Apple Hospitality REIT Inc.

11/04/2024 | Press release | Distributed by Public on 11/04/2024 15:16

Apple Hospitality REIT Reports Results of Operations for Third Quarter 2024 Form 8 K

Apple Hospitality REIT Reports Results of Operations for Third Quarter 2024

RICHMOND, Va. (November 4, 2024) - Apple Hospitality REIT, Inc. (NYSE: APLE) (the "Company" or "Apple Hospitality") today announced results of operations for the third quarter ended September 30, 2024.

Apple Hospitality REIT, Inc.

Selected Statistical and Financial Data

As of and For the Three and Nine Months Ended September 30

(Unaudited) (in thousands, except statistical and per share amounts)(1)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2024

2023

% Change

2024

2023

% Change

Net income

$56,266

$58,512

(3.8%)

$184,247

$156,724

17.6%

Net income per share

$0.23

$0.26

(11.5%)

$0.76

$0.68

11.8%

Operating income

$77,726

$76,295

1.9%

$242,856

$208,571

16.4%

Operating margin %

20.5%

21.3%

(80 bps)

22.1%

20.2%

190 bps

Adjusted EBITDAre

$128,900

$121,927

5.7%

$370,626

$346,359

7.0%

Comparable Hotels Adjusted Hotel EBITDA

$139,222

$138,806

0.3%

$402,226

$403,535

(0.3%)

Comparable Hotels Adjusted Hotel EBITDA Margin %

36.8%

37.4%

(60 bps)

36.7%

37.6%

(90 bps)

Modified funds from operations (MFFO)

$107,439

$104,139

3.2%

$312,008

$294,497

5.9%

MFFO per share

$0.45

$0.45

0.0%

$1.29

$1.29

0.0%

Average Daily Rate (ADR) (Actual)

$162.57

$159.36

2.0%

$159.78

$157.61

1.4%

Occupancy (Actual)

77.0%

77.1%

(0.1%)

76.3%

75.8%

0.7%

Revenue Per Available Room (RevPAR) (Actual)

$125.10

$122.91

1.8%

$121.84

$119.48

2.0%

Comparable Hotels ADR

$162.66

$160.78

1.2%

$160.19

$159.37

0.5%

Comparable Hotels Occupancy

77.0%

77.3%

(0.4%)

76.4%

75.9%

0.7%

Comparable Hotels RevPAR

$125.30

$124.25

0.8%

$122.32

$120.98

1.1%

Distributions paid

$57,680

$54,837

5.2%

$185,881

$183,119

1.5%

Distributions paid per share

$0.24

$0.24

0.0%

$0.77

$0.80

(3.8%)

Cash and cash equivalents

$6,147

Total debt outstanding

$1,507,014

Total debt outstanding, net of cash and cash equivalents

$1,500,867

Total debt outstanding, net of cash and cash equivalents, to total
capitalization (2)

29.6%

(1)
Explanations of and reconciliations to net income determined in accordance with generally accepted accounting principles ("GAAP") of non-GAAP financial measures, Adjusted EBITDAre, Comparable Hotels Adjusted Hotel EBITDA and MFFO, are included below.
(2)
Total debt outstanding, net of cash and cash equivalents ("net total debt outstanding"), divided by net total debt outstanding plus equity market capitalization based on the Company's closing share price of $14.85 on September 30, 2024.

Comparable Hotels is defined as the 223 hotels owned and held for use by the Company as of September 30, 2024, and excludes one non-hotel property. For hotels acquired during the periods noted, the Company has included, as applicable, results of those hotels for periods prior to the Company's ownership, and for dispositions and assets held for sale, results have been excluded for the Company's period of ownership. Results for periods prior to the Company's ownership have not been included in the Company's actual Consolidated Financial Statements and are included only for comparison purposes. Results included for periods prior to the Company's ownership are based on information from the prior owner of each hotel and have not been audited or adjusted.

Justin Knight, Chief Executive Officer of Apple Hospitality, commented, "With slow but steady improvement in business transient demand and ongoing strength in leisure travel, operating fundamentals remained strong across our portfolio during the quarter, with Comparable Hotels RevPAR growth of approximately 1% as compared to the third quarter of 2023. Based on preliminary results, occupancy for the month of October was approximately 80%, with continued improvement in ADR. We remain intently focused on maximizing the profitability of our hotels through strategic asset management and are pleased to report strong bottom-line performance for the quarter, bolstered by recent acquisitions, continued strength in ADR and moderating expense growth."

Mr. Knight continued, "Evolving market conditions over the past year have provided us with the opportunity to demonstrate our disciplined and strategic approach to capital allocation and portfolio management to drive earnings per share and maximize long-term value for our shareholders. Since the beginning of this year through October, we strategically acquired two hotels for $196 million, sold three hotels for $41 million, repurchased 2.4 million common shares for $35 million, and entered into contracts for the sale of an additional four hotels for a combined sales price of $31 million. Our recent activity highlights our ability to effectively allocate capital in the current environment while maintaining our balance sheet. We are confident that with our portfolio of high-quality, rooms-focused hotels broadly diversified across markets and demand generators, the effectiveness of our brands and management companies, the strength and flexibility of our balance sheet, and the depth of our corporate team, we are well positioned for continued outperformance."

Hotel Portfolio Overview

As of September 30, 2024, Apple Hospitality owned 224 hotels, including one hotel classified as held for sale, with an aggregate of 30,068 guest rooms located in 87 markets throughout 37 states and the District of Columbia.

Third Quarter 2024 Highlights

•
Strong operating performance: For the third quarter 2024, Comparable Hotels ADR was $163, approximately a 1% improvement over third quarter 2023; Comparable Hotels Occupancy was 77%, essentially flat to third quarter 2023; and Comparable Hotels RevPAR was $125, an increase of approximately 1% over third quarter 2023. Comparable Hotels Occupancy, ADR and RevPAR exceeded industry averages as reported by STR for the third quarter 2024. Preliminary results for the Company's portfolio for the month of October 2024 show Comparable Hotels RevPAR growth of approximately 4%, with growth in both Comparable Hotels Occupancy and ADR, as compared to October 2023.
•
Strong bottom-line performance: For the third quarter 2024, the Company achieved Comparable Hotels Adjusted Hotel EBITDA of approximately $139 million, a slight improvement over third quarter 2023, and Comparable Hotels Adjusted Hotel EBITDA Margin of approximately 37%, down 60 bps to third quarter 2023. The Company achieved Adjusted EBITDAre of approximately $129 million for the third quarter 2024, an increase of approximately 6% as compared to third quarter 2023. The Company achieved MFFO of approximately $107 million for the third quarter 2024, an increase of approximately 3% as compared to third quarter 2023.
•
Transactional activity: The Company currently has four hotels under contract for sale for a combined gross sales price of approximately $31 million.
•
Capital markets: During the third quarter 2024, the Company purchased, under its Share Repurchase Program, approximately 1.4 million of its common shares at a weighted-average market purchase price of approximately $14.02 per common share, for an aggregate purchase price of approximately $19.2 million, bringing the total shares purchased year to date through September 30, 2024, to approximately 2.4 million common shares at a

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weighted-average market purchase price of approximately $14.16 per common share, for an aggregate purchase price of approximately $34.7 million.
•
Balance sheet: The Company has maintained the strength and flexibility of its balance sheet. At September 30, 2024, the Company's total debt to total capitalization, net of cash and cash equivalents, was approximately 30%.
•
Monthly distributions: During the three months ended September 30, 2024, the Company paid distributions totaling $0.24 per common share. Based on the Company's common stock closing price of $14.68 on November 1, 2024, the current annualized regular monthly cash distribution of $0.96 per common share represents an annual yield of approximately 6.5%.

The Company is providing monthly performance detail for its Comparable Hotels with comparisons to the respective periods of 2023. The following table highlights the Company's Comparable Hotels monthly performance during the third quarter of 2024 as compared to the third quarter of 2023 (in thousands, except statistical data):

% Change

July

August

September

July

August

September

July

August

September

2024

2024

2024

Q3 2024

2023

2023

2023

Q3 2023

2023

2023

2023

Q3 2023

ADR (Comparable Hotels)

$164.31

$160.37

$163.35

$162.66

$165.52

$157.38

$159.35

$160.78

(0.7%)

1.9%

2.5%

1.2%

Occupancy (Comparable Hotels)

77.6%

77.6%

75.9%

77.0%

77.6%

76.7%

77.6%

77.3%

0.0%

1.2%

(2.2%)

(0.4%)

RevPAR (Comparable Hotels)

$127.47

$124.38

$124.02

$125.30

$128.43

$120.65

$123.65

$124.25

(0.7%)

3.1%

0.3%

0.8%

Operating income (Actual)

$28,942

$23,661

$25,123

$77,726

$28,216

$23,361

$24,718

$76,295

2.6%

1.3%

1.6%

1.9%

Adjusted Hotel EBITDA (Actual) (1)

$48,327

$45,789

$44,972

$139,088

$47,653

$41,799

$42,709

$132,161

1.4%

9.5%

5.3%

5.2%

Comparable Hotels Adjusted Hotel
EBITDA (2)

$48,339

$45,904

$44,979

$139,222

$49,643

$43,651

$45,512

$138,806

(2.6%)

5.2%

(1.2%)

0.3%

(1)
See explanation and reconciliation of Adjusted Hotel EBITDA to net income included below.
(2)
See explanation and reconciliation of Comparable Hotels Adjusted Hotel EBITDA to Adjusted Hotel EBITDA included below.

