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

10-Q 1 bhr-20230930.htm 10-Q bhr-20230930

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 September 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 November 6, 2023

BRAEMAR HOTELS & RESORTS INC.

FORM 10-Q

FOR THE QUARTER ENDED September 30, 2023

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (unaudited)
Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022			2
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022			3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2023 and 2022			4
Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2023 and 2022			5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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			58
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)


	September 30, 2023		December 31, 2022
ASSETS
Investments in hotel properties, gross	$	2,365,256	$	2,325,093
Accumulated depreciation	(483,081)		(440,492)
Investments in hotel properties, net	1,882,175		1,884,601
Cash and cash equivalents	149,496		261,541

Restricted cash	57,333		54,155
Accounts receivable, net of allowance of $233 and $339, respectively	35,939		51,448

Inventories	4,944		5,238

Prepaid expenses	14,006		7,044
Deferred costs, net	75		—
Investment in unconsolidated entity	1,718		1,689
Derivative assets	4,945		6,482
Operating lease right-of-use assets	78,660		79,449
Other assets	18,479		14,621
Intangible assets, net	3,599		3,883

Due from Ashford Inc.	1,538		—
Due from related parties, net	520		938
Due from third-party hotel managers	14,200		26,625

Total assets	$	2,267,627	$	2,397,714
LIABILITIES AND EQUITY
Liabilities:
Indebtedness, net	$	1,178,720	$	1,334,130

Accounts payable and accrued expenses	144,064		133,978
Dividends and distributions payable	8,967		8,184



Due to Ashford Inc.	—		10,005

Due to third-party hotel managers	1,615		2,096

Operating lease liabilities	60,470		60,692
Other liabilities	22,579		22,343
Derivative liabilities	11		284

Total liabilities	1,416,426		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 September 30, 2023 and December 31, 2022, respectively	65,426		65,426
Series E redeemable preferred stock, $0.01 par value, 16,409,685 and 12,656,529 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	377,876		291,076
Series M redeemable preferred stock, $0.01 par value, 1,911,703 and 1,428,332 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	47,460		35,182
Redeemable noncontrolling interests in operating partnership	33,494		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 September 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 September 30, 2023 and December 31, 2022, respectively	659		699
Additional paid-in capital	717,564		734,134
Accumulated deficit	(377,658)		(324,740)
Total stockholders’ equity of the Company	340,581		410,109
Noncontrolling interest in consolidated entities	(13,636)		(16,346)
Total equity	326,945		393,763
Total liabilities and equity	$	2,267,627	$	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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
REVENUE
Rooms	$	100,738	$	104,503	$	355,402	$	322,222
Food and beverage	38,537		37,624		138,541		116,600

Other	20,526		19,062		67,866		59,141
Total hotel revenue	159,801		161,189		561,809		497,963


EXPENSES
Hotel operating expenses:
Rooms	25,899		25,424		79,962		69,742
Food and beverage	32,750		31,320		108,854		91,242
Other expenses	52,725		50,836		171,317		149,130
Management fees	5,076		5,116		17,661		14,802
Total hotel operating expenses	116,450		112,696		377,794		324,916
Property taxes, insurance and other	10,471		8,851		27,983		22,731
Depreciation and amortization	22,703		19,604		67,791		57,616


Advisory services fee	7,020		8,854		23,183		22,481
(Gain) loss on legal settlements	—		—		—		(114)

Corporate general and administrative	2,506		8,075		9,222		14,008
Total operating expenses	159,150		158,080		505,973		441,638

OPERATING INCOME (LOSS)	651		3,109		55,836		56,325
Equity in earnings (loss) of unconsolidated entity	(60)		(74)		(208)		(220)
Interest income	986		745		5,389		932
Other income (expense)	293		27		293		27
Interest expense and amortization of discounts and loan costs	(23,306)		(14,490)		(69,779)		(33,293)
Write-off of loan costs and exit fees	(2,588)		(8)		(2,848)		(106)

Gain (loss) on extinguishment of debt	—		—		2,318		—
Realized and unrealized gain (loss) on derivatives	223		2,403		918		4,019
INCOME (LOSS) BEFORE INCOME TAXES	(23,801)		(8,288)		(8,081)		27,684
Income tax (expense) benefit	1,190		(95)		(1,064)		(3,783)
NET INCOME (LOSS)	(22,611)		(8,383)		(9,145)		23,901
(Income) loss attributable to noncontrolling interest in consolidated entities	(1,773)		(823)		(1,715)		(2,265)
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	2,354		1,166		3,018		(647)
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	(22,030)		(8,040)		(7,842)		20,989
Preferred dividends	(10,582)		(6,028)		(31,809)		(13,395)
Deemed dividends on preferred stock	(516)		(2,649)		(3,271)		(4,802)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(33,128)	$	(16,717)	$	(42,922)	$	2,792
INCOME (LOSS) PER SHARE - BASIC:
Net income (loss) attributable to common stockholders	$	(0.50)	$	(0.24)	$	(0.63)	$	0.04
Weighted average common shares outstanding – basic	65,825		70,956		68,010		69,213
INCOME (LOSS) PER SHARE - DILUTED:
Net income (loss) attributable to common stockholders	$	(0.50)	$	(0.24)	$	(0.63)	$	0.04
Weighted average common shares outstanding – diluted	65,825		70,956		68,010		69,214

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
NET INCOME (LOSS)	$	(22,611)	$	(8,383)	$	(9,145)	$	23,901
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX


Total other comprehensive income (loss)	—		—		—		—
TOTAL COMPREHENSIVE INCOME (LOSS)	(22,611)		(8,383)		(9,145)		23,901
Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities	(1,773)		(823)		(1,715)		(2,265)
Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership	2,354		1,166		3,018		(647)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	$	(22,030)	$	(8,040)	$	(7,842)	$	20,989

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 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


Equity-based compensation	—	—		—	—		577		—		—			577		—	—		—	—		—	—		1,050






Issuance of preferred stock	—	—		—	—		—		—		—			—		—	—		36	813		3	56		—

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 ($0.47/share)	—	—		—	—		—		(7,710)		—			(7,710)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series M ($0.52/share)	—	—		—	—		—		(989)		—			(989)		—	—		—	—		—	—		—

Distributions to noncontrolling interests	—	—		—	—		—		—		(2,740)			(2,740)		—	—		—	—		—	—		(361)

Net income (loss)	—	—		—	—		—		(22,030)		1,773			(20,257)		—	—		—	—		—	—		(2,354)


Redemption of preferred stock	—	—		—	—		—		—		—			—		—	—		(111)	(2,589)		(51)	(1,268)		—
Redemption value adjustment – preferred stock	—	—		—	—		—		(516)		—			(516)		—	—		—	249		—	267		—
Redemption value adjustment	—	—		—	—		—		15		—			15		—	—		—	—		—	—		(15)
Balance at September 30, 2023	1,600	$	16	65,994	$	659	$	717,564	$	(377,658)	$	(13,636)		$	326,945	3,078	$	65,426	16,410	$	377,876	1,912	$	47,460	$	33,494


	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	—	—		—	—		2,644		—		—			2,644		—	—		—	—		—	—		4,210


Issuance of preferred stock	—	—		—	—		—		—		—			—		—	—		3,896	87,557		540	13,011		—

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

Forfeiture of restricted common shares	—	—		(1)	—		—		—		—			—		—	—		—	—		—	—		—
Dividends declared – common stock ($0.15 /share)	—	—		—	—		—		(10,004)		—			(10,004)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series B ($1.03/share)	—	—		—	—		—		(3,174)		—			(3,174)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series D ($1.55/share)	—	—		—	—		—		(2,475)		—			(2,475)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series E ($1.44/share)	—	—		—	—		—		(23,230)		—			(23,230)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series M ($1.55/share)	—	—		—	—		—		(2,930)		—			(2,930)		—	—		—	—		—	—		—
Contributions from noncontrolling interests	—	—		—	—		—		—		4,050			4,050		—	—		—	—		—	—		—
Distributions to noncontrolling interests	—	—		—	—		—		—		(3,055)			(3,055)		—	—		—	—		—	—		(1,083)
Redemption/conversion of operating partnership units	—	—		—	—		—		—		—			—		—	—		—	—		—	—		(7,162)
Net income (loss)	—	—		—	—		—		(7,842)		1,715			(6,127)		—	—		—	—		—	—		(3,018)
Redemption of preferred stock	—	—		—	—		—		—		—			—		—	—		(143)	(3,378)		(56)	(1,383)		—


Redemption value adjustment – preferred stock	—	—		—	—		—		(3,271)		—			(3,271)		—	—		—	2,621		—	650		—
Redemption value adjustment	—	—		—	—		—		8		—			8		—	—		—	—		—	—		(8)
Balance at September 30, 2023	1,600	$	16	65,994	$	659	$	717,564	$	(377,658)	$	(13,636)		$	326,945	3,078	$	65,426	16,410	$	377,876	1,912	$	47,460	$	33,494


	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 June 30, 2022	1,600	$	16	71,310	$	712	$	738,353	$	(290,307)	$	(14,943)		$	433,831	3,078	$	65,426	4,508	$	103,697	396	$	9,750	$	40,291
Purchase of common stock	—	—		(156)	(1)		(760)		—		—			(761)		—	—		—	—		—	—		—
Equity-based compensation	—	—		—	—		1,799		—		—			1,799		—	—		—	—		—	—		1,592



Issuance of restricted shares/units	—	—		304	3		2		—		—			5		—	—		—	—		—	—		—
Forfeiture of restricted common shares	—	—		(2)	—		—		—		—			—		—	—		—	—		—	—		—
Issuance of preferred stock	—	—		—	—		—		—		—			—		—	—		4,375	98,277		673	16,296		—
Dividends declared – common stock ($0.01/share)	—	—		—	—		—		(719)		—			(719)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series B ($0.34/share)	—	—		—	—		—		(1,059)		—			(1,059)		—	—		—	—		—	—		—
Dividends declared – preferred stock-Series D ($0.52/share)	—	—		—	—		—		(825)		—			(825)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series E ($0.48 /share)	—	—		—	—		—		(3,697)		—			(3,697)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series M ($0.52 /share)	—	—		—	—		—		(447)		—			(447)		—	—		—	—		—	—		—
Distributions to noncontrolling interests	—	—		—	—		—		—		—			—		—	—		—	—		—	—		(84)


Net income (loss)	—	—		—	—		—		(8,040)		823			(7,217)		—	—		—	—		—	—		(1,166)

Braemar Hotels & Resorts Inc. [BHR-PD] Filings
Braemar Hotels & Resorts Inc. [BHR] Filings
Braemar Hotels & Resorts Inc. [BHR-PB] Filings
10-Q	[2023-11-08]
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-PD] Filings

Braemar Hotels & Resorts Inc. [BHR] Filings

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