Apple Hospitality REIT, Inc.

Previous wording

The Company is a Virginia corporation that has elected to be treated as a REIT for U.S. federal income tax purposes. The Company is self-advised and invests in income-producing real estate, primarily in the lodging sector, in the U.S. As of June 30, 2025, the Company owned 221 hotels with an aggregate of 29,893 guest rooms located in urban, high-end suburban and developing markets throughout 37 states and the District of Columbia, including one hotel with 206 guest rooms classified as held for sale, which is expected to be sold to an unrelated party in the third quarter of 2025. 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 NYSE under the ticker symbol “APLE.”

Current wording

The Company is a Virginia corporation that has elected to be treated as a REIT for U.S. federal income tax purposes. The Company is self-advised and invests in income-producing real estate, primarily in the lodging sector, in the U.S. As of September 30, 2025, the Company owned 220 hotels with an aggregate of 29,687 guest rooms located in urban, high-end suburban and developing markets throughout 37 states and the District of Columbia, including four hotels with 367 guest rooms classified as held for sale which are expected to be sold in the fourth quarter of 2025. 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 NYSE under the ticker symbol “APLE.”

Previous wording

The Company continually monitors market conditions and attempts to maximize shareholder value by investing in properties that it believes provide superior value over the long term. Consistent with this strategy and the Company’s focus on investing in rooms-focused hotels, during the six months ended June 30, 2025, the Company acquired one hotel, an existing 126-guest-room Homewood Suites in Tampa, Florida, for a gross purchase price of approximately $18.8 million. As of June 30, 2025, the Company had one outstanding contract, which was entered into during May 2023, for the potential purchase of a hotel in Nashville, Tennessee for an expected purchase price of approximately $98.2 million. The hotel is under development and is currently planned to be completed and opened for business in late 2025, as a 260-guest-room Motto. As of June 30, 2025, a $1.1 million contract deposit (refundable if the seller does not meet its obligations under the contract) had been paid. If the closing occurs, the Company plans to utilize its available cash or borrowings, including borrowings under its unsecured credit facilities available at closing, to purchase the hotel under contract. Although the Company is working towards acquiring this hotel, there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closing on this hotel will occur under the outstanding purchase contract. If the seller meets all of the conditions to closing, the Company is obligated to specifically perform under the purchase contract and acquire this hotel. As this hotel is under development, at this time, the seller has not met all of the conditions to closing.

Current wording

The Company continually monitors market conditions and attempts to maximize shareholder value by investing in properties that it believes provide superior value over the long term. Consistent with this strategy and the Company’s focus on investing in rooms-focused hotels, during the nine months ended September 30, 2025, the Company acquired one hotel, an existing 126-guest-room Homewood Suites in Tampa, Florida, for a gross purchase price of approximately $18.8 million. As of September 30, 2025, the Company had outstanding contracts with unrelated parties for the potential purchase of two hotels, consisting of one hotel under development in Nashville, Tennessee (the “Nashville Motto”) and one hotel under development in Anchorage, Alaska (the “Anchorage AC Hotel”), for a total combined purchase price of approximately $163.7 million. The Nashville Motto is currently planned to be completed and opened for business in December 2025, at which time the Company expects to complete the purchase of this hotel. The Anchorage AC Hotel is currently planned to be completed and opened for business in the fourth quarter of 2027, at which time the Company expects to complete the purchase of this hotel. Although the Company is working towards acquiring these hotels, there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closings on these hotels will occur under their respective outstanding purchase contracts.

Previous wording

For its existing portfolio, the Company monitors each property’s profitability, market conditions and capital requirements and attempts to maximize shareholder value by disposing of properties when it believes that superior value can be provided from the sale of the property. As a result, during the six months ended June 30, 2025, the Company sold two hotels to two unrelated parties for a combined gross sales price of approximately $21.0 million, resulting in a combined gain on the sales of approximately $3.6 million, net of transaction costs. The Company used a portion of the net proceeds from the sale of one of the hotels to complete a 1031 Exchange for the acquisition of the Homewood Suites in Tampa, Florida, which was completed in June 2025.

Current wording

For its existing portfolio, the Company monitors each property’s profitability, market conditions and capital requirements and attempts to maximize shareholder value by disposing of properties when it believes that superior value can be provided from the sale of the property. As a result, during the nine months ended September 30, 2025, the Company sold three hotels to three unrelated parties for a combined gross sales price of approximately $37.0 million, resulting in a combined gain on the sales of approximately $7.9 million, net of transaction costs. The Company used a portion of the net proceeds from the sale of one of the hotels to complete a 1031 Exchange for the acquisition of the Homewood Suites in Tampa, Florida, which was completed in June 2025.

Previous wording

See Note 2 titled “Investment in Real Estate,” Note 3 titled “Assets Held for Sale and Dispositions” and Note 10 titled “Commitments and Contingencies” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning these transactions.

