<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended January 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-5305
BRE PROPERTIES, INC.
----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 94-1722214
---------------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Montgomery Street
Telesis Tower
Suite 2500
San Francisco, CA 94104
----------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (415) 445-6530
------------------
Inapplicable
----------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X . No .
--- ---
Number of shares of Class A common stock
outstanding as of January 31, 1994 10,916,483
------------------
This report consists of 16 pages.
The Exhibit Index is located on page 14.
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
BRE PROPERTIES, INC.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
BALANCE SHEETS (Dollar amounts in thousands, except share data)
- --------------------------------------------------------------------------------------
January 31, 1994 July 31, 1993
(unaudited)
---------------- -------------
ASSETS
<S> <C> <C>
Equity investments in real estate $ 309,474 $ 282,012
Less: Accumulated depreciation and amortization (40,800) (37,563)
--------- ---------
268,674 244,449
Investments in limited partnerships 1,128 2,122
--------- ---------
Real estate portfolio 269,802 246,571
Mortgage loans 4,660 4,836
Allowance for possible losses (1,000) (1,000)
--------- ---------
273,462 250,407
Cash and short-term investments 16,837 45,109
Other assets 5,141 4,416
--------- ---------
Total assets $ 295,440 $ 299,932
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and other liabilities $ 3,170 $ 3,988
Mortgage loans payable 45,365 46,692
--------- ---------
Total debt 45,365 46,692
--------- ---------
Total liabilities 48,535 50,680
--------- ---------
Shareholders' equity
Class A common stock, $.01 par value, issued and
outstanding 10,916,483 at January 31, 1994 and
10,912,399 at July 31, 1993 109 109
Additional paid-in capital 211,340 211,212
Undistributed net realized gain on sales of properties 35,456 37,931
--------- ---------
Total shareholders' equity 246,905 249,252
--------- ---------
Total liabilities and shareholders' equity $ 295,440 $ 299,932
--------- ---------
--------- ---------
</TABLE>
See notes to financial statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
BRE PROPERTIES, INC.
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
STATEMENTS OF INCOME (unaudited)
(Dollar amounts in thousands, except per share data)
- -------------------------------------------------------------------------------------------------------
For the Three For the Six
Months Ended Months Ended
January 31, January 31,
--------------------- --------------------
<S> <C> <C> <C> <C>
1994 1993 1994 1993
---- ---- ---- ----
REVENUE
Rental income $12,779 $10,210 $24,911 $19,789
Interest on short-term investments 129 56 404 135
Interest income on mortgage loans 129 139 260 278
Income from limited partnerships 149 144 254 245
Other income 99 44 196 76
------- ------- ------- -------
Total revenue 13,285 10,593 26,025 20,523
------- ------- ------- -------
EXPENSES
Operating expenses of equity investments 4,386 2,859 8,637 5,931
Provision for depreciation and amortization 1,663 1,274 3,236 2,497
Interest expense 950 1,633 1,957 3,167
General and administrative 807 757 1,724 1,572
------- ------- ------- -------
Total expenses 7,806 6,523 15,554 13,167
------- ------- ------- -------
Income before gain on sales of investments 5,479 4,070 10,471 7,356
Gain on sales of investments 169 10,375 169 10,572
Less: Related advisory fee (16) (1,037) (16) (1,057)
------- ------- ------- -------
Net gain on sales of investments 153 9,338 153 9,515
------- ------- ------- -------
NET INCOME $ 5,632 $13,408 $10,624 $16,871
------- ------- ------- -------
------- ------- ------- -------
Income per share
Primary
Income before gain on sales of investments $ .50 $ .51 $ .96 $ .93
Net gain on sales of investments .01 1.18 .01 1.20
----- ------ ------ -----
Net income $ .51 $1.69 $ .97 $2.13
----- ----- ----- -----
----- ----- ----- -----
Dividends declared $ .60 $ .60 $1.20 $1.20
----- ----- ----- -----
----- ----- ----- -----
Weighted average shares outstanding 10,939 7,933 10,938 7,933
</TABLE>
See notes to financial statements
-3-
<PAGE>
<TABLE>
<CAPTION>
BRE PROPERTIES, INC.
