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DENVER-As expected, locally based ProLogis, the world’s largest industrial REIT, reported first quarter earnings below its performance a year ago. Revenues fell to $159.94 million from $172.26 million and its net income fell to $46.884 million from $63.175 million.

Funds from operations fell to $100.595 million from $106,169 million, which equates to 55 cents per share of FFO from 59 cents per share in the first quarter of 2002.

Net earnings per diluted share were 21 cents per share, compared with 31 cents a year earlier.

First-quarter results reflect the dilution from last year’s sale of the majority of the company’s temperature-controlled businesses and the expected shift in the timing of corporate distribution facilities services dispositions to the second half of 2003. Earnings also were affected by net foreign currency losses.

“Results for the first quarter were in line with expectations due to the steady performance of our CDFS business and growth in FFO and fees from our property funds,” says K. Dane Brooksher, chairman and CEO. “While market conditions in North America remain soft, we did not experience any significant deterioration in operating property performance, and in fact, saw an increase in activity levels and positive net absorption in many of our markets toward the end of the quarter. We continue to enjoy stable occupancies and rental rate growth in most of our markets in Europe and are seeing an increase in the interest level for new distribution space in Japan.”

“Although conditions appear to be stabilizing and possibly improving, given the continued delays in decision making related to geopolitical and economic uncertainty, we remain cautious and are more comfortable at the low to middle range of our earlier guidance of $2.37 to $2.50 in FFO per share for the year,” he adds. “As a result, we are lowering the top end of our range to $2.45 per share.”

The company added that its earnings per share guidance for the full year is $1.20 to $1.30, excluding the impact of foreign currency translation adjustments.

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