BRE PROPERTIES INC /MD/ - FORM 8-K - EX-99.2 - SUPPLEMENTAL FINANCIAL DATA

Attached files

file	filename
8-K - FORM 8-K - BRE PROPERTIES INC /MD/	d8k.htm
EX-10.1 - AMENDED AND RESTATED EMPLOYMENT AGREEMENT - BRE PROPERTIES INC /MD/	dex101.htm
EX-99.1 - PRESS RELEASE - BRE PROPERTIES INC /MD/	dex991.htm

Exhibit 99.2

LOGO

Villa Granada, Santa Clara, CA

BRE Properties, Inc.

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

For the Quarter Ended December 31, 2010

LOGO

BRE Properties, Inc.

Fourth Quarter 2010

Earnings Release and

Supplemental Financial Data


Table of Contents	Page

Financial and Operating Highlights		1

Consolidated Balance Sheets		2

Consolidated Statements of Income - Comparative Quarters		3

Consolidated Statements of Income - Past Five Quarters		4

Reconciliation of FFO, Capital Expenditures, and Continuing and Discontinued Operations		5

Market Summaries “Same-Store” Data

- Quarter vs. Quarter		6

- YTD 2010 vs. YTD 2009		7

- Sequential “Same-Store” Operating Data		8

- Summary of Revenue and Occupancy Changes		9

- Renewal and Lease Metrics		10

- Operating Metrics		11

Debt Structure		12

Development Communities and Land Held for Development		13

Exhibit A - Share Analysis		14

Exhibit B - 2011 Financial Outlook		15-16

Exhibit C - Non-GAAP Financial Measure Reconciliations and Definitions		17-18

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Except for the historical information contained herein, this document contains forward-looking statements regarding BRE and property performance, and is based on BRE’s current expectations and judgment. Actual results could vary materially depending on risks and uncertainties inherent to general and local real estate conditions, future interest rate levels or capital market conditions. For more details, please refer to BRE’s SEC filings, including its most recent Annual Report on Form 10-K and quarterly report on Form 10-Q.

BRE Properties, Inc.

Financial and Operating Highlights

Fourth Quarter 2010

(Unaudited; in thousands, except per share, ratio and community data)


	Quarter ending December 31
	2010		2009
Selected Financial Results

Total revenues⁽¹⁾	$	89,174	$	80,983
Total real estate expenses⁽¹⁾	$	28,704	$	25,902
G&A expense	$	5,116	$	4,742
EBITDA ⁽²⁾	$	57,138	$	54,604
Interest expense	$	21,428	$	21,292
Net income/(loss)	$	149	($	7,156	)
Funds from operations ⁽²⁾	$	9,762	$	16,045
Net income/(loss) per share ⁽³⁾	$	0.00	($	0.13	)
FFO per share⁽²⁾	$	0.15	$	0.29

	Twelve months ending December 31
	2010		2009
Total revenues⁽¹⁾	$	341,973	$	326,180
Total real estate expenses⁽¹⁾	$	111,326	$	102,734
G&A expense	$	20,570	$	17,390
EBITDA ⁽²⁾	$	222,807	$	225,971
Interest expense	$	84,894	$	82,734
Net income	$	41,576	$	50,642
Funds from operations ⁽²⁾	$	98,866	$	120,789
Net income per share ⁽³⁾	$	0.67	$	0.95
FFO per share⁽²⁾	$	1.58	$	2.23


	Q4 2010			Q4 2009
Financial Metrics

Debt-to-EBITDA		7.8x			8.5x
Debt-to-total market capitalization		37.3	%		48.0	%
Debt-to-gross assets		47.2	%		52.4	%
Secured debt-to-gross assets		21.4	%		21.1	%
Fixed charge coverage ratio ⁽⁴⁾		2.4x			2.4x
Fixed charge coverage ratio		2.1x			2.0x


Capitalization

BRE common share price, 9/30/10	$	41.50
BRE common share price, 12/31/10	$	43.50

Common shares and units - Outstanding		65,290

period end
quarter average		64,305
year-to-date average		62,105
Total funded debt	$	1,792,918
Preferred equity (liquidation value)	$	175,000
Common equity (at market)	$	2,840,115
Total market capitalization	$	4,808,033
Total assets, gross at 12/31/10	$	3,796,703


	Quarter ending December 31
	2010			2009

Same-Store Operating Results
Revenue growth (%)		0.4	%		-5.8	%
Expense growth (%)		0.4	%		3.6	%
NOI growth (%)		0.4	%		-9.5	%
Operating margin		68.8	%		68.8	%
Occupancy (avg. physical)		95.5	%		95.2	%

	Twelve months ending December 31
	2010			2009
Revenue growth (%)		-2.0	%		-3.9	%
Expense growth (%)		1.7	%		1.9	%
NOI growth (%)		-3.7	%		-6.4	%
Operating margin		68.1	%		69.3	%
Occupancy (avg. physical)		95.6	%		94.3	%
Annual turnover ratio		61.0	%		64.5	%


	Quarter ending December 31
	2010			2009
Non Same-Store Operating Results

Revenues	$	11,594		$	3,718
NOI	$	7,319		$	2,294
Occupancy (avg. physical)		92.0	%		88.9	%
Gross asset value	$	755,958		$	282,936
Units		2,404			801

	Twelve months ending December 31
	2010			2009
Revenues	$	31,767		$	9,719
NOI	$	20,384		$	5,419
Occupancy (avg. physical)		86.2	%		78.2	%


Community Information

As of December 31, 2010
Operating:	Properties	Units

Wholly or majority owned
Same-store	66	18,914
Non same-store	9	2,404
Total	75	21,318

Joint venture	13	4,080

Development Pipeline:
Under construction	1	336
Land owned for development	5	1,406
Land under contract	1	361

(1)	Revenues reported exclude results from discontinued operations, partnership income and other income. Expenses exclude discontinued operations.

(2)	Please refer to Exhibit C for definitions and reconciliations of all non-GAAP financial measures presented in this package.

(3)	Represents diluted per share amounts.

(4)	Interest expense, excluding non cash interest expense and capitalized interest.

Page 1

BRE Properties, Inc.

Consolidated Balance Sheets

Fourth Quarter 2010

(Unaudited, dollar amounts in thousands except per share data)


	December 31, 2010			December 31, 2009
ASSETS

Real estate portfolio:
Direct investments in real estate:

Investments in rental properties	$	3,464,466		$	3,180,633
Construction in progress		29,095			101,354
Less: accumulated depreciation		(640,456	)		(583,953	)

		2,853,105			2,698,034

Equity in real estate joint ventures:
Investments		61,132			61,999

Land under development		183,291			155,532


Total real estate portfolio		3,097,528			2,915,565

Cash		6,357			5,656
Other assets		52,362			58,787


TOTAL ASSETS	$	3,156,247		$	2,980,008


LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:
Unsecured senior notes	$	773,076		$	826,918
Unsecured line of credit		209,000			288,000
Mortgage loans payable		810,842			752,157
Accounts payable and accrued expenses		52,070			56,409


Total liabilities		1,844,988			1,923,484


Redeemable noncontrolling interests		34,866			33,605


Shareholders’ equity:

Preferred Stock, $0.01 par value; 20,000,000 shares authorized: 7,000,000 shares with $25 liquidation preference issued and outstanding at December 31, 2010 and December 31, 2009 , respectively.		70			70

Common stock, $0.01 par value, 100,000,000 shares authorized. Shares issued and outstanding: 64,675,815 and 55,136,359 at December 31, 2010 and December 31, 2009, respectively.		647			551

Additional paid-in capital		1,275,676			1,022,298


Total shareholders’ equity		1,276,393			1,022,919


TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	$	3,156,247		$	2,980,008

Page 2

BRE Properties, Inc.

