Associated Estates Realty Corporation
AFFO or Adjusted Funds From Operations: FFO, less normalized recurring expenditures which are capitalized by the REIT and then amortized but which are necessary to maintain a REIT's properties and its revenue stream (e.g., new carpeting, appliances, suite painting). AEC expenses many recurring repair and maintenance items that are capitalized by similar apartment REITs. As a result, AEC's annual AFFO is only a penny or two less than its FFO, and its FFO is one of the "purest" of the apartment REITs.
Core Portfolio: Properties owned and operated during the entire fiscal period of the prior year. See "Same-store Sales."
Dividend Yield: The annual dividend rate for a security expressed as a percent of its market price.
EBITDA or Earnings Before Interest, Taxes, Depreciation and Amortization: Rental revenues less all property operating expenses; a measure of cash flow.
Economic Occupancy: The actual rent revenue divided by the total rent expected to be earned based on the market rental rate for all suites.
FFO or Funds From Operations: Net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of property and extraordinary and nonrecurring items, plus depreciation and amortization, and after adjustment for unconsolidated partnerships and joint ventures.
Government-Assisted Properties: Multifamily properties, the rents of which are subsidized and certain aspects of the operations of which are regulated by HUD (United States Department of Housing and Urban Development) pursuant to Section 8 of the National Housing Act of 1937.
Joint Venture: The entity that is created when two or more persons or corporate entities join together to carry on a specific business transaction, usually of limited duration and for a specific property.
Market-rate Properties: Multifamily properties which are operated as conventional multifamily residential apartments.
Multifamily Property: A property with five or more housing units.
Payout Ratio: The ratio of a REIT's annual dividend rate to its FFO or AFFO, on a per-share basis.
Physical Occupancy: The total number of suites less the number of unoccupied suites divided by the total number of suites expressed as a percentage.
Portfolio: The assets of a company.
Real Estate Investment Trust (REIT): A type of corporate ownership of real estate in which income is taxed only at the level of the individual shareholders.
Return of Capital Dividend: A distribution to shareholders in excess of a REIT's earnings and profits, usually consisting of either depreciation or repayment of principal from properties or mortgages held by the REIT. Each shareholder receiving such a distribution does not pay taxes on the distribution when it is received but is required to reduce the tax basis of his or her shares by the amount of such distribution. For financial accounting purposes, what constitutes a return of capital may differ from that determined under Federal income tax requirements.
Same-store Sales: The concept, which is generally used to analyze retail companies, means sales from stores open for at least one year and excludes sales from stores which have been closed and from new stores (which often have unusually high sales growth). The "same-store" concept is applied to a REIT's rental income, operating expenses and/or net operating income from those of its properties which have been owned and operated during the entire fiscal period of the prior year. AEC refers to these properties as its "core portfolio market-rate properties."
Suite: An apartment unit in a multifamily property.
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