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/	d295762d8k.htm
EX-99.1 - PRESS RELEASE - BRE PROPERTIES INC /MD/	d295762dex991.htm

Exhibit 99.2

LOGO

BRE Properties, Inc.

Fourth Quarter 2011

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, Non operating expense items and Capital Expenditures		5

Market Summaries “Same-Store” Data

- Quarter vs. Quarter		6

- YTD 2011 vs. YTD 2010		7

- Same-Store Operating Expense Summary and Joint Venture Disclosure		8

- Sequential “Same-Store” Operating Data		9

- Summary of Revenue and Occupancy Changes		10

- Operating, Renewal and Leasing Metrics		11

Debt Summary		12

Development Communities and Land Held for Development		13

Exhibit A - Share Analysis		14

Exhibit B - 2012 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 2011

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


Selected Financial Results

	Quarter ending
	December 31,
	2011			2010
Total revenues⁽¹⁾	$	95,989		$	87,413
Total real estate expenses⁽¹⁾	$	30,263		$	28,092
G&A expense	$	5,697		$	5,116
EBITDA ⁽²⁾	$	61,914		$	57,137
Interest expense	$	18,103		$	21,428
Net income	$	33,574		$	149
Funds from operations ⁽²⁾	$	43,307		$	9,762
Net income per share ⁽³⁾	$	0.44		$	0.00
FFO per share^{(2), (3)}	$	0.57		$	0.15

	Twelve Months ending
	December 31,
	2011			2010
Total revenues⁽¹⁾	$	371,381		$	334,965
Total real estate expenses⁽¹⁾	$	119,212		$	108,634
G&A expense	$	21,768		$	20,570
EBITDA ⁽²⁾	$	239,602		$	222,807
Interest expense	$	74,964		$	84,894
Net income	$	66,461		$	41,576
Funds from operations ⁽²⁾	$	154,442		$	98,866
Net income per share ⁽³⁾	$	0.93		$	0.67
FFO per share^{(2) , (3)}	$	2.14		$	1.58

Financial Metrics

	Q4 2011			Q4 2010
Debt-to-EBITDA		6.7x			7.8x
Debt plus preferred stock-to-EBITDA		6.9x			8.6x
Debt-to-total market capitalization		30.0	%		37.3	%
Debt-to-gross assets		40.7	%		47.2	%
Secured debt-to-gross assets		19.8	%		21.4	%
Interest coverage ratio ⁽⁴⁾		2.8x			2.4x
Fixed charge coverage ratio⁽⁴⁾		2.6x			2.1x

Capitalization

BRE common share price, 9/30/11	$	42.34
BRE common share price, 12/31/11	$	50.48
Common shares and units - Outstanding
period end (excluding dilutive equity awards)		75,716
Total funded debt	$	1,662,671
Preferred equity (liquidation value)	$	53,993
Common equity (at market)	$	3,822,144
Total market capitalization	$	5,538,808
Total assets	$	4,081,772


Same-Store Operating Results

			Quarter ending
			December 31,
			2011			2010
Revenue growth (%)				5.5	%		0.4	%
Expense growth (%)				3.0	%		0.4	%
NOI growth (%)				6.6	%		0.4	%
Operating margin				69.4	%		68.8	%
Occupancy (avg. physical)				95.4	%		95.5	%
Annualized turnover ratio				52.6	%		56.2	%

			Twelve Months ending December 31,
			2011			2010
Revenue growth (%)				3.4	%		-2.0	%
Expense growth (%)				1.5	%		1.7	%
NOI growth (%)				4.3	%		-3.7	%
Operating margin				68.7	%		68.1	%
Occupancy (avg. physical)				95.5	%		95.7	%
Annual turnover ratio				60.1	%		62.0	%

Non Same-Store Operating Results
			Quarter ending December 31,
			2011			2010
Revenues			$	13,783		$	9,376
NOI			$	9,072		$	5,981
Occupancy (avg. physical)				95.1	%		91.6	%
Gross asset value			$	684,687		$	473,229
Units				2,695			2,043	⁽⁵⁾


			Twelve Months ending
			December 31,
			2011			2010
Revenues			$	48,806		$	22,680
NOI			$	31,949		$	14,728
Occupancy (avg. physical)				94.3	%		84.5	%


Community Information

As of December 31, 2011

Operating:	Communities		Units			NOI % ⁽⁶⁾
Wholly or majority owned Same-store		66		18,641			86	%
Non same-store		10		2,695			13	%

Total		76		21,336			99	%
Joint venture		11		3,592			1	%
Development Pipeline:
Under construction		4		1,260
Land owned for development		3		1,014
Land under contract		3		872

(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)	Includes GAAP interest and capitalized interest (gross interest incurred). Fixed charges include gross interest incurred, preferred dividends and recurring cash amortization on secured debt.

(5)	Represents Q4’11 non-same-store units present as of Q4’10.

(6)	Represents percentage of total NOI for the three months ended December 31, 2011.

Page 1

BRE Properties, Inc.

Consolidated Balance Sheets

Fourth Quarter 2011

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


	December 31, 2011			December 31, 2010
ASSETS
Real estate portfolio:
Direct investments in real estate:
Investments in rental properties	$	3,607,045		$	3,464,466
Construction in progress		246,347			29,095
Less: accumulated depreciation		(729,151	)		(640,456	)

		3,124,241			2,853,105

Equity in real estate joint ventures:
Investments		63,313			61,132
Land under development		101,023			183,291

Total real estate portfolio		3,288,577			3,097,528
Cash		9,600			6,357
Other assets		54,444			52,362

TOTAL ASSETS	$	3,352,621		$	3,156,247

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Unsecured senior notes	$	724,957		$	773,076
Unsecured line of credit		129,000			209,000
Mortgage loans payable		808,714			810,842
Accounts payable and accrued expenses		63,273			52,070

Total liabilities		1,725,944			1,844,988

Redeemable noncontrolling interests		16,228			34,866

Shareholders’ equity:
Preferred Stock, $0.01 par value; 20,000,000 shares authorized: 2,159,715 and 7,000,000 shares with $25 liquidation preference issued and outstanding at December 31, 2011 and December 31, 2010, respectively.		22			70
Common stock, $0.01 par value, 100,000,000 shares authorized. Shares issued and outstanding: 75,556,167 and 64,675,815 at December 31, 2011 and December 31, 2010, respectively.		756			647
Additional paid-in capital		1,609,671			1,275,676

Total shareholders’ equity		1,610,449			1,276,393

TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	$	3,352,621		$	3,156,247

Page 2

BRE Properties, Inc.

