended ventures, long-term ventures or two publicly traded vehicles (Nippon Prologis REIT, Inc. in Japan and FIBRA Prologis in Mexico). We align our interests with our partners by holding significant ownership interests in our nine unconsolidated co-investment ventures (ranging from 15% to 50%). This structure allows us to reduce our exposure to foreign currency movements for investments outside the U.S.

Previous wording

Rent Growth. As a result of several years of increases in market rents, our in-place leases have considerable upside potential to capture these higher rents and to drive future organic NOI growth. This is evident in the positive rent change we have experienced in every quarter since 2013 and was significant to our operating results over the last several years. We estimate that our share of the lease mark-to-market is approximately 50% (on an NER basis), which represents the growth rate from in-place rents to current market rents based on our share of the O&M portfolio at March 31, 2024. Therefore, even if there was no additional market rent growth in the future, we expect our lease renewals to translate into significant increases in future rental income.

Current wording

Rent Growth. As a result of several years of increases in market rents, our in-place leases have considerable upside potential to capture these higher rents and to drive future organic NOI growth. This is evident in the positive rent change we have experienced in every quarter since 2013 and was significant to our operating results over the last several years. We estimate that our share of the lease mark-to-market is approximately 42% (on an NER basis), which represents the growth rate from in-place rents to current market rents based on our share of the O&M portfolio at June 30, 2024. Therefore, even if there was no additional market rent growth in the future, we expect our lease renewals to translate into significant increases in future rental income.

Previous wording

Value Creation from Development. The global nature of our development program provides a wide landscape of opportunities to pursue based on our judgment of market conditions, opportunities and risks. One of the ways in which we create value is through our focus on sourcing well-located land and redevelopment sites through acquisition opportunities, including our innovative approach with Covered Land Plays ("CLP"), which are income-producing assets acquired with the intention to redevelop for higher and better use as industrial properties. Based on our current estimates, our consolidated land, including options and CLP, has the potential to support the development of $34.2 billion ($38.5 billion on an O&M basis) of TEI of new logistics space. We measure the estimated value creation of a development project as the stabilized value above our TEI. As properties are completed and leased, we expect to realize the value creation principally through gains realized through contributions of these properties to unconsolidated co-investment ventures and increases in the NOI of the consolidated portfolio.

Current wording

Value Creation from Development. The global nature of our development program provides a wide landscape of opportunities to pursue based on our judgment of market conditions, opportunities and risks. One of the ways in which we create value is through our focus on sourcing well-located land and redevelopment sites through acquisition opportunities. This strategy has allowed us to create opportunities for the conversion of income-producing assets, acquired with the intention for redevelopment, into industrial properties (Covered Land Plays or "CLPs") and data centers. Based on our current estimates, our consolidated land and other real estate investments, including options and CLPs, have the potential to support the development of $35.1 billion ($39.6 billion on an O&M basis) of TEI of newly developed buildings. We measure the estimated value creation of a development project as the stabilized value above our TEI. As properties are completed and leased, we expect to realize the value creation principally through gains realized through contributions of these properties to unconsolidated co-investment ventures and increases in the NOI of the consolidated portfolio.

Previous wording

Strategic Capital Advantages. The co-investment ventures provide capital from third parties that allows us to grow our O&M portfolio, contribute to self-funding our development activities through the sale of newly developed assets to these vehicles and produce substantial fees for our management of the assets. We raise capital to support the long-term growth of the co-investment ventures while maintaining our own substantial investments in these vehicles. At March 31, 2024, the gross book value of the operating portfolio held by our nine unconsolidated co-investment ventures was $52.4 billion across 508 million square feet.

Current wording

Strategic Capital Advantages. The co-investment ventures provide capital from third parties that allows us to grow our O&M portfolio, contribute to self-funding our development activities through the sale of newly developed assets to these vehicles and produce substantial fees for our management of the assets. We raise capital to support the long-term growth of the co-investment ventures while maintaining our own substantial investments in these vehicles. At June 30, 2024, the gross book value of the operating portfolio held by our nine unconsolidated co-investment ventures was $52.3 billion across 511 million square feet.

