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, 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.

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 or 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 discuss…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Prologis is the global leader in logistics real estate with a focus on high-barrier, high growth markets. We own, manage and develop well-located, high-quality logistics facilities in 19 countries across four continents. Our portfolio focuses on the world’s most vibrant centers of commerce and our scale across these locations allows us to better serve our customers’ diverse logistics requirements.

Current wording

Prologis is the global leader in logistics real estate with a focus on high-barrier, high growth markets. We own, manage and develop well-located, high-quality logistics facilities in 20 countries across four continents. Our portfolio focuses on the world’s most vibrant centers of commerce and our scale across these locations allows us to better serve our customers’ diverse logistics requirements.

Previous wording

Finally, we believe our long-standing dedication to Environmental, Social and Governance (“ESG”) practices creates value for our customers, investors, employees and the communities in which we do business. The principles of ESG are an important aspect of our business strategy that we believe delivers a strategic business advantage.

Current wording

Finally, we believe our long-standing dedication to Environmental, Social and Governance (“ESG”) practices creates value for our customers, investors, employees and the communities in which we do business. The principles of ESG have been an important aspect of our business strategy that we believe delivers a strategic business advantage.

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 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.

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 nine months ended September 30, 2024, within the consolidated operating portfolio, the weighted average lease term was 63 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

This segment produces durable, long-term cash flows and generally contributes 5% to 10% of our consolidated revenues, earnings and FFO, excluding promotes, all while requiring minimal capital other than our investment in the venture. We generate strategic capital revenue from our unconsolidated co-investment ventures, principally through asset management and property management services. Revenue earned from asset management fees is primarily driven by the quarterly valuation of the real estate properties owned by the respective ventures. We earn additional revenues by providing leasing, acquisition, construction management, development and disposition services. In certain ventures, we also have the ability to earn revenues through incentive fees (“promotes” or “promote revenues”) periodically during the life of a venture, upon liquidation of a venture or upon stabilization of individual venture assets based primarily on the total return of the investments over certain financial hurdles. Promote revenues are recognized when earned at the end

Current wording

This segment produces durable, long-term cash flows and generally contributes 5% to 10% of our consolidated revenues, earnings and FFO, excluding promotes. We generate strategic capital revenue from our unconsolidated co-investment ventures, principally through asset management and property management services. Revenue earned from asset management fees is primarily driven by the quarterly valuation of the real estate properties owned by the respective ventures. We earn additional revenues by providing leasing, acquisition, construction management, development and disposition services. In certain ventures, we also have the ability to earn revenues through incentive fees (“promotes” or “promote revenues”) periodically during the life of a venture, upon liquidation of a venture or upon stabilization of individual venture assets based primarily on the total return of the investments over certain financial hurdles. Promote revenues are recognized when earned at the end of the promote period for the specific co-investment ventures. We plan to grow this business and increase revenues by increasing our assets under management in existing or new ventures. The majority of the strategic capital revenues are generated 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 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.

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 34% (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 September 30, 2024. Therefore, even without further market rent growth, we expect our lease renewals to result in higher 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. 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.

Current wording

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 $36.0 billion ($40.7 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 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.

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 September 30, 2024, the gross book value of the operating portfolio held by our nine unconsolidated co-investment ventures was $55.7 billion across 519 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 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.

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 September 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 September 30, 2024, we had total available liquidity of $6.6 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

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.

Current wording

Our operating results were strong during the nine months ended September 30, 2024 despite the softening of rents and occupancy in the market. 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 operating portfolio occupancy was 96.2% at September 30, 2024 and rent change on leases that commenced during the nine months ended September 30, 2024 was 69.5% on a net effective basis, both metrics based on our ownership share.

Previous 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.

Current wording

While our proprietary metrics around lease 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. Additionally, we are experiencing slower decision-making with build-to-suits and, as a result, expect limited speculative development in the short term. 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 $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.

Current wording

We generated net proceeds of $2.4 billion and realized net gains of $811 million, principally from the contribution of properties to unconsolidated co-investment ventures in the U.S. and Europe, and sales of non-strategic properties to third parties in the U.S.

Previous 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.

Current wording

At September 30, 2024, we had total available liquidity of $6.6 billion, including borrowing capacity on our credit facilities of $5.8 billion and unrestricted cash balances of $781 million.

