What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-12 compared with 2024-03-14 · 215 added, 207 removed, 469 unchanged (47% of the section changed)

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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 own 14 of our hotel properties directly, and the remaining one hotel property, through an investment in a majority-owned consolidated entity.

We are advised by Ashford LLC through an advisory agreement.

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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.

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 claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services, mobile key technology and cash management services.

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%.

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%.

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.

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 previously 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”).

Pursuant to the Agreement, the Consolidated Litigation was voluntarily dismissed, with prejudice, on July 3, 2024.

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 was required to 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 was 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.

In accordance with the Cooperation Agreement, on October 4, 2024, the Board increased the number of directors of the Company from eight to nine and appointed Mr.

Shah as the Additional Board Member to serve until the Company’s next annual meeting of stockholders and until his successor is duly elected and qualified.

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 March 10, 2025, the Company has loaned approximately $8.1 million that has been used to purchase 3.5 million shares of Braemar common stock.

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 “Mortgage 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 (a) November 15, 2025 and (b) the refinancing of the Mortgage 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 Mortgage 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 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 of directors (other than those whose election to the board of directors 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.

On January 14, 2025, the Company amended its mortgage loan secured by the 170-room Ritz-Carlton Lake Tahoe.

The terms of the amendment included a $10.0 million principal pay down, extending the current maturity date to July 2025, an interest rate reduction to SOFR + 3.25%, and one six-month extension option subject to satisfaction of certain conditions.

The mortgage loan had an initial maturity date in January 2025.

On March 7, 2025, the Company refinanced its $293.2 million mortgage loan secured by The Clancy, The Notary Hotel, Marriott Seattle Waterfront, and Sofitel Chicago Magnificent Mile, which had an interest rate of SOFR + 2.66% and a final maturity date in June of 2025 and its $62.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which had an interest rate of SOFR + 4.75% and a final maturity date in March of 2026.

The new $363.0 million mortgage loan bears interest at a floating interest rate of SOFR + 2.52% and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions.

The mortgage loan is secured by five hotels:

The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, and The Ritz-Carlton Reserve Dorado Beach.

The $363.0 million mortgage loan amount represents an approximate 49% loan-to-value based on third-party appraisals completed by the lender.

The appraisals valued the hotels at approximately $742 million based on the sum of their “as-is” values.

On March 10, 2025, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc.

and Ashford LLC (the “2025 Advisory Agreement Limited Waiver”).

Pursuant to the 2025 Advisory Agreement Limited Waiver, the Company, the Operating Partnership, TRS and the Advisor waive the operation of any provision in our advisory agreement that would otherwise limit the ability of the Company in its discretion, at the Company’s cost and expense, to award during the first and second fiscal quarters of calendar year 2025, cash incentive compensation to employees and other representatives of the Advisor.

Key Indicators of Operating Performance

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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 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.

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Short-term supply is also expected to be below long-term averages.

While the industry is

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.

While the industry is 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.

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Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

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):

The following table summarizes changes in key line items from our consolidated statements of operations for the year ended December 31, 2024 and 2023 (in thousands except percentages):

Year Ended December 31, Favorable (Unfavorable)

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Advisory services fee 30,487 31,089 602 1.9

(Gain) loss on legal settlements — (114) (114) (100.0)

Corporate general and administrative 14,361 13,523 (838) (6.2)

Total expenses 687,819 677,670 (10,149) (1.5)

Gain (loss) on disposition of assets and hotel property

88,165 — 88,165

Operating income (loss) 128,750 61,673 67,077 108.8

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Net income (loss) attributable to the Company $ (1,693) $ (27,017) $ 25,324 93.7 %

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.

All hotel properties owned for the year ended December 31, 2024 and 2023 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 year ended December 31, 2024 and 2023.

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:

The following disposition affects 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

The following table illustrates the key performance indicators of all hotel properties owned for the periods indicated:

Hilton La Jolla Torrey Pines

La Jolla, California

July 17, 2024

The following table illustrates the key performance indicators of all hotel properties that were included in our results of operations during the year ended December 31, 2024 and 2023:

Year Ended December 31,

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Total hotel revenue (in thousands) $ 728,404 $ 739,343

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:

The following table illustrates the key performance indicators of the 15 hotel properties that were owned for the full year ended December 31, 2024 and 2023:

Year Ended December 31,

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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.

