Braemar Hotels & Resorts Inc. (BHR)

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains registered trademarks that are the exclusive property of their respective owners, which are companies other than us, including Marriott International®, Hilton Worldwide®, Sofitel®, Hyatt® and Accor®.

FORWARD-LOOKING STATEMENTS

Throughout this Form 10-Q, we make forward-looking statements that are subject to risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or other similar words or expressions. Additionally, statements regarding the following subjects are forward-looking by their nature:

•our business and investment strategy;

•anticipated or expected purchases or sales of assets;

•our projected operating results;

•completion of any pending transactions;

•our understanding of our competition;

•projected capital expenditures; and

•the impact of technology on our operations and business.

Such forward-looking statements are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Additionally, the following factors could cause actual results to vary from our forward-looking statements:

•the factors discussed in our Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission (the “SEC”) on March 12, 2026 (the “2025 10-K”), including those set forth under the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Properties” and other filings under the Exchange Act;

•changes in interest rates and inflation;

•macroeconomic conditions, such as a prolonged period of weak economic growth, and volatility in capital markets;

•uncertainty in the business sector and market volatility;

•catastrophic events or geopolitical conditions, such as the conflict between Russia and Ukraine, Israel-Palestine-Iran conflict, ongoing instability in Venezuela and changes to tariffs or trade policies;

•extreme weather conditions, which may cause property damage or interrupt business;

•our ability to raise sufficient capital and/or take other actions to improve our liquidity position or otherwise meet our liquidity requirements;

•general volatility of the capital markets and the market price of our common and preferred stock;

•general business and economic conditions affecting the lodging and travel industry;

•changes in our business or investment strategy;

•availability, terms and deployment of capital;

•risks associated with our ability to effectuate our dividend policy, including factors such as operating results and the economic outlook influencing our board’s decision whether to pay further dividends at levels previously disclosed or to use available cash to pay dividends;

•unanticipated increases in financing and other costs, including changes in interest rates;

•changes in our industry and the markets in which we operate, interest rates, or local economic conditions;

•the degree and nature of our competition;

•actual and potential conflicts of interest with Ashford Trust, Ashford Inc. and its subsidiaries (including Ashford LLC, Remington Hospitality and Premier), and our executive officers and our non-independent directors;

•changes in personnel of Ashford LLC or the lack of availability of qualified personnel;

•changes in governmental regulations, accounting rules, tax rates and similar matters;

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•legislative and regulatory changes, including changes to the Internal Revenue Code of 1986, as amended (the “Code”) and related rules, regulations and interpretations governing the taxation of REITs, including impacts from the One Big Beautiful Bill Act;

•limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes; and

•future sales and issuances of our common stock or other securities, which might result in dilution and could cause the price of our common stock to decline.

When considering forward-looking statements, you should keep in mind the matters summarized under “Item 1A. Risk Factors” in Part I of our 2025 10-K and this Form 10-Q, and the discussion in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, could cause our actual results and performance to differ significantly from those contained in our forward-looking statements. Accordingly, we cannot guarantee future results or performance. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Form 10-Q. Furthermore, we do not intend to update any of our forward-looking statements after the date of this Form 10-Q to conform these statements to actual results and performance, except as may be required by applicable law.

Overview

We are a Maryland corporation formed in April 2013 that invests primarily in high revenue per available room (“RevPAR”), luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by STR, LLC. Two times the U.S. national average was $200 for the year ended December 31, 2025. We have elected to be taxed as a REIT under the Code. We conduct our business and own substantially all of our assets through our operating partnership, Braemar OP.

We operate in the direct hotel investment segment of the hotel lodging industry. As of March 31, 2026, we owned interests in 13 hotel properties in six states, the District of Columbia, Puerto Rico and St. Thomas, U.S. Virgin Islands with 3,028 total rooms. The hotel properties in our current portfolio are predominantly located in U.S. urban markets and resort locations with favorable growth characteristics resulting from multiple demand generators.

We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC”) through an advisory agreement. Ashford LLC is a subsidiary of Ashford Inc. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.

We do not operate any of our hotel properties directly; instead, we contractually engage hotel management companies to operate them for us under management contracts. As of March 31, 2026, Remington Hospitality, a subsidiary of Ashford Inc., managed five of our 13 hotel properties. Third-party management companies managed the remaining hotel properties.

Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to, design and construction services, debt placement and related services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers compensation and business automobile claims, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and cash management services.

Mr. Monty J. Bennett, chairman of our board of directors and chairman and chief executive officer of Ashford Inc. and his father, Mr. Archie Bennett, Jr. (together, the “Bennetts”), as of March 31, 2026, hold a controlling interest in Ashford Inc. The Bennetts owned approximately 809,937 shares of Ashford Inc. common stock, which represented an approximate 52.5% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc. Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, was convertible (at a conversion price of $117.50 per share) into an additional approximate 4,656,337 shares of Ashford Inc. common stock, which if converted as of March 31, 2026, would have increased the Bennetts’ ownership interest in Ashford Inc. to 88.2%. The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts. Additionally, Mr. Monty J. Bennett acquired the right to direct votes, effective March 25, 2025, and as of March 31, 2026, those rights represented approximately 534,000 common shares.

As of March 31, 2026, Mr. Monty J. Bennett and Mr. Archie Bennett, Jr., together owned approximately 2,472,808 shares of our common stock (including common units, LTIP and performance LTIP units), which represented an approximate 3.4% ownership in the Company.

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Recent Developments

On February 20, 2026, our board of directors, in consultation with counsel, in compliance with Article II, Section 12 of the Company’s bylaws, voted unanimously (with Mr. Ghassemieh recused) to determine that Mr. Ghassemieh was in breach of the cooperation agreement entered into on August 25, 2025 between the Company, Ashford Trust, Ashford Inc. and Mr. Ghassemieh (the “Ghassemieh Agreement”). Accordingly, pursuant to Section 4(a)(ii) of the Ghassemieh Agreement, Mr. Ghassemieh’s irrevocable resignation letter executed by Mr. Ghassemieh in connection with the Ghassemieh Agreement became effective on February 20, 2026.

On March 5, 2026, Ashford Inc. and Ashford LLC agreed with Deric Eubanks, the Chief Financial Officer of Ashford Inc., and Ashford LLC that, effective March 31, 2026 (the “Termination Date”), Mr. Eubanks would terminate employment with and service to Ashford Inc., Ashford LLC and their affiliates. Mr. Eubanks was also the Chief Financial Officer of the Company and Ashford Trust and accordingly his service as Chief Financial Officer of each of the Company and Ashford Trust ended effective as of the Termination Date. Effective on the Termination Date, Justin Coe, the Company’s current Chief Accounting Officer and principal accounting officer, assumed the role of principal financial officer of the Company.

