4 unchanged sentences
(unaudited, in thousands, except share and per share amounts)
−Removed: June 30, 2023 December 31, 2022
+Added: September 30, 2023 December 31, 2022
Investments in hotel properties, gross $ 2,365,256 $ 2,325,093
13 unchanged sentences
Intangible assets, net 3,599 3,883
+Added: Due from Ashford Inc.
Due from related parties, net 520 938
12 unchanged sentences
Commitments and contingencies (note 15)
−Removed: 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
+Added: 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
−Removed: 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
+Added: 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
−Removed: 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
+Added: 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
1 unchanged sentence
Preferred stock, $ 0.01 par value, 80,000,000 shares authorized:
−Removed: 8.25 % Series D cumulative preferred stock, 1,600,000 shares issued and outstanding at June 30, 2023 and December 31, 2022
−Removed: 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
+Added: 8.25 % Series D cumulative preferred stock, 1,600,000 shares issued and outstanding at September 30, 2023 and December 31, 2022
+Added: 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
Additional paid-in capital 717,564 734,134
9 unchanged sentences
(unaudited, in thousands, except per share amounts)
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
18 unchanged sentences
Interest income 986 745 5,389 932
+Added: Other income (expense) 293 27 293 27
Interest expense and amortization of discounts and loan costs ( 23,306 ) ( 14,490 ) ( 69,779 ) ( 33,293 )
22 unchanged sentences
(unaudited, in thousands)
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
19 unchanged sentences
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
−Removed: 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
−Removed: Purchase of common stock — — ( 1 ) — ( 4 ) — — ( 4 ) — — — — — — —
+Added: 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
−Removed: Issuance of restricted shares/units — — 45 — — — — — — — — — — — —
Issuance of preferred stock — — — — — — — — — — 36 813 3 56 —
9 unchanged sentences
— — — — — ( 989 ) — ( 989 ) — — — — — — —
−Removed: Contributions from noncontrolling interests — — — — — — 2,026 2,026 — — — — — — —
Distributions to noncontrolling interests — — — — — — ( 2,740 ) ( 2,740 ) — — — — — — ( 361 )
−Removed: Redemption/conversion of operating partnership units — — — — — — — — — — — — — — ( 123 )
Net income (loss) — — — — — ( 22,030 ) 1,773 ( 20,257 ) — — — — — — ( 2,354 )
2 unchanged sentences
Redemption value adjustment — — — — — 15 — 15 — — — — — — ( 15 )
−Removed: 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
+Added: 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
29 unchanged sentences
Redemption value adjustment — — — — — 8 — 8 — — — — — — ( 8 )
−Removed: 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
+Added: 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
6 unchanged sentences
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
−Removed: 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
+Added: 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
−Removed: Common stock issuance costs — — — — ( 27 ) — — ( 27 ) — — — — — — —
Issuance of restricted shares/units — — 304 3 2 — — 5 — — — — — — —
16 unchanged sentences
Redemption value adjustment — — — — — ( 2 ) — ( 2 ) — — — — — — 2
−Removed: 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
+Added: Balance at September 30, 2022 1,600 $ 16 71,456 $ 714 $ 739,394 $ ( 307,745 ) $ ( 14,120 ) $ 418,259 3,078 $ 65,426 8,880 $ 204,252 1,067 $ 26,274 $ 40,635
8.25 % Series D Cumulative Preferred Stock
28 unchanged sentences
Redemption value adjustment — — — — — 206 — 206 — — — — — — ( 206 )
−Removed: 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
+Added: Balance at September 30, 2022
+Added: 1,600 $ 16 71,456 $ 714 739,394 $ ( 307,745 ) $ ( 14,120 ) $ 418,259 3,078 $ 65,426 8,880 $ 204,252 1,067 $ 26,274 $ 40,635
See Notes to Condensed Consolidated Financial Statements.
3 unchanged sentences
(unaudited, in thousands)
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES
50 unchanged sentences
Cash, cash equivalents and restricted cash at end of period $ 206,829 $ 412,810
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
SUPPLEMENTAL CASH FLOW INFORMATION
3 unchanged sentences
Dividends and distributions declared but not paid $ 8,967 $ 4,353
+Added: Common stock purchases accrued but not paid — 1
Assumption of debt in hotel acquisition — 58,601
3 unchanged sentences
Non-cash preferred stock dividends 2,682 639
+Added: Non-cash common stock dividends — 5
Unsettled proceeds from derivatives 479 —
30 unchanged sentences
These products and services include, but are not limited to, design and construction services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory and brokerage services, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and mobile key technology.
−Removed: The accompanying condensed consolidated financial statements include the accounts of wholly-owned and majority-owned subsidiaries of Braemar OP that as of June 30, 2023, own 16 hotel properties in seven states, the District of Columbia, Puerto Rico and the U.S.
+Added: The accompanying condensed consolidated financial statements include the accounts of wholly-owned and majority-owned subsidiaries of Braemar OP that as of September 30, 2023, own 16 hotel properties in seven states, the District of Columbia, Puerto Rico and the U.S.
Virgin Islands (“USVI”).
2 unchanged sentences
As a REIT, Braemar is required to comply with limitations imposed by the Code related to operating hotels.
−Removed: As of June 30, 2023, 15 of our 16 hotel properties were leased by wholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes (collectively the TRS entities are referred to as “Braemar TRS”).
+Added: As of September 30, 2023, 15 of our 16 hotel properties were leased by wholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes (collectively, the TRS entities are referred to as “Braemar TRS”).
One hotel property, located in the USVI, is owned by our USVI TRS.
1 unchanged sentence
Hotel operating results related to the hotel properties are included in the condensed consolidated statements of operations.
−Removed: As of June 30, 2023, 13 of the 16 hotel properties were leased by Braemar’s wholly-owned TRS, and the two hotel properties majority-owned through a consolidated partnership were leased to a TRS wholly-owned by such consolidated partnership.
+Added: As of September 30, 2023, 13 of the 16 hotel properties were leased by Braemar’s wholly-owned TRS, and the two hotel properties majority-owned through a consolidated partnership were leased to a TRS wholly-owned by such consolidated partnership.
Each leased hotel is leased under a percentage lease that provides for each lessee to pay in each calendar month the base rent plus, in each calendar quarter, percentage rent, if any, based on hotel revenues.
22 unchanged sentences
• Historical seasonality patterns at some of our hotel properties cause fluctuations in our overall operating results.
−Removed: Consequently, operating results for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023;
+Added: Consequently, operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023;
• On March 11, 2022, we acquired The Ritz-Carlton Reserve Dorado Beach hotel located in Dorado, Puerto Rico.
16 unchanged sentences
The following tables present our revenue disaggregated by geographical areas (dollars in thousands):
−Removed: Three Months Ended June 30, 2023
+Added: Three Months Ended September 30, 2023
Primary Geographical Market Number of Hotels Rooms Food and Beverage Other Hotel Total
11 unchanged sentences
Total 16 $ 100,738 $ 38,537 $ 20,526 $ 159,801
−Removed: Three Months Ended June 30, 2022
+Added: Three Months Ended September 30, 2022
Primary Geographical Market Number of Hotels Rooms Food and Beverage Other Hotel Total
10 unchanged sentences
Total 15 $ 104,503 $ 37,624 $ 19,062 $ 161,189
−Removed: Six Months Ended June 30, 2023
+Added: Nine Months Ended September 30, 2023
Primary Geographical Market Number of Hotels Rooms Food and Beverage Other Hotel Total
11 unchanged sentences
Total 16 $ 355,402 $ 138,541 $ 67,866 $ 561,809
−Removed: Six Months Ended June 30, 2022
+Added: Nine Months Ended September 30, 2022
Primary Geographical Market Number of Hotels Rooms Food and Beverage Other Hotel Total
15 unchanged sentences
Investments in hotel properties, net consisted of the following (in thousands):
−Removed: June 30, 2023 December 31, 2022
+Added: September 30, 2023 December 31, 2022
Land $ 630,842 $ 630,489
7 unchanged sentences
Impairment Charges
−Removed: During the three and six months ended June 30, 2023 and 2022, no impairment charges were recorded.
