Core Viewpoint - DiamondRock Hospitality Company has successfully refinanced, upsized, and extended the maturities of its senior unsecured credit facility, enhancing its balance sheet strength and flexibility [1][3]. Group 1: Credit Facility Details - The existing $1.2 billion credit facility has been increased to $1.5 billion, with a maturity schedule extended [1]. - The Credit Facility includes a $400 million revolving credit facility maturing in January 2031, a $500 million term loan maturing in January 2029, and two $300 million term loans maturing in January 2030, all with prepayment options [1][2]. - The Company plans to use the additional $300 million to repay three mortgage loans totaling approximately $125 million that matured in 2025 [2]. Group 2: Financial Strategy and Position - Following the repayment of the mortgage loans, the Company will have no debt maturities until January 2028, resulting in a fully unencumbered portfolio [2]. - The Company emphasizes maintaining low leverage and financial flexibility to capitalize on future capital allocation opportunities [3]. Group 3: Company Overview - DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) with a portfolio of 36 premium quality hotels and resorts, totaling approximately 9,600 rooms [5]. - The Company operates hotels under leading global brands and independent boutique hotels in leisure destinations and top gateway markets [5].

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Company Overview - DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that owns a diversified portfolio of hotels concentrated in leisure destinations and top gateway markets [4] - The Company currently owns 36 premium quality hotels and resorts with approximately 9,600 rooms [4] - The portfolio includes both leading global brand hotels and independent boutique hotels in the lifestyle segment [4] Financial Reporting - The Company will report financial results for the second quarter of 2025 after the market closes on Thursday, August 7, 2025 [1] - A conference call to discuss the financial results and business outlook will be held on Friday, August 8, 2025, at 9:00 a.m. Eastern Time [1] Conference Call Details - The conference call will be accessible by telephone and through the internet, with registration required for participation [2] - A replay of the call will be available two hours after the live call for a limited time on the Company's website [3]

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[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited Q1 2025 financial statements show net income attributable to common stockholders increased to **$9.4 million**, total assets decreased to **$3.10 billion**, and **$63.5 million** net cash provided by investing activities, including a **$92.0 million** hotel sale Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,101,597** | **$3,172,251** | | Total Liabilities | $1,527,945 | $1,573,319 | | Total Equity | $1,573,652 | $1,598,932 | Consolidated Statement of Operations Summary (in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $254,853 | $256,423 | | Total Operating Expenses | $230,086 | $233,978 | | Net Income | $11,915 | $8,358 | | Net Income Attributable to Common Stockholders | $9,403 | $5,874 | | EPS (Basic) | $0.05 | $0.03 | | EPS (Diluted) | $0.04 | $0.03 | Consolidated Statement of Cash Flows Summary (in thousands) | Cash Flow Category | Three Months Ended March 31, 2025 | | :--- | :--- | | Net cash provided by operating activities | $27,606 | | Net cash provided by (used in) investing activities | $63,457 | | Net cash used in financing activities | $(69,593) | - On February 19, 2025, the company sold the Westin Washington, D.C. City Center for **$92.0 million**, receiving net proceeds of approximately **$89.0 million**[30](index=30&type=chunk) - During Q1 2025, the company repurchased **1,413,643 shares** of common stock at an average price of **$7.85 per share**, for a total of **$11.1 million**[50](index=50&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, noting a **0.6%** revenue decrease to **$254.9 million** but a **2.0%** RevPAR increase, supported by **$100.6 million** cash and **$400 million** credit facility capacity, with **$85-95 million** projected 2025 capital expenditure - As of