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Hotel & Resorts

BRAEMAR HOTELS & RESORTS INC. Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations (kind 10-Ok)


The next Administration's Dialogue and Evaluation ("MD&A") is meant to assist
the reader perceive our outcomes of operations and monetary situation. This
MD&A is offered as a complement to, and needs to be learn along with, our
audited consolidated monetary statements and the accompanying notes thereto
included in Merchandise 8. Along with historic monetary info, the
following dialogue and evaluation accommodates forward-looking statements that
contain dangers, uncertainties and assumptions. Our outcomes and the timing of
chosen occasions might differ materially from these anticipated in these
forward-looking statements because of many elements, together with these
mentioned beneath "Merchandise 1A. Danger Elements" and elsewhere on this Annual Report on
Type 10-Ok. See "Ahead-Trying Statements."

This part of this Type 10-Ok usually discusses 2021 and 2020 objects and
year-to-year comparisons between 2021 and 2020. Discussions of 2019 objects and
year-to-year comparisons between 2020 and 2019 that aren't included on this
Type 10-Ok may be present in "Administration's Dialogue and Evaluation of Monetary
Situation and Outcomes of Operations" in Half II, Merchandise 7 of the Firm's Annual
Report on Type 10-Ok for the yr ended December 31, 2020.

Overview


We're a Maryland company fashioned in April 2013 that invests primarily in
excessive income per out there room ("RevPAR"), luxurious lodges and resorts. Excessive
RevPAR, for functions of our funding technique, means RevPAR of at the least twice
the then-current U.S. nationwide common RevPAR for all lodges as decided by
Smith Journey Analysis. Two instances the
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U.S. nationwide common was $144 for the yr ended December 31, 2021. Now we have
elected to be taxed as a REIT beneath the Code. We conduct our enterprise and personal
considerably all of our property by our working partnership, Braemar OP.

We function within the direct resort funding phase of the resort lodging trade.
As of December 31, 2021, we owned pursuits in 14 resort properties in six
states, the District of Columbia and St. Thomas, U.S. Virgin Islands with 3,875
whole rooms, or 3,640 internet rooms, excluding these attributable to our joint
enterprise companion. The resort properties in our present portfolio are predominantly
situated in U.S. city markets and resort areas with favorable progress
traits ensuing from a number of demand mills. We personal 12 of our
resort properties straight, and the remaining two resort properties by an
funding in a majority-owned consolidated entity.

We're suggested by Ashford LLC, a subsidiary of Ashford Inc., by an advisory
settlement. The entire resort properties in our portfolio are at the moment
asset-managed by Ashford LLC. We would not have any workers. The entire companies
that could be offered by workers are offered to us by Ashford LLC.

We don't function any of our resort properties straight; as a substitute we make use of resort
administration corporations to function them for us beneath administration contracts. As of
December 31, 2021, Remington Motels, a subsidiary of Ashford Inc., managed 4
of our 14 resort properties. Third-party administration corporations managed the
remaining resort properties.

Ashford Inc. additionally gives different services to us or our resort
properties by sure entities through which Ashford Inc. has an possession
curiosity. These services embrace, however should not restricted to design and
building companies, debt placement and associated companies, broker-dealer and
distribution companies, audio visible companies, actual property advisory companies,
insurance coverage claims companies, hypoallergenic premium rooms, watersport actions,
journey/transportation companies and cell key know-how.

Liquidity


In December 2019, COVID-19 was recognized in Wuhan, China, subsequently unfold
to different areas of the world, and has resulted in important journey
restrictions and prolonged shutdown of quite a few companies all through the United
States. In March 2020, the World Well being Group declared COVID-19 to be a
world pandemic. Starting in late February 2020, we skilled a major
decline in occupancy and RevPAR related to COVID-19 as we skilled
important reservation cancellations in addition to a major discount in new
reservations. The extended presence of the virus has resulted in well being and
different authorities authorities imposing widespread restrictions on journey and
different companies.

As of December 31, 2021, the Firm maintained unrestricted money of $216.0
million and restricted money of $47.4 million. The overwhelming majority of the
restricted money includes lender and supervisor held reserves. On the finish of the
yr, there was additionally $27.5 million as a result of Firm from third-party resort
managers, which is primarily the Firm's money held by one in all its property
managers which can also be out there to fund resort working prices. For the yr
ended December 31, 2021, money flows offered by working actions had been
roughly $64.0 million. On March 4, 2022, our board of administrators declared a
quarterly money dividend of $0.01 per diluted share for the Firm's frequent
inventory for the primary quarter of 2022. Moreover, in March 2022, the board of
administrators authorised an replace to our beforehand introduced dividend coverage for
2022 to revise our then-expectation to pay a quarterly dividend of $0.01 per
share of frequent inventory throughout 2022. The approval of our dividend coverage doesn't
commit our board of administrators to declare future dividends with respect to any
amount or the quantity thereof.

We can not predict when resort working ranges will return to normalized ranges
after the consequences of the pandemic absolutely subside, whether or not our lodges shall be
pressured to close down operations or whether or not a number of attainable recurrences of
COVID-19 case surges may lead to additional reductions in enterprise and private
journey or doubtlessly trigger state and native governments to reinstate journey
restrictions. Information and circumstances may change sooner or later which can be
outdoors of administration's management, comparable to further authorities mandates, well being
official orders, journey restrictions and prolonged enterprise shutdowns resulting from
COVID-19.

Latest Developments

In December 2021, the Firm made an extra funding of roughly
$116,000 in OpenKey.


On December 27, 2021, the Firm entered right into a definitive settlement to accumulate
the 96-room Dorado Seaside, a Ritz-Carlton Reserve in Dorado, Puerto Rico. In
addition, the Firm can also be buying the revenue stream attributable to 14
residential items adjoining to the property that take part in a rental
administration program. The acquisition is predicted to shut on or about March 11,
2022, topic to sure customary closing circumstances. The consideration
consists of $104 million in money and 6.0 million shares of Braemar frequent inventory.
The Firm can even assume a mortgage mortgage with a principal stability of
roughly $54 million.
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On February 2, 2022, the Firm refinanced its mortgage mortgage secured by the
Park Hyatt Beaver Creek Resort & Spa, which had a remaining maturity date in April
2022. The brand new, non-recourse mortgage mortgage totals $70.5 million and has a
two-year preliminary time period with three one-year extension choices, topic to the
satisfaction of sure circumstances. The mortgage mortgage is curiosity solely and
gives for a floating rate of interest of SOFR + 2.86%

Key Indicators of Working Efficiency


We use quite a lot of working and different info to guage the working
efficiency of our enterprise. These key indicators embrace monetary info
that's ready in accordance with GAAP in addition to different monetary measures
which can be non-GAAP measures. As well as, we use different info that won't
be monetary in nature, together with statistical info and comparative information.
We use this info to measure the working efficiency of our particular person
lodges, teams of lodges and/or enterprise as an entire. We additionally use these metrics
to guage the lodges in our portfolio and potential acquisitions to find out
every resort's contribution to money circulate and its potential to offer enticing
long-term whole returns. These key indicators embrace:

•Occupancy. Occupancy means the overall variety of resort rooms bought in a given
interval divided by the overall variety of rooms out there. Occupancy measures the
utilization of our lodges' out there capability. We use occupancy to measure
demand at a selected resort or group of lodges in a given interval.

•ADR. ADR means common each day fee and is calculated by dividing whole resort
rooms revenues by whole variety of rooms bought in a given interval. ADR measures
common room worth attained by a resort and ADR traits present helpful info
in regards to the pricing surroundings and the character of the shopper base of a
resort or group of lodges. We use ADR to evaluate the pricing ranges that we're
in a position to generate.

•RevPAR. RevPAR means income per out there room and is calculated by
multiplying ADR by the common each day occupancy. RevPAR is without doubt one of the generally
used measures inside the resort trade to guage resort operations. RevPAR
doesn't embrace revenues from meals and beverage gross sales or parking, phone or
different non-rooms revenues generated by the property. Though RevPAR doesn't
embrace these ancillary revenues, it's usually thought-about the main
indicator of core revenues for a lot of lodges. We additionally use RevPAR to match the
outcomes of our lodges between intervals and to research outcomes of our comparable
lodges (comparable lodges symbolize lodges now we have owned for your complete interval).
RevPAR enhancements attributable to will increase in occupancy are usually
accompanied by will increase in most classes of variable working prices. RevPAR
enhancements attributable to will increase in ADR are usually accompanied by
will increase in restricted classes of working prices, comparable to administration charges and
franchise charges.

RevPAR modifications which can be primarily pushed by modifications in occupancy have completely different
implications for general revenues and profitability than modifications which can be pushed
primarily by modifications in ADR. For instance, a rise in occupancy at a resort
would result in further variable working prices (together with housekeeping
companies, utilities and room provides) and will additionally lead to elevated different
working division income and expense. Modifications in ADR sometimes have a
better influence on working margins and profitability as they don't have a
substantial impact on variable working prices.

Occupancy, ADR and RevPAR are generally used measures inside the lodging trade
to guage working efficiency. RevPAR is a vital statistic for
monitoring working efficiency on the particular person resort stage and throughout our
complete enterprise. We consider particular person resort RevPAR efficiency on an absolute
foundation with comparisons to finances and prior intervals, in addition to on a regional and
company-wide foundation. ADR and RevPAR embrace solely rooms income. Rooms income is
dictated by demand (as measured by occupancy), pricing (as measured by ADR) and
our out there provide of resort rooms.

We additionally use funds from operations ("FFO"), Adjusted FFO, earnings earlier than
curiosity, taxes, depreciation and amortization for actual property ("EBITDAre") and
Adjusted EBITDAre as measures of the working efficiency of our enterprise. See
"Non-GAAP Monetary Measures."

Principal Elements Affecting Our Outcomes of Operations


The principal elements affecting our working outcomes embrace general demand for
resort rooms in comparison with the availability of accessible resort rooms, and the flexibility of
our third-party administration corporations to extend or keep revenues whereas
controlling bills.

Demand. The demand for lodging, together with enterprise journey, is straight
correlated to the general financial system; as GDP will increase, lodging demand sometimes
will increase. Traditionally, intervals of declining demand are adopted by prolonged
intervals of comparatively sturdy demand, which usually happens throughout the progress
section of the lodging cycle. Starting in 2020, the COVID-19 pandemic had a
direct influence on demand.

Provide. The event of latest lodges is pushed largely by building prices,
the supply of financing and anticipated efficiency of present lodges.
Brief-term provide can also be anticipated to be beneath long-term averages. Whereas the
trade is
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anticipated to have provide progress beneath historic averages, we might expertise
provide progress, in sure markets, in extra of nationwide averages that will
negatively influence efficiency. Starting in 2020, the COVID-19 pandemic had a
direct influence on provide.


We count on that our ADR, occupancy and RevPAR efficiency shall be impacted by
macroeconomic elements comparable to nationwide and native employment progress, private
revenue and company earnings, GDP, shopper confidence, workplace emptiness charges
and enterprise relocation choices, airport and different enterprise and leisure
journey, new resort building, the pricing methods of opponents and
foreign money fluctuations. As well as, our ADR, occupancy and RevPAR efficiency
are depending on the continued success of the Marriott, Hilton, Hyatt and
Sofitel manufacturers.

Income. Considerably all of our income is derived from the operation of
lodges. Particularly, our income is comprised of:

•Rooms income: Occupancy and ADR are the key drivers of rooms income. Rooms
income accounts for the substantial majority of our whole income.


•Meals and beverage income: Occupancy and the kind of buyer staying on the
resort are the key drivers of meals and beverage income (i.e., group enterprise
sometimes generates extra meals and beverage enterprise by catering capabilities
when in comparison with transient enterprise, which can or might not make the most of the resort's
meals and beverage retailers or assembly and banquet services).

•Different resort income: Occupancy and the character of the property are the primary
drivers of different ancillary income, comparable to telecommunications, parking and
leasing companies.

Resort Working Bills. The next presents the elements of our resort
working bills:


•Rooms expense: These prices embrace housekeeping wages and payroll taxes,
reservation techniques, room provides, laundry companies and entrance desk prices. Like
rooms income, occupancy is the key driver of rooms expense and, subsequently,
rooms expense has a major correlation to rooms income. These prices can
enhance primarily based on will increase in salaries and wages, in addition to the extent of
service and facilities which can be offered.

•Meals and beverage expense: These bills primarily embrace meals, beverage and
labor prices. Occupancy and the kind of buyer staying on the resort (i.e.,
catered capabilities usually are extra worthwhile than restaurant, bar or different
on-property meals and beverage retailers) are the key drivers of meals and
beverage expense, which correlates intently with meals and beverage income.

•Administration charges: Base administration charges are computed as a proportion of gross
income. Incentive administration charges usually are paid when working earnings
exceed sure threshold ranges.

•Different resort bills: These bills embrace labor and different prices related
with the opposite working division revenues, in addition to labor and different prices
related to administrative departments, franchise charges, gross sales and advertising and marketing,
repairs and upkeep and utility prices.

Most classes of variable working bills, together with labor prices comparable to
housekeeping, fluctuate with modifications in occupancy. Will increase in occupancy are
accompanied by will increase in most classes of variable working bills,
whereas will increase in ADR sometimes solely lead to will increase in restricted classes
of working prices and bills, comparable to franchise charges, administration charges and
bank card processing charge bills that are primarily based on resort revenues. Thus,
modifications in ADR have a extra important influence on working margins than modifications
in occupancy.
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RESULTS OF OPERATIONS

Yr Ended December 31, 2021 In comparison with Yr Ended December 31, 2020

The next desk summarizes modifications in key line objects from our consolidated
statements of operations for the years ended December 31, 2021 and 2020 (in
1000’s besides percentages):

                                                           Yr Ended December 31,                       Favorable (Unfavorable)
                                                           2021                  2020                $ Change               % Change
Income
Rooms                                               $    280,568             $  136,265          $      144,303                 105.9  %
Meals and beverage                                         90,299                 50,263                  40,036                  79.7

Different                                                     56,675                 40,446                  16,229                  40.1
Whole resort income                                      427,542                226,974                 200,568                  88.4

Bills
Resort working bills:
Rooms                                                     59,818                 38,054                 (21,764)                (57.2)
Meals and beverage                                         75,177                 46,246                 (28,931)                (62.6)
Different bills                                           138,914                 98,467                 (40,447)                (41.1)
Administration charges                                           13,117                  7,210                  (5,907)                (81.9)
Whole resort working bills                           287,026                189,977                 (97,049)                (51.1)
Property taxes, insurance coverage and different                       34,997                 28,483                  (6,514)                (22.9)
Depreciation and amortization                             73,762                 73,371                    (391)                 (0.5)
Achieve on authorized settlement                                    (917)                     -                     917

Advisory companies charge                                     22,641                 18,486                  (4,155)                (22.5)

Transaction prices                                            563                      -                    (563)
Company common and administrative                       8,717                  6,657                  (2,060)                (30.9)
Whole bills                                           426,789                316,974                (109,815)                (34.6)

Achieve (loss) on insurance coverage settlement and disposition
of property

                                                    696                 10,149                  (9,453)                (93.1)
Working revenue (loss)                                    1,449                (79,851)                 81,300                 101.8

Fairness in earnings (loss) of unconsolidated entity (252)

       (217)                    (35)                (16.1)
Curiosity revenue                                               48                    176                    (128)                (72.7)
Different revenue (expense)                                         -                 (5,126)                  5,126                 100.0

Curiosity expense and amortization of reductions and
mortgage prices

                                               (30,901)               (45,104)                 14,203                  31.5
Write-off of mortgage prices and exit charges                     (1,963)                (3,920)                  1,957                  49.9

Unrealized achieve (loss) on derivatives                         32                  4,959                  (4,927)                (99.4)
Earnings (loss) earlier than revenue taxes                        (31,587)              (129,083)                 97,496                  75.5
Earnings tax (expense) profit                              (1,324)                 4,406                  (5,730)               (130.0)
Web revenue (loss)                                        (32,911)              (124,677)                 91,766                  73.6
(Earnings) loss attributable to noncontrolling
curiosity in consolidated entities                          2,650                  6,436                  (3,786)                (58.8)
Web (revenue) loss attributable to redeemable
noncontrolling pursuits in working partnership          3,597                 12,979                  (9,382)                (72.3)

Web revenue (loss) attributable to the Firm $ (26,664)

  $ (105,262)         $       78,598                  74.7  %


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All resort properties owned for the years ended December 31, 2021 and 2020 have
been included in our outcomes of operations throughout the respective intervals in
which they had been owned. Primarily based on when a resort property was acquired or disposed
of, working outcomes for sure resort properties should not comparable for the
years ended December 31, 2021 and 2020. The resort properties listed beneath are
not comparable resort properties for the intervals indicated and all different resort
properties are thought-about comparable resort properties. The next
acquisitions and inclinations have an effect on reporting comparability associated to our
consolidated monetary statements:

              Resort Properties                                 Location                      Acquisition/Disposition               Acquisition/Disposition Date
Mr. C Beverly Hills Resort                              Los Angeles, California                     Acquisition                            August 5, 2021

The next desk illustrates the important thing efficiency indicators of all resort
properties for the intervals indicated:


                                           Yr Ended December 31,
                                            2021              2020
Occupancy                                     52.47  %        30.27  %
ADR (common each day fee)               $     386.45       $  329.83

RevPAR (income per out there room) $ 202.76 $ 99.83
Rooms income (in 1000’s)

           $    280,568       $ 136,265

Whole resort income (in 1000’s) $ 427,542 $ 226,974



The next desk illustrates the important thing efficiency indicators of the 13 resort
properties that had been included for the years ended December 31, 2021 and 2020:

                                           Yr Ended December 31,
                                            2021              2020
Occupancy                                     52.29  %        30.27  %
ADR (common each day fee)               $     387.47       $  329.83

RevPAR (income per out there room) $ 202.61 $ 99.83
Rooms income (in 1000’s)

           $    276,038       $ 136,265

Whole resort income (in 1000’s) $ 420,949 $ 226,974

Web Earnings (Loss) Attributable to the Firm. Web loss attributable to the
Firm decreased $78.6 million, from $105.3 million for the yr ended December
31, 2020
(“2020”), to $26.7 million for the yr ended December 31, 2021
(“2021”), because of the elements mentioned beneath.


Rooms Income. Rooms income elevated $144.3 million, or 105.9%, to $280.6
million throughout 2021 in comparison with 2020. Throughout 2021, we skilled a 2,220 foundation
level enhance in occupancy and a 17.2% enhance in room charges in comparison with 2020.
The rise in rooms income is as a result of resort properties recovering from the
COVID-19 pandemic in addition to a rise of $4.5 million related to the
acquisition of the Mr. C Beverly Hills Resort on August 5, 2021.
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Fluctuations in rooms income between 2021 and 2020 is a results of the modifications
in occupancy and ADR between 2021 and 2020 as mirrored within the desk beneath
({dollars} in 1000’s):

                                                                                      Favorable (Unfavorable)
                                                                                            Occupancy
                     Resort Property                              Rooms Income           (change in bps)           ADR (change in %)
Comparable
Capital Hilton (1)                                             $        2,178                  1,132                         (18.9) %
Marriott Seattle Waterfront                                             9,501                  3,155                           7.0  %
The Notary Resort                                                        4,540                  1,274                           6.3  %
The Clancy (2)                                                          6,378                  3,645                         (38.0) %
Sofitel Chicago Magnificent Mile                                        8,443                  1,906                          43.6  %
Pier Home Resort & Spa                                                12,817                  2,642                          38.9  %
The Ritz-Carlton St. Thomas                                            38,048                  4,067                          57.7  %
Park Hyatt Beaver Creek Resort & Spa                                    4,456                  2,102                         (16.6) %
Resort Yountville                                                        8,347                  2,844                          44.8  %
The Ritz-Carlton Sarasota                                              19,328                  2,304                          32.9  %
Hilton La Jolla Torrey Pines                                            7,368                  1,996                          16.2  %
Bardessono Resort and Spa                                               10,924                  2,759                          46.6  %
The Ritz-Carlton Lake Tahoe                                             7,444                  1,217                          13.6  %
Whole                                                          $      139,772                  2,202                          17.5  %
Non-comparable
Mr. C Beverly Hills Resort                                      $        4,531                           n/a                       n/a


_______________

(1) The resort was closed from April 2020 by mid-August in 2020.

(2) The resort was being renovated throughout 2020. Moreover the resort was closed
from April 11, 2020 by September 30, 2020.


Meals and Beverage Income. Meals and beverage income elevated $40.0 million, or
79.7%, to $90.3 million throughout 2021 in comparison with 2020. This enhance is primarily
pushed by the restoration from the COVID-19 pandemic. We skilled an mixture
enhance in meals and beverage income of $38.9 million at 12 comparable resort
properties in addition to a rise of $1.7 million on the Mr. C Beverly Hills
Resort. These will increase had been partially offset by a lower of $505,000 on the
Capital Hilton.

Different Resort Income. Different resort income, which consists primarily of rental
administration charges, well being heart charges, resort charges, golf, telecommunications,
parking, leases and enterprise interruption income, elevated $16.2 million, or
40.1%, to $56.7 million throughout 2021 in comparison with 2020.


The rise is attributable to greater different resort income of $20.3 million at
12 comparable resort properties and a rise of $407,000 on the Mr. C Beverly
Hills Resort, partially offset by a lower of $462,000 at Capital Hilton.

Throughout 2020, we additionally acknowledged enterprise interruption income of $4.0 million at
The Ritz-Carlton St. Thomas because of Hurricane Irma.


Rooms Expense. Rooms expense elevated $21.8 million, or 57.2%, to $59.8 million
in 2021 in comparison with 2020. The rise is attributable to an mixture enhance
in rooms expense of $20.6 million at 13 comparable resort properties as a result of
resort properties recovering from the COVID-19 pandemic and a rise of $1.2
million on the Mr. C Beverly Hills Resort.

Meals and Beverage Expense. Meals and beverage expense elevated $28.9 million, or
62.6%, to $75.2 million throughout 2021 in comparison with 2020.


The rise is attributable to an mixture enhance of $28.7 million at 11
comparable resort properties and a rise of $1.5 million on the Mr. C Beverly
Hills Resort, partially offset by an mixture lower of $1.2 million on the
Capital Hilton and The Notary Resort.

Different Working Bills. Different working bills elevated $40.4 million, or
41.1%, to $138.9 million in 2021 in comparison with 2020. Resort working bills
encompass direct bills from departments related to income streams and
oblique bills related to assist departments and incentive administration
charges. We skilled a rise of $6.7 million in direct bills and $33.7
million in oblique bills and incentive administration charges in 2021 in comparison with
2020.
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Direct bills had been 4.9% of whole resort income in 2021 and 6.2% in 2020. The
enhance in direct bills is related to greater revenues as all of our
comparable resort properties are recovering from the COVID-19 pandemic and an
enhance of $30,000 on the Mr. C Beverly Hills Resort.

