We use Funds from Operations Adjusted for Comparability as an earnings metric to allow for apples to apples comparison of our business by eliminating certain one-time items.

One-timers are inevitable, and in each year we had some great ones. The following chart reconciles Funds from Operations to Funds from Operations Adjusted for Comparability:

FFO adjusted for comparability was $689.5 million in 2005 compared to $639.1 million in 2004, an increase of $50.4 million. However, on a per share basis adjusted FFO declined $.05 per share from $4.80 in 2004 to $4.75 in 2005. The per share decline is almost entirely caused by dilution from the weighted average share count increasing 12.1 million shares from 133.1 in 2004 to 145.2 in 2005.

But there’s more. 2005 earnings were penalized by our decision to invest in assets that have little or no immediate return. In pursuit of money making we are sometimes willing to buy assets with little, or no, current income, if we believe the payoff in 2-5 years will ring the bell.

So it is with Toys "R" Us where we have $403 million invested with no return in 2005; same with H Street where we have $195 million invested with no recognized return; same with two New York condo conversions where we have $156 million invested with no current return, and so on. Some commentators think value is measured by capitalizing an earnings stream, others think it is measured by calculating net asset value (NAV). The NAV approach recognizes that even a vacant building with no earnings whatsoever has a value. Either way, our non-earning or sub-earning assets will be fairly valued during the gestation period and highly valued when they reach stabilization.