What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-15 compared with 2022-05-16 · 442 added, 249 removed, 863 unchanged (44% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2022 and December 31, 2021

As of June 30, 2022 and December 31, 2021

2022 December 31,

27 unchanged sentences

200,000,000 shares authorized;

77,504,480 and 77,176,406 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

77,864,724 and 77,176,406 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

770,000 763,000

1 unchanged sentence

800,000,000 shares authorized;

186,305,249 and 185,855,625 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

186,499,872 and 185,855,625 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

1,865,000 1,859,000

8 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)

As of March 31, 2022 and December 31, 2021

As of June 30, 2022 and December 31, 2021

(1) Such liabilities of American Healthcare REIT, Inc.

represented liabilities of American Healthcare REIT Holdings, LP or its consolidated subsidiaries as of March 31, 2022 and December 31, 2021.

represented liabilities of American Healthcare REIT Holdings, LP or its consolidated subsidiaries as of June 30, 2022 and December 31, 2021.

American Healthcare REIT Holdings, LP is a variable interest entity, or VIE, and a consolidated subsidiary of American Healthcare REIT, Inc.

The creditors of American Healthcare REIT Holdings, LP or its consolidated subsidiaries do not have recourse against American Healthcare REIT, Inc., except for the 2022 Credit Facility, as defined in Note 9, held by American Healthcare REIT Holdings, LP in the amount of $ 934,400,000 as of March 31, 2022 and the 2018 Credit Facility and 2019 Credit Facility, each as defined in Note 9, held by American Healthcare REIT Holdings, LP in the amount of $ 441,900,000 and $ 480,000,000 , respectively, as of December 31, 2021, which were guaranteed by American Healthcare REIT, Inc.

The creditors of American Healthcare REIT Holdings, LP or its consolidated subsidiaries do not have recourse against American Healthcare REIT, Inc., except for the 2022 Credit Facility, as defined in Note 9, held by American Healthcare REIT Holdings, LP in the amount of $ 962,900,000 as of June 30, 2022 and the 2018 Credit Facility and 2019 Credit Facility, each as defined in Note 9, held by American Healthcare REIT Holdings, LP in the amount of $ 441,900,000 and $ 480,000,000 , respectively, as of December 31, 2021, which were guaranteed by American Healthcare REIT, Inc.

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended March 31, 2022 and 2021

Three Months Ended March 31,

For the Three and Six Months Ended June 30, 2022 and 2021

Three Months Ended June 30,

Six Months Ended June 30,

2022 2021 2022 2021

Revenues and grant income:

11 unchanged sentences

Interest expense:

Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishments) ( 23,325,000 ) ( 20,365,000 )

Interest expense (including amortization of deferred financing costs, debt discount/premium and gain/loss on debt extinguishments) ( 20,345,000 ) ( 18,490,000 ) ( 43,670,000 ) ( 38,855,000 )

Gain in fair value of derivative financial instruments — 1,775,000 500,000 3,596,000

Gain (loss) on dispositions of real estate investments 756,000 ( 335,000 )

(Loss) gain on dispositions of real estate investments ( 73,000 ) ( 42,000 ) 683,000 ( 377,000 )

Impairment of real estate investments ( 17,340,000 ) ( 3,335,000 ) ( 17,340,000 ) ( 3,335,000 )

Income (loss) from unconsolidated entities 638,000 ( 901,000 ) 2,024,000 ( 2,672,000 )

19 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Three Months Ended March 31, 2022 and 2021

For the Three and Six Months Ended June 30, 2022 and 2021

Three Months Ended June 30, 2022

Stockholders’ Equity

6 unchanged sentences

Interests Total Equity

BALANCE — March 31, 2022 263,809,729 $ 2,629,000 $ 2,536,811,000 $ ( 980,613,000 ) $ ( 2,160,000 ) $ 1,556,667,000 $ 174,154,000 $ 1,730,821,000

Offering costs — common stock — — 1,000 — — 1,000 — 1,000

Issuance of common stock under the DRIP 1,199,427 12,000 11,131,000 — — 11,143,000 — 11,143,000

Issuance of nonvested restricted common stock 54,900 1,000 ( 1,000 ) — — — — —

Amortization of nonvested restricted common stock and stock units — — 980,000 — — 980,000 — 980,000

Stock based compensation — — — — — — 21,000 21,000

Repurchase of common stock ( 699,460 ) ( 7,000 ) ( 6,442,000 ) — — ( 6,449,000 ) — ( 6,449,000 )

Distributions to noncontrolling interests — — — — — — ( 3,537,000 ) ( 3,537,000 )

Reclassification of noncontrolling interests to mezzanine equity — — — — — — ( 21,000 ) ( 21,000 )

Adjustment to value of redeemable noncontrolling interests — — ( 976,000 ) — — ( 976,000 ) ( 1,000 ) ( 977,000 )

Distributions declared ($ 0.10 per share)

— — — ( 26,405,000 ) — ( 26,405,000 ) — ( 26,405,000 )

Net (loss) income — — — ( 17,310,000 ) — ( 17,310,000 ) 1,986,000 ( 15,324,000 ) (1)

Other comprehensive loss — — — — ( 493,000 ) ( 493,000 ) — ( 493,000 )

BALANCE — June 30, 2022 264,364,596 $ 2,635,000 $ 2,541,504,000 $ ( 1,024,328,000 ) $ ( 2,653,000 ) $ 1,517,158,000 $ 172,602,000 $ 1,689,760,000

Three Months Ended June 30, 2021

Stockholders’ Equity

Shares Amount Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders’

Equity Noncontrolling

Interests Total Equity

BALANCE — March 31, 2021 179,658,367 $ 1,798,000 $ 1,730,237,000 $ ( 876,118,000 ) $ ( 1,939,000 ) $ 853,978,000 $ 164,095,000 $ 1,018,073,000

Amortization of nonvested restricted common stock — — 26,000 — — 26,000 — 26,000

Distributions to noncontrolling interests — — — — — — ( 179,000 ) ( 179,000 )

Adjustment to value of redeemable noncontrolling interests — — ( 261,000 ) — — ( 261,000 ) ( 112,000 ) ( 373,000 )

Distributions declared ($ 0.02 per share)

— — — ( 3,187,000 ) — ( 3,187,000 ) — ( 3,187,000 )

Net loss — — — ( 7,678,000 ) — ( 7,678,000 ) ( 253,000 ) ( 7,931,000 ) (1)

Other comprehensive income — — — — 42,000 42,000 — 42,000

BALANCE — June 30, 2021 179,658,367 $ 1,798,000 $ 1,730,002,000 $ ( 886,983,000 ) $ ( 1,897,000 ) $ 842,920,000 $ 163,551,000 $ 1,006,471,000

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY — (Continued)

For the Three and Six Months Ended June 30, 2022 and 2021

Six Months Ended June 30, 2022

Stockholders’ Equity

Shares Amount Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders’

Equity Noncontrolling

Interests Total Equity

BALANCE — December 31, 2021

2 unchanged sentences

Issuance of common stock under the DRIP 2,425,500 24,000 22,423,000 — — 22,447,000 — 22,447,000

Amortization of nonvested common stock compensation — — 811,000 — — 811,000 — 811,000

Issuance of nonvested restricted common stock 54,900 1,000 ( 1,000 ) — — — — —

Amortization of nonvested restricted common stock and stock units — — 1,791,000 — — 1,791,000 — 1,791,000

Stock based compensation — — — — — — 42,000 42,000

8 unchanged sentences

Other comprehensive loss

BALANCE — March 31, 2022

— — — — ( 687,000 ) ( 687,000 ) — ( 687,000 )

BALANCE — June 30, 2022

264,364,596 $ 2,635,000 $ 2,541,504,000 $ ( 1,024,328,000 ) $ ( 2,653,000 ) $ 1,517,158,000 $ 172,602,000 $ 1,689,760,000

Six Months Ended June 30, 2021

Stockholders’ Equity

10 unchanged sentences

— — ( 1,000 ) — — ( 1,000 ) — ( 1,000 )

Amortization of nonvested common stock compensation

— — 27,000 — — 27,000 — 27,000

Amortization of nonvested restricted common stock — — 53,000 — — 53,000 — 53,000

Stock based compensation

3 unchanged sentences

Adjustment to value of redeemable noncontrolling interests — — ( 639,000 ) — — ( 639,000 ) ( 260,000 ) ( 899,000 )

Distributions declared ($ 0.02 per share)

— — — ( 3,187,000 ) — ( 3,187,000 ) — ( 3,187,000 )

Net loss — — — ( 19,525,000 ) — ( 19,525,000 ) ( 4,195,000 ) ( 23,720,000 ) (1)

Other comprehensive income — — — — 111,000 111,000 — 111,000

BALANCE — March 31, 2021

BALANCE — June 30, 2021

179,658,367 $ 1,798,000 $ 1,730,002,000 $ ( 886,983,000 ) $ ( 1,897,000 ) $ 842,920,000 $ 163,551,000 $ 1,006,471,000

(1) For the three months ended March 31, 2022 and 2021, amounts exclude $ 187,000 and $( 484,000 ), respectively, of net income (loss) attributable to redeemable noncontrolling interests.

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY — (Continued)

For the Three and Six Months Ended June 30, 2022 and 2021

(1) For the three months ended June 30, 2022 and 2021, amounts exclude $( 218,000 ) and $( 30,000 ), respectively, of net loss attributable to redeemable noncontrolling interests.

For the six months ended June 30, 2022 and 2021, amounts exclude $( 31,000 ) and $( 514,000 ), respectively, of net loss attributable to redeemable noncontrolling interests.

See Note 13, Redeemable Noncontrolling Interests, for a further discussion.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2022 and 2021

Three Months Ended March 31,

For the Six Months Ended June 30, 2022 and 2021

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

$ ( 16,439,000 ) $ ( 24,234,000 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

4 unchanged sentences

Stock based compensation 1,779,000 39,000

Stock based compensation — nonvested restricted common stock 811,000 27,000

(Gain) loss from unconsolidated entities ( 1,386,000 ) 1,771,000

(Income) loss from unconsolidated entities ( 2,024,000 ) 2,672,000

Impairment of real estate investments 17,340,000 3,335,000

(Gain) loss on dispositions of real estate investments ( 683,000 ) 377,000

2 unchanged sentences

Change in fair value of derivative financial instruments ( 500,000 ) ( 3,596,000 )

Other adjustments — 850,000

Changes in operating assets and liabilities:

5 unchanged sentences

Security deposits, prepaid rent and other liabilities ( 9,739,000 ) ( 12,599,000 )

Net cash provided by (used in) operating activities 22,360,000 ( 5,255,000 )

Net cash provided by operating activities 56,138,000 3,579,000

CASH FLOWS FROM INVESTING ACTIVITIES

Developments and capital expenditures ( 20,856,000 ) ( 29,196,000 )

Acquisitions of real estate investments ( 75,125,000 ) ( 78,546,000 )

Developments and capital expenditures ( 35,508,000 ) ( 46,177,000 )

Proceeds from dispositions of real estate investments 14,002,000 1,400,000

20 unchanged sentences

Distributions to redeemable noncontrolling interests ( 1,405,000 ) ( 551,000 )

Security deposits and other ( 208,000 ) ( 30,000 )

Net cash (used in) provided by financing activities ( 1,307,000 ) 89,605,000

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)

For the Three Months Ended March 31, 2022 and 2021

Three Months Ended March 31,

For the Three Months Ended June 30, 2022 and 2021

Six Months Ended June 30,

Security deposits and other $ ( 464,000 ) $ 117,000

Net cash provided by financing activities 19,924,000 86,471,000

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH $ ( 21,302,000 ) $ ( 34,115,000 )

21 unchanged sentences

Distributions declared but not paid — limited partnership units $ 467,000 $ —

Distributions declared but not paid — restricted stock units $ 37,000 $ —

Capital expenditures from financing obligations $ — $ 136,000

The following represents the net (decrease) increase in certain assets and liabilities in connection with our acquisitions and dispositions of real estate investments:

The following represents the net (decrease) increase in certain assets and liabilities in connection with our acquisitions and dispositions of investments:

Accounts and other receivables $ ( 262,000 ) $ 4,000

7 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the Three Months Ended March 31, 2022 and 2021

For the Three and Six Months Ended June 30, 2022 and 2021

The use of the words “we,” “us” or “our” refers to Griffin-American Healthcare REIT III, Inc., or GAHR III, and its subsidiaries, including Griffin-American Healthcare REIT III Holdings, LP, for periods prior to the Merger, as defined below, and American Healthcare REIT, Inc.

