UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2026
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number: 001-13545 (Prologis, Inc.) 001-14245 (Prologis, L.P.)
Prologis, Inc.
Prologis, L.P.
(Exact name of registrant as specified in its charter)
Maryland (Prologis, Inc.)
Delaware (Prologis, L.P.)
94-3281941 (Prologis, Inc.)
94-3285362 (Prologis, L.P.)
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Pier 1, Bay 1, San Francisco, California
94111
(Address of principal executive offices)
(Zip Code)
(415) 394-9000
(Registrants’ telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Common Stock, $0.01 par value
PLD
New York Stock Exchange
2.250% Notes due 2029
PLD/29
5.625% Notes due 2040
PLD/40
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter periods that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Prologis, Inc.:
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
Prologis, L.P.:
Large accelerated filer ☐
Non-accelerated filer ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
The number of shares of Prologis, Inc.’s common stock outstanding at October 26, 2026, was approximately 950,513,000.
EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2026, of Prologis, Inc. and Prologis, L.P. Unless stated otherwise or the context otherwise requires, references to “Prologis, Inc.” or the “Parent” mean Prologis, Inc. and its consolidated subsidiaries; and references to “Prologis, L.P.” or the “Operating Partnership” or the “OP” mean Prologis, L.P., and its consolidated subsidiaries. The terms “the Company,” “Prologis,” “we,” “our” or “us” means the Parent and the OP collectively.
The Parent is a real estate investment trust (a “REIT”) and the general partner of the OP. At September 30, 2026, the Parent owned a 98.03% common general partnership interest in the OP and substantially all of the preferred units in the OP. The remaining 1.97% common limited partnership interests are owned by unaffiliated investors and certain current and former directors and officers of the Parent.
We operate the Parent and the OP as one enterprise. The management of the Parent consists of the same members as the management of the OP. These members are officers of the Parent and employees of the OP or one of its subsidiaries. As sole general partner, the Parent has control of the OP through complete responsibility and discretion in the day-to-day management and therefore, consolidates the OP for financial reporting purposes. Because the only significant asset of the Parent is its investment in the OP, the assets and liabilities of the Parent and the OP are the same on their respective financial statements.
We believe combining the quarterly reports on Form 10-Q of the Parent and the OP into this single report results in the following benefits:
It is important to understand the few differences between the Parent and the OP in the context of how we operate the Company. The Parent does not conduct business itself, other than acting as the sole general partner of the OP and issuing public equity from time to time. The OP holds substantially all the assets of the business, directly or indirectly. The OP conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Parent, which are contributed to the OP in exchange for partnership units, the OP generates capital required by the business through the OP’s operations, incurrence of indebtedness and issuance of partnership units to third parties.
The presentation of noncontrolling interests, stockholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of the Parent and those of the OP. The differences in the presentations between stockholders’ equity and partners’ capital result from the differences in the equity and capital issuances in the Parent and in the OP.
The preferred stock, common stock, additional paid-in capital, accumulated other comprehensive income (loss) and distributions in excess of net earnings of the Parent are presented as stockholders’ equity in the Parent’s consolidated financial statements. These items represent the common and preferred general partnership interests held by the Parent in the OP and are presented as general partner’s capital within partners’ capital in the OP’s consolidated financial statements. The common limited partnership interests held by the limited partners in the OP are presented as noncontrolling interest within equity in the Parent’s consolidated financial statements and as limited partners’ capital within partners’ capital in the OP’s consolidated financial statements.
To highlight the differences between the Parent and the OP, separate sections in this report, as applicable, individually discuss the Parent and the OP, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of the Parent and the OP, this report refers to actions or holdings as being actions or holdings of Prologis.
PROLOGIS
INDEX
Page
Number
PART I.
Financial Information
Item 1.
Financial Statements
1
Consolidated Balance Sheets – September 30, 2026 and December 31, 2025
Consolidated Statements of Income – Three and Nine Months Ended September 30, 2026 and 2025
2
Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2026 and 2025
3
Consolidated Statements of Equity – Three and Nine Months Ended September 30, 2026 and 2025
4
Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2026 and 2025
5
6
7
8
Consolidated Statements of Capital – Three and Nine Months Ended September 30, 2026 and 2025
9
10
Prologis, Inc. and Prologis, L.P.:
Notes to the Consolidated Financial Statements
11
Note 1. General
Note 2. Real Estate
12
Note 3. Unconsolidated Entities
13
Note 4. Assets Held for Sale or Contribution
15
Note 5. Debt
16
Note 6. Noncontrolling Interests
19
Note 7. Long-Term Compensation
20
Note 8. Earnings Per Common Share or Unit
21
Note 9. Financial Instruments and Fair Value Measurements
22
Note 10. Commitments and Contingencies
26
Note 11. Reportable Segments
27
Note 12. Supplemental Cash Flow Information
29
Reports of Independent Registered Public Accounting Firm
30
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
32
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
53
Item 4.
Controls and Procedures
54
PART II.
Other Information
Legal Proceedings
55
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Item 6.
Exhibits
Index
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
PROLOGIS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share data)
September 30, 2026
December 31, 2025
ASSETS
Investments in real estate properties
$
98,759,850
95,129,356
Less accumulated depreciation
16,359,720
14,729,149
Net investments in real estate properties
82,400,130
80,400,207
Investments in and advances to unconsolidated entities
11,505,548
11,093,936
Assets held for sale or contribution
545,788
203,344
Net investments in real estate
94,451,466
91,697,487
Cash and cash equivalents
2,273,497
1,145,647
Other assets
7,169,743
5,881,122
Total assets
103,894,706
98,724,256
LIABILITIES AND EQUITY
Liabilities:
Debt
36,832,482
35,037,073
Accounts payable and accrued expenses
2,791,737
1,963,645
Other liabilities
3,928,856
3,969,530
Total liabilities
43,553,075
40,970,248
Equity:
Prologis, Inc. stockholders’ equity:
Series Q preferred stock at stated liquidation preference of $50 per share; $0.01 par value; 1,279 shares issued and outstanding and 100,000 authorized at September 30, 2026 and December 31, 2025
63,948
Common stock; $0.01 par value; 950,396 and 929,153 shares issued and outstanding at September 30, 2026 and December 31, 2025, respectively
9,504
9,292
Additional paid-in capital
57,311,841
54,698,641
Accumulated other comprehensive loss
(412,673
)
(676,276
Distributions in excess of net earnings
(1,063,586
(902,427
Total Prologis, Inc. stockholders’ equity
55,909,034
53,193,178
Noncontrolling interests
4,432,597
4,560,830
Total equity
60,341,631
57,754,008
Total liabilities and equity
The accompanying notes are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended
Nine Months Ended
September 30,
2026
2025
Revenues:
Rental
2,205,269
2,054,200
6,507,427
6,066,797
Strategic capital
164,326
150,351
566,757
438,652
Development management and other
17,923
9,330
36,509
31,966
Total revenues
2,387,518
2,213,881
7,110,693
6,537,415
Expenses:
511,715
484,635
1,562,859
1,460,915
84,202
69,270
261,681
194,964
General and administrative
127,597
110,662
384,113
332,234
Depreciation and amortization
710,300
647,999
2,131,324
1,957,278
Other
16,957
8,724
47,246
30,079
Total expenses
1,450,771
1,321,290
4,387,223
3,975,470
Operating income before gains on real estate transactions, net
936,747
892,591
2,723,470
2,561,945
Gains on dispositions of development properties and land, net
51,538
15,435
423,717
53,363
Gains on other dispositions of investments in real estate, net
56,435
32,235
359,924
116,078
Operating income
1,044,720
940,261
3,507,111
2,731,386
Other income (expense):
Earnings from unconsolidated entities, net
155,417
92,827
396,183
268,418
Interest expense
(286,955
(258,274
(817,552
(741,891
Foreign currency, derivative and other gains (losses) and other income (expense), net
64,535
100,981
218,809
(53,506
Gains (losses) on early extinguishment of debt, net
144
-
(1,777
Total other income (expense)
(66,859
(64,466
(204,337
(526,979
Earnings before income taxes
977,861
875,795
3,302,774
2,204,407
Income tax expense
(97,959
(54,535
(254,103
(121,323
Consolidated net earnings
879,902
821,260
3,048,671
2,083,084
Less net earnings attributable to noncontrolling interests
62,799
56,994
187,401
154,636
Net earnings attributable to controlling interests
817,103
764,266
2,861,270
1,928,448
Less preferred stock dividends
1,369
4,216
4,326
Net earnings attributable to common stockholders
815,734
762,897
2,857,054
1,924,122
Weighted average common shares outstanding – Basic
944,132
928,851
936,252
928,186
Weighted average common shares outstanding – Diluted
968,511
956,603
961,350
955,824
Net earnings per share attributable to common stockholders – Basic
0.86
0.82
3.05
2.07
Net earnings per share attributable to common stockholders – Diluted
3.04
2.06
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Other comprehensive income:
Foreign currency translation gains (losses), net
(35,542
26,432
243,615
(633,211
Unrealized gains (losses) on derivative contracts, net
20,727
3,666
25,615
5,135
Comprehensive income
865,087
851,358
3,317,901
1,455,008
Net earnings attributable to noncontrolling interests
(62,799
(56,994
(187,401
(154,636
Other comprehensive loss (income) attributable to noncontrolling interests
(141
(691
(5,627
12,191
Comprehensive income attributable to common stockholders
802,147
793,673
3,124,873
1,312,563
CONSOLIDATED STATEMENTS OF EQUITY
Three Months Ended September 30, 2026 and 2025
Common Stock
Accumulated
Distributions
Additional
in Excess of
Non-
Preferred
of
Par
Paid-in
Comprehensive
Net
controlling
Total
Stock
Shares
Value
Capital
Income (Loss)
Earnings
Interests
Equity
Balance at July 1, 2026
933,006
54,910,659
(397,717
(860,498
4,393,793
58,119,515
Effect of equity compensation plans
72
13,941
39,506
53,448
Issuance of stock in equity offering, net of issuance costs
17,250
172
2,392,584
2,392,756
Capital contributions
22,130
Purchase of noncontrolling interests
3,679
(15,342
(11,663
Redemption of noncontrolling interests
68
4,024
(13,137
(9,112
(35,289
(253
20,333
394
Reallocation of equity
(13,026
13,026
Dividends ($1.07 per common share) and other distributions
(20
(1,020,191
(70,319
(1,090,530
Balance at September 30, 2026
950,396
Balance at July 1, 2025
928,037
9,280
54,604,092
(765,507
(1,183,239
4,578,240
57,306,814
67
15,572
31,105
46,678
32,743
(421
560
31,696
(33,308
(1,606
25,825
607
3,582
84
7,704
(7,704
Dividends ($1.01 per common share) and other distributions
(941,264
(82,193
(1,023,457
Balance at September 30, 2025
928,664
9,287
54,658,643
(736,100
(1,360,237
4,576,568
57,212,109
Nine Months Ended September 30, 2026 and 2025
Balance at January 1, 2026
929,153
444
39,806
131,995
171,806
42,629
7,432
(27,147
(19,715
3,549
35
203,673
(278,375
(74,667
238,479
5,136
25,124
491
(30,353
30,353
Dividends ($3.21 per common share) and other distributions
58
(3,022,429
(220,716
(3,243,087
Balance at January 1, 2025
926,283
9,263
54,464,055
(120,215
(465,913
4,665,632
58,616,770
405
66,151
87,508
153,663
59,216
(1,677
(11,984
(13,661
1,976
113,883
(120,216
(6,313
(620,902
(12,309
5,017
118
15,282
(15,282
Dividends ($3.03 per common share) and other distributions
949
(2,822,772
(230,751
(3,052,574
CONSOLIDATED STATEMENTS OF CASH FLOWS
Operating activities:
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Straight-lined rents and amortization of above and below market leases
(501,708
(530,691
Equity-based compensation awards
165,744
141,654
(396,183
(268,418
Operating distributions from unconsolidated entities
529,846
454,682
Decrease (increase) in operating receivables from unconsolidated entities
(54,659
8,166
Amortization of debt discounts and debt issuance costs, net
63,237
64,450
(423,717
(53,363
(359,924
(116,078
Unrealized foreign currency and derivative losses (gains), net
(6,388
155,348
Losses (gains) on early extinguishment of debt, net
1,777
Deferred income tax expense (benefit)
57,839
(2,948
Decrease (increase) in other assets
(130,156
(127,522
Increase (decrease) in accounts payable and accrued expenses and other liabilities
267,206
84,556
Net cash provided by (used in) operating activities
4,392,909
3,850,198
Investing activities:
Real estate development
(2,385,518
(1,958,714
Real estate acquisitions
(1,626,921
(1,246,417
Tenant improvements and lease commissions on previously leased space
(435,258
(413,577
Property improvements
(195,773
(212,536
Proceeds from dispositions and contributions of real estate
1,531,872
340,944
(383,123
(50,657
Return of investment from unconsolidated entities
305,659
76,156
Proceeds from the settlement of net investment hedges
5,091
4,852
Payments on the settlement of net investment hedges
(7,719
(18,908
Purchase of short-term investments
(1,000,000
(176,715
Proceeds from maturity of short-term investments
176,485
Net cash provided by (used in) investing activities
(4,015,205
(3,655,572
Financing activities:
Proceeds from issuance of common stock
2,411,446
Dividends paid on common and preferred stock
Noncontrolling interests contributions
Noncontrolling interests distributions
(222,336
Settlement of noncontrolling interests
(78,369
(19,974
Tax paid with shares withheld
(25,152
(18,757
Debt and equity issuance costs paid
(57,490
(30,706
Net proceeds from (payments on) credit facilities and commercial paper
749,338
(27,937
Repurchase of and payments on debt
(1,368,921
(209,068
Proceeds from the issuance of debt
2,328,951
2,955,412
Net cash provided by (used in) financing activities
757,667
(345,337
Effect of foreign currency exchange rate changes on cash
(7,521
18,142
Net increase (decrease) in cash and cash equivalents
1,127,850
(132,569
Cash and cash equivalents, beginning of period
1,318,591
Cash and cash equivalents, end of period
1,186,022
See Note 12 for information on noncash investing and financing activities and other information.
