FFO is a supplemental non-GAAP financial measure used by the real estate industry to measure the operating performance of real estate companies . FFOM adds back to traditionally defined FFO non-cash amortization of non-real estate related intangible assets associated with purchase accounting . The Company presents FFO and FFOM because it considers them important supplemental measures of operational performance . The Company believes FFO is frequently used by securities analysts , investors and other interested parties in the evaluation of REITs , many of which present FFO when reporting their results . FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets , which assumes that the value of real estate assets diminishes ratably over time . Historically , however , real estate values have risen or fallen with market conditions . Because FFO excludes depreciation and amortization unique to real estate , gains and losses from property dispositions and extraordinary items , it provides a performance measure that , when compared year over year , reflects the impact to operations from trends in occupancy rates , rental rates , operating costs , development activities and interest costs , providing a perspective not immediately apparent from net income . The Company computes FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper ( as amended in November 1999 and April 2002 ) , which may differ from the methodology for calculating FFO utilized by other equity REITs and , accordingly , may not be comparable to such other REITs . Further , FFO and FFOM do not represent amounts available for management 's discretionary use because of needed capital replacement or expansion , debt service obligations , or other commitments and uncertainties . FFO and FFOM should not be considered as an alternative to net income ( loss ) ( computed in accordance with GAAP ) as an indicator of the Company 's performance , nor are they indicative of funds available to fund its cash needs , including its ability to pay dividends or make distributions . A reconciliation from GAAP net loss to FFO and FFOM is included as an attachment to this press release .