Group 1 - The article introduces a series focused on REITs for retirees, highlighting the first two out of ten recommended REITs [1] - The company offers a comprehensive research platform called iREIT®, which includes data on various investment vehicles such as REITs, mREITs, Preferreds, BDCs, MLPs, ETFs, Builders, and Asset Managers [1] - The iREIT® Tracker provides insights on over 250 tickers, including quality scores, buy targets, and trim targets [1] Group 2 - A new Ratings Tracker named iREIT Buy Zone has been added to assist members in screening for value [2] - The company is promoting a free 2-week trial for members to explore the new features [2] - The offer includes a free book along with the trial [4]

INVESTOR PRESENTATION M AY 2 0 2 5 • N Y S E : A P L E F O RWA R D -L O O K I N G S TAT E M E N T S AC HOTEL PORTLAND DOWNTOWN/WATERFRONT, ME HOMEWOOD SUITES SAN JOSE AIRPORT- SILICON VALLEY Certain statements made in this presentation are forward-looking statements. These forward-looking statements include statements regarding our intent, belief or current expectations and are based on various assumptions. These statements involve substantial risks and uncertainties. Actual results or events could differ m ...

Group 1 - Apple Hospitality REIT, Inc. (APLE) has been added to the Zacks Rank 5 (Strong Sell) List due to a 4.4% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Assertio Holdings, Inc. (ASRT) is also on the Zacks Rank 5 (Strong Sell) List, with a significant 50% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Boot Barn Holdings, Inc. (BOOT) has seen a 9.3% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days, leading to its inclusion in the Zacks Rank 5 List [2]

Core Insights - Apple Hospitality REIT, Inc. (APLE) has acquired Homewood Suites by Hilton Tampa-Brandon for $18.8 million, aiming to leverage the economic growth in Tampa, FL [1][9] - The acquisition aligns with the company's strategy to invest in properties with strong growth potential, enhancing shareholder value [5][9] Acquisition Details - The hotel features 126 rooms and is strategically located to benefit from various demand generators including conventions, sporting events, and healthcare [2][3] - The purchase price of $18.8 million translates to approximately $149,000 per key, reflecting an attractive valuation below replacement cost and a 12% cap rate based on trailing 12-month results [5] Market Positioning - The hotel's location near major attractions and corporate offices positions it well for both leisure and business tourism [4][6] - The Tampa East submarket has shown a 15% increase in revenue per available room (RevPAR) over the past year, indicating a recovery in the hospitality sector [6] Portfolio Expansion - Following the acquisition, Apple Hospitality's portfolio now includes 221 hotels with 29,893 guest rooms across 37 states and the District of Columbia [8] - The company has plans for further expansion with an additional hotel under contract for purchase in Nashville and one for sale in Houston [7] Strategic Outlook - The acquisition reflects Apple Hospitality's commitment to geographic diversification and investment in high-demand markets [9] - Despite the positive developments, macroeconomic uncertainties and competitive pressures may impact future demand for the company's properties [10]

Core Insights - Share buyback activity by US equity real estate investment trusts (REITs) more than doubled in the first quarter of the year [2] - The total amount spent on buybacks reached approximately $993.2 million in common stock [2] Industry Summary - The analysis conducted by S&P Global Market Intelligence indicates a significant increase in buyback activities among US REITs [2] - This trend reflects a growing confidence in the market and a strategic move by REITs to enhance shareholder value [2]

Group 1 - Real estate investment trusts (REITs) have shown increased volatility since the onset of COVID-19, initially experiencing a significant decline alongside other asset classes [1] - Following the initial downturn, the REIT sector has seen a notable recovery [1] Group 2 - Roberts Berzins has over ten years of experience in financial management, focusing on helping top-tier corporates with financial strategies and large-scale financings [1] - Berzins has contributed to institutionalizing the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [1] - His policy-level work includes developing national state-owned enterprise (SOE) financing guidelines and frameworks for channeling private capital into affordable housing [1]

