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Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-11 · 222 added, 174 removed, 566 unchanged (41% of the section changed)

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We operate in the direct hotel investment segment of the hotel lodging industry.

As of June 30, 2025, we owned interests in 15 hotel properties in seven states, the District of Columbia, Puerto Rico and St.

As of September 30, 2025, we owned interests in 14 hotel properties in six states, the District of Columbia, Puerto Rico and St.

Virgin Islands with 3,438 total rooms, or 3,298 net rooms, excluding those attributable to our joint venture partner.

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instead, we contractually engage hotel management companies to operate them for us under management contracts.

As of June 30, 2025, Remington Hospitality, a subsidiary of Ashford Inc., managed five of our 15 hotel properties.

As of September 30, 2025, Remington Hospitality, a subsidiary of Ashford Inc., managed five of our 14 hotel properties.

Third-party management companies managed the remaining hotel properties.

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Archie Bennett, Jr.

(together, the “Bennetts”), as of June 30, 2025, hold a controlling interest in Ashford Inc.

(together, the “Bennetts”), as of September 30, 2025, hold a controlling interest in Ashford Inc.

The Bennetts owned approximately 809,937 shares of Ashford Inc.

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Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, was convertible (at a conversion price of $117.50 per share) into an additional approximate 4,491,456 shares of Ashford Inc.

common stock, which if converted as of June 30, 2025, would have increased the Bennetts’ ownership interest in Ashford Inc.

common stock, which if converted as of September 30, 2025, would have increased the Bennetts’ ownership interest in Ashford Inc.

The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr.

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Additionally, Mr.

Bennett acquired the right to direct votes, effective March 25, 2025, and as of June 30, 2025 those rights represented approximately 565,000 common shares.

As of June 30, 2025, Mr.

Bennett acquired the right to direct votes, effective March 25, 2025, and as of September 30, 2025, those rights represented approximately 565,000 common shares.

As of September 30, 2025, Mr.

Bennett and Mr.

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Recent Developments

On April 1, 2025, Ms.

Kellie Sirna was appointed to serve on our board of directors, effective immediately, to serve until the next annual meeting of stockholders of the Company or until her successor is duly elected and qualified.

The board of directors has determined that Ms.

Sirna is an independent director under NYSE listing standards and the Company’s corporate governance guidelines.

On May 5, 2025, the Company completed the transition of the 415-room Sofitel Chicago Magnificent Mile from a brand-managed hotel to a franchise structure.

Under the franchise structure, the hotel will continue to be the Sofitel Chicago Magnificent Mile, but will be managed by Remington Hospitality under the existing terms of its Master Hotel Management Agreement.

The management agreement with Remington Hospitality is terminable upon the sale of the hotel.

The Company plans to renovate the lobby, restaurant, and meeting space over the next two years.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

We are currently assessing the full effects of the legislation on our effective tax rate and cash tax position, but the changes resulting from the tax provisions in the OBBBA are not expected to have a material impact on our consolidated financial statements.

The tax provisions in the OBBBA did not have a material impact on our consolidated financial statements.

On July 25, 2025, we amended the mortgage loan secured by The Ritz-Carlton Lake Tahoe.

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Additionally, the Company repaid approximately $88.4 million on the mortgage loan that was partially secured by the hotel property.

On August 15, 2025, the Company refinanced its $140.0 million mortgage loan secured by the Four Seasons Scottsdale which had an interest rate of SOFR + 3.75% and a final maturity date in December 2028.

The new non-recourse loan has a balance of $180.0 million and bears interest at a floating rate of SOFR + 3.00%.

The new loan has a three-year initial term with two, one-year extension options, subject to the satisfaction of certain conditions.

On August 25, 2025, Braemar, Ashford Trust, and Ashford Inc.

(collectively, the “Company Group”) entered into a cooperation agreement (the “Agreement”) with Babak “Bob” Ghassemieh and certain related parties of Mr.

Ghassemieh (together with the other signatories other than the Company Group, the “Ghassemieh Group”).

Pursuant to the Agreement, the Company appointed Mr.

Ghassemieh to the Company’s board of directors (the “Board”) and the Ghassemieh Group agreed to withdraw the notice delivered to the Company on June 2, 2025, purporting to nominate director candidates to the Board.

In addition, the Company agreed to nominate Mr.

Ghassemieh or a Replacement Director (as defined below) for election at the Company’s 2025 and 2026 annual stockholder meetings.

The Agreement provides the Ghassemieh Group rights to a replacement director (a “Replacement Director”) selected by the Board from a specified list of individuals in the event that Mr.

Ghassemieh ceases to serve as a director under certain circumstances.

These replacement rights fall away if the Ghassemieh Group ceases to hold the Minimum Ownership Threshold (as defined below).

Additionally, pursuant to the terms of the Agreement, Mr.

Ghassemieh and, if applicable, any Replacement Director, will be required to deliver to the Company an irrevocable resignation letter pursuant to which he or she will resign from the Board and all applicable committees thereof effective immediately if the Ghassemieh Group (i) ceases to hold at least the lesser of 3% of the Company’s then-outstanding common stock and 2,046,583 shares of the Company’s common stock (such lesser amount, the “Minimum Ownership Threshold”) or (ii) if a member of the Ghassemieh Group or certain related parties breach the Agreement or the Company’s policies (subject to cure).

Pursuant to the Agreement, the Ghassemieh Group has agreed to abide by certain standstill restrictions, voting commitments (subject to exceptions for certain extraordinary transactions) and other provisions with respect to the members of the Company Group, including a mutual non-disparagement provision, each of which will remain in effect until the later of (i) the date of the Company’s 2026 Annual Meeting of Stockholders and (ii) the date that is three months after the last day that Mr.

Ghassemieh (or a Replacement Director) is a member of the Board.

On August 26, 2025, Braemar entered into an agreement with Ashford Inc.

to explore a potential sale of Braemar.

Pursuant to the Letter Agreement, Braemar and Ashford Inc.

agreed that the termination fee payable to Ashford Inc.

under the advisory agreement is $574.8 million (exclusive of accrued fees).

However, Braemar and Ashford Inc.

have agreed to the payment of a discounted aggregate amount of $480.0 million plus accrued fees.

received a $17.0 million payment upon execution of the agreement.

The $17.0 million payment will be credited against other amounts due to Ashford Inc.

from Braemar if the sale of the Company does not occur before July 1, 2028.

On November 6, 2025, we sold The Clancy pursuant to an Agreement of Purchase and Sale, entered into effective October 6, 2025, for $115.0 million in cash, subject to customary pro-rations and adjustments.

Additionally, the Company repaid approximately $64.7 million on the mortgage loan that was partially secured by the hotel property.

Key Indicators of Operating Performance

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RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR.

For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in

increased other operating department revenue and expenses.

For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in increased other operating department revenue and expenses.

Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs.

