Company: PLDGP
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000950170-25-021272
Chunk: 340

Company: Prologis, Inc.
Filing Date: 2025-02-14
Form: 10-K
Item: Item 7
Chunk 340
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 on short-term investments and mark-to-market adjustments associated with other financial investments.

We are exposed to foreign currency exchange risk related to investments in and earnings from our foreign investments. We primarily hedge our foreign currency risk related to our investments by borrowing in the currencies in which we invest thereby providing a natural hedge. We have issued debt in a currency that is not the same functional currency of the borrowing entity and have designated a portion of the debt as a nonderivative net investment hedge. We recognize the remeasurement and settlement of the translation adjustment on the unhedged portion of the debt and accrued interest in unrealized gains or losses. We may use derivative financial 

37

instruments to manage foreign currency exchange rate risk related to our earnings. We recognize the change in fair value of the undesignated derivative contracts in unrealized gains and losses. Upon settlement of these transactions, we recognize realized gains or losses.

The 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.

Income Tax Expense

We recognize income tax expense related to our taxable REIT subsidiaries and in the local, state and foreign jurisdictions in which we operate. Our current income tax expense (benefit) fluctuates from period to period based primarily on the