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Company Release - 01/20/2004 16:45 | |
SAN FRANCISCO, Jan. 20 /PRNewswire-FirstCall/ -- BRE Properties, Inc., (NYSE: BRE) today reported operating results for the quarter and year ended December 31, 2003. Funds from operations (FFO), the generally accepted measure of operating performance for real estate investment trusts, totaled $26.2 million, or $0.51 per diluted share, during fourth quarter 2003. For the year, including approximately $7.3 million of legal settlement charges recognized during third quarter 2003, FFO totaled $103.8 million, or $2.14 per diluted share. Excluding the settlement charges, FFO for the year totaled $111.2 million, or $2.29 per diluted share. For the quarter and year ended December 31, 2002, FFO totaled $29.7 million, or $0.63 per diluted share, and $124.9 million, or $2.62 per diluted share, respectively. (A reconciliation of net income available to common shareholders to FFO is provided at the end of this release.) Net income available to common shareholders for the fourth quarter totaled $11.6 million, or $0.23 per diluted share, as compared with $26.0 million, or $0.56 per diluted share, for the same period 2002. Operating results for fourth quarter 2003 included a $2.2 million charge, or $0.043 per diluted share, related to the announced redemption of BRE's Series A Cumulative Redeemable Preferred Stock. Operating results for fourth quarter 2002 included a net gain on sale of $10.1 million, or $0.22 per diluted share. Adjusted EBITDA for the quarter totaled $46.0 million, as compared with $48.1 million in fourth quarter 2002. (A reconciliation of net income available to common shareholders to Adjusted EBITDA is provided at the end of this release.) For fourth quarter 2003, revenues totaled $70.2 million as compared with $67.7 million a year ago, excluding revenues from discontinued operations of $0 and $3.6 million, respectively. Net income available to common shareholders for the year 2003 totaled $70.3 million, or $1.48 per diluted share, as compared with $88.0 million, or $1.91 per diluted share, for the year 2002. Included in the company's 2003 results were legal settlement charges totaling $7.3 million relating to the settlement of two lawsuits during the third quarter. Excluding these charges, net income available to common shareholders totaled $77.6 million, or $1.64 per diluted share. In addition, the 2003 results included a net gain on sales of properties totaling $23.1 million and a $2.2 million charge related to the announced redemption of our Series A preferred stock. Operating results for the year 2002 included a net gain on sales of investments totaling $14.9 million. Adjusted EBITDA for the year totaled $183.5 million, as compared with $189.2 million for 2002. For the year ended December 31, 2003, revenues totaled $275.1 million, as compared with revenues of $262.8 million for 2002, excluding revenues from discontinued operations of $2.0 million and $15.4 million, respectively. BRE's overall earnings and FFO results were influenced by property-level same-store performance, income from properties in the lease-up phase of development, and the volume and timing associated with acquisition and disposition activities during 2003 and 2002. For the fourth quarter 2003, same-store net operating income (NOI) decreased 5% as compared with the 2002 period. For the year 2003, same-store NOI decreased 6% as compared with 2002 results. (A reconciliation of net income available to common shareholders to NOI is provided at the end of this release.)
Net Operating Income by Region
Quarter Ended December 31, 2003
# Gross % 4Q '03 %
Region Units Investment Investment NOI NOI
Southern California 8,864 $893,519 39% $21,031 44%
Northern California 5,644 579,734 26% 13,431 28%
Mountain/Desert 5,324 483,570 21% 7,706 16%
Pacific Northwest 3,149 324,225 14% 5,426 11%
Partnership and other 488 -- -- 685 1%
($ amounts in 000s) Total 23,469 $2,281,048 100% $48,279 100%
Disposition activities during 2003 and fourth quarter 2002 reduced fourth quarter 2003 NOI by $2.1 million as compared with fourth quarter 2002. For the year ended December 31, 2003, sales of apartment communities effectively reduced NOI by $8.2 million as compared with the same period in 2002. The company's disposition activities in 2003 occurred during the first and second quarters. Acquisition activities during 2003 and fourth quarter 2002 increased fourth quarter 2003 NOI by $1.5 million as compared with fourth quarter 2002. For the year ended December 31, 2003, acquisitions effectively increased NOI by $4.2 million as compared with 2002. The company's acquisition activities in 2003 occurred during the third and fourth quarters. Same-Store Property Results BRE defines same-store properties as stabilized apartment communities owned by the company for at least five full quarters. Of the 22,981 apartment units owned directly by BRE, same-store units totaled 20,895 for the quarter, and 18,656 for the year.
