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What changed in Prologis's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Prologis's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+287 added−290 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-14)

Top changes in Prologis's 2025 10-K

287 paragraphs added · 290 removed · 247 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

67 edited+17 added−12 removed39 unchanged
Biggest changeDespite the competition, our global reach and local market knowledge over the years have given us distinct competitive advantages, including the following: • a portfolio of properties strategically located in markets characterized by large population densities, growing consumption and high barriers to entry, typically near large labor pools and extensive transportation infrastructure, including our Last Touch ® facilities; • the ability to leverage the organizational scale and structure of our 1.3 billion square foot O&M portfolio to provide a single point of contact for our multi-market customers to address their needs through our in-house global Customer Led Solutions Team; • services and solutions offered through Prologis Essentials to assist our customers with their operations and energy and sustainability needs and at the same time enhancing the value of our real estate; • a strategically located, global land bank and redevelopment sites that have the potential to support the development of $41.5 billion of TEI of new logistics space on an O&M basis, including build-to-suit development and redevelopment as industrial properties or data centers; • capabilities to convert properties to data centers in key markets, with total TEI of $0.9 billion on an O&M basis currently under development; • local teams with the expertise, experience and relationships to lease our properties and deploy capital advantageously, supported by our in-house government and community affairs and entitlement teams; • development of logistics facilities with sustainable design features that meet customer needs for efficient, high-quality buildings while enabling them to make progress on their own sustainability goals; • relationships and successful track record with current and prospective investors in our strategic capital business that is comprised of 95% open-ended ventures, long-term ventures and two publicly traded vehicles; • a market intelligence team that allows us to track business conditions in real time, proactively pursue market opportunities and disruptions alike, and develop revenue-generating capabilities; • an investment in technology and talent to support our sustainability objectives, including expanding our efforts around renewable energy; 8 Table of Contents • an internal venture capital group, Prologis Ventures, through which we invest in growth stage companies focused on innovating across the logistics sector; and • a strong balance sheet and credit ratings, coupled with significant liquidity, borrowing capacity and long-term fixed debt with low rates.
Biggest changeDespite this competitive environment, our global reach and local market knowledge, developed over the years, provide us with distinct competitive advantages, including the following: • a portfolio of properties strategically located in markets with high population densities, growing consumption and significant barriers to entry, typically near major labor pools and extensive transportation infrastructure, including our Last Touch ® facilities; • the ability to leverage the scale and structure of our 1.3 billion square foot O&M portfolio to provide multi-market customers with a single point of contact through our in-house global Customer Led Solutions Team to address their needs; • services and solutions offered through Prologis Essentials to assist our customers with their operational, energy and sustainability needs and at the same time enhancing the value of our real estate; • strategically located, global land and redevelopment sites with the potential to support $42.6 billion of TEI in new logistics space on an O&M basis, including build-to-suit development and redevelopment into industrial properties or data centers; • capabilities to build new data centers and convert existing properties to data centers in key markets, with $686 million of TEI on an O&M basis currently under development; • local teams with the expertise, experience and relationships to lease our properties and deploy capital advantageously, supported by our in-house government and community affairs and entitlement teams; 8 Table of Contents • development of logistics facilities with sustainable design features that meet customer needs for efficient, high-quality buildings while supporting their progress toward sustainability goals; • relationships and a successful track record with investors in our strategic capital business that is comprised of 94% open-ended ventures, long-term ventures and three publicly traded vehicles; • a market intelligence team that tracks business conditions in real time, allowing us to proactively pursue opportunities, respond to disruptions and create revenue-generating capabilities; • ongoing investment in technology and talent to support our sustainability objectives, including expansion of renewable energy initiatives and the integration of energy solutions across the portfolio; • an internal venture capital group, Prologis Ventures, which invests in growth stage companies innovating across the logistics sector; and • a strong balance sheet and credit ratings, complemented by significant liquidity, borrowing capacity and long-term fixed-rate debt at favorable rates.
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 build modern logistics facilities that address the evolving requirements of our customers while deepening our presence in our target markets.
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.
Additionally, primary categories are listed in order of the largest percentage of NER for each category type. 9 Table of Contents The following table details our top 25 customers for our consolidated and O&M real estate properties at December 31, 2024 (square feet in millions): Consolidated - Real Estate Segment Owned and Managed Top Customers % of NER Total Occupied Square Feet Top Customers % of NER Total Occupied Square Feet 1.
Additionally, primary categories are listed in order of the largest percentage of NER for each category type. 9 Table of Contents The following table details our top 25 customers for our consolidated and O&M real estate properties at December 31, 2025 (square feet in millions): Consolidated - Real Estate Segment Owned and Managed Top Customers % of NER Total Occupied Square Feet Top Customers % of NER Total Occupied Square Feet 1.
Our global risk management team works with our Board to conduct regular enterprise-wide risk assessments to ensure proper oversight over real estate, financial and emerging risks across our global organization. We remain committed to ensuring that 100% of our employees complete ethics training annually, a commitment we continued to achieve in 2024.
Our global risk management team works with our Board to conduct regular enterprise-wide risk assessments to ensure proper oversight over real estate, financial and emerging risks across our global organization. We remain committed to ensuring that 100% of our employees complete ethics training annually, a commitment we continued to achieve in 2025.
We regularly talk with customers on how Prologis can work with them to enhance the sustainability of their operations. We believe these services and solutions can deliver operational efficiencies, reduce energy and water consumption and decrease greenhouse gas emissions within our customers’ operations and across our own portfolio.
We regularly talk with customers about how Prologis can work with them to enhance the sustainability of their operations. We believe these services and solutions can deliver operational efficiencies, reduce energy and water consumption and decrease greenhouse gas emissions within our customers’ operations and across our own portfolio.
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.
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.
We believe we can continue to grow NOI and strategic capital revenues organically and through accretive development and acquisition activity while further reducing G&A as a percentage of our investments in real estate. • Staying “Ahead of What’s Next™”.
Over time, we believe we can continue to grow NOI and strategic capital revenues organically and through accretive development and acquisition activity while further reducing G&A as a percentage of our investments in real estate. • Staying “Ahead of What’s Next™”.
Below are the primary categories of goods in our consolidated real estate properties at December 31, 2024: (1) Primary categories do not sum to 100% as the difference is attributable to customers that do not clearly fall into a single category.
Below are the primary categories of goods in our consolidated real estate properties at December 31, 2025: (1) Primary categories do not sum to 100% as the difference is attributable to customers that do not clearly fall into a single category.
While the majority of our properties in the U.S. are wholly owned, we hold a significant ownership interest in properties both in the U.S. and internationally through our investment in co-investment ventures.
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.
We align employees’ goals with our overall strategic direction to create a clear link between individual efforts and the long-term success of the company. We communicate at all levels of the organization throughout the year about company goals and strategic initiatives to ensure awareness and alignment.
We align employees’ goals with our overall strategic direction to create a clear link between individual efforts and the long-term success of the company. We communicate at all levels of the organization throughout the year about company goals and strategic initiatives to 10 Table of Contents ensure awareness and alignment.
We believe our Prologis Essentials LED and SolarSmart solutions, which provide our customers with energy solutions and savings through efficient lighting and solar panels on our rooftops, help reduce the environmental footprint of our customers and accelerate our progress in these areas.
We believe our Prologis Essentials LED and SolarSmart solutions, which provide our customers with energy solutions and savings through efficient lighting and solar panels on our rooftops, help reduce the environmental footprint of our customers and accelerate our progress in these areas. In 2025, we met these goals.
While some of these assessments have led to further investigation and sampling, none of the environmental assessments have revealed an environmental liability that we believe would have a material adverse effect beyond amounts recorded at December 31, 2024. See further discussion in Item 1A. Risk Factors and Note 16 to the Consolidated Financial Statements in Item 8.
While some of these assessments have led to further investigation and sampling, none of the environmental assessments have revealed an environmental liability that we believe would have a material adverse effect beyond amounts recorded at December 31, 2025. See further discussion in Item 1A. Risk Factors and Note 15 to the Consolidated Financial Statements in Item 8.
We are focused on creating value beyond real estate by enhancing our customers’ experience, leveraging our scale in procurement and innovating through data analytics and digitization efforts. This includes investments in early and growth-stage companies that are focused on emerging technologies for the logistics sector through Prologis Ventures, our corporate venture capital group.
We are focused on creating value beyond real estate by enhancing our customers’ experience, leveraging our scale in procurement and driving innovation through data analytics and digitization. This includes investments in early and growth-stage companies that are focused on emerging technologies for the logistics sector through Prologis Ventures, our corporate venture capital group.
They implement our strategy and create value for our customers and shareholders. We seek to recruit and retain talented employees with varied experiences and perspectives. The intent is to create an inclusive and high-performing culture where each employee can do their best work and drive our collective success. We are committed to inclusion and diversity.
They implement our strategy and create value for our customers and shareholders. We seek to recruit and retain talented employees with varied experiences and perspectives. The intent is to create an inclusive and high-performing culture where each employee can do their best work and drive our collective success.
Customers At December 31, 2024, in our Real Estate Segment representing our consolidated properties, we had more than 4,000 customers occupying 646 million square feet of logistics operating properties (6,500 customers occupying 1.3 billion square feet for our O&M portfolio).
Customers At December 31, 2025, in our Real Estate Segment representing our consolidated properties, we had more than 4,000 customers occupying 649 million square feet of logistics operating properties (6,500 customers occupying 1.3 billion square feet for our O&M portfolio).
GOVERNMENTAL MATTERS Given the global nature of our business, we are subject to various regulatory requirements, tax and other laws as well as exposed to economic and geopolitical matters such as taxes, tariffs, trade wars and laws within the countries in which we operate and unexpected changes in these items may result in unanticipated losses, adverse tax consequences and affect our operating results and financial condition.
Financial Statements and Supplementary Data. 12 Table of Contents GOVERNMENTAL MATTERS Given the global nature of our business, we are subject to various regulatory requirements, tax and other laws as well as exposed to economic and geopolitical matters such as taxes, tariffs, trade wars and laws within the countries in which we operate and unexpected changes in these items may result in unanticipated losses, adverse tax consequences and affect our operating results and financial condition.
Adjusted G&A expenses is calculated from our 7 Table of Contents Consolidated Financial Statements as G&A Expenses and Strategic Capital Expenses , less expenses under the Prologis Promote Plan (“PPP”) and property-level management expenses for the properties owned by the ventures. • Balance Sheet Strength.
Adjusted G&A expenses is calculated from our Consolidated Financial Statements as G&A Expenses and Strategic Capital Expenses , less expenses under the Prologis Promote Plan (“PPP”) and property-level management expenses for the properties owned by the ventures. • Balance Sheet Strength.
In 2024, more than 1,800 employees completed more than 15,400 hours of company-provided or company-sponsored learning and development training. We provide opportunities for our employees to share their insights and perspectives on our company and their work experience.
In 2025, more than 1,800 employees completed more than 14,400 hours of company-provided or company-sponsored learning and development training. We provide opportunities for our employees to share their insights and perspectives on our company and their work experience.
We estimate that our share of the lease mark-to-market is approximately 30% (on an NER basis), which represents the amount by which current market rents exceed our in-place rents based on our share of the O&M portfolio at December 31, 2024.
We estimate that our share of the remaining lease mark-to-market is approximately 18% (on an NER basis), which represents the amount by which current market rents exceed our in-place rents based on our share of the O&M portfolio at December 31, 2025.
In 2024, we installed or were scheduled to install LED lighting within 100% of our eligible new developments and redevelopments and LED lighting across approximately 79% of our eligible logistics facilities (based on square feet) within our O&M operating properties at December 31, 2024.
We installed or were scheduled to install LED lighting within 100% of our eligible new developments and redevelopments and across approximately 83% of our eligible logistics facilities (based on square feet) within our O&M operating properties at December 31, 2025.
We continue to maintain low leverage as a percentage of our real estate investments and our market capitalization. As a result of our low leverage, available liquidity and investment capacity in the co-investment ventures, we have significant ability to capitalize on opportunistic value-added investments as they arise. • Our Scale Drives Efficiency.
We continue to maintain low leverage as a percentage of our real estate investments and our market capitalization. Our low leverage, available liquidity and investment capacity in the co-investment ventures position us to capitalize on opportunistic value-added investments as they arise. • Our Scale Drives Efficiency.
For development properties in our O&M portfolio that were approved by our Investment Committee after June 2021 and that reached stabilization during 2024, we certified 69% of our eligible developments and redevelopments with sustainable building certifications and 31% were scheduled for sustainable building certification, totaling 100% of eligible developments and redevelopments.
For development properties in our O&M portfolio that were approved by our Investment Committee after June 2021 and that reached stabilization during 2025, we certified 62% of our eligible developments and redevelopments with sustainable building certifications and 38% were scheduled for sustainable building certification, totaling 100% of eligible developments and redevelopments.
Along with this commitment, our employees completed more than 6,400 hours of information technology security, workplace safety, compliance and other ethics training in 2024. Our approach is reinforced by our Code of Ethics and Business Conduct, as described above.
Along with this commitment, our employees completed more than 4,100 hours of information technology security, workplace safety, compliance and other ethics training in 2025. Our approach is reinforced by our Code of Ethics and Business Conduct, as described above.
Moreover, the principles of Environmental, Social, and Governance (“ESG”) are ingrained in our business strategy through our integrated approach to global impact and sustainability, which we believe creates value for our customers, investors, employees, and communities. 4 Table of Contents Our Global Presence At December 31, 2024, 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, we reflect amounts in the U.S. dollar, our reporting currency.
In addition, the principles of environmental, social and governance ("ESG") 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. 4 Table of Contents Our Global Presence At December 31, 2025, 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.
NOI from the Strategic Capital Segment is calculated directly from the Consolidated Financial Statements as Strategic Capital Revenues less Strategic Capital Expenses. 5 Table of Contents (2) A developed property moves into the operating portfolio when it meets our definition of stabilization, which is the earlier of when a property that was developed has been completed for one year, is contributed to a co-investment venture following completion or is 90% occupied.
NOI from the Strategic Capital Segment is calculated directly from the Consolidated Financial Statements as Strategic Capital Revenues less Strategic Capital Expenses . (2) A developed property moves into the operating portfolio when it meets our definition of stabilization, which is the earlier of when a property that was developed has been completed for one year or is 90% occupied.
We have a long-held strategy to build and maintain a strong and flexible balance sheet by using conservative levels of financial leverage. At December 31, 2024, the weighted average remaining maturity of our consolidated debt was 9 years and the weighted average interest rate was 3.1%. At December 31, 2024, we had total available liquidity of $7.4 billion.
We have a long standing strategy to build and maintain a strong, flexible balance sheet by using conservative levels of financial leverage. At December 31, 2025, the weighted average remaining term of our consolidated debt was 9 years and the weighted average interest rate was 3.2%. At December 31, 2025, we had total available liquidity of $7.6 billion.
NFI Industries 0.5 4 14. Ryder 0.6 3 14. Pepsi 0.4 4 15. Maersk 0.5 3 15. GigaCloud 0.4 3 16. DVS A/S 0.5 2 16. Lululemon 0.4 2 17. Western Post 0.5 2 17. Mercado Libre 0.4 5 18. Imperial Dade 0.5 2 18. Ryder 0.4 4 19. Berkshire Hathaway 0.4 3 19. Burlington Stores 0.4 3 20.
Pepsi 0.5 5 14. Wayfair 0.6 6 14. Mercado Libre 0.5 6 15. Ryder 0.6 3 15. GigaCloud 0.4 3 16. Berkshire Hathaway 0.5 2 16. NFI Industries 0.4 4 17. Tesla 0.5 2 17. Ryder 0.4 4 18. Western Post 0.4 2 18. Lululemon 0.4 2 19. Maersk 0.4 2 19. Burlington Stores 0.4 3 20.
The primary driver of our revenue growth will be the rolling of in-place leases to current market rents when leases expire, as discussed further below. We believe our active portfolio management, combined with the skills of our property, leasing, maintenance, energy, sustainability and risk management teams allow us to maximize NOI across our portfolio.
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.
Our Prologis Essentials platform provides our customers with solutions through services and products that address their operations and energy and sustainability needs, simplify their decision-making and support them in achieving their environmental goals. Competition Real estate ownership is highly fragmented, and we face competition from many owners and operators.
