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Braemar Hotels & Resorts Reports Second Quarter 2018 Results

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Braemar Hotels & Resorts Reports Second Quarter 2018 Results

Adjusted EBITDAre Increased 14%

AFFO per Share Increased 12%

RevPAR for all hotels not under renovation increased 4.5%

$8.7 Million in Business Interruption Income Booked in the Second Quarter

Completed Acquisition of the Ritz-Carlton Sarasota

Completed Sale of the Renaissance Tampa

PR Newswire

DALLAS, Aug. 1, 2018 /PRNewswire/ -- Braemar Hotels & Resorts Inc. (NYSE:BHR) ("Braemar" or the "Company") today reported the following results and performance measures for the second quarter ended June 30, 2018.  The performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel EBITDA are comparable assuming each of the hotel properties in the Company's hotel portfolio as of June 30, 2018 were owned as of the beginning of each of the periods presented.  Unless otherwise stated, all reported results compare the second quarter ended June 30, 2018, with the second quarter ended June 30, 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 5.6%

FINANCIAL AND OPERATING HIGHLIGHTS

  • Net income attributable to common stockholders for the quarter was $9.8 million or $0.29 per diluted share
  • Comparable RevPAR for all hotels not under renovation increased 4.5% to $247.65 during the quarter
  • Adjusted funds from operations (AFFO) was $0.56 per diluted share for the quarter as compared with $0.50 per diluted share from the prior year quarter, reflecting 12% growth
  • Adjusted EBITDAre was $38.3 million for the quarter, compared with $33.7 million for the prior year quarter, reflecting 14% growth
  • During the quarter, the Company completed the acquisition of the 266-room Ritz-Carlton Sarasota in Sarasota, Florida for $171 million
  • During the quarter, the Company completed the sale of the 293-room Renaissance Tampa International Plaza hotel in Tampa, Florida for $68 million
  • During the quarter, the Company completed a $435 million refinancing of two loans
  • Capex invested during the quarter was $16.7 million

UPDATE ON BUSINESS INTERRUPTION INCOME
During the second quarter of 2018, the Company recognized $5.2 million of business interruption income for the Ritz-Carlton St. Thomas related to lost profits for the period of March 2018 through May 2018 due to the impact of Hurricane Irma.

Additionally, during the second quarter, the Company recorded $190,000 in business interruption income for the Bardessono Hotel and the Hotel Yountville related to lost profits for the period of January 2018 through March 2018 due to the impact of the Northern California wildfires and $3.3 million in business interruption income for the Tampa Renaissance related to lost profits related to the BP Deepwater Horizon oil spill in the Gulf of Mexico in 2010.

The Company will continue to work with its insurers on the business interruption claims at the Ritz-Carlton St. Thomas and does not expect to receive any additional business interruption income associated with its other properties.

RITZ-CARLTON SARASOTA ACQUISITION
On April 4, 2018, the Company announced that it had completed the acquisition of the 266-room Ritz-Carlton Sarasota in Sarasota, Florida for $171 million ($643,000 per key).  The purchase price represents a trailing twelve-month cap rate, as of December 31, 2017, of 6% and the Company expects to realize a stabilized unleveraged yield of approximately 8% on its investment. The Company also closed on the acquisition of a 22-acre plot of vacant land adjacent to the golf course for $9.7 million that is currently entitled for residential development.  Concurrent with the completion of the acquisition, the Company financed the hotel with a $100 million non-recourse mortgage loan.  The loan provides for a floating interest rate of LIBOR + 2.65% and has a five-year term. The property will continue to be operated as a Ritz-Carlton under a management agreement with Ritz-Carlton. 

SALE OF RENAISSANCE TAMPA
On June 4, 2018, the Company announced that it had completed the sale of the 293-room Renaissance Tampa International Plaza hotel in Tampa, Florida for $68 million ($232,000 per key). The sales price represents a trailing twelve-month cap rate of 8.2% on net operating income and a 10.0x Hotel EBITDA multiple as of March 31, 2018. 

The sale of the Renaissance Tampa is another step in the execution of the strategy for the Company's non-core hotels that was announced in January 2017.  This transaction follows the Company's June 2017 announcement that it had reached an agreement to convert its Courtyard Philadelphia Downtown hotel to an Autograph Collection property as well as its November 2017 announcements that it had sold its Marriott Plano hotel and had reached an agreement to convert its Courtyard San Francisco Downtown hotel to an Autograph Collection property.

