What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-03-10 compared with 2022-03-10 · 63 added, 94 removed, 264 unchanged (37% of the section changed)

2 unchanged sentences

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2022.

Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, our disclosure controls and procedures are effective to ensure that (i) information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2022, as a result of the material weakness in our internal control over financial reporting related to the accounting for earnings per share described below, and for which it was not possible for the Company to remediate during the fourth quarter of 2022 because there were no similar transactions to evaluate, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms;

and (ii) is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Management’s Annual Report on Internal Control over Financial Reporting

5 unchanged sentences

In making the assessment of the effectiveness of our internal control over financial reporting, management has utilized the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, (2013 framework) (“COSO”).

Based on management’s assessment of these criteria, we concluded that, as of December 31, 2021, our internal control over financial reporting is effective.

In accordance with guidance issued by the SEC, companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting for the fiscal year in which the acquisition occurred.

Management’s evaluation of internal control over financial reporting excluded the internal control activities of the Four Seasons Resort Scottsdale.

The Four Seasons Resort Scottsdale represented approximately 0.8% of consolidated revenues and approximately 4.8% of consolidated net income for the year ended December 31, 2022 and approximately 11.9% of total assets and approximately 20.8% of net assets as of December 31, 2022.

Based on management’s assessment of these criteria, we concluded that, as of December 31, 2022, our internal control over financial reporting is not effective.

During our financial statement close process for the period ended December 31, 2022, a material weakness was identified in the Company’s control over the evaluation of complex transactions as a result of the error identified in the treatment of deemed dividends on redeemable preferred stock in arriving at net income (loss) attributable to common stockholders, which impacted the calculation of earnings per share.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The Company is evaluating remediation steps, which could include:

(1) arranging for additional training for our associates and (2) designing new or enhanced controls whereby management evaluates the nature of equity transactions and where appropriate engages third-party accounting experts to assist management in assessing the accounting in its consolidated financial statements.

The material weakness will not be considered remediated until management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are effective.

We reviewed the results of management’s assessment with the audit committee of our board of directors.

Notwithstanding the material weakness described above, management has concluded that our consolidated financial statements included in this annual report are fairly stated in all material respects in accordance with GAAP.

The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by BDO USA, LLP, an independent registered public accounting firm, as stated in their report which appears in this Annual Report on Form 10-K.

7 unchanged sentences

We have audited Braemar Hotels & Resorts Inc.’s (the “Company’s”) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and schedule and our report dated March 10, 2022 expressed an unqualified opinion thereon.

In our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria .

We do not express an opinion or any other form of assurance on management’s statements referring to any corrective actions taken by the Company after the date of management’s assessment.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and schedule (collectively referred to as “the financial statements”) and our report dated March 10, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

8 unchanged sentences

We believe that our audit provides a reasonable basis for our opinion.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

A material weakness was identified regarding management’s failure to design and maintain effective controls over the evaluation of complex transactions and is more fully described in management’s assessment.

This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2022 financial statements, and this report does not affect our report dated March 10, 2023 on those financial statements.

As described in Management’s Annual Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the Four Seasons Resort Scottsdale at Troon North, which was acquired on December 1, 2022, and which is included in the consolidated balance sheet of the Company as of December 31, 2022, and the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for the year then ended.

The Four Seasons Resort Scottsdale at Troon North constituted 11.9% and 20.8% of total assets and net assets, respectively, as of December 31, 2022, and 0.8% and 4.8% of revenues and net income (loss), respectively, for the year then ended.

Management did not assess the effectiveness of internal control over financial reporting of the Four Seasons Resort Scottsdale at Troon North because of the timing of the acquisition which was completed on December 1, 2022.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of the Four Seasons Resort Scottsdale at Troon North.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

A company’s internal control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

6 unchanged sentences

Other Information

Opinion of the Liquidation Value of our Series E Preferred Stock and Series M Preferred Stock as of December 31, 2021

In order to assist broker-dealers in complying with their obligations under FINRA Rule 2331(c)(1)(B) with respect to customer account statements and our Series E Preferred Stock and our Series M Preferred Stock, we engaged Robert A.

Stanger & Co., Inc.

(“Stanger”) to provide an opinion of the liquidation value of our Series E Preferred Stock and our Series M Preferred Stock as of December 31, 2021 (the “Valuation Date”).

The liquidation value is the amount that a holder of the Series E Preferred Stock or the Series M Preferred Stock would receive per share in the event of our liquidation.

