SAN FRANCISCO, Aug. 4 /PRNewswire-FirstCall/ -- BRE Properties,
Inc. (NYSE:BRE) today reported operating results for the quarter
ended June 30, 2009. All per share results are reported on a fully
diluted basis. Funds from operations (FFO), the generally accepted
measure of operating performance for real estate investment trusts,
totaled $37.2 million, or $0.70 per share, for second quarter 2009,
as compared with $35.2 million, or $0.67 per share, for the quarter
ended June 30, 2008. FFO for the 2009 and 2008 periods reflected
the net impact of the adoption of APB-14-1, totaling $1.7 million,
or $0.03 per share, and $1.6 million, or $0.03 per share,
respectively. FFO for the second quarter 2009 also included
nonroutine income of $2.0 million, or $0.04 per share, from a net
gain on the retirement of debt. Excluding nonroutine income and the
APB-14-1-related noncash interest charge, core FFO per share was
flat on a year-over-year basis. (A reconciliation of net income
available to common shareholders to FFO is provided at the end of
this release.) Net income available to common shareholders for the
second quarter totaled $28.2 million, or $0.54 per share, as
compared with $14.4 million, or $0.28 per share, for the same
period 2008. The second quarter 2009 results included a gain on
sale of real estate of approximately $14.3 million, or $0.28 per
share, and the nonroutine income item cited previously. Total
revenues from continuing operations for the quarter were $86.3
million, as compared with $86.1 million a year ago. Adjusted EBITDA
for the quarter totaled $57.3 million, as compared with $61.1
million in second quarter 2008. (A reconciliation of net income
available to common shareholders to Adjusted EBITDA is provided at
the end of this release.) Six-Month Period Ended June 30, 2009 For
the year-to-date period, FFO totaled $72.0 million, or $1.37 per
share, as compared with $69.4 million, or $1.31 per share, for the
six-month period in 2008. FFO for the first half of 2009 and 2008
reflected the net impact of APB-14-1, totaling $3.3 million, or
$0.06 per share, and $3.1 million, or $0.06 per share,
respectively. FFO for the six-month period in 2009 also included
the nonroutine income cited previously. Excluding nonroutine income
and the noncash charge related to APB-14-1, core FFO per share
growth was 1.5% year-over-year. Net income available to common
shareholders for the six-month period totaled $41.2 million, or
$0.79 per diluted share, as compared with $27.1 million, or $0.52
per diluted share, for the same period 2008. The 2009 year-to-date
results included the gain on sale and nonroutine income item cited
previously. For the first half of 2009, total revenues from
continuing operations were $172.6 million, as compared with $170.4
million for the same period 2008, representing growth of 1.3%.
Adjusted EBITDA for the six-month period totaled $115.7 million, as
compared with $121.0 million for the same period in 2008. BRE's
year-over-year earnings and FFO results reflected declines in
same-store property-level operating results, which were offset by
income from newly developed and redeveloped properties, a lower
interest rate environment and a reduction in corporate-level
G&A expenses. Same-store net operating income (NOI) declined
6.7%, or $4.0 million, for the quarter, as compared with the same
period in 2008. (A reconciliation of net income available to common
shareholders to NOI is provided at the end of this release.)
Developed properties generated $2.0 million in additional NOI
during the quarter, as compared with second quarter 2008.