Consolidated Statements of Income

Quarters Ended December 31, 2010 and 2009

(Unaudited, dollar and share amounts in thousands)


	Quarter ended 12/31/10			Quarter ended 12/31/09			Twelve months ended 12/31/10			Twelve months ended 12/31/09
REVENUES

Rental income	$	86,162		$	78,248		$	329,280		$	313,987
Ancillary income		3,012			2,735			12,693			12,193

Total revenues		89,174			80,983			341,973			326,180

EXPENSES

Real estate	$	28,704		$	25,902		$	111,326		$	102,734
Provision for depreciation		24,223			21,443			91,784			82,906
Interest		21,428			21,292			84,894			82,734
General and administrative		5,116			4,742			20,570			17,390
Other expenses ⁽¹⁾		211			13,522			5,298			13,522

Total expenses		79,682			86,901			313,872			299,286

Other income		681			876			2,934			3,459

Net (loss)/gain from extinguishment of debt		(22,949	)		(870	)		(23,507	)		1,470


Net (loss)/income before noncontrolling interests, partnership income and discontinued operations		(12,776	)		(5,912	)		7,528			31,823

Partnership income		586			531			2,178			2,329

(Loss)/Income from continuing operations		(12,190	)		(5,381	)		9,706			34,152

Discontinued operations:
Discontinued operations, net ⁽²⁾		401			1,572			5,018			8,614
Net gain on sales of discontinued operations		15,226			—			40,111			21,574

Income from discontinued operations		15,627			1,572			45,129			30,188

NET INCOME/(LOSS)	$	3,437		$	(3,809	)	$	54,835		$	64,340

Redeemable noncontrolling interest in income		335			394			1,446			1,885

Dividends attributable to preferred stock		2,953			2,953			11,813			11,813


NET INCOME/(LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	149		$	(7,156	)	$	41,576		$	50,642


Net income/(loss) per common share - basic	$	0.00		$	(0.13	)	$	0.67		$	0.95


Net income/(loss) per common share - assuming dilution	$	0.00		$	(0.13	)	$	0.67		$	0.95


Weighted average shares outstanding - basic⁽³⁾		64,305			54,540			61,420			52,760


Weighted average shares outstanding - assuming dilution ⁽³⁾		64,305			54,540			61,420			52,761

(1)

For the three months ended December 31, 2010, $211,000 of acquisition costs were reported in other expenses. During the twelve months ended December 31, 2010, other expenses include a $1,300,000 one-time charge associated with resignation of our COO and $3,998,000 related to acquisition costs. For the three and twelve months ended December 31, 2009, other expenses include a $12,900,000 abandonment charge related to three sites under option agreements or letters of intent and a $600,000 severance charge.

(2)	For 2009 and 2010, includes four operating properties sold during the twelve months ending December 31, 2010. The 2009 totals also include results from two properties sold in 2009.


	Quarter ended 12/31/10			Quarter ended 12/31/09			Twelve months ended 12/31/10			Twelve months ended 12/31/09
Rental and ancillary income	$	885		$	4,498		$	12,458		$	22,666
Real estate expenses		(369	)		(1,640	)		(4,840	)		(8,538	)
Provision for depreciation		(115	)		(1,286	)		(2,600	)		(5,514	)

Income from discontinued operations, net	$	401		$	1,572		$	5,018		$	8,614

(3)	See analysis of weighted average shares and ending shares in Exhibit A.

Page 3

BRE Properties, Inc.

Consolidated Statements of Income

Past Five Quarters

(Unaudited, dollar amounts in thousands)


	Dec. 31, 2010			Sept. 30, 2010		June 30, 2010			Mar. 31, 2010		Dec. 31, 2009
REVENUES

Rental income	$	86,162		$	83,752	$	80,829		$	78,537	$	78,248
Ancillary income		3,012			3,436		3,120			3,126		2,735

Total revenues		89,174			87,188		83,949			81,663		80,983

EXPENSES

Real estate	$	28,704		$	28,337	$	27,713		$	26,573	$	25,902
Provision for depreciation		24,223			23,209		22,470			21,883		21,443
Interest		21,428			21,639		20,727			21,099		21,292
General and administrative		5,116			5,015		5,233			5,206		4,742
Other expenses		211			2,391		1,771			925		13,522

Total expenses		79,682			80,591		77,914			75,686		86,901

Other income		681			741		788			724		876
Net (loss)/gain from extinguishment of debt		(22,949	)		—		(558	)		—		(870	)

(Loss)/income from continuing operations and discontinued operations		(12,776	)		7,338		6,265			6,701		(5,912	)

Partnership income		586			520		526			547		531


(Loss)/income from continuing operations		(12,190	)		7,858		6,791			7,248		(5,381	)
Discontinued operations:

Discontinued operations, net ⁽¹⁾		401			1,862		1,151			1,603		1,572
Net gain on sales of discontinued operations		15,226			13,203		11,681			—		—

Income from discontinued operations		15,627			15,065		12,832			1,603		1,572

NET INCOME/(LOSS)	$	3,437		$	22,923	$	19,623		$	8,851	$	(3,809	)

Redeemable noncontrolling interest in income		335			365		373			373		394
Dividends attributable to preferred stock		2,953			2,953		2,953			2,953		2,953

NET INCOME/(LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	149		$	19,605	$	16,297		$	5,525	$	(7,156	)


Net income/(loss) per common share - basic	$	0.00		$	0.30	$	0.26		$	0.10	$	(0.13	)


Net income/(loss) per common share - diluted	$	0.00		$	0.30	$	0.26		$	0.10	$	(0.13	)


Weighted average shares outstanding - basic⁽²⁾		64,305			64,050		61,820			55,320		54,540


Weighted average shares outstanding - assuming dilution⁽²⁾		64,305			64,210		61,990			55,415		54,540

(1)	Details of earnings from discontinued operations, net:


	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			Mar. 31, 2010			Dec. 31, 2009
Rental and ancillary income	$	885		$	3,410		$	3,703		$	4,460		$	4,498
Real estate expenses		(369	)		(1,376	)		(1,464	)		(1,633	)		(1,640	)
Provision for depreciation		(115	)		(172	)		(1,088	)		(1,224	)		(1,286	)

Income from discontinued operations, net	$	401		$	1,862		$	1,151		$	1,603		$	1,572

(2)	See analysis of weighted average shares and ending shares in Exhibit A.

Page 4

BRE Properties, Inc.

Reconciliation of Funds from Operations (FFO), and Capital Expenditures

(In thousands, except per share, unit and per unit data)


	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			Mar. 31, 2010			Dec. 31, 2009
CALCULATION OF FFO

NET INCOME/(LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	149		$	19,605		$	16,297		$	5,525		$	(7,156	)
Add back/ exclude:
Depreciation from continuing operations		24,223			23,209			22,470			21,883			21,443
Depreciation from discontinued operations		115			172			1,088			1,224			1,286
Redeemable noncontrolling interest in income ⁽¹⁾		—			365			373			373			—
Depreciation from unconsolidated entities		501			524			486			480			472
Net (gain) on sales of discontinued operations		(15,226	)		(13,203	)		(11,681	)		—			—
Less: Redeemable noncontrolling interests in income not convertible to common ⁽¹⁾		—			(105	)		(105	)		(105	)		—

FUNDS FROM OPERATIONS ⁽²⁾	$	9,762		$	30,567		$	28,928		$	29,380		$	16,045


Allocation to participating securities ⁽³⁾	$	(35	)	$	(161	)	$	(199	)	$	(261	)	$	(151	)

Weighted average shares and equivalents outstanding - assuming dilution		64,500			64,850			62,685			56,170			54,580


Funds from operations (per share)	$	0.15		$	0.47		$	0.46		$	0.52		$	0.29

(1)	OP units were dilutive for the quarters ending September 30, 2010, June 30, and 2010, March 31, 2010. OP units were anti-dilutive for the quarters ending December 31, 2010 and December 31, 2009, but dilutive for the twelve months ending December 31, 2010.

