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Item 7. Management’s Discussion and Analysis

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 
 The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and the accompanying notes thereto included in Item 8. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K. See “Forward-Looking Statements.” 
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 This section of this Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022. Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. 
 
 Overview 
 We are a Maryland corporation formed in April 2013 that invests primarily in high revenue per available room (“RevPAR”), luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by STR, LLC. Two times the U.S. national average was $196 for the year ended December 31, 2023. We have elected to be taxed as a REIT under the Code. We conduct our business and own substantially all of our assets through our operating partnership, Braemar OP. 
 We operate in the direct hotel investment segment of the hotel lodging industry. As of December 31, 2023, we owned interests in 16 hotel properties in seven states, the District of Columbia, Puerto Rico and St. Thomas, U.S. Virgin Islands with 4,192 total rooms, or 3,957 net rooms, excluding those attributable to our joint venture partner. The hotel properties in our current portfolio are predominantly located in U.S. urban markets and resort locations with favorable growth characteristics resulting from multiple demand generators. We own 14 of our hotel properties directly, and the remaining two hotel properties, through an investment in a majority-owned consolidated entity. 
 We are advised by Ashford LLC through an advisory agreement. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC. 
 We do not operate any of our hotel properties directly; instead we contractually engage hotel management companies to operate them for us under management contracts. As of December 31, 2023, Remington Hospitality , a subsidiary of Ashford Inc., managed four of our 16 hotel properties. Third-party management companies managed the remaining hotel properties. 
 Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. 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. 
 
 Recent Developments 
 On October 31, 2023, the Company amended its mortgage loan secured by The Ritz-Carlton Lake Tahoe. 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. 
 On December 22, 2023, the Company entered into a $110.6 million mortgage loan with Aareal Capital Corporation that is secured by the Capital Hilton in Washington, D.C. This mortgage loan has an initial maturity date of December 2026 with two one-year extension options, subject to the satisfaction of certain conditions and bears interest at a floating interest rate of SOFR + 3.75%. 
 On January 3, 2024, the Company extended the mortgage loan secured by the Pier House Resort & Spa in Key West, Florida. The mortgage loan has an initial maturity date of September 2025 with one one-year extension option, subject to the satisfaction of certain conditions, continues to have a balance of $80.0 million, and bears interest at a floating interest rate of SOFR + 3.60%. 
 On January 29, 2024, the Company extended the mortgage loan secured by The Ritz-Carlton St. Thomas in St. Thomas, USVI. The mortgage loan has an initial maturity date of August 2025 with one one-year extension option, subject to the satisfaction of certain conditions, continues to have a balance of $42.5 million, and bears interest at a floating interest rate of SOFR + 4.35%. 
 On February 5, 2024, the Company amended the mortgage loan secured by the Hilton La Jolla Torrey Pines. It remains encumbered by the original mortgage loan, which now has been partially paid down to a remaining balance of $66.6 million. While the Company considers its alternatives regarding refinancing the loan or potentially selling the asset, the lender has provided a six month forbearance agreement. During this time, the mortgage loan bears an annual fixed interest rate of 9.0%. 
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 In February 2024, the Company and Ashford Inc. approved funding up to an additional $1.0 million, in the aggregate, for OpenKey. Such funding is to be allocated pro rata among Ashford Inc. and the Company. 
 On March 7, 2024, the Company closed on a $62.0 million non-recourse loan secured by the Ritz-Carlton Reserve Dorado Beach. The mortgage loan has a two-year term, is interest only and provides for a floating interest rate of SOFR + 4.75%. 
 Key Indicators of Operating Performance 
 We use a variety of operating and other information to evaluate the operating performance of our business. These key indicators include financial information that is prepared in accordance with GAAP, as well as other financial measures that are non-GAAP measures. In addition, we use other information that may not be financial in nature, including statistical information and comparative data. We use this information to measure the operating performance of our individual hotels, groups of hotels and/or business as a whole. We also use these metrics to evaluate the hotels in our portfolio and potential acquisitions to determine each hotel’s contribution to cash flow and its potential to provide attractive long-term total returns. These key indicators include: 
 • Occupancy . Occupancy means the total number of hotel rooms sold in a given period divided by the total number of rooms available. Occupancy measures the utilization of our hotels’ available capacity. We use occupancy to measure demand at a specific hotel or group of hotels in a given period. 
 • ADR . ADR means average daily rate and is calculated by dividing total hotel rooms revenues by total number of rooms sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. We use ADR to assess the pricing levels that we are able to generate. 
 • RevPAR. RevPAR means revenue per available room and is calculated by multiplying ADR by the average daily occupancy. RevPAR is one of the commonly used measures within the hotel industry to evaluate hotel operations. RevPAR does not include revenues from food and beverage sales or parking, telephone or other non-rooms revenues generated by the property. Although RevPAR does not include these ancillary revenues, it is generally considered the leading indicator of core revenues for many hotels. We also use RevPAR to compare the results of our hotels between periods and to analyze results of our comparable hotels (comparable hotels represent hotels we have owned for the entire period). RevPAR improvements attributable to increases in occupancy are generally accompanied by increases in most categories of variable operating costs. RevPAR improvements attributable to increases in ADR are generally accompanied by increases in limited categories of operating costs, such as management fees and franchise fees. 
 RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR. For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in increased other operating department revenue and expense. Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs. 
 Occupancy, ADR and RevPAR are commonly used measures within the lodging industry to evaluate operating performance. RevPAR is an important statistic for monitoring operating performance at the individual hotel level and across our entire business. We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only rooms revenue. Rooms revenue is dictated by demand (as measured by occupancy), pricing (as measured by ADR) and our available supply of hotel rooms. 
 We also use funds from operations (“FFO”), Adjusted FFO, earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) and Adjusted EBITDAre as measures of the operating performance of our business. See “Non-GAAP Financial Measures.” 
 
 Principal Factors Affecting Our Results of Operations 
 The principal factors affecting our operating results include overall demand for hotel rooms compared to the supply of available hotel rooms, and the ability of our third-party management companies to increase or maintain revenues while controlling expenses. 
 Demand. The demand for lodging, including business travel, is directly correlated to the overall economy; as GDP increases, lodging demand typically increases. Historically, periods of declining demand are followed by extended periods of relatively strong demand, which typically occurs during the growth phase of the lodging cycle. 
 Supply. The development of new hotels is driven largely by construction costs, the availability of financing and expected performance of existing hotels. Short-term supply is also expected to be below long-term averages. While the industry is 
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 expected to have supply growth below historical averages, we may experience supply growth, in certain markets, in excess of national averages that may negatively impact performance. 
 We expect that our ADR, occupancy and RevPAR performance will be impacted by macroeconomic factors such as national and local employment growth, personal income and corporate earnings, GDP, consumer confidence, office vacancy rates and business relocation decisions, airport and other business and leisure travel, new hotel construction, the pricing strategies of competitors and currency fluctuations. In addition, our ADR, occupancy and RevPAR performance are dependent on the continued success of the Marriott, Hilton, Four Seasons, Hyatt and Sofitel brands. 
 Revenue. Substantially all of our revenue is derived from the operation of hotels. Specifically, our revenue is comprised of: 
 • Rooms revenue: Occupancy and ADR are the major drivers of rooms revenue. Rooms revenue accounts for the substantial majority of our total revenue. 
 • Food and beverage revenue: Occupancy and the type of customer staying at the hotel are the major drivers of food and beverage revenue (i.e., group business typically generates more food and beverage business through catering functions when compared to transient business, which may or may not utilize the hotel’s food and beverage outlets or meeting and banquet facilities). 
 • Other hotel revenue: Occupancy and the nature of the property are the main drivers of other ancillary revenue, such as telecommunications, parking and leasing services. 
 Hotel Operating Expenses. The following presents the components of our hotel operating expenses: 
 • Rooms expense: These costs include housekeeping wages and payroll taxes, reservation systems, room supplies, laundry services and front desk costs. Like rooms revenue, occupancy is the major driver of rooms expense and, therefore, rooms expense has a significant correlation to rooms revenue. These costs can increase based on increases in salaries and wages, as well as the level of service and amenities that are provided. 
 • Food and beverage expense: These expenses primarily include food, beverage and labor costs. Occupancy and the type of customer staying at the hotel (i.e., catered functions generally are more profitable than restaurant, bar or other on-property food and beverage outlets) are the major drivers of food and beverage expense, which correlates closely with food and beverage revenue. 
 • Management fees: Base management fees are computed as a percentage of gross revenue. Incentive management fees generally are paid when operating profits exceed certain threshold levels. 
 • Other hotel expenses: These expenses include labor and other costs associated with the other operating department revenues, as well as labor and other costs associated with administrative departments, franchise fees, sales and marketing, repairs and maintenance and utility costs. 
 Most categories of variable operating expenses, including labor costs such as housekeeping, fluctuate with changes in occupancy. Increases in occupancy are accompanied by increases in most categories of variable operating expenses, while increases in ADR typically only result in increases in limited categories of operating costs and expenses, such as franchise fees, management fees and credit card processing fee expenses which are based on hotel revenues. Thus, changes in ADR have a more significant impact on operating margins than changes in occupancy. 
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 RESULTS OF OPERATIONS 
 