Financial Data and Key Metrics Changes - In the first quarter, comparable hotels total revenue was $324 million, down 0.4% year-over-year, while adjusted hotel EBITDA was $105 million, down approximately 5% [8][16] - Comparable hotels RevPAR was $111, down 0.5%, with ADR at $157, up 1%, and occupancy at 71%, down 1.5% compared to the same period last year [8][9] Business Line Data and Key Metrics Changes - The company completed the sale of two hotels for approximately $21 million and entered into an agreement for the sale of the Houston Marriott for $16 million [2] - The company has repurchased approximately $32 million of common shares and paid distributions of nearly $89 million while maintaining a strong balance sheet [2][3] Market Data and Key Metrics Changes - The company noted that demand remained healthy across its portfolio despite challenges, with specific markets like Houston and Los Angeles showing RevPAR growth of nearly 8% and over 20%, respectively [11][12] - Government demand represented about 5% of the occupancy mix, with a decline in government room nights in March but an improvement in April [36][39] Company Strategy and Development Direction - The company is focused on capital allocation to refine its portfolio, drive earnings per share, and maximize long-term shareholder value [2][5] - The company plans to reinvest between $80 million and $90 million in its hotels during 2025, with major renovations at approximately 20 hotels [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating market shifts and highlighted the importance of a diversified portfolio to mitigate risks [7][20] - The company anticipates net income for the full year to be between $167 million and $195 million, with a decrease in RevPAR guidance reflecting macroeconomic uncertainties [19][20] Other Important Information - The company has approximately $1.5 billion in total outstanding debt, with a weighted average interest rate of 4.8% and cash on hand of approximately $15 million [18] - The company has completed approximately $338 million in hotel sales since the onset of the pandemic, allowing it to forego over $100 million in capital investments [4] Q&A Session Summary Question: Can you provide more color on the RevPAR guide? - Management indicated that the booking position has declined, leading to a 200 basis point drop in RevPAR expectations for the second half of the year, with Q2 expected to be the worst quarter [24][25] Question: How is the transaction market looking moving forward? - Management noted that the transaction market remains unchanged, with opportunities primarily in smaller asset sales, and they are optimistic about redeploying proceeds into share repurchases [27][28] Question: What are the trends in group bookings? - Management reported strong group bookings, particularly in smaller corporate and leisure groups, with no significant hesitancy observed [61][62] Question: How does the company view its CapEx philosophy? - Management stated that they plan to spend between $80 million and $90 million on CapEx this year, focusing on renovations and maintaining a competitive edge [40][42] Question: How is the company positioned for potential economic downturns? - Management expressed confidence that the lack of new supply in their markets positions them well to weather economic downturns, limiting downside risk and enhancing upside potential [75][76]

Apple Hospitality REIT (APLE) Q1 2025 Earnings Call May 02, 2025 10:00 AM ET Speaker0 profile of our portfolio by both reducing potential downside and enhancing the upside impact of variability in lodging demand relative to past cycles. Supported by our strong operating performance, we continue to pay an attractive dividend. During the first quarter, we paid distributions totaling approximately $70,000,000 or $0.29 per share, which includes a special cash distribution of $05 per common share that was paid i ...

