UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 2, 2010
BRE Properties, Inc.
(Exact name of registrant as specified in its charter)
| Maryland | 1-14306 | 94-1722214 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
| 525 Market Street, 4th Floor, San Francisco, CA | 94105-2712 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (415) 445-6530
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencernent communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 2.02. | Results of Operations and Financial Condition |
On February 2, 2010, we issued a press release and supplemental financial data with respect to our financial results for the quarter ended December 31, 2009. Copies of the press release and supplemental financial data are furnished as Exhibit 99.1 and Exhibit 99.2 to this report, respectively. The information contained in this Item 2.02 and the attached Exhibit 99.1 and Exhibit 99.2 are furnished to, and not filed with, the Securities and Exchange Commission.
| ITEM 8.01. | Other Events |
February 2, 2010 we reported operating results for the quarter and year ended December 31, 2009. All per share results are reported on a fully diluted basis.
Fourth Quarter 2009
Funds from operations (FFO), the generally accepted measure of operating performance for real estate investment trusts, totaled $16.0 million, or $0.29 per share, for fourth quarter 2009, as compared with $36.1 million, or $0.69 per share, for the quarter ended December 31, 2008. FFO for the fourth quarter 2009 includes nonroutine charges totaling $14.4 million, or $0.26 per share, primarily from the abandonment of three development sites under contract. FFO for the fourth quarter 2008 included three nonroutine income items totaling $7.8 million, or $0.15 per share, and two nonroutine expense items totaling $5.7 million, or $0.11 per share. FFO for the 2009 and 2008 periods included the impact of an additional noncash interest expense totaling $1.6 million, or $0.03 per share in each period, as a result of the adoption of the new FASB convertible debt accounting standard. Excluding nonroutine items and noncash interest from adoption of the convertible debt accounting standard, core FFO per share declined 15% on a year-over-year basis. (A reconciliation of net income (loss) available to common shareholders to FFO is provided at the end of this release.)
Net loss to common shareholders for the fourth quarter totaled $7.2 million, or $0.13 per share, as compared with net income of $55.7 million, or $1.08 per share, for the same period 2008. The fourth quarter 2008 results included gains from property sales totaling $41.2 million, or $0.80 per share.
Total revenues from continuing operations for the quarter were $85.5 million, as compared with $86.9 million a year ago. Adjusted EBITDA for the quarter totaled $54.6 million, as compared with $59.6 million in fourth quarter 2008. (A reconciliation of net income (loss) available to common shareholders to Adjusted EBITDA is provided at the end of this release.)
12-Month Period Ended December 31, 2009
For the annual period, FFO totaled $120.8 million, or $2.23 per share, as compared with $141.8 million, or $2.69 per share, for the 12-month period in 2008. FFO for year 2009 included nonroutine income totaling $1.5 million or $0.03 per share, and nonroutine expenses of $13.5 million, or $0.25 per share. FFO for the year 2008 included nonroutine income totaling $7.8 million, or $0.15 per share, and nonroutine expenses of $5.7 million, or $0.11 per share. FFO for the 12-month periods in 2009 and 2008 reflected the net impact of the new convertible debt accounting standard, totaling $6.4 million, or $0.12 per share, and $6.2 million, or $0.12 per share, respectively. Excluding nonroutine items and the noncash charge related to new convertible debt accounting standard, core FFO per share declined 6.9% year-over-year.
Net income available to common shareholders for the 12-month period totaled $50.6 million, or $0.95 per share, as compared with $122.8 million, or $2.36 per share, for the same period 2008. The 2009 results included gains from property sales totaling $21.6 million, or $0.41 per share; the 2008 results included gains totaling $66.0 million, or $1.28 per share.
For the 12-month period in 2009, total revenues from continuing operations were $344.6 million, as compared with $345.3 million for the same period 2008. Adjusted EBITDA for the 12-month period totaled $226.0 million, as compared with $242.4 million for the same period in 2008.
Our year-over-year earnings and FFO results reflected declines in the same-store property-level operating results, which were offset by income from recently developed properties, a lower interest rate environment and a reduction in corporate-level G&A expenses.
