What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-09 · 399 added, 169 removed, 929 unchanged (38% of the section changed)

4 unchanged sentences

(unaudited, in thousands, except share and per share amounts)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Investments in hotel properties, gross $ 2,269,523 $ 2,382,716

13 unchanged sentences

Intangible assets, net 3,314 3,504

Due from related parties, net 365 —

Due from third-party hotel managers 17,088 17,739

Assets held for sale 124,931 —

Total assets $ 2,211,715 $ 2,226,824

9 unchanged sentences

Derivative liabilities — 12

Liabilities associated with assets held for sale

Total liabilities 1,426,994 1,408,298

Commitments and contingencies (note 15)

5.50 % Series B cumulative convertible preferred stock, $ 0.01 par value, 3,078,017 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

5.50 % Series B cumulative convertible preferred stock, $ 0.01 par value, 3,078,017 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

65,426 65,426

Series E redeemable preferred stock, $ 0.01 par value, 16,162,834 and 16,316,315 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Series E redeemable preferred stock, $ 0.01 par value, 16,142,351 and 16,316,315 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

374,847 377,035

Series M redeemable preferred stock, $ 0.01 par value, 1,747,771 and 1,832,805 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Series M redeemable preferred stock, $ 0.01 par value, 1,622,773 and 1,832,805 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

40,569 45,623

1 unchanged sentence

Preferred stock, $ 0.01 par value, 80,000,000 shares authorized:

8.25 % Series D cumulative preferred stock, 1,600,000 shares issued and outstanding at March 31, 2024 and December 31, 2023

Common stock, $ 0.01 par value, 250,000,000 shares authorized, 66,477,431 and 66,636,353 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

8.25 % Series D cumulative preferred stock, 1,600,000 shares issued and outstanding at June 30, 2024 and December 31, 2023

Common stock, $ 0.01 par value, 250,000,000 shares authorized, 66,522,206 and 66,636,353 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 718,901 718,498

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Three Months Ended March 31,

(unaudited, in thousands, except per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Rooms $ 116,227 $ 117,137 $ 254,779 $ 254,664

39 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

Three Months Ended March 31,

(unaudited, in thousands)

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

NET INCOME (LOSS) $ ( 13,787 ) $ ( 3,138 ) $ 1,695 $ 13,466

18 unchanged sentences

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Balance at March 31, 2024

1,600 $ 16 66,477 $ 664 $ 718,606 $ ( 412,013 ) $ ( 9,677 ) $ 297,596 3,078 $ 65,426 16,163 $ 375,261 1,748 $ 43,694 $ 33,005

Equity-based compensation — — — — 296 — — 296 — — — — — — 839

Issuance of preferred stock — — — — — — — — — — 32 809 1 34 —

Issuance of restricted shares/units

— — 45 1 ( 1 ) — — — — — — — — — —

Dividends declared – common stock ($ 0.05 /share)

— — — — — ( 3,347 ) — ( 3,347 ) — — — — — — —

Dividends declared – preferred stock - Series B ($ 0.34 /share)

— — — — — ( 1,058 ) — ( 1,058 ) — — — — — — —

Dividends declared – preferred stock - Series D ($ 0.52 /share)

— — — — — ( 825 ) — ( 825 ) — — — — — — —

Dividends declared – preferred stock - Series E ($ 0.47 /share)

— — — — — ( 7,570 ) — ( 7,570 ) — — — — — — —

Dividends declared – preferred stock - Series M ($ 0.52 /share)

— — — — — ( 876 ) — ( 876 ) — — — — — — —

Distributions to noncontrolling interests — — — — — — — — — — — — — — ( 368 )

Net income (loss) — — — — — ( 11,565 ) ( 303 ) ( 11,868 ) — — — — — — ( 1,919 )

Redemption of preferred stock — — — — — — — — — — ( 53 ) ( 1,249 ) ( 126 ) ( 3,159 ) —

Redemption value adjustment – preferred stock — — — — — ( 26 ) — ( 26 ) — — — 26 — —

Redemption value adjustment — — — — — ( 22 ) — ( 22 ) — — — — — — 22

Balance at June 30, 2024

1,600 $ 16 66,522 $ 665 $ 718,901 $ ( 437,302 ) $ ( 9,980 ) $ 272,300 3,078 $ 65,426 16,142 $ 374,847 1,623 $ 40,569 $ 31,579

8.25 % Series D Cumulative Preferred Stock

Common Stock Additional

Capital Accumulated Deficit Noncontrolling Interest in Consolidated Entities Total 5.50 % Series B Cumulative Convertible

Preferred Stock

Series E Redeemable

Preferred Stock Series M Redeemable

Preferred Stock Redeemable Noncontrolling Interests in Operating Partnership

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Balance at December 31, 2023

20 unchanged sentences

Redemption value adjustment — — — — — ( 15 ) — ( 15 ) — — — — — — 15

Balance at June 30, 2024

1,600 $ 16 66,522 $ 665 $ 718,901 $ ( 437,302 ) $ ( 9,980 ) $ 272,300 3,078 $ 65,426 16,142 $ 374,847 1,623 $ 40,569 $ 31,579

8.25 % Series D Cumulative Preferred Stock

Common Stock Additional

Capital Accumulated Deficit Noncontrolling Interest in Consolidated Entities Total 5.50 % Series B Cumulative Convertible

Preferred Stock

Series E Redeemable

Preferred Stock Series M Redeemable

Preferred Stock Redeemable Noncontrolling Interests in Operating Partnership

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

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

Purchase of common stock — — ( 1 ) — ( 4 ) — — ( 4 ) — — — — — — —

Equity-based compensation — — — — 1,262 — — 1,262 — — — — — — 1,752

Issuance of restricted shares/units — — 45 — — — — — — — — — — — —

Forfeiture of restricted common shares — — — — — — — — — — — — — — —

Issuance of preferred stock — — — — — — — — — — 32 828 4 76 —

Dividends declared – common stock ($ 0.05 /share)

— — — — — ( 3,335 ) — ( 3,335 ) — — — — — — —

Dividends declared – preferred stock - Series B ($ 0.34 /share)

— — — — — ( 1,058 ) — ( 1,058 ) — — — — — — —

Dividends declared – preferred stock-Series D ($ 0.52 /share)