PROLOGIS, L.P.
LIABILITIES AND CAPITAL
Capital:
Partners’ capital:
General partner – preferred
General partner – common
55,845,086
53,129,230
Limited partners – common
1,120,473
1,244,117
Total partners’ capital
57,029,507
54,437,295
3,312,124
3,316,713
Total capital
Total liabilities and capital
(In thousands, except per unit amounts)
46,191
38,329
125,231
107,044
833,711
782,931
2,923,440
1,976,040
Less preferred unit distributions
Net earnings attributable to common unitholders
832,342
781,562
2,919,224
1,971,714
Weighted average common units outstanding – Basic
963,651
951,116
956,622
946,726
Weighted average common units outstanding – Diluted
Net earnings per unit attributable to common unitholders – Basic
Net earnings per unit attributable to common unitholders – Diluted
(46,191
(38,329
(125,231
(107,044
(472
198
(326
(2,437
Comprehensive income attributable to common unitholders
818,424
813,227
3,192,344
1,345,527
CONSOLIDATED STATEMENTS OF CAPITAL
General Partner
Limited Partners
Common
Units
Amount
1,279
53,661,774
18,944
1,089,526
3,304,267
16,608
13,942
256
Issuance of units in exchange for contribution of equity offering proceeds
Redemption of limited partnership units
4,025
(132
(725
472
Reallocation of capital
Distributions ($1.07 per common unit) and other
(1,020,211
(24,725
(45,594
19,068
Class A Common
52,664,626
16,524
937,698
5,941
328,656
3,311,886
17,601
1,064
15,573
314
31,702
5,198
293,556
(5,923
(326,864
(3,219
(198
93
(9
(1,813
(5,891
Distributions ($1.01 per common unit) and other
(27,526
(11
(54,656
52,571,593
22,036
1,247,495
18
969
3,328,104
21,758
62,170
39,811
1,399
203,708
(4,089
4,810
326
Distributions ($3.21 per common unit) and other
(3,022,371
(75,088
(145,628
53,887,190
15,699
913,227
7,650
429,358
3,323,047
38,434
9,158
66,155
896
757
(757
113,146
5,441
302,893
(7,632
(422,352
(14,734
(12
2,437
(8,898
(6,384
Distributions ($3.03 per common unit) and other
(2,821,823
(71,053
(8,799
(150,899
Proceeds from issuance of common partnership units in exchange for contributions from Prologis, Inc.
Distributions paid on common and preferred units
(3,097,517
(2,902,624
(147,248
(3,702
Redemption of common limited partnership units
Tax paid with shares of the Parent withheld
PROLOGIS, INC. AND PROLOGIS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. GENERAL
Business. Prologis, Inc. (or the “Parent”) commenced operations as a fully integrated real estate company in 1997, elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code” or “IRC”), and believes the current organization and method of operation will enable it to maintain its status as a REIT. The Parent is the general partner of Prologis, L.P. (or the “Operating Partnership” or “OP”). Through the OP, we are engaged in the ownership, acquisition, development and management of logistics facilities with a focus on key markets in 20 countries on four continents. We invest in real estate through wholly owned subsidiaries and other entities through which we co-invest with partners and investors ("co-investment ventures"). We maintain a significant level of ownership in these co-investment ventures, which may be consolidated or unconsolidated based on our level of control of the entity. Our current business strategy consists of two reportable segments: Real Estate (Rental Operations and Development) and Strategic Capital. Our Real Estate Segment represents the ownership, leasing and development of logistics properties. Our Strategic Capital Segment represents the management of properties owned by our unconsolidated co-investment ventures and other ventures. See Note 11 for further discussion of our reportable segments. Unless otherwise indicated, the Notes to the Consolidated Financial Statements apply to both the Parent and the OP. The terms “the Company,” “Prologis,” “we,” “our” or “us” means the Parent and OP collectively.
For each share of preferred or common stock the Parent issues, the OP issues a corresponding preferred or common partnership unit, as applicable, to the Parent in exchange for the contribution of the proceeds from the stock issuance. At September 30, 2026, the Parent owned a 98.03% common general partnership interest in the OP and substantially all of the preferred units in the OP. The remaining 1.97% common limited partnership interests are owned by unaffiliated investors and certain current and former directors and officers of the Parent. Each partner’s percentage interest in the OP is determined based on the number of OP units held compared to total OP units outstanding at each period end and is used as the basis for the allocation of net income or loss to each partner. At the end of each reporting period, a capital adjustment is made in the OP to reflect the appropriate ownership interest for each of the common unitholders. These adjustments are reflected in the line items Reallocation of Equity in the Consolidated Statements of Equity of the Parent and Reallocation of Capital in the Consolidated Statements of Capital of the OP.
As the sole general partner of the OP, the Parent has complete responsibility and discretion in the day-to-day management and control of the OP, and we operate the Parent and the OP as one enterprise. The management of the Parent consists of the same members as the management of the OP. These members are officers of the Parent and employees of the OP or one of its subsidiaries. As general partner with control of the OP, the Parent is the primary beneficiary and therefore consolidates the OP. Because the Parent’s only significant asset is its investment in the OP, the assets and liabilities of the Parent and the OP are the same on their respective financial statements.
Basis of Presentation. The accompanying Consolidated Financial Statements are prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and are presented in our reporting currency, the U.S. dollar. Intercompany transactions with consolidated entities have been eliminated.
The accompanying unaudited interim financial information has been prepared according to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in our annual financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations. Our management believes that the disclosures presented in these financial statements are adequate to make the information presented not misleading. In our opinion, all adjustments and eliminations, consisting only of normal recurring adjustments, necessary to present fairly the financial position and results of operations for both the Parent and the OP for the reported periods have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year. The accompanying unaudited interim financial information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC, and other public information.
Accounting Pronouncements.
New Accounting Standards Issued but not yet Adopted
Disaggregation of Income Statement Expenses. In November 2024, the FASB issued an ASU to enhance disclosures about certain expense types in commonly presented expense captions on the Consolidated Statements of Income. The ASU requires additional disclosures that disaggregate expense captions into specific components with qualitative descriptions. This standard is effective for the fiscal year ended December 31, 2027, and interim periods thereafter, on a prospective or retrospective basis. We do not expect the standard to have a material impact on our Consolidated Financial Statements as we anticipate the primary change will be additional disclosure.
Hedge Accounting Improvements. In November 2025, the FASB issued an ASU to clarify and improve certain aspects of the hedge accounting guidance to more closely align hedge accounting with the economics of an entity's risk management activities. This
standard is effective for the interim period ended March 31, 2027, and interim and annual periods thereafter, on a prospective basis. We do not expect the standard to have a material impact on our Consolidated Financial Statements.
Proposed Combination. On August 4, 2026, we entered into a definitive Co-operation Agreement with SEGRO plc (“SEGRO”) to acquire the entire issued and to be issued share capital of SEGRO (the “Acquisition”). SEGRO shareholders will receive 0.0920 shares of Prologis common stock for each SEGRO share. SEGRO shareholders may elect a partial cash alternative of up to approximately £3.5 billion, representing 25% of the total consideration based on a fixed price of 1,031.7 pence per SEGRO share, subject to a pro-rata scale-back. We will also include the SEGRO debt assumed in the total cost of the Acquisition. In connection with the Acquisition, Prologis is applying for a secondary listing of its common stock on the London Stock Exchange. The transaction was approved by SEGRO shareholders on September 28, 2026, and is subject to certain other closing conditions, including certain regulatory approvals. It is currently expected that, subject to the satisfaction or waiver of all relevant conditions, the Acquisition will be completed in the first half of 2027.
