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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025
OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________
Commission file number: 001-35972
BRAEMAR HOTELS & RESORTS INC.
(Exact name of registrant as specified in its charter)

Maryland |  | 46-2488594
(State or other jurisdiction of incorporation or organization) |  | (IRS employer identification number)
14185 Dallas Parkway |  |
Suite 1200 |  |
Dallas |  |
Texas |  | 75254
(Address of principal executive offices) |  | (Zip code)

(972) 490-9600
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “small reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☐ | Accelerated filer | ☑
Non-accelerated filer | ☐ | Smaller reporting company | ☐
|  | Emerging growth company | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common Stock |  | BHR |  | New York Stock Exchange
Preferred Stock, Series B |  | BHR-PB |  | New York Stock Exchange
Preferred Stock, Series D |  | BHR-PD |  | New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $0.01 par value per share |  | 67,046,523
(Class) |  | Outstanding at May 6, 2025

BRAEMAR HOTELS & RESORTS INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2025
TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION |
ITEM 1. FINANCIAL STATEMENTS (unaudited) |
Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 | 2
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 | 3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2025 and 2024 | 4
Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2025 and 2024 | 5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 | 7
Notes to Condensed Consolidated Financial Statements | 9
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 29
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 44
ITEM 4. CONTROLS AND PROCEDURES | 44
PART II. OTHER INFORMATION |
ITEM 1. LEGAL PROCEEDINGS | 45
ITEM 1A. RISK FACTORS | 46
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 46
ITEM 3. DEFAULTS UPON SENIOR SECURITIES | 46
ITEM 4. MINE SAFETY DISCLOSURES | 46
ITEM 5. OTHER INFORMATION | 46
ITEM 6. EXHIBITS | 47
SIGNATURES | 48

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (unaudited)
BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share amounts)

|  | March 31, 2025 |  | December 31, 2024
ASSETS |  |  |  |
Investments in hotel properties, gross |  | $ | 2,257,665 |  |  | $ | 2,252,574 |
Accumulated depreciation |  | (487,720) |  |  | (473,888) |
Investments in hotel properties, net |  | 1,769,945 |  |  | 1,778,686 |
Cash and cash equivalents |  | 81,689 |  |  | 135,465 |
Restricted cash |  | 54,546 |  |  | 49,592 |
Investment in securities (amortized cost of $42,279 and $42,279, respectively) |  | 42,394 |  |  | 41,535 |
Accounts receivable, net of allowance of $299 and $459, respectively |  | 39,899 |  |  | 31,754 |
Inventories |  | 4,662 |  |  | 4,664 |
Note receivable |  | 8,434 |  |  | 8,283 |
Prepaid expenses |  | 10,034 |  |  | 5,116 |
Deferred costs, net |  | 75 |  |  | 75 |
Investment in unconsolidated entity |  | 145 |  |  | 145 |
Derivative assets |  | 478 |  |  | 356 |
Operating lease right-of-use assets |  | 34,688 |  |  | 34,852 |
Other assets |  | 22,548 |  |  | 19,538 |
Intangible assets, net |  | 3,030 |  |  | 3,125 |
Due from third-party hotel managers |  | 25,462 |  |  | 22,873 |
Total assets |  | $ | 2,098,029 |  |  | $ | 2,136,059 |
LIABILITIES AND EQUITY |  |  |  |
Liabilities: |  |  |  |
Indebtedness, net |  | $ | 1,202,668 |  |  | $ | 1,210,018 |
Accounts payable and accrued expenses |  | 136,090 |  |  | 143,566 |
Dividends and distributions payable |  | 8,692 |  |  | 9,255 |
Due to Ashford Inc. |  | 3,511 |  |  | 4,267 |
Due to related parties, net |  | 1,700 |  |  | 1,055 |
Due to third-party hotel managers |  | 2,389 |  |  | 1,476 |
Operating lease liabilities |  | 19,992 |  |  | 19,984 |
Other liabilities |  | 27,290 |  |  | 24,268 |
Total liabilities |  | 1,402,332 |  |  | 1,413,889 |
Commitments and contingencies (note 15) |  |  |  |
5.50% Series B cumulative convertible preferred stock, $0.01 par value, 3,078,017 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively |  | 65,426 |  |  | 65,426 |
Series E redeemable preferred stock, $0.01 par value, 13,909,632 and 14,910,521 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively |  | 331,875 |  |  | 352,502 |
Series M redeemable preferred stock, $0.01 par value, 1,459,040 and 1,476,621 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively |  | 36,489 |  |  | 36,916 |
Redeemable noncontrolling interests in operating partnership |  | 26,430 |  |  | 29,964 |
Equity: |  |  |  |
Preferred stock, $0.01 par value, 80,000,000 shares authorized: |  |  |  |
8.25% Series D cumulative preferred stock, 1,600,000 shares issued and outstanding at March 31, 2025 and December 31, 2024 |  | 16 |  |  | 16 |
Common stock, $0.01 par value, 250,000,000 shares authorized, 67,046,523 and 66,607,823 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively |  | 669 |  |  | 665 |
Additional paid-in capital |  | 720,703 |  |  | 718,536 |
Accumulated other comprehensive income (loss) |  | 95 |  |  | (684) |
Accumulated deficit |  | (482,575) |  |  | (477,804) |
Total stockholders’ equity of the Company |  | 238,908 |  |  | 240,729 |
Noncontrolling interest in consolidated entities |  | (3,431) |  |  | (3,367) |
Total equity |  | 235,477 |  |  | 237,362 |
Total liabilities and equity |  | $ | 2,098,029 |  |  | $ | 2,136,059 |

See Notes to Condensed Consolidated Financial Statements.
2

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
REVENUE |  |  |  |  |  |  |  |  |
Rooms |  |  |  |  | $ | 136,092 |  |  | $ | 138,552 |  |  |
Food and beverage |  |  |  |  | 51,788 |  |  | 53,547 |  |  |
Other |  |  |  |  | 27,940 |  |  | 26,980 |  |  |
Total hotel revenue |  |  |  |  | 215,820 |  |  | 219,079 |  |  |
EXPENSES |  |  |  |  |  |  |  |  |
Hotel operating expenses: |  |  |  |  |  |  |  |  |
Rooms |  |  |  |  | 28,219 |  |  | 28,264 |  |  |
Food and beverage |  |  |  |  | 40,210 |  |  | 40,717 |  |  |
Other expenses |  |  |  |  | 60,376 |  |  | 60,076 |  |  |
Management fees |  |  |  |  | 6,910 |  |  | 6,976 |  |  |
Total hotel operating expenses |  |  |  |  | 135,715 |  |  | 136,033 |  |  |
Property taxes, insurance and other |  |  |  |  | 10,465 |  |  | 10,685 |  |  |
Depreciation and amortization |  |  |  |  | 23,395 |  |  | 25,420 |  |  |
Advisory services fee |  |  |  |  | 6,611 |  |  | 6,700 |  |  |
Corporate general and administrative |  |  |  |  | 2,894 |  |  | (2,226) |  |  |
Total operating expenses |  |  |  |  | 179,080 |  |  | 176,612 |  |  |
OPERATING INCOME (LOSS) |  |  |  |  | 36,740 |  |  | 42,467 |  |  |
Equity in earnings (loss) of unconsolidated entity |  |  |  |  | — |  |  | (49) |  |  |
Interest income |  |  |  |  | 1,888 |  |  | 796 |  |  |
Interest expense and amortization of discounts and loan costs |  |  |  |  | (24,827) |  |  | (26,491) |  |  |
Write-off of loan costs and exit fees |  |  |  |  | (1,464) |  |  | (721) |  |  |
Realized and unrealized gain (loss) on derivatives |  |  |  |  | (198) |  |  | 932 |  |  |
INCOME (LOSS) BEFORE INCOME TAXES |  |  |  |  | 12,139 |  |  | 16,934 |  |  |
Income tax (expense) benefit |  |  |  |  | (1,467) |  |  | (1,452) |  |  |
NET INCOME (LOSS) |  |  |  |  | 10,672 |  |  | 15,482 |  |  |
(Income) loss attributable to noncontrolling interest in consolidated entities |  |  |  |  | 64 |  |  | 743 |  |  |
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership |  |  |  |  | 262 |  |  | (296) |  |  |
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY |  |  |  |  | 10,998 |  |  | 15,929 |  |  |
Preferred dividends |  |  |  |  | (9,269) |  |  | (10,407) |  |  |
Deemed dividends on preferred stock |  |  |  |  | (4,276) |  |  | (1,998) |  |  |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS |  |  |  |  | $ | (2,547) |  |  | $ | 3,524 |  |  |
INCOME (LOSS) PER SHARE - BASIC: |  |  |  |  |  |  |  |  |
Net income (loss) attributable to common stockholders |  |  |  |  | $ | (0.04) |  |  | $ | 0.05 |  |  |
Weighted average common shares outstanding – basic |  |  |  |  | 66,744 |  |  | 66,455 |  |  |
INCOME (LOSS) PER SHARE - DILUTED: |  |  |  |  |  |  |  |  |
Net income (loss) attributable to common stockholders |  |  |  |  | $ | (0.04) |  |  | $ | 0.05 |  |  |
Weighted average common shares outstanding – diluted |  |  |  |  | 66,744 |  |  | 268,516 |  |  |

See Notes to Condensed Consolidated Financial Statements.
3

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited, in thousands)

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
NET INCOME (LOSS) |  |  |  |  | $ | 10,672 |  |  | $ | 15,482 |  |  |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: |  |  |  |  |  |  |  |  |
Unrealized gain (loss) on investment in securities |  |  |  |  | 859 |  |  | — |  |  |
Total other comprehensive income (loss) |  |  |  |  | 859 |  |  | — |  |  |
TOTAL COMPREHENSIVE INCOME (LOSS) |  |  |  |  | 11,531 |  |  | 15,482 |  |  |
Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities |  |  |  |  | 64 |  |  | 743 |  |  |
Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership |  |  |  |  | 182 |  |  | (296) |  |  |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY |  |  |  |  | $ | 11,777 |  |  | $ | 15,929 |  |  |

See Notes to Condensed Consolidated Financial Statements.
4

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(unaudited, in thousands except per share amounts)

| 8.25% Series D Cumulative Preferred Stock |  | Common Stock |  | Additional Paid-in Capital |  | Accumulated Deficit |  | Accumulated Other Comprehensive Income/(loss) |  | Noncontrolling Interest in Consolidated Entities |  | Total |  | 5.50% Series B Cumulative Convertible Preferred Stock |  | Series E Redeemable Preferred Stock |  | Series M Redeemable Preferred Stock |  | Redeemable Noncontrolling Interests in Operating Partnership |  |
| Shares |  | Amount |  | Shares |  | Amount |  |  |  |  |  | Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount |  |  |
Balance at December 31, 2024 | 1,600 |  |  | $ | 16 |  |  | 66,608 |  |  | $ | 665 |  |  | $ | 718,536 |  |  | $ | (477,804) |  |  | $ | (684) |  |  | $ | (3,367) |  |  | $ | 237,362 |  |  | 3,078 |  |  | $ | 65,426 |  |  | 14,911 |  |  | $ | 352,502 |  |  | 1,477 |  |  | $ | 36,916 |  |  | $ | 29,964 |  |  |
Purchase of common stock | — |  |  | — |  |  | (19) |  |  | — |  |  | (51) |  |  | — |  |  | — |  |  | — |  |  | (51) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Equity-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | (33) |  |  | — |  |  | — |  |  | — |  |  | (33) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (15) |  |  |
Issuance of preferred stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 32 |  |  | 798 |  |  | 1 |  |  | 39 |  |  | — |  |  |
Issuance of restricted shares/units | — |  |  | — |  |  | 1 |  |  | — |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 498 |  |  |
Dividends declared – common stock ($0.05 /share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,372) |  |  | — |  |  | — |  |  | (3,372) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Dividends declared – preferred stock - Series B ($0.34/share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,058) |  |  | — |  |  | — |  |  | (1,058) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Dividends declared – preferred stock - Series D ($0.52/share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (825) |  |  | — |  |  | — |  |  | (825) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Dividends declared – preferred stock - Series E ($0.47/share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (6,616) |  |  | — |  |  | — |  |  | (6,616) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Dividends declared – preferred stock - Series M ($0.53/share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (770) |  |  | — |  |  | — |  |  | (770) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Distributions to noncontrolling interests | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (344) |  |  |
Redemption/conversion of operating partnership units | — |  |  | — |  |  | 457 |  |  | 4 |  |  | 2,247 |  |  | — |  |  | — |  |  | — |  |  | 2,251 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,251) |  |  |
Redemption of operating partnership units for cash | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (92) |  |  |
Net income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 10,998 |  |  | — |  |  | (64) |  |  | 10,934 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (262) |  |  |
Redemption of preferred stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,033) |  |  | (25,701) |  |  | (19) |  |  | (466) |  |  | — |  |  |
Unrealized gain (loss) on investment in securities | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 779 |  |  | — |  |  | 779 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 80 |  |  |
Redemption value adjustment – preferred stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (4,276) |  |  | — |  |  | — |  |  | (4,276) |  |  | — |  |  | — |  |  | — |  |  | 4,276 |  |  | — |  |  | — |  |  | — |  |  |
Redemption value adjustment | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,148 |  |  | — |  |  | — |  |  | 1,148 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,148) |  |  |
Balance at March 31, 2025 | 1,600 |  |  | $ | 16 |  |  | 67,047 |  |  | $ | 669 |  |  | $ | 720,703 |  |  | $ | (482,575) |  |  | $ | 95 |  |  | $ | (3,431) |  |  | $ | 235,477 |  |  | 3,078 |  |  | $ | 65,426 |  |  | 13,910 |  |  | $ | 331,875 |  |  | 1,459 |  |  | $ | 36,489 |  |  | $ | 26,430 |  |  |

5

| 8.25% Series D Cumulative Preferred Stock |  | Common Stock |  | Additional Paid-in Capital |  | Accumulated Deficit |  | Noncontrolling Interest in Consolidated Entities |  |  |  |  |  | Total |  | 5.50% Series B Cumulative Convertible Preferred Stock |  | Series E Redeemable Preferred Stock |  | Series M Redeemable Preferred Stock |  | Redeemable Noncontrolling Interests in Operating Partnership
| Shares |  | Amount |  | Shares |  | Amount |  |  |  |  |  |  | Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount |
Balance at December 31, 2023 | 1,600 |  |  | $ | 16 |  |  | 66,636 |  |  | $ | 666 |  |  | $ | 718,498 |  |  | $ | (412,199) |  |  | $ | (8,934) |  |  |  |  |  |  | $ | 298,047 |  |  | 3,078 |  |  | $ | 65,426 |  |  | 16,316 |  |  | $ | 377,035 |  |  | 1,833 |  |  | $ | 45,623 |  |  | $ | 32,395 |
Purchase of common stock | — |  |  | — |  |  | (170) |  |  | (2) |  |  | (367) |  |  | — |  |  | — |  |  |  |  |  |  | (369) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Equity-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 472 |  |  | — |  |  | — |  |  |  |  |  |  | 472 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 655 |
Issuance of preferred stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | — |  |  | — |  |  | — |  |  | 33 |  |  | 828 |  |  | 2 |  |  | 37 |  |  | — |
Issuance of restricted shares/units | — |  |  | — |  |  | 12 |  |  | — |  |  | 3 |  |  | — |  |  | — |  |  |  |  |  |  | 3 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 32 |
Forfeiture of restricted common shares | — |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Dividends declared – common stock - ($0.05/share) | — |  |  |  |  | — |  |  | — |  |  | — |  |  | (3,345) |  |  | — |  |  |  |  |  |  | (3,345) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Dividends declared – preferred stock - Series B ($0.34/share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,058) |  |  | — |  |  |  |  |  |  | (1,058) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Dividends declared – preferred stock-Series D ($0.52/share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (825) |  |  | — |  |  |  |  |  |  | (825) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Dividends declared – preferred stock - Series E ($0.47/share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (7,600) |  |  | — |  |  |  |  |  |  | (7,600) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Dividends declared – preferred stock - Series M ($0.52/share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (924) |  |  | — |  |  |  |  |  |  | (924) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Distributions to noncontrolling interests | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (366) |
Net income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 15,929 |  |  | (743) |  |  |  |  |  |  | 15,186 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 296 |
Redemption of preferred stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | — |  |  | — |  |  | — |  |  | (186) |  |  | (4,403) |  |  | (87) |  |  | (2,163) |  |  | — |
Redemption value adjustment – preferred stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,998) |  |  | — |  |  |  |  |  |  | (1,998) |  |  | — |  |  | — |  |  | — |  |  | 1,801 |  |  | — |  |  | 197 |  |  | — |
Redemption value adjustment | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7 |  |  | — |  |  |  |  |  |  | 7 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (7) |
Balance at March 31, 2024 | 1,600 |  |  | $ | 16 |  |  | 66,477 |  |  | $ | 664 |  |  | 718,606 |  |  | $ | (412,013) |  |  | $ | (9,677) |  |  |  |  |  |  | $ | 297,596 |  |  | 3,078 |  |  | $ | 65,426 |  |  | 16,163 |  |  | $ | 375,261 |  |  | 1,748 |  |  | $ | 43,694 |  |  | $ | 33,005 |

