Prologis(PLD)2024-10-25 20:05Portfolio and Operations - Prologis operates a portfolio of approximately 1.2 billion square feet across 20 countries, focusing on high-barrier, high-growth logistics markets[101]. - At September 30, 2024, the gross book value of the operating portfolio held by Prologis' nine unconsolidated co-investment ventures was $55.7 billion across 519 million square feet[110]. - Operating portfolio occupancy was 96.2% as of September 30, 2024, with a net effective rent change of 69.5% on leases commenced during the nine months[113]. - The total O&M operating portfolio comprised 5,285 properties with 1,168 million square feet, achieving an overall occupancy rate of 95.9%[134]. - The development portfolio included 97 properties that were 32.8% leased, with a current investment of $3.1 billion and a total estimated investment of $5.4 billion upon completion[152]. Financial Performance - The company expects to generate earnings growth by increasing rents, maintaining high occupancy rates, and controlling expenses, with rental operations contributing 90% to 95% of consolidated revenues[106]. - Rental revenues increased to $5.577 billion in 2024 from $5.063 billion in 2023, reflecting a $514 million increase[115]. - Real Estate Segment NOI rose to $4.216 billion in 2024, up from $3.815 billion in 2023, marking a $401 million increase[117]. - Same store Property NOI for the three months ended September 30, 2024, was $1,400 million, reflecting a 6.2% increase from $1,318 million in 2023[139]. - For the nine months ended September 30, 2024, net earnings attributable to common stockholders were $2,448 million, a slight increase from $2,424 million in 2023[168]. Development and Investment - The company has a total expected investment (TEI) of $36.0 billion for newly developed buildings, with a potential increase to $40.7 billion on an owned and managed basis[110]. - Number of new development buildings started increased to 21 in 2024 from 17 in 2023, with square footage rising from 4 million to 6 million[125]. - Estimated value at completion for the development portfolio was $3.812 billion in 2024, up from $2.505 billion in 2023[126]. - Acquired 225 acres of land in India to support future development opportunities[113]. Liquidity and Capital Structure - Prologis maintains a strong balance sheet with a weighted average remaining maturity of consolidated debt at 10 years and a weighted average interest rate of 3.1%[110]. - The company has total available liquidity of $6.6 billion, allowing for opportunistic value-added investments[110]. - Total available liquidity reached $6.6 billion, including $5.8 billion in borrowing capacity and $781 million in unrestricted cash[113]. - The company had a total debt of $32.29 billion as of September 30, 2024, with a weighted average effective interest rate of 3.1%[153]. Strategic Capital and Revenue Segments - The Strategic Capital Segment contributes 5% to 10% of consolidated revenues, with a focus on asset management and property management services[107]. - Strategic Capital Segment revenues for the nine months ended September 30, 2024, totaled $419 million, a decrease from $1,071 million in the same period of 2023[129]. - Strategic Capital Segment NOI for the nine months ended September 30, 2024, was $208 million, down from $764 million in 2023, reflecting a significant decline[129]. Expenses and Gains - G&A expenses increased to $316 million for the nine months ended September 30, 2024, compared to $292 million in 2023, primarily due to inflation and higher compensation costs[130]. - Depreciation and amortization expenses rose to $1.9 billion for the nine months ended September 30, 2024, from $1.8 billion in 2023, indicating a $78 million increase[132]. - Gains on real estate transactions for the nine months ended September 30, 2024, were $811 million, compared to $432 million in 2023, showing a substantial increase[132]. Interest and Tax Expenses - Net interest expense increased to $632 million for the nine months ended September 30, 2024, from $467 million in 2023, representing a 35.2% rise, primarily due to higher interest rates and the issuance of $4.2 billion in senior notes[142]. - Total current income tax expense decreased to $78 million for the nine months ended September 30, 2024, from $143 million in 2023, a reduction of 45.5%[151]. Foreign Currency and Interest Rate Exposure - 7.2% of total consolidated revenue, amounting to $434 million, was denominated in foreign currencies for the nine months ended September 30, 2024[171]. - The company had foreign currency contracts with an aggregate notional amount of $1.6 billion, primarily in British pound sterling, Canadian dollar, euro, and Japanese yen[171]. - At September 30, 2024, $31.2 billion of the company's debt bore interest at fixed rates, with a weighted average interest rate of 4.0%[172]. - A 10% increase in interest rates on average outstanding variable rate debt balances would result in an additional annual interest expense of $4 million[172].