(2)	Funds From Operations (FFO) is calculated in accordance with the White Paper adopted by the National Association of Real Estate Investment Trusts in October 1999 (as amended in April 2002). See Exhibit C for further definition.

(3)	Adjustment to the numerators for diluted FFO per common share and diluted net income per common share calculations when applying the two class method for calculating EPS.


	Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		Mar. 31, 2010		Dec. 31, 2009
NON OPERATING EXPENSE ITEMS INCLUDED IN FFO

Net loss on extinguishment of debt	$	22,949		—	$	558		—	$	870

Net loss extinguishment of debt - per share	$	0.36	$	0.00	$	0.01	$	0.00	$	0.02
Acquisition costs	$	211	$	2,390	$	470	$	925		—

Acquisition costs - per share	$	0.00	$	0.04	$	0.01	$	0.02	$	0.00
Severance cost		—		—	$	1,300		—	$	600

Severance cost - per share	$	0.00	$	0.00	$	0.02	$	0.00	$	0.01
Abandonment cost		—		—		—		—	$	12,900

Abandonment cost - per share	$	0.00	$	0.00	$	0.00	$	0.00	$	0.24

	Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		Mar. 31, 2010		Dec. 31, 2009
CAPITAL EXPENDITURES

Recurring capital expenditures	$	7,129	$	5,679	$	6,446	$	3,797	$	5,080

Average apartment units in period		21,615		21,906		21,649		21,523		21,345
Capital expenditures per apartment unit in period	$	330	$	259	$	300	$	176	$	238
Capital expenditures per apartment unit-trailing four quarters	$	1,065	$	973	$	986	$	1,000	$	945

Revenue enhancing rehabilitation costs	$	1,801	$	1,840	$	1,178	$	1,125	$	1,545

Page 5

BRE Properties, Inc.

“Same-Store” Markets Summary

For the Quarters ended December 31, 2010 and 2009

(Dollar amounts in thousands)


			Revenues							Expenses
	No. of Units		Q4 2010		Q4 2009		% Change			Q4 2010		Q4 2009		% Change
California
San Diego		3,958	$	17,176	$	17,287		-0.6	%	$	4,788	$	4,667		2.6	%
Inland Empire		1,807		6,542		6,386		2.4	%		2,059		2,158		-4.6	%
Orange County		3,469		14,652		14,776		-0.8	%		4,601		4,474		2.8	%
Los Angeles		2,263		10,068		9,991		0.8	%		3,555		3,365		5.6	%
San Francisco		3,152		15,423		15,117		2.0	%		4,260		4,546		-6.3	%

Subtotal; California		14,649	$	63,861	$	63,557		0.5	%	$	19,263	$	19,210		0.3	%

Pacific Northwest
Seattle		2,963		9,801		9,955		-1.5	%		3,521		3,514		0.2	%

Non-Core Markets⁽¹⁾		1,302		3,647		3,501		4.2	%		1,359		1,323		2.7	%


Total Same-Store⁽²⁾		18,914	$	77,309	$	77,013		0.4	%	$	24,143	$	24,047		0.4	%


					Net Operating Income
	No. of Communities		No. of Units		Q4 2010		Q4 2009		% Change			% of Total
California
San Diego		13		3,958	$	12,388	$	12,620		-1.8	%		23.3	%
Inland Empire		7		1,807		4,483		4,228		6.0	%		8.4	%
Orange County		11		3,469		10,051		10,302		-2.4	%		18.9	%
Los Angeles		11		2,263		6,513		6,626		-1.7	%		12.3	%
San Francisco		10		3,152		11,163		10,571		5.6	%		21.0	%

Subtotal; California		52		14,649	$	44,598	$	44,347		0.6	%		83.9	%

Pacific Northwest
Seattle		11		2,963		6,280		6,441		-2.5	%		11.8	%

Non-Core Markets⁽¹⁾		3		1,302		2,288		2,178		5.1	%		4.3	%


Total Same-Store ⁽²⁾		66		18,914	$	53,166	$	52,966		0.4	%		100.0	%


							Net Operating Income
	No. of Communities			No. of units			Q4 2010			Q4 2009
“Non Same-Store” Summary
Acquired properties⁽³⁾		4			1,037		$	3,386			—
Lease up properties⁽⁴⁾		5			1,367			3,933			2,294
Discontinued operations⁽⁵⁾		6			2,282			516			2,858
Joint venture income⁽⁶⁾		13			4,080			586			531
Commercial and Other⁽⁷⁾		n/a			n/a			(15	)		(179	)
Other income		n/a			n/a			681			876

Total Non Same-Store		28			8,766		$	9,087		$	6,380


Less Properties Sold 2009 & 2010		(6	)		(2,282	)

Total All Units / NOI		88			25,398		$	62,253		$	59,346

(1)	Consists of one property in Sacramento, CA (400 Units) and two properties in Phoenix, AZ (902 units).

(2)	Consists of stabilized properties owned by BRE for at least five full quarters, starting October 1, 2009.

(3)	Consists of NOI from four properties acquired after October 1, 2009.

(4)	Consists of NOI from five properties fully delivered and under lease up. Three of these properties are moving to same-store during 2011.

(5)	Includes results from four properties sold in 2010 and two properties sold in 2009.

(6)	Consists of our percentage of net income derived from joint venture investments in rental properties.

(7)	Consists of NOI from commercial properties that will later be developed as multi-family and other real estate expenses. For the three months ended December 31, 2010 and 2009 other real estate expenses exceeded the NOI from commercial.

Page 6

BRE Properties, Inc.

“Same-Store” Markets Summary

For the Twelve Months Ended December 31, 2010 and 2009

(Dollar amounts in thousands)


			Revenues							Expenses
	No. of Units		YTD 2010		YTD 2009		% Change			YTD 2010		YTD 2009		% Change
California
San Diego		3,958	$	68,923	$	69,379		-0.7	%	$	19,832	$	19,364		2.4	%
Inland Empire		1,807		25,987		26,125		-0.5	%		8,836		8,888		-0.6	%
Orange County		3,469		58,539		60,511		-3.3	%		18,445		17,912		3.0	%
Los Angeles		2,263		40,374		40,736		-0.9	%		13,622		13,834		-1.5	%
San Francisco		3,152		61,366		62,391		-1.6	%		17,495		17,216		1.6	%

Subtotal; California		14,649	$	255,189	$	259,142		-1.5	%	$	78,230	$	77,214		1.3	%

Pacific Northwest
Seattle		2,963		39,521		42,043		-6.0	%		14,627		14,091		3.8	%

Non-Core Markets⁽¹⁾		1,302		14,406		14,338		0.5	%		5,712		5,643		1.2	%


Total Same-Store⁽²⁾		18,914	$	309,116	$	315,523		-2.0	%	$	98,569	$	96,948		1.7	%


					Net Operating Income
	No. of Communities		No. of Units		YTD 2010		YTD 2009		% Change			% of Total
California
San Diego		13		3,958	$	49,091	$	50,015		-1.8	%		23.5	%
Inland Empire		7		1,807		17,151		17,237		-0.5	%		8.1	%
Orange County		11		3,469		40,094		42,599		-5.9	%		19.0	%
Los Angeles		11		2,263		26,752		26,902		-0.6	%		12.7	%
San Francisco		10		3,152		43,871		45,175		-2.9	%		20.8	%