See Notes to Condensed Consolidated Financial Statements.
6

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)

| Three Months Ended March 31,
| 2025 |  | 2024 |  |
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  |
Net income (loss) | $ | 10,672 |  |  | $ | 15,482 |  |  |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |  |  |  |
Depreciation and amortization | 23,395 |  |  | 25,420 |  |  |
Recognition of deferred income | (174) |  |  | — |  |  |
Equity-based compensation | (48) |  |  | 1,127 |  |  |
Bad debt expense | (15) |  |  | 248 |  |  |
Amortization of loan costs, discounts and capitalized default interest | 2,293 |  |  | 1,404 |  |  |
Write-off of loan costs and exit fees | 1,464 |  |  | 721 |  |  |
Amortization of intangibles | 107 |  |  | 119 |  |  |
Amortization of non-refundable membership initiation fees | (623) |  |  | (496) |  |  |
Interest expense accretion on refundable membership club deposits | 151 |  |  | 165 |  |  |
Realized and unrealized (gain) loss on derivatives | 198 |  |  | (932) |  |  |
Non-cash interest income | (151) |  |  | — |  |  |
Equity in (earnings) loss of unconsolidated entity | — |  |  | 49 |  |  |
Deferred income tax expense (benefit) | (13) |  |  | 5 |  |  |
Changes in operating assets and liabilities, exclusive of acquisitions, disposition of assets and hotel property: |  |  |  |  |
Accounts receivable and inventories | (9,285) |  |  | (2,194) |  |  |
Prepaid expenses and other assets | (8,003) |  |  | (2,327) |  |  |
Accounts payable and accrued expenses | (6,518) |  |  | 564 |  |  |
Operating lease right-of-use assets | 57 |  |  | 147 |  |  |
Due to/from related parties, net | 645 |  |  | 163 |  |  |
Due to/from third-party hotel managers | (1,676) |  |  | (5,653) |  |  |
Due to/from Ashford Inc. | (1,006) |  |  | 1,638 |  |  |
Operating lease liabilities | 8 |  |  | (81) |  |  |
Other liabilities | 3,668 |  |  | 470 |  |  |
Net cash provided by (used in) operating activities | 15,146 |  |  | 36,039 |  |  |
CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  |
Proceeds from property insurance | 1,101 |  |  | 504 |  |  |
Improvements and additions to hotel properties | (15,305) |  |  | (23,332) |  |  |
Net cash provided by (used in) investing activities | (14,204) |  |  | (22,828) |  |  |
CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  |
Borrowings on indebtedness | 363,000 |  |  | 62,000 |  |  |
Repayments of indebtedness | (365,180) |  |  | — |  |  |
Payments of loan costs and exit fees | (8,852) |  |  | (3,244) |  |  |
Payments for derivatives | (508) |  |  | (991) |  |  |
Proceeds from derivatives | 244 |  |  | 1,633 |  |  |
Payments for dividends and distributions | (12,209) |  |  | (13,123) |  |  |
Redemption of operating partnership units | (92) |  |  | — |  |  |
Redemption of preferred stock | (26,167) |  |  | (6,566) |  |  |
Net cash provided by (used in) financing activities | (49,764) |  |  | 39,709 |  |  |
Net change in cash, cash equivalents and restricted cash | (48,822) |  |  | 52,920 |  |  |
Cash, cash equivalents and restricted cash at beginning of period | 185,057 |  |  | 166,503 |  |  |
Cash, cash equivalents and restricted cash at end of period | $ | 136,235 |  |  | $ | 219,423 |  |  |

7

| Three Months Ended March 31,
| 2025 |  | 2024 |  |
SUPPLEMENTAL CASH FLOW INFORMATION |  |  |  |  |
Interest paid | $ | 21,960 |  |  | $ | 22,747 |  |  |
Income taxes paid (refunded) | (120) |  |  | (183) |  |  |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |  |  |  |  |
Dividends and distributions declared but not paid | $ | 8,692 |  |  | $ | 9,253 |  |  |
Common stock purchases accrued but not paid | 51 |  |  | 369 |  |  |
Capital expenditures accrued but not paid | 8,825 |  |  | 15,810 |  |  |
Non-cash preferred stock dividends | 837 |  |  | 865 |  |  |
Unsettled proceeds from derivatives | 57 |  |  | 399 |  |  |
Non-cash common stock/unit dividends | 502 |  |  | 35 |  |  |
Non-cash redemption of common units | 2,251 |  |  | — |  |  |
SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH |  |  |  |  |
Cash and cash equivalents at beginning of period | $ | 135,465 |  |  | $ | 85,599 |  |  |
Restricted cash at beginning of period | 49,592 |  |  | 80,904 |  |  |
Cash, cash equivalents and restricted cash at beginning of period | $ | 185,057 |  |  | $ | 166,503 |  |  |
Cash and cash equivalents at end of period | $ | 81,689 |  |  | $ | 137,051 |  |  |
Restricted cash at end of period | 54,546 |  |  | 82,372 |  |  |
Cash, cash equivalents and restricted cash at end of period | $ | 136,235 |  |  | $ | 219,423 |  |  |

See Notes to Condensed Consolidated Financial Statements.
8

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Organization and Description of Business
Braemar Hotels & Resorts Inc., together with its subsidiaries (“Braemar”), is a Maryland corporation that invests primarily in high revenue per available room (“RevPAR”) luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by STR, LLC. Braemar has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Braemar conducts its business and owns substantially all of its assets through its operating partnership, Braemar Hospitality Limited Partnership (“Braemar OP”). Terms such as the “Company,” “we,” “us” or “our” refer to Braemar Hotels & Resorts Inc. and, as the context may require, all entities included in its condensed consolidated financial statements.
We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC” or the “Advisor”) through an advisory agreement. Ashford LLC is a subsidiary of Ashford Inc. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.
We do not operate any of our hotel properties directly; instead, we contractually engage hotel management companies to operate them for us under management contracts. Remington Lodging & Hospitality, LLC (“Remington Hospitality”), a subsidiary of Ashford Inc., manages four of our 15 hotel properties as of March 31, 2025. Third-party management companies manage the remaining hotel properties.
Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to, design and construction services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers compensation and business automobile claims, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and cash management services.
The accompanying condensed consolidated financial statements include the accounts of wholly-owned and majority-owned subsidiaries of Braemar OP that as of March 31, 2025, own 15 hotel properties in seven states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands (“USVI”). The portfolio includes 14 wholly-owned hotel properties and one hotel property that is owned through a partnership in which Braemar OP has a controlling interest. These hotel properties represent 3,807 total rooms, or 3,667 net rooms, excluding those attributable to our partner. As a REIT, Braemar is required to comply with limitations imposed by the Code related to operating hotels. As of March 31, 2025, 14 of our 15 hotel properties were leased by wholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes (collectively, the TRS entities are referred to as “Braemar TRS”). One hotel property, located in the USVI, is owned by our USVI TRS. Braemar TRS then engages third-party or affiliated hotel management companies to operate the hotel properties under management contracts. Hotel operating results related to the hotel properties are included in the condensed consolidated statements of operations.
As of March 31, 2025, 13 of the 15 hotel properties were leased by Braemar’s wholly-owned TRS and the one hotel property majority-owned through a consolidated partnership was leased to a TRS wholly-owned by such consolidated partnership. Each leased hotel is leased under a percentage lease that provides for each lessee to pay in each calendar month the base rent plus, in each calendar quarter, percentage rent, if any, based on hotel revenues. Lease revenue from Braemar TRS is eliminated in consolidation as of March 31, 2025. The hotel properties are operated under management contracts with Marriott Hotel Services, LLC (“Marriott”), Hilton Management LLC (“Hilton”), Accor Management US Inc. (“Accor”), Four Seasons Hotels Limited (“Four Seasons”), Hyatt Corporation (“Hyatt”), The Ritz-Carlton Hotel Company, L.L.C. and its affiliates, each of which is also an affiliate of Marriott (“Ritz-Carlton”), and Remington Hospitality, which are eligible independent contractors under the Code.
2. Significant Accounting Policies
Basis of Presentation and Principles of Consolidation—The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. These condensed consolidated financial statements include the accounts of Braemar Hotels & Resorts Inc., its majority-owned subsidiaries, and its majority-owned entities in which it has a controlling interest. All intercompany accounts and transactions
9

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
between consolidated entities have been eliminated in these condensed consolidated financial statements. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 12, 2025.
Braemar OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has: (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Braemar OP that most significantly impact its economic performance, including but not limited to, operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly-owned subsidiary, Braemar OP General Partner LLC, its general partner. As such, we consolidate Braemar OP.
The following items affect reporting comparability of our historical condensed consolidated financial statements:
•Historical seasonality patterns at some of our hotel properties cause fluctuations in our overall operating results. Consequently, operating results for the three months ended March 31, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.
•On July 17, 2024, we sold the Hilton La Jolla Torrey Pines. The operating results of the hotel property were excluded from our results of operations as of the disposition date.
Use of Estimates—The preparation of these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Recently Issued Accounting Standards—In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. The amendments in this ASU may be applied prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or the amendments may be applied retrospectively by providing the revised disclosures for all periods presented. As of March 31, 2025, the Company has not adopted this ASU. The adoption of this ASU is expected to only impact disclosures with respect to the Company’s consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses that requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the statement of operations.
In January 2025, the FASB issued ASU 2025-01 which amends the effective date of the new disaggregation of income statement expenses standard to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is still permitted. The amendments may be applied either: (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU: or (2) retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact this ASU will have on our disclosures.
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BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
3. Revenue
The following tables present our revenue disaggregated by geographical areas (dollars in thousands):

|  | Three Months Ended March 31, 2025
Primary Geographical Market |  | Number of Hotels |  | Rooms |  | Food and Beverage |  | Other Hotel |  |  |  | Total
California |  | 5 |  | $ | 26,863 |  |  | $ | 7,335 |  |  | $ | 4,168 |  |  |  |  | $ | 38,366 |
Puerto Rico |  | 1 |  | 20,367 |  |  | 5,629 |  |  | 3,380 |  |  |  |  | 29,376 |
Arizona |  | 1 |  | 14,288 |  |  | 8,798 |  |  | 2,800 |  |  |  |  | 25,886 |
Colorado |  | 1 |  | 13,824 |  |  | 5,219 |  |  | 3,360 |  |  |  |  | 22,403 |
Florida |  | 2 |  | 20,411 |  |  | 11,060 |  |  | 8,339 |  |  |  |  | 39,810 |
Illinois |  | 1 |  | 3,135 |  |  | 706 |  |  | 477 |  |  |  |  | 4,318 |
Pennsylvania |  | 1 |  | 5,470 |  |  | 1,679 |  |  | 533 |  |  |  |  | 7,682 |
Washington |  | 1 |  | 4,581 |  |  | 1,028 |  |  | 687 |  |  |  |  | 6,296 |
Washington, D.C. |  | 1 |  | 10,805 |  |  | 5,278 |  |  | 1,224 |  |  |  |  | 17,307 |
USVI |  | 1 |  | 16,348 |  |  | 5,056 |  |  | 2,972 |  |  |  |  | 24,376 |
Total |  | 15 |  | $ | 136,092 |  |  | $ | 51,788 |  |  | $ | 27,940 |  |  |  |  | $ | 215,820 |

|  | Three Months Ended March 31, 2024
Primary Geographical Market |  | Number of Hotels |  | Rooms |  | Food and Beverage |  | Other Hotel |  |  |  | Total
California |  | 5 |  | $ | 25,644 |  |  | $ | 6,685 |  |  | $ | 4,032 |  |  |  |  | $ | 36,361 |
Puerto Rico |  | 1 |  | 18,995 |  |  | 4,987 |  |  | 3,228 |  |  |  |  | 27,210 |
Arizona |  | 1 |  | 14,115 |  |  | 8,075 |  |  | 2,503 |  |  |  |  | 24,693 |
Colorado |  | 1 |  | 13,181 |  |  | 5,653 |  |  | 3,748 |  |  |  |  | 22,582 |
Florida |  | 2 |  | 22,048 |  |  | 10,657 |  |  | 6,994 |  |  |  |  | 39,699 |
Illinois |  | 1 |  | 3,374 |  |  | 936 |  |  | 420 |  |  |  |  | 4,730 |
Pennsylvania |  | 1 |  | 4,496 |  |  | 1,121 |  |  | 291 |  |  |  |  | 5,908 |
Washington |  | 1 |  | 4,459 |  |  | 737 |  |  | 507 |  |  |  |  | 5,703 |
Washington, D.C. |  | 1 |  | 9,132 |  |  | 5,436 |  |  | 889 |  |  |  |  | 15,457 |
USVI |  | 1 |  | 16,813 |  |  | 5,194 |  |  | 2,989 |  |  |  |  | 24,996 |
Sold hotel property |  | 1 |  | 6,295 |  |  | 4,066 |  |  | 1,379 |  |  |  |  | 11,740 |
Total |  | 16 |  | $ | 138,552 |  |  | $ | 53,547 |  |  | $ | 26,980 |  |  |  |  | $ | 219,079 |

4. Investments in Hotel Properties, net
Investments in hotel properties, net consisted of the following (in thousands):

|  | March 31, 2025 |  | December 31, 2024
Land |  | $ | 630,842 |  |  | $ | 630,842 |
Buildings and improvements |  | 1,429,225 |  |  | 1,430,096 |
Furniture, fixtures and equipment |  | 164,731 |  |  | 158,470 |
Construction in progress |  | 20,121 |  |  | 20,420 |
Residences |  | 12,746 |  |  | 12,746 |
Total cost |  | 2,257,665 |  |  | 2,252,574 |
Accumulated depreciation |  | (487,720) |  |  | (473,888) |
Investments in hotel properties, net |  | $ | 1,769,945 |  |  | $ | 1,778,686 |

Impairment Charges
During the three months ended March 31, 2025 and 2024, no impairment charges were recorded.
5. Hotel Disposition
On July 17, 2024, the Company sold the Hilton La Jolla Torrey Pines for $165 million in cash, subject to customary pro-rations and adjustments. The Company owned an indirect 75% equity interest in the hotel property. Additionally, the Company
11

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
repaid the $66.6 million mortgage loan secured by the hotel property. The sale resulted in a gain of approximately $88.1 million for the year ended December 31, 2024.
We included the results of operations for this hotel property through the date of disposition in net income (loss) as shown in our condensed consolidated statements of operations for the three months ended March 31, 2024. The following table includes the condensed consolidated financial information from this hotel property (in thousands):

|  |  |  |  |  |  | Three Months Ended March 31, 2024 |  |  |
Total hotel revenue |  |  |  |  |  |  |  |  | $ | 11,740 |  |  |  |
Total hotel operating expenses |  |  |  |  |  |  |  |  | (7,193) |  |  |  |
Property taxes, insurance and other |  |  |  |  |  |  |  |  | (789) |  |  |  |
Depreciation and amortization |  |  |  |  |  |  |  |  | (1,090) |  |  |  |
Operating income (loss) |  |  |  |  |  |  |  |  | 2,668 |  |  |  |
Interest income |  |  |  |  |  |  |  |  | 100 |  |  |  |
Interest expense and amortization of loan costs |  |  |  |  |  |  |  |  | (1,692) |  |  |  |
Write-off of loan costs and exit fees |  |  |  |  |  |  |  |  | (101) |  |  |  |
Income (loss) before income taxes |  |  |  |  |  |  |  |  | 975 |  |  |  |
Income from consolidated entities attributable to noncontrolling interests |  |  |  |  |  |  |  |  | (707) |  |  |  |
(Income) loss before income taxes attributable to redeemable noncontrolling interests in operating partnership |  |  |  |  |  |  |  |  | (21) |  |  |  |
Income (loss) before income taxes attributable to the Company |  |  |  |  |  |  |  |  | $ | 247 |  |  |  |

6. Indebtedness, net
Indebtedness, net consisted of the following (dollars in thousands):

Indebtedness |  | Collateral |  | Current Maturity |  | Final Maturity (9) |  | Interest Rate |  | March 31, 2025 |  | December 31, 2024
Mortgage loan (2) (3) |  | The Notary Hotel |  | June 2025 |  | June 2025 |  | SOFR (1) + 2.66% |  | $ | — |  |  |  |  | $ | 293,180 |  |  |
|  | The Clancy |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Sofitel Chicago Magnificent Mile |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Marriott Seattle Waterfront |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loan (4) |  | The Ritz-Carlton Lake Tahoe |  | July 2025 |  | January 2026 |  | SOFR (1) + 3.25% |  | 43,413 |  |  |  |  | 53,413 |  |  |
Mortgage loan (5) |  | Park Hyatt Beaver Creek Resort & Spa |  | February 2026 |  | February 2027 |  | SOFR (1) + 2.86% |  | 70,500 |  |  |  |  | 70,500 |  |  |
Mortgage loan (3) |  | The Ritz-Carlton Reserve Dorado Beach |  | March 2026 |  | March 2026 |  | SOFR (1) + 4.75% |  | — |  |  |  |  | 62,000 |  |  |
Convertible Senior Notes |  | Equity |  | June 2026 |  | June 2026 |  | 4.50% |  | 86,250 |  |  |  |  | 86,250 |  |  |
Mortgage loan (6) |  | Bardessono Hotel & Spa |  | August 2026 |  | August 2029 |  | SOFR (1) + 3.24% |  | 407,000 |  |  |  |  | 407,000 |  |  |
|  | Hotel Yountville |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | The Ritz-Carlton Sarasota |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Pier House Resort & Spa |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | The Ritz-Carlton St. Thomas |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loan (7) |  | Four Seasons Resort Scottsdale |  | December 2026 |  | December 2028 |  | SOFR (1) + 3.75% |  | 140,000 |  |  |  |  | 140,000 |  |  |
Mortgage loan (8) |  | Capital Hilton |  | December 2026 |  | December 2028 |  | SOFR (1) + 3.75% |  | 110,600 |  |  |  |  | 110,600 |  |  |
Mortgage loan (3) |  | The Notary Hotel |  | March 2027 |  | March 2030 |  | SOFR (1) + 2.52% |  | 363,000 |  |  |  |  | — |  |  |
|  | The Clancy |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Sofitel Chicago Magnificent Mile |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Marriott Seattle Waterfront |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | The Ritz-Carlton Reserve Dorado Beach |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | 1,220,763 |  |  |  |  | 1,222,943 |  |  |
Deferred loan costs, net |  |  |  |  |  |  |  |  |  | (17,316) |  |  |  |  | (11,985) |  |  |
Premiums/(discounts), net |  |  |  |  |  |  |  |  |  | (779) |  |  |  |  | (940) |  |  |
Indebtedness, net |  |  |  |  |  |  |  |  |  | $ | 1,202,668 |  |  |  |  | $ | 1,210,018 |  |  |