— — — — — ( 825 ) — ( 825 ) — — — — — — —

Dividends declared – preferred stock - Series E ($ 0.50 /share)

— — — — — ( 7,986 ) — ( 7,986 ) — — — — — — —

Dividends declared – preferred stock - Series M ($ 0.52 /share)

— — — — — ( 1,008 ) — ( 1,008 ) — — — — — — —

Contributions from noncontrolling interests — — — — — — 2,026 2,026 — — — — — — —

Distributions to noncontrolling interests — — — — — — ( 315 ) ( 315 ) — — — — — — ( 361 )

Redemption/conversion of operating partnership units — — — — — — — — — — — — — — ( 123 )

Net income (loss) — — — — — ( 1,846 ) ( 367 ) ( 2,213 ) — — — — — — ( 925 )

Redemption of preferred stock — — — — — — — — — — ( 21 ) ( 507 ) ( 4 ) ( 90 ) —

Redemption value adjustment – preferred stock — — — — — ( 301 ) — ( 301 ) — — — 176 — 125 —

Redemption value adjustment — — — — — ( 11 ) — ( 11 ) — — — — — — 11

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

8.25 % Series D Cumulative Preferred Stock

7 unchanged sentences

Equity-based compensation — — — — 2,067 — — 2,067 — — — — — — 3,160

Common stock issuance costs — — — — — — — — — — — — — —

Issuance of preferred stock — — — — — — — — — — 3,860 86,744 537 12,955 —

Issuance of restricted shares/units — — 45 — — — — — — — — — — — —

Forfeiture of restricted common shares — — ( 1 ) — — — — — — — — — — — —

9 unchanged sentences

— — — — — ( 1,941 ) — ( 1,941 ) — — — — — — —

Distributions to noncontrolling interests — — — — — — — — — — — — — — ( 361 )

Contributions from noncontrolling interests — — — — — — 4,050 4,050 — — — — — — —

Distributions to noncontrolling interests — — — — — — ( 315 ) ( 315 ) — — — — — — ( 722 )

Redemption/conversion of operating partnership units — — — — — — — — — — — — — — ( 7,162 )

3 unchanged sentences

Redemption value adjustment — — — — — ( 7 ) — ( 7 ) — — — — — — 7

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

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

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended March 31,

(unaudited, in thousands)

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

27 unchanged sentences

Proceeds from property insurance 542 327

Payments for initial franchise fee — ( 75 )

Investment in unconsolidated entity — ( 158 )

15 unchanged sentences

Net cash provided by (used in) financing activities ( 6,918 ) ( 150,090 )

Net change in cash, cash equivalents and restricted cash 52,920 28,857

Net change in cash, cash equivalents and restricted cash (including cash, cash equivalents and restricted cash held for sale)

14,556 ( 124,232 )

Cash, cash equivalents and restricted cash at beginning of period 166,503 315,696

Cash, cash equivalents and restricted cash at end of period $ 219,423 $ 344,553

Three Months Ended March 31,

Cash, cash equivalents and restricted cash at end of period (including cash, cash equivalents and restricted cash held for sale)

$ 181,059 $ 191,464

Six Months Ended June 30,

SUPPLEMENTAL CASH FLOW INFORMATION

3 unchanged sentences

Dividends and distributions declared but not paid $ 9,333 $ 8,917

Common stock purchases accrued but not paid 369 352

Capital expenditures accrued but not paid 12,972 21,011

Accrued preferred stock offering expenses — 80

Distributions declared but not paid to a noncontrolling interest in a consolidated entity 3,723 315

Non-cash preferred stock dividends 1,708 1,747

8 unchanged sentences

Cash, cash equivalents and restricted cash at end of period

166,946 191,464

Cash and cash equivalents at end of period included in assets held for sale 5,711 —

Restricted cash at end of period included in assets held for sale

Cash, cash equivalents and restricted cash at end of period (including cash, cash equivalents and restricted cash held for sale)

$ 181,059 $ 191,464

See Notes to Condensed Consolidated Financial Statements.

22 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 policies covering general liability, workers compensation and business automobile claims, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services, mobile key technology and cash management services.

The accompanying condensed consolidated financial statements include the accounts of wholly-owned and majority-owned subsidiaries of Braemar OP that as of March 31, 2024, own 16 hotel properties in seven states, the District of Columbia, Puerto Rico and the U.S.

The accompanying condensed consolidated financial statements include the accounts of wholly-owned and majority-owned subsidiaries of Braemar OP that as of June 30, 2024, 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.

As of March 31, 2024, 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”).

As of June 30, 2024, 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.

As of March 31, 2024, 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.

As of June 30, 2024, 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.

Consequently, operating results for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024;

Consequently, operating results for the three and six months ended June 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Use of Estimates —The preparation of these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Actual results could differ from those estimates.

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.

Recently Issued Accounting Standards —In November 2023, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“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 of this guidance on its consolidated financial statements and related disclosures.

As of June 30, 2024, the Company has not adopted this ASU.

The adoption of this ASU is expected to only impact disclosures with respect to the Company’s consolidated financial statements.

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.

We are currently evaluating the impact that ASU 2023-09 will have on our consolidated financial statements and related disclosures.

Improvements to Income Tax Disclosures , to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted.

The amendments in this ASU may be applied prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or the amendments may be applied retrospectively by providing the revised disclosures for all periods presented.

As of June 30, 2024, the Company has not adopted this ASU.

The adoption of this ASU is expected to only impact disclosures with respect to the Company’s consolidated financial statements.

BRAEMAR HOTELS & RESORTS INC.

2 unchanged sentences

The following tables present our revenue disaggregated by geographical areas (dollars in thousands):

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Primary Geographical Market Number of Hotels Rooms Food and Beverage Other Hotel Total

11 unchanged sentences

Total 16 $ 116,227 $ 47,563 $ 23,797 $ 187,587

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Primary Geographical Market Number of Hotels Rooms Food and Beverage Other Hotel Total

1 unchanged sentence

Puerto Rico 1 12,870 5,060 3,087 21,017

Arizona 1 7,924 5,268 2,043 15,235

Colorado 1 1,866 1,811 1,689 5,366

Florida 2 15,290 8,630 5,665 29,585

Illinois 1 7,738 1,947 412 10,097

Pennsylvania 1 7,643 1,650 349 9,642

Washington 1 8,193 1,337 411 9,941

Washington, D.C.

