Company: DRH-PA
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001298946-25-000049
Chunk: 101

Company: DiamondRock Hospitality Co
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 2
Chunk 101
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518 Hotel pre-opening costs23 234 Share-based compensation expense (2)665 2,635 Adjusted FFO available to common stock and unit holders$39,516 $38,604 

(1)Effective January 1, 2025, we exclude share-based compensation expense from our calculation of Adjusted FFO. Amounts reported for 2024 have been adjusted to reflect the current year presentation.

(2)Amount includes $0.7 million of non-cash realized gains related to our deferred compensation plan for the three months ended March 31, 2025.

Critical Accounting Estimates and Policies

Our unaudited consolidated financial statements include the accounts of DiamondRock Hospitality Company and all consolidated subsidiaries. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe the reported amounts would be materially different, application of these policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ materially from these estimates. We evaluate our estimates and judgments, including those related to the impairment of long-lived assets, on an ongoing basis. We base our estimates on experience and on various assumptions that are believed to be reasonable under the circumstances. All of our significant accounting policies, including certain critical accounting policies, are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes to our critical accounting policies since the year ended December 31, 2024.  

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Inflation

Operators of hotels, in general, possess the ability to adjust room rates daily to reflect the effects of inflation.  Generally, our management companies may adjust room rates daily, excluding previous contractually committed reservations. However, competitive pressures or other factors may limit the ability of our management companies to raise room rates. Inflation may also affect our expenses and cost of capital improvements, including, without limitation, by increasing the costs of labor, employee-related benefits, food, commodities and other materials, taxes, property and casualty insurance and utilities.

During the first quarter of 2025, inflation remained above the Federal Reserve’s long-term target, though it has moderated from the peak levels observed in recent years. The Federal Reserve maintained its benchmark interest rate during the quarter, signaling a cautious approach to future