Issuance of Common Stock. On August 5, 2026, we completed an underwritten public offering of 15.0 million shares of our common stock (the “Base Offering”). On August 7, 2026, we closed on the issuance and sale of an additional 2.25 million shares of common stock in connection with the underwriters' exercise of an option to purchase the additional shares pursuant to the underwriting agreement relating to the Base Offering (collectively, the “Offering”). We received approximately $2.4 billion in net proceeds from the Offering. We invested $1.0 billion of these proceeds into short-term investments maturing between December 2026 and February 2027, which are included in Other Assets on the Consolidated Balance Sheets.
NOTE 2. REAL ESTATE
Investments in real estate properties consisted of the following (dollars and square feet in thousands):
Square Feet
Number of Buildings
Sep 30,
Dec 31,
Operating properties:
Buildings and improvements
682,214
647,904
3,066
2,979
58,467,158
56,365,572
Improved land
24,860,792
24,195,448
Development portfolio, including land costs:
Prestabilized
3,261
6,749
859,581
1,026,688
Properties under development
20,362
17,297
59
50
2,308,982
1,992,321
Land (1)
4,794,539
4,888,153
Other real estate investments (2)
7,468,798
6,661,174
Total investments in real estate properties
Acquisitions
The following table summarizes our real estate acquisition activity (dollars and square feet in thousands):
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2026 (1)
Number of operating properties
100
Square feet
4,941
600
34,075
3,883
Acres of land
282
38
724
486
Acquisition cost of net investments in real estate, excluding other real estate investments
800,841
77,360
2,522,383
1,012,134
Acquisition cost of other real estate investments
59,579
15,391
236,956
295,764
Dispositions
The following table summarizes our dispositions of net investments in real estate which include contributions to unconsolidated co-investment ventures and dispositions to third parties (dollars and square feet in thousands):
Dispositions of development properties and land, net (1)(2)
Number of properties
1,641
57
8,703
459
302
46
Net proceeds
111,538
49,661
1,324,175
150,938
Other dispositions of investments in real estate, net
34
402
284
5,259
1,308
69,601
42,328
875,530
211,487
Leases
We have lease right-of-use assets of $835.3 million and $671.7 million within Other Assets and lease liabilities of $658.3 million and $643.5 million within Other Liabilities, principally for land and office space leases in which we are the lessee, in the Consolidated Balance Sheets at September 30, 2026 and December 31, 2025, respectively.
NOTE 3. UNCONSOLIDATED ENTITIES
Summary of Investments
We have investments in entities through a variety of ventures. We co-invest in entities that own multiple properties with partners and investors and we provide asset management and property management services to these entities, which we refer to as co-investment ventures. These entities may be consolidated or unconsolidated depending on the structure, our partner’s participation and other rights and our level of control of the entity. This note details our investments in unconsolidated co-investment ventures, which are related
parties and accounted for using the equity method of accounting. See Note 6 for more detail regarding our consolidated investments that are not wholly owned.
We also have investments in other ventures, generally with one partner, which we primarily account for using the equity method. We refer to our investments in both unconsolidated co-investment ventures and other ventures, collectively, as unconsolidated entities.
The following table summarizes our investments in and advances to unconsolidated entities (in thousands):
December 31,
Unconsolidated co-investment ventures
10,716,099
10,263,233
Other ventures
789,449
830,703
Unconsolidated Co-Investment Ventures
The following table summarizes the Strategic Capital Revenues we recognized in the Consolidated Statements of Income related to our unconsolidated co-investment ventures (in thousands):
Recurring fees
137,585
130,425
411,946
383,914
Transactional fees
24,150
16,577
66,053
47,096
Promote revenue
723
1,245
83,870
Total strategic capital revenues from unconsolidated co-investment ventures (1)
162,458
148,247
561,869
432,255
The following table summarizes the key property information, financial position and operating information of our unconsolidated co-investment ventures on a U.S. GAAP basis (not our proportionate share) and the amounts we recognized in the Consolidated Financial Statements related to these ventures (dollars and square feet in millions):
U.S. (1)
Other Americas
Europe (1)
Asia (1)(2)
At:
Sep 30,2026
Dec 31,2025
Key property information:
Ventures
Operating properties
782
784
390
393
1,105
1,058
245
2,449
2,480
140
139
85
86
248
238
78
101
551
564
Financial position:
Total assets ($)
15,639
14,711
7,341
7,308
26,961
26,764
8,541
9,470
58,482
58,253
Third-party debt ($)
7,469
6,386
2,513
2,429
7,140
7,101
3,374
3,758
20,496
19,674
Total liabilities ($)
8,495
7,383
2,882
2,753
10,035
9,310
3,724
4,192
25,136
23,638
Our investment balance ($) (3)
3,628
3,283
1,260
1,181
5,111
5,010
717
789
10,716
10,263
Our weighted average ownership (4)
33.9
%
31.9
32.2
32.3
33.3
33.1
15.8
15.6
30.8
29.9
Operating Information:
Sep 30,2025
For the three months ended:
Total revenues ($)
458
411
219
206
569
527
145
164
1,391
Net earnings ($)
150
102
70
41
107
89
43
370
278
Our earnings from unconsolidated co-investment ventures, net ($)
52
17
31
88
For the nine months ended:
1,356
1,224
667
620
1,647
1,504
442
490
4,112
3,838
363
304
211
258
105
1,073
834
123
96
62
130
90
333
257
14
Equity Commitments Related to Certain Unconsolidated Co-Investment Ventures
At September 30, 2026, our outstanding equity commitments were $884.0 million, primarily for our U.S. co-investment ventures. The equity commitments expire from 2026 to 2034 if they have not been previously called.
NOTE 4. ASSETS HELD FOR SALE OR CONTRIBUTION
We had investments in certain real estate properties that met the criteria to be classified as held for sale or contribution at September 30, 2026 and December 31, 2025. At the time of classification, these properties were expected to be sold to third parties, or were recently stabilized and expected to be contributed to unconsolidated co-investment ventures, in each case within twelve months. The amounts included in Assets Held for Sale or Contribution in the Consolidated Balance Sheets represented real estate investment balances and the related assets; liabilities related to properties held for sale or contribution are included in Other Liabilities.
Assets held for sale or contribution consisted of the following (dollars and square feet in thousands):
September 30,2026
December 31,2025
3,783
1,914
Total assets held for sale or contribution
Total liabilities associated with assets held for sale or contribution – included in Other Liabilities
7,353
689
NOTE 5. DEBT
The following table summarizes the debt incurred by the OP or its consolidated subsidiaries (dollars in thousands):
Weighted Average
Interest Rate (1)
Term (Years) (2)
Outstanding (3)
Credit facilities and commercial paper
2.6%
0.0
785,686
0.9%
1.6
44,679
Senior notes
3.3%
8.2
34,002,443
3.2%
8.8
32,887,971
Term loans and unsecured other
2.1%
5.8
1,821,219
1.9%
3.9
1,908,723
Secured mortgage
4.1%
5.9
223,134
4.5%
3.7
195,700
7.9
8.5
Weighted Average Interest Rate
Amount Outstanding
% of Total
British pound sterling
3.0%
1,820,000
4.9
1,843,931
5.3
Canadian dollar
4.4%
2,443,735
6.6
2,004,638
5.7
Euro
2.2%
12,017,125
32.6
12,302,104
35.1
Japanese yen
1.5%
3,195,028
8.7
1.2%
2,930,594
8.4
U.S. dollar
16,674,088
45.3
15,385,826
43.9
3.9%
682,506
1.9
3.8%
569,980
100.0
Credit Facilities and Commercial Paper
The following table summarizes information about our available liquidity at September 30, 2026 (in millions):
Aggregate lender commitments
Credit facilities
6,371
Less:
Credit facility borrowings outstanding
Commercial paper borrowings outstanding (1)
786
Outstanding letters of credit
Current availability
5,563
2,273
Short-term investments (2)
1,000
Total liquidity
8,836
Credit Facilities
We have two global senior credit facilities ("the 2025 Global Facility" and "the 2026 Global Facility") and a Japanese yen revolver ("the Yen Credit Facility"), which we refer to collectively as our “Credit Facilities.” Pricing for the Credit Facilities, including the spread over the applicable benchmark and the rates applicable to facility fees and letter of credit fees, varies based on the public debt ratings of the OP. Our Credit Facilities are utilized to support our cash needs for general corporate purposes on a short-term basis. The maturities of the borrowings under the Credit Facilities generally range from overnight to three months.
The following table summarizes our Credit Facilities at September 30, 2026 (principal in thousands):
Aggregate Capacity
Facility
Borrowing Currency
USD (1)(2)
Maturity
Maximum Capacity (3)
Extended Maturity (3)
2025 Global Facility (4)
3,000,000
3,017,109
June 2029
4,000,000
June 2030
2026 Global Facility (4)(5)
2,981,333
June 2031
Yen Credit Facility
¥
58,500,000
372,619
August 2027
75,000,000
August 2028
6,371,061
Commercial Paper
We have commercial paper programs under which we may issue, repay and re-issue short-term unsecured commercial paper notes. The borrowings under these programs are for general corporate purposes. The maturities generally range from overnight to three months. Under customary terms in the commercial paper market, the notes are issued either at a discount to par or at par with fixed or floating interest rates. 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 notes outstanding under these programs. The following table summarizes our commercial paper programs at September 30, 2026 (principal in thousands):
Program
Canadian dollar (3)
C$
1,000,000
705,061
Multicurrency (4)
€
1,135,500
2,840,561
Senior Notes
The following table summarizes the issuances of senior notes during the nine months ended September 30, 2026 (principal in thousands):
Aggregate Principal
Issuance Date Weighted Average
Issuance Date
USD (1)
Interest Rate
Years
Maturity Date
April
1,250,000
4.6%
June 2031 – 2036
850,000
624,986
4.3%
8.1
May 2034
June
45,000,000
280,311
2.9%
7.1
December 2030 – 2041
2,155,297
8.0
Term Loans
In August 2026, we entered into an unsecured term loan agreement (the “2026 Term Loan”), with borrowing availability subject to the closing of the SEGRO acquisition and satisfaction of certain other conditions and aggregate commitments of £3.6 billion ($4.7 billion at September 30, 2026). Borrowings under the facility may be made in British pound sterling or euros and amounts prepaid or repaid may not be re-borrowed. Sterling-denominated borrowings bear interest at Daily Floating SONIA plus a margin based on the ratings grid, while euro-denominated borrowings bear interest at EURIBOR plus a margin based on the ratings grid. Based on our current credit ratings, the applicable margin is 0.7%. The 2026 Term Loan matures one year after the closing date of the SEGRO acquisition and may be extended for two additional one-year periods, subject to payment of extension fees and certain conditions.
