Funds from Operations are meant to measure a REIT's ability to generate recurring cash flow without considering unusual or one time events that may inflate or deflate earnings. One reason that REIT investors generally consider Funds From Operations (FFO) to be a more fair and accurate measure of a REITs earnings than GAAP Earnings (or, the standard Net Income calculation) is because:

		FFO eliminates the effect of Marketing Expense and Net Losses from Property Leasing on earnings
		FFO adds back Depreciation Expense to GAAP earnings and ignores Net Gains from Property Sales.
		FFO includes the effect of Marketing Expense and Net Losses from Property Leasing on earnings
		FFO allows the deduction of Depreciation Expense from GAAP earnings and also includes Net Gains from Property Sales