1 11,433 5,721 426 17,580

USVI 1 13,176 5,722 2,646 21,544

Total 16 $ 117,137 $ 47,776 $ 21,794 $ 186,707

Six Months Ended June 30, 2024

Primary Geographical Market Number of Hotels Rooms Food and Beverage Other Hotel Total

California 6 $ 61,517 $ 20,719 $ 10,666 $ 92,902

Puerto Rico 1 28,926 9,225 5,804 43,955

Arizona 1 22,848 14,150 4,928 41,926

Colorado 1 15,093 7,421 5,463 27,977

7 unchanged sentences

Total 16 $ 254,779 $ 101,110 $ 50,777 $ 406,666

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Six Months Ended June 30, 2023

Primary Geographical Market Number of Hotels Rooms Food and Beverage Other Hotel Total

California 6 $ 65,570 $ 21,940 $ 10,756 $ 98,266

Puerto Rico 1 28,300 9,935 6,224 44,459

1 22,081 11,786 4,659 38,526

Colorado 1 16,207 8,172 4,672 29,051

Florida 2 36,939 19,129 12,336 68,404

Illinois 1 11,304 2,930 767 15,001

Pennsylvania 1 12,163 2,646 631 15,440

Washington 1 12,414 2,037 823 15,274

Washington, D.C.

1 20,210 11,209 859 32,278

USVI 1 29,476 10,220 5,613 45,309

Total 16 $ 254,664 $ 100,004 $ 47,340 $ 402,008

Investments in Hotel Properties, net

Investments in hotel properties, net consisted of the following (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Land $ 630,842 $ 630,842

6 unchanged sentences

Investments in hotel properties, net $ 1,799,638 $ 1,884,208

Assets Held For Sale

On May 6, 2024, the Company entered into a purchase and sale agreement for the Hilton La Jolla Torrey Pines.

As of June 30, 2024, the Hilton La Jolla Torrey Pines was classified as held for sale.

Depreciation and amortization ceased as of the date the assets were deemed held for sale.

Since the sale of this hotel did not represent a strategic shift that has (or will have) a major effect on our operations or financial results, its results of operations were not reported as discontinued operations in the consolidated financial statements.

The Hilton La Jolla Torrey Pines sale closed on July 17, 2024.

The major classes of assets and liabilities related to assets held for sale included in the consolidated balance sheet at June 30, 2024 were as follows:

June 30, 2024

Investments in hotel properties, net $ 65,156

Cash and cash equivalents 5,711

Restricted cash 8,402

Accounts receivable, net 1,586

Inventories 61

Prepaid expenses 373

Operating lease right-of-use assets 43,538

Other assets 104

Assets held for sale $ 124,931

Indebtedness, net $ 66,482

Accounts payable and accrued expenses 5,114

Due to Ashford Inc., net 173

Due to third-party hotel managers, net

Operating lease liabilities 41,112

Liabilities related to assets held for sale $ 113,460

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Impairment Charges

During the three months ended March 31, 2024 and 2023, no impairment charges were recorded.

During the six months ended June 30, 2024 and 2023, 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.

As of March 31, 2024, the Company has made equity investments in OpenKey totaling $ 2.9 million.

As of June 30, 2024, 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.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Our investment is recorded as “investment in unconsolidated entity” in our condensed consolidated balance sheets and is accounted for under the equity method of accounting as we have significant influence over the entity under the applicable accounting guidance.

2 unchanged sentences

Any impairment is recorded in equity in earnings (loss) of unconsolidated entity.

No such impairment was recorded for the three months ended March 31, 2024 and 2023.

No such impairment was recorded for the six months ended June 30, 2024 and 2023.

The following table summarizes our carrying value and ownership interest in OpenKey:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Carrying value of the investment in OpenKey (in thousands) $ 1,264 $ 1,416

1 unchanged sentence

The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Line Item 2024 2023 2024 2023

5 unchanged sentences

Additionally, repayment of the loan principal and all accrued interest is due upon certain events.

As of March 31, 2024, the Company has funded approximately $ 238,000 .

As of June 30, 2024, the Company has funded approximately $ 238,000 .

On February 27, 2024, the Company approved additional funding, together with Ashford Inc., up to $ 1.0 million in aggregate to OpenKey, allocated pro rata among them.

As of March 31, 2024, no funding has been made pursuant to the 2024 funding agreement.

As of June 30, 2024, no funding has been made pursuant to the 2024 funding agreement.

The following table summarizes our note receivable from OpenKey (in thousands):

Line Item March 31, 2024 December 31, 2023

Line Item June 30, 2024 December 31, 2023

Investment in unconsolidated entity $ 276 $ 258

The following table summarizes the interest income associated with the loan to OpenKey (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Line Item 2024 2023 2024 2023

8 unchanged sentences

Interest Rate

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Mortgage loan (3)

The Notary Hotel June 2024 June 2025 SOFR (1) + 2.66 %

$ 293,180 $ 293,180

Sofitel Chicago Magnificent Mile

Marriott Seattle Waterfront

Cameo Beverly Hills August 2024 August 2024 SOFR (1) + 3.66 %

Mortgage loan (4)

2 unchanged sentences

Mortgage loan (5)

Cameo Beverly Hills August 2024 August 2024 SOFR (1) + 3.66 %

30,000 30,000

Mortgage loan (6)

The Ritz-Carlton Lake Tahoe January 2025

6 unchanged sentences

Mortgage loan (7)

The Notary Hotel June 2025

June 2025 SOFR (1) + 2.66 %

293,180 293,180

Sofitel Chicago Magnificent Mile

Marriott Seattle Waterfront

Mortgage loan (8)

The Ritz-Carlton St.

28 unchanged sentences

Indebtedness, net 1,194,921 1,162,444

Indebtedness related to assets held for sale, net (4)

Hilton La Jolla Torrey Pines August 2024

August 2024 9.00 % 66,482 —

$ 1,128,439 $ 1,162,444

(1) SOFR rates were 5.33 % and 5.35 % at March 31, 2024 and December 31, 2023, respectively.

__________________

(1) SOFR rates were 5.34 % and 5.35 % at June 30, 2024 and December 31, 2023, respectively.

(2) 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 %.

