Prologis rents warehouses to companies that store and move goods, and earns fees for managing properties owned with investment partners. In the third quarter of 2026, higher rents helped its existing properties produce more income; across the first nine months, operating cash flow rose 14.1% to $4.393 billion. That cash covered shareholder dividends and work on existing buildings, but left only $739 million before development spending. A larger data center program and the planned SEGRO acquisition therefore make access to partners, property-sale proceeds and new financing central to the next stage of growth.
Analysis period: quarter and nine months ended September 30, 2026. Research cutoff: October 29, 2026, New York time. The latest verified materials are dated October 28.
1. Older leases are resetting to higher rents
Higher rents are increasing income from comparable buildings. Customers signing replacement leases are paying more than the previous tenants or contracts paid. Many older agreements were signed before rents rose, so Prologis can increase rent when those agreements expire even when current market rents are growing more slowly.
The cleanest test is the same group of properties in both periods. For the third quarter, Prologis’ ownership share of cash property income rose from $1.477 billion to $1.564 billion, an increase of 5.9%. This measure subtracts property operating expenses from rent and removes specified noncash lease-accounting effects. It includes the company’s share of partner-owned properties and excludes acquisitions and other changes that would make the comparison misleading.
| Operating measure | Third quarter 2025 | Third quarter 2026 |
|---|---|---|
| Cash income from comparable properties, Prologis share, $ million | 1,477 | 1,564 |
| Average occupancy, Prologis share | 94.7% | 95.1% |
| Cash rent increase on replacement leases, Prologis share | 29.4% | 23.4% |
| Increase in average rent over the lease term, Prologis share | 49.4% | 38.0% |
| Space covered by leases that commenced, owned and managed portfolio, million square feet | 65.603 | 55.915 |
Source: Third-quarter 2026 Form 10-Q, MD&A, “Same Store Analysis,” p. 44; third-quarter supplemental information, printed pp. 10–11. Lease commencements cover operating and development properties and generally exclude leases shorter than one year. The cash income measure is non-GAAP and is not consolidated operating cash flow.
The two rent measures answer different questions. Cash rent compares the new contract’s starting rent with the old contract’s ending rent, excluding free-rent periods and deeply discounted introductory rates. Average rent over the contract also reflects future scheduled increases and concessions. The 38.0% figure therefore does not mean cash receipts immediately rose by that amount.
The evidence also places limits on the strength of the recovery. Space covered by leases that began during the quarter declined 14.8% from a year earlier. Rent increases remained substantial but were smaller than in the same quarter of 2025. Across the whole owned and managed operating portfolio, September occupancy was 95.6%, slightly below 95.8% at December 2025. Higher rents and the timing of lease renewals are doing more work than a broad surge in occupied space.
Management estimated that market rents still exceeded rents embedded in existing leases by about 16% at September 30, measured using average rent over the lease term and Prologis’ ownership share. That creates room for further increases as contracts expire. The amount actually captured depends on tenants renewing or new tenants taking the space, and on market rents when that happens.
Source: Form 10-Q, MD&A, pp. 34–36 and 42–44. The 16% estimate is management’s lease mark-to-market measure, not a forecast of next year’s revenue growth.
The broader U.S. market supports an improving demand picture. CBRE reported that occupied industrial space increased by 104.6 million square feet in the quarter, while 79.4 million square feet of new buildings were completed. The increase in occupied space was the largest quarterly amount since late 2022. Vacancy fell to 6.4%, down 0.2 percentage points from a year earlier. Yet asking rents increased only 3.6% year over year. This helps explain why Prologis can achieve large increases over old leases without implying that today’s market rents are rising at the same speed.
Source: CBRE, “Q3 2026 U.S. Industrial & Logistics Market Report,” October 23, 2026, demand, deliveries, vacancy and asking-rent sections. CBRE’s national market and Prologis’ global portfolio cover different properties; their occupancy rates are not directly interchangeable.
2. Property sales explain much of the jump in profit
The rental business improved, but the 48.5% increase in nine-month common-shareholder profit greatly exceeds the growth in ongoing property operations. Property sales and contributions to investment ventures generated much larger gains. Foreign-currency, derivative and other income also improved sharply.
