Press Release

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Homewood Suites, Cape Canaveral, Florida

Apple Hospitality REIT Reports Results of Operations for Second Quarter 2018

Company Release - 8/6/2018 4:15 PM ET

RICHMOND, Va.--(BUSINESS WIRE)-- Apple Hospitality REIT, Inc. (NYSE: APLE) (the “Company” or “Apple Hospitality”) today announced results of operations for the second quarter of 2018.

       
Selected Statistical and Financial Data
As of and For the Three and Six Months Ended June 30

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

 
Three Months Ended
June 30,
Six Months Ended
June 30,
2018     2017     % Change 2018     2017     % Change
 
Net income $ 67,630 $ 87,606 (22.8 %) $ 109,812 $ 121,971 (10.0 %)
Net income per share $ 0.29 $ 0.39 (25.6 %) $ 0.48 $ 0.55 (12.7 %)
 
Adjusted EBITDA $ 130,915 $ 125,987 3.9 % $ 231,129 $ 225,065 2.7 %
Comparable Hotels Adjusted Hotel EBITDA $ 137,845 $ 135,239 1.9 % $ 245,678 $ 242,227 1.4 %
Comparable Hotels Adjusted Hotel EBITDA Margin 40.0 % 40.2 % (20 bps) 38.1 % 38.4 % (30 bps)
Modified funds from operations (MFFO) $ 117,313 $ 113,650 3.2 % $ 205,215 $ 200,531 2.3 %
MFFO per share $ 0.51 $ 0.51 - $ 0.89 $ 0.90 (1.1 %)
 
Average Daily Rate (ADR) (Actual) $ 139.58 $ 137.56 1.5 % $ 137.09 $ 135.58 1.1 %
Occupancy (Actual) 81.7 % 81.5 % 0.2 % 78.2 % 78.0 % 0.3 %
Revenue Per Available Room (RevPAR) (Actual) $ 114.09 $ 112.10 1.8 % $ 107.20 $ 105.70 1.4 %
 
Comparable Hotels ADR $ 139.83 $ 138.22 1.2 % $ 137.39 $ 135.95 1.1 %
Comparable Hotels Occupancy 81.8 % 81.7 % 0.1 % 78.3 % 78.2 % 0.1 %
Comparable Hotels RevPAR $ 114.38 $ 112.88 1.3 % $ 107.52 $ 106.31 1.1 %
 
Distributions paid $ 69,060 $ 66,903 3.2 % $ 138,204 $ 133,811 3.3 %
Distributions paid per share $ 0.30 $ 0.30 - $ 0.60 $ 0.60 -
 
Total debt outstanding $ 1,373,767
Total debt to total capitalization (2) 25.0 %
 
(1) Explanations of and reconciliations to net income determined in accordance with generally accepted accounting principles ("GAAP") of non-GAAP financial measures, Adjusted EBITDA, Comparable Hotels Adjusted Hotel EBITDA and MFFO, are included below.
(2) Total debt outstanding divided by total debt outstanding plus equity market capitalization based on the Company’s closing share price of $17.88 on June 30, 2018.
 

Comparable Hotels is defined as the 241 hotels owned and held for use by the Company as of June 30, 2018. 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 REIT, commented, “Hotel operations for our portfolio during the second quarter and first half of 2018 were generally in line with our expectations. Despite continued inflationary and wage pressures and moderate rate growth, we produced industry-leading margins of 40 percent for the quarter. Subsequent to the quarter, we successfully refinanced over $1 billion of our credit facilities, extending their maturities and reducing their applicable spreads. We appreciate the support of our lenders and their recognition of the relative performance and stability of our Company, another example of the benefits of our operating philosophy. As we enter the second half of the year, we are confident in our ability to effectively manage our business and to maximize the value of opportunities as they arise.”

Portfolio Activity

Acquisitions

During the first six months of 2018, Apple Hospitality acquired four hotels for a combined total purchase price of approximately $137 million. The following acquisitions were completed during the second quarter of 2018:

  • On May 2, 2018, the Company acquired a newly built 210-room Hampton Inn & Suites by Hilton in Phoenix, Arizona, for a total purchase price of approximately $44 million.
  • On June 28, 2018, the Company acquired an existing 132-room Hampton Inn & Suites by Hilton in Atlanta, Georgia, for a total purchase price of approximately $30 million.

