jewhyte/iStock via Getty Images Introduction I like preferred shares as a subdivision of my income portfolio, and my main focus is obviously on the issuer's ability to pay the preferred dividends while the balance sheet strength also plays an important role. The REIT's management team also calls value creation its 'magnetic north', and that definitely is an attitude I like to see. I have been keeping an eye on DiamondRock Hospitality's (NYSE:DRH) preferred shares and I used to have a long position which I s ...

Dividend Announcements - The Company declared a quarterly cash dividend of $0.03 per common share, payable on July 12, 2024, to shareholders of record as of June 28, 2024 [1] - A quarterly dividend of $0.515625 per share was declared on its 8.250% Series A Cumulative Redeemable Preferred Stock, payable on June 28, 2024, to shareholders of record as of June 18, 2024 [2] Company Overview - DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that owns a portfolio of geographically diversified hotels, primarily in leisure destinations and top gateway markets [3] - The Company currently owns 36 premium quality hotels and resorts, totaling over 9,700 rooms [3] - The portfolio includes both leading global brand hotels and independent boutique hotels in the lifestyle segment [3]

BETHESDA, Md., May 29, 2024 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH) will report financial results for the second quarter 2024 after the market closes on Thursday, August 1, 2024. A conference call for investors and other interested parties is scheduled for the next day on Friday, August 2, 2024 at 9:00 a.m. Eastern Time (ET). The information to be discussed on the call will be contained in the Company's earnings release, which will be available in the Investor Relations s ...

BETHESDA, Md., May 16, 2024 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH), a lodging-focused real estate investment trust that owns a portfolio of 36 premium hotels and resorts in the United States, today announced the promotion of Stephen Spierto to Chief Accounting Officer effective as of May 15, 2024. Mr. Spierto, age 34, joined the Company in November 2023 and previously served as Vice President, Corporate Controller of the Company from November 2023 until his May 2024 prom ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited):) This section presents the unaudited consolidated financial statements for DiamondRock Hospitality Company as of March 31, 2024, and for the three months then ended, including balance sheets, income statements, equity, cash flows, and notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The company's total assets and total liabilities and equity remained stable at approximately $3.24 billion from December 2023 to March 2024, with $2.75 billion in net property and $1.17 billion in debt | Balance Sheet Items | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$3,238,797** | **$3,238,687** | | Property and equipment, net | $2,750,573 | $2,755,195 | | Cash and cash equivalents | $120,064 | $121,595 | | **Total Liabilities** | **$1,589,555** | **$1,589,704** | | Debt, net | $1,174,733 | $1,177,005 | | **Total Equity** | **$1,649,242** | **$1,648,983** | [Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Total revenues increased to $256.4 million in Q1 2024, but net income decreased to $8.3 million due to higher operating expenses, with diluted EPS remaining flat at $0.03 | Income Statement Items | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :--- | :--- | :--- | | **Total Revenues** | **$256,423** | **$243,553** | | Rooms | $163,507 | $160,673 | | Food and beverage | $68,381 | $59,777 | | **Total Operating Expenses** | **$233,978** | **$217,842** | | **Net Income** | **$8,358** | **$9,188** | | Net income attributable to common stockholders | $5,874 | $6,702 | | **Earnings per share—diluted** | **$0.03** | **$0.03** | - Comprehensive income attributable to the Company increased to **$9.6 million** in Q1 2024 from **$9.3 million** in Q1 2023, primarily driven by an unrealized gain on interest rate derivative instruments[12](index=12&type=chunk) [Consolidated Statements of Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Equity) Total equity slightly increased from $1.649 billion at year-end 2023 to $1.6492 billion in Q1 2024, driven by net income offset by stock distributions - Key activities affecting equity in Q1 2024 included net income of **$8.3 million**, distributions on common stock of **$6.3 million**, distributions on preferred stock of **$2.5 million**, and share-based compensation of **$1.9 million**[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased to $31.2 million in Q1 2024, with cash used in investing activities at $18.9 million and financing activities at $14.3 million | Cash Flow Activities | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $31,233 | $58,069 | | Net cash used in investing activities | ($18,867) | ($21,642) | | Net cash used in financing activities | ($14,293) | ($21,063) | | **Net (decrease) increase in cash** | **($1,927)** | **$15,364** | [Notes to the Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail the company's organization, accounting policies, debt, equity, and subsequent events, including a new CEO appointment and expected $19 million severance costs in Q2 2024 - The company is a lodging-focused REIT that owns a portfolio of **36 premium hotels and resorts** with **9,757 guest rooms** as of March 31, 2024[26](index=26&type=chunk) | Debt Summary | As of March 31, 2024 | | :--- | :--- | | Total Debt Principal | $1,175.7 million | | Weighted-Average Interest Rate | 5.22% | | Unsecured Term Loans | $800.0 million | | Mortgage Loans | $375.7 million | - The company has a **$200 million** share repurchase program authorized through February 28, 2025, with **$185.3 million** remaining capacity as of May 3, 2024; no shares were repurchased in Q1 2024[53](index=53&type=chunk) - On April 15, 2024, the company appointed Jeffrey J. Donnelly as the new CEO and announced other leadership changes, expecting to recognize approximately **$19 million** in severance costs in Q2 2024[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) [Management's Discussion and Analysis (MD&A)](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 operating results, financial condition, and liquidity, highlighting a 5.3% revenue increase, decreased net income, a conservative capital structure, and planned $100 million in capital improvements [Overview](index=23&type=section&id=Overview) The company operates as a REIT with 36 premium hotels, focusing on aggressive asset management and disciplined capital allocation, with significant leadership changes occurring in April 2024 - The company's strategy is to apply aggressive asset management and disciplined capital allocation to high-quality lodging properties in North American urban and resort markets to deliver long-term stockholder returns[78](index=78&type=chunk) - On April 15, 2024, the company announced significant leadership changes, including the appointment of Jeffrey J. Donnelly as CEO, Briony R. Quinn as CFO, and Justin L. Leonard as President[81](index=81&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Q1 2024 total revenues increased by 5.3% to $256.4 million, driven by a 14.4% rise in food and beverage revenue, while hotel operating expenses increased by 7.8%, and RevPAR slightly decreased by 0.4% | Revenue Breakdown | Q1 2024 (in thousands) | Q1 2023 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Rooms | $163,507 | $160,673 | 1.8% | | Food and beverage | $68,381 | $59,777 | 14.4% | | Other | $24,535 | $23,103 | 6.2% | | **Total revenues** | **$256,423** | **$243,553** | **5.3%** | | Key Operating Statistics | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Occupancy % | 68.4% | 66.9% | 1.5% | | ADR | $269.53 | $276.43 | (2.5)% | | RevPAR | $184.23 | $185.00 | (0.4)% | - Total hotel operating expenses increased by **7.8%** year-over-year, primarily due to increased occupancy, related labor costs, higher property tax assessments, and insurance premiums[98](index=98&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a conservative capital structure with 32 of 36 hotels unencumbered, plans to repay a $73.9 million mortgage in 2024, and holds $120.1 million in unrestricted cash with full availability on its $400 million credit facility - The company has one mortgage loan with a principal balance of **$73.9 million** maturing in 2024, which it intends to repay using cash on hand[102](index=102&type=chunk) - As of March 31, 2024, the company had **$1.2 billion** of debt outstanding with a weighted average interest rate of **5.22%**, and **32 of its 36 hotels** are unencumbered by mortgage debt[108](index=108&type=chunk) - As of March 31, 2024, liquidity consisted of **$120.1 million** in unrestricted cash, **$45.2 million** in restricted cash, and full availability on its **$400 million** senior unsecured credit facility[116](index=116&type=chunk) [Capital Expenditures](index=32&type=section&id=Capital%20Expenditures) The company plans to invest approximately $100 million in capital improvements in 2024, with $18.9 million already spent in Q1, focusing on guestroom renovations and property repositioning - The company expects to spend approximately **$100 million** on capital improvements in 2024[124](index=124&type=chunk) - Key 2024 projects include guestroom renovation at Westin San Diego Bayview, repositioning Hilton Burlington Lake Champlain to a Curio Collection, integrating Orchards Inn Sedona with L'Auberge de Sedona, and renovating The Landing Lake Tahoe[124](index=124&type=chunk) [Non-GAAP Financial Measures](index=33&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like EBITDA and FFO; Q1 2024 Adjusted EBITDA was $53.6 million, and Adjusted FFO was $36.0 million, both slightly down year-over-year | Reconciliation to Adjusted EBITDA | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Net income | $8,358 | $9,188 | | EBITDA / EBITDAre | $51,827 | $53,606 | | **Adjusted EBITDA** | **$53,579** | **$55,372** | | Reconciliation to Adjusted FFO | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Net income | $8,358 | $9,188 | | FFO | $36,671 | $36,660 | | **Adjusted FFO available to common stock and unit holders** | **$35,969** | **$37,986** | [Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate risk on its $0.8 billion variable-rate debt, with a 100 basis point change impacting annual interest expense by $4.8 million - The company's primary market risk is interest rate risk; of its **$1.2 billion** in total debt, **$0.8 billion** is variable-rate[142](index=142&type=chunk) - A **100 basis point** fluctuation in interest rates on the unhedged variable rate debt would result in an annual change to interest expense of **$4.8 million**[142](index=142&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective[143](index=143&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[144](index=144&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation but does not anticipate any material adverse impact on its financial condition or results of operations - The company states that it is subject to various legal proceedings in the ordinary course of business but does not expect them to have a material adverse impact on its financial condition[146](index=146&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023, were reported - No material changes to the risk factors from the Annual Report on Form 10-K for the year ended December 31, 2023, were reported[147](index=147&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase shares in Q1 2024, but employees surrendered 316,624 shares for tax withholding, with $185.3 million remaining under the share repurchase authorization - In February 2024, **316,624 shares** were surrendered by employees for tax withholding on vested restricted stock; these were not part of the formal share repurchase program[149](index=149&type=chunk) - The company has approximately **$185.3 million** remaining under its **$200.0 million** share repurchase program, which expires on February 28, 2025[149](index=149&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during Q1 2024 - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during the three months ended March 31, 2024[152](index=152&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the 2024 Equity Incentive Plan, CEO and CFO certifications, and Interactive Data Files (XBRL) - Exhibits filed with the report include the DiamondRock Hospitality Company 2024 Equity Incentive Plan, CEO/CFO certifications (Rule 13a-14(a) and Section 906), and Inline XBRL documents[153](index=153&type=chunk)