__________________
(1)SOFR rates were 4.32% and 4.33% at March 31, 2025 and December 31, 2024, respectively.
(2)This mortgage loan had five one-year extension options, subject to satisfaction of certain conditions, of which the fifth was exercised in June 2024.
(3)On March 7, 2025, we refinanced two mortgage loans into a new $363.0 million mortgage loan. The new mortgage loan is interest only and bears interest at a rate of SOFR + 2.52%, has a two-year initial term, and has three one-year extension options, subject to the satisfaction of certain conditions.
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BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
(4)On January 14, 2025, we amended this mortgage loan. Terms of the amendment included a $10.0 million principal pay-down, current maturity date extension to July 2025, interest rate reduction to SOFR + 3.25%, and one six-month extension option subject to satisfaction of certain conditions.
(5)This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the second was exercised in February 2025.
(6)This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. Braemar holds a tranche of Commercial Mortgage-Backed Securities (“CMBS”), which is secured by the five hotel properties that serve as collateral for the new mortgage loan and has a par value of $42.2 million and a rate of SOFR + 5.20%. The CMBS is reported as “investment in securities” on the condensed consolidated balance sheet.
(7)This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions. This mortgage loan has a SOFR floor of 1.00%.
(8)This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions. This mortgage loan has a SOFR floor of 2.00%.
(9)The final maturity date assumes all available extension options will be exercised.
Convertible Senior Notes
For the three months ended March 31, 2025 and 2024, the Company recorded coupon interest expense of $970,000 and $970,000, respectively. For the three months ended March 31, 2025 and 2024, the Company recorded discount amortization of $161,000 and $152,000, respectively, related to the initial purchase discount, with the remaining discount balance to be amortized through June 2026.
The convertible senior notes are convertible at any time prior to the close of business on the business day immediately preceding the maturity date for cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the election of the Company. As of March 31, 2025, the conversion rate is 188.0528 shares per $1,000 principal amount of notes.
If we violate covenants in any debt agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of the consolidated group. As of March 31, 2025, we were in compliance with all covenants.
Interest Rate Derivatives—We use interest rate caps to hedge our debt and our cash flows, which are recorded at fair value. Payments from counterparties on in-the-money interest rate caps are recognized as realized gains on our condensed consolidated statements of operations. See note 8.
7. Note Receivable
On July 2, 2024, Braemar, Ashford Hospitality Trust, Inc. (“Ashford Trust”) and Ashford Inc. (collectively with the Company, Ashford Trust and each of Ashford Inc.’s, the Company’s and Ashford Trust’s respective affiliates (including Stirling Hotels & Resorts, Inc.) and any entity advised by Ashford Inc., the “Company Group”) entered into a Cooperation Agreement (the “Agreement”) with Blackwells Capital LLC, Blackwells Onshore I LLC, Blackwells Holding Co. LLC, Vandewater Capital Holdings, LLC, Blackwells Asset Management LLC, BW Coinvest Management I LLC and Jason Aintabi (collectively, the “Blackwells Parties”) regarding the withdrawal of the Blackwells Parties’ proxy campaign, dismissal of pending litigation involving the parties and certain other matters.
Concurrently and in connection with the Agreement, certain of the parties thereto have also entered into a Share Ownership Agreement (the “Share Ownership Agreement”) and a Loan Agreement (the “Loan Agreement”), pursuant to which agreements the Company will provide to BW Coinvest I, LLC (“Borrower”) an unsecured loan (the “Loan”). The proceeds from the Loan will be used to reimburse Borrower for 70% of the amount expended by Borrower to purchase on the open market a total of 3,500,000 shares of the Company’s common stock (the “Purchased Shares”) within six months of the date of Loan Agreement, at a price per Purchased Share not to exceed $10 and subject to the other limitations set forth therein. The Loan has a term of five years (the “Term”), is guaranteed by Jason Aintabi, Vandewater Capital Holdings, LLC, Blackwells Holding Co. LLC, and Blackwells Asset Management LLC and shall bear payment-in-kind interest during the Term at a rate equal to the sum of: (a) Term SOFR (as defined in the Loan Agreement) and (b) 3.00% (three hundred basis points) per annum. The Company has agreed to reimburse Blackwells Capital LLC, in an amount agreed upon by the parties, for the Blackwells Parties’ reasonable due diligence expenses incurred on or prior to the date of the Share Ownership Agreement.
As of March 31, 2025, the Company has advanced approximately $8.1 million that has been used to purchase 3.5 million shares of Braemar common stock.
13

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The note receivable is summarized in the table below (dollars in thousands):

Line Item |  | Interest Rate |  | March 31, 2025 |  | December 31, 2024
Note receivable |  | SOFR + 3.00% |  | $ | 8,434 |  |  | $ | 8,283 |

We recognized interest income as presented in the table below (in thousands):

|  |  |  | Three Months Ended March 31, |  |
Line Item |  |  |  |  |  | 2025 |  | 2024 |  |  |  |
Interest income |  |  |  |  |  | $ | 152 |  |  | $ | — |  |  |  |  |

We review receivables for impairment each reporting period. Under the model, the Company estimates credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument and is required to record a credit loss expense (or reversal) in each reporting period. Our assessment of impairment is based on considerable management judgment and assumptions. No impairment charges were recorded for the three months ended March 31, 2025.
8. Fair Value Measurements
Fair Value Hierarchy—Our financial instruments measured at fair value either on a recurring or a non-recurring basis are classified in a hierarchy for disclosure purposes consisting of three levels based on the observability of inputs in the marketplace as discussed below:
•Level 1: Fair value measurements that are quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets.
•Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.
•Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability.
The fair value of interest rate caps are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rose above the strike rates of the caps. Variable interest rates used in the calculation of projected receipts and payments on the caps are based on an expectation of future interest rates derived from observable market interest rate curves (SOFR forward curves) and volatilities (Level 2 inputs). We also incorporate credit valuation adjustments (Level 3 inputs) to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk.
When a majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. However, when the valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties, which we consider significant (10% or more) to the overall valuation of our derivatives, the derivative valuations in their entirety are classified in Level 3 of the fair value hierarchy. Transfers of inputs between levels are determined at the end of each reporting period. In determining the fair values of our derivatives at March 31, 2025, the SOFR interest rate forward curve (Level 2 inputs) assumed a downtrend from 4.319% to 3.404% for the remaining term of our derivatives. Credit spreads (Level 3 inputs) used in determining the fair values derivatives assumed an uptrend in nonperformance risk for us and all of our counterparties through the maturity dates.
Investment in securities includes mortgage-backed securities. These securities are classified as available for sale and are generally reported at fair value utilizing Level 2 inputs where the Company obtains fair value measurements from an external pricing vendor. Prices received from the vendor are analyzed based on various sources of observable market data. If prices are not within certain tolerance levels that are based on the asset type’s characteristics, the exception is researched and, if the price is not able to be validated, an alternate pricing vendor is utilized.
14

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents our assets and liabilities measured at fair value on a recurring basis aggregated by the level within which measurements fall in the fair value hierarchy (in thousands):

| Quoted Market Prices (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  |  |  | Total |
March 31, 2025 |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |
CMBS | $ | — |  |  | $ | 42,394 |  |  | $ | — |  |  |  |  | $ | 42,394 |  | (1)
Derivative assets: |  |  |  |  |  |  |  |  |  |
Interest rate derivatives - caps | — |  |  | 478 |  |  | — |  |  |  |  | 478 |  | (2)
Total | $ | — |  |  | $ | 42,872 |  |  | $ | — |  |  |  |  | $ | 42,872 |  |

| Quoted Market Prices (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  |  |  | Total |  |  |  |  |  |  |  |  |  |
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CMBS | $ | — |  |  | $ | 41,535 |  |  | $ | — |  |  |  |  | $ | 41,535 |  | (1) |  |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives - caps | — |  |  | 356 |  |  | — |  |  |  |  | 356 |  | (2) |  |  |  |  |  |  |  |  |
Total | $ | — |  |  | $ | 41,891 |  |  | $ | — |  |  |  |  | $ | 41,891 |  |  |  |  |  |  |  |  |  |  |

__________________
(1)Reported as “investment in securities” in our condensed consolidated balance sheet.
(2)Reported as “derivative assets” in our condensed consolidated balance sheets.

Effect of Fair Value Measured Assets and Liabilities on Condensed Consolidated Statements of Operations
The following table summarizes the effect of fair value measured assets and liabilities on our condensed consolidated statements of operations (in thousands):

|  |  |  |  | Gain (Loss) Recognized in Income |  |  |  |  |  |
|  |  | Three Months Ended March 31, |  |  |  |  |  |
|  |  |  |  | 2025 |  | 2024 |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives - caps |  |  |  |  | $ | (198) |  |  | $ | 920 |  |  |  |  |  |  |
Total |  |  |  |  | $ | (198) |  |  | $ | 920 |  |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Warrants |  |  |  |  | $ | — |  |  | $ | 12 |  |  |  |  |  |  |
Net |  |  |  |  | $ | (198) |  |  | $ | 932 |  |  |  |  |  |  |
Total combined |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives - caps |  |  |  |  | $ | (386) |  |  | $ | (751) |  |  |  |  |  |  |
Warrants |  |  |  |  | — |  |  | 12 |  |  |  |  |  |  |
Unrealized gain (loss) on derivatives |  |  |  |  | $ | (386) |  | (1) | $ | (739) |  | (1) |  |  |  |  |
Realized gain (loss) on interest rate caps |  |  |  |  | 188 |  | (1) (2) | 1,671 |  | (1) (2) |  |  |  |  |
Net |  |  |  |  | $ | (198) |  |  | $ | 932 |  |  |  |  |  |  |

________
(1)Reported in “realized and unrealized gain (loss) on derivatives” in our condensed consolidated statements of operations.
(2)Represents settled and unsettled payments from counterparties on interest rate caps.
The amortized cost of the CMBS at March 31, 2025 and December 31, 2024, was $42.3 million and $42.3 million, respectively. The unrealized gain (loss) recognized as a change in other comprehensive income (loss) for the three months ended March 31, 2025 and March 31, 2024 was $859,000 and $0, respectively.
15

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
9. Summary of Fair Value of Financial Instruments
Determining the estimated fair values of certain financial instruments such as indebtedness requires considerable judgment to interpret market data. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold or settled.
The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):

|  | March 31, 2025 |  | December 31, 2024
|  | Carrying Value |  | Estimated Fair Value |  | Carrying Value |  | Estimated Fair Value
Financial assets measured at fair value: |  |  |  |  |  |  |  |
Investment in securities |  | $ | 42,394 |  |  | $ | 42,394 |  |  | $ | 41,535 |  |  | $ | 41,535 |
Derivative assets |  | 478 |  |  | 478 |  |  | 356 |  |  | 356 |
Financial assets not measured at fair value: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 81,689 |  |  | $ | 81,689 |  |  | $ | 135,465 |  |  | $ | 135,465 |
Restricted cash |  | 54,546 |  |  | 54,546 |  |  | 49,592 |  |  | 49,592 |
Accounts receivable, net |  | 39,899 |  |  | 39,899 |  |  | 31,754 |  |  | 31,754 |
Note receivable |  | 8,434 |  |  | 8,434 |  |  | 8,283 |  |  | 8,283 |
Due from third-party hotel managers |  | 25,462 |  |  | 25,462 |  |  | 22,873 |  |  | 22,873 |
Financial liabilities not measured at fair value: |  |  |  |  |  |  |  |
Indebtedness |  | $ | 1,219,984 |  |  | $ | 1,218,557 |  |  | $ | 1,222,003 |  |  | $ | 1,207,420 |
Accounts payable and accrued expenses |  | 136,090 |  |  | 136,090 |  |  | 143,566 |  |  | 143,566 |
Dividends and distributions payable |  | 8,692 |  |  | 8,692 |  |  | 9,255 |  |  | 9,255 |
Due to Ashford Inc., net |  | 3,511 |  |  | 3,511 |  |  | 4,267 |  |  | 4,267 |
Due to related parties, net |  | 1,700 |  |  | 1,700 |  |  | 1,055 |  |  | 1,055 |
Due to third-party hotel managers |  | 2,389 |  |  | 2,389 |  |  | 1,476 |  |  | 1,476 |

Cash, cash equivalents and restricted cash. These financial assets have maturities of less than 90 days and most bear interest at market rates. The carrying value approximates fair value due to their short-term nature. This is considered a Level 1 valuation technique.
Accounts receivable, net, due to/from related parties, net, accounts payable and accrued expenses, dividends and distributions payable, due to Ashford Inc and due to/from third-party hotel managers. The carrying values of these financial instruments approximate their fair values due to the short-term nature of these financial instruments. This is considered a Level 1 valuation technique.
Investment in securities. See note 8 for a complete description of the methodology and assumptions utilized in determining fair values.
Note receivable. The carrying amount of note receivable approximates its fair value. We estimate the fair value of the note receivable to approximate the carrying value of $8.4 million as of March 31, 2025 and the carrying value of $8.3 million as of December 31, 2024. This is considered a Level 2 valuation technique.
Derivative assets. See note 8 for a complete description of the methodology and assumptions utilized in determining fair values.
Indebtedness, net. Fair value of indebtedness is determined using the loan terms, collateral value and financial data such as loan-to-value ratios, debt service coverage ratios, and interest rates for comparable loans. We estimated the fair value of the total indebtedness to be approximately 99.9% of the carrying value of $1.2 billion as of March 31, 2025, and approximately 98.8% of the carrying value of $1.2 billion as of December 31, 2024. These fair value estimates are considered a Level 2 valuation technique.
16

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
10. Income (Loss) Per Share
The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
Net income (loss) attributable to common stockholders - basic and diluted: |  |  |  |  |  |  |  |  |
Net income (loss) attributable to the Company |  |  |  |  | $ | 10,998 |  |  | $ | 15,929 |  |  |
Less: dividends on preferred stock |  |  |  |  | (9,269) |  |  | (10,407) |  |  |
Less: deemed dividends on preferred stock |  |  |  |  | (4,276) |  |  | (1,998) |  |  |
Less: dividends on common stock |  |  |  |  | (3,353) |  |  | (3,324) |  |  |
Less: dividends on unvested performance stock units |  |  |  |  | (19) |  |  | (21) |  |  |
Less: dividends on unvested restricted shares |  |  |  |  | — |  |  | (2) |  |  |
Undistributed net income (loss) allocated to common stockholders |  |  |  |  | (5,919) |  |  | 177 |  |  |
Add back: dividends on common stock |  |  |  |  | 3,353 |  |  | 3,324 |  |  |
Distributed and undistributed net income (loss) - basic and diluted |  |  |  |  | $ | (2,566) |  |  | $ | 3,501 |  |  |
Dividends on preferred stock - Series E (inclusive of deemed dividends) |  |  |  |  | — |  |  | 9,401 |  |  |
Distributed and undistributed net income (loss) - diluted |  |  |  |  | $ | (2,566) |  |  | $ | 12,902 |  |  |
Weighted average common shares outstanding: |  |  |  |  |  |  |  |  |
Weighted average common shares outstanding – basic and diluted |  |  |  |  | 66,744 |  |  | 66,455 |  |  |
Effect of assumed conversion of preferred stock - Series E |  |  |  |  | — |  |  | 202,061 |  |  |
Weighted average common shares outstanding – diluted |  |  |  |  | 66,744 |  |  | 268,516 |  |  |
Income (loss) per share - basic and diluted: |  |  |  |  |  |  |  |  |
Net income (loss) allocated to common stockholders per share |  |  |  |  | $ | (0.04) |  |  | $ | 0.05 |  |  |
Income (loss) per share - diluted: |  |  |  |  |  |  |  |  |
Net income (loss) allocated to common stockholders per share |  |  |  |  | $ | (0.04) |  |  | $ | 0.05 |  |  |

Due to their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect the adjustments for the following items (in thousands):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
Net income (loss) allocated to common stockholders is not adjusted for: |  |  |  |  |  |  |  |  |
Income (loss) allocated to unvested performance stock units |  |  |  |  | $ | 19 |  |  | $ | 23 |  |  |
Income (loss) attributable to redeemable noncontrolling interests in operating partnership |  |  |  |  | (262) |  |  | 296 |  |  |
Dividends on preferred stock - Series B |  |  |  |  | 1,058 |  |  | 1,058 |  |  |
Interest expense on Convertible Senior Notes |  |  |  |  | 1,131 |  |  | 1,123 |  |  |
Dividends on preferred stock - Series E (inclusive of deemed dividends) |  |  |  |  | 10,892 |  |  | — |  |  |
Dividends on preferred stock - Series M (inclusive of deemed dividends) |  |  |  |  | 770 |  |  | 1,121 |  |  |
Total |  |  |  |  | $ | 13,608 |  |  | $ | 3,621 |  |  |
Weighted average diluted shares are not adjusted for: |  |  |  |  |  |  |  |  |
Effect of unvested performance stock units |  |  |  |  | 43 |  |  | 13 |  |  |
Effect of assumed conversion of operating partnership units |  |  |  |  | 6,786 |  |  | 5,902 |  |  |
Effect of assumed conversion of preferred stock - Series B |  |  |  |  | 4,116 |  |  | 4,116 |  |  |
Effect of assumed conversion of Convertible Senior Notes |  |  |  |  | 16,267 |  |  | 13,609 |  |  |
Effect of assumed conversion of preferred stock - Series E |  |  |  |  | 135,669 |  |  | — |  |  |
Effect of assumed conversion of preferred stock - Series M |  |  |  |  | 13,959 |  |  | 22,340 |  |  |
Total |  |  |  |  | 176,840 |  |  | 45,980 |  |  |

17

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
11. Redeemable Noncontrolling Interests in Operating Partnership
Redeemable noncontrolling interests in the operating partnership represent the limited partners’ proportionate share of equity and their allocable share of equity in earnings/losses of Braemar OP, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common units of limited partnership interest in the operating partnership (the “common units”) and units issued under our Long-Term Incentive Plan (the “LTIP units”) that are vested. Each common unit may be redeemed, by the holder, for either cash or, at our sole discretion, up to one share of our REIT common stock, which is either: (i) issued pursuant to an effective registration statement; (ii) included in an effective registration statement providing for the resale of such common stock; or (iii) issued subject to a registration rights agreement.
LTIP units, which are issued to certain executives and employees of Ashford LLC as compensation, generally have vesting periods of three years. Additionally, certain independent members of the board of directors have elected to receive LTIP units as part of their compensation, which are fully vested upon grant. Upon reaching economic parity with common units, each vested LTIP unit can be converted by the holder into one common unit which can then be redeemed for cash or, at our election, settled in our common stock. An LTIP unit will achieve parity with the common units upon the sale or deemed sale of all or substantially all of the assets of our operating partnership at a time when our stock is trading at a level in excess of the price it was trading on the date of the LTIP issuance. More specifically, LTIP units will achieve full economic parity with common units in connection with (i) the actual sale of all or substantially all of the assets of our operating partnership; or (ii) the hypothetical sale of such assets, which results from a capital account revaluation, as defined in the partnership agreement, for our operating partnership.
The compensation committee of our board of directors may authorize the issuance of Performance LTIP units to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of Performance LTIP units that will be settled in common units of Braemar OP, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date. The performance awards will be eligible to vest, from 0% to 200% of target, based on achievement of certain performance targets over the three-year performance period. The performance criteria are based on performance conditions under the relevant literature. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the applicable measurement date fair value of the award. The grant date fair value of the award may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.
As of March 31, 2025, we have issued a total of approximately 3.8 million LTIP and Performance LTIP units, net of Performance LTIP cancellations. All LTIP and Performance LTIP units, other than approximately 623,000 LTIP units and 1.2 million Performance LTIP units issued from March 2015 to December 2024, had reached full economic parity with, and are convertible into, common units.
The following table presents the redeemable noncontrolling interests in Braemar OP (in thousands) and the corresponding approximate ownership percentage of our operating partnership:

| March 31, 2025 |  | December 31, 2024
Redeemable noncontrolling interests in Braemar OP (in thousands) | $ | 26,430 |  |  | $ | 29,964 |
Adjustments to redeemable noncontrolling interests (1) (in thousands) | $ | 165 |  |  | $ | 1,324 |
Ownership percentage of operating partnership | 9.33 | % |  | 8.05 | %