Our Prologis Essentials platform provides customers with services and products that support their operational, energy and sustainability needs, simplify decision making and help advance their environmental goals. Competition Real estate ownership is highly fragmented, and we face competition from many owners and operators.
We have committed to: (i) installing LED lighting within 100% of our eligible new developments and redevelopments and across 80% of our eligible O&M operating properties by 2025; (ii) installing 1 gigawatt of solar generation and storage capacity by 2025 within our O&M portfolio; and (iii) obtaining sustainable building certifications for 100% of our eligible new developments and redevelopments.
We committed to: (i) installing LED lighting within 100% of our eligible new developments and redevelopments and across 80% of our eligible O&M operating properties by 2025; (ii) achieving 1 gigawatt of solar generation and storage capacity by 2025 on our O&M portfolio, including Prologis and third-party owned projects; and (iii) obtaining sustainable building certifications for 100% of our eligible new 11 Table of Contents developments and redevelopments.
In addition, we encourage our employees to support their local communities outside of working hours with our Dollars for Doers and other matching gifts programs, through which Prologis donates to eligible charities and non-profit organizations based on employees’ personal volunteer hours or dollar donations.
At December 31, 2025, we surpassed this goal by reaching a total of 96,000 hours. In addition, we encourage our employees to support their local communities outside of working hours with our Dollars for Doers and other matching gifts programs, through which Prologis donates to eligible charities and non-profit organizations based on employees’ personal volunteer hours or dollar donations.
Partnering with many of the world’s largest institutional investors through co-investment ventures allows us to expand our investment capacity, enhance and diversify our real estate returns and mitigate our exposure to foreign currency movements. Our scale and customer-focused strategy have compelled us to expand the services we provide.
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, while mitigating our exposure to foreign currency movements. Our scale and customer-focused strategy have driven us to expand the services we offer.
As properties are completed and leased, we expect to capture the value creation principally through gains realized through contributions of these properties to unconsolidated co-investment ventures and increases in the NOI of the consolidated portfolio. • Strategic Capital Advantages.
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 and through increases in the NOI of the consolidated portfolio. • Strategic Capital Advantages.
Successful development and redevelopment efforts provide significant earnings growth as projects are leased, generate income and increase the value of our Real Estate Segment. Generally, we develop properties in the U.S. to hold for the long term or to contribute to our unconsolidated co-investment venture, and outside the U.S. to contribute to our unconsolidated co-investment ventures.
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.
The following table summarizes our total number of employees at December 31, 2024: Geographies U.S. (1) 1,595 Other Americas 206 Europe 627 Asia 275 Total 2,703 (1) This includes employees who were based in the U.S. but also support other geographies.
The following table summarizes our total number of employees at December 31, 2025: Geographies U.S. (1) 1,649 Other Americas 210 Europe 657 Asia 286 Total 2,802 (1) This includes employees who were based in the U.S. but also support other geographies.
In 2018, we set a goal to train 25,000 individuals by 2025 by partnering with leading public sector organizations and leveraging digital learning technologies to develop innovative training solutions. We met this goal in 2023, two years early. Beginning in 2019, we committed to spending 75,000 hours supporting our local communities by 2025.
In 2018, we set a goal to train 25,000 individuals by 2025 by partnering with leading public sector organizations and leveraging digital learning technologies to develop innovative training solutions. We met this goal in 2023, two years early, and have continued to train individuals since achieving it.
Rent change represents the percentage change in net effective rental rates (average rate over the lease term), on new and renewed leases, commenced during the period compared with previous net effective rental rates in that same space. • Rent Growth. We have experienced positive rent growth every quarter since 2013.
Rent change represents the percentage change in net effective rental rates (average rate over the lease term), on new and renewed leases, commenced during the period compared with previous net effective rental rates for the same respective spaces. • Rent Growth.
Our 1.3 billion square foot portfolio has provided the foundation upon which we have built a platform of solutions to address challenges that our customers face in global fulfillment today. Through Prologis Essentials, we provide solutions to meet our customers’ operations and energy and sustainability needs.
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. Through Prologis Essentials, we deliver solutions to support our customers’ operational, energy and sustainability needs.
As a result of several years of increases in market rents, our in-place leases have considerable upside potential to capture these higher rents and to drive future organic NOI growth.
As a result of several years of market rent increases, our in-place leases have considerable upside potential to capture higher rents and drive future organic NOI growth. This is evident in the positive rent change we have experienced in every quarter since 2013.
To achieve this goal, we enable our employees to spend 40 working hours a year to volunteer, including at our company-sponsored day of service where employees around the globe volunteer on projects to help in their local communities. At December 31, 2024, we have contributed approximately 74,300 hours towards our goal.
Beginning in 2019, we committed to spending 75,000 hours supporting our local communities by 2025. To achieve this goal, we enable our employees to spend 40 working hours a year to volunteer, including at our company-sponsored day of service where employees around the globe volunteer on projects to help in their local communities.
Imperial Dade 0.3 2 Top 25 Customers 23.0 132 Top 25 Customers 20.8 221 In our Strategic Capital Segment, we view our partners and investors as our customers. At December 31, 2024, we had 155 investors in our private equity ventures, several of which invest in multiple ventures. Our People Our people are the foundation of our business.
Nippon Express 0.3 4 Top 25 Customers 23.7 130 Top 25 Customers 21.6 226 In our Strategic Capital Segment, we view our partners and investors as our customers. At December 31, 2025, we had 159 investors in our private equity ventures, several of which invest in multiple ventures. Our People Our people are the foundation of our business.
We align our interests with our partners by holding significant ownership interests in the co-investment ventures. Nine 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%.
We align our interests with our partners by holding significant ownership interests in the co-investment ventures. Ten 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.
Amazon 6.0 34 1. Amazon 4.9 46 2. Home Depot 2.8 17 2. Home Depot 1.8 19 3. FedEx 1.7 7 3. FedEx 1.3 11 4. UPS 1.0 6 4. DHL 1.1 13 5. Geodis 0.9 6 5. Geodis 1.1 15 6. NFI Industries 0.7 4 6. CEVA Logistics 1.0 13 7. DHL 0.7 4 7. GXO 0.8 10 8.
Amazon 6.3 35 1. Amazon 5.3 48 2. Home Depot 2.8 17 2. Home Depot 1.8 19 3. FedEx 1.8 7 3. FedEx 1.4 11 4. UPS 1.0 7 4. DHL 1.2 14 5. Walmart 0.8 5 5. DSV 1.2 14 6. GXO 0.8 5 6. Geodis 1.0 14 7. Geodis 0.7 6 7. GXO 0.9 10 8.
CEVA Logistics 0.4 3 20. Samsung 0.4 5 21. The Clorox Company 0.4 3 21. DB Schenker 0.4 6 22. Samsung 0.4 3 22. Wayfair 0.4 6 23. Lasership, Inc. 0.4 1 23. ZOZO 0.4 5 24. Kellanova 0.4 3 24. Nippon Express 0.4 4 25. Tesla 0.3 1 25.
Kellanova 0.4 3 20. Samsung 0.4 5 21. Imperial Dade 0.4 2 21. Wayfair 0.4 6 22. RONA 0.4 1 22. Tesla 0.3 2 23. The Clorox Company 0.4 3 23. ZOZO 0.3 5 24. OnTrac 0.4 1 24. Berkshire Hathaway 0.3 3 25. CEVA Logistics 0.3 3 25.
This lease mark-to-market has remained meaningfully positive despite recent quarters of lower or even negative market rental growth due to the compounded nature of market rent growth. Therefore, even without further market rent growth, we would expect our lease renewals to result in higher future rental income. • Value Creation from Development.
This lease mark-to-market has remained meaningfully positive despite recent quarters of lower or even negative market rental growth, reflecting the accumulated rent growth embedded in our in-place leases remaining to be realized. As a result, even without further market rent increases, we expect lease renewals to drive higher rental income over the coming years. • Value Creation from Development.
Any amendments to or waivers of our Code of Ethics and Business Conduct that apply to the principal executive officer, the principal financial officer, the principal accounting officer, or other people performing similar functions, and that relate to any matter enumerated in Item 406(b) of Regulation S-K, will be disclosed on our website. 11 Table of Contents GLOBAL IMPACT AND SUSTAINABILITY The principles of ESG are ingrained in our business strategy through our integrated approach to global impact and sustainability, which we believe creates value for our customers, investors, employees and communities.
Any amendments to or waivers of our Code of Ethics and Business Conduct that apply to the principal executive officer, the principal financial officer, the principal accounting officer, or other people performing similar functions, and that relate to any matter enumerated in Item 406(b) of Regulation S-K, will be disclosed on our website.
Our most recent employee engagement pulse survey, completed in September 2024, with a participation rate of 92%, indicated that 85% of Prologis employees are engaged based on their positive response to the questions that comprise our engagement driver index. We strive to cultivate a healthy and safe working environment for our employees.
Our most recent employee engagement survey, completed in September 2025, had a participation rate of 92%, with an engagement level of 85% based on respondents' positive responses to the questions that comprise our engagement driver index. We strive to cultivate a healthy and safe working environment for our employees. We provide workplace flexibility with accountability as determined by role.
The charters of our Board Governance and Nomination Committee and Talent and Compensation Committee provide that such committees have specific oversight over global impact and sustainability matters and inclusion and diversity matters, respectively.
Over the past eleven years we have onboarded nine new directors with a breadth of experience, increasing the ethnic, gender and geographical diversity of the Board. The charters of our Board Governance and Nomination Committee and Talent and Compensation Committee provide that such committees have specific oversight over global impact and sustainability matters and inclusion and diversity matters, respectively.
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 $36.9 billion ($41.5 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.
We expect our development activities to increase in the coming year. 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 $37.3 billion ($42.6 billion on an O&M basis) of TEI of newly developed buildings.
We believe we have a competitive advantage due to: (i) the strategic locations of our global land bank and redevelopment sites for the development of future industrial properties or data centers; (ii) the development expertise of our local teams; (iii) the depth of our customer relationships; (iv) our ability to integrate sustainable design features that provide operational efficiencies for our customers; and (v) our procurement capabilities that allow us to secure high-demand construction materials at a lower cost.
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.
The co-investment ventures provide capital from third parties that allows us to grow our O&M portfolio, contribute to self-funding our development activities through the sale or contribution of newly developed assets to these vehicles and produce substantial fees for our management of the assets.
Our co-investment ventures provide third-party capital that enables us to grow our O&M portfolio, help self-fund our development activity through the sale or contribution of newly developed assets to these vehicles and generate substantial management fees. We raise capital to support the long-term growth of these ventures while maintaining significant investments of our own.
Walmart 0.7 6 8. UPS 0.8 9 9. Lululemon 0.7 2 9. Maersk 0.8 7 10. GigaCloud 0.7 3 10. Kuehne + Nagel 0.7 9 Top 10 Customers 15.9 89 Top 10 Customers 14.3 152 11. Pepsi 0.6 4 11. DVS A/S 0.7 8 12. GXO 0.6 4 12. Walmart 0.6 8 13. Wayfair 0.6 6 13.
Pepsi 0.7 4 8. UPS 0.9 10 9. DHL 0.7 3 9. CEVA Logistics 0.8 11 10. Lululemon 0.7 2 10. Walmart 0.7 9 Top 10 Customers 16.3 91 Top 10 Customers 15.2 160 11. GigaCloud 0.7 3 11. Kuehne + Nagle 0.7 8 12. DSV 0.7 3 12. Maersk 0.7 6 13. NFI Industries 0.7 3 13.
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, that is comprised of 95% open-ended ventures, long-term ventures and two publicly traded vehicles (Nippon Prologis REIT, Inc. in Japan and FIBRA Prologis, which controls Terrafina, also a publicly traded FIBRA in Mexico).
The business is capitalized through private and public equity, and is comprised of 94% 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 (which controls and owns more than 99% of Terrafina, also a publicly traded FIBRA).
We plan to grow this business and increase revenues by increasing our assets under management in existing or new ventures. 6 Table of Contents FUTURE GROWTH We believe that the quality and scale of our portfolio, our ability to develop our land bank and redevelopment sites, 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.
Promote revenue is recognized when earned, either at the end of the promote period or upon liquidation or stabilization. 6 Table of Contents 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.
Amounts represent our total expected investment (“TEI”) upon stabilization, which includes the estimated cost of development or expansion, including land, construction and leasing costs. 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.
Amounts represent our total expected 5 Table of Contents investment (“TEI”) upon stabilization, which includes the estimated cost of development or expansion, including land, construction and leasing costs.
Our customer experience teams, proprietary technology and strategic partnerships are foundational to all aspects of our Prologis Essentials offerings. These resources allow us to provide our customers with unique and actionable insights and tools to help them make progress on sustainability goals and drive greater efficiency in their operations.
Our customer experience teams, proprietary technology and strategic partnerships are central to every aspect of the Prologis Essentials platform. These resources allow us to provide customers with differentiated insights and infrastructure solutions to help them advance sustainability goals and improve operational efficiency.
Proceeds from property dispositions, generally achieved by contributing newly developed properties to our co-investment ventures and selling of non-strategic properties to third parties, enable us to recycle capital back into our ongoing investment activities.
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.
We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. For leases that commenced during 2024 within the consolidated operating portfolio, the weighted average lease term was 64 months. We expect to generate earnings growth by increasing rents, maintaining high occupancy rates and controlling expenses.
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 leases commenced in 2025, the weighted average lease term in our consolidated operating portfolio was 70 months. We expect to generate earnings growth by increasing rents, maintaining high occupancy rates and controlling expenses.
We have scalable systems and infrastructure in place to grow both our consolidated and O&M portfolios with limited incremental G&A expense. We use adjusted G&A expenses as a percentage of the O&M portfolio (based on gross book value) to measure and evaluate the overhead costs associated with the O&M portfolio.
We have scalable systems and infrastructure in place to grow both our consolidated and O&M portfolios with limited incremental G&A expenses, allowing us to focus additions to our workforce in growth areas of the business.
We conduct annual pay equity analyses that aim to address differences in compensation not explained by relevant job factors. 10 Table of Contents The following charts display our workforce demographics by levels of seniority at December 31, 2024: (1) Managers include employees with manager, director or vice president titles. Senior leaders include employees with senior vice president or higher titles.
The following charts display our workforce demographics by levels of seniority at December 31, 2025: Women, 2025 (1) People of Color (U.S. only), 2025 (1) (1) Managers include employees with manager, director or vice president titles. Senior leaders include employees with senior vice president or higher titles.
To fund our sustainable development activities, we have utilized the proceeds from certain senior notes issuances to finance green projects eligible under our green bond framework.
At December 31, 2025, we had 1.1 gigawatts of solar generation and storage capacity on our O&M portfolio, including Prologis and third-party owned projects. To fund our sustainable development activities, we utilized the proceeds from certain senior notes issuances to finance green projects eligible under our green bond framework.
Our Board independence and diversity, open communication with our stockholders and risk management framework that supports our investment and process decisions all serve to mitigate risk and preserve value for our company. 12 Table of Contents Over the past ten years we have onboarded seven new directors with a breadth of experience, increasing the ethnic, gender and geographical diversity of the Board.
Governance Practices We strive to promote a culture of uncompromising integrity, including through our governance practices and corporate oversight. Our Board independence and diversity, open communication with our stockholders and risk management framework that supports our investment and process decisions, all serve to mitigate risk and preserve value for our company.
We invest significant capital into new logistics properties through acquisitions and development activity, including both built-to-suit and speculative development and redevelopment of properties into industrial properties and data centers.
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.
We provide workplace flexibility with accountability as determined by role. For those employees who work on-site, we have protocols in place to help ensure a safe working environment. We continue to attract and retain talent in the industry through competitive compensation, a robust benefits package, pathways to career advancement, talent recognition and individual development planning.
We continue to attract and retain talent in the industry through competitive compensation, a robust benefits package, pathways to career advancement, talent recognition and individual development planning. We conduct annual pay equity analyses and aim to address differences in compensation not explained by relevant job factors.
THE COMPANY Prologis is the global leader in logistics real estate with a focus on high-barrier, high growth markets. We own, manage and develop well-located, high-quality logistics facilities in 20 countries across four continents.