Consolidated Statements of Income

Quarters Ended December 31, 2011 and 2010

(Unaudited, dollar and share amounts in thousands)


	Quarter ended 12/31/11		Quarter ended 12/31/10			Twelve months ended 12/31/11		Twelve months ended 12/31/10
REVENUES
Rental income	$	92,337	$	84,451		$	357,505	$	322,510
Ancillary income		3,652		2,962			13,876		12,455

Total revenues		95,989		87,413			371,381		334,965
EXPENSES
Real estate	$	30,263	$	28,092		$	119,212	$	108,634
Provision for depreciation		25,672		23,778			102,574		90,038
Interest		18,103		21,428			74,964		84,894
General and administrative		5,697		5,116			21,768		20,570
Other expenses ⁽¹⁾		—		211			402		5,298

Total expenses		79,735		78,625			318,920		309,434
Other income		657		681			2,536		2,934
Net (loss) from extinguishment of debt		—		(22,949	)		—		(23,507	)

Net income before noncontrolling interests, partnership income and discontinued operations		16,911		(13,480	)		54,997		4,958
Income from unconsolidated entities		726		586			2,888		2,178
Net gain on sale of unconsolidated entities		2,022		—			4,270		—

Income/(loss) from continuing operations		19,659		(12,894	)		62,155		7,136
Discontinued operations:
Discontinued operations, net ⁽²⁾		502		1,105			2,411		7,588
Net gain on sales of discontinued operations		14,489		15,226			14,489		40,111

Income from discontinued operations		14,991		16,331			16,900		47,699
NET INCOME	$	34,650	$	3,437		$	79,055	$	54,835
Redeemable noncontrolling interest in income		165		335			1,168		1,446
Redemption related preferred stock issuance cost		—		—			3,771		—
Dividends attributable to preferred stock		911		2,953			7,655		11,813

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	33,574	$	149		$	66,461	$	41,576

Net income per common share - basic	$	0.45	$	0.00		$	0.93	$	0.67

Net income per common share - diluted	$	0.44	$	0.00		$	0.93	$	0.67

Weighted average shares outstanding - basic		75,415		64,305			71,220		61,420

Weighted average shares outstanding - diluted		75,830		64,305			71,670		61,850

⁽¹⁾

For the quarter ended December 31, 2011, there were no acquisition costs reported in other expenses. For the quarter ended December 31, 2010, other expenses include $211,000 of acquisition costs. For the twelve months ended December, 2011, $402,000 of acquisition costs were reported in other expenses. For the twelve months ended December 31, 2010, other expenses include a one-time $1,300,000 charge associated with the resignation of our COO and $3,998,000 related to acquisition costs.

⁽²⁾	For 2011, includes two properties sold during the twelve months ended December 31, 2011. For 2010, includes includes two properties sold during the twelve months ended December 31, 2011 and four operating properties sold during the twelve months ending December 31, 2010.


	Quarter ended 12/31/11			Quarter ended 12/31/10			Twelve months ended 12/31/11			Twelve months ended 12/31/10
Rental and ancillary income	$	919		$	2,646		$	6,239		$	19,466
Real estate expenses		(417	)		(981	)		(2,462	)		(7,532	)
Provision for depreciation		—			(560	)		(1,366	)		(4,346	)

Income from discontinued operations, net	$	502		$	1,105		$	2,411		$	7,588

⁽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, 2011			Sept. 30, 2011			June 30 2011			Mar. 31, 2011			Dec. 31, 2010
REVENUES
Rental income	$	92,337		$	91,340		$	88,207		$	85,623		$	84,451
Ancillary income		3,652			3,555			3,484			3,185			2,962

Total revenues		95,989			94,895			91,691			88,808			87,413
EXPENSES
Real estate	$	30,263		$	30,887		$	29,358		$	28,704		$	28,092
Provision for depreciation		25,672			25,472			27,481			23,950			23,778
Interest		18,103			18,374			18,739			19,748			21,428
General and administrative		5,697			5,678			5,159			5,234			5,116
Other expenses		—			149			111			143			211

Total expenses		79,735			80,560			80,848			77,779			78,625
Other income		657			677			597			605			681
Net (loss) from extinguishment of debt		—			—			—			—			(22,949	)

Income/(loss) from continuing operations and discontinued operations		16,911			15,012			11,440			11,634			(13,480	)
Income from unconsolidated entities		726			791			731			640			586
Net gain on sale of unconsolidated entities		2,022			2,248			—			—			—

Income/(loss) from continuing operations		19,659			18,051			12,171			12,274			(12,894	)
Discontinued operations:
Discontinued operations, net ⁽¹⁾		502			645			605			659			1,105
Net gain on sales of discontinued operations		14,489			—			—			—			15,226

Income from discontinued operations		14,991			645			605			659			16,331

NET INCOME	$	34,650		$	18,696		$	12,776		$	12,933			3,437
Redeemable noncontrolling interest in income		165			332			335			335			335
Redemption related preferred stock issuance cost		—			155			3,616			—			—
Dividends attributable to preferred stock		911			1,138			2,653			2,953			2,953

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	33,574		$	17,071		$	6,172		$	9,645		$	149

Net income per common share - basic	$	0.45		$	0.23		$	0.09		$	0.15		$	0.00

Net income per common share - diluted	$	0.44		$	0.23		$	0.09		$	0.15		$	0.00

Weighted average shares outstanding - basic⁽²⁾		75,415			74,965			70,025			64,890			64,305

Weighted average shares outstanding - diluted⁽²⁾		75,830			75,390			70,285			65,305			64,305

⁽¹⁾Details of earnings from discontinued operations, net:
	Dec. 31, 2011			Sept. 30, 2011			June 30 2011			Mar. 31, 2011			Dec. 31, 2010
Rental and ancillary income	$	919		$	1,752		$	1,771		$	1,797		$	2,646
Real estate expenses		(417	)		(648	)		(711	)		(687	)		(981	)
Provision for depreciation		—			(459	)		(455	)		(451	)		(560	)

Income from discontinued operations, net	$	502		$	645		$	605		$	659		$	1,105

⁽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)


CALCULATION OF FFO	Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			Mar. 31, 2011			Dec. 31, 2010
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	33,574		$	17,071		$	6,172		$	9,645		$	149
Add back/ exclude:
Depreciation from continuing operations		25,672			25,472			27,481			23,950			23,778
Depreciation from discontinued operations		—			459			455			451			560
Redeemable noncontrolling interest in income ⁽¹⁾		165			332			335			335			—
Depreciation from unconsolidated entities		512			519			514			506			501
Net (gain) on sales from unconsolidated entity		(2,022	)		(2,248	)		—			—			—
Net (gain) on sales of discontinued operations		(14,489	)		—			—			—			(15,226	)

Less: Redeemable noncontrolling interests in income not convertible to common ⁽¹⁾		(105	)		(105	)		(105	)		(105	)		—

FUNDS FROM OPERATIONS ⁽²⁾	$	43,307		$	41,500		$	34,852		$	34,782		$	9,762

Weighted average shares and equivalents outstanding - diluted		76,100			76,000			70,900			65,920			64,725

Funds from operations (per share) - diluted	$	0.57		$	0.55		$	0.49		$	0.53		$	0.15

(1)	OP units were dilutive for the quarters ending December 31, 2011, September 30, 2011, June 30, 2011, and March 31. OP units were anti-dilutive for the quarter ending December 31, 2010, 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.