 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 
 The following table summarizes changes in key line items from our consolidated statements of operations for the years ended December 31, 2023 and 2022 (in thousands except percentages): 
 
 Year Ended December 31, Favorable (Unfavorable) 
 2023 2022 $ Change % Change 
 Revenue 
 Rooms $ 464,899 $ 431,515 $ 33,384 7.7 % 
 Food and beverage 185,331 159,241 26,090 16.4 
 
 Other 89,113 78,829 10,284 13.0 
 Total hotel revenue 739,343 669,585 69,758 10.4 
 
 
 Expenses 
 Hotel operating expenses: 
 Rooms 105,439 94,410 (11,029) (11.7) 
 Food and beverage 144,544 125,555 (18,989) (15.1) 
 Other expenses 227,913 205,373 (22,540) (11.0) 
 Management fees 23,261 20,149 (3,112) (15.4) 
 Total hotel operating expenses 501,157 445,487 (55,670) (12.5) 
 Property taxes, insurance and other 38,629 30,766 (7,863) (25.6) 
 Depreciation and amortization 93,272 78,122 (15,150) (19.4) 
 Advisory services fee 31,089 28,847 (2,242) (7.8) 
 (Gain) loss on legal settlements — (114) (114) (100.0) 
 
 
 Corporate general and administrative 13,523 18,084 4,561 25.2 
 Total expenses 677,670 601,192 (76,478) (12.7) 
 
 Operating income (loss) 61,673 68,393 (6,720) (9.8) 
 Equity in earnings (loss) of unconsolidated entity (253) (328) 75 22.9 
 Interest income 6,401 2,677 3,724 139.1 
 Other income (expense) 293 — 293 
 Interest expense and amortization of discounts and loan costs (94,219) (52,166) (42,053) (80.6) 
 Write-off of loan costs and exit fees (3,489) (146) (3,343) (2,289.7) 
 
 Gain (loss) on extinguishment of debt 2,318 — 2,318 
 Realized and unrealized gain (loss) on derivatives (663) 4,961 (5,624) (113.4) 
 Income (loss) before income taxes (27,939) 23,391 (51,330) (219.4) 
 Income tax (expense) benefit (2,689) (4,043) 1,354 33.5 
 Net income (loss) (30,628) 19,348 (49,976) (258.3) 
 (Income) loss attributable to noncontrolling interest in consolidated entities (1,619) (2,063) 444 21.5 
 Net (income) loss attributable to redeemable noncontrolling interests in operating partnership 5,230 476 4,754 998.7 
 Net income (loss) attributable to the Company $ (27,017) $ 17,761 $ (44,778) (252.1) % 

 All hotel properties owned for the years ended December 31, 2023 and 2022 have been included in our results of operations during the respective periods in which they were owned. Based on when a hotel property was acquired or disposed of operating results for certain hotel properties are not comparable for the years ended December 31, 2023 and 2022. The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties. The following acquisitions affect reporting comparability related to our consolidated financial statements: 
 
 Hotel Property Location Type Date 
 
 The Ritz-Carlton Reserve Dorado Beach Dorado, Puerto Rico Acquisition March 11, 2022 
 Four Seasons Resort Scottsdale Scottsdale, Arizona Acquisition December 1, 2022 

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 The following table illustrates the key performance indicators of all hotel properties owned for the periods indicated: 
 
 Year Ended December 31, 
 2023 2022 
 Occupancy 66.94 % 65.62 % 
 ADR (average daily rate) $ 451.48 $ 451.56 
 RevPAR (revenue per available room) $ 302.20 $ 296.30 
 Rooms revenue (in thousands) $ 464,899 $ 431,515 
 Total hotel revenue (in thousands) $ 739,343 $ 669,585 

 The following table illustrates the key performance indicators of the 14 hotel properties that were owned for the full years ended December 31, 2023 and 2022: 
 
 Year Ended December 31, 
 2023 2022 
 Occupancy 68.16 % 65.83 % 
 ADR (average daily rate) $ 390.42 $ 418.04 
 RevPAR (revenue per available room) $ 266.10 $ 275.18 
 Rooms revenue (in thousands) $ 378,674 $ 390,332 
 Total hotel revenue (in thousands) $ 591,432 $ 603,143 

 Net Income (Loss) Attributable to the Company. Net income (loss) attributable to the Company changed $44.8 million, from net income of $17.8 million for the year ended December 31, 2022 (“2022”), to a net loss of $27.0 million for the year ended December 31, 2023 (“2023”), as a result of the factors discussed below. 
 Rooms Revenue . Rooms revenue increased $33.4 million, or 7.7%, to $464.9 million during 2023 compared to 2022. During 2023, we experienced a 132 basis point increase in occupancy and room rates were flat compared to 2022. 
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 Fluctuations in rooms revenue between 2023 and 2022 are a result of the changes in occupancy and ADR between 2023 and 2022 as reflected in the table below (dollars in thousands): 
 
 Hotel Property Favorable (Unfavorable) 
 Rooms Revenue Occupancy 
(change in bps) ADR
(change in %) 
 Comparable 
 Capital Hilton (1) 
 $ 6,738 775 9.5 % 
 Marriott Seattle Waterfront (2) 
 6,965 1,381 4.3 % 
 The Notary Hotel 3,985 652 5.6 % 
 The Clancy 
 1,433 76 3.4 % 
 Sofitel Chicago Magnificent Mile 683 494 (4.5) % 
 Pier House Resort & Spa (3,251) (215) (9.3) % 
 The Ritz-Carlton St. Thomas (10,455) (738) (8.8) % 
 Park Hyatt Beaver Creek Resort & Spa 98 (477) 7.4 % 
 Hotel Yountville (1,989) 672 (23.4) % 
 The Ritz-Carlton Sarasota (1) 
 (8,932) (1,149) (4.9) % 
 Hilton La Jolla Torrey Pines 855 151 1.1 % 
 Bardessono Hotel and Spa (2,653) 226 (16.8) % 
 The Ritz-Carlton Lake Tahoe (1) 
 (3,390) (623) (1.4) % 
 Cameo Beverly Hills 
 (1,745) (148) (11.2) % 
 Total $ (11,658) 233 (6.6) % 
 Non-comparable 
 The Ritz-Carlton Reserve Dorado Beach $ 12,360 n/a n/a 
 Four Seasons Resort Scottsdale 32,682 n/a n/a 
 Total $ 45,042 

