Prologis(US:PLD)2023-04-30 16:00Acquisition and Portfolio Growth - Prologis completed the acquisition of Duke Realty for $23.2 billion, adding 494 industrial properties totaling 144 million square feet to its portfolio[162]. - The gross book value of the operating portfolio held by Prologis' eight unconsolidated co-investment ventures is $50.3 billion across 491 million square feet[175]. - The total owned and managed operating portfolio reached 5,025 properties with 1,093 million square feet as of March 31, 2023, maintaining a high occupancy rate of 98.0%[216]. Financial Performance - The Real Estate Segment reported rental revenues of $1,634 million for the three months ended March 31, 2023, compared to $1,077 million in the same period of 2022, reflecting a year-over-year increase of 51.7%[189]. - The Real Estate Segment's NOI for the three months ended March 31, 2023, was $1,214 million, up from $800 million in the same period of 2022, marking a 51.8% increase[189]. - Same store property NOI on a net effective basis increased by 9.9% to $937 million in Q1 2023 compared to $853 million in Q1 2022[222]. - Same store property NOI on a cash basis rose by 11.4% to $918 million in Q1 2023 from $824 million in Q1 2022[222]. - Net earnings attributable to common stockholders decreased to $463 million in 2023 from $1,149 million in 2022, representing a decline of approximately 60%[283]. - NAREIT defined FFO attributable to common stockholders/unitholders increased to $1,147 million in 2023, up from $1,044 million in 2022, reflecting a growth of about 10%[283]. - Core FFO attributable to common stockholders/unitholders rose to $1,157 million in 2023, compared to $834 million in 2022, marking an increase of approximately 39%[283]. Liquidity and Debt Management - Prologis has a total available liquidity of $5.7 billion as of March 31, 2023, with a weighted average remaining maturity of consolidated debt at 10 years and an interest rate of 2.6%[176]. - The company had a total debt of $25.153 billion as of March 31, 2023, with a weighted average interest rate of 2.6%[247]. - The company expects to fund cash needs primarily from net cash flow from property operations and available unrestricted cash balances of $523 million[244]. - The company maintained compliance with all financial debt covenants as of March 31, 2023[249]. Development and Investment - Prologis' development program has the potential to support the development of $34.0 billion of total expected investment (TEI) in new logistics space[174]. - The consolidated development portfolio had a total estimated investment of $6.8 billion, with 43.4% leased as of March 31, 2023[198]. - The company completed 2 new development buildings during the period, compared to 31 in the same period of 2022[197]. - The estimated value creation from development activities was $261 million for the three months ended March 31, 2023, compared to $163 million in the same period of 2022[198]. - The company anticipates an increase in development starts and contributions to open-ended funds in the second half of the year[181]. Operational Efficiency and Costs - General and administrative (G&A) expenses were $100 million in 2023, up from $74 million in 2022, with equity-based compensation expenses increasing to $63 million from $41 million[258]. - G&A expenses increased to $100 million in Q1 2023, up from $74 million in Q1 2022, driven by inflation and higher compensation costs[207]. - Depreciation and amortization expenses rose significantly to $602 million in Q1 2023 from $397 million in Q1 2022, an increase of approximately $205 million[210]. Strategic Capital and Revenue Streams - Prologis' strategic capital segment contributes 10% to 15% of recurring consolidated revenues, earnings, and FFO, with minimal capital requirements[171]. - Strategic capital revenues for Q1 2023 totaled $135 million, a slight increase from $134 million in Q1 2022, with recurring fees contributing $118 million and transactional fees $17 million[204]. - Strategic capital expenses rose to $72 million in Q1 2023 from $52 million in Q1 2022, primarily due to higher compensation expenses and inflationary increases[204]. - The Strategic Capital Segment's NOI decreased to $63 million in Q1 2023 from $82 million in Q1 2022, reflecting a decline in performance[204]. Foreign Currency and Interest Rate Exposure - For the three months ended March 31, 2023, $128 million or 7% of total consolidated revenue was denominated in foreign currencies[288]. - The company has forward contracts with an aggregate notional amount of $1.6 billion to mitigate foreign currency risk associated with future earnings[288]. - A 10% increase in interest rates on average outstanding variable rate debt balances would result in an additional annual interest expense of $6 million[293]. - The company’s total variable rate debt amounted to $2.0 billion, with a weighted average effective interest rate of 2.9%[293]. - A weakening of the U.S. dollar against foreign currencies by 10% could result in a $163 million cash payment on settlement of foreign currency contracts[288].