The rise in oblique bills is attributable to will increase in (i) common
and administrative prices of $9.2 million comprising a rise of $8.2 million
at our 13 comparable resort properties and $943,000 on the Mr. C Beverly Hills
Resort; (ii) advertising and marketing prices of $8.3 million comprising a rise of $7.7
million at our 13 comparable resort properties and $524,000 on the Mr. C Beverly
Hills Resort; (iii) repairs and upkeep of $5.3 million comprising an
enhance of $5.0 million at our 13 comparable resort properties and $314,000 at
the Mr. C Beverly Hills Resort; (iv) lease expense of $976,000 comprising an
enhance of $953,000 at our 13 comparable resort properties and $23,000 on the
Mr. C Beverly Hills Resort; (v) power prices of $3.6 million comprised of an
enhance of $3.3 million at our 13 comparable resort properties and $309,000 at
the Mr. C Beverly Hills Resort; and (vi) incentive administration charges of $6.4
million comprising a rise of $6.4 million at our 13 comparable resort
properties and $65,000 on the Mr. C Beverly Hills Resort.

Administration Charges. Base administration charges elevated $5.9 million, or 81.9%, to $13.1
million in 2021 in comparison with 2020. Administration charges elevated $5.8 million at 13
comparable resort properties and $195,000 on the Mr. C Beverly Hills Resort.

Property Taxes, Insurance coverage and Different. Property taxes, insurance coverage and different
elevated $6.5 million, or 22.9%, to $35.0 million in 2021 in comparison with 2020. The
enhance is comprised of an mixture enhance of roughly $7.3 million at
seven resort properties. Roughly $6.6 million of the rise is primarily
attributable to greater present yr assessments at two resort properties. The
enhance additionally contains $545,000 on the Mr. C Beverly Hills Resort. These
will increase had been partially offset by an mixture lower of roughly $1.4
million at six resort properties.

Depreciation and Amortization. Depreciation and amortization elevated $391,000,
or 0.5%, to $73.8 million for 2021 in comparison with 2020. The rise is comprised
of a rise of $972,000 on the Mr. C Beverly Hills Resort and an mixture
enhance of $2.6 million at The Clancy, Marriott Seattle Waterfront, Resort
Yountville, The Ritz-Carlton St. Thomas, The Ritz-Carlton Sarasota and The
Ritz-Carlton Lake Tahoe. These will increase are partially offset by an mixture
lower of $3.2 million at seven comparable resort properties because of
absolutely depreciated property.

Advisory Providers Charge. Advisory companies charge elevated $4.2 million, or 22.5%,
to $22.6 million in 2021 in comparison with 2020 resulting from will increase within the base advisory
charge of $825,000, reimbursable bills of $507,000, incentive charge of $678,000 as
nicely as a rise in equity-based compensation of $2.1 million.

In 2021, we recorded an advisory companies charge of $22.6 million, which included a
base advisory charge of $10.8 million, reimbursable bills of $2.3 million and
$9.5 million related to fairness grants of our frequent inventory and LTIP items
awarded to the officers and workers of Ashford Inc.

In 2020, we recorded an advisory companies charge of $18.5 million, which included a
base advisory charge of $10.0 million, reimbursable bills of $1.8 million and
$7.4 million related to fairness grants of our frequent inventory and LTIP items
awarded to the officers and workers of Ashford Inc. and a credit score to the
incentive charge of $678,000 because of not assembly the FCCR threshold required
for paying the ultimate installment of the inducement charge incurred in 2018.

Achieve on Authorized Settlement. In 2021, we acknowledged a achieve of $728,000 associated to
the settlement of a switch tax matter with the Metropolis of San Francisco and
$189,000 associated to a billing dispute. In 2020, there was no such achieve
acknowledged.

Transaction Prices. In 2021, we acknowledged $563,000 of transaction prices
related to the acquisition of the Mr. C Beverly Hills Resort. There have been no
transaction prices in 2020.

Company Basic and Administrative. Company common and administrative
expense was $8.7 million in 2021 and $6.7 million in 2020. The rise in
company common and administrative bills is primarily resulting from greater public
firm prices of $658,000, greater miscellaneous bills of $575,000 and an
enhance of $1.3 million associated to our share of the reimbursed working
bills of Ashford Securities, partially offset by decrease skilled charges
of $497,000.

Achieve (loss) on Insurance coverage Settlement and Disposition of Property. In 2020, we
acknowledged a achieve of $10.1 million because of finalizing the insurance coverage
settlement from Hurricane Irma. In 2021, we acknowledged a achieve of $481,000
related to proceeds obtained from an insurance coverage declare, a achieve of $18,000
upon disposition of sure mounted property, in addition to a achieve of $197,000
related to the sale of sure ERFP property to Ashford Inc.

Fairness in Earnings (Loss) of Unconsolidated Entity. In 2021 and 2020, we
recorded fairness in lack of unconsolidated entity of $252,000 and $217,000,
respectively, associated to our funding in OpenKey.

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Curiosity Earnings. Curiosity revenue decreased $128,000, or 72.7%, to $48,000 for
2021 in comparison with 2020.


Different Earnings (Expense). Different expense decreased $5.1 million, or 100.0% to $0 in
2021 in comparison with 2020. In 2020, we recorded a realized lack of $3.6 million and
$1.3 million on our disposition of rate of interest flooring and CMBX credit score default
swaps, respectively. We additionally recorded expense of $191,000 associated to CMBX
premiums and curiosity paid on collateral.

Curiosity Expense and Amortization of Reductions and Mortgage Prices. Curiosity expense
and amortization of reductions and mortgage prices decreased $14.2 million, or 31.5%,
to $30.9 million for 2021 in comparison with 2020. The lower is primarily resulting from
decrease curiosity expense from a decrease common LIBOR fee, a credit score to curiosity
expense associated to the amortization of default curiosity and late prices
recorded on loans that had been beforehand in default and the compensation of our
secured time period mortgage. These decreases had been partially offset by greater curiosity
expense from our Convertible Senior Notes and the mortgage mortgage related to
the Mr. C Beverly Hills Resort acquisition. The common LIBOR charges for 2021 and
2020 had been 0.10% and 0.52%, respectively.

Write-off of Mortgage Prices and Exit Charges. Write-off of mortgage prices and exit charges
was $2.0 million in 2021. This included a $1.2 million write-off of unamortized
mortgage prices upon the payoff of our secured time period mortgage payoff and $387,000 of
third-party charges from amendments executed with numerous lenders, which included
deferral of debt service funds and allowed using reserves for
property-level working shortfalls and/or to cowl debt service funds. These
third-party charges incurred along with these amendments had been expensed in
accordance with relevant accounting steering. As well as, there was a
write-off of mortgage prices of roughly $419,000 upon the $20 million pay-down
of the mortgage mortgage assumed with the acquisition of the Mr. C Beverly Hills
Resort.

Write-off of mortgage prices and exit charges was $3.9 million for 2020, ensuing from
amendments executed with numerous lenders, which included deferral of debt
service funds and allowed using reserves for property-level working
shortfalls and/or to cowl debt service funds. These third-party charges
incurred along with these amendments had been expensed in accordance with
relevant accounting steering.

Unrealized Achieve (Loss) on Derivatives. Unrealized achieve on derivatives of $32,000
for 2021 consisted of an unrealized achieve of roughly $94,000 on warrants,
partially offset by an unrealized lack of roughly $62,000 on rate of interest
caps.

Unrealized achieve on derivatives of $5.0 million for 2020 consisted of a $3.6
million unrealized achieve on rate of interest flooring related to the popularity
of realized losses and a $1.4 million unrealized achieve on CMBX credit score default
swaps related to the popularity of realized losses, partially offset by an
unrealized lack of $93,000 on rate of interest caps.

Earnings Tax (Expense) Profit. Earnings tax expense modified $5.7 million, from an
revenue tax good thing about $4.4 million in 2020 to revenue tax expense of $1.3
million
in 2021. This variation was primarily resulting from a rise within the
profitability of our TRS entities in 2021 in comparison with 2020.


(Earnings) Loss Attributable to Noncontrolling Curiosity in Consolidated Entities.
Our noncontrolling curiosity companion in consolidated entities was allotted a
lack of $2.7 million and $6.4 million for 2021 and 2020, respectively. At each
December 31, 2021 and 2020, noncontrolling curiosity in consolidated entities
represented an possession curiosity of 25% in two resort properties held by one
entity.

Web (Earnings) Loss Attributable to Redeemable Noncontrolling Pursuits in
Working Partnership. Noncontrolling pursuits in working partnership had been
allotted a internet lack of $3.6 million and $13.0 million for 2021 and 2020,
respectively. Redeemable noncontrolling pursuits represented possession
pursuits in Braemar OP of roughly 8.83% and 9.43% as of December 31, 2021
and 2020, respectively.
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Indebtedness

The next desk units forth our indebtedness ({dollars} in 1000’s):

                                                                           Excellent
                                                     Variety of             Stability at
                                                       Property             December 31,             Curiosity Charge at                                      Maturity           Totally Prolonged
Lender/Property(ies)                                 Encumbered               2021                 December 31, 2021             Amortization            Date (1)           Maturity Date
Securitized (2)                                            1                   67,500                            3.10  %         Curiosity solely           Apr-2022              Apr-2022
Park Hyatt Beaver Creek Resort & Spa,
Beaver Creek, CO
Securitized (3)                                            4                  435,000                            2.26  %         Curiosity solely           Jun-2022              Jun-2025
The Notary Resort, Philadelphia, PA
The Clancy, San Francisco, CA
Marriott Seattle Waterfront, Seattle, WA
Sofitel Chicago Magnificent Mile, Chicago,
IL
Apollo (4)                                                 1                   42,500                            4.95  %         Curiosity solely           Aug-2022              Aug-2024
The Ritz-Carlton, St. Thomas, USVI
BAML (5)                                                   1                   99,500                            2.90  %          Amortizing             Apr-2023              Apr-2023
The Ritz-Carlton, Sarasota, FL
BAML (6)                                                   1                   51,000                            2.80  %         Curiosity solely           Could-2023              Could-2023
Resort Yountville, Yountville, CA
BAML (6)                                                   1                   40,000                            2.80  %         Curiosity solely           Aug-2023              Aug-2023
Bardessono Resort and Spa, Yountville, CA
BAML (7)                                                   1                   54,000                            2.35  %         Curiosity solely           Jan-2024              Jan-2024
The Ritz-Carlton, Lake Tahoe, CA
Prudential (8)                                             2                  195,000                            1.80  %         Curiosity solely           Feb-2024              Feb-2024
Capital Hilton, Washington, D.C.
Hilton La Jolla Torrey Pines, La Jolla, CA
LoanCore (9)                                               1                   30,000                            5.10  %         Curiosity solely           Aug-2024              Aug-2024
Mr. C Beverly Hills Resort
BAML (10)                                                  1                   80,000                            2.10  %         Curiosity solely           Sep-2024              Sep-2024
Pier Home Resort & Spa, Key West, FL
Convertible Senior Notes                                    Fairness             86,250                            4.50  %         Curiosity solely          June-2026             June-2026
Fairness
Whole/Weighted Common                                    14             $  1,180,750                            2.65  %


__________________

(1) Maturity date assumes no future extensions.


(2)  Rate of interest is variable at LIBOR plus 3.00%. This mortgage mortgage requires
that we keep an rate of interest cap settlement with a counterparty, and the
phrases of that settlement present for a LIBOR cap of three.0%. This mortgage mortgage
contains three one-year extension choices topic to satisfaction of sure
circumstances, of which the third was exercised in April 2021.

