Company: BHM
Filing Date: 2025-10-08
Form Type: S-11
Source: 0001104659-25-097905
Chunk: 153

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-10-08
Form: S-11
Chunk 153
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 non-GAAP financial measure that is widely recognized as a measure of REIT operating performance. We
consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property
portfolio performance that excludes non-cash items such as depreciation. The historical accounting convention used for real estate assets
requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably
over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT,
using historical accounting for depreciation, could be less informative. We define FFO, consistent with the NAREIT definition, as net
income (loss), computed in accordance with GAAP, excluding gains or losses on sales of depreciable real estate property, plus depreciation
and amortization of real estate assets, plus impairment write-downs of certain real estate assets and investments in entities where the
impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for notes receivable,
preferred equity investments and joint ventures will be calculated to reflect FFO on the same basis.

CFFO makes certain adjustments
to FFO, removing the effect of items that do not reflect ongoing property operations such as acquisition and other transaction costs,
non-cash interest, unrealized gains or losses on derivatives, provision for (recovery of) credit losses, losses on extinguishment of debt
and debt modification costs (includes prepayment penalties incurred and the write-off of unamortized deferred financing costs and fair
market value adjustments of assumed debt), one-time weather-related costs, equity compensation expense, non-recurring income tax, and
preferred stock accretion. We believe that CFFO is helpful to investors as a supplemental performance measure because it excludes the
effects of certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property
operations. As a result, we believe that CFFO can help facilitate comparisons of operating performance between periods and provides a
more meaningful predictor of future earnings potential.

Our calculation of CFFO differs
from the methodology used for calculating CFFO by certain other REITs and, accordingly, our CFFO may not be comparable to CFFO reported
by other REITs. Our management utilizes FFO and CFFO as measures of our operating performance after adjustment for certain non-cash items,
such as depreciation and amortization expenses