Long-Term Debt Maturities
Scheduled principal payments due on our debt for the remainder of 2026 and for each year through the period ended December 31, 2030, and thereafter were as follows at September 30, 2026 (in thousands):
Unsecured
Credit Facilities and
Senior
Secured
Notes
and Other
Mortgage
399,879
4,951
1,190,519
2027 (1)
1,970,029
45,887
29,776
2,045,692
2028
2,571,753
139,793
16,458
2,728,004
2029
3,365,073
14,638
11,830
3,391,541
2030
3,031,771
31,848
5,659
3,069,278
Thereafter
23,180,803
1,595,151
149,503
24,925,457
Subtotal
34,519,308
1,827,320
218,177
37,350,491
Unamortized premiums (discounts), net
(385,117
5,770
(379,347
Unamortized debt issuance costs, net
(131,748
(6,101
(813
(138,662
Financial Debt Covenants
Our Credit Facilities, senior notes and term loans outstanding at September 30, 2026 were subject to certain financial covenants under their related documents. At September 30, 2026, we were in compliance with all of our financial debt covenants.
Guarantee of Finance Subsidiary Debt
We have finance subsidiaries as part of our operations in Europe (Prologis Euro Finance LLC), Japan (Prologis Yen Finance LLC) and the U.K. (Prologis Sterling Finance LLC) in order to mitigate our foreign currency risk by borrowing in the currencies in which we invest. These entities are 100% indirectly owned by the OP and all unsecured debt issued or to be issued by each entity is or will be fully and unconditionally guaranteed by the OP. There are no restrictions or limits on the OP’s ability to obtain funds from its subsidiaries by dividend or loan. In reliance on Rule 13-01 of Regulation S-X, the separate financial statements of Prologis Euro Finance LLC, Prologis Yen Finance LLC and Prologis Sterling Finance LLC are not provided.
NOTE 6. NONCONTROLLING INTERESTS
We report noncontrolling interests related to several entities we consolidate but of which we do not own 100% of the equity. These entities include two real estate partnerships that have issued limited partnership units to third parties. Depending on the specific partnership agreements, these limited partnership units are redeemable for cash or, at our option, shares of the Parent’s common stock, generally at a rate of one share of common stock to one limited partnership unit. We also consolidate certain entities in which we do not own 100% of the equity but the equity of these entities is not exchangeable into our common stock.
The noncontrolling interests of the Parent include the noncontrolling interests described above for the OP, as well as the limited partnership units in the OP that are not owned by the Parent. The outstanding limited partnership units receive quarterly cash distributions equal to the quarterly dividends paid on our common stock pursuant to the terms of the applicable partnership agreements.
The following table summarizes these entities (dollars in thousands):
Our Ownership Percentage
Noncontrolling Interests
Total Assets
Total Liabilities
Prologis U.S. Logistics Venture
55.0
3,071,350
3,071,053
6,968,770
6,885,453
174,423
156,368
Other consolidated entities (1)
various
240,774
245,660
3,753,838
3,521,831
666,369
541,602
10,722,608
10,407,284
840,792
697,970
Limited partners in Prologis, L.P. (2)
NOTE 7. LONG-TERM COMPENSATION
Equity-Based Compensation Programs
Our equity-based compensation programs, including a description of performance hurdles, vesting periods and other information related to our programs, are described in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes to these programs from what was previously disclosed.
Performance Stock Unit ("PSU") Program
Beginning in January 2024, PSUs have been granted under the Company's 2020 Long-Term Incentive Plan and are settled in equity at the end of a three-year performance period if applicable market-based performance hurdles are met.
The fair value of the awards is measured at the grant date and amortized over the period from the grant date to the date at which the awards vest, regardless of whether the market condition has been satisfied, which ranges from three to five years. We granted PSUs for the 2026 – 2028 performance period in January 2026, with a fair value of $76.2 million. The fair value was calculated using a Monte Carlo valuation model that assumed a risk-free interest rate of 3.7% and an expected volatility of 26.0% for Prologis and 27.5% for the peer group companies.
Prologis Outperformance Plan (“POP”)
In prior years, we granted awards under our POP. After 2024, no new awards were granted under the POP. The RSUs and LTIP Units table below includes POP awards that were earned but are unvested, while any vested awards are reflected within the Consolidated Statements of Equity and Capital.
Other Equity-Based Compensation Programs
Our other equity-based compensation programs include: (i) the Prologis Promote Plan; (ii) the annual long-term incentive equity award program; and (iii) the annual bonus exchange program. Awards under these programs may be issued in the form of RSUs or LTIP Units at the participants' elections. RSUs and LTIP Units are valued based on the market price of the Parent’s common stock at the grant date, and the grant date fair value is recognized as compensation expense over the service period.
Summary of Award Activity
PSUs
The following table summarizes the activity for PSUs for the nine months ended September 30, 2026 (units in thousands):
Unearned
Weighted Average Grant Date Fair Value
102.95
Granted
610
124.93
Earned
Forfeited
(14
106.19
1,701
110.80
RSUs and LTIP Units
The following table summarizes the activity for RSUs and LTIP Units for the nine months ended September 30, 2026 (units in thousands):
RSUs
LTIP Units
Unvested
1,756
92.80
4,706
65.11
510
131.67
732
132.21
Conversion of earned PSUs
Vested
(605
112.67
(1,398
80.25
(45
116.63
(39
80.13
1,616
96.95
4,001
71.95
NOTE 8. EARNINGS PER COMMON SHARE OR UNIT
We determine basic earnings per share or unit based on the weighted average number of shares of common stock or units outstanding during the period. We compute diluted earnings per share or unit based on the weighted average number of shares or units outstanding combined with the incremental weighted average effect from all outstanding potentially dilutive instruments. During the year ended December 31, 2025, all Class A Units in the OP were converted to limited partnership units in the OP.
The computation of our basic and diluted earnings per share and unit was as follows (in thousands, except per share and unit amounts):
Net earnings attributable to common stockholders – Basic
Net earnings attributable to exchangeable limited partnership units (1)
16,781
18,781
62,639
47,592
Adjusted net earnings attributable to common stockholders – Diluted
832,515
781,678
2,919,693
Weighted average common shares outstanding – Basic (2)
Incremental weighted average effect on exchange of limited partnership units (1)
19,778
22,809
20,629
22,958
Incremental weighted average effect of equity awards
4,601
4,943
4,469
4,680
Weighted average common shares outstanding – Diluted (3)
Net earnings per share attributable to common stockholders:
Basic
Diluted
Net earnings attributable to Class A Units
(1,064
(9,158
Net earnings attributable to common unitholders – Basic
780,498
1,962,556
Net earnings attributable to exchangeable other limited partnership units
173
116
469
Adjusted net earnings attributable to common unitholders – Diluted
Weighted average common partnership units outstanding – Basic (2)
Incremental weighted average effect on exchange of Class A Units
386
4,418
Incremental weighted average effect on exchange of other limited partnership units
259
158
Incremental weighted average effect of equity awards of Prologis, Inc.
Weighted average common units outstanding – Diluted (3)
Net earnings per unit attributable to common unitholders:
Class A Units
Other limited partnership units
265
Equity awards
6,991
7,210
7,206
7,423
7,250
7,855
7,465
12,106
Common limited partnership units
19,519
22,265
20,370
18,540
26,769
30,120
27,835
30,646
NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Derivative Financial Instruments
In the normal course of business, our operations are exposed to market risks, including the effect of changes in foreign currency exchange rates and interest rates. We may enter into derivative financial instruments to offset these underlying market risks. There have been no significant changes in our policy and strategy from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
The following table presents the fair value of our derivative financial instruments recognized within Other Assets and Other Liabilities in the Consolidated Balance Sheets (in thousands):
Asset
Liability
Undesignated derivatives
Foreign currency contracts
Forwards
Brazilian real
1,037
1,923
7,623
11,688
8,344
5,680
214
5,846
2,418
1,660
17,571
44,248
54,147
Swedish krona
503
1,435
5,352
Options
Mexican peso
1,623
14,733
Designated derivatives
Net investment hedges
9,247
841
4,279
1,866
968
Interest rate contracts
Cash flow hedges
14,600
2,086
1,480
Total fair value of derivatives
88,420
12,518
80,769
40,488
Undesignated Derivative Financial Instruments
Foreign Currency Contracts
The following table summarizes the activity of our undesignated foreign currency contracts for the nine months ended September 30 (in millions, except for weighted average forward rates and number of active contracts):
CAD
EUR
GBP
JPY
Notional amounts at January 1 ($)
296
587
385
335
(202
1,401
254
526
312
(27
1,451
New contracts ($)
327
111
186
483
Matured, expired or settled contracts ($)
(85
(81
(62
(244
(49
(98
(66
(59
(19
(291
Notional amounts at September 30 ($)
220
476
558
285
(55
1,484
316
614
420
321
(28
1,643
Weighted average forward rate at September 30
1.33
1.18
1.31
126.65
1.16
1.29
123.15
Active contracts at September 30
109
92
120
127
108
The following table summarizes the undesignated derivative financial instruments exercised and associated realized and unrealized gains (losses), respectively, in Foreign Currency, Derivative and Other Gains (Losses) and Other Income (Expense), Net in the Consolidated Statements of Income (in millions, except for number of exercised contracts):
Exercised contracts
106
83
Realized gains (losses) on the matured, expired or settled contracts
25
Unrealized gains (losses) on the change in fair value of outstanding contracts
(10
(97
23
Designated Derivative Financial Instruments
Changes in the fair value of derivatives that are designated as net investment hedges ("NIHs") of our foreign operations and cash flow hedges ("CFHs") are recorded in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Balance Sheets and reflected within the AOCI/L table below.
The following table summarizes the activity of our foreign currency contracts designated as NIHs for the nine months ended September 30 (in millions, except for weighted average forward rates and number of active contracts):
200
683
883
163
432
595
776
876
549
749
(300
(773
(1,073
(163
(305
(468
686
676
1.35
1.36
Interest Rate Contracts
The following table summarizes the activity of our interest rate contracts designated as CFHs for the nine months ended September 30 (in millions):
USD
425
280
418
725
1,682
543
1,250
1,932
(254
(90
(1,150
(1,494
(139
(543
(1,155
(1,837
328
613
375
Designated Nonderivative Financial Instruments
The following table summarizes our debt and accrued interest, designated as a hedge of our net investment in international subsidiaries at the quarter ended (in millions):
1,871
1,837
2,410
1,793
Chinese renminbi
239
The following table summarizes the unrealized gains (losses) in Foreign Currency, Derivative and Other Gains (Losses) and Other Income (Expense), Net in the Consolidated Statements of Income on the remeasurement of the unhedged portion of our foreign denominated debt and accrued interest (in millions):
Unrealized gains (losses) on the unhedged portion
(4
(69
Accumulated Other Comprehensive Income (Loss) ("AOCI/L")
The change in AOCI/L in the Consolidated Statements of Equity during the periods presented was due to the following: (i) the currency translation adjustments ("CTA") that we recognize due to the translation of the financial statements of our consolidated subsidiaries, whose functional currency is not the U.S. dollar, into U.S. dollars; and (ii) the change in the fair value of the effective portion of our derivative financial instruments that have been designated as NIHs and CFHs and the translation of the hedged portion of our debt.