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RESULTS OF OPERATIONS

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

The following table summarizes changes in key line items from our condensed consolidated statements of operations for three months ended June 30, 2025 and 2024 (in thousands except percentages):

Three Months Ended June 30, Favorable (Unfavorable)

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The following table summarizes changes in key line items from our condensed consolidated statements of operations for three months ended September 30, 2025 and 2024 (in thousands except percentages):

Three Months Ended September 30, Favorable (Unfavorable)

2025 2024 $ Change % Change

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Total expenses 154,720 166,279 11,559 7.0

Gain (loss) on disposition of assets and hotel properties

40,970 88,210 (47,240) (53.6)

Operating income (loss) 29,806 70,329 (40,523) 57.6

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Interest income 1,494 2,660 (1,166) (43.8)

Other income (expense) (1,250) — (1,250) (100.0)

Interest expense and amortization of discounts and loan costs (25,188) (27,911) 2,723 9.8

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Net income (loss) attributable to the Company $ 5,742 $ 12,596 $ (6,854) (54.4) %

All hotel properties owned for the three months ended June 30, 2025 and 2024 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 three months ended June 30, 2025 and 2024.

The hotel property listed below is not a comparable hotel property for the periods indicated and all other hotel properties are considered comparable hotel properties.

The following disposition affects reporting comparability related to our condensed consolidated financial statements:

All hotel properties owned for the three months ended September 30, 2025 and 2024 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 three months ended September 30, 2025 and 2024.

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 dispositions affect reporting comparability related to our condensed consolidated financial statements:

Hotel Property Location Type Date

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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 three months ended June 30, 2025 and 2024:

Three Months Ended June 30,

Marriott Seattle Waterfront

Seattle, Washington

August 7, 2025

The following table illustrates the key performance indicators of all hotel properties that were included in our results of operations during the three months ended September 30, 2025 and 2024:

Three Months Ended September 30,

Occupancy 65.24 % 68.50 %

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Total hotel revenue (in thousands) $ 143,556 $ 148,398

The following table illustrates the key performance indicators of the 15 hotel properties that were owned for the full three months ended June 30, 2025 and 2024:

Three Months Ended June 30,

The following table illustrates the key performance indicators of the 14 hotel properties that were owned for the full three months ended September 30, 2025 and 2024:

Three Months Ended September 30,

Occupancy 64.25 % 66.34 %

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Net Income (Loss) Attributable to the Company.

Net loss attributable to the Company decreased $6.1 million, from $11.6 million for the three months ended June 30, 2024 (the “2024 quarter”) to $5.5 million for the three months ended June 30, 2025 (the “2025 quarter”), as a result of the factors discussed below.

Net income attributable to the Company decreased $6.9 million, from $12.6 million for the three months ended September 30, 2024 (the “2024 quarter”) to $5.7 million for the three months ended September 30, 2025 (the “2025 quarter”), as a result of the factors discussed below.

Rooms Revenue .

Rooms revenue decreased $6.4 million, or 5.5%, to $109.8 million during the 2025 quarter compared to the 2024 quarter primarily due to the sale of the Hilton La Jolla Torrey Pines in July 2024.

During the 2025 quarter, our 15 comparable hotel properties experienced a 39 basis point increase in occupancy and a 0.8% increase in room rates.

Rooms revenue decreased $6.7 million, or 7.3%, to $85.7 million during the 2025 quarter compared to the 2024 quarter primarily due to the sales of Marriott Seattle in August 2025 and Hilton La Jolla Torrey Pines in July 2024.

During the 2025 quarter, our 14 comparable hotel properties experienced a 209 basis point decrease in occupancy and a 4.4% increase in room rates.

Fluctuations in rooms revenue between the 2025 quarter and the 2024 quarter are a result of the changes in occupancy and ADR between the 2025 quarter and the 2024 quarter as reflected in the table below (dollars in thousands):

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$ (1,080) (688) (2.8) %

Marriott Seattle Waterfront

93 227 (1.7) %

The Notary Hotel (1,284) (862) (6.0) %

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Hilton La Jolla Torrey Pines (1,374) n/a n/a

Marriott Seattle Waterfront (6,241) 270 7.2 %

(1) This hotel was under renovation during the 2025 quarter.

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Food and Beverage Revenue .

Food and beverage revenue decreased $2.0 million, or 4.2%, to $45.6 million during the 2025 quarter compared to the 2024 quarter.

This decrease is attributable to a decrease of $4.8 million at the Hilton La Jolla Torrey Pines as a result of its sale on July 17, 2024 and a decrease of $2.6 million at Capital Hilton, The Ritz-Carlton St.

Thomas, Park Hyatt Beaver Creek Resort & Spa, Cameo Beverly Hills and The Notary Hotel.

These decreases were partially offset by an aggregate increase of $5.4 million at 10 comparable hotel properties.

Food and beverage revenue increased $1.9 million, or 5.3%, to $36.6 million during the 2025 quarter compared to the 2024 quarter.

This increase is attributable to an aggregate increase of $5.4 million at nine comparable hotel properties, partially offset by a decrease of $2.3 million at The Ritz-Carlton St.

Thomas, The Notary Hotel, Cameo Beverly Hills, Sofitel Chicago Magnificent Mile and Hotel Yountville and a decrease of $1.2 million due to the sales of Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

Other Hotel Revenue .

Other hotel revenue, which consists mainly of condo management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, decreased $115,000, or 0.5%, to $23.7 million during the 2025 quarter compared to the 2024 quarter.

This decrease is attributable to an aggregate decrease in other hotel revenue of $663,000 at Park Hyatt Beaver Creek Resort & Spa, Four Seasons Resort Scottsdale, Cameo Beverly Hills, The Ritz-Carlton St.

Thomas, Sofitel Chicago Magnificent Mile and Hotel Yountville and a decrease of $1.5 million due to the sale of Hilton La Jolla Torrey Pines, partially offset by an aggregate increase of $2.0 million at nine comparable hotel properties.

Other hotel revenue, which consists mainly of condo management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, increased $28,000, or 0.1%, to $21.2 million during the 2025 quarter compared to the 2024 quarter.

This increase is attributable to an aggregate increase of $1.9 million at seven comparable hotel properties, partially offset by a decrease of $959,000 due to the sales of Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines and a decrease of $868,000 at Four Seasons Resort Scottsdale, Cameo Beverly Hills, Park Hyatt Beaver Creek Resort & Spa, The Ritz-Carlton St.

Thomas, The Clancy, Hotel Yountville and The Ritz-Carlton Reserve Dorado Beach.

Rooms Expense .

Rooms expense decreased $820,000, or 3.2%, to $24.7 million in the 2025 quarter compared to the 2024 quarter.

This decrease is primarily attributable to an aggregate decrease of $306,000 at six comparable hotel properties and a decrease of $1.5 million due to the sale of Hilton La Jolla Torrey Pines, partially offset by an aggregate increase of $1.6 million at The Ritz-Carlton Reserve Dorado Beach, Four Seasons Resort Scottsdale, The Clancy, The Ritz-Carlton Lake Tahoe, Marriott Seattle Waterfront, The Ritz-Carlton Sarasota, Capital Hilton and The Notary Hotel.

This decrease is primarily attributable to an aggregate decrease of $1.4 million due to the sales of Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines and an aggregate decrease of $789,000 at five comparable hotel properties.

These decreases are partially offset by an aggregate increase of $1.4 million at The Ritz-Carlton Reserve Dorado Beach, The Clancy, The Ritz-Carlton Lake Tahoe, Four Seasons Resort Scottsdale, The Ritz-Carlton Sarasota, Capital Hilton, Bardessono Hotel and Spa, Hotel Yountville and Cameo Beverly Hills.

Food and Beverage Expense .