On March 31, 2026, the Advisor delivered written notice to the Company of the Advisor’s election to extend the term of our advisory agreement (the “Extension Notice”). Pursuant to Section 12.2 of our advisory agreement, the Advisor exercised its right to extend the agreement for an additional ten-year term, commencing on January 24, 2027 and expiring on January 24, 2037. All terms, conditions, rights and obligations under our advisory agreement will remain in full force and effect during the extended term, subject to Section 6.6 of our advisory agreement that provides the parties to our advisory agreement the right to renegotiate the amount of the Base Fee or Incentive Fee (as such terms are defined in our advisory agreement) payable by the Company.

On April 23, 2026, the Company announced that its board of directors declared and set aside the April 2026 portion of the second quarter 2026 dividends for its Series B Convertible Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series M Preferred Stock.

On April 27, 2026, the Company entered into an Agreement of Purchase and Sale (the “Agreement”) for the sale of Park Hyatt Beaver Creek Resort & Spa located in Avon, Colorado for $176 million in cash, subject to customary pro-ra

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and the accompanying notes thereto included in Item 8. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K. See “Forward-Looking Statements.”

This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Overview

We are a Maryland corporation formed in April 2013 that invests primarily in high revenue per available room (“RevPAR”), luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by STR, LLC. Two times the U.S. national average was $200 for the year ended December 31, 2025. We have elected to be taxed as a REIT under the Code. We conduct our business and own substantially all of our assets through our operating partnership, Braemar OP.

We operate in the direct hotel investment segment of the hotel lodging industry. As of December 31, 2025, we owned interests in 13 hotel properties in six states, the District of Columbia, Puerto Rico and St. Thomas, U.S. Virgin Islands with 3,028 total rooms. The hotel properties in our current portfolio are predominantly located in U.S. urban markets and resort locations with favorable growth characteristics resulting from multiple demand generators.

We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC”) through an advisory agreement. Ashford LLC is a subsidiary of Ashford Inc. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.

We do not operate any of our hotel properties directly; instead, we contractually engage hotel management companies to operate them for us under management contracts. As of December 31, 2025, Remington Hospitality, a subsidiary of Ashford Inc., managed five of our 13 hotel properties. Third-party management companies managed the remaining hotel properties.

Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to, design and construction services, debt placement and related services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers compensation and business automobile claims, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and cash management services.

Recent Developments

On August 26, 2025, Braemar entered into an agreement with Ashford Inc. to explore a potential sale of Braemar. Pursuant to the Letter Agreement, Braemar and Ashford Inc. agreed that the termination fee payable to Ashford Inc. under the advisory agreement is $574.8 million (exclusive of accrued fees). However, Braemar and Ashford Inc. have agreed to the payment of a discounted aggregate amount of $480.0 million plus accrued fees. Ashford Inc. received a $17.0 million payment upon execution of the agreement. The $17.0 million payment will be credited against other amounts due to Ashford Inc. from Braemar if the sale of the Company does not occur before July 1, 2028. On December 22, 2025, Braemar entered into the Amendment. The Amendment was entered into in order to eliminate unintended ambiguity regarding the circumstances under which the termination fees become due and payable to Ashford Inc. and the timing of payment in order to more fully reflect the parties’ original intent under the Letter Agreement and ensure consistency across potential transaction structures in how the proceeds from a Company Sale Transaction (as defined in the Letter Agreement) are applied.

On November 6, 2025, we sold The Clancy pursuant to an Agreement of Purchase and Sale, entered into effective October 6, 2025, for $115.0 million in cash, subject to customary pro-rations and adjustments. Additionally, the Company repaid approximately $64.7 million on the mortgage loan that was partially secured by the hotel property.

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On February 20, 2026, our board of directors, in consultation with counsel, in compliance with Article II, Section 12 of the Company’s bylaws, voted unanimously (with Mr. Ghassemieh recused) to determine that Mr. Ghassemieh was in breach of the cooperation agreement entered into on August 25, 2025 between the Company, Ashford Trust, Ashford Inc. and Mr. Ghassemieh (the “Ghassemieh Agreement”). Accordingly, pursuant to Section 4(a)(ii) of the Ghassemieh Agreement, Mr. Ghassemieh’s irrevocable resignation letter executed by Mr. Ghassemieh in connection with the Ghassemieh Agreement became effective on February 20, 2026.

On March 5, 2026, Ashford Inc. and Ashford LLC agreed with Deric Eubanks, the Chief Financial Officer of Ashford Inc., and Ashford LLC that, effective March 31, 2026 (the “Termination Date”), Mr. Eubanks would terminate employment with and service to Ashford Inc., Ashford LLC and their affiliates. Mr. Eubanks is also the Chief Financial Officer of the Company and Ashford Trust and accordingly his service as Chief Financial Officer of each of the Company and Ashford Trust will also end effective as of the Termination Date. Effective on the Termination Date, Justin Coe, the Company’s current Chief Accounting Officer and principal accounting officer, will serve as the principal financial officer of the Company.

Key Indicators of Operating Performance

We use a variety of operating and other information to evaluate the operating performance of our business. These key indicators include financial information that is prepared in accordance with GAAP, as well as other financial measures that are non-GAAP measures. In addition, we use other information that may not be financial in nature, including statistical information and comparative data. We use this information to measure the operating performance of our individual hotels, groups of hotels and/or business as a whole. We also use these metrics to evaluate the hotels in our portfolio and potential acquisitions to determine each hotel’s contribution to cash flow and its potential to provide attractive long-term total returns. These key indicators include:

•Occupancy. Occupancy means the total number of hotel rooms sold in a given period divided by the total number of rooms available. Occupancy measures the utilization of our hotels’ available capacity. We use occupancy to measure demand at a specific hotel or group of hotels in a given period.

•ADR. ADR means average daily rate and is calculated by dividing total hotel rooms revenues by total number of rooms sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. We use ADR to assess the pricing levels that we are able to generate.

•RevPAR. RevPAR means revenue per available room and is calculated by multiplying ADR by the average daily occupancy. RevPAR is one of the commonly used measures within the hotel industry to evaluate hotel operations. RevPAR does not include revenues from food and beverage sales or parking, telephone or other non-rooms revenues generated by the property. Although RevPAR does not include these ancillary revenues, it is generally considered the leading indicator of core revenues for many hotels. We also use RevPAR to compare the results of our hotels between periods and to analyze results of our comparable hotels (comparable hotels represent hotels we have owned for the entire period). RevPAR improvements attributable to increases in occupancy are generally accompanied by increases in most categories of variable operating costs. RevPAR improvements attributable to increases in ADR are generally accompanied by increases in limited categories of operating costs, such as management fees and franchise fees.

RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR. For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in increased other operating department revenue and expenses. Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs.

Occupancy, ADR and RevPAR are commonly used measures within the lodging industry to evaluate operating performance. RevPAR is an important statistic for monitoring operating performance at the individual hotel level and across our entire business. We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only rooms revenue. Rooms revenue is dictated by demand (as measured by occupancy), pricing (as measured by ADR) and our available supply of hotel rooms.

We also use funds from operations (“FFO”), Adjusted FFO, earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) and Adjusted EBITDAre as measures of the operating performance of our business. See “Non-GAAP Financial Measures.”

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Principal Factors Affecting Our Results of Operations

The principal factors affecting our operating results include overall demand for hotel rooms compared to the supply of available hotel rooms, and the ability of our third-party management companies to increase or maintain revenues while controlling expenses.

Demand. The demand for lodging, including business travel, is directly correlated to the overall economy; as GDP increases, lodging demand typically increases. Historically, periods of declining demand are followed by extended periods of relatively strong demand, which typically occurs during the growth phase of the lodging cycle.

Supply. The development of new hotels is driven largely by construction costs, the availability of financing and expected performance of existing hotels. Short-term supply is also expected to be below long-term averages. While the industry is expected to have supply growth below historical averages, we may experience supply growth, in certain markets, in excess of national averages that may negatively impact performance.

We expect that our ADR, occupancy and RevPAR performance will be impacted by macroeconomic factors such as national and local employment growth, personal income and corporate earnings, GDP, consumer confidence, office vacancy rates and business relocation decisions, airport and other business and leisure travel, new hotel construction, the pricing strategies of competitors and currency fluctuations. In addition, our ADR, occupancy and RevPAR performance are dependent on the continued success of the Marriott, Hilton, Four Seasons, Hyatt and Sofitel brands.

Revenue. Substantially all of our revenue is derived from the operation of hotels. Specifically, our revenue is comprised of:

•Rooms revenue: Occupancy and ADR are the major drivers of rooms revenue. Rooms revenue accounts for the substantial majority of our total revenue.

•Food and beverage revenue: Occupancy and the type of customer staying at the hotel are the major drivers of food and beverage revenue (i.e., group business typically generates more food and beverage business through catering functions when compared to transient business, which may or may not utilize the hotel’s food and beverage outlets or meeting and banquet facilities).

•Other hotel revenue: Occupancy and the nature of the property are the main drivers of other ancillary revenue, such as telecommunications, parking and leasing services.

Hotel Operating Expenses. The following presents the components of our hotel operating expenses:

•Rooms expense: These costs include housekeeping wages and payroll taxes, reservation systems, room supplies, laundry services and front desk costs. Like rooms revenue, occupancy is the major driver of rooms expense and, therefore, rooms expense has a significant correlation to rooms revenue. These costs can increase based on increases in salaries and wages, as well as the level of service and amenities that are provided.

•Food and beverage expense: These expenses primarily include food, beverage and labor costs. Occupancy and the type of customer staying at the hotel (i.e., catered functions generally are more profitable than restaurant, bar or other on-property food and beverage outlets) are the major drivers of food and beverage expense, which correlates closely with food and beverage revenue.

•Management fees: Base management fees are computed as a percentage of gross revenue. Incentive management fees generally are paid when operating profits exceed certain threshold levels.

•Other hotel expenses: These expenses include labor and other costs associated with the other operating department revenues, as well as labor and other costs associated with administrative departments, franchise fees, sales and marketing, repairs and maintenance and utility costs.

Most categories of variable operating expenses, including labor costs such as housekeeping, fluctuate with changes in occupancy. Increases in occupancy are accompanied by increases in most categories of variable operating expenses, while increases in ADR typically only result in increases in limited categories of operating costs and expenses, such as franchise fees, management fees and credit card processing fee expenses which are based on hotel revenues. Thus, changes in ADR have a more significant impact on operating margins than changes in occupancy.

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RESULTS OF OPERATIONS

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

The following table summarizes changes in key line items from our consolidated statements of operations for the year ended December 31, 2025 and 2024 (in thousands except percentages):

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

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

The following table illustrates the key performance indicators of the 13 comparable hotel properties that were owned for the full year ended December 31, 2025 and 2024:

Net Income (Loss) Attributable to the Company. Net loss attributable to the Company increased $20.6 million from a $1.7 million loss for the year ended December 31, 2024 (“2024”) to a $22.3 million loss for the year ended December 31, 2025 (“2025”), as a result of the factors discussed below.

Rooms Revenue. Rooms revenue decreased $23.4 million to $429.0 million during 2025 compared to 2024 primarily due to the sales of Marriott Seattle Waterfront in August 2025 and Hilton La Jolla Torrey Pines in July 2024. During 2025, our 13 comparable hotel properties experienced a 3.7% increase in room rates and a 181 basis point decrease in occupancy compared to 2024.

Fluctuations in rooms revenue between 2025 and 2024 are a result of the changes in occupancy and ADR between 2025 and 2024 as reflected in the table below (dollars in thousands):

________

(1)This hotel was under renovation during 2025.

(2)This hotel was under renovation during 2024.

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Food and Beverage Revenue. Food and beverage revenue decreased $1.7 million, or 0.9%, to $179.5 million during 2025 compared to 2024. We experienced an aggregate decrease in food and beverage revenue of $4.7 million at The Ritz-Carlton St. Thomas, Cameo Beverly Hills, Capital Hilton and Park Hyatt Beaver Creek Resort & Spa and a decrease of $11.3 million due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of approximately $14.3 million at nine comparable hotel properties.

Other Hotel Revenue. Other hotel revenue, which consists mainly of condominium management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, increased $694,000, or 0.7%, to $95.5 million during 2025 compared to 2024. This increase is attributable to higher other hotel revenue of $7.5 million at eight comparable hotel properties. These increases were partially offset by a decrease of $4.9 million due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines and an aggregate decrease of approximately $1.9 million at Park Hyatt Beaver Creek Resort & Spa, Cameo Beverly Hills, The Ritz-Carlton St. Thomas, Four Seasons Resort Scottsdale and Hotel Yountville.