CAPITAL STRUCTURE
At June 30, 2018, the Company had total assets of $1.6 billion.  As of June 30, 2018, the Company had $994 million of mortgage debt of which $47 million related to its joint venture partner's share of debt on the Capital Hilton and Hilton La Jolla Torrey Pines.  The Company's total combined debt had a blended average interest rate of 4.6%.

On May 23, 2018, the Company announced that it had refinanced two mortgage loans with existing outstanding balances totaling approximately $358 million.  The previous mortgage loans that were refinanced were the Morgan Stanley Pool and the GACC Sofitel loans with final maturity dates in February 2024 and March 2019, respectively.  The new loan totals $435 million and has a two-year initial term with five one-year extension options, subject to the satisfaction of certain conditions.   The loan is interest only and provides for a floating interest rate of LIBOR + 2.16%.  The next hard debt maturity for the Company is in March 2020.

PORTFOLIO REVPAR
As of June 30, 2018, the portfolio consisted of twelve properties.  During the second quarter of 2018, ten 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 (10 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 decreased 1.1% to $241.41 for all hotels on a 1.4% decrease in ADR and a 0.3% increase in occupancy
  • Comparable RevPAR increased 4.5% to $247.65 for hotels not under renovation on a 3.4% increase in ADR and a 1.0% increase 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 June 5, 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 second quarter ending June 30, 2018. The dividend, which equates to an annual rate of $0.64 per share, was paid on July 16, 2018, to shareholders of record as of June 29, 2018.

"We continue to execute on our strategic objectives and are pleased to have completed our planned sale of the Renaissance Tampa International Plaza as part of our portfolio realignment initiative," said Richard J. Stockton, Braemar's President and Chief Executive Officer. "Further, the completion of our acquisition of the Ritz-Carlton Sarasota continues our plan of recycling capital into higher quality, higher RevPAR assets consistent with our overall investment strategy. Going forward, we are well positioned to capitalize on the recent strong trends in the luxury class and remain committed to enhancing shareholder value by delivering solid operational performance and executing on all aspects of our business plan."

INVESTOR CONFERENCE CALL AND SIMULCAST
Braemar will conduct a conference call on Thursday, August 2, 2018, at 11:00 a.m. ET.  The number to call for this interactive teleconference is (323) 794-2093.  A replay of the conference call will be available through Thursday, August 9, 2018, by dialing (719) 457-0820 and entering the confirmation number, 3902715.

The Company will also provide an online simulcast and rebroadcast of its second 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 Thursday, August 2, 2018, beginning at 11:00 a.m. ET.  The online replay will follow shortly after the call and continue for approximately one year.

Substantially all of our non-current assets consist of real estate investments secured by real estate.  Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time.  Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of performance, which are not measures of operating performance under GAAP, to assist in evaluating a real estate company's operations. These supplemental measures include FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA.  FFO and EBITDAre are computed in accordance with our interpretation of standards established by NAREIT, which may not be comparable to how these measures reported by other REITs that do not define the term in accordance with the current NAREIT definitions or that interpret the NAREIT definitions differently than us.  None of FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, or Hotel EBITDA represents cash generated from operating activities as determined by GAAP and should not be considered as an alternative to a) GAAP net income (loss) as an indication of our financial performance or b) GAAP cash flows from operating activities as a measure of our liquidity, nor are such measures indicative of funds available to satisfy our cash needs, including our ability to make cash distributions.  However, management believes FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA to be meaningful measures of a REIT's performance and should be considered along with, but not as an alternative to, net income and cash flow as a measure of our operating performance.

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 Private Securities Litigation Reform Act of 1995.  Forward-looking statements in this press release may include, among others, statements about the implied share price for the Company's common stock.  These forward-looking statements are subject to risks and uncertainties.  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 volatility 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.  EBITDA is defined as net income before interest, taxes, depreciation and amortization.  EBITDA yield is defined as trailing twelve month EBITDA divided by the purchase price.  A capitalization rate is determined by dividing the property's annual net operating income by the purchase price.  Net operating income is the property's funds from operations minus a capital expense reserve of either 4% or 5% of gross revenues.  Hotel EBITDA flow-through is the change in Hotel EBITDA divided by the change in total revenues.  Hotel EBITDA Margin is Hotel EBITDA divided by total revenues.  Funds from operations ("FFO"), as defined by the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") in April 2002, represents net income (loss) computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains (or losses) from sales of properties and extraordinary items as defined by GAAP, plus depreciation and amortization of real estate assets, and net of adjustments for the portion of these items related to unconsolidated entities and joint ventures.  EBITDAre and Adjusted EBITDAre are non-GAAP financial measures. The Company computes EBITDAre in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which may not be comparable to EBITDAre  reported by other REITs that do not compute EBITDAre in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than the Company does. The White Paper on EBITDAre approved by the Board of Governors of NAREIT in September 2017 defines EBITDAre as net income (loss) (computed in accordance with GAAP), plus interest expense, plus income tax expense, plus depreciation and amortization, plus (minus) losses and gains on the disposition of depreciated property, plus impairment write-downs of depreciated property and investments in unconsolidated joint ventures, plus adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates.

