Braemar Hotels & Resorts Inc. - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - March 23, 2018

Attached files

file filename
EX-99.1 - EXHIBIT 99.1 - Braemar Hotels & Resorts Inc.hotelyountvillefs-3x31x17x.htm
8-K - 8-K - Braemar Hotels & Resorts Inc.ahphotelyountville8-k3x21x.htm
EXHIBIT 99.2

On May 11, 2017, Ashford Hospitality Prime, Inc. ("Ashford Prime" or the "Company") completed the acquisition of the Hotel Yountville. The fair value of the hotel property acquired at the time of the acquisition was approximately $96.5 million. On March 31, 2017, Ashford Prime completed the acquisition of the Park Hyatt Beaver Creek in Beaver Creek, Colorado. The fair value of the hotel property acquired at the time of the acquisition was approximately $145.5 million. The following unaudited pro forma financial information of the Company has been prepared for informational purposes only and does not purport to be indicative of what would have resulted had the acquisitions and related transactions occurred on the date indicated or what may result in the future.


1



ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2017
(in thousands, except share and per share amounts)
 
Ashford Prime
Consolidated
Historical (A)
 
Park Hyatt Beaver Creek Historical January 1, 2017 through March 30, 2017
 
Adjustments
 
Hotel Yountville Historical January 1, 2017 through May 10, 2017
 
Adjustments
 
 
 
Ashford Prime
Consolidated
Pro Forma
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
Rooms
$
286,006

 
$
10,035

 
$
—

 
$
3,472

 
$
—

 
 
 
$
299,513

Food and beverage
96,415

 
5,121

 
—

 
559

 
—

 
 
 
102,095

Other
31,484

 
3,655

 
—

 
244

 
—

 
 
 
35,383

Total hotel revenue
413,905

 
18,811

 
—

 
4,275

 
—

 
 
 
436,991

Other
158

 
—

 
—

 
—

 
—

 
 
 
158

Total revenue
414,063

 
18,811

 
—

 
4,275

 
—

 
 
 
437,149

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Hotel operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Rooms
65,731

 
1,363

 
—

 
860

 
—

 
 
 
67,954

Food and beverage
68,469

 
3,268

 
—

 
645

 
—

 
 
 
72,382

Other expenses
122,322

 
6,346

 
—

 
1,189

 
—

 
 
 
129,857

Management fees
15,074

 
531

 
—

 
—

 
128

 
(E) (i)
 
15,733

Total hotel operating expenses
271,596

 
11,508

 
—

 
2,694

 
128

 
 
 
285,926

Property taxes, insurance and other
21,337

 
335

 
—

 
220

 
—

 
 
 
21,892

Depreciation and amortization
52,262

 
—

 
773

(C) (i)
—

 
798

 
(E) (ii)
 
53,833

Impairment charges
1,068

 
—

 
—

 
—

 
—

 
 
 
1,068

Advisory services fee
9,134

 
—

 
—

 
—

 
—

 
 
 
9,134

Contract modification cost
5,000

 
—

 
—

 
—

 
—

 
 
 
5,000

Transaction costs
6,678

 
—

 
(4,688
)
(C) (ii)
—

 
(586
)
 
(E) (iii)
 
1,404

Corporate general and administrative
8,146

 
—

 
—

 
—

 
—

 
 
 
8,146

Total operating expenses
375,221

 
11,843

 
(3,915
)
 
2,914

 
340

 
 
 
386,403

Operating income (loss)
38,842

 
6,968

 
3,915

 
1,361

 
(340
)
 
 
 
50,746

Interest income
690

 
—

 
—

 
—

 
—

 
 
 
690

Gain (loss) on sale of hotel property
23,797

 
—

 
—

 
—

 
—

 
 
 
23,797

Other income (expense)
(377
)
 
—

 
—

 
—

 
—

 
 
 
(377
)
Interest expense and amortization of premiums and loan costs
(38,937
)
 
—

 
(730
)
(C) (iii)
—

 
(696
)
 
(E) (iv)
 
(40,363
)
Write-off of loan costs and exit fees
(3,874
)
 
—

 
—

 
—

 
—

 
 
 
(3,874
)
Unrealized gain (loss) on investment in Ashford Inc.
9,717

 
—

 
—

 
—

 
—

 
 
 
9,717

Unrealized gain (loss) on derivatives
(2,056
)
 
—

 
—

 
—

 
—

 
 
 
(2,056
)
Income (loss) before income taxes
27,802

 
6,968

 
3,185

 
1,361

 
(1,036
)
 
 
 
38,280

Income tax (expense) benefit
522

 
—

 
(206
)
(C) (iv)
—

 
(61
)
 
(E) (v)
 
255

Net income (loss)
28,324

 
6,968

 
2,979

 
1,361

 
(1,097
)
 
 
 
38,535

(Income) loss from consolidated entities attributable to noncontrolling interests
(3,264
)
 
—

 
—

 
—

 
—

 
 
 
(3,264
)
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership
(2,038
)
 
—

 
(1,272
)
(C) (v)
—

 
(34
)
 
(E) (vi)
 
(3,344
)
Net income (loss) attributable to the Company
23,022

 
6,968

 
1,707

 
1,361

 
(1,131
)
 
 
 
31,927

Preferred dividends
(6,795
)
 
—

 
—

 
—

 
—

 
 
 
(6,795
)
Net income (loss) available to common stockholders
$
16,227

 
$
6,968

 
$
1,707

 
$
1,361

 
$
(1,131
)
 
 
 
$
25,132

Income (loss) per share – basic:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
$
0.52

 
 
 
 
 
 
 
 
 
 
 
$
0.81

Weighted average common shares outstanding—basic
30,473

 
 
 
 
 
 
 
 
 
 
 
30,473

Income (loss) per share – diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
$
0.51

 
 
 
 
 
 
 
 
 
 
 
$
0.81

Weighted average common shares outstanding—diluted
34,706

 
 
 
 
 
 
 
 
 
 
 
34,706

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.64

 
 
 
 
 
 
 
 
 
 
 
$
0.64


See accompanying notes.


2



NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(A)
Represents the historical consolidated statement of operations of Ashford Prime for the year ended December 31, 2017, as reported in its Annual Report on Form 10-K for the year ended December 31, 2017, filed on March 9, 2018.
(B)
Represents the historical consolidated statement of operations of the Park Hyatt Beaver Creek for the period from January 1, 2017 through March 30, 2017.
(C)
Represents adjustments for Ashford Prime’s purchase of the Park Hyatt Beaver Creek for the period from January 1, 2017 through March 30, 2017, which include; (i) adjustment to depreciation expense based on Ashford Prime's new cost basis in the acquired hotel. The estimated useful lives are 7.5 to 39 years for building and improvements and 1.5 to 5 years for furniture, fixtures and equipment; (ii) elimination of nonrecurring transaction costs incurred by the Company associated with the acquisition of the hotel; (iii) an adjustment to reflect the interest expense associated with the financing of a mortgage loan related to the acquisition of the Park Hyatt Beaver Creek(iv) adjustment to income tax expense to reflect total income tax expense as if the consolidated group filed with the Park Hyatt Beaver Creek; (v) adjustment to net income attributable to redeemable noncontrolling interests in operating partnership for the incremental operating results of the Park Hyatt Beaver Creek.
(D)
Represents the historical consolidated statement of operations of Hotel Yountville for the the period from January 1, 2017 through May 10, 2017.
(E)
Represents adjustments for Ashford Prime’s purchase of the Hotel Yountville for the period from January 1, 2017 through May 10, 2017, which include; (i) a contractual adjustment to management fees for the management fee Ashford Prime is contracted to pay; (ii) additional depreciation expense based on Ashford Prime's new cost basis in the acquired hotel. The estimated useful lives are 44.6 to 54 years for building and improvements and 5 to 6.5 years for furniture, fixtures and equipment; (iii) elimination of nonrecurring transaction costs incurred by the Company associated with the acquisition of the hotel; (iv) an adjustment to reflect the interest expense associated with the financing of a mortgage loan related to the acquisition of the Hotel Yountville; (v) additional income tax expense to reflect total income tax expense as if the consolidated group filed with the Hotel Yountville; and (vi) adjustment to net income attributable to redeemable noncontrolling interests in operating partnership for the incremental operating results of the Hotel Yountville.

3

Braemar Hotels & Resorts Inc. Reports