0001185185-15-002783.txt : 20151109 0001185185-15-002783.hdr.sgml : 20151109 20151105164725 ACCESSION NUMBER: 0001185185-15-002783 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20151105 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20151105 DATE AS OF CHANGE: 20151105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Apple Hospitality REIT, Inc. CENTRAL INDEX KEY: 0001418121 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 261379210 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-37389 FILM NUMBER: 151201361 BUSINESS ADDRESS: STREET 1: 814 EAST MAIN STREET CITY: RICHMOND STATE: VA ZIP: 23219 BUSINESS PHONE: 804.344.8121 MAIL ADDRESS: STREET 1: 814 EAST MAIN STREET CITY: RICHMOND STATE: VA ZIP: 23219 FORMER COMPANY: FORMER CONFORMED NAME: Apple REIT Nine, Inc. DATE OF NAME CHANGE: 20071109 8-K 1 ahr8k110415.htm 8-K ahr8k110415.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K 
 
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): November 5, 2015
 
APPLE HOSPITALITY REIT, INC.
(Exact name of registrant as specified in its charter)
 
Virginia
  
001-37389
  
26-1379210
(State or other jurisdiction
of incorporation)
  
(Commission File Number)
  
(I.R.S. Employer
Identification Number)
 
814 East Main Street, Richmond, Virginia
  
23219
(Address of principal executive offices)
  
(Zip Code)
 
(804) 344-8121
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
Apple Hospitality REIT, Inc. (which is referred to below as the “Company”) is filing this report in accordance with Items 2.02 and 9.01 of Form 8-K.

Item 2.02.  Results of Operations and Financial Condition.

On November 5, 2015, the Company announced its financial results for the three and nine months ended September 30, 2015. A copy of the Company’s press release is furnished as Exhibit 99.1 to this current report on Form 8-K.
 
The information contained in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any filing made by the Company under the Exchange Act or Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.  Financial Statements and Exhibits.

(d) Exhibits

 
 
 
 
 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

   
Apple Hospitality REIT, Inc.
   
By:
/s/ Justin G. Knight
 
Justin G. Knight
President and Chief Executive Officer
   
 
November 5, 2015
 

 

 
 
 
 EX-99.1 2 ex99-1.htm EX-99.1 ex99-1.htm
Exhibit 99.1
 
GRAPHIC
 
Apple Hospitality REIT, Inc. Reports Results of Operations for Third Quarter of 2015

Richmond, VA – November 5, 2015 – Apple Hospitality REIT, Inc. (NYSE: APLE) (the “Company” or “Apple Hospitality”) today announced results of operations for the third quarter of 2015.

Justin Knight, President and Chief Executive Officer, commented, “We are pleased to report continued improvement in operating fundamentals for Apple Hospitality. During the third quarter, we achieved Comparable Hotels RevPAR growth of more than six percent and Comparable Hotels Adjusted Hotel EBITDA growth of over 11 percent. Our portfolio of Marriott® and Hilton® branded upscale hotels continues to benefit from broad geographic diversification, with locations across more than 80 MSAs. We anticipate full-year 2015 operations will be within our guidance for the year, and we believe the Company is well positioned for sustainable growth in the future.”

Selected Statistical and Financial Data
As of and For the Three and Nine Months Ended September 30, 2015
(Unaudited) (in thousands, except statistical and per share amounts)(1)

   
Three Months Ended
September 30,
          
Nine Months Ended
September 30,
        
   
2015
    
2014
    
% Change
    
2015
    
2014
    
% Change
  
                                     
Comparable Hotels ADR
   $ 133.57     $ 126.60       5.5 %   $ 131.02     $ 124.66       5.1 %
Comparable Hotels Occupancy
     80.6 %     79.9 %     0.9 %     79.0 %     77.8 %     1.5 %
Comparable Hotels RevPAR
   $ 107.62     $ 101.11       6.4 %   $ 103.49     $ 96.99       6.7 %
                                                 
Adjusted EBITDA
   $ 90,563     $ 83,625       8.3 %   $ 251,772     $ 217,706       15.6 %
Comparable Hotels Adjusted Hotel EBITDA
   $ 97,350     $ 87,418       11.4 %   $ 272,419     $ 245,031       11.2 %
Comparable Hotels Adjusted Hotel EBITDA Margin
     39.9 %     38.5 %  
+ 140 bps
       38.9 %     37.8 %  
+ 110 bps
  
Modified funds from operations (MFFO)
   $ 80,893     $ 76,502       5.7 %   $ 225,946     $ 198,478       13.8 %
MFFO per share
   $ 0.46     $ 0.41       12.2 %   $ 1.24     $ 1.19       4.2 %
Net income (loss)
   $ 46,968     $ 35,162       33.6 %   $ 135,080     $ (15,501 )     n/a  
Net income (loss) per share
   $ 0.27     $ 0.19       42.1 %   $ 0.74     $ (0.09 )     n/a  
                                                 
Distributions paid
   $ 52,576     $ 62,303       -15.6 %   $ 176,814     $ 169,862       4.1 %
Distributions paid per share
   $ 0.30     $ 0.33       -9.1 %   $ 0.97     $ 1.05       -7.6 %
                                                 
Total debt outstanding
   $ 964,246                                          
Net debt to trailing twelve month Adjusted EBITDA
     3.0                                          

¹Explanations of and reconciliations to Net Income of Adjusted EBITDA, Comparable Hotels Adjusted Hotel EBITDA and MFFO, are included at the end of this release.
 
Apple Hospitality defines metrics from “Comparable Hotels” as results generated by the 177 hotels owned as of September 30, 2015. For hotels acquired during the period, the Company has included, as applicable, results of those hotels for periods prior to the Company’s ownership, and for dispositions, 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.
 
 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 
 
Hotel Portfolio Overview
Apple Hospitality owns a highly diversified hotel portfolio, which helps insulate the revenue stream of the Company from regional economic dislocations that may occur from time to time. As of September 30, 2015, Apple Hospitality owned 177 hotels, with 22,782 rooms, comprised of 93 Marriott® branded hotels and 84 Hilton® branded hotels, with locations in more than 80 MSAs across 32 states.

Transactional Activity
During the nine months ended September 30, 2015, Apple Hospitality completed the disposition of 19 properties and used the availability on its credit facility created by the proceeds from sale to acquire seven hotels, five of which have been acquired since the end of the second quarter. During the third quarter, the following properties were acquired:  a new 170-room SpringHill Suites by Marriott® in Burbank, CA; a 190-room Courtyard by Marriott® in Burbank, CA; and a 245-room Courtyard by Marriott® in San Diego, CA. In October 2015, the Company acquired a dual-branded 102-room Courtyard by Marriott® and 78-room Residence Inn by Marriott® in Syracuse, NY. These transactions represent a continued effort to refine and enhance Apple Hospitality’s portfolio through the selective sale and purchase of assets.

