DiamondRock Hospitality Co

1. Organization

DiamondRock Hospitality Company (the “Company”, “we” or "our") is a lodging-focused real estate company that owns a portfolio of premium hotels and resorts. As of September 30, 2026, we owned 34 hotels with 9,400 guest rooms. Our portfolio is concentrated in major urban markets and destination resort locations. We are an owner, as opposed to an operator, of the hotels in our portfolio. As an owner, we receive all operating profits or losses generated by our hotels after we pay fees to the hotel managers and hotel brands, which are based on the revenues and profitability of the hotels. Each hotel is uniquely positioned to maximize the cash flow and value; accordingly, nearly 40% of our portfolio is operated as an independent hotel and the remainder is operated under a brand owned by one of the leading global lodging brand companies.

We are a real estate investment trust (“REIT”) for U.S. federal income tax purposes. We conduct our business through a traditional umbrella partnership real estate investment trust, or UPREIT, in which our hotel properties are owned by our operating partnership, DiamondRock Hospitality Limited Partnership, or subsidiaries of our operating partnership. The Company is the sole general partner of our operating partnership and owned 99.7% of the limited partnership units (“common OP units”) of our operating partnership as of September 30, 2026. The remaining 0.3% of the common OP units are held by third parties and executive officers of the Company. See Note 8 for additional disclosures related to common OP units.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). We have condensed or omitted certain disclosures normally included in annual financial statements presented in accordance with U.S. GAAP; however, we believe the disclosures made are adequate to prevent the information presented from being misleading. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2025. In our opinion, the accompanying consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. Interim results are not necessarily indicative of full-year performance, as a result of the impact of seasonal and other short-term variations and the acquisitions and/or dispositions of hotel properties.

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2024-03 (“ASU 2024-03”), Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2024-03.

3. Property and Equipment

Property and equipment consists of the following (in thousands):

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As of September 30, 2026 and December 31, 2025, we had accrued capital expenditures of $2.7 million and $2.5 million, respectively. During the three and nine months ended September 30, 2025, we recorded an impairment loss of $1.1 million related to the write-off of construction in progress that was determined not to be recoverable. No impairment loss was recorded during the three and nine months ended September 30, 2026.

4. Hotel Dispositions

On May 1, 2026, we sold the Courtyard New York Manhattan/Fifth Avenue for $33.0 million. We received net proceeds of $29.9 million from the transaction, which included customary working capital and other closing adjustments. During the nine months ended September 30, 2026, we recognized a pre-tax gain on sale of $31.4 million.

5. Debt

The following table sets forth information regarding the Company’s debt (dollars in thousands):

(1)As of September 30, 2026, the interest rate on the portion of variable-rate debt subject to interest rate swaps was 4.91%, and the interest rate on the remaining variable-rate debt was 5.22%.

(2)Maturity date may be extended fortwo additionalsix-month periods upon the payment of applicable fees and the satisfaction of certain customary conditions.

(3)Excludes debt issuance costs related to the revolving credit facility, which are included within Prepaid and Other Assets on the accompanying consolidated balance sheets.

(4)Includes the effect of interest rate swaps. See Note 6 for additional disclosures on interest rate swaps.

Senior Unsecured Credit Facility and Unsecured Term Loans

We are party to a Seventh Amended and Restated Credit Agreement (the “Credit Facility”) that provides for a $400.0 million revolving credit facility (the “Revolving Credit Facility”) andthree term loan facilities in the aggregate amount of $1.1 billion. The Revolving Credit Facility matures on January 22, 2030. The term loan facilities consist of a $500.0 million term loan that matures on January 3, 2028 (the “Term 1 Loan”), a $300.0 million term loan that matures January 22, 2030 (the “Term 2 Loan”) and a $300.0 million term loan that matures on January 22, 2029 (the “Term 3 Loan”). The maturity date of the Revolving Credit Facility, Term 1 Loan and Term 3 Loan may be extended fortwo additionalsix-month periods upon the payment of applicable fees and satisfaction of certain standard conditions. We have the right to increase the aggregate capacity of the Credit Facility to $1.8 billion upon the satisfaction of certain standard conditions. As of September 30, 2026, we had $400.0 million of borrowing capacity under the Revolving Credit Facility.