Same-Store % Growth Results
Q4 2003 Compared with Q4 2002
% Change
% NOI Revenue Expenses NOI # Units
San Diego, California 23% 1% 11% -2% 3,711
San Francisco, California 21% -8% 5% -12% 3,488
L.A./Orange County, California 19% 3% 4% 3% 3,703
Seattle, Washington 12% -3% 10% -10% 3,149
Sacramento, California 9% -3% 4% -5% 2,156
Phoenix, Arizona 8% -2% 4% -5% 2,440
Salt Lake City, Utah 4% -3% 5% -7% 1,264
Denver, Colorado 4% -9% -7% -10% 984
Total 100% -2% 6% -5% 20,895
Same-Store % Growth Results
2003 Compared with 2002
% Change
% NOI Revenue Expenses NOI # Units
San Francisco, California 25% -10% 2% -13% 3,488
San Diego, California 20% 1% 0% 1% 2,923
L.A./Orange County, California 18% 4% 3% 5% 3,186
Seattle, Washington 11% -5% 0% -8% 2,701
Sacramento, California 9% -3% 4% -5% 1,896
Phoenix, Arizona 8% -6% 5% -11% 2,214
Salt Lake City, Utah 5% -5% 2% -7% 1,264
Denver, Colorado 4% -10% 2% -15% 984
Total 100% -4% 2% -6% 18,656
On a year-over-year basis, same-store operating results were affected by continued declines in market rents. Average market rent for the fourth quarter 2003 decreased 2% to $1,086 per unit, from $1,113 per unit in fourth quarter 2002. The 2003 market rent declines in several of BRE's operating regions were partially offset by 3% market rent growth in Southern California. Same-store physical occupancy levels averaged 94% during fourth quarter 2003 and 2002. Resident turnover averaged 68% during the year ended December 31, 2003 as compared with 64% last year. On a sequential basis, same-store NOI decreased 3%, which was attributed primarily to operating results in the San Francisco Bay area. In this market, occupancy and market rents declined in response to seasonal patterns and weakening employment conditions that became apparent late third quarter. During the fourth quarter, S.F. Bay area average physical occupancy fell to 92% from 94% in the third quarter; market rents decreased 1.5% to $1,355 per unit, from $1,375. During the fourth quarter, average physical occupancy for our entire same-store portfolio was 94%, down from 95% in the third quarter, reflecting the impact of the S.F. Bay area. Annualized turnover averaged 61% for fourth quarter 2003, down from the third quarter level of 75%, reflecting seasonal trends.
Same-Store Average Occupancy and Turnover Rates
Physical Occupancy Turnover Ratio
Q4 2003 Q3 2003 Q4 2002 2003 2002
San Francisco, California 92% 94% 93% 70% 71%
San Diego, California 96% 96% 96% 66% 55%
L.A./Orange County, California 95% 96% 96% 56% 51%
Sacramento, California 94% 96% 94% 81% 74%
Seattle, Washington 93% 93% 92% 64% 59%
Salt Lake City, Utah 93% 95% 93% 73% 80%
Denver, Colorado 94% 95% 92% 76% 81%
Phoenix, Arizona 95% 93% 93% 70% 67%
Average 94% 95% 94% 68% 64%
Acquisition and Development ActivityDuring fourth quarter 2003, BRE acquired two communities for an aggregate of approximately $43.3 million: Canyon Creek, with 200 units, located in Northridge, California; and Enclave at Town Square, with 124 units, located in Chino Hills, California. The company also acquired a parcel of land for the future development of 268 units located in Moreno Valley, California. The land purchase totaled $4.4 million. During fourth quarter 2003, the company had one community with 420 units in the lease-up phase: Pinnacle at Denver Tech Center, located in Greenwood Village, Colorado. Occupancy for this lease-up community averaged 88% of total units during fourth quarter 2003 and achieved 90% by the end of the quarter. BRE currently has four communities with a total of 744 units under construction, for a total estimated investment of $146.4 million, and an estimated balance to complete totaling $45.5 million. Expected delivery dates for these units range from first quarter 2004 through fourth quarter 2005. All development communities are in Southern California. At December 31, 2003, BRE owned three parcels of land in Southern California, including the fourth quarter 2003 acquisition, representing 644 units of future development, for an estimated aggregate cost of $125 million. At December 31, 2003, the company had entered into agreements providing options to purchase or lease five parcels of land, and was actively pursuing local development approvals. The five sites are located in Northern and Southern California, representing 1,888 units of future development and an estimated total cost of $436.1 million. Anticipated construction start dates range from the first half of 2004 to the first half