Apple Hospitality has entered into agreements for the potential purchase of four additional hotels, all of which are under construction, for a total purchase price of approximately $81 million. The hotels currently under contract include:  a 128-room Home2 Suites by Hilton® in Atlanta, GA; a 124-room Courtyard by Marriott® in Ft. Worth, TX; and a 210-room dual-branded Hilton Garden Inn® and Home2 Suites by Hilton® property in Birmingham, AL. Although the Company is working towards acquiring these hotels, there are many conditions to closing that have not yet been satisfied, and there can be no assurance that a closing on any of these hotels will occur under the outstanding purchase contracts. If closing conditions are satisfied, the Company anticipates closing on the acquisitions of these hotels over the course of the next six to 21 months.

Share Repurchase Program
Effective July 8, 2015, as part of the implementation of its $500 million share repurchase program, Apple Hospitality established a written trading Plan (“Plan”) authorizing the repurchase of its common shares in open market transactions. The Plan is intended to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, which allows the Company, through a designated broker, to repurchase shares at times, when it might otherwise be prevented from doing so by securities laws or because of self-imposed trading blackout periods. Because repurchases under a 10b5-1 plan are subject to certain pricing, market and volume parameters, there is no guarantee as to the exact number of shares that will be repurchased under the Plan. The timing of share repurchases under the Plan and overall repurchase program will depend upon prevailing market conditions, regulatory requirements and other factors and may be suspended by the Company at any time.  As of September 30, 2015, the Company had purchased approximately 1.2 million of its common shares under the Plan, at a weighted-average market purchase price of approximately $17.59 per common share, for an aggregate purchase price of approximately $21.2 million. Purchases under the Plan have been funded, and the Company intends to fund future purchases, with availability under its credit facility.
 
 
 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 
 
Capital Improvements
Apple Hospitality consistently reinvests in its properties. During the nine months ended September 30, 2015, the Company invested approximately $33.5 million in capital expenditures, completing renovations on 16 hotels. The Company currently plans on investing an additional $20 million during the fourth quarter of 2015 with approximately 20 projects planned to begin.

Balance Sheet
At September 30, 2015, Apple Hospitality had approximately $964.2 million of total indebtedness with a current combined weighted average interest rate of approximately 3.8% for the remainder of 2015. The total indebtedness is comprised of approximately $463.7 million in property-level debt (40 hotels) and $500.5 million outstanding on its $965 million unsecured credit facility.  Apple Hospitality’s combined unrestricted cash and undrawn capacity on its revolving credit facility at September 30, 2015, was approximately $464.6 million. The Company’s net debt to trailing twelve months Adjusted EBITDA ratio stands at 3.0 times, which provides Apple Hospitality with ample financial capacity to fund capital requirements and pursue opportunities in the marketplace.

Shareholder Distributions
Apple Hospitality paid distributions of $0.30 per common share during the third quarter of 2015. Concurrent with the listing of the Company’s common shares on the New York Stock Exchange on May 18, 2015, the Company’s Board of Directors approved a regular monthly distribution of $0.10 per common share. Based on the Company’s common share closing price of $19.72 on October 30, 2015, the annualized distribution of $1.20 per common share represents an annual 6.1% yield. The Company’s Board of Directors, in consultation with management, will continue to regularly monitor the Company’s distribution rate relative to the performance of its hotels, capital improvement needs, varying economic cycles, acquisitions and dispositions. At its discretion, the Company’s Board of Directors may make adjustments as determined to be prudent in relation to other cash requirements of the Company.

2015 Outlook
Apple Hospitality is reaffirming its operational and financial outlook for the 2015 fiscal year for the Company. 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 the impact of any unanticipated developments in its business or changes in its operating environment.  For the full year 2015, the Company anticipates:
 
   
2015 Guidance
  
   
Low-End
    
High- End
  
             
Comparable Hotels RevPAR Growth
   5%     7%  
                 
Adjusted EBITDA
  
$310 million
    
$330 million
  

Earnings Call
The Company will host a quarterly conference call for investors and interested parties on Friday, November 6, 2015, at 10:00 AM Eastern Time. 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 1:00 PM Eastern Time on November 6, 2015, through midnight Eastern Time on November 20, 2015. To access the replay, the domestic dial-in number is (877) 870-5176, the international dial-in number is (858) 384-5517, and the passcode is 13621400. The archive of the webcast will be available on the Company's website for a limited time.
 
 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 

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 portfolios of upscale, select service hotels in the United States. The Company’s portfolio consists of 179 hotels, with approximately 22,950 guestrooms, diversified across the Hilton® and Marriott® families of brands with locations in urban, high-end suburban and developing markets across 32 states. For more information, please visit www.applehospitalityreit.com.
 
Forward-Looking Statements Disclaimer
Certain statements contained in this press release other than historical facts may be considered forward-looking statements. These forward-looking statements are predictions and generally can be identified by use of statements that include phrases such as “may,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “target,” “goal,” “plan,” “should,” “will,” “predict,” “potential,” 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 Apple Hospitality 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 Apple Hospitality to effectively acquire and dispose of properties; the ability of Apple Hospitality to implement its operating strategy; changes in general political, economic and competitive conditions and specific market conditions; adverse changes in the real estate and real estate capital markets; financing risks; the outcome of current and future litigation; regulatory proceedings or inquiries; and changes in laws or regulations or interpretations of current laws and regulations that impact Apple Hospitality’s business, assets or classification as a real estate investment trust.  Although Apple Hospitality 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 Apple Hospitality or any other person that the results or conditions described in such statements or the objectives and plans of Apple Hospitality will be achieved.  In addition, Apple Hospitality’s qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code.  Readers should carefully review Apple Hospitality’s financial statements and the notes thereto, as well as the risk factors described in Apple Hospitality’s filings with the Securities and Exchange Commission, including, but not limited to, in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2015.  Any forward-looking statement that Apple Hospitality makes speaks only as of the date of such statements.  Apple Hospitality 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, Director of Investor Services
(804) 727-6321
kclarke@applereit.com

For additional information or to receive press releases by email, visit www.applehospitalityreit.com.
 
 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 

Apple Hospitality REIT, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
 
   
September 30,
    
December 31,
  
   
2015
    
2014
  
   
(unaudited)
        
Assets
            
Investment in real estate, net of accumulated depreciation
of $390,065 and $296,559, respectively
   $ 3,651,482     $ 3,492,821  
Assets held for sale
     0       195,588  
Cash and cash equivalents
     105       0  
Restricted cash-furniture, fixtures and other escrows
     25,700       32,526  
Due from third party managers, net
     38,436       22,879  
Other assets, net
     42,770       35,935  
Total Assets
   $ 3,758,493     $ 3,779,749  
                 
Liabilities
                
Credit facility
   $ 500,500     $ 191,600  
Mortgage debt
     463,746       517,970  
Accounts payable and other liabilities
     80,525       55,555  
Total Liabilities
     1,044,771       765,125  
                 
Shareholders' Equity
                
Preferred stock, authorized 30,000,000 shares; none issued
and outstanding
     0       0  
Common stock, no par value, authorized 800,000,000 shares;
issued and outstanding 174,404,915 and 186,910,407 shares, respectively
     3,501,252       3,737,328  
Accumulated other comprehensive loss
     (6,163 )     (511 )
Distributions greater than net income
     (781,367 )     (722,193 )
Total Shareholders' Equity
     2,713,722       3,014,624  
                 
Total Liabilities and Shareholders' Equity
   $ 3,758,493     $ 3,779,749  
 
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, 2015.