NON OPERATING EXPENSE ITEMS INCLUDED IN FFO	Dec. 31, 2011		Sept. 30, 2011		June 30, 2011		Mar. 31, 2011		Dec. 31, 2010
Net loss on extinguishment of debt		—		—		—		—		22,949

Net loss extinguishment of debt - per share	$	0.00	$	0.00	$	0.00	$	0.00	$	0.36
Acquisition costs		—	$	149	$	111	$	143	$	211

Acquisition costs - per share	$	0.00	$	0.00	$	0.00	$	0.00	$	0.00
Redemption related preferred stock issuance cost		—	$	155	$	3,616		—		—

Redemption related preferred stock issuance cost - per share	$	0.00	$	0.00	$	0.05	$	0.00	$	0.00

CAPITAL EXPENDITURES	Dec. 31, 2011		Sep. 30 2011		June 30, 2011		Mar. 31, 2011		Dec. 31, 2010
Recurring capital expenditures	$	6,033	$	5,183	$	4,990	$	4,956	$	7,129

Average apartment units in period		21,654		21,946		21,622		21,423		21,615
Capital expenditures per apartment unit in period	$	279	$	236	$	231	$	231	$	330
Capital expenditures per apartment unit-trailing four quarters	$	977	$	1,028	$	1,051	$	1,120	$	1,065
Revenue enhancing rehabilitation and other	$	6,982	$	3,756	$	3,472	$	1,659	$	1,801

Page 5

BRE Properties, Inc.

“Same-Store” Markets Summary

For the Quarters ended December 31, 2011 and 2010

(Dollar amounts in thousands)


	No. of Units		Revenues							Expenses
California	No. of Units		Q4 2011		Q4 2010		% Change			Q4 2011		Q4 2010		% Change
San Diego		3,958	$	17,789	$	17,176		3.6	%	$	4,938	$	4,788		3.1	%
Inland Empire		1,173		4,889		4,781		2.26	%		1,533		1,446		6.0	%
Orange County		3,349		14,905		14,295		4.3	%		4,814		4,638		3.8	%
Los Angeles		2,547		12,449		11,803		5.5	%		3,888		4,110		-5.4	%
San Francisco Bay Area		3,152		16,676		15,423		8.1	%		4,489		4,260		5.4	%

Subtotal; California		14,179	$	66,708	$	63,478		5.1	%	$	19,662	$	19,242		2.2	%
Washington
Seattle		3,160		11,515		10,642		8.2	%		4,111		3,811		7.9	%
Non-Core Markets⁽¹⁾		1,302		3,818		3,647		4.7	%		1,370		1,359		0.8	%

Total Same-Store⁽²⁾		18,641	$	82,041	$	77,767		5.5	%	$	25,143	$	24,412		3.0	%


	No. of Communities		No. of Units		Net Operating Income
California	No. of Communities		No. of Units		Q4 2011		Q4 2010		% Change			% of Total
San Diego		13		3,958	$	12,851	$	12,388		3.7	%		22.7	%
Inland Empire		5		1,173		3,356		3,335		0.6	%		5.9	%
Orange County		11		3,349		10,091		9,657		4.5	%		17.7	%
Los Angeles		12		2,547		8,561		7,693		11.3	%		15.0	%
San Francisco Bay Area		10		3,152		12,187		11,163		9.2	%		21.4	%

Subtotal; California		51		14,179	$	47,046	$	44,236		6.4	%		82.7	%
Washington
Seattle		12		3,160		7,404		6,831		8.4	%		13.0	%
Non-Core Markets⁽¹⁾		3		1,302		2,448		2,288		7.0	%		4.3	%

Total Same-Store ⁽²⁾		66		18,641	$	56,898	$	53,355		6.6	%		100.0	%


	No. of Communities			No. of Units			Net Operating Income						Avg. Physical Occupancy			Gross Carrying Value
“Non Same-Store” Summary	No. of Communities			No. of Units			Q4 2011			Q4 2010			Q4 2011			Q4 2011
Acquired properties⁽³⁾		7			1,689		$	5,976		$	3,386			95.4	%	$	472,323
Lease up properties⁽⁴⁾		2			566			1,825			1,354			94.3	%		180,491
Rehabilitation properties ⁽⁵⁾		1			440			1,271			1,241			94.9	%		31,873
Joint venture income⁽⁶⁾		11			3,592			726			586
Commercial and Other⁽⁷⁾		n/a			n/a			(244	)		(15	)
Other income		n/a			n/a			657			681
Discontinued operations⁽⁸⁾		6			2,164			502			1,665

Total Non Same-Store		27			8,451		$	10,713		$	8,898			95.1	%	$	684,687

Less Properties Sold 2010		(6	)		(2,164	)
Total All Units / NOI		87			24,928		$	67,611		$	62,253

(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 since January 1, 2010.

(3)	Consists of NOI from seven properties acquired after January 1, 2010.

(4)	Consists of NOI from two properties fully delivered and under lease up.

(5)	Consists of NOI from one property under significant rehabilitation.

(6)	Consists of our percentage of net income derived from joint venture investments in rental properties. See page 14 for a reconciliation of the components of BRE’s share of joint venture net income.

(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, 2011 and 2010 other real estate expenses exceeded the NOI from commercial.

(8)	Includes results from two properties sold in 2011 and four properties sold in 2010.

Page 6

BRE Properties, Inc.

“Same-Store” Markets Summary

For the Twelve Months ended December 31, 2011 and 2010

(Dollar amounts in thousands)


	No. of Units		Revenues							Expenses
California	No. of Units		YTD 2011		YTD 2010		% Change			YTD 2011		YTD 2010		% Change
San Diego		3,958	$	70,413	$	68,923		2.2	%	$	20,340	$	19,832		2.6	%
Inland Empire		1,173		19,273		18,979		1.5	%		5,997		6,143		-2.4	%
Orange County		3,349		58,623		57,236		2.4	%		18,976		18,420		3.0	%
Los Angeles		2,547		48,418		47,336		2.3	%		15,843		15,968		-0.8	%
San Francisco Bay Area		3,152		64,843		61,366		5.7	%		17,976		17,495		2.7	%

Subtotal; California		14,179	$	261,570	$	253,840		3.0	%	$	79,132	$	77,858		1.6	%
Washington
Seattle		3,160		45,121		42,948		5.1	%		16,237		15,737		3.2	%
Non-Core Markets⁽¹⁾		1,302		15,081		14,406		4.7	%		5,458		5,712		-4.4	%

Total Same-Store⁽²⁾		18,641	$	321,772	$	311,194		3.4	%	$	100,827	$	99,307		1.5	%


	No. of Communities		No. of Units		Net Operating Income
California	No. of Communities		No. of Units		YTD 2011		YTD 2010		% Change			% of Total
San Diego		13		3,958	$	50,073	$	49,091		2.0	%		22.7	%
Inland Empire		5		1,173		13,276		12,836		3.4	%		6.0	%
Orange County		11		3,349		39,647		38,816		2.1	%		17.9	%
Los Angeles		12		2,547		32,575		31,368		3.8	%		14.7	%
San Francisco Bay Area		10		3,152		46,867		43,871		6.8	%		21.2	%

Subtotal; California		51		14,179	$	182,438	$	175,982		3.7	%		82.5	%
Washington
Seattle		12		3,160		28,884		27,211		6.1	%		13.1	%
Non-Core Markets⁽¹⁾		3		1,302		9,623		8,694		10.7	%		4.4	%

Total Same-Store ⁽²⁾		66		18,641	$	220,945	$	211,887		4.3	%		100.0	%


	No. of Communities			No. of Units			Net Operating Income						Avg. Physical Occupancy			Gross Carrying Value
“Non Same-Store” Summary	No. of Communities			No. of Units			YTD 2011			YTD 2010			YTD 2011			YTD 2011
Acquired properties⁽³⁾		7			1,689		$	19,559		$	6,701			94.4	%	$	472,323
Lease up properties ⁽⁴⁾		2			566			7,410			3,157			93.9	%		180,491
Rehabilitation properties ⁽⁵⁾		1			440			4,980			4,870			94.2	%		31,873
Joint venture income⁽⁶⁾		11			3,592			2,888			2,178
Commercial and Other⁽⁷⁾		n/a			n/a			(725	)		(284	)
Other income		n/a			n/a			2,536			2,934
Discontinued operations⁽⁸⁾		6			2,164			3,777			11,934

Total Non Same-Store		27			8,451		$	40,425		$	31,490			94.3	%	$	684,687

Less Properties Sold 2010		(6	)		(2,164	)
Total All Units / NOI		87			24,928		$	261,370		$	243,377

(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 since January 1, 2010.

(3)	Consists of NOI from seven properties acquired after January 1, 2010.

(4)	Consists of NOI from two properties fully delivered and under lease up.

(5)	Consists of NOI from one property under significant rehabilitation.

(6)	Consists of our percentage of net income derived from joint venture investments in rental properties. See page 14 for a reconciliation of the components of BRE’s share of joint venture net income.

(7)	Consists of NOI from commercial properties that will later be developed as multi-family and other real estate expenses. For the twleve months ended December 31, 2011 and 2010 other real estate expenses exceeded the NOI from commercial.

(8)	Includes results from two properties sold in 2011 and four properties sold in 2010.

Page 7

BRE Properties, Inc.

Same Store Operating Expense Summary and Joint Venture Disclosure

(Dollar amounts in thousands)

SAME-STORE OPERATING EXPENSES (18,641 units)


Quarter Ended December 31, 2011	Q4 2011		Q4 2010		$ Change			% Change			% of Q4 2011 Operating Expenses
Property taxes	$	7,131	$	7,164	$	(33	)		-0.5	%		28.3	%
Insurance		1,004		979		25			2.6	%		4.0	%
Utilities		1,903		1,770		133			7.5	%		7.6	%
Property management fees ⁽¹⁾		2,660		2,489		171			6.9	%		10.6	%
Other operating expenses ⁽²⁾		12,445		12,010		435			3.6	%		49.5	%

Total operating expenses	$	25,143	$	24,412	$	731			3.0	%		100.0	%

Twelve Months Ended December 31, 2011	YTD 2011		YTD 2010		$ Change			% Change			% of YTD 2011 Operating Expenses
Property taxes	$	28,513	$	29,072	$	(559	)		-1.9	%		28.3	%
Insurance		3,911		3,813		98			2.6	%		3.9	%
Utilities		7,796		7,857		(61	)		-0.8	%		7.7	%
Property management fees ⁽¹⁾		10,451		9,958		493			5.0	%		10.4	%
Other operating expenses ⁽²⁾		50,156		48,607		1,549			3.2	%		49.7	%

Total operating expenses	$	100,827	$	99,307	$	1,520			1.5	%		100.0	%

(1)	Management fees based on a percentage of total revenues. Amount approximates the corporate cost to support on-site personnel. Corporate G&A is reduced by the allocation.

(2)	Includes advertising, payroll, property level administrative costs, repairs & maintenance and unit turnover costs.

JOINT VENTURE DISCLOSURE - Quarter and Twelve Months Ended December 31, 2011


Joint Ventures	Communities		Regional Breakdown		Units ⁽³⁾		BRE equity investment ⁽⁴⁾		BRE share of JV Debt
Relationship 1 - 15% BRE equity ownership		9		Phx. (3) Den. (6)		3,104	$	42,947	$	—
Relationship 2 - 35% BRE equity ownership		2		Phx. (1) Sac. (1)		488		20,366		—

Total		11				3,592	$	63,313	$	—
BRE share		Q4 2011		Q4 2010		YTD 2011		YTD 2010

Revenues	$	1,967	$	1,949	$	8,066	$	7,623
Expenses		729		747		2,965		2,988

Net Operating Income		1,238		1,202		5,101		4,635
Depreciation		512		501		2,052		1,991
Interest		—		115		161		466

Net Income	$	726	$	586	$	2,888	$	2,178
Third party management fees earned	$	446	$	440	$	1,843	$	1,715

(3)

During the quarter ended December 31, 2011, a joint venture community with 264 units was sold. The community was located in Denver, CO, the Company had a 15% equity ownership. BRE’s share of the total proceeds totaled $4.7 million. A $2.0 million gain on sale was recorded during the fourth quarter. During the quarter ended September 30, 2011, a joint venture community with 224 units was sold. The community was located in Denver, CO, the Company had a 15% equity ownership. BRE’s share of the total proceeds totaled $4.6 million. A $2.3 million gain on sale was recorded during the third quarter.

(4)

During the quarter ending September 30, 2011, the Company paid off its portion of debt inside its 35% equity investment as it matured. As a result of the debt maturity, the Company’s basis in the investment increased by approximately $8.6 million. As of December 31, 2011, all of the Company’s equity investments were unlevered.

Page 8

BRE Properties, Inc.

Sequential “Same-Store” Multifamily Markets Summary

Last five quarters

REVENUES


California	Q4’11			Q3’ 11			Q2’ 11			Q1’ 11			Q4’ 10
San Diego		-0.2	%		1.8	%		1.3	%		0.7	%		-0.5	%
Inland Empire		1.0	%		1.2	%		0.4	%		-0.4	%		0.7	%
Orange County		1.2	%		0.5	%		2.2	%		0.3	%		-0.6	%
Los Angeles		2.2	%		1.6	%		1.5	%		0.1	%		-1.1	%
San Francisco Bay Area		0.9	%		2.9	%		3.2	%		0.9	%		-1.5	%

Subtotal; California		0.9	%		1.7	%		1.9	%		0.5	%		-0.8	%
Washington
Seattle		0.2	%		2.3	%		3.3	%		2.2	%		-1.5	%
Non-Core Markets⁽¹⁾		0.9	%		0.3	%		1.7	%		1.7	%		0.0	%

Total Same Store ⁽³⁾		0.8	%		1.7	%		2.1	%		0.8	%		-0.9	%


EXPENSES ⁽²⁾
California	Q4’11			Q3’ 11			Q2’ 11			Q1’ 11			Q4’ 10
San Diego		-4.7	%		0.7	%		1.4	%		6.0	%		-3.7	%
Inland Empire		-3.9	%		5.8	%		11.1	%		-6.1	%		-8.7	%
Orange County		-0.4	%		4.0	%		-0.6	%		0.9	%		-2.8	%
Los Angeles		-7.4	%		11.0	%		-5.0	%		-3.2	%		6.1	%
San Francisco Bay Area		0.3	%		0.1	%		-1.6	%		6.6	%		-3.1	%

Subtotal; California		-3.1	%		3.7	%		-0.4	%		2.0	%		-1.8	%
Washington
Seattle		-2.6	%		2.6	%		8.7	%		-0.6	%		-3.8	%
Non-Core Markets⁽¹⁾		1.0	%		-1.2	%		0.9	%		0.1	%		-7.6	%

Total Same Store ⁽³⁾		-2.8	%		3.3	%		1.1	%		1.5	%		-2.5	%


NET OPERATING INCOME
California	Q4’11			Q3’ 11			Q2’ 11			Q1’ 11			Q4’ 10
San Diego		1.7	%		2.2	%		1.2	%		-1.4	%		0.8	%
Inland Empire		3.5	%		-0.9	%		-3.8	%		2.1	%		5.3	%
Orange County		2.0	%		-1.1	%		3,6	%		0.0	%		0.5	%
Los Angeles		7.3	%		-2.7	%		4.7	%		1.8	%		-4.5	%
San Francisco Bay Area		1.1	%		4.0	%		5.2	%		-1.2	%		-0.9	%

Subtotal; California		2.7	%		0.8	%		2.9	%		-0.2	%		-0.3	%
Washington
Seattle		1.9	%		2.1	%		0.4	%		3.8	%		-0.2	%
Non-Core Markets⁽¹⁾		0.9	%		1.2	%		2.2	%		2.6	%		5.1	%

Total Same Store ⁽³⁾		2.5	%		1.0	%		2.6	%		0.4	%		-0.1	%

(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 18,641 units for all periods shown.

Page 9

BRE Properties, Inc.

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

For the period ending December 31, 2011


Q4’11 vs. Q3’11 Change			Average Revenue per Unit ⁽¹⁾							Financial Occupancy⁽²⁾									Rental Revenue
	units		Q4’ 11		Q3’ 11		% Change			Q4’ 11			Q3’ 11			% Change			Q4’ 11		Q3’ 11		% Change
San Diego		3,958	$	1,566	$	1,563		0.1	%		95.7	%		96.0	%		-0.3	%	$	17,789	$	17,821		-0.2	%
Inland Empire		1,173		1,450		1,437		0.9	%		95.8	%		95.7	%		0.1	%		4,889		4,840		1.0	%
Orange County		3,349		1,552		1,530		1.4	%		95.6	%		95.8	%		-0.2	%		14,905		14,729		1.2	%
Los Angeles		2,547		1,685		1,664		1.3	%		96.7	%		95.8	%		0.9	%		12,449		12,178		2.2	%
San Francisco Bay Area		3,152		1,860		1,833		1.5	%		94.8	%		95.4	%		-0.6	%		16,676		16,535		0.9	%
Seattle		3,160		1,283		1,272		0.9	%		94.7	%		95.3	%		-0.6	%		11,515		11,490		0.2	%
Non Core Markets		1,302		1,037		1,029		0.7	%		94.3	%		94.1	%		0.2	%		3,818		3,783		0.9	%

Same Store		18,641	$	1,538	$	1,522		1.0	%		95.4	%		95.6	%		-0.2	%	$	82,041	$	81,376		0.8	%


Q4’11 vs. Q4’10 Change			Average Revenue per Unit ⁽¹⁾							Financial Occupancy⁽²⁾									Rental Revenue
	units		Q4’ 11		Q4’ 10		% Change			Q4’ 11			Q4’ 10			% Change			Q4’ 11		Q4’ 10		% Change
San Diego		3,958	$	1,566	$	1,524		2.7	%		95.7	%		94.9	%		0.8	%	$	17,789	$	17,176		3.6	%
Inland Empire		1,173		1,450		1,411		2.8	%		95.8	%		96.3	%		-0.5	%		4,889		4,781		2.3	%
Orange County		3,349		1,552		1,490		4.2	%		95.6	%		95.5	%		0.1	%		14,905		14,295		4.3	%
Los Angeles		2,547		1,685		1,628		3.6	%		96.7	%		94.9	%		1.8	%		12,449		11,803		5.5	%
San Francisco Bay Area		3,152		1,860		1,713		8.6	%		94.8	%		95.2	%		-0.4	%		16,676		15,423		8.1	%
Seattle		3,160		1,283		1,184		8.3	%		94.7	%		94.8	%		-0.1	%		11,515		10,642		8.2	%
Non Core Markets		1,302		1,037		967		7.0	%		94.3	%		96.6	%		-2.3	%		3,818		3,647		4.7	%

Same Store		18,641	$	1,538	$	1,461		5.3	%		95.4	%		95.2	%		0.2	%	$	82,041	$	77,767		5.5	%


YTD 2011 vs. YTD 2010 Change			Average Revenue per Unit ⁽¹⁾							Financial Occupancy⁽²⁾									Rental Revenue
	units		YTD 12/31/11		YTD 12/31/10		% Change			YTD 12/31/11			YTD 12/31/10			% Change			YTD 12/31/11		YTD 12/31/10		% Change
San Diego		3,958	$	1,550	$	1,520		2.0	%		95.6	%		95.5	%		0.2	%	$	70,413	$	68,923		2.2	%
Inland Empire		1,173		1,433		1,397		2.6	%		95.5	%		96.5	%		-1.0	%		19,273		18,979		1.6	%
Orange County		3,349		1,526		1,491		2.3	%		95.6	%		95.5	%		0.1	%		58,623		57,236		2.4	%
Los Angeles		2,547		1,662		1,615		2.9	%		95.3	%		95.9	%		-0.6	%		48,418		47,336		2.3	%
San Francisco Bay Area		3,152		1,802		1,687		6.8	%		95.2	%		96.2	%		-1.0	%		64,843		61,366		5.7	%
Seattle		3,160		1,248		1,189		5.0	%		95.3	%		95.3	%		0.1	%		45,121		42,948		5.1	%
Non Core Markets		1,302		1,018		959		6.1	%		94.8	%		96.1	%		-1.3	%		15,081		14,406		4.7	%

Same Store		18,641	$	1,508	$	1,453		3.8	%		95.4	%		95.7	%		-0.3	%	$	321,770	$	311,195		3.4	%

⁽¹⁾

Average revenue per unit includes rental and ancillary income earned on occupied units during the period. Ancillary income per occupied unit totals approximately $57 per unit per month for the twelve months ended December, 2011. 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 10

BRE Properties, Inc.

“Same -Store” Operating Metrics

As of December 31, 2011 and 2010


	No. of		Market Rent per Unit ⁽²⁾							Occupancy⁽³⁾						Turnover Ratio ⁽⁴⁾
California	Units		Q4’11		Q4’10		% Change			Q4’11			Q4’10			2011			2010
San Diego		3,958	$	1,542	$	1,488		3.6	%		95.7	%		95.0	%		69	%		70	%
Inland Empire		1,173		1,455		1,401		3.8	%		95.8	%		96.5	%		57	%		63	%
Orange County		3,349		1,550		1,480		4.7	%		95.6	%		95.5	%		62	%		64	%
Los Angeles		2,547		1,754		1,655		5.9	%		96.7	%		95.3	%		58	%		61	%
San Francisco Bay Area		3,152		1,923		1,759		9.3	%		94.8	%		95.6	%		54	%		56	%

Subtotal; California		14,179	$	1,659	$	1,569		5.7	%		95.7	%		95.4	%		61	%		63	%
Washington
Seattle		3,160		1,303		1,208		7.8	%		94.8	%		95.0	%		55	%		55	%
Non-Core Markets⁽¹⁾		1,302		1,026		987		3.9	%		94.5	%		96.8	%		65	%		67	%

Total/Average Same Store ⁽⁵⁾		18,641	$	1,555	$	1,468		5.9	%		95.4	%		95.5	%		60	%		62	%

⁽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 annualized number of units turned over for the twelve month period, divided by the number of units in the region.

⁽⁵⁾	Consists of stabilized properties owned by BRE since January 1, 2010.

“Same -Store” New Lease and Renewal Transactions


	New Leases									Renewals									Total New Leases/Renewals
California	Q4’11		New Leases Effective ⁽⁶⁾		Previous Resident Effective ⁽⁷⁾		% Change			Q4’11		Renewal Effective ⁽⁶⁾		Expiring Effective ⁽⁸⁾		% Change			Q4’11		Current Effective ⁽⁶⁾		Prior Effective		% Change
California	Q4’11		New Leases Effective ⁽⁶⁾		Previous Resident Effective ⁽⁷⁾		% Change			Q4’11		Renewal Effective ⁽⁶⁾		Expiring Effective ⁽⁸⁾		% Change			Q4’11		Current Effective ⁽⁶⁾		Prior Effective		% Change
San Diego		606	$	1,478	$	1,486		-0.6	%		392	$	1,593	$	1,539		3.5	%		998	$	1,523	$	1,507		1.1	%
Inland Empire		138		1,444		1,415		2.1	%		147		1,398		1,362		2.6	%		285		1,420		1,388		2.3	%
Orange County		454		1,535		1,499		2.4	%		480		1,501		1,457		3.1	%		934		1,517		1,477		2.7	%
Los Angeles		293		1,742		1,659		5.0	%		272		1,723		1,661		3.7	%		565		1,733		1,660		4.4	%
San Francisco Bay Area		371		1,846		1,752		5.3	%		336		1,851		1,725		7.3	%		707		1,848		1,739		6.3	%

Subtotal; California		1,862	$	1,604	$	1,564		2.6	%		1,627	$	1,623	$	1,557		4.2	%		3,489	$	1,613	$	1,561		3.3	%
Washington
Seattle		416		1,218		1,219		-0.1	%		348		1,256		1,174		7.0	%		764		1,235		1,198		3.1	%
Non-Core Markets		159		957		955		0.2	%		194		1,027		999		2.9	%		353		996		979		1.7	%

Total Same Store⁽⁹⁾		2,437	$	1,496	$	1,465		2.1	%		2,169	$	1,511	$	1,446		4.5	%		4,606	$	1,503	$	1,456		3.2	%

⁽⁶⁾	Represents leased rent per unit less the monthly value of concessions awarded on leases and renewals signed during the quarter.

⁽⁷⁾	Represents leased rent per unit less the monthly value of concessions awarded on the prior resident for the same unit that was leased during the quarter.

⁽⁸⁾	Represents leased rent per unit less the monthly value of concessions awarded on the prior lease that expired during the quarter.

⁽⁹⁾	The Q4’11 total same-store pool consists of 18,641 units.

Page 11

BRE Properties, Inc.

Debt Summary as of December 31, 2011

(Dollar amounts in thousands)

DEBT MATURITY SCHEDULE


	Secured Debt				Unsecured Debt								Weighted Avg. Rate ⁽¹⁾
	Amortization		Balloon		Floating			Fixed			Total		Weighted Avg. Rate ⁽¹⁾			% of Debt
Year
2012	$	1,235	$	65,507	$	129,000	^(2),(4)	$	35,000	⁽³⁾		230,742		3.50	%		13.9	%
2013		872		29,639		—			40,018			70,529		6.48	%		4.2	%
2014		3,839		—		—			50,000			53,839		4.82	%		3.2	%
2015		7,962		—		—			—			7,962		5.65	%		0.5	%
2016		9,041		—		—			—			9,041		5.65	%		0.5	%
2017		9,307		—		—			300,000			309,307		5.61	%		18.6	%
2018		9,853		—		—			—			9,853		5.65	%		0.6	%
2019		6,492		317,975		—			—			324,467		5.60	%		19.5	%
2020		3,346		343,646		—			—			346,992		5.62	%		20.9	%
2021		—		—		—			300,000			300,000		5.31	%		18.1	%

Total	$	51,947	$	756,767	$	129,000		$	725,018		$	1,662,732		5.28	%		100	%

WEIGHTED AVERAGE COST OF DEBT


	Balance			Weighted Avg. Term		Weighted Avg. Rate ⁽¹⁾			Percentage Total Debt
Fixed Rate
Unsecured	$	690,018			6.50		5.51	%		41.5	%
Convertible (unsecured)		34,939	⁽³⁾		0.24		6.01	%		2.1	%
Secured		808,714			7.01		5.60	%		48.6	%

	$	1,533,671			6.53		5.57	%		92.2	%
Floating Rate
Unsecured		129,000	⁽⁴⁾		0.75		1.85	%		7.8	%
Total debt	$	1,662,671			6.17		5.28	%		100.0	%

CAPITALIZED INTEREST

SENIOR UNSECURED DEBT RATING
As of February 6, 2012

Q4 2011

Q4 2010

Capitalized Interest

4,229

2,749

Moody’s

Baa2

(stable)

Standard & Poor’s

BBB

(stable)

YTD 2011

YTD 2010

Capitalized Interest

14,431

11,977


SUMMARY OF COMPLIANCE- Senior Unsecured Notes							SUMMARY OF COMPLIANCE - Line of Credit
	Requirement			Actual				Requirement			Actual
Total Debt to Gross Assets		<60	%		41	%	Leverage Ratio		<60	%		38	%
Debt Service Test		>1.5			2.92		Maximum Secured Indebtness		<40	%		18	%
Total Secured Debt to Total Assets		<40	%		20	%	Minimum Unsecured Leverage		>1.6			3.64
Total Unecumbered Assets to Unsecured Debt		>1.5			3.43		Minimum Fixed Charge Coverage		>1.5			2.56

SUMMARY OF PREFERRED SHARES
	Q4 2011
Total preferred shares outstanding		2,160
Liquidation value	$	53,993
Dividend yield at par		6.75	%

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

(2)	Outstanding balance under the $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.

(4)

Subsequent to the end of the quarter, we entered into a $750,000,000 revolving credit facility (the “Credit Agreement”) . The Credit Agreement has an initial term of 39 months, terminates on April 3, 2015 and replaces our previous $750 million revolving credit facility. Based on our current ratings the new facility is priced at LIBOR plus 120 bps plus an annual 20 bps facility fee on the capacity of the facility.

Page 12

BRE Properties, Inc.