Same-Store Property Results BRE defines same-store properties as
stabilized apartment communities owned by the company for at least
five full quarters. Of the 21,485 apartment units owned directly by
BRE, same-store units totaled 19,572 for the quarter. On a
year-over-year basis, overall same-store revenue declined 3.8% for
the quarter. Average same-store market rent for the second quarter
2009 decreased 4.1% to $1,451 per unit, from $1,513 per unit in
second quarter 2008. Physical occupancy levels averaged 93.9%
during second quarter 2009, as compared with 94.3% for the same
period in 2008. Physical occupancy at the end of the second quarter
was 95.2%. Rent concessions in the same-store portfolio totaled
$2.0 million, or nine days rent, for second quarter 2009, as
compared with $880,000, or four days, for the same period 2008. On
a sequential basis, same-store revenue declined 1.7%, expenses
increased 2.2% and NOI decreased 3.4% against first quarter 2009
results. Sequential declines in revenue and NOI were driven by a
reduction in market rents and increased concessions. Same-store
results were impacted primarily by the increasing job losses in the
company's operating markets. In Southern California, unemployment
rates increased to 11.2% in the second quarter 2009 from 10.9% in
the first quarter 2009; the San Francisco Bay area saw unemployment
rates rise to 10.7% in the second quarter, from 10.0% in the
previous quarter; Seattle's sequential unemployment rate increased
to 9.3% from 8.7%. The following table depicts job losses in the
company's core markets over the last 12 months: Core Markets
Same-Store Absolute Job Losses =============== ----------
------------------- 12 months ended 6 months ended # Units % NOI
June 2009 June 2009 ======= ===== ================
=================== San Diego 3,958 22.9% 52,500 34,200
------------------- ----- ---- ------ ------ Inland Empire 3,553
14.6% 75,100 37,200 ------------- ----- ---- ------ ------ Orange
County 2,545 14.3% 71,700 34,500 ------------- ----- ---- ------
------ Los Angeles 2,075 10.8% 183,800 85,800 ----------- -----
---- ------- ------ San Francisco 2,928 19.2% 136,200 79,500
------------- ----- ---- ------- ------ Seattle 3,211 14.1% 65,000
33,200 ------- ----- ---- ------ ------ Total Core Markets 18,270
95.9% 584,300 304,400 ------------------ ------ ---- -------
------- Source of Unemployment and Job Loss Data: U.S. Bureau of
Labor Statistics Community Development Activity During the first
quarter, construction was completed and final units were delivered
at Taylor 28 (197 units) in Seattle, Wash. and Park Viridian (320
units) in Anaheim, Calif. The current physical occupancy at Taylor
28 is 58%; Park Viridian is 52%; leasing velocity has averaged 26
units and 28 units per month, respectively, since the communities
opened. BRE currently has two communities under construction, one
in Seattle, Washington and one in Northern California, with a total
of 566 units, an aggregate projected investment of $176.1 million
and an estimated balance to complete totaling $51.2 million.
Estimated completion dates are first and third quarter 2010,
respectively. BRE owns three land parcels, two in Southern
California and one in Northern California, representing 960 units
of future development, and an estimated aggregate investment of
$455 million upon completion. Dispositions During the quarter, the
company sold a stabilized community in Sacramento, Calif., Overlook
at Blue Ravine (512 units). Sales proceeds totaled approximately
$50.1 million. In connection with the transaction, the company
recorded a gain on sale of approximately $14.3 million, or $0.28
per share, for the quarter. Subsequent to the end of the quarter,
the company sold another stabilized community in Sacramento, Arbor
Pointe (240 units), which was reported as held for sale at June 30,
2009. Sales proceeds totaled approximately $15.4 million. In
connection with the transaction, the company expects to record a
gain on sale of approximately $7.2 million, or $0.14 per share, in
the third quarter. The composite transaction capitalization rate of
these dispositions was approximately 8.5%, calculated on an
annualized trailing three months of property-level NOI. Proceeds
derived from the sales were used to repay the company's unsecured
credit facility. The disposition of these two properties completes
the company's planned exit of the Sacramento market. Over the past
24 months, the company sold eight properties, with a total of 1,756
units, in Sacramento, at a composite capitalization rate of 6.9%,
for total sales proceeds of approximately $194 million, and an
aggregate gain on sale of approximately $73.6 million. Capital
Markets Activity As previously reported, during the second quarter,
the company completed two public tender offers for four series of
senior unsecured notes, retiring $472 million of debt, at an
average 99.62% of par. The transactions resulted in a net loss of
$1.4 million after recognition of unamortized issuance fees and
transaction costs. Also during the quarter, the company repurchased
through open market transactions $40 million of its 4.125%
convertible notes, at an average 89.3% of par, resulting in a net