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS (unaudited)
(Dollar amounts in thousands)
- ------------------------------------------------------------------------------------------
For the Six Months
Ended
January 31
-----------------------
1994 1993
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 10,624 $ 16,871
Non-cash revenues and expenses included in income:
Net gain on tax-deferred exchanges (9,338)
Net gain on other sales (153) (178)
Provision for depreciation and amortization 3,236 2,497
Increase (decrease) in accounts payable (818) 43
Other (increase) decrease 552 (436)
-------- --------
CASH FLOWS GENERATED BY OPERATING ACTIVITIES 13,441 9,459
-------- --------
Cash flows from investing activities:
Equity investments:
Property purchased (24,371)
Subsequent improvements (69)
Invested in property acquired through tax-deferred exchange
Mortgage loan proceeds (17,500)
Cash (1,556)
Apartment expansion (1,387)
Tenant improvements and lease commissions:
Shopping centers (820) (325)
Office, light industrial and warehouse (585) (324)
Reconditioning of light industrial buildings (117) (32)
Improvements to apartments (113) (46)
Repayments on mortgage loans receivable 176 180
-------- --------
NET CASH FLOWS USED IN INVESTING ACTIVITIES (27,286) (19,603)
-------- --------
Cash flows from financing activities:
Mortgage loans payable:
Prepayments (1,017)
Other principal payments (310) (395)
New mortgage loan payable on property acquired
through tax-deferred exchange 17,500
Dividends paid (13,100) (9,507)
-------- --------
NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES (14,427) 7,598
-------- --------
Decrease in cash and short-term investments (28,272) (2,546)
Balance at beginning of year 45,109 9,846
-------- --------
Balance at end of period $ 16,837 $ 7,300
-------- --------
-------- --------
</TABLE>
See notes to financial statements.
-4-
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
BRE PROPERTIES, INC.
January 31, 1994
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and should be read in conjunction with the company's Annual Report
on Form 10-K for the fiscal year ended July 31, 1993, together with the portions
of the company's 1993 Annual Report to shareholders incorporated therein by
reference. In the opinion of management, all adjustments (consisting of normal
recurring adjustments only) have been made which are necessary for a fair
statement of the results for the interim periods presented herein.
NOTE B - NET INCOME PER SHARE
Primary net income per share is based upon the average number of shares
outstanding during the periods, increased for the assumed exercise of vested,
in-the-money stock options.
NOTE C - LITIGATION
On December 6, 1993, Big V Supermarkets, Inc. and Somers Development
Corporation filed a complaint in the United States District Court for the
Southern District of New York alleging chemical contamination of the soil and
groundwater underlying the Baldwin Place Shopping Center in Somers, New York.
BRE, which owned the land underlying the property from 1974 to 1983, as well as
certain other present or former owners or tenants of the property, have been
named as defendants in the lawsuit. The complaint seeks recovery of $1,300,000
as the owners' costs to date, $9,600,000 as lost profits on an aborted sale of
the property and $4,000,000 as loss of a development opportunity. BRE has
answered the complaint and intends to vigorously defend the allegations. BRE has
also notified the approximately 30 insurance companies which provided coverage
to BRE at various points during BRE's ownership of the land.
NOTE D - SUBSEQUENT EVENT
On February 28, 1994, the Directors declared a dividend of $.60 per share,
payable March 24, 1994 to shareholders of record March 11, 1994.
-5-
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
BRE PROPERTIES, INC.
January 31, 1994
LIQUIDITY AND CAPITAL RESOURCES
The company's cash and short-term investments totaled $16,837,000 at January 31,
1994, down from $45,109,000 at July 31, 1993.
In September 1993, BRE invested $24,371,000 in three garden apartment
communities and has subsequently spent $69,000 for improvements. Cimmaron (184
units), Hacienda (192 units) and Westpark (96 units) are adjacent properties
located in Mira Mesa, an established residential and commercial area in San
Diego, California. Occupancy at these properties was 90% at January 31, 1994.