THE COMPANY 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 3 Table of Contents of goods.
Competitively priced logistics space could impact our occupancy rates and have an adverse effect on how much rent we can charge, which in turn could affect our operating results. We face competition regarding our capital deployment activities, including regional, national and global operators and developers. We also face competition from investment managers for institutional capital within our strategic capital business.
We also face competition in our capital deployment business from regional, national and global operators and developers, and in our strategic capital business from investment and asset managers seeking institutional capital.
We raise capital to support the long-term growth of the co-investment ventures while maintaining our own substantial investments in these vehicles. At December 31, 2024, the gross book value of the operating portfolio held by our nine unconsolidated co-investment ventures was $56.3 billion across 548 million square feet. (1) G&A Expenses is a line item in the Consolidated Financial Statements.
At December 31, 2025, the gross book value of the operating portfolio held by our ten unconsolidated co-investment ventures was $62.4 billion across an aggregate of 562 million square feet.
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Our portfolio centers on the world’s most vibrant centers of commerce and our scale across these locations allows us to better serve our customers’ diverse logistics requirements. 3 Table of Contents Logistics supply chains remain essential to our customers and the global economy.
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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.
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Long-term trends, including the growth of e-commerce and modernization of the supply chain, continue to drive demand toward creating supply chain resiliency through leasing additional space to store and distribute goods. This sustained demand has contributed to meaningful rent growth and low vacancy rates in recent years.
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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.
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We believe this demand is driven by three primary factors: (i) the re-positioning of our customer supply chains to accommodate the shift toward e-commerce and heightened service expectations; (ii) growth in overall consumption and households; and (iii) our customers’ increased focus on building supply chain efficiency.
Added
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.
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We believe these factors will sustain demand and low vacancy rates over the long term. In the near term, our proprietary metrics reveal renewed activity in customer leasing decisions as we entered 2025 despite the current economic and geopolitical environment. Our teams actively manage our portfolio by providing comprehensive real estate services, including leasing, property management, development, acquisitions and dispositions.
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We believe these factors will continue to support demand for logistics space and relatively low vacancy rates over the long term. In the near term, while economic uncertainty related to trade tensions and shifting policies has increased, our proprietary metrics and customer dialogue indicate that customers are engaged and moving forward with real estate decisions.
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As the majority of our investments are in unconsolidated co-investment ventures, this structure allows us to reduce our exposure to foreign currency movements for investments outside the U.S. Management of the unconsolidated co-investment ventures comprises our Strategic Capital Segment.
Added
We have more than 1 gigawatt of solar generation and storage capacity on our O&M portfolio, including Prologis and third-party owned projects.
Removed
Promote revenues are recognized when earned at the end of the promote period for the specific co-investment ventures.
Added
(3) Net promote income (expense) is promote revenue earned from third-party investors during the period, net of related cash and stock compensation expenses, and taxes and foreign currency derivative gains and losses, if applicable. In 2025, we had net promote expense primarily from amortization of stock compensation issued to employees related to promote income recognized in prior periods.
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The global nature of our development program provides a wide landscape of opportunities to pursue based on our judgment of market conditions, opportunities and risks. One of the ways in which we create value is through our focus on sourcing well-located land and redevelopment sites through acquisition opportunities.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe real estate development, renovation and redevelopment business includes the following significant risks: • we may not be able to obtain financing for development projects on favorable terms or at all; • we may explore development opportunities that may be abandoned and the related investment impaired; • we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations, or sufficient, reliable power for our data centers; • we may incur higher construction costs, due primarily to this inflationary environment, or additional costs related to regulation that 17 Table of Contents exceed our estimates and projects may not be completed, delivered or stabilized as planned due to defects or other issues; • we may not be able to attract third-party investment in new development co-investment ventures or sufficient customer demand for our product; • we may have properties that perform below anticipated levels, producing cash flows below budgeted amounts; • we may seek to sell certain land parcels and not be able to find a third party to acquire such land or the sales price will not allow us to recover our investment, resulting in impairment charges; • we may not be able to lease properties we develop on favorable terms or at all; • we may not be able to capture the anticipated enhanced value created by our value-added properties on expected timetables or at all; • we may experience delays (temporary or permanent) if there is public or government opposition to our activities; and • we may have substantial renovation, new development and redevelopment activities, regardless of their ultimate success, that require a significant amount of management’s time and attention, diverting their attention from our day-to-day operations.
Biggest changeThe real estate development, renovation and redevelopment business includes the following significant risks: • we may not be able to obtain financing for development projects on favorable terms or at all; • we may explore development opportunities that may be abandoned and the related investment impaired; • we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other permits, authorizations and agreements from governmental authorities or utilities for our development projects, including as related to obtaining sufficient or reliable power for our data centers; • we may incur higher construction and other costs for our development projects, due primarily to this inflationary environment, along with the evolving technological demands for data centers, which are more power-intensive, or additional costs related to regulation that exceed our estimates and projects may not be completed, delivered or stabilized as planned due to defects or other issues; • even if power is secured for our data center developments, unanticipated disruptions to the supply of such power (including initial delivery delays) or increases in the cost of such power due to impacts from local regulatory changes, availability of fuel sources, or natural disasters, could impact our ability to lease or sell such assets as intended; • we may not be able to attract third-party investment in new development co-investment ventures or sufficient customer demand for our product; • we may have properties that perform below anticipated levels, producing cash flows below budgeted amounts; • we may seek to sell certain land parcels and not be able to find a third party to acquire such land or the sales price will not allow us to recover our investment, resulting in impairment charges; • we may not be able to lease properties we develop on favorable terms or at all; • we may not be able to capture the anticipated enhanced value created by our value-added properties on expected timetables or at all; • we may experience delays (temporary or permanent) if there is public or government opposition to our activities; and • we may have substantial renovation, new development and redevelopment activities, regardless of their ultimate success, that require a significant amount of management’s time and attention, diverting their attention from our day-to-day operations. 17 Table of Contents We are subject to risks and liabilities in connection with forming and attracting third-party investment in co-investment ventures, investing in new or existing co-investment ventures, and managing properties through co-investment ventures.
Our O&M portfolio, which includes our consolidated properties and properties owned by our unconsolidated co-investment ventures, has concentrations of properties in the same markets mentioned above, as well as in markets in Japan, Mexico, and the U.K., and are subject to the economic conditions in those markets.
Our O&M portfolio, which includes our consolidated properties and properties owned by our unconsolidated co-investment ventures, has concentrations of properties in the same markets mentioned above, as well as in markets in Germany, Japan, Mexico and the U.K., and are subject to the economic conditions in those markets.
Certain losses, however, including losses from floods, earthquakes, acts of war, acts of terrorism or riots and pandemics, generally are not insured against or not fully insured against because it is not deemed economically feasible or prudent to do so.
Certain losses, however, including losses from earthquakes, acts of war, acts of terrorism or riots and pandemics, generally are not insured against or not fully insured against because it is not deemed economically feasible or prudent to do so.
Factors that may affect real estate values and cash flows include: • local conditions, such as oversupply or a reduction in demand; • technological changes, such as reconfiguration of supply chains, autonomous vehicles, robotics, 3D printing or other technologies; • the attractiveness of our properties to potential customers and competition from other available properties; • increasing costs of maintaining, insuring, renovating and making improvements to our properties; • our ability to reposition our properties due to changes in the business and logistics needs of our customers; 16 Table of Contents • our ability to lease the properties at favorable rates and control variable operating costs; and • governmental and environmental regulations and the associated potential liability under, and changes in, environmental, zoning, usage, tax, tariffs and other laws.
Factors that may affect real estate values and cash flows include: • local conditions, such as oversupply or a reduction in demand; • technological changes, such as reconfiguration of supply chains, autonomous vehicles, robotics, 3D printing or other technologies; • the attractiveness of our properties to potential customers and competition from other available properties; • increasing costs of maintaining, insuring, renovating and making improvements to our properties; • our ability to reposition our properties due to changes in the business and logistics needs of our customers; • our ability to lease the properties at favorable rates and control variable operating costs; and • governmental and environmental regulations and the associated potential liability under, and changes in, environmental, zoning, usage, tax, tariffs and other laws.
Circumstances and developments related to international operations that could negatively impact us include, but are not limited to, the following factors: • difficulties and costs of staffing and managing international operations in certain geographies, including differing employment practices and labor issues; • local businesses and cultural factors that differ from our domestic standards and practices; • volatility in currencies and currency restrictions, which may prevent the availability of capital or the transfer of profits to the U.S.; • challenges in establishing effective controls and procedures to regulate operations in different geographies and to monitor compliance with applicable regulations, such as the Foreign Corrupt Practices Act, the United Kingdom (“U.K.”) Bribery Act and other similar laws; • changes in regulatory and environmental requirements, taxes, tariffs, trade wars and laws within the countries in which we operate; • the responsibility of complying with multiple and potentially conflicting laws, such as those regarding corrupt practices, human rights, employment and licensing; • changes in general economic conditions due to inflation, elevated interest rates, regional or country-specific business cycles, supply chain disruptions, economic downturns or recessions and economic instability, including government shutdowns and withdrawals from the European Union or other international trade alliances or agreements; • political instability, uncertainty over property rights, territorial disputes, military conflict, war or expansion of hostilities, civil unrest, drug trafficking, political activism or the continuation or escalation of terrorist or gang activities; • public health crises, such as outbreaks of global pandemics or contagious diseases; • foreign ownership restrictions in operations with the respective countries; and • access to capital may be more restricted, or unavailable on favorable terms or at all in certain locations.
Circumstances and developments related to international operations that could negatively impact us include, but are not limited to, the following factors: • difficulties and costs of staffing and managing international operations in certain geographies, including differing employment practices and labor issues; • local businesses and cultural factors that differ from our domestic standards and practices; • volatility in currencies and currency restrictions, which may prevent the availability of capital or the transfer of profits to the U.S.; • challenges in establishing effective controls and procedures to regulate operations in different geographies and to monitor compliance with applicable regulations, such as the Foreign Corrupt Practices Act, the United Kingdom (“U.K.”) Bribery Act and other similar laws; • changes in regulatory and environmental requirements, taxes, tariffs, trade wars and laws within the countries in which we operate; • the responsibility of complying with multiple and potentially conflicting laws, such as those regarding corrupt practices, human rights, employment and licensing; • changes in general economic conditions due to inflation, elevated interest rates, regional or country-specific business cycles, supply chain disruptions, economic downturns or recessions and economic instability, including government shutdowns and withdrawals from the European Union or other international trade alliances or agreements; 13 Table of Contents • political instability, uncertainty over property rights, territorial disputes, military conflict, war or expansion of hostilities, civil unrest, drug trafficking, political activism or the continuation or escalation of terrorist or gang activities; • public health crises, such as outbreaks of global pandemics or contagious diseases; • changes in technological advances, including the increasing adoption of AI; • foreign ownership restrictions in operations with the respective countries; and • access to capital may be more restricted, or unavailable on favorable terms or at all in certain locations.
Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for our internal and hosted information technology systems, our systems are vulnerable to damages from any number of sources, including energy blackouts, natural disasters, terrorism, war, telecommunication failures and cybersecurity attacks, such as malware, ransomware, or unauthorized access.
Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for our internal and hosted information technology systems, our systems are vulnerable to damages from any number of sources, including energy blackouts, natural disasters, terrorism, war, adverse impacts of AI, telecommunication failures and cybersecurity attacks, such as malware, ransomware, or unauthorized access.
While we endeavor to manage this risk through our hedging and financing activities, a significant change in the value of the foreign currency of one or more countries where we have a significant investment may have a material adverse effect on our business and, specifically, our U.S. dollar reported financial position and results of operations.
While we endeavor to manage this risk through our hedging and financing activities, a significant change 14 Table of Contents in the value of the foreign currency of one or more countries where we have a significant investment may have a material adverse effect on our business and, specifically, our U.S. dollar reported financial position and results of operations.
Any such losses or higher insurance costs could adversely affect our business. A number of our investments, both wholly owned and owned through co-investment ventures, are located in areas that are known to be subject to earthquake activity. U.S. properties located in active seismic areas include properties in our markets in California and Washington.
Any such losses or higher insurance costs could adversely affect our business. 19 Table of Contents A number of our investments, both wholly owned and owned through co-investment ventures, are located in areas that are known to be subject to earthquake activity. U.S. properties located in active seismic areas include properties in our markets in California and Washington.
If we default under the covenant provisions and are unable to cure the default, refinance the indebtedness or meet payment obligations, our business and financial condition generally and, in particular, the amount of our distributable cash flow could be adversely affected. Adverse changes in our credit ratings could negatively affect our financing activity.
If we default under the covenant provisions and are unable to cure the default, refinance the indebtedness or meet payment obligations, our business and financial condition generally and, in particular, the amount of our distributable cash flow could be adversely affected. 20 Table of Contents Adverse changes in our credit ratings could negatively affect our financing activity.
These laws may impose fines and penalties on building owners or operators who fail to comply with these requirements and may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos. Some of our properties are known to contain asbestos-containing building materials.
These laws may impose fines and penalties on building owners or operators who fail to comply with these requirements and 18 Table of Contents may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos. Some of our properties are known to contain asbestos-containing building materials.
To qualify as a REIT, the subsidiary REIT must independently satisfy all of the REIT qualification requirements. If such subsidiary REIT were to fail to qualify as a REIT, and certain relief provisions did not apply, it would be treated as a regular taxable corporation and its income would be subject to U.S. federal income tax.
To qualify as a REIT, the subsidiary REIT must independently satisfy all of the REIT qualification requirements. If such subsidiary REIT were to fail to qualify 21 Table of Contents as a REIT, and certain relief provisions did not apply, it would be treated as a regular taxable corporation and its income would be subject to U.S. federal income tax.
These entities bear their own risks related to trading markets, foreign currency exchange rates and market demand. We have contributed, and may continue to contribute assets into such vehicles. There is a risk that our managerial relationship may be terminated. 18 Table of Contents We have also made investments in early and growth-stage companies that are focused on emerging technology.
These entities bear their own risks related to trading markets, foreign currency exchange rates and market demand. We have contributed, and may continue to contribute assets into such vehicles. There is a risk that our managerial relationship may be terminated. We have also made investments in early and growth-stage companies that are focused on emerging technology.
These short-term 20 Table of Contents borrowing needs could result from differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes, or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments.
These short-term borrowing needs could result from differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes, or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments.
Any prolonged economic downturn, disruption in the financial markets or public health crises may also impact our ability to access capital markets to issue debt or equity securities and to complete real estate transactions at attractive pricing or at all. 14 Table of Contents Compliance or failure to comply with regulatory requirements could result in substantial costs.
Any prolonged economic downturn, disruption in the financial markets or public health crises may also impact our ability to access capital markets to issue debt or equity securities and to complete real estate transactions at attractive pricing or at all. Compliance or failure to comply with regulatory requirements could result in substantial costs.
The acquisition of properties involves risks, including the risk that the acquired property will not perform as anticipated and that any actual costs for rehabilitation, repositioning, renovation and improvements identified in the pre-acquisition due diligence process will exceed estimates.
The acquisition of 16 Table of Contents properties involves risks, including the risk that the acquired property will not perform as anticipated and that any actual costs for rehabilitation, repositioning, renovation and improvements identified in the pre-acquisition due diligence process will exceed estimates.
The co-investment ventures or third parties who might acquire our properties may need to have access to debt and equity capital, in the private and public markets, in order to acquire properties from us. Should they have limited or no access to capital on favorable terms, then dispositions and contributions could be delayed.
The co-investment ventures or third parties who might acquire our properties may need to have 15 Table of Contents access to debt and equity capital, in the private and public markets, in order to acquire properties from us. Should they have limited or no access to capital on favorable terms, then dispositions and contributions could be delayed.
Additionally, there is, and it is expected there will continue to be, significant competition for properties that meet our investment criteria as well as risks associated with obtaining financing for acquisition activities.
Additionally, there is, and we expect that there will continue to be, significant competition for properties that meet our investment criteria as well as risks associated with obtaining financing for acquisition activities.
Our operating results and distributable cash flow would be adversely affected if a significant number of our customers were unable to meet their lease obligations. At December 31, 2024, our top 10 customers accounted for 15.9% of our consolidated NER and 14.3% of our O&M NER.
