PLD 10-K & 10-Q changes, risk factors and insider trading

Our operations and structure involve various risks that could adversely affect our business and financial condition, including but not limited to, our financial position, results of operations, cash flow, ability to make distributions and payments to security holders and the market value of our securities. These risks relate to Prologis as well as our investments in consolidated and unconsolidated entities and include among others, (i) risks related to our global operations; (ii) risks related to our business; (iii) risks related to financing and capital; and (iv) risks related to income taxes.

We conduct a significant portion of our business and employ a substantial number of people outside of the U.S. During 2024,2025, we generated approximately $688$788 millionmillion, or 8.4%9.0% of our consolidated revenuesrevenues, from operations outside the U.S. Circumstances and developments related to international operations that could negatively impact us include, but are not limited to, the following factors:

We hold significant real estate investments in international markets where the U.S. dollar is not the functional currency. At December 31, 2024,2025, approximately $11.5$13.7 billionbillion, or 12.1%13.8% of our total consolidated assetsassets, were invested in a currency other than the U.S. dollar, principally the British pound sterling, Canadian dollar, euro and Japanese yen. For the year ended December 31, 2024,2025, $382.7$432.8 millionmillion, or 6.3%6.6% of our total consolidated segment NOINOI, was denominated in a currency other than the U.S. dollar. See Note 1716 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for more information on these amounts. As a result, we are exposed to foreign currency risk due to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar. While we endeavor to manage this risk through our hedging and financing activities, a significant change in the value of the foreign currency of one or more countries where we have a significant investment may have a material adverse effect on our business and, specifically, our U.S. dollar reported financial position and results of operations.

Our O&M portfolio, which includes our consolidated properties and properties owned by our unconsolidated co-investment ventures, has concentrations of properties in the same markets mentioned above, as well as in markets in Germany, Japan, Mexico,Mexico and the U.K., and are subject to the economic conditions in those markets.

We may decide to sell or contribute properties to certain of our co-investment ventures or sell properties to third parties to generate proceeds to fund our capital deployment activities. Our ability to sell or contribute properties on advantageous terms is affected by: (i) competition from other owners of properties that are trying to dispose of their properties; (ii) economic and market conditions, including the capitalization rates applicable to our properties; and (iii) other factors beyond our control. If our competitors sell assets similar to assets we intend to divest in the same markets or at valuations below our valuations for comparable assets, we may be unable to divest our assets at favorable pricing or at all. The co-investment ventures or third parties who might acquire our properties may need to have access to debt and equity capital, in the private and public markets, in order to acquire properties from us. Should they have limited or no access to capital on favorable terms, then dispositions and contributions could be delayed.

We have acquired properties and will continue to acquire properties through the direct acquisition of real estate, the acquisition of entities that own real estate or through additional investments in co-investment ventures that acquire properties. The acquisition of properties involves risks, including the risk that the acquired property will not perform as anticipated and that any actual costs for rehabilitation, repositioning, renovation and improvements identified in the pre-acquisition due diligence process will exceed estimates. When we acquire properties, we may face risks associated with entering a new market such as a lack of market knowledge or understanding of the local economy, forging new business relationships in the area and unfamiliarity with local government and permitting procedures. Additionally, there is, and itwe isexpect expectedthat there will continue to be, significant competition for properties that meet our investment criteria as well as risks associated with obtaining financing for acquisition activities. The acquired properties or entities may be subject to liabilities, including tax liabilities, which may be without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based on our new ownership of any of these entities or properties, then we may have to pay substantial sums to settle it.

we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmentalpermits, permitsauthorizations and authorizations,agreements from governmental authorities or sufficient,utilities for our development projects, including as related to obtaining sufficient or reliable power for our data centers;

we may incur higher construction costs,and other costs for our development projects, due primarily to this inflationary environment, along with the evolving technological demands for data centers, which are more power-intensive, or additional costs related to regulation that exceed our estimates and projects may not be completed, delivered or stabilized as planned due to defects or other issues;

We generally seek to maintain sufficient influence over our co-investment ventures to permit us to achieve our business objectives; however, we may not be able to continue to do so indefinitely. We have formed publicly traded investment vehicles, such as NPRNippon Prologis REIT, Inc., China AMC Prologis Logistics REIT and FIBRA Prologis, for which we serve as sponsor or manager. These entities bear their own risks related to trading markets, foreign currency exchange rates and market demand. We have contributed, and may continue to contribute assets into such vehicles. There is a risk that our managerial relationship may be terminated.

Environmental laws in some countries, including the U.S., also require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos, adequately inform or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is disturbed during building renovation or demolition. These laws may impose fines and penalties on building owners or operators who fail to comply with these requirements and may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos. Some of our properties are known to contain asbestos-containing building materials.

Our business and operations could suffer in the event of system failuresfailures, cybersecurity attacks or cybersecurityrisks attacks.associated with AI.

Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for our internal and hosted information technology systems, our systems are vulnerable to damages from any number of sources, including energy blackouts, natural disasters, terrorism, war, adverse impacts of AI, telecommunication failures and cybersecurity attacks, such as malware, ransomware, or unauthorized access. Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. We may incur additional costs for remediation caused by such disruptions. Third-party security events at vendors, sub-processors, and service providers could also impact our data and operations through unauthorized access to information or disruption of services which may ultimately result in losses. Despite training, detection systems and response procedures, an increase in email attacks (phishing and business email compromise) and the rise in use of AI tools may create disruption to our business, financial and reputational risk.

We and our unconsolidated co-investment ventures carry insurance coverage including property damage and rental loss insurance resulting from certain perils such as fire and additional perils as covered under an extended coverage policy, namely windstorm, flood, earthquake and terrorism; commercial general liability insurance; and environmental insurance, as appropriate for the markets where each of our properties and business operations are located. The insurance coverage contains policy specifications and insured limits customarily carried for similar properties, business activities and markets. We believe our properties and the properties of our co-investment ventures are adequately insured. Certain losses, however, including losses from floods, earthquakes, acts of war, acts of terrorism or riots and pandemics, generally are not insured against or not fully insured against because it is not deemed economically feasible or prudent to do so. If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of our properties, we could experience a significant loss of capital invested and future revenues in these properties and could potentially remain obligated under any recourse debt associated with the property.

To qualify as a REIT, we are required each year to distribute at least 90% of our REIT taxable income (determined without regard to the dividends-paid deduction and by excluding any net capital gain) to our stockholders and we may be subject to tax to the extent our taxable income is not fully distributed. Historically, we have satisfied these distribution requirements by making cash distributions to our stockholders, however, we may elect to pay a portion of the distribution in shares of our stock. Assuming we continue to satisfy these distribution requirements with cash, we may not be able to fund all future capital needs, including acquisition and development activities, from cash retained from operations and may have to rely on third-party sources of capital. Furthermore, to maintain our REIT status and not have to pay federal income and excise taxes, we may need to borrow funds on a short-term basis to meet the REIT distribution requirements even if the then-prevailing market conditions are not favorable for these borrowings. These short-term borrowing needs could result from differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes, or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments. Our ability to access debt and equity capital on favorable terms or at all depends on a number of factors, including general market conditions, the market’s perception of our growth potential, our current and potential future earnings and cash distributions and the market price of our securities.

Our credit ratings atAt December 31, 20242025, our credit ratings were A from Standard &and Poor's and A2 from Moody's, both with a stable outlook and A3 from Moody's with a positive outlook.outlooks. A securities rating is not a recommendation to buy, sell or hold securities and ismay subjectbe to revisionrevised or withdrawalwithdrawn at any time by the ratingissuing organization.agency.

Prologis, Inc. elected to be taxed as a REIT under Sections 856 through 860 of the IRC commencing with the taxable year ended December 31, 1997. We believe Prologis, Inc. has been organized and operated to qualify as a REIT under the IRC and believe that the current organization and method of operation comply with the rules and regulations promulgated under the IRC to enable Prologis, Inc. to continue to qualify as a REIT. However, it is possible that we are organized or have operated in a manner that would not allow Prologis, Inc. to qualify as a REIT, or that our future operations could cause Prologis, Inc. to fail to qualify. Qualification as a REIT requires us to satisfy numerous requirements (some annually and others on a quarterly basis) established under highly technical and complex sections of the IRC for which there are only limited judicial and administrative interpretations and involves the determination of various factual matters and circumstances not entirely within our control. For example, to qualify as a REIT, Prologis, Inc. must derive at least 95% of its gross income in any year from qualifying sources. In addition, Prologis, Inc. must pay dividends to its stockholders aggregating annually at least 90% of its taxable income (determined without regard to the dividends paid deduction and by excluding capital gains) and must satisfy specified asset tests on a quarterly basis. Historically, we have satisfied these distribution requirements by making cash distributions to our stockholders, but we may choose to satisfy these requirements by making distributions of cash, stock or other property. The provisions of the IRC and applicable Treasury regulations regarding qualification as a REIT are more complicated for Prologis, Inc. because we hold substantially all of our assets through the OP.

Furthermore, we own a direct or indirect interest in certain subsidiary REITs that elected to be taxed as REITs under Sections 856 through 860 of the IRC. Provided that each subsidiary REIT qualifies as a REIT, our interest in such subsidiary REIT will be treated as a qualifying real estate asset for purposes of the REIT asset tests, and any dividend income or gains derived by us from such subsidiary REIT will generally be treated as income that qualifies for purposes of the REIT 95% and 75% gross income tests. To qualify as a REIT, the subsidiary REIT must independently satisfy all of the REIT qualification requirements. If such subsidiary REIT were to fail to qualify as a REIT, and certain relief provisions did not apply, it would be treated as a regular taxable corporation and its income would be subject to U.S. federal income tax. In addition, a failure of the subsidiary REIT to qualify as a REIT would have an adverse effect on the ability of Prologis, Inc. to comply with the REIT income and asset tests, and thus its ability to qualify as a REIT.

