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

Attached files

file	filename
EX-99.1 - PRESS RELEASE - BRE PROPERTIES INC /MD/	d479633dex991.htm
EX-10.1 - FORM OF RESTRICTED STOCK AWARD AGREEMENT - BRE PROPERTIES INC /MD/	d479633dex101.htm
8-K - FORM 8-K - BRE PROPERTIES INC /MD/	d479633d8k.htm

Exhibit 99.2

LOGO

BRE Properties, Inc.

Fourth Quarter 2012

Earnings Release and

Supplemental Financial Data


Table of Contents	Page

Earnings Release		1-8

Financial and Operating Highlights		2

Consolidated Balance Sheets		3

Consolidated Statements of Income - Comparative Quarters and Year to Date Periods		4

Consolidated Statements of Income - Past Five Quarters		5

Reconciliation of FFO, Core FFO and Capital Expenditures		6

Market Summaries “Same-Store” Data

- Quarter vs. Quarter		7

- YTD 2012 vs. YTD 2011		8

- Same-Store Operating Expense Summary and Joint Venture Disclosure		9

- Sequential “Same-Store” Operating Data		10

- Summary of Revenue and Occupancy Changes		11

- Operating, Renewal and Leasing Metrics		12

Debt Summary		13

Development Communities and Land Held for Development		14

Exhibit A - Share Analysis		15

Exhibit B - 2013 Financial Outlook		16-17

Exhibit C - Non-GAAP Financial Measure Reconciliations and Definitions		18-19

“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 its operating 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.

Information included in this supplemental package is unaudited.

BRE Properties, Inc.

Financial and Operating Highlights

Fourth Quarter 2012

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

Selected Financial Results


	Quarter ending December 31,
	2012		2011
Total revenues ⁽¹⁾	$	100,295	$	93,894
Total real estate expenses ⁽¹⁾	$	31,162	$	29,712
G&A expense	$	5,696	$	5,697
EBITDA ⁽²⁾	$	65,559	$	61,914
Interest expense	$	17,979	$	18,103
Net income	$	73,805	$	33,574
Funds from operations ⁽²⁾	$	46,962	$	43,307
Net income per share ⁽³⁾	$	0.96	$	0.44
FFO per share^{(2) , (3)}	$	0.61	$	0.57
Core FFO per share ^{(2) , (3)}	$	0.61	$	0.57


	Twelve Months ending December 31,
	2012		2011
Total revenues ⁽¹⁾	$	390,138	$	363,059
Total real estate expenses ⁽¹⁾	$	122,996	$	116,814
G&A expense	$	22,848	$	21,768
EBITDA ⁽²⁾	$	254,481	$	239,602
Interest expense	$	68,467	$	74,964
Net income	$	133,499	$	66,461
Funds from operations ⁽²⁾	$	168,859	$	154,442
Net income per share ⁽³⁾	$	1.74	$	0.93
FFO per share ^{(2) , (3)}	$	2.19	$	2.14
Core FFO per share ^{(2) , (3)}	$	2.39	$	2.20

Financial Metrics


	Quarter ending December 31,
	2012			2011
Debt-to-EBITDA⁽⁵⁾		6.5	x		6.7	x
Debt plus preferred stock-to-EBITDA⁽⁵⁾		6.7	x		6.9	x
Debt-to-total market capitalization		30.4	%		30.0	%
Debt-to-gross assets		40.2	%		40.7	%
Secured debt-to-gross assets		17.2	%		19.8	%
Interest coverage ratio⁽⁶⁾		2.8	x		2.8	x
Fixed charge coverage ratio⁽⁶⁾		2.6	x		2.6	x

Capitalization


BRE common share price, 9/30/12	$	46.89
BRE common share price, 12/31/12	$	50.83
Common shares and units - Outstanding
Period End (excluding dilutive equity awards)		76,925
Total funded debt	$	1,731,960
Preferred equity (liquidation value)	$	53,993
Common equity (at market)	$	3,910,098
Total market capitalization	$	5,696,051
Total assets (gross)	$	4,310,169

Same-Store Operating Results


	Quarter ending December 31,
	2012			2011
Revenue growth (%)		5.6	%		5.5	% ⁽⁷⁾
Expense growth (%)		4.4	%		3.0	% ⁽⁷⁾
NOI growth (%)		6.2	%		6.6	% ⁽⁷⁾
Operating margin		69.4	%		69.0	%
Occupancy (avg. physical)		95.7	%		95.4	%
Annualized turnover ratio		55.5	%		52.2	%


	Twelve Months ending December 31,
	2012			2011
Revenue growth (%)		5.5	%		3.4	%⁽⁷⁾
Expense growth (%)		3.6	%		1.5	% ⁽⁷⁾
NOI growth (%)		6.4	%		4.3	% ⁽⁷⁾
Operating margin		68.8	%		68.3	%
Occupancy (avg. physical)		95.5	%		95.5	%
Annual turnover ratio		61.3	%		59.8	%

Non Same-Store Operating Results


	Quarter ending December 31,
	2012		2011
Revenues	$	8,113	$	6,688
NOI	$	5,409	$	4,338
Gross asset value	$	409,806	$	292,396
Homes		1,698		1,362	⁽⁸⁾
Communities		6		6	⁽⁸⁾


	Twelve months ending December 31,
	2012		2011
Revenues	$	29,207	$	14,355
NOI	$	19,824	$	9,588

Community Information


As of December 31, 2012

	Communities		Homes		NOI %⁽⁹⁾
Operating:
Wholly or majority owned
Same-store		68		19,462		89	%
Non same-store		6		1,698		10	%

Total		74		21,160		99	%
Joint venture		8		2,864		1	%
Development Pipeline:
Under construction		4		1,188
Land owned for development		3		869
Land under contract		1		358

(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 a $15,000,000 non cash asset impairment charge on Land under development that was transferred to held for sale during the quarter ended December 31, 2012.

(5)	For the purpose of this calculation, EBITDA excludes NOI from communities sold during the quarter.

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

(7)	For comparison purposes, 2012 data represents results for same-store pool established 1/1/2012; 2011 data represents results for same-store pool established 1/1/2011.

(8)	Represents Q4’12 non same-store homes as of the end of each period presented. Non same-store communities may not be consistent in each period.

(9)	Represents percentage of total NOI for the twelve months ended December 31, 2012.

Page 2

BRE Properties, Inc.

Consolidated Balance Sheets

Fourth Quarter 2012

(Unaudited, in thousands, except per share, unit and per unit data)


	December 31, 2012			December 31, 2011
ASSETS
Real estate portfolio:
Direct investments in real estate:
Investments in rental communities	$	3,722,838		$	3,607,045
Construction in progress		302,263			246,347
Less: accumulated depreciation		(811,187	)		(729,151	)

		3,213,914			3,124,241
Equity in real estate joint ventures:
Investments		40,753			63,313
Real estate held for sale, net		23,065			—
Land under development		104,675			101,023

Total real estate portfolio		3,382,407			3,288,577
Cash		62,241			9,600
Other assets		54,334			54,444

TOTAL ASSETS	$	3,498,982		$	3,352,621

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Unsecured senior notes	$	990,018		$	724,957
Unsecured line of credit		—			129,000
Mortgage loans payable		741,942			808,714
Accounts payable and accrued expenses		75,789			63,273

Total liabilities		1,807,749			1,725,944

Redeemable and other noncontrolling interests		4,751			16,228

Shareholders’ equity:
Preferred Stock, $0.01 par value; 20,000,000 shares authorized: 2,159,715 shares with $25 liquidation preference issued and outstanding at December 31, 2012 and December 31, 2011, respectively.		22			22
Common stock, $0.01 par value, 100,000,000 shares authorized. Shares issued and outstanding: 76,925,351 and 75,556,167 at December 31, 2012 and December 31, 2011, respectively.		769			756
Additional paid-in capital		1,685,691			1,609,671

Total shareholders’ equity		1,686,482			1,610,449

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	3,498,982		$	3,352,621

Page 3

BRE Properties, Inc.