Same-store net operating income (NOI) declined $5.6 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.) Recently developed properties generated $1.9 million in additional NOI during the quarter, as compared with fourth quarter 2008.
Same-Store Property Results
We define same-store properties as stabilized apartment communities that we have owned for at least five full quarters. Of the 21,245 apartment units we own, same-store units totaled 19,572 for the quarter. On a year-over-year basis, overall same-store NOI declined 9.5% for the fourth quarter and 6.4% for the annual period. Average same-store market rent for the fourth quarter 2009 decreased 9.1% to $1,380 per unit, from $1,519 per unit in fourth quarter 2008. Physical occupancy levels averaged 95.1% during fourth quarter 2009, as compared with 93.8% for the same period in 2008. Rent concession impact in the same-store portfolio totaled $3.3 million, or 20 days rent, for fourth quarter 2009, as compared with $1.1 million, or 7.5 days, for the same period in 2008.
On a sequential basis, same-store NOI decreased 1.4%, revenue declined 1.9% and expenses decreased 2.9% against third quarter 2009 results. Effective rents were reduced 1.0% in the fourth quarter, as market rent reductions were offset by lower levels of concessions awarded. Concessions associated with new leases decreased from 15 days rent in the third quarter of 2009 to 12 days rent in the fourth quarter.
Same-store results were affected primarily by job losses in our operating markets. At the end of the fourth quarter, unemployment rates in our core markets were: Southern California, 11.6%; San Francisco Bay area, 10.5%; and Seattle, 9.1%. The following table depicts job losses in our core markets over the last 12 months:
| Same-Store | Absolute Job Change | ||||||||
| Core Markets |
# Units | % NOI | 12 months ended December 2009 |
3 months ended December 2009 | |||||
| San Diego |
3,958 | 23.7 | % | -42,700 | 4,400 | ||||
| Inland Empire |
3,553 | 14.8 | % | -50,600 | 4,800 | ||||
| Orange County |
2,545 | 14.2 | % | -48,800 | -4,700 | ||||
| Los Angeles |
2,075 | 11.4 | % | -114,500 | 6,300 | ||||
| San Francisco |
2,928 | 18.6 | % | -112,100 | -15,000 | ||||
| Seattle |
3,211 | 13.2 | % | -51,500 | -9,300 | ||||
| Total Core Markets |
18,270 | 95.9 | % | -420,200 | -13,500 | ||||
Source of Unemployment and Job Loss Data: U.S. Bureau of Labor Statistics and California Employment Development
Community Development Activity
At the end of the fourth quarter 2009, we had two development communities in lease-up: Taylor 28 in Seattle, Wash. and Belcarra in Bellevue, Wash. When completed, Belcarra will have 296 units, of which 203 were delivered as of December 31; all 197 units at Taylor 28 have been delivered. The current physical occupancy rates at these communities are: 88% at Taylor 28 and 38% at Belcarra; leasing velocity has averaged 19 units and 40 units per month, respectively, since the communities opened. During the quarter, physical stabilization was reached at Park Viridian in Anaheim, Calif. (328 units). Average occupancy at Park Viridian was 90.4% during the fourth quarter and 95.2% for the month of December.
We currently have two communities under construction, Belcarra in Bellevue, noted above, and Villa Granada in Santa Clara, Calif., with a total of 566 units, an aggregate projected investment of $176.1 million and an estimated balance to complete totaling $16.4 million. Estimated completion dates are first and fourth quarter 2010, respectively.
During the fourth quarter, we acquired a 6.62-acre parcel of land in Sunnyvale, Calif. for a purchase price of approximately $14.5 million. The site represents approximately 338 units of future development.
In total, we own four land parcels, two in Southern California and two in Northern California, representing 1,298 units of future development, and an estimated aggregate investment of $580 million upon completion.
Capital Markets Activity
During the quarter, we repurchased through open market transactions $33.2 million of our 4.125% convertible notes, at 97.8% of par, resulting in a net loss of $870,000, or $0.02 per share after accelerated amortization of fees and debt discounts. The principal amount outstanding on the $460 million original issue is $371.3 million as of December 31, 2009.