+Added: During the three and nine months ended September 30, 2023 and 2022, no impairment charges were recorded.
Investment in Unconsolidated Entity
1 unchanged sentence
(“OpenKey”), which is controlled and consolidated by Ashford Inc., is a hospitality-focused mobile key platform that provides a universal smart phone app and related hardware and software for keyless entry into hotel guest rooms.
−Removed: As of June 30, 2023, the Company has made equity investments in OpenKey totaling $ 2.9 million.
+Added: As of September 30, 2023, the Company has made equity investments in OpenKey totaling $ 2.9 million.
All investments were recommended by our Related Party Transactions Committee and unanimously approved by the independent members of our board of directors.
3 unchanged sentences
Any impairment is recorded in equity in earnings (loss) of unconsolidated entity.
−Removed: No such impairment was recorded for the three and six months ended June 30, 2023 and 2022.
+Added: No such impairment was recorded for the three and nine months ended September 30, 2023 and 2022.
The following table summarizes our carrying value and ownership interest in OpenKey:
−Removed: June 30, 2023 December 31, 2022
+Added: September 30, 2023 December 31, 2022
Carrying value of the investment in OpenKey (in thousands) $ 1,470 $ 1,689
1 unchanged sentence
The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
Line Item 2023 2022 2023 2022
5 unchanged sentences
Additionally, repayment of the loan principal and all accrued interest is due upon certain events.
−Removed: On June 9, 2023, the Company funded approximately $ 59,000 .
−Removed: As of June 30, 2023, the Company has funded approximately $ 158,000 .
−Removed: The following table summarizes our note receivable from OpenKey (in thousands):
−Removed: Line Item June 30, 2023 December 31, 2022
−Removed: Investment in unconsolidated entity $ 164 $ —
+Added: On September 28, 2023, the Company funded approximately $ 79,000 .
+Added: As of September 30, 2023, the Company has funded approximately $ 237,000 .
BRAEMAR HOTELS & RESORTS INC.
1 unchanged sentence
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
+Added: The following table summarizes our note receivable from OpenKey (in thousands):
+Added: Line Item September 30, 2023 December 31, 2022
+Added: Investment in unconsolidated entity $ 248 $ —
The following table summarizes the interest income associated with the loan to OpenKey (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
Line Item 2023 2023
4 unchanged sentences
Maturity (11)
−Removed: Interest Rate June 30, 2023 December 31, 2022
−Removed: Mortgage loan (3)
−Removed: The Ritz-Carlton Sarasota April 2023 April 2023 LIBOR (1) + 2.65 %
−Removed: Mortgage loan (4)
−Removed: Hotel Yountville May 2023 May 2023 LIBOR (1) + 2.55 %
−Removed: Mortgage loan Bardessono Hotel and Spa August 2023 August 2023 SOFR (2) + 2.65 %
−Removed: 40,000 40,000
+Added: Interest Rate September 30, 2023 December 31, 2022
Mortgage loan (4)
−Removed: The Ritz-Carlton St.
−Removed: Thomas August 2023 August 2024 LIBOR (1) + 3.95 %
−Removed: 42,500 42,500
+Added: Bardessono Hotel and Spa August 2023 August 2023 SOFR (2) + 2.65 %
Mortgage loan (4)
−Removed: The Ritz-Carlton Sarasota October 2023 April 2024 SOFR (2) + 3.60 %
+Added: The Ritz-Carlton Sarasota October 2023
+Added: April 2024 LIBOR (1) + 2.65 %
Mortgage loan (4)
−Removed: Hotel Yountville November 2023 May 2024 SOFR (2) + 2.65 %
+Added: Hotel Yountville November 2023
+Added: May 2024 LIBOR (1) + 2.55 %
Mortgage loan The Ritz-Carlton Lake Tahoe January 2024 January 2024 SOFR (2) + 2.20 %
54,000 54,000
−Removed: Mortgage loan Capital Hilton February 2024 February 2024 LIBOR (1) + 1.70 %
+Added: Mortgage loan Capital Hilton February 2024 February 2024 SOFR (2) + 1.70 %
195,000 195,000
6 unchanged sentences
Mortgage loan (7)
−Removed: The Notary Hotel June 2024 June 2025 LIBOR (1) + 2.61 %
+Added: The Notary Hotel June 2024 June 2025 SOFR (2) + 2.66 %
293,180 435,000
2 unchanged sentences
Mortgage loan (8)
−Removed: C Beverly Hills Hotel August 2024 August 2024 LIBOR (1) + 3.60 %
+Added: Cameo Beverly Hills
+Added: August 2024 August 2024 SOFR (2) + 3.66 %
30,000 30,000
+Added: Mortgage loan (9)
+Added: The Ritz-Carlton St.
+Added: Thomas August 2024
+Added: August 2024 SOFR (2) + 4.04 %
+Added: 42,500 42,500
Mortgage loan Pier House Resort & Spa September 2024 September 2024 SOFR (2) + 1.95 %
80,000 80,000
+Added: Convertible Senior Notes Equity June 2026 June 2026 4.50 % 86,250 86,250
+Added: BAML Credit Facility (4)
+Added: Bardessono Hotel and Spa
+Added: July 2027 Base Rate (3) + 1.25 % to 2.00 % or SOFR (2) + 2.35 % to 3.10 %
+Added: Hotel Yountville
+Added: The Ritz-Carlton Sarasota
Mortgage loan (10)
1 unchanged sentence
140,000 100,000
−Removed: Convertible Senior Notes Equity June 2026 June 2026 4.50 % 86,250 86,250
1,187,430 1,336,750
4 unchanged sentences
__________________
−Removed: (1) LIBOR rates were 5.22 % and 4.39 % at June 30, 2023 and December 31, 2022, respectively.
−Removed: (2) SOFR rates were 5.14 % and 4.36 % at June 30, 2023 and December 31, 2022, respectively.
−Removed: (3) On April 4, 2023, we amended this mortgage loan.
−Removed: Terms of the amendment replaced the variable interest rate of LIBOR + 2.65 % with SOFR + 2.75 %, extended the current maturity date to October 2023, and added one six-month extension option, subject to satisfaction of certain conditions.
−Removed: Effective June 1, 2023, the variable interest rate increased from SOFR + 2.75 % to SOFR + 3.60 % in accordance with the loan agreement.
−Removed: (4) On April 18, 2023, we amended this mortgage loan.
−Removed: Terms of the amendment replaced the variable interest rate of LIBOR + 2.55 % with SOFR + 2.65 %, extended the current maturity date to November 2023, and added one six-month extension option, subject to satisfaction of certain conditions.
−Removed: (5) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the second was exercised in August 2022.
−Removed: This mortgage loan has a LIBOR floor of 1.00 %.
+Added: (1) LIBOR rate was 4.39 % at December 31, 2022.
+Added: (2) SOFR rates were 5.32 % and 4.30 % at September 30, 2023 and December 31, 2022, respectively.
+Added: (3) Base Rate, as defined in the secured credit facility agreement, is the greater of (i) the prime rate set by Bank of America, (ii) federal funds rate + 0.50 %, (iii) Term SOFR + 1.00 %, or (iv) 1.00 %.
