Positive Long-Term Outlook Amid Near-Term Macroeconomic Uncertainty SAN FRANCISCO, April 17, 2024 /PRNewswire/ -- Prologis, Inc. (NYSE:PLD), the global leader in logistics real estate, today reported first quarter results for 2024.  Net earnings per diluted share was $0.63 for the first quarter of 2024 compared with $0.50 for the first quarter of 2023. Core funds from operations (Core FFO)* per diluted share was $1.28 for the first quarter of 2024, compared with $1.22 for the same period in 2023. Core FFO, excluding Net Promote Income (Expense)* per diluted share for the first quarter of 2024 was $1.31 compared with $1.23 for the first quarter of 2023.  "While operating conditions are healthy in the majority of our markets, customers remain focused on controlling costs, which is weighing on decision making and the pace of leasing," said Hamid R. Moghadam, co-founder, chairman and CEO, Prologis. "A volatile and persistently high interest rate environment, together with mounting geopolitical concerns, contribute to this indecision and its short-term effect on net absorption. We remain optimistic about the fundamentals of our business, while being prepared for a slower environment in the next quarter or two."   OPERATING PERFORMANCE  Owned & Managed 1Q24 Notes Average Occupancy 96.8 % Leases Commenced 48.1MSF 45.0MSF operating portfolio and 3.1MSF development portfolio Retention 74.3 % Prologis Share 1Q24 Notes Cash Same Store NOI* 5.7 % Impacted by ~175 bps of one-time items Net Effective Rent Change 67.6 % Cash Rent Change 48.2 %   DEPLOYMENT ACTIVITY Prologis Share 1Q24 Acquisitions $5M      Weighted avg stabilized cap rate (excluding other real estate) 7.1 % Development Stabilizations $517M      Estimated weighted avg yield 5.7 %      Estimated weighted avg margin 9.6 %      Estimated value creation $50M      % Build-to-suit 43.3 % Development Starts $273M      Estimated weighted avg yield 6.9 %      Estimated weighted avg margin 26.7 %      Estimated value creation $73M      % Build-to-suit 24.9 % Total Dispositions and Contributions $254M Weighted avg stabilized cap rate (excluding land and other real estate)                                    4.8 %   BALANCE SHEET STRENGTH & LIQUIDITY"As always, we maintain a philosophy to build and preserve financial strength for any environment, with liquidity of almost $6 billion at the end of the quarter, low leverage and insulated earnings from foreign exchange movements," said Timothy D. Arndt, chief financial officer, Prologis. "Our capital raising efforts this quarter, across both debt and Strategic Capital, highlight our strength and reputation as an issuer as well as the broad, global access that we have to optimize our capital structure." During the first quarter, Prologis and its co-investment ventures issued an aggregate of $4.1 billion of debt at a weighted average interest rate of 4.7%, and a weighted average term of 9.5 years. This activity includes an inaugural issuance of a CNH bond, which further diversifies our funding sources in the currencies we operate in. Also, during the quarter, Prologis established a Commercial Paper program permitting issuances of up to $1 billion. The program received A-1/P-2 short-term ratings from S&P and Moody's, respectively. At March 31, 2024, debt as a percentage of total market capitalization was 21.0%, and the company's weighted average interest rate on its share of total debt was 3.1%, with a weighted average term of 9.3 years and no significant debt maturities until 2026. FOREIGN CURRENCY STRATEGYPrologis hedges its exposure to foreign currency fluctuations by borrowing in the currencies in which it invests and using derivative financial instruments. At March 31, 2024, 96.5% of Prologis' equity was in USD and forecasted earnings for 2024, 2025 and 2026 are 98%, 98% and 97%, respectively, in USD or hedged through derivative contracts. 2024 GUIDANCE Prologis' guidance for net earnings is included in the table below as well as guidance for Core FFO*, which are reconciled in our supplemental information. "While we had a successful first quarter, we expect net absorption in the upcoming quarters to be lower than our prior expectations and leasing to stay competitive in a handful of our larger, higher-rent markets," said Arndt. "With that, our current view calls for lower average occupancy in the year. Accordingly, we have reduced full-year guidance ranges for occupancy, same-store growth and earnings, but view the adjustments more as a matter of timing as the outlook on new supply remains very favorable."   