How to use this with source records
Copy the issuer reconciliation for one period, preserving each adjustment and its sign. Match the unit and shareholder basis before entering earnings, depreciation, gains or recurring capital spending. Do not substitute another company’s definition of AFFO.
The Realty Income FY2024 filing lab shows a dated reconciliation and dividend comparison. Use it as a source-reading example, not a current assessment.
The calculation
Simplified FFO = common net income + real-estate D&A − qualifying sale gains + other FFO adjustments. Modeled AFFO = simplified FFO − recurring capex − noncash straight-line rent + other issuer adjustments.
Check the arithmetic.
50 of common net income + 40 of real-estate D&A − 10 of qualifying sale gains = 80 of simplified FFO. Deducting 8 of recurring capex and 2 of noncash rent gives 70 of modeled AFFO, before any other adjustments.
Assumptions and limitations
Use one currency and scale throughout. This is a teaching bridge, not a complete implementation of the Nareit definition. Qualifying impairments, joint ventures and attribution adjustments may be needed. AFFO is issuer-defined; never apply these illustrative deductions without checking the company reconciliation.
The output is an educational scenario. It is not a forecast, a tax determination or a personalized investment recommendation.