During the first quarter, BRE also purchased 5.5 acres of undeveloped land
adjacent to the Scottsdale Cove Apartments in Scottsdale, Arizona on which 116
units are currently being constructed. This addition will expand the total units
in the Scottsdale Cove to 316. The estimated total cost is $5,900,000, of which
$1,387,000 had been disbursed through January 31, 1994.
An additional $1,431,000 was invested during the six months ended January 31,
1994 in tenant improvements and leasing commissions at shopping centers,
warehouse, light-industrial and office buildings. The company also prepaid
without penalty two mortgage loans aggregating $1,017,000, both of which had
interest rates of 9.5%.
Cash commitments at January 31, 1994 include the March 24, 1994 dividend payment
of approximately $6,550,000. BRE has agreed, subject to the satisfaction of
certain conditions, to purchase the 232-unit Terra Nova Villas Apartments in
Chula Vista, California for a purchase price of $14,575,000. BRE's cash
investment would be $5,335,000, subject to the existing $9,240,000 of fixed-rate
(5.574%) bond financing. The bond financing matures in March 1995. Depending on
market conditions at that time, BRE may repay the bonds in cash, renegotiate the
terms of the bonds or refinance the property with another lender. In addition,
BRE has agreed, subject to the satisfaction of certain conditions, to purchase
the 144-unit Winchester Apartments, adjacent to the Mira Mesa properties
acquired in September 1993. The all-cash purchase price will be $7,400,000.
In February 1994, BRE received the proceeds from a $13,600,000 first mortgage
loan secured by the newly acquired Mira Mesa apartments. The interest rate is
7%, with an 11-year maturity and amortization based on 25 years. Depending on
market conditions in 11 years, the then-outstanding principal balance of
$10,294,000 may be satisfied through, among other things, renegotiation of terms
with the existing lender, refinancing the property with another lender or
through a sale of assets. The company has also signed a commitment for a
refinance of Selby
-6-
<PAGE>
Ranch Apartments in Sacramento, California. The current loan on Selby Ranch is
approximately $6,800,000. The new loan for $13,000,000 will generate a net
amount of approximately $6,200,000 of funds available for new investments.
Funding is anticipated by March 31, 1994, subject to documentation, appraisals
and other closing conditions.
In addition, since its inception, the company has had unsecured lines of credit
from one or more commercial banks. These credit lines have had a one-year term
and were available for short-term working capital needs, such as financing new
tenant improvements at existing properties. The lines of credit totaled
$10,000,000 at July 31, 1993. During the quarter ended January 31, 1994, the
company negotiated increases in the lines of credit to $30,000,000, lengthened
the term to two years and reached agreement with the banks that the proceeds
could be used to make real estate equity investments. There were no borrowings
outstanding under these lines of credit at January 31, 1994.
RESULTS OF OPERATIONS
Net income for the quarter and six months ended January 31, 1994 was $5,632,000
($.51 per share), and $10,624,000 ($.97 per share), respectively, compared to
$13,408,000 ($1.69 per share) and $16,871,000 ($2.13 per share) for the
comparable periods last year. Included in the January 31, 1994 results were net
gains on sales of investments of $153,000 ($.01 per share) for both the quarter
and the six months. The prior year's results included net gains on sales of
investments of $9,338,000 ($1.18 per share) and $9,515,000 ($1.20 per share) for
the quarter and six months, respectively. The per share results for the quarter
and six months ended January 31, 1994 reflect 3,005,000 (38%) more weighted
average shares outstanding as the result of the March 1993 public offering of
1,500,000 shares and the June 1993 conversion of debentures into common stock.
Funds from operations totaled $7,142,000 and $13,708,000 for the quarter and six
months ended January 31, 1994, up 34% and 39%, respectively, from the same
periods last year. Funds from operations is defined as net income (computed in
accordance with generally accepted accounting principles), excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation and
amortization.
The January 17, 1994 earthquake, epicentered in Northridge, California, resulted
in damage both to Village Green Apartments in La Habra and to the El Camino
Shopping Center in Woodland Hills. No fatalities or injuries occurred. At
Village Green, damage was limited to cracking in plaster walls, and repairs have
since been completed. Damage was more severe at El Camino, with widespread
cracking occurring in interior sheet rock walls, concrete slabs, asphalt paving
in the parking lot and some cracking of exterior masonry walls. Ceiling tiles
and light fixtures fell in several tenant spaces, window seals popped and
several plate-glass windows broke. Separation occurred between some tenant store
fronts and the sidewalk. Most tenants reopened for business within three days.
