Braemar Hotels & Resorts Inc. [BHR-PB] Filings

10-Q 1 bhr-20230630.htm 10-Q bhr-20230630

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, 2023


☐			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: 001-35972

BRAEMAR HOTELS & RESORTS INC.

(Exact name of registrant as specified in its charter)


Maryland						46-2488594
(State or other jurisdiction of incorporation or organization)						(IRS employer identification number)

14185 Dallas Parkway
Suite 1200
Dallas
Texas						75254
(Address of principal executive offices)						(Zip code)

(972) 490-9600

(Registrant’s telephone number, including area code)

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,” “small 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

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 Stock

BHR

New York Stock Exchange

Preferred Stock, Series B

BHR-PB

New York Stock Exchange

Preferred Stock, Series D

BHR-PD

New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Common Stock, $0.01 par value per share						65,993,893
(Class)						Outstanding at August 3, 2023

BRAEMAR HOTELS & RESORTS INC.

FORM 10-Q

FOR THE QUARTER ENDED June 30, 2023

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (unaudited)
Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022			2
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022			3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2023 and 2022			4
Condensed Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2023 and 2022			5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022			7
Notes to Condensed Consolidated Financial Statements			9
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			32
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			55
ITEM 4. CONTROLS AND PROCEDURES			56
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS			56
ITEM 1A. RISK FACTORS			57
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			57
ITEM 3. DEFAULTS UPON SENIOR SECURITIES			57
ITEM 4. MINE SAFETY DISCLOSURES			58
ITEM 5. OTHER INFORMATION			58
ITEM 6. EXHIBITS			58
SIGNATURES			60

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (unaudited)

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except share and per share amounts)


	June 30, 2023		December 31, 2022
ASSETS
Investments in hotel properties, gross	$	2,360,842	$	2,325,093
Accumulated depreciation	(470,484)		(440,492)
Investments in hotel properties, net	1,890,358		1,884,601
Cash and cash equivalents	128,025		261,541

Restricted cash	63,439		54,155
Accounts receivable, net of allowance of $200 and $339, respectively	32,864		51,448

Inventories	5,119		5,238

Prepaid expenses	18,172		7,044
Deferred costs, net	75		—
Investment in unconsolidated entity	1,699		1,689
Derivative assets	6,308		6,482
Operating lease right-of-use assets	78,917		79,449
Other assets	17,078		14,621
Intangible assets, net	3,693		3,883


Due from related parties, net	333		938
Due from third-party hotel managers	15,430		26,625

Total assets	$	2,261,510	$	2,397,714
LIABILITIES AND EQUITY
Liabilities:
Indebtedness, net	$	1,135,958	$	1,334,130

Accounts payable and accrued expenses	135,096		133,978
Dividends and distributions payable	8,917		8,184



Due to Ashford Inc.	4,558		10,005

Due to third-party hotel managers	1,579		2,096

Operating lease liabilities	60,538		60,692
Other liabilities	22,508		22,343
Derivative liabilities	165		284

Total liabilities	1,369,319		1,571,712
Commitments and contingencies (note 15)
5.50% Series B cumulative convertible preferred stock, $0.01 par value, 3,078,017 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	65,426		65,426
Series E redeemable preferred stock, $0.01 par value, 16,485,987 and 12,656,529 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	379,403		291,076
Series M redeemable preferred stock, $0.01 par value, 1,959,622 and 1,428,332 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	48,405		35,182
Redeemable noncontrolling interests in operating partnership	35,174		40,555
Equity:
Preferred stock, $0.01 par value, 80,000,000 shares authorized:
8.25% Series D cumulative preferred stock, 1,600,000 shares issued and outstanding at June 30, 2023 and December 31, 2022	16		16
Common stock, $0.01 par value, 250,000,000 shares authorized, 65,993,893 and 69,919,065 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	659		699
Additional paid-in capital	716,987		734,134
Accumulated deficit	(341,210)		(324,740)
Total stockholders’ equity of the Company	376,452		410,109
Noncontrolling interest in consolidated entities	(12,669)		(16,346)
Total equity	363,783		393,763
Total liabilities and equity	$	2,261,510	$	2,397,714

See Notes to Condensed Consolidated Financial Statements.