+Added: (4) On July 31, 2023, we entered into a new $ 200.0 million secured credit facility comprised of a $ 150.0 million term loan and a $ 50.0 million secured revolving credit facility with a three-year initial term and one one-year extension option, subject to satisfaction of certain conditions.
+Added: The new facility is interest only and bears interest at a rate of SOFR + 2.35 % to 3.10 %.
+Added: Proceeds from the facility were used to repay the mortgage loans secured by Bardessono Hotel & Spa, Hotel Yountville, and The Ritz-Carlton Sarasota.
(5) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions.
2 unchanged sentences
In accordance with exercising the fourth one-year extension option, we repaid $ 142.0 million of principal and the variable interest rate increased from LIBOR + 2.16 % to LIBOR + 2.61 %.
−Removed: (9) This mortgage loan has a LIBOR floor of 1.50 %.
−Removed: (10) This mortgage loan has a SOFR floor of 1.00 %.
−Removed: (11) The final maturity date assumes all available extension options will be exercised.
−Removed: During the second and third quarters of 2020, we reached forbearance and other agreements with our lenders relating to loans secured by certain of our hotels.
−Removed: The Company determined that all of the forbearance and other agreements evaluated
+Added: This loan transitioned from LIBOR to SOFR in July and the variable interest rate increased from LIBOR + 2.61 % to SOFR + 2.66 %.
BRAEMAR HOTELS & RESORTS INC.
1 unchanged sentence
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
−Removed: were considered troubled debt restructurings due to terms that allowed for deferred interest and the forgiveness of default interest and late charges.
+Added: (8) This loan transitioned from LIBOR to SOFR in July and the variable interest rate increased from LIBOR + 3.60 % to SOFR + 3.66 %.
+Added: This mortgage loan has a SOFR floor of 1.50 %.
+Added: (9) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the third was exercised in August 2023.
+Added: This loan transitioned from LIBOR to SOFR in July and the variable interest rate increased from LIBOR + 3.95 % to SOFR + 4.04 %.
+Added: This mortgage loan has a SOFR floor of 1.00 %.
+Added: (10) On September 29, 2023, we amended this mortgage loan.
+Added: Terms of the amendment included increasing the outstanding principal from $ 100.0 million to $ 140.0 million, and extending the current maturity date by one year to December 2026.
+Added: This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions.
+Added: This mortgage loan has a SOFR floor of 1.00 %.
+Added: (11) The final maturity date assumes all available extensions options will be exercised.
+Added: During the second and third quarters of 2020, we reached forbearance and other agreements with our lenders relating to loans secured by certain of our hotels.
+Added: The Company determined that all of the forbearance and other agreements evaluated were considered troubled debt restructurings due to terms that allowed for deferred interest and the forgiveness of default interest and late charges.
As a result of the troubled debt restructurings, all accrued default interest and late charges were capitalized into the applicable loan balances and are being amortized over the remaining term of the loans using the effective interest method.
−Removed: The amount of principal that was amortized was approximately $ 420,000 and $ 888,000 , respectively, for the three and six months ended June 30, 2023.
−Removed: For the three and six months ended June 30, 2022, the amount of principal amortization was $ 500,000 and $ 1.0 million, respectively.
−Removed: On January 18, 2023, the Company repaid its $ 54.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which resulted in a gain on extinguishment of debt of $ 2.3 million for the six months ended June 30, 2023.
+Added: The amount of principal that was amortized was approximately $ 421,000 and $ 1.3 million, respectively, for the three and nine months ended September 30, 2023.
+Added: For the three and nine months ended September 30, 2022, the amount of principal amortization was $ 481,000 and $ 1.5 million, respectively.
+Added: On January 18, 2023, the Company repaid its $ 54.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which resulted in a gain on extinguishment of debt of $ 2.3 million for the nine months ended September 30, 2023.
The gain was primarily attributable to the premium that was recorded upon the assumption of the mortgage loan when the hotel was acquired.
6 unchanged sentences
The Convertible Senior Notes will mature on June 1, 2026.
−Removed: For the three and six months ended June 30, 2023, the Company recorded coupon interest expense of $ 970,000 and $ 1.9 million, respectively.
−Removed: For the three and six months ended June 30, 2022, the Company recorded coupon interest expense of $ 970,000 and $ 1.9 million, respectively.
−Removed: For the three and six months ended June 30, 2023, the Company recorded discount amortization of $ 146,000 and $ 290,000 , respectively, related to the initial purchase discount, with the remaining discount balance to be amortized through June 2026.
−Removed: For the three and six months ended June 30, 2022, the discount amortization was $ 139,000 and $ 271,000 , respectively.
+Added: For the three and nine months ended September 30, 2023, the Company recorded coupon interest expense of $ 970,000 and $ 2.9 million, respectively.
+Added: For the three and nine months ended September 30, 2022, the Company recorded coupon interest expense of $ 970,000 and $ 2.9 million, respectively.
+Added: For the three and nine months ended September 30, 2023, the Company recorded discount amortization of $ 148,000 and $ 438,000 , respectively, related to the initial purchase discount, with the remaining discount balance to be amortized through June 2026.
+Added: For the three and nine months ended September 30, 2022, the discount amortization was $ 140,000 and $ 411,000 , respectively.
The Convertible Senior Notes are convertible at any time prior to the close of business on the business day immediately preceding the maturity date for cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the election of the Company, based on an initial conversion rate of 157.7909 shares of the Company’s common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $ 6.34 per share of common stock), subject to adjustment of the conversion rate under certain circumstances.
In addition, following the occurrence of certain corporate events, if the Company provides notice of redemption or if it exercises its option to convert the Convertible Senior Notes, the Company will, in certain circumstances, increase the conversion rate for a holder that converts its Convertible Senior Notes in connection with such corporate event, such notice of redemption, or such issuer conversion option, as the case may be.
−Removed: The Company may redeem the Convertible Senior Notes at the Company’s option, in whole or in part, on any business day on or after the date of issuance if the last reported sale price per share of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a notice of redemption at a redemption price equal to 100 % of the principal amount of the Convertible Senior Notes to be redeemed subject to certain adjustments, plus accrued and unpaid interest to, but excluding, the redemption date.
+Added: The Company may redeem the Convertible Senior Notes at the Company’s option, in whole or in part, on any business day on or after the date of issuance if the last reported sale price per share of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a notice
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
+Added: of redemption at a redemption price equal to 100 % of the principal amount of the Convertible Senior Notes to be redeemed subject to certain adjustments, plus accrued and unpaid interest to, but excluding, the redemption date.
+Added: Credit Facility
+Added: On July 31, 2023, the Company entered into a Credit Agreement (the “Credit Agreement”) with Braemar OP (the “Borrower”), the lenders party thereto (the “Lenders”) and Bank of America, N.A., as administrative agent and L/C Issuer (as defined in the Credit Agreement).
+Added: Bank of America, N.A.
+Added: acted as administrative agent and lead arranger on the transaction.
+Added: Syndicate bank participants include TBK Bank and MidFirst Bank.
+Added: The Credit Agreement evidences a $ 200 million secured credit facility (the “Facility”) comprised of a secured term loan facility of $ 150 million (the “Term Loan Facility”) and a secured revolving credit facility of $ 50 million (the “Revolving Credit Facility”).
+Added: Upon satisfaction of certain conditions, including the addition of new Borrowing Base Properties (as defined in the Credit Agreement), the Facility may be increased to a size of not more than $ 400 million in the aggregate.
