CIM REAL ESTATE FINANCE TRUST, INC.

Previous wording

As of March 31, 2025, our loan portfolio consisted of 68 loans with a net book value of $3.3 billion, and 20 investments in real estate-related securities and other of $302.0 million. The Company conducts and expects to continue to conduct its commercial real estate lending business through CLR, a Maryland statutory trust and subsidiary of the Company which we expect to be taxed as a REIT for U.S. federal income tax purposes. As of March 31, 2025, CLR holds a diversified portfolio of approximately $1.5 billion which includes first mortgage loans with a net book value of $1.1 billion, CMBS with an estimated fair value of $196.3 million, and an investment in the Unconsolidated Joint Venture with a carrying value of $182.8 million.

Current wording

As of June 30, 2025, our loan portfolio consisted of 73 loans with a net book value of $3.2 billion, and 20 investments in real estate-related securities and other of $295.2 million. The Company conducts and expects to continue to conduct its commercial real estate lending business through CLR, a Maryland statutory trust and subsidiary of the Company which we expect to be taxed as a REIT for U.S. federal income tax purposes. As of June 30, 2025, CLR holds a diversified portfolio of approximately $1.5 billion which includes first mortgage loans with a net book value of $1.1 billion, CMBS with an estimated fair value of $195.3 million, and an investment in the Unconsolidated Joint Venture with a carrying value of $155.4 million.

Previous wording

As of March 31, 2025, we owned 186 properties, which consisted of 173 retail properties, nine office properties, and four industrial properties, representing 25 industry sectors and comprising approximately 6.6 million rentable square feet of commercial space located in 36 states, with a net book value of $1.1 billion. As of March 31, 2025, we owned condominium developments with a net book value of $53.4 million.

Current wording

As of June 30, 2025, we owned 185 properties, which consisted of 172 retail properties, nine office properties, and four industrial properties, representing 25 industry sectors and comprising approximately 6.6 million rentable square feet of commercial space located in 36 states, with a net book value of $1.1 billion. As of June 30, 2025, we owned condominium developments with a net book value of $33.3 million.

Previous wording

During the three months ended March 31, 2025, we disposed of three properties encompassing approximately 40,000 gross rentable square feet and five condominium units for a total consideration of $31.4 million, as further discussed in Note 4 — Real Estate Assets to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Current wording

During the six months ended June 30, 2025, we disposed of four properties encompassing approximately 59,000 gross rentable square feet and 11 condominium units for a total consideration of $66.0 million, as further discussed in Note 4 — Real Estate Assets to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Previous wording

Our operating results and cash flows are primarily influenced by interest income from our credit investments, rental and other property income from our commercial properties, interest expense on our indebtedness and credit investments and other operating expenses. In general, our business model is such that rising interest rates will correlate to increases in our net income, while declining interest rates will correlate to decreases in our net income. As of March 31, 2025, 91.3% of our CMBS and loans held-for-investment by carrying value earned a floating rate of interest, indexed to SOFR, and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans. CMFT Management reviews our investment portfolio and is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary. In addition, as 94.8% of our rentable square feet was under lease, including any month-to-month agreements, as of March 31, 2025, with a weighted average remaining lease term of 9.3 years, we believe our exposure to changes in commercial rental rates on our portfolio is substantially mitigated, except for vacancies caused by tenant bankruptcies or other factors. Our manager regularly monitors the creditworthiness of our tenants by reviewing each tenant’s financial results, any available credit rating agency reports on the tenant or guarantor, the operating history of the property with such tenant, the tenant’s market share and track record within its industry segment, the general health and outlook of the tenant’s industry segment and other information for changes and possible trends. If our manager identifies significant changes or trends that may adversely affect the creditworthiness of a tenant, it will gather a more in-depth knowledge of the tenant’s financial condition and, if necessary, attempt to mitigate the tenant credit risk by evaluating the possible sale of the property or identifying a possible replacement tenant should the current tenant fail to perform on the lease.

