For the quarter ended December 2023, Apple Hospitality REIT (APLE) reported revenue of $312.46 million, up 4.5% over the same period last year. EPS came in at $0.31, compared to $0.01 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $304.17 million, representing a surprise of +2.72%. The company has not delivered EPS surprise, with the consensus EPS estimate being $0.31.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- ...

Financial Performance - The Company's ADR for the year ended December 31, 2023, was $156.55, a 4.6% increase from $149.62 in 2022[17] - Comparable Hotels RevPAR rose by approximately 7.0% to $116.23 for the year ended December 31, 2023, compared to $108.67 in 2022[17] - Hotel occupancy increased to 74.2% in 2023, up from 72.6% in 2022, representing a 2.2% improvement[17] - The annualized distribution rate was $0.96 per common share as of December 31, 2023, with a combined distribution of $0.13 per common share approved for January 2024[39] Acquisitions and Investments - The Company acquired six hotels and one parking garage in 2023 for a total purchase price of approximately $289.8 million[20] - As of December 31, 2023, the Company had contracts for the potential purchase of two hotels for a combined price of approximately $177.5 million[21] - The Company plans to invest approximately $75 million to $85 million in capital improvements during 2024, including renovations for about 20 properties[31] Debt and Financing - The Company's total outstanding debt as of December 31, 2023, was approximately $1.4 billion, with a weighted average interest rate of about 4.26%[33] - The unused borrowing capacity under the Revolving Credit Facility was $650 million as of December 31, 2023[34] - The Company sold approximately 12.8 million shares under its ATM Program at a weighted-average market sales price of approximately $17.05 per share, generating gross proceeds of approximately $218.6 million in 2023[37] - The Company has approximately $335.4 million remaining available for share repurchases under its program as of December 31, 2023[24] Property Dispositions - The Company did not dispose of any properties in 2023 but has a contract to sell two hotels for approximately $33.5 million in February 2024[22] - The Company may struggle to complete hotel dispositions due to market conditions and property-specific factors, limiting portfolio flexibility[72] Operational Risks - The company operates substantially all of its hotels under Marriott or Hilton brands, which subjects it to risks associated with brand concentration[60] - The company faces various risks including over-building of hotels, competition, and economic downturns that could adversely affect occupancy rates and revenue[55] - Operating expenses are relatively fixed, meaning that during economic downturns, the company may struggle to reduce costs while revenues decline[56] - The company is dependent on third-party hotel managers for operations, which limits its control over hotel management and could impact financial performance if managers do not perform effectively[63] Economic and Market Conditions - Economic conditions in the U.S. and local markets can adversely affect the company's financial performance and operating results[54] - The hotel industry is highly cyclical and sensitive to government and consumer spending, which can lead to fluctuations in demand and revenue[55] - Competition from alternative lodging options and increased hotel supply in local markets could negatively affect occupancy and revenue per available room (RevPAR)[62] Cost and Profitability Challenges - Inflation and rising operating costs, including labor and energy expenses, may not be offset by increases in room rates, affecting profitability[53] - Labor shortages and rising labor costs could significantly increase operating costs and decrease revenues, potentially affecting hotel capacity[65] - Ongoing renovations and capital improvements are necessary but may reduce profitability due to increased costs and potential disruptions[68] Environmental and Regulatory Risks - The Company is committed to enhancing sustainability practices, including energy and water management, across its hotel portfolio[42] - The Company is subject to various environmental laws that could impose significant cleanup costs and liabilities, affecting profitability and property values[91] - Compliance with environmental, health, and safety regulations incurs costs and could result in fines for non-compliance, impacting financial performance[92] - The Company faces risks related to government regulations and potential litigation concerning environmental matters, which could materially affect its financial condition[90] REIT Compliance and Taxation - The Company's ability to maintain its REIT status is contingent on compliance with complex regulations, and any failure could have adverse consequences for shareholders[106] - The Company must distribute at least 90% of its REIT taxable income annually to avoid U.S. federal corporate