[Executive Summary & Company Overview](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Overview) DiamondRock Hospitality Company reported strong Q1 2024 comparable total revenue growth, announced key leadership appointments, and reaffirmed its strategic focus on value-added hotel real estate [First Quarter 2024 Highlights](index=1&type=section&id=First%20Quarter%202024%20Highlights) DiamondRock Hospitality Company reported its first quarter 2024 results with comparable total revenues increasing by 3.8% from 2023, alongside a slight decrease in comparable RevPAR and Hotel Adjusted EBITDA. The company also raised the midpoint of its full-year guidance First Quarter 2024 Financial Highlights (Millions) | Metric | 2024 (Millions) | Change from 2023 | | :-------------------------------- | :-------------- | :--------------- | | Net Income | $8.4 | (8.7)% | | Earnings per diluted share | $0.03 | 0.0% | | Comparable Total Revenues | $256.4 | 3.8% | | Comparable RevPAR | $184.23 | (0.4)% | | Comparable Hotel Adjusted EBITDA | $61.4 | (3.0)% | | Comparable Hotel Adjusted EBITDA Margin | 23.95% | (169 bps) | | Adjusted EBITDA | $53.6 | (3.2)% | | Adjusted FFO | $36.0 | (5.3)% | | Adjusted FFO per diluted share | $0.17 | (5.6)% | [Recent Developments & Leadership Changes](index=1&type=section&id=Recent%20Developments%20%26%20Leadership%20Changes) The Company announced significant leadership changes, appointing Jeffrey Donnelly as CEO, Briony Quinn as CFO, and Justin Leonard as President and COO, while reducing its executive team from six to four members to drive business momentum - Jeffrey Donnelly was appointed Chief Executive Officer, Briony Quinn was named Executive Vice President, Chief Financial Officer and Treasurer, and Justin Leonard was appointed President and maintained his role as Chief Operating Officer[4](index=4&type=chunk) - The executive team structure was reduced from **six to four members**[5](index=5&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) CEO Jeffrey Donnelly expressed commitment to the strategy of acquiring, actively owning, and disposing of value-added resort and urban hotel real estate. He noted strong food and beverage sales offsetting softer luxury resort growth and highlighted confidence in group sales and leadership structure savings as reasons for raising full-year guidance - The Company remains committed to its strategy to create long-term shareholder value through the acquisition, active-ownership, and disposition of value-added resort and urban hotel real estate[7](index=7&type=chunk) - First quarter total revenue growth was largely in line with expectations, with strong food and beverage sales from a **10.2% increase in group room nights** offsetting softer top-line growth at luxury resorts[8](index=8&type=chunk) - Full-year earnings guidance was raised to incorporate savings from a streamlined leadership structure and confidence in group pace, with **85% of budgeted full-year group revenues** already on the books[9](index=9&type=chunk) [About the Company](index=4&type=section&id=About%20the%20Company) DiamondRock Hospitality Company is a self-advised REIT owning a portfolio of 36 premium hotels and resorts (over 9,700 rooms) in leisure destinations and top gateway markets, strategically positioned under global brand families and independent boutique hotels - DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that owns a portfolio of **36 premium hotels and resorts** with over **9,700 rooms**[17](index=17&type=chunk) - The portfolio is geographically diversified, concentrated in leisure destinations and top gateway markets, and operated under leading global brand families as well as independent boutique hotels[17](index=17&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) The Company reported Q1 2024 operating results, maintained robust liquidity, detailed capital expenditures, declared dividends, and provided a comprehensive market capitalization and debt summary [Operating Results (Comparable & Actual)](index=2&type=section&id=Operating%20Results%20%28Comparable%20%26%20Actual%29) For Q1 2024, comparable total revenues increased by 3.8% to $256.4 million, while comparable RevPAR slightly decreased by 0.4% to $184.23. Actual net income was $8.4 million, an 8.7% decrease from Q1 2023 Comparable and Actual Operating Results (Quarter Ended March 31, in millions) | Metric | 2024 | 2023 | Change From 2023 | | :-------------------------- | :----- | :----- | :--------------- | | **Comparable Operating Results** | | | | | ADR | $269.53 | $276.43 | (2.5)% | | Occupancy | 68.4% | 66.9% | 1.5% | | RevPAR | $184.23 | $185.00 | (0.4)% | | Total RevPAR | $288.92 | $282.28 | 2.4% | | Room Revenues (millions) | $163.5 | $161.9 | 1.0% | | Total Revenues (millions) | $256.4 | $247.0 | 3.8% | | Hotel Adjusted EBITDA (millions) | $61.4 | $63.3 | (3.0)% | | Hotel Adjusted EBITDA Margin | 23.95% | 25.64% | (169 bps) | | Available Rooms | 887,523 | 875,126 | 12,397 | | **Actual Operating Results** | | | | | Total Revenues (millions) | $256.4 | $243.6 | 5.3% | | Net income (millions) | $8.4 | $9.2 | (8.7)% | | Earnings per diluted share | $0.03 | $0.03 | 0.0% | | Adjusted EBITDA (millions) | $53.6 | $55.4 | (3.2)% | | Adjusted FFO (millions) | $36.0 | $38.0 | (5.3)% | | Adjusted FFO per diluted share | $0.17 | $0.18 | (5.6)% | [Balance Sheet and Liquidity](index=3&type=section&id=Balance%20Sheet%20and%20Liquidity) As of March 31, 2024, the Company maintained strong liquidity of $628.5 million, comprising $228.5 million in cash and full capacity on its $400 million credit facility. Total debt outstanding was $1.2 billion - The Company ended the quarter with **$628.5 million of liquidity**, comprised of **$120.1 million of unrestricted corporate cash**, **$108.4 million of unrestricted cash at its hotels**, and full capacity on its **$400 million senior unsecured credit facility**[11](index=11&type=chunk) - As of March 31, 2024, total debt outstanding was **$1.2 billion**, consisting of **$800.0 million of unsecured term loans** and **$375.7 million of