gain of $3.4 million. Debt Tender Activity & Open Market
Transactions Q2 2009 (Amounts in thousands) Face Bonds Cash % of
Security Value Retired Paid Par -------- -------- ------- ------
------ 7.45% Notes Due 2011 $250,000 $201,455 $201,455 100.0%
--------------- -------- -------- -------- ----- 7.125% Notes Due
2013 130,000 89,982 88,182 98.0% ---------------- ------- ------
------ ---- 5.75% Notes Due 2009 150,000 61,407 61,407 100.0%
--------------- ------- ------ ------ ----- 4.875% Notes Due 2010
150,000 119,421 119,421 100.0% ---------------- ------- -------
------- ----- Subtotal: Debt Tenders 680,000 472,265 470,465 99.6%
-------------- ------- ------- ------- ---- 4.125% Convert. Notes
Due 2012 460,000 40,089 35,809 89.3% --------------- ------- ------
------ ---- Total: All activity $1,140,000 $512,354 $506,275 98.8%
---------- ---------- -------- -------- ---- Accelerated Fee &
Extinguish. Transaction Net Security Gain Costs (Loss)/Gain
-------- ----------- ------------- ------------ 7.45% Notes Due
2011 $- $(1,023) $(1,023) --------------- -- ------- ------- 7.125%
Notes Due 2013 1,800 (1,127) 673 ---------------- ----- ------ ---
5.75% Notes Due 2009 - (294) (294) --------------- --- ---- ----
4.875% Notes Due 2010 - (756) (756) ---------------- --- ---- ----
Subtotal: Debt Tenders 1,800 (3,200) (1,400) -------------- -----
------ ------ 4.125% Convert. Notes Due 2012 4,280 (922) 3,358
--------------- ----- ---- ----- Total: All activity $6,079
$(4,121) $1,958 ---------- ------ ------- ------ Under the
at-the-market equity distribution agreement filed on May 14, 2009,
the company issued 1.5 million shares of common stock in the second
quarter, at an average price of $24.80 per share, with total
proceeds of $37.6 million. Proceeds from the issuance of common
stock were used to repay the company's unsecured credit facility.
Subsequent to the end of the quarter, the company received the
second $310 million advance from the $620 million transaction with
Fannie Mae, which was closed and reported in April. Proceeds were
used to pay down the company's unsecured credit facility. The
current balance of the credit facility is $170 million. Earnings
Outlook The company has adjusted its FFO guidance for the full year
2009 to a range of $2.42 to $2.52 per share, from the previous
range of $2.38 to $2.53. The revised guidance range includes the
nonroutine income of $2.0 million, or $0.04 per share, from the
gain on retirement of debt recorded in the second quarter.
Excluding the nonroutine income item and APB-14-1 noncash interest,
per share core FFO amounts for 2009 are expected to range $2.50 to
$2.60. Guidance for earnings per share (EPS) has been revised to a
range of $1.15 to $1.25, from the previous range of $0.69 to $0.84.
The revised EPS guidance range includes the $2.0 million gain
($0.04 per share) on the retirement of debt and gains on the sales
of assets totaling $21.5 million ($0.42 per share) that have closed
through the date of this release. Q2 2009 Analyst Conference Call
The company will hold a conference call on Wednesday, August 5,
11:00 a.m. Eastern (8:00 a.m. Pacific) to review these results. The
dial-in number to participate in the United States and Canada is
888.290.1473; the international number is 706.679.8398. Enter Conf.
ID# 19624557. A telephone replay of the call will be available for
30 days at 800.642.1687 or 706.645.9291 international, using the
same ID# 19624557. A link to the live webcast of the call will be
posted on http://www.breproperties.com/, in Investors, on the
Corporate Profile page. A webcast replay will be available for one
month following the call. Q3 2009 Earnings Dates The company will
report third quarter 2009 earnings after close of market on Monday,
November 2, 2009, followed by a conference call on Tuesday,
November 3, 2009 at 11:00 a.m. Eastern (8:00 a.m. Pacific). About
BRE Properties BRE Properties, based in San Francisco, Calif., owns
and manages apartment communities convenient to its residents'
work, shopping, entertainment and transit in supply-constrained
Western U.S. markets. BRE directly owns and operates 74 apartment
communities totaling 21,485 units in California, Arizona and
Washington. The company invests in communities through acquisition
and development, and currently has five properties in various
stages of development and construction, totaling 1,526 units, and
joint venture interests in 13 additional apartment communities,
totaling 4,080 units. BRE Properties is a real estate investment
trust (REIT) listed in the S&P MidCap 400 Index. For more
information on BRE Properties, please visit our Web site at
http://www.breproperties.com/. "Safe Harbor" Statement under the
Private Securities Litigation Reform Act of 1995: Except for the
historical information contained herein, this news release contains
forward-looking statements regarding the company's capital
resources, portfolio performance and results of operations, and is
based on the company's current expectations and judgment. You
should not rely on these statements as predictions of future events
because there is no assurance that the events or circumstances
reflected in the statements can be achieved or will occur.
