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What is FFO? The REIT industry's performance measure, in US filings

FFO (funds from operations) is a REIT measure built from GAAP net income. Nareit's definition, the SEC's view, and where to find it in a 10-K.

By · Checked against filings: , 2 min read, Seen in 2 companies on Cityfort. Editorial policy. Corrections

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What does FFO mean?

FFO stands for funds from operations. Real estate investment trusts (REITs) commonly report it next to GAAP net income. It starts from net income and takes out real estate depreciation and some real estate gains, losses and write-downs.[S1] It is not a GAAP number.[S1][S4]

How is FFO worked out?

Nareit, the REIT industry body, defines it as GAAP net income, excluding:[S1]

  • depreciation and amortization related to real estate;
  • gains and losses from selling certain real estate, or from a change in control;
  • write-downs caused by a fall in the value of depreciable real estate.

Nareit created FFO in 1991, citing "the artificial nature of historical cost depreciation" of real estate. It says FFO was not meant to replace GAAP.[S1]

Nareit's guidance says FFO per share uses the same method as GAAP earnings per share (ASC 260).[S1]

Where do you find FFO in a 10-K or 10-Q?

Not in the financial statements or notes. A filing showing FFO must also show the closest GAAP measure, at least as prominently, and a reconciliation.[S3]

Realty Income and Prologis show it in 10-K Item 7 (MD&A).[S4][S6] Realty Income's quarterly figures are in its earnings release, furnished on Form 8-K.[S5]

What are AFFO and core FFO?

They are FFO with a company's own adjustments. Realty Income reports "AFFO"; Prologis reports "Core FFO".[S4][S6] Some adjustments can rule out a per-share figure.[S2] See non-GAAP measures.

What does FFO leave out?

  • Real estate depreciation, the yearly charge for wear on buildings.[S1]
  • Certain property sale gains and losses, and certain real estate write-downs.[S1]
  • Cash: Nareit says FFO does not measure the cash a REIT generates or its capacity to pay dividends.[S1]

See it in real companies

Funds from operations (FFO) per share, as the company measures it at Real Estate companies on Cityfort

2 Real Estate companies on Cityfort, listed A–Z (not ranked).

Prologis
$5.94FY2025 · Nareit FFO per share (Cityfort calculation), the company's own measure (non-GAAP); Net income per diluted share (GAAP), $3.56 · source S1
Realty Income
$4.25FY2025 · FFO per share (Nareit definition), the company's own measure (non-GAAP); Net income per diluted share (GAAP), $1.17 · source S1

From each company's filings, as cited on its Cityfort stock page. These figures change when a stock page is updated.

See it in real companies

Diluted earnings per share (EPS) at Real Estate companies on Cityfort

2 Real Estate companies on Cityfort, listed A–Z (not ranked).

Prologis
$3.56FY2025 · consolidated · source S1, S13
Realty Income
$1.17FY2025 · consolidated · source S1

From each company's filings, as cited on its Cityfort stock page. These figures change when a stock page is updated.

Questions people ask

Is FFO a GAAP number?
No. It is a non-GAAP measure. Nareit created it as a supplement to GAAP net income, not a replacement. A filing that shows it must also show the closest GAAP measure, with equal or greater prominence, and a reconciliation.[S1][S3]
Can a REIT show FFO per share?
Yes. The SEC staff accepts Nareit's definition of FFO, as in effect on May 17, 2016, as a performance measure and does not object to showing it per share.[S2]
Is FFO the cash a REIT has to pay dividends?
No. Nareit says FFO is not meant to measure the cash a REIT generates or its capacity to pay dividends. It points to the GAAP statement of cash flows for cash generated and used.[S1]
Do all REITs work out FFO the same way?
Nareit says the great majority of equity REITs follow its definition, though they may apply it to different groups of shares. The SEC staff also allows FFO on another basis if the adjustments meet Item 10(e) of Regulation S-K and the measure is not misleading under Regulation G (Rule 100(b)).[S1][S2]
Which GAAP figure is FFO reconciled to?
Nareit's definition starts from GAAP net income. Realty Income's FY2025 10-K, for example, reconciles FFO to net income available to common stockholders, which it calls the most comparable GAAP measure.[S1][S4]

Sources

  1. S1Nareit Funds From Operations White Paper, 2018 Restatement (December 2018; approved Nov 7, 2018, effective Dec 15, 2018), sections I to IV and V.G, pages 1 to 4 and 7 · Nareit (National Association of Real Estate Investment Trusts)Tier 2: rating agency or regulator · Dec 15, 2018
  2. S2Non-GAAP Financial Measures: Corporation Finance Interpretations, Questions 102.01 and 102.02 (funds from operations), last updated Dec 13, 2022 · U.S. Securities and Exchange Commission, Division of Corporation FinanceTier 1: company or exchange filing · Dec 13, 2022
  3. S317 CFR 229.10(e) (Regulation S-K Item 10(e)): use of non-GAAP financial measures in Commission filings (eCFR, up to date as of Nov 4, 2026) · Electronic Code of Federal Regulations (eCFR)Tier 1: company or exchange filing · Nov 4, 2026
  4. S4Realty Income Corporation, Form 10-K for fiscal year 2025, Item 7 (MD&A): Funds from Operations Available to Common Stockholders and Normalized FFO; Adjusted Funds from Operations · Realty Income Corporation (SEC EDGAR)Tier 1: company or exchange filing · Feb 25, 2026
  5. S5Realty Income Corporation, Form 8-K dated Nov 2, 2026, Item 2.02 (Results of Operations and Financial Condition), Exhibits 99.1 (press release) and 99.2 (Supplemental Operating and Financial Data) · Realty Income Corporation (SEC EDGAR)Tier 1: company or exchange filing · Nov 2, 2026
  6. S6Prologis, Inc., Form 10-K for fiscal year 2025, Item 7 (MD&A): Our FFO Measures (FFO, as modified by Prologis, and Core FFO) · Prologis, Inc. (SEC EDGAR)Tier 1: company or exchange filing · Feb 13, 2026

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