 ________ 
 (1) This hotel was under renovation during 2023. 
 (2) This hotel was under renovation during 2022. 
 Food and Beverage Revenue . Food and beverage revenue increased $26.1 million, or 16.4%, to $185.3 million during 2023 compared to 2022. We experienced an aggregate increase in food and beverage revenue of $8.6 million at five comparable hotel properties and increases of $4.0 million and $22.4 million at The Ritz-Carlton Reserve Dorado Beach and the Four Seasons Resort Scottsdale, respectively. These increases were partially offset by an aggregate decrease of approximately $8.8 million at The Ritz-Carlton St. Thomas, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Pier House Resort & Spa, Bardessono Hotel and Spa, Hotel Yountville, Sofitel Chicago Magnificent Mile, Park Hyatt Beaver Creek Resort & Spa, and Cameo Beverly Hills. 
 Other Hotel Revenue . Other hotel revenue, which consists mainly of condo management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, increased $10.3 million, or 13.0%, to $89.1 million during 2023 compared to 2022. 
 This increase is attributable to higher other hotel revenue of $3.1 million at nine comparable hotel properties, $2.7 million at The Ritz-Carlton Reserve Dorado Beach and $7.4 million at the Four Seasons Resort Scottsdale. These increases were partially offset by an aggregate decrease of approximately $2.9 million at The Ritz-Carlton St. Thomas, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Pier House Resort & Spa, Park Hyatt Beaver Creek Resort & Spa and Capital Hilton. 
 Rooms Expense . Rooms expense increased $11.0 million, or 11.7%, to $105.4 million in 2023 compared to 2022. This increase is attributable to an aggregate increase in rooms expense of $4.3 million at six comparable hotel properties, an increase of $1.7 million at The Ritz-Carlton Reserve Dorado Beach and an increase of $7.3 million at the Four Seasons Resort Scottsdale. These increases were partially offset by an aggregate decrease of approximately $2.3 million at The Ritz-Carlton St. Thomas, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Pier House Resort & Spa, Bardessono Hotel and Spa, Hotel Yountville, Park Hyatt Beaver Creek Resort & Spa, and Cameo Beverly Hills. 
 Food and Beverage Expense . Food and beverage expense increased $19.0 million, or 15.1%, to $144.5 million during 2023 compared to 2022. This increase is attributable to higher food and beverage expense of $5.9 million at seven comparable hotel properties, $3.7 million at The Ritz-Carlton Reserve Dorado Beach and $14.9 million at the Four Seasons Resort Scottsdale. These increases were partially offset by an aggregate decrease of approximately $5.5 million at The Ritz-Carlton St. Thomas, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Hotel Yountville, Sofitel Chicago Magnificent Mile, Park Hyatt Beaver Creek Resort & Spa and Cameo Beverly Hills. 
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 Other Operating Expenses . Other operating expenses increased $22.5 million, or 11.0%, to $227.9 million in 2023 compared to 2022. Other operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and incentive management fees. We experienced an increase of $3.0 million in direct expenses and $19.5 million in indirect expenses and incentive management fees in 2023 compared to 2022. Direct expenses were 4.3% of total hotel revenue in 2023 and 4.3% in 2022. 
 The increase in direct expenses is associated with higher direct expenses of approximately $1.1 million at nine comparable hotel properties, $1.3 million at The Ritz-Carlton Reserve Dorado Beach and $2.6 million at the Four Seasons Resort Scottsdale. These increases were partially offset by lower direct expenses of $2.0 million at the Sofitel Chicago Magnificent Mile, Pier House Resort & Spa, Cameo Beverly Hills, The Ritz-Carlton St. Thomas and The Ritz-Carlton Sarasota. 
 The increase in indirect expenses is attributable to increases in: (i) general and administrative costs of $6.6 million comprising of an increase of $7.0 million at the two acquired hotel properties, partially offset by a decrease of $413,000 at our 14 comparable hotel properties; (ii) marketing costs of $8.9 million comprising an increase of $3.6 million at our 14 comparable hotel properties and $5.3 million at the two acquired hotel properties; (iii) repairs and maintenance of $4.0 million comprising an increase of $544,000 at our 14 comparable hotel properties and $3.5 million at the two acquired hotel properties; (iv) lease expense of $103,000 comprising an increase of $170,000 at our 14 comparable hotel properties, partially offset by an aggregate decrease of $67,000 at the two acquired hotel properties; and (v) energy costs of $2.4 million comprised of an increase of $1.0 million at our 14 comparable hotel properties and $1.4 million at our two acquired hotel properties. These increases in indirect expenses were partially offset by an aggregate decrease of $2.5 million in incentive management fees, comprising of an aggregate decrease of $4.6 million at our 14 comparable hotel properties, offset by an aggregate increase of $2.1 million at the two acquired hotel properties. 
 Management Fees . Base management fees increased $3.1 million, or 15.4%, to $23.3 million in 2023 compared to 2022. Management fees increased $2.1 million at six comparable hotel properties, $577,000 at The Ritz-Carlton Reserve Dorado Beach and $1.9 million at the Four Seasons Resort Scottsdale. These increases were partially offset by an aggregate decrease of $1.5 million at the Park Hyatt Beaver Creek Resort & Spa, Pier House Resort & Spa, Hotel Yountville, Bardessono Hotel and Spa, Cameo Beverly Hills, The Ritz-Carlton St. Thomas, The Ritz-Carlton Sarasota and The Ritz-Carlton Lake Tahoe. 
 Property Taxes, Insurance and Other . Property taxes, insurance and other increased $7.9 million, or 25.6%, to $38.6 million in 2023 compared to 2022. This increase is primarily attributable to an aggregate increase of $5.9 million at 12 comparable hotel properties, $1.2 million at The Ritz-Carlton Reserve Dorado Beach and $875,000 at the Four Seasons Resort Scottsdale. These increases were partially offset by an aggregate decrease of approximately $87,000 at the Sofitel Chicago Magnificent Mile and $64,000 at The Notary Hotel. 
 Depreciation and Amortization . Depreciation and amortization increased $15.2 million, or 19.4%, to $93.3 million for 2023 compared to 2022. This increase is comprised of $1.5 million at The Ritz-Carlton Reserve Dorado Beach, $8.8 million at the Four Seasons Resort Scottsdale and an aggregate increase of $8.5 million at eight comparable hotel properties. These increases were partially offset by an aggregate decrease of $3.7 million at the Sofitel Chicago Magnificent Mile, The Clancy, Pier House Resort & Spa, Hotel Yountville, Bardessono Hotel and Spa and Cameo Beverly Hills, primarily due to fully depreciated assets. 
 Advisory Services Fee. Advisory services fee increased $2.2 million, or 7.8%, to $31.1 million in 2023 compared to 2022 due to increases in reimbursable expenses of $3.7 million and base advisory fee of $1.2 million. These increases were partially offset by decreases in equity-based compensation of $1.8 million and incentive fee of $803,000. 
 In 2023, we recorded an advisory services fee of $31.1 million, which included a base advisory fee of $14.0 million, reimbursable expenses of $8.4 million and $8.8 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. 
 In 2022, we recorded an advisory services fee of $28.8 million, which included a base advisory fee of $12.8 million, reimbursable expenses of $4.7 million, $10.6 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and an incentive fee of $803,000. 
 Gain on Legal Settlements. During 2022, the Company received an additional payment of approximately $114,000 related to accrued interest on the initial settlement amount associated with the City of San Francisco transfer tax matter. There was no such gain during 2023. 
 Corporate General and Administrative . Corporate general and administrative expense was $13.5 million in 2023 compared to $18.1 million in 2022. The decrease in corporate general and administrative expenses is primarily due to lower 
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 reimbursed operating expenses of Ashford Securities of $5.1 million, lower miscellaneous expenses of $307,000 and lower public company costs of $271,000, partially offset by higher professional fees of $1.1 million. 
 During 2022, the funding estimate to Ashford Securities was revised based on the latest capital raise estimates of the aggregate capital raised through Ashford Securities that resulted in additional expense of approximately $7.2 million. 
 Equity in Earnings (Loss) of Unconsolidated Entity . In 2023 and 2022, we recorded equity in loss of unconsolidated entity of $253,000 and $328,000, respectively, related to our investment in OpenKey. 
 Interest Income . Interest income was $6.4 million and $2.7 million in 2023 and 2022, respectively. The increase in interest income in 2023 was primarily attributable to higher short-term interest rates on excess cash and the Company’s cash management agreement with Ashford LLC. 
 Other Income (Expense). In 2023, we recorded miscellaneous income of $293,000. 
 Interest Expense and Amortization of Discounts and Loan Costs . Interest expense and amortization of discounts and loan costs increased $42.1 million, or 80.6%, to $94.2 million for 2023 compared to 2022. The increase is primarily due to higher interest expense from higher average interest rates and the mortgage loan secured by the Four Seasons Resort Scottsdale as a result of its acquisition in December 2022. The average SOFR rates for 2023 and 2022 were 4.91% and 1.58%, respectively. LIBOR ceased to be published after June 30, 2023. The average LIBOR rate for 2022 was 1.91%. 
 Write-off of Loan Costs and Exit Fees. Write-off of loan costs and exit fees was $3.5 million in 2023 related to various loan modifications and costs associated with the $200 million secured credit facility. 
 Write-off of loan costs and exit fees was $146,000 in 2022 related to various loan refinances and modifications. 
 Gain (loss) on Extinguishment of Debt. Gain on extinguishment of debt was $2.3 million in 2023 due to the payoff of The Ritz-Carlton Reserve Dorado Beach mortgage loan. The gain was primarily attributable to the premium that was recorded upon the assumption of the mortgage loan when the hotel was acquired. There was no such gain or loss in 2022. 
 Realized and Unrealized Gain (Loss) on Derivatives . Realized and unrealized loss on derivatives of $663,000 for 2023 consisted of unrealized loss on interest rate caps of approximately $8.7 million, partially offset by an unrealized gain on warrants of $272,000 and a realized gain of $7.8 million associated with payments received from counterparties on in-the-money interest rate caps. 
 Realized and Unrealized gain on derivatives of $5.0 million for 2022 consisted of an unrealized gain of approximately $3.3 million on interest rate caps, an unrealized gain of approximately $1.2 million on warrants and a realized gain of $497,000 associated with payments received from counterparties on in-the-money interest rate caps. 
 Income Tax (Expense) Benefit . Income tax expense decreased $1.4 million, from $4.0 million in 2022 to $2.7 million in 2023. This decrease was primarily due to a decrease in the taxable income of certain of our TRS entities in 2023 compared to 2022. 
 (Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities . Our noncontrolling interest partner in consolidated entities was allocated income of $1.6 million and $2.1 million in 2023 and 2022, respectively. At both December 31, 2023 and 2022, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity. 
 Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated a net loss of $5.2 million in 2023 and net loss of $476,000 in 2022. Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 6.63% and 7.69% as of December 31, 2023 and 2022, respectively. 
 
 LIQUIDITY AND CAPITAL RESOURCES 
 Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our hotel properties, including: 
 • advisory fees payable to Ashford LLC; 
 • recurring maintenance necessary to maintain our hotel properties in accordance with brand standards; 
 • interest expense and scheduled principal payments on outstanding indebtedness; 
 • dividends on our common stock; 
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 • dividends on our preferred stock; and 
 • capital expenditures to improve our hotel properties. 
 We expect to meet our short-term liquidity requirements generally through net cash provided by operations, capital market activities, our Revolving Credit Facility, asset sales and existing cash balances. 
 Pursuant to the advisory agreement between us and our advisor, we must pay our advisor on a monthly basis a base advisory fee, subject to a minimum base advisory fee. The minimum base advisory fee is equal to the greater of: (i) 90% of the base fee paid for the same month in the prior fiscal year; and (ii) 1/12 th of the “G&A Ratio” for the most recently completed fiscal quarter multiplied by our total market capitalization on the last balance sheet date included in the most recent quarterly report on Form 10-Q or annual report on Form 10-K that we file with the SEC. Thus, even if our total market capitalization and performance decline, we will still be required to make payments to our advisor equal to the minimum base advisory fee, which could adversely impact our liquidity and financial condition. 
 Our long-term liquidity requirements consist primarily of funds necessary to pay for the costs of acquiring additional hotel properties and redevelopments, renovations, expansions and other capital expenditures that need to be made periodically with respect to our hotel properties and scheduled debt payments. We expect to meet our long-term liquidity requirements through various sources of capital, including future common and preferred equity issuances, existing working capital, net cash provided by operations, hotel mortgage indebtedness and other secured and unsecured borrowings. However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity and market perceptions about us. The success of our business strategy will depend, in part, on our ability to access these various capital sources. While management cannot provide any assurances, management believes that our cash flow from operations and our existing cash balances will be adequate to meet upcoming anticipated requirements for interest and principal payments on debt (excluding any potential final maturity principal payments and paydowns for extension tests), working capital, and capital expenditures for the next 12 months and dividends required to maintain our status as a REIT for U.S. federal income tax purposes. 
 Our hotel properties will require periodic capital expenditures and renovation to remain competitive. In addition, acquisitions, redevelopments or expansions of hotel properties may require significant capital outlays. We may not be able to fund such capital improvements solely from net cash provided by operations because we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deductions for dividends paid and excluding net capital gains, to qualify and maintain our qualification as a REIT, and we are subject to tax on any retained income and gains. As a result, our ability to fund capital expenditures, acquisitions or hotel redevelopment through retained earnings is very limited. Consequently, we expect to rely heavily upon the availability of debt or equity capital for these purposes. If we are unable to obtain the necessary capital on favorable terms, or at all, our financial condition, liquidity, results of operations and prospects could be materially and adversely affected. 
 Certain of our loan agreements contain cash trap provisions that may be triggered if the performance of our hotel properties declines. When these provisions are triggered, substantially all of the profit generated by the hotel properties securing such loan is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. This could affect our liquidity and our ability to make distributions to our stockholders until such time that a cash trap is no longer in effect for such loan. These cash trap provisions have been triggered on one mortgage loan, as discussed below. Our loan that is in a cash trap may remain subject to the cash trap provisions for a substantial period of time which could limit our flexibility and adversely affect our financial condition or our qualification as a REIT. As of December 31, 2023, The Ritz-Carlton Lake Tahoe was in a cash trap, although there was no cash trapped for this mortgage loan. 
 
 As of December 31, 2023, the Company held cash and cash equivalents of $85.6 million and restricted cash of $80.9 million, the vast majority of which is comprised of lender and manager-held reserves. As of December 31, 2023, $17.7 million was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs. At December 31, 2023, our net debt to gross assets was 39.7%. 
 The Company’s cash and cash equivalents are primarily comprised of corporate cash invested in short-term U.S. Treasury securities with maturity dates of less than 90 days and corporate cash held at commercial banks in Insured Cash Sweep (“ICS”) accounts, which are fully insured by the FDIC. The Company’s cash and cash equivalents also includes property-level operating cash deposited with commercial banks that have been designated as a Global Systemically Important Bank (“G-SIB”) by the Financial Stability Board (“FSB”) and a small amount deposited with other commercial banks. 
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 Our estimated future obligations as of December 31, 2023 include both current and long-term obligations. With respect to our indebtedness, as discussed in note 6 to our consolidated financial statements, we have current obligations of $582.8 million and long-term obligations of $590.3 million. As of December 31, 2023, we held extension options to extend the principal for all of the debt due in the next twelve months except for $219.1 million. Subsequent to December 31, 2023, we extended two mortgage loans. See discussions below in “Debt Transactions.” 
 As discussed in note 17 to our consolidated financial statements, under our operating leases we have current obligations of approximately $3.4 million and long-term obligations of approximately $155.4 million. Additionally, as discussed in note 16 to our consolidated financial statements, we have short-term capital commitments of approximately $35.4 million. 
 
 Equity Transactions 
 On December 7, 2022, our board of directors approved a new stock repurchase program pursuant to which the board of directors 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 of directors’ authorization replaced any previous repurchase authorizations. During the year ended December 31, 2023, we repurchased 3.9 million shares of our common stock for approximately $18.9 million. As of December 31, 2023, the Company has completed the $25.0 million repurchase authorization. 
 On November 13, 2019, we filed an initial registration statement with the SEC, as amended on January 24, 2020, for shares of our non-traded Series E Redeemable Preferred Stock (the “Series E Preferred Stock”) and our non-traded Series M Redeemable Preferred Stock (the “Series M Preferred Stock”). The registration statement became effective on February 21, 2020, and contemplates the issuance and sale of up to 20,000,000 shares of Series E Preferred Stock or Series M Preferred Stock in a primary offering and up to 8,000,000 shares of Series E Preferred Stock or Series M Preferred Stock pursuant to a dividend reinvestment plan. On February 25, 2020, we filed our prospectus with the SEC. Ashford Securities, a subsidiary of Ashford Inc., serves as the dealer manager and wholesaler of the Series E Preferred Stock and Series M Preferred Stock. On April 2, 2021, the Company filed with the State Department of Assessments and Taxation of the State of Maryland (the “SDAT”) articles supplementary to the Company’s Articles of Amendment and Restatement that provided for: (i) reclassifying the existing 28,000,000 shares of Series E Preferred Stock and 28,000,000 shares of Series M Preferred Stock as unissued shares of preferred stock; (ii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series E Preferred Stock (the “Series E Articles Supplementary”); and (iii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series M Preferred Stock (the “Series M Articles Supplementary”). The Series E Articles Supplementary and Series M Articles Supplementary were filed to revise the preferred stock terms related to the dividend rate, our optional redemption right and certain other voting rights. The Company also caused its operating partnership to execute Amendment No. 5 to the Third Amended and Restated Agreement of Limited Partnership to amend the terms of its operating partnership agreement to conform to the terms of the Series E Articles Supplementary and Series M Articles Supplementary. The Company issued approximately 16.4 million shares of Series E Preferred Stock and received net proceeds of approximately $369.5 million and issued approximately 2.0 million shares of Series M Preferred Stock and received net proceeds of approximately $47.6 million. On February 21, 2023, the Company announced the closing of its offering of the Series E Preferred Stock and Series M Preferred Stock. 
 On July 12, 2021, the Company entered into an equity distribution agreement (the “Virtu July 2021 EDA”) with Virtu to sell from time to time shares of our common stock having an aggregate offering price of up to $100 million. We will pay Virtu a commission of approximately 1.0% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale. As of March 12, 2024, the Company has sold approximately 4.7 million shares of common stock under the Virtu July 2021 EDA and received gross proceeds of approximately $24.0 million. 
 
