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Braemar Hotels & Resorts Reports Fourth Quarter And Year End 2018 Results

Actual RevPAR for All Hotels Increased 9.0% in the 4th Quarter

Comparable RevPAR for All Hotels Not Under Renovation Increased 7.0% in the 4th Quarter

Entered into an Enhanced Return Funding Program with Ashford Inc.

Completed Acquisition of the Ritz-Carlton Lake Tahoe

Completed Refinancing of 2-Hotel Portfolio

DALLAS, Feb. 27, 2019 /PRNewswire/ -- Braemar Hotels & Resorts Inc. (BHR) ("Braemar" or the "Company") today reported the following results and performance measures for the fourth quarter and full year ended December 31, 2018.  The comparable performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel EBITDA assume each of the hotel properties in the Company's hotel portfolio as of December 31, 2018 were owned as of the beginning of each of the periods presented.  Unless otherwise stated, all reported results compare the fourth quarter ended December 31, 2018, with the fourth quarter ended December 31, 2017 (see discussion below).  The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

STRATEGIC OVERVIEW

  • Focused strategy of investing in luxury hotels and resorts
  • Targets conservative leverage levels of 45% Net Debt to Gross Assets
  • Highly-aligned management team and advisory structure
  • Dividend yield of approximately 5.1%

FINANCIAL AND OPERATING HIGHLIGHTS

  • Net loss attributable to common stockholders for the quarter was $14.4 million or $0.44 per diluted share. For the full year of 2018, net loss attributable to common stockholders was $5.9 million or $0.19 per diluted share.
  • Actual RevPAR for all hotels increased 9.0% to $203.51 during the quarter
  • Comparable RevPAR for all hotels increased 3.2% to $203.51 during the quarter
  • Comparable RevPAR for all hotels not under renovation increased 7.0% to $224.16 during the quarter
  • Comparable Hotel EBITDA for all hotels not under renovation increased 13.4% during the quarter
  • Adjusted funds from operations (AFFO) was $0.15 per diluted share for the quarter
  • AFFO was $1.55 per diluted share for the full year
  • Adjusted EBITDAre was $20.3 million for the quarter
  • Adjusted EBITDAre was $119.3 million of the full year reflecting an increase of 7.3% over the prior year
  • Comparable Hotel EBITDA margin for all hotels not under renovation increased 237 basis points during the quarter
  • During the quarter, the Company completed a $40.0 million offering of its 8.25% Series D Preferred Stock
  • Subsequent to quarter end, the Company entered into a new Enhanced Return Funding Program agreement with Ashford Inc.
  • Subsequent to quarter end, the Company completed the acquisition of the 170-room Ritz-Carlton Lake Tahoe in Truckee, California for $103.3 million
  • Subsequent to quarter end, the Company refinanced a mortgage loan on 2 hotels
  • Capex invested during the quarter was $26.0 million, bringing the total capex invested for the full year to $77.6 million

UPDATE ON BUSINESS INTERRUPTION INCOME
During 2018, the Company recognized $13.5 million of business interruption ("BI") income for the Ritz-Carlton St. Thomas related to lost profits for the period of December 2017 through November 2018 due to the impact of Hurricane Irma.  While the Company did not recognize BI income for the Ritz-Carlton St. Thomas during the fourth quarter of 2018, the Company expects BI income to resume in the first quarter of 2019.

The Company will continue to work with its insurers on the claims at the Ritz-Carlton St. Thomas and expects to continue to receive additional BI income through at least the reopening of the property which is scheduled for October 2019.

ENHANCED RETURN FUNDING PROGRAM
On January 17, 2019, the Company announced that it had entered into an Enhanced Return Funding Program ("ERFP") with Ashford Inc. (NYSE American: AINC). Subject to the terms of the two-year programmatic agreement, Ashford Inc. has committed to effectively fund amounts equal to 10% of the purchase price of future Braemar hotel acquisitions, up to an amount of $50 million in aggregate funding. The Program has the potential to be upsized to $100 million based upon mutual agreement.  To the extent that Braemar pursues future acquisitions, the Company believes the ERFP will result in a competitive advantage when bidding for up to $400 million of additional acquisitions.  The ERFP should result in enhanced returns for Braemar's shareholders by effectively reducing the total purchase price and total amount of equity required for investment purposes.

RITZ-CARLTON LAKE TAHOE ACQUISITION
On January 15, 2019, the Company completed the acquisition of the 170-room Ritz-Carlton Lake Tahoe in Truckee, California for a total consideration of $120 million consisting of $103.3 million for the hotel, $8.4 million for the 3.4-acre undeveloped land parcel, and $8.3 million for capital reserves. 

