BRE Properties Reports Quarter and Year Results; Per Share FFO Up 13.5% in Quarter, Up 13.8% for the Year.SAN FRANCISCO--(BUSINESS WIRE)--Jan. 15, 1997--BRE Properties Inc. (NYSE NYSE See: New York Stock Exchange :BRE (Business Rules Engine) Software that automates policies and procedures within an organization, whether legal, internal or operational. The use of a rules engine (BRE) requires placing the company rules in an external repository that can be easily reviewed rather than ) reported funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (FFO FFO See: Funds from operations ) of $13.9 million, or $.42 per share, for the quarter ended Dec. 31, 1996, a per share increase of 13.5% over FFO of $8.2 million, or $.37 per share, for the same period a year earlier. Funds from operations for all of 1996 amounted to $50.3 million, or $1.65 per share, up 13.8% on a per share basis from FFO totaling $31.6 million or $1.45 per share, in 1995. BRE's per share FFO reflects a two-for-one stock split, effected in the form of a stock dividend, completed on June 27, 1996. Current financial data also reflect the company's change from a July 31 fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. to a Dec. 31 calendar year-end. FFO totals for the quarter and year include operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. , expenses and newly issued shares following the company's merger with Real Estate Investment Trust of California on March 15, 1996. Frank C. McDowell, BRE's president and chief executive officer, said, "The progress recorded in FFO comes not only from BRE's ability to add a significant number of apartment communities in key growth markets, but also from the ability to operate our business more efficiently. "In 1995, BRE generated $65.4 million in revenues at a general and administrative cost administrative cost Managed care A cost incurred by the 'business' end of a health care facility or university–eg, staffing and personnel costs, nursing home and hospital administration, insurance, and overhead expenses. Cf Indirect costs. of $4.2 million -- a 6.4% ratio. Through a series of strategic actions, we generated revenues in 1996 of $101.6 million at a general and administrative cost of $4.0 million -- reducing the same ratio to 3.9%. "BRE has put in place a strong foundation for continued momentum in the year ahead. Our employee team members have risen to the growth challenge and are committed to making BRE the preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae multifamily REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). in the West." Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. Jay W. Pauly commented on the strength of the company's markets. "BRE's apartment portfolio was 96% occupied at Dec. 31 and achieved year-over-year `same store' scheduled gross rent growth of 4%. Our strategy of investing across and between major markets of the Western United States Noun 1. western United States - the region of the United States lying to the west of the Mississippi River West Santa Fe Trail - a trail that extends from Missouri to New Mexico; an important route for settlers moving west in the 19th century has benefited from the continuing rental rate growth trends in place in Northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern and the Pacific Northwest. "We believe a significant portion of the contribution to 1997's FFO growth will come from the company's multifamily investments in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , a region which is still in the early stages of economic recovery." Recapping the highlights of BRE's 1996 strategic actions and advancements, McDowell and Pauly noted: - BRE's multifamily portfolio increased to 53 apartment communities, totaling 12,212 units, as the company more than doubled its ownership of wholly owned apartments -- acquiring 3,581 units in a strategic merger and adding 3,156 units in nine multifamily acquisitions for a total investment of approximately $230 million. - In disposing of approximately half of the company's non-core assets, BRE sold 15 commercial and industrial properties during the year and redeployed the approximately $107 million in sales proceeds into multifamily acquisitions. - BRE internalized the property management of its entire multifamily portfolio, successfully assimilating as·sim·i·late v. as·sim·i·lat·ed, as·sim·i·lat·ing, as·sim·i·lates v.tr. 1. Physiology a. To consume and incorporate (nutrients) into the body after digestion. b. newly acquired communities and achieving greater economies of scale in its markets. - The company substantially improved and increased its lines of credit while lowering the related cost of debt, and maintained its strong balance sheet with a debt-to-total capitalization ratio of 28% and an interest coverage ratio of 4:1. - BRE increased the liquidity of its stock through such actions as a two-for-one stock dividend, and accomplished such shareholder-friendly steps as including a 4.8% dividend increase, the initiation of a dividend reinvestment plan Dividend Reinvestment Plan (DRP) Plan which provides for automatic reinvestment of shareholder dividends in more shares of a company's stock, often without commissions. Some plans provide for the purchase of additional shares at a discount to market price. , and the elimination of cash payments to its board of directors in favor of market-priced stock options. BRE Properties, headquartered in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , is a self-administered, self-managed and fully integrated equity real estate investment trust (REIT) focusing on the acquisition and management of multifamily properties in the Western United States. The company's investments are allocated between nine major markets in California, Arizona, Washington, Oregon and Nevada. -0- "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Except for the historical information contained herein, this news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. regarding company and property performance. Actual results could vary materially depending on risks and uncertainties inherent to general and local real estate conditions, or competitive factors specific to the markets in which BRE operates. The company assumes no obligation 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and quarterly reports on Form 10-Q Form 10-Q See 10-Q. . -0-
BRE Properties Inc.