March 31, 2025, DiamondRock owned a portfolio of **36 premium hotels and resorts** with **9,595 guest rooms** in **26 U.S. markets**[81](index=81&type=chunk) Revenue Comparison (in thousands) | Revenue Category | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Rooms | $163,118 | $163,507 | (0.2)% | | Food and beverage | $66,841 | $68,381 | (2.3)% | | **Total revenues** | **$254,853** | **$256,423** | **(0.6)%** | Key Hotel Operating Statistics | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Occupancy % | 66.6% | 67.5% | (0.9)% | | ADR | $277.01 | $268.31 | 3.2% | | RevPAR | $184.60 | $180.98 | 2.0% | - The company maintains significant liquidity with **$100.6 million** of unrestricted cash and **$400 million** of borrowing capacity under its senior unsecured revolving credit facility as of March 31, 2025[113](index=113&type=chunk)[126](index=126&type=chunk) - For 2025, the company expects to spend between **$85 million and $95 million** on capital improvements, with significant projects at Orchards Inn Sedona, Kimpton Hotel Palomar Phoenix, and Courtyard New York Manhattan/Midtown East[134](index=134&type=chunk)[137](index=137&type=chunk) Non-GAAP Financial Measures Reconciliation Summary (in thousands) | Metric | Q1 2025 | Q1 2024 (As Adjusted) | | :--- | :--- | :--- | | Net Income | $11,915 | $8,358 | | EBITDA/EBITDAre | $54,123 | $51,827 | | Adjusted EBITDA | $56,110 | $56,214 | | Hotel Adjusted EBITDA | $61,664 | $61,414 | | FFO available to common stock and unit holders | $37,353 | $34,217 | | Adjusted FFO available to common stock and unit holders | $39,516 | $38,604 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk from its **$0.8 billion** variable-rate debt, mitigated by interest rate swaps fixing **$325 million** - The primary market risk is interest rate risk. As of March 31, 2025, **$0.8 billion** of the company's **$1.1 billion** total debt had a variable interest rate[157](index=157&type=chunk) - The company has effectively fixed the interest rate on **$325 million** of its variable-rate debt through the use of interest rate swaps[157](index=157&type=chunk) - A **100 basis point (1%)** fluctuation in market interest rates on the unhedged variable rate debt would change annual interest expense by approximately **$4.8 million**[157](index=157&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[158](index=158&type=chunk) - There were no changes in the company's internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[159](index=159&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings, with management expecting no material adverse effect on financial condition or results - The company is subject to various claims and lawsuits arising in the ordinary course of business but does not expect the aggregate liability to have a material adverse impact on its financial condition[161](index=161&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) Key risk factors include the lodging industry's cyclicality, adverse impacts of inflation on costs, higher interest rates on financing and valuations, and challenges in funding ongoing capital improvements - The performance of the lodging industry is highly cyclical and historically linked to key macroeconomic indicators, making the business sensitive to economic downturns[163](index=163&type=chunk) - Heightened inflation could continue to negatively impact operating expenses (e.g., labor, food, utilities) and the cost of renovations. Tariffs on imported goods could further increase costs[165](index=165&type=chunk)[171](index=171&type=chunk) - Higher interest rates could increase future financing costs and negatively affect real estate valuations due to rising capitalization rates[165](index=165&type=chunk)[167](index=167&type=chunk) - The company faces ongoing risks related to necessary hotel renovations, including construction cost overruns, operational disruptions, and the challenge of funding these projects due to REIT distribution requirements limiting retained earnings[168](index=168&type=chunk)[169](index=169&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased over **1.4 million** shares for approximately **$11.1 million** in Q1 2025 under its **$200.0 million** share repurchase program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Total