Funds from Operations
Funds from Operations (FFO) is a non-GAAP metric used by real estate investment trusts (REITs) to measure operating performance by adjusting net income for real estate-related non-cash items.
Example: A REIT reports net income of $200 million, depreciation and amortization related to real estate of $60 million, impairment losses of $5 million, and gains on sale of real estate of $10 million. Using the typical formula, FFO would be $255 million.
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