EX-99.1 2 ex_162566.htm EXHIBIT 99.1 ex_162566.htm

 

Exhibit 99.1

 

 

Apple Hospitality REIT Reports Results of Operations for Third Quarter 2019

 

RICHMOND, Va. (November 4, 2019) Apple Hospitality REIT, Inc. (NYSE: APLE) (the “Company” or “Apple Hospitality”) today announced results of operations for the third quarter ended September 30, 2019.

 

 

 

 Selected Statistical and Financial Data

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

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

 

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

September 30,

 
   

2019

   

2018

   

% Change

   

2019

   

2018

   

% Change

 
                                                 

Net income(2)

  $ 46,223     $ 62,122       (25.6 %)   $ 146,464     $ 171,934       (14.8 %)

Net income per share(2)

  $ 0.21     $ 0.27       (22.2 %)   $ 0.65     $ 0.75       (13.3 %)
                                                 

Adjusted EBITDAre(2)

  $ 115,557     $ 122,552       (5.7 %)   $ 342,675     $ 353,681       (3.1 %)

Comparable Hotels Adjusted Hotel EBITDA(2)

  $ 124,367     $ 124,032       0.3 %   $ 366,102     $ 365,708       0.1 %

Comparable Hotels Adjusted Hotel EBITDA Margin %(2)

    37.6 %     38.1 %  

(50 bps)

      37.8 %     38.2 %  

(40 bps)

 

Modified funds from operations (MFFO)(2)

  $ 100,403     $ 109,068       (7.9 %)   $ 295,317     $ 314,283       (6.0 %)

MFFO per share(2)

  $ 0.45     $ 0.47       (4.3 %)   $ 1.32     $ 1.36       (2.9 %)
                                                 

Average Daily Rate (ADR) (Actual)

  $ 139.21     $ 137.77       1.0 %   $ 139.13     $ 137.32       1.3 %

Occupancy (Actual)

    79.9 %     78.9 %     1.3 %     78.4 %     78.4 %     -  

Revenue Per Available Room (RevPAR) (Actual)

  $ 111.17     $ 108.70       2.3 %   $ 109.02     $ 107.71       1.2 %
                                                 

Comparable Hotels ADR

  $ 139.32     $ 139.01       0.2 %   $ 139.58     $ 138.72       0.6 %

Comparable Hotels Occupancy

    79.9 %     79.2 %     0.9 %     78.6 %     78.8 %     (0.3 %)

Comparable Hotels RevPAR

  $ 111.36     $ 110.12       1.1 %   $ 109.64     $ 109.25       0.4 %
                                                 

Distributions paid

  $ 67,154     $ 69,061       (2.8 %)   $ 201,497     $ 207,265       (2.8 %)

Distributions paid per share

  $ 0.30     $ 0.30       -     $ 0.90     $ 0.90       -  
                                                 

Total debt outstanding

  $ 1,344,804                                          

Total debt to total capitalization (3)

    26.6 %                                        

 

(1)

Explanations of and reconciliations to net income determined in accordance with generally accepted accounting principles (“GAAP”) of non-GAAP financial measures, Adjusted EBITDAre, Comparable Hotels Adjusted Hotel EBITDA and MFFO, are included below.

(2)

On January 1, 2019, the Company adopted the Financial Accounting Standards Board’s Accounting Standards Update No. 2016-02, Leases (Topic 842). Under the new lease accounting standard, the Company classified four ground leases as finance leases that were previously classified as operating leases in accordance with the previous accounting standard. See discussion below for additional information on the adoption of the new lease accounting standard. 

(3)

Total debt outstanding divided by total debt outstanding plus equity market capitalization based on the Company’s closing share price of $16.58 on September 30, 2019.

 

 

Comparable Hotels is defined as the 233 hotels owned and held for use by the Company as of September 30, 2019. For hotels acquired during the periods noted, the Company has included, as applicable, results of those hotels for periods prior to the Company's ownership, and for dispositions and assets held for sale, results have been excluded for the Company's period of ownership. Results for periods prior to the Company's ownership have not been included in the Company's actual Consolidated Financial Statements and are included only for comparison purposes. Results included for periods prior to the Company's ownership are based on information from the prior owner of each hotel and have not been audited or adjusted.

 

Justin Knight, President and Chief Executive Officer of Apple Hospitality, commented, “Performance across our portfolio of hotels during the third quarter was generally consistent with our expectations and was positively impacted by calendar shifts and solid transient demand. We remain diligently focused on maximizing profitability and are pleased to

 

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report a strong Comparable Hotels Adjusted Hotel EBITDA Margin of approximately 38 percent for the quarter and year to date, despite ongoing cost and supply pressures. Given the strength of our portfolio of rooms-focused hotels, our geographic diversification and the flexibility of our balance sheet, we believe we are well positioned to maximize shareholder value over the long term.”

 

Portfolio Activity

Acquisitions and Contracts for Potential Acquisitions

Since the beginning of 2019, Apple Hospitality has completed the acquisition of three hotels, including a 55-room independent boutique hotel in downtown Richmond, Virginia, that was acquired in October of 2019 for a total purchase price of approximately $7 million. Although the Company does not intend to associate this hotel with a brand, the Company does plan to reposition the hotel to be consistent with its existing rooms-focused hotels. The Company continues to have outstanding contracts for the potential purchase of six additional hotels for a combined total expected purchase price of approximately $209 million. The six hotels under contract are currently under development and assuming all conditions to closing are met, will be acquired over the next nine to 21 months from September 30, 2019. There are many conditions to closing under each of the contracts that have not yet been satisfied, including completion of construction, and there can be no assurance that closings on the six hotels will occur.

