<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 AND EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1995
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 94104-5525
--------------------------------- --------------------
(Address of principal office) (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 April 30, 1995 10,937,983
------------------
<PAGE>
PART I FINANCIAL INFORMATION
Item 1 - FINANCIAL STATEMENTS
BRE PROPERTIES, INC.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCE SHEETS (Dollar amounts in thousands)
- -------------------------------------------------------------------------------------------------------------------
April 30, July 31,
1995 1994
----------------- -------------------
<S> <C> <C>
ASSETS
Equity investments in real estate $ 369,648 $ 325,519
Less: Accumulated depreciation and amortization (45,925) (41,264)
--------- ---------
323,723 284,255
Investments in limited partnerships 1,146 1,109
--------- ---------
Real estate portfolio 324,869 285,364
Mortgage loans 5,983 4,516
Allowance for possible losses (1,250) (1,000)
--------- ---------
329,602 288,880
Cash and short-term investments 9,674 28,938
Other assets 4,645 5,077
--------- ---------
Total assets $ 343,921 $ 322,895
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and other liabilities $ 3,318 $ 3,466
Mortgage loans payable 96,886 73,944
--------- ---------
Total liabilities 100,204 77,410
--------- ---------
Shareholders' equity
Class A common stock, $0.01 par value, issued and
outstanding 10,937,983 at April 30,1995 and
10,916,483 at July 31, 1994 109 109
Additional paid-in capital 212,003 211,340
Undistributed net realized gain on sales of properties 31,605 34,036
--------- ---------
Total shareholders' equity 243,717 245,485
--------- ---------
Total liabilities and shareholders' equity $ 343,921 $ 322,895
--------- ---------
--------- ---------
</TABLE>
See notes to financial statements.
2
<PAGE>
BRE PROPERTIES, INC.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
(Amounts in thousands, except in per share data)
- ----------------------------------------------------------------------------------------------------------------------
For the three months For the nine months
ended April 30 ended April 30
------------------------- -----------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE
Rental income $15,270 $12,665 $44,589 $37,576
Interest on short-term investments 132 186 486 591
Interest income on mortgage loans 189 123 493 382
Income from limited partnerships 140 120 371 374
Other income 200 90 473 287
-------- -------- -------- --------
Total revenue 15,931 13,184 46,412 39,210
-------- -------- -------- --------
EXPENSES
Operating expenses of equity investments 4,968 4,039 14,328 12,675
Provision for depreciation and amortization 1,958 1,707 5,698 4,943
Interest expense 1,886 1,209 5,226 3,166
General and administrative 1,326 817 3,968 2,542
-------- -------- -------- --------
Total expenses 10,138 7,772 29,220 23,326
-------- -------- -------- --------
Income before gain (loss) on investments 5,793 5,412 17,192 15,884
Gain on sales of investments 1,244 2,633 169
Less: Related advisory fee (124) (263) (16)
-------- -------- -------- --------
Net gain on sales of investments 1,120 2,370 153
Provision for possible investment losses (2,000) (2,000)
-------- -------- -------- --------
NET INCOME $4,913 $5,412 $17,562 $16,037
-------- -------- -------- --------
-------- -------- -------- --------
Income per share
Primary
Income before gain on
sales of investments $.53 $.50 $1.57 $1.46
Net gain on sales of investments .10 .22 .01
Provision for possible investment losses (.18) (.18)
-------- -------- -------- --------
NET INCOME $.45 $.50 $1.61 $1.47
-------- -------- -------- --------
-------- -------- -------- --------
Dividends declared $.63 $.60 $1.86 $1.80
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average shares outstanding 10,937 10,936 10,935 10,935
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
See notes to financial statements.