Hotel Portfolio - As of March 31, 2025, the Company owned 219 hotels with a total of 29,558 guest rooms, a decrease from 224 hotels and 29,886 guest rooms as of March 31, 2024[84][90]. - As of March 31, 2025, the company owns 219 hotels and one non-hotel property, with a total of 30,000 guest rooms[120]. - The average number of guest rooms per hotel in the portfolio is approximately 137[120]. - The largest hotel in the portfolio is located in San Diego, CA, with 245 guest rooms[121]. - The company has expanded its portfolio with various brands including Embassy Suites, Hilton Garden Inn, and Residence Inn across multiple states[121][122][123]. - The company continues to focus on market expansion, particularly in states like California and Florida, with multiple new hotel openings planned[121][122]. Financial Performance - Total revenue for the three months ended March 31, 2025, was $327.7 million, a decrease of 0.5% compared to $329.5 million for the same period in 2024[93][99]. - Net income for the three months ended March 31, 2025, was $31.2 million, down 42.2% from $54.1 million in the same period of 2024[93]. - Average Daily Rate (ADR) increased by 2.0% to $156.24 for the three months ended March 31, 2025, compared to $153.18 in 2024[93][100]. - Revenue per Available Room (RevPAR) increased by 0.7% to $111.04 for the three months ended March 31, 2025, compared to $110.25 in 2024[93][100]. - EBITDA for Q1 2025 was $98.9 million, compared to $118.5 million in Q1 2024, reflecting a decrease in operational performance[117]. Operating Expenses - The Company’s hotel operating expenses increased by 1.3% to $199.9 million for the three months ended March 31, 2025, compared to $197.3 million in 2024[93]. - Hotel operating expenses for Q1 2025 totaled $199.9 million, representing 61.0% of total revenue, compared to $197.3 million or 59.9% in Q1 2024[101]. - Property taxes, insurance, and other expenses increased to $23.4 million in Q1 2025, accounting for 7.1% of total revenue, up from $21.0 million or 6.4% in Q1 2024[102]. - General and administrative expenses decreased to $9.2 million in Q1 2025, representing 2.8% of total revenue, down from $10.6 million or 3.2% in Q1 2024[103]. - Depreciation and amortization expense rose to $47.9 million in Q1 2025, compared to $46.8 million in Q1 2024, primarily due to acquisitions and renovations[104][105]. - Interest and other expenses, net, increased to $19.4 million in Q1 2025 from $17.3 million in Q1 2024, influenced by higher average borrowings and interest rates[106][107]. Cash Flow and Distributions - For the three months ended March 31, 2025, the company paid distributions of $0.29 per common share, totaling $69.6 million[138]. - The current annual distribution rate is $0.96 per common share, with monthly distributions of $0.08 expected to continue[139]. - The company declared a monthly cash distribution of $0.08 per common share on March 20, 2025, payable on April 15, 2025[138]. - The company anticipates that cash flow from operations and availability under its Revolving Credit Facility will meet its liquidity requirements, including required distributions to shareholders[136]. - The company may utilize additional financing sources to maintain its distribution rate if cash flows from operations are insufficient[139]. Debt and Financing - As of March 31, 2025, the company had total outstanding debt of $1.5 billion, consisting of $252.3 million in mortgage debt and $1.3 billion under unsecured credit facilities[131]. - The Company had approximately $361.1 million in principal and interest payments due on its debt over the next 12 months, including a $25.9 million mortgage maturing in Q2 2025[142]. - As of March 31, 2025, approximately $428.0 million, or 28% of the Company's total debt, was subject to variable interest rates, with every 100 basis points change impacting annual net income by approximately $4.3 million[155]. - The Company had 12 interest rate swap agreements fixing interest payments on approximately $735.0 million of variable-rate debt, with maturity dates ranging from May 2025 to December 2029[156]. - The company has a universal shelf registration statement that allows for the offering of an indeterminate number of common shares and other securities[134]. Capital Expenditures and Investments - The Company invested approximately $19.6 million in capital expenditures during the three months ended March 31, 2025, and anticipates spending $80 million to $90 million in 2025 for renovations across approximately 20 properties[141]. - The Company approved a one-year extension of its Share Repurchase Program, authorizing repurchases up to $335.4 million, with approximately $274.5 million remaining available as of March 31, 2025[140]. - During the three months ended March 31, 2025, the Company repurchased approximately 1.9 million common shares at an average price of $13.61 per share, totaling approximately $26.3 million[140]. - The company plans to use future net proceeds from share sales for acquisitions, debt repayment, capital expenditures, and working capital[135]. Future Outlook - The Company expects RevPAR for its Comparable Hotels to seasonally improve and to be in line with 2024 for the full year of 2025, assuming current macroeconomic conditions persist[98]. - The company anticipates a more favorable operating expense environment for the remainder of 2025, despite ongoing inflationary pressures and labor market challenges[101]. - The Company expects inflationary pressures and supply chain issues to potentially increase costs and delays for anticipated renovation projects[141]. - Future outlook includes a focus on enhancing customer experience through new technology and service offerings[120]. - The company is exploring new strategies for growth, including potential mergers and acquisitions to enhance its market presence[120].

Financial Performance - For Q1 2025, Apple Hospitality reported a net income of $31.2 million, down 42.2% from $54.1 million in Q1 2024[2] - Adjusted EBITDAre for Q1 2025 was approximately $95.4 million, a decrease of 5.4% compared to $100.8 million in Q1 2024[12] - Comparable Hotels Adjusted Hotel EBITDA was approximately $104.9 million for Q1 2025, down 5.4% from $110.9 million in Q1 2024[12] - Total revenue for Q1 2025 was $327.7 million, a decrease of 0.5% from $329.5 million in Q1 2024[35] - Operating income decreased by 29.0% to $50.9 million in Q1 2025 from $71.6 million in Q1 2024[38] - Comparable Hotels total revenue was $324.3 million, down 0.4% from $325.4 million in the same period last year[38] - Funds from operations (FFO) for Q1 2025 were $74,845, compared to $82,343 in Q1 2024, indicating a decrease of approximately 9%[61] - Comprehensive income for Q1 2025 was $24.2 million, down from $57.8 million in Q1 2024[35] Operational Metrics - The average daily rate (ADR) for Comparable Hotels increased by 1.0% to $156.56 in Q1 2025, while occupancy decreased by 1.5% to 71.1%[9] - The operating margin for Q1 2025 was 15.5%, down 620 basis points from 21.7% in Q1 2024[38] - Average Daily Rate (ADR) for Comparable Hotels increased by 1.0% to $156.56 in Q1 2025 from $155.05 in Q1 2024[38] - Occupancy rate for Comparable Hotels was 71.1%, a decrease of 1.5% from 72.2% in Q1 2024[38] - Revenue per Available Room (RevPAR) decreased slightly by 0.5% to $111.36 in Q1 2025 from $111.97 in Q1 2024[73] - In the top 30 markets, occupancy was 76.2% in Q1 2025, a decrease of 1.2% from 77.1% in Q1 2024[73] - The suburban location category had the highest occupancy at 71.7%, with a 0.4% increase from the previous year[76] Debt and Capital Management - The company maintained a total debt to total capitalization ratio of approximately 33% as of March 31, 2025[12] - As of March 31, 2025, the Company had approximately $1.5 billion of total outstanding debt with a weighted-average interest rate of approximately 4.8%[19] - The Company repaid a secured mortgage loan of approximately $7 million in April 2025, increasing the number of unencumbered hotels to 207[19] - Total debt as of March 31, 2025, is $1,540.26 million, with maturities of $293.001 million in 2025 and $352.649 million in 2026[67] - Average interest rates for total debt are 4.8% for 2025, 4.9% for 2026, and decreasing to 3.6% by 2029[67] Investments and Acquisitions - The company sold two hotels for a combined gross sales price of approximately $21 million during Q1 2025, with a gain of approximately $3.6 million[12] - Apple Hospitality has two hotels under contract for purchase with a total anticipated purchase price of approximately $117 million[13] - The Company anticipates acquiring the 126-room Homewood Suites by Hilton Tampa Brandon for approximately $18.8 million in June 2025[17] - The Company expects to acquire a Motto by Hilton in downtown Nashville, Tennessee, for approximately $98.2 million, with an expected 260 rooms, in late 2025[17] - The company invested approximately $20 million in capital expenditures during Q1 2025 and anticipates investing $80 million to $90 million in capital improvements throughout 2025[16] Shareholder Returns - Monthly distributions paid were $0.29 per common share, including a special cash distribution of $0.05 per share[12] - The Company paid distributions totaling $0.29 per common share during the three months ended March 31, 2025, representing an annual yield of approximately 8.1%[22] - The Company purchased approximately 1.9 million common shares at a weighted-average price of approximately $13.61 per share for a total of approximately $26.3 million during the three months ended March 31, 2025[20] Future Outlook - The Company updated its 2025 outlook, decreasing Net Income by $6.5 million and Adjusted EBITDAre by $14 million compared to previous guidance[23] - The anticipated range for 2025 Net Income is between $167 million and $195 million, with Comparable Hotels RevPAR Change guidance of -1.0% to 1.0%[23] - The Adjusted Hotel EBITDA guidance for 2025 is projected to be between $471,301 and $496,001[63] - For the year ending December 31, 2025, the net income guidance ranges from $166,534 to $194,834, with an EBITDA forecast between $440,742 and $464,442[63] Strategic Focus - The company emphasizes the importance of Adjusted Hotel EBITDA as a key performance measure for evaluating hotel operations and management effectiveness[55] - The company plans to focus on market and location metrics for more effective portfolio performance analysis moving forward[71] - The company operates a total of 218 hotels, with 123 in the top 30 markets contributing 79.4% of Adjusted Hotel EBITDA[73] - Los Angeles, CA, showed a significant occupancy increase of 7.8% to 86.1% in Q1 2025 compared to 79.9% in Q1 2024[73]