Contracts for Potential Acquisitions

During the second quarter of 2018, the Company entered into contracts for the potential purchase of four hotels. Each of the hotels has a current planned opening in 2020, at which time closings on these hotels are expected to occur. There are many conditions to closing under each of the contracts, including completion of construction, and there can be no assurance the hotels will be acquired. The contracts are for:

  • A planned dual-branded Hampton Inn & Suites by Hilton and Home2 Suites by Hilton property in Cape Canaveral, Florida, with a combined total of 224 guest rooms and a purchase price of approximately $47 million.
  • A planned dual-branded Hyatt House and Hyatt Place property in Tempe, Arizona, with a combined total of 254 guest rooms and a purchase price of approximately $63 million.

Dispositions and Potential Disposition

On July 13, 2018, the Company sold the 86-room TownePlace Suites by Marriott and the 89-room SpringHill Suites by Marriott hotels in Columbus, Georgia, for a total combined gross sales price of $10 million. The Company used the net proceeds from the sales to pay down borrowings on its revolving credit facility. The hotels were classified as assets held for sale at June 30, 2018, and a total impairment loss of approximately $0.5 million was recognized in the second quarter of 2018 on the two hotels.

Also during the quarter, the Company committed to sell its 72-room Residence Inn by Marriott in Springdale, Arkansas. As a result, the Company recognized an impairment loss of approximately $2.6 million in the second quarter of 2018 on this hotel due to the change in its anticipated hold period.

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 six months ended June 30, 2018, the Company invested approximately $31 million in capital expenditures. The Company anticipates investing an additional $35 million to $45 million in capital improvements during the remainder of 2018, which includes various scheduled renovation projects for approximately 20 to 25 properties.

Balance Sheet and Capital Markets

As of June 30, 2018, Apple Hospitality had approximately $1.4 billion of total outstanding indebtedness with a current combined weighted-average interest rate of approximately 3.7 percent for the remainder of 2018. Excluding unamortized debt issuance costs and fair value adjustments, the Company’s total outstanding indebtedness is comprised of approximately $495 million in property-level debt secured by 31 hotels and $878 million outstanding on its unsecured credit facilities. Apple Hospitality’s undrawn capacity on its unsecured credit facilities at June 30, 2018, was approximately $322 million. The Company’s total debt to total capitalization at June 30, 2018, was approximately 25 percent, which provides Apple Hospitality with financial flexibility to fund capital requirements and pursue opportunities in the marketplace.

In July and August 2018, the Company entered into an amendment and restatement of its $965 million credit facility and its $150 million term loan facility, each of which were repaid and extinguished at closing. The amendments and restatements effectively extended the maturities of the existing facilities, improved the pricing grids which reduced the applicable spreads by an average of 15 basis points, and improved certain covenants under the prior agreements for the Company. The $965 million credit facility was reduced to $850 million, and the $150 million term loan facility was increased to $225 million. The new $850 million credit facility is comprised of (i) a $425 million revolving credit facility with an initial maturity date of July 27, 2022 (at closing the Company borrowed approximately $196 million under the revolving credit facility) and (ii) a $200 million term loan with a maturity date of July 27, 2023, and a $225 million term loan with a maturity date of January 31, 2024, both funded at closing. The $225 million term loan facility is comprised of a $50 million term loan with a maturity date of August 2, 2023, and a $175 million term loan with a maturity date of August 2, 2025. The interest rates under the facilities, subject to certain exceptions, are equal to an annual rate of the one-month LIBOR plus a margin ranging from 1.35 to 2.50 percent, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreements. After the completion of these recasts, the Company’s weighted-average debt maturities are six years, and the weighted-average maturity of its effectively fixed rate debt is five years at a weighted-average interest rate of 3.9 percent.

