<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to
FORM 8K/A
Amendment to Application or Report
Filed pursuant to Section 12, 13 or 15(d)
of the Securities Exchange Act of 1934
BRE PROPERTIES, INC.
- --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
The undersigned hereby amends the following items, financial statements,
exhibits or other portions of is Current Report on Form 8-K and Amendment No. 1
to Form 8-K/A as set forth in the pages attached hereto:
Item 7. Financial statements, Pro Forma Information and Exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
BRE PROPERTIES, INC.
Date: April 23, 1997 By: /s/ LeRoy E. Carlson
--------------------------
LeRoy E. Carlson
Executive Vice President and
Chief Financial and Accounting Officer
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
BRE PROPERTIES, INC.
PRO FORMA STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1995
This unaudited pro forma statement of operations reflects the results of
operations of BRE Properties, Inc. ("BRE") for the year ended December 31, 1995,
giving effect to the acquisition by BRE of Foster's Landing Apartments, Foster
City, California for $58,800,000 (completed on September 27, 1996), as if this
acquisition had occurred on January 1, 1995. BRE changed from a fiscal year end
of July 31 to a calendar year end of December 31 on May 20, 1996, effective for
the year ending December 31, 1995. These pro forma financial statements reflect
the change in accounting year ends. The pro forma data also assumes that this
acquisition was financed in part with proceeds from BRE's lines of credit
(totaling $150,000,000), as if such borrowings had occurred on January 1, 1995.
In addition, this proforma statement of operations reflects the merger of BRE
with Real Estate Investment Trust of California ("RCT") (the "Merger") completed
on March 15, 1996 as if the Merger had occurred on January 1, 1995. In the
opinion of management, all adjustments necessary to present fairly such pro
forma data have been made.
The unaudited pro forma statement of operations should be read in
conjunction with the financial statements and notes thereto filed as part of the
transition Form 10-K for the five months ended December 31, 1995 and year ended
July 31, 1995. The unaudited pro forma statement of operations is not
necessarily indicative of what the actual results of operations of BRE would
have been for the period had the transaction occurred at the beginning of the
period nor does it purport to indicate the results of future periods.
2
<PAGE>
BRE PROPERTIES, INC.
PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
SUBTOTAL FOSTER'S
BRE RCT RCT PRO LANDING PRO FORMA
AS REPORTED AS REPORTED FORMA YEAR TWELVE MONTHS RESULTS OF
(IN THOUSANDS, EXCEPT PER YEAR ENDED YEAR ENDED ENDED ENDED ACQUISITION OF PRO FORMA
SHARE AMOUNTS) DECEMBER DECEMBER PRO FORMA DECEMBER DECEMBER 31, PRO FORMA FOSTER'S RESULTS
31, 1995 31, 1995 ADJUSTMENTS 31, 1995 1995 ADJUSTMENTS LANDING
- ------------------------------------------------------------------ -------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Rental.............. $62,865 $32,024 $32,024 $ 6,342 $6,342 $101,231
Other............... 2,522 2,023 2,023 46 46 4,591
-------------------------------------- -------------------------------------- ------------------------
65,387 34,047 34,047 6,388 6,388 105,822
-------------------------------------- -------------------------------------- ------------------------
Expenses:
Depreciation........ 7,864 5,396 84 (a) 5,480 1,176 (d) 1,176 14,520
Interest............ 7,973 6,952 (196)(b) 6,756 4,245 (e) 4,245 18,974
Other............... 27,761 11,851 (604)(c) 11,247 2,077 2,077 41,085
-------------------------------------- -------------------------------------- ------------------------
43,598 24,199 (716) 23,483 2,077 5,421 7,498 74,579
Net Income before gain
on sales of
investments......... 21,789 9,848 716 10,564 4,311 (5,421) (1,110) 31,243
Gain on sales of
investments......... 221 9,378 9,378 9,599
-------------------------------------- -------------------------------------- ------------------------
Net income (Loss)..... $22,010 $19,226 $716 $19,942 $4,311 ($5,421) ($1,110) $40,842
-------------------------------------- -------------------------------------- ------------------------
-------------------------------------- -------------------------------------- ------------------------
Net income per share.. $ 1.01 $1.25
---------- --------
---------- --------
Weighted average shares
outstanding......... 21,905 10,684 10,684 32,589
---------- --------- --------- --------
---------- --------- --------- --------
</TABLE>
See notes and assumptions to unaudited pro forma statement of operations.