Current wording

Our operating results and cash flows are primarily influenced by interest income from our credit investments, rental and other property income from our commercial properties, interest expense on our indebtedness and credit investments and other operating expenses. In general, our business model is such that rising interest rates will correlate to increases in our net income, while declining interest rates will correlate to decreases in our net income. As of June 30, 2025, 91.1% of our CMBS and loans held-for-investment by carrying value earned a floating rate of interest, indexed to SOFR, and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans. CMFT Management reviews our investment portfolio and is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary. In addition, as 94.9% of our rentable square feet was under lease, including any month-to-month agreements, as of June 30, 2025, with a weighted average remaining lease term of 9.1 years, we believe our exposure to changes in commercial rental rates on our portfolio is substantially mitigated, except for vacancies caused by tenant bankruptcies or other factors. Our manager regularly monitors the creditworthiness of our tenants by reviewing each tenant’s financial results, any available credit rating agency reports on the tenant or guarantor, the operating history of the property with such tenant, the tenant’s market share and track record within its industry segment, the general health and outlook of the tenant’s industry segment and other information for changes and possible trends. If our manager identifies significant changes or trends that may adversely affect the creditworthiness of a tenant, it will gather a more in-depth knowledge of the tenant’s financial condition and, if necessary, attempt to mitigate the tenant credit risk by evaluating the possible sale of the property or identifying a possible replacement tenant should the current tenant fail to perform on the lease.

Previous wording

Thethree months ended March 31, 2025 have been characterized by a mix of positive and challenging developments leading to continued volatility in global markets. Investor concerns over inflation, higher interest rates, slowing economic growth, uncertainty around tariffs, political and regulatory uncertainty and geopolitical conditions have persisted.

Current wording

Thesix months ended June 30, 2025 have been characterized by a mix of positive and challenging developments leading to continued volatility in global markets. Investor concerns over inflation, higher interest rates, slowing economic growth, uncertainty around the impacts of imposed tariffs, political and regulatory uncertainty and geopolitical conditions have persisted.

Previous wording

Heightened inflation caused the Federal Reserve to raise interest rates in 2022 and 2023. Although the majority of our business model is such that elevated interest rates will, all else being equal, correlate to increases in our net income, increases in interest rates may adversely affect the ability of our existing borrowers to pay debt service, tenants and property values of our own portfolio and the assets that serve as collateral for our loans. The Federal Reserve began to decrease interest rates in the second half of 2024 and has indicated that it may continue to decrease interest rates in 2025. In a period of declining interest rates, our interest income on floating-rate investments may generally decrease, subject to the impact of interest rate floors in our investment portfolio.

Current wording

Heightened inflation caused the Federal Reserve to raise interest rates in 2022 and 2023. Although the majority of our business model is such that elevated interest rates will, all else being equal, correlate to increases in our net income, increases in interest rates may adversely affect the ability of our existing borrowers to pay debt service, tenants and property values of our own portfolio and the assets that serve as collateral for our loans. The Federal Reserve began to decrease interest rates in the second half of 2024 and has indicated that it may continue to decrease interest rates in 2025, though rates have been held steady so far this year. In a period of declining interest rates, our interest income on floating-rate investments may generally decrease, subject to the impact of interest rate floors in our investment portfolio.

Previous wording

For a complete discussion of risk factors related to the economy that could impact our lending and our business, see the Company’s Annual Report on Form 10-K for the year ended December 31,2024.

Current wording

For a complete discussion of risk factors related to the economy that could impact our lending and our business, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

•Net loss attributable to the Company of $32.9 million, or $0.08 per share.

Current wording

•Net loss attributable to the Company of $7.7 million, or $0.02 per share.

Previous wording

•Redeemed 1.8 million shares under the share redemption program for $11.2 million at an average price of $6.09 per share.

Current wording

•Redeemed 3.6 million shares under the share redemption program for $20.5 million at an average price of $5.67 per share.

Previous wording

•Declared aggregate distributions of $0.08 per share.

Current wording

•Declared aggregate distributions of $0.17 per share.

Previous wording

•Originated $116.0 million first mortgage loans, $55.0 million of which was a result of a loan modification.

Current wording

•Originated $178.6 million first mortgage loans, $55.0 million of which was a result of a loan modification.

Previous wording

•Funded $29.8 million in existing first mortgage loans.

Current wording

•Funded $42.6 million in existing first mortgage loans.

Previous wording

•Invested $1.3 million in liquid corporate senior loans and sold liquid corporate senior loans for an aggregate gross sales price of $2.9 million.

Current wording

•Invested $1.3 million in liquid corporate senior loans and sold liquid corporate senior loans for an aggregate gross sales price of $4.8 million.