Arndt added: "At the midpoint, we project Core FFO growth, excluding promotes, of nearly 8%, and Cash Same Store NOI growth to be 6.75%. While our Southern California portfolio faces near-term headwinds, we remain very positive about long-term growth and value given the market's supply barriers and secular forces driving future demand." 2024 GUIDANCE Earnings (per diluted share)    Previous Revised Change at M.P.  Net earnings attributable to common stockholders $3.20 to $3.45 $3.15 to $3.35 (2.3) % Core FFO attributable to common stockholders/unitholders* $5.42 to $5.56 $5.37 to $5.47 (1.3) % Core FFO attributable to common stockholders/unitholders, excluding Net Promote Income (Expense)*1 $5.50 to $5.64 $5.45 to $5.55 (1.3) % Operations – Prologis Share Average occupancy 96.50% to 97.50% 95.75% to 96.75% (75) bps Cash Same Store NOI* 8.00% to 9.00% 6.25% to 7.25% (175) bps Strategic Capital (in millions) Previous Revised Change at M.P. Strategic Capital revenue, excluding promote revenue $530 to $550 $530 to $550 - Net Promote Income (Expense) $(80) $(80) - G&A (in millions) General & administrative expenses $420 to $440 $415 to $430 (1.7) % Capital Deployment – Prologis Share (in millions) Development stabilizations $3,600 to $4,000 $3,600 to $4,000 - Development starts $3,000 to $3,500 $2,500 to $3,000 (15.4) % Acquisitions $500 to $1,000 $500 to $1,000 - Contributions $1,750 to $2,250 $1,750 to $2,250 - Dispositions $800 to $1,200 $800 to $1,200 - Net sources/(uses)        $(950) to $(1,050) $(450) to $(550) 50.0 % Realized development gains $300 to $400 $300 to $400 - 1. We are further adjusting Core FFO to exclude $0.08 of net promote expense. The expense relates to amortization of stock compensation issued to employees related to promote income recognized in prior periods.  *  This is a non-GAAP financial measure. See the Notes and Definitions in our supplemental information for further explanation and a reconciliation to the most directly comparable GAAP measure. The earnings guidance described above includes potential gains recognized from real estate transactions but excludes any future or potential foreign currency or derivative gains or losses as our guidance assumes constant foreign currency rates. In reconciling from net earnings to Core FFO*, Prologis makes certain adjustments, including but not limited to real estate depreciation and amortization expense, gains (losses) recognized from real estate transactions and early extinguishment of debt, impairment charges, deferred taxes and unrealized gains or losses on foreign currency or derivative activity. The difference between the company's Core FFO* and net earnings guidance relates predominantly to these items. Please refer to our quarterly Supplemental Information, which is available on our Investor Relations website at https://ir.prologis.com and on the SEC's website at www.sec.gov for a definition of Core FFO* and other non-GAAP measures used by Prologis, along with reconciliations of these items to the closest GAAP measure for our results and guidance. APRIL 17, 2024, CALL DETAILS The call will take place on Wednesday, April 17, 2024, at 9:00 a.m. PT/12:00 p.m. ET. To access a live broadcast of the call, please dial +1 (877) 897-2615 (toll-free from the United States and Canada) or +1 (201) 689-8514 (from all other countries). A live webcast can be accessed from the Investor Relations section of www.prologis.com. A telephonic replay will be available April 17 – May 1 at +1 (877) 660-6853 (from the United States and Canada) or +1 (201) 612-7415 (from all other countries) using access code 13745294. The webcast replay will be posted in the Investor Relations section of www.prologis.com under "Events & Presentations." ABOUT PROLOGISPrologis, Inc. is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. At March 31, 2024, the company owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 1.2 billion square feet (115 million square meters) in 19 countries. Prologis leases modern logistics facilities to a diverse base of approximately 6,700 customers principally across two major categories: business-to-business and retail/online fulfillment. FORWARD-LOOKING STATEMENTSThe statements in this document that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate as well as management's beliefs and assumptions. Such statements involve uncertainties