Shareholder Distributions

Apple Hospitality paid distributions of $0.30 per common share during the three-month period ended June 30, 2018. Based on the Company’s common share closing price of $18.02 on August 2, 2018, the annualized distribution rate of $1.20 per common share represents an annual yield of approximately 6.7 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.

2018 Outlook

Apple Hospitality is providing its operational and financial outlook for 2018. 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. Comparable Hotels RevPAR Growth and Comparable Hotels Adjusted Hotel EBITDA Margin % guidance include properties acquired, as if the hotels were owned as of January 1, 2017, and exclude completed dispositions since January 1, 2017. For the full year 2018, the Company anticipates:

       
2018 Guidance(1)
Low-End High-End
 
Net income $193 Million $217 Million
 
Comparable Hotels RevPAR Growth 0.0% 2.0%
 
Comparable Hotels Adjusted Hotel EBITDA Margin % 36.8% 37.8%
 
Adjusted EBITDA $437 Million $457 Million
 
(1)   Explanations of and reconciliations to net income guidance of Adjusted EBITDA guidance are included below.
 

Earnings Call

The Company will host a quarterly conference call for investors and interested parties on Tuesday, August 7, 2018, 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 August 7, 2018, through 11:59 p.m. Eastern Time on August 21, 2018. 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 13680967. 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, select-service hotels in the United States. Apple Hospitality’s portfolio consists of 241 hotels with more than 30,700 guest rooms located in 88 markets throughout 34 states. Franchised with industry-leading brands, the Company’s portfolio comprises 115 Marriott-branded hotels and 126 Hilton-branded hotels. For more information, please visit www.applehospitalityreit.com.

Apple Hospitality REIT Non-GAAP Financial Measures

The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its operating performance: Funds from Operations (“FFO”); Modified FFO (“MFFO”); Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”); Adjusted EBITDA (“Adjusted EBITDA”); and Adjusted Hotel EBITDA (“Adjusted Hotel EBITDA”). These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss), cash flow from operations, or any other operating GAAP measure. FFO, MFFO, EBITDA, Adjusted EBITDA and Adjusted Hotel EBITDA are not necessarily indicative of funds available to fund the Company’s cash needs, including its ability to make cash distributions. Although FFO, MFFO, EBITDA, Adjusted EBITDA and Adjusted Hotel EBITDA, as calculated by the Company, may not be comparable to FFO, MFFO, EBITDA, Adjusted EBITDA and Adjusted Hotel EBITDA, as reported by other companies that do not define such terms exactly as the Company defines such terms, the Company believes these supplemental measures are useful to investors when comparing the Company’s results between periods and with other REITs. 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, 2017. 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.

For additional information or to receive press releases by email, visit www.applehospitalityreit.com.

 
Apple Hospitality REIT, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
 
    June 30,
2018
    December 31,
2017
(unaudited)
Assets

Investment in real estate, net of accumulated depreciation of $818,794 and $731,284, respectively

$ 4,858,216 $ 4,793,159
Assets held for sale 9,800 -
Restricted cash-furniture, fixtures and other escrows 32,279 29,791
Due from third party managers, net 61,660 31,457
Other assets, net   56,929     47,931  
Total Assets $ 5,018,884   $ 4,902,338  
 
Liabilities
Revolving credit facility $ 218,400 $ 106,900
Term loans 656,860 656,279
Mortgage debt 496,916 459,017
Accounts payable and other liabilities   89,471     109,057  
Total Liabilities 1,461,647 1,331,253
 
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 230,347,462 and 229,961,548 shares, respectively

4,594,700 4,588,188
Accumulated other comprehensive income 17,810 9,778
Distributions greater than net income   (1,055,273 )   (1,026,881 )
Total Shareholders' Equity   3,557,237     3,571,085  
 
Total Liabilities and Shareholders' Equity $ 5,018,884   $ 4,902,338  
 

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 June 30, 2018.