____________________________________
(1) Reflects the excess of the redemption value over the accumulated historical cost.
We allocated net (income) loss to the redeemable noncontrolling interests as illustrated in the table below (in thousands):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership |  |  |  |  | $ | 262 |  |  | $ | (296) |  |  |
Distributions declared to holders of common units, LTIP units and Performance LTIP units |  |  |  |  | 344 |  |  | 366 |  |  |

18

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The following table presents the common units redeemed for common stock (in thousands):

|  |  | Three Months Ended March 31, |
|  |  |  |  | 2025 |  | 2024 |  |  |
Units redeemed |  |  |  |  | 457 |  |  | $ | — |  |  |  |
Fair value of common units redeemed (1) |  |  |  |  | $ | 1,381 |  |  | — |  |  |  |

____________________________________
(1) The redemption value is the greater of historical cost or fair value. The historical cost of the converted units was $2.3 million.
The following table presents the common units redeemed for cash (in thousands):

|  |  | Three Months Ended March 31, |
|  |  |  |  | 2025 |  | 2024 |  |  |
Units redeemed |  |  |  |  | 35 |  |  | — |  |  |  |
Fair value of common units redeemed |  |  |  |  | $ | 92 |  |  | $ | — |  |  |  |

12. Equity and Stock-Based Compensation
Common Stock Dividends—The following table summarizes the common stock dividends declared during the period (in thousands):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
Common stock dividends declared |  |  |  |  | $ | 3,372 |  |  | $ | 3,345 |  |  |

Stock Repurchases—On May 3, 2024, the board of directors approved a new share repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share, having an aggregate value of up to $50 million. As of March 31, 2025, the Company has not repurchased any common stock pursuant to this program.
Restricted Stock—We incur stock-based compensation expense in connection with restricted stock awarded to certain employees of Ashford LLC and its affiliates. We also issue common stock to certain of our independent directors, which vests immediately upon issuance.
Performance Stock Units—The compensation committee of the board of directors of the Company may authorize the issuance of grants of performance stock units (“PSUs”) to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of PSUs that will be settled in shares of common stock of the Company, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date. The compensation committee utilizes a performance metric, pursuant to which, the performance awards will be eligible to vest, from 0% to 200% of target, based on achievement of certain performance targets over the three-year performance period. The performance criteria are based on performance conditions under the relevant literature and were issued to non-employees. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the corresponding measurement date fair value of the award, which may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.
8.25% Series D Cumulative Preferred Stock—The dividend for all issued and outstanding shares of the Company’s Series D Cumulative Preferred Stock (the “Series D Preferred Stock”) is set at $2.0625 per annum per share.
The following table summarizes dividends declared (in thousands):

|  |  | Three Months Ended March 31, |
|  |  |  |  | 2025 |  | 2024 |  |  |
Series D Cumulative Preferred Stock |  |  |  |  | $ | 825 |  |  | $ | 825 |  |  |  |

19

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
13. Redeemable Preferred Stock
5.50% Series B Cumulative Convertible Preferred Stock
Each share of our 5.50% Series B Cumulative Convertible Preferred Stock (the “Series B Convertible Preferred Stock”) is convertible at any time, at the option of the holder, into a number of whole shares of common stock at a conversion price of $18.70 (which represents a conversion rate of 1.3372 shares of our common stock, subject to certain adjustments). The Series B Convertible Preferred Stock is also subject to conversion upon certain events constituting a change of control. Holders of the Series B Convertible Preferred Stock have no voting rights, subject to certain exceptions. The Series B Convertible Preferred Stock dividend for all issued and outstanding shares is set at $1.375 per annum per share.
The Company may, at its option, cause the Series B Convertible Preferred Stock to be converted in whole or in part, on a pro-rata basis, into fully paid and nonassessable shares of the Company’s common stock at the conversion price, provided that the “Closing Bid Price” (as defined in the Articles Supplementary) of the Company’s common stock shall have equaled or exceeded 110% of the conversion price for the immediately preceding 45 consecutive trading days ending three days prior to the date of notice of conversion.
Additionally, the Series B Convertible Preferred Stock contains cash redemption features that consist of: 1) an optional redemption in which the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends; 2) a special optional redemption, in which on or prior to the occurrence of a Change of Control (as defined in the Articles Supplementary), the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $25.00 per share; and 3) a “REIT Termination Event” and “Listing Event Redemption,” in which at any time (i) a REIT Termination Event (as defined below) occurs or (ii) the Company’s common stock fails to be listed on the NYSE, NYSE American, or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor thereto (each, a “National Exchange”), the holder of Series B Convertible Preferred Stock shall have the right to require the Company to redeem any or all shares of Series B Convertible Preferred Stock at 103% of the liquidation preference ($25.00 per share, plus any accumulated, accrued, and unpaid dividends) in cash.
A “REIT Termination Event,” shall mean the earliest of:
(i) filing of a federal income tax return where the Company does not compute its income as a REIT;
(ii) stockholders’ approval on ceasing to be qualified as a REIT;
(iii) board of directors’ approval on ceasing to be qualified as a REIT;
(iv) board’s determination based on the advice of counsel to cease to be qualified as a REIT; or
(v) determination within the meaning of Section 1313(a) of the Code to cease to be qualified as a REIT.
Series B Convertible Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside our control. As such, the Series B Convertible Preferred Stock is classified outside of permanent equity.
The following table summarizes dividends declared (in thousands):

|  |  | Three Months Ended March 31, |
|  |  |  |  | 2025 |  | 2024 |  |  |
Series B Convertible Preferred Stock |  |  |  |  | $ | 1,058 |  |  | $ | 1,058 |  |  |  |

Series E Redeemable Preferred Stock
On April 2, 2021, the Company entered into equity distribution agreements with certain sales agents to sell, from time to time, shares of the Series E Redeemable Preferred Stock (the “Series E Preferred Stock”). Pursuant to such equity distribution agreements, the Company offered a maximum of 20,000,000 shares of Series E Preferred Stock in a primary offering at a price of $25.00 per share. On February 21, 2023, the Company announced the closing of its Series E Preferred Stock offering. The Company is also offering a maximum of 8,000,000 shares of the Series E Preferred Stock pursuant to a dividend reinvestment plan (the “DRIP”) at $25.00 per share (the “Stated Value”).
The Series E Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series B Convertible Preferred stock, the Series D Preferred Stock and the Series M Preferred Stock (as defined below)) and with any future parity securities and
20

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs.
Holders of the Series E Preferred Stock shall have the right to vote for the election of directors of the Company and on all other matters requiring stockholder action by the holders of the common stock, each share being entitled to vote to the same extent as one share of the Company’s common stock, and all such shares voting together as a single class. If and whenever dividends on any shares of the Series E Preferred Stock shall be in arrears for 18 or more monthly periods, whether or not such quarterly periods are consecutive, the number of directors then constituting the board shall be increased by two and the holders of such shares of Series E Preferred Stock (voting together as a single class with all other classes or series of capital stock ranking on a parity with the Series E Preferred Stock) shall be entitled to vote for the election of the additional directors of the Company who shall each be elected for one-year terms.
Each share is redeemable at any time, at the option of the holder, at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends, less a redemption fee. Starting on the second anniversary, each share is redeemable at any time, at the option of the Company, at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends (with no redemption fee). The Series E Preferred Stock is also subject to conversion upon certain events constituting a change of control. Upon such change of control events, holders have the option to convert their shares of Series E Preferred Stock into a maximum of 5.69476 shares of our common stock.
The redemption fee shall be an amount equal to:
•8.0% of the stated value of $25.00 per share (the “Stated Value”) beginning on the Original Issue Date (as defined in the Articles Supplementary) of the shares of the Series E Preferred Stock to be redeemed;
•5.0% of the Stated Value beginning on the second anniversary from the Original Issue Date of the shares of the Series E Preferred Stock to be redeemed; and
•0% of the Stated Value beginning on the third anniversary from the Original Issue Date of the shares of the Series E Preferred Stock to be redeemed.
The Company has the right, in its sole discretion, to redeem the shares in cash, or in an equal number of shares of common stock or any combination thereof, calculated based on the closing price per share for the single trading day prior to the date of redemption.
The Series E Preferred Stock cash dividends are as follows:
•8.00% per annum of the Stated Value beginning on the date of the first settlement of the Series E Preferred Stock (the “Date of Initial Closing”);
•7.75% per annum of the Stated Value beginning on the first anniversary from the Date of Initial Closing; and
•7.50% per annum of the Stated Value beginning on the second anniversary from the Date of Initial Closing.
Dividends are payable on a monthly basis in arrears on the 15th day of each month (or, if such payment date is not a business day, the next succeeding business day) to holders of record at the close of business on the last business day of each month immediately preceding the applicable dividend payment date. Dividends will be computed on the basis of twelve 30-day months and a 360-day year.
The Company has a DRIP that allows participating holders to have their Series E Preferred Stock dividend distributions automatically reinvested in additional shares of the Series E Preferred Stock at a price of $25.00 per share.
The Series E Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside of the Company’s control. As such, the Series E Preferred Stock is classified outside of permanent equity.
At the date of issuance, the carrying amount of the Series E Preferred Stock was less than the redemption value. As a result of the Company’s determination that redemption is probable, the carrying value will be adjusted to the redemption amount each reporting period.
21

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The redemption value adjustment of Series E Preferred Stock is summarized below (in thousands):

| March 31, 2025 |  | December 31, 2024
Series E Preferred Stock | $ | 331,875 |  |  | $ | 352,502 |
Cumulative adjustments to Series E Preferred Stock (1) | $ | 26,374 |  |  | $ | 22,098 |

________
(1) Reflects the excess of the redemption value over the accumulated carrying value.
The following table summarizes dividends declared (in thousands):

|  |  | Three Months Ended March 31, |
|  |  |  |  | 2025 |  | 2024 |  |  |
Series E Preferred Stock |  |  |  |  | $ | 6,616 |  |  | $ | 7,600 |  |  |  |

The redemption activities of Series E Preferred Stock is summarized below (in thousands):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
Series E Preferred Stock shares redeemed |  |  |  |  | 1,033 |  |  | 186 |  |  |
Redemption amount, net of redemption fees |  |  |  |  | $ | 25,701 |  |  | $ | 4,403 |  |  |

Series M Redeemable Preferred Stock
On April 2, 2021, the Company entered into equity distribution agreements with certain sales agents to sell, from time to time, shares of the Series M Redeemable Preferred Stock (the “Series M Preferred Stock”). Pursuant to such equity distribution agreements, the Company offered a maximum of 20,000,000 shares of the Series M Preferred Stock (par value $0.01) in a primary offering at a price of $25.00 per share (or “Stated Value”). On February 21, 2023, the Company announced the closing of its Series M Preferred Stock offering. The Company is also offering a maximum of 8,000,000 shares of Series M Preferred Stock pursuant to the DRIP at $25.00 per share.
The Series M Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series B Convertible Preferred Stock, the Series D Preferred Stock and the Series E Preferred Stock) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs.
Holders of the Series M Preferred Stock shall have the right to vote for the election of directors of the Company and on all other matters requiring stockholder action by the holders of the common stock, each share being entitled to vote to the same extent as one share of the Company’s common stock, and all such shares voting together as a single class. If and whenever dividends on any shares of Series M Preferred Stock shall be in arrears for 18 or more monthly periods, whether or not such quarterly periods are consecutive, the number of directors then constituting the board shall be increased by two and the holders of such shares of Series M Preferred Stock (voting together as a single class with all other classes or series of capital stock ranking on a parity with the Series M Preferred Stock) shall be entitled to vote for the election of the additional directors of the Company who shall each be elected for one-year terms.
Each share is redeemable at any time, at the option of the holder, at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends, less a redemption fee. Starting on the second anniversary, each share is redeemable at any time, at the option of the Company, at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends (with no redemption fee). The Series M Preferred Stock is also subject to conversion upon certain events constituting a change of control. Upon such change of control events, holders have the option to convert their shares of Series M Preferred Stock into a maximum of 5.69476 shares of our common stock.
The redemption fee shall be an amount equal to:
•1.5% of the Stated Value of $25.00 per share beginning on the Series M Original Issue Date (as defined in the Articles Supplementary) of the shares of Series M Preferred Stock to be redeemed; and
•0% of the Stated Value beginning on the first anniversary from the Series M Original Issue Date of the shares of Series M Preferred Stock to be redeemed.
22

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The Company has the right, in its sole discretion, to redeem the shares in cash, or in an equal number of shares of common stock or any combination thereof, calculated based on the closing price per share for the single trading day prior to the date of redemption.
Holders of Series M Preferred Stock are entitled to receive cumulative cash dividends at the initial rate of 8.2% per annum of the Stated Value of $25.00 per share (equivalent to an annual dividend rate of $2.05 per share). Beginning one year from the date of original issuance of each share of Series M Preferred Stock and on each one-year anniversary thereafter for such share of Series M Preferred Stock, the dividend rate shall increase by 0.10% per annum; provided, however, that the dividend rate for any share of Series M Preferred Stock shall not exceed 8.7% per annum of the Stated Value.
Dividends are payable on a monthly basis and in arrears on the 15th day of each month (or, if such payment date is not a business day, on the next succeeding business day) to holders of record at the close of business on the last business day of each month immediately preceding the applicable dividend payment date. Dividends will be computed on the basis of twelve 30-day months and a 360-day year.
The Company has a DRIP that allows participating holders to have their Series M Preferred Stock dividend distributions automatically reinvested in additional shares of the Series M Preferred Stock at a price of $25.00 per share.
The Series M Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside the Company’s control. As such, the Series M Preferred Stock is classified outside of permanent equity.
At the date of issuance, the carrying amount of the Series M Preferred Stock was less than the redemption value. As a result of the Company’s determination that redemption is probable, the carrying value will be adjusted to the redemption amount each reporting period.
The redemption value adjustment of Series M Preferred stock is summarized below (in thousands):

| March 31, 2025 |  | December 31, 2024
Series M Preferred Stock | $ | 36,489 |  |  | $ | 36,916 |
Cumulative adjustments to Series M Preferred Stock (1) | $ | 1,794 |  |  | $ | 1,794 |

__________________
(1) Reflects the excess of the redemption value over the accumulated carrying value.
The following table summarizes dividends declared (in thousands):

|  |  | Three Months Ended March 31, |
|  |  |  |  | 2025 |  | 2024 |  |  |
Series M Preferred Stock |  |  |  |  | $ | 770 |  |  | $ | 924 |  |  |  |

The redemption activities of Series M Preferred Stock is summarized below (in thousands):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
Series M Preferred Stock shares redeemed |  |  |  |  | 19 |  |  | 87 |  |  |
Redemption amount, net of redemption fees |  |  |  |  | $ | 466 |  |  | $ | 2,163 |  |  |

14. Related Party Transactions
Ashford Inc.
Advisory Agreement
Ashford LLC, a subsidiary of Ashford Inc., acts as our advisor. Our chairman, Mr. Monty Bennett, also serves as chairman of the board of directors and chief executive officer of Ashford Inc. Under our advisory agreement, we pay advisory fees to Ashford LLC. We pay a monthly base fee equal to 1/12 of the sum of (i) 0.70% of the total market capitalization of our company for the prior month, plus (ii) the Net Asset Fee Adjustment (as defined in our advisory agreement), if any, on the last day of the prior month during which our advisory agreement was in effect; provided, however, in no event shall the base fee for
23

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
any month be less than the minimum base fee as provided by our advisory agreement. The base fee is payable on the fifth business day of each month.
The minimum base fee for Braemar for each month will be equal to the greater of:
▪90% of the base fee paid for the same month in the prior year; and
▪1/12 of the G&A Ratio (as defined) multiplied by the total market capitalization of Braemar.
We are also required to pay Ashford LLC an incentive fee that is measured annually (or for a stub period if the advisory agreement is terminated at other than year-end). Each year that our annual total stockholder return exceeds the average annual total stockholder return for our peer group, we pay Ashford LLC an incentive fee over the following three years, subject to the Fixed Charge Coverage Ratio (“FCCR”) Condition, as defined in the advisory agreement, which relates to the ratio of adjusted EBITDA to fixed charges. We also reimburse Ashford LLC for certain reimbursable overhead and internal audit, risk management advisory and asset management services, as specified in the advisory agreement. We also recorded equity-based compensation expense for equity grants of common stock, PSUs and LTIP units awarded to officers and employees of Ashford LLC in connection with providing advisory services.
The following table summarizes the advisory services fees incurred (in thousands):

|  |  | Three Months Ended March 31, |
|  |  |  |  | 2025 |  | 2024 |  |  |
Advisory services fee |  |  |  |  |  |  |  |  |  |
Base advisory fee |  |  |  |  | $ | 3,576 |  |  | $ | 3,327 |  |  |  |
Reimbursable expenses (1) |  |  |  |  | 3,001 |  |  | 2,265 |  |  |  |
Equity-based compensation (2) |  |  |  |  | (48) |  |  | 1,108 |  |  |  |
Incentive fee |  |  |  |  | 82 |  |  | — |  |  |  |
Total |  |  |  |  | $ | 6,611 |  |  | $ | 6,700 |  |  |  |

________
(1)Reimbursable expenses include overhead, internal audit, risk management advisory, asset management services and deferred cash awards.
(2) Equity-based compensation is associated with equity grants of Braemar’s common stock, PSUs, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.
On each of March 11, 2024 and March 10, 2025, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc. and Ashford LLC (collectively, the “Advisory Agreement Limited Waivers”). Pursuant to the Advisory Agreement Limited Waivers, the Company, the Operating Partnership, TRS and the Advisor waive the operation of any provision in our advisory agreement that would otherwise limit the ability of the Company in its discretion, at the Company’s cost and expense, to award during calendar years 2024 and 2025, respectively, cash incentive compensation to employees and other representatives of the Advisor.
Pursuant to the Company’s hotel management agreements with each hotel management company, the Company bears the economic burden for casualty insurance coverage which includes worker’s compensation, general liability and auto liability coverages. The hotel management companies procure worker’s compensation insurance, the expenses of which are passed through to the Company. Under the advisory agreement and hotel management agreements, Ashford Inc. secures general liability and auto liability policies to cover Ashford Trust, Braemar, Stirling OP, their hotel managers, as needed, and Ashford Inc. The total cost estimates covered by such policies are based on the collective pool of risk exposures from each party. Ashford Inc. delegates the management of the casualty insurance program to Warwick Insurance Company, LLC (“Warwick”), a subsidiary of Ashford Inc. which issues policies covering general liability, workers’ compensation and auto liability losses. Each year Ashford Inc. collects funds from Ashford Trust, Braemar, Stirling OP and their respective hotel management companies, to fund the casualty insurance program as needed, on an allocated basis.
Lismore
We engage Lismore or its subsidiaries to provide debt placement services and assist with loan modifications or refinancings on our behalf and brokerage services.
For the three months ended March 31, 2025 and 2024, we incurred fees from Lismore or its subsidiaries of $1.7 million and $1.1 million, respectively.
24