(3) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions, of which the fourth was exercised in June 2023.

(3) This mortgage loan had a SOFR floor of 1.50 %.

On April 9, 2024, we repaid this mortgage loan.

(4) On February 5, 2024, we amended this mortgage loan.

Terms of the amendment included extending the maturity date by six months from February 2024 to August 2024, and converting the interest rate from a variable rate of SOFR + 1.70 % to a fixed rate of 9.00 %.

(5) This mortgage loan has a SOFR floor of 1.50 %.

On April 9, 2024, we repaid this mortgage loan.

This mortgage is secured by the Hilton La Jolla Torrey Pines and is held for sale as of June 30, 2024.

On July 17, 2024, we sold this property for $ 165.0 million.

(5) This mortgage loan has one one-year extension option, subject to satisfaction of certain conditions.

(6) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the first was exercised February 2024.

(7) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions, of which the fifth was exercised in June 2024.

(8) On January 29, 2024, we amended this mortgage loan.

25 unchanged sentences

The Convertible Senior Notes will mature on June 1, 2026.

For the three months ended March 31, 2024 and 2023, the Company recorded coupon interest expense of $ 970,000 and $ 970,000 , respectively.

For the three months ended March 31, 2024 and 2023, the Company recorded discount amortization of $ 152,000 and $ 144,000 , respectively, related to the initial purchase discount, with the remaining discount balance to be amortized through June 2026.

For the three and six months ended June 30, 2024, the Company recorded coupon interest expense of $ 970,000 and $ 1.9 million, respectively.

For the three and six months ended June 30, 2023, the Company recorded coupon interest expense of $ 970,000 and $ 1.9 million, respectively.

For the three and six months ended June 30, 2024, the Company recorded discount amortization of $ 154,000 and $ 306,000 , respectively, related to the initial purchase discount, with the remaining discount balance to be amortized through June 2026.

For the three and six months ended June 30, 2023, the Company recorded discount amortization of $ 146,000 and $ 290,000 , 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.

As of June 30, 2024, the conversion rate is 179.2962.

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.

10 unchanged sentences

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 initial Borrowing Base Properties include the Company’s Ritz-Carlton Sarasota, Bardessono Hotel and Spa and Hotel Yountville 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:

18 unchanged sentences

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 %;

(i) a Consolidated Leverage Ratio ( i.e.

, Consolidated Net Debt to the Consolidated Total Asset Value) of not more than 55 %;

(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.

On August 7, 2024 the Facility was repaid and the Company is no longer subject to any covenants.

If we violate covenants in any debt agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all.

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.

As of March 31, 2024, we were in compliance with all covenants.

As of June 30, 2024, 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:

Three Months Ended March 31,

Six Months Ended June 30,

Interest rate caps:

2 unchanged sentences

Strike rate high end of range 5.25 % 5.25 %

Effective date range January 2024

Termination date range January 2025 - February 2025

Effective date range January 2024 - June 2024

January 2023 - June 2023

Termination date range January 2025 - June 2025

October 2023 - June 2024

Total cost of interest rate caps (in thousands) $ 1,295 $ 2,645

6 unchanged sentences

Interest rate caps:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Notional amount (in thousands) $ 778,280 $ 778,280

1 unchanged sentence

Strike rate high end of range 5.25 % 5.25 %

Termination date range June 2024 - January 2026

January 2024- January 2025

Termination date range August 2024 - January 2026

June 2024- January 2025

Aggregate principal balance on corresponding mortgage loans (in thousands) $ 747,693 $ 777,693

4 unchanged sentences

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.

As of March 31, 2024, no warrants have been exercised.

As of June 30, 2024, 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:

22 unchanged sentences

Transfers of inputs between levels are determined at the end of each reporting period.

In determining the fair values of our derivatives at March 31, 2024, the

In determining the fair values of our derivatives at June 30, 2024, the SOFR interest rate forward curve (Level 2 inputs) assumed a downtrend from 5.340 % to 3.877 % for the remaining term of our

BRAEMAR HOTELS & RESORTS INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

SOFR interest rate forward curve (Level 2 inputs) assumed a downtrend from 5.329 % to 3.686 % 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

March 31, 2024

June 30, 2024

Derivative assets:

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Gain (Loss) Recognized in Income

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Derivative assets:

Interest rate derivatives - caps $ 326 $ 1,013 (1)

$ 1,246 $ 576

Total $ 326 $ 1,013 $ 1,246 $ 576

7 unchanged sentences

$ ( 1,253 ) (1)

$ ( 1,952 ) (1)

$ ( 3,454 ) (1)

Realized gain (loss) on interest rate caps 1,539 (1) (2)

2,282 (1) (2)

3,210 (1) (2)

4,149 (1) (2)

Net $ 326 $ 1,029 $ 1,258 $ 695

6 unchanged sentences

The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Value Estimated

7 unchanged sentences

Cash and cash equivalents (1)

$ 120,318 $ 120,318 $ 85,599 $ 85,599

Restricted cash (1)

60,741 60,741 80,904 80,904

Accounts receivable, net (1)

33,998 33,998 39,199 39,199

Due from third-party hotel managers 17,088 17,088 17,739 17,739

1 unchanged sentence

Indebtedness (1)

$ 1,203,788 $ 1,165,614 $ 1,171,459 $ 1,124,377

Accounts payable and accrued expenses (1)

134,781 134,781 149,867 149,867

Dividends and distributions payable 9,333 9,333 9,158 9,158

3 unchanged sentences

Due to third-party hotel managers (1)

1,253 1,253 1,608 1,608

(1) Includes balances associated with assets held for sale and liabilities associated with assets held for sale as of June 30, 2024.

BRAEMAR HOTELS & RESORTS INC.

16 unchanged sentences

Credit spreads take into consideration general market conditions, maturity and collateral.

We estimated the fair value of the total indebtedness to be approximately 96.0 % of the carrying value of $ 1.2 billion at March 31, 2024, and approximately 96.0 % of the carrying value of $ 1.2 billion at December 31, 2023.

We estimated the fair value of the total indebtedness to be approximately 96.8 % of the carrying value of $ 1.2 billion at June 30, 2024, and approximately 96.0 % of the carrying value of $ 1.2 billion at December 31, 2023.

These fair value estimates are considered a Level 2 valuation technique.

