Bilateral filtering is a nonlinear technique that reduces noise from images while preserving strong image edges. Due to the nonlinear nature of bilateral filtering, it is difficult to analyze the performance of the filter. We derive a closed-form equation of bilateral filtering for flat regions which shows the relationship between noise reduction and filtering parameters. This work explicitly shows that noise reduction depends on the ratio of the range parameter to the noise standard deviation, which confirms reported empirical observations. The derived result is a significant contribution for the analysis of bilateral filters toward estimating the optimal parameters for minimum mean square error. We demonstrate that the theoretical analysis presented is consistent with simulations.