A discussion regarding our financial condition and results of operations for 20242025 compared to 20232024 is presented below. Information on 20222023 is included in graphs only to show year over year trends in our results of operations and operating metrics. Our financial condition for 2022,2023, results of operations for 2022,2023, and 20232024 compared to 20222023 and details on the acquisition of Duke Realty Corporation and Duke Realty Limited Partnership (collectively "Duke" or the "Duke Transaction") isare referenced throughout this document and can be found under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is incorporated by reference herein to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023,2024, filed with the SEC on February 13,14, 2024,2025, and is available on the SEC’s website at www.sec.gov and our Investor Relations website at ir.prologis.com.

Our operating results wereduring strong2025 incontinued 2024,to despitereflect the softeningfavorable mark-to-market of rents and occupancy in our globalexisting logisticsleases, markets. Due toreflecting increases in market rents over the lastpast several years,years. ourAs existinga lease mark-to-market continued to driveresult, rent change on rollover and same-store growth in our O&M portfolio.portfolio remained strong. This lease mark-to-market has remained meaningfully positive at 18% (on an NER and our share basis), despite recent quarters of lowerlower, or evenin negativesome cases negative, market rental growthgrowth, due toreflecting the compounded nature of marketaccumulated rent growth.growth Ourembedded operatingin portfolioour occupancy was 95.8% at December 31, 2024 and rent change onin-place leases that commencedremains duringto thebe year was 68.7%, on a net effective basis, both metrics based on our ownership share.realized.

We generated net proceeds of $4.8$2.7 billion and realized net gains on real estate transactions of $1.3$944 billion,million, principally from the contribution of properties we developed to our unconsolidated co-investment ventures in the U.S. and Europe and sales of non-strategic properties to third parties in the U.S.U.S., including a data center.

At December 31, 2024,2025, we had total available liquidity of $7.4$7.6 billion, including borrowingavailable capacity on our credit facilities of $6.1$6.5 billion and unrestricted cash balances of $1.3$1.1 billion.

At December 31, 2024,2025, our total debt was $30.9$35.0 billion with a weighted average maturityterm of 9 years and an effective interest rate of 3.1%.3.2%. Our financing activities during the year included the following:

In MarchJune 2024,2025, we established aan additional commercial paper program, under which we may issue, repay and re-issue short-term unsecured commercial paper notes (“CPNs”) denominated in British pound sterling, euros or U.S. dollars.dollars in an aggregate amount of up to €1.0 billion (or its equivalent in other currencies). At any point in time, we are required to maintain available commitments under our credit facilities in an amount at least equal to the amount of the CPNs outstanding.

We issued $3.4 billion of senior notes with an issuance date weighted average interest rate of $4.24.2% billionand weighted average term of 8 years (principal in millions):

This reportable segment principally includes rental revenue and rental expenses recognized from our consolidated properties. This segment also includes the operating results of our renewable energy assets. We allocate the costs of our property management and leasing functions to the Real Estate Segment through Rental Expenses and the Strategic Capital Segment through Strategic Capital

leasing functions to the Real Estate Segment through Rental Expenses and the Strategic Capital Segment through Strategic Capital Expenses, both in the Consolidated Financial Statements, based on the square footage of the relative portfolios. In addition, this segment is impacted by our development, acquisition and disposition activities.

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. Development margins fluctuate depending on several factors including cost of capital, changes in capitalization rates that are used to estimate value at completion and location and type of development, such as build-to-suit development.or speculative.

At December 31, 2024,2025, the consolidated development portfolio, including properties under development and pre-stabilized properties, was expected to be completed before JulySeptember 2027 with a TEI of $4.7$5.1 billion and was 31.9%53.5% leased.leased, Thisincluding includes$686 the developmentmillion of TEI for data centers with an aggregate TEI of $0.9 billion, on a consolidated basis.centers. Our investment in the development portfolio was $2.8$3.0 billion at December 31, 2024.2025. For additional information on our development portfolio at December 31, 2024,2025, see Item 2. Properties.

