SAN FRANCISCO, Jan. 19, 2022 /PRNewswire/ -- Prologis, Inc. (NYSE:PLD), the global leader in logistics real estate, today reported results for the fourth quarter of 2021.

Net earnings per diluted share was $1.67 for the quarter and $3.94 for the year compared with $0.38 and $2.01 for the same periods in 2020. Core funds from operations (Core FFO)* per diluted share was $1.12 for the quarter and $4.15 for the year compared with $0.95 and $3.80 for the same periods in 2020. Core FFO for full-year 2021 and 2020 included net promote income per diluted share of $0.06 and $0.22, respectively.

"Demand for our 1 billion square foot global portfolio shows no signs of slowing and we are positioned ideally to meet our customers' most critical real estate needs," said Hamid R. Moghadam, co-founder and CEO, Prologis. "In tandem, we remain focused on key customer-centric initiatives around energy, technology, labor, data and other aspects of our growing Essentials business."

OPERATING PERFORMANCE

Owned & Managed	4Q21	Notes
Average Occupancy	97.4%	Up 80bps from Q3 2021, 98.2% leased as of December 31, 2021
Leases Commenced	55.1MSF	44.3MSF operating portfolio and 10.8MSF development portfolio
Retention	75.8%

Prologis Share	4Q21	Notes
Net Effective Rent Change	33.0%	Up 510bps sequentially
Cash Rent Change	19.6%
Cash Same Store NOI*	7.5%	U.S. at 8.1%; Intl. at 5.3%

DEPLOYMENT ACTIVITY

Prologis Share	4Q21	FY2021
Building Acquisitions	$329M	$901M
Weighted avg stabilized cap rate	4.3%	4.6%
Development Stabilizations	$1,050M	$2,501M
Estimated weighted avg yield	6.4%	6.1%
Estimated weighted avg margin	68.2%	53.0%
Estimated value creation	$716M	$1,326M
% Build-to-suit	43.9%	41.8%
Development Starts	$992M	$3,625M
Estimated weighted avg yield	5.3%	5.6%
Estimated weighted avg margin	29.4%	31.7%
Estimated value creation	$291M	$1,149M
% Build-to-suit	39.0%	46.5%
Total Dispositions and Contributions	$1,740M	$4,246M
Weighted avg stabilized cap rate (excluding land and other real estate)	4.1%	4.3%

BALANCE SHEET & LIQUIDITY

During the fourth quarter, Prologis and its co-investment ventures issued $2.9 billion of debt at a weighted average interest rate of 1.1 percent, and issued $11.5 billion of debt for the full year at a weighted average interest rate of 1.3 percent, including $906 million in green bonds. The company maintained its leading liquidity position with approximately $5.0 billion in cash and availability on its credit facilities at year-end.

As of December 31, 2021, debt as a percentage of total market capitalization was 13.5 percent and the company's weighted average interest rate on its share of total debt was 1.7 percent with a weighted average term of 10.0 years. The combined investment capacity of Prologis and its open-ended ventures, at levels in line with their current ratings, is approximately $15.5 billion.

GLOBAL 100

Prologis is the #1 real estate investment trust (REIT) on the newly released 2022 Global 100 Most Sustainable Corporations in the World list. This is the company's thirteenth appearance on the list, which is widely considered one of the most reputable sustainability rankings. Corporate Knights, a specialized media company and investment research firm, ranks publicly traded global companies on a broad scope of metrics related to environmental stewardship, social responsibility and governance (ESG).

2022 GUIDANCE

"While 2021 was a year of many records, most of the benefit from the current environment will be realized in the future," said Thomas S. Olinger, chief financial officer, Prologis. "Our high-quality growth profile is driven by our lease mark-to-market, profitable Strategic Capital business, development build-out potential and leverage capacity, all of which provide a clear, tangible runway for sector-leading growth for many years to come."

2022 GUIDANCE
Earnings (per diluted share)
Net Earnings	$4.40 to $4.55
Core FFO*	$5.00 to $5.10
Core FFO, excluding net promote income*	$4.45 to $4.55

Operations
Average occupancy	96.5% to 97.5%
Cash Same Store NOI* - PLD share	6.0% to 7.0%

Strategic Capital (in millions)
Strategic capital revenue, excl promote revenue	$540 to $560
Net promote income	$420

G&A (in millions)
General & administrative expenses	$300 to $315

Capital Deployment – Prologis Share (in millions)	Prologis Share	Owned and Managed
Development stabilizations	$2,300 to $2,600	$2,900 to $3,200
Development starts	$4,500 to $5,000	$5,000 to $5,500
Building acquisitions	$700 to $1,200	$1,500 to $2,500
Building contributions	$1,600 to $1,900	$2,200 to $2,600
Building and land dispositions	$1,500 to $1,800	$1,700 to $2,000
Net sources/(uses)	$(2,100) to $(2,500)	$(2,600) to $(3,400)
Realized development gains	$700 to $800

* 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 for 2022 relates predominantly to these items. Please refer to our fourth quarter 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.