 Debt Transactions 
 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 year ended December 31, 2023. The gain was primarily attributable to the premium that was recorded upon the assumption of the mortgage loan when the hotel was acquired. 
 On June 13, 2023, the Company finalized an extension of its $435 million mortgage loan secured by four properties: The Notary Hotel, The Clancy, Sofitel Chicago Magnificent Mile, and Marriott Seattle Waterfront. The loan is being extended beyond its original initial maturity in June 2023 for an additional 12 months. In conjunction with the extension, the Company paid down $142 million of the loan utilizing corporate cash on hand, which reduced the balance to approximately $293 million. As part of the extension, the Company also purchased an interest rate cap through June 2024 with a strike rate of 4.69%. 
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 Effective June 30, 2023, LIBOR is no longer published. Accordingly all variable interest rate mortgage loans held by the Company that used the LIBOR index transitioned to SOFR beginning on July 1, 2023. Not all lenders will execute loan amendment documents and instead will defer to original loan documents that dictate changes in index rates. 
 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). Bank of America, N.A. acted as administrative agent and lead arranger on the transaction. Syndicate bank participants include TBK Bank and MidFirst Bank. 
 The Credit Agreement, as amended by the First Amendment to Credit Agreement, dated as of February 21, 2024, 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”). 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 an amount of not more than $400 million in the aggregate. 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); (ii) 55% of the appraised value of all Borrowing Base Properties; and (iii) the DSC Amount (as defined below). 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”). 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. Treasury Rate plus 2.50% and (b) 7.50%; and (ii) a minimum debt service coverage of 1.55 to 1.00. 
 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. In addition, at closing, the Company drew down approximately $46 million under the Revolving Credit Facility. 
 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. 
 The Credit Agreement is guaranteed by the Company, the Borrower and certain other eligible subsidiaries of the Company and secured by: (i) perfected lien mortgages or deeds of trust and security interests in the Borrowing Base Properties (as defined in the Credit Agreement); (ii) assignments of leases and rents with respect to the Borrowing Base Properties; (iii) assignments of all management agreements, franchise agreements, licenses and other material agreements relating to the Borrowing Base Properties; (iv) perfected first priority liens on all reserve accounts and all operating accounts related to each Borrowing Base Property; and (v) perfected first priority liens on and security interests in each subsidiary guarantor owning a Borrowing Base Property. 
 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. Depending on the Company’s Net Debt to EBITDA ratio, the applicable margin for SOFR ranges from 2.25% to 3.00%. Default interest would accrue at the applicable rate plus 2.0%. 
 The Facility contains customary terms, covenants, negative covenants, events of default, limitations and other conditions for credit facilities of this type. 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. 
 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: 
 (i) a Consolidated Leverage Ratio (i.e., Consolidated Net Debt to the Consolidated Total Asset Value) of not more than 55%; and 
 (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. 
 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. 
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 On September 29, 2023, the Company amended its mortgage loan secured by the Four Seasons Resort Scottsdale. Terms of the amendment included increasing the outstanding principal from $100 million to $140 million, and extending the final maturity date by one year to December 2028. 
 On October 31, 2023, the Company amended its mortgage loan secured by The Ritz-Carlton Lake Tahoe. 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. 
 On December 22, 2023, the Company entered into a $110.6 million mortgage loan with Aareal Capital Corporation that is secured by the Capital Hilton in Washington, D.C. This mortgage loan has an initial maturity date of December 2026 with two one-year extension options, subject to the satisfaction of certain conditions and bears interest at a floating interest rate of SOFR + 3.75%. 
 On January 3, 2024, the Company extended the mortgage loan secured by the Pier House Resort & Spa in Key West, Florida. The mortgage loan has an initial maturity date of September 2025 with one one-year extension option, subject to the satisfaction of certain conditions, continues to have a balance of $80.0 million, and bears interest at a floating interest rate of SOFR + 3.60%. 
 On January 29, 2024, the Company extended the mortgage loan secured by The Ritz-Carlton St. Thomas in St. Thomas, USVI. The mortgage loan has an initial maturity date of August 2025 with one one-year extension option, subject to the satisfaction of certain conditions, continues to have a balance of $42.5 million, and bears interest at a floating interest rate of SOFR + 4.35%. 
 On February 5, 2024, the Company amended the mortgage loan secured by the Hilton La Jolla Torrey Pines. It remains encumbered by the original mortgage loan, which now has been partially paid down to a remaining balance of $66.6 million. While the Company considers its alternatives regarding refinancing the loan or potentially selling the asset, the lender has provided a six month forbearance agreement. During this time, the mortgage loan bears an annual fixed interest rate of 9.0%. 
 On March 7, 2024, the Company closed on a $62.0 million non-recourse loan secured by the Ritz-Carlton Reserve Dorado Beach. The mortgage loan has a two-year term, is interest only and provides for a floating interest rate of SOFR + 4.75%. 
 
 Sources and Uses of Cash 
 We had approximately $85.6 million and $261.5 million of cash and cash equivalents at December 31, 2023 and December 31, 2022, respectively. 
 We anticipate using funds to pay for capital expenditures for our 16 hotel properties, estimated to be approximately $90 to $100 million in fiscal year 2024 and debt interest payments, estimated to be approximately $89.6 million in 2024 based on future payments using the one month SOFR rate as of December 31, 2023. This estimate will fluctuate based on changes in the one-month SOFR rate and any future changes in outstanding indebtedness. 
 Net Cash Flows Provided by (Used in) Operating Activities. Net cash flows provided by operating activities were $84.7 million and $109.5 million for the years ended December 31, 2023 and 2022, respectively. Cash flows from operations were impacted by changes in hotel operations of our 14 comparable hotel properties, The Ritz-Carlton Reserve Dorado Beach, acquired on March 11, 2022, and the Four Seasons Resort Scottsdale, acquired on December 1, 2022. Cash flows from operations are also impacted by the timing of working capital cash flows, such as collecting receivables from hotel guests, paying vendors, settling with derivative counterparties, settling with related parties and settling with hotel managers. 
 Net Cash Flows Provided by (Used in) Investing Activities . For the year ended December 31, 2023, net cash flows used in investing activities were $77.1 million. These cash outflows were primarily attributable to $77.1 million of capital improvements made to various hotel properties and a $238,000 loan to OpenKey partially offset by cash inflows of $361,000 related to proceeds from property insurance. Our capital improvements consisted of approximately $54.6 million of return on investment capital projects and approximately $22.6 million of renewal and replacement capital projects. 
 For the year ended December 31, 2022, net cash flows used in investing activities were $402.2 million. These cash outflows were primarily attributable to $49.1 million of capital improvements made to various hotel properties, approximately $354.4 million associated with the acquisitions of The Ritz-Carlton Reserve Dorado Beach and the Four Seasons Resort Scottsdale and additional investments in OpenKey of $328,000, partially offset by cash inflows of $1.7 million associated with an amendment to a hotel management agreement. 
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 Our capital improvements consisted of approximately $28.0 million of return on investment capital projects and approximately $21.2 million of renewal and replacement capital projects. 
 Return on investment capital projects are designed to improve the positioning of our hotel properties within their markets and competitive sets. Renewal and replacement capital projects are designed to maintain the quality and competitiveness of our hotels. 
 Net Cash Flows Provided by (Used in) Financing Activities. For the year ended December 31, 2023, net cash flows used in financing activities were $156.8 million. Cash outflows primarily consisted of repayments of indebtedness of $534.3 million, $52.6 million of dividend and distribution payments, $19.3 million of payments to repurchase common stock, payments of $7.2 million for the redemption of operating partnership units, $5.1 million to purchase interest rate caps, $2.7 million of distributions to a noncontrolling interest in consolidated entities, $11.6 million payments of loan costs and exit fees, and $9.8 million for cash redemptions of Series E and Series M preferred stock. These cash outflows were partially offset by cash inflows of $370.6 million from borrowings on indebtedness, $97.9 million from the issuance of preferred stock, $9.5 million of contributions from a noncontrolling interest in consolidated entities and $7.7 million of proceeds from in-the-money interest rate caps. 
 For the year ended December 31, 2022, net cash flows provided by financing activities were $345.1 million. Cash inflows primarily consisted of debt borrowings of $170.5 million, $278.6 million from the issuance of preferred stock and $167,000 of proceeds from in-the-money interest rate caps. The cash inflows were partially offset by repayments of indebtedness of $68.5 million, $20.8 million of dividend and distribution payments, $7.4 million related to payments for stock repurchases, $4.1 million of payments for loan costs and fees, $3.0 million of payments for derivatives, and $499,000 for cash redemptions of Series E and Series M preferred stock. 
 