Food and beverage expense decreased $897,000, or 2.4%, to $35.8 million during the 2025 quarter compared to the 2024 quarter.

This decrease is attributable to an aggregate decrease of $678,000 at six comparable hotel properties and a decrease of $2.4 million due to the sale of Hilton La Jolla Torrey Pines, partially offset by an aggregate increase of $2.2 million at The Ritz-Carlton Lake Tahoe, Four Seasons Resort Scottsdale, The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton Sarasota, Marriott Seattle Waterfront, Pier House Resort & Spa, The Notary Hotel, The Clancy and Capital Hilton.

Food and beverage expense decreased $1.3 million, or 4.1%, to $30.7 million during the 2025 quarter compared to the 2024 quarter.

This decrease is attributable to an aggregate decrease of $2.1 million at five comparable hotel properties and a decrease of $1.1 million from the two disposed hotel properties, partially offset by an aggregate increase of $1.9 million at The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Capital Hilton, Park Hyatt Beaver Creek Resort & Spa, Hotel Yountville, The Notary Hotel, Pier House Resort & Spa and Sofitel Chicago Magnificent Mile.

Other Operating Expenses .

Other operating expenses decreased $1.7 million, or 2.9%, to $56.4 million in the 2025 quarter compared to the 2024 quarter.

Other operating expenses increased $466,000, or 0.9%, to $51.8 million in the 2025 quarter compared to the 2024 quarter.

Hotel 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 $240,000 in direct expenses and a decrease of $2.0 million in indirect expenses and incentive management fees in the 2025 quarter as compared to the 2024 quarter.

We experienced an increase of $493,000 in indirect expenses and incentive management fees and a decrease of $27,000 in direct expenses in the 2025 quarter as compared to the 2024 quarter.

Direct expenses were 5.0% of total hotel revenue in the 2025 quarter and 4.9% in the 2024 quarter.

The increase in direct expenses is associated with higher direct expenses of approximately $587,000 at nine comparable hotel properties, partially offset by lower direct expenses of $212,000 due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of approximately $135,000 at Park Hyatt Beaver Creek Resort & Spa, The Clancy, Bardessono Hotel and Spa, Sofitel Chicago Magnificent Mile, Capital Hilton and Hotel Yountville.

The decrease in indirect expenses comprises decreases in:

(i) incentive management fees of $1.1 million comprising an aggregate decrease of $1.0 million at our 15 comparable hotel properties and a decrease of $132,000 at the one disposed hotel property;

(ii) lease expense of $926,000 comprising a decrease of $1.0 million at the one disposed hotel property partially offset by an aggregate increase of $87,000 at our 15 comparable hotel properties;

(iii) general and administrative costs of $101,000 comprising a decrease of $936,000 at the one disposed hotel property partially offset by an aggregate increase of $835,000 at our 15 comparable hotel properties;

and (iv) marketing costs of $67,000 comprising a decrease of $975,000 at the one disposed hotel property partially offset by an aggregate increase of $908,000 at our 15 comparable hotel properties.

These decreases were partially offset by increases in:

(i) repairs and maintenance of $170,000 comprising an aggregate increase of $505,000 at our 15 comparable hotel properties partially offset by a decrease of $335,000 at the one disposed hotel property;

and (ii) energy costs of $112,000 comprising an aggregate increase of $552,000 at our 15 comparable hotel properties, partially offset by a decrease of $440,000 at the one disposed hotel property.

The increase in indirect expenses comprises increases in:

(i) general and administrative costs of $1.2 million comprising an aggregate increase of $2.0 million at our 14 comparable hotel properties partially offset by a decrease of $778,000 from the two disposed hotel properties;

(ii) repairs and maintenance of $314,000 comprising an aggregate increase of $622,000 at our 14 comparable hotel properties partially offset by a decrease of $308,000 from the two disposed hotel properties;

and (iii) energy costs of $55,000 comprising an aggregate increase of $297,000 at our 14 comparable hotel properties, partially offset by a decrease of $242,000 from the two disposed hotel properties.

These increases were partially offset by decreases in:

(i) marketing costs of $502,000 comprising a decrease of $786,000 from the two disposed hotel properties partially offset by an aggregate increase of $284,000 at our 14 comparable hotel properties;

(ii) incentive management fees of $406,000 comprising an aggregate decrease of $46,000 at our 14 comparable hotel properties and a decrease of $360,000 from the two disposed hotel properties;

and (iii) lease expense of $176,000 comprising a decrease of $176,000 from the two disposed hotel properties.

The decrease in direct expenses is associated with lower direct expenses of approximately $292,000 at six comparable hotel properties and a decrease of $92,000 from the two disposed hotel properties.

These decreases were partially offset by an aggregate increase of approximately $357,000 at The Ritz-Carlton Lake Tahoe, Four Seasons Resort Scottsdale, The Ritz-Carlton Sarasota, Sofitel Chicago Magnificent Mile, The Notary Hotel, Bardessono Hotel and Spa, The Ritz-Carlton Reserve Dorado Beach and Cameo Beverly Hills.

Management Fees .

Base management fees decreased $429,000, or 8.8%, to $4.4 million in the 2025 quarter compared to the 2024 quarter.

Base management fees decreased by $382,000 at seven comparable hotel properties and by $424,000 at the one disposed hotel property.

These decreases were partially offset by an aggregate increase of $279,000 at Sofitel Chicago Magnificent Mile, The Notary Hotel, The Clancy, Marriott Seattle Waterfront, Pier House Resort & Spa, The Ritz-Carlton Lake Tahoe, The Ritz-Carlton Reserve Dorado Beach and Four Seasons Resort Scottsdale.

Base management fees decreased by $389,000 at eight comparable hotel properties and $294,000 from the two disposed hotel properties.

These decreases were partially offset by an aggregate increase of $254,000 at The Clancy, The Ritz-Carlton Reserve Dorado Beach, Four Seasons Resort Scottsdale, The Ritz-Carlton Lake Tahoe, Pier House Resort & Spa and Hotel Yountville.

Property Taxes, Insurance and Other .

Property taxes, insurance and other decreased $1.8 million, or 17.8%, to $8.2 million in the 2025 quarter compared to the 2024 quarter.

The decrease is primarily attributable to an aggregate decrease of approximately $1.7 million at ten comparable hotel properties and a decrease of $766,000 at the one disposed hotel property.

These decreases were partially offset by an aggregate increase of approximately $261,000 at the Capital Hilton, Bardessono Hotel and Spa, Cameo Beverly Hills, Four Seasons Resort Scottsdale and The Notary Hotel.

The decrease is primarily attributable to an aggregate decrease of approximately $316,000 at nine comparable hotel properties and a decrease of $1.9 million from the two disposed hotel properties.

These decreases were partially offset by an aggregate increase of approximately $383,000 at the Sofitel Chicago Magnificent Mile, The Clancy, Pier House Resort & Spa, The Ritz-Carlton Sarasota and The Notary Hotel.

Depreciation and Amortization .

Depreciation and amortization decreased $1.9 million, or 7.6%, to $23.2 million in the 2025 quarter compared to the 2024 quarter.

There was an aggregate decrease of $2.2 million at seven comparable hotel properties and a decrease of $1.1 million at the one disposed hotel property, partially offset by an aggregate increase of $1.9 million at The Ritz-Carlton Lake Tahoe, Park Hyatt Beaver Creek Resort & Spa, Ritz Dorado Beach, Cameo Beverly Hills, Four Seasons Resort Scottsdale, Hotel Yountville, The Ritz-Carlton Sarasota and Bardessono Hotel and Spa.

