Braemar Hotels & Resorts Inc. · NYSE:BHR

Braemar Hotels & Resorts — Q1 2023 Earnings Presentation

45 slides from Braemar Hotels & Resorts's earnings presentation, May 3, 2023

1. Slide 1: 1st Quarter 2023 Earnings Update

   1st Quarter 2023 Earnings Update

2. Slide 2: Forward Looking Statements and Non-GAAP Measures

   Forward Looking Statements and Non-GAAP Measures In keeping with the SEC's "Safe Harbor" guidelines, certain statements made during this presentation could be considered forward-looking and subject to certain risks and uncertainties that could cause results to differ materially from those projected.

3. Slide 3: Experienced Management Team

   Experienced Management Team RICHARD J. STOCKTON DERIC S. EUBANKS, CFA CHRISTOPHER C. NIXON Chief Executive Officer & Chief Financial Officer Executive Vice President & President Head of Asset Management  25 years of hospitality  22 years of hospitality  13 years of hospitality experience experien

4. Slide 4: BHR Positioned Ideally for Outperformance

   BHR Positioned Ideally for Outperformance All Time High Industry Performance Continuing Optimal Portfolio Composition Recent Results & Developments Balance Sheet Strategy Ritz-Carlton Sarasota Company Presentation | May 2023 4

5. Slide 5: All Time High Industry Performance Continuing

   All Time High Industry Performance Continuing

6. Slide 6: Industry Demand Exceeds 2019 in 2023

   Industry Demand Exceeds 2019 in 2023 U.S. KPIs, Indexed to 2019 Demand Index ADR Index RevPAR Index 140 140 140 124.6 124.9 120.3 119.8 120 120 115.3 120 113.4 111.6 107.4 107.9 104.8 100.5 100 97.8 100 100 95.3 88.0 83.2 80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 2021 2022 2023 2024 2025 2021 2022 2

7. Slide 7: ADR Index Significantly Outpaced Inflation in 2021-2023

   ADR Index Significantly Outpaced Inflation in 2021-2023 180 170 160 Index = 100 on 1/1/21 150 140 130 120 110 100 ADR Index CPI Index Source: STR, 4/18/23; FRED, 5/1/23 Company Presentation | May 2023 7

8. Slide 8: Urban Hotels Have Fully Recovered from the Pandemic

   Urban Hotels Have Fully Recovered from the Pandemic RevPAR as a % of 2019 140% 118% 120% 100% 103% 80% 60% 40% 20% 0% Resort Urban Source: CBRE Hotels State of the Union April 2023 Edition, 5/1/2023 Data from 1/1/2020 – 3/31/2023 Company Presentation | May 2023 8

9. Slide 9: Optimal Portfolio Composition

   Optimal Portfolio Composition Taking Advantage of Strategic Asset Class

10. Slide 10: High Quality Assets with High Barriers to Entry

    High Quality Assets with High Barriers to Entry Hotel Yountville Park Hyatt Beaver Creek Pier House Resort & Spa Bardessono Hilton La Jolla Torrey Pines The Four Seasons Scottsdale Yountville, CA Beaver Creek, CO Key West, FL Yountville, CA La Jolla, CA Scottsdale, AZ The Ritz-Carlton Lake Tahoe The

11. Slide 11: Urban Properties Drive Growth

    Urban Properties Drive Growth ADR(1) Ramping Up – Q1 2019 to Q1 2023 Occupancy(1) Ramping Up – Q1 2019 to Q1 2023 1,200 90% Pandemic 80% 1,000 59.8% 70% -10.6% -13.3% -15.8% 800 60% 50% 600 48.7% 40% 400 30% 8.9% 20% 200 10% - 0% Q1'19 Q1'20 Q1'21 Q1'22 Q1'23 Q1'19 Q1'20 Q1'21 Q1'22 Q1'23 Key: Resor

12. Slide 12: Urban Properties Drive Growth (cont’d)

    Urban Properties Drive Growth (cont’d) RevPAR(1) Ramping Up – Q1 2019 to Q1 2023 700 42.8% Key Observations 600 Urban properties 500 nearing full recovery 400 28.8% Resort performance 300 stabilizing 200 -8.3% Average RevPAR is well 100 above 2019 and 2022 levels - Q1'19 Q1'20 Q1'21 Q1'22 Q1'23 Key:

13. Slide 13: Hotel EBITDA Rebounding Through Resorts

    Hotel EBITDA Rebounding Through Resorts Pier House Resort & Spa (1) In thousands (2) Please refer to slides 29-36 for a reconciliation to the most directly comparable non-GAAP functional metric Company Presentation | May 2023 13

14. Slide 14: High Exposure to Luxury Hotels and Resorts

    High Exposure to Luxury Hotels and Resorts Ritz-Carlton Drives Q1 TTM Hotel EBITDA(1) Luxury Hotels Drive Q1 TTM Hotel EBITDA(1) $105,000 Luxury Ritz-Carlton $180,000 $167,416 $90,000 $85,602 $160,000 $140,000 $75,000 $120,000 $60,000 $100,000 Independent Marriott/ Upper Upscale $45,000 Hilton Autog

15. Slide 15: Recent Results & Developments

    Recent Results & Developments Solid Q1 Results Signal Potential For Steady Recovery

16. Slide 16: Continued RevPAR Strength in Q1

    Continued RevPAR Strength in Q1 Comparable Hotel Operating Results(1)(5) 2023 Q1 2022 Q1 % Variance 2022 ADR $569 $621 (8%) Occupancy 65% 55%(2) +10% RevPAR $369 $340 8% Total Hotel Revenue(3) $217,180 $196,713 10% Hotel EBITDA(3) $72,796 $66,155 10% Hotel EBITDA Margin 34% 34%(2) 0% COMPARABLE REVP