Previous wording

Balance Sheet Strength. We have a long-held strategy to build and maintain a balance sheet that is strong and flexible by using conservative levels of financial leverage. At March 31, 2024, the weighted average remaining maturity of our consolidated debt was 10 years and the weighted average interest rate was 3.0%. Prior to the current rising interest rate environment, we were able to take advantage of lower interest rates through our refinancing activities and substantially addressed our debt maturities until 2026. At March 31, 2024, we had total available liquidity of $5.8 billion. We continue to maintain low leverage as a percentage of our real estate investments and our market capitalization. As a result of our low leverage, available liquidity and investment capacity in the co-investment ventures, we have significant ability to capitalize on opportunistic value-added investments as they arise.

Current wording

Balance Sheet Strength. We have a long-held strategy to build and maintain a balance sheet that is strong and flexible by using conservative levels of financial leverage. At June 30, 2024, the weighted average remaining maturity of our consolidated debt was 10 years and the weighted average interest rate was 3.1%. Through our refinancing activities we have substantially addressed our debt maturities until 2026. At June 30, 2024, we had total available liquidity of $6.4 billion. We continue to maintain low leverage as a percentage of our real estate investments and our market capitalization. As a result of our low leverage, available liquidity and investment capacity in the co-investment ventures, we have significant ability to capitalize on opportunistic value-added investments as they arise.

Previous wording

SUMMARY OF THE THREE MONTHS ENDED MARCH 31, 2024

Current wording

SUMMARY OF THE SIX MONTHS ENDED JUNE 30, 2024

Previous wording

Our operating results were strong during the three months ended March 31, 2024. Due to increases in market rents over the last several years, our existing lease mark-to-market drove rent change on rollover and same-store growth in our O&M portfolio. Our O&M operating portfolio occupancy was 97.0% at March 31, 2024 and rent change on leases that commenced during the three months ended March 31, 2024 was 67.6%, on a net effective basis based on our ownership share.

Current wording

Our operating results were strong during the six months ended June 30, 2024. Due to increases in market rents over the last several years, our existing lease mark-to-market drove rent change on rollover and same-store growth in our O&M portfolio. Our O&M operating portfolio occupancy was 96.4% at June 30, 2024 and rent change on leases that commenced during the six months ended June 30, 2024 was 70.6%, on a net effective basis based on our ownership share.

Previous wording

While our proprietary metrics around property tours and proposals are positive, we expect some delay in our customers' leasing decisions over the next several quarters due to uncertainty in the economic and geopolitical environment. Despite the current environment, we believe we are well positioned to organically grow revenues over the long-term given the cumulative growth in market rents over the last several years and our existing high lease mark-to-market.

Current wording

While our proprietary metrics around property tours and proposals are positive, we expect our customers to exercise caution in their leasing decisions through the remainder of 2024 due to uncertainty in the economic and geopolitical environment. Despite the current environment, we believe we are well positioned to organically grow revenues over the long-term given the cumulative growth in market rents over the last several years and our existing high lease mark-to-market.

Previous wording

We generated net proceeds of $285 million and realized net gains of $57 million, principally from the contribution of a property to an unconsolidated co-investment venture in Europe and sale of a non-strategic property to a third party.

Current wording

We generated net proceeds of $1.3 billion and realized net gains of $345 million, principally from the contribution of properties to an unconsolidated co-investment venture in Europe and sales of non-strategic properties to third parties in the U.S.

Previous wording

At March 31, 2024, we had total available liquidity of $5.8 billion, including borrowing capacity on our credit facilities of $5.3 billion and unrestricted cash balances of $501 million.

