For the second quarter of 2009, ProLogis, a leading provider of distribution facilities, earned a profit of $238.9 million on revenue of $263.4 million. Revenue was down 82 percent from $1.5 billion in the second quarter of 2008, but net profit was up 16 percent compared with $206.3 million a year earlier. Included in net profit for the second quarter of 2009 were gains primarily associated with the sale of non-development properties and not included in Funds From Operations.
Funds From Operations, including significant non-cash items, fell 51 percent to $137.2 million. "Funds From Operations" is a figure commonly used by real estate and other investment trusts to define the cash flow from their operations. FFO is calculated by adding depreciation and amortization expenses to net income, and subtracting gains on sales of property.
"During the second quarter, ProLogis made significant progress on the strategy we laid out last year to strengthen our balance sheet and increase liquidity in response to deteriorating global economic conditions. Our accomplishments have put the company on much firmer financial footing," said Walter C. Rakowich, chief executive officer. "However, the industry is facing declining rents, and we expect the challenging leasing environment will persist."
"We have substantially exceeded our 2009 de-levering goal and will continue to focus efforts on further debt repayment through incremental asset sales and contributions, which will be partially offset by funding the remaining costs associated with our development activities," said William E. Sullivan, chief financial officer. "Contributing to the de-levering process during the quarter was the repurchase of $816.2 million of notional debt at a discount, resulting in $143.3 million in gains from early extinguishment of debt."
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