American Healthcare REIT (“AHR”) Announces Second Quarter 2024 Results; Increases Full Year 2024 Guidance

American Healthcare REIT (“AHR”) Announces Second Quarter 2024 Results; Increases Full Year 2024 Guidance

IRVINE, Calif., Aug. 5, 2024 /PRNewswire/ — American Healthcare REIT, Inc. (the “Company,” “we,” “our,” “management,” or “us”) (NYSE: AHR) announced today its second quarter 2024 results and updated its full year 2024 guidance.

Key Highlights:

Reported GAAP net income attributable to common stockholders of $0.01 per diluted share for the three months ended June 30, 2024.Reported Normalized Funds from Operations attributable to common stockholders (“NFFO”) of $0.33 per diluted share for the three months ended June 30, 2024.Reported GAAP net income of $2.9 million for the three months ended June 30, 2024, compared to GAAP net loss of $(11.9) million for the same period in 2023.Achieved total portfolio Same-Store Net Operating Income (“NOI”) growth of 15.7% for the three months ended June 30, 2024 compared to the same period in 2023, highlighted by 49.1% and 24.1% Same-Store NOI growth from its senior housing operating properties (“SHOP”) and integrated senior health campuses (“ISHC”), respectively.Increased total portfolio Same-Store NOI growth guidance for the year ending December 31, 2024 by 700 basis points at the midpoint from a range of 5.0% to 7.0% to a revised range of 12.0% to 14.0%, due to better-than-expected operations across all of its property segments for the year ending December 31, 2024.Increased NFFO guidance for the year ending December 31, 2024 by $0.04 at the midpoint from a range of $1.18 to $1.24 to a revised range of $1.23 to $1.27, primarily due to increased expectations for NOI growth for its Same-Store portfolio. The increase to NFFO guidance for the year ending December 31, 2024, is partially offset by the increase in interest expense expectations.Reported a 0.5x improvement in the Company’s Net-Debt-to-Annualized Adjusted EBITDA from 6.4x as of March 31, 2024 to 5.9x as of June 30, 2024.

“Our first year as a listed company is off to a great start. Demand for healthcare real estate is evident in our portfolio performance. Growth in the first half of 2024 is exceeding the expectations we set at the beginning of the year prompting our upward revisions to Same-Store NOI growth guidance and NFFO guidance. As we plan for the balance of the year and into 2025, we expect the elevated levels of Same-Store NOI growth to persist due to the demand-supply imbalance present in long-term care,” said Danny Prosky, the Company’s President and Chief Executive Officer.

Second Quarter and Year-to-date 2024 Results

The Company’s Same-Store NOI growth results are detailed below. Hands-on asset management resulting in increased occupancy and expense management continues to support bottom-line results.

SS NOI Growth Rates: Quarter Ended June 30, 2024 Relative to Quarter Ended June 30, 2023

Segment

NOI Growth/(Decline)

ISHC

24.1 %

Outpatient Medical

(0.4) %

SHOP

49.1 %

Triple-Net Leased Properties

2.9 %

Total Portfolio

15.7 %

 

SS NOI Growth Rates: Six Months Ended June 30, 2024 Relative to Six Months Ended June 30, 2023

Segment

NOI Growth

ISHC

22.0 %

Outpatient Medical

0.3 %

SHOP

41.4 %

Triple-Net Leased Properties

3.6 %

Total Portfolio

14.4 %

 

“Property performance across our ISHC and SHOP segments remains strong. Having built sector-leading occupancy through the first half of 2024, we believe we have the opportunity to further enhance pricing power strategies to continue strengthening performance across our ISHC and SHOP segments. We believe our occupancy gains in addition to positive RevPOR growth in the first half of the year will continue to benefit Same-Store NOI growth results in the back half of 2024 and into early 2025,” said Gabe Willhite, the Company’s Chief Operating Officer.

Full Year 2024 Guidance

The Company’s following guidance for the year ending December 31, 2024, originally announced on March 21, 2024 in the Company’s Fourth Quarter 2023 Earnings Release, has been revised to reflect management’s improved outlook. Revised guidance ranges are detailed below:

Revised Full Year 2024 Guidance

Prior Full Year 2024 Guidance

Metric

Midpoint

FY 2024 Range

FY 2024 Range

NAREIT FFO per share

$1.20

$1.17 to $1.22

$1.13 to $1.19

NFFO per share

$1.25

$1.23 to $1.27

$1.18 to $1.24

Total Portfolio SS NOI Growth

13.0 %

12.0% to 14.0%

5.0% to 7.0%

Segment-Level SS NOI

Growth / (Decline):

