Company: DRH-PA
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001298946-25-000049
Chunk: 78

Company: DiamondRock Hospitality Co
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 8
Chunk 78
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; costs incurred related to natural disasters; and gains on property insurance claim settlements, other than income related to business interruption insurance.

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):

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Three Months Ended March 31,20252024 (As Adjusted)(1)Net income$11,915 $8,358 Interest expense15,158 16,246 Income tax benefit(842)(1,090)Real estate related depreciation and amortization 27,892 28,313 EBITDA/EBITDAre54,123 51,827 Non-cash lease expense and other amortization1,299 1,518 Share-based compensation expense (2)665 2,635 Hotel pre-opening costs23 234 Adjusted EBITDA56,110 56,214 Corporate expenses6,348 6,248 Interest (income) and other (income) expense, net(794)(1,048)Hotel Adjusted EBITDA$61,664 $61,414 

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

(