exv99w1

Exhibit 99.1

PROLOGIS REPORTS GROWTH IN SECOND QUARTER FFO AND EARNINGS PER SHARE

Strong Operating Property Fundamentals, Development Gains and
Growth in Property Fund Business Support 20% Increase in FFO per Share;
Company Increases Guidance for 2006 FFO and Earnings per Share

Denver, Colo. — July 27, 2006 — ProLogis (NYSE: PLD), a leading global provider of distribution facilities and services, today reported funds from operations as defined by ProLogis (FFO) of $0.90 per diluted share for the second quarter of 2006, a 20% increase over adjusted FFO of $0.75 in the second quarter of 2005. After relocation charges and recognition of cumulative translation losses and impairment charges related to the sale of its temperature-controlled business, FFO for the second quarter of 2005 was $0.67 per share. Net earnings per diluted share were $0.66 for the second quarter of 2006, compared with $0.40 for the same period in 2005.

For the six months ended June 30, 2006, adjusted FFO was $1.80 per diluted share, up 31.4% from $1.37 in the first six months of 2005. After $0.01 of merger integration and relocation expenses in 2006 and $0.15 related to the charges noted above in the first half of 2005, FFO per diluted share was $1.79 for the six months ended June 30, 2006, compared with $1.22 in the prior year. Net earnings per diluted share for the six months ended June 30, 2006, were $1.39, compared with $0.69 in the comparable period of 2005.

“Globalization and free trade continue to fuel strong growth in our industry,” said Jeffrey H. Schwartz, chief executive officer. “Companies around the world are focused on maximizing the efficiency of their supply chains, and they need modern, well-located distribution facilities to achieve that objective. With our global platform, deep customer relationships and industry-leading development and marketing expertise, ProLogis remains extremely well positioned to capitalize on these long-term trends.”

In the quarter, ProLogis saw improvement in all three of its operating segments: property operations, development and property funds. “Occupancy levels and leasing activity remained strong, and we are pleased to have achieved positive rent growth of 2.5% on lease turnovers and NOI growth of 3.0% in our same-store pool,” Schwartz said. “We believe we are well positioned with our leading market positions and geographically diverse development pipeline to capture additional opportunities for growth provided by the current market environment.”

ProLogis is increasing full-year guidance for adjusted FFO per share to $3.15 — $3.25 and earnings per share to $2.20 — $2.45. There is also the potential to realize up to an additional $0.50 in earnings per share from the recognition of gains on non-CDFS property dispositions. “The synergies from the Catellus merger combined with brisk leasing in our Corporate Distribution Facilities Services (CDFS) pipeline, continued strong CDFS margins and solid improvement in occupancies and rental rate growth support our optimistic outlook,” Schwartz said. Previous guidance was $2.95 - $3.15 in FFO per share and $1.85 — $2.25 in earnings per share. The company added that its FFO per share guidance is prior to first-half adjustments of merger integration and corporate relocation charges of $0.01 per share.

Development Business and Property Operations Fundamentals Strengthen

Leasing in the company’s stabilized properties remained strong at 95.2% for the quarter. ProLogis also reported a year-to-date increase in same-store average occupancy of 3.4%, compared with a year ago. “Across our global markets, net absorption of new development deliveries is resilient, and new supply remains in check. Nowhere is this more evident than in North America, where over 43 million square feet of new space was absorbed in the top 30 logistics markets in the second quarter, consistent with the pace of absorption in 2005.

“In Europe, leasing of new deliveries continues to be brisk. Our development and leasing activity in central Europe is accelerating, and we remain well-leased in western Europe, despite mixed economic conditions. Our business in Asia continues to grow, with new development in Japan driven by structural changes in distribution networks and strong demand from our major global customers. In China, increased domestic demand for goods has driven our expansion into the coastal markets of Qingdao, Hangzhou and Ningbo,” Schwartz said.

New Development Leasing Drives CDFS Gains and Further Expansion of Pipeline

Gross proceeds from CDFS dispositions of $864 million for the year to date were up 35.8% over dispositions for the first half of 2005, leading to a 30.6% increase in CDFS disposition income. Leasing in the 30.6 million square feet of developments completed in the last 12 months, including those in CDFS joint ventures, was 70.9% at June 30, 2006, supporting year-to-date starts of $1.4 billion. ProLogis’ pipeline of CDFS completed developments, repositioned acquisitions and properties under development now stands at a record $4.55 billion, supporting future disposition activity and growth in CDFS income and fund assets.

“Our ability to address customers’ distribution space needs through our unparalleled global reach helped drive the quarter’s strong development and leasing activity,” Walter C. Rakowich, president and chief operating officer, said. “During the quarter, more than half of our seven million square feet of new CDFS leases were with repeat customers, including: adidas in Seoul, South Korea; Amazon in Suzhou, China; Kuehne & Nagel in Tokyo and Los Angeles; and Tesco in the Midlands, UK and in Teresin, Poland. Buoyant markets also supported new inventory starts in Juarez, Mexico, the I-81 corridor in Pennsylvania, Warsaw, southern France, Shanghai and Tokyo. Demand for well-located space in these major logistics markets remains strong, and we’re seeing significant customer interest in many of our sites — well in advance of planned completion,” Mr. Rakowich added.

Second Quarter 2006 Selected Financial and Operating Information

•		Achieved adjusted FFO per share growth of 20% over second quarter of 2005.

•		Realized year-to-date FFO from CDFS transactions of $167.5 million, including recognition of previously deferred proceeds from the first quarter contribution of properties from North American Property Funds II, III and IV to ProLogis North American Industrial Fund, up from $128.3 million in the same period of 2005. FFO amounts do not include unrecognized deferred gains of $33.9 million related to new development contributions for the year to date and $25.7 million for the same period in 2005. Post-deferral, post-tax CDFS margins were 21.0% for the transactions completed year to date.

•		Recycled $500.3 million of capital through CDFS contributions and dispositions during the quarter and $863.8 million year to date.

•		Started new developments, including those within CDFS joint ventures, with total expected investment of $514.0 million during the quarter and $1.40 billion year to date. Year-to-date starts include $97.0 million of retail development.

•		Increased ProLogis’ share of FFO from property funds to $79.0 million for the year to date, including earnings from the fund transaction noted above, up 71.4% from $46.1 million in the prior year.

•		Grew first half fee income from property funds to $58.9 million, including the incentive fee from the fund transaction noted above, up 78.5% from $33.0 million in 2005.

•		Achieved development management fees, FFO from CDFS joint ventures and other unconsolidated investees and interest income on long-term notes receivable of $65.4 million year to date.

•		Increased total assets owned and under management to $24.8 billion, up from $22.3 billion at December 31, 2005.

•

Improved average year-to-date same-store net operating income by 3.5% (a 3.8% increase when straight-lined rents and lease amortization are excluded) while same-store occupancies increased by 3.4% for the same period.

Copies of ProLogis’ second quarter 2006 supplemental information will be available from the company’s website at http://ir.prologis.com or by request at 800-820-0181. The supplemental information also is available on the SEC’s website at http://www.sec.gov. The related conference call will be available via a live webcast on the company’s website at http://ir.prologis.com at 10:00 am Eastern Time on Thursday, July 27, 2006. A replay of the webcast will be available on the company’s website until August 10, 2006.

ProLogis is a leading provider of distribution facilities and services with 404.3 million square feet (37.6 million square meters) in 2,401 properties owned, managed and under development in 81 markets in North America, Europe and Asia as of June 30, 2006. We continue to expand the industry’s first and largest global network of distribution facilities with the objective of building shareholder value. We expect to achieve this through the ProLogis Operating System^{^®} and our commitment to provide exceptional facilities and services to meet our customers’ expansion and reconfiguration needs.

In addition to historical information, this press release contains forward-looking statements under the federal securities laws. Because these statements are based on current expectations, estimates and projections about the industry and markets in which ProLogis operates, management’s beliefs and assumptions made by management, they involve uncertainties that could significantly impact ProLogis’ financial results. Forward-looking statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict. Actual operating results may be affected by changes in general economic conditions; increased or unanticipated competitive market conditions; changes in financial markets, interest rates and foreign currency exchange rates that could adversely affect ProLogis’ cost of capital, its ability to meet its financing needs and obligations and its results of operations; the availability of private capital; geopolitical concerns and uncertainties and therefore, may differ materially from what is expressed or forecasted in this press release. For a discussion of factors that could affect ProLogis’ financial condition and results of operations, refer to “Item 1A — Risk Factors” in ProLogis’ Annual Report on Form 10-K for the year ended December 31, 2005.


Investor Relations	Media	Financial Media
Melissa Marsden	Arthur Hodges	Suzanne Dawson
303-567-5622	303-567-5667	Linden Alschuler & Kaplan, Inc
mmarsden@prologis.com	media@prologis.com	212-329-1420
		sdawson@lakpr.com

ProLogis

Second Quarter 2006
Unaudited Financial Results

Selected Financial Information

(in thousands, except per share amounts and percentages)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2006 (1)		2005 (2)		% Change	2006 (1)		2005 (2)		% Change


Net earnings attributable to common shares (see pages 2 and 2a):
Net earnings attributable to common shares	$	168,397	$	77,169	118.2%	$	351,556	$	132,243	165.8%
Net earnings per diluted share attributable to common shares	$	0.66	$	0.40	65.0%	$	1.39	$	0.69	101.4%

FFO and FFO, as adjusted (see pages 3 and 4 and see definition of FFO on pages 3a and 3b):
FFO attributable to common shares	$	228,911	$	130,744	75.1%	$	454,209	$	236,767	91.8%
Add back:
Merger integration expenses (3)		306		—			2,630		—
Relocation expenses (4)		45		1,052			93		3,803
Cumulative translation losses and impairment charges related to temperature-controlled distribution assets (5)		—		13,780			—		26,864

FFO attributable to common shares, as adjusted	$	229,262	$	145,576	57.5%	$	456,932	$	267,434	70.9%


FFO per diluted share attributable to common shares	$	0.90	$	0.67	34.3%	$	1.79	$	1.22	46.7%
Add back:
Merger integration expenses (3)		—		—			0.01		—
Relocation expenses (4)		—		0.01			—		0.02
Cumulative translation losses and impairment charges related to temperature-controlled distribution assets (5)		—		0.07			—		0.13

FFO per diluted share attributable to common shares, as adjusted	$	0.90	$	0.75	20.0%	$	1.80	$	1.37	31.4%


EBITDA (see page 5):
EBITDA	$	361,792	$	216,169	67.4%	$	702,972	$	407,614	72.5%

Distributions:
Actual distributions per common share (6)	$	0.40	$	0.37	8.1%	$	0.80	$	0.74	8.1%


	June 30,		December 31,
	2006		2005 (2)		% Change


Total Assets, net of accumulated depreciation (see page 6)	$	14,310,786	$	13,126,180	9.1%


Total Book Assets:
Direct investment	$	13,262,696	$	12,293,351
Our share of total book assets of unconsolidated investees:
Property funds (see page 11)		2,475,381		2,204,910
CDFS joint ventures (7)		240,245		212,304
Other unconsolidated investees (7)		216,006		156,581

		2,931,632		2,573,795


Totals	$	16,194,328	$	14,867,146	8.9%


Assets Owned and Under Management:
Real estate assets owned directly, before depreciation (see page 6)	$	12,671,174	$	11,875,130
Assets owned by our unconsolidated investees:
Real estate assets owned by property funds, before depreciation (wtd. ownership interest of 21.7%) (see page 11)		11,474,591		9,915,115
Real estate assets owned by CDFS joint ventures, before depreciation (wtd. ownership interest of 50%) (7)		404,590		440,463

Investment in other unconsolidated investees (7)		170,501		112,012

Discontinued operations — net assets held for sale (10)		124,659		—


Totals	$	24,845,515	$	22,342,720	10.8%

The definition of FFO is on pages 3a and 3b and the definition of EBITDA is on page 5.

Footnote references are to pages 8 through 8d.

Supplemental Information Page 1

ProLogis

Second Quarter 2006
Unaudited Financial Results

Consolidated Statements of Earnings

(in thousands)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006 (1)			2005 (2)			2006 (1)			2005 (2)

Revenues:
Rental income (8)(9)(10)	$	223,681		$	130,461		$	450,460		$	261,663
CDFS disposition proceeds (11)(12)(13)(14)		433,854			317,995			738,864			600,586
Property management and other fees and incentives (14) (see page 10 and 10a)		20,329			16,478			58,897			33,005
Development management and other income (11)		11,258			3,195			15,426			3,326

Total revenues		689,122			468,129			1,263,647			898,580

Expenses:
Rental expenses (8)(10)		57,051			35,407			116,624			72,829
Cost of CDFS dispositions (11)(12)(13)		348,552			245,047			586,838			472,297
General and administrative		38,787			24,109			72,575			48,043
Depreciation and amortization (10)		69,818			41,425			142,111			82,895
Merger integration expenses (3)		306			—			2,630			—
Relocation expenses (4)		45			1,052			93			3,803
Other expenses		3,421			1,369			5,947			3,282

Total expenses		517,980			348,409			926,818			683,149


Operating income		171,142			119,720			336,829			215,431

Other income (expense):
Earnings from unconsolidated property funds (14) (see page 10 and 10a)		10,969			11,004			67,414			22,775
Earnings (losses) from CDFS joint ventures and other unconsolidated investees (7)		33,904			(131	)		37,421			367
Interest expense (10)(15)		(68,663	)		(34,761	)		(139,516	)		(71,253	)
Interest income on long-term notes receivable (11)		4,286			—			9,322			—
Interest and other income, net		709			2,300			5,283			3,447

Total other income (expense)		(18,795	)		(21,588	)		(20,076	)		(44,664	)

Earnings before minority interest		152,347			98,132			316,753			170,767
Minority interest		(851	)		(1,261	)		(1,976	)		(2,602	)


Earnings before certain net gains		151,496			96,871			314,777			168,165
Gains recognized on dispositions of certain non-CDFS business assets, net		—			—			13,709			—
Foreign currency exchange gains, net (16)		8,569			3,695			7,247			3,581

Earnings before income taxes		160,065			100,566			335,733			171,746

Income taxes (17):
Current income tax expense		27,892			3,577			41,089			4,750
Deferred income tax expense		5,413			1,982			5,582			2,821

Total income taxes		33,305			5,559			46,671			7,571

Earnings from continuing operations		126,760			95,007			289,062			164,175
Discontinued operations (10):
Income attributable to disposed properties and assets held for sale		3,797			1,876			9,561			3,738
Losses related to temperature controlled distribution assets (5)		—			(13,780	)		—			(25,150	)
Gains (losses) recognized on dispositions, net:
Non-CDFS business assets		34,223			—			50,651			2,207
CDFS business assets		9,971			420			14,990			(19	)

Total discontinued operations		47,991			(11,484	)		75,202			(19,224	)

Net earnings		174,751			83,523			364,264			144,951
Less preferred share dividends		6,354			6,354			12,708			12,708

Net earnings attributable to common shares	$	168,397		$	77,169		$	351,556		$	132,243

Footnote references are to pages 8 through 8d.

