Apple Hospitality Reit, Inc. · NYSE:APLE
Apple Hospitality Reit — Investor Presentation (June 2021)
39 slides from Apple Hospitality Reit's investor presentation, Jun 7, 2021
Slide 1: Investor Presentation June 2021
JUNE 2021 • NYSE: APLE INVESTOR PRESENTATION Exhibit 99.1
Slide 2: Forward-looking statements
COVER PHOTOS: HILTON GARDEN INN, MADISON, WI; SPRINGHILL SUITES, BURBANK, CA; HYATT HOUSE & HYATT PLACE, TEMPE, AZ; HAMPTON INN & SUITES, PHOENIX, AZ 2 COURTYARD, MIAMI, FL Certain statements made in this presentation are forward-looking statements, including statements regarding the impact to Apple
Slide 3: Company Profile & Proven Investment Strategy
COMPANY PROFILE & PROVEN INVESTMENT STRATEGY Note: Hotel portfolio statistics as of May 6, 2021. 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 base
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 First Quarter 2021 Performance Update
KEY TAKEAWAYS 5 FIRST QUARTER 2021 PERFORMANCE UPDATE Strongest operational results since beginning of pandemic with sequential improvement each month during the quarter Performance driven by mix of leisure and business demand, consisting of both transient and small group bookings Efficient operatin
Slide 6: Q1 2021 MFFO/AFFO Per Share Outperformance
Q1 2021 MFFO/AFFO Per Share Q1 2021 Trailing Twelve Months MFFO/AFFO Per Share (1) Upper Upscale/Full-Service MFFO OUTPERFORMANCE 6 MFFO outperformance preserves balance sheet and equity value HAMPTON INN & SUITES, PHOENIX, AZ Source: Company filings. Assumptions may vary by company. Q1 2021 Trailin
Slide 7: Portfolio Positioned for Outperformance
PORTFOLIO POSITIONED FOR OUTPERFORMANCE 7 Not Dependent on Large Group Business Portfolio Diversified Across Location Types with Limited Exposure to Urban City Centers Rooms-Focused Portfolio with Significant Extended Stay and Suite Product Note: Hotel portfolio statistics as of May 6, 2021. Brand T
Slide 8: Operating Trends
OPERATING TRENDS 8 Proven ability to achieve corporate-level breakeven at approximately $50 RevPAR COURTYARD, CHARLOTTESVILLE, VA Note: Actual breakeven RevPAR depends on mix of occupancy and rate. Estimated breakeven RevPAR reflects operational costs and occupancy and ADR trends since March 2020 an
Slide 9: Accelerating Occupancy Following Seasonal Declines
9 HAMPTON INN & SUITES, BOISE, ID HAMPTON INN & SUITES, ATLANTA, GA SPRINGHILL SUITES, BURBANK, CA Occupancy Source: Weekly data provided by STR for hotels owned by the Company for the periods noted and may differ from actual results achieved. Week ended Recent occupancy trends highlight strength of
Slide 10: Weekday vs. Weekend Occupancy
10 HAMPTON INN, FORT LAUDERDALE, FL 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. Weekday occupancy includes Sunday through Thursday nights and weekend occupancy
Slide 11: % of Hotels by Occupancy Tier
% OF HOTELS BY OCCUPANCY TIER Week ended Source: Weekly data provided by STR for hotels owned by the Company for the periods noted and may differ from actual results achieved. Consolidated hotels included in 0% - 15% occupancy tier. Building occupancy across portfolio 11 RESIDENCE INN, RICHMOND, VA
Slide 12: Achieved Cost Savings
ACHIEVED COST SAVINGS 12 HOMEWOOD SUITES, CAPE CANAVERAL, FL Reductions in Total Hotel Expense and Total Revenue(1) Swiftly adjusted operating model to reduce costs and maximize performance in current environment Reductions for each quarter as compared to the same quarter of 2019. Total hotel expens
Slide 13: Opportunity for Long-Term Cost Savings
OPPORTUNITY FOR LONG-TERM COST SAVINGS 13 HOMEWOOD SUITES, CAPE CANAVERAL, FL Represents targeted reduction in year-over-year total hotel expense for every 1% decline in year-over-year total revenue and assumes as revenue recovers, service and amenity offerings will evolve from the extreme reduction
Slide 14: Proven Investment Strategy
PROVEN INVESTMENT STRATEGY 14
Slide 15: Why Branded Select-Service Hotels?
WHY BRANDED SELECT-SERVICE HOTELS? 15 Total revenue primarily derived from rooms sold Ability to cross-utilize associates to maximize efficiencies High margins and low breakeven occupancy Fewer outlets to manage Less public space to sanitize Low dependence on large group business Efficient Operating
Slide 16: 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 May 6, 2021. 16 Broad mix of
Slide 17: Industry-Leading Asset Management
INDUSTRY-LEADING ASSET MANAGEMENT 17 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
Slide 18: Broad Geographic Diversification
BROAD GEOGRAPHIC DIVERSIFICATION 18 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 Unparalleled exposure
Slide 19: Apple REIT Companies Transaction History
Apple REIT Companies Transaction History 1999 – May 6, 2021 439 TOTAL HOTELS ACQUIRED 207 TOTAL HOTELS SOLD 232 CURRENT PORTFOLIO 4 REITS SOLD IN 3 TRANSACTIONS 4 REITS MERGED TO FORM CURRENT APLE 20-YEAR TRACK RECORD OF HOTEL TRANSACTIONS 19 Note: Hotel transactions by the various Apple REIT Compan
Slide 20: 2020 & 2021 Portfolio Activity
2020 & 2021 PORTFOLIO ACTIVITY Note: As of May 6, 2021. These two hotels comprise a dual-branded property at one location. Contract entered into prior to 2020. 20 HILTON GARDEN INN, MADISON, WI
Slide 21: Well-Maintained Portfolio
WELL-MAINTAINED PORTFOLIO 21 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 March 31, 2021. Average Effective Age represents years since hotels w
Slide 22: Strong Balance Sheet & Liquidity Position
Debt Composition(1) STRONG BALANCE SHEET & LIQUIDITY POSITION Based on balances and hotels owned as of March 31, 2021, excluding unamortized fair value adjustment of assumed debt and unamortized debt issuance costs. Excludes yearly amortization. Interest rate includes effect of interest rate swaps a
Slide 23: Amendments to Unsecured Credit Facilities
AMENDMENTS TO UNSECURED CREDIT FACILITIES 23 Note: See further information on the Company’s indebtedness and amendments to unsecured credit facilities in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, Quarterly Report on Form 10-Q for the quarter ended March 31, 2021,
Slide 24: Amendments to Unsecured Credit Facilities
AMENDMENTS TO UNSECURED CREDIT FACILITIES 24 Note: See further information on the Company’s indebtedness and amendments to unsecured credit facilities in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, Quarterly Report on Form 10-Q for the quarter ended March 31, 2021,
Slide 25: Conservative Capital Structure Positions APLE for External Growth
CONSERVATIVE CAPITAL STRUCTURE POSITIONS APLE FOR EXTERNAL GROWTH 25 HOMEWOOD SUITES, CAPE CANAVERAL, FL Net Debt to EBITDA Ratio(1) Illustrative net debt to EBITDA ratio projections at different levels of recovery(2) With positive cash flow and a conservative capital structure, APLE anticipates bei
Slide 26: Strategic Objectives
STRATEGIC OBJECTIVES 26 Build off of base occupancy with all hotels open Continue focus on direct sales efforts Optimize mix of business through strategic revenue management to drive rate Leverage internal revenue team to identify best practices and drive revenue across portfolio Grow Top Line Perfo
Slide 27: ESG Initiatives
ESG INITIATIVES COURTYARD, CAROLINA BEACH, NC
Slide 28: 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 29: 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 30: Governance
GOVERNANCE Alignment with the best interests of our shareholders is at the forefront of our values. 30 HILTON GARDEN INN, SACRAMENTO, CA
Slide 31: Appendix
APPENDIX COURTYARD, SANTA ANA, CA
Slide 32: Year-Over-Year Performance
32 YEAR-OVER-YEAR PERFORMANCE HAMPTON INN & SUITES, MEMPHIS, TN ($ in thousands except statistical data) Q1 2021 Performance at a Glance Note: See explanation and reconciliation of Adjusted Hotel EBITDA to net income (loss) included in subsequent pages.
Slide 33: Quarterly Performance
33 QUARTERLY PERFORMANCE HOMEWOOD SUITES, DALLAS, TX ($ in thousands except statistical data) Strongest Quarterly Performance Since Onset of Pandemic Note: See explanation and reconciliation of Adjusted Hotel EBITDA to net income (loss) included in subsequent pages.
Slide 34: Reconciliation of Net Income (Loss) to EBITDA and Adjusted Hotel EBITDA
34 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 MARCH 31, 2019 THROUGH MARCH 31, 2021
Slide 35: Reconciliation of Net Loss to FFO and MFFO
35 RECONCILIATION OF NET LOSS TO FFO AND MFFO THE FOLLOWING TABLE RECONCILES THE COMPANY’S GAAP NET LOSS TO FFO and MFFO ON A QUARTERLY BASIS FROM March 31, 2020 THROUGH MARCH 31, 2021 (Unaudited) (in thousands, except per share amounts) Note: The Consolidated Statements of Operations and Comprehens
Slide 36: Definitions
DEFINITIONS 36 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, Inco
Slide 37: Definitions Continued
DEFINITIONS CONTINUED 37 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 los
Slide 38: 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 39: Contact Information
CONTACT INFORMATION 39 COURTYARD, RICHMOND, VA
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