Subtotal; California		52		14,649	$	176,959	$	181,928		-2.7	%		84.1	%

Pacific Northwest
Seattle		11		2,963		24,894		27,952		-10.9	%		11.8	%

Non-Core Markets⁽¹⁾		3		1,302		8,694		8,695		0.0	%		4.1	%



Total Same-Store ⁽²⁾		66		18,914	$	210,547	$	218,575		-3.7	%		100.0	%


							Net Operating Income
	No. of Communities			No. of units			YTD 2010			YTD 2009
“Non Same-Store” Summary
Acquired properties⁽³⁾		4			1,037		$	6,701			—
Lease up properties⁽⁴⁾		5			1,367			13,683			5,419
Discontinued operations⁽⁵⁾		6			2,282			7,618			14,128
Joint venture income⁽⁶⁾		13			4,080			2,178			2,329
Commercial and Other⁽⁷⁾		n/a			n/a			(284	)		(549	)
Other income		n/a			n/a			2,934			3,459

Total Non Same-Store		28			8,766			32,830			24,786


Less Properties Sold 2009 & 2010		(6	)		(2,282	)

Total All Units / NOI		88			25,398		$	243,377			243,361

(1)	Consists of one property in Sacramento, CA (400 Units) and two properties in Phoenix, AZ (902 units).

(2)	Consists of stabilized properties owned by BRE for at least eight full quarters, starting January 1, 2009.

(3)	Consists of NOI from four properties acquired after January 1, 2009.

(4)	Consists of NOI from five properties fully delivered and under lease up. Three of these properties are moving to same-store during 2011.

(5)	Includes results from four properties sold in 2010 and two properties sold in 2009.

(6)	Consists of our percentage of net income derived from joint venture investments in rental properties.

(7)	Consists of NOI from commercial properties that will later be developed as multi-family and other real estate expenses. For the twelve months ended December 31, 2010 and 2009 other real estate expenses exceeded the NOI from commercial.

Page 7

BRE Properties, Inc.

Sequential “Same-Store” Multifamily Markets Summary

Last five quarters

REVENUES


	Q4 2010			Q3 2010			Q2 2010			Q1 2010			Q4 2009
California
San Diego		-0.5	%		0.3	%		-0.4	%		-0.1	%		0.1	%
Inland Empire		0.5	%		0.3	%		0.7	%		0.9	%		-2.3	%
Orange County		-0.3	%		1.0	%		-0.7	%		-0.9	%		-2.2	%
Los Angeles		-1.3	%		1.6	%		-0.4	%		0.8	%		-1.6	%
San Francisco		-1.5	%		2.3	%		2.2	%		-0.9	%		-2.5	%

Subtotal; California		-0.7	%		1.2	%		0.3	%		-0.2	%		-1.6	%

Pacific Northwest
Seattle		-1.3	%		-0.4	%		1.4	%		-1.3	%		-4.2	%
Non-Core Markets⁽¹⁾		0.0	%		2.0	%		1.3	%		0.9	%		-2.2	%

Total Same Store ⁽³⁾		-0.8	%		1.0	%		0.5	%		-0.3	%		-2.0	%


EXPENSES ⁽²⁾
	Q4 2010			Q3 2010			Q2 2010			Q1 2010			Q4 2009
California
San Diego		-3.7	%		1.0	%		-4.3	%		10.3	%		-3.5	%
Inland Empire		-11.0	%		2.7	%		2.1	%		2.3	%		-5.0	%
Orange County		-4.4	%		6.0	%		1.1	%		0.4	%		-1.2	%
Los Angeles		5.4	%		-2.0	%		5.9	%		-3.4	%		-5.8	%
San Francisco		-3.1	%		-2.3	%		3.7	%		-4.6	%		6.5	%

Subtotal; California		-3.1	%		1.1	%		1.2	%		1.2	%		-1.4	%

Pacific Northwest
Seattle		-5.1	%		-4.6	%		10.9	%		-0.2	%		-3.1	%
Non-Core Markets⁽¹⁾		-7.6	%		5.2	%		-5.8	%		12.2	%		-15.4	%

Total Same Store ⁽³⁾		-3.6	%		0.4	%		2.1	%		1.6	%		-2.5	%


NET OPERATING INCOME
	Q4 2010			Q3 2010			Q2 2010			Q1 2010			Q4 2009
California
San Diego		-0.8	%		0.1	%		1.3	%		-3.9	%		1.4	%
Inland Empire		6.8	%		-0.9	%		0.0	%		0.2	%		-0.9	%
Orange County		1.7	%		-1.2	%		-1.5	%		-1.4	%		-2.7	%
Los Angeles		-4.6	%		3.5	%		-3.3	%		2.9	%		0.7	%
San Francisco		-0.9	%		4.2	%		1.6	%		0.6	%		-5.9	%

Subtotal; California		0.3	%		1.2	%		-0.1	%		-0.8	%		-1.7	%

Pacific Northwest
Seattle		1.0	%		2.4	%		-3.8	%		-1.9	%		-4.8	%
Non-Core Markets⁽¹⁾		5.1	%		-0.1	%		6.4	%		-5.9	%		8.0	%

Total Same Store ⁽³⁾		0.6	%		1.3	%		-0.3	%		-1.2	%		-1.7	%

(1)	Consists of one property in Sacramento, CA (400 Units) and two properties in Phoenix, AZ (902 units).

(2)	Expenses fluctuate from quarter to quarter due to timing of repairs and maintenance, utilities and other items.

(3)	Data reflects sequential results for the company’s current same-store pool totaling 18,914 units for all periods shown.

Page 8

BRE Properties, Inc.

Summary of Revenue and Occupancy Changes - “Same-Store” properties

For the period ending December 31, 2010


Q4’10 vs. Q3’10 Change			Average Revenue per Unit ⁽¹⁾							Financial Occupancy⁽²⁾									Rental Revenue

	units		Q4 2010		Q3 2010		% Change			Q4 2010			Q3 2010			% Change			Q4 2010		Q3 2010		% Change
San Diego		3,958		1,524		1,524		0.0	%		94.9	%		95.4	%		-0.5	%		17,176		17,264		-0.5	%
Inland Empire		1,807		1,253		1,249		0.4	%		96.3	%		96.2	%		0.1	%		6,542		6,511		0.5	%
Orange County		3,469		1,476		1,477		-0.1	%		95.4	%		95.6	%		-0.2	%		14,652		14,695		-0.3	%
Los Angeles		2,263		1,563		1,560		0.2	%		94.9	%		96.3	%		-1.4	%		10,068		10,198		-1.3	%
San Francisco		3,152		1,713		1,702		0.7	%		95.2	%		97.3	%		-2.1	%		15,423		15,660		-1.5	%
Seattle		2,963		1,159		1,161		-0.1	%		95.1	%		96.2	%		-1.1	%		9,801		9,929		-1.3	%

Non Core Markets		1,302		966		961		0.6	%		96.6	%		97.2	%		-0.6	%		3,647		3,648		0.0	%


Same Store		18,914		1,430		1,427		0.2	%		95.3	%		96.2	%		-0.9	%		77,310		77,905		-0.8	%