Supplemental Information Page 2

ProLogis

Second Quarter 2006
Unaudited Financial Results

Consolidated Statements of Earnings

(Continued)

(in thousands, except per share amounts)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2006 (1)		2005 (2)			2006 (1)		2005 (2)


Weighted average common shares outstanding — Basic		244,998		186,715			244,642		186,436
Weighted average common shares outstanding — Diluted		255,196		196,761			255,093		196,484

Net earnings (loss) per share attributable to common shares — Basic:
Continuing operations	$	0.49	$	0.47		$	1.13	$	0.81
Discontinued operations		0.20		(0.06	)		0.31		(0.10	)

Net earnings per share attributable to common shares — Basic	$	0.69	$	0.41		$	1.44	$	0.71


Net earnings (loss) per share attributable to common shares — Diluted:
Continuing operations	$	0.47	$	0.46		$	1.10	$	0.79
Discontinued operations		0.19		(0.06	)		0.29		(0.10	)

Net earnings per share attributable to common shares — Diluted	$	0.66	$	0.40		$	1.39	$	0.69

Calculation of Net Earnings per Share Attributable to Common Shares — Diluted

(in thousands, except per share amounts)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2006 (1)		2005 (2)		2006 (1)		2005 (2)

Net earnings attributable to common shares — Basic	$	168,397	$	77,169	$	351,556	$	132,243
Minority interest (a)		851		1,261		1,976		2,602

Adjusted net earnings attributable to common shares — Diluted	$	169,248	$	78,430	$	353,532	$	134,845


Weighted average common shares outstanding — Basic		244,998		186,715		244,642		186,436
Incremental weighted average effect of conversion of limited partnership units		5,154		5,539		5,258		5,541
Incremental weighted average effect of potentially dilutive instruments (a)		5,044		4,507		5,193		4,507

Weighted average common shares outstanding — Diluted		255,196		196,761		255,093		196,484


Net earnings per share attributable to common shares — Diluted	$	0.66	$	0.40	$	1.39	$	0.69

(a)

On a weighted average basis, the total potentially dilutive instruments outstanding were 10,858 and 10,986 for the three months ended June 30, 2006 and 2005, respectively, and 10,998 and 11,083 for the six months ended June 30, 2006 and 2005, respectively.

Footnote references are to pages 8 through 8d.

Supplemental Information Page 2a

ProLogis

Second Quarter 2006
Unaudited Financial Results

Consolidated Statements of Funds From Operations (FFO)

(in thousands, except per share amounts)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006 (1)			2005 (2)			2006 (1)			2005 (2)


Revenues:
Rental income (8)	$	232,429		$	136,079		$	479,449		$	273,002
CDFS disposition proceeds (10)(11)(12)(13)(14)		491,540			324,828			844,781			610,355
Property management and other fees and incentives (14) (see page 10 and 10a)		20,329			16,478			58,897			33,005
Development management and other income (11)		11,258			3,195			15,426			3,326

Total revenues		755,556			480,580			1,398,553			919,688

Expenses:
Rental expenses (8)		61,106			37,237			131,986			76,543
Cost of CDFS dispositions (10)(11)(12)(13)		396,267			251,460			677,299			482,085
General and administrative		38,787			24,109			72,575			48,043
Depreciation of corporate assets		1,932			1,618			4,815			3,363
Merger integration expenses (3)		306			—			2,630			—
Relocation expenses (4)		45			1,052			93			3,803
Other expenses		3,421			1,369			5,947			3,282

Total expenses		501,864			316,845			895,345			617,119


		253,692			163,735			503,208			302,569
Other income (expense):
FFO from unconsolidated property funds (14) (see page 10 and 10a)		25,116			23,600			79,047			46,134
FFO from CDFS joint ventures and other unconsolidated investees (7)		35,877			270			40,614			1,106
Interest expense		(68,903	)		(34,877	)		(140,390	)		(71,485	)
Interest income on long-term notes receivable (11)		4,286			—			9,322			—
Interest and other income		709			2,300			5,283			3,447
Foreign currency exchange gains, net (16)		8,507			688			8,174			419
Current income tax expense (17)		(23,168	)		(3,577	)		(36,365	)		(4,750	)
Losses related to temperature controlled distribution assets (5)		—			(13,780	)		—			(25,363	)

Total other income (expense)		(17,576	)		(25,376	)		(34,315	)		(50,492	)


FFO		236,116			138,359			468,893			252,077

Less preferred share dividends		6,354			6,354			12,708			12,708
Less minority interest		851			1,261			1,976			2,602

FFO attributable to common shares	$	228,911		$	130,744		$	454,209		$	236,767


Weighted average common shares outstanding — Basic		244,998			186,715			244,642			186,436
Weighted average common shares outstanding — Diluted		255,196			196,761			255,093			196,484

FFO per share attributable to common shares:
Basic	$	0.93		$	0.70		$	1.86		$	1.27

Diluted	$	0.90		$	0.67		$	1.79		$	1.22

See Consolidated Statements of Earnings on Pages 2 and 2a, the definition of FFO on pages 3a and 3b and the Reconciliations of Net Earnings to FFO on Page 4.

Footnote references are to pages 8 through 8d.

Supplemental Information Page 3

ProLogis

Second Quarter 2006
Unaudited Financial Results

Consolidated Statements of FFO (Continued)

Calculation of FFO per Share Attributable to Common Shares — Diluted
(in thousands, except per share amounts)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2006 (1)		2005 (2)		2006 (1)		2005 (2)

FFO attributable to common shares — Basic	$	228,911	$	130,744	$	454,209	$	236,767
Minority interest		851		1,261		1,976		2,602

FFO attributable to common shares — Diluted	$	229,762	$	132,005	$	456,185	$	239,369

Merger integration expenses (3)		306		—		2,630		—
Relocation expenses (4)		45		1,052		93		3,803
Cumulative translation losses and impairment charges related to temperature-controlled distribution assets (6)		—		13,780		—		26,864

FFO attributable to common shares, as adjusted — Diluted	$	230,113	$	146,837	$	458,908	$	270,036


Weighted average common shares outstanding — Basic		244,998		186,715		244,642		186,436
Incremental weighted average effect of conversion of limited partnership units		5,154		5,539		5,258		5,541
Incremental weighted average effect of potentially dilutive instruments		5,044		4,507		5,193		4,507

Weighted average common shares outstanding — Diluted		255,196		196,761		255,093		196,484


FFO per share attributable to common shares — Diluted	$	0.90	$	0.67	$	1.79	$	1.22

FFO per share attributable to common shares, as adjusted — Diluted	$	0.90	$	0.75	$	1.80	$	1.37

See Consolidated Statements of Earnings on Page 2 and 2a and the Reconciliations of Net Earnings to FFO on Page 4.

Footnote references are to pages 8 through 8d.

Definition of FFO

FFO is a non-Generally Accepted Accounting Principles (GAAP) measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net earnings. Although the National Association of Real Estate Investment Trusts (NAREIT) has published a definition of FFO, modifications to the NAREIT calculation of FFO are common among REITs, as companies seek to provide financial measures that meaningfully reflect their business. FFO, as we define it, is presented as a supplemental financial measure. FFO is not used by us as, nor should it be considered to be, an alternative to net earnings computed under GAAP as an indicator of our operating performance or as an alternative to cash from operating activities computed under GAAP as an indicator of our ability to fund our cash needs.

FFO is not meant to represent a comprehensive system of financial reporting and does not present, nor do we intend it to present, a complete picture of our financial condition and operating performance. We believe that GAAP net earnings remains the primary measure of performance and that FFO is only meaningful when it is used in conjunction with GAAP net earnings. Further, we believe that our consolidated financial statements, prepared in accordance with GAAP, provide the most meaningful picture of our financial condition and our operating performance.

NAREIT’s FFO measure adjusts GAAP net earnings to exclude historical cost depreciation and gains and losses from the sales of previously depreciated properties. We agree that these two NAREIT adjustments are useful to investors for the following reasons:

(a)		historical cost accounting for real estate assets in accordance with GAAP assumes, through depreciation charges, that the value of real estate assets diminishes predictably over time. NAREIT stated in its White Paper on FFO “since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.” Consequently, NAREIT’s definition of FFO reflects the fact that real estate, as an asset class, generally appreciates over time and depreciation charges required by GAAP do not reflect the underlying economic realities.

(b)		REITs were created as a legal form of organization in order to encourage public ownership of real estate as an asset class through investment in firms that were in the business of long-term ownership and management of real estate. The exclusion, in NAREIT’s definition of FFO, of gains and losses from the sales of previously depreciated operating real estate assets allows investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT’s activities and assists in comparing those operating results between periods. We include the gains and losses from dispositions of properties acquired or developed in our CDFS business segment and our proportionate share of the gains and losses from dispositions recognized by the property funds in our definition of FFO.

Supplemental Information Page 3a

ProLogis

Second Quarter 2006
Unaudited Financial Results

Definition of FFO (continued)

At the same time that NAREIT created and defined its FFO concept for the REIT industry, it also recognized that “management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community.” We believe that financial analysts, potential investors and shareholders who review our operating results are best served by a defined FFO measure that includes other adjustments to GAAP net earnings in addition to those included in the NAREIT defined measure of FFO.

Our defined FFO measure excludes the following items from GAAP net earnings that are not excluded in the NAREIT defined FFO measure:

	(i)		deferred income tax benefits and deferred income tax expenses recognized by our subsidiaries;

	(ii)		current income tax expense related to acquired tax liabilities that were recorded as deferred tax liabilities in an acquisition, to the extent the expense is offset with a deferred income tax benefit in GAAP earnings that is excluded from our defined FFO measure;

	(iii)		certain foreign currency exchange gains and losses resulting from certain debt transactions between us and our foreign consolidated subsidiaries and our foreign unconsolidated investees;

	(iv)		foreign currency exchange gains and losses from the remeasurement (based on current foreign currency exchange rates) of certain third party debt of our foreign consolidated subsidiaries and our foreign unconsolidated investees; and

	(v)		mark-to-market adjustments associated with derivative financial instruments utilized to manage our foreign currency risks.

FFO of our unconsolidated investees is calculated on the same basis.

The items that we exclude from GAAP net earnings, while not infrequent or unusual, are subject to significant fluctuations from period to period that cause both positive and negative effects on our results of operations, in inconsistent and unpredictable directions. Most importantly, the economics underlying the items that we exclude from GAAP net earnings are not the primary drivers in management’s decision-making process and capital investment decisions. Period to period fluctuations in these items can be driven by accounting for short-term factors that are not relevant to long-term investment decisions, long-term capital structures or to long-term tax planning and tax structuring decisions. Accordingly, we believe that investors are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in planning and executing our business strategy.

Real estate is a capital-intensive business. Investors’ analyses of the performance of real estate companies tend to be centered on understanding the asset value created by real estate investment decisions and understanding current operating returns that are being generated by those same investment decisions. The adjustments to GAAP net earnings that are included in arriving at our FFO measure are helpful to management in making real estate investment decisions and evaluating our current operating performance. We believe that these adjustments are also helpful to industry analysts, potential investors and shareholders in their understanding and evaluation of our performance on the key measures of net asset value and current operating returns generated on real estate investments.

While we believe that our defined FFO measure is an important supplemental measure, neither NAREIT’s nor our measure of FFO should be used alone because they exclude significant economic components of GAAP net earnings and are, therefore, limited as an analytical tool. Some of the limitations are:

—The current income tax expenses that are excluded from our defined FFO measure represent taxes that are payable.

—Depreciation and amortization of real estate assets are economic costs that are excluded from FFO. FFO is limited as it does not reflect the cash requirements that may be necessary for future replacements of the real estate assets. Further, the amortization of capital expenditures and leasing costs necessary to maintain the operating performance of distribution properties are not reflected in FFO.

—Gains or losses from property dispositions represent changes in the value of the disposed properties. FFO, by excluding these gains and losses, does not capture realized changes in the value of disposed properties arising from changes in market conditions.

—The deferred income tax benefits and expenses that are excluded from our defined FFO measure result from the creation of a deferred income tax asset or liability that may have to be settled at some future point. Our defined FFO measure does not currently reflect any income or expense that may result from such settlement.

—The foreign currency exchange gains and losses that are excluded from our defined FFO measure are generally recognized based on movements in foreign currency exchange rates through a specific point in time. The ultimate settlement of our foreign currency-denominated net assets is indefinite as to timing and amount. Our defined FFO measure is limited in that it does not reflect the current period changes in these net assets that result from periodic foreign currency exchange rate movements.

We compensate for these limitations by using our FFO measure only in conjunction with GAAP net earnings. To further compensate, we always reconcile our defined FFO measure to GAAP net earnings in our financial reports. Additionally, we provide investors with our complete financial statements prepared under GAAP, our definition of FFO, which includes a discussion of the limitations of using our non-GAAP measure, and a reconciliation of our GAAP measure (net earnings) to our non-GAAP measure (FFO, as we define it) so that investors can appropriately incorporate this measure and its limitations into their analyses.

Supplemental Information Page 3b

ProLogis

Second Quarter 2006
Unaudited Financial Results

Reconciliations of Net Earnings to FFO

(in thousands)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006 (1)			2005 (2)			2006 (1)			2005 (2)


Reconciliation of net earnings to FFO:
Net earnings attributable to common shares	$	168,397		$	77,169		$	351,556		$	132,243
Add (deduct) NAREIT defined adjustments:
Real estate related depreciation and amortization		67,886			39,807			137,296			79,532
Additional CDFS proceeds recognized (14)		—			—			466			—
Gains recognized on dispositions of certain non-CDFS business assets, net		—			—			(13,709	)		—
Reconciling items attributable to discontinued operations (10):
Gains recognized on dispositions of non-CDFS business assets, net		(34,223	)		—			(50,651	)		(2,207	)
Real estate related depreciation and amortization		656			1,796			3,192			3,655

Totals discontinued operations		(33,567	)		1,796			(47,459	)		1,448
Our share of reconciling items from unconsolidated investees (18):
Real estate related depreciation and amortization		16,604			13,220			29,824			26,351
(Gains) losses on dispositions of non-CDFS business assets, net		(2	)		102			(111	)		(336	)
Other amortization items (14)(19)		(1,537	)		(1,246	)		(12,132	)		(2,457	)

Totals unconsolidated investees		15,065			12,076			17,581			23,558


Totals NAREIT defined adjustments		49,384			53,679			94,175			104,538


Subtotals-NAREIT defined FFO		217,781			130,848			445,731			236,781

Add (deduct) our defined adjustments:
Foreign currency exchange (gains) expenses/losses, net (16)		(62	)		(3,007	)		927			(3,162	)
Deferred income tax expense (17)		5,413			1,982			5,582			2,821
Current income tax expense (17)		4,724			—			4,724			—
Reconciling items attributable to discontinued operations:
Assets disposed of — deferred income tax benefit (5)		—			—			—			(213	)
Our share of reconciling items from unconsolidated investees (18):
Foreign currency exchange expenses/losses (gains), net (16)		1,210			(277	)		(1,013	)		(550	)
Deferred income tax (benefit) expense		(155	)		1,198			(1,742	)		1,090

Totals unconsolidated investees		1,055			921			(2,755	)		540


Totals our defined adjustments		11,130			(104	)		8,478			(14	)


FFO attributable to common shares	$	228,911		$	130,744		$	454,209		$	236,767

See Consolidated Statements of Earnings on page 2, Consolidated Statements of FFO on page 3 and the definition of FFO on pages 3a and 3b.

Footnote references are to pages 8 through 8d.

