Good morning. And welcome to today's call to review results for Braemar Hotels & Resorts for the second quarter of 2020, and to update you on recent developments. On the call today will be Richard Stockton, President and Chief Executive Officer; Deric Eubanks, Chief Financial Officer; and Jeremy Welter, Chief Operating Officer. 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 on Form 8-K with SEC on July 30, 2020, and may also be accessed through the company's website at www.bhrreit.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. I will now turn the call over to Richard Stockton. Please go ahead, Richard.

Good morning. Welcome to our second quarter 2020 earnings conference call. I will begin by providing an overview of our business and an update on our portfolio, including the reopening of almost all of our hotels. After that Deric will provide a review of our financial results. And then Jeremy will provide an update on our asset management activity. Afterward, we will open the call for Q&A. The COVID-19 global pandemic has created both social and economic disruption on an unprecedented level, creating a volatile landscape throughout the hospitality industry. As I have said previously, this has been an extraordinary period for all of us and our entire leadership team has been steadfast in our commitment to protect all of our stakeholders during this unprecedented time. A few objectives have continued to guide us, the health and well-being of the employees, our hotels, our hotel guests, and the communities in which we operate have been a top priority. We have taken a number of preventative measures to keep them safe. As stay-at-home orders were implemented, we quickly adapted to the restrictions and challenges affecting our properties and adjusted the staffing model at our hotels, while reducing other operating expenses in an effort to preserve cash and minimize near-term losses. The vast majority of our portfolio had suspended operations for a significant portion of the second quarter. As we discussed on our last call, we believe that our portfolio was well-positioned to benefit as our hotels resumed operations, given that eight of our 13 hotels generated a significant amount of leisure demand. These include the Ritz Carlton Sarasota, Bardessono, Hotel in Yountville, Ritz-Carlton Lake Tahoe, Pier House Resort, Park Hyatt Beaver Creek, Hilton La Jolla Torrey Pines and Ritz-Carlton St. Thomas. We are pleased to report that this thesis has played out just as we expected. We're seeing good results across our reopened hotels and it's clear from the feedback we're hearing that guests are excited to be traveling again. It's still early in the reopening process and the impact of the virus is still unpredictable, but we are encouraged so far. As for operating results, the Ritz Carlton Sarasota, Pier House Resort and Bardessono all had positive hotel EBITDA for the month of June. The Ritz Carlton Sarasota, despite RevPAR being down over 60% during the quarter, had positive hotel EBITDA for the entire second quarter. This was a fantastic result given the disruption to our business during this quarter, as a testament not only to the team at the hotel, but also to the fact that a significant amount of the revenue at that property is recurring membership revenue, which is less volatile and more predictable than rooms and F&B revenue. In fact, the property was also able to increase its EBITDA margin by 74 basis points during the second quarter, a truly impressive result. With nearly all of our hotels reopened to the public, we continue to prioritize the health and safety of our guests and staff. And we're being thoughtful, deliberate and flexible as our hotels resume operations. To ensure guest safety, our properties have instituted stringent safety measures and protocols consistent with evolving best practice recommendations regarding COVID-19, ranging from enhanced hygiene standards to keyless check-in and electrostatic sprayers to protect guests. Additionally, in the near term, we have specific plans to contain expenses as the portfolio continues the reopening process. We're offering optional housekeeping service at some properties for stayovers. We're also eliminating van transportation, airport shuttle service, valet parking services, turndown service, and all amenities that exceed brand standards. We're also suspending some services at concierge lounges and clubs, and all spas and kids' clubs. Our asset management efforts have been relentless and have positioned us well for the impending ramp-up in operations that we now anticipate. Looking ahead a few months, we continue to be excited about the Courtyard San Francisco Downtown and its upcoming conversion to the Autograph Collection under the name of The Clancy. The renovation continued during the second quarter with a portion of the lobby, meeting space, new café, market facade, a new front entrance. We're currently working on the restaurant and bar and expect to have the renovation completed in September. Given the current uncertainties, we've also taken proactive and aggressive actions to protect and enhance our corporate liquidity. This included cutting expenses at the corporate level and significantly reducing our planned CapEx spend for the year. We will continue to preserve cash until we have clarity on the recovery and direction of the economy. All in, we estimate that we have reduced our run rate corporate G&A and reimbursable expenses under our advisory agreement by approximately 25%. We also closed on an amendment to our corporate credit facility, with a pay down of $10 million. The amendment converted a $75 million corporate credit facility into a $65 million term loan with the same maturity date of October 25, 2022. We've also made significant progress in our discussions with our property level lenders. Deric will discuss this in more detail. We successfully navigated through a very challenging operating environment during the quarter and I believe we are set up very well for the ultimate recovery. As I turn the call over to Deric to discuss our financial results, please keep in mind that almost all of our properties were closed during the second quarter. So while this quarter's financial metrics are interesting from a voyeuristic perspective, they provide little useful direction to inform investors on the state or potential of the business. I will now turn the call over to Deric.

Thanks, Richard. During the second quarter, we recognized $390,000 of BI income for the Ritz-Carlton St. Thomas, which is reflected in the other hotel revenue line of our income statement. These insurance recoveries related to the month of March through May 2020. As I mentioned last quarter, we expect these insurance recoveries will taper off going forward. For the second quarter of 2020, we reported a net loss attributable to common stockholders of $46.3 million, or $1.41 per diluted share. For the quarter, we reported AFFO per diluted share of negative $0.58. Adjusted EBITDAre for the quarter was negative $18.5 million. At quarter end, we had total assets of $1.7 billion. We had $1.1 billion of mortgage loans, of which $49 million related to our joint venture partner's share of the loan on the Capitol Hilton and Hilton La Jolla Torrey Pines. Our total combined loans had a blended average interest rate of 2.6%. Our loans are entirely floating rate and the vast majority of interest rate caps are in place. As of the end of the second quarter, we had approximately 53% net debt to gross assets. We ended the quarter with cash and cash equivalents of $103 million and restricted cash of $41 million. The vast majority of that restricted cash is comprised of lender and manager-held reserve accounts. At the end of the quarter, we also had $9 million in due from third-party hotel managers, which represents cash held by one of our property managers that is also available to fund hotel operating costs. As Richard mentioned, we have been and continue to work with our property managers and lenders in order to utilize these lender and manager health reserves to fund operating shortfalls at our hotels. To date, we have signed forbearance agreements on five loans, including the mortgage loans on the Hotel Yountville, Bardessono Hotel, Ritz-Carlton Lake Tahoe, Ritz Carlton Sarasota, and Pier House Resort. The agreements typically allow the company to defer interest on the loans for a period of up to six months, subject to certain conditions. The forbearance agreements also allow us to utilize lender and manager held reserve accounts, which are included in restricted cash on our balance sheet in order to fund operating shortfalls at the hotels. We have signed an FF&E use agreement on the four hotel portfolio loan that includes the Sofitel Chicago, Marriott Seattle Waterfront, the Notary Hotel, and the Courtyard San Francisco Downtown. This agreement allows us to use the lender and manager health reserve accounts to fund operating shortfalls. This agreement also provides for the exercise of the first of its five one-year extensions. We expect to have a forbearance agreement completed very soon on the loan secured by our Capitol Hilton and Hilton La Jolla Torrey Pines, and we anticipate keeping all of our loans current in accordance with the forbearance and other agreements we have in place. In response to this pandemic, we have taken decisive measures to reduce our cash utilization. We have reduced corporate G&A and reimbursable expenses under our advisory agreement by approximately 25% on an annual basis. To further preserve our liquidity, our board of directors decided to suspend our common stock dividend, which will save approximately $6 million on a quarterly basis. We estimate that our current monthly cash utilization at our hotels, given their current state of operations, is approximately $5 million per month. As I mentioned, all of our debt is property level, non-recourse debt except for our corporate term loan, and the monthly interest is currently approximately $2.5 million per month. Our run rate for corporate G&A and advisory fees is approximately $1.3 million per month. Based on the anticipated reopening dates for the remainder of our portfolio, and realistic yet conservative assumptions for future hotel operations, we believe that we have sufficient liquidity. As of June 30, 2020, our portfolio consisted of 13 hotels with 3,487 net rooms. Our share count currently stands at 38 million fully diluted shares outstanding, which is comprised of 33.5 million shares of common stock and 4.5 million OP units. In our financial results, we also include approximately 6.7 million shares in our fully diluted share count associated with our Series B convertible preferred stock. This concludes our financial review. I'd now like to turn it over to Jeremy to discuss our asset management activities for the quarter.

Thank you, Deric. Comparable RevPAR for our portfolio decreased 91.8% during the second quarter. Business in April was driven by COVID-19 responders and healthcare workers, with transient leisure travel, especially on weekends, returning later in the quarter. There was very little corporate business travel, generally, RevPAR bottomed out by mid-April and experienced steady week-over-week growth over the next few months. When it became apparent that the COVID-19 pandemic was going to severely impact our hotel's performance, we took swift action to put ourselves in a position to weather this crisis. During the second quarter, we significantly reduced operating expenses by 71.8% or $52.1 million relative to the second quarter of 2019. These cuts resulted in hotel inflow through a 49%, which is a remarkable accomplishment by our asset managers and our property managers working together. We responded quickly and aggressively to reduce costs in response to the unprecedented decline in hotel revenues. We also temporarily suspended services at 11 hotels. None of those hotels have reopened for a total of 11 hotels operating for some period of time during the second quarter. We suspended services at these hotels in order to minimize costs, where there was little business in the market. These are unprecedented times, and asset management, property management, and brands are all working together. We want to bring back as many associates as soon as we can, once performance justifies bringing them back. Our associates have been stretched to their limits, working through a challenging situation. Folks have risen to the occasion. We're proud as a management team to see how everyone has contributed. We've been asked to do more for less. We're also seeing our property managers emphasize and focus on newly implemented cleanliness and safety standards. Many of our hotels are in drive-to-leisure markets, which we believe will continue to experience a quicker recovery. Since early May, our focus has shifted to ensure we have strategies in place to accommodate pent-up leisure demand. Specifically, I would like to comment on our 4th of July results. With 11 of our 13 hotels open and operating for the week leading up to and including 4th of July weekend, we saw strong performance. These hotels achieved a rate of $337 with an occupancy of 41% for the week ending July 4. In most of our markets and sub-markets, we're estimating negligible new supply growth over the next couple of years as well. I also want to highlight the performance of six of our drive-to-leisure hotels. The Ritz Carlton Sarasota has remained open throughout the pandemic and experienced a steady ramp starting in May when Florida beaches began reopening. The hotel's Beach Club revenue increased relative to last year with strong membership, club usage and performance, coupled with strong new membership sales. Comparable RevPAR during the second quarter decreased 62.3%. Impressively, hotel even flow through was 82% and the EBITDA margin actually increased 4%. Four of California markets that are considered drive-to-leisure hotels began to perform well once California allowed hotels to reopen for leisure travel on June 12. The Hilton La Jolla Torrey Pines reopened on May 29, following its suspension of operations on April 23. The hotel ramped even quicker than expected. At Bardessono Hotel and Hotel Yountville, higher weekend demand in June led to some near sellouts. Both hotels suspended operations on March 22 and reopened June 8, due to Napa County allowing hotels to re-open June 5. The Ritz-Carlton Lake Tahoe reopened June 19 following the suspension of services on March 21. Upon reopening, business was significantly stronger than originally expected, benefiting from a particularly strong drive-to market. Comparable RevPAR for the Ritz-Carlton Lake Tahoe for the second quarter decreased 86.9%. However, the rate increased $40 or 11.2%, and hotel EBITDA flow-through was 94%. Returning to Florida, the island of Key West allowed hotels to reopen on June 1 with an occupancy cap of 50%. 100% of inventory is now available for sale. Since reopening on June 1, the Pier House Resort averaged 54% occupancy in June, despite the occupancy cap for the first two weeks of the month. Occupancy averaged 78% for the second half of June. The guest room and suite renovation was completed in May. As we continue to look to our drive-to-leisure hotels to outperform in the near term, we remain excited about the future prospects of our portfolio. Construction on the Courtyard San Francisco Downtown's upcoming conversion to The Clancy and Marriott Autograph Collection resumed in May. Construction was stopped in March due to the city of San Francisco's coronavirus-related measures. Temporary walls have been removed. Work on the restaurant and bar remains to be completed, while work on the exterior continues. Construction is scheduled to be completed in September. I will now turn to capital investment. Last year we invested heavily in our portfolio to enhance our competitive position. These investments include the conversion of the Courtyard Philadelphia Downtown to the Notary America Autograph Collection, the completion of the three-suite presidential villa at the Barcelona hotel and value-add projects during the rebuild of the Ritz Carlton St. Thomas. These initiatives have allowed us to be more judicious with our spending on capital expenditures during the COVID-19 pandemic. We've completed the guest room renovations to Pier House Resort in Key West, and we anticipate the completion of the Courtyard San Francisco Downtown's conversion to The Clancy and Marriott Autograph Collection. Until we expect to spend approximately $15 million to $25 million on capital expenditures in 2020. Before we go to Q&A, I would like to thank our Brand Partners, Marriott and Hilton, and Hyatt for the remarkable efforts on our behalf and their continued partnership with us during these unprecedented times. Now I'll turn the call back over to Richard for final remarks.

Thank you, Jeremy. In summary, our focus during the quarter was on quickly adapting to the unprecedented disruptions and uncertainty caused by the COVID-19 pandemic and wide-ranging public health efforts to control it. We have taken decisive actions to navigate the near-term challenges of this crisis. And while we cannot predict the trajectory of the pandemic, we are encouraged as we look ahead. I'm proud of our efforts to protect our assets and maintain financial flexibility to position us for future success. We look forward to updating you on our progress as we move through the balance of this year. This concludes our prepared remarks and we will now open the call for Q&A.

Thank you. Our first question today is from Bryan Maher, B. Riley FBR. Your line is now live.

Good morning, everyone. A couple of questions. And I apologize if I missed it. I'm guessing that the Courtyard San Francisco is going to open when the construction is completed in September. Is that correct?

That's correct.

And then the Capitol Hilton, what were the thoughts there on getting that reopened?

We're going to try to have that open by the end of August.

And then, and maybe this is a question for Deric. You know, you ran through the numbers, I guess, on the monthly burn rate that were pretty helpful. But to just kind of clarify, it's roughly $5 million for the hotels, $2.5 million on interest expense. Was that all interest expense or was that just, you know, one component of it?

Yeah, no, that includes all interest expense. Even though we do have some forbearance agreements in place where you're not currently paying interest, but it is assumed that we were paying the full load.

And what happens? When is the interest that's being forborne paid back at the end of the loan, at some point over the next year or two? How is that handled?

Yeah, it really differs by agreement. But on the five that I mentioned that we have signed, that would be paid at the final maturity.

Okay. And then the last component was, I think you said $1.3 million to G&A-ish type expenses. So that gets about an $8.8 million a month burn rate, would that be roughly accurate?

Yes, that's right. And let me just clarify on the G&A, that includes both our corporate G&A and the reimbursable expenses under our advisory agreement. You really have to kind of look at those together.

Okay, great. That's helpful. And then can you talk briefly about – you talked about 25% SG&A cost savings. How sustainable is that? I mean, as you look out 6, 12, 18 months from now, you know, clearly there's some things you're probably putting in place that might carry over. You know, how should we think about that? You know, down the road a little bit?

Yeah, I think that's a sustainable run rate. I think if you look at our second quarter numbers, it won't fully reflect those cuts. There were some things in the second quarter that just from a seasonal standpoint, we won't have going forward. But when you look at it, our ongoing annual run rate, excluding one-time items that we add back, and when you combine G&A with the reimbursable expenses, we feel very comfortable with that run rate going forward.

Great. And then just last from me, on the Ritz Carlton, St. John, can you give us an update on what's going on there as it relates to customers actually getting to that property from an airlift standpoint?

Yeah, I'll take this and then Rich will jump in. Yeah, so the Ritz Carlton St. Thomas, you know, it's phenomenal. After, you know, we basically rebuilt the hotel. And it's just, it's fantastic. And there's just a lot of, you know, pent-up demand for folks to get out and travel. You know, there is a requirement coming from states it has a threshold of 10% positivity rate, that you actually have to receive a negative COVID test before you travel to the US Virgin Islands. But that hasn't really hurt demand so much, because what we're seeing is, is that a lot of folks that otherwise would want to go to a Ritz Carlton, you know, in locations that are, you know, other islands, other countries in the Caribbean, or were in, you know, places like Bali or wherever, they want to get out, and any including why as well, they want to get out and travel. And so what we're getting is, is we're getting a lot of first-time guests to our hotel, which I think is a great opportunity for us because a lot of folks never really considered the US Virgin Islands are staying in the US Virgin Islands. And so, you know, our goal is to recapture that business going forward as well. So, it's just a change in, it makes a demand what we're getting. But given that, you know, the fact that it's not a drive-to market, we're seeing some pretty good numbers coming out of that hotel, much more so than we would have ever anticipated. If you asked us, you know, four weeks ago, six weeks ago or eight weeks ago, it's just been very positive. Rich, you want to…

Yeah, I know. I'm going to be a little bit more specific with the numbers. I think it's worth saying, to give you a sense of how surprised we are, we're running over 70% occupancy at the hotel at a rate that is exceeding our premium levels. So one of the things that the government of St. Thomas is doing is requiring testing for people entering the country. And we were concerned that that would dissuade people from traveling. I think it's as much of a factor in that people know if they go to St. Thomas, they're relatively safe from contracting the virus. So it's just going great. It's been a fantastic investment. We're very happy with it.

Right, thanks. That's all for me.

Thank you. Our next question today is coming from Tyler Batory from Janney Capital Markets. Your line is now live.

Thank you. Good morning. A couple of questions from me. And the first one just to follow up on Brian's question about the cash burn. And I just want to be very clear on this. I think last quarter, you were talking about $14 million of cash burn per month, now you are at $5 million. So can you please elaborate on the delta between those two numbers?

Yeah, I can. Yeah, just I think it's apples and oranges. The $14.3 was the all-in number, and $5 million is just the hotel level burn. So you want to compare the $14.3 to the $8.8, the $8.8 is the total number, including G&A. And as Deric mentioned, that includes an interest expense that is kind of the accounting interest expense, but some of that has been deferred, due to forbearance agreements, I'd say about half of it is deferred.

Yeah, and the other factor there, Tyler, is, you know, last quarter, we had the vast majority of our portfolio closed. And so if you just look at the operating shortfall at the property level, obviously now open and the vast majority of the portfolio is open and operating and generating revenues. That's what's brought the number down.

Okay, perfectly. That’s clear. Appreciate that. And, you know, look, I know you guys can't give guidance here, but there are a lot of investors now trying to sort through what's going on in July here. So any comments you can make on industry trends in July and then also wondering if you can discuss the luxury sector specifically, its performance thus far and any thoughts on you know, what that sector of the industry may look like? And, you know, in the next couple of months here?

Sure, and you know, one thing that we've seen, Tyler, is that in the recovery and the ramp up, it's not necessarily ramping up differently according to change scale segment, but whether or not you're urban or your resort. And there's a lot of enthusiasm about, you know, drive to leisure demand, but as we've seen with the Ritz Carlton St. Thomas, you know, fly to leisure demand is equally strong. So it's really those - that's the tale of two cities, is it resort or urban, and the resort properties are - we're opening many of them in June, and now they've been fully open for July. I'll give you a little insight. We're averaging at least 50% occupancy at those properties with an ADR that is approximately flat to 2019. But if you look at the urban properties, they're not performing very well at all. In fact, we have two of them that are closed, right? So the ones that are open, you know, we're doing something like, you know, 10% occupancy at a rate that's down by 25%. Luckily for us, our portfolio is majority resorts. And so we have eight properties out of 13 at resort, and we're really benefiting from that, and I think will continue to benefit from that as we go into the fourth quarter. The forward bookings look relatively healthy. And really, because they're being propped up by the continued resort demand and advance bookings. So, you know, as far as corporate transience is concerned in group business, I think we're really waiting on further medical advancements to give people confidence to make that sort of travel a big contributor. And my concern is that probably will continue to be weak in the fourth quarter, but hopefully by the first quarter of next year, assuming there is a vaccine, you know, that will begin to recover as well. And I think when it does recover, it will recover pretty quickly.

Yeah. And one of the things I want to add is that, when you look at some of our resort locations like Bardessono or Yountville or Pier House, you know, they're pretty efficient boxes. I mean, there's just not a lot of overhead or labor, and they generate pretty attractive ADRs. And so they can cash flow possibly at a much lower occupancy level than a lot of other traditional resorts that you would think through. So we've got that going for us. And then as well as there's one anomaly that I want to point out in an urban location is that, you know, we've actually had some demand for staycationers. Folks that are now from the suburbs, from other parts of, you know, Illinois or northern Wisconsin that are coming in and staying in Chicago for the week or weekend. And so that's been a little bit of a positive sign that we've seen as well.

Okay, I'll leave it there. Thank you.

Thank you. We reached the end of our question-and-answer session. I would like to turn the floor back over to management for any further or closing comments.

Well, thank you everybody for joining the call for our second quarter earnings. And we look forward to speaking with you again on our next call.

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.