Current wording

At June 30, 2024, we had total available liquidity of $6.4 billion, including borrowing capacity on our credit facilities of $5.8 billion and unrestricted cash balances of $598 million.

Previous wording

In March 2024, we established a commercial paper program, under which we may issue, repay and re-issue short-term unsecured commercial paper notes (“CPNs”) denominated in U.S. dollars. At any point in time, we are required to maintain available commitments under our credit facilities in an amount at least equal to the amount of the CPNs outstanding.

Current wording

In March 2024, we established a commercial paper program, under which we may issue, repay and re-issue short-term unsecured commercial paper notes (“CPNs”) denominated in U.S. dollars. At any point in time, we are required to maintain available commitments under our credit facilities in an amount at least equal to the CPNs outstanding.

Previous wording

We issued $1.9 billion of senior notes with an issuance date weighted average interest rate of 4.8% and weighted average maturity of 13 years (principal in millions):

Current wording

We issued $2.9 billion of senior notes with an issuance date weighted average interest rate of 4.8% and weighted average maturity of 13 years (principal in millions):

Previous wording

Below is our NOI by segment per the Consolidated Financial Statements and a reconciliation of NOI by segment to Operating Income per the Consolidated Financial Statements for the three months ended March 31 (in millions):

Current wording

Below is our NOI by segment per the Consolidated Financial Statements and a reconciliation of NOI by segment to Operating Income per the Consolidated Financial Statements for the six months ended June 30 (in millions):

Previous wording

Below are the components of Real Estate Segment NOI for the three months ended March 31, derived directly from line items in the Consolidated Financial Statements (in millions):

Current wording

Below are the components of Real Estate Segment NOI for the six months ended June 30, derived directly from line items in the Consolidated Financial Statements (in millions):

Previous wording

The change in Real Estate Segment (“RES”) NOI for the three months ended March 31, 2024 compared to the same period in 2023 of $148 million was impacted by the following activities (in millions):

Current wording

The $292 million change in Real Estate Segment (“RES”) NOI for the six months ended June 30, 2024 compared to the same period in 2023, was impacted by the following activities (in millions):

Previous wording

During both periods, we experienced positive rental rate growth due to increases in market rents over the last several years. Rental rate growth is a combination of higher rental rates on rollover of leases (or rent change) and contractual rent increases on existing leases. If a lease has a contractual rent increase driven by a metric that is not known at the time the lease commences,

Current wording

During both periods, we experienced positive rental rate growth due to increases in market rents over the last several years. Rental rate growth is a combination of higher rental rates on rollover of leases (or rent change) and contractual rent increases on existing leases. If a lease has a contractual rent increase driven by a metric that is not known at the time the lease commences, such as the consumer price index or a similar metric, the rent increase is not included in rent leveling and therefore impacts the rental revenue we recognize. Significant rent change during both periods continues to be a key driver in increasing rental income. See below for key metrics on rent change on rollover and occupancy.

Previous wording

Acquisition activity is principally due to the $3.1 billion real estate portfolio acquired in the U.S. on June 29, 2023. Acquisition activity also includes the fair value lease amortization to rental revenues due to in-place leases that were primarily below market at the time of the acquisition.

Current wording

The increase due to acquisitions is principally due to the additional NOI in 2024 from the $3.1 billion real estate portfolio acquired in the U.S. on June 29, 2023. Acquisition activity also includes the fair value lease amortization to rental revenues due to in-place leases that were primarily below market at the time of the acquisition.

Previous wording

The following table summarizes consolidated development activity for the three months ended March 31 (dollars and square feet in millions):

Current wording

The following table summarizes consolidated development activity for the six months ended June 30 (dollars and square feet in millions):

Previous wording

At March 31, 2024, the consolidated development portfolio, including properties under development and pre-stabilized properties, was expected to be completed before August 2026 with a TEI of $7.5 billion and was 39.3% leased. Our investment in the development portfolio was $4.4 billion at March 31, 2024, leaving $3.1 billion remaining to be spent.

Current wording

At June 30, 2024, the consolidated development portfolio, including properties under development and pre-stabilized properties, was expected to be completed before August 2026 with a TEI of $5.7 billion and was 32.4% leased. Our investment in the development portfolio was $3.2 billion at June 30, 2024, leaving $2.5 billion remaining to be spent.

Previous wording

This operating segment includes revenues from asset management and property management services, transactional services for acquisition, disposition and leasing activity and promote revenue earned from the unconsolidated co-investment ventures. Revenues associated with the Strategic Capital Segment fluctuate because of changes in the size of the portfolios through acquisitions and dispositions, the fair value of the properties and other transactional activity including foreign currency exchange rates and timing of promotes. These revenues are reduced by the direct costs associated with the asset and property-level management expenses for the properties owned by these ventures. We allocate the costs of our property management and leasing functions to the Strategic Capital Segment through Strategic Capital Expensesand to the Real Estate Segment through Rental Expenses, both in the Consolidated Financial Statements, based on the square footage of the relative portfolios. For further details regarding the key property information and summarized financial condition and operating results of our unconsolidated co-investment ventures, refer to Note 3 to the Consolidated Financial Statements.

Current wording

This operating segment includes revenues from asset management and property management services, transactional services for acquisition, disposition and leasing activity and promote revenue earned from the unconsolidated co-investment ventures. Revenues associated with the Strategic Capital Segment fluctuate because of changes in the size of the portfolios through acquisitions and dispositions, the fair value of the properties and other transactional activity including foreign currency exchange rates and timing of promotes. These revenues are reduced by the direct costs associated with the asset and property-level management expenses for the properties owned by these ventures. We allocate the costs of our property management and leasing functions to the Strategic Capital Segment through Strategic Capital Expensesand to the Real Estate Segment through Rental Expenses, both in the Consolidated Financial Statements, based on the square footage of the relative portfolios. For further details regarding the key property information

Previous wording

Below are the components of Strategic Capital Segment NOI for the three months ended March 31, derived directly from the line items in the Consolidated Financial Statements (in millions):

Current wording

Below are the components of Strategic Capital Segment NOI for the six months ended June 30, derived directly from the line items in the Consolidated Financial Statements (in millions):

Previous wording

Below is additional detail of our Strategic Capital Segment revenues, expenses and NOI for the three months ended March 31 (in millions):

Current wording

Below is additional detail of our Strategic Capital Segment revenues, expenses and NOI for the six months ended June 30 (in millions):

Previous wording

We generally earn promote revenue directly from third-party investors in the co-investment ventures based on the cumulative returns of the venture over a three-year period or the stabilization of individual development projects owned by the venture. Changes in asset valuations within the co-investment ventures during the promote period is one of the significant inputs to the calculation of promote revenues. The asset valuations are prepared by third-party valuation firms.

Current wording

We generally earn promote revenue directly from third-party investors in the co-investment ventures based on the cumulative returns of the venture over a three-year period or the stabilization of individual development projects owned by the venture. The promote revenue we earned during the six months ended June 30, 2023, was primarily from Prologis Targeted U.S. Logistics Fund in the second quarter of 2023. Changes in asset valuations within the co-investment ventures during the promote period is one of the significant inputs to the calculation of promote revenues. The asset valuations are prepared by third-party valuation firms.

Previous wording

of cash and equity-based awards, pursuant to the terms of the PPP and expensed through Strategic Capital Expenses in the Consolidated Statements of Income, as vested. For promotes earned prior to January 2024, up to 40% of the third-party portion of promotes earned was awarded to certain employees.

Current wording

For promotes earned after January 2024, we amended the Prologis Promote Plan ("PPP") to award up to 25% of the third-party portion of the promotes earned by us from the co-investment ventures to our employees. This award is issued as a combination of cash and equity-based awards, pursuant to the terms of the PPP and expensed through Strategic Capital Expenses in the Consolidated Statements of Income, as vested. For promotes earned prior to January 2024, up to 40% of the third-party portion of promotes earned was awarded to certain employees.

