Braemar Hotels & Resorts Inc.

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Braemar Hotels and Resorts Inc. Second Quarter 2024 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. I would now like to turn the conference over to Derek Eubanks, Chief Financial Officer. Please go ahead.

Good morning and welcome to today's call to review results for Braemar Hotels and Resorts for the second quarter of 2024 and to update you on recent developments. On the call today will be Richard Stockton, President and Chief Executive Officer, as well as Chris Nixon, Executive Vice President and Head of Asset Management. The results, as well as notice of the accessibility of this conference call on a listen-only basis over the Internet, were distributed yesterday in a press release. At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the safe harbor provisions of the federal securities regulations. Such forward-looking statements are subject to numerous assumptions, uncertainties, and known or unknown risks, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call, and the company is not obligated to publicly update or revise them. Statements made during this call do not constitute an offer to sell or a solicitation of an offer to buy any securities. Securities will be offered only by means of a registration statement and prospectus, which can be found at www.sec.gov. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the company's earnings release and accompanying tables or schedules, which have been filed in Form 8K with the SEC on July 31, 2024, and may also be accessed through the company's website at www.bhreit.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. Also, unless otherwise stated, all reported results in this call compare the second quarter ended June 30, 2024 with the second quarter ended June 30, 2023. I will now turn the call over to Richard Stockton. Please go ahead.

Good morning and welcome to our 2024 Second Quarter Earnings Conference Call. I'll begin today's call by providing an overview of our business, an update on our portfolio, and our recently announced plans to create additional shareholder value. Then Derek will provide a review of our financial results and Chris will provide an update on our asset management activity. Afterwards, we will open the call for Q&A. We have several key themes for today's call. First, our urban hotels delivered strong performance in the quarter with comparable RevPar growth of 6% over the prior year quarter. Second, our most recent acquisition, the Four Seasons Resort Scottsdale at Troon North, continues to perform well and achieve RevPar growth of 10% in the quarter. Third, as we continue to diligently work through our refinancing program, we have refinance extended or paid down all of our 2024 debt maturities. And fourth, we're pleased with the progress we have made in our recently announced shareholder value creation plan with the closing of the sale of the Hilton La Jolla Torrey Pines at an attractive value. Let me first turn to our results. We reported comparable RevPAR of $305, which reflected a 1.5% decrease over the prior year quarter, and comparable hotel EBITDA of $51.1 million. We continue to be very encouraged by the strong performance of our urban hotels, which achieved RevPAR growth of 6% in the quarter. Regarding our urban assets, RevPAR for the quarter was $228, and comparable hotel EBITDA was $22.1 million. Looking ahead, We remain very encouraged by the continued momentum for this segment of our portfolio. However, this impressive performance was offset by softness in our resort average daily rates, which are still coming off historic highs that follow the pandemic. Nevertheless, our luxury resort portfolio delivered admirable performance with hotel EBITDA of $29 million during the second quarter. The brightest spot within our resort portfolio was our most recent acquisition, the Four Seasons Resort Scottsdale at True North. which continues to exceed our expectations. The property was acquired in December 2022 and fits perfectly with our strategy of owning high-ref par luxury hotels and resorts. It delivered a strong second quarter performance with hotel EBITDA up 21.6%. We continue to be very excited about the prospects for this hotel. While the Ritz-Carlton Reserve Dorado Beach had a challenging quarter, both of our recent acquisitions continue to perform well compared to our acquisition costs and our initial underwriting. Over the trailing 12 months, the Ritz-Carlton Reserve Dorado Beach achieved a 9.2% yield on cost, while the Four Seasons Scottsdale achieved an 8% yield on cost. These luxury assets have both outpaced our underwriting, and looking ahead to the next several quarters, we remain very encouraged about the prospects for these well-positioned properties. Looking at Framework's capital position, we continue to emphasize balance sheet flexibility. With the recent closing of the sale of the Hilton La Jolla Torrey Pines, we've now addressed all of our 2024 debt maturities. During the quarter, we announced a shareholder value creation plan, which has four components. They are, number one, execute select non-core asset sales, including the recent sale of the Hilton La Jolla Torrey Pines. Number two, the repayment of our remaining 2024 debt maturities. Number three, a $50 million preferred share redemption program. And number four, a $50 million common share buyback authorization. Subsequent to quarter end, we sold the Hilton La Jolla Torrey Pines for $165 million or $419,000 per key, including anticipated capital expenditures of $40 million. The sales price represents a 7.2% capitalization rate on net operating income for the trailing 12 months ended March 31st, 2024. Looking ahead, We are also evaluating the sale of two more hotels. To date, we have redeemed approximately $40.1 million of our non-traded preferred stock. We believe these announcements reflect our commitment to maximize value for our shareholders and look forward to providing more updates in the coming weeks and months as we work through our plan. In summary, Raymoor has a unique well-positioned portfolio and a solid liquidity position. As we look ahead to the remainder of 2024, we believe Braemar is on firm footing to perform well in both the near and long term. I will now turn the call over to Derek to take you through our financials in more detail.