Company: DRH-PA
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001298946-25-000085
Chunk: 123

Company: DiamondRock Hospitality Co
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 2
Chunk 123
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31-

In addition, to derive Adjusted FFO, we exclude any unrealized fair value adjustments to interest rate swaps and the portion of our non-cash ground lease expense recognized as interest expense.  We exclude these non-cash amounts because they do not reflect the underlying performance of the Company.

Hotel Adjusted EBITDA

We believe that Hotel Adjusted EBITDA provides our investors a useful financial measure to evaluate our hotel operating performance, excluding the impact of our capital structure (primarily interest), our asset base (primarily depreciation and amortization), and our corporate-level expenses.  With respect to Hotel Adjusted EBITDA, we believe that excluding the effect of corporate-level expenses provides a more complete understanding of the operating results over which individual hotels and third-party management companies have direct control.  We believe property-level results provide investors with supplemental information on the ongoing operational performance of our hotels and effectiveness of the third-party management companies operating our business on a property-level basis. Hotel Adjusted EBITDA margins are calculated as Hotel Adjusted EBITDA divided by total hotel revenues.  

The following table is a reconciliation of our U.S. GAAP net income to EBITDA, EBITDAre, Adjusted EBITDA and Hotel Adjusted EBITDA (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,20252024(As Adjusted)(1)20252024(As Adjusted)(1)Net income$22,638 $26,557 $75,592 $59,546 Interest expense17,111 16,986 47,137 49,434 Income tax expense469 418 618 696 Real estate related depreciation and amortization 28,340 28,356 84,388 84,542 EBITDA68,558 72,317 207,735 194,218 Impairment losses1,076 1,596 1,076 1,596 EBITDAre69,634 73,913 208,811 195,814 Non-cash lease expense and other amortization1,279 1,531 3,862 4,604 Share-based compensation expense (2)2,035 1,377 5,591 6,524 Hotel pre-opening costs135 156 479 925 Terminated transaction costs151 — 1,058 — Loss on debt extinguishment5,