ISHC

19.0 %

18.0% to 20.0%

8.0% to 10.0%

Outpatient Medical

(0.3) %

(0.5)% to 0.0%

(0.5)% to 0.0%

SHOP

47.5 %

45.0% to 50.0%

25.0% to 30.0%

Triple-Net Leased Properties

2.0 %

1.0% to 3.0%

1.0% to 3.0%

____________

Certain of the assumptions underlying the Company’s 2024 guidance can be found within the Non-GAAP reconciliations in this earnings release and in the appendix of the Company’s Second Quarter 2024 Supplemental Financial Information (“Supplemental”). A reconciliation of Net income (loss) calculated in accordance with GAAP to NAREIT FFO and NFFO can be found within the Non-GAAP reconciliations in this earnings release. Non-GAAP financial measures and other terms, as used in this earnings release, are also defined and further explained in the Supplemental. The Company does not provide guidance for the most comparable GAAP financial measures of total revenues and property operating and maintenance expenses. Additionally, a reconciliation of the forward-looking Non-GAAP financial measures of Same-Store NOI growth to the comparable GAAP financial measures cannot be provided without unreasonable effort because the Company is unable to reasonably predict certain items contained in the GAAP measures, including non-recurring and infrequent items that are not indicative of the Company’s ongoing operations. Such items include, but are not limited to, impairment on depreciated real estate assets, net gain or loss on sale of real estate assets, stock-based compensation, casualty loss, non-Same-Store revenues and non-Same-Store operating expenses. These items are uncertain, depend on various factors and could have a material impact on the Company’s GAAP results for the guidance period.  

Transactional Activity

During the three months ended June 30, 2024, the Company exercised the purchase options on three previously leased ISHC properties for approximately $45.8 million. The lease rate on such leases was approximately 9.1%. The Company continues to market assets for sale and is not changing sales proceed expectations of approximately $65.0 million for the full year ending December 31, 2024. The Company has sold approximately $15.6 million of Non-Core Properties during the six months ended June 30, 2024.

Capital Markets and Balance Sheet Activity

As of June 30, 2024, the Company’s total Pro-Rata indebtedness was $1.80 billion, and the Company had approximately $863.1 million of total consolidated liquidity comprised of cash and undrawn capacity on its lines of credit. The Company’s Net-Debt-to-Annualized Adjusted EBITDA as of June 30, 2024 was 5.9x.

Subsequent to quarter end, on August 5, 2024 (180 days after the Company’s initial listing of its common stock on the New York Stock Exchange), the Company completed the conversion of all of its shares of Class T common stock and Class I common stock into the Company’s listed shares of common stock.

“We are increasing our full year 2024 Same-Store NOI growth and earnings guidance to reflect the occupancy gains and results we have achieved in 2024.  The robust organic earnings growth thus far has allowed us to further improve our company’s leverage profile with improving Net-Debt-to-Annualized-Adjusted EBITDA and we anticipate continuing to improve with disposition proceeds and incremental earnings growth,” said Brian Peay, the Company’s Chief Financial Officer.

Distribution

As previously announced, the Company’s Board of Directors declared a cash distribution for the quarter ended June 30, 2024 of $0.25 per share of its common stock, Class T common stock and Class I common stock. The second quarter distribution was paid in cash on July 19, 2024 to stockholders of record as of June 27, 2024.

Supplemental Information

The Company has disclosed supplemental information regarding its portfolio, financial position and results of operations as of June 30, 2024 and for the quarter then ended and certain other information, which is available on the Investor Relations section of the Company’s website at https://ir.americanhealthcarereit.com.

Conference Call and Webcast Information

The Company will host a webcast and conference call at 1:00 p.m. Eastern Time on August 6, 2024. During the conference call, Company executives will review second quarter 2024 results, discuss recent events and conduct a question-and-answer period.

To join via webcast, investors may use the following link: https://events.q4inc.com/attendee/697424546.  

Alternatively, to join via telephone, please pre-register at the following link.

A digital replay of the call will be available on the Investor Relations section of the Company’s website at https://ir.americanhealthcarereit.com shortly after the conclusion of the call.

Forward-Looking Statements

Certain statements contained in this press release, including statements relating to the Company’s expectations regarding its interest expense savings, balance sheet, net income or loss per share, FFO per share, NFFO per share, total portfolio Same-Store NOI growth, segment-level Same-Store NOI growth, occupancy, NOI growth, revenue growth, margin expansion, purchases and sales of assets, and plans for Trilogy may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such forward-looking statements generally can be identified by the use of forward-looking terminology, such as “may,” “will,” “can,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “possible,” “initiatives,” “focus,” “seek,” “objective,” “goal,” “strategy,” “plan,” “potential,” “potentially,” “preparing,” “projected,” “future,” “long-term,” “once,” “should,” “could,” “would,” “might,” “uncertainty” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Any such forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which the Company operates, and beliefs of, and assumptions made by, the Company’s management and involve known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied therein, including, without limitation, risks disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and other periodic reports filed with the Securities and Exchange Commission. Except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statements contained in this release.

Non-GAAP Financial Measures

The Company’s reported results are presented in accordance with GAAP. The Company also discloses the following Non-GAAP financial measures: EBITDA, Adjusted EBITDA, NAREIT FFO, NFFO, NOI and Same-Store NOI. The Company believes these Non-GAAP financial measures are useful supplemental measures of its operating performance and used by investors and analysts to compare the operating performance of the Company between periods and to other REITs or companies on a consistent basis without having to account for differences caused by unanticipated and/or incalculable items. Definitions of the Non-GAAP financial measures used herein and reconciliations to the most directly comparable financial measure calculated in accordance with GAAP can be found at the end of this earnings release. See below for further information regarding the Company’s Non-GAAP financial measures.