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Ashford Securities
The Company, Ashford Trust, and Ashford Inc. are party to the Fourth Amended and Restated Contribution Agreement with respect to funding certain expenses of Ashford Securities LLC, a subsidiary of Ashford Inc. (“Ashford Securities”). As of March 31, 2025 and December 31, 2024, Braemar has funded approximately $12.9 million and has a pre-funded balance of $797,000 that is included in “other assets” on the condensed consolidated balance sheet. During the first quarter of 2024, there was a true-up of the funding requirement based on the aggregate capital raised that resulted to a credit to expense of $5.6 million for the three months ended March 31, 2024.
The table below summarizes the amount Braemar has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):

|  |  |  | Three Months Ended March 31,
Line Item |  |  |  |  |  | 2025 |  | 2024 |  |
Corporate, general and administrative |  |  |  |  |  | $ | — |  |  | $ | (5,624) |  |  |

Design and Construction Services
Premier Project Management LLC (“Premier”), a subsidiary of Ashford Inc., provides design and construction services to our hotels, including construction management, interior design, architectural services, and the purchasing, freight management and supervision of installation of FF&E and related services. Pursuant to the design and construction services agreement, we pay Premier: (a) design and construction fees of up to 4% of project costs; and (b) for the following services: (i) architectural (6.5% of total construction costs); (ii) construction management for projects without a general contractor (10% of total construction costs); (iii) interior design (6% of the purchase price of the FF&E designed or selected by Premier); and (iv) FF&E purchasing (8% of the purchase price of FF&E purchased by Premier; provided that if the purchase price exceeds $2.0 million for a single hotel in a calendar year, then the purchasing fee is reduced to 6% of the FF&E purchase price in excess of $2.0 million for such hotel in such calendar year). Such fees are payable monthly as the service is delivered based on percentage complete, as reasonably determined by Premier for each service, or payable as set forth in other agreements.
Hotel Management Services
As of March 31, 2025, Remington Hospitality managed four of our 15 hotel properties.
We pay monthly hotel management fees equal to the greater of approximately $17,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues, as well as annual incentive management fees, if certain operational criteria were met, and other general and administrative expense reimbursements primarily related to accounting services. Our hotel management agreement also requires that we fund property-level operating costs, including the hotel manager's payroll and related costs.
Investment in OpenKey
OpenKey, Inc. (“OpenKey”) is a hospitality-focused mobile key platform that provides a universal smart phone app and related hardware and software for keyless entry into hotel guest rooms.
As of March 31, 2025 and December 31, 2024, the Company had made equity investments in OpenKey totaling $2.9 million resulting in an ownership interest of 7.9% accounted for under the equity method of accounting. During the fourth quarter of 2024, we determined that the estimated fair value of the investment in OpenKey was less than our carrying amount and fully impaired our investment as of December 31, 2024.
The Company also entered into a loan funding agreement with Ashford Inc. and OpenKey. The loan bears interest at an annual rate of 15%. During the fourth quarter of 2024, we determined that the full amount of the note receivable was not collectible, the note receivable was impaired and the recognition of interest income ceased. As of March 31, 2025 and December 31, 2024, the carrying amount of the loan was $145,000 included in “investment of unconsolidated entity” on our condensed consolidated balance sheets.
15. Commitments and Contingencies
Restricted Cash—Under certain management and debt agreements for our hotel properties existing at March 31, 2025, escrow payments are required for insurance, real estate taxes and debt service. In addition, for certain properties based on the terms of the underlying debt and management agreements, we escrow 3% to 5% of gross revenues for capital improvements.
25

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Franchise Fees—We currently have one hotel property that operates under a franchise agreement with a 25-year term. The term begins upon the completion of conversion of the Cameo Beverly Hills. Under the terms of the agreement, we will pay: (i) 3% of gross rooms revenue for the preceding calendar month during the first three years of the agreement; (ii) 4% of gross rooms revenue for the preceding calendar month during year four; and (iii) 5% of the gross rooms revenue for the preceding calendar month for the remainder of the term. As of March 31, 2025, we are currently paying 3% of gross revenues.
The table below summarizes the franchise fees incurred (in thousands):

|  |  |  | Three Months Ended March 31,
Line Item |  |  |  |  |  | 2025 |  | 2024 |  |
Other hotel expenses |  |  |  |  |  | $ | 70 |  |  | $ | 80 |  |  |

Management Fees—Under hotel management agreements for our hotel properties existing at March 31, 2025, we pay a monthly hotel management fee equal to the greater of approximately $17,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues, or in some cases, 3.0% to 5.0% of gross revenues, as well as annual incentive management fees, if applicable. These management agreements expire from November 2029 through December 2065, with renewal options. If we terminate a management agreement prior to its expiration, we may be liable for estimated management fees through the remaining term, liquidated damages or, in certain circumstances, we may substitute a new management agreement. Our hotel management agreements also require that we fund property-level operating costs, including the hotel manager's payroll and related costs.
Income Taxes—We and our subsidiaries file income tax returns in the federal jurisdiction and various states. Tax years 2020 through 2024 remain subject to potential examination by certain federal and state taxing authorities.
Litigation—On December 20, 2016, a class action lawsuit was filed against one of the Company’s hotel management companies in the Superior Court of the State of California in and for the County of Contra Costa alleging violations of certain California employment laws, which class action affects two hotels owned by subsidiaries of the Company. The court has entered an order granting class certification with respect to: (i) a statewide class of non-exempt employees of our manager who were allegedly deprived of rest breaks as a result of our manager’s previous written policy requiring its employees to stay on premises during rest breaks; and (ii) a derivative class of non-exempt former employees of our manager who were not paid for allegedly missed breaks upon separation from employment. Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt-out of the class; however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery. The opt-out period has been extended until such time that discovery has concluded. In May 2023, the trial court requested additional briefing from the parties to determine whether the case should be maintained, dismissed, or the class de-certified. After submission of the briefs, the court requested that the parties submit stipulations for the court to rule upon. On February 13, 2024, the judge ordered the parties to submit additional briefing related to on-site breaks. A tentative settlement has been reached subject to the respective parties obtaining various approvals. As of March 31, 2025, the estimated settlement liability amount has been accrued.
On June 8, 2022, a lawsuit was filed against various Hilton entities on behalf of a class of all hourly employees at all Hilton-branded managed properties in California, including Hilton La Jolla Torrey Pines. The complaint includes claims for unpaid wages, meal and rest break violations, and unreimbursed business expenses, along with various derivative claims including wage statement, final pay, and Private Attorneys General Act (“PAGA”) claims. On November 30, 2023, Hilton mediated this litigation, but it did not result in a settlement. At the end of the mediation, the mediator submitted a mediator’s proposal for approximately $3.5 million, to which the parties have since agreed to. The allocation to Hilton La Jolla Torrey Pines is approximately $401,000, which was accrued as of March 31, 2025.
On August 4, 2020, a lawsuit, Benjamin Zermeno v. Beverly Hills Marriott, was filed in Alameda County Superior Court as a PAGA representative action alleging various wage and hour violations of all Remington Hospitality managed California properties. The plaintiff’s individual claims were compelled to arbitration. On August 18, 2022, another lawsuit, Cristina Catalano v. Beverly Hills Marriott and Mr. C, was filed as a PAGA representative action alleging various wage and hour violations of all Remington Hospitality managed California properties. The co-defendant separately settled and the individual arbitration has also settled. A private mediation was held on December 27, 2024 to globally resolve the three outstanding matters. A tentative settlement was reached subject to the parties finalizing the agreement and court approval. As of March 31, 2025, the estimated settlement liability amount has been accrued.
We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated. To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims:
26

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
employment matters, tax matters and matters relating to compliance with applicable law (for example, the Americans with Disabilities Act and similar state laws). The likelihood of loss from these legal proceedings is based on the definitions within contingency accounting literature. We recognize a loss when we believe the loss is both probable and reasonably estimable. Based on the information available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations or cash flow.
During the quarter ended September 30, 2023, we had a cyber incident that resulted in the potential exposure of certain personal information. We have completed an investigation and have identified certain information that may have been exposed and notified potentially impacted individuals pursuant to applicable state guidelines. All systems have been restored. In February of 2024, two class action lawsuits were filed, one in the U.S. District Court for the Northern District of Texas and a second in the 68th District Court for Dallas County related to the cyber incident. The lawsuit filed in the 68th District Court was subsequently dismissed and refiled in the U.S. District Court for the Northern District of Texas. On March 12, 2024, the court ordered the two cases be consolidated. The consolidated case is currently pending in the U.S. District Court for the Northern District of Texas. The parties have reached an agreement, subject to final Court approval, to resolve the class action suit. The amount of the class settlement is approximately $485,000. The hearing for final Court approval of the settlement is scheduled for August 27, 2025.
Our assessment may change depending upon the development of any current or future legal proceedings, and the final results of such legal proceedings cannot be predicted with certainty. If we ultimately do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods.
16. Segment Reporting
We operate in one reportable business segment within the hotel lodging industry: direct hotel investments. Direct hotel investments refers to owning hotel properties through either acquisition or new development. We report operating results of direct hotel investments on an aggregate basis as substantially all of our hotel investments; (i) offer similar products and services to their customers in the form of hotel rooms, food and beverage, and ancillary services: (ii) utilize third-party hotel management companies to deliver its products and services to its customers; (iii) are designed and operated to appeal to similar individuals, groups, leisure, and business customers; and (iv) third-party hotel managers utilize the same methods (direct hotel sales and various online booking portals) to distribute the Company’s products and services. As of March 31, 2025 and December 31, 2024, all of our hotel properties were in the U.S. and its territories. The Company’s chief operating decision maker (“CODM”) is its President and Chief Executive Officer.
Each hotel property derives revenue primarily from guestroom sales, food and beverage sales, and revenues from other lodging services and amenities. The accounting policies of each operating segment are the same as those described in the summary of significant accounting policies in note 2 of the consolidated financial statements included in our 2024 Annual Report on Form 10-K.
The CODM reviews and makes decisions on all aspects of the Company’s business using all available financial and non-financial data for each hotel individually. Capital allocation decisions to acquire, sell, enhance, redevelop, or perform renewal and replacement expenditures are determined on a hotel-by-hotel basis. Specifically, the CODM reviews the results of each hotel to assess the hotel’s profitability. The key measure the CODM uses to allocate resources and assess performance is individual hotel net income (loss) before interest expense, income taxes, depreciation, and amortization, adjusted to exclude certain items determined by management to not be reflective of its ongoing operating performance or incurred in the normal course of business (Hotel Adjusted EBITDA). The adjustments include gains and losses on hotel dispositions, impairment charges, pre-opening costs associated with extensive renovation projects, property-level legal settlements, restructuring, severance, and management transition costs, and other expenses identified by management to be non-recurring. The CODM does not regularly review asset information by segment.
27

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The following tables include revenues, significant hotel operating expenses, and Hotel Adjusted EBITDA for the Company’s hotels, reconciled to the consolidated amounts included in the Company’s condensed consolidated statements of operations (in thousands):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
REVENUE |  |  |  |  |  |  |  |  |
Rooms |  |  |  |  | $ | 136,092 |  |  | $ | 138,552 |  |  |
Food and beverage |  |  |  |  | 51,788 |  |  | 53,547 |  |  |
Other hotel revenue |  |  |  |  | 27,940 |  |  | 26,980 |  |  |
Total hotel revenue |  |  |  |  | $ | 215,820 |  |  | $ | 219,079 |  |  |
EXPENSES |  |  |  |  |  |  |  |  |
Rooms |  |  |  |  | $ | 28,219 |  |  | $ | 28,264 |  |  |
Food and beverage |  |  |  |  | 40,210 |  |  | 40,717 |  |  |
Direct expenses |  |  |  |  | 9,459 |  |  | 9,769 |  |  |
Indirect expenses: |  |  |  |  |  |  |  |  |
Property, general and administration |  |  |  |  | 15,398 |  |  | 16,603 |  |  |
Sales and marketing |  |  |  |  | 13,173 |  |  | 13,381 |  |  |
Information and telecommunications systems |  |  |  |  | 2,075 |  |  | 2,048 |  |  |
Repairs and maintenance |  |  |  |  | 7,772 |  |  | 7,662 |  |  |
Energy |  |  |  |  | 5,859 |  |  | 5,965 |  |  |
Lease expense |  |  |  |  | 554 |  |  | 1,173 |  |  |
Ownership expenses |  |  |  |  | 982 |  |  | 1,176 |  |  |
Incentive management fee |  |  |  |  | 4,229 |  |  | 3,850 |  |  |
Management fees |  |  |  |  | 6,737 |  |  | 6,866 |  |  |
Property taxes |  |  |  |  | 5,951 |  |  | 5,710 |  |  |
Other taxes |  |  |  |  | 468 |  |  | 513 |  |  |
Insurance |  |  |  |  | 3,993 |  |  | 4,403 |  |  |
Total expenses |  |  |  |  | 145,079 |  |  | 148,100 |  |  |
Hotel adjusted EBITDA |  |  |  |  | $ | 70,741 |  |  | $ | 70,979 |  |  |
|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
Hotel adjusted EBITDA |  |  |  |  | $ | 70,741 |  |  | $ | 70,979 |  |  |
Ownership expenses included in other hotel expenses |  |  |  |  | (875) |  |  | 1,551 |  |  |
Ownership expenses included in property taxes, insurance and other |  |  |  |  | (53) |  |  | (59) |  |  |
Management fees |  |  |  |  | (173) |  |  | (110) |  |  |
Depreciation and amortization |  |  |  |  | (23,395) |  |  | (25,420) |  |  |
Advisory services fee |  |  |  |  | (6,611) |  |  | (6,700) |  |  |
Corporate, general and administrative |  |  |  |  | (2,894) |  |  | 2,226 |  |  |
Equity in earnings (loss) of unconsolidated entities |  |  |  |  | — |  |  | (49) |  |  |
Interest income |  |  |  |  | 1,888 |  |  | 796 |  |  |
Interest expense and amortization of discounts and loan costs |  |  |  |  | (24,827) |  |  | (26,491) |  |  |
Write-off of loan costs and exit fees |  |  |  |  | (1,464) |  |  | (721) |  |  |
Realized and unrealized gain (loss) on derivatives |  |  |  |  | (198) |  |  | 932 |  |  |
Income tax (expense) benefit |  |  |  |  | (1,467) |  |  | (1,452) |  |  |
Net income (loss) |  |  |  |  | $ | 10,672 |  |  | $ | 15,482 |  |  |

28

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains registered trademarks that are the exclusive property of their respective owners, which are companies other than us, including Marriott International®, Hilton Worldwide®, Sofitel®, Hyatt® and Accor®.
FORWARD-LOOKING STATEMENTS
Throughout this Form 10-Q, we make forward-looking statements that are subject to risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or other similar words or expressions. Additionally, statements regarding the following subjects are forward-looking by their nature:
•our business and investment strategy;
•anticipated or expected purchases or sales of assets;
•our projected operating results;
•completion of any pending transactions;
•our understanding of our competition;
•projected capital expenditures; and
•the impact of technology on our operations and business.
Such forward-looking statements are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Additionally, the following factors could cause actual results to vary from our forward-looking statements:
•the factors discussed in our Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (the “SEC”) on March 12, 2025 (the “2024 10-K”), including those set forth under the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Properties” and other filings under the Exchange Act;
•changes in interest rates and inflation;
•macroeconomic conditions, such as a prolonged period of weak economic growth, and volatility in capital markets;
•uncertainty in the business sector and market volatility;
•catastrophic events or geopolitical conditions, such as the conflict between Russia and Ukraine and the more recent Israel-Hamas war and changes to tariffs or trade policies;
•extreme weather conditions, which may cause property damage or interrupt business;
•our ability to raise sufficient capital and/or take other actions to improve our liquidity position or otherwise meet our liquidity requirements;
•general volatility of the capital markets and the market price of our common and preferred stock;
•general business and economic conditions affecting the lodging and travel industry;
•changes in our business or investment strategy;
•availability, terms and deployment of capital;
•risks associated with our ability to effectuate our dividend policy, including factors such as operating results and the economic outlook influencing our board’s decision whether to pay further dividends at levels previously disclosed or to use available cash to pay dividends;
•unanticipated increases in financing and other costs, including changes in interest rates;
•changes in our industry and the markets in which we operate, interest rates, or local economic conditions;
•the degree and nature of our competition;
•actual and potential conflicts of interest with Ashford Trust, Ashford Inc. and its subsidiaries (including Ashford LLC, Remington Hospitality and Premier), Stirling Hotels & Resorts, Inc. (“Stirling Inc.”), and our executive officers and our non-independent directors;
•changes in personnel of Ashford LLC or the lack of availability of qualified personnel;
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•changes in governmental regulations, accounting rules, tax rates and similar matters;
•legislative and regulatory changes, including changes to the Internal Revenue Code of 1986, as amended (the “Code”) and related rules, regulations and interpretations governing the taxation of REITs;
•limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes; and
•future sales and issuances of our common stock or other securities, which might result in dilution and could cause the price of our common stock to decline.
When considering forward-looking statements, you should keep in mind the matters summarized under “Item 1A. Risk Factors” in Part I of our 2024 10-K and this Form 10-Q, and the discussion in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, could cause our actual results and performance to differ significantly from those contained in our forward-looking statements. Accordingly, we cannot guarantee future results or performance. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Form 10-Q. Furthermore, we do not intend to update any of our forward-looking statements after the date of this Form 10-Q to conform these statements to actual results and performance, except as may be required by applicable law.
Overview
We are a Maryland corporation formed in April 2013 that invests primarily in high revenue per available room (“RevPAR”), luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by STR, LLC. Two times the U.S. national average was $199 for the year ended December 31, 2024. We have elected to be taxed as a REIT under the Code. We conduct our business and own substantially all of our assets through our operating partnership, Braemar OP.
We operate in the direct hotel investment segment of the hotel lodging industry. As of March 31, 2025, we owned interests in 15 hotel properties in seven states, the District of Columbia, Puerto Rico and St. Thomas, U.S. Virgin Islands with 3,807 total rooms, or 3,667 net rooms, excluding those attributable to our joint venture partner. The hotel properties in our current portfolio are predominantly located in U.S. urban markets and resort locations with favorable growth characteristics resulting from multiple demand generators. We own 14 of our hotel properties directly and one hotel property through an investment in a majority-owned consolidated entity.
We are advised by Ashford LLC through an advisory agreement. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.
We do not operate any of our hotel properties directly; instead, we contractually engage hotel management companies to operate them for us under management contracts. As of March 31, 2025, Remington Hospitality, a subsidiary of Ashford Inc., managed four of our 15 hotel properties. Third-party management companies managed the remaining hotel properties.
Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to, design and construction services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers compensation and claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and cash management services.
Mr. Monty J. Bennett, chairman of our board of directors and chairman and chief executive officer of Ashford Inc. and his father, Mr. Archie Bennett, Jr. (together, the “Bennetts”), as of March 31, 2025, hold a controlling interest in Ashford Inc. The Bennetts owned approximately 809,937 shares of Ashford Inc. common stock, which represented an approximate 49.3% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc. Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, was convertible (at a conversion price of $117.50 per share) into an additional approximate 4,402,390 shares of Ashford Inc. common stock, which if converted as of March 31, 2025, would have increased the Bennetts’ ownership interest in Ashford Inc. to 86.2%. The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts. Additionally, Mr. Monty J. Bennett acquired voting rights over approximately 590,000 common shares, effective March 25, 2025.
As of March 31, 2025, Mr. Monty J. Bennett and Mr. Archie Bennett, Jr., together owned approximately 3,114,613 shares of our common stock (including common units, LTIP and performance LTIP units), which represented an approximate 4.2% ownership in the Company.
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Recent Developments
On January 14, 2025, the Company amended its mortgage loan secured by the 170-room Ritz-Carlton Lake Tahoe. The terms of the amendment included a $10.0 million principal pay down, extending the current maturity date to July 2025, an interest rate reduction to SOFR + 3.25%, and one six-month extension option subject to satisfaction of certain conditions. The mortgage loan had an initial maturity date in January 2025.
On March 7, 2025, the Company refinanced its $293.2 million mortgage loan secured by The Clancy, The Notary Hotel, Marriott Seattle Waterfront, and Sofitel Chicago Magnificent Mile, which had an interest rate of SOFR + 2.66% and a final maturity date in June of 2025 and its $62.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which had an interest rate of SOFR + 4.75% and a final maturity date in March of 2026. The new $363.0 million mortgage loan bears interest at a floating interest rate of SOFR + 2.52% and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is secured by five hotels: The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, and The Ritz-Carlton Reserve Dorado Beach. The $363.0 million mortgage loan amount represents an approximate 49% loan-to-value based on third-party appraisals completed by the lender. The appraisals valued the hotels at approximately $742 million based on the sum of their “as-is” values.
On April 1, 2025, Ms. Kellie Sirna was appointed to serve on our board of directors, effective immediately, to serve until the next annual meeting of stockholders of the Company or until her successor is duly elected and qualified. The board of directors has determined that Ms. Sirna is an independent director under NYSE listing standards and the Company’s corporate governance guidelines. Ms. Sirna has not been appointed to serve on any committee of the board of directors.
On May 5, 2025, the Company completed the transition of the 415-room Sofitel Chicago Magnificent Mile from a brand-managed hotel to a franchise structure. Under the franchise structure, the hotel will continue to be the Sofitel Chicago Magnificent Mile, but will be managed by Remington Hospitality under the existing terms of its Master Hotel Management Agreement. The management agreement with Remington Hospitality is terminable upon sale of the hotel. The Company plans to renovate the lobby, restaurant, and meeting space over the next two years.
Key Indicators of Operating Performance
We use a variety of operating and other information to evaluate the operating performance of our business. These key indicators include financial information that is prepared in accordance with GAAP, as well as other financial measures that are non-GAAP measures. In addition, we use other information that may not be financial in nature, including statistical information and comparative data. We use this information to measure the operating performance of our individual hotels, groups of hotels and/or business as a whole. We also use these metrics to evaluate the hotels in our portfolio and potential acquisitions to determine each hotel’s contribution to cash flow and its potential to provide attractive long-term total returns. These key indicators include:
•Occupancy. Occupancy means the total number of hotel rooms sold in a given period divided by the total number of rooms available. Occupancy measures the utilization of our hotels’ available capacity. We use occupancy to measure demand at a specific hotel or group of hotels in a given period.
•ADR. ADR means average daily rate and is calculated by dividing total hotel rooms revenues by total number of rooms sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. We use ADR to assess the pricing levels that we are able to generate.
•RevPAR. RevPAR means revenue per available room and is calculated by multiplying ADR by the average daily occupancy. RevPAR is one of the commonly used measures within the hotel industry to evaluate hotel operations. RevPAR does not include revenues from food and beverage sales or parking, telephone or other non-rooms revenues generated by the property. Although RevPAR does not include these ancillary revenues, it is generally considered the leading indicator of core revenues for many hotels. We also use RevPAR to compare the results of our hotels between periods and to analyze results of our comparable hotels (comparable hotels represent hotels we have owned for the entire period). RevPAR improvements attributable to increases in occupancy are generally accompanied by increases in most categories of variable operating costs. RevPAR improvements attributable to increases in ADR are generally accompanied by increases in limited categories of operating costs, such as management fees and franchise fees.
RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR. For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in increased other operating department revenue and expenses. Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs.
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Occupancy, ADR and RevPAR are commonly used measures within the lodging industry to evaluate operating performance. RevPAR is an important statistic for monitoring operating performance at the individual hotel level and across our entire business. We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only rooms revenue. Rooms revenue is dictated by demand (as measured by occupancy), pricing (as measured by ADR) and our available supply of hotel rooms.
We also use funds from operations (“FFO”), Adjusted FFO, earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) and Adjusted EBITDAre as measures of the operating performance of our business. See “Non-GAAP Financial Measures.”
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RESULTS OF OPERATIONS
Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024
The following table summarizes changes in key line items from our condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 (in thousands except percentages):

| Three Months Ended March 31, |  | Favorable (Unfavorable)
| 2025 |  | 2024 |  | $ Change |  | % Change
Revenue |  |  |  |  |  |  |
Rooms | $ | 136,092 |  |  | $ | 138,552 |  |  | $ | (2,460) |  |  | (1.8) | %
Food and beverage | 51,788 |  |  | 53,547 |  |  | (1,759) |  |  | (3.3) |
Other | 27,940 |  |  | 26,980 |  |  | 960 |  |  | 3.6 |
Total hotel revenue | 215,820 |  |  | 219,079 |  |  | (3,259) |  |  | (1.5) |
Expenses |  |  |  |  |  |  |
Hotel operating expenses: |  |  |  |  |  |  |
Rooms | 28,219 |  |  | 28,264 |  |  | 45 |  |  | 0.2 |
Food and beverage | 40,210 |  |  | 40,717 |  |  | 507 |  |  | 1.2 |
Other expenses | 60,376 |  |  | 60,076 |  |  | (300) |  |  | (0.5) |
Management fees | 6,910 |  |  | 6,976 |  |  | 66 |  |  | 0.9 |
Total hotel operating expenses | 135,715 |  |  | 136,033 |  |  | 318 |  |  | 0.2 |
Property taxes, insurance and other | 10,465 |  |  | 10,685 |  |  | 220 |  |  | 2.1 |
Depreciation and amortization | 23,395 |  |  | 25,420 |  |  | 2,025 |  |  | 8.0 |
Advisory services fee | 6,611 |  |  | 6,700 |  |  | 89 |  |  | 1.3 |
Corporate general and administrative | 2,894 |  |  | (2,226) |  |  | (5,120) |  |  | (230.0) |
Total expenses | 179,080 |  |  | 176,612 |  |  | (2,468) |  |  | (1.4) |
Operating income (loss) | 36,740 |  |  | 42,467 |  |  | (5,727) |  |  | (13.5) |
Equity in earnings (loss) of unconsolidated entity | — |  |  | (49) |  |  | 49 |  |  | 100.0 |
Interest income | 1,888 |  |  | 796 |  |  | 1,092 |  |  | 137.2 |
Interest expense and amortization of discounts and loan costs | (24,827) |  |  | (26,491) |  |  | 1,664 |  |  | 6.3 |
Write-off of loan costs and exit fees | (1,464) |  |  | (721) |  |  | (743) |  |  | (103.1) |
Realized and unrealized gain (loss) on derivatives | (198) |  |  | 932 |  |  | (1,130) |  |  | (121.2) |
Income (loss) before income taxes | 12,139 |  |  | 16,934 |  |  | (4,795) |  |  | (28.3) |
Income tax (expense) benefit | (1,467) |  |  | (1,452) |  |  | (15) |  |  | (1.0) |
Net income (loss) | 10,672 |  |  | 15,482 |  |  | (4,810) |  |  | (31.1) |
(Income) loss attributable to noncontrolling interest in consolidated entities | 64 |  |  | 743 |  |  | 679 |  |  | 91.4 |
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | 262 |  |  | (296) |  |  | (558) |  |  | (188.5) |
Net income (loss) attributable to the Company | $ | 10,998 |  |  | $ | 15,929 |  |  | $ | (4,931) |  |  | 31.0 | %

All hotel properties owned for the three months ended March 31, 2025 and 2024 have been included in our results of operations during the respective periods in which they were owned. Based on when a hotel property was acquired or disposed of, operating results for certain hotel properties are not comparable for the three months ended March 31, 2025 and 2024. The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties. The following disposition affects reporting comparability related to our condensed consolidated financial statements:

Hotel Property |  | Location |  | Type |  | Date
Hilton La Jolla Torrey Pines |  | La Jolla, California |  | Disposition |  | July 17, 2024

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The following table illustrates the key performance indicators of all hotel properties that were included in our results of operations during the three months ended March 31, 2025 and 2024:

| Three Months Ended March 31,
| 2025 |  | 2024
Occupancy | 64.58 | % |  | 65.39 | %
ADR (average daily rate) | $ | 611.38 |  |  | $ | 551.46 |
RevPAR (revenue per available room) | $ | 394.81 |  |  | $ | 360.59 |
Rooms revenue (in thousands) | $ | 136,092 |  |  | $ | 138,552 |
Total hotel revenue (in thousands) | $ | 215,820 |  |  | $ | 219,079 |

The following table illustrates the key performance indicators of the 15 comparable hotel properties that were owned for the full three months ended March 31, 2025 and 2024:

| Three Months Ended March 31,
| 2025 |  | 2024
Occupancy | 64.58 | % |  | 64.80 | %
ADR (average daily rate) | $ | 611.38 |  |  | $ | 585.83 |
RevPAR (revenue per available room) | $ | 394.81 |  |  | $ | 379.63 |
Rooms revenue (in thousands) | $ | 136,092 |  |  | $ | 132,257 |
Total hotel revenue (in thousands) | $ | 215,820 |  |  | $ | 207,339 |

Net Income (Loss) Attributable to the Company. Net income attributable to the Company decreased $4.9 million from $15.9 million for the three months ended March 31, 2024 (the “2024 quarter”) to $11.0 million for the three months ended March 31, 2025 (the “2025 quarter”), as a result of the factors discussed below.
Rooms Revenue. Rooms revenue decreased $2.5 million to $136.1 million during the 2025 quarter compared to the 2024 quarter primarily due to the sale of the Hilton La Jolla Torrey Pines in July 2024. During the 2025 quarter, our 15 comparable hotel properties experienced an increase of 4.4% in room rates and a 22 basis point decrease in occupancy compared to the 2024 quarter.
Fluctuations in rooms revenue between the 2025 quarter and the 2024 quarter are a result of the changes in occupancy and ADR between the 2025 quarter and the 2024 quarter as reflected in the table below (dollars in thousands):

Hotel Property |  | Favorable (Unfavorable) |
| Rooms Revenue |  | Occupancy (change in bps) |  | ADR (change in %) |
Comparable |  |  |  |  |  |  |
Capital Hilton (2) |  | $ | 1,673 |  |  | (128) |  |  | 21.5 | % |
Marriott Seattle Waterfront |  | 122 |  |  | 215 |  |  | 0.2 | % |
The Notary Hotel |  | 974 |  |  | 564 |  |  | 11.0 | % |
The Clancy |  | 882 |  |  | (102) |  |  | 12.8 | % |
Sofitel Chicago Magnificent Mile |  | (239) |  |  | (468) |  |  | 3.1 | % |
Pier House Resort & Spa |  | (26) |  |  | (5) |  |  | 0.8 | % |
The Ritz-Carlton St. Thomas |  | (465) |  |  | (96) |  |  | (0.4) | % |
Park Hyatt Beaver Creek Resort & Spa |  | 643 |  |  | 158 |  |  | 3.9 | % |
Hotel Yountville (1) |  | (392) |  |  | (1,391) |  |  | 11.3 | % |
The Ritz-Carlton Sarasota (2) |  | (1,611) |  |  | (215) |  |  | (7.9) | % |
Bardessono Hotel and Spa (2) |  | 237 |  |  | 688 |  |  | (3.1) | % |
The Ritz-Carlton Lake Tahoe |  | 610 |  |  | (395) |  |  | 14.5 | % |
Cameo Beverly Hills |  | (118) |  |  | (723) |  |  | 7.5 | % |
The Ritz-Carlton Reserve Dorado Beach |  | 1,372 |  |  | 641 |  |  | (1.2) | % |
Four Seasons Resort Scottsdale |  | 173 |  |  | 387 |  |  | (3.4) | % |
Total |  | $ | 3,835 |  |  | (22) |  |  | 4.4 | % |
Non-comparable |  |  |  |  |  |  |
Hilton La Jolla Torrey Pines |  | $ | (6,295) |  |  | n/a |  | n/a |

________
(1)This hotel was under renovation during the 2025 quarter.
(2)This hotel was under renovation during the 2024 quarter.
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Food and Beverage Revenue. Food and beverage revenue decreased $1.8 million, or 3.3%, to $51.8 million during the 2025 quarter compared to the 2024 quarter. We experienced an aggregate decrease in food and beverage revenue of $1.3 million at seven comparable hotel properties as well as a decrease of $4.1 million due to the sale of Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of approximately $3.6 million at The Ritz-Carlton Lake Tahoe, Four Seasons Resort Scottsdale, The Ritz-Carlton Reserve Dorado Beach, The Notary Hotel, Marriott Seattle Waterfront, The Ritz-Carlton Sarasota, Pier House Resort & Spa and Bardessono Hotel and Spa.
Other Hotel Revenue. Other hotel revenue, which consists mainly of condominium management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, increased $960,000, or 3.6%, to $27.9 million during the 2025 quarter compared to the 2024 quarter. This increase is attributable to higher other hotel revenue of $2.8 million at 11 comparable hotel properties. These increases were partially offset by a decrease of $1.4 million due to the sale of Hilton La Jolla Torrey Pines as well as an aggregate decrease of approximately $477,000 at Park Hyatt Beaver Creek Resort & Spa, The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton Lake Tahoe and The Ritz-Carlton St. Thomas.
Rooms Expense. Rooms expense decreased $45,000, or 0.2%, to $28.2 million in the 2025 quarter compared to the 2024 quarter. This decrease is attributable to an aggregate decrease in rooms expense of $137,000 at Sofitel Chicago Magnificent Mile, Hotel Yountville, The Ritz-Carlton Sarasota and Pier House Resort & Spa, as well as a decrease of $1.3 million due to the sale of Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of $1.4 million at 11 comparable hotel properties.
Food and Beverage Expense. Food and beverage expense decreased $507,000, or 1.2%, to $40.2 million during the 2025 quarter compared to the 2024 quarter. This decrease is attributable to lower aggregate food and beverage expense of approximately $232,000 at The Ritz-Carlton St. Thomas, Sofitel Chicago Magnificent Mile, Hotel Yountville and Park Hyatt Beaver Creek Resort & Spa, as well as a decrease of $2.1 million due to the sale of Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of approximately $1.9 million at 11 comparable hotel properties.
Other Operating Expenses. Other operating expenses increased $300,000, or 0.5%, to $60.4 million in the 2025 quarter compared to the 2024 quarter. Other operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and incentive management fees.
We experienced a decrease of $311,000 in direct expenses and an increase of $611,000 in indirect expenses and incentive management fees in the 2025 quarter compared to the 2024 quarter. Direct expenses were 4.4% of total hotel revenue in the 2025 quarter and 4.5% in the 2024 quarter.
The decrease in direct expenses is associated with lower direct expenses of approximately $409,000 at nine comparable hotel properties, as well as $217,000 due to the sale of Hilton La Jolla Torrey Pines. These decreases were partially offset by higher direct expenses of $315,000 at The Ritz-Carlton Sarasota, Four Seasons Resort Scottsdale, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile and Cameo Beverly Hills.
The increase in indirect expenses is comprised of increases in: (i) general and administrative costs of $1.0 million comprising an aggregate increase of $1.8 million at our 15 comparable hotel properties partially offset by a decrease of $748,000 at the one disposed hotel property; (ii) incentive management fees of $379,000 at our 15 comparable hotel properties; and (iii) repairs and maintenance of $148,000 comprising an aggregate increase of $431,000 at our 15 comparable hotel properties partially offset by a decrease of $283,000 at the disposed hotel property. These increases are partially offset by decreases in: (i) lease expense of $631,000 comprising of a decrease of $679,000 at the one disposed hotel property partially offset by an aggregate increase of $48,000 at our 15 comparable hotel properties; (ii) marketing costs of $207,000 comprising an aggregate increase of $725,000 at our 15 comparable hotel properties partially offset by a decrease of $932,000 at the one disposed hotel property; and (iii) energy costs of $107,000 comprising a decrease of $460,000 at the one disposed hotel property partially offset by an aggregate increase of $353,000 at our 15 comparable hotel properties.
Management Fees. Base management fees decreased $66,000, or 0.9%, to $6.9 million in the 2025 quarter compared to the 2024 quarter. Management fees decreased $80,000 at six comparable hotel properties and $352,000 due to the sale of Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of $366,000 at The Ritz-Carlton Reserve Dorado Beach, The Notary Hotel, Capital Hilton, Four Seasons Resort Scottsdale, The Clancy, Marriott Seattle Waterfront, Bardessono Hotel and Spa, Pier House Resort & Spa and Cameo Beverly Hills.
Property Taxes, Insurance and Other. Property taxes, insurance and other decreased $220,000, or 2.1%, to $10.5 million in the 2025 quarter compared to the 2024 quarter. This decrease is primarily attributable to a decrease of $789,000 due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of $344,000 at six comparable hotel properties. These decreases were partially offset by an aggregate increase of approximately $913,000 at nine comparable hotel properties.
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Depreciation and Amortization. Depreciation and amortization decreased $2.0 million, or 8.0%, to $23.4 million for the 2025 quarter compared to the 2024 quarter. This decrease is comprised of a decrease of $1.1 million due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of $3.1 million at Capital Hilton, The Notary Hotel, The Clancy, Pier House Resort & Spa, The Ritz-Carlton St. Thomas, Sofitel Chicago Magnificent Mile, Marriott Seattle Waterfront. These decreases were partially offset by an aggregate increase of $2.1 million at eight comparable hotel properties.
Advisory Services Fee. Advisory services fee decreased $89,000, or 1.3%, to $6.6 million in the 2025 quarter compared to the 2024 quarter due to lower equity-based compensation of $1.2 million, partially offset by higher reimbursable expenses of $736,000, higher base advisory fee of $249,000 and a higher incentive fee of $82,000.
In the 2025 quarter, we recorded an advisory services fee of $6.6 million, which included a base advisory fee of $3.6 million, reimbursable expenses of $3.0 million, an incentive fee of $82,000 and a credit to expense of $48,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.
In the 2024 quarter, we recorded an advisory services fee of $6.7 million, which included a base advisory fee of $3.3 million, reimbursable expenses of $2.3 million and $1.1 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.
Corporate General and Administrative. Corporate general and administrative expense was $2.9 million in the 2025 quarter compared to $(2.2) million in the 2024 quarter. The increase in corporate general and administrative expenses is primarily attributable to a revision to the estimated contribution amount associated with the Fourth Amended and Restated Contribution Agreement with Ashford Securities that resulted in a $5.6 million expense reduction in the 2024 quarter as well as higher public company costs of $149,000 and higher miscellaneous expenses of $488,000 in the 2025 quarter. These increases were partially offset by lower professional fees of $1.1 million.
Equity in Earnings (Loss) of Unconsolidated Entity. In the 2024 quarter we recorded equity in loss of unconsolidated entity of $49,000 related to our investment in OpenKey. There was no equity in earnings (loss) in the 2025 quarter as a result of impairing the OpenKey investment in the fourth quarter of 2024.
Interest Income. Interest income was $1.9 million and $796,000 in the 2025 quarter and the 2024 quarter, respectively. The increase in interest income in the 2025 quarter was primarily attributable to interest income associated with a tranche of CMBS included in investment in securities in the 2025 quarter compared to the 2024 quarter, partially offset by lower excess cash balances.
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $1.7 million, or 6.3%, to $24.8 million for the 2025 quarter compared to the 2024 quarter. The decrease is primarily due to lower interest expense from lower average interest rates in the 2025 quarter partially offset by higher amortization of loan costs of approximately $821,000 in the 2025 quarter compared to the 2024 quarter. The average SOFR rates for the 2025 quarter and the 2024 quarter were 4.32% and 5.33%, respectively.
Write-off of Loan Costs and Exit Fees. Write-off of loan costs and exit fees was $1.5 million in the 2025 quarter related to various loan refinances and modifications. Write-off of loan costs and exit fees was $721,000 in the 2024 quarter related to related to various loan modifications.
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized loss on derivatives of $198,000 for the 2025 quarter consisted of an unrealized loss on interest rate caps of $386,000, partially offset by a realized gain of $188,000 associated with payments received from counterparties on in-the-money interest rate caps.
Realized and unrealized gain on derivatives of $932,000 for the 2024 quarter primarily consisted of a realized gain of $1.7 million associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $751,000.
Income Tax (Expense) Benefit. Income tax expense increased $15,000, from $1.5 million in the 2024 quarter to $1.5 million in the 2025 quarter.
(Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities. Our noncontrolling interest partner in consolidated entities was allocated a loss of $64,000 and $743,000 in the 2025 quarter and the 2024 quarter, respectively. As of March 31, 2025, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity. As of March 31, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity.
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Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated a net loss of $262,000 in the 2025 quarter and net income of $296,000 in the 2024 quarter. Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 9.33% and 7.75% as of March 31, 2025 and 2024, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our hotel properties, including:
•advisory fees payable to Ashford LLC;
•recurring maintenance necessary to maintain our hotel properties in accordance with brand standards;
•interest expense and scheduled principal payments on outstanding indebtedness;
•dividends on our common stock;
•dividends on our preferred stock;
•redemptions of our non-traded preferred stock; and
•capital expenditures to improve our hotel properties.
We expect to meet our short-term liquidity requirements generally through net cash provided by operations, capital market activities, asset sales and existing cash balances.
Pursuant to the advisory agreement between us and our Advisor, we must pay our Advisor on a monthly basis a base advisory fee, subject to a minimum base advisory fee. The minimum base advisory fee is equal to the greater of: (i) 90% of the base fee paid for the same month in the prior fiscal year; and (ii) 1/12 th of the “G&A Ratio” for the most recently completed fiscal quarter multiplied by our total market capitalization on the last balance sheet date included in the most recent quarterly report on Form 10-Q or annual report on Form 10-K that we file with the SEC. Thus, even if our total market capitalization and performance decline, we will still be required to make payments to our Advisor equal to the minimum base advisory fee, which could adversely impact our liquidity and financial condition.
Our long-term liquidity requirements consist primarily of funds necessary to pay for the costs of acquiring additional hotel properties and redevelopments, renovations, expansions and other capital expenditures that need to be made periodically with respect to our hotel properties and scheduled debt payments. We expect to meet our long-term liquidity requirements through various sources of capital, including future common and preferred equity issuances, existing working capital, net cash provided by operations, hotel mortgage indebtedness and other secured and unsecured borrowings. However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity and market perceptions about us. The success of our business strategy will depend, in part, on our ability to access these various capital sources. While management cannot provide any assurances, management believes that our cash flow from operations, our existing cash balances and investment in securities will be adequate to meet upcoming anticipated requirements for interest and principal payments on debt (excluding any potential final maturity principal payments and paydowns for extension tests), working capital, and capital expenditures for the next 12 months and dividends required to maintain our status as a REIT for U.S. federal income tax purposes.
Our hotel properties will require periodic capital expenditures and renovations to remain competitive. In addition, acquisitions, redevelopments or expansions of hotel properties may require significant capital outlays. We may not be able to fund such capital improvements solely from net cash provided by operations because we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deductions for dividends paid and excluding net capital gains, to qualify and maintain our qualification as a REIT, and we are subject to tax on any retained income and gains. As a result, our ability to fund capital expenditures, acquisitions or hotel redevelopment through retained earnings is very limited. Consequently, we expect to rely heavily upon the availability of debt or equity capital for these purposes. If we are unable to obtain the necessary capital on favorable terms, or at all, our financial condition, liquidity, results of operations and prospects could be materially and adversely affected.
Certain of our loan agreements contain cash trap provisions that may be triggered if the performance of our hotel properties declines. When these provisions are triggered, substantially all of the profit generated by the hotel properties securing such loan is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. This could affect our liquidity and our ability to make distributions to our stockholders until such time that a cash trap is no longer in effect for such loan. These cash trap provisions have been triggered on one mortgage loan, as discussed below.
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Our loan that is in a cash trap may remain subject to the cash trap provisions for a substantial period of time which could limit our flexibility and adversely affect our financial condition or our qualification as a REIT. As of March 31, 2025, the mortgage loan secured by The Ritz-Carlton Lake Tahoe was in a cash trap. The amount of cash in the cash trap as of March 31, 2025 was $0.
As of March 31, 2025, the Company held cash and cash equivalents of $81.7 million and restricted cash of $54.5 million, the vast majority of which is comprised of lender and manager-held reserves. As of March 31, 2025, $25.5 million was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs. As of March 31, 2025, our net debt to gross assets was 42.3%.
The Company’s cash and cash equivalents are primarily comprised of corporate cash invested in short-term U.S. Treasury securities with maturity dates of less than 90 days and corporate cash held at commercial banks in Insured Cash Sweep (“ICS”) accounts, which are fully insured by the FDIC. The Company’s cash and cash equivalents also includes property-level operating cash deposited with commercial banks that have been designated as a Global Systemically Important Bank (“G-SIB”) by the Financial Stability Board (“FSB”) and a small amount deposited with other commercial banks.
Equity Transactions
On November 13, 2019, we filed an initial registration statement with the SEC, as amended on January 24, 2020, for shares of our non-traded Series E Redeemable Preferred Stock (the “Series E Preferred Stock”) and our non-traded Series M Redeemable Preferred Stock (the “Series M Preferred Stock”). The registration statement became effective on February 21, 2020, and contemplates the issuance and sale of up to 20,000,000 shares of Series E Preferred Stock or Series M Preferred Stock in a primary offering and up to 8,000,000 shares of Series E Preferred Stock or Series M Preferred Stock pursuant to a dividend reinvestment plan. On February 25, 2020, we filed our prospectus with the SEC. Ashford Securities, a subsidiary of Ashford Inc., serves as the dealer manager and wholesaler of the Series E Preferred Stock and Series M Preferred Stock. On April 2, 2021, the Company filed with the State Department of Assessments and Taxation of the State of Maryland (the “SDAT”) articles supplementary to the Company’s Articles of Amendment and Restatement that provided for: (i) reclassifying the existing 28,000,000 shares of Series E Preferred Stock and 28,000,000 shares of Series M Preferred Stock as unissued shares of preferred stock; (ii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series E Preferred Stock (the “Series E Articles Supplementary”); and (iii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series M Preferred Stock (the “Series M Articles Supplementary”). The Series E Articles Supplementary and Series M Articles Supplementary were filed to revise the preferred stock terms related to the dividend rate, our optional redemption right and certain other voting rights. The Company also caused its operating partnership to execute Amendment No. 5 to the Third Amended and Restated Agreement of Limited Partnership to amend the terms of its operating partnership agreement to conform to the terms of the Series E Articles Supplementary and Series M Articles Supplementary. The Company issued approximately 16.4 million shares of Series E Preferred Stock and received net proceeds of approximately $369.5 million and issued approximately 2.0 million shares of Series M Preferred Stock and received net proceeds of approximately $47.6 million. On February 21, 2023, the Company announced the closing of its offering of the Series E Preferred Stock and Series M Preferred Stock.
On July 12, 2021, the Company entered into an equity distribution agreement (the “Virtu July 2021 EDA”) with Virtu to sell from time-to-time shares of our common stock having an aggregate offering price of up to $100 million. We will pay Virtu a commission of approximately 1.0% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale. As of May 6, 2025, the Company has sold approximately 4.7 million shares of common stock under the Virtu July 2021 EDA and received gross proceeds of approximately $24.0 million.
On May 3, 2024, our board of directors approved a new share repurchase program, pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share, having an aggregate value of up to $50 million. The Company may repurchase shares through open market transactions, privately negotiated transactions or other means. The timing and amount of any transactions will be subject to the discretion of the Company based upon market conditions, and the program may be suspended or terminated at any time by the Company at its discretion without prior notice. The board of directors’ authorization replaced any previous repurchase authorizations. As of May 6, 2025, the Company has not repurchased any common stock pursuant to the plan.
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Debt Transactions
On January 14, 2025, the Company amended its mortgage loan secured by the 170-room Ritz-Carlton Lake Tahoe. The terms of the amendment included a $10.0 million principal pay down, extending the current maturity date to July 2025, an interest rate reduction to SOFR + 3.25%, and one six-month extension option subject to satisfaction of certain conditions. The mortgage loan had an initial maturity date in January 2025. The $43.4 million current mortgage loan amount represents an approximate 27% loan-to-value based on a third-party appraisal completed by the lender. The appraisal valued the hotel at $160 million based on its “as-is” value.
On March 7, 2025, the Company refinanced its $293.2 million mortgage loan secured by The Clancy, The Notary Hotel, Marriott Seattle Waterfront, and Sofitel Chicago Magnificent Mile, which had an interest rate of SOFR + 2.66% and a final maturity date in June of 2025 and its $62.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which had an interest rate of SOFR + 4.75% and a final maturity date in March of 2026. The new $363.0 million mortgage loan bears interest at a floating interest rate of SOFR + 2.52% and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is secured by five hotels: The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, and The Ritz-Carlton Reserve Dorado Beach. The $363.0 million mortgage loan amount represents an approximate 49% loan-to-value based on third-party appraisals completed by the lender. The appraisals valued the hotels at $742 million based on the sum of their “as-is” values.
Sources and Uses of Cash
We had approximately $81.7 million and $135.5 million of cash and cash equivalents at March 31, 2025 and December 31, 2024, respectively. We anticipate that our principal sources of funds to meet our cash requirements will include cash on hand, positive cash flow from operations and capital market activities.
Net Cash Flows Provided by (Used in) Operating Activities. Net cash flows provided by operating activities were $15.1 million and $36.0 million for the three months ended March 31, 2025 and 2024, respectively. Cash flows from operations were impacted by changes in hotel operations and the disposition of a hotel property in the third quarter of 2024. Cash flows from operations are also impacted by the timing of working capital cash flows, such as collecting receivables from hotel guests, paying vendors, settling with related parties and settling with hotel managers.
Net Cash Flows Provided by (Used in) Investing Activities. For the three months ended March 31, 2025, net cash flows used in investing activities were $14.2 million. The cash outflows were primarily attributable to $15.3 million of capital improvements made to various hotel properties, partially offset by cash inflows of $1.1 million from property insurance proceeds. Our capital improvements consisted of approximately $10.5 million of return on investment capital projects and approximately $4.8 million of renewal and replacement capital projects.
For the three months ended March 31, 2024, net cash flows used in investing activities were $22.8 million. These cash outflows were primarily attributable to $23.3 million of capital improvements made to various hotel properties partially offset by cash inflows of $504,000 related to proceeds from property insurance. Our capital improvements consisted of approximately $17.6 million of return on investment capital projects and approximately $5.7 million of renewal and replacement capital projects.
Return on investment capital projects are designed to improve the positioning of our hotel properties within their markets and competitive sets. Renewal and replacement capital projects are designed to maintain the quality and competitiveness of our hotels.
Net Cash Flows Provided by (Used in) Financing Activities. For the three months ended March 31, 2025, net cash flows used in financing activities were $49.8 million. Cash outflows primarily consisted of $365.2 million of repayments of indebtedness, $26.2 million for cash redemptions of Series E and Series M preferred stock, $12.2 million of dividend and distribution payments, $8.9 million of payments of loan costs and exit fees, $508,000 to purchase interest rate caps, and $92,000 from the redemption of operating partnership units. These cash outflows were partially offset by cash inflows of $363.0 million from borrowings on indebtedness, and $244,000 of proceeds from in-the-money interest rate caps.
For the three months ended March 31, 2024, net cash flows provided by financing activities were $39.7 million. Cash inflows primarily consisted of cash inflows of $62.0 million from borrowings on indebtedness and $1.6 million of proceeds from in-the-money interest rate caps. These cash inflows were partially offset by cash outflows primarily consisting of $13.1 million of dividend and distribution payments, $991,000 to purchase interest rate caps, $3.2 million of payments of loan costs and exit fees, and $6.6 million for cash redemptions of Series E and Series M preferred stock.
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Dividend Policy
On December 10, 2024, our board of directors approved the Company’s dividend policy for 2025. The Company expects to pay a quarterly cash dividend of $0.05 per share for the Company’s common stock for 2025, or $0.20 per share on an annualized basis. On January 13, 2025, our board of directors declared a quarterly cash dividend of $0.05 per diluted share for the first quarter of 2025. On April 2, 2025, our board of directors declared a quarterly cash dividend of $0.05 per diluted share for the second quarter of 2025. The approval of our dividend policy does not commit our board of directors to declare future dividends with respect to any quantity or the amount thereof. The board of directors will continue to review its dividend policy on a quarter-to-quarter basis. For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof.
Seasonality
Our properties’ operations historically have been seasonal as certain properties maintain higher occupancy rates during the summer months and some during the winter months. This seasonality pattern can cause fluctuations in our quarterly lease revenue under our percentage leases. Quarterly revenue also may be adversely affected by renovations and repositionings, our managers’ effectiveness in generating business and by events beyond our control, such as pandemics, extreme weather conditions, natural disasters, terrorist attacks or alerts, civil unrest, government shutdowns, airline strikes or reduced airline capacity, economic factors and other considerations affecting travel. To the extent that cash flows from operations and cash on hand are insufficient during any quarter due to temporary or seasonal fluctuations in lease revenue, we expect to utilize borrowings to fund distributions required to maintain our REIT status. However, we cannot make any assurances that we will make distributions in the future.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Our accounting policies that are critical or most important to understanding our financial condition and results of operations and that require management to make the most difficult judgments are described in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Form 10-K. There have been no material changes in these critical accounting policies.
Non-GAAP Financial Measures
The following non-GAAP presentations of EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO are presented to help our investors evaluate our operating performance.
EBITDA is defined as net income (loss) before interest expense and amortization of loan costs, depreciation and amortization, income taxes, equity in (earnings) loss of unconsolidated entity and after the Company’s portion of EBITDA of OpenKey. In addition, we exclude impairment on real estate, (gain) loss on disposition of assets and hotel property and the Company’s portion of EBITDAre of OpenKey from EBITDA to calculate EBITDA for real estate, or EBITDAre, as defined by NAREIT.
We then further adjust EBITDAre to exclude certain additional items such as amortization of favorable (unfavorable) contract assets (liabilities), transaction and conversion costs, other income/expense, write-off of loan costs and exit fees, gain/loss on insurance settlements, legal, advisory and settlement costs, advisory services incentive fee, gain/loss on extinguishment of debt, stock/unit-based compensation and the Company’s portion of adjustments to EBITDAre of OpenKey and non-cash items such as unrealized gain/ loss on derivatives.
We present EBITDA, EBITDAre and Adjusted EBITDAre because we believe they are useful to an investor in evaluating our operating performance because they provide investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe they help investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results. Our management team also uses EBITDA as one measure in determining the value of acquisitions and dispositions. EBITDA, EBITDAre and Adjusted EBITDAre as calculated by us may not be comparable to EBITDA, EBITDAre and Adjusted EBITDAre reported by other companies that do not define EBITDA, EBITDAre and Adjusted EBITDAre exactly as we define the terms. EBITDA, EBITDAre and Adjusted EBITDAre do not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP
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as an indicator of performance or as an alternative to cash flows from operating activities as determined by GAAP as an indicator of liquidity.
The following table reconciles net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAre (in thousands) (unaudited):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
Net income (loss) |  |  |  |  | $ | 10,672 |  |  | $ | 15,482 |  |  |
Interest expense and amortization of loan costs |  |  |  |  | 24,827 |  |  | 26,491 |  |  |
Depreciation and amortization |  |  |  |  | 23,395 |  |  | 25,420 |  |  |
Income tax expense (benefit) |  |  |  |  | 1,467 |  |  | 1,452 |  |  |
Equity in (earnings) loss of unconsolidated entity |  |  |  |  | — |  |  | 49 |  |  |
Company’s portion of EBITDA of OpenKey |  |  |  |  | — |  |  | (57) |  |  |
EBITDA |  |  |  |  | 60,361 |  |  | 68,837 |  |  |
(Gain) loss on disposition of assets and hotel property |  |  |  |  | — |  |  | — |  |  |
EBITDAre |  |  |  |  | 60,361 |  |  | 68,837 |  |  |
Amortization of favorable (unfavorable) contract assets (liabilities) |  |  |  |  | 107 |  |  | 119 |  |  |
Transaction and conversion costs (1) |  |  |  |  | 695 |  |  | (5,627) |  |  |
Write-off of premiums, loan costs and exit fees |  |  |  |  | 1,464 |  |  | 721 |  |  |
Realized and unrealized (gain) loss on derivatives |  |  |  |  | 198 |  |  | (932) |  |  |
Stock/unit-based compensation |  |  |  |  | (48) |  |  | 1,127 |  |  |
Legal, advisory and settlement costs |  |  |  |  | 144 |  |  | 1,947 |  |  |
Advisory services incentive fee |  |  |  |  | 82 |  |  | — |  |  |
Adjusted EBITDAre |  |  |  |  | $ | 63,003 |  |  | $ | 66,192 |  |  |

__________________
(1) Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in 2024 included a true up of these expenses based on capital raised.