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Interest is paid on the periodic advances on the Revolving Credit Facility and amounts outstanding on the term loans at varying rates, based upon the Secured Overnight Financing Rate (“SOFR”), as defined in the Credit Facility, plus an applicable margin. The applicable margin is based upon our leverage ratio, as follows:

The Credit Facility contains various financial covenants. A summary of the most significant covenants is as follows:

(1)Leverage ratio is net indebtedness, as defined in the Credit Facility, divided by total asset value, defined in the Credit Facility as the value of our owned hotels based on hotel net operating income divided by a defined capitalization rate.

(2)Fixed charge coverage ratio is Adjusted EBITDA, generally defined in the Credit Facility as EBITDA less FF&E reserves, for the most recent trailing 12 month period, to fixed charges, which is defined in the Credit Facility as interest expense, all regularly scheduled principal payments and payments on capitalized lease obligations, for the same 12 month period.

The components of the Company’s interest expense consist of the following (in thousands):

(1)Represents interest expense related to the Courtyard New York Manhattan/Fifth Avenue ground lease, which was sold on May 1, 2026, and the L’Auberge de Sedona lease. Following a July 2026 extension of the lease term, the L’Auberge de Sedona lease was reclassified from an operating lease to a finance lease.

6. Derivatives

We have the following derivatives (dollars in thousands):

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Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During the nine months ended September 30, 2026, such derivatives were used to hedge the variable cash flows associated with variable-rate debt.

The table below details the location in the consolidated financial statements of the gains and losses recognized related to derivative financial instruments (in thousands):

During the next 12 months, we estimate that $4.1 million will be reclassified from other comprehensive income as a decrease to interest expense.

7. Fair Value Measurements

The fair value of certain financial assets and liabilities and other financial instruments is as follows (in thousands):

(1)The carrying amount of debt is net of unamortized debt issuance costs.

We have determined that the fair values of debt and interest rate swaps are classified as Level 2 measurements within the fair value hierarchy. We estimate the fair value of the interest rate swaps based on the interest rate yield curve and implied market volatility as inputs and adjusted for the counterparty’s credit risk. We concluded the inputs for the credit risk valuation adjustment are Level 3 inputs; however, these inputs are not significant to the fair value measurement in its entirety.

The fair values of our other financial instruments not included in the table above are estimated to be equal to their carrying amount.

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8. Equity

Common Shares

We are authorized by our charter to issue up to 400 million shares of common stock, $0.01 par value per share. Each outstanding share of common stock entitles the holder toone vote on all matters submitted to a vote of stockholders. Holders of our common stock are entitled to receive dividends out of assets legally available for the payment of dividends when authorized by our board of directors.

In August 2024, our board of directors approved an “at-the-market” equity offering program (the “ATM Program”), pursuant to which we may issue and sell shares of our common stock from time to time, having an aggregate offering price of up to $200.0 million. No shares were sold under the ATM Program during the nine months ended September 30, 2026.

In April 2026, our board of directors authorized the repurchase of up to $300 million of our common stock under a new share repurchase program effective May 1, 2026 (the “Share Repurchase Program”). The Share Repurchase Program replaced our prior $200 million share repurchase program that was authorized in May 2024. The timing and actual number of shares repurchased will depend on a variety of factors, including price and general business and market conditions. The Share Repurchase Program does not obligate us to acquire any particular amount of shares, and may be suspended or discontinued at any time at our discretion. The Share Repurchase Program will expire on May 1, 2028. During the nine months ended September 30, 2026, we repurchased 189,265 shares of common stock at an average price of $9.79 per share for a total purchase price of $1.9 million. During the nine months ended September 30, 2025, we repurchased 4,597,942 shares of common stock at an average price of $7.71 per share for a total purchase price of $35.5 million under our prior $200 million share repurchase program. As of November 3, 2026, we have $299.4 million of authorized capacity remaining under the Share Repurchase Program.

