Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Q2 2023 Earnings Presentation
45 slides from Braemar Hotels & Resorts's earnings presentation, Aug 2, 2023
Slide 1: 2nd Quarter 2023 Earnings Update
2nd Quarter 2023 Earnings Update
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: Company Fact Sheet
Company Fact Sheet Since inception in 2013, we have significantly improved Gross Asset Value and EBITDA for our iconic and irreplaceable portfolio $294.3M NYSE: $1.86B EQUITY MARKET CAP(1) BHR ENTERPRISE VALUE(1) HIGHEST RevPAR LODGING REIT Total Assets(2) Number of Hotels TTM Total Hotel Rev (2)(3)
Slide 5: BHR Positioned Ideally for Outperformance
BHR Positioned Ideally for Outperformance All Time High Industry Performance Continuing Optimal Portfolio Composition Recent Results & Developments Liquidity & Liability Management The Notary Hotel Company Presentation | August 2023 5
Slide 6: All Time High Industry Performance Continuing
Ritz-Carlton Reserve Dorado Beach All Time High Industry Performance Continuing
Slide 7: Industry RevPAR Continues to Exceed 2019
Industry RevPAR Continues to Exceed 2019 U.S. KPIs, Indexed to 2019 Occupancy Index ADR Index RevPAR Index 140 140 140 122.7 118.5 119.5 120 120 120 115.0 113.5 107.9 100 97.0 97.4 95.1 100 94.6 100 87.3 82.6 80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 2021 2022 2023 2024F 2021 2022 2023 2024F 2021 20
Slide 8: Nominal ADR & RevPAR at All-Time Highs; Nearly Fully Recovered on Real Bases
Nominal ADR & RevPAR at All-Time Highs; Nearly Fully Recovered on Real Bases Hilton Torrey Pines The Clancy *preliminary data Source: STR Company Presentation | August 2023 8
Slide 9: 2024 RevPAR Forecast
2024 RevPAR Forecast 2024 Forecasted Growth YoY 8.00% 7.39% 6.00% 4.15% 3.69% 4.00% 3.57% 3.04% 2.84% 2.86% 2.56% 2.60% 2.00% 1.70% 1.54% 0.86% 0.59% 0.73% 0.13% 0.00% -0.23% -0.17% -1.09% -2.00% Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Source: Lodging Analytics Research & Consul
Slide 10: Optimal Portfolio Composition
Ritz-Carlton St. Thomas Optimal Portfolio Composition Taking Advantage of Strategic Asset Class
Slide 11: High Quality Assets with High Barriers to Entry
High Quality Assets with High Barriers to Entry Properties Resort Hotel Q2’ 2023 TTM EBITDA(2) Ritz-Carlton Sarasota $25,023 Ritz-Carlton St. Thomas $24,970 Four Seasons Scottsdale $21,692 Ritz-Carlton Reserve Dorado Beach $20,040 Hilton Torrey Pines $17,204 Pier House $15,925 Park Hyatt Beaver Cree
Slide 12: Urban Properties Recovery Continues
Urban Properties Recovery Continues ADR(1) Up – Q2 2019 to Q2 2023 Occupancy(1) Stabilizing – Q2 2019 to Q2 2023 800 100% Pandemic 90% 700 62.6% 80% -11.4% 600 70% -9.4% 500 -4.8% 60% 36.8% 400 50% 40% 300 5.8% 30% 200 20% 100 10% - 0% Q2'19 Q2'20 Q2'21 Q2'22 Q2'23 Q2'19 Q2'20 Q2'21 Q2'22 Q2'23 Key:
Slide 13: Urban Properties Drive Growth
Urban Properties Drive Growth RevPAR(1) Up – Q2 2019 to Q2 2023 600 Key Observations 500 Urban properties 54.9% nearing full recovery 400 300 23.9% Resort properties significantly up versus 2019 -6.3% 200 Average RevPAR is well 100 above 2019 levels - Q2'19 Q2'20 Q2'21 Q2'22 Q2'23 Key: Resort Urban
Slide 14: High Exposure to Luxury Hotels and Resorts
High Exposure to Luxury Hotels and Resorts Ritz-Carlton Drives Q2 TTM Hotel EBITDA(1) Luxury Hotels Drive Q2 TTM Hotel EBITDA(1) $105,000 $180,000 Luxury Ritz-Carlton $155,401 $90,000 $80,937 $160,000 $140,000 $75,000 $120,000 $60,000 Independent $100,000 Upper Hilton $31,759 Marriott/ Upscale $45,0
Slide 15: Recent Results & Developments
Park Hyatt Beaver Creek Recent Results & Developments Solid Q2 Results Signal Potential For Steady Recovery
Slide 16: Hotel EBITDA Rebounding Through Resorts
Hotel EBITDA Rebounding Through Resorts Pier House Resort & Spa (1) In thousands (2) Please refer to slides 28-38 for a reconciliation to the most directly comparable non-GAAP functional metric Company Presentation | August 2023 16
Slide 17: Difficult YoY Comparisons Shape Q2 Results
Difficult YoY Comparisons Shape Q2 Results Comparable Hotel Operating Results(1)(5) 2023 Q2 2022 Q2 % Variance 2022 ADR $436 $460 (5%) Occupancy 71% 70% 1%(2) RevPAR $309 $323 (4%) Total Hotel Revenue(3) $187,905 $192,997 (3%) Hotel EBITDA(3) $53,660 $63,470 (16%) Hotel EBITDA Margin 29% 33% (4%)(2)
Slide 18: TTM Occupancy & ADR Remain Resilient
TTM Occupancy & ADR Remain Resilient HOTEL OCCUPANCY(1)(2) 100% 78.9% 80% 64.7% 67.3% 60% 51.9% 40% 30.3% 20% 0% 2019 2020 2021 2022 TTM Q2'23 HOTEL ADR(1)(2) $500 $482 $468 $458 $400 $333 $296 $300 Mr. C Beverly Hills $200 $100 $- 2019 2020 2021 2022 TTM Q2'23 (1) As reported in Earnings Releases:
Slide 19: ADR Decrease Impacts Metrics
ADR Decrease Impacts Metrics Quarter Highlights • Comparable RevPAR for all hotels decreased 4.2% over the prior year quarter to $309. Comparable ADR decreased 5.2% over the prior year quarter to $436 and Comparable Occupancy increased 1.0% over the prior year quarter to 70.9%. • Comparable Hotel EB
Slide 20: Acquisitions Since Inception Performing Well
Acquisitions Since Inception Performing Well TTM TTM Property Acq Date Price Price / Key EBITDA Yield on Multiple Cost Sofitel Chicago Magnificent Mile 2/24/2014 $153.0M $369K 20.8x 5.0% Key West Pier House 3/3/2014 $92.7M $653K 5.8x 17.8% Bardessono 7/9/2015 $85.0M $1.3M 11.8x 12.2% Ritz-Carlton St
Slide 21: Liquidity & Liability Management
Hotel Yountville Liquidity & Liability Management Maintain Liquidity, Monitor Leverage, Navigate Recovery
Slide 22: Ample Liquidity to Cover Dividends
Ample Liquidity to Cover Dividends LIQUIDITY POSITION(1) CASH & CASH EQUIVALENTS $128.0M RESTRICTED CASH $63.4M DUE FROM 3RD PARTY MANAGERS $15.4M REVOLVER CAPACITY (2) $4.0M TOTAL CASH $210.8M POSITIVE YTD OPERATING CASH FLOW(3) ADJ. EBITDARE $112.3M PREFERRED DIVIDENDS ($21.2M) CAPEX ($36.2M) DEBT
Slide 23: New Corporate Term Loan & Revolver
New Corporate Term Loan & Revolver BAML Secured Credit Facility • $150mm Term Loan and $50mm Pro Forma Maturity Schedule Revolver $500.0 • 3-year initial maturity with a 1-year extension $400.0 • Availability test: 55% LTV and 1.75x DSCR on borrowing base properties $300.0 $195.0 (in millions) • Fin
Slide 24: BHR Positioned Ideally for Outperformance
BHR Positioned Ideally for Outperformance All Time High Industry Performance Continuing Optimal Portfolio Composition Recent Results & Developments Liquidity & Liability Management Four Seasons Scottsdale Company Presentation | August 2023 24
Slide 25: Appendix
Ritz-Carlton Lake Tahoe Appendix
Slide 26: Indebtedness
Indebtedness Company Presentation | August 2023 26
Slide 27: Indebtedness
Indebtedness Company Presentation | August 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 | August 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 | August 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 | August 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 | August 2023 31
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 | August 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 | August 2023 33
Slide 34: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | August 2023 34
Slide 35: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | August 2023 35
Slide 36: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | August 2023 36
Slide 37: 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 17 Company Presentation | August 2023 37
Slide 38: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | August 2023 38
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 | August 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 | August 2023 40
Slide 41: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | August 2023 41
Slide 42: 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
Slide 43: 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
Slide 44: 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
Slide 45: 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
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