+Added: The maximum availability under the Facility is determined on a quarterly basis and limited to the lesser of (i) $ 200 million (subject to increase of up to $ 400 million in the aggregate);
+Added: (ii) 55 % of the appraised value of all Borrowing Base Properties;
+Added: and (iii) the DSC Amount (as defined below).
+Added: The initial Borrowing Base Properties include the Company’s Ritz-Carlton Sarasota, Bardessono Hotel and Spa and Hotel Yountville hotel properties (the “Initial Borrowing Base Properties”).
+Added: The “DSC Amount” means the maximum principal amount that can be supported from the Adjusted NOI (as defined in the Credit Agreement) from the Borrowing Base Properties assuming:
+Added: (i) a 30-year amortization and an interest rate which is the greater of (a) the ten ( 10 ) year U.S.
+Added: Treasury Rate plus 2.50 % and (b) 7.50 %;
+Added: and (ii) a minimum debt service coverage of 1.75 to 1.00.
+Added: The proceeds of the Term Loan Facility were used to repay the mortgage debt associated with The Ritz-Carlton Sarasota, Bardessono Hotel and Spa and Hotel Yountville, which serve as the Initial Borrowing Base Properties for the financing.
+Added: In addition, at closing, the Company drew down approximately $ 46 million under the Revolving Credit Facility.
+Added: The Facility is a three-year , interest-only facility with all outstanding principal due at maturity, with a one-year extension option, subject to the satisfaction of certain conditions, including the payment of an Extension Fee (as defined in the Credit Agreement) equal to 20 basis points ( 0.20 %) of the outstanding Facility amount.
+Added: The Credit Agreement is guaranteed by the Company, the Borrower and certain other eligible subsidiaries of the Company and secured by:
+Added: (i) perfected lien mortgages or deeds of trust and security interests in the Borrowing Base Properties (as defined in the Credit Agreement);
+Added: (ii) assignments of leases and rents with respect to the Borrowing Base Properties;
+Added: (iii) assignments of all management agreements, franchise agreements, licenses and other material agreements relating to the Borrowing Base Properties;
+Added: (iv) perfected first priority liens on all reserve accounts and all operating accounts related to each Borrowing Base Property;
+Added: and (v) perfected first priority liens on and security interests in each subsidiary guarantor owning a Borrowing Base Property.
+Added: Borrowings under the Credit Agreement will bear interest at Daily SOFR or Term SOFR plus 10 basis points (with a 0 % floor) plus the applicable margin.
+Added: Depending on the Company’s Net Debt to EBITDA ratio, the applicable margin for SOFR ranges from 2.25 % to 3.00 %.
+Added: Default interest would accrue at the applicable rate plus 2.0 %.
+Added: The Facility contains customary terms, covenants, negative covenants, events of default, limitations and other conditions for credit facilities of this type.
+Added: Subject to certain exceptions, the Company and the Borrower are subject to restrictions on incurring additional indebtedness and liens, investments, mergers and fundamental changes, sales or other dispositions of property, dividends and stock redemptions, changes in the nature of the Borrower’s business, transactions with affiliates and burdensome agreements.
+Added: Financial covenants are generally based on the financial condition and results of operations of the Company and its consolidated subsidiaries and include, among others, the following:
+Added: (i) a Consolidated Leverage Ratio (i.e., Consolidated Net Debt to the Consolidated Total Asset Value) of not more than 55 %;
+Added: (ii) a Consolidated Fixed Charge Coverage Ratio (FCCR) (i.e., the ratio of Consolidated Adjusted EBITDA to Consolidated Fixed Charges) of not less than (i) prior to December 31, 2024, 1.1 to 1.0 and (ii) thereafter, 1.25 to 1.0.
+Added: The Credit Agreement includes customary events of default, and the occurrence of an event of default will permit the Lenders to terminate commitments to lend under the Credit Agreement and accelerate payments of all amounts outstanding thereunder.
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Effective June 30, 2023, LIBOR is no longer published.
3 unchanged sentences
The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of the consolidated group.
−Removed: As of June 30, 2023, we were in compliance with all covenants.
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
+Added: As of September 30, 2023, we were in compliance with all covenants.
Derivative Instruments
4 unchanged sentences
The following table summarizes the interest rate derivatives we entered into over the applicable periods:
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Interest rate caps:
2 unchanged sentences
Strike rate high end of range 5.25 % 4.00 %
−Removed: Effective date range January 2023 - June 2023 February 2022-May 2022
−Removed: Termination date range October 2023 - June 2024 May 2023- February 2024
+Added: Effective date range January 2023 - September 2023
+Added: February 2022-September 2022
+Added: Termination date range October 2023 - October 2024
+Added: May 2023- February 2024
Total cost of interest rate caps (in thousands) $ 3,981 $ 2,092
3 unchanged sentences
Interest rate caps:
−Removed: June 30, 2023 December 31, 2022
+Added: September 30, 2023 December 31, 2022
Notional amount (in thousands) $ 856,680 $ 960,500
1 unchanged sentence
Strike rate high end of range 5.25 % 4.50 %
−Removed: Termination date range August 2023 - January 2025 January 2023- January 2025
+Added: Termination date range October 2023 - January 2025
+Added: January 2023- January 2025
Aggregate principal balance on corresponding mortgage loans (in thousands) $ 863,680 $ 959,000
1 unchanged sentence
(1) No instruments were designated as cash flow hedges.
−Removed: Warrants —On August 5, 2021, as part of the consideration paid to acquire the Mr.
+Added: Warrants —On August 5, 2021, as part of the consideration paid to acquire the Cameo Beverly Hills (formerly known as the Mr.
C Beverly Hills Hotel) and five adjacent luxury residences, the Company issued 500,000 warrants for the purchase of Braemar common stock with a $ 6.00 strike price on or after August 5, 2021 until August 5, 2024.
The holder can choose to exercise the warrants by cash or by net issue exercise, in which event the Company shall issue to the holder a number of warrant shares which reflect the fair market value of the Company’s common stock.
−Removed: As of June 30, 2023, no warrants have been exercised.
+Added: As of September 30, 2023, no warrants have been exercised.
The initial fair value of the warrants was calculated using a Black-Scholes option pricing model with the following assumptions:
5 unchanged sentences
The warrants are re-valued at each reporting period with the change in fair value recorded through earnings.
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
In applying the guidance in ASC 815, it was determined that the warrants should be classified as a liability as a result of certain settlement provisions.
7 unchanged sentences
Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Fair value measurements based on valuation techniques that use significant inputs that are unobservable.
6 unchanged sentences
Transfers of inputs between levels are determined at the end of each reporting period.
−Removed: In determining the fair values of our derivatives at June 30, 2023, the SOFR interest rate forward curve (Level 2 inputs) assumed a downtrend from 5.141 % to 3.686 % for the remaining term of our derivatives.
+Added: In determining the fair values of our derivatives at September 30, 2023, the SOFR interest rate forward curve (Level 2 inputs) assumed a downtrend from 5.320 % to 4.220 % for the remaining term of our derivatives.
Credit spreads (Level 3 inputs) used in determining the fair values derivatives assumed an uptrend in nonperformance risk for us and all of our counterparties through the maturity dates.
5 unchanged sentences
(Level 3) Total
−Removed: June 30, 2023
+Added: September 30, 2023
Derivative assets:
4 unchanged sentences
Net $ — $ 4,934 $ — $ 4,934
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Quoted Market Prices (Level 1) Significant Other
12 unchanged sentences
(2) Reported as “derivative liabilities” in our condensed consolidated balance sheets.