of 2006. Financial and Other Information At December 31, 2003, BRE's combination of debt and equity resulted in a total market capitalization of approximately $3.0 billion, with a debt-to-total market capitalization ratio of 39%. BRE's outstanding debt of $1.2 billion carried a weighted average interest rate of 5.6% for the year ended December 31, 2003. BRE's coverage ratio of Adjusted EBITDA to interest expense was 3.1 times for the quarter and year. The weighted average maturity for BRE's debt is five and a half years. At December 31, 2003, outstanding borrowings under the company's unsecured and secured lines of credit totaled $296 million, with a weighted average interest cost of 2.5%. On December 2, 2003, BRE issued a notice of redemption to all holders of record of its outstanding 8.50% Series A Cumulative Redeemable Preferred Stock, at a redemption price of $25.17118 per share. The redemption price is equal to the original issuance price of $25.00 per share, plus accrued and unpaid dividends to the redemption date. The redemption date will be January 29, 2004. From the redemption date forward, dividends on the 2,150,000 shares of Series A Cumulative Redeemable Preferred Stock, which are called for redemption, will no longer accrue, and holders of Series A Preferred Stock will have no rights other than the rights to receive the $25.17118 total redemption price. In connection with the issuance of the Series A Cumulative Redeemable Preferred Stock in January 1999, BRE incurred approximately $2.2 million in issuance costs and recorded such costs as a reduction of shareholders' equity. In connection with the redemption, in compliance with EITF D-42, BRE recognized a redemption charge of $2.2 million, or $0.043 per diluted share, during fourth quarter 2003. Also during fourth quarter 2003, the underwriter on BRE's third quarter common stock offering exercised an over-allotment option to purchase an additional 450,000 shares. Net proceeds from the over-allotment exercise -- after all discounts, commissions and anticipated issuance costs -- totaled approximately $14.6 million. Net dilution from the common stock offering was approximately $0.022 per diluted share during fourth quarter 2003. For fourth quarter 2003, cash dividend payments to common shareholders totaled $24.4 million, or $0.4875 per share. Cash dividend payments for the year ended December 31, 2003 totaled $92.0 million, or $1.95 per share. On October 28, 2003, BRE reported damages sustained to the Montanosa apartment community in the San Diego submarket of Tierrasanta, as a result of area wildfires. Two buildings containing 16 apartment units were damaged, and are now under reconstruction. The cost of repair and clean-up is estimated to be approximately $2 million, which is covered by the company's property damage and business interruption insurance policy. On November 24, 2003, the company announced a one-year executive succession plan, culminating with the retirement of Frank C. McDowell, BRE's president and chief executive officer, at the end of 2004. On January 1, 2004, McDowell assumed the role of vice chairman and CEO, and Constance B. Moore became BRE's president and chief operating officer. Moore will be named president and CEO on January 1, 2005. Legal Settlements During third quarter 2003, BRE executed a settlement agreement in connection with litigation with an unrelated third party regarding the Pinnacle at MacArthur Place joint venture agreement. Under terms of the settlement agreement, BRE paid the third party $6,500,000 and retained full ownership of the asset. Pinnacle at MacArthur Place is a recently developed and stabilized, 253-unit community in Santa Ana, California. Also during third quarter 2003, BRE reached a settlement agreement regarding a class action lawsuit brought against the company with respect to application fees charged to residents from August 1998 to August 2003. Under terms of the settlement, BRE agreed to establish a $200,000 fund to reimburse prior applicants up to $5.00 per applicant, and to pay certain administration charges and legal expenses. These settlement amounts, legal fees and related expenses aggregate approximately $7.3 million, and are reported as Other expenses on the consolidated income statement for the year ended December 31, 2003. Earnings Outlook As of January 9, 2004, 13 research analysts had contributed quarterly FFO estimates on BRE to First Call(TM), a widely referenced source of consensus