Statement of Operations
(unaudited)
(in thousands, except per share data)
Quarter Quarter Year Year
Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1996 1995 1996 1995
REVENUE
Rental income $28,099(b) $16,324 $93,135(b) $62,865
Other income 1,609 735 8,516 2,522
Total revenue 29,708 17,059 101,651 65,387
EXPENSES
Real estate expense 9,855 5,728 31,030 21,540
Depreciation and
amortization 3,904 1,966 13,283 7,864
Interest expense 5,106 2,221 16,325 7,973
General and
administrative 831 903 3,999 4,221
Total expenses 19,696 10,818 64,637 41,598
Income before gain
(loss) on sales 10,012 6,241 37,014 23,789
Net gain (loss)
on sales 3,247 (899) 52,825 (1,779)
NET INCOME $13,269 $ 5,342 $89,839 $22,010
Net income per
outstanding share
Income before gain
(loss) on sales 0.30 0.28 1.21 1.09
Net gain (loss)
on sales 0.10 (0.04) 1.73 (0.08)
NET INCOME PER SHARE(a) $0.40 $0.24 $2.94 $1.01
FUNDS FROM OPERATIONS $13,916 $ 8,207 $50,297 $31,653
PER SHARE FUNDS FROM
OPERATIONS(a) $0.42 $0.37 $1.65 $1.45
Weighted average shares
outstanding 32,840 21,940 30,520 21,905
(a) All per share amounts have been retroactively adjusted to
reflect the 2-for-1 stock split as of June 27, 1996, and the change
in financial reporting year ends. On May 20, 1996, the company
elected to change its year-end from July 31 to Dec. 31, effective
Dec. 31, 1995.
(b) Included in rental income for the three and 12 months ended
Dec. 31, 1996, are revenues of retail, commercial and industrial
investments totaling $3,504,000 and $15,301,000, respectively.
Balance Sheets
(Unaudited)
Dec. 31, Dec. 31,
(in thousands) 1996 1995
ASSETS
Equity investments in real estate $813,768 $370,116
Less: Accumulated depreciation and
amortization (49,690) (48,036)
--------- ---------
764,078 322,080
Investments in limited partnerships 2,621 1,322
Real estate portfolio 766,699 323,402
Mortgage loans, net 9,716 5,727
Cash and short-term investments 184 16,057
Other 7,115 9,709
Total Assets $783,714 $354,895
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgage loans $114,985 $112,290
Unsecured notes 73,000 --
Unsecured lines of credit 124,000 --
Accounts payable and accrued expenses 7,615 3,357
Total liabilities 319,600 115,647
Shareholders' equity
Common stock 329 219
Additional paid-in capital 463,785 239,029
Total Shareholders' equity 464,114 239,248
Total liabilities and Shareholders'
equity $783,714 $354,895
CONTACT: BRE Properties Inc. Lauren L. Barr, 415/445-6523 |
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