1 unchanged sentence

The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net income (loss) attributable to common stockholders - basic and diluted:

5 unchanged sentences

dividends on unvested restricted shares — ( 8 ) — — ( 17 )

net (income) loss allocated to performance stock units ( 2 ) —

Undistributed net income (loss) allocated to common stockholders ( 25,267 ) ( 16,359 ) ( 25,088 ) ( 16,463 )

dividends on common stock 3,326 3,291 6,650 6,580

Distributed and undistributed net income (loss) - basic

Distributed and undistributed net income (loss) - basic and diluted

$ ( 21,941 ) $ ( 13,068 ) $ ( 18,438 ) $ ( 9,883 )

Income (loss) attributable to redeemable noncontrolling interest in operating partnership — 261

Dividends on preferred stock - Series E (inclusive of deemed dividends) 9,401 —

Distributed and undistributed net income (loss) - diluted $ 12,902 $ 3,446

Weighted average common shares outstanding:

Weighted average common shares outstanding – basic 66,455 66,498

Effect of assumed conversion of operating partnership units — 5,980

Effect of assumed conversion of preferred stock - Series E 202,061 —

Weighted average common shares outstanding – diluted 268,516 72,478

Income (loss) per share - basic:

Net income (loss) allocated to common stockholders per share $ 0.05 $ 0.05

Income (loss) per share - diluted:

Weighted average common shares outstanding – basic and diluted

66,501 65,806 66,478 68,378

Income (loss) per share - basic and diluted:

Net income (loss) allocated to common stockholders per share $ ( 0.33 ) $ ( 0.20 ) $ ( 0.28 ) $ ( 0.14 )

3 unchanged sentences

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):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net income (loss) allocated to common stockholders is not adjusted for:

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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.

The grant date fair value

BRAEMAR HOTELS & RESORTS INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of March 31, 2024, there were approximately 1.5 million unvested Performance LTIP units, representing 200 % of the target, outstanding.

As of March 31, 2024, we have issued a total of approximately 3.0 million LTIP and Performance LTIP units, net of Performance LTIP cancellations.

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.

As of June 30, 2024, there were approximately 1.5 million unvested Performance LTIP units, representing 200 % of the target, outstanding.

In May 2024, approximately 45,000 LTIP units were issued to independent directors, with a fair value of approximately $ 126,000 , which vested immediately upon grant and have been expensed during the three and six months ended June 30, 2024.

As of June 30, 2024, we have issued a total of approximately 3.0 million LTIP and Performance LTIP units, net of Performance LTIP cancellations.

All LTIP and Performance LTIP units, other than approximately 659,000 LTIP units and 353,000 Performance LTIP units issued from March 2015 to May 2024, had reached full economic parity with, and are convertible into, common units.

The following table presents the redeemable noncontrolling interests in Braemar OP (in thousands) and the corresponding approximate ownership percentage of our operating partnership:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Redeemable noncontrolling interests in Braemar OP (in thousands) $ 31,579 $ 32,395

4 unchanged sentences

We allocated net (income) loss to the redeemable noncontrolling interests as illustrated in the table below (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net (income) loss attributable to redeemable noncontrolling interests in operating partnership $ 1,919 $ 925 $ 1,623 $ 664

1 unchanged sentence

The following table presents the common units redeemed for cash (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Units redeemed

2 unchanged sentences

____________________________________

(1) Includes Mr.

Bennett’s 1.4 million common units redeemed for cash of approximately $ 7.0 million during February 2023.

1 unchanged sentence

Common Stock Dividends —The following table summarizes the common stock dividends declared during the period (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Common stock dividends declared $ 3,347 $ 3,335 $ 6,692 $ 6,669

1 unchanged sentence

We also issue common stock to certain of our independent directors, which vests immediately upon issuance.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

In May 2024, approximately 45,000 shares of common stock were issued to independent directors with a fair value of approximately $ 126,000 , which vested immediately upon grant and have been expensed during the three and six months ended June 30, 2024.

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.

2 unchanged sentences

The performance criteria are based on performance conditions under the relevant literature and were issued to non-employees.

The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the corresponding measurement date fair value of the

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

award, which 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.

The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the corresponding measurement date fair value of the award, which 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.

8.25 % Series D Cumulative Preferred Stock- The Series D Preferred Stock dividend for all issued and outstanding shares is set at $ 2.0625 per annum per share.

The following table summarizes dividends declared (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Series D Cumulative Preferred Stock $ 825 $ 825 $ 1,650 $ 1,650

Stock Repurchases —On May 3, 2024, the board of directors approved a new share 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 $ 50 million.

As of June 30, 2024, the Company has not repurchased any common stock.

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;

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.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Series B Convertible Preferred Stock $ 1,058 $ 1,058 $ 2,116 $ 2,116

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Series E Redeemable Preferred Stock

13 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;

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

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.

7 unchanged sentences

The Company has a DRIP that allows participating holders to have their Series E Preferred Stock dividend distributions automatically reinvested in additional shares of the Series E Preferred Stock at a price of $ 25.00 per share.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The issuance activity of the Series E Preferred Stock is summarized below (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Series E Preferred Stock shares issued (1)

1 unchanged sentence

$ — $ — $ — $ 85,444

__________________

(1) Exclusive of shares issued under the DRIP.

4 unchanged sentences

The redemption value adjustment of Series E Preferred Stock is summarized below (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Series E Preferred Stock $ 374,847 $ 377,035

3 unchanged sentences

The following table summarizes dividends declared (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Series E Preferred Stock $ 7,570 $ 7,986 $ 15,170 $ 15,520

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The redemption activities of Series E Preferred Stock is summarized below (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Series E Preferred Stock shares redeemed 53 21 239 32

7 unchanged sentences

Holders of the Series M Preferred Stock shall have the right to vote for the election of directors of the Company and on all other matters requiring stockholder action by the holders of the common stock, each share being entitled to vote to the same extent as one share of the Company’s common stock, and all such shares voting together as a single class.

If and whenever dividends on any shares of Series M Preferred Stock shall be in arrears for 18 or more monthly periods, whether or not such

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

quarterly periods are consecutive, the number of directors then constituting the board shall be increased by two and the holders of such shares of Series M Preferred Stock (voting together as a single class with all other classes or series of capital stock ranking on a parity with the Series M Preferred Stock) shall be entitled to vote for the election of the additional directors of the Company who shall each be elected for one-year terms.