Forward-looking statements are identified by words such as
"believes," "expects," "may," "will," "should," "seeks,"
"approximately," "intends," "plans," "pro forma," "estimates," or
"anticipates" or their negative form or other variations, or by
discussions of strategy, plans or intentions. The following
factors, among others, could affect actual results and future
events: defaults or nonrenewal of leases, increased interest rates
and operating costs, failure to obtain necessary outside financing,
difficulties in identifying properties to acquire and in effecting
acquisitions, failure to successfully integrate acquired properties
and operations, inability to dispose of assets that no longer meet
our investment criteria under applicable terms and conditions,
risks and uncertainties affecting property development and
construction (including construction delays, cost overruns,
inability to obtain necessary permits and public opposition to such
activities), failure to qualify as a real estate investment trust
under the Internal Revenue Code of 1986, as amended, and increases
in real property tax rates. The company's success also depends on
general economic trends, including interest rates, tax laws,
governmental regulation, legislation, population changes and other
factors, including those risk factors discussed in the section
entitled "Risk Factors" in the company's most recent Annual Report
on Form 10-K as they may be updated from time to time by the
company's subsequent filings with the Securities and Exchange
Commission, or SEC. Do not rely solely on forward-looking
statements, which only reflect management's analysis. The company
assumes no obligation to update this information. For more details,
refer to the company's SEC filings, including its most recent
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. BRE
Properties, Inc. Consolidated Balance Sheets Second Quarter 2009
(Unaudited, dollar amounts in thousands except per share data)
-------------------------------------------------------------- June
30, June 30, ASSETS 2009 2008 (1) ------ ---- ------- Real estate
portfolio: Direct investments in real estate: Investments in rental
properties $3,105,464 $2,853,364 Construction in progress 124,935
271,709 Less: accumulated depreciation (540,165) (474,727) --------
-------- 2,690,234 2,650,346 --------- --------- Equity interests
in and advances to real estate joint ventures: Investments in
rental properties 62,435 62,399 Real estate held for sale, net
8,168 113,034 Land under development 128,762 117,361 -------
------- Total real estate portfolio 2,889,599 2,943,140 Cash 5,848
10,804 Other assets 76,454 65,278 ------ ------ TOTAL ASSETS
$2,971,901 $3,019,222 ---------- ---------- LIABILITIES AND
SHAREHOLDERS' EQUITY ------------------------------------
Liabilities: Unsecured senior notes $948,906 $1,512,209 Unsecured
line of credit 497,000 312,000 Mortgage loans 443,390 152,816
Accounts payable and accrued expenses 62,148 83,272 ------ ------
Total liabilities 1,951,444 2,060,297 --------- ---------
Redeemable noncontrolling interests 26,674 44,682 ------ ------
Shareholders' equity: Preferred Stock, $0.01 par value; 20,000,000
shares authorized: 7,000,000 shares with $25 liquidation preference
issued and outstanding at June 30, 2009 and June 30, 2008 ,
respectively. 70 70 Common stock, $0.01 par value, 100,000,000
shares authorized. Shares issued and outstanding: 52,820,545 and
51,045,125 at June 30, 2009 and June 30, 2008, respectively. 528
510 Additional paid-in capital 993,185 913,663 ------- -------
Total shareholders' equity 993,783 914,243 ------- ------- TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY $2,971,901 $3,019,222
---------- ---------- (1) Balance sheet is restated to reflect the
adoption of APB 14-1 & SFAS No. 160. BRE Properties, Inc.