 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 
 
Apple Hospitality REIT, Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(in thousands, except per share data)

   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2015
    
2014
    
2015
    
2014
  
Revenues:
                        
Room
   $ 221,978     $ 213,831     $ 628,982     $ 552,645  
Other
     18,577       18,053       56,299       48,928  
Total revenue
     240,555       231,884       685,281       601,573  
                                 
Expenses:
                                
Operating
     59,024       58,617       170,781       152,020  
Hotel administrative
     17,684       16,627       52,248       43,610  
Sales and marketing
     18,524       18,441       53,502       47,798  
Utilities
     9,505       9,587       25,222       22,965  
Repair and maintenance
     9,245       9,073       27,771       23,943  
Franchise fees
     10,360       9,762       29,069       25,137  
Management fees
     8,491       8,083       24,081       21,074  
Property taxes, insurance and other
     10,450       11,121       33,727       29,477  
Ground lease
     2,496       2,489       7,504       5,850  
General and administrative
     5,175       5,627       14,421       14,774  
Transaction and listing costs
     842       707       7,891       4,593  
Series B convertible preferred share expense
     0       0       0       117,133  
Loss on impairment of depreciable real estate assets
     0       8,600       0       8,600  
Depreciation
     32,351       31,095       94,205       81,408  
Total expenses
     184,147       189,829       540,422       598,382  
                                 
Operating income
     56,408       42,055       144,859       3,191  
                                 
Interest and other expense, net
     (9,302 )     (6,340 )     (24,265 )     (17,197 )
Gain on sale of real estate
     0       0       15,358       0  
                                 
Income (loss) before income taxes
     47,106       35,715       135,952       (14,006 )
                                 
Income tax expense
     (138 )     (553 )     (872 )     (1,495 )
                                 
Net income (loss)
   $ 46,968     $ 35,162     $ 135,080     $ (15,501 )
                                 
Other comprehensive income (loss):
                                
Unrealized gain (loss) on interest rate derivatives
     (5,978 )     757       (6,437 )     311  
Cash flow hedge losses reclassified to earnings
     0       0       785       0  
                                 
Comprehensive income (loss)
   $ 40,990     $ 35,919     $ 129,428     $ (15,190 )
                                 
Basic and diluted net income (loss) per common share
   $ 0.27     $ 0.19     $ 0.74     $ (0.09 )
                                 
Weighted average common shares outstanding - basic and diluted
     175,069       186,910       182,247       166,292  
 
Note:
The Consolidated Statements of Operations and Comprehensive Income (Loss) and corresponding footnotes can be found in the Company’s Quarterly Report on Form 10-Q, for the quarter ended September 30, 2015.
 
 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 

Apple Hospitality REIT, Inc.
Comparable Hotels Operating Metrics and Statistical Data
(Unaudited)
(in thousands except statistical data)
 
   
Three Months Ended
September 30,
          
Nine Months Ended
September 30,
        
   
2015
    
2014
    
% Change
    
2015
    
2014
    
% Change
  
                                     
Room revenue
   $ 225,201     $ 208,306       8.1 %   $ 640,093     $ 593,053       7.9 %
Other revenue
     18,906       18,547       1.9 %     59,624       55,769       6.9 %
Total revenue
     244,107       226,853       7.6 %     699,717       648,822       7.8 %
                                                 
Total operating expenses
     146,757       139,435       5.3 %     427,298       403,791       5.8 %
                                                 
Adjusted Hotel EBITDA
   $ 97,350     $ 87,418       11.4 %   $ 272,419     $ 245,031       11.2 %
Adjusted Hotel EBITDA Margin %
     39.9 %     38.5 %     3.6 %     38.9 %     37.8 %     2.9 %
                                                 
                                                 
ADR
   $ 133.57     $ 126.60       5.5 %   $ 131.02     $ 124.66       5.1 %
Occupancy
     80.6 %     79.9 %     0.9 %     79.0 %     77.8 %     1.5 %
RevPAR
   $ 107.62     $ 101.11       6.4 %   $ 103.49     $ 96.99       6.7 %
                                                 
Reconciliation to Actual Results
                                                
                                                 
Total Revenue (Actual)
   $ 240,555     $ 231,884             $ 685,281     $ 601,573          
Revenue from properties acquired in Apple Seven and Apple Eight mergers for periods prior to mergers
     -       -               -       61,665          
Revenue from acquisitions prior to ownership
     3,585       8,466               20,003       25,473          
Revenue from dispositions
     -       (13,639 )             (7,359 )     (40,143 )        
Lease revenue intangible amortization
     (33 )     142               1,792       254          
Comparable Hotels Total Revenue
   $ 244,107     $ 226,853             $ 699,717     $ 648,822          
                                                 
Adjusted Hotel EBITDA (AHEBITDA) (Actual)
   $ 95,738     $ 89,252             $ 266,193     $ 232,480          
AHEBITDA from properties acquired in Apple Seven and Apple Eight mergers for periods prior to mergers
     -       -               -       17,415          
AHEBITDA from acquisitions prior to ownership
     1,612       3,156               8,249       9,729          
AHEBITDA from dispositions
     -       (4,990 )             (2,023 )     (14,593 )        
Comparable Hotels AHEBITDA
   $ 97,350     $ 87,418             $ 272,419     $ 245,031          
 
Note:
Comparable Hotels is defined as the 177 hotels owned by the Company as of September 30, 2015.  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, 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.

Reconciliation of Net Income (Loss) to Non-GAAP financial measures is included in the following pages.

 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 
 
Apple Hospitality REIT, Inc.
Comparable Hotels Quarterly Operating Metrics and Statistical Data
(Unaudited)
(in thousands except statistical data)

   
Three Months Ended
  
   
3/31/2014
    
6/30/2014
    
9/30/2014
    
12/31/2014
    
3/31/2015
    
6/30/2015
    
9/30/2015
  
                                           
Room revenue
   $ 177,636     $ 207,111     $ 208,306     $ 177,980     $ 192,820     $ 222,072     $ 225,201  
Other revenue
     17,509       19,713       18,547       19,328       20,590       20,128       18,906  
Total revenue
     195,145       226,824       226,853       197,308       213,410       242,200       244,107  
                                                         
Total operating expenses
     126,941       137,415       139,435       128,092       135,418       145,123       146,757  
                                                         
Adjusted Hotel EBITDA
   $ 68,204     $ 89,409     $ 87,418     $ 69,216     $ 77,992     $ 97,077     $ 97,350  
Adjusted Hotel EBITDA Margin %
     35.0 %     39.4 %     38.5 %     35.1 %     36.5 %     40.1 %     39.9 %
                                                         
                                                         
ADR
   $ 121.61     $ 125.42     $ 126.60     $ 121.29     $ 127.43     $ 131.70     $ 133.57  
Occupancy
     72.4 %     81.0 %     79.9 %     71.0 %     74.4 %     81.9 %     80.6 %
RevPAR
   $ 88.10     $ 101.61     $ 101.11     $ 86.07     $ 94.74     $ 107.93     $ 107.62  
                                                         