January 19, 2022, CALL DETAILS

The call will take place on Wednesday, January 19, 2022, at 9:00 a.m. PT/12:00 p.m. ET. To access a live broadcast of the call, please dial +1 (888) 330-2502 (toll-free from the United States and Canada) or +1 (240) 789-2713 (from all other countries) and enter conference code 7126328. A live webcast can be accessed from the Investor Relations section of www.prologis.com.

A telephonic replay will be available January 19 – February 2 at +1 (800) 770-2030 (from the United States and Canada) or +1 (647) 362-9199 (from all other countries) using conference code 7126328. The webcast replay will be posted in the Investor Relations section of www.prologis.com under "Events & Presentations".

ABOUT PROLOGIS

Prologis, Inc. is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. As of December 31, 2021, 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 1.0 billion square feet (93 million square meters) in 19 countries. Prologis leases modern logistics facilities to a diverse base of approximately 5,800 customers principally across two major categories: business-to-business and retail/online fulfillment.

FORWARD-LOOKING STATEMENTS

The 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, 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 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) national, international, regional and local economic and political climates; (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; (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 the current coronavirus pandemic; 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 December 31,		Twelve Months ended December 31,
			2021	2020	2021	2020
Rental and other revenues			$ 1,077	$ 991	$ 4,168	$ 3,802
Strategic capital revenues			200	121	591	637
	Total revenues		1,277	1,112	4,759	4,439
Net earnings attributable to common stockholders			1,247	280	2,934	1,473
Core FFO attributable to common stockholders/unitholders*			860	723	3,172	2,864
AFFO attributable to common stockholders/unitholders*			965	618	3,332	2,875
Adjusted EBITDA attributable to common stockholders/unitholders*			1,332	964	4,612	4,067
Estimated value creation from development stabilizations - Prologis Share			716	301	1,326	942
Common stock dividends and common limited partnership unit distributions			483	444	1,931	1,776

Per common share - diluted:
	Net earnings attributable to common stockholders		$ 1.67	$ 0.38	$ 3.94	$ 2.01
	Core FFO attributable to common stockholders/unitholders*		1.12	0.95	4.15	3.80
	Business line reporting:
		Real estate operations*	0.96	0.87	3.73	3.30
		Strategic capital*	0.16	0.08	0.42	0.50
		Core FFO attributable to common stockholders/unitholders*	1.12	0.95	4.15	3.80
		Realized development gains, net of taxes*	0.40	0.09	1.02	0.56
Dividends and distributions per common share/unit			0.63	0.58	2.52	2.32

* This is a non-GAAP financial measure. Please see our Notes and Definitions for further explanation.

in thousands				December 31, 2021	September 30, 2021	December 31, 2020
Assets:
	Investments in real estate properties:
		Operating properties		$ 44,453,760	$ 44,209,514	$ 43,507,619
		Development portfolio		2,729,340	2,810,489	1,882,611
		Land		2,519,590	2,039,754	1,606,358
		Other real estate investments		3,302,500	3,398,937	3,387,740
				53,005,190	52,458,694	50,384,328
		Less accumulated depreciation		7,668,187	7,404,304	6,539,156
			Net investments in real estate properties	45,337,003	45,054,390	43,845,172
	Investments in and advances to unconsolidated entities			8,610,958	7,652,323	7,602,014
	Assets held for sale or contribution			669,688	571,671	1,070,724
			Net investments in real estate	54,617,649	53,278,384	52,517,910

	Cash and cash equivalents			556,117	585,071	598,086
	Other assets			3,312,454	3,153,215	2,949,009
			Total assets	$ 58,486,220	$ 57,016,670	$ 56,065,005

Liabilities and Equity:
	Liabilities:
		Debt		$ 17,715,054	$ 17,135,668	$ 16,849,076
		Accounts payable, accrued expenses and other liabilities		3,028,956	3,123,528	2,891,349
			Total liabilities	20,744,010	20,259,196	19,740,425

	Equity:
		Stockholders' equity		33,426,873	32,506,117	31,971,547
		Noncontrolling interests		3,397,538	3,335,787	3,483,526
		Noncontrolling interests - limited partnership unitholders		917,799	915,570	869,507
			Total equity	37,742,210	36,757,474	36,324,580

			Total liabilities and equity	$ 58,486,220	$ 57,016,670	$ 56,065,005

			Three Months Ended		Twelve Months Ended
			December 31,		December 31,
in thousands, except per share amounts			2021	2020	2021	2020
Revenues:
	Rental		$ 1,074,294	$ 987,810	$ 4,147,994	$ 3,791,131
	Strategic capital		199,954	120,745	590,750	636,987
	Development management and other		2,985	3,042	20,696	10,617
		Total revenues	1,277,233	1,111,597	4,759,440	4,438,735

