UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______
Commission File Number 001-37389
APPLE HOSPITALITY REIT, INC.
(Exact name of registrant as specified in its charter)
Virginia
26-1379210
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer
Identification No.)
814 East Main Street
Richmond, Virginia
23219
(Address of principal executive offices)
(Zip Code)
(804) 344-8121
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Shares, no par value
APLE
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of registrant’s common shares outstanding as of July 27, 2026: 236,082,698
Index
Apple Hospitality REIT, Inc.
Form 10-Q
Page
Number
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
3
Consolidated Balance Sheets – June 30, 2026 and December 31, 2025
Consolidated Statements of Operations and Comprehensive Income – three and six months ended June 30, 2026 and 2025
4
Consolidated Statements of Shareholders’ Equity – three and six months ended June 30, 2026 and 2025
5
Consolidated Statements of Cash Flows – six months ended June 30, 2026 and 2025
6
Notes to Consolidated Financial Statements
7
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
21
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
39
Item 4.
Controls and Procedures
PART II. OTHER INFORMATION
Legal Proceedings
40
Unregistered Sales of Equity Securities and Use of Proceeds
Item 5.
Other Information
Item 6.
Exhibits
41
Signatures
42
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.
Item 1. Financial Statements
Consolidated Balance Sheets
(in thousands, except share data)
June 30,
December 31,
2026
2025
(unaudited)
Assets
Investment in real estate, net of accumulated depreciation and amortization of $2,062,456 and $1,972,264, respectively
$
4,727,631
4,787,864
Cash and cash equivalents
10,154
8,515
Restricted cash-furniture, fixtures and other escrows
8,793
30,903
Due from third-party managers, net
70,765
32,952
Other assets, net
47,347
41,944
Total Assets
4,864,690
4,902,178
Liabilities
Debt, net
1,502,257
1,538,584
Finance lease liabilities
110,792
111,094
Accounts payable and other liabilities
110,795
103,905
Total Liabilities
1,723,844
1,753,583
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 236,082,698 and 235,635,813 shares, respectively
4,724,605
4,719,900
Accumulated other comprehensive income
8,389
2,251
Accumulated distributions greater than net income
(1,592,148
)
(1,573,556
Total Shareholders’ Equity
3,140,846
3,148,595
Total Liabilities and Shareholders’ Equity
See notes to consolidated financial statements.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
(in thousands, except per share data)
Three Months Ended
Six Months Ended
Revenues:
Room
365,174
348,589
669,831
645,453
Food and beverage
18,443
18,174
34,743
33,685
Other
18,936
17,607
35,720
32,934
Total revenue
402,553
384,370
740,294
712,072
Expenses:
Hotel operating expense:
Operating
97,243
94,143
185,908
178,653
Hotel administrative
33,393
32,641
64,363
62,314
Sales and marketing
33,644
33,600
63,467
63,886
Utilities
12,643
11,844
25,875
24,323
Repair and maintenance
19,152
18,306
36,992
35,448
Franchise fees
19,181
17,075
35,220
31,628
Management fees
12,326
12,955
22,694
24,182
Total hotel operating expense
227,582
220,564
434,519
420,434
Property taxes, insurance and other
21,799
22,869
44,257
46,230
General and administrative
13,159
8,064
23,955
17,292
Impairment of depreciable real estate
2,319
Depreciation and amortization
49,652
48,022
99,189
95,963
Total expense
314,511
299,519
604,239
579,919
Gain on sale of real estate
112
3,557
Operating income
88,154
84,851
136,167
135,710
Interest and other expense, net
(20,817
(20,963
(40,889
(40,360
Income before income taxes
67,337
63,888
95,278
95,350
Income tax expense
(260
(240
(502
(481
Net income
67,077
63,648
94,776
94,869
Other comprehensive income (loss):
Interest rate derivatives
3,307
(4,323
6,138
(11,357
Comprehensive income
70,384
59,325
100,914
83,512
Basic and diluted net income per common share
0.28
0.27
0.40
Weighted average common shares outstanding - basic and diluted
236,151
237,659
236,131
238,856
Consolidated Statements of Shareholders' Equity
Three Months Ended June 30, 2026 and 2025
Common Stock
AccumulatedOther
Accumulated Distributions
Numberof Shares
Amount
ComprehensiveIncome (Loss)
Greater ThanNet Income
Total
Balance at March 31, 2026
236,068
4,723,977
5,082
(1,602,549
3,126,510
Share-based compensation, net of common shares surrendered to satisfy employee tax withholding requirements
15
674
Equity issuance costs
(46
Distributions declared to shareholders ($0.24 per share)
(56,676
Balance at June 30, 2026
236,083
Balance at March 31, 2025
238,408
4,751,358
8,553
(1,547,091
3,212,820
14
662
(133
Common shares repurchased
(1,432
(16,884
(57,005
Balance at June 30, 2025
236,990
4,735,003
4,230
(1,540,448
3,198,785
Six Months Ended June 30, 2026 and 2025
Balance at December 31, 2025
235,636
425
4,604
Issuance of common shares, net
22
101
Distributions declared to shareholders ($0.48 per share)
(113,368
Balance at December 31, 2024
239,766
4,771,005
15,587
(1,520,733
3,265,859
587
7,593
(405
(3,363
(43,190
(114,584
Consolidated Statements of Cash Flows
(in thousands)
Cash flows from operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
(112
(3,557
Other non-cash expenses, net
3,414
3,390
Changes in operating assets and liabilities:
Increase in due from third-party managers, net
(37,813
(29,935
Increase in other assets, net
(3,256
(3,483
Increase in accounts payable and other liabilities
15,303
688
Net cash provided by operating activities
173,820
157,935
Cash flows from investing activities:
Acquisition of hotel properties, net
(18,856
Disbursements for potential acquisitions, net
(7
(35
Capital improvements
(49,999
(41,572
Net proceeds from sale of real estate
8,644
20,645
Net cash used in investing activities
(41,362
(39,818
Cash flows from financing activities:
Net proceeds (disbursements) related to issuance of common shares
139
(373
Repurchases of common shares
Common shares surrendered to satisfy employee withholding requirements
(1,907
(3,275
Distributions paid to common shareholders
(113,225
(126,657
Proceeds from revolving credit facility
89,100
173,000
Payments on revolving credit facility
(104,100
(82,500
Payments of mortgage debt and other loans
(22,524
(37,052
Principal payments on finance leases
(412
(314
Net cash used in financing activities
(152,929
(120,361
Net change in cash, cash equivalents and restricted cash
(20,471
(2,244
Cash, cash equivalents and restricted cash, beginning of period
39,418
44,067
Cash, cash equivalents and restricted cash, end of period
18,947
41,823
Supplemental cash flow information:
Interest paid, net
39,254
39,073
Income taxes paid
902
931
Supplemental disclosure of noncash investing and financing activities:
Accrued distribution to common shareholders
18,872
18,940
Accrued capital expenditures
14,310
4,360
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents, beginning of period
10,253
Restricted cash-furniture, fixtures and other escrows, beginning of period
33,814
Cash and cash equivalents, end of period
7,896
Restricted cash-furniture, fixtures and other escrows, end of period
33,927
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 June 30, 2026, the Company owned 216 hotels with an aggregate of 29,459 guest rooms located in 37 states and the District of Columbia (“D.C.”). 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 statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the twelve-month period ending December 31, 2026.
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Net Income Per Common Share
Basic net income per common share is computed based upon the weighted average number of shares outstanding during the period. Diluted net income per common share is calculated after giving effect to all potential common shares that were dilutive and outstanding for the period. Basic and diluted net income per common share were the same for each of the periods presented.
Accounting Standards Recently Issued
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which focuses on improving the disclosures about a public business entity’s amounts and types of expenses. The update mandates that an entity disclose the amounts of specific natural expense categories—such as purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion—within relevant expense captions presented on the face of the income statement. Additionally, an entity must disclose qualitative descriptions of the composition of any remaining expense not separately disaggregated and disclose the total amount of selling expenses, and in annual reporting periods, its definition of selling expenses. The new standard is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments in this ASU may be applied prospectively by providing the revised disclosures for the period ending December 31, 2027 and continuing to provide the pre-ASU disclosures for the prior periods, or the amendments may be applied retrospectively by providing the revised disclosures for all periods presented. As of June 30, 2026, the Company has not adopted this ASU and is currently evaluating the impact of this ASU on the Company’s consolidated financial statements and related disclosures.
2. Investment in Real Estate
The Company’s investment in real estate consisted of the following (in thousands):
Land
839,931
841,027
Building and improvements
5,147,895
5,137,909
Furniture, fixtures and equipment
655,600
649,910
Finance ground lease assets
102,084
34,675
29,198
Construction in Progress
9,902
6,790,087
6,760,128
Less accumulated depreciation and amortization
(2,062,456
(1,972,264
Investment in real estate, net
As of June 30, 2026, the Company owned 216 hotels with an aggregate of 29,459 guest rooms located in 37 states and the District of Columbia. The Company’s hotel and guest room counts as of June 30, 2026 include its independent boutique hotel in New York, New York (the “New York Property”). On April 4, 2025, the Company recovered possession of this property and reinstated operations of the hotel's 209 guest rooms through a third-party manager engaged by the Company. Therefore, starting in April 2025, the New York Property was included in the Company’s hotel and guest room counts. From May 2023 through March 2025, the Company classified the property as a “non-hotel property” and excluded it from hotel and guest room counts, as it was leased to a third-party hotel operator.
The Company leases all of its 216 hotels to its wholly-owned taxable REIT subsidiary (or a subsidiary thereof) under a master hotel lease agreement.
Acquisitions
The Company did not acquire any hotels during the six months ended June 30, 2026. During the year ended December 31, 2025, the Company acquired two hotels. The following table sets forth the location, brand, manager, date acquired, number of guest rooms and gross purchase price, excluding transaction costs, for each property. All dollar amounts are in thousands.