17. Slide 17: Occupancy & ADR Remain Resilient in Q1

    Occupancy & ADR Remain Resilient in Q1 HOTEL OCCUPANCY(1)(2) 100% 78.9% 80% 64.7% 67.2% 60% 51.9% 40% 30.3% 20% 0% 2019 2020 2021 2022 TTM Q1'23 HOTEL ADR(1)(2) $500 $482 $474 $458 $400 $333 $296 $300 $200 $100 $- 2019 2020 2021 2022 TTM Q1'23 (1) As reported in Earnings Releases: 2019 as reported o

18. Slide 18: Strong Performance Continues in Q1 2023

    Strong Performance Continues in Q1 2023 Quarter Highlights • Comparable RevPAR for all hotels increased 8.4% over the prior year quarter to $369. Comparable ADR decreased 8.5% over the prior year quarter to $569 and Comparable Occupancy increased 18.4% over the prior year quarter to 64.9%. • Compara

19. Slide 19: BHR Acquisitions Performance

    BHR Acquisitions Performance Yield on Cost 24.00% 21.00% 20.1% 18.8% 18.00% 15.00% 14.3% 13.4% NOI / Book Value 12.00% 9.00% 8.9%-9.0% 6.6%-7.3% 6.00% 3.00% 3.2% 0.00% Current Avg. Yield on Cost: 10.9% -3.00% -6.00% Key West Pier House RC St Thomas RC Sarasota Bardessono PH Beaver Creek Hotel Yountv

20. Slide 20: 2022 Acquisitions Performing Well

    2022 Acquisitions Performing Well The Four Seasons Scottsdale The Ritz-Carlton Reserve Dorado Beach Scottsdale, AZ Dorado, PR Property Overview Property Overview Acq Date 12/1/22 Acq Date 3/11/22 Price(1) $250M Price $193M Price / Key $1.2M Price / Key(2) $1.8M TTM EBITDA Multiple 11.1x TTM EBITDA M

21. Slide 21: Balance Sheet Strategy

    Balance Sheet Strategy Maintain Liquidity, Monitor Leverage, Navigate Recovery

22. Slide 22: Current Liquidity Fuels Growth

    Current Liquidity Fuels Growth CASH POSITION(1) CASH & CASH EQUIVALENTS $281.5M RESTRICTED CASH $63.1M DUE FROM 3RD PARTY MANAGERS $19.1M TOTAL CASH $363.7M POSITIVE YTD OPERATING CASH FLOW(2) ADJ. EBITDARE $66.1M PREFERRED DIVIDENDS ($10.4M) CAPEX ($18.7M) DEBT SERVICE(3) ($22.1M) CASH FLOW ~$14.9M

23. Slide 23: Conservative Leverage Strategy

    Conservative Leverage Strategy Overview • Delevering to 35% Net Debt to Gross Assets • Hold 10% of Gross Debt Balance as liquidity on the balance sheet • Floating-rate debt provides a natural hedge to hotel cash flows NEXT HARD DEBT MATURITY 8/23 and increases flexibility in various economic environ

24. Slide 24: Hedged Against the Market

    Hedged Against the Market Interest Rate Caps Protect Against Rising Rates Overview Summary of Positions(2) • Braemar currently holds $960.5M in interest rate Effective Expiration caps with strikes ranging from 2.0% - 4.5% Strike Rate $ Amount Date Date • The caps range in agreement end date, with 2.

25. Slide 25: BHR Positioned Ideally for Outperformance

    BHR Positioned Ideally for Outperformance All Time High Industry Performance Continuing Optimal Portfolio Composition Recent Results & Developments Balance Sheet Strategy Ritz-Carlton Sarasota Company Presentation | May 2023 25

26. Slide 26: Appendix

    Appendix

27. Slide 27: Indebtedness

    Indebtedness Company Presentation | May 2023 27

28. Slide 28: Indebtedness

    Indebtedness Company Presentation | May 2023 28

29. Slide 29: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel

    Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | May 2023 29

30. Slide 30: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel

    Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | May 2023 30

31. Slide 31: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel

    Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | May 2023 31

32. Slide 32: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel

    Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | May 2023 32

33. Slide 33: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel

    Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | May 2023 33

34. Slide 34: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel

    Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | May 2023 34

35. Slide 35: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA

    Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | May 2023 35

36. Slide 36: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA

    Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | May 2023 36

37. Slide 37: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA

    Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | May 2023 37

38. Slide 38: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA

    Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Note: As reported, used in Comparable Hotel EBITDA Slide 16 Company Presentation | May 2023 38

39. Slide 39: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre

    Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre (1) Incentive fee adjustment represents the true-up for the actual 2022 incentive fee Company Presentation | May 2023 39

40. Slide 40: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre

    Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | May 2023 40

41. Slide 41: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre

    Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | May 2023 41

42. Slide 42: Reconciliation of Net Income (Loss) to Adjusted FFO Q1

    Reconciliation of Net Income (Loss) to Adjusted FFO Q1 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar

43. Slide 43: Reconciliation of Net Income (Loss) to Adjusted FFO Q4

    Reconciliation of Net Income (Loss) to Adjusted FFO Q4 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar

44. Slide 44: Reconciliation of Net Income (Loss) to Adjusted FFO Q3

    Reconciliation of Net Income (Loss) to Adjusted FFO Q3 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar

45. Slide 45: Reconciliation of Net Income (Loss) to Adjusted FFO Q2

    Reconciliation of Net Income (Loss) to Adjusted FFO Q2 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar

Braemar Hotels & Resorts — Q1 2023 Earnings Presentation on 6ix