29 unchanged sentences

and Jeffrey T.

Hanson, our former Chief Executive Officer and current Executive Chairman of the Board of Directors, Danny Prosky, our former Chief Operating Officer and current Chief Executive Officer and President, and Mathieu B.

Streiff, our former Executive Vice President, General Counsel and current Chief

Hanson, our former Chief Executive Officer and current Chairman of the Board of Directors, Danny Prosky, our former Chief Operating Officer and current Chief Executive Officer and President, and Mathieu B.

Streiff, our former Executive Vice President, General Counsel and Chief Operating Officer and

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Operating Officer, or collectively, the AHI Principals.

current Executive Vice President, or collectively, the AHI Principals.

NewCo owned substantially all of the business and operations of AHI, as well as all of the equity interests in (i) Griffin-American Healthcare REIT IV Advisor, LLC, or GAHR IV Advisor, a subsidiary of AHI that served as the external advisor of GAHR IV, and (ii) Griffin-American Healthcare REIT III Advisor, LLC, or GAHR III Advisor, also referred to as our former advisor, a subsidiary of AHI that served as the external advisor of GAHR III.

4 unchanged sentences

Following the consummation of the Merger and the AHI Acquisition, the Combined Company became self-managed.

As of March 31, 2022 and December 31, 2021, such surviving partnership OP units are owned by AHI Group Holdings, LLC, or AHI Group Holdings, which is owned and controlled by the AHI Principals, Platform Healthcare Investor T-II, LLC, Flaherty Trust and a wholly owned subsidiary of Griffin Capital, or collectively, the NewCo Sellers.

Such surviving partnership OP units are owned by AHI Group Holdings, LLC, or AHI Group Holdings, which is owned and controlled by the AHI Principals, Platform Healthcare Investor T-II, LLC, Flaherty Trust and a wholly owned subsidiary of Griffin Capital, or collectively, the NewCo Sellers.

The AHI Acquisition was treated as a business combination for accounting purposes, with GAHR III as both the legal and accounting acquiror of NewCo.

While GAHR IV was the legal acquiror of GAHR III in the REIT Merger, GAHR III was determined to be the accounting acquiror in the REIT Merger in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations , after considering the relative share ownership and the composition of the governing body of the Combined Company.

While GAHR IV was the legal acquiror of GAHR III in the REIT Merger, GAHR III was determined to be the accounting acquiror in the REIT Merger in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 805, Business Combinations , after considering the relative share ownership and the composition of the governing body of the Combined Company.

Thus, the financial information set forth herein subsequent to the consummation of the Merger and the AHI Acquisition reflects results of the Combined Company, and the financial information set forth herein prior to the Merger and the AHI Acquisition reflects GAHR III’s results.

6 unchanged sentences

As a result, any fees that would have otherwise been payable to our former advisor are no longer being paid.

Also, on October 1, 2021 and in connection with the AHI Acquisition, our operating partnership redeemed all 22,222 shares of our common stock owned by our former advisor and the 20,833 shares of our Class T common stock owned by GAHR IV Advisor in GAHR IV.

Also, on October 1, 2021 and in connection with the AHI Acquisition, we redeemed all 22,222 shares of our common stock owned by our former advisor and the 20,833 shares of our Class T common stock owned by GAHR IV Advisor in GAHR IV.

Prior to the Merger and the AHI Acquisition, our former advisor was 75.0 % owned and managed by wholly owned subsidiaries of AHI, and 25.0 % owned by a wholly owned subsidiary of Griffin Capital, or collectively, our former co-sponsors.

16 unchanged sentences

We currently operate through six reportable business segments:

medical office buildings, integrated senior health campuses, skilled nursing facilities, SHOP, senior housing and hospitals.

As of March 31, 2022, we owned and/or operated 182 properties, comprising 191 buildings, and 122 integrated senior health campuses including completed development projects, or approximately 19,461,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $ 4,299,872,000 , including the fair value of the properties acquired in the Merger.

In addition, as of March 31, 2022, we also owned a real estate-related debt investment purchased for $ 60,429,000 .

integrated senior health campuses, medical office buildings, skilled nursing facilities, SHOP, senior housing — leased and hospitals.

As of June 30, 2022, we owned and/or operated 313 buildings and integrated senior health campuses, or approximately 19,461,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $ 4,370,459,000 , including the fair value of the properties acquired in the Merger.

In addition, as of June 30, 2022, we also owned a real estate-related debt investment purchased for $ 60,429,000 .

Our residents, tenants, operating partners and managers, our industry and the U.S.

economy continue to be disrupted by the COVID-19 pandemic and related supply chain disruptions and labor shortages.

The timing and extent of the economic recovery from the COVID-19 pandemic is dependent upon many factors, including the rate of vaccination, the emergence and severity of COVID-19 variants, the continued effectiveness of the vaccines against those variants, the frequency of booster vaccinations and the duration and implications of continued restrictions and safety measures.

economy continue to be adversely affected by the COVID-19 pandemic and related supply chain disruptions and labor shortages.

The timing and extent of the economic recovery from the COVID-19 pandemic is dependent upon many factors, including the emergence and severity of COVID-19 variants, the continued effectiveness and frequency of booster vaccinations and the duration and implications of continued restrictions and safety measures.

As the COVID-19 pandemic is still impacting the healthcare system to a certain extent, it continues to present challenges for us as an owner and operator of healthcare facilities, making it difficult to ascertain the long-term impact the COVID-19 pandemic will have on real estate markets in which we own and/or operate properties and our portfolio of investments.

We have evaluated the impacts of the COVID-19 pandemic on our business thus far and incorporated information concerning such impacts into our assessments of liquidity, impairment and collectability from tenants and residents as of March 31, 2022.

We will continue to monitor such impacts and will adjust our estimates and assumptions based on the best available information.

8 unchanged sentences

We operate and intend to continue to operate in an umbrella partnership REIT structure in which our operating partnership, or wholly owned subsidiaries of our operating partnership and all non-wholly owned subsidiaries of which we have control, will own substantially all of the interests in properties acquired on our behalf.

We are the sole general partner of our operating partnership and as of March 31, 2022 and December 31, 2021, we owned an approximately 95.0 % and 94.9 % general partnership interest therein, respectively, and the remaining 5.0 % and 5.1 %, respectively, was owned by the NewCo Sellers.

We are the sole general partner of our operating partnership and as of June 30, 2022 and December 31, 2021, we owned an approximately 95.0 % and 94.9 % general partnership interest therein, respectively, and the remaining 5.0 % and 5.1 %, respectively, was owned by the NewCo Sellers.

Prior to the Merger on October 1, 2021, we owned greater than a 99.99 % general partnership interest in our operating partnership and our former advisor was a limited partner that owned less than a 0.01 % noncontrolling limited partnership interest in our operating partnership.

On October 1, 2021, in connection with the AHI Acquisition, we repurchased our former advisor’s 222 limited partnership units in our operating partnership.

On October 1, 2021, in connection with the AHI Acquisition, our operating partnership redeemed our former advisor’s 222 limited partnership units in our operating partnership and the 208 limited partnership units owned by GAHR IV Advisor in GAHR IV Operating Partnership.

AMERICAN HEALTHCARE REIT, INC.

19 unchanged sentences

The following tables disaggregate our resident fees and services revenue by line of business, according to whether such revenue is recognized at a point in time or over time:

Three Months Ended March 31,

Three Months Ended June 30,

Senior Health

8 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Six Months Ended June 30,

Senior Health

Campuses SHOP(1) Total Integrated

Senior Health

Campuses SHOP(1) Total

Over time $ 463,373,000 $ 75,107,000 $ 538,480,000 $ 392,987,000 $ 39,498,000 $ 432,485,000

Point in time 105,221,000 1,498,000 106,719,000 96,054,000 839,000 96,893,000

Total resident fees and services

$ 568,594,000 $ 76,605,000 $ 645,199,000 $ 489,041,000 $ 40,337,000 $ 529,378,000

The following tables disaggregate our resident fees and services revenue by payor class:

Three Months Ended March 31,

Three Months Ended June 30,

Senior Health

8 unchanged sentences

$ 287,582,000 $ 38,643,000 $ 326,225,000 $ 255,815,000 $ 20,537,000 $ 276,352,000

Six Months Ended June 30,

Senior Health

Campuses SHOP(1) Total Integrated

Senior Health

Campuses SHOP(1) Total

Private and other payors

$ 269,222,000 $ 70,669,000 $ 339,891,000 $ 218,857,000 $ 39,676,000 $ 258,533,000

188,197,000 — 188,197,000 172,168,000 — 172,168,000

111,175,000 5,936,000 117,111,000 98,016,000 661,000 98,677,000

Total resident fees and services

$ 568,594,000 $ 76,605,000 $ 645,199,000 $ 489,041,000 $ 40,337,000 $ 529,378,000

(1) Includes fees for basic housing and assisted living care.

7 unchanged sentences

$ 42,056,000 $ 35,953,000 $ 16,922,000 $ 94,931,000

Ending balance — March 31, 2022

Ending balance — June 30, 2022

45,514,000 35,844,000 19,678,000 101,036,000

Increase $ 1,976,000 $ 3,516,000 $ 1,526,000 $ 7,018,000

Increase/(decrease) $ 3,458,000 $ ( 109,000 ) $ 2,756,000 $ 6,105,000

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Deferred Revenue — Resident Fees and Services Revenue

1 unchanged sentence

Beginning balance — January 1, 2022

Ending balance — March 31, 2022

Ending balance — June 30, 2022

Increase $ 1,732,000

In addition to the deferred revenue above, as of March 31, 2022, we had approximately $ 2,069,000 remaining in Medicare advance payments that were received during 2020 through an expanded program of the Centers for Medicare & Medicaid Services.

Such amounts were deferred and included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheets, and are applied to future Medicare claims.

Our recoupment period commenced in the second quarter of 2021, and for the three months ended March 31, 2022, we recognized $ 10,899,000 of resident fees and services revenue pertaining to such Medicare advance payments.

In addition to the deferred revenue above, as of December 31, 2021, we had approximately $ 12,969,000 remaining in Medicare advance payments that were received during 2020 through an expanded program of the Centers for Medicare & Medicaid Services.

Such amounts were included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheet as of December 31, 2021, and were fully applied to Medicare claims and recognized as resident fees and services revenue for the six months ended June 30, 2022.

Tenant and Resident Receivables and Allowances

Resident receivables, which are related to resident fees and services, are carried net of an allowance for credit losses.

Resident receivables, which are related to resident fees and services revenue, are carried net of an allowance for credit losses.

An allowance is maintained for estimated losses resulting from the inability of residents and payors to meet the contractual obligations under their lease or service agreements.

2 unchanged sentences

Tenant receivables, which are related to real estate revenue, and unbilled deferred rent receivables are reduced for uncollectible amounts, which are recognized as direct reductions of real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

As of March 31, 2022 and December 31, 2021, we had $ 13,872,000 and $ 12,378,000 , respectively, in allowances, which were determined necessary to reduce receivables by our expected future credit losses.

For the three months ended March 31, 2022 and 2021, we increased allowances by $ 5,223,000 and $ 2,478,000 , respectively, and reduced allowances for collections or adjustments by $ 2,099,000 and $ 1,505,000 , respectively.

For the three months ended March 31, 2022 and 2021, $ 1,630,000 and $ 1,606,000 , respectively, of our receivables were written off against the related allowances.

As of June 30, 2022 and December 31, 2021, we had $ 14,798,000 and $ 12,378,000 , respectively, in allowances, which were determined necessary to reduce receivables by our expected future credit losses.

For the six months ended June 30, 2022 and 2021, we increased allowances by $ 9,581,000 and $ 5,121,000 , respectively, and reduced allowances for collections or adjustments by $ 3,643,000 and $ 2,960,000 , respectively.

For the six months ended June 30, 2022 and 2021, $ 3,518,000 and $ 3,740,000 , respectively, of our receivables were written off against the related allowances.

Accounts Payable and Accrued Liabilities

As of March 31, 2022 and December 31, 2021, accounts payable and accrued liabilities primarily include reimbursement of payroll-related costs to the managers of our SHOP and integrated senior health campuses of $ 28,456,000 and $ 31,101,000 , respectively, insurance reserves of $ 35,294,000 and $ 36,440,000 , respectively, accrued property taxes of $ 21,654,000 and $ 22,102,000 , respectively, accrued developments and capital expenditures to unaffiliated third parties of $ 14,750,000 and $ 22,852,000 , respectively, and accrued distributions to common stockholders of $ 8,794,000 and $ 8,768,000 , respectively.

As of June 30, 2022 and December 31, 2021, accounts payable and accrued liabilities primarily include insurance reserves of $ 35,606,000 and $ 36,440,000 , respectively, reimbursement of payroll-related costs to the managers of our SHOP and integrated senior health campuses of $ 30,622,000 and $ 31,101,000 , respectively, accrued property taxes of $ 21,979,000 and $ 22,102,000 , respectively, accrued developments and capital expenditures to unaffiliated third parties of $ 14,055,000 and $ 22,852,000 , respectively, and accrued distributions to common stockholders of $ 8,812,000 and $ 8,768,000 , respectively.

Statement of Cash Flows

For the three months ended March 31, 2021, amounts totaling $ 101,734,000 have been removed from borrowings under mortgage loans payable and early payoff of mortgage loans payable to properly reflect only actual cash flows resulting from borrowings and payments of mortgage loans compared to amounts previously presented.

For the six months ended June 30, 2021, amounts totaling $ 101,734,000 have been removed from borrowings under mortgage loans payable and early payoff of mortgage loans payable to properly reflect only actual cash flows resulting from borrowings and payments of mortgage loans compared to amounts previously presented.

There was no net change in previously disclosed net cash provided by financing activities.

Recently Issued Accounting Pronouncements

In July 2021, the FASB issued Accounting Standard Update, or ASU, 2021-05, Leases (Topic 842):

Lessors — Certain Leases with Variable Lease Payments , or ASU 2021-05, which amends the lease classification requirements for lessors to align them with practice under the previous lease accounting standard, ASC Topic 840, Leases .

Lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if both of the following criteria are met:

(1) the lease would have been classified as a sales-type lease or a direct financing lease;

and (2) the lessor would have otherwise recognized a day-one loss.

ASU 2021-05 was effective for fiscal years beginning after December 15, 2021.

Early adoption was permitted.

We adopted such accounting pronouncement on January 1, 2022, which did not have a

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

material impact to our consolidated financial statements and disclosures as we have no material sales-type or direct financing leases .

Real Estate Investments, Net

Our real estate investments, net consisted of the following as of March 31, 2022 and December 31, 2021:

Our real estate investments, net consisted of the following as of June 30, 2022 and December 31, 2021:

Building, improvements and construction in process $ 3,536,965,000 $ 3,505,786,000

4 unchanged sentences

$ 3,491,845,000 $ 3,514,686,000

Depreciation expense for the three months ended March 31, 2022 and 2021 was $ 34,422,000 and $ 24,190,000 , respectively.

For the three months ended March 31, 2022, we incurred capital expenditures of $ 8,248,000 for our integrated senior health campuses, $ 2,434,000 for our medical office buildings and $ 1,454,000 for our SHOP.

We did no t incur any capital expenditures for our skilled nursing facilities, senior housing facilities or hospitals for the three months ended March 31, 2022.

Acquisition of Real Estate Investment

For the three months ended March 31, 2022, we, through a majority-owned subsidiary of Trilogy Investors, LLC, or Trilogy, of which we owned 72.9 % at the time of acquisition, acquired an integrated senior health campus located in Kentucky.

See Note 4, Business Combination, for a further discussion.

The following is a summary of such property acquisition for the three months ended March 31, 2022:

Location Date

Acquired Contract

Purchase Price Mortgage

Loan Payable(1)

Louisville, KY 01/03/22 $ 27,790,000 $ 20,800,000

(1) Represents the principal balance of the mortgage loan payable placed on the campus at the time of acquisition.

Depreciation expense for the three months ended June 30, 2022 and 2021 was $ 34,328,000 and $ 24,663,000 , respectively, and for the six months ended June 30, 2022 and 2021 was $ 68,750,000 and $ 48,853,000 , respectively.

For the three months ended June 30, 2022, we incurred capital expenditures of $ 8,530,000 for our integrated senior health campuses, $ 4,144,000 for our medical office buildings and $ 1,597,000 for our SHOP.

We did no t incur any capital expenditures for our properties within our skilled nursing facilities, senior housing — leased or hospitals segments for the three months ended June 30, 2022.

For the six months ended June 30, 2022, we incurred capital expenditures of $ 16,778,000 for our integrated senior health campuses, $ 6,578,000 for our medical office buildings and $ 3,051,000 for our SHOP.

We did no t incur any capital expenditures for our properties within our skilled nursing facilities, senior housing — leased or hospitals segments for the six months ended June 30, 2022.

During both the three and six months ended June 30, 2022, we determined that four of our SHOP were impaired and recognized an aggregate impairment charge of $ 17,340,000 , which reduced the total carrying value of such assets to $ 19,325,000 .

The fair value of one SHOP was determined by the sales price from an executed purchase and sale agreement with a third-party buyer, which was considered a Level 2 measurement within the fair value hierarchy.

The fair value of the remaining three SHOP were based on their projected sales prices, which were considered Level 2 measurements within the fair value hierarchy.

During both the three and six months ended June 30, 2021, we determined that one medical office building was impaired and recognized an impairment charge of $ 3,335,000 , which reduced the carrying value of such asset to $ 2,880,000 .

The fair value of such property was determined by the sales price from an executed purchase and sale agreement with a third-party buyer, and adjusted for anticipated selling costs, which was considered a Level 2 measurement within the fair value hierarchy.

We disposed of such impaired medical office building in July 2021 for a contract sales price of $ 3,000,000 and recognized a net gain on sale of $ 346,000 .

Included in the capital expenditure amounts above are costs for the development and expansion of our integrated senior health campuses.

For the six months ended June 30, 2022, we exercised our right to purchase a leased property that cost $ 15,462,000 to develop.

During the six months ended June 30, 2022, we, through a majority-owned subsidiary of Trilogy Investors, LLC, or Trilogy, acquired a land parcel in Indiana for a contract purchase price of $ 320,000 , plus closing costs.

In April and May 2022, we, through a majority-owned subsidiary of Trilogy, of which we owned 72.9 % at the time of acquisition, exercised the purchase options to acquire four previously leased real estate investments located in Indiana and Kentucky for an aggregate contract purchase price of $ 54,805,000 , which investments are included in our integrated senior health campuses segment.

We financed such acquisitions with cash on hand and a mortgage loan payable with a principal balance of $ 52,725,000 .

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

We accounted for our acquisitions of land and previously leased real estate investments completed during the six months ended June 30, 2022 as asset acquisitions.

We incurred and capitalized direct acquisition related expenses of $ 292,000 .

The following table summarizes the purchase price of such assets acquired, adjusted for $ 37,464,000 operating lease right-of-use assets and $ 36,326,000 operating lease liabilities, and based on their relative fair values:

Building and improvements $ 49,645,000

Land and improvements 8,173,000

Total assets acquired $ 57,818,000

Sale of Controlling Interests in Real Estate Investments

On February 8, 2022, we sold approximately 77.0 % ownership interests in several real estate assets for development within our integrated senior health campuses segment for an aggregate sales price of $ 19,622,000 and a gain on sale of $ 756,000 .

We retained approximately 23.0 % ownership interests in such real estate development assets, which interests are

We retained approximately 23.0 % ownership interests in such real estate development assets, which interests are accounted for as investments in unconsolidated entities within other assets, net in our accompanying condensed consolidated balance sheet as of June 30, 2022.

From February 8, 2022 through June 30, 2022, approximately 23.0 % interest in the net earnings or losses of such unconsolidated entities were included in income (loss) from unconsolidated entities in our accompanying condensed consolidated statements of operations and comprehensive loss.

Business Combinations

On January 3, 2022, we, through a majority-owned subsidiary of Trilogy, acquired an integrated senior health campus in Kentucky from an unaffiliated third party.

The contract purchase price for such property acquisition was $ 27,790,000 plus immaterial closing costs.

We acquired such property using cash on hand and placed a mortgage loan payable of $ 20,800,000 on the property at the time of acquisition.

Further, on April 1, 2022, we, through a majority-owned subsidiary of Trilogy, acquired a 50.0 % interest in a pharmaceutical business in Florida from an unaffiliated third party and incurred transaction costs of $ 938,000 .

Prior to such pharmaceutical business acquisition, we, through a majority-owned subsidiary of Trilogy, owned the other 50.0 % interest in such business, which investment was included in investments in unconsolidated entities within other assets, net in our accompanying condensed consolidated balance sheet as of December 31, 2021.

Therefore, through March 31, 2022, our 50.0 % interest in the net earnings or losses of such unconsolidated entity was included in income (loss) from unconsolidated entities in our accompanying condensed consolidated statements of operations and comprehensive loss.

We accounted for the two acquisitions for the six months ended June 30, 2022 above as business combinations, which are included within our integrated senior health campuses segment.

Based on quantitative and qualitative considerations, such business combinations were not material to us individually or in the aggregate and, therefore, pro forma financial information is not provided.

We did not complete any acquisitions accounted for as business combinations for the six months ended June 30, 2021.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

accounted for as investments in unconsolidated entities within other assets, net in our accompanying condensed consolidated balance sheet as of March 31, 2022.

From February 8, 2022 through March 31, 2022, 23.0 % interest in the net earnings or losses of such unconsolidated entities were included in net loss from unconsolidated entities in our accompanying condensed consolidated statements of operations and comprehensive loss.

Business Combination

For the three months ended March 31, 2022, using cash on hand and debt financing, we completed the acquisition of an integrated senior healthcare campus, which was accounted for as a business combination.

The contract purchase price for such property acquisition was $ 27,790,000 plus immaterial transaction costs.

See Note 3, Real Estate Investments, Net, for a further discussion.

Based on quantitative and qualitative considerations, such business combination was not material to us and, therefore, pro forma financial information is not provided.

We did not complete any property acquisitions accounted for as business combinations for the three months ended March 31, 2021.

The table below summarizes the acquisition date fair values of the assets acquired and liabilities assumed of our 2022 property acquisitions accounted for as business combinations.

The fair values of the assets acquired and liabilities assumed during 2022 were preliminary estimates.

Any necessary adjustments will be finalized within one year from the date of acquisition.

The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed of our 2022 property acquisition.

Building and improvements $ 17,273,000

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Certificates of need 690,000

Operating lease right-of-use assets 646,000

Other assets 457,000

Accounts receivable 427,000

Total assets acquired 31,696,000

1 unchanged sentence

Accounts payable and accrued liabilities ( 1,802,000 )

Operating lease liabilities ( 646,000 )

Financing obligations ( 56,000 )

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The debt security is subordinate to all other interests in the mortgage trust and is not guaranteed by a government-sponsored entity.

As of March 31, 2022 and December 31, 2021, the carrying amount of the debt security investment was $ 80,239,000 and $ 79,315,000 , respectively, net of unamortized closing costs of $ 948,000 and $ 1,004,000 , respectively.

Accretion on the debt security for the three months ended March 31, 2022 and 2021 was $ 980,000 and $ 881,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

Amortization expense of closing costs for the three months ended March 31, 2022 and 2021 was $ 56,000 and $ 47,000 , respectively, which is recorded as a decrease to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2022 and December 31, 2021, the carrying amount of the debt security investment was $ 81,167,000 and $ 79,315,000 , respectively, net of unamortized closing costs of $ 890,000 and $ 1,004,000 , respectively.

Accretion on the debt security for the three months ended June 30, 2022 and 2021 was $ 986,000 and $ 907,000 , respectively, and for the six months ended June 30, 2022 and 2021 was $ 1,966,000 and $ 1,788,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

Amortization expense of closing costs for the three months ended June 30, 2022 and 2021 was $ 58,000 and $ 49,000 , respectively, and for the six months ended June 30, 2022 and 2021 was $ 114,000 and $ 96,000 , respectively, which is recorded as a decrease to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

We evaluated credit quality indicators such as the agency ratings and the underlying collateral of such investment in order to determine expected future credit loss.

No credit loss was recorded for the three months ended March 31, 2022 and 2021.

No credit loss was recorded for the three and six months ended June 30, 2022 and 2021.

AMERICAN HEALTHCARE REIT, INC.

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Identified Intangible Assets, Net

Identified intangible assets, net consisted of the following as of March 31, 2022 and December 31, 2021:

Identified intangible assets, net consisted of the following as of June 30, 2022 and December 31, 2021:

Intangible assets subject to amortization:

In-place leases, net of accumulated amortization of $ 28,703,000 and $ 28,120,000 as of March 31, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 8.1 years and 8.2 years as of March 31, 2022 and December 31, 2021, respectively)

In-place leases, net of accumulated amortization of $ 31,132,000 and $ 28,120,000 as of June 30, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 8.1 years and 8.2 years as of June 30, 2022 and December 31, 2021, respectively)

$ 72,431,000 $ 81,538,000

Above-market leases, net of accumulated amortization of $ 3,193,000 and $ 2,082,000 as of March 31, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 9.6 years and 9.7 years as of March 31, 2022 and December 31, 2021, respectively)

Above-market leases, net of accumulated amortization of $ 4,306,000 and $ 2,082,000 as of June 30, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 9.4 years and 9.7 years as of June 30, 2022 and December 31, 2021, respectively)

32,849,000 35,106,000

Customer relationships, net of accumulated amortization of $ 673,000 and $ 635,000 as of March 31, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 14.4 years and 14.7 years as of March 31, 2022 and December 31, 2021, respectively)

Customer relationships, net of accumulated amortization of $ 710,000 and $ 635,000 as of June 30, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 14.2 years and 14.7 years as of June 30, 2022 and December 31, 2021, respectively)

2,130,000 2,205,000

Internally developed technology and software, net of accumulated amortization of $ 423,000 and $ 399,000 as of March 31, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 0.4 years and 0.7 years as of March 31, 2022 and December 31, 2021, respectively)

Internally developed technology and software, net of accumulated amortization of $ 446,000 and $ 399,000 as of June 30, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 0.2 years and 0.7 years as of June 30, 2022 and December 31, 2021, respectively)

24,000 70,000

3 unchanged sentences

$ 234,914,000 $ 248,871,000

Amortization expense on identified intangible assets for the three months ended March 31, 2022 and 2021 was $ 8,239,000 and $ 1,196,000 , respectively, which included $ 1,114,000 and $ 83,000 , respectively, of amortization recorded as a decrease to real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations and comprehensive loss.

The aggregate weighted average remaining life of the identified intangible assets was 8.7 years and 8.8 years as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022, estimated amortization expense on the identified intangible assets for the nine months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter was as follows:

Amortization expense on identified intangible assets for the three months ended June 30, 2022 and 2021 was $ 6,121,000 and $ 1,501,000 , respectively, which included $ 1,113,000 and $ 257,000 , respectively, of amortization recorded as a decrease to real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations and comprehensive loss.

Amortization expense on identified intangible assets for the six months ended June 30, 2022 and 2021 was $ 14,360,000 and $ 2,697,000 , respectively, which included $ 2,227,000 and $ 340,000 , respectively, of amortization recorded as a decrease to real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations and comprehensive loss.

The aggregate weighted average remaining life of the identified intangible assets was 8.6 years and 8.8 years as of June 30, 2022 and December 31, 2021, respectively.

As of June 30, 2022, estimated amortization expense on the identified intangible assets for the six months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter was as follows:

2022 $ 10,892,000

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Other Assets, Net

Other assets, net consisted of the following as of March 31, 2022 and December 31, 2021:

Other assets, net consisted of the following as of June 30, 2022 and December 31, 2021:

Deferred rent receivables $ 44,290,000 $ 41,061,000

2 unchanged sentences

Inventory 18,649,000 18,929,000

Lease commissions, net of accumulated amortization of $ 5,100,000 and $ 4,911,000 as of March 31, 2022 and December 31, 2021, respectively

Lease commissions, net of accumulated amortization of $ 5,460,000 and $ 4,911,000 as of June 30, 2022 and December 31, 2021, respectively

16,758,000 16,120,000

Deferred financing costs, net of accumulated amortization of $ 3,668,000 and $ 8,469,000 as of March 31, 2022 and December 31, 2021, respectively

Deferred financing costs, net of accumulated amortization of $ 4,340,000 and $ 8,469,000 as of June 30, 2022 and December 31, 2021, respectively

5,466,000 3,781,000

Lease inducement, net of accumulated amortization of $ 1,930,000 and $ 1,842,000 as of March 31, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 8.7 years and 8.9 years as of March 31, 2022 and December 31, 2021, respectively)

Lease inducement, net of accumulated amortization of $ 2,018,000 and $ 1,842,000 as of June 30, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 8.4 years and 8.9 years as of June 30, 2022 and December 31, 2021, respectively)

2,982,000 3,158,000

$ 147,752,000 $ 121,148,000

Deferred financing costs included in other assets were related to the 2019 Trilogy Credit Facility and the senior unsecured revolving credit facility portion of the 2022 Credit Facility, each as defined at Note 9, Lines of Credit and Term Loans.

Amortization expense on lease inducement for both the three months ended March 31, 2022 and 2021 was $ 88,000 , and is recorded as a decrease to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

Deferred financing costs included in other assets were related to the 2018 Credit Facility, 2019 Credit Facility, 2019 Trilogy Credit Facility and the senior unsecured revolving credit facility portion of the 2022 Credit Facility.

See Note 9, Lines of Credit and Term Loans, for a further discussion.

Amortization expense on lease inducement for both the three and six months ended June 30, 2022 and 2021 was $ 88,000 and $ 176,000 , respectively, and is recorded as a decrease to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

Mortgage Loans Payable, Net

As of March 31, 2022 and December 31, 2021, mortgage loans payable were $ 1,121,901,000 ($ 1,103,006,000 , net of discount/premium and deferred financing costs) and $ 1,116,216,000 ($ 1,095,594,000 , net of discount/premium and deferred financing costs), respectively.

As of March 31, 2022, we had 67 fixed-rate mortgage loans payable and 11 variable-rate mortgage loans payable with effective interest rates ranging from 2.21 % to 5.25 % per annum based on interest rates in effect as of March 31, 2022 and a weighted average effective interest rate of 3.16 %.

As of June 30, 2022 and December 31, 2021, mortgage loans payable were $ 1,152,998,000 ($ 1,134,059,000 , net of discount/premium and deferred financing costs) and $ 1,116,216,000 ($ 1,095,594,000 , net of discount/premium and deferred financing costs), respectively.

As of June 30, 2022, we had 66 fixed-rate mortgage loans payable and 12 variable-rate mortgage loans payable with effective interest rates ranging from 2.21 % to 5.25 % per annum based on interest rates in effect as of June 30, 2022 and a weighted average effective interest rate of 3.35 %.

As of December 31, 2021, we had 66 fixed-rate mortgage loans payable and 12 variable-rate mortgage loans payable with effective interest rates ranging from 2.21 % to 5.25 % per annum based on interest rates in effect as of December 31, 2021 and a weighted average effective interest rate of 3.21 %.

We are required by the terms of certain loan documents to meet certain reporting requirements and covenants, such as net worth ratios, fixed charge coverage ratios and leverage ratios.

Mortgage loans payable, net consisted of the following as of March 31, 2022 and December 31, 2021:

Mortgage loans payable, net consisted of the following as of June 30, 2022 and December 31, 2021:

Total fixed-rate debt $ 826,465,000 $ 845,504,000

7 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

The following table reflects the changes in the carrying amount of mortgage loans payable, net for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

The following table reflects the changes in the carrying amount of mortgage loans payable, net for the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

Beginning balance $ 1,095,594,000 $ 810,478,000

2 unchanged sentences

1,191,000 3,012,000

Amortization of discount/premium on mortgage loans payable, net 1,528,000 405,000

Scheduled principal payments on mortgage loans payable

3 unchanged sentences

( 1,037,000 ) ( 1,001,000 )

Amortization of discount/premium on mortgage loans payable, net ( 17,000 ) 203,000

Ending balance $ 1,134,059,000 $ 917,121,000

For the three months ended March 31, 2022, we incurred an aggregate loss on the extinguishment of mortgage loans payable of $ 1,430,000 , which is recorded as an increase to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss.

Such loss was primarily related to the write-off of unamortized loan discount related to eight mortgage loans payable that we refinanced on January 1, 2022 that were due to mature in 2044 through 2052.

For the three months ended March 31, 2021, we incurred an aggregate loss on the extinguishment of mortgage loans payable of $ 2,288,000 , which is recorded as an increase to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss.

For the three and six months ended June 30, 2022, we incurred an aggregate gain (loss) on the extinguishment of mortgage loans payable of $ 181,000 and $( 1,249,000 ), respectively, which is recorded as a decrease (increase), respectively, to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss.

Such aggregate net loss on debt extinguishment was primarily related to the write-off of unamortized loan discount related to eight mortgage loans payable that we refinanced on January 1, 2022 that were due to mature in 2044 through 2052.

For the three and six months ended June 30, 2021, we incurred an aggregate loss on the extinguishment of mortgage loans payable of $ 5,000 and $ 2,293,000 , respectively, which is recorded as an increase to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss.

Such loss was primarily related to the write-off of unamortized deferred financing costs of 10 mortgage loans payable that we refinanced on January 29, 2021 that were due to mature in 2053.

As of March 31, 2022, the principal payments due on our mortgage loans payable for the nine months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter were as follows:

As of June 30, 2022, the principal payments due on our mortgage loans payable for the six months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter were as follows:

2022 $ 25,728,000

5 unchanged sentences

$ 1,152,998,000

Some of our mortgage loan agreements include a standard loan term requiring lender approval for a change of control event, which was triggered upon the closing of the Merger.

All of our mortgage lenders and loan servicers approved such event as of March 31, 2022, except for the servicers of two of our mortgage loans with an aggregate principal balance of $ 14,137,000 , for which approvals were received in April 2022.

Lines of Credit and Term Loans

7 unchanged sentences

The 2018 Credit Facility, which was further amended on October 1, 2021 to provide for updates regarding the Combined Company subsequent to the Merger, consisted of a senior unsecured revolving credit facility in the amount of $ 235,000,000 and senior unsecured term loan facilities in the aggregate amount of $ 295,000,000 .

At our option, the 2018 Credit Facility bore interest at per annum rates equal to (a)(i) the

At our option, the 2018 Credit Facility bore interest at per annum rates equal to (a)(i) the Eurodollar Rate, as defined in the 2018 Credit Agreement, plus (ii) a margin ranging from 1.70 % to 2.20 % based on our Consolidated Leverage Ratio, as defined in the 2018 Credit Agreement, or (b)(i) the greater of:

(1) the prime rate publicly

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Eurodollar Rate, as defined in the 2018 Credit Agreement, plus (ii) a margin ranging from 1.70 % to 2.20 % based on our Consolidated Leverage Ratio, as defined in the 2018 Credit Agreement, or (b)(i) the greater of:

(1) the prime rate publicly announced by Bank of America, (2) the Federal Funds Rate, as defined in the 2018 Credit Agreement, plus 0.50 %, (3) the one-month Eurodollar Rate plus 1.00 %, and (4) 0.00 %, plus (ii) a margin ranging from 0.70 % to 1.20 % based on our Consolidated Leverage Ratio.

announced by Bank of America, (2) the Federal Funds Rate, as defined in the 2018 Credit Agreement, plus 0.50 %, (3) the one-month Eurodollar Rate plus 1.00 %, and (4) 0.00 %, plus (ii) a margin ranging from 0.70 % to 1.20 % based on our Consolidated Leverage Ratio.

The 2018 Credit Facility was due to mature on November 19, 2021;

1 unchanged sentence

As of December 31, 2021, borrowings outstanding totaled $ 441,900,000 and the weighted average interest rate on such borrowings outstanding was 2.27 % per annum.

On January 19, 2022, we terminated the 2018 Credit Agreement and entered into the 2022 Credit Agreement, as defined and discussed below under “2022 Credit Facility.”

On January 19, 2022, we terminated the 2018 Credit Agreement and entered into the 2022 Credit Agreement, as defined and discussed below.

2019 Credit Facility

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The 2022 Credit Facility bears interest at varying rates based upon, at our option, (i) the Daily Simple Secured Overnight Financing Rate, or Daily SOFR, plus the Applicable Rate for Daily SOFR Rate Loans or (ii) the Term Secured Overnight Financing Rate, or the Term SOFR, plus the Applicable Rate for Term SOFR Rate Loans.

If, under the terms of the 2022 Credit Agreement, there is an inability to determine the Daily SOFR or the Term SOFR then the 2022 Credit Facility will

If, under the terms of the 2022 Credit Agreement, there is an inability to determine the Daily SOFR or the Term SOFR then the 2022 Credit Facility will bear interest at a rate per annum equal to the Base Rate plus the Applicable Rate for Base Rate Loans.

The loans may be repaid in whole or in part without prepayment premium or penalty, subject to certain conditions.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

bear interest at a rate per annum equal to the Base Rate plus the Applicable Rate for Base Rate Loans.

The loans may be repaid in whole or in part without prepayment premium or penalty, subject to certain conditions.

The 2022 Credit Agreement requires us to add additional subsidiaries as guarantors in the event the value of the assets owned by the subsidiary guarantors falls below a certain threshold as set forth in the 2022 Credit Agreement.

In the event of default, Bank of America has the right to terminate the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions under the 2022 Credit Agreement, and to accelerate the payment on any unpaid principal amount of all outstanding loans and interest thereon.

As of March 31, 2022, our aggregate borrowing capacity under the 2022 Credit Facility was $ 1,050,000,000 , excluding the $ 25,000,000 in standby letters of credit described above.

As of March 31, 2022, borrowings outstanding under the 2022 Credit Facility totaled $ 934,400,000 ($ 933,413,000 , net of deferred financing costs related to the senior unsecured term loan facility portion of the 2022 Credit Facility) and the weighted average interest rate on such borrowings outstanding was 2.04 % per annum.

For the three months ended March 31, 2022, in connection with the 2022 Credit Agreement, we incurred an aggregate $ 3,161,000 loss on the extinguishment of a portion of senior unsecured term loans which formed part of the 2018 Credit Facility and the 2019 Credit Facility.

As of June 30, 2022, our aggregate borrowing capacity under the 2022 Credit Facility was $ 1,050,000,000 , excluding the $ 25,000,000 in standby letters of credit described above.

As of June 30, 2022, borrowings outstanding under the 2022 Credit Facility totaled $ 962,900,000 ($ 961,957,000 , net of deferred financing costs related to the senior unsecured term loan facility portion of the 2022 Credit Facility) and the weighted average interest rate on such borrowings outstanding was 3.22 % per annum.

In January 2022, in connection with the 2022 Credit Agreement, we incurred an aggregate $ 3,161,000 loss on the extinguishment of a portion of senior unsecured term loans which formed part of the 2018 Credit Facility and the 2019 Credit Facility.

Such loss on extinguishment of debt is recorded as an increase to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss, and primarily consisted of lender fees we paid to obtain the 2022 Credit Facility.

2019 Trilogy Credit Facility

On October 1, 2021, upon consummation of the Merger, through Trilogy RER, LLC, we are subject to an amended and restated loan agreement, or the 2019 Trilogy Credit Agreement, among certain subsidiaries of Trilogy OpCo, LLC, Trilogy RER, LLC, and Trilogy Pro Services, LLC;

On October 1, 2021, upon consummation of the Merger, through Trilogy RER, LLC, we became subject to an amended and restated loan agreement, or the 2019 Trilogy Credit Agreement, among certain subsidiaries of Trilogy OpCo, LLC, Trilogy RER, LLC, and Trilogy Pro Services, LLC;

CIT Bank, N.A.;

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(i) the fluctuating annual rate of interest announced from time to time by KeyBank as its prime rate, (ii) 0.50 % above the Federal Funds Effective Rate, as defined in the 2019 Trilogy Credit Agreement, and (iii) 1.00 % above the one-month LIBOR.

As of both March 31, 2022 and December 31, 2021, our aggregate borrowing capacity under the 2019 Trilogy Credit Facility was $ 360,000,000 .

As of both March 31, 2022 and December 31, 2021, borrowings outstanding under the 2019 Trilogy Credit Facility totaled $ 304,734,000 , and the weighted average interest rate on such borrowings outstanding was 3.20 % and 2.85 % per annum, respectively.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

As of both June 30, 2022 and December 31, 2021, our aggregate borrowing capacity under the 2019 Trilogy Credit Facility was $ 360,000,000 .

As of both June 30, 2022 and December 31, 2021, borrowings outstanding under the 2019 Trilogy Credit Facility totaled $ 304,734,000 , and the weighted average interest rate on such borrowings outstanding was 4.39 % and 2.85 % per annum, respectively.

Derivative Financial Instruments

1 unchanged sentence

We recorded such derivative financial instruments in our accompanying condensed consolidated balance sheets as either an asset or a liability measured at fair value.

We did no t have any derivative financial instruments as of March 31, 2022.

We did no t have any derivative financial instruments as of June 30, 2022.

The following table lists the derivative financial instruments held by us as of December 31, 2021, which were included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheets:

4 unchanged sentences

Swap $ 100,000,000 one month LIBOR 0.20 % 01/25/22 6,000

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

As of December 31, 2021, no ne of our derivative financial instruments were designated as hedges.

Derivative financial instruments not designated as hedges are not speculative and are used to manage our exposure to interest rate movements, but do not meet the strict hedge accounting requirements.

For the three months ended March 31, 2022 and 2021, we recorded $ 500,000 and $ 1,821,000 , respectively, as a decrease to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss related to the change in the fair value of our derivative financial instruments.

On January 25, 2022, our interest rate swap contracts matured.

For the three months ended June 30, 2022 and 2021, we recorded $ 0 and $ 1,775,000 , respectively, and for the six months ended June 30, 2022 and 2021, we recorded $ 500,000 and $ 3,596,000 , respectively, as a decrease to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss related to the change in the fair value of our derivative financial instruments.

See Note 16, Fair Value Measurements, for a further discussion of the fair value of our derivative financial instruments.

Identified Intangible Liabilities, Net

As of March 31, 2022 and December 31, 2021, identified intangible liabilities, net consisted of below-market leases of $ 12,077,000 and $ 12,715,000 , respectively, net of accumulated amortization of $ 1,335,000 and $ 1,047,000 , respectively.

Amortization expense on below-market leases for the three months ended March 31, 2022 and 2021 was $ 609,000 and $ 47,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

The weighted average remaining life of below-market leases was 9.0 years and 9.1 years as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022, estimated amortization expense on below-market leases for the nine months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter was as follows:

As of June 30, 2022 and December 31, 2021, identified intangible liabilities, net consisted of below-market leases of $ 11,663,000 and $ 12,715,000 , respectively, net of accumulated amortization of $ 1,699,000 and $ 1,047,000 , respectively.

Amortization expense on below-market leases for the three months ended June 30, 2022 and 2021 was $ 414,000 and $ 45,000 , respectively, and for the six months ended June 30, 2022 and 2021 was $ 1,023,000 and $ 92,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

The weighted average remaining life of below-market leases was 8.8 years and 9.1 years as of June 30, 2022 and December 31, 2021, respectively.

As of June 30, 2022, estimated amortization expense on below-market leases for the six months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter was as follows:

2022 $ 825,000

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While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material effect on our consolidated financial position, results of operations or cash flows.

Further, we are not aware of any material environmental liability or any unasserted claim or

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

assessment with respect to an environmental liability that we believe would require additional disclosure or the recording of a loss contingency.

Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability that we believe would require additional disclosure or the recording of a loss contingency.

Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business, which include calls/puts to sell/acquire properties.

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Redeemable Noncontrolling Interests

As a result of the Merger and the AHI Acquisition, as of March 31, 2022 and December 31, 2021, we, through our direct and indirect subsidiaries, own an approximately 95.0 % and 94.9 % general partnership interest, respectively, in our operating partnership and the remaining approximate 5.0 % and 5.1 % limited partnership interest, respectively, in our operating partnership is owned by the NewCo Sellers.

As a result of the Merger and the AHI Acquisition, as of June 30, 2022 and December 31, 2021, we, through our direct and indirect subsidiaries, own an approximately 95.0 % and 94.9 % general partnership interest, respectively, in our operating

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

partnership and the remaining approximate 5.0 % and 5.1 % limited partnership interest, respectively, in our operating partnership is owned by the NewCo Sellers.

Some of the limited partnership units outstanding, which account for approximately 1.0 % of our total operating partnership units outstanding, have redemption features outside of our control and are accounted for as redeemable noncontrolling interests presented outside of permanent equity in our accompanying condensed consolidated balance sheets.

As of both March 31, 2022 and December 31, 2021, we, through Trilogy REIT Holdings LLC, or Trilogy REIT Holdings, in which we indirectly hold a 76.0 % ownership interest, owned 95.9 % of the outstanding equity interests of Trilogy.

As of both March 31, 2022 and December 31, 2021, certain members of Trilogy’s management and certain members of an advisory committee to Trilogy’s board of directors owned approximately 4.1 % of the outstanding equity interests of Trilogy.

As of both June 30, 2022 and December 31, 2021, we, through Trilogy REIT Holdings LLC, or Trilogy REIT Holdings, in which we indirectly hold a 76.0 % ownership interest, owned 95.9 % of the outstanding equity interests of Trilogy.

As of both June 30, 2022 and December 31, 2021, certain members of Trilogy’s management and certain members of an advisory committee to Trilogy’s board of directors owned approximately 4.1 % of the outstanding equity interests of Trilogy.

The noncontrolling interests held by such members have redemption features outside of our control and are accounted for as redeemable noncontrolling interests in our accompanying condensed consolidated balance sheets.

As a result of the Merger and through our operating partnership, as of March 31, 2022 and December 31, 2021, we own approximately 98.0 % of the joint ventures with an affiliate of Meridian Senior Living, LLC, or Meridian, that own Central Florida Senior Housing Portfolio, Pinnacle Beaumont ALF and Pinnacle Warrenton ALF.

Also as a result of the Merger, as of March 31, 2022 and December 31, 2021, we also own approximately 90.0 % of the joint venture with Avalon Health Care, Inc., or Avalon, that owns Catalina West Haven ALF and Catalina Madera ALF.

As a result of the Merger and through our operating partnership, as of June 30, 2022 and December 31, 2021, we own approximately 98.0 % of the joint ventures with an affiliate of Meridian Senior Living, LLC, or Meridian, that own Central Florida Senior Housing Portfolio, Pinnacle Beaumont ALF and Pinnacle Warrenton ALF.

Also as a result of the Merger, as of June 30, 2022 and December 31, 2021, we also own approximately 90.0 % of the joint venture with Avalon Health Care, Inc., or Avalon, that owns Catalina West Haven ALF and Catalina Madera ALF.

The noncontrolling interests held by Meridian and Avalon have redemption features outside of our control and are accounted for as redeemable noncontrolling interests in our accompanying condensed consolidated balance sheets.

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(i) the initial carrying amount, increased or decreased for the noncontrolling interests’ share of net income or loss and distributions or (ii) the redemption value.

The changes in the carrying amount of redeemable noncontrolling interests consisted of the following for the years ended March 31, 2022 and 2021:

Three Months Ended March 31,

The changes in the carrying amount of redeemable noncontrolling interests consisted of the following for the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

Beginning balance $ 72,725,000 $ 40,340,000

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Adjustment to redemption value 3,833,000 899,000

Net income (loss) attributable to redeemable noncontrolling interests 187,000 ( 484,000 )

Net loss attributable to redeemable noncontrolling interests ( 31,000 ) ( 514,000 )

Ending balance $ 75,337,000 $ 40,174,000

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Preferred Stock

Pursuant to our charter, we are authorized to issue 200,000,000 shares of our preferred stock, par value $ 0.01 per share.

As of both March 31, 2022 and December 31, 2021, no shares of preferred stock were issued and outstanding.

As of both June 30, 2022 and December 31, 2021, no shares of preferred stock were issued and outstanding.

On March 12, 2015, we terminated the primary portion of our initial public offering.

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Effective October 5, 2016, we amended and restated the Initial DRIP, or the GAHR III Amended and Restated DRIP, to amend the price at which shares of our common stock were issued pursuant to the 2015 GAHR III DRIP Offering.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

On January 30, 2019, we filed a Registration Statement on Form S-3 under the Securities Act to register a maximum of $ 200,000,000 of additional shares of our common stock to be issued pursuant to the GAHR III Amended and Restated DRIP, or the 2019 GAHR III DRIP Offering, which we commenced offering on April 1, 2019, following the deregistration of the 2015 GAHR III DRIP Offering.

