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

Attached files

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8-K - FORM 8-K - BRE PROPERTIES INC /MD/	d342994d8k.htm
EX-99.1 - PRESS RELEASE - BRE PROPERTIES INC /MD/	d342994dex991.htm

Exhibit 99.2

LOGO

BRE Properties, Inc.

First Quarter 2012

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

—Same-Store Operating Expense Summary and Joint Venture Disclosure		7

—Sequential "Same-Store" Operating Data		8

—Summary of Revenue and Occupancy Changes		9

—Operating, Renewal and Leasing Metrics		10

Debt Summary		11

Development Communities and Land Held for Development		12

Exhibit A—Share Analysis		13

Exhibit B—Non-GAAP Financial Measure Reconciliations and Definitions		14-15

"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

First Quarter 2012

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

Selected Financial Results


	Quarter ending March 31,
	2012		2011
Total revenues ⁽¹⁾	$	96,944	$	88,808
Total real estate expenses ⁽¹⁾	$	30,970	$	28,704
G&A expense	$	5,847	$	5,234
EBITDA ⁽²⁾	$	61,374	$	57,225
Interest expense	$	17,218	$	19,748
Net income	$	18,108	$	9,645
Funds from operations ⁽²⁾	$	43,635	$	34,782
Net income per share ⁽³⁾	$	0.24	$	0.15
FFO per share ^{(2), (3)}	$	0.57	$	0.53

Same-Store Operating Results


	Quarter ending March 31,
	2012		2011
Revenue growth (%)		5.8%		1.5%	⁽⁷⁾
Expense growth (%)		3.9%		0.4%	⁽⁷⁾
NOI growth (%)		6.7%		2.0%	⁽⁷⁾
Operating margin		68.6%		68.0%
Occupancy (avg. physical)		95.3%		95.2%
Annualized turnover ratio		55.3%		53.9%

Financial Metrics


	Quarter ending March 31,
	2012		2011
Debt-to-EBITDA		6.7x		8.0x
Debt plus preferred stock-to-EBITDA		6.7x		8.0x
Debt-to-total market capitalization		29.6%		36.0%
Debt-to-gross assets		40.1%		47.6%
Secured debt-to-gross assets		18.0%		20.9%
Interest coverage ratio ⁽⁴⁾		2.8x		2.5x
Fixed charge coverage ratio ⁽⁴⁾		2.6x		2.3x

Non Same-Store Operating Results


	Quarter ending March 31,
	2012			2011
Revenues	$	6,764		$	3,494
NOI	$	4,451		$	2,361
Occupancy (avg. physical)		95.3	%		68.0	%
Gross asset value	$	294,293		$	145,614
Homes		1,362			930	⁽⁵⁾

Capitalization


BRE common share price, 12/31/11	$	50.48
BRE common share price, 3/31/12	$	50.55
Common shares—Outstanding Period end (excluding dilutive equity awards)		76,679
Total funded debt	$	1,654,675
Preferred equity (liquidation value)	$	53,993
Common equity (at market)	$	3,876,123
Total market capitalization	$	5,584,791
Total assets, gross at 3/31/11	$	4,124,654

Community Information

As of March 31, 2012


	Communities		Homes		NOI % ⁽⁶⁾
Operating:
Wholly or majority owned
Same-store		71		19,974		92	%
Non same-store		5		1,362		7	%

Total		76		21,336		99	%
Joint venture		11		3,592		1	%
Development Pipeline:
Construction in progress		4		1,260
Land under 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 B 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 Q1'12 non-same-store homes present as of Q1'11.

(6)	Represents percentage of total NOI for the three months ended March 31, 2012.

(7)	Revenue, expense and NOI represent Q1'11 same store pool.

Page 1

BRE Properties, Inc.