Consolidated Statements of Income

Quarters and Twelve Months Ended December 31, 2012 and 2011

(Unaudited, in thousands, except per share, unit and per unit data)


	Quarter ended 12/31/12		Quarter ended 12/31/11		Twelve months ended 12/31/12		Twelve months ended 12/31/11
REVENUES
Rental income	$	96,295	$	90,367	$	374,982	$	349,667
Ancillary income		4,000		3,527		15,156		13,392

Total revenues		100,295		93,894		390,138		363,059
EXPENSES
Real estate	$	31,162	$	29,712	$	122,996	$	116,814
Provision for depreciation		26,519		25,301		100,518		101,047
Interest		17,979		18,103		68,467		74,964
General and administrative		5,696		5,697		22,848		21,768
Other expenses ⁽¹⁾		—		—		15,000		402

Total expenses		81,356		78,813		329,829		314,995
Other income		565		657		2,530		2,536

Net income before noncontrolling interests, partnership income and discontinued operations		19,504		15,738		62,839		50,600
Income from unconsolidated entities		519		726		2,644		2,888
Net gain on sale of unconsolidated entities		—		2,022		6,025		4,270

Income from continuing operations		20,023		18,486		71,508		57,758
Discontinued operations:
Discontinued operations, net ⁽²⁾		936		1,675		3,913		6,808
Net gain on sales of discontinued operations		53,856		14,489		62,136		14,489

Income from discontinued operations		54,792		16,164		66,049		21,297

NET INCOME	$	74,815	$	34,650	$	137,557	$	79,055
Redeemable and other noncontrolling interest in income		99		165		413		1,168
Redemption related preferred stock issuance cost		—		—		—		3,771
Dividends attributable to preferred stock		911		911		3,645		7,655

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	73,805	$	33,574	$	133,499	$	66,461

Net income per common share - basic	$	0.96	$	0.45	$	1.74	$	0.93

Net income per common share - diluted	$	0.96	$	0.44	$	1.74	$	0.93

Weighted average shares outstanding - basic ⁽³⁾		76,872		75,415		76,567		71,220

Weighted average shares outstanding - diluted ⁽³⁾		77,180		75,830		76,920		71,670

⁽¹⁾

For the twelve months ended December 31, 2012, Other expenses included a $15,000,000 impairment charge related to a land parcel in Land under development that was transferred to Real estate held for sale, net. For the twelve months ended December 31, 2011, Other expenses included $402,000 related to acquisition costs.

⁽²⁾	Includes three communities sold during 2012 and two communities sold during 2011.


	Quarter ended 12/31/12			Quarter ended 12/31/11			Twelve months ended 12/31/12			Twelve months ended 12/31/11
Rental and ancillary income	$	1,551		$	3,014		$	7,299		$	14,561
Real estate expenses		(513	)		(968	)		(2,286	)		(4,860	)
Provision for depreciation		(102	)		(371	)		(1,100	)		(2,893	)

Discontinued operations, net	$	936		$	1,675		$	3,913		$	6,808

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

Page 4

BRE Properties, Inc.

Consolidated Statements of Income

Past Five Quarters

(Unaudited, in thousands, except per share, unit and per unit data)


	Dec. 31, 2012		Sept. 30, 2012		Jun. 30 2012		Mar. 31, 2012		Dec. 31, 2011
REVENUES
Rental income	$	96,295	$	94,777	$	92,661	$	91,249	$	90,367
Ancillary income		4,000		3,817		3,725		3,615		3,527

Total revenues		100,295		98,594		96,386		94,864		93,894
EXPENSES
Real estate	$	31,162	$	31,178	$	30,344	$	30,312	$	29,712
Provision for depreciation		26,519		24,789		24,543		24,667		25,301
Interest		17,979		16,998		16,272		17,218		18,103
General and administrative		5,696		5,093		6,211		5,847		5,697
Other expenses		—		15,000		—		—		—

Total expenses		81,356		93,058		77,370		78,044		78,813
Other income		565		740		706		520		657

Net income before noncontrolling interests, partnership income and discontinued operations		19,504		6,276		19,722		17,340		15,738
Income from unconsolidated entities		519		669		728		727		726
Net gain on sale of unconsolidated entities		—		6,025		—		—		2,022

Income from continuing operations		20,023		12,970		20,450		18,067		18,486
Discontinued operations:
Discontinued operations, net ⁽¹⁾		936		936		983		1,057		1,675
Net gain on sales of discontinued operations		53,856		—		8,279		—		14,489

Income from discontinued operations		54,792		936		9,263		1,057		16,164

NET INCOME	$	74,815	$	13,906	$	29,712	$	19,124	$	34,650
Redeemable and other noncontrolling interest in income		99		105		105		105		165
Dividends attributable to preferred stock		911		911		911		911		911

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	73,805	$	12,890	$	28,696	$	18,108	$	33,574

Net income per common share - basic	$	0.96	$	0.17	$	0.37	$	0.24	$	0.45

Net income per common share - diluted	$	0.96	$	0.17	$	0.37	$	0.24	$	0.44

Weighted average shares outstanding - basic⁽²⁾		76,872		76,813		76,735		76,000		75,415

Weighted average shares outstanding - diluted⁽²⁾		77,180		77,130		77,070		76,380		75,830

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


	Dec. 31, 2012			Sept. 30, 2012			Jun. 30 2012			Mar. 31, 2012			Dec. 31, 2011
Rental and ancillary income	$	1,551		$	1,757		$	1,912		$	2,080		$	3,014
Real estate expenses		(513	)		(513	)		(603	)		(658	)		(968	)
Provision for depreciation		(102	)		(308	)		(326	)		(365	)		(371	)

Income from discontinued operations, net	$	936		$	936		$	983		$	1,057		$	1,675

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

Page 5

Reconciliation of Funds from Operations (FFO)

(Unaudited, in thousands, except per share, unit and per unit data)


CALCULATION OF FFO	Dec. 31, 2012			Sept. 30, 2012			Jun. 30, 2012			Mar. 31, 2012			Dec. 31, 2011
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	73,805		$	12,890		$	28,696		$	18,108		$	33,574
Add back/ exclude:
Depreciation from continuing operations		26,519			24,789			24,543			24,667			25,301
Depreciation from discontinued operations		102			308			326			365			371
Redeemable and other noncontrolling interest in income		99			105			105			105			165
Depreciation from unconsolidated entities		392			512			504			495			512
Net (gain) on sales from unconsolidated entity		—			(6,025	)		—			—			(2,022	)
Net (gain) on sales of discontinued operations		(53,856	)		—			(8,279	)		—			(14,489	)
Less: Other noncontrolling interests in income not convertible to common stock		(99	)		(105	)		(105	)		(105	)		(105	)

FUNDS FROM OPERATIONS ⁽¹⁾	$	46,962		$	32,474		$	45,789		$	43,634		$	43,307

NON CORE ITEMS IN PERIODS PRESENTED
Non cash asset impairment charge⁽²⁾		—			15,000			—			—			—

CORE FUNDS FROM OPERATIONS ⁽³⁾	$	46,962		$	47,474		$	45,789		$	43,634		$	43,307

Weighted average shares and equivalents outstanding - diluted		77,180			77,130			77,070			76,440			76,100

Funds from operations (per share) - diluted	$	0.61		$	0.42		$	0.59		$	0.57		$	0.57

Core Funds from operations (per share) - diluted	$	0.61		$	0.62		$	0.59		$	0.57		$	0.57

(1)	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.

(2)	For the quarter ended September 30, 2012, EPS and FFO totals included a $15,000,000 impairment charge related to Land under development that was transferred to Real estate held for sale, net.

(3)	Core Funds From Operations (“Core FFO”) begins with FFO as defined by the NAREIT White Paper and adjust for the following:

•

The impact of any expenses relating to non-operating asset impairment and valuation allowances;

•

Property acquisition costs and pursuit cost write-offs (other expenses);

•

Gains and losses from early debt extinguishment, including prepayment penalties and preferred share redemptions;

•

Executive level severance costs;

•

Gains and losses on the sales of non-operating assets, and

•

Other non-comparable items


CAPITAL EXPENDITURES	Dec. 31, 2012		Sept. 30, 2012		Jun. 30, 2012		Mar. 31, 2012		Dec. 31, 2011
Recurring capital expenditures	$	5,698	$	6,378	$	5,496	$	2,537	$	6,033

Average apartment homes in period		21,101		21,240		21,288		21,336		21,654
Capital expenditures per apartment home in period	$	270	$	300	$	258	$	119	$	279
Capital expenditures per apartment home-trailing four quarters	$	947	$	956	$	892	$	865	$	977
Revenue enhancing rehabilitation and other	$	12,564	$	9,174	$	8,922	$	3,760	$	6,982

Page 6

BRE Properties, Inc.

“Same-Store” Markets Summary

For the Quarters ended December 31, 2012 and 2011

(Dollar amounts in thousands)


					Revenues							Expenses
Region	No. of Communities		No. of Homes		Q4’12		Q4’11		% Change			Q4’12		Q4’11		% Change
California
San Diego		11		3,640	$	17,107	$	16,730		2.3	%	$	5,027	$	4,773		5.3	%
Inland Empire		5		1,173		5,008		4,889		2.4	%		1,624		1,533		5.9	%
Orange County		11		3,349		15,384		14,819		3.8	%		4,886		4,797		1.9	%
Los Angeles		13		3,047		16,098		15,430		4.3	%		5,242		4,840		8.3	%
San Francisco Bay Area		12		3,495		20,229		18,415		9.9	%		5,310		5,037		5.4	%

Subtotal; California		52		14,704	$	73,826	$	70,283		5.0	%	$	22,089	$	20,980		5.3	%
Washington
Seattle		13		3,456		13,975		12,748		9.6	%		4,638		4,562		1.7	%
Non Core Markets ⁽¹⁾		3		1,302		3,915		3,818		2.5	%		1,363		1,370		-0.5	%

Total Same-Store ⁽²⁾		68		19,462	$	91,716	$	86,849		5.6	%	$	28,090	$	26,912		4.4	%


					Net Operating Income
Region	No. of Communities		No. of Homes		Q4’12		Q4’11		% Change			% of Total
California
San Diego		11		3,640	$	12,080	$	11,957		1.0	%		19.0	%
Inland Empire		5		1,173		3,384		3,356		0.8	%		5.3	%
Orange County		11		3,349		10,498		10,022		4.7	%		16.5	%
Los Angeles		13		3,047		10,856		10,590		2.5	%		17.1	%
San Francisco Bay Area		12		3,495		14,919		13,378		11.5	%		23.4	%

Subtotal; California		52		14,704	$	51,737	$	49,303		4.9	%		81.4	%
Washington
Seattle		13		3,456		9,337		8,186		14.1	%		14.7	%
Non Core Markets ⁽¹⁾		3		1,302		2,552		2,448		4.2	%		3.9	%

Total Same-Store ⁽²⁾		68		19,462	$	63,626	$	59,937		6.2	%		100.0	%


							Net Operating Income					Avg. Physical Occupancy			Gross Carrying Value
“Non Same-Store” Summary	No. of Communities			No. of Homes			Q4’12		Q4’11			Q4’12			Q4’12
Acquired communities ⁽³⁾		3			652		$	2,380	$	2,086			95.7	%	$	173,182
Lease up communities ⁽⁴⁾		2			606			1,699		980			64.1	%		194,063
Rehabilitation communities ⁽⁵⁾		1			440			1,330		1,271			93.3	%		42,561
Joint venture income ⁽⁶⁾		8			2,864			519		726
Commercial and Other ⁽⁷⁾		n/a			n/a			98		(92	)
Other income		n/a			n/a			565		657
Discontinued operations ⁽⁸⁾		5			1,146			1,038		2,046

Total Non Same-Store		19			5,708		$	7,629	$	7,674			83.8	%	$	409,806

Less Communities Sold in 2011 and 2012		(5	)		(1,146	)
Total All Homes / NOI		82			24,024		$	71,255	$	67,611

(1)	Consists of one community in Sacramento, CA (400 homes) and two communities in Phoenix, AZ (902 homes).

(2)	Consists of communities completed, stabilized and owned by BRE for at least two twelve month periods. The term stabilized refers to communities that have reached a physical occupancy of at least 93%.

(3)	Consists of NOI from three communities acquired after January 1, 2011.

(4)	Consists of NOI from two development communities not yet included in the same-store portfolio.

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

(6)	Consists of our percentage of net income derived from joint venture investments in rental communities. See page 9 for a reconciliation of the components of BRE’s share of joint venture net income (including our proportionate share of NOI).

(7)

Consists of NOI from retail tenants associated with our operating communities and NOI from commercial communities that will later be developed as multifamily and other real estate expenses. For the three months ended December 31, 2011 other real estate expenses exceeded the NOI from retail and commercial.

(8)	Includes results from three communities sold in 2012 and two communities sold in 2011.

Page 7

BRE Properties, Inc.

“Same-Store” Markets Summary

For the Twelve Months Ended December 31, 2012 and 2011

(Dollar amounts in thousands)


					Revenues							Expenses
Region	No. of Communities		No. of Homes		YTD 2012		YTD 2011		% Change			YTD 2012		YTD 2011		% Change
California
San Diego		11		3,640	$	67,646	$	66,223		2.1	%	$	20,084	$	19,399		3.5	%
Inland Empire		5		1,173		19,733		19,273		2.4	%		6,366		5,997		6.2	%
Orange County		11		3,349		60,652		58,239		4.1	%		19,283		18,906		2.0	%
Los Angeles		13		3,047		63,338		59,947		5.7	%		20,984		20,292		3.4	%
San Francisco Bay Area		12		3,495		78,088		71,698		8.9	%		21,187		20,250		4.6	%

Subtotal; California		52		14,704	$	289,457	$	275,380		5.1	%	$	87,904	$	84,844		3.6	%
Washington
Seattle		13		3,456		54,162		49,873		8.6	%		18,294		17,713		3.3	%
Non Core Markets ⁽¹⁾		3		1,302		15,549		15,081		3.1	%		5,737		5,458		5.1	%