There was an aggregate decrease of $2.1 million at six comparable hotel properties and a decrease of $2.1 million from the two disposed hotel properties, partially offset by an aggregate increase of $2.3 million at Park Hyatt Beaver Creek Resort & Spa, The Ritz-Carlton Sarasota, Cameo Beverly Hills, The Ritz-Carlton Lake Tahoe, The Ritz-Carlton Reserve Dorado Beach, Hotel Yountville, Four Seasons Resort Scottsdale and Bardessono Hotel and Spa.

Advisory Services Fee.

Advisory services fee decreased $637,000, or 8.1%, to $7.2 million in the 2025 quarter compared to the 2024 quarter due to decreases of $934,000 in equity-based compensation and $460,000 in the incentive fee, partially offset by increases of $616,000 in reimbursable expenses and $141,000 in the base advisory fee.

In the 2025 quarter, we recorded an advisory services fee of $7.2 million, which included reimbursable expenses of $3.6 million, a base advisory fee of $3.5 million, incentive fee of $188,000 and a credit to expense of $51,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

In the 2024 quarter, we recorded an advisory services fee of $7.8 million, which included a base advisory fee of $3.3 million, reimbursable expenses of $3.0 million, equity-based compensation of $883,000 and an incentive fee of $648,000.

Advisory services fee decreased $712,000, or 8.3%, to $7.9 million in the 2025 quarter compared to the 2024 quarter due to decreases of $988,000 in the incentive fee and $352,000 in equity-based compensation, partially offset by increases of $594,000 in reimbursable expenses and $34,000 in the base advisory fee.

In the 2025 quarter, we recorded an advisory services fee of $7.9 million, which included a base advisory fee of $3.5 million, reimbursable expenses of $3.8 million, incentive fee of $476,000 and $75,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

In the 2024 quarter, we recorded an advisory services fee of $8.6 million, which included a base advisory fee of $3.5 million, reimbursable expenses of $3.2 million, incentive fee of $1.5 million, and equity-based compensation of $427,000.

Corporate General and Administrative .

Corporate general and administrative was a credit to expense of $2.3 million in the 2025 quarter as compared to expense of $4.5 million in the 2024 quarter.

The decrease in corporate general and administrative expense is primarily due to a $5.0 million insurance recovery for prior legal expenses, a decrease in professional fees of $1.9 million and miscellaneous expenses of $251,000, partially offset by an increase in public company costs of $375,000.

Corporate general and administrative expense was $3.8 million in the 2025 quarter and consisted of $3.5 million in professional fees, $632,000 of public company costs, and $93,000 of miscellaneous expenses.

These expenses were partially offset by an expense reduction of $400,000 from an insurance recovery for prior legal expenses.

Corporate general and administrative expense was $8.9 million in the 2024 quarter and consisted of $1.6 million in professional fees, $6.0 million of reimbursed legal costs, $723,000 in miscellaneous expenses and $564,000 in public company costs.

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

In the 2025 quarter, we recorded a gain of approximately $41.0 million related to the sale of Seattle Marriott Waterfront.

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

Equity in Earnings (Loss) of Unconsolidated Entity .

In the 2025 quarter and 2024 quarter, we recorded equity in loss of unconsolidated entity of $0 and $85,000, respectively, related to our investment in OpenKey.

Other Income (Expense).

Other expense was $1.3 million in the 2025 quarter due to a realized loss on the sale of a portion of CMBS.

There was no equity in earnings (loss) of unconsolidated entity in the 2025 quarter as a result of impairing the OpenKey investment in the fourth quarter of 2024.

In the 2024 quarter we recorded equity in loss of unconsolidated entity of $80,000 related to our investment in OpenKey.

Interest Income .

Interest income was $1.5 million and $2.7 million in the 2025 quarter and 2024 quarter, respectively.

The increase in interest income in the 2025 quarter was primarily attributable to higher cash balances in the 2025 quarter compared to the 2024 quarter as well as interest income associated with a tranche of CMBS included in investment in securities.

The decrease in interest income in the 2025 quarter was primarily attributable to lower interest income associated with a tranche of CMBS included in investment in securities and lower cash balances in the 2025 quarter compared to the 2024 quarter.

Interest Expense and Amortization of Loan Costs .

Interest expense and amortization of loan costs decreased $2.7 million, or 9.8%, to $25.2 million in the 2025 quarter compared to the 2024 quarter.

This decrease is primarily due to lower interest expense from lower average interest rates.

This decrease is primarily due to lower interest expense from lower average interest rates and lower loan balances partially offset by higher amortization costs.

The average SOFR rates for the 2025 quarter and the 2024 quarter were 4.35% and 5.17%, respectively.

Write-off of Loan Costs and Exit Fees.

Write-off of loan costs and exit fees was $3,000 in the 2025 quarter.

Write-off of loan costs and exit fees was $82,000 in the 2024 quarter, primarily related to various loan modifications.

Write-off of loan costs and exit fees was $366,000 in the 2025 quarter primarily due to the Scottsdale loan modification.

Write-off of loan costs and exit fees was $5.3 million in the 2024 quarter, primarily related to various loan modifications.

Gain (loss) on Extinguishment of Debt.

In 2024 quarter, 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.

In the 2025 quarter, we recognized a loss of $1.6 million from the write-off of deferred loan costs resulting from the paydown on the mortgage loan partially secured by the Marriott Seattle Waterfront in conjunction with the sale of the property.

There was no such gain (loss) recognized in the 2024 quarter.

Realized and Unrealized Gain (Loss) on Derivatives .

Realized and unrealized gain on derivatives of $15,000 for the 2025 quarter consisted of a realized gain of $180,000 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 $165,000.

Realized and unrealized gain on derivatives of $326,000 for 2024 quarter consisted of a realized gain of $1.5 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 $1.2 million.

Realized and unrealized loss on derivatives of $118,000 for the 2025 quarter consisted of an unrealized loss on interest rate caps of approximately $299,000, partially offset by a realized gain of $181,000 associated with payments received from counterparties on in-the-money interest rate caps.

Realized and unrealized loss on derivatives of $735,000 for the 2024 quarter consisted of an unrealized loss on interest rate caps of approximately $1.7 million, partially offset by a realized gain of $1.0 million associated with payments received from counterparties on in-the-money interest rate caps.

Income Tax (Expense) Benefit .

Income tax benefit increased $231,000, from $114,000 in the 2024 quarter to $345,000 in the 2025 quarter.

This increase was primarily due to a decrease in the taxable income of certain of our TRS entities in the 2025 quarter compared to the 2024 quarter.

Income tax benefit decreased $216,000, from $864,000 in the 2024 quarter to $648,000 in the 2025 quarter.

This decrease was primarily due to a decrease in the taxable loss of certain of our TRS entities in the 2025 quarter compared to the 2024 quarter.

(Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities.

Our noncontrolling interest partners in consolidated entities were allocated income of $115,000 and loss of $303,000 in the 2025 quarter and the 2024 quarter, respectively.

At June 30, 2025, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity and a 25% ownership interest in a JV.

At June 30, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity.