24
The following tables present these changes in AOCI/L (in thousands):
Unrealized gains (losses) on CFHs (1)
Our share of derivatives from unconsolidated entities
Derivative NIHs
Debt designated as nonderivative NIHs (2)
CTA
Total AOCI/L
(7,290
21,281
319,712
235,523
(966,943
Other comprehensive income (loss), net
17,623
2,710
(233
(18,267
(16,789
(14,956
10,333
23,991
319,479
217,256
(983,732
Unrealized gains (losses) on CFHs
(10,379
12,806
295,707
99,385
(1,163,026
848
2,735
17,627
53,361
(45,164
29,407
(9,531
15,541
313,334
152,746
(1,208,190
(9,332
18,532
310,320
106,834
(1,102,630
19,665
5,459
9,159
110,422
118,898
263,603
(11,659
12,652
341,852
327,897
(790,957
2,128
2,889
(28,518
(175,151
(417,233
(615,885
Fair Value Measurements
There have been no significant changes in our policy from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Fair Value Measurements on a Recurring Basis
At September 30, 2026 and December 31, 2025, other than the derivatives discussed previously, we had no significant financial assets or financial liabilities that were measured at fair value on a recurring basis in the Consolidated Financial Statements. All of our derivatives held at September 30, 2026 and December 31, 2025, were classified as Level 2 of the fair value hierarchy.
Fair Value Measurements on Nonrecurring Basis
Acquired properties, certain assets we expect to sell or contribute and assets subject to impairment charges are significant nonfinancial assets that met the criteria to be measured at fair value on a nonrecurring basis. At September 30, 2026 and December 31, 2025, we estimated the fair value of our properties using Level 2 or Level 3 inputs from the fair value hierarchy. See more information on our acquired properties in Note 2 and assets held for sale or contribution in Note 4.
Fair Value of Financial Instruments
At September 30, 2026 and December 31, 2025, the carrying amounts of certain financial instruments, including cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses were representative of their fair values.
The differences in the fair value of our debt from the carrying value in the table below were the result of differences in interest rates or borrowing spreads that were available to us at September 30, 2026 and December 31, 2025, as compared with those in effect when the debt was issued or assumed, including lower borrowing spreads due to our credit ratings. See Note 5 for more information on our debt activity.
The following table reflects the carrying amounts and estimated fair values of our debt (in thousands):
Carrying Value
Fair Value
30,540,954
30,950,062
1,750,061
1,862,065
204,327
185,965
33,281,028
33,042,771
NOTE 10. COMMITMENTS AND CONTINGENCIES
Our policies and practices related to environmental matters and litigation, as well as the nature of our off-balance-sheet arrangements, are described in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes to our policies and practices from what was previously disclosed.
Off-Balance Sheet Liabilities
At September 30, 2026, we had $749.1 million of outstanding performance and surety bonds and standby letters of credit, principally related to certain development and renewable energy projects.
In the normal course of business, we enter into build-to-suit arrangements with customers that obligate us to complete construction. At September 30, 2026, we had approximately $1.9 billion of remaining estimated investment to complete consolidated development projects under such arrangements, which is expected to be funded as construction progresses. The amount ultimately invested may vary from these estimates based on changes in project scope, timing and construction costs.
At September 30, 2026, we did not guarantee any third-party debt of our unconsolidated co-investment ventures. See Note 3 for further discussion related to equity commitments to our unconsolidated co-investment ventures.
NOTE 11. REPORTABLE SEGMENTS
Our current business strategy includes two reportable segments: Real Estate (Rental Operations and Development) and Strategic Capital. We generate revenues, earnings, net operating income and cash flows through our segments, as follows:
Our management Executive Committee (“EC”) is our Chief Operating Decision Maker (“CODM”) and regularly reviews operating results and makes strategic and operating decisions with regards to assessing performance and allocating resources based on our two reportable segments. At September 30, 2026, the EC consisted of the Chief Executive Officer; Chief Operating Officer; Chief Financial Officer; Chief Development Officer; Chief Legal Officer and General Counsel; Chief Administrative Officer/Chief Human Resources Officer; Chief Energy and Sustainability Officer and Managing Director, Strategic Capital. The operating results reviewed by the EC include net operating income (“NOI”), the measure most consistent with U.S. GAAP.
NOI from the Real Estate Segment is calculated directly from the Consolidated Statements of Income 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 Statements of Income as Strategic Capital Revenues less Strategic Capital Expenses.
Our EC analyzes the NOI of each reportable segment on a quarterly basis comparing actuals to prior period actuals, along with forecasted future amounts and utilizes operating metrics to understand and evaluate the performance of our operations and to allocate resources.
Below we present: (i) each reportable segment’s revenues from external customers to Total Revenues; (ii) each reportable segment’s expenses to Total Expenses excluding non-segment items; (iii) each reportable segment’s net operating income from external customers, calculated as each reportable segment's revenues less segment expenses, to Operating Income and Earnings Before Income Taxes; and (iv) each reportable segment’s assets to Total Assets.
The applicable components of Total Revenues, Total Expenses, Operating Income, Earnings Before Income Taxes and Total Assets in the Consolidated Financial Statements are allocated to each reportable segment’s revenues, expenses, net operating income and assets.
Items that are not directly assignable to a reportable segment, are not allocated but reflected as non-segment items (general and administrative expenses and real estate adjustments for depreciation and gains and losses on contributions and sales) due to how our CODM utilizes segment information for planning and execution of our business strategy.
The following reportable segment net operating income and assets are presented in thousands:
Real estate segment:
U.S.
2,086,324
1,959,698
6,161,998
5,814,191
56,876
48,973
168,822
141,209
Europe
39,768
36,833
115,772
95,226
Asia
40,224
18,026
97,344
48,137
Total real estate segment
2,223,192
2,063,530
6,543,936
6,098,763
Strategic capital segment:
60,149
51,005
170,112
149,083
25,587
22,154
153,387
65,933
60,910
54,167
184,825
159,247
17,680
23,025
58,433
64,389
Total strategic capital segment
(482,791
(459,261
(1,470,332
(1,394,588
(11,509
(10,073
(37,061
(28,255
(16,828
(18,387
(58,818
(51,814
(17,544
(5,638
(43,894
(16,337
(528,672
(493,359
(1,610,105
(1,490,994
(40,303
(34,290
(134,233
(93,331
(7,250
(6,066
(20,363
(15,599
(24,341
(18,149
(70,638
(53,797
(12,308
(10,765
(36,447
(32,237
(84,202
(69,270
(261,681
(194,964
(612,874
(562,629
(1,871,786
(1,685,958
Segment net operating income:
1,603,533
1,500,437
4,691,666
4,419,603
45,367
38,900
131,761
112,954
22,940
18,446
56,954
43,412
22,680
12,388
53,450
31,800
1,694,520
1,570,171
4,933,831
4,607,769
19,846
16,715
35,879
55,752
18,337
16,088
133,024
50,334
36,569
36,018
114,187
105,450
5,372
12,260
21,986
32,152
80,124
81,081
305,076
243,688
Total segment net operating income
1,774,644
1,651,252
5,238,907
4,851,457
Non-segment items:
General and administrative expenses
(127,597
(110,662
(384,113
(332,234
Depreciation and amortization expenses
(710,300
(647,999
(2,131,324
(1,957,278
28
Segment assets:
79,483,679
77,986,597
3,231,828
3,215,779
3,071,604
3,218,384
1,973,316
1,100,273
87,760,427
85,521,033
Strategic capital segment: (2)
5,939
6,893
25,280
292
307
31,511
32,480
Total segment assets
87,791,938
85,553,513
1,777,935
727,816
Total non-segment items
16,102,768
13,170,743
NOTE 12. SUPPLEMENTAL CASH FLOW INFORMATION
Our significant noncash investing and financing activities for the nine months ended September 30, 2026 and 2025 included the following:
We paid $823.6 million and $711.3 million for interest, net of amounts capitalized, during the nine months ended September 30, 2026 and 2025, respectively.
We paid $164.6 million and $105.7 million for income taxes, net of refunds, during the nine months ended September 30, 2026 and 2025, respectively.
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Results of Review of Interim Financial Information
We have reviewed the consolidated balance sheet of Prologis, Inc. and subsidiaries (the Company) as of September 30, 2026, the related consolidated statements of income, comprehensive income, and equity for the three-month and nine-month periods ended September 30, 2026 and 2025, the related consolidated statements of cash flows for the nine-month periods ended September 30, 2026 and 2025, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2025, and the related consolidated statements of income, comprehensive income, equity, and cash flows for the year then ended (not presented herein); and in our report dated February 13, 2026, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2025 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
/s/ KPMG LLP
Denver, ColoradoOctober 28, 2026
To the Partners of Prologis, L.P. and the Board of Directors of Prologis, Inc.:
We have reviewed the consolidated balance sheet of Prologis, L.P. and subsidiaries (the Operating Partnership) as of September 30, 2026, the related consolidated statements of income, comprehensive income, and capital for the three-month and nine-month periods ended September 30, 2026 and 2025, the related consolidated statements of cash flows for the nine-month periods ended September 30, 2026 and 2025, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Operating Partnership as of December 31, 2025, and the related consolidated statements of income, comprehensive income, capital, and cash flows for the year then ended (not presented herein); and in our report dated February 13, 2026, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2025 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
This consolidated interim financial information is the responsibility of the Operating Partnership’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following should be read in conjunction with the Consolidated Financial Statements and related Notes included in Item 1 of this report and our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”).
The statements in this report 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 the combination with SEGRO plc (“SEGRO”), rent and occupancy growth, acquisition and development activity, including data center developments and power procurement related thereto, contribution and disposition activity, general conditions in the geographic areas where we operate, expectations regarding new lines of business, our debt, capital structure and financial position, our ability to earn revenues from co-investment ventures, 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) international, national, regional and local economic and political climates and conditions; (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, including those specific to data center development and the integration of the operations of significant real estate portfolios; (v) maintenance of Real Estate Investment Trust (“REIT”) 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) Prologis’ and SEGRO’s ability to complete the combination on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties relating to satisfying the conditions to the combination and relating to failure to realize the expected benefits or synergies of the combination; and (xi) those additional factors discussed under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025. We undertake no duty to update any forward-looking statements appearing in this report except as may be required by law.
Prologis, Inc. is a self-administered and self-managed REIT and is the sole general partner of Prologis, L.P. through which it holds substantially all of its assets. We operate Prologis, Inc. and Prologis, L.P. as one enterprise and, therefore, our discussion and analysis refers to Prologis, Inc. and its consolidated subsidiaries, including Prologis, L.P. We invest in real estate through wholly owned subsidiaries and other entities through which we co-invest with partners and investors ("co-investment ventures"). We have a significant ownership interest in the co-investment ventures, which are either consolidated or unconsolidated based on our level of control of the entity.
We operate, manage and measure the operating performance of our properties on an owned and managed (“O&M”) basis. Our O&M portfolio includes our consolidated properties as well as properties owned by our unconsolidated co-investment ventures, which we manage. We make operating decisions based on our total O&M portfolio as we manage the properties without regard to their ownership. We also evaluate our results based on our proportionate economic ownership of each property included in the O&M portfolio (“our share”).