3
<PAGE>
BRE PROPERTIES, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
(Dollar amounts in thousands)
- -------------------------------------------------------------------------------------------------------
For the nine months ended
April 30
--------------------------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $17,562 $16,037
Non-cash revenues and expenses included in income:
Net gain on tax-deferred exchanges (2,370)
Net gain on other sales (153)
Provision for depreciation and amortization 5,698 4,943
Provision for possible investment losses 2,000
Increase (decrease) in accounts payable and other liabilities (148) (1,239)
Other (increase) decrease 473 790
-------- --------
CASH FLOWS GENERATED BY OPERATING ACTIVITIES 23,215 20,378
-------- --------
Cash flows from investing activities:
Equity investments:
Apartments purchased (18,041) (46,346)
Apartment expansion (1,687) (2,574)
Refurbishment of newly acquired apartments (116) (165)
Funds in escrow for tax-deferred exchange 2,591
Improvements to existing apartments (55) (205)
Space preparation and tenant improvements:
Shopping centers (2,466) (915)
Light industrial and warehouse (616) (947)
Reconditioning of industrial buildings (120) (550)
Advances on mortgage loans receivable (1,600)
Repayments on mortgage loans receivable 383 307
-------- --------
NET CASH FLOWS USED IN INVESTING ACTIVITIES (21,727) (51,395)
-------- --------
Cash flows from financing activities:
Mortgage loans payable:
New mortgage loans payable 28,958
Prepayments (1,017)
Other principal payments (759) (434)
Dividends paid (19,993) (19,650)
-------- --------
NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES (20,752) 7,857
-------- --------
Decrease in cash and short-term investments (19,264) (23,160)
Balance at beginning of year 28,938 45,109
-------- --------
Balance at end of period $9,674 $21,949
-------- --------
-------- --------
</TABLE>
4
<PAGE>
BRE PROPERTIES, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
April 30, 1995
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and should be read in conjunction
with the company's Annual Report on Form 10-K for the fiscal year ended July 31,
1994, together with the portions of the company's 1994 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 weighted average number of
shares outstanding during the periods, increased for the assumed exercise of
vested, in-the-money stock options.
NOTE C - LITIGATION
The company, because of the nature of its business, is sometimes subject to
various threatened or filed legal claims, including certain environmental
actions. While it is not feasible to predict or determine the ultimate outcome
of these matters, in the opinion of management, none of these actions,
individually or in the aggregate, will have a material effect on the company's
results of operations, cash flows, liquidity or financial position.
NOTE D - COMMITMENTS
BRE has entered into a development and option agreement with Picerne
Development Corporation (Picerne), an Arizona corporation, which is a wholly
owned subsidiary of Picerne Investment Corporation, a privately held apartment
developer headquartered in Rhode Island. Picerne is developing Arcadia Cove, a
432-unit apartment complex in Phoenix, Arizona. The development is being
financed through two loans made by Wells Fargo Bank. The two loans are for
$4,226,000 (standing loan) and $19,125,000 (construction loan), for a total of
$23,351,000. BRE has guaranteed repayment of the loans and has the right to
acquire the property at or before completion of the construction, which is
currently expected in mid-1996. In the meantime, BRE is making monthly option
payments to Picerne of $60,000 (February 1995- July 1995) and $134,000 (August
1995- March 1996). BRE's purchase commitment to Picerne upon completion is
$22,396,000, plus the option payments and interest cost through the date of
purchase.
In addition, BRE has committed to purchase two phases of Newport Landing
Apartments, in Glendale, Arizona. Phase I, which includes 240 units constructed
in 1987, is scheduled for purchase in July 1995, for $9,235,000. Phase II is
also planned to include 240 units, with construction expected to begin during
the summer of 1995 and be completed 12 months
5
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thereafter. Picerne, which owns Phase I, will be developing Phase II for BRE.
BRE's cost for Phase II is projected to be $12,784,000.
NOTE E - SUBSEQUENT EVENTS
On May 22, 1995, the Directors declared a dividend of $.63 per share,
payable June 22, 1995 to shareholders of record June 2, 1995.
On June 6, 1995, the company announced the election of Frank C. McDowell
as president and chief executive officer and as a director. The company's
former president and chief executive officer, Arthur G. von Thaden, became
chairman of the board of directors of the company.
6
<PAGE>
BRE PROPERTIES, INC.
- -------------------------------------------------------------------------------
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
April 30, 1995
LIQUIDITY AND CAPITAL RESOURCES
The company's cash and short-term investments totaled $9,674,000 at April 30,
1995, down from $28,938,000 at July 31, 1994.