Consolidated Balance Sheets

First Quarter 2012

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


	March 31, 2012			December 31, 2011
ASSETS
Real estate portfolio:
Direct investments in real estate:
Investments in rental communities	$	3,613,317		$	3,607,045
Construction in progress		279,313			246,347
Less: accumulated depreciation		(753,904	)		(729,151	)

		3,138,726			3,124,241

Equity in real estate joint ventures:
Investments		62,852			63,313
Land under development		104,108			101,023

Total real estate portfolio		3,305,686			3,288,577
Cash		7,280			9,600
Other assets		57,784			54,444

TOTAL ASSETS	$	3,370,750		$	3,352,621

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Unsecured senior notes	$	690,018		$	724,957
Unsecured line of credit		222,000			129,000
Mortgage loans payable		742,657			808,714
Accounts payable and accrued expenses		59,432			63,273

Total liabilities		1,714,107			1,725,944

Redeemable and other noncontrolling interests		8,107			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 March 31, 2012 and December 31, 2011, respectively.		22			22
Common stock, $0.01 par value, 100,000,000 shares authorized. Shares issued and outstanding: 76,679,462 and 75,556,167 at March 31, 2012 and December 31, 2011, respectively.		767			756
Additional paid-in capital		1,647,747			1,609,671

Total shareholders' equity		1,648,536			1,610,449

TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	$	3,370,750		$	3,352,621

Page 2

BRE Properties, Inc.

Consolidated Statements of Income

Quarters Ended March 31, 2012 and 2011

(Unaudited, dollar and share amounts in thousands)


	Quarter ended 3/31/12		Quarter ended 3/31/11
REVENUES
Rental income	$	93,201	$	85,623
Ancillary income		3,743		3,185

Total revenues		96,944		88,808

EXPENSES
Real estate	$	30,970	$	28,704
Provision for depreciation		25,032		23,950
Interest		17,218		19,748
General and administrative		5,847		5,234
Other expenses ⁽¹⁾		—		143

Total expenses		79,067		77,779
Other income		520		605
Net income before noncontrolling interests, partnership income and discontinued operations		18,397		11,634
Income from unconsolidated entities		727		640

Income from continuing operations		19,124		12,274
Discontinued operations:
Discontinued operations, net ⁽²⁾		—		659

Income from discontinued operations		—		659
NET INCOME	$	19,124	$	12,933
Redeemable and other noncontrolling interest in income		105		335
Dividends attributable to preferred stock		911		2,953

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	18,108	$	9,645

Net income per common share—basic	$	0.24	$	0.15

Net income per common share—diluted	$	0.24	$	0.15

Weighted average shares outstanding—basic⁽³⁾		76,000		64,890

Weighted average shares outstanding—diluted ⁽³⁾		76,380		65,305

(1)	For the quarter ended March 31, 2011, other expenses includes 143,000 related to acquisition costs.

(2)	For 2011, includes two communities sold during 2011.


	Quarter ended 3/31/12		Quarter ended 3/31/11
Rental and ancillary income		—	$	1,796
Real estate expenses		—		(686	)
Provision for depreciation		—		(451	)

Income from discontinued operations, net		—	$	659

(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)


	Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30 2011		Mar. 31, 2011
REVENUES
Rental income	$	93,201	$	92,337	$	91,340	$	88,207	$	85,623
Ancillary income		3,743		3,652		3,555		3,484		3,185

Total revenues		96,944		95,989		94,895		91,691		88,808
EXPENSES
Real estate	$	30,970	$	30,263	$	30,887	$	29,358	$	28,704
Provision for depreciation		25,032		25,672		25,472		27,481		23,950
Interest		17,218		18,103		18,374		18,739		19,748
General and administrative		5,847		5,697		5,678		5,159		5,234
Other expenses		—		—		149		111		143

Total expenses		79,067		79,735		80,560		80,848		77,779
Other income		520		657		677		597		605

Income from continuing operations and discontinued operations		18,397		16,911		15,012		11,440		11,634
Income from unconsolidated entities		727		726		791		731		640
Net gain on sale of unconsolidated entities		—		2,022		2,248		—		—

Income from continuing operations		19,124		19,659		18,051		12,171		12,274
Discontinued operations:
Discontinued operations, net ⁽¹⁾		—		502		645		605		659
Net gain on sales of discontinued operations		—		14,489		—		—		—

Income from discontinued operations		—		14,991		645		605		659

NET INCOME	$	19,124	$	34,650	$	18,696	$	12,776	$	12,933
Redeemable and other noncontrolling interest in income		105		165		332		335		335
Redemption related preferred stock issuance cost		—		—		155		3,616		—
Dividends attributable to preferred stock		911		911		1,138		2,653		2,953

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	18,108	$	33,574	$	17,071	$	6,172	$	9,645

Net income per common share—basic	$	0.24	$	0.45	$	0.23	$	0.09	$	0.15

Net income per common share—diluted	$	0.24	$	0.44	$	0.23	$	0.09	$	0.15

Weighted average shares outstanding—basic ⁽²⁾		76,000		75,415		74,965		70,025		64,890