Expenses:
	Rental		261,692	246,846	1,041,316	952,063
	Strategic capital		60,233	44,131	207,171	218,041
	General and administrative		73,823	66,144	293,167	274,845
	Depreciation and amortization		396,825	417,066	1,577,942	1,561,969
	Other		7,384	4,437	22,435	30,010
		Total expenses	799,957	778,624	3,142,031	3,036,928

Operating income before gains on real estate transactions, net			477,276	332,973	1,617,409	1,401,807
	Gains on dispositions of development properties and land, net		316,607	81,569	817,017	464,942
	Gains on other dispositions of investments in real estate, net (excluding development properties and land)		414,390	67,838	772,570	252,195

Other income (expense):
	Earnings from unconsolidated co-investment ventures, net		165,928	79,197	365,955	240,312
	Earnings from other unconsolidated ventures, net		7,041	1,329	38,300	57,058
	Interest expense		(62,897)	(76,856)	(266,228)	(314,507)
	Foreign currency and derivative gains (losses) and interest and other income, net		22,419	(113,479)	165,278	(166,429)
	Losses on early extinguishment of debt, net		-	(23,684)	(187,453)	(188,290)
		Total other income (expense)	132,491	(133,493)	115,852	(371,856)

Earnings before income taxes			1,340,764	348,887	3,322,848	1,747,088
	Current income tax expense		(48,638)	(33,572)	(172,936)	(129,714)
	Deferred income tax benefit (expense)		8,727	(7,308)	(1,322)	(744)
Consolidated net earnings			1,300,853	308,007	3,148,590	1,616,630
Net earnings attributable to noncontrolling interests			(17,307)	(18,486)	(127,075)	(93,195)
Net earnings attributable to noncontrolling interests - limited partnership units			(34,884)	(7,627)	(81,792)	(41,621)
Net earnings attributable to controlling interests			1,248,662	281,894	2,939,723	1,481,814
Preferred stock dividends			(1,538)	(1,424)	(6,152)	(6,345)
Loss on preferred stock repurchase			-	-	-	(2,347)
Net earnings attributable to common stockholders			$ 1,247,124	$ 280,470	$ 2,933,571	$ 1,473,122
Weighted average common shares outstanding - Diluted			765,559	764,761	764,762	754,414
Net earnings per share attributable to common stockholders - Diluted			$ 1.67	$ 0.38	$ 3.94	$ 2.01


			Three Months Ended		Twelve Months Ended
			December 31,		December 31,
in thousands			2021	2020	2021	2020
Net earnings attributable to common stockholders			$ 1,247,124	$ 280,470	$ 2,933,571	$ 1,473,122
Add (deduct) NAREIT defined adjustments:
	Real estate related depreciation and amortization		384,333	407,193	1,533,532	1,523,378
	Gains on other dispositions of investments in real estate, net of taxes (excluding development properties and land)		(417,310)	(67,838)	(748,854)	(252,195)
	Reconciling items related to noncontrolling interests		4,697	(22,114)	4,957	(57,400)
	Our share of reconciling items related to unconsolidated co-investment ventures		(27,633)	50,812	172,850	237,558
	Our share of reconciling items related to other unconsolidated ventures		5,501	12,247	27,554	30,283
NAREIT defined FFO attributable to common stockholders/unitholders*			$ 1,196,712	$ 660,770	$ 3,923,610	$ 2,954,746

Add (deduct) our defined adjustments:
	Unrealized foreign currency and derivative losses (gains), net		(22,789)	101,790	(172,846)	160,383
	Deferred income tax expense (benefit)		(8,727)	7,308	1,322	744
	Current income tax expense on dispositions related to acquired tax liabilities		-	1,530	2,992	5,589
	Reconciling items related to noncontrolling interests		-	(729)	915	(1,449)
	Our share of reconciling items related to unconsolidated co-investment ventures		1,215	(2,767)	(1,061)	(232)
FFO, as modified by Prologis attributable to common stockholders/unitholders*			$ 1,166,411	$ 767,902	$ 3,754,932	$ 3,119,781

Adjustments to arrive at Core FFO attributable to common stockholders/unitholders*:
	Gains on dispositions of development properties and land, net		(316,607)	(81,569)	(817,017)	(464,942)
	Current income tax expense on dispositions		8,858	11,227	38,006	40,994
	Losses on early extinguishment of debt, preferred stock repurchase and other, net		-	23,684	187,453	198,637
	Reconciling items related to noncontrolling interests		4	131	6,610	(2,466)
	Our share of reconciling items related to unconsolidated co-investment ventures		1,401	(110)	4,348	4,497
	Our share of reconciling items related to other unconsolidated ventures		235	1,477	(2,049)	(32,353)
Core FFO attributable to common stockholders/unitholders*			$ 860,302	$ 722,742	$ 3,172,283	$ 2,864,148

