Operating Portfolio Metrics
The company leased a record 40.5 million square feet (3.8 million square meters) in its combined operating and development portfolios in the fourth quarter, and 145.3 million square feet (13.5 million square meters) in the full year 2012. Prologis ended the quarter with 94.0 percent occupancy in its operating portfolio, up 90 basis points over the prior quarter and 180 basis points over year end 2011. Tenant retention in the quarter was 87.3 percent, with tenant renewals totaling 25.1 million square feet (2.3 million square meters).

"Our team did an exceptional job setting another quarterly record for leasing around the globe," said Moghadam. "Increasing demand and lack of supply remain the theme in most markets, and we expect our overall rent change on rollover to turn positive this year. In the United States, in particular, occupancy in our small spaces increased 280 basis points year over year, and we expect this trend will continue given improvements in the housing market."

Same-store net operating income (NOI) increased 0.1 percent in the fourth quarter and 1.3 percent in the full year 2012. Rental rates on leases signed in the fourth quarter same-store pool decreased by 2.4 percent from in-place rents.

Dispositions and Contributions
Prologis completed $1.3 billion in contributions and dispositions in the fourth quarter, of which more than $1.0 billion was Prologis' share. This includes approximately:

-- $878 million of third-party building and land dispositions primarily in
the United States and Europe, of which $700 million was the company's
share; and
-- $401 million of contributions to Prologis European Properties Fund II,
Prologis Europe Logistics Venture, Prologis Targeted Europe Logistics
Fund, and joint ventures in Brazil, of which $325 million was the
company's share.
In the full year 2012, contributions and dispositions totaled $2.7 billion, of which more than $2.1 billion was the company's share.

Additionally, the company has approximately $5 billion of operating portfolio assets in Japan and Europe scheduled for contribution in the first quarter of 2013, in connection with Nippon Prologis REIT (NPR) and Prologis European Logistics Partners Sàrl (PELP), subject to the listing of NPR and customary closing conditions. The combination of these transactions, in conjunction with fourth quarter activity, positions the company ahead of its 10 Quarter Plan.

"We continue to make excellent progress executing on our priority to realign our portfolio," said Thomas Olinger, chief financial officer, Prologis. "These dispositions and contributions reflect the diversity of our activities as well as the market's demand for high quality industrial real estate."

Development Starts and Building Acquisitions
Committed capital during the fourth quarter 2012 totaled approximately $1.2 billion, of which $909 million was Prologis' share, including:

-- Development starts of $727 million, of which $613 million was Prologis'
share. These starts totaled 7.3 million square feet (675,000 square
meters), and monetized $190 million of land. The company's estimated
share of value creation on development starts in the fourth quarter was
$71 million.
-- Acquisitions of $458 million, including $276 million in buildings with a
stabilized capitalization rate of 7.4 percent and an investment of $182
million in land and land infrastructure. Of the total acquisitions, $295
million was Prologis' share.
Capital committed during the year totaled approximately $2.5 billion, of which $2.0 billion was the company's share. This included development starts of $1.6 billion, of which 57 percent were build-to-suits, and acquisitions of $983 million, including $544 million in buildings with a stabilized capitalization rate of 7.3 percent and an investment of $439 million in land and land infrastructure.

At quarter end, Prologis' global development pipeline comprised 22.5 million square feet (2.1 million square meters), with a total expected investment of $2.1 billion, of which Prologis' share was $1.9 billion. The company's share of estimated value creation at stabilization is expected to be $354 million, with a weighted average stabilized yield of 7.8 percent and a margin of approximately 19 percent.

Private Capital Activity
In 2012, Prologis raised or received commitments for $1.9 billion in new, third-party equity. This was primarily due to PELP, and also included Prologis Targeted U.S. Logistics Fund and Prologis Targeted Europe Logistics Fund.

The company continued streamlining its co-investment ventures into fewer, more profitable and differentiated investment vehicles, rationalizing six funds in 2012.

In the fourth quarter, Prologis concluded the Prologis North American Fund I. Two of the fund's assets were sold to third parties with the remaining portfolio divided up between the partners, of which Prologis' share was $117 million.

Capital Markets
Prologis completed approximately $1.1 billion of capital markets activity in the fourth quarter and $4.8 billion for the full year 2012. This includes debt financings, re-financings, and pay-downs.

Subsequent to quarter end, the company paid off $141 million of its 1.875 percent convertible notes and repaid $319 million of secured debt.

Guidance for 2013
Prologis established a full-year 2013 Core FFO guidance range of $1.60 to $1.70 per diluted share. On a GAAP basis, the company expects to recognize a range of a net loss of ($0.07) per share to net earnings of $0.03 per share. From a fourth quarter run rate perspective, this slight decline from 2012 is primarily due to near-term dilution from disposition and contribution activities, which are expected to significantly deleverage the company by the end of the first quarter.

The Core FFO and earnings guidance reflected above excludes any potential future gains (losses) recognized from real estate transactions. In reconciling from net earnings to Core FFO, Prologis makes certain adjustments, including but not limited to real estate depreciation and amortization expense, impairment charges, deferred taxes, early extinguishment of debt, and unrealized gains or losses on foreign currency or derivative activity.

The difference between the company's Core FFO and net earnings guidance for 2013 predominantly relates to real estate depreciation and recognized gains on real estate transactions.

The principal drivers supporting Prologis' 2013 guidance include the following:

-- Year end occupancy in its operating portfolio between 94 to 95 percent
(consistent with historical seasonal trends, the company expects
occupancy to decrease in the first quarter and trend higher through the
remainder of the year);
-- Same-store NOI growth of 1.5 to 2.5 percent, excluding the impact of
foreign exchange movements;
-- Development starts of $1.5 to $1.8 billion, of which approximately 75
percent is expected to be the company's share;
-- Building acquisitions of $400 to $600 million, of which approximately 35
percent is expected to be the company's share;
-- Building and land dispositions and contributions of $7.5 to $10.0
billion, of which approximately 60 percent is expected to be the
company's share; and
-- A euro exchange rate of $1.35; and a yen exchange rate of JPY 92 per
U.S. dollar.
Webcast and Conference Call Information
The company will host a webcast /conference call to discuss quarterly results, current market conditions and future outlook today, Feb. 6, 2013, at 12:00 p.m. U.S. Eastern Time. Interested parties are encouraged to access the live webcast by clicking the microphone icon located near the top of the opening page of the Prologis Investor Relations website (http://ir.prologis.com). Interested parties also can participate via conference call by dialing +1 877-256-7020 (from the U.S. and Canada toll free) or +1 973-409-9692 (from all other countries) and enter conference code 86463676

A telephonic replay will be available from Feb. 6 through March 6 at +1 855-859-2056 (from the U.S. and Canada) or +1 404-537-3406 (from all other countries), with conference code 86463676. The webcast and podcast replay will be posted when available in the "Financial Information" section of Investor Relations on the Prologis website.