Current wording

See Note 2 titled “Investment in Real Estate,” Note 3 titled “Assets Held for Sale and Dispositions” and Note 10 titled “Contract Commitments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning these transactions.

Previous wording

As of June 30, 2025, the Company owned 221 hotels, including one hotel classified as held for sale, with a total of 29,893 guest rooms as compared to 224 hotels with a total of 30,068 guest rooms as of June 30, 2024. Results of operations are included only for the period of ownership for hotels acquired or disposed of during the current reporting period and prior year. During the six months ended June 30, 2025, the Company acquired one existing hotel on June 10, 2025 and sold two properties, including one property sold on February 12, 2025 and one sold on March 19, 2025. On April 4, 2025, the Company recovered possession from a third-party hotel operator and reinstated operations of its 209-guest-room New York Property through a third-party manager engaged by the Company. During the six months ended June 30, 2024, the Company acquired two properties, including one existing hotel acquired on March 25, 2024 and one hotel acquired upon the completion of development on June 20, 2024. During the six months ended June 30, 2024, the Company sold three properties, two on February 9, 2024 and one on May 21, 2024.

Current wording

As of September 30, 2025, the Company owned 220 hotels, including four hotels classified as held for sale, with a total of 29,687 guest rooms as compared to 224 hotels with a total of 30,068 guest rooms as of September 30, 2024. Results of operations are included only for the period of ownership for hotels acquired or disposed of during the current reporting period and prior year. During the nine months ended September 30, 2025, the Company acquired one existing hotel on June 10, 2025 and sold three properties, including one property sold on February 12, 2025, one sold on March 19, 2025, and one sold on August 18, 2025. On April 4, 2025, the Company recovered possession from a third-party hotel operator and reinstated operations of its 209-guest-room New York Property through a third-party manager engaged by the Company. During the nine months ended September 30, 2024, the Company acquired two properties, including one existing hotel acquired on March 25, 2024 and one hotel acquired upon the completion of development on June 20, 2024. During the nine months ended September 30, 2024, the Company sold three properties, two on February 9, 2024 and one on May 21, 2024.

Previous wording

The following table reflects certain operating statistics for the Company’s 219 hotels owned and held for use as of June 30, 2025, and excludes the New York Property (“Comparable Hotels”). The Company defines metrics from Comparable Hotels as results generated by the 219 hotels owned and held for use as of the end of the reporting period, excluding the New York Property. For the hotels acquired during the reporting periods shown, the Company has included, as applicable, results of those hotels for periods prior to the Company’s ownership using information provided by the properties’ prior owners at the time of acquisition and not adjusted by the Company. This information has not been audited, either for the periods owned or prior to ownership by the Company. For dispositions, assets held for sale and the New York Property, results have been excluded for the Company’s period of ownership.

Current wording

The following table reflects certain operating statistics for the Company’s 215 hotels owned and held for use as of September 30, 2025, and excludes the New York Property (“Comparable Hotels”). The Company defines metrics from Comparable Hotels as results generated by the 215 hotels owned and held for use as of the end of the reporting period, excluding the New York Property. For the hotels acquired during the reporting periods shown, the Company has included, as applicable, results of those hotels for periods prior to the Company’s ownership using information provided by the properties’ prior owners at the time of acquisition and not adjusted by the Company. For dispositions, assets held for sale and the New York Property, results have been excluded for the Company’s period of ownership.

Previous wording

The following table reflects certain operating statistics for the 216 hotels owned and held for use by the Company as of January 1, 2024 and during the entirety of the reporting periods being compared, excluding the New York Property (“Same Store Hotels”). This information has not been audited.

Current wording

The following table reflects certain operating statistics for the 212 hotels owned and held for use by the Company as of January 1, 2024 and during the entirety of the reporting periods being compared, excluding the New York Property (“Same Store Hotels”).

Previous wording

As discussed above, hotel performance is impacted by many factors, including the economic conditions in the U.S. as well as each individual locality. During the first six months of 2025, demand was modestly impacted across the portfolio by weather related travel disruption in January and February, reduced government travel and the impact of heightened macroeconomic uncertainty in the U.S. As a result, the Company’s Comparable Hotels and Same Store Hotels revenue and operating results generally decreased slightly during the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024. The Company expects RevPAR for its Comparable Hotels to moderately improve and RevPAR for the full year of 2025 to be slightly lower than 2024, assuming the current macroeconomic environment continues.

Current wording

As discussed above, hotel performance is impacted by many factors, including the economic conditions in the U.S. as well as each individual locality. During the first nine months of 2025, demand was modestly impacted across the portfolio by weather related travel disruption in January and February, reduced government travel and the impact of heightened macroeconomic uncertainty in the U.S. As a result, the Company’s Comparable Hotels and Same Store Hotels revenue and operating results generally decreased slightly during the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024. The Company expects similar results for the remainder of the year and expects RevPAR for the full year of 2025 to be slightly lower than 2024, assuming the current macroeconomic environment continues.