 Inflation 
 We rely entirely on the performance of our properties and the ability of the properties’ managers to increase revenues to keep pace with inflation. Hotel operators can generally increase room rates rather quickly, but competitive pressures may limit their ability to raise rates faster than inflation. Our general and administrative costs, real estate and personal property taxes, property and casualty insurance, and utilities are subject to inflation as well. 
 
 Critical Accounting Policies and Estimates 
 Our accounting policies are fully described in note 2 to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data.” We believe that the following discussion addresses our most critical accounting policies, representing those policies considered most vital to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, complex judgments and can include significant estimates. 
 Impairment of Investments in Hotel Properties. Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of the hotel is measured by comparison of the carrying amount of the hotel to the estimated future undiscounted cash flows, which take into account current market conditions and our intent with respect to holding or disposing of the hotel. If our analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value, or fair value, less cost to sell. In evaluating the impairment of hotel properties, we make many assumptions and estimates, including projected cash flows, expected holding period and expected useful life. Fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions and third-party appraisals, where considered necessary. Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs. There were no impairment charges recorded for the years ended December 31, 2023, 2022 and 2021. 
 Income Taxes. At December 31, 2023 and 2022, we had a valuation allowance of approximately $16.2 million and $18.6 million, respectively, to partially reserve our deferred tax assets of our TRSs. At each reporting date, we evaluate whether it is more likely than not that we will utilize all or a portion of our deferred tax assets. We consider all available positive and negative evidence, including historical results of operations, projected future taxable income, carryback potential and scheduled reversals of deferred tax liabilities. In evaluating the objective evidence that historical results provide, we consider three years of consolidated cumulative operating income (loss). At December 31, 2023, we had TRS net operating loss carry forwards for U.S. federal income tax purposes of $63.6 million, of which $47.3 million is subject to expiration and began expiring in 2024. The remainder was generated after December 31, 2017 and is not subject to expiration under the Tax Cuts and Jobs Act. The loss carry forwards subject to expiration may be available to offset future taxable income, if any, for 2024 through 2034, with 
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 the remainder available to offset taxable income beyond 2034; however, there could be substantial limitations on their use imposed by the Code. Management determined that it is more likely than not that $16.2 million of our net deferred tax assets will not be realized and a valuation allowance has been recorded accordingly. At December 31, 2023, Braemar Hotels & Resorts Inc., our REIT, had net operating loss carryforwards for U.S. federal income tax purposes of $109.7 million based on the latest filed tax return. Of this amount, $2.2 million is subject to expiration in 2033. The remainder is not subject to expiration under the Tax Cuts and Jobs Act. 
 The “Income Taxes” Topic of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) addresses the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The guidance requires us to determine whether tax positions we have taken or expect to take in a tax return are more likely than not to be sustained upon examination by the appropriate taxing authority based on the technical merits of the positions. Tax positions that do not meet the more likely than not threshold would be recorded as additional tax expense in the current period. We analyze all open tax years, as defined by the statute of limitations for each jurisdiction, which includes the federal jurisdiction and various states. We classify interest and penalties related to underpayment of income taxes as income tax expense. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and cities. Tax years 2019 through 2023 remain subject to potential examination by certain federal and state taxing authorities. 
 
 Recently Adopted Accounting Standards 
 In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848 ) (“ASU 2020-04”), which provides optional guidance through December 31, 2022 to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. In January 2021, the FASB issued ASU 2021-01 , Reference Rate Reform (Topic 848), which further clarified the scope of the reference rate reform optional practical expedients and exceptions outlined in Topic 848. The amendments in ASU Nos. 2020-04 and 2021-01 apply to contract modifications that replace a reference rate affected by reference rate reform, providing optional expedients regarding the measurement of hedge effectiveness in hedging relationships that have been modified to replace a reference rate. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848 ) (“ASU 2022-06”), which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company applied the optional expedient in evaluating debt modifications converting from London Interbank Offered Rate (“LIBOR”) to Secured Overnight Financing Rate (“SOFR”). The Company adopted the standards upon the respective effective dates. There was no material impact as a result of this adoption. 
 
 Recently Issued Accounting Standards 
 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the impact that ASU 2023-07 will have on our financial statement disclosures. 
 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which eliminated the historic requirement that entities disclose information concerning unrecognized tax benefits having a reasonable possibility of significantly increasing or decreasing in the 12 months following the reporting date. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted. We are currently evaluating the impact that ASU 2023-09 will have on our consolidated financial statements and related disclosures. 
 
 Non-GAAP Financial Measures 
 The following non-GAAP presentations of EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO are presented to help our investors evaluate our operating performance. 
 EBITDA is defined as net income (loss) before interest expense and amortization of loan costs, depreciation and amortization, income taxes, equity in (earnings) loss of unconsolidated entity and after the Company’s portion of EBITDA of OpenKey. In addition, we exclude impairment on real estate, (gain) loss on insurance settlement and disposition of assets and Company’s portion of EBITDAre of OpenKey from EBITDA to calculate EBITDA for real estate, or EBITDAre, as defined by NAREIT. 
 We then further adjust EBITDAre to exclude certain additional items such as amortization of favorable (unfavorable) contract assets (liabilities), transaction and conversion costs, other income/expense, write-off of loan costs and exit fees, gain/ 
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 loss on insurance settlements, advisory and settlement costs, advisory services incentive fee, gain/loss on extinguishment of debt, stock/unit-based compensation and the Company’s portion of adjustments to EBITDAre of OpenKey and non-cash items such as unrealized gain/ loss on derivatives. 
 We present EBITDA, EBITDAre and Adjusted EBITDAre because we believe they are useful to an investor in evaluating our operating performance because they provide investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe they help investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results. Our management team also uses EBITDA as one measure in determining the value of acquisitions and dispositions. EBITDA, EBITDAre and Adjusted EBITDAre as calculated by us may not be comparable to EBITDA, EBITDAre and Adjusted EBITDAre reported by other companies that do not define EBITDA, EBITDAre and Adjusted EBITDAre exactly as we define the terms. EBITDA, EBITDAre and Adjusted EBITDAre do not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as determined by GAAP as an indicator of liquidity. 
 