Although temporary repairs have been completed, the company is still assessing
the extent of damage, the total costs of repair or replacement and the financial
obligations of the company and its tenants under the terms of tenant leases. BRE
carries
-7-
<PAGE>
earthquake insurance on the property with a deductible of 5% of the estimated
replacement cost. The estimated replacement cost for the entire shopping center
is approximately $11,000,000, of which 5% is $550,000 ($.05 per share).
BRE continues to experience the effects of California's economic recession,
particularly in its light industrial and retail properties. The failure of a few
small retailers at The Hub (where occupancy declined to 88% from 93% at July 31,
1993), the closure of a restaurant at El Camino Shopping Center and the absence
of leases for Fremont 3 (64,000 square feet) and 515 Ellis (29,000 square feet)
provide tangible evidence that California's economic problems are not behind us.
Within this difficult economic climate, however, some leasing activity is
beginning to emerge. At The Hub, leases are out for signature to two new
tenants. One is a 9,600 square foot restaurant; the other an 8,400 square foot
specialty food market. Store openings are scheduled for July 1994, thereby
returning occupancy to 91%.
A lease for 56,300 square feet (66%) is being finalized at the 86,000 square
foot 525 Almanor Building, which has been vacant since June 1991. Under the
terms of this new five-year lease, both BRE and the tenant will contribute to
the cost of tenant improvements, some of which will have value beyond the
expiration of the lease. BRE's cost for this work will be $750,000 ($13.31 per
square foot); the net effective monthly rent for the lease term is $34,705, or
$.616 per square foot.
At the 358,000 square foot Pomona Warehouse property, the tenant, Builders
Emporium, has terminated its business operations and vacated the premises.
Collins & Aikman Group, Inc., the parent corporation of Builders Emporium,
remains liable on the lease, which runs through April 30, 1995. However, the
monthly rent of $104,000 has not been paid for January, February or March. BRE
has regained physical possession of the property and is taking legal action to
collect the amounts due. This property is treated as vacant for the calculation
of overall occupancy which follows.
At January 31, 1994, overall occupancy levels by class of property were as
follows:
<TABLE>
<CAPTION>
PROPERTY TYPE OVERALL OCCUPANCY
-----------------------------------------------------
<S> <C>
Apartment Communities 94%
Shopping Centers 91
Light-Industrial Buildings 62
Warehouse/Distribution Buildings 24
Office Buildings 100
---
WEIGHTED AVERAGE 85%
---
---
</TABLE>
The weighted average occupancy is calculated by multiplying the occupancy for
each property by its square footage and dividing by the total square footage in
the portfolio.
-8-
<PAGE>
REVENUE
Rental income, comprising approximately 96% of total revenue, rose 25% for both
the quarter and six months ended January 31, 1994, when compared to the year-
earlier periods. These increases primarily reflect the newly-acquired Brookdale
Glen, Mira Mesa, Montanosa, and Verandas apartments, which produced gross rents
aggregating $3,169,000 and $5,743,000 for the quarter and six months,
respectively. Apartments owned for at least two full years contributed $111,000
and $330,000 in higher revenue for the quarter and six months, respectively,
which was offset for the quarter by declines in revenues from light industrial
properties. Revenues continue to be constrained by the vacant light-industrial
properties, and there can be no assurance that further vacancies will not occur
in these or in other classes of properties. In addition, rents at
warehouse/distribution centers declined as a result of the non-payment of the
January rent on Pomona Warehouse.
Interest income on short-term investments increased $73,000 and $269,000 from
the comparable quarter and six months last year as a result of higher average
invested balances.
EXPENSES
Operating expenses of equities increased $1,527,000 and $2,706,000 for the
quarter and six months from the comparable periods last year, primarily due to
expenses on the six new apartment acquisitions. Expenses incurred in both
periods include taxes, insurance and maintenance on vacant properties, which
would ordinarily be paid by tenants under the terms of net leases. The non-cash
depreciation charge also rises with the addition of new properties.