The forward-looking statements included in this press release are only made as of the date of this press release.  Investors should not place undue reliance on these forward-looking statements.  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)




June 30,
 2018


December 31,
2017

ASSETS




Investments in hotel properties, gross

$

1,520,011



$

1,403,110


Accumulated depreciation

(241,928)



(257,268)


Investments in hotel properties, net

1,278,083



1,145,842


Cash and cash equivalents

169,235



137,522


Restricted cash

83,096



47,820


Accounts receivable, net of allowance of $91 and $94, respectively

22,338



14,334


Insurance receivable



8,825


Inventories

1,898



1,425


Note receivable



8,098


Deferred costs, net

477



656


Prepaid expenses

4,325



3,670


Investment in Ashford Inc., at fair value

12,628



18,124


Investment in OpenKey

1,935




Derivative assets

1,007



594


Other assets

7,800



9,426


Intangible assets, net

27,994



22,545


Due from related party, net

588



349


Due from third-party hotel managers

5,522



4,589


Total assets

$

1,616,926



$

1,423,819






LIABILITIES AND EQUITY




Liabilities:




Indebtedness, net

$

985,205



$

820,959


Accounts payable and accrued expenses

63,976



56,803


Dividends and distributions payable

8,572



8,146


Due to Ashford Inc., net

1,100



1,703


Due to third-party hotel managers

2,299



1,709


Intangible liability, net



3,569


Other liabilities

21,585



1,628


Total liabilities

1,082,737



894,517






5.50% Series B cumulative convertible preferred stock, $0.01 par value, 4,965,850 shares issued and outstanding at 
     June 30, 2018 and December 31, 2017

106,123



106,123


Redeemable noncontrolling interests in operating partnership

47,818



46,627


Equity:




Common stock, $0.01 par value, 200,000,000 shares authorized, 32,501,880 and 32,120,210 shares issued and 
     outstanding at June 30, 2018 and December 31, 2017, respectively

325



321


Additional paid-in capital

472,945



469,791


Accumulated deficit

(87,777)



(88,807)


Total stockholders' equity of the Company

385,493



381,305


Noncontrolling interest in consolidated entities

(5,245)



(4,753)


Total equity

380,248



376,552


Total liabilities and equity

$

1,616,926



$

1,423,819



 

 

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)




Three Months Ended


Six Months Ended


June 30,


June 30,


2018


2017


2018


2017

REVENUE








Rooms

$

78,439



$

79,449



$

143,946



$

146,867


Food and beverage

25,393



27,980



48,893



52,453


Other

17,286



8,626



30,768



13,991


Total hotel revenue

121,118



116,055



223,607



213,311


Other



37





77


Total revenue

121,118



116,092



223,607



213,388


EXPENSES








Hotel operating expenses:








Rooms

16,652



17,613



31,570



33,410


Food and beverage

17,287



19,263



32,907



36,124


Other expenses

33,768



32,021



63,432



59,752


Management fees

4,501



4,209



8,118



7,754


Total hotel operating expenses

72,208



73,106



136,027



137,040


Property taxes, insurance and other

6,077



5,370



11,681



10,444


Depreciation and amortization

14,811



13,469



27,817



25,440


Impairment charges

59





71




Advisory services fee:








Base advisory fee

2,313



2,276



4,420



4,279


Reimbursable expenses

499



532



919



1,079


Incentive fee

691





861




Non-cash stock/unit-based compensation

1,377



335



3,924



(1,350)


Contract modification cost



5,000





5,000


Transaction costs

461



2,066



949



6,394


Corporate, general and administrative:








Non-cash stock/unit-based compensation



227





245


Other general and administrative

1,206



1,304



1,234



5,160


Total operating expenses

99,702



103,685



187,903



193,731


OPERATING INCOME (LOSS)

21,416



12,407



35,704



19,657


Equity in earnings (loss) of unconsolidated entity

(62)





(65)




Interest income

230



165



430



277


Gain (loss) on sale of hotel property

15,711





15,711




Other income (expense)

(63)



(113)



(126)



(270)


Interest expense

(11,603)



(8,582)



(20,794)



(15,735)


Amortization of loan costs

(1,075)



(1,349)



(2,063)



(2,398)


Write-off of loan costs and exit fees

(4,176)





(4,178)



(1,963)


Unrealized gain (loss) on investments

(6,024)



(1,563)



(5,496)



1,528


Unrealized gain (loss) on derivatives

(298)



(100)



(225)



(998)


INCOME (LOSS) BEFORE INCOME TAXES

14,056



865



18,898



98


Income tax (expense) benefit

(1,202)



(479)



(1,774)



(1)


NET INCOME (LOSS)

12,854



386



17,124



97


(Income) loss from consolidated entities attributable to noncontrolling interest

(89)



(1,614)



(47)



(1,593)


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

(1,235)



343



(1,527)



598


NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

11,530



(885)



15,550



(898)


Preferred dividends

(1,708)



(1,707)



(3,415)



(3,380)


NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

9,822



$

(2,592)



$

12,135



$

(4,278)










INCOME (LOSS) PER SHARE – BASIC AND DILUTED








Basic:








Net income (loss) attributable to common stockholders

$

0.30



$

(0.09)



$

0.37



$

(0.16)


Weighted average common shares outstanding – basic

32,006



31,469



31,845



29,380


Diluted:








Net income (loss) attributable to common stockholders

$

0.29



$

(0.09)



$

0.37



$

(0.16)


Weighted average common shares outstanding – diluted

38,588



(31,469)



31,853



29,380


Dividends declared per common share:

$

0.16



$

0.16



$

0.32



$

0.32



 

 

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

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

(in thousands)

(unaudited)




Three Months Ended


Six Months Ended


June 30,


June 30,


2018


2017


2018


2017

Net income (loss)

$

12,854



$

386



$

17,124



$

97


Interest income

(230)



(165)



(430)



(277)


Interest expense and amortization of loan costs

12,678



9,931



22,857



18,133


Depreciation and amortization

14,811



13,469



27,817



25,440


Income tax expense (benefit)

1,202



479



1,774



1


Equity in (earnings) loss of unconsolidated entity

62





65




Company's portion of EBITDA of OpenKey

(62)





(64)




EBITDA

41,315



24,100



69,143



43,394


Impairment charges on real estate

59





71




(Gain) loss on sale of hotel property

(15,711)





(15,711)




EBITDAre

25,663



24,100



53,503



43,394


Amortization of favorable (unfavorable) contract assets (liabilities)

49



44



92



93


Transaction and management conversion costs

462



2,112



965



6,440


Other (income) expense

63



113



126



270


Write-off of loan costs and exit fees

4,176





4,178



1,963


Unrealized (gain) loss on investments

6,024



1,563



5,496



(1,528)


Unrealized (gain) loss on derivatives

298



100



225



998


Non-cash stock/unit-based compensation

1,442



597



4,035



(1,071)


Legal, advisory and settlement costs

197



3



(944)



2,948


Contract modification cost



5,000





5,000


Software implementation costs



79





79


Uninsured hurricane and wildfire related costs

(55)





412




Company's portion of adjustments to EBITDAre of OpenKey

2





2




Adjusted EBITDAre

$

38,321



$

33,711



$

68,090



$

58,586


 

 

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


Six Months Ended


June 30,


June 30,


2018


2017


2018


2017

Net income (loss)

$

12,854



$

386



$

17,124



$

97


(Income) loss from consolidated entities attributable to noncontrolling interest

(89)



(1,614)



(47)



(1,593)


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

(1,235)



343



(1,527)



598


Preferred dividends

(1,708)



(1,707)



(3,415)



(3,380)


Net income (loss) attributable to common stockholders

9,822



(2,592)



12,135



(4,278)


Depreciation and amortization on real estate

14,052



12,752



26,310



24,003


Impairment charges on real estate

59





71




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

1,235



(343)



1,527



(598)


Equity in (earnings) loss of unconsolidated entity

62





65




Gain (loss) on sale of hotel property

(15,711)





(15,711)




Company's portion of FFO of OpenKey

(63)





(65)




FFO available to common stockholders and OP unitholders

9,456



9,817



24,332



19,127


Preferred dividends

1,708



1,707



3,415



3,380


Transaction and management conversion costs

462



2,112



965



6,440


Other (income) expense

63



113



126



270


Interest expense accretion on refundable membership club deposits

150





150




Write-off of loan costs and exit fees

4,176





4,178



1,963


Unrealized (gain) loss on investments

6,024



1,563



5,496



(1,528)


Unrealized (gain) loss on derivatives

298



100



225



998


Non-cash stock/unit-based compensation

1,442



597



4,035



(1,071)


