UPDATE 1-ProLogis first-quarter FFO shares fall

NEW YORK, April 29 (Reuters) - ProLogis (PLD.N), which builds and owns warehouse and distribution facilities, on Wednesday said rent and occupancy fell but it was significantly ahead of its goal to cut down its debt load.

The company reported first-quarter funds from operations of 86 cents per share down from $1.34 per share.

Including significant non-cash items, primarily related to gains from the early extinguishment of debt, the Denver-based company reported FFO of 90 cents per share, ahead of the average of analysts forecast of 80 cents per share, according to Reuters Estimates.

During the quarter, rent and occupancy slid reflecting the global economic downturn, as the sector's performance depends upon global trade.

For properties the company has operated at least a year, net operating income fell 1.9 percent, as rent fell 4.2 percent.

"On average, the company's non-development portfolio was 93.0 percent leased at the end of the first quarter, down from 94.7 percent at year-end 2008, in line with our expectations," Walter Rakowich, ProLogis chief executive, said in a statement.

In November 2008, ProLogis said it would cut its debt by $2 billion. Since then the company has sold it China operations, its Japan fund, and several other assets. Between October 1, and March 31, 2009, the company cut its outstanding debt by $1.7 billion.

On Wednesday the company said it would cut its quarterly dividend to 15 cents per share, down from an already reduced 25 cents per share.

Since the end of the first quarter, the company has further reduced it outstanding debt though its equity offering as well as from additional bond and convertible note buybacks.

"In light of our successful equity offering, we anticipate substantially exceeding our $2 billion de-leveraging goal by the end of 2009," William Sullivan, chief financial officer, said in a statement.

Due chiefly to the equity offering, the company revised its forecast for the year to FFO in the range of $1.31 to $1.48 from its prior outlook of $1.85 to $2.05. Analysts expect 2009 FFO of $1.55 per share.

In after-hours activity, ProLogis shares traded at $8.16, down 3.5 percent from their Wednesday closed of $8.46 on the New York Stock Exchange.

(Reporting by Ilaina Jonas)