Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Price and Dividend Information
Our common stock is listed and traded on the NYSE under the symbol “BHR.” On March 8, 2022, there were 623 holders of record.
Distributions and Our Distribution Policy
We did not pay dividends on our common stock in fiscal year 2020 and 2021. On March 4, 2022, our board of directors declared a quarterly cash dividend of $0.01 per diluted share for the Company’s common stock for the first quarter of 2022. Additionally, in March 2022, the board of directors approved an update to our previously announced dividend policy for 2022 to revise our then-expectation to pay a quarterly dividend of $0.01 per share of common stock during 2022. The approval of our dividend policy does not commit our board of directors to declare future dividends with respect to any quantity or the amount thereof. The board of directors will continue to review our dividend policy and make announcements with respect thereto. For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof.
To qualify as a REIT, we must distribute to our stockholders an amount at least equal to:
(i) 90% of our REIT taxable income, determined before the deduction for dividends paid and excluding any net capital gain (which does not necessarily equal net income as calculated in accordance with GAAP); plus
(ii) 90% of the excess of our net income from foreclosure property over the tax imposed on such income by the Code; less
(iii) any excess non-cash income (as determined under the Code).
Distributions made by us are authorized and determined by our board of directors in its sole discretion out of funds legally available therefor and are dependent upon a number of factors, including restrictions under applicable law, actual and projected financial condition, liquidity, EBITDA, FFO and results of operations, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, our REIT taxable income, the annual REIT distribution requirements and such other factors as our board of directors deems relevant. For more information regarding risk factors that could materially and adversely affect our ability to make distributions. See “Risk Factors-Risks Related to Our Status as a REIT.” We expect that, at least initially, our distributions may exceed our net income under GAAP because of non-cash expenses included in net income. To the extent that our cash available for distribution is less than 90% of our REIT taxable income, we may consider various means to cover any such shortfall, including borrowing under new loans, selling certain of our assets or using a portion of the net proceeds we receive from future offerings of equity, equity-related or debt securities or declaring taxable stock dividends. In addition, our charter allows us to issue preferred stock that could have a preference on distributions, and, if we elect such issuance, the
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distribution preference on the preferred stock could limit our ability to make distributions to the holders of our common stock. We cannot assure our stockholders that our distribution policy will not change in the future.
Characterization of Distributions
For income tax purposes, distributions paid consist of ordinary income or capital gains. Distributions paid per share were characterized as follows:
2021 2020 2019
Amount % Amount % Amount %
Common Stock (cash):
Ordinary income $ — — % $ — — % $ — — %
Capital gain —
— —
— — —
Unrecaptured 1250 gain — — — — — —
Return of capital — — 0.1600 (1)
100.0000 0.6400 (1)
100.0000
Total $ — — % $ 0.1600 100.0000 % $ 0.6400 100.0000 %
Common Stock (stock - NYSE: AINC):
Ordinary income $ — — % $ — — % $ — — %
Capital gain — — — — — —
Unrecaptured 1250 gain — — — — — —
Return of capital — — — — 0.1066 (2)
100.0000
Total $ — — % $ — — % $ 0.1066 100.0000 %
Preferred Stock – Series B:
Ordinary income $ — — % $ — — % $ — — %
Capital gain — — — — — —
Unrecaptured 1250 gain — — — — — —
Return of capital 1.3752 (1)
100.0000 1.3752 (1)
100.0000 1.3752 (1)
100.0000
Total $ 1.3752 100.0000 % $ 1.3752 100.0000 % $ 1.3752 100.0000 %
Preferred Stock – Series D:
Ordinary income $ — — % $ — — % $ — — %
Capital gain — — — — — —
Unrecaptured 1250 gain — — — — — —
Return of capital 2.0624 (1)
100.0000 2.0624 (1)
100.0000 1.7817 (1)
100.0000
Total $ 2.0624 100.0000 % $ 2.0624 100.0000 % $ 1.7817 100.0000 %
Preferred Stock – Series E: $ — — % $ — — % $ — — %
Ordinary income — — — — — —
Capital gain — — — — — —
Unrecaptured 1250 gain — — — — $ — —
Return of capital 0.8330 (1)
100.0000 — — $ — —
Total $ 0.8330 100.0000 % $ — — % $ — — %
Preferred Stock – Series M: $ — — % $ — — % $ — — %
Ordinary income — — — — — —
Capital gain — — — — — —
Unrecaptured 1250 gain — — — — $ — —
Return of capital 0.6832 (1)
100.0000 — — $ — —
Total $ 0.6832 100.0000 % $ — — % $ — — %
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(1) The fourth quarter 2018 distributions paid January 15, 2019 to stockholders of record as of December 31, 2018 are treated as 2019 distributions for tax purposes. The fourth quarter 2019 distributions paid January 15, 2020 to stockholders of record as of December 31, 2019 are treated as 2020 distributions for tax purposes. The fourth quarter 2020 distributions paid January 15, 2021 to stockholders of
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record as of December 31, 2020 are treated as 2021 distributions for tax purposes. The fourth quarter 2021 distributions paid January 18, 2022 to stockholders of record as of December 31, 2021 are treated as 2022 distributions for tax purposes.
(2) On November 5, 2019 Braemar distributed its remaining shares of common stock in Ashford Inc. (NYSE: AINC) to the common stockholders of record as of the close of business of the New York Stock Exchange on October 29, 2019.
Equity Compensation Plan Information
The following table sets forth certain information with respect to securities authorized and available for issuance under our equity compensation plans.
Number of Securities to be Issued Upon Exercise of
Outstanding Options, Warrants and Rights Weighted-Average Exercise Price Of Outstanding Options, Warrants, And Rights Number of Securities Remaining Available for Future Issuance
Equity compensation plans approved by security holders
None N/A 774,108 (1)
Equity compensation plans not approved by security holders None N/A None
Total None N/A 774,108
____________________
(1) As of December 31, 2021, approximately 774,000 shares of our common stock, or securities convertible into approximately 774,000 shares of our common stock, remained available for issuance under our 2013 Equity Incentive Plan. On February 23, 2021, the board of directors terminated the Advisor Equity Incentive Plan. 1.6 million shares of common stock reserved pursuant with the Advisor Incentive Plan were never utilized (and no shares were ever issued thereunder). Following the termination of the Advisor Equity Incentive Plan, no shares may be issued thereunder.
Purchases of Equity Securities by the Issuer
On December 5, 2017, our board of directors approved the stock repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock having an aggregate value of up to $50 million. The board of directors’ authorization replaced any previous repurchase authorizations.
No shares were purchased during the year ended December 31, 2021, pursuant to the authorization. $50 million remains authorized by the board of directors pursuant to the December 5, 2017 approval.
The following table provides the information with respect to purchases of our common stock during each of the months in the quarter ended December 31, 2021:
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of a Publicly Announced Plan Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plan
Common stock:
October 1 to October 31 3,254 (1)
$ — — $ 50,000,000
November 1 to November 30 44 (1)
$ — — $ 50,000,000
December 1 to December 31 642 (1)
$ — — $ 50,000,000
Total 3,940 $ — —
__________________
(1) There is no cost associated with the forfeiture of restricted shares of 3,254, 44 and 642 of our common stock in October, November and December, respectively.
Performance Graph
The following graph compares the percentage change in the cumulative total stockholder return on our common stock with the cumulative total return of the S&P 500 Stock Index and the FTSE NAREIT Lodging & Resorts Index for the period from December 31, 2016 through December 31, 2021, assuming an initial investment of $100 in stock on December 31, 2016 with reinvestment of dividends. The NAREIT Lodging Resorts Index is not a published index; however, we believe the companies included in this index provide a representative example of enterprises in the lodging resort line of business in which we engage. Stockholders who wish to request a list of companies in the FTSE NAREIT Lodging & Resorts Index may send written requests to Braemar Hotels & Resorts Inc., Attention: Investor Relations, 14185 Dallas Parkway, Suite 1200, Dallas, Texas 75254.
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The stock price performance shown below on the graph is not necessarily indicative of future stock price performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among Braemar Hotels & Resorts Inc., the S&P Index and the FTSE NAREIT Lodging & Resorts Index
Item 6. Reserved