Based on certain assumptions and qualifications set forth in its report, Stanger concluded that the estimated liquidation value of the Series E Preferred Stock and the Series M Preferred Stock was $25.00 per share, which equals the per share liquidation preference for each series as set forth in the articles supplementary creating the Series E and the Series M Preferred Stock.

In arriving at this conclusion, Stanger used the following valuation approaches:

Market capitalization .

Stanger reviewed the public market capitalization of our common stock at its 52-week low, its 52-week high and the closing price as of the Valuation Date.

Stanger adjusted the common market capitalization for the liquidation value of the preferred securities to determine an adjusted market capitalization.

In all cases, the preferred stock coverage ratio, which is the ratio of the adjusted market capitalization to the total liquidation preference for all of our outstanding preferred securities, was adequate as of the Valuation Date.

Analyst target prices .

Stanger reviewed the then most recent (November 2021) target common stock prices published by analysts at investment banks and other financial firms (four in total).

Using the lowest target price, the highest target price and the average or “consensus” price Stanger estimated the common market capitalization as of the Valuation Date.

Stanger adjusted the common market capitalization for the liquidation value of the preferred securities to determine an adjusted market capitalization.

Direct capitalization analysis .

Stanger chose a range of capitalization rates it believed to be appropriate for our asset type and multiplied them with our aggregate “capitalized net operating income” to determine an estimated range of real estate values, deducted our indebtedness, and adjusted for available working capital and for estimated non-controlling interests due to third parties as of the Valuation Date, to derive an estimate of our equity value (before accounting for the preferred securities).

To arrive at our stabilized “capitalized net operating income,” Stanger used the higher of the 2019 net operating income (“NOI”) or budgeted 2022 NOI for each property (believing that 2020 and 2021 NOI was not appropriate on account of COVID-19 disruptions).

For those properties where 2019 NOI was capitalized, Stanger deducted the loss to lease (the difference between 2022 budget NOI and 2019 NOI) from the capitalized value.

Using the highest and lowest capitalization rates in Stanger’s range, our equity value exceeded the total liquidation preference for all of our outstanding preferred securities as of the Valuation Date.

Third-party appraisals .

Stanger prepared a range of equity values based upon the most recent appraised values of our assets (on an “as is” and “stabilized” basis), deducted our indebtedness, and adjusted for available working capital and the estimated non-controlling interests due to third parties as of the Valuation Date, to derive an estimate of our equity value (before accounting for the preferred securities).

The most recent appraisals available for each property were from February 2018 through January 2022.

The age of the “as-is” appraisals averaged 2.8 years.

Using the “as is” values and the “stabilized” values, our equity value exceeded the total liquidation preference for all of our outstanding preferred securities.

Stanger is engaged in the business of providing valuation services for real estate assets and consulting services for non-traded REITs and their sponsors as well as for other real estate programs.

Stanger has not previously provided services to us.

However, Stanger has provided consulting services to Ashford Securities, a subsidiary of Ashford Inc., since 2019 and has received fees in connection with those services.

As previously disclosed, we provide funds to Ashford Inc.

in connection with the formation, registration and operations of Ashford Securities.

Limited Waiver Under Advisory Agreement

On March 10, 2022, we entered into a Limited Waiver Under Advisory Agreement (the “Limited Waiver”) with Braemar OP, Braemar TRS and our advisor.

As previously disclosed, our advisory agreement (i) allocates responsibility for certain employee costs between us and our advisor and (ii) permits our Board of Directors to issue annual equity awards in the Company or the Operating Partnership to employees and other representatives of our advisor based on achievement by the Company of certain financial or other objectives or otherwise as our Board of Directors sees fit.

Pursuant to the Limited Waiver, the Company, Braemar OP, Braemar

TRS and our advisor waived the operation of any provision in the advisory agreement that would otherwise limit our ability, in our discretion and at our cost and expense, to award during the first and second fiscal quarters of calendar year 2022 cash incentive compensation to employees and other representatives of our advisor.

The foregoing description of the Limited Waiver does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Limited Waiver, a copy of which is attached hereto as Exhibit 10.39 and is incorporated herein by reference.

The foregoing information is included for the purpose of providing the disclosures required under “Item 1.01 - Entry into a Material Definitive Agreement,” of Current Report on Form 8-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

31 unchanged sentences

333-234663) filed with the SEC on January 24, 2020)

3.2 Fourth Amended and Restated Bylaws of Braemar Hotels & Resorts Inc.

(incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on August 20, 2018) (File No.