City
State
Brand
Manager
DateAcquired
Guest Rooms
GrossPurchasePrice
Tampa
FL
Homewood Suites
HHM
6/10/2025
126
18,800
Nashville
TN
Motto
Chartwell
12/19/2025
260
98,183
386
116,983
During 2025, the Company utilized available cash, proceeds from the sales of properties, which included proceeds from two separate like-kind exchanges, in accordance with Section 1031 of the Internal Revenue Code of 1986, as amended (“1031 Exchange”), and borrowings under its unsecured credit facilities to purchase the Tampa, Florida and Nashville, Tennessee hotels. The acquisitions of these properties were accounted for as acquisitions of asset groups, whereby costs incurred to effect the acquisitions (which were not significant) were capitalized as part of the cost of the assets acquired.
3. Dispositions
The Company sold one hotel, a Hampton in Rochester, Minnesota, during the six months ended June 30, 2026. The hotel was sold to an unrelated party for a gross sales price of approximately $8.7 million, resulting in a gain on the sale of approximately $0.2 million, net of transaction costs, which is included in the Company's consolidated statement of operations for the six months ended June 30, 2026. The hotel had a total carrying value of approximately $8.3 million at the time of the sale. During the year ended December 31, 2025, the Company sold seven hotels to five unrelated parties for a combined gross sales price of approximately $73.3 million, resulting in a combined gain on the sales of approximately $13.1 million, net of transaction costs, which was included in the
8
Company’s consolidated statement of operations for the year ended December 31, 2025. The seven hotels had a total carrying value of approximately $58.9 million at their respective times of sale. The following table lists the seven hotels sold in 2025:
Date Sold
Chattanooga
2/12/2025
76
Indianapolis
IN
SpringHill Suites
3/19/2025
130
Houston
TX
Marriott
8/18/2025
206
Clovis
CA
Hampton
11/5/2025
86
83
Cedar Rapids
IA
11/25/2025
103
95
779
Excluding gains on sale of real estate, the Company’s consolidated statements of operations include operating income (loss) of approximately $(0.2) million and $1.1 million for the six months ended June 30, 2026 and 2025, respectively, relating to the results of operations of the eight hotels noted above (the one hotel sold in the first six months of 2026 and the seven hotels sold in 2025) for the period of ownership. The sale of these properties does not represent a strategic shift that has, or will have, a major effect on the Company’s operations and financial results; therefore, the operating results for the period of ownership of these properties are included in income from continuing operations for the three and six months ended June 30, 2026 and 2025, as applicable. The net proceeds from the sale of the one hotel in April 2026 were used to repay amounts outstanding under the Revolving Credit Facility, as defined in Note 4 below. A portion of the proceeds from the sale of the hotel in March 2025 was used to complete a 1031 Exchange for the acquisition of the Homewood Suites in Tampa, Florida, as discussed above in Note 2, which resulted in the deferral of taxable gains of approximately $2.4 million. Similarly, a portion of the proceeds from the sale of two hotels in the fourth quarter of 2025 was used to complete a 1031 Exchange for the acquisition of the Motto in Nashville, Tennessee, as discussed above in Note 2, which resulted in the deferral of taxable gains of approximately $4.0 million. The net proceeds from the sales of the remaining four hotels in 2025 were used for share repurchases and other general corporate purposes.
Hotel Sale Contracts and Impairment of Depreciable Real Estate
During the second quarter of 2026, the Company identified indicators of impairment at one property that was identified for potential sale. As a result, the Company recognized an impairment loss of approximately $2.3 million for this property in the second quarter of 2026, to adjust the carrying value of the hotel to its estimated fair value, which was based on the anticipated sales price, a Level 2 input under the fair value hierarchy.
4. Debt
Summary
As of June 30, 2026 and December 31, 2025, the Company’s debt consisted of the following (in thousands):
June 30,2026
December 31,2025
Revolving credit facility
46,000
61,000
Term loans and senior notes, net
1,294,947
1,293,841
Mortgage debt, net
161,310
183,743
9
The aggregate amounts of principal payable under the Company’s total debt obligations as of June 30, 2026 (including the Revolving Credit Facility (if any) (as defined below), term loans, senior notes and mortgage debt), for the remainder of this fiscal year, each of the next four fiscal years and thereafter are as follows (in thousands):
2026 (July - December)
228,126
2027
278,602
2028
334,066
2029
162,294
2030
460,016
Thereafter
44,638
1,507,742
Unamortized debt issuance costs
(5,485
The Company uses interest rate swaps to manage its interest rate risk on a portion of its variable-rate debt. Throughout the terms of these interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the annual Secured Overnight Financing Rate (“SOFR”) for a one-month term (“one-month SOFR”). Prior to March 2026, nine out of the eleven swaps then outstanding also included an additional 0.10% SOFR spread adjustment. In March 2026, the Company amended the nine interest rate swaps to remove the 0.10% SOFR spread adjustment. Following the amendments and through June 30, 2026, all interest rate swaps received a floating rate of interest equal to the one-month SOFR with no additional spread adjustment. The swaps are designed to effectively fix the interest payments on variable-rate debt instruments. See Note 5 for more information on the interest rate swap agreements. The Company’s total fixed-rate and variable-rate debt, after giving effect to its interest rate swaps in effect as of June 30, 2026 and December 31, 2025, is set forth below. All dollar amounts are in thousands.
Percentage
Fixed-rate debt (1)
896,742
59
%
994,265
64
Variable-rate debt
611,000
551,000
36
1,545,265
Weighted-average interest rate of debt
4.76
4.70
10
Credit Facilities
$1.2 Billion Credit Facility
Prior to the Company’s debt refinancing in July 2026 (as discussed below), the Company utilized an unsecured credit facility, entered into on July 25, 2022 (the “$1.2 billion credit facility”), comprised of (i) a revolving credit facility with a maximum borrowing capacity of $650 million with an initial maturity date of July 25, 2026 (the “Revolving Credit Facility”), (ii) a $275 million term loan with a maturity date of July 25, 2027 and (iii) a $300 million term loan with a maturity date of January 31, 2028. Subject to certain conditions, including covenant compliance and payment of additional fees, the Revolving Credit Facility maturity date may be extended up to one year. As of June 30, 2026, the Company had availability of approximately $602.0 million under the Revolving Credit Facility after taking into account outstanding letters of credit totaling approximately $2.0 million. The Company is also required to pay quarterly an unused fee at an annual rate of 0.20% or 0.25% on the unused portion of the Revolving Credit Facility, based on the amount of borrowings outstanding during the quarter.
As of June 30, 2026 and December 31, 2025, the details of the Company’s unsecured credit facilities were as set forth in the table below. All dollar amounts are in thousands.
Outstanding Balance
Interest Rate
MaturityDate
June 30, 2026
December 31, 2025
Revolving credit facility (1)
SOFR + 1.40% to 2.25%
(2)
7/25/2026
(3)
Term loans and senior notes
$275 million term loan
SOFR + 1.35% to 2.20%
7/25/2027
275,000
$300 million term loan
1/31/2028
300,000
$385 million term loan
7/31/2030
385,000
$130 million term loan
(4)
130,000
$85 million term loan
SOFR + 1.70% to 2.55%
12/31/2029
85,000
$50 million senior notes
3.60% to 4.35%
3/31/2030
50,000
$75 million senior notes
4.88% to 5.63%
6/2/2029
75,000
Term loans and senior notes at stated value
1,300,000
(5,053
(6,159
Credit facilities, net (1)
1,340,947
1,354,841
Weighted-average interest rate (5)
4.89
4.83
11
For the unsecured credit facilities noted in the table above, the Company may make voluntary prepayments, in whole or in part, at any time, subject to certain conditions. Interest on the Revolving Credit Facility and the unsecured term loans, subject to certain exceptions, is generally payable monthly, with interest rates that have historically been equal to the one-month SOFR plus a 0.10% SOFR spread adjustment plus a margin (margin ranges shown in the table above), based upon the Company’s consolidated leverage ratio, as calculated under the terms of each respective credit agreement. In March 2026, the Company amended the terms of the Revolving Credit Facility and each unsecured term loan to remove the 0.10% SOFR spread adjustment, with the exception of the $385 million term loan facility, which did not include the 0.10% SOFR spread adjustment. Interest payments on the senior notes are due quarterly, and the interest rates, subject to certain exceptions, have a range of annual rates (shown in the table above) based on the Company’s consolidated leverage ratio, as calculated under the terms of each respective note agreement.
Credit Facilities Covenants
The credit agreements governing the unsecured credit facilities (collectively, the “credit agreements”) contain customary affirmative and negative covenants, restrictions on certain investments and events of default, including the following financial covenants, as of June 30, 2026 (capitalized terms not defined below are defined in the credit agreements):
The Company was in compliance with the applicable covenants at June 30, 2026.
2026 Debt Refinancing
On July 23, 2026, the Company amended and restated the credit agreement for its existing $1.2 billion credit facility, extending the maturity dates and increasing the borrowing capacity of the Revolving Credit Facility by $50 million to $700 million, resulting in a total borrowing capacity of approximately $1.3 billion (the “$1.3 billion credit facility”). The $1.3 billion credit facility is comprised of (i) a $700 million revolving credit facility with a maturity date of July 24, 2030, (ii) a $275 million term loan with a maturity date of July 24, 2031 and (iii) a $300 million term loan with a maturity date of January 23, 2032. Subject to certain conditions, including covenant compliance and additional fees, the $700 million revolving credit facility maturity date may be extended up to one year. The credit agreement for the $1.3 billion credit facility contains customary affirmative and negative covenants and events of default, which are substantially the same terms as the previous credit agreement for the $1.2 billion credit facility, except as detailed below. The Company may make voluntary prepayments in whole or in part, at any time. Interest payments on the $1.3 billion credit facility are due monthly, and the interest rate, subject to certain exceptions, is equal to an annual SOFR rate for the selected interest period plus a margin ranging from 1.35% to 2.30%, depending upon the specific loan and the Company’s consolidated leverage ratio, as calculated under the terms of the amended and restated credit agreement. This reflects improved pricing within most pricing level categories as compared to the prior range of 1.35% to 2.25% under the $1.2 billion credit facility. The Company is also required to pay quarterly an unused facility fee at an annual rate of 0.20% or 0.25% on the unused portion of the $700 million revolving credit facility, based on the amount of borrowings outstanding during the quarter.
The credit agreement for the $1.3 billion credit facility requires the Company and its subsidiaries to comply with substantially similar financial covenants to the $1.2 billion credit facility (described above) except for the following changes:
12
In addition, in July 2026, the Company amended all of the other unsecured credit facilities to align the financial covenants, other affirmative and negative covenants and events of default with the amended $1.3 billion credit facility.
On July 28, 2026, the Company entered into an amendment to its existing $385 million term loan facility to align the interest rate margin range with the amended $1.3 billion credit facility. The amendment modified the applicable margin to a range of 1.35% to 2.25%, depending on the Company’s consolidated leverage ratio, as calculated under the terms of the amended credit agreement. This reflects improved pricing within most pricing level categories compared to a range of 1.35% to 2.20% prior to the amendment. The amount of the loan and maturity date remain unchanged.
On July 24, 2026, the Company amended and restated the credit agreement for its existing $130 million term loan facility, which increased the amount of the term loan facility to $160 million, with the additional $30 million funded at closing (the “$160 million term loan facility”) and extended the maturity date to July 24, 2033. In connection with the seven-year maturity extension, the interest rate margin was increased, with interest rates on the $160 million term loan facility, subject to certain exceptions, generally payable monthly, equal to an annual rate of the one-month SOFR plus a margin ranging from 1.70% to 2.65%, depending on the Company’s consolidated leverage ratio, as calculated under the terms of the amended and restated credit agreement, as compared to a range of 1.35% to 2.20% prior to the restatement. The credit agreement for the $160 million term loan facility contains customary affirmative and negative covenants and events of default. The Company may make voluntary prepayments, in whole or in part, at any time, subject to certain conditions, including the payment of certain prepayment premiums in the event that the loan is prepaid on or prior to the second anniversary of the closing date of the amended credit agreement.
On July 24, 2026, the Company entered into an amendment to its existing $85 million term loan facility, which updated the interest rate margin to a range of 1.35% to 2.25%, depending on the Company’s consolidated leverage ratio, as calculated under the terms of the amended credit agreement, as compared to a range of 1.70% to 2.55% prior to the amendment. The amount of the loan and maturity date remain unchanged.
Mortgage Debt
As of June 30, 2026, the Company had approximately $161.7 million in outstanding mortgage debt secured by nine properties with maturity dates ranging from December 2026 to May 2038, and both stated interest rates and effective interest rates ranging from 3.40% to 4.22%. The loans generally provide for monthly payments of principal and interest on an amortized basis and defeasance or prepayment penalties if prepaid. The following table sets forth the hotel properties securing each loan, the interest rate, loan assumption or origination date, maturity date, the principal amount assumed or originated, and the outstanding balance prior to any debt issuance costs as of June 30, 2026 and December 31, 2025 for each of the Company’s mortgage debt obligations. All dollar amounts are in thousands.
Location
Loan Assumption or Origination Date
Maturity Date
Principal Assumed or Originated
Outstanding balance as ofJune 30, 2026
Outstanding balance as ofDecember 31, 2025
Boise, ID
4.37
5/26/2016
6/11/2026
(1)
24,000
19,601
Burbank, CA
Courtyard
3.55
11/3/2016
12/1/2026
25,564
18,398
18,839
San Diego, CA
25,473
18,333
18,772
18,963
13,648
13,975
3.94
3/9/2018
4/1/2028
28,470
22,042
22,498
Santa Ana, CA
15,530
12,023
12,272
Richmond, VA
3.40
2/12/2020
3/11/2030
14,950
13,001
13,174
Residence Inn
Portland, ME
3.43
3/2/2020
3/1/2032
33,500
30,500
San Jose, CA
4.22
12/22/2017
5/1/2038
30,000
20,796
21,460
231,400
161,742
184,265
(432
(522
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5. Fair Value of Financial Instruments
Except as described below, the carrying value of the Company’s financial instruments approximates fair value due to the short-term nature of these financial instruments.
Debt
The Company estimates the fair value of its debt by discounting the future cash flows of each instrument at estimated market rates consistent with the maturity of a debt obligation with similar credit terms and credit characteristics, which are Level 3 inputs under the fair value hierarchy. Market rates take into consideration general market conditions and maturity. As of June 30, 2026, both the carrying value and the estimated fair value of the Company’s debt were approximately $1.5 billion. As of December 31, 2025, both the carrying value and estimated fair value of the Company’s debt were approximately $1.5 billion. Both the carrying value and the estimated fair value of the Company’s debt (as discussed above) are net of unamortized debt issuance costs related to term loans, senior notes and mortgage debt for each specific year.
Derivative Instruments
Currently, the Company uses interest rate swaps to manage its interest rate risk on variable-rate debt. Throughout the terms of these interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the one-month SOFR. Prior to March 2026, nine out of the eleven swaps then outstanding also included an additional 0.10% SOFR spread adjustment. In March 2026, the Company amended the nine interest rate swaps to remove the 0.10% SOFR spread adjustment. Following the amendments and through June 30, 2026, all interest rate swaps receive a floating rate of interest equal to the one-month SOFR with no additional spread adjustment. The swaps are designed to effectively fix the interest payments on variable-rate debt instruments. These swap instruments are recorded at fair value and, if in an asset position, are included in other assets, net, and, if in a liability position, are included in accounts payable and other liabilities in the Company’s consolidated balance sheets. The fair values of the Company’s interest rate swap agreements are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts, which is considered a Level 2 measurement under the fair value hierarchy. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The following table sets forth information for each of the Company’s interest rate swap agreements outstanding as of June 30, 2026 and December 31, 2025. All dollar amounts are in thousands.
Fair Value Asset (Liability)
Notional Amount atJune 30, 2026
OriginationDate
EffectiveDate
Swap FixedInterestRate
Active interest rate swaps designated as cash flow hedges at June 30, 2026:
125,000
11/3/2023
11/18/2026
4.41%
(295
(1,061
8/2/2024
8/18/2027
3.53%
251
(196
8/1/2024
8/5/2024
8/31/2027
3.74%
125
3/17/2023
3/20/2023
3/18/2028
3.40%
464
3/20/2028
3.39%
459
(144
8/18/2028
3.65%
267
(491
8/1/2025
8/31/2028
3.38%
578
(114
574
(117
7/11/2024
7/18/2024
7/18/2029
3.86%
(890
12/31/2019
1.77%
5,926
610,000
1,563
Matured interest rate swaps at June 30, 2026:
8/21/2019
5/18/2021
5/18/2026
1.19%
685,000
The Company assesses, both at inception and on an ongoing basis, the effectiveness of its qualifying cash flow hedges. As of June 30, 2026, all 10 active interest rate swap agreements listed above were designated as cash flow hedges. The change in the fair value of the Company’s designated cash flow hedges is recorded to accumulated other comprehensive income, a component of shareholders’ equity in the Company’s consolidated balance sheets.
Amounts reported in accumulated other comprehensive income will be reclassified to interest and other expense, net, as interest payments are made or received on the Company’s variable-rate derivatives. The Company estimates that approximately $3.1 million
of net unrealized gains included in accumulated other comprehensive income at June 30, 2026 will be reclassified as a decrease to interest and other expense, net within the next 12 months.
The following table presents the effect of derivative instruments in cash flow hedging relationships in the Company’s consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2026 and 2025 (in thousands):
Net Unrealized Gain (Loss)Recognized in Other Comprehensive Income (Loss)
Net Unrealized Gain Reclassifiedfrom Accumulated OtherComprehensive Income to Interestand Other Expense, net
Three Months Ended June 30,
Interest rate derivatives in cash flow hedging relationships
3,822
(2,043
515
2,280
Net Unrealized Gain (Loss)Recognized in OtherComprehensive Income (Loss)
Six Months Ended June 30,
7,447
(6,533
1,309
4,824
6. Related Parties
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. There have been no changes to the contracts and relationships discussed in the 2025 Form 10-K. Below is a summary of the significant related party relationships in effect during the six months ended June 30, 2026 and 2025.
Glade M. Knight, Executive Chairman of the Company, owns Apple Realty Group, Inc. (“ARG”), which receives support services from the Company and reimburses the Company for the cost of these services as discussed below. Mr. Knight is also currently a partner and Chief Executive Officer of Energy 11 GP, LLC and Energy Resources 12 GP, LLC, which are the respective general partners of Energy 11, L.P. and Energy Resources 12, L.P., each of which receives support services from ARG.
The Company provides support services, including the use of the Company’s employees and corporate office, to ARG and is reimbursed by ARG for the cost of these services. Under this cost sharing structure, amounts reimbursed to the Company include both compensation for personnel and office related costs (including office rent, utilities, office supplies, etc.) used by ARG. The amounts reimbursed to the Company are based on the actual costs of the services and a good faith estimate of the proportionate amount of time incurred by the Company’s employees on behalf of ARG. Total reimbursed costs allocated by the Company to ARG for the six months ended June 30, 2026 and 2025 totaled approximately $0.7 million and $0.6 million, respectively, and are recorded as a reduction to general and administrative expenses in the Company’s consolidated statements of operations.
As part of the cost sharing arrangement, certain day-to-day transactions may result in amounts due to or from the Company and ARG. To efficiently manage cash disbursements, the Company or ARG may make payments for the other company. Under this cash management process, each company may advance or defer up to $1 million at any time. Each quarter, any outstanding amounts are settled between the companies. This process allows each company to minimize its cash on hand and reduces the cost for each company. The amounts outstanding at any point in time are not significant to either of the companies. As of June 30, 2026 and December 31, 2025, total amounts due from ARG for reimbursements under the cost sharing structure totaled approximately $0.3 million and $0.5 million, respectively, and are included in other assets, net in the Company’s consolidated balance sheets.
