10-QPeriod: Q2 FY2017

Prologis, Inc. Quarterly Report for Q2 Ended Jun 30, 2017

Filed July 27, 2017For Securities:PLDPLDGP

Summary

Prologis, Inc. (PLD) reported its financial results for the second quarter and first half of 2017, concluding on June 30, 2017. The company demonstrated robust performance, particularly in its Real Estate Operations segment, which continues to be the primary driver of revenue and earnings. Strategic Capital revenues saw a significant increase, largely due to the recognition of promote revenues. The company's portfolio remains well-occupied, and it actively manages its development pipeline and disposition program. Financially, Prologis maintained a strong balance sheet with total assets slightly decreasing to $30.15 billion from $30.25 billion at year-end 2016, while total liabilities increased to $12.29 billion from $11.79 billion. Debt levels also saw a slight increase to $11.08 billion. The company's strategic initiatives, including forming new ventures and optimizing its capital structure, appear to be progressing well, positioning Prologis for continued growth in the logistics real estate sector.

Financial Highlights

36 data points
Beta

Revenue

$766.18M

Net Income

$266.94M

34.8% Net Margin

EPS (Diluted)

$0.50

Total Assets

$30.15B

Cash & Equivalents

$271.35M

Free Cash Flow

$392.37M

Financial Statements
Beta
Revenue$766.18M
Operating Expenses$490.91M
Operating Income$275.27M
Interest Expense$75.35M
Net Income$266.94M
EPS (Basic)$0.50
EPS (Diluted)$0.50
Shares Outstanding (Basic)530.04M
Shares Outstanding (Diluted)552.11M

Key Highlights

  • 1Consolidated revenues increased by 4.9% year-over-year for the first six months of 2017, reaching $1.395 billion.
  • 2Net earnings attributable to common stockholders decreased slightly to $470.2 million for the first six months of 2017 from $483.4 million in the prior year period.
  • 3Net investments in real estate properties increased slightly to $23.47 billion as of June 30, 2017, from $23.36 billion as of December 31, 2016.
  • 4Total debt increased to $11.08 billion as of June 30, 2017, from $10.61 billion as of December 31, 2016.
  • 5Strategic Capital revenues surged by 127.4% to $237.7 million for the first six months of 2017, driven by a $124 million promote revenue recognized in June 2017.
  • 6The company maintained a high occupancy rate of 96.0% in its consolidated portfolio for the first six months of 2017.
  • 7Prologis reported $180.3 million in net gains on dispositions of investments in real estate for the first six months of 2017.

Frequently Asked Questions

For the first six months of 2017, Prologis reported a 4.9% increase in consolidated revenues to $1.395 billion, compared to $1.208 billion in the same period of 2016. The most significant driver of this growth was a substantial increase in Strategic Capital revenues, up 127.4% to $237.7 million, primarily due to a $124 million promote revenue recognized in June 2017.

Total debt for Prologis increased to $11.08 billion as of June 30, 2017, up from $10.61 billion at the end of 2016. The company's weighted average interest rate on its debt slightly decreased to 3.0% from 3.2%. Despite the increase in absolute debt, the company stated it was in compliance with all debt covenants at June 30, 2017.

The Strategic Capital segment, which focuses on managing unconsolidated co-investment ventures, saw a significant jump in revenues. This was primarily driven by a substantial promote revenue of $124 million recognized in June 2017, alongside ongoing asset management, property management, leasing, acquisition, development, financing, and disposition services provided to its partners.

Prologis continues to actively manage its real estate assets. In the first six months of 2017, the company generated $180.3 million in net gains from the disposition of real estate investments. The company also reported a high occupancy rate of 96.0% in its consolidated portfolio and maintained strong development activity, with a focus on creating value through its development pipeline.