Q4’10 vs. Q4’09 Change			Average Revenue per Unit ⁽¹⁾							Financial Occupancy⁽²⁾									Rental Revenue

	units		Q4 2010		Q4 2009		% Change			Q4 2010			Q4 2009			% Change			Q4 2010		Q4 2009		% Change
San Diego		3,958		1,524		1,504		1.4	%		94.9	%		96.8	%		-1.9	%		17,176		17,287		-0.6	%
Inland Empire		1,807		1,253		1,239		1.2	%		96.3	%		95.1	%		1.2	%		6,542		6,386		2.4	%
Orange County		3,469		1,476		1,482		-0.4	%		95.4	%		95.8	%		-0.4	%		14,652		14,776		-0.8	%
Los Angeles		2,263		1,563		1,544		1.2	%		94.9	%		95.3	%		-0.4	%		10,068		9,991		0.8	%
San Francisco		3,152		1,713		1,681		1.9	%		95.2	%		95.1	%		0.1	%		15,423		15,117		2.0	%
Seattle		2,963		1,159		1,198		-3.2	%		95.1	%		93.5	%		1.6	%		9,801		9,955		-1.5	%

Non Core Markets		1,302		966		953		1.3	%		96.6	%		93.8	%		2.8	%		3,647		3,501		4.2	%


Same Store		18,914		1,430		1,423		0.5	%		95.3	%		95.4	%		-0.1	%		77,310		77,012		0.4	%


YTD 2010 vs. YTD 2009 Change			Average Revenue per Unit ⁽¹⁾						Financial Occupancy⁽²⁾									Rental Revenue

	units		YTD 12/31/10	YTD 12/31/09		% Change			YTD 12/31/10			YTD 12/31/09			% Change			YTD 12/31/10	YTD 12/31/09		% Change
San Diego		3,958	1,520		1,528		-0.5	%		95.5	%		95.6	%		-0.1	%	68,923		69,379		-0.7	%
Inland Empire		1,807	1,247		1,276		-2.3	%		96.1	%		94.4	%		1.7	%	25,987		26,125		-0.5	%
Orange County		3,469	1,475		1,539		-4.1	%		95.3	%		94.5	%		0.9	%	58,539		60,511		-3.3	%
Los Angeles		2,263	1,551		1,612		-3.8	%		95.9	%		93.1	%		2.8	%	40,374		40,736		-0.9	%
San Francisco		3,152	1,687		1,748		-3.5	%		96.2	%		94.4	%		1.8	%	61,366		62,391		-1.6	%
Seattle		2,963	1,164		1,265		-8.0	%		95.5	%		93.5	%		2.0	%	39,521		42,043		-6.0	%

Non Core Markets		1,302	959		985		-2.6	%		96.1	%		93.1	%		3.0	%	14,406		14,338		0.5	%


Same Store		18,914	1,423		1,474		-3.5	%		95.7	%		94.3	%		1.4	%	309,115		315,522		-2.0	%

(1)	Average revenue per unit includes rental and ancillary income earned on occupied units during the period. Ancillary income per occupied unit totals approximately $50 per unit per month. Amounts reflect the effect of concessions amortized over the average lease term.

(2)

Financial occupancy is defined as gross potential rent less vacancy loss as a percentage of gross potential rent. Gross potential rent is determined by valuing occupied units at contract rates and vacant units at market rents. Vacancy loss is determined by valuing vacant units at current market rents.

Page 9

BRE Properties, Inc.

“Same-Store” New Lease and Renewal Metrics

As of December 31, 2010 and 2009


Sequential “Same-Store” New Lease Transaction Summary

			Transacted
	Move-ins		Effective Rent⁽¹⁾						Market Rent⁽²⁾						% Discount - effective rent to market rent⁽³⁾
	Q4 2010		Q4 2010		Q3 2010				Q4 2010		Q3 2010				Q4 2010			Q3 2010
California
San Diego		574	$	1,457	$	1,460	-0.2	%	$	1,478	$	1,475	0.2	%		-1.5	%		-1.0	%
Inland Empire		231		1,225		1,241	-1.3	%		1,233		1,244	-0.9	%		-0.6	%		-0.3	%
Orange County		439		1,471		1,444	1.9	%		1,486		1,499	-0.9	%		-1.0	%		-3.7	%
Los Angeles		249		1,557		1,514	2.9	%		1,585		1,537	3.1	%		-1.8	%		-1.5	%
San Francisco		394		1,697		1,751	-3.1	%		1,717		1,759	-2.3	%		-1.2	%		-0.4	%

Subtotal; California		1,887	$	1,495	$	1,497	-0.1	%	$	1,514	$	1,520	-0.4	%		-1.3	%		-1.5	%

Pacific Northwest
Seattle		301		1,140		1,117	2.1	%		1,191		1,139	4.6	%		-4.3	%		-1.9	%

Non-Core Markets		173		962		920	4.6	%		972		934	4.1	%		-1.0	%		-1.5	%


Total Same Store		2,361	$	1,411	$	1,406	0.4	%	$	1,433	$	1,428	0.4	%		-1.5	%		-1.5	%

(1)	Represents leased rent per unit less the monthly value of concessions awarded on new leases signed during the period (renewals are excluded).

(2)	Represents monthly market rent on the date leases noted above were signed. Market rents on leases signed may differ from overall community level market rent due to the weighting of units leased (1 bedrooms vs. 2’s etc.) during the period.

(3)	Represents discount realized from market rent levels on new leases signed during the quarter.


Renewal Lease Data by Market Q4’10
	Renewals
	Q4 2010		Q4 ‘10⁽⁴⁾ Effective		Expiring⁽⁵⁾ Effective
California
San Diego		384	$	1,539	$	1,500	2.6	%
Inland Empire		198		1,228		1,187	3.4	%
Orange County		539		1,428		1,390	2.7	%
Los Angeles		228		1,592		1,517	4.9	%
San Francisco		336		1,694		1,622	4.5	%

Subtotal; California		1,685	$	1,505	$	1,457	3.3	%

Pacific Northwest
Seattle		348		1,142		1,096	4.2	%

Non-Core Markets		203		1,012		970	4.4	%


Total Same Store		2,236	$	1,404	$	1,357	3.5	%

(4)	Represents leased rent per unit less the monthly value of concessions awarded on renewals signed during the quarter.

(5)	Represents leased rent per unit less the monthly value of concessions awarded on the prior lease that expired during the quarter.

Page 10

BRE Properties, Inc.

“Same -Store” Operating Metrics

As of December 31, 2010 and 2009


	No. of Units		Market Rent per Unit ⁽²⁾							Occupancy⁽³⁾						Turnover Ratio ⁽⁴⁾
	No. of Units		Q4’10		Q4’09		% Change			Q4’10			Q4’09			2010			2009
California
San Diego		3,958	$	1,488	$	1,494		-0.4	%		95.0	%		96.8	%		70	%		69	%
Inland Empire		1,807		1,254		1,245		0.8	%		96.4	%		94.6	%		62	%		69	%
Orange County		3,469		1,467		1,527		-3.9	%		95.4	%		95.8	%		60	%		62	%
Los Angeles		2,263		1,590		1,542		3.0	%		95.4	%		95.3	%		59	%		63	%
San Francisco		3,152		1,759		1,739		1.1	%		95.6	%		95.2	%		56	%		65	%

Subtotal; California		14,649	$	1,528	$	1,531		-0.2	%		95.5	%		95.7	%		62	%		66	%

Pacific Northwest

Seattle		2,963		1,181		1,135		4.1	%		95.2	%		93.1	%		55	%		60	%

Non-Core Markets⁽¹⁾		1,302		987		944		4.5	%		96.8	%		93.4	%		65	%		63	%


Total/Average Same Store ⁽⁵⁾		18,914	$	1,437	$	1,429		0.5	%		95.5	%		95.2	%		61	%		65	%

(1)	Consists of one property in Sacramento, CA (400 Units) and two properties in Phoenix, AZ (902 units).

(2)	Represents, by region, weighted average market level rents across the quarter.

(3)	Represents average physical occupancy for the quarter.

(4)	Represents the number of units turned over for the annual period, divided by the number of units in the region.

(5)	Consists of stabilized properties owned by BRE for at least five full quarters, starting October 1, 2009.

“Non Same-Store” Operating Metrics

Acquisition, development, held for sale and joint venture communities -Q4’10


			Number of Units
	ACQ		DEV		HELD FOR SALE		JV		Total		Market Rent/Unit		Average Occupancy
California
L.A./ Orange Co.		500		604		—		—		1,104	$	1,947		94.1	%
San Diego		194		—		—		—		194		1,777		94.3	%
San Francisco		343		270		—		—		613		1,850		85.2	%
Sacramento		—		—		—		236		236		1,160		98.0	%

Pacific Northwest
Seattle		—		493		—		—		493		1,590		94.8	%

Mountain/Desert Markets
Phoenix		—		—		—		1,248		1,248		808		96.8	%
Denver		—		—		—		2,596		2,596		972		96.2	%


Total/Average Non-Same Store		1,037		1,367		—		4,080		6,484	$	1,267		94.8	%


Total/Average Portfolio										25,398	$	1,393		95.3	%

Page 11

BRE Properties, Inc.

Debt Summary as of December 31, 2010

(Dollar amounts in thousands)


DEBT MATURITY SCHEDULE
	Secured Debt				Unsecured Debt								Weighted
	Amortization		Balloon		Floating			Fixed			Total		Avg. Rate⁽¹⁾			% of Debt
Year
2011	$	2,127	$	—	$	—		$	48,545		$	50,672		7.58	%		2.8	%
2012		1,236		65,507		209,000	⁽²⁾		35,000	⁽³⁾		310,743		3.14	%		17.3	%
2013		872		29,639		—			40,018			70,529		6.48	%		3.9	%
2014		3,839		—		—			50,000			53,839		4.82	%		3.0	%
2015		7,962		—		—			—			7,962		5.65	%		0.4	%
2016		9,041		—		—			—			9,041		5.65	%		0.5	%
2017		9,307		—		—			300,000			309,307		5.61	%		17.2	%
2018		9,853		—		—			—			9,853		5.65	%		0.5	%
2019		6,492		317,975		—			—			324,467		5.60	%		18.2	%
2020		3,346		343,646		—			—			346,992		5.62	%		19.4	%
2021		—		—		—			300,000			300,000		5.31	%		16.8	%

Total	$	54,075	$	756,767	$	209,000		$	773,563		$	1,793,405		5.20	%		100	%


WEIGHTED AVERAGE COST OF DEBT
				Weighted		Weighted			Percentage
	Balance			Avg. Term		Avg. Rate			Total Debt
Fixed Rate
Unsecured	$	738,563			7.00		5.65	%		41.2	%
Convertible (unsecured)		34,513	⁽³⁾		1.14		6.01	%		1.9	%
Secured		810,842			8.00		5.60	%		45.2	%

	$	1,583,918			7.39		5.63	%		88.3	%
Floating Rate
Unsecured		209,000			1.75		1.91	%		11.7	%

Total Debt	$	1,792,918			6.73		5.20	%		100.0	%


CAPITALIZED INTEREST
	4Q 2010		4Q 2009
Interest capitalized	$	2,749	$	3,526

	YTD ‘10		YTD ‘09
Interest capitalized	$	11,977	$	16,330


SENIOR UNSECURED DEBT RATING As of February 7, 2011

Moody’s	Baa2	(stable	)
Standard & Poor’s	BBB	(stable	)
Fitch	BBB-	(stable	)


SELECTED DEBT COVENANTS AND CREDIT RATIOS

	Requirement			Actual
Total Debt to Gross Assets		<60	%		47.2	%
Total Secured Debt to Total Assets		<40	%		21.4	%
Total Unencumbered Assets to Unsecured Debt		>1.6			2.75
Minimum Fixed Charge Coverage		>1.5			2.12
Unencumbered NOI		N/A			69.4	%


SUMMARY OF PREFERRED SHARES

	4Q 2010
Total preferred shares outstanding		7,000
Liquidation value	$	175,000
Dividend yield at par		6.75	%

(1)	Represents the weighted average effective interest rates of BRE’s debt maturities in the year in which they become due.

(2)	Outstanding balance under $750 million senior unsecured line of credit priced at LIBOR plus 47.5 bp, maturing in September 2012.

(3)	Represents $35 million cash principal with 4.125% coupon adjusted to reflect convertible debt accounting guidance effective January 2009.

Page 12

BRE Properties, Inc.

Development Communities and Land Held for Development

December 31, 2010

(Dollar amounts in millions)


CONSTRUCTION IN PROGRESS	Number of Units		Cost Incurred		Estimated Cost		Balance to Complete		Product Type
Lawrence Station
Sunnyvale, CA		336	$	29.1	$	110.6		81.5		Podium

Total CIP		336	$	29.1	$	110.6	$	81.5



LAND UNDER DEVELOPMENT ⁽¹⁾	Number of Units		Cost Incurred		Estimated Cost⁽²⁾		Product Type
Wilshire La Brea ⁽³⁾
Los Angeles, CA		470	$	108.3		TBR		Podium
Pleasanton
Pleasanton, CA		240		16.4		TBR		Garden
Park Viridian II
Anaheim, CA		250		27.1		TBR		Wrap
Town and Country
Sunnyvale, CA		280		26.3		TBR		Wrap
Aviara
Mercer Island, WA ⁽⁴⁾		166		5.5		TBR		Wrap

Total Land Owned		1,406	$	183.6	$	635.5


LAND UNDER CONTRACT ⁽⁵⁾	Number of Units		Cost Incurred⁽⁶⁾		Estimated Cost		Product Type
Walnut Creek BART
Walnut Creek, CA		361		8.4		133.0		Podium

Total		361	$	8.4	$	133.0

(1)	Represents projects in various stages of predevelopment, development and initial construction, for which construction or supply contracts have not yet been finalized. As these contracts are finalized, projects are transferred to construction in progress.

(2)	Reflects the aggregate cost estimates; specific property cost estimates To Be Reported (TBR) once entitlement approvals are received and the company is prepared to begin construction.

(3)	Project’s estimated cost reflects the construction of 470 units and 40,000 sq feet of retail. The estimated unit count and costs reflect the current underlying entitlements associated with the site.

(4)	During the fourth quarter, the Company entered into a ground lease for the Mercer Island site. The ground lease has an initial term of 60 years, two 15-year extensions followed by a 10-year extension. The annualized GAAP expense is approximately $664,000.

(5)

Land under contract represents land parcels for which we have a signed agreement by which we have the right to acquire or lease the land, made a non refundable deposit and commenced the entitlement process. Costs incurred on these projects are recorded in Other assets on the consolidated Balance Sheets.

(6)	Represents deposits, contractual costs, and entitlement expenses incurred to date.