Consolidated Statements of Income Quarters Ended June 30, 2009 and
2008 (Unaudited, dollar and share amounts in thousands)
-------------------------------------------------- Quarter Quarter
Six months Six months ended ended ended ended REVENUE 6/30/09
6/30/08 6/30/09 6/30/08 ------- ------- ------- ------- -------
Rental income $82,889 $82,606 $165,939 $163,604 Ancillary income
3,368 3,527 6,699 6,808 ----- ----- ----- ----- Total revenue
86,257 86,133 172,638 170,412 EXPENSES -------- Real estate
expenses $27,533 $25,404 $53,910 $50,706 Depreciation 22,368 19,471
43,118 39,138 Interest expense (1) 19,421 23,254 40,443 46,216
General and administrative 4,218 5,378 8,544 10,033 ----- -----
----- ------ Total expenses 73,540 73,507 146,015 146,093 Other
income 1,196 637 1,823 1,231 Net gain from extinguishment of debt
1,958 - 1,958 - ----- --- ----- --- Income before minority
interests, partnership income and discontinued operations 15,871
13,263 30,404 25,550 Partnership income 580 683 1,237 1,315 --- ---
----- ----- Income from continuing operations 16,451 13,946 31,641
26,865 Discontinued operations: Discontinued operations, net (2)
980 3,968 2,282 7,288 Net gain on sales 14,289 - 14,289 - ------
--- ------ --- Total discontinued operations 15,269 3,968 16,571
7,288 NET INCOME $31,720 $17,914 $48,212 $34,153 Redeemable
noncontrolling interest in income 545 580 1,091 1,161 Dividends
attributable to preferred stock 2,953 2,953 5,906 5,906 ----- -----
----- ----- NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $28,222
$14,381 $41,215 $27,086 ------- ------- ------- ------- Net income
per common share - basic $0.54 $0.28 $0.79 $0.53 ----- ----- -----
----- Net income per common share - assuming dilution $0.54 $0.28
$0.79 $0.52 ----- ----- ----- ----- Weighted average shares
outstanding - basic (3) 51,765 51,020 51,505 51,005 ------ ------
------ ------ Weighted average shares outstanding - assuming
dilution (3) 51,765 51,538 51,505 51,466 ------ ------ ------
------ (1) Income Statements for the quarter and six months ended
June 30, 2008 has been restated to reflect the adoption of APB
14-1. (2) For 2009, details of net earnings from discontinued
operations include: one property classified as held for sale as of
June, 2009 and one property sold in 2009. The 2008 totals include
the properties mentioned above and six properties sold in 2008.
Quarter Quarter Six months Six months ended ended ended ended
6/30/09 6/30/08 6/30/09 6/30/08 ------- ------- ------- -------
Rental and ancillary income $1,930 $6,862 $4,156 $13,549 Real
estate expenses (950) (2,441) (1,715) (4,814) Depreciation - (453)
(159) (1,412) Interest expense - - - (35) --- --- --- --- Income
from discontinued operations, net $980 $3,968 $2,282 $7,288 ====
====== ====== ====== (3) Share count for the quarter and six months
ended June 30, 2008 restated to reflect retroactive adoption of
EITF 03-6-1. 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 property, from GAAP net income. By
excluding depreciation and gains or losses on sales of real estate,
management uses FFO to measure returns on its investments in real
estate assets. However, because FFO excludes depreciation and
amortization and captures neither the changes in the value of our
properties that result from use or market conditions nor the level
of capital expenditures to maintain the operating performance of
our properties, all of which have 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 Quarter Six Months Six Months Ended Ended Ended
Ended 6/30/2009 6/30/2008 6/30/2009 6/30/2008 Net income available
to common shareholders $28,222 $14,381 $41,215 $27,086 Depreciation
from continuing operations 22,368 19,471 43,118 39,138 Depreciation
from discontinued operations - 453 159 1,412 Redeemable
noncontrolling interest in income 545 580 1,091 1,161 Depreciation
from unconsolidated entities 455 415 904 817 Net gain on
investments (14,289) - (14,289) - Less: Redeemable noncontrolling
interest in income not convertible into common shares (106) (106)
(212) (212) ---- ---- ---- ---- Funds from operations $37,195
$35,194 $71,986 $69,402 ======= ======= ======= ======= ----- -----
----- ----- Allocation to participating securities - diluted FFO
(1) $(189) $(344) $(389) $(680) ===== ===== ===== ===== ----- -----
----- ----- Allocation to participating securities - diluted EPS
(1) $(269) $(186) $(674) $(386) ===== ===== ===== ===== Diluted
shares outstanding -EPS (2) 51,765 51,538 51,505 51,466 Net income
per common share -diluted $0.54 $0.28 $0.79 $0.52 ===== ===== =====
===== Diluted shares outstanding -FFO (2) 52,550 52,383 52,290
52,311 FFO per common share - diluted $0.70 $0.67 $1.37 $1.31 =====
===== ===== ===== (1) Adjustment to the numerators for diluted FFO
per common share and diluted net income per common share
calculations when applying the two class method under EITF 03-6-1.