Preferred Shares

We are authorized by our charter to issue up to 10 million shares of preferred stock, $0.01 par value per share. Our board of directors is required to set for each class or series of preferred stock the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, and terms or conditions of redemption.

On December 31, 2025, we redeemed all 4,760,000 outstanding shares of our 8.250% Series A Cumulative Redeemable Preferred Stock. As of September 30, 2026 and December 31, 2025, we had no preferred stock issued or outstanding.

Operating Partnership Units

In connection with our acquisition of Cavallo Point, The Lodge at the Golden Gate in December 2018, we issued 796,684 common OP units to third parties, otherwise unaffiliated with the Company, then valued at $11.76 per unit. Each common OP unit is redeemable at the option of the holder. Holders of common OP units have certain redemption rights, which enable them to cause our operating partnership to redeem their units in exchange for cash per unit equal to the market price of our common stock, at the time of redemption, or, at our option, for shares of our common stock on aone-for-one basis, subject to adjustment upon the occurrence of stock splits, mergers, consolidations or similar pro-rata share transactions. As of September 30, 2026, there were 421,244 common OP units still outstanding; the other 375,440 common OP units issued in connection with the acquisition have been converted to common stock.

Long-Term Incentive Partnership units (“LTIP units”), which are also referred to as profits interest units, may be issued to eligible participants under the 2024 Equity Incentive Plan for the performance of services to or for the benefit of our operating partnership. LTIP units are a class of partnership unit in our operating partnership and will receive, whether vested or not, the same per-unit distributions as the outstanding common OP units, which equal per-share dividends on shares of our common stock. Initially, LTIP units have a capital account balance of zero, do not receive an allocation of operating income (loss), and do not have full parity with common OP units with respect to liquidating distributions. If such parity is reached, vested LTIP units are converted into an equal number of common OP units, and thereafter will possess all of the rights and interests of common OP units, including the right to exchange the common OP units for cash per unit equal to the market price of our common stock, at the time of redemption, or, at our option, for shares of our common stock on aone-for-one basis, subject to adjustment upon the occurrence of stock splits, mergers, consolidations or similar pro-rata share transactions. See Note 9 for additional disclosures related to LTIP units.

There were 543,096 and 1,041,362 common OP units held by third parties and executive officers of the Company as of September 30, 2026 and December 31, 2025, respectively. During the nine months ended September 30, 2026,544,975

-12 common OP units were redeemed and converted to common stock. There were 46,709 and 93,418 unvested LTIP units outstanding as of September 30, 2026 and December 31, 2025, respectively.

Dividends and Distributions

During 2026, we paid the following dividends to holders of our common stock and common OP units:

9. Equity Incentive Plans

We are authorized to issue up to 7,900,000 shares of our common stock under our 2024 Equity Incentive Plan (the “2024 Plan”), of which we have issued or committed to issue 4,114,300 shares as of September 30, 2026. Shares underlying awards that are granted under the 2024 Plan that are forfeited, canceled, reacquired prior to vesting, satisfied without the issuance of stock or otherwise terminated (other than by exercise), including shares tendered or held back upon settlement of an award, other than a stock option or stock appreciation right, to cover the tax withholding will be added back to the shares available for issuance under the 2024 Plan.

Restricted Stock Awards

Restricted stock awards issued to our officers and employees generally vest over athree tofive year period from the date of grant based on continued employment. We measure compensation expense for the restricted stock awards based upon the fair market value of our common stock at the date of grant. Compensation expense is recognized on a straight-line basis over the vesting period and is included in corporate expenses in the accompanying consolidated statements of operations and comprehensive income. A summary of our restricted stock awards from January 1, 2026 to September 30, 2026 is as follows:

The total unvested restricted stock awards as of September 30, 2026 are expected to vest as follows:418,056 during 2027,315,950 during 2028, and 153,727 during 2029. As of September 30, 2026, the unrecognized compensation cost related to restricted stock awards was $6.0 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 24 months. We recorded $0.9 million and $3.0 million of compensation expense related to restricted stock awards for the three and nine months ended September 30, 2026, respectively. We recorded $0.9 million and $2.3 million of compensation expense related to restricted stock awards for the three and nine months ended September 30, 2025, respectively.

Performance Stock Units

Performance stock units (“PSUs”) are restricted stock units that generally vest three years from the date of grant. Each executive officer is granted a target number of PSUs (the “PSU Target Award”). For PSUs granted in 2025 and 2026, the actual number of shares of common stock issued to each executive officer is based on the Company’s achievement of certain levels of total stockholder return relative to the total stockholder return of a peer group of publicly-traded lodging REITs measured over athree-year performance period. There is no payout of shares of our common stock if our total stockholder return falls below the 30 th percentile of the total stockholder returns of the peer group. The maximum number of shares of common stock issued to an executive officer is equal to 300% of the PSU Target Award and is earned if our total stockholder return is equal to or

-13 greater than the 90 th percentile of the total stockholder returns of the peer group. There are limitations on the number of PSUs earned if the Company’s total stockholder return is negative for the performance period.

We measure compensation expense for the PSUs based upon the fair market value of the award at the grant date. Compensation expense is recognized on a straight-line basis over the vesting period and is included in corporate expenses in the accompanying consolidated statements of operations and comprehensive income. The grant date fair value is determined using a Monte Carlo simulation performed by a third-party valuation firm. The determination of the grant-date fair values of our outstanding PSUs as of September 30, 2026 included the following assumptions:

(1)There were no hotel market share PSUs granted in 2025 and 2026.

A summary of our PSUs from January 1, 2026 to September 30, 2026 is as follows:

(1)The number of shares of common stock earned for the PSUs vested in 2026 was equal to 102.21% of the PSU Target Award.

The total unvested PSUs as of September 30, 2026 are expected to vest as follows:443,584 during 2027,650,774 during 2028, and 514,052 during 2029. The number of shares earned upon vesting is subject to the attainment of the performance targets described above. As of September 30, 2026, the unrecognized compensation cost related to the PSUs was $7.6 million and is expected to be recognized on a straight-line basis over a weighted average period of 23 months. We recorded $1.6 million and $3.4 million of compensation expense related to the PSUs for the three and nine months ended September 30, 2026, respectively. We recorded $0.9 million and $2.2 million of compensation expense related to the PSUs for the three and nine months ended September 30, 2025, respectively.

LTIP Units

LTIP units are designed to offer executives a long-term incentive comparable to restricted stock, while potentially allowing them a more favorable income tax treatment. Each year, executives have the option to elect to receive their annual grant of share-based compensation as either LTIP units or restricted stock awards. Each LTIP unit awarded is deemed equivalent to an award ofone share of common stock reserved under the 2016 Plan or 2024 Plan, as applicable. At the time of award, LTIP units do not have full economic parity with common OP units, but can achieve such parity over time upon the occurrence of specified events in accordance with partnership tax rules.

A summary of our LTIP units from January 1, 2026 to September 30, 2026 is as follows:

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(1)As of September 30, 2026, all vested LTIP units have achieved economic parity with common OP units and have been converted to common OP units.

The remaining 46,709 unvested LTIP units as of September 30, 2026 are all expected to vest during 2027. As of September 30, 2026, the unrecognized compensation cost related to LTIP unit awards was $0.2 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 8 months. We recorded $0.1 million and $0.3 million of compensation expense related to LTIP unit awards for both the three and nine months ended September 30, 2026 and 2025, respectively.

Nonemployee Director Awards

We issue each nonemployee director either (i) fully vested, unrestricted shares of common stock or (ii) Deferred Stock Units (as defined in the 2024 Plan) granting a number of immediately vested but deferred stock units (together, the “nonemployee director awards”). We measure compensation expense for the nonemployee director awards based upon the fair market value of our common stock at the date of grant. Compensation expense is recognized in the period the nonemployee director awards are granted and is included in corporate expenses in the accompanying consolidated statements of operations and comprehensive income.