 
 
Apple Hospitality REIT, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited) (in thousands, except per share data)
 
    Three Months Ended
June 30,
    Six Months Ended
June 30,
2018     2017 2018     2017
Revenues:
Room $ 319,022 $ 306,283 $ 593,858 $ 575,676
Food and beverage 16,518 17,932 32,228 34,665
Other   9,174     7,489     17,017     14,288  
Total revenue 344,714 331,704 643,103 624,629
 
Expenses:
Operating 81,242 80,345 157,196 155,499
Hotel administrative 26,558 25,217 51,660 50,053
Sales and marketing 28,168 26,270 53,500 50,379
Utilities 10,247 10,193 20,530 19,946
Repair and maintenance 13,476 12,279 25,929 24,195
Franchise fees 14,781 14,163 27,514 26,637
Management fees 12,059 11,545 22,531 21,757
Property taxes, insurance and other 18,681 17,821 35,910 34,748
Ground lease 2,912 2,839 5,762 5,655
General and administrative 6,721 6,151 13,598 12,905
Transaction and litigation costs (reimbursements) - (2,586 ) - (2,586 )
Loss on impairment of depreciable real estate assets 3,135 - 3,135 7,875
Depreciation   45,743     43,893     90,583     87,660  
Total expenses   263,723     248,130     507,848     494,723  
 
Operating income 80,991 83,574 135,255 129,906
 
Interest and other expense, net (13,210 ) (11,849 ) (25,129 ) (23,566 )
Gain on sale of real estate   -     16,140     -     16,140  
 
Income before income taxes 67,781 87,865 110,126 122,480
 
Income tax expense   (151 )   (259 )   (314 )   (509 )
 
Net income $ 67,630   $ 87,606   $ 109,812   $ 121,971  
 
Other comprehensive income (loss):
Interest rate derivatives   1,740     (1,175 )   8,032     370  
 
Comprehensive income $ 69,370   $ 86,431   $ 117,844   $ 122,341  
 
Basic and diluted net income per common share $ 0.29   $ 0.39   $ 0.48   $ 0.55  
 
Weighted average common shares outstanding - basic and diluted 230,342 223,052 230,428 223,049
 

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 June 30, 2018.

 
 
Apple Hospitality REIT, Inc.
Comparable Hotels Operating Metrics and Statistical Data
(Unaudited)
(in thousands except statistical data)
 
    Three Months Ended
June 30,
    Six Months Ended
June 30,
2018     2017     % Change 2018     2017     % Change
 
Total revenue $ 344,985 $ 336,573 2.5 % $ 644,973 $ 630,428 2.3 %
 
Total operating expenses   207,140     201,334   2.9 %   399,295     388,201   2.9 %
 
Adjusted Hotel EBITDA $ 137,845   $ 135,239   1.9 % $ 245,678   $ 242,227   1.4 %
Adjusted Hotel EBITDA Margin % 40.0 % 40.2 % (20 bps) 38.1 % 38.4 % (30 bps)
 
 
ADR (Comparable Hotels) $ 139.83 $ 138.22 1.2 % $ 137.39 $ 135.95 1.1 %
Occupancy (Comparable Hotels) 81.8 % 81.7 % 0.1 % 78.3 % 78.2 % 0.1 %
RevPAR (Comparable Hotels) $ 114.38 $ 112.88 1.3 % $ 107.52 $ 106.31 1.1 %
 
ADR (Actual) $ 139.58 $ 137.56 1.5 % $ 137.09 $ 135.58 1.1 %
Occupancy (Actual) 81.7 % 81.5 % 0.2 % 78.2 % 78.0 % 0.3 %
RevPAR (Actual) $ 114.09 $ 112.10 1.8 % $ 107.20 $ 105.70 1.4 %
 

Reconciliation to Actual Results

 
Total Revenue (Actual) $ 344,714 $ 331,704 $ 643,103 $ 624,629
Revenue from acquisitions prior to ownership 1,315 10,449 3,829 18,911
Revenue from dispositions/assets held for sale (978 ) (5,533 ) (1,827 ) (13,018 )
Lease revenue intangible amortization   (66 )   (47 )   (132 )   (94 )
Comparable Hotels Total Revenue $ 344,985   $ 336,573   $ 644,973   $ 630,428  
 
Adjusted Hotel EBITDA (AHEBITDA) (Actual) $ 137,636 $ 132,138 $ 244,727 $ 237,970
AHEBITDA from acquisitions prior to ownership 494 4,687 1,457 7,716
AHEBITDA from dispositions/assets held for sale   (285 )   (1,586 )   (506 )   (3,459 )
Comparable Hotels AHEBITDA $ 137,845   $ 135,239   $ 245,678   $ 242,227  
 

Note:

Comparable Hotels is defined as the 241 hotels owned and held for use by the Company as of June 30, 2018. 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 is included in the following pages.

