Prologis(US:PLD)2023-10-26 16:00Company Overview - Prologis owns or has investments in approximately 1.2 billion square feet of properties and development projects as of September 30, 2023[162]. - The acquisition of Duke Realty Corporation was completed in October 2022 for a total price of $23.2 billion, including transaction costs, funded through equity issuance and debt assumption[162]. Revenue and Operations - Rental operations contribute 85% to 90% of Prologis's consolidated revenues, earnings, and funds from operations (FFO)[167]. - The estimated lease mark-to-market is approximately 62% based on net effective rent (NER), indicating significant potential for future organic net operating income (NOI) growth[173]. - The operating portfolio occupancy was 97.5% as of September 30, 2023, with a net effective rent change of 77.2% on leases commenced during the nine months ended September 30, 2023[180]. - The company expects continued rent growth due to healthy demand and low vacancy rates in its markets[173]. Financial Performance - The Real Estate Segment NOI for the nine months ended September 30, 2023, was $3.815 billion, up from $2.478 billion in the same period of 2022, reflecting a $1.3 billion increase[188]. - Strategic capital revenues for the nine months ended September 30, 2023, totaled $1,071 million, a significant increase from $885 million in 2022, representing a 21% growth[201]. - The Strategic Capital Segment's NOI for the same period was $764 million, up from $645 million in 2022, reflecting a 18.4% increase[201]. - Net earnings from unconsolidated entities for the nine months ended September 30, 2023, were $218 million, down from $241 million in 2022[223]. - For the nine months ended September 30, 2023, net earnings attributable to common stockholders were $2,424 million[280]. Investments and Development - Prologis's consolidated land has the potential to support the development of $37.2 billion of total expected investment (TEI) in new logistics space[174]. - The company stabilized 43 development buildings during the period, totaling 15 million square feet, with a total estimated investment of $1.863 billion[195]. - The consolidated development portfolio had a total expected investment of $6.9 billion, with 41.0% leased as of September 30, 2023[196]. - The company expects to complete the development of 110 properties, which are currently 41% leased, with a total investment of $4.4 billion[239]. Debt and Liquidity - The weighted average remaining maturity of Prologis's consolidated debt is 10 years, with a weighted average interest rate of 2.9%[176]. - Prologis had total available liquidity of $6.9 billion as of September 30, 2023, maintaining low leverage relative to real estate investments and market capitalization[176]. - Total consolidated debt amounted to $27.578 billion as of September 30, 2023, with a weighted average interest rate of 2.9%[243]. - The company had $741 million in unrestricted cash and $6.2 billion available under credit facilities as of September 30, 2023[240]. Expenses and Gains - G&A expenses rose to $292 million in 2023 from $246 million in 2022, primarily due to inflation and higher compensation costs[204]. - Depreciation and amortization expenses increased to $1.8 billion in 2023, up from $1.2 billion in 2022, marking a $646 million rise[207]. - Gains on real estate transactions were $274 million for the nine months ended September 30, 2023, compared to $391 million in 2022, indicating a decline of 30%[208]. Cash Flow - Net cash provided by operating activities increased to $4,299 million in 2023 from $2,849 million in 2022, representing a 51% increase[251]. - Net cash used in investing activities rose to $(5,212) million in 2023 compared to $(3,211) million in 2022, indicating a 62% increase in investment outflows[251]. - Operating distributions from unconsolidated entities increased to $536 million in 2023 from $316 million in 2022, a 69% increase[254]. Foreign Currency and Risk Management - 6.7% of total consolidated revenue, amounting to $411 million, was denominated in foreign currencies[285]. - The company has forward contracts with an aggregate notional amount of $1.7 billion to mitigate foreign currency translation risk[285]. - The company monitors market risk exposures using sensitivity analysis, estimating a hypothetical 10% adverse change in foreign currency exchange rates[282].