Apple Hospitality Reit, Inc. · NYSE:APLE
Apple Hospitality Reit — Investor Presentation (November 2015)
41 slides from Apple Hospitality Reit's investor presentation, Nov 9, 2015
Slide 1: Apple Hospitality
APPLE HOSPITALITY Ue | | ] ;
Slide 2: Forward Looking Statements
APPLE HOSPITALITY FORWARD LOOKING STATEMENTS
Slide 3: Company Highlights
©) rertenosrraury COMPANY HIGHLIGHTS 7) 83 msas 179 Hotels 22 GED cuesincems A yrs. Average Effective Age M3 OX Net Debt/Adiusted EBITDA $3.4 Billion Equity Market Cap
Slide 4: High Quality Portfolio
PLE HOSPITALITY REIT 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 |3 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 x : PHILTON 3 Ox Mrebrondleading steely Concentateon Pursuebrosd) | Partnerwiththe | enhance | FOMMESINGSSS'O snag a srong, Upeeal roms | geographic |, bestbrandeinthat | performance absh and | ile balance focused product diversification category cy a competitiv
Slide 7: Why Rooms Focused Product?
APPLE HOSPITALITY WHY ROOMS FOCUSED PRODUCT? Simple Efficient Operating Broad Appeal Model 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
EFFICIENT HOTEL OPERATIONS YTD 9/30/15 Hotel EBITDA Margin and RevPAR Comparison a 45% Arle Hosiliy 28% 28% $263 $197 $208 537, CLOT APLE, HT INN ORL. LHO.-PEBOSHO.| «RH FCH HST BEE.
Slide 9: Geographic Diversity
HOSPITALITY GEOGRAPHIC DIVERSITY Adjusted Hotel EBITDA contribution by market type Urban Disciplined strategy 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® = HILTON WORLDWIDE 46%, MARRIOTT 5A%, Hilton
Slide 11: Why Marriott & Hilton?
APPLE HOSPITALITY WHY MARRIOTT & HILTON? RevPAR Premiums outperform comparable Global Distribution hotels across North America hore than 8,500 hotels Institutional Beall werldwide with locations in foster strong resdle market more than 80 countries and financing flexibility and terfloties creates st
Slide 12: Benefits of Concentrated Brand Strategy
4 APPLE HOSPITALITY BENEFITS OF CONCENTRATED BRAND STRATEGY One of the largest owners of Expertise Hilton® & Morriot® 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 Hitton® B 2 Hampion Inn by Hiton® and Hampton Inn & Suites by Hiton® 52 36 Hikon® 1 1 Hilton Garden Inn® 58 41 Home2 Suites by Hilton® 5 5 Homewood Suites by Hilton® 61 33 Courtyard by Marriott® 62 39 Foirfield Inn by Marriott
Slide 14: High Quality Operators
APPLE HOSPITALITY HIGH QUALITY OPERATORS, 1 00% portfolio operated by 3 party property managers 93% of 34 party property management contracts are 0" independent of brand management 20 award winning operating companies provide a platform for comparative analytics and shared best practices 25% average
Slide 15: Well Maintained Portfolio
APPLE HOSPITALITY WELL MAINTAINED PORTFOLIO Quality Portfolio with Average Effective Age of 4 Years... the Result of Consistent Reinvestment $328 $273 gus 2010 2011 «2012-2013. «20142015 ‘Yoors since built or lost renovated ‘Cumulative CapEx ($ in millions) Leads to Traveler Satisfaction Outperforma
Slide 16: Portfolio Fine Tuning
APPLE HOSPITALITY PORTFOLIO “FINE TUNING” $108 13 $94 n $69 7 2014 RevPAR Average Age" 1 Properties Sold'" m APLE Portfolio m Acquisitions" a Properties Sold!" m APLE Portfolio” m Acquisitions! 150 & 128 = = % Average Effective Age! Average Number of Rooms 1m Properties Sold” m APLE Portfolio m Acqu
Slide 17: Flexible Balance Sheet