Shares Purchased as Part of Publicly Announced Program | | :--- | :--- | :--- | :--- | | Jan 1 - Jan 31, 2025 | — | $ — | — | | Feb 1 - Feb 28, 2025 | 218,418 | $8.17 | — | | Mar 1 - Mar 31, 2025 | 1,430,769 | $7.86 | 1,413,643 | - The share repurchases were made under a **$200.0 million** program approved on May 1, 2024, which expires on May 1, 2026. As of March 31, 2025, approximately **$161.2 million** remained available under the program[173](index=173&type=chunk) [Item 3. Defaults Upon Senior Securities](index=45&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the period - None[175](index=175&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[176](index=176&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - During the three months ended March 31, 2025, no directors or officers adopted, terminated, or modified a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement[177](index=177&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including credit agreement amendments, CEO/CFO certifications, and Inline XBRL financial data files - The exhibits filed with the report include amendments to the Sixth Amended and Restated Credit Agreement, CEO and CFO certifications (Rule 13a-14(a) and Section 906), and Inline XBRL documents[178](index=178&type=chunk)[179](index=179&type=chunk)

Financial Data and Key Metrics Changes - Comparable RevPAR increased by 2% year-over-year, while total RevPAR increased by 1.6% [4] - Hotel adjusted EBITDA margins increased by 54 basis points, with hotel adjusted EBITDA in Q1 at $61.3 million, reflecting a 2.2% growth over 2024 [10] - Adjusted FFO was $0.19 per share, an increase of 5.6% over 2024, and free cash flow per share increased by 10% to $0.63 [11] Business Line Data and Key Metrics Changes - Urban hotels saw RevPAR growth of 5%, driven by group and business transient segments, while food and beverage revenue declined by 3.3% year-over-year [4][5] - Resort portfolio experienced a decline in comparable RevPAR by 2.1%, with total revenues slightly up in January and February but down by 4.3% in March [6][8] - Group room revenues increased by 10.4% year-over-year, with urban hotels seeing a 14.4% increase [9] Market Data and Key Metrics Changes - Florida assets experienced mid-single-digit revenue declines, with RevPAR down 5.9% [8] - Outside of Florida, RevPAR increased by 1.7%, with notable increases in luxury resorts like The Heights and Vail, which saw RevPAR growth of 7% and total RevPAR growth of 9.5% [8] Company Strategy and Development Direction - The company is focused on adding groups to resorts to enhance pricing and profitability, while also managing costs effectively in the face of revenue softness [9] - The company plans to continue share repurchases and is exploring refinancing options for maturing debts [12][13] - The outlook for 2025 has been revised, with FFO per share guidance unchanged at $0.94 to $1.06, and RevPAR outlook adjusted to a range of -1% to +1% growth [25][26] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment remains unsettled, impacting group lead conversion rates, but expressed cautious optimism for the second half of 2025 [22][24] - The company anticipates that demand for drive-to resorts may increase due to economic conditions, while foreign visitation is expected to be softer than initially anticipated [20][21] - Management highlighted the importance of maintaining liquidity and flexibility in the current environment while focusing on increasing earnings per share [80] Other Important Information - The company repurchased 1.4 million shares at an average price of $7.85, with a total of approximately $16 million in repurchases year-to-date [12] - The company has three mortgage loans maturing in 2025, totaling just under $300 million, and is considering a recast of its corporate credit facility [12][13] Q&A Session Summary Question: Preliminary portfolio-wide RevPAR for April - Management indicated that preliminary April RevPAR is showing better than 2% growth [31] Question: Impact of tariffs on renovation costs - Management stated that renovation costs are complex and depend on the timing of orders and tariffs [32][34] Question: Profile of average group bookings - Management noted that group bookings range from associations to