 
 
Apple Hospitality REIT, Inc.
Comparable Hotels Quarterly Operating Metrics and Statistical Data
(Unaudited)
(in thousands except statistical data)
 
    Three Months Ended
9/30/2016     12/31/2016     3/31/2017     6/30/2017     9/30/2017     12/31/2017     3/31/2018     6/30/2018
 
Total revenue $ 327,598 $ 281,856 $ 293,855 $ 336,573 $ 333,241 $ 294,197 $ 299,988 $ 344,985
 
Total operating expenses   198,662     181,617     186,867     201,334     202,332     191,021     192,155     207,140  
 
Adjusted Hotel EBITDA $ 128,936   $ 100,239   $ 106,988   $ 135,239   $ 130,909   $ 103,176   $ 107,833   $ 137,845  
Adjusted Hotel EBITDA Margin % 39.4 % 35.6 % 36.4 % 40.2 % 39.3 % 35.1 % 35.9 % 40.0 %
 
 
ADR (Comparable Hotels) $ 136.22 $ 128.38 $ 133.44 $ 138.22 $ 138.27 $ 130.87 $ 134.69 $ 139.83
Occupancy (Comparable Hotels) 80.4 % 72.5 % 74.7 % 81.7 % 80.4 % 73.7 % 74.6 % 81.8 %
RevPAR (Comparable Hotels) $ 109.55 $ 93.13 $ 99.65 $ 112.88 $ 111.20 $ 96.39 $ 100.54 $ 114.38
 
ADR (Actual) $ 136.04 $ 127.81 $ 133.39 $ 137.56 $ 136.73 $ 130.30 $ 134.32 $ 139.58
Occupancy (Actual) 80.2 % 72.4 % 74.4 % 81.5 % 80.0 % 73.5 % 74.6 % 81.7 %
RevPAR (Actual) $ 109.07 $ 92.52 $ 99.27 $ 112.10 $ 109.45 $ 95.76 $ 100.18 $ 114.09
 

Reconciliation to Actual Results

 
Total Revenue (Actual) $ 276,471 $ 282,431 $ 292,925 $ 331,704 $ 324,926 $ 289,067 $ 298,389 $ 344,714
Revenue from acquisitions prior to ownership 60,962 8,497 8,462 10,449 12,346 6,066 2,514 1,315
Revenue from dispositions/assets held for sale (9,788 ) (9,025 ) (7,485 ) (5,533 ) (3,980 ) (885 ) (849 ) (978 )
Lease revenue intangible amortization   (47 )   (47 )   (47 )   (47 )   (51 )   (51 )   (66 )   (66 )
Comparable Hotels Total Revenue $ 327,598   $ 281,856   $ 293,855   $ 336,573   $ 333,241   $ 294,197   $ 299,988   $ 344,985  
 
Adjusted Hotel EBITDA (AHEBITDA) (Actual) $ 106,707 $ 99,291 $ 105,832 $ 132,138 $ 125,750 $ 101,159 $ 107,091 $ 137,636
AHEBITDA from acquisitions prior to ownership 24,749 3,286 3,029 4,687 6,112 2,178 963 494
AHEBITDA from dispositions/assets held for sale   (2,520 )   (2,338 )   (1,873 )   (1,586 )   (953 )   (161 )   (221 )   (285 )
Comparable Hotels AHEBITDA $ 128,936   $ 100,239   $ 106,988   $ 135,239   $ 130,909   $ 103,176   $ 107,833   $ 137,845  
 

Note:

Comparable Hotels is defined as the 241 hotels owned and held for use by the Company as of June 30, 2018. 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 is included in the following pages.

