Apple Hospitality Reit, Inc. · NYSE:APLE
Apple Hospitality Reit — Investor Presentation (June 2015)
43 slides from Apple Hospitality Reit's investor presentation, Jun 8, 2015
Slide 1: Pin ho :
Pin ho : Pity Way
Slide 2: Forward Looking Statements
APPLE HOSPITALITY FORWARD LOOKING STATEMENTS
Slide 3: Portfolio Highlights
s | APPLE HOSPITALITY REIT PORTFOLIO HIGHLIGHTS 32 store 8 3 MSAs 173 hore 22,008 saan A YI'S.. Average Effective Age ] ‘ 8x Net Debt/Adjusted EBITDA
Slide 4: High Quality Portfolio
APPLE HOSPITALITY HIGH QUALITY PORTFOLIO
Slide 5: Concentrated Brand Ownership
4 (> ApPLE HosPITALITY RENT CONCENTRATED BRAND OWNERSHIP @® Hilton D,\ Ny Upscale Upper Upscale Upper Midscale 53%, Ranked among top five largest owners for both Hilton® and Marriott® Strong Loyalty Programs Effective Brand Segmentation Strong Consumer Awareness Consistent Quality and Service Worldw
Slide 6: Leading Upscale Player
APPLE HOSPITALITY LEADING UPSCALE PLAYER NUMBER OF UPSCALE ROO 15,520 15,112 Largest select service public lodging REIT with a sharp focus on upscale hotels 8,154 5,894 5,447 3,704 704 9-779 1,498 1,296 1,130 1,049 1,016 794 757 625 417 APE RU INN CLOT AHT,, HT © XHR HST AHP DRH HO SHO CHSP BEE, PEB
Slide 7: Geographic Diversity
GEOGRAPHIC DIVERSITY APPLE HOSPITALITY ciplined strates ay of investing in urban, high end suburban, and developing markets where diverse demand rs and proximity to drive st formance
Slide 8: Portfolio "Fine Tuning"
APPLE HOSPITALITY PORTFOLIO “FINE TUNING” $94 iW $72 10 2014 RevPAR Average Age” Properties Sold") m APLE Portfolio Properties Sold" wm APLE Portfolio é 127 P 9% Average Effective Age“! Average Number of Rooms Properties Sold") @ APLE Portfolio” m Properties Sold!" @ APLE Portfolio” om es end hl uci
Slide 9: High Quality Operators
APPLE HOSPITALITY HIGH QUALITY OPERATORS | 00% of Apple Hospitality’s portfolio operated by © 3rd party property managers 92% "of 34 party property managers are = independent of brand management ] 7 award winning operating companies provide a platform for comparative analytics and shared best practi
Slide 10: Well Maintained Portfolio
APPLE HOSPITALITY WELL MAINTAINED PORTFOLIO Quality Portfolio with Average Effective Age of 4 Years. the Result of Consistent Reinvestment on Yeon 3% $3340 $2744 $220.8 si713 sii65 $1983 p10 2011” 2012” 2018.” OTA” 2015 ‘Yeo since but rot enovted Cumulative CopEx ($ in ions) Leads to Traveler Satisf
Slide 11: Efficient Hotel Operations
Ss | APPLE HOSPITALITY REIT EFFICIENT HOTEL OPERATIONS Adjusted Hotel EBITDA Margin Une Use 42% ay 38% 38% = 36% 35% 39% som ou Waa cit ARE «HT RUS INN. IMO EBS SHO. ORH CH HST. aE Emphasis on higher op
Slide 12: Best in Class Margins
APPLE HOSPITALITY BEST IN CLASS MARGINS Overhead % of TEV (by Company) a oper Upscole mes APE me Upscale wy Tote ‘vg. oiling APE: 0.68% 10% 08% ogi 0% 073% 040% “058m OS7E—OS7E BR 08% * 7" mf 049% 048% ae, 0% 02% 0.0% INN CH HT ft SHO (DRH CITB BEE AE. HST Ho Yar) $19 $34 $25 $57 $B $39 $17 $4 $9 Ga
Slide 13: Flexible Balance Sheet
APPLE HOSPITALITY FLEXIBLE BALANCE SHEET 1.8X Net Debt / Adjusted EBITDA Toany] [eee] [omen Fo 18 roeetooe | | disor | | Km athe Kou ba20 eesme | | tollsa% toe 7 Far, els $215 16.6% We 6 ‘UNENCUMBERED PORTFOLIO siz 127 Hotels $90 15,973 key * Mortgage Debt 83.4% 2015 2016 2017 2018 2019 2020 2021 20
Slide 14: Comparable Hotels Financial Highlights
APPLE HOSPITALITY COMPARABLE HOTELS FINANCIAL HIGHLIGHTS {$ in housonds except RevPAR) 2015 2014 Ginee 2014 2013 egies RevPAR $94 $87 B% $94 $88 7% Revenue $203,575 $186,879 9% $814,974 $764,036 7% Adjusted Hotel $74,647 $64,687 15% $302,688 $276,790 9% EBITDA Adjusted Hotel 36.7% 34.6% 210 bps 37.1
Slide 15: 2015 Guidance
2015 GUIDANCE low High Comparable Hotels RevPAR Growth 5% 7% Adjusted EBITDA $310 million $330 million
Slide 16: Management Experience