Legal, advisory and settlement costs

197



3



(944)



2,948


Contract modification cost



5,000





5,000


Software implementation costs



79





79


Uninsured hurricane and wildfire related costs

(55)





412




Company's portion of adjustments to FFO of OpenKey

2





2




Adjusted FFO available to the Company and OP unitholders

$

23,923



$

21,091



$

42,392



$

37,606


Adjusted FFO per diluted share available to the Company and OP unitholders

$

0.56



$

0.50



$

1.00



$

0.95


Weighted average diluted shares

42,743



42,556



42,593



39,426



 

 

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

SUMMARY OF INDEBTEDNESS

JUNE 30, 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

Apollo Ritz-Carlton St. Thomas - 1 hotel


December 2018


LIBOR + 4.95%


$



$

42,000


(1)

$

42,000



$

10,866



25.9

%

Credit Agricole Pier House - 1 hotel


March 2019


LIBOR + 2.25%




70,000


(2)

70,000



11,082



15.8

%

JPMorgan Park Hyatt Beaver Creek - 1 hotel


April 2019


LIBOR + 2.75%




67,500


(3)

67,500



9,244



13.7

%

Aareal - 2 hotels


November 2019


LIBOR + 2.65%




188,326


(4)

188,326



30,376



16.1

%

Secured revolving credit facility - various


November 2019


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





(5)



N/A



N/A


BAML Pool - 4 hotels


June 2020


LIBOR + 2.16%




435,000


(7)

435,000



49,525



11.4

%

BAML Hotel Yountville - 1 hotel


May 2022


LIBOR + 2.55%




51,000



51,000



5,961



11.7

%

BAML Bardessono - 1 hotel


August 2022


LIBOR + 2.55%




40,000



40,000



5,417



13.5

%

BAML Ritz-Carlton Sarasota - 1 hotel


April 2023


LIBOR + 2.65%




100,000



100,000



12,958



13.0

%

Total






$



$

993,826



$

993,826



$

135,429



13.6

%

Percentage






%


100.0

%


100.0

%





Weighted average interest rate






%


4.59

%


4.59

%






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 first was exercised in December 2017.

(2)

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

(3)

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

(4)

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

(5)

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

(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.

(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

JUNE 30, 2018

(dollars in thousands)

(unaudited)





2018


2019


2020


2021


2022


Thereafter


Total

Secured revolving credit facility - various


$



$



$



$



$



$



$


Credit Agricole Pier House - 1 hotel






70,000









70,000


Apollo Ritz-Carlton St. Thomas - 1 hotel






42,000









42,000


Aareal - 2 hotels








177,486







177,486


JPMorgan Park Hyatt Beaver Creek - 1 hotel










67,500





67,500


BAML Hotel Yountville - 1 hotel










51,000





51,000


BAML Bardessono - 1 hotel










40,000





40,000


BAML Ritz-Carlton Sarasota - 1 hotel












98,000



98,000


BAML Pool - 4 hotels












435,000



435,000


Principal due in future periods


$



$



$

112,000



$

177,486



$

158,500



$

533,000



$

980,986


Scheduled amortization payments remaining


1,492



3,120



3,312



3,416



1,000



500



12,840


Total indebtedness


$

1,492



$

3,120



$

115,312



$

180,902



$

159,500



$

533,500



$

993,826


 

 

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

KEY PERFORMANCE INDICATORS

(unaudited)



ALL HOTELS:




Three Months Ended June 30,



Actual


Non-
comparable
Adjustments


Comparable


Actual


Non-
comparable
Adjustments


Comparable


Actual


Comparable



2018


2018


2018


2017


2017


2017


% Variance


% Variance


Rooms revenue (in thousands)

$

78,439



$

(2,612)



$

75,827



$

79,449



$

(712)



$

78,737



(1.27)

%


(3.70)

%


RevPAR

$

236.85



$

(152.97)



$

241.41



$

221.65



$

(19.79)



$

244.20



6.86

%


(1.14)

%


Occupancy

84.90

%


(81.55)

%


85.09

%


84.07

%


(76.90)

%


84.87

%


0.99

%


0.26

%


ADR

$

278.96



$

(187.57)



$

283.72



$

263.65



$

(25.73)



$

287.74



5.81

%


(1.40)

%





ALL HOTELS:




Six Months Ended June 30,



Actual


Non-
comparable
Adjustments


Comparable


Actual


Non-
comparable
Adjustments


Comparable


Actual


Comparable



2018


2018


2018


2017


2017


2017


% Variance


% Variance


Rooms revenue (in thousands)