The purchase of the Ritz-Carlton Lake Tahoe is the Company's first hotel acquisition to benefit from the ERFP. In connection with this acquisition and subject to the terms of the ERFP, Ashford Inc. has committed to provide Braemar with approximately $10.3 million of cash via the future purchase of hotel furniture, fixtures, and equipment at Braemar properties. Concurrent with the completion of the acquisition, the Company also entered into a $54 million non-recourse mortgage loan. The loan is interest-only, has a five-year term, and bears interest at LIBOR + 2.10%.  The hotel will continue to be managed by Ritz-Carlton.

CAPITAL STRUCTURE
At December 31, 2018, the Company had total assets of $1.6 billion. As of December 31, 2018, the Company had $993 million of mortgage loans of which $47 million related to its joint venture partner's share of the mortgage loan on the Capital Hilton and Hilton La Jolla Torrey Pines.  The Company's total combined mortgage loans had a blended average interest rate of 5.0%.  Taking into account the refinancing that occurred subsequent to year-end along with the new financing on the Ritz-Carlton Lake Tahoe, the Company's current blended average interest rate is approximately 4.8%.

On November 13, 2018, the Company announced that it had completed its underwritten public offering of 1,600,000 shares of 8.25% Series D Cumulative Preferred Stock at $25.00 per share for net proceeds of approximately $38.7 million. Dividends on the Series D Preferred Stock will accrue at a rate of 8.25% per annum on the liquidation preference of $25.00 per share.   

Subsequent to quarter end, on January 22, 2019, the Company announced that it had refinanced its Aareal Capital mortgage loan with an existing outstanding balance totaling approximately $187 million and a final maturity date in November 2021.  The new loan totals $195 million and has a five-year term. The loan is interest only and provides for a floating interest rate of LIBOR + 1.70%.  The loan remains secured by the same two hotels: the Capital Hilton in Washington, D.C. and Hilton La Jolla Torrey Pines in La Jolla, CA.  Braemar has a 75% ownership interest in the properties.

PORTFOLIO REVPAR
As of December 31, 2018, the portfolio consisted of twelve properties.  During the fourth quarter of 2018, eight of the Company's hotels were not under renovation.  The Company believes reporting its operating metrics for its hotels on a comparable total basis (all 12 hotels) and comparable not under renovation basis (8 hotels) is a measure that reflects a meaningful and focused comparison of the operating results in its portfolio.  Details of each category are provided in the tables attached to this release.

  • Comparable RevPAR increased 3.2% to $203.51 for all hotels on a 5.5% increase in ADR and a 2.2% decrease in occupancy
  • Comparable RevPAR increased 7.0% to $224.16 for hotels not under renovation on a 7.1% increase in ADR and a 0.2% decrease in occupancy

HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS
The Company believes year-over-year Comparable Hotel EBITDA and Comparable Hotel EBITDA Margin comparisons are more meaningful to gauge the performance of the Company's hotels than sequential quarter-over-quarter comparisons.  Given the substantial seasonality in the Company's portfolio, to help investors better understand this seasonality, the Company provides quarterly detail on its Comparable Hotel EBITDA and Comparable Hotel EBITDA Margin for the current and certain prior-year periods based upon the number of hotels in the Company's portfolio as of the end of the current period.  As the Company's portfolio mix changes from time to time so will the seasonality for Comparable Hotel EBITDA and Comparable Hotel EBITDA Margin.  The details of the quarterly calculations for the previous four quarters for the twelve hotels are provided in the table attached to this release.

COMMON STOCK DIVIDEND
On December 10, 2018, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.16 per diluted share for the Company's common stock for the fourth quarter ending December 31, 2018. The dividend, which equates to an annual rate of $0.64 per share, was paid on January 15, 2019, to shareholders of record as of December 31, 2018.

The Board also approved the Company's dividend policy for 2019.  The Company expects to pay a quarterly cash dividend of $0.16 per share for 2019, or $0.64 per share on an annualized basis.  The Board will continue to review its dividend policy on a quarter-to-quarter basis.  The adoption of a dividend policy does not commit the Board of Directors to declare future dividends or the amount thereof.

"We continue to diligently execute on our strategic objectives focusing on the luxury hotel segment," said Richard J. Stockton, Braemar's President and Chief Executive Officer. "We have consistently made progress throughout 2018 on the portfolio repositioning, capital investment and asset management front and remain on track with our Autograph Collection conversions at both the Courtyard Philadelphia Downtown and Courtyard San Francisco Downtown. Additionally, our recent purchase of the Ritz-Carlton Lake Tahoe is particularly attractive, and we believe the returns for our shareholders should be significantly improved via the Enhanced Return Funding Program with Ashford Inc. Looking ahead, we believe we are well-positioned to have a strong 2019."   

INVESTOR CONFERENCE CALL AND SIMULCAST
Braemar will conduct a conference call on Wednesday, February 27, 2019, at 3:00 p.m. ET.  The number to call for this interactive teleconference is (323) 794-2093.  A replay of the conference call will be available through Wednesday, March 6, 2019, by dialing (719) 457-0820 and entering the confirmation number, 4317765.