There wereno nonemployee director awards granted during the three months ended September 30, 2026 and 2025, and

thusno compensation expense was recognized during these periods. During the nine months ended September 30, 2026, we granted a total of 75,271 nonemployee director awards at a grant date fair value of $10.23. We recorded $0.8 million and $0.9 million of compensation expense related to nonemployee director awards for the nine months ended September 30, 2026 and 2025, respectively.

10. Earnings Per Share

The following is a reconciliation of the calculation of basic and diluted earnings per share (“EPS”):

The common OP units held by the noncontrolling interest holders have been excluded from the denominator of the basic and diluted EPS calculation as there would be no effect on the amounts since the common OP units’ share of income or loss would also be added or subtracted to derive net income available to common stockholders.

11. Segment Reporting

We haveone reportable segment, which is hotel ownership. The hotel ownership segment is mostly comprised of upper upscale and luxury chain scale hotels that offer hotel rooms, food and beverage and other ancillary guest services. The Company’s chief operating decision maker (“CODM”) is the Executive Committee which includes: 1) the Chief Executive

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Officer, 2) the President and Chief Operating Officer, 3) the Executive Vice President, Chief Financial Officer & Treasurer, and 4) the Senior Vice President, General Counsel & Corporate Secretary.

The CODM evaluates the hotel ownership segment primarily based on hotel adjusted earnings (loss) before interest income and expense, taxes and depreciation and amortization (“Hotel Adjusted EBITDA”). The CODM uses Hotel Adjusted EBITDA to evaluate the ongoing operational performance of our hotels and effectiveness of the third-party management companies operating our business on a property-level basis, in order to make informed decisions on how to allocate resources. Hotel Adjusted EBITDA is also used to monitor budget versus actual results. The monitoring of budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation. Hotel Adjusted EBITDA, presented herein, is calculated as EBITDA from hotel operations, adjusted to exclude the following items that are not reflective of our ongoing operating performance or incurred in the normal course of business, and thus excluded from the CODM’s analysis in making day-to-day operating decisions:

▪Non-cash lease expense and other amortization

▪Cumulative effect of a change in accounting principles

▪Gains or losses from debt extinguishment

▪Hotel acquisition costs

▪Severance costs

▪Hotel manager transition items

▪Hotel pre-opening costs

▪Impairment losses, gains or losses on asset sales and casualty gains or losses; and

▪Other items that we believe are not representative of our current or future operating performance.

The following table presents revenues for our hotel ownership segment reconciled to our consolidated amounts and Hotel Adjusted EBITDA reconciled to consolidated net income (in thousands):

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(1)Other hotel expenses is principally comprised of cash payments for leases and property insurance.

(2)Excludes the amortization of unfavorable management contracts.

The following table presents total assets for our hotel ownership segment, reconciled to total consolidated assets (in thousands):

Total capital expenditures related to our hotel ownership segment were $18.3 million and $55.3 million for the three and nine months ended September 30, 2026, respectively. Total capital expenditures related to our hotel ownership segment were $19.7 million and $60.9 million for the three and nine months ended September 30, 2025, respectively.

12. Commitments and Contingencies

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Litigation

We are subject to various claims, lawsuits and legal proceedings, including routine litigation arising in the ordinary course of business regarding the operation of our hotels and other Company matters. While it is not possible to ascertain the ultimate outcome of such matters, management believes that the aggregate amount of such liabilities, if any, in excess of amounts covered by insurance will not have a material adverse impact on our financial condition or results of operations and comprehensive income. The outcome of claims, lawsuits and legal proceedings brought against the Company, however, is subject to significant uncertainties.

13. Subsequent Events

On October 1, 2026, we completed the acquisition of The Bellmoor Inn & Spa, a 79-room hotel located in Rehoboth Beach, Delaware, for $31.0 million. The acquisition was funded with corporate cash. We had paid a $1.5 million nonrefundable deposit related to this acquisition, which was included in Prepaid and other assets on our consolidated balance sheet as of September 30, 2026.

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