 

Dispositions and Contracts for Potential Dispositions

In addition to the nine hotels sold in March of 2019, Apple Hospitality has entered into separate contracts for the potential sale of three hotels. Details related to the sale contracts are as follows:

 

In August 2019, the Company entered into a contract for the potential sale of its 122-room Courtyard by Marriott in Winston-Salem, North Carolina, for a gross sales price of approximately $7 million. The Company classified the Winston-Salem Courtyard as assets held for sale in its consolidated balance sheet and recognized an impairment loss of approximately $6 million in the third quarter of 2019. If the closing occurs, the sale is expected to be completed in the fourth quarter of 2019.

 

In October 2019, the Company entered into a contract for the potential sale of its 109-room Hampton Inn by Hilton in Fort Lauderdale, Florida, for a gross sales price of $20 million. If the closing occurs, the sale is expected to be completed in December 2019, and the Company anticipates recognizing a gain on completion of the sale.

 

In October 2019, the Company entered into a contract for the potential sale of its 105-room SpringHill Suites by Marriott in Sanford, Florida, for a gross sales price of $13 million. If the closing occurs, the sale is expected to be completed in the first quarter of 2020, and the Company anticipates recognizing a gain on completion of the sale.

Although the Company is working towards the sale of the three hotels, there are many conditions to closing that have not yet been satisfied and there can be no assurance that closings on the three hotels will occur.

 

Renaissance New York Hotel 57 to Become an Independent Boutique Hotel

The Company plans to convert its 208-room Renaissance hotel in New York, New York, to an independent boutique hotel during the first quarter of 2020. The Company anticipates it will incur conversion costs of approximately $1 million over the next six months to complete the transition to an independent boutique hotel. The intent of the conversion is to provide greater long-term flexibility with the operations of the hotel. Although the Company is not able to fully estimate the near-term impact associated with the transition, it does anticipate operational disruption as the management team works to replace revenue that currently results from participation in the Renaissance brand system.

 

Capital Improvements

Apple Hospitality consistently reinvests in its hotels to maintain and enhance each property’s relevance and competitive position within its respective market. During the nine months ended September 30, 2019, the Company invested approximately $47 million in capital expenditures. The Company plans to continue to reinvest in its hotels and

 

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anticipates investing an additional $30 million to $40 million in capital improvements during the remainder of 2019, which includes various scheduled renovation projects at approximately 20 properties, including the Company’s full-service Marriott in Richmond, Virginia.

 

Adoption of New Lease Accounting Standard

On January 1, 2019, the Company adopted Accounting Standards Update No. 2016-02, Leases (Topic 842). Under this standard, lessees are required to recognize most leases on their balance sheets as right-of-use assets and lease liabilities. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Under the new standard, four of the Company’s ground leases that were previously classified as operating leases under the previous accounting standard are classified as financing leases under Topic 842. For these finance leases, effective January 1, 2019, the Company recognizes depreciation and amortization expense and interest and other expense, net in the Company’s consolidated statements of operations, instead of operating ground lease expense. While the total expense recognized over the life of a lease is unchanged, the timing of expense recognition for these finance leases results in higher expense during the earlier years of the lease and lower expense during the later years of the lease. For the three and nine months ended September 30, 2019, the Company recognized approximately $1.5 million and $5.4 million of interest expense, respectively, and approximately $0.7 million and $2.9 million of amortization expense, respectively, associated with these four finance leases. Under the previous accounting standard, the Company would have recognized approximately $1.3 million and $4.6 million of cash operating ground lease expense and $0.6 million and $2.8 million of non-cash straight-line ground lease expense and amortization of intangible lease expense during the three and nine months ended September 30, 2019, respectively, for these four ground leases. As a result of the new lease standard, at September 30, 2019, the Company’s balance sheet reflects finance ground lease assets, net, of approximately $194.8 million, operating lease assets, net, of approximately $28.6 million and associated combined lease liabilities of approximately $228.1 million.

 

Balance Sheet

As of September 30, 2019, Apple Hospitality had approximately $1.3 billion of total outstanding indebtedness with a current combined weighted-average interest rate of approximately 3.6 percent for the remainder of 2019. Excluding unamortized debt issuance costs and fair value adjustments, the Company’s total outstanding indebtedness is comprised of approximately $458 million in property-level debt secured by 29 hotels and $887 million outstanding on its unsecured credit facilities. Apple Hospitality’s undrawn capacity on its unsecured credit facilities at September 30, 2019 was approximately $274 million. The Company’s total debt to total capitalization at September 30, 2019 was approximately 27 percent, which provides Apple Hospitality with financial flexibility to fund capital requirements and pursue opportunities in the marketplace. The Company’s weighted-average debt maturities are 5 years, and the weighted-average maturity of its effectively fixed-rate debt is 4 years at a weighted-average interest rate of 3.7 percent.

 

Shareholder Distributions

Apple Hospitality paid distributions of $0.30 per common share during the three-month period ended September 30, 2019. Based on the Company’s common share closing price of $16.48 on October 31, 2019, the annualized distribution rate of $1.20 per common share represents an annual yield of approximately 7.3 percent. 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.