Previous wording

G&A expenses were $111 million and $100 million for the three months ended March 31, 2024 and 2023, respectively. We capitalize certain internal costs that are incremental and directly related to our development and building improvement activities.

Current wording

G&A expenses were $218 million and $195 million for the six months ended June 30, 2024 and 2023, respectively. G&A expenses increased in 2024 as compared to 2023, principally due to inflationary increases and higher compensation expenses. We capitalize certain internal costs that are incremental and directly related to our development and building improvement activities.

Previous wording

The following table summarizes capitalized G&A for the three months ended March 31 (dollars in millions):

Current wording

The following table summarizes capitalized G&A for the six months ended June 30 (dollars in millions):

Previous wording

The change in depreciation and amortization expenses during the three months ended March 31, 2024 from the same period in 2023 of approximately $36 million was impacted by the following (in millions):

Current wording

The $70 million change in depreciation and amortization expenses for the six months ended June 30, 2024 compared to the same period in 2023, was impacted by the following items (in millions):

Previous wording

Gains on the disposition of development properties and land were $40 million for the three months ended March 31, 2024, primarily from the contribution of a property we developed to an unconsolidated co-investment venture in Europe. Gains on other dispositions of investments in real estate were $17 million and $4 million for the three months ended March 31, 2024 and 2023, respectively, from the sale of non-strategic properties to third parties. Historically, we have utilized the proceeds from these transactions primarily to fund our acquisition and development activities. See Note 2 to the Consolidated Financial Statements for further information on these transactions.

Current wording

Gains on the disposition of development properties and land were $128 million and $185 million for the six months ended June 30, 2024 and 2023, respectively, primarily from the contribution of properties we developed to an unconsolidated co-investment venture in Europe in 2024 and in Japan in 2023. Gains on other dispositions of investments in real estate were $217 million and $29 million for the six months ended June 30, 2024 and 2023, respectively, from the sales of non-strategic properties to third parties, primarily in the U.S. Historically, we have utilized the proceeds from these transactions primarily to fund our acquisition and development activities. See Note 2 to the Consolidated Financial Statements for further information on these transactions.

Previous wording

We manage our business and review our operating fundamentals on an O&M basis, which includes our consolidated properties and properties owned by our unconsolidated co-investment ventures. We believe reviewing the results in this way allows management to understand performance more broadly as we manage the properties without regard to their ownership. We do not control the

Current wording

We manage our business and review our operating fundamentals on an O&M basis, which includes our consolidated properties and properties owned by our unconsolidated co-investment ventures. We believe reviewing the results in this way allows management to understand performance more broadly as we manage the properties without regard to their ownership. We do not control the unconsolidated co-investment ventures for purposes of GAAP and the presentation of the ventures’ operating information does not represent a legal claim.

Previous wording

We recognized net earnings from unconsolidated entities, which are generally accounted for using the equity method, of $72 million and $76 million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

We recognized net earnings from unconsolidated entities, which are generally accounted for using the equity method, of $175 million and $146 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

The following table details our net interest expense for the three months ended March 31 (dollars in millions):

Current wording

The following table details our net interest expense for the six months ended June 30 (dollars in millions):

Previous wording

Interest expense increased during the three months ended March 31, 2024, as compared to the same period in 2023, principally due to the issuance of senior notes to finance our acquisition and development activities and higher interest rates on new issuances and our credit facilities. We issued $1.9 billion of senior notes during the three months ended March 31, 2024 and $5.4 billion during the year ended December 31, 2023, with a weighted average interest rate of 4.8% and 4.7%, respectively, at the issuance date.