 The following table reconciles net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAre (in thousands) (unaudited): 
 
 Year Ended December 31, 
 2023 2022 2021 
 Net income (loss) $ (30,628) $ 19,348 $ (32,911) 
 Interest expense and amortization of loan costs 94,219 52,166 30,901 
 Depreciation and amortization 93,272 78,122 73,762 
 Income tax expense (benefit) 2,689 4,043 1,324 
 Equity in (earnings) loss of unconsolidated entity 253 328 252 
 Company’s portion of EBITDA of OpenKey (274) (334) (250) 
 EBITDA 
 159,531 153,673 73,078 
 
 (Gain) loss on insurance settlement and disposition of assets — — (696) 
 
 EBITDAre 159,531 153,673 72,382 
 Amortization of favorable (unfavorable) contract assets (liabilities) 474 463 512 
 Transaction and conversion costs 4,561 9,679 2,637 
 Write-off of premiums, loan costs and exit fees 3,489 146 1,963 
 Realized and unrealized (gain) loss on derivatives 663 (4,961) (32) 
 Stock/unit-based compensation 9,244 11,285 10,204 
 Legal, advisory and settlement costs 1,397 2,170 (208) 
 
 (Gain) loss on extinguishment of debt (2,318) — — 
 Other (income) expense 
 (293) — — 
 (Gain) loss on insurance settlements 
 — (55) — 
 
 
 
 Company’s portion of adjustments to EBITDAre of OpenKey — 8 7 
 Adjusted EBITDAre $ 176,748 $ 172,408 $ 87,465 

 
 
 
 
 
 
 
 
 

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 The following table reconciles net income (loss) to EBITDA attributable to the Company and OP unitholders on a property-by-property basis for each of our hotel properties owned and on a corporate basis during the year ended December 31, 2023 (in thousands) (unaudited): 
 
 Year Ended December 31, 2023 
 Capital Hilton Hilton La Jolla Torrey Pines Sofitel Chicago Magnificent Mile Bardessono Hotel and Spa Pier House Resort & Spa Hotel Yountville Park Hyatt Beaver Creek Resort & Spa The Notary Hotel The Clancy The Ritz-Carlton Sarasota The Ritz-Carlton Lake Tahoe Marriott Seattle Waterfront The Ritz-Carlton St. Thomas Cameo Beverly Hills The Ritz-Carlton Dorado Beach Four Seasons Resort Scottsdale 
 Hotel Total Corporate / Allocated (1) 
 Braemar Hotels & Resorts Inc. 
 Net income (loss) $ 4,934 $ 12,836 $ 3,392 $ 1,428 $ 6,799 $ 871 $ 1,088 $ 2,071 $ (462) $ 11,171 $ (4,690) $ 5,471 $ 8,322 $ (4,222) $ 13,480 $ 1,138 $ 63,627 $ (94,255) $ (30,628) 
 Non-property adjustments (2) 
 — — — — — — — — — — 249 — — (292) — 495 452 (452) — 
 Interest income (237) (346) — — — — — (41) (137) (235) 128 (73) (44) — — (140) (1,125) 1,125 — 
 Interest expense — — — 1,756 5,555 2,263 5,639 — — 5,096 4,002 80 3,892 2,688 281 10,046 41,298 49,538 90,836 
 Amortization of loan costs — — — — 321 24 809 — — 95 183 — 63 176 711 2,382 1,001 3,383 
 Depreciation and amortization 9,859 4,176 4,697 2,328 2,290 1,643 4,624 8,062 9,785 6,155 5,243 7,252 8,672 2,251 6,609 9,626 93,272 — 93,272 
 Income tax expense (benefit) 126 173 — — — — — 10 — — — — 1,662 — 476 — 2,447 242 2,689 
 Non-hotel EBITDA ownership expense (income) 745 450 94 555 46 114 113 215 90 99 967 86 61 386 78 (13) 4,086 (4,086) — 
 Hotel EBITDA including amounts attributable to noncontrolling interest 15,427 17,289 8,183 6,067 15,011 4,915 12,273 10,317 9,276 22,381 6,082 12,816 22,628 987 20,924 21,863 206,439 (46,887) 159,552 
 Less: EBITDA adjustments attributable to consolidated noncontrolling interest (3,857) (4,322) — — — — — — — — — — — — — — (8,179) 8,179 — 
 Equity in earnings (loss) of unconsolidated entities — — — — — — — — — — — — — — — — — 253 253 
 Company's portion of EBITDA of OpenKey — — — — — — — — — — — — — — — — — (274) (274) 
 Hotel EBITDA attributable to the Company and OP unitholders $ 11,570 $ 12,967 $ 8,183 $ 6,067 $ 15,011 $ 4,915 $ 12,273 $ 10,317 $ 9,276 $ 22,381 $ 6,082 $ 12,816 $ 22,628 $ 987 $ 20,924 $ 21,863 $ 198,260 $ (38,729) $ 159,531 

 _____________ 
 (1) Represents expenses not recorded at the individual hotel property level. 
 (2) Includes allocated amounts which were not specific to hotel properties, such as gain on sale of hotel property, corporate taxes, insurance and legal expenses. 
 102 

 
 
 
 
 

 The following table reconciles net income (loss) to EBITDA attributable to the Company and OP unitholders on a property-by-property basis for each of our hotel properties owned and on a corporate basis during the year ended December 31, 2022. The results of The Ritz-Carlton Reserve Dorado Beach and Four Seasons Resort Scottsdale are included from its acquisition date through December 31, 2022 (in thousands) (unaudited): 
 
 Year Ended December 31, 2022 
 Capital Hilton Hilton La Jolla Torrey Pines Sofitel Chicago Magnificent Mile Bardessono Hotel and Spa Pier House Resort & Spa Hotel Yountville Park Hyatt Beaver Creek Resort & Spa The Notary Hotel The Clancy The Ritz-Carlton Sarasota The Ritz-Carlton Lake Tahoe Marriott Seattle Waterfront The Ritz-Carlton St. Thomas Cameo Beverly Hills 
 The Ritz-Carlton Dorado Beach Four Seasons Resort Scottsdale 
 Hotel Total Corporate / Allocated (1) 
 Braemar Hotels & Resorts Inc. 
 Net income (loss) $ 1,125 $ 13,162 $ 2,226 $ 4,488 $ 12,377 $ 2,547 $ 5,668 $ (505) $ (2,872) $ 17,641 $ 5,020 $ 3,790 $ 18,920 $ (1,390) $ 7,583 $ 933 $ 90,713 $ (71,365) $ 19,348 
 Non-property adjustments (2) 
 — — — — — — 76 (16) — — — — (40) — — — 20 (20) — 
 Interest income (55) (73) — — — — — (5) (24) (52) — (12) (8) — — (4) (233) 233 — 
 Interest expense — — — 1,674 2,802 2,165 3,228 — — 4,919 2,017 26 2,557 1,822 1,747 — 22,957 26,753 49,710 
 Amortization of loan costs — — — 135 307 102 713 — — 370 150 — 43 167 — — 1,987 469 2,456 
 Depreciation and amortization 7,420 4,118 5,975 2,371 2,611 2,046 3,932 8,028 11,226 5,326 3,234 5,406 8,072 2,452 5,124 781 78,122 — 78,122 
 Income tax expense (benefit) — — — — — — — 19 — — — — 415 — 333 — 767 3,276 4,043 
 Non-hotel EBITDA ownership expense (income) 1,684 121 87 459 18 98 3 152 24 2,173 962 7 178 106 100 — 6,172 (6,172) — 
 Hotel EBITDA including amounts attributable to noncontrolling interest 10,174 17,328 8,288 9,127 18,115 6,958 13,620 7,673 8,354 30,377 11,383 9,217 30,137 3,157 14,887 1,710 200,505 (46,826) 153,679 
 Less: EBITDA adjustments attributable to consolidated noncontrolling interest (2,543) (4,333) — — — — — — — — — — — — — — (6,876) 6,876 — 
 Equity in earnings (loss) of unconsolidated entities — — — — — — — — — — — — — — — — — 328 328 
 Company’s portion of EBITDA of OpenKey — — — — — — — — — — — — — — — — — (334) (334) 
 Hotel EBITDA attributable to the Company and OP unitholders $ 7,631 $ 12,995 $ 8,288 $ 9,127 $ 18,115 $ 6,958 $ 13,620 $ 7,673 $ 8,354 $ 30,377 $ 11,383 $ 9,217 $ 30,137 $ 3,157 $ 14,887 $ 1,710 $ 193,629 $ (39,956) $ 153,673 

 __________________ 
 (1) Represents expenses not recorded at the individual hotel property level. 
 (2) Includes allocated amounts which were not specific to hotel properties, such as gain on sale of hotel property, corporate taxes, insurance and legal expenses. 
 103 

 
 
 
 
 