 

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2019 Outlook

Apple Hospitality is providing its operational and financial outlook for 2019. This outlook, which is based on management’s current view of both operating and economic fundamentals of the Company’s existing portfolio of hotels, does not take into account any unanticipated developments in its business or changes in its operating environment, nor does it take into account any unannounced hotel acquisitions or dispositions. As compared to previously provided 2019 guidance, the Company is adjusting: Net Income by increasing the low end of the range by $1 million and decreasing the high end of the range by $6 million; Comparable Hotels RevPAR Change by narrowing the low and high ends of the range by 25 bps and 50 bps, respectively; Comparable Hotels Adjusted Hotel EBITDA Margin % by narrowing the high end of the range by 10 bps while maintaining the low end of the range; and Adjusted EBITDAre by decreasing the high end of the range by $6 million while maintaining the low end of the range. The reduction in the midpoint of the Company’s guidance for Net Income and Adjusted EBITDAre is primarily a result of higher anticipated general and administrative expenses associated with outperformance of the Company’s relative shareholder return metrics, which are components of the Company’s incentive plans. Comparable Hotels RevPAR Change and Comparable Hotels Adjusted Hotel EBITDA Margin % guidance include properties acquired, as if the hotels were owned as of January 1, 2018, and exclude dispositions and assets held for sale since January 1, 2018. For the full year 2019, the Company anticipates:

 

   

2019 Guidance(1)

 
   

Low-End

   

High-End

 

Net income

 

$168 Million

   

$182 Million

 
             

Comparable Hotels RevPAR Change

  (0.50%)     0.25%  
             

Comparable Hotels Adjusted Hotel EBITDA Margin %

  36.4%     36.9%  
             

Adjusted EBITDAre

 

$425 Million

   

$435 Million

 

 

 

 

 

(1)

Explanations of and reconciliations to net income guidance of Adjusted EBITDAre guidance are included below.

 

Third Quarter 2019 Earnings Conference Call

The Company will host a quarterly conference call for investors and interested parties on Tuesday, November 5, 2019, at 9:00 a.m. 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 12:00 p.m. Eastern Time on November 5, 2019, through 11:59 p.m. Eastern Time on November 26, 2019. To access the replay, the domestic dial-in number is 844-512-2921, the international dial-in number is 412-317-6671, and the passcode is 13694964. The archive of the webcast will be available on the Company's website for a limited time.

 

About Apple Hospitality REIT, Inc.

Apple Hospitality REIT, Inc. (NYSE: APLE) is a publicly traded real estate investment trust (“REIT”) that owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States. Apple Hospitality’s portfolio consists of 235 hotels with more than 30,000 guest rooms located in 87 markets throughout 34 states. Franchised with industry-leading brands, the Company’s portfolio comprises 108 Marriott-branded hotels, 125 Hilton-branded hotels, one Hyatt-branded hotel and one independent hotel. For more information, please visit www.applehospitalityreit.com.

 

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Apple Hospitality REIT Non-GAAP Financial Measures

The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its operating performance: Funds from Operations (“FFO”); Modified FFO (“MFFO”); Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”); Earnings Before Interest, Income Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”); Adjusted EBITDAre (“Adjusted EBITDAre”); 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, EBITDAre, Adjusted EBITDAre 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, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA, as calculated by the Company, may not be comparable to FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre 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. Reconciliations of these non-GAAP financial measures to net income (loss) are provided in the following pages.

 

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,” “outlook,” “strategy,” and similar expressions that convey the uncertainty of future events or outcomes. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of 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 successfully integrate pending transactions and 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; litigation risks; 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 titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Any forward-looking statement that Apple Hospitality makes speaks only as of the date of such statement. 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, Vice President, Investor Relations

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.

Consolidated Balance Sheets

(in thousands, except share data) 

 

   

September 30,

   

December 31,

 
   

2019

   

2018

 
   

(unaudited)

         

Assets

               

Investment in real estate, net of accumulated depreciation and amortization

      of $1,016,532 and $909,893, respectively

  $ 4,863,873     $ 4,816,410  

   Assets held for sale

    6,574       -  

   Restricted cash-furniture, fixtures and other escrows

    35,287       33,632  

   Due from third party managers, net

    40,473       29,091  

   Other assets, net

    44,220       49,539  

      Total Assets

  $ 4,990,427     $ 4,928,672  
                 

Liabilities

               

   Debt, net

  $ 1,339,912     $ 1,412,242  

   Finance lease liabilities

    215,816       -  

   Accounts payable and other liabilities

    107,763       107,420  

      Total Liabilities

    1,663,491       1,519,662  
                 

Shareholders' Equity

               

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

    -       -  

Common stock, no par value, authorized 800,000,000 shares; issued and

      outstanding 223,856,228 and 223,997,348 shares, respectively

    4,493,598       4,495,073  

   Accumulated other comprehensive income (loss)

    (10,351 )     10,006  

   Distributions greater than net income

    (1,156,311 )     (1,096,069 )

      Total Shareholders' Equity

    3,326,936       3,409,010  
                 

      Total Liabilities and Shareholders' Equity

  $ 4,990,427     $ 4,928,672  

 

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, 2019.

 

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Apple Hospitality REIT, Inc.

Consolidated Statements of Operations and Comprehensive Income 

(Unaudited)

(in thousands, except per share data)

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

September 30,

 
   

2019

   

2018

   

2019

   

2018

 

Revenues:

                               

    Room

  $ 307,293     $ 307,794     $ 901,995     $ 901,652  

    Food and beverage

    14,079       14,629       44,786       46,857  

    Other

    10,350       9,774       29,845       26,791  

Total revenue

    331,722       332,197       976,626       975,300  
                                 

Expenses:

                               

Hotel operating expense:

                               

    Operating

    80,717       81,318       236,463       238,514  

    Hotel administrative

    25,991       25,722       78,588       77,382  

    Sales and marketing

    29,764       27,265       88,289       80,765  

    Utilities

    11,635       12,163       31,135       32,693  

    Repair and maintenance

    13,430       13,204       39,337       39,133  

    Franchise fees

    14,508       14,326       42,371       41,840  

    Management fees

    11,548       11,250       34,049       33,781  

Total hotel operating expense

    187,593       185,248       550,232       544,108  

    Property taxes, insurance and other

    19,186       19,230       57,217       55,140  

    Operating ground lease

    425       2,818       1,253       8,580  

    General and administrative

    9,039       3,370       25,484       16,968  

    Loss on impairment of depreciable real estate assets

    6,467       -       6,467       3,135  

    Depreciation and amortization

    47,887       46,169       143,946       136,752  

Total expense

    270,597       256,835       784,599       764,683  
                                 

    Gain on sale of real estate

    -       -       1,052       -  
                                 

Operating income

    61,125       75,362       193,079       210,617  
                                 

    Interest and other expense, net

    (14,759 )     (13,140 )     (46,110 )     (38,269 )
                                 