The quarter itself was less dramatic. Revenue rose 7.8%, while common-shareholder profit rose 6.9%. Operating income before property-transaction gains increased 4.9%. Its margin slipped from 40.3% to 39.2% because the increase in revenue was partly absorbed by depreciation, management costs and other expenses.
| Consolidated results, $ million except per-share amounts | Third quarter 2025 | Third quarter 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Revenue | 2,213.881 | 2,387.518 | 6,537.415 | 7,110.693 |
| Rental revenue | 2,054.200 | 2,205.269 | 6,066.797 | 6,507.427 |
| Operating income before property-transaction gains | 892.591 | 936.747 | 2,561.945 | 2,723.470 |
| Property-transaction gains, before income tax | 47.670 | 107.973 | 169.441 | 783.641 |
| Reported operating income | 940.261 | 1,044.720 | 2,731.386 | 3,507.111 |
| Net earnings attributable to common stockholders | 762.897 | 815.734 | 1,924.122 | 2,857.054 |
| Diluted earnings per share, $ | 0.82 | 0.86 | 2.06 | 3.04 |
Source: Form 10-Q, Prologis, Inc. consolidated statements of income, p. 2. Property-transaction gains combine development-property and land gains with gains on other property dispositions. They are included in reported operating income.
Across the first nine months, property-transaction gains increased by $614.200 million. The combined foreign-currency, derivative and other income line improved by another $272.315 million. Together, those two changes explain 80.7% of the $1.098 billion increase in pretax earnings. This is a pretax comparison, not an estimate of their after-tax contribution to common-shareholder profit.
The second item is broader than currency gains. It includes interest on short-term investments, sales of tax credits generated by the energy business and other income. It also benefited from the absence of much of the previous year’s unrealized currency and derivative losses. Treating the entire improvement as higher warehouse rent would therefore overstate the operating advance.
Source: Form 10-Q, Note 2 and MD&A, “Gains on Real Estate Transactions” and “Other Components of Income,” pp. 42 and 45–46. Calculation notes below reconcile the complete pretax change.
The property business remains the main source of earnings. Its nine-month segment income before depreciation and corporate overhead increased from $4.608 billion to $4.934 billion. U.S. properties supplied 94.2% of consolidated real estate segment revenue. Overseas exposure is larger than that percentage suggests because many international properties sit in investment ventures whose rental revenue is not consolidated line by line.
The fee-management business also grew, but unevenly. Nine-month strategic capital revenue increased from $438.652 million to $566.757 million. Performance fees from unconsolidated co-investment ventures rose from $1.245 million to $83.870 million, principally from a venture in the Other Americas region. These fees reward cumulative investment performance and arrive periodically. Management reported about $39 million after related strategic capital expenses, including compensation tied to performance fees earned in earlier periods. That amount is before any separately reported income-tax effects.
The latest quarter provides useful counterevidence to treating the full fee increase as a lasting step up. Strategic capital revenue rose, but its segment income declined slightly, from $81.081 million to $80.124 million, as expenses grew faster. Across the company, nine-month corporate overhead rose 15.6% to $384.113 million, principally because of compensation and inflationary increases. Scale has not prevented costs from rising.
Source: Form 10-Q, Notes 3 and 11; MD&A, pp. 36–41. Segment income is Prologis’ non-GAAP net operating income measure and excludes corporate overhead, depreciation and other items.
Management’s Core FFO, or funds from operations, is an adjusted earnings measure that gives a less volatile view of the improvement. It removes property depreciation, specified sale gains, deferred tax and other adjustments, with the company’s ownership share applied to ventures. Core FFO rose 8.3% in the quarter and 8.8% over nine months. The nine-month increase is much closer to revenue growth than to the jump in reported profit. Core FFO still includes performance-fee effects and noncash rent accounting, so the next question is how much actual cash was available for spending.
Sources: Form 10-Q, FFO definitions and reconciliation, pp. 51–53; third-quarter supplemental information, printed p. 8. The full reported-to-adjusted comparison appears in the calculation notes.