The Company, through its wholly-owned subsidiary, Apple Air Holding, LLC, owns an aircraft used primarily for acquisition, asset management, renovation, investor, corporate and public relations and other business purposes. The aircraft may from time to time be leased to affiliates of the Company based on third-party rates. Lease activity was not significant during the reporting periods.
From time to time, the Company utilizes aircraft, owned by an entity that is owned by the Company’s Executive Chairman, for acquisition, asset management, renovation, investor, corporate and public relations and other business purposes, and reimburses this entity at third-party rates. Total costs incurred for the use of the aircraft during the six months ended June 30, 2026 and 2025 were less
than $0.1 million in each period and are included in general and administrative expenses in the Company’s consolidated statements of operations.
7. Shareholders’ Equity
Distributions
For the three and six months ended June 30, 2026, the Company paid distributions of $0.24 and $0.48 per common share, respectively, for a total of $56.6 million and $113.2 million, respectively. During 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. Additionally, in June 2026, the Company declared a monthly cash distribution of $0.08 per common share, totaling $18.9 million, which was recorded as a payable as of June 30, 2026 and paid on July 15, 2026. Distributions declared but not paid at the balance sheet date are included in accounts payable and other liabilities in the Company’s consolidated balance sheets as of June 30, 2026 and December 31, 2025, respectively.
Issuance of Shares
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 an at-the-market offering program (the “ATM Program”) under the Company’s current shelf registration statement. The Company did not sell any common shares under the ATM Program during the three and six months ended June 30, 2026 or during the year ended December 31, 2025. As of June 30, 2026, $500 million remained available for issuance under the ATM Program. The Company plans to use future net proceeds from the sale of shares under the ATM Program, or under 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.
Share Repurchases
In May 2026, 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 $242.5 million (the “Share Repurchase Program”). The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2027 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company did not repurchase any common shares under the Share Repurchase Program during the three and six months ended June 30, 2026. During the three months ended June 30, 2025, the Company purchased, under its Share Repurchase Program, approximately 1.4 million of its common shares at a weighted-average market purchase price of approximately $11.78 per common share for an aggregate purchase price, including commissions, of approximately $16.9 million, bringing the total share repurchases for the six months ended June 30, 2025, to approximately 3.4 million 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. Past 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 June 30, 2026, approximately $242.5 million remained available for purchase under the Share Repurchase Program.
8. Compensation Plans
The Company annually establishes an incentive compensation plan for its executive management team, which is approved by the Compensation Committee. Under the incentive compensation plan for 2026 (the “2026 Incentive Plan”), participants are eligible to receive incentive compensation based on the achievement of certain 2026 performance measures, with one-half (50%) of incentive compensation based on operational metrics and performance goals and one-half (50%) of incentive compensation based on shareholder return metrics. With respect to the shareholder return metrics, 75% of the target will be based on shareholder return relative to a peer group and 25% will be based on total shareholder return metrics over one-year, two-year, and three-year periods. With respect to the operational metrics and performance goals, 75% of the operational performance target will be based on the following metrics: Comparable Hotels RevPAR growth, Comparable Hotels Adjusted Hotel EBITDA margin, Adjusted EBITDAre and Modified Funds from Operations per share, equally weighted at 18.75% (non-GAAP financial measures are defined elsewhere within this Quarterly Report on Form 10-Q). The remaining 25% of the operational performance target will be based on the management of balance sheet maturities and allocation of capital to drive shareholder returns. As of June 30, 2026, the range of remaining potential aggregate payouts under the 2026 Incentive Plan was $0 - $28.0 million. Based on performance through June 30, 2026, the Company has accrued approximately $9.0 million as a liability for remaining potential executive incentive compensation
16
payments under the 2026 Incentive Plan, which is included in accounts payable and other liabilities in the Company’s consolidated balance sheet as of June 30, 2026. Compensation expense recognized by the Company related to executive incentive compensation under the 2026 Incentive Plan is included in general and administrative expenses in the Company’s consolidated statement of operations and totaled approximately $5.8 million and $9.6 million for the three and six months ended June 30, 2026, respectively. Approximately 25% of target awards under the 2026 Incentive Plan, if any, will be paid in cash, and 75% will be issued in common shares under the Company’s 2024 Omnibus Incentive Plan, approximately two-thirds of which will be unrestricted and one-third of which will vest in December 2027.
Under the incentive compensation plan for 2025 (the “2025 Incentive Plan”), the Company recorded approximately $1.0 million and $4.4 million, respectively, for executive incentive compensation in general and administrative expenses in its consolidated statement of operations for the three and six months ended June 30, 2025.
Share-Based Compensation Awards
The following table sets forth information pertaining to the executive share-based compensation issued under the 2025 Incentive Plan and the incentive plan for 2024 (the “2024 Incentive Plan”).
2025 IncentivePlan
2024 IncentivePlan
Period common shares issued
First Quarter 2026
First Quarter 2025
Common shares earned under each incentive plan
496,996
766,601
Common shares surrendered on issuance date to satisfy tax withholding obligations
128,757
221,309
Common shares earned and issued under each incentive plan, net of common shares surrendered on issuance date to satisfy tax withholding obligations
368,239
545,292
Average of the high and low stock price on issuance date
$12.10
$14.48
Total share-based compensation earned, including the surrendered shares (in millions)
$6.0
$11.1
Of the total common shares earned and issued, total common shares unrestricted at time of issuance
175,519
302,438
Of the total common shares earned and issued, total common shares restricted at time of issuance
192,720
242,854
Restricted common shares vesting date
December 11, 2026
December 12, 2025
Common shares surrendered on vesting date to satisfy tax withholding requirements resulting from vesting of restricted common shares
7,074
102,615
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9. Reportable Segments
The Company owns hotel properties throughout the U.S. that generate guest room rental, food and beverage, and other property-related income. There are no foreign operations from which the Company derives revenues and no assets are held in a foreign country. There are no material concentrations of 10% or more of total revenues allocated to a single customer for the reporting periods presented. The Chief Operating Decision Maker (“CODM”) separately evaluates the performance, allocates capital resources and manages the overall operating and investing strategy of each of its hotel properties individually; therefore, the Company considers each hotel to be an operating segment. However, because each hotel is not individually significant, serves a similar class and mix of business and leisure customers, has similar economic characteristics and risks, facilities, and services, utilizes similar methods to distribute its products and services through third-party management companies, and is subject to similar regulatory environments, the properties have been combined into a single operating segment for reporting purposes. The CODM, who is the Chief Executive Officer of the Company, assesses the performance of each operating segment on a monthly basis using adjusted hotel earnings (loss) before interest expense, income taxes and depreciation and amortization (“Adjusted Hotel EBITDA”), the measure by which the CODM makes day-to-day operating decisions, compares actual results with budgeted and prior year results, invests in capital improvements, and performs competitive analysis of the Company’s operating performance against industry peers.
Adjusted Hotel EBITDA, presented herein, is calculated as EBITDA from hotel operations with further exclusions as noted below. EBITDA is a commonly used measure of performance in many industries and is defined as net income (loss) excluding interest, income taxes, depreciation and amortization. The Company believes EBITDA is useful to investors because it helps the Company and its investors evaluate the ongoing operating performance of the Company by removing the impact of its capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization). In addition, certain covenants included in the agreements governing the Company’s indebtedness use EBITDA, as defined in the specific credit agreement, as a measure of financial compliance. The Company further excludes the following items that are not reflective of its ongoing operating performance or not incurred in the normal course of business, and thus not utilized in the CODM’s analysis to allocate resources and assess operating performance of the Company’s business:
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 the effectiveness of the operators of the hotels.
18
The following table reconciles the Company’s single reportable segment Adjusted Hotel EBITDA to GAAP net income for the three and six months ended June 30, 2026 and 2025:
Three Months EndedJune 30,
Six Months EndedJune 30,
Less:
Significant hotel operating expenses
Total significant hotel operating expenses
Property taxes, insurance & other
Other segment items (1)
(130
(263
(927
Adjusted Hotel EBITDA
153,302
141,070
261,781
246,335
(13,159
(8,064
(23,955
(17,292
(2,319
(49,652
(48,022
(99,189
(95,963
Interest expense, net
Disclosure of the reportable segment’s revenue and profit or loss is included in the Company’s consolidated statements of operations and comprehensive income; its assets are presented in the consolidated balance sheets; and its significant noncash items are provided in its consolidated statements of cash flows, all within this Quarterly Report on Form 10-Q. For the six months ended June 30, 2026 and 2025, the Company invested approximately $39.8 million and $32.2 million in capital expenditures, respectively.
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10. Contract Commitments
Purchase Contract Commitments
As of June 30, 2026, the Company had one outstanding contract, which was entered into during the third quarter of 2025, for the potential purchase of a hotel in Anchorage, Alaska for an expected fixed purchase price of approximately $65.5 million. The hotel is under development as a 160-guest-room AC Hotel and is currently planned to be completed and opened for business in the fourth quarter of 2027. As of June 30, 2026, a $2.0 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.
Development Project
During the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. The Company expects to spend a total of approximately $143.7 million to develop the AC Hotel and Residence Inn, which are currently planned to be completed and opened for business in the second quarter of 2028. Upon completion, the AC Hotel and Residence Inn are expected to contain approximately 237 and 160 guest rooms, respectively. As of June 30, 2026, the Company has capitalized $9.9 million related to the construction of the AC Hotel and Residence Inn, with such costs included in investment in real estate, net and accounts payable and other liabilities in the Company’s consolidated balance sheet. Additionally, the Company has paid $1.6 million in refundable (if the contracted third-party developer does not meet its obligation under the contract) deposits.
11. Subsequent Events
On July 15, 2026, the Company paid approximately $18.9 million, or $0.08 per common share, in distributions to shareholders of record as of June 30, 2026.
On July 17, 2026, the Company declared a monthly cash distribution of $0.08 per common share. The distribution is payable on August 17, 2026, to shareholders of record as of July 31, 2026.
In July 2026, the Company entered into separate agreements amending its Revolving Credit Facility and each of its term loans as follows: an amendment and restatement of its $1.2 billion credit facility, an amendment to its $385 million term loan facility, an amendment and restatement of its $130 million credit facility and an amendment to its $85 million credit facility. See Note 4 for additional information regarding these amendments.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q 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. 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 tariffs, 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 real estate capital markets; financing risks; changes in interest rates; litigation risks; regulatory proceedings or inquiries; and changes in laws or regulations or interpretations of current laws and regulations that impact the Company’s business, assets or classification as a real estate investment trust (“REIT”). Although the Company 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 Quarterly Report 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 the Company or any other person that the results or conditions described in such statements or the objectives and plans of the Company will be achieved. In addition, the Company’s qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the “Code”). Readers should carefully review the risk factors described in the Company’s filings with the Securities and Exchange Commission (“SEC”), including but not limited to those discussed in the section titled “Risk Factors” in the 2025 Form 10-K. Any forward-looking statement that the Company makes speaks only as of the date of this Quarterly Report. The Company 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.
The following discussion and analysis should be read in conjunction with the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, as well as the information contained in the 2025 Form 10-K.
Overview
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, 2026, the Company owned 216 hotels with an aggregate of 29,459 guest rooms located in urban, high-end suburban and developing markets throughout 37 states and the District of Columbia. Substantially all of the Company’s hotels operate under Marriott or Hilton brands. The hotels are operated and managed under separate management agreements with 15 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.”
Recent Hotel Portfolio Activities
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, as of June 30, 2026, the Company had one outstanding contract, which was entered into during the third quarter of 2025, for the potential purchase of a hotel in Anchorage, Alaska for an expected fixed purchase price of approximately $65.5 million. The hotel is under development as a 160-guest-room AC Hotel and is currently planned to be completed and opened for business in the fourth quarter of 2027. As of June 30, 2026, a $2.0 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.
As of June 30, 2026, the Company had one outstanding development project. During the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. The Company expects to spend a total of approximately $143.7 million to develop the AC Hotel and Residence Inn, which are currently planned to be completed and opened for business in the second quarter of 2028. Upon completion, the AC Hotel and Residence Inn are expected to contain approximately 237 and 160 guest rooms, respectively. As of June 30, 2026, the Company has capitalized $9.9 million related to the construction of the AC Hotel and Residence Inn.
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, 2026, the Company sold one hotel to an unrelated party for a gross sales price of approximately $8.7 million, resulting in a gain on the sale of approximately $0.2 million, net of transaction costs. The Company used the net proceeds from the sale to repay amounts outstanding under the Revolving Credit Facility.
See Note 3 titled “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.
As of June 30, 2026, the Company’s New York Property was included in the Company’s hotel and guest room counts. On April 4, 2025, the Company recovered possession of this property and reinstated operations of the hotel's 209 guest rooms through a third-party manager engaged by the Company. Therefore, starting in April 2025, the New York Property was included in the Company’s hotel and guest room counts. From May 2023 through March 2025, the Company classified the property as a “non-hotel property” and excluded it from hotel and guest room counts, as it was leased to a third-party hotel operator.
Hotel Operations
As of June 30, 2026, the Company owned 216 hotels with a total of 29,459 guest rooms as compared to 221 hotels with a total of 29,893 guest rooms as of June 30, 2025. Results of operations are included only for the period of ownership for hotels acquired or disposed of during the current reporting period and the prior year. During the six months ended June 30, 2026, the Company did not acquire any properties and sold one property on April 15, 2026. 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 property 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.
Management Company Transitions
The Company continually evaluates the performance of each property and may transfer management responsibilities to a different third-party manager to improve operational efficiency and maximize asset value. In markets or regions where the Company owns multiple properties, it may consolidate hotels under specific third-party managers to leverage regional expertise, gain operating efficiencies, and enhance overall portfolio performance. In January 2026, the Company transitioned the remaining nine hotels managed by affiliates of Marriott, as of December 31, 2025, to separate management companies that are not affiliated with Marriott, Hilton or Hyatt. In 2025, the Company transitioned the management responsibilities for nine other hotels to different third-party management companies with which it already had existing management agreements for other properties, a portion of which involved transitions from hotels previously managed by affiliates of Marriott to management companies unaffiliated with Marriott, Hilton, or Hyatt.
Operating Results
In evaluating financial condition and operating performance, the most important indicators on which the Company focuses are revenue measurements, such as average occupancy, average daily rate (“ADR”) and revenue per available room (“RevPAR”), and expenses, such as hotel operating expenses, general and administrative expenses and other expenses described below. RevPAR and operating results may be impacted by regional and local economies and local regulations as well as changes in lodging demand due to macroeconomic factors including inflationary or deflationary pressures, changes in energy costs, economic expansion or a recessionary environment.
The following is a summary of the results from operations of the Company’s hotels for their respective periods of ownership by the Company:
(in thousands, except statistical data)
PercentofRevenue
PercentChange
100.0
4.7
4.0
Hotel operating expense
56.5
57.4
3.2
58.7
59.0
3.4
Property taxes, insurance and other expense
5.4
5.9
-4.7
6.0
6.5
-4.3
General and administrative expense
3.3
2.1
63.2
2.4
38.5
n/a
Depreciation and amortization expense
-96.9
20,817
20,963
-0.7
40,889
40,360
1.3
240
8.3
502
481
4.4
-0.1
Adjusted Hotel EBITDA (1)
8.7
6.3
Number of hotels owned at end of period
216
221
-2.3
ADR
169.87
163.56
3.9
163.86
160.11
2.3
Occupancy
80.1
78.6
1.9
76.5
74.9
RevPAR
136.13
128.59
125.32
119.88
4.5
Comparable Hotels Operating Results
The following table reflects certain operating statistics for the Company’s 216 hotels owned as of June 30, 2026 (“Comparable Hotels”). The Company defines metrics from Comparable Hotels as results generated by the 216 hotels owned as of the end of the reporting period. 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, results have been excluded for the Company’s period of ownership.
Percent Change
169.90
164.19
3.5
163.96
160.93
78.8
1.6
75.1
136.17
129.30
5.3
125.45
120.80
3.8
23
Same Store Operating Results
The following table reflects certain operating statistics for the 213 hotels owned by the Company as of January 1, 2025 and during the entirety of the reporting periods being compared, excluding the New York Property (“Same Store Hotels”).
168.87
164.09
2.9
163.36
160.77
80.2
78.7
76.7
75.0
135.50
129.19
4.9
125.33
120.60
As discussed above, hotel performance is impacted by many factors, including the economic conditions in the U.S. as well as each individual locality. The Company’s Comparable Hotels and Same Store Hotels revenue and operating results increased for the three and six months ended June 30, 2026, compared to the same periods in 2025, reflecting broad-based improvement in both business and leisure travel demand beyond the impact of prior-year headwinds, including reduced government travel following the current administration's efforts to curtail government spending and broader U.S. macroeconomic uncertainty in 2025. Additionally, the 2026 FIFA World Cup events hosted in the U.S. drove incremental short-term demand and average daily rates across a number of markets during the month of June. The Company expects RevPAR to continue to show improvement as compared to 2025 for the remainder of the year. Based on performance through the second quarter, the Company currently expects full-year 2026 RevPAR to exceed 2025 levels, assuming no material changes in the macroeconomic environment.
Revenues
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, 2026 and 2025, the Company had total revenue of $402.6 million and $384.4 million, respectively. For the six months ended June 30, 2026 and 2025, the Company had total revenue of $740.3 million and $712.1 million, respectively. For the three months ended June 30, 2026 and 2025, respectively, Comparable Hotels achieved combined average occupancy of 80.1% and 78.8%, ADR of $169.90 and $164.19 and RevPAR of $136.17 and $129.30. For the six months ended June 30, 2026 and 2025, respectively, Comparable Hotels achieved combined average occupancy of 76.5% and 75.1%, ADR of $163.96 and $160.93 and RevPAR of $125.45 and $120.80. ADR is calculated as room revenue divided by the number of rooms sold, and RevPAR is calculated as occupancy multiplied by ADR.
Compared to the same periods in 2025, during the three and six months ended June 30, 2026, respectively, the Company’s Comparable Hotels ADR increased by 3.5% and 1.9%, while occupancy increased by 1.6% and 1.9%, resulting in an increase in RevPAR of 5.3% and 3.8%. Revenue increased for the three and six months ended June 30, 2026 compared to the same periods in 2025, reflecting improved demand beyond the impact of prior-year headwinds, including reduced government travel following the current administration’s efforts to curtail government spending and broader U.S. macroeconomic uncertainty in 2025. Revenue growth for the second quarter of 2026 was further driven by increased demand in markets that hosted FIFA World Cup events, as well as broad-based RevPAR improvement across the portfolio, including markets outside those hosting FIFA World Cup events, reflecting growth in both business and leisure travel demand. Markets with significantly above-average growth in the second quarter of 2026, compared to the same period in 2025, for the Company included Atlanta, Anchorage, Chicago, Fort Worth, Houston, Kansas City, Philadelphia, South Bend and St. Louis. For the remainder of 2026, the Company expects RevPAR to exceed 2025 levels for its Comparable Hotels, which is consistent with broader expectations for applicable industry chain scale averages assuming the current macroeconomic environment continues. Future revenues could be negatively impacted by, among other things, historical seasonal trends, deterioration of consumer sentiment, a recessionary macroeconomic environment, inflationary pressures, reduced government travel or continued geopolitical uncertainty.
Hotel Operating Expense
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, 2026 and 2025 totaled $227.6 million and $220.6 million, respectively, or 56.5% and 57.4% of total revenue for the respective periods. For the six months ended June 30, 2026 and 2025, hotel operating expense totaled $434.5 million and $420.4 million, respectively, or 58.7% and 59.0% of total revenue for the respective periods. The increases in hotel operating expense for the three and six months ended June 30, 2026, as compared to the same periods in 2025, were primarily driven by higher occupancy levels, which resulted in increased variable operating expenses, including labor and administrative costs. Utilities expense increased due to a combination of increased occupancy and increases in overall utility rates. Additionally, ongoing inflationary pressures across the broader economy contributed to the increase in operational costs for the period. While total payroll costs reflect a competitive labor market, wage growth has moderated. For the remainder of 2026, the Company anticipates a similar operating expense
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environment. The Company continues to monitor and support its management companies’ efforts to realize operational efficiencies and mitigate the impact of various cost pressures while responding effectively to changes in guest preferences and the overall operating environment to maximize operational efficiency.
Property Taxes, Insurance and Other Expense
Property taxes, insurance and other expense for the three months ended June 30, 2026 and 2025 was $21.8 million and $22.9 million, respectively, or 5.4% and 5.9% of total revenue for the respective periods. For the six months ended June 30, 2026 and 2025, property taxes, insurance and other expense totaled $44.3 million and $46.2 million, respectively, or 6.0% and 6.5% of total revenue for the respective periods. The decreases in property taxes, insurance and other expense for the three and six months ended June 30, 2026, as compared to the same periods in 2025, were primarily due to decreases in property insurance premiums and successful appeals of real estate tax assessments from prior periods in certain jurisdictions. The Company will continue to proactively pursue tax assessment appeals in certain jurisdictions in an attempt to minimize tax increases, as warranted.
General and Administrative Expense
General and administrative expense for the three months ended June 30, 2026 and 2025 was $13.2 million and $8.1 million, respectively, or 3.3% and 2.1% of total revenue for the respective periods. For the six months ended June 30, 2026 and 2025, general and administrative expense was $24.0 million and $17.3 million, respectively, or 3.2% and 2.4% of total revenue for the respective periods. The principal components of general and administrative expense are corporate payroll and related benefit costs, executive incentive compensation, legal fees, accounting fees and reporting expenses. The increases in general and administrative expense for the three and six months ended June 30, 2026, as compared to the same periods in 2025, were primarily due to increased accruals based on anticipated operating performance under the Company’s executive incentive compensation plan.
Impairment of Depreciable Real Estate
Impairment of depreciable real estate expense was approximately $2.3 million for the three and six months ended June 30, 2026 due to one property identified by the Company in the second quarter of 2026 for potential sale. See Note 3 titled “Dispositions” 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 this impairment loss.
Depreciation and Amortization Expense
Depreciation and amortization expense for the three months ended June 30, 2026 and 2025 was $49.7 million and $48.0 million, respectively. For the six months ended June 30, 2026 and 2025, depreciation and amortization expense was $99.2 million and $96.0 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 of ownership. The increases of approximately $1.6 million and $3.2 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, were primarily due to the acquisitions of two hotels in the second and fourth quarters of 2025, which had higher purchase prices compared to the carrying values of the eight hotels disposed of in 2025 and 2026, as well as renovations completed throughout 2025 and the first half of 2026.
Interest and Other Expense, net
Interest and other expense, net, for the three months ended June 30, 2026 and 2025 was $20.8 million and $21.0 million, respectively. For the six months ended June 30, 2026 and 2025, interest and other expense, net was $40.9 million and $40.4 million, respectively, and was net of approximately $0.9 million and $0.8 million, respectively, of interest capitalized associated with renovation projects.
Interest expense related to the Company’s debt instruments for the three and six months ended June 30, 2026 remained relatively unchanged compared to the same periods of 2025 as a result of higher average borrowings associated with variable-rate debt, offset by lower average interest rates on the Company's fixed and variable-rate debt and lower average borrowings associated with fixed-rate debt. The Company anticipates interest expense for the remainder of 2026 will be relatively similar to the interest expense for the same period of 2025 as the benefit of expected lower average interest rates is offset by a reduced benefit from interest rate swaps. The proportion of variable-rate debt that is fixed by interest rate swaps was lower over the six months ended June 30, 2026 compared to the same period of 2025, as the Company had one interest rate swap in effect on $75.0 million of variable-rate debt mature during the first half of 2026 and three interest rate swaps in effect on $150.0 million of variable-rate debt mature during 2025. 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, but at higher fixed rates than the swap agreements that expired.
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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 Funds from Operations (“MFFO”), Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”), Earnings Before Interest, Income Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”), Adjusted EBITDAre (“Adjusted EBITDAre”) and Adjusted Hotel EBITDA. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss), cash flow from operations or any other operating GAAP measure. FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA are not necessarily indicative of funds available to fund the Company’s cash needs, including its ability to make cash distributions. Although FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA, as calculated by the Company, may not be comparable to FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA, as reported by other companies that do not define such terms exactly as the Company defines such terms, the Company believes these supplemental measures are useful to investors when comparing the Company’s results between periods and with other REITs.
FFO and MFFO
The Company calculates and presents FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), which defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains and losses from the sale of certain real estate assets (including gains and losses from change in control), extraordinary items as defined by GAAP, and the cumulative effect of changes in accounting principles, plus real estate related depreciation, amortization and impairments, and adjustments for unconsolidated affiliates. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company’s operations. The Company further believes that by excluding the effects of these items, FFO is useful to investors in comparing its operating performance between periods and between REITs that report FFO using the Nareit definition. FFO as presented by the Company is applicable only to its common shareholders, but does not represent an amount that accrues directly to common shareholders.
The Company calculates MFFO by further adjusting FFO for the exclusion of amortization of finance ground lease assets, amortization of favorable and unfavorable operating leases, net, non-cash straight-line operating ground lease expense and share-based compensation expense, as these expenses do not reflect the underlying performance of the related hotels. The Company presents MFFO when evaluating its performance because it believes that it provides further useful supplemental information to investors regarding its ongoing operating performance. In addition, MFFO is a component of a key compensation measure of operational performance within the 2026 Incentive Plan.
The following table reconciles the Company’s GAAP net income to FFO and MFFO for the three and six months ended June 30, 2026 and 2025 (in thousands):
Depreciation of real estate owned
48,831
47,262
97,609
94,443
Funds from operations
118,115
110,910
194,592
185,755
Amortization of finance ground lease assets
760
1,519
Amortization of favorable and unfavorable operating leases, net
102
204
Non-cash straight-line operating ground lease expense
28
31
Share-based compensation expense (1)
4,365
1,404
7,279
4,472
Modified funds from operations
123,370
113,207
203,653
192,014
EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA
EBITDA is a commonly used measure of performance in many industries and is defined as net income (loss) excluding interest, income taxes, depreciation and amortization. The Company believes EBITDA is useful to investors because it helps the Company and
26
its investors evaluate the ongoing operating performance of the Company by removing the impact of its capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization). In addition, certain covenants included in the agreements governing the Company’s indebtedness use EBITDA, as defined in the specific credit agreement, as a measure of financial compliance.
In addition to EBITDA, the Company also calculates and presents EBITDAre in accordance with standards established by Nareit, which defines EBITDAre as EBITDA, excluding gains and losses from the sale of certain real estate assets (including gains and losses from change in control), plus real estate related impairments, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. The Company presents EBITDAre because it believes that it provides further useful information to investors in comparing its operating performance between periods and between REITs that report EBITDAre using the Nareit definition.
The Company also considers the exclusion of non-cash straight-line operating ground lease expense and share-based compensation expense from EBITDAre useful, as these expenses do not reflect the underlying performance of the related hotels (Adjusted EBITDAre).
The Company further excludes corporate expense, defined as actual corporate-level general and administrative expense, excluding share-based compensation 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 the 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 2026 Incentive Plan.
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, 2026 and 2025 (in thousands):
EBITDA
137,908
132,975
235,560
231,877
EBITDAre
140,115
237,767
228,320
Adjusted EBITDAre
144,508
134,410
245,105
232,856
Corporate expense
8,794
6,660
16,676
12,820
Adjusted EBITDAre from non-hotel property (2)
659
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Hotels Owned
As of June 30, 2026, the Company owned 216 hotels with an aggregate of 29,459 guest rooms located in 37 states and the District of Columbia. The following tables summarize the number of hotels and guest rooms by brand and by state:
Number of Hotels and Guest Rooms by Brand
Number of
Hotels
Hilton Garden Inn
5,476
34
4,892
33
4,518
30
3,695
3,163
Fairfield
1,213
Home2 Suites
1,146
1,333
TownePlace Suites
834
Embassy Suites
770
AC Hotels
702
Hyatt Place
411
Hyatt House
2
264
1
413
Independent
212
Aloft Hotels
157
29,459
Number of Hotels and Guest Rooms by State
Alabama
1,246
Alaska
304
Arizona
1,776
California
3,553
Colorado
567
Florida
2,970
Georgia
585
Idaho
186
Illinois
1,255
Indiana
349
Iowa
Kansas
230
Kentucky
156
Louisiana
422
Maine
514
Maryland
233
Massachusetts
330
Michigan
148
Minnesota
281
Mississippi
168
Missouri
544
Nebraska
621
Nevada
300
New Jersey
629
New York
558
North Carolina
799
Ohio
406
Oklahoma
545
Oregon
243
Pennsylvania
525
South Carolina
590
Tennessee
1,424
Texas
3,005
Utah
919
1,667
Washington
636
Wisconsin
438
Washington, D.C.
234
29
The following table summarizes the location, brand, manager, date acquired or completed and number of guest rooms for each of the 216 hotels that the Company owned as of June 30, 2026. As noted below, as of June 30, 2026, 14 of the Company’s properties are subject to ground leases and nine of its hotels are encumbered by mortgage debt.
DateAcquired orCompleted
Anchorage
AK
InnVentures
4/30/2010
169
12/1/2017
135
Auburn
AL
LBA
3/1/2014
Birmingham
84
9/12/2017
104
106
McKibbon
Dothan
6/1/2009
Huntsville
9/1/2016
98
77
107
Mobile
Prattville
Chandler
AZ
North Central
11/2/2010
150
110
Phoenix
164
5/2/2018
210
134
129
Scottsdale
122
Tempe
Crestline
8/13/2020
105
154
Tucson
Western
7/31/2008
124
10/6/2011
Agoura Hills
Dimension
Burbank
Huntington
8/11/2015
190
166
7/13/2015
170
Cypress
180
6/29/2015
Oceanside
142
Rancho Bernardo/San Diego
Sacramento
153
San Bernardino
2/16/2011
San Diego
9/1/2015
245
177
200
San Jose
140
San Juan Capistrano
Santa Ana
5/23/2011
155
Santa Clarita
9/24/2008
10/29/2008
66
128
90
Tustin
145
149
Colorado Springs
CO
Denver
Highlands Ranch
117
Boca Raton
Cape Canaveral
4/30/2020
116
108
Fort Lauderdale
6/23/2015
Gainesville
Jacksonville
119
12/7/2018
127
Miami
118
4/9/2010
121
162
Orlando
7/1/2009
3/19/2019
Panama City
3/12/2009
1/19/2010
Pensacola
97
Tallahassee
85
147
Atlanta/Downtown
GA
2/5/2018
Atlanta/Perimeter Dunwoody
6/28/2018
132
Atlanta
7/1/2016
Macon
Savannah
Newport
Davenport
Boise
ID
Raymond
Des Plaines
IL
253
Hoffman Estates
184
Mettawa
Rosemont
158
Skokie
225
Warrenville
Merrillville
Mishawaka
South Bend
Overland Park
KS
120
Louisville
KY
Concord
10/25/2022
Lafayette
LA
7/30/2010
6/23/2011
New Orleans
Marlborough
MA
Westford
Annapolis
MD
Silver Spring
Portland
ME
8/20/2021
178
9/10/2021
10/13/2017
179
Novi
MI
Maple Grove
MN
St. Paul
3/4/2019
160
Kansas City
MO
8/31/2010
St. Louis
Hattiesburg
MS
12/11/2008
Carolina Beach
NC
144
Charlotte
94
Durham
12/4/2008
Fayetteville
2/3/2011
Wilmington
Winston-Salem
Omaha
NE
181
123
Cranford
NJ
Mahwah
Mount Laurel
1/11/2011
Somerset
West Orange
131
Las Vegas
NV
Highgate
12/27/2023
Islip/Ronkonkoma
NY
Syracuse
10/16/2015
78
Cleveland
OH
6/30/2023
32
Mason
Twinsburg
10/7/2008
Oklahoma City
OK
5/28/2010
100
Oklahoma City (West)
OR
11/17/2021
Collegeville/Philadelphia
PA
11/15/2010
Malvern/Philadelphia
11/30/2010
Pittsburgh
12/31/2008
Charleston
SC
Columbia
143
91
Greenville
9/1/2021
Hilton Head
Franklin
Knoxville
Memphis
10/28/2021
9/30/2010
194
5/31/2012
Addison
159
Arlington
12/1/2010
Austin
4/14/2009
Austin/Round Rock
3/6/2009
115
Dallas
Denton
El Paso
114
Fort Worth
2/2/2017
7/19/2010
Frisco
Grapevine
9/24/2010
Lewisville
10/16/2008
165
San Antonio
Shenandoah
Stafford
Texarkana
1/31/2011
81
Provo
UT
Salt Lake City
10/11/2023
175
10/20/2017
136
South Jordan
11/21/2023
192
Alexandria
VA
3/28/2011
Charlottesville
Manassas
Richmond
White Lodging
12/8/2014
75
Suffolk
92
72
Virginia Beach
141
Kirkland
WA
Renton
10/18/2023
146
Seattle
Tukwila
Madison
WI
2/18/2021
176
6/20/2024
262
3/25/2024
Related Parties
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.
Liquidity and Capital Resources
Capital Resources
The Company’s principal short-term sources of liquidity are the operating cash flows generated from the Company’s properties and availability under its Revolving Credit Facility. Over the long term, the Company may receive proceeds from strategic additional secured and unsecured debt financing, dispositions of its hotel properties and offerings of the Company’s common shares, including pursuant to the ATM Program. Macroeconomic pressures, including inflation, increases in interest rates and general market uncertainty, could impact the Company’s ability to raise debt or equity capital to fund long-term liquidity requirements in a cost-effective manner.
As of June 30, 2026, the Company had $1.5 billion of total outstanding debt consisting of $161.7 million of mortgage debt and $1.3 billion outstanding under its unsecured credit facilities, excluding unamortized debt issuance costs. As of June 30, 2026, the Company had available corporate cash on hand of approximately $10.2 million, and unused borrowing capacity under its Revolving Credit Facility of approximately $602.0 million after taking into account outstanding letters of credit of approximately $2.0 million.
The credit agreements governing the unsecured credit facilities contain customary affirmative and negative covenants and events of default. As of June 30, 2026, the covenants included, among others, a minimum tangible net worth, maximum debt limits, minimum interest and fixed charge coverage ratios, and restrictions on certain investments. The Company was in compliance with the applicable covenants as of June 30, 2026.
On July 23, 2026, the Company amended and restated the credit agreement for its existing $1.2 billion credit facility, extending the maturity dates and increasing the borrowing capacity of the Revolving Credit Facility by $50 million to $700 million, resulting in a total borrowing capacity of approximately $1.3 billion. The amended and restated credit agreement extended the maturity dates, modified certain financial covenants and changed the interest rate margin range to 1.35% to 2.30% as compared to a range of 1.35% to 2.25% prior to the amendment. The Company also entered into conforming amendments for its other unsecured credit facilities to align with the revised financial covenants.
On July 28, 2026, the Company entered into an amendment to its existing $385 million term loan facility which updated the interest rate margin to a range of 1.35% to 2.25% as compared to a range of 1.35% to 2.20% prior to the amendment.
On July 24, 2026, the Company amended and restated the credit agreement for its existing $130 million term loan facility which increased the amount of the term loan facility to $160 million, with the additional $30 million funded at closing, extended the maturity date and changed the interest rate margin range to 1.70% to 2.65% as compared to a range of 1.35% to 2.20% prior to the amendment.
On July 24, 2026, the Company entered into an amendment to its existing $85 million term loan facility which updated the interest rate margin to a range of 1.35% to 2.25% as compared to a range of 1.70% to 2.55% prior to the amendment.
See Note 4, titled “Debt” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for details regarding the Company’s debt agreements as of June 30, 2026 and amendments to those agreements subsequent to that date.
The Company has a universal shelf registration statement on Form S-3 (No. 333-285184) that was automatically effective upon filing on February 25, 2025. The Company may offer an indeterminate number or amount, as the case may be, of (1) common shares, no par value per share; (2) preferred shares, no par value per share; (3) depository shares representing the Company’s preferred shares; (4) warrants exercisable for the Company’s common shares, preferred shares or depository shares representing preferred shares; (5) rights to purchase common shares; and (6) unsecured senior or subordinate debt securities, all of which may be issued from time to time on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.
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, 2026 or during the year ended December 31, 2025. As of June 30, 2026, $500 million remained available for issuance under the ATM Program. The Company plans to use future net proceeds from the sale of shares under the ATM Program, or under 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.
Capital Uses
The Company anticipates that cash flow from operations, availability under its Revolving Credit Facility, additional borrowings, and proceeds from hotel dispositions and equity offerings will be adequate to meet its anticipated liquidity requirements, including required distributions to shareholders, share repurchases, capital improvements, debt service, hotel acquisitions, lease commitments, and cash management activities.
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, 2026, the Company declared a monthly cash distribution of $0.08 per common share, paid on July 15, 2026, to shareholders of record as of June 30, 2026. For the three and six months ended June 30, 2026, the Company paid distributions of $0.24 and $0.48 per common share, respectively, for a total of $56.6
35
million and $113.2 million, respectively. Subsequent to quarter end, on July 17, 2026, the Company declared a monthly cash distribution of $0.08 per common share, payable on August 17, 2026, to shareholders of record as of July 31, 2026.
The Company’s current annual distribution rate, payable monthly, is $0.96 per common share. As it has done historically, due to seasonality, the Company may use its Revolving Credit Facility to maintain the consistency of the monthly distribution rate, taking into consideration any acquisitions, dispositions, capital improvements and economic cycles. While management currently expects monthly cash distributions to continue at $0.08 per common share, any distribution will be subject to approval of the Company’s Board of Directors, and there can be no assurance of the classification, timing or duration of distributions at any particular distribution rate. The Board of Directors monitors the Company’s distribution rate relative to the performance of its hotels on an ongoing basis and may make adjustments to the distribution rate as determined to be prudent in relation to other cash requirements of the Company or to the extent required to maintain the Company’s REIT status. If cash flows from operations and the Revolving Credit Facility are not adequate to meet liquidity requirements, the Company may utilize additional financing sources to make distributions. Although the Company has relatively low levels of debt, there can be no assurance it will be successful with this strategy, and it may need to reduce its distributions to minimum levels required to maintain its qualification as a REIT. If the Company were unable to extend its maturing debt in future periods or if it were to default on its debt, it may be unable to make distributions.
In May 2026, 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 $242.5 million. The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2027 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. The Company did not repurchase any common shares under the Share Repurchase Program during the three and six months ended June 30, 2026. 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. Past 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 June 30, 2026, approximately $242.5 million remained available for purchase under the Share Repurchase Program.
Capital Improvements
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 agreements, the Company is required to place in escrow funds for the repair, replacement and refurbishment of furniture, fixtures, and equipment at the applicable hotels, based on a percentage of the hotel’s gross revenues, to be used for capital expenditures with respect to those hotels. As of June 30, 2026, the Company held approximately $5.3 million in reserves related to these properties. During the six months ended June 30, 2026, the Company invested approximately $39.8 million in capital expenditures. The Company anticipates spending approximately $85 million to $95 million during 2026, which includes various comprehensive renovation projects for approximately 18 properties. The increase of $5.0 million from the Company’s previous estimate and the change in the number of comprehensive renovation projects are primarily a result of prioritizing two larger projects: the renovation of its Embassy Suites in Anchorage, Alaska and the rebranding of the Residence Inn in Seattle, Washington. The Company’s expectations reflect its ongoing prioritization and management of its overall capital spending to keep its hotels competitive, while weighing larger investments toward the highest return opportunities. Estimates of future capital expenditures are subject to change, and inflationary pressures, supply chain disruptions, tariffs, or other factors could result in additional cost increases or delays to anticipated projects.
As of June 30, 2026, the Company had one outstanding development project. During the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. The Company expects to spend a total of approximately $143.7 million to develop the AC Hotel and Residence Inn, which are currently planned to be completed and opened for business in the second quarter of 2028. As of June 30, 2026, the Company has capitalized $9.9 million related to the construction of the AC Hotel and Residence Inn.
Upcoming Debt Maturities and Debt Service Payments
As of June 30, 2026, the Company had approximately $292.6 million of principal and interest payments due on its debt over the next 12 months. This amount includes payments totaling $51.3 million on a loan secured by three properties that matures in the fourth
quarter of 2026, as well as $46.0 million outstanding under the Revolving Credit Facility, which was scheduled to mature on July 25, 2026, but was amended and restated on July 23, 2026, extending the maturity date to July 24, 2030. Also included in the total above is a $130.0 million unsecured term loan which was scheduled to mature on July 25, 2026, but was amended and restated on July 24, 2026, to increase the amount of the term loan facility to $160 million and to extend the maturity date to July 24, 2033. 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 over the next 12 months is expected to be similar to the previous 12 months, with comparable borrowings and average interest rates. The average proportion of variable-rate debt that is fixed by interest rate swaps is expected to be lower over the next 12 months compared to the six months ended June 30, 2026. The Company had one interest rate swap in effect on $75.0 million of variable-rate debt mature in the second quarter of 2026 and has one interest rate swap in effect on $125.0 million of variable-rate debt that will mature in the second half of 2026. If the Company replaces expiring interest rate swaps in the current interest rate environment with new agreements, the Company anticipates those new agreements to generally 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, 2026.
As mentioned in the “Capital Improvements” section above, during the third quarter of 2025, the Company entered into a fixed-price contract with a third party to develop a dual-branded property, consisting of an AC Hotel and a Residence Inn, on Company-owned land in Las Vegas, Nevada, adjacent to its existing SpringHill Suites. See 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 more detail regarding this development project.
Cash Management Activities
As part of the cost sharing arrangements discussed in 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, certain day-to-day transactions may result in amounts due to or from the Company and ARG. To efficiently manage cash disbursements, the Company or ARG may make payments for the other company. Under the cash management process, each company may advance or defer up to $1 million at any time. Each quarter, any outstanding amounts are settled between the companies. This process allows each company to minimize its cash on hand and reduces the cost for each company. The amounts outstanding at any point in time are not significant to either of the companies.
Impact of Inflation
The Company relies on the performance of its hotels and the ability of its hotel operators to increase revenue to keep pace with inflation. Hotel operators, in general, possess the ability to adjust room rates daily to reflect the effects of inflation on the Company’s operating expenses. However, competitive pressures and other factors could limit the operators’ ability to raise room rates and, as a result, the Company may not be able to offset such increased operating expenses with increases in revenue. Additionally, tariff-induced inflation could increase certain operating and renovation costs, as some supplies, furniture, fixtures and equipment and construction materials are imported, as well as negatively impact leisure travel by reducing the discretionary income of consumers.
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Business Interruption
Being in the real estate industry, the Company is exposed to natural disasters on both a local and regional scale. Although management believes the Company has adequate insurance to cover this exposure, there can be no assurance that such events will not have a material adverse effect on the Company’s financial position or results of operations.
Seasonality
The hotel industry historically has been seasonal in nature. Seasonal variations in occupancy at the Company’s hotels may cause quarterly fluctuations in its revenues. Generally, occupancy rates and hotel revenues for the Company’s hotels are greater in the second and third quarters than in the first and fourth quarters. To the extent that cash flow from operations is insufficient during any quarter due to temporary or seasonal fluctuations in revenue, the Company expects to utilize cash on hand or available financing sources to meet cash requirements.
Critical Accounting Policies and Estimates
The preparation of the Company’s financial statements in accordance with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Company’s financial statements, the reported amounts of revenues and expenses during the reporting periods and the related disclosures in the Company’s Unaudited Consolidated Financial Statements and Notes thereto. The Company has discussed those policies and estimates that it believes are critical and require the use of complex judgment in their application in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on February 23, 2026. There have been no material changes to the Company’s critical accounting policies or the methods or assumptions applied.
Subsequent Events
In July 2026, the Company entered into separate agreements amending its Revolving Credit Facility and each of its term loans as follows: an amended and restated credit agreement for its $1.2 billion credit facility, an amendment to its $385 million term loan facility, an amended and restated credit agreement for its $130 million credit facility and an amendment to its $85 million credit facility. See Note 4, titled “Debt” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information regarding these amendments.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of June 30, 2026, the Company’s financial instruments were not exposed to significant market risk due to foreign currency exchange risk, commodity price risk or equity price risk. However, the Company is exposed to interest rate risk due to possible changes in short-term interest rates as it invests its cash or borrows on its Revolving Credit Facility and due to the portion of its variable-rate debt that is not fixed by interest rate swaps. As of June 30, 2026, after giving effect to interest rate swaps, as described below, approximately $611.0 million, or approximately 41% of the Company’s total debt outstanding, was subject to variable interest rates. Based on the Company’s variable-rate debt outstanding as of June 30, 2026, every 100 basis point change in interest rates will impact the Company’s annual net income by approximately $6.1 million, all other factors remaining the same. With the exception of interest rate swap transactions, the Company has not engaged in transactions in derivative financial instruments or derivative commodity instruments.
As of June 30, 2026, the Company’s variable-rate debt consisted of its unsecured credit facilities, including $46.0 million in borrowings outstanding under its Revolving Credit Facility and $1.2 billion of term loans. Currently, the Company uses interest rate swaps to manage its interest rate risk on a portion of its variable-rate debt. As of June 30, 2026, the Company had 10 interest rate swap agreements that effectively fix the interest payments on approximately $610.0 million of the Company’s variable-rate debt outstanding with swap maturity dates ranging from November 2026 to December 2029. Under the terms of the Company’s interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the annual rate of the one-month SOFR. See 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 a description of the Company’s interest rate swaps as of June 30, 2026.
In addition to its variable-rate debt and interest rate swaps discussed above, the Company has assumed or originated fixed interest rate mortgages payable to lenders under permanent financing arrangements as well as two fixed-rate senior notes facilities totaling $125 million. The following table summarizes the annual maturities and average interest rates of the Company’s mortgage debt and borrowings outstanding under its unsecured credit facilities at June 30, 2026. All dollar amounts are in thousands.
July 1 - December 31, 2026
FairMarketValue
Total debt:
Maturities
1,488,012
Average interest rates (1)
4.6
3.7
Variable-rate debt:
176,000
1,221,000
1,220,797
4.8
5.0
Fixed-rate debt:
52,126
3,602
34,066
77,294
75,016
286,742
267,215
Average interest rates
4.1
3.6
Item 4. Controls and Procedures
The Company’s senior management evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, the Company’s senior management has concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026. There have been no changes in the Company’s internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 1. Legal Proceedings
The Company is or may be a party to various legal proceedings that arise in the ordinary course of business. The Company is not currently involved in any litigation nor, to management’s knowledge, is any litigation threatened against the Company where the outcome would, in management’s judgment based on information currently available to the Company, have a material adverse effect on the Company’s consolidated financial position or results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following is a summary of all share repurchases during the second quarter of 2026.
Issuer Purchases of Equity Securities
(a)
(b)
(c)
(d)
Period
Total Number of Shares Purchased
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (1)
April 1 - April 30, 2026
242,507
May 1 - May 31, 2026
June 1 - June 30, 2026 (2)
17,965
16.27
Item 5. Other Information.
Trading Arrangements
No director or officer of the Company adopted, terminated or modified a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K, during the three months ended June 30, 2026.
Item 6. Exhibits
Exhibit
Description of Documents
3.1
Amended and Restated Articles of Incorporation of the Company, as amended (Incorporated by reference to Exhibit 3.1 to the Company’s quarterly report on Form 10-Q (SEC File No. 001-37389) filed August 6, 2018)
Third Amended and Restated Bylaws of the Company (Incorporated by reference to Exhibit 3.2 to the Company’s quarterly report on Form 10-Q (SEC File No. 001-37389) filed May 18, 2020)
10.1
Fourth Amended and Restated Credit Agreement dated as of July 23, 2026, by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors, Bank of America, N.A., as Administrative Agent and the lenders party thereto (Incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K (SEC File No. 001-37389) filed July 28, 2026)
31.1
Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (FILED HEREWITH)
31.2
Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (FILED HEREWITH)
32.1
Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (FURNISHED HEREWITH)
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income, (iii) the Consolidated Statements of Shareholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) related notes to these financial statements, tagged as blocks of text and in detail (FILED HEREWITH)
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted as Inline XBRL and contained in Exhibit 101
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
By:
/s/ Justin G. Knight
Date: August 5, 2026
Justin G. Knight,
Chief Executive Officer
(Principal Executive Officer)
/s/ Elizabeth S. Perkins
Elizabeth S. Perkins,
Chief Financial Officer
(Principal Financial and Principal Accounting Officer)