Rooms Expense. Rooms expense decreased $2.1 million, or 2.0%, to $104.4 million in 2025 compared to 2024. This decrease is attributable to an aggregate decrease in rooms expense of $646,000 at Sofitel Chicago Magnificent Mile, Park Hyatt Beaver Creek Resort & Spa, Pier House Resort & Spa and The Notary Hotel and a decrease of $5.9 million due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of $4.4 million at nine comparable hotel properties.

Food and Beverage Expense. Food and beverage expense decreased $4.1 million, or 2.8%, to $141.8 million during 2025 compared to 2024. This decrease is attributable to lower aggregate food and beverage expense of approximately $2.7 million at seven comparable hotel properties and a decrease of $7.0 million due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of approximately $5.6 million at The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, The Ritz-Carlton Reserve Dorado Beach, Capital Hilton, Pier House Resort & Spa and The Notary Hotel.

Other Operating Expenses. Other operating expenses decreased $1.9 million, or 0.8%, to $224.0 million in 2025 compared to 2024. Other operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and incentive management fees.

We experienced an increase of $432,000 in direct expenses and a decrease of $2.3 million in indirect expenses and incentive management fees in 2025 compared to 2024. Direct expenses were 4.7% of total hotel revenue in 2025 and 4.5% in 2024.

The increase in direct expenses is associated with higher direct expenses of $1.6 million at The Ritz-Carlton Sarasota, Four Seasons Resort Scottsdale, The Ritz-Carlton Lake Tahoe, The Notary Hotel, The Ritz-Carlton Reserve Dorado Beach, Sofitel Chicago Magnificent Mile and Cameo Beverly Hills partially offset by lower direct expenses of approximately $400,000 at six comparable hotel properties and a decrease of $759,000 due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines.

The decrease in indirect expenses is comprised of decreases in: (i) lease expense of $2.2 million comprising of a decrease of $1.9 million from the three disposed hotel properties and an aggregate decrease of $299,000 at our 13 comparable hotel properties; (ii) marketing costs of $1.4 million comprising an aggregate decrease of $3.5 million from the three disposed hotel properties partially offset by an increase of $2.1 million at our 13 comparable hotel properties; and (iii) incentive management fees of $280,000 including $507,000 from the three disposed hotel properties partially offset by an increase of $227,000 at our 13 comparable hotel properties. These decreases were partially offset by increases in: (i) general and administrative costs of $1.3 million comprising an aggregate increase of $5.4 million at our 13 comparable hotel properties partially offset by a decrease of $4.2 million from the three disposed hotel properties; (ii) repairs and maintenance of $230,000 comprising an aggregate increase of $1.6 million at our 13 comparable hotel properties partially offset by a decrease of $1.4 million from the three disposed hotel properties; and (iii) energy costs of $96,000 comprising an aggregate increase of $1.5 million at our 13 comparable hotel properties partially offset by a decrease of $1.4 million from the three disposed hotel properties.

Management Fees. Base management fees decreased $1.5 million, or 6.4%, to $22.0 million in 2025 compared to 2024. Management fees decreased $852,000 at eight comparable hotel properties and $1.2 million due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines. These decreases were partially offset by an aggregate increase of $577,000 at The Ritz-Carlton Reserve Dorado Beach, Four Seasons Resort Scottsdale, The Notary Hotel, Pier House Resort & Spa and Hotel Yountville.

Property Taxes, Insurance and Other. Property taxes, insurance and other decreased $8.3 million, or 19.4%, to $34.3 million in 2025 compared to 2024. This decrease is primarily attributable to a decrease of $4.9 million due to the sales of The

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Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines and an aggregate decrease of $3.7 million at nine comparable hotel properties. These decreases were partially offset by an aggregate increase of approximately $392,000 at Park Hyatt Beaver Creek Resort & Spa, Capital Hilton, Pier House Resort & Spa and Four Seasons Resort Scottsdale.

Depreciation and Amortization. Depreciation and amortization decreased $6.2 million, or 6.2%, to $92.6 million for 2025 compared to 2024. This decrease of $9.1 million is due to the sales of The Clancy, Marriott Seattle Waterfront and Hilton La Jolla Torrey Pines and an aggregate decrease of $6.3 million at The Ritz-Carlton St. Thomas, Capital Hilton, The Notary Hotel, Bardessono Hotel and Spa and Sofitel Chicago Magnificent Mile. These decreases were partially offset by an aggregate increase of $9.3 million at eight comparable hotel properties.

Impairment Charges. We recorded an impairment charge of approximately $54.5 million in 2025 related to the reductions to the expected holding periods of the hotel properties. These charges include $30.3 million for the Sofitel Chicago Magnificent Mile, $15.6 million for Hotel Yountville and $8.7 million for Bardessono Hotel & Spa as the hotel properties’ net book values exceeded their estimated fair values. There were no impairment charges in 2024.

Advisory Services Fee. Advisory services fee decreased $1.3 million, or 4.3%, to $29.2 million in 2025 compared to 2024 due to lower equity-based compensation of $2.7 million and a lower incentive fee of $1.3 million, partially offset by higher reimbursable expenses of $2.3 million and a higher base advisory fee of $452,000.

In 2025, we recorded an advisory services fee of $29.2 million, which included a base advisory fee of $14.3 million, reimbursable expenses of $13.9 million, an incentive fee of $1.4 million and a credit to expense of $451,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

In 2024, we recorded an advisory services fee of $30.5 million, which included a base advisory fee of $13.8 million, reimbursable expenses of $11.6 million, $2.3 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and an incentive fee of $2.7 million.

Corporate General and Administrative. Corporate general and administrative expense was $11.8 million in 2025 and consisted of $11.6 million in professional fees, $3.2 million of public company costs, $1.2 million related to Ashford Securities and $1.2 million in miscellaneous expenses. These expenses were partially offset by an expense reduction of $5.4 million from an insurance recovery for prior legal expenses.

Corporate general and administrative expense was $14.4 million in 2024 and consisted of $8.9 million in professional fees, $6.0 million of reimbursed legal costs, $2.3 million in public company costs, and $1.7 million in miscellaneous expenses. Additionally, during 2024 there was a revision to the estimated contribution amount associated with the Fourth Amended and Restated Contribution Agreement with Ashford Securities that resulted in a $4.5 million reduction to expense.

Gain (loss) on disposition of assets and hotel properties. In 2025, we recorded gains of approximately $82.8 million primarily related to the sales of Seattle Marriott Waterfront and The Clancy. In 2024 we recorded a gain of approximately $88.2 million primarily related to the sale of Hilton La Jolla Torrey Pines.