Page 13


BRE Properties, Inc.		Exhibit A

Share Analysis as of December 31, 2010

(Dollar and share amounts in thousands)

SUMMARY OF COMMON SHARES


	Qtr. Ended 12/31/2010			Qtr. Ended 9/30/2010			Qtr. Ended 6/30/2010			Qtr. Ended 3/31/2010			Qtr. Ended 12/31/2009
Weighted Average
Weighted average shares outstanding ⁽¹⁾		64,305			64,050			61,820			55,320			54,540
Weighted average OP units⁽²⁾		—			640			695			755			—
Dilutive effect of stock based awards		195			160			170			95			40

Diluted shares - FFO ⁽²⁾		64,500			64,850			62,685			56,170			54,580
Less: Anti-dilutive OP Units ⁽³⁾		—			(640	)		(695	)		(755	)		—
Less: Anti-dilutive stock based awards ⁽³⁾		(195	)		—			—			—			—

Diluted shares - EPS⁽⁴⁾		64,305			64,210			61,990			55,415			54,540

	YTD 12/31/2010			YTD 12/31/2009
Weighted Average
Weighted average shares outstanding ⁽¹⁾		61,420			52,760
Weighted average OP units		685			780
Dilutive effect of stock based awards		175			1

Diluted shares - FFO		62,280			53,541
Less: Anti-dilutive OP Units ⁽³⁾		(685	)		(780	)
Less: Anti-dilutive stock based awards ⁽³⁾		(175	)		—

Diluted shares - EPS⁽⁴⁾		61,420			52,761

	As of 12/31/2010			As of 9/30/2010			As of 6/30/2010			As of 3/31/2010			As of 12/31/2009
Ending
Shares outstanding at end of period		64,675			64,088			64,022			55,663			55,137
OP units at end of period		615			639			639			715			771
Dilutive effect of stock based awards		170			160			175			95			40

Total		65,460			64,887			64,836			56,473			55,948

SUMMARY OF PREFERRED SHARES
	Qtr. Ended 12/31/2010			Qtr. Ended 9/30/2010			Qtr. Ended 6/30/2010			Qtr. Ended 3/31/2010			Qtr. Ended 12/31/2009
6.75% Series C, $25 per share liquidation preference		4,000			4,000			4,000			4,000			4,000
6.75% Series D, $25 per share liquidation preference		3,000			3,000			3,000			3,000			3,000

		7,000			7,000			7,000			7,000			7,000

(1)	Represents denominator for shares in the calculation of basic earnings per share.

(2)	OP Units are anti-dilutive for FFO and EPS for the quarters ended December 31, 2010 and December 31, 2009, and therefore are not included in shares calculation.

(3)	Under FASB guidance, common share equivalents deemed to be anti-dilutive are excluded from the diluted earnings per share calculations.

(4)	Represents denominator for shares in the calculation of diluted EPS.

Page 14


BRE Properties, Inc.		Exhibit B

2011 Financial Outlook

2011: EPS & FFO per share guidance


	Low End			High End
Earnings per share	$	0.52		$	0.64
Depreciation per share	$	1.54		$	1.54
Funds from operations per share	$	2.06		$	2.18

2011: Same-store outlook
	Low End			High End
Same-store revenue (2011 vs 2010)		3.00	%		4.25	%
Same-store expense (2011 vs 2010)		3.00	%		2.00	%
Same-store net operating income (2011 vs 2010)		3.00	%		5.31	%

2011: Other elements of guidance

2011 Same-store and non same-store pools
	Communities			Units
Ending 2010 Communities
Same-store		66			18,914

Non same-store
Lease-up communities		5			1,367
Acquisition communities (acquired in 2010)		4			1,037
Renovation communities		0			0

2011 pool adjustments
2010 lease-up communities moved to 2011 same-store		3			801
2010 same-store communities moved to 2011 renovation		1			440

2011 Communities
Same-store		68			19,275

Non same-store
Lease-up communities		2			566
Acquisition communities (acquired in 2010)		4			1,037
Renovation communities		1			440

Operating and capital elements	Level / Range
Occupancy (same-store)		95.5%
LIBOR (average)		50 - 60 bps

Acquisitions		$55,000,000
Dispositions		—			—
Development advances		$90,000,000 - $120,000,000
Capitalized interest		$11,500,000 - $12,500,000
Recurring capital expenditures		$20,000,000 - $22,000,000

Capital - Combined debt and equity issuance		$350,000,000 - $450,000,000

Detail of increase in shares outstanding	Low End			High End
Weighted average shares outstanding 2010		62,280,000			62,280,000
Impact of shares issued in 2010 weighted avg. outstanding for 2011		2,814,000			2,814,000
Impact of additional share issuance in 2011 Outlook (weighted avg.)		706,000			1,906,000

2011 Outlook weighted average shares outstanding		65,800,000			67,000,000

Page 15


BRE Properties, Inc.		Exhibit B, continued

2011: Detail of financial outlook line items against comparable 2010 actual results

(dollar amounts in thousands)


	2010 Actual			2011 Low End					2011 High End
Rental and ancillary revenues
Same-store ⁽¹⁾	$	318,201		$	327,747		3.00	%	$	331,725		4.25	%

Non same-store ⁽¹⁾
Lease-up communities		5,636			10,350					10,700
Acquisition communities		10,191			22,948					23,227
Renovation communities		6,853			6,900					6,900
Commercial & other		1,091			400					400

Total rental and ancillary revenues		341,973			368,345					372,952

Real estate expenses
Same-store ⁽¹⁾		101,999			105,059		3.00	%		104,039		2.00	%

Non same-store ⁽¹⁾
Lease-up communities		2,479			3,600					3,600
Acquisition communities		3,491			7,775					7,680
Renovation communities		1,983			2,000					2,000
Commercial & other		1,375			1,100					1,100

Total real estate expenses		111,326			119,534					118,419

Property level net operating income
Same-store ⁽¹⁾		216,202			222,688		3.00	%		227,686		5.31	%

Non same-store ⁽¹⁾
Lease-up communities		3,157			6,750					7,100
Acquisition communities		6,701			15,173					15,547
Renovation communities		4,870			4,900					4,900
Commercial & other		(284	)		(700	)				(700	)

Total property level net operating income		230,646			248,811					254,533

2011 acquisition communities (net) ⁽²⁾		0			1,700					1,700

Non real estate expenses
Provision for depreciation		91,784			100,500					100,500
General & administrative		20,570			22,750					21,250
Interest expense		84,894			85,000					82,000
Other expenses		5,298			0					0
Loss on retirement of debt		23,507			0					0

Total non real estate expenses		226,052			208,250					203,750

Partnership and other income
Partnership income		2,178			2,175					2,275
Other income non property related		2,934			1,800					1,900

Total partnership and other income		5,113			3,975					4,175

Discontinued operations - communities sold
Net operating income		7,618			0					0
Depreciation		(2,600	)		0					0
Gain on sales of discontinued operations		40,111			0					0

Total discontinued operations		45,128			0					0

Redeemable noncontrolling interest in income		1,446			1,350					1,350
Preferred stock dividends		11,813			11,813					11,813


Net income available to common shareholders	$	41,577		$	33,074				$	43,495


Reconciliation to funds from operations
Depreciation from continuing and discontinued ops		94,384			100,500					100,500
Depreciation from unconsolidated entities		1,991			2,000					2,000
Convertible redeemable noncontrolling interests in income		1,027			925					925
Gain on sales of discontinued operations		(40,111	)		0					0

Funds from operations	$	98,868		$	136,499				$	146,920

Numerator adjustment for EITF 03-06-01		(543	)		(800	)				(800	)

Diluted shares outstanding - FFO		62,280			65,800					67,000


FFO per common share	$	1.58		$	2.06				$	2.18

⁽¹⁾	2010 Actual Same-store and Non Same-store communities are presented to reflect results for the comparable 2011 community pool composition.

⁽²⁾	Net operating income from a property we expect to acquire in 2011, shown net of related expensed acquistion costs.