Development Summary

December 31, 2011

(Dollar amounts in millions)


	Number		Cost		Estimated		Balance to		Product		First		Final
CONSTRUCTION IN PROGRESS	of Units		Incurred		Cost		Fund		Type		CO ⁽¹⁾		CO ⁽¹⁾
Lawrence Station
Sunnyvale, CA		336	$	63.5	$	110.0	$	46.5		Wrap		Q2’ 12		Q1’ 13
Aviara⁽²⁾
Mercer Island, WA		166		12.6		44.5		31.9		Podium		Q1’13		Q2’13
Wilshire La Brea
Los Angeles, CA		478		130.6		277.3		146.7		Podium		Q4’13		Q4’14
Solstice
Sunnyvale, CA		280		39.7		121.9		82.2		Podium		Q4’13		Q1’14

Total CIP		1,260	$	246.4	$	553.7	$	307.3

Number

Cost

Estimated

Balance
to

Product

Estimated

LAND UNDER DEVELOPMENT ⁽³⁾

of Units

Incurred

Cost⁽⁴⁾

Fund

Type

Start Date

Pleasanton I

Pleasanton, CA

254

18.5

TBR

Garden

TBD

Park Viridian II⁽⁵⁾

Anaheim, CA

400

35.6

TBR

Garden

TBD

Mission Bay ⁽⁶⁾

San Francisco, CA

360

46.9

TBR

Podium

2H’ 12

Total Land Owned

1,014

101.0

423.9

322.9

Number

Cost

Estimated

Balance to

Product

LAND UNDER CONTRACT ⁽⁷⁾

of Units

Incurred⁽⁸⁾

Cost

Fund

Type

Walnut Creek BART

Walnut Creek, CA

358

10.1

TBR

Podium

Redwood City

Redwood City, CA

263

2.5

TBR

Podium

Pleasanton II

Pleasanton, CA

251

1.5

TBR

Garden

Total

872

14.1

319.6

305.5

(1)	Represents estimated quarter in which first and final certificates of occupancy will be received. Projects generally received phased certificates of occupancy during the final six to nine months of construction.

(2)	During the fourth quarter of 2010, 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 $664,000.

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

(4)	Reflects the aggregate cost estimates including land. Specific property cost estimates To Be Reported (TBR) once entitlement approvals are received and the Company is prepared to begin construction.

(5)	During the first quarter of 2011, the Company purchased for $5.1 million, a 4.4 acre site contiguous to its existing Park Viridian operating community and an existing phase 2 land site in Anaheim. The combined undeveloped phases now total 400 units (185 units were added).

(6)	Represnets two parcels of land in the Mission Bay district that are entitled for residential use and can be developed in phases.

(7)

Land under contract represents land parcels for which: 1) the Company has a signed agreement and the right to acquire the land (but not the obligation), 2) made a non refundable deposit and 3) commenced the entitlement process. Costs incurred on these projects are recorded in Other assets on the Consolidated Balance Sheets.

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

(9)

Development pipeline totals above do not include a potential future redevelopment site in Emeryville, California. The site consists of two existing occupied office buildings. The net book value of this investment is $10.2 million and it is recorded in Investment in rental properties. Predevelopment costs associated with this site total $3.3 million and are recorded in Other assets.

Page 13


BRE Properties, Inc.		Exhibit A

Share Analysis as of December 31, 2011

(Dollar and share amounts in thousands)


SUMMARY OF COMMON SHARES
	Qtr. Ended			Qtr. Ended			Qtr. Ended			Qtr. Ended			Qtr. Ended
Weighted Average	12/31/2011			9/30/2011			6/30/2011			3/31/2011			12/31/2010
Weighted average shares outstanding ⁽¹⁾		75,415			74,965			70,025			64,890			64,305
Weighted average OP units⁽²⁾		270			610			615			615			—
Dilutive effect of stock based awards		415			425			260			415			420

Diluted shares – FFO ⁽²⁾		76,100			76,000			70,900			65,920			64,725
Less: Anti-dilutive OP Units ⁽³⁾		(270	)		(610	)		(615	)		(615	)		—
Less: Anti-dilutive stock based awards ⁽³⁾		—			—			—			—			(420	)

Diluted shares – EPS⁽⁴⁾		75,830			75,390			70,285			65,305			64,305

		YTD			YTD
Weighted Average		12/31/2011			12/31/2010

Weighted average shares outstanding ⁽¹⁾		71,220			61,420
Weighted average OP units		510			685
Dilutive effect of stock based awards		450			430

Diluted shares – FFO		72,180			62,535
Less: Anti-dilutive OP Units ⁽³⁾		(510	)		(685	)

Diluted shares – EPS⁽⁴⁾		71,670			61,850

	As of			As of			As of			As of			As of
Ending	12/31/2011			9/30/2011			6/30/2011			3/31/2011			12/31/2010
Shares outstanding at end of period		75,556			75,266			74,697			65,341			64,675
OP units at end of period		160			606			615			615			615
Dilutive effect of stock based awards		446			401			413			407			423

Total		76,162			76,273			75,725			66,363			65,713

SUMMARY OF PREFERRED SHARES
	Qtr. Ended			Qtr. Ended			Qtr. Ended			Qtr. Ended			Qtr. Ended
	12/31/2011			9/30/2011			6/30/2011			3/31/2011			12/31/2010
6.75% Series C, $25 per share liquidation preference		—			—						4,000			4,000
6.75% Series D, $25 per share liquidation preference		2,160			2,160			3,000			3,000			3,000

		2,160			2,160			3,000			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 quarter ended December 31, 2010, 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

Exhibit B: 2011 Financial Outlook (page 1 of 2)


(dollars in thousands, except per share amounts)
2012: EPS & FFO per share guidance
	Low End			High End
Earnings per share	$	1.00		$	1.10
Depreciation per share	$	1.30		$	1.30
Funds from operations per share	$	2.30		$	2.40

2012: Same-store outlook
	Low End			High End
Same-store revenue (2012 vs 2011)		5.00	%		6.75	%
Same-store expense (2012 vs 2011)		4.50	%		4.00	%
Same-store net operating income (2012 vs 2011)		5.25	%		8.00	%


Regional breakdown of same store revenues	Low End			High End			% of Total Same Store Revenues
Seattle		6.25	%		7.75	%		14.5	%
San Francisco Bay Area		8.25	%		9.75	%		21.2	%
Southern California		3.75	%		5.25	%		60.0	%
Non Core markets		4.50	%		5.50	%		4.3	%

Total		5.00	%		6.75	%		100.0	%


Detail of same store expense growth	2011 Actual			2012 Low End			% increase			2012 High End			% increase
Same store expenses - guidance	$	110,425		$	115,395			4.50	%	$	114,842			4.00	%
Less property tax expense	$	(31,999	)	$	(34,224	)				$	(34,224	)
Less revenue management costs	$	—		$	(600	)				$	(600	)

Same-store exp adjusted for non routine	$	78,426		$	80,570			2.73	%	$	80,018			2.03	%


2012: Other elements of guidance

2012 Same-store and non same-store pools
	Communities		Units
Ending 2011 communities
Same-store		66		18,641
Non same-store
Acquisition communities		7		1,689
Lease-up communities		2		566
Renovation communities		1		440
2011 pool adjustments
2011 lease-up communities moved to 2012 same-store		1		296
2010 acquisition communities moved to 2012 same store		4		1,037
2012 Communities
Same-store		71		19,974
Non same-store
Lease-up communities		1		270
Acquisition communities (acquired in 2011)		3		652
Renovation communities		1		440


Operating and capital elements	Level / Range
Occupancy (same-store)		95.5%
LIBOR (average)		50 - 75 bps
Weighted average cost of debt outstanding		5.30% - 5.40%
Operating property acquisitions		—			—
Development advances	$	190,000	—	$	240,000
Capitalized interest	$	20,000	—	$	21,500
Debt maturities	$	100,500		$	100,500
Revenue enhancing rehab	$	30,000	—	$	55,000
Recurring capital expenditures	$	21,000	—	$	23,000
Common stock	$	50,000	—	$	175,000
Property sales / land sales	$	—	—	$	150,000
Debt issuance	$	—	—	$	300,000