3
<PAGE>
BRE PROPERTIES INC.
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(a) Increase in depreciation charges due to recording the properties acquired
from RCT at BRE's purchase price, and the related depreciation utilizing an
estimated useful life of 40 years and a cost basis of approximately $274
million (allocated 80% to buildings and improvements in accordance with
BRE's accounting policies), as follows:
Pro forma depreciation expense on cost of depreciable assets
acquired $ 5,480
Less: RCT historical depreciation (5,396)
----------
84
----------
----------
(b) Decrease in interest expense as follows:
Elimination of amortization of loan fees included in interest
expense related to deferred loan fees eliminated by
purchase accounting from RCT historical data $ 196
----------
Pro forma adjustment $ 196
----------
----------
(c) The net increase in other costs as a result of the Merger, including savings
from internalizing property management, professional and trustee fees,
franchise taxes, shareholder reporting and the elimination of corporate the
office of RCT. Such savings are offset in part by reassessed property taxes
and unit enhancement costs which were capitalized by RCT and are expensed by
BRE. Amounts are derived from the actual historical costs for those
items which are expected to be eliminated or reduced as a result of the
Merger, the internalization of property management for BRE multifamily and
commercial investments, and the changes in the BRE Amended and Restated
Non-Employee Director Stock Option Plan.
4
<PAGE>
* Amounts are derived from the actual historical costs for those items
which are expected to be eliminated or reduced as a result of the Merger,
the internalization of property management for BRE multifamily and
commercial investments, and the changes in the BRE Amended and Restated
Non-Employee Director Stock Option Plan.
(d) Depreciation for the period January 1, 1995 to December 31, 1995, based
upon a 40 year life and a purchase price of $58,800,000, of which
$47,040,000 is allocated to depreciable improvements.
(e) Interest expense for the period January 1, 1995 to December 31, 1995, on
borrowed funds of $58,800,000 under BRE's lines of credit at an interest
rate of 7.22%. If the interest rate were 1/8 of 1% higher or lower, the
pro forma results would change as follows:
With an With a decrease
increase in the in the interest
interest rate of rate of 1/8 of
(in thousands, except per share) As Stated 1/8 of 1% 1%
- --------------------------------------------------------------------------------
Interest expense $18,974 $19,048 $18,901
- --------------------------------------------------------------------------------
Net income $40,842 $40,768 $40,915
- --------------------------------------------------------------------------------
Net income per share $1.25 $1.25 $1.26
- --------------------------------------------------------------------------------
The foregoing data constitutes forward-looking information. Certain of the pro
forma adjustments are based on operating synergies and other cost savings
expected to be realized from the Merger. The cost and timing of integrating the
operations of the two companies are contingencies which are not fully within the
control of Management. Accordingly, it cannot be estimated with any certainty
as to when the expected cost savings will be realized, and there may be
differences between the expected savings and the actual results, which
differences could be material.
5
<PAGE>
BRE PROPERTIES, INC.
PRO FORMA STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
This unaudited pro forma statement of operations reflects the results of
operations of BRE Properties, Inc. ("BRE") for the nine month period ended
September 30, 1996, giving effect to the acquisition by BRE of Foster's Landing
Apartments, Foster City, California for $58,800,000 (completed on September 27,
1996), as if this acquisition had occurred on January 1, 1996. The pro forma
data assumes that this acquisition was financed in part with proceeds from BRE's
lines of credit (totaling $150,000,000), as if such borrowings had occurred on
January 1, 1996. In addition, this proforma statement of operations reflects
the merger of BRE with Real Estate Investment Trust of California ("RCT") (the
"Merger") completed on March 15, 1996 as if the Merger had occurred on January
1, 1996. In the opinion of management all adjustments necessary to present
fairly such pro forma data have been made.
The unaudited pro forma statement of operations should be read in
conjunction with the financial statements and notes thereto filed as part of the
transition Form 10-K for the year ended December 31, 1995. The unaudited pro
forma statement of operations is not necessarily indicative of what the actual
results of operations of BRE would have been for the period had the transaction
occurred at the beginning of the period nor does it purport to indicate the
results of future periods.
6
<PAGE>
BRE PROPERTIES, INC.
