Apple Hospitality REIT, Inc. (NYSE:APLE) Q1 2022 Earnings Conference Call May 6, 2022 10:00 AM ET Company Participants Kelly Clarke - Vice President of Investor Relations Justin Knight - Chief Executive Officer Liz Perkins - Chief Financial Officer Conference Call Participants Neil Malkin - Capital One Securities Dori Kesten - Wells Fargo Anthony Powell - Barclays Floris Van Dijkum - Compass Point Tyler Batory - Oppenheimer Daniel Tricarico - KeyBanc Michael Bellisario - Baird Bryan Maher - B. Riley Securit ...

Financial Data and Key Metrics Changes - The company reported a significant recovery in full-year operating results, with comparable total revenue up more than 62% relative to 2020 [10] - Adjusted EBITDA for 2021 was $279 million, with modified funds from operations (MFFO) at $211 million or $0.93 per share [10][26] - For Q4 2021, adjusted hotel EBITDA was approximately $85 million, with a comparable adjusted hotel EBITDA margin of approximately 34% [25][26] Business Line Data and Key Metrics Changes - Average Daily Rate (ADR) for Q4 was over $131, nearly equal to the same period in 2019, while occupancy was 68%, down just over 5 percentage points [18] - RevPAR for Q4 was $88, down less than 8% compared to the same period in 2019 [18] - Weekend occupancy remained strong, with October and November weekend occupancies at 85% and 80% respectively, while December weekend occupancy was 67%, in line with 2019 [20] Market Data and Key Metrics Changes - Demand for suburban hotels outpaced urban hotels, with occupancy at 69% compared to 62% for comparable urban hotels [23] - 38% of hotels had RevPAR for the quarter exceeding the same period in 2019, indicating strong performance in certain markets [22] - The company noted that new supply has declined significantly, with projects under construction near all-time lows [16] Company Strategy and Development Direction - The company is focused on strategic acquisitions and dispositions to optimize its portfolio, having acquired 12 hotels for approximately $473 million and sold 24 hotels for approximately $245 million since the pandemic began [11] - The company plans to invest an additional $55 million to $65 million in capital improvements in 2022, including major renovations at 20 to 25 hotels [12] - The strategy emphasizes maintaining a diversified portfolio of high-quality, select-service hotels with low leverage [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong leisure demand and increasing business travel as COVID-19 cases decline and restrictions ease [9][15] - The company anticipates that total demand for its portfolio will exceed pre-pandemic levels as business transient travel returns [15] - Management highlighted the importance of market diversification and the benefits of operating in markets with favorable conditions for both leisure and business travel [16] Other Important Information - The company reinstated monthly dividends for shareholders, with a March payment of $0.05 per share, representing a 3.4% yield on the closing share price [15][30] - Total outstanding debt as of December 31, 2021, was $1.4 billion, with a weighted average interest rate of 3.4% [27][28] Q&A Session Summary Question: Can you discuss the transaction environment and pricing expectations? - Management noted that the transaction environment remains competitive, with pricing for most assets at or above 2019 levels, and they are focused on markets with anticipated outsized growth [34][36] Question: How is the demand from corporate accounts evolving? - Management indicated that negotiated business bookings are increasing, with improvements in both local and corporate negotiated business despite the impact of Omicron [41] Question: What factors contributed to the dividend reinstatement decision? - The decision was based on the portfolio's performance during the pandemic and confidence in the recovery, with a payout ratio of approximately 65% relative to MFFO [46] Question: What are the current trends in occupancy and ADR? - Management reported that occupancy levels have increased in February, with strong booking trends and expectations for continued rate growth in March and April [48][49] Question: How is the labor and hiring environment affecting operations? - The company is operating at approximately 70% to 75% of full-time employees relative to 2019, with plans to adjust staffing levels as occupancy grows [59][60] Question: What is the outlook for new supply and replacement costs? - Management highlighted a significant pullback in new construction starts, which is expected to create a multi-year window with below-average supply in most markets [65][66]

Apple Hospitality REIT, Inc. (NYSE:APLE) Q3 2021 Earnings Conference Call November 5, 2021 10:00 AM ET Company Representatives Justin Knight - Chief Executive Officer Liz Perkins - Chief Financial Officer Kelly Clarke - Vice President, Investor Relations Conference Call Participants Neil Malkin - Capital One Securities Kyle Menges - B. Riley Securities Anthony Powell - Barclays Tyler Batory - Janney Michael Bellisario - Baird Chris Darling - Green Street Austin Wurschmidt - KeyBanc Operator Greetings! And w ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements detail the company's financial position, operational results, and cash flows for the third quarter and first nine months of 2021 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet shows total assets of $4.70 billion and total liabilities of $1.58 billion as of September 30, 2021, with shareholders' equity increasing to $3.13 billion Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 (unaudited) | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Investment in real estate, net | $4,541,424 | $4,732,896 | | Cash and cash equivalents | $39,432 | $5,556 | | **Total Assets** | **$4,704,827** | **$4,829,759** | | **Liabilities** | | | | Debt, net | $1,366,621 | $1,482,571 | | Accounts payable and other liabilities | $111,706 | $219,981 | | **Total Liabilities** | **$1,576,713** | **$1,800,412** | | **Total Shareholders' Equity** | **$3,128,114** | **$3,029,347** | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) The company's profitability significantly improved, reporting a net income of $31.8 million for Q3 2021 compared to a net loss of $40.9 million in Q3 2020 Key Operating Results (in thousands, except per share data) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $277,164 | $148,826 | $683,281 | $467,914 | | Operating Income (Loss) | $47,850 | $(22,356) | $59,024 | $(69,212) | | Net Income (Loss) | $31,759 | $(40,948) | $5,607 | $(121,960) | | Basic and Diluted EPS | $0.14 | $(0.18) | $0.02 | $(0.55) | [Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity increased to $3.13 billion, driven by net income and common share issuances, partially offset by shareholder distributions - For the nine months ended September 30, 2021, the company issued 4.68 million common shares, netting **$75.0 million**[16](index=16&type=chunk) - Distributions declared to shareholders totaled **$6.8 million** ($0.03 per share) for the first nine months of 2021, compared to **$45.0 million** ($0.20 per share) in the same period of 2020[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $146.4 million for the nine-month period, with investing activities funded by real estate sales and financing activities used for debt repayment Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $146,362 | $26,199 | | Net cash provided by (used in) investing activities | $21,997 | $(88,100) | | Net cash provided by (used in) financing activities | $(128,849) | $82,859 | | **Net change in cash** | **$39,510** | **$20,958** | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and significant financial activities, including the impact of COVID-19, real estate transactions, and debt management - As of September 30, 2021, the Company owned **215 hotels** with **28,085 rooms** in 35 states[20](index=20&type=chunk) - The company notes that while hotel occupancy has recovered significantly during the first nine months of 2021, significant uncertainty remains as to when or if operations will return to pre-pandemic levels due to COVID-19[23](index=23&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant recovery in hotel operations, portfolio changes, financial performance, and liquidity position during 2021 [Overview and COVID-19 Impact](index=21&type=section&id=Overview%20and%20COVID-19%20Impact) The company's operations showed recovery from the COVID-19 pandemic driven by leisure travel, though a full recovery remains uncertain and dependent on business travel - The company expects the decline in revenue associated with COVID-19 to negatively impact operating results for an extended period, with a **full recovery dependent on the return of business travel**[104](index=104&type=chunk) - Cost reduction initiatives, such as adjusting operations, reducing amenities, and renegotiating service contracts, are **not expected to fully offset revenue losses** from the pandemic[105](index=105&type=chunk) [2021 Hotel Portfolio Activities](index=22&type=section&id=2021%20Hotel%20Portfolio%20Activities) The company actively managed its portfolio by acquiring four hotels for $197.5 million and selling 23 hotels for $234.6 million during the first nine months of 2021 - Acquired four hotels in Madison, WI; Portland, ME (two hotels); and Greenville, SC for an aggregate gross purchase price of approximately **$147.9 million**, plus a previously contracted Hilton Garden Inn in Madison, WI for **$49.6 million**[106](index=106&type=chunk) - Sold 23 hotels for a total gross sales price of approximately **$234.6 million**, resulting in a net gain of **$3.7 million**[110](index=110&type=chunk) - As of September 30, 2021, the company had outstanding contracts to purchase five hotels for a total expected price of **$242.6 million**, with four expected to close in Q4 2021 and one in 2023[107](index=107&type=chunk) [Hotel Operations](index=23&type=section&id=Hotel%20Operations) Hotel operations demonstrated a strong recovery in Q3 2021, with RevPAR for the total portfolio increasing 96.6% year-over-year, though still below pre-pandemic levels Total Portfolio Operating Metrics | Metric | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | ADR | $140.02 | $104.78 | 33.6% | | Occupancy | 71.5% | 48.6% | 47.1% | | RevPAR | $100.14 | $50.94 | 96.6% | Comparable Hotels (215 properties) Operating Metrics | Metric | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | ADR | $141.56 | $106.13 | 33.4% | | Occupancy | 71.6% | 48.7% | 47.0% | | RevPAR | $101.32 | $51.64 | 96.2% | - Occupancy for the company's portfolio reached approximately **76% in July 2021**, the highest monthly level since the pandemic began, and was approximately **73% in October 2021**[124](index=124&type=chunk) [Non-GAAP Financial Measures](index=26&type=section&id=Non-GAAP%20Financial%20Measures) Key non-GAAP metrics like MFFO and Adjusted Hotel EBITDA showed substantial year-over-year growth, reflecting the operational recovery in Q3 2021 Reconciliation of Net Income (Loss) to FFO and MFFO (in thousands) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $31,759 | $(40,948) | $5,607 | $(121,960) | | Funds from operations | $74,743 | $7,359 | $147,577 | $17,656 | | Modified funds from operations | $76,065 | $9,118 | $152,417 | $22,912 | Reconciliation of Net Income (Loss) to Adjusted Hotel EBITDA (in thousands) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $31,759 | $(40,948) | $5,607 | $(121,960) | | EBITDA | $92,165 | $27,918 | $198,631 | $80,683 | | Adjusted Hotel EBITDA | $105,423 | $34,688 | $235,664 | $98,689 | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity with $1.4 billion in debt and $464.4 million in available capital, exiting its debt covenant waiver period in July 2021 - Total liquidity as of September 30, 2021, included approximately **$39.4 million in cash** and **$425 million of unused capacity** on the revolving credit facility[164](index=164&type=chunk) - The company **exited its Extended Covenant Waiver Period** on July 29, 2021, and is no longer subject to prior restrictions on acquisitions, distributions, and capital expenditures[169](index=169&type=chunk) - In Q2 2021, the company sold 4.7 million shares under its ATM Program, raising approximately **$75.1 million in net proceeds**[171](index=171&type=chunk) - The company anticipates spending an additional **$15-20 million on capital expenditures** for the remainder of 2021, including renovations for approximately eight properties[178](index=178&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure, which is significantly mitigated through interest rate swaps covering most of its variable-rate debt - The company uses 13 interest rate swap agreements to effectively fix the interest payments on **$770.0 million** of its variable-rate debt[188](index=188&type=chunk) - Approximately **4% ($50.0 million)** of the company's total debt outstanding was subject to variable interest rates as of September 30, 2021[187](index=187&type=chunk) - A **100 basis point change** in interest rates is estimated to impact annual net income by approximately **$0.5 million**[187](index=187&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any litigation expected to have a material adverse effect on its financial condition or operations - The Company is not currently a party to any legal proceedings that would have a **material adverse effect** on its financial condition or operations[194](index=194&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period - The Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer concluded that the Company's disclosure controls and procedures were **effective as of September 30, 2021**[191](index=191&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including corporate governance documents and required certifications [Signatures](index=41&type=section&id=Signatures) The report is duly signed and authorized by the company's executive officers as of November 4, 2021

Apple Hospitality REIT, Inc. (NYSE:APLE) Q2 2021 Results Conference Call August 6, 2021 10:00 AM ET Company Participants Kelly Clarke - Vice President of Investor Relations Justin Knight - Chief Executive Officer Liz Perkins - Senior Vice President and Chief Financial Officer Conference Call Participants Neil Malkin - Capital One Securities Austin Wurschmidt - KeyBanc Anthony Powell - Barclays Tyler Batory - Janney Dany Asad - Bank of America Dori Kesten - Wells Fargo Michael Bellisario - Baird Chris Darlin ...