American Resort Earnings Properties REIT LP Publicizes Q3 2023 Outcomes and Initiatives to Strengthen Monetary Place and Protect Unitholder Worth

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All quantities introduced on this information launch are in United States {dollars} (“U.S. {dollars}”) except in any other case indicated.

VANCOUVER, British Columbia, Nov. 07, 2023 (GLOBE NEWSWIRE) — American Resort Earnings Properties REIT LP (“AHIP”, or the “Firm”) (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB. V), as we speak introduced its monetary outcomes for the three and 9 months ended September 30, 2023.

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AHIP introduced as we speak quite a lot of initiatives centered on strengthening the Firm’s monetary place and preserving unitholder worth towards the backdrop of a difficult working and macroeconomic atmosphere. AHIP’s working challenges are primarily attributable to increased working bills and a decline in year-over-year occupancy. The macroeconomic situations stay tough, with elevated inflation, increased rates of interest and rising dangers of enterprise and client demand. The Firm is addressing these points, and the strategic initiatives summarized beneath are meant to enhance liquidity, tackle near-term debt maturities, and supply the Firm with monetary stability. 

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“Circumstances throughout the business are difficult, with value and working margin pressures rising over latest quarters. Extra not too long ago, total demand has additionally decreased, which is anticipated to proceed within the medium time period.” mentioned Jonathan Korol, CEO. “In opposition to this difficult backdrop, the Board and administration staff are taking quite a lot of decisive actions throughout the enterprise to protect money, improve monetary stability and defend long-term worth for our unitholders. These actions embody an modification and extension of our revolving credit score facility and sure time period loans, a discount and deferral of lodge administration charges, and short-term suspension of the distribution. We even have an executable plan to handle near-term debt obligations.”

Mr. Korol added: “AHIP’s enterprise is a diversified portfolio of premium branded select-service lodges with a centered working mannequin that we consider will generate long-term worth for unitholders. The steps we’re taking now will strengthen our liquidity and steadiness sheet to make sure we’re positioned to learn when the working and macroeconomic atmosphere improves for the business. We are going to proceed to fastidiously monitor business situations and working efficiency, whereas contemplating additional strategic alternatives to ship worth over the long run.”

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2023 THIRD QUARTER HIGHLIGHTS

• Diluted FFO per unit⁽¹⁾ and normalized diluted FFO per unit⁽¹⁾ have been $0.17 and $0.11, respectively, for the third quarter of 2023, in comparison with diluted FFO per unit of $0.13 for a similar interval of 2022.
• Occupancy⁽¹⁾ was 71.5% for the third quarter of 2023, a lower of 60 foundation factors (“bps”) in comparison with 72.1% for a similar interval of 2022.
• ADR⁽¹⁾ elevated 4.7% to $133 for the third quarter of 2023, in comparison with $127 for a similar interval of 2022.
• RevPAR⁽¹⁾ elevated 3.3% to $95 for the third quarter of 2023, in comparison with $92 for a similar interval of 2022.
• Income decreased 3.3% to $73.7 million for the third quarter of 2023, in comparison with $76.2 million for a similar interval in 2022.
• NOI⁽¹⁾ and normalized NOI⁽¹⁾ have been $22.6 million and $23.1 million, respectively, for the third quarter of 2023, decreases of 8.5% and 6.5%, respectively, in comparison with NOI of $24.7 million for a similar interval in 2022.
• Modification and extension of AHIP’s revolving credit score facility and sure time period loans.
• Modification of the grasp lodge administration settlement with diminished and deferred charges.
• Short-term suspension of month-to-month money distribution efficient November 2023 to reinforce liquidity; the beforehand introduced October 2023 distribution of $0.015 per unit will likely be paid on November 15, 2023.

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^{(1)   Non-IFRS and different monetary measures. See “NON-IFRS AND OTHER FINANCIAL MEASURES” part of this information launch.}

2023 THIRD QUARTER REVIEW

GROWTH IN ADR AND REVPAR, DECLINE IN OCCUPANCY

For the three months ended September 30, 2023, ADR elevated 4.7% to $133. The rise in ADR was partially offset by the lower of 60 bps in occupancy, which is primarily attributable to decrease demand on the prolonged keep and choose service properties. General, improved ADR resulted in a rise of three.3% in RevPAR, in comparison with the identical interval in 2022.

This result’s attributable to enhancements within the company and group traveler segments, sustained demand from leisure vacationers, in addition to the disposition of properties with decrease than portfolio common RevPAR. The flexibility to manage and handle each day charges is a key benefit of the lodging sector, which has enabled AHIP to attain robust development in ADR, partially mitigating the consequences of rising labor prices and common inflationary pressures impacting the portfolio.

