Apple Hospitality Reit, Inc. · NYSE:APLE
Apple Hospitality Reit — Investor Presentation (September 2015)
41 slides from Apple Hospitality Reit's investor presentation, Sep 15, 2015
Slide 1: Investor Presentation September 2015
1 SuiTes ~—seninct Investor Presentation September 2015
Slide 2: Forward Looking Statements
APPLE HOSPITALITY FORWARD LOOKING STATEMENTS
Slide 3: Company Highlights
PPLE HOSPITALITY COMPANY HIGHLIGHTS 32 states 1 82 msds 177 Hotels B 22,782 Guestoom § A yrs. Average Effective Age 2..OX Net Debt/Adiusted EBITDA $3.4 Billion Equity Market Cap 9A% Free Float
Slide 4: High Quality Portfolio
Y APPLE HOSPITALITY HIGH QUALITY PORTFOLIO.
Slide 5: Management Team with Deep Industry Experience Over Multiple Hotel Cycles
APPLE HOSPITALITY MANAGEMENT TEAM WITH DEEP INDUSTRY EXPERIENCE OVER MULTIPLE HOTEL CYCLES + Average executive tenure with the Apple REIT Companies is more than 13 years + Established and operated 8 public hospitality REITs + Raised and invested approximately $7 billion in hotel assets + Purchased o
Slide 6: Investment Strategy
APPLE HOSPITALITY INVESTMENT STRATEGY a Concentrate on Upscale, rooms focused product Pursue broad geographic b diversification Hire brand leading ‘operators and Partner with the enhance est brands in that_ performance category through benchmarking and asset management 2.6x Strategically reinvest in
Slide 7: Why Rooms Focused Product?
APPLE HOSPITALITY WHY ROOMS FOCUSED PRODUCT? Simple Ff Broad Appeal With more than 16,000 Upscale hotel rooms, Apple Hospitality is one of the largest owners of Upscale hotel rooms in the industry.
Slide 8: Efficient Hotel Operations
APPLE HOSPITALITY EFFICIENT HOTEL OPERATIONS, YTD 6/30/15 Hotel EBITDA Margin and RevPAR Comparison —— (mm Uppe cle ny = 4% Aral Hos cioT "APE, HT INN RLY. LHO PER OXHR «SHO ~DRH HST | FCH BEE e —rovpan Higher operating margins provide a more stable cash flow stream
Slide 9: Geographic Diversity
‘APPLE HOSPITALITY GEOGRAPHIC DIVERSITY Adjusted Hotel EBITDA contribution by market type Suburban 56% Disciplined stratagy of investing in urban, high ‘end suburban, and developing markets where diverse demand generators and proximity to guest amenities drive strong, consistent performance,
Slide 10: Concentrated Brand Ownership
APPLE HOSPITALITY CONCENTRATED BRAND OWNERSHIP Ranked among top five largest owners for both Hilton and Marriott P4 HILTON NN S 10
Slide 11: Why Marriott & Hilton?
‘APPLE HOSPITALITY WHY MARRIOTT & HILTON? RevPAR Premiums select service brands outperform comparable hotels across North America mm Institutional Brofds foster strong resale market, financing flexibility and stor confidence Pramiar System Standards drive consistent quality, award MARRIOTT winning s
Slide 12: Benefits of Concentrated Brand Strategy
4 APPLE HOSPITALITY BENEFITS OF CONCENTRATED BRAND STRATEGY One of the largest owners of Expertise Hilton & Marriott Upscale hotels Unparalleled representation on Brand Advisory Boards with management serving on 7 boards Influence
Slide 13: History of Apple REIT Brand Ownership
APPLE HOSPITALITY HISTORY OF APPLE REIT BRAND OWNERSHIP Embassy Suites by Hition® 2 2 Hampton Inn by Hitton® & Hampton Inn & Suites by Hitton® 51 35 Hikon® 1 1 Hilton Garden Inn® 58 41 Home2 Suites by Hilton® 5 5 Homewood Suites by Hilton® 61 33 Courtyard® by Marrion® 61 38 Fairfield Inn@® by Marrio
Slide 14: High Quality Operators
APPLE HOSPITALITY HIGH QUALITY OPERATORS, 100% _ Potifclio operated by 3° party property managers 93% of 3:4 party property management contracts are 0" independent of brand management 19 award winning operating companies provide a platform for comparative analytics and shared best practices 5% avera
Slide 15: Well Maintained Portfolio