The Company will also provide an online simulcast and rebroadcast of its fourth quarter 2018 earnings release conference call.  The live broadcast of Braemar's quarterly conference call will be available online at the Company's web site, www.bhrreit.com on Wednesday, February 27, 2019, beginning at 3:00 p.m. ET.  The online replay will follow shortly after the call and continue for approximately one year.

We use certain non-GAAP measures, in addition to the required GAAP presentations, as we believe these measures improve the understanding of our operational results and make comparisons of operating results among peer real estate investment trusts more meaningful. The non-GAAP financial measures, which should not be relied upon as a substitute for GAAP measures, used in this press release are FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA.  Please refer to our most recently filed Annual Report on Form 10-K for a more detailed description of how these non-GAAP measures are calculated.  The reconciliations of non-GAAP measures to the closing GAAP measures are provided below and provide further details of our results for the period being reported.

*  *  *  *  * 

Braemar Hotels & Resorts is a real estate investment trust (REIT) focused on investing in luxury hotels and resorts.

Ashford has created an Ashford App for the hospitality REIT investor community.  The Ashford App is available for free download at Apple's App Store and the Google Play Store by searching "Ashford."

Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the federal securities regulations.  Forward-looking statements in this press release may include, among others, statements about the implied share price for the Company's common stock.  When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements.  Such statements are subject to numerous assumptions and uncertainties, many of which are outside Braemar's control.

These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation:  general conditions of the capital markets and the market price of our common stock; changes in our business or investment strategy; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the market in which we operate, interest rates or the general economy; our ability to successfully complete and integrate acquisitions, and manage our planned growth, and the degree and nature of our competition.  These and other risk factors are more fully discussed in Braemar's filings with the Securities and Exchange Commission. 

The forward-looking statements included in this press release are only made as of the date of this press release.  The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur.  We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations or otherwise.

 

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

(unaudited)



December 31,
 2018


December 31,
 2017

ASSETS




Investments in hotel properties, gross

$

1,562,806



$

1,403,110


Accumulated depreciation

(262,905)



(257,268)


Investments in hotel properties, net

1,299,901



1,145,842


Cash and cash equivalents

182,578



137,522


Restricted cash

75,910



47,820


Accounts receivable, net of allowance of $101 and $94, respectively

12,739



14,334


Insurance receivable



8,825


Inventories

1,862



1,425


Note receivable



8,098


Prepaid expenses

4,409



3,670


Investment in Ashford Inc., at fair value

10,114



18,124


Investment in OpenKey

1,766




Derivative assets

772



594


Other assets

13,831



10,082


Intangible assets, net

27,678



22,545


Due from related party, net



349


Due from third-party hotel managers

4,927



4,589


Total assets

$

1,636,487



$

1,423,819






LIABILITIES AND EQUITY




Liabilities:




Indebtedness, net

$

985,873



$

820,959


Accounts payable and accrued expenses

64,116



56,803


Dividends and distributions payable

8,514



8,146


Due to Ashford Inc., net

4,001



1,703


Due to related party, net

224




Due to third-party hotel managers

1,633



1,709


Intangible liability, net



3,569


Other liabilities

29,033



1,628


Total liabilities

1,093,394



894,517






5.50% Series B Cumulative Convertible Preferred Stock, $0.01 par value, 4,965,850 shares issued and outstanding at
   December 31, 2018 and 2017

106,123



106,123


Redeemable noncontrolling interests in operating partnership

44,885



46,627


Equity:




Preferred stock, $0.01 value, 50,000,000 shares authorized:




Series D Cumulative Preferred Stock, 1,600,000 and 0 shares issued and outstanding as of December 31, 2018 and
   2017, respectively

16




Common stock, $0.01 par value, 200,000,000 shares authorized, 32,511,660 and 32,120,210 shares issued and
   outstanding at December 31, 2018 and 2017, respectively

325



321


Additional paid-in capital

512,545



469,791


Accumulated deficit

(115,410)



(88,807)


Total stockholders' equity of the Company

397,476



381,305


Noncontrolling interest in consolidated entities

(5,391)



(4,753)


Total equity

392,085



376,552


Total liabilities and equity

$

1,636,487



$

1,423,819


 

 

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)



Three Months Ended


Year Ended


December 31,


December 31,


2018


2017


2018


2017

REVENUE








Rooms

$

64,471



$

61,803



$

282,775



$

286,006


Food and beverage

24,607



20,815



94,671



96,415


Other

9,867



9,896



53,952



31,484


Total hotel revenue

98,945



92,514



431,398



413,905


Other



42





158


Total revenue

98,945



92,556



431,398



414,063


EXPENSES








Hotel operating expenses:








Rooms

14,304



14,623



62,498



65,731


Food and beverage

17,308



14,579



66,386



68,469


Other expenses

32,610



27,388



128,100



122,322


Management fees

3,567



3,431



15,648



15,074


Total hotel operating expenses

67,789



60,021



272,632



271,596


Property taxes, insurance and other

7,511



5,696



26,027



21,337


Depreciation and amortization

15,092



12,689



57,383



52,262


Impairment charges



60



71



1,068


Advisory services fee:








Base advisory fee

2,496



2,221



9,424



8,800


Reimbursable expenses

624



476



2,072



2,017


Incentive fee

(206)





2,035




Non-cash stock/unit-based compensation

1,241



615



6,481



(1,683)


Contract modification cost







5,000


Transaction costs



40



949



6,678


Corporate, general and administrative:








Non-cash stock/unit-based compensation



20



304



265


Other general and administrative

1,238



1,119



3,933



7,881


Total operating expenses

95,785



82,957



381,311



375,221


Gain (loss) on sale of hotel property

27



23,797



15,738



23,797


OPERATING INCOME (LOSS)

3,187



33,396



65,825



62,639


Equity in earnings (loss) of unconsolidated entity

(88)





(234)




Interest income

632



215



1,602



690


Other income (expense)

(63)



(85)



(253)



(377)


Interest expense

(12,609)



(9,045)



(45,393)



(34,034)


Amortization of loan costs

(1,103)



(1,149)



(4,260)



(4,903)


Write-off of loan costs and exit fees



(1,531)



(4,178)



(3,874)


Unrealized gain (loss) on investments

(4,672)



6,314



(8,010)



9,717


Unrealized gain (loss) on derivatives

721



(527)



(82)



(2,056)


INCOME (LOSS) BEFORE INCOME TAXES

(13,995)



27,588



5,017



27,802


Income tax (expense) benefit

82



856



(2,432)



522


NET INCOME (LOSS)

(13,913)



28,444



2,585



28,324


(Income) loss from consolidated entities attributable to noncontrolling interest

(274)



(528)



(2,016)



(3,264)


Net (income) loss attributable to redeemable noncontrolling interests in operating partnership

1,826



(2,996)



751



(2,038)


NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

(12,361)



24,920



1,320



23,022


Preferred dividends

(2,083)



(1,708)



(7,205)



(6,795)


NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(14,444)



$

23,212



$

(5,885)



$

16,227










INCOME (LOSS) PER SHARE – BASIC AND DILUTED








Basic:








Net income (loss) attributable to common stockholders

$

(0.44)



$

0.73



$

(0.19)



$

0.52


Weighted average common shares outstanding – basic

32,058



31,610



31,944



30,473


Diluted:








Net income (loss) attributable to common stockholders

$

(0.44)



$

0.65



$

(0.19)



$

0.51


Weighted average common shares outstanding – diluted

32,058



38,178



31,944



34,706


Dividends declared per common share:

$

0.16



$

0.16



$

0.64



$

0.64


 


 

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, EBITDAre AND ADJUSTED EBITDAre

(in thousands)

(unaudited)



Three Months Ended


Year Ended


December 31,


December 31,


2018


2017


2018


2017

Net income (loss)

$

(13,913)



$

28,444



$

2,585



$

28,324


Interest expense and amortization of loan costs

13,712



10,194



49,653



38,937


Depreciation and amortization

15,092



12,689



57,383



52,262


Income tax expense (benefit)

(82)



(856)



2,432



(522)


Equity in (earnings) loss of unconsolidated entity

88





234




Company's portion of EBITDA of OpenKey

(77)





(220)




EBITDA

14,820



50,471



112,067



119,001


Impairment charges on real estate



60



71



1,068


(Gain) loss on sale of hotel property

(27)



(23,797)



(15,738)



(23,797)


EBITDAre

14,793



26,734



96,400



96,272


Amortization of favorable (unfavorable) contract assets (liabilities)

52



44



195



180


Transaction and management conversion costs

2,000



74



2,965



6,774


Other (income) expense

63



85



253



377


Write-off of loan costs and exit fees



1,531



4,178



3,874


Unrealized (gain) loss on investments

4,672



(6,314)



8,010



(9,717)


Unrealized (gain) loss on derivatives

(721)



527



82



2,056


Non-cash stock/unit-based compensation

1,295



665



7,004



(1,327)


Legal, advisory and settlement costs

426



203



(241)



3,711


Advisory services incentive fee

(2,241)








Contract modification cost







5,000


Software implementation costs







79


Uninsured hurricane and wildfire related costs



248



412



3,821


Company's portion of adjustments to EBITDAre of OpenKey

8





7




Adjusted EBITDAre

$

20,347



$

23,797



$

119,265



$

111,100


 

 