(3)  Rate of interest is variable at LIBOR plus 2.16%. This mortgage mortgage requires
that we keep an rate of interest cap settlement with a counterparty, and the
phrases of that settlement present for a LIBOR cap of 4.0%. This mortgage mortgage
contains 5 one-year extension choices topic to the satisfaction of sure
circumstances, of which the second was exercised in June 2021.

(4)  Rate of interest is variable at LIBOR plus 3.95% with a LIBOR ground of 1.00%.
This mortgage mortgage has three one-year extension choices, topic to the
satisfaction of sure circumstances, of which the primary was exercised in August
2021.

(5)  Rate of interest is variable at LIBOR plus 2.65% with a LIBOR ground of 0.25%.
This mortgage mortgage requires that we keep an rate of interest cap settlement with
a counterparty, and the phrases of that settlement present for a LIBOR cap of three.5%.
The mortgage mortgage was curiosity solely till July 1, 2021, at which period it started
amortizing 1% yearly for the remaining time period. The said maturity is April
2023.

(6)  Rate of interest is variable at LIBOR plus 2.55%, with a LIBOR ground of 0.25%.
This mortgage mortgage requires that we keep an rate of interest cap settlement with
a counterparty, and the phrases of that settlement present for a LIBOR cap of three.5%.

(7)  Rate of interest is variable at LIBOR plus 2.10%, with a LIBOR ground of 0.25%.
This mortgage mortgage requires that we keep an rate of interest cap settlement with
a counterparty, and the phrases of that settlement present for a LIBOR cap of three.5%.

(8) Rate of interest is variable at LIBOR plus 1.70%.


(9)  Rate of interest is variable at LIBOR plus 3.60%, with a LIBOR ground of 1.50%.
This mortgage mortgage requires that we keep an rate of interest cap settlement with
a counterparty, and the phrases of that settlement present for a LIBOR cap of two.0%.

(10) Rate of interest is variable at LIBOR plus 1.85%, with a LIBOR ground of
0.25%. This mortgage mortgage requires that we keep an rate of interest cap
settlement with a counterparty, and the phrases of that settlement present for a
LIBOR cap of three.5%.

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In Could 2021, the Firm issued $86.25 million mixture principal quantity of
4.50% Convertible Senior Notes due June 2026 (the "Convertible Senior Notes").
The web proceeds from this providing of the Convertible Senior Notes had been
roughly $82.8 million after deducting the underwriting charges and different
bills paid by the Firm. A portion of the proceeds had been used to completely repay
the secured time period mortgage. See notice 6 to our consolidated monetary statements for a
full description of our Convertible Senior Notes.

On September 23, 2021, the Firm finalized an extension of its mortgage loans
for the Bardessono Resort and Spa with a remaining maturity in August 2022 and the
Resort Yountville with a remaining maturity in Could 2022. Every of the loans was
prolonged for one yr past its authentic maturity on the identical phrases because the
authentic mortgage.

On February 2, 2022, the Firm refinanced its mortgage mortgage secured by the
Park Hyatt Beaver Creek Resort & Spa, which had a remaining maturity date in April
2022. The brand new, non-recourse mortgage mortgage totals $70.5 million and has a
two-year preliminary time period with three one-year extension choices, topic to the
satisfaction of sure circumstances. The mortgage mortgage is curiosity solely and
gives for a floating rate of interest of SOFR + 2.86%.

The next mortgage loans embrace numerous monetary money lure triggers. The
BAML Pier Home mortgage mortgage, the BAML Bardessono mortgage mortgage, the BAML
Yountville mortgage mortgage, the BAML Sarasota mortgage mortgage and the BAML Lake
Tahoe mortgage mortgage all have a 1.20x debt service protection ratio requirement.
The Park Hyatt Beaver Creek Resort & Spa mortgage mortgage, excellent at December
31, 2021, had a ten.0% debt yield requirement. The mortgage mortgage secured by 4
resort properties has a 7.5% debt yield requirement, and the Apollo mortgage mortgage
has a 12.0% debt yield requirement. When these provisions are triggered,
considerably the entire earnings generated by the resort properties securing such
mortgage are deposited straight into lockbox accounts after which swept into money
administration accounts for the advantage of our numerous lenders. This might have an effect on
our liquidity and our potential to make distributions to our stockholders till
such time {that a} money lure is not in impact for such mortgage.

As of December 31, 2021, our $435 million mortgage mortgage, our $195 million
mortgage mortgage and our $54 million mortgage mortgage had been in money traps and
roughly $157,000 of our restricted money was topic to those money traps.
Moreover, at December 31, 2021, there was roughly $2.4 million of
restricted money, related to two mortgage loans that had been not in money
traps as of that date, which was subsequently launched.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity


In December 2019, COVID-19 was recognized in Wuhan, China, subsequently unfold
to different areas of the world, and has resulted in important journey
restrictions and prolonged shutdown of quite a few companies all through the United
States. In March 2020, the World Well being Group declared COVID-19 to be a
world pandemic. Starting in late February 2020, we skilled a major
decline in occupancy and RevPAR related to COVID-19 as we skilled
important reservation cancellations in addition to a major discount in new
reservations. The extended presence of the virus has resulted in well being and
different authorities authorities imposing widespread restrictions on journey and
different companies.

As of December 31, 2021, the Firm maintained unrestricted money of $216.0
million and restricted money of $47.4 million. The overwhelming majority of the
restricted money includes lender and supervisor held reserves. On the finish of the
yr, there was additionally $27.5 million as a result of Firm from third-party resort
managers, which is primarily the Firm's money held by one in all its property
managers which can also be out there to fund resort working prices. For the yr
ended December 31, 2021, money flows offered by working actions had been
roughly $64.0 million. On March 4, 2022, our board of administrators declared a
quarterly money dividend of $0.01 per diluted share for the Firm's frequent
inventory for the primary quarter of 2022. Moreover, in March 2022, the board of
administrators authorised an replace to our beforehand introduced dividend coverage for
2022 to revise our then-expectation to pay a quarterly dividend of $0.01 per
share of frequent inventory throughout 2022. The approval of our dividend coverage doesn't
commit our board of administrators to declare future dividends with respect to any
amount or the quantity thereof.

We can not predict when resort working ranges will return to normalized ranges
after the consequences of the pandemic absolutely subside, whether or not our lodges shall be
pressured to close down operations or whether or not a number of attainable recurrences of
COVID-19 case surges may lead to additional reductions in enterprise and private
journey or doubtlessly trigger state and native governments to reinstate journey
restrictions. Information and circumstances may change sooner or later which can be
outdoors of administration's management, comparable to further authorities mandates, well being
official orders, journey restrictions and prolonged enterprise shutdowns resulting from
COVID-19.
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Our short-term liquidity necessities consist primarily of funds essential to
pay for working bills and different expenditures straight related to our
resort properties, together with:

•advisory charges payable to Ashford LLC;

•recurring upkeep vital to keep up our resort properties in accordance
with model requirements;

•curiosity expense and scheduled principal funds on excellent indebtedness,
together with our secured time period mortgage (see “Contractual Obligations and Commitments”);

•distributions, if any, within the type of dividends on our frequent inventory, vital
to qualify for taxation as a REIT;

•dividends on our most popular inventory; and

•capital expenditures to enhance our resort properties.

We count on to fulfill our short-term liquidity necessities usually by internet
money offered by operations, capital market actions and present money
balances.


Pursuant to the advisory settlement between us and our advisor, we should pay our
advisor on a month-to-month foundation a base advisory charge, topic to a minimal base
advisory charge. The minimal base advisory charge is the same as the better of: (i) 90%
of the bottom charge paid for a similar month within the prior fiscal yr; and (ii)
1/twelfth of the "G&A Ratio" for probably the most not too long ago accomplished fiscal quarter
multiplied by our whole market capitalization on the final stability sheet date
included in the latest quarterly report on Type 10-Q or annual report on
Type 10-Ok that we file with the SEC. Thus, even when our whole market
capitalization and efficiency decline, we'll nonetheless be required to make
funds to our advisor equal to the minimal base advisory charge, which may
adversely influence our liquidity and monetary situation.

Our long-term liquidity necessities consist primarily of funds essential to pay
for the prices of buying further resort properties and redevelopments,
renovations, expansions and different capital expenditures that should be made
periodically with respect to our resort properties and scheduled debt funds.
We count on to fulfill our long-term liquidity necessities by numerous sources
of capital, together with future frequent and most popular fairness issuances, present
working capital, internet money offered by operations, resort mortgage indebtedness
and different secured and unsecured borrowings. Nonetheless, there are a selection of
elements that will have a fabric opposed impact on our potential to entry these
capital sources, together with the present and ongoing results of COVID-19 on our
enterprise and the resort trade, the state of general fairness and credit score markets,
our diploma of leverage, our unencumbered asset base and borrowing restrictions
imposed by lenders (together with because of any failure to adjust to
monetary covenants in our present and future indebtedness), common market
circumstances for REITs, our working efficiency and liquidity and market
perceptions about us. The success of our enterprise technique will rely, partly,
on our potential to entry these numerous capital sources. Whereas administration can not
present any assurances, administration believes that our money circulate from operations
and our present money balances shall be sufficient to fulfill upcoming anticipated
necessities for curiosity and principal funds on debt (excluding any
potential remaining maturity principal funds), working capital, and capital
expenditures for the subsequent 12 months and dividends required to keep up our
standing as a REIT for U.S. federal revenue tax functions.

Our resort properties would require periodic capital expenditures and renovation
to stay aggressive. As well as, acquisitions, redevelopments or expansions
of resort properties might require important capital outlays. We will not be ready
to fund such capital enhancements solely from internet money offered by operations
as a result of we should distribute yearly at the least 90% of our REIT taxable revenue,
decided with out regard to the deductions for dividends paid and excluding internet
capital positive aspects, to qualify and keep our qualification as a REIT, and we're
topic to tax on any retained revenue and positive aspects. Because of this, our potential to
fund capital expenditures, acquisitions or resort redevelopment by retained
earnings may be very restricted. Consequently, we count on to rely closely upon the
availability of debt or fairness capital for these functions. If we're unable to
acquire the required capital on favorable phrases, or in any respect, our monetary
situation, liquidity, outcomes of operations and prospects might be materially
and adversely affected.

Sure of our mortgage agreements comprise money lure provisions that could be
triggered if the efficiency of our resort properties decline. When these
provisions are triggered, considerably the entire revenue generated by the resort
properties securing such mortgage is deposited straight into lockbox accounts and
then swept into money administration accounts for the advantage of our numerous lenders.
This might have an effect on our liquidity and our potential to make distributions to our
stockholders till such time {that a} money lure is not in impact for such
mortgage. These money lure provisions have been triggered on a few of our mortgage
loans, as mentioned above. Our loans might stay topic to money lure provisions
for a considerable time frame which may restrict our flexibility and adversely
have an effect on our monetary situation or our qualification as a REIT.

Our estimated future obligations as of December 31, 2021 embrace each present
and long-term obligations. With respect to our indebtedness, as mentioned in
notice 6 to our consolidated monetary statements, now we have present obligations of
$546.0 million and long-term obligations of $634.8 million. As of December 31,
2021, we held extension choices to increase the principal for all
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of the debt due within the subsequent twelve months apart from $68.5 million. $67.5
million
pertains to the mortgage mortgage secured by the Park Hyatt Beaver Creek
Resort & Spa
that was refinanced on February 2, 2022. Moreover now we have
mortgage mortgage funds of roughly $1.0 million due within the subsequent twelve
months.

As mentioned in notice 17 to our consolidated monetary statements, beneath our
working leases now we have present obligations of roughly $3.3 million and
long-term obligations of roughly $156.9 million. Moreover, as
mentioned in notice 16 to our consolidated monetary statements, now we have
short-term capital commitments of roughly $23.0 million.

Fairness Transactions


On December 5, 2017, our board of administrators authorised the inventory repurchase
program pursuant to which the board of administrators granted a repurchase
authorization to accumulate shares of the Firm's frequent inventory, par worth $0.01
per share and most popular inventory having an mixture worth of as much as $50 million.
The board of administrators' authorization changed any earlier repurchase
authorizations. No shares had been repurchased throughout the yr ended December 31,
2021, pursuant to this authorization.

On December 11, 2017, we entered into fairness distribution agreements with
sure gross sales brokers to promote now and again shares of our frequent inventory having
an mixture providing worth of as much as $50.0 million. Gross sales of shares of our
frequent inventory, if any, could also be made in negotiated transactions or transactions
which can be deemed to be "at-the-market" choices as outlined in Rule 415 of the
Securities Act, together with gross sales made straight on the NYSE, the present buying and selling
marketplace for our frequent inventory, or gross sales made to or by a market maker different
than on an trade or by an digital communications community. We can pay
every of the gross sales brokers a fee, which in every case shall not be greater than
2.0% of the product sales worth of the shares of our frequent inventory bought by
such gross sales agent. On July 7, 2020, we entered right into a aspect letter (the "Facet
Letter") with the gross sales brokers pursuant to which we agreed to pay all affordable
documented out-of-pocket bills, together with the affordable charges and
disbursements of counsel incurred by the gross sales brokers, in reference to the
ongoing companies contemplated by the fairness distribution agreements (topic to
a $75,000 cap on sure bills incurred in June 2020). Pursuant to the Facet
Letter, the gross sales brokers have agreed to reimburse us for as much as $50,000 of such
bills, if the gross sales brokers supply and promote an quantity of our frequent inventory with
an mixture providing worth of $15,000,000, and have agreed to reimburse us for
as much as an extra $50,000 of such bills, offered the gross sales brokers supply
and promote an quantity of our frequent inventory with an mixture providing worth of
$30,000,000. As of March 8, 2022, the Firm has bought roughly 7.4 million
shares of frequent inventory and obtained gross proceeds of roughly $30.8
million beneath this program.

On November 13, 2019, we filed an preliminary registration assertion with the SEC,
as amended on January 24, 2020, for shares of our non-traded Collection E Redeemable
Most popular Inventory (the "Collection E Most popular Inventory") and our non-traded Collection M
Redeemable Most popular Inventory (the "Collection M Most popular Inventory"). The registration
assertion turned efficient on February 21, 2020, and contemplates the issuance
and sale of as much as 20,000,000 shares of Collection E Most popular Inventory or Collection M
Most popular Inventory in a major providing and as much as 8,000,000 shares of Collection E
Most popular Inventory or Collection M Most popular Inventory 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 because the supplier supervisor and
wholesaler of the Collection E Most popular Inventory and Collection M Most popular Inventory. On
April 2, 2021, the Firm filed with the State Division of Assessments and
Taxation of the State of Maryland (the "SDAT") articles supplementary to the
Firm's Articles of Modification and Restatement that offered for: (i)
reclassifying the present 28,000,000 shares of Collection E Most popular Inventory and
28,000,000 shares of Collection M Most popular Inventory as unissued shares of most popular
inventory; (ii) reclassifying and designating 28,000,000 shares of the Firm's
licensed capital inventory as shares of the Collection E Most popular Inventory (the "Collection
E Articles Supplementary"); and (iii) reclassifying and designating 28,000,000
shares of the Firm's licensed capital inventory as shares of the Collection M
Most popular Inventory (the "Collection M Articles Supplementary"). The Collection E Articles
Supplementary and Collection M Articles Supplementary had been filed to revise the
most popular inventory phrases associated to the dividend fee, our non-compulsory redemption
proper and sure different voting rights. The Firm additionally brought about its working
partnership to execute Modification No. 5 to the Third Amended and Restated
Settlement of Restricted Partnership to amend the phrases of its working partnership
settlement to adapt to the phrases of the Collection E Articles Supplementary and
Collection M Articles Supplementary. As of March 8, 2022, the Firm has issued
roughly 2.9 million shares of Collection E Most popular Inventory and obtained internet
proceeds of roughly $65.4 million and issued roughly 37,000 shares
of Collection M Most popular Inventory and obtained internet proceeds of roughly $892,000.
The Firm additionally issued roughly 4,000 shares of Collection E Most popular Inventory
pursuant to the dividend reinvestment plan.

On December 4, 2019, we entered into fairness distribution agreements with sure
gross sales brokers to promote now and again shares of our 5.50% Collection B Cumulative
Convertible Most popular Inventory (the "Collection B Convertible Most popular Inventory") having
an mixture providing worth of as much as $40.0 million. Gross sales of shares of the
Collection B Convertible Most popular Inventory could also be made in negotiated transactions or
transactions which can be deemed to be "at-the-market" choices as outlined in Rule
415 of the Securities Act, together with gross sales made straight on the NYSE, the
present buying and selling marketplace for the Collection B Convertible Most popular Inventory, or gross sales
made to or by a market maker aside from on an trade or by an
digital communications community. We'll
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pay every of the gross sales brokers a fee, which in every case shall not be extra
than 2.0% of the product sales worth of the shares of the Collection B Convertible
Most popular Inventory bought by such gross sales brokers. Because the inception of the
program, we issued roughly 63,000 shares of the Collection B Convertible
Most popular Inventory by our "at-the-market" fairness providing program leading to
gross proceeds of roughly $1.0 million earlier than reductions and commissions to
the promoting brokers of roughly $19,000.

On February 4, 2021, the Firm entered right into a Standby Fairness Distribution
Settlement (the "SEDA") with YA II PN, Ltd. ("YA"), pursuant to which the Firm
will be capable to promote as much as 7,780,786 shares of its frequent inventory (the "Dedication
Quantity") on the Firm's request any time throughout the dedication interval
commencing on February 4, 2021, and terminating on the earliest of (i) the primary
day of the month subsequent following the 36-month anniversary of the SEDA or (ii) the
date on which YA shall have made cost of Advances (as outlined within the SEDA)
pursuant to the SEDA for shares of the Firm's frequent inventory equal to the
Dedication Quantity (the "Dedication Interval"). Aside from with respect to the
Preliminary Advance (as outlined beneath) the shares bought to YA pursuant to the SEDA
could be bought at 95% of the Market Worth (as outlined beneath) and could be
topic to sure limitations, together with that YA couldn't buy any shares
that will lead to it proudly owning greater than 4.99% of the Firm's frequent inventory.
"Market Worth" means the bottom each day VWAP of the Firm's frequent inventory throughout
the 5 consecutive buying and selling days commencing on the buying and selling day following the
date the Firm submits an advance discover to YA. "VWAP" means, for any buying and selling
day, the each day quantity weighted common worth of the Firm's frequent inventory for
such date on the principal market as reported by Bloomberg L.P. throughout common
buying and selling hours.

At any time throughout the Dedication Interval the Firm might require YA to buy
shares of the Firm's frequent inventory by delivering a written discover to YA
setting forth the Advance Shares (as outlined within the SEDA) that the Firm
needs to challenge and promote to YA (the "Advance Discover"). The Firm might ship
an Advance Discover for an preliminary Advance for as much as 1,200,000 Advance Shares (the
"Preliminary Advance"). The preliminary buy worth per share for such shares
shall be 100% of the common each day VWAP for the 5 consecutive buying and selling days
instantly previous to the date of the Advance Discover.

Pursuant to the SEDA, we at the moment intend to make use of the web proceeds from any sale
of the shares for working capital functions, together with the compensation of
excellent debt. There are not any different restrictions on future financing
transactions. The SEDA doesn't comprise any proper of first refusal,
participation rights, penalties or liquidated damages. We're not required to
pay any further quantities to reimburse or in any other case compensate YA in connection
with the transaction apart from a $10,000 structuring charge. As of March 8, 2022,
the Firm has bought roughly 1.7 million shares of frequent inventory and
obtained proceeds of roughly $10.0 million beneath the SEDA.

From March 16, 2021 by March 8, 2022, Braemar entered into privately
negotiated trade agreements with sure holders of the Collection B Convertible
Most popular Inventory in reliance on Part 3(a)(9) of the Securities Act. The
Firm agreed to trade a complete of roughly 2.0 million shares of its
Collection B Convertible Most popular inventory for roughly 7.3 million shares of its
frequent inventory.

On April 21, 2021, the Firm entered into a purchase order settlement (the "Lincoln
Park Buy Settlement") with Lincoln Park Capital Fund, LLC ("Lincoln Park"),
pursuant to which the Firm might challenge or promote to Lincoln Park as much as 8,893,565
shares of the Firm's frequent inventory now and again throughout the time period of the
Lincoln Park Buy Settlement. The issuance of the shares of frequent inventory
pursuant to the Lincoln Park Buy Settlement has been registered pursuant to
the Firm's shelf registration assertion on Type S-3 (the "Registration
Assertion"), and the associated base prospectus included within the Registration
Assertion, as supplemented by a prospectus complement filed with the SEC on
April 21, 2021. The Firm and Lincoln Park additionally entered right into a registration
rights settlement, pursuant to which the Firm agreed to keep up the
effectiveness of the Registration Assertion. Upon coming into into the Lincoln Park
Buy Settlement, the Firm issued 15,000 shares of the Firm's frequent
inventory as consideration for Lincoln Park's execution and supply of the Lincoln
Park Buy Settlement. As of March 8, 2022, the Firm has issued
roughly 766,000 shares of frequent inventory for gross proceeds of roughly
$4.2 million beneath the Lincoln Park Buy Settlement.

On Could 25, 2021, the Firm entered into an fairness distribution settlement (the
"Virtu Could 2021 EDA") with Virtu Americas LLC ("Virtu"), to promote from time to
time shares of our frequent inventory having an mixture providing worth of as much as $50
million. We can pay Virtu a fee of roughly 1.0% of the product sales
worth of the shares of our frequent inventory bought. The Firm may additionally promote some or
the entire shares of our frequent inventory to Virtu as principal for its personal account
at a worth agreed upon on the time of sale. As of March 8, 2022, the Firm has
bought roughly 8.3 million shares of frequent inventory beneath the Virtu Could 2021
EDA and obtained gross proceeds of roughly $50.0 million. All shares of
frequent inventory beneath the Virtu Could 2021 EDA have been bought.

On July 12, 2021, the Firm entered right into a second fairness distribution
settlement (the "Virtu July 2021 EDA")with Virtu to promote now and again shares
of our frequent inventory having an mixture providing worth of as much as $100 million. We
can pay Virtu a fee of roughly 1.0% of the product sales worth of
the shares of our frequent inventory bought. The Firm may additionally promote some or all of
the shares of our frequent inventory to Virtu as principal for its personal account at a
worth agreed upon on the
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time of sale. As of March 8, 2022, the Firm has bought roughly
4.7 million shares of frequent inventory beneath the Virtu July 2021 EDA and obtained
gross proceeds of roughly $24.0 million.

Debt Transactions


In Could 2021, the Firm issued $86.25 million mixture principal quantity of
4.50% Convertible Senior Notes due June 2026 (the "Convertible Senior Notes").
The web proceeds from this providing of the Convertible Senior Notes had been
roughly $82.8 million after deducting the underwriting charges and different
bills paid by the Firm.

