Prologis, Inc.

Welcome to the Prologis Q2 earnings conference call. My name is Jason and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. To ask a question at that time, please press star, then one on your telephone keypad. To remove yourself from the queue, press the pound key. Also note, this conference is being recorded. I'd now like to turn the call over to Tracy Ward. Tracy, you may begin.

Thanks, Jason, and good morning, everyone. Welcome to our second quarter 2020 earnings conference call. The supplemental document is available on our website at prologis.com under investor relations. I'd like to state that this conference call will contain forward-looking statements under federal securities laws. These statements are based on current expectations, estimates and projections about the markets, and the industry in which Prologis operates, as well as management's beliefs and assumptions. Forward-looking statements are not guarantees of performance, and actual operating results may be affected by a variety of factors. For a list of those factors, please refer to the forward-looking statement notice in our 10-K or SEC filings. Additionally, our second quarter results press release and supplemental do contain financial measures such as FFO and EBITDA that are non-GAAP measures. And in accordance with Reg G, we have provided a reconciliation to those measures. This morning, we'll hear from Tom Olinger, our CFO, who will cover results, real-time market conditions, and guidance. Hamid Moghadam, Gary Anderson, Chris Caton, Mike Curliss, Ed Neckritz, Gene Riley, and Colleen McEwen are also with us today. With that, I'll turn the call over to Tom, and Tom, will you please begin?

Thanks, Tracy, and thanks, everyone, for joining us today. We hope you and yours are all well. The second quarter played out better than our expectations in terms of both our results for the period and outlook for 2020 and beyond. Leasing activity in our portfolio, market fundamentals, valuations, and rent collections are all trending favorably. Starting with results, core FFO for the second quarter was $1.11 a share, which included 23 cents of net promote income. Core FFO excluding promotes came in above our forecast due to higher NOI and higher strategic capital revenues. The increase in NOI was driven by lower bad debt and higher occupancy. For comparison, the quarterly results were in line with our initial 2020 guidance that we provided back in January. Overall, rent collection trends are excellent, and as of yesterday, we've collected 98 percent and 92.1 percent of June. We've seen the pace of rent receipts accelerate each month, since March, with collections ahead of 2019 levels for each month as well. As a result, our bad debt provision for the second quarter was 58 basis points of rental revenues versus our forecast of 160 basis points. Our share of cash same-store and wide growth was 2.9%, which included a 42 basis point negative impact from bad debt. Turning to leasing and customer activity, segments benefiting from well-diversified, including from non-essential industries. E-commerce normalized to 24% due to leasing.