What were the primary drivers for the decrease in FFO and Net Income compared to the prior year?

The decrease in FFO and Net Income compared to the second quarter of 2008 was primarily due to the absence of incentive distribution and development gains that were recognized in the prior year. Additionally, an increase in the share count resulting from a March 2009 equity offering also impacted per-share metrics.

What actions has the company taken to manage its debt and improve its financial position?

The company has been actively reducing its debt, completing approximately $1.0 billion in debt repayments, repurchases, and extensions year-to-date. This includes $750 million in share of outstanding debt reduction and $241 million in debt activities during the second quarter, such as repurchasing bonds.

How is the company managing its portfolio in the current economic climate?

The company completed $461 million in property contributions and sales year-to-date, including $156 million in the second quarter, focusing on portfolio optimization. Leasing activity remains robust, with 5.8 million square feet commenced in the operating portfolio during Q2 2009. However, occupancy in the operating portfolio was 90.5% at June 30, 2009, and cash-basis same-store NOI declined 4.1% due to lower average occupancy and currency effects.

What is the company's liquidity position?

As of June 30, 2009, the company reported approximately $1.2 billion in liquidity, consisting of $1.0 billion of availability on its lines of credit and $209 million in cash.

PLD/PLDGP 8-K: Earnings & Results

Summary

AMB Property Corporation (now Prologis, Inc.) reported its second quarter 2009 results, highlighting a challenging operating environment characterized by reduced funds from operations (FFO) per share and net income per share compared to the prior year. The year-over-year decline in FFO was primarily attributed to the absence of incentive distribution and development gains seen in Q2 2008, as well as an increased share count following a March 2009 equity offering. The company actively managed its balance sheet through property dispositions totaling $461 million year-to-date and debt reduction efforts, including approximately $1.0 billion in debt repayments, repurchases, and extensions year-to-date. Despite the operational headwinds, AMB Property Corporation demonstrated a commitment to portfolio optimization and financial discipline. The company completed $156 million in property sales in the second quarter and reduced its outstanding debt by approximately $750 million. Liquidity remained a focus, with approximately $1.2 billion in available liquidity as of June 30, 2009. The company also reported ongoing development activities and leasing across its global portfolio, though same-store net operating income (NOI) on a cash basis saw a 4.1% decrease due to lower occupancy and currency effects. Management emphasized the use of supplemental FFO measures to provide a clearer view of operational performance, excluding charges like restructuring and impairment losses.

Key Highlights

1Funds From Operations (FFO) per diluted share was $0.34 for Q2 2009, down from $1.05 in Q2 2008.
2Net income per diluted share was $0.12 for Q2 2009, a significant decrease from $0.73 in Q2 2008.
3Year-to-date property dispositions totaled $461 million, with $156 million completed in Q2 2009.
4Total debt was reduced by approximately $750 million year-to-date.
5Liquidity stood at approximately $1.2 billion as of June 30, 2009.
6Cash-basis same-store net operating income (NOI) decreased by 4.1% in Q2 2009.
7The company incurred $3.8 million in restructuring charges in Q2 2009.

Prologis, Inc. 8-K Report, Financial Results (Jul 28, 2009)

Summary

Key Highlights

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