Net loss attributable to the Company decreased $25.3 million from a net loss of $27.0 million for the year ended December 31, 2023 (“2023”) to $1.7 million for the year ended December 31, 2024 (“2024”), 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.

Rooms revenue decreased $12.5 million to $452.4 million during 2024 compared to 2023 primarily due to the sale of the Hilton La Jolla Torrey Pines in July 2024.

During 2024, we experienced an increase of 0.1% in room rates and a 69 basis point increase in occupancy compared to 2023.

Fluctuations in rooms revenue between 2024 and 2023 are a result of the changes in occupancy and ADR between 2024 and 2023 as reflected in the table below (dollars in thousands):

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The Ritz-Carlton St.

Thomas (10,455) (738) (8.8) %

(2,929) (264) (2.5) %

Park Hyatt Beaver Creek Resort & Spa (1,284) 70 (6.6) %

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(672) (52) (1.2) %

Hilton La Jolla Torrey Pines 855 151 1.1 %

Bardessono Hotel and Spa (1)

(1,691) (526) (2.8) %

The Ritz-Carlton Lake Tahoe (1) (2)

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(2,115) (583) (11.1) %

The Ritz-Carlton Reserve Dorado Beach (442) (146) 1.4 %

Four Seasons Resort Scottsdale 915 549 (8.2) %

Total $ 696 128 (2.3) %

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

Hilton La Jolla Torrey Pines $ (13,234) 29 (0.9) %

(1) This hotel was under renovation during 2024.

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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.

Food and beverage revenue decreased $4.1 million, or 2.2%, to $181.3 million during 2024 compared to 2023.

We experienced an aggregate decrease in food and beverage revenue of $4.7 million at seven comparable hotel properties as well as a decrease of $6.6 million at Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $7.2 million at Four Seasons Resort Scottsdale, The Ritz-Carlton St.

Thomas, The Notary Hotel, Sofitel Chicago Magnificent Mile, Marriott Seattle Waterfront, Capital Hilton, Hotel Yountville, and Pier House Resort & Spa.

Other Hotel Revenue .

Other hotel revenue, which consists mainly of condo management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, increased $5.7 million, or 6.4%, to $94.8 million during 2024 compared to 2023.

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.

This increase is attributable to higher other hotel revenue of $9.6 million at 12 comparable hotel properties.

These increases were partially offset by a decrease of $3.0 million at Hilton La Jolla Torrey Pines as well as an aggregate decrease of approximately $943,000 at The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton Lake Tahoe, and The Ritz-Carlton St.

Rooms Expense .

Rooms expense increased $1.0 million, or 1.0%, to $106.5 million in 2024 compared to 2023.

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.

This increase is attributable to an aggregate increase in rooms expense of $4.3 million at nine comparable hotel properties.

These increases were partially offset by an aggregate decrease of approximately $1.0 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.

Thomas, Bardessono Hotel and Spa, Hotel Yountville, The Clancy, Park Hyatt Beaver Creek Resort & Spa and Cameo Beverly Hills, as well as a decrease of $2.3 million at Hilton La Jolla Torrey Pines.

Food and Beverage Expense .

Food and beverage expense increased $1.4 million, or 0.9%, to $145.9 million during 2024 compared to 2023.

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.

This increase is attributable to higher food and beverage expense of $6.3 million at twelve comparable hotel properties.

These increases were partially offset by an aggregate decrease of approximately $1.5 million at The Ritz-Carlton Lake Tahoe, Cameo Beverly Hills and Bardessono Hotel and Spa, as well as a decrease of $3.5 million at Hilton La Jolla Torrey Pines.

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 decreased $2.0 million, or 0.9%, to $225.9 million in 2024 compared to 2023.

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.

We experienced an increase of $938,000 in direct expenses and a decrease of $3.0 million in indirect expenses and incentive management fees in 2024 compared to 2023.

Direct expenses were 4.5% of total hotel revenue in 2024 and 4.3% in 2023.

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.

The increase in direct expenses is associated with higher direct expenses of approximately $1.8 million at nine comparable hotel properties.

These increases were partially offset by lower direct expenses of $471,000 at The Ritz-Carlton Reserve Dorado Beach, Bardessono Hotel and Spa, Cameo Beverly Hills, The Clancy, The Notary Hotel, and Capital Hilton, as well as $402,000 at Hilton La Jolla Torrey Pines.

