Apple Hospitality Reit, Inc. · NYSE:APLE
Apple Hospitality Reit — Investor Presentation (May 2015)
52 slides from Apple Hospitality Reit's investor presentation, May 8, 2015
Slide 1: Public Listing Presentation
Public Listing Presentation AATYARD. Sore) Tie aT, | Pay Wad
Slide 2: Forward Looking Statements
‘APPLE HOSPITALITY FORWARD LOOKING STATEMENTS
Slide 3: Listing Overview
LUSTING OVERVIEW ‘Apple Hosptliy RT, ne NYSE: APLE USTING DATE May 18,2015 fubject'o NYSE approval Ran were $200 lon even $19 ond $21 pr show: wi en eppsincly 25 na dys TENDER OFFER FUNDING Tender fer wl bef through he Corpony's unsecured rel fay SHARE BUYBACK PROGRAM, Upto $500 milion authorized by
Slide 4: Investment Highlights
‘APPLE HOSPITALITY INVESTMENT HIGHLIGHTS, + Simple Consistent Strategy * Proven Performance * Capital Structure Positioned for Growth + Strong Industry Fundamentals * Experienced Executive Team
Slide 5: Apple Hospitality Year Record of Value Creation
APPLE HOSPITALITY 15 YEAR RECORD OF VALUE CREATION Over $9 billion in hotel asset transactions since 1999
Slide 6: Portfolio Highlights
‘APPLE HOSPITALITY PORTFOLIO HIGHLIGHTS re i a 32 States 83 wsas ] 73 Hotels 2 Z ,003 Guestrooms A yrs. Average Effective Age ] F 8x Net Debt/Adjusted EBITDA
Slide 7: High Quality Portfolio
APPLE HOSPITALITY HIGH QUALITY PORTFOLIO i Tega gies = 4 |
Slide 8: Concentrated Brand Ownership
APPLE HOSPITALITY CONCENTRATED BRAND OWNERSHIP. @® Hilton Pr ee ; fannior? Ranked among top five 47%, 53% ° ‘Or: Jargest owners for both Hilton@ and Marriott® Val Mi Upscale Strong Loyalty Programs TH Urper Upscle (Bh Upper Miao Effective Brand Segmentation Strong Consumer Awareness Consistent Quali
Slide 9: Diversified Product Offerings
APPLE HOSPITALITY DIVERSIFIED PRODUCT OFFERINGS 63% Select Service 30% Extended Stay 7 To Full Service + Upscale room focused product + Designed for both business ond leisure havelors Simplified food and beverage offerings Amenities include swimming pools, finess facilites, high speed internet acces
Slide 10: Upscale Focus
APPLE HOSPITALITY UPSCALE FOCUS Lower RevPAR volatility and strong growth drive better risk adjusted returns LES VOLATIITY # 24st St Higher 12.2 5.3% UPPER UPSCALE
Slide 11: Leading Upscale Player
APPLE HOSPITALITY LEADING UPSCALE PLAYER NUMBER OF UPS Largest select service public lodging REIT with a sharp focus on upscale hotels 5,52015,112 8,154 5,894 5,447 3,704 9 779 1,498 1,296 1,190 1,049 1,016 794 757 625 417 16) © NN aot Attia ty" M6 Hoty AH” DR" LHO” SHO “CHSP” BEEW. PERN) FCM HPT NU
Slide 12: Geographic Diversity
‘APPLE HOSPITALITY GEOGRAPHIC DIVERSITY Disciplined strateg n urban, high end suby markets where proximity to guest amenities drive strong, consistent performance
Slide 13: Purposeful Portfolio Building
APPLE HOSPITALITY PURPOSEFUL PORTFOLIO BUILDING Acquisition strategy built ar quality developers and man ad relationships with high gement companies Acquire existing enhance product and geographic diver
Slide 14: Superior Asset Management
© APPLE HOSPITALITY REIT SUPERIOR ASSET MANAGEMENT Highly analytical approach to portfolio management and capital allocation decisions drives portfolio performance urn on investment and asset Active Brand Focused Financial Industry Contract Involvement Review Leadership Negotiation Forecasting ROI P
Slide 15: Best in Class Operators
‘APPLE HOSPITALITY BEST IN CLASS OPERATORS, u IBA wurre: » + Award winning Hilton® ond Marriott franchise pariners s Rie Bcxivo0n ban S focused and large scale institutional Honan property managers, EE lens fern oto crented mM CRESTLINE ae M Sanu + Scale provides for substantial te date nomgene @E —
Slide 16: Value Add Renovations
APPLE HOSPITALIT. VALUE ADD RENOVATIONS,
Slide 17: Well Maintained Portfolio
APPLE HOSPITALITY WELL MAINTAINED PORTFOLIO Quality Portfolio with Average Effective Age of 4 Years... the Result of Consistent Reinvestment on ¥000 3%, $334.0 $2744 $220.8 si7i3 snes $1988 2010 2011 2012 2013 2014-2015 Keontiee aioe Cumulative Cope ($n illns) Leads to Traveler Satisfaction Outperfo
Slide 18: Efficient Hotel Operations
EFFICIENT HOTEL OPERATIONS Adjusted Hotel E8ITDA Margin A% 38% 38% = 36% 95% 33% ct HT RU INN IHO. Sr 30% 30m 27% Fes SHO RH FH aie 27h 2% HST BEE
Slide 19: Best in Class Margins
APPLE HOSPITALITY BEST IN CLASS MARGINS Overhead % of TEV (by Company) ies aap me Ue Unde ie my om al ‘Ang. (excluding Appiel: 0.66% be eee ons . NN CH wu ‘SHO RH cor PB ee e co HO Be os as 57 kT aa gat g57 mg wae 32% zu cro ae FCH dese focus extends to G&A - among the lowest in the peer group - enh
Slide 20: Proven Performance
APPLE HOSPITALITY PROVEN PERFORMANCE Average Daily Rate Growth Occupancy Growth $125 in On id 74% $116 9% $113, cd $110 71% 2011 2012 2013 2014 1a14 1015 2011 2012 2013. 2014 1a14 1415 RevPAR Growth Adjusted EBITDA a miions 92 92 wal § OO: $299 $86 $85 $286 $82 $271 $78 $252 $65, 2011 2012 2013 2014
Slide 21: Conservative Capitalization
‘APPLE HOSPITALITY CONSERVATIVE CAPITALIZATION Net Debt / ITM Adjusted EBITDA — . jim 49x rics Heal _ ite — 3.8% 3% 27% a is Nabe T3120) 1608 179% Beek «DANE 25 SITE TLAK 25 dRON 38 ASE Conservatively structured balance sheet allows access fo capital throughout hotel cycles (Scorers a a
Slide 22: Flexible Balance Sheet
‘APPLE HOSPITALITY FLEXIBLE BALANCE SHEET Debt Composition!"! me sis ae eas Wes UNENCUMBERED TFOUO $124 127 Hors : ne _ ig 15,973 keys 1 es Ea 2015 2016 2017 2018 2019 2020 2021 2022 cd che Low debt and staggered maturities facilitate agile balance shee! strategy
Slide 23: Comparable Hotels Financial Highlights
‘APPLE HOSPITALITY COMPARABLE HOTELS FINANCIAL HIGHLIGHTS {$ in thousonds except RevPAR} FIRST QUARTER FULL YEAR 2015 2014 2014 2013 oie RevPAR $94 $87 $94 $88 7% Revenue — $203,575 $186,879 % $814,974 $764,036 7% Adjusted Hotel $74,647 $64,687 15% $302,688 $276,790 % E8DA Adjusted Hotel 36.7% 34.6%
Slide 24: 2015 Outlook
low High Comparable Hotels RevPAR Growth 5% 7% Adjusted EBITDA $310 million $330 million
Slide 25: Robust Industry Fundamentals
‘APPLE HOSPITALITY ROBUST INDUSTRY FUNDAMENTALS, © Economy has continued to expand posit ECONOMIC + Corporate profit is projecid to rite over the net five yeors INDICATORS : Higher discretionary income and business budgets drive navel spe + Supply arowh remain low by historical standards INCREASED R
Slide 26: Strong Expected RevPAR Growth
‘APPLE HOSPITALITY STRONG EXPECTED REVPAR GROWTH ‘Change in Industry RevPAR (%) ah \ ay ¥ (20%) 80 Months: 31 Months 56 Months. 59 Months + Maras Change in Total Supply (%) ee —coangein Supply === Long termave remains below long- term average + 1an-90 er 96 ug.o2 Novo. Maes ADR is expected to drive
Slide 27: Outperforming Chain Scales
APPLE HOSPITALITY OUTPERFORMING CHAIN SCALES BEE > 8.0% 8.8% 7.2% Demend ‘supply Demend Supply Demand Supply Demand continues to exceed supply, driving strong RevPAR growth and margin expansion
Slide 28: Executive Team
APPLE HOSPITALITY EXECUTIVE TEAM EXPERIENCED EXECUTIVE MAN, Senior Management Since launch of frst hospitality REIT in 1999, + Ownership 5.5% he Apple REI + Glode Knight ~ Executive Chairman (Direct) + Jusin Knight President & Chief Executive Officer Director) .Roiued end invested approximately $7 b
Slide 29: Board of Directors
APPLE HOSPITALITY BOARD OF DIRECTORS Strong, independent board with significant public markets and industr BOARD OF DIRECTORS, Glocie M. Knight ~ Executive Choirman Glenn W. Bunting- Director Feundo, Ape Holey RET: Forme’ Chormon/CEO, Corton Reoly NYSECR reiden GB Comoration Jon A. Foshein- Director
Slide 30: Investment Highlights
INVESTMENT HIGHLIGHTS, + Simple Consistent Strategy * Proven Performance * Capital Structure Positioned for Growth + Strong Industry Fundamentals * Experienced Executive Team
Slide 31: Appendix
Y APPLE HOSPITALITY APPENDIX
Slide 32: Consolidated Balance Sheets
‘APPLE HOSPITALITY ‘APPLE HOSPITALITY REIT, INC. CONSOUDATED BALANCE SHEETS Tn owonds, ono sae do eo Traded) Inveeer ive ea nt of ccc dopeciion 1 $327,243 and $296,559, respectively $ 3.482.039 ‘Asal ald for soe ° Cath and cash equivalents Rearted eonh~ fire, fates, and eer exerows us rm hid ory man
Slide 33: Consolidated Statements of Operations and Comprehensive Income
‘APPLE HOSPITALITY ‘APPLE HOSPITALITY REIT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) ‘Uren (fennel oes ered Opera come fo posi, peti pq wie ear non flo banca Neteame fo Congres none fos Bosc ond ed tina fo parcmman hve
Slide 34: Consolidated Balance Sheets
‘APPLE HOSPITALITY ‘APPLE HOSPITALITY REIT, INC (CONSOLIDATED BALANCE SHEETS (ound enap sae daa) Ae investment in ele, no of occumulie! deprecation 191 $296 559 ond §200,754 rexpacvely $ 9,492,821 $1,449,498 Aa ld forsale 95,588 0 oth ond cath equivalents 0 1a,102 Rested cash —uriu, tures, ond athe
Slide 35: Consolidated Statements of Operations and Comprehensive Income
‘APPLE HOSPITALITY "APPLE HOSPITALITY REIT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME Uibowtnd, ens do|
Slide 36: Reconciliation of Net Income to EBITDA and Adjusted EBITDA, Q1
‘APPLE HOSPITALITY THE FOLLOWING TABLE RECONCILES THE COMPANY'S GAAP NET INCOME [LOSS] TO EBITDA, ADJUSTED EBITDA AND ‘ADJUSTED HOTEL EBITDA FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 201.4 in csone Three Months Ended 015 2014 Nac $ paaen ‘motor of rele od Series 8 comer paared sae expose hv ile
Slide 37: Comparable Hotels Financial Highlights, Three Months
Reverve used Hotel BITDA Margin ‘APPLE HOSPITALITY ‘APPLE HOSPITALITY COMPARABLE HOTELS FINANCIAL HIGHUGHTS fr hwtands eat RPA THREE MONTHS MARCH 3 ACIUALYT —pyposttions “HOTES $92 $65 $e $210.52 $6777 $20,575 $76,650 $2,003 $74,647 26.7% ACTUALYID $197,121 $51,172 THREE MONTE MARCH 3 ART 8 ARG JANU
Slide 38: Reconciliation of Net Income to EBITDA, Years 2014 and 2013
‘APPLE HOSPITALITY THE FOLLOWING TABLE RECONCILES THE COMPANY'S GAAP NET INCOME TO EBITDA, ADJUSTED EBITDA AND ‘ADJUSTED HOTEL EBITDA FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 {in foxsonc Ended December 31 O14 2013 $6833 nana eerie ped ie es lens cn inplmen sf deprila th cig ground ate exp 2.88
Slide 39: Comparable Hotels Financial Highlights, Full Year
RevPAR Revenue Adjusted Hotel EBITDA Margin ‘APPLE HOSPITALITY APPLE HOSPITALITY COMPARABLE HOTELS FINANCIAL HIGHUGHTS FOR THE YEAR EN 2014 87 8 ARG conparasie | ACTUAL YIO ACTUALYID JANUARY yop lfSS. ng "4 JANUARY 8. D(SFOSTIONS HOTELS $93 $77 $72 $94 $85 $803,896 $61,665 $50,587 $814,974 | $387.99
Slide 40: Reconciliation of Net Income to FFO and MFFO, Q1
‘APPLE HOSPITALITY THE FOLLOWING TABLE RECONCILES THE COMPANY'S GAAP NET INCOME (1OSS] TO FEO AND MFFO FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014 lin ovson) hree Months Ended March Netinae fe 43.867 § aaez oncoi soighline gov eas ensens 650 Medi lds rom opeaons
Slide 41: Reconciliation of Net Income to FFO and MFFO, Years
‘APPLE HOSPITALITY THE FOLLOWING TABLE RECONCILES THE COMPANY'S GAAP NET INCOME TO FFO AND MFFO FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Years Ended December 31 2014 2018 Depron ol ete one nea lex on ingen cf depreile Medd nds hom pean 5 25536) + 13506
Slide 42: Combined Historical Adjusted EBITDA
‘APPLE HOSPITALITY COMBINED HISTORICAL ADJUSTED EBITDA, ‘ose Host Neincone foe Orgran ‘otanton ol footie ond veloc ets, ot bn ond cher pee oo Swe B comera plored shore expo vos Hoshi TA esl ET Sv, ond Ape EI igh oe. Ne aoe os Depecaton ‘roanton ol foarte ond veloc ets, et there ond cher pee ‘Sra com
Slide 43: Comparable Hotels Operating Metrics by Region
‘APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION wot Advised Hosa ogion/Stote Ossie Average Day Rote otha ESA Felton WE 203 Ve a 20K) ve OTE 9018 ver 014 Feu Noo Cont 4 728% 749% (14s) $2499 $1147 SOR $9178 $061 268 29% Indore 2 743s Wax 67% $0277 $0001 28% $7456 Hood Fer OK he 1 71s
Slide 44: Comparable Hotels Operating Metrics by Region (Continued)
‘APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION (CONTINUED) Seal Adjted Hoel egion Sete Oceupan Average Dally Rat Rosa EBITDA wales 70 2013 Ve aoe 20 Ve OTE Ver 2014 rect Ae 1 Lex $ig291 $ie4ze 47% $r7002 450.55, 16% Calera 0 Ves $azee $1292 818 floss? 9720, py Wastngen 2% Sed79 $15
Slide 45: Comparable Hotels Operating Metrics by Chain Scale
‘APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY CHAIN SCALE Adjueed Hotel Chain Seale Average Deily Rate RevPAR EBA Fava 201 Va aore 2012 Var 2018-2019 Var 2014 sper Upscale Embszy Suite 2 833% 802% 39% $14213 $1520) BO% $195.00 $122.59 lol 23% Hon 1 74% 762% 29% $1575 $5165 34% $1220 1155
Slide 46: Management Companies
APPLE HOSPITALITY MANAGEMENT COMPANIES, 100% of Apple Hospitaliy’s portfolio operated by 3" party property managers 92% independent of brand 2 Whiietedging 24 ae tex management 3 Dimension m4 us 19% ¥ . 17 operating companies provide a Meson e * = platform for comparative analytics and 5 Moriah 10 o
Slide 47: Relationship with Apple REIT Ten, Inc.
‘APPLE HOSPITALITY RELATIONSHIP WITH APPLE REIT TEN, INC. APPLE HOSPITALITY REIT, INC. Reimburses G&A Provides management costs and pays services advisory fee APPLE REIT TEN, INC. 53 hotels 6,762 guestrooms 3 hotels under contract 441 guestrooms (anticipated closing before year end 2015)
Slide 48: Hospitality Company Ticker Symbols
‘APPLE HOSPITALITY HOSPITALITY COMPANY TICKER SYMBOLS ‘COMPANY NAME TICKER SYMBOL ‘Apple Hospitaliy REI, In APE [Ashford Hozpitaliy Prime, Inc. AHP ‘Ashford Hospitality Tu In. AKT Chatham Lodging Tost cwr Dicrond Rock Hoepitalty, Co RH FolCor Lodging Trust Incorporated FcH Hersha Hospitality Trost u
Slide 49: Definitions
‘APPLE HOSPITALITY DEFINITIONS
Slide 50: Definitions (Continued)
‘APPLE HOSPITALITY DEFINITIONS (CONTINUED)
Slide 51: Trademark Information
‘APPLE HOSPITALITY TRADEMARK INFORMATION rt ld Inn® by Marrion ield Inn & Suites® by Marrioh®,” “Marrion® Hot Resorts,” "Ren Re by Mor pringhil rf nd “TownePh tee k "ore each Sr Marriot nal, In ° All to "Marion rioiXD International, In i liotes ons : tor 5 info Marriot le ether relating lo the holel
Slide 52: Contact Information
‘APPLE HOSPITALITY CONTACT INFORMATION 814 East Main Street Richmond, VA 23219 (804) 344-8121 yowow.opplehospitalityreit.com
Apple Hospitality REIT — Investor Presentation (May 2015) on 6ix