Company: DRH-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001298946-25-000077
Chunk: 53

Company: DiamondRock Hospitality Co
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 53
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 securities of one or more taxable REIT subsidiaries. 

•The OBBB permanently extended the pass-through qualified business income deduction, generally allowing individuals to deduct 20% of the aggregate amount of ordinary REIT dividends distributed by a REIT.  This deduction was due to expire for tax years beginning after December 31, 2025.  

Additionally, the OBBB made certain changes to provisions of the Code regarding “global intangible low-tax income” or “GILTI.” Although in the past we may have been subject to those rules, we no longer have any non-U.S. taxable REIT subsidiaries and do not currently expect to be subject to the regime in the foreseeable future. Accordingly, the section of the S-3 Tax Disclosure entitled “Global Intangible Low-Tax Income” is hereby deleted.

To the extent the information set forth in the Existing Tax Disclosure is inconsistent with this supplemental information, this supplemental information supersedes the information in the Existing Tax Disclosure. This supplemental information is 

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provided on the same basis and subject to the same qualifications as are set forth in the S-3 Tax Disclosure as if those paragraphs were set forth in this Quarterly Report on Form 10-Q.

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Item 3.Quantitative and Qualitative Disclosures about Market Risk

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business strategies, the primary market risk to which we are currently exposed, and to which we expect to be exposed in the future, is interest rate risk. The face amount of our outstanding debt as of June 30, 2025 was $1.0 billion, of which $0.8 billion had a variable interest rate.  Our primary sensitivity in 2025 is to changes in one-month Secured Overnight Financing Rate (“SOFR”), as the interest rates on our variable-rate indebtedness were based on this benchmark rate. We use interest rate swaps in order to maintain what we believe to be an appropriate level of exposure to interest rate variability. As of June 30, 2025, the interest rate on $325 million of our variable-rate indebtedness had been effectively fixed through the use of interest rate swaps. We receive one-month SOFR and pay a fixed rate for all of our interest rate swaps. If market interest rates on our unhedged variable rate debt fluctuate by 100 basis points, interest expense would increase or decrease