ProLogis 2007 Summary Annual Report

FINANCIAL PERFORMANCE | page 1 of 1

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FINANCIAL PERFORMANCE

ProLogis achieved strong results in 2007, growing FFO per share by 24.6%, to $4.61, and increasing our projected 2008 annual dividend to $2.07 per share, up 12.5%.

STRONG OPERATING RESULTS

All three of our business segments performed well. In our operating property segment, same-store net operating income was up 5.2%, driven by higher average occupancies and rent growth on expiring leases of 8.0%, compared with 2.6% in 2006. During the year, 78.2% of our customers renewed their leases upon expiration - the highest annual level in the past 10 years.

Our CDFS business was a significant driver of FFO growth in 2007, with $5.4 billion of contributions and dispositions at overall 17.1% margins. As part of these contributions, we acquired the outstanding shares of Macquarie ProLogis Trust and subsequently contributed the Trust's properties to a new fund, recognizing $95.2 million of gains, of which $68.6 million was in CDFS income and $26.6 million was in related foreign currency gains. Development activity in 2007 was well diversified, supported by strong demand across our global markets. We began $4.1 billion of new construction, up from $2.5 billion in 2006, and ended the year with a CDFS pipeline of $7.6 billion.

Continued strong leasing in this pipeline also drives growth in our investment management business as we recycle proceeds from contributions of CDFS properties into new development and increase recurring management fees and our share of each fund's FFO. Excluding our share of gains related to the IPO of ProLogis European Properties and recapitalization of three North American funds in 2006, investment management fund fees increased 29.7% and FFO from funds was up 49.4%.

We also enhanced our financial flexibility during the year, accessing both public and private debt under challenging market conditions. We completed two convertible note issuances totaling $2.4 billion and placed $6.1 billion in fund and joint venture debt. To support our investment management business, we also raised $5.0 billion of third-party equity commitments, reflecting continued strong institutional investor demand for high-quality assets.

William E. Sullivan
Chief Financial Officer

FINANCIAL PERFORMANCE | page 1 of 1

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