Interest expense was down $683,000 and $1,210,000 for the quarter and six
months, respectively, from the comparable periods last year. A quarterly
reduction of $1,125,000 occurred as a result of the June 1993 conversion of
9 1/2% debentures into common stock. This reduction was partially offset by
interest expense on two new first mortgage loans, $20,000,000 secured by Sharon
Green Apartments (funded in February 1993) and $17,500,000 secured by Montanosa
Apartments (funded in December 1992).
GAIN ON SALES
During the quarter and six months ended January 31, 1994, the Westbar
partnership, in which BRE is a limited partner, recorded a sale of the Metro
Power Center, Phase IV. BRE's share of the gross gain was $169,000. The net gain
was $153,000, since 10% of the gross gain was credited to the prepaid advisory
fee to BankAmerica Corporation for termination of its advisory agreement with
the company in September 1987. Originally $4,508,000, the prepaid advisory fee
had been reduced to $1,602,000 at January 31, 1994. The company has recorded in
its financial statements gains totaling $59,784,000 which have been deferred for
tax purposes since the company's 1970 inception through January 31, 1994.
-9-
<PAGE>
DIVIDENDS
The dividends of $.60 per share for the quarter and $1.20 for the six months
ended January 31, 1994 were 92% and 96%, respectively, of funds from operations.
Dividends exceeded reportable net income and taxable income for each of these
periods, which are after deduction of the non-cash charge for depreciation
expense. To the extent that dividends paid exceed taxable income, the excess is
a return of capital, which is generally not currently taxable to the
shareholders but will reduce the tax basis in their shares. Any return of
capital that is paid after this tax basis is reduced to zero would be taxed as
capital gain.
-10-
<PAGE>
PART II - OTHER INFORMATION
BRE PROPERTIES, INC.
ITEM 1. LEGAL PROCEEDINGS
On December 6, 1993, Big V Supermarkets, Inc. and Somers Development Corporation
filed a complaint in the United States District Court for the Southern District
of New York alleging chemical contamination of the soil and groundwater
underlying the Baldwin Place Shopping Center in Somers, New York. BRE, which
owned the land underlying the property from 1974 to 1983, as well as certain
other present or former owners or tenants of the property, have been named as
defendants in the lawsuit. The complaint seeks recovery of $1,300,000 as the
owners' costs to date, $9,600,000 as lost profits on an aborted sale of the
property and $4,000,000 as loss of a development opportunity. BRE has answered
the complaint and intends to vigorously defend the allegations. BRE has also
notified the approximately 30 insurance companies which provided coverage to BRE
at various points during BRE's ownership of the land.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders held on November 23, 1993, the
shareholders elected two Directors for three-year terms, approved the amendment
to the Certificate of Incorporation to increase the number of authorized shares
to 50,000,000, and the selection of auditors by the following votes:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
-------------------- ------- -------
No. of % of $ of No. of No. of
Shares Quorum Outstanding Shares Shares
------ ------ ----------- ------ ------
<S> <C> <C> <C> <C> <C>
ITEM NO. 1
(Election of Directors)
CLASS III
C. Preston Butcher 9,630,245 99 88 - 70,614
Eugene P. Carver 9,649,200 99 88 - 51,659
ITEM NO. 2
(Amendment to Certificate of
Incorporation to increase number 8,946,007 92 82 629,798 125,054
of authorized shares to 50,000,000)
ITEM NO. 3
(Approval of Auditors) 9,617,334 99 88 24,663 58,867
</TABLE>
There were no broker non-votes on any of the three items.
The terms of office of the company's three other directors continued after the
Annual Meeting, as follows:
<TABLE>
<CAPTION>
Term Expires
------------
<S> <C>
Richard C. Chenoweth 1995
Malcolm R. Riley 1994
Arthur G. von Thaden 1994
</TABLE>
Following the Annual Meeting, Mr. Chenoweth retired for medical reasons. The
Directors appointed John McMahan, Chairman and Chief Executive Officer of
Mellon/McMahan Real Estate Advisors, Inc., as a Class II Director with a term
expiring in 1995.