$

143,946



$

1,280



$

145,226



$

146,867



$

10,009



$

156,876



(1.99)

%


(7.43)

%


RevPAR

$

223.45



$

(65.60)



$

232.47



$

212.35



$

(198.15)



$

244.69



5.23

%


(4.99)

%


Occupancy

81.87

%


(94.12)

%


81.49

%


81.35

%


(74.51)

%


81.89

%


0.64

%


(0.49)

%


ADR

$

272.91



$

(69.70)



$

285.27



$

261.03



$

(265.93)



$

298.80



4.55

%


(4.53)

%



NOTES:

(1)

The above comparable information assumes the twelve hotel properties owned and included in the Company's operations at June 30, 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 June 30,



Actual


Non-
comparable
Adjustments


Comparable


Actual


Non-
comparable
Adjustments


Comparable


Actual


Comparable



2018


2018


2018


2017


2017


2017


% Variance


% Variance


Rooms revenue (in thousands)

$

69,184



$

(2,612)



$

66,572



$

64,296



$

(712)



$

63,584



7.60

%


4.70

%


RevPAR

$

242.00



$

(152.97)



$

247.65



$

211.30



$

(19.79)



$

237.01



14.53

%


4.49

%


Occupancy

85.13

%


(81.55)

%


85.36

%


83.59

%


(76.90)

%


84.49

%


1.85

%


1.04

%


ADR

$

284.26



$

(187.57)



$

290.12



$

252.78



$

(25.73)



$

280.53



12.45

%


3.42

%































































ALL HOTELS

     NOT UNDER RENOVATION:


Six Months Ended June 30,



Actual


Non-
comparable
Adjustments


Comparable


Actual


Non-
comparable
Adjustments


Comparable


Actual


Comparable



2018


2018


2018


2017


2017


2017


% Variance


% Variance


Rooms revenue (in thousands)

$

129,456



$

1,280



$

130,736



$

118,498



$

10,009



$

128,507



9.25

%


1.73

%


RevPAR

$

233.63



$

(65.60)



$

244.55



$

202.93



$

(198.15)



$

240.91



15.13

%


1.51

%


Occupancy

83.09

%


(94.12)

%


82.69

%


81.87

%


(74.51)

%


82.57

%


1.49

%


0.15

%


ADR

$

281.17



$

(69.70)



$

295.74



$

247.88



$

(265.93)



$

291.79



13.43

%


1.36

%
































NOTES:

(1)

The above comparable information assumes the ten hotel properties owned and included in the Company's operations at June 30, 2018, and not under renovation during the three months ended June 30, 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:


Chicago Sofitel Magnificent Mile, St. Thomas Ritz-Carlton

 

 

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

HOTEL EBITDA

(dollars in thousands)

(unaudited)



ALL HOTELS:

Three Months Ended


Six Months Ended



June 30,


June 30,



2018


2017


% Variance


2018


2017


% Variance


Total hotel revenue

$

121,118



$

116,055



4.36

%


$

223,607



$

213,311



4.83

%


Non-comparable adjustments

(6,552)



3,141





5,536



27,282





Comparable total hotel revenue

$

114,566



$

119,196



(3.88)

%


$

229,143



$

240,593



(4.76)

%















Hotel EBITDA

$

43,721



$

38,371



13.94

%


$

77,326



$

67,102



15.24

%


Non-comparable adjustments

(4,260)



(877)





(929)



6,457





Comparable hotel EBITDA

$

39,461



$

37,494



5.25

%


$

76,397



$

73,559



3.86

%


Hotel EBITDA margin

36.10

%


33.06

%


3.04

%


34.58

%


31.46

%


3.12

%


Comparable hotel EBITDA margin

34.44

%


31.46

%


2.98

%


33.34

%


30.57

%


2.77

%















Hotel EBITDA adjustments attributable to consolidated noncontrolling interests

$

2,365



$

2,641



(10.45)

%


$

4,355



$

4,865



(10.48)

%


Hotel EBITDA attributable to the Company and OP unitholders

$

41,356



$

35,730



15.75

%


$

72,971



$

62,237



17.25

%


Comparable hotel EBITDA attributable to the Company and OP unitholders

$

37,096



$

34,853



6.44

%


$

72,042



$

68,694



4.87

%
























NOTES:

(1)

The above comparable information assumes the twelve hotel properties owned and included in the Company's operations at June 30, 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
     NOT UNDER RENOVATION:

Three Months Ended


Six Months Ended

June 30,


June 30,



2018


2017


% Variance


2018


2017


% Variance


Total hotel revenue

$

103,538



$

91,573



13.07

%


$

194,586



$

168,368



15.57

%


Non-comparable adjustments

(6,552)



3,141





5,536



27,282





Comparable total hotel revenue

$

96,986



$

94,714



2.40

%


$

200,122



$

195,650



2.29

%















Hotel EBITDA

$

35,744



$

32,046



11.54

%


$

67,104



$

57,544



16.61

%


Non-comparable adjustments

(4,260)



(877)





(929)



6,457





Comparable hotel EBITDA

$

31,484



$

31,169



1.01

%


$

66,175



$

64,001



3.40

%


Hotel EBITDA margin

34.52

%


35.00

%


(0.48)

%


34.49

%


34.18

%


0.31

%


Comparable hotel EBITDA margin

32.46

%


32.91

%


(0.45)

%


33.07

%


32.71

%


0.36

%















Hotel EBITDA adjustments attributable to consolidated noncontrolling interests

$

2,365



$

2,641



(10.45)

%


$

4,355



$

4,865



(10.48)

%


Hotel EBITDA attributable to the Company and OP unitholders

$

33,379



$

29,405



13.51

%


$

62,749



$

52,679



19.12

%


Comparable hotel EBITDA attributable to the Company and OP unitholders

$

29,119



$

28,528



2.07

%


$

61,820



$

59,136



4.54

%



NOTES:

(1)

The above comparable information assumes the ten hotel properties owned and included in the Company's operations at June 30, 2018, and not under renovation during the three months ended June 30, 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:


Chicago Sofitel Magnificent Mile, 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 June 30,



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

$

12,791



$



$

12,791



$

12,516



$



$

12,516



2.20

%


2.20

%


Total hotel revenue

$

17,024



$



$

17,024



$

16,997



$



$

16,997



0.16

%


0.16

%


Hotel EBITDA

$

6,138



$



$

6,138



$

6,248



$



$

6,248



(1.76)

%


(1.76)

%


Hotel EBITDA margin

36.05

%




36.05

%


36.76

%




36.76

%


(0.71)

%


(0.71)

%


Selected Operating Information:

















RevPAR

$

255.58



$



$

255.58



$

250.07



$



$

250.07



2.20

%


2.20

%


Occupancy

91.78

%


%


91.78

%


94.65

%


%


94.65

%


(3.03)

%


(3.03)

%


ADR

$

278.46



$



$

278.46



$

264.22



$



$

264.22



5.39

%


5.39

%


















LA JOLLA HILTON TORREY PINES

















Selected Financial Information:

















Rooms revenue

$

6,417



$



$

6,417



$

6,124



$



$

6,124



4.78

%


4.78

%


Total hotel revenue

$

10,801



$



$

10,801



$

11,570



$



$

11,570



(6.65)

%


(6.65)

%


Hotel EBITDA

$

3,323



$



$

3,323



$

4,318



$



$

4,318



(23.04)

%


(23.04)

%


Hotel EBITDA margin

30.77

%




30.77

%


37.32

%




37.32

%


(6.55)

%


(6.55)

%


Selected Operating Information:

















RevPAR

$

178.99



$



$

178.99



$

170.80



$



$

170.80



4.80

%


4.80

%


Occupancy

85.33

%


%


85.33

%


84.76

%


%


84.76

%


0.67

%


0.67

%


ADR

$

209.77



$



$

209.77



$

201.50



$



$

201.50



4.10

%


4.10

%


















CHICAGO SOFITEL MAGNIFICENT MILE

















Selected Financial Information:

















Rooms revenue

$

7,783



$



$

7,783



$

7,824



$



$

7,824



(0.52)

%


(0.52)

%


Total hotel revenue

$

10,723



$



$

10,723



$

10,386



$



$

10,386



3.24

%


3.24

%


Hotel EBITDA

$

3,576



$



$

3,576



$

3,215



$



$

3,215



11.23

%


11.23

%


Hotel EBITDA margin

33.35

%




33.35

%


30.96

%




30.96

%


2.39

%


2.39

%


Selected Operating Information:

















RevPAR

$

206.09



$



$

206.09



$

207.17



$



$

207.17



(0.52)

%


(0.52)

%


Occupancy

85.23

%


%


85.23

%


89.18

%


%


89.18

%


(4.43)

%


(4.43)

%


ADR

$

241.81



$



$

241.81



$

232.31



$



$

232.31



4.09

%


4.09

%


















BARDESSONO HOTEL AND SPA

















Selected Financial Information:

















Rooms revenue

$

3,770



$



$

3,770



$

3,829



$



$

3,829



(1.54)