The decrease in indirect expenses comprises decreases in:

(i) incentive management fees of $1.9 million comprising an aggregate decrease of $1.8 million at our 15 comparable hotel properties and a decrease of $89,000 at the one disposed hotel property;

(ii) lease expense of $2.3 million comprising of a decrease of $2.3 million at the one disposed hotel property partially offset by an aggregate increase of $8,000 at our 15 comparable hotel properties;

(iii) energy costs of $907,000 comprising a decrease of $911,000 at the one disposed hotel property partially offset by an aggregate decrease of $4,000 at our 15 comparable hotel properties.

These decreases are partially offset by increases in:

(i) general and administrative costs of $618,000 comprising an aggregate increase of $2.2 million at our 15 comparable hotel properties partially offset by a decrease of $1.6 million at the one disposed hotel property;

(ii) repairs and maintenance of $1.1 million comprising an aggregate increase of $1.6 million at our 15 comparable hotel properties partially offset by a decrease of $516,000 at the one disposed hotel property;

and (ii) marketing costs of $334,000 comprising an aggregate increase of $1.9 million at our 15 comparable hotel properties partially offset by a decrease of $1.6 million at the one disposed hotel property.

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.

Base management fees increased $239,000, or 1.0%, to $23.5 million in 2024 compared to 2023.

Management fees increased $1.4 million at seven comparable hotel properties.

These increases were partially offset by an aggregate decrease of $448,000 at Cameo Beverly Hills, The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton St.

Thomas, Bardessono Hotel and Spa, The Clancy, Pier House Resort & Spa, Park Hyatt Beaver Creek Resort & Spa, and Hotel Yountville, as well as a decrease of $685,000 at Hilton La Jolla Torrey Pines.

Property Taxes, Insurance and Other .

Property taxes, insurance and other increased $3.9 million, or 10.0%, to $42.5 million in 2024 compared to 2023.

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.

This increase is primarily attributable to an increase of $4.1 million at the Sofitel Chicago

Magnificent Mile related to a property tax refund received in 2023 and an aggregate increase of $2.7 million at 12 comparable hotel properties.

These increases were partially offset by an aggregate decrease of approximately $620,000 at Four Seasons Resort Scottsdale and Park Hyatt Beaver Creek Resort & Spa and a decrease of $1.2 million at Hilton La Jolla Torrey Pines.

Depreciation and Amortization .

Depreciation and amortization increased $5.5 million, or 5.9%, to $98.7 million for 2024 compared to 2023.

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.

This increase is comprised of an aggregate increase of $11.6 million at ten comparable hotel properties.

These increases were partially offset by an aggregate decrease of $4.3 million at The Notary Hotel, The Clancy, Pier House Resort & Spa, The Ritz-Carlton St.

Thomas and Sofitel Chicago Magnificent Mile, primarily due to fully depreciated assets, as well as a decrease of $1.8 million at Hilton La Jolla Torrey Pines.

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.

Advisory services fee decreased $602,000, or 1.9%, to $30.5 million in 2024 compared to 2023 due to lower equity-based compensation of $6.5 million and base advisory fee of $144,000, partially offset by higher reimbursable expenses of $3.3 million and a higher incentive fee of $2.7 million.

In 2024, we recorded an advisory services fee of $30.5 million, which included a base advisory fee of $13.8 million, reimbursable expenses of $11.6 million, $2.3 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.

and an incentive fee of $2.7 million.

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

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.

Corporate general and administrative expense was $14.4 million in 2024 compared to expense of $13.5 million in 2023.

The increase in corporate general and administrative expenses is primarily attributable to higher professional fees of $3.9 million and $6.0 million of reimbursed legal costs in 2024 as well as higher public company costs of $69,000.

These increases were partially offset by lower miscellaneous expenses of $299,000 and lower reimbursed operating expenses of Ashford Securities of $8.9 million.

The decrease in Ashford Securities reimbursed operations expenses was related to a revision to the estimated contribution amount associated with the Fourth Amended and Restated Contribution Agreement with Ashford Securities that resulted in a $4.5 million credit to expense in 2024.

Gain (loss) on disposition of assets and hotel property .

In 2024, we recorded a gain of approximately $88.2 million primarily related to the sale of Hilton La Jolla Torrey Pines.

There was no such gain (loss) recorded for 2023.

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.

In 2024 and 2023, we recorded equity in loss of unconsolidated entity of $1.6 million and $253,000, respectively, related to our investment in OpenKey.

