UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

February 28, 2008

DiamondRock Hospitality Company

(Exact name of registrant as specified in charter)

6903 Rockledge Drive, Suite 800
Bethesda,  MD 20817
(Address of Principal Executive Offices)  (Zip Code)

(240) 744-1150
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02.  Results of Operations and Financial Condition

The information in this Current Report on Form 8-K is furnished under Item 2.02 - “Results of Operations and Financial Condition.” Such information, including the exhibits attached hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

On February 28, 2008, DiamondRock Hospitality Company (the “Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2007. The text of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

ITEM 9.01.  Financial Statements and Exhibits.

(d)       Exhibits.

See Index to Exhibits attached hereto.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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EXHIBIT INDEX

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Exhibit 99.1

COMPANY CONTACT

Mark W. Brugger

(240) 744-1150

FOR IMMEDIATE RELEASE

THURSDAY, FEBRUARY 28, 2008

DIAMONDROCK HOSPITALITY COMPANY REPORTS STRONG FOURTH QUARTER AND FULL YEAR 2007 RESULTS AND INCREASES DIVIDEND

BETHESDA, Maryland, February 28, 2008 — DiamondRock Hospitality Company (the “Company”) (NYSE: DRH) today announced results of operations for its fourth fiscal quarter and the year ended December 31, 2007.  The Company is a lodging focused real estate investment trust that owns and acquires premium hotels in North America.

Fourth Quarter 2007 Highlights

·                  RevPAR: The Company’s same-store RevPAR increased 9.5 percent.

·                  Hotel Adjusted EBITDA Margins: The Company’s same-store Hotel Adjusted EBITDA margins increased 136 basis points.

·                  Adjusted EBITDA: The Company’s Adjusted EBITDA increased 51% to $67.7 million.

·                  Adjusted FFO: The Company’s Adjusted FFO increased 55% to $47.6 million and Adjusted FFO per diluted share increased 25% to $0.50.

·                  Dividend: The Company declared a quarterly dividend of $0.24 per share during the fourth quarter.

·                  Sale of Hotel: On December 21, 2007, the Company sold the SpringHill Suites Atlanta Buckhead to a private equity firm for $36.0 million.  The sales price represented a capitalization rate of 5.5% and a 15.9 times multiple on trailing 2007 Net Operating Income and EBITDA, respectively.

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Full Year 2007 Highlights

·                  RevPAR: The Company’s same-store RevPAR increased 9.8 percent.

·                  Hotel Adjusted EBITDA Margins: The Company’s same-store Hotel Adjusted EBITDA margins increased 162 basis points.

·                  Adjusted EBITDA: The Company’s Adjusted EBITDA increased 51% to $202.2 million.

·                  Adjusted FFO: The Company’s Adjusted FFO increased 56% to $145.8 million and Adjusted FFO per diluted share increased by 12% to $1.55.

·                  Amended Credit Facility: The Company amended and expanded its senior unsecured credit facility, increasing the Company’s borrowing capacity from $75 million to $200 million and reducing its borrowing cost with a 37% lower interest rate spread.

·                  Dividend: The Company increased the quarterly dividend by 33% to $0.24 per share.

·                  Acquisition: The Company acquired the Westin Boston Waterfront Hotel for $330 million.

·                  Equity Offering: The Company completed a successful equity offering raising $317.9 million.

·                  Capital Expenditures: The Company invested $64 million in capital expenditures to improve its hotels.

William W. McCarten, chairman and chief executive officer, stated: “DiamondRock’s fourth quarter and full year 2007 results reflect outstanding year-over-year growth and are among the best in the industry.  We were particularly pleased with our ability to improve our overall portfolio with the acquisition of the Westin Boston Waterfront Hotel in January 2007 and the sale of our lowest RevPAR hotel at an excellent price in December.  For 2008, there is much economic uncertainty and visibility remains low.  Based on the current macro economic indicators, we expect RevPAR to increase 2 to 5 percent for our portfolio with modest profit growth.  We will continue to closely monitor the performance of our hotels and work aggressively with our operators to maximize profits regardless of the economic environment.”

Operating Results

Please see “Certain Definitions” and “Non-GAAP Financial Measures” attached to this press release for an explanation of the terms “EBITDA,” “Adjusted EBITDA,” “Hotel Adjusted EBITDA Margins,” “FFO,” “Adjusted FFO” and “same-store.”  Moreover, the discussions of RevPAR and Hotel Adjusted EBITDA Margins exclude the Westin Boston Waterfront Hotel for the time period of January 1 through June 21 due to the fact that this hotel was opened in June 2006 and there are no comparable statistics for the same period in the prior year and the SpringHill Suites Atlanta Buckhead for the period of December 21 through December 31 due to the fact that this hotel was sold on December 21, 2007.

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For the fourth quarter, beginning September 8, 2007 and ended December 31, 2007, the Company reported the following:

·                  Revenues of $236.1 million compared to $168.9 million for the comparable period in 2006.

·                  Adjusted EBITDA of $67.7 million compared to $44.8 million for the comparable period in 2006.

·                  Adjusted FFO and Adjusted FFO per diluted share of $47.6 million and $0.50, respectively, compared to $30.7 million and $0.40, respectively, for the comparable period in 2006.

·                  Net income of $25.1 million (or $0.26 per diluted share) compared to $10.5 million (or $0.14 per diluted share) for the comparable period in 2006.

Same-store RevPAR for the fourth quarter increased 9.5 percent to $131.69 from $120.31 for the comparable period in 2006, driven by a 4.3 percent increase in the average daily rate and a 3.3 percentage point increase in occupancy (from 67.9 percent to 71.2 percent). Same-store Hotel Adjusted EBITDA margins for our hotels increased 136 basis points over the same period in the prior year.

For the full year 2007, the Company reported the following:

·                  Revenues of $717.4 million compared to $491.9 million for the comparable period in 2006.

·                  Adjusted EBITDA of $202.2 million compared to $133.9 million for the comparable period in 2006.

·                  Adjusted FFO and Adjusted FFO per diluted share of $145.8 million and $1.55, respectively, compared to $93.6 million and $1.38, respectively, for the comparable period in 2006.

·                  Net income of $68.3 million (or $0.72 per diluted share) compared to $35.2 million (or $0.51 per diluted share) for the comparable period in 2006.

Same-store RevPAR for the full year 2007 increased 9.8 percent to $130.21 from $118.64 for the comparable period in 2006, driven by a 6.2 percent increase in the average daily rate and a 2.4 percentage point increase in occupancy (from 71.7 percent to 74.1 percent). Full year 2007 same-store Hotel Adjusted EBITDA margins for our hotels increased 162 basis points over the same period in the prior year.

The full year results were impacted by the following:

·                  The Company incurred $0.6 million of expenses during 2007 related to exploring strategic alternatives during the year.

·                  The Company recognized $0.9 million of yield support for the Oak Brook Hills Marriott Resort and the SpringHill Suites Atlanta Buckhead in 2007.  The Company is not entitled to any further yield support at any of its hotels in 2008.

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·                  The Company refinanced the Bethesda Marriott Suites mortgage debt during 2007.  The refinancing allowed the Company to lower its interest rate on the associated debt.  Under the terms of the existing management agreement, the refinancing eliminated almost $0.7 million of 2007 incentive management fees that otherwise would have been due to the hotel manager.  In addition, the Company recorded a net refinancing gain of $0.4 million, which is comprised of the reversal of the $2.5 million debt premium offset by the $2.0 million prepayment penalty and the write-off of deferred financing costs of $0.1 million.  The reported Adjusted EBITDA and Adjusted FFO amounts exclude this net gain but include the benefit from the elimination of the incentive management fee.

·                  On December 21, 2007, the Company sold the SpringHill Suites Atlanta Buckhead to a private equity firm for $36.0 million.  The sale resulted in a gain of approximately $3.8 million, net of $0.1 million of income taxes.  The reported Adjusted EBITDA and Adjusted FFO amounts exclude the net gain on the sale, but include the 2007 operating results of the hotel through our period of ownership ending December 20, 2007.

Operating Results Compared to Prior Guidance

The following is a chart showing our actual full year 2007 results compared to our guidance for the full year 2007:

Balance Sheet

As of year-end, the Company had total assets of approximately $2.1 billion. Cash and cash equivalents were $61.5 million, including $31.7 million of restricted cash.

As of year-end, the Company had total debt of approximately $824.5 million, comprised entirely of limited recourse, property-specific mortgages.  The Company’s debt has a weighted average interest rate of 5.6 percent and a weighted average maturity of 7.6 years as of year-end.  Eight of the Company’s 20 hotels were unencumbered by mortgage debt as of year-end.  The Company has a $200 million senior unsecured credit facility and, as of year-end, had no outstanding borrowings against it.

As of the year-end, the Company continued to own 100% of its properties directly and has never issued operating partnership units or preferred stock.

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Outlook

The Company is providing full year guidance at this time and intends to update the full year guidance in conjunction with reporting each quarter’s financial results.

The Company expects its portfolio of hotels to achieve 2008 same-store RevPAR growth of 2 to 5 percent.  We expect that the revenue disruption attributable to the renovations at the Chicago Marriott Downtown will negatively impact the Company’s full year RevPAR growth by 1.0 percentage point. Additionally, 2008 profit growth is constrained by the disruption from the renovations at the Chicago Marriott Downtown, which we expect will reduce the Company’s first quarter and full-year Adjusted EBITDA by approximately $2 million, as well as by labor cost pressures in several markets.  In addition, 2008 is not comparable to 2007 for the following reasons:

·                  the Company received $0.8 million of yield support at the Oak Brook Hills Marriott in 2007 and is not entitled to receive any additional yield support in 2008;

·                  the debt refinancing created a one-time elimination of the incentive management fee at the Bethesda Marriott Suites of $0.7 million in 2007;

·                  the sale of the SpringHill Suites Atlanta Buckhead, which contributed $2.4 million of Hotel Adjusted EBITDA in 2007; and

·                  interest income is expected to be approximately $1.0 million lower in 2008.

Based on the Company’s RevPAR expectations, we provide the following full year guidance:

·                  Hotel Adjusted EBITDA Margins will range from negative 100 basis points to flat to our 2007 Hotel Adjusted EBITDA Margins.

·                  Adjusted EBITDA of $196.0 million to $209.5 million.

·                  Adjusted FFO of $152.7 million to $160.9 million.

·                  Adjusted FFO per share of $1.60 to $1.69 based on 95.4 million diluted weighted average shares.

During the first quarter of 2008, we expect same-store RevPAR to range from flat to a decrease of approximately 1 percent.  Even with the Chicago Marriott Downtown generating $4 million less in EBITDA during the first quarter of 2008 from the disruption and a weak market, we expect Adjusted EBITDA to be approximately $28 million to $30 million.  In addition, we expect Adjusted FFO per diluted share to be approximately $0.21 to $0.24.

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Dividends for Fourth Quarter 2007

On January 10, 2008, a cash dividend of $0.24 per share was paid to shareholders of record as of December 31, 2007, the last day of our fiscal year.

Increased Dividend for First Quarter 2008

The Board of Directors has approved a 4.2% increase (or $0.01 per share) in the 2008 quarterly dividend.  On April 1, 2008, a cash dividend of $0.25 per share will be paid to shareholders of record as of March 21, 2008.

Major Capital Expenditures

DiamondRock has made and continues to make significant capital investments in its hotels.  In 2007, the Company completed over $64 million of capital improvements at its hotels.  In 2008, the Company plans to commence or complete approximately $70 to $80 million of capital improvements at its hotels.  The most significant ongoing capital projects are as follows:

·                  Chicago Marriott Downtown:  The Company is currently completing a $35 million renovation of the hotel.  The renovation includes a complete redo of all the meeting and ballrooms, adding 17,000 square feet of new meeting space, reconcepting and relocating the restaurant, expanding the lobby bar and creating a Marriott “great room” in the lobby.  The work began during the third quarter of 2007 and will be completed in the first half of 2008.  The estimated disruption of approximately $2 million to Hotel Adjusted EBITDA, mainly associated with the ballroom renovations, will occur primarily in the first quarter of 2008.

·                  Westin Boston Waterfront: The Company is currently completing the construction of additional meeting rooms in the building attached to the hotel.  The project includes the creation of over 37,000 square feet of meeting and exhibition space.  The project will be completed in the first quarter of 2008 and is expected to cost $19 million.

·                  Salt Lake City Marriott: The Company plans to significantly renovate the guestrooms at the hotel in late 2008.

·                  Chicago Conrad: The Company plans to renovate the guestrooms, meeting room corridor carpets and the front entrance of the hotel during 2008.

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Earnings Call

The Company will host a conference call to discuss its fourth quarter and full year 2007 results and its 2008 guidance on Friday, February 29, 2008, at 10:00 am Eastern Time (ET).  To participate in the live call, investors are invited to dial 1-888-679-8018 (for domestic callers) or 617-213-4845 (for international callers).  The participant passcode is 17730194. A live webcast of the call will be available via the investor relations section of DiamondRock Hospitality Company’s website at www.drhc.com. A replay of the webcast will also be archived on the website for 30 days.

About the Company

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of premium hotel properties.  DiamondRock owns 20 hotels with approximately 9,600 guestrooms.  For further information, please visit DiamondRock Hospitality Company’s website at www.drhc.com.

This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “continue” and other similar terms and phrases, including references to assumptions and forecasts of future results.  Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made.  These risks include, but are not limited to: national and local economic and business conditions, including the potential for additional terrorist attacks, that will affect occupancy rates at our hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements; relationships with property managers; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; our ability to complete planned renovation on budget; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; our ability to complete acquisitions; our ability to raise equity capital; the performance of acquired properties after they are acquired; necessary capital expenditures on the acquired properties; and our ability to continue to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes; and other risks and uncertainties associated with our business described from time to time in our filings with the Securities and Exchange Commission.  Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of the date of this release, and we undertake no obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations.

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Reporting Periods for Statement of Operations

The results we report in our consolidated statements of operations are based on results of our hotels reported to us by our hotel managers. Our hotel managers use different reporting periods. Marriott International, the manager of the majority of our hotel properties, uses a fiscal year ending on the Friday closest to December 31 and reports twelve weeks of operations for the first three quarters and sixteen or seventeen weeks for the fourth quarter of the year for its domestic managed hotels. In contrast, Marriott International for its non-domestic hotels (including Frenchman’s Reef), Noble Management Group, LLC, our manager of the Westin Atlanta North, Vail Resorts, our manager of the Vail Marriott, Hilton Hotels Corporation, our manager of the Conrad Chicago, and Westin Hotel Management, L.P., our manager of the Westin Boston Waterfront report results on a monthly basis. Additionally, the Company, as a REIT, is required by tax law to report results on a calendar year. As a result, the Company has adopted the reporting periods used by Marriott International for its domestic hotels, except that the fiscal year always ends on December 31 to comply with REIT rules. The first three fiscal quarters end on the same day as Marriott International’s fiscal quarters but our fourth quarter ends on December 31 and our full year results, as reported in our statement of operations, always include the same number of days as the calendar year.

Two consequences of the reporting cycle we have adopted are: (1) quarterly start dates will usually differ between years, except for the first quarter which always commences on January 1, and (2) our first and fourth quarters of operations and year-to-date operations may not include the same number of days as reflected in prior years.

While the reporting calendar we adopted is more closely aligned with the reporting calendar used by the manager of a majority of our properties, one final consequence of our calendar is we are unable to report any results for Frenchman’s Reef, Westin Atlanta North, Vail Marriott, Conrad Chicago, or for the Westin Boston Waterfront for the month of operations that ends after our fiscal quarter-end because neither Vail Resorts, Noble Management Group, LLC,  Hilton Hotels Corporation, Westin Hotel Management, L.P., nor Marriott International make mid-month results available to us. As a result, our quarterly results of operations include results from Frenchman’s Reef, Westin Atlanta North, Vail Marriott, Conrad Chicago, and the Westin Boston Waterfront as follows: first quarter (January and February), second quarter (March to May), fourth quarter (June to August) and fourth quarter (September to December). While this does not affect full-year results, it does affect the reporting of quarterly results.

Ground Leases

Four of the Company’s hotels are subject to ground leases: Bethesda Marriott Suites, Courtyard Manhattan Fifth Avenue, Salt Lake City Downtown Marriott, and the Westin Boston Waterfront.  In addition, part of a parking structure at a fifth hotel and two golf courses at two additional hotels are also subject to ground leases.  In accordance with GAAP, the Company records rent expense on a straight-line basis for ground leases that provide minimal rental payments that increase in pre-established amounts over the remaining term of the ground lease.  For the fourth quarter 2007, contractual cash rent payable on the ground leases totaled $0.6 million and the Company recorded approximately $3.0 million in ground rent expense.  The non-cash portion of ground rent expense recorded for the fourth fiscal quarter was $2.4 million.  For the full year 2007, contractual cash rent payable on ground leases totaled $1.9 million and the Company recorded approximately $9.7 million in ground rent expense. The non-cash portion of ground rent expense recorded for the full year 2007 was $7.8 million.

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DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED BALANCE SHEETS

As of December 31, 2007 and 2006

(in thousands, except share amounts)

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DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

Fiscal Quarters Ended December 31, 2007 and 2006

 (in thousands, except share and per share amounts)

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DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31, 2007 and 2006

(in thousands, except share and per share amounts)

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DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2007 and 2006

(in thousands)

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DIAMONDROCK HOSPITALITY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Years Ended December 31, 2007 and 2006

(in thousands)

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Non-GAAP Financial Measures

We use the following four non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance: (1) EBITDA, (2) Adjusted EBITDA, (3) FFO and (4) Adjusted FFO.

EBITDA represents net income excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sale of assets; and (3) depreciation and amortization. We believe EBITDA is useful to an investor in evaluating our operating performance because it helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization) from our operating results. We also use EBITDA as one measure in determining the value of hotel acquisitions and dispositions.

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We also evaluate our performance by reviewing Adjusted EBITDA because we believe that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information regarding our ongoing operating performance and that the presentation of Adjusted EBITDA, when combined with the primary GAAP presentation of net income, is beneficial to a complete understanding of our operating performance. We adjust EBITDA for the following items, which may occur in any period, and refer to this measure as Adjusted EBITDA:

·                  Non-Cash Ground Rent: We exclude the non-cash expense incurred from straight lining the rent from our ground lease obligations and the non-cash amortization of our favorable lease assets.

·                  The impact of the non-cash amortization of the unfavorable contract liabilities recorded in conjunction with our acquisitions of the Bethesda Marriott Suites and the Chicago Marriott Downtown.  The amortization of the unfavorable contract liabilities does not reflect the underlying performance of the Company.

·                  Cumulative effect of a change in accounting principle: Infrequently, the Financial Accounting Standards Board (FASB) promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle.  We exclude these one-time adjustments because they do not reflect our actual performance for that period.

·                  Gains from Early Extinguishment of Debt: We exclude the effect of gains recorded on the early extinguishment of debt because we believe that including them in EBITDA is not consistent with reflecting the ongoing performance of our remaining assets.

·                  Impairment Losses and Gains or Losses on Dispositions: We exclude the effect of impairment losses and gains or losses on dispositions recorded because we believe that including them in EBITDA is not consistent with reflecting the ongoing performance of our remaining assets.  In addition, we believe that impairment charges are similar to depreciation expense, which is also excluded from EBITDA.

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We compute FFO in accordance with standards established by NAREIT (which defines FFO as net income determined in accordance with GAAP), excluding gains (losses) from sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures (which are calculated to reflect FFO on the same basis). We believe that the presentation of FFO provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified non-cash items, such as real estate depreciation and amortization and gain or loss on sale of assets. We also use FFO as one measure in assessing our results.

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We also evaluate our performance by reviewing Adjusted FFO because we believe that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information regarding our ongoing operating performance and that the presentation of Adjusted FFO, when combined with the primary GAAP presentation of net income, is beneficial to a complete understanding of our operating performance. We adjust FFO for the following items, which may occur in any period, and refer to this measure as Adjusted FFO:

·                  Non-Cash Ground Rent: We exclude the non-cash expense incurred from straight lining the rent from our ground lease obligations and the non-cash amortization of our favorable lease assets.

·                  The impact of the non-cash amortization of the unfavorable contract liabilities recorded in conjunction with our acquisitions of the Bethesda Marriott Suites and the Chicago Marriott Downtown.  The amortization of the unfavorable contract liabilities does not reflect the underlying performance of the Company.

·                  Cumulative effect of a change in accounting principle: Infrequently, the Financial Accounting Standards Board (FASB) promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle.  We exclude these one-time adjustments because they do not reflect our actual performance for that period.

·                  Gains from Early Extinguishment of Debt: We exclude the effect of gains recorded on the early extinguishment of debt because we believe that including them in FFO is not consistent with reflecting the ongoing performance of our remaining assets.

·                  Impairment Losses: We exclude the effect of impairment losses recorded because we believe that including them in FFO is not consistent with reflecting the ongoing performance of our remaining assets.  In addition, we believe that impairment charges are similar to gains or losses on dispositions and depreciation expense, both of which are also excluded from FFO.

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