We capitalize costs incurred in improving and leasing our consolidated operating properties and other real estate investments as part of the investment basis or within Other Assets in the Consolidated Balance Sheets. The following graph summarizes recurring capitalized expenditures and leasing costs of our consolidated operating properties during each year and excludes development costs and spend subsequent to stabilization that is structural in nature and non-recurring:

This reportable segment includes revenues from asset management and property management services, transactional services for acquisition, disposition and leasing activity and promote revenue earned from the unconsolidated co-investment ventures. Revenues associated with the Strategic Capital Segment fluctuate because of changes in the size of the portfolios through acquisitions and dispositions, the fair value of the properties, timing of promotes, foreign currency exchange rates and other transactional activity. These revenues are reduced by the direct costs associated with the asset and property-level management expenses for the properties owned by these ventures. We allocate the costs of our property management and leasing functions to the Strategic Capital Segment through Strategic Capital Expenses and to the Real Estate Segment through Rental Expenses both in the Consolidated Financial Statements, based on the square footage of the relative portfolios. For further details regarding the key property information and summarized financial condition and operating results of our unconsolidated co-investment ventures, refer to Note 5 to the Consolidated Financial Statements.

Transactional fees include leasing commissions andcommissions, acquisition, disposition, development and other fees.

For promotes earned after January 2024, we amended theThe Prologis Promote Plan ("PPP") to awardawards up to 25% of the third-party portion of the promotes earned by us from the co-investment ventures to our employees. This award is issued as a combination of cash and equity-based awards, pursuant to the terms of the PPP and expensed through Strategic Capital Expenses in the Consolidated Statements of Income, as vested. ForAs promotesa earnedresult, expenses recognized in the current period may relate to promote revenues recognized in prior to January 2024, up to 40% of the third-party portion of promotes earned was awarded to certain employees.periods.

G&A expenses were $419$469 million and $390$419 million for 20242025 and 2023,2024, respectively. G&A expenses increased in 2024 as2025 compared to 2023,2024, principally due to inflationary increases and higher compensation expenses.expenses including additions in our workforce in growth areas of the business. We capitalize certain internal costs that are incremental and directly related to our development and building improvement activities.

The following table summarizes capitalized G&A expenses (dollars in millions):

Depreciation and amortization expenses were $2.6 billion and $2.5 billion in 2024both 2025 and 2023, respectively.2024.

Gains on the disposition of development properties and land were $414$258 million and $462$414 million for 20242025 and 2023,2024, respectively, primarilyprincipally from the contribution of properties we developed to unconsolidated co-investment ventures in Europe and the U.S. in 2025 and the U.S., Mexico and Europe in 20242024, and infrom Europe,sales Japanto andthird Mexicoparties in 2023.the U.S. in 2025.

Gains on other dispositions of investments in real estate were $904$686 million and $161$904 million for 20242025 and 2023,2024, respectively.respectively, The gains recognized in 2024 are primarilyprincipally from the sales of properties to third parties and the contribution of operating properties to our unconsolidated co-investment venture in the U.S. andduring both 2024 and 2023 include the sale of non-strategic properties in the U.S.years.

We manage our business and review ourevaluate operating fundamentalsperformance on an O&M basis, which includes our consolidated properties and properties owned by our unconsolidated co-investment ventures. We believe reviewing the results inon this waybasis allowsenables management to understandassess performance more broadlycomprehensively as we manage the properties without regard to their ownership. We do not control the unconsolidated co-investment ventures for purposes of GAAP and the presentation of the ventures’ operating information does not represent a legal claim.

Our O&M operating portfolio does not includeexcludes our development portfolio, value-added properties, non-industrial properties orand properties that we consider non-strategic andthat we do not have the intentintend to hold for the long termterm, thatincluding arethose classified as either held for sale or within other real estate investments. Value-added properties are properties we have either acquired at a discount and believe we could provide greater returns post-stabilization or properties we expect to repurpose to higher uses. See below for information on our O&M operating portfolio at December 31 (square feet in millions):

Square feet of leases commenced and weighted average net effective rent change were calculated for leases with initial terms of one year or greater. We retained approximately 70% or more of our customers, based on the total square feet of leases commenced, for each year. During all three years, we experienced a significant increase in net effective rent change due to increasing market rents.

Turnover costs include external leasing commissions and tenant improvements and represent the estimated obligations incurred in connection with the lease commencement for leases greater than one year.

Our same store metrics are non-GAAP financial measures, which are commonly used in the real estate industry and expected from the financial community, presented 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, allowingwhich 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, 2025 as the properties in our O&M operating portfolio, including the property NOI for both consolidated properties and properties owned by the unconsolidated co-investment ventures, at January 1, 2024 and owned throughout the same three-month period in both 2024 and 2025. 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 O&M 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, 20232024) 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. dollardollar, for both periods.

As non-GAAP financial measures, the same store metrics have certain limitations as an analytical toolstool 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.

We exclude properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the periodperiods and properties acquired or disposed of to third parties during the period.periods. We also exclude netone-time items due to early lease terminations, including termination andfees renegotiationreceived feesfrom customers and write-offsthe write-off of fair valuerelated lease assets orand liabilities to allow us to evaluate the growth or decline in each property’s rental revenues without regard to one-time itemsliabilities, that are not indicative of the property’s recurring operating performance.performance Netin terminationorder andto renegotiation fees representevaluate the gross fee negotiated to allow a customer to terminategrowth or renegotiatedecline theirin lease,each offsetproperty's byrental the write-off of the asset recorded due to the adjustment to straight-line rents over the lease term.revenues. 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.