If and whenever dividends on any shares of Series M Preferred Stock shall be in arrears for 18 or more monthly periods, whether or not such quarterly periods are consecutive, the number of directors then constituting the board shall be increased by two and the holders of such shares of Series M Preferred Stock (voting together as a single class with all other classes or series of capital stock ranking on a parity with the Series M Preferred Stock) shall be entitled to vote for the election of the additional directors of the Company who shall each be elected for one-year terms.

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.

9 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.

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.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Series M Preferred Stock shares issued (1)

1 unchanged sentence

$ — $ — $ — $ 12,869

__________________

(1) Exclusive of shares issued under the DRIP.

3 unchanged sentences

As a result of the Company’s determination that redemption is probable, the carrying value will be adjusted to the redemption amount each reporting period.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The redemption value adjustment of Series M Preferred stock is summarized below (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Series M Preferred Stock $ 40,569 $ 45,623

4 unchanged sentences

The following table summarizes dividends declared (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Series M Preferred Stock $ 876 $ 1,008 $ 1,800 $ 1,941

The redemption activities of Series M Preferred Stock is summarized below (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Series M Preferred Stock shares redeemed 126 4 213 5

6 unchanged sentences

Under our advisory agreement, we pay advisory fees to Ashford LLC.

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;

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.

We pay a monthly base fee equal to 1/12 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;

provided, however, in no event shall the base fee for

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

1 unchanged sentence

▪ 90 % of the base fee paid for the same month in the prior year;

▪ 1/12 th of the G&A Ratio (as defined) multiplied by the total market capitalization of Braemar.

▪ 1/12 of the G&A Ratio (as defined) multiplied by the total market capitalization of Braemar.

We are also required to pay Ashford LLC an incentive fee that is measured annually (or for a stub period if the advisory agreement is terminated at other than year-end).

2 unchanged sentences

We also recorded equity-based compensation expense for equity grants of common stock, PSUs and LTIP units awarded to officers and employees of Ashford LLC in connection with providing advisory services.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the advisory services fees incurred (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Advisory services fee

1 unchanged sentence

Reimbursable expenses (1)

2,961 2,042 5,226 4,064

Equity-based compensation (2)

883 2,506 1,991 4,792

Incentive fee 648 — 648 —

Total $ 7,828 $ 8,215 $ 14,528 $ 16,163

2 unchanged sentences

On September 27, 2022, an agreement was entered into by Ashford Inc., Ashford Trust and Braemar pursuant to which the Advisor is to implement the REITs’ cash management strategies.

This will include actively managing the REITs excess cash by primarily investing in short-term U.S.

This includes actively managing the REITs excess cash by primarily investing in short-term U.S.

Treasury securities.

13 unchanged sentences

Each year Ashford Inc.

collects funds from Ashford Trust, Braemar, Stirling OP and their respective hotel management companies, to fund the casualty insurance program as needed, on an allocated basis .

We engage Lismore or its subsidiaries to provide debt placement services and assist with loan modifications or refinancings our behalf.

For the three months ended March 31, 2024 and 2023, we incurred fees of $ 1.1 million and $ 0 , respectively.

collects funds from Ashford Trust, Braemar,

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stirling OP and their respective hotel management companies, to fund the casualty insurance program as needed, on an allocated basis .

We engage Lismore or its subsidiaries to provide debt placement services and assist with loan modifications or refinancings on our behalf and brokerage services.

For the three and six months ended June 30, 2024, we incurred fees of $ 50,000 and $ 1.1 million, respectively.

We incurred fees from Lismore or its subsidiaries of $ 98,000 for both three and six months ended June 30, 2023.

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.

Upon reaching the earlier of $ 400 million in aggregate capital raised, or June 10, 2023, there was to 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 was based on the actual amount of capital raised by Ashford Inc., Ashford Trust and Braemar, respectively, through Ashford Securities (the

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

resulting ratio of contributions among the Parties, the “Initial True-up Ratio”).

On January 27, 2022, Ashford Trust, Braemar and Ashford Inc.

5 unchanged sentences

To the extent contributions made by any of the Parties through December 31, 2023 differed from the amounts owed pursuant to the foregoing, the Parties shall make true up payments to each other to settle the difference.

The terms of this agreement included a life-to-date true-up based on the new terms of the agreement and a new funding schedule for ongoing funding of the broker dealer.

Going forward, each capital call will be funded according to the percentages of the discrete raises accomplished in the prior quarter.

During the first quarter of 2024, the funding requirement was revised based on the aggregate capital raised through Ashford Securities.

This resulted in Braemar receiving a payment of approximately $ 5.9 million from Ashford Inc., which resulted in a credit to expense of approximately $ 5.6 million that is included in “corporate general and administrative” on the condensed consolidated statements of operations for the three months ended March 31, 2024.

As of March 31, 2024, Braemar has funded approximately $ 13.0 million and has a pre-funded balance of $ 1.9 million that is included in “other assets” on the condensed consolidated balance sheet.

As of December 31, 2023, Braemar had funded approximately $ 20.9 million and had a pre-funded balance of approximately $ 693,000 that is included in “other assets” and a receivable of approximately $ 3.5 million that is included in “due to Ashford Inc., net” on the consolidated balance sheet.

As of June 30, 2024, Braemar has funded approximately $ 12.9 million and has a pre-funded balance of $ 1.9 million that is included in “other assets” on the condensed consolidated balance sheet.

As of December 31, 2023, Braemar had funded approximately $ 20.9 million and had a pre-funded balance of approximately $ 693,000 included in “other assets” and a receivable of approximately $ 3.5 million included in “due to Ashford Inc., net” on the consolidated balance sheet.

During the first quarter of 2024 there was also a true-up of the capital contributions in accordance with the Third Amended and Restated Contribution Agreement made through December 31, 2023, which resulted in a payment of $ 3.5 million from Ashford Inc.

The table below summarizes the amount Braemar has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Line Item 2024 2023 2024 2023

Corporate, general and administrative $ — $ 1,024 $ ( 5,624 ) $ 2,219

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Design and Construction Services

10 unchanged sentences

Hotel Management Services

At March 31, 2024, Remington Hospitality managed four of our 16 hotel properties.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

At June 30, 2024, 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

Restricted Cash —Under certain management and debt agreements for our hotel properties existing at March 31, 2024, escrow payments are required for insurance, real estate taxes and debt service.