Our noncontrolling interest partners in consolidated entities were allocated a loss of $412,000 and income of $27.4 million in the 2025 quarter and the 2024 quarter, respectively.

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

At September 30, 2025, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity and a 25% ownership interest in a JV.

At September 30, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property 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 $1.5 million and $1.9 million in the 2025 quarter and the 2024 quarter, respectively.

Redeemable noncontrolling interests in Braemar OP represented ownership interests of 8.51% and 8.02% as of June 30, 2025 and 2024, respectively.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The following table summarizes changes in key line items from our condensed consolidated statements of operations for the six months ended June 30, 2025 and 2024 (in thousands except percentages):

Six Months Ended June 30, Favorable (Unfavorable)

Noncontrolling interests in operating partnership were allocated a net loss of $607,000 and $124,000 in the 2025 quarter and the 2024 quarter, respectively.

Redeemable noncontrolling interests in Braemar OP represented ownership interests of 6.91% and 8.05% as of September 30, 2025 and 2024, respectively.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The following table summarizes changes in key line items from our condensed consolidated statements of operations for the nine months ended September 30, 2025 and 2024 (in thousands except percentages):

Nine Months Ended September 30, Favorable (Unfavorable)

2025 2024 $ Change % Change

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Total expenses 494,983 518,303 23,320 4.5

Gain (loss) on disposition of assets and hotel properties

40,970 88,210 (47,240) (53.6)

Operating income (loss) 84,440 124,971 (40,531) (32.4)

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Net income (loss) attributable to the Company $ 11,273 $ 16,960 $ (5,687) (33.5) %

All hotel properties owned for the six months ended June 30, 2025 and 2024 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 six months ended June 30, 2025 and 2024.

All hotel properties owned for the nine months ended September 30, 2025 and 2024 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 nine months ended September 30, 2025 and 2024.

The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties.

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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 six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

Marriott Seattle Waterfront

Seattle, Washington

August 7, 2025

The following table illustrates the key performance indicators of all hotel properties that were included in our results of operations during the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

Occupancy 67.26 % 68.91 %

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Total hotel revenue (in thousands) $ 538,453 $ 555,064

The following table illustrates the key performance indicators of the 15 comparable hotel properties that were owned for the full six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

The following table illustrates the key performance indicators of the 14 comparable hotel properties that were owned for the full nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

Occupancy 66.61 % 67.41 %

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Net Income (Loss) Attributable to the Company.

Net income attributable to the Company decreased $1.2 million from $4.4 million for the six months ended June 30, 2024 (the “2024 period”) to $5.5 million for the six months ended June 30, 2025 (the “2025 period”), as a result of the factors discussed below.

Net income attributable to the Company decreased $5.7 million from $17.0 million for the nine months ended September 30, 2024 (the “2024 period”) to $11.3 million for the nine months ended September 30, 2025 (the “2025 period”), as a result of the factors discussed below.

Rooms Revenue .

Rooms revenue decreased $8.9 million to $245.9 million during the 2025 period compared to the 2024 period primarily due to the sale of the Hilton La Jolla Torrey Pines in July 2024.

During the 2025 period, our 15 comparable hotel properties experienced a 2.6% increase in room rates and a ten basis point increase in occupancy compared to the 2024 period.

Rooms revenue decreased $15.6 million to $331.6 million during the 2025 period compared to the 2024 period primarily due to the sales of Marriott Seattle Waterfront in August 2025 and Hilton La Jolla Torrey Pines in July 2024.

During the 2025 period, our 14 comparable hotel properties experienced a 3.5% increase in room rates and an 80 basis point decrease in occupancy compared to the 2024 period.

Fluctuations in rooms revenue between the 2025 period and the 2024 period are a result of the changes in occupancy and ADR between the 2025 period and the 2024 period as reflected in the table below (dollars in thousands):

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$ (100) (424) 5.5 %

Marriott Seattle Waterfront

215 227 (1.0) %

The Notary Hotel (387) (104) — %

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Hilton La Jolla Torrey Pines $ (15,501) n/a n/a

Marriott Seattle Waterfront (6,026) (31) (4.9) %

(1) This hotel was under renovation during the 2025 period.

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Food and beverage revenue decreased $1.9 million, or 1.4%, to $134.0 million during the 2025 period compared to the 2024 period.

We experienced an aggregate decrease in food and beverage revenue of $3.5 million at six comparable hotel properties and a decrease of $8.9 million due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $8.6 million at The Ritz-Carlton Lake Tahoe, Four Seasons Resort Scottsdale, The Ritz-Carlton Sarasota, The Ritz-Carlton Reserve Dorado Beach, The Notary Hotel, Marriott Seattle Waterfront, Pier House Resort & Spa, Bardessono Hotel and Spa and Hotel Yountville.

We experienced an aggregate decrease in food and beverage revenue of $4.0 million at six comparable hotel properties and a decrease of $9.7 million due to the sales of Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $11.8 million at The Ritz-Carlton Lake Tahoe, Four Seasons Resort Scottsdale, The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton Sarasota, Pier House Resort & Spa, Bardessono Hotel and Spa, The Notary Hotel and Hotel Yountville.

Other Hotel Revenue .

Other hotel revenue, which consists mainly of condominium management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, increased $873,000, or 1.2%, to $72.8 million during the 2025 period compared to the 2024 period.

This increase is attributable to higher other hotel revenue of $4.5 million at ten comparable hotel properties.

These increases were partially offset by a decrease of $2.9 million due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of approximately $751,000 at Park Hyatt Beaver Creek Resort & Spa, The Ritz-Carlton St.

Thomas, Hotel Yountville, The Clancy and Sofitel Chicago Magnificent Mile.

This increase is attributable to higher other hotel revenue of $5.8 million at eight comparable hotel properties.

These increases were partially offset by a decrease of $3.4 million due to the sales of Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines and an aggregate decrease of approximately $1.4 million at Park Hyatt Beaver Creek Resort & Spa, The Ritz-Carlton St.

Thomas, Four Seasons Resort Scottsdale, Cameo Beverly Hills, Hotel Yountville and The Clancy.

Rooms Expense .

Rooms expense decreased $236,000, or 0.4%, to $55.5 million in the 2025 period compared to the 2024 period.

This decrease is attributable to an aggregate decrease in rooms expense of $266,000 at Sofitel Chicago Magnificent Mile, Hotel Yountville and Pier House Resort & Spa, and a decrease of $2.8 million due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of $2.8 million at 12 comparable hotel properties.

Rooms expense decreased $1.1 million, or 1.3%, to $80.2 million in the 2025 period compared to the 2024 period.

This decrease is attributable to an aggregate decrease in rooms expense of $845,000 at Sofitel Chicago Magnificent Mile, Park Hyatt Beaver Creek Resort & Spa, Pier House Resort & Spa and The Notary Hotel, and a decrease of $4.0 million due to the sales of Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of $3.8 million at ten comparable hotel properties.

Food and Beverage Expense .

Food and beverage expense decreased $2.7 million, or 2.5%, to $106.7 million during the 2025 period compared to the 2024 period.

This decrease is attributable to lower aggregate food and beverage expense of approximately $709,000 at The Ritz-Carlton St.

Thomas, Cameo Beverly Hills, Park Hyatt Beaver Creek Resort & Spa, Hotel Yountville and Sofitel Chicago Magnificent Mile and a decrease of $4.6 million due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $3.9 million at ten comparable hotel properties.

This decrease is attributable to lower aggregate food and beverage expense of approximately $2.0 million at The Ritz-Carlton St.

Thomas, Four Seasons Resort Scottsdale, Cameo Beverly Hills, Sofitel Chicago Magnificent Mile and Hotel Yountville and a decrease of $5.3 million due to the sales of Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $4.7 million at nine comparable hotel properties.

Other Operating Expenses .

Other operating expenses decreased $1.4 million, or 1.2%, to $116.8 million in the 2025 period compared to the 2024 period.

Other operating expenses decreased $944,000, or 0.6%, to $168.6 million in the 2025 period compared to the 2024 period.

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 a decrease of $71,000 in direct expenses and a decrease of $1.3 million in indirect expenses and incentive management fees in the 2025 period compared to the 2024 period.

We experienced a decrease of $98,000 in direct expenses and a decrease of $846,000 in indirect expenses and incentive management fees in the 2025 period compared to the 2024 period.

Direct expenses were 4.6% of total hotel revenue in the 2025 period and 4.5% in the 2024 period.

The decrease in direct expenses is associated with lower direct expenses of approximately $304,000 at eight comparable hotel properties and a decrease of $429,000 due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by higher direct expenses of $662,000 at The Ritz-Carlton Sarasota, Four Seasons Resort Scottsdale, The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton St.

Thomas, The Notary Hotel, Marriott Seattle Waterfront and Cameo Beverly Hills.

The decrease in direct expenses is associated with lower direct expenses of approximately $494,000 at seven comparable hotel properties and a decrease of $500,000 due to the sales of Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

These decreases were partially offset by higher direct expenses of $896,000 at The Ritz-Carlton Sarasota, Four Seasons Resort Scottsdale, The Ritz-Carlton Lake Tahoe, The Notary Hotel, The Ritz-Carlton Reserve Dorado Beach, Sofitel Chicago Magnificent Mile and Cameo Beverly Hills.

The decrease in indirect expenses is comprised of decreases in:

(i) lease expense of $1.6 million comprising of a decrease of $1.7 million at the one disposed hotel property partially offset by an aggregate increase of $135,000 at our 15 comparable hotel properties;

(ii) incentive management fees of $761,000 including $629,000 at our 15 comparable hotel properties and $132,000 at the one disposed hotel property;

and (iii) marketing costs of $275,000 comprising an aggregate decrease of $1.9 million at the one disposed hotel property partially offset by an increase of $1.6 million at our 15 comparable hotel properties.

(i) lease expense of $1.7 million comprising of a decrease of $1.9 million from the two disposed hotel properties partially offset by an aggregate increase of $135,000 at our 14 comparable hotel properties;

(ii) incentive management fees of $1.2 million including $691,000 at our 14 comparable hotel properties and $477,000 from the two disposed hotel properties;

and (iii) marketing costs of $776,000 comprising an aggregate decrease of $2.7 million from the two disposed hotel properties partially offset by an increase of $1.9 million at our 14 comparable hotel properties.

These decreases were partially offset by increases in:

(i) general and administrative costs of $928,000 comprising an aggregate increase of $2.6 million at our 15 comparable hotel properties partially offset by a decrease of $1.7 million at the one disposed hotel property;

(ii) repairs and maintenance of $318,000 comprising an aggregate increase of $936,000 at our 15 comparable hotel properties partially offset by a decrease of $618,000 at the disposed hotel property;

and (iii) energy costs of $6,000 comprising an aggregate increase of $906,000 at our 15 comparable hotel properties partially offset by a decrease of $900,000 at the one disposed hotel property.

(i) general and administrative costs of $2.1 million comprising an aggregate increase of $4.7 million at our 14 comparable hotel properties partially offset by a decrease of $2.5 million from the two disposed hotel properties;

(ii) repairs and maintenance of $633,000 comprising an aggregate increase of $1.5 million at our 14 comparable hotel properties partially offset by a decrease of $827,000 from the two disposed hotel properties;

and (iii) energy costs of $62,000 comprising an aggregate increase of $1.2 million at our 14 comparable hotel properties partially offset by a decrease of $1.1 million from the two disposed hotel properties.

Management Fees .

Base management fees decreased $593,000, or 4.5%, to $12.5 million in the 2025 period compared to the 2024 period.

Management fees decreased $315,000 at six comparable hotel properties and $777,000 due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of $499,000 at The Ritz-Carlton Reserve Dorado Beach, Four Seasons Resort Scottsdale, The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Pier House Resort & Spa, Capital Hilton, Bardessono Hotel and Spa and The Ritz-Carlton Lake Tahoe.

Base management fees decreased $1.0 million, or 5.7%, to $16.9 million in the 2025 period compared to the 2024 period.

Management fees decreased $654,000 at six comparable hotel properties and $1.0 million due to the sales of Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of $674,000 at The Ritz-Carlton Reserve Dorado Beach, The Clancy, Four Seasons Resort Scottsdale, The Ritz-Carlton Lake Tahoe, The Notary Hotel, Pier House Resort & Spa, Hotel Yountville and Capital Hilton.

Property Taxes, Insurance and Other .

Property taxes, insurance and other decreased $4.2 million, or 13.6%, to $26.6 million in the 2025 period compared to the 2024 period.

This decrease is primarily attributable to a decrease of $1.6 million due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of $1.5 million at nine comparable hotel properties.

These decreases were partially offset by an aggregate increase of approximately $680,000 at six comparable hotel properties.

This decrease is primarily attributable to a decrease of $3.6 million due to the sales of Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines and an aggregate decrease of $1.1 million at nine comparable hotel properties.

These decreases were partially offset by an aggregate increase of approximately $478,000 at Park Hyatt Beaver Creek Resort & Spa, Capital Hilton, Bardessono Hotel and Spa, Four Seasons Resort Scottsdale and The Notary Hotel.

Depreciation and Amortization .

Depreciation and amortization decreased $5.3 million, or 7.0%, to $69.9 million for the 2025 period compared to the 2024 period.

This decrease is comprised of a decrease of $2.1 million due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of $5.3 million at The Ritz-Carlton St.

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

This decrease is comprised of a decrease of $4.3 million due to the sales of Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines and an aggregate decrease of $7.3 million at The Ritz-Carlton St.

Thomas, Capital Hilton, The Clancy, The Notary Hotel, Bardessono Hotel and Spa and Sofitel Chicago Magnificent Mile.

These decreases were partially offset by an aggregate increase of $6.3 million at eight comparable hotel properties.

Advisory Services Fee.

Advisory services fee decreased $726,000, or 5.0%, to $13.8 million in the 2025 period compared to the 2024 period due to lower equity-based compensation of $2.1 million and a lower incentive fee of $378,000, partially offset by higher reimbursable expenses of $1.4 million and a higher base advisory fee of $390,000.

Advisory services fee decreased $1.4 million, or 6.2%, to $21.7 million in the 2025 period compared to the 2024 period due to lower equity-based compensation of $2.4 million and a lower incentive fee of $1.4 million, partially offset by higher reimbursable expenses of $1.9 million and a higher base advisory fee of $424,000.

In the 2025 period, we recorded an advisory services fee of $21.7 million, which included a base advisory fee of $10.6 million, reimbursable expenses of $10.4 million, an incentive fee of $746,000 and a credit to expense of $24,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

In the 2024 period, we recorded an advisory services fee of $23.2 million, which included a base advisory fee of $10.2 million, reimbursable expenses of $8.5 million, $2.4 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 $648,000.

and an incentive fee of $2.1 million.

Corporate General and Administrative .

Corporate general and administrative expense was $596,000 in the 2025 period and consisted of $3.1 million in professional fees, $1.6 million of public company costs and $839,000 in miscellaneous expenses.

Corporate general and administrative expense was $4.4 million in the 2025 period and consisted of $6.6 million in professional fees, $2.2 million of public company costs and $931,000 in miscellaneous expenses.

These expenses were partially offset by an expense reduction of $5.4 million from an insurance recovery for prior legal expenses.

Corporate general and administrative expense was $2.2 million in the 2024 period and consisted of $6.2 million in professional fees, $1.1 million in public company costs, and $602,000 in miscellaneous expenses.

Corporate general and administrative expense was $11.1 million in the 2024 period and consisted of $7.8 million in professional fees, $6.0 million of reimbursed legal costs, $1.6 million in public company costs, and $1.3 million in miscellaneous expenses.

Additionally, during the 2024 period there was a revision to the estimated contribution amount associated with the Fourth Amended and Restated Contribution Agreement with Ashford Securities that resulted in a $5.6 million reduction to expense.

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

In the 2025 period, we recorded a gain of approximately $41.0 million primarily related to the sale of Seattle Marriott Waterfront.

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

Equity in Earnings (Loss) of Unconsolidated Entity .

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Write-off of loan costs and exit fees was $1.8 million in the 2025 period related to various loan refinances and modifications.

Write-off of loan costs and exit fees was $803,000 in the 2024 period related to various loan modifications.

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

Gain (loss) on Extinguishment of Debt.

In the 2025 period, we recognized a loss of $1.6 million from the write-off of deferred loan costs resulting from the paydown on the mortgage loan partially secured by the Marriott Seattle Waterfront in conjunction with the sale of the property.

In the 2024 period 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.

Realized and Unrealized Gain (Loss) on Derivatives .

Realized and unrealized loss on derivatives of $301,000 for the 2025 period consisted of an unrealized loss on interest rate caps of $850,000, partially offset by a realized gain of $549,000 associated with payments received from counterparties on in-the-money interest rate caps.

Realized and unrealized gain on derivatives of $1.3 million for the 2024 period primarily consisted of an unrealized gain on warrants of $12,000 and a realized gain of $3.2 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 $2.0 million.

Realized and unrealized gain on derivatives of $523,000 for the 2024 period primarily consisted of an unrealized gain on warrants of $12,000 and a realized gain of $4.2 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 $3.7 million.

Income Tax (Expense) Benefit .

Income tax expense decreased $216,000, from $1.3 million in the 2024 period to $1.1 million in the 2025 period.

This decrease was primarily due to a decrease in the taxable income of certain of our TRS entities in the 2025 period compared to the 2024 period.

Income tax expense was $474,000 in both the 2025 period and the 2024 period.

(Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities .

Our noncontrolling interest partners in consolidated entities were allocated income of $51,000 and a loss $1.0 million in the 2025 period and the 2024 period, respectively.

As of June 30, 2025, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity and a 25% ownership interest in a JV.

As of June 30, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity.

Our noncontrolling interest partners in consolidated entities were allocated a loss of $361,000 and income of $26.3 million in the 2025 period and the 2024 period, respectively.

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

As of September 30, 2025, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity and a 25% ownership interest in a JV.

As of September 30, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property 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 $2.4 million in the 2025 period and $1.7 million in the 2024 period.

Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 8.51% and 8.02% as of June 30, 2025 and 2024, respectively.

Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 6.91% and 8.05% as of September 30, 2025 and 2024, respectively.

LIQUIDITY AND CAPITAL RESOURCES

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However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity and market perceptions about us.

The success of our business strategy will depend, in part, on our ability to access these various capital sources.

The success of our business strategy will

depend, in part, on our ability to access these various capital sources.

While management cannot provide any assurances, management believes that our cash flow from operations, our existing cash balances and investment in securities will be adequate to meet upcoming anticipated requirements for interest and principal payments on debt (excluding any potential final maturity principal payments and paydowns for extension tests), working capital, and capital expenditures for the next 12 months and dividends required to maintain our status as a REIT for U.S.

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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 June 30, 2025, 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 June 30, 2025 was $0.

As of June 30, 2025, the Company held cash and cash equivalents of $80.2 million and restricted cash of $55.5 million, the vast majority of which is comprised of lender and manager-held reserves.

As of June 30, 2025, $24.2 million was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs.

As of June 30, 2025, our net debt to gross assets was 44.2%.

As of September 30, 2025, 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 September 30, 2025 was $0.

As of September 30, 2025, the Company held cash and cash equivalents of $116.3 million and restricted cash of $47.7 million, the vast majority of which is comprised of lender and manager-held reserves.

As of September 30, 2025, $23.1 million was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs.

As of September 30, 2025, our net debt to gross assets was 43.2%.

The Company’s cash and cash equivalents are primarily comprised of corporate cash invested in short-term U.S.

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The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale.

As of August 6, 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.

As of November 5, 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.

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

As of August 6, 2025, the Company has not repurchased any common stock pursuant to the plan.

As of November 5, 2025, the Company has not repurchased any common stock pursuant to the plan.

Debt Transactions

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Additionally, the Company repaid approximately $88.4 million on the mortgage loan that was partially secured by the hotel property.

The new non-recourse loan has a balance of $180.0 million and bears interest at a floating rate of SOFR + 3.00%.

The new loan has a three-year initial term with two, one-year extension options, subject to the satisfaction of certain conditions.

Additionally, the Company repaid approximately $64.7 million on the mortgage loan that was partially secured by the hotel property.

Sources and Uses of Cash

We had approximately $80.2 million and $135.5 million of cash and cash equivalents at June 30, 2025 and December 31, 2024, respectively.

We had approximately $116.3 million and $135.5 million of cash and cash equivalents at September 30, 2025 and December 31, 2024, respectively.

We anticipate that our principal sources of funds to meet our cash requirements will include cash on hand, positive cash flow from operations and capital market activities.

Net Cash Flows Provided by (Used in) Operating Activities.

Net cash flows provided by operating activities were $38.2 million and $60.2 million for the six months ended June 30, 2025 and 2024, respectively.

Cash flows from operations were impacted by changes in hotel operations and the disposition of a hotel property in the third quarter of 2024.

Net cash flows provided by operating activities were $32.4 million and $60.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Cash flows from operations

were impacted by changes in hotel operations and the disposition of hotel properties.

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 related parties and settling with hotel managers.

Net Cash Flows Provided by (Used in) Investing Activities .

For the six months ended June 30, 2025, net cash flows used in investing activities were $11.7 million.

The cash outflows were primarily attributable to $33.0 million of capital improvements made to various hotel properties and acquisition of land of $5.5 million, partially offset by cash inflows of $23.8 million from sale of investment in securities and $3.1 million from property insurance proceeds.

For the nine months ended September 30, 2025, net cash flows provided by investing activities were $106.5 million.

