ProLogis Reports FFO

DENVER-Locally based ProLogis, the world’s largest industrial REIT, reported 30 cents in Funds From Operations per diluted share, compared with 40 cents for the third quarter of 2002.

However, the FFO last year, were restated because the National Association of Real Estate Investment Trust modified its definition of FFO to include impairment charges. FFO is considered by many to be the most important reflection of a real estate investment’s financial health.

Prior to preferred share redemption and impairment charges, FFO per diluted share for the third quarter of 2003 was 52 cents, compared with 60 cents to the impairment charge in the third quarter of 2002.

The net loss per diluted share for the third quarter of 2003 was 4 cents compared with net earnings per diluted share of 14 cents in the third quarter of 2002.

Year-to-date net earnings per diluted share were 43 cents in 2003, compared with 76 cents in the comparable period of 2002.

In addition to NAREIT’s action, the Securities and Exchange Commission clarified its position with respect to the inclusion of original issuance costs in the carrying value of preferred shares.

In accordance with these changes, net earnings and FFO for the third quarter of 2003 for ProLogis include a charge representing an adjustment to the carrying value of certain of the U.K. temperature-controlled assets of 20 cents per diluted share, as a result of current negotiations for the sale of those assets.

Third quarter 2002 FFO has been restated to include an impairment charge related to the temperature- controlled business of $0.20 per diluted share that was recognized in 2002 but had not previously been reflected in FFO.

Net earnings and FFO for the third quarter of 2003 also include a charge of approximately 2 cents per diluted share related to the redemption of ProLogis Series E Preferred Shares in July.

ProLogis says it will change the accounting treatment of the redemptions of its Series A and Series B Preferred Shares in 2001, which will result in a restatement of both ProLogis’ net earnings and FFO for 2001 to include a charge of 3 cents per fully diluted share.

The company, however, does not anticipate an impact on its results in respect to its consolidated partnerships or ProLogis property funds.