NOI⁽¹⁾, NOI MARGIN⁽¹⁾
AND FFO PER UNIT⁽¹⁾

NOI and normalized NOI have been $22.6 million and $23.1 million, respectively, for the three months ended September 30, 2023, decreases of 8.5% and 6.5%, respectively, in comparison with NOI of $24.7 million for a similar interval in 2022. For the three months ended September 30, 2023, normalized NOI included $0.5 million enterprise interruption insurance coverage proceeds because of the weather-related harm at a number of lodge properties in late December 2022. NOI margin was 30.6% within the present quarter, a lower of 180 bps in comparison with the identical interval in 2022. The decreases in NOI and NOI margin have been as a result of decline in income because of fewer properties within the portfolio, decrease occupancy, and better working bills because of value inflation, labor shortages, and better property insurance coverage premiums. Common inflation resulted in increased prices of working provides and better utilities bills. Shortages within the total U.S. labor market resulted in elevated room labor bills because of extra time, increased wages for workers and dependency on contract labor. The rise within the annual premium for property insurance coverage efficient June 1, 2023 is roughly $3.5 million. 

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Diluted FFO per unit and normalized diluted FFO per unit have been $0.17 and $0.11 for the third quarter of 2023, respectively, in comparison with diluted FFO per unit of $0.13 for a similar interval in 2022. Normalized diluted FFO per unit within the present quarter excluded non-recurring anticipated insurance coverage proceeds of $5.4 million because of weather-related property harm at a number of lodge properties in late December 2022. The lower in normalized diluted FFO per unit was primarily because of decrease NOI within the present quarter.

^{(1)   Non-IFRS and different monetary measures. See “NON-IFRS AND OTHER FINANCIAL MEASURES” part of this information launch.}

INSURANCE AND WEATHER-RELATED ISSUES

Throughout the last week of December 2022, excessive chilly climate induced harm at a number of lodge properties. For property harm, AHIP expects many of the complete value of remediation and rebuilding to be reimbursed from insurance coverage insurance policies. For enterprise interruption, AHIP expects to recuperate many of the misplaced revenue on these properties from insurance coverage insurance policies for the interval from late December 2022 till the broken lodge properties grew to become absolutely operational in September 2023.

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Of the lodge properties broken, two had a big variety of rooms out of order. On the Residence Inn Neptune in New Jersey, all 105 rooms have been out of order from December 25, 2022. Of the 105 rooms, 72 rooms returned to service in Might 2023; 19 rooms returned to service in June 2023; and the lodge absolutely returned to service in September 2023.

On the Courtyard Wall in New Jersey, all 113 rooms have been out of order from December 25, 2022. Of the 113 rooms, 54 rooms returned to service in mid-January 2023; 31 rooms returned to service in June 2023, and the lodge absolutely returned to service in September 2023.

Because of the weather-related harm, the full write-down of the prices of those lodge properties is $13.8 million as of September 30, 2023. That is comprised of remediation prices of $3.0 million and rebuilding prices of $10.8 million. AHIP recorded a $4.8 million non-cash write-down within the third quarter of 2023, along with the $9.0 million non-cash write-down recorded within the fourth quarter of 2022 and the primary half of 2023. As of September 30, 2023, AHIP had incurred $13.8 million in prices to remediate and rebuild the broken lodge properties.

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For the 9 months ended September 30, 2023, AHIP has recorded complete anticipated insurance coverage proceeds of $16.3 million, which is comprised of $12.9 million for the property harm declare, and $3.4 million for the enterprise interruption declare. AHIP has acquired $4.3 million of complete anticipated insurance coverage proceeds to this point and expects to obtain further insurance coverage proceeds within the fourth quarter of 2023.

Because of the claims famous above, increased substitute prices and usually increased market premiums, AHIP accomplished its property insurance coverage renewal efficient June 1, 2023 with a big improve in premiums in comparison with the earlier coverage. On an annual foundation, the rise from prior 12 months is roughly $3.5 million, which can improve bills and cut back earnings.

LEVERAGE AND LIQUIDITY

Leverage Ratio  

Debt to gross e-book worth as at September 30, 2023 decreased by 150 bps to 51.1% in comparison with 52.6% as at December 31, 2022. AHIP has made regular progress on this measure, whereas Debt to EBITDA has been comparatively steady during the last twelve months.

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Money and Borrowing Base

As at September 30, 2023, AHIP had $32.4 million in out there liquidity, in comparison with $24.1 million as at December 31, 2022. The out there liquidity of $32.4 million was comprised of an unrestricted money steadiness of $17.4 million and borrowing availability of $15.0 million underneath the revolving credit score facility. AHIP has a further restricted money steadiness of $33.9 million as at September 30, 2023. On November 7, 2023, the borrowing availability underneath the revolving credit score facility was decreased to zero till the efficient date of the value determinations in accordance with the Sixth Modification (as outlined beneath).

CAPITAL RECYCLING

AHIP is reviewing methods for divesting property to recycle proceeds into increased return property in additional engaging markets and cut back debt.

In 2022, AHIP accomplished the strategic inclinations of seven non-core lodge properties for complete gross proceeds of $47.5 million. These inclinations i) allowed AHIP to keep away from future PIP investments that might not have met returns out there elsewhere within the portfolio; ii) elevated portfolio RevPAR by roughly $3, and iii) improved AHIP’s Debt to EBITDA ratio by roughly 0.4x.