Our operating results and distributable cash flow would be adversely affected if a significant number of our customers were unable to meet their lease obligations. At December 31, 2025, our top 10 customers accounted for 16.3% of our consolidated NER and 15.2% of our O&M NER.
At December 31, 2024, 30.6% of our consolidated operating properties or $24.0 billion (based on consolidated gross book value, or investment before depreciation) were located in California (Central Valley, San Francisco Bay Area and Southern California markets), which represented 23.4% of the aggregate square footage of our operating properties and 31.8% of our consolidated operating property NOI.
At December 31, 2025, 30.6% of our consolidated operating properties or $24.7 billion (based on consolidated gross book value, or investment before depreciation) were located in California (Central Valley, San Francisco Bay Area and Southern California markets), which represented 23.6% of the aggregate square footage of our operating properties and 31.9% of our consolidated operating property NOI.
We generally seek to maintain sufficient influence over our co-investment ventures to permit us to achieve our business objectives; however, we may not be able to continue to do so indefinitely. We have formed publicly traded investment vehicles, such as NPR and FIBRA Prologis, for which we serve as sponsor or manager.
We generally seek to maintain sufficient influence over our co-investment ventures to permit us to achieve our business objectives; however, we may not be able to continue to do so indefinitely. We have formed publicly traded investment vehicles, such as Nippon Prologis REIT, Inc., China AMC Prologis Logistics REIT and FIBRA Prologis, for which we serve as sponsor or manager.
For the year ended December 31, 2024, $382.7 million or 6.3% of our total consolidated segment NOI was denominated in a currency other than the U.S. dollar. See Note 17 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for more information on these amounts.
For the year ended December 31, 2025, $432.8 million, or 6.6% of our total consolidated segment NOI, was denominated in a currency other than the U.S. dollar. See Note 16 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for more information on these amounts.
We hold significant real estate investments in international markets where the U.S. dollar is not the functional currency. At December 31, 2024, approximately $11.5 billion or 12.1% of our total consolidated assets were invested in a currency other than the U.S. dollar, principally the British pound sterling, Canadian dollar, euro and Japanese yen.
We hold significant real estate investments in international markets where the U.S. dollar is not the functional currency. At December 31, 2025, approximately $13.7 billion, or 13.8% of our total consolidated assets, were invested in a currency other than the U.S. dollar, principally the British pound sterling, Canadian dollar, euro and Japanese yen.
Additionally, remediation costs for security events may not be covered by our insurance. 19 Table of Contents Our insurance coverage does not cover all potential losses.
Additionally, remediation costs for security events may not be covered by our insurance. Our insurance coverage does not cover all potential losses.
Our business and operations could suffer in the event of system failures or cybersecurity attacks.
Our business and operations could suffer in the event of system failures, cybersecurity attacks or risks associated with AI.
Historically, we have satisfied these distribution requirements 21 Table of Contents by making cash distributions to our stockholders, but we may choose to satisfy these requirements by making distributions of cash or other property, including, in limited circumstances, our own stock.
Historically, we have satisfied these distribution requirements by making cash distributions to our stockholders, but we may choose to satisfy these requirements by making distributions of cash, stock or other property.
Third-party security events at vendors, sub-processors, and service providers could also impact our data and operations through unauthorized access to information or disruption of services which may ultimately result in losses. Despite training, detection systems and response procedures, an increase in email attacks (phishing and business email compromise) may create disruption to our business, financial and reputational risk.
Third-party security events at vendors, sub-processors, and service providers could also impact our data and operations through unauthorized access to information or disruption of services which may ultimately result in losses.
Because of the investment we have located in California, a downturn in California’s economy or real estate conditions, including state income tax and property tax laws, could adversely affect our business. 15 Table of Contents In addition to California, we also have significant holdings (defined as more than 3% of total consolidated investment before depreciation) in operating properties in certain markets located in Atlanta, Chicago, Dallas/Fort Worth, Houston, Lehigh Valley, New Jersey/New York City, Seattle and South Florida.
In addition to California, we also have significant holdings (defined as more than 3% of total consolidated investment before depreciation) in operating properties in certain markets located in Atlanta, Chicago, Dallas/Fort Worth, Houston, Lehigh Valley, New Jersey/New York City, Seattle and South Florida.
Our credit ratings at December 31, 2024 were A from Standard & Poor's with a stable outlook and A3 from Moody's with a positive outlook. A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization.
At December 31, 2025, our credit ratings were A from Standard and Poor's and A2 from Moody's, both with stable outlooks. 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.
These risks relate to Prologis as well as our investments in consolidated and unconsolidated entities and include among others, (i) risks related to our global operations (ii) risks related to our business; (iii) risks related to financing and capital; and (iv) risks related to income taxes. 13 Table of Contents Risks Related to our Global Operations As a global company, we are subject to social, geopolitical and economic risks associated with conducting business in many countries and our results of operations and financial condition may be materially and adversely affected.
These risks relate to Prologis as well as our investments in consolidated and unconsolidated entities and include among others, (i) risks related to our global operations; (ii) risks related to our business; (iii) risks related to financing and capital; and (iv) risks related to income taxes.
We are subject to risks and liabilities in connection with forming and attracting third-party investment in co-investment ventures, investing in new or existing co-investment ventures, and managing properties through co-investment ventures. At December 31, 2024, we had investments in co-investment ventures, both public and private, that owned real estate with a gross book value of approximately $67.3 billion.
At December 31, 2025, we had investments in co-investment ventures, both public and private, that owned real estate with a gross book value of approximately $73.8 billion.
We conduct a significant portion of our business and employ a substantial number of people outside of the U.S. During 2024, we generated approximately $688 million or 8.4% of our consolidated revenues from operations outside the U.S.
During 2025, we generated approximately $788 million, or 9.0% of our consolidated revenues, from operations outside the U.S.
Added
Risks Related to our Global Operations As a global company, we are subject to social, geopolitical and economic risks associated with conducting business in many countries and our results of operations and financial condition may be materially and adversely affected. We conduct a significant portion of our business and employ a substantial number of people outside of the U.S.
Added
Because of the investment we have located in California, a downturn in California’s economy or real estate conditions, including state income tax and property tax laws, could adversely affect our business.
Added
Despite training, detection systems and response procedures, an increase in email attacks (phishing and business email compromise) and the rise in use of AI tools may create disruption to our business, financial and reputational risk.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−1 removed10 unchanged
Biggest changeThe processes implemented by our IT leadership and IRT to oversee and identify cybersecurity risks are based on the Prologis Information Security Policy governed by the United States National Institute of Standards and Technology Cybersecurity Framework.
Biggest changeAdditionally, on an annual basis the IRT is involved and engaged in security initiatives, including tabletop exercises facilitated both internally and externally, to stay relevant on current practices in the areas of cybersecurity. 22 Table of Contents The processes implemented by our IT leadership and IRT to oversee and identify cybersecurity risks are based on the Prologis Information Security Policy governed by the United States National Institute of Standards and Technology Cybersecurity Framework.
Please refer to “ Our business and operations could suffer in the event of system failures or cybersecurity attacks ” under Item 1A. Risk Factors.
Please refer to “ Our business and operations could suffer in the event of system failures, cybersecurity attacks or risks associated with AI ” under Item 1A. Risk Factors.
The framework focuses on five key categories of cybersecurity risk management and governance: (i) identify: develop an organizational understanding to manage cybersecurity risk to systems, people, assets, data and capabilities; (ii) protect: develop and implement appropriate safeguards to ensure delivery of critical services; (iii) detect: develop and implement appropriate activities to identify the occurrence of a cybersecurity event; (iv) respond: develop and implement appropriate activities to take actions regarding a detected cybersecurity incident; and (v) recover: develop and implement appropriate activities to maintain plans for resilience and to restore any capabilities or service that were impaired due to a cybersecurity incident.
The framework focuses on six key categories of cybersecurity risk management and governance: (i) govern: establish and monitor risk management strategy, expectations and policies to ensure accountability and informed decision-making across the organization; (ii) identify: develop an organizational understanding to manage cybersecurity risk to systems, people, assets, data and capabilities; (iii) protect: develop and implement appropriate safeguards to ensure delivery of critical services; (iv) detect: develop and implement appropriate activities to identify the occurrence of a cybersecurity event; (v) respond: develop and implement appropriate activities to take actions regarding a detected cybersecurity incident; and (vi) recover: develop and implement appropriate activities to maintain plans for resilience and to restore any capabilities or service that were impaired due to a cybersecurity incident.
Removed
Additionally, on an annual basis the IRT is involved and engaged in security initiatives, including tabletop exercises facilitated both internally and externally, to stay relevant on current practices in the areas of cybersecurity.

Item 2. Properties

Properties — owned and leased real estate

17 edited+3 added−2 removed6 unchanged
Biggest change(18 markets) (2) 160 14,140 64 195 17,077 Subtotal U.S. 620 75,770 153 754 90,734 Other Americas: Brazil * 45 - 19 865 Canada 13 1,202 125 13 1,202 Mexico 1 59 - 66 5,165 Subtotal Other Americas 14 1,306 125 98 7,232 Europe: France 1 57 - 36 3,421 Germany * 13 - 33 3,470 Netherlands * 26 - 30 3,189 U.K. 2 344 - 33 8,069 Remaining Countries – Europe (8 countries) (2) 3 328 - 104 8,328 Subtotal Europe 6 768 - 236 26,477 Asia: China - - - 52 2,934 Japan 3 265 - 51 7,009 Singapore 1 141 - 1 141 Subtotal Asia 4 406 - 104 10,084 Total operating portfolio (3) 644 78,250 278 1,192 134,527 Value-added properties (4) 2 255 - 5 645 Total operating properties 646 $ 78,505 $ 278 1,197 $ 135,172 Items notated by ‘*’ indicate an amount less than one million that rounds to zero. 24 Table of Contents Consolidated – Investment in Land Consolidated – Development Portfolio Geographies Acres Estimated Build Out Potential (square feet) (5) Current Investment Rentable Square Footage Upon Completion TEI (6) U.S.: Atlanta 464 5 $ 53 1 $ 162 Baltimore/Washington D.C. 120 1 62 - - Central Valley 802 13 206 1 68 Chicago 84 1 24 * 63 Dallas/Ft.
Biggest change(18 markets) (2) 157 14,291 62 194 17,694 Subtotal U.S. 617 76,873 153 756 92,982 Other Americas: Brazil 1 77 - 20 1,028 Canada 13 1,453 - 13 1,453 Mexico 2 142 - 68 5,493 Subtotal Other Americas 16 1,672 - 101 7,974 Europe: France 1 39 - 36 3,899 Germany * 37 - 38 4,855 Netherlands 1 86 - 31 3,844 U.K. 2 459 - 34 8,801 Remaining Countries – Europe (8 countries) (2) 4 436 - 106 9,822 Subtotal Europe 8 1,057 - 245 31,221 Asia: China - - - 53 3,005 India * 18 - * 18 Japan 3 273 - 51 7,086 Singapore 1 150 - 1 150 Subtotal Asia 4 441 - 105 10,259 Total operating portfolio (3) 645 80,043 153 1,207 142,436 Value-added properties (4) 4 687 - 6 968 Total operating properties 649 $ 80,730 $ 153 1,213 $ 143,404 Items notated by ‘*’ indicate an amount less than one million that rounds to zero. 24 Table of Contents Consolidated – Investment in Land Consolidated – Development Portfolio Geographies Acres Estimated Build Out Potential (square feet) (5) Current Investment Rentable Square Footage Upon Completion TEI (6) U.S.: Atlanta 319 3 $ 44 2 $ 239 Baltimore/Washington D.C. 111 1 83 * 66 Central Valley 633 10 203 3 402 Chicago 84 1 24 - - Dallas/Ft.
The O&M portfolio includes the properties we consolidate and the properties owned by our unconsolidated co-investment ventures reflected at 100% of the amount included in the ventures’ financial statements as calculated on a GAAP basis, not our proportionate share. 23 Table of Contents Included in the operating property information below for our consolidated operating properties are 542 buildings owned primarily by one co-investment venture that we consolidate but of which we own less than 100% of the equity.
The O&M portfolio includes the properties we consolidate and the properties owned by our unconsolidated co-investment ventures reflected at 100% of the amount included in the ventures’ financial statements as calculated on a GAAP basis, not our proportionate share. 23 Table of Contents Included in the operating property information below for our consolidated operating properties are 541 buildings owned primarily by one co-investment venture that we consolidate but of which we own less than 100% of the equity.
These are excluded from 2025 expirations and are reflected at their respective expiration year. 26 Table of Contents CO-INVEST MENT VENTURES Included in our O&M portfolio are consolidated and unconsolidated co-investment ventures that hold investments in real estate properties, primarily logistics facilities, that we also manage. Our unconsolidated co-investment ventures are accounted for under the equity method.
These are excluded from 2026 expirations and are reflected at their respective expiration year. 26 Table of Contents CO-INVEST MENT VENTURES Included in our O&M portfolio are consolidated and unconsolidated co-investment ventures that hold investments in real estate properties, primarily logistics facilities, that we also manage. Our unconsolidated co-investment ventures are accounted for under the equity method.
In addition to the amounts reflected here, we also have $41 million of encumbrances related to one land parcel included in the consolidated portfolio. (2) No remaining market within the U.S. or country within Europe represented more than 2% of the total gross book value of the consolidated and O&M operating properties.
In addition to the amounts reflected here, we also have $43 million of encumbrances related to one land parcel included in the consolidated portfolio. (2) No remaining market within the U.S. or country within Europe represented more than 2% of the total gross book value of the consolidated and O&M operating properties.
The following table summarizes our consolidated and unconsolidated co-investment ventures at December 31, 2024 (in millions): Operating Properties Square Feet Gross Book Value Investment in Land Development Portfolio – TEI Consolidated Co-Investment Venture U.S.: Prologis U.S.
The following table summarizes our consolidated and unconsolidated co-investment ventures at December 31, 2025 (in millions): Operating Properties Square Feet Gross Book Value Investment in Land Development Portfolio – TEI Consolidated Co-Investment Venture U.S.: Prologis U.S.
No individual property or market amounted to 10% or more of our consolidated total assets at December 31, 2024, or generated revenue equal to 10% or more of our consolidated total revenues for the year ended December 31, 2024, with the exception of the Southern California market.
No individual property or market amounted to 10% or more of our consolidated total assets at December 31, 2025, or generated revenue equal to 10% or more of our consolidated total revenues for the year ended December 31, 2025, with the exception of the Southern California market.
(6) TEI is based on current projections and is subject to change. As noted in the table below, our current investment in the development portfolio was $2.8 billion, leaving approximately $1.9 billion of additional required investment.
(6) TEI is based on current projections and is subject to change. As noted in the table below, our current investment in the development portfolio was $3.0 billion, leaving approximately $1.8 billion of additional required investment.
LEASE EXPIRATIONS We generally lease our properties on a long-term basis (the weighted average term for leases commenced, including new leases and renewals, in 2024 was 64 months).
LEASE EXPIRATIONS We generally lease our properties on a long-term basis (the weighted average term for leases commenced, including new leases and renewals, in 2025 was 70 months).
At December 31, 2024, we had investments in real estate properties that were expected to be contributed to our unconsolidated co-investment ventures totaling $226 million and aggregating 2 million square feet. See Note 6 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for further information on our Assets Held for Sale or Contribution.
At December 31, 2025, we had investments in real estate properties that were expected to be contributed to our unconsolidated co-investment ventures totaling $169 million and aggregating 1 million square feet. See Note 5 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for further information on our Assets Held for Sale or Contribution.
Dollars and square feet in the following tables are in millions: Consolidated Operating Properties O&M Geographies Rentable Square Footage Gross Book Value Encumbrances (1) Rentable Square Footage Gross Book Value U.S.: Atlanta 45 $ 3,792 $ - 52 $ 4,399 Baltimore/Washington D.C. 14 1,988 - 18 2,625 Central Valley 21 1,841 - 23 1,990 Chicago 54 5,166 - 70 6,753 Dallas/Ft.