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, 20242025 to the Property NOI for both periods, including the properties contributed during the period.periods. 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.

We recognized net earnings from unconsolidated entities, which are generallyprimarily accounted for using the equity method, of $354$403 million and $307$354 million during 20242025 and 2023,2024, respectively.

The earnings we recognize from unconsolidated entities can be impacted by: (i) the size, rental rates and occupancy of the portfolio of properties owned by each venture; (ii) interest expense based on the size and terms of the debt; (iii) gains or losses from the dispositions of properties, impairments and extinguishmentextinguishments of debt; (iv) our ownership interest in each venture; (v) other variances in revenues and expenses of each venture; and (vi) fluctuations in foreign currency exchange rates used to translate our share of net earnings to U.S. dollars. See the discussion of our unconsolidated entities above in the Strategic Capital Segment discussion and in Note 5 to the Consolidated Financial Statements for a further breakdown of our share of net earnings recognized.

Interest expense increased in 2024,2025, as compared to 2023,2024, principally due to the issuance of senior notes to finance our acquisition and development activities with higher interest rates on new issuances in both years.issuances. We issued $4.2$3.4 billion of senior notes during 20242025 and $5.4$4.2 billion during 2023,2024, with a weighted average interest rate of 4.8%4.2% and 4.7%,4.8%, respectively, at the issuance date.

WeGiven the global nature of our operations, we are exposed to foreign currency exchange risk related to investments in and earnings from our foreign investments. We primarily hedge our foreign currency risk related to our investments by borrowing in the currencies in which we invest thereby providing a natural hedge. We have issued debt in a currency that is not the same functional currency of the borrowing entity and have designated a portion of the debt as a nonderivative net investment hedge. We recognize the remeasurement and settlement of the translation adjustment on the unhedged portion of the debt and accrued interest in unrealized gains or losses. We may use derivative financial instruments to manage foreign currency exchange rate risk related to our earnings. We recognize the change in fair value of the undesignated derivative contracts in unrealized gains and losses. Upon settlement of these transactions, we recognize realized gains or losses.

We considerbelieve our ability to generate cash from operating activities, distributions from our co-investment ventures, contributions and dispositions of properties and available financing sources toprovides besufficient adequatecapacity to meet our anticipated future development, acquisition, operating, debt service, dividend and distribution requirements.

development of new industrial properties that we may hold for long-term investment or subsequently contribute to unconsolidated co-investment ventures or sell to third parties, including the acquisition of land;

repayment of debt and scheduled principal payments of $514$1.9 millionbillion in 20252026;

borrowingavailable capacity under our current credit facility arrangements that allows us to borrow on a short-term basis, with maturities generally ranging from overnight to three months ($6.1$6.5 billion available at December 31, 20242025), including our commercial paper program that we established in the first quarter of 2024programs; and

At MarchJune 31,30, 2026, no material changes had occurred in our risk factors as discussed in Item 1A. in our Annual Report on Form 10-K for the year ended December 31, 2025.

Logistics real estate demand is driven by the essential role supply chains play in the global economy and heightened by several long-term structural factors. These include: (i) customers repositioning their supply chains to meet rising e-commerce penetration and service expectations; (ii) growth in global consumption; (iii) an increased focus on supply chain efficiency and resiliency; and (iv) the need for modern, well-located facilities to support evolving distribution and fulfillment requirements. We believe these factors will

At MarchJune 31,30, 2026, we owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 1.3 billion square feet across the following geographies:

NOI from the Real Estate Segment is calculated directly from the Consolidated Financial Statements as Rental Revenues and Development Management and Other Revenues less Rental Expenses and Other Expenses. NOI from the Strategic Capital Segment is calculated directly from the Consolidated Financial Statements as Strategic Capital Revenues less Strategic Capital Expenses.‌ The second quarter of 2026 includes promote revenue net of related strategic capital expenses of $62 million.

Rental Operations. Rental operations comprise the largest component of our reportable segments and generally contributes 90% to 95% of our consolidated revenues, earnings and FFO. We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. Through our global footprint, we have a diversified lease portfolio and our revenues from in-place leases are contractual with fixed or inflation-linked escalations. For the trailing twelve months ended MarchJune 31,30, 2026, the weighted average lease term for leases commenced in our consolidated operating portfolio was 6768 months. We expect to generate earnings growth by increasing rents, maintaining high occupancy rates and controlling expenses. The primary driver of our revenue growth will be the rolling of in-place leases to current market rents upon lease expiration. We believe our active portfolio management, combined with the skills of our property management, maintenance, energy, sustainability and risk management teams allow us to maximize NOI across our portfolio. Substantially all of our consolidated rental revenue, NOI and cash flows from rental operations are generated in the U.S.