Weighted average shares outstanding—diluted ⁽²⁾		76,380		75,830		75,390		70,285		65,305

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


	Mar. 31, 2012		Dec. 31, 2011			Sept. 30, 2011			June 30 2011			Mar. 31, 2011
Rental and ancillary income		—	$	919		$	1,752		$	1,771		$	1,796
Real estate expenses		—		(417	)		(648	)		(711	)		(686	)
Provision for depreciation		—		—			(459	)		(455	)		(451	)

Income from discontinued operations, net		—	$	502		$	645		$	605		$	659

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

Page 4

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

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


CALCULATION OF FFO	Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			Mar. 31, 2011
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	18,108		$	33,574		$	17,071		$	6,172		$	9,645
Add back/ exclude:
Depreciation from continuing operations		25,032			25,672			25,472			27,481			23,950
Depreciation from discontinued operations		—			—			459			455			451
Redeemable and other noncontrolling interest in income		105			165			332			335			335
Depreciation from unconsolidated entities		495			512			519			514			506
Net (gain) on sales from unconsolidated entity		—			(2,022	)		(2,248	)		—			—
Net (gain) on sales of discontinued operations		—			(14,489	)		—			—			—
Less: Other noncontrolling interests in income not convertible to common		(105	)		(105	)		(105	)		(105	)		(105	)

FUNDS FROM OPERATIONS ⁽¹⁾	$	43,635		$	43,307		$	41,500		$	34,852		$	34,782

Weighted average shares and equivalents outstanding—diluted		76,440			76,100			76,000			70,900			65,920

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

(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 B for further definition.


NON OPERATING EXPENSE ITEMS INCLUDED IN FFO	Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 2011		Mar. 31, 2011
Acquisition costs		—		—	$	149	$	111	$	143

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	$	0.00	$	0.05	$	0.00


CAPITAL EXPENDITURES	Mar. 31, 2012		Dec. 31, 2011		Sep. 30 2011		June 30, 2011		Mar. 31, 2011
Recurring capital expenditures	$	2,537	$	6,033	$	5,183	$	4,990	$	4,956

Average apartment homes in period		21,336		21,654		21,946		21,622		21,423
Capital expenditures per apartment home in period	$	119	$	279	$	236	$	231	$	231
Capital expenditures per apartment home-trailing four quarters	$	865	$	977	$	1,028	$	1,051	$	1,120
Revenue enhancing rehabilitation and other	$	3,760	$	6,982	$	3,756	$	3,472	$	1,659

Page 5

BRE Properties, Inc.

"Same-Store" Markets Summary

For the Quarters ended March 31, 2012 and 2011

(Dollar amounts in thousands)


					Revenues							Expenses
California	No. of Communities		No. of Homes		Q1'12		Q1'11		% Change			Q1'12		Q1'11		% Change
San Diego		14		4,152	$	18,812	$	18,306		2.8	%	$	5,542	$	5,419		2.3	%
Inland Empire		5		1,173		4,891		4,762		2.7	%		1,536		1,358		13.1	%
Orange County		11		3,349		14,889		14,232		4.6	%		4,811		4,668		3.1	%
Los Angeles		13		3,047		15,542		14,609		6.4	%		5,251		5,181		1.4	%
San Francisco Bay Area		12		3,495		18,873		17,235		9.5	%		5,207		5,131		1.5	%

Subtotal; California		55		15,216	$	73,007	$	69,144		5.6	%	$	22,347	$	21,757		2.7	%

Washington
Seattle		13		3,456		12,981		12,011		8.1	%		4,435		4,035		9.9	%
Non-Core Markets ⁽¹⁾		3		1,302		3,812		3,708		2.8	%		1,429		1,360		5.1	%

Total Same-Store ⁽²⁾		71		19,974	$	89,800	$	84,863		5.8	%	$	28,211	$	27,152		3.9	%


					Net Operating Income
California	No. of Communities		No. of Homes		Q1'12		Q1'11		% Change			% of Total
San Diego		14		4,152	$	13,270	$	12,887		3.0	%		21.5	%
Inland Empire		5		1,173		3,355		3,404		-1.4	%		5.4	%
Orange County		11		3,349		10,078		9,564		5.4	%		16.4	%
Los Angeles		13		3,047		10,291		9,428		9.2	%		16.7	%
San Francisco Bay Area		12		3,495		13,666		12,104		12.9	%		22.2	%