APPLE HOSPITALITY MANAGEMENT EXPERIENCE 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 over 400 hotels Managed over $550 million in CapEx and renov
Slide 17: Robust Industry Fundamentals
APPLE HOSPITALITY ROBUST INDUSTRY FUNDAMENTALS, ‘+ Economy has continved to expond POSITIVE ECONOMIC *+ Corporate prohis are projected to rise over the nex! five years INDICATORS ‘+ Higher discretionary income and business budgets drive travel spending ‘© Supply growth remoins low by historical stan
Slide 18: Strong Expected RevPAR Growth
APPLE HOSPITALITY STRONG EXPECTED REVPAR GROWTH Change in Industry RevPAR (%) 15% 10% 59 Months + Aue02 Novos Maras Supply growth KShsew See imei remains below long- term average >= (am an-90 Ape-96 aveo2 Nov-08 Maras ADR is expected to drive RevPAR growth into foreseeable future
Slide 19: 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
Slide 20: REIT
APPLE HOSPITALITY REIT
Slide 21: 2015 Dispositions
APPLE HOSPITALITY 2015 Dispositions City Stote Brand Rooms Huntsville AL TownePlace Suites 8 Trey aL Courtyard 90 Trey aL Homplon Ian 22 Rogers aR Foil Inn & Suites 99 Pueblo co Hompton inn & Suites 1 Post Wentworth cA Hompton Ian 106 Bowling Green Ky Homplon Ian 130 Alexanchio w Couryard %6 West Mo
Slide 22: Consolidated Balance Sheets
APPLE HOSPITALITY ‘APPLE HOSPITALITY REIT, INC. CONSOLIDATED BALANCE SHEETS (in howard, cep sbore dla crowded Assets i] Inveleat in ral et, net of ecimuated depreciation of $327,243 and $296,559, rexpecvly $9,402,099 0 ecuivalets 46,905 sh ~ five ures, ond other escrows 90,694 pesty monogers, nt 39.
Slide 23: Consolidated Statements of Operations
APPLE HOSPITALITY ‘APPLE HOSPITALITY REIT, INC. CONSOUDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (co) (ir thoardy exp per share doo) Operating income fs 36297 (p0su7) stander enpese, re p73, 524, (Ganon tl of eal nn Vee Income bor neo as 4479 (e4or ot expt (512) al Nencome flo) $
Slide 24: Consolidated Balance Sheets
APPLE HOSPITALITY APPLE HOSPITALITY REIT, INC. CONSOLIDATED BALANCE SHEETS Te thossonds, except shore dee) Assets Investment in real estate, net of accumulated deprecation (of $296,559 and $200,754, rspectvely Assets held Cash ond cath equivalens Resticied cosh - frre, fixtures, ond ohher excrows Do
Slide 25: Consolidated Statements of Operations
APPLE HOSPITALITY ‘APPLE HOSPITALITY REIT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME Finthowonds, excep pe share des) puting cone ivi ocme hom notes ° Incr bee come an ance 9880 ee 1.969) 1. lame rom conning operons ass enone Netocone sean suis $7578 Sos Pare 575% From dong
Slide 26: Reconciliation of Net Income to EBITDA, 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 2014 Tr hounds 2015 2014 Netincoe fo) $43,967 $ 194.462) Avorn ol ovorble ond inlovorte eats, et oa Ire ond other
Slide 27: Comparable Hotels Financial Highlights
APPLE HOSPITALITY APPLE HOSPITALITY COMPARABLE HOTELS FINANCIAL HIGHUGHTS (in usar ence RowPAR) THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, 20 MARCH 31, 2014 ART & AR ' LESS: COMPARABLE JANUARY & ESS: COMPARABLE ACTUALYTD —oyspOSTIONS —-HOTEIS ACTUALYTO "FEBRUARY DISPOSITIONS HOTEIS-—CHANGE Rewa
Slide 28: Reconciliation of Net Income to EBITDA, Adjusted EBITDA (Annual)
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 Fr howard Years Ended December 31 2013, Netincone $6833 $ 115222 lana 54927 infovorese leases, net 1,056 (a) Ineret and o
Slide 29: Comparable Hotels Financial Highlights (Annual)
ACTUAL YTD RevPAR $93 Revenve $803,896 Adjusted Hotel ¢ 309 553 gama $303,553 Margin APPLE HOSPITALITY APPLE HOSPITALITY COMPARABLE HOTELS FINANCIAL HIGHUGHTS {in ousonds excl RevPAR) FOR THE YEAR ENDED 4 ART & ARB JANUARY & FEBRUARY $77 $61,665, $17,415 Less DISPOSITIONS $ 50,587 $18,280 COMPARABLE
Slide 30: Reconciliation of Net Income to FFO and MFFO (Q1)
APPLE HOSPITALITY THE FOLLOWING TABLE RECONCILES THE COMPANY'S GAAP NET INCOME (LOSS) TO FFO AND MFFO FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 201.4 Depreciation ol ele owned Coin on sl fa eote Avorn ol ovorble ond inlovore eats, et Funds oss om operations Series 8 comverbie prefered shre expen
Slide 31: Reconciliation of Net Income to FFO and MFFO (Annual)
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 2013 Neineone $ 115222 Depreciation of el ele owned 12346 54927 Jos on inci of depreciable papiieidieing 10.788 Coin on cle of a
Slide 32: Comparable Hotels Operating Metrics by Region
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION tof Adjusted Hole Region/Stote Sccupane Average Daly Rote RovPAR EBITDA FolHows TROIS G1 2014 Ver 1015 Gi 201d Ver GI 01S 1 201A Va 312015 Foal North Cental 4 75% 636% 61% $125.57 $1215 37% — $8474 7.04 10.0% 24% 2 717% PAR 45% $90.35 $
Slide 33: Comparable Hotels Operating Metrics by Region (Continued)
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION (CONTINUED) wot Adjusted Hotel Region/State Oceypane Average Daily Rote RevPAR. EBITDA Ta hacs —GTATSG120M4 Ver OTIS ar 2014 Var OT FOS at 201 Ver 1 2015 B16% B69 SSR 15652 $4825 54% lars $12797 Ore 0.9 19 02% 775% BER $1369 $12855 GSR
Slide 34: Comparable Hotels Operating Metrics by Chain Scale
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY CHAIN SCALE Seo Adjusted Hotel Chain Seale Qceuper ‘Average Daly Role evPAR EBITDA FolHows GVZO01S_G12014 Ver GI2OIS QI2014_Var___GIAOIS 12014 ver 01 2015 Upper Upscale Ernboisy Sues 2 MBX 846% GIR $1528 SALAS 8.1% $2957 S1I979 82% 20% Hien 1
Slide 35: Comparable Hotels Operating Metrics by Location
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY LOCATION tof Adjusted Hotel location Qeeupn Average Daly Rate RevPaR EBITDA. Aoltionls Q12015_@12014 _Ver___@12015_@I2014__ver__a 201512014 ver__ a 2015 Airgent 12 856% BOF «ON. —«$19572 $1284B 54% «FIST $103.48 120% 87% Ineralle 7 728% 708% 2
Slide 36: Comparable Hotels Operating Metrics by Region (TTM)
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION Traiing 12 Months as of March 31, 201.5 ‘of Adjusted Region/Siote HofHoias __ Occupon Average Daly Rate RevPAR Hotel EMTDA, Fea Novh Cantar iis 4 747% $125.39, $9088 29% Indione 2 756% $104.11 $7508 09% Michigan 1 758% $12.11 $9157 o7%
Slide 37: Comparable Hotels Operating Metrics by Region (Continued)
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION (CONTINUED) Trailing 12 Months as of March 31, 2015 of Adjusted Region/Stato oftiolels Occupancy Average Daily Rate ___—RevPAR__ Hotel EBITDA Peete Notte 1 870% $i9saz $149.95 16% Colonia 1° 309% 12491 $109.07 125%. Weshinglon 4 848% si
Slide 38: Comparable Hotels Operating Metrics by Chain Scale (TTM)
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY CHAIN SCALE Trolling 12 Mons ot of Merch 31, 2015 % of Adjusted Chain Seale HofHotels Occupancy Average Dolly Rote ___RevPAR__Hotel EBITDA Upper Upscole| Enbossy Ses 2 a39% $6499 sia7.ae 22% Hiton 1 769% $158.97 $125.40 14% Merion a 054% gia2.
Slide 39: Comparable Hotels Operating Metrics by Location (TTM)
APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY LOCATION Trolling 12 Months ot of March 31, 2015, of Adjusted Location HofHotel Occupancy Average Daly Rote RevPAR Hotel EBITDA Airport 12 82.4% $119.01 $98.09 62% Inerstone 7 775% $110.23, $05.44 35% Resor 6 ais $12584 — $10201 43% Small Meto
Slide 40: Definitions
APPLE HOSPITALITY DEFINITIONS
Slide 41: Definitions (Continued)
APPLE HOSPITALITY DEFINITIONS (CONTINUED)
Slide 42: Trademark Information
APPLE HOSPITALITY TRADEMARK INFORMATION
Slide 43: Contact Information
APPLE HOSPITALITY CONTACT INFORMATION 814 East Main Street Richmond, VA 23219 (804) 344.8121 www.applehospitalityreit.com
Apple Hospitality REIT — Investor Presentation (June 2015) on 6ix