earnings. Current analyst estimates of BRE's per share FFO for fourth quarter 2003 range from $0.49 to $0.52, for a consensus average of $0.51 per share. For the year 2003, 15 analysts have contributed FFO estimates for BRE to First Call ranging from $2.27 to $2.29, for a consensus average of $2.28. For 2004, 16 analysts have contributed FFO estimates for BRE ranging from $2.26 to $2.41, for a consensus average of $2.35. The company believes FFO per share results for 2004 will be affected by regional and national economic conditions, which may not generate meaningful job growth in 2004 and will directly impact year-over-year changes to same-store NOI. In addition, 2004 operating results will reflect (a) the level and timing of property acquisitions and dispositions; (b) the delivery of apartment communities currently under construction; (c) the timing and expense associated with the issuance of debt or equity securities; and (d) increased corporate operating expense, and costs associated with the adoption of legislative and regulatory mandates. Given current expectations and judgment, the company believes FFO estimates for 2004 should be adjusted to a range of $2.30 to $2.40 per share. BRE believes EPS estimates for 2004 should be adjusted to a range of $1.20 to $1.30 per share. EPS estimates may be subject to fluctuation as a result of several factors, including changes in the recognition of depreciation expense and any gains or losses associated with disposition activity. Q4 2003 Analyst Conference Call The company will hold a conference call on Wednesday, January 21 at 8:30 a.m. PST (11:30 a.m. EST) to review these results. The dial-in number to participate in the U.S. and Canada is 888-290-1473; the international number is 706-679-8398. Mention Conference ID# 2908583. A telephone replay of the call will be available January 21 through February 3, 2004 at 800-642-1687, using the conference ID. A link to the live conference call webcast will be available on the Presentations page in the Shareholder section of the company's website. An online playback of the webcast will be available for 30 days following the call. About BRE Properties BRE Properties -- a real estate investment trust -- develops, acquires and manages apartment communities convenient to its Residents' work, shopping, entertainment and transit in supply-constrained Western U.S. markets. BRE directly owns and operates 80 apartment communities totaling 22,981 units in California, Arizona, Washington, Utah and Colorado. The company currently has seven other properties in various stages of development and construction, totaling 1,388 units, and joint venture interests in two additional apartment communities, totaling 488 units. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Except for the historical information contained herein, this news release contains forward-looking statements regarding company and property performance, and is based on the company's current expectations and judgment. Actual results could vary materially depending on risks and uncertainties inherent to general and local real estate conditions, competitive factors specific to markets in which BRE operates, legislative or other regulatory decisions, future interest rate levels or capital markets conditions. The company assumes no liability to update this information. For more details, please refer to the company's SEC filings, including its most recent Annual Report on Form 10-K/A and quarterly reports on Form 10-Q.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands)
Dec. 31, Dec. 31,
2003 2002
Assets
Real estate portfolio
Direct investments in real estate:
Investments in rental properties $2,281,048 $2,143,960
Construction in progress 100,870 90,675
Less: accumulated depreciation (239,810) (198,292)
2,142,108 2,036,343
Equity interests in and advances to
real estate joint ventures:
Investments in rental properties 10,391 10,761
Land under development 28,404 14,574
Total real estate portfolio 2,180,903 2,061,678
Cash 1,105 893
Other assets 45,957 46,142
Total assets $2,227,965 $2,108,713
Liabilities and shareholders' equity
Liabilities
Unsecured senior notes $763,915 $774,570
Mortgage loans 132,414 218,194
Unsecured line of credit 196,000 181,000
Secured line of credit 100,000 --
Accounts payable and accrued expenses 36,233 38,618
Total liabilities 1,228,562 1,212,382
Minority interests 38,859 45,147
Shareholders' equity
Preferred stock, $.01 par value;
10,000,000 shares authorized.