In 2024, equity in loss included an impairment charge to the OpenKey investment of $1.4 million.

There was no such impairment recorded in 2023.

Interest Income .

Interest income was $7.1 million and $6.4 million in 2024 and 2023, 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.

The increase in interest income in 2024 was primarily attributable to higher average excess cash balances in 2024 compared to 2023, as well as by interest income associated with a tranche of CMBS included in investment in securities.

Other Income (Expense).

In 2023, we recorded miscellaneous income of $293,000.

In 2023, we recorded $293,000 of miscellaneous income.

Interest Expense and Amortization of Discounts and Loan Costs .

Interest expense and amortization of discounts and loan costs increased $13.9 million, or 14.8%, to $108.1 million for 2024 compared to 2023.

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 increase is primarily due to higher interest expense from higher average interest rates in 2024 and higher amortization of loan costs of approximately $3.0 million in 2024 compared to 2023.

The average SOFR rates for 2024 and 2023 were 5.15% and 4.91%, 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.

Write-off of loan costs and exit fees was $6.1 million in 2024 related to various loan refinances and modifications.

Write-off of loan costs and exit fees was $3.5 million in 2023 related to related to various loan modifications.

Gain (loss) on Extinguishment of Debt.

In 2024, we recognized a loss of $22,000 attributable to the discount associated with the Cameo Beverly Hills mortgage loan that was repaid on April 9, 2024.

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 gain on derivatives of $585,000 for 2024 consisted of an unrealized gain on warrants of $12,000 and a realized gain of $4.7 million associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $4.1 million.

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.

Income tax expense decreased $1.8 million, from $2.7 million in 2023 to $842,000 in 2024.

This decrease was primarily due to a decrease in the taxable income of certain of our TRS entities in 2024 compared to 2023.

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Our noncontrolling interest partner in consolidated entities was allocated income of $25.9 million and $1.6 million in 2024 and 2023, 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.

The allocated income for 2024 includes our partner’s share of gain on the sale of the Hilton La Jolla Torrey Pines.

At December 31, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity.

At December 31, 2023, 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.

Noncontrolling interests in operating partnership were allocated a net loss of $4.5 million in 2024 and $5.2 million in 2023.

Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 8.05% and 6.63% as of December 31, 2024 and 2023, respectively.

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• dividends on our preferred stock;

• redemptions of our non-traded preferred stock;

• 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.

We expect to meet our short-term liquidity requirements generally through net cash provided by operations, capital market activities, 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.

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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, 2024, the mortgage loan secured by The Ritz-Carlton Lake Tahoe was in a cash trap.

The amount of cash in the cash trap as of December 31, 2024 was $0.

As of December 31, 2024, the Company held cash and cash equivalents of $135.5 million and restricted cash of $49.6 million, the vast majority of which is comprised of lender and manager-held reserves.

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With respect to our indebtedness, as discussed in note 7 to our consolidated financial statements, we have current obligations of $417.1 million and long-term obligations of $805.9 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.

As of December 31, 2024, we held extension options to extend the principal for all of the debt due in 2025 except for $293.2 million.

Subsequent to December 31, 2024, we extended two mortgage loans and refinanced our $293.2 million mortgage loan with a final maturity in June 2025 and our $62 million mortgage loan with a final maturity in March 2026.

See discussions below in “Debt Transactions.”

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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”).

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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.

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.

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As of March 10, 2025, 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.

On May 3, 2024, our 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.

The Company intends to begin share repurchases as soon as practicable and may repurchase shares through open market transactions, privately negotiated transactions or other means.

The timing and amount of any transactions will be subject to the discretion of the Company based upon market conditions, and the program may be suspended or terminated at any time by the Company at its discretion without prior notice.

The board of directors’ authorization replaced any previous repurchase authorizations.

As of March 10, 2025, the Company has not repurchased any common stock pursuant to the plan.

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%.

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%;

(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 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.

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.

On January 3, 2024, the Company extended the mortgage loan secured by the Pier House Resort & Spa in Key West, Florida.

On January 29, 2024, the Company extended the mortgage loan secured by The Ritz-Carlton St.

Thomas in St.

Thomas, USVI.

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%.

The mortgage loan had a two-year term, was interest only and provided for a floating interest rate of SOFR + 4.75%.

In April 2024, the Company repaid the $30.0 million mortgage loan secured by the Cameo Beverly Hills hotel.

