I respect your opinion and I have been long. But I really don't understand why the NRF management keep changing their accounting metric, making it hard hard to compare quarter vs quarter...
what is your take?
If you are referring to affo vs cad, both of which are defined by nrf, it's at long last nrf''s admission that affo became a worthless metric when the vie's were consolidated. Assets of the vie's can only be used to satisfy the liabilities of the respective vie. NRF tells the public that affo does NOT represent funds which can be spent at management's discretion in every earnings press release.
PLUS, cr@p gaap accounting for the vies caused gross, wildly swinging pops & drops in affo. Interest income goes up 30 million y/y and interest expense does not change. Then another quarter interest income goes down big time y/y and interest expense does not change. Cr@p gaap fair value accounting for the vies causes write-up to net income to increase affo whereas write downs to net income go to unrealized losses which does NOT decrease affo. Cr@p gaap fair value accounting for the vies makes affo an economic fiction.
I posted about this over and over again in the fall of 2010 throught 2011.
NRF bought vie debts at huge discounts to par. When these debts get paid, NRF realized huge, cash gains.
BUT, because the vies are consolidated NRF's gain gets eliminated in consolidation. It does not appear in the quarterly financial statements, but it is cash to nrf which can be paid out as dividends.
Enron caused the change in the rules mandating consolidation of certain vies. The cr@p gaap bosses did it, not nrf. NRF just followed the rules which makes their gaap operating statements worthless. Cash is king.
Cash available for distribution is the proper metric to watch.