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In June 2023, AHIP accomplished the disposition of a non-core lodge property for gross proceeds of $11.7 million. As a situation of the fifth modification to the revolving credit score facility and sure time period loans, AHIP made a reimbursement of $1.8 million (50% of the online proceeds of this disposition) to the time period mortgage. This reimbursement resulted in a everlasting discount of the time period mortgage, which diminished the full borrowing availability from $200.0 million to $198.2 million.

SAME PROPERTY KPI

The next desk summarizes key efficiency indicators (“KPIs”) for the portfolio for the 5 most up-to-date quarters with a comparability to the identical interval within the prior 12 months.

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Similar property ADR elevated by 3.1% to $133 within the present quarter in comparison with $129 in the identical interval of 2022. Similar property occupancy decreased by 220 bps to 71.5% within the present quarter, which included occupancy declines of 393 bps in July, 191 bps in August and 87 bps in September, all in comparison with the identical durations in 2022. The lower in occupancy is primarily attributable to decrease demand on the prolonged keep and choose service properties. Preliminary outcomes for October 2023 point out occupancy is 130 bps beneath the identical interval in 2022, and this demand degree is anticipated to proceed within the fourth quarter of 2023.

Similar property NOI margin decreased by 270 bps to 30.6% for the third quarter of 2023, in comparison with the identical interval of 2022. Similar property NOI margin decreased because of increased working bills because of inflation and labor shortages. Common inflation resulted in increased prices of working provides and better utilities bills. Shortages within the total U.S. labor market resulted in elevated room labor bills because of extra time, increased wages for workers and dependency on contract labor.

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In Q3 2023, Q3 and This autumn 2022, the identical property ADR, occupancy and RevPAR calculations excluded the seven lodges bought in 2022 and the one lodge bought in 2023. The identical property NOI margin calculation for the 5 most up-to-date quarters excluded the seven lodges bought in 2022 and the one lodge bought in 2023.

In Q1 and Q2 2023, the identical property ADR, occupancy and RevPAR calculations excluded the seven lodges bought in 2022, the one lodge bought in 2023, and Residence Inn Neptune and Courtyard Wall in New Jersey as these two lodges had restricted availability because of remediation and rebuilding after the weather-related harm in late December 2022.

SELECTED INFORMATION

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^{(1)   Non-IFRS and different monetary measures. See “NON-IFRS AND OTHER FINANCIAL MEASURES” part of this information launch.}

SELECTED INFORMATION

^{(1)   Non-IFRS and different monetary measures. See “NON-IFRS AND OTHER FINANCIAL MEASURES” part of this information launch.}

2023 THIRD QUARTER OPERATING RESULTS

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^{(1)   Non-IFRS and different monetary measures. See “NON-IFRS AND OTHER FINANCIAL MEASURES” part of this information launch.}

INITIATIVES TO STRENGTHEN FINANCIAL POSITION AND PRESERVE UNITHOLDER VALUE

The Board of Administrators (the “Board”) and administration are implementing a plan to strengthen AHIP’s monetary place and to protect unitholder worth. Initiatives, each deliberate and underway, are outlined beneath.

Modification and Extension of Revolving Credit score Facility and Time period Loans

On November 7, 2023, AHIP entered into an modification to its revolving credit score facility (the “RCF”) and sure time period loans (the “Sixth Modification”).

The entire facility measurement underneath the Sixth Modification is $198.2 million. The preliminary maturity of the revolving portion of the credit score facility has been prolonged from December 3, 2023 to December 3, 2024, topic to situations set forth within the Sixth Modification to be glad previous to December 3, 2023. The Sixth Modification contains an possibility to increase the maturity of the time period mortgage and RCF to June 2025, topic to discount of the combination most facility measurement to $148.2 million from and after December 3, 2024. The mounted cost protection ratio has been diminished to 1.1x till the tip of 2024.

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Pursuant to the Sixth Modification, the RCF availability is primarily restricted by revised calculations based mostly on the lesser of an implied debt service protection ratio and a mortgage to worth (“LTV”) check. As a situation to the preliminary extension to December 3, 2024, the LTV check will likely be based mostly on new lodge value determinations. The borrowing availability is topic to a most of 67.5% LTV based mostly on the brand new value determinations, with time permitted to cut back the quantity excellent ought to present borrowings exceed 67.5% LTV. Particularly, from the efficient date of the brand new value determinations and if relevant for every threshold, AHIP can have three enterprise days to pay down any extra borrowings to 75% LTV, 90 days to cut back to 72.5% LTV, and an additional 90 days to cut back to 67.5% LTV. Administration expects the outcomes of the value determinations to grow to be efficient in late November 2023. Any such paydowns which can be required are anticipated to be funded by way of a mixture of money available and/or internet proceeds from asset gross sales. The borrowing availability underneath the RCF has been diminished to zero pending the end result of the above famous value determinations and subsequent software of the LTV check underneath the Sixth Modification.

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Below the Sixth Modification, the covenants governing distribution funds have been revised and are actually topic to the satisfaction of a extra restrictive FFO payout ratio threshold, calculated on a trailing twelve-months foundation on a sliding scale based mostly on the mounted cost protection ratio.

For additional particulars, see a replica of the Sixth Modification, which has been filed underneath AHIP’s profile on SEDAR+ at www.sedarplus.com.