Under the at-the-market equity distribution agreement filed with the Securities and Exchange Commission on Form 8-K on May 14, 2009, we issued 783,000 shares of common stock in the fourth quarter, at an average price of $31.86 per share, with total gross proceeds of $25.0 million. During 2009, we issued approximately 3.8 million shares of common stock, at an average price of $27.52 per share, with total gross proceeds of $104.6 million. The remaining capacity under the equity distribution agreement on file totals $20.4 million.
Nonroutine Income and Expense Items
During the fourth quarter 2009, we recorded a charge of $13.5 million, or $0.25 per share in Other Expenses, representing $12.9 million in abandoned pursuit costs on three development sites under option agreements that we no longer intend to pursue and $600,000 in severance charges. Two sites were in Southern California, and one in Northern California.
Also during the fourth quarter, as previously noted, a net loss on retirement of debt was recorded for $870,000 or $0.02 per share. For the year ended December 31, 2009, we recorded a net gain on retirement of debt totaling $1.5 million, or $0.03 per share.
During the quarter and year ended December 31, 2008, we recorded nonroutine income of $7.8 million, or $0.15 per share, comprising: $4.4 million from a legal settlement, $1.0 million from a forfeited escrow deposit on a defaulted property sale and a $2.4 million gain on retirement of debt. A charge of $5.7 million, or $0.11 per share, was recorded in Other Expenses during the fourth quarter of 2008, representing abandonment of three development sites totaling $5.1 million and severance charges of $600,000.
Common and Preferred Dividends Declared
On January 28, 2010, our Board of Directors approved regular common and preferred stock dividends for the quarter ending March 31, 2010. All common and preferred dividends will be payable on Wednesday, March 31, 2010 to shareholders of record on Monday, March 15, 2010. The quarterly common dividend payment of $0.375 is equivalent to $1.50 per share on an annualized basis, and represents a yield of approximately 4.64% on Monday’s closing price of $32.32 per share. We have paid uninterrupted quarterly dividends to shareholders since being founded in 1970.
Our 6.75% Series C preferred dividend is $0.421875 per share; the 6.75% Series D preferred dividend is $0.421875 per share.
BRE Properties, Inc.
Consolidated Balance Sheets
Fourth Quarter 2009
(Unaudited, dollar amounts in thousands except per share data)
| December 31, 2009 |
December 31, 2008 (1) |
|||||||
| ASSETS |
||||||||
| Real estate portfolio: |
||||||||
| Direct investments in real estate: |
||||||||
| Investments in rental properties |
$ | 3,180,633 | $ | 2,927,481 | ||||
| Construction in progress |
101,354 | 295,074 | ||||||
| Less: accumulated depreciation |
(583,953 | ) | (514,388 | ) | ||||
| 2,698,034 | 2,708,167 | |||||||
| Equity in real estate joint ventures: |
||||||||
| Investments |
61,999 | 62,497 | ||||||
| Real estate held for sale, net |
— | 17,022 | ||||||
| Land under development |
155,532 | 123,609 | ||||||
| Total real estate portfolio |
2,915,565 | 2,911,295 | ||||||
| Cash |
5,656 | 7,724 | ||||||
| Other assets |
58,787 | 73,725 | ||||||
| TOTAL ASSETS |
$ | 2,980,008 | $ | 2,992,744 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Liabilities: |
||||||||
| Unsecured senior notes |
$ | 826,918 | $ | 1,505,905 | ||||
| Unsecured line of credit |
288,000 | 245,000 | ||||||
| Mortgage loans payable |
752,157 | 151,496 | ||||||
| Accounts payable and accrued expenses |
56,409 | 91,167 | ||||||
| Total liabilities |
1,923,484 | 1,993,568 | ||||||
| Redeemable noncontrolling interests |
33,605 | 29,972 | ||||||
| Shareholders’ equity: |
||||||||
| Preferred Stock, $0.01 par value; 20,000,000 shares authorized: 7,000,000 shares with $25 liquidation preference issued and outstanding at December 31, 2009 and December 31, 2008 , respectively. |
70 | 70 | ||||||
| Common stock, $0.01 par value, 100,000,000 shares authorized. Shares issued and outstanding: 55,136,359 and 51,149,745 at December 31, 2009 and December 31, 2008, respectively. |
551 | 511 | ||||||
| Additional paid-in capital |
1,022,298 | 968,623 | ||||||
| Total shareholders’ equity |
1,022,919 | 969,204 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
$ | 2,980,008 | $ | 2,992,744 | ||||
| (1) | Balance sheet is restated to reflect the adoption of new accounting guidance requiring retroactive application. |
BRE Properties, Inc.