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

RECONCILIATION OF NET INCOME (LOSS) TO FUNDS FROM OPERATIONS ("FFO") AND ADJUSTED FFO

(in thousands, except per share amounts)

(unaudited)



Three Months Ended


Year Ended


December 31,


December 31,


2018


2017


2018


2017

Net income (loss)

$

(13,913)



$

28,444



$

2,585



$

28,324


(Income) loss from consolidated entities attributable to noncontrolling interest

(274)



(528)



(2,016)



(3,264)


Net (income) loss attributable to redeemable noncontrolling interests in operating partnership

1,826



(2,996)



751



(2,038)


Preferred dividends

(2,083)



(1,708)



(7,205)



(6,795)


Net income (loss) attributable to common stockholders

(14,444)



23,212



(5,885)



16,227


Depreciation and amortization on real estate

14,320



11,952



54,350



49,361


Impairment charges on real estate



60



71



1,068


Net income (loss) attributable to redeemable noncontrolling interests in operating partnership

(1,826)



2,996



(751)



2,038


Equity in (earnings) loss of unconsolidated entity

88





234




(Gain) loss on sale of hotel property

(27)



(23,797)



(15,738)



(23,797)


Company's portion of FFO of OpenKey

(78)





(224)




FFO available to common stockholders and OP unitholders

(1,967)



14,423



32,057



44,897


Series B Cumulative Convertible Preferred Stock dividends

1,707



1,708



6,829



6,795


Transaction and management conversion costs

2,000



74



2,965



6,774


Other (income) expense

63



85



253



377


Interest expense accretion on refundable membership club deposits

300





676




Write-off of loan costs and exit fees



1,531



4,178



3,874


Amortization of loan costs

1,080



1,125



4,164



4,804


Unrealized (gain) loss on investments

4,672



(6,314)



8,010



(9,717)


Unrealized (gain) loss on derivatives

(721)



524



82



2,053


Non-cash stock/unit-based compensation

1,295



665



7,004



(1,327)


Legal, advisory and settlement costs

426



203



(241)



3,711


Advisory services incentive fee

(2,241)








Contract modification cost







5,000


Software implementation costs







79


Uninsured hurricane and wildfire related costs



248



412



3,821


Tax reform



(161)





(161)


Company's portion of adjustments to FFO of OpenKey

8





7




Adjusted FFO available to common stockholders and OP unitholders

$

6,622



$

14,111



$

66,396



$

70,980


Adjusted FFO per diluted share available to common stockholders and OP unitholders

$

0.15



$

0.33



$

1.55



$

1.73


Weighted average diluted shares

43,026



42,406



42,787



40,957


 

 


BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

SUMMARY OF INDEBTEDNESS

DECEMBER 31, 2018

(dollars in thousands)

(unaudited)


Indebtedness


Maturity


Interest Rate


Fixed-
Rate
Debt


Floating-
Rate
Debt


Total
Debt


Comparable
TTM
Hotel
EBITDA (8)


Comparable
TTM
EBITDA
Debt Yield

Credit Agricole Pier House


March 2019


LIBOR + 2.25%


$



$

70,000


(1)

$

70,000



$

10,907



15.6

%

JPMorgan Park Hyatt Beaver Creek


April 2019


LIBOR + 2.75%




67,500


(2)

67,500



9,238



13.7

%

Aareal Capital Hilton and Hilton Torrey Pines


November 2019


LIBOR + 2.65%




187,086


(3)

187,086



29,216



15.6

%

Secured revolving credit facility - various


November 2019


Base Rate(6) + 1.25% to 2.50% or
LIBOR + 2.25% to 3.50%





(4)



N/A



N/A


Apollo Ritz-Carlton St. Thomas


December 2019


LIBOR + 4.95%




42,000


(5)

42,000



10,291



24.5

%

BAML Pool - various


June 2020


LIBOR + 2.16%




435,000


(7)

435,000



51,420



11.8

%

BAML Hotel Yountville


May 2022


LIBOR + 2.55%




51,000



51,000



6,418



12.6

%

BAML Bardessono


August 2022


LIBOR + 2.55%




40,000



40,000



6,464



16.2

%

BAML Ritz-Carlton Sarasota


April 2023


LIBOR + 2.65%




100,000



100,000



12,709



12.7

%

Total






$



$

992,586



$

992,586



$

136,663



13.8

%

Percentage






%


100.0

%


100.0

%





Weighted average interest rate






%


5.01

%


5.01

%





 

All indebtedness is non-recourse with the exception of the secured revolving credit facility.

(1)

This mortgage loan has three one-year extension options subject to satisfaction of certain conditions, of which the second was exercised in March 2018.

(2) 

This mortgage loan has three one-year extension options subject to satisfaction of certain conditions.

(3) 

This mortgage loan has two one-year extension options subject to satisfaction of certain conditions.