Total Same-Store ⁽²⁾		68		19,462	$	359,168	$	340,334		5.5	%	$	111,935	$	108,015		3.6	%


					Net Operating Income
Region	No. of Communities		No. of Homes		YTD 2012		YTD 2011		% Change			% of Total
California
San Diego		11		3,640	$	47,562	$	46,824		1.6	%		19.2	%
Inland Empire		5		1,173		13,367		13,276		0.7	%		5.4	%
Orange County		11		3,349		41,369		39,333		5.2	%		16.7	%
Los Angeles		13		3,047		42,354		39,655		6.8	%		17.1	%
San Francisco Bay Area		12		3,495		56,901		51,448		10.6	%		23.0	%

Subtotal; California		52		14,704	$	201,553	$	190,536		5.8	%		81.5	%
Washington
Seattle		13		3,456		35,868		32,160		11.5	%		14.5	%
Non Core Markets ⁽¹⁾		3		1,302		9,812		9,623		2.0	%		4.0	%

Total Same-Store ⁽²⁾		68		19,462	$	247,233	$	232,319		6.4	%		100.0	%


							Net Operating Income				Avg. Physical Occupancy			Gross Carrying Value
“Non Same-Store” Summary	No. of Communities			No. of Homes			YTD 2012		YTD 2011		YTD 2012			YTD 2012
Acquired communities ⁽³⁾		3			652		$	9,108	$	5,167		95.8	%	$	173,182
Lease up communities ⁽⁴⁾		2			606			5,380		3,778		71.9	%		194,063
Rehabilitation communities ⁽⁵⁾		1			440			5,336		4,980		94.7	%		42,561
Joint venture income ⁽⁶⁾		8			2,864			2,644		2,888
Commercial and Other ⁽⁷⁾		n/a			n/a			85		1
Other income		n/a			n/a			2,530		2,536
Discontinued operations ⁽⁸⁾		5			1,146			5,013		9,701

Total Non Same-Store		19			5,708		$	30,096	$	29,051		80.8	%	$	409,806

Less Communities Sold in 2011 and 2012		(5	)		(1,146	)
Total All Homes / NOI		82			24,024		$	277,329	$	261,370

(1)	Consists of one community in Sacramento, CA (400 homes) and two communities in Phoenix, AZ (902 homes).

(2)	Consists of communities completed, stabilized and owned by BRE for at least two twelve month periods. The term stabilized refers to communities that have reached a physical occupancy of at least 93%.

(3)	Consists of NOI from three communities acquired after January 1, 2011.

(4)	Consists of NOI from two development communities not yet included in the same-store portfolio.

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

(6)	Consists of our percentage of net income derived from joint venture investments in rental communities. See page 9 for a reconciliation of the components of BRE’s share of joint venture net income (including our proportionate share of NOI).

(7)	Consists of NOI from retail tenants associated with our operating communities and NOI from commercial communities that will later be developed as multifamily and other real estate expenses.

(8)	Includes results from three communities sold in 2012 and two communities sold in 2011.

Page 8

BRE Properties, Inc.

“Same-Store” Operating Expense Summary and Joint Venture Disclosure

(Dollar amounts in thousands)

SAME-STORE OPERATING EXPENSES (19,462 homes)


Quarter Ended December 31, 2012	Q4’12		Q4’11		$ Change			% Change			% of Q4’12 Operating Expenses
Property taxes	$	8,046	$	7,609	$	437			5.7	%		28.6	%
Insurance		1,377		1,383		(6	)		-0.4	%		4.9	%
Utilities		2,042		1,999		43			2.2	%		7.3	%
Property management fees ⁽¹⁾		2,971		2,820		151			5.4	%		10.6	%
Other operating expenses ⁽²⁾		13,654		13,101		553			4.2	%		48.6	%

Total operating expenses	$	28,090	$	26,912	$	1,178			4.4	%		100.0	%


Twelve Months Ended December 31, 2012	YTD 2012		YTD 2011		$ Change			% Change			% of YTD 2012 Operating Expenses
Property taxes	$	32,917	$	31,573	$	1,344			4.3	%		29.4	%
Insurance		4,893		4,497		396			8.8	%		4.4	%
Utilities		7,794		8,411		(617	)		-7.3	%		7.0	%
Property management fees ⁽¹⁾		11,664		11,083		581			5.2	%		10.4	%
Other operating expenses ⁽²⁾		54,667		52,451		2,216			4.2	%		48.8	%

Total operating expenses	$	111,935	$	108,015	$	3,920			3.6	%		100.0	%

(1)	Management fees based on a percentage of total revenues. Amount approximates the corporate cost to support on-site personnel.

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

JOINT VENTURE DISCLOSURE- Quarter Ended December 31, 2012


Joint Ventures	Communities		Regional Breakdown	Homes ⁽³⁾		BRE equity investment		BRE share of JV Debt
Relationship 1 - 15% BRE equity ownership		7	Phx. (3) Den. (4)		2,612	$	34,257	$	—
Relationship 2 - 35% BRE equity ownership		1	Phx. (1)		252		6,496		—

Total		8			2,864	$	40,753	$	—


BRE share	Q4’12		Q4’11		YTD 2012		YTD 2011
Revenues	$	1,442	$	1,967	$	7,205	$	8,066
Expenses		531		729		2,658		2,965

Net Operating Income		911		1,238		4,547		5,101
Depreciation		392		512		1,903		2,052
Interest		—		—		—		161

Net Income	$	519	$	726	$	2,644	$	2,888

Joint Venture Sales	Q4’12		Q4’11⁽⁴⁾		YTD 2012 ⁽³⁾		YTD 2011 ⁽⁴⁾
Communities		—		1		3		2
Homes		—		264		728		488

BRE share	Q4’12		Q4’11		YTD 2012		YTD 2011
Net Proceeds		—	$	4,700	$	26,919	$	9,349
Net Gain on Sale		—	$	2,000	$	6,025	$	4,270
Net Gain attributable promote		—	$	372	$	2,264	$	780

	Q4’12		Q4’11		YTD 2012		YTD 2011
Management fees earned	$	348	$	446	$	1,637	$	1,843

(3)	During the quarter ended September 30, 2012, one joint venture community located in Sacramento, CA and two joint venture communities located in Denver, CO were sold. BRE had a 35% equity ownership in the Sacramento, CA community and a 15% equity ownership in the Denver, CO communities.

(4)	During the quarter ended December 31, 2011, one joint venture community with in Denver, CO was sold. During the quarter ended September 30, 2011, one joint venture community in Denver, CO was sold. The Company had a 15% equity ownership in both of the communities sold.

Page 9

BRE Properties, Inc.

Sequential “Same-Store” Multifamily Markets Summary

Last five quarters

REVENUES


	Q4’12			Q3’12			Q2’12			Q1’12			Q4’11
California
San Diego		0.4	%		1.7	%		0.2	%		0.0	%		-0.3	%
Inland Empire		1.3	%		1.1	%		0.0	%		0.1	%		1.0	%
Orange County		0.7	%		1.2	%		1.4	%		0.5	%		1.3	%
Los Angeles		0.4	%		2.4	%		0.8	%		0.7	%		2.2	%
San Francisco Bay Area		2.2	%		3.1	%		1.7	%		2.5	%		0.7	%

Subtotal; California		1.0	%		2.1	%		1.0	%		0.9	%		0.9	%
Washington
Seattle		1.5	%		2.5	%		3.5	%		1.8	%		0.4	%
Non Core Markets ⁽¹⁾		0.3	%		-0.5	%		2.8	%		-0.2	%		0.9	%

Total Same-Store ⁽³⁾		1.0	%		2.0	%		1.4	%		1.0	%		0.9	%

EXPENSES ⁽²⁾


	Q4’12			Q3’12			Q2’12			Q1’12			Q4’11
California
San Diego		-1.2	%		0.1	%		4.1	%		2.3	%		-3.5	%
Inland Empire		-1.5	%		5.9	%		1.4	%		0.2	%		-4.0	%
Orange County		-0.1	%		4.1	%		-2.4	%		0.3	%		-0.4	%
Los Angeles		-4.4	%		9.5	%		-4.6	%		8.5	%		-10.0	%
San Francisco Bay Area		-1.3	%		1.7	%		1.6	%		3.4	%		-0.9	%

Subtotal; California		-1.8	%		4.0	%		-0.3	%		3.4	%		-3.8	%
Washington
Seattle		4.5	%		-7.3	%		7.9	%		-2.8	%		-0.9	%
Non Core Markets ⁽¹⁾		-9.2	%		4.0	%		1.0	%		4.3	%		1.0	%

Total Same-Store ⁽³⁾		-1.2	%		2.0	%		1.1	%		2.4	%		-3.1	%

NET OPERATING INCOME


	Q4’12			Q3’12			Q2’12			Q1’12			Q4’11
California
San Diego		1.0	%		2.4	%		-1.4	%		-0.9	%		1.0	%
Inland Empire		2.8	%		-1.2	%		-0.6	%		0.0	%		3.5	%
Orange County		1.0	%		-0.1	%		3.2	%		0.5	%		2.1	%
Los Angeles		2.9	%		-1.0	%		3.5	%		-2.8	%		9.0	%
San Francisco Bay Area		3.5	%		3.6	%		1.7	%		2.2	%		1.3	%

Subtotal; California		2.2	%		1.3	%		1.5	%		-0.1	%		3.1	%
Washington
Seattle		0.0	%		7.9	%		1.3	%		4.4	%		1.2	%
Non Core Markets ⁽¹⁾		6.3	%		-3.1	%		4.0	%		-2.7	%		0.9	%

Total Same-Store ⁽³⁾		2.1	%		2.0	%		1.6	%		0.4	%		2.7	%

(1)	Consists of one community in Sacramento, CA (400 homes) and two communities in Phoenix, AZ (902 homes).

(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 19,462 homes for all periods shown.

Page 10

BRE Properties, Inc.

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


Q4’12 vs. Q3’12 Change			Avg. Revenue per Occupied Home ⁽¹⁾							Financial Occupancy ⁽²⁾									Rental Revenue
	Homes		Q4’12		Q3’12		% Change			Q4’12			Q3’12			% Change			Q4’12		Q3’12		% Change
San Diego		3,640	$	1,637	$	1,628		0.6	%		95.7	%		95.9	%		-0.2	%	$	17,107	$	17,044		0.4	%
Inland Empire		1,173		1,476		1,466		0.7	%		96.4	%		95.8	%		0.6	%		5,008		4,943		1.3	%
Orange County		3,349		1,607		1,599		0.5	%		95.3	%		95.1	%		0.2	%		15,384		15,281		0.7	%
Los Angeles		3,047		1,842		1,835		0.4	%		95.6	%		95.6	%		0.0	%		16,098		16,034		0.4	%
San Francisco Bay Area		3,495		2,018		1,987		1.6	%		95.6	%		95.0	%		0.6	%		20,229		19,792		2.2	%
Seattle		3,456		1,413		1,394		1.4	%		95.4	%		95.3	%		0.1	%		13,975		13,770		1.5	%
Non Core Markets		1,302		1,056		1,054		0.2	%		94.9	%		94.8	%		0.1	%		3,915		3,901		0.4	%

Same-Store		19,462	$	1,645	$	1,630		0.9	%		95.5	%		95.4	%		0.1	%	$	91,717	$	90,765		1.0	%


Q4’12 vs. Q4’11 Change			Avg. Revenue per Occupied Home ⁽¹⁾							Financial Occupancy ⁽²⁾									Rental Revenue
	Homes		Q4’12		Q4’11		% Change			Q4’12			Q4’11			% Change			Q4’12		Q4’11		% Change
San Diego		3,640	$	1,637	$	1,601		2.3	%		95.7	%		95.7	%		0.0	%	$	17,107	$	16,730		2.3	%
Inland Empire		1,173		1,476		1,450		1.8	%		96.4	%		95.8	%		0.6	%		5,008		4,889		2.4	%
Orange County		3,349		1,607		1,543		4.1	%		95.3	%		95.6	%		-0.3	%		15,384		14,819		3.8	%
Los Angeles		3,047		1,844		1,747		5.5	%		95.5	%		96.6	%		-1.1	%		16,098		15,430		4.3	%
San Francisco Bay Area		3,495		2,018		1,860		8.5	%		95.6	%		94.4	%		1.2	%		20,229		18,415		9.9	%
Seattle		3,456		1,413		1,298		8.8	%		95.4	%		94.7	%		0.7	%		13,975		12,748		9.6	%
Non Core Markets		1,302		1,056		1,037		1.9	%		94.9	%		94.3	%		0.6	%		3,915		3,818		2.5	%

Same-Store		19,462	$	1,645	$	1,559		5.5	%		95.5	%		95.4	%		0.1	%	$	91,717	$	86,849		5.6	%


2012 vs. 2011 Change			Avg. Revenue per Occupied Home ⁽¹⁾							Financial Occupancy ⁽²⁾									Rental Revenue
	Homes		YTD 12/31/12		YTD 12/31/11		% Change			YTD 12/31/12			YTD 12/31/11			% Change			YTD 12/31/12		YTD 12/31/11		% Change
San Diego		3,640	$	1,622	$	1,585		2.4	%		95.5	%		95.7	%		-0.2	%	$	67,646	$	66,223		2.1	%
Inland Empire		1,173		1,470		1,433		2.5	%		95.4	%		95.5	%		-0.2	%		19,733		19,273		2.4	%
Orange County		3,349		1,585		1,516		4.5	%		95.2	%		95.6	%		-0.4	%		60,652		58,239		4.1	%
Los Angeles		3,047		1,814		1,722		5.3	%		95.5	%		95.2	%		0.3	%		63,338		59,947		5.7	%
San Francisco Bay Area		3,495		1,957		1,799		8.8	%		95.1	%		95.0	%		0.1	%		78,088		71,698		8.9	%
Seattle		3,456		1,368		1,262		8.4	%		95.5	%		95.3	%		0.2	%		54,162		49,873		8.6	%
Non Core Markets		1,302		1,048		1,018		2.9	%		95.0	%		94.8	%		0.2	%		15,549		15,081		3.1	%

Same-Store		19,462	$	1,613	$	1,529		5.5	%		95.3	%		95.3	%		0.0	%	$	359,166	$	340,333		5.5	%

(1)

Average revenue per occupied home includes rental and ancillary income earned on occupied homes during the period. Ancillary income per occupied home totals approximately $63 per home per month for the twelve months ended December 31, 2012. 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 homes at contract rates and vacant homes at market rents. Vacancy loss is determined by valuing vacant homes at current market rents.

Page 11

BRE Properties, Inc.

“Same-Store” Operating Metrics


	No. of		Occupancy ⁽²⁾						Occupancy ⁽³⁾						Turnover Ratio ⁽⁴⁾						Turnover Ratio ⁽⁴⁾
	Homes		Q4’12			Q4’11			YTD’12			YTD’11			Q4’12			Q4’11			YTD’12			YTD’11
California
San Diego		3,640		95.8	%		95.7	%		95.4	%		95.6	%		62	%		63	%		67	%		68	%
Inland Empire		1,173		96.4	%		95.8	%		95.3	%		95.5	%		44	%		48	%		57	%		57	%
Orange County		3,349		95.2	%		95.6	%		95.4	%		95.6	%		61	%		55	%		64	%		62	%
Los Angeles		3,047		95.8	%		96.7	%		95.7	%		95.3	%		55	%		49	%		63	%		58	%
San Francisco Bay Area		3,495		96.0	%		94.6	%		95.6	%		95.5	%		51	%		48	%		58	%		55	%

Subtotal; California		14,704		95.8	%		95.6	%		95.5	%		95.5	%		56	%		54	%		63	%		61	%
Washington
Seattle		3,456		95.6	%		94.8	%		95.7	%		95.5	%		53	%		47	%		55	%		55	%
Non Core Markets ⁽¹⁾		1,302		94.7	%		94.5	%		94.8	%		95.1	%		54	%		50	%		61	%		62	%

Total/Average Same-Store ⁽⁵⁾		19,462		95.7	%		95.4	%		95.5	%		95.5	%		55	%		52	%		61	%		60	%

⁽¹⁾	Consists of one community in Sacramento, CA (400 homes) and two communities in Phoenix, AZ (902 homes).

⁽²⁾	Represents average physical occupancy for the quarter.

⁽³⁾	Represents average physical occupancy for the year to date period.

⁽⁴⁾	Represents the annualized number of homes turned over for the period, divided by the number of homes in the region

⁽⁵⁾	Consists of stabilized communities owned by BRE since January 1, 2011.

“Same -Store” New Lease and Renewal Transactions


	New Leases									Renewals									Total New Leases/Renewals
	Q4’12		New Leases Effective ⁽⁶⁾		Previous Resident Effective ⁽⁷⁾		% Change			Q4’12		Renewal Effective ⁽⁶⁾		Expiring Effective ⁽⁸⁾		% Change			Q4’12		Current Effective ⁽⁶⁾		Prior Effective		% Change
California
San Diego		506	$	1,572	$	1,596		-1.5	%		397	$	1,636	$	1,591		2.8	%		903	$	1,600	$	1,594		0.4	%
Inland Empire		120		1,485		1,492		-0.4	%		153		1,468		1,420		3.4	%		273		1,476		1,451		1.7	%
Orange County		482		1,561		1,559		0.1	%		403		1,611		1,553		3.8	%		885		1,584		1,556		1.8	%
Los Angeles		352		1,875		1,839		1.9	%		286		1,896		1,813		4.6	%		638		1,884		1,827		3.1	%
San Francisco Bay Area		384		2,056		1,991		3.3	%		421		2,026		1,892		7.1	%		805		2,040		1,939		5.2	%

Subtotal; California		1,844	$	1,722	$	1,708		0.8	%		1,660	$	1,758	$	1,681		4.6	%		3,504	$	1,739	$	1,695		2.6	%
Washington
Seattle		400		1,391		1,389		0.1	%		382		1,350		1,270		6.3	%		782		1,371		1,331		3.0	%
Non Core Markets ⁽¹⁾		190		985		1,019		-3.4	%		158		1,040		1,003		3.7	%		348		1,010		1,012		-0.2	%

Total Same-Store ⁽⁹⁾		2,434	$	1,610	$	1,602		0.5	%		2,200	$	1,636	$	1,561		4.8	%		4,634	$	1,622	$	1,582		2.5	%

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

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

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

⁽⁹⁾	The Q4’12 total same-store pool consists of 19,462 homes. Average lease term for leases signed during the quarter was 10 months. Annualized growth for total new leases/renewals totals 3.0%.

Page 12

BRE Properties, Inc.

Debt Summary as of December 31, 2012

(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
2013	$	842	$	29,639		—	$	40,018	$	70,499		6.35	%		4.1	%
2014		3,839		—		—		50,000		53,839		4.77	%		3.1	%
2015		7,962		—		—		—		7,962		5.63	%		0.5	%
2016		9,041		—		—		—		9,041		5.64	%		0.5	%
2017		9,307		—		—		300,000		309,307		5.50	%		17.9	%
2018		9,853		—		—		—		9,853		5.63	%		0.6	%
2019		6,492		317,975		—		—		324,467		5.59	%		18.7	%
2020		3,346		343,646		—		—		346,992		5.61	%		20.0	%
2021		—		—		—		300,000		300,000		5.20	%		17.3	%
2022		—		—		—		—		—		0.00	%		0.0	%
2023		—		—		—		300,000		300,000		3.38	%		17.3	%

Total	$	50,682	$	691,260	$	—	$	990,018	$	1,731,960		5.13	%		100	%

WEIGHTED AVERAGE COST OF DEBT


	Balance		Weighted Avg. Term		Weighted Avg. Rate			Percentage of Total Debt
Fixed Rate
Unsecured	$	990,018		6.87		4.79	%		57.2	%
Secured		741,942		6.03		5.59	%		42.8	%

	$	1,731,960		6.51		5.13	%		100.0	%
Floating Rate
Unsecured⁽²⁾		—		2.25					0.0	%
Loan Fees⁽³⁾						0.26	%
Total debt	$	1,731,960		6.51		5.39	%		100.0	%

CAPITALIZED INTEREST


	Q4’12		Q4’11
Capitalized Interest	$	5,610	$	4,229

	YTD 2012		YTD 2011
Capitalized Interest	$	21,633	$	14,431

SUMMARY OF COMPLIANCE- Senior Unsecured Notes


	Requirement			Actual
Total Debt to Gross Assets		< 60	%		40	%
Debt Service Test		> 1.5			2.64
Total Secured Debt to Total Assets		< 40	%		17	%
Total Unencumbered Assets to Unsecured Debt		> 1.5			3.39

SUMMARY OF PREFERRED SHARES


	Q4’12
Total preferred shares outstanding		2,160
Liquidation value	$	53,993
Dividend yield at par		6.75	%

SENIOR UNSECURED DEBT RATING

As of January 30, 2013


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

SUMMARY OF COMPLIANCE - Line of Credit


	Requirement			Actual
Leverage Ratio		< 60	%		35	%
Maximum Secured Indebtedness		< 40	%		14	%
Minimum Unsecured Leverage		> 1.65			3.83
Minimum Fixed Charge Coverage		> 1.5			2.61

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

(2)	The $750 million senior unsecured line of credit priced at LIBOR plus 120 bps plus an annual 20bps facility fee on the total commitment of the facility, which matures on April 3, 2015, and has a one year extension option.

(3)	Includes amortization of all fees associated with all outstanding debt (including annual facility fees on our unsecured line of credit).

Page 13

BRE Properties, Inc.

Development Summary

December 31, 2012

(Dollar amounts in millions)


CONSTRUCTION IN PROGRESS	Number of Homes		Cost Incurred		Estimated Cost		Balance to Fund		Product Type		First CO ⁽¹⁾		Final CO ⁽¹⁾
Aviara ⁽²⁾
Mercer Island, WA		166	$	31.6	$	44.5	$	12.9		Podium		Q1’13		Q2’13
Solstice
Sunnyvale, CA		280		70.8		121.9		51.1		Podium		Q4’13		Q1’14
Wilshire La Brea
Los Angeles, CA		478		176.0		277.3		101.3		Podium		Q4’13		Q4’14
Redwood City ⁽³⁾
Redwood City, CA		264		23.9		97.8		73.9		Podium		Q2’14		Q4’14

Total CIP		1,188	$	302.3	$	541.5	$	239.2

LAND UNDER DEVELOPMENT ⁽⁴⁾

Number
of Homes

Cost
Incurred

Estimated
Cost⁽⁵⁾

Balance to
Fund

Product
Type

Estimated
Start Date

Mission Bay ⁽⁶⁾

San Francisco, CA

360

70.0

TBR

Podium

Q1’13

Pleasanton I

Pleasanton, CA

254

20.7

TBR

Garden

TBD

Pleasanton II

Pleasanton, CA

255

14.0

TBR

Garden

TBD

Total Land Owned

869

104.7

390.6

285.9

LAND UNDER CONTRACT ⁽⁷⁾

Number
of Homes

Cost
Incurred ⁽⁸⁾

Estimated
Cost ⁽⁵⁾

Balance to
Fund

Product
Type

Walnut Creek BART

Walnut Creek, CA

358

12.3

TBR

Podium

(1)	Represents estimated quarter in which first and final certificates of occupancy will be received. Projects generally receive phased certificates of occupancy during the final six to twelve 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 9-year extension. The annualized GAAP expense is $664,000.

(3)	During Q4’2012, the parcel of land located in Redwood City, CA was transferred from land under development to construction in progress.

(4)	Represents projects in various stages of pre-construction development. Projects are transferred to construction in progress when construction contracts are finalized and construction activity has commenced.

(5)	Reflects the aggregate cost estimates includingl and. Specific community cost estimates To Be Reported (TBR) once entitlement approvals are received and the Company is prepared to begin construction.

(6)	Represents 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 internal and external entitlement expenses incurred to date.

Note:

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 $10.7 million and it is recorded in Investment in rental communities. Predevelopment costs associated with this site total $3.7 million and are recorded in Other assets.

Page 14

BRE Properties, Inc.

Share Analysis as of December 31, 2012

(Dollar and share amounts in thousands)

Exhibit A


SUMMARY OF COMMON SHARES

Weighted Average	Qtr. Ended 12/31/ 2012		Qtr. Ended 9/30/2012		Qtr. Ended 6/30/2012		Qtr. Ended 3/31/2012			Qtr. Ended 12/31/2011
Weighted average shares outstanding ⁽¹⁾		76,872		76,813		76,735		76,000			75,415
Weighted average OP units		—		—		—		60			270
Dilutive effect of stock based awards		308		317		335		380			415

Diluted shares - FFO		77,180		77,130		77,070		76,440			76,100
Less: Anti-dilutive OP Units ⁽²⁾		—		—		—		(60	)		(270	)

Diluted shares - EPS⁽³⁾		77,180		77,130		77,070		76,380			75,830


	YTD			YTD
Weighted Average	12/31/2012			12/31/2011
Weighted average shares outstanding ⁽¹⁾		76,567			71,220
Weighted average OP units		20			510
Dilutive effect of stock based awards		353			450

Diluted shares - FFO		76,940			72,180
Less: Anti-dilutive OP Units ⁽²⁾		(20	)		(510	)

Diluted shares - EPS⁽³⁾		76,920			71,670


	As of		As of		As of		As of		As of
Ending	12/31/2012		9/30/2012		6/30/2012		3/31/2012		12/31/2011
Shares outstanding at end of period		76,925		76,831		76,796		76,679		75,556
OP units at end of period		—		—		—		—		160
Dilutive effect of stock based awards		330		313		287		297		446

Total		77,255		77,144		77,083		76,976		76,162


SUMMARY OF PREFERRED SHARES

	Qtr. Ended 12/31/2012		Qtr. Ended 9/30/2012		Qtr. Ended 6/30/2012		Qtr. Ended 3/31/2012		Qtr. Ended 12/31/2011
6.75% Series D, $25 per share liquidation preference		2,160		2,160		2,160		2,160		2,160

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

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

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

Page 15


2013 Financial Outlook		Exhibit B


(dollars in thousands, except per share amounts) 2013: EPS & FFO per share guidance
	Low End				High End
Earnings per share	$	1.00			$	1.10
Depreciation per share	$	1.35			$	1.35
Funds from operations per share	$	2.35			$	2.45

2013: Same-store outlook
	Low End				High End
Same-store revenue (2013 vs 2012)		3.50	%			4.75	%
Same-store expense (2013 vs 2012)		3.75	%			3.00	%
Same-store net operating income (2013 vs 2012)		3.40	%			5.55	%

Regional breakdown of same store revenues	Low End				High End			% of Total Same Store Revenues
Seattle		5.00	%			6.25	%		14	%
San Francisco Bay Area		5.50	%			6.75	%		25	%
Southern California		2.50	%			3.75	%		57	%
Non Core markets		1.00	%			2.00	%		4	%

Total		3.50	%			4.75	%		100	%

2013: Other elements of guidance

2013 Same-store and non same-store pools
	Communities				Homes
Ending 2012 communities
Same-store		68				19,462
Non same-store
Acquisition communities		3				652
Lease-up communities		2				606
Renovation communities		1				440

Total wholly of majority owned communities		74				21,160


2012 pool adjustments
2012 acquisition communities moved to 2013 same store		3				652
2012 lease-up community moved to 2013 same-store		1				270
2012 renovation community moved to 2013 same store		1				440

2013 Communities
Same-store		73				20,824
Non same-store
Lease-up communities		1				336

Total wholly or majority owned communities		74				21,160


Operating and capital elements		Level / Range
Occupancy (same-store)		95.0%-95.3%
LIBOR (average)		35-50 bps
Weighted average cost of debt outstanding		5.35%-5.40%
Operating property acquisitions		—				—
Development advances	$	190,000		—	$	225,000
Capitalized interest	$	22,000		—	$	23,500
Debt maturities	$	70,000		—	$	70,000
Revenue enhancing rehab & other	$	35,000		—	$	50,000
Recurring capital expenditures	$	22,000		—	$	25,000
Common stock	$	—		—	$	50,000
Community sales / land sales	$	150,000		—	$	250,000
Debt issuance	$	—		—	$	—

Detail of increase in shares outstanding	Low End				High End
Diluted shares outstanding 12/31/12		77,255				77,255
Weighted average impact of shares issued in 2013		545				745

2013 Outlook weighted average shares outstanding		77,800				78,000

Page 16


2013 Financial Outlook		Exhibit B, continued


2013: Detail of financial outlook line items against comparable 2012 actual results (dollar amounts in thousands except per share amounts)
	2012			2013					2013
	Actual			Low End					High End
Rental and ancillary revenues
Same-store ⁽¹⁾	$	387,313		$	400,869		3.50	%	$	405,710		4.75	%
Non same-store ⁽¹⁾
Lease-up communities		1,062			8,750					9,000
Acquisition communities		—			—					—
Commercial & other		1,763			1,770					1,800

Total rental and ancillary revenues		390,138			411,389					416,510

Real estate expenses
Same-store ⁽¹⁾		120,862			125,394		3.75	%		124,488		3.00	%
Non same-store ⁽¹⁾
Lease-up communities		456			3,400					3,200
Acquisition communities		—			—					—
Commercial & other		1,678			1,850					1,750

Total real estate expenses		122,996			130,644					129,438
Property level net operating income
Same-store ⁽¹⁾		266,451			275,475		3.40	%		281,223		5.55	%
Non same-store ⁽¹⁾
Lease-up communities		606			5,350					5,800
Acquisition communities		—			—					—
Commercial & other		85			(80	)				50

Total property level net operating income		267,142			280,745					287,073

2013 acquisition communities (net)		—			—					—
Non real estate expenses
Provision for depreciation		100,518			105,000					105,000
General & administrative		22,848			24,250					23,250
Interest expense		68,467			69,000					68,000
Other expenses		15,000			—					—
Loss on retirement of debt		—			—					—

Total non real estate expenses		206,833			198,250					196,250

Partnership and other income
Partnership income		2,644			2,000					2,300
Net gain on sale of unconsolidated entity		6,025			—					—
Other income non property related		2,530			1,600					1,650

Total partnership and other income		11,199			3,600					3,950

Discontinued operations—communities sold
Net operating income		5,013	⁽²⁾		(6,000	)⁽³⁾				(6,000	)⁽³⁾
Depreciation		(1,100	)		—					—
Gain on sales of discontinued operations		62,136			—					—

Total discontinued operations		66,049			(6,000	)				(6,000	)

Redeemable noncontrolling interest in income		413			300					300
Preferred stock dividends		3,645			3,645					3,645
Redemption related preferred stock issuance costs		—			—					—

Net income available to common shareholders	$	133,499		$	76,150				$	84,828

Reconciliation to funds from operations
Depreciation from continuing and discontinued ops		101,618			105,000					105,000
Depreciation from unconsolidated entities		1,903			1,400					1,500
Convertible redeemable noncontrolling interests in income					—					—
Gain on sales of discontinued operations		(62,136	)		—					—
Net gain on sale of unconsolidated entity		(6,025	)		—					—

Funds from operations	$	168,859		$	182,550				$	191,328

Diluted shares outstanding—FFO		76,940			77,800					78,000

FFO per common share	$	2.19		$	2.35				$	2.45

Core FFO per common share	$	2.39		$	2.35				$	2.45

(1)	2012 Actual Same-store and Non Same-store communities are presented to reflect results for the comparable 2013 community pool composition.

(2)	Net operating income from three San Diego assets sold in 2012. Countryside Village sold on May 17, 2012 for $12.6 million and Terra Nova and Canyon Villa sold on December 20, 2012 for $77.0 million.

(3)	Assumes midpoint ($200 million) of estimated 2013 range of sales proceeds closing on July 1, at a 6.0% cap rate. Annual NOI from properties anticipated to be sold are included in Same-store totals above, deduction in this line represents NOI lost post the July 1 assumed sale date.

Page 17


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 community, 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 communities that result from use or market conditions nor the level of capital expenditures to maintain the operating performance of our communities, 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.

Core Funds from Operation (“Core FFO”)

Core funds from operations (“Core FFO”) begins with FFO as defined by the NAREIT White Paper and adjusts for: the impact of any expenses relating to non-operating asset impairment and valuation allowances; property acquisition costs and pursuit cost write-offs (other expenses); gains and losses from early debt extinguishment, including prepayment penalties and preferred share redemptions; executive level severance costs; gains and losses on the sales of non-operating assets, and other non-comparable items.


	Quarter Ended 12/31/2012			Quarter Ended 12/31/2011			Twelve Months Ended			Twelve Months Ended
Net income available to common shareholders	$	73,805		$	33,574		$	133,499		$	66,461
Depreciation from continuing operations		26,519			25,301			100,518			101,047
Depreciation from discontinued operations		102			371			1,100			2,893
Redeemable and other noncontrolling interest in income		99			165			413			1,168
Depreciation from unconsolidated entities		392			512			1,903			2,052
Net gain on sales of discontinued operations		(53,856	)		(14,489	)		(62,136	)		(14,489	)
Net gain on sale of unconsolidated entities		—			(2,022	)		(6,025	)		(4,270	)
Less: Redeemable noncontrolling interest in income not convertible into common shares		(99	)		(105	)		(413	)		(420	)

Funds from operations	$	46,962		$	43,307		$	168,859		$	154,442

Non core items in the periods presented		—			—			15,000			4,173

Core Funds from operations	$	46,962		$	43,307		$	183,859		$	158,615

Diluted shares outstanding - EPS ⁽¹⁾		77,180			75,830			76,920			71,670
Net income per common share - diluted	$	0.96		$	0.44		$	1.74		$	0.93

Diluted shares outstanding - FFO ⁽¹⁾		77,180			76,100			76,940			72,180
FFO per common share - diluted	$	0.61		$	0.57		$	2.19		$	2.14

Diluted shares outstanding - Core FFO ⁽¹⁾		77,180			76,100			76,940			72,180
Core FFO per common share - diluted	$	0.61		$	0.57		$	2.39		$	2.20

⁽¹⁾	See analysis of weighted average shares and ending shares at Exhibit A.

Page 18

BRE Properties, Inc.

Non-GAAP Financial Measure Reconciliations and Definitions

(Dollar amounts in thousands)

Exhibit C, continued

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 community 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 communities that result from use or market conditions nor the level of capital expenditures to maintain the operating performance of our communities, 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 12/31/2012			Quarter Ended 12/31/2011			Twelve Months Ended			Twelve Months Ended
Net income available to common shareholders	$	73,805		$	33,574		$	133,499		$	66,461
Interest, including discontinued operations		17,979			18,103			68,467			74,964
Depreciation, including discontinued operations		26,621			25,672			101,618			103,940

EBITDA		118,405			77,349			303,584			245,365
Redeemable and other noncontrolling interest in income		99			165			413			1,168
Net gain on sales		(53,856	)		(14,489	)		(62,136	)		(14,489	)
Dividends on preferred stock		911			911			3,645			7,655
Other expenses		—			—			15,000			402
Net gain on sale of unconsolidated entities		—			(2,022	)		(6,025	)		(4,270	)
Redemption related to preferred stock issuance cost		—			—			—			3,771

Adjusted EBITDA	$	65,559		$	61,914		$	254,481			239,602

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 community 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 12/31/2012			Quarter Ended 12/31/2011			Twelve Months Ended			Twelve Months Ended
Net income available to common shareholders	$	73,805		$	33,574		$	133,499		$	66,461
Interest, including discontinued operations		17,979			18,103			68,467			74,964
Depreciation, including discontinued operations		26,621			25,672			101,618			103,940
Redeemable and other noncontrolling interest in income		99			165			413			1,168
Net gain on sales		(53,856	)		(14,489	)		(62,136	)		(14,489	)
Net gain on sale of unconsolidated entities		—			(2,022	)		(6,025	)		(4,270	)
Dividends on preferred stock		911			911			3,645			7,655
General and administrative expense		5,696			5,697			22,848			21,768
Other expenses		—			—			15,000			402
Redemption related to preferred stock issuance cost		—			—			—			3,771

NOI	$	71,255		$	67,611		$	277,329		$	261,370

Less Non Same-Store NOI		7,629			7,674			30,096			29,051

Same-Store NOI	$	63,626		$	59,937		$	247,233		$	232,319

Page 19

BRE PROPERTIES INC /MD/ - FORM 8-K - EX-99.2 - SUPPLEMENTAL FINANCIAL DATA - February 4, 2013

Attached files

BRE PROPERTIES INC /MD/ Reports