Previous wording

•Invested $32.6 million in corporate senior loans.

Current wording

•Invested $73.5 million in corporate senior loans.

Previous wording

•Received principal repayments on loans held-for-investment of $54.3 million.

Current wording

•Received principal repayments on loans held-for-investment of $261.5 million.

Previous wording

•Received repayments on CMBS of $1.8 million and sold CMBS for an aggregate gross sales price of $43.6 million.

Current wording

•Received repayments on CMBS of $2.7 million and sold CMBS for an aggregate gross sales price of $43.6 million.

Previous wording

•Received proceeds from the repayment of portfolio investments on the CLO subordinated note of $2.3 million.

Current wording

•Received proceeds from the repayment of portfolio investments on the CLO subordinated note of $3.9 million.

Previous wording

•Funded an additional $14.0 million in NP JV Holdings.

Current wording

•Funded an additional $24.3 million in NP JV Holdings.

Previous wording

•Disposed of three properties for an aggregate sales price of $13.0 million.

Current wording

•Disposed of four properties for an aggregate sales price of $15.8 million.

Previous wording

•Disposed of five condominium units for an aggregate sales price of $18.4 million.

Current wording

•Disposed of 11 condominium units for an aggregate sales price of $50.2 million.

Previous wording

•Decreased total debt by $25.9 million, reducing our ratio of debt to total gross assets net of gross intangible lease liabilities to 61.8%.

Current wording

•Decreased total debt by $145.7 million, reducing our ratio of debt to total gross assets net of gross intangible lease liabilities to 61.2%.

Previous wording

(1)Table does not include our investment in the Unconsolidated Joint Venture, which had a carrying value of $192.5 million as of March 31, 2025, $182.8 million of which is held through CLR as of March 31, 2025.

Current wording

(1)Table does not include our investment in the Unconsolidated Joint Venture, which had a carrying value of $165.5 million as of June 30, 2025, $155.4 million of which is held through CLR as of June 30, 2025.

Previous wording

(2)As of March 31, 2025, first mortgage loans with a net book value of $1.1 billion and CMBS with an estimated fair value of $196.3 million were held through CLR.

Current wording

(2)As of June 30, 2025, first mortgage loans with a net book value of $1.1 billion and CMBS with an estimated fair value of $195.3 million were held through CLR.

Previous wording

(1)As of March 31, 2025, 91.3% of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR.

Current wording

(1)As of June 30, 2025, 91.1% of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR.

Previous wording

(3)Table does not include our investment in the Unconsolidated Joint Venture, which had a carrying value of $192.5 million as of March 31, 2025.

Current wording

(3)Table does not include our investment in the Unconsolidated Joint Venture, which had a carrying value of $165.5 million as of June 30, 2025.

Previous wording

(5)Does not include the CLO subordinated note. As of March 31, 2025, the CLO subordinated note has an initial maturity date of July 2037 and an estimated effective yield of 14.9%.

Current wording

(5)Does not include the CLO subordinated note. As of June 30, 2025, the CLO subordinated note has an initial maturity date of July 2037 and an estimated effective yield of 15.2%.

Previous wording

As of March 31, 2025, we owned 186 properties located in 36 states, the gross rentable square feet of which was 94.8% leased, including any month-to-month agreements, with a weighted average lease term remaining of 9.3 years. As of March 31, 2025, we had certain geographic and industry concentrations in our property holdings. As of March 31, 2025, we had properties located in California, Virginia, and Ohio which accounted for 17%, 14%, and 13%, respectively, of our 2025 annualized rental income. In addition, we had tenants in the health and personal care stores and manufacturing industries, which accounted for 12% and 10%, respectively, of our 2025 annualized rental income. During the three months ended March 31, 2025, we disposed of three properties for an aggregate gross sales price of $13.0 million as well as five condominium units for a gross sales price of $18.4 million.

Current wording

As of June 30, 2025, we owned 185 properties located in 36 states, the gross rentable square feet of which was 94.9% leased, including any month-to-month agreements, with a weighted average lease term remaining of 9.1 years. As of June 30, 2025, we had certain geographic and industry concentrations in our property holdings. As of June 30, 2025, we had properties located in California, Virginia, and Ohio which accounted for 17%, 14%, and 13%, respectively, of our 2025 annualized rental income. In addition, we had tenants in the health and personal care stores and manufacturing industries, which accounted for 12% and 10%, respectively, of our 2025 annualized rental income. During the six months ended June 30, 2025, we disposed of four properties for an aggregate gross sales price of $15.8 million as well as 11 condominium units for a gross sales price of $50.2 million.

Previous wording

The following table summarizes our real estate acquisition activity during the three months ended March 31, 2025. No properties were acquired during the three months ended March 31, 2024.

Current wording

The following table summarizes our real estate acquisition activity during the three and six months ended June 30, 2025. No properties were acquired during the three and six months ended June 30, 2024.

Previous wording

The following table compares our summarized results of operations for the three months ended March 31, 2025 and 2024 by operating segment (amounts in thousands):

Current wording

The following table compares our summarized results of operations for the three and six months ended June 30, 2025 and 2024 by operating segment (amounts in thousands):

Previous wording

Our Credit segment revenues decreased $32.3 million for the three months ended March 31, 2025, as compared to the same period in 2024. The decrease was primarily due to a decrease in the overall size of our investment portfolio during the three months ended March 31, 2025 as compared to the same period in 2024. As of March 31, 2025, we held credit investments with an outstanding principal balance of $4.2 billion compared to credit investments with an outstanding principal balance of $5.0 billion as of March 31, 2024.

Current wording

Our Credit segment revenues decreased $20.3 million for the three months ended June 30, 2025, as compared to the same period in 2024. The decrease was primarily due to a decrease in the overall size of our investment portfolio during the three months ended June 30, 2025 as compared to the same period in 2024. As of June 30, 2025, we held credit investments with an outstanding principal balance of $4.1 billion compared to credit investments with an outstanding principal balance of $4.8 billion as of June 30, 2024.

Previous wording

Expenses for our Credit segment consist primarily of interest expense, management fees, increases (decreases) to our provision for credit losses, and general and administrative expenses. The decrease in our Credit segment expenses of $26.3 million for the three months ended March 31, 2025, as compared to the same period in 2024, was primarily due to a $20.3 million decrease in interest expense, primarily due to decreased outstanding borrowings used to fund credit investments, as well as a decrease in average index rates during the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was further driven by a $61.8 million increase in provision for credit losses during the three months ended March 31, 2025, as compared to a $67.1 million increase in provision for credit losses during the same period in 2024. This change was primarily related to the reclassification of $71.0 million of unrealized loss related to one CMBS position previously recorded in other comprehensive income in the accompanying condensed consolidated statements of comprehensive income (loss) to increase in provision for credit losses on the condensed consolidated statements of operations during the three months ended March 31, 2025, partially offset by the sale of loans held-for-investment with asset-specific credit loss provisions.

Current wording

Expenses for our Credit segment consist primarily of interest expense, management fees, increases (decreases) to our provision for credit losses, and general and administrative expenses. The decrease in our Credit segment expenses of $232.5 million for the three months ended June 30, 2025, as compared to the same period in 2024, was primarily due to a $211.7 million decrease in provision for credit losses during the three months ended June 30, 2025, as compared to the same period in 2024 due to a decrease in incremental asset-specific credit loss provisions on funded and unfunded commitments related to the Company’s first mortgage loans. The decrease was further driven by a $19.2 million decrease in interest expense, primarily due to decreased outstanding borrowings used to fund credit investments during the three months ended June 30, 2025 as compared to the same period in 2024.

Previous wording

The increase in our Real Estate segment revenues of $4.3 million for the three months ended March 31, 2025, as compared to the same period in 2024, was primarily due to the addition of four properties subsequent to March 31, 2024. Refer to “Same Store Analysis” below for a further discussion of net operating income at our “same store properties”.

Current wording

The increase in our Real Estate segment revenues of $5.7 million for the three months ended June 30, 2025, as compared to the same period in 2024, was primarily due to the addition of four properties subsequent to June 30, 2024. Refer to “Same Store Analysis” below for a further discussion of net operating income at our “same store properties”.

Previous wording

The increase in our Real Estate segment expenses of $7.9 million for the three months ended March 31, 2025, as compared to the same period in 2024, was primarily due to an increase in impairment charges of $7.0 million for the three months ended March 31, 2025, as compared to the same period in 2024, as one property was deemed to be impaired during the three months ended March 31, 2025, due to sales prices or revised cash flow estimates that was less than its carrying values, resulting in impairment charges of $7.0 million, as compared to no impairments recorded during the three months ended March 31, 2024. Additionally the increase in Real Estate segment expenses was further driven by an increase in property operating expenses of $582,000 driven by the acquisition of four properties subsequent to March 31, 2024, partially offset by the disposition of 10 properties subsequent to March 31, 2024. Refer to “Same Store Analysis” below for a further discussion of net operating income at our “same store properties”.

Current wording

The decrease in our Real Estate segment expenses of $46.5 million for the three months ended June 30, 2025, as compared to the same period in 2024, was primarily due to a decrease in impairment charges of $50.8 million for the three months ended June 30, 2025, as compared to the same period in 2024, as two properties were deemed to be impaired during the three months ended June 30, 2025, resulting in impairment charges of $648,000, as compared to seven properties impaired during the three months ended June 30, 2024, resulting in impairment charges of $51.5 million. The decrease in Real Estate segment expenses was partially offset by an increase in property operating expenses of $2.1 million driven by the acquisition of four properties subsequent to June 30, 2024. Refer to “Same Store Analysis” below for a further discussion of net operating income at our “same store properties”.

Previous wording

Our corporate other income did not meaningfully change during the .three months ended March 31, 2025 as compared to the same period in 2024.

Current wording

Other income for our Real Estate segment, which primarily consists of gain on disposition of real estate, net, and other income, did not meaningfully change during the three months ended June 30, 2025, compared to the same period in 2024.

Previous wording

Our corporate expenses consist primarily of general and administrative expenses, expense reimbursements to related parties, interest expense, net related to our credit facilities, and property operating expenses related to our condominium and rental units acquired via foreclosure. The decrease in corporate expenses of $3.2 million during the three months ended March 31, 2025 as compared to the same period in 2024, was partially due to a decrease in property operating expenses of $2.1 million, primarily driven by decreased condominium-related legal expenses during the three months ended March 31, 2025 as compared to the same period in 2024.

Current wording

Our corporate expenses consist primarily of general and administrative expenses, expense reimbursements to related parties, interest expense, net related to our credit facilities, and property operating expenses related to our condominium and rental units acquired via foreclosure. The decrease in corporate expenses of $4.6 million during the three months ended June 30, 2025 was primarily due to no condominium-related impairment expense being recorded for the three months ended June 30, 2025 as compared to $5.5 million during the same period in 2024.

Previous wording

Other income for our Credit segment consists of gain on investment in unconsolidated entities, unrealized gain (loss) on equity securities, loss on debt extinguishment, along with dividend income from our equity securities. The increase in our Credit segment other income (expense) of $11.7 million during the three months ended March 31, 2025, as compared to the same period in 2024, was primarily due to a $3.3 million unrealized gain on equity securities during the three months ended March 31, 2025, as compared to a $11.4 million unrealized loss on equity securities for the same period in 2024. The increase was partially offset by a $1.5 million decrease in gain on investment in unconsolidated entities during the three months ended March 31, 2025, as compared to the same period in 2024. The increase was further offset by a $1.5 million decrease in other income, net during the three months ended March 31, 2025, as compared to the same period in 2024, primarily related to the $922,000 decrease in interest income generated by short-term liquid investments in cash and cash equivalents on the condensed consolidated balance sheets, during the three months ended March 31, 2025 as compared to the same period in 2024.

Current wording

Other income for our Credit segment consists of gain on investment in unconsolidated entities, unrealized (loss) gain on equity securities, loss on debt extinguishment, along with dividend income from our equity securities. The increase in our Credit segment other income (expense) of $12.6 million during the six months ended June 30, 2025, as compared to the same period in 2024, was primarily due to a $1.2 million unrealized gain on equity securities during the six months ended June 30, 2025, as compared to a $15.6 million unrealized loss on equity securities for the same period in 2024. The increase was partially offset by a $2.9 million decrease in other income, net during the six months ended June 30, 2025, as compared to the same period in 2024, primarily related to a $2.9 million decrease in interest income generated by short-term liquid investments in cash and cash equivalents on the condensed consolidated balance sheets, during the six months ended June 30, 2025 as compared to the same period in 2024. The increase was further offset by a $1.3 million decrease in gain on investment in unconsolidated entities during the six months ended June 30, 2025, as compared to the same period in 2024.

Previous wording

Other income for our Real Estate segment primarily consists of gain on disposition of real estate and condominium developments, net, and other income. The increase in our Real Estate segment other income of $391,000 for the three months ended March 31, 2025, as compared to the same period in 2024, was primarily due to the disposition of three properties resulting in a net gain of $418,000 during the three months ended March 31, 2025, compared to no properties being disposed of during the three months ended March 31, 2024.

Current wording

Other income for our Real Estate segment primarily consists of gain on disposition of real estate, net, and other income. The increase in our Real Estate segment other income of $322,000 for the six months ended June 30, 2025, as compared to the same period in 2024, was primarily due to the disposition of four properties resulting in a net gain of $411,000 during the six months ended June 30, 2025, compared to the disposition of two properties resulting in no gain or loss during the six months ended June 30, 2024.

Previous wording

Our corporate revenues, which consist primarily of rental income from our condominium and rental units acquired via foreclosure, did not meaningfully change during the three months ended March 31, 2025 as compared to the same period in 2024.

Current wording

Our corporate revenues, which consist primarily of rental income from our condominium and rental units acquired via foreclosure, decreased $119,000 during the six months ended June 30, 2025 as compared to the same period in 2024, due to the disposition of all condominium units not under development during the six months ended June 30, 2025.

Previous wording

Our results of operations are influenced by the timing of acquisitions and the operating performance of our real estate assets. We review our stabilized operating results, measured by net operating income, from properties that we owned for the entirety of both the current and prior year reporting periods, referred to as “same store” properties, and we believe that the presentation of operating results for same store properties provides useful information to stockholders. Net operating income is a supplemental non-GAAP financial measure of a real estate company’s operating performance. Net operating income is considered by management to be a helpful supplemental performance measure, as it enables management to evaluate the impact of occupancy, rents, leasing activity and other controllable property operating results at our real estate properties, and it provides a consistent method for the comparison of our properties. We define net operating income as operating revenues less operating expenses, which exclude (i) depreciation and amortization, (ii) interest expense and other non-property related revenue and expense items such as (a) general and administrative expenses, (b) expense reimbursements to related parties, (c) management fees, (d) transaction-related expenses, (e) real estate impairment, (f) increase in provision for credit losses, (g) gain on disposition of real estate and condominium developments, net, (h) merger-related expenses, net and (i) interest income. Our calculation of net operating income may not be comparable to that of other REITs and should not be considered to be more relevant or accurate in evaluating our operating performance than the current GAAP methodology used in calculating net loss. In determining the same store property pool, we include all properties that were owned for the entirety of both the current and prior reporting periods, except for properties during the current or prior year that were under development or redevelopment.

Current wording

Our results of operations are influenced by the timing of acquisitions and the operating performance of our real estate assets. We review our stabilized operating results, measured by net operating income, from properties that we owned for the entirety of both the current and prior year reporting periods, referred to as “same store” properties, and we believe that the presentation of operating results for same store properties provides useful information to stockholders. Net operating income is a supplemental non-GAAP financial measure of a real estate company’s operating performance. Net operating income is considered by management to be a helpful supplemental performance measure, as it enables management to evaluate the impact of occupancy, rents, leasing activity and other controllable property operating results at our real estate properties, and it provides a consistent method for the comparison of our properties. We define net operating income as operating revenues less operating expenses, which exclude (i) depreciation and amortization, (ii) interest expense and other non-property related revenue and expense items such as (a) general and administrative expenses, (b) expense reimbursements to related parties, (c) management fees, (d) transaction-related expenses, (e) real estate impairment, (f) increase in provision for credit losses, (g) gain on disposition of real estate and condominium developments, net, (h) merger-related expenses, net and (i) interest income. Our calculation of net operating income may not be comparable to that of other REITs and should not be considered to be more relevant or accurate in evaluating our operating performance than the current GAAP methodology used in calculating net income (loss). In determining the same store property pool, we include all properties that were owned for the entirety of both the current and prior reporting periods, except for properties during the current or prior year that were under development or redevelopment.

Previous wording

The following table reconciles our Real Estate segment net income, calculated in accordance with GAAP, to net operating income (in thousands):

Current wording

The following table reconciles our Real Estate segment net income (loss), calculated in accordance with GAAP, to net operating income (in thousands):