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What is “Funds from Operations” (FFO)?

April 26, 2017ffo

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What is “Funds from Operations” (FFO)?

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FFO is a supplemental measure of a REIT’s operating performance. It is different from earnings in that certain non-cash measures, such as depreciation and amortization are added back. The National Association of Real Estate Investment Trusts defines FFO as net income excluding gains (or losses) from sales of real estate assets plus the depreciation or amortization of real estate assets. Many securities analysts judge a REIT’s performance according to its FFO per share results.