Supplemental Information Page 4

ProLogis

Second Quarter 2006
Unaudited Financial Results

Reconciliations of Net Earnings to EBITDA

(in thousands)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2006 (1)		2005 (2)			2006 (1)		2005 (2)


Reconciliation of net earnings to EBITDA:
Net earnings attributable to common shares	$	168,397	$	77,169		$	351,556	$	132,243
Add (deduct):
NAREIT defined adjustments to compute FFO		49,384		53,679			94,175		104,538
Our defined adjustments to compute FFO		11,130		(104	)		8,478		(14	)
Add:
Interest expense		68,663		34,761			139,516		71,253
Depreciation of corporate assets		1,932		1,919			4,815		4,117
Current income tax expense included in FFO (17)		23,168		3,577			36,365		4,750
Adjustments to CDFS gains on dispositions for interest capitalized		13,354		7,334			19,906		14,997
Preferred share dividends		6,354		6,354			12,708		12,708
Reconciling items attributable to discontinued operations		240		13,896			874		27,268
Share of reconciling items from unconsolidated investees (18)		19,170		17,584			34,579		35,754

EBITDA	$	361,792	$	216,169		$	702,972	$	407,614

See Consolidated Statements of Earnings on page 2 and the Reconciliations of Net Earnings to FFO on page 4.

Footnote references are to pages 8 through 8d.

Definition of EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization):

We believe that EBITDA is a useful supplemental measure, although it does not represent net earnings or cash from operating activities that are computed in accordance with GAAP and is not indicative of cash available to fund cash needs, which we present in our Consolidated Statements of Cash Flows and include in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q that are filed with the Securities and Exchange Commission. Accordingly, the EBITDA measure presented should not be considered as an alternative to net earnings as an indicator of our operating performance, or as an alternative to cash flows from operating, investing, or financing activities as a measure of liquidity. The EBITDA measure presented may not be comparable to similarly titled measures of other REITs.

EBITDA generally represents net earnings computed in accordance with GAAP adjusted to exclude:

	(i)		interest expense;

	(ii)		income tax expenses and benefits; and

	(iii)		depreciation and amortization expenses.

In our computation of EBITDA the following items are also excluded:

	(i)		preferred dividends and charges related to the redemption of preferred shares;

	(ii)		the foreign currency exchange gains and losses that are also excluded in our definition of FFO (presented on pages 3a and 3b);

	(iii)		impairment charges; and

	(iv)		gains and losses from the dispositions of non-CDFS business assets.

In addition, we adjust the gains and losses from the contributions and sales of developed properties recognized as CDFS income to reflect these gains and losses as if no interest cost had been capitalized during the development of the properties (i.e. the gains are larger since capitalized interest is not included in the basis of the assets contributed and sold). EBITDA of our unconsolidated investees is calculated on the same basis.

Supplemental Information Page 5

ProLogis

Second Quarter 2006
Unaudited Financial Results

Consolidated Balance Sheets

(in thousands)


	June 30,			December 31,
	2006			2005(2)


Assets:
Investments in real estate assets:
Industrial operating properties	$	9,599,961		$	8,730,906
Retail operating properties		272,537			288,253
Land subject to ground leases and other		454,076			792,668
Properties under development (including cost of land)		950,644			884,345
Land held for development (see page 7)		1,068,335			1,045,042
Other investments		325,621			133,916

		12,671,174			11,875,130
Less accumulated depreciation		1,204,730			1,118,547

Net investments in real estate assets		11,466,444			10,756,583

Investments in and advances to unconsolidated investees (see page 7):
Property funds (14)(20)		858,452			755,320
CDFS joint ventures and other unconsolidated investees (7)		389,444			294,423

Total investments in and advances to unconsolidated investees		1,247,896			1,049,743

Cash and cash equivalents		314,041			203,800
Accounts and notes receivable		303,257			327,214
Other assets		850,714			788,840
Discontinued operations-assets held for sale (10)		128,434			—

Total assets	$	14,310,786		$	13,126,180


Liabilities and Shareholders’ Equity:
Liabilities:
Lines of credit and short-term borrowings (see page 20)	$	2,274,350		$	2,240,054
Senior notes (see page 19)		3,575,385			2,759,675
Secured debt and assessment bonds (see page 19)		1,689,174			1,678,151
Accounts payable and accrued expenses		372,405			344,423
Other liabilities		628,744			557,210
Discontinued operations-assets held for sale (10)		3,775			—

Total liabilities		8,543,833			7,579,513


Minority interest		45,794			58,644

Shareholders’ equity:
Series C preferred shares at stated liquidation preference of $50.00 per share		100,000			100,000
Series F preferred shares at stated liquidation preference of $25.00 per share		125,000			125,000
Series G preferred shares at stated liquidation preference of $25.00 per share		125,000			125,000
Common shares at $.01 par value per share		2,451			2,438
Additional paid-in capital		5,647,241			5,606,017
Accumulated other comprehensive income		185,608			149,586
Distributions in excess of net earnings		(464,141	)		(620,018	)

Total shareholders’ equity		5,721,159			5,488,023

Total liabilities and shareholders’ equity	$	14,310,786		$	13,126,180

Footnote references are to pages 8 through 8d.

Supplemental Information Page 6

ProLogis

Second Quarter 2006
Unaudited Financial Results

Investments in and Advances to Unconsolidated Investees

(in thousands)


	June 30,		December 31,
	2006		2005


Property funds (see page 11):
ProLogis European Properties Fund	$	313,675	$	283,435
ProLogis California LLC		114,363		115,743
ProLogis North American Properties Fund I		32,483		33,241
ProLogis North American Properties Funds II, III and IV (14)		—		12,410
ProLogis North American Properties Fund V		54,655		53,104
ProLogis North American Properties Funds VI-X		117,271		120,614
ProLogis North American Properties Fund XI		32,126		33,094
ProLogis North American Industrial Fund (20)		71,650		—
ProLogis Japan Properties Fund I		92,461		103,679
ProLogis Japan Properties Fund II (20)		29,768		—

Total investments in and advances to property funds		858,452		755,320

CDFS joint ventures (7)		218,943		182,411

Other unconsolidated investees (7)		170,501		112,012


Total investments in and advances to unconsolidated investees	$	1,247,896	$	1,049,743

Land Owned and Controlled

(dollars in thousands)


	As of June 30, 2006
	Acres		Investment
Direct investment:
Land owned:
North America		4,781	$	604,968
Europe		947		331,827
Asia		69		131,540

Total land owned (see page 6)		5,797	$	1,068,335


Land controlled (LOI/option) (A):
North America		2,792
Europe		1,525
Asia		414

Total land controlled		4,731


Total Direct Investment		10,528

Unconsolidated investees (owned and controlled):
Property funds:
North America (owned)		32

CDFS joint ventures (B):
North America (owned and controlled)		623
Europe (owned and controlled)		401
Asia (owned)		15

Total CDFS joint ventures		1,039


Total unconsolidated investees		1,071


Total land owned and controlled		11,599

COMMENTS

(A) Costs incurred are included in other real estate investments.

(B) Includes land for industrial development only.

Supplemental Information Page 7

ProLogis

Second Quarter 2006
Unaudited Financial Results

Notes to Consolidated Financial Statements

(1)		On September 15, 2005, we completed a merger with Catellus Development Corporation (“Catellus Merger”). This transaction was accounted for using the purchase method of accounting and, accordingly, the purchase price of $5.3 billion has been allocated to the net assets acquired based on their estimated fair values at the date of acquisition.

		The allocation of the purchase price is based upon estimates and assumptions. The current allocations are substantially complete, however, there are certain items that may be subject to revision when final information is available, although future revisions should not have a significant impact on our financial position or results of operations. We financed the cash portion of this transaction primarily through borrowings on a $1.5 billion short-term bridge facility, which was subsequently repaid with proceeds from (i) the issuance of senior notes, (ii) borrowings on our global line of credit facility; and (iii) dispositions of certain real estate assets.

(2)		Certain 2005 amounts included in this Supplemental Information package have been reclassified to conform to the 2006 presentation.

(3)		Represents costs incurred related to the Catellus Merger. These costs include merger integration and employee transition costs as well as severance costs for certain of our employees whose responsibilities became redundant after the Catellus Merger. As of June 30, 2006, we have incurred substantially all of these costs.

(4)		We completed the relocation of our information technology and corporate accounting functions from El Paso, Texas to Denver, Colorado in the first quarter of 2005. We moved our corporate headquarters, which is located in Denver, to a recently constructed building in February 2006. Relocation costs include (i) employee termination costs; (ii) costs associated with the hiring and training of new personnel and other costs including travel, moving and temporary facility costs; and (iii) accelerated depreciation associated with non-real estate assets whose useful life was shortened due to the relocations.

(5)		In July 2005, we sold our temperature-controlled distribution operations in France and accordingly, the results of operations for 2005 are included in discontinued operations. Due to the sale and liquidation of the business, we recognized impairment charges and cumulative translation losses of $13.8 million and $26.9 million in the three and six months ended June 30, 2005, respectively.

(6)		The annual distribution rate for 2006 is $1.60 per common share. The amount of the common share distribution is declared quarterly and may be adjusted at the discretion of the Board of Trustees.

(7)		Our corporate distribution facilities services business (“CDFS business”) segment activities are discussed in note 11. In addition to the activities performed directly, we also invest in joint ventures that perform CDFS business activities and own operating properties in China, Europe and North America. We have a weighted average ownership interest of 50% in the CDFS joint ventures. See pages 12 and 18a for additional information regarding the industrial operating properties owned by and the industrial development activities of the CDFS joint ventures. We refer to these investees as our CDFS industrial joint ventures. In connection with the Catellus Merger, we acquired interests in several entities that engage in land and commercial development activities. In this Supplemental Information package, we present these entities along with the CDFS industrial joint ventures as CDFS joint ventures. In addition, we have varying ownership interests in other unconsolidated investees that primarily own and operate industrial, commercial and hotel properties.

(8)		Represents rental income earned and rental expenses incurred while we own a property directly. Under the terms of the respective lease agreements, some or all of our rental expenses are recovered from our customers. Amounts recovered are included as a component of rental income. Rental expenses also include direct expenses associated with our management of the property funds’ operations. For properties that have been contributed to property funds, we recognize our share of the total operations of the property funds under the equity method and present these amounts below operating income in our Consolidated Statements of Earnings and FFO.

Supplemental Information Page 8

ProLogis

Second Quarter 2006
Unaudited Financial Results

Notes to Consolidated Financial Statements (Continued)

(9)

Rental income includes the following (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2006 (1)		2005 (2)		2006 (1)		2005 (2)

Rental income	$	172,651	$	104,014	$	347,028	$	207,966
Rental expense recoveries		43,763		24,751		87,344		50,272
Straight-lined rents		7,267		1,696		16,088		3,425

	$	223,681	$	130,461	$	450,460	$	261,663

(10)		Properties disposed of to third parties are considered to be discontinued operations unless such properties were developed under a pre-sale agreement. During the six months ended June 30, 2006, we disposed of 41 properties to third parties, five of which were CDFS business assets.

		The operations of the properties disposed of during 2006 and the aggregate net gains or losses recognized upon their dispositions are presented as discontinued operations in our Consolidated Statements of Earnings for all periods presented. In addition, the operations of the 72 properties disposed of during 2005 (eight of which were CDFS business assets) are presented as discontinued operations in our Consolidated Statements of Earnings. As of June 30, 2006, we had 19 office, retail and industrial properties that were classified as held for sale, and accordingly, the operations of these properties were included in discontinued operations and the respective assets and liabilities are presented separately in our Consolidated Balance Sheet. Interest expense represents interest directly attributable to these properties.

		The operations that are presented as discontinued operations (excluding the net gains or losses recognized upon disposition) are as follows (in thousands):


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006 (1)			2005 (2)			2006 (1)			2005 (2)

Rental income	$	8,748		$	5,618		$	28,989		$	11,339
Rental expenses		(4,055	)		(1,830	)		(15,362	)		(3,714	)
Depreciation and amortization		(656	)		(1,796	)		(3,192	)		(3,655	)
Interest expense		(240	)		(116	)		(874	)		(232	)

	$	3,797		$	1,876		$	9,561		$	3,738

		For purposes of our Consolidated Statements of FFO, we do not segregate discontinued operations. In addition, in the calculation of FFO we include the CDFS disposition proceeds and the cost of CDFS dispositions for all CDFS properties disposed of during the period, including those classified as discontinued operations.

(11)		The CDFS business segment primarily represents the development of properties, the acquisition of properties with the intent to rehabilitate and/or reposition the property and other land and commercial development activities. It is generally our intent to contribute the properties to a property fund in which we have an ownership interest and act as manager or sell the properties to a third party. Additionally, we (i) earn fees for development activities provided on behalf of customers or third parties, (ii) recognize interest income on notes receivable related to previous asset dispositions, (iii) recognize gains or losses on the disposition of land parcels when our development plans no longer include these parcels and (iv) recognize our proportionate share of the earnings or losses of CDFS joint ventures. We include the income generated in the CDFS business segment in our computation of FFO and EBITDA.

(12)		When we contribute properties to an entity in which we have an ownership interest, we do not recognize a portion of the proceeds in our computation of the gain resulting from the contribution. The amount of the proceeds that we defer is determined based on our continuing ownership interest in the contributed property that arises due to our ownership interest in the entity acquiring the property. We defer this portion of the proceeds by recognizing a reduction to our investment in the applicable unconsolidated investee. We adjust our proportionate share of the earnings or losses that we recognize under the equity method in later periods to reflect the entity’s depreciation expense as if the depreciation expense was computed on our lower basis in the contributed real estate assets rather than on the entity’s basis in the contributed real estate assets. If a loss is recognized when a property is contributed, the entire loss is recognized. See note 13 for the amount of cumulative gross proceeds that have not been recognized as of June 30, 2006.

Supplemental Information Page 8a

ProLogis

Second Quarter 2006
Unaudited Financial Results

Notes to Consolidated Financial Statements (Continued)

		Gross proceeds deferred related to contributions during the three months ended June 30, 2006 and 2005 were $10.3 million and $14.4 million, respectively, and during the six months ended June 30, 2006 and 2005 were $33.9 million and $25.7 million, respectively. See page 17. When a property that we originally contributed to a property fund is disposed of to a third party, we recognize the amount of the gain that we had previously deferred during the period that the disposition occurs, in addition to our proportionate share of the gain or loss recognized by the property fund. Further, during periods when our ownership interest in a property fund decreases, we recognize gains to the extent that previously deferred proceeds are recognized to coincide with our new ownership interest in the property fund. We recognized previously deferred proceeds of $14.9 million for the six months ended June 30, 2006 and did not recognize any previously deferred proceeds for the six months ended June 30, 2005.

(13)		As of June 30, 2006, the cumulative gross proceeds that have not been recognized in computing the gains from our contributions of properties to unconsolidated investees (before subsequent amortization) are presented below (in thousands). See note 12.


