AFFO means adjusted funds from operations, calculated by adjusting FFO by adding back acquisition expenses, equity based compensation expenses, and any other non-recurring on non-cash expenses, and subtracting recurring capital expenditures (and, when calculating the Incentive Fee only, further adjusting FFO to include any realized gains or losses on the Company's real estate investments).
EBITDA, FFO, AFFO, CAD and other terms are non-GAAP measures, reconciliations of which have been provided in prior earnings releases and filings with the SEC.
The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO, Core FFO and AFFO measures and the adjustments to GAAP in calculating FFO, Core FFO and AFFO.
By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe AFFO provides useful supplemental information.
We also believe that AFFO is a recognized measure of sustainable operating performance by the REIT industry.
We exclude certain income or expense items from AFFO that we consider more reflective of investing activities, other non-cash income and expense items and the income and expense effects of other activities that are not a fundamental attribute of our business plan.