Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Q4 2022 Earnings Presentation
44 slides from Braemar Hotels & Resorts's earnings presentation, Feb 23, 2023
Slide 1: Braemar Hotels & Resorts February 2023
BRAEMAR February 2023 HOTELS & RESORTS
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.
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
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 | February 2023 4
Slide 5: All Time High Industry Performance Continuing
All Time High Industry Performance Continuing
Slide 6: Industry RevPAR Exceeded 2019 in 2022
Industry RevPAR Exceeded 2019 in 2022 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
Slide 7: ADR Significantly Outpaced Inflation in 2021 & 2022
ADR Significantly Outpaced Inflation in 2021 & 2022 ADR & CPI as a % of 2021 180 170 160 Index = 100 on 1/1/21 150 140 130 120 110 100 ADR CPI Index Source: STR, 1/20/23; FRED, 2/16/23 Company Presentation | February 2023 7
Slide 8: Urban Hotels Have Fully Recovered from the Pandemic
Urban Hotels Have Fully Recovered from the Pandemic RevPAR as a % of 2019 140% 120% 113% 100% 106% 80% 60% 40% 20% 0% Resort Urban Source: CBRE Hotels Research, Kalibri Labs, Q4 2022, 2/2/2023 Data from 1/1/2020 – 12/31/2022 Company Presentation | February 2023 8
Slide 9: Optimal Portfolio Composition
Optimal Portfolio Composition Taking Advantage of Strategic Asset Class
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
Slide 11: Portfolio Resort Exposure Lifts Performance
Portfolio Resort Exposure Lifts Performance ADR Ramping Up(1) – Q4 2018 to Q4 2022 Occupancy Ramping Up(1) – Q4 2018 to Q4 2022 900 90% Pandemic 800 80% 700 70% 600 60% 500 50% 400 40% 300 30% 200 20% 100 10% - 0% Q4'18 Q4'19 Q4'20 Q4'21 Q4'22 Q4'18 Q4'19 Q4'20 Q4'21 Q4'22 Key: Resort Urban Average
Slide 12: Portfolio Resort Exposure Lifts Performance
Portfolio Resort Exposure Lifts Performance RevPAR(1) Ramping Up – Q4 2018 to Q4 2022 600 Key Observations 500 Urban properties are rapidly approaching 2019 RevPAR levels 400 300 Resort properties continue to show high resiliency 200 Average RevPAR sits well 100 above 2019 levels - Q4'18 Q4'19 Q4'20
Slide 13: Hotel EBITDA Rebounding Through Resorts
Hotel EBITDA Rebounding Through Resorts Pier House Resort & Spa (1) In thousands Company Presentation | February 2023 13
Slide 14: High Exposure to Luxury Hotels and Resorts
High Exposure to Luxury Hotels and Resorts Ritz-Carlton Drives Q4 TTM Hotel EBITDA(1) Luxury Hotels Drive Q4 TTM Hotel EBITDA(1) $105,000 Luxury Ritz-Carlton $180,000 $90,418 $169,180 $90,000 $160,000 $140,000 $75,000 $120,000 $60,000 $100,000 Independent $45,000 $80,000 $37,357 Marriott/ Upper Upsc
Slide 15: Recent Results & Developments
Recent Results & Developments Solid Q4 Results Signal Potential For Sharp Recovery
Slide 16: Continued RevPAR Strength in Q4
Continued RevPAR Strength in Q4 Comparable Hotel Operating 2022 Q4 2021 Q4 % Variance 2019 Q4 % Variance Results(1)(4) 2021 2019 ADR $469 $456 3% $335 40% Occupancy 64% 61% 3% 75% (11%) RevPAR $301 $278 8% $250 20% Total Hotel Revenue(2) $187,293 $169,808 10% $157,497 19% Hotel EBITDA(2) $52,206 $48
Slide 17: Strong Performance Continues in Q4 2022
Strong Performance Continues in Q4 2022 Quarter Highlights • Comparable RevPAR for all hotels increased 8.3% over the prior year quarter to $301. Comparable ADR increased 2.8% over the prior year quarter to $469 and Comparable Occupancy increased 5.4% over the prior year quarter to 64.2%. Compared t
Slide 18: BHR Acquisitions Performance
BHR Acquisitions Performance Yield on Cost 21.00% 17.9% 18.00% 17.5% 15.00% 14.4% 12.00% 12.3% NOI / Book Value 9.00% 6.8%-7.4% 6.00% 4.4% 3.00% 0.00% -3.00% Current Avg. Yield on Cost: 11% -6.00% Key West Pier House RC St Thomas RC Sarasota Bardessono PH Beaver Creek Hotel Yountville RC Lake Tahoe
Slide 19: Recent Acquisitions Performing Well
Recent Acquisitions Performing Well Mr. C Beverly Hills The Ritz-Carlton Reserve Dorado Beach The Four Seasons Scottsdale Beverly Hills, CA Dorado, PR Scottsdale, AZ Property Overview Property Overview Property Overview Acq Date 8/5/21 Acq Date 3/11/22 Acq Date 12/1/22 Price(1) $65.4M Price $193M Pr
Slide 20: Balance Sheet Strategy
Balance Sheet Strategy Maintain Liquidity, Monitor Leverage, Navigate Recovery
Slide 21: Current Liquidity Fuels Growth
Current Liquidity Fuels Growth CASH POSITION(1) CASH & CASH EQUIVALENTS $261.5M RESTRICTED CASH $54.2M DUE FROM 3RD PARTY MANAGERS $26.6M TOTAL CASH $342.3M POSITIVE YTD OPERATING CASH FLOW(2) ADJ. EBITDARE $172.4M PREFERRED DIVIDENDS ($21.5M) CAPEX ($49.1M) DEBT SERVICE(3) ($49.2M) CASH FLOW ~$52.6
Slide 22: 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 4/23 and increases flexibility in various economic environ
Slide 23: 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.
Slide 24: 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 | February 2023 24
Slide 25: Appendix
Appendix
Slide 26: Indebtedness
Indebtedness Company Presentation | February 2023 26
Slide 27: Indebtedness
Indebtedness Company Presentation | February 2023 27
Slide 28: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | February 2023 28
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 | February 2023 29
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 | February 2023 30
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 | February 2023 31
Slide 32: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | February 2023 32
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 | February 2023 33
Slide 34: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | February 2023 34
Slide 35: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | February 2023 35
Slide 36: 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 Note: 2019 comparable to 2022, used in 2019 Q4 Slide 16 Company Presentation | February 2023 36
Slide 37: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | February 2023 37
Slide 38: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | February 2023 38
Slide 39: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | February 2023 39
Slide 40: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | February 2023 40
Slide 41: 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 will no longer include the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For co
Slide 42: 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 will no longer include the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For co
Slide 43: 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 will no longer include the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For co
Slide 44: 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 will no longer include the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For co
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