Comparable Hotels is defined as the 223 hotels owned and held for use by the Company as of September 30, 2024, and excludes one non-hotel property. For hotels acquired during the periods noted, the Company has included, as applicable, results of those hotels for periods prior to the Company's ownership, and for dispositions and assets held for sale, results have been excluded for the Company's period of ownership. Results for periods prior to the Company's ownership have not been included in the Company's actual Consolidated Financial Statements and are included only for comparison purposes. Results included for periods prior to the Company's ownership are based on information from the prior owner of each hotel and have not been audited or adjusted.

Portfolio Activity

Acquisitions

As previously announced, since the beginning of 2024, the Company has acquired two hotels for a combined total purchase price of approximately $196.3 million. The acquisitions include the following:

•
In March 2024, the Company acquired the 234-room AC Hotel by Marriott Washington DC Convention Center for a total purchase price of approximately $116.8 million, or $499,000 per key.
•
In June 2024, the Company acquired the newly built, 262-room Embassy Suites by Hilton Madison Downtown for a total purchase price of approximately $79.5 million, or $303,000 per key.

Contract for Potential Acquisition

As previously announced, the Company continues to have one additional hotel under contract for purchase, a Motto by Hilton that is under development in downtown Nashville, Tennessee, for an anticipated total purchase price of approximately $98.2 million with an expected 260 rooms, which the Company anticipates acquiring in late 2025 following completion of construction. There are many conditions to closing on this hotel that have not yet been satisfied, and there can be no assurance that a closing on this hotel will occur under the outstanding purchase contract.

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Dispositions

As previously announced, during the nine months ended September 30, 2024, the Company sold three hotels for a combined gross sales price of approximately $40.6 million, resulting in a combined gain on the sales of approximately $18.2 million, which is included in the Company's consolidated statement of operations for the nine months ended September 30, 2024. The dispositions include the following:

•
In February 2024, the Company sold the 122-room Hampton Inn by Hilton Bentonville/Rogers and the 126-room Homewood Suites by Hilton Bentonville-Rogers in one transaction, for a combined gross sales price of approximately $33.5 million. The Company used a portion of the net proceeds from the sale of these two hotels to complete a 1031 exchange with the acquisition of the AC Hotel Washington DC Convention Center in March 2024, which resulted in the deferral of taxable gains of $15.1 million.
•
In May 2024, the Company sold the 82-room SpringHill Suites by Marriott Greensboro for a gross sales price of approximately $7.1 million.

Contracts for Potential Dispositions

The Company recently entered into four separate contracts for the sale of four hotels for a combined gross sales price of approximately $31.1 million. The potential dispositions include the following:

•
In August 2024, the Company entered into a contract for the sale of its 90-room Courtyard by Marriott Wichita East for a gross sales price of approximately $3.1 million. The Company expects to complete the sale of this hotel in November 2024.
•
In October 2024, the Company entered into a contract for the sale of its 97-room TownePlace Suites by Marriott Knoxville Cedar Bluff for a gross sales price of approximately $9.4 million. The Company expects to complete the sale of this hotel in late 2024 or early 2025.
•
In October 2024, the Company entered into a contract for the sale of its 76-room Homewood Suites by Hilton Chattanooga-Hamilton Place for a gross sales price of approximately $8.3 million. The Company expects to complete the sale of this hotel in late 2024 or early 2025.
•
In October 2024, the Company entered into a contract for the sale of its 117-room Hilton Garden Inn Austin North for a gross sales price of approximately $10.4 million. The Company expects to complete the sale of this hotel in late 2024 or early 2025.

As a result of these potential sales, in the third quarter 2024, the Company recognized an impairment loss of approximately $2.9 million in the aggregate with respect to two of the potential sale properties. There are many conditions to closing on the sales of these hotels that have not yet been satisfied, and there can be no assurance that closings on the sales of these hotels will occur under the outstanding sale agreements.

Capital Improvements

Apple Hospitality consistently reinvests in its hotels to maintain and enhance each property's relevance and competitive position within its respective market. During the nine months ended September 30, 2024, the Company invested approximately $48 million in capital expenditures. The Company anticipates investing approximately $75 million to $85 million in capital improvements during 2024, which includes comprehensive renovation projects for approximately 20 hotels.

Balance Sheet and Liquidity

As of September 30, 2024, the Company had approximately $1.5 billion of total outstanding debt with a current combined weighted-average interest rate of approximately 4.9%, cash on hand of approximately $6 million and

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availability under its revolving credit facility of approximately $540 million. Excluding unamortized debt issuance costs and fair value adjustments, the Company's total outstanding debt as of September 30, 2024, was comprised of approximately $257 million in property-level debt secured by 14 hotels and approximately $1.3 billion outstanding under its unsecured credit facilities. In August 2024, the Company repaid in full one secured mortgage loan for a total of approximately $20 million, increasing the number of unencumbered hotels in the Company's portfolio as of September 30, 2024, to 210. The Company's total debt to total capitalization, net of cash and cash equivalents at September 30, 2024, was approximately 30%, which provides Apple Hospitality with financial flexibility to fund capital requirements and pursue opportunities in the marketplace. As of September 30, 2024, the Company's weighted-average debt maturities were 3.0 years.

On July 17, 2024, the Company amended its unsecured $85 million term loan facility, which increased the amount of the term loan facility to $130 million, with the additional $45 million funded at closing; extended the maturity date to July 25, 2026; and the interest rate, subject to certain exceptions, is equal to an annual rate of the one-month SOFR plus a 0.10% SOFR spread adjustment plus a margin ranging from 1.35% to 2.20%, depending on the Company's leverage ratio, as calculated under the terms of the amended credit agreement. Subject to certain conditions, including covenant compliance and additional fees, the maturity date of the $130 million term loan facility may be extended by the Company to July 25, 2027.

Capital Markets

Share Repurchase Program

The Company has in place a Share Repurchase Program that provides for share repurchases in open market transactions. During the three months ended September 30, 2024, the Company purchased, under its Share Repurchase Program, approximately 1.4 million of its common shares at a weighted-average market purchase price of approximately $14.02 per common share, for an aggregate purchase price of approximately $19.2 million, bringing the total shares purchased year to date through September 30, 2024, to approximately 2.4 million common shares at a weighted-average market purchase price of approximately $14.16 per common share, for an aggregate purchase price of approximately $34.7 million. As of September 30, 2024, the Company had approximately $301 million remaining under its Share Repurchase Program for the repurchase of shares.

ATM Program

The Company also has in place an at-the-market offering program (the "ATM Program"). As of September 30, 2024, the Company had $500 million remaining under its ATM Program for the issuance of shares. No shares were sold under the current or prior ATM Program during the three and nine months ended September 30, 2024.

Shareholder Distributions

During the three months ended September 30, 2024, the Company paid distributions totaling $0.24 per common share. Based on the Company's common stock closing price of $14.68 on November 1, 2024, the current annualized regular monthly cash distribution of $0.96 per common share represents an annual yield of approximately 6.5%. While the Company currently expects monthly distributions to continue, each distribution is subject to approval by the Company's Board of Directors. The Company's Board of Directors, in consultation with management, will continue to monitor the Company's distribution rate and timing relative to the performance of its hotels, capital improvement needs, varying economic cycles, acquisitions, dispositions, other cash requirements and the Company's REIT status for federal income tax purposes, and may make adjustments as it deems appropriate.

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Updated 2024 Outlook

The Company is updating its operational and financial outlook for 2024. This outlook, which is based on management's current view of both operating and economic fundamentals of the Company's existing portfolio of hotels, does not take into account any unanticipated developments in its business or changes in its operating environment, nor does it take into account any unannounced hotel acquisitions or dispositions. As compared to the midpoint of previously provided 2024 guidance, the Company is decreasing Net Income by $1 million, decreasing Comparable Hotels RevPAR Change by 12.5 bps, increasing Comparable Hotels Adjusted Hotel EBITDA Margin % by 20 bps, and decreasing Adjusted EBITDAre by $1.5 million. Comparable Hotels RevPAR Change guidance, which is the change in Comparable Hotels RevPAR in 2024 compared to 2023, and Comparable Hotels Adjusted Hotel EBITDA Margin % guidance include properties acquired and announced for acquisition by year-end 2024 as if the hotels were owned as of January 1, 2023, exclude completed dispositions since January 1, 2023, exclude announced dispositions anticipated to close by year-end 2024, and exclude one non-hotel property. Results for periods prior to the Company's ownership are not included in the Company's actual Consolidated Financial Statements, are based on information from the prior owner of each hotel, and have not been audited or adjusted. For the full year 2024, the Company anticipates its 2024 results will be in the following range:

Updated 2024 Guidance(1)

Low-End

High-End

Net income

$204 Million

$221 Million

Comparable Hotels RevPAR Change

0.75%

2.00%

Comparable Hotels Adjusted Hotel EBITDA Margin %

35.3%

35.9%

Adjusted EBITDAre

$458 Million

$469 Million

Capital expenditures

$75 Million

$85 Million

(1)
Explanations of and reconciliations to net income guidance of Adjusted EBITDAre and Comparable Hotels Adjusted Hotel EBITDA guidance are included below.

Third Quarter 2024 Earnings Conference Call

The Company will host a quarterly conference call for investors and interested parties at 10 a.m. Eastern Time on Tuesday, November 5, 2024. The conference call will be accessible by telephone and the internet. To access the call, participants from within the U.S. should dial 877-407-9039, and participants from outside the U.S. should dial 201-689-8470. Participants may also access the call via live webcast by visiting the Investor Information section of the Company's website at ir.applehospitalityreit.com. A replay of the call will be available from approximately 2 p.m. Eastern Time on November 5, 2024, through 11:59 p.m. Eastern Time on November 19, 2024. To access the replay, the domestic dial-in number is 844-512-2921, the international dial-in number is 412-317-6671, and the passcode is 13748421. The archive of the webcast will be available on the Company's website for a limited time.

About Apple Hospitality REIT, Inc.

Apple Hospitality REIT, Inc. (NYSE: APLE) is a publicly traded real estate investment trust ("REIT") that owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States. Apple Hospitality's portfolio consists of 224 hotels with more than 30,000 guest rooms located in 87 markets throughout 37 states and the District of Columbia. Concentrated with industry-leading brands, the Company's hotel portfolio consists of 100 Marriott-branded hotels, 119 Hilton-branded hotels and five Hyatt-branded hotels. For more information, please visit www.applehospitalityreit.com.

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Apple Hospitality REIT 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, Depreciation and Amortization ("EBITDA"); Earnings Before Interest, Income Taxes, Depreciation and Amortization for Real Estate ("EBITDAre"); Adjusted EBITDAre; Adjusted Hotel EBITDA; Comparable Hotels Adjusted Hotel EBITDA; and Same Store Hotels Adjusted Hotel EBITDA. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss), cash flow from operations or any other operating GAAP measure. FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA, Comparable Hotels Adjusted Hotel EBITDA and Same Store Hotels Adjusted Hotel EBITDA are not necessarily indicative of funds available to fund the Company's cash needs, including its ability to make cash distributions. Although FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA, Comparable Hotels Adjusted Hotel EBITDA and Same Store Hotels Adjusted Hotel EBITDA, as calculated by the Company, may not be comparable to FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA, Comparable Hotels Adjusted Hotel EBITDA and Same Store Hotels Adjusted Hotel EBITDA, as reported by other companies that do not define such terms exactly as the Company defines such terms, the Company believes these supplemental measures are useful to investors when comparing the Company's results between periods and with other REITs. Reconciliations of these non-GAAP financial measures to net income (loss) are provided in the following pages.

Forward-Looking Statements Disclaimer

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are typically identified by use of statements that include phrases such as "may," "believe," "expect," "anticipate," "intend," "estimate," "project," "target," "goal," "plan," "should," "will," "predict," "potential," "outlook," "strategy," and similar expressions that convey the uncertainty of future events or outcomes. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, but are not limited to, the ability of the Company to effectively acquire and dispose of properties and redeploy proceeds; the anticipated timing and frequency of shareholder distributions; the ability of the Company to fund capital obligations; the ability of the Company to successfully integrate pending transactions and implement its operating strategy; changes in general political, economic and competitive conditions and specific market conditions (including the potential effects of inflation or a recessionary environment); reduced business and leisure travel due to geopolitical uncertainty, including terrorism and acts of war; travel-related health concerns, including widespread outbreaks of infectious or contagious diseases in the U.S.; inclement weather conditions, including natural disasters such as hurricanes, earthquakes and wildfires; government shutdowns, airline strikes or equipment failures, or other disruptions; adverse changes in the real estate and real estate capital markets; financing risks; changes in interest rates; litigation risks; regulatory proceedings or inquiries; and changes in laws or regulations or interpretations of current laws and regulations that impact the Company's business, assets or classification as a REIT. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the results or conditions described in such statements or the objectives and plans of the Company will

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be achieved. In addition, the Company's qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended. Readers should carefully review the risk factors described in the Company's filings with the Securities and Exchange Commission, including but not limited to those discussed in the section titled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Any forward-looking statement that the Company makes speaks only as of the date of this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements or cautionary factors, as a result of new information, future events, or otherwise, except as required by law.

Contact:

Apple Hospitality REIT, Inc.

Kelly Clarke, Vice President, Investor Relations

804-727-6321

[email protected]

For additional information or to receive press releases by email, visit www.applehospitalityreit.com.

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Apple Hospitality REIT, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

September 30,

December 31,

2024

2023

(unaudited)

Assets

Investment in real estate, net of accumulated depreciation and amortization
of $1,797,006 and $1,662,942, respectively

$4,873,083

$4,777,374

Assets held for sale

2,950

15,283

Cash and cash equivalents

6,147

10,287

Restricted cash-furniture, fixtures and other escrows

32,570

33,331

Due from third-party managers, net

57,394

36,437

Other assets, net

49,659

64,586

Total Assets

$5,021,803

$4,937,298

Liabilities

Debt, net

$1,501,189

$1,371,494

Finance lease liabilities

111,687

111,892

Accounts payable and other liabilities

112,058

129,931

Total Liabilities

1,724,934

1,613,317

Shareholders' Equity

Preferred stock, authorized 30,000,000 shares; none issued and outstanding

-

-

Common stock, no par value, authorized 800,000,000 shares; issued and
outstanding 239,925,065 and 241,515,532 shares, respectively

4,772,759

4,794,804

Accumulated other comprehensive income

4,792

20,404

Distributions greater than net income

(1,480,682)

(1,491,227)

Total Shareholders' Equity

3,296,869

3,323,981

Total Liabilities and Shareholders' Equity

$5,021,803

$4,937,298

Note: The Consolidated Balance Sheets and corresponding footnotes can be found in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

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Apple Hospitality REIT, Inc.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

(in thousands, except per share data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2024

2023

2024

2023

Revenues:

Room

$

346,058

$

327,121

$

998,493

$

943,684

Food and beverage

15,841

13,576

48,760

42,032

Other

16,944

17,563

51,179

45,628

Total revenue

378,843

358,260

1,098,432

1,031,344

Expenses:

Hotel operating expense:

Operating

93,350

85,829

268,669

249,403

Hotel administrative

31,433

29,172

92,638

85,933

Sales and marketing

33,000

30,770

96,488

89,406

Utilities

14,787

13,797

37,971

36,271

Repair and maintenance

17,863

16,336

52,331

48,452

Franchise fees

16,963

15,895

49,244

45,407

Management fees

12,546

11,911

36,156

34,516

Total hotel operating expense

219,942

203,710

633,497

589,388

Property taxes, insurance and other

20,946

21,678

63,878

61,347

General and administrative

9,190

11,079

30,839

34,640

Loss on impairment of depreciable real estate assets

2,896

-

2,896

-

Depreciation and amortization

48,143

45,498

142,681

137,398

Total expense

301,117

281,965

873,791

822,773

Gain on sale of real estate

-

-

18,215

-

Operating income

77,726

76,295

242,856

208,571

Interest and other expense, net

(21,217

)

(17,470

)

(57,896

)

(50,973

)

Income before income taxes

56,509

58,825

184,960

157,598

Income tax expense

(243

)

(313

)

(713

)

(874

)

Net income

$

56,266

$

58,512

$

184,247

$

156,724

Other comprehensive income (loss):

Interest rate derivatives

(16,588

)

1,412

(15,612

)

530

Comprehensive income

$

39,678

$

59,924

$

168,635

$

157,254

Basic and diluted net income per common share

$

0.23

$

0.26

$

0.76

$

0.68

Weighted average common shares outstanding - basic and diluted

240,500

228,877

241,690

229,103

Note: The Consolidated Statements of Operations and Comprehensive Income and corresponding footnotes can be found in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

Page | 10

Apple Hospitality REIT, Inc.

Comparable Hotels Operating Metrics and Statistical Data

(Unaudited)

(in thousands, except statistical data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

% Change

% Change

2024

2023

2023

2024

2023

2023

Operating income (Actual)

$77,726

$76,295

1.9%

$242,856

$208,571

16.4%

Operating margin % (Actual)

20.5%

21.3%

(80 bps)

22.1%

20.2%

190 bps

Comparable Hotels Total Revenue

$378,104

$371,298

1.8%

$1,095,019

$1,073,288

2.0%

Comparable Hotels Total Operating Expenses

$238,882

$232,492

2.7%

$692,793

$669,753

3.4%

Comparable Hotels Adjusted Hotel EBITDA

$139,222

$138,806

0.3%

$402,226

$403,535

(0.3%)

Comparable Hotels Adjusted Hotel EBITDA Margin %

36.8%

37.4%

(60 bps)

36.7%

37.6%

(90 bps)

ADR (Comparable Hotels)

$162.66

$160.78

1.2%

$160.19

$159.37

0.5%

Occupancy (Comparable Hotels)

77.0%

77.3%

(0.4%)

76.4%

75.9%

0.7%

RevPAR (Comparable Hotels)

$125.30

$124.25

0.8%

$122.32

$120.98

1.1%

ADR (Actual)

$162.57

$159.36

2.0%

$159.78

$157.61

1.4%

Occupancy (Actual)

77.0%

77.1%

(0.1%)

76.3%

75.8%

0.7%

RevPAR (Actual)

$125.10

$122.91

1.8%

$121.84

$119.48

2.0%

Reconciliation to Actual Results

Total Revenue (Actual)

$378,843

$358,260

$1,098,432

$1,031,344

Revenue from acquisitions prior to ownership

-

18,999

4,775

60,610

Revenue from dispositions/assets held for sale

(518)

(3,949)

(3,421)

(10,931)

Revenue from non-hotel property

(221)

(2,012)

(4,767)

(7,735)

Comparable Hotels Total Revenue

$378,104

$371,298

$1,095,019

$1,073,288

Adjusted Hotel EBITDA (AHEBITDA) (Actual) (1)

$139,088

$132,161

$400,561

$380,154

AHEBITDA from acquisitions prior to ownership

-

7,978

1,882

26,023

AHEBITDA from dispositions/assets held for sale

134

(1,333)

(217)

(3,216)

AHEBITDA from non-hotel property (2)

-

-

-

574

Comparable Hotels AHEBITDA

$139,222

$138,806

$402,226

$403,535

(1)
Represents the Company's actual Adjusted Hotel EBITDA which excludes Adjusted EBITDAre from its non-hotel property, the Company's independent boutique hotel in New York, New York, starting in the second half of 2023, subsequent to its lease to a third-party hotel operator for all hotel operations (the "non-hotel property"). As a result of the operator's failure to make lease payments timely, the Company commenced legal proceedings to remove the operator from possession of the hotel, which remain ongoing.
(2)
Represents Adjusted Hotel EBITDA from the non-hotel property in the first half of 2023, prior to its lease to a third-party hotel operator for all hotel operations.

Note: Comparable Hotels is defined as the 223 hotels owned and held for use by the Company as of September 30, 2024, and excludes the non-hotel property. For hotels acquired during the periods noted, the Company has included, as applicable, results of those hotels for periods prior to the Company's ownership, and for dispositions and assets held for sale, results have been excluded for the Company's period of ownership. Results for periods prior to the Company's ownership have not been included in the Company's actual Consolidated Financial Statements and are included only for comparison purposes. Results included for periods prior to the Company's ownership are based on information from the prior owner of each hotel and have not been audited or adjusted.

Reconciliation of net income to non-GAAP financial measures is included in the following pages.

Page | 11

Apple Hospitality REIT, Inc.

Comparable Hotels Quarterly Operating Metrics and Statistical Data

(Unaudited)

(in thousands, except statistical data)

2023

2024

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Operating income (Actual)

$49,247

$83,029

$76,295

$38,910

$71,615

$93,515

$77,726

Operating margin % (Actual)

15.8%

23.0%

21.3%

12.5%

21.7%

24.0%

20.5%

Comparable Hotels Total Revenue

$325,564

$376,426

$371,298

$319,229

$330,423

$386,492

$378,104

Comparable Hotels Total Operating Expenses

210,065

227,196

232,492

213,521

218,804

235,107

238,882

Comparable Hotels Adjusted Hotel EBITDA

$115,499

$149,230

$138,806

$105,708

$111,619

$151,385

$139,222

Comparable Hotels Adjusted Hotel EBITDA Margin %

35.5%

39.6%

37.4%

33.1%

33.8%

39.2%

36.8%

ADR (Comparable Hotels)

$154.29

$162.60

$160.78

$151.69

$154.29

$163.10

$162.66

Occupancy (Comparable Hotels)

72.2%

78.2%

77.3%

69.8%

72.2%

79.9%

77.0%

RevPAR (Comparable Hotels)

$111.39

$127.15

$124.25

$105.92

$111.32

$130.28

$125.30

ADR (Actual)

$152.01

$160.98

$159.36

$149.88

$153.18

$162.98

$162.57

Occupancy (Actual)

72.0%

78.2%

77.1%

69.6%

72.0%

79.8%

77.0%

RevPAR (Actual)

$109.46

$125.96

$122.91

$104.27

$110.25

$130.07

$125.10

Reconciliation to Actual Results

Total Revenue (Actual)

$311,454

$361,630

$358,260

$312,456

$329,512

$390,077

$378,843

Revenue from acquisitions prior to ownership

19,786

21,825

18,999

12,245

4,775

-

-

Revenue from dispositions/assets held for sale

(2,833)

(4,149)

(3,949)

(3,345)

(1,821)

(1,082)

(518)

Revenue from non-hotel property

(2,843)

(2,880)

(2,012)

(2,127)

(2,043)

(2,503)

(221)

Comparable Hotels Total Revenue

$325,564

$376,426

$371,298

$319,229

$330,423

$386,492

$378,104

Adjusted Hotel EBITDA (AHEBITDA) (Actual) (1)

$106,749

$141,244

$132,161

$101,738

$109,793

$151,680

$139,088

AHEBITDA from acquisitions prior to ownership

8,320

9,725

7,978

4,842

1,882

-

-

AHEBITDA from dispositions/assets held for sale

(366)

(1,517)

(1,333)

(872)

(56)

(295)

134

AHEBITDA from non-hotel property (2)

796

(222)

-

-

-

-

-

Comparable Hotels AHEBITDA

$115,499

$149,230

$138,806

$105,708

$111,619

$151,385

$139,222

(1)
Represents the Company's actual Adjusted Hotel EBITDA which excludes Adjusted EBITDAre from the non-hotel property starting in the second half of 2023, subsequent to its lease to a third-party hotel operator for all hotel operations.
(2)
Represents Adjusted Hotel EBITDA from the non-hotel property in the first half of 2023, prior to its lease to a third-party hotel operator for all hotel operations.

Note: Comparable Hotels is defined as the 223 hotels owned and held for use by the Company as of September 30, 2024, and excludes the non-hotel property. For hotels acquired during the periods noted, the Company has included, as applicable, results of those hotels for periods prior to the Company's ownership, and for dispositions and assets held for sale, results have been excluded for the Company's period of ownership. Results for periods prior to the Company's ownership have not been included in the Company's actual Consolidated Financial Statements and are included only for comparison purposes. Results included for periods prior to the Company's ownership are based on information from the prior owner of each hotel and have not been audited or adjusted.

Reconciliation of net income to non-GAAP financial measures is included in the following pages.

Page | 12

Apple Hospitality REIT, Inc.

Same Store Hotels Operating Metrics and Statistical Data

(Unaudited)

(in thousands, except statistical data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

% Change

% Change

2024

2023

2023

2024

2023

2023

Operating income (Actual)

$77,726

$76,295

1.9%

$242,856

$208,571

16.4%

Operating margin % (Actual)

20.5%

21.3%

(80 bps)

22.1%

20.2%

190 bps

Same Store Hotels Total Revenue

$352,449

$350,190

0.6%

$1,025,045

$1,010,544

1.4%

Same Store Hotels Total Operating Expenses

223,468

220,152

1.5%

652,328

633,835

2.9%

Same Store Hotels Adjusted Hotel EBITDA

$128,981

$130,038

(0.8%)

$372,717

$376,709

(1.1%)

Same Store Hotels Adjusted Hotel EBITDA Margin %

36.6%

37.1%

(50 bps)

36.4%

37.3%

(90 bps)

ADR (Same Store Hotels)

$160.84

$159.59

0.8%

$158.13

$157.85

0.2%

Occupancy (Same Store Hotels)

77.0%

77.2%

(0.3%)

76.3%

75.9%

0.5%

RevPAR (Same Store Hotels)

$123.90

$123.21

0.6%

$120.70

$119.76

0.8%

ADR (Actual)

$162.57

$159.36

2.0%

$159.78

$157.61

1.4%

Occupancy (Actual)

77.0%

77.1%

(0.1%)

76.3%

75.8%

0.7%

RevPAR (Actual)

$125.10

$122.91

1.8%

$121.84

$119.48

2.0%

Reconciliation to Actual Results

Total Revenue (Actual)

$378,843

$358,260

$1,098,432

$1,031,344

Revenue from acquisitions

(25,655)

(2,109)

(65,199)

(2,134)

Revenue from dispositions/assets held for sale

(518)

(3,949)

(3,421)

(10,931)

Revenue from non-hotel property

(221)

(2,012)

(4,767)

(7,735)

Same Store Hotels Total Revenue

$352,449

$350,190

$1,025,045

$1,010,544

Adjusted Hotel EBITDA (AHEBITDA) (Actual) (1)

$139,088

$132,161

$400,561

$380,154

AHEBITDA from acquisitions

(10,241)

(790)

(27,627)

(803)

AHEBITDA from dispositions/assets held for sale

134

(1,333)

(217)

(3,216)

AHEBITDA from non-hotel property (2)

-

-

-

574

Same Store Hotels AHEBITDA

$128,981

$130,038

$372,717

$376,709

(1)
Represents the Company's actual Adjusted Hotel EBITDA which excludes Adjusted EBITDAre from the non-hotel property starting in the second half of 2023, subsequent to its lease to a third-party hotel operator for all hotel operations.
(2)
Represents Adjusted Hotel EBITDA from the non-hotel property in the first half of 2023, prior to its lease to a third-party hotel operator for all hotel operations.

Note: Same Store Hotels is defined as the 215 hotels owned and held for use by the Company as of January 1, 2023, and during the entirety of the periods being compared, and excludes the non-hotel property. This information has not been audited.

Reconciliation of net income to non-GAAP financial measures is included in the following pages.

Page | 13

Apple Hospitality REIT, Inc.

Same Store Hotels Quarterly Operating Metrics and Statistical Data

(Unaudited)

(in thousands, except statistical data)

2023

2024

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Operating income (Actual)

$49,247

$83,029

$76,295

$38,910

$71,615

$93,515

$77,726

Operating margin % (Actual)

15.8%

23.0%

21.3%

12.5%

21.7%

24.0%

20.5%

Same Store Hotels Total Revenue

$305,778

$354,576

$350,190

$299,462

$309,463

$363,133

$352,449

Same Store Hotels Total Operating Expenses

198,599

215,084

220,152

201,549

206,723

222,137

223,468

Same Store Hotels Adjusted Hotel EBITDA

$107,179

$139,492

$130,038

$97,913

$102,740

$140,996

$128,981

Same Store Hotels Adjusted Hotel EBITDA Margin %

35.1%

39.3%

37.1%

32.7%

33.2%

38.8%

36.6%

ADR (Same Store Hotels)

$152.52

$160.98

$159.59

$149.71

$152.04

$160.98

$160.84

Occupancy (Same Store Hotels)

72.1%

78.2%

77.2%

69.7%

72.0%

79.9%

77.0%

RevPAR (Same Store Hotels)

$109.98

$125.96

$123.21

$104.42

$109.47

$128.70

$123.90

ADR (Actual)

$152.01

$160.98

$159.36

$149.88

$153.18

$162.98

$162.57

Occupancy (Actual)

72.0%

78.2%

77.1%

69.6%

72.0%

79.8%

77.0%

RevPAR (Actual)

$109.46

$125.96

$122.91

$104.27

$110.25

$130.07

$125.10

Reconciliation to Actual Results

Total Revenue (Actual)

$311,454

$361,630

$358,260

$312,456

$329,512

$390,077

$378,843

Revenue from acquisitions

-

(25)

(2,109)

(7,522)

(16,185)

(23,359)

(25,655)

Revenue from dispositions/assets held for sale

(2,833)

(4,149)

(3,949)

(3,345)

(1,821)

(1,082)

(518)

Revenue from non-hotel property

(2,843)

(2,880)

(2,012)

(2,127)

(2,043)

(2,503)

(221)

Same Store Hotels Total Revenue

$305,778

$354,576

$350,190

$299,462

$309,463

$363,133

$352,449

Adjusted Hotel EBITDA (AHEBITDA) (Actual) (1)

$106,749

$141,244

$132,161

$101,738

$109,793

$151,680

$139,088

AHEBITDA from acquisitions

-

(13)

(790)

(2,953)

(6,997)

(10,389)

(10,241)

AHEBITDA from dispositions/assets held for sale

(366)

(1,517)

(1,333)

(872)

(56)

(295)

134

AHEBITDA from non-hotel property (2)

796

(222)

-

-

-

-

-

Same Store Hotels AHEBITDA

$107,179

$139,492

$130,038

$97,913

$102,740

$140,996

$128,981

(1)
Represents the Company's actual Adjusted Hotel EBITDA which excludes Adjusted EBITDAre from the non-hotel property starting in the second half of 2023, subsequent to its lease to a third-party hotel operator for all hotel operations.
(2)
Represents Adjusted Hotel EBITDA from the non-hotel property in the first half of 2023, prior to its lease to a third-party hotel operator for all hotel operations.

Note: Same Store Hotels is defined as the 215 hotels owned and held for use by the Company as of January 1, 2023, and during the entirety of the periods being compared, and excludes the non-hotel property. This information has not been audited.

Reconciliation of net income to non-GAAP financial measures is included in the following pages.

Page | 14

Apple Hospitality REIT, Inc.

Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA

(Unaudited)

(in thousands)


EBITDA is a commonly used measure of performance in many industries and is defined as net income (loss) excluding interest, income taxes, depreciation and amortization. The Company believes EBITDA is useful to investors because it helps the Company and its investors evaluate the ongoing operating performance of the Company by removing the impact of its capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization). In addition, certain covenants included in the agreements governing the Company's indebtedness use EBITDA, as defined in the specific credit agreement, as a measure of financial compliance.

In addition to EBITDA, the Company also calculates and presents EBITDAre in accordance with standards established by the National Association of Real Estate Investment Trusts ("Nareit"), which defines EBITDAre as EBITDA, excluding gains and losses from the sale of certain real estate assets (including gains and losses from change in control), plus real estate related impairments, and adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates. The Company presents EBITDAre because it believes that it provides further useful information to investors in comparing its operating performance between periods and between REITs that report EBITDAre using the Nareit definition.

The Company also considers the exclusion of non-cash straight-line operating ground lease expense from EBITDAre useful, as this expense does not reflect the underlying performance of the related hotels (Adjusted EBITDAre).

The Company further excludes actual corporate-level general and administrative expense for the Company as well as Adjusted EBITDAre from the non-hotel property from Adjusted EBITDAre (Adjusted Hotel EBITDA) to isolate property-level operational performance over which the Company's hotel operators have direct control. The Company believes Adjusted Hotel EBITDA provides useful supplemental information to investors regarding operating performance and it is used by management to measure the performance of the Company's hotels and effectiveness of the operators of the hotels.

The following table reconciles the Company's GAAP net income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA on a quarterly basis for 2023 and 2024:

2023

2024

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Net income

$32,923

$65,289

$58,512

$20,765

$54,050

$73,931

$56,266

Depreciation and amortization

45,906

45,994

45,498

45,844

46,823

47,715

48,143

Amortization of favorable and unfavorable operating leases, net

97

85

99

102

102

102

102

Interest and other expense, net

16,004

17,499

17,470

17,884

17,309

19,370

21,217

Income tax expense

320

241

313

261

256

214

243

EBITDA

95,250

129,108

121,892

84,856

118,540

141,332

125,971

Gain on sale of real estate

-

-

-

-

(17,766)

(449)

-

Loss on impairment of depreciable real estate assets

-

-

-

5,644

-

-

2,896

EBITDAre

95,250

129,108

121,892

90,500

100,774

140,883

128,867

Non-cash straight-line operating ground lease expense

38

36

35

36

36

33

33

Adjusted EBITDAre

95,288

129,144

121,927

90,536

100,810

140,916

128,900

General and administrative expense

11,461

12,100

11,079

12,761

10,584

11,065

9,190

Adjusted EBITDAre from non-hotel property (1)

-

-

(845)

(1,559)

(1,601)

(301)

998

Adjusted Hotel EBITDA

$106,749

$141,244

$132,161

$101,738

$109,793

$151,680

$139,088

(1)
Includes results of the non-hotel property subsequent to its lease to a third-party hotel operator for all hotel operations. This property's Adjusted EBITDAre results are not included in Adjusted Hotel EBITDA starting in the second half of 2023.

Page | 15

Apple Hospitality REIT, Inc.

Reconciliation of Net Income to FFO and MFFO

(Unaudited)

(in thousands)

The Company calculates and presents FFO in accordance with standards established by Nareit, which defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains and losses from the sale of certain real estate assets (including gains and losses from change in control), extraordinary items as defined by GAAP, and the cumulative effect of changes in accounting principles, plus real estate related depreciation, amortization and impairments, and adjustments for unconsolidated affiliates. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company's operations. The Company further believes that by excluding the effects of these items, FFO is useful to investors in comparing its operating performance between periods and between REITs that report FFO using the Nareit definition. FFO as presented by the Company is applicable only to its common shareholders, but does not represent an amount that accrues directly to common shareholders.

The Company calculates MFFO by further adjusting FFO for the exclusion of amortization of finance ground lease assets, amortization of favorable and unfavorable operating leases, net and non-cash straight-line operating ground lease expense, as these expenses do not reflect the underlying performance of the related hotels. The Company presents MFFO when evaluating its performance because it believes that it provides further useful supplemental information to investors regarding its ongoing operating performance.

The following table reconciles the Company's GAAP net income to FFO and MFFO for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

Net income

$56,266

$58,512

$184,247

$156,724

Depreciation of real estate owned

47,383

44,734

140,394

135,105

Gain on sale of real estate

-

-

(18,215)

-

Loss on impairment of depreciable real estate assets

2,896

-

2,896

-

Funds from operations

106,545

103,246

309,322

291,829

Amortization of finance ground lease assets

759

759

2,278

2,278

Amortization of favorable and unfavorable operating leases, net

102

99

306

281

Non-cash straight-line operating ground lease expense

33

35

102

109

Modified funds from operations

$107,439

$104,139

$312,008

$294,497

Page | 16

Apple Hospitality REIT, Inc.

2024 Guidance Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA and Comparable Hotels Adjusted Hotel EBITDA

(Unaudited)

(in thousands)

The guidance of net income, EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA and Comparable Hotels Adjusted Hotel EBITDA (and all other guidance given) are forward-looking statements and are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause actual results and performance to differ materially from those expressed or implied by these forecasts. Although the Company believes the expectations reflected in the forecasts are based upon reasonable assumptions, there can be no assurance that the expectations will be achieved or that the results will not be materially different. Risks that may affect these assumptions and forecasts include, but are not limited to, the following: changes in political, economic, competitive and specific market conditions; the amount and timing of announced or future acquisitions and dispositions of hotel properties; the level of capital expenditures may change significantly, which will directly affect the level of depreciation expense, interest expense and net income; the amount and timing of debt repayments may change significantly based on market conditions, which will directly affect the level of interest expense and net income; the amount and timing of transactions involving the Company's common stock may change based on market conditions; and other risks and uncertainties associated with the Company's business described herein and in filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

The following table reconciles the Company's GAAP net income guidance to EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA and Comparable Hotels Adjusted Hotel EBITDA guidance for the year ending December 31, 2024:

Year Ending December 31, 2024

Low-End

High-End

Net income

$203,656

$221,456

Depreciation and amortization

189,000

186,000

Amortization of favorable and unfavorable leases, net

408

408

Interest and other expense, net

80,000

78,000

Income tax expense

700

1,100

EBITDA

$473,764

$486,964

Gain on sale of real estate

(18,500)

(20,500)

Loss on impairment of depreciable real estate

2,896

2,896

EBITDAre

$458,160

$469,360

Non-cash straight-line operating ground lease expense

135

135

Adjusted EBITDAre

$458,295

$469,495

General and administrative expense

37,500

42,500

AEBITDAre from non-hotel property (1)

1,000

(1,000)

Adjusted Hotel EBITDA

$496,795

$510,995

AHEBITDA from acquisitions prior to ownership (2)

1,882

1,882

AHEBITDA from dispositions

(1,977)

(1,977)

Comparable Hotels Adjusted Hotel EBITDA

$496,700

$510,900

(1)
Represents Adjusted EBITDAre from the non-hotel property.
(2)
Results for periods prior to the Company's ownership have not been included in the Company's actual Consolidated Financial Statements and are included only for comparison purposes. Results included for periods prior to the Company's ownership are based on information from the prior owner of each hotel and have not been audited or adjusted.

Page | 17

Apple Hospitality REIT, Inc.

Debt Summary

(Unaudited)

($ in thousands)

September 30, 2024

October 1 -

December 31,

Fair Market

2024

2025

2026

2027

2028

Thereafter

Total

Value

Total debt:

Maturities

$

2,109

$

295,140

$

315,149

$

278,602

$

334,066

$

281,948

$

1,507,014

$

1,476,149

Average interest rates (1)

4.9

%

4.9

%

5.0

%

5.0

%

4.4

%

3.8

%

Variable-rate debt:

Maturities

$

-

$

225,000

$

240,500

$

275,000

$

300,000

$

85,000

$

1,125,500

$

1,125,180

Average interest rates (1)

5.1

%

5.2

%

5.3

%

5.3

%

4.7

%

3.0

%

Fixed-rate debt:

Maturities

$

2,109

$

70,140

$

74,649

$

3,602

$

34,066

$

196,948

$

381,514

$

350,969

Average interest rates

4.1

%

4.0

%

4.0

%

4.1

%

4.1

%

4.1

%

(1)
The average interest rate gives effect to interest rate swaps, as applicable.

Note: See further information on the Company's indebtedness in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

Page | 18

Apple Hospitality REIT, Inc.

Comparable Hotels Operating Metrics by Market

Three Months Ended September 30

(Unaudited)

Top 20 Markets

Occupancy

ADR

RevPAR

% of Adjusted Hotel EBITDA

# of Hotels

Q3 2024

Q3 2023

% Change

Q3 2024

Q3 2023

% Change

Q3 2024

Q3 2023

% Change

Q3 2024

Top 20 Markets

Portland, ME

3

87.0%

93.4%

(6.9%)

$329.17

$310.50

6.0%

$286.53

$289.95

(1.2%)

6.2%

San Diego, CA

7

80.1%

81.5%

(1.7%)

$210.12

$209.81

0.1%

$168.23

$171.05

(1.6%)

6.1%

Los Angeles, CA

8

87.8%

88.4%

(0.7%)

$196.05

$192.58

1.8%

$172.05

$170.21

1.1%

5.4%

Seattle, WA

4

90.8%

89.6%

1.3%

$240.83

$231.71

3.9%

$218.70

$207.68

5.3%

5.1%

Chicago, IL

7

81.4%

76.4%

6.5%

$152.58

$146.84

3.9%

$124.21

$112.18

10.7%

4.1%

Orange County, CA

6

83.9%

84.0%

(0.1%)

$172.99

$175.13

(1.2%)

$145.07

$147.15

(1.4%)

3.7%

Alaska

2

90.0%

93.2%

(3.4%)

$338.85

$302.93

11.9%

$305.05

$282.23

8.1%

3.5%

Salt Lake City/Ogden, UT

5

81.6%

79.8%

2.3%

$154.13

$153.42

0.5%

$125.78

$122.38

2.8%

3.1%

Norfolk/Virginia Beach, VA

4

82.1%

85.3%

(3.8%)

$223.68

$230.22

(2.8%)

$183.54

$196.28

(6.5%)

3.0%

Washington, DC

5

76.3%

78.3%

(2.6%)

$172.91

$169.62

1.9%

$131.90

$132.76

(0.6%)

2.9%

Fort Worth/Arlington, TX

6

80.6%

76.9%

4.8%

$156.54

$151.38

3.4%

$126.17

$116.44

8.4%

2.7%

North Carolina East

4

76.2%

82.3%

(7.4%)

$177.78

$179.48

(0.9%)

$135.53

$147.77

(8.3%)

2.1%

Nashville, TN

5

74.1%

86.9%

(14.7%)

$155.74

$154.30

0.9%

$115.47

$134.06

(13.9%)

2.0%

Melbourne, FL

3

88.4%

78.5%

12.6%

$188.74

$181.66

3.9%

$166.93

$142.61

17.1%

2.0%

Madison, WI

2

68.2%

76.1%

(10.4%)

$219.80

$212.15

3.6%

$150.01

$161.52

(7.1%)

2.0%

Phoenix, AZ

10

69.5%

69.1%

0.6%

$115.24

$114.42

0.7%

$80.11

$79.05

1.3%

1.9%

Omaha, NE

4

78.4%

69.0%

13.6%

$132.99

$137.07

(3.0%)

$104.25

$94.54

10.3%

1.8%

Denver, CO

3

77.8%

79.6%

(2.3%)

$173.20

$182.89

(5.3%)

$134.74

$145.63

(7.5%)

1.8%

Richmond/Petersburg, VA

3

67.5%

68.2%

(1.0%)

$184.49

$178.64

3.3%

$124.46

$121.81

2.2%

1.8%

Oklahoma City, OK

4

75.5%

76.8%

(1.7%)

$135.36

$131.30

3.1%

$102.23

$100.88

1.3%

1.5%

Top 20 Markets

95

79.5%

79.9%

(0.5%)

$183.11

$180.11

1.7%

$145.49

$143.90

1.1%

62.7%

All Other Markets

128

74.8%

74.9%

(0.1%)

$142.88

$142.34

0.4%

$106.91

$106.67

0.2%

37.3%

Total Portfolio

223

77.0%

77.3%

(0.4%)

$162.66

$160.78

1.2%

$125.30

$124.25

0.8%

100.0%

Note: Market categorization based on STR designation. Top 20 markets based on Comparable Hotels Adjusted Hotel EBITDA contribution.

Page | 19

Apple Hospitality REIT, Inc.

Comparable Hotels Operating Metrics by Market

Nine Months Ended September 30

(Unaudited)

Top 20 Markets

Occupancy

ADR

RevPAR

% of Adjusted Hotel EBITDA

# of Hotels

YTD 2024

YTD 2023

% Change

YTD 2024

YTD 2023

% Change

YTD 2024

YTD 2023

% Change

YTD 2024

Top 20 Markets

Phoenix, AZ

10

79.7%

78.7%

1.3%

$160.27

$162.61

(1.4%)

$127.72

$127.95

(0.2%)

5.5%

San Diego, CA

7

77.6%

78.2%

(0.8%)

$193.94

$192.65

0.7%

$150.50

$150.71

(0.1%)

5.5%

Los Angeles, CA

8

85.8%

85.1%

0.8%

$186.94

$187.80

(0.5%)

$160.32

$159.86

0.3%

5.0%

Seattle, WA

4

84.4%

83.5%

1.1%

$208.55

$201.75

3.4%

$176.02

$168.54

4.4%

3.8%

Washington, DC

5

78.4%

77.7%

0.9%

$187.32

$180.48

3.8%

$146.95

$140.26

4.8%

3.6%

Orange County, CA

6

79.8%

79.6%

0.3%

$168.17

$170.31

(1.3%)

$134.27

$135.59

(1.0%)

3.4%

Portland, ME

3

78.2%

76.2%

2.6%

$227.03

$231.78

(2.0%)

$177.50

$176.51

0.6%

3.2%

Salt Lake City/Ogden, UT

5

79.8%

78.9%

1.1%

$156.22

$155.11

0.7%

$124.70

$122.46

1.8%

3.1%

Fort Worth/Arlington, TX

6

83.3%

80.4%

3.6%

$158.98

$157.22

1.1%

$132.49

$126.42

4.8%

3.1%

Alaska

2

89.2%

85.2%

4.7%

$274.81

$261.87

4.9%

$245.12

$222.99

9.9%

2.7%

Chicago, IL

7

71.5%

68.3%

4.7%

$141.96

$139.73

1.6%

$101.47

$95.48

6.3%

2.6%

Nashville, TN

5

78.6%

82.1%

(4.3%)

$158.69

$163.43

(2.9%)

$124.80

$134.18

(7.0%)

2.5%

Melbourne, FL

3

87.0%

84.1%

3.4%

$204.82

$193.27

6.0%

$178.18

$162.50

9.6%

2.4%

Richmond/Petersburg, VA

3

71.6%

69.5%

3.0%

$186.79

$183.15

2.0%

$133.72

$127.22

5.1%

2.4%

Omaha, NE

4

72.8%

70.3%

3.6%

$157.66

$156.97

0.4%

$114.71

$110.43

3.9%

2.3%

Norfolk/Virginia Beach, VA

4

77.3%

78.6%

(1.7%)

$182.73

$185.24

(1.4%)

$141.22

$145.67

(3.1%)

2.1%

North Carolina East

4

74.0%

78.2%

(5.4%)

$156.81

$158.12

(0.8%)

$116.07

$123.66

(6.1%)

1.7%

Houston, TX

6

74.8%

67.2%

11.3%

$122.16

$115.89

5.4%

$91.37

$77.86

17.4%

1.5%

Miami, FL

3

87.7%

88.3%

(0.7%)

$159.21

$160.72

(0.9%)

$139.65

$141.93

(1.6%)

1.5%

Oklahoma City, OK

4

76.6%

75.4%

1.6%

$136.52

$137.19

(0.5%)

$104.62

$103.50

1.1%

1.5%

Top 20 Markets

99

78.8%

77.6%

1.5%

$172.57

$171.57

0.6%

$136.01

$133.22

2.1%

59.4%

All Other Markets

124

74.0%

74.2%

(0.3%)

$147.60

$147.09

0.3%

$109.24

$109.20

0.0%

40.6%

Total Portfolio

223

76.4%

75.9%

0.7%

$160.19

$159.37

0.5%

$122.32

$120.98

1.1%

100.0%

Note: Market categorization based on STR designation. Top 20 markets based on Comparable Hotels Adjusted Hotel EBITDA contribution.

Page | 20

Apple Hospitality REIT, Inc.

Comparable Hotels Operating Metrics by Region

Three Months Ended September 30

(Unaudited)

Region

Occupancy

ADR

RevPAR

% of Adjusted Hotel EBITDA

# of Hotels

Q3 2024

Q3 2023

% Change

Q3 2024

Q3 2023

% Change

Q3 2024

Q3 2023

% Change

Q3 2024

STR Region

East North Central

17

76.9%

75.7%

1.6%

$165.97

$156.35

6.2%

$127.59

$118.35

7.8%

9.6%

East South Central

27

74.9%

79.2%

(5.4%)

$146.35

$147.50

(0.8%)

$109.55

$116.82

(6.2%)

8.1%

Middle Atlantic

12

78.9%

78.8%

0.1%

$167.03

$163.16

2.4%

$131.72

$128.53

2.5%

5.7%

Mountain

25

74.8%

75.6%

(1.1%)

$143.07

$142.05

0.7%

$107.05

$107.40

(0.3%)

10.0%

New England

6

83.3%

87.9%

(5.2%)

$271.42

$259.91

4.4%

$226.05

$228.49

(1.1%)

7.5%

Pacific

33

84.4%

84.9%

(0.6%)

$206.23

$203.03

1.6%

$174.00

$172.45

0.9%

26.1%

South Atlantic

53

75.3%

76.3%

(1.3%)

$155.38

$154.25

0.7%

$117.06

$117.69

(0.5%)

19.4%

West North Central

16

76.4%

72.9%

4.8%

$139.32

$143.11

(2.6%)

$106.38

$104.27

2.0%

5.2%

West South Central

34

73.4%

70.8%

3.7%

$130.03

$128.25

1.4%

$95.38

$90.75

5.1%

8.4%

Total Portfolio

223

77.0%

77.3%

(0.4%)

$162.66

$160.78

1.2%

$125.30

$124.25

0.8%

100.0%

Note: Region categorization based on STR designation.

Apple Hospitality REIT, Inc.

Comparable Hotels Operating Metrics by Region

Nine Months Ended September 30

(Unaudited)

Region

Occupancy

ADR

RevPAR

% of Adjusted Hotel EBITDA

# of Hotels

YTD 2024

YTD 2023

% Change

YTD 2024

YTD 2023

% Change

YTD 2024

YTD 2023

% Change

YTD 2024

STR Region

East North Central

17

69.5%

67.6%

2.8%

$151.51

$145.98

3.8%

$105.29

$98.67

6.7%

6.2%

East South Central

27

76.9%

78.2%

(1.7%)

$148.32

$149.01

(0.5%)

$114.03

$116.56

(2.2%)

9.5%

Middle Atlantic

12

74.5%

74.1%

0.5%

$157.56

$154.55

1.9%

$117.33

$114.58

2.4%

4.7%

Mountain

25

78.0%

77.8%

0.3%

$159.80

$158.70

0.7%

$124.66

$123.41

1.0%

13.9%

New England

6

74.9%

73.6%

1.8%

$204.28

$206.35

(1.0%)

$153.08

$151.84

0.8%

4.2%

Pacific

33

81.3%

80.8%

0.6%

$190.42

$189.86

0.3%

$154.81

$153.33

1.0%

22.8%

South Atlantic

53

76.9%

77.4%

(0.6%)

$160.42

$159.56

0.5%

$123.33

$123.51

(0.1%)

23.0%

West North Central

16

70.9%

70.4%

0.7%

$145.94

$145.83

0.1%

$103.44

$102.70

0.7%

5.2%

West South Central

34

75.8%

73.3%

3.4%

$134.92

$134.67

0.2%

$102.28

$98.72

3.6%

10.5%

Total Portfolio

223

76.4%

75.9%

0.7%

$160.19

$159.37

0.5%

$122.32

$120.98

1.1%

100.0%

Note: Region categorization based on STR designation.

Page | 21

Apple Hospitality REIT, Inc.

Comparable Hotels Operating Metrics by Chain Scale

Three Months Ended September 30

(Unaudited)

Chain Scale/Brand

Occupancy

ADR

RevPAR

% of Adjusted Hotel EBITDA

# of Hotels

Q3 2024

Q3 2023

% Change

Q3 2024

Q3 2023

% Change

Q3 2024

Q3 2023

% Change

Q3 2024

Upscale

AC Hotels

4

82.8%

83.5%

(0.8%)

$263.05

$256.03

2.7%

$217.81

$213.75

1.9%

5.9%

Aloft

1

88.1%

90.9%

(3.1%)

$288.25

$269.79

6.8%

$253.86

$245.36

3.5%

1.6%

Courtyard

34

75.0%

75.8%

(1.1%)

$173.36

$172.62

0.4%

$129.99

$130.91

(0.7%)

19.0%

Hilton Garden Inn

40

74.8%

74.5%

0.4%

$150.80

$152.06

(0.8%)

$112.85

$113.25

(0.4%)

15.6%

Homewood Suites

29

83.6%

82.3%

1.6%

$146.34

$147.32

(0.7%)

$122.41

$121.28

0.9%

9.2%

Hyatt House

2

80.4%

76.6%

5.0%

$144.50

$145.36

(0.6%)

$116.24

$111.33

4.4%

0.9%

Hyatt Place

3

70.3%

73.4%

(4.2%)

$126.30

$128.12

(1.4%)

$88.84

$94.00

(5.5%)

0.5%

Residence Inn

30

81.0%

83.8%

(3.3%)

$183.13

$176.79

3.6%

$148.35

$148.09

0.2%

16.9%

SpringHill Suites

9

73.5%

75.2%

(2.3%)

$150.91

$148.34

1.7%

$110.95

$111.58

(0.6%)

4.0%

Upscale Total

152

77.7%

78.2%

(0.6%)

$166.10

$164.86

0.8%

$129.00

$128.98

0.0%

73.6%

Upper Midscale

Fairfield

10

70.9%

71.4%

(0.7%)

$126.44

$130.96

(3.5%)

$89.65

$93.50

(4.1%)

2.0%

Hampton

36

75.9%

74.8%

1.5%

$152.22

$151.46

0.5%

$115.48

$113.32

1.9%

12.5%

Home2 Suites

10

84.6%

86.6%

(2.3%)

$166.49

$156.83

6.2%

$140.91

$135.77

3.8%

4.9%

TownePlace Suites

9

75.3%

74.0%

1.8%

$121.75

$119.69

1.7%

$91.74

$88.52

3.6%

2.1%

Upper Midscale Total

65

76.3%

75.9%

0.5%

$147.43

$145.89

1.1%

$112.49

$110.69

1.6%

21.5%

Upper Upscale

Embassy Suites

4

76.7%

82.9%

(7.5%)

$228.74

$223.97

2.1%

$175.42

$185.70

(5.5%)

3.9%

Marriott

2

66.1%

59.7%

10.7%

$164.49

$159.88

2.9%

$108.81

$95.39

14.1%

1.0%

Upper Upscale Total

6

72.0%

70.1%

2.7%

$202.43

$194.03

4.3%

$145.73

$136.09

7.1%

4.9%

Total Portfolio

223

77.0%

77.3%

(0.4%)

$162.66

$160.78

1.2%

$125.30

$124.25

0.8%

100.0%

Note: Chain scale categorization based on STR designation.

Page | 22

Apple Hospitality REIT, Inc.

Comparable Hotels Operating Metrics by Chain Scale

Nine Months Ended September 30

(Unaudited)

Chain Scale/Brand

Occupancy

ADR

RevPAR

% of Adjusted Hotel EBITDA

# of Hotels

YTD 2024

YTD 2023

% Change

YTD 2024

YTD 2023

% Change

YTD 2024

YTD 2023

% Change

YTD 2024

Upscale

AC Hotels

4

79.7%

77.9%

2.3%

$238.32

$232.46

2.5%

$190.01

$181.20

4.9%

5.1%

Aloft

1

72.4%

72.5%

(0.1%)

$208.90

$203.63

2.6%

$151.17

$147.63

2.4%

0.7%

Courtyard

34

74.0%

74.1%

(0.1%)

$167.29

$165.60

1.0%

$123.85

$122.66

1.0%

18.5%

Hilton Garden Inn

40

73.4%

73.0%

0.5%

$150.25

$152.45

(1.4%)

$110.28

$111.36

(1.0%)

15.6%

Homewood Suites

29

82.9%

82.3%

0.7%

$152.49

$151.67

0.5%

$126.46

$124.81

1.3%

10.4%

Hyatt House

2

80.4%

78.5%

2.4%

$159.13

$163.21

(2.5%)

$127.87

$128.17

(0.2%)

1.1%

Hyatt Place

3

78.9%

77.8%

1.4%

$145.70

$149.16

(2.3%)

$114.97

$116.05

(0.9%)

1.1%

Residence Inn

30

79.5%

79.4%

0.1%

$170.62

$167.57

1.8%

$135.59

$133.04

1.9%

15.1%

SpringHill Suites

9

74.9%

74.7%

0.3%

$158.21

$153.26

3.2%

$118.53

$114.48

3.5%

4.7%

Upscale Total

152

76.7%

76.4%

0.4%

$162.53

$161.51

0.6%

$124.65

$123.34

1.1%

72.3%

Upper Midscale

Fairfield

10

71.3%

71.2%

0.1%

$128.49

$132.08

(2.7%)

$91.55

$94.05

(2.7%)

2.3%

Hampton

36

74.7%

73.7%

1.4%

$155.34

$156.57

(0.8%)

$116.06

$115.42

0.6%

13.5%

Home2 Suites

10

83.2%

85.4%

(2.6%)

$164.74

$161.08

2.3%

$137.03

$137.49

(0.3%)

4.8%

TownePlace Suites

9

78.6%

77.6%

1.3%

$124.65

$123.60

0.8%

$97.94

$95.91

2.1%

2.5%

Upper Midscale Total

65

75.8%

75.4%

0.5%

$149.38

$149.95

(0.4%)

$113.28

$113.11

0.2%

23.1%

Upper Upscale

Embassy Suites

4

79.2%

82.3%

(3.8%)

$216.23

$211.15

2.4%

$171.21

$173.71

(1.4%)

3.0%

Marriott

2

69.4%

61.8%

12.3%

$167.28

$166.29

0.6%

$116.12

$102.75

13.0%

1.6%

Upper Upscale Total

6

74.2%

71.0%

4.5%

$193.11

$189.72

1.8%

$143.38

$134.73

6.4%

4.6%

Total Portfolio

223

76.4%

75.9%

0.7%

$160.19

$159.37

0.5%

$122.32

$120.98

1.1%

100.0%

Note: Chain scale categorization based on STR designation.

Page | 23

Apple Hospitality REIT, Inc.

Comparable Hotels Operating Metrics by Location

Three Months Ended September 30

(Unaudited)

Location

Occupancy

ADR

RevPAR

% of Adjusted Hotel EBITDA

# of Hotels

Q3 2024

Q3 2023

% Change

Q3 2024

Q3 2023

% Change

Q3 2024

Q3 2023

% Change

Q3 2024

STR Location

Airport

20

81.3%

83.7%

(2.9%)

$146.54

$143.42

2.2%

$119.10

$120.00

(0.8%)

7.5%

Interstate

8

76.3%

75.7%

0.8%

$152.21

$150.48

1.1%

$116.12

$113.89

2.0%

2.4%

Resort

11

73.1%

74.0%

(1.2%)

$178.58

$179.03

(0.3%)

$130.63

$132.43

(1.4%)

6.1%

Small Metro/Town

3

78.5%

81.7%

(3.9%)

$125.72

$123.45

1.8%

$98.69

$100.91

(2.2%)

0.9%

Suburban

120

78.1%

77.4%

0.9%

$153.91

$152.77

0.7%

$120.27

$118.24

1.7%

45.1%

Urban

61

74.8%

75.8%

(1.3%)

$181.38

$178.56

1.6%

$135.62

$135.33

0.2%

38.0%

Total Portfolio

223

77.0%

77.3%

(0.4%)

$162.66

$160.78

1.2%

$125.30

$124.25

0.8%

100.0%

Note: Location categorization based on STR designation.

Apple Hospitality REIT, Inc.

Comparable Hotels Operating Metrics by Location

Nine Months Ended September 30

(Unaudited)

Location

Occupancy

ADR

RevPAR

% of Adjusted Hotel EBITDA

# of Hotels

YTD 2024

YTD 2023

% Change

YTD 2024

YTD 2023

% Change

YTD 2024

YTD 2023

% Change

YTD 2024

STR Location

Airport

20

82.1%

82.5%

(0.5%)

$150.81

$148.52

1.5%

$123.80

$122.57

1.0%

8.6%

Interstate

8

74.3%

71.5%

3.9%

$147.34

$143.90

2.4%

$109.48

$102.90

6.4%

2.2%

Resort

11

74.5%

75.4%

(1.2%)

$183.22

$178.69

2.5%

$136.48

$134.75

1.3%

7.0%

Small Metro/Town

3

80.6%

79.7%

1.1%

$125.01

$122.03

2.4%

$100.79

$97.27

3.6%

0.9%

Suburban

120

76.6%

76.0%

0.8%

$150.86

$150.54

0.2%

$115.61

$114.40

1.1%

44.4%

Urban

61

74.6%

74.2%

0.5%

$176.64

$176.49

0.1%

$131.80

$130.89

0.7%

36.9%

Total Portfolio

223

76.4%

75.9%

0.7%

$160.19

$159.37

0.5%

$122.32

$120.98

1.1%

100.0%

Note: Location categorization based on STR designation.

Page | 24