Plan to Tackle Close to Time period Mortgage Maturities

AHIP intends to proceed with quite a lot of transactions that can collectively tackle the entire Firm’s near-term debt maturities, whereas additionally creating modest enhancements in ADR, RevPAR and leverage metrics.

AHIP’s has 91.7% of its debt at mounted rates of interest or successfully mounted by rate of interest swaps till November 30, 2023. Upon the expiry of the rate of interest swaps, the share of AHIP’s debt at mounted rates of interest will lower to 71%. The notional worth of the rate of interest swaps is $130.0 million which can expire on November 30, 2023. Because of this expiry, on the present secured in a single day financing fee (“SOFR”) of 5.3%, the incremental annual curiosity expense is anticipated to be roughly $5.2 million. The precise improve in curiosity expense will likely be depending on future SOFR.

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The business mortgage-backed securities (“CMBS”) debt maturities within the fourth quarter of 2023 are $16.3 million for 2 lodges (two loans) in Pennsylvania, and within the first half of 2024 are $22.0 million for 4 lodges (one mortgage) in Virginia.

To handle the This autumn 2023 CMBS mortgage maturities of $16.3 million, AHIP intends to divest of two non-core properties, particularly:

• The sale of 1 Pennsylvania lodge by the tip of the primary quarter of 2024, which will likely be used to fulfill the $7.0 million non-recourse mortgage; and
• A managed foreclosures course of for one Pennsylvania lodge, which can lead to a discharge of $9.3 million in non-recourse mortgage debt.

To handle the Q2 2024 CMBS mortgage maturity of $22.0 million, AHIP intends to:

• Promote one lodge within the Virginia portfolio by the tip of the primary quarter of 2024, which will likely be used to partially fulfill the non-recourse mortgage; and
• Refinance the steadiness of the mortgage with the remaining three lodges within the Virginia portfolio.

Modification of the Grasp Resort Administration Settlement with Lowered and Deferred Charges

On September 30, 2023, with a retroactive efficient date of July 1, 2023, AHIP entered into a 3rd modification to its grasp lodge administration settlement with One Lodging Administration LLC (an affiliate of Aimbridge Hospitality LLC) (the “Modification”), with an estimated annual financial savings for the primary three years following the modification of roughly $3.7 million.

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In accordance with the Modification, the administration price on sure lodge properties has been diminished or deferred. The discount of administration charges is estimated to supply roughly $0.3 million of money financial savings every year, and the deferral of administration charges is estimated to supply roughly $3.4 million of money financial savings on common every year from July 1, 2023 to June 30, 2026. The charges within the years 2027 by way of 2032 will likely be barely increased to offset the price deferral within the first three years.

The modification to the grasp lodge administration settlement additionally contains waivers of all or a portion of termination charges for sure lodges, in addition to a restricted exception to the exclusivity of the grasp lodge supervisor in respect of the acquisition of proprietor operated lodges, topic to sure situations. For additional particulars, see a replica of the modification to the grasp lodge administration settlement, which has been filed underneath AHIP’s profile on SEDAR+ at www.sedarplus.com.

Decreasing Money Portion of Board Compensation

Efficient October 1, 2023, the vast majority of the Board’s compensation will likely be paid in AHIP RSUs which will likely be priced and vest within the type of Items on the finish of every fiscal quarter. Beforehand, Board compensation was paid completely in money.

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Short-term Suspension of U.S. Greenback Distribution

Since February 2022, AHIP’s distribution coverage offered for the cost of normal month-to-month U.S. greenback distributions at an annual fee of $0.18 per unit (month-to-month fee of $0.015 per unit). The Board and administration have accomplished an evaluation of this coverage within the context of latest and forecast working outcomes, business and financial situations, rates of interest for debt refinancing, the final financing atmosphere, future compliance with the adjusted FFO payout ratio covenant within the Sixth Modification, and decided that the long-term pursuits of AHIP, its unitholders, and different stakeholders are greatest served by a brief suspension of month-to-month distributions.

The modification of the distribution coverage is anticipated to supply a further $14.2 million of money yearly, which is anticipated for use to strengthen the Firm’s steadiness sheet and liquidity, supporting the long-term enhancement of unitholder worth.

The Board, with the help of administration, will proceed to assessment AHIP’s distribution coverage on a quarterly foundation. The beforehand introduced October 2023 distribution of $0.015 per unit will likely be paid on November 15, 2023 to unitholders of file as of the shut of enterprise on October 31, 2023.

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FINANCIAL INFORMATION

This information launch ought to be learn together with AHIP’s unaudited condensed consolidated interim monetary statements, and administration’s dialogue and evaluation for the three and 9 months ended September 30, 2023 and 2022, which can be out there on AHIP’s web site at www.ahipreit.com, and underneath AHIP’s profile on SEDAR+ at www.sedarplus.com.

Q3 2023 CONFERENCE CALL

Administration will host a webcast and convention name at 8:00 a.m. Pacific time on Wednesday, November 8, 2023, to debate the monetary and operational outcomes for the three and 9 months ended September 30, 2023 and 2022.