Subtotal; California		55		15,216	$	50,660	$	47,387		6.9	%		82.2	%

Washington
Seattle		13		3,456		8,546		7,976		7.1	%		13.9	%
Non-Core Markets (1)		3		1,302		2,383		2,348		1.5	%		3.9	%

Total Same-Store (2)		71		19,974	$	61,589	$	57,711		6.7	%		100.0	%


							Net Operating Income					Avg. Physical Occupancy			Gross Carrying Value
"Non Same-Store" Summary	No. of Communities			No. of Homes			Q1'12			Q1'11		Q1'12			Q1'12
Acquired communities (3)		3			652		$	2,086		$	316		95.4	%	$	171,536
Lease up communities (4)		1			270			1,062			804		95.1	%		89,488
Rehabilitation communities (5)		1			440			1,303			1,241		95.3	%		33,268
Joint venture income ⁽⁶⁾		11			3,592			727			640
Commercial and other ⁽⁷⁾		n/a			n/a			(66	)		32
Other income		n/a			n/a			520			605
Discontinued operations ⁽⁸⁾		2			634			—			1,110

Total Non Same-Store		18			5,588		$	5,632		$	4,748		95.3	%	$	294,293

Less communities Sold 2011		(2	)		(634	)
Total All Homes / NOI		87			24,928		$	67,221		$	62,459

(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 one community fully delivered and under lease up.

(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 7 for a reconciliation of the components of BRE's share of joint venture net income.

(7)

Consists of NOI from retail tenants associated with our operating communities and NOI from commercial communities that will later be developed as multi-family and other real estate expenses. For the three months ended March 31, 2012 other real estate expenses exceeded the NOI from retail and commercial.

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

Page 6

BRE Properties, Inc.

Same Store Operating Expense Summary and Joint Venture Disclosure

(Dollar amounts in thousands)

SAME-STORE OPERATING EXPENSES (19,974 homes)


Quarter Ended March 31, 2012	Q1'12		Q1'11		$ Change			% Change			% of Q1 '12 Operating Expenses
Property taxes	$	8,556	$	7,936	$	620			7.8	%		30.3	%
Insurance		1,183		1,030		153			14.9	%		4.2	%
Utilities		2,018		2,087		(69	)		-3.3	%		7.2	%
Property management fees ⁽¹⁾		2,917		2,722		195			7.2	%		10.3	%
Other operating expenses ⁽²⁾		13,537		13,377		160			1.2	%		48.0	%

Total operating expenses	$	28,211	$	27,152	$	1,059			3.9	%		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 Ended March 31, 2012


Joint Ventures	Communities		Regional Breakdown	Homes ⁽³⁾		BRE equity investment		BRE share of JV Debt
Relationship 1—15% BRE equity ownership		9	Phx. (3) Den. (6)		3,104	$	42,596	$	—
Relationship 2—35% BRE equity ownership		2	Phx. (1) Sac. (1)		488		20,256		—

Total		11			3,592	$	62,852	$	—


BRE share	Q1'12		Q1'11

Revenues	$	1,892	$	2,005
Expenses		670		745

Net Operating Income		1,222		1,260
Depreciation		495		506
Interest		—		114

Net Income	$	727	$	640
Third party management fees earned	$	420	$	446

(3)

During the quarter ended December 31, 2011, a joint venture community with 264 homes 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 of 2011. During the quarter ended September 30, 2011, a joint venture community with 224 homes 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 of 2011.

Page 7

BRE Properties, Inc.

Sequential "Same-Store" Multifamily Markets Summary

Last five quarters

REVENUES


California	Q1'12		Q4'11		Q3'11		Q2'11		Q1'11
San Diego		-0.1%		-0.3%		1.9%		1.2%		0.7%
Inland Empire		0.1%		1.0%		1.2%		0.4%		-0.4%
Orange County		0.5%		1.3%		0.5%		2.3%		-0.4%
Los Angeles		0.7%		2.2%		1.9%		1.4%		0.5%
San Francisco Bay Area		2.5%		0.7%		3.0%		3.0%		1.0%

Subtotal; California		0.9%		0.9%		1.8%		2.0%		0.4%

Washington
Seattle		1.8%		0.4%		2.2%		3.4%		1.1%
Non-Core Markets ⁽¹⁾		-0.2%		0.9%		0.3%		1.7%		1.7%

Total Same Store ⁽³⁾		1.0%		0.8%		1.8%		2.1%		0.6%


EXPENSES ⁽²⁾

California	Q1'12		Q4'11		Q3'11		Q2'11		Q1'11
San Diego		4.1%		-4.2%		1.1%		1.4%		5.9%
Inland Empire		0.2%		-4.0%		5.8%		11.1%		-6.1%
Orange County		0.3%		-0.4%		4.2%		-0.9%		0.7%
Los Angeles		8.5%		-10.0%		9.8%		-5.5%		0.6%
San Francisco Bay Area		3.4%		-0.9%		1.6%		-2.6%		4.9%

Subtotal; California		3.8%		-4.0%		4.2%		-1.1%		2.4%

Washington
Seattle		-2.8%		-0.9%		2.0%		11.8%		-4.4%
Non-Core Markets ⁽¹⁾		4.3%		1.0%		-1.2%		0.9%		0.1%

Total Same Store ⁽³⁾		2.7%		-3.3%		3.6%		0.9%		1.2%


NET OPERATING INCOME

California	Q1'12		Q4'11		Q3'11		Q2'11		Q1'11
San Diego		-1.7%		1.3%		2.2%		1.1%		-1.4%
Inland Empire		0.0%		3.5%		-0.9%		-3.8%		2.1%
Orange County		0.5%		2.1%		-1.2%		3.9%		-1.0%
Los Angeles		-2.8%		9.0%		-2.0%		5.2%		0.5%
San Francisco Bay Area		2.2%		1.3%		3.6%		5.4%		-0.6%

Subtotal; California		-0.4%		3.1%		0.8%		3.2%		-0.5%

Washington

Seattle		4.4%		1.2%		2.4%		-0.9%		4.2%
Non-Core Markets ⁽¹⁾		-2.7%		0.9%		1.2%		2.1%		2.6%

Total Same Store ⁽³⁾		0.2%		2.8%		1.0%		2.6%		0.2%

(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 19,974 homes for all periods shown.

Page 8

BRE Properties, Inc.

Summary of Revenue and Occupancy Changes—"Same-Store" Communities

For the period ending March 31, 2012

Q1'12 vs. Q4'11 Change


			Average Revenue per Home ⁽¹⁾							Financial Occupancy ⁽²⁾									Rental Revenue
	homes		Q1'12		Q4'11		% Change			Q1'12			Q4'11			% Change			Q1'12		Q4'11		% Change
San Diego		4,152	$	1,586	$	1,579		0.5	%		95.2	%		95.7	%		-0.5	%	$	18,812	$	18,825		-0.1	%
Inland Empire		1,173		1,463		1,450		0.9	%		95.0	%		95.8	%		-0.8	%		4,891		4,889		0.1	%
Orange County		3,349		1,557		1,543		0.9	%		95.2	%		95.6	%		-0.4	%		14,889		14,819		0.5	%
Los Angeles		3,047		1,779		1,747		1.8	%		95.6	%		96.6	%		-1.0	%		15,542		15,430		0.7	%
San Francisco Bay Area		3,495		1,889		1,861		1.5	%		95.3	%		94.4	%		0.9	%		18,873		18,415		2.5	%
Seattle		3,456		1,310		1,298		0.9	%		95.6	%		94.7	%		0.9	%		12,981		12,748		1.8	%
Non Core Markets		1,302		1,032		1,037		-0.5	%		94.6	%		94.3	%		0.3	%		3,812		3,818		-0.2	%

Same Store		19,974	$	1,573	$	1,556		1.1	%		95.3	%		95.4	%		-0.1	%	$	89,800	$	88,944		1.0	%

Q1'12 vs. Q1'11 Change


			Average Revenue per Home ⁽¹⁾							Financial Occupancy ⁽²⁾									Rental Revenue
	homes		Q1'12		Q1'11		% Change			Q1'12			Q1'11			% Change			Q1'12		Q1'11		% Change
San Diego		4,152	$	1,586	$	1,545		2.7	%		95.2	%		95.1	%		0.1	%	$	18,812	$	18,306		2.8	%
Inland Empire		1,173		1,463		1,417		3.3	%		95.0	%		95.5	%		-0.5	%		4,891		4,762		2.7	%
Orange County		3,349		1,557		1,494		4.2	%		95.2	%		94.8	%		0.4	%		14,889		14,232		4.6	%
Los Angeles		3,047		1,779		1,695		4.9	%		95.6	%		94.3	%		1.3	%		15,542		14,609		6.4	%
San Francisco Bay Area		3,495		1,889		1,732		9.0	%		95.3	%		94.9	%		0.4	%		18,873		17,235		9.5	%
Seattle		3,456		1,310		1,217		7.6	%		95.6	%		95.2	%		0.4	%		12,981		12,011		8.1	%
Non Core Markets		1,302		1,032		991		4.1	%		94.6	%		95.8	%		-1.2	%		3,812		3,708		2.8	%

Same Store		19,974	$	1,573	$	1,492		5.4	%		95.3	%		94.9	%		0.4	%	$	89,800	$	84,863		5.8	%

(1)

Average revenue per home includes rental and ancillary income earned on occupied homes during the period. Ancillary income per occupied home totals approximately $61 per home per month for the three months ended March, 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 9

BRE communities, Inc.

"Same-Store" Operating Metrics

As of March 31, 2012 and 2011


	No. of Homes		Occupancy ⁽²⁾				Turnover Ratio ⁽³⁾
California	No. of Homes		Q1' 12		Q1 '11		Q1' 12		Q1 '11
San Diego		4,152		94.9%		95.1%		63%		61%
Inland Empire		1,173		95.1%		95.5%		51%		51%
Orange County		3,349		95.3%		94.9%		57%		64%
Los Angeles		3,047		95.8%		94.6%		59%		49%
San Francisco Bay Area		3,495		95.5%		95.4%		55%		49%

Subtotal; California		15,216		95.3%		95.1%		58%		56%

Washington
Seattle		3,456		95.7%		95.5%		42%		46%
Non-Core Markets ⁽¹⁾		1,302		94.5%		96.0%		55%		55%

Total/Average Same Store ⁽⁴⁾		19,974		95.3%		95.2%		55%		54%

(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 the annualized number of homes turned over for the period, divided by the number of homes in the region.

(4)	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
California	Q1'12		New Leases Effective ⁽⁵⁾		Previous Resident Effective ⁽⁶⁾		% Change			Q1'12		Renewal Effective ⁽⁵⁾		Expiring Effective ⁽⁷⁾		% Change			Q1'12		Current Effective ⁽⁵⁾		Prior Effective		% Change
San Diego		640	$	1,452	$	1,498		-3.1	%		468	$	1,567	$	1,519		3.2	%		1,108	$	1,500	$	1,507		-0.4	%
Inland Empire		142		1,399		1,393		0.5	%		157		1,432		1,398		2.4	%		299		1,416		1,395		1.5	%
Orange County		505		1,522		1,500		1.5	%		545		1,499		1,461		2.6	%		1,050		1,510		1,479		2.1	%
Los Angeles		435		1,790		1,737		3.0	%		368		1,790		1,721		4.0	%		803		1,790		1,730		3.5	%
San Francisco Bay Area		475		1,868		1,767		5.7	%		437		1,845		1,737		6.2	%		912		1,857		1,752		6.0	%

Subtotal; California		2,197	$	1,621	$	1,597		1.5	%		1,975	$	1,641	$	1,579		3.9	%		4,172	$	1,630	$	1,588		2.6	%

Washington
Seattle		398		1,287		1,210		6.4	%		461		1,291		1,214		6.3	%		859		1,289		1,212		6.4	%
Non-Core Markets		189		953		980		-2.8	%		225		1,019		993		2.5	%		414		989		987		0.1	%

Total Same Store ⁽⁸⁾		2,784	$	1,528	$	1,500		1.9	%		2,661	$	1,527	$	1,466		4.2	%		5,445	$	1,528	$	1,483		3.0	%

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

(6)	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.

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

(8)	The Q1'12 total same-store pool consists of 19,974 homes.

Page 10

BRE Properties, Inc.

Debt Summary as of March 31, 2012

(Dollar amounts in thousands)

DEBT MATURITY SCHEDULE


	Secured Debt				Unsecured Debt							Weighted Avg. Rate⁽¹⁾			% of Debt
	Amortization		Balloon		Floating			Fixed		Total		Weighted Avg. Rate⁽¹⁾			% of Debt
Year
2012	$	685	$	—	$	—		$	—	$	685		5.36	%		0.0	%
2013		872		29,639		—			40,018		70,529		6.48	%		4.3	%
2014		3,839		—		—			50,000		53,839		4.82	%		3.3	%
2015		7,962		—		222,000	⁽²⁾⁽³⁾		—		229,962		3.26	%		13.9	%
2016		9,041		—		—			—		9,041		5.65	%		0.5	%
2017		9,307		—		—			300,000		309,307		5.61	%		18.7	%
2018		9,853		—		—			—		9,853		5.65	%		0.6	%
2019		6,492		317,975		—			—		324,467		5.60	%		19.6	%
2020		3,346		343,646		—			—		346,992		5.62	%		21.0	%
2021		—		—		—			300,000		300,000		5.31	%		18.1	%

Total	$	51,397	$	691,260	$	222,000		$	690,018	$	1,654,675		5.25	%		100	%

WEIGHTED AVERAGE COST OF DEBT


	Balance			Weighted Avg. Term		Weighted Avg. Rate⁽¹⁾			Percentage Total Debt
Fixed Rate
Unsecured	$	690,018			6.25		5.51	%		41.7	%
Secured		742,657			6.79		5.61	%		44.9	%

	$	1,432,675			6.49		5.56	%		86.6	%
Floating Rate
Unsecured		222,000	⁽²⁾⁽³⁾		3.01		3.26	%		13.4	%
Total debt	$	1,654,675			6.06		5.24	%		100.0	%

CAPITALIZED INTEREST


	Q1 2012		Q1 2011
Capitalized Interest	$	4,848	$	2,732

SENIOR UNSECURED DEBT RATING

As of May 1, 2012


Moody's	Baa2	(stable)
Standard & Poor's	BBB	(stable)
Fitch	BBB	(positive)

SUMMARY OF COMPLIANCE—Senior Unsecured Notes


	Requirement		Actual
Total Debt to Gross Assets		<60%		40%
Debt Service Test		>1.5		2.72
Total Secured Debt to Total Assets		<40%		18%
Total Unecumbered Assets to Unsecured Debt		>1.5		3.34

SUMMARY OF COMPLIANCE—Line of Credit


	Requirement		Actual
Leverage Ratio		<60%		35%
Maximum Secured Indebtness		<40%		15%
Minimum Unsecured Leverage		>1.65		3.80
Minimum Fixed Charge Coverage		>1.5		2.60

SUMMARY OF PREFERRED SHARES


	Q1 2012
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 120 bp, maturing on April 3, 2015.

(3) During the quarter ended March 31, 2012, we entered into a $750 million unsecured line of credit (the “Credit Agreement”) . The Credit Agreement has an initial term of 39 months, terminates on April 3, 2015 and replaces our previous $750 million unsecured line of credit. Based on our current ratings the new facility it priced at LIBOR plus 120 bps plus an annual 20 bps facility fee on the capacity of the facility.

Page 11

BRE Properties, Inc.

Development Summary

March 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⁾
Lawrence Station
Sunnyvale, CA		336	$	75.1	$	110.0	$	34.9		Wrap		Q2'12		Q1'13
Aviara ⁽²⁾
Mercer Island, WA		166		16.5		44.5		28.0		Podium		Q1'13		Q2'13
Solstice
Sunnyvale, CA		280		47.5		121.9		74.4		Podium		Q4'13		Q1'14
Wilshire La Brea
Los Angeles, CA		478		140.2		277.3		137.1		Podium		Q4'13		Q4'14

Total CIP		1,260	$	279.3	$	553.7	$	274.4

LAND UNDER DEVELOPMENT ⁽³⁾

Number
of Homes

Cost
Incurred

Estimated
Cost ⁽⁴⁾

Balance
to Fund

Product
Type

Estimated
Start
Date

Mission Bay ⁽⁶⁾

San Francisco, CA

360

48.7

TBR

Podium

2H '12

Pleasanton I

Pleasanton, CA

254

19.0

TBR

Garden

TBD

Park Viridian II ⁽⁵⁾

Anaheim, CA

400

36.4

TBR

Garden

TBD

Total Land Owned

1,014

104.1

423.9

319.8

LAND UNDER CONTRACT ⁽⁷⁾

Number
of Homes

Cost
Incurred ⁽⁸⁾

Estimated
Cost

Balance
to Fund

Product
Type

Redwood City

Redwood City, CA

263

3.8

TBR

Podium

Pleasanton II

Pleasanton, CA

251

2.0

TBR

Garden

Walnut Creek BART

Walnut Creek, CA

358

10.5

TBR

Podium

Total

872

16.3

319.6

303.3

(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 community 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 homes (185 homes were added).

(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 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 communities. Predevelopment costs associated with this site total $3.5 million and are recorded in Other assets.

Page 12

Exhibit A

BRE Properties, Inc.

Share Analysis as of March 31, 2012

(Dollar and share amounts in thousands)

SUMMARY OF COMMON SHARES


Weighted Average	Qtr. Ended 3/31/2012			Qtr. Ended 12/31/2011			Qtr. Ended 9/30/2011			Qtr. Ended 6/30/2011			Qtr. Ended 3/31/2011
Weighted average shares outstanding ⁽¹⁾		76,000			75,415			74,965			70,025			64,890
Weighted average OP units		60			270			610			615			615
Dilutive effect of stock based awards		380			415			425			260			415

Diluted shares—FFO		76,440			76,100			76,000			70,900			65,920
Less: Anti-dilutive OP Units ⁽²⁾		(60	)		(270	)		(610	)		(615	)		(615	)
Less: Anti-dilutive stock based awards ⁽²⁾		—			—			—			—			—

Diluted shares—EPS⁽³⁾		76,380			75,830			75,390			70,285			65,305

Ending	As of 3/31/2012			As of 12/31/2011			As of 9/30/2011			As of 6/30/2011			As of 3/31/2011
Shares outstanding at end of period		76,679			75,556			75,266			74,697			65,341
OP units at end of period		—			160			606			615			615
Dilutive effect of stock based awards		380			446			401			413			407

Total		77,059			76,162			76,273			75,725			66,363

SUMMARY OF PREFERRED SHARES

	Qtr. Ended 3/31/2012			Qtr. Ended 12/31/2011			Qtr. Ended 9/30/2011			Qtr. Ended 6/30/2011			Qtr. Ended 3/31/2011
6.75% Series C, $25 per share liquidation preference		—			—			—			—			4,000
6.75% Series D, $25 per share liquidation preference		2,160			2,160			2,160			3,000			3,000

		2,160			2,160			2,160			3,000			7,000

(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 13

Exhibit B

BRE Properties, Inc.

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.


	Quarter Ended 3/31/2012			Quarter Ended 3/31/2011
Net income available to common shareholders	$	18,108		$	9,645
Depreciation from continuing operations		25,032			23,950
Depreciation from discontinued operations		—			451
Redeemable and other noncontrolling interest in income		105			335
Depreciation from unconsolidated entities		495			506
Less: Redeemable noncontrolling interest in income not convertible into common shares		(105	)		(105	)

Funds from operations	$	43,635		$	34,782

Diluted shares outstanding—EPS ⁽¹⁾		76,380			65,305
Net income per common share—diluted	$	0.24		$	0.15

Diluted shares outstanding—FFO ⁽¹⁾		76,440			65,920
FFO per common share—diluted	$	0.57		$	0.53

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

Page 14

Exhibit B, continued

BRE Properties, Inc.

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 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 3/31/2012		Quarter Ended 3/31/2011
Net income available to common shareholders	$	18,108	$	9,645
Interest, including discontinued operations		17,218		19,748
Depreciation, including discontinued operations		25,032		24,401

EBITDA		60,358		53,794
Redeemable and other noncontrolling interest in income		105		335
Dividends on preferred stock		911		2,953
Other expenses		—		143

Adjusted EBITDA	$	61,374	$	57,225

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 3/31/2012		Quarter Ended 3/31/2011
Net income available to common shareholders	$	18,108	$	9,645
Interest, including discontinued operations		17,218		19,748
Depreciation, including discontinued operations		25,032		24,401
Redeemable and other noncontrolling interest in income		105		335
Dividends on preferred stock		911		2,953
General and administrative expense		5,847		5,234
Other expenses		—		143

NOI	$	67,221	$	62,459

Less Non Same-Store NOI		5,632		4,748

Same-Store NOI	$	61,589	$	57,711

Page 15

BRE PROPERTIES INC /MD/ - FORM 8-K - EX-99.2 - SUPPLEMENTAL FINANCIAL DATA - May 1, 2012

Attached files

BRE PROPERTIES INC /MD/ Reports