Company: DRH-PA
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001298946-25-000015
Chunk: 129

Company: DiamondRock Hospitality Co
Filing Date: 2025-02-28
Form: 10-K
Item: Item 16
Chunk 129
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 unsecured term loansSwap3.25 %SOFRJanuary 2, 2025January 1, 2026$75,000 628 — $4,674 $4,321 (1)Swap was designated as cash flow hedge as of April 1, 2023.Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During 2024, such derivatives were used to hedge the variable cash flows associated with variable-rate debt.  The table below details the location in the consolidated financial statements of the gains and losses recognized on derivative financial statements (in thousands):

F-20

Year Ended December 31,Effect of derivative instrumentsLocation in Statements of Operations and Comprehensive Income202420232022Gain (loss) recognized in other comprehensive incomeUnrealized gain (loss) on interest rate derivative instruments$353 $(2,634)$— Interest income for derivatives that were designated as cash flow hedgesInterest expense$6,629 $7,688 $— Interest income (expense) for derivatives that were not designated as cash flow hedgesInterest expense$— $(469)$13,486 During the next twelve months, the Company estimates that $2.5 million will be reclassified from other comprehensive income as a reduction to interest expense.

7.  Fair Value Measurements

The fair value of certain financial assets and liabilities and other financial instruments are as follows (in thousands):December 31, 2024December 31, 2023Carrying   Amount (1)Fair ValueCarrying   Amount (1)Fair ValueDebt$1,095,294 $1,092,443 $1,177,005 $1,167,638 _______________(1)The carrying amount of debt is net of unamortized debt issuance costs.The fair value of our interest rate swaps are Level 2 measurements under the fair value hierarchy. We estimate the fair value of the interest rate swap based on the interest rate yield curve and implied market volatility as inputs and adjusted for the counterparty's credit risk.  We concluded the inputs for the credit risk valuation adjustment are Level 3 inputs; however these inputs are not significant to the fair value measurement in its entirety. The fair values of our other financial instruments not included in the table above are estimated to be