Restricted Cash —Under certain management and debt agreements for our hotel properties existing at June 30, 2024, 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.

4 unchanged sentences

and (iii) 5 % of the gross rooms revenue for the preceding calendar month for the remainder of the term.

As of March 31, 2024, we are currently paying 3 % of gross revenues.

As of June 30, 2024, we are currently paying 3 % of gross revenues.

The table below summarizes the franchise fees incurred (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Line Item 2024 2023 2024 2023

Other hotel expenses $ 94 $ — $ 174 $ —

Management Fees —Under hotel management agreements for our hotel properties existing at March 31, 2024, 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 2029 through December 2065, with renewal options.

Management Fees —Under hotel management agreements for our hotel properties existing at June 30, 2024, 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 November 2029 through December 2065, with renewal options.

If we terminate a management agreement prior to its expiration, we may be liable for estimated management fees through the remaining term, liquidated damages or, in certain circumstances, we may substitute a new management agreement.

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Notices to potential class members were sent out on February 2,

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Potential class members had until April 4, 2021 to opt-out of the class;

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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.

As of March 31, 2024, no amounts have been accrued.

As of June 30, 2024, no amounts have been accrued.

On June 8, 2022, a lawsuit was filed against various Hilton entities on behalf of a class of all hourly employees at all Hilton-branded managed properties in California, including Hilton La Jolla Torrey Pines.

The complaint includes claims for unpaid wages, meal and rest break violations, and unreimbursed business expenses, along with various derivative claims including wage statement, final pay, and Private Attorneys General Act (“PAGA”) claims.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

On November 30, 2023, Hilton mediated this litigation, but it did not result in a settlement.

At the end of the mediation, the mediator submitted a mediator’s proposal for approximately $ 3.5 million, which the parties are still considering.

The allocation to Hilton La Jolla Torrey Pines would be approximately $ 371,000 , which has been accrued as of March 31, 2024.

At the end of the mediation, the mediator submitted a mediator’s proposal for approximately $ 3.5 million, which the parties have since agreed to.

The allocation to Hilton La Jolla Torrey Pines is approximately $ 371,000 , which has been accrued as of June 30, 2024.

We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated.

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District Court for the Northern District of Texas.

On May 17, 2024, we filed a Motion to Dismiss the Consolidated Class Action Complaint, which is currently pending before the Court.

We intend to vigorously defend this matter and do not believe that any potential loss is reasonably estimable at this time.

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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.

As of March 31, 2024 and December 31, 2023, all of our hotel properties were in the U.S.

As of June 30, 2024 and December 31, 2023, all of our hotel properties were in the U.S.

and its territories.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Subsequent Events

On May 3, 2024, the board of directors approved a new share 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 $ 50 million.

On May 6, 2024, CHH Torrey Pines Hotel Partners, LP and CHH Torrey Pines Tenant Corp.

(together, “Seller”), indirect subsidiaries of the Company, entered into an Agreement of Purchase and Sale with JRK Torrey Pines Hotel Owner LLC, for the sale of the Hilton La Jolla Torrey Pines hotel for $ 165 million in cash, subject to customary pro-rations and adjustments.

The Company owns an indirect 75 % equity interest in Seller.

The sale of the hotel is expected to close in the second quarter of 2024, subject to customary closing conditions.

In February 2024, the Company and Ashford Inc.

approved funding up to an additional $ 1.0 million, in the aggregate, for OpenKey, allocated pro rata among them.

On July 1, 2024, the Company funded $ 79,000 .

Blackwells Capital

On July 2, 2024, Braemar, Ashford Trust and Ashford Inc.

(collectively with the Company, Ashford Trust and each of Ashford Inc.’s, the Company’s and Ashford Trust’s respective affiliates (including Stirling Hotels & Resorts, Inc.) and any entity advised by Ashford Inc., the “Company Group”) entered into a Cooperation Agreement (the “Agreement”) with Blackwells Capital LLC, Blackwells Onshore I LLC, Blackwells Holding Co.

LLC, Vandewater Capital Holdings, LLC, Blackwells Asset Management LLC, BW Coinvest Management I LLC and Jason Aintabi (collectively, the “Blackwells Parties”) regarding the withdrawal of the Blackwells Parties’ proxy campaign, dismissal of pending litigation involving the parties and certain other matters.

Pursuant to the Agreement, the Blackwells Parties have agreed to withdraw (i) the notice delivered to the Company on March 10, 2024 purporting to nominate four director candidates to the Company’s board of directors (the “Board”) and make certain other proposals and (ii) the definitive proxy statement filed with the U.S.

Securities and Exchange Commission (the “SEC”) on April 3, 2024 to solicit proxies from stockholders of the Company to vote in favor of the Blackwells Parties’ director nominees and proposals.

In connection therewith, the Blackwells Parties will cease to take any further action with respect to the Company’s 2024 Annual Meeting of Stockholders, except as otherwise provided for in the Agreement.

The Blackwells Parties have also agreed to specified standstill restrictions with respect to the Company Group, which will expire on July 2, 2034.

During the standstill period, the Blackwells Parties are required to (i) appear in person or by proxy at each meeting of stockholders of the members of the Company Group in which they beneficially own shares of stock and vote any Blackwells Parties’ shares then beneficially owned by them in accordance with the recommendation of the board of directors of such member of the Company Group on any proposals considered at such meeting and (ii) deliver consents or consent revocations in any action by written consent by stockholders of any member of the Company Group in which they beneficially own shares in accordance with the recommendation of the board of directors of such member of the Company Group.

The Agreement also provides for the voluntary dismissal, with prejudice, of the consolidated action pending in the U.S.

District Court for the Northern District of Texas to which the Company, Blackwells Capital LLC and certain of their respective related parties are parties (the “Consolidated Litigation”).

The Company has agreed to reimburse Blackwells Capital LLC, in an amount agreed upon by the parties, for the Blackwells Parties’ reasonable attorneys’ fees and expenses incurred in connection with the Consolidated Litigation and related matters.

Additionally, pursuant to the Agreement, the Board will take steps to identify and select one additional individual to be appointed to the Board as an independent director (the “Additional Board Member”).