Management’s updated annual forecasts show the same need to separate property performance from final reported profit. On October 15, Prologis increased its expected full-year cash income growth from comparable properties, while reducing its forecast for reported earnings per share. These are forecasts for the whole of 2026, not results already earned.
| Management forecast for full-year 2026 | Previous range | October 15 range |
|---|---|---|
| Cash same-property income growth, Prologis share | 6.75%–7.25% | 7.00%–7.50% |
| Reported diluted earnings per share, $ | 4.40–4.55 | 4.05–4.15 |
Source: Prologis third-quarter results, October 15, 2026, “2026 Guidance.” The earnings forecast includes potential property-transaction gains and assumes constant foreign exchange rates. The release does not quantify a complete bridge explaining the reduction in that forecast.
3. More cash remained after dividends, but development used much more
Operating cash covered shareholder dividends and investment in existing buildings, leaving $739 million toward $2.386 billion of development spending. That is a better position than a year earlier, when only $401 million remained on the same basis. However, the development program also expanded.
| Consolidated cash allocation, $ million | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Cash generated by operations | 3,850.198 | 4,392.909 |
| Spending on tenant improvements, leasing commissions and property improvements | 626.113 | 631.031 |
| Cash dividends paid on common and preferred shares | 2,822.772 | 3,022.429 |
| Cash remaining after those two uses, calculated | 401.313 | 739.449 |
| Real estate development spending | 1,958.714 | 2,385.518 |
| Cash remaining after development, calculated | -1,557.401 | -1,646.069 |
Source: Form 10-Q, Prologis, Inc. consolidated cash-flow statements, p. 5. Spending rows are positive cash uses. This calculation excludes acquisitions, investments in ventures and distributions to outside owners of consolidated entities. It does not classify the disclosed improvement spending as entirely maintenance or entirely growth spending.
Operating cash rose by $542.711 million, substantially less than the increase in consolidated net earnings. The cash statement removes property-sale gains because the proceeds belong in investing cash flow. It also removes $501.708 million of straight-line rent and acquired-lease adjustments. Accounting spreads scheduled rent increases across the lease term, so some income is recorded before the associated cash arrives.
Payment timing helped cash generation. Changes in unpaid bills and other operating liabilities added $267.206 million to cash flow, versus $84.556 million a year earlier. Recording an expense before paying it leaves cash available in the meantime. Conversely, operating receivables from unconsolidated entities used $54.659 million, after releasing $8.166 million in the previous year. Money owed by those ventures had therefore increased. These timing effects matter when judging how much of the cash increase can fund repeated annual spending.
Source: Form 10-Q, cash-flow statements, p. 5, and MD&A, “Operating Activities,” p. 49.
Prologis met the wider investment bill through several sources. It received $1.532 billion of cash from property sales and contributions, raised $2.411 billion from issuing common stock before separately paid issuance costs, and received $1.709 billion of net cash from borrowings after repayments. Uses beyond the table included $1.627 billion for acquisitions, $383 million invested in unconsolidated entities and $222 million distributed to outside owners of consolidated entities.
The closing cash balance consequently rose to $2.273 billion. An additional $1.000 billion was held in short-term investments, funded from the equity offering. The larger cash balance reflects financing and asset recycling as well as better operations; it is not the amount left over from rent after all expansion costs.
Property contributions also supplied noncash funding. Prologis received $668.3 million of ownership interests in ventures, primarily in exchange for contributed properties. These transactions can produce a gain and retain an economic interest in the buildings without producing an equal amount of spendable cash. That helps explain why the $2.200 billion of disposition and contribution proceeds reported in the property note exceeds the cash-flow statement’s $1.532 billion.
Source: Form 10-Q, cash-flow statements and Notes 1, 2 and 12. The statement’s cash share-issuance proceeds and the equity statement’s proceeds after issuance costs use different presentations.
4. Data centers are increasing the size and complexity of development
Data centers accounted for more than half of the expected investment in consolidated projects started during the first nine months. Prologis started projects with a total expected cost of $3.896 billion, up from $1.966 billion a year earlier. About $2.1 billion of the 2026 starts related to data centers. These are full project budgets, not cash already spent during the period.
Management’s purpose is to use its land, development skills, customer relationships and ability to arrange electricity supply to meet demand for digital infrastructure. A site with suitable power can support a different customer need from an ordinary warehouse. The business benefit depends on securing customers and delivering the building and electricity when those customers need them.
