Cash flow generation is deeply negative, with the AFFO deficit widening to -$140.4 million in 2026Q2, meaning the $21.4 million quarterly dividend is being funded entirely by external capital rather than operations.
KKR Real Estate Finance Trust Inc. (KREF) cash flow statement — 12-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 |
|---|
| Cash from Operations | 63M | 72.28M | 132.56M | 155.72M | 141.13M | 124.79M | 115.06M | 91.71M | 76.83M | 53.8M | 25.41M | 11.54M | 32K |
| Operating CF Growth % | -119.2% | -45.47% | -14.87% | 10.34% | 13.09% | 8.46% | 25.46% | 19.37% | 42.8% | 111.76% | 120.12% | 35968.75% | - |
| Operating CF / Revenue % | 15.21% | 15.78% | 22.37% | 23.59% | 32.33% | 43.67% | 42.63% | 33.26% | 38.8% | 63.96% | 76.6% | 82.47% | 4.57% |
| Net Income | -184.96M | -50.49M | 34.33M | -31.66M | 37.59M | 137.18M | 54.4M | 89.97M | 89.81M | 60.08M | 32.27M | 17.17M | -2.09M |
| Depreciation & Amortization | 3.59M | 2.6M | 983K | 0 | 0 | 0 | 0 | 0 | 8.59M | 3.14M | 0 | 0 | 0 |
| Stock-Based Compensation | 7.37M | 7.93M | 8.26M | 8.07M | 7.83M | 7.43M | 5.68M | 4.09M | 1.97M | 65K | 0 | 0 | 0 |
| Other Non-Cash Items | 240.66M | 117.25M | 78.93M | 179.47M | 107.98M | -21.55M | 54.06M | -2.18M | 2.56M | -3.38M | -4.42M | -5.49M | -160K |
| Working Capital Changes | 48K | -5M | 10.06M | -177K | -12.29M | 1.73M | 932K | -159K | -1.17M | -775K | -2.44M | -145K | 2.28M |
| Cash from Investing | 667.51M | 264.29M | 1.12B | 13.49M | -1.18B | -1.54B | 88.71M | -926.31M | -2B | -1.08B | -456.45M | -364.31M | -66.75M |
| Acquisitions (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Purchase of Investments | -63.74M | -33.52M | -2.38M | 0 | 0 | 0 | 0 | -94.01M | -15.61M | -1.2B | -10.24M | -23.89M | 0 |
| Sale of Investments | 1.04B | 0 | 0 | 1.29M | 0 | 1.3M | 0 | 94.07M | 99.75M | 37.31M | 2.05M | 92.32M | 0 |
| Other Investing | -281.52M | 303.39M | 1.13B | 14.06M | -1.18B | -1.54B | 88.71M | -926.38M | -2.1B | 80.79M | -445.75M | -340.15M | -66.75M |
| Cash from Financing | -756.12M | -355.78M | -1.29B | -271.51M | 1.01B | 1.58B | -160.56M | 815.69M | 1.9B | 1.04B | 500.6M | 379.49M | 66.96M |
| Dividends Paid | -86.19M | -88.16M | -103.1M | -140.16M | -136.91M | -103.95M | -97.08M | -99.55M | -89.23M | -50.72M | -21.92M | -7.56M | 0 |
| Common Dividends | -64.89M | -66.86M | -81.8M | -118.85M | -115.37M | -95.68M | -96.45M | -98.95M | -88.85M | -50.58M | -21.91M | -7.54M | 0 |
| Debt Issuance (Net) | -2M | -1000K | -1000K | -1000K | 1000K | 1000K | -1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 0 |
| Share Repurchases | -52.39M | -43.41M | -10.03M | 0 | -35.79M | 0 | -25.06M | -4.11M | -31.35M | -648K | 0 | 0 | 0 |
| Other Financing | -12.76M | -24.65M | -8.25M | -7.47M | -36.65M | -30.42M | -13.52M | -13.7M | -31.29M | 564.52M | -9.16M | 6.2M | 66.96M |
| Net Change in Cash | -25.61M | -19.21M | -41.77M | -102.31M | -23.15M | 162.94M | 43.21M | -18.91M | -16.99M | 7.17M | 69.56M | 26.73M | 244K |
| Exchange Rate Effect | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash at Beginning | 137.34M | 106.55M | 148.31M | 250.62M | 273.77M | 110.83M | 67.62M | 86.53M | 103.52M | 96.35M | 26.79M | 61K | 0 |
| Cash at End | 84.35M | 87.34M | 106.55M | 148.31M | 250.62M | 273.77M | 110.83M | 67.62M | 86.53M | 103.52M | 96.35M | 26.79M | 244K |
| Free Cash Flow | 34.31M | 66.7M | 124.46M | 153.85M | 139.46M | 124.79M | 115.06M | 91.71M | 76.83M | 53.8M | 24.95M | 11.27M | 32K |
| FCF Growth % | -66.32% | -46.41% | -19.11% | 10.32% | 11.76% | 8.46% | 25.46% | 19.37% | 42.8% | 115.63% | 121.43% | 35112.5% | - |
| FCF / Revenue % | 8.28% | 14.56% | 21% | 23.3% | 31.95% | 43.67% | 42.63% | 33.26% | 38.8% | 63.96% | 75.23% | 80.51% | 4.57% |
Quick answers to the most common questions about buying KREF stock.
KKR Real Estate Finance Trust Inc. (KREF) generated $72.3M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
KKR Real Estate Finance Trust Inc. (KREF) generated $66.7M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
KKR Real Estate Finance Trust Inc. (KREF) spent $5.6M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, KKR Real Estate Finance Trust Inc. (KREF) returned $88.2M to shareholders via cash dividends and spent $43.4M on share repurchases. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
Dividend funded by capital raises
Metrics are mathematically derived from official filings.
AFFO Deficit Widens, Dividend Uncovered
KREF's AFFO deficit ballooned to -$140.4 million in 2026Q2, as reported in recent SEC filings, meaning the company is paying its $21.4 million quarterly dividend entirely from external capital rather than operating cash flow.
The dividend payout ratio is meaningless when AFFO is negative, as it has been for seven of the last ten quarters. The widening deficit suggests the dividend is being funded by asset sales or share issuances, a practice that is unsustainable and erodes book value. Investors should monitor the company's liquidity sources to understand how long this distribution can be maintained.
FFO and OCF Decouple, Signaling Distortion
In 2026Q2, FFO was -$115.4 million while operating cash flow was a positive $14.6 million, a stark divergence that suggests significant non-cash items or working capital adjustments are distorting the GAAP cash flow figure.
This decoupling indicates that GAAP operating cash flow is not a reliable proxy for the REIT's core earnings power. The negative FFO, which is the relevant metric for a mortgage REIT, confirms the portfolio is generating losses, while the positive OCF may be inflated by items like straight-line rent adjustments or deferred financing costs that do not reflect true economic performance.
Net Income and FFO Tell a Similar Story
The FFO/NI ratio has been near or below 1.0 for most periods, such as -0.13 in 2026Q2, indicating that depreciation and amortization are not the primary drivers of the gap between GAAP net income and core cash earnings.
For a mortgage REIT, the typical depreciation distortion is minimal. The fact that FFO and Net Income are both deeply negative suggests the losses are fundamental to the business model, likely stemming from net interest margin compression, credit losses, or fair value declines on the loan portfolio. The problem is operational, not an accounting artifact.
Dividend Reliant on External Capital
With AFFO consistently negative and dividends paid at approximately $21-22 million per quarter, KREF appears dependent on external financing or asset dispositions to fund its distribution, as reported in its financial statements.
This reliance creates a vulnerability: if capital markets conditions tighten or asset values decline further, the company may be forced to cut the dividend. The pattern of negative AFFO alongside steady dividend payments suggests a strategic choice to maintain the yield, but it comes at the cost of balance sheet strength and future flexibility.
What the Cash Flow Statement Hides
The positive operating cash flow in recent quarters may mask underlying credit deterioration, as it could be inflated by the collection of previously accrued interest or the reversal of loss reserves that are not repeated.
For a mortgage REIT, cash flow from operations can be temporarily boosted by the resolution of non-accrual loans or the receipt of deferred payments. The persistent negative FFO and AFFO suggest the core portfolio is not generating sustainable cash returns. Investors should scrutinize the loan loss reserve activity and non-accrual loan trends to assess the true quality of the reported cash flow.