Apple Hospitality REIT, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Apple Hospitality REIT, Inc. has filed its 2023 10-K report detailing its financial performance and operational status.</b>

AI Summary

Apple Hospitality REIT, Inc. (APLE) filed a Annual Report (10-K) with the SEC on February 22, 2024. Apple Hospitality REIT, Inc. filed its annual report for the fiscal year ending December 31, 2023. The filing includes financial data and operational details for the REIT. The company's principal executive offices are located at 814 East Main Street, Richmond, VA 23219. Apple Hospitality REIT, Inc. was formerly known as Apple REIT Nine, Inc., with a name change on November 9, 2007. The filing references various financial instruments and property-specific data, including interest rate swaps and hotel names.

Why It Matters

For investors and stakeholders tracking Apple Hospitality REIT, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Apple Hospitality REIT's financial health, asset portfolio, and strategic initiatives for the past fiscal year, crucial for investors assessing its stability and growth prospects. The detailed disclosures within the report, including specific hotel property information and financial instrument data, allow stakeholders to understand the company's operational performance and risk exposure in the real estate investment trust sector.

Risk Assessment

Risk Level: medium — Apple Hospitality REIT, Inc. shows moderate risk based on this filing. The company's business is heavily reliant on the hospitality industry, which is subject to economic downturns, travel disruptions, and competitive pressures, as indicated by the numerous hotel properties listed and the general nature of REIT operations.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to understand the specific performance of Apple Hospitality REIT's hotel portfolio and its exposure to market fluctuations.

Key Numbers

• 1231 — Fiscal Year End (20231231)
• 2024-02-22 — Filing Date (20240222)
• 001-37389 — SEC File Number (001-37389)
• 261379210 — IRS Number (261379210)
• VA — State of Incorporation (VA)
• November 9, 2007 — Date of Name Change (20071109)

Key Players & Entities

• Apple Hospitality REIT, Inc. (company) — Filer name
• Apple REIT Nine, Inc. (company) — Former company name
• 814 East Main Street, Richmond, VA 23219 (company) — Business address
• 2023-12-31 (date) — Fiscal year end
• 2024-02-22 (date) — Filing date
• VA (location) — State of incorporation
• 001-37389 (regulator) — SEC file number
• 261379210 (regulator) — IRS number

FAQ

Risk Factors

• Risks Related to the Hospitality Industry [high — market]: The company's operations are subject to the cyclical nature of the hospitality industry, including fluctuations in demand, occupancy rates, and average daily rates, which can be impacted by economic conditions and consumer spending.
• Interest Rate Risk [medium — financial]: Changes in interest rates can affect the company's borrowing costs and the fair value of its debt, as well as potentially impact the profitability of its hotel operations.
• Property-Specific Risks [medium — operational]: The performance of individual hotel properties can be affected by local market conditions, competition, management effectiveness, and unforeseen events such as natural disasters or property damage.
• Real Estate Investment Trust (REIT) Regulations [medium — regulatory]: The company must comply with complex tax laws and regulations applicable to REITs to maintain its status and avoid adverse tax consequences.

Key Financial Figures

• $289.8 million — e 5 purchase price of approximately $289.8 million: a 154-room Courtyard in Cleveland, Ohi
• $650 million — defined below) and borrowings under its $650 million revolving credit facility with an initi
• $177.5 million — ombined purchase price of approximately $177.5 million. Both hotels are under development, wit
• $33.5 million — or a gross sales price of approximately $33.5 million in February 2024. The net proceeds from
• $338.7 million — share repurchases up to an aggregate of $338.7 million (the "Share Repurchase Program"). The S
• $14.34 — market purchase price of approximately $14.34 per common share for an aggregate purch
• $6.9 million — including commissions, of approximately $6.9 million. Repurchases under the Share Repurchase
• $335.4 million — As of December 31, 2023, approximately $335.4 million remained available for purchase under t
• $76.8 m — ments for its hotels were approximately $76.8 million, $61.7 million and $25.8 million,
• $61.7 million — otels were approximately $76.8 million, $61.7 million and $25.8 million, respectively. Expend
• $25.8 m — mately $76.8 million, $61.7 million and $25.8 million, respectively. Expenditures for 2

Filing Documents

• aple-20231231.htm (10-K) — 7768KB
• aple-ex4_1.htm (EX-4.1) — 89KB
• aple-ex19.htm (EX-19) — 103KB
• aple-ex21_1.htm (EX-21.1) — 42KB
• aple-ex23_1.htm (EX-23.1) — 4KB
• aple-ex31_1.htm (EX-31.1) — 12KB
• aple-ex31_2.htm (EX-31.2) — 12KB
• aple-ex31_3.htm (EX-31.3) — 12KB
• aple-ex32_1.htm (EX-32.1) — 8KB
• aple-ex97.htm (EX-97) — 35KB
• img205014019_0.jpg (GRAPHIC) — 270KB
• 0000950170-24-018793.txt (&nbsp;) — 29667KB
• aple-20231231.xsd (EX-101.SCH) — 2486KB
• aple-20231231_htm.xml (XML) — 7106KB

Business

Business 4 Item 1A.

Risk Factors

Risk Factors 11 Item 1B. Unresolved Staff Comments 24 Item 1C. Cybersecurity 24 Item 2.

Properties

Properties 26 Item 3.

Legal Proceedings

Legal Proceedings 32 Item 4. Mine Safety Disclosures 32 Part II Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 33 Item 6. Reserved 35 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 36 Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 48 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 49 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 79 Item 9A.

Controls and Procedures

Controls and Procedures 79 Item 9B. Other Information 79 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 79 Part III Item 10. Directors, Executive Officers and Corporate Governance 80 Item 11.

Executive Compensation

Executive Compensation 80 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 80 Item 13. Certain Relationships and Related Transactions, and Director Independence 80 Item 14. Principal Accounting Fees and Services 80 Part IV Item 15. Exhibits, Financial Statement Schedules 81 Item 16. Form 10-K Summary 82

Signatures

Signatures 90 This Form 10-K includes references to certain trademarks or service marks. The AC Hotels by Marriott, Aloft Hotels, Courtyard by Marriott, Fairfield by Marriott, Marriott Hotels, Residence Inn by Marriott, SpringHill Suites by Marriott and TownePlace Suites by Marriott trademarks are the property of Marriott International, Inc. or one of its affiliates. The Embassy Suites by Hilton, Hampton by Hilton, Hilton Garden Inn, Home2 Suites by Hilton, Homewood Suites by Hilton and Motto by Hilton trademarks are the property of Hilton Worldwide Holdings Inc. or one of its affiliates. The Hyatt, Hyatt House and Hyatt Place trademarks are the property of Hyatt Hotels Corporation or one of its affiliates. For convenience, the applicable trademark or service mark symbol has been omitted but will be deemed to be included wherever the above referenced terms are used. 2 PART I

Forward-Looking Statements

Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are typically 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 REIT, Inc. and its wholly-owned subsidiaries (the "Company") 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 the Company to effectively acquire and dispose of properties and redeploy proceeds; the anticipated timing and frequency of shareholder distributions; the ability of the Company to fund capital obligations; the ability of the Company to successfully integrate pending transactions and implement its operating strategy; changes in general political, economic and competitive conditions and specific market conditions (including the potential effects of inflation or a recessionary environment); reduced business and leisure travel due to geopolitical uncertainty, including terrorism and acts of war; travel-related health concerns, including widespread outbreaks of infectious or contagious diseases in the U.S.; inclement weather conditions, including natural disasters such as hurricanes, earthquakes and wildfires; government shutdowns, airline strikes or equipment failures, or other disruptions; adverse changes in the real estate and

Business

Item 1. Business The Company, formed in November 2007 as a Virginia corporation, is a self-advised REIT that invests in income-producing real estate, primarily in the lodging sector, in the U.S. The Company has elected to be treated as a REIT for U.S. federal income tax purposes. As of December 31, 2023, the Company owned 225 hotels with an aggregate of 29,900 rooms located in urban, high-end suburban and developing markets throughout 38 states, including two hotels with a total of 248 rooms classified as held for sale, which were both sold to an unrelated party in February 2024. The Company also owns one property leased to third parties. As of December 31, 2023, substantially all of the Company's hotels operate under Marriott or Hilton brands. The hotels are operated and managed under separate management agreements with 16 hotel management companies, none of which are affiliated with the Company. The Company's common shares are listed on the New York Stock Exchange ("NYSE") under the ticker symbol "APLE." The Company has no foreign operations or assets and its operating structure includes only one reportable segment. Refer to Part II, Item 8, for the Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Annual Report on Form 10-K. Business Objectives The Company is one of the largest hospitality REITs in the U.S., in both the number of hotels and guest rooms, with significant geographic and brand diversity. The Company's primary business objective is to maximize shareholder value by achieving long-term growth in cash available for distributions to its shareholders. The Company has pursued and will continue to pursue this objective through the following investment strategies: pursuing thoughtful capital allocation with selective acquisitions and dispositions of primarily rooms-focused hotels in the upscale sector of the lodging industry; employing broad geographic diversification of its investments; franchising and collaboratin

View Full Filing

View this 10-K filing on SEC EDGAR