To take part within the convention name, members ought to register on-line through AHIP’s web site. A dial-in and distinctive PIN will likely be offered to hitch the decision. Contributors are requested to register a minimal of quarter-hour earlier than the beginning of the decision. An audio webcast of the convention name can also be out there, each dwell and archived, on the Occasions & Displays web page of AHIP’s web site: www.ahipreit.com.

ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP

American Resort Earnings Properties REIT LP (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.V), or AHIP, is a restricted partnership shaped to put money into lodge actual property properties throughout america. AHIP’s portfolio of premium branded, select-service lodges are positioned in secondary metropolitan markets that profit from various and steady demand. AHIP lodges function underneath manufacturers affiliated with Marriott, Hilton, IHG and Selection Accommodations by way of license agreements. AHIP’s long-term goals are to construct on its confirmed observe file of profitable funding, ship month-to-month U.S. greenback denominated distributions to unitholders, and generate worth by way of the continued development of its diversified lodge portfolio. Extra info is obtainable at www.ahipreit.com.

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NON-IFRS AND OTHER FINANCIAL MEASURES
Administration believes the next non-IFRS monetary measures, non-IFRS ratios, capital administration measures and supplementary monetary measures are related measures to watch and consider AHIP’s monetary and working efficiency. These measures and ratios shouldn’t have any standardized that means prescribed by IFRS and are subsequently unlikely to be corresponding to related measures introduced by different issuers. These measures and ratios are included to supply traders and administration further info and different strategies for assessing AHIP’s monetary and working outcomes and shouldn’t be thought of in isolation or as an alternative to efficiency measures ready in accordance with IFRS.

NON-IFRS FINANCIAL MEASURES:
FFO: FFO measures working efficiency and is calculated in accordance with Actual Property Affiliation of Canada’s (“REALPAC”) definition. FFO – primary is calculated by adjusting revenue (loss) and complete revenue (loss) for depreciation and amortization, achieve or loss on disposal of property, IFRIC 21 property taxes, truthful worth achieve or loss, impairment of property, deferred revenue tax, and different relevant gadgets. FFO – diluted is calculated as FFO – primary plus the curiosity, accretion, and amortization on convertible debentures if convertible debentures are dilutive. Probably the most comparable IFRS measure to FFO is internet and complete revenue (loss), for which a reconciliation is offered on this information launch.

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AFFO: AFFO is outlined as a recurring financial earnings measure and calculated in accordance with REALPAC’s definition. AFFO – primary is calculated as FFO – primary much less upkeep capital expenditures. AFFO – diluted is calculated as FFO – diluted much less upkeep capital expenditures. Probably the most comparable IFRS measure to AFFO is internet and complete revenue (loss), for which a reconciliation is offered on this information launch.

Normalized FFO: calculated as FFO excluding non-recurring gadgets. For the three months ended September 30, 2023, normalized FFO is calculated as FFO excluding the non-recurring anticipated insurance coverage proceeds of $5.4 million because of weather-related property harm at a number of lodge properties in late December 2022. For the 9 months ended September 30, 2023, normalized FFO is calculated as FFO excluding the non-recurring anticipated insurance coverage proceeds of $12.9 million because of weather-related property harm at a number of lodge properties in late December 2022. For the 9 months ended September 30, 2022, normalized FFO is calculated as FFO excluding the non-recurring achieve on debt settlement of $2.3 million, and $2.2 million of different revenue, which is primarily comprised of $1.0 million enterprise interruption insurance coverage proceeds for income loss because of COVID-19, and $0.7 million of presidency grant for income loss because of COVID-19. Probably the most comparable IFRS measure to normalized FFO is internet and complete revenue (loss), for which a reconciliation is offered on this information launch.

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Internet Working Earnings (“NOI”): calculated by adjusting revenue from working actions for depreciation and amortization, and IFRIC 21 property taxes. Probably the most comparable IFRS measure to NOI is revenue from working actions, for which a reconciliation is offered on this information launch.

Normalized NOI: calculated as NOI adjusting for normalized gadgets. For the three and 9 months ended September 30, 2023, normalized NOI included $0.5 million and $3.4 million enterprise interruption insurance coverage proceeds, respectively, because of weather-related property harm at a number of lodge properties in late December 2022. Probably the most comparable IFRS measure to normalized NOI is revenue from working actions, for which a reconciliation is offered on this information launch.

Resort EBITDA: calculated by adjusting revenue from working actions for depreciation and amortization, IFRIC 21 property taxes and lodge administration charges. Probably the most comparable IFRS measure to lodge EBITDA is revenue from working actions, for which a reconciliation is offered on this information launch.

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EBITDA: calculated by adjusting revenue from working actions for depreciation and amortization, IFRIC 21 property taxes, lodge administration charges and common administrative bills. The sum of administration charges for lodge and common administrative bills is the same as company and administrative bills within the Monetary Statements. Probably the most comparable IFRS measure to EBITDA is revenue from working actions, for which a reconciliation is offered on this information launch.

Debt: calculated because the sum of time period loans and revolving credit score facility, the face worth of convertible debentures, unamortized portion of debt financing prices, authorities assured mortgage, lease liabilities and unamortized portion of mark-to-market changes. Probably the most comparable IFRS measure to debt is complete liabilities, for which a reconciliation is offered on this information launch.

Gross e-book worth: calculated because the sum of complete property, accrued depreciation and impairment on property, buildings and gear, and accrued amortization on intangible property. Probably the most comparable IFRS measure to gross e-book worth is complete property, for which a reconciliation is offered on this information launch.

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Curiosity expense: calculated by adjusting finance prices for achieve or loss on debt settlement, amortization of debt financing prices, accretion of debenture legal responsibility, amortization of debenture prices, dividends on sequence B most well-liked shares of US REIT and amortization of mark-to-market changes as a result of curiosity expense excludes sure non-cash accounting gadgets and dividends on most well-liked shares. Probably the most comparable IFRS measure to curiosity expense is finance prices, for which a reconciliation is offered on this information launch.

NON-IFRS RATIOS:

FFO per unit – primary/diluted: calculated as FFO – primary/diluted divided by the weighted common variety of models excellent – primary/diluted respectively for the reporting durations. 

Normalized FFO per unit – primary/diluted: calculated as normalized FFO – primary/diluted divided by the weighted common variety of models excellent – primary/diluted respectively for the reporting durations. 

AFFO per unit – primary/diluted:
calculated as AFFO – primary/diluted divided by the weighted common variety of models excellent – primary/diluted respectively for the reporting durations. 

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FFO payout ratio – primary,
trailing twelve months: calculated as complete distributions declared to unitholders – primary, divided by complete FFO – primary, for the twelve months ended September 30, 2023, and 2022.

FFO payout ratio – diluted,
trailing twelve months: calculated as complete distributions declared to unitholders – diluted, divided by complete FFO – diluted, for the twelve months ended September 30, 2023, and 2022.

AFFO payout ratio – primary,
trailing twelve months: calculated as complete distributions declared to unitholders – primary, divided by complete AFFO – primary, for the twelve months ended September 30, 2023, and 2022.

AFFO payout ratio – diluted,
trailing twelve months: calculated as complete distributions declared to unitholders – diluted, divided by complete AFFO – diluted, for the twelve months ended September 30, 2023, and 2022.

NOI margin: calculated as NOI divided by complete income.

Resort EBITDA margin: calculated as lodge EBITDA divided by complete income.

EBITDA margin: calculated as EBITDA divided by complete income.

CAPITAL MANAGEMENT MEASURES:

Debt to gross e-book worth: calculated as debt divided by gross e-book worth. Debt to gross e-book worth is a main measure of capital administration and leverage.

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Debt to EBITDA: calculated as debt divided by the trailing twelve months of EBITDA. Debt to EBITDA measures the quantity of revenue generated and out there to pay down debt earlier than protecting curiosity, taxes, depreciation, and amortization bills.

Curiosity protection ratio: calculated as EBITDA for the trailing twelve months divided by curiosity expense for the trailing twelve months interval. The curiosity protection ratio measures AHIP’s means to satisfy required curiosity funds associated to its excellent debt and dividends on the sequence B most well-liked shares of US REIT.

SUPPLEMENTARY FINANCIAL MEASURES:

Occupancy is a serious driver of room income in addition to meals and beverage revenues. Fluctuations in occupancy are accompanied by fluctuations in most classes of variable lodge working bills, together with housekeeping and different labor prices. ADR additionally helps to drive room income with restricted impression on different revenues. Fluctuations in ADR are accompanied by fluctuations in restricted classes of lodge working bills, reminiscent of franchise charges and bank card commissions, since variable lodge working bills, reminiscent of labor prices, usually don’t improve or lower correspondingly. Thus, will increase in RevPAR attributable to will increase in occupancy sometimes cut back EBITDA and EBITDA Margins, whereas will increase in RevPAR attributable to will increase in ADR sometimes lead to will increase in EBITDA and EBITDA Margins.

Occupancy: calculated as complete variety of lodge rooms bought divided by complete variety of rooms out there for the reporting durations. Occupancy is a metric generally used within the lodge business to measure the utilization of lodges’ out there capability. In Q1 and Q2 2023, the occupancy calculation excluded Residence Inn Neptune and Courtyard Wall in New Jersey as these two lodges had restricted availability because of remediation and rebuilding after the weather-related harm in late December 2022.

Common each day fee (“ADR”): calculated as complete room income divided by complete variety of rooms bought for the reporting durations. ADR is a metric generally used within the lodge business to point the typical income earned per occupied room in a given time interval. In Q1 and Q2 2023, the ADR calculation excluded Residence Inn Neptune and Courtyard Wall in New Jersey as these two lodges had restricted availability because of remediation and rebuilding after the weather-related harm in late December 2022.

Income per out there room (“RevPAR”): calculated as occupancy multiplied by ADR for the reporting durations. In Q1 and Q2 2023, the RevPAR calculation excluded Residence Inn Neptune and Courtyard Wall in New Jersey as these two lodges had restricted availability because of remediation and rebuilding after the weather-related harm in late December 2022.

Similar property occupancy, ADR, RevPAR, NOI and NOI margin: measured for properties owned by AHIP for each the present reporting durations and the identical durations in 2022. In Q1 and Q2 2023, similar property ADR, occupancy and RevPAR calculations excluded the seven lodges bought in 2022, the one lodge bought in 2023, and Residence Inn Neptune and Courtyard Wall in New Jersey as these two lodges had restricted availability because of remediation and rebuilding after the weather-related harm in late December 2022. In Q3 2023, Q3 and This autumn 2022, similar property ADR, occupancy and RevPAR calculations excluded the seven lodges bought in 2022 and the one lodge bought in 2023. Similar property NOI margin calculation for the 5 most up-to-date quarters excluded the seven lodges bought in 2022 and the one lodge bought in 2023.

NON-IFRS RECONCILIATION

The next desk reconciles FFO to revenue (loss) and complete revenue (loss), probably the most comparable IFRS measure as introduced within the monetary statements:

RECONCILIATION OF FFO TO AFFO

DEBT TO EBITDA

The reconciliation of revenue from working actions to NOI, lodge EBITDA and EBITDA is proven beneath:

The reconciliation of NOI to normalized NOI is proven beneath:

The reconciliation of finance prices to curiosity expense is proven beneath:

For info on probably the most instantly comparable IFRS measures, composition of the measures, an outline of how AHIP makes use of these measures, and an evidence of how these measures present helpful info to traders, please check with AHIP’s administration dialogue and evaluation for the three and 9 months ended September 30, 2023 and 2022, out there on AHIP’s web site at www.ahipreit.com, and underneath AHIP’s profile on SEDAR+ at www.sedarplus.com.

FORWARD-LOOKING INFORMATION

Sure statements on this information launch could represent “forward-looking info” and “monetary outlook” inside the that means of relevant securities legal guidelines. Ahead-looking info and monetary outlook usually may be recognized by phrases reminiscent of “anticipate”, “consider”, “proceed”, “anticipate”, “estimates”, “intend”, “could”, “outlook”, “goal”, “plans”, “ought to”, “will” and related expressions suggesting future outcomes or occasions. Ahead-looking info and monetary outlook embody, however should not restricted to, statements made or implied referring to the goals of AHIP, AHIP’s methods to attain these goals and AHIP’s beliefs, plans, estimates, projections and intentions and related statements regarding anticipated future occasions, outcomes, circumstances, efficiency, or expectations that aren’t historic details. Ahead-looking info and monetary outlook on this information launch contains, however shouldn’t be restricted to, statements with respect to: AHIP’s expectations with respect to its future efficiency; AHIP’s strategic initiatives and the meant outcomes thereof, together with improved liquidity, addressing near-term debt maturities and offering AHIP with monetary stability and delivering worth to unitholder over the long run; AHIP’s expectation total decreases in demand will proceed within the medium time period, and sure particular expectations with respect to fourth quarter of 2023; AHIP’s expectation that many of the estimated quantity of weather-related harm to buildings and gear of sure lodge properties will likely be lined by insurance coverage, and AHIP’s expectation with respect to the restoration of many of the misplaced revenue from these properties by way of enterprise interruption insurance coverage; AHIP’s expectations with respect to the timing of the receipt of such insurance coverage proceeds; the expectation that elevated insurance coverage premiums will improve bills and cut back earnings; AHIP’s assessment of methods for divesting property to recycle proceeds into increased return property in additional engaging markets and cut back debt; AHIP’s plans to make use of internet proceeds from asset gross sales to cut back debt; AHIP’s analysis of development and divesture alternatives; AHIP’s expectations with respect to the efficient timing of the outcomes of the value determinations required by the Sixth Modification, and AHIP’s expectation that any paydowns which can be required will likely be funded by way of a mixture of money available and/or internet proceeds from asset gross sales; AHIP’s meant methods for near-term debt maturities, together with deliberate gross sales of property and mortgage refinancing; AHIP’s expectations as to the monetary impression of the expiry of rate of interest swaps for sure time period loans; the estimated financial savings because of reductions and deferrals of administration charges underneath the grasp lodge administration settlement in addition to elevated charges in sure future years when deferred charges grow to be payable; cost of the vast majority of the Board’s compensation in RSUs; the estimated financial savings from the short-term suspension of money distributions and expectation that such modification to the distribution coverage will strengthen AHIP’s steadiness sheet and liquidity and assist long-term enhancement of unitholder worth; the assertion that the Board will proceed to assessment AHIP’s distribution coverage on a quarterly foundation; the assertion that the beforehand introduced October 2023 distribution will likely be paid on November 15, 2023; and AHIP’s said long-term goals.