Dollars and square feet in the following tables are in millions: Operating Properties Consolidated O&M Geographies Rentable Square Footage Gross Book Value Encumbrances (1) Rentable Square Footage Gross Book Value U.S.: Atlanta 45 $ 3,842 $ - 52 $ 4,491 Baltimore/Washington D.C. 14 2,076 - 18 2,777 Central Valley 21 1,836 - 23 1,985 Chicago 52 5,060 - 70 6,842 Dallas/Ft.
The following table summarizes our investment in consolidated real estate properties at December 31, 2024 (in millions): Investment Before Depreciation Operating properties, excluding assets held for sale or contribution $ 78,279 Development portfolio, including cost of land 2,829 Land 4,454 Other real estate investments (1) 5,684 Total consolidated real estate properties $ 91,246 (1) Included in other real estate investments were principally: (i) land parcels we own and lease to third parties; (ii) renewable energy assets, including solar panels and electric vehicle chargers, and energy storage systems; (iii) non-strategic real estate assets that we do not intend to operate long term; and (iv) non-industrial real estate assets that we intend to redevelop as industrial properties or data centers.
The following table summarizes our investment in consolidated real estate properties at December 31, 2025 (in millions): Investment Before Depreciation Operating properties, excluding assets held for sale or contribution $ 80,561 Development portfolio, including cost of land 3,019 Land 4,888 Other real estate investments (1) 6,661 Total consolidated real estate properties $ 95,129 (1) Included in other real estate investments were principally: (i) land parcels we own and lease to third parties; (ii) renewable energy assets, including solar, electric vehicle charging and energy storage; (iii) non-strategic real estate assets that we do not intend to operate long term; (iv) newly developed and stabilized data centers; and (v) non-industrial real estate assets that we intend to redevelop as industrial properties or data centers.
At December 31, 2024, based on TEI, approximately 20% of the properties in the development portfolio were completed but not yet stabilized, 60% of the properties were expected to be completed before December 31, 2025, and the remaining properties were expected to be 25 Table of Contents completed before July 2027.
At December 31, 2025, based on TEI, approximately 24% of the properties in the development portfolio were completed but not yet stabilized, 54% of the properties were expected to be completed before December 31, 2026, and the remaining properties were expected to be completed before September 2027.
Logistics Venture (“USLV”) 77 $ 8,279 $ 4 $ - Total 77 $ 8,279 $ 4 $ - Unconsolidated Co-Investment Ventures U.S.: Prologis Targeted U.S.
Logistics Venture (“USLV”) 78 $ 8,439 $ 5 $ - Total 78 $ 8,439 $ 5 $ - Unconsolidated Co-Investment Ventures U.S.: Prologis Targeted U.S.
The following table summarizes the lease expirations of our consolidated operating portfolio for leases in place at December 31, 2024 (dollars and square feet in millions): NER Occupied Square Feet Dollars % of Total Dollars Per Square Foot 2025 (1) 58 $ 430 8.0 % $ 7.41 2026 95 715 13.3 % 7.53 2027 101 820 15.3 % 8.12 2028 85 775 14.5 % 9.12 2029 78 744 13.9 % 9.54 2030 57 536 10.0 % 9.40 2031 31 252 4.7 % 8.13 2032 32 262 4.9 % 8.19 2033 22 213 4.0 % 9.68 2034 17 179 3.3 % 10.53 Thereafter 35 437 8.1 % 12.49 611 $ 5,363 100.0 % $ 8.78 Month to month 4 Total consolidated 615 (1) We have signed leases that were due to expire in 2025, totaling 28 million square feet in our consolidated portfolio (3.4% of total NER).
The following table summarizes the lease expirations of our consolidated operating portfolio for leases in place at December 31, 2025 (dollars and square feet in millions): NER Occupied Square Feet Dollars % of Total Dollars Per Square Foot 2026 (1) 71 $ 547 9.6 % $ 7.70 2027 104 854 14.9 % 8.21 2028 90 825 14.4 % 9.17 2029 82 783 13.7 % 9.55 2030 76 762 13.3 % 10.03 2031 54 506 8.8 % 9.37 2032 37 335 5.9 % 9.05 2033 29 284 5.0 % 9.79 2034 17 180 3.1 % 10.59 2035 20 255 4.5 % 12.75 Thereafter 33 395 6.8 % 11.97 613 $ 5,726 100.0 % $ 9.34 Month to month 3 Total consolidated 616 (1) We have signed leases that were due to expire in 2026, totaling 32 million square feet in our consolidated portfolio (4.2% of total NER).
Worth 51 4,637 - 60 5,510 Houston 32 3,327 - 38 3,872 Lehigh Valley 32 4,082 - 37 4,662 New Jersey/New York City 43 7,750 3 54 9,639 San Francisco Bay Area 23 3,883 20 28 4,574 Seattle 17 2,848 - 25 3,748 South Florida 22 3,993 59 29 5,183 Southern California 106 18,323 7 125 20,702 Remaining Markets – U.S.
Worth 52 4,748 - 61 5,630 Houston 31 3,251 - 37 3,802 Lehigh Valley 31 4,003 - 36 4,593 New Jersey/New York City 43 7,943 2 54 9,879 San Francisco Bay Area 24 4,150 19 29 4,951 Seattle 17 2,911 - 25 3,831 South Florida 22 4,076 63 30 5,371 Southern California 108 18,686 7 127 21,136 Remaining Markets – U.S.
(13 markets) 2,284 34 814 4 1,483 Subtotal U.S. 5,650 83 2,868 11 2,824 Other Americas: Brazil 605 13 211 - - Canada 272 5 442 2 292 Mexico 662 12 224 3 344 Subtotal Other Americas 1,539 30 877 5 636 Europe: France 181 4 132 * 21 Germany 33 1 21 * 46 Netherlands 55 1 52 1 172 U.K. 311 6 233 1 331 Remaining Countries – Europe (7 countries) 654 12 122 3 183 Subtotal Europe 1,234 24 560 5 753 Asia: Japan 89 5 95 3 465 India 196 5 54 * 28 Subtotal Asia 285 10 149 3 493 Total land and development portfolio 8,708 147 $ 4,454 24 $ 4,706 Items notated by ‘*’ indicate an amount less than one million that rounds to zero.
(15 markets) 2,289 33 866 3 1,055 Subtotal U.S. 5,511 77 2,886 11 2,561 Other Americas: Brazil 658 14 268 - - Canada 362 7 667 1 224 Mexico 743 14 292 2 224 Subtotal Other Americas 1,763 35 1,227 3 448 Europe: France 168 3 54 1 85 Germany 51 1 67 * 34 Netherlands 55 1 61 * 36 U.K. 270 6 210 2 743 Remaining Countries – Europe (7 countries) 635 12 154 2 153 Subtotal Europe 1,179 23 546 5 1,051 Asia: India 263 6 74 1 64 Japan 99 6 155 4 714 Subtotal Asia 362 12 229 5 778 Total land and development portfolio 8,815 147 $ 4,888 24 $ 4,838 Items notated by ‘*’ indicate an amount less than one million that rounds to zero.
This includes the development of data centers with an aggregate TEI of $0.9 billion, on a consolidated basis.
TEI excludes $262 million related to a development recorded as a note receivable that is 25 Table of Contents included in other real estate investments and includes the development of data centers with an aggregate TEI of $686 million, on a consolidated basis.
Removed
Worth 392 6 139 1 119 Houston 428 6 165 - - Lehigh Valley 105 1 38 - - New Jersey/New York City 168 2 364 1 286 San Francisco Bay Area 56 1 95 1 215 Seattle 61 1 54 * 76 South Florida 100 1 111 1 167 Southern California 586 11 743 1 185 Remaining Markets – U.S.
Added
Worth 495 7 192 - - Houston 400 6 164 * 46 Lehigh Valley 105 1 39 - - New Jersey/New York City 343 3 360 1 219 San Francisco Bay Area 41 1 75 1 154 Seattle 45 1 39 * 41 South Florida 81 1 104 * 80 Southern California 565 9 693 1 259 Remaining Markets – U.S.
Removed
Logistics Fund (“USLF”) 134 $ 15,004 $ 55 $ - Other Americas: FIBRA Prologis 66 5,170 19 - Prologis Brazil Logistics Venture ("PBLV") and other joint ventures 19 820 11 182 Subtotal Other Americas 85 5,990 30 182 Europe: Prologis European Logistics Fund (“PELF”) 169 18,779 7 12 Prologis European Logistics Partners (“PELP”) 63 7,217 82 88 Subtotal Europe 232 25,996 89 100 Asia: Nippon Prologis REIT (“NPR”) 45 6,215 - - Prologis Japan Core Logistics Fund ("PJLF") 3 529 - - Prologis China Core Logistics Fund (“PCCLF”) 30 2,210 - - Prologis China Logistics Venture 22 724 10 198 Subtotal Asia 100 9,678 10 198 Total 551 $ 56,668 $ 184 $ 480 For more information regarding our unconsolidated and consolidated co-investment ventures, see Notes 5 and 11 to the Consolidated Financial Statements in Item 8.
Added
Logistics Fund (“USLF”) 139 $ 16,210 $ 21 $ 126 Other Americas: FIBRA Prologis 66 5,373 22 - Prologis Brazil Logistics Venture ("PBLV") and other joint ventures 19 951 12 194 Subtotal Other Americas 85 6,324 34 194 Europe: Prologis European Logistics Fund (“PELF”) 174 22,117 8 39 Prologis European Logistics Partners (“PELP”) 64 8,205 210 39 Subtotal Europe 238 30,322 218 78 Asia: Nippon Prologis REIT, Inc.
Added
(“NPR”) 45 6,200 - - Prologis Japan Core Logistics Fund ("PJLF") 4 614 - - Prologis China Core Logistics Fund (“PCCLF”) 26 1,919 - - China AMC Prologis Logistics REIT ("Prologis C-REIT") 4 328 - - Prologis China Logistics Venture 23 757 26 71 Subtotal Asia 102 9,818 26 71 Total 564 $ 62,674 $ 299 $ 469 For more information regarding our unconsolidated and consolidated co-investment ventures, see Notes 4 and 10 to the Consolidated Financial Statements in Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+1 added−0 removed1 unchanged
Biggest changeSALES OF UNREGISTERED SECURITIES During 2024, we issued 1.4 million shares of common stock of Prologis, Inc. in connection with the redemption of common units of Prologis, L.P. in reliance on the exemption from registration requirements of the Securities Act of 1933, as amended, afforded by Section 4(a)(2) thereof. 28 Table of Contents PURCHAS ES OF EQUITY SECURITIES During 2024, we did not purchase any common stock of Prologis, Inc. in connection with our share purchase program.
Biggest changeThese 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. PURCHAS ES OF EQUITY SECURITIES During 2025, we did not purchase any common stock of Prologis, Inc. in connection with our share purchase program.
PREFERRED STOCK DIVIDENDS At December 31, 2024, we had 1.3 million shares of Series Q preferred stock outstanding with a liquidation preference of $50 per share that will be redeemable at our option on or after November 13, 2026. Dividends payable per share were $4.27 for the year ended December 31, 2024.
PREFERRED STOCK DIVIDENDS At December 31, 2025, we had 1.3 million shares of Series Q preferred stock outstanding with a liquidation preference of $50 per share that will be redeemable at our option on or after November 13, 2026. Dividends payable per share were $4.27 for the year ended December 31, 2025.
For more information regarding dividends, see Note 9 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.
For more information regarding dividends, see Note 8 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.
The graph assumes an initial investment of $100 in our common stock and each of the indices on December 31, 2019, and, as required by the SEC, the reinvestment of all dividends. The return shown on the graph is not necessarily indicative of future performance.
The graph assumes an initial investment of $100 in our common stock and each of the indices on December 31, 2020, and, as required by the SEC, the reinvestment of all dividends. The return shown on the graph is not necessarily indicative of future performance.
Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities MARKET INFORMATION AND HOLDERS Our common stock is listed on the NYSE under the symbol “PLD.” 27 Table of Contents Stock Performance Graph The following line graph compares the change in Prologis, Inc. cumulative total stockholder’s return on shares of its common stock from December 31, 2019, to the cumulative total return of the S&P 500 Stock Index and the Financial Times and Stock Exchange NAREIT Equity REITs Index from December 31, 2019, to December 31, 2024.
Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities MARKET INFORMATION AND HOLDERS Our common stock is listed on the NYSE under the symbol “PLD.” 27 Table of Contents Stock Performance Graph The following line graph compares the change in Prologis, Inc. cumulative total stockholder’s return on shares of its common stock from December 31, 2020, to the cumulative total return of the S&P 500 Stock Index and the Financial Times and Stock Exchange NAREIT Equity REITs Index from December 31, 2020, to December 31, 2025.
S ECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS For information regarding securities authorized for issuance under our equity compensation plans, see Notes 9 and 12 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.
S ECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS For information regarding securities authorized for issuance under our equity compensation plans, see Notes 8 and 11 to the Consolidated Financial Statements in Item 8.
OTHER STOCKHOLDER MATTERS Common Stock Plans Further information relative to our equity compensation plans will be provided in our 2025 Proxy Statement or in an amendment filed on Form 10-K/A.
Financial Statements and Supplementary Data. 28 Table of Contents OTHER STOCKHOLDER MATTERS Common Stock Plans Further information relative to our equity compensation plans will be provided in our 2026 Proxy Statement or in an amendment filed on Form 10-K/A.
Added
SALES OF UNREGISTERED SECURITIES During 2025, we issued 2.4 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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

111 edited+15 added−26 removed37 unchanged
Biggest changeThe following table details our foreign currency and derivative gains (losses), net included in earnings (in millions): 2024 2023 Realized foreign currency and derivative gains, net: Gains on the settlement of undesignated derivatives $ 53 $ 60 Gains on the settlement of transactions with third parties 1 1 Total realized foreign currency and derivative gains, net 54 61 Unrealized foreign currency and derivative gains (losses), net: Gains (losses) on the change in fair value of undesignated derivatives and unhedged debt 87 (81 ) Gains (losses) on remeasurement of certain assets and liabilities (20 ) 10 Total unrealized foreign currency and derivative gains (losses), net 67 (71 ) Total foreign currency and derivative gains (losses), net $ 121 $ (10 ) See Note 2 to the Consolidated Financial Statements for more information about our foreign currency and derivative financial instrument policies and Note 15 to the Consolidated Financial Statements for more information about our derivative and nonderivative transactions.
Biggest changeUpon settlement of these transactions, we recognize realized gains or losses. 37 Table of Contents See Note 2 to the Consolidated Financial Statements for more information about our foreign currency and derivative financial instrument policies and Note 14 to the Consolidated Financial Statements for more information about our derivative and nonderivative transactions.
We allocate the costs of our property management and 30 Table of Contents 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.
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 30 Table of Contents 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.
Limitations on the use of our FFO measures While we believe our modified FFO measures are important supplemental measures, neither NAREIT’s nor our measures of FFO should be used alone because they exclude significant economic components of net earnings computed under GAAP and are, therefore, limited as an analytical tool.
Limitations on the use of our FFO measures While we believe our modified FFO measures are important supplemental measures, neither NAREIT's nor our measures of FFO should be used alone because they exclude significant components of net earnings computed under GAAP and are, therefore, limited as an analytical tool.
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, presented on both a net effective and cash basis.
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.
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 the impact of foreign currency related items and deferred tax, specifically: • deferred income tax benefits and deferred income tax expenses recognized by our subsidiaries; 44 Table of Contents • current income tax expense related to acquired tax liabilities that were recorded as deferred tax liabilities in an acquisition, to the extent the expense is offset with a deferred income tax benefit in earnings that is excluded from our defined FFO measure; and • foreign currency exchange gains and losses resulting from: (i) debt transactions between us and our foreign entities; (ii) third-party debt that is used to hedge our investment in foreign entities; (iii) derivative financial instruments related to any such debt transactions; and (iv) mark-to-market adjustments associated with derivative and other financial instruments.
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: • deferred income tax benefits and deferred income tax expenses recognized by our subsidiaries; 44 Table of Contents • current income tax expense related to acquired tax liabilities that were recorded as deferred tax liabilities in an acquisition, to the extent the expense is offset with a deferred income tax benefit in earnings that is excluded from our defined FFO measure; and • foreign currency exchange gains and losses resulting from: (i) debt transactions between us and our foreign entities; (ii) third-party debt that is used to hedge our investment in foreign entities; (iii) derivative financial instruments related to any such debt transactions; and (iv) mark-to-market adjustments associated with derivative and other financial instruments.
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 December 31, 2024, we did not guarantee any third-party debt of the unconsolidated co-investment ventures.
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 December 31, 2025, we did not guarantee any third-party debt of the unconsolidated co-investment ventures.
See below for key metrics on rent change on rollover and occupancy. (2) We calculate changes in NOI from development completions period over period by comparing the change in NOI generated on the pool of developments that completed on or after January 1, 2023 through December 31, 2024.
See below for key metrics on rent change on rollover and occupancy. (2) We calculate changes in NOI from development completions period over period by comparing the change in NOI generated on the pool of developments that completed on or after January 1, 2024 through December 31, 2025.
We define our same store population for the three months ended December 31, 2024 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, 2023 and owned throughout the same three-month period in both 2023 and 2024.
We define our same store population for the three months ended December 31, 2025 as the properties in our O&M operating portfolio, including the property NOI for both consolidated properties and properties owned by the unconsolidated co-investment ventures, at January 1, 2024 and owned throughout the same three-month period in both 2024 and 2025.
This debt is non-recourse to Prologis and other investors in the co-investment ventures and bears interest as follows at December 31, 2024 (dollars in millions): Total Debt (1) Weighted Average Interest Rate Gross Book Value of Real Estate (1) Ownership % Prologis Targeted U.S.
This debt is non-recourse to Prologis and other investors in the co-investment ventures and bears interest as follows at December 31, 2025 (dollars in millions): Total Debt (1) Weighted Average Interest Rate Gross Book Value of Real Estate (1) Ownership % Prologis Targeted U.S.
We also generate operating cash through our Strategic Capital Segment by providing asset management and property management and other services to our unconsolidated co-investment ventures. See the Results of Operations section above for the key drivers of the net revenues from our Strategic Capital Segment.
We also generate operating cash through the fee revenue from our Strategic Capital Segment by providing asset management and property management and other services to our unconsolidated co-investment ventures. See the Results of Operations section above for the key drivers of the net revenues from our Strategic Capital Segment.
See Note 2 to the Consolidated Financial Statements for more information about our foreign currency and derivative financial instrument policies and Note 15 to the Consolidated Financial Statements for more information about our derivative and nonderivative transactions and other comprehensive income (loss). E NVIRONMENTAL MATTERS See Note 16 in the Consolidated Financial Statements for further information about environmental liabilities.
See Note 2 to the Consolidated Financial Statements for more information about our foreign currency and derivative financial instrument policies and Note 14 to the Consolidated Financial Statements for more information about our derivative and nonderivative transactions and other comprehensive income (loss). E NVIRONMENTAL MATTERS See Note 15 in the Consolidated Financial Statements for further information about environmental liabilities.
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).
Neither our consolidated results nor those of the co-investment ventures, when viewed individually, 36 Table of Contents 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).
See Note 4 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: • Investments in and advances to our unconsolidated entities.
See Note 3 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: • Investments in and advances to our unconsolidated entities.
We compensate for these limitations by using our FFO measures only in conjunction with net earnings computed under GAAP when making our decisions. This information should be read with our complete Consolidated Financial Statements prepared under GAAP.
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.
A discussion regarding our financial condition and results of operations for 2024 compared to 2023 is presented below. Information on 2022 is included in graphs only to show year over year trends in our results of operations and operating metrics.
A discussion regarding our financial condition and results of operations for 2025 compared to 2024 is presented below. Information on 2023 is included in graphs only to show year over year trends in our results of operations and operating metrics.
Development margins fluctuate depending on several factors including cost of capital, changes in capitalization rates that are used to estimate value at completion and location and type of development, such as build-to-suit development.
Development margins fluctuate depending on several factors including cost of capital, changes in capitalization rates that are used to estimate value at completion and location and type of development, such as build-to-suit or speculative.
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, 2023) and properties acquired or disposed of to third parties during the period.
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, 2024) and properties acquired or disposed of to third parties during the period.
The fair value of real estate properties subject to purchase price allocation is based on the expected future cash flows of the property and various characteristics of the markets where the property is located utilizing an income approach methodology, which may be a discounted cash flow analysis or applying a capitalization rate to the estimated net operating income of a property.
The fair value of real estate properties subject to purchase price allocation is based on the expected future cash flows of the property and various characteristics of the markets where the property is located utilizing an income approach methodology, which may be a 43 Table of Contents discounted cash flow analysis or applying a capitalization rate to the estimated net operating income of a property.
The earnings we recognize can be impacted by: (i) the size, rental rates and occupancy of the portfolio of properties owned by each venture; (ii) interest expense based on the size and terms of the debt; (iii) gains or losses from the dispositions of properties, impairments and extinguishment 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.
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.
On consolidation, these amounts are eliminated and the actual costs of providing property management and leasing services are recognized as part of our consolidated rental expense. 36 Table of Contents (2) We include the Property NOI for the same store portfolio for both consolidated properties and properties owned by the co-investment ventures based on our investment in the underlying properties.
On consolidation, these amounts are eliminated and the actual costs of providing property management and leasing services are recognized as part of our consolidated rental expense. (2) We include the Property NOI for the same store portfolio for both consolidated properties and properties owned by the co-investment ventures based on our investment in the underlying properties.
In order to calculate our share of Same Store Property NOI from the co-investment ventures in which we own less than 100%, we use the co-investment ventures’ underlying Property NOI for the same store portfolio and apply our ownership percentage at December 31, 2024 to the Property NOI for both periods, including the properties contributed during the period.
In order to calculate our share of Same Store Property NOI from the co-investment ventures in which we own less than 100%, we use the co-investment ventures’ underlying Property NOI for the same store portfolio and apply our ownership percentage at December 31, 2025 to the Property NOI for both periods, including the properties contributed during the periods.
See the discussion of our unconsolidated entities above in the Strategic Capital Segment discussion and in Note 5 to the Consolidated Financial Statements for a further breakdown of our share of net earnings recognized.
See the discussion of our unconsolidated entities above in the Strategic Capital Segment discussion and in Note 4 to the Consolidated Financial Statements for a further breakdown of our share of net earnings recognized.
We use Core FFO , including by segment and region, to: (i) assess our operating performance as compared to other real estate companies; (ii) evaluate our performance and the performance of our properties in comparison with expected results and results of previous periods; (iii) evaluate the performance of our management; (iv) budget and forecast future results to assist in the allocation of resources; (v) provide guidance to the financial markets to understand our expected operating performance; and (vi) evaluate how a specific potential investment will impact our future results.
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.
For further details regarding the key property information and summarized financial condition and operating results of our unconsolidated co-investment ventures, refer to Note 5 to the Consolidated Financial Statements.
For further details regarding the key property information and summarized financial condition and operating results of our unconsolidated co-investment ventures, refer to Note 4 to the Consolidated Financial Statements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is incorporated by reference herein to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 13, 2024, and is available on the SEC’s website at www.sec.gov and our Investor Relations website at ir.prologis.com .
Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is incorporated by reference herein to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 14, 2025, and is available on the SEC’s website at www.sec.gov and our Investor Relations website at ir.prologis.com .
We believe the drivers of property NOI for 35 Table of Contents 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”).
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”).
We receive the majority of our operating cash through the net revenues of our Real Estate Segment, including the recovery of our operating costs. Cash flows generated by the Real Estate Segment are impacted by our acquisition, development and disposition activities, which are drivers of NOI recognized during each period.
We generate the majority of our operating cash through the net revenues of our Real Estate Segment, including the recovery of our operating costs. Cash flows generated by the Real Estate Segment are impacted by our acquisition, development and disposition activities, which are among the drivers of NOI recognized during each period.
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 non-strategic operating properties.
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.
We issued $4.2 billion of senior notes during 2024 and $5.4 billion during 2023, with a weighted average interest rate of 4.8% and 4.7%, respectively, at the issuance date. See Note 8 to the Consolidated Financial Statements and the Liquidity and Capital Resources section below, for further discussion of our debt and borrowing costs.
We issued $3.4 billion of senior notes during 2025 and $4.2 billion during 2024, with a weighted average interest rate of 4.2% and 4.8%, respectively, at the issuance date. See Note 7 to the Consolidated Financial Statements and the Liquidity and Capital Resources section below, for further discussion of our debt and borrowing costs.
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.
We allocate the costs of our property management and leasing functions to the Strategic Capital Segment through 32 Table of Contents 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.
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, allowing us and investors to analyze our ongoing business operations.
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.
Of the significant accounting policies discussed in Note 2 to the Consolidated Financial Statements, those presented below have been identified by us as meeting the criteria to be considered critical accounting policies as they relate to our financial condition at December 31, 2024, and 2023 and our operating results for the three-year period ended December 31, 2024.
Of the significant accounting policies discussed in Note 2 to the Consolidated Financial Statements, those presented below have been identified by us as meeting the criteria to be considered critical accounting policies for our financial condition at December 31, 2025, and 2024 and our operating results for the three-year period ended December 31, 2025.
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 analytical tools and may vary among real estate companies.
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. 35 Table of Contents As non-GAAP financial measures, the same store metrics have certain limitations as an analytical tool and may vary among real estate companies.
We also exclude the gains on revaluation of equity investments upon acquisition of a controlling interest and the gain recognized from a partial sale of our investment, as these are similar to gains from the sales of previously depreciated properties. We exclude similar adjustments from our unconsolidated entities and the third parties’ share of our consolidated ventures.
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.
Included in these 41 Table of Contents amounts were distributions from venture activities, including proceeds from property sales, debt refinancing and the redemption of our investment in certain unconsolidated entities. • Net proceeds from (payments on) the settlement of net investment hedges.
Included in these amounts were distributions from venture activities, including proceeds from property sales, debt refinancing and the redemption of our investment in certain unconsolidated entities. • Net proceeds from (payments on) the settlement of net investment hedges.
See the Results of Operations section above for further explanation of our Real Estate Segment. The revenues from this segment include noncash adjustments for straight-lined rents and amortization of above and below market leases of $645 million and $613 million in 2024 and 2023, respectively. • Strategic Capital Segment.
See the Results of Operations section above for further explanation of our Real Estate Segment. The revenues from this segment include noncash adjustments for straight-lined rents and amortization of above and below market leases of $691 million and $645 million in 2025 and 2024, respectively. • Strategic Capital Segment.
We recognized equity-based, noncash compensation expenses of $232 million and $268 million in 2024 and 2023, respectively, which were recorded to Rental Expenses in the Real Estate Segment, Strategic Capital Expenses in the Strategic Capital Segment and G&A Expenses in the Consolidated Statements of Income. • Operating distributions from unconsolidated entities.
We recognized equity-based, noncash compensation expenses of $185 million and $232 million in 2025 and 2024, respectively, which were recorded to Rental Expenses in the Real Estate Segment, Strategic Capital Expenses in the Strategic Capital Segment and G&A Expenses in the Consolidated Statements of Income. • Operating distributions from unconsolidated entities.
The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as earnings computed under GAAP to exclude historical cost depreciation and gains and losses from the sales net of any related tax, along with impairment charges, of previously depreciated properties.
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.
The following graph summarizes recurring capitalized expenditures and leasing costs of our consolidated operating properties during each year and excludes development costs and spend subsequent to stabilization that is structural in nature and non-recurring: Strategic Capital Segment 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.
The following graph summarizes capitalized expenditures and leasing costs during each year and excludes development costs and spend subsequent to stabilization that is structural in nature: Strategic Capital Segment 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.
We expect to fund our cash needs principally from the following sources (subject to market conditions): • net cash flow from property operations; • fees earned for services performed on behalf of co-investment ventures; • distributions received from co-investment ventures; • proceeds from the contribution of properties to current or future co-investment ventures; • proceeds from the disposition of properties or other investments to third parties; 39 Table of Contents • available unrestricted cash balances ($1.3 billion at December 31, 2024); • borrowing capacity under our current credit facility arrangements that allows us to borrow on a short-term basis, with maturities generally ranging from overnight to three months ($6.1 billion available at December 31, 2024), including our commercial paper program that we established in the first quarter of 2024; and • proceeds from the issuance of debt.
We expect to fund our cash needs principally from the following sources (subject to market conditions): • net cash flow from property operations; • fees earned for services performed on behalf of co-investment ventures; • distributions received from co-investment ventures; • proceeds from the contribution of properties to current or future co-investment ventures; • proceeds from the disposition of properties or other investments to third parties; • available unrestricted cash balances ($1.1 billion at December 31, 2025); • available capacity under our current credit facility arrangements that allows us to borrow on a short-term basis, with maturities generally ranging from overnight to three months ($6.5 billion available at December 31, 2025), including our commercial paper programs; and • proceeds from the issuance of debt.
(3) Transactional fees include leasing commissions and acquisition, disposition, development and other fees. 33 Table of Contents (4) We generally earn promote revenue directly from third-party investors in the co-investment ventures based on the cumulative returns of the venture over a three-year period or the stabilization of individual development projects owned by the venture.
(2) Recurring fees include asset management and property management fees. (3) Transactional fees include leasing commissions, acquisition, disposition, development and other fees. (4) We generally earn promote revenue directly from third-party investors in the co-investment ventures based on the cumulative returns of the venture over a three-year period or the stabilization of individual development projects owned by the venture.
We received distributions from unconsolidated entities as a return of investment of $58 million and $348 million in 2024 and 2023, respectively, representing our proportionate share.
We received distributions from unconsolidated entities as a return of investment of $104 million and $58 million in 2025 and 2024, respectively, representing our proportionate share.
We received $562 million and $680 million of distributions as a return on our investment from the cash flows generated from the operations of our unconsolidated entities in 2024 and 2023, respectively. • Cash paid for interest, net of amounts capitalized. We paid interest, net of amounts capitalized, of $711 million and $457 million in 2024 and 2023, respectively.
We received $645 million and $562 million of distributions as a return on our investment from the cash flows generated from the operations of our unconsolidated entities in 2025 and 2024, respectively. • Cash paid for interest, net of amounts capitalized. We paid interest, net of amounts capitalized, of $842 million and $711 million in 2025 and 2024, respectively.
To arrive at Core FFO, we adjust FFO, as modified by Prologis , to exclude the following recurring and nonrecurring items that we recognize directly in FFO, as modified by Prologis : • gains or losses from the disposition of land and development properties that were developed with the intent to contribute or sell; • income tax expense related to the sale of investments in real estate; • impairment charges recognized related to our investments in real estate generally as a result of our change in intent to contribute or sell these properties; and • gains or losses from the early extinguishment of debt and redemption and repurchase of preferred stock.
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: • gains or losses from the disposition of land and development properties that were developed with the intent to contribute or sell; • income tax expense related to the sale of investments in real estate; • impairment charges recognized related to our investments in real estate generally as a result of our change in intent to contribute or sell these properties; and • gains or losses from the early extinguishment of debt and redemption and repurchase of preferred stock.
We had net earnings attributable to noncontrolling interests of $216 million and $194 million in 2024 and 2023, respectively. Included in these amounts were $93 million and $77 million in 2024 and 2023, respectively, of net earnings attributable to the common limited partnership unitholders of Prologis, L.P.
We had net earnings attributable to noncontrolling interests of $237 million and $216 million in 2025 and 2024, respectively. Included in these amounts were $81 million and $93 million in 2025 and 2024, respectively, of net earnings attributable to the common limited partnership unitholders of Prologis, L.P.
Below are the components of Real Estate Segment NOI, derived directly from line items in the Consolidated Financial Statements (in millions): 2024 2023 Rental revenues $ 7,515 $ 6,819 Development management and other revenues 14 5 Rental expenses (1,765 ) (1,625 ) Other expenses (47 ) (54 ) Real Estate Segment – NOI $ 5,717 $ 5,145 The $572 million change in Real Estate Segment (“RES”) NOI in 2024 compared to 2023, was impacted by the following activities (in millions): (1) Significant rent change due to higher rental rates on the rollover of leases during both periods continues to be a key driver of increasing rental income.