In August 1994, BRE entered into an agreement to acquire seven garden apartment
communities, aggregating 1,301 units, in Tucson, Arizona from the Schomac Group,
a privately held apartment and self-storage developer headquartered in Tucson
and not affiliated with BRE. The six properties purchased during the nine
months ended April 30, 1995 were as follows:
<TABLE>
<CAPTION>
Principal
Amount of
Number Mortgages Interest
Name of Units Cost Cash Assumed Rate
- ---- -------- ---- ---- ------- ----
<S> <C> <C> <C> <C> <C>
Casas Lindas 144 $7,564,000 $7,564,000 - -
Colonia del Rio 176 8,868,000 3,558,000 $5,310,000 8.00%
Fountain Plaza 197 4,535,000 1,384,000 3,151,000 7.50%
Hacienda del Rio 248 9,296,000 418,000(1) 5,645,000 6.45%
Oracle Village 144 6,046,000 1,826,000 4,220,000 7.88%
SpringHill 224 8,666,000 3,291,000 5,375,000 8.00%
---- ----------- ----------- -----------
TOTAL 1,133 $44,975,000 $18,041,000 $23,701,000
----- ----------- ----------- -----------
----- ----------- ----------- -----------
<FN>
(1) The cash investment in Hacienda del Rio included $3,233,000 in
proceeds from a tax-deferred exchange for Marymoor Warehouse, in
Redmond, Washington.
</TABLE>
The seventh property, Camino Seco Village, is expected to be acquired during the
quarter ended July 31, 1995, as a tax-deferred exchange for 515 Ellis. 515 Ellis
was sold during the quarter ended April 30, 1995, and the proceeds were placed
in escrow for a tax-deferred exchange.
The mortgages on Fountain Plaza and Hacienda del Rio are fully amortizing, with
final maturities in 2028. The three other mortgages assumed mature in the year
2000, with aggregate balloon payments of $13,939,000 due at that time.
Depending on market conditions at maturity, the company may choose, among other
things, to renegotiate the terms with the existing lenders, refinance the
properties with other lenders or sell assets to repay the balloon amounts.
In October 1994, concurrent with the purchase of these apartment communities,
BRE also funded a $1,500,000, one-year second mortgage loan, bearing interest at
10%, secured by the Mission Heights Apartments in Tucson, Arizona, to entities
affiliated with the seller. Provided that no event of default has occurred, the
borrower may request a one-year extension, during which the
7
<PAGE>
interest rate rises to 11%, and a second one-year extension, during which the
interest rate rises to 12%.
During the nine months ended April 30, 1995, construction was completed of a
116-unit expansion of the Scottsdale Cove Apartments in Scottsdale, Arizona. The
total cost of the expansion was $6,138,000, $1,687,000 of which was invested
during the nine months ended April 30, 1995.
As discussed further in Results of Operations, BRE has increased occupancy at
both The Hub and El Camino shopping centers. Space preparation and improvements
for new tenants cost $2,079,000 at The Hub and $387,000 at El Camino. In
addition, BRE invested $749,000 for a new tenant at 515 Ellis, which property
was subsequently sold for a reportable net gain of $1,120,000.
Cash commitments at April 30, 1995 include the June 22, 1995 dividend payment of
approximately $6,891,000 and the $9,235,000 purchase price for the first phase
of the Newport Landing Apartments (scheduled to close by July 31, 1995). The
acquisition may be funded through a tax-deferred exchange for the Pomona
Warehouse Property or by a combination of cash on hand and borrowings under the
existing lines of credit.
In addition, as more fully discussed in Note D of Notes to Financial Statements,
BRE plans to acquire Arcadia Cove, a 432-unit apartment community currently
under development, and the second phase of Newport Landing, in the fourth
quarter of fiscal 1996. The aggregate purchase price for these properties is
approximately $36,657,000 (including, in the case of Arcadia Cove, option
payments made by the company).
In addition to cash and short-term investments, the company has available bank
lines of credit totaling $30,000,000. There were no borrowings under those
lines of credit at April 30, 1995. Management believes that its liquidity and
financial resources are sufficient to meet anticipated cash requirements.
RESULTS OF OPERATIONS
Net income for the quarter and nine months ended April 30, 1995 was $4,913,000
($.45 per share) and $17,562,000 ($1.61 per share), respectively, compared to
$5,412,000 ($.50 per share) and $16,037,000 ($1.47 per share) for the same
periods last year. Included in the April 30, 1995 results were net gains on
sales of investments of $1,120,000 ($.10 per share) and $2,370,000 ($.22 per
share) for the quarter and nine months, compared to $153,000 ($.01 per share)
for the nine months last year. In addition, the quarter and nine months ended
April 30, 1995 include a provision for possible investment losses of $2,000,000
($.18 per share).
Funds from operations totaled $7,751,000 and $22,890,000 for the quarter and
nine months ended April 30, 1995, up 9% and 10% from the comparable 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, amortization and
provisions for possible investment losses.
8
<PAGE>
Leasing has improved at The Hub Shopping Center, with the opening of 8 new
stores during the past year. Both leasing and occupancy at The Hub are now 95%,
up from 89% at July 31, 1994. New tenants include Trader Joe's, which operates
62 specialty food markets, Old Navy (part of The Gap), Taco Bell, Styles for
Less and Country Harvest Buffet. At El Camino Shopping Center, occupancy is 92%,
up from 89% at July 31, 1994. Soil stabilization and repairs of structurally
damaged buildings continue as a result of the January 17, 1994 Northridge
earthquake. The repairs are estimated to be completed by July 1995, with most of
the costs covered by earthquake insurance. Taken together, the net operating
income at the two shopping centers improved by approximately 19% during the nine
months ended April 30, 1995 over the comparable period last year, which included
expenses for roof replacements of $157,000 at The Hub and $100,000 at El Camino.
In accordance with industry practices, commencing August 1, 1994, roof
replacements for all properties (which had previously been expensed) are
capitalized and depreciated over the expected useful life. Roof repairs continue
to be expensed.
In the industrial segment of the portfolio, two properties are currently vacant
and being marketed to prospective tenants: the 358,000 square foot warehouse in
Pomona, California and the 50,000 square foot Irvine Spectrum building in
Irvine, California. Preliminary sale negotiations are underway on Pomona
Warehouse, although there can be no assurance that a sale will be effected. As
discussed below, the carrying value of the Pomona Warehouse was reduced by
$1,750,000 during the third quarter.
At April 30, 1995, overall occupancy levels by class of property were as
follows:
PROPERTY TYPE OVERALL OCCUPANCY
-------------------------------------------------------------
Apartment Communities 95 %
Shopping Centers, including partnerships 96
Other 54
--
WEIGHTED AVERAGE 90 %
--
--
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.
REVENUE
Rental income, comprising approximately 96% of total revenue, rose 21% for the
quarter and 19% for the nine months ended April 30, 1995, respectively, from the
comparable periods last year. Apartments acquired since August 1, 1993
generated gross rents of $3,695,000 and $9,574,000 for the quarter and nine
months, up from $1,224,000 and $2,384,000 for the comparable periods last year.
Apartments owned for two or more years contributed $155,000 and $573,000,
respectively, in higher revenue (up 2%).
9
<PAGE>
As part of a financial settlement received in July 1994 from the former tenant
at Pomona Warehouse, BRE recorded $258,000 of rent during the first quarter
ended October 31, 1994. No additional rental revenue will be recorded until the
property is leased. Also during the first quarter ended October 31, 1994, the
tenant at Oak Creek I, who also occupies a portion of Oak Creek II, was
recapitalized, enabling it to pay BRE $175,000 of back rent and reimbursement
for other charges. During the quarter ended April 30, 1995, BRE reached
agreement with the former tenant at the Irvine Spectrum property. As a result of
the settlement, BRE received reimbursement for the calendar 1995 real estate
taxes, a portion of BRE's legal expenses and $121,000 of back rent.
Revenues continue to be constrained by the two vacant commercial properties,
Pomona Warehouse and Irvine Spectrum. There can be no assurance that additional
vacancies will not occur.
EXPENSES
Operating expenses of equity investments increased 23% and 13% for the quarter
and nine months ended April 30, 1995 from the year-earlier periods, primarily
due to expenses on the new apartment acquisitions. On January 17, 1995, a
combination of heavy rains, high winds and debris resulted in the collapse of an
approximately 1,200 square foot section of the roof (out of a total 85,680
square feet) at 525 Almanor. The damage has been repaired, for a total estimated
cost of $375,000. Most of this cost is expected to be recovered through
property insurance. BRE has expensed $100,000 as the amount of the deductible
under its property insurance coverage.
The two vacant commercial properties, Pomona Warehouse and Irvine Spectrum, had
no expense for real estate taxes through December 31, 1994, because the former
tenants had reimbursed the company for the real estate taxes. In addition, BRE
received reimbursement for the calendar 1995 real estate taxes from the former
tenant at Irvine Spectrum. Starting January 1, 1995, the annual cost for real
estate taxes for Pomona Warehouse is estimated to be $100,000 (reduced from the
previous estimate of $164,000). In addition, BRE is paying maintenance costs,
such as security, landscaping and insurance, for both the Pomona and Irvine
properties.
Interest expense rose 56% and 65% for the quarter and nine months ended April
30, 1995, respectively, from the comparable periods last year, reflecting the
approximately $50,301,000 principal amount of new mortgage loans on Selby Ranch,
Mira Mesa (Cimmaron, Hacienda and Westpark), and the Schomac apartments.
General and administrative expenses for the first quarter ended October 31, 1994
include $437,000 of legal costs paid to reach an out-of-court settlement with
Big V Supermarkets, Inc. and Somers Development Corporation regarding alleged
chemical contamination of the soil and ground water underlying the Baldwin Place
Shopping Center (a former BRE investment) in Somers, New York. In addition to
the legal costs which have been expensed, BRE paid $207,000 as its share of the
settlement. The $207,000 is being carried in accounts receivable. BRE is
seeking to recover the settlement amount as well as its legal costs from the
insurance companies which provided coverage to BRE at various times throughout
BRE's 1974-1983 ownership of the land underlying Baldwin Place. BRE has
received commitments from four insurance companies and is still pursuing a fifth
for full recovery of legal expenses to date.
10
<PAGE>
General and administrative expenses also include $50,000 paid to an executive
search firm in connection with the review of potential candidates to succeed Mr.
von Thaden as Chief Executive Officer, and $102,000 paid for investment banking
services in connection with the company's strategic planning process. Mr.
McMahan, acting as interim Chairman of the company, and Mr. Foley, acting as
head of the company's search committee, are receiving fees for their services in
such capacities of $10,000 and $5,000 per month, respectively. These amounts,
together with regular Directors' fees, are also included in general and
administrative expenses.
GAIN ON SALES
During the third quarter ended April 30, 1995, BRE recorded a gross gain of
$1,244,000 on the sale of its light industrial property located at 515 Ellis in
Mountain View, California. The sale is expected to be a tax-deferred exchange,
with the proceeds being invested in Camino Seco Village Apartments in Tucson,
Arizona.
During the second quarter ended January 31, 1995, BRE recorded a gross gain of
$1,389,000 on the tax-deferred exchange of Marymoor Warehouse in Redmond,
Washington. The proceeds were reinvested in Hacienda del Rio Apartments in
Tucson, Arizona. The net gain on the two transactions was $2,370,000 ($.22 per
share), after 10% of the gross gain was credited against 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 $1,278,000 at April 30, 1995. The company has recorded in
its financial statements through April 30, 1995 gains totaling $62,417,000 which
have been deferred for tax purposes since the company's 1970 inception.
PROVISION FOR POSSIBLE INVESTMENT LOSSES
Preliminary sale negotiations are underway on Pomona Warehouse, a currently
vacant light industrial property, located in Pomona, California.
During the quarter ended April 30, 1995, BRE recorded a $2,000,000 provision for
possible investment losses. Of this amount, $1,750,000 was charged against the
investment in Pomona Warehouse, thereby reducing its carrying value to
$9,359,000, the estimated net sale proceeds. The remaining $250,000 of the
provision was added to the allowance for possible investment losses, which
totaled $1,250,000 at April 30, 1995.
The sales of 515 Ellis and Pomona Warehouse are both intended to be treated as
tax-deferred exchanges.
DIVIDENDS
The $.63 per share dividend declared for the quarter ended April 30, 1995, was
approximately 89% of funds from operations.
11
<PAGE>
BRE PROPERTIES, INC.
PART II - OTHER INFORMATION
Item 5. OTHER INFORMATION
On June 6, 1995, the company announced the selection of Frank C.
McDowell as president and chief executive officer and as a director.
The company's former president and chief executive officer, Arthur G.
von Thaden, became chairman of the board of direcors of the
company.
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 June 9, 1995 /s/ Howard E. Mason, Jr.
--------------------- ---------------------------------------
Howard E. Mason, Jr.
Senior Vice President, Finance
Date June 9, 1995 /s/ Ellen G. Breslauer
--------------------- ----------------------------------------
Ellen G. Breslauer
Secretary and Treasurer
13
<PAGE>
EXHIBIT INDEX
Number Description
------ ------------
11 Computation of Earnings per Share
14
<PAGE>
BRE PROPERTIES, INC.
- -------------------------------------------------------------------------------
EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE
- -------------------------------------------------------------------------------
STATEMENT OF EARNINGS PER SHARE
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.
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
April 30 April 30
-------------------------------- ---------------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Computation:
Shares outstanding at beginning
of year 10,916,483 10,912,399 10,916,483 10,912,399
Averaged for dates of grants or
exercises:
Exercisable, in-the-money,
stock options 8,728 19,533 8,728 19,533
Restricted shares granted, less
forfeitures 9,000 2,750 8,100 2,504
Exercise of stock options 3,125 1,334 1,250 1,055
----------- ----------- ----------- -----------
Weighted average shares outstanding 10,937,336 10,936,016 10,934,561 10,935,491
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net income before gain on sales
of investments $5,792,420 $5,412,169 $17,191,748 $15,883,940
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Computation $.53 $.50 $1.57 $1.46
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net gain on sales of investments $1,120,357 - $2,370,119 $152,509
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Computation $.10 $ - $.22 $.01
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Provision for possible
investment losses $(2,000,000) $ - $(2,000,000) $ -
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Computation $(.18) $ - $(.18) $ -
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Primary earnings per share $.45 $.50 $1.61 $1.47
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
15
<PAGE>
EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
April 30 April 30
----------------------------- -------------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
FULLY DILUTED EARNINGS PER SHARE
Shares outstanding at end of
period 10,937,983 10,916,483 10,937,983 10,916,483
Exercisable, in-the-money stock
options 8,728 19,533 8,728 19,533
----------- ----------- ----------- -----------
Total shares 10,946,711 10,936,016 10,946,711 10,936,016
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Income before gain on sales of
investments $5,792,420 $5,412,169 $17,191,748 $15,883,940
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Computation $.53 $.50 $1.57 $1.46
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net gain on sales of investments $1,120,357 $ - $2,370,119 $152,509
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Computation $.10 $ - $.22 $.01
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Provision for possible
investment loss $(2,000,000) $ - $(2,000,000) $ -
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Computation $(.18) $ - $(.18) $ -
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Fully diluted earnings per share $.45 $.50 $1.61 $1.47
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1994
<PERIOD-START> AUG-01-1994
<PERIOD-END> APR-30-1995
<CASH> 9,674
<SECURITIES> 0
<RECEIVABLES> 10,628
<ALLOWANCES> (1,250)
<INVENTORY> 0
<CURRENT-ASSETS> 19,052
<PP&E> 370,794
<DEPRECIATION> (45,925)
<TOTAL-ASSETS> 343,921
<CURRENT-LIABILITIES> 3,318
<BONDS> 96,886
<COMMON> 109
0
0
<OTHER-SE> 243,608
<TOTAL-LIABILITY-AND-EQUITY> 343,921
<SALES> 46,412<F1>
<TOTAL-REVENUES> 46,412
<CGS> 14,328<F2>
<TOTAL-COSTS> 14,328
<OTHER-EXPENSES> 9,666<F3>
<LOSS-PROVISION> 2,000
<INTEREST-EXPENSE> 5,226
<INCOME-PRETAX> 15,192
<INCOME-TAX> 0
<INCOME-CONTINUING> 15,192
<DISCONTINUED> 0
<EXTRAORDINARY> 2,370<F4>
<CHANGES> 0
<NET-INCOME> 17,562
<EPS-PRIMARY> 1.61
<EPS-DILUTED> 1.61
<FN>
<F1>Rental and other revenue
<F2>Operating expenses of equity investments
<F3>Includes 5,698 of depreciation expense
<F4>Net gain on sales of investments
</FN>
</TABLE>