Previous wording

The Company’s principal source of revenue is hotel revenue consisting of room, food and beverage, and other related revenue. For the three months ended June 30, 2025 and 2024, the Company had total revenue of $384.4 million and $390.1 million, respectively. For the six months ended June 30, 2025 and 2024, the Company had total revenue of $712.1 million and $719.6 million, respectively. For the three months ended June 30, 2025 and 2024, respectively, Comparable Hotels achieved combined average occupancy of 78.6% and 79.9%, ADR of $163.62 and $163.80 and RevPAR of $128.68 and $130.89. For the six months ended June 30, 2025 and 2024, respectively, Comparable Hotels achieved combined average occupancy of 74.9% and 76.1%, ADR of $160.38 and $159.70 and RevPAR of $120.18 and $121.49. ADR is calculated as room revenue divided by the number of rooms sold, and RevPAR is calculated as occupancy multiplied by ADR.

Current wording

The Company’s principal source of revenue is hotel revenue consisting of room, food and beverage, and other related revenue. For the three months ended September 30, 2025 and 2024, the Company had total revenue of $373.9 million and $378.8 million, respectively. For the nine months ended September 30, 2025 and 2024, the Company had total revenue of $1.1 billion in each period. For the three months ended September 30, 2025 and 2024, respectively, Comparable Hotels achieved combined average occupancy of 76.2% and 77.1%, ADR of $162.68 and $163.71, and RevPAR of $124.01 and $126.29. For the nine months ended September 30, 2025 and 2024, respectively, Comparable Hotels achieved combined average occupancy of 75.4% and 76.5%, ADR of $161.35 and $161.20, and RevPAR of $121.67 and $123.34. ADR is calculated as room revenue divided by the number of rooms sold, and RevPAR is calculated as occupancy multiplied by ADR.

Previous wording

Compared to the same periods in 2024, during the three and six months ended June 30, 2025, the Company’s Comparable Hotels ADR generally remained unchanged while occupancy decreased by 1.6% in both the three and six month periods, resulting in marginal decreases in Comparable Hotels RevPAR of 1.7% and 1.1%, respectively. The decline in revenue for the six months ended June 30, 2025, as compared to the same period of 2024, was primarily due to weather-related travel disruption in January and February, reduced government travel and the additional day of revenues in 2024 from the leap year. Government demand softened late in the first quarter of 2025 following the current administration’s efforts to curtail government spending; it remained soft through the second quarter and is expected to continue to have a modestly negative impact on revenue should current conditions persist. Markets with significantly above-average growth in the second quarter of 2025, compared to the same period in 2024, for the Company included Anchorage, Columbia, Gainesville, Orlando, Pittsburgh and Salt Lake City.

Current wording

Compared to the same periods in 2024, during the three and nine months ended September 30, 2025, the Company’s Comparable Hotels ADR generally remained unchanged while occupancy decreased by 1.2% and 1.4%, respectively, resulting in marginal decreases in Comparable Hotels RevPAR of 1.8% and 1.4%, respectively. The decline in revenue for the three months ended September 30, 2025, as compared to the same period of 2024, was primarily due to reduced government and business transient travel and the impact of heightened macroeconomic uncertainty in the U.S. The decline in revenue for the nine months ended September 30, 2025, as compared to the same period of 2024, was primarily due to weather-related travel disruption in January and February, reduced government travel, the impact of heightened macroeconomic uncertainty in the U.S. and the lack of the additional day of revenues that existed in 2024 from the leap year. Government demand softened late in the first quarter of 2025 following the current administration’s efforts to curtail government spending; it remained soft through the second and third quarters and is expected to continue to have a modestly negative impact on revenue should current conditions persist, particularly if the government shutdown continues for an extended period of time. Markets with significantly above-average growth in the third quarter of 2025, compared to the same period in 2024, for the Company included Anchorage, Norfolk/Virginia Beach, Portland (Maine), Richmond, Salt Lake City, St. Louis and Syracuse.

Previous wording

Hotel operating expense consists of direct room operating expense, hotel administrative expense, sales and marketing expense, utilities expense, repair and maintenance expense, franchise fees and management fees. Hotel operating expense for the three months ended June 30, 2025 and 2024 totaled $220.6 million and $216.3 million, respectively, or 57.4% and 55.4% of total revenue for the respective periods. For the six months ended June 30, 2025 and 2024, hotel operating expense totaled $420.4 million and $413.6 million, respectively, or 59.0% and 57.5% of total revenue for the respective periods. The increases in hotel operating expense for the three and six months ended June 30, 2025, as compared to the same periods in 2024, were primarily driven by increased labor costs, increased utility costs and general inflationary pressures throughout the overall economy. The Company continues to feel upward pressure on total payroll costs given a competitive labor market where the demand for strong hotel talent remains high. However, the rate of wage growth has slowed, and management companies have made progress in reducing their use of contract labor. For the remainder of 2025, the Company anticipates a similar operating expense environment; however, the Company expects a slight increase in expenses concentrated in the second half of the year related to brand conferences that typically occur biennially, and uncertainties still exist around the potential inflationary impact of tariff policies. The Company continues to monitor its management companies’ efforts to realize operational efficiencies and mitigate the impact of cost pressures resulting from inflation and a tight labor market. The Company will continue to support its management companies to implement adjustments to the hotel operating model in response to continued changes in the operating environment and guest preferences, including their efforts to maximize operational efficiency.