The consolidated development portfolio had $3.2 billion already invested against an estimated completed cost of $6.1 billion, leaving roughly $2.9 billion to invest. Completion was expected before February 2029. Only 34.8% of the portfolio was leased. Data centers represented $2.6 billion of the expected total cost and 680 megawatts of power capacity. The whole portfolio’s leasing percentage should not be read as a separate data center occupancy figure.
Source: Form 10-Q, MD&A, “Development,” “Development Activity” and “Near-Term Principal Cash Sources and Uses,” pp. 34–35, 37, 40 and 46–47.
Customer-specific construction offers some protection. Such projects accounted for 67.9% of the expected investment in consolidated starts. Prologis disclosed $1.9 billion of remaining investment obligations to complete customer build-to-suit projects. Those obligations overlap the development program; they should not be added to the entire $2.9 billion remaining development estimate as if they were separate projects.
The power pipeline also needs careful reading. The supplemental report identifies 1.7 gigawatts secured under binding utility agreements, including the 680 megawatts under development, and another 4.1 gigawatts still in advanced discussions. The latter is potential capacity. It must become contracted power before it can support the planned projects on that basis.
Sources: Form 10-Q, Note 10 and MD&A, p. 40; third-quarter supplemental information, printed pp. 1 and 42, power pipeline and definitions.
Prologis’ October 28 customer research reinforces the commercial reason for this focus. In its survey with The Harris Poll, business leaders ranked power reliability first among factors influencing logistics locations. That is evidence of a customer concern, rather than contracted revenue. It supports the strategy’s direction while leaving actual lease signings and project completion as the tests of execution.
Source: Prologis, “2027 Supply Chain Outlook: Fast Delivery & Energy Define Logistics Networks,” October 28, 2026, survey findings. The company-sponsored survey covered more than 1,800 business leaders in six countries.
The expanding project program sits within an already larger balance sheet. In the table, equity is the amount left after subtracting liabilities from recorded assets:
| Consolidated financial position, $ million | December 31, 2025 | September 30, 2026 |
|---|---|---|
| Real estate properties after accumulated depreciation | 80,400.207 | 82,400.130 |
| Investments in and advances to unconsolidated entities | 11,093.936 | 11,505.548 |
| Assets held for sale or contribution | 203.344 | 545.788 |
| Cash and cash equivalents | 1,145.647 | 2,273.497 |
| Other assets | 5,881.122 | 7,169.743 |
| Total assets | 98,724.256 | 103,894.706 |
| Financing debt, carrying amount | 35,037.073 | 36,832.482 |
| Payables, accrued expenses and other liabilities | 5,933.175 | 6,720.593 |
| Total equity, including outside owners’ interests | 57,754.008 | 60,341.631 |
Source: Form 10-Q, consolidated balance sheets, p. 1, and Notes 2–4. The development portfolio is included in real estate properties, not additional to it.
The $2.000 billion increase in net property assets reflects acquisitions and construction alongside depreciation and disposals. Acquisitions included buying partners’ interests in previously unconsolidated ventures. One Asian transaction brought 74 operating properties into the consolidated accounts. Thus, growth in consolidated buildings does not represent only newly built space or purchases of buildings in which Prologis previously had no interest.
Other assets increased by $1.289 billion. Prologis placed $1.000 billion of offering proceeds into short-term investments, while $176.485 million of earlier investments matured during the period. Rights to use leased land and offices also increased from $671.7 million to $835.3 million. The quarterly filing does not provide a complete updated breakdown of customer receivables and lease intangibles. The disclosed cash-flow adjustments, rather than the total other-assets balance, provide the better evidence about collection timing.
Payables and accrued expenses rose by $828 million, while other liabilities fell by $41 million. The cash-flow statement separately identifies a smaller operating contribution from combined liability changes, and acquisitions introduced $1.1 billion of assumed debt and future-payment liabilities. The balance-sheet increase therefore cannot all be treated as cash preserved by delaying ordinary bills. For Prologis, expanding the asset base brings both future earning capacity and obligations that extend beyond current rental collections.
Source: Form 10-Q, balance sheets, cash-flow statements and Notes 1, 2 and 12.
5. SEGRO adds a second expansion program before the first is complete
SEGRO would materially enlarge Prologis’ European business, with financing already arranged but completion still conditional. Management’s stated purpose is to connect the companies’ customer networks and combine their operating and development capabilities. At announcement, Prologis projected a combined European operating portfolio of 368 million square feet, a 47% increase in its European footprint.
The August agreement valued SEGRO’s equity at approximately $18.8 billion at announcement. This is an equity transaction value, not the full acquisition cost including assumed debt. Under the agreed terms, SEGRO shareholders would receive 0.0920 Prologis shares for each SEGRO share, subject to a partial cash alternative capped at approximately £3.5 billion. SEGRO shareholders approved the transaction on September 28. The filing continued to expect completion in the first half of 2027, subject to remaining conditions, including regulatory approvals.
Sources: Prologis acquisition announcement, August 4, 2026, combination highlights and transaction terms; Form 10-Q, Note 1, “Proposed Combination.”
The target’s own trading update supports the operating rationale. SEGRO reported £70 million of new annual headline rent contracted in the first nine months, 32% more than a year earlier, and occupancy of 94.7%. That rent figure is the annual rate after incentives expire, not revenue earned during the nine months. Its October 21 update also confirmed that regulatory processes were continuing. SEGRO is a productive existing business, but its leases, development commitments and financing will become part of the execution task if the combination closes.
Source: SEGRO, third-quarter trading update, October 21, 2026, key highlights and reporting notes. Financial figures reflect SEGRO’s share of joint ventures. SEGRO’s property values and earnings are not added to Prologis’ U.S. GAAP accounts in this analysis.
The clearest financing risk lies in timing. Prologis arranged a £3.6 billion acquisition term loan, equivalent to $4.7 billion at September 30. It becomes available subject to closing and other conditions. Its initial maturity is one year after the acquisition closes, with two possible one-year extensions. This is separate from the $8.836 billion of existing liquidity reported at quarter-end. Drawing it would create a much shorter refinancing deadline than the company’s existing debt portfolio normally carries.
The loan’s rate will float with the relevant sterling or euro benchmark plus a margin; the margin at current ratings was 0.7 percentage points. The final cash election, the amount actually borrowed, the debt assumed from SEGRO and any later refinancing will determine the combined company’s financing burden. Management’s acquisition announcement expected the first full year’s Core FFO per share to be broadly unchanged to slightly lower, even assuming a full year of expected savings and other combination benefits. The stated case is therefore long-term business expansion, with integration and financing work required before benefits fully emerge.
Sources: Form 10-Q, Note 5, “Term Loans”; August 4 acquisition announcement, expected financial impact. The per-share statement is management’s conditional transaction forecast, not an achieved result.
The August public offering has already changed the capital base. Prologis issued 17.25 million shares and recorded $2.393 billion of additional equity after issuance costs. Common shares outstanding rose from 929.153 million to 950.396 million during the nine months. The increase also included 3.549 million shares exchanged for existing partnership units and 0.444 million shares from compensation plans. Unit exchanges convert existing ownership claims; they are not equivalent to raising new cash.
The larger share base spread quarterly earnings across more shares. The diluted average share count increased 1.2%, and reported diluted earnings per share rose from $0.82 to $0.86. Employee equity compensation also remains a real cost: $165.744 million was recognized in expenses and another $28.2 million was capitalized into assets during the nine months. The cash-flow statement reports no common-stock repurchase program spending during the period.
Source: Form 10-Q, equity and cash-flow statements, Notes 1, 7, 8 and 12. The diluted earnings calculation includes earnings associated with exchangeable partnership units; its numerator is reconciled in the calculation notes.
6. Existing debt gives time, but new borrowing costs more
Prologis has substantial borrowing capacity and mostly long-dated debt, while the cost of financing new investment is rising. Existing consolidated debt carried a weighted average effective rate of 3.2% and had 7.9 years remaining at September 30. Senior notes issued during the first nine months carried a 4.3% average effective rate. Replacing older debt and funding new projects at those higher rates gradually increases the interest bill.
