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Q3 2009 Earnings Call
October 22, 2009 10:30 am ET
Melissa Marsden, Managing Director of IR and Corporate Communications
Walt Rakowich - CEO
Bill Sullivan - CFO
Ted Antenucci - President and Chief Investment Officer
Chuck Sullivan - Head of Global Operations
Gary Anderson - Head of Global Investment Management
Steve Sakwa - ISI Group
Sloan Bohlen - Goldman Sachs
Ki Bin Kim - Macquarie
Michael Bilerman - Citi
Jamie Feldman - Bank of America/ Merrill Lynch
Mark Biffert - Oppenheimer
Ross Nussbaum – UBS
Chris Kanten - Morgan Stanley
Brendan Maiorana - Wells Fargo
David Fick - Stifel Nicolaus
Michael Mueller - JPMorgan
Previous Statements by PLD
» ProLogis Q2 2009 Earnings Call Transcript
» ProLogis, Q1 2009 Earnings Call Transcript.
» ProLogis Inc. Q4 2008 Earnings Call Transcript
Today's call is being recorded. All lines are currently in on a listen-only mode to prevent any background noise. (Operator Instructions).
At this time, I would like to turn the conference over to Ms. Melissa Marsden, Managing Director of Investor Relations and Corporate Communications with ProLogis. Please go ahead, ma'am.
Thank you, Whitney. Good morning everyone and welcome to our third quarter 2009 conference call. By now you should all have received an e-mail with the link to our supplemental, but if not the documents are available on our website at prologis.com under Investor Relations.
This morning, we will first hear from Walt Rakowich, CEO, to comment on progress relative to current initiatives and the overall environment, and then Bill Sullivan, CFO, will cover results, guidance and refinancing activity. Additionally, we are joined today by Ted Antenucci, President and Chief Investment Officer; Chuck Sullivan, Head of Global Operations; and Gary Anderson, Head of Global Investment Management.
Before we begin our prepared remarks, I would like to state that this conference call will contain forward-looking statements under Federal Securities laws. These statements are based on current expectations, estimates, and projections about the market and the industry in which ProLogis operates as well as management's beliefs and expectations.
Forward-looking statements are not guarantees of performance, and actual operating results may be affected by a variety of factors. For a list of those factors, please refer to the forward-looking statement notice in our SEC filings. I would also like to add that our third quarter results press release and supplemental do contain financial measures such as FFO and EBITDA that are non-GAAP measures, and in accordance with Reg G, we have provided reconciliation to those measures.
And as we've done in the past, to give a broader range of investors and analysts an opportunity to ask their questions, we will ask you to please limit your questions to one at a time.
Walt, would you please begin?
Today, I'm going to cover some of the trends and opportunities that we're seeing in the industrial market. But first, I would like to take a moment to reflect on the actions that we’ve taken to stabilize the company and position ourselves for future growth.
It's been about a year since we presented our plan to investors in New York. What a difference a year makes. Looking back over the last 12 months, we acted quickly and decisively through a series of sequential steps, each of which enhance the execution of the next.
In the aggregate, we completed more than $3.8 billion of asset sales and contributions. We raised almost $1.5 billion of equity, tapped the unsecured and secured debt markets to refinance debt, and bought back over $1.4 billion of bonds at a $320 million discount.
With these actions, we reduced direct debt by more than $3 billion, and substantially funded the remainder of our development portfolio. At the same time, we refinanced and extended over $2.2 billion of fund-related debt, cut G&A by over one-third, and brought our development portfolio leasing to nearly 62%.
During the quarter, we completed two of the remaining major items on our list. We successfully amended and extended our global line of credit and completed our bond holder consent solicitation. The list goes on and I won't [deliver] the point any further.
Those of you who have been following us understand what was at stake, and what it took to get done. ProLogis associates around the globe have worked diligently through arguably the most difficult conditions on record, to improve our financial condition and maintain high levels of leasing, and I'm incredibly proud of what we, as a team have accomplished. Now, it’s time to move forward.
Looking ahead, we see a global market that’s beginning to show signs of stability. Perhaps growth and expansion will come sooner than we thought. We'll see. However, we will remain highly focused on three things, continued lease-up of our development portfolio and monetization of our land bank, further staggering and extending our debt maturities and addressing property fund issues as appropriate.
Bill will have more on the last two of these priorities shortly; so, let me address market conditions and development opportunities.
Globally, industrial demand is still soft, but we are seeing signs of increased customer activity. We recently polled our top customers and not surprisingly, about two-thirds of those who we spoke with, expect a more positive outlook on their business by some time in 2010, although many of them felt that it may not occur until later in the year.
Importantly, several of them mentioned supply chain reconfiguration, which sometimes means expansion and sometimes simply a search of greater efficiencies. Either way, it's good for us because there is likely to be movement in the higher-quality, well-located and in many cases, newly-built facilities and that’s our business.