APPLE HOSPITALITY FLEXIBLE BALANCE SHEET 3.0X Net Debt / Adjusted EBITDA Debt Composition (!) Term Loan 42% UNENCUMBERED PORTFOLIO 137 Hotels $233 17,477 keys $7 Mortgage Debt $92 48.0% $76 sis 2015 2016 2017 2018 2019 2020 2021 2922 Low debt and staggered maturities facilitate agile balance shee! s
Slide 18: Strong Industry Fundamentals
APPLE HOSPITALITY STRONG INDUSTRY FUNDAMENTALS US Hotel Forecast % Change vs. Prior Year a | 2 STR PKF =PwC STR PKF = PwC PKF Supply Tes | rs [ee | 1s | es | ee | ae Demand AES | GEE | oes | aes | Ae | ies | se RevPAR 6.8% 7.2% 6.9% 6.0% 6.3% 5.9% 5.5%
Slide 19: 2015 Guidance
2015 GUIDANCE low High Comparable Hotels RevPAR Growth 5% 7% Adjusted EBITDA $310 million $330 million De conpy bet é
Slide 20: Comparable Hotels Financial Highlights
APPLE HOSPITALITY COMPARABLE HOTELS FINANCIAL HIGHLIGHTS {$ in thousonds except RevPAR}) Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 oitee 2015 2014 ole RevPaR $107.62 $101.11 6.4% $103.49 $96.99 67% Revenue $244,107 $226,853 7.6% $699,717 $648,822 7.8% Adjusted Hotel
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 contacts APPLE HOSPITALITY Structured to Reduce Risk E
Slide 22: Appendix
PPLE HOSPITALITY REIT APPENDIX
Slide 23: 2015 Dispositions
APPLE HOSPITALITY 2015 Dispositions City State Brond Dote Sold Rooms Pinte a TownePlace Soles 2/26/2015 Bs Troy A Courtyard 2/26/2015 °0 Troy al Hempton fn 2/26/2015 8 Rogers aR Folfiad on & Suites 2/26/2015 Punbla co Hampon ln & Suites 2/26/2015 81 Pont Wenweth ca Hompton In 226/205 108 Bowing Gree
Slide 24: 2015 Acquisitions
APPLE HOSPITALITY 2015 Acquisitions City Stote Brond Date Acquired Room For Lauderdale a Faron on CPBPOS 158) Cypress cA Heampon lon 6729/2015 no bork cA Springhill Suites 7/18/2015 170 urbonk cA Couryord afi201s 190 Son Diego cA Courtyard ono 245 Syrocne Ny Coutyord 1o/ie/2015 102 Sycuse Ny Residen
Slide 25: Consolidated Balance Sheets
APPLE HOSPITALITY ‘APPLE HOSPITALITY REI, INC. CONSOLIDATED BALANCE SHEETS Goons en are da pc ol ch a fected depos "$390,065 and $296 59, vespocvely $ 9.651.482 $ 3.492.821 ‘sul ald for sole 195,588 Ch and cash equivalents 0 ited cosh ~ frre, Antes, and her exzrows 92526 Dus om thd porty mangers, at
Slide 26: Consolidated Statements of Operations and Comprehensive Income
APPLE HOSPITALITY "APPLE HOSPITALITY REIT, INC. ‘CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (rede oot
Slide 27: Reconciliation of GAAP Net Income to EBITDA, Adjusted EBITDA and Adjusted Hotel EBITDA
APPLE HOSPITALITY THE FOLLOWING TABLE RECONCILES THE COMPANY'S GAAP NET INCOME [LOSS] TO EBITDA, ADJUSTED EBITDA AND ‘ADJUSTED HOTEL EBITDA FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014 Net income (ss) Depreciation ‘Amanization of favorable ond unfavorable leases, net Interest and
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 NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014 [Uno thousand Thvee Mo Nine Months Ende a plomber 30, 2014 2015 Net income (ls) $ 46.968 $35,162 $135,080 $ (15,501) Deprecition of re
Slide 29: Comparable Hotels Operating Metrics and Statistical Data
APPLE HOSPITALITY "APPLE HOSPITALITY REIT, INC ‘COMPARABLE HOTELS OPERATING METRICS AND STATISTICAL DATA, {Uncualite) [in thousands except statistical dato} 5 $ wwors $ sr0s 798 Ted peg gree asys7 __in94ss— 538 a7a08 nd STOR $730 $ eae s mae + woe $137 $2060 $n $2466 5 ‘Reconciliation ko Acti Basle
Slide 30: Comparable Hotels Operating Metrics and Statistical Data
APPLE HOSPITALITY "APPLE HOSPITALITY REIT, INC ‘COMPARABLE HOTELS OPERATING METRICS AND STATISTICAL DATA {Unaudited} [in thousands except statistical dato} 7 Wim $ worl § mone § W798 $ WARIO § amos ‘mEz01 Ofer rwan v7soo 19713 a say__1928 m$%0__20,128 19906 woe $ inns $ tas42 § 1m660 $ Ima $$ WA $ I
Slide 31: Comparable Hotels Operating Metrics by Region, Three Months
APPLE HOSPITALITY ‘COMPARABLE HOTELS OPERATING METRICS BY REGION THREE MONTHS ENDED SEPTEMBER 30 [Uncuelited} Sef Adjusted Hotel Region Sete ceypon verge Daly Rte Bean eBIIDA 7 Howls 92015 G92014 Choe 3.2015 _G9.2014 Chow 1222015 22014 %Croge G2 2015 Tinos 4 643% 948% ous $1869 $1260 638 $1516 $i0s7
Slide 32: Comparable Hotels Operating Metrics by Region, Three Months (Continued)
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION THREE MONTHS ENDED SEPTEMBER 30 {Unaudited} (CONTINUED) ol Adjsed Host agion/Stte cep Average Dally Rote Rota BIA, 73 Howls @2.2015 622014 % Cronge G9 2015 _G22014 % Change 292015 Ga2014 %Chonge 92015 pase ‘ska O1Se 949% Bae $247.7 $253
Slide 33: Comparable Hotels Operating Metrics by Region, Nine Months
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION NINE MONTHS ENDED SEPTEMBER 30 [Uncudited) Sel Adel oie agion/Stte Oceupon Average Daly Rote Rota EBIIDA rar Mosss yb 2015 1b 2014 yp v102015 _VI02014 xchange 102015 1D 2014 x Ciongs v0 2015 4 778% 757% 2am fttn2s—iza7a bax sores $o437
Slide 34: Comparable Hotels Operating Metrics by Region, Nine Months (Continued)
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION NINE MONTHS ENDED SEPTEMBER 30 {Unaudited} (CONTINUED) % of Adjusted He agion/Stte Cexupan Avec Daly te ResPAR SIDA 7 erie "Aes 1 a7ay 903% Bae $835 $2412 70% si90ss fiatse 3.5% 1% 2 bask 26k 22H flags $3474 GB gray $niat 32% Ve 4728 as
Slide 35: Comparable Hotels Operating Metrics by Chain Scale, Three Months
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY CHAIN SCALE THREE MONTHS ENDED SEPTEMBER 30 [Uncudited} wot Adsed Hos Chain Scala Cecupant Average Dally Rate BevPAR SIDA Couto 2 769% 779% (1a siaire $19628 59% sino $108.17 aoe 87% ites Gosden 30 08% B0a% OM $1290 12228 54 Siok $9613 70% Hon
Slide 36: Comparable Hotels Operating Metrics by Chain Scale, Nine Months
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY CHAIN SCALE NINE MONTHS ENDED SEPTEMBER 30 {Unaudited} (CONTINUED) wot Adsed Hos Chain Scala Oeeapene Average Dally Ret Reh SIDA Couto 32 750% 748% 02% = $13770 $1031 57% $1022 $9750 59% 88 ili Gordes 30 792% BIS Lae 1760 BIL? Sas $1010] $9452
Slide 37: Management Companies
APPLE HOSPITALITY MANAGEMENT COMPANIES. TOP 10 APPLE HOSPITALITY OPERATORS. oll # of Seo” Propet a 2 16% 2 Dimension 2 3 White lodging a 4 Wess 15 ce sz 5 Moriot 10 6 m ‘ Reymond ° se cs resting ° 5% 1% 8 lon Vetros 8 a ° Vist Hoa 5 a 0 Mekibbon 6 a 100% of Apple Hospitaliy’s portfolio operated by 3
Slide 38: Definitions
APPLE HOSPITALITY DEFINITIONS
Slide 39: Definitions (Continued)
APPLE HOSPITALITY DEFINITIONS (CONTINUED)
Slide 40: Trademark Information
APPLE HOSPITALITY TRADEMARK INFORMATION Ren Hot ; Marrion®,” on mePlace ri Morriott all the Cr Cr ploy rio he content presenk ether relating to the hotel information, opercting information, finan Marrict®’s relationship with App REIT, Inc, oF oth H® was not involved n “issuer” or "un 5” or oherwise,
Slide 41: Contact Information
APPLE HOSPITALITY CONTACT INFORMATION 814 East Main Street Richmond, VA 23219 (804) 344-8121 owew. opplehospitalityreit.com
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