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FFO is calculated on the basis defined by NAREIT, which is net income (loss) attributable to common stockholders, computed in accordance with GAAP, excluding gains or losses on disposition of assets, plus impairment charges on real estate, depreciation and amortization of real estate assets, and after redeemable noncontrolling interests in the operating partnership and adjustments for unconsolidated entities. NAREIT developed FFO as a relative measure of performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the basis determined by GAAP. Our calculation of Adjusted FFO excludes transaction and conversion costs, other income/expense, write-off of premiums, loan costs and exit fees, legal, advisory and settlement costs, stock/unit-based compensation, severance, gain/loss on insurance settlements, gain/loss on extinguishment of debt, and non-cash items such as deemed dividends on redeemable preferred stock, interest expense accretion on refundable membership club deposits, amortization of loan costs, unrealized gain/loss on derivatives and the Company’s portion of adjustments to FFO of OpenKey. FFO and Adjusted FFO exclude amounts attributable to the portion of a partnership owned by the third party. We present FFO and Adjusted FFO because we consider FFO and Adjusted FFO important supplemental measures of our operational performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO and Adjusted FFO when reporting their results. FFO and Adjusted FFO are intended to exclude GAAP historical cost depreciation and amortization, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO and Adjusted FFO exclude depreciation and amortization related to real estate assets, gains and losses from real property dispositions and impairment losses on real estate assets, FFO and Adjusted FFO provide performance measures that, when compared year over year, reflect the effect to operations from trends in occupancy, guestroom rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. We consider FFO and Adjusted FFO to be appropriate measures of our ongoing normalized operating performance as a REIT. We compute FFO in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that either do not define the term in accordance with the current NAREIT definition or interpret the NAREIT definition differently than us. FFO and Adjusted FFO do not represent cash generated from operating activities as determined by GAAP and should not be considered as an alternative to GAAP net income or loss as an indication of our financial performance or GAAP cash flows from operating activities as a measure of our liquidity. FFO and Adjusted FFO are also not indicative of funds available to satisfy our cash needs, including our ability to make cash distributions. However, to facilitate a clear understanding of our historical operating results, we believe that FFO and Adjusted FFO should be considered along with our net income or loss and cash flows reported in our condensed consolidated financial statements.
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The following table reconciles net income (loss) to FFO and Adjusted FFO (in thousands) (unaudited):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
Net income (loss) |  |  |  |  | $ | 10,672 |  |  | $ | 15,482 |  |  |
(Income) loss attributable to noncontrolling interest in consolidated entities |  |  |  |  | 64 |  |  | 743 |  |  |
Net (Income) loss attributable to redeemable noncontrolling interests in operating partnership |  |  |  |  | 262 |  |  | (296) |  |  |
Preferred dividends |  |  |  |  | (9,269) |  |  | (10,407) |  |  |
Deemed dividends on preferred stock |  |  |  |  | (4,276) |  |  | (1,998) |  |  |
Net income (loss) attributable to common stockholders |  |  |  |  | (2,547) |  |  | 3,524 |  |  |
Depreciation and amortization on real estate (1) |  |  |  |  | 22,676 |  |  | 24,180 |  |  |
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership |  |  |  |  | (262) |  |  | 296 |  |  |
Equity in (earnings) loss of unconsolidated entity |  |  |  |  | — |  |  | 49 |  |  |
Company’s portion of FFO of OpenKey |  |  |  |  | — |  |  | (67) |  |  |
FFO available to common stockholders and OP unitholders |  |  |  |  | 19,867 |  |  | 27,982 |  |  |
Deemed dividends on preferred stock |  |  |  |  | 4,276 |  |  | 1,998 |  |  |
Transaction and conversion costs (2) |  |  |  |  | 695 |  |  | (5,627) |  |  |
Write-off of premiums, loan costs and exit fees |  |  |  |  | 1,464 |  |  | 721 |  |  |
Unrealized (gain) loss on derivatives |  |  |  |  | 386 |  |  | 739 |  |  |
Stock/unit-based compensation |  |  |  |  | (48) |  |  | 1,127 |  |  |
Legal, advisory and settlement costs |  |  |  |  | 144 |  |  | 1,947 |  |  |
Interest expense accretion on refundable membership club deposits |  |  |  |  | 151 |  |  | 165 |  |  |
Amortization of loan costs (1) |  |  |  |  | 2,097 |  |  | 1,208 |  |  |
Advisory services incentive fee |  |  |  |  | 82 |  |  | — |  |  |
Adjusted FFO available to common stockholders and OP unitholders |  |  |  |  | $ | 29,114 |  |  | $ | 30,260 |  |  |

____________________
(1)Net of adjustment for noncontrolling interest in consolidated entities. The following table presents the amounts of the adjustments for noncontrolling interests for each line item:

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
Depreciation and amortization on real estate |  |  |  |  | $ | (719) |  |  | $ | (1,240) |  |  |
Amortization of loan costs |  |  |  |  | (35) |  |  | (103) |  |  |

(2) Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in 2024 included a true up of these expenses based on capital raised.
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The following table presents certain information related to our hotel properties as of March 31, 2025:

Hotel Property |  | Location |  |  |  | Total Rooms |  | % Owned |  | Owned Rooms |  |  |  |  |  |
Fee Simple Properties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital Hilton |  | Washington, D.C. |  |  |  | 559 |  |  | 75 | % |  | 419 |  |  |  |  |  |  |
Marriott Seattle Waterfront |  | Seattle, WA |  |  |  | 369 |  |  | 100 | % |  | 369 |  |  |  |  |  |  |
The Notary Hotel |  | Philadelphia, PA |  |  |  | 499 |  |  | 100 | % |  | 499 |  |  |  |  |  |  |
The Clancy |  | San Francisco, CA |  |  |  | 410 |  |  | 100 | % |  | 410 |  |  |  |  |  |  |
Sofitel Chicago Magnificent Mile |  | Chicago, IL |  |  |  | 415 |  |  | 100 | % |  | 415 |  |  |  |  |  |  |
Pier House Resort & Spa |  | Key West, FL |  |  |  | 142 |  |  | 100 | % |  | 142 |  |  |  |  |  |  |
The Ritz-Carlton St. Thomas |  | St. Thomas, USVI |  |  |  | 180 |  |  | 100 | % |  | 180 |  |  |  |  |  |  |
Park Hyatt Beaver Creek Resort & Spa |  | Beaver Creek, CO |  |  |  | 193 |  |  | 100 | % |  | 193 |  |  |  |  |  |  |
Hotel Yountville |  | Yountville, CA |  |  |  | 80 |  |  | 100 | % |  | 80 |  |  |  |  |  |  |
The Ritz-Carlton Sarasota |  | Sarasota, FL |  |  |  | 276 |  |  | 100 | % |  | 276 |  |  |  |  |  |  |
The Ritz-Carlton Lake Tahoe (1) |  | Truckee, CA |  |  |  | 170 |  |  | 100 | % |  | 170 |  |  |  |  |  |  |
Cameo Beverly Hills (2) |  | Los Angeles, CA |  |  |  | 143 |  |  | 100 | % |  | 143 |  |  |  |  |  |  |
The Ritz-Carlton Reserve Dorado Beach (3) |  | Dorado, Puerto Rico |  |  |  | 96 |  |  | 100 | % |  | 96 |  |  |  |  |  |
Four Seasons Resort Scottsdale |  | Scottsdale, AZ |  |  |  | 210 |  |  | 100 | % |  | 210 |  |  |  |  |  |
Ground Lease Property (4) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bardessono Hotel and Spa (5) |  | Yountville, CA |  |  |  | 65 |  |  | 100 | % |  | 65 |  |  |  |  |  |  |
Total |  |  |  |  |  | 3,807 |  |  |  |  | 3,667 |  |  |  |  |  |  |

________
(1) The above information does not include the operations of the voluntary rental program with respect to condominium units not owned by the Company.
(2) Includes 138 hotel rooms and five residences adjacent to the hotel. On August 1, 2023, the Company announced the rebranding and planned conversion of its Mr. C Beverly Hills in Los Angeles, California to the Cameo Beverly Hills. Following an extensive renovation, which is expected to be completed by the end of 2025, the hotel will join LXR Hotels & Resorts.
(3) The above information does not include the operations of the voluntary rental program with respect to residential units not owned by the Company.
(4) Some of our hotel properties are on land subject to ground leases, one of which covers the entire property.
(5) The initial ground lease expires in 2065. The ground lease contains two 25-year extension options, at our election.
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Our primary market risk exposure consists of changes in interest rates on borrowings under our debt instruments that bear interest at variable rates that fluctuate with market interest rates. To the extent that we acquire assets or conduct operations in an international jurisdiction, we will also have currency exchange risk. We may enter into certain hedging arrangements in order to manage interest rate and currency fluctuations. The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market interest rates.
As of March 31, 2025, our total indebtedness of approximately $1.2 billion included approximately $1.1 billion of variable-rate debt. The impact on the results of operations of a 25-basis point change in the interest rate on the outstanding balance of variable-rate debt as of March 31, 2025, would be approximately $2.8 million per year. Interest rate changes have no impact on the remaining $86.3 million of fixed-rate debt.
The above amounts were determined based on the impact of hypothetical interest rates on our borrowings and assume no changes in our capital structure. The information presented above includes those exposures that existed as of March 31, 2025, but it does not consider exposures or positions that could arise after that date. Accordingly, the information presented herein has limited predictive value. As a result, the ultimate realized gain or loss with respect to interest rate fluctuations will depend on exposures that arise during the period, the hedging strategies at the time, and the related interest rates.
ITEM 4.CONTROLS AND PROCEDURES
Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2025, our disclosure controls and procedures are effective to ensure that: (i) information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and (ii) information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.
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There have been no changes in our internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II. OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
On December 20, 2016, a class action lawsuit was filed against one of the Company’s hotel management companies in the Superior Court of the State of California in and for the County of Contra Costa alleging violations of certain California employment laws, which class action affects two hotels owned by subsidiaries of the Company. The court has entered an order granting class certification with respect to: (i) a statewide class of non-exempt employees of our manager who were allegedly deprived of rest breaks as a result of our manager’s previous written policy requiring its employees to stay on premises during rest breaks; and (ii) a derivative class of non-exempt former employees of our manager who were not paid for allegedly missed breaks upon separation from employment. Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt out of the class; however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery. The opt-out period has been extended until such time that discovery has concluded. In May 2023, the trial court requested additional briefing from the parties to determine whether the case should be maintained, dismissed, or the class de-certified. After submission of the briefs, the court requested that the parties submit stipulations for the court to rule upon. On February 13, 2024, the judge ordered the parties to submit additional briefing related to on-site breaks. A tentative settlement has been reached subject to the respective parties obtaining various approvals. As of March 31, 2025, the estimated settlement liability amount has been accrued.
On June 8, 2022 a lawsuit was filed against various Hilton entities on behalf of a class of all hourly employees at all Hilton-branded managed properties in California, including Hilton La Jolla Torrey Pines. The complaint includes claims for unpaid wages, meal and rest break violations, and unreimbursed business expenses, along with various derivative claims including wage statement, final pay, and Private Attorneys General Act (“PAGA”) claims. On November 30, 2023, Hilton mediated this litigation, but it did not result in a settlement. At the end of the mediation, the mediator submitted a mediator’s proposal for approximately $3.5 million, which the parties have since agreed to. The allocation to Hilton La Jolla Torrey Pines is approximately $401,000, which was accrued as of March 31, 2025.
On August 4, 2020, a lawsuit, Benjamin Zermeno v. Beverly Hills Marriott, was filed in Alameda County Superior Court as a PAGA representative action alleging various wage and hour violations of all Remington Hospitality managed California properties. The plaintiff’s individual claims were compelled to arbitration. On August 18, 2022, another lawsuit, Cristina Catalano v. Beverly Hills Marriott and Mr. C, was filed as a PAGA representative action alleging various wage and hour violations of all Remington Hospitality managed California properties. The co-defendant separately settled and the individual arbitration has also settled. A private mediation was held on December 27, 2024 to globally resolve the three outstanding matters. A tentative settlement was reached subject to the parties finalizing the agreement and court approval. As of March 31, 2025, the estimated settlement liability amount has been accrued.
We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated. To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims: employment matters, tax matters and matters relating to compliance with applicable law (for example, the Americans with Disabilities Act and similar state laws). The likelihood of loss from these legal proceedings is based on the definitions within contingency accounting literature. We recognize a loss when we believe the loss is both probable and reasonably estimable. Based on the information available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations, or cash flow.
During the quarter ended September 30, 2023, we had a cyber incident that resulted in the potential exposure of certain personal information. We have completed an investigation and have identified certain information that may have been exposed and notified potentially impacted individuals pursuant to applicable state guidelines. All systems have been restored. In February of 2024, two class action lawsuits were filed, one in the U.S. District Court for the Northern District of Texas and a second in the 68th District Court for Dallas County related to the cyber incident. The lawsuit filed in the 68th District Court was subsequently dismissed and refiled in the U.S. District Court for the Northern District of Texas. On March 12, 2024, the court ordered the two cases be consolidated. The consolidated case is currently pending in the U.S. District Court for the Northern District of Texas. The parties have reached an agreement, subject to final Court approval, to resolve the class action suit. The amount of the class settlement is approximately $485,000. Ashford Inc. expects the entire settlement amount to be reimbursed through insurance coverage. The hearing for final Court approval of the settlement is scheduled for August 27, 2025.
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Our assessment may change depending upon the development of any current or future legal proceedings, and the final results of such legal proceedings cannot be predicted with certainty. If we ultimately do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods.
ITEM 1A.RISK FACTORS
The discussion of our business and operations should be read together with the risk factors contained in Item 1A to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC, which describe various risks and uncertainties to which we are or may become subject. These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies, or prospects in a material and adverse manner. As of March 31, 2025, there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Purchases of Equity Securities by the Issuer
On May 3, 2024, our board of directors approved a new share repurchase program, pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share, having an aggregate value of up to $50 million. The Company and may repurchase shares through open market transactions, privately negotiated transactions or other means. The timing and amount of any transactions will be subject to the discretion of the Company based upon market conditions, and the program may be suspended or terminated at any time by the Company at its discretion without prior notice. The board of directors’ authorization replaced any previous repurchase authorizations.
The following table provides the information with respect to purchases and forfeitures of our common stock during each of the months in the first quarter of 2025:

Period |  | Total Number of Shares Purchased |  | Average Price Paid Per Share |  | Total Number of Shares Purchased as Part of a Publicly Announced Plan |  | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plan
Common stock: |  |  |  |  |  |  |  |
January 1 - January 31 |  | — |  |  | $ | — |  |  | — |  |  | $ | 50,000,000 |
February 1 - February 28 |  | 19,755 |  | (1) | $ | 2.59 |  |  | — |  |  | $ | 50,000,000 |
March 1- March 31 |  | — |  |  | $ | — |  |  | — |  |  | $ | 50,000,000 |
Total |  | 19,755 |  |  | $ | 2.59 |  |  | — |  |  |

______________
(1)Includes 19,755 shares in February that were withheld to cover tax-withholding requirements related to the vesting of performance stock units issued to employees of our advisor pursuant to the Company’s stockholder-approved stock incentive plan.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.OTHER INFORMATION
Rule 10b5-1 Trading Agreements
During the three months ended March 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading agreement” or “non-Rule 10b5-1 trading agreement,” as each term is defined in Item 408(a) of Regulation S-K.
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ITEM 6.EXHIBITS

Exhibit |  | Description
3.1 |  | Articles of Amendment and Restatement of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 29, 2016) (File No. 001-35972).
3.2 |  | Articles Supplementary of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on May 18, 2015) (File No. 001-35972).
3.3 |  | Articles of Amendment of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on April 29, 2016) (File No. 001-35972).
3.4 |  | Amendment Number One to the Articles of Amendment and Restatement of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on December 8, 2017) (File No. 001-35972).
3.5 |  | Amendment Number Two to Articles of Amendment and Restatement of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 23, 2018) (File No. 001-35972).
3.6 |  | Articles of Amendment of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on January 23, 2020 (incorporated by reference to Exhibit 3.13 to Amendment No. 1 to the Registration Statement on Form S-3 filed with the SEC on January 24, 2020) (File No. 333-234663).
3.7 |  | Fifth Amended and Restated Bylaws, as amended by Amendment No.1 on February 27, 2024, adopted on February 27,2024 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on March 1, 2024) (File No. 001-35972).
10.1 |  | Limited Waiver Under Advisory Agreement, dated as of March 10, 2025, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Braemar TRS Corporation, Ashford Inc., and Ashford Hospitality Advisors LLC (incorporated by reference to Exhibit 10.4 6 to the Annual Report on Form 10-K filed on March 12, 2025 (File No. 001-35972).
31.1* |  | Certifications of Chief Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of Securities Exchange Act of 1934, as amended.
31.2* |  | Certifications of Chief Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of Securities Exchange Act of 1934, as amended.
32.1** |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2** |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 are formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements Comprehensive Income; (iv) Consolidated Statements of Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to the Consolidated Financial Statements. In accordance with Rule 402 of Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933, as amended or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
101.INS |  | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document | Submitted electronically with this report.
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Submitted electronically with this report.
101.DEF |  | Inline XBRL Taxonomy Extension Definition Linkbase Document | Submitted electronically with this report.
101.LAB |  | Inline XBRL Taxonomy Extension Label Linkbase Document. | Submitted electronically with this report.
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | Submitted electronically with this report.
104 |  | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) |

___________________________________
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BRAEMAR HOTELS & RESORTS INC.

Date: | May 8, 2025 | By: | /s/ RICHARD J. STOCKTON |
|  |  | Richard J. Stockton |
|  |  | President and Chief Executive Officer |
Date: | May 8, 2025 | By: | /s/ DERIC S. EUBANKS |
|  |  | Deric S. Eubanks |
|  |  | Chief Financial Officer |

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