On July 17, 2024, the Company sold the Hilton La Jolla Torrey Pines 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.

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

The new mortgage loan totals $407.0 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 a tranche of CMBS with a par value of $42.2 million and a rate of SOFR + 5.20%.

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 2026, 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.

The $407.0 million mortgage loan amount represents an approximate 43% loan-to-value based on third-party appraisals completed by the lender.

The appraisals valued the hotels at $953 million based on the sum of their “as-is” values.

On January 14, 2025, the Company amended its mortgage loan secured by the 170-room Ritz-Carlton Lake Tahoe.

The mortgage loan had an initial maturity date in January 2025.

The $43.4 million current mortgage loan amount represents an approximate 27% loan-to-value based on a third-party appraisal completed by the lender.

The appraisal valued the hotel at $160 million based on its “as-is” value.

The mortgage loan is secured by five hotels:

The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, and The Ritz-Carlton Reserve Dorado Beach.

million mortgage loan amount represents an approximate 49% loan-to-value based on third-party appraisals completed by the lender.

The appraisals valued the hotels at $742 million based on the sum of their “as-is” values.

Sources and Uses of Cash

We had approximately $135.5 million and $85.6 million of cash and cash equivalents at December 31, 2024 and December 31, 2023, 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.

We anticipate using funds to pay for capital expenditures for our 15 hotel properties, estimated to be between approximately $75.0 million to $95.0 million in fiscal year 2025 and debt interest payments, estimated to be approximately $80.0 million in 2025 based on future payments using the one month SOFR rate as of December 31, 2024.

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.

Net cash flows provided by operating activities were $66.8 million and $84.7 million for the year ended December 31, 2024 and 2023, respectively.

Cash flows from operations were impacted by changes in hotel operations and the disposition of a hotel property.

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.

For the year ended December 31, 2024, net cash flows provided by investing activities were $35.5 million.

The cash inflows were primarily attributable to $155.6 million from the sale of Hilton La Jolla Torrey Pines and $958,000 from property insurance proceeds, partially offset by cash outflows of $42.3 million from the purchase of a tranche of CMBS, $70.6 million of capital improvements made to various hotel properties, $8.1 million from the issuance of a note receivable and a $79,000 loan to OpenKey.

Our capital improvements consisted of approximately $49.6 million of return on investment capital projects and approximately $21.0 million of renewal and replacement capital projects.

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 $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.

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.

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For the year ended December 31, 2024, net cash flows used in financing activities were $83.8 million.

Cash outflows primarily consisted of $184.1 million of repayments of indebtedness, $51.6 million of dividend and distribution payments, $1.6 million to purchase interest rate caps, $15.4 million of payments of loan costs and exit fees, $27.0 million distributions to noncontrolling interest in consolidated entities, and $45.6 million for cash redemptions of Series E and Series M preferred stock.

These cash outflows were partially offset by cash inflows of $234.0 million from borrowings on indebtedness, $4.9 million of proceeds from in-the-money interest rate caps and $3.0 million of contributions from noncontrolling interest in consolidated entities.

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.

We rely entirely on the performance of our properties and the ability of the properties’ managers to increase revenues to keep pace with inflation.

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At December 31, 2024, 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.

federal income tax purposes of $65.3 million, of which $45.8 million is subject to expiration and will begin to expire in 2025.

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

the remainder available to offset taxable income beyond 2034;

The loss carry forwards subject to expiration may be available to offset future taxable income, if any, for 2025 through 2035, with the remainder available to offset taxable income beyond 2035;

however, there could be substantial limitations on their use imposed by the Code.

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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.

In November 2023, the 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.

We adopted the standard effective for the year ended December 31, 2024.

See note 23 to our consolidated financial statements.

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):

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

In November 2024, the FASB issued ASU 2024-03 , Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses that requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the statement of operations.

In January 2025, the FASB issued ASU 2025-01 which amends the effective date of the new disaggregation of income statement expenses standard to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is still permitted.

The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the impact this ASU will have on our disclosures.

Non-GAAP Financial Measures

1 unchanged sentence

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.

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.

In addition, we exclude impairment on real estate, (gain) loss on disposition of assets and hotel property and the 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/loss on insurance settlements, legal, 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.