EBITDA and Adjusted EBITDA

Management uses earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA to facilitate internal and external comparisons to our historical operating results and in making operating decisions. EBITDA and Adjusted EBITDA are widely used by investors, lenders, credit and equity analysts in the valuation, comparison, investment recommendations of companies. Additionally, EBITDA and Adjusted EBITDA are utilized by our Board of Directors to evaluate management. Neither EBITDA nor Adjusted EBITDA represents net income (loss) or cash flow provided from operating activities as determined in accordance with GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the EBITDA and Adjusted EBITDA may not be comparable to similarly entitled items reported by other REITs or other companies.

Funds from Operations (FFO) and Normalized Funds from Operations (NFFO)

We believe that the use of FFO, which excludes the impact of real estate-related depreciation and amortization and impairments, provides a further understanding of our operating performance to investors, industry analysts and our management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, which may not be immediately apparent from net income (loss). However, FFO and NFFO should not be construed to be (i) more relevant or accurate than the current GAAP methodology in calculating net income (loss) as an indicator of our operating performance, (ii) more relevant or accurate than GAAP cash flows from operations as an indicator of our liquidity or (iii) indicative of funds available to fund our cash needs, including our ability to make distributions to our stockholders. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the Non-GAAP FFO and NFFO measures and the adjustments to GAAP in calculating FFO and NFFO. Presentation of this information is intended to provide useful information to investors, industry analysts and management as they compare the operating performance metrics used by the REIT industry, although it should be noted that some REITs may use different methods of calculating funds from operations and normalized funds from operations, so comparisons with such REITs may not be meaningful.

Net Operating Income

We believe that NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI are appropriate supplemental performance measures to reflect the performance of our operating assets because NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI exclude certain items that are not associated with the operations of the properties. We believe that NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI are widely accepted measures of comparative operating performance in the real estate community. However, our use of the terms NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing these amounts.

NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI are not equivalent to our net income (loss) as determined under GAAP and may not be a useful measure in measuring operational income or cash flows. Furthermore, NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI should not be considered as alternatives to net income (loss) as an indication of our operating performance or as an alternative to cash flows from operations as an indication of our liquidity. NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI should not be construed to be more relevant or accurate than the GAAP methodology in calculating net income (loss). NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI should be reviewed in conjunction with other measurements as an indication of our performance.

About American Healthcare REIT, Inc.

American Healthcare REIT, Inc. is a self-managed real estate investment trust that acquires, owns and operates a diversified portfolio of clinical healthcare real estate properties, focusing primarily on outpatient medical buildings, senior housing, skilled nursing facilities and other healthcare-related facilities. Its properties are located in the United States, the United Kingdom and the Isle of Man.

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2024 and December 31, 2023

(In thousands, except share and per share amounts) (Unaudited)

June 30, 2024

December 31, 2023

ASSETS

Real estate investments, net

$            3,509,526

$            3,425,438

Debt security investment, net

89,058

86,935

Cash and cash equivalents

52,087

43,445

Restricted cash

45,515

47,337

Accounts and other receivables, net

201,030

185,379

Identified intangible assets, net

179,458

180,470

Goodwill

234,942

234,942

Operating lease right-of-use assets, net

177,367

227,846

Other assets, net

155,632

146,141

Total assets

$            4,644,615

$            4,577,933

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

Liabilities:

Mortgage loans payable, net

$            1,228,597

$            1,302,396

Lines of credit and term loan, net

783,873

1,223,967

Accounts payable and accrued liabilities

253,657

242,905

Identified intangible liabilities, net

5,533

6,095

Financing obligations

40,444

41,756

Operating lease liabilities

178,587

225,502

Security deposits, prepaid rent and other liabilities

49,811

76,134

Total liabilities

2,540,502

3,118,755

Commitments and contingencies

Redeemable noncontrolling interests

220

33,843

Equity:

Stockholders’ equity:

Preferred stock, $0.01 par value per share; 200,000,000 shares authorized; none issued and outstanding

Common Stock, $0.01 par value per share; 700,000,000 shares authorized; 65,372,222 shares issued and
    outstanding as of June 30, 2024 and none issued and outstanding as of December 31, 2023

644

Class T common stock, $0.01 par value per share; 200,000,000 shares authorized; 19,601,476 and
    19,552,856 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

195

194

Class I common stock, $0.01 par value per share; 100,000,000 shares authorized; 46,673,320 shares
    issued and outstanding as of both June 30, 2024 and December 31, 2023

467

467

Additional paid-in capital

3,278,806

2,548,307

Accumulated deficit

(1,344,285)

(1,276,222)

Accumulated other comprehensive loss

(2,456)

(2,425)