Income before income taxes

    46,366       62,222       146,969       172,348  
                                 

    Income tax expense

    (143 )     (100 )     (505 )     (414 )
                                 

Net income

  $ 46,223     $ 62,122     $ 146,464     $ 171,934  
                                 

Other comprehensive income (loss):

                               

    Interest rate derivatives

    (4,193 )     1,657       (20,357 )     9,689  
                                 

Comprehensive income

  $ 42,030     $ 63,779     $ 126,107     $ 181,623  
                                 

Basic and diluted net income per common share

  $ 0.21     $ 0.27     $ 0.65     $ 0.75  
                                 

Weighted average common shares outstanding - basic and diluted

    223,901       230,351       223,911       230,402  

  

Note:  

The Consolidated Statements of Operations and Comprehensive Income and corresponding footnotes can be found in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.

 

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Apple Hospitality REIT, Inc.

Comparable Hotels Operating Metrics and Statistical Data

(Unaudited) 

(in thousands except statistical data)

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

September 30,

 
   

2019

   

2018

   

% Change

   

2019

   

2018

   

% Change

 
                                             

Total revenue

  $ 330,862     $ 325,751     1.6%     $ 968,425     $ 957,880     1.1%  
                                             

Total operating expenses

    206,495       201,719     2.4%       602,323       592,172     1.7%  
                                             

Adjusted Hotel EBITDA

  $ 124,367     $ 124,032     0.3%     $ 366,102     $ 365,708     0.1%  

Adjusted Hotel EBITDA Margin %

    37.6 %     38.1 %  

(50 bps)

      37.8 %     38.2 %  

(40 bps)

 
                                             
                                             

ADR (Comparable Hotels)

  $ 139.32     $ 139.01     0.2%     $ 139.58     $ 138.72     0.6%  

Occupancy (Comparable Hotels)

    79.9 %     79.2 %   0.9%       78.6 %     78.8 %   (0.3%)  

RevPAR (Comparable Hotels)

  $ 111.36     $ 110.12     1.1%     $ 109.64     $ 109.25     0.4%  
                                             

ADR (Actual)

  $ 139.21     $ 137.77     1.0%     $ 139.13     $ 137.32     1.3%  

Occupancy (Actual)

    79.9 %     78.9 %   1.3%       78.4 %     78.4 %   -  

RevPAR (Actual)

  $ 111.17     $ 108.70     2.3%     $ 109.02     $ 107.71     1.2%  
                                             

Reconciliation to Actual Results

                                           
                                             

Total Revenue (Actual)

  $ 331,722     $ 332,197           $ 976,626     $ 975,300        

Revenue from acquisitions prior to ownership

    -       2,757             1,149       12,425        

Revenue from dispositions/assets held for sale

    (794 )     (9,137 )           (9,152 )     (29,647 )      

Lease revenue intangible amortization

    (66 )     (66 )           (198 )     (198 )      

Comparable Hotels Total Revenue

  $ 330,862     $ 325,751           $ 968,425     $ 957,880        
                                             

Adjusted Hotel EBITDA (AHEBITDA) (Actual)

  $ 124,596     $ 125,922           $ 368,159     $ 370,649        

AHEBITDA from acquisitions prior to ownership

    -       814             310       4,342        

AHEBITDA from dispositions/assets held for sale

    (229 )     (2,704 )           (2,367 )     (9,283 )      

Comparable Hotels AHEBITDA

  $ 124,367     $ 124,032           $ 366,102     $ 365,708        

 

Note:

Comparable Hotels is defined as the 233 hotels owned and held for use by the Company as of September 30, 2019. For hotels acquired during the periods noted, the Company has included, as applicable, results of those hotels for periods prior to the Company's ownership, and for dispositions and assets held for sale, results have been excluded for the Company's period of ownership. Results for periods prior to the Company's ownership have not been included in the Company's actual Consolidated Financial Statements and are included only for comparison purposes. Results included for periods prior to the Company's ownership are based on information from the prior owner of each hotel and have not been audited or adjusted.

 

Reconciliation of net income to non-GAAP financial measures and a discussion of the Company’s adoption of Accounting Standards Update No. 2016-02, Leases, on January 1, 2019 are included in the following pages.

 

Page | 8

 

 

Apple Hospitality REIT, Inc.

Comparable Hotels Quarterly Operating Metrics and Statistical Data

(Unaudited) 

(in thousands except statistical data)

 

   

Three Months Ended

 
   

12/31/2017

   

3/31/2018

   

6/30/2018

   

9/30/2018

   

12/31/2018

   

3/31/2019

   

6/30/2019

   

9/30/2019

 
                                                                 

Total revenue

  $ 287,953     $ 294,503     $ 337,626     $ 325,751     $ 289,203     $ 297,320     $ 340,243     $ 330,862  
                                                                 

Total operating expenses

    186,605       188,050       202,403       201,719       188,637       190,283       205,545       206,495  
                                                                 

Adjusted Hotel EBITDA

  $ 101,348     $ 106,453     $ 135,223     $ 124,032     $ 100,566     $ 107,037     $ 134,698     $ 124,367  

Adjusted Hotel EBITDA Margin %

    35.2 %     36.1 %     40.1 %     38.1 %     34.8 %     36.0 %     39.6 %     37.6 %
                                                                 
                                                                 

ADR (Comparable Hotels)

  $ 131.85     $ 135.85     $ 141.01     $ 139.01     $ 133.01     $ 137.53     $ 141.67     $ 139.32  

Occupancy (Comparable Hotels)

    73.9 %     75.0 %     82.0 %     79.2 %     72.7 %     74.1 %     81.5 %     79.9 %

RevPAR (Comparable Hotels)

  $ 97.39     $ 101.92     $ 115.59     $ 110.12     $ 96.75     $ 101.95     $ 115.49     $ 111.36  
                                                                 

ADR (Actual)

  $ 130.30     $ 134.32     $ 139.58     $ 137.77     $ 131.93     $ 136.36     $ 141.60     $ 139.21  

Occupancy (Actual)

    73.5 %     74.6 %     81.7 %     78.9 %     72.5 %     73.9 %     81.4 %     79.9 %

RevPAR (Actual)

  $ 95.76     $ 100.18     $ 114.09     $ 108.70     $ 95.63     $ 100.71     $ 115.30     $ 111.17  
                                                                 

Reconciliation to Actual Results

                                                               
                                                                 

Total Revenue (Actual)

  $ 289,067     $ 298,389     $ 344,714     $ 332,197     $ 295,255     $ 303,787     $ 341,117     $ 331,722  

Revenue from acquisitions prior to ownership

    8,643       5,603       4,065       2,757       2,262       1,149       -       -  

Revenue from dispositions/assets held for sale

    (9,706 )     (9,423 )     (11,087 )     (9,137 )     (8,248 )     (7,550 )     (808 )     (794 )

Lease revenue intangible amortization

    (51 )     (66 )     (66 )     (66 )     (66 )     (66 )     (66 )     (66 )

Comparable Hotels Total Revenue

  $ 287,953     $ 294,503     $ 337,626     $ 325,751     $ 289,203     $ 297,320     $ 340,243     $ 330,862  
                                                                 

Adjusted Hotel EBITDA (AHEBITDA) (Actual)

  $ 101,159     $ 107,091     $ 137,636     $ 125,922     $ 102,157     $ 108,804     $ 134,759     $ 124,596  

AHEBITDA from acquisitions prior to ownership

    3,091       2,149       1,379       814       633       310       -       -  

AHEBITDA from dispositions/assets held for sale

    (2,902 )     (2,787 )     (3,792 )     (2,704 )     (2,224 )     (2,077 )     (61 )     (229 )

Comparable Hotels AHEBITDA

  $ 101,348     $ 106,453     $ 135,223     $ 124,032     $ 100,566     $ 107,037     $ 134,698     $ 124,367  

 

Note:

Comparable Hotels is defined as the 233 hotels owned and held for use by the Company as of September 30, 2019. For hotels acquired during the periods noted, the Company has included, as applicable, results of those hotels for periods prior to the Company's ownership, and for dispositions and assets held for sale, results have been excluded for the Company's period of ownership. Results for periods prior to the Company's ownership have not been included in the Company's actual Consolidated Financial Statements and are included only for comparison purposes. Results included for periods prior to the Company's ownership are based on information from the prior owner of each hotel and have not been audited or adjusted.

 

 

Reconciliation of net income (loss) to non-GAAP financial measures and a discussion of the Company’s adoption of Accounting Standards Update No. 2016-02, Leases, on January 1, 2019 are included in the following pages.

 

Page | 9

 

 

Apple Hospitality REIT, Inc.

Same Store Hotels Operating Metrics and Statistical Data

(Unaudited) 

(in thousands except statistical data)

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

September 30,

 
   

2019

   

2018

   

% Change

   

2019

   

2018

   

% Change

 
                                             

Total revenue

  $ 320,755     $ 316,866     1.2%     $ 937,707     $ 932,231     0.6%  
                                             

Total operating expenses

    199,773       196,064     1.9%       582,797       576,337     1.1%  
                                             

Adjusted Hotel EBITDA

  $ 120,982     $ 120,802     0.1%     $ 354,910     $ 355,894     (0.3%)  

Adjusted Hotel EBITDA Margin %

    37.7 %     38.1 %  

(40 bps)

      37.8 %     38.2 %  

(40 bps)

 
                                             
                                             

ADR (Same Store Hotels)

  $ 139.55     $ 138.97     0.4%     $ 139.32     $ 138.47     0.6%  

Occupancy (Same Store Hotels)

    80.1 %     79.5 %   0.8%       78.8 %     78.9 %   (0.1%)  

RevPAR (Same Store Hotels)

  $ 111.74     $ 110.43     1.2%     $ 109.73     $ 109.24     0.4%  
                                             

ADR (Actual)

  $ 139.21     $ 137.77     1.0%     $ 139.13     $ 137.32     1.3%  

Occupancy (Actual)

    79.9 %     78.9 %   1.3%       78.4 %     78.4 %   -  

RevPAR (Actual)

  $ 111.17     $ 108.70     2.3%     $ 109.02     $ 107.71     1.2%  
                                             

Reconciliation to Actual Results

                                           
                                             

Total Revenue (Actual)

  $ 331,722     $ 332,197           $ 976,626     $ 975,300        

Revenue from acquisitions

    (10,107 )     (6,128 )           (29,569 )     (13,224 )      

Revenue from dispositions/assets held for sale

    (794 )     (9,137 )           (9,152 )     (29,647 )      

Lease revenue intangible amortization

    (66 )     (66 )           (198 )     (198 )      

Same Store Hotels Total Revenue

  $ 320,755     $ 316,866           $ 937,707     $ 932,231        
                                             

Adjusted Hotel EBITDA (AHEBITDA) (Actual)

  $ 124,596     $ 125,922           $ 368,159     $ 370,649        

AHEBITDA from acquisitions

    (3,385 )     (2,416 )           (10,882 )     (5,472 )      

AHEBITDA from dispositions/assets held for sale

    (229 )     (2,704 )           (2,367 )     (9,283 )      

Same Store Hotels AHEBITDA

  $ 120,982     $ 120,802           $ 354,910     $ 355,894        

 

Note:

Same Store Hotels is defined as the 226 hotels owned and held for use by the Company as of January 1, 2018 and during the entirety of the periods being compared. This information has not been audited.

 

Reconciliation of net income to non-GAAP financial measures and a discussion of the Company’s adoption of Accounting Standards Update No. 2016-02, Leases, on January 1, 2019 are included in the following pages.

 

Page | 10

 

 

Apple Hospitality REIT, Inc.

Same Store Hotels Quarterly Operating Metrics and Statistical Data

(Unaudited) 

(in thousands except statistical data)

 

   

Three Months Ended

 
   

3/31/2018

   

6/30/2018

   

9/30/2018

   

12/31/2018

   

3/31/2019

   

6/30/2019

   

9/30/2019

 
                                                         

Total revenue

  $ 286,510     $ 328,855     $ 316,866     $ 280,058     $ 286,943     $ 330,009     $ 320,755  
                                                         

Total operating expenses

    183,299       196,974       196,064       182,976       184,141       198,883       199,773  
                                                         

Adjusted Hotel EBITDA

  $ 103,211     $ 131,881     $ 120,802     $ 97,082     $ 102,802     $ 131,126     $ 120,982  

Adjusted Hotel EBITDA Margin %

    36.0 %     40.1 %     38.1 %     34.7 %     35.8 %     39.7 %     37.7 %
                                                         
                                                         

ADR (Same Store Hotels)

  $ 135.35     $ 140.80     $ 138.97     $ 132.49     $ 136.54     $ 141.59     $ 139.55  

Occupancy (Same Store Hotels)

    75.0 %     82.2 %     79.5 %     72.9 %     74.3 %     81.9 %     80.1 %

RevPAR (Same Store Hotels)

  $ 101.46     $ 115.74     $ 110.43     $ 96.53     $ 101.42     $ 115.93     $ 111.74  
                                                         

ADR (Actual)

  $ 134.32     $ 139.58     $ 137.77     $ 131.93     $ 136.36     $ 141.60     $ 139.21  

Occupancy (Actual)

    74.6 %     81.7 %     78.9 %     72.5 %     73.9 %     81.4 %     79.9 %

RevPAR (Actual)

  $ 100.18     $ 114.09     $ 108.70     $ 95.63     $ 100.71     $ 115.30     $ 111.17  
                                                         

Reconciliation to Actual Results

                                                       
                                                         

Total Revenue (Actual)

  $ 298,389     $ 344,714     $ 332,197     $ 295,255     $ 303,787     $ 341,117     $ 331,722  

Revenue from acquisitions

    (2,390 )     (4,706 )     (6,128 )     (6,883 )     (9,228 )     (10,234 )     (10,107 )

Revenue from dispositions/assets held for sale

    (9,423 )     (11,087 )     (9,137 )     (8,248 )     (7,550 )     (808 )     (794 )

Lease revenue intangible amortization

    (66 )     (66 )     (66 )     (66 )     (66 )     (66 )     (66 )

Same Store Hotels Total Revenue

  $ 286,510     $ 328,855     $ 316,866     $ 280,058     $ 286,943     $ 330,009     $ 320,755  
                                                         

Adjusted Hotel EBITDA (AHEBITDA) (Actual)

  $ 107,091     $ 137,636     $ 125,922     $ 102,157     $ 108,804     $ 134,759     $ 124,596  

AHEBITDA from acquisitions

    (1,093 )     (1,963 )     (2,416 )     (2,851 )     (3,925 )     (3,572 )     (3,385 )

AHEBITDA from dispositions/assets held for sale

    (2,787 )     (3,792 )     (2,704 )     (2,224 )     (2,077 )     (61 )     (229 )

Same Store Hotels AHEBITDA

  $ 103,211     $ 131,881     $ 120,802     $ 97,082     $ 102,802     $ 131,126     $ 120,982  

 

Note:

Same Store Hotels is defined as the 226 hotels owned and held for use by the Company as of January 1, 2018 and during the entirety of the periods being compared. This information has not been audited.

 

Reconciliation of net income to non-GAAP financial measures and a discussion of the Company’s adoption of Accounting Standards Update No. 2016-02, Leases, on January 1, 2019 are included in the following pages.

 

Page | 11

 

 

Apple Hospitality REIT, Inc.

Reconciliation of Net Income (Loss) to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA

(Unaudited)

(in thousands)

 

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

 

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

 

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

 

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

 

The following table reconciles the Company’s GAAP net income (loss) to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA on a quarterly basis from December 31, 2017 through September 30, 2019.

 

   

Three Months Ended

 
   

12/31/2017

   

3/31/2018

   

6/30/2018

   

9/30/2018

   

12/31/2018

   

3/31/2019

   

6/30/2019

   

9/30/2019

 

Net income (loss)

  $ (2,303 )   $ 42,182     $ 67,630     $ 62,122     $ 34,152     $ 38,151     $ 62,090     $ 46,223  

Depreciation and amortization

    44,729       44,840       45,743       46,169       46,730       47,950       48,109       47,887  

Amortization of favorable and unfavorable operating leases, net

    165       206       148       146       147       31       31       31  

Interest and other expense, net

    11,753       11,919       13,210       13,140       12,916       15,494       15,857       14,759  

Income tax expense

    135       163       151       100       173       206       156       143  

EBITDA

    54,479       99,310       126,882       121,677       94,118       101,832       126,243       109,043  

(Gain) loss on sale of real estate

    (312 )     -       -       -       (152 )     (1,213 )     161       -  

Loss on impairment of depreciable real estate assets

    38,000       -       3,135       -       -       -       -       6,467  

EBITDAre

    92,167       99,310       130,017       121,677       93,966       100,619       126,404       115,510  

Non-cash straight-line operating ground lease expense

    906       904       898       875       865       48       47       47  

Adjusted EBITDAre

  $ 93,073     $ 100,214     $ 130,915     $ 122,552     $ 94,831     $ 100,667     $ 126,451     $ 115,557  

General and administrative expense

    8,086       6,877       6,721       3,370       7,326       8,137       8,308       9,039  

Adjusted Hotel EBITDA

  $ 101,159     $ 107,091     $ 137,636     $ 125,922     $ 102,157     $ 108,804     $ 134,759     $ 124,596  
                                                                 

Cash operating ground lease expense for leases classified as financing leases effective January 1, 2019(1)

  $ 1,402     $ 1,405     $ 1,410     $ 1,432     $ 1,443     $ -     $ -     $ -  

 

 

 

 

(1)

Represents cash lease payments recorded to operating ground lease expense related to four of the Company's ground leases that were classified as operating leases during the noted period. Under the new lease accounting standard, effective January 1, 2019, these four ground leases are classified as finance leases, for which the Company recognizes depreciation and amortization expense and interest and other expense, net in the Company's consolidated statements of operations, instead of operating ground lease expense. Depreciation and amortization and interest expense are excluded from EBITDA and operating ground lease expense is included in EBITDA.

 

Page | 12

 

 

Apple Hospitality REIT, Inc.

Reconciliation of Net Income to FFO and MFFO

(Unaudited)

(in thousands)

 

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

 

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

 

The following table reconciles the Company’s GAAP net income to FFO and MFFO for the three and nine months ended September 30, 2019 and 2018.

 

   

Three Months Ended September 30,

   

Nine Months Ended September 30,

 
   

2019

   

2018

   

2019

   

2018

 

Net income

  $ 46,223     $ 62,122     $ 146,464     $ 171,934  

Depreciation of real estate owned

    46,910       45,925       140,288       136,037  

Gain on sale of real estate

    -       -       (1,052 )     -  

Loss on impairment of depreciable real estate assets

    6,467       -       6,467       3,135  

Funds from operations

    99,600       108,047       292,167       311,106  

Amortization of finance ground lease assets

    725       -       2,915       -  

Amortization of favorable and unfavorable operating leases, net

    31       146       93       500  

Non-cash straight-line operating ground lease expense

    47       875       142       2,677  

Modified funds from operations

  $ 100,403     $ 109,068     $ 295,317     $ 314,283  

 

Page | 13

 

 

Apple Hospitality REIT, Inc.

2019 Guidance Reconciliation of Net Income to EBITDA, EBITDAre and Adjusted EBITDAre

(Unaudited)

(in thousands)

 

The guidance of net income, EBITDA, EBITDAre and Adjusted EBITDAre are forward-looking statements and are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause actual results and performance to differ materially from those expressed or implied by these forecasts. Although the Company believes the expectations reflected in the forecasts are based upon reasonable assumptions, there can be no assurance that the expectations will be achieved or that the results will not be materially different. Risks that may affect these assumptions and forecasts include, but are not limited to, the following: changes in political, economic, competitive and specific market conditions; the amount and timing of acquisitions and dispositions of hotel properties; the level of capital expenditures may change significantly, which will directly affect the level of depreciation expense, interest expense and net income; the amount and timing of debt repayments may change significantly based on market conditions, which will directly affect the level of interest expense and net income; the amount and timing of transactions involving the Company's common stock may change based on market conditions; and other risks and uncertainties associated with the Company's business described herein and in filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2018.

 

The following table reconciles the Company’s GAAP net income guidance to EBITDA, EBITDAre and Adjusted EBITDAre guidance for the year ending December 31, 2019.

 

   

Year Ending December 31, 2019

 
   

Low-End

   

High-End

 

Net income(1)

  $ 168,127     $ 181,927  

Depreciation and amortization(1)

    194,000       192,000  

Amortization of favorable and unfavorable leases, net

    125       125  

Interest and other expense, net(1)

    63,000       61,000  

Income tax expense

    600       800  

EBITDA

    425,852       435,852  

Gain on sale of real estate

    (1,052 )     (1,052 )

EBITDAre

    424,800       434,800  

Non-cash straight-line ground lease expense

    200       200  

Adjusted EBITDAre

  $ 425,000     $ 435,000  

  

 

 

 

(1)

As a result of the Company's adoption of Leases Topic 842, the Company has included approximately $4.5 million of amortization related to its four finance ground lease assets and $8.2 million of interest expense associated with the related finance lease liabilities. Under the previous accounting standard, the Company would have included approximately $7.0 million of cash operating ground lease expense related to these four ground leases.     

 

 

Page | 14

 

 

Apple Hospitality REIT, Inc.

Debt Summary

(Unaudited)

($ in thousands)

September 30, 2019

 

   

October 1 -

December 31,

2019

   

2020

   

2021

   

2022

   

2023

   

Thereafter

   

Total

   

Fair Market

Value

 

Total debt:

                                                               

Maturities

  $ 3,337     $ 28,349     $ 47,586     $ 260,752     $ 295,615     $ 709,165     $ 1,344,804     $ 1,353,155  

Average interest rates(1)

    3.6 %     3.6 %     3.6 %     3.5 %     3.5 %     3.5 %                
                                                                 

Variable rate debt:

                                                               

Maturities

  $ -     $ -     $ -     $ 151,500     $ 250,000     $ 485,000     $ 886,500     $ 887,609  

Average interest rates(1)

    3.1 %     3.2 %     3.3 %     3.3 %     3.3 %     3.3 %                
                                                                 

Fixed rate debt:

                                                               

Maturities

  $ 3,337     $ 28,349     $ 47,586     $ 109,252     $ 45,615     $ 224,165     $ 458,304     $ 465,546  

Average interest rates

    4.4 %     4.4 %     4.4 %     4.2 %     4.1 %     4.1 %                

 

(1)

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

 

Note:  

See further information on the Company’s indebtedness in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.