Nine-month interest expense increased from $741.891 million to $817.552 million. Management attributed the increase principally to additional senior notes used for acquisition and development activity, and higher rates on new issues. About $92 million of interest was added to development costs rather than immediately expensed, compared with $75 million a year earlier. Financing costs therefore also enter the asset base and affect later results.
| Consolidated principal due, $ million | Amount at September 30, 2026 |
|---|---|
| Remaining three months of 2026 | 1,190.519 |
| 2027 | 2,045.692 |
| 2028 | 2,728.004 |
| 2029 | 3,391.541 |
| 2030 | 3,069.278 |
| Thereafter | 24,925.457 |
| Total contractual principal | 37,350.491 |
Source: Form 10-Q, Note 5 and MD&A, “Interest Expense,” p. 45. Principal exceeds the $36,832.482 million balance-sheet carrying amount because of unamortized discounts and issuance costs. The conditional SEGRO loan and SEGRO’s debt are not included in this schedule.
The near-term amounts are manageable relative to disclosed liquidity, but liquidity is not all cash. The $8.836 billion total comprised $2.273 billion of cash, $1.000 billion of short-term investments and $5.563 billion of available revolving credit. The investments mature between December 2026 and February 2027. Credit availability already deducts the capacity backing $786 million of commercial paper, so adding that paper program again would overstate resources.
Prologis reported compliance with its loan conditions, which test its ability to pay interest and other financing charges and limit how much debt it can carry. It did not disclose a full numerical cushion against each limit in this quarter’s discussion. The long maturity profile and available facilities provide time to fund projects and sell assets; they do not remove the need to preserve that borrowing capacity as the acquisition approaches.
Source: Form 10-Q, Note 5 and MD&A, “Debt,” p. 48.
Other commitments also compete for funds. Prologis had $884 million of outstanding equity commitments to unconsolidated co-investment ventures, principally in the U.S., with commitments expiring from 2026 through 2034. Those ventures had $20.496 billion of their own third-party debt. Prologis did not guarantee that debt, but venture interest and refinancing costs can reduce its share of earnings and distributions or create a need for further capital contributions.
Land and office leases carried $658.3 million of lease liabilities, compared with $643.5 million at December 2025. The latest full payment schedule, at December 2025, showed $1.525 billion of undiscounted payments spread over leases averaging 31 years. These operating obligations are separate from financing debt. Prologis also disclosed $749.1 million of bonds and letters of credit, principally supporting development and renewable energy projects; these are contingent obligations rather than an equivalent immediate cash payment.
Sources: Form 10-Q, Notes 2, 3, 5 and 10; 2025 Form 10-K, Note 3, lessee obligations, pp. 72–73. The annual lease-payment schedule predates the quarter-end balance.
The main disclosed legal and environmental issues do not currently carry a quantified material loss warning. Management said ordinary-course legal proceedings would not materially impair the business, and the quarterly contingency note reported no significant change in the relevant policies and practices. The annual accounts nevertheless included $208.0 million of environmental liabilities. Those are recognized cleanup obligations, not proof that all future environmental costs are covered. The reviewed disclosures provide no quantified range of additional reasonably possible litigation losses.
Tax remains an expense for Prologis, which operates as a real estate investment trust, or REIT. Taxable subsidiaries and foreign operations incur tax, and nine-month tax expense rose to $254.103 million from $121.323 million. Current tax expense was approximately $196 million; deferred expense was approximately $58 million. The annual filing described uncertain-tax liabilities or settlements in 2025 as immaterial. The main current business constraint remains funding and executing expansion, rather than a newly disclosed material tax or litigation claim.
Sources: Form 10-Q, Note 10, MD&A income taxes and Part II, Item 1; 2025 Form 10-K, Notes 6, 12 and 15, environmental liabilities, uncertain tax positions and litigation.
7. The business is improving; the next test is turning commitments into income
Prologis enters its next expansion phase with stronger rental cash generation, but a greater need to coordinate leasing, construction, asset sales and financing. Existing leases provide a credible source of further rental growth. Comparable-property income confirms that the improvement is not simply an acquisition accounting effect.