Adjustments to arrive at Adjusted FFO ("AFFO") attributable to common stockholders/unitholders*, including our share of unconsolidated ventures less noncontrolling interest:
	Gains on dispositions of development properties and land, net		316,607	81,569	817,017	464,942
	Current income tax expense on dispositions		(8,858)	(11,227)	(38,006)	(40,994)
	Straight-lined rents and amortization of lease intangibles		(42,334)	(39,274)	(155,613)	(133,466)
	Property improvements		(71,059)	(58,136)	(169,933)	(149,491)
	Turnover costs		(95,206)	(79,323)	(329,059)	(221,491)
	Amortization of debt premium, financing costs and management contracts, net		2,500	2,726	10,501	9,434
	Stock compensation amortization expense		28,612	23,471	113,028	109,831
	Reconciling items related to noncontrolling interests		14,215	10,835	34,511	36,258
	Our share of reconciling items related to unconsolidated ventures		(40,063)	(35,408)	(122,764)	(64,379)
AFFO attributable to common stockholders/unitholders*			$ 964,716	$ 617,975	$ 3,331,965	$ 2,874,792

* This is a non-GAAP financial measure. See the Notes and Definitions for further explanation.

		Three Months Ended		Twelve Months Ended
		December 31,		December 31,
in thousands		2021	2020	2021	2020
Net earnings attributable to common stockholders		$ 1,247,124	$ 280,470	$ 2,933,571	$ 1,473,122
	Gains on other dispositions of investments in real estate, net (excluding development properties and land)	(414,390)	(67,838)	(772,570)	(252,195)
	Depreciation and amortization expense	396,825	417,066	1,577,942	1,561,969
	Interest expense	62,897	76,856	266,228	314,507
	Current and deferred income tax expense, net	39,911	40,880	174,258	130,458
	Net earnings attributable to noncontrolling interests - limited partnership units	34,884	7,627	81,792	41,621
	Pro forma adjustments	(16,479)	1,960	(21,584)	53,753
	Preferred stock dividends	1,538	1,424	6,152	6,345
	Unrealized foreign currency and derivative losses (gains), net	(22,789)	101,790	(172,846)	160,383
	Stock compensation amortization expense	28,612	23,471	113,028	109,831
	Losses on early extinguishment of debt, preferred stock repurchase and other, net	-	23,684	187,453	198,637
Adjusted EBITDA, consolidated*		$ 1,358,133	$ 907,390	$ 4,373,424	$ 3,798,431

	Reconciling items related to noncontrolling interests	(30,793)	(30,390)	(75,644)	(103,650)
	Our share of reconciling items related to unconsolidated ventures	4,366	87,369	313,782	372,520
Adjusted EBITDA attributable to common stockholders/unitholders*		$ 1,331,706	$ 964,369	$ 4,611,562	$ 4,067,301

* This is a non-GAAP financial measure. See the Notes and Definitions for further explanation.

Adjusted EBITDA. We use Adjusted EBITDA attributable to common stockholders/unitholders ("Adjusted EBITDA"), a non-GAAP financial measure, as a measure of our operating performance. The most directly comparable GAAP measure to Adjusted EBITDA is net earnings.

We calculate Adjusted EBITDA by beginning with consolidated net earnings attributable to common stockholders and removing the effect of: interest expense, income taxes, depreciation and amortization, impairment charges, gains or losses from the disposition of investments in real estate (excluding development properties and land), gains from the revaluation of equity investments upon acquisition of a controlling interest, gains or losses on early extinguishment of debt and derivative contracts (including cash charges), similar adjustments we make to our FFO measures (see definition below), and other items, such as, amortization of stock based compensation and unrealized gains or losses on foreign currency and derivatives. We also include a pro forma adjustment to reflect a full period of NOI on the operating properties we acquire or stabilize during the quarter and to remove NOI on properties we dispose of during the quarter, assuming all transactions occurred at the beginning of the quarter. The pro forma adjustment also includes economic ownership changes in our ventures to reflect the full quarter at the new ownership percentage.

We believe Adjusted EBITDA provides investors relevant and useful information because it permits investors to view our operating performance, analyze our ability to meet interest payment obligations and make quarterly preferred stock dividends on an unleveraged basis before the effects of income tax, depreciation and amortization expense, gains and losses on the disposition of non-development properties and other items (outlined above), that affect comparability. While all items are not infrequent or unusual in nature, these items may result from market fluctuations that can have inconsistent effects on our results of operations. The economics underlying these items reflect market and financing conditions in the short-term but can obscure our performance and the value of our long-term investment decisions and strategies.

We calculate our Adjusted EBITDA, based on our proportionate ownership share of both our unconsolidated and consolidated ventures. We reflect our share of our Adjusted EBITDA measures for unconsolidated ventures by applying our average ownership percentage for the period to the applicable reconciling items on an entity by entity basis. We reflect our share for consolidated ventures in which we do not own 100% of the equity by adjusting our Adjusted EBITDA measures to remove the noncontrolling interests share of the applicable reconciling items based on our average ownership percentage for the applicable periods.

While we believe Adjusted EBITDA is an important measure, it should not be used alone because it excludes significant components of net earnings, such as our historical cash expenditures or future cash requirements for working capital, capital expenditures, distribution requirements, contractual commitments or interest and principal payments on our outstanding debt and is therefore limited as an analytical tool.

Our computation of Adjusted EBITDA may not be comparable to EBITDA reported by other companies in both the real estate industry and other industries. We compensate for the limitations of Adjusted EBITDA by providing investors with financial statements prepared according to GAAP, along with this detailed discussion of Adjusted EBITDA and a reconciliation to Adjusted EBITDA from consolidated net earnings attributable to common stockholders.

Business Line Reporting is a non-GAAP financial measure. Core FFO and development gains are generated by our three lines of business: (i) real estate operations; (ii) strategic capital; and (iii) development. The real estate operations line of business represents total Prologis Core FFO, less the amount allocated to the strategic capital line of business. The amount of Core FFO allocated to the strategic capital line of business represents the third party share of asset management fees, Net Promotes and transactional fees that we earn from our consolidated and unconsolidated co-investment ventures less costs directly associated with our strategic capital group. Realized development gains include our share of gains on dispositions of development properties and land, net of taxes. To calculate the per share amount, the amount generated by each line of business is divided by the weighted average diluted common shares outstanding used in our Core FFO per share calculation. Management believes evaluating our results by line of business is a useful supplemental measure of our operating performance because it helps the investing public compare the operating performance of Prologis' respective businesses to other companies' comparable businesses. Prologis' computation of FFO by line of business may not be comparable to that reported by other real estate companies as they may use different methodologies in computing such measures.

Calculation of Per Share Amounts

	Three Months Ended				Twelve Months Ended
	Dec. 31,				Dec. 31,
in thousands, except per share amount		2021		2020		2021		2020
Net earnings
Net earnings attributable to common stockholders	$	1,247,124	$	280,470	$	2,933,571	$	1,473,122
Noncontrolling interest attributable to exchangeable limited partnership units		34,961		7,686		82,092		41,938
Adjusted net earnings attributable to common stockholders - Diluted	$	1,282,085	$	288,156	$	3,015,663	$	1,515,060
Weighted average common shares outstanding - Basic		739,796		738,590		739,363		728,323
Incremental weighted average effect on exchange of limited partnership units		21,071		20,629		20,913		20,877
Incremental weighted average effect of equity awards		4,692		5,542		4,486		5,214
Weighted average common shares outstanding - Diluted		765,559		764,761		764,762		754,414
Net earnings per share - Basic	$	1.69	$	0.38	$	3.97	$	2.02
Net earnings per share - Diluted	$	1.67	$	0.38	$	3.94	$	2.01
Core FFO
Core FFO attributable to common stockholders/unitholders	$	860,302	$	722,742	$	3,172,283	$	2,864,148
Noncontrolling interest attributable to exchangeable limited partnership units		158		131		567		598
Core FFO attributable to common stockholders/unitholders - Diluted	$	860,460	$	722,873	$	3,172,850	$	2,864,746
Weighted average common shares outstanding - Basic		739,796		738,590		739,363		728,323
Incremental weighted average effect on exchange of limited partnership units		21,071		20,629		20,913		20,877
Incremental weighted average effect of equity awards		4,692		5,542		4,486		5,214
Weighted average common shares outstanding - Diluted		765,559		764,761		764,762		754,414
Core FFO per share - Diluted	$	1.12	$	0.95	$	4.15	$	3.80

Estimated Value Creation represents the value that we expect to create through our development and leasing activities. We calculate Estimated Value Creation by estimating the Stabilized NOI that the property will generate and applying a stabilized capitalization rate applicable to that property. Estimated Value Creation is calculated as the amount by which the value exceeds our TEI and does not include any fees or promotes we may earn.

Estimated Weighted Average Margin is calculated on development properties as Estimated Value Creation, less estimated closing costs and taxes, if any, on properties expected to be sold or contributed, divided by TEI.

Estimated Weighted Average Stabilized Yield is calculated on the properties in the Development Portfolio as Stabilized NOI divided by TEI. The yields on a Prologis Share basis were as follows:

FFO, as modified by Prologis attributable to common stockholders/unitholders ("FFO, as modified by Prologis"); Core FFO attributable to common stockholders/unitholders ("Core FFO"); AFFO attributable to common stockholders/unitholders ("AFFO"); (collectively referred to as "FFO").

	Pre-Stabilized Developments			2022 Expected Completion			2023 and Thereafter Expected Completion			Total Development Portfolio
U.S.		6.4	%		5.9	%		5.3	%		5.9	%
Other Americas		7.9	%		7.6	%	-				7.6	%
Europe		5.2	%		5.0	%	-				5.0	%
Asia		5.6	%		5.3	%		5.7	%		5.5	%
Total		5.9	%		5.7	%		5.7	%		5.7	%

FFO is a non-GAAP financial measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net earnings.

The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as earnings computed under GAAP to exclude historical cost depreciation and gains and losses from sales net of any related tax, along with impairment charges, of previously depreciated properties. We also exclude the gains on revaluation of equity investments upon acquisition of a controlling interest and the gain recognized from a partial sale of our investment, as these are similar to gains from the sales of previously depreciated properties. We exclude similar adjustments from our unconsolidated entities and the third parties' share of our consolidated co-investment ventures.

Our FFO Measures

Our FFO measures begin with NAREIT's definition and we make certain adjustments to reflect our business and the way that management plans and executes our business strategy. While not infrequent or unusual, the additional items we adjust for in calculating FFO, as modified by Prologis, Core FFO and AFFO, as defined below, are subject to significant fluctuations from period to period. Although these items may have a material impact on our operations and are reflected in our financial statements, the removal of the effects of these items allows us to better understand the core operating performance of our properties over the long term. These items have both positive and negative short-term effects on our results of operations in inconsistent and unpredictable directions that are not relevant to our long-term outlook.

We calculate our FFO measures, as defined below, based on our proportionate ownership share of both our unconsolidated and consolidated ventures. We reflect our share of our FFO measures for unconsolidated ventures by applying our average ownership percentage for the period to the applicable reconciling items on an entity by entity basis. We reflect our share for consolidated ventures in which we do not own 100% of the equity by adjusting our FFO measures to remove the noncontrolling interests share of the applicable reconciling items based on our average ownership percentage for the applicable periods.

These FFO measures are used by management as supplemental financial measures of operating performance and we believe that it is important that stockholders, potential investors and financial analysts understand the measures management uses. We do not use our FFO measures as, nor should they be considered to be, alternatives to net earnings computed under GAAP, as indicators of our operating performance, as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs.

We analyze our operating performance principally by the rental revenues of our real estate and the revenues from our strategic capital business, net of operating, administrative and financing expenses. This income stream is not directly impacted by fluctuations in the market value of our investments in real estate or debt securities.

FFO, as modified by Prologis

To arrive at FFO, as modified by Prologis, we adjust the NAREIT defined FFO measure to exclude the impact of foreign currency related items and deferred tax, specifically:

(i)	deferred income tax benefits and deferred income tax expenses recognized by our subsidiaries;
(ii)	current income tax expense related to acquired tax liabilities that were recorded as deferred tax liabilities in an acquisition, to the extent the expense is offset with a deferred income tax benefit in earnings that is excluded from our defined FFO measure;
(iii)	foreign currency exchange gains and losses resulting from (a) debt transactions between us and our foreign entities, (b) third-party debt that is used to hedge our investment in foreign entities, (c) derivative financial instruments related to any such debt transactions, and (d) mark-to-market adjustments associated with other derivative financial instruments.

We use FFO, as modified by Prologis, so that management, analysts and investors are able to evaluate our performance against other REITs that do not have similar operations or operations in jurisdictions outside the U.S.

Core FFO

In addition to FFO, as modified by Prologis, we also use Core FFO. To arrive at Core FFO, we adjust FFO, as modified by Prologis, to exclude the following recurring and nonrecurring items that we recognize directly in FFO, as modified by Prologis:

(i)	gains or losses from the disposition of land and development properties that were developed with the intent to contribute or sell;
(ii)	income tax expense related to the sale of investments in real estate;
(iii)	impairment charges recognized related to our investments in real estate generally as a result of our change in intent to contribute or sell these properties;
(iv)	gains or losses from the early extinguishment of debt and redemption and repurchase of preferred stock; and
(v)	expenses related to natural disasters.

We use Core FFO, including by segment and region, to: (i) assess our operating performance as compared to other real estate companies; (ii) evaluate our performance and the performance of our properties in comparison with expected results and results of previous periods; (iii) evaluate the performance of our management; (iv) budget and forecast future results to assist in the allocation of resources; (v) provide guidance to the financial markets to understand our expected operating performance; and (vi) evaluate how a specific potential investment will impact our future results.

AFFO

To arrive at AFFO, we adjust Core FFO to include realized gains from the disposition of land and development properties, net of current tax expense, and recurring capital expenditures and exclude the following items that we recognize directly in Core FFO:

(i)	straight-line rents;
(ii)	amortization of above- and below-market lease intangibles;
(iii)	amortization of management contracts;
(iv)	amortization of debt premiums and discounts and financing costs, net of amounts capitalized, and;
(v)	stock compensation amortization expense.

We use AFFO to (i) assess our operating performance as compared to other real estate companies; (ii) evaluate our performance and the performance of our properties in comparison with expected results and results of previous periods; (iii) evaluate the performance of our management; (iv) budget and forecast future results to assist in the allocation of resources; and (v) evaluate how a specific potential investment will impact our future results.

Limitations on the use of our FFO measures

While we believe our modified FFO measures are important supplemental measures, neither NAREIT's nor our measures of FFO should be used alone because they exclude significant economic components of net earnings computed under GAAP and are, therefore, limited as an analytical tool. Accordingly, these are only a few of the many measures we use when analyzing our business. Some of the limitations are:

The current income tax expenses that are excluded from our modified FFO measures represent the taxes that are payable.
Depreciation and amortization of real estate assets are economic costs that are excluded from FFO. FFO is limited, as it does not reflect the cash requirements that may be necessary for future replacements of the real estate assets. Furthermore, the amortization of capital expenditures and leasing costs necessary to maintain the operating performance of logistics facilities are not reflected in FFO.
Gains or losses from property dispositions and impairment charges related to expected dispositions represent changes in value of the properties. By excluding these gains and losses, FFO does not capture realized changes in the value of disposed properties arising from changes in market conditions.
The deferred income tax benefits and expenses that are excluded from our modified FFO measures result from the creation of a deferred income tax asset or liability that may have to be settled at some future point. Our modified FFO measures do not currently reflect any income or expense that may result from such settlement.
The foreign currency exchange gains and losses that are excluded from our modified FFO measures are generally recognized based on movements in foreign currency exchange rates through a specific point in time. The ultimate settlement of our foreign currency-denominated net assets is indefinite as to timing and amount. Our FFO measures are limited in that they do not reflect the current period changes in these net assets that result from periodic foreign currency exchange rate movements.
The gains and losses on extinguishment of debt or preferred stock that we exclude from our Core FFO, may provide a benefit or cost to us as we may be settling our obligation at less or more than our future obligation.
The natural disaster expenses that we exclude from Core FFO are costs that we have incurred.

We compensate for these limitations by using our FFO measures only in conjunction with net earnings computed under GAAP when making our decisions. This information should be read with our complete Consolidated Financial Statements prepared under GAAP. To assist investors in compensating for these limitations, we reconcile our modified FFO measures to our net earnings computed under GAAP.

Guidance. The following is a reconciliation of our annual guided Net Earnings per share to our guided Core FFO per share:

	Low		High
Net Earnings (a)	$	4.40	$	4.55
Our share of:
Depreciation and amortization		2.30		2.35
Net gains on real estate transactions, net of taxes		(1.70)		(1.80)
Unrealized foreign currency losses, loss on early extinguishment of debt and other, net		0.00		0.00
Core FFO	$	5.00	$	5.10


(a)	Earnings guidance includes potential future gains recognized from real estate transactions, but excludes future foreign currency or derivative gains or losses as these items are difficult to predict.

Owned and Managed represents the consolidated properties and properties owned by our unconsolidated co-investment ventures, which we manage.

Prologis Share represents our proportionate economic ownership of each entity included in our total Owned and Managed portfolio whether consolidated or unconsolidated.

Rent Change (Cash) represents the percentage change in starting rental rates per the lease agreement, on new and renewed leases, commenced during the period compared with the previous ending rental rates in that same space. This measure excludes any short-term leases of less than one-year, holdover payments, free rent periods and introductory (teaser rates) defined as 50% or less of the stabilized rate.

Rent Change (Net Effective) represents the percentage change in net effective rental rates (average rate over the lease term), on new and renewed leases, commenced during the period compared with the previous net effective rental rates in that same space. This measure excludes any short-term leases of less than one year and holdover payments.

Retention is the square footage of all leases commenced during the period that are rented by existing tenants divided by the square footage of all expiring and in-place leases during the reporting period. The square footage of tenants that default or buy-out prior to expiration of their lease and short-term leases of less than one year, are not included in the calculation.

Same Store. Our same store metrics are non-GAAP financial measures, which are commonly used in the real estate industry and expected from the financial community, on both a net effective and cash basis. We evaluate the performance of the operating properties we own and manage using a "same store" analysis because the population of properties in this analysis is consistent from period to period, which allows us and investors to analyze our ongoing business operations. We determine our same store metrics on property NOI, which is calculated as rental revenue less rental expense for the applicable properties in the same store population for both consolidated and unconsolidated properties based on our ownership interest, as further defined below.

We define our same store population for the three months ended December 31, 2021 as the properties in our Owned and Managed Operating Portfolio, including the property NOI for both consolidated properties and properties owned by the unconsolidated co-investment ventures at January 1, 2020 and owned throughout the same three-month period in both 2020 and 2021. We believe the drivers of property NOI for the consolidated portfolio are generally the same for the properties owned by the ventures in which we invest and therefore we evaluate the same store metrics of the Owned and Managed portfolio based on Prologis' ownership in the properties ("Prologis Share"). The same store population excludes properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the period (January 1, 2020) and properties acquired or disposed of to third parties during the period. To derive an appropriate measure of period-to-period operating performance, we remove the effects of foreign currency exchange rate movements by using the reported period-end exchange rate to translate from local currency into the U.S. dollar, for both periods.

As non-GAAP financial measures, the same store metrics have certain limitations as an analytical tool and may vary among real estate companies. As a result, we provide a reconciliation of Rental Revenues less Rental Expenses ("Property NOI") (from our Consolidated Financial Statements prepared in accordance with U.S. GAAP) to our Same Store Property NOI measures, as follows:

		Three Months Ended
		Dec. 31,
dollars in thousands		2021		2020		Change (%)
Reconciliation of Consolidated Property NOI to Same Store Property NOI measures:
Rental revenues		$	1,074,294	$	987,810
Rental expenses			(261,692)		(246,846)
Consolidated Property NOI		$	812,602	$	740,964
Adjustments to derive same store results:
	Property NOI from consolidated properties not included in same store portfolio and other adjustments (a)		(259,558)		(227,945)
	Property NOI from unconsolidated co-investment ventures included in same store portfolio (a)(b)		571,792		542,525
	Third parties' share of Property NOI from properties included in same store portfolio (a)(b)		(458,995)		(438,257)
Prologis Share of Same Store Property NOI – Net Effective (b)		$	665,841	$	617,287		7.9	%
	Consolidated properties straight-line rent and fair value lease adjustments included in the same store portfolio (c)		(14,496)		(10,784)
	Unconsolidated co-investment ventures straight-line rent and fair value lease adjustments included in the same store portfolio (c)		(11,802)		(14,525)
	Third parties' share of straight-line rent and fair value lease adjustments included in the same store portfolio (b)(c)		8,281		10,822
Prologis Share of Same Store Property NOI – Cash (b)(c)		$	647,824	$	602,800		7.5	%


(a)	We exclude properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the period and properties acquired or disposed of to third parties during the period. We also exclude net termination and renegotiation fees to allow us to evaluate the growth or decline in each property's rental revenues without regard to one-time items that are not indicative of the property's recurring operating performance. Net termination and renegotiation fees represent the gross fee negotiated to allow a customer to terminate or renegotiate their lease, offset by the write-off of the asset recorded due to the adjustment to straight-line rents over the lease term. Same Store Property NOI is adjusted to include an allocation of property management expenses for our consolidated properties based on the property management services provided to each property (generally, based on a percentage of revenues). On consolidation, these amounts are eliminated and the actual costs of providing property management and leasing services are recognized as part of our consolidated rental expense.
(b)	We include the Property NOI for the same store portfolio for both consolidated properties and properties owned by the co-investment ventures based on our investment in the underlying properties. In order to calculate our share of Same Store Property NOI from the co-investment ventures in which we own less than 100%, we use the co-investment ventures' underlying Property NOI for the same store portfolio and apply our ownership percentage at December 31, 2021 to the Property NOI for both periods, including the properties contributed during the period. We adjust the total Property NOI from the same store portfolio of the co-investment ventures by subtracting the third parties' share of both consolidated and unconsolidated co-investment ventures. During the periods presented, certain wholly owned properties were contributed to a co-investment venture and are included in the same store portfolio. Neither our consolidated results nor those of the co-investment ventures, when viewed individually, would be comparable on a same store basis because of the changes in composition of the respective portfolios from period to period (e.g. the results of a contributed property are included in our consolidated results through the contribution date and in the results of the venture subsequent to the contribution date based on our ownership interest at the end of the period). As a result, only line items labeled "Prologis Share of Same Store Property NOI" are comparable period over period.
(c)	We further remove certain noncash items (straight-line rent and amortization of fair value lease adjustments) included in the financial statements prepared in accordance with U.S. GAAP to reflect a Same Store Property NOI – Cash measure. We manage our business and compensate our executives based on the same store results of our Owned and Managed portfolio at 100% as we manage our portfolio on an ownership blind basis. We calculate those results by including 100% of the properties included in our same store portfolio.

Weighted Average Interest Rate is based on the effective rate, which includes the amortization of related premiums and discounts and finance costs.

Weighted Average Stabilized Capitalization ("Cap") Rate is calculated as Stabilized NOI divided by the Acquisition Price.

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SOURCE Prologis, Inc.

Prologis Reports Fourth Quarter and Full Year 2021 Earnings Results