Below are the components of Real Estate Segment NOI, derived directly from line items in the Consolidated Financial Statements (in millions): 2025 2024 Rental revenues $ 8,159 $ 7,515 Development management and other revenues 39 14 Rental expenses (1,964 ) (1,765 ) Other expenses (46 ) (47 ) Real Estate Segment – NOI $ 6,188 $ 5,717 The $471 million change in Real Estate Segment (“RES”) NOI in 2025 compared to 2024, was impacted by the following activities (in millions): (1) Significant rent change due to higher rental rates on the rollover of leases during both periods continues to be a key driver of increasing rental income.
Changes in asset valuations within the co-investment ventures during the promote period is one of the significant inputs to the calculation of promote revenues. For promotes earned after January 2024, we amended the Prologis Promote Plan ("PPP") to award up to 25% of the third-party portion of the promotes earned by us from the co-investment ventures to our employees.
Changes in asset valuations within the co-investment ventures during the promote period is one of the significant inputs to the calculation of promote revenues. 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.
Other Components of Income (Expense) Earnings from Unconsolidated Entities, Net We recognized net earnings from unconsolidated entities, which are generally accounted for using the equity method, of $354 million and $307 million during 2024 and 2023, respectively.
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 $403 million and $354 million during 2025 and 2024, respectively.
We do not use our FFO measures as, nor should they be considered to be, alternatives to net earnings computed under GAAP, as indicators of our operating performance, as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs.
We do not use NAREIT's nor 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 invested cash in our unconsolidated entities of $541 million and $284 million in 2024 and 2023, respectively, representing our proportionate share. The ventures used the funds for the acquisition of properties, development and repayment of debt. See Note 5 to the Consolidated Financial Statements for more detail on our unconsolidated co-investment ventures. • Return of investment from unconsolidated entities.
We invested cash in our unconsolidated entities of $312 million and $541 million in 2025 and 2024, respectively, representing our proportionate share, for the acquisition of properties, development and repayment of debt by the ventures. See Note 4 to the Consolidated Financial Statements for more detail on our unconsolidated co-investment ventures. • Return of investment from unconsolidated entities.
Interest Expense The following table details our net interest expense (dollars in millions): 2024 2023 Gross interest expense $ 893 $ 683 Amortization of debt discount and debt issuance costs, net 79 75 Capitalized amounts (108 ) (117 ) Net interest expense $ 864 $ 641 Weighted average effective interest rate during the year 3.1 % 2.8 % Interest expense increased in 2024, as compared to 2023, principally due to the issuance of senior notes to finance our acquisition and development activities with higher interest rates on new issuances in both years.
Interest Expense The following table details our net interest expense (dollars in millions): 2025 2024 Gross interest expense $ 1,024 $ 893 Amortization of debt discount and debt issuance costs, net 85 79 Capitalized amounts (107 ) (108 ) Net interest expense $ 1,002 $ 864 Weighted average effective interest rate during the year 3.2 % 3.1 % Interest expense increased in 2025, as compared to 2024, principally due to the issuance of senior notes to finance acquisition and development activities with higher interest rates on new issuances.
These ventures had total third-party debt of $17.9 billion at December 31, 2024 with a weighted average remaining maturity of 6 years and weighted average interest rate of 3.5%. Certain of our ventures do not have third-party debt and are therefore excluded.
These ventures had total third-party debt of $19.7 billion at December 31, 2025 with a weighted average remaining term of 6 years and weighted average interest rate of 3.5%. Certain of our ventures do not have third-party debt and are therefore excluded.
We use FFO, as modified by Prologis , so that management, analysts and investors are able to evaluate our performance against other REITs that do not have similar operations or operations in jurisdictions outside the U.S. Core FFO attributable to common stockholders/unitholders (“Core FFO”) In addition to FFO, as modified by Prologis , we also use Core FFO.
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.
Below are the components of Strategic Capital Segment NOI derived directly from the line items in the Consolidated Financial Statements (in millions): 2024 2023 Strategic capital revenues $ 672 $ 1,200 Strategic capital expenses (292 ) (385 ) Strategic Capital Segment – NOI $ 380 $ 815 Below is additional detail of our Strategic Capital Segment revenues, expenses and NOI (in millions): U.S.
Below are the components of Strategic Capital Segment NOI derived directly from the line items in the Consolidated Financial Statements (in millions): 2025 2024 Strategic capital revenues $ 592 $ 672 Strategic capital expenses (271 ) (292 ) Strategic Capital Segment – NOI $ 321 $ 380 Below is additional detail of our Strategic Capital Segment revenues, expenses and NOI (in millions): U.S.
Our credit facilities and our commercial paper support our cash needs for development and acquisition activities on a short-term basis. The maturities of the borrowings under the credit facilities and the notes under the commercial paper program generally range from overnight to three months.
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 investment in the development portfolio was $2.8 billion at December 31, 2024. For additional information on our development portfolio at December 31, 2024, see Item 2. Properties. 32 Table of Contents Capital Expenditures We capitalize costs incurred in improving and leasing our operating properties as part of the investment basis or within Other Assets in the Consolidated Balance Sheets.
For additional information on our development portfolio at December 31, 2025, see Item 2. Properties. 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.
Our O&M operating portfolio does not include our development portfolio, value-added properties, non-industrial properties or properties that we consider non-strategic and do not have the intent to hold long term that are classified as either held for sale or within other real estate investments.
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.
See Note 8 to the Consolidated Financial Statements for further information on this activity. • Cash paid for income taxes, net of refunds. We paid income taxes, net of refunds, of $130 million and $149 million in 2024 and 2023, respectively. See Note 13 to the Consolidated Financial Statements for further information on this activity.
See Note 7 to the Consolidated Financial Statements for further information on this activity. • Cash paid for income taxes, net of refunds. We paid income taxes, net of refunds, of $143 million and $130 million in 2025 and 2024, respectively. See Note 12 to the Consolidated Financial Statements for further information on this activity.
See Note 11 to the Consolidated Financial Statements for further information on our noncontrolling interests. 38 Table of Contents Other Comprehensive Income (Loss) The key driver of changes in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Financial Statements in 2024 and 2023 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.
Other Comprehensive Income (Loss) The key driver of changes in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Financial Statements in 2025 and 2024, 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.
We reflect our share for consolidated ventures in which we do not own 100% of the equity by adjusting our FFO measures to remove the noncontrolling interests share of the applicable adjusting items based on our average ownership percentage for the applicable periods.
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.
Our repurchase of and payments on debt and proceeds from the issuance of debt consisted of the following activity (in millions): 2024 2023 Repurchase of and payments on debt (including extinguishment costs) Regularly scheduled debt principal payments and payments at maturity $ 330 $ 30 Secured mortgage debt 89 153 Senior notes - 89 Term loans 500 - Total $ 919 $ 272 Proceeds from the issuance of debt Secured mortgage debt $ 7 $ 120 Senior notes 4,149 5,323 Term loans 350 312 Total $ 4,506 $ 5,755 Unconsolidated Co-Investment Venture Debt We had investments in and advances to our unconsolidated co-investment ventures of $9.3 billion at December 31, 2024.
Our repurchase of and payments on debt and proceeds from the issuance of debt consisted of the following activity (in millions): 2025 2024 Repurchase of and payments on debt (including extinguishment costs) Regularly scheduled debt principal payments and payments at maturity $ 337 $ 330 Secured mortgage debt - 89 Senior notes 365 - Term loans - 500 Total $ 702 $ 919 Proceeds from the issuance of debt Secured mortgage debt $ 4 $ 7 Senior notes 3,431 4,149 Term loans 26 350 Total $ 3,461 $ 4,506 Unconsolidated Co-Investment Venture Debt We had investments in and advances to our unconsolidated co-investment ventures of $10.3 billion at December 31, 2025.
We incurred $419 million and $390 million of G&A expenses in 2024 and 2023, respectively.
We incurred $469 million and $419 million of G&A expenses in 2025 and 2024, respectively.
If the ventures are unable to refinance the maturing indebtedness with newly issued debt, they may be able to obtain funds by voluntary capital contributions from us and our partners or by selling assets.
If the ventures are unable to refinance the maturing indebtedness with newly issued debt, they may be able to obtain funds by voluntary capital contributions from us and our partners or by selling assets. Certain of our ventures also have credit facilities, or unencumbered properties, both of which may be used to obtain funds.
To 45 Table of Contents assist investors in compensating for these limitations, we reconcile our modified FFO measures to our net earnings computed under GAAP as follows (in millions): 2024 2023 Reconciliation of net earnings attributable to common stockholders to FFO measures: Net earnings attributable to common stockholders $ 3,726 $ 3,053 Add (deduct) NAREIT defined adjustments: Real estate related depreciation and amortization 2,504 2,434 Gains on other dispositions of investments in real estate, net of taxes (excluding development properties and land) (899 ) (158 ) Adjustments related to noncontrolling interests (31 ) (38 ) Our proportionate share of adjustments related to unconsolidated entities 495 455 NAREIT defined FFO attributable to common stockholders/unitholders 5,795 5,746 Add (deduct) our modified adjustments: Unrealized foreign currency, derivative and other losses (gains), net (68 ) 18 Deferred income tax expense (benefit) 21 18 Current income tax benefit on dispositions related to acquired tax liabilities - (11 ) Our proportionate share of adjustments related to unconsolidated entities (7 ) (11 ) FFO, as modified by Prologis attributable to common stockholders/unitholders 5,741 5,760 Adjustments to arrive at Core FFO: Gains on dispositions of development properties and land, net (414 ) (462 ) Current income tax expense on dispositions 25 36 Losses (gains) on early extinguishment of debt, net (1 ) (3 ) Adjustments related to noncontrolling interests 6 9 Our proportionate share of adjustments related to unconsolidated entities (52 ) (6 ) Core FFO attributable to common stockholders/unitholders $ 5,305 $ 5,334
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 as follows (in millions): 2025 2024 Reconciliation of net earnings attributable to common stockholders to FFO measures: Net earnings attributable to common stockholders $ 3,322 $ 3,726 Add (deduct) NAREIT defined adjustments: Real estate related depreciation and amortization 2,539 2,504 Gains on other dispositions of investments in real estate, net of taxes (excluding development properties and land) (685 ) (899 ) Adjustments related to noncontrolling interests (47 ) (31 ) Our proportionate share of adjustments related to unconsolidated entities 551 495 NAREIT defined FFO attributable to common stockholders/unitholders $ 5,680 $ 5,795 Add (deduct) our modified adjustments: Unrealized foreign currency, derivative and other losses (gains), net 125 (68 ) Deferred income tax expense (benefit) 4 21 Reconciling items related to noncontrolling interests (1 ) - Our proportionate share of adjustments related to unconsolidated entities (29 ) (7 ) FFO, as modified by Prologis attributable to common stockholders/unitholders $ 5,779 $ 5,741 Adjustments to arrive at Core FFO: Gains on dispositions of development properties and land, net (258 ) (414 ) Current income tax expense (benefit) on dispositions 26 25 Losses (gains) on early extinguishment of debt, net 3 (1 ) Adjustments related to noncontrolling interests 15 6 Our proportionate share of adjustments related to unconsolidated entities (4 ) (52 ) Core FFO attributable to common stockholders/unitholders $ 5,561 $ 5,305 45 Table of Contents
NEW ACCOUN TING PRONOUNCEMENTS See Note 2 to the Consolidated Financial Statements. FUNDS FROM OP ERATIONS ATTRIBUTABLE TO COMMON STOCKHOLDERS/UNITHOLDERS (“FFO”) FFO is a non-GAAP financial measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net earnings.
FUNDS FROM OP ERATIONS 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.
See the Cash Flow Summary below for more information about our investment activity in our co-investment ventures. 40 Table of Contents Cash Flow Summary The following table summarizes our cash flow activity (in millions): 2024 2023 Net cash provided by (used in) operating activities $ 4,912 $ 5,373 Net cash provided by (used in) investing activities $ (3,099 ) $ (6,419 ) Net cash provided by (used in) financing activities $ (1,000 ) $ 1,320 Net increase (decrease) in cash and cash equivalents, including the effect of foreign currency exchange rates on cash $ 788 $ 252 Operating Activities Cash provided by and used in operating activities, exclusive of changes in receivables and payables, was impacted by the following significant activities: • Real Estate Segment.
Cash Flow Summary The following table summarizes our cash flow activity (in millions): 2025 2024 Net cash provided by (used in) operating activities $ 5,008 $ 4,912 Net cash provided by (used in) investing activities $ (3,630 ) $ (3,099 ) Net cash provided by (used in) financing activities $ (1,564 ) $ (1,000 ) Net increase (decrease) in cash and cash equivalents, including the effect of foreign currency exchange rates on cash $ (173 ) $ 788 40 Table of Contents Operating Activities Cash provided by and used in operating activities, exclusive of changes in receivables and payables, was impacted by the following significant activities: • Real Estate Segment.
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 (in millions): 2024 2023 Real estate segment: Rental revenues $ 7,515 $ 6,819 Development management and other revenues 14 5 Rental expenses (1,765 ) (1,625 ) Other expenses (47 ) (54 ) Real Estate Segment – NOI 5,717 5,145 Strategic capital segment: Strategic capital revenues 672 1,200 Strategic capital expenses (292 ) (385 ) Strategic Capital Segment – NOI 380 815 General and administrative expenses (419 ) (390 ) Depreciation and amortization expenses (2,580 ) (2,485 ) Operating income before gains on real estate transactions, net 3,098 3,085 Gains on dispositions of development properties and land, net 414 462 Gains on other dispositions of investments in real estate, net 904 161 Operating income $ 4,416 $ 3,708 See Note 17 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.
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 (in millions): 2025 2024 Real estate segment: Rental revenues $ 8,159 $ 7,515 Development management and other revenues 39 14 Rental expenses (1,964 ) (1,765 ) Other expenses (46 ) (47 ) Real Estate Segment – NOI 6,188 5,717 Strategic capital segment: Strategic capital revenues 592 672 Strategic capital expenses (271 ) (292 ) Strategic Capital Segment – NOI 321 380 General and administrative expenses (469 ) (419 ) Depreciation and amortization expenses (2,626 ) (2,580 ) Operating income before gains on real estate transactions, net 3,414 3,098 Gains on dispositions of development properties and land, net 258 414 Gains on other dispositions of investments in real estate, net 686 904 Operating income $ 4,358 $ 4,416 See Note 16 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.
Near-Term Principal Cash Sources and Uses In addition to dividends and distributions, we expect our primary cash needs will consist of the following: • completion of the development and leasing of the properties in our consolidated development portfolio (at December 31, 2024, 85 properties in our development portfolio were 31.9% leased with a current investment of $2.8 billion and a TEI of $4.7 billion when completed and leased, leaving $1.9 billion of estimated additional required investment); • development of new properties that we may hold for long-term investment or subsequently contribute to unconsolidated co-investment ventures or sell to third parties, including the acquisition of land; • the acquisition of other real estate investments that we acquire with the intention of redeveloping into industrial properties and data centers; • capital expenditures and leasing costs on properties in our operating portfolio; • investments in renewable energy, energy storage and mobility infrastructure to serve our customers and achieve our sustainability goals; • repayment of debt and scheduled principal payments of $514 million in 2025; • additional investments in current and future co-investment ventures and other ventures; and • the acquisition of operating properties or portfolios of operating properties (depending on market and other conditions), for direct, long-term investment in our consolidated portfolio (this might include acquisitions from our unconsolidated entities).
LIQUIDITY AND C APITAL 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. 38 Table of Contents Near-Term Principal Cash Sources and Uses In addition to dividends and distributions, we expect our primary cash needs will consist of the following: • completion of the development and leasing of the properties in our consolidated development portfolio (at December 31, 2025, 77 properties in our development portfolio were 53.5% leased with a current investment of $3.0 billion and a TEI of $5.1 billion when completed and leased, leaving $2.1 billion of estimated additional required investment); • development of new industrial properties that we may hold for long-term investment or subsequently contribute to unconsolidated co-investment ventures or sell to third parties, including the acquisition of land; • development of data centers, including capital for the acquisition of land, site preparation, power procurement activities to secure long-term energy capacity and turnkey data center infrastructure and equipment; • the acquisition of other real estate investments that we acquire with the intention of redeveloping into industrial properties and data centers; • capital expenditures and leasing costs on properties in our operating portfolio; • investments in renewable energy, energy storage and mobility infrastructure to serve our customers and achieve our sustainability goals; • repayment of debt and scheduled principal payments of $1.9 billion in 2026; • additional investments in current and future co-investment ventures and other ventures; and • the acquisition of operating properties or portfolios of operating properties (depending on market and other conditions), for direct, long-term investment in our consolidated portfolio (this might include acquisitions from our unconsolidated entities).