Previous 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):

Current wording

We issued $4.2 billion of senior notes with an issuance date weighted average interest rate of 4.8% and weighted average maturity of 14 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 six months ended June 30 (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 nine months ended September 30 (in millions):

Previous 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):

Current wording

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

Previous 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):

Current wording

The $401 million change in Real Estate Segment (“RES”) NOI for the nine months ended September 30 compared to the same period in 2023, was impacted by the following activities (in millions):

Previous wording

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

Current wording

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

Previous 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.

Current wording

At September 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 $5.4 billion and was 32.8% leased. This includes the development of data centers with an aggregate TEI of $1.1 billion, on a consolidated basis. Our investment in the development portfolio was $3.1 billion at September 30, 2024.

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

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, timing of promotes, foreign currency exchange rates and other transactional activity. 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,

Previous wording

and summarized financial condition and operating results of our unconsolidated co-investment ventures, refer to Note 3 to the Consolidated Financial Statements.

Current wording

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.

Previous 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):

Current wording

Below are the components of Strategic Capital Segment NOI for the nine months ended September 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 six months ended June 30 (in millions):

Current wording

Below is additional detail of our Strategic Capital Segment revenues, expenses and NOI for the nine months ended September 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. 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.

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 nine months ended September 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

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.

Current wording

G&A expenses were $316 million and $292 million for the nine months ended September 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 six months ended June 30 (dollars in millions):

Current wording

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

Previous wording

Depreciation and amortization expenses were $1.3 billion and $1.2 billion for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Depreciation and amortization expenses were $1.9 billion and $1.8 billion for the nine months ended September 30, 2024 and 2023, respectively.

Previous 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):

Current wording

The $78 million change in depreciation and amortization expenses for the nine months ended September 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 $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.

Current wording

Gains on the disposition of development properties and land were $160 million and $274 million for the nine months ended September 30, 2024 and 2023, respectively, primarily from the contribution of properties we developed to unconsolidated co-investment ventures in the U.S. and Europe in 2024 and in Japan in 2023. Gains on other dispositions of investments in real estate were $651 million and $158 million for the nine months ended September 30, 2024 and 2023, respectively. The gains recognized in 2024 are primarily from the contribution of operating properties to our U.S. unconsolidated co-investment venture, and both 2024 and 2023 include the sale of non-strategic properties in the U.S.

Previous 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.

Current wording

We recognized net earnings from unconsolidated entities, which are generally accounted for using the equity method, of $260 million and $218 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

The earnings we recognize can be impacted by: (i) the size, rental rates and occupancy of the portfolio of properties owned by each venture; (ii) gains or losses from the dispositions of properties and extinguishment of debt; (iii) our ownership interest in each venture; (iv) other variances in revenues and expenses of each venture; and (v) fluctuations in foreign currency exchange rates used to translate our share of net earnings to U.S. dollars.

Current wording

The earnings we recognize can be impacted by: (i) the size, rental rates and occupancy of the portfolio of properties owned by each venture; (ii) interest expense based on the size of the debt portfolio; (iii) gains or losses from the dispositions of properties and extinguishment of debt; (iv) our ownership interest in each venture; (v) other variances in revenues and expenses of each venture; and (vi) fluctuations in foreign currency exchange rates used to translate our share of net earnings to U.S. dollars.

Previous wording

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

Current wording

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

Previous 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.

Current wording

Interest expense increased during the nine months ended September 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. We issued $4.2 billion of senior notes during the nine months ended September 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

Foreign Currency, Derivative and Other Gains and Other Income, Net

Current wording

Foreign Currency, Derivative and Other Gains (Losses) and Other Income (Expense), Net

Previous 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.

Current wording

We recognized foreign currency, derivative and other gains (losses) and other income (expense), net, of $63 million and $103 million for the nine months ended September 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 six months ended June 30 included in earnings (in millions):

Current wording

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

Previous wording

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

Current wording

The following table summarizes our income tax expense for the nine months ended September 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 $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.

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 $153 million and $149 million for the nine months ended September 30, 2024 and 2023, respectively. Included in these amounts were $61 million for both the nine months ended September 30, 2024 and 2023, 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 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.

Current wording

The key driver of changes in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Financial Statements during the nine months ended September 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

Except as separately discussed above, the changes in comprehensive income attributable to common stockholders and unitholders and its components for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, are similar to the changes for the six-month periods ended on the same dates.

Current wording

Except as separately discussed above, the changes in comprehensive income attributable to common stockholders and unitholders and its components for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, are similar to the changes for the nine-month periods ended on the same dates.