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As a result, beginning with the October 2021 distribution, which was paid in November 2021, stockholders who previously enrolled as participants in the AHR DRIP received or will receive distributions in shares of our common stock pursuant to the terms of the AHR DRIP, instead of cash distributions.

As of March 31, 2022, a total of $ 65,941,000 in distributions were reinvested that resulted in 6,981,086 shares of common stock being issued pursuant to the AHR DRIP Offering.

Since October 5, 2016, our board had approved and established an estimated per share NAV annually.

As of June 30, 2022, a total of $ 77,083,000 in distributions were reinvested that resulted in 8,180,513 shares of common stock being issued pursuant to the AHR DRIP Offering.

Since October 5, 2016, our board had approved and established an estimated per share net asset value, or NAV, annually.

Commencing with the distribution payment to stockholders paid in the month following such board approval, shares of our common stock issued pursuant to our distribution reinvestment plan are issued at the current estimated per share NAV until such time as our board determined an updated estimated per share NAV.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

The following is a summary of the historical estimated per share NAV for GAHR III and the Combined Company, as applicable:

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03/24/22 $ 9.29

For the three months ended March 31, 2022, and 2021, $ 11,304,000 and $ 0 , respectively, in distributions were reinvested and 1,226,073 and 0 shares of our common stock, respectively, were issued pursuant to our DRIP Offerings.

For the three and six months ended June 30, 2022, $ 11,143,000 and $ 22,447,000 , respectively, in distributions were reinvested and 1,199,427 and 2,425,500 shares of our common stock, respectively, were issued pursuant to our DRIP Offerings.

For both the three and six months ended June 30, 2021, there were no distributions reinvested pursuant to our DRIP Offerings.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Share Repurchase Plan

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All share repurchase requests other than those requests resulting from the death or qualifying disability of stockholders were and shall be rejected.

For the three months ended March 31, 2022, we repurchased 448,375 shares of our common stock, for an aggregate of $ 4,134,000 , at a repurchase price of $ 9.22 per share.

For the three months ended March 31, 2021, we did no t repurchase any shares of common stock.

In April 2022, we repurchased 699,460 shares of our common stock, for an aggregate of $ 6,449,000 , at a repurchase price of $ 9.22 per share.

During the three and six months ended June 30, 2022, we repurchased 699,460 and 1,147,835 shares of our common stock, respectively, for an aggregate of $ 6,449,000 and $ 10,583,000 , respectively, at a repurchase price of $ 9.22 per share.

During the three and six months ended June 30, 2021, we did no t repurchase any shares of common stock.

In July 2022, we repurchased 608,138 shares of our common stock, for an aggregate of $ 5,650,000 , at a repurchase price of $ 9.29 per share.

All shares were repurchased using the cumulative proceeds we received from the sale of shares of our common stock pursuant to our DRIP Offerings.

Noncontrolling Interests in Total Equity

As of both March 31, 2022 and December 31, 2021, Trilogy REIT Holdings owned approximately 95.9 % of Trilogy.

As of both June 30, 2022 and December 31, 2021, Trilogy REIT Holdings owned approximately 95.9 % of Trilogy.

Prior to October 1, 2021, we were the indirect owner of a 70.0 % interest in Trilogy REIT Holdings pursuant to an amended joint venture agreement with an indirect, wholly owned subsidiary of NorthStar Healthcare Income, Inc., or NHI, and a wholly owned subsidiary of GAHR IV Operating Partnership.

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The performance-based Profit Interests were subject to a performance commitment and would have vested upon liquidity events as defined in the Profit Interests agreements.

The performance-based Profit Interests were measured at their fair value on the adoption date of Accounting Standards Update 2018-07, Improvements to Nonemployee Share-Based Payment Accounting , using a modified retrospective approach.

The nonvested awards were presented as noncontrolling interests in total equity in our accompanying condensed consolidated balance sheets, and were re-classified to

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

redeemable noncontrolling interests upon vesting as they had redemption features outside of our control similar to the common stock units held by Trilogy’s management.

The performance-based Profit Interests were measured at their fair value on the adoption date of ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting , using a modified retrospective approach.

The nonvested awards were presented as noncontrolling interests in total equity in our accompanying condensed consolidated balance sheets, and were re-classified to redeemable noncontrolling interests upon vesting as they had redemption features outside of our control similar to the common stock units held by Trilogy’s management.

See Note 13, Redeemable Noncontrolling Interests, for a further discussion.

In December 2021, we redeemed a part of the time-based Profit Interests, and all of the performance-based Profit Interests that were included in noncontrolling interests in total equity.

We redeemed such Profit Interests in cash and through the issuance of additional equity interests in Trilogy that are classified as redeemable noncontrolling interests in our consolidated balance sheets.

There were no canceled, expired or exercised Profit Interests during the three months ended March 31, 2022 and 2021.

For the three months ended March 31, 2022 and 2021, we recognized stock compensation expense related to the Profit Interests of $ 21,000 and $( 14,000 ), respectively.

We redeemed such Profit Interests in cash and through the issuance of additional equity interests in Trilogy that are classified as redeemable noncontrolling interests in our accompanying condensed consolidated balance sheets.

There were no canceled, expired or exercised Profit Interests during the three and six months ended June 30, 2022 and 2021.

For the three months ended June 30, 2022 and 2021, we recognized stock compensation expense related to the Profit Interests of $ 21,000 and $ 0 , respectively, and for the six months ended June 30, 2022 and 2021, we recognized stock compensation expense related to the Profit Interests of $ 42,000 and $( 14,000 ), respectively.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

One of our consolidated subsidiaries issued non-voting preferred shares of beneficial interests to qualified investors for total proceeds of $ 125,000 .

1 unchanged sentence

We classify the value of the subsidiary’s preferred shares of beneficial interests as noncontrolling interests in our accompanying condensed consolidated balance sheets and the dividends of the preferred shares of beneficial interests in net income or loss attributable to noncontrolling interests in our accompanying condensed consolidated statements of operations and comprehensive loss.

As of both March 31, 2022 and December 31, 2021, we owned an 86.0 % interest in a consolidated limited liability company that owns Lakeview IN Medical Plaza, which we acquired on January 21, 2016.

As such, 14.0 % of the net earnings of Lakeview IN Medical Plaza were allocated to noncontrolling interests for the three months ended March 31, 2022 and 2021.

On April 7, 2020, we sold a 9.4 % membership interest in a consolidated limited liability company that owns Southlake TX Hospital to an unaffiliated third party for a contract purchase price of $ 11,000,000 and therefore as of both March 31, 2022 and December 31, 2021, we owned a 90.6 % membership interest in such consolidated limited liability company.

For the three months ended March 31, 2022 and 2021, 9.4 % of the net earnings of Southlake TX Hospital were allocated to noncontrolling interests in our accompanying condensed consolidated statements of operations and comprehensive loss.

As of both June 30, 2022 and December 31, 2021, we owned an 86.0 % interest in a consolidated limited liability company that owns Lakeview IN Medical Plaza.

As such, 14.0 % of the net earnings of Lakeview IN Medical Plaza were allocated to noncontrolling interests for the three and six months ended June 30, 2022 and 2021.

As of both June 30, 2022 and December 31, 2021, we owned a 90.6 % membership interest in a consolidated limited liability company that owns Southlake TX Hospital.

As such, 9.4 % of the net earnings of Southlake TX Hospital were allocated to noncontrolling interests for the three and six months ended June 30, 2022 and 2021.

On October 1, 2021, upon consummation of the Merger, through our operating partnership, we acquired an approximate 90.0 % interest in a joint venture that owns the Louisiana Senior Housing Portfolio.

As such, 10.0 % of the net earnings of the joint venture were allocated to noncontrolling interests in our accompanying condensed consolidated statements of operations and comprehensive loss during the three months ended March 31, 2022.

As discussed in Note 1, Organization and Description of Business, as a result of the Merger and the AHI Acquisition, as of March 31, 2022 and December 31, 2021, we, through our direct and indirect subsidiaries, own an approximately 95.0 % and 94.9 % general partnership interest, respectively, in our operating partnership and the remaining approximately 5.0 % and 5.1 % limited partnership interest, respectively, in our operating partnership is owned by the NewCo Sellers.

As of March 31, 2022 and December 31, 2021, approximately 4.0 % and 4.1 % of our total operating partnership units outstanding, respectively, is presented in total equity in our accompanying condensed consolidated balance sheet.

As discussed in Note 1, Organization and Description of Business, as a result of the Merger and the AHI Acquisition, as of June 30, 2022 and December 31, 2021, we, through our direct and indirect subsidiaries, own an approximately 95.0 % and 94.9 % general partnership interest, respectively, in our operating partnership and the remaining approximately 5.0 % and 5.1 % limited partnership interest, respectively, in our operating partnership is owned by the NewCo Sellers.

As of June 30, 2022 and December 31, 2021, approximately 4.0 % and 4.1 % of our total operating partnership units outstanding, respectively, is presented in total equity in our accompanying condensed consolidated balance sheets.

See Note 13, Redeemable Noncontrolling Interests, for a further discussion.

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The maximum number of shares of our common stock that may be issued pursuant to our incentive plan is 4,000,000 shares.

Through March 31, 2022, we granted an aggregate of 1,082,455 shares of our restricted common stock under our incentive plan.

Through June 30, 2022, we granted an aggregate of 1,137,355 shares of our restricted common stock under our incentive plan.

Such amount includes:

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(ii) 477,901 time-based shares of our restricted Class T common stock, at a grant date fair value of $ 9.22 per share, to certain executive officers and key employees;

and (iii) 319,149 shares of our restricted Class T common stock, at a grant date fair value of $ 9.22 per share, to certain of our key employees.

Also, through March 31, 2022, we granted 159,301 performance-based restricted units under our incentive plan to certain executive officers representing the right to receive shares of our Class T common stock upon vesting.

Prior to the Merger, GAHR III granted an aggregate of 135,000 shares of its restricted common stock, which is equal to 125,091 shares of our restricted Class I common stock, using the conversion ratio of 0.9266 shares of GAHR IV Class I common stock for each share of GAHR III restricted common stock, as determined in the Merger.

(iii) 319,149 shares of our restricted Class T common stock, at a grant date fair value of $ 9.22 per share, to certain of our key employees;

and (iv) 125,091 shares of our restricted Class I common stock issued upon the conversion of restricted common stock that GAHR III granted prior to the Merger.

Also, through June 30, 2022, we granted 113,205 performance-based restricted stock units pursuant to our incentive plan to certain executive officers representing the right to receive shares of our Class T common stock upon vesting, at a grant date fair value of $ 9.29 per unit, net of 46,096 performance-based restricted stock units that were forfeited during the six months ended June 30, 2022.

Further, for the six months ended June 30, 2022, we granted 76,800 time-based restricted stock units under our incentive plan, at a grant date fair value of $ 9.29 per share, to certain employees representing the right to receive shares of our Class T common stock upon vesting.

For the three months ended June 30, 2022 and 2021, we recognized stock based compensation expense related to awards granted pursuant to our incentive plan of $ 980,000 and $ 26,000 , respectively.

For the six months ended June 30, 2022 and 2021, we recognized stock based compensation expense related to awards granted pursuant to our incentive plan of $ 1,791,000 and $ 53,000 , respectively.

Such stock based compensation expense was included in general and administrative in our accompanying condensed consolidated statements of operations and comprehensive loss.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

On April 1, 2022, we granted 76,800 time-based restricted units under our incentive plan to certain employees representing the right to receive shares of our Class T common stock upon vesting.

Such time-based restricted units vest in three equal annual installments on April 1, 2023, April 1, 2024 and April 1, 2025.

For the three months ended March 31, 2022 and 2021, we recognized stock compensation expense related to the restricted stock grants to our independent directors, executive officers and key employees of $ 811,000 and $ 27,000 , respectively.

Such stock compensation expense is included in general and administrative in our accompanying consolidated statements of operations and comprehensive loss.

Related Party Transactions

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Following the consummation of the Merger, we became self-managed and as a result, we no longer incur to our former advisor and its affiliates any fees or expense reimbursements arising from the Advisory Agreement.

Fees and expenses incurred to our former advisor or its affiliates for the three months ended March 31, 2021 were as follows:

Fees and expenses incurred to our former advisor or its affiliates for the three and six months ended June 30, 2021 were as follows:

Three Months Ended

March 31, 2021

June 30, 2021 Six Months Ended

June 30, 2021

Asset management fees(1) $ 5,401,000 $ 10,763,000

Acquisition fees(2) 1,334,000

Property management fees(2) 681,000 1,335,000

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Lease fees(4) 120,000 385,000

Operating expenses(6) 63,000

Construction management fees(5) 68,000 80,000

Operating expenses(6) 53,000 116,000

Acquisition fees(7) 10,000 1,344,000

$ 6,690,000 $ 14,663,000

(1) Asset management fees were included in general and administrative in our accompanying condensed consolidated statements of operations and comprehensive loss.

(2) Acquisition fees in connection with the acquisition of properties accounted for as asset acquisitions or the acquisition of real estate-related investments were capitalized as part of the associated investments in our accompanying condensed consolidated balance sheets.

(2) Property management fees were included in rental expenses or general and administrative expenses in our accompanying condensed consolidated statements of operations and comprehensive loss, depending on the property type from which the fee was incurred.

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(4) Lease fees were capitalized as costs of entering into new leases and included in other assets, net in our accompanying condensed consolidated balance sheets.

(5) Construction management fees were capitalized as part of the associated asset and included in real estate investments, net in our accompanying condensed consolidated balance sheets.

(6) We reimbursed our former advisor or its affiliates for operating expenses incurred in rendering services to us, subject to certain limitations.

For the 12 months ended March 31, 2021, our operating expenses did not exceed such limitations.

For the 12 months ended June 30, 2021, our operating expenses did not exceed such limitations.

Operating expenses were generally included in general and administrative in our accompanying condensed consolidated statements of operations and comprehensive loss.

(7) Acquisition fees in connection with the acquisition of properties accounted for as asset acquisitions or the acquisition of real estate-related investments were capitalized as part of the associated investments in our accompanying condensed consolidated balance sheets.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Operating expenses were generally included in general and administrative in our accompanying condensed consolidated statements of operations and comprehensive loss.

(7) Construction management fees were capitalized as part of the associated asset and included in real estate investments, net in our accompanying condensed consolidated balance sheets.

Accounts Payable Due to Affiliates

We did no t have any amounts outstanding to our affiliates as of March 31, 2022 .

We did no t have any amounts outstanding to our affiliates as of June 30, 2022 .

The following amounts were outstanding to our affiliates as of December 31, 2021:

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Assets and Liabilities Reported at Fair Value

The table below presents our assets and liabilities measured at fair value on a recurring basis as of March 31, 2022, aggregated by the level in the fair value hierarchy within which those measurements fall:

The table below presents our assets and liabilities measured at fair value on a recurring basis as of June 30, 2022, aggregated by the level in the fair value hierarchy within which those measurements fall:

Quoted Prices in

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$ — $ 500,000 $ 786,000 $ 1,286,000

There were no transfers into and out of fair value measurement levels during the three months ended March 31, 2022 and 2021.

As of March 31, 2022 and December 31, 2021, we have recorded $ 733,000 and $ 786,000 , respectively, related to warrants in Trilogy common units held by certain members of Trilogy’s management, which is included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheets.

There were no transfers into and out of fair value measurement levels during the six months ended June 30, 2022 and 2021.

As of June 30, 2022 and December 31, 2021, we have recorded $ 733,000 and $ 786,000 , respectively, related to warrants in Trilogy common units held by certain members of Trilogy’s management, which is included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheets.

Once exercised, these warrants have redemption features similar to the common units held by members of Trilogy’s management.

See Note 13, Redeemable

See Note 13, Redeemable Noncontrolling Interests, for a further discussion.

As of June 30, 2022 and December 31, 2021, the carrying value is a reasonable estimate of fair value.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Noncontrolling Interests, for a further discussion.

As of March 31, 2022 and December 31, 2021, the carrying value is a reasonable estimate of fair value.

Derivative Financial Instruments

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As a result, we determined that our derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy.

As of March 31, 2022, we did not have any derivative financial instruments.

As of June 30, 2022, we did not have any derivative financial instruments.

Financial Instruments Disclosed at Fair Value

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We have determined that the valuations of our debt security investment, mortgage loans payable and lines of credit and term loans are classified in Level 2 within the fair value hierarchy.

The carrying amounts and estimated fair values of such financial instruments as of March 31, 2022 and December 31, 2021 were as follows:

The carrying amounts and estimated fair values of such financial instruments as of June 30, 2022 and December 31, 2021 were as follows:

Amount(1) Fair

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Lines of credit and term loans $ 1,261,225,000 $ 1,270,330,000 $ 1,222,853,000 $ 1,226,636,000

(1) Carrying amount is net of any discount/premium and unamortized costs.

(1) Carrying amount is net of any discount/premium and unamortized deferred financing costs.

As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders.

We have elected to treat certain of our consolidated subsidiaries as taxable REIT subsidiaries, or TRS, pursuant to

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders.

We have elected to treat certain of our consolidated subsidiaries as taxable REIT subsidiaries, or TRS, pursuant to the Code.

TRS may participate in services that would otherwise be considered impermissible for REITs and are subject to federal and state income tax at regular corporate tax rates.

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If the tax benefit meets the “more likely than not” threshold, the measurement of the tax benefit will be based on our estimate of the ultimate tax benefit to be sustained if audited by the taxing authority.

As of both March 31, 2022 and December 31, 2021, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying condensed consolidated financial statements.

As of both June 30, 2022 and December 31, 2021, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying condensed consolidated financial statements.

We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets.

A valuation allowance is established if we believe it is more likely than not that all or a portion of the deferred tax assets are not realizable.

As of March 31, 2022 and December 31, 2021, our valuation allowance fully reserves the net deferred tax assets due to historical losses and inherent uncertainty of future income.

As of June 30, 2022 and December 31, 2021, our valuation allowance fully reserves the net deferred tax assets due to historical losses and inherent uncertainty of future income.

We will continue to monitor industry and economic conditions, and our ability to generate taxable income based on our business plan and available tax planning strategies, which would allow us to utilize the tax benefits of the net deferred tax assets and thereby allow us to reverse all, or a portion of, our valuation allowance in the future.

We have operating leases with tenants that expire at various dates through 2050.

For the three months ended March 31, 2022 and 2021, we recognized $ 50,731,000 and $ 28,667,000 , respectively, of revenues related to operating lease payments, of which $ 10,413,000 and $ 4,350,000 , respectively, was for variable lease payments.

As of March 31, 2022, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for the nine months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter for properties that we wholly own:

For the three months ended June 30, 2022 and 2021, we recognized $ 50,060,000 and $ 29,271,000 , respectively, of revenues related to operating lease payments, of which $ 9,663,000 and $ 5,304,000 , respectively, was for variable lease payments.

For the six months ended June 30, 2022 and 2021, we recognized $ 100,790,000 and $ 57,938,000 , respectively, of revenues related to operating lease payments, of which $ 20,076,000 and $ 9,654,000 , respectively, was for variable lease payments.

As of June 30, 2022, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for the six months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter for properties that we wholly own:

2022 $ 77,361,000

9 unchanged sentences

The exercise of lease renewal options is at our sole discretion.

Certain leases also include options to purchase the

Certain leases also include options to purchase the leased property.

As of June 30, 2022, we had future lease payments of $ 27,229,000 for an operating lease that had not yet commenced.

Such operating lease will commence in fiscal year 2022 with a lease term of 15 years.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

leased property.

As of March 31, 2022, we had future lease payments of $ 27,229,000 for an operating lease that had not yet commenced.

Such operating lease will commence in fiscal year 2022 with a lease term of 15 years.

The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

2 unchanged sentences

The components of lease costs were as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Lease Cost Classification 2022 2021

6 unchanged sentences

Total lease cost $ 5,556,000 $ 5,947,000

Six Months Ended June 30,

Lease Cost Classification 2022 2021

Operating lease cost(1) Property operating expenses, rental expenses or general and administrative expenses $ 11,764,000 $ 11,835,000

Finance lease cost:

Amortization of leased assets

Depreciation and amortization 629,000 793,000

Interest on lease liabilities Interest expense 140,000 192,000

Sublease income Resident fees and services revenue or other income ( 382,000 ) ( 6,000 )

Total lease cost $ 12,151,000 $ 12,814,000

(1) Includes short-term leases and variable lease costs, which are immaterial.

Additional information related to our leases for the periods presented below was as follows:

Lease Term and Discount Rate March 31,

Lease Term and Discount Rate June 30,

Weighted average remaining lease term (in years):

6 unchanged sentences

7.59 % 7.68 %

Three Months Ended March 31,

Six Months Ended June 30,

Supplemental Disclosure of Cash Flows Information 2022 2021

2 unchanged sentences

Leased assets obtained in exchange for finance lease liabilities $ 56,000 $ 136,000

Right-of-use assets obtained in exchange for operating lease liabilities $ — $ 105,000

AMERICAN HEALTHCARE REIT, INC.

1 unchanged sentence

Operating Leases

As of March 31, 2022, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the nine months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter, as well as the reconciliation of those cash flows to operating lease liabilities on our accompanying condensed consolidated balance sheet:

As of June 30, 2022, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the six months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter, as well as the reconciliation of those cash flows to operating lease liabilities on our accompanying condensed consolidated balance sheet:

2022 $ 7,116,000

8 unchanged sentences

Finance Leases

As of March 31, 2022, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the nine months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter, as well as a reconciliation of those cash flows to finance lease liabilities:

As of June 30, 2022, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the six months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter, as well as a reconciliation of those cash flows to finance lease liabilities:

2022 $ 34,000

3 unchanged sentences

Segment Reporting

As of March 31, 2022, we evaluated our business and made resource allocations based on six reportable business segments:

medical office buildings, integrated senior health campuses, skilled nursing facilities, SHOP, senior housing and hospitals.

As of June 30, 2022, we evaluated our business and made resource allocations based on six reportable business segments:

integrated senior health campuses, medical office buildings, skilled nursing facilities, SHOP, senior housing — leased and hospitals.

Our medical office buildings are typically leased to multiple tenants under separate leases, thus requiring active management and responsibility for many of the associated operating expenses (much of which are, or can effectively be, passed through to the tenants).

Our integrated senior health campuses include a range of assisted living, memory care, independent living, skilled nursing services and certain ancillary businesses that are owned and operated utilizing a RIDEA structure.

Our skilled nursing and senior housing facilities are primarily single-tenant properties for which we lease the facilities to unaffiliated tenants under triple-net and generally master leases that transfer the obligation for all facility operating costs (including maintenance, repairs, taxes, insurance and capital expenditures) to the tenant.

In addition, our senior housing segment includes our debt security investment.

Our SHOP include senior housing facilities that are owned and operated utilizing a RIDEA structure.

Our hospital investments are similarly structured to our skilled nursing and senior housing facilities.

Our skilled nursing and senior housing facilities are single-tenant properties for which we lease the facilities to unaffiliated tenants under triple-net and generally master leases that transfer the obligation for all facility operating costs (including maintenance, repairs, taxes, insurance and capital expenditures) to the tenant.

In addition, our senior housing —leased segment includes our debt security investment.

Our hospital investments are similarly structured to our leased skilled nursing and senior housing facilities.

Our SHOP segment includes senior housing facilities that are owned and operated utilizing a RIDEA structure.

While we believe that net income (loss), as defined by GAAP, is the most appropriate earnings measurement, we evaluate our segments’ performance based upon segment net operating income, or NOI.

We define segment NOI as total revenues and grant income, less property operating expenses and rental expenses, which excludes depreciation and amortization, general and administrative expenses, business acquisition expenses, interest expense, gain or loss on dispositions of real estate investments, impairment of real estate investments, income or loss from unconsolidated entities, foreign currency

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

gain or loss, other income and income tax benefit or expense for each segment.

of real estate investments, impairment of real estate investments, income or loss from unconsolidated entities, foreign currency gain or loss, other income and income tax benefit or expense for each segment.

We believe that segment NOI serves as an appropriate supplemental performance measure to net income (loss) because it allows investors and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies and between periods on a consistent basis.

1 unchanged sentence

Non-segment assets primarily consist of corporate assets including cash and cash equivalents, other receivables, deferred financing costs and other assets not attributable to individual properties.

On October 1, 2021, as part of the Merger, we acquired 87 properties, comprising 92 buildings, or approximately 4,799,000 square feet of GLA, which expanded our portfolio of real estate properties and SHOP within the segments as outlined above.

On October 1, 2021, as part of the Merger, we acquired 92 buildings, or approximately 4,799,000 square feet of GLA, which expanded our portfolio of real estate properties and SHOP within the segments as outlined above.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Summary information for the reportable segments during the three months ended March 31, 2022 and 2021 was as follows:

Summary information for the reportable segments during the three and six months ended June 30, 2022 and 2021 was as follows:

Senior Health

1 unchanged sentence

Buildings Senior

Housing Skilled

Housing — Leased Skilled

Facilities Hospitals Three Months

March 31, 2022

June 30, 2022

Revenues and grant income:

10 unchanged sentences

Other income (expense):

Interest expense (including amortization of deferred financing costs, debt discount/premium and gain on debt extinguishments) ( 20,345,000 )

Loss on dispositions of real estate investments ( 73,000 )

Impairment of real estate investments ( 17,340,000 )

Income from unconsolidated entities 638,000

Foreign currency loss ( 3,607,000 )

Other income 469,000

Total net other expense ( 40,258,000 )

Loss before income taxes ( 15,337,000 )

Income tax expense ( 205,000 )

Net loss $ ( 15,542,000 )

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Senior Health

Campuses SHOP Medical

Buildings Senior

Housing — Leased Skilled

Facilities Hospitals Three Months

June 30, 2021

Revenues and grant income:

Resident fees and services

$ 255,815,000 $ 20,537,000 $ — $ — $ — $ — $ 276,352,000

Real estate revenue

— — 20,635,000 3,606,000 3,661,000 2,740,000 30,642,000

Grant income 898,000 201,000 — — — — 1,099,000

Total revenues and grant income 256,713,000 20,738,000 20,635,000 3,606,000 3,661,000 2,740,000 308,093,000

Property operating expenses

232,991,000 17,435,000 — — — — 250,426,000

Rental expenses

— — 7,588,000 30,000 375,000 126,000 8,119,000

Segment net operating income

$ 23,722,000 $ 3,303,000 $ 13,047,000 $ 3,576,000 $ 3,286,000 $ 2,614,000 $ 49,548,000

General and administrative

Business acquisition expenses 2,750,000

Depreciation and amortization

Other income (expense):

Interest expense:

Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishment) ( 18,490,000 )

Gain in fair value of derivative financial instruments 1,775,000

Loss on disposition of real estate investment ( 42,000 )

Impairment of real estate investment ( 3,335,000 )

Loss from unconsolidated entities ( 901,000 )

Foreign currency gain 238,000

Other income 191,000

Total net other expense ( 20,564,000 )

Loss before income taxes ( 7,466,000 )

Income tax expense ( 495,000 )

Net loss $ ( 7,961,000 )

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Senior Health

Campuses SHOP Medical

Buildings Senior

Housing — Leased Skilled

Facilities Hospitals Six Months

June 30, 2022

Revenues and grant income:

Resident fees and services $ 568,594,000 $ 76,605,000 $ — $ — $ — $ — $ 645,199,000

Real estate revenue — — 74,670,000 10,560,000 12,992,000 4,826,000 103,048,000

Grant income 16,065,000 118,000 — — — — 16,183,000

Total revenues and grant income 584,659,000 76,723,000 74,670,000 10,560,000 12,992,000 4,826,000 764,430,000

Property operating expenses 512,084,000 71,135,000 — — — — 583,219,000

Rental expenses — — 28,104,000 391,000 1,207,000 248,000 29,950,000

Segment net operating income $ 72,575,000 $ 5,588,000 $ 46,566,000 $ 10,169,000 $ 11,785,000 $ 4,578,000 $ 151,261,000

General and administrative $ 22,047,000

Business acquisition expenses 1,930,000

Depreciation and amortization 82,282,000

Other income (expense):

Interest expense:

Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishments) ( 43,670,000 )

1 unchanged sentence

Gain on dispositions of real estate investments 683,000

Impairment of real estate investments ( 17,340,000 )

Income from unconsolidated entities 2,024,000

10 unchanged sentences

Buildings Senior

Housing Skilled

Facilities Hospitals Three Months

March 31, 2021

Housing — Leased Skilled

Facilities Hospitals Six Months

June 30, 2021

Revenues and grant income:

18 unchanged sentences

Gain in fair value of derivative financial instruments 3,596,000

Loss on disposition of real estate investment ( 335,000 )

Loss on dispositions of real estate investment ( 377,000 )

Impairment of real estate investments ( 3,335,000 )

Loss from unconsolidated entities

( 2,672,000 )

Foreign currency gain 653,000

4 unchanged sentences

Net loss $ ( 24,234,000 )

Total assets by reportable segment as of March 31, 2022 and December 31, 2021 were as follows:

Total assets by reportable segment as of June 30, 2022 and December 31, 2021 were as follows:

Integrated senior health campuses $ 1,911,026,000 $ 1,896,608,000

1 unchanged sentence

SHOP 599,528,000 625,164,000

Senior housing 253,850,000 255,555,000

Skilled nursing facilities 250,019,000 252,869,000

Senior housing — leased 249,499,000 255,555,000

Hospitals 107,488,000 109,834,000

1 unchanged sentence

Total assets $ 4,523,900,000 $ 4,580,339,000

In connection with the AHI Acquisition, we recorded goodwill of $ 134,589,000 , which was allocated across our reporting segments.

As discussed in Note 4, Business Combination, in connection with the acquisition of Springhurst, we recorded goodwill of $ 1,827,000 , which was allocated to our integrated senior health campuses segment.

As of March 31, 2022, goodwill of $ 47,812,000 , $ 8,640,000 , $ 4,389,000 , $ 23,277,000 , $ 5,924,000 and $ 121,684,000 was allocated to our medical office buildings, skilled nursing facilities, hospitals, SHOP, senior housing facilities and integrated senior health campuses,

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

respectively.

As of December 31, 2021, goodwill of $ 47,812,000 , $ 8,640,000 , $ 4,389,000 , $ 23,277,000 , $ 5,924,000 and $ 119,856,000 was allocated to our medical office buildings, skilled nursing facilities, hospitals, SHOP, senior housing facilities and integrated senior health campuses, respectively.

In connection with the AHI Acquisition, we recorded goodwill of $ 134,589,000 , which was allocated across our reporting segments.

As discussed in Note 4, Business Combinations, in connection with the acquisitions we completed during the six months ended June 30, 2022 that were accounted for as business combinations, we recorded an aggregate goodwill of $ 2,816,000 , which was allocated to our integrated senior health campuses segment.

As of June 30, 2022, goodwill of $ 122,672,000 , $ 47,812,000 , $ 23,277,000 , $ 8,640,000 , $ 5,924,000 and $ 4,389,000 was allocated to our integrated senior health campuses, medical office buildings, SHOP, skilled nursing facilities, senior housing — leased and hospitals segments, respectively.

As of December 31, 2021, goodwill of $ 119,856,000 , $ 47,812,000 , $ 23,277,000 , $ 8,640,000 , $ 5,924,000 and $ 4,389,000 was allocated to our integrated senior health campuses, medical office buildings, SHOP, skilled nursing facilities, senior housing — leased and hospitals segments, respectively.

Our portfolio of properties and other investments are located in the United States, the UK and Isle of Man.

1 unchanged sentence

The following is a summary of geographic information for our operations for the periods presented:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

2022 2021 2022 2021

Revenues and grant income:

2 unchanged sentences

$ 388,299,000 $ 308,093,000 $ 764,430,000 $ 599,371,000

The following is a summary of real estate investments, net by geographic regions as of March 31, 2022 and December 31, 2021:

The following is a summary of real estate investments, net by geographic regions as of June 30, 2022 and December 31, 2021:

Real estate investments, net:

7 unchanged sentences

We have cash and cash equivalents in financial institutions that are insured by the Federal Deposit Insurance Corporation, or FDIC.

As of March 31, 2022 and December 31, 2021, we had cash and cash equivalents in excess of FDIC insured limits.

As of June 30, 2022 and December 31, 2021, we had cash and cash equivalents in excess of FDIC insured limits.

We believe this risk is not significant.

1 unchanged sentence

We perform credit evaluations of prospective tenants and security deposits are obtained at the time of property acquisition and upon lease execution.

Based on leases in effect as of March 31, 2022, properties in one state in the United States accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized NOI.

Based on leases in effect as of June 30, 2022, properties in one state in the United States accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized NOI.

Properties located in Indiana accounted for 32.8 % of our total property portfolio’s annualized base rent or annualized NOI.

Accordingly, there is a geographic concentration of risk subject to fluctuations in such state’s economy.

Based on leases in effect as of March 31, 2022, our six reportable business segments, medical office buildings, integrated senior health campuses, skilled nursing facilities, SHOP, senior housing and hospitals accounted for 39.3 %, 39.1 %, 8.4 %, 5.7 %, 4.3 % and 3.2 %, respectively, of our total property portfolio’s annualized base rent or annualized NOI.

As of March 31, 2022, no ne of our tenants at our properties accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized NOI, which is based on contractual base rent from leases in effect for our non-RIDEA properties and annualized NOI for our SHOP and integrated senior health campuses operations as of March 31, 2022.

Based on leases in effect as of June 30, 2022, our six reportable business segments, integrated senior health campuses, medical office buildings, skilled nursing facilities, SHOP, senior housing — leased and hospitals accounted for 41.6 %, 38.3 %, 8.0 %, 5.0 %, 4.0 % and 3.1 %, respectively, of our total property portfolio’s annualized base rent or annualized NOI.

As of June 30, 2022, no ne of our tenants at our properties accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized NOI, which is based on contractual base rent from leases in effect for our non-RIDEA properties and annualized NOI for our SHOP and integrated senior health campuses operations as of June 30, 2022.

AMERICAN HEALTHCARE REIT, INC.

2 unchanged sentences

Basic earnings (loss) per share for all periods presented are computed by dividing net income (loss) applicable to common stock by the weighted average number of shares of our common stock outstanding during the period.

Net income (loss) applicable to common stock is calculated as net income (loss) attributable to controlling interest less distributions allocated to participating securities of $ 1,490,000 and $ 0 , respectively, for the three months ended March 31, 2022 and 2021.

Net income (loss) applicable to common stock is calculated as net income (loss) attributable to controlling interest less distributions allocated to participating securities of $ 1,498,000 and $ 1,000 , respectively, for the three months ended June 30, 2022 and 2021, and $ 2,988,000 and $ 1,000 , respectively, for the six months ended June 30, 2022 and 2021.

Diluted earnings (loss) per share are computed based on the weighted average number of shares of our common stock and all potentially dilutive securities, if any.

Nonvested shares of our restricted common stock and limited partnership units of our operating partnership are participating securities and give rise to potentially dilutive shares of our common stock.

As of March 31, 2022 and 2021, there were 891,543 and 33,000 nonvested shares, respectively, of our restricted common stock outstanding, but such shares were excluded from the computation of diluted earnings per share because such shares were anti-dilutive during these periods.

As of March 31, 2022 and 2021, there were 14,007,903 and 222 limited partnership units, respectively, of our operating partnership outstanding, but such units were also excluded from the computation of diluted earnings per share because such units were anti-dilutive during these periods.

Time-based restricted stock units, nonvested shares of our restricted common stock and limited partnership units of our operating partnership are participating securities and give rise to potentially dilutive shares of our common stock.

As of June 30, 2022 and 2021, there were 886,959 and 27,000 nonvested shares, respectively, of our restricted common stock outstanding, but such shares were excluded from the computation of diluted earnings (loss) per share because such shares were anti-dilutive during these periods.

As of June 30, 2022 and 2021, there were 14,007,903 and 222 limited partnership units, respectively, of our operating partnership outstanding, but such units were also excluded from the computation of diluted earnings (loss) per share because such units were anti-dilutive during these periods.

As of June 30, 2022, there were 76,800 nonvested time-based restricted stock units outstanding, which were granted on April 1, 2022, but such units were excluded from the computation of diluted earnings (loss) per share because such restricted stock units were anti-dilutive during the period.

As of June 30, 2022, there were 113,205 nonvested performance-based restricted stock units outstanding, which were awarded in October 2021, with a grant date in April 2022, and treated as contingently issuable shares pursuant to ASC Topic 718, Compensation — Stock Compensation .

Such contingently issuable shares were excluded from the computation of diluted earnings (loss) per share because they were anti-dilutive during the period.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements