Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | May 01, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36190 | |
Entity Registrant Name | Extended Stay America, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-3140312 | |
Entity Address, Address Line One | 11525 N. Community House Road, Suite 100 | |
Entity Address, City or Town | Charlotte | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28277 | |
City Area Code | 980 | |
Local Phone Number | 345-1600 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share, of Extended Stay America, Inc. | |
Trading Symbol | STAY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 177,482,082 | |
Amendment Flag | false | |
Entity Central Index Key | 0001581164 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
ESH Hospitality, Inc. | ||
Document Information [Line Items] | ||
Entity File Number | 001-36191 | |
Entity Registrant Name | ESH Hospitality, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-3559821 | |
Entity Address, Address Line One | 11525 N. Community House Road, Suite 100 | |
Entity Address, City or Town | Charlotte | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28277 | |
City Area Code | 980 | |
Local Phone Number | 345-1600 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Entity Central Index Key | 0001507563 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock | ESH Hospitality, Inc. | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 250,493,583 | |
Class B common stock | ESH Hospitality, Inc. | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 177,482,082 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
PROPERTY AND EQUIPMENT - Net of accumulated depreciation of $1,414,471 and $1,373,950 | $ 3,492,821 | $ 3,493,549 |
RESTRICTED CASH | 14,878 | 14,858 |
CASH AND CASH EQUIVALENTS | 710,131 | 346,812 |
INTANGIBLE ASSETS - Net of accumulated amortization of $13,774 and $13,133 | 33,551 | 34,183 |
GOODWILL | 45,192 | 45,192 |
ACCOUNTS RECEIVABLE - Net of allowance for doubtful accounts of $1,941 and $2,749 | 15,427 | 14,020 |
DEFERRED TAX ASSETS | 19,585 | 16,157 |
OTHER ASSETS | 61,420 | 65,825 |
TOTAL ASSETS | 4,393,005 | 4,030,596 |
LIABILITIES: | ||
Term loan facility payable - Net of unamortized deferred financing costs and debt discount of $10,584 and $10,993 | 617,170 | 618,338 |
Senior notes payable - Net of unamortized deferred financing costs and debt discount of $34,233 and $35,702 | 2,015,767 | 2,014,298 |
Revolving credit facilities | 399,765 | 0 |
Mandatorily redeemable preferred stock - $0.01 par value, $1,000 redemption value, 8.0%, 350,000,000 shares authorized, 7,130,000 shares issued and outstanding | 7,130 | 7,130 |
Finance lease liabilities | 3,707 | 3,379 |
Accounts payable and accrued liabilities | 238,582 | 211,181 |
Total liabilities | 3,282,121 | 2,854,326 |
COMMITMENTS AND CONTINGENCIES (Note 12) | ||
EQUITY: | ||
Common stock - $0.01 par value, 3,500,000,000 shares authorized, 177,466,325 and 179,483,397 shares issued and outstanding | 1,775 | 1,795 |
Additional paid in capital | 723,285 | 742,397 |
Retained earnings | (63,394) | (48,283) |
Accumulated other comprehensive (loss) income | (512) | 383 |
Total Extended Stay America, Inc. shareholders’ equity | 661,154 | 696,292 |
Noncontrolling interests | 449,730 | 479,978 |
Total equity | 1,110,884 | 1,176,270 |
TOTAL LIABILITIES AND EQUITY | $ 4,393,005 | $ 4,030,596 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Entity Information [Line Items] | ||
Accumulated depreciation | $ 1,414,471,000 | $ 1,373,950,000 |
Accumulated amortization of intangible assets | 13,774,000 | 13,133,000 |
Allowance for doubtful accounts | 1,941,000 | 2,749,000 |
Unamortized deferred financing costs | $ 39,244,000 | $ 40,880,000 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 3,500,000,000 | 3,500,000,000 |
Common stock, shares issued (shares) | 177,466,325 | 179,483,397 |
Common stock, shares outstanding (shares) | 177,466,325 | 179,483,397 |
Mandatorily Redeemable Preferred Stock | ||
Entity Information [Line Items] | ||
Preferred stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, redemption value | $ 1,000 | $ 1,000 |
Preferred stock, redemption rate (percent) | 8.00% | 8.00% |
Preferred stock, authorized (shares) | 350,000,000 | 350,000,000 |
Preferred stock, issued (shares) | 7,130,000 | 7,130,000 |
Preferred stock, outstanding (shares) | 7,130,000 | 7,130,000 |
Term Loan Facility | ||
Entity Information [Line Items] | ||
Unamortized deferred financing costs | $ 10,584,000 | $ 10,993,000 |
ESH REIT 2025 Notes | ||
Entity Information [Line Items] | ||
Unamortized deferred financing costs | $ 34,233,000 | $ 35,702,000 |
CONDENSED CONSOLIDATED BALANC_3
CONDENSED CONSOLIDATED BALANCE SHEETS - REIT - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
PROPERTY AND EQUIPMENT - Net of accumulated depreciation of $1,412,562 and $1,372,595 | $ 3,492,821 | $ 3,493,549 |
CASH AND CASH EQUIVALENTS | 710,131 | 346,812 |
INTANGIBLE ASSETS - Net of accumulated amortization of $1,069 and $763 | 33,551 | 34,183 |
GOODWILL | 45,192 | 45,192 |
OTHER ASSETS | 61,420 | 65,825 |
TOTAL ASSETS | 4,393,005 | 4,030,596 |
LIABILITIES: | ||
Term loan facility payable - Net of unamortized deferred financing costs and debt discount of $10,584 and $10,993 | 617,170 | 618,338 |
Senior notes payable - Net of unamortized deferred financing costs and debt discount of $34,233 and $35,702 | 2,015,767 | 2,014,298 |
Revolving credit facilities | 399,765 | 0 |
Finance lease liabilities | 3,707 | 3,379 |
Accounts payable and accrued liabilities | 238,582 | 211,181 |
Total liabilities | 3,282,121 | 2,854,326 |
COMMITMENTS AND CONTINGENCIES (Note 11) | ||
EQUITY: | ||
Common stock - Class A: $0.01 par value, 4,300,000,000 shares authorized, 250,493,583 shares issued and outstanding; Class B: $0.01 par value, 7,800,000,000 shares authorized, 179,483,397 and 188,219,605 shares issued and outstanding | 1,775 | 1,795 |
Additional paid in capital | 723,285 | 742,397 |
Retained earnings | (63,394) | (48,283) |
Accumulated other comprehensive (loss) income | (512) | 383 |
Total equity | 1,110,884 | 1,176,270 |
TOTAL LIABILITIES AND EQUITY | 4,393,005 | 4,030,596 |
ESH Hospitality, Inc. | ||
ASSETS | ||
PROPERTY AND EQUIPMENT - Net of accumulated depreciation of $1,412,562 and $1,372,595 | 3,505,633 | 3,506,020 |
CASH AND CASH EQUIVALENTS | 628,887 | 296,134 |
RENTS RECEIVABLE FROM EXTENDED STAY AMERICA, INC. (Note 10) | 666 | 1,572 |
DEFERRED RENTS RECEIVABLE FROM EXTENDED STAY AMERICA, INC. (Note 10) | 31,429 | 28,917 |
INTANGIBLE ASSETS - Net of accumulated amortization of $1,069 and $763 | 9,293 | 9,590 |
GOODWILL | 44,012 | 44,012 |
OTHER ASSETS | 18,896 | 21,209 |
TOTAL ASSETS | 4,238,816 | 3,907,454 |
LIABILITIES: | ||
Term loan facility payable - Net of unamortized deferred financing costs and debt discount of $10,584 and $10,993 | 617,170 | 618,338 |
Senior notes payable - Net of unamortized deferred financing costs and debt discount of $34,233 and $35,702 | 2,015,767 | 2,014,298 |
Revolving credit facilities | 350,000 | 0 |
Finance lease liabilities | 3,707 | 3,379 |
Deferred Lease Income, before Accumulated Amortization | 58,023 | 38,770 |
Due to Extended Stay America, Inc., net (Note 10) | 10,828 | 11,838 |
Accounts payable and accrued liabilities | 99,062 | 71,453 |
Deferred tax liabilities | 11 | 11 |
Total liabilities | 3,154,568 | 2,758,087 |
COMMITMENTS AND CONTINGENCIES (Note 11) | ||
EQUITY: | ||
Common stock - Class A: $0.01 par value, 4,300,000,000 shares authorized, 250,493,583 shares issued and outstanding; Class B: $0.01 par value, 7,800,000,000 shares authorized, 179,483,397 and 188,219,605 shares issued and outstanding | 4,280 | 4,300 |
Additional paid in capital | 1,051,076 | 1,050,740 |
Preferred stock—no par value, $1,000 liquidation value, 125 shares authorized, issued and outstanding | 73 | 73 |
Retained earnings | 30,043 | 93,424 |
Accumulated other comprehensive (loss) income | (1,224) | 830 |
Total equity | 1,084,248 | 1,149,367 |
TOTAL LIABILITIES AND EQUITY | $ 4,238,816 | $ 3,907,454 |
CONDENSED CONSOLIDATED BALANC_4
CONDENSED CONSOLIDATED BALANCE SHEETS - REIT (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accumulated depreciation | $ 1,414,471 | $ 1,373,950 |
Accumulated amortization of intangible assets | $ 13,774 | $ 13,133 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 3,500,000,000 | 3,500,000,000 |
Common stock, shares issued (shares) | 177,466,325 | 179,483,397 |
Common stock, shares outstanding (shares) | 177,466,325 | 179,483,397 |
Class B common stock | ||
Common stock, par value (dollars per share) | $ 0.01 | |
Common stock, shares issued (shares) | 1 | |
ESH Hospitality, Inc. | ||
Accumulated depreciation | $ 1,412,562 | $ 1,372,595 |
Accumulated amortization of intangible assets | $ 1,069 | $ 763 |
Common stock, par value (dollars per share) | $ 0.01 | |
Common stock, shares issued (shares) | 1 | |
Preferred stock, redemption value (dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, authorized (shares) | 125 | 125 |
Preferred stock, issued (shares) | 125 | 125 |
Preferred stock, outstanding (shares) | 125 | 125 |
ESH Hospitality, Inc. | Class A common stock | ||
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 4,300,000,000 | 4,300,000,000 |
Common stock, shares issued (shares) | 250,493,583 | 250,493,583 |
Common stock, shares outstanding (shares) | 250,493,583 | 250,493,583 |
ESH Hospitality, Inc. | Class B common stock | ||
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 7,800,000,000 | 7,800,000,000 |
Term Loan Facility | ESH Hospitality, Inc. | ||
Unamortized deferred financing costs and debt discount | $ 10,584 | $ 10,993 |
Senior Notes Payable | ESH Hospitality, Inc. | ||
Unamortized deferred financing costs and debt discount | $ 34,233 | $ 35,702 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
REVENUES: | ||
Total revenues | $ 266,301 | $ 277,669 |
OPERATING EXPENSES: | ||
General and administrative expenses | 23,938 | 23,027 |
Depreciation and amortization | 50,520 | 48,778 |
Total hotel expenses | 219,753 | 209,096 |
Total operating expenses | 223,960 | 213,743 |
OTHER INCOME | 2 | 27 |
INCOME FROM OPERATIONS | 42,343 | 63,953 |
OTHER NON-OPERATING EXPENSE (INCOME) | 703 | (178) |
INTEREST EXPENSE, NET | 32,685 | 29,604 |
INCOME BEFORE INCOME TAX EXPENSE | 8,955 | 34,527 |
INCOME TAX EXPENSE | 1,110 | 6,123 |
NET INCOME | 7,845 | 28,404 |
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (3,291) | (6,470) |
NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS | $ 4,554 | $ 21,934 |
NET INCOME PER EXTENDED STAY AMERICA, INC. COMMON SHARE: | ||
Basic (dollars per share) | $ 0.03 | $ 0.12 |
Diluted (dollars per share) | $ 0.03 | $ 0.12 |
WEIGHTED-AVERAGE EXTENDED STAY AMERICA, INC. COMMON SHARES OUTSTANDING: | ||
Basic (shares) | 177,990 | 188,348 |
Diluted (shares) | 178,171 | 188,576 |
Room revenues | ||
REVENUES: | ||
Total revenues | $ 254,464 | $ 267,046 |
Other hotel revenues | ||
REVENUES: | ||
Total revenues | 6,768 | 5,303 |
Franchise and management fees | ||
REVENUES: | ||
Total revenues | 1,279 | 1,225 |
OPERATING EXPENSES: | ||
Hotel operating expenses | 4,207 | 4,647 |
Hotel operating expenses | ||
REVENUES: | ||
Total revenues | 262,511 | 273,574 |
OPERATING EXPENSES: | ||
Hotel operating expenses | 145,295 | 137,291 |
Other revenues from franchised and managed properties | ||
REVENUES: | ||
Total revenues | 3,790 | 4,095 |
OPERATING EXPENSES: | ||
INCOME FROM OPERATIONS | $ (417) | $ (552) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - REIT - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
OPERATING EXPENSES: | ||
General and administrative expenses | $ 23,938 | $ 23,027 |
Depreciation and amortization | 50,520 | 48,778 |
Total operating expenses | 223,960 | 213,743 |
OTHER INCOME | 2 | 27 |
INCOME FROM OPERATIONS | 42,343 | 63,953 |
OTHER NON-OPERATING EXPENSE (INCOME) | 703 | (178) |
INTEREST EXPENSE, NET | 32,685 | 29,604 |
INCOME BEFORE INCOME TAX EXPENSE | 8,955 | 34,527 |
INCOME TAX EXPENSE | 1,110 | 6,123 |
NET INCOME | $ 7,845 | $ 28,404 |
NET INCOME PER EXTENDED STAY AMERICA, INC. COMMON SHARE: | ||
Basic (dollars per share) | $ 0.03 | $ 0.12 |
Diluted (dollars per share) | $ 0.03 | $ 0.12 |
WEIGHTED-AVERAGE EXTENDED STAY AMERICA, INC. COMMON SHARES OUTSTANDING: | ||
Basic (shares) | 177,990 | 188,348 |
Diluted (shares) | 178,171 | 188,576 |
ESH Hospitality, Inc. | ||
REVENUES: | ||
Rental revenues | $ 119,190 | $ 118,005 |
OPERATING EXPENSES: | ||
Hotel operating expenses | 24,527 | 21,308 |
General and administrative expenses | 4,167 | 3,981 |
Depreciation and amortization | 49,588 | 47,867 |
Total operating expenses | 78,282 | 73,156 |
OTHER INCOME | 0 | 15 |
INCOME FROM OPERATIONS | 40,908 | 44,864 |
OTHER NON-OPERATING EXPENSE (INCOME) | 560 | (139) |
INTEREST EXPENSE, NET | 32,428 | 29,934 |
INCOME BEFORE INCOME TAX EXPENSE | 7,920 | 15,069 |
INCOME TAX EXPENSE | 2 | 3 |
NET INCOME | $ 7,918 | $ 15,066 |
Class A common stock | ESH Hospitality, Inc. | ||
NET INCOME PER EXTENDED STAY AMERICA, INC. COMMON SHARE: | ||
Basic (dollars per share) | $ 0.02 | $ 0.03 |
Diluted (dollars per share) | $ 0.02 | $ 0.03 |
WEIGHTED-AVERAGE EXTENDED STAY AMERICA, INC. COMMON SHARES OUTSTANDING: | ||
Basic (shares) | 250,494 | 250,494 |
Diluted (shares) | 250,494 | 250,494 |
Class B common stock | ESH Hospitality, Inc. | ||
NET INCOME PER EXTENDED STAY AMERICA, INC. COMMON SHARE: | ||
Basic (dollars per share) | $ 0.02 | $ 0.03 |
Diluted (dollars per share) | $ 0.02 | $ 0.03 |
WEIGHTED-AVERAGE EXTENDED STAY AMERICA, INC. COMMON SHARES OUTSTANDING: | ||
Basic (shares) | 177,990 | 188,348 |
Diluted (shares) | 178,171 | 188,576 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
NET INCOME | $ 7,845 | $ 28,404 |
DERIVATIVE ADJUSTMENT: | ||
INTEREST RATE CASH FLOW HEDGE LOSS, NET OF TAX OF $(307) and $(248) | (1,747) | (1,438) |
COMPREHENSIVE INCOME | 6,098 | 26,966 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (2,439) | (5,746) |
COMPREHENSIVE INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS | $ 3,659 | $ 21,220 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Derivatives qualifying as hedges, tax | $ (307) | $ (248) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - REIT - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
NET INCOME | $ 7,845,000 | $ 28,404,000 |
OTHER COMPREHENSIVE INCOME: | ||
INTEREST RATE CASH FLOW HEDGE (LOSS) GAIN, NET OF TAX OF $1 | (1,747,000) | (1,438,000) |
COMPREHENSIVE INCOME | 6,098,000 | 26,966,000 |
ESH Hospitality, Inc. | ||
NET INCOME | 7,918,000 | 15,066,000 |
OTHER COMPREHENSIVE INCOME: | ||
INTEREST RATE CASH FLOW HEDGE (LOSS) GAIN, NET OF TAX OF $1 | (2,054,000) | (1,687,000) |
COMPREHENSIVE INCOME | $ 5,864,000 | $ 13,379,000 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - REIT (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Entity Information [Line Items] | |
Derivatives qualifying as hedges, tax | $ (248) |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
Derivatives qualifying as hedges, tax | $ 1 |
CONDENSED CONSOLIDATED STATEM_7
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total Extended Stay America, Inc. Shareholders’ Equity | Noncontrolling Interests |
Beginning balance (shares) at Dec. 31, 2018 | 188,219 | ||||||
Beginning balance at Dec. 31, 2018 | $ 1,310,639 | $ 1,882 | $ 749,219 | $ 32,432 | $ 2,488 | $ 786,021 | $ 524,618 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 28,404 | 21,934 | 21,934 | 6,470 | |||
Interest rate cash flow hedge loss, net of tax | (1,438) | (714) | (714) | (724) | |||
Corporation common distributions | (13,250) | (13,250) | (13,250) | ||||
ESH REIT common distributions - Class B common share | (28,398) | (28,398) | |||||
ESH REIT preferred distributions | (4) | (4) | |||||
Adjustment to reflect changes in book value of noncontrolling interests | 475 | 475 | (475) | ||||
Equity-based compensation (shares) | 184 | ||||||
Equity-based compensation | 698 | $ 2 | 441 | 443 | 255 | ||
Ending balance (shares) at Mar. 31, 2019 | 188,403 | ||||||
Ending balance at Mar. 31, 2019 | 1,296,651 | $ 1,884 | 750,135 | 41,116 | 1,774 | 794,909 | 501,742 |
Beginning balance (shares) at Dec. 31, 2019 | 179,483 | ||||||
Beginning balance at Dec. 31, 2019 | 1,176,270 | $ 1,795 | 742,397 | (48,283) | 383 | 696,292 | 479,978 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 7,845 | 4,554 | 4,554 | 3,291 | |||
Interest rate cash flow hedge loss, net of tax | (1,747) | (895) | (895) | (852) | |||
Repurchase of Corporation common stock and ESH REIT Class B common stock (Paired Shares) (in shares) | (2,237) | ||||||
Repurchase of Corporation common stock and ESH REIT Class B common stock (Paired Shares) | (31,093) | $ (22) | (19,665) | (19,687) | (11,406) | ||
Corporation common distributions | (15,981) | (15,981) | (15,981) | ||||
ESH REIT common distributions - Class B common share | (24,842) | (24,842) | |||||
ESH REIT preferred distributions | (4) | (4) | |||||
Adjustment to reflect changes in book value of noncontrolling interests | (3,319) | (3,319) | 3,319 | ||||
Equity-based compensation (shares) | 220 | ||||||
Equity-based compensation | 436 | $ 2 | 188 | 190 | 246 | ||
Ending balance (shares) at Mar. 31, 2020 | 177,466 | ||||||
Ending balance at Mar. 31, 2020 | $ 1,110,884 | $ 1,775 | $ 723,285 | $ (63,394) | $ (512) | $ 661,154 | $ 449,730 |
CONDENSED CONSOLIDATED STATEM_8
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Entity Information [Line Items] | ||
Common distributions, per common share (dollars per share) | $ 0.09 | $ 0.07 |
Class B common stock | ||
Entity Information [Line Items] | ||
Common distributions, per common share (dollars per share) | $ 0.14 | $ 0.15 |
CONDENSED CONSOLIDATED STATEM_9
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - REIT - USD ($) $ in Thousands | Total | ESH Hospitality, Inc. | Class B common stockESH Hospitality, Inc. | Common Stock | Common StockESH Hospitality, Inc. | Common StockClass A common stockESH Hospitality, Inc. | Common StockClass B common stockESH Hospitality, Inc. | Preferred StockESH Hospitality, Inc. | Additional Paid in Capital | Additional Paid in CapitalESH Hospitality, Inc. | Retained Earnings | Retained EarningsESH Hospitality, Inc. | Retained EarningsClass B common stockESH Hospitality, Inc. | Accumulated Other Comprehensive Income | Accumulated Other Comprehensive IncomeESH Hospitality, Inc. |
Beginning balance (shares) at Dec. 31, 2018 | 188,219,000 | 250,494,000 | 188,219,000 | ||||||||||||
Beginning balance at Dec. 31, 2018 | $ 1,310,639 | $ 1,215,154 | $ 1,882 | $ 4,387 | $ 73 | $ 749,219 | $ 1,090,809 | $ 32,432 | $ 114,096 | $ 2,488 | $ 5,789 | ||||
Beginning balance, preferred shares (shares) at Dec. 31, 2018 | 125 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 28,404 | 15,066 | 21,934 | 15,066 | |||||||||||
Interest rate cash flow hedge loss, net of tax | (1,438) | (1,687) | (714) | (1,687) | |||||||||||
Corporation common distributions | (13,250) | (65,973) | (13,250) | (65,973) | |||||||||||
Preferred distributions | (4) | (4) | (4) | ||||||||||||
Equity-based compensation (shares) | 184,000 | 184,000 | |||||||||||||
Equity-based compensation | 698 | 649 | $ 2 | 2 | 441 | 647 | |||||||||
Ending balance (shares) at Mar. 31, 2019 | 188,403,000 | 250,494,000 | 188,403,000 | ||||||||||||
Ending balance at Mar. 31, 2019 | 1,296,651 | 1,163,205 | $ 1,884 | 4,389 | $ 73 | 750,135 | 1,091,456 | 41,116 | 63,185 | 1,774 | 4,102 | ||||
Ending balance, preferred shares (shares) at Mar. 31, 2019 | 125 | ||||||||||||||
Beginning balance (shares) at Dec. 31, 2019 | 179,483,000 | 250,494,000 | 179,483,000 | ||||||||||||
Beginning balance at Dec. 31, 2019 | 1,176,270 | $ 1,149,367 | $ 1,795 | 4,300 | $ 73 | 742,397 | 1,050,740 | (48,283) | 93,424 | 383 | 830 | ||||
Beginning balance, preferred shares (shares) at Dec. 31, 2019 | 125 | 125 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 7,845 | $ 7,918 | 4,554 | 7,918 | |||||||||||
Interest rate cash flow hedge loss, net of tax | (1,747) | (2,054) | (895) | (2,054) | |||||||||||
Repurchase of Class B common stock (in shares) | (2,237,000) | (2,237,000) | |||||||||||||
Repurchase of Class B common stock | (31,093) | $ (11,406) | $ (22) | $ (22) | (19,665) | $ (11,384) | |||||||||
Corporation common distributions | (15,981) | (59,911) | (15,981) | (59,911) | |||||||||||
Preferred distributions | (4) | (4) | (4) | ||||||||||||
Equity-based compensation (shares) | 220,000 | 220,000 | |||||||||||||
Equity-based compensation | 436 | 338 | $ 2 | 2 | 188 | 336 | |||||||||
Ending balance (shares) at Mar. 31, 2020 | 177,466,000 | 250,494,000 | 177,466,000 | ||||||||||||
Ending balance at Mar. 31, 2020 | $ 1,110,884 | $ 1,084,248 | $ 1,775 | $ 4,280 | $ 73 | $ 723,285 | $ 1,051,076 | $ (63,394) | $ 30,043 | $ (512) | $ (1,224) | ||||
Ending balance, preferred shares (shares) at Mar. 31, 2020 | 125 | 125 |
CONDENSED CONSOLIDATED STATE_10
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - REIT (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Common distributions, per common share (dollars per share) | $ 0.09 | $ 0.07 |
Class A common stock | ESH Hospitality, Inc. | ||
Common distributions, per common share (dollars per share) | 0.14 | 0.15 |
Class B common stock | ||
Common distributions, per common share (dollars per share) | 0.14 | 0.15 |
Class B common stock | ESH Hospitality, Inc. | ||
Common distributions, per common share (dollars per share) | $ 0.14 | $ 0.15 |
CONDENSED CONSOLIDATED STATE_11
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
OPERATING ACTIVITIES: | ||
Net income | $ 7,845 | $ 28,404 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 50,520 | 48,778 |
Foreign currency transaction loss (gain) | 703 | (178) |
Amortization of deferred financing costs and debt discount | 2,052 | 1,996 |
Loss on disposal of property and equipment | 3,343 | 1,376 |
Equity-based compensation | 1,126 | 2,109 |
Deferred income tax benefit | (3,122) | (50) |
Changes in assets and liabilities: | ||
Accounts receivable, net | (1,407) | (1,586) |
Other assets | 1,760 | 3,208 |
Accounts payable and accrued liabilities | 29,465 | 17,982 |
Net cash provided by operating activities | 92,285 | 102,039 |
INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (34,452) | (45,197) |
Development in process payments | (19,769) | (7,982) |
Payment for intangible assets | (358) | (2,109) |
Proceeds from insurance and related recoveries | 956 | 156 |
Net cash used in investing activities | (53,623) | (55,132) |
FINANCING ACTIVITIES: | ||
Principal payments on term loan facility | (1,577) | (2,842) |
Proceeds from revolving credit facility | 399,765 | 0 |
Payments of deferred financing costs | (17) | 0 |
Principal payments on finance leases | (37) | (29) |
Tax withholdings related to restricted stock unit settlements | (815) | (1,571) |
Repurchase of Corporation common stock and ESH REIT Class B common stock (Paired Shares) | (31,093) | 0 |
Corporation common distributions | (16,177) | (13,334) |
ESH REIT common distributions | (25,222) | (28,562) |
Net cash provided by (used in) financing activities | 324,827 | (46,338) |
CHANGES IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH DUE TO CHANGES IN FOREIGN CURRENCY EXCHANGE RATES | (150) | 31 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 363,339 | 600 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - Beginning of period | 361,670 | 303,336 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - End of period | 725,009 | 303,936 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash payments for interest, excluding modification, prepayment and other penalties, net of capitalized interest of $859 and $313 | 5,455 | 12,028 |
Cash (refunds) payments for income taxes, net of refunds of $18 and $0 | (18) | 341 |
Operating cash payments for finance leases | 59 | 61 |
Operating cash payments for operating leases | 714 | 690 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Capital expenditures included in accounts payable and accrued liabilities | 22,400 | 24,555 |
Additions to finance lease right-of-use assets and liabilities | 364 | 109 |
Corporation common distributions included in accounts payable and accrued liabilities | 238 | 274 |
ESH REIT | ||
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
ESH REIT common distributions included in accounts payable and accrued liabilities | $ 387 | $ 629 |
CONDENSED CONSOLIDATED STATE_12
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Cash Flows [Abstract] | ||
Interest costs capitalized | $ 859 | $ 313 |
Proceeds from income tax refunds | $ 18 | $ 0 |
CONDENSED CONSOLIDATED STATE_13
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - REIT - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
OPERATING ACTIVITIES: | ||
Net income | $ 7,845 | $ 28,404 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 50,520 | 48,778 |
Foreign currency transaction loss (gain) | 703 | (178) |
Amortization of deferred financing costs and debt discount | 2,052 | 1,996 |
Loss on disposal of property and equipment | 3,343 | 1,376 |
Equity-based compensation | 1,126 | 2,109 |
Changes in assets and liabilities: | ||
Other assets | 1,760 | 3,208 |
Accounts payable and accrued liabilities | 29,465 | 17,982 |
Net cash provided by operating activities | 92,285 | 102,039 |
INVESTING ACTIVITIES: | ||
Development in process payments | (19,769) | (7,982) |
Payment for intangible assets | (358) | (2,109) |
Proceeds from insurance and related recoveries | 956 | 156 |
Net cash used in investing activities | (53,623) | (55,132) |
FINANCING ACTIVITIES: | ||
Principal payments on term loan facility | (1,577) | (2,842) |
Payments of deferred financing costs | (17) | 0 |
Proceeds from revolving credit facility | 399,765 | 0 |
Principal payments on finance leases | (37) | (29) |
Repurchase of Class B common stock | (31,093) | 0 |
Common distributions | (16,177) | (13,334) |
Net cash provided by (used in) financing activities | 324,827 | (46,338) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 363,339 | 600 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - Beginning of period | 361,670 | 303,336 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - End of period | 725,009 | 303,936 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash payments for interest, excluding modification, prepayment and other penalties, net of capitalized interest of $859 and $313 | 5,455 | 12,028 |
Cash (refunds) payments for income taxes, net of refunds of $18 and $0 | (18) | 341 |
Operating cash payments for finance leases | 59 | 61 |
Operating cash payments for operating leases | 714 | 690 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Capital expenditures included in due to/from Extended Stay America, Inc. and accounts payable and accrued liabilities | 22,400 | 24,555 |
Additions to finance lease right-of-use assets and liabilities | 364 | 109 |
Common distributions included in accounts payable and accrued liabilities | 238 | 274 |
ESH Hospitality, Inc. | ||
OPERATING ACTIVITIES: | ||
Net income | 7,918 | 15,066 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 49,588 | 47,867 |
Foreign currency transaction loss (gain) | 560 | (139) |
Amortization of deferred financing costs and debt discount | 2,022 | 1,969 |
Loss on disposal of property and equipment | 3,343 | 1,376 |
Equity-based compensation | 134 | 155 |
Changes in assets and liabilities: | ||
Deferred rents receivable from Extended Stay America, Inc. | (2,512) | (5,144) |
Due to Extended Stay America, Inc., net | (1,588) | (3,008) |
Other assets | (798) | (3,595) |
Unearned rental revenues/rents receivable from Extended Stay America, Inc., net | 20,159 | 26,893 |
Accounts payable and accrued liabilities | 29,469 | 20,926 |
Net cash provided by operating activities | 108,295 | 102,366 |
INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (33,786) | (43,739) |
Development in process payments | (19,769) | (7,982) |
Payment for intangible assets | (358) | (2,100) |
Proceeds from insurance and related recoveries | 956 | 156 |
Net cash used in investing activities | (52,957) | (53,665) |
FINANCING ACTIVITIES: | ||
Principal payments on term loan facility | (1,577) | (2,842) |
Payments of deferred financing costs | (11) | 0 |
Proceeds from revolving credit facility | 350,000 | 0 |
Principal payments on finance leases | (37) | (29) |
Repurchase of Class B common stock | (11,406) | 0 |
Issuance of Class B common stock related to issuance of Paired Shares | 737 | 1,213 |
Common distributions | (60,291) | (66,137) |
Net cash provided by (used in) financing activities | 277,415 | (67,795) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 332,753 | (19,094) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - Beginning of period | 296,134 | 178,538 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - End of period | 628,887 | 159,444 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash payments for interest, excluding modification, prepayment and other penalties, net of capitalized interest of $859 and $313 | 5,239 | 11,841 |
Cash (refunds) payments for income taxes, net of refunds of $18 and $0 | (18) | 4 |
Operating cash payments for finance leases | 59 | 61 |
Operating cash payments for operating leases | 189 | 177 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Capital expenditures included in due to/from Extended Stay America, Inc. and accounts payable and accrued liabilities | 21,873 | 24,034 |
Additions to finance lease right-of-use assets and liabilities | 364 | 109 |
Common distributions included in accounts payable and accrued liabilities | 387 | 629 |
Net payable related to RSUs not yet settled or issued included in due to/from Extended Stay America, Inc. | $ (230) | $ (340) |
CONDENSED CONSOLIDATED STATE_14
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - REIT (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Entity Information [Line Items] | ||
Interest costs capitalized | $ 859 | $ 313 |
Proceeds from income tax refunds | 18 | 0 |
ESH Hospitality, Inc. | ||
Entity Information [Line Items] | ||
Interest costs capitalized | 859 | 313 |
Proceeds from income tax refunds | $ 18 | $ 0 |
BUSINESS, ORGANIZATION AND BASI
BUSINESS, ORGANIZATION AND BASIS OF CONSOLIDATION | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS, ORGANIZATION AND BASIS OF CONSOLIDATION | BUSINESS, ORGANIZATION AND BASIS OF CONSOLIDATION Extended Stay America, Inc. (the “Corporation”) was incorporated in the state of Delaware on July 8, 2013. ESH Hospitality, Inc. (“ESH REIT”) was formed as a limited liability company in the state of Delaware on September 16, 2010 and was converted to a corporation on November 5, 2013. The Corporation owns, and is expected to continue to own, all of the issued and outstanding Class A common stock of ESH REIT, which, as of March 31, 2020, represents 59% of the outstanding common stock of ESH REIT. Due to its controlling interest in ESH REIT, the Corporation consolidates the financial position, results of operations, comprehensive income and cash flows of ESH REIT. The term, “the Company,” as used herein refers to the Corporation and its consolidated subsidiaries, including ESH REIT. A “Paired Share” consists of one share of common stock, par value $0.01 per share, of the Corporation, that is attached to and trades as a single unit with one share of Class B common stock, par value $0.01 per share, of ESH REIT. Each outstanding share of Corporation common stock is attached to and trades with one share of ESH REIT Class B common stock. The Company is an integrated owner/operator of Extended Stay America-branded hotels and is also engaged in franchising and managing extended stay hotels for third parties in the U.S. As of March 31, 2020 and December 31, 2019, the Company owned and operated 558 and 557 hotel properties, respectively, in 40 U.S. states, consisting of approximately 62,100 and 61,900 rooms, respectively, and franchised or managed 74 and 73 hotel properties for third parties, respectively, consisting of approximately 7,600 and 7,500 rooms, respectively. As of March 31, 2020, all 632 system-wide hotels were operated under the Extended Stay America brand. Owned hotel properties are owned by subsidiaries of ESH REIT and are operated by subsidiaries of the Corporation (the “Operating Lessees”) pursuant to leases between ESH REIT and the Operating Lessees. The hotels are managed by ESA Management LLC (“ESA Management”), a subsidiary of the Corporation, which also manages 25 hotels on behalf of third parties. The Extended Stay America brand is owned by ESH Hospitality Strategies LLC (“ESH Strategies”), also a subsidiary of the Corporation. ESH Strategies licenses the brand and intellectual property to its subsidiaries, which license them to the Operating Lessees and third parties. As of March 31, 2020 and December 31, 2019, the Corporation had 177.5 million shares and 179.5 million shares of common stock outstanding, respectively. As of March 31, 2020 and December 31, 2019, ESH REIT’s common equity consisted of the following: (i) 250.5 million shares of Class A common stock outstanding (59% and 58%, respectively, of its common equity), all of which were owned by the Corporation, and (ii) 177.5 million shares and 179.5 million shares of Class B common stock outstanding, respectively (41% and 42%, respectively, of its common equity). Paired Share Repurchase Program —In December 2015, the Boards of Directors of the Corporation and ESH REIT authorized a combined Paired Share repurchase program. As a result of several increases in authorized amounts and program extensions, the combined Paired Share repurchase program currently authorizes the Corporation and ESH REIT to purchase up to $550 million in Paired Shares through December 31, 2020. Repurchases may be made at management’s discretion from time to time in the open market, in privately negotiated transactions or by other means (including through Rule 10b5-1 trading plans). As of March 31, 2020, the Corporation and ESH REIT had repurchased and retired 28.6 million Paired Shares for $283.0 million and $166.4 million, including transaction fees, respectively, and $101.1 million remained available under the combined Paired Share repurchase program. Basis of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and include the financial position, results of operations, comprehensive income, changes in equity and cash flows of the Corporation and its consolidated subsidiaries, including ESH REIT. Third-party equity interests in consolidated subsidiaries are presented as noncontrolling interests. Despite the fact that each share of Corporation common stock is paired on a one-for-one basis with each share of ESH REIT Class B common stock, the Corporation does not own ESH REIT Class B common stock; therefore, ESH REIT Class B common stock represents a |