Current wording

Hotel operating expense consists of direct room operating expense, hotel administrative expense, sales and marketing expense, utilities expense, repair and maintenance expense, franchise fees and management fees. Hotel operating expense for the three months ended September 30, 2025 and 2024 totaled $222.0 million and $219.9 million, respectively, or 59.4% and 58.1% of total revenue for the respective periods. For the nine months ended September 30, 2025 and 2024, hotel operating expense totaled $642.4 million and $633.5 million, respectively, or 59.2% and 57.7% of total revenue for the respective periods. The increases in hotel operating expense for the three and nine months ended September 30, 2025, as compared to the same periods in 2024, were primarily driven by increased labor costs, utility costs, repair and maintenance costs and general inflationary pressures throughout the overall economy. The Company continues to feel upward pressure on total payroll costs given a competitive labor market where the demand for strong hotel talent remains high. However, the rate of wage growth has slowed, and management companies have made progress in reducing their use of contract labor. For the remainder of 2025, the Company anticipates a similar operating expense environment. The Company continues to monitor its management companies’ efforts to realize operational efficiencies and mitigate the impact of cost pressures resulting from inflation and a tight labor market. The Company will continue to support its management companies to implement adjustments to the hotel operating model in response to continued changes in the operating environment and guest preferences, including their efforts to maximize operational efficiency.

Previous wording

Property taxes, insurance and other expense for the three months ended June 30, 2025 and 2024 was $22.9 million and $21.9 million, respectively, or 5.9% and 5.6% of total revenue for the respective periods. For the six months ended June 30, 2025 and 2024, property taxes, insurance and other expense totaled $46.2 million and $42.9 million, respectively, or 6.5% and 6.0% of total revenue for the respective periods. The increases in property taxes, insurance and other expense for the three and six months ended June 30, 2025, as compared to the same periods in 2024, were primarily due to increases in property taxes in certain markets and liability insurance premiums, partially offset by decreases in property insurance premiums. The Company will continue to proactively pursue tax assessment appeals in certain jurisdictions in an attempt to minimize tax increases, as warranted.

Current wording

Property taxes, insurance and other expense for the three months ended September 30, 2025 and 2024 was $22.4 million and $20.9 million, respectively, or 6.0% and 5.5% of total revenue for the respective periods. For the nine months ended September 30, 2025 and 2024, property taxes, insurance and other expense totaled $68.7 million and $63.9 million, respectively, or 6.3% and 5.8% of total revenue for the respective periods. The increases in property taxes, insurance and other expense for the three and nine months ended September 30, 2025, as compared to the same periods in 2024, were primarily due to increases in property taxes in certain markets and liability insurance premiums, partially offset by decreases in property insurance premiums. The Company will continue to proactively pursue tax assessment appeals in certain jurisdictions in an attempt to minimize tax increases, as warranted.

Previous wording

General and administrative expense for the three months ended June 30, 2025 and 2024 was $8.1 million and $11.1 million, respectively, or 2.1% and 2.8% of total revenue for the respective periods. For the six months ended June 30, 2025 and 2024, general and administrative expense was $17.3 million and $21.6 million, respectively, or 2.4% and 3.0% of total revenue for the respective periods. The principal components of general and administrative expense are payroll and related benefit costs, executive incentive compensation, legal fees, accounting fees and reporting expenses. The decreases in general and administrative expense for the three and six months ended June 30, 2025, as compared to the same periods in 2024, were primarily due to decreased accruals for anticipated performance under the Company’s executive incentive compensation plan, partially offset by increased payroll and related benefit costs.

Current wording

General and administrative expense for the three months ended September 30, 2025 and 2024 was $7.5 million and $9.2 million, respectively, or 2.0% and 2.4% of total revenue for the respective periods. For the nine months ended September 30, 2025 and 2024, general and administrative expense was $24.8 million and $30.8 million, respectively, or 2.3% and 2.8% of total revenue for the respective periods. The principal components of general and administrative expense are payroll and related benefit costs, executive incentive compensation, legal fees, accounting fees and reporting expenses. The decreases in general and administrative expense for the three and nine months ended September 30, 2025, as compared to the same periods in 2024, were primarily due to decreased accruals for anticipated performance under the Company’s executive incentive compensation plan.