 The following table reconciles net income (loss) to EBITDA attributable to the Company and OP unitholders on a property-by-property basis for each of our hotel properties owned and on a corporate basis during the year ended December 31, 2021. The results of the Cameo Beverly Hills are included from its acquisition date through December 31, 2021 (in thousands) (unaudited): 
 
 Year Ended December 31, 2021 
 Capital Hilton Hilton La Jolla Torrey Pines Sofitel Chicago Magnificent Mile Bardessono Hotel and Spa Pier House Resort & Spa Hotel Yountville Park Hyatt Beaver Creek Resort & Spa The Notary Hotel The Clancy The Ritz-Carlton Sarasota The Ritz-Carlton Lake Tahoe Marriott Seattle Waterfront The Ritz-Carlton St. Thomas Mr. C Beverly Hills Hotel Hotel Total Corporate / Allocated (1) 
 Braemar Hotels & Resorts Inc. 
 Net income (loss) $ (11,082) $ 1,915 $ (10,181) $ 5,053 $ 13,411 $ 2,310 $ 4,005 $ (6,261) $ (15,467) $ 15,342 $ 2,793 $ (293) $ 17,453 $ (1,630) $ 17,368 $ (50,279) $ (32,911) 
 Non-property adjustments (2) 
 — — — (117) (96) — — — — 1 1 — (671) 936 54 (54) — 
 Interest income — — — — — — — — (3) (22) — (12) (2) — (39) 39 — 
 Interest expense — — — 1,039 1,606 1,303 2,075 — — 3,518 1,205 54 2,134 644 13,578 15,117 28,695 
 Amortization of loan costs — — — 162 294 180 14 — — 352 144 — 68 66 1,280 926 2,206 
 Depreciation and amortization 7,448 4,293 6,582 2,581 2,883 2,572 3,526 8,333 13,258 6,347 2,931 3,965 8,071 972 73,762 — 73,762 
 Income tax expense (benefit) — (43) — — — — — (7) — — — — 101 — 51 1,273 1,324 
 Non-hotel EBITDA ownership expense (income) 292 70 39 490 (59) 68 (11) (141) (5) 125 761 (157) 396 64 1,932 (1,932) — 
 Hotel EBITDA including amounts attributable to noncontrolling interest (3,342) 6,235 (3,560) 9,208 18,039 6,433 9,609 1,924 (2,217) 25,663 7,835 3,557 27,550 1,052 107,986 (34,910) 73,076 
 Less: EBITDA adjustments attributable to consolidated noncontrolling interest 839 (1,562) — — — — — — — — — — — — (723) 723 — 
 Equity in earnings (loss) of unconsolidated entities — — — — — — — — — — — — — — — 252 252 
 Company’s portion of EBITDA of OpenKey — — — — — — — — — — — — — — — (250) (250) 
 Hotel EBITDA attributable to the Company and OP unitholders $ (2,503) $ 4,673 $ (3,560) $ 9,208 $ 18,039 $ 6,433 $ 9,609 $ 1,924 $ (2,217) $ 25,663 $ 7,835 $ 3,557 $ 27,550 $ 1,052 $ 107,263 $ (34,185) $ 73,078 

 __________________ 
 (1) Represents expenses not recorded at the individual hotel property level. 
 (2) Includes allocated amounts which were not specific to hotel properties, such as gain on sale of hotel property, corporate taxes, insurance and legal expenses. 
 104 

 
 
 
 
 

 FFO is calculated on the basis defined by NAREIT, which is net income (loss) attributable to common stockholders, computed in accordance with GAAP, excluding gains or losses on insurance settlement and disposition of assets, plus impairment charges on real estate, depreciation and amortization of real estate assets, and after redeemable noncontrolling interests in the operating partnership and adjustments for unconsolidated entities. NAREIT developed FFO as a relative measure of performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the basis determined by GAAP. Our calculation of Adjusted FFO excludes transaction and conversion costs, other income/expense, write-off of loan costs and exit fees, legal, advisory and settlement costs, advisory services incentive fee, stock/unit-based compensation, gain/loss on insurance settlements, gain/loss on extinguishment of debt, and non-cash items such as deemed dividends on redeemable preferred stock, interest expense accretion on refundable membership club deposits, amortization of loan costs, unrealized gain/loss on derivatives and the Company’s portion of adjustments to FFO of OpenKey. FFO and Adjusted FFO exclude amounts attributable to the portion of a partnership owned by the third-party. We present FFO and Adjusted FFO because we consider FFO and Adjusted FFO important supplemental measures of our operational performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO and Adjusted FFO when reporting their results. FFO and Adjusted FFO are intended to exclude GAAP historical cost depreciation and amortization, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO and Adjusted FFO exclude depreciation and amortization related to real estate assets, gains and losses from real property dispositions and impairment losses on real estate assets, FFO and Adjusted FFO provide performance measures that, when compared year over year, reflect the effect to operations from trends in occupancy, guestroom rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. We consider FFO and Adjusted FFO to be appropriate measures of our ongoing normalized operating performance as a REIT. We compute FFO in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that either do not define the term in accordance with the current NAREIT definition or interpret the NAREIT definition differently than us. FFO and Adjusted FFO do not represent cash generated from operating activities as determined by GAAP and should not be considered as an alternative to GAAP net income or loss as an indication of our financial performance or GAAP cash flows from operating activities as a measure of our liquidity. FFO and Adjusted FFO are also not indicative of funds available to satisfy our cash needs, including our ability to make cash distributions. However, to facilitate a clear understanding of our historical operating results, we believe that FFO and Adjusted FFO should be considered along with our net income or loss and cash flows reported in our consolidated financial statements. 
 105 

 
 
 
 

 The following table reconciles net income (loss) to FFO and Adjusted FFO (in thousands) (unaudited): 
 
 Year Ended December 31, 
 2023 2022 2021 
 Net income (loss) $ (30,628) $ 19,348 $ (32,911) 
 (Income) loss attributable to noncontrolling interest in consolidated entities (1,619) (2,063) 2,650 
 Net (Income) loss attributable to redeemable noncontrolling interests in operating partnership 5,230 476 3,597 
 Preferred dividends (42,304) (21,503) (8,745) 
 Deemed dividends on preferred stock 
 (4,719) (6,954) — 
 Gain (loss) on extinguishment of preferred stock — — (4,595) 
 Net income (loss) attributable to common stockholders (74,040) (10,696) (40,004) 
 Depreciation and amortization on real estate (1) 
 90,031 75,508 71,072 
 Net income (loss) attributable to redeemable noncontrolling interests in operating partnership (5,230) (476) (3,597) 
 Equity in (earnings) loss of unconsolidated entity 253 328 252 
 
 (Gain) loss on insurance settlement and disposition of assets — — (696) 
 Company’s portion of FFO of OpenKey (296) (333) (251) 
 FFO available to common stockholders and OP unitholders 10,718 64,331 26,776 
 Deemed dividends on preferred stock 
 4,719 6,954 — 
 (Gain) loss on extinguishment of preferred stock — — 4,595 
 Transaction and conversion costs 4,561 9,679 2,637 
 Write-off of premiums, loan costs and exit fees 3,489 146 1,963 
 Unrealized (gain) loss on derivatives 8,413 (4,464) (32) 
 Stock/unit-based compensation 9,244 11,285 10,204 
 Legal, advisory and settlement costs 1,397 2,170 (208) 
 Interest expense accretion on refundable membership club deposits 671 723 772 
 Amortization of loan costs 3,289 2,365 2,121 
 
 (Gain) loss on extinguishment of debt (2,318) — — 
 Other (income) expense 
 (293) — — 
 
 (Gain) loss on insurance settlements 
 — (55) — 
 
 
 
 Company’s portion of adjustments to FFO of OpenKey — 8 7 
 Adjusted FFO available to common stockholders and OP unitholders $ 43,890 $ 93,142 $ 48,835 

 ____________________ 
 (1) Net of adjustment for noncontrolling interest in consolidated entities. The following table presents the amounts of the adjustments for noncontrolling interests for each line item: 
 
 Year Ended December 31, 
 2023 2022 2021 
 Depreciation and amortization on real estate $ (3,241) $ (2,614) $ (2,690) 
 
 Amortization of loan costs (94) (91) (87) 

 106
Braemar Hotels & Resorts Inc. 10-K

Item 7. Management’s Discussion and Analysis