Included in our discussion below are references to funds from operations (“FFO”) and net operating income (“NOI”), neither of which are U.S. generally accepted accounting principles (“GAAP”). See below for a reconciliation of Net Earnings Attributable to Common Stockholders/Unitholders in the Consolidated Statements of Income to our FFO measures and a reconciliation of NOI to Operating Income in the Consolidated Statements of Income, the most directly comparable GAAP measures.
MANAGEMENT'S OVERVIEW
Prologis is the global leader in logistics real estate, operating in high-barrier, high-growth markets across 20 countries on four continents. Our portfolio is concentrated in key commercial hubs strategically located near end consumers to enable the efficient flow of goods. We own, manage and develop high-quality logistics facilities and deliver integrated infrastructure solutions that optimize how our customers operate within our buildings. Our services address the evolving needs of modern supply chains, including the growing convergence of physical, digital and energy infrastructure, as logistics facilities increasingly support power and data-intensive operations. Consistent with this strategy, we are leveraging our development capabilities, energy solutions and strategic locations to deliver digital infrastructure requirements through selective development of data centers.
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 continue to support demand for logistics space and relatively low vacancy rates over the long term.
Our teams actively manage our portfolio by delivering comprehensive real estate services, including leasing, property management, development, acquisition and disposition expertise. We invest significant capital into new properties through acquisition and development activity, including build-to-suit development, speculative development and redevelopment of properties into industrial properties and data centers. Proceeds from property dispositions, typically through contributions of newly developed properties to our co-investment ventures, data center sales or sales of non-strategic assets to third parties, allow us to recycle capital back into our ongoing investment activities, providing the ability to realize long-term value creation.
While the majority of our properties in the U.S. are wholly owned, we also hold significant ownership interest in properties both in the U.S. and internationally through our investment in co-investment ventures. Partnering with many of the world’s largest institutional investors through co-investment ventures broadens our access to capital and allows us to expand our investment capacity and enhance and diversify our returns through a combination of co-investment performance and recurring fee-based income from asset management and related services, while mitigating our exposure to foreign currency movements.
Our scale and customer-focused strategy have driven us to expand the services we offer. Our 1.3 billion square foot portfolio serves as the foundation for a comprehensive platform of solutions that address the challenges our customers face in global fulfillment today. Leveraging this scale, we deliver integrated solutions that support our customers’ operational and energy needs. Our customer experience teams and proprietary technology are central to how we operate and enable us to provide differentiated insights and scalable infrastructure solutions that help customers improve performance and build resilience. The principles of environmental, social and governance are embedded in our business strategy through an integrated approach to global impact and sustainability, which we believe creates value for our customers, investors, employees and communities.
Our Global Presence
At September 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:
Throughout this discussion, amounts are presented in U.S. dollars, our reporting currency. Included in these amounts are consolidated and unconsolidated investments denominated in foreign currencies, principally the British pound sterling, Canadian dollar, euro and Japanese yen that are impacted by fluctuations in exchange rates when translated to U.S. dollars. We mitigate our exposure to foreign
33
currency fluctuations by investing outside the U.S. through co-investment ventures, borrowing in the functional currency of our subsidiaries and utilizing derivative financial instruments.
Proposed Combination. On August 4, 2026, we entered into a definitive Co-operation Agreement with SEGRO to acquire the entire issued and to be issued share capital of SEGRO (the “Acquisition”). SEGRO shareholders will receive 0.0920 shares of Prologis common stock for each SEGRO share. SEGRO shareholders may elect a partial cash alternative of up to approximately £3.5 billion, representing 25% of the total consideration based on a fixed price of 1,031.7 pence per SEGRO share, subject to a pro-rata scale-back. We will also include the SEGRO debt assumed in the total cost of the Acquisition. In connection with the Acquisition, Prologis is applying for a secondary listing of its common stock on the London Stock Exchange. The transaction was approved by SEGRO shareholders on September 28, 2026, and is subject to certain other closing conditions, including certain regulatory approvals. It is currently expected that, subject to the satisfaction or waiver of all relevant conditions, the Acquisition will be completed in the first half of 2027.
Our business comprises two reportable segments: Real Estate (Rental Operations and Development) and Strategic Capital.
Below is information summarizing consolidated activity within our segments (in millions):
Real Estate Segment
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 September 30, 2026, the weighted average lease term for leases commenced in our consolidated operating portfolio was 66 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 selectively expanding our development platform 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.
Strategic Capital Segment
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 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 of individual venture assets.
FUTURE GROWTH
We believe that the quality and scale of our portfolio, our ability to add value creation through development, our strategic capital business, the depth of our customer relationships and the strength of our balance sheet are differentiators that allow us to drive growth in revenues, NOI, earnings, FFO and cash flows.
Based on our current estimates, our consolidated land and other real estate investments, including options and CLPs, have the potential to support the development of $34.9 billion ($39.7 billion on an O&M basis) of TEI of newly developed buildings. We measure the estimated value creation of a development project as the stabilized value above our TEI. As properties are completed and leased, we expect to capture the value creation principally through gains realized upon contributing these properties to unconsolidated co-investment ventures, data center sales and through increases in the NOI of the consolidated portfolio.
SUMMARY OF THE NINE MONTHS ENDED SEPTEMBER 30, 2026
Our operating results during the nine months ended September 30, 2026 were strong, supported by healthy customer demand, high retention and robust leasing activity across our consolidated portfolio, with 100 million square feet of new leases signed (191 million square feet on an O&M basis).
We continued to benefit from the favorable mark-to-market of our existing leases, reflecting cumulative market rent growth over the past several years. As a result, rent change on rollover and same-store growth in our O&M portfolio remained strong. We believe we remain well-positioned for long-term revenue growth, supported by the embedded rent growth in our in-place lease portfolio. At September 30, 2026, our lease mark-to-market remained meaningfully positive at approximately 16% (on an NER and our share basis), reflecting the accumulated rent growth embedded in our in-place leases remaining to be realized on rollover.
These factors contributed to occupancy in our operating portfolio of 95.5% at September 30, 2026 and rent change on leases that commenced during the nine months ended September 30, 2026 of 35.5% on a net effective basis, both metrics based on our ownership share.
36
We completed the following significant activities in 2026, as described in the Notes to the Consolidated Financial Statements:
Maturity Dates
850
625
45,000
2,155
(1) The exchange rate used to calculate into U.S. dollars was the spot rate at the settlement date.
RESULTS OF OPERATIONS – NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025
We evaluate our business operations based on the NOI of our two reportable segments: Real Estate (Rental Operations and Development) and Strategic Capital. NOI by segment is a non-GAAP performance measure that is calculated using revenues and expenses directly from our financial statements. We consider NOI by segment to be an appropriate supplemental measure of our performance because it helps management and investors understand our operating results.
37
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 nine months ended September 30 (in millions):
Rental revenues
6,507
6,067
Development management and other revenues
Rental expenses
(1,563
(1,461
Other expenses
(47
(30
Real Estate Segment – NOI
4,934
4,608
Strategic capital revenues
567
439
Strategic capital expenses
(262
(195
Strategic Capital Segment – NOI
305
244
(384
(333
(2,132
(1,957
2,723
2,562
424
360
3,507
2,731
See Note 11 to the Consolidated Financial Statements for more information on our segments and a reconciliation of each reportable segment’s NOI to Operating Income and Earnings Before Income Taxes.
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 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.
Below are the components of Real Estate Segment NOI for the nine months ended September 30, derived directly from line items in the Consolidated Financial Statements (in millions):
The $326 million change in Real Estate Segment (“RES”) NOI for the nine months ended September 30 compared to the same period in 2025, was impacted by the following activities (in millions):
Below are key operating metrics of our consolidated operating portfolio.
39
Development Activity
The following table summarizes consolidated development activity for the nine months ended September 30 (dollars and square feet in millions):
Starts:
Number of new development buildings started during the period
40
TEI
3,896
1,966
Percentage of build-to-suits based on TEI
67.9
68.3
Stabilizations:
Number of development buildings stabilized during the period
42
2,005
1,714
45.0
Weighted average stabilized yield (1)
6.9
6.8
Estimated value at completion
2,462
2,189
Estimated weighted average margin (2)
22.8
27.7
Estimated value creation
457
475
At September 30, 2026, the consolidated development portfolio, including properties under development and pre-stabilized properties, was expected to be completed before February 2029 with a TEI of $6.1 billion and was 34.8% leased, including $2.6 billion of TEI for data centers with power capacity of 680 megawatts. Our investment in the development portfolio was $3.2 billion at September 30, 2026.
Capital Expenditures
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 capitalized expenditures and leasing costs during each quarter and excludes development costs and spend subsequent to stabilization that is structural in nature:
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 3 to the Consolidated Financial Statements.
Below are the components of Strategic Capital Segment NOI for the nine months ended September 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 nine months ended September 30 (in millions):
Strategic capital revenues ($)
Recurring fees (2)
146
133
61
153
141
49
416
389
Transactional fees (3)
Promote revenue (4)
76
Total strategic capital revenues ($)
170
149
154
66
185
159
65
Strategic capital expenses ($) (4)
(134
(93
(21
(16
(71
(53
(36
(33
Strategic Capital Segment – NOI ($)
56
114
The Prologis Promote Plan ("PPP") awards 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. As a result, expenses recognized in the current period may relate to promote revenues recognized in prior periods.
G&A Expenses
G&A expenses were $384 million and $333 million for the nine months ended September 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 nine months ended September 30 (dollars in millions):
Building and land development activities
80
Operating building improvements and other
Total capitalized G&A expenses
128
Capitalized compensation and related costs as a percentage of total
18.1
21.2
Depreciation and Amortization Expenses
We recognized depreciation and amortization expenses of $2.1 billion and $2.0 billion for the nine months ended September 30, 2026 and 2025, respectively.
The depreciation and amortization expenses we recognize can be impacted by: (i) the size and timing of real estate acquisitions, dispositions and contributions; (ii) timing of when development properties are completed and placed into service; and (iii) foreign currency exchange rates and other activity.
Gains on Real Estate Transactions, Net
Gains on the disposition of development properties and land were $424 million and $53 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in 2026 was primarily attributable to the contribution of real estate properties and land to unconsolidated co-investment ventures in the U.S. and Europe.
Gains on other dispositions of investments in real estate were $360 million and $116 million for the nine months ended September 30, 2026 and 2025, respectively, primarily from sales of properties to third parties in the U.S. during both years.
Historically, we have utilized the proceeds from these dispositions principally to fund our acquisition and development activities. See Note 2 to the Consolidated Financial Statements for further information on these transactions.
Our Owned and Managed (“O&M”) Operating Portfolio
We manage our business and evaluate operating performance on an O&M basis, which includes our consolidated properties and properties owned by our unconsolidated co-investment ventures. We believe reviewing the results on this basis enables management to assess performance more comprehensively 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 excludes our development portfolio, value-added properties, non-industrial properties and properties we consider non-strategic that we do not intend to hold for the long term, including those classified as 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 (square feet in millions):
Number of Properties
SquareFeet
Percentage Occupied
Consolidated
3,063
682
95.4%
2,968
645
Unconsolidated
548
95.8%
2,472
562
96.3%
5,492
1,230
95.6%
5,440
1,207
Below are the key leasing metrics of our O&M operating portfolio.
Same Store Analysis
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 September 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 September 30 (dollars in millions):
Percentage
Change
Reconciliation of Consolidated Property NOI to Same Store Property NOI measures:
2,205
2,054
(512
(485
Consolidated Property NOI
1,693
1,569
Adjustments to derive same store results:
Property NOI from consolidated properties not included in same store portfolio and other adjustments (1)
(210
(164
Property NOI from unconsolidated co-investment ventures included in same store portfolio (1)(2)
1,001
955
Third parties' share of Property NOI from properties included in same store portfolio (1)(2)
(775
(743
Prologis Share of Same Store Property NOI – Net Effective (2)
1,709
1,617
Consolidated properties straight-line rent and fair value lease amortization included in same store portfolio (3)
(137
Unconsolidated co-investment ventures straight-line rent and fair value lease amortization included in same store portfolio (3)
(37
Third parties' share of straight-line rent and fair value lease amortization included in same store portfolio (2)(3)
Prologis Share of Same Store Property NOI – Cash (2)(3)
1,564
1,477
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 manage our business and compensate our executives based on the same store results of our O&M 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.
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Other Components of Income (Expense)
Earnings from Unconsolidated Entities, Net
We recognized net earnings from unconsolidated entities, which are primarily accounted for using the equity method, of $396 million and $268 million for the nine months ended September 30, 2026 and 2025, 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 dispositions of properties, impairments and extinguishments 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 3 to the Consolidated Financial Statements for a further breakdown of our share of net earnings recognized.
Interest Expense
The following table details our net interest expense for the nine months ended September 30 (dollars in millions):
Gross interest expense
846
753
Amortization of debt discount and debt issuance costs, net
64
Capitalized amounts
(92
(75
Net interest expense
818
742
Weighted average effective interest rate during the period
3.3
3.2
Interest expense increased during the nine months ended September 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 $2.2 billion of senior notes during the nine months ended September 30, 2026 and $3.4 billion during the year ended December 31, 2025, with a weighted average interest rate of 4.3% and 4.2%, respectively, at the issuance date.
See Note 5 to the Consolidated Financial Statements and the Liquidity and Capital Resources section below, for further discussion of our debt and borrowing costs.
Foreign Currency, Derivative and Other Gains (Losses) and Other Income (Expense), Net
We recognized foreign currency, derivative and other gains (losses) and other income (expense), net, of $219 million in gains and $54 million in losses for the nine months ended September 30, 2026 and 2025, respectively.
This activity resulted principally from three types of transactions during the nine months ended September 30, 2026 and 2025: (i) interest income earned on short-term investments, sale of investment tax credits generated from our energy business and other income ($188 million and $86 million, respectively); (ii) realized settlement of undesignated derivatives ($25 million of gains and $16 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 (less than $1 million of gains and $166 million of losses, respectively).
Given 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.
See Note 9 to the Consolidated Financial Statements for more information about our derivative and nonderivative transactions.
Income Tax Expense
We recognize income tax expense related to our taxable REIT subsidiaries and in the local, state and foreign jurisdictions in which we operate. Our current income tax expense (benefit) fluctuates from period to period based primarily on the timing of our taxable income, including gains on the disposition of properties, fees earned from the co-investment ventures and taxable earnings from unconsolidated
45
co-investment ventures. Deferred income tax expense (benefit) is generally a function of the period’s temporary differences and the utilization of net operating losses generated in prior years that had been previously recognized as deferred income tax assets in taxable subsidiaries.
The following table summarizes our income tax expense (benefit) for the nine months ended September 30 (in millions):
Current income tax expense (benefit):
Income tax expense (benefit)
179
119
Income tax expense (benefit) on dispositions
Total current income tax expense (benefit)
196
124
Deferred income tax expense (benefit):
(3
Total deferred income tax expense (benefit)
Total income tax expense
121
Net Earnings Attributable to Noncontrolling Interests
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 $187 million and $155 million for the nine months ended September 30, 2026 and 2025, respectively. Included in these amounts were $62 million and $48 million for the nine months ended September 30, 2026 and 2025, respectively, of net earnings attributable to the common limited partnership unitholders of Prologis, L.P.
See Note 6 to the Consolidated Financial Statements for further information on our noncontrolling interests.
Other Comprehensive Income (Loss)
The key driver of changes in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Financial Statements during the nine months ended September 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.
See Note 9 to the Consolidated Financial Statements for more information on changes in other comprehensive income and about our derivative and nonderivative transactions.
RESULTS OF OPERATIONS – THREE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025
Except as separately discussed above, the changes in comprehensive income attributable to common stockholders and unitholders and its components for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, are similar to the changes for the nine-month periods ended on the same dates.
LIQUIDITY AND CAPITAL RESOURCES
Overview
We believe our ability to generate cash from operating activities, distributions from our co-investment ventures, contributions and dispositions of properties and available financing sources provides sufficient capacity to meet our anticipated future development, acquisition, operating, debt service, dividend and distribution requirements.
Near-Term Principal Cash Sources and Uses
In addition to dividends and distributions, we expect our primary cash needs will consist of the following:
We expect to fund our cash needs principally from the following sources (subject to market conditions):
In the long term, we may also voluntarily repurchase our outstanding debt or equity securities (depending on prevailing market conditions, our liquidity, contractual restrictions and other factors) through cash purchases, open-market purchases, privately negotiated transactions, tender offers or otherwise. We may also fund our cash needs from the issuance of equity securities, subject to market conditions, and through the sale of a portion of our investments in co-investment ventures.
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The following table summarizes information about our consolidated debt by currency (dollars in millions):
1,820
1,844
2,444
12,017
12,302
3,195
2,930
16,674
15,386
570
Total debt (1)
36,832
35,037
At September 30, 2026, our credit ratings were A from Standard and Poor's and A2 from Moody's, both with stable outlooks. These ratings support our ability to access capital at favorable interest rates. Adverse changes to our credit ratings could negatively affect our business and our future growth, particularly our refinancing and capital markets activities, our ability to manage debt maturities and our development and acquisition plans. A securities rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn at any time by the issuing agency.
At September 30, 2026, we were in compliance with all of our financial debt covenants. These covenants include customary financial covenants, such as maintaining debt service coverage, leverage and fixed charge coverage ratios.
See Note 5 to the Consolidated Financial Statements for further discussion on our debt.
Equity Commitments Related to Certain Co-Investment Ventures
Certain co-investment ventures have equity commitments from us and our venture partners. Our venture partners fulfill their equity commitment with cash. We may fulfill our equity commitment through contributions of properties or cash.
The following table summarizes the remaining equity commitments at September 30, 2026 (dollars in millions):
Equity Commitments (1)
Number of Ventures
Prologis
Venture Partners
Expiration Date (2)
739
943
2029 (3)
162
113
505
618
2034
884
1,578
See the Cash Flow Summary below for more information about our investment activity in our co-investment ventures.
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Cash Flow Summary
The following table summarizes our cash flow activity for the nine months ended September 30 (in millions):
4,393
3,850
(4,015
(3,656
758
(345
Net increase (decrease) in cash and cash equivalents, including the effect of foreign currency exchange rates on cash
1,128
(133
Operating Activities
Cash provided by and used in operating activities, exclusive of changes in receivables and payables, was impacted by the following significant activities during the nine months ended September 30, 2026 and 2025:
Investing Activities
Cash provided by investing activities is driven by proceeds from the sale of real estate assets that include the contribution of properties we developed to our unconsolidated co-investment ventures as well as the sale of data centers and non-strategic operating properties. Cash used in investing activities is principally driven by our capital deployment activities of investing in the development of operating properties and data centers, acquisitions and capital expenditures as discussed above. Acquisition activity includes operating properties, real estate portfolios, land for future development and other real estate assets that we acquired with the intent to redevelop in the future. See Note 2 to the Consolidated Financial Statements for further information on these activities. In addition, the following significant transactions also impacted our cash used in and provided by investing activities during the nine months ended September 30, 2026 and 2025:
Financing Activities
Cash provided by and used in financing activities is principally driven by proceeds from and payments on credit facilities, commercial paper and other debt, along with dividends paid on common and preferred stock and noncontrolling interest contributions and distributions. Our credit facilities and our commercial paper support our cash needs for general corporate purposes on a short-term basis. The maturities of the borrowings under the credit facilities and the notes under the commercial paper programs generally range from overnight to three months.
Our repurchase of and payments on debt and proceeds from the issuance of debt consisted of the following activity for the nine months ended September 30 (in millions):
Repurchase of and payments on debt (including extinguishment costs)
Regularly scheduled debt principal payments and payments at maturity
209
Secured mortgage debt
465
584
Term loans
197
2,136
2,932
2,329
2,955
We also received net proceeds of $2.4 billion from the issuance of 17.25 million shares of common stock in 2026.
Unconsolidated Co-Investment Venture Debt
We had investments in and advances to our unconsolidated co-investment ventures of $10.7 billion at September 30, 2026. These ventures had total third-party debt of $20.5 billion at September 30, 2026 with a weighted average remaining term of 5 years and weighted average interest rate of 3.6%. The weighted average loan-to-value ratio for all unconsolidated co-investment ventures was 30.8% at September 30, 2026 based on gross book value. Loan-to-value, a non-GAAP measure, was calculated as the percentage of total third-party debt to the gross book value of real estate for each venture and weighted based on the cumulative gross book value of all unconsolidated co-investment ventures.
At September 30, 2026, we did not guarantee any third-party debt of the unconsolidated co-investment ventures.
Dividend and Distribution Requirements
Our dividend policy on our common stock is to distribute a percentage of our cash flow to ensure that we will meet the dividend requirements of the Internal Revenue Code ("IRC"), relative to maintaining our REIT status, while still allowing us to retain cash to fund our capital deployment and other investment activities.
Under the IRC, REITs may be subject to certain federal income and excise taxes on undistributed taxable income.
Outstanding Common Shares and Units Eligible for Dividends and Distributions
At September 30, 2026, the total outstanding shares of the Parent's common stock and common limited partnership units in the OP eligible for dividends and distributions were as follows (in thousands):
Shares/Units
Common shares outstanding
Common limited partnership units outstanding
Total outstanding common shares and units eligible for dividends and distributions
969,464
We paid quarterly cash dividends of $1.07 and $1.01 per common share in each of the first three quarters of 2026 and 2025, respectively. Our future common stock dividends, if and as declared, may vary and will be determined by the Board based upon the circumstances prevailing at the time, including our financial condition, operating results and REIT distribution requirements, and may be adjusted at the discretion of the Board during the year.
We make distributions on the common limited partnership units outstanding at the same per unit amount as our common stock dividend.