PRO FORMA STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
BRE
AS REPORTED RCT SUBTOTAL FOSTER'S PRO FORMA
NINE MONTHS PERIOD RCT PERIOD LANDING RESULTS OF
(IN THOUSANDS, EXCEPT PER ENDED JANUARY 1- JANUARY 1- PERIOD JANUARY ACQUISITION OF PRO FORMA
SHARE AMOUNTS) SEPTEMBER MARCH 15, PRO FORMA MARCH 15, 1-SEPTEMBER PRO FORMA FOSTER'S RESULTS
30, 1996 1996 ADJUSTMENTS 1996 27, 1996 ADJUSTMENTS LANDING
- ------------------------------------------------------------------ -------------------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Rental............. $65,036 $7,956 $7,956 $4,994 $4,994 $77,896
Other.............. 6,907 503 503 66 66 7,476
-------------------------------------- -------------------------------------- -------------------------
71,943 8,459 8,459 5,060 5,060 85,462
-------------------------------------- -------------------------------------- -------------------------
Expenses:
Depreciation....... 9,379 1,159 (16)(a) 1,143 882 (d) 882 11,404
Interest........... 11,219 1,352 (41)(b) 1,311 2,878 (e) 2,878 15,408
Other.............. 24,342 2,307 (92)(c) 2,215 1,423 1,423 27,980
-------------------------------------- -------------------------------------- -------------------------
44,940 4,818 (149) 4,669 1,423 3,760 5,183 54,792
Net Income before gain
on sales of
investments........ 27,003 3,641 149 3,790 3,637 (3,760) (123) 30,670
Gain on sales of
investments........ 49,578 49,578
-------------------------------------- -------------------------------------- -------------------------
Net Income (Loss).... $76,581 3,641 $149 $3,790 3,637 ($3,760) ($123) 80,248
-------------------------------------- -------------------------------------- -------------------------
-------------------------------------- -------------------------------------- -------------------------
Net Income per share. $2.58 $2.45
---------- ---------
---------- ---------
Weighted average
shares outstanding. 29,740 2,968 2,968 32,708
---------- ------- -------- ---------
---------- ------- -------- ---------
</TABLE>
See notes and assumptions to unaudited pro forma statement of operations.
7
<PAGE>
BRE PROPERTIES, INC.
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(a) Increase in depreciation charges due to recording the properties acquired
from RCT at BRE's purchase price, and the related depreciation utilizing an
estimated useful life of 40 years and a cost basis of approximately $274
million (allocated 80% to buildings and improvements in accordance with
BRE's accounting policies), as follows:
For the period
January 1- March
15, 1996
----------------
Pro forma depreciation expense on cost of depreciable assets
acquired $ 1,143
Less: RCT historical depreciation (1,159)
----------------
(16)
----------------
----------------
(b) Decrease in interest expense as follows:
For the period
January 1- March
15, 1996
----------------
Elimination of amortization of loan fees included in interest
expense related to deferred loan fees eliminated by
purchase accounting from RCT historical data $ 41
----------------
Pro forma adjustment $ 41
----------------
----------------
(c) The net increase in other costs as a result of the Merger, including savings
from internalizing property management, professional and trustee fees,
franchise taxes, shareholder reporting and the elimination of corporate the
office of RCT. Such savings are offset in part by reassessed property taxes
and unit enhancement costs which were capitalized by RCT and are expensed by
BRE. Amounts are derived from the actual historical costs for those
items which are expected to be eliminated or reduced as a result of the
Merger, the internalization of property management for BRE multifamily and
commercial investments, and the changes in the BRE Amended and Restated
Non-Employee Director Stock Option Plan.
8
<PAGE>
* Amounts are derived from the actual historical costs for those items
which are expected to be eliminated or reduced as a result of the Merger,
the internalization of property management for BRE multifamily and
commercial investments, and the changes in the BRE Amended and Restated
Non-Employee Director Stock Option Plan.
(d) Depreciation for the period January 1, 1996 to September 27, 1996, based
upon a 40 year life and a purchase price of $58,800,000, of which
$47,040,000 is allocated to depreciable improvements.