Consolidated Statements of Income
Quarters Ended December 31, 2009 and 2008
(Unaudited, dollar and share amounts in thousands)
| Quarter ended 12/31/09 |
Quarter ended 12/31/08 |
Twelve months ended 12/31/09 |
Twelve months ended 12/31/08 | ||||||||||
| REVENUES |
|||||||||||||
| Rental income |
$ | 82,580 | $ | 83,712 | $ | 331,709 | $ | 331,704 | |||||
| Ancillary income |
2,901 | 3,214 | 12,895 | 13,581 | |||||||||
| Total revenues |
85,481 | 86,926 | 344,604 | 345,285 | |||||||||
| EXPENSES |
|||||||||||||
| Real estate |
$ | 27,542 | $ | 25,167 | $ | 109,486 | $ | 102,405 | |||||
| Provision for depreciation |
22,729 | 20,217 | 88,260 | 79,107 | |||||||||
| Interest (1) |
21,292 | 22,974 | 82,734 | 92,032 | |||||||||
| General and administrative |
4,742 | 5,784 | 17,390 | 20,578 | |||||||||
| Other expenses |
13,522 | 5,719 | 13,522 | 5,719 | |||||||||
| Total expenses |
89,827 | 79,861 | 311,392 | 299,841 | |||||||||
| Other income |
876 | 6,047 | 3,459 | 7,885 | |||||||||
| Net (loss)/gain from extinguishment of debt |
(870 | ) | 2,364 | 1,470 | 2,364 | ||||||||
| (Loss)/Income before noncontrolling interests, partnership income and discontinued operations |
(4,340 | ) | 15,476 | 38,141 | 55,693 | ||||||||
| Partnership income |
531 | 593 | 2,329 | 2,560 | |||||||||
| (Loss)/Income from continuing operations |
(3,809 | ) | 16,069 | 40,470 | 58,253 | ||||||||
| Discontinued operations: |
|||||||||||||
| Discontinued operations, net (2) |
— | 1,950 | 2,296 | 12,627 | |||||||||
| Net gain on sales of discontinued operations |
— | 41,164 | 21,574 | 65,984 | |||||||||
| Income from discontinued operations |
— | 43,114 | 23,870 | 78,611 | |||||||||
| NET (LOSS)/INCOME |
$ | (3,809 | ) | $ | 59,183 | $ | 64,340 | $ | 136,864 | ||||
| Redeemable noncontrolling interest in income |
394 | 550 | 1,885 | 2,291 | |||||||||
| Dividends attributable to preferred stock |
2,953 | 2,953 | 11,813 | 11,813 | |||||||||
| NET (LOSS)/INCOME AVAILABLE TO COMMON SHAREHOLDERS |
$ | (7,156 | ) | $ | 55,680 | $ | 50,642 | $ | 122,760 | ||||
| Net (loss)/income per common share - basic |
$ | (0.13 | ) | $ | 1.08 | $ | 0.95 | $ | 2.38 | ||||
| Net (loss)/income per common share - assuming dilution |
$ | (0.13 | ) | $ | 1.08 | $ | 0.95 | $ | 2.36 | ||||
| Weighted average shares outstanding - basic (3) |
54,540 | 51,120 | 52,760 | 51,050 | |||||||||
| Weighted average shares outstanding - assuming dilution (3) |
54,540 | 51,181 | 52,761 | 51,440 | |||||||||
| (1) | Income Statements for the quarter and twelve months ended December 31, 2008 has been restated to reflect the adoption of new convertible debt accounting guidance requiring retroactive application. |
| (2) | For 2009, details of net earnings from discontinued operations include two properties sold in 2009. The 2008 totals include the two aforementioned properties and six properties sold in 2008. |
| Quarter ended 12/31/09 |
Quarter ended 12/31/08 |
Twelve months ended 12/31/09 |
Twelve months ended 12/31/08 |
|||||||||||
| Rental and ancillary income |
— | $ | 4,184 | $ | 4,242 | $ | 23,813 | |||||||
| Real estate expenses |
— | (1,760 | ) | (1,787 | ) | (8,799 | ) | |||||||
| Provision for depreciation |
— | (474 | ) | (159 | ) | (2,352 | ) | |||||||
| Interest expense |
— | — | — | (35 | ) | |||||||||
| Income from discontinued operations, net |
— | $ | 1,950 | $ | 2,296 | $ | 12,627 | |||||||
| (3) | Share count for the quarter and twelve months ended December 31, 2008 restated to reflect retroactive adoption of new earnings per share accounting guidance. |
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 real economic effect and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited.