BUSINESS, ORGANIZATION AND BA_2
BUSINESS, ORGANIZATION AND BASIS OF CONSOLIDATION - REIT | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |
BUSINESS, ORGANIZATION AND BASIS OF CONSOLIDATION | BUSINESS, ORGANIZATION AND BASIS OF CONSOLIDATION Extended Stay America, Inc. (the “Corporation”) was incorporated in the state of Delaware on July 8, 2013. ESH Hospitality, Inc. (“ESH REIT”) was formed as a limited liability company in the state of Delaware on September 16, 2010 and was converted to a corporation on November 5, 2013. The Corporation owns, and is expected to continue to own, all of the issued and outstanding Class A common stock of ESH REIT, which, as of March 31, 2020, represents 59% of the outstanding common stock of ESH REIT. Due to its controlling interest in ESH REIT, the Corporation consolidates the financial position, results of operations, comprehensive income and cash flows of ESH REIT. The term, “the Company,” as used herein refers to the Corporation and its consolidated subsidiaries, including ESH REIT. A “Paired Share” consists of one share of common stock, par value $0.01 per share, of the Corporation, that is attached to and trades as a single unit with one share of Class B common stock, par value $0.01 per share, of ESH REIT. Each outstanding share of Corporation common stock is attached to and trades with one share of ESH REIT Class B common stock. The Company is an integrated owner/operator of Extended Stay America-branded hotels and is also engaged in franchising and managing extended stay hotels for third parties in the U.S. As of March 31, 2020 and December 31, 2019, the Company owned and operated 558 and 557 hotel properties, respectively, in 40 U.S. states, consisting of approximately 62,100 and 61,900 rooms, respectively, and franchised or managed 74 and 73 hotel properties for third parties, respectively, consisting of approximately 7,600 and 7,500 rooms, respectively. As of March 31, 2020, all 632 system-wide hotels were operated under the Extended Stay America brand. Owned hotel properties are owned by subsidiaries of ESH REIT and are operated by subsidiaries of the Corporation (the “Operating Lessees”) pursuant to leases between ESH REIT and the Operating Lessees. The hotels are managed by ESA Management LLC (“ESA Management”), a subsidiary of the Corporation, which also manages 25 hotels on behalf of third parties. The Extended Stay America brand is owned by ESH Hospitality Strategies LLC (“ESH Strategies”), also a subsidiary of the Corporation. ESH Strategies licenses the brand and intellectual property to its subsidiaries, which license them to the Operating Lessees and third parties. As of March 31, 2020 and December 31, 2019, the Corporation had 177.5 million shares and 179.5 million shares of common stock outstanding, respectively. As of March 31, 2020 and December 31, 2019, ESH REIT’s common equity consisted of the following: (i) 250.5 million shares of Class A common stock outstanding (59% and 58%, respectively, of its common equity), all of which were owned by the Corporation, and (ii) 177.5 million shares and 179.5 million shares of Class B common stock outstanding, respectively (41% and 42%, respectively, of its common equity). Paired Share Repurchase Program —In December 2015, the Boards of Directors of the Corporation and ESH REIT authorized a combined Paired Share repurchase program. As a result of several increases in authorized amounts and program extensions, the combined Paired Share repurchase program currently authorizes the Corporation and ESH REIT to purchase up to $550 million in Paired Shares through December 31, 2020. Repurchases may be made at management’s discretion from time to time in the open market, in privately negotiated transactions or by other means (including through Rule 10b5-1 trading plans). As of March 31, 2020, the Corporation and ESH REIT had repurchased and retired 28.6 million Paired Shares for $283.0 million and $166.4 million, including transaction fees, respectively, and $101.1 million remained available under the combined Paired Share repurchase program. Basis of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and include the financial position, results of operations, comprehensive income, changes in equity and cash flows of the Corporation and its consolidated subsidiaries, including ESH REIT. Third-party equity interests in consolidated subsidiaries are presented as noncontrolling interests. Despite the fact that each share of Corporation common stock is paired on a one-for-one basis with each share of ESH REIT Class B common stock, the Corporation does not own ESH REIT Class B common stock; therefore, ESH REIT Class B common stock represents a |
ESH Hospitality, Inc. | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |
BUSINESS, ORGANIZATION AND BASIS OF CONSOLIDATION | BUSINESS, ORGANIZATION AND BASIS OF CONSOLIDATION ESH Hospitality, Inc. (“ESH REIT”) was formed as a limited liability company in the state of Delaware on September 16, 2010 and was converted to a corporation on November 5, 2013. Extended Stay America, Inc. (the “Corporation”), the parent of ESH REIT, was incorporated in the state of Delaware on July 8, 2013. The Corporation owns, and is expected to continue to own, all of the issued and outstanding Class A common stock of ESH REIT, which, as of March 31, 2020, represents 59% of the outstanding common stock of ESH REIT. A “Paired Share” consists of one share of common stock, par value $0.01 per share, of the Corporation, that is attached to and trades as a single unit with one share of Class B common stock, par value $0.01 per share, of ESH REIT. Each outstanding share of ESH REIT Class B common stock is attached to and trades with one share of Corporation common stock. As of March 31, 2020 and December 31, 2019, ESH REIT and its subsidiaries owned and leased 558 and 557 hotel properties, respectively, in 40 U.S. states, consisting of approximately 62,100 and 61,900 rooms, respectively. All hotels are leased to wholly-owned subsidiaries of the Corporation (the “Operating Lessees”). Paired Share Repurchase Program — In December 2015, the Boards of Directors of the Corporation and ESH REIT authorized a combined Paired Share repurchase program. As a result of several increases in authorized amounts and program extensions, the combined Paired Share repurchase program currently authorizes the Corporation and ESH REIT to purchase up to $550 million in Paired Shares through December 31, 2020. Repurchases may be made at management’s discretion from time to time in the open market, in privately negotiated transactions or by other means (including through Rule 10b5-1 trading plans). As of March 31, 2020, ESH REIT had repurchased and retired 28.6 million ESH REIT Class B common shares for $166.4 million, including transaction fees, and $101.1 million remained available under the combined Paired Share repurchase program. Basis of Consolidation |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Presentation— Certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP have been condensed or omitted in the accompanying condensed consolidated financial statements. The Company believes the disclosures made are adequate to prevent the information presented from being misleading. However, the condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2019 included in the combined annual report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 26, 2020. The accompanying condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring items) necessary to present fairly the Company’s financial position as of March 31, 2020 and the results of the Company’s operations, comprehensive income, changes in equity and cash flows for the three months ended March 31, 2020 and 2019. Interim results are not necessarily indicative of full year performance because of the impact of seasonal, short-term or other market variations, as well as the impact of acquisitions, dispositions, hotel renovations and financing or other capital transactions. Use of Estimates —The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and amounts of revenues and expenses during the reporting period. Management used significant estimates to determine the estimated useful lives of tangible assets, as well as in the assessment of tangible and intangible assets for impairment, estimated liabilities for insurance reserves and income taxes. Actual results could differ from those estimates. Property and Equipment —Property and equipment additions are recorded at cost. Major improvements that extend the life or utility of property or equipment are capitalized and depreciated over a period equal to the shorter of the estimated useful life of the improvement or the remaining estimated useful life of the asset. Ordinary repairs and maintenance are charged to expense as incurred. Depreciation and amortization are recorded on a straight-line basis over estimated useful lives which range from 2 to 49 years. Management assesses long-lived assets for potential impairment quarterly, as well as when events or changes in circumstances indicate the carrying amount of an asset or group of assets may not be recoverable. The identification of events or changes in circumstances that indicate the carrying value of assets may not be recoverable requires judgment. The Company reviews for impairment indicators at the lowest level of identifiable cash flows based on quantitative, qualitative and certain industry-related factors. Quantitative factors include, but are not limited to, hotel property EBITDA, EBITDA margins and EBITDA multiples, and serve to screen assets with historical, current or projected operating cash flow losses or deterioration. Qualitative factors include a change in physical condition, economic environment, regulatory environment or primary use, including the evaluation of the asset for disposition. Recoverability of property and equipment is measured by a comparison of the carrying amount of a hotel property or group of hotel properties to the estimated future undiscounted cash flows expected to be generated by the hotel property or group of hotel properties. Impairment is recognized when estimated future undiscounted cash flows, including expected proceeds from disposition, are less than the carrying value of the hotel property or group of hotel properties. To the extent that a hotel property or group of hotel properties is impaired, the excess carrying amount over estimated fair value is recognized as an impairment charge. Fair value is determined based upon the discounted cash flows of the hotel property or group of hotel properties, bids, quoted market prices or independent appraisals, as considered necessary. The estimation and evaluation of future cash flows, in particular the holding period for real estate assets and asset composition and/or concentration within real estate portfolios, relies on judgments and assumptions regarding holding period, current and future operating performance and current and future market conditions. It is possible that such judgments and/or estimates will change; in particular, the effects of the COVID-19 pandemic could cause economic and market conditions to continue to deteriorate, and if this occurs, or if the Company's expected holding period for real estate assets changes, the Company may recognize impairment charges or losses on sale in future periods reflecting either changes in estimate, circumstance or the estimated market value of assets. Based on market conditions and the Company's plans with respect to its hotel properties as of March 31, 2020, the Company believes that the carrying amounts of the hotel properties are recoverable and no impairment charges were recorded during the three months ended March 31, 2020. However, actual results are subject to a high degree of uncertainty due to the volatility of macroeconomic trends and the evolving nature of the COVID-19 pandemic. Intangible Assets and Goodwill —Intangible assets include trademarks, corporate customer relationships and licenses related to certain internal-use software. Corporate customer relationships and software licenses are amortized using the straight-line method over their estimated useful lives; the estimated useful life of customer relationships is 20 years, and the estimated useful life of software licenses is the remaining non-cancellable term of each respective contract. Trademarks are not amortized. Goodwill represents the purchase price in excess of the fair value of net assets acquired in conjunction with the acquisition of the Company's predecessor in 2010. Definite-lived intangible assets are reviewed for impairment quarterly and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Indefinite-lived intangible assets, including goodwill, are reviewed for impairment quarterly, and the Company tests for impairment more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has two reportable operating segments, owned hotels and franchise and management. There is no goodwill associated with our franchise and management segment. Management analyzes goodwill associated with all owned hotels when analyzing for potential impairment. The Company first assesses qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. As of March 31, 2020, the Company believes that the carrying amount of its intangible assets, including goodwill, are recoverable and there are no changes in circumstances that would more likely than not reduce the fair value of its reporting units below their carrying amount; therefore, no impairment charges were recorded during the three months ended March 31, 2020. However, if the effects of the COVID-19 pandemic cause economic and market conditions to continue to deteriorate, in particular if the market price of the Company's Paired Shares further declines, these events could result in impairment charges in the future. Actual results are subject to a high degree of uncertainty due to the volatility of macroeconomic trends and the evolving nature of the COVID-19 pandemic. Revenue from Owned and Operated Hotels — Revenue generated from owned and operated hotels consists of room and other hotel revenues recognized when services are provided. When a reservation is made, the Company deems that the parties have approved a contract in accordance with customary business practices and are committed to perform their respective obligations. At such time, each party’s rights regarding the services to be transferred are identified, payment terms are specified, the contract has commercial substance and, in most instances, it is probable the Company will collect substantially all consideration to which it will be entitled in exchange for services. Each room night consumed by a guest with a cancellable reservation represents a contract whereby the Company has a performance obligation to provide the room night at an agreed upon price. For cancellable reservations, the Company recognizes revenue as each performance obligation (i.e., each room night) is met. Such contract is renewed if the guest continues their stay. For room nights consumed by a guest with a non-cancellable reservation, the entire reservation period represents the contract term whereby the Company has a performance obligation to provide the room night or nights at an agreed upon price. For non-cancellable reservations, the Company recognizes revenue over the term of the performance period (i.e., the reservation period) as room nights are consumed. For these reservations, the room rate is typically fixed over the reservation period. The Company uses an output method based on performance completed to date (i.e., room nights consumed) to determine the amount of revenue it recognizes on a daily basis if the length of a non-cancellable reservation exceeds one night since consumption of room nights indicates when services are transferred to the guest. In certain instances, variable consideration may exist with respect to the transaction price, such as discounts, coupons and price concessions made upon guest checkout. In evaluating its performance obligation, the Company bundles the obligation to provide the guest the room itself with other obligations (such as free WiFi, grab and go breakfast, access to on-site laundry facilities and parking), as the other obligations are not distinct and separable because the guest cannot benefit from the additional amenities without the consumed room night. The Company’s obligation to provide the additional items or services is not separately identifiable from the fundamental contractual obligation (i.e., providing the room and its contents). The Company has no performance obligations once a guest’s stay is complete. Certain revenues are generated through third-party intermediaries or distribution channels (i.e., online travel agents). Regardless of the basis on which the Company is compensated (i.e., gross or net), the Company is responsible for fulfilling the promise to provide the hotel room and related services to the guest and retains inventory risk. Since the Company controls the inventory and services provided and because third-party intermediaries are typically not contractually required to guarantee room night consumption, the Company is the principal in these transactions. As such, the Company is required to record revenue at an amount equal to the price charged to the guest (i.e., on a gross basis). Third-party intermediaries that pay the Company directly (i.e., on a net basis) typically charge the guest additional fees, blend the room offering with other offerings at amounts which are not allocable and may adjust the price without the Company’s approval. As such, the Company is unable to calculate the room rate charged to the guest. Since any estimate the Company would make has significant uncertainty that ultimately would not be resolved, despite its role as principal, in these instances the Company records revenue equal to the amount paid by the third-party intermediaries (i.e., the net amount). Revenue from Franchise and Management Fees — Revenue generated from franchise and management fees consists of the following: • Franchise fees, which consist of an initial fee and an ongoing royalty fee based on a percentage of a hotel’s monthly revenue in exchange for the access to and use of the Company’s brand name and other intellectual property. Initial fees are deferred and recognized over the expected contract or customer life. Royalty fees are recognized over time as franchisees derive value from the license to use the intellectual property. • Management fees, which consist of an ongoing base fee calculated as a percentage of a hotel’s monthly revenue in exchange for on-site hotel management services. Management fees are recognized over time as third-party hotel owners derive value from on-site personnel and related services. • Other revenues from franchised and managed properties, which include the reimbursement of costs incurred on behalf of third-party hotel owners on a direct and an indirect basis, as follows: ◦ Direct costs incurred with respect to management and franchise agreements include on-site hotel personnel and incremental reservation and distribution costs for which the Company is reimbursed on a dollar-for-dollar basis. Since the Company employs the hotel personnel and has discretion over reservation and distribution costs, it is the principal with respect to these services and revenue is recognized on a gross basis. ◦ Indirect costs incurred with respect to franchise agreements include costs associated with certain shared system-wide platforms (i.e., system services), such as marketing, technology infrastructure, central reservations, national sales and revenue management systems. The Company is reimbursed for indirect costs through a system service fee, or program fee, based on a percentage of a hotel’s monthly revenue. System service fees are recognized over time as franchisees derive value from the license to use these processes and systems. The Company has discretion over how it spends system service fees and is the principal with respect to these services. Revenue is recognized on a gross basis; expense is recognized as incurred. Over time, the Company manages system services to break-even, but the timing of system service fee revenues will typically not align with expenses incurred to operate the programs. The promise to provide access to the Company’s intellectual property is combined with the promise to provide system services to form a single performance obligation since the promises generally accompany one another. Hotel management services form a single performance obligation. As noted above, each identified performance obligation is considered to be a series of services transferred over time. Revenue is recognized on an output method based on performance completed to date. The Company recognizes revenue in the amount to which it has a right to bill third parties under their respective franchise or management agreements, as it has a right to consideration in an amount that corresponds directly with the third parties’ hotel revenues. Franchise, management and system service fees are characterized as variable consideration and vary from period to period. In the event that fees include variables that extend beyond the current period, the Company uses the most likely amount method to determine the amount of revenue to record based on a reasonable revenue forecast for the applicable hotel. In most instances, the Company does not have constraining estimates, as third-party hotel revenues are typically available and obtained monthly. Recently Issued Accounting Standards Reference Rate Reform —In March 2020, the FASB issued an accounting standards update that provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR, subject to meeting certain criteria. The Company adopted this update on March 12, 2020, and the update is effective through December 31, 2022, during which time the Company may elect to apply the optional expedients and exceptions offered under the standard. The Company's variable rate debt and interest rate swap are tied to rates that reference LIBOR (see Notes 7 and 8). As of March 31, 2020, the Company had not applied any of these optional expedients or exceptions. The adoption of this update did not, and is not expected to, have a material effect on the Company's condensed consolidated financial statements. Income Taxes —In December 2019, the FASB issued an accounting standards update which simplifies the accounting for income taxes. The update amends several topics including interim period accounting for enacted changes in tax law and year- to-date loss limitation in interim-period tax accounting. This update will be effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, and may be early adopted. The Company does not expect the adoption of this update to have a material effect on its condensed consolidated financial statements. Fair Value Measurement— In August 2018, the FASB issued an accounting standards update which modifies the disclosure requirements for fair value measurements in Topic 820, Fair Value Measurement . The Company adopted this update on January 1, 2020. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Intangibles-Goodwill and Other—Internal-Use Software— In August 2018, the FASB issued an accounting standards update which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The Company adopted this update on January 1, 2020, using a prospective transition method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Goodwill— In January 2017, the FASB issued an accounting standards update in which the guidance on testing for goodwill was updated to eliminate Step 2 in the determination on whether goodwill should be considered impaired. Annual and/or interim assessments are still required. The Company adopted this update on January 1, 2020, using a prospective transition method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Financial Instruments—Credit Losses— In June 2016, the FASB issued an accounting standards update which requires the measurement of an impairment allowance for certain financial assets based on a company’s current estimate of all contractual cash flows it does not expect to collect. The new standard primarily impacts the manner in which the Company estimates its allowance for uncollectible trade receivables. The standard requires the Company to measure its allowance for doubtful accounts based on current conditions, historical experience and reasonable and supportable forecasts for each pool of receivables with similar risk characteristics. The Company adopted this update on January 1, 2020, using a modified retrospective method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements and had no effect on or impact to retained earnings. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REIT | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Presentation— Certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP have been condensed or omitted in the accompanying condensed consolidated financial statements. The Company believes the disclosures made are adequate to prevent the information presented from being misleading. However, the condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2019 included in the combined annual report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 26, 2020. The accompanying condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring items) necessary to present fairly the Company’s financial position as of March 31, 2020 and the results of the Company’s operations, comprehensive income, changes in equity and cash flows for the three months ended March 31, 2020 and 2019. Interim results are not necessarily indicative of full year performance because of the impact of seasonal, short-term or other market variations, as well as the impact of acquisitions, dispositions, hotel renovations and financing or other capital transactions. Use of Estimates —The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and amounts of revenues and expenses during the reporting period. Management used significant estimates to determine the estimated useful lives of tangible assets, as well as in the assessment of tangible and intangible assets for impairment, estimated liabilities for insurance reserves and income taxes. Actual results could differ from those estimates. Property and Equipment —Property and equipment additions are recorded at cost. Major improvements that extend the life or utility of property or equipment are capitalized and depreciated over a period equal to the shorter of the estimated useful life of the improvement or the remaining estimated useful life of the asset. Ordinary repairs and maintenance are charged to expense as incurred. Depreciation and amortization are recorded on a straight-line basis over estimated useful lives which range from 2 to 49 years. Management assesses long-lived assets for potential impairment quarterly, as well as when events or changes in circumstances indicate the carrying amount of an asset or group of assets may not be recoverable. The identification of events or changes in circumstances that indicate the carrying value of assets may not be recoverable requires judgment. The Company reviews for impairment indicators at the lowest level of identifiable cash flows based on quantitative, qualitative and certain industry-related factors. Quantitative factors include, but are not limited to, hotel property EBITDA, EBITDA margins and EBITDA multiples, and serve to screen assets with historical, current or projected operating cash flow losses or deterioration. Qualitative factors include a change in physical condition, economic environment, regulatory environment or primary use, including the evaluation of the asset for disposition. Recoverability of property and equipment is measured by a comparison of the carrying amount of a hotel property or group of hotel properties to the estimated future undiscounted cash flows expected to be generated by the hotel property or group of hotel properties. Impairment is recognized when estimated future undiscounted cash flows, including expected proceeds from disposition, are less than the carrying value of the hotel property or group of hotel properties. To the extent that a hotel property or group of hotel properties is impaired, the excess carrying amount over estimated fair value is recognized as an impairment charge. Fair value is determined based upon the discounted cash flows of the hotel property or group of hotel properties, bids, quoted market prices or independent appraisals, as considered necessary. The estimation and evaluation of future cash flows, in particular the holding period for real estate assets and asset composition and/or concentration within real estate portfolios, relies on judgments and assumptions regarding holding period, current and future operating performance and current and future market conditions. It is possible that such judgments and/or estimates will change; in particular, the effects of the COVID-19 pandemic could cause economic and market conditions to continue to deteriorate, and if this occurs, or if the Company's expected holding period for real estate assets changes, the Company may recognize impairment charges or losses on sale in future periods reflecting either changes in estimate, circumstance or the estimated market value of assets. Based on market conditions and the Company's plans with respect to its hotel properties as of March 31, 2020, the Company believes that the carrying amounts of the hotel properties are recoverable and no impairment charges were recorded during the three months ended March 31, 2020. However, actual results are subject to a high degree of uncertainty due to the volatility of macroeconomic trends and the evolving nature of the COVID-19 pandemic. Intangible Assets and Goodwill —Intangible assets include trademarks, corporate customer relationships and licenses related to certain internal-use software. Corporate customer relationships and software licenses are amortized using the straight-line method over their estimated useful lives; the estimated useful life of customer relationships is 20 years, and the estimated useful life of software licenses is the remaining non-cancellable term of each respective contract. Trademarks are not amortized. Goodwill represents the purchase price in excess of the fair value of net assets acquired in conjunction with the acquisition of the Company's predecessor in 2010. Definite-lived intangible assets are reviewed for impairment quarterly and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Indefinite-lived intangible assets, including goodwill, are reviewed for impairment quarterly, and the Company tests for impairment more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has two reportable operating segments, owned hotels and franchise and management. There is no goodwill associated with our franchise and management segment. Management analyzes goodwill associated with all owned hotels when analyzing for potential impairment. The Company first assesses qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. As of March 31, 2020, the Company believes that the carrying amount of its intangible assets, including goodwill, are recoverable and there are no changes in circumstances that would more likely than not reduce the fair value of its reporting units below their carrying amount; therefore, no impairment charges were recorded during the three months ended March 31, 2020. However, if the effects of the COVID-19 pandemic cause economic and market conditions to continue to deteriorate, in particular if the market price of the Company's Paired Shares further declines, these events could result in impairment charges in the future. Actual results are subject to a high degree of uncertainty due to the volatility of macroeconomic trends and the evolving nature of the COVID-19 pandemic. Revenue from Owned and Operated Hotels — Revenue generated from owned and operated hotels consists of room and other hotel revenues recognized when services are provided. When a reservation is made, the Company deems that the parties have approved a contract in accordance with customary business practices and are committed to perform their respective obligations. At such time, each party’s rights regarding the services to be transferred are identified, payment terms are specified, the contract has commercial substance and, in most instances, it is probable the Company will collect substantially all consideration to which it will be entitled in exchange for services. Each room night consumed by a guest with a cancellable reservation represents a contract whereby the Company has a performance obligation to provide the room night at an agreed upon price. For cancellable reservations, the Company recognizes revenue as each performance obligation (i.e., each room night) is met. Such contract is renewed if the guest continues their stay. For room nights consumed by a guest with a non-cancellable reservation, the entire reservation period represents the contract term whereby the Company has a performance obligation to provide the room night or nights at an agreed upon price. For non-cancellable reservations, the Company recognizes revenue over the term of the performance period (i.e., the reservation period) as room nights are consumed. For these reservations, the room rate is typically fixed over the reservation period. The Company uses an output method based on performance completed to date (i.e., room nights consumed) to determine the amount of revenue it recognizes on a daily basis if the length of a non-cancellable reservation exceeds one night since consumption of room nights indicates when services are transferred to the guest. In certain instances, variable consideration may exist with respect to the transaction price, such as discounts, coupons and price concessions made upon guest checkout. In evaluating its performance obligation, the Company bundles the obligation to provide the guest the room itself with other obligations (such as free WiFi, grab and go breakfast, access to on-site laundry facilities and parking), as the other obligations are not distinct and separable because the guest cannot benefit from the additional amenities without the consumed room night. The Company’s obligation to provide the additional items or services is not separately identifiable from the fundamental contractual obligation (i.e., providing the room and its contents). The Company has no performance obligations once a guest’s stay is complete. Certain revenues are generated through third-party intermediaries or distribution channels (i.e., online travel agents). Regardless of the basis on which the Company is compensated (i.e., gross or net), the Company is responsible for fulfilling the promise to provide the hotel room and related services to the guest and retains inventory risk. Since the Company controls the inventory and services provided and because third-party intermediaries are typically not contractually required to guarantee room night consumption, the Company is the principal in these transactions. As such, the Company is required to record revenue at an amount equal to the price charged to the guest (i.e., on a gross basis). Third-party intermediaries that pay the Company directly (i.e., on a net basis) typically charge the guest additional fees, blend the room offering with other offerings at amounts which are not allocable and may adjust the price without the Company’s approval. As such, the Company is unable to calculate the room rate charged to the guest. Since any estimate the Company would make has significant uncertainty that ultimately would not be resolved, despite its role as principal, in these instances the Company records revenue equal to the amount paid by the third-party intermediaries (i.e., the net amount). Revenue from Franchise and Management Fees — Revenue generated from franchise and management fees consists of the following: • Franchise fees, which consist of an initial fee and an ongoing royalty fee based on a percentage of a hotel’s monthly revenue in exchange for the access to and use of the Company’s brand name and other intellectual property. Initial fees are deferred and recognized over the expected contract or customer life. Royalty fees are recognized over time as franchisees derive value from the license to use the intellectual property. • Management fees, which consist of an ongoing base fee calculated as a percentage of a hotel’s monthly revenue in exchange for on-site hotel management services. Management fees are recognized over time as third-party hotel owners derive value from on-site personnel and related services. • Other revenues from franchised and managed properties, which include the reimbursement of costs incurred on behalf of third-party hotel owners on a direct and an indirect basis, as follows: ◦ Direct costs incurred with respect to management and franchise agreements include on-site hotel personnel and incremental reservation and distribution costs for which the Company is reimbursed on a dollar-for-dollar basis. Since the Company employs the hotel personnel and has discretion over reservation and distribution costs, it is the principal with respect to these services and revenue is recognized on a gross basis. ◦ Indirect costs incurred with respect to franchise agreements include costs associated with certain shared system-wide platforms (i.e., system services), such as marketing, technology infrastructure, central reservations, national sales and revenue management systems. The Company is reimbursed for indirect costs through a system service fee, or program fee, based on a percentage of a hotel’s monthly revenue. System service fees are recognized over time as franchisees derive value from the license to use these processes and systems. The Company has discretion over how it spends system service fees and is the principal with respect to these services. Revenue is recognized on a gross basis; expense is recognized as incurred. Over time, the Company manages system services to break-even, but the timing of system service fee revenues will typically not align with expenses incurred to operate the programs. The promise to provide access to the Company’s intellectual property is combined with the promise to provide system services to form a single performance obligation since the promises generally accompany one another. Hotel management services form a single performance obligation. As noted above, each identified performance obligation is considered to be a series of services transferred over time. Revenue is recognized on an output method based on performance completed to date. The Company recognizes revenue in the amount to which it has a right to bill third parties under their respective franchise or management agreements, as it has a right to consideration in an amount that corresponds directly with the third parties’ hotel revenues. Franchise, management and system service fees are characterized as variable consideration and vary from period to period. In the event that fees include variables that extend beyond the current period, the Company uses the most likely amount method to determine the amount of revenue to record based on a reasonable revenue forecast for the applicable hotel. In most instances, the Company does not have constraining estimates, as third-party hotel revenues are typically available and obtained monthly. Recently Issued Accounting Standards Reference Rate Reform —In March 2020, the FASB issued an accounting standards update that provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR, subject to meeting certain criteria. The Company adopted this update on March 12, 2020, and the update is effective through December 31, 2022, during which time the Company may elect to apply the optional expedients and exceptions offered under the standard. The Company's variable rate debt and interest rate swap are tied to rates that reference LIBOR (see Notes 7 and 8). As of March 31, 2020, the Company had not applied any of these optional expedients or exceptions. The adoption of this update did not, and is not expected to, have a material effect on the Company's condensed consolidated financial statements. Income Taxes —In December 2019, the FASB issued an accounting standards update which simplifies the accounting for income taxes. The update amends several topics including interim period accounting for enacted changes in tax law and year- to-date loss limitation in interim-period tax accounting. This update will be effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, and may be early adopted. The Company does not expect the adoption of this update to have a material effect on its condensed consolidated financial statements. Fair Value Measurement— In August 2018, the FASB issued an accounting standards update which modifies the disclosure requirements for fair value measurements in Topic 820, Fair Value Measurement . The Company adopted this update on January 1, 2020. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Intangibles-Goodwill and Other—Internal-Use Software— In August 2018, the FASB issued an accounting standards update which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The Company adopted this update on January 1, 2020, using a prospective transition method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Goodwill— In January 2017, the FASB issued an accounting standards update in which the guidance on testing for goodwill was updated to eliminate Step 2 in the determination on whether goodwill should be considered impaired. Annual and/or interim assessments are still required. The Company adopted this update on January 1, 2020, using a prospective transition method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Financial Instruments—Credit Losses— In June 2016, the FASB issued an accounting standards update which requires the measurement of an impairment allowance for certain financial assets based on a company’s current estimate of all contractual cash flows it does not expect to collect. The new standard primarily impacts the manner in which the Company estimates its allowance for uncollectible trade receivables. The standard requires the Company to measure its allowance for doubtful accounts based on current conditions, historical experience and reasonable and supportable forecasts for each pool of receivables with similar risk characteristics. The Company adopted this update on January 1, 2020, using a modified retrospective method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements and had no effect on or impact to retained earnings. |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Presentation —Certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP have been condensed or omitted in the accompanying condensed consolidated financial statements. ESH REIT believes the disclosures made are adequate to prevent the information presented from being misleading. However, the condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2019, included in the combined annual report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 26, 2020. The accompanying condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring items) necessary to present fairly ESH REIT’s financial position as of March 31, 2020 and the results of ESH REIT’s operations, comprehensive income, changes in equity and cash flows for the three months ended March 31, 2020 and 2019. Interim results are not necessarily indicative of full year performance because of acquisitions, dispositions, financing or other capital transactions and the impact of accounting for variable rental payments under lease arrangements. Use of Estimates —The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the amounts of revenues and expenses during the reporting period. Management used significant estimates to determine the estimated useful lives of tangible assets, as well as in the assessment of tangible and intangible assets for impairment. Actual results could differ from those estimates. Property and Equipment —Property and equipment additions are recorded at cost. Major improvements that extend the life or utility of property or equipment are capitalized and depreciated over a period equal to the shorter of the estimated useful life of the improvement or the remaining estimated useful life of the asset. Ordinary repairs and maintenance are charged to expense as incurred. Depreciation and amortization are recorded on a straight-line basis over estimated useful lives which range from 2 to 49 years. Management assesses long-lived assets for potential impairment quarterly, as well as when events or changes in circumstances indicate the carrying amount of an asset or group of assets may not be recoverable. The identification of events or changes in circumstances that indicate the carrying value of assets may not be recoverable requires judgment. ESH REIT reviews for impairment indicators at the lowest level of identifiable cash flows based on quantitative, qualitative and certain industry-related factors. Quantitative factors include, but are not limited to, hotel property EBITDA, EBITDA margins and EBITDA multiples, and serve to screen assets or asset groups with historical, current or projected operating cash flow losses or deterioration. Qualitative factors include a change in physical condition, economic environment, regulatory environment or primary use, including the evaluation of the asset or group of assets for disposition. Recoverability of property and equipment is measured by a comparison of the carrying amount of a hotel property or group of hotel properties (grouped under ESH REIT’s leases) to the estimated future undiscounted cash flows expected to be generated by the hotel property or group of hotel properties. Impairment is recognized when estimated future undiscounted cash flows, including expected proceeds from disposition, are less than the carrying value of the hotel property or group of hotel properties. To the extent that a hotel property or group of hotel properties is impaired, the excess carrying amount over estimated fair value is recognized as an impairment charge. Fair value is determined based upon the discounted cash flows of the hotel property or group of hotel properties, bids, quoted market prices or independent appraisals, as considered necessary. The estimation and evaluation of future cash flows, in particular the holding period for real estate assets and asset composition and/or concentration within real estate portfolios, relies on judgments and assumptions regarding holding period, current and future operating performance and current and future market conditions. It is possible that such judgments and/or estimates will change; in particular, the effects of the COVID-19 pandemic could cause economic and market conditions to continue to deteriorate, and if this occurs, or if ESH REIT's expected holding period for real estate assets changes, ESH REIT may recognize impairment charges or losses on sale in future periods reflecting either changes in estimate, circumstance or the estimated market value of assets. Based on market conditions and ESH REIT's plans with respect to its hotel properties as of March 31, 2020, ESH REIT believes that the carrying amounts of the hotel properties are recoverable and no impairment charges were recorded during the three months ended March 31, 2020. However, actual results are subject to a high degree of uncertainty due to the volatility of macroeconomic trends and the evolving nature of the COVID-19 pandemic. Intangible Assets and Goodwill —Intangible assets include licenses related to certain internal-use software. Licenses are amortized using the straight-line method over their estimated useful life, which is the remaining non-cancellable term of each respective contract. Goodwill represents the purchase price in excess of the fair value of net assets acquired in conjunction with the acquisition of ESH REIT's predecessor in 2010. Definite-lived intangible assets are reviewed for impairment quarterly and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is reviewed for impairment quarterly, and ESH REIT tests for impairment more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. ESH REIT has one operating segment, which is its reporting unit; therefore, management analyzes goodwill associated with all hotels when analyzing for potential impairment. ESH REIT first assesses qualitative factors to determine if it is more likely than not that the fair value of its reporting unit is less than its carrying amount. ESH REIT believes that the carrying amount of its intangible assets, including goodwill, are recoverable and there are no changes in circumstances that would more likely than not reduce the fair value of its reporting unit below its carrying amount; therefore, no impairment charges were recorded during the three months ended March 31, 2020. However, if the effects of the COVID-19 pandemic cause economic and market conditions to continue to deteriorate, in particular if the market price of Paired Shares further declines, these events could result in impairment charges in the future. Actual results are subject to a high degree of uncertainty due to the volatility of macroeconomic trends and the evolving nature of the COVID-19 pandemic. Revenue Recognition —ESH REIT’s sole source of revenues is rental revenue derived from operating leases with subsidiaries of the Corporation (i.e., all revenues are generated from agreements with related parties (see Note 10)). Rental revenues are recorded on a straight-line basis as they are earned during the lease terms. Rents receivable from Extended Stay America, Inc. on the accompanying condensed consolidated balance sheets represent monthly rental amounts contractually due. Deferred rents receivable from Extended Stay America, Inc. on the accompanying condensed consolidated balance sheets represent the cumulative difference between straight-line rental revenues recognized and rental revenues contractually due. Lease rental payments received prior to rendering services are included in unearned rental revenues from Extended Stay America, Inc. on the accompanying condensed consolidated balance sheets. Variable rental revenues, specifically percentage rental revenues related to hotel revenues of the Operating Lessees, are recognized when such amounts are fixed and determinable (i.e., only when percentage rental revenue thresholds have been achieved). Recently Issued Accounting Standards Reference Rate Reform —In March 2020, the FASB issued an accounting standards update that provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR, subject to meeting certain criteria. ESH REIT adopted this update on March 12, 2020, and the update is effective through December 31, 2022, during which time ESH REIT may elect to apply the optional expedients and exceptions offered under the standard. ESH REIT's variable rate debt and interest rate swap are tied to rates that reference LIBOR (see Notes 7 and 8). As of March 31, 2020, ESH REIT had not applied any of these optional expedients or exceptions. The adoption of this update did not, and is not expected to, have a material effect on ESH REIT's condensed consolidated financial statements. Income Taxes —In December 2019, the FASB issued an accounting standards update which simplifies the accounting for income taxes. The update amends several topics including interim period accounting for enacted changes in tax law and year-to-date loss limitation in interim-period tax accounting. This update will be effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, and may be early adopted. ESH REIT does not expect the adoption of this update to have a material effect on its condensed consolidated financial statements. Fair Value Measurement— In August 2018, the FASB issued an accounting standards update which modifies the disclosure requirements for fair value measurements in Topic 820, Fair Value Measurement . ESH REIT adopted this update on January 1, 2020. The adoption of this update did not have a material effect on ESH REIT's condensed consolidated financial statements. Intangibles-Goodwill and Other—Internal-Use Software— In August 2018, the FASB issued an accounting standards update which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. ESH REIT adopted this update on January 1, 2020, using a prospective transition method. The adoption of this update did not have a material effect on ESH REIT's condensed consolidated financial statements. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of the Corporation’s unrestricted common stock outstanding. Diluted net income per share is computed by dividing net income available to common shareholders, as adjusted for potentially dilutive securities, by the weighted-average number of shares of unrestricted common stock outstanding plus potentially dilutive securities. Dilutive securities include certain equity-based awards (see Note 13) and are included in the calculation provided that the inclusion of such securities is not anti-dilutive. The calculations of basic and diluted net income per share, including a reconciliation of the numerators and denominators, are as follows (in thousands, except per share data): Three Months Ended 2020 2019 Numerator: Net income available to Extended Stay America, Inc. common shareholders - basic $ 4,554 $ 21,934 Income attributable to noncontrolling interests assuming conversion (2) (4) Net income available to Extended Stay America, Inc. common shareholders - diluted $ 4,552 $ 21,930 Denominator: Weighted-average number of Extended Stay America, Inc. common shares outstanding - basic 177,990 188,348 Dilutive securities 181 228 Weighted-average number of Extended Stay America, Inc. common shares outstanding - diluted $ 178,171 $ 188,576 Net income per Extended Stay America, Inc. common share - basic $ 0.03 $ 0.12 Net income per Extended Stay America, Inc. common share - diluted $ 0.03 $ 0.12 |
NET INCOME PER SHARE - REIT
NET INCOME PER SHARE - REIT | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of the Corporation’s unrestricted common stock outstanding. Diluted net income per share is computed by dividing net income available to common shareholders, as adjusted for potentially dilutive securities, by the weighted-average number of shares of unrestricted common stock outstanding plus potentially dilutive securities. Dilutive securities include certain equity-based awards (see Note 13) and are included in the calculation provided that the inclusion of such securities is not anti-dilutive. The calculations of basic and diluted net income per share, including a reconciliation of the numerators and denominators, are as follows (in thousands, except per share data): Three Months Ended 2020 2019 Numerator: Net income available to Extended Stay America, Inc. common shareholders - basic $ 4,554 $ 21,934 Income attributable to noncontrolling interests assuming conversion (2) (4) Net income available to Extended Stay America, Inc. common shareholders - diluted $ 4,552 $ 21,930 Denominator: Weighted-average number of Extended Stay America, Inc. common shares outstanding - basic 177,990 188,348 Dilutive securities 181 228 Weighted-average number of Extended Stay America, Inc. common shares outstanding - diluted $ 178,171 $ 188,576 Net income per Extended Stay America, Inc. common share - basic $ 0.03 $ 0.12 Net income per Extended Stay America, Inc. common share - diluted $ 0.03 $ 0.12 |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
NET INCOME PER SHARE | NET INCOME PER SHAREBasic net income per share is computed by dividing net income available to Class A and Class B common shareholders by the weighted-average number of shares of unrestricted Class A and Class B common stock outstanding, respectively. Diluted net income per share is computed by dividing net income available to Class A and Class B common shareholders, as adjusted for potentially dilutive securities, by the weighted-average number of shares of unrestricted Class A and Class B common stock outstanding, respectively, plus potentially dilutive securities. Dilutive securities include certain equity-based awards and are included in the calculation provided that the inclusion of such securities is not anti-dilutive. The calculations of basic and diluted net income per share, including a reconciliation of the numerators and denominators, are as follows (in thousands, except per share data): Three Months Ended 2020 2019 Numerator