 

Page | 15

 

 

Apple Hospitality REIT, Inc.

Comparable Hotels Operating Metrics Top 20 Markets

Three Months ended September 30

(Unaudited)

 

Top 20 Markets

       

Occupancy

   

ADR

   

RevPAR

   

% of Adjusted Hotel EBITDA

 
 

# of Hotels

   

Q3 2019

   

Q3 2018

   

% Change

   

Q3 2019

   

Q3 2018

   

% Change

   

Q3 2019

   

Q3 2018

   

% Change

   

Q3 2019

 

Top 20 Markets

                                                                                     

Los Angeles/Long Beach, CA

  8       90.8 %     91.2 %     (0.5 %)   $ 182.29     $ 178.05       2.4 %   $ 165.55     $ 162.44       1.9 %     6.5 %

San Diego, CA

  7       84.1 %     84.5 %     (0.5 %)   $ 166.53     $ 166.79       (0.2 %)   $ 140.06     $ 140.95       (0.6 %)     5.9 %

Seattle, WA

  3       91.4 %     89.1 %     2.5 %   $ 226.51     $ 235.80       (3.9 %)   $ 206.95     $ 210.08       (1.5 %)     4.3 %

Anaheim/Santa Ana, CA

  6       85.2 %     85.4 %     (0.2 %)   $ 156.29     $ 155.50       0.5 %   $ 133.12     $ 132.73       0.3 %     4.2 %

Chicago, IL

  8       81.5 %     80.9 %     0.8 %   $ 134.36     $ 136.41       (1.5 %)   $ 109.46     $ 110.30       (0.8 %)     4.1 %

Nashville, TN

  5       85.7 %     84.9 %     0.9 %   $ 162.85     $ 169.66       (4.0 %)   $ 139.53     $ 144.07       (3.2 %)     3.5 %

Norfolk/Virginia Beach, VA

  4       88.4 %     86.2 %     2.6 %   $ 197.27     $ 196.37       0.5 %   $ 174.43     $ 169.20       3.1 %     3.4 %

Alaska

  2       91.4 %     93.6 %     (2.3 %)   $ 247.49     $ 224.90       10.0 %   $ 226.31     $ 210.42       7.5 %     2.6 %

Denver, CO

  3       87.3 %     85.9 %     1.6 %   $ 167.05     $ 164.18       1.7 %   $ 145.84     $ 141.07       3.4 %     2.5 %

North Carolina East

  5       83.4 %     83.1 %     0.4 %   $ 152.26     $ 141.75       7.4 %   $ 127.01     $ 117.82       7.8 %     2.4 %

Richmond/Petersburg, VA

  4       70.6 %     70.6 %     (0.0 %)   $ 148.45     $ 142.32       4.3 %   $ 104.77     $ 100.49       4.3 %     2.3 %

Florida Panhandle

  5       80.0 %     77.7 %     2.9 %   $ 155.94     $ 126.90       22.9 %   $ 124.68     $ 98.62       26.4 %     2.3 %

Portland, ME

  1       93.9 %     91.7 %     2.5 %   $ 256.07     $ 241.63       6.0 %   $ 240.55     $ 221.52       8.6 %     2.2 %

Dallas, TX

  8       73.1 %     69.9 %     4.5 %   $ 117.89     $ 118.34       (0.4 %)   $ 86.14     $ 82.77       4.1 %     2.1 %

Omaha, NE

  4       84.2 %     76.8 %     9.6 %   $ 117.82     $ 120.07       (1.9 %)   $ 99.22     $ 92.24       7.6 %     1.7 %

Idaho

  2       86.0 %     86.2 %     (0.2 %)   $ 134.04     $ 125.92       6.4 %   $ 115.21     $ 108.49       6.2 %     1.7 %

Alabama South

  6       75.7 %     73.8 %     2.5 %   $ 120.19     $ 116.37       3.3 %   $ 90.94     $ 85.93       5.8 %     1.6 %

Washington, DC-MD-VA

  4       83.4 %     81.3 %     2.5 %   $ 126.08     $ 122.17       3.2 %   $ 105.12     $ 99.35       5.8 %     1.6 %

Oklahoma City, OK

  4       75.3 %     75.6 %     (0.5 %)   $ 129.74     $ 131.85       (1.6 %)   $ 97.65     $ 99.71       (2.1 %)     1.6 %

Boston, MA

  4       80.4 %     81.8 %     (1.8 %)   $ 137.67     $ 133.95       2.8 %   $ 110.62     $ 109.60       0.9 %     1.5 %

Top 20 Markets

  93       82.8 %     81.8 %     1.2 %   $ 156.29     $ 153.85       1.6 %   $ 129.36     $ 125.81       2.8 %     58.0 %
                                                                                       

All Other Markets

  140       77.7 %     77.2 %     0.7 %   $ 125.27     $ 126.71       (1.1 %)   $ 97.38     $ 97.84       (0.5 %)     42.0 %
                                                                                       
                                                                                       

Total Portfolio

  233       79.9 %     79.2 %     0.9 %   $ 139.32     $ 139.01       0.2 %   $ 111.36     $ 110.12       1.1 %     100.0 %

 

Note: Market categorization based on STR design