The Convertible Senior Notes are ruled by an indenture (the "Base Indenture")
between the Firm and U.S. Financial institution Nationwide Affiliation, as trustee. The
Convertible Senior Notes bear curiosity at a fee of 4.50% each year, payable
semi-annually in arrears on June 1 and December 1 of every yr, starting on
December 1, 2021. The Convertible Senior Notes will mature on June 1, 2026.

The Convertible Senior Notes are convertible at any time previous to the shut of
enterprise on the enterprise day instantly previous the maturity date for money,
shares of the Firm's frequent inventory or a mixture of money and shares of the
Firm's frequent inventory, on the election of the Firm, primarily based on an preliminary
conversion fee of 157.7909 shares of the Firm's frequent inventory per $1,000
principal quantity of notes (equal to a conversion worth of roughly
$6.34 per share of frequent inventory), topic to adjustment of the conversion fee
beneath sure circumstances. As well as, following the prevalence of sure
company occasions, if the Firm gives discover of redemption or if it
workout routines its choice to convert the Convertible Senior Notes, the Firm will,
in sure circumstances, enhance the conversion fee for a holder that
converts its Convertible Senior Notes in reference to such company occasion,
such discover of redemption, or such issuer conversion choice, because the case could also be.

The Firm might redeem the Convertible Senior Notes on the Firm's choice, in
complete or partly, on any enterprise day on or after the date of issuance if the
final reported sale worth per share of the Firm's frequent inventory has been at
least 130% of the conversion worth then in impact for at the least 20 buying and selling days
(whether or not or not consecutive) throughout any 30 consecutive buying and selling day interval ending
on, and together with, the buying and selling day instantly previous the date on which the
Firm gives a discover of redemption at a redemption worth equal to 100% of
the principal quantity of the Convertible Senior Notes to be redeemed topic to
sure changes, plus accrued and unpaid curiosity to, however excluding, the
redemption date.

On September 23, 2021, the Firm finalized an extension of its mortgage loans
for the Bardessono Resort and Spa with a remaining maturity in August 2022 and the
Resort Yountville with a remaining maturity in Could 2022. Every of the loans was
prolonged for one yr past its authentic maturity on the identical phrases because the
authentic mortgage.

On February 2, 2022, the Firm refinanced its mortgage mortgage secured by the
Park Hyatt Beaver Creek Resort & Spa, which had a remaining maturity date in April
2022. The brand new, non-recourse mortgage mortgage totals $70.5 million and has a
two-year preliminary time period with three one-year extension choices, topic to the
satisfaction of sure circumstances. The mortgage mortgage is curiosity solely and
gives for a floating rate of interest of SOFR + 2.86%.

Sources and Makes use of of Money

We had roughly $216.0 million and $78.6 million of money and money
equivalents at December 31, 2021 and December 31, 2020, respectively.


We anticipate utilizing funds to pay for (i) capital expenditures for our 14 resort
properties, estimated to be roughly $60 million to $70 million in fiscal
yr 2022 and (ii) debt curiosity funds are estimated to be roughly
$30.2 million in 2022 primarily based on future funds utilizing the one month LIBOR fee as
of December 31, 2021. This estimate will fluctuate primarily based on modifications within the
one-month LIBOR fee.

Web Money Flows Supplied by (Utilized in) Working Actions. Web money flows
offered by (utilized in) working actions had been $64.0 million and $(50.3)
million for the years ended December 31, 2021 and 2020, respectively. Money flows
from operations had been impacted by the COVID-19 pandemic and modifications in resort
operations of our 13 comparable resort properties as nicely the acquisition of the
Mr. C Beverly Hills Resort on August 5, 2021. Money flows from operations are additionally
impacted by the timing of working capital money flows comparable to amassing
receivables from resort visitors, paying distributors, settling with by-product
counterparties, settling with associated events, settling with resort managers and
timing variations between the receipt of proceeds from enterprise interruption
insurance coverage claims and the popularity of the associated income.

Web Money Flows Supplied by (Utilized in) Investing Actions. For the yr ended
December 31, 2021, internet money flows utilized in investing actions had been $41.7
million. These money outflows had been primarily attributable to $25.6 million of
capital enhancements made to numerous resort properties, roughly $17.6
million related to the acquisition of the Mr. C
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Beverly Hills Resort and earnest cash related to the pending acquisition of
Dorado Seaside, a Ritz-Carlton Reserve, partially offset by proceeds of $1.8
million
from the sale of sure ERFP property to Ashford Inc.


For the yr ended December 31, 2020, internet money flows utilized in investing
actions had been $16.5 million. These money outflows had been primarily attributable
to $25.6 million of capital enhancements made to numerous resort properties offset
by $9.0 million of insurance coverage proceeds associated to Hurricane Irma.

Web Money Flows Supplied by (Utilized in) Financing Actions. For the yr ended
December 31, 2021, internet money flows offered by financing actions had been $128.0
million. Money inflows primarily consisted of internet proceeds of $83.2 million from
the issuance of our Convertible Senior Notes, $102.5 million from the issuance
of frequent inventory, $36.9 million from the issuance of most popular inventory and
contributions of $1.2 million from a noncontrolling curiosity in consolidated
entities. The money inflows had been partially offset by repayments of indebtedness
of $84.2 million, $9.1 million of dividend and distribution funds and $1.9
million of funds for mortgage prices and charges.

For the yr ended December 31, 2020, internet money flows offered by financing
actions had been $49.6 million. Money inflows primarily consisted of borrowings on
indebtedness of $109.3 million, internet proceeds of $13.3 million from the
"at-the-market" frequent inventory providing and $474,000 from the issuance of
most popular inventory, partially offset by repayments of indebtedness of $47.8
million, $16.2 million of dividend and distribution funds, $6.5 million of
funds for mortgage prices and charges related to mortgage forbearance, and
distributions of $2.6 million to the holder of a noncontrolling curiosity in
consolidated entities.

Inflation


We rely totally on the efficiency of our properties and the flexibility of the
properties' managers to extend revenues to maintain tempo with inflation. Resort
operators can usually enhance room charges relatively shortly, however aggressive
pressures might restrict their potential to boost charges quicker than inflation. Our
common and administrative prices, actual property and private property taxes,
property and casualty insurance coverage, and utilities are topic to inflation as nicely.

Important Accounting Insurance policies


Our accounting insurance policies are absolutely described in notice 2 to our consolidated
monetary statements included in "Merchandise 8. Monetary Statements and Supplementary
Knowledge." We consider that the next dialogue addresses our most crucial
accounting insurance policies, representing these insurance policies thought-about most significant to the
portrayal of our monetary situation and outcomes of operations and require
administration's most troublesome, subjective and sophisticated judgments.

Impairment of Investments in Resort Properties. Resort properties are reviewed for
impairment every time occasions or modifications in circumstances point out that their
carrying quantities will not be recoverable. Recoverability of the resort is measured
by comparability of the carrying quantity of the resort to the estimated future
undiscounted money flows, which bear in mind present market circumstances and
our intent with respect to holding or disposing of the resort. If our evaluation
signifies that the carrying worth of the resort will not be recoverable on an
undiscounted money circulate foundation, we acknowledge an impairment cost for the quantity
by which the property's internet ebook worth exceeds its estimated honest worth, or honest
worth, much less value to promote. In evaluating the impairment of resort properties, we
make many assumptions and estimates, together with projected money flows, anticipated
holding interval and anticipated helpful life. Truthful worth is set by
numerous valuation strategies, together with internally developed discounted money
circulate fashions, comparable market transactions and third-party value determinations, the place
thought-about vital. Asset write-downs ensuing from property harm are
recorded as much as the quantity of the allocable property insurance coverage deductible within the
interval that the property harm happens. There was no impairment cost recorded
for the yr ended December 31, 2021.

Earnings Taxes. At December 31, 2021 and 2020, we had a valuation allowance of
roughly $17.3 million and $14.9 million, respectively, to partially
reserve our deferred tax property of our TRSs. At every reporting date, we consider
whether or not it's extra possible than not that we'll make the most of all or a portion of our
deferred tax property. We take into account all out there constructive and adverse proof,
together with historic outcomes of operations, projected future taxable revenue,
carryback potential and scheduled reversals of deferred tax liabilities. In
evaluating the target proof that historic outcomes present, we take into account
three years of consolidated cumulative working revenue (loss). At December 31,
2021, we had TRS internet working loss carry forwards for U.S. federal revenue tax
functions of $61.2 million, of which $52.3 million is topic to expiration and
will start to run out in 2023. The rest was generated after December 31,
2017 and isn't topic to expiration beneath the Tax Cuts and Jobs Act. The loss
carry forwards topic to expiration could also be out there to offset future taxable
revenue, if any, for 2023 by 2034, with the rest out there to offset
taxable revenue past 2034; nevertheless, there might be substantial limitations on
their use imposed by the Code. Administration decided that it's extra possible than
not that $17.3 million of our internet deferred tax property is not going to be realized and a
valuation allowance has been recorded accordingly.
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The "Earnings Taxes" Subject of the Monetary Accounting Requirements Board's ("FASB")
Accounting Requirements Codification ("ASC") addresses the accounting for
uncertainty in revenue taxes acknowledged in an enterprise's monetary statements.
The steering requires us to find out whether or not tax positions now we have taken or
count on to absorb a tax return are extra possible than to not be sustained upon
examination by the suitable taxing authority primarily based on the technical deserves of
the positions. Tax positions that don't meet the extra possible than not threshold
could be recorded as further tax expense within the present interval. We analyze
all open tax years, as outlined by the statute of limitations for every
jurisdiction, which incorporates the federal jurisdiction and numerous states. We
classify curiosity and penalties associated to underpayment of revenue taxes as
revenue tax expense. We and our subsidiaries file revenue tax returns within the U.S.
federal jurisdiction and numerous states and cities. Tax years 2017 by 2021
stay topic to potential examination by sure federal and state taxing
authorities.

Just lately Adopted Accounting Requirements


In January 2020, the FASB issued ASU 2020-01, Investments - Fairness Securities
(Subject 321), Investments-Fairness Methodology and Joint Ventures (Subject 323), and
Derivatives and Hedging (Subject 815) - Clarifying the Interactions between Subject
321, Subject 323, and Subject 815 (a consensus of the Rising Points Process Power)
("ASU 2020-01"), which clarifies the interplay between the accounting for
fairness securities, fairness methodology investments, and sure by-product
devices. The ASU, amongst different issues, clarifies that an organization ought to
take into account observable transactions that require an organization to both apply or
discontinue the fairness methodology of accounting beneath Subject 323, Investments-Fairness
Methodology and Joint Ventures, for the needs of making use of the measurement
various in accordance with Subject 321 instantly earlier than making use of or upon
discontinuing the fairness methodology. ASU 2020-01 is efficient for fiscal years
starting after December 15, 2020, and interim intervals inside these fiscal years
and needs to be utilized prospectively. We adopted the usual efficient January
1, 2021, and the adoption of this customary didn't have a fabric influence on our
consolidated monetary statements.

Just lately Issued Accounting Requirements


In March 2020, the FASB issued ASU 2020-04, Reference Charge Reform (Subject 848)
("ASU 2020-04"). ASU 2020-04 accommodates sensible expedients for reference fee
reform associated actions that influence debt, leases, derivatives and different
contracts. The steering in ASU 2020-04 is non-compulsory and could also be elected over time
as reference fee reform actions happen. In January 2021, the FASB issued ASU
2021-01, Reference Charge Reform (Subject 848): Scope ("ASU 2021-01") to offer
steering and reduction for transitioning to various reference charges. ASU
2021-01 is efficient instantly for all entities. The Firm continues to
consider the influence of the steering and will apply the elections as relevant as
modifications available in the market happen.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and
Different Choices (Subtopic 470- 20) and Derivatives and Hedging - Contracts in
Entity's Personal Fairness (Subtopic 815-40): Accounting for Convertible Devices
and Contracts in an Entity's Personal Fairness ("ASU 2020-06"), which simplifies the
accounting for sure monetary devices with traits of liabilities
and fairness. This ASU (1) simplifies the accounting for convertible debt
devices and convertible most popular inventory by eradicating the present steering in
ASC 470-20, Debt: Debt with Conversion and Different Choices, that requires entities
to account for useful conversion options and money conversion options in
fairness, individually from the host convertible debt or most popular inventory; (2)
revises the scope exception from by-product accounting in ASC 815-40 for
freestanding monetary devices and embedded options which can be each listed
to the issuer's personal inventory and labeled in stockholders' fairness, by eradicating
sure standards required for fairness classification; and (3) revises the
steering in ASC 260, Earnings Per Share, to require entities to calculate
diluted earnings per share (EPS) for convertible devices by utilizing the
if-converted methodology. As well as, entities should presume share settlement for
functions of calculating diluted EPS when an instrument could also be settled in money or
shares. For SEC filers, excluding smaller reporting corporations, this ASU is
efficient for fiscal years starting after December 15, 2021 together with interim
intervals inside these fiscal years. Entities ought to undertake the steering as of the
starting of the fiscal yr of adoption and can't undertake the steering in an
interim reporting interval. We plan to undertake ASU 2020-06 by the modified
retrospective methodology on January 1, 2022. Upon adoption, the Convertible Senior
Notes shall be recorded as a single debt instrument at amortized value, as a substitute of
being recorded as each a legal responsibility and fairness. The Firm can even stop
recording non-cash curiosity expense related to amortization of the debt
low cost related to the conversion options. The adoption of ASU 2020-06
will lead to an adjustment to further paid-in capital, collected deficit,
and the carrying worth of our Convertible Senior Notes. The influence of adopting
ASU 2020-06 shall be a rise to "indebtedness, internet" and a lower to
stockholders' fairness of roughly $5.6 million. We don't count on the
adoption of this customary to have a fabric influence on our consolidated
monetary statements, past the influence to our Convertible Senior Notes
described above.

Non-GAAP Monetary Measures

The next non-GAAP displays of EBITDA, EBITDAre, Adjusted EBITDAre,
Funds From Operations (“FFO”) and Adjusted FFO are introduced to assist our
buyers consider our working efficiency.

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EBITDA is outlined as internet revenue (loss) earlier than curiosity expense and amortization
of mortgage prices, depreciation and amortization, revenue taxes, fairness in (earnings)
lack of unconsolidated entity and after the Firm's portion of EBITDA of
OpenKey. As well as, we excluded impairment on actual property, (achieve) loss on
insurance coverage settlement and disposition of property and Firm's portion of EBITDAre
of OpenKey from EBITDA to calculate EBITDA for actual property, or EBITDAre, as
outlined by NAREIT.

We then additional alter EBITDAre to exclude sure further objects comparable to
amortization of favorable (unfavorable) contract property (liabilities),
transaction and conversion prices, write-off of mortgage prices and exit charges, authorized,
advisory and settlement prices, advisory companies incentive charge, different/revenue
expense, Firm's portion of changes to EBITDAre of OpenKey and non-cash
objects comparable to unrealized achieve/ loss on derivatives and inventory/unit-based
compensation.

We current EBITDA, EBITDAre and Adjusted EBITDAre as a result of we consider they
mirror extra precisely the continued efficiency of our resort property and different
investments and supply extra helpful info to buyers as they're
indicators of our potential to fulfill our future debt cost necessities, working
capital necessities and so they present an general analysis of our monetary
situation. EBITDA, EBITDAre and Adjusted EBITDAre as calculated by us will not be
corresponding to EBITDA, EBITDAre and Adjusted EBITDAre reported by different corporations
that don't outline EBITDA, EBITDAre and Adjusted EBITDAre precisely as we outline
the phrases. EBITDA, EBITDAre and Adjusted EBITDAre don't symbolize money
generated from working actions decided in accordance with GAAP, and
shouldn't be thought-about as a substitute for working revenue or internet revenue
decided in accordance with GAAP as an indicator of efficiency or as an
various to money flows from working actions as decided by GAAP as an
indicator of liquidity.

The next desk reconciles internet revenue (loss) to EBITDA, EBITDAre and
Adjusted EBITDAre (in 1000’s) (unaudited):

Yr Ended December 31,

                                                                                   2021               2020                2019
Web revenue (loss)                                                           

$ (32,911) $ (124,677) $ 1,196
Curiosity expense and amortization of mortgage prices

                                   30,901              45,104             54,507
Depreciation and amortization                                                     73,762              73,371             70,112
Earnings tax expense (profit)                                                       1,324              (4,406)             1,764
Fairness in (earnings) lack of unconsolidated entity                                   252                 217                199
Firm's portion of EBITDA of OpenKey                                              (250)               (214)              (195)
EBITDA                                                                            73,078             (10,605)           127,583

(Achieve) loss on insurance coverage settlement and disposition of property                       (696)            (10,149)           (25,165)

EBITDAre                                                                          72,382             (20,754)           102,418

Amortization of favorable (unfavorable) contract property
(liabilities)

                                                                        512                 834                651
Transaction and conversion prices                                                   2,637               1,370              2,076
Different (revenue) expense                                                                 -               5,126             13,947
Write-off of mortgage prices and exit charges                                              1,963               3,920                647
Unrealized (achieve) loss on funding in Ashford Inc.                                   -                   -             (7,872)
Unrealized (achieve) loss on derivatives                                                (32)             (4,959)             1,103
Non-cash inventory/unit-based compensation                                            10,204               7,892              7,943
Authorized, advisory and settlement prices                                                (208)              2,023                527

Firm's portion of changes to EBITDAre of OpenKey                                7                  13                 25
Adjusted EBITDAre                                                              $  87,465          $   (4,535)         $ 121,465




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The next desk reconciles internet revenue (loss) to EBITDA attributable to the
Firm and OP unitholders on a property-by-property foundation for every of our resort
properties owned and on a company foundation throughout the yr ended December 31,
2021. The outcomes of The Mr. C Beverly Hills Resort are included from its
acquisition date by December 31, 2021 (in 1000's) (unaudited):

                                                                                                                                                                                                               Yr Ended December 31, 2021
                                                          Hilton La                                                                                                         Park Hyatt
                                                        Jolla Torrey         Sofitel Chicago        Bardessono Resort        Pier Home                                     Beaver Creek          The Notary                        
    The Ritz-Carlton         The Ritz-Carlton         Marriott Seattle        The Ritz-Carlton        Mr. C Beverly                                 

Company / Braemar Motels

                                 Capital Hilton             Pines           Magnificent Mile            and Spa            Resort & Spa          Resort Yountville          Resort & Spa            Resort            The Clancy              Sarasota               Lake Tahoe                Waterfront              St. Thomas            Hills Resort           Resort Whole           Allotted(1)          & Resorts Inc.
Web revenue (loss)              $       (11,082)         $    1,915          $      (10,181)         $       5,053          $   13,411          $           2,310          $      4,005          $  (6,261)         $  (15,467)         $        15,342          $          2,793          $        (293)       

$ 17,453 $ (1,630) $ 17,368 $ (50,279) $ (32,911)
Non-property changes (2)

                 -                   -                       -                   (117)                (96)                         -                     -                  -                   -                        1                         1                      -                     (671)                 936                    54                     (54)                    -
Curiosity revenue                              -                   -                       -                      -                   -                          -                     -                  -                  (3)                     (22)                        -                    (12)                      (2)                   -                   (39)                     39                     -
Curiosity expense                             -                   -                       -                  1,039               1,606                      1,303                 2,075                  -                   -                    3,518                     1,205                     54                    2,134                  644                13,578                  15,117                28,695
Amortization of mortgage prices                   -                   -                       -                    162                 294                        180                    14                  -                   -                      352                       144                      -                       68                   66                 1,280                     926                 2,206
Depreciation and amortization            7,448               4,293                   6,582                  2,581               2,883                      2,572                 3,526              8,333              13,258                    6,347                     2,931                  3,965                    8,071                  972                73,762                       -                73,762
Earnings tax expense (profit)                 -                 (43)                      -                      -                   -                          -                     -                 (7)                  -                        -                         -                      -                      101                    -                    51                   1,273                 1,324
Non-hotel EBITDA possession
expense (revenue)                           292                  70                      39                    490                 (59)                        68                   (11)              (141)                 (5)                     125                       761                   (157)                     396                   64                 1,932                  (1,932)                    -
Resort EBITDA together with quantities
attributable to noncontrolling
curiosity                                (3,342)              6,235                  (3,560)                 9,208              18,039                      6,433                 9,609              1,924              (2,217)                  25,663                     7,835                  3,557                   27,550                1,052               107,986                 (34,910)               73,076
Much less: EBITDA changes
attributable to consolidated
noncontrolling curiosity                    839              (1,562)                      -                      -                   -                          -                     -                  -                   -                        -                         -                      -                        -                    -                  (723)                    723                     -
Fairness in earnings (loss) of
unconsolidated entities                      -                   -                       -                      -                   -                          -                     -                  -                   -                        -                         -                      -                        -                    -                     -                     252                   252
Firm's portion of EBITDA of
OpenKey                                      -                   -                       -                      -                   -                          -                     -                  -                   -                        -                         -                      -                        -                    -                     -                    (250)                 (250)
Resort EBITDA attributable to
the Firm and OP unitholders $        (2,503)         $    4,673          $       (3,560)         $       9,208          $   18,039          $           6,433          $      9,609          $   1,924          $   (2,217)         $        25,663          $          7,835          $       3,557          $        27,550          $     1,052          $    107,263          $      (34,185)         $     73,078


__________________

(1)Represents bills not recorded on the particular person resort property stage.
(2)Contains allotted quantities which weren’t particular to resort properties, such
as achieve on sale of resort property, company taxes, insurance coverage and authorized
bills.