	Gross Proceeds Not Recognized
	CDFS		Non-CDFS
	Transactions		Transactions		Totals

ProLogis European Properties Fund	$	123,609	$	9,338	$	132,947
ProLogis California LLC		5,388		26,129		31,517
ProLogis North American Properties Fund I		8,278		862		9,140
ProLogis North American Properties Fund V		24,638		2,904		27,542
ProLogis North American Properties Funds VI-X		2,764		—		2,764
ProLogis North American Industrial Fund		22,519		—		22,519
ProLogis Japan Properties Fund I		44,878		—		44,878
ProLogis Japan Properties Fund II		2,322		—		2,322
CDFS joint ventures		4,971		—		4,971

Totals	$	239,367	$	39,233	$	278,600

(14)

On January 4, 2006, we purchased the 80% ownership interests in each of ProLogis North American Properties Funds II, III and IV (collectively “the Funds”) from our fund partner, an affiliate of Arcapita Bank B.S.C.(c) (“Arcapita”). On March 1, 2006, we contributed substantially all of the assets and associated liabilities to the ProLogis North American Industrial Fund (“North American Industrial Fund”), which was finalized in February 2006. See note 20. In connection with these transactions, we recognized the following amounts in the respective line items, during the first quarter of 2006 (in thousands):


	Statements of		Statements of
	Earnings		FFO
CDFS disposition proceeds (a)	$	12,492	$	12,958
Property management and other fees and incentives (b)	$	21,958	$	21,958
Earnings from unconsolidated property funds (c)	$	37,113	$	27,916

	(a)		Represents the recognition of the proceeds that we had previously deferred as part of CDFS income upon the initial contributions of the properties to the Funds. See note 12.
	(b)		Represents an incentive return we earned due to certain return levels achieved by Arcapita upon the liquidation of the Funds.
	(c)		Represents our proportionate share of the gain on liquidation recognized by the Funds on a depreciated basis (earnings) and on an undepreciated basis (FFO).

All of the above amounts are net of an aggregate deferred amount of $17.9 million, due to our 20% ownership interest in the North American Industrial Fund that purchased the assets.

Supplemental Information Page 8b

ProLogis

Second Quarter 2006
Unaudited Financial Results

Notes to Consolidated Financial Statements (Continued)

(15)

The following table presents the components of interest expense as presented in the Consolidated Statements of Earnings (in thousands). The increase in interest expense and capitalized interest is primarily the result of the Catellus Merger, which increased debt levels and our development activities.


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006 (1)			2005 (2)			2006 (1)			2005 (2)

Gross interest expense	$	93,661		$	48,611		$	190,146		$	96,299
(Premium) discount recognized, net		(3,240	)		(78	)		(6,464	)		(194	)
Amortization of deferred loan costs		1,542			1,369			2,540			2,729

Interest expense before capitalization		91,963			49,902			186,222			98,834
Less: capitalized amounts		(23,300	)		(15,141	)		(46,706	)		(27,581	)

Net interest expense	$	68,663		$	34,761		$	139,516		$	71,253

(16)		Foreign currency exchange gains and losses that are recognized as a component of net earnings generally result from: (i) remeasurement and/or settlement of certain debt transactions between us and our foreign consolidated subsidiaries and foreign unconsolidated investees (depending on the type of loan, the currency in which the loan is denominated and the form of our investment); (ii) remeasurement and/or settlement of certain third party debt of our foreign consolidated subsidiaries (depending on the currency in which the loan is denominated); and (iii) mark-to-market adjustments related to derivative financial instruments utilized to manage foreign currency risks. We generally exclude these types of foreign currency exchange gains and losses from our defined FFO measure and also from our computation of EBITDA.

		Foreign currency exchange gains and losses that result from transactions (including certain intercompany debt and equity investments) that are settled in a currency other than the reporting entity’s functional currency and from the settlement of derivative financial instruments utilized to manage foreign currency risks are included in our defined FFO measure and in our computation of EBITDA. Our definition of FFO is presented on pages 3a and 3b and our definition of EBITDA is presented on page 5.

		During the second quarter of 2006, we recognized a foreign currency exchange gain of $9.0 million in both earnings and FFO, due to the settlement of an intercompany loan denominated in British pound sterling and the settlement of a related derivative contract.

(17)		Current income tax is generally a function of the level of income recognized by our taxable subsidiaries operating primarily in the CDFS business segment, state income taxes, taxes incurred in foreign jurisdictions and interest associated with our income tax liabilities. Deferred income tax is generally a function of the period’s temporary differences (items that are treated differently for tax purposes than for financial reporting purposes), the utilization of tax net operating losses generated in prior years that had been previously recognized as deferred tax assets and deferred tax liabilities related to indemnification agreements related to certain contributions to property funds.

		In connection with the Catellus Merger and in accordance with purchase accounting, we recorded all of the acquired assets and liabilities at the estimated fair values at the date of acquisition. For our taxable subsidiaries, we recognized the deferred tax liabilities that represent the tax effect of the difference between the tax basis carried over and the fair values of these assets at the date of acquisition. As taxable income is generated in these subsidiaries, we recognize a deferred tax benefit in earnings as a result of the reversal of the deferred tax liability previously recorded at the acquisition date and we record current income tax expense representing the entire current income tax liability. In our calculation of FFO, we only include the current income tax expense to the extent the associated income is recognized for financial reporting purposes.

Supplemental Information Page 8c

ProLogis

Second Quarter 2006
Unaudited Financial Results

Notes to Consolidated Financial Statements (Continued)

(18)		We report our investments in the property funds, CDFS joint ventures and other unconsolidated investees under the equity method. For purposes of calculating FFO and EBITDA, the net earnings of each of our unconsolidated investees is adjusted to be consistent with our calculation of these measures. Our definition of FFO is presented on pages 3a and 3b and our definition of EBITDA is presented on page 5.

(19)		Consists primarily of adjustments to the amounts we recognize under the equity method that are necessary to recognize the amount of gains not recognized at the contribution date due to the deferral of certain proceeds based on our ownership interest in the property fund acquiring the property. See note 12. In addition, this amount represents the adjustment to the amounts we recognize under the equity method on dispositions made by the property funds to reflect the gain on sale on an undepreciated basis for FFO. See note 14.

(20)		In February, 2006, we formed a new property fund, the North American Industrial Fund, with several institutional investors, which primarily owns recently developed industrial distribution properties in the United States and may own properties in Canada. The North American Industrial Fund, in which we have a 20% ownership interest, is an open-end fund. See note 14 for further discussion about the initial contribution of assets to the North American Industrial Fund in the first quarter of 2006. In addition, in January 2006, we made the first contribution of assets to ProLogis Japan Properties Fund II, which was formed in late 2005.

Supplemental Information Page 8d

ProLogis

Second Quarter 2006
Unaudited Financial Results

Components of Net Asset Value (A)

(in thousands, except for percentages)

Income Items


	Second			ProLogis'
	Quarter 2006			Weighted Average			Pro Rata
	Pro Forma			Ownership			Annualized
	NOI (B)			Interest			Pro Forma NOI

Direct owned properties (B)	$	187,688	x		100.0%	x4	$	750,752

Property funds — North America (B)	$	99,079	x		20.8%	x4	$	82,434

Property funds — Asia (B)	$	26,020	x		20.0%	x4	$	20,816


	Actual
	Second Quarter
	2006
Fee income (includes all property funds) (see page 10)	$	20,329
Gains on dispositions of CDFS business assets, net	$	95,273
Disposition proceeds not recognized in FFO, net of amounts recognized that have been previously deferred (see page 17)	$	8,740
Development management fees, interest and other CDFS income (C)	$	45,129


Balance Sheet Items	-as of June 30, 2006


Investment in ProLogis European Properties Fund (D)	$	611,041


Discontinued operations — net assets held for sale	$	124,659


Investments in unconsolidated investees other than property funds (see page 7):
CDFS joint ventures (industrial only)	$	106,269
Other unconsolidated investees		170,501

Total investments in unconsolidated investees other than property funds	$	276,770


Investments in land and development projects:
Development projects in process (see pages 6 and 18)	$	950,644
Land held for development (see pages 6 and 7)		1,068,335

Total investments in land and development projects	$	2,018,979


Other assets:
Cash and cash equivalents	$	314,041
Deposits, prepaid assets and other tangible assets (E)		690,815
Accounts and other receivables (F)		128,991
Our share of other tangible assets of property funds (G)		30,491

Total other assets	$	1,164,338


Liabilities and preferred equity:
Total liabilities (H)	$	(8,540,058	)
Our share of third party debt of property funds (see page 11) (G)		(797,567	)
Our share of other third party liabilities of property funds (G)		(24,896	)

Total liabilities		(9,362,521	)
Preferred shares		(350,000	)

Total liabilities and preferred equity	$	(9,712,521	)

Consolidated Balance Sheets are on Page 6.

Net Asset Value Discussion

We consider Net Asset Value to be a useful tool to estimate the fair value of common shareholder equity. The assessment of the fair value of a particular segment of our business is subjective in that it will involve estimates and can be performed using various methods. Therefore, we have presented the financial results and investments related to our business segments that we believe are important in calculating our Net Asset Value but have not presented any specific methodology nor provided any guidance on the assumptions or estimates that should be used in the calculation.

Comments are on page 9a.

Supplemental Information Page 9

ProLogis

Second Quarter 2006
Unaudited Financial Results

Comments to Components of Net Asset Value
(in thousands)

Comments relate to page 9.

COMMENTS

(A)		The components of Net Asset Value provided on page 9 do not consider the potential growth in rental and fee income streams or the franchise value associated with our global operating platform and the ProLogis Operating System^®.
(B)		A reconciliation of rental income and rental expenses computed under GAAP to pro forma net operating income (NOI) for purposes of the Net Asset Value calculation for us and the property funds, excluding ProLogis European Properties Fund, for the three months ended June 30, 2006 follows (amounts in thousands). Our investment in ProLogis European Properties Fund is subject to periodic third party valuations (see comment D) therefore, a separate calculation using pro forma NOI is not necessary.


							ProLogis			ProLogis			ProLogis			ProLogis			ProLogis			ProLogis			ProLogis
				ProLogis			N.A.			N.A.			N.A.			N.A.			N.A.			Japan			Japan
				California			Properties			Properties			Properties			Properties			Industrial			Properties			Properties
	ProLogis			LLC			Fund I			Fund V			Funds VI - X			Fund XI			Fund			Fund I			Fund II

Calculation of pro forma NOI (a):
Rental income (see pages 2 and 10)	$	223,681		$	20,491		$	10,734		$	41,463		$	29,122		$	5,625		$	16,388		$	23,188		$	5,803
Straight-lined rents and amortization of lease intangibles (b)		(6,095	)		(145	)		(229	)		(156	)		(914	)		(298	)		527			(64	)		(6	)
Net termination fees (c)		(282	)		—			—			—			—			(400	)		(7	)		—			—

Adjusted rental income		217,304			20,346			10,505			41,307			28,208			4,927			16,908			23,124			5,797

Rental expenses (see pages 2 and 10)		(57,051	)		(3,673	)		(2,103	)		(8,267	)		(7,799	)		(847	)		(3,770	)		(3,254	)		(142	)
Certain fees paid to ProLogis (d)		—			140			100			348			297			56			167			—			—

Adjusted rental expenses		(57,051	)		(3,533	)		(2,003	)		(7,919	)		(7,502	)		(791	)		(3,603	)		(3,254	)		(142	)

Adjusted NOI		160,253			16,813			8,502			33,388			20,706			4,136			13,305			19,870			5,655
Other adjustments (e) (f)		27,435			—			—			—			—			—			2,229			—			495

Pro forma NOI	$	187,688		$	16,813		$	8,502		$	33,388		$	20,706		$	4,136		$	15,534		$	19,870		$	6,150

	(a)		Pro forma NOI represents: (i) rental income computed under GAAP for each applicable property, including rental expense recoveries, adjusted to exclude straight-lined rents (see (b) below) and net termination fees (see (c) below); (ii) less rental expenses computed under GAAP for each applicable property adjusted to exclude certain fees paid to us that have been recognized as rental expenses by the property funds (see (d) below); (iii) as adjusted to reflect CDFS business assets (completed developments and repositioned acquisitions) at a stabilized yield for the entire period (see (e) below); and (iv) as adjusted to present a full period of operations for those properties that were not stabilized for the entire period (see (f) below).
	(b)		Straight-lined rents and amortization of lease intangibles are removed from rental income computed under GAAP to allow for the calculation of a cash yield, which is common in Net Asset Value calculations.
	(c)		Net termination fees generally represent the gross fee negotiated at the time a customer is allowed to terminate its lease agreement offset by that customer’s rent leveling asset or liability, if any, that has been previously recognized under GAAP. Removing the net termination fees from rental income allows for the calculation of pro forma NOI to include only rental income that is indicative of the property’s recurring operating performance. Customer terminations are negotiated under specific circumstances and are not subject to specific provisions or rights allowed under the lease agreements.
	(d)		These miscellaneous fees are removed because they represent costs that are specific to the ownership structures of the individual property fund and are not necessarily indicative of expenses that would be incurred under other structures.
	(e)		For ProLogis, the NOI generated by CDFS business assets (completed developments and repositioned acquisitions) is removed and replaced with NOI that is computed by applying each property’s projected yield at the time the property was developed or acquired to the gross book basis of the property at June 30, 2006.
	(f)		For ProLogis, ProLogis North American Properties Fund V, ProLogis North American Industrial Fund and ProLogis Japan Properties Fund II, NOI is adjusted to reflect a full period of operations for the properties that were acquired during the three-month period and to remove the NOI for properties disposed of during the three-month period, if any. See page 16.

(C)		Amount includes: (i) development management and other income, (ii) interest income on long-term notes receivable and (iii) FFO from non-industrial CDFS joint ventures.

(D)		At June 30, 2006, the Net Asset Value of our investment in ProLogis European Properties Fund was estimated as follows (in thousands, except per unit amounts):


Number of equity units held by ProLogis on June 30, 2006		39,665
Net Asset Value per unit at December 31, 2005 in euros (g)		12.12

Total Net Asset Value at June 30, 2006 in euros		480,740
Euro to U.S. dollar exchange rate at June 30, 2006		1.2713

Total Net Asset Value at June 30, 2006 in U.S. dollars	$	611,165
Add our share of FFO since December 31, 2005 (h)		18,491
Less dividends received since December 31, 2005		(21,056	)
Net amounts owed to ProLogis		2,441

	$	611,041

	(g)		Based on an independent third party valuation as of December 31, 2005.

	(h)		Represents our share of FFO of ProLogis European Properties Fund since the last net asset valuation (December 31, 2005) excluding management fee income which is paid to ProLogis on a current basis. See page 10.

(E)		These items are reflected in our Consolidated Balance Sheets as components of other assets and investments in real estate — other investments.

(F)		Excludes receivables associated with our CDFS business segment.

(G)		Excludes ProLogis European Properties Fund. See comment D.

(H)		Excludes the liabilities attributable to discontinued operations — assets held for sale.

Supplemental Information Page 9a

ProLogis

Second Quarter 2006
Unaudited Financial Results

Property Funds — EBITDA, FFO and Net Earnings

(in thousands of dollars, except percentages)


	ProLogis						ProLogis			ProLogis		ProLogis			ProLogis			ProLogis			ProLogis		ProLogis			ProLogis			ProLogis
	European			ProLogis			N.A.			N.A.		N.A.			N.A.			N.A.			N.A.		N.A.			Japan			Japan
	Properties			California			Properties			Properties		Properties			Properties			Properties			Properties		Industrial			Properties			Properties
	Fund			LLC			Fund I			Funds II - IV (A)		Fund V			Funds VI - X			Fund XI			Fund XII (B)		Fund (A)			Fund I			Fund II (C)			Total
	For the Three Months Ended June 30, 2006
EBITDA, FFO and net earnings of each property fund:
Rental income		99,641			20,491			10,734			—		41,463			29,122			5,625			—		16,388			23,188			5,803			252,455
Rental expenses:
Property management fees paid to us (D)		(901	)		(668	)		(391	)		—		(1,292	)		(1,014	)		(215	)		—		(698	)		—			—			(5,179	)
Other		(11,994	)		(3,005	)		(1,712	)		—		(6,975	)		(6,785	)		(632	)		—		(3,072	)		(3,254	)		(142	)		(37,571	)

Total rental expenses		(12,895	)		(3,673	)		(2,103	)		—		(8,267	)		(7,799	)		(847	)		—		(3,770	)		(3,254	)		(142	)		(42,750	)

Net operating income from properties		86,746			16,818			8,631			—		33,196			21,323			4,778			—		12,618			19,934			5,661			209,705

Other income (expense)		(3,211	)		44			(17	)		—		(442	)		(16	)		(142	)		—		119			97			(211	)		(3,779	)
Gains on liquidation of funds		—			—			—			—		—			—			—			—		—			—			—			—
Asset management and other fees paid to us (D)		(8,648	)		(2	)		(150	)		—		(81	)		(878	)		(139	)		—		(4	)		(1,310	)		(310	)		(11,522	)

EBITDA of the property fund		74,887			16,860			8,464			—		32,673			20,429			4,497			—		12,733			18,721			5,140			194,404

Current income tax and other expense		(5,744	)		(4	)		(66	)		—		(255	)		(7	)		—			—		(7	)		—			—			(6,083	)
Gain on disposition of CDFS business assets		—			—			—			—		—			—			—			—		—			—			—			—
Third party interest expense		(30,106	)		(5,611	)		(4,619	)		—		(12,706	)		(12,613	)		(815	)		—		(6,722	)		(3,628	)		(934	)		(77,754	)

FFO of the property fund		39,037			11,245			3,779			—		19,712			7,809			3,682			—		6,004			15,093			4,206			110,567

Real estate related depreciation and amortization		(24,919	)		(5,101	)		(2,752	)		—		(9,594	)		(9,121	)		(1,808	)		—		(6,464	)		(4,086	)		(2,014	)		(65,859	)
Gains on other dispositions, net		11			—			—			—		—			—			—			—		—			—			—			11
Foreign currency exchange losses, net		(5,762	)		—			—			—		—			—			—			—		—			—			—			(5,762	)
Deferred income tax benefit		775			—			—			—		—			—			—			—		—			—			—			775

Net earnings of the property fund		9,142			6,144			1,027			—		10,118			(1,312	)		1,874			—		(460	)		11,007			2,192			39,732


Our share of EBITDA, FFO and net earnings of each property fund recognized under the equity method:
Our average ownership interest for the period (E)		20.9	%		50.0	%		41.3	%				11.2	%		20.0	%		20.0	%				20.0	%		20.0	%		20.0	%		22.5	%

Our share of the property fund’s EBITDA		15,573			8,430			3,496			—		3,627			4,086			900			—		2,547			3,744			1,028			43,431
Fees paid to us (F)		9,549			848			827			—		2,800			2,261			357			—		1,287			2,078			322			20,329
Other (G)		—			(125	)		(60	)		—		(38	)		(15	)		—			—		(4	)		274			37			69

EBITDA recognized by us		25,122			9,153			4,263			—		6,389			6,332			1,257			—		3,830			6,096			1,387			63,829

Our share of the property fund’s FFO		8,109			5,622			1,561			—		2,188			1,562			736			—		1,200			3,019			841			24,838
Fees paid to us (F)		9,549			848			827			—		2,800			2,261			357			—		1,287			2,078			322			20,329
Other (G)		—			(74	)		(59	)		—		169			(54	)		—			—		(15	)		274			37			278

FFO recognized by us		17,658			6,396			2,329			—		5,157			3,769			1,093			—		2,472			5,371			1,200			45,445

Our share of the property fund’s net earnings		1,860			3,072			424			—		1,122			(262	)		375			—		(92	)		2,201			438			9,138
Fees paid to us (F)		9,549			848			827			—		2,800			2,261			357			—		1,287			2,078			322			20,329
Other (G)		590			211			49			—		354			(19	)		—			—		141			458			47			1,831

Net earnings recognized by us		11,999			4,131			1,300			—		4,276			1,980			732			—		1,336			4,737			807			31,298


	For the Three Months Ended June 30, 2005
EBITDA recognized by us		22,738			9,382			4,001			3,818		5,372			6,186			1,188			1,067		—			3,695			—			57,447

FFO recognized by us		15,776			6,462			2,076			2,352		4,703			3,580			1,023			899		—			3,207			—			40,078

Net earnings recognized by us		10,488			4,229			1,097			1,751		4,066			1,831			673			552		—			2,795			—			27,482

See our Consolidated Statements of Earnings on page 2, Consolidated Statements of FFO on page 3, the Reconciliations of Net Earnings to FFO on page 4 and the Reconciliations of Net Earnings to EBITDA on page 5. Our definition of FFO is presented on pages 3a and 3b and our definition of EBITDA is presented on page 5.

COMMENTS

	(A)		On January 4, 2006, we purchased the 80% ownership interests in ProLogis North American Properties Funds II, III and IV from our fund partner. On March 1, 2006, we contributed substantially all of these properties into the ProLogis North American Industrial Fund, which was formed in February 2006.
	(B)		On September 30, 2005, we purchased the remaining 80% interest in ProLogis North American Properties Fund XII and the operating properties of the property fund are now reported as direct owned properties.
	(C)		The ProLogis Japan Properties Fund II was formed in 2005 and made its first acquisition in January 2006.
	(D)		These fees are paid to us on a current basis.
	(E)		The total average ownership is weighted based on each entity’s contribution to the total FFO for the period presented.
	(F)		In addition to the property and asset management fees earned by us and expensed by the property funds, we earn other fees for leasing, development and other activities performed on behalf of the property funds. Certain of these fees are capitalized by the property funds (primarily leasing and development fees). We defer an amount of the leasing and development fees we earn in an amount proportionate to our ownership interest in the property fund. The deferred fees are recognized in income in future periods by reducing the amount of the capitalized fees that the property fund includes in amortization or depreciation expense when we recognize our share of the earnings and/or loss of the property fund under the equity method. For FFO and EBITDA, the deferred fees are not recognized unless the underlying asset is sold to a third party by the property fund.
	(G)		Consists primarily of adjustments to the amounts that we recognize under the equity method that are necessary to recognize the amount of the gains that were not recognized at the contribution date due to the deferral of certain proceeds based on our ownership interest in the property fund acquiring the property. See comment F and note 12.

Supplemental Information Page 10

ProLogis

Second Quarter 2006
Unaudited Financial Results

Property Funds — EBITDA, FFO and Net Earnings
(in thousands of dollars, except percentages)


	ProLogis						ProLogis			ProLogis			ProLogis			ProLogis			ProLogis			ProLogis		ProLogis			ProLogis			ProLogis
	European			ProLogis			N.A.			N.A.			N.A.			N.A.			N.A.			N.A.		N.A.			Japan			Japan
	Properties			California			Properties			Properties			Properties			Properties			Properties			Properties		Industrial			Properties			Properties
	Fund			LLC			Fund I			Funds II - IV (A)			Fund V			Funds VI - X			Fund XI			Fund XII (B)		Fund (A)			Fund I			Fund II (C)			Total
	For the Six Months Ended June 30, 2006
EBITDA, FFO and net earnings of each property fund:
Rental income		197,324			40,515			21,477			690			80,613			59,248			10,416			—		21,848			45,686			8,202			486,019
Rental expenses:
Property management fees paid to us (D)		(1,639	)		(1,344	)		(715	)		—			(2,459	)		(1,996	)		(406	)		—		(882	)		—			—			(9,441	)
Other		(27,277	)		(6,073	)		(3,528	)		(47	)		(13,191	)		(13,635	)		(1,340	)		—		(4,203	)		(5,884	)		(142	)		(75,320	)

Total rental expenses		(28,916	)		(7,417	)		(4,243	)		(47	)		(15,650	)		(15,631	)		(1,746	)		—		(5,085	)		(5,884	)		(142	)		(84,761	)

Net operating income from properties		168,408			33,098			17,234			643			64,963			43,617			8,670			—		16,763			39,802			8,060			401,258

Other income (expense)		121			60			(74	)		(34	)		126			74			(308	)		—		140			(221	)		(322	)		(438	)
Gains on liquidation of funds		—			—			—			139,571			—			—			—			—		—			—			—			139,571
Asset management and other fees paid to us (D)		(15,309	)		(2	)		(313	)		—			(196	)		(1,631	)		(258	)		—		(5	)		(2,594	)		(433	)		(20,741	)

EBITDA of the property fund		153,220			33,156			16,847			140,180			64,893			42,060			8,104			—		16,898			36,987			7,305			519,650

Current income tax and other expense		(7,976	)		(7	)		(66	)		—			(500	)		(17	)		—			—		(9	)		—			—			(8,575	)
Gain on disposition of CDFS business assets		—			—			—			—			40			—			—			—		—			—			—			40
Third party interest expense		(56,769	)		(11,245	)		(9,237	)		(314	)		(24,745	)		(25,223	)		(1,639	)		—		(8,762	)		(7,008	)		(1,305	)		(146,247	)

FFO of the property fund		88,475			21,904			7,544			139,866			39,688			16,820			6,465			—		8,127			29,979			6,000			364,868

Real estate related depreciation and amortization		(42,445	)		(10,280	)		(5,415	)		(170	)		(18,658	)		(19,105	)		(3,631	)		—		(7,539	)		(8,037	)		(3,130	)		(118,410	)
Depreciation adjustments on liquidation of funds		—			—			—			45,987			—			—			—			—		—			—			—			45,987
Gains on other dispositions, net		529			—			—			—			—			—			—			—		—			—			—			529
Foreign currency gains, net		4,909			—			—			—			—			—			—			—		—			—			—			4,909
Deferred income tax benefit		8,333			—			—			—			—			—			—			—		—			—			—			8,333

Net earnings of the property fund		59,801			11,624			2,129			185,683			21,030			(2,285	)		2,834			—		588			21,942			2,870			306,216


Our share of EBITDA, FFO and net earnings of each property fund recognized under the equity method:
Our average ownership interest for the period (E)		20.9	%		50.0	%		41.3	%		20.0	%		11.2	%		20.0	%		20.0	%				20.0	%		20.0	%		20.0	%		21.5	%

Our share of the property fund’s EBITDA		32,023			16,578			6,958			28,036			7,268			8,412			1,621			—		3,380			7,397			1,461			113,134
Fees paid to us (F)		16,948			1,807			1,404			22,110			5,227			4,128			699			—		1,634			3,362			1,578			58,897
Other (G)		—			(238	)		(97	)		(12	)		(79	)		(24	)		—			—		(4	)		508			53			107

EBITDA recognized by us		48,971			18,147			8,265			50,134			12,416			12,516			2,320			—		5,010			11,267			3,092			172,138

Our share of the property fund’s FFO		18,491			10,952			3,116			27,973			4,445			3,364			1,293			—		1,625			5,996			1,200			78,455
Fees paid to us (F)		16,948			1,807			1,404			22,110			5,227			4,128			699			—		1,634			3,362			1,578			58,897
Other (G)		—			(76	)		(97	)		(46	)		368			(101	)		—			—		(17	)		508			53			592

FFO recognized by us		35,439			12,683			4,423			50,037			10,040			7,391			1,992			—		3,242			9,866			2,831			137,944


Our share of the property fund’s net earnings		12,498			5,812			879			37,137			2,355			(457	)		567			—		118			4,388			574			63,871
Fees paid to us (F)		16,948			1,807			1,404			22,110			5,227			4,128			699			—		1,634			3,362			1,578			58,897
Other (G)		1,151			487			99			36			722			(37	)		—			—		139			875			71			3,543

Net earnings recognized by us		30,597			8,106			2,382			59,283			8,304			3,634			1,266			—		1,891			8,625			2,223			126,311


	For the Six Months Ended June 30, 2005
EBITDA recognized by us		45,083			18,309			8,009			7,541			11,291			12,418			2,319			2,268		—			7,185			—			114,423

FFO recognized by us		31,108			12,343			4,195			4,614			9,499			7,217			1,996			1,889		—			6,278			—			79,139

Net earnings recognized by us		22,602			7,894			2,237			3,418			8,029			3,733			1,266			1,124		—			5,477			—			55,780

COMMENTS

	(A)		On January 4, 2006, we purchased the 80% ownership interests in ProLogis North American Properties Funds II, III and IV from our fund partner. On March 1, 2006, we contributed substantially all of these properties into the ProLogis North American Industrial Fund, which was formed in February 2006. The amounts presented here for ProLogis N.A. Properties Funds II-IV are net of the deferral due to our continuing ownership interest in the properties. See note 14 for more detail and a description of the amounts recognized.
	(B)		On September 30, 2005, we purchased the remaining 80% interest in ProLogis North American Properties Fund XII and the operating properties of the property fund are now reported as direct owned properties.
	(C)		The ProLogis Japan Properties Fund II was formed in 2005 and made its first acquisition in January 2006.
	(D)		These fees are paid to us on a current basis.
	(E)		The total average ownership is weighted based on each entity’s contribution to the total FFO for the period presented.
	(F)		In addition to the property and asset management fees earned by us and expensed by the property funds, we earn other fees for leasing, development and other activities performed on behalf of the property funds. Certain of these fees are capitalized by the property funds (primarily leasing and development fees). We defer an amount of the leasing and development fees we earn in an amount proportionate to our ownership interest in the property fund. The deferred fees are recognized in income in future periods by reducing the amount of the capitalized fees that the property fund includes in amortization or depreciation expense when we recognize our share of the earnings and/or loss of the property fund under the equity method. For FFO and EBITDA, the deferred fees are not recognized unless the underlying asset is sold to a third party by the property fund.
	(G)		Consists primarily of adjustments to the amounts that we recognize under the equity method that are necessary to recognize the amount of the gains that were not recognized at the contribution date due to the deferral of certain proceeds based on our ownership interest in the property fund acquiring the property. See comment F and note 12.

Supplemental Information Page 10a

ProLogis

Second Quarter 2006
Unaudited Financial Results

Property Funds — Balance Sheets as of June 30, 2006

(in thousands, except percentages)


	ProLogis						ProLogis			ProLogis			ProLogis			ProLogis			ProLogis			ProLogis			ProLogis
	European			ProLogis			N.A.			N.A.			N.A.			N.A.			N.A.			Japan			Japan
	Properties			California			Properties			Properties			Properties			Properties			Industrial			Properties			Properties
	Fund			LLC			Fund I			Fund V			Funds VI -X			Fund XI			Fund			Fund I			Fund II			Total


Selected Balance Sheet Items of the Property Funds:

Operating properties, before depreciation	$	4,660,819		$	693,445		$	379,744		$	1,515,123		$	1,501,482		$	229,732		$	880,989		$	1,228,635		$	384,622		$	11,474,591


Other assets, net of other liabilities	$	(14,171	)	$	15,348		$	6,203		$	(50,610	)	$	35,162		$	11,518		$	39,140		$	(50,089	)	$	(59,424	)	$	(66,923	)


Total assets, before depreciation, net of other liabilities	$	4,646,648		$	708,793		$	385,947		$	1,464,513		$	1,536,644		$	241,250		$	920,129		$	1,178,546		$	325,198		$	11,407,668


Third party debt	$	2,271,953		$	327,508		$	242,304		$	770,473		$	905,940		$	66,415		$	552,818		$	549,498		$	162,564		$	5,849,473


Our ownership interest (A)		20.6	%		50.0	%		41.3	%		11.2	%		20.0	%		20.0	%		20.0	%		20.0	%		20.0	%		21.7	%



Our Share of the Property Funds’ Balances:
Our balance sheet investment (see page 7)	$	313,675		$	114,363		$	32,483		$	54,655		$	117,271		$	32,126		$	71,650		$	92,461		$	29,768		$	858,452
Add (deduct):
Our share of third party debt		468,022			163,754			100,072			86,293			181,188			13,283			110,564			109,900			32,513			1,265,589
Our share of depreciation and amortization		68,734			47,591			21,633			7,949			11,481			2,482			1,109			4,385			607			165,971
Gross proceeds not recognized on a cumulative basis (before amortization) (see note 13)		132,947			31,517			9,140			27,542			2,764			—			22,519			44,878			2,322			273,629
Other (B)		(26,169	)		(2,828	)		(3,932	)		(12,414	)		(5,375	)		359			(21,816	)		(15,915	)		(170	)		(88,260	)

Our share of total assets, before depreciation, net of other liabilities	$	957,209		$	354,397		$	159,396		$	164,025		$	307,329		$	48,250		$	184,026		$	235,709		$	65,040		$	2,475,381

COMMENTS

	(A)		The total ownership interest is a weighted average based on each entity’s contribution to total assets, before depreciation, net of other liabilities.
	(B)		Generally consists of: (i) advances to the property fund; (ii) additional basis in the investments that have been recorded directly by us; (iii) adjustments necessary to reflect our share of the equity of the property fund based on our ownership at the time the earnings were recognized for those property funds (applicable when our ownership has varied over time); and (iv) our proportionate share of the accumulated other comprehensive income of ProLogis European Properties Fund (cumulative foreign currency translation adjustments and hedge accounting adjustments) and ProLogis Japan Properties Funds I and II (cumulative foreign currency translation adjustments).The total ownership interest is a weighted average based on each entity’s contribution to total assets, before depreciation, net of other liabilities.

Supplemental Information Page 11

ProLogis

Second Quarter 2006
Unaudited Financial Results

Portfolio Analysis

By Ownership

(in thousands, except for percentages)


					Leased Percentage
	Square		Current		June 30,			December 31,
	Feet		Investment		2006			2005 (A)


Stabilized Portfolio (B):
Industrial Portfolio:
Direct Investment:
North America		165,727	$	7,696,469		95.01	%		93.76	%
Europe		5,860		415,276		81.20	%		73.23	%
Asia		3,388		319,063		99.81	%		99.79	%

Total Direct Investment — Stabilized		174,975		8,430,808		94.64	%		93.00	%

CDFS Joint Ventures (C):
North America		811		19,433		100.00	%		—
Asia		2,350		76,023		88.48	%		89.32	%

Total CDFS joint ventures		3,161		95,456		91.44	%		89.32	%

Property Funds (C):
ProLogis California LLC		14,211		693,445		97.84	%		97.10	%
ProLogis North American Properties Fund I		9,406		379,744		94.28	%		93.89	%
ProLogis North American Properties Fund V		35,879		1,515,123		98.02	%		98.61	%
ProLogis North American Properties Fund VI-X		25,397		1,501,482		86.04	%		90.82	%
ProLogis North American Properties Fund XI		4,315		229,732		96.17	%		97.96	%
ProLogis North American Industrial Fund (D)		14,513		880,989		97.88	%		—
ProLogis European Properties Fund		58,283		4,660,819		96.86	%		96.34	%
ProLogis Japan Properties Fund I		7,424		1,228,635		100.00	%		100.00	%
ProLogis Japan Properties Fund II (D)		3,208		384,622		100.00	%		—

Total Property Funds		172,636		11,474,591		95.71	%		96.11	%


Total Industrial Stabilized Portfolio		350,772	$	20,000,855		95.14	%		94.49	%
Total Retail Stabilized Portfolio		935		261,911		99.19	%		99.52	%

Total Stabilized Portfolio		351,707	$	20,262,766		95.15	%		94.52	%


Total Operating Portfolio (E):
Industrial Portfolio:
Direct Investment:
North America		180,711	$	8,370,183		91.04	%		89.71	%
Europe		11,256		729,278		55.76	%		55.76	%
Asia		4,373		500,500		96.59	%		84.83	%

Total Direct Investment — Total Portfolio		196,340		9,599,961		89.14	%		87.72	%

CDFS Joint Ventures (C):
North America		1,312		33,660		61.82	%		100.00	%
Asia		2,991		93,009		80.49	%		79.78	%

Total CDFS joint ventures		4,303		126,669		74.79	%		84.78	%

Property Funds (C):
ProLogis California LLC		14,211		693,445		97.84	%		97.10	%
ProLogis North American Properties Fund I		9,406		379,744		94.28	%		93.89	%
ProLogis North American Properties Fund V		35,879		1,515,123		98.02	%		98.61	%
ProLogis North American Properties Fund VI-X		25,397		1,501,482		86.04	%		90.82	%
ProLogis North American Properties Fund XI		4,315		229,732		96.17	%		97.96	%
ProLogis North American Industrial Fund (D)		14,513		880,989		97.88	%		—
ProLogis European Properties Fund		58,283		4,660,819		96.86	%		96.34	%
ProLogis Japan Properties Fund I		7,424		1,228,635		100.00	%		100.00	%
ProLogis Japan Properties Fund II (D)		3,208		384,622		100.00	%		—

Total Property Funds		172,636		11,474,591		95.71	%		96.11	%


Total Industrial Portfolio		373,279	$	21,201,221		92.01	%		91.54	%
Total Retail Portfolio		1,011		272,537		93.31	%		92.17	%

Total Operating Portfolio		374,290	$	21,473,758		92.02	%		91.50	%

COMMENTS

(A)		At December 31, 2005, the stabilized portfolio consisted of 329,242 square feet and the total operating portfolio consisted of 351,491 square feet.
(B)		We define our stabilized properties as those properties where the capital improvements, repositioning efforts, new management and new marketing programs for acquisitions or developments, and marketing programs in the case of newly developed properties, have been in effect for a sufficient period of time, generally 12 months. A property enters the stabilized pool at the earlier of 12 months or when it becomes substantially occupied, generally defined as 93%.
(C)		The investment amount represents the CDFS joint venture’s/property fund’s basis in the real estate.
(D)		We made the initial contribution to these funds during the first quarter of 2006. See note 20.
(E)		The total operating portfolio consists of both stabilized properties and prestabilized properties.

Supplemental Information Page 12

ProLogis

Second Quarter 2006
Unaudited Financial Results

Portfolio Analysis (Continued)

By Geographic Area and Asset Classification

(in thousands, except for percentages)


					Leased Percentage
	Square		Current		June 30,			December 31,
	Feet		Investment		2006			2005 (A)


Stabilized Portfolio (B):
North America:
Direct Investment
Industrial operating properties		150,410	$	7,043,033		95.06	%		93.96	%
Retail operating properties		935		261,911		99.19	%		99.52	%
CDFS properties — repositioned acquisitions		8,190		361,559		100.00	%		90.35	%
CDFS properties — completed developments		7,127		291,877		88.29	%		90.99	%

Total Direct Investment — North America		166,662		7,958,380		95.04	%		93.82	%

CDFS joint ventures (C)		811		19,433		100.00	%		—
Property Funds (C)		103,721		5,200,515		94.63	%		95.69	%

Total North America Stabilized Portfolio		271,194		13,178,328		94.89	%		94.53	%


Europe:
Direct Investment
Operating properties		661		22,920		100.00	%		100.00	%
CDFS properties — repositioned acquisitions		611		30,367		80.33	%		69.30	%
CDFS properties — completed developments		4,588		361,989		78.60	%		69.27	%

Total Direct Investment — Europe		5,860		415,276		81.20	%		73.23	%

Property Fund (C)		58,283		4,660,819		96.86	%		96.34	%

Total Europe Stabilized Portfolio		64,143		5,076,095		95.43	%		93.85	%


Asia:
Direct Investment
CDFS properties — repositioned acquisitions		628		48,979		98.98	%		100.00	%
CDFS properties — completed developments		2,760		270,084		100.00	%		99.76	%

Total Direct Investment — Asia		3,388		319,063		99.81	%		99.79	%

CDFS joint ventures (C)		2,350		76,023		88.48	%		89.32	%
Property Funds (C)		10,632		1,613,257		100.00	%		100.00	%

Total Asia Stabilized Portfolio		16,370		2,008,343		98.31	%		98.00	%


Total Stabilized Portfolio		351,707	$	20,262,766		95.15	%		94.52	%


Operating Portfolio (E):
North America:
Total North America Stabilized Properties		271,194	$	13,178,328		94.89	%		94.53	%
Prestabilized Properties
Industrial operating properties		3,536		218,721		70.75	%		76.76	%
Retail operating properties		76		10,626		21.95	%		74.97	%
CDFS properties — repositioned acquisitions		2,775		133,148		37.83	%		10.02	%
CDFS properties — completed developments		8,673		321,845		40.38	%		25.07	%
CDFS joint ventures (C)		501		14,227		0.00	%		100.00	%

Total Prestabilized Properties — North America		15,561		698,567		45.43	%		51.08	%


Total North America Operating Portfolio		286,755		13,876,895		92.21	%		91.85	%


Europe:
Total Europe Stabilized Properties		64,143		5,076,095		95.43	%		93.85	%
Prestabilized Properties
CDFS properties — repositioned acquisitions		1,183		40,208		14.76	%		50.00	%
CDFS properties — completed developments		4,213		273,794		31.91	%		26.71	%

Total Prestabilized Properties — Europe		5,396		314,002		28.15	%		28.08	%


Total Europe Operating Portfolio		69,539		5,390,097		90.21	%		89.68	%


Asia:
Total Asia Stabilized Properties		16,370		2,008,343		98.31	%		98.00	%
Prestabilized Properties
CDFS properties — repositioned acquisitions		134		13,816		20.21	%		—
CDFS properties — completed developments		851		167,621		95.76	%		55.44	%
CDFS joint ventures (C)		641		16,986		51.16	%		47.84	%

Total Prestabilized Properties — Asia		1,626		198,423		71.95	%		51.65	%


Total Asia Operating Portfolio		17,996		2,206,766		95.93	%		93.35	%


Total Operating Portfolio		374,290	$	21,473,758		92.02	%		91.50	%

Comments are on page 12.

Supplemental Information Page 12a

ProLogis

Second Quarter 2006
Unaudited Financial Results

Lease Expirations

Total Operating Portfolio — Lease Expirations (A)

(in thousands, except for percentages)


Direct Investment
					Percentage of
	Square		Annual Base		Total Annual
	Footage		Rents (B)		Base Rents


2006 (C)		18,086	$	71,627		9.46	%
2007		24,265		103,821		13.72	%
2008		27,827		116,556		15.40	%
2009		24,912		100,603		13.29	%
2010		20,059		86,864		11.48	%
2011		20,742		91,376		12.07	%
2012		10,074		46,835		6.19	%
2013		4,803		21,585		2.85	%
2014		6,920		31,091		4.11	%
2015		2,721		26,891		3.55	%
2016		7,099		38,808		5.13	%
Thereafter		2,684		20,845		2.75	%

Totals		170,192	$	756,902		100.00	%


Property Funds and CDFS Joint Ventures
					Percentage of
	Square		Annual Base		Total Annual
	Footage		Rents (B)		Base Rents


2006 (C)		11,080	$	49,140		5.24	%
2007		18,058		83,963		8.96	%
2008		17,990		85,488		9.13	%
2009		21,125		108,698		11.61	%
2010		15,945		90,808		9.70	%
2011		17,763		86,729		9.26	%
2012		10,782		63,974		6.83	%
2013		9,657		56,561		6.04	%
2014		10,131		62,084		6.63	%
2015		11,949		82,838		8.84	%
2016		11,770		68,735		7.34	%
Thereafter		11,658		97,570		10.42	%

Totals		167,908	$	936,588		100.00	%

COMMENTS (square feet in thousands)

(A)		Includes the industrial and retail operating portfolio. Assumes customers do not exercise renewal options.
(B)		Represents annualized base rents at lease expiration. As of June 30, 2006, the weighted average base rent per square foot was $4.06 (direct investment) and $5.44 (property funds and CDFS industrial joint ventures).
(C)		Includes amounts leased on a month-to-month basis of 4,060 square feet (direct investment) and 1,884 square feet (property funds and CDFS industrial joint ventures).

Supplemental Information Page 13

ProLogis

Second Quarter 2006
Unaudited Financial Results

Top 25 Customers

Total Operating Portfolio — By Annualized Base Rent (A)(B)


		Percentage of
		Annualized			Number
Rank	Customer Name	Base Rent (C)			of Leases


1	Deutsche Post AG (DHL)		2.92	%		72
2	TPG N.V. (TNT Automotive)		1.53	%		17
3	Home Depot, Inc.		1.36	%		15
4	Nippon Express Group		1.30	%		18
5	NYK Line (Nippon Yusen Kaisha)		1.25	%		15
6	Unilever		1.24	%		7
7	NOL Group (Neptune Orient Lines)		1.05	%		18
8	Geodis		0.85	%		12
9	Sears Roebuck and Co.		0.84	%		14
10	Wal-Mart Stores, Inc.		0.84	%		11
11	Altria Group, Inc. (Kraft)		0.82	%		9
12	ID Logistics France		0.79	%		10
13	Wincanton Logistics		0.75	%		11
14	Sanyo Electric, Ltd.		0.74	%		5
15	Procter & Gamble		0.71	%		9
16	Kuehne & Nagel		0.69	%		14
17	Hitachi, Ltd.		0.66	%		5
18	PepsiCo		0.65	%		12
19	FedEx Corporation		0.60	%		19
20	PSA (Peugeot)		0.58	%		10
21	Shinkai TS Corp.		0.57	%		3
22	Amazon.com, Inc.		0.53	%		3
23	Renown Incorporated		0.52	%		1
24	Senko Co		0.50	%		2
25	Matsushita Electric Indust. Co. Ltd		0.49	%		2

	Total		22.78%	(D)		314

COMMENTS (square feet in thousands)

(A)		Includes customers leasing space in properties owned directly and in properties owned by property funds and CDFS industrial joint ventures.
(B)		As of June 30, 2006, including property funds and CDFS industrial joint ventures, we had 324 Focus 500 Customers (targeted users of distribution space). These customers lease 184,316 square feet of distribution space representing 49.4% of the total industrial operating portfolio as of June 30, 2006.
(C)		Percentage is based on the annualized collected base rents as of June 30, 2006.
(D)		When considering only our direct investment properties, the top 25 customers represented 19.39% of our total annualized collected base rents as of June 30, 2006.

Supplemental Information Page 13a

ProLogis

Second Quarter 2006
Unaudited Financial Results

Leasing Activity (A)


														Weighted
	Total Leasing Activity (B)				Turnover Costs (C)				Rent Growth (D)					Average
	No. of		Square		Square				Square					Tenant
	Leases		Feet		Feet		Cost		Feet		Growth			Retention

			(in thousands)		(in thousands)				(in thousands)
First Quarter		507		31,017		24,459	$	1.04		21,254		-0.4	%		73.4	%

Second Quarter		472		22,622		14,909	$	1.27		16,838		0.1	%		74.1	%


Year to Date		979		53,639		39,368	$	1.13		38,092		-0.2	%		73.8	%

Actual Capital Expenditures
For the Six Months Ended June 30, 2006
(in thousands, except for percentages)


	Recurring								Our Ownership			Our Share of
	Capital		Tenant		Leasing		Total Capital		Percentage for			Actual Capital
	Maintenance		Improvements		Commissions		Expenditures		the Period			Expenditures


ProLogis	$	11,469	$	24,176	$	11,771	$	47,416		100.0	%	$	47,416
ProLogis European Properties Fund		1,707		3,349		97		5,153		20.9	%		1,077
ProLogis California LLC		741		1,210		1,326		3,277		50.0	%		1,639
ProLogis North American Properties Fund I		445		639		839		1,923		41.3	%		794
ProLogis North American Properties Fund V		787		1,359		1,467		3,613		11.2	%		405
ProLogis North American Properties Fund VI-X		3,092		1,748		2,132		6,972		20.0	%		1,394
ProLogis North American Properties Fund XI		134		341		139		614		20.0	%		123

	$	18,375	$	32,822	$	17,771	$	68,968				$	52,848

COMMENTS

(A)		Represents leasing activity for industrial and retail space in properties that are directly owned and properties that are owned by the property funds and CDFS industrial joint ventures.
(B)		Represents all leases signed during the period, including leases for space in properties that are under development.
(C)		Represents the square feet and associated costs expected to be incurred i) to prepare a space for a new tenant, except for space that is being leased for the first time (i.e., in a new development property); ii) for a lease renewal with the same tenant; and iii) for space in properties acquired, if the space was vacant at the date of acquisition. The amount provided represents the total turnover costs expected to be incurred on the leases signed during the period and does not represent actual turnover expenditures for the period.
(D)		Represents the leasing activity and associated rent growth for space that has been previously leased. Excludes leasing activity and rent growth for space in properties acquired, until we have leased the space.

Supplemental Information page 14

ProLogis

Second Quarter 2006
Unaudited Financial Results

Same Store Analysis (A)

Percentage Change in

Square Footage

Net

Adjusted Net

of Same Store

Rental

Operating

Average

Rent Growth

Population

Income (B)

Expenses (C)

Income (D)

Income (E)

Occupancy

(F)

(in thousands)

First Quarter

274,361

+4.06%

+5.41%

+3.69%

+4.04%

+3.97%

-1.10%

Second Quarter

273,692

+2.24%

-0.65%

+3.03%

+3.24%

+2.96%

+2.50%

Year to Date

273,692

+3.23%

+2.39%

+3.47%

+3.75%

+3.41%

+0.20%

COMMENTS (in thousands)

(A)		A key component of our evaluation of the operating performance of our properties, our management personnel and our individual markets is a “same store” analysis. We define our same store portfolio of properties each quarter as those properties that have been in operation throughout the full quarter in both the current year and the prior year and that were also in operation at January 1st of the prior year. Accordingly, when a property is disposed of to a third party it will be removed from the population for the current quarter and the corresponding quarter of the prior year but previously presented quarterly information will not be changed. Same store statistics allow us to evaluate the actual operating performance of our operating portfolio as a consistent population from period to period and eliminates the effects of changes in the composition of the portfolio on performance measures.
		The percentage change presented is the weighted average of the measure computed separately for us and each of the property funds with the weighting based on each entity’s proportionate share of the combined component on which the change is computed. In order to derive an appropriate measure of period-to-period operating performance, the percentage change computation removes the effects of foreign currency exchange rate movements by computing each property’s components in that property’s functional currency.

(B)		Rental income includes the amount of rental expenses that are recovered from customers under the terms of their respective lease agreements. In computing the percentage change in rental income for the same store analysis, rental income is adjusted to remove the net termination fees recognized for each period. Net termination fees generally represent the gross fee negotiated at the time a customer is allowed to terminate its lease agreement offset by that customer’s rent leveling asset that has been previously recognized, if any. Removing the net termination fees for the same store calculation allows us to evaluate the growth or decline in each property’s rental income without regard to items that are not indicative of the property’s recurring operating performance. Customer terminations are negotiated under specific circumstances and are not subject to specific provisions or rights allowed under the lease agreements.
		Net termination fees removed from rental income were $1,564 and $2,372 for the three months ended June 30, 2006 and 2005, respectively and $2,362 and $7,958 for the six months ended June 30, 2006 and 2005, respectively.

(C)		Rental expenses represent gross property operating expenses. In computing the percentage change in rental expenses for the same store analysis, rental expenses include property management expenses for our direct owned properties based on the property management fee that has been computed as provided in the individual agreements under which our wholly owned management company provides property management services to each property (generally the fee is based on a percentage of revenues).
(D)		In computing the percentage change in net operating income, we compute net operating income as the weighted difference between rental income computed as described in comment B and rental expenses computed as described in comment C.
(E)		To derive adjusted net operating income, we adjust the net operating income computed as described in comment D to exclude the amount of straight-lined rents and adjustments for lease amortization recognized in each period. Lease amortization results from acquisitions where assets purchased include intangibles for above/below market leases that were in place as compared to the actual market value at the date of the acquisition. These above/below market leases are amortized over the remaining lease term as a reduction of rental revenue. The straight-lined rents and amortization removed from rental income were $2,741 and $3,223 for the three months ended June 30, 2006 and 2005, respectively and $6,301 and $7,574 for the six months ended June 30, 2006 and 2005, respectively.
(F)		Represents the weighted average rent growth associated with leasing activity for space that has been previously leased by us and/or the property funds. Excludes leasing activity and rent growth for space in properties acquired, until we have leased the space.

Supplemental Information Page 15

ProLogis

Second Quarter 2006
Unaudited Financial Results

Acquisitions and Dispositions (A)

(in thousands, except for percentages)


	Three Months Ended
	June 30,			March 31,			Year
	2006			2006			to Date


Acquisitions from third parties:
Operating properties acquired by us:
Square feet		6,109			1,524			7,633
Total expected investment of assets acquired ($)		321,462			111,736			433,198
Percentage leased at period end		83.90	%		84.37	%		91.84	%

Operating properties acquired by property funds:
Square feet		560			992			1,552
Total expected investment of assets acquired ($)		74,451			239,655			314,106
Percentage leased at period end		100.00	%		100.00	%		92.88	%


Dispositions:
Direct dispositions:
CDFS completed developments:
Contributions to property funds:
Square feet		5,055			3,430			8,485
Net sales proceeds ($)		412,764			262,920			675,684
Dispositions to third parties:
Square feet		385			205			590
Net sales proceeds ($)		57,686			47,765			105,451

CDFS repositioned acquisitions:
Contributions to property funds:
Square feet		—			—			—
Net sales proceeds ($)		—			—			—

Dispositions to third parties:
Square feet		—			—			—
Net sales proceeds ($)		—			—			—

Land dispositions:
Net sales proceeds ($)		29,830			52,866			82,696

Total CDFS assets (see page 17):
Square feet		5,440			3,635			9,075
Net sales proceeds ($)		500,280			363,551			863,831

Percentage of CDFS proceeds generated by contributions to property funds		82.5	%		72.3	%		78.2	%

Non-CDFS assets:
Contributions to property funds:
Square feet		—			1,403			1,403
Net sales proceeds ($)		—			49,656			49,656

Dispositions to third parties:
Square feet		624			1,986			2,610
Net sales proceeds ($)		205,986			137,747			343,733

Total all dispositions:
Square feet		6,064			7,024			13,088
Net sales proceeds ($)		706,266			550,954			1,257,220

Direct dispositions by property funds:
Square feet		—			42			42
Net sales proceeds ($)		—			10,180			10,180

COMMENT

(A)

Amounts do not include the acquisition of the 80% ownership interest of ProLogis North American Properties Funds II, III, and IV and the contribution of assets to ProLogis North American Industrial Fund that occurred in the first quarter of 2006. See note 14.

Supplemental Information Page 16

ProLogis

Second Quarter 2006
Unaudited Financial Results

CDFS Business Summary

(in thousands, except for percentages)

CDFS Leasing Activity


	Three Months Ended
	June 30,			March 31,			Year
	2006			2006			to Date
Square feet of leases signed on CDFS properties (A)		7,000			6,010			13,010
Square feet of leases signed on CDFS properties to repeat customers		3,599			3,041			6,640

Percentage to repeat customers		51.4	%		50.6	%		51.0	%

Proceeds from CDFS Dispositions/Contributions by Market/Region


	Three Months Ended									Percentage
	June 30,			March 31,			Year			of Total
	2006			2006			to Date			Proceeds
North America:
Atlanta, Georgia	$	10,075		$	3,112		$	13,187			1.53	%
Central New Jersey		9,486			—			9,486			1.10	%
Charlotte, North Carolina		40			—			40			0.00	%
Chicago, Illinois		70,638			—			70,638			8.18	%
Cincinnati, Ohio		—			21,479			21,479			2.49	%
Denver, Colorado		7,553			38,703			46,256			5.35	%
El Paso, Texas		485			—			485			0.06	%
Houston, Texas		29,613			—			29,613			3.43	%
Juarez, Mexico		—			3,224			3,224			0.37	%
Orlando, Florida		14,179			—			14,179			1.64	%
Phoenix, Arizona		1,925			—			1,925			0.22	%
Portland, Oregon		7,539			—			7,539			0.87	%
Reynosa, Mexico		—			7,387			7,387			0.86	%
San Antonio, Texas		—			10,390			10,390			1.20	%
Southern California		1,689			—			1,689			0.20	%
Toronto, Canada		—			4,296			4,296			0.50	%

		153,222			88,591			241,813			28.00	%


Europe:
France (Central)		26,850			—			26,850			3.11	%
France (South)		30,828			—			30,828			3.57	%
Germany (Rhine/Main)		29,844			—			29,844			3.45	%
Germany (South)		21,901			—			21,901			2.54	%
Italy (Milan)		—			15,432			15,432			1.79	%
Poland (South)		—			41,532			41,532			4.81	%
Poland (West)		11,348			10,639			21,987			2.55	%
Czech Republic (Prague)		—			12,294			12,294			1.42	%
Spain (Madrid)		—			49,107			49,107			5.68	%
United Kingdom (East Midlands)		58,458			—			58,458			6.77	%
United Kingdom (London and Southeast)		67,135			47,765			114,900			13.30	%
United Kingdom (North)		35,311			—			35,311			4.09	%
United Kingdom (South West)		12,290			—			12,290			1.42	%
United Kingdom (West Midlands)		53,093			34,654			87,747			10.16	%

		347,058			211,423			558,481			64.66	%


Asia:
Japan (Tokyo)		—			63,537			63,537			7.34	%

		—			63,537			63,537			7.34	%


Net sales proceeds on transactions before deferrals and recapture		500,280			363,551			863,831			100.00	%

Less: amounts not recognized (B)		(10,317	)		(23,608	)		(33,925	)
Add: deferred proceeds recapture (C)		1,577			13,298			14,875

Total CDFS disposition proceeds	$	491,540		$	353,241		$	844,781

COMMENTS

(A)		Represents leases of unleased space in completed industrial distribution developments or repositioned acquisitions signed during the period, including CDFS industrial joint ventures.

(B)		When we contribute properties to an entity in which we have an ownership interest, we do not recognize a portion of the proceeds in our computation of the gain resulting from the contribution. The amount of the proceeds that cannot be recognized relates to our continuing ownership interest in the contributed property through our ownership in the property fund. See notes 12 and 13.

(C)		We recognized previously deferred proceeds related to the acquisition and subsequent contribution of the assets of ProLogis North American Properties Funds II-IV in the first quarter of 2006 (see note 14) and amounts based on the change in our ownership of the ProLogis European Properties Fund.

Supplemental Information Page 17

ProLogis

Second Quarter 2006
Unaudited Financial Results

CDFS Business Summary (Continued)

(in thousands, except for percentages)

CDFS Asset Pipeline and Leasing Status by Product Classification


	June 30, 2006
	Square
	Feet		Investment (A)		Leased

Completed Developments and Acquired Properties (B):
North America:
CDFS properties — repositioned acquisitions		10,964	$	494,707		84.26	%
CDFS properties — completed developments		15,800		613,722		61.99	%

Total CDFS Operating Properties — North America		26,764		1,108,429		71.12	%

Europe:
CDFS properties — repositioned acquisitions		1,794		70,575		37.09	%
CDFS properties — completed developments		8,801		635,783		56.25	%

Total CDFS Operating Properties — Europe		10,595		706,358		53.00	%

Asia:
CDFS properties — repositioned acquisitions		762		62,795		85.14	%
CDFS properties — completed developments		3,611		437,705		99.00	%

Total CDFS Operating Properties — Asia		4,373		500,500		96.59	%

Total Acquired and Developed Properties (see page 12a)		41,732		2,315,287		69.19	%


Properties Under Development — Direct Owned (B):
North America		8,377		467,300		13.35	%
Europe		10,095		743,692		28.14	%
Asia		9,931		924,973		34.18	%

Total Properties Under Development (see page 18)		28,403		2,135,965		25.89	%

Total CDFS Asset Pipeline — Direct Owned		70,135	$	4,451,252		51.65	%


Completed Properties — CDFS Joint Ventures (C):
North America		1,312	$	16,830		61.82	%
Asia		2,991		46,505		80.49	%

Total Completed Properties — CDFS Joint Ventures		4,303		63,335		74.79	%


Properties Under Development — CDFS Joint Ventures (C):
Europe		150		3,637		0.00	%
Asia		1,484		36,673		58.16	%

Total Properties Under Development — CDFS Joint Ventures (see page 18a)		1,634		40,310		52.82	%

Total CDFS Asset Pipeline — CDFS Joint Ventures		5,937	$	103,645		68.75	%

Total CDFS Asset Pipeline (D)		76,072	$	4,554,897		52.99	%

CDFS Assets By Geographic Area (B)


	June 30, 2006
	Square
	Feet		Investment (A)		Leased

North America		36,453	$	1,592,559		57.50	%
Europe		20,840		1,453,687		40.58	%
Asia		18,779		1,508,651		57.98	%


Total CDFS Asset Pipeline (D)		76,072	$	4,554,897		52.99	%

COMMENTS

(A)		For operating properties represents current investment; for properties under development represents total expected investment.

(B)		Includes only industrial properties.

(C)		Represents 100% of the square footage and our proportionate share of the investment in industrial properties under development in CDFS joint ventures in which we have a weighted average 50% ownership interest.

(D)		Includes 100% of the properties owned directly. Also includes 100% of the square footage and our proportionate share of the investment in industrial properties under development in the CDFS joint ventures.

Supplemental Information Page 17a

ProLogis

Second Quarter 2006
Unaudited Financial Results

Development Summary (A)

(in thousands, except for costs per square foot and percentages)


	June 30,			March 31,			December 31,			September 30,
	2006			2006			2005			2005

Development Starts:
North America:
Square feet		4,952			1,718			272			2,495
Total expected investment ($)		243,008			122,295			17,068			82,567
Cost per square foot ($)		49.07			71.18			62.75			33.09
Europe:
Square feet		2,259			5,332			1,798			2,047
Total expected investment ($)		138,047			327,867			108,061			154,413
Cost per square foot ($)		61.11			61.49			60.10			75.43
Asia:
Square feet		1,363			4,302			3,066			430
Total expected investment ($)		102,249			437,260			239,597			11,226
Cost per square foot ($)		75.02			101.63			78.15			26.11
Total:
Square feet		8,574			11,352			5,136			4,972
Total expected investment ($)		483,304			887,422			364,726			248,206
Cost per square foot ($)		56.37			78.17			71.01			49.92

Development Completions:
North America:
Square feet		4,244			2,936			3,756			3,380
Total expected investment ($)		154,507			117,177			144,573			161,228
Cost per square foot ($)		36.41			39.91			38.49			47.70
Leased percentage at completion (B)		44.27	%		48.32	%		34.78	%		29.54	%
Leased percentage as of 06/30/06					75.22	%		70.40	%		71.42	%
Europe:
Square feet		2,613			1,931			3,770			1,915
Total expected investment ($)		244,594			134,060			241,238			113,748
Cost per square foot ($)		93.61			69.43			63.99			59.40
Leased percentage at completion (B)		59.52	%		27.19	%		59.14	%		53.29	%
Leased percentage as of 06/30/06					47.22	%		78.85	%		100.00	%
Asia:
Square feet		1,071			1,626			163			634
Total expected investment ($)		186,979			210,395			5,247			54,304
Cost per square foot ($)		174.58			129.39			32.19			85.65
Leased percentage at completion (B)		96.63	%		100.00	%		0.00	%		100.00	%
Leased percentage as of 06/30/06					100.00	%		100.00	%		100.00	%
Total:
Square feet		7,928			6,493			7,689			5,929
Total expected investment ($)		586,080			461,632			391,058			329,280
Cost per square foot ($)		73.93			71.10			50.86			55.54
Leased percentage at completion (B)		56.37	%		54.98	%		45.91	%		44.74	%
Leased percentage as of 06/30/06					73.10	%		75.17	%		83.71	%

Under Development as of End of Period:
North America:
Square feet		8,377			7,670			8,886			12,460
Total expected investment ($)		467,300			373,252			362,995			495,900
Cost per square foot ($)		55.78			48.66			40.85			39.80
Leased percentage as of 06/30/06		13.35	%
Europe:
Square feet		10,095			10,451			7,447			9,848
Total expected investment ($)		743,692			814,925			622,571			822,876
Cost per square foot ($)		73.67			77.98			83.60			83.56
Leased percentage as of 06/30/06		28.14	%
Asia:
Square feet		9,931			9,591			6,914			4,125
Total expected investment ($)		924,973			1,005,550			776,650			542,278
Cost per square foot ($)		93.14			104.84			112.33			131.46
Leased percentage as of 06/30/06		34.18	%
Total:
Square feet		28,403			27,712			23,247			26,433
Total expected investment ($)		2,135,965			2,193,727			1,762,216			1,861,054
Cost per square foot ($)		75.21			79.17			75.80			70.41
Leased percentage as of 06/30/06		25.89	%

Construction in Progress (C):
North America ($)		180,544			202,675			196,805			214,048
Europe ($)		413,287			416,054			348,253			428,806
Asia ($)		356,813			422,736			339,287			226,848

Total Construction in Progress ($)		950,644			1,041,465			884,345			869,702

COMMENTS (square feet in thousands)

(A)		Includes a retail development that was started during the second quarter of 2006, which aggregates 224 square feet and has a total expected investment of $38.1 million and a retail development that was started in the first quarter of 2006, which aggregates 201 square feet and has a total expected investment of $58.9 million.

(B)		Represents the leased percentage as of the end of the quarter in which the development was completed.

(C)		Includes construction in progress for land, retail and industrial distribution properties development.

Supplemental Information Page 18

ProLogis

Second Quarter 2006
Unaudited Financial Results

Development Summary — CDFS Industrial Joint Ventures (A)

(in thousands, except for costs per square foot and percentages)


	June 30,			March 31,			December 31,		September 30,
	2006			2006			2005		2005


Development Starts:
North America (B):
Square feet		—			—			—		—
Total expected investment ($)		—			—			—		—
Cost per square foot ($)		—			—			—		—
Europe (B):
Square feet		150			—			—		—
Total expected investment ($)		7,273			—			—		—
Cost per square foot ($)		48.49			—			—		—
Asia (B):
Square feet		90			—			—		1,925
Total expected investment ($) (C)		23,419			—			—		60,430
Cost per square foot ($)		260.21			—			—		31.39
Total:
Square feet		240			—			—		1,925
Total expected investment ($)		30,692			—			—		60,430
Cost per square foot ($)		127.88			—			—		31.39

Development Completions:
North America (B):
Square feet		—			501			—		811
Total expected investment ($)		—			16,612			—		22,730
Cost per square foot ($)		—			33.15			—		28.03
Leased percentage at completion (D)		—			0.00	%		—		0.00	%
Leased percentage as of 06/30/06					0.00	%		—		100.00	%
Asia (B):
Square feet		—			531			—		677
Total expected investment ($)		—			17,232			—		18,583
Cost per square foot ($)		—			32.47			—		27.45
Leased percentage at completion (D)		—			50.00	%		—		59.69	%
Leased percentage as of 06/30/06					62.50	%		—		83.18	%
Total:
Square feet		—			1,032			—		1,488
Total expected investment ($)		—			33,844			—		41,313
Cost per square foot ($)		—			32.80			—		27.76
Leased percentage at completion (D)		—			25.72	%		—		27.14	%
Leased percentage as of 06/30/06					32.14	%		—		92.35	%

Under Development as of End of Period:
North America (B):
Square feet		—			—			501		501
Total expected investment ($)		—			—			16,612		16,612
Cost per square foot ($)		—			—			33.16		33.16
Leased percentage as of 06/30/06		—
Europe (B):
Square feet		150
Total expected investment ($)		7,273
Cost per square foot ($)		48.49
Leased percentage as of 06/30/06		0.00	%
Asia (B):
Square feet		1,484			1,394			1,925		1,925
Total expected investment ($)		73,346			43,198			60,430		60,430
Cost per square foot ($)		49.42			30.99			31.39		31.39
Leased percentage as of 06/30/06		58.16	%
Total:
Square feet		1,634			1,394			2,426		2,426
Total expected investment ($)		80,619			43,198			77,042		77,042
Cost per square foot ($)		49.34			30.99			31.76		31.76
Leased percentage as of 06/30/06		52.82	%

COMMENTS

	(A)		Includes only industrial properties owned by CDFS joint ventures.
	(B)		Represents 100% of the development activity of our CDFS industrial joint ventures operating in North America, Europe and Asia, in which we have a weighted average ownership interest of 50%.
	(C)		The total expected investment for the development start in the second quarter in Asia includes the costs to develop a container yard, which includes a small building. The cost for the entire project is reflected in the building cost per square foot.
	(D)		Represents the leased percentage as of the end of the quarter in which the development was completed.

Supplemental Information Page 18a

ProLogis

Second Quarter 2006
Unaudited Financial Results

Capital Structure

(in thousands, except per share amounts)

Debt Outstanding as of June 30, 2006


				Principal Maturities
				of Direct Debt
				(senior notes and fixed rate
Principal Outstanding				secured debt)


Direct Debt:
Senior notes:
7.05% Notes due 2006	$	250,000		2006	$	273,009
7.25% Notes due 2007		135,000		2007		376,457
7.95% Notes due 2008		50,000		2008		756,092
7.10% Notes due 2008		250,000		2009		124,833
8.72% Notes due 2009		56,250		2010		561,751
7.875% Notes due 2009		28,125		2011		494,068
7.30% Notes due 2009		25,000		2012		751,600
5.25% Notes due 2010		500,000		2013		375,608
4.375% Euro Notes due 2011		442,120		2014		49,131
5.50% Notes due 2012		450,000		2015		555,361
5.50% Notes due 2013		300,000		Thereafter		851,887
7.81% Notes due 2015		100,000		Add: premium, net		60,976

9.34% Notes due 2015		50,000			$	5,230,773

5.625% Notes due 2015		400,000
8.65% Notes due 2016		50,000
5.75% Notes due 2016		400,000
7.625% Notes due 2017		100,000
Less: discount		(11,110	)

Total senior notes		3,575,385


Fixed rate secured debt		1,655,388
Assessment bonds		33,786

		1,689,174


Subtotal		5,264,559


Lines of credit (see page 20)		2,274,350


Total direct debt		7,538,909


Our share of third party debt of unconsolidated investees:
Property funds (see page 11)		1,265,589
CDFS joint ventures		19,202
Other unconsolidated investees		45,505

		1,330,296


Total	$	8,869,205

Market Capitalization as of June 30, 2006


			Market
	Shares		Price at
	or Equivalents		June 30,		Market Value
	Outstanding		2006		Equivalents


8.54% Series C Cumulative Redeemable Preferred Shares		2,000	$	55.00	$	110,000
6.75% Series F Cumulative Redeemable Preferred Shares		5,000	$	23.53		117,650
6.75% Series G Cumulative Redeemable Preferred Shares		5,000	$	23.59		117,950

		12,000				345,600

Common Shares		245,085	$	52.12		12,773,830
Convertible limited partnership units (5,154 units)		5,155	$	52.12		268,679

		250,240				13,042,509


Total equity						13,388,109
Total debt (including our share of third party debt of unconsolidated investees)						8,869,205


Total market capitalization (including our share of third party debt of unconsolidated investees)					$	22,257,314

Supplemental Information Page 19

ProLogis

Second Quarter 2006
Unaudited Financial Results

Debt Analysis

Revolving Lines of Credit
(in thousands, except for percentages)


				Outstanding at						Weighted
	Total			June 30,		Remaining				Average
	Commitment			2006		Capacity				Interest Rate (A)


Global Line (B)	$	3,430,724		$	2,274,350	$	1,156,374	(D)			2.73	%
Other (C)		64,496			—		64,496	(E)			—

	$	3,495,220		$	2,274,350	$	1,220,870				2.73	%



*Weighted Average Interest Rates and Term to Maturity*


				Weighted		Weighted Average
				Average		Term to
	% of Debt			Interest Rate (A)		Maturity (F)


Revolving lines of credit		30.30	%		2.73%		n/a
Senior notes		47.64	%		5.99%	6.6			years
Secured debt		22.06	%		6.52%	6.9			years

Totals (G)		100.00	%		5.12%	6.7			years


*Financial Ratios*


				Six Months Ended		Year Ended
				June 30, 2006		December 31, 2005


Interest coverage ratio (H)					4.4		4.4
Fixed charge coverage ratio (I)					4.1		3.9
Total debt to total book assets (including our share of unconsolidated investees) (see pages 1 and 19)					54.8%		53.1%
Total debt to total market capitalization (including our share of unconsolidated investees) (see page 19)					39.8%		39.7%

COMMENTS

	(A)		Represents the weighted average base interest rates using local currency rates on borrowings that were outstanding at June 30, 2006.
	(B)		Represents a $3.4 billion global senior credit facility (“Global Line”) through a syndicate of banks, which was increased in June 2006 from a $2.6 billion facility. The total commitment fluctuates in U.S. dollars based on the underlying currencies. Funds may be drawn in U.S. dollar, euro, Japanese yen, British pound sterling, Chinese renminbi, South Korean won and Canadian dollar. Based on our public debt ratings, interest on the borrowings under the Global Line accrue at a variable rate based upon the interbank offered rate in each respective jurisdiction in which the borrowings are outstanding. The Global Line matures in October 2009, excluding a 12-month extension at our option for all currencies except the renminbi, which matures in May 2009.
	(C)		This facility represents a total commitment of 35 million British pound sterling.
	(D)		Excludes letters of credit outstanding with the lending banks aggregating $76.2 million at June 30, 2006.
	(E)		Excludes letters of credit outstanding with the lending bank aggregating $39.2 million at June 30, 2006.
	(F)		Calculated through final maturity for debt outstanding at June 30, 2006.
	(G)		Total direct debt excluding assessment bonds.
	(H)		Calculated as FFO as defined on pages 3a and 3b before impairment charges, preferred dividends and charges related to the redemption of preferred shares, interest expense and minority interest, divided by interest expense (interest expense excludes capitalized interest and amortization of loan costs).
	(I)		Calculated as FFO as defined on pages 3a and 3b before impairment charges, preferred dividends and charges related to the redemption of preferred shares, interest expense and minority interest, divided by combined interest expense (interest expense excludes capitalized interest and amortization of loan costs) and preferred dividends.

Supplemental Information Page 20


		Page


OVERVIEW:
Selected Financial Information		1

FINANCIAL STATEMENTS:
Consolidated Statements of Earnings		2 - 2a

Consolidated Statements of Funds From Operations (FFO)		3 - 3b

Reconciliations of Net Earnings to FFO		4

Reconciliations of Net Earnings to EBITDA		5

Consolidated Balance Sheets		6

SELECTED BALANCE SHEET INFORMATION:
Investments in and Advances to Unconsolidated Investees/Land Owned and Controlled		7

Notes to Consolidated Financial Statements		8 - 8d

SELECTED FINANCIAL INFORMATION:
Components of Net Asset Value and Related Comments		9 - 9a

Property Funds — EBITDA, FFO and Net Earnings		10-10a

Property Funds — Balance Sheets		11

SELECTED STATISTICAL INFORMATION:
Portfolio Analysis		12 - 12a

Lease Expirations		13

Top 25 Customers		13a

Leasing Activity/Actual Capital Expenditures		14

Same Store Analysis		15

SELECTED INVESTMENT INFORMATION:
Acquisitions and Dispositions		16

CDFS Business Summary		17 - 17a

Development Summary		18 - 18a

SELECTED OTHER INFORMATION:
Capital Structure		19

Debt Analysis		20

Geographic Distribution Based on Square Footage		21


North America	%			%		Europe	%

United States			Mexico

Atlanta		4.85	Guadalajara		0.11	Belgium		0.18
Austin		0.59	Juarez		0.37	Czech Republic		0.46
Central Valley (California)		1.52	Mexico City		0.83	France		6.74
Charlotte		1.68	Monterrey		0.47	Germany		1.13
Chicago		5.30	Reynosa		0.75	Hungary		0.57
Cincinnati		2.12	Tijuana		0.38	Italy		1.71

Columbus		3.19				Netherlands		1.47
Dallas/Fort Worth		5.51	Total Mexico		2.91	Poland		1.71

Denver		1.80				Spain		0.89
El Paso		1.00	Total North America		76.62%	Sweden		0.33

Greenville		0.72				United Kingdom		3.38

Houston		2.71
I-81 Corridor (E. Pennsylvania)		3.98				Total Europe		18.57%

Indianapolis		2.78
Las Vegas		0.67
Louisville		1.26
Memphis		2.79				Asia		%
Nashville		1.43
New Jersey		5.01				China		1.10
Orlando		0.78				Japan		3.63
Other non-target		0.40				Korea		0.04
Phoenix		0.95				Singapore		0.04

Portland		0.82
Reno		1.07				Total Asia		4.81%

Salt Lake City		0.60
San Antonio		1.71
San Diego		0.05
San Francisco-East Bay		1.49
San Francisco-South Bay		1.53
Seattle		0.31
South Florida		1.35
Southern California		10.14
St. Louis		0.77
Tampa		1.00
Washington D.C./Baltimore		1.83


Total United States		73.71