Management also believes that FFO, combined with the required GAAP presentations, is useful to investors in providing more meaningful comparisons of the operating performance of a company’s real estate between periods or as compared to other companies. FFO does not represent net income or cash flows from operations as defined by GAAP and is not intended to indicate whether cash flows will be sufficient to fund cash needs. It should not be considered an alternative to net income as an indicator of the REIT’s operating performance or to cash flows as a measure of liquidity. Our FFO may not be comparable to the FFO of other REITs due to the fact that not all REITs use the NAREIT definition.
| Quarter Ended 12/31/2009 |
Quarter Ended 12/31/2008 |
Twelve Months Ended 12/31/2009 |
Twelve Months Ended 12/31/2008 |
|||||||||||||
| Net (loss)/income available to common shareholders |
$ | (7,156 | ) | $ | 55,680 | $ | 50,642 | $ | 122,760 | |||||||
| Depreciation from continuing operations |
22,729 | 20,217 | 88,260 | 79,107 | ||||||||||||
| Depreciation from discontinued operations |
— | 474 | 159 | 2,352 | ||||||||||||
| Redeemable noncontrolling interest in income (1) |
— | 550 | 1,885 | 2,291 | ||||||||||||
| Depreciation from unconsolidated entities |
472 | 482 | 1,841 | 1,715 | ||||||||||||
| Net gain on investments |
— | (41,164 | ) | (21,574 | ) | (65,984 | ) | |||||||||
| Less: Redeemable noncontrolling interest in income not convertible into common shares (1) |
— | (106 | ) | (424 | ) | (423 | ) | |||||||||
| Funds from operations |
$ | 16,045 | $ | 36,133 | $ | 120,789 | $ | 141,818 | ||||||||
| Allocation to participating securities - diluted FFO (2) |
$ | (151 | ) | $ | (374 | ) | $ | (1,233 | ) | $ | (1,466 | ) | ||||
| Allocation to participating securities - diluted EPS (2) |
$ | 98 | $ | (586 | ) | $ | (458 | ) | $ | (1,265 | ) | |||||
| Diluted shares outstanding - EPS (3) |
54,540 | 51,181 | 52,761 | 51,440 | ||||||||||||
| Net income per common share - diluted |
$ | (0.13 | ) | $ | 1.08 | $ | 0.95 | $ | 2.36 | |||||||
| Diluted shares outstanding - FFO (3) |
54,580 | 51,986 | 53,541 | 52,270 | ||||||||||||
| FFO per common share - diluted |
$ | 0.29 | $ | 0.69 | $ | 2.23 | $ | 2.69 | ||||||||
| (1) | OP units are anti-dilutive for the quarter ending December 31, 2009, but dilutive for the twelve months ending December 31, 2009. Redeemable noncontrolling interest in income of $394,000 and redeemable noncontrolling interest in income not convertible to common ($106,000) have been excluded for the quarterly FFO calculation but are included within the year to date calculation. |
| (2) | Adjustment to the numerators for diluted FFO per common share and diluted net income per common share calculations when applying the two class method for calculating EPS. |
| (3) | Shares outstanding reflect adoption of new EPS accounting guidance. |
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 Ended 12/31/2009 |
Quarter Ended 12/31/2008 |
Twelve Months Ended 12/31/2009 |
Twelve Months Ended 12/31/2008 |
|||||||||||||
| Net (loss)/income available to common shareholders |
$ | (7,156 | ) | $ | 55,680 | $ | 50,642 | $ | 122,760 | |||||||
| Interest, including discontinued operations |
21,292 | 22,974 | 82,734 | 92,067 | ||||||||||||
| Depreciation, including discontinued operations |
22,729 | 20,691 | 88,419 | 81,459 | ||||||||||||
| EBITDA |
36,865 | 99,345 | 221,795 | 296,286 | ||||||||||||
| Redeemable noncontrolling interest in income |
394 | 550 | 1,885 | 2,291 | ||||||||||||
| Net gain on sales |
— | (41,164 | ) | (21,574 | ) | (65,984 | ) | |||||||||
| Dividends on preferred stock |
2,953 | 2,953 | 11,813 | 11,813 | ||||||||||||
| Other expenses |
13,522 | 5,719 | 13,522 | 5,719 | ||||||||||||
| Net gain on extinguishment of debt |
870 | (2,364 | ) | (1,470 | ) | (2,364 | ) | |||||||||
| Nonroutine income items |
— | (5,407 | ) | — | (5,407 | ) | ||||||||||
| Adjusted EBITDA |
$ | 54,604 | $ | 59,631 | $ | 225,971 | $ | 242,354 | ||||||||
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 Ended 12/31/2009 |
Quarter Ended 12/31/2008 |
Twelve Months Ended 12/31/2009 |
Twelve Months Ended 12/31/2008 |
|||||||||||||
| Net (loss)/income available to common shareholders |
$ | (7,156 | ) | $ | 55,680 | $ | 50,642 | $ | 122,760 | |||||||
| Interest, including discontinued operations |
21,292 | 22,974 | 82,734 | 92,067 | ||||||||||||
| Depreciation, including discontinued operations |
22,729 | 20,691 | 88,419 | 81,459 | ||||||||||||
| Redeemable noncontrolling interest in income |
394 | 550 | 1,885 | 2,291 | ||||||||||||
| Net gain on sales |
— | (41,164 | ) | (21,574 | ) | (65,984 | ) | |||||||||
| Dividends on preferred stock |
2,953 | 2,953 | 11,813 | 11,813 | ||||||||||||
| General and administrative expense |
4,742 | 5,784 | 17,390 | 20,578 | ||||||||||||
| Other expenses |
13,522 | 5,719 | 13,522 | 5,719 | ||||||||||||
| Net loss/(gain) on extinguishment of debt |
870 | (2,364 | ) | (1,470 | ) | (2,364 | ) | |||||||||
| NOI |
$ | 59,346 | $ | 70,823 | $ | 243,361 | $ | 268,339 | ||||||||
| Less Non Same-Store NOI |
6,223 | 12,126 | 24,901 | 35,046 | ||||||||||||
| Same-Store NOI |
$ | 53,123 | $ | 58,697 | $ | 218,460 | $ | 233,293 | ||||||||
| ITEM 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number |
Description | |
| 99.1 | Press release of BRE Properties, Inc. dated February 2, 2010, including attachments. | |
| 99.2 | Supplemental Financial data dated February 2, 2010, including attachments. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BRE Properties, Inc. (Registrant) | ||||||||
| Date: February 2, 2010 | /s/ John A. Schissel | |||||||
| John A. Schissel Executive Vice President and Chief Financial Officer | ||||||||
Exhibit Index
| Exhibit |
Description | |
| 99.1 | Press release of BRE Properties, Inc. dated February 2, 2010, including attachments. | |
| 99.2 | Supplemental Financial data dated February 2, 2010, including attachments. | |