We received net proceeds of $13 million and $35 million for the settlement of net investment hedges in 2024 and 2023, respectively. See Note 15 to the Consolidated Financial Statements for further information on our derivative transactions.
We made net payments of $21 million and received net proceeds of $13 million for the settlement of net investment hedges in 2025 and 2024, respectively. See Note 14 to the Consolidated Financial Statements for further information on our derivative transactions. • Purchase of short-term investments.
We reflect our share of our FFO measures for unconsolidated entities by applying our average ownership percentage for the period to the applicable adjusting items on an entity-by-entity basis.
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.
See below for information on our O&M operating portfolio at December 31 (square feet in millions): 2024 2023 Number of Properties Square Feet Percentage Occupied Number of Properties Square Feet Percentage Occupied Consolidated 2,981 644 95.4% 2,957 631 97.6% Unconsolidated 2,423 548 96.6% 2,242 507 97.5% Total 5,404 1,192 95.9% 5,199 1,138 97.6% Below are the key leasing metrics of our O&M operating portfolio.
See below for information on our O&M operating portfolio at December 31 (square feet in millions): 2025 2024 Number of Properties Square Feet Percentage Occupied Number of Properties Square Feet Percentage Occupied Consolidated 2,968 645 95.4% 2,981 644 95.4% Unconsolidated 2,472 562 96.3% 2,423 548 96.6% Total 5,440 1,207 95.8% 5,404 1,192 95.9% 34 Table of Contents Below are the key leasing metrics of our O&M operating portfolio.
Certain of our ventures also have credit facilities, or unencumbered properties, both of which may be used to obtain funds. 42 Table of Contents 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.
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.
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 $209 million and $87 million for the year ended December 31, 2024 and 2023, respectively.
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 $15 million and $209 million for 2025 and 2024, respectively.
Cash used in investing activities is principally driven by our capital deployment activities of investing in real estate development, acquisitions and capital expenditures as discussed above. This activity includes land for future development, operating properties, other real estate assets and real estate portfolios, such as the $3.1 billion portfolio acquired in the second quarter of 2023.
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.
The following table summarizes our income tax expense (benefit) (in millions): 2024 2023 Current income tax expense (benefit): Income tax expense $ 116 $ 165 Income tax expense on dispositions 30 39 Income tax benefit on dispositions related to acquired tax liabilities - (11 ) Total current income tax expense 146 193 Deferred income tax expense: Income tax expense 21 18 Total deferred income tax expense 21 18 Total income tax expense $ 167 $ 211 Our income taxes are discussed in more detail in Note 13 to the Consolidated Financial Statements.
The following table summarizes our income tax expense (benefit) (in millions): 2025 2024 Current income tax expense (benefit): Income tax expense (benefit) $ 173 $ 116 Income tax expense (benefit) on dispositions 27 30 Total current income tax expense (benefit) 200 146 Deferred income tax expense (benefit): Income tax expense (benefit) 4 21 Total deferred income tax expense (benefit) 4 21 Total income tax expense $ 204 $ 167 Our income taxes are discussed in more detail in Note 12 to the Consolidated Financial Statements.
At any point in time, we are required to maintain available commitments under our credit facilities in an amount at least equal to the CPNs outstanding. • We issued senior notes of $4.2 billion (principal in millions): Aggregate Principal Issuance Date Weighted Average Issuance Date Borrowing Currency USD (1) Interest Rate Years Maturity Dates January $ 1,250 $ 1,250 5.1% 17.3 March 2034 – 2054 February CN¥ 1,500 $ 211 3.5% 3.0 February 2027 March C$ 550 $ 405 4.7% 5.0 March 2029 May € 550 $ 592 4.0% 10.0 May 2034 May £ 350 $ 439 5.6% 16.0 May 2040 July $ 1,100 $ 1,100 5.1% 17.5 January 2035 – March 2054 September CN¥ 1,350 $ 190 3.3% 5.0 September 2029 Total $ 4,187 4.8% 13.7 (1) The exchange rate used to calculate into U.S. dollars was the spot rate at the settlement date of each issuance.
At any point in time, we are required to maintain available commitments under our credit facilities in an amount at least equal to the amount of the CPNs outstanding. • We issued $3.4 billion of senior notes with an issuance date weighted average interest rate of 4.2% and weighted average term of 8 years (principal in millions): Aggregate Principal Issuance Date Weighted Average Issuance Date Borrowing Currency USD (1) Interest Rate Term (Years) Maturity Dates February C$ 750 $ 520 4.2% 8.0 February 2033 May $ 1,250 $ 1,250 5.1% 8.3 January 2031 – May 2035 September € 1,000 $ 1,178 3.6% 9.5 September 2032 – 2037 October C$ 700 $ 501 3.6% 6.3 February 2032 Total $ 3,449 4.2% 8.4 (1) The exchange rate used to calculate into U.S. dollars was the spot rate at the settlement date.
We also exclude net termination and renegotiation fees and write-offs of fair value lease assets or liabilities to allow us to evaluate the growth or decline in each property’s rental revenues without regard to one-time items that are not indicative of the property’s recurring operating performance.
We also exclude one-time items due to early lease terminations, including termination fees received from customers and the write-off of related lease assets and liabilities, that are not indicative of the property’s recurring operating performance in order to evaluate the growth or decline in each property's rental revenues.
The following is a reconciliation of our consolidated rental revenues, rental expenses and property NOI for each quarter in 2024 and 2023 to the full year, as included in the Consolidated Statements of Income and within Note 19 to the Consolidated Financial Statements and to the respective amounts in our same store portfolio analysis for the three months ended December 31 (dollars in millions): Three Months Ended March 31, June 30, September 30, December 31, Full Year 2024 Rental revenues $ 1,828 $ 1,852 $ 1,897 $ 1,938 $ 7,515 Rental expenses (454 ) (445 ) (427 ) (439 ) (1,765 ) Property NOI $ 1,374 $ 1,407 $ 1,470 $ 1,499 $ 5,750 2023 Rental revenues $ 1,634 $ 1,652 $ 1,777 $ 1,756 $ 6,819 Rental expenses (413 ) (388 ) (416 ) (408 ) (1,625 ) Property NOI $ 1,221 $ 1,264 $ 1,361 $ 1,348 $ 5,194 Three Months Ended December 31, 2024 2023 % Change Reconciliation of Consolidated Property NOI to Same Store Property NOI measures: Rental revenues $ 1,938 $ 1,756 Rental expenses (439 ) (408 ) Consolidated Property NOI $ 1,499 $ 1,348 Adjustments to derive same store results: Property NOI from consolidated properties not included in same store portfolio and other adjustments (1) (263 ) (174 ) Property NOI from unconsolidated co-investment ventures included in same store portfolio (1)(2) 807 753 Third parties' share of Property NOI from properties included in same store portfolio (1)(2) (641 ) (612 ) Prologis Share of Same Store Property NOI – Net Effective (2) $ 1,402 $ 1,315 6.6 % Consolidated properties straight-line rent and fair value lease amortization included in same store portfolio (3) (116 ) (113 ) Unconsolidated co-investment ventures straight-line rent and fair value lease amortization included in same store portfolio (3) (17 ) (11 ) Third parties' share of straight-line rent and fair value lease amortization included in same store portfolio (2)(3) 11 9 Prologis Share of Same Store Property NOI – Cash (2)(3) $ 1,280 $ 1,200 6.7 % (1) We exclude properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the period and properties acquired or disposed of to third parties during the period.
The following is a reconciliation of our consolidated rental revenues, rental expenses and property NOI for each quarter in 2025 and 2024 to the full year, as included in the Consolidated Statements of Income and within Note 18 to the Consolidated Financial Statements and to the respective amounts in our same store portfolio analysis for the three months ended December 31 (dollars in millions): Three Months Ended March 31, June 30, September 30, December 31, Full Year 2025 Rental revenues $ 1,987 $ 2,026 $ 2,054 $ 2,092 $ 8,159 Rental expenses (488 ) (488 ) (485 ) (503 ) (1,964 ) Property NOI $ 1,499 $ 1,538 $ 1,569 $ 1,589 $ 6,195 2024 Rental revenues $ 1,828 $ 1,852 $ 1,897 $ 1,938 $ 7,515 Rental expenses (454 ) (445 ) (427 ) (439 ) (1,765 ) Property NOI $ 1,374 $ 1,407 $ 1,470 $ 1,499 $ 5,750 Three Months Ended December 31, 2025 2024 % Change Reconciliation of Consolidated Property NOI to Same Store Property NOI measures: Rental revenues $ 2,092 $ 1,938 Rental expenses (503 ) (439 ) Consolidated Property NOI $ 1,589 $ 1,499 Adjustments to derive same store results: Property NOI from consolidated properties not included in same store portfolio and other adjustments (1) (228 ) (188 ) Property NOI from unconsolidated co-investment ventures included in same store portfolio (1)(2) 924 871 Third parties' share of Property NOI from properties included in same store portfolio (1)(2) (731 ) (698 ) Prologis Share of Same Store Property NOI – Net Effective (2) $ 1,554 $ 1,484 4.7 % Consolidated properties straight-line rent and fair value lease amortization included in same store portfolio (3) (117 ) (124 ) Unconsolidated co-investment ventures straight-line rent and fair value lease amortization included in same store portfolio (3) (37 ) (23 ) Third parties' share of straight-line rent and fair value lease amortization included in same store portfolio (2)(3) 27 13 Prologis Share of Same Store Property NOI – Cash (2)(3) $ 1,427 $ 1,350 5.7 % (1) We exclude properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the periods and properties acquired or disposed of to third parties during the periods.
The Class A common limited partnerships units (“Class A Units”) in the OP are entitled to a quarterly distribution equal to $0.64665 per unit so long as the common units receive a quarterly distribution of at least $0.40 per unit. We paid a quarterly cash distribution of $0.64665 per Class A Unit in 2024 and 2023.
Class A common limited partnership units ("Class A Units") Distributions The Class A Units in the OP were entitled to a quarterly distribution equal to $0.64665 per unit so long as the common units received a quarterly distribution of at least $0.40 per unit.
(1) Other Americas Europe Asia Total 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Strategic capital revenues ($) Recurring fees (2) 168 171 60 50 170 163 74 76 472 460 Transactional fees (3) 17 21 7 7 24 18 13 19 61 65 Promote revenue (4) 112 641 25 33 1 1 1 - 139 675 Total strategic capital revenues ($) 297 833 92 90 195 182 88 95 672 1,200 Strategic capital expenses ($) (4) (155 ) (204 ) (21 ) (27 ) (76 ) (103 ) (40 ) (51 ) (292 ) (385 ) Strategic Capital Segment – NOI ($) 142 629 71 63 119 79 48 44 380 815 (1) The U.S. expenses include compensation and personnel costs for employees who are based in the U.S. but also support other geographies.
(1) Other Americas Europe Asia Total 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 Strategic capital revenues ($) Recurring fees (2) 178 168 82 60 190 170 71 74 521 472 Transactional fees (3) 21 17 8 7 28 24 12 13 69 61 Promote revenue (4) - 112 - 25 1 1 1 1 2 139 Total strategic capital revenues ($) 199 297 90 92 219 195 84 88 592 672 Strategic capital expenses ($) (4) (132 ) (155 ) (22 ) (21 ) (73 ) (76 ) (44 ) (40 ) (271 ) (292 ) Strategic Capital Segment – NOI ($) 67 142 68 71 146 119 40 48 321 380 (1) The U.S. expenses include compensation and personnel costs for employees who are based in the U.S. but also support other geographies.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+1 added−2 removed4 unchanged
Biggest changeThe following table summarizes the future repayment of debt and scheduled principal payments at December 31, 2024 (dollars in millions): 2025 2026 2027 2028 Thereafter Total Fair Value Fixed rate debt $ 261 $ 1,469 $ 1,948 $ 2,552 $ 23,936 $ 30,166 $ 27,330 Weighted average interest rate (1) 3.4 % 3.4 % 2.3 % 3.3 % 3.2 % 3.2 % Variable rate debt Credit facilities $ - $ 163 $ 62 $ - $ - $ 225 $ 225 Secured mortgage debt 45 - - - - 45 44 Senior notes - - - - - - - Term loans 209 542 - 64 199 1,014 1,012 Total variable rate debt $ 254 $ 705 $ 62 $ 64 $ 199 $ 1,284 $ 1,281 (1) The weighted average interest rates represent the effective interest rates (including amortization of debt issuance costs and noncash premiums and discounts) at December 31, 2024 for the debt outstanding and include the impact of designated interest rate swaps, which effectively fix the interest rate on certain variable rate debt.
Biggest changeThe following table summarizes the future repayment of debt and scheduled principal payments at December 31, 2025 (dollars in millions): 2026 2027 2028 2029 Thereafter Total Fair Value Fixed rate debt $ 1,177 $ 2,034 $ 2,628 $ 3,430 $ 25,225 $ 34,494 $ 31,959 Weighted average interest rate (1) 2.9 % 2.2 % 3.2 % 2.7 % 3.4 % 3.2 % Variable rate debt Credit facilities $ - $ 45 $ - $ - $ - $ 45 $ 45 Secured mortgage debt 49 - - - - 49 49 Term loans 689 8 80 - 213 990 990 Total variable rate debt $ 738 $ 53 $ 80 $ - $ 213 $ 1,084 $ 1,084 (1) The weighted average interest rates represent the effective interest rates (including amortization of debt issuance costs and noncash premiums and discounts) at December 31, 2025 for the debt outstanding and include the impact of designated interest rate contracts, which effectively fix the interest rate on certain variable rate debt.
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 December 31, 2024. The results of the sensitivity analysis are summarized in the following sections. The sensitivity analysis is of limited predictive value.
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 December 31, 2025. The results of the sensitivity analysis are summarized in the following sections. The sensitivity analysis is of limited predictive value.
See also Notes 2 and 15 in the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for more information about our foreign operations and derivative financial instruments. We monitor our market risk exposures using a sensitivity analysis.
See also Notes 2 and 14 in the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for more information about our foreign operations and derivative financial instruments. We monitor our market risk exposures using a sensitivity analysis.
At December 31, 2024, 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 15 to the Consolidated Financial Statements, we had minimal net equity denominated in a currency other than the U.S. dollar.
At December 31, 2025, 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 14 to the Consolidated Financial Statements, we had minimal net equity denominated in a currency other than the U.S. dollar.
For the year ended December 31, 2024, $602 million or 7.3% 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.
For the year ended December 31, 2025, $697 million or 7.9% 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 December 31, 2024, 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.
At December 31, 2025, we had foreign currency contracts denominated principally in British pound sterling, Canadian dollar, euro and Japanese yen, with an aggregate notional amount of $1.4 billion.
At December 31, 2024, the weighted average effective interest rate on our variable rate debt was 2.9%, which was calculated using an average balance on our credit facilities throughout the year and our other variable rate debt balances at December 31, 2024. Changes in interest rates can cause interest expense to fluctuate on our variable rate debt.
At December 31, 2025, 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 December 31, 2025. 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 for the year ended December 31, 2024, which equates to a change in interest rates of 29 basis points on our average outstanding variable rate debt balances and 1 basis point on our average total debt balances.
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 $4 million for the year ended December 31, 2025, 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. 46 Table of Contents
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 $145 million cash payment on settlement of these contracts. 46 Table of Contents Interest Rate Risk We are also exposed to the impact of interest rate changes on future earnings and cash flows.
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 $140 million cash payment on settlement of these contracts.
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 December 31, 2024, $30.2 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 December 31, 2025, $34.5 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 December 31, 2025, $1.1 billion of our debt bore interest at variable rates.
Additionally, we hedge our foreign currency risk by entering into derivative financial instruments, such as foreign currency contracts, that we designate as net investment hedges, as these amounts offset the translation adjustments on the underlying net assets of our foreign investments.
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.
Removed
We primarily hedge our foreign currency risk by borrowing in the currencies in which we invest thereby providing a natural hedge.
Added
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.
Removed
At December 31, 2024, $1.3 billion of our debt bore interest at variable rates.

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