Previous wording

Depreciation and amortization expense for the three months ended June 30, 2025 and 2024 was $48.0 million and $47.7 million, respectively. For the six months ended June 30, 2025 and 2024, depreciation and amortization expense was $96.0 million and $94.5 million, respectively. Depreciation and amortization expense primarily represents expense of the Company’s hotel buildings and related improvements, and associated personal property (furniture, fixtures, and equipment) for the respective periods owned. The increases of approximately $0.3 million and $1.5 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024, were primarily due to the acquisitions of two hotels in 2024 and one hotel in the first half of 2025, as well as renovations completed throughout 2024 and the first half of 2025, partially offset by the sale of six hotels in 2024 and two hotels in the first half of 2025.

Current wording

Depreciation and amortization expense for the three months ended September 30, 2025 and 2024 was $48.1 million in each period. For the nine months ended September 30, 2025 and 2024, depreciation and amortization expense was $144.1 million and $142.7 million, respectively. Depreciation and amortization expense primarily represents expense of the Company’s hotel buildings and related improvements, and associated personal property (furniture, fixtures, and equipment) for the respective periods owned. For the three months ended September 30, 2025, depreciation and amortization expense was relatively unchanged compared to the same period in 2024. The increase of approximately $1.4 million for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to the capitalization of newly acquired hotels in 2024 and the first three quarters of 2025, which had higher purchase prices compared to the carrying values of the hotels disposed of during the same period, as well as renovations completed throughout 2024 and the first three quarters of 2025. Additionally, the timing of the acquisitions, disposals and renovations impacted depreciation, as assets acquired or placed into service earlier in the year contributed more to each respective year’s depreciation than those acquired or renovated later or disposed of earlier.

Previous wording

Interest and other expense, net for the three months ended June 30, 2025 and 2024 was $21.0 million and $19.4 million, respectively. For the six months ended June 30, 2025 and 2024, interest and other expense, net was $40.4 million and $36.7 million, respectively. Interest and other expense, net for the six months ended June 30, 2025 and 2024 is net of approximately $0.8 million and $0.6 million, respectively, of interest capitalized associated with renovation projects.

Current wording

Interest and other expense, net for the three months ended September 30, 2025 and 2024 was $21.4 million and $21.2 million, respectively. For the nine months ended September 30, 2025 and 2024, interest and other expense, net was $61.7 million and $57.9 million, respectively. Interest and other expense, net for the nine months ended September 30, 2025 and 2024 is net of approximately $1.0 million and $0.7 million, respectively, of interest capitalized associated with renovation projects.

Previous wording

Interest expense related to the Company’s debt instruments for the three and six months ended June 30, 2025 increased compared to the same periods of 2024 as a result of higher average borrowings associated with variable-rate debt and higher average interest rates on the Company's variable-rate debt. The Company anticipates interest expense for the remainder of 2025 will be greater than the interest expense for the same period of 2024 as a result of a decrease in the amount of variable-rate debt that is fixed by interest rate swaps and higher borrowings. The proportion of fixed-rate debt was less over the six months ended June 30, 2025 compared to the same period of 2024, as the Company had three interest rate swaps in effect on $150.0 million of variable-rate debt that matured during the first six months of 2025 and six interest rate swaps in effect on $285.0 million of variable-rate debt that matured during 2024 while the Company entered into four new swaps in effect on $200.0 million of variable rate debt during 2024, but at a higher fixed rate than the swaps that expired. If the Company continues to replace expiring interest rate swaps in the current interest rate environment with new agreements, the Company anticipates those new agreements to be at higher rates than the expiring swap agreements.

Current wording

Interest expense related to the Company’s debt instruments for the three and nine months ended September 30, 2025 increased compared to the same periods of 2024 as a result of higher average borrowings associated with variable-rate debt and higher average interest rates on the Company's variable-rate debt. The Company anticipates interest expense for the remainder of 2025 will be relatively similar to the interest expense for the same period of 2024 as a result of increased borrowings being offset by lower average interest rates. The proportion of variable-rate debt that is fixed by interest rate swaps was lower over the nine months ended September 30, 2025 compared to the same period of 2024, as the Company had three interest rate swaps in effect on $150.0 million of variable-rate debt mature during the first nine months of 2025 and six interest rate swaps in effect on $285.0 million of variable-rate debt mature during 2024. However, this was partially offset as the Company entered into two new interest rate swaps in effect on $100.0 million of variable-rate debt during the third quarter of 2025 and four new interest rate swaps in effect on $200.0 million of variable-rate debt during 2024, but at higher fixed rates than the swap agreements that expired. If the Company continues to replace expiring interest rate swaps in the current interest rate environment with new agreements, the Company anticipates those new agreements to be at higher rates than the expiring swap agreements.

Previous wording

The following table reconciles the Company’s GAAP net income to FFO and MFFO for the three and six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table reconciles the Company’s GAAP net income to FFO and MFFO for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

The Company further excludes actual corporate-level general and administrative expense for the Company as well as Adjusted EBITDAre from the non-hotel property (the New York Property) 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 it is used by management to measure the performance of the Company’s hotels and effectiveness of the operators of the hotels. In addition,

Current wording

The Company further excludes actual corporate-level general and administrative expense for the Company as well as Adjusted EBITDAre from the non-hotel property (the New York Property) 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 it is used by management to measure the performance of the Company’s hotels and effectiveness of the operators of the hotels. In addition, Adjusted EBITDAre and Adjusted Hotel EBITDA are both components of key compensation measures of operational performance within the 2025 Incentive Plan.