Reconciliation to Actual Results
                                                        
                                                         
Total Revenue (Actual)
   $ 137,121     $ 232,568     $ 231,884     $ 202,323     $ 210,352     $ 234,374     $ 240,555  
Revenue from properties acquired in Apple Seven and Apple Eight mergers for periods prior to mergers
     61,665       -       -       -       -       -       -  
Revenue from acquisitions prior to ownership
     8,660       8,347       8,466       6,809       8,327       8,091       3,585  
Revenue from dispositions
     (12,243 )     (14,261 )     (13,639 )     (11,966 )     (7,127 )     (232 )     -  
Lease revenue intangible amortization
     (58 )     170       142       142       1,858       (33 )     (33 )
Comparable Hotels Total Revenue
   $ 195,145     $ 226,824     $ 226,853     $ 197,308     $ 213,410     $ 242,200     $ 244,107  
                                                         
Adjusted Hotel EBITDA (AHEBITDA) (Actual)
   $ 51,172     $ 92,056     $ 89,252     $ 71,073     $ 76,650     $ 93,805     $ 95,738  
AHEBITDA from properties acquired in Apple Seven and Apple Eight mergers for periods prior to mergers
     17,415       -       -       -       -       -       -  
AHEBITDA from acquisitions prior to ownership
     3,569       3,004       3,156       2,115       3,399       3,238       1,612  
AHEBITDA from dispositions
     (3,952 )     (5,651 )     (4,990 )     (3,972 )     (2,057 )     34       -  
Comparable Hotels AHEBITDA
   $ 68,204     $ 89,409     $ 87,418     $ 69,216     $ 77,992     $ 97,077     $ 97,350  
 
Note:
Comparable Hotels is defined as the 177 hotels owned by the Company as of September 30, 2015.  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, 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.

Reconciliation of Net Income (Loss) to Non-GAAP financial measures is included in the following pages.
 
 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 
 
Apple Hospitality REIT, Inc.
Reconciliation of Net Income (Loss) to Non-GAAP Financial Measures
 
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”); Adjusted EBITDA (“Adjusted EBITDA”); and Adjusted Hotel EBITDA (“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, Adjusted EBITDA, and 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, Adjusted EBITDA, and Adjusted Hotel EBITDA, as calculated by the Company, may not be comparable to FFO, MFFO, EBITDA, Adjusted EBITDA, and 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.










 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 
 
Reconciliation of Net Income (Loss) to FFO and MFFO
(Unaudited) (in thousands)

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 (loss) (computed in accordance with generally accepted accounting principles (“GAAP”)), excluding gains or losses from sales of real estate, extraordinary items as defined by GAAP, the cumulative effect of changes in accounting principles, plus real estate related depreciation, amortization and impairments, and adjustments for unconsolidated partnerships and joint ventures.  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 further adjusts FFO for certain additional items that are not in NAREIT’s definition of FFO, including: (i) the exclusion of the non-cash Series B convertible preferred share conversion expense and transaction and listing costs as these do not represent ongoing operations and (ii) the exclusion of non-cash straight-line ground lease expense as this expense does 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 (loss) to FFO and MFFO for the three and nine months ended September 30, 2015 and 2014 (in thousands).
 
   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2015
    
2014
    
2015
    
2014
  
Net income (loss)
   $ 46,968     $ 35,162     $ 135,080     $ (15,501 )
Depreciation of real estate owned
     32,121       30,865       93,516       80,872  
Gain on sale of real estate
     -       -       (15,358 )     -  
Loss on impairment of depreciable real estate assets
     -       8,600       -       8,600  
Amortization of favorable and unfavorable leases, net
     133       308       2,289       748  
Funds from operations
     79,222       74,935       215,527       74,719  
Series B convertible preferred share expense
     -       -       -       117,133  
Transaction and listing costs
     842       707       7,891       4,593  
Non-cash straight-line ground lease expense
     829       860       2,528       2,033  
Modified funds from operations
   $ 80,893     $ 76,502     $ 225,946     $ 198,478  

 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 
 
Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA 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 and 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 Company’s indebtedness use EBITDA, as defined in the specific credit agreement, as a measure of financial compliance.

The Company considers the exclusion of certain additional items from EBITDA useful, including: (i) the exclusion of the non-cash Series B convertible preferred share conversion expense, transaction and listing costs, gains or losses from sales of real estate, and the loss on impairment of depreciable real estate assets as these do not represent ongoing operations and (ii) the exclusion of non-cash straight-line ground lease expense as this expense does not reflect the underlying performance of the related hotels.

The following table reconciles the Company’s GAAP net income (loss) to EBITDA, Adjusted EBITDA and Adjusted Hotel EBITDA for the three and nine months ended September 30, 2015 and 2014 (in thousands).
 
   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2015
    
2014
    
2015
    
2014
  
Net income (loss)
   $ 46,968     $ 35,162     $ 135,080     $ (15,501 )
Depreciation
     32,351       31,095       94,205       81,408  
Amortization of favorable and unfavorable leases, net
     133       308       2,289       748  
Interest and other expense, net
     9,302       6,340       24,265       17,197  
Income tax expense
     138       553       872       1,495  
EBITDA
     88,892       73,458       256,711       85,347  
Series B convertible preferred share expense
     -       -       -       117,133  
Transaction and listing costs
     842       707       7,891       4,593  
Gain on sale of real estate
     -       -       (15,358 )     -  
Loss on impairment of depreciable real estate assets
     -       8,600       -       8,600  
Non-cash straight-line ground lease expense
     829       860       2,528       2,033  
Adjusted EBITDA
   $ 90,563     $ 83,625     $ 251,772     $ 217,706  
                                 
General and administrative expense
     5,175       5,627       14,421       14,774  
Adjusted Hotel EBITDA
   $ 95,738     $ 89,252     $ 266,193     $ 232,480  
 
 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 

Apple Hospitality REIT, Inc.
Debt Summary
(Unaudited) ($ in thousands)
September 30, 2015

   
2015
    
2016
    
2017
    
2018
    
2019
    
Thereafter
    
Total
    
Fair Market Value
  
Total debt:
                                                
Maturities
   $ 21,589     $ 123,988     $ 95,710     $ 6,305     $ 82,102     $ 632,536     $ 962,230     $ 968,756  
Average interest rates
     3.8 %     3.6 %     3.3 %     3.2 %     3.3 %     3.3 %                
                                                                 
Variable rate debt:
                                                                
Maturities
   $ 195     $ 780     $ 36,945     $ -     $ 75,500     $ 425,000     $ 538,420     $ 539,773  
Average interest rates (1)
     2.7 %     2.7 %     2.7 %     2.6 %     2.7 %     2.8 %                
                                                                 
Fixed rate debt:
                                                                
Maturities
   $ 21,394     $ 123,208     $ 58,765     $ 6,305     $ 6,602     $ 207,536     $ 423,810     $ 428,983  
Average interest rates
     5.2 %     5.0 %     4.7 %     4.5 %     4.5 %     4.5 %                
________
                                                                
(1) The average interest rate gives effect to interest rate swaps, as applicable.
                          

