In the first six months, FFO per diluted share was $1.16. Netearnings per diluted share for the six months ended June 30 were$0.66 compared with $0.47 in the comparable period of 2003.

"Overall, we've noted significant improvement in globalindustrial fundamentals," says K. Dane Brooksher, chairman andchief executive officer. "Virtually every North American market isreporting positive net absorption and occupancy gains. Rental rategrowth on lease renewals continues to be negative, although we arebeginning to see positive rent growth in a few strategicsubmarkets. Conditions in Europe also have improved, with increasedlease-up of inventory space and a significant pipeline of newbuild-to-suit requirements. In Japan, the pace of new developmentstarts year to date is strong, as evidenced by ProLogis' currentdevelopment pipeline."

Second quarter earnings reflect these improved marketconditions, he says. In addition, ProLogis has seen a significantamount of new leasing, "which led to same store occupancy gains of106 basis points and supported a higher level of CorporateDistribution Facilities Services contributions into our propertyfunds and dispositions," he adds. "This accelerated activity helpedus exceed the top end of our expected range for first-half FFO pershare. As a result, we are raising the bottom end of our full-yearFFO per share guidance, bringing our range to $2.37 to $2.45,before charges related to our preferred redemption and therelocation of our IT and corporate accounting functions from ElPaso to Denver."