The Board is required to promptly notify Blackwells Capital LLC of its selection of the Additional Board Member and to consider any input Blackwells Capital LLC may have with respect to the Additional Board Member.

The Agreement contains various other obligations and provisions applicable to the Company Group and the Blackwells Parties, including a mutual release of claims and mutual non-disparagement.

Concurrently and in connection with the Agreement, certain of the parties thereto have also entered into a Share Ownership Agreement (the “Share Ownership Agreement”) and a Loan Agreement (the “Loan Agreement”), pursuant to which agreements the Company will provide to BW Coinvest I, LLC (“Borrower”) an unsecured loan (the “Loan”).

The proceeds from the Loan will be used to reimburse Borrower for 70 % of the amount expended by Borrower to purchase on the open market a total of 3,500,000 shares of the Company’s common stock (the “Purchased Shares”) within six months of the date of Loan Agreement, at a price per Purchased Share not to exceed $ 10 and subject to the other limitations set forth therein.

The Loan has a term of five years (the “Term”), is guaranteed by Jason Aintabi, Vandewater Capital Holdings, LLC, Blackwells Holding Co.

LLC, and Blackwells Asset Management LLC and shall bear payment-in-kind interest during the Term at a rate equal to the sum of (a) Term SOFR (as defined in the Loan Agreement) and (b) 3.00 % (three hundred basis points) per annum.

The Company has agreed to reimburse Blackwells Capital LLC, in an amount agreed upon by the parties, for the Blackwells Parties’ reasonable due diligence expenses incurred on or prior to the date of the Share Ownership Agreement.

As of August 7, 2024, the Company has loaned approximately $ 4.1 million that has been used to purchase approximately 1.7 million shares of Braemar common stock.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Hilton La Jolla Torrey Pines

On July 17, 2024, we sold the Hilton La Jolla Torrey Pines hotel pursuant to an Agreement of Purchase and Sale, entered into effective May 6, 2024, for $ 165 million in cash, subject to customary pro-rations and adjustments.

The Company owned an indirect 75 % equity interest in the hotel property.

Additionally, the Company repaid the $ 66.6 million mortgage loan secured by the hotel property.

The net carrying value of the building and furniture, fixtures and equipment was approximately $ 65.2 million as of June 30, 2024.

Limited Waiver Under Advisory Agreement

The Company, Braemar OP, Braemar TRS, Ashford Inc.

and Ashford Hospitality Advisors LLC (together with Ashford Inc., the “Advisor”), are parties to that certain Fifth Amended and Restated Advisory Agreement, dated as of April 23, 2018 (as amended, the “Advisory Agreement”).

The Company has a mortgage loan maturing in June 2025 with an outstanding principal balance of approximately $ 293 million (the “Loan”) secured by four hotel properties:

The Notary Hotel;

Sofitel Chicago Magnificent Mile;

and Marriott Seattle Waterfront (the “Hotel Properties”).

On August 8, 2024, the parties to the Advisory Agreement entered into a Limited Waiver Under Advisory Agreement (the “Waiver Agreement”) that provides, among other things, as follows:

(i) From August 8, 2024 until the earlier of (i) November 15, 2025 and (ii) the refinancing of the Loan (the “Loan Outside Date”), the Advisor waives the operation of Section 12.4(a) of the Advisory Agreement that would permit the Advisor to terminate the Advisory Agreement occurring solely as a result from the sale or disposition of one or more of the Hotel Properties as a result of a mortgage foreclosure, deed-in-lieu of mortgage foreclosure, mezzanine loan foreclosure or an assignment in-lieu of a mezzanine loan foreclosure following the failure of the Company to pay, upon the maturity of the Loan, all amounts due and payable thereunder (the “Limited Waiver”);

(ii) Upon the satisfaction of certain conditions, the Company may request the Advisor agree to amend the Waiver Agreement to extend the Loan Outside Date for a period not to exceed ninety (90) days from November 15, 2025 and if the Advisor agrees to such amendment, the Advisor shall not be entitled to any further consideration in respect thereof;

(iii) If the members of the Board of Directors of the Company (the “Board”) change such that members who constitute the Board as of August 8, 2024 (the “Incumbent Board”) no longer constitute at least a majority of the Board (other than those whose election to the Board is approved or recommended to stockholders of the Company by a vote of at least a majority of the Incumbent Board), the Limited Waiver shall be null and void ab initio (but the consideration provided by the Company to the Advisor as described in item (iv) below shall remain in force);

(iv) In exchange for the Limited Waiver and the other agreements provided by the Advisor in the Waiver Agreement, the Company agrees to pay the Advisor an amount equal to the Advisor’s obligation under the Advisor’s current employment agreement with Richard J.

Stockton, the Company’s President and Chief Executive Officer (the “Stockton Employment Agreement”), to pay Mr.

Stockton a multiple of his Base Salary (as defined in the Stockton Employment Agreement) that becomes payable by the Advisor to Mr.

Stockton as the result of the occurrence of certain events as more fully described in the Waiver Agreement.

Mortgage Loan Refinance

On August 7, 2024, the Company closed on a refinancing involving five hotels.

The new loan totals $ 407 million and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions, taking the final maturity to 2029.

The loan is interest only and provides for a floating interest rate of SOFR + 3.24 %.

As part of this financing, the Company acquired $ 42.2 million of the most junior tranche of the loan, which lowered its net spread on the $ 364.8 million remaining loan amount to SOFR + 3.01 %.

The loan is secured by five hotels:

Pier House Resort & Spa, Bardessono Hotel & Spa, Hotel Yountville, The Ritz-Carlton Sarasota, and The Ritz-Carlton St.

The new loan refinanced the $ 80.0 million loan secured by the Pier House Resort & Spa which had an interest rate of SOFR + 3.60 % and had a final maturity date in September 2025, the $ 42.5 million loan secured by The Ritz-Carlton St.

Thomas which had an interest rate of SOFR + 4.35 % and had a final maturity date in August 2026, and the $ 200.0 million secured credit facility secured by The Ritz-Carlton Sarasota, Hotel Yountville, and Bardessono Hotel & Spa which had an interest rate of SOFR + 3.10 % and had a final maturity date in July 2027.

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

What changed 10-Q

Item 1. Financial Statements