"The fundamentals of our business were strong in 2005," the company states in the SEC document. "We increased our total operating portfolio of industrial distribution and retail properties owned or managed, including direct-owned properties, and properties owned by the property funds and CDFS (Corporate Distribution Facilities Services) joint ventures, to 349.7 million sf at Dec. 31, 2005 from 284.3 million sf at Dec. 31, 2004. We increased our same-store net operating income by 1.5% in 2005 over 2004."

Although the company posted negative 1.5% growth in same store rent growth in 2005, that was an improvement of the 5.8% drop in 2004 and a negative 5% in 2003. "The negative trend in rental rates started to reverse in the third and fourth quarters of 2005 when we had positive same store rent growth of 1% and 1.3%, respectively, for the first time since the second quarter of 2002," ProLogis execs say in the SEC filing. "The stabilized leased percentage as 94.5% at Dec. 31, 2005, compared with 92.3% at Dec. 31, 2004."

The company goes on to say that its net operating income of the CDFS business segment increased 44.9% compared to 2004 primarily due to the higher gross margins that were earned on contributions and increased development fees and interest income. "We started the development of projects with a total expected cost at completion of $2.1 billion and completed development projects at a total cost of $1.4 billion in 2005," the document states. "This compares with 2004 when we started development projects with a total expected cost at completion of $1.2 billion and completed development projects at a total cost of $900 million."