(2) Shares outstanding reflect adoption of EITF 03-6-1. 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 property dispositions and other charges, which
permits investors to view income from operations without the impact
of noncash depreciation or the cost of debt, or with respect to
Adjusted EBITDA, other non-operating items described above. Because
EBITDA and Adjusted EBITDA exclude depreciation and amortization
and capture neither the changes in the value of our properties that
result from use or market conditions nor the level of capital
expenditures to maintain the operating performance of our
properties, all of which have real economic effect and could
materially impact our results from operations, the utility of
EBITDA and Adjusted EBITDA as measures of our performance is
limited. Below is a reconciliation of net income available to
common shareholders to EBITDA and Adjusted EBITDA: Quarter Quarter
Six Months Six Months Ended Ended Ended Ended 6/30/2009 6/30/2008
6/30/2009 6/30/2008 Net income available to common shareholders
$28,222 $14,381 $41,215 $27,086 Interest, including discontinued
operations 19,421 23,254 40,443 46,251 Depreciation, including
discontinued operations 22,368 19,924 43,277 40,550 ------ ------
------ ------ EBITDA 70,011 57,559 124,935 113,887 Redeemable
noncontrolling interest in income 545 580 1,091 1,161 Net gain on
sales (14,289) - (14,289) - Dividends on preferred stock 2,953
2,953 5,906 5,906 Nonroutine income items (1,958) - (1,958) -
------ ------ ------ ------ Adjusted EBITDA $57,262 $61,092
$115,685 $120,954 ======= ======= ======== ======== Net Operating
Income (NOI) We consider community level and portfolio-wide NOI to
be an appropriate supplemental measure to net income because it
helps both investors and management to understand the core property
operations prior to the allocation of general and administrative
costs. This is more reflective of the operating performance of the
real estate, and allows for an easier comparison of the operating
performance of single assets or groups of assets. In addition,
because prospective buyers of real estate have different overhead
structures, with varying marginal impact to overhead by 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 Quarter Six Months Six
Months Ended Ended Ended Ended 6/30/2009 6/30/2008 6/30/2009
6/30/2008 Net income available to common shareholders $28,222
$14,381 $41,215 $27,086 Interest, including discontinued operations
19,421 23,254 40,443 46,251 Depreciation, including discontinued
operations 22,368 19,924 43,277 40,550 Redeemable noncontrolling
interest in income 545 580 1,091 1,161 Net gain on sales (14,289) -
(14,289) - Dividends on preferred stock 2,953 2,953 5,906 5,906
General and administrative expense 4,218 5,378 8,544 10,033 Gain on
extinguishment of debt (1,958) - (1,958) - ------ ------ ------
------ NOI $61,480 $66,470 $124,228 $130,987 ======= =======
-------- -------- Less Non Same-Store NOI 6,731 7,770 12,793 14,909
----- ----- ------ ------ Same-Store NOI $54,749 $58,700 $111,435
$116,078 ------- ------- ======== ======== DATASOURCE: BRE
Properties, Inc. CONTACT: Investors, Edward F. Lange,
+1-415-445-6559, or Media, Thomas E. Mierzwinski, +1-415-445-6525,
both of BRE Properties, Inc. Web Site:
http://www.breproperties.com/
Copyright