2,150,000 shares 8.50% Series A
cumulative, redeemable, $25 liquidation
preference, issued and outstanding;
3,000,000 shares 8.08% Series B
cumulative, redeemable, $25 liquidation
preference, issued and outstanding. 128,750 128,750
Common stock; $.01 par value,
100,000,000 shares authorized. Shares
issued and outstanding: 49,992,198
and 45,870,723 at Dec. 31, 2003 and
2002, respectively. 500 459
Additional paid-in capital 831,294 721,975
Total shareholders' equity 960,544 851,184
Total liabilities and shareholders'
equity $2,227,965 $2,108,713
CONSOLIDATED INCOME STATEMENTS (Unaudited)
(In thousands, except per share data)
Quarter ended Year ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2003 2002 2003 2002
REVENUE
Rental income $66,323 $64,250 $260,660 $247,357
Ancillary income 3,185 2,816 12,139 11,076
Partnership and other income 685 673 2,344 4,347
Total revenue 70,193 67,739 275,143 262,780
EXPENSES
Real estate expenses 21,914 19,473 82,873 73,164
Depreciation 13,854 12,108 53,046 44,596
Interest expense 14,975 15,637 59,617 56,106
General and administrative 2,262 2,258 10,062 9,847
Other expenses -- -- 7,305 --
Total expenses 53,005 49,476 212,903 183,713
Income before net gains on
investments, minority
interests in consolidated
subsidiaries and discontinued
operations 17,188 18,263 62,240 79,067
Net gains on investments -- -- -- 4,862
Income before minority
interests in consolidated
subsidiaries and discontinued
operations 17,188 18,263 62,240 83,929
Minority interests 719 799 3,195 3,682
Income from continuing
operations 16,469 17,464 59,045 80,247
Discontinued operations:
Net gain on sales -- 10,067 23,147 10,067
Discontinued operations,
net (1) -- 1,146 936 5,495
Total discontinued operations -- 11,213 24,083 15,562
NET INCOME $16,469 $28,677 $83,128 $95,809
Redemption related preferred
stock issuance costs 2,166 -- 2,166 --
Dividends attributable to
preferred stock 2,657 2,657 10,629 7,765
Net Income Available to
Common Shareholders $11,646 $26,020 $70,333 $88,044
Net income per common share
- Basic $0.23 $0.57 $1.49 $1.92
Net income per common share
- Assuming dilution $0.23 $0.56 $1.48 $1.91
Weighted average shares
outstanding - Basic 49,815 45,785 47,070 45,860
Weighted average shares
outstanding - Assuming
dilution 50,270 45,990 47,445 46,210
(1) Details of net earnings
from discontinued Quarter Quarter Year Year
operations: ended ended ended ended
12/31/0312/31/0212/31/0312/31/02
Rental and ancillary income $-- $3,616 $1,984 $15,427
Real estate expenses -- (1,478) (742) (5,967)
Depreciation -- (717) (306) (2,939)
Interest expense -- (275) -- (1,026)
Income from discontinued
operations, net $-- $1,146 $936 $5,495
Reconciliation and Definition of Non-GAAP Financial MeasuresThis 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, therefore, may 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 based on NAREIT's current definition and is calculated by BRE as net income computed in accordance with GAAP, excluding gains or losses from sales of investments, plus depreciation, and after adjustments for unconsolidated joint ventures and minority interests convertible to common shares. We consider FFO to be an appropriate supplemental measure of the operating performance of an equity REIT because, by excluding gains or losses and depreciation, FFO can help one compare the operating performance of a company's real estate between periods or as compared to different companies. Below is a reconciliation of net income available to common shareholders to FFO:
Quarter Quarter Year Year
ended ended ended ended
12/31/0312/31/0212/31/0312/31/02
Net income available to
common shareholders $11,646 $26,020 $70,333 $88,044
Depreciation from continuing
operations 13,854 12,108 53,046 44,596
Depreciation from discontinued
operations -- 717 306 2,939
Minority interests 719 799 3,195 3,682
Depreciation from
unconsolidated entities 236 296 1,094 1,332
Net (gain) on investments -- (10,067) (23,147) (14,929)
Less: Minority interests not
convertible to common (244) (211) (980) (719)
Funds from operations $26,211 $29,662 $103,847 $124,945
Other expenses (1) -- -- 7,305 --
Funds from operations,
excluding Other expenses $26,211 $29,662 $111,152 $124,945
Diluted average shares
outstanding - EPS 50,270 45,990 47,445 46,210
Plus: OP units (2) 1,030 1,410 1,145 1,560
Diluted average shares
outstanding - FFO 51,300 47,400 48,590 47,770
Net income per common share
- Diluted $0.23 $0.56 $1.48 $1.91
FFO per common share
- Diluted $0.51 $0.63 $2.14 $2.62
FFO per common share,
excluding Other expenses
- Diluted $0.51 $0.63 $2.29 $2.62
(1) Refers to legal settlement charges related to the settlement of two
lawsuits during the third quarter of 2003.
(2) Under FAS 128, common share equivalents deemed to be anti-dilutive
are excluded from diluted EPS calculations.