property-specific, non-recourse mortgage debt**[11](index=11&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :------------------------------------------ | :------------- | :---------------- | | **ASSETS** | | | | Property and equipment, net | $2,750,573 | $2,755,195 | | Cash and cash equivalents | $120,064 | $121,595 | | Total assets | $3,238,797 | $3,238,687 | | **LIABILITIES AND EQUITY** | | | | Debt, net of unamortized debt issuance costs | $1,174,733 | $1,177,005 | | Total liabilities | $1,589,555 | $1,589,704 | | Total stockholders' equity | $1,641,898 | $1,642,075 | | Total equity | $1,649,242 | $1,648,983 | | Total liabilities and equity | $3,238,797 | $3,238,687 | [Capital Expenditures](index=3&type=section&id=Capital%20Expenditures) The Company invested $18.9 million in capital improvements during Q1 2024 and anticipates a total of approximately $100 million for the full year, focusing on significant renovation and repositioning projects across several properties - The Company invested approximately **$18.9 million in capital improvements** at its hotels during the three months ended March 31, 2024[11](index=11&type=chunk) - The Company continues to expect to spend approximately **$100 million on capital improvements** at its hotels in 2024[11](index=11&type=chunk) [Dividends](index=3&type=section&id=Dividends) The Company declared a quarterly cash dividend of $0.03 per common share and $0.515625 per share for its 8.250% Series A Cumulative Redeemable Preferred Stock - The Company declared a quarterly cash dividend of **$0.03 per common share**, paid on April 12, 2024[12](index=12&type=chunk) - A quarterly dividend of **$0.515625 per share** was paid on its **8.250% Series A Cumulative Redeemable Preferred Stock** on March 29, 2024[12](index=12&type=chunk) [Market Capitalization and Debt Summary](index=15&type=section&id=Market%20Capitalization%20and%20Debt%20Summary) As of March 31, 2024, the total enterprise value was $3.23 billion, with common equity capitalization at $2.05 billion. The debt portfolio included $1.18 billion in consolidated debt, with a weighted-average interest rate of 5.22% Market Capitalization as of March 31, 2024 (in thousands) | Metric | Amount | | :-------------------------------------------------- | :------------- | | Common equity capitalization (at $9.61/share) | $2,053,739 | | Preferred equity capitalization (at $25.00/share) | $119,000 | | Consolidated debt (face amount) | $1,175,728 | | Cash and cash equivalents | ($120,064) | | Total enterprise value | $3,228,403 | | Combined shares and units | 213,708 | Debt Summary as of March 31, 2024 (dollars in thousands) | Loan Type | Interest Rate | Term | Outstanding Principal | Maturity | | :------------------------------------ | :------------ | :------- | :-------------------- | :----------- | | Property-specific mortgage debt (4 loans) | 3.66%-4.40% | Fixed | $375,728 | Aug 2024 - Nov 2025 | | Unsecured term loan | SOFR + 1.35% | Variable | $500,000 | Jan 2028 | | Unsecured term loan | SOFR + 1.35% | Variable | $300,000 | Jan 2025 | | Senior unsecured credit facility | SOFR + 1.40% | Variable | $0 | Sep 2026 | | Total debt | | | $1,175,728 | | | Weighted-average interest rate of fixed rate debt | 4.09% | | | | | Total weighted-average interest rate (incl. swaps) | 5.22% | | | | [Financial Guidance](index=3&type=section&id=Financial%20Guidance) DiamondRock revised its full-year 2024 guidance upwards for Adjusted EBITDA and FFO, while maintaining comparable RevPAR growth expectations, and provided updates on key renovation projects [Full Year 2024 Guidance Revision](index=3&type=section&id=Full%20Year%202024%20Guidance%20Revision) DiamondRock revised its full-year 2024 guidance, raising the midpoint for Adjusted EBITDA by $5.0 million to a range of $270-$290 million and Adjusted FFO by $2.0 million to $194-$214 million, with Adjusted FFO per diluted share now expected between $0.91 and $1.00. Comparable RevPAR growth guidance remains unchanged at 2.0% to 4.0% Revised Full Year 2024 Guidance | Metric | Previous Low End | Previous High End | Revised Low End | Revised High End | Change at Midpoint | | :-------------------------------- | :--------------- | :---------------- | :-------------- | :--------------- | :----------------- | | Comparable RevPAR Growth | 2.0% | 4.0% | 2.0% | 4.0% | - | | Adjusted EBITDA (millions) | $260 | $290 | $270 | $290 | +$5.0 million | | Adjusted FFO (millions) | $187 | $217 | $194 | $214 | +$2.0 million | | Adjusted FFO per diluted share | $0.88 | $1.02 | $0.91 | $1.00 | +$0.01 per share | - Guidance incorporates corporate expenses of **$29.5 million to $30.5 million** (excluding executive transition costs), interest expense of **$65.2 million to $66.2 million**, and **3,571,062 available rooms**[18](index=18&type=chunk) [Key Project Updates](index=3&type=section&id=Key%20Project%20Updates) The Company is undertaking several significant renovation and repositioning projects, including the Westin San Diego Bayview (Q2 2024 completion), Hilton Burlington Lake Champlain rebranding to Curio Collection (Summer 2024), Orchards Inn Sedona repositioning (2025 completion), and The Landing Lake Tahoe Resort and Spa renovation (2025 completion) - Westin San Diego Bayview: Comprehensive guestroom renovation expected to be completed in **Q2 2024**[14](index=14&type=chunk) - Hilton Burlington Lake Champlain: Repositioning to rebrand as a Curio Collection by Hilton hotel, including a new restaurant concept, expected to be completed in **Summer 2024**[14](index=14&type=chunk) - Orchards Inn Sedona: Repositioning as The Cliffs at L'Auberge, integrating with L'Auberge de Sedona and including new pool construction, guestroom renovation, and new event space, expected to commence in 2024 and complete in **2025**[14](index=14&type=chunk) - The Landing Lake Tahoe Resort and Spa: Renovation to accommodate **14 new keys** and construct an adjacent indoor/outdoor event space, expected to be completed in **2025**[14](index=14&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles key non-GAAP financial measures, including EBITDA, FFO, and comparable operating results, to their most directly comparable GAAP measures [Definition and Use of Non-GAAP Measures](index=7&type=section&id=Definition%20and%20Use%20of%20Non-GAAP%20Measures) The Company utilizes non-GAAP measures such as EBITDA, EBITDAre, Adjusted EBITDA, Hotel Adjusted EBITDA, FFO, and Adjusted FFO to evaluate operating performance and facilitate comparisons, acknowledging their limitations and providing reconciliations to GAAP measures - The Company uses EBITDA, EBITDAre, Adjusted EBITDA, Hotel Adjusted EBITDA, FFO, and Adjusted FFO as key measures of operating performance, useful for evaluating hotel performance and facilitating comparisons with other lodging REITs[25](index=25&type=chunk)[26](index=26&type=chunk)[29](index=29&type=chunk) - These non-GAAP measures are presented in addition to GAAP results and exclude certain expenses or expenditures like depreciation, interest, and capital expenditures, as well as specific non-cash or non-recurring items to provide a clearer view of ongoing operating performance[26](index=26&type=chunk)[27](index=27&type=chunk)[31](index=31&type=chunk) - Hotel Adjusted EBITDA specifically excludes corporate-level expenses to provide a more complete understanding of property-level operating results[33](index=33&type=chunk) [Reconciliation of EBITDA, EBITDAre, and Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20EBITDA%2C%20EBITDAre%2C%20and%20Adjusted%20EBITDA) Reconciliation tables show the derivation of EBITDA, EBITDAre, and Adjusted EBITDA from net income for Q1 2024 and 2023, and for the full-year 2024 guidance, adjusting for interest expense, income tax, depreciation, and specific non-cash items Reconciliation of GAAP Net Income to EBITDA, EBITDAre, and Adjusted EBITDA (in thousands) | Metric | Q1 2024 | Q1 2023 | | :------------------------------------------ | :------ | :------ | | Net income | $8,358 | $9,188 | | Interest expense | $16,246 | $17,172 | | Income tax benefit | ($1,090) | ($226) | | Real estate related depreciation and amortization | $28,313 | $27,472 | | **EBITDA/EBITDAre** | **$51,827** | **$53,606** | | Non-cash lease expense and other amortization | $1,518 | $1,550 | | Hotel pre-opening costs | $234 | $216 | | **Adjusted EBITDA** | **$53,579** | **$55,372** | | Corporate expenses | $8,904 | $7,867 | | Interest (income) and other (income) expense, net | ($1,069) | ($423) | | **Hotel Adjusted EBITDA** | **$61,414** | **$62,816** | Full Year 2024 Guidance for Adjusted EBITDA (in thousands) | Metric | Low End | High End | | :------------------------------------------ | :------ | :------- | | Net income | $86,817 | $108,817 | | Interest expense | $66,183 | $65,183 | | Income tax expense | — | $1,000 | | Real estate related depreciation and amortization | $110,000 | $108,000 | | **EBITDA/EBITDAre** | **$263,000** | **$283,000** | | Non-cash lease expense and other amortization | $6,200 | $6,200 | | Hotel pre-opening costs | $800 | $800 | | **Adjusted EBITDA** | **$270,000** | **$290,000** | [Reconciliation of FFO and Adjusted FFO](index=10&type=section&id=Reconciliation%20of%20FFO%20and%20Adjusted%20FFO) Reconciliation tables illustrate the calculation of FFO and Adjusted FFO from net income for Q1 2024 and 2023, and for the full-year 2024 guidance, primarily by adding back real estate related depreciation and amortization and adjusting for non-cash lease expense and hotel pre-opening costs Reconciliation of GAAP Net Income to FFO and Adjusted FFO (in thousands) | Metric | Q1 2024 | Q1 2023 | | :------------------------------------------ | :------ | :------ | | Net income | $8,358 | $9,188 | | Real estate related depreciation and amortization | $28,313 | $27,472 | | **FFO** | **$36,671** | **$36,660** | | Distribution to preferred stockholders | ($2,454) | ($2,454) | | **FFO available to common stock and unit holders** | **$34,217** | **$34,206** | | Non-cash lease expense and other amortization | $1,518 | $1,550 | | Hotel pre-opening costs | $234 | $216 | | Fair value adjustments to interest rate swaps | — | $2,014 | | **Adjusted FFO available to common stock and unit holders** | **$35,969** | **$37,986** | | Adjusted FFO available to common stock and unit holders, per diluted share | $0.17 | $0.18 | Full Year 2024 Guidance for Adjusted FFO (in thousands) | Metric | Low End | High End | | :------------------------------------------ | :------ | :------- | | Net income | $86,817 | $108,817 | | Real estate related depreciation and amortization | $110,000 | $108,000 | | **FFO** | **$196,817** | **$216,817** | | Distribution to preferred stockholders | ($9,817) | ($9,817) | | **FFO available to common stock and unit holders** | **$187,000** | **$207,000** | | Non-cash lease expense and other amortization | $6,200 | $6,200 | | Hotel pre-opening costs | $800 | $800 | | **Adjusted FFO available to common stock and unit holders** | **$194,000** | **$214,000** | | Adjusted FFO available to common stock and unit holders, per diluted share | $0.91 | $1.00 | [Reconciliation of Comparable Operating Results](index=12&type=section&id=Reconciliation%20of%20Comparable%20Operating%20Results) The Company provides a reconciliation of actual revenues and Hotel Adjusted EBITDA to comparable figures for Q1 2024 and Q1 2023, specifically excluding pre-acquisition operating results for Chico Hot Springs Resort from the prior year to ensure comparability Reconciliation of Comparable Operating Results (Three Months Ended March 31, in thousands) | Metric | 2024 | 2023 | | :-------------------------------- | :----- | :----- | | Revenues | $256,423 | $243,553 | | Less: Hotel revenues from prior ownership | — | $3,481 | | **Comparable Revenues** | **$256,423** | **$247,034** | | Hotel Adjusted EBITDA | $61,414 | $62,816 | | Less: Hotel Adjusted EBITDA from prior ownership | — | $520 | | **Comparable Hotel Adjusted EBITDA** | **$61,414** | **$63,336** | | Hotel Adjusted EBITDA Margin | 23.95% | 25.79% | | **Comparable Hotel Adjusted EBITDA Margin** | **23.95%** | **25.64%** | [Hotel Adjusted EBITDA Reconciliation](index=18&type=section&id=Hotel%20Adjusted%20EBITDA%20Reconciliation) Detailed hotel-level reconciliations are provided for Q1 2024 and Q1 2023, showing how Hotel Adjusted EBITDA is derived from net income, depreciation, interest expense, and specific adjustments for each property Hotel Adjusted EBITDA Reconciliation - First Quarter 2024 (in thousands) | Hotel | Total Revenues | Net Income / (Loss) | Depreciation | Interest Expense | Adjustments | Hotel Adjusted EBITDA | | :------------------------------------------ | :------------- | :------------------ | :----------- | :--------------- | :---------- | :-------------------- | | Atlanta Marriott Alpharetta | $4,186 | $1,090 | $375 | $0 | $0 | $1,465 | | Bourbon Orleans Hotel | $4,991 | $1,314 | $874 | $0 | ($29) | $2,159 | | Cavallo Point, The Lodge at the Golden Gate | $9,847 | ($66) | $1,461 | $0 | $94 | $1,489 | | ... (partial list) ... | | | | | | | | Worthington Renaissance Fort Worth Hotel | $12,577 | $2,174 | $851 | $702 | $0 | $3,727 | | **Comparable Total** | **$256,423** | **$27,328** | **$28,313** | **$4,157** | **$1,518** | **$61,414** | Hotel Adjusted EBITDA Reconciliation - First Quarter 2023 (in thousands) | Hotel | Total Revenues | Net Income / (Loss) | Depreciation | Interest Expense | Adjustments | Hotel Adjusted EBITDA | | :------------------------------------------ | :------------- | :------------------ | :----------- | :--------------- | :---------- | :-------------------- | | Atlanta Marriott Alpharetta | $4,017 | $939 | $364 | $0 | $0 | $1,303 | | Bourbon Orleans Hotel | $5,064 | $1,429 | $837 | $0 | $6 | $2,272 | | Cavallo Point, The Lodge at the Golden Gate | $10,393 | $894 | $1,392 | $0 | $94 | $2,380 | | ... (partial list) | | | | | | | | Worthington Renaissance Fort Worth Hotel | $12,092 | $1,907 | $1,126 | $712 | $0 | $3,745 | | **Total** | **$243,553** | **$29,579** | **$27,472** | **$4,214** | **$1,550** | **$62,816** | | Add: Prior Ownership Results | $3,481 | $295 | $225 | $0 | $0 | $520 | | **Comparable Total** | **$247,034** | **$29,874** | **$27,697** | **$4,214** | **$1,550** | **$63,336** | [Supplemental Operating Information](index=14&type=section&id=Supplemental%20Operating%20Information) This section provides detailed historical and hotel-level comparable operating statistics for the first quarter of 2024 and prior periods [Selected Quarterly Comparable Operating Information](index=14&type=section&id=Selected%20Quarterly%20Comparable%20Operating%20Information) Presents a historical overview of key comparable operating metrics, including ADR, Occupancy, RevPAR, Total RevPAR, Revenues, and Hotel Adjusted EBITDA, for each quarter of 2023 and Q1 2024 Selected Quarterly Comparable Operating Information (2023 & Q1 2024) | Metric | Quarter 1, 2023 | Quarter 2, 2023 | Quarter 3, 2023 | Quarter 4, 2023 | Full Year 2023 | Quarter 1, 2024 | | :-------------------------- | :-------------- | :-------------- | :-------------- | :-------------- | :------------- | :-------------- | | ADR | $276.43 | $292.67 | $273.28 | $282.57 | $281.36 | $269.53 | | Occupancy | 66.9% | 76.6% | 76.4% | 68.4% | 72.1% | 68.4% | | RevPAR | $185.00 | $224.27 | $208.66 | $193.16 | $202.81 | $184.23 | | Total RevPAR | $282.28 | $333.24 | $310.54 | $294.05 | $305.08 | $288.92 | | Revenues (in thousands) | $247,034 | $295,059 | $278,162 | $263,547 | $1,083,802 | $256,423 | | Hotel Adjusted EBITDA (in thousands) | $63,336 | $94,335 | $80,492 | $64,817 | $302,980 | $61,414 | | Hotel Adjusted EBITDA Margin | 25.64% | 31.97% | 28.94% | 24.59% | 27.96% | 23.95% | | Available Rooms | 875,126 | 885,430 | 895,743 | 896,260 | 3,552,559 | 887,523 | [Operating Statistics – First Quarter (Hotel Level)](index=16&type=section&id=Operating%20Statistics%20%E2%80%93%20First%20Quarter%20%28Hotel%20Level%29) Provides granular operating statistics for each of the Company's 36 hotels for Q1 2024 compared to Q1 2023, detailing changes in ADR, Occupancy, and RevPAR Operating Statistics – First Quarter (Hotel Level) | Hotel | Rooms | 1Q 2024 ADR | 1Q 2023 ADR | ADR B/(W) 2023 | 1Q 2024 Occupancy | 1Q 2023 Occupancy | Occupancy B/(W) 2023 | 1Q 2024 RevPAR | 1Q 2023 RevPAR | RevPAR B/(W) 2023 | | :------------------------------------------ | :---- | :---------- | :---------- | :------------- | :------------------ | :------------------ | :------------------- | :------------- | :------------- | :---------------- | | Atlanta Marriott Alpharetta | 318 | $165.66 | $159.23 | 4.0% | 59.1% | 62.6% | (3.5)% | $97.96 | $99.61 | (1.7)% | | Bourbon Orleans Hotel | 220 | $261.57 | $260.14 | 0.5% | 76.6% | 80.9% | (4.3)% | $200.49 | $210.46 | (4.7)% | | Cavallo Point, The Lodge at the Golden Gate | 142 | $550.92 | $567.94 | (3.0)% | 51.0% | 52.7% | (1.7)% | $281.13 | $299.21 | (6.0)% | | ... (partial list) ... | | | | | | | | | | | | Worthington Renaissance Fort Worth Hotel | 504 | $209.20 | $196.60 | 6.4% | 69.9% | 74.1% | (4.2)% | $146.33 | $145.65 | 0.5% | | **Comparable Total** | **9,757** | **$269.53** | **$276.43** | **(2.5)%** | **68.4%** | **66.9%** | **1.5%** | **$184.23** | **$185.00** | **(0.4)%** | [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section includes a standard disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that could impact future results [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section serves as a cautionary note, indicating that the press release contains forward-looking statements subject to various known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations - The press release contains forward-looking statements identified by terms such as 'believe,' 'expect,' 'intend,' 'project,' 'forecast,' and 'plan,' including references to assumptions and forecasts of future results[18](index=18&type=chunk) - Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those anticipated[18](index=18&type=chunk) - Risks include the adverse impact of COVID-19, national and local economic conditions, operating risks, relationships with property managers, competition, and changes in travel patterns, taxes, and government regulations[18](index=18&type=chunk)

Jeffrey Donnelly Appointed Chief Executive Officer; Briony Quinn Appointed Chief Financial Officer; Justin Leonard Appointed President Appointments Capitalize on DiamondRock's Strong Bench and Proven Talent to Drive Continued Business Momentum Company Reaffirms 2024 Annual Guidance BETHESDA, Md., April 15, 2024 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH), a lodging-focused real estate investment trust that owns a portfolio of 36 premium hotels and resorts in the United State ...

BETHESDA, Md., March 14, 2024 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH) will report financial results for the first quarter 2024 after the market closes on Thursday, May 2, 2024. A conference call for investors and other interested parties is scheduled for the next day on Friday, May 3, 2024 at 9:00 a.m. Eastern Time (ET). The information to be discussed on the call will be contained in the Company's earnings release, which will be available in the Investor Relations sectio ...

BETHESDA, Md., March 4, 2024 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH) announced that its Board of Directors has declared a quarterly cash dividend of $0.03 per common share to be paid on April 12, 2024 to shareholders of record as of March 29, 2024.  The Company's Board of Directors also declared a quarterly dividend of $0.515625 per share on its 8.250% Series A Cumulative Redeemable Preferred Stock.  The dividend is payable on March 29, 2024 to shareholders of record as o ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) DiamondRock Hospitality Company, a self-advised REIT, owns 36 premium hotels and resorts, emphasizing aggressive asset management and sustainability - As of December 31, 2023, the company owns a portfolio of **36 premium hotels and resorts**, containing **9,746 guest rooms** across **25 U.S. markets**[26](index=26&type=chunk) - The company's business strategy involves aggressive asset management, prudent financial strategy, and disciplined capital allocation to high-quality lodging properties in North American urban and resort markets with high barriers-to-entry[28](index=28&type=chunk)[32](index=32&type=chunk) - DiamondRock operates through an UPREIT structure, where hotels are owned by its operating partnership, DiamondRock Hospitality Limited Partnership, with the company owning **99.7% of the common OP units**[54](index=54&type=chunk) - The company emphasizes corporate responsibility and was ranked **first in sustainability performance** as the America's Regional Listed Sector Leader for Hotels for the **fifth consecutive year** by the GRESB Real Estate Assessment in **2023**[46](index=46&type=chunk) - The hotel industry is highly competitive, with competition based on location, brand, price, and services, including alternative lodging like Airbnb and other institutional investors[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from volatile hotel operations, reliance on third-party managers, debt and interest rate challenges, and the critical requirements for maintaining REIT status - The business model is highly volatile due to its concentration in premium full-service hotels, which are sensitive to economic cycles, and the daily fluctuation of rates and occupancy[82](index=82&type=chunk)[83](index=83&type=chunk) - The company is highly dependent on third-party hotel management companies for daily operations and has limited ability to influence operating decisions, which could impact performance[117](index=117&type=chunk)[118](index=118&type=chunk) - A substantial number of hotels (**22 of 36**) operate under Marriott, Hilton, or IHG brands, creating a concentration risk tied to the performance and reputation of these three chains[121](index=121&type=chunk)[122](index=122&type=chunk) - The company faces significant refinancing risk, as most debt has large balloon payments at maturity, potentially forcing asset sales or default if refinancing is not on acceptable terms[150](index=150&type=chunk) - Failure to maintain REIT qualification would have severe adverse consequences, including being subject to corporate income tax and being unable to deduct dividends paid to stockholders[166](index=166&type=chunk)[167](index=167&type=chunk) [Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[206](index=206&type=chunk) [Cybersecurity](index=36&type=section&id=Item%201C.%20Cybersecurity) The company manages cybersecurity risk through external experts, internal oversight, regular risk assessments, and board-level governance - The company utilizes external experts, including a virtual Chief Information Security Officer (vCISO) and a virtual Chief Information Officer (vCIO), to guide its technology and security strategy[207](index=207&type=chunk) - A cyber risk management program assesses the cybersecurity maturity of third-party property managers operating the company's hotels[209](index=209&type=chunk) - The Audit Committee oversees cybersecurity risks, receiving regular reports from senior management, with the full Board also involved in risk oversight[211](index=211&type=chunk)[212](index=212&type=chunk) [Properties](index=38&type=section&id=Item%202.%20Properties) As of December 31, 2023, the company's portfolio includes 36 hotels with 9,746 rooms, managed by third-party operators, with most agreements terminable at will and some properties subject to debt or ground leases Portfolio Overview (as of December 31, 2023) | Metric | Value | | :--- | :--- | | Total Hotels | 36 | | Total Rooms | 9,746 | | Key Markets | Chicago, Boston, New York, San Diego, Fort Lauderdale, Washington D.C. | - The majority of hotel management agreements are terminable at will by the company, with four agreements (Chicago Marriott, Hilton Garden Inn NY/Times Square, Margaritaville Key West, Worthington Renaissance) being non-terminable[217](index=217&type=chunk) - Management fees typically consist of a base fee (**1-3.5% of gross revenues**) and an incentive fee based on operating profits exceeding a specified owner's priority return[219](index=219&type=chunk)[523](index=523&type=chunk) - Nineteen hotels operate under franchise agreements, primarily with Marriott, Hilton, and IHG, requiring royalty fees based on a percentage of gross room sales and, in some cases, food and beverage sales[223](index=223&type=chunk)[527](index=527&type=chunk) - As of year-end 2023, **four hotels** are encumbered by mortgage debt, and **eight hotels** are subject to ground lease agreements[228](index=228&type=chunk)[229](index=229&type=chunk) [Legal Proceedings](index=44&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine litigation, with management expecting no material adverse impact on financial condition or operations - The company is involved in routine litigation but does not expect the outcomes to materially and adversely impact its financial condition, net of insurance coverage[231](index=231&type=chunk) [Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[232](index=232&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=45&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE, with its five-year total return underperforming the S&P 500 but outperforming the Dow Jones U.S. Hotels Index, and it has an active share repurchase program Five-Year Cumulative Total Stockholder Return (2018-2023) | Company/Index | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | DiamondRock Hospitality | $100.00 | $129.66 | $96.55 | $112.46 | $96.94 | $112.76 | | S&P 500 Total Return | $100.00 | $131.49 | $155.68 | $200.37 | $164.08 | $207.21 | | Dow Jones U.S. Hotels Total Return | $100.00 | $109.70 | $73.24 | $87.06 | $81.38 | $99.96 | - The company has a share repurchase program with an authorized capacity of **$200.0 million**, with approximately **$185.3 million** remaining available as of December 31, 2023, and no shares repurchased in Q4 2023[247](index=247&type=chunk) - As of December 31, 2023, there were **2,903,835 securities** to be issued under equity compensation plans, primarily performance and deferred stock units with no exercise price[244](index=244&type=chunk) [Reserved](index=47&type=section&id=Item%206.%20Reserved) This item is not applicable - Not applicable[249](index=249&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, total revenues increased **7.3%** to **$1.075 billion**, while net income decreased due to higher interest expense, with the company maintaining strong liquidity and planning **$100 million** in 2024 capital improvements Revenue Comparison (in thousands) | Revenue Type | 2023 | 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Rooms | $717,447 | $681,269 | $36,178 | 5.3% | | Food and beverage | $259,757 | $238,234 | $21,523 | 9.0% | | Other | $97,663 | $82,000 | $15,663 | 19.1% | | **Total revenues** | **$1,074,867** | **$1,001,503** | **$73,364** | **7.3%** | Key Hotel Operating Statistics (2023 vs. 2022) | Metric | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Occupancy % | 72.1% | 68.3% | 3.8% | | ADR | $282.11 | $289.07 | (2.4)% | | RevPAR | $203.32 | $197.50 | 2.9% | - Total hotel operating expenses increased by **12.2%** to **$781.8 million** in 2023, primarily due to acquisitions, increased occupancy, higher labor costs, property tax assessments, and insurance premiums[272](index=272&type=chunk) - Interest expense increased by **70.0%** to **$65.1 million** in 2023, mainly due to rising interest rates on variable-rate term loans and mark-to-market adjustments on interest rate swaps[278](index=278&type=chunk) - The company maintains a conservative capital structure with **$1.2 billion of debt** outstanding and **32 of its 36 hotels** unencumbered by mortgage debt as of December 31, 2023[288](index=288&type=chunk) - For 2024, the company plans to spend approximately **$100 million** on capital improvements, including repositioning the Hilton Burlington and Bourbon Orleans hotels, and renovating the Westin San Diego Bayview[308](index=308&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk on its **$0.8 billion** variable-rate debt, mitigated by **$325 million** in interest rate swaps, with a **100 basis point** change impacting annual interest expense by approximately **$4.8 million** - The primary market risk is interest rate risk, with **$0.8 billion** of the **$1.2 billion** total debt at a variable interest rate[338](index=338&type=chunk) - The company holds interest rate swaps on **$325 million** of its variable-rate debt to manage interest rate volatility[338](index=338&type=chunk) - A **100 basis point (1%)** fluctuation in interest rates on the unhedged variable rate debt would impact annual earnings and cash flows by approximately **$4.8 million**[338](index=338&type=chunk) [Financial Statements and Supplementary Data](index=62&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item directs the reader to the company's financial statements, indexed on page F-1 - This item directs the reader to the company's financial statements, which are indexed on page F-1[339](index=339&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosures](index=62&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None reported[340](index=340&type=chunk) [Controls and Procedures](index=62&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the most recent fiscal quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[341](index=341&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, these controls[342](index=342&type=chunk) [Other Information](index=62&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[345](index=345&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=62&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[346](index=346&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=64&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's 2024 proxy statement - Information is incorporated by reference to the 2024 proxy statement[350](index=350&type=chunk) [Executive Compensation](index=64&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's 2024 proxy statement - Information is incorporated by reference to the 2024 proxy statement[351](index=351&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=64&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information for this item, including equity compensation plans, is incorporated by reference from the company's 2024 proxy statement - Information is incorporated by reference to the 2024 proxy statement[352](index=352&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=64&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information for this item is incorporated by reference from the company's 2024 proxy statement - Information is incorporated by reference to the 2024 proxy statement[353](index=353&type=chunk) [Principal Accountant Fees and Services](index=64&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information for this item is incorporated by reference from the company's 2024 proxy statement, with KPMG LLP serving as the independent public accounting firm - Information is incorporated by reference to the 2024 proxy statement[354](index=354&type=chunk) - The company's independent public accounting firm is KPMG LLP, McLean, Virginia, PCAOB Auditor ID: 185[355](index=355&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=65&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This item provides an index of all financial statements, schedules, and exhibits included with the 10-K filing, such as Schedule III - Real Estate and Accumulated Depreciation - This item provides an index of all financial statements, schedules, and exhibits included with the 10-K filing[358](index=358&type=chunk)[360](index=360&type=chunk) - Financial Statement Schedule III - Real Estate and Accumulated Depreciation is included in the filing[359](index=359&type=chunk) [Form 10-K Summary](index=67&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not applicable[363](index=363&type=chunk)