Previous wording

The following table reconciles the Company’s GAAP net income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA for the three and six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table reconciles the Company’s GAAP net income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

As of June 30, 2025, the Company owned 221 hotels with an aggregate of 29,893 guest rooms located in 37 states and the District of Columbia, including one hotel with 206 guest rooms classified as held for sale, which is expected to be sold to an unrelated party in the third quarter of 2025. The following tables summarize the number of hotels and guest rooms by brand and by state:

Current wording

As of September 30, 2025, the Company owned 220 hotels with an aggregate of 29,687 guest rooms located in 37 states and the District of Columbia, including four hotels with 367 guest rooms classified as held for sale which are expected to be sold in the fourth quarter of 2025. The following tables summarize the number of hotels and guest rooms by brand and by state:

Previous wording

The following table summarizes the location, brand, manager, date acquired or completed and number of guest rooms for each of the 221 hotels that the Company owned as of June 30, 2025. As noted below, as of June 30, 2025, 14 of the Company’s properties are subject to ground leases and 12 of its hotels are encumbered by mortgages securing associated loan obligations.

Current wording

The following table summarizes the location, brand, manager, date acquired or completed and number of guest rooms for each of the 220 hotels that the Company owned as of September 30, 2025. As noted below, as of September 30, 2025, 14 of the Company’s properties are subject to ground leases and 12 of its hotels are encumbered by mortgages securing associated loan obligations.

Previous wording

Hotel is classified as held for sale as of June 30, 2025 and is expected to be sold to an unrelated third party in the third quarter of 2025.

Current wording

Hotels are classified as held for sale as of September 30, 2025, and are expected to be sold in the fourth quarter of 2025.

Previous wording

The Company has engaged in, and is expected to continue to engage in, transactions with related parties. These transactions cannot be construed as at arm’s length, and the results of the Company’s operations may have been different if these transactions were conducted with non-related parties. See Note 6 titled “Related Parties” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning the Company’s related party transactions.

Current wording

The Company has engaged in, and is expected to continue to engage in, transactions with related parties. These transactions cannot be construed as being at arm’s length, and the results of the Company’s operations may have been different if these transactions were conducted with non-related parties. See Note 6 titled “Related Parties” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning the Company’s related party transactions.

Previous wording

As of June 30, 2025, the Company had $1.5 billion of total outstanding debt consisting of $217.2 million of mortgage debt and $1.3 billion outstanding under its unsecured credit facilities, excluding unamortized debt issuance costs and fair value adjustments. As of June 30, 2025, the Company had available corporate cash on hand of approximately $7.9 million, and unused borrowing capacity under its Revolving Credit Facility of approximately $474.9 million. On July 24, 2025, the Company repaid all amounts outstanding under the $225 million term loan facility and entered into a new term loan facility with a principal amount of $385 million and a maturity date of July 31, 2030. Proceeds from the $385 million term loan facility were also used to repay a portion of the balance outstanding under the Revolving Credit Facility.

Current wording

As of September 30, 2025, the Company had $1.5 billion of total outstanding debt consisting of $215.2 million of mortgage debt and $1.3 billion outstanding under its unsecured credit facilities, excluding unamortized debt issuance costs and fair value adjustments. As of September 30, 2025, the Company had available corporate cash on hand of approximately $50.3 million, and unused borrowing capacity under its Revolving Credit Facility of approximately $647.9 million after taking a $2.1 million letter of credit into account. On July 24, 2025, the Company repaid all amounts outstanding under the $225 million term loan facility and entered into a new term loan facility with a principal amount of $385 million and a maturity date of July 31, 2030. Proceeds from the $385 million term loan facility were also used to repay the balance outstanding under the Revolving Credit Facility.

Previous wording

On February 23, 2024, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $500 million of its common shares under the ATM Program. No common shares were sold under the Company’s ATM Program during the three and six months ended June 30, 2025 or during the year ended December 31, 2024. The Company plans to use future net proceeds from the sale of shares under the ATM Program, or a similar successor program, for general corporate purposes, which may include, among other things, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital. The Company may also use the future net proceeds to acquire another REIT or other company that invests in income-producing properties. Future offerings will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company’s common shares and opportunities for uses of any proceeds.

Current wording

On February 23, 2024, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $500 million of its common shares under the ATM Program. No common shares were sold under the Company’s ATM Program during the three and nine months ended September 30, 2025 or during the year ended December 31, 2024. The Company plans to use future net proceeds from the sale of shares under the ATM Program, or a similar successor program, for general corporate purposes, which may include, among other things, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital. The Company may also use the future net proceeds to acquire another REIT or other company that invests in income-producing properties. Future offerings will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company’s common shares and opportunities for uses of any proceeds.

Previous wording

The Company generally must distribute annually at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, in order to maintain its REIT status. On June 18, 2025, the Company declared a monthly cash distribution of $0.08 per common share, paid on July 15, 2025, to shareholders of record as of June 30, 2025. For the three and six months ended June 30, 2025, the Company paid distributions of $0.24 and $0.53 per common share, respectively, for a total of $57.1 million and $126.7 million, respectively. Subsequent to quarter end, on July 18, 2025, the Company declared a monthly cash distribution of $0.08 per common share, payable on August 15, 2025, to shareholders of record as of July 31, 2025.

Current wording

The Company generally must distribute annually at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, in order to maintain its REIT status. On September 18, 2025, the Company declared a monthly cash distribution of $0.08 per common share, paid on October 15, 2025, to shareholders of record as of September 30, 2025. For the three and nine months ended September 30, 2025, the Company paid distributions of $0.24 and $0.77 per common share, respectively, for a total of $56.8 million and $183.5 million, respectively. Subsequent to quarter end, on October 20, 2025, the Company declared a monthly cash distribution of $0.08 per common share, payable on November 17, 2025, to shareholders of record as of October 31, 2025.

Previous wording

In May 2025, the Company’s Board of Directors approved a one-year extension of its existing Share Repurchase Program, authorizing share repurchases up to an aggregate of $262.6 million. The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2026 if not terminated or extended earlier. The Company previously entered into and expects to continue to enter into written trading plans as part of the Share Repurchase Program that provide for share repurchases in open market transactions that are intended to comply with Rule 10b5-1 under the Exchange Act. During the six months ended June 30, 2025, the Company purchased, under its Share Repurchase Program, approximately 3.4 million of its common shares at a weighted-average market purchase price of approximately $12.83 per common share for an aggregate purchase price, including commissions, of approximately $43.2 million. During the six months ended June 30, 2024, the Company purchased, under its Share Repurchase Program, approximately 1.1 million of its common shares at a weighted-average market purchase price of approximately $14.35 per common share for an aggregate purchase price, including commissions, of approximately $15.5 million. Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with cash on hand, proceeds from dispositions or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any). The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of June 30, 2025, approximately $257.6 million remained available for purchase under the Share Repurchase Program.

Current wording

In May 2025, the Company’s Board of Directors approved a one-year extension of its existing Share Repurchase Program, authorizing share repurchases up to an aggregate of $262.6 million. The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2026 if not terminated or extended earlier. The Company previously entered into and expects to continue to enter into written trading plans as part of the Share Repurchase Program that provide for share repurchases in open market transactions that are intended to comply with Rule 10b5-1 under the Exchange Act. During the three months ended September 30, 2025, the Company purchased, under its Share Repurchase Program, approximately 0.2 million of its common shares at a weighted-average market purchase price of approximately $11.99 per common share for an aggregate purchase price, including commissions, of approximately $2.0 million, bringing the total share repurchases for the nine months ended September 30, 2025, to approximately 3.5 million common shares at a weighted-average market purchase price of approximately $12.79 per common share for an aggregate purchase price, including commissions, of approximately $45.2 million. Purchases under the Share Repurchase Program have been funded, and the Company intends to fund future share repurchases, with cash on hand, proceeds from dispositions or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any). The timing of share repurchases and the number of common shares to be purchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of September 30, 2025, approximately $255.6 million remained available for purchase under the Share Repurchase Program.

Previous wording

Management routinely monitors the condition and operations of its hotels and plans renovations and other improvements as it deems prudent. The Company is committed to maintaining and enhancing each property’s competitive position in its market. The Company has invested in and plans to continue to reinvest in its hotels. Under certain loan and management agreements, the Company is required to place in escrow funds for the repair, replacement and refurbishing of furniture, fixtures, and equipment at the applicable hotels, based on a percentage of the hotel’s gross revenues, provided that such amount may be used for the Company’s capital expenditures with respect to those hotels. As of June 30, 2025, the Company held approximately $31.4 million in reserves related to these properties. During the six months ended June 30, 2025, the Company invested approximately $32.2 million in capital expenditures. The Company anticipates spending approximately $80 million to $90 million during 2025, which includes various comprehensive renovation projects for approximately 20 properties, however, inflationary pressures, supply chain shortages or tariffs, among other issues, may result in increased costs and delays for anticipated projects. The Company does not currently have any existing or planned projects for new property development.

Current wording

Management routinely monitors the condition and operations of its hotels and plans renovations and other improvements as it deems prudent. The Company is committed to maintaining and enhancing each property’s competitive position in its market. The Company has invested in and plans to continue to reinvest in its hotels. Under certain loan and management agreements, the Company is required to place in escrow funds for the repair, replacement and refurbishing of furniture, fixtures, and equipment at the applicable hotels, based on a percentage of the hotel’s gross revenues, provided that such amount may be used for the Company’s capital expenditures with respect to those hotels. As of September 30, 2025, the Company held approximately $31.7 million in reserves related to these properties. During the nine months ended September 30, 2025, the Company invested approximately $49.6 million in capital expenditures. The Company anticipates spending approximately $80 million to $90 million during 2025, which includes various comprehensive renovation projects for approximately 20 properties, however, inflationary pressures, supply chain shortages or tariffs, among other issues, may result in increased costs and delays for anticipated projects.

Previous wording

As of June 30, 2025, the Company had approximately $344.8 million of principal and interest payments due on its debt over the next 12 months. Included in this total are two unsecured term loans totaling $225.0 million which were scheduled to mature on August 2, 2025, but were repaid on July 24, 2025 using proceeds from the new $385 million term loan facility with a principal amount of $385 million and a maturity date of July 31, 2030, resulting in an additional $160 million funded at closing. Proceeds from the $385 million term loan facility were also used to repay a portion of the balance outstanding under the Revolving Credit Facility. The amount due over the next twelve months also includes one mortgage, covering two properties, totaling $29.8 million that matures in the third quarter of 2025 and a $19.9 million mortgage that matures in the second quarter of 2026. The Company plans to pay outstanding amounts and service payments due upon the upcoming debt maturity dates using one or a combination of any of the following: funds from operations, borrowings under its Revolving Credit Facility, proceeds from new financing, available credit extensions under its unsecured credit facilities or by refinancing the maturing debt. The Company may also pursue amendments with its lenders to extend the maturity date of any expiring loans. Interest expense related to the Company’s unsecured credit facilities is expected to be higher over the next 12 months than it was during the previous 12 months as a result of increased borrowings and a decrease in the amount of the Company’s variable-rate debt that is fixed by interest rate swaps partially offset by lower expected SOFR rates. The proportion of variable-rate debt that is fixed by interest rate swaps was lower over the six months ended June 30, 2025 compared to the same period of 2024, as the Company had three interest rate swaps in effect on $150.0 million of variable-rate debt mature during the first six months of 2025 and six interest rate swaps in effect on $285.0 million of variable-rate debt that matured during 2024 while the Company entered into four new interest rate swaps in effect on $200.0 million of variable-rate debt during 2024, but at higher rates than the swap agreements that expired. If the Company continues to replace expiring interest rate swaps in the current interest rate environment with new agreements, the Company anticipates those new agreements to be at higher rates than the expiring swap agreements. See Note 4 titled “Debt” and Note 5 titled “Fair Value of Financial Instruments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q for more detail regarding future maturities of the Company’s debt instruments and interest rate swap agreements as of June 30, 2025.

Current wording

As of September 30, 2025, the Company had approximately $257.2 million of principal and interest payments due on its debt over the next 12 months. Included in this total is a $29.4 million mortgage covering two properties, which was repaid in full on its maturity date, October 1, 2025, a $19.7 million mortgage that matures in the second quarter of 2026, and a $130.0 million unsecured term loan that matures in the third quarter of 2026. The Company plans to pay outstanding amounts and service payments due upon the upcoming debt maturity dates using one or a combination of any of the following: funds from operations, borrowings under its Revolving Credit Facility, proceeds from new financing, available credit extensions under its unsecured credit facilities or by refinancing the maturing debt. The Company may also pursue amendments with its lenders to extend the maturity date of any expiring loans. The $130 million term loan facility matures on July 25, 2026, but it can be extended up to one year, subject to certain conditions including covenant compliance and payment of additional fees. The Company presently has the ability to exercise this extension. The Revolving Credit Facility, which has a zero balance as of September 30, 2025, matures on July 25, 2026, but it can be extended up to one year, subject to certain conditions including covenant compliance and payment of additional fees. The Company presently has the ability to exercise this extension. Interest expense related to the Company’s unsecured credit facilities over the next 12 months is expected to be similar to the previous 12 months as a result of increased borrowings offset by lower average interest rates. The proportion of variable-rate debt that is fixed by interest rate swaps was lower over the nine months ended September 30, 2025 compared to the same period of 2024, as the Company had three interest rate swaps in effect on $150.0 million of variable-rate debt mature during the first nine months of 2025 and six interest rate swaps in effect on $285.0 million of variable-rate debt that matured during 2024. However, this was partially offset as the Company entered into two new interest rate swaps in effect on $100.0 million of variable-rate debt during the third quarter of 2025 and four new interest rate swaps in effect on $200.0 million of variable-rate debt during 2024, but at higher fixed rates than the swap agreements that expired. If the Company continues to replace expiring interest rate swaps in the current interest rate environment with new agreements, the Company anticipates those new agreements to be at higher rates than the expiring swap agreements. See Note 4 titled “Debt” and Note 5 titled “Fair Value of Financial Instruments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q for more detail regarding future maturities of the Company’s debt instruments and interest rate swap agreements…

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