The much larger rise in reported profit is less representative of that operating progress because property gains and other income supplied most of the pretax increase. Meanwhile, dividends, development and acquisitions together require more cash than operations currently generate. Partner capital, sales and borrowing are established parts of the business model, and their availability now matters more as data center budgets grow and SEGRO approaches its expected closing window.
The assessment would strengthen if Prologis leases more of its development portfolio, converts agreed power into completed customer facilities and arranges lasting acquisition funding without consuming excessive operating flexibility. Delayed customer commitments, slower property sales or a large short-term loan balance after SEGRO closes would keep cash tied up longer and raise financing costs. The decisive outcome is whether the enlarged asset base starts producing enough additional rent and fees to support its larger funding needs.
Reporting basis and calculation notes
Reporting basis: This analysis uses Prologis, Inc.’s consolidated U.S. GAAP accounts, including Prologis, L.P. and controlled subsidiaries. The selected filing is Form 10-Q, accession 0001193125-26-436160, filed October 28, 2026, for the period ended September 30, 2026. The quarter is July–September; cumulative comparisons are January–September in both years. Balance-sheet comparisons use December 31, 2025. The operating partnership is not added a second time, and unconsolidated ventures are included only through the relevant ownership-adjusted measures.
Source: SEC submission history for Prologis, CIK 1045609; Form 10-Q, cover, explanatory note and Note 1. The complete filing is the financial-statement foundation. The company’s October 15 results and supplemental tables corroborate the financial amounts. Research incorporated dated primary materials through October 28 within the October 29 cutoff.
Calculation notes: profit growth. The table checks how much each reported line contributed to the change in earnings before tax. All amounts cover the consolidated company and precede income tax.
| First-nine-month pretax earnings bridge, $ million | Amount |
|---|---|
| Pretax earnings, 2025 | 2,204.407 |
| Increase in operating income before property gains | +161.525 |
| Increase in property-transaction gains | +614.200 |
| Increase in earnings from unconsolidated entities | +127.765 |
| Increase in interest expense | -75.661 |
| Improvement in currency, derivatives and other income | +272.315 |
| Change in debt-extinguishment results | -1.777 |
| Pretax earnings, 2026 | 3,302.774 |
The $1,098.367 million pretax increase, less $132.780 million of additional tax expense, equals the $965.587 million increase in consolidated net earnings. Subtracting the $32.765 million increase allocated to outside owners and adding the $0.110 million reduction in preferred dividends gives the $932.932 million increase in common-shareholder profit. Growth percentages divide the change by the matching prior-period amount. Margins divide the specified profit by consolidated revenue.
Source: Form 10-Q, consolidated income statements, p. 2.
Calculation notes: reported profit to Core FFO. FFO means funds from operations, an earnings measure used by property companies. It is not cash flow. The following table groups management’s exact adjustments while preserving the tax treatment and ownership adjustments. Dollar amounts are in millions; three decimal places allow the reconciliation to be reproduced.
| Reconciliation, $ million | Third quarter 2025 | Third quarter 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Reported earnings attributable to common stockholders | 762.897 | 815.734 | 1,924.122 | 2,857.054 |
| Add real-estate depreciation and amortization | +626.093 | +683.465 | +1,896.978 | +2,052.673 |
| Remove other property-sale gains, after related tax | -32.277 | -56.435 | -115.048 | -358.450 |
| Remove development and land gains, after the specified current-tax adjustment | -12.636 | -44.125 | -49.761 | -408.244 |
| Currency and other unrealized adjustments plus deferred-tax adjustments | -43.079 | +51.523 | +152.000 | +50.928 |
| Net adjustments for outside owners and unconsolidated entities | +124.632 | +94.555 | +369.352 | +342.406 |
| Debt-extinguishment and venture-formation adjustments | 0.000 | -0.144 | 0.000 | +7.826 |
| Core FFO attributable to common stockholders and unitholders | 1,425.630 | 1,544.573 | 4,177.643 | 4,544.193 |
The development-gain row subtracts the reported gains and adds back management’s specified current-tax expense on dispositions. For example, the 2026 nine-month deduction is $423.717 million of gains less $15.473 million of tax, or $408.244 million. The company’s disclosed tax adjustments are used throughout; no assumed tax rate is applied. The ownership row combines management’s adjustments at all three steps of its reconciliation; it prevents treating all venture income as Prologis’ own. The last adjustment in 2026 includes $6.049 million of venture-formation costs over nine months. Performance fees, equity compensation expense and straight-line rent effects remain in Core FFO.