APPLE HOSPITALITY WELL MAINTAINED PORTFOLIO Quality Portfolio with Average Effective Age of 4 Years... the Result of Consistent Reinvestment. 94 Yoors $334.0 2010 2011 2012 201320142015 oor since bul or lat ranvoted Cumulative CopEx (in illns) Leads to Traveler Satisfaction Outperformance. © 4.20 ou
Slide 16: Portfolio Fine Tuning
APPLE HOSPITALITY PORTFOLIO “FINE TUNING” $106 13 $94 u 10 $69 2014 RevPAR Average Age™ 1m Properties Sold" m APLE Portfolio” m Acquisitions® —_m Properties Sold" m APLE Porfolid” m Acquisitions! 6 174 . 127 4 9% Average Effective Age Average Number of Rooms 1m Properties Sold! m APLE Portfolio m Ac
Slide 17: Flexible Balance Sheet
APPLE HOSPITALITY FLEXIBLE BALANCE SHEET 2.6X Net Debt / Adjusted EBITDA Term Loan Hotels: 14 $242 Rote: 6.0% $213 UNENCUMBERED) hate ot 555 PORTFOLO 131 Hotels $120 16,552 keys $0 Le ‘Mortgage Debt $2 2015 2016 2017 2018 2019 2020 20212022 Low debt and staggered maturities facilitate agile balance
Slide 18: Strong Industry Fundamentals
APPLE HOSPITALITY STRONG INDUSTRY FUNDAMENTALS US Hotel Forecast % Change vs. Prior Year STR PKF =PwC STR PKF | PwC Supply 1.2% 1.1% 1.3% 1.4% 1.8% 2.2% 2.3% Demand 2.9% 3.3% 3.3% 2.2% 2.2% 2.3% 1.6% RevPAR 6.8% 7.2% 7.0% 6.0% 6.3% 6.1% 5.5%
Slide 19: 2015 Guidance
APPLE HOSPITALITY 2015 GUIDANCE Comparable Hotels RevPAR Growth 5% % Adjusted EBITDA $310 million
Slide 20: Comparable Hotels Financial Highlights
APPLE HOSPITALITY COMPARABLE HOTELS FINANCIAL HIGHLIGHTS {$ in thousonds except RevPAR} Three Months Ended June 30, Six Months Ended June 30, 2015 2014 aan 2015 2014 unc RevPAR $107 $101 % $101 $94 %o Revenue $236,381 $221,171 7% $444,875 $411,183 8% Adjusted Hotel $94,445 $87,021 % $170,697 $153,20
Slide 21: Investment Summary
INVESTMENT SUMMARY Focused on Performance Management team with : extensive transaction and operations experience Strong regional and national operators Analytical approach to drive property level results Scale to negotiate attractive + national contracts APPLE HOSPITALITY Structured to Reduce Risk E
Slide 22: Appendix
—— — APPLE HOSPITALITY REIT APPENDIX
Slide 23: 2015 Dispositions
APPLE HOSPITALITY 2015 Dispositions City State Brond Date Sold Rooms Panto rm TownePlace Soles 2/26/2015 Bs Troy a Courtyard 2/26/2015 °0 Troy al Hempton in 2/26/2015 8 Rogers aR Folfiad on & Suites 2/26/2015 ~ Pusbla co Hampon la & Suites 2/26/2015 81 Font Wentweth ca Hompion In 2726/2015 108 owing
Slide 24: 2015 Acquisitions
APPLE HOSPITALITY 2015 Acquisitions City Stote Brond Date Acquired For Lauderdale a apon ow PRPS Cypress cA Heme Ian e729 72015 no bork cA Springhill Suites 7/18/2015 170 ubonk oA Couryord aio 190 Son Diego A Courtyard 9/015 245 Tor! a7
Slide 25: Consolidated Balance Sheets
APPLE HOSPITALITY ‘APPLE HOSPITALITY REIT, INC. CONSOUDATED BALANCE SHEETS Tevowonds, en sae da prt in elec at cf cocoa dopaciion IY 57 947 and $200 559, wap, ‘Asst ald for soe Rested eonh~ faire, fits, and oherexcrowa Dac hid poy meres, bile Credit ity Morigage debt Aecovnts payee and cher sins Tot
Slide 26: Consolidated Statements of Operations and Comprehensive Income
APPLE HOSPITALITY "APPLE HOSPITALITY REIT, INC. CONSOUDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Uren Ae hone ng hr dt etme fa ha ae ot
Slide 27: Reconciliation of GAAP Net Income to EBITDA and Adjusted Hotel EBITDA
APPLE HOSPITALITY THE FOLLOWING TABLE RECONCILES THE COMPANY'S GAAP NET INCOME [LOSS] TO EBITDA, ADJUSTED EBITDA AND ‘ADJUSTED HOTELEBITDA FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2015 AND 2014 Net income floss) $ 44,245 $43,799 $ 88,112 $ {50,663} Depreciation 31135 30754 61.854 50,313, A
Slide 28: Reconciliation of GAAP Net Income to FFO and MFFO
APPLE HOSPITALITY THE FOLLOWING TABLE RECONCILES THE COMPANY'S GAAP NET INCOME (LOSS) TO FEO AND MFFO FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2015 AND 2014 (Uno thousand Net income fou $ 4205 $43,799 $ 88.112 $ (50,663) Depreciasion of el eae cued 20,908 20,524 61.395 50,007 {Goin} loss on sale
Slide 29: Comparable Hotels Operating Metrics and Statistical Data
APPLE HOSPITALITY ‘Apple Hospitality RET, Inc Comparable Hotels Operating Metrics and Statistical Dato [Uncueliteg) (in thousands except statistical dato} $ torus $ 1OLI7 zm $ toome | taasomy i aan ee oa Einsteins (asa) as500) inorgble aorznon 13 170 m2 ‘Conpoia aol tena Fess1 “Sa oss “Sas ued STOR
Slide 30: Comparable Hotels Operating Metrics and Statistical Data (Continued)
APPLE HOSPITALITY ‘Apple Hospitality RET, Inc. Comparable Hotels Operating Metrics and Statistical Date (Continued) {Uncualiteg) fin thousands except staitical dato} 2014 Dect, 2014 Match 31,20 i Aeon went $ mag $ 17apoe $9420 $ 2toBe1§7m2Am1 $ 12600 $087 $s tyoe $s saes $ loous $593 $a Stara ‘ofl o
Slide 31: Comparable Hotels Operating Metrics by Region Three Months Ended June 30
APPLE HOSPITALITY ‘COMPARABLE HOTELS OPERATING METRICS BY REGION THREE MONTHS ENDED JUNE 30 [Uncudited) eof Adjusted Hotel Begion/Stte Occupane Average Daly ote aoeAs eBIIDA 7 x = = Howls 22015 21.2014 Chonge 2201522014 __ Change 1222014 _chonge 022015 eo 4 SLO 78a BIN $1338 § I2HOI Sa $ or 89% 30%
Slide 32: Comparable Hotels Operating Metrics by Region Three Months (Continued)
APPLE HOSPITALITY (COMPARABLE HOTELS OPERATING METRICS BY REGION THREE MONTHS ENDED JUNE 30 {Unaudited} (CONTINUED) Sot Adjusted Hot ogion/State Oczapon Average Daly Rot ResPAR SIDA 7a 3 Hols G2 2015 G27014 Charge G22015__G2014__Chonge 22015 __—G22014 Chews G2 2015. 1 Ok SeuK OTE | IBS $F BOKTI Oe f
Slide 33: Comparable Hotels Operating Metrics by Region Six Months Ended June 30
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION SIX MONTHS ENDED JUNE 30 [Uncudited} Sal Adjusted Hose agion/Stte Ocevpere Average Daly Rte RoPAR EBTDA rar = = = Hosss YI 2015 102014 Changs __v1D2015 __YID2014 __Chow yio2015 102014 _chge 2015 4 74D TIS Aah $Me IBS ATH | HAS FOND BANE
Slide 34: Comparable Hotels Operating Metrics by Region Six Months (Continued)
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION SIX MONTHS ENDED JUNE 30 {Unaudited} (CONTINUED) ‘of Adjusted Hoe agion/Stte Oevoere Average Daly Rte BoA SIDA 7 = = x erie "Aes 1 59% SOR 208 § II -§ W777 aR eNO $NA SOR 1a Collen 2 S1Sk OBR GAN F164 § 1036 BIN § «SS2 $1030 GR Ta. wain
Slide 35: Comparable Hotels Operating Metrics by Chain Scale Three Months
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY CHAIN SCALE THREE MONTHS ENDED JUNE 30 {Uncuclited) (CONTINUED) wot Adjusted Hote Chain Scala Ceeypon Average Dally Rote eva BIA, Couto 31 774% 774% OR $NA $ 12RD 08ST NOOIS aR 2H ites Gosden bn 30 629% G16% —168$ 18H $ «12237 SA 08ST 9A 7K TP
Slide 36: Comparable Hotels Operating Metrics by Chain Scale Six Months
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY CHAIN SCALE SI MONTHS ENDED JUNE 30 {Unaudited} (CONTINUED) wot Adjusted Hote Chain Scala Ceeypon Average Daly Rate eva BIA, Couto a1 722% 721% 1h $124 $2528 57H 99H CHOI 79K BH ites Gosden bn 30 764% 770% 19% $ I2HS $1204 SUS RAS RHP 7K BK Ho
Slide 37: Management Companies
APPLE HOSPITALITY MANAGEMENT COMPANIES, OP 10 APPLE HC PITALITY OPERAT 2 Dimension 2 3 White odging a 4 Wes 1s ee sz 5 Moriot 10 6 1% 6 Reymond ° se z resting ° 5% 8 lon Vennret 6 5% ° Vist Hoa 8 5 0 Mekibbon 6 sx Noe eptember 28 100% of Apple Hosptality’s portfolio operated by 3 party property mana
Slide 38: Definitions
APPLE HOSPITALITY DEFINITIONS
Slide 39: Definitions (Continued)
APPLE HOSPITALITY DEFINITIONS (CONTINUED)
Slide 40: Trademark Information
APPLE HOSPITALITY TRADEMARK INFORMATION
Slide 41: Contact Information
APPLE HOSPITALITY CONTACT INFORMATION 814 East Main Street Richmond, VA 23219 (804) 344-8121 woww.applehospitalityreit.com
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