corporate events, with average hotel sizes around 200 to 250 rooms [39] Question: Markets with strong group pacing - Management highlighted Denver and Salt Lake as markets showing significant strength in group bookings [42] Question: Average booking window for groups - Management mentioned that the booking window for smaller groups is typically 4 to 6 months, while larger groups book 8 to 12 months out [57] Question: Consumer behavior shifts in booking and spending - Management observed that booking windows are getting shorter, but on-property spending remains in line with or ahead of last year [70] Question: Expectations for wages and benefits growth - Management expects wages and benefits growth to be around 3% to 3.5% for the full year [76] Question: Incremental share repurchases versus cash position - Management emphasized the importance of driving value through share repurchases while maintaining liquidity [80]

Financial Data and Key Metrics Changes - Comparable RevPAR increased by 2% over 2024, while total RevPAR increased by 1.6% [4] - Hotel adjusted EBITDA margins increased by 54 basis points, with hotel adjusted EBITDA in Q1 at $61.3 million, reflecting a 2.2% growth over 2024 [9] - Adjusted FFO was $0.19 per share, an increase of $0.01 or 5.6% over 2024 [10] - Free cash flow per share increased by 10% to $0.63 per share over the prior four-quarter period [10] Business Line Data and Key Metrics Changes - Urban portfolio RevPAR grew by 5%, driven by group and business transient segments, with room revenues up 3.1% in January, 2.6% in February, and 5.4% in March [4] - Food and beverage revenue at urban hotels declined by 3.3% year over year, but excluding the Chicago Marriott, it increased by 5.5% [5] - Resort portfolio comparable RevPAR declined by 2.1% over 2024, with total revenues slightly up in January and February but down 4.3% in March [6][7] - Group room revenues increased by 10.4% over last year on a 5.2% increase in room nights [8] Market Data and Key Metrics Changes - Florida assets saw mid-single-digit revenue declines, with RevPAR down 5.9% and total RevPAR down 4% [7] - Outside of Florida, RevPAR increased by 1.7% and total RevPAR increased by 2.9% [7] - Preliminary April RevPAR showed better than 2% growth [30] Company Strategy and Development Direction - The company is focused on adding groups to resorts to preserve pricing and improve profitability [8] - Plans to refinance maturing loans through a combination of corporate debt issuance and recasting the corporate credit facility [12] - The company is pursuing opportunities to dispose of non-strategic assets while recycling proceeds into attractive investment alternatives [17] Management's Comments on Operating Environment and Future Outlook - Management noted that the unsettled macroeconomic environment has led to softer closure rates for group bookings [9] - The long-term secular drivers for US resorts remain strong, but near-term performance could be soft [20] - The company expects economic anxiety to settle as 2025 progresses, with a focus on increasing earnings per share [27] - Revised full-year 2025 RevPAR outlook to a range of -1% to +1% growth, reflecting a cautious stance on group bookings [23] Other Important Information - The company intends to continue paying a quarterly dividend of $0.08 per share in 2025 [10] - Share repurchases totaled approximately $16 million or 2.1 million shares at an average price of $7.85 [11] Q&A Session Summary Question: Preliminary portfolio-wide RevPAR for April - Preliminary April is showing a little better than 2% growth [30] Question: Renovation project costs and tariffs - Costs depend on the type of renovations; efforts are being made to secure materials before tariffs are reinstated [31][32] Question: Group conversion profile and average group size - The average hotel is about 200 to 250 rooms, with groups running the gamut from associations to corporate [36][37] Question: Group pacing in specific markets - Denver and Salt Lake are showing significant strength in group bookings [41] Question: Holes in group bookings for the rest of the year - The biggest holes are due to difficult comps in Chicago and Boston [48] Question: Average booking window for groups - Smaller groups tend to book 4 to 6 months out, while larger groups book 8 to 12 months out [53] Question: Competitive supply growth and developer behavior - Approximately 40% to 50% of markets have little to no supply growth due to anti-development stances [82]

Core Insights - DiamondRock Hospitality (DRH) reported revenue of $254.85 million for the quarter ended March 2025, reflecting a decrease of 0.6% year-over-year and a revenue surprise of -2.01% compared to the Zacks Consensus Estimate of $260.08 million [1] - The company's EPS was $0.19, significantly higher than the $0.03 reported in the same quarter last year, resulting in an EPS surprise of +11.76% against the consensus estimate of $0.17 [1] Revenue Breakdown - Other Revenues amounted to $24.89 million, slightly exceeding the average estimate of $24.80 million, marking a year-over-year increase of +1.5% [4] - Food and Beverage Revenues were reported at $66.84 million, below the average estimate of $69.01 million, indicating a year-over-year decline of -2.3% [4] - Room Revenues totaled $163.12 million, also falling short of the average estimate of $165.03 million, with a minimal year-over-year decrease of -0.2% [4] Stock Performance - Over the past month, shares of DiamondRock Hospitality have declined by -6.9%, contrasting with the Zacks S&P 500 composite's decrease of -0.7% [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - DiamondRock Hospitality (DRH) reported quarterly funds from operations (FFO) of $0.19 per share, exceeding the Zacks Consensus Estimate of $0.17 per share, and up from $0.17 per share a year ago [1][2]. Financial Performance - The quarterly FFO surprise was 11.76%, and the company had a previous quarter surprise of 14.29% with an actual FFO of $0.24 per share against an expected $0.21 [2]. - Revenues for the quarter ended March 2025 were $254.85 million, missing the Zacks Consensus Estimate by 2.01%, and down from $256.42 million year-over-year [3]. - Over the last four quarters, the company has surpassed consensus FFO estimates three times and revenue estimates two times [2][3]. Stock Performance and Outlook - DiamondRock Hospitality shares have declined approximately 18.7% since the beginning of the year, compared to a 5.3% decline in the S&P 500 [4]. - The future stock price movement will largely depend on management's commentary during the earnings call and the company's FFO outlook [4][5]. Estimate Revisions and Industry Context - The estimate revisions trend for DiamondRock Hospitality is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [7]. - The current consensus FFO estimate for the upcoming quarter is $0.33 on revenues of $309.56 million, and for the current fiscal year, it is $0.98 on revenues of $1.14 billion [8]. - The REIT and Equity Trust - Other industry is ranked in the bottom 35% of over 250 Zacks industries, suggesting potential challenges for stock performance [9].

[First Quarter 2025 Financial & Operational Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20%26%20Operational%20Highlights) [Performance Summary](index=1&type=section&id=1.1%20Performance%20Summary) DiamondRock's first-quarter 2025 results were in line with expectations, showing a 2.0% increase in Comparable RevPAR and a 2.2% rise in Comparable Hotel Adjusted EBITDA, with net income attributable to common stockholders increasing 59.3% year-over-year Q1 2025 Key Performance Indicators (vs. Q1 2024) | Metric | Q1 2025 | Change vs. Q1 2024 | | :--- | :--- | :--- | | Net Income (attributable to common stockholders) | $9.4 million | +59.3% | | Comparable RevPAR | $186.20 | +2.0% | | Comparable Hotel Adjusted EBITDA | $61.3 million | +2.2% | | Comparable Hotel Adjusted EBITDA Margin | 24.36% | +39 bps | | Adjusted FFO per Share | $0.19 | +5.6% | - Strong revenue growth was driven by a more than **10% increase in group revenues** and a over **9% increase in business transient revenues** compared to the prior year[4](index=4&type=chunk) - The company is executing a capital recycling strategy, exemplified by the sale of the Westin Washington, D.C. and subsequent repurchase of **$15.9 million** of its common shares[5](index=5&type=chunk) [Operating and Financial Results](index=2&type=section&id=Operating%20and%20Financial%20Results) [Operating Results Summary](index=2&type=section&id=2.1%20Operating%20Results%20Summary) For Q1 2025, comparable RevPAR increased by 2.0% to $186.20, driven by a 2.7% rise in ADR to $277.36, which offset a slight 0.5% decline in occupancy, while net income attributable to common stockholders surged 59.3% to $9.4 million Q1 2025 Comparable Operating Results (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | ADR | $277.36 | $269.95 | +2.7% | | Occupancy | 67.1% | 67.6% | (0.5)% | | RevPAR | $186.20 | $182.50 | +2.0% | | Total Revenues | $251.8 million | $250.5 million | +0.5% | | Hotel Adjusted EBITDA | $61.3 million | $60.0 million | +2.2% | | Hotel Adjusted EBITDA Margin | 24.36% | 23.97% | +39 bps | Q1 2025 Actual & Adjusted Financial Results (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $254.9 million | $256.4 million | (0.6)% | | Net income attributable to common stockholders | $9.4 million | $5.9 million | +59.3% | | Earnings per diluted share | $0.04 | $0.03 | +33.3% | | Adjusted EBITDA | $56.1 million | $56.2 million | (0.2)% | | Adjusted FFO per diluted share | $0.19 | $0.18 | +5.6% | [Consolidated Financial Statements](index=5&type=section&id=2.2%20Consolidated%20Financial%20Statements) The company's consolidated financial statements reflect a stable but slightly smaller balance sheet compared to year-end 2024, with total assets at $3.10 billion, and a significant improvement in Q1 2025 profitability despite a slight dip in total revenues [Consolidated Balance Sheets](index=5&type=section&id=2.2.1%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $3.10 billion, a decrease from $3.17 billion at December 31, 2024, primarily due to a hotel sale, with total liabilities and equity also slightly declining Key Balance Sheet Items (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $3,101,597 | $3,172,251 | | Total liabilities | $1,527,945 | $1,573,319 | | Total equity | $1,573,652 | $1,598,932 | [Consolidated Statements of Operations](index=6&type=section&id=2.2.2%20Consolidated%20Statements%20of%20Operations) For the first quarter of 2025, total revenues were $254.9 million, a slight decrease from $256.4 million in Q1 2024, yet net income attributable to common stockholders increased substantially to $9.4 million from $5.9 million, benefiting from lower total operating and interest expenses Q1 Statement of Operations Highlights (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenues | $254,853 | $256,423 | | Total operating expenses | $230,086 | $233,978 | | Interest expense | $15,158 | $16,246 | | Net income attributable to common stockholders | $9,403 | $5,874 | | Earnings per share - diluted | $0.04 | $0.03 | [Corporate Activities and Capital Allocation](index=2&type=section&id=Corporate%20Activities%20and%20Capital%20Allocation) [Hotel Disposition](index=2&type=section&id=3.1%20Hotel%20Disposition) On February 19, 2025, the company finalized the sale of the 410-room Westin Washington D.C. City Center for $92.0 million, representing an 11.2x multiple on 2024 Hotel EBITDA and a 7.5% capitalization rate on 2024 net operating income - The Company completed the sale of the Westin Washington D.C. City Center for a contract price of **$92.0 million** on February 19, 2025[9](index=9&type=chunk) - The sale price represented an **11.2x multiple on 2024 Hotel EBITDA** and a **7.5% capitalization rate on 2024 hotel net operating income**[9](index=9&type=chunk) [Capital Expenditures](index=3&type=section&id=3.2%20Capital%20Expenditures) The company invested approximately $25.6 million in hotel improvements during Q1 2025, with a full-year 2025 capital expenditure forecast of $85 million to $95 million, focusing on key repositioning and renovation projects - The company invested approximately **$25.6 million** in capital improvements in Q1 2025 and expects to invest **$85 million to $95 million** for the full year[10](index=10&type=chunk) - Significant 2025 projects include repositioning Orchards Inn Sedona as the Cliffs at L'Auberge, and guestroom renovations at Hilton Garden Inn New York / Times Square Central, Kimpton Hotel Palomar Phoenix, and Courtyard New York Manhattan/Midtown East[15](index=15&type=chunk) [Share Repurchase Program](index=3&type=section&id=3.3%20Share%20Repurchase%20Program) During the first quarter, the company repurchased 1.4 million common shares for $11.1 million, with an additional 0.7 million shares bought back for $4.8 million subsequent to quarter-end, leaving $158.1 million available under the existing $200.0 million repurchase authorization - Year-to-date, the Company has repurchased **2.1 million shares** of its common stock for a total of approximately **$15.9 million**[6](index=6&type=chunk)[12](index=12&type=chunk) - The company has **$158.1 million** of remaining capacity under its **$200.0 million** share repurchase program[12](index=12&type=chunk) [Dividends](index=3&type=section&id=3.4%20Dividends) The Board of Directors declared a quarterly cash dividend of $0.08 per common share, payable in July 2025, and a quarterly dividend of $0.515625 per share for the 8.250% Series A Cumulative Redeemable Preferred Stock, payable in June 2025 - A quarterly cash dividend of **$0.08 per share** on common stock was declared, payable on July 11, 2025, to shareholders of record as of June 30, 2025[13](index=13&type=chunk) - A quarterly dividend of **$0.515625 per share** on its 8.250% Series A Cumulative Redeemable Preferred Stock was declared, payable on June 30, 2025[13](index=13&type=chunk) [Balance Sheet, Liquidity, and Debt](index=3&type=section&id=Balance%20Sheet%2C%20Liquidity%2C%20and%20Debt) [Liquidity and Debt Summary](index=3&type=section&id=4.1%20Liquidity%20and%20Debt%20Summary) As of March 31, 2025, DiamondRock maintained a strong liquidity position of $624.6 million, including $224.6 million in unrestricted cash and full availability of its revolving credit facility, with total debt outstanding at $1.1 billion at a weighted average interest rate of 5.08% - The Company ended Q1 2025 with **$624.6 million of total liquidity**, comprising **$100.6 million of unrestricted corporate cash**, **$124.0 million of unrestricted hotel cash**, and full availability of its revolving credit facility[11](index=11&type=chunk) Debt Summary as of March 31, 2025 | Category | Amount | | :--- | :--- | | Total Debt Outstanding | $1.1 billion | | Unsecured Term Loans | $800.0 million | | Property-Specific Mortgage Loans | $293.7 million | | Weighted Average Interest Rate | 5.08% | - The company has three mortgage loans maturing in the next 12 months and is actively pursuing a financing transaction to repay them[10](index=10&type=chunk) [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) [Updated 2025 Outlook](index=3&type=section&id=5.1%20Updated%202025%20Outlook) In response to macroeconomic uncertainty and moderating group revenue pickup, the company has updated its full-year 2025 guidance, lowering the Comparable RevPAR growth forecast by 200 basis points to a range of -1.0% to +1.0%, while maintaining Adjusted FFO per share guidance Full Year 2025 Guidance Update | Metric | Current Guidance | Previous Guidance | Change at Midpoint | | :--- | :--- | :--- | :--- | | Comparable RevPAR Growth | (1.0)% to 1.0% | 1.0% to 3.0% | (2.0)% | | Adjusted EBITDA | $270 million to $295 million | $275 million to $300 million | ($5.0 million) | | Adjusted FFO | $198 million to $223 million | $199 million to $224 million | ($1.0 million) | | Adjusted FFO per share | $0.94 to $1.06 | $0.94 to $1.06 | - | - The updated outlook is based on current economic trends, including a tempered pace of group revenue pickup for the rest of the year[14](index=14&type=chunk) - Key full-year 2025 assumptions include corporate expenses of **$24 million-$25 million**, cash interest expense of **$60.5 million-$61.5 million**, and **210.3 million** fully diluted weighted average shares[20](index=20&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=7&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) [Explanation of Non-GAAP Measures](index=7&type=section&id=6.1%20Explanation%20of%20Non-GAAP%20Measures) The company utilizes several non-GAAP financial measures, including EBITDA, EBITDAre, FFO, and their adjusted versions, to assess operating performance and facilitate peer comparison, with key adjustments for non-cash lease expenses, hotel acquisition costs, and, effective January 1, 2025, share-based compensation - The company uses non-GAAP measures such as EBITDA, EBITDAre, Adjusted EBITDA, Hotel Adjusted EBITDA, FFO, and Adjusted FFO as key indicators of operating performance[25](index=25&type=chunk) - Adjustments are made for items like non-cash lease expense, hotel acquisition costs, severance, and other non-recurring items to provide a clearer view of ongoing performance[33](index=33&type=chunk) - Effective January 1, 2025, the company excludes share-based compensation from its calculations of Adjusted EBITDA and Adjusted FFO, with prior periods adjusted for comparability[8](index=8&type=chunk)[33](index=33&type=chunk) [Reconciliations](index=11&type=section&id=6.2%20Reconciliations) This section provides detailed reconciliations of GAAP net income to the company's key non-GAAP performance metrics, showing Q1 2025 net income of $11.9 million reconciled to an Adjusted EBITDA of $56.1 million and an Adjusted FFO of $39.5 million, along with reconciliations for the full-year 2025 guidance Q1 2025 Reconciliation: Net Income to Adjusted EBITDA (in thousands) | Line Item | Amount | | :--- | :--- | | Net income | $11,915 | | Interest expense | $15,158 | | Income tax benefit | $(842) | | Real estate related depreciation and amortization | $27,892 | | **EBITDA/EBITDAre** | **$54,123** | | Adjustments (Non-cash lease, Share-based comp, etc.) | $1,987 | | **Adjusted EBITDA** | **$56,110** | Q1 2025 Reconciliation: Net Income to Adjusted FFO (in thousands) | Line Item | Amount | | :--- | :--- | | Net income | $11,915 | | Real estate related depreciation and amortization | $27,892 | | **FFO** | **$39,807** | | Adjustments (Non-cash lease, Share-based comp, etc.) | $2,163 | | **Adjusted FFO available to common stock and unit holders** | **$39,516** | [Supplemental Information](index=13&type=section&id=Supplemental%20Information) [Comparable Operating Results and Quarterly Data](index=13&type=section&id=7.1%20Comparable%20Operating%20Results%20and%20Quarterly%20Data) This section adjusts historical results to create a comparable portfolio view, excluding the sold Westin Washington D.C. and including pre-acquisition results for the AC Hotel Minneapolis, showing Q1 2025 Comparable Revenues of $251.8 million and Comparable Hotel Adjusted EBITDA of $61.3 million, alongside detailed quarterly operating metrics for 2024 Q1 2025 Reconciliation to Comparable Results (in thousands) | Metric | Reported | Adjustments | Comparable | | :--- | :--- | :--- | :--- | | Revenues | $254,853 | $(3,077) | $251,776 | | Hotel Adjusted EBITDA | $61,664 | $(331) | $61,333 | - The report provides selected quarterly comparable operating information for the full year 2024, including ADR, Occupancy, RevPAR, and Hotel Adjusted EBITDA for the current portfolio of 36 hotels[38](index=38&type=chunk)[39](index=39&type=chunk) [Market Capitalization and Debt Details](index=14&type=section&id=7.2%20Market%20Capitalization%20and%20Debt%20Details) As of March 31, 2025, the company's total enterprise value was calculated at approximately $2.73 billion, composed of $1.62 billion in common equity, $119 million in preferred equity, and $1.09 billion in debt, offset by $100.6 million in cash, with a detailed debt summary provided Enterprise Value as of March 31, 2025 (in thousands) | Component | Value | | :--- | :--- | | Common equity capitalization | $1,616,966 | | Preferred equity capitalization | $119,000 | | Consolidated debt (face amount) | $1,093,694 | | Cash and cash equivalents | $(100,621) | | **Total enterprise value** | **$2,729,039** | - A detailed debt summary table provides specifics on interest rates, principal amounts, and maturity dates for the company's mortgage loans and unsecured term loans[43](index=43&type=chunk) [Hotel-Level Operating Statistics](index=15&type=section&id=7.3%20Hotel-Level%20Operating%20Statistics) The report includes detailed property-level operating statistics for the first quarter, comparing 2025 to 2024, covering ADR, Occupancy, and RevPAR for each of the 36 hotels in the comparable portfolio, along with detailed reconciliations from property-level net income (or loss) to Hotel Adjusted EBITDA - Provides a detailed table of Q1 2025 vs. Q1 2024 operating statistics (ADR, Occupancy, RevPAR) for each individual hotel in the portfolio[44](index=44&type=chunk) - Includes detailed hotel-by-hotel reconciliations of Net Income/(Loss) to Hotel Adjusted EBITDA for Q1 2025 and Q1 2024[45](index=45&type=chunk)[46](index=46&type=chunk)