Sources: Third-quarter supplemental information, printed p. 8, exact reconciliation; Form 10-Q, pp. 51–53, definitions and rounded nine-month reconciliation.
Calculation notes: profit to cash. The cash-flow statement begins with total consolidated earnings, including the portion belonging to outside owners. Venture earnings are replaced with the operating cash distributions actually received. Positive timing adjustments increase cash; negative amounts use cash.
| Consolidated operating cash bridge, $ million | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Consolidated net earnings | 2,083.084 | 3,048.671 |
| Depreciation and amortization | +1,957.278 | +2,131.324 |
| Equity compensation expense paid in awards rather than cash | +141.654 | +165.744 |
| Remove property-transaction gains | -169.441 | -783.641 |
| Remove straight-line rent and lease-amortization adjustments | -530.691 | -501.708 |
| Venture distributions received less venture earnings recorded | +186.264 | +133.663 |
| Combined receivable, other-asset and payable timing changes | -34.800 | +82.391 |
| Other disclosed reconciliation adjustments, net | +216.850 | +116.465 |
| Operating cash flow | 3,850.198 | 4,392.909 |
For 2026, the venture row is $529.846 million received less $396.183 million of earnings; the 2025 comparison is $454.682 million less $268.418 million. The timing row combines venture receivables, other assets, and payables and other liabilities. The final adjustment row comprises debt-cost amortization, unrealized currency and derivative results, debt-extinguishment results and deferred tax.
The next table checks how operations, investment and financing changed the cash balance. The statement reconciles cash and cash equivalents without adding a separate restricted-cash balance. The $1.000 billion of September 2026 short-term investments is excluded from closing cash.
| Change in consolidated cash and cash equivalents, $ million | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Opening cash | 1,318.591 | 1,145.647 |
| Operating cash inflow | +3,850.198 | +4,392.909 |
| Investing cash outflow | -3,655.572 | -4,015.205 |
| Financing cash inflow or outflow | -345.337 | +757.667 |
| Currency effects | +18.142 | -7.521 |
| Closing cash | 1,186.022 | 2,273.497 |
Source: Form 10-Q, cash-flow statements, p. 5, and Notes 1 and 5.
Calculation notes: equity, shares and debt. Total assets reconcile to liabilities plus equity: $103,894.706 million = $43,553.075 million + $60,341.631 million at September 2026; $98,724.256 million = $40,970.248 million + $57,754.008 million at December 2025.
Parent-company stockholders’ equity increased from $53,193.178 million to $55,909.034 million. Paid-in capital, which records capital supplied by owners, increased by $2,613.200 million, principally from the offering and exchanges of partnership units. Accumulated currency and hedge losses narrowed by $263.603 million.
Dividends exceeded earnings attributable to controlling interests by $161.159 million. This increased the cumulative “distributions in excess of net earnings” account by the same amount. The account shows how accumulated distributions compare with accumulated earnings; it is not a separate cash obligation. No separate treasury-stock balance is presented. Outside owners’ equity decreased by $128.233 million, leaving total consolidated equity up $2,587.623 million.
Quarterly diluted EPS uses $832.515 million of adjusted earnings divided by 968.511 million diluted shares in 2026, versus $781.678 million divided by 956.603 million in 2025. The earnings adjustment adds the income belonging to exchangeable partnership units, because the share calculation assumes their exchange. Simply dividing reported common-shareholder earnings by that larger share count would use inconsistent scopes.
Contractual debt principal of $37,350.491 million, less $379.347 million of net unamortized discounts and $138.662 million of issuance costs, equals the $36,832.482 million carrying amount. Effective interest rates include financing-cost amortization and designated interest-rate hedges; they are not simply contractual coupon rates.
Source: Form 10-Q, balance sheets and equity statements, pp. 1 and 4; Notes 5, 8 and 9.
This analysis is for information and education. It is not investment advice or a recommendation to transact in securities.