-11-
<PAGE>
PART II - OTHER INFORMATION
BRE PROPERTIES, INC.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following exhibits are submitted herewith:
11. Computation of Earnings Per Share
(b) Reports on Form 8-K. The company did not file any reports on
Form 8-K during the quarter for which this report is filed.
-12-
<PAGE>
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 thereunto duly authorized.
BRE PROPERTIES, INC.
(Registrant)
Date_______________________________ ___________________________________
Howard E. Mason, Jr.
Senior Vice President, Finance
Date_______________________________ ___________________________________
Ellen G. Breslauer
Secretary and Treasurer
-13-
<PAGE>
EXHIBIT INDEX
Number Description Page
- ------ ----------- ----
11 Computation of Earnings per Share 15
-14-
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE
- --------------------------------------------------------------------------------
BRE PROPERTIES, INC.
STATEMENT OF EARNINGS PER SHARE
On June 8, 1993, the company called for redemption at par all of the 9 1/2%
Convertible Subordinated Debentures due 2008. At January 31, 1993, $46,883,000
had been outstanding. Of that amount, $46,180,000 converted into shares of
common stock, at a price of $31 per share, during the quarter ended July 31,
1993. The remaining $703,000 was redeemed in cash. These debentures were not
common stock equivalents.
Weighted average shares outstanding are computed by adding the shares
outstanding at each month end and dividing that result by the number of months
elapsed in the year-to-date period. No interest expense was charged on
debentures converted before an interest date. Interest expense on debentures
converted after an interest date was charged only through the interest date
immediately prior to the date of the conversion.
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
January 31, January 31,
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Computation:
Shares outstanding, beginning of year 10,912,399 7,920,041 10,912,399 7,920,041
Averaged for dates of grants, exercises or
conversions:
Exercisable, in-the-money, stock options 22,397 11,174 22,397 11,174
Restricted shares granted, less forfeitures 2,775 1,635 2,400 1,439
Exercise of stock options 1,334 550 934 393
---------- ---------- ---------- ----------
Weighted average shares outstanding 10,938,905 7,933,400 10,938,130 7,933,047
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income before gain on sales of investments $5,479,215 $4,070,172 $10,471,771 $7,356,351
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Computation $.50 $.51 $.96 $.93
---- ---- ---- ----
---- ---- ---- ----
Net gain on sales of investments $152,509 $9,337,500 $152,509 $9,515,089
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Computation $.01 $1.18 $.01 $1.20
---- ---- ---- ----
---- ---- ---- ----
PRIMARY EARNINGS PER SHARE $.51 $1.69 $.97 $2.13
---- ---- ---- ----
---- ---- ---- ----
</TABLE>
-15-
<PAGE>
EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE (Continued)
BRE PROPERTIES, INC.
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
January 31, January 31,
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
FULLY DILUTED EARNINGS PER SHARE
Shares outstanding, end of period 10,916,483 7,922,226 10,916,483 7,922,226
Exercisable, in-the-money, stock options 22,397 11,174 22,397 11,174
Assumed conversion of:
9 1/2% Debentures due 2008 1,512,354 1,512,354
---------- ---------- ---------- ----------
Total Shares 10,938,880 9,445,754 10,938,880 9,445,754
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Income before gain on sales of
investments $5,479,215 $4,070,172 $10,471,771 $7,356,351
Add interest on:
9 1/2% Debentures due 2008 1,124,559 2,249,118
---------- ---------- ---------- ----------
Total Income $5,479,215 $5,194,731 $10,471,771 $9,605,469
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
As computed $.50 $.55 $.96 $1.02
---- ---- ---- ----
---- ---- ---- ----
Net gain on sales of investments $152,509 $9,337,500 $152,509 $9,515,089
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
As computed $.01 $.99 $.01 $1.01
---- ---- ---- ----
---- ---- ---- ----
Fully diluted earnings per share
as reported $.51 $1.54 $.97 $2.03
---- ---- ---- ----
---- ---- ---- ----
</TABLE>
-16-