(e) Interest expense for the period January 1, 1996 to September 27, 1996, on
borrowed funds of $58,800,000 under BRE's lines of credit at an interest
rate of 6.6%. If the interest rate were 1/8 of 1% higher or lower, the
pro forma results would change as follows:
With an With a decrease
increase in the in the interest
interest rate of rate of 1/8 of
(in thousands, except per share) As Stated 1/8 of 1% 1%
- --------------------------------------------------------------------------------
Interest expense $15,408 $15,463 $15,351
- --------------------------------------------------------------------------------
Net income $80,248 $80,193 $80,305
- --------------------------------------------------------------------------------
Net income per share $2.45 $2.45 $2.46
- --------------------------------------------------------------------------------
The foregoing data constitutes forward-looking information. Certain of the pro
forma adjustments are based on operating synergies and other cost savings
expected to be realized from the Merger. The cost and timing of integrating the
operations of the two companies are contingencies which are not fully within the
control of Management. Accordingly, it cannot be estimated with any certainty
as to when the expected cost savings will be realized, and there may be
differences between the expected savings and the actual results, which
differences could be material.
9
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To BRE Properties, Inc.
We have audited the accompanying statement of Gross Income and Direct Operating
Expenses of Foster's Landing Apartments for the year ended December 31, 1995.
This Statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on the Statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the Statement. An audit also includes assessing the basis of
accounting used and significant estimates made by management, as well as
evaluating the overall presentation of the Statement. We believe that our audit
provides a reasonable basis for our opinion.
The accompanying Statement was prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission for inclusion in
the amendment to Form 8K filed by BRE Properties, Inc. as described in Note 2,
and is not intended to be a complete presentation of the Company's revenue and
expenses.
In our opinion, the Statement referred to above presents fairly, in all material
respects, the gross income and direct operating expenses described in Note 2 of
Foster's Landing Apartments for the year ended December 31, 1995, in conformity
with generally accepted accounting principles.
Ernst and Young, LLP
San Francisco, California
December 4, 1996
10
<PAGE>
FOSTER'S LANDING APARTMENTS
STATEMENT OF GROSS INCOME
AND DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
GROSS INCOME
Rental income....................... $ 6,342,340
Other income........................ 46,537
-----------
6,388,877
DIRECT OPERATING EXPENSES - NOTE 2
Property taxes....................... 459,040
Salaries and wages................... 430,616
Utilities............................ 359,880
Repairs and maintenance.............. 316,878
Management fees...................... 255,029
Insurance............................ 110,442
General and administrative........... 145,519
-----------
2,077,404
-----------
TOTAL GROSS INCOME AND DIRECT OPERATING
EXPENSES $ 4,311,473
-----------
-----------
See report of independent auditors and accompanying notes to the statement of
gross income and direct operating expenses.
11
<PAGE>
FOSTER'S LANDING APARTMENTS
NOTES TO STATEMENT OF GROSS INCOME
AND DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICY
BRE Properties, Inc. ("BRE") acquired Foster's Landing Apartments ("the
Property") on September 27, 1996 from an unrelated party. The Property is a
490-unit apartment community located in Foster City, California.
Expenditures for repairs, maintenance and minor renewals are charged to expense
as incurred, while those expenditures that improve or extend the estimated
useful life of the Property are capitalized.
NOTE 2. BASIS OF PRESENTATION
The Statement of Gross Income and Direct Operating Expenses excludes the
following expenses which are not comparable with those resulting from the
proposed future operations of the Property:
- - Depreciation and amortization expense
- - Mortgage interest expense
Property taxes have not been adjusted to reflect the estimated reassessed value
of the Property after acquisition by BRE.
BRE has not provided for federal income taxes because it believes it qualifies
as a real estate investment trust under Section 856-860 of the Internal Revenue
Code and similar California statutes and distributes substantially all of its
taxable income to its shareholders.
BRE is not aware of any material factors relating to the Property that would
cause the reported financial information not to be indicative of future
operating results.
12
<PAGE>
SUPPLEMENTAL SCHEDULE
FOSTER'S LANDING APARTMENTS
STATEMENT OF GROSS INCOME
AND DIRECT OPERATING EXPENSES
(UNAUDITED)
FOR THE PERIOD JANUARY 1, 1996 TO SEPTEMBER 27, 1996
GROSS INCOME
Rental income....................... $4,993,539
Other income........................ 66,497
-----------
5,060,036
DIRECT OPERATING EXPENSES - NOTE 2
Property taxes...................... 341,377
Salaries and wages.................. 282,681
Utilities........................... 173,684
Repairs and maintenance............. 176,703
Management fees..................... 176,366
Insurance........................... 151,054
General and administrative.......... 120,995
-----------
1,422,860
-----------
TOTAL GROSS INCOME AND DIRECT OPERATING
EXPENSES $ 3,637,176
-----------
-----------
13