Detail of increase in shares outstanding	Low End			High End
Shares outstanding 12/31/11		76,160			76,160
Impact of share issuance in 2012 Outlook (weighted avg.)		540			1,540

2012 Outlook weighted average shares outstanding		76,700			77,700

Page 15

Exhibit B: 2012 Financial Outlook (page 2 of 2)

2012: Detail of financial outlook line items against comparable 2011 actual results (dollar amounts in thousands except per share amounts)


	2011			2012				2012
	Actual			Low End				High End
Rental and ancillary revenues
Same-store ⁽¹⁾	$	348,656		$	366,089	5.00	%	$	372,190		6.75	%
Non same-store⁽¹⁾
Lease-up communities		5,764			7,300				7,800
Acquisition communities		8,369			13,800				14,500
Renovation communities		6,909			7,000				7,250
Commercial & other		1,683			1,705				1,705

Total rental and ancillary revenues		371,381			395,894				403,445
Real estate expenses
Same-store ⁽¹⁾		110,425			115,395	4.50	%		114,842		4.00	%
Non same-store⁽¹⁾
Lease-up communities		1,987			2,400				2,300
Acquisition communities		3,201			5,000				4,900
Renovation communities		1,929			1,950				1,900
Commercial & other		1,670			1,651				1,601

Total real estate expenses		119,213			126,395				125,543
Property level net operating income
Same-store ⁽¹⁾		238,230			250,694	5.25	%		257,348		8.00	%
Non same-store⁽¹⁾
Lease-up communities		3,778			4,900				5,500
Acquisition communities		5,167			8,800				9,600
Renovation communities		4,980			5,050				5,350
Commercial & other		13			55				105

Total property level net operating income		252,168			269,499				277,902
2012 acquisition communities (net)⁽²⁾					—				—
Non real estate expenses
Provision for depreciation		102,574			100,000				100,000
General & administrative		21,768			23,000				22,000
Interest expense		74,964			72,500				68,000
Other expenses		402			—				—
Loss on retirement of debt		—			—				—

Total non real estate expenses		199,708			195,500				190,000
Partnership and other income
Partnership income		2,888			2,800				2,800
Net gain on sale of unconsolidated entity		4,270			—				—
Other income non property related		2,536			2,000				2,100

Total partnership and other income		9,693			4,800				4,900
Discontinued operations – communities sold
Net operating income		3,777			—				(3,750	)
Depreciation		(1,366	)		—				—
Gain on sales of discontinued operations		14,489			—				—

Total discontinued operations		16,900			—				(3,750	)
Redeemable noncontrolling interest in income		1,168			600				600
Preferred stock dividends		7,655			3,645				3,645
Redemption related preferred stock issuance costs		3,771			—				—

Net income available to common shareholders	$	66,459		$	74,554			$	84,808

Reconciliation to funds from operations
Depreciation from continuing and discontinued ops		103,940			100,000				100,000
Depreciation from unconsolidated entities		2,052			1,800				1,800
Convertible redeemable noncontrolling interests in income		749			186				186
Gain on sales of discontinued operations		(14,489	)		—				—
Net gain on sale of unconsolidated entity		(4,270	)		—				3,750

Funds from operations	$	154,442		$	176,540			$	186,794

Diluted shares outstanding—FFO		72,180			76,700				77,700

FFO per common share	$	2.14		$	2.30			$	2.40

⁽¹⁾	2011 Actual Same-store and Non Same-store communities are presented to reflect results for the comparable 2012 community pool composition.

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 12/31/2011			Quarter Ended 12/31/2010			Twelve Months Ended 12/31/2011			Twelve Months Ended 12/31/2010
Net income available to common shareholders	$	33,574		$	149		$	66,461		$	41,576
Depreciation from continuing operations		25,672			23,778			102,574			90,038
Depreciation from discontinued operations		—			560			1,366			4,346
Redeemable noncontrolling interest in income		165			—			1,168			1,446
Depreciation from unconsolidated entities		512			501			2,052			1,991
Net gain on sales of discontinued operations		(14,489	)		(15,226	)		(14,489	)		(40,111	)
Net gain on sale of unconsolidated entities		(2,022	)		—			(4,270	)		—
Less: Redeemable noncontrolling interest in income not convertible into common shares		(105	)		—			(420	)		(420	)

Funds from operations	$	43,307		$	9,762		$	154,442		$	98,866

Diluted shares outstanding – EPS ⁽¹⁾		75,830			64,305			71,670			61,850
Net income per common share – diluted	$	0.44		$	—		$	0.93		$	0.67

Diluted shares outstanding – FFO ⁽¹⁾		76,100			64,725			72,180			62,535
FFO per common share – diluted	$	0.57		$	0.15		$	2.14		$	1.58

⁽¹⁾	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 12/31/2011			Quarter Ended 12/31/2010			Twelve Months Ended 12/31/2011			Twleve Months Ended 12/31/2010
Net income available to common shareholders	$	33,574		$	149		$	66,461		$	41,576
Interest, including discontinued operations		18,103			21,428			74,964			84,894
Depreciation, including discontinued operations		25,672			24,338			103,940			94,384

EBITDA		77,349			45,915			245,365			220,854
Redeemable noncontrolling interest in income		165			335			1,168			1,446
Net gain on sales		(14,489	)		(15,226	)		(14,489	)		(40,111	)
Dividends on preferred stock		911			2,953			7,655			11,813
Other expenses		—			211			402			5,298
Net loss from extinguishment of debt		—			22,949			—			23,507
Net gain on sale of unconsolidated entities		(2,022	)		—			(4,270	)		—
Redemption related to preferred stock issuance cost		—			—			3,771			—

Adjusted EBITDA	$	61,914		$	57,137		$	239,602		$	222,807

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 12/31/2011			Quarter Ended 12/31/2010			Twelve Months Ended 12/31/2011			Twleve Months Ended 12/31/2010
Net income available to common shareholders	$	33,574		$	149		$	66,461		$	41,576
Interest, including discontinued operations		18,103			21,428			74,964			84,894
Depreciation, including discontinued operations		25,672			24,338			103,940			94,384
Redeemable noncontrolling interest in income		165			335			1,168			1,446
Net gain on sales		(14,489	)		(15,226	)		(14,489	)		(40,111	)
Net gain on sale of unconsolidated entities		(2,022	)		—			(4,270	)		—
Dividends on preferred stock		911			2,953			7,655			11,813
General and administrative expense		5,697			5,116			21,768			20,570
Other expenses		—			211			402			5,298
Net loss from extinguishment of debt		—			22,949			—			23,507
Redemption related to preferred stock issuance cost		—			—			3,771			—

NOI	$	67,611		$	62,253		$	261,370		$	243,377

Less Non Same-Store NOI		10,713			8,898			40,425			31,490

Same-Store NOI	$	56,898		$	53,355		$	220,945		$	211,887

Page 18

BRE PROPERTIES INC /MD/ - FORM 8-K - EX-99.2 - SUPPLEMENTAL FINANCIAL DATA - February 6, 2012

Attached files

BRE PROPERTIES INC /MD/ Reports