Preferred Stock Dividends
At September 30, 2026, our Series Q preferred stock had an annual dividend rate of 8.54% per share and the dividends are payable quarterly in arrears.
Pursuant to the terms of our preferred stock, we are restricted from declaring or paying any dividend with respect to our common stock unless and until all cumulative dividends with respect to the preferred stock have been paid and sufficient funds have been set aside for dividends that have been declared for the relevant dividend period with respect to the preferred stock.
Other Commitments
On an ongoing basis, we are engaged in various stages of negotiations for the acquisition, disposition or development of individual properties or portfolios of properties. See the discussion of our build-to-suit development commitments in Note 10 to the Consolidated Financial Statements.
FUNDS FROM OPERATIONS ATTRIBUTABLE TO COMMON STOCKHOLDERS/UNITHOLDERS (“FFO”)
FFO is a non-GAAP financial measure that is commonly used in the real estate industry, with net earnings as the most directly comparable GAAP measure.
The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as earnings computed under GAAP to exclude depreciation and gains and losses from sales net of any related tax, along with impairment charges, of previously depreciated properties. We 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. This measure excludes similar adjustments from our unconsolidated entities and the third parties' share of our consolidated ventures.
Our FFO Measures
Our FFO measures begin with NAREIT’s definition, with certain adjustments to calculate FFO, as modified by Prologis, and Core FFO, both as defined below, to reflect our business and execution of our management strategy. While these adjustments are subject to significant fluctuations from period to period, with both positive and negative short-term impacts, the removal of the effects of these items enhances our understanding of the core operating performance of our properties over the long term.
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. We use Core FFO 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.
We calculate our FFO measures based on our proportionate ownership share of both our unconsolidated entities and consolidated ventures. We reflect our share of our FFO measures for unconsolidated entities by applying our average ownership percentage for the period to the applicable adjustments on an entity-by-entity basis. We reflect our share for consolidated ventures in which we do not own 100% of the equity, by removing the noncontrolling interests share of the applicable adjustments based on our average ownership percentage for the applicable periods.
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FFO, as modified by Prologis attributable to common stockholders/unitholders (“FFO, as modified by Prologis”)
To arrive at FFO, as modified by Prologis, we adjust the NAREIT defined FFO measure to exclude:
Core FFO attributable to common stockholders/unitholders (“Core FFO”)
To arrive at Core FFO, we adjust FFO, as modified by Prologis, to exclude the following:
Limitations on the use of our FFO measures
While we believe our modified FFO measures are important supplemental measures, neither NAREIT's measures or our measures of FFO should be used alone because they exclude significant components of net earnings computed under GAAP and are, therefore, limited as an analytical tool. Some of these limitations arise from excluding income tax expense that may be payable or depreciation and amortization expenses that reflect costs necessary to maintain operating performance. In addition, our FFO measure does not reflect changes in asset values resulting from fluctuations in market conditions or foreign currency exchange rates nor costs or benefits from settlement of deferred income taxes or the extinguishment of debt. We do not use NAREIT's measures or our measures of FFO as alternatives to net earnings computed under GAAP or as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs.
We compensate for the 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 from consolidated net earnings attributable to common stockholders computed under GAAP for the nine months ended September 30 as follows (in millions):
Reconciliation of net earnings attributable to common stockholders to FFO measures:
2,857
1,924
Add (deduct) NAREIT defined adjustments:
Real estate related depreciation and amortization
2,053
1,897
Gains on other dispositions of investments in real estate, net of taxes (excluding development properties and land)
(359
(115
Adjustments related to noncontrolling interests
(35
Our proportionate share of adjustments related to unconsolidated entities
426
423
NAREIT defined FFO attributable to common stockholders/unitholders
4,942
4,080
Add (deduct) our modified adjustments:
Unrealized foreign currency, derivative and other losses (gains), net
(7
155
(6
FFO, as modified by Prologis attributable to common stockholders/unitholders
4,988
4,229
Adjustments to arrive at Core FFO:
(424
Current income tax expense (benefit) on dispositions
Venture formation costs
(43
(5
Core FFO attributable to common stockholders/unitholders
4,544
4,178
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to the impact of foreign exchange-related variability and earnings volatility on our foreign investments and interest rate changes. See our risk factors in Part 1, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025. See also Note 9 in the Consolidated Financial Statements in Item 1 for more information about our foreign operations and derivative financial instruments.
We monitor our market risk exposures using a sensitivity analysis. Our sensitivity analysis estimates the exposure to market risk sensitive instruments assuming a hypothetical 10% adverse change in foreign currency exchange rates or interest rates at September 30, 2026. The results of the sensitivity analysis are summarized in the following sections. The sensitivity analysis is of limited predictive value. As a result, revenues and expenses, as well as our ultimate realized gains or losses with respect to foreign currency exchange rate and interest rate fluctuations will depend on the exposures that arise during a future period, hedging strategies at the time and the prevailing foreign currency exchange rates and interest rates.
Foreign Currency Risk
We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign investments. Foreign currency market risk is the possibility that our results of operations or financial position could be better or worse than planned because of changes in foreign currency exchange rates. We primarily mitigate this risk by borrowing in the currencies where we invest, creating a natural hedge. In addition, we use derivative financial instruments, such as foreign currency contracts designated as net investment hedges, which offset translation adjustments on the net assets of our foreign investments. At September 30, 2026, after consideration of our ability to borrow in the foreign currencies in which we invest and also derivative and nonderivative financial instruments as discussed in Note 9 to the Consolidated Financial Statements, we had minimal net equity denominated in a currency other than the U.S. dollar.
For the nine months ended September 30, 2026, $625 million or 8.8% of our total consolidated revenue was denominated in foreign currencies. We enter into foreign currency contracts that we do not designate, such as forwards, to reduce the impact from fluctuations in foreign currency associated with the translation of the future earnings of our international subsidiaries. At September 30, 2026, we had foreign currency contracts denominated principally in British pound sterling, Canadian dollar, euro and Japanese yen, with an aggregate notional amount of $1.5 billion. As we do not designate these foreign currency contracts as hedges, the gain or loss on settlement is included in our earnings and offsets the lower or higher translation of earnings from our investments denominated in currencies other than the U.S. dollar. Although the impact to net earnings is mitigated through higher translated U.S. dollar earnings from these currencies, a weakening of the U.S. dollar against these currencies by 10% could result in a $148 million cash payment on settlement of these contracts.
Interest Rate Risk
We are also exposed to the impact of interest rate changes on future earnings and cash flows. To mitigate that risk, we generally borrow with fixed rate debt and we may use derivative instruments to fix the interest rate on our variable rate debt. At September 30, 2026, $35.9 billion of our debt bore interest at fixed rates and therefore the fair value of these instruments was affected by changes in market interest rates. At September 30, 2026, $1.5 billion of our debt bore interest at variable rates. The following table summarizes the future repayment of debt and scheduled principal payments at September 30, 2026 (dollars in millions):
2027
Fixed rate debt
401
2,020
2,605
3,368
27,496
35,890
31,821
Weighted average interest rate (1)
2.2
2.7
3.5
Variable rate debt
110
495
Total variable rate debt
790
497
1,460
At September 30, 2026, the weighted average effective interest rate on our variable rate debt was 3.0%, which was calculated using an average balance on our credit facilities throughout the year and our other variable rate debt balances at September 30, 2026. Changes in interest rates can cause interest expense to fluctuate on our variable rate debt. On the basis of our sensitivity analysis, a 10% increase in interest rates on our average outstanding variable rate debt balances would result in additional annual interest expense of $5 million, which equates to a change in interest rates of 30 basis points on our average outstanding variable rate debt balances and 1 basis point on our average total debt balances.
ITEM 4. Controls and Procedures
Controls and Procedures (Prologis, Inc.)
Prologis, Inc. carried out an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), at September 30, 2026. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.
Changes in Internal Control over Financial Reporting
During the quarter ended September 30, 2026, we continued the implementation of a new financial system to further automate our global close and consolidation processes and the related controls. There have been no other changes in Prologis, Inc.’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, Prologis, Inc.’s internal control over financial reporting.
Controls and Procedures (Prologis, L.P.)
Prologis, L.P. carried out an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act at September 30, 2026. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.
During the quarter ended September 30, 2026, we continued the implementation of a new financial system to further automate our global close and consolidation processes and related controls. There have been no other changes in Prologis, L.P.’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, Prologis, L.P.’s internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
Prologis and our unconsolidated entities are party to a variety of legal proceedings arising in the ordinary course of business. With respect to any such matters to which we are currently a party, the ultimate disposition of any such matters will not result in a material adverse effect on our business, financial position or results of operations.
ITEM 1A. Risk Factors
At September 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.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the quarterly period ended September 30, 2026, we issued 0.1 million shares of common stock of Prologis, Inc. in connection with the redemption of common units of Prologis, L.P. pursuant to the terms of the limited partnership agreement of Prologis, L.P. These issuances were made in reliance on the exemption from registration requirements of the Securities Act of 1933, as amended, afforded by Section 4(a)(2) thereof.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Mine Safety Disclosures
Not Applicable.
ITEM 5. Other Information
During the quarterly period ended September 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K under the Act).
ITEM 6. Exhibits
The exhibits required by this item are set forth on the Exhibit Index attached hereto.
INDEX TO EXHIBITS
Certain of the following documents are filed herewith. Certain other of the following documents that have been previously filed with the Securities and Exchange Commission (“SEC”) and, pursuant to Rule 12b-32, are incorporated herein by reference.
2.1
Co-operation Agreement, dated as of August 4, 2026, between Prologis, Inc. and SEGRO plc (incorporated by reference to Exhibit 2.1 to Prologis’ Current Report on Form 8-K filed on August 4, 2026).
10.1
Term Loan Credit Agreement, dated as of August 4, 2026 (incorporated by reference to Exhibit 10.1 to Prologis' Current Report on Form 8-K filed August 4, 2026).
10.2†
First Amendment to Term Loan Credit Agreement and Borrower Accession Agreement, dated as of September 1, 2026
15.1†
KPMG LLP Awareness Letter of Prologis, Inc.
15.2†
KPMG LLP Awareness Letter of Prologis, L.P.
22.1†
Subsidiary guarantors and issuers of guaranteed securities.
31.1†
Certification of Chief Executive Officer of Prologis, Inc.
31.2†
Certification of Chief Financial Officer of Prologis, Inc.
31.3†
Certification of Chief Executive Officer for Prologis, L.P.
31.4†
Certification of Chief Financial Officer for Prologis, L.P.
32.1†
Certification of Chief Executive Officer and Chief Financial Officer of Prologis, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†
Certification of Chief Executive Officer and Chief Financial Officer for Prologis, L.P., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS†
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document.
101.SCH†
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
†
Filed herewith
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.
By:
/s/ Timothy D. Arndt
Timothy D. Arndt
Chief Financial Officer
/s/ Trisha L. Burns
Trisha L. Burns
Managing Director and Chief Accounting Officer
Prologis, Inc., its general partner
Date: October 28, 2026