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Effect of Fair Value Measured Assets and Liabilities on Condensed Consolidated Statements of Operations
1 unchanged sentence
Gain (Loss) Recognized in Income
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
1 unchanged sentence
Interest rate derivatives - caps $ 69 $ 2,138 (1)
+Added: $ 645 $ 3,024 (1)
Total $ 69 $ 2,138 $ 645 $ 3,024
10 unchanged sentences
Net $ 223 $ 2,430 $ 918 $ 4,046
−Removed: (1) Reported in “realized and unrealized gain (loss) on derivatives” in our consolidated statements of operations.
+Added: (1) Excludes income of $ 27,000 for both the three and nine months ended September 30, 2022, associated with payments received from counterparties on interest rate caps, which is included in “other income (expense)” in our condensed consolidated statements of operations.
+Added: (2) Reported in “realized and unrealized gain (loss) on derivatives” in our condensed consolidated statements of operations.
(3) Represents settled and unsettled payments from counterparties on interest rate caps.
3 unchanged sentences
Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold or settled.
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):
−Removed: June 30, 2023 December 31, 2022
+Added: September 30, 2023 December 31, 2022
Value Estimated
9 unchanged sentences
Accounts receivable, net 35,939 35,939 51,448 51,448
+Added: Due from Ashford Inc.
+Added: 1,538 1,538 — —
Due from related parties, net 520 520 938 938
8 unchanged sentences
Due to third-party hotel managers 1,615 1,615 2,096 2,096
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Cash, cash equivalents and restricted cash .
2 unchanged sentences
This is considered a Level 1 valuation technique.
−Removed: Accounts receivable, net, due from related parties, net, accounts payable and accrued expenses, dividends and distributions payable, due to Ashford Inc.
+Added: Accounts receivable, net, due from related parties, net, accounts payable and accrued expenses, dividends and distributions payable, due to/from Ashford Inc.
and due to/from third-party hotel managers .
9 unchanged sentences
Credit spreads take into consideration general market conditions, maturity and collateral.
−Removed: We estimated the fair value of the total indebtedness to be approximately 92.2 % to 101.9 % of the carrying value of $ 1.1 billion at June 30, 2023, and approximately 92.0 % to 101.6 % of the carrying value of $ 1.3 billion at December 31, 2022.
+Added: We estimated the fair value of the total indebtedness to be approximately 91.9 % to 101.6 % of the carrying value of $ 1.2 billion at September 30, 2023, and approximately 92.0 % to 101.6 % of the carrying value of $ 1.3 billion at December 31, 2022.
These fair value estimates are considered a Level 2 valuation technique.
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Income (Loss) Per Share
The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
10 unchanged sentences
dividends on common stock 3,291 710 9,871 2,124
−Removed: Distributed and undistributed net income (loss) - basic $ ( 13,068 ) $ 10,120 $ ( 9,883 ) $ 21,268
−Removed: Interest expense on Convertible Senior Notes — 1,108 — 2,211
−Removed: Dividends on preferred stock - Series E (inclusive of deemed dividends) — 2,053 — 3,452
−Removed: Dividends on preferred stock - Series M (inclusive of deemed dividends) — 128 — 149
−Removed: Distributed and undistributed net income (loss) - diluted $ ( 13,068 ) $ 13,409 $ ( 9,883 ) $ 27,080
+Added: Distributed and undistributed net income (loss) - basic and diluted
+Added: $ ( 33,172 ) $ ( 16,726 ) $ ( 43,055 ) $ 2,665
Weighted average common shares outstanding:
1 unchanged sentence
Effect of assumed exercise of warrants — — — 1
−Removed: Effect of assumed conversion of Convertible Senior Notes — 13,610 — 13,610
−Removed: Effect of assumed conversion of preferred stock - Series E — 22,207 — 16,232
−Removed: Effect of assumed conversion of preferred stock - Series M — 1,112 — 630
Weighted average common shares outstanding – diluted 65,825 70,956 68,010 69,214
3 unchanged sentences
Net income (loss) allocated to common stockholders per share $ ( 0.50 ) $ ( 0.24 ) $ ( 0.63 ) $ 0.04
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Due to their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect the adjustments for the following items (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
17 unchanged sentences
Total 185,776 69,299 153,306 50,083
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Redeemable Noncontrolling Interests in Operating Partnership
12 unchanged sentences
The award agreements provide for the grant of a target number of Performance LTIP units that will be settled in common units of Braemar OP, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date.
−Removed: As of June 30, 2023, there were approximately 2.4 million Performance LTIP units, representing 200 % of the target, outstanding.
+Added: As of September 30, 2023, there were approximately 2.4 million Performance LTIP units, representing 200 % of the target, outstanding.
With respect to the 2021, 2022 and 2023 award agreements, the compensation committee shifted to a new performance metric, pursuant to which, the performance awards will be eligible to vest, from 0 % to 200 % of target, based on achievement of certain performance targets over the three -year performance period.
The performance criteria for the 2021, 2022 and 2023 performance grants are based on performance conditions under the relevant literature.
−Removed: The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the applicable measurement date
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
−Removed: fair value of the award.
+Added: The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the applicable measurement date fair value of the award.
The grant date fair value of the award may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.
2 unchanged sentences
The 2023 awards, which were originally classified as liability awards, are now classified as equity awards, within temporary equity, which resulted in a remeasurement of the award at a new fair value of $ 4.07 per share.
−Removed: On May 10, 2023, approximately 45,000 LTIP units were issued to independent directors, with a fair value of approximately $ 182,000 , which vested immediately upon grant and have been expensed during the three and six months ended June 30, 2023.
−Removed: As of June 30, 2023, we have issued a total of approximately 3.8 million LTIP and Performance LTIP units, net of Performance LTIP cancellations.
+Added: On May 10, 2023, approximately 45,000 LTIP units were issued to independent directors, with a fair value of approximately $ 182,000 , which vested immediately upon grant and have been expensed during the nine months ended September 30, 2023.
+Added: As of September 30, 2023, we have issued a total of approximately 3.8 million LTIP and Performance LTIP units, net of Performance LTIP cancellations.
All LTIP and Performance LTIP units, other than approximately 614,000 LTIP units and 1.2 million Performance LTIP units issued from March 2015 to May 2023, had reached full economic parity with, and are convertible into, common units.
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
The following table presents the redeemable noncontrolling interests in Braemar OP and the corresponding approximate ownership percentage of our operating partnership:
−Removed: June 30, 2023 December 31, 2022
+Added: September 30, 2023 December 31, 2022
Redeemable noncontrolling interests in Braemar OP (in thousands) $ 33,494 $ 40,555
4 unchanged sentences
We allocated net (income) loss to the redeemable noncontrolling interests as illustrated in the table below (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
9 unchanged sentences
On May 12, 2023, the Company received a Notice of Redemption with respect to 32,500 vested common units, and such redemption was settled in cash at the Company’s election for approximately $ 123,000 .
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Equity and Stock-Based Compensation
Common Stock Dividends —The following table summarizes the common stock dividends declared during the period (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
2 unchanged sentences
We also issue common stock to certain of our independent directors, which vests immediately upon issuance.
−Removed: In May 2023, approximately 45,000 shares of common stock were issued to independent directors with a fair value of approximately $ 182,000 , which vested immediately upon grant and have been expensed during the three and six months ended June 30, 2023.
+Added: In May 2023, approximately 45,000 shares of common stock were issued to independent directors with a fair value of approximately $ 182,000 , which vested immediately upon grant and have been expensed during the nine months ended September 30, 2023.
Performance Stock Units —The compensation committee of the board of directors of the Company may authorize the issuance of grants of performance stock units (“PSUs”) to certain executive officers and directors from time to time.
The award agreements provide for the grant of a target number of PSUs that will be settled in shares of common stock of the Company, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date.
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
With respect to the 2021, 2022 and 2023 award agreements, the compensation committee shifted to a new performance metric, pursuant to which, the performance awards will be eligible to vest, from 0 % to 200 % of target, based on achievement of certain performance targets over the three-year performance period.
7 unchanged sentences
The following table summarizes dividends declared (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
2 unchanged sentences
The board of directors’ authorization replaced any previous repurchase authorizations.
−Removed: During the six months ended June 30, 2023, we repurchased 3.9 million shares of our common stock for approximately $ 18.9 million.
−Removed: As of June 30, 2023, the Company has completed the $ 25.0 million repurchase authorization .
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
+Added: During the nine months ended September 30, 2023, we repurchased 3.9 million shares of our common stock for approximately $ 18.9 million.
+Added: As of September 30, 2023, the Company has completed the $ 25.0 million repurchase authorization .
Redeemable Preferred Stock
8 unchanged sentences
2) a special optional redemption, in which on or prior to the occurrence of a Change of Control (as defined in the Articles Supplementary), the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $ 25.00 per share;
−Removed: and 3) a “REIT Termination Event” and “Listing Event Redemption,” in which at any time (i) a REIT Termination Event (as defined below) occurs or (ii) the Company’s common stock fails to be listed on the NYSE, NYSE American, or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor thereto (each a “National Exchange”), the holder of Series B Convertible Preferred Stock shall have the right to require the Company to redeem any or all shares of Series B Convertible Preferred Stock at 103 % of the liquidation preference ($ 25.00 per share, plus any accumulated, accrued, and unpaid dividends) in cash.
+Added: and 3) a “REIT Termination Event” and “Listing Event Redemption,” in which at any time (i) a REIT Termination Event (as defined below) occurs or (ii) the Company’s common stock fails to be listed on the NYSE, NYSE American, or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor thereto (each, a “National Exchange”), the holder of Series B Convertible Preferred Stock shall have the right to require the Company to
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
+Added: redeem any or all shares of Series B Convertible Preferred Stock at 103 % of the liquidation preference ($ 25.00 per share, plus any accumulated, accrued, and unpaid dividends) in cash.
A “REIT Termination Event,” shall mean the earliest of:
7 unchanged sentences
The following table summarizes dividends declared (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
5 unchanged sentences
The Company is also offering a maximum of 8,000,000 shares of the Series E Preferred Stock pursuant to a dividend reinvestment plan (the “DRIP”) at $ 25.00 per share (the “Stated Value”).
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
The Series E Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series B Convertible Preferred stock, the Series D Preferred Stock and the Series M Preferred Stock (as defined below)) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs.
8 unchanged sentences
• 5.0 % of the Stated Value beginning on the second anniversary from the Original Issue Date of the shares of the Series E Preferred Stock to be redeemed;
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
• 0 % of the Stated Value beginning on the third anniversary from the Original Issue Date of the shares of the Series E Preferred Stock to be redeemed.
8 unchanged sentences
The issuance activity of the Series E Preferred Stock is summarized below (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
4 unchanged sentences
(1) Exclusive of shares issued under the DRIP.
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
The Series E Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside of the Company’s control.
3 unchanged sentences
The redemption value adjustment of Series E Preferred Stock is summarized below (in thousands):
−Removed: June 30, 2023 December 31, 2022
+Added: September 30, 2023 December 31, 2022
Series E Preferred Stock $ 377,876 $ 291,076
3 unchanged sentences
The following table summarizes dividends declared (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Series E Preferred Stock $ 7,710 $ 3,697 $ 23,230 $ 7,149
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
The redemption activities of Series E Preferred Stock is summarized below (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
10 unchanged sentences
Each share is redeemable at any time, at the option of the holder, at a redemption price of $ 25.00 per share, plus any accumulated, accrued and unpaid dividends, less a redemption fee.
−Removed: Starting on the second anniversary, each share is redeemable at any time, at the option of the Company, at a redemption price of $ 25.00 per share, plus any accumulated, accrued and unpaid
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
−Removed: dividends (with no redemption fee).
+Added: Starting on the second anniversary, each share is redeemable at any time, at the option of the Company, at a redemption price of $ 25.00 per share, plus any accumulated, accrued and unpaid dividends (with no redemption fee).
The Series M Preferred Stock is also subject to conversion upon certain events constituting a change of control.
7 unchanged sentences
provided, however, that the dividend rate for any share of Series M Preferred Stock shall not exceed 8.7 % per annum of the Stated Value.
−Removed: Dividends are payable on a monthly basis and in arrears on the 15th day of each month (or, if such payment date is not a business day, on the next succeeding business day) to holders of record at the close of business on the last business day of each month immediately preceding the applicable dividend payment date.
+Added: Dividends are payable on a monthly basis and in arrears on the 15th day of each month (or, if such payment date is not a business day, on the next succeeding business day) to holders of record at the close of business on the last business day of each
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
+Added: month immediately preceding the applicable dividend payment date.
Dividends will be computed on the basis of twelve 30-day months and a 360-day year.
1 unchanged sentence
The issuance activity of Series M Preferred Stock is summarized below (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
9 unchanged sentences
The redemption value adjustment of Series M Preferred stock is summarized below (in thousands):
−Removed: June 30, 2023 December 31, 2022
+Added: September 30, 2023 December 31, 2022
Series M Preferred Stock $ 47,460 $ 35,182
3 unchanged sentences
(1) Reflects the excess of the redemption value over the accumulated carrying value.
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
The following table summarizes dividends declared (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
1 unchanged sentence
The redemption activities of Series M Preferred Stock is summarized below (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
8 unchanged sentences
We pay a monthly base fee equal to 1/12 th of the sum of (i) 0.70 % of the total market capitalization of our company for the prior month, plus (ii) the Net Asset Fee Adjustment (as defined in our advisory agreement), if any, on the last day of the prior month during which our advisory agreement was in effect;
−Removed: provided, however, in no event shall the base fee for any month be less than the minimum base fee as provided by our advisory agreement.
+Added: provided, however, in no event shall the base fee for
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
+Added: any month be less than the minimum base fee as provided by our advisory agreement.
The base fee is payable on the fifth business day of each month.
7 unchanged sentences
The following table summarizes the advisory services fees incurred (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
9 unchanged sentences
(2) Equity-based compensation is associated with equity grants of Braemar’s common stock, PSUs, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Pursuant to the Company’s hotel management agreements with each hotel management company, the Company bears the economic burden for casualty insurance coverage.
11 unchanged sentences
The fee is payable monthly in arrears.
−Removed: As of June 30, 2023, “due to Ashford Inc.” includes a $ 365,000 security deposit paid to Remington Hotel Corporation (“RHC”) for office space allocated to us under our advisory agreement.
+Added: As of September 30, 2023, “due from Ashford Inc.” includes a $ 365,000 security deposit paid to Remington Hotel Corporation (“RHC”) for office space allocated to us under our advisory agreement.
It will be held as security for the payment of our allocated share of the office space rental.
If unused, it will be returned to us upon lease expiration or earlier termination.
−Removed: As of December 31, 2022, RHC was indirectly owned by Mr.
−Removed: Bennett and Mr.
−Removed: Archie Bennett, Jr.
−Removed: and the $ 365,000 was included in “due from related parties, net.” On January 3, 2023, Ashford Inc.
−Removed: acquired RHC.
On March 10, 2022, the Company entered into a Limited Waiver Under Advisory Agreement (the “2022 Limited Waiver”) with Braemar OP, Braemar TRS and its advisor.
−Removed: The advisory agreement (i) allocates responsibility for certain employee costs between the Company and its advisor and (ii) permits the Company’s board of directors to issue annual equity awards in the Company or Braemar OP to employees and other representatives of its advisor based on achievement by the Company of certain financial or other objectives or otherwise as the Company’s board of directors sees fit.
−Removed: Pursuant to the 2022 Limited Waiver, the Company, Braemar OP, Braemar TRS and the Company’s advisor waived the operation of any provision in the advisory agreement that would otherwise have limited 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.
+Added: The advisory agreement:
+Added: (i) allocates responsibility for certain employee costs between the Company and its advisor;
+Added: and (ii) permits the Company’s board of directors to issue annual equity awards in the Company or Braemar OP to employees and other representatives of its advisor based on achievement by the Company of certain financial or other objectives or otherwise as the Company’s board of directors sees fit.
+Added: Pursuant to the 2022 Limited Waiver, the Company, Braemar OP, Braemar TRS and the Company’s advisor waived the operation of any provision in the advisory agreement that would otherwise have limited our ability, in our discretion and at our cost and expense, to award during
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
+Added: the first and second fiscal quarters of calendar year 2022 cash incentive compensation to employees and other representatives of our advisor.
On March 2, 2023, the Company entered into a second Limited Waiver Under Advisory Agreement (the “2023 Limited Waiver”) with Braemar OP, Braemar TRS and its advisor.
2 unchanged sentences
In June 2023, we entered into various 12-month agreements with Lismore to seek modifications or refinancings of certain mortgage debt of the Company.
−Removed: For the three and six months ended June 30, 2023, we incurred fees of approximately $ 150,000 to Lismore in nonrefundable work fees.
+Added: For the three and nine months ended September 30, 2023 , we incurred fees of approximately $ 0 and $ 150,000 to Lismore in nonrefundable work fees.
The unamortized fees are included in “other assets” on the condensed consolidated balance sheet, and are amortized on a straight line basis over the term of the agreement.
−Removed: In addition to the fees described above, we incurred fees from Lismore or its subsidiaries of $ 98,000 for both three and six months ended June 30, 2023 and $ 0 and $ 637,000 for the three and six months ended June 30, 2022.
+Added: In addition to the fees described above, we incurred fees from Lismore or its subsidiaries of $ 1.1 million and $ 1.2 million for the three and nine months ended September 30, 2023 and $ 0 and $ 637,000 for the three and nine months ended September 30, 2022.
Ashford Securities
2 unchanged sentences
Beginning on the effective date of the Amended and Restated Contribution Agreement, costs were allocated based upon an allocation percentage of 50 % to Ashford Inc., 50 % to Braemar and 0 % to Ashford Trust.
−Removed: Upon reaching the earlier of $ 400 million in aggregate capital raised, or June 10, 2023, there will be a true up (the “Amended and Restated True-Up Date”) among Ashford Inc., Ashford Trust and Braemar whereby the actual amount contributed by each company will be based on the actual amount of capital raised by Ashford Inc., Ashford Trust and Braemar, respectively, through Ashford Securities (the
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
−Removed: resulting ratio of contributions among the Parties, the “Initial True-up Ratio”).
+Added: Upon reaching the earlier of $ 400 million in aggregate capital raised, or June 10, 2023, there will be a true up (the “Amended and Restated True-Up Date”) among Ashford Inc., Ashford Trust and Braemar whereby the actual amount contributed by each company will be based on the actual amount of capital raised by Ashford Inc., Ashford Trust and Braemar, respectively, through Ashford Securities (the resulting ratio of contributions among the Parties, the “Initial True-up Ratio”).
On January 27, 2022, Ashford Trust, Braemar and Ashford Inc.
10 unchanged sentences
$ 8.7 million as a result of the contribution true-up between entities described above.
−Removed: As of June 30, 2023, Braemar has funded approximately $ 17.9 million.
−Removed: As of June 30, 2023, Braemar has a pre-funded balance of approximately $ 1.9 million that is included in “other assets” and approximately $ 1.5 million that is included in “due to Ashford Inc., net” on the condensed consolidated balance sheet.
+Added: As of September 30, 2023, Braemar has funded approximately $ 19.4 million.
+Added: As of September 30, 2023, Braemar has a pre-funded balance of approximately $ 1.2 million that is included in “other assets” and approximately $ 2.7 million that is included in “due from Ashford Inc., net” on the condensed consolidated balance sheet.
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
The table below summarizes the amount Braemar has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
Line Item 2023 2022 2023 2022
11 unchanged sentences
Hotel Management Services
−Removed: At June 30, 2023, Remington Hospitality managed four of our 16 hotel properties.
+Added: At September 30, 2023, Remington Hospitality managed four of our 16 hotel properties.
We pay monthly hotel management fees equal to the greater of approximately $ 17,000 per hotel (increased annually based on consumer price index adjustments) or 3 % of gross revenues as well as annual incentive management fees, if certain operational criteria were met and other general and administrative expense reimbursements primarily related to accounting services.
Commitments and Contingencies
−Removed: Restricted Cash —Under certain management and debt agreements for our hotel properties existing at June 30, 2023, escrow payments are required for insurance, real estate taxes and debt service.
+Added: Restricted Cash —Under certain management and debt agreements for our hotel properties existing at September 30, 2023, escrow payments are required for insurance, real estate taxes and debt service.
In addition, for certain properties based on the terms of the underlying debt and management agreements, we escrow 3 % to 5 % of gross revenues for capital improvements.
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
−Removed: Licensing Fees —In conjunction with the Mr.
−Removed: C Beverly Hills Hotel acquisition on August 5, 2021, we entered into an Intellectual Property Sublicense Agreement, which allows us to continue to use certain proprietary marks associated with the Mr.
+Added: Licensing Fees —In conjunction with the Cameo Beverly Hills (formerly known as “Mr.
+Added: Beverly Hills Hotel”) acquisition on August 5, 2021, we entered into an Intellectual Property Sublicense Agreement, which allowed us to continue to use certain proprietary marks associated with the Mr.
C brand name.
−Removed: In return, we pay licensing fees of:
+Added: In return, we paid licensing fees of:
(i) 1 % of total operating revenue;
3 unchanged sentences
The table below summarizes the licensing fees incurred (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
Line Item 2023 2022 2023 2022
Other hotel expenses $ 111 $ 76 $ 485 $ 367
−Removed: Management Fees —Under hotel management agreements for our hotel properties existing at June 30, 2023, we pay a monthly hotel management fee equal to the greater of approximately $ 16,000 per hotel (increased annually based on consumer price index adjustments) or 3 % of gross revenues, or in some cases 3.0 % to 5.0 % of gross revenues, as well as annual incentive management fees, if applicable.
+Added: Management Fees —Under hotel management agreements for our hotel properties existing at September 30, 2023, we pay a monthly hotel management fee equal to the greater of approximately $ 17,000 per hotel (increased annually based on consumer price index adjustments) or 3 % of gross revenues, or in some cases 3.0 % to 5.0 % of gross revenues, as well as annual incentive management fees, if applicable.
These management agreements expire from December 2027 through December 2065, with renewal options.
2 unchanged sentences
Tax years 2018 through 2022 remain subject to potential examination by certain federal and state taxing authorities.
+Added: BRAEMAR HOTELS & RESORTS INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Litigation —On December 20, 2016, a class action lawsuit was filed against one of the Company’s hotel management companies in the Superior Court of the State of California in and for the County of Contra Costa alleging violations of certain California employment laws, which class action affects two hotels owned by subsidiaries of the Company.
8 unchanged sentences
The trial court set a due date of August 7, 2023 for the briefs.
+Added: After submission of the briefs, the court requested that the parties submit stipulations for the court to rule upon.
