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BEHRINGER HARVARD OPPORTUNITY REIT I, INC. FILES (8-K) Disclosing Regulation FD Disclosure, Financial Statements and Exhibits

August 22, 2014

Item 7.01 Regulation FD Disclosure. On August 22, 2014, Behringer Harvard Opportunity REIT I, Inc., a Maryland corporation (which may be referred to herein as the "Registrant," "we," "our" or "us"), first used the presentation attached as Exhibit 99.1 in connection with a conference call with stockholders and financial advisors to review second quarter 2014 results. The information included in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.



The presentation materials include information about Funds from Operations ("FFO").

Funds from Operations Funds from operations is a non-GAAP financial measure that is widely recognized as a measure of REIT operating performance. We use FFO as defined by the National Association of Real Estate Investment Trusts ("NAREIT") in the April 2002 "White Paper of Funds From Operations" which is net income (loss), computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP, and gains (or losses) from sales of property and impairments of depreciable real estate (including impairments of investments in unconsolidated joint ventures and partnerships which resulted from measurable decreases in the fair value of the depreciable real estate held by the joint venture or partnership), plus depreciation and amortization on real estate assets, and after adjustments for unconsolidated partnerships, joint ventures, subsidiaries, and noncontrolling interests as one measure to evaluate our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting alone to be insufficient. As a result, our management believes that the use of FFO, together with the required GAAP presentations, provides a more complete understanding of our performance. We believe that FFO is helpful to investors and our management as a measure of operating performance because it excludes depreciation and amortization, gains and losses from property dispositions, impairments of depreciable assets, and extraordinary items, and as a result, when compared year to year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, which is not immediately apparent from net income. FFO should not be considered as an alternative to net income (loss), as an indication of our liquidity, nor as an indication of funds available to fund our cash needs, including our ability to make distributions and should be reviewed in connection with other GAAP measurements. Additionally, the exclusion of impairments limits the usefulness of FFO as a historical operating performance measure since an impairment charge indicates that operating performance has been permanently affected. FFO is not a useful measure in evaluating net asset value because impairments are taken into account in determining net asset value but not in determining FFO. Our FFO, as presented, may not be comparable to amounts calculated by other REITs that do not define these terms in accordance with the current NAREIT definition or that interpret the definition differently. 2 --------------------------------------------------------------------------------



Our calculation of FFO for the three and six months ended June 30, 2014 and 2013 is presented below (shares and $ in thousands, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30, 2014 2013 2014 2013 Amount Per Share Amount Per Share Amount Per Share Amount Per Share Net loss attributable to the Company $ (2,327 )$ (0.04 )$ (2,506 )$ (0.05 )$ (6,500 )$ (0.11 )$ (9,595 )$ (0.17 ) Adjustments for(1): Impairment charge(2) - - - - - - 244 - Real estate depreciation and amortization(3) 3,805 0.07 3,724 0.07 7,338 0.13 7,694 0.14 Gain on sale of real estate (476 ) (0.01 ) (95 ) - (476 ) (0.01 ) (95 ) - Funds from operations (FFO) $ 1,002$ 0.02$ 1,123$ 0.02 $



362 $ 0.01$ (1,752 )$ (0.03 )

GAAP weighted average shares: Basic and diluted 56,500 56,500 56,500 56,500



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(1) Reflects the adjustments for continuing operations as well as discontinued operations (2013).

(2) Includes impairment of our investments in unconsolidated entities which resulted from a decrease in the fair value of the depreciable real estate held by the joint venture or partnership.



(3) Includes our consolidated real estate depreciation and amortization expense, as well as our pro rata share of those unconsolidated investments which we account for under the equity method of accounting and the noncontrolling interest adjustment for the third-party partners' share.

Cash flows generated from FFO may be used to fund all or a portion of certain capitalizable items that are excluded from FFO, such as capital expenditures and payments of principal on debt, each of which may impact the amount of cash available for future distributions to our stockholders. Item 9.01 Financial Statements and Exhibits. (d) Exhibits. 99.1 Second Quarter 2014 Update Presentation. 3



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Source: Edgar Glimpses


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