Apple Hospitality Reit, Inc. · NYSE:APLE

Apple Hospitality Reit — Investor Presentation (May 2016)

47 slides from Apple Hospitality Reit's investor presentation, May 20, 2016

1. Slide 1: Investor Presentation May 2016

   APPLE HOSPITALITY Investor Presentation May 2016 © NYSE:APLE a | » me

2. Slide 2: Forward-Looking Statements

   APPLE HOSPITALITY FORWARD-LOOKING STATEMENTS Certain statements made in this presentation are forward-looking statements. These forward-looking statements include statements regarding our intent, belief or current expectations and are based on various assumptions. These statements involve substantia

3. Slide 3: Company Profile

   APPLE HOSPITALITY COMPANY PROFILE 32 States 83 msAs 1 79 Hotels 4 VIS. Average Effective Age 13. 1X Net Debt/ Adjusted EBITDA $3 we) Billion Equity Market Cap SpringHill Suites, Lc Nole: Statistics as of March 31, 2016. Net Debt/Adjusted EBITDA calculation based on outstanding debt less cash on hand

4. Slide 4: High Quality Portfolio

   4 APPLE HOSPITALITY REIT HIGH QUALITY PORTFOLIO 1 RESIDENICE INN PhoenixjAZ © \— 129'Keys = Cflampe it } == = gna uted COURTYARD. Burbank, CA. 190 Keys

5. 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 | 4 years * Established and operated 8 public hospitality REITs * Raised and invested approximately $7 billion in hotel assets * Purchased

6. Slide 6: Proven Investment Strategy

   APPLE HOSPITALITY PROVEN INVESTMENT STRATEGY y 0) gr 3 . ] xX MARRIOTT Hire brand leading Strategically Operators and reinvest in assets to Concentrate on Pursue broad Partner with the enhance . Maintain a strong, . establish and i Upscale, rooms geographic best brands in that performance we flexibl

7. Slide 7: Why Rooms Focused Product?

   4 APPLE HOSPITALITY WHY ROOMS FOCUSED PRODUCT? Strong Simple, Consumer Efficient Demand & 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.

8. Slide 8: Efficient Hotel Operations

   ——————— es & APPLE HOSPITALITY REIT EFFICIENT HOTEL OPERATIONS YTD 12/31/15 Hotel EBITDA Margin and RevPAR Comparison ME «(Upscale Upper Upscale EEE Apple Hospitality 43% 9) 9) 38% 38% act — 318 30% 7% $171 $144. «$170 Clot APLE HT INN RY LHO PEB SHO DRH FCH HST ——RevPAR Source: Public company filin

9. Slide 9: Geographic Diversity

   4 APPLE HOSPITALITY GEOGRAPHIC DIVERSITY dal“) Adjusted Hotel EBITDA contribution by market type Urban 23% Suburban 58% Airport 6% Interstate 3% Resort 5% Small Metro 5% Disciplined strategy of investing in urban, high end suburban, and developing markets where diverse demand generators and proximit

10. Slide 10: Concentrated Brand Ownership

    APPLE HOSPITALITY CONCENTRATED BRAND OWNERSHIP Ranked among top five largest owners for both Hilton® and Marriott® HOME] c....5 COURTYARD’ ammott P= HILTON WORLDWIDE » MARRIOTT 46%, . 54%, Upscale Qrarott (2 B Upper Midscale Upper Upscale RENAISSANCE" EMBASSY SUITES (1] Statistics are based on the n

11. Slide 11: Why Marriott & Hilton?

    APPLE HOSPITALITY WHY MARRIOTT & HILTON? RevPAR Premiums select service brands outperform comparable Global Distribution — hotels across North America approximately 9,000 hotels Institutional Brands worldwide with locations in foster strong resale market, approximately 100 countries financing flexib

12. Slide 12: Benefits of Concentrated Brand Strategy

    ——————— es & APPLE HOSPITALITY REIT BENEFITS OF CONCENTRATED BRAND STRATEGY One of the largest owners of Hilton® & Marriott® Upscale hotels 12

13. Slide 13: History of Apple REIT Brand Ownership

    APPLE HOSPITALITY HISTORY OF APPLE REIT BRAND OWNERSHIP Embassy Suites by Hilton® 2 2 Hampton Inn by Hilton® and Hampton Inn & Suites by Hilton® 52 36 Hilton® ] ] Hilton Garden Inn® 58 Al Home? Suites by Hilton® S 5 Homewood Suites by Hilton® 62 34 Courtyard by Marriott® 62 39 Fairfield Inn by Marri

14. Slide 14: High Quality Operators

    APPLE HOSPITALITY HIGH QUALITY OPERATORS ] 00% portfolio operated by 34 party property managers 93% of 34 party property management contracts are (oll) . independent of brand management 20 award winning operating companies provide a platform for comparative analytics and shared best practices PAY av

15. Slide 15: Management Contract Transformation

    4 & APPLE HOSPITALITY REIT MANAGEMENT CONTRACT TRANSFORMATION New Structure Variable Management Fee 2.5% - 3.5% of Revenues Sliding scale tied to hotel specific balanced scorecard goals/ performance c » compared to other participating hotels. N % of Operat : " Balanced Scorecard Metrics ° Gross oper

16. Slide 16: Well Maintained Portfolio

    APPLE HOSPITALITY WELL MAINTAINED PORTFOLIO Quality Portfolio with Average Effective Age of 4 Years... ..the Result of Consistent Reinvestment... 9+ Years $386 $331 $273 $219 r T T T 2010 2011 2012 2013 2014 2015 2016 Forecast Cumulative CapEx ($ in millions) Years since built or last renovated ...L

17. Slide 17: Flexible Balance Sheet

    APPLE HOSPITALITY FLEXIBLE BALANCE SHEET 3.1X Net Debt / Adjusted EBITDA DEBT MATURITY SCHEDULE !! (8 in million Term loan Hotels: 16 Hotels: 9 Rate: 2.8%!) Keys: 2,329 Keys: 1,254 Rate: 4.5% Rate: 6.0% Hotels: 8 Hotels: 2 Reva Keys: 180 Rate: 5.3% Revolver Rate: 2.3%!44 Term loan UNENCUMBERED 41% P

18. Slide 18: Positive Industry Fundamentals

    APPLE HOSPITALITY POSITIVE INDUSTRY FUNDAMENTALS US Hotel Forecast % Change vs. Prior Year CBRE CBRE CBRE Supply 17% 18%) ee | | Bae |) Bee Demand Pe ee Eee RevPAR 5.0% 5.5% 5.5% 45% 47% 3.8% 18 Source: Smith Travel Research (STR) 2016; CBRE Holels Americas Research March - May 2016 Edifion; PwC Hos

19. Slide 19: 2016 Guidance

    & APPLE HOSPITALITY REIT 2016 GUIDANCE Wil i i anh Aid (had dd de da Low High Comparable Hotels RevPAR Growth 3.5% 5.5% Adjusted EBITDA $340 million $360 million Note: The Company's achievement of the current outlook is subject to risks and uncertainties, including those disclosed in the Company's f

20. Slide 20: Comparable Hotels Financial Highlights

    APPLE HOSPITALITY COMPARABLE HOTELS FINANCIAL HIGHLIGHTS ($ in thousands except RevPAR} Three Months Ended March 31, Years Ended December 31, 2016 2015 CHARICE 2015 2014 cutee ReyPAR $98.66 $94.90 4.0% $100.59 $94.41 6.5% Revenue $224,584 $215,473 4.2% $920,212 $854,620 77% Adjusted Hotel $83,438 $7

21. Slide 21: Corporate Governance Aligns with Shareholders

    APPLE HOSPITALITY CORPORATE GOVERNANCE ALIGNS WITH SHAREHOLDERS * Audit, Compensation and Corporate Governance Committees are independent. * Regular executive sessions of independent directors. . Required resignation of an incumbent director not receiving majority of votes cast in election. * 80% of

22. Slide 22: Investment Summary

    APPLE HOSPITALITY INVESTMENT SUMMARY Focused on Performance Structured to Reduce Risk Poised f 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 contra

23. Slide 23: Proposed Transaction Overview

    APPLE HOSPITALITY PROPOSED TRANSACTION OVERVIEW = N — | Pro Forma i APPLE HOSPITALITY REIT Apple Ten Combined Company! Enterprise Value!) $4.4 billion $1.3 billion $5.7 billion Equity Market Cap!) $3.4 billion $1.1 billion $4.4 billion Hotels (as of 3/31/16} 179 55 234 Guestrooms (as of 3/31/16} 22,

24. Slide 24: Pro Forma Combined Capitalization

    APPLE HOSPITALITY REIT PRO FORMA COMBINED CAPITALIZATION Pro Forma Combined Company will have a conservative and flexible balance sheet with a pro forma Net Debt / 2016E Adjusted EBITDA of 3.0x 7 32 in thousands, except per share amounts) Pro Forma 3.0x Apple Apple REIT Transaction Combined 3.0 38 H

25. Slide 25: & APPLE HOSPITALITY REIT

    & APPLE HOSPITALITY REIT >< ay Zz. Lu | Qa (ale < = —_= = 2a\2) y \ \S\5)\8)\8) Yi \S\s\a)\ee | \ TTT. mee sanceee i: of . i. i =— — Hiltda Garden Inn, Nashville, TN — i

26. Slide 26: Company Overview

    & APPLE HOSPITALITY ! COMPANY OVERVIEW. Apple Hospitality REIT, Inc. NYSE: APLE 6.1% yield, annual rate of $1.20 per share, paid monthly 700,000 shares per day $3.5 Billion $1.0 Billion $4.5 Billion 179 hotels, exclusively Marriott® and Hilton® brands 32 states, 83 MSAs $900 Million 38.1% $59 Millio

27. Slide 27: Consolidated Balance Sheets

    APPLE HOSPITALITY APPLE HOSPITALITY REIT, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) March 31, December 31, 2016 2015 (Unaudited) Assets Investment in real estate, net of accumulated depreciation of $456,266 and $423,057, respectively $ 3,627,296 $ 3,641,767 Restricted cash-f

28. Slide 28: Consolidated Statements of Operations (Q1)

    APPLE HOSPITALITY APPLE HOSPITALITY REIT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME {in thousands, except per share data} (Unaudited) Three Months Ended March 31, 2016 2015 Revenues: Room $ 206,150 $ 192,013 Other 18,337 18,339 Total revenue 224,487 210,352 Expenses: Operat

29. Slide 29: Consolidated Statements of Operations (Annual)

    APPLE HOSPITALITY APPLE HOSPITALITY REIT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME lin thousands, except per share data} Years Ended 31, 2015 2014 Revenues: Room $ 821,733 $ 735,882 Other 76,581 68,014 Total revenue 898,314 803,896 Expenses: Operating 227,915 206,829 Hotel

30. Slide 30: Net Income to EBITDA Reconciliation, Three Months

    APPLE HOSPITALITY THE FOLLOWING TABLE RECONCILES THE COMPANY’S GAAP NET INCOME TO EBITDA, ADJUSTED EBITDA AND ADJUSTED HOTEL EBITDA FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015 (Unaudited) {in thousands) Three Months Ended March 31, 2016 2015 Net income $ 34,686 $ 43,867 Depreciation 33,484 30

31. Slide 31: Net Income to EBITDA Reconciliation, Years

    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, 2015 AND 2014 Unaudited) {in thousands} Years Ended December 31, 2015 2014 Net income $ 117,288 $ 6,833 Depreciation 127,449 113,112 Am

32. Slide 32: Net Income to FFO and MFFO Reconciliation

    APPLE HOSPITALITY THE FOLLOWING TABLE RECONCILES THE COMPANY'S GAAP NET INCOME TO FFO AND MFFO. FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015 (Unaudited) {in thousands) Three Months Ended March 31, 2016 2015 Net income $ 34,686 $ 43,867 Depreciation of real estate owned 33,254 30,489 Gain on sa

33. Slide 33: Comparable Hotels Operating Metrics, Three Months

    APPLE HOSPITALITY APPLE HOSPITALITY REIT, INC. COMPARABLE HOTELS OPERATING METRICS AND STATISTICAL DATA (Unaudited) (in thousands except statistical data) Three Months Ended March 31, 2016 2015 % Change Room revenue $ 206,150 $ 194,682 5.9% Other revenue 18,434 20,791 -11.3% Total revenue 224,584 21

34. Slide 34: Comparable Hotels Operating Metrics, Years

    APPLE HOSPITALITY APPLE HOSPITALITY REIT, INC. COMPARABLE HOTELS OPERATING METRICS AND STATISTICAL DATA (Unaudited) (in thousands except statistical data) Years Ended December 31 2015 2014 % Change Room revenue $ 839,646 $ 778,723 7.8% Other revenue 80,566 75,897 6.2% Total revenue 920,212 854,620 7

35. Slide 35: Comparable Hotels Quarterly Operating Metrics

    APPLE HOSPITALITY APPLE HOSPITALITY REIT, INC. COMPARABLE HOTELS QUARTERLY OPERATING METRICS AND STATISTICAL DATA (Unaudited) (in thousands except statistical data) Three Months Ended 6/30/2014 9/30/2014 __ 12/31/2014 3/31/2015 6/30/2015 9/30/2015 __ 12/31/2015 3/31/2016 Room revenue $ 209,051 $ 210

36. Slide 36: Operating Metrics by Region, Three Months

    APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION THREE MONTHS ENDED MARCH 31 (Unaudited) % of Adjusted Region/State 7 Occupaner Ayerage Daily Rate ReyPAR Hotel EBITDA #ol Hotels Q12016 Q1 2015 % Change Q12016 Ql 2015 % Change Q1 2016 QI 2015 % Change Q12016 East North Central Illinois

37. Slide 37: Operating Metrics by Region, Three Months (Continued)

    APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION THREE MONTHS ENDED MARCH 31 (Unaudited) (CONTINUED) % of Adjusted Region/Stale Ocevpane Average Daily Rate ReyPAR Hotel EBITDA # of Hotels Q1 2016 QI 2015 % Change Q12016 QI 2015 % Change Q12016 QI 2015 % Change Q12016 Pacific Alaska 1

38. Slide 38: Operating Metrics by Region, Trailing Twelve Months

    APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION TRAILING TWELVE MONTHS ENDED MARCH 31 (Unaudited) % of Adjusted Region/State Occupane Average Daily Rale ReyPAR Hotel EBITDA #of Hotels TIM 2016 TIM 2015 % Change TIM 2016 TIM 2015 % Change TIM 2016 TIM 2015 % Change _ TIM 2016 East Nor

39. Slide 39: Operating Metrics by Region, TTM (Continued)

    APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY REGION TRAILING TWELVE MONTHS ENDED MARCH 31 (Unaudited) (CONTINUED) % of Adjusted Region/Siate Oceupane Average Daily Rate ReyPAR Hotel EBITDA # of Hotels TIM 2016 TIM 2015 % Change TTM 2016 TTM 2015 % Change TTM 2016 TIM 2015 % Change TM 201

40. Slide 40: Operating Metrics by Chain Scale, Three Months

    APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY CHAIN SCALE THREE MONTHS ENDED MARCH 31 (Unaudited) % of Adjusted Hotel Chain Scale/Brand Oceupane Average Daily Rate ReyPAR EBITDA # of Hotels Q1 2016 Q1 2015 % Change Q1 2016 QI 2015 % Change Q1 2016 Q1 2015 % Change Ql 2016 upseala’ Courlya

41. Slide 41: Operating Metrics by Chain Scale, Trailing Twelve Months

    APPLE HOSPITALITY COMPARABLE HOTELS OPERATING METRICS BY CHAIN SCALE TRAILING TWELVE MONTHS ENDED MARCH 31 (Unaudited) % of Adjusted Hotel Chain Scale/Brand Oceupane Average Daily Rate ReyPAR EBITDA # of Hotels TTM 2016 TTM 2015 % Change TIM 2016 TIM 2015 % Change TTM 2016 TIM 2015 % Change TIM 2016

42. Slide 42: Management Companies

    APPLE HOSPITALITY MANAGEMENT COMPANIES TOP 10 APPLE HOSPITALITY OPERATORS OF MARCH 31, 2016 Apple 84 moan Total # of = 3 i a . | 00% of Apple Hospitality’s portfolio Rank Pany Properties (1) pill ane ted by 3rd Name Portfolio (2) Operator's operated by party property Portfolio (3) managers 1 LBA 29

43. Slide 43: Definitions

    APPLE HOSPITALITY DEFINITIONS 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 Taxes, Depre

44. Slide 44: Definitions (Continued)

    APPLE HOSPITALITY DEFINITIONS (CONTINUED) FEO and MEFO The Company calculates and presents FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (“NAREIT”) which defines FFO as net income (computed in accordance with generally accepted accounting p

45. Slide 45: Additional Information

    APPLE HOSPITALITY ADDITIONAL INFORMATION itional Information t the Pri Transaction and Wh Find It In connection with the proposed transaction, Apple Hospitality and Apple Ten intend to file relevant materials with the SEC, including a registration statement on Form $4 that will contain a joint proxy

46. Slide 46: Trademark Information

    APPLE HOSPITALITY TRADEMARK INFORMATION “Courtyard by Marriot®,” “Fairfield Inn by Marriot®,” “Fairfield Inn & Suites by Marriot®,” “Marriott® Hotels,” “Renaissance® Hotels,” “Residence Inn by Marriott®,” “SpringHill Suites by Marriott®,” and “TownePlace Suites by Marriot®” are each a registered tra

47. Slide 47: Contact Information

    APPLE HOSPITALITY CONTACT INFORMATION 814 East Main Street Richmond, VA 23219 (804) 344-8121 www.applehospitalityreit.com 47

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