If this litigation goes to trial, we expect that the earliest the trial would occur is the last quarter of 2023, based on various extensions to which the parties have agreed.
While we believe it is reasonably possible that we may incur a loss associated with this litigation, because there remains uncertainty under California law with respect to a significant legal issue, discovery relating to class members continues, and the trial judge retains discretion to award lower penalties than set forth in the applicable California employment laws, we do not believe that any potential loss to the Company is reasonably estimable at this time.
−Removed: As of June 30, 2023, no amounts have been accrued.
+Added: As of September 30, 2023, no amounts have been accrued.
We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated.
4 unchanged sentences
Based on the information available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations or cash flow.
−Removed: However, our assessment may change depending upon the development of these legal proceedings, and the final results of these legal proceedings cannot be predicted with certainty.
−Removed: If we do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations or cash flows could be materially adversely affected in future periods.
+Added: During the quarter ended September 30, 2023, we had a cyber incident that resulted in the potential exposure of certain employee personal information.
+Added: We have completed an investigation and have identified certain employee information may have been exposed, but we have not identified that any customer information was exposed.
+Added: Systems have been substantially restored with minimal effect on certain hotel operations.
+Added: We believe that we maintain a sufficient level of insurance coverage related to such events, and the related incremental costs incurred to date are immaterial.
+Added: It is reasonably possible that the Company may incur additional costs related to the matter, but we are unable to predict with certainty the ultimate amount or range of potential loss.
+Added: At this time, no litigation has been filed nor has any been threatened.
+Added: Our assessment may change depending upon the development of any current or future legal proceedings, and the final results of such legal proceedings cannot be predicted with certainty.
+Added: If we ultimately do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods.
Segment Reporting
2 unchanged sentences
Direct hotel investments refers to owning hotel properties through either acquisition or new development.
−Removed: We report operating results of direct hotel
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
−Removed: investments on an aggregate basis as substantially all of our hotel investments have similar economic characteristics and exhibit similar long-term financial performance.
−Removed: As of June 30, 2023 and December 31, 2022, all of our hotel properties were in the U.S.
+Added: We report operating results of direct hotel investments on an aggregate basis as substantially all of our hotel investments have similar economic characteristics and exhibit similar long-term financial performance.
+Added: As of September 30, 2023 and December 31, 2022, all of our hotel properties were in the U.S.
and its territories.
−Removed: Subsequent Events
−Removed: On July 31, 2023, the Company entered into a Credit Agreement (the “Credit Agreement”) with Braemar OP (the “Borrower”), the lenders party thereto (the “Lenders”) and Bank of America, N.A., as administrative agent and L/C Issuer (as defined in the Credit Agreement).
−Removed: Bank of America, N.A.
−Removed: acted as administrative agent and lead arranger on the transaction.
−Removed: Syndicate bank participants include TBK Bank and MidFirst Bank.
−Removed: The Credit Agreement evidences a $ 200 million senior secured credit facility (the “Facility”) comprised of a senior secured term loan facility of $ 150 million (the “Term Loan Facility”) and a senior secured revolving credit facility of $ 50 million (the “Revolving Credit Facility”).
−Removed: Upon satisfaction of certain conditions, including the addition of new Borrowing Base Properties (as defined in the Credit Agreement), the Facility may be increased to a size of not more than $ 400 million in the aggregate.
−Removed: The maximum availability under the Facility is determined on a quarterly basis and limited to the lesser of (i) $ 200 million (subject to increase of up to $ 400 million in the aggregate);
−Removed: (ii) 55 % of the appraised value of all Borrowing Base Properties;
−Removed: and (iii) the DSC Amount (as defined below).
−Removed: The initial Borrowing Base Properties include the Company’s Ritz-Carlton Sarasota, Bardessono Hotel and Spa and Hotel Yountville hotel properties (the “Initial Borrowing Base Properties”).
−Removed: The “DSC Amount” means the maximum principal amount that can be supported from the Adjusted NOI (as defined in the Credit Agreement) from the Borrowing Base Properties assuming (i) a 30-year amortization and an interest rate which is the greater of (a) the ten (10) year U.S.
−Removed: Treasury Rate plus 2.50 % and (b) 7.50 %;
−Removed: and (ii) a minimum debt service coverage of 1.75 to 1.00.
−Removed: The proceeds of the Term Loan Facility were used to repay the mortgage debt associated with The Ritz-Carlton Sarasota, Bardessono Hotel and Spa and Hotel Yountville, which will serve as the Initial Borrowing Base Properties for the financing.
−Removed: In addition, at closing, the Company drew down approximately $ 46 million under the Revolving Credit Facility.
−Removed: The Facility is a three-year interest-only facility with all outstanding principal due at maturity, with a one-year extension option, subject to the satisfaction of certain conditions including the payment of an Extension Fee (as defined in the Credit Agreement) equal to 20 basis points ( 0.20 %) of the outstanding Facility amount.
−Removed: The Credit Agreement is guaranteed by the Company, the Borrower and certain other eligible subsidiaries of the Company and secured by:
−Removed: (i) perfected lien mortgages or deeds of trust and security interests in the Borrowing Base Properties (as defined in the Credit Agreement);
−Removed: (ii) assignments of leases and rents with respect to the Borrowing Base Properties;
−Removed: (iii) assignments of all management agreements, franchise agreements, licenses and other material agreements relating to the Borrowing Base Properties;
−Removed: (iv) perfected first priority liens on all reserve accounts and all operating accounts related to each Borrowing Base Property;
−Removed: and (v) perfected first priority liens on and security interests in each subsidiary guarantor owning a Borrowing Base Property.
−Removed: Borrowings under the Credit Agreement will bear interest at Daily SOFR or Term SOFR plus 10 basis points (with a 0 % floor) plus the applicable margin.
−Removed: Depending on the Company’s Net Debt to EBITDA ratio, the applicable margin for SOFR ranges from 2.25 % to 3.00 %.
−Removed: Default interest would accrue at the applicable rate plus 2.0 %.
−Removed: The Facility contains customary terms, covenants, negative covenants, events of default, limitations and other conditions for credit facilities of this type.
−Removed: Subject to certain exceptions, the Company and the Borrower are subject to restrictions on incurring additional indebtedness and liens, investments, mergers and fundamental changes, sales or other dispositions of property, dividends and stock redemptions, changes in the nature of the Borrower’s business, transactions with affiliates and burdensome agreements.
−Removed: Financial covenants are generally based on the financial condition and results of operations of the Company and its consolidated subsidiaries and include, among others, the following:
−Removed: (i) a Consolidated Leverage Ratio (i.e., Consolidated Net Debt to the Consolidated Total Asset Value) of not more than 55 %;
−Removed: (ii) a Consolidated Fixed Charge Coverage Ratio (FCCR) (i.e., the ratio of Consolidated Adjusted EBITDA to Consolidated Fixed Charges) of not less than (i) prior to December 31, 2024, 1.1 to 1.0 and (ii) thereafter, 1.25 to 1.0.
−Removed: BRAEMAR HOTELS & RESORTS INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
−Removed: The Credit Agreement includes customary events of default, and the occurrence of an event of default will permit the Lenders to terminate commitments to lend under the Credit Agreement and accelerate payments of all amounts outstanding thereunder.
+Added: Subsequent Event
+Added: On October 31, 2023, the Company amended its $ 54.0 million mortgage loan secured by The Ritz-Carlton Lake Tahoe.
+Added: Terms of the amendment included extending the maturity date by one year to January 2025, with a one-year extension option, amending the interest rate to SOFR + 3.60 % and making a pay down of $ 587,000 .
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.