The cash inflows were attributable to $139.3 million from the sale of Seattle Marriott Waterfront, $23.8 million of proceeds from the sale of investment in securities and $3.5 million from property insurance proceeds.

These cash inflows were partially offset by cash outflows of $54.6 million of capital improvements made to various hotel properties and the acquisition of land of $5.5 million.

Our capital improvements consisted of approximately $38.5 million of return on investment capital projects and approximately $16.1 million of renewal and replacement capital projects.

For the six months ended June 30, 2024, net cash flows used in investing activities were $38.7 million.

These cash outflows were primarily attributable to $39.2 million of capital improvements made to various hotel properties partially offset by cash inflows of $542,000 related to proceeds from property insurance.

For the nine months ended September 30, 2024, net cash flows provided by investing activities were $52.7 million.

The cash inflows were primarily attributable to $155.6 million from the sale of Hilton La Jolla Torrey Pines, partially offset by cash outflows of $42.3 million from the purchase of securities, $54.8 million of capital improvements made to various hotel properties, $5.8 million from the issuance of a note receivable and a $79,000 loan to OpenKey.

Our capital improvements consisted of approximately $39.3 million of return on investment capital projects and approximately $15.5 million of renewal and replacement capital projects.

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Net Cash Flows Provided by (Used in) Financing Activities.

For the six months ended June 30, 2025, net cash flows used in financing activities were $75.9 million.

Cash outflows primarily consisted of $365.2 million of repayments of indebtedness, $40.7 million for cash redemptions of Series E and Series M preferred stock, $24.2 million of dividend and distribution

payments, $8.9 million of payments of loan costs and exit fees, $508,000 to purchase interest rate caps, and $92,000 from the redemption of operating partnership units.

For the nine months ended September 30, 2025, net cash flows used in financing activities were $160.0 million.

Cash outflows primarily consisted of $453.6 million of repayments of indebtedness, $59.2 million for cash redemptions of Series E and Series M preferred stock, $35.9 million of dividend and distribution payments, $11.5 million of payments of loan costs and exit fees, $2.3 million of distributions to noncontrolling interests in consolidated entities, $778,000 for repurchase of common stock, $658,000 to purchase interest rate caps and $94,000 from the redemption of operating partnership units.

These cash outflows were partially offset by cash inflows of $403.0 million from borrowings on indebtedness, $611,000 of proceeds from in-the-money interest rate caps and a contribution of $306,000 from a noncontrolling interest holder in a consolidated entity.

For the six months ended June 30, 2024, net cash flows provided by financing activities were $6.9 million.

Cash outflows primarily consisted of $30.0 million of repayments of indebtedness, $26.2 million of dividend and distribution payments, $1.3 million to purchase interest rate caps, $3.3 million of payments of loan costs and exit fees and $11.0 million for cash redemptions of Series E and Series M preferred stock.

These cash outflows were partially offset by cash inflows of $62.0 million from borrowings on indebtedness and $3.3 million of proceeds from in-the-money interest rate caps.

For the nine months ended September 30, 2024, net cash flows used in financing activities were $62.2 million.

Cash outflows primarily consisted of $184.1 million of repayments of indebtedness, $39.0 million of dividend and distribution payments, $1.3 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 $36.3 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, $4.4 million of proceeds from in-the-money interest rate caps and $3.0 million of contributions from noncontrolling interest in consolidated entities.

Dividend Policy

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The Company expects to pay a quarterly cash dividend of $0.05 per share for the Company’s common stock for 2025, or $0.20 per share on an annualized basis.

On April 2, 2025, our board of directors declared a quarterly cash dividend of $0.05 per diluted share for the second quarter of 2025.

On July 10, 2025, our board of directors declared a quarterly cash dividend of $0.05 per diluted share for the third quarter of 2025.

On October 10, 2025, our board of directors declared a quarterly cash dividend of $0.05 per diluted share for the fourth quarter of 2025.

The approval of our dividend policy does not commit our board of directors to declare future dividends with respect to any quantity or the amount thereof.

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Quarterly revenue also may be adversely affected by renovations and repositionings, our managers’ effectiveness in generating business and by events beyond our control, such as pandemics, extreme weather conditions, natural disasters, terrorist attacks or alerts, civil unrest, government shutdowns, airline strikes or reduced airline capacity, economic factors and other considerations affecting travel.

To the extent that cash flows from operations and cash on hand are insufficient during any quarter due to temporary or seasonal fluctuations in lease revenue, we expect to utilize borrowings to fund distributions required to maintain our REIT status.

To the extent that cash flows from operations and cash on hand are insufficient during any quarter due to temporary or seasonal fluctuations in lease revenue, we expect to utilize

borrowings to fund distributions required to maintain our REIT status.

However, we cannot make any assurances that we will make distributions in the future.

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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 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.

In addition, we exclude impairment on real estate, (gain) loss on disposition of assets and hotel properties 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.

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The following table reconciles net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAre (in thousands) (unaudited):

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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Company’s portion of EBITDA of OpenKey — (76) — (215)

EBITDA and EBITDAre

52,427 91,964 154,323 198,882

(Gain) loss on disposition of assets and hotel property

(40,970) (88,210) (40,970) (88,210)

EBITDAre 11,457 3,754 113,353 110,672

Amortization of favorable (unfavorable) contract assets (liabilities) 107 109 321 346

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Other (income) expense

1,250 — 1,250 —

Company’s portion of adjustments to EBITDAre of OpenKey — — — 3

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__________________

(1) Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in 2024 included a true up of these expenses based on capital raised.

(2) Includes amounts related to a $5.0 million expense reduction in 2025 from an insurance recovery for prior legal expenses.

(1) Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in the 2024 period included a true up of these expenses based on capital raised.

(2) Includes amounts related to expense reductions from an insurance recovery for prior legal expenses of $400,000 and $5.0 million, respectively for the three and nine months ended September 30, 2025.

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.

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The following table reconciles net income (loss) to FFO and Adjusted FFO (in thousands) (unaudited):

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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Equity in (earnings) loss of unconsolidated entity — 80 — 214

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

(40,988) (61,970) (40,988) (61,970)

Company’s portion of FFO of OpenKey — (91) — (253)

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Other (income) expense

1,250 — 1,250 —

Company’s portion of adjustments to FFO of OpenKey — — — 3

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The following table presents the amounts of the adjustments for noncontrolling interests for each line item:

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

1 unchanged sentence

Amortization of loan costs (36) (38) (107) (273)

(2) Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in 2024 included a true up of these expenses based on capital raised.

(3) Includes amounts related to a $5.0 million expense reduction in 2025 from an insurance recovery for prior legal expenses.

The following table presents certain information related to our hotel properties as of June 30, 2025:

Gain (loss) on disposition of assets and hotel property

(18) 26,240 (18) 26,240

(2) Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in the 2024 period included a true up of these expenses based on capital raised.

(3) Includes amounts related to expense reductions from an insurance recovery for prior legal expenses of $400,000 and $5.0 million, respectively for the three and nine months ended September 30, 2025.

The following table presents certain information related to our hotel properties as of September 30, 2025:

Hotel Property Location Total Rooms % Owned Owned Rooms

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Capital Hilton Washington, D.C.

Marriott Seattle Waterfront Seattle, WA 369 100 % 369

The Notary Hotel Philadelphia, PA 499 100 % 499

28 unchanged sentences

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 2. Management’s Discussion and Analysis