3.2 Fourth Amended and Restated Bylaws, as amended by Amendment No.

1 on March 17, 2022 and by Amendment No.

2 on February 23, 2023 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on February 23, 2023) (File No.

3.3 Articles of Amendment of Ashford Hospitality Prime, Inc.

8 unchanged sentences

3.8 Articles Supplementary for the Series D Cumulative Preferred Stock, accepted for record and certified by the Maryland State Department of Assessments and Taxation on November 19, 2018 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on November 19, 2018) (File No.

3.9 Articles Supplementary Establishing the Series E Redeemable Preferred Stock of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on April 2, 2021.

(incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 2, 2021) (File No.

3.10 Certificate of Correction of Series E Articles Supplementary of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on November 4, 2021.

(incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q filed on November 5, 2021) (File No.

3.11 Articles Supplementary Establishing the Series M Redeemable Preferred Stock of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on April 2, 2021.

(incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on April 2, 2021) (File No.

3.12 Certificate of Correction of Series M Articles Supplementary of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on November 4, 2021.

(incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q filed on November 5, 2021) (File No.

3.9 Articles Supplementary Establishing the Series E Redeemable Preferred Stock of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on April 2, 2021 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 2, 2021) (File No.

3.10 Certificate of Correction of Series E Articles Supplementary of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on November 4, 2021 (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q filed on November 5, 2021) (File No.

3.11 Articles Supplementary Establishing the Series M Redeemable Preferred Stock of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on April 2, 2021 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on April 2, 2021) (File No.

3.12 Certificate of Correction of Series M Articles Supplementary of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on November 4, 2021 (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q filed on November 5, 2021) (File No.

4.1 Specimen Common Stock Certificate of Ashford Hospitality Prime, Inc.

55 unchanged sentences

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 18, 2015) (File No.

10.17 Amendment No.

1 to Second Amended and Restated Agreement of Limited Partnership of Ashford Hospitality Prime Limited Partnership (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 8, 2016) (File No.

10.18† Second Amended and Restated 2013 Equity Incentive Plan of Ashford Hospitality Prime, Inc.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 9, 2016) (File No.

10.18.1† Amendment Number One to the Second Amended and Restated 2013 Equity Incentive Plan of Ashford Hospitality Prime, Inc.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 15, 2017 (File No.

10.19† Amended and Restated Form of Performance Stock Unit Award Agreement (filed as Exhibit 10.43 to the Annual Report on Form 10-K filed on February 28, 2017) (File No.

10.20† Amended and Restated Form of Performance LTIP Unit Award Agreement (filed as Exhibit 10.44 to the Annual Report on Form 10-K filed on February 28, 2017 (File No.

10.17† Second Amended and Restated Braemar Hotels & Resorts Inc.

2013 Equity Incentive Plan, as amended and restated through May 11, 2022 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form S-8 filed on May 12, 2022) (File No.

10.17.1†* Form of 2023 Deferred Cash Award Agreement

10.17.2†* Form of 2023 Performance Stock Unit Award Agreement

10.17.3†* Form of 2023 Performance LTIP Unit Award Agreement

10.18† Form of 2021 Performance LTIP Unit Award Agreement (filed as Exhibit 10.7 to the Quarterly Report on Form 10-Q filed on May 7, 2021) (File No.

3 unchanged sentences

Stockton (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 2, 2016) (File No.

10.24† Employment Agreement, dated as of November 2, 2016, by and among Ashford Inc., Ashford Hospitality Advisors, LLC and Richard J.

Stockton (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on November 2, 2016) (File No.

10.25 Amended and Restated Credit Agreement, dated as of November 10, 2016, by and among Ashford Hospitality Prime Limited Partnership, Ashford Hospitality Prime, Inc., Bank of America, N.A.

and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 17, 2016) (File No.

10.21.1 Second Amended and Restated Credit Agreement, dated as of October 25, 2019, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Bank of America, N.A.

12 unchanged sentences

Stockton (incorporated by reference to Exhibit 10.28 to the Annual Report on Form 10-K/A filed on April 30, 2019) (File No.

10.31 Second Amended and Restated Credit Agreement, dated as of October 25, 2019, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Bank of America, N.A.

and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on October 28, 2019) (File No.

10.27 First Amendment to Amended and Restated Employment Agreement, dated as of May 12, 2022, by and among Ashford Inc., Ashford Hospitality Advisors, LLC, and Richard J.

Stockton (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on May 12, 2022) (File No.