13 unchanged sentences

228,802 159,531 153,673

(Gain) loss on insurance settlement and disposition of assets — — (696)

(Gain) loss on disposition of assets and hotel property

EBITDAre 140,637 159,531 153,673

1 unchanged sentence

Transaction and conversion costs (1)

(4,447) 4,561 9,679

Write-off of premiums, loan costs and exit fees 6,111 3,489 146

7 unchanged sentences

Adjusted EBITDAre $ 157,575 $ 176,748 $ 172,408

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):

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(1) Includes amounts associated with to funding certain expenses of Ashford Securities LLC, in which 2024 include a true up of these expenses.

The results of the Hilton La Jolla Torrey Pines are excluded from its disposition date through December 31, 2024 (in thousands) (unaudited):

Year Ended December 31, 2024

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)

Thomas Cameo Beverly Hills The Ritz-Carlton Dorado Beach Four seasons Resort Scottsdale Hotel Total Corporate / Allocated (1)

Braemar Hotels & Resorts Inc.

9 unchanged sentences

Hotel EBITDA including amounts attributable to noncontrolling interest (3)

18,957 9,104 5,742 4,436 13,604 3,954 12,092 11,949 5,733 21,924 5,087 13,996 20,620 (1,485) 19,138 23,286 188,137 39,325 227,462

EBITDA adjustments attributable to consolidated noncontrolling interest (4,740) (2,276) — — — — — — — — — — — — — — (7,016) 7,016 —

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(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.

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):

(3) Referred to as hotel adjusted EBITDA in note 23 to the Company’s consolidated financial statements.

Year Ended December 31, 2023

Thomas Cameo Beverly Hills

The Ritz-Carlton Dorado Beach Four Seasons Resort Scottsdale

Thomas Cameo Beverly Hills The Ritz-Carlton Dorado Beach Four Seasons Resort Scottsdale

Hotel Total Corporate / Allocated (1)

10 unchanged sentences

Hotel EBITDA including amounts attributable to noncontrolling interest (3)

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

EBITDA adjustments attributable to consolidated noncontrolling interest (3,857) (4,322) — — — — — — — — — — — — — — (8,179) 8,179 —

5 unchanged sentences

(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.

(3) Referred to as hotel adjusted EBITDA in note 23 to the Company’s consolidated financial statements.

The results of the Cameo Beverly Hills are included from its acquisition date through December 31, 2021 (in thousands) (unaudited):

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

C Beverly Hills Hotel Hotel Total Corporate / Allocated (1)

Thomas Cameo Beverly Hills

The Ritz-Carlton Dorado Beach Four Seasons Resort Scottsdale

Hotel Total Corporate / Allocated (1)

Braemar Hotels & Resorts Inc.

9 unchanged sentences

Hotel EBITDA including amounts attributable to noncontrolling interest (3)

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

EBITDA adjustments attributable to consolidated noncontrolling interest (2,543) (4,333) — — — — — — — — — — — — — — (6,876) 6,876 —

5 unchanged sentences

(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.

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.

(3) Referred to as hotel adjusted EBITDA in note 23 to the Company’s consolidated financial statements.

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 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.

Our calculation of Adjusted FFO excludes transaction and conversion costs, other income/expense, write-off of premiums, loan costs and exit fees, legal, advisory and settlement costs, stock/unit-based compensation, severance, 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.

17 unchanged sentences

(8,958) (4,719) (6,954)

Gain (loss) on extinguishment of preferred stock — — (4,595)

Net income (loss) attributable to common stockholders (50,946) (74,040) (10,696)

3 unchanged sentences

Equity in (earnings) loss of unconsolidated entity 1,608 253 328

(Gain) loss on insurance settlement and disposition of assets — — (696)

(Gain) loss on disposition of assets and hotel property (1)

Company’s portion of FFO of OpenKey (322) (296) (333)

2 unchanged sentences

8,958 4,719 6,954

(Gain) loss on extinguishment of preferred stock — — 4,595

Transaction and conversion costs (2)

(4,447) 4,561 9,679

Write-off of premiums, loan costs and exit fees 6,111 3,489 146

4 unchanged sentences

Amortization of loan costs (1)

6,080 3,289 2,365

(Gain) loss on extinguishment of debt 22 (2,318) —

10 unchanged sentences

Amortization of loan costs (307) (94) (91)

Gain (loss) on disposition of assets and hotel property

(2) Includes amounts associated with to funding certain expenses of Ashford Securities LLC, in which 2024 include a true up of these expenses.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis