Apple Hospitality Reit, Inc. · NYSE:APLE
Apple Hospitality Reit — Investor Presentation (November 2020)
29 slides from Apple Hospitality Reit's investor presentation, Nov 17, 2020
Slide 1: Investor Presentation November 2020
INVESTOR PRESENTATION NOVEMBER 2020 • NYSE: APLE Exhibit 99.1
Slide 2: Forward-looking statements
COVER PHOTOS: HAMPTON INN & SUITES AND HOME2 SUITES, CAPE CANAVERAL, FL; HOMEWOOD SUITES, MIAMI, FL; SPRINGHILL SUITES, BURBANK, CA; COURTYARD, KIRKLAND, WA HILTON GARDEN INN, NASHVILLE, TN Certain statements made in this presentation are forward-looking statements, including statements regarding th
Slide 3: Company Profile & Proven Investment Strategy
COMPANY PROFILE & PROVEN INVESTMENT STRATEGY Note: Hotel portfolio statistics as of November 5, 2020. Market categorization based on STR designation. Average Effective Age represents years since hotels were built or last renovated. Average actual age of hotels is 14 years. The TripAdvisor® rating is
Slide 4: Values and Mission
VALUES Hospitality – We are thoughtful in our interactions with others and know that strong, caring relationships are the core of our industry. Resolve – We are passionate about the work we do and are steadfast in our commitment to our shareholders. Excellence – We are driven to succeed and improve
Slide 5: Key Takeaways
KEY TAKEAWAYS CASH FLOW POSITIVE BEGINNING IN JULY 2020 All of the Company’s 235 hotels are open and receiving reservations Efficient operating model of rooms-focused hotels allowed for swift operational changes and cost mitigation Retained hotel sales staff and enhanced sales strategy to focus on c
Slide 6: Cash Flow Positive Beginning in July 2020
CASH FLOW POSITIVE BEGINNING IN JULY 2020 All hotels open and receiving reservations Positive Adjusted Hotel EBITDA beginning in May 2020 Cash flow positive beginning in July 2020 Occupancy Achieved corporate-level breakeven HAMPTON INN & SUITES, BOISE, ID HAMPTON INN & SUITES, ATLANTA, GA SPRINGHIL
Slide 7: Improvements in Occupancy
IMPROVEMENTS IN OCCUPANCY Week ended Source: Data provided by STR for hotels owned by the Company for the periods noted, including all rooms available for consolidated hotels, and may differ from actual results achieved. Consolidated hotels included in 0% - 15% occupancy tier. % of Hotels by Occupan
Slide 8: Adjusted Hotel EBITDA Performance
ADJUSTED HOTEL EBITDA PERFORMANCE SPRINGHILL SUITES, ORLANDO, FL HAMPTON INN, CYPRESS, CA COURTYARD, CHANDLER, AZ Sequential improvements in RevPAR throughout Q2 and Q3 Positive Adjusted Hotel EBITDA(1) beginning in May Q2 & Q3 2020 Adjusted Hotel EBITDA Performance ($ in thousands, except RevPAR) (
Slide 9: Q3 2020 EBITDA Outperformance
Apple Hospitality’s efficient operating model resulted in leading third quarter EBITDA performance Q3 2020 EBITDA OUTPERFORMANCE HAMPTON INN & SUITES, PHOENIX, AZ Source: Company filings. Assumptions vary by company. (1) Explanations of and reconciliations to net income (loss) determined in accordan
Slide 10: Portfolio Positioned for Outperformance
PORTFOLIO POSITIONED FOR OUTPERFORMANCE Brand Type(1) % of APLE Portfolio Extended Stay 33% Suite Product 23% Other Select Service 42% Full Service 2% Not Dependent on Group Business Portfolio Diversified Across Location Types with Limited Exposure to Urban City Centers Rooms-Focused Portfolio with
Slide 11: Broad Consumer Appeal
Business Leisure Government Military Construction Disaster Recovery Health Care Education Athletics First Responders Insurance Social Rooms-focused hotels with industry-leading brands have broad consumer appeal BROAD CONSUMER APPEAL Note: Hotel portfolio statistics as of November 5, 2020. Broad mix
Slide 12: Industry-Leading Operators
INDUSTRY-LEADING OPERATORS Analytical, data-driven asset management to maximize property-level performance Scale to negotiate attractive national contracts Strategic revenue management to optimize mix of business and maximize bottom-line performance Strong regional and national third-party operators
Slide 13: Broad Geographic Diversification
BROAD GEOGRAPHIC DIVERSIFICATION Broad geographic diversification provides exposure to wide variety of demand generators Nearly all markets benefit from drive-to demand Low dependence on inbound international travel with majority of hotels located outside of gateway markets Diversified Across 87 Mar
Slide 14: Well-Maintained Portfolio
WELL-MAINTAINED PORTFOLIO HAMPTON INN & SUITES, MEMPHIS, TN SPRINGHILL SUITES, ALEXANDRIA, VA HOMEWOOD SUITES, AUSTIN, TX The TripAdvisor® rating is based on lifetime scores for the Apple Hospitality portfolio of hotels through September 30, 2020. Average Effective Age represents years since hotels
Slide 15: Strong Balance Sheet & Liquidity Position
Debt Composition(1) STRONG BALANCE SHEET & LIQUIDITY POSITION Based on balances and hotels owned as of September 30, 2020, excluding unamortized fair value adjustment of assumed debt and unamortized debt issuance costs. Excludes yearly amortization. Interest rate includes effect of interest rate swa
Slide 16: Amendments to Unsecured Credit Facilities Preserve Liquidity
ENHANCE FLEXIBILITY Up to $300 million remaining acquisitions permitted, including: - $50 million Madison HGI (Q1 2021) - $50 million incremental acquisitions funded with proceeds from dispositions - $50 million incremental acquisitions from equity raise (assuming revolver balance does not exceed $2
Slide 17: 2020 Portfolio Activity & Pending Transactions
2020 PORTFOLIO ACTIVITY & PENDING TRANSACTIONS Note: As of November 5, 2020. These two hotels comprise a dual-branded property at one location. Contract entered into prior to 2020. This hotel is under development. Contract entered into prior to 2020. Number of rooms shown are expected number of room
Slide 18: Apple REIT Companies Transaction History
Apple REIT Companies Transaction History 1999 – October 2020 438 TOTAL HOTELS ACQUIRED 203 TOTAL HOTELS SOLD 235 CURRENT PORTFOLIO 4 REITS SOLD IN 3 TRANSACTIONS 4 REITS MERGED TO FORM CURRENT APLE Note: Hotel transactions by the various Apple REIT Companies since the first hospitality REIT in 1999.
Slide 19: Proven Investment Strategy
PROVEN INVESTMENT STRATEGY Concentrate on Upscale, rooms-focused hotels Efficient operating model of rooms-focused hotels has historically yielded high margins Low dependence on large group demand strengthens position in current environment Scale ownership minimizes relative G&A load and provides fi
Slide 20: ESG Initiatives
ESG INITIATIVES COURTYARD, CAROLINA BEACH, NC
Slide 21: Sustainability Initiatives
SUSTAINABILITY INITIATIVES Apple Hospitality is committed to enhancing and incorporating sustainability opportunities into our investment and asset management strategies, with a focus on minimizing our environmental impact through reductions in energy and water consumption and through improvements i
Slide 22: Social Responsibility
SOCIAL RESPONSIBILITY Apple Hospitality REIT has always been firmly committed to strengthening communities through charitable giving, by volunteering our time and talents, and by participating in the many philanthropic programs important to our employees and leaders within our industry, including ou
Slide 23: Board of Directors with Effective Experience
Board of Directors with Effective Experience Glade M. Knight – Executive Chairman Founder, Apple Hospitality REIT; Former Chairman/CEO, Cornerstone Realty NYSE:TCR Justin G. Knight – Director Chief Executive Officer, Apple Hospitality REIT Kristian M. Gathright – Director Former Executive Vice Presi
Slide 24: Appendix
APPENDIX HAMPTON INN & SUITES, ROSEMONT, IL
Slide 25: Reconciliation of Net Income (Loss) to EBITDA and Adjusted Hotel EBITDA
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, EBITDAre, ADJUSTED EBITDAre AND ADJUSTED HOTEL EBITDA THE FOLLOWING TABLE RECONCILES THE COMPANY’S GAAP NET INCOME (LOSS) TO EBITDA, EBITDAre, ADJUSTED EBITDAre AND ADJUSTED HOTEL EBITDA ON A QUARTERLY BASIS FROM DECEMBER 31, 2018 THROUGH SEPTEMBER 30,
Slide 26: Definitions
DEFINITIONS HYATT PLACE, JACKSONVILLE, FL Non-GAAP Financial Measures The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its operating performance: Funds from Operations (“FFO”); Modified FFO (“MFFO”); Earnings Before Interest, Income
Slide 27: Definitions Continued
DEFINITIONS CONTINUED RESIDENCE INN, BURBANK, CA FFO and MFFO The Company calculates and presents FFO in accordance with standards established by Nareit, which defines FFO as net income (loss) (computed in accordance with generally accepted accounting principles (“GAAP”)), excluding gains and losses
Slide 28: Trademark Information
TRADEMARK INFORMATION “Courtyard by Marriott®,” “Fairfield by Marriott®,” “Fairfield Inn by Marriott®,” “Fairfield Inn & Suites by Marriott®,” “Marriott® Hotels,” “Residence Inn by Marriott®,” “SpringHill Suites by Marriott®,” and “TownePlace Suites by Marriott®” are each a registered trademark of M
Slide 29: Contact Information
CONTACT INFORMATION 814 East Main Street Richmond, VA 23219 (804) 344-8121 info@applehospitalityreit.com www.applehospitalityreit.com COURTYARD, RICHMOND, VA
Apple Hospitality REIT — Investor Presentation (November 2020) on 6ix