 
 
 
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Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 
 
Apple Hospitality REIT, Inc.
Comparable Hotels Operating Metrics by Region
Three months ended September 30
(Unaudited)
 
Region/State
        
Occupancy
    
ADR
    
RevPAR
    
% of Adjusted Hotel EBITDA
  
   
# of Hotels
     Q3 2015     Q3 2014    
% Change
     Q3 2015     Q3 2014    
% Change
     Q3 2015     Q3 2014    
% Change
     Q3 2015  
East North Central
                                                                                
Illinois
     4       84.3 %     84.6 %     (0.4 )%   $ 136.69     $ 126.20       8.3 %   $ 115.16     $ 106.70       7.9 %     3.3 %
Indiana
     2       83.7 %     82.6 %     1.3 %   $ 124.71     $ 107.67       15.8 %   $ 104.41     $ 88.96       17.4 %     1.2 %
Michigan
     1       82.9 %     80.8 %     2.7 %   $ 130.26     $ 121.44       7.3 %   $ 108.00     $ 98.06       10.1 %     0.7 %
Ohio
     1       74.3 %     80.3 %     (7.4 )%   $ 126.55     $ 121.29       4.3 %   $ 94.08     $ 97.39       (3.4 )%     0.6 %
East North Central Total
     8       82.7 %     83.1 %     (0.5 )%   $ 132.16     $ 121.14       9.1 %   $ 109.31     $ 100.68       8.6 %     5.8 %
                                                                                         
East South Central
                                                                                        
Alabama
     10       75.0 %     73.5 %     2.0 %   $ 108.43     $ 106.51       1.8 %   $ 81.33     $ 78.31       3.9 %     2.9 %
Mississippi
     2       78.2 %     79.9 %     (2.2 )%   $ 111.36     $ 108.57       2.6 %   $ 87.08     $ 86.80       0.3 %     0.6 %
Tennessee
     6       88.6 %     88.0 %     0.7 %   $ 146.33     $ 140.15       4.4 %   $ 129.66     $ 123.35       5.1 %     4.4 %
East South Central Total
     18       80.6 %     79.7 %     1.1 %   $ 124.79     $ 121.04       3.1 %   $ 100.52     $ 96.49       4.2 %     7.9 %
                                                                                         
Middle Atlantic
                                                                                        
New Jersey
     5       85.7 %     81.2 %     5.6 %   $ 135.86     $ 133.50       1.8 %   $ 116.48     $ 108.36       7.5 %     2.9 %
New York
     2       89.4 %     87.2 %     2.5 %   $ 227.76     $ 223.99       1.7 %   $ 203.62     $ 195.42       4.2 %     1.0 %
Pennsylvania
     3       76.2 %     72.4 %     5.2 %   $ 144.23     $ 143.14       0.8 %   $ 109.88     $ 103.70       6.0 %     2.0 %
Middle Atlantic Total
     10       84.0 %     80.3 %     4.6 %   $ 163.98     $ 162.01       1.2 %   $ 137.77     $ 130.13       5.9 %     5.9 %
                                                                                         
Mountain
                                                                                        
Arizona
     7       57.7 %     56.6 %     1.9 %   $ 83.96     $ 80.86       3.8 %   $ 48.42     $ 45.77       5.8 %     0.7 %
Colorado
     2       94.1 %     91.4 %     2.9 %   $ 136.49     $ 128.07       6.6 %   $ 128.42     $ 117.08       9.7 %     1.6 %
Idaho
     2       84.9 %     82.8 %     2.6 %   $ 121.95     $ 105.55       15.5 %   $ 103.55     $ 87.36       18.5 %     1.9 %
Utah
     2       88.8 %     91.1 %     (2.5 )%   $ 110.31     $ 100.91       9.3 %   $ 97.91     $ 91.89       6.5 %     1.0 %
Mountain Total
     13       73.0 %     71.9 %     1.5 %   $ 107.39     $ 98.78       8.7 %   $ 78.38     $ 71.05       10.3 %     5.2 %
                                                                                         
New England
                                                                                        
Massachusetts
     4       86.8 %     89.4 %     (2.8 )%   $ 130.02     $ 118.35       9.9 %   $ 112.90     $ 105.75       6.8 %     2.2 %
New England Total
     4       86.8 %     89.4 %     (2.8 )%   $ 130.02     $ 118.35       9.9 %   $ 112.90     $ 105.75       6.8 %     2.2 %
                                                                                         
Pacific
                                                                                        
Alaska
     1       91.5 %     94.9 %     (3.6 )%   $ 267.17     $ 253.29       5.5 %   $ 244.46     $ 240.34       1.7 %     2.0 %
California
     23       87.0 %     85.4 %     1.8 %   $ 151.22     $ 139.89       8.1 %   $ 131.51     $ 119.49       10.1 %     19.0 %
Washington
     4       91.1 %     92.5 %     (1.5 )%   $ 210.07     $ 201.21       4.4 %   $ 191.34     $ 186.02       2.9 %     6.3 %
Pacific Total
     28       87.8 %     86.9 %     1.0 %   $ 165.68     $ 155.66       6.4 %   $ 145.45     $ 135.34       7.5 %     27.3 %
                                                                                         
South Atlantic
                                                                                        
Florida
     16       81.4 %     78.7 %     3.5 %   $ 112.61     $ 105.46       6.8 %   $ 91.71     $ 82.95       10.6 %     5.8 %
Georgia
     5       72.8 %     70.9 %     2.6 %   $ 102.54     $ 99.82       2.7 %   $ 74.67     $ 70.82       5.4 %     1.0 %
Maryland
     2       76.9 %     79.6 %     (3.4 )%   $ 128.54     $ 127.80       0.6 %   $ 98.84     $ 101.68       (2.8 )%     0.9 %
North Carolina
     9       80.7 %     82.1 %     (1.8 )%   $ 121.31     $ 116.47       4.1 %   $ 97.84     $ 95.66       2.3 %     4.5 %
South Carolina
     3       82.7 %     82.6 %     0.1 %   $ 117.33     $ 112.18       4.6 %   $ 97.08     $ 92.71       4.7 %     1.3 %
Virginia
     14       77.8 %     80.4 %     (3.2 )%   $ 146.17     $ 135.74       7.7 %   $ 113.78     $ 109.15       4.2 %     11.4 %
South Atlantic Total
     49       79.3 %     79.5 %     (0.2 )%   $ 125.77     $ 118.32       6.3 %   $ 99.74     $ 94.05       6.1 %     24.9 %
                                                                                         
West North Central
                                                                                        
Kansas
     4       78.0 %     75.0 %     4.1 %   $ 108.44     $ 106.78       1.6 %   $ 84.59     $ 80.05       5.7 %     1.1 %
Minnesota
     1       77.1 %     80.1 %     (3.7 )%   $ 107.23     $ 103.98       3.1 %   $ 82.68     $ 83.29       (0.7 )%     0.3 %
Missouri
     4       85.6 %     89.0 %     (3.9 )%   $ 139.31     $ 131.71       5.8 %   $ 119.20     $ 117.26       1.7 %     2.8 %
Nebraska
     1       75.7 %     72.5 %     4.4 %   $ 127.99     $ 125.69       1.8 %   $ 96.90     $ 91.12       6.4 %     0.8 %
West North Central Total
     10       80.8 %     81.1 %     (0.4 )%   $ 124.92     $ 120.62       3.6 %   $ 100.97     $ 97.87       3.2 %     5.0 %
                                                                                         