(4) 

This credit facility has two one-year extension options subject to advance notice, certain conditions and a 0.25% extension fee beginning November 2019.

(5) 

This mortgage loan has three one-year extension options subject to satisfaction of certain conditions, of which the second was exercised in December 2018.

(6) 

Base Rate, as defined in the secured revolving credit facility agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate + 0.5%, or (iii) LIBOR + 1.0%.

(7) 

This mortgage loan has five one-year extension options subject to satisfaction of certain conditions. This mortgage loan is secured by the Chicago Sofitel Magnificent Mile, Philadelphia Courtyard Downtown, San Francisco Courtyard Downtown and Seattle Marriott Waterfront.

(8) 

See Exhibit 1 for reconciliation of net income (loss) to hotel EBITDA.

 

 


BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

INDEBTEDNESS BY MATURITY ASSUMING EXTENSION OPTIONS ARE EXERCISED

DECEMBER 31, 2018

(dollars in thousands)

(unaudited)




2019


2020


2021


2022


2023


Thereafter


Total

Secured revolving credit facility - various


$



$



$



$



$



$



$


Credit Agricole Pier House




70,000











70,000


Apollo Ritz-Carlton St. Thomas




42,000











42,000


Aareal Capital Hilton and Hilton Torrey Pines






177,486









177,486


JPMorgan Park Hyatt Beaver Creek








67,500







67,500


BAML Hotel Yountville








51,000







51,000


BAML Bardessono








40,000







40,000


BAML Ritz-Carlton Sarasota










98,000





98,000


BAML Pool - various (1)












435,000



435,000


Principal due in future periods


$



$

112,000



$

177,486



$

158,500



$

98,000



$

435,000



$

980,986


Scheduled amortization payments remaining


3,372



3,312



3,416



1,000



500





11,600


Total indebtedness


$

3,372



$

115,312



$

180,902



$

159,500



$

98,500



$

435,000



$

992,586


 

(1)

This mortgage loan is secured by the Chicago Sofitel Magnificent Mile, Philadelphia Courtyard Downtown, San Francisco Courtyard Downtown and Seattle Marriott Waterfront.

 

 


BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

KEY PERFORMANCE INDICATORS

(unaudited)


ALL HOTELS:




Three Months Ended December 31,



Actual


Non-
comparable
Adjustments


Comparable


Actual


Non-
comparable
Adjustments


Comparable


Actual


Comparable



2018


2018


2018


2017


2017


2017


% Variance


% Variance


Rooms revenue (in thousands)

$

64,471



$



$

64,471



$

61,803



$

543



$

62,346



4.32

%


3.41

%


RevPAR

$

203.51



$



$

203.51



$

186.65



$

(36.18)



$

197.23



9.03

%


3.18

%


Occupancy

75.58

%


%


75.58

%


77.19

%


(75.38)

%


77.27

%


(2.09)

%


(2.19)

%


ADR

$

269.24



$



$

269.24



$

241.81



$

(48.00)



$

255.23



11.34

%


5.49

%





ALL HOTELS:




Year Ended December 31,



Actual


Non-
comparable
Adjustments


Comparable


Actual


Non-
comparable
Adjustments


Comparable


Actual


Comparable



2018


2018


2018


2017


2017


2017


% Variance


% Variance


Rooms revenue (in thousands)

$

282,775



$

1,280



$

284,055



$

286,006



$

7,494



$

293,500



(1.13)

%


(3.22)

%


RevPAR

$

221.17



$

(65.57)



$

225.61



$

206.42



$

(71.26)



$

229.23



7.15

%


(1.58)

%


Occupancy

81.31

%


(94.12)

%


81.11

%


80.97

%


(75.11)

%


81.46

%


0.42

%


(0.43)

%


ADR

$

272.02



$

(69.67)



$

278.16



$

254.92



$

(94.86)



$

281.42



6.71

%


(1.16)

%

 

NOTES:

(1)

The above comparable information assumes the twelve hotel properties owned and included in the Company's operations at December 31, 2018, were owned as of the beginning of each of the periods presented. Non-comparable adjustments include pre-acquisition results from hotel properties acquired during the period offset by results from hotel properties sold during the period.

(2)

All pre-acquisition information was obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition.

 

 

ALL HOTELS


     NOT UNDER RENOVATION:

Three Months Ended December 31,



Actual


Non-
comparable
Adjustments


Comparable


Actual


Non-
comparable
Adjustments


Comparable


Actual


Comparable



2018


2018


2018


2017


2017


2017


% Variance


% Variance


Rooms revenue (in thousands)

$

39,390



$



$

39,390



$

36,281



$

543



$

36,824



8.57

%


6.97

%


RevPAR

$

224.16



$



$

224.16



$

190.22



$

(36.18)



$

209.56



17.85

%


6.97

%


Occupancy

74.73

%


%


74.73

%


74.88

%


(75.38)

%


74.84

%


(0.21)

%


(0.16)

%


ADR

$

299.98



$



$

299.98



$

254.02



$

(48.00)



$

280.00



18.10

%


7.13

%





ALL HOTELS


     NOT UNDER RENOVATION:

Year Ended December 31,



Actual


Non-
comparable
Adjustments


Comparable


Actual


Non-
comparable
Adjustments


Comparable


Actual


Comparable



2018


2018


2018


2017


2017


2017


% Variance


% Variance


Rooms revenue (in thousands)

$

171,841



$

1,280



$

173,121



$

162,064



$

7,494



$

169,558



6.03

%


2.10

%


RevPAR

$

239.78



$

(65.57)



$

248.33



$

202.15



$

(71.26)



$

243.43



18.62

%


2.01

%


Occupancy

79.24

%


(94.12)

%


78.83

%


79.12

%


(75.11)

%


79.73

%


0.15

%


(1.13)

%


ADR

$

302.59



$

(69.67)



$

315.03



$

255.49



$

(94.86)



$

305.33



18.44

%


3.18

%

 

NOTES:

(1)

The above comparable information assumes the eight hotel properties owned and included in the Company's operations at December 31, 2018, and not under renovation during the three months ended December 31, 2018, were owned as of the beginning of the periods presented. Non-comparable adjustments include pre-acquisition results from hotel properties acquired during the period offset by results from hotel properties sold during the period.

(2)

All pre-acquisition information was obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition.

(3)

Excluded Hotels Under Renovation:


Capital Hilton Washington D.C., Philadelphia Courtyard Downtown, San Francisco Courtyard Downtown, St. Thomas Ritz-Carlton

 

 


BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

HOTEL EBITDA

(dollars in thousands)

(unaudited)


ALL HOTELS:

Three Months Ended


Year Ended



December 31,


December 31,



2018


2017


% Variance


2018


2017


% Variance


Total hotel revenue

$

98,945



$

92,514



6.95

%


$

431,398



$

413,905



4.23

%


Non-comparable adjustments

(74)



7,240





5,462



34,034





Comparable total hotel revenue

$

98,871



$

99,754



(0.89)

%


$

436,860



$

447,939



(2.47)

%















Hotel EBITDA

$

26,950



$

28,168



(4.32)

%


$

137,621



$

128,300



7.27

%


Non-comparable adjustments

(27)



753





(958)



4,291





Comparable hotel EBITDA

$

26,923



$

28,921



(6.91)

%


$

136,663



$

132,591



3.07

%


Hotel EBITDA margin

27.24

%


30.45

%


(3.21)

%


31.90

%


31.00

%


0.90

%


Comparable hotel EBITDA margin

27.23

%


28.99

%


(1.76)

%


31.28

%


29.60

%


1.68

%















Hotel EBITDA adjustments attributable to consolidated noncontrolling interests

$

1,519



$

1,620



(6.23)

%


$

7,304



$

8,103



(9.86)

%


Hotel EBITDA attributable to the Company and OP unitholders

$

25,431



$

26,548



(4.21)

%


$

130,317



$

120,197



8.42

%


Comparable hotel EBITDA attributable to the Company and OP unitholders

$

25,404



$

27,301



(6.95)

%


$

129,359



$

124,488



3.91

%

 

NOTES:

(1)

The above comparable information assumes the twelve hotel properties owned and included in the Company's operations at December 31, 2018, were owned as of the beginning of each of the periods presented. Non-comparable adjustments include pre-acquisition results from hotel properties acquired during the period offset by results from hotel properties sold during the period.

(2)

All pre-acquisition information was obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition.


Adjustments have been made to the pre-acquisition results as indicated below:


(a) Management fee expense was adjusted to reflect current contractual rates.

(3)

See Exhibit 1 for reconciliation of net income (loss) to hotel EBITDA.

 

 


ALL HOTELS

Three Months Ended


Year Ended

     NOT UNDER RENOVATION:

December 31,


December 31,



2018


2017


% Variance


2018


2017


% Variance


Total hotel revenue

$

66,475



$

56,602



17.44

%


$

277,767



$

241,841



14.86

%


Non-comparable adjustments

(74)



7,240





5,462



34,034





Comparable total hotel revenue

$

66,401



$

63,842



4.01

%


$

283,229



$

275,875



2.67

%















Hotel EBITDA

$

19,110



$

16,082



18.83

%


$

85,710



$

75,075



14.17

%


Non-comparable adjustments

(27)



753





(958)



4,291





Comparable hotel EBITDA

$

19,083



$

16,835



13.35

%


$

84,752



$

79,366



6.79

%


Hotel EBITDA margin

28.75

%


28.41

%


0.34

%


30.86

%


31.04

%


(0.18)