Though the forward-looking info and monetary outlook contained on this information launch are based mostly on what AHIP’s administration believes to be cheap assumptions, AHIP can not guarantee traders that precise outcomes will likely be in keeping with such info. Ahead-looking info is predicated on quite a lot of key expectations and assumptions made by AHIP, together with, with out limitation: inflation, labor shortages, and provide chain disruptions will negatively impression the U.S. financial system, U.S. lodge business and AHIP’s enterprise; AHIP will proceed to have enough funds to satisfy its monetary obligations; AHIP will likely be ready generate enough funds to satisfy any paydown obligations underneath the brand new LTV covenants set forth within the Sixth Modification; AHIP’s methods with respect to completion of capital initiatives, liquidity, addressing near-term debt maturities, divestiture of non-core property and acquisitions will likely be profitable and obtain their meant results; estimated financial savings from the modification to the grasp lodge administration settlement are based mostly on assumptions about future lodge revenues and sure bills; capital initiatives will likely be accomplished on time and on finances; AHIP will obtain insurance coverage proceeds in an quantity in keeping with AHIP’s estimates in respect of its weather-damaged properties; AHIP will proceed to have good relationships with its lodge model companions; capital markets will present AHIP with available entry to fairness and/or debt financing on phrases acceptable to AHIP, together with the power to refinance maturing debt because it turns into due on phrases acceptable to AHIP; AHIP’s future degree of indebtedness and its future development potential will stay in keeping with AHIP’s present expectations; and AHIP will obtain its long run goals.

Ahead-looking info and monetary outlook contain vital dangers and uncertainties and shouldn’t be learn as ensures of future efficiency or outcomes as precise outcomes could differ materially from these expressed or implied in such forward-looking info and monetary outlook, accordingly undue reliance shouldn’t be positioned on such forward-looking info and monetary outlook. These dangers and uncertainties embody, amongst different issues, dangers associated to: AHIP could not obtain its anticipated efficiency ranges in 2023 and past; inflation, labor shortages, provide chain disruptions; AHIP’s insurance coverage claims with respect to its climate broken properties could also be denied in complete or partly; AHIP’s model companions could impose revised service requirements and capital necessities that are hostile to AHIP; property enchancment plan renovations could not start or full in accordance with presently anticipated timing and will endure from elevated materials and labor prices; AHIP’s strategic initiatives with respect to liquidity, addressing near-term debt maturities and offering AHIP with monetary stability might not be profitable and will not obtain their meant outcomes; AHIP’s methods for divesting property to recycle proceeds into increased return property in additional engaging markets and cut back debt might not be profitable; financial savings from the amendments to the grasp lodge administration settlement could also be lower than anticipated; AHIP might not be profitable in decreasing its leverage; the value determinations required underneath the Sixth Modification could report decrease than anticipated values which can set off paydown necessities underneath the Sixth Modification, and if such pay-downs are required, there isn’t any assure that AHIP can have enough money available or be capable to generate enough internet proceeds to satisfy these necessities, which, with out aid from the lender, would put AHIP in default underneath the Sixth Modification; there isn’t any assure that month-to-month distributions will likely be reinstated, and if reinstated, as to the timing thereof or what the quantity of the month-to-month distribution will likely be; the suspension of month-to-month distributions is anticipated to negatively impression the market value of AHIP’s models and debentures; AHIP could not be capable to refinance debt obligations as they grow to be due or could achieve this on phrases much less favorable to AHIP than underneath AHIP’s present mortgage agreements; AHIP could not be capable to renew or changing its rate of interest swaps on cheap phrases or in any respect, which can result in elevated curiosity expense; common financial situations and client confidence; the expansion within the U.S. lodge and lodging business; costs for AHIP’s models and its debentures; liquidity; tax dangers; means to entry debt and capital markets; financing dangers; modifications in rates of interest; the monetary situation of, and AHIP’s relationships with, its exterior lodge supervisor and franchisors; actual property dangers, together with environmental dangers; the diploma and nature of competitors; means to amass accretive lodge investments; means to combine new lodges; environmental issues; elevated geopolitical instability; and modifications in laws and AHIP could not obtain its long run goals. Administration believes that the expectations mirrored within the forward-looking info and monetary outlook are based mostly upon cheap assumptions and data presently out there; nevertheless, administration can provide no assurance that precise outcomes will likely be in keeping with the forward-looking info and monetary outlook contained herein. Further details about dangers and uncertainties is contained in AHIP’s administration’s dialogue and evaluation for the three and 9 months ended September 30, 2023 and 2022, and AHIP’s annual info kind for the 12 months ended December 31, 2022, copies of which can be found on SEDAR+ at www.sedarplus.com.

To the extent any forward-looking info constitutes a “monetary outlook” inside the that means of relevant securities legal guidelines, such info is being offered to traders to help of their understanding of AHIP’s anticipated prices of remediation and renovation and anticipated proceeds of insurance coverage in respect of AHIP’s weather-damaged properties, potential money financial savings from the modification to the grasp lodge administration settlement and short-term suspension of distributions; the monetary impression on AHIP of elevated insurance coverage premiums and curiosity prices related to the expiry of curiosity swaps for sure time period loans and administration’s expectations for sure elements of AHIP’s monetary efficiency for the rest of 2023.

The forward-looking info and monetary outlook contained herein is expressly certified in its entirety by this cautionary assertion. Ahead-looking info and monetary outlook mirror administration’s present beliefs and are based mostly on info presently out there to AHIP. The forward-looking info and monetary outlook are made as of the date of this information launch and AHIP assumes no obligation to replace or revise such info to mirror new occasions or circumstances, besides as could also be required by relevant regulation.

For extra info, please contact:

Investor Relations
ir@ahipreit.com

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