Current wording

Interest expense increased during the six months ended June 30, 2024, as compared to the same period in 2023, principally due to the issuance of senior notes to finance our acquisition and development activities and higher interest rates on new issuances and our credit facilities. We issued $2.9 billion of senior notes during the six months ended June 30, 2024 and $5.4 billion during the year ended December 31, 2023, with a weighted average interest rate of 4.8% and 4.7%, respectively, at the issuance date.

Previous wording

We recognized foreign currency, derivative and other gains and other income, net, of $64 million and $9 million for the three months ended March 31, 2024 and 2023, respectively. Included in these amounts was interest income earned on short-term investments.

Current wording

We recognized foreign currency, derivative and other gains and other income, net, of $101 million and $35 million for the six months ended June 30, 2024 and 2023, respectively. Included in these amounts was interest income earned on short-term investments.

Previous wording

The following table details our foreign currency and derivative gains, net for the three months ended March 31 included in earnings (in millions):

Current wording

The following table details our foreign currency and derivative gains, net for the six months ended June 30 included in earnings (in millions):

Previous wording

The following table summarizes our income tax expense for the three months ended March 31 (in millions):

Current wording

The following table summarizes our income tax expense for the six months ended June 30 (in millions):

Previous wording

Net earnings attributable to noncontrolling interests represents the third-party investors’ share of the earnings generated in consolidated entities in which we do not own 100% of the equity, reduced by the third-party share of fees or promotes payable to us and earned during the period. We had net earnings attributable to noncontrolling interests of $45 million and $34 million for the three months ended March 31, 2024 and 2023, respectively. Included in these amounts were $15 million and $12 million for the three months ended March 31, 2024 and 2023, respectively, of net earnings attributable to the common limited partnership unitholders of Prologis, L.P.

Current wording

Net earnings attributable to noncontrolling interests represents the third-party investors’ share of the earnings generated in consolidated entities in which we do not own 100% of the equity, reduced by the third-party share of fees or promotes payable to us and earned during the period. We had net earnings attributable to noncontrolling interests of $95 million and $97 million for the six months ended June 30, 2024 and 2023, respectively. Included in these amounts were $36 million and $42 million for the six months ended June 30, 2024 and 2023, respectively, of net earnings attributable to the common limited partnership unitholders of Prologis, L.P.

Previous wording

The key driver of changes in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Financial Statements during the three months ended March 31, 2024 and 2023, was the currency translation adjustment derived from changes in exchange rates during both periods principally on our net investments in real estate outside the U.S. and the borrowings we issue in the functional currencies of the countries where we invest. These borrowings serve as a natural hedge of our foreign investments. In addition, we use derivative financial instruments, such as foreign currency contracts to manage foreign currency exchange rate risk related to our foreign investments and interest rate contracts to manage interest rate risk, that when designated the change in fair value is included in AOCI/L.

Current wording

The key driver of changes in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Financial Statements during the six months ended June 30, 2024 and 2023, was the currency translation adjustment derived from changes in exchange rates during both periods principally on our net investments in real estate outside the U.S. and the borrowings we issue in the functional currencies of the countries where we invest. These borrowings serve as a natural hedge of our foreign investments. In addition, we use derivative financial instruments, such as foreign currency contracts to manage foreign currency exchange rate risk related to our foreign investments and interest rate contracts to manage interest rate risk, that when designated the change in fair value is included in AOCI/L.

Previous wording

completion of the development and leasing of the properties in our consolidated development portfolio (at March 31, 2024, 121 properties in our development portfolio were 39.3% leased with a current investment of $4.4 billion and a TEI of $7.5 billion when completed and leased, leaving $3.1 billion of estimated additional required investment);

Current wording

completion of the development and leasing of the properties in our consolidated development portfolio (at June 30, 2024, 106 properties in our development portfolio were 32.4% leased with a current investment of $3.2 billion and a TEI of $5.7 billion when completed and leased, leaving $2.5 billion of estimated additional required investment);