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The next desk reconciles internet revenue (loss) to EBITDA attributable to the
Firm and OP unitholders on a property-by-property foundation for every of our resort
properties owned and on a company foundation throughout the yr ended December 31,
2020 (in 1000's) (unaudited):

                                                                                                                                                                                   Yr Ended December 31, 2020
                                                          Hilton La                                                                                                        Park Hyatt
                                                         Jolla Torrey         Sofitel Chicago          Bardessono           Pier Home                                    Beaver Creek          The Notary                              The Ritz-Carlton         The Ritz-Carlton        Marriott Seattle        The Ritz-Carlton                                             Company /          Braemar Motels
                                 Capital Hilton             Pines          

Magnificent Mile Resort and Spa Resort & Spa Resort Yountville Resort & Spa

             Resort            The Clancy              Sarasota                Lake Tahoe              Waterfront              St. Thomas                         Resort Whole           Allotted(1)          & Resorts Inc.
Web revenue (loss)              $       (12,722)         $    (4,013)         $      (12,230)         $     (4,360)         $      766          $         (4,772)         $     (2,204)         $  (10,642)         $  (16,177)         $          (294)         $        (3,913)         $      (6,001)         $         4,844                      $    (71,718)         $      (52,959)         $   (124,677)
Non-property changes (2)                 -                    -                       -                   100                 200                       128                     -                   -                   -                      250                      135                      -                  (10,149)                           (9,336)                  9,336                     -
Curiosity revenue                            (12)                 (16)                      -                     -                   -                         -                     -                  (6)                 (9)                     (29)                       -                    (27)                      (1)                             (100)                    100                     -
Curiosity expense                             -                    -                       -                 1,474               2,426                     1,865                 2,281                   -                   -                    4,634                    1,769                      -                    2,283                            16,732                  24,963                41,695
Amortization of mortgage prices                   -                    -                       -                   145                 282                       153                    13                   -                   -                      334                      136                      -                      104                             1,167                   2,242                 3,409
Depreciation and amortization            7,648                5,032                   6,667                 3,126               3,006                     2,441                 4,562               8,768              12,028                    5,992                    2,772                  3,949                    7,380                            73,371                       -                73,371
Earnings tax expense (profit)                 -                 (703)                      -                     -                   -                         -                     -                 (11)                  -                        -                        -                      -                      (83)                             (797)                 (3,609)               (4,406)
Non-hotel EBITDA possession
expense (revenue)                            10                   53                     175                   533                  27                        99                   325                 258                 463                      615                      968                    346                      246                             4,118                  (4,118)                    -
Resort EBITDA together with quantities
attributable to noncontrolling
curiosity                                (5,076)                 353                  (5,388)                1,018               6,707                       (86)                4,977              (1,633)             (3,695)                  11,502                    1,867                 (1,733)                   4,624                            13,437                 (24,045)              (10,608)
Much less: EBITDA changes
attributable to consolidated
noncontrolling curiosity                  1,269                  (88)                      -                     -                   -                         -                     -                   -                   -                        -                        -                      -                        -                             1,181                  (1,181)                    -
Fairness in earnings (loss) of
unconsolidated entities                      -                    -                       -                     -                   -                         -                     -                   -                   -                        -                        -                      -                        -                                 -                     217                   217
Firm's portion of EBITDA of
OpenKey                                      -                    -                       -                     -                   -                         -                     -                   -                   -                        -                        -                      -                        -                                 -                    (214)                 (214)
Resort EBITDA attributable to
the Firm and OP unitholders $        (3,807)         $       265          $       (5,388)         $      1,018          $    6,707          $            (86)         $      4,977          $   (1,633)         $   (3,695)         $        11,502          $         1,867          $      (1,733)         $         4,624                      $     14,618          $      (25,223)         $    (10,605)


_____________

(1)Represents bills not recorded on the particular person resort property stage.
(2)Contains allotted quantities which weren’t particular to resort properties, such
as achieve on sale of resort property, company taxes, insurance coverage and authorized
bills.

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The next desk reconciles internet revenue (loss) to EBITDA attributable to the
Firm and OP unitholders on a property-by-property foundation for every of our resort
properties owned and on a company foundation throughout the yr ended December 31,
2019. The outcomes of The Ritz-Carlton Lake Tahoe are included from its
acquisition date by December 31, 2019 (in 1000's) (unaudited):

                                                                                                                                                                                                  Yr Ended December 31, 2019
                                                   Hilton La                                                                                                           Park Hyatt
                                Capital           Jolla Torrey         Sofitel Chicago         Bardessono Resort        Pier Home                                     Beaver Creek          The Notary                              The Ritz-Carlton         The Ritz-Carlton        Marriott Seattle        The Ritz-Carlton                                 Company /          Braemar Motels
                                 Hilton              Pines             Magnificent Mile            and Spa            Resort & Spa          Resort Yountville          Resort & Spa            Resort             The Clancy              Sarasota                Lake Tahoe              Waterfront              St. Thomas             Resort Whole           Allotted(1)          & Resorts Inc.
Web revenue (loss)             $   6,220          $     9,817          $           (24)         $         (36)         $    8,303          $            

868 $ 1,609 $ (493) $ 3,739 $ (484) $

           606          $      10,124          $        30,595          $     70,844          $      (69,648)         $      1,196
Non-property changes (2)          -                    -                        -                      -                 (89)                        (9)                    -              1,186                    -                      (23)                       -                      -                  (25,953)              (24,888)                 24,888                     -
Curiosity revenue                     (57)                 (75)                       -                      -                   -                          -                     -                (20)                 (16)                     (69)                       -                    (48)                      (2)                 (287)                    287                     -
Curiosity expense                      -                    -                        -                  1,952                 764                      2,489                 3,427                  -                    -                    5,847                    2,294                      -                    3,087                19,860                  30,304                50,164
Amortization of mortgage prices            -                    -                        -                    138                  69                        146                   138                  -                    -                      318                      129                      -                      154                 1,092                   3,251                 4,343
Depreciation and amortization     7,915                5,616                    6,659                  3,108               2,615                      2,576                 4,495              8,369               10,355                    7,715                    4,426                  3,976                    2,476                70,301                    (189)               70,112
Earnings tax expense (profit)          -                  251                        -                      -                   -                          -                     -                (42)                   -                        -                        -                      -                       77                   286                   1,478                 1,764
Non-hotel EBITDA possession
expense (revenue)                     63                   86                      534                    448                  38                        132                   473                850                  170                      322                      720                    198                      965                 4,999                  (4,999)                    -
Resort EBITDA together with
quantities attributable to
noncontrolling curiosity          14,141               15,695                    7,169                  5,610              11,700                      6,202                10,142              9,850               14,248                   13,626                    8,175                 14,250                   11,399               142,207                 (14,628)              127,579
Much less: EBITDA changes
attributable to consolidated
noncontrolling curiosity          (3,535)              (3,924)                       -                      -                   -                          -                     -                  -                    -                        -                        -                      -                        -                (7,459)                  7,459                     -
Fairness in earnings (loss) of
unconsolidated entities               -                    -                        -                      -                   -                          -                     -                  -                    -                        -                        -                      -                        -                     -                     199                   199
Firm's portion of EBITDA
of OpenKey                            -                    -                        -                      -                   -                          -                     -                  -                    -                        -                        -                      -                        -                     -                    (195)                 (195)
Resort EBITDA attributable to
the Firm and OP
unitholders                   $  10,606          $    11,771          $         7,169          $       5,610          $   11,700          $           6,202          $     10,142          $   9,850          $    14,248          $        13,626          $         8,175          $      14,250          $        11,399          $    134,748          $       (7,165)         $    127,583


__________________

(1)Represents bills not recorded on the particular person resort property stage.
(2)Contains allotted quantities which weren’t particular to resort properties, such
as achieve on sale of resort property, company taxes, insurance coverage and authorized
bills.

                                      105
--------------------------------------------------------------------------------


FFO is calculated on the idea outlined by NAREIT, which is internet revenue (loss)
attributable to frequent stockholders, computed in accordance with GAAP, excluding
positive aspects or losses on insurance coverage settlement and disposition of property, plus
impairment prices on actual property, depreciation and amortization of actual property
property, and after redeemable noncontrolling pursuits within the working
partnership and changes for unconsolidated entities. NAREIT developed FFO as
a relative measure of efficiency of an fairness REIT to acknowledge that
income-producing actual property traditionally has not depreciated on the idea
decided by GAAP. Our calculation of Adjusted FFO excludes dividends on Collection
B Convertible Most popular Inventory, achieve/loss on extinguishment of most popular inventory,
transaction and conversion prices, write-off of mortgage prices and exit charges, authorized,
advisory and settlement prices, advisory companies incentive charge, different
revenue/expense and non-cash objects comparable to curiosity expense on Convertible Senior
Notes, curiosity expense accretion on refundable membership membership deposits,
amortization of mortgage prices, unrealized achieve/loss on derivatives,
inventory/unit-based compensation and the Firm's portion of changes to FFO of
OpenKey. FFO and Adjusted FFO exclude quantities attributable to the portion of a
partnership owned by the third-party. We take into account FFO and Adjusted FFO to be
applicable measures of our ongoing normalized working efficiency as a REIT.
We compute FFO in accordance with our interpretation of requirements established by
NAREIT, which will not be corresponding to FFO reported by different REITs that both
don't outline the time period in accordance with the present NAREIT definition or
interpret the NAREIT definition in another way than us. FFO and Adjusted FFO don't
symbolize money generated from working actions as decided by GAAP and
shouldn't be thought-about as a substitute for GAAP internet revenue or loss as an
indication of our monetary efficiency or GAAP money flows from working
actions as a measure of our liquidity. FFO and Adjusted FFO are additionally not
indicative of funds out there to fulfill our money wants, together with our potential
to make money distributions. Nonetheless, to facilitate a transparent understanding of our
historic working outcomes, we consider that FFO and Adjusted FFO needs to be
thought-about together with our internet revenue or loss and money flows reported in our
consolidated monetary statements.
                                      106
--------------------------------------------------------------------------------


The next desk reconciles internet revenue (loss) to FFO and Adjusted FFO (in
1000's) (unaudited):

                                                                               Yr Ended December 31,
                                                                                    2021               2020               2019
Web revenue (loss)                                                           

$ (32,911) $ (124,677) $ 1,196
(Earnings) loss attributable to noncontrolling curiosity in
consolidated entities

                                                               2,650               6,436            (2,032)

Web (Earnings) loss attributable to redeemable noncontrolling
pursuits in working partnership

                                                  3,597              12,979             1,207
Most popular dividends                                                                (8,745)            (10,219)          (10,142)
Achieve (loss) on extinguishment of most popular inventory                                   (4,595)                  -                 -
Web revenue (loss) attributable to frequent stockholders                             (40,004)           (115,481)           (9,771)
Depreciation and amortization on actual property (1)                                   71,072              70,426            66,933

Web revenue (loss) attributable to redeemable noncontrolling
pursuits in working partnership

                                                 (3,597)            (12,979)           (1,207)
Fairness in (earnings) lack of unconsolidated entity                                    252                 217               199
(Achieve) loss on insurance coverage settlement and disposition of property                        (696)            (10,149)          (25,165)
Firm's portion of FFO of OpenKey                                                  (251)               (216)             (201)
FFO out there to frequent stockholders and OP unitholders                            26,776             (68,182)           30,788
Collection B Convertible Most popular Inventory dividends                                      4,747               6,919             6,842
(Achieve) loss on extinguishment of most popular inventory                                    4,595                   -                 -
Transaction and conversion prices                                                    2,637               1,370             2,076
Different (revenue) expense                                                                  -               5,126            13,947
Curiosity expense on Convertible Senior Notes                                        3,378                   -                 -

Curiosity expense accretion on refundable membership membership
advantages

                                                                              772                 818               864
Write-off of mortgage prices and exit charges                                               1,963               3,920               647
Amortization of mortgage prices (1)                                                      2,121               3,332             4,263
Unrealized (achieve) loss on funding in Ashford Inc.                                    -                   -            (7,872)
Unrealized (achieve) loss on derivatives                                                 (32)             (4,959)            1,103
Non-cash inventory/unit-based compensation                                             10,204               7,892             7,943
Authorized, advisory and settlement prices                                                 (208)              2,023               527

Firm's portion of changes to FFO of OpenKey                                      7                  13                28

Adjusted FFO out there to frequent stockholders, OP unitholders,
Collection B Cumulative Convertible most popular stockholders and
convertible notice holders on an “as transformed” foundation

    $  56,960          $  (41,728)         $ 61,156


____________________

(1)Web of adjustment for noncontrolling curiosity in consolidated entities. The
following desk presents the quantities of the changes for noncontrolling
pursuits for every line merchandise:


                                                             Yr Ended 

December 31,

                                                                      2021          2020          2019
Depreciation and amortization on actual property                       $ 

(2,690) $ (2,945) $ (3,179)


Amortization of mortgage prices                                              

(87) (77) (80)

                                      107

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