Apple Hospitality Reit, Inc. · NYSE:APLE
Apple Hospitality Reit — Investor Presentation (September 2020)
29 slides from Apple Hospitality Reit's investor presentation, Sep 14, 2020
Slide 1: Investor Presentation
Slide 2: ee ee
ee ee RESIDENCE INN HATIESBURG, Ms APPLE HOSPITALITY Certain stotoments mad inthis presentation are forwarellocking sotemens, including sotementsregording the impact lo Apple Hospitaly REIT, Ins (he "Company, “Apple Hospitaliy," “Applo” or “APLE") business and financial condition from, end measures
Slide 3: Company Profile & Proven Investment Strategy
COMPANY PROFILE & PROVEN INVESTMENT STRATEGY Scale Ownership of Industry-Leading Upscale, Rooms- Brands and Focused Hotels Operators BRANDS HOTELS 30,018 GUEST ROOMS 99% ROOMS- FOCUSED 20 MANAGEMENT COMPANIES Not: Hot! post (0), Avooge Etec {2}. Nar Tote Dea! o Tool Copilizotion celesltion bos on fo
Slide 4: Management Team with Deep Industry Experience Over Multiple Hotel Cycles
MANAGEMENT TEAM WITH DEEP INDUSTRY EXPERIENCE OVER MULTIPLE HOTEL CYCLES & APPLE HOSPITALITY Average executive tenure with the Apple REIT Companies is 13 years Established and operated 8 public hospitality REITs Raised and invested approximately $7 billion in hotel assets Purchased 438 hotels Manage
Slide 5: Key Takeaways
KEY TAKEAWAYS APPLE HOSPITALITY * CASH FLOW POSITIVE IN JULY 2020 + All ofthe Company's 235 hotels are open and receiving reservations + Efficient operating model of roomsocused hotels allowed for swift operational changes and cost mitigation + Retained hotel sales staff and enhanced sales strategy
Slide 6: Cash Flow Positive in July 2020
CASH FLOW POSITIVE IN JULY 2020 APPLE HOSPITALITY ¥ All hotels open and receiving reservations x 78% V Positive Adjusted Hotel EBITDA for Second Quarter 2020 ¥ Cash flow positive in July 2020 . 49% 50% 50% 4oy, 51% 50% A5S% 47% Aniicipated corporate level breakeven ae | 20% Anticipated propertylevel
Slide 7: Improvements in Occupancy
4 IMPROVEMENTS IN OCCUPANCY APPLE HOSPITALITY % of Hotels by Occupancy Tier
Slide 8: Q2 2020 Adjusted Hotel EBITDA Performance
Q2 2020 ADJUSTED HOTEL EBITDA PERFORMANCE APPLE HOSPITALITY Steady month-over-month improvements in RevPAR resulted in positive Adjusted Hotel EBITDA") in Q2 Q2 2020 Adjusted Hotel EBITDA Performance {8 in thousands, except RevPAR) mmAdjusted Hotel EBTDA = —RevPAR $10,000 $8,060 $5,000 $27 $18 $575
Slide 9: Q2 2020 EBITDA Outperformance
Q2 2020 EBITDA OUTPERFORMANCE APPLE HOSPITALITY Apple Hospitality’s efficient operating model resulted in leading second quarter EBITDA performance Second Quarter 2020 Adjusted Hotel EBITDA per Room Bh vesertoortocand 324 Upper Upscale/Full Service Ups & User Usesa - “HEE wea ($1,655) ($1,757) ($1,8
Slide 10: Portfolio Positioned for Outperformance
PORTFOLIO POSITIONED FOR OUTPERFORMANCE APPLE HOSPITALITY Location Type by Number of Guest Rooms % of APLE et Brond Type! Rose Portfolio Diversified Sven Across Location Rooms-focused Porifolio with Uiben 21% Extended Stay Significant Types with Limited Extended Stay — Suite Product Exposure to Urba
Slide 11: Broad Consumer Appeal
BROAD CONSUMER APPEAL APPLE HOSPITALITY Rooms-focused hotels with industry-leading brands have broad consumer appeal lay Broad mix of demand generators, including: v Business v Health Care v leisure ¥ Education ¥ Government v Athletics Y Military V First Responders ¥ Construction ¥ Insurance V Disas
Slide 12: Industry-Leading Operators
INDUSTRY-LEADING OPERATO Data-Driven Asset Management + Analytical, data-driven asset management to maximize property-level performance * Scale to negotiate attractive national contracts + Strategic revenue management to optimize mix of business and maximize bottom-line performance + Strong regional
Slide 13: Broad Geographic Diversification
BROAD GEOGRAPHIC DIVERSIFICATION APPLE HOSPITALITY Ga Diversified Across 87 Markets Y Broad geographic diversification provides exposure to wide variety of demand generators ¥ Nearly all markets benefit from drive-to demand ¥ Low dependence on inbound international travel with majority of hotels loc
Slide 14: Well-Maintained Portfolio
WELL-MAINTAINED PORTFOLIO APPLE HOSPITALITY Consistent reinvestment enhances long-term value and leads to traveler satisfaction outperformance 4.3 out of 5.00 weighted average TripAdvisor® rating!) Upscale and Upper Midscale Reinvestment Statistics! Al Ye ars ‘Average Annual Spend as % of Revenue 5.
Slide 15: Strong Balance Sheet & Liquidity Position
STRONG BALANCE SHEET & LIQUIDITY POSITION ($ in millions) Total Liquidity (") $156 $225 Term Loan 55% Tor! athens Tos! osiable Gosh lily Revove Eouiolons Copecily Her al incl fet of itera le swe end UBOR rele in fle el Jane 20, 2020. 2 b Debt Composition!) UNENCUMBERED. PORTFOLIO 200 totels 24,886 k
Slide 16: Amendments to Unsecured Credit Facilities
AMENDMENTS TO UNSECURED CREDIT FACILITIES APPLE HOSPITALITY ENHANCE FLEXIBILITY PRESERVE LIQUIDITY Up to $300 million remaining acquisitions permitted, including: - $50 million Madison HGI (1H 2021} - $50 million incremental acquisitions funded with proceeds from dispositions - $50 million increment
Slide 17: 2020 Portfolio Activity & Pending Transactions
2020 PORTFOLIO ACTIVITY & PENDING TRANSACTIONS APPLE HOSPITALITY ACQUISITIONS DISPOSITIONS COMPLETED: COMPLETED: 116100m Hampion Inn & Suites by Hilton® & ° TOE room Home Suite by ore April 2020 $467 million 105-room SpringHill Suites by Marrow? $13.0 million Cape Canaveral, Fl!!! purchase price San
Slide 18: 20-Year Track Record of Hotel Transactions
20-YEAR TRACK RECORD OF HOTEL TRANSACTIONS APPLE HOSPITALITY Apple REIT Companies Transaction History 1999 ~ August 2020 438 TOTAL HOTELS ACQUIRED Having purchased as many as 74 hotels in a single year through individual hotel and small portfolio transactions, Apple has the experience to meaningfull
Slide 19: Proven Investment Strategy
PROVEN INVESTMENT STRATEGY APPLE HOSPITALITY Concentrate on Upscale, rooms-focused hotels Align with the best brands in the rooms-focused - category Hire industry-leading operators and maximize performance through benchmarking and asset - management Pursue broad geographic diversification Enhance po
Slide 20: ESG Initiatives
ESG INITIATIVES FAIRFIELD INN & SUITES, CHANDLER, AZ
Slide 21: Environmental Initiatives
|) Stoic cre boxed onthe Company’ rooms focused hotel on INIT Formal energy management program established in 2018 to ensure that energy, water and waste management are a priority not only within the Company, but also with our management companies and brands. 96% P: ED Lighting Jverege Upscale ond U
Slide 22: Social Responsibility
SOCIAL RESPONSIBILITY APPLE HOSPITALITY ‘Caring for others and our ‘communities has always been at the forefront of our values. : Nd 450+ Apple Gives, an employeeled charitable so es vouunmeeRED organization, was formed in 2017 10 BY APPLE HOSPITALITY EMPLOYEES expand our impact and further advance
Slide 23: Governance
GOVERNANCE APPLE HOSPITALITY Audit, Compensotion and Corporate Governance Commillees ore independent Regular executive sessions of independent directors, De-slaggered Board cllows for ennual elections of directors Required resignation of an incumbent director no! receiving majority of voles cast in
Slide 24: Appendix
APPENDIX RESIDENCE INN, PHOENIX, AT
Slide 25: Reconciliation of Net Income (Loss) to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, EBITDAre, ADJUSTED EBITDAre AND ADJUSTED HOTEL EBITDA (NEE (ARSEI AISNE 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 SEPTEMBER 30, 2018 THRO
Slide 26: Definitions
DEFINITIONS APPLE HOSPITALITY NaaGAAPFianaciol Masses Tha Company considers the llowing nonGAAP nancial meosre uses vest 0 kay suplemenlal maosuts of operoling prlomence Funds Hem Opetaons (CFFO"; Molec FO ["MFFO";Eorings Blor ss, Income Taxes, Deprcioon end Armonizaon (EBITDA); Eonings Boor nel, co
Slide 27: Definitions Continued
DEFINITIONS CONTINUED | APPLE HOSPITALITY FCARDENLINN, BIRMINGHAM The Company collet end presen FFO ia aczordonce wilh sondosdseslaished by Nese, which dfinsFFO 0s oat income [os] feomputed in eccordence with generally aczeple accounting rincoles ("GAAPY), excucing goins ond losses om te soe of eati
Slide 28: Trademark Information
TRADEMARK INFORMATION & APPLE HOSPITALITY RESIDENEESIN) BURBANK *Counyard by Mani," “Foiield by Merion," "Fairfield Inn by Merron," "Fifield lan & Suites by Manrot®,” *Meriot® Hotels,” “Renoissance” Hole,” "Residence Inn by Morriot®,” "Springhill Suites by Motriat®,” ond "TownePlace Suites by Marti?
Slide 29: Contact Information
4 CONTACT INFORMATION APPLE HOSPITALITY MW 814 East Main Street Richmond, VA 23219 (804) 344.8121 info@applehospitalityreit.com waww.applehospitalityreit.com
Apple Hospitality REIT — Investor Presentation (September 2020) on 6ix