income tax on distributed earnings[112] - If the Company fails to qualify as a REIT, it could face substantial additional tax liabilities, adversely affecting net earnings and cash available for distribution[108] Interest Rate and Financial Management - The Company is exposed to interest rate risk due to possible changes in short-term interest rates[232] - Every 100 basis points change in interest rates will impact the Company's annual net income by approximately $1.5 million, all other factors remaining the same[232] - The Company had 14 interest rate swap agreements that effectively fix interest payments on approximately $820.0 million of its variable-rate debt[233] - The average interest rate for variable-rate debt was 5.2% as of December 31, 2023[235] Cybersecurity and Operational Resilience - Cybersecurity risks pose a threat to the Company's operations, potentially leading to system disruptions and liability claims[86] - The Company maintains comprehensive insurance coverage for various risks, but potential uninsured losses could adversely affect its financial condition[87] - Climate change poses risks including severe weather events that could impact hotel demand and operational capabilities, potentially leading to increased costs for insurance and renovations[88]

Core Insights - Apple Hospitality REIT, Inc. reported significant growth in net income and operating income for Q4 and full year 2023, with net income increasing by 798.1% year-over-year for Q4 and 22.6% for the full year [2][3][4] - The company experienced a Comparable Hotels RevPAR growth of over 2% for Q4 2023 and 7% for the full year compared to the same periods in 2022, indicating strong demand in both leisure and business travel [3][4] - The company maintained a strong balance sheet with a total debt to total capitalization ratio of approximately 25% as of December 31, 2023, providing financial flexibility for future growth [4][12] Financial Performance - Net income for Q4 2023 was $20.765 million, compared to $2.312 million in Q4 2022, and for the full year, it was $177.489 million, up from $144.805 million in 2022 [2][4] - Operating income for Q4 2023 was $38.910 million, a 122.5% increase from $17.488 million in Q4 2022, and for the full year, it was $247.481 million, up 19.9% from $206.478 million in 2022 [2][4] - Adjusted EBITDAre for Q4 2023 was $90.536 million, a slight increase of 0.9% from $89.714 million in Q4 2022, while for the full year, it was $436.895 million, up 5.8% from $413.115 million in 2022 [2][4] Operational Metrics - Average Daily Rate (ADR) for Q4 2023 was $149.88, a 1.8% increase from $147.30 in Q4 2022, and for the full year, it was $155.76, up 4.3% from $149.36 in 2022 [2][4] - Comparable Hotels Adjusted Hotel EBITDA for Q4 2023 was approximately $103.667 million, down 1.9% from $105.639 million in Q4 2022, while for the full year, it was $500.079 million, an increase of 4.6% from $477.876 million in 2022 [2][4] - Comparable Hotels occupancy for Q4 2023 was 69.7%, essentially flat compared to 69.8% in Q4 2022, and for the full year, it was 74.2%, up 2% from 72.6% in 2022 [2][4] Portfolio Activity - The company acquired six hotels and a parking garage in 2023 for a total purchase price of approximately $289.8 million, with two additional hotels currently under contract for a combined anticipated purchase price of approximately $177.5 million [4][7][8] - In February 2024, the company sold two hotels for a combined gross sales price of approximately $33.5 million, with plans to use a portion of the proceeds for future acquisitions [10][4] - The company invested approximately $77 million in capital expenditures during 2023 and anticipates investing $75 million to $85 million in 2024 for capital improvements [11][4] Shareholder Distributions - The company paid distributions totaling $0.24 per common share for Q4 2023 and $1.04 per common share for the full year, amounting to approximately $238.3 million [16][4] - The current annualized monthly cash distribution of $0.96 per common share represents an annual yield of approximately 6.0% based on the closing stock price of $15.91 on February 20, 2024 [17][4] 2024 Outlook - For 2024, the company anticipates Comparable Hotels RevPAR change guidance between 2.0% and 4.0%, and Comparable Hotels Adjusted Hotel EBITDA Margin guidance between 34.6% and 35.6% [22][4] - The company expects to continue leveraging its portfolio and operational strengths to maximize long-term value for shareholders [3][4]

Exhibit 99.1 Apple Hospitality REIT Reports Results of Operations for Fourth Quarter and Full Year 2023 RICHMOND, Va. (February 22, 2024) – Apple Hospitality REIT, Inc. (NYSE: APLE) (the "Company" or "Apple Hospitality") today announced results of operations for the fourth quarter and full year ended December 31, 2023. Apple Hospitality REIT, Inc. Selected Statistical and Financial Data As of and For the Three Months and Year Ended December 31 (Unaudited) (in thousands, except statistical and per share amou ...

Industry Overview - Hotel revenues have fully recovered from the pandemic, reaching record highs with the highest average daily rate (ADR) and revenue per available room (RevPAR) on record in 2023 [2] - Despite the recovery in hotel revenues, hotel REITs remain over 20% below pre-pandemic levels [2] Leverage and Cyclicality - Leverage amplifies both success and failure, acting as a multiplier during boom and bust cycles [5] - During the pandemic, leverage exacerbated the crash but should have also amplified the recovery, yet hotel REITs did not fully recover [4][5] - The cost of financial distress, triggered by leverage, led to dilutive maneuvers such as equity issuance, property sales, and preferred share conversions to avoid breaching loan covenants [6] - These dilutive actions resulted in permanent earnings dilution and hindered the recovery of FFO/share and AFFO/share for most hotel REITs [7] Apple Hospitality (APLE) Case Study - APLE stands out as an exception, fully recovering in both FFO and market price due to its low leverage entering the pandemic [8] - APLE's debt + preferred to total enterprise value was about 25% pre-pandemic, compared to 40%-60% for most hotel REITs, allowing it to avoid financial distress and dilutive capital raises [9] - APLE maintained its asset base and share count, enabling a clean recovery in AFFO/share as industry revenues rebounded [10] - APLE's RevPAR of $122.91 in 3Q23 is among the lowest in the industry, with properties spread proportionally to GDP across the U S [8] Market Mispricing and Investment Implications - The market appears to be mispricing hotel REITs, with low-leverage APLE trading at 12 3X AFFO while high-leverage Pebblebrook (PEB) trades at 15 5X AFFO [13] - High leverage in cyclical sectors like hotels increases vulnerability during downturns, making low-leverage companies like APLE more attractive [12] - APLE is identified as a clear opportunity in the sector due to its conservative balance sheet and full recovery [14]

RICHMOND, Va.--(BUSINESS WIRE)--Apple Hospitality REIT, Inc. (NYSE: APLE) (the “Company” or “Apple Hospitality”) today announced that its Board of Directors declared a regular monthly cash distribution of $0.08 per common share. The distribution is payable on February 15, 2024, to shareholders of record as of January 31, 2024. Based on the Company’s common stock closing price of $16.16 on January 18, 2024, the annualized distribution of $0.96 per common share represents an annual yield of approximately 5.9 ...

Financial Data and Key Metrics Changes - Comparable hotels total revenue for Q3 2023 was $356 million, up 4% year-over-year, and over $1 billion for the first nine months, up 9% compared to the same periods in 2022 [18] - Comparable hotels RevPAR was $123, a 3% increase over Q3 2022, with ADR of $159, up 1%, and occupancy of 77%, up 2% year-over-year [18] - Adjusted EBITDA for Q3 was approximately $132 million, a 1% improvement year-over-year, with a comparable hotels adjusted hotel EBITDA margin of 37.1%, down 110 basis points from Q3 2022 [24][26] Business Line Data and Key Metrics Changes - Leisure travel remained strong with weekend occupancies at 82%, up 1% compared to Q3 2022, while average weekday occupancies improved to 75%, an increase of 2% year-over-year [19] - The company achieved a comparable hotels adjusted hotel EBITDA margin of 37.1% for Q3, reflecting a focus on cost controls amid inflationary pressures [24] Market Data and Key Metrics Changes - Preliminary results for October indicated comparable hotels occupancy at 78%, with continued growth in ADR [6] - The company noted that nearly half of its hotels do not have new supply under construction within a 5-mile radius, allowing for potential benefits from incremental demand [15] Company Strategy and Development Direction - The company has acquired four hotels since the beginning of the year and has three additional hotels under contract, actively pursuing further opportunities [8][13] - The strategy focuses on maintaining a diversified portfolio of high-quality, rooms-focused hotels with low leverage, positioning the company to capitalize on market opportunities [7][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of the industry and the company's portfolio, citing favorable travel trends and limited near-term supply growth [15][31] - The company has adjusted its annual guidance to reflect strong performance through the first nine months and preliminary results for October, expecting RevPAR growth between 5.5% and 7.5% for the year [29][30] Other Important Information - The company paid distributions totaling $0.24 per share during the quarter, representing an annual yield of approximately 5.7% based on the closing stock price [14] - The balance sheet remains strong with total outstanding debt of $1.3 billion, approximately 3.1 times trailing 12-month EBITDA, and a weighted average interest rate of 4.3% [26][27] Q&A Session Summary Question: Can you help us understand the revised guidance for hotel EBITDA margin change? - The revised guidance assumes a 50 basis point change for the existing comparable hotels, with a 30 basis point benefit from new acquisitions [34][35] Question: What is the expectation for hotel EBITDA contribution from acquisitions set to close this year? - The annualized contribution from new properties is estimated to be around $16 million [42] Question: How do you view the market for larger transactions and troubled refinancing portfolios? - The company is active in underwriting potential acquisitions, focusing on individual assets and small to medium-sized portfolios, with expectations for continued opportunities due to financing issues in the market [45][46] Question: How much of your occupancy is booked in advance for the last two months of the year? - Typically, about 50% of occupancy is on the books as the month begins, with the remaining realized in the month [68] Question: What is the company's view on permanent financing and current market pricing? - The company balances fixed versus floating rates, currently being about 20% variable, and has lower borrowing costs compared to competitors [76][78] Question: How do you see leisure-focused markets stabilizing as we enter 2024? - The company remains bullish about long-term prospects for leisure markets, expecting stabilization and growth from pre-pandemic levels [80][82]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______ Commission File Number 001-37389 APPLE HOSPITALITY REIT, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of ...

Apple Hospitality REIT, Inc. (NYSE:APLE) Q2 2023 Earnings Conference Call August 4, 2023 9:00 AM ET Company Participants Kelly Clarke - VP, IR Justin Knight - CEO Liz Perkins - CFO Conference Call Participants Austin Wurschmidt - KeyBanc Capital Markets Dori Kesten - Wells Fargo Securities Tyler Batory - Oppenheimer Tyler Batory - Oppenheimer & Co. Inc. Anthony Powell - Barclays Michael Bellisario - Robert W. Baird Chris Darling - Green Street Operator Greetings and welcome to the Apple Hospitality REIT's S ...

Financial Performance - Total revenue for the three months ended June 30, 2023, was $361.63 million, a 7.1% increase from $337.67 million in the same period of 2022[79]. - Net income adjusted for hotel operations was $65.29 million for the three months ended June 30, 2023, compared to $65.35 million in the same period of 2022, reflecting a slight decrease of 0.1%[79]. - For the six months ended June 30, 2023, total revenue reached $673.1 million, up 12.5% from $598.1 million in 2022[84]. - Net income for the three months ended June 30, 2023, was $65,289, compared to $65,345 for the same period in 2022, reflecting a slight decrease of 0.09%[99]. - Funds from Operations (FFO) for the three months ended June 30, 2023, was $110.5 million, compared to $109.9 million in 2022[95]. - Modified Funds from Operations (MFFO) for the three months ended June 30, 2023, was $111.4 million, slightly up from $110.8 million in 2022[94]. - Adjusted EBITDA for the six months ended June 30, 2023, increased to $224,432, up from $204,506 in the same period of 2022, representing a growth of 9.7%[99]. Hotel Operations - As of June 30, 2023, the company owned 220 hotels with a total of 28,929 rooms, an increase from 219 hotels and 28,748 rooms as of June 30, 2022[72][77]. - Average daily rate (ADR) increased to $160.98 for the three months ended June 30, 2023, up 5.0% from $153.35 in the same period of 2022[79]. - Occupancy rate improved to 78.2% for the three months ended June 30, 2023, compared to 77.9% in the same period of 2022, marking a 0.4% increase[79]. - Revenue per available room (RevPAR) rose to $125.96 for the three months ended June 30, 2023, a 5.5% increase from $119.41 in the same period of 2022[79]. - Comparable Hotels achieved a RevPAR of $125.64 for the three months ended June 30, 2023, representing an increase of 5.3% compared to $119.28 in 2022[85]. - Hotel operating expenses increased to $200.51 million for the three months ended June 30, 2023, a 9.9% increase from $182.52 million in the same period of 2022[79]. - Hotel operating expenses for the three months ended June 30, 2023, totaled $200.5 million, accounting for 55.4% of total revenue, compared to 54.1% in 2022[86]. Acquisitions and Expansion - The company completed the acquisition of a 154-room Courtyard in Cleveland, Ohio for $31.0 million in 2023[73]. - The company has contracts for the potential purchase of two hotels in Madison, Wisconsin, and Nashville, Tennessee, for a total of approximately $175.3 million, with expected completion dates in early 2024 and 2025[74]. - The company has completed acquisitions and openings of multiple hotels across various states, including 130 rooms in San Juan Capistrano and 155 rooms in Santa Ana[108]. - The company has expanded its portfolio with new properties such as 221 rooms in Denver and 149 rooms in Boca Raton, enhancing its market presence[108]. - The company is focusing on expanding its footprint in Florida, with multiple new openings in cities like Miami and Tampa, indicating a strategic market expansion[108]. - The company has a robust pipeline of new developments, with several properties set to open in the coming years, enhancing its competitive edge[110]. Financial Position and Debt - As of June 30, 2023, the company had total outstanding debt of $1.4 billion, which includes $287.5 million in mortgage debt and $1.1 billion under unsecured credit facilities[117]. - The company had available corporate cash on hand of approximately $6.4 million and unused borrowing capacity under its Revolving Credit Facility of approximately $626.0 million[117]. - The company plans to spend approximately $70 million to $80 million on capital improvements during 2023, including renovations for 20 to 25 properties[126]. - The Company has outstanding contracts for the potential purchase of two hotels for a total combined purchase price of approximately $175.3 million, with expected completion dates in early 2024 and 2025[128]. - Approximately $299.0 million, or 21% of the Company's total debt, was subject to variable interest rates as of June 30, 2023[136]. - The Company purchased approximately 0.5 million common shares at a weighted-average market purchase price of approximately $14.34 per share for an aggregate purchase price of approximately $6.8 million during the six months ended June 30, 2023[125]. Challenges and Future Outlook - The Company anticipates future revenue growth will likely be at a lower rate due to favorable comparisons from the first half of 2022 impacted by the Omicron variant[85]. - The Company continues to face challenges in staffing and inflationary pressures affecting operational costs, which may impact future profitability[86]. - Macroeconomic pressures, including inflation and interest rate increases, could impact the company's ability to raise capital[116]. - Future outlook includes continued expansion and potential acquisitions to strengthen market position and enhance revenue streams[108]. - The company is committed to innovation in hospitality, focusing on new product offerings and technology integration to improve guest experiences[108].