 
 
Apple Hospitality REIT, Inc.
Same Store Hotels Operating Metrics and Statistical Data
(Unaudited)
(in thousands except statistical data)
 
    Three Months Ended
June 30,
    Six Months Ended
June 30,
2018     2017     % Change 2018     2017     % Change
 
Total revenue $ 329,804 $ 324,882 1.5 % $ 618,330 $ 609,608 1.4 %
 
Total operating expenses   198,587     194,817   1.9 %   383,522     375,733   2.1 %
 
Adjusted Hotel EBITDA $ 131,217   $ 130,065   0.9 % $ 234,808   $ 233,875   0.4 %
Adjusted Hotel EBITDA Margin % 39.8 % 40.0 % (20 bps) 38.0 % 38.4 % (40 bps)
 
 
ADR (Same Store Hotels) $ 139.28 $ 137.60 1.2 % $ 137.01 $ 135.50 1.1 %
Occupancy (Same Store Hotels) 82.1 % 81.8 % 0.4 % 78.5 % 78.3 % 0.3 %
RevPAR (Same Store Hotels) $ 114.29 $ 112.53 1.6 % $ 107.51 $ 106.10 1.3 %
 
ADR (Actual) $ 139.58 $ 137.56 1.5 % $ 137.09 $ 135.58 1.1 %
Occupancy (Actual) 81.7 % 81.5 % 0.2 % 78.2 % 78.0 % 0.3 %
RevPAR (Actual) $ 114.09 $ 112.10 1.8 % $ 107.20 $ 105.70 1.4 %
 

Reconciliation to Actual Results

 
Total Revenue (Actual) $ 344,714 $ 331,704 $ 643,103 $ 624,629
Revenue from acquisitions (13,866 ) (1,242 ) (22,814 ) (1,909 )
Revenue from dispositions/assets held for sale (978 ) (5,533 ) (1,827 ) (13,018 )
Lease revenue intangible amortization   (66 )   (47 )   (132 )   (94 )
Same Store Hotels Total Revenue $ 329,804   $ 324,882   $ 618,330   $ 609,608  
 
Adjusted Hotel EBITDA (AHEBITDA) (Actual) $ 137,636 $ 132,138 $ 244,727 $ 237,970
AHEBITDA from acquisitions (6,134 ) (487 ) (9,413 ) (636 )
AHEBITDA from dispositions/assets held for sale   (285 )   (1,586 )   (506 )   (3,459 )
Same Store Hotels AHEBITDA $ 131,217   $ 130,065   $ 234,808   $ 233,875  
 

Note:

Same Store Hotels is defined as the 231 hotels owned and held for use by the Company as of January 1, 2017 and during the entirety of the periods being compared. This information has not been audited.

 

Reconciliation of net income to non-GAAP financial measures is included in the following pages.

 
 
Apple Hospitality REIT, Inc.
Same Store Hotels Quarterly Operating Metrics and Statistical Data
(Unaudited)
(in thousands except statistical data)
 
    Three Months Ended
3/31/2017     6/30/2017     9/30/2017     12/31/2017     3/31/2018     6/30/2018
 
Total revenue $ 284,726 $ 324,882 $ 319,552 $ 282,490 $ 288,526 $ 329,804
 
Total operating expenses   180,916     194,817     195,179     183,492     184,935     198,587  
 
Adjusted Hotel EBITDA $ 103,810   $ 130,065   $ 124,373   $ 98,998   $ 103,591   $ 131,217  
Adjusted Hotel EBITDA Margin % 36.5 % 40.0 % 38.9 % 35.0 % 35.9 % 39.8 %
 
 
ADR (Same Store Hotels) $ 133.19 $ 137.60 $ 137.07 $ 130.38 $ 134.50 $ 139.28
Occupancy (Same Store Hotels) 74.8 % 81.8 % 80.5 % 73.9 % 74.8 % 82.1 %
RevPAR (Same Store Hotels) $ 99.60 $ 112.53 $ 110.28 $ 96.31 $ 100.65 $ 114.29