%


(1.54)

%


Total hotel revenue

$

5,232



$



$

5,232



$

5,053



$



$

5,053



3.54

%


3.54

%


Hotel EBITDA

$

1,732



$



$

1,732



$

1,571



$



$

1,571



10.25

%


10.25

%


Hotel EBITDA margin

33.10

%




33.10

%


31.09

%




31.09

%


2.01

%


2.01

%


Selected Operating Information:

















RevPAR

$

668.14



$



$

668.14



$

678.78



$



$

678.78



(1.57)

%


(1.57)

%


Occupancy

79.28

%


%


79.28

%


81.81

%


%


81.81

%


(3.09)

%


(3.09)

%


ADR

$

842.76



$



$

842.76



$

829.66



$



$

829.66



1.58

%


1.58

%


















KEY WEST PIER HOUSE RESORT

















Selected Financial Information:

















Rooms revenue

$

4,510



$



$

4,510



$

4,687



$



$

4,687



(3.78)

%


(3.78)

%


Total hotel revenue

$

5,905



$



$

5,905



$

6,161



$



$

6,161



(4.16)

%


(4.16)

%


Hotel EBITDA

$

2,659



$



$

2,659



$

2,715



$

24



$

2,739



(2.06)

%


(2.92)

%


Hotel EBITDA margin

45.03

%




45.03

%


44.07

%




44.46

%


0.96

%


0.57

%


Selected Operating Information:

















RevPAR

$

349.02



$



$

349.02



$

362.69



$



$

362.69



(3.77)

%


(3.77)

%


Occupancy

80.85

%


%


80.85

%


84.82

%


%


84.82

%


(4.68)

%


(4.68)

%


ADR

$

431.70



$



$

431.70



$

427.58



$



$

427.58



0.96

%


0.96

%


















HOTEL YOUNTVILLE

















Selected Financial Information:

















Rooms revenue

$

3,458



$



$

3,458



$

1,982



$

1,285



$

3,267



74.47

%


5.85

%


Total hotel revenue

$

4,159



$



$

4,159



$

2,355



$

1,571



$

3,926



76.60

%


5.93

%


Hotel EBITDA

$

1,780



$



$

1,780



$

984



$

572



$

1,556



80.89

%


14.40

%


Hotel EBITDA margin

42.80

%




42.80

%


41.78

%




39.63

%


1.02

%


3.17

%


Selected Operating Information:

















RevPAR

$

475.01



$



$

475.01



$

485.76



$

401.52



$

448.73



(2.21)

%


5.86

%


Occupancy

80.23

%


%


80.23

%


77.33

%


77.72

%


77.50

%


3.75

%


3.52

%


ADR

$

592.04



$



$

592.04



$

628.17



$

516.64



$

579.01



(5.75)

%


2.25

%


















PARK HYATT BEAVER CREEK

















Selected Financial Information:

















Rooms revenue

$

1,761



$



$

1,761



$

1,717



$



$

1,717



2.56

%


2.56

%


Total hotel revenue

$

5,237



$



$

5,237



$

4,946



$



$

4,946



5.88

%


5.88

%


Hotel EBITDA

$

(670)



$



$

(670)



$

(447)



$



$

(447)



(49.89)

%


(49.89)

%


Hotel EBITDA margin

(12.79)

%




(12.79)

%


(9.04)

%




(9.04)

%


(3.75)

%


(3.75)

%


Selected Operating Information:

















RevPAR

$

101.82



$



$

101.82



$

99.29



$



$

99.29



2.55

%


2.55

%


Occupancy

43.29

%


%


43.29

%


43.91

%


%


43.91

%


(1.41)

%


(1.41)

%


ADR

$

235.20



$



$

235.20



$

226.13



$



$

226.13



4.01

%


4.01

%


















PHILADELPHIA COURTYARD DOWNTOWN

















Selected Financial Information:

















Rooms revenue

$

8,351



$



$

8,351



$

7,781



$



$

7,781



7.33

%


7.33

%


Total hotel revenue

$

10,373



$



$

10,373



$

9,425



$



$

9,425



10.06

%


10.06

%


Hotel EBITDA

$

4,597



$



$

4,597



$

4,194



$



$

4,194



9.61

%


9.61

%


Hotel EBITDA margin

44.32

%




44.32

%


44.50

%




44.50

%


(0.18)

%


(0.18)

%


Selected Operating Information:

















RevPAR

$

183.90



$



$

183.90



$

171.35



$



$

171.35



7.32

%


7.32

%


Occupancy

92.14

%


%


92.14

%


87.65

%