Page 16


BRE Properties, Inc.		Exhibit C

Non-GAAP Financial Measure Reconciliations and Definitions

(Dollar amounts in thousands)

This document includes certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. BRE’s definition and calculation of non-GAAP financial measures may differ from those of other REITs, and may, therefore, not be comparable. The non-GAAP financial measures should not be considered an alternative to net income or any other GAAP measurement of performance and should not be considered an alternative to cash flows from operating, investing or financing activities as a measure of liquidity.

Funds from Operations (FFO)

FFO is used by industry analysts and investors as a supplemental performance measure of an equity REIT. FFO is defined by the National Association of Real Estate Investment Trusts as net income or loss (computed in accordance with accounting principles generally accepted in the United States) excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated real estate assets, plus depreciation and amortization of real estate assets and adjustments for unconsolidated partnerships and joint ventures. We calculate FFO in accordance with the NAREIT definition.

We believe that FFO is a meaningful supplemental measure of our operating performance because historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time, as reflected through depreciation. Because real estate values have historically risen or fallen with market conditions, management considers FFO an appropriate supplemental performance measure because it excludes historical cost depreciation, as well as gains or losses related to sales of previously depreciated property, from GAAP net income. By excluding depreciation and gains or losses on sales of real estate, management uses FFO to measure returns on its investments in real estate assets. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited.

Management also believes that FFO, combined with the required GAAP presentations, is useful to investors in providing more meaningful comparisons of the operating performance of a company’s real estate between periods or as compared to other companies. FFO does not represent net income or cash flows from operations as defined by GAAP and is not intended to indicate whether cash flows will be sufficient to fund cash needs. It should not be considered an alternative to net income as an indicator of the REIT’s operating performance or to cash flows as a measure of liquidity. Our FFO may not be comparable to the FFO of other REITs due to the fact that not all REITs use the NAREIT definition.


	Quarter Ended 12/31/2010			Quarter Ended 12/31/2009			Twelve Months Ended 12/31/2010			Twelve Months Ended 12/31/2009
Net income/(loss) available to common shareholders	$	149		$	(7,156	)	$	41,576		$	50,642
Depreciation from continuing operations		24,223			21,443			91,784			82,906
Depreciation from discontinued operations		115			1,286			2,600			5,513
Redeemable noncontrolling interest in income ⁽¹⁾		—			—			1,446			1,885
Depreciation from unconsolidated entities		501			472			1,991			1,841
Net gain on investments		(15,226	)		—			(40,111	)		(21,574	)
Less: Redeemable noncontrolling interest in income not convertible into common shares ⁽¹⁾		—			—			(420	)		(424	)

Funds from operations	$	9,762		$	16,045		$	98,866		$	120,789

Allocation to participating securities - diluted FFO ⁽²⁾	$	(35	)	$	(151	)	$	(544	)	$	(1,233	)

Allocation to participating securities - diluted EPS ⁽²⁾	$	25		$	98		$	(165	)	$	(458	)

Diluted shares outstanding - EPS ⁽³⁾		64,305			54,540			61,420			52,761
Net income per common share - diluted	$	—		$	(0.13	)	$	0.67		$	0.95

Diluted shares outstanding - FFO ⁽³⁾		64,500			54,580			62,280			53,541
FFO per common share - diluted	$	0.15		$	0.29		$	1.58		$	2.23

⁽¹⁾	OP units are dilutive for the twelve months ending December 31, 2010 and December 31, 2009, but anti-dilutive for the quarters ending December 31, 2010 and December 31, 2009.

⁽²⁾	Adjustment to the numerators for diluted FFO per common share and diluted net income per common share calculations when applying the two class method for calculating EPS.

⁽³⁾	See analysis of weighted average shares and ending shares at Exhibit A.

Page 17


BRE Properties, Inc.		Exhibit C, continued

Non-GAAP Financial Measure Reconciliations and Definitions

(Dollar amounts in thousands)

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined by BRE as EBITDA, excluding minority interests, gains or losses from sales of investments, preferred stock dividends and other expenses. We consider EBITDA and Adjusted EBITDA to be appropriate supplemental measures of our performance because they eliminate depreciation, interest, and, with respect to Adjusted EBITDA, gains (losses) from property dispositions and other charges, which permits investors to view income from operations without the impact of noncash depreciation or the cost of debt, or with respect to Adjusted EBITDA, other non-operating items described above.

Because EBITDA and Adjusted EBITDA exclude depreciation and amortization and capture neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations, the utility of EBITDA and Adjusted EBITDA as measures of our performance is limited. Below is a reconciliation of net income available to common shareholders to EBITDA and Adjusted EBITDA:


	Quarter Ended 12/31/2010			Quarter Ended 12/31/2009			Twelve Months Ended 12/31/2010			Twelve Months Ended 12/31/2009
Net income/(loss) available to common shareholders	$	149		$	(7,156	)	$	41,576		$	50,642
Interest, including discontinued operations		21,428			21,292			84,894			82,734
Depreciation, including discontinued operations		24,338			22,729			94,384			88,419

EBITDA		45,915			36,865			220,854			221,795
Redeemable noncontrolling interest in income		335			394			1,446			1,885
Net gain on sales		(15,226	)		—			(40,111	)		(21,574	)
Dividends on preferred stock		2,953			2,953			11,813			11,813
Other expenses		211			13,522			5,298			13,522
Net loss/(gain) on extinguishment of debt		22,949			870			23,507			(1,470	)

Adjusted EBITDA	$	57,138		$	54,604		$	222,807		$	225,971

Net Operating Income (NOI)

We consider community level and portfolio-wide NOI to be an appropriate supplemental measure to net income because it helps both investors and management to understand the core property operations prior to the allocation of general and administrative costs. This is more reflective of the operating performance of the real estate, and allows for an easier comparison of the operating performance of single assets or groups of assets. In addition, because prospective buyers of real estate have different overhead structures, with varying marginal impact to overhead from acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or groups of assets.

Because NOI excludes depreciation and does not capture the change in the value of our communities resulting from operational use and market conditions, nor the level of capital expenditures required to adequately maintain the communities (all of which have real economic effect and could materially impact our results from operations), the utility of NOI as a measure of our performance is limited. Other equity REITs may not calculate NOI consistently with our definition and, accordingly, our NOI may not be comparable to such other REITs’ NOI. Accordingly, NOI should be considered only as a supplement to net income as a measure of our performance. NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. NOI also should not be used as a supplement to or substitute for cash flow from operating activities (computed in accordance with GAAP).


	Quarter Ended 12/31/2010			Quarter Ended 12/31/2009			Twelve Months Ended 12/31/2010			Twelve Months Ended 12/31/2009
Net income/(loss) available to common shareholders	$	149		$	(7,156	)	$	41,576		$	50,642
Interest, including discontinued operations		21,428			21,292			84,894			82,734
Depreciation, including discontinued operations		24,338			22,729			94,384			88,419
Redeemable noncontrolling interest in income		335			394			1,446			1,885
Net gain on sales		(15,226	)		—			(40,111	)		(21,574	)
Dividends on preferred stock		2,953			2,953			11,813			11,813
General and administrative expense		5,116			4,742			20,570			17,390
Other expenses		211			13,522			5,298			13,522
Net loss/(gain) on extinguishment of debt		22,949			870			23,507			(1,470	)

NOI	$	62,253		$	59,346		$	243,377		$	243,361

Less Non Same-Store NOI		9,087			6,380			32,830			24,786

Same-Store NOI	$	53,166		$	52,966		$	210,547		$	218,575

Page 18

Attached files

BRE PROPERTIES INC /MD/ Reports

Also read