Total stockholders’ equity

1,933,371

1,270,321

Noncontrolling interests

170,522

155,014

Total equity

2,103,893

1,425,335

Total liabilities, redeemable noncontrolling interests and equity

$            4,644,615

$            4,577,933

 

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three and Six Months Ended June 30, 2024 and 2023

(In thousands, except share and per share amounts) (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2024

2023

2024

2023

Revenues and grant income:

Resident fees and services

$           458,013

$           410,622

$           910,131

$           819,252

Real estate revenue

46,568

50,568

93,983

94,164

Grant income

6,381

6,381

Total revenues and grant income

504,581

467,571

1,004,114

919,797

Expenses:

Property operating expenses

402,564

372,549

806,193

742,695

Rental expenses

13,323

14,653

27,050

29,848

General and administrative

11,746

11,774

23,574

24,827

Business acquisition expenses

15

888

2,797

1,220

Depreciation and amortization

45,264

44,701

88,031

89,371

Total expenses

472,912

444,565

947,645

887,961

Other income (expense):

Interest expense:

Interest expense (including amortization of deferred financing costs,
   debt discount/premium and loss on debt extinguishments)

(30,596)

(40,990)

(67,034)

(80,001)

Gain in fair value of derivative financial instruments

388

4,993

6,805

4,798

(Loss) gain on dispositions of real estate investments, net

(2)

(2,072)

2,261

(2,204)

Loss from unconsolidated entities

(1,035)

(113)

(2,240)

(419)

Gain on re-measurement of previously held equity interest

726

Foreign currency gain (loss)

82

1,068

(344)

2,076

Other income, net

3,106

2,589

4,969

4,197

Total net other expense

(28,057)

(34,525)

(55,583)

(70,827)

Income (loss) before income taxes

3,612

(11,519)

886

(38,991)

Income tax expense

(686)

(348)

(964)

(491)

Net income (loss)

2,926

(11,867)

(78)

(39,482)

Net (income) loss attributable to noncontrolling interests

(947)

(316)

(1,835)

1,427

Net income (loss) attributable to controlling interest

$               1,979

$           (12,183)

$             (1,913)

$           (38,055)

Net income (loss) per share of Common Stock, Class T common
   stock and Class I common stock attributable to controlling interest:

Basic

$                 0.01

$               (0.19)

$               (0.02)

$               (0.58)

Diluted

$                 0.01

$               (0.19)

$               (0.02)

$               (0.58)

Weighted average number of shares of Common Stock, Class T common
   stock and Class I common stock outstanding:

Basic

130,532,144

66,033,345

117,413,643

66,029,779

Diluted

130,689,889

66,033,345

117,413,643

66,029,779

Net income (loss)

$               2,926

$           (11,867)

$                  (78)

$           (39,482)

Other comprehensive income (loss):

Foreign currency translation adjustments

12

124

(31)

246

Total other comprehensive income (loss)

12

124

(31)

246

Comprehensive income (loss)

2,938

(11,743)

(109)

(39,236)

Comprehensive (income) loss attributable to noncontrolling interests

(947)

(316)

(1,835)

1,427

Comprehensive income (loss) attributable to controlling interest

$               1,991

$           (12,059)

$             (1,944)

$           (37,809)

 

AMERICAN HEALTHCARE REIT, INC.

FFO and Normalized FFO Reconciliation

For the Three and Six Months Ended June 30, 2024 and 2023

(In thousands, except share and per share amounts) (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2024

2023

2024

2023

Net income (loss)

$                2,926

$          (11,867)

$                   (78)

$          (39,482)

Depreciation and amortization related to real estate — consolidated properties

45,226

44,663

87,955

89,295

Depreciation and amortization related to real estate — unconsolidated entities

186

95

372

158

Loss (gain) on dispositions of real estate investments, net — consolidated properties

2

2,072

(2,261)

2,204

Net (income) loss attributable to noncontrolling interests

(947)

(316)

(1,835)

1,427

Gain on re-measurement of previously held equity interest

(726)

Depreciation, amortization, net gain/loss on dispositions and gain on re-measurement — noncontrolling interests

(5,647)

(7,073)

(11,109)

(13,611)

NAREIT FFO attributable to controlling interest

$              41,746

$            27,574

$              73,044

$            39,265

Business acquisition expenses

$                     15

$                 888

$                2,797

$              1,220

Amortization of above- and below-market leases

419

455

845

9,130

Amortization of closing costs — debt security investments

80

68

156

133

Change in deferred rent

(556)

(180)

(1,145)

(240)

Non-cash impact of changes to equity instruments

2,765

1,593

4,700

2,665

Capitalized interest

(71)

(54)

(205)

(80)

Loss on debt extinguishments

1,280

Gain in fair value of derivative financial instruments

(388)

(4,993)

(6,805)

(4,798)

Foreign currency (gain) loss

(82)

(1,068)

344

(2,076)

Adjustments for unconsolidated entities

(138)

(179)

(248)

(253)

Adjustments for noncontrolling interests

(50)

43

75

(590)

Normalized FFO attributable to controlling interest

$              43,740

$            24,147

$              74,838

$            44,376

Weighted average common shares outstanding — diluted

130,689,889

66,033,345

117,413,643

66,029,779

Net income (loss) per common share attributable to controlling interest — diluted

$                  0.01

$              (0.19)

$                (0.02)

$              (0.58)

NAREIT FFO per common share attributable to controlling interest — diluted

$                  0.32

$                0.42

$                  0.62

$                0.59

Normalized FFO per common share attributable to controlling interest — diluted

$                  0.33

$                0.37

$                  0.64

$                0.67

 

AMERICAN HEALTHCARE REIT, INC.

Adjusted EBITDA Reconciliation

For the Three Months Ended June 30, 2024

(In thousands) (Unaudited)

 

Net Income

$                             2,926

Interest expense (including amortization of deferred financing costs,
   debt discount/premium and loss on debt extinguishments)

30,596

Income tax expense

686

Depreciation and amortization (including amortization of leased assets
   and accretion of lease liabilities)

45,750

EBITDA

$                           79,958

Loss from unconsolidated entities

1,035

Straight line rent and amortization of above/below market leases

(329)

Non-cash stock-based compensation expense

2,765

Business acquisition expenses

15

Loss on dispositions of real estate investments, net

2

Foreign currency gain

(82)

Gain in fair value of derivative financial instruments

(388)

Non-recurring one-time items

(489)

Adjusted EBITDA

$                           82,487

 

AMERICAN HEALTHCARE REIT, INC.

NOI and Cash NOI Reconciliation

For the Three and Six Months Ended June 30, 2024 and 2023

(In thousands) (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2024

2023

2024

2023

Net income (loss)

$                    2,926

$                (11,867)

$                       (78)

$                (39,482)

General and administrative

11,746

11,774

23,574

24,827

Business acquisition expenses

15

888

2,797

1,220

Depreciation and amortization

45,264

44,701

88,031

89,371

Interest expense

30,596

40,990

67,034

80,001

Gain in fair value of derivative financial instruments

(388)

(4,993)

(6,805)

(4,798)

Loss (gain) on dispositions of real estate investments, net

2

2,072

(2,261)

2,204

Loss from unconsolidated entities

1,035

113

2,240

419

Gain on re-measurement of previously held equity interest

(726)

Foreign currency (gain) loss

(82)

(1,068)

344

(2,076)

Other income, net

(3,106)

(2,589)

(4,969)

(4,197)

Income tax expense

686

348

964

491

Net operating income

$                  88,694

$                  80,369

$                170,871

$                147,254

Grant Income

(6,381)

(6,381)

Total NOI (excluding Grant Income)

$                  88,694

$                  73,988

$                170,871

$                140,873

Straight line rent

(748)

(993)

(1,880)

(2,083)

Facility rental expense

7,888

9,717

16,728

19,362

Other non-cash adjustments

315

718

706

9,332

COVID subsidy

(143)

Cash NOI attributable to noncontrolling interests (1)

(13,014)

(10,746)

(25,441)

(21,292)

Cash NOI

$                  83,135

$                  72,684

$                160,984

$                146,049

____________

(1)

All quarters are based upon current quarter’s ownership percentage.

 

AMERICAN HEALTHCARE REIT, INC.

Same-Store NOI Reconciliation

For the Three and Six Months Ended June 30, 2024 and 2023

(In thousands) (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2024

2023

2024

2023

ISHC

NOI (excluding Grant Income)

$                  45,308

$                  34,160

$                  87,288

$                  67,569

Facility rental expense

7,888

9,717

16,728

19,362

Cash NOI attributable to noncontrolling interest (1)

(12,767)

(10,533)

(24,964)

(20,867)

Cash NOI (2)

$                  40,429

$                  33,344

$                  79,052

$                  66,064

New acquisitions/dispositions/transitions (2)

(4,565)

(4,438)

(9,445)

(9,025)

Same-Store NOI (2)

$                  35,864

$                  28,906

$                  69,607

$                  57,039

Outpatient Medical

NOI

$                  21,011

$                  22,713

$                  41,989

$                  45,788

Straight line rent

(128)

(327)

(286)

(720)

Other non-cash adjustments

82

378

246

565

Cash NOI

$                  20,965

$                  22,764

$                  41,949

$                  45,633

New acquisitions/dispositions/transitions

(4)

(1,794)

(79)

(4,041)

Non-Core Properties

(853)

(787)

(1,687)

(1,539)

Same-Store NOI

$                  20,108

$                  20,183

$                  40,183

$                  40,053

SHOP

NOI

$                  10,141

$                    3,913

$                  16,650

$                    8,988

Other non-cash adjustments

35

(5)

COVID subsidies

(143)

Cash NOI attributable to noncontrolling interests (1)

(60)

(30)

(106)

(60)

Cash NOI

$                  10,081

$                    3,918

$                  16,544

$                    8,780

New acquisitions/dispositions/transitions

(1,891)

1,480

(1,107)

2,037

Development conversion

510

418

1,050

830

Other normalizing adjustments

100

86

100

86

Same-Store NOI

$                    8,800

$                    5,902

$                  16,587

$                  11,733

Triple-Net Leased Properties

NOI

$                  12,234

$                  13,202

$                  24,944

$                  18,528

Straight line rent

(620)

(666)

(1,594)

(1,363)

Other non-cash adjustments

233

305

460

8,772

Cash NOI attributable to noncontrolling interest (1)

(187)

(183)

(371)

(365)

Cash NOI

$                  11,660

$                  12,658

$                  23,439

$                  25,572

Debt security investment

(2,039)

(2,045)

(4,120)

(4,015)

New acquisitions/dispositions/transitions

(1,271)

(2,924)

Non-Core Properties

(373)

(352)

(746)

(704)

Same-Store NOI

$                    9,248

$                    8,990

$                  18,573

$                  17,929

 

AMERICAN HEALTHCARE REIT, INC.

Same-Store NOI Reconciliation – (Continued)

For the Three and Six Months Ended June 30, 2024 and 2023

(In thousands) (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2024

2023

2024

2023

Total

NOI (excluding Grant Income)

$                  88,694

$                  73,988

$                170,871

$                140,873

Straight line rent

(748)

(993)

(1,880)

(2,083)

Facility rental expense

7,888

9,717

16,728

19,362

Other non-cash adjustments

315

718

706

9,332

COVID subsidies

(143)

Cash NOI attributable to noncontrolling interests (1)

(13,014)

(10,746)

(25,441)

(21,292)

Cash NOI (2)

$                  83,135

$                  72,684

$                160,984

$                146,049

Debt security investment

(2,039)

(2,045)

(4,120)

(4,015)

New acquisitions/dispositions/transitions (2)

(6,460)

(6,023)

(10,631)

(13,953)

Development conversion

510

418

1,050

830

Non-Core Properties

(1,226)

(1,139)

(2,433)

(2,243)

Other normalizing adjustments (2)

100

86

100

86

Same-Store NOI (2)

$                  74,020

$                  63,981

$                144,950

$                126,754

____________

(1)

All quarters are based upon current quarter’s ownership percentage.

(2)

Prior quarters information has been updated to reflect the increase in ownership to 76.0% in the Company’s ISHC segment effective April 2024.

 

AMERICAN HEALTHCARE REIT, INC.

Same-Store Revenue Reconciliation

For the Three Months Ended and Six Months Ended June 30, 2024 and 2023

(In thousands) (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2024

2023

2024

2023

ISHC

GAAP revenue and Grant Income

$                393,774

$                369,237

$                786,896

$                731,007

Grant Income

(6,381)

(6,381)

Cash revenue attributable to noncontrolling interest (1)

(94,506)

(87,087)

(188,855)

(173,912)

Cash revenue (2)

299,268

275,769

598,041

550,714

Revenue attributable to non-Same-Store properties (2)

(95,237)

(86,515)

(189,725)

(171,252)

Same-Store revenue (2)

$                204,031

$                189,254

$                408,316

$                379,462

Outpatient Medical

GAAP revenue

$                  33,682

$                  36,640

$                  67,749

$                  74,123

Straight line rent

(128)

(327)

(286)

(720)

Other non-cash adjustments

(267)

(19)

(452)

(138)

Cash revenue

33,287

36,294

67,011

73,265

Revenue attributable to non-Same-Store properties

(3,182)

(155)

(7,165)

Revenue attributable to Non-Core Properties

(1,264)

(1,186)

(2,530)

(2,335)

Same-Store revenue

$                  32,023

$                  31,926

$                  64,326

$                  63,765

SHOP

GAAP revenue

$                  64,239

$                  47,766

$                123,235

$                  94,626

Cash revenue attributable to noncontrolling interests (1)

(291)

(357)

(567)

(736)

Cash revenue

63,948

47,409

122,668

93,890

Revenue attributable to non-Same-Store properties

(20,409)

(8,342)

(36,462)

(15,955)

Revenue attributable to development conversion

(415)

(478)

(685)

(1,069)

Same-Store revenue

$                  43,124

$                  38,589

$                  85,521

$                  76,866

Triple-Net Leased Properties

GAAP revenue

$                  12,886

$                  13,928

$                  26,234

$                  20,041

Straight line rent

(620)

(666)

(1,594)

(1,363)

Other non-cash adjustments

212

266

422

8,734

Cash revenue attributable to noncontrolling interest (1)

(186)

(184)

(372)

(366)

Cash revenue

12,292

13,344

24,690

27,046

Debt security investment

(2,039)

(2,045)

(4,120)

(4,015)

Revenue attributable to non-Same-Store properties

(1,369)

(3,174)

Revenue attributable to Non-Core Properties

(463)

(448)

(921)

(925)

Same-Store revenue

$                    9,790

$                    9,482

$                  19,649

$                  18,932

 

AMERICAN HEALTHCARE REIT, INC.

Same-Store Revenue Reconciliation – (Continued)

For the Three Months Ended and Six Months Ended June 30, 2024 and 2023

(In thousands) (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2024

2023

2024

2023

Total

GAAP revenue and Grant Income

$                504,581

$                467,571

$             1,004,114

$                919,797

Straight line rent

(748)

(993)

(1,880)

(2,083)

Other non-cash adjustments

(55)

247

(30)

8,596

Grant Income

(6,381)

(6,381)

Cash revenue attributable to noncontrolling interests (1)

(94,983)

(87,628)

(189,794)

(175,014)

Cash revenue (2)

408,795

372,816

812,410

744,915

Debt security investment

(2,039)

(2,045)

(4,120)

(4,015)

Revenue attributable to non-Same-Store properties (2)

(115,646)

(99,408)

(226,342)

(197,546)

Revenue attributable to development conversion

(415)

(478)

(685)

(1,069)

Revenue attributable to Non-Core Properties

(1,727)

(1,634)

(3,451)

(3,260)

Same-Store revenue (2)

$                288,968

$                269,251

$                577,812

$                539,025

____________

(1)

All quarters are based upon current quarter’s ownership percentage.

(2)

Prior quarters information has been updated to reflect the increase in ownership to 76.0% in the Company’s ISHC segment effective April 2024.

 

AMERICAN HEALTHCARE REIT, INC.

Earnings Guidance Reconciliation

For the Year Ending December 31, 2024

(Dollars and shares in millions, except per share amounts) (Unaudited)

Revised 

Full

Previous
Full Year 2024 Guidance

Year 2024 Guidance

Low

High

Low

High

Net (loss) income attributable to common stockholders

$             (8.80)

$             (3.05)

$             (4.15)

$                3.19

Depreciation and amortization(1)

154.50

154.50

147.26

147.26

NAREIT FFO attributable to common stockholders

$            147.30

$            151.30

$            143.11

$            150.45

Amortization other intangible assets(1)

$                1.80

$                1.80

$                1.66

$                1.66

Change in deferred rent(1)

(1.10)

(1.10)

(0.42)

(0.42)

Non-cash impact of changes to equity plan(1)

9.40

9.40

6.04

6.04

Other adjustments

(3.20)

(3.20)

(0.80)

(0.80)

Normalized FFO attributable to common stockholders

$            154.20

$            158.20

$            149.58

$            156.92

Net (loss) income per common share — diluted

$             (0.07)

$             (0.02)

$             (0.03)

$                0.03

NAREIT FFO per common share — diluted

$                1.17

$                1.22

$                1.13

$                1.19

Normalized FFO per common share — diluted

$                1.23

$                1.27

$                1.18

$                1.24

Weighted average diluted shares

124.5

124.5

126.6

126.6

Total Portfolio Same-Store NOI growth

12.00 %

14.00 %

5.00 %

7.00 %

Segment-Level Same-Store NOI growth

ISHC

18.00 %

20.00 %

8.00 %

10.00 %

OM

(0.50 %)

— %

(0.50 %)

— %

SHOP

45.00 %

50.00 %

25.00 %

30.00 %

Triple-Net Leased Properties

1.00 %

3.00 %

1.00 %

3.00 %

____________

(1)

Amounts presented net of noncontrolling interests’ share and AHR’s share of unconsolidated entities.

 

Definitions

Adjusted EBITDA: EBITDA excluding the impact of gain or loss from unconsolidated entities, straight line rent and amortization of above/below market leases, non-cash stock-based compensation expense, business acquisition expenses, gain or loss on sales of real estate investments, unrealized foreign currency gain or loss, change in fair value of derivative financial instruments, impairments of real estate investments, impairment of intangible assets and goodwill, and non-recurring one-time items.
Cash NOI: NOI excluding the impact of, without duplication, (1) non-cash items such as straight-line rent and the amortization of lease intangibles, (2) third-party facility rent payments and (3) other items set forth in the Cash NOI reconciliation included herein. Both Cash NOI and Same-Store NOI include ownership and other adjustments.
EBITDA: A Non-GAAP financial measure that is defined as earnings before interest, taxes, depreciation and amortization.
GAAP revenue: Revenue recognized in accordance with Generally Accepted Accounting Principles (“GAAP”), which includes straight line rent and other non-cash adjustments.
ISHC: Integrated senior health campuses include a range of senior care, including independent living, assisted living, memory care, skilled nursing services and certain ancillary businesses. Integrated senior health campuses are predominantly operated utilizing a RIDEA structure.
NAREIT FFO or FFO: Funds from operations attributable to controlling interest; a Non-GAAP financial measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT (the “White Paper”). The White Paper defines FFO as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of certain real estate assets, gains or losses upon consolidation of a previously held equity interest, and impairment write-downs of certain real estate assets and investments, plus depreciation and amortization related to real estate, after adjustments for unconsolidated partnerships and joint ventures. While impairment charges are excluded from the calculation of FFO as described above, investors are cautioned that impairments are based on estimated future undiscounted cash flows. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO.
Net Debt: Total long-term debt, excluding operating lease liabilities, less cash and cash equivalents and restricted cash pertaining to debt.
NOI: Net operating income; a Non-GAAP financial measure that is defined as net income (loss), computed in accordance with GAAP, generated from properties before general and administrative expenses, business acquisition expenses, depreciation and amortization, interest expense, gain or loss in fair value of derivative financial instruments, gain or loss on dispositions, impairment of real estate investments, impairment of intangible assets and goodwill, income or loss from unconsolidated entities, gain on re-measurement of previously held equity interest, foreign currency gain or loss, other income or expense and income tax benefit or expense.
Non-Core Properties: Assets that have been deemed not essential to generating future economic benefit or value to our day-to-day operations and/or are projected to be sold.
Normalized FFO attributable to controlling interest or NFFO: FFO further adjusted for the following items included in the determination of GAAP net income (loss): expensed acquisition fees and costs, which we refer to as business acquisition expenses; amounts relating to changes in deferred rent and amortization of above and below-market leases (which are adjusted in order to reflect such payments from a GAAP accrual basis); the non-cash impact of changes to our equity instruments; non-cash or non-recurring income or expense; the noncash effect of income tax benefits or expenses; capitalized interest; impairment of intangible assets and goodwill; amortization of closing costs on debt investments; mark-to-market adjustments included in net income (loss); gains or losses included in net income (loss) from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan; and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect Normalized FFO on the same basis.
Occupancy: With respect to OM, the percentage of total rentable square feet leased and occupied, including month-to-month leases, as of the date reported. With respect to all other property types, occupancy represents average quarterly operating occupancy based on the most recent quarter of available data. The Company uses unaudited, periodic financial information provided solely by tenants to calculate occupancy and has not independently verified the information. Occupancy metrics are reflected at our Pro-Rata share.
Outpatient Medical or OM: Outpatient Medical buildings.
Pro-Rata: As of June 30, 2024, we owned and/or operated our 126 integrated senior health campuses through entities of which we owned 76.0% of the ownership interests and eight other buildings through entities of which we owned 90.0% to 98.0% of the ownership interests. Because we have a controlling interest in these entities, these entities and the properties these entities own are consolidated in our financial statements in accordance with GAAP. However, while such properties are presented in our financial statements on a consolidated basis, we are only entitled to our Pro-Rata share of the net cash flows generated by such properties. As a result, we have presented certain property information herein based on our Pro-Rata ownership interest in these entities and the properties these entities own, as of the applicable date, and not on a consolidated basis. In such instances, information is noted as being presented on a “Pro-Rata share” basis.
RevPOR: Revenue per occupied room. RevPOR is calculated as total revenue generated by occupied rooms divided by the number of occupied rooms.
RIDEA: Used to describe properties within the portfolio that utilize the RIDEA structure as described in “RIDEA structure”.
RIDEA structure: A structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, pursuant to which we lease certain healthcare real estate properties to a wholly-owned taxable REIT subsidiary (“TRS”), which in turn contracts with an eligible independent contractor (“EIK”) to operate such properties for a fee. Under this structure, the EIK receives management fees, and the TRS receives revenue from the operation of the healthcare real estate properties and retains, as profit, any revenue remaining after payment of expenses (including intercompany rent paid to us and any taxes at the TRS level) necessary to operate the property. Through the RIDEA structure, in addition to receiving rental revenue from the TRS, we retain any after-tax profit from the operation of the healthcare real estate properties and benefit from any improved operational performance while bearing the risk of any decline in operating performance at the properties.
Same-Store or SS: Properties owned or consolidated the full year in both comparison years and that are not otherwise excluded. Properties are excluded from Same-Store if they are: (1) sold, classified as held for sale or properties whose operations were classified as discontinued operations in accordance with GAAP; (2) impacted by materially disruptive events, such as flood or fire for an extensive period of time; or (3) scheduled to undergo or currently undergoing major expansions/renovations or business model transitions or have transitioned business models after the start of the prior comparison period.
Same-Store NOI or SS NOI: Cash NOI for our Same-Store properties. Same-Store NOI is used to evaluate the operating performance of our properties using a consistent population which controls for changes in the composition of our portfolio. Both Cash NOI and Same-Store NOI include ownership and other adjustments.
SHOP: Senior housing operating properties.
Square Feet or Sq. Ft.: Net rentable square feet calculated utilizing Building Owners and Managers Association measurement standards.
Total Debt: The principal balances of the Company’s revolving credit facility, term loans and secured indebtedness as reported in the Company’s consolidated financial statements.
Trilogy: Trilogy Investors, LLC; one of our consolidated joint ventures, in which we indirectly owned a 76.0% interest as of June 30, 2024.
Trilogy REIT Holdings: Trilogy REIT Holdings, LLC; the joint venture between the Company and NorthStar Healthcare Income, Inc. that owns the interest in Trilogy or Trilogy Investors, LLC.
Triple-net leased: A lease where the tenant is responsible for making rent payments, maintaining the leased property and paying property taxes and other expenses.

Contact: Alan Peterson
Email: [email protected]

 

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SOURCE American Healthcare REIT, Inc.