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, 2023, there were 601 holders of record.
Distributions and Our Distribution Policy
The board of directors declared cash dividends on the Company’s 5.5% Series B Cumulative Convertible Preferred Stock, 8.25% Series D Cumulative Preferred Stock, Series E Redeemable Preferred Stock and Series M Redeemable Preferred Stock for the quarters ending March 30, 2022, June 30, 2022, September 30, 2022, December 31, 2022 and March 31, 2023 in amounts that such holders of our preferred stock are entitled to received. We did not pay dividends on our common stock in fiscal years 2020 and 2021. 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. Our board of directors declared a quarterly cash dividend of $0.01 per diluted share for the Company’s common stock for the quarters ended March 30, 2022, June 30, 2022 and September 30, 2022. On December 8, 2022, our board of directors increased the quarterly cash dividend from $0.01 per diluted share to $0.05 per diluted share beginning with the Company’s common stock dividend for the fourth quarter of 2022 and approved the Company’s dividend policy for 2023. The Company expects to pay a quarterly cash dividend of $0.05 per share for the Company’s common stock for 2023, or $0.20 per share on an annualized basis. 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 will continue to review its dividend policy on a quarter-to-quarter basis.
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
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(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 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.
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Characterization of Distributions
For income tax purposes, distributions paid consist of ordinary income or capital gains. Distributions paid per share were characterized as follows:
2022 2021 2020
Amount % Amount % Amount %
Common Stock (cash):
Ordinary taxable dividend $ 0.0300 (1)
100.0000 % $ — — % $ — — %
Capital gain distribution — — —
— — —
Unrecaptured 1250 gain — — — — — —
Return of capital — — — — 0.1600 (1)
100.0000
Total $ 0.0300 100.0000 % $ — — % $ 0.1600 100.0000 %
Preferred Stock – Series B:
Ordinary taxable dividend $ 1.3752 (1)
100.0000 % $ — — % $ — — %
Capital gain distribution — — — — — —
Unrecaptured 1250 gain — — — — — —
Return of capital — — 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 taxable dividend $ 2.0624 (1)
100.0000 % $ — — % $ — — %
Capital gain distribution — — — — — —
Unrecaptured 1250 gain — — — — — —
Return of capital — — 2.0624 (1)
100.0000 2.0624 (1)
100.0000
Total $ 2.0624 100.0000 % $ 2.0624 100.0000 % $ 2.0624 100.0000 %
Preferred Stock – Series E:
Ordinary taxable dividend $ 1.9732 (1) (2)
100.0000 % — — — —
Capital gain distribution — — — — — —
Unrecaptured 1250 gain — — — — — —
Return of capital — — 0.8330 (1)
100.0000 — —
Total $ 1.9732 100.0000 % $ 0.8330 100.0000 % $ — — %
Preferred Stock – Series M (CUSIP #10482B705):
Ordinary taxable dividend 2.0621 (1) (2)
100.0000 % — — — —
Capital gain distribution — — — — — —
Unrecaptured 1250 gain — — — — — —
Return of capital — 0.6832 (1)
100.0000 — —
Total $ 2.0621 100.0000 % $ 0.6832 100.0000 % $ — — %
Preferred Stock – Series M (CUSIP #10482B887):
Ordinary taxable dividend 2.0538 (1) (2)
100.0000 % — — — —
Capital gain distribution — — — — — —
Unrecaptured 1250 gain — — — — — —
Return of capital — — 0.6832 (1)
100.0000 — —
Total $ 2.0538 100.0000 % $ 0.6832 100.0000 % $ — — %
Preferred Stock – Series M (CUSIP #10482B796, 10482B861, 10482B770 and 10482B846):
Ordinary taxable dividend 1.8788 (1) (2)
100.0000 % — — — —
Capital gain distribution — — — — — —
Unrecaptured 1250 gain — — — — — —
Return of capital — — — — — —
Total $ 1.8788 100.0000 % $ — — % $ — — %
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(1) 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 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. The distributions paid January 17, 2023 to stockholders of record as of December 30, 2022 are treated as 2023 distributions for tax purposes.
(2) Distributions per share reflects the annual rate per share for distributions reportable in 2022.
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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 (1)
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
972,728 N/A 1,469,068 (2)
Equity compensation plans not approved by security holders None N/A None
Total 972,728 N/A 1,469,068
____________________
(1) Consists of rights to acquire our common stock subject to the satisfaction of service and or performance vesting conditions (with the amount shown assuming the maximum level of performance under the 2021 and 2022 PSU awards). The number of shares subject to issuance under the PSUs (if any) will depend on the ultimate actual performance level, and the Company in its discretion may settle the 2022 PSUs in cash rather than shares of common stock.
(2) As of December 31, 2022, approximately 1,469,000 shares of our common stock, or securities convertible into approximately 1.5 million 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 7, 2022, our board of directors approved a new stock repurchase program pursuant to which the board granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share, having an aggregate value of up to $25 million. The Board’s authorization replaced any previous repurchase authorizations.
During the year ended December 31, 2022, we repurchased 1.5 million shares of our common stock for approximately $6.1 million. Subsequent to December 31, 2022, the Company repurchased approximately 3.9 million shares of its common stock for approximately $18.9 million. The Company repurchased approximately 5.4 million shares of its common stock for approximately $25.0 million and has completed the $25.0 million repurchase authorization.
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, 2022:
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 12,597 $ — (2)
— $ 50,000,000
November 1 to November 30 342 $ — (2)
— $ 50,000,000
December 1 to December 31 1,524,346 (1)
$ 4.04 1,511,044 $ 18,897,710
Total 1,537,285 $ 4.04 1,511,044
__________________
(1) Includes 13,302 shares in December that were withheld to cover tax-withholding requirements related to the vesting of restricted shares of our common stock issued to employees of our advisor pursuant to the Company’s stockholder-approved stock incentive plan.
(2) There is no cost associated with the forfeiture of restricted shares of 12,597 and 342 of our common stock in October and November, respectively.
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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, 2017 through December 31, 2022, 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.
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