Adjusted Funds from Operations (AFFO)AFFO represents funds from operations less recurring capital expenditures. We consider AFFO to be an appropriate supplemental measure of the performance of an equity REIT because, like FFO, it captures real estate performance by excluding gains or losses on investments and depreciation. Unlike FFO, AFFO also reflects that capital expenditures are necessary to maintain the associated real estate assets. Below is a reconciliation of net income available to common shareholders to AFFO:
Quarter Quarter Year Year
ended ended ended ended
12/31/0312/31/0212/31/0312/31/02
Net income available to
common shareholders $11,646 $26,020 $70,333 $88,044
Depreciation from continuing
operations 13,854 12,108 53,046 44,596
Depreciation from discontinued
operations -- 717 306 2,939
Minority interests 719 799 3,195 3,682
Depreciation from
unconsolidated entities 236 296 1,094 1,332
Net (gain) on investments -- (10,067) (23,147) (14,929)
Less: Minority interests not
convertible to common (244) (211) (980) (719)
Less: Capital expenditures (2,703) (2,086) (10,390) (8,276)
Adjusted funds from
operations $23,508 $27,576 $93,457 $116,669
Other expenses (1) -- -- 7,305 --
Adjusted funds from
operations, excluding
other expenses $23,508 $27,576 $100,762 $116,669
Diluted average shares
outstanding - EPS 50,270 45,990 47,445 46,210
Plus: OP Units (2) 1,030 1,410 1,145 1,560
Diluted average shares
outstanding - FFO 51,300 47,400 48,590 47,770
Net income per common share
- Diluted $0.23 $0.56 $1.48 $1.91
AFFO per common share
- Diluted $0.46 $0.58 $1.92 $2.44
AFFO per common share,
excluding other expenses
- Diluted $0.46 $0.58 $2.07 $2.44
(1) Refers to legal settlement charges related to the settlement of two
lawsuits during the third quarter of 2003.
(2) Under FAS 128, common share equivalents deemed to be anti-dilutive
are excluded from diluted EPS calculations.
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 as EBITDA, excluding minority interests, gains or losses from sales of investments, redemption related preferred stock issuance costs, 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, nonrecurring charges and gains (losses) from property dispositions, which permits investors to view income from operations unclouded by noncash depreciation or the cost of debt. Following is a reconciliation of net income available to common shareholders to EBITDA and Adjusted EBITDA:
Quarter Quarter Year Year
ended ended ended ended
12/31/0312/31/0212/31/0312/31/02
Net income available to
common shareholders $11,646 $26,020 $70,333 $88,044
Interest 14,975 15,912 59,617 57,132
Depreciation 13,854 12,825 53,352 47,535
EBITDA $40,475 $54,757 $183,302 $192,711
Minority interests 719 799 3,195 3,682
Net (gains) on investments -- (10,067) (23,147) (14,929)
Redemption related preferred
stock issuance costs 2,166 -- 2,166 --
Dividends on preferred stock 2,657 2,657 10,629 7,765
Other expenses (1) -- -- 7,305 --
Adjusted EBITDA $46,017 $48,146 $183,450 $189,229
(1) Refers to legal settlement charges related to the settlement of two
lawsuits during the third quarter of 2003.
Net Operating Income (NOI)NOI is defined as total revenues less real estate expenses (including such items as repairs and maintenance, payroll, utilities, property taxes and insurance, advertising and management fees.) We consider NOI to be an appropriate supplemental measure of our performance because it reflects the operating performance of our real estate portfolio at the property level and is used to make decisions about resource allocations and assessing regional property level performance. Below is a reconciliation of net income available to common shareholders to net operating income:
Quarter Quarter Year Year
ended ended ended ended
12/31/0312/31/0212/31/0312/31/02
Net income available to
common shareholders $11,646 $26,020 $70,333 $88,044
Interest 14,975 15,912 59,617 57,132
Depreciation 13,854 12,825 53,352 47,535
Minority interests 719 799 3,195 3,682
Net (gain) on investments -- (10,067) (23,147) (14,929)
Redemption related preferred
stock issuance costs 2,166 -- 2,166 --
Dividends on preferred stock 2,657 2,657 10,629 7,765
General and administrative
expense 2,262 2,258 10,062 9,847
Other expenses (1) -- -- 7,305 --
NOI $48,279 $50,404 $193,512 $199,076
Less: Non Same-Store NOI 4,127 3,710 33,205 28,537
Same-Store NOI $44,152 $46,694 $160,307 $170,539
(1) Refers to legal settlement charges related to the settlement of two
lawsuits during the third quarter of 2003.
SOURCE BRE Properties, Inc.
-0- 01/20/2004
/CONTACT: investors, Edward F. Lange, Jr., Chief Financial Officer,
+1-415-445-6559, or media, Thomas E. Mierzwinski, Director of Communications,
+1-415-445-6525, both of BRE Properties, Inc./
/Web site: http://www.breproperties.com /
(BRE)
CO: BRE Properties, Inc.
ST: California
IN: RLT FIN
SU: ERN CCA ERP
HD-GF
-- SFTU135 --
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