that could significantly impact our financial results. Words such as "expects" "anticipates," "intends," "plans," "believes," "seeks," and "estimates" including variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future—including statements relating to rent and occupancy growth, acquisition and development activity, contribution and disposition activity, general conditions in the geographic areas where we operate, our debt, capital structure and financial position, our ability to earn revenues from co-investment ventures, form new co-investment ventures and the availability of capital in existing or new co-investment ventures—are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained and, therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) international, national, regional and local economic and political climates and conditions; (ii) changes in global financial markets, interest rates and foreign currency exchange rates; (iii) increased or unanticipated competition for our properties; (iv) risks associated with acquisitions, dispositions and development of properties, including the integration of the operations of significant real estate portfolios; (v) maintenance of Real Estate Investment Trust status, tax structuring and changes in income tax laws and rates; (vi) availability of financing and capital, the levels of debt that we maintain and our credit ratings; (vii) risks related to our investments in our co-investment ventures, including our ability to establish new co-investment ventures; (viii) risks of doing business internationally, including currency risks; (ix) environmental uncertainties, including risks of natural disasters; (x) risks related to global pandemics; and (xi) those additional factors discussed in reports filed with the Securities and Exchange Commission by us under the heading "Risk Factors." We undertake no duty to update any forward-looking statements appearing in this document except as may be required by law.   dollars in millions, except per share/unit data Three Months Ended March 31, 2024 2023 Rental and other revenues $                         1,828 $                         1,634 Strategic capital revenues 129 135 Total revenues 1,957 1,769 Net earnings attributable to common stockholders 584 463 Core FFO attributable to common stockholders/unitholders* 1,222 1,157 AFFO attributable to common stockholders/unitholders* 1,032 972 Adjusted EBITDA attributable to common stockholders/unitholders* 1,598 1,430 Estimated value creation from development stabilizations - Prologis Share 50 276 Common stock dividends and common limited partnership unit distributions 916 828 Per common share - diluted: Net earnings attributable to common stockholders $                           0.63 $                           0.50 Core FFO attributable to common stockholders/unitholders* 1.28 1.22 Core FFO attributable to common stockholders/unitholders, excluding Net Promote Income (Expense)*  1.31 1.23 Business line reporting: Real estate operations*  1.24 1.16 Strategic capital*  0.04 0.06 Core FFO attributable to common stockholders/unitholders* 1.28 1.22 Realized development gains, net of taxes* 0.04 - Dividends and distributions per common share/unit 0.96 0.87 *This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation.   in thousands March 31, 2024 December 31, 2023 Assets: Investments in real estate properties: Operating properties $                                  75,974,027 $                                  75,435,497 Development portfolio 4,362,752 4,367,455 Land 4,072,212 3,775,553 Other real estate investments 5,018,514 5,088,070 89,427,505 88,666,575 Less accumulated depreciation 11,430,899 10,931,485 Net investments in real estate properties 77,996,606 77,735,090 Investments in and advances to unconsolidated entities                                            9,691,101 9,543,970 Assets held for sale or contribution 382,793 461,657 Net investments in real estate 88,070,500 87,740,717 Cash and cash equivalents 500,589 530,388 Other assets 4,739,221 4,749,735 Total assets $                                  93,310,310 $                                  93,020,840 Liabilities and Equity: Liabilities: Debt  $                                  29,557,667 $                                  29,000,501 Accounts payable, accrued expenses and other liabilities 5,955,525 6,196,619 Total liabilities 35,513,192 35,197,120 Equity: Stockholders' equity 53,190,653 53,181,724