Netstreit Investor Presentation Deck
Non-GAAP Measures and Definitions
FFO, Core FFO, and AFFO
FFO means funds from operations. It is a non-GAAP measure defined by NAREIT as net income (computed in accordance with GAAP).
Our FFO is net income in accordance with GAAP, excluding gains (or losses) resulting from dispositions of properties, plus depreciation
and amortization and impairment charges on depreciable real property.
Core FFO means core funds from operations. Core FFO is a non-GAAP financial measure defined as FFO adjusted to remove the effect
of unusual and non-recurring items that are not expected to impact our operating performance or operations on an ongoing basis. These
have included non-recurring executive transition costs, severance and related charges, gain on insurance proceeds, and loss on debt
extinguishments and other related costs.
AFFO means adjusted funds from operations. AFFO is a non-GAAP financial measure defined as Core FFO adjusted for GAAP net
income related to non-cash revenues and expenses, such as straight-line rent, amortization of above- and below-market lease related
intangibles, amortization of lease incentives, capitalized interest expense, non-cash compensation expense, amortization of deferred
financing costs, amortization of above/below-market assumed debt, and amortization of loan origination costs.
Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. In
fact, real estate values historically have risen or fallen with market conditions. FFO is intended to be a standard supplemental measure of
operating performance that excludes historical cost depreciation and valuation adjustments from net income. We consider FFO to be useful
in evaluating potential property acquisitions and measuring operating performance.
We further consider FFO, Core FFO and AFFO to be useful in determining funds available for payment of distributions. FFO, Core FFO
and AFFO do not represent net income or cash flows from operations as defined by GAAP. You should not consider FFO, Core FFO and
AFFO to be alternatives to net income as a reliable measure of our operating performance; nor should you consider FFO, Core FFO and
AFFO to be alternatives to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.
FFO, Core FFO and AFFO do not measure whether cash flow is sufficient to fund our cash needs, including principal amortization, capital
improvements and distributions to stockholders. FFO, Core FFO and AFFO do not represent cash flows from operating, investing or
financing activities as defined by GAAP. Further, FFO, Core FFO and AFFO as disclosed by other REITs might not be comparable to our
calculations of FFO, Core FFO and AFFO.
EBITDA, EBITD Are, Adjusted EBITDAre, and Annualized Adjusted EBITD Are
EBITDA is defined as earnings before interest expense, income tax expense, and depreciation and amortization.
NETSTREIT
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