Adjusted Funds from Operations
Adjusted Funds from Operations (AFFO) is a real estate metric used by REITs that starts with Funds From Operations (FFO) and subtracts recurring capital expenditures and certain adjustments to reflect sustainable cash flow. It is intended to provide a more comparable measure of cash available for distribution to shareholders.
Example: In its quarterly report, the REIT disclosed AFFO of $120 million, highlighting the cash flow remaining after maintenance capex and other adjustments to FFO.
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