Equity in Earnings (Loss) of Unconsolidated Entity. There was a $56,000 loss in equity in earnings (loss) of unconsolidated entity in 2025 as a result of impairing the OpenKey note receivable in the fourth quarter of 2025. In 2024 we recorded equity in loss of unconsolidated entity of $1.6 million related to our investment in OpenKey that included an impairment charge to the OpenKey investment of $1.4 million.

Other Income (Expense). Other expense was $1.6 million in 2025 due to a realized loss from the sale of Commercial Mortgage-Backed Securities (“CMBS”).

Interest Income. Interest income was $6.2 million and $7.1 million in 2025 and 2024, respectively. The decrease in interest income in 2025 was primarily attributable to lower interest rates and lower excess cash balances compared to 2024.

Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $9.6 million, or 8.9%, to $98.5 million for 2025 compared to 2024. The decrease is primarily due to lower interest expense from lower average interest rates and lower average debt balances in 2025 partially offset by higher amortization of loan costs of approximately $3.8 million in 2025 compared to 2024.

Write-off of Loan Costs and Exit Fees. Write-off of loan costs and exit fees was $1.8 million in 2025 related to various loan refinances and modifications. Write-off of loan costs and exit fees was $6.1 million in 2024 related to various loan refinances and modifications.

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Gain (loss) on Extinguishment of Debt. In 2025, we recognized a loss on extinguishment of debt of $2.7 million from the write-off of deferred loan costs resulting from the paydown on the mortgage loan partially secured by The Clancy and Marriott Seattle Waterfront in conjunction with the sale of the properties. In 2024 we recognized a loss of $22,000 attributable to the discount associated with the Cameo Beverly Hills mortgage loan that was repaid on April 9, 2024.

Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized loss on derivatives of $355,000 for 2025 consisted of an unrealized loss on interest rate caps of $971,000, partially offset by a realized gain of $616,000 associated with payments received from counterparties on in-the-money interest rate caps.

Realized and unrealized gain on derivatives of $585,000 for 2024 primarily consisted of an unrealized gain on warrants of $12,000 and a realized gain of $4.7 million associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $4.1 million.

Income Tax (Expense) Benefit. Income tax expense increased $1.1 million, from $842,000 in 2024 to $2.0 million in 2025. The increase in tax expense is primarily due to an increase in the deferred tax liabilities of certain of our taxable entities.

(Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities. Our noncontrolling interest partners in consolidated entities were allocated a loss of $325,000 and income of $25.9 million in 2025 and 2024, respectively. The allocated income for 2024 includes our partner’s share of gain on the sale of the Hilton La Jolla Torrey Pines. For 2025, noncontrolling interest in consolidated entities represented a 25% ownership interest in one hotel property held by one entity through November 2025 when the Company purchased the remaining ownership interest and a 25% ownership interest in a JV. As of December 31, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity.

Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated a net loss of $5.8 million in 2025 and $4.5 million in 2024. Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 6.91% and 8.05% as of December 31, 2025 and 2024, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our hotel properties, including:

•advisory fees payable to Ashford LLC;

•recurring maintenance necessary to maintain our hotel properties in accordance with brand standards;

•interest expense and scheduled principal payments on outstanding indebtedness;

•dividends on our common stock;

•dividends on our preferred stock;

•redemptions of our non-traded preferred stock; and

•capital expenditures to improve our hotel properties.

We expect to meet our short-term liquidity requirements generally through net cash provided by operations, capital market activities, asset sales and existing cash balances.

Pursuant to the advisory agreement between us and our Advisor, we must pay our Advisor on a monthly basis a base advisory fee, subject to a minimum base advisory fee. The minimum base advisory fee is equal to the greater of: (i) 90% of the base fee paid for the same month in the prior fiscal year; and (ii) 1/12th of the “G&A Ratio” for the most recently completed fiscal quarter multiplied by our total market capitalization on the last balance sheet date included in the most recent quarterly report on Form 10-Q or annual report on Form 10-K that we file with the SEC. Thus, even if our total market capitalization and performance decline, we will still be required to make payments to our Advisor equal to the minimum base advisory fee, which could adversely impact our liquidity and financial condition.

Our long-term liquidity requirements consist primarily of funds necessary to pay for the costs of acquiring additional hotel properties and redevelopments, renovations, expansions and other capital expenditures that need to be made periodically with respect to our hotel properties and scheduled debt payments. We expect to meet our long-term liquidity requirements through various sources of capital, including future common and preferred equity issuances, existing working capital, net cash provided by operations, hotel mortgage indebtedness and other secured and unsecured borrowings. However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including

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as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity and market perceptions about us. The success of our business strategy will depend, in part, on our ability to access these various capital sources. While management cannot provide any assurances, management believes that our cash flow from operations and our existing cash balances will be adequate to meet upcoming anticipated requirements for interest and principal payments on debt (excluding any potential final maturity principal payments and paydowns for extension tests), working capital, and capital expenditures for the next 12 months and dividends required to maintain our status as a REIT for U.S. federal income tax purposes.

Our hotel properties will require periodic capital expenditures and renovations to remain competitive. In addition, acquisitions, redevelopments or expansions of hotel properties may require significant capital outlays. We may not be able to fund such capital improvements solely from net cash provided by operations because we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deductions for dividends paid and excluding net capital gains, to qualify and maintain our qualification as a REIT, and we are subject to tax on any retained income and gains. As a result, our ability to fund capital expenditures, acquisitions or hotel redevelopment through retained earnings is very limited. Consequently, we expect to rely heavily upon the availability of debt or equity capital for these purposes. If we are unable to obtain the necessary capital on favorable terms, or at all, our financial condition, liquidity, results of operations and prospects could be materially and adversely affected.

Certain of our loan agreements contain cash trap provisions that may be triggered if the performance of our hotel properties declines. When these provisions are triggered, substantially all of the profit generated by the hotel properties securing such loan is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. This could affect our liquidity and our ability to make distributions to our stockholders until such time that a cash trap is no longer in effect for such loan. These cash trap provisions have been triggered on one mortgage loan, as discussed below. Our loan that is in a cash trap may remain subject to the cash trap provisions for a substantial period of time which could limit our flexibility and adversely affect our financial condition or our qualification as a REIT. As of December 31, 2025, the mortgage loan secured by The Ritz-Carlton Lake Tahoe was in a cash trap. The amount of cash in the cash trap as of December 31, 2025 was $0.

As of December 31, 2025, the Company held cash and cash equivalents of $124.4 million and restricted cash of $42.5 million, the vast majority of which is comprised of lender and manager-held reserves. As of December 31, 2025, $17.1 million was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs. As of December 31, 2025, our net debt to gross assets was 46.7%.

The Company’s cash and cash equivalents are primarily comprised of corporate cash invested in short-term U.S. Treasury securities with maturity dates of less than 90 days and corporate cash held at commercial banks in Insured Cash Sweep (“ICS”) accounts, which are fully insured by the FDIC. The Company’s cash and cash equivalents also includes property-level operating cash deposited with commercial banks that have been designated as a Global Systemically Important Bank (“G-SIB”) by the Financial Stability Board (“FSB”) and a small amount deposited with other commercial banks.

Our estimated future obligations as of December 31, 2025 include both current and long-term obligations. With respect to our indebtedness, as discussed in note 7 to our consolidated financial statements, we have current obligations of $723.1 million and long-term obligations of $389.9 million. As of December 31, 2025, we held extension options to extend the principal for all of the debt due in 2026 except for $135.0 million. See discussions below in “Debt Transactions.”

As discussed in note 19 to our consolidated financial statements, under our operating leases we have current obligations of approximately $1.3 million and long-term obligations of approximately $56.2 million. Additionally, as discussed in note 18 to our consolidated financial statements, we have short-term capital commitments of approximately $18.3 million.

Each share of our Series E Preferred Stock and Series M Preferred Stock is redeemable at any time, at the option of the holder, at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends, less a redemption fee, subject to the limitations as stated in the Articles Supplementary.

As of December 31, 2025, the Company determined that a portion of the outstanding Series E Preferred Stock and Series M Preferred Stock met the criteria for mandatory redemption based on certain holders initiating redemption requests that exceeded the limitations set forth in the Articles Supplementary. As of December 31, 2025 the Company has received $30.2 million in investor-initiated Series E Preferred Stock redemption requests and $642,000 in investor-initiated Series M Preferred Stock redemption requests that have not been completed and are included in “redeemable preferred stock redemptions payable” in our consolidated balance sheet.

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Based on the various limitations in place as of December 31, 2025, and not considering any future redemption requests received, we expect that all of these redemption requests will be fulfilled over the subsequent twelve months from December 31, 2025. As of February 28, 2026 the redeemable preferred stock redemptions payable was approximately $42.4 million.

Potential Strategic Transaction

As previously disclosed, our board of directors is exploring potential strategic alternatives, including a potential sale of the Company or one or more potential transactions involving the sale of individual assets. However, there can be no assurance that the strategic process will result in a transaction of any kind. The outcome of the process will depend on many factors beyond our control, including the availability of interested buyers for the Company as a whole or for individual assets, the state of the capital markets, macroeconomic and industry conditions, and the ability to negotiate mutually acceptable terms. The failure to complete a transaction, or uncertainty about whether or when a transaction may be completed, could negatively affect investor sentiment, cause volatility in our stock price, and adversely affect our business, operating results, liquidity, and financial condition. We can give no assurance that the strategic process will result in a definitive agreement or a completed transaction, whether involving the entire Company or individual assets, on terms favorable to stockholders, or at all.

Equity Transactions

On November 13, 2019, we filed an initial registration statement with the SEC, as amended on January 24, 2020, for shares of our non-traded Series E Redeemable Preferred Stock (the “Series E Preferred Stock”) and our non-traded Series M Redeemable Preferred Stock (the “Series M Preferred Stock”). The registration statement became effective on February 21, 2020, and contemplates the issuance and sale of up to 20,000,000 shares of Series E Preferred Stock or Series M Preferred Stock in a primary offering and up to 8,000,000 shares of Series E Preferred Stock or Series M Preferred Stock pursuant to a dividend reinvestment plan. On February 25, 2020, we filed our prospectus with the SEC. Ashford Securities, a subsidiary of Ashford Inc., serves as the dealer manager and wholesaler of the Series E Preferred Stock and Series M Preferred Stock. On April 2, 2021, the Company filed with the State Department of Assessments and Taxation of the State of Maryland (the “SDAT”) articles supplementary to the Company’s Articles of Amendment and Restatement that provided for: (i) reclassifying the existing 28,000,000 shares of Series E Preferred Stock and 28,000,000 shares of Series M Preferred Stock as unissued shares of preferred stock; (ii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series E Preferred Stock (the “Series E Articles Supplementary”); and (iii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series M Preferred Stock (the “Series M Articles Supplementary”). The Series E Articles Supplementary and Series M Articles Supplementary were filed to revise the preferred stock terms related to the dividend rate, our optional redemption right and certain other voting rights. The Company also caused its operating partnership to execute Amendment No. 5 to the Third Amended and Restated Agreement of Limited Partnership to amend the terms of its operating partnership agreement to conform to the terms of the Series E Articles Supplementary and Series M Articles Supplementary. In total, the Company issued approximately 16.4 million shares of Series E Preferred Stock and received net proceeds of approximately $369.5 million and issued approximately 2.0 million shares of Series M Preferred Stock and received net proceeds of approximately $47.6 million. On February 21, 2023, the Company announced the closing of its offering of the Series E Preferred Stock and Series M Preferred Stock.

On May 3, 2024, our board of directors approved a new share repurchase program, pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share, having an aggregate value of up to $50 million. The Company may repurchase shares through open market transactions, privately negotiated transactions or other means. The timing and amount of any transactions will be subject to the discretion of the Company based upon market conditions, and the program may be suspended or terminated at any time by the Company at its discretion without prior notice. The board of directors’ authorization replaced any previous repurchase authorizations. As of March 9, 2026, the Company has not repurchased any common stock pursuant to the plan.

Debt Transactions

On January 14, 2025, the Company amended its mortgage loan secured by the 170-room Ritz-Carlton Lake Tahoe. The terms of the amendment included a $10.0 million principal pay down, extending the current maturity date to July 2025, an interest rate reduction to SOFR + 3.25%, and one six-month extension option subject to satisfaction of certain conditions. The mortgage loan had an initial maturity date in January 2025. The $43.4 million current mortgage loan amount represents an approximate 27% loan-to-value based on a third-party appraisal completed by the lender. The appraisal valued the hotel at $160 million based on its “as-is” value. On July 25, 2025, we amended the mortgage loan to extend the maturity date from July 2025 to July 2026.

On March 7, 2025, the Company refinanced its $293.2 million mortgage loan secured by The Clancy, The Notary Hotel, Marriott Seattle Waterfront, and Sofitel Chicago Magnificent Mile, which had an interest rate of SOFR + 2.66% and a final

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maturity date in June of 2025 and its $62.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which had an interest rate of SOFR + 4.75% and a final maturity date in March of 2026. The new $363.0 million mortgage loan bears interest at a floating interest rate of SOFR + 2.52% and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is secured by five hotels: The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, and The Ritz-Carlton Reserve Dorado Beach. The $363.0 million mortgage loan amount represents an approximate 49% loan-to-value based on third-party appraisals completed by the lender. The appraisals valued the hotels at $742 million based on the sum of their “as-is” values.

On April 4, 2025, the Company assumed a $5.4 million term loan secured by a parcel of land. The assumed term loan is interest only, bears interest at WSJ Prime Rate, and matures in March 2026. This term loan has a floor of 4.99%.

On August 7, 2025, we sold the Marriott Seattle Waterfront hotel pursuant to an Agreement of Purchase and Sale, entered into effective July 3, 2025, for $145 million in cash, subject to customary pro-rations and adjustments. Additionally, the Company repaid approximately $88.4 million on the mortgage loan that was partially secured by the hotel property.

On August 15, 2025, the Company refinanced its $140.0 million mortgage loan secured by the Four Seasons Scottsdale which had an interest rate of SOFR + 3.75% and a final maturity date in December 2028. The new non-recourse loan has a balance of $180.0 million and bears interest at a floating rate of SOFR + 3.00%. The new loan has a three-year initial term with two, one-year extension options, subject to the satisfaction of certain conditions.

On November 6, 2025, we sold The Clancy pursuant to an Agreement of Purchase and Sale, entered into effective October 6, 2025, for $115.0 million in cash, subject to customary pro-rations and adjustments. Additionally, the Company repaid approximately $64.7 million on the mortgage loan that was partially secured by the hotel property.

Sources and Uses of Cash

We had approximately $124.4 million and $135.5 million of cash and cash equivalents at December 31, 2025 and December 31, 2024, respectively. We anticipate that our principal sources of funds to meet our cash requirements will include cash on hand, positive cash flow from operations and capital market activities.

Net Cash Flows Provided by (Used in) Operating Activities. Net cash flows provided by operating activities were $40.8 million and $66.8 million for the year ended December 31, 2025 and 2024, respectively. Cash flows from operations were impacted by changes in hotel operations and the disposition of hotel properties. Cash flows from operations are also impacted by the timing of working capital cash flows, such as collecting receivables from hotel guests, paying vendors, settling with related parties and settling with hotel managers.

Net Cash Flows Provided by (Used in) Investing Activities. For the year ended December 31, 2025, net cash flows provided by investing activities were $209.6 million. The cash inflows were attributable to $247.6 million from the sales of Seattle Marriott Waterfront and The Clancy, $40.7 million of proceeds from the sale of investment in securities and $4.8 million from property insurance proceeds. These cash inflows were partially offset by cash outflows of $77.9 million of capital improvements made to various hotel properties and the acquisition of land of $5.5 million. Our capital improvements consisted of approximately $53.5 million of return on investment capital projects and approximately $24.4 million of renewal and replacement capital projects.

For the year ended December 31, 2024, net cash flows provided by investing activities were $35.5 million. The cash inflows were primarily attributable to $155.6 million from the sale of Hilton La Jolla Torrey Pines and $958,000 from property insurance proceeds, partially offset by cash outflows of $42.3 million from the purchase of securities, $70.6 million of capital improvements made to various hotel properties, $8.1 million from the issuance of a note receivable and a $79,000 loan to OpenKey. Our capital improvements consisted of approximately $49.6 million of return on investment capital projects and approximately $21.0 million of renewal and replacement capital projects.

Return on investment capital projects are designed to improve the positioning of our hotel properties within their markets and competitive sets. Renewal and replacement capital projects are designed to maintain the quality and competitiveness of our hotels.

Net Cash Flows Provided by (Used in) Financing Activities. For the year ended December 31, 2025, net cash flows used in financing activities were $268.6 million. Cash outflows primarily consisted of $518.3 million of repayments of indebtedness, $76.8 million for cash redemptions of Series E and Series M preferred stock, $47.3 million of dividend and distribution payments, $14.5 million for the acquisition of noncontrolling interest in consolidated entities, $11.9 million of payments of loan costs and exit fees, $2.3 million of distributions to noncontrolling interests in consolidated entities, $778,000 for repurchase of common stock, $670,000 to purchase interest rate caps and $121,000 from the redemption of operating partnership units. These

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cash outflows were partially offset by cash inflows of $403.0 million from borrowings on indebtedness, $714,000 of proceeds from in-the-money interest rate caps and a contribution of $306,000 from a noncontrolling interest holder in a consolidated entity.

For the year ended December 31, 2024, net cash flows used in financing activities were $83.8 million. Cash outflows primarily consisted of $184.1 million of repayments of indebtedness, $51.6 million of dividend and distribution payments, $1.6 million to purchase interest rate caps, $15.4 million of payments of loan costs and exit fees, $27.0 million distributions to noncontrolling interest in consolidated entities, and $45.6 million for cash redemptions of Series E and Series M preferred stock. These cash outflows were partially offset by cash inflows of $234.0 million from borrowings on indebtedness, $4.9 million of proceeds from in-the-money interest rate caps and $3.0 million of contributions from noncontrolling interest in consolidated entities.

Inflation

We rely entirely on the performance of our properties and the ability of the properties’ managers to increase revenues to keep pace with inflation. Hotel operators can generally increase room rates rather quickly, but competitive pressures may limit their ability to raise rates faster than inflation. Our general and administrative costs, real estate and personal property taxes, property and casualty insurance, and utilities are subject to inflation as well.

Critical Accounting Policies and Estimates

Our accounting policies are fully described in note 2 to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data.” We believe that the following discussion addresses our most critical accounting estimates, representing those policies considered most vital to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, complex judgments and can include significant estimates.

Impairment of Investments in Hotel Properties. Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of the hotel is measured by comparison of the carrying amount of the hotel to the estimated future undiscounted cash flows, which take into account current market conditions and our intent with respect to holding or disposing of the hotel. If our analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value, or fair value, less cost to sell. In evaluating the impairment of hotel properties, we make many assumptions and estimates, including projected cash flows, expected holding period and expected useful life. Fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions and third-party appraisals, where considered necessary. Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs. We recorded a $54.5 million impairment charge for the year ended December 31, 2025. There were no impairment charges recorded for the years ended December 31, 2024 and 2023.

Income Taxes. At December 31, 2025 and 2024, we had a valuation allowance of approximately $18.4 million and $16.5 million, respectively, to partially reserve our deferred tax assets of our TRSs. At each reporting date, we evaluate whether it is more likely than not that we will utilize all or a portion of our deferred tax assets. We consider all available positive and negative evidence, including historical results of operations, projected future taxable income, carryback potential and scheduled reversals of deferred tax liabilities. In evaluating the objective evidence that historical results provide, we consider three years of consolidated cumulative operating income (loss). At December 31, 2025, we had TRS net operating loss carry forwards for U.S. federal income tax purposes of $64.9 million, of which $43.4 million is subject to expiration and will begin to expire in 2025. The remainder was generated after December 31, 2017 and is not subject to expiration under the Tax Cuts and Jobs Act. The loss carry forwards subject to expiration may be available to offset future taxable income, if any, for 2026 through 2035, with the remainder available to offset taxable income beyond 2035; however, there could be substantial limitations on their use imposed by the Code. Management determined that it is more likely than not that $18.4 million of our net deferred tax assets will not be realized and a valuation allowance has been recorded accordingly. At December 31, 2025, Braemar Hotels & Resorts Inc., our REIT, had net operating loss carryforwards for U.S. federal income tax purposes of $109.7 million based on the latest filed tax return. Of this amount, $2.2 million is subject to expiration in 2033. The remainder is not subject to expiration under the Tax Cuts and Jobs Act.

The “Income Taxes” Topic of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) addresses the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The guidance requires us to determine whether tax positions we have taken or expect to take in a tax return are more likely than not to be sustained upon examination by the appropriate taxing authority based on the technical merits of the positions. Tax positions that do not meet the more likely than not threshold would be recorded as additional tax expense in the current period.

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We analyze all open tax years, as defined by the statute of limitations for each jurisdiction, which includes the federal jurisdiction and various states. We classify interest and penalties related to underpayment of income taxes as income tax expense. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and cities. Tax years 2021 through 2025 remain subject to potential examination by certain federal and state taxing authorities.

Recently Adopted Accounting Standards

In December 2023, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025. The amendments in this ASU may be applied prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or the amendments may be applied retrospectively by providing the revised disclosures for all periods presented. As of December 31, 2025, the Company has prospectively adopted this ASU. The adoption of this ASU only impacted disclosures with respect to the Company’s consolidated financial statements.

Recently Issued Accounting Standards

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses that requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the statement of operations.

In January 2025, the FASB issued ASU 2025-01 which amends the effective date of the new disaggregation of income statement expenses standard to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is still permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact this ASU will have on our disclosures.

Non-GAAP Financial Measures

The following non-GAAP presentations of EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO are presented to help our investors evaluate our operating performance.

EBITDA is defined as net income (loss) before interest expense and amortization of loan costs, depreciation and amortization, income taxes, equity in (earnings) loss of unconsolidated entity and after the Company’s portion of EBITDA of OpenKey. In addition, we exclude impairment on real estate, (gain) loss on disposition of assets and hotel properties and the Company’s portion of EBITDAre of OpenKey from EBITDA to calculate EBITDA for real estate, or EBITDAre, as defined by NAREIT.

We then further adjust EBITDAre to exclude certain additional items such as amortization of favorable (unfavorable) contract assets (liabilities), transaction and conversion costs, other income/expense, write-off of loan costs and exit fees, gain/loss on insurance settlements, legal, advisory and settlement costs, advisory services incentive fee, gain/loss on extinguishment of debt, stock/unit-based compensation and the Company’s portion of adjustments to EBITDAre of OpenKey and non-cash items such as unrealized gain/ loss on derivatives.

We present EBITDA, EBITDAre and Adjusted EBITDAre because we believe they are useful to an investor in evaluating our operating performance because they provide investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe they help investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results. Our management team also uses EBITDA as one measure in determining the value of acquisitions and dispositions. EBITDA, EBITDAre and Adjusted EBITDAre as calculated by us may not be comparable to EBITDA, EBITDAre and Adjusted EBITDAre reported by other companies that do not define EBITDA, EBITDAre and Adjusted EBITDAre exactly as we define the terms. EBITDA, EBITDAre and Adjusted EBITDAre do not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as determined by GAAP as an indicator of liquidity.

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The following table reconciles net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAre (in thousands) (unaudited):

__________________

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

(2) Includes amounts related to expense reductions from an insurance recovery for prior legal expenses of $5.4 million for the year ended December 31, 2025.

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The following table reconciles net income (loss) to EBITDA attributable to the Company and OP unitholders on a property-by-property basis for each of our hotel properties owned and on a corporate basis during the year ended December 31, 2025. The results of the Marriott Seattle Waterfront and The Clancy are excluded from their respective disposition dates through December 31, 2025 (in thousands) (unaudited):

__________________

(1)Represents expenses not recorded at the individual hotel property level.

(2)Includes allocated amounts which were not specific to hotel properties, such as gain/loss on sale of hotel properties, impairment charges, corporate taxes, insurance and legal expenses.

(3)Referred to as hotel adjusted EBITDA in note 23 to the Company’s consolidated financial statements.

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The following table reconciles net income (loss) to EBITDA attributable to the Company and OP unitholders on a property-by-property basis for each of our hotel properties owned and on a corporate basis during the year ended December 31, 2024. The results of the Hilton La Jolla Torrey Pines are excluded from its disposition date through December 31, 2024 (in thousands) (unaudited):

_____________

(1)Represents expenses not recorded at the individual hotel property level.

(2)Includes allocated amounts which were not specific to hotel properties, such as gain/loss on sale of hotel properties, impairment charges, corporate taxes, insurance and legal expenses.

(3)Referred to as hotel adjusted EBITDA in note 23 to the Company’s consolidated financial statements.

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The following table reconciles net income (loss) to EBITDA attributable to the Company and OP unitholders on a property-by-property basis for each of our hotel properties owned and on a corporate basis during the year ended December 31, 2023 (in thousands) (unaudited):

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(1)Represents expenses not recorded at the individual hotel property level.

(2)Includes allocated amounts which were not specific to hotel properties, such as gain/loss on sale of hotel properties, impairment charges, corporate taxes, insurance and legal expenses.

(3)Referred to as hotel adjusted EBITDA in note 23 to the Company’s consolidated financial statements.

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

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The following table reconciles net income (loss) to FFO and Adjusted FFO (in thousands) (unaudited):

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

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

(3) Includes amounts related to expense reductions from an insurance recovery for prior legal expenses of $5.4 million for the year ended December 31, 2025.

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