West South Central
                                                                                        
Arkansas
     4       77.2 %     73.0 %     5.7 %   $ 120.38     $ 108.08       11.4 %   $ 92.87     $ 78.89       17.7 %     1.7 %
Louisiana
     4       74.9 %     73.7 %     1.6 %   $ 114.22     $ 113.89       0.3 %   $ 85.52     $ 83.95       1.9 %     1.7 %
Oklahoma
     1       80.0 %     74.9 %     6.8 %   $ 154.64     $ 168.80       (8.4 )%   $ 123.71     $ 126.41       (2.1 )%     1.2 %
Texas
     28       76.9 %     76.1 %     1.1 %   $ 118.19     $ 114.01       3.7 %   $ 90.90     $ 86.71       4.8 %     11.2 %
West South Central Total
     37       76.8 %     75.5 %     1.8 %   $ 119.58     $ 115.85       3.2 %   $ 91.86     $ 87.42       5.1 %     15.8 %
                                                                                         
Total Portfolio
     177       80.6 %     79.9 %     0.9 %   $ 133.57     $ 126.60       5.5 %   $ 107.62     $ 101.11       6.4 %     100.0 %
 
Note: State categorization is based on STR, Inc. census region designation.
 
 
graphic Page | 13
Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 

Apple Hospitality REIT, Inc.
Comparable Hotels Operating Metrics by Region
Nine months ended September 30
(Unaudited)
 
Region/State
        
Occupancy
    
ADR
    
RevPAR
    
% of Adjusted Hotel EBITDA
  
   
# of Hotels
    
YTD 2015
    
YTD 2014
    
% Change
    
YTD 2015
    
YTD 2014
    
% Change
    
YTD 2015
    
YTD 2014
    
% Change
    
YTD 2015
  
East North Central
                                                                  
Illinois
     4       77.6 %     75.7 %     2.6 %   $ 132.25     $ 124.73       6.0 %   $ 102.69     $ 94.37       8.8 %     2.8 %
Indiana
     2       77.8 %     76.9 %     1.2 %   $ 115.58     $ 101.36       14.0 %   $ 89.97     $ 77.96       15.4 %     0.9 %
Michigan
     1       77.7 %     76.1 %     2.0 %   $ 126.82     $ 120.51       5.2 %   $ 98.50     $ 91.75       7.4 %     0.7 %
Ohio
     1       69.9 %     74.5 %     (6.1 )%   $ 124.28     $ 119.42       4.1 %   $ 86.90     $ 88.94       (2.3 )%     0.5 %
East North Central Total
     8       76.7 %     75.8 %     1.2 %   $ 127.07     $ 118.55       7.2 %   $ 97.49     $ 89.91       8.4 %     4.9 %
                                                                                         
East South Central
                                                                                        
Alabama
     10       75.2 %     73.3 %     2.7 %   $ 107.82     $ 104.43       3.3 %   $ 81.13     $ 76.50       6.1 %     3.1 %
Mississippi
     2       79.4 %     81.2 %     (2.2 )%   $ 108.97     $ 107.77       1.1 %   $ 86.52     $ 87.52       (1.1 )%     0.6 %
Tennessee
     6       86.0 %     86.2 %     (0.2 )%   $ 146.56     $ 138.81       5.6 %   $ 126.04     $ 119.64       5.4 %     4.4 %
East South Central Total
     18       79.8 %     79.0 %     1.0 %   $ 124.05     $ 119.23       4.0 %   $ 98.97     $ 94.17       5.1 %     8.1 %
                                                                                         
Middle Atlantic
                                                                                        
New Jersey
     5       78.7 %     73.9 %     6.5 %   $ 133.71     $ 134.31       (0.4 )%   $ 105.28     $ 99.28       6.0 %     2.6 %
New York
     2       83.1 %     85.5 %     (2.8 )%   $ 210.06     $ 206.17       1.9 %   $ 174.65     $ 176.35       (1.0 )%     0.9 %
Pennsylvania
     3       70.2 %     70.1 %     0.1 %   $ 143.33     $ 141.90       1.0 %   $ 100.57     $ 99.51       1.1 %     1.8 %
Middle Atlantic Total
     10       77.5 %     75.9 %     2.1 %   $ 157.91     $ 157.75       0.1 %   $ 122.36     $ 119.78       2.2 %     5.3 %
                                                                                         
Mountain
                                                                                        
Arizona
     7       67.8 %     66.3 %     2.4 %   $ 106.46     $ 98.38       8.2 %   $ 72.23     $ 65.21       10.8 %     2.5 %
Colorado
     2       85.8 %     80.8 %     6.2 %   $ 129.53     $ 122.42       5.8 %   $ 111.08     $ 98.89       12.3 %     1.3 %
Idaho
     2       77.6 %     75.5 %     2.7 %   $ 115.48     $ 106.33       8.6 %   $ 89.63     $ 80.33       11.6 %     1.6 %
Utah
     2       79.8 %     84.7 %     (5.8 )%   $ 105.83     $ 98.79       7.1 %   $ 84.43     $ 83.66       0.9 %     0.9 %
Mountain Total
     13       74.1 %     72.9 %     1.7 %   $ 112.05     $ 103.85       7.9 %   $ 83.02     $ 75.66       9.7 %     6.3 %
                                                                                         
New England
                                                                                        
Massachusetts
     4       79.4 %     81.0 %     (1.9 )%   $ 125.47     $ 115.50       8.6 %   $ 99.63     $ 93.52       6.5 %     1.9 %
New England Total
     4       79.4 %     81.0 %     (1.9 )%   $ 125.47     $ 115.50       8.6 %   $ 99.63     $ 93.52       6.5 %     1.9 %
                                                                                         
Pacific
                                                                                        
Alaska
     1       87.4 %     90.3 %     (3.2 )%   $ 218.35     $ 204.12       7.0 %   $ 190.85     $ 184.34       3.5 %     1.5 %
California
     23       84.5 %     82.6 %     2.2 %   $ 143.95     $ 134.74       6.8 %   $ 121.57     $ 111.31       9.2 %     17.4 %
Washington
     4       87.2 %     85.1 %     2.4 %   $ 180.18     $ 169.14       6.5 %   $ 157.12     $ 143.98       9.1 %     5.1 %
Pacific Total
     28       85.0 %     83.3 %     2.0 %   $ 153.08     $ 143.60       6.6 %   $ 130.13     $ 119.68       8.7 %     24.0 %
                                                                                         
South Atlantic
                                                                                        
Florida
     16       85.2 %     81.9 %     4.1 %   $ 129.30     $ 121.21       6.7 %   $ 110.21     $ 99.27       11.0 %     9.2 %
Georgia
     5       75.7 %     74.7 %     1.3 %   $ 104.24     $ 100.49       3.7 %   $ 78.90     $ 75.06       5.1 %     1.4 %
Maryland
     2       70.3 %     74.3 %     (5.3 )%   $ 128.35     $ 125.34       2.4 %   $ 90.24     $ 93.08       (3.1 )%     0.8 %
North Carolina
     9       77.2 %     76.2 %     1.3 %   $ 115.54     $ 110.82       4.3 %   $ 89.15     $ 84.45       5.6 %     4.0 %
South Carolina
     3       80.6 %     79.3 %     1.7 %   $ 115.50     $ 108.90       6.1 %   $ 93.13     $ 86.36       7.8 %     1.3 %
Virginia
     14       74.5 %     74.5 %     0.1 %   $ 134.42     $ 125.07       7.5 %   $ 100.16     $ 93.14       7.5 %     9.7 %
South Atlantic Total
     49       78.6 %     77.5 %     1.5 %   $ 126.18     $ 118.59       6.4 %   $ 99.20     $ 91.89       8.0 %     26.4 %
                                                                                         
West North Central
                                                                                        
Kansas
     4       75.0 %     71.3 %     5.2 %   $ 106.22     $ 105.35       0.8 %   $ 79.62     $ 75.08       6.0 %     1.0 %
Minnesota
     1       72.1 %     73.4 %     (1.8 )%   $ 104.57     $ 100.80       3.7 %   $ 75.41     $ 74.02       1.9 %     0.3 %
Missouri
     4       81.5 %     82.3 %     (0.9 )%   $ 135.03     $ 128.61       5.0 %   $ 110.07     $ 105.83       4.0 %     2.6 %
Nebraska
     1       76.8 %     73.9 %     4.0 %   $ 137.34     $ 133.97       2.5 %   $ 105.53     $ 99.00       6.6 %     0.9 %
West North Central Total
     10       77.8 %     76.6 %     1.5 %   $ 123.37     $ 119.55       3.2 %   $ 95.93     $ 91.55       4.8 %     4.8 %
                                                                                         
West South Central
                                                                                        
Arkansas
     4       71.5 %     67.7 %     5.6 %   $ 116.46     $ 106.69       9.2 %   $ 83.31     $ 72.28       15.3 %     1.5 %
Louisiana
     4       79.0 %     76.8 %     2.8 %   $ 127.37     $ 124.13       2.6 %   $ 100.66     $ 95.38       5.5 %     2.4 %
Oklahoma
     1       80.2 %     79.4 %     1.0 %   $ 149.50     $ 167.96       (11.0 )%   $ 119.91     $ 133.40       (10.1 )%     1.2 %
Texas
     28       77.6 %     76.9 %     0.9 %   $ 121.20     $ 117.25       3.4 %   $ 94.01     $ 90.14       4.3 %     13.2 %
West South Central Total
     37       77.3 %     76.2 %     1.5 %   $ 122.83     $ 119.54       2.8 %   $ 94.97     $ 91.05       4.3 %     18.3 %
                                                                                         
Total Portfolio
     177       79.0 %     77.8 %     1.5 %   $ 131.02     $ 124.66       5.1 %   $ 103.49     $ 96.99       6.7 %     100.0 %
 
Note:  State categorization is based on STR, Inc. census region designation.
 
 
graphic Page | 14
Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 

Apple Hospitality REIT, Inc.
Comparable Hotels Operating Metrics by Chain Scale
Three and Nine months ended September 30
(Unaudited)

Chain Scale/Brand
        
Occupancy
    
ADR
    
RevPAR
    
% of Adjusted Hotel EBITDA
  
   
# of Hotels
     Q3 2015     Q3 2014    
% Change
     Q3 2015     Q3 2014    
% Change
     Q3 2015     Q3 2014    
% Change
     Q3 2015  
Upscale
                                                                                
Courtyard
     33       76.9 %     77.9 %     (1.3 )%   $ 144.34     $ 136.26       5.9 %   $ 111.01     $ 106.17       4.6 %     23.7 %
Hilton Garden Inn
     30       80.8 %     80.3 %     0.7 %   $ 128.90     $ 122.26       5.4 %   $ 104.14     $ 98.13       6.1 %     17.6 %
Homewood Suites
     23       86.1 %     80.7 %     6.7 %   $ 128.89     $ 122.41       5.3 %   $ 110.93     $ 98.73       12.4 %     10.7 %
Residence Inn
     26       84.4 %     84.5 %     (0.1 )%   $ 147.50     $ 140.91       4.7 %   $ 124.48     $ 119.06       4.5 %     17.1 %
SpringHill Suites
     15       80.3 %     80.7 %     (0.4 )%   $ 111.15     $ 99.25       12.0 %   $ 89.27     $ 80.06       11.5 %     6.7 %
Upscale Total
     127       81.1 %     80.5 %     0.8 %   $ 134.39     $ 126.94       5.9 %   $ 109.03     $ 102.16       6.7 %     75.8 %
                                                                                         
Upper Midscale
                                                                                        
Fairfield Inn/Fairfield Inn & Suites
     7       79.1 %     78.6 %     0.6 %   $ 101.74     $ 94.71       7.4 %   $ 80.44     $ 74.41       8.1 %     2.3 %
Hampton Inn/Hampton Inn & Suites
     26       82.0 %     80.4 %     2.0 %   $ 126.46     $ 120.83       4.7 %   $ 103.76     $ 97.19       6.8 %     12.8 %
Home2 Suites
     2       91.0 %     90.5 %     0.6 %   $ 134.25     $ 125.88       6.7 %   $ 122.17     $ 113.87       7.3 %     1.5 %
TownePlace Suites
     8       73.3 %     71.0 %     3.3 %   $ 92.09     $ 90.42       1.8 %   $ 67.53     $ 64.18       5.2 %     1.8 %
Upper Midscale Total
     43       80.6 %     79.1 %     1.9 %   $ 117.83     $ 112.41       4.8 %   $ 94.94     $ 88.90       6.8 %     18.4 %
                                                                                         
Upper Upscale
                                                                                        
Embassy Suites
     2       81.6 %     86.3 %     (5.4 )%   $ 208.08     $ 195.72       6.3 %   $ 169.83     $ 168.90       0.5 %     2.2 %
Hilton
     1       72.4 %     76.7 %     (5.6 )%   $ 164.89     $ 151.30       9.0 %   $ 119.35     $ 116.01       2.9 %     1.0 %
Marriott
     3       69.5 %     70.4 %     (1.3 )%   $ 134.54     $ 127.51       5.5 %   $ 93.50     $ 89.80       4.1 %     2.5 %
Renaissance
     1       89.6 %     84.5 %     6.1 %   $ 289.53     $ 294.31       (1.6 )%   $ 259.55     $ 248.57       4.4 %     0.1 %
Upper Upscale Total
     7       74.9 %     76.3 %     (1.8 )%   $ 178.59     $ 170.02       5.0 %   $ 133.80     $ 129.68       3.2 %     5.8 %
                                                                                         
Total Portfolio
     177       80.6 %     79.9 %     0.9 %   $ 133.57     $ 126.60       5.5 %   $ 107.62     $ 101.11       6.4 %     100.0 %
 
 
Chain Scale/Brand
        
Occupancy
    
ADR
    
RevPAR
    
% of Adjusted Hotel EBITDA
  
   
# of Hotels
    
YTD 2015
    
YTD 2014
    
% Change
    
YTD 2015
    
YTD 2014
    
% Change
    
YTD 2015
    
YTD 2014
    
% Change
    
YTD 2015
  
Upscale
                                                                  
Courtyard
     33       75.0 %     74.8 %     0.2 %   $ 137.70     $ 130.31       5.7 %   $ 103.22     $ 97.50       5.9 %     21.8 %
Hilton Garden Inn
     30       79.2 %     78.1 %     1.4 %   $ 127.60     $ 121.07       5.4 %   $ 101.03     $ 94.52       6.9 %     17.9 %
Homewood Suites
     23       83.4 %     80.0 %     4.2 %   $ 132.76     $ 126.88       4.6 %   $ 110.67     $ 101.49       9.0 %     11.5 %
Residence Inn
     26       82.7 %     81.2 %     1.9 %   $ 138.61     $ 131.78       5.2 %   $ 114.66     $ 106.97       7.2 %     15.9 %
SpringHill Suites
     15       77.9 %     76.7 %     1.5 %   $ 108.85     $ 99.83       9.0 %   $ 84.77     $ 76.59       10.7 %     6.3 %
Upscale Total
     127       79.1 %     77.9 %     1.6 %   $ 131.11     $ 124.10       5.7 %   $ 103.76     $ 96.63       7.4 %     73.4 %
                                                                                         
Upper Midscale
                                                                                        
Fairfield Inn/Fairfield Inn & Suites
     7       79.1 %     78.2 %     1.1 %   $ 107.76     $ 99.72       8.1 %   $ 85.26     $ 78.02       9.3 %     2.7 %
Hampton Inn/Hampton Inn & Suites
     26       80.4 %     78.7 %     2.3 %   $ 127.75     $ 123.54       3.4 %   $ 102.77     $ 97.17       5.8 %     13.6 %
Home2 Suites
     2       88.8 %     90.2 %     (1.5 )%   $ 134.51     $ 123.99       8.5 %   $ 119.50     $ 111.80       6.9 %     1.6 %
TownePlace Suites
     8       74.6 %     72.9 %     2.3 %   $ 93.47     $ 91.24       2.4 %   $ 69.72     $ 66.52       4.8 %     2.2 %
Upper Midscale Total
     43       79.7 %     78.2 %     1.9 %   $ 119.66     $ 114.78       4.3 %   $ 95.35     $ 89.76       6.2 %     20.1 %
                                                                                         
Upper Upscale
                                                                                        
Embassy Suites
     2       84.6 %     84.9 %     (0.3 )%   $ 179.95     $ 169.39       6.2 %   $ 152.28     $ 143.81       5.9 %     2.1 %
Hilton
     1       76.9 %     79.2 %     (2.8 )%   $ 165.84     $ 154.98       7.0 %   $ 127.60     $ 122.69       4.0 %     1.3 %
Marriott
     3       68.7 %     69.2 %     (0.7 )%   $ 135.22     $ 131.07       3.2 %   $ 92.91     $ 90.72       2.4 %     2.9 %
Renaissance
     1       85.5 %     86.0 %     (0.6 )%   $ 263.67     $ 266.20       (0.9 )%   $ 225.55     $ 229.03       (1.5 )%     0.2 %
Upper Upscale Total
     7       75.2 %     75.9 %     (0.9 )%   $ 168.50     $ 162.83       3.5 %   $ 126.74     $ 123.60       2.5 %     6.5 %
                                                                                         
Total Portfolio
     177       79.0 %     77.8 %     1.5 %   $ 131.02     $ 124.66       5.1 %   $ 103.49     $ 96.99       6.7 %     100.0 %
 
Note:
Brand categorization is based on STR, Inc. census chain scale designation.
 
 
graphic Page | 15
Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 
 
Apple Hospitality REIT, Inc.
Comparable Hotels Operating Metrics by Location
Three and Nine months ended September 30
(Unaudited)
 
Location
        
Occupancy
    
ADR
    
RevPAR
    
% of Adjusted Hotel EBITDA
  
   
# of Hotels
     Q3 2015     Q3 2014    
% Change
     Q3 2015     Q3 2014    
% Change
     Q3 2015     Q3 2014    
% Change
     Q3 2015  
STR Location
                                                                                
Airport
     12       84.8 %     82.7 %     2.5 %   $ 119.66     $ 109.78       9.0 %   $ 101.48     $ 90.83       11.7 %     4.9 %
Interstate
     7       79.1 %     82.4 %     (4.0 )%   $ 116.80     $ 112.22       4.1 %   $ 92.35     $ 92.43       (0.1 )%     3.5 %
Resort
     7       85.7 %     86.0 %     (0.4 )%   $ 149.72     $ 139.04       7.7 %   $ 128.26     $ 119.60       7.2 %     6.2 %
Small Metro/Town
     16       68.9 %     66.6 %     3.6 %   $ 106.11     $ 101.13       4.9 %   $ 73.14     $ 67.30       8.7 %     4.1 %
Suburban
     110       81.2 %     80.4 %     1.0 %   $ 129.18     $ 122.32       5.6 %   $ 104.88     $ 98.34       6.7 %     58.5 %
Urban
     25       80.6 %     80.3 %     0.4 %   $ 160.14     $ 154.58       3.6 %   $ 129.03     $ 124.07       4.0 %     22.8 %
                                                                                         
Total Portfolio
     177       80.6 %     79.9 %     0.9 %   $ 133.57     $ 126.60       5.5 %   $ 107.62     $ 101.11       6.4 %     100.0 %
 
 
Location
        
Occupancy
    
ADR
    
RevPAR
    
% of Adjusted Hotel EBITDA
  
   
# of Hotels
    
YTD 2015
    
YTD 2014
    
% Change
    
YTD 2015
    
YTD 2014
    
% Change
    
YTD 2015
    
YTD 2014
    
% Change
    
YTD 2015
  
STR Location
                                                                  
Airport
     12       85.6 %     82.5 %     3.8 %   $ 125.76     $ 117.67       6.9 %   $ 107.63     $ 97.05       10.9 %     6.2 %
Interstate
     7       77.8 %     78.3 %     (0.7 )%   $ 113.86     $ 111.50       2.1 %   $ 88.59     $ 87.32       1.5 %     3.2 %
Resort
     7       82.8 %     81.2 %     1.9 %   $ 139.32     $ 130.09       7.1 %   $ 115.30     $ 105.68       9.1 %     5.4 %
Small Metro/Town
     16       69.5 %     67.3 %     3.2 %   $ 109.76     $ 103.78       5.8 %   $ 76.24     $ 69.83       9.2 %     4.8 %
Suburban
     110       78.9 %     77.8 %     1.4 %   $ 126.45     $ 120.37       5.1 %   $ 99.76     $ 93.69       6.5 %     57.0 %
Urban
     25       80.0 %     79.3 %     0.9 %   $ 155.17     $ 149.31       3.9 %   $ 124.08     $ 118.34       4.9 %     23.4 %
                                                                                         
Total Portfolio
     177       79.0 %     77.8 %     1.5 %   $ 131.02     $ 124.66       5.1 %   $ 103.49     $ 96.99       6.7 %     100.0 %
 
 
Note:
Location categorization is based on STR, Inc. designation.
 
 
graphic Page | 16
Apple Hospitality REIT, Inc. • 814 East Main Street • Richmond, Virginia 23219 • 804‐344‐8121 • applehospitalityreit.com
 
 
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