Company: DRH-PA
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001298946-25-000015
Chunk: 143

Company: DiamondRock Hospitality Co
Filing Date: 2025-02-28
Form: 10-K
Item: Item 16
Chunk 143
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 related to LTIP unit awards. The compensation expense recorded for the year ended December 31, 2024 included $1.2 million of accelerated compensation expense related to LTIPs for the departures of our former Chief Executive Officer and Chief Investment Officer. The accelerated compensation expense is recorded as severance costs in corporate expenses within the consolidated statements of operations and comprehensive income.

11.  Income Taxes

We have elected to be treated as a REIT under the provisions of the Internal Revenue Code, which requires that we distribute at least 90% of our taxable income annually to our stockholders and comply with certain other requirements. In addition to paying federal and state taxes on any retained income, we may be subject to taxes on “built in gains” on sales of certain assets. Our taxable REIT subsidiaries are subject to federal, state and local taxes.For federal income tax purposes, the cash distributions paid to holders of our common stock and Series A Preferred Stock may be characterized as ordinary income, return of capital (generally non-taxable) or capital gains. Tax law permits certain characterization of distributions which could result in differences between cash basis and tax basis distribution amounts.The following characterizes distributions paid to holders of common stock and Series A Preferred Stock on a tax basis for the years ended December 31, 2024, 2023, and 2022:

F-29

Year Ended December 31,202420232022Common StockOrdinary non-qualified income$0.320000 $0.120000 $0.044543 Qualified dividends— — 0.045457 $0.320000 $0.120000 $0.090000 Series A Preferred StockOrdinary non-qualified income$2.062500 $2.062500 $1.020772 Qualified dividends— — 1.041728 $2.062500 $2.062500 $2.062500 Our provision for income taxes consists of the following (in thousands):Year Ended December 31,202420232022Current - Federal$279 $(84)$901  State1,711 1,376 2,487 Total current1,990 1,292 3,388 Deferred - Federal(253)492 1,090  State6 (486)2,044 Change in valuation allowance(202)(981)(3,915)Total deferred(449)(975)(781)Income tax provision$