Apple Hospitality REIT Q3 2024 10-Q Filing

TL;DR

**APLE Q3 2024 10-Q FILED: Details on hotel portfolio performance and financial health.**

AI Summary

Apple Hospitality REIT, Inc. filed its 10-Q for the period ending September 30, 2024. The filing details financial performance and operational updates for the third quarter. Key financial data and disclosures related to their real estate portfolio, including hotels, are presented.

Why It Matters

This filing provides investors with a detailed look at Apple Hospitality REIT's financial health and strategic direction for the third quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: medium — REITs are sensitive to interest rate changes and economic downturns, which can impact property values and rental income.

Key Numbers

• 2024-09-30 — Reporting Period End Date (Indicates the end of the fiscal quarter for which the report is filed.)
• 2024-01-01 — Quarter Start Date (Marks the beginning of the reporting period for Q3 2024.)
• 2023-12-31 — Previous Year End Date (Provides a comparative point to the end of the prior fiscal year.)

Key Players & Entities

• Apple Hospitality REIT, Inc. (company) — Filer
• 2024-09-30 (date) — Reporting Period End Date
• 804.344.8121 (dollar_amount) — Business Phone Number
• Apple REIT Nine, Inc. (company) — Former Company Name
• 2007-11-09 (date) — Date of Name Change

FAQ

Filing Documents

• aple-20240930.htm (10-Q) — 3328KB
• aple-ex10_3.htm (EX-10.3) — 98KB
• aple-ex31_1.htm (EX-31.1) — 12KB
• aple-ex31_2.htm (EX-31.2) — 11KB
• aple-ex31_3.htm (EX-31.3) — 11KB
• aple-ex32_1.htm (EX-32.1) — 9KB
• 0000950170-24-120709.txt ( ) — 11368KB
• aple-20240930.xsd (EX-101.SCH) — 1545KB
• aple-20240930_htm.xml (XML) — 1930KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 3 Consolidated Balance Sheets – September 30, 2024 and December 31, 2023 3 Consolidated Statements of Operations and Comprehensive Income – three and nine months ended September 30, 2024 and 2023 4 Consolidated Statements of Shareholders' Equity – three and nine months ended September 30, 2024 and 2023 5 Consolidated Statements of Cash Flows – nine months ended September 30, 2024 and 2023 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7 Item 2.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 20 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 38 Item 4.

Controls and Procedures

Controls and Procedures 38

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 39 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39 Item 5. Other Information 39 Item 6. Exhibits 40

Signatures

Signatures 41 This Form 10-Q 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.

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financi al Statements

Item 1. Financi al Statements Apple Hospitality REIT, Inc. Consolidated B alance Sheets (in thousands, except share data) September 30, December 31, 2024 2023 (unaudited) Assets Investment in real estate, net of accumulated depreciation and amortization of $ 1,797,006 and $ 1,662,942 , respectively $ 4,873,083 $ 4,777,374 Assets held for sale 2,950 15,283 Cash and cash equivalents 6,147 10,287 Restricted cash-furniture, fixtures and other escrows 32,570 33,331 Due from third-party managers, net 57,394 36,437 Other assets, net 49,659 64,586 Total Assets $ 5,021,803 $ 4,937,298 Liabilities Debt, net $ 1,501,189 $ 1,371,494 Finance lease liabilities 111,687 111,892 Accounts payable and other liabilities 112,058 129,931 Total Liabilities 1,724,934 1,613,317 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 239,925,065 and 241,515,532 shares, respectively 4,772,759 4,794,804 Accumulated other comprehensive income 4,792 20,404 Distributions greater than net income ( 1,480,682 ) ( 1,491,227 ) Total Shareholders' Equity 3,296,869 3,323,981 Total Liabilities and Shareholders' Equity $ 5,021,803 $ 4,937,298 See notes to consolidated financial statements. 3 Apple Hospitality REIT, Inc. Consolidated Statements of Operatio ns and Comprehensive Income (Unaudited) (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Revenues: Room $ 346,058 $ 327,121 $ 998,493 $ 943,684 Food and beverage 15,841 13,576 48,760 42,032 Other 16,944 17,563 51,179 45,628 Total revenue 378,843 358,260 1,098,432 1,031,344 Expenses: Hotel operating expense: Operating 93,350 85,829

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 1. Organization and Summary of Significant Accounting Policies Organization Apple Hospitality REIT, Inc., formed in November 2007 as a Virginia corporation, together with its wholly-owned subsidiaries (the "Company"), is a self-advised real estate investment trust ("REIT") that invests in income-producing real estate, primarily in the lodging sector, in the United States ("U.S."). The Company's fiscal year end is December 31. The Company has no foreign operations or assets, and its operating structure includes only one reportable segment. The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. Although the Company has interests in potential variable interest entities through its purchase commitments, it is not the primary beneficiary as the Company does not have any elements of power in the decision-making process of these entities; therefore, the Company does not consolidate the entities. As of September 30, 2024, the Company owned 224 hotels with an aggregate of 30,068 guest rooms located in 37 states and the District of Columbi a ("D.C."), including one hotel with 90 guest rooms classified as held for sale, which is expected to be sold to an unrelated party in November 2024. The Company's common shares are listed on the New York Stock Exchange ("NYSE") under the ticker symbol "APLE." Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include all of the information required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited financial statemen

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