Development. Our development business provides the opportunity to profitably build modern logistics facilities that address the evolving requirements of our customers while deepening our presence in our target markets. We are also selectively expanding our development activitiesplatform to include data centers in certain markets, by focusing on procuring power and securing build-to-suit lease transactions. We believe we have a competitive advantage due to: (i) the strategic locations of our buildings and land sites; (ii) the multidisciplinary expertise of our teams; (iii) the depth of our customer relationships; (iv) our ability to secure and grow access to power; (v) our procurement capabilities that enable us to secure high-demand data center equipment; and (vi) our ability to procure high demand construction materials at a lower cost. Successful development projects contribute significantly to earnings growth as they are leased, begin generating income and increase the value of our Real Estate Segment. In general, we develop properties in the U.S. to hold for the long term or to contribute to our unconsolidated co-investment ventures, and outside the U.S. primarily to contribute to these ventures.

We partner with many of the world’s largest institutional investors through co-investment ventures. The business is capitalized through private and public equity, and is comprised of approximately 92% open-ended ventures, long-term ventures and three publicly traded vehicles: (i) Nippon Prologis REIT, Inc. in Japan; (ii) China AMC Prologis Logistics REIT in China; and (iii) FIBRA Prologis in Mexico. We align our interests with our partners by holding significant ownership interests in the co-investment ventures. Thirteen of the co-investment ventures are unconsolidated entities, and one is consolidated, with our ownership in the co-investment ventures ranging from 15% to 55%. This structure allows us to reduce our exposure to foreign currency fluctuations for non-U.S. investments. Management of the unconsolidated co-investment ventures comprises our Strategic Capital Segment.

This segment generates durable, long-term cash flows and generally contributes 5% to 10% of our consolidated revenues, earnings and FFO, excluding promotes. We generate strategic capital revenue from our unconsolidated co-investment ventures, principally through asset management and property management services. Revenue earned from asset management fees is primarily driven by the quarterly valuation of the real estate properties owned by the respective ventures. We earn additional revenues by providing leasing, acquisition, construction management, development and disposition services. The majority of the strategic capital revenues are

the quarterly valuation of the real estate properties owned by the respective ventures. We earn additional revenues by providing leasing, acquisition, construction management, development and disposition services. The majority of the strategic capital revenues are generated outside the U.S. In certain ventures, we also have the ability to earn revenues through incentive fees (“promotes” or “promote revenues”) periodically during the life of a venture, upon liquidation of a venture or upon stabilization of individual venture assets, based primarily on the total return of the investments over certain financial hurdles. Promote revenue is recognized when earned, either at the end of the promote period, or for certain ventures, without a scheduled promote period, upon achieving cumulative return thresholds or upon liquidation or stabilization.stabilization of individual venture assets.

Rent change 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 previous net effective rental rates for the same respective spaces. Net effective rent ("NER") is calculated at the beginning of the lease using estimated total cash base rent to be received over the term and annualized, and excludes fair value lease amortization from acquisitions. Amounts derived in a currency other than the U.S. dollar have been translated using the average rate from the previous twelve months. Trailing NER change is based on the twelve months immediately prior to the period ended.

Rent Growth. As a result of several years of market rent increases, our in-place leases have considerable upside potential to capture higher rents and drive future organic NOI growth. This is evident in the positive rent change we have experienced in every quarter since 2013. For lease rollovers during the three months ended MarchJune 31,30, 2026, the increases to market on our share of the O&M portfolio resulted in increases of 31.9%36.9% in NER. Rent change has remained strong, even after moderating from peak levels, reflecting healthy demand and embedded rent growth. We estimate that our share of the remaining lease mark-to-market is approximately 17% (on an NER basis), which represents the amount by which current market rents exceed our in-place rents based on our share of the O&M portfolio at MarchJune 31,30, 2026. This lease mark-to-market has remained meaningfully positive reflecting the accumulated rent growth embedded in our in-place leases remaining to be realized despiteon recent quarters of lower or even negative market rental growth.rollover. As a result, we expect lease renewals to drive higher rental income over the coming years even without further market rent increases.

Value Creation from Development. Our global development program serves as a profitable way to expand our portfolio, build scale, serve customers and create value for investors. We create these opportunities by sourcing land either through direct ownership, option strategies or Covered Land Plays ("CLPs"), which havewe intentexpect forto future redevelopment.redevelop. We primarily develop in our existing markets, focusing on logistics facilities while also pursuing higher-and-better-use conversions, such as data centers. A key enabler of these conversions is our energy procurement strategy. By leveraging our scale and relationships with utilities and energy providers, we are advancing on our strategy to secure reliable access to power that enhances the value of our land portfolio and enables us to convert select logistics sites into energy-ready data center developments and capture meaningful value creation consistent with our broader redevelopment strategy. ToDevelopment dateactivity inaccelerated during the first half of 2026, ourreflecting developmentstrengthening activities have increased due tocustomer demand conditions,across our markets and we expect thisdevelopment opportunities to continue to accelerate during the remainder of the year.

Strategic Capital Advantages. Our co-investment ventures provide third-party capital that enables us to grow our O&M portfolio, help self-fund our development activity through the sale or contribution of newly developed assets to these vehicles and generate substantial management fees. We raise capital to support the long-term growth of these ventures while maintaining significant investments of our own. In 2026, we formed four new co-investment ventures with third-party investors: two development vehicles in the U.S., one stabilized vehicle in Europe and one acquisition vehicle in Asia. At June 30, 2026, the gross book value of the

substantial management fees. We raise capital to support the long-term growth of these ventures while maintaining significant investments of our own. In the first quarter of 2026, we formed three new co-investment ventures with third-party investors: two development vehicles in the U.S. and one acquisition vehicle in Asia. At March 31, 2026, the gross book value of the operating portfolio held by all of our unconsolidated co-investment ventures was $61.9$62.4 billion across an aggregate of 562548 million square feet. We plan to continue to grow this business and increase revenues by increasing our assets under management in existing and through newly formed ventures.

Balance Sheet Strength. We have a long-standing strategy to build and maintain a strong, flexible balance sheet by using conservative levels of financial leverage. At MarchJune 31,30, 2026, the weighted average remaining term of our consolidated debt was 8 years and the weighted average interest rate was 3.2%.3.3%. At MarchJune 31,30, 2026, we had total available liquidity of $6.7$7.6 billion. We continue to maintain low leverage as a percentage of our real estate investments and our market capitalization. Our low leverage, available liquidity and investment capacity in the co-investment ventures position us to capitalize on opportunistic value-added investments as they arise.

Staying “Ahead of What’s Next™”. We continue to invest in capabilities that support customer operations, including energy,energy data,and procurementdigital infrastructure, strategic advisory, procurement, supply chain solutions and technology-enabled services. This includes investments in early and growth-stage companies that are focused on emerging technologies for the logistics sector through Prologis Ventures, our corporate venture capital group.

SUMMARY OF THE THREESIX MONTHS ENDED MARCHJUNE 31,30, 2026

Our results during the three months ended March 31, 2026We continued to reflectbenefit from the favorable mark-to-market of our existing leases, reflecting increases incumulative market rentsrent growth over the past several years. As a result, rent change on rollover and same-store growth in our O&M portfolio remained strong. ThisWe believe we remain well-positioned for long-term revenue growth, supported by the embedded rent growth in our in-place lease portfolio. At June 30, 2026, our lease mark-to-market remained meaningfully positive at approximately 17% (on an NER and our share basis), reflecting the accumulated rent growth embedded in our in-place leases remaining to be realized despiteon recent quarters of lower or even negative market rental growth.rollover.

These factors contributed to occupancy in our operating portfolio of 95.3%95.4% at MarchJune 31,30, 2026 and rent change on leases that commenced during the threesix months ended MarchJune 31,30, 2026 of 31.9%34.2% on a net effective basis, both metrics based on our ownership share.

We generated net proceeds of $909$2.0 millionbillion and realized net gains on real estate transactions of $384$676 million, principally from the contribution of landreal estate properties and development propertiesland to the new unconsolidated co-investment ventures in the U.S. and Europe and sales of properties to third parties in the U.S.

We commenced $1.6$3.0 billion of TEI of consolidated development projects, including $1.3$2.1 billion of data centers.center developments, reflecting continued expansion of our development platform.

In March 2026, we amended and restated one of our global credit facilities whilefacilities, maintaining its existing$3.0 billion borrowing capacity of $3.0 billion andwhile extending theits maturity date to 2030, with an option to extend to 2031. At March 31, 2026, we had total available liquidity of $6.7 billion, including available capacity on our credit facilities of $5.8 billion and unrestricted cash balances of $861 million.

RESULTS OF OPERATIONS – THREESIX MONTHS ENDED MARCHJUNE 31,30, 2026 AND 2025

Below is our NOI by segment per the Consolidated Financial Statements and a reconciliation of NOI by segment to Operating Income per the Consolidated Financial Statements for the threesix months ended MarchJune 3130 (in millions):

Below are the components of Real Estate Segment NOI for the threesix months ended MarchJune 31,30, derived directly from line items in the Consolidated Financial Statements (in millions):

The $106$201 million change in Real Estate Segment (“RES”) NOI for the threesix months ended MarchJune 3130 compared to the same period in 2025, was impacted by the following activities (in millions):

We calculate changes in NOI from development completions period over period by comparing the change in NOI generated on the pool of developments that completed on or after January 1, 2025 through MarchJune 31,30, 2026.

The following table summarizes consolidated development activity for the threesix months ended MarchJune 3130 (dollars and square feet in millions):

At MarchJune 31,30, 2026, the consolidated development portfolio, including properties under development and pre-stabilized properties, was expected to be completed before FebruaryMay 2028 with a TEI of $5.1$5.7 billion and was 45.9%43.2% leased, including $1.7$2.5 billion of TEI for data centers with power capacity of 423680 megawatts. Our investment in the development portfolio was $2.5$2.7 billion at MarchJune 31,30, 2026.

Below are the components of Strategic Capital Segment NOI for the threesix months ended MarchJune 31,30, derived directly from the line items in the Consolidated Financial Statements (in millions):

Below is additional detail of our Strategic Capital Segment revenues, expenses and NOI for the threesix months ended MarchJune 3130 (in millions):

G&A expenses were $127$256 million and $115$222 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. G&A expenses increased in 2026 compared to 2025, principally due to inflationary increases and higher compensation expenses. We capitalize certain internal costs that are incremental and directly related to our development and building improvement activities.

The following table summarizes capitalized G&A expenses for the threesix months ended MarchJune 3130 (dollars in millions):

We recognized depreciation and amortization expenses of $732$1.4 millionbillion and $652$1.3 millionbillion for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

Gains on the disposition of development properties and land were $293$372 million and $27$38 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, principally from the contribution of landreal estate properties and development propertiesland to unconsolidated co-investment ventures in the U.S. inand 2026.Europe.

Gains on other dispositions of investments in real estate were $91$303 million and $37$84 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, principally from sales of properties to third parties in the U.S. during both years.

Historically, we have utilized the proceeds from these dispositions primarilyprincipally to fund our acquisition and development activities. See Note 2 to the Consolidated Financial Statements for further information on these transactions.

We define our same store population for the three months ended MarchJune 31,30, 2026 as the properties in our O&M operating portfolio, including the property NOI for both consolidated properties and properties owned by the unconsolidated co-investment ventures, at January 1, 2025 and owned throughout the same three-month period in both 2025 and 2026. 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 O&M 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, 2025) 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 for the three months ended MarchJune 3130 (dollars in millions):

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 MarchJune 31,30, 2026 to the Property NOI for both periods, including the properties contributed during the periods. 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.

We recognized net earnings from unconsolidated entities, which are primarily accounted for using the equity method, of $93$241 million and $68$176 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

The following table details our net interest expense for the threesix months ended MarchJune 3130 (dollars in millions):

Interest expense increased during the threesix months ended MarchJune 31,30, 2026, as compared to the same period in 2025, principally due to the issuance of senior notes to finance our acquisition and development activities and higher interest rates on new issuances. We issued $3.4$2.2 billion of senior notes during the six months ended June 30, 2026 and $3.4 billion during the year ended December 31, 2025, with a weighted average interest rate of 4.2%4.3% and 4.2%, respectively, at the issuance date.

We recognized foreign currency, derivative and other gains (losses) and other income (expense), net, of $45$154 million in gains and $32$154 million in losses for the threesix months ended MarchJune 31,30, 2026 and 2025. This activity resulted principally from three types of transactions during the threesix months ended MarchJune 31,30, 2026 and 2025: (i) interest income earned on short-term investments and other income ($15$115 million and $14$26 million, respectively); (ii) realized settlement of undesignated derivatives ($15$20 million of gains and $9$13 million of gains, respectively); and (iii) unrealized changes in the fair value of undesignated derivatives and the remeasurement of the unhedged foreign debt that was designated as a nonderivative net investment hedge ($14 million of gains and $62$202 million of losses, respectively).

The following table summarizes our income tax expense (benefit) for the threesix months ended MarchJune 3130 (in millions):

Net earnings attributable to noncontrolling interests represents the third-party investors’ share of the earnings generated in consolidated entities in which we do not own 100% of the equity, reduced by the third-party share of fees or promotes we earned during the period. We had net earnings attributable to noncontrolling interests of $63$125 million and $47$98 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Included in these amounts were $23$46 million and $15$29 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, of net earnings attributable to the common limited partnership unitholders of Prologis, L.P.

The key driver of changes in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Financial Statements during the threesix months ended MarchJune 31,30, 2026 and 2025, was the currency translation adjustment derived from changes in exchange rates during both periods principally on our net investments in real estate outside the U.S. and the borrowings we issue in the functional currencies of the countries where we invest. These borrowings serve as a natural hedge of our foreign investments. In addition, we use derivative financial instruments, such as foreign currency contracts to manage foreign currency exchange rate risk related to our foreign investments and interest rate contracts to manage interest rate risk, that when designated the change in fair value is included in AOCI/L.