%


Comparable hotel EBITDA margin

28.74

%


26.37

%


2.37

%


29.92

%


28.77

%


1.15

%















Hotel EBITDA adjustments attributable to consolidated noncontrolling interests

$

859



$

675



27.26

%


$

3,867



$

3,685



4.94

%


Hotel EBITDA attributable to the Company and OP unitholders

$

18,251



$

15,407



18.46

%


$

81,843



$

71,390



14.64

%


Comparable hotel EBITDA attributable to the Company and OP unitholders

$

18,224



$

16,160



12.77

%


$

80,885



$

75,681



6.88

%

 

NOTES:

(1)

The above comparable information assumes the eight hotel properties owned and included in the Company's operations at December 31, 2018, and not under renovation during the three months ended December 31, 2018, were owned as of the beginning of the periods presented. Non-comparable adjustments include pre-acquisition results from hotel properties acquired during the period offset by results from hotel properties sold during the period.

(2)

All pre-acquisition information was obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition.


Adjustments have been made to the pre-acquisition results as indicated below:


(a) Management fee expense was adjusted to reflect current contractual rates.

(3)

See Exhibit 1 for reconciliation of net income (loss) to hotel EBITDA.

(4)

Excluded Hotels Under Renovation:


Capital Hilton Washington D.C., Philadelphia Courtyard Downtown, San Francisco Courtyard Downtown, St. Thomas Ritz-Carlton

 

 

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

SELECTED FINANCIAL AND OPERATING INFORMATION BY PROPERTY

(in thousands, except operating information)

(unaudited)




Three Months Ended December 31,



Actual


Non-
comparable
Adjustments


Comparable


Actual


Non-
comparable
Adjustments


Comparable


Actual


Comparable



2018


2018


2018


2017


2017


2017


% Variance


% Variance

CAPITAL HILTON WASHINGTON D.C.

















Selected Financial Information:

















Rooms revenue

$

8,801



$



$

8,801



$

9,417



$



$

9,417



(6.54)

%


(6.54)

%


Total hotel revenue

$

12,842



$



$

12,842



$

13,535



$



$

13,535



(5.12)

%


(5.12)

%


Hotel EBITDA

$

2,642



$



$

2,642



$

3,780



$



$

3,780



(30.11)

%


(30.11)

%


Hotel EBITDA margin

20.57

%




20.57

%


27.93

%




27.93

%


(7.36)

%


(7.36)

%


Selected Operating Information:

















RevPAR

$

173.93



$



$

173.93



$

186.11



$



$

186.11



(6.54)

%


(6.54)

%


Occupancy

77.49

%


%


77.49

%


82.00

%


%


82.00

%


(5.50)

%


(5.50)

%


ADR

$

224.45



$



$

224.45



$

226.96



$



$

226.96



(1.11)

%


(1.11)

%


















LA JOLLA HILTON TORREY PINES

















Selected Financial Information:

















Rooms revenue

$

5,801



$



$

5,801



$

5,155



$



$

5,155



12.53

%


12.53

%


Total hotel revenue

$

10,871



$



$

10,871



$

9,500



$



$

9,500



14.43

%


14.43

%


Hotel EBITDA

$

3,435



$



$

3,435



$

2,700



$



$

2,700



27.22

%


27.22

%


Hotel EBITDA margin

31.60

%




31.60

%


28.42

%




28.42

%


3.18

%


3.18

%


Selected Operating Information:

















RevPAR

$

160.03



$



$

160.03



$

142.22



$



$

142.22



12.52

%


12.52

%


Occupancy

79.79

%


%


79.79

%


79.05

%


%


79.05

%


0.94

%


0.94

%


ADR

$

200.57



$



$

200.57



$

179.91



$



$

179.91



11.48

%


11.48

%


















CHICAGO SOFITEL MAGNIFICENT MILE

















Selected Financial Information:

















Rooms revenue

$

6,550



$



$

6,550



$

6,400



$



$

6,400



2.34

%


2.34

%


Total hotel revenue

$

9,031



$



$

9,031



$

8,751



$



$

8,751



3.20

%


3.20

%


Hotel EBITDA

$

2,579



$



$

2,579



$

1,575



$



$

1,575



63.75

%


63.75

%


Hotel EBITDA margin

28.56

%




28.56

%


18.00

%




18.00

%


10.56

%


10.56

%


Selected Operating Information:

















RevPAR

$

171.54



$



$

171.54



$

167.65



$



$

167.65



2.32

%


2.32

%


Occupancy

76.74

%


%


76.74

%


80.23

%


%


80.23

%


(4.35)

%


(4.35)

%


ADR

$

223.54



$



$

223.54



$

208.96



$



$

208.96



6.98

%


6.98

%


















BARDESSONO HOTEL AND SPA

















Selected Financial Information:

















Rooms revenue

$

3,461



$



$

3,461



$

2,557



$



...