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
REVENUE
Rooms	$	117,137	$	112,527	$	254,664	$	217,719
Food and beverage	47,776		42,269		100,004		78,976

Other	21,794		20,098		47,340		40,079
Total hotel revenue	186,707		174,894		402,008		336,774


EXPENSES
Hotel operating expenses:
Rooms	26,705		24,134		54,063		44,318
Food and beverage	36,365		31,894		76,104		59,922
Other expenses	56,297		52,087		118,592		98,294
Management fees	5,880		5,538		12,585		9,686
Total hotel operating expenses	125,247		113,653		261,344		212,220
Property taxes, insurance and other	9,396		5,277		17,512		13,880
Depreciation and amortization	22,567		19,571		45,088		38,012


Advisory services fee	8,215		6,305		16,163		13,627
(Gain) loss on legal settlements	—		(114)		—		(114)

Corporate general and administrative	3,896		3,438		6,716		5,933
Total operating expenses	169,321		148,130		346,823		283,558

OPERATING INCOME (LOSS)	17,386		26,764		55,185		53,216
Equity in earnings (loss) of unconsolidated entity	(75)		(74)		(148)		(146)
Interest income	2,295		162		4,403		187

Interest expense and amortization of discounts and loan costs	(23,600)		(10,281)		(46,473)		(18,803)
Write-off of loan costs and exit fees	(248)		(22)		(260)		(98)

Gain (loss) on extinguishment of debt	—		—		2,318		—
Realized and unrealized gain (loss) on derivatives	1,029		1,208		695		1,616
INCOME (LOSS) BEFORE INCOME TAXES	(3,213)		17,757		15,720		35,972
Income tax (expense) benefit	75		(1,077)		(2,254)		(3,688)
NET INCOME (LOSS)	(3,138)		16,680		13,466		32,284
(Income) loss attributable to noncontrolling interest in consolidated entities	367		(1,468)		58		(1,442)
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	925		(846)		664		(1,813)
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	(1,846)		14,366		14,188		29,029
Preferred dividends	(10,877)		(4,064)		(21,227)		(7,367)
Deemed dividends on preferred stock	(301)		—		(2,755)		—

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(13,024)	$	10,302	$	(9,794)	$	21,662
INCOME (LOSS) PER SHARE - BASIC:
Net income (loss) attributable to common stockholders	$	(0.20)	$	0.14	$	(0.14)	$	0.31
Weighted average common shares outstanding – basic	65,806		70,740		68,378		68,325
INCOME (LOSS) PER SHARE - DILUTED:
Net income (loss) attributable to common stockholders	$	(0.20)	$	0.12	$	(0.14)	$	0.27
Weighted average common shares outstanding – diluted	65,806		107,669		68,378		98,798

See Notes to Condensed Consolidated Financial Statements.

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
NET INCOME (LOSS)	$	(3,138)	$	16,680	$	13,466	$	32,284
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX


Total other comprehensive income (loss)	—		—		—		—
TOTAL COMPREHENSIVE INCOME (LOSS)	(3,138)		16,680		13,466		32,284
Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities	367		(1,468)		58		(1,442)
Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership	925		(846)		664		(1,813)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	$	(1,846)	$	14,366	$	14,188	$	29,029

See Notes to Condensed Consolidated Financial Statements.

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited, in thousands except per share amounts)


	8.25% Series D Cumulative Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Noncontrolling Interest in Consolidated Entities			Total		5.50% Series B Cumulative Convertible Preferred Stock			Series E Redeemable Preferred Stock			Series M Redeemable Preferred Stock			Redeemable Noncontrolling Interests in Operating Partnership
	Shares	Amount		Shares	Amount								Shares			Amount	Shares		Amount	Shares		Amount
Balance at March 31, 2023	1,600	$	16	65,950	$	659	$	715,729	$	(324,840)	$	(14,013)		$	377,551	3,078	$	65,426	16,474	$	378,906	1,960	$	48,294	$	34,820

Purchase of common stock	—	—		(1)	—		(4)		—		—			(4)		—	—		—	—		—	—		—
Equity-based compensation	—	—		—	—		1,262		—		—			1,262		—	—		—	—		—	—		1,752



Issuance of restricted shares/units	—	—		45	—		—		—		—			—		—	—		—	—		—	—		—


Issuance of preferred stock	—	—		—	—		—		—		—			—		—	—		32	828		4	76		—

Dividends declared – common stock ($0.05/share)	—	—		—	—		—		(3,335)		—			(3,335)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series B ($0.34/share)	—	—		—	—		—		(1,058)		—			(1,058)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series D ($0.52/share)	—	—		—	—		—		(825)		—			(825)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series E ($0.50/share)	—	—		—	—		—		(7,986)		—			(7,986)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series M ($0.52/share)	—	—		—	—		—		(1,008)		—			(1,008)		—	—		—	—		—	—		—
Contributions from noncontrolling interests	—	—		—	—		—		—		2,026			2,026		—	—		—	—		—	—		—
Distributions to noncontrolling interests	—	—		—	—		—		—		(315)			(315)		—	—		—	—		—	—		(361)
Redemption/conversion of operating partnership units	—	—		—	—		—		—		—			—		—	—		—	—		—	—		(123)
Net income (loss)	—	—		—	—		—		(1,846)		(367)			(2,213)		—	—		—	—		—	—		(925)


Redemption of preferred stock	—	—		—	—		—		—		—			—		—	—		(21)	(507)		(4)	(90)		—
Redemption value adjustment – preferred stock	—	—		—	—		—		(301)		—			(301)		—	—		—	176		—	125		—
Redemption value adjustment	—	—		—	—		—		(11)		—			(11)		—	—		—	—		—	—		11
Balance at June 30, 2023	1,600	$	16	65,994	$	659	$	716,987	$	(341,210)	$	(12,669)		$	363,783	3,078	$	65,426	16,485	$	379,403	1,960	$	48,405	$	35,174


	8.25% Series D Cumulative Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Noncontrolling Interest in Consolidated Entities			Total		5.50% Series B Cumulative Convertible Preferred Stock			Series E Redeemable Preferred Stock			Series M Redeemable Preferred Stock			Redeemable Noncontrolling Interests in Operating Partnership
	Shares	Amount		Shares	Amount								Shares			Amount	Shares		Amount	Shares		Amount
Balance at December 31, 2022	1,600	$	16	69,919	$	699	$	734,134	$	(324,740)	$	(16,346)		$	393,763	3,078	$	65,426	12,657	$	291,076	1,428	$	35,182	$	40,555

Purchase of common stock	—	—		(3,969)	(40)		(19,214)		—		—			(19,254)		—	—		—	—		—	—		—
Equity-based compensation	—	—		—	—		2,067		—		—			2,067		—	—		—	—		—	—		3,160


Issuance of preferred stock	—	—		—	—		—		—		—			—		—	—		3,860	86,744		537	12,955		—

Issuance of restricted shares/units	—	—		45	—		—		—		—			—		—	—		—	—		—	—		—

Forfeiture of restricted common shares	—	—		(1)	—		—		—		—			—		—	—		—	—		—	—		—
Dividends declared – common stock ($0.10 /share)	—	—		—	—		—		(6,669)		—			(6,669)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series B ($0.69/share)	—	—		—	—		—		(2,116)		—			(2,116)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series D ($1.03/share)	—	—		—	—		—		(1,650)		—			(1,650)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series E ($1.00/share)	—	—		—	—		—		(15,520)		—			(15,520)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series M ($1.03/share)	—	—		—	—		—		(1,941)		—			(1,941)		—	—		—	—		—	—		—
Contributions from noncontrolling interests	—	—		—	—		—		—		4,050			4,050		—	—		—	—		—	—		—
Distributions to noncontrolling interests	—	—		—	—		—		—		(315)			(315)		—	—		—	—		—	—		(722)
Redemption/conversion of operating partnership units	—	—		—	—		—		—		—			—		—	—		—	—		—	—		(7,162)
Net income (loss)	—	—		—	—		—		14,188		(58)			14,130		—	—		—	—		—	—		(664)
Redemption of preferred stock	—	—		—	—		—		—		—			—		—	—		(32)	(789)		(5)	(115)		—


Redemption value adjustment – preferred stock	—	—		—	—		—		(2,755)		—			(2,755)		—	—		—	2,372		—	383		—
Redemption value adjustment	—	—		—	—		—		(7)		—			(7)		—	—		—	—		—	—		7
Balance at June 30, 2023	1,600	$	16	65,994	$	659	$	716,987	$	(341,210)	$	(12,669)		$	363,783	3,078	$	65,426	16,485	$	379,403	1,960	$	48,405	$	35,174


	8.25% Series D Cumulative Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Noncontrolling Interest in Consolidated Entities			Total		5.50% Series B Cumulative Convertible Preferred Stock			Series E Redeemable Preferred Stock				Series M Redeemable Preferred Stock			Redeemable Noncontrolling Interests in Operating Partnership
	Shares	Amount		Shares	Amount								Shares			Amount	Shares		Amount	Shares			Amount
Balance at March 31, 2022	1,600	$	16	71,270	$	712	$	736,911	$	(303,323)	$	(16,411)		$	417,905	3,078	$	65,426	3,191	$	73,404		62	$	1,538	$	42,291
Purchase of common stock	—	—		—	—		5		—		—			5		—	—		—	—			—	—		—
Equity-based compensation	—	—		—	—		1,464		—		—			1,464		—	—		—	—			—	—		1,832

Common stock issuance costs	—	—		—	—		(27)		—		—			(27)		—	—		—	—			—	—		—

Issuance of restricted shares/units	—	—		45	—		—		—		—			—		—	—		—	—			—	—		—
Forfeiture of restricted common shares	—	—		(5)	—		—		—		—			—		—	—		—	—			—	—		—
Issuance of preferred stock	—	—		—	—		—		—		—			—		—	—		1,319	29,392			334	8,003		—
Dividends declared – common stock ($0.01/share)	—	—		—	—		—		(720)		—			(720)		—	—		—	—		—	—	—		—
Dividends declared – preferred stock - Series B ($0.34/share)	—	—		—	—		—		(1,058)		—			(1,058)		—	—		—	—			—	—		—
Dividends declared – preferred stock-Series D ($0.52/share)	—	—		—	—		—		(825)		—			(825)		—	—		—	—			—	—		—
Dividends declared – preferred stock - Series E ($0.50 /share)	—	—		—	—		—		(2,053)		—			(2,053)		—	—		—	—			—	—		—
Dividends declared – preferred stock - Series M ($0.51 /share)	—	—		—	—		—		(128)		—			(128)		—	—		—	—			—	—		—
Distributions to noncontrolling interests	—	—		—	—		—		—		—			—		—	—		—	—

Braemar Hotels & Resorts Inc. [BHR-PB] Filings
Braemar Hotels & Resorts Inc. [BHR] Filings
Braemar Hotels & Resorts Inc. [BHR-PD] Filings
10-Q	[2023-08-07]
10-Q	[2023-05-08]
10-K	[2023-03-10]
10-Q	[2022-11-07]
10-Q	[2022-08-05]
10-Q	[2022-05-06]
10-K	[2022-03-10]
10-Q	[2021-11-05]
10-Q	[2021-08-06]
10-Q	[2021-05-07]
10-K	[2021-03-05]
10-Q	[2020-11-09]
10-Q	[2020-08-06]
10-Q	[2020-05-28]
10-K	[2020-03-13]
10-Q	[2019-11-06]
10-Q	[2019-08-06]
10-Q	[2019-05-08]
10-K	[2019-03-08]
10-Q	[2018-11-07]
10-Q	[2018-08-09]
10-Q	[2018-05-09]
10-K	[2018-03-14]
10-Q	[2017-11-08]
10-Q	[2017-08-08]
10-Q	[2017-05-09]
10-K	[2017-02-28]
10-Q	[2016-11-09]
10-Q	[2016-08-09]
10-Q	[2016-05-10]
10-K	[2016-03-15]
10-Q	[2015-11-09]
10-Q	[2015-08-10]
10-Q	[2015-05-11]
10-K	[2015-03-16]
10-Q	[2014-11-07]
10-Q	[2014-08-08]
10-Q	[2014-05-12]
10-K	[2014-03-31]

Braemar Hotels & Resorts Inc. [BHR-PB] Filings

Braemar Hotels & Resorts Inc. [BHR] Filings

Braemar Hotels & Resorts Inc. [BHR-PD] Filings