10.28 Standby Equity Distribution Agreement, dated as of February 4, 2021, by and between Braemar Hotels & Resorts Inc.

4 unchanged sentences

(incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed on May 18, 2021) (File No.

10.35 Equity Distribution Agreement, dated as of May 25, 2021, by and between Braemar Hotels & Resorts Inc.

and Virtu Americas LLC (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed on May 26, 2021)

10.36 Equity Distribution Agreement, dated as of July 12, 2021, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Ashford Hospitality Advisors LLC and Virtu Americas LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 12, 2021)

10.31 Amendment No.

1 to the Braemar Master Project Management Agreement (filed as Exhibit 10.5 to the Quarterly Report on Form 10-Q filed on August 6, 2021) (File No.

10.38* Purchase and Sale Agreement, dated as of December 24, 2021, between and among DBR Hotel Owner LLC, as seller, and Braemar Hotels & Resorts Inc.

and BHR Dorado LLC, as purchaser

10.32 Limited Waiver Under Advisory Agreement, dated as of March 10, 2022, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Braemar TRS Corporation, Ashford Inc.

and Ashford Hospitality Advisors LLC.

(incorporated by reference to Exhibit 10.39 to the Annual Report on Form 10-K filed on March 10, 2022) (File No.

10.33* Purchase and Sale Agreement, dated as of October 31, 2022, by and between SHR FSST, LLC and STRS FSST and BHR Scottsdale LP

21.1* List of Subsidiaries of Braemar Hotels & Resorts Inc.

1 unchanged sentence

23.1* Consent of BDO USA, LLP

23.2* Consent of Robert A.

Stanger & Co., Inc.

31.1* Certification of the Chief Executive Officer required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended

2 unchanged sentences

32.2** Certification of the Chief Financial Officer required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (In accordance with SEC Release 33-8212, this exhibit is being furnished, and is not being filed as part of this report or as a separate disclosure document, and is not being incorporated by reference into any Securities Act of 1933 registration statement.)

99.1 Consulting and Cooperation Agreement, by and among Ashford Inc., Ashford Hospitality Advisors LLC, and Robert G.

Haiman, dated as of June 30, 2021 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed on June 30, 2021) .

99.1 Release and waiver, by and between, Ashford Hospitality Services, LLC and Jeremy Welter, dated April 15, 2022 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed on April 19, 2022)

_________________________

38 unchanged sentences

CARTER Director March 10, 2023

/s/ CURTIS B.

MCWILLIAMS Director March 10, 2022

/s/ MATTHEW D.

Director March 10, 2023

/s/ REBECA ODINO-JOHNSON

Director March 10, 2023

Rebeca Odino-Johnson

/s/ KENNETH H.

23 unchanged sentences

Capital Hilton Washington, D.C.

$ 107,000 $ 45,721 $ 106,245 $ — $ 34,436 $ 45,721 $ 140,681 $ 186,402 $ 64,999 — 04/2007 (1),(2),(3)

Hilton La Jolla Torrey Pines La Jolla, CA 88,000 — 114,614 — 8,224 — 122,838 122,838 51,047 — 04/2007 (1),(2),(3)

Marriott Seattle Waterfront Seattle, WA 134,700 31,888 112,176 — 12,486 31,888 124,662 156,550 45,547 — 04/2007 (1),(2),(3)

The Notary Hotel Philadelphia, PA 84,600 9,814 94,029 — 33,320 9,814 127,349 137,163 52,655 — 04/2007 (1),(2),(3)

The Clancy San Francisco, CA 116,300 22,653 72,731 — 60,666 22,653 133,397 156,050 59,333 — 04/2007 (1),(2),(3)

Sofitel Chicago Magnificent Mile Chicago, IL 99,400 12,631 140,369 — 11,480 12,631 151,849 164,480 39,599 — 02/2014 (1),(2),(3)

Pier House Resort & Spa Key West, FL 80,000 59,731 33,011 — 4,428 59,731 37,439 97,170 11,889 — 03/2014 (1),(2),(3)

$ 107,000 $ 45,721 $ 106,245 $ — $ 40,495 $ 45,721 $ 146,740 $ 192,461 $ 67,028 — April 2007 (1),(2),(3)

Hilton La Jolla Torrey Pines La Jolla, CA 88,000 — 114,614 — 7,031 — 121,645 121,645 52,308 — April 2007 (1),(2),(3)

Marriott Seattle Waterfront Seattle, WA 134,700 31,888 112,176 — 23,587 31,888 135,763 167,651 49,559 — April 2007 (1),(2),(3)

The Notary Hotel Philadelphia, PA 84,600 9,814 94,029 — 34,366 9,814 128,395 138,209 60,453 — April 2007 (1),(2),(3)

The Clancy San Francisco, CA 116,300 22,653 72,731 — 53,830 22,653 126,561 149,214 61,516 — April 2007 (1),(2),(3)

Sofitel Chicago Magnificent Mile Chicago, IL 99,400 12,631 140,369 — 4,269 12,631 144,638 157,269 36,919 — February 2014 (1),(2),(3)

Pier House Resort & Spa Key West, FL 80,000 59,731 33,011 — 3,197 59,731 36,208 95,939 12,578 — March 2014 (1),(2),(3)

Bardessono Hotel and Spa

Yountville, CA 40,000 — 64,184 — 2,060 — 66,244 66,244 12,831 — 07/2015 (1),(2),(3)

Hotel Yountville Yountville, CA 51,000 47,849 48,567 — 273 47,849 48,840 96,689 10,842 — 05/2017 (1),(2),(3)

Park Hyatt Beaver Creek Resort & Spa Beaver Creek, CO 67,500 89,117 56,383 — 5,649 89,117 62,032 151,149 13,431 — 03/2017 (1),(2),(3)

The Ritz-Carlton Sarasota Sarasota, FL 99,500 83,630 99,782 — ( 8,894 ) 83,630 90,888 174,518 11,897 — 04/2018 (1),(2),(3)

Yountville, CA 40,000 — 64,184 — 1,895 — 66,079 66,079 14,565 — July 2015 (1),(2),(3)

Hotel Yountville Yountville, CA 51,000 47,849 48,567 — ( 4,577 ) 47,849 43,990 91,839 7,659 — May 2017 (1),(2),(3)

Park Hyatt Beaver Creek Resort & Spa Beaver Creek, CO 70,500 89,117 56,383 — 11,206 89,117 67,589 156,706 16,876 — March 2017 (1),(2),(3)

The Ritz-Carlton Sarasota Sarasota, FL 98,500 83,630 99,782 — ( 5,755 ) 83,630 94,027 177,657 15,523 — April 2018 (1),(2),(3)

The Ritz-Carlton St.

Thomas, USVI 42,500 25,533 38,467 — 76,471 25,533 114,938 140,471 16,357 — 12/2015 (1),(2),(3)

The Ritz-Carlton Lake Tahoe Truckee, CA 54,000 26,731 91,603 — 2,461 26,731 94,064 120,795 8,082 — 01/2019 (1),(2),(3)

C Beverly Hills Hotel Beverly Hills, CA 30,000 29,346 45,077 — 136 29,346 45,213 74,559 972 — 08/2021 (1),(2),(3)

Thomas, USVI 42,500 25,533 38,467 — 80,355 25,533 118,822 144,355 24,863 — December 2015 (1),(2),(3)

The Ritz-Carlton Lake Tahoe Truckee, CA 54,000 26,731 91,603 — 5,759 26,731 97,362 124,093 11,316 — January 2019 (1),(2),(3)

C Beverly Hills Hotel Beverly Hills, CA 30,000 29,346 45,078 — 820 29,346 45,898 75,244 3,424 — August 2021 (1),(2),(3)

The Ritz-Carlton Reserve Dorado Beach Dorado, Puerto Rico 54,000 79,711 117,510 — 1,270 79,711 118,780 198,491 5,124 — March 2022 (1),(2),(3)

Four Seasons Resort Scottsdale Scottsdale, AZ 100,000 70,248 197,610 — 383 70,248 197,993 268,241 781 — December 2022 (1),(2),(3)

Total $ 1,250,500 $ 634,603 $ 1,432,359 $ — $ 258,131 $ 634,603 $ 1,690,490 $ 2,325,093 $ 440,492

3 unchanged sentences

(3) Estimated useful life for furniture and fixtures is 1.5 to 5 years.

(4) The cost of land and depreciable property, net of accumulated depreciation, for U.S.

federal income tax purposes was approximately $ 1.9 billion as of December 31, 2022.

Year Ended December 31,

4 unchanged sentences

Write-offs ( 36,739 ) ( 32,677 ) ( 22,392 )

Impairment — — ( 476 )

Sales/disposals — ( 2,757 ) —

3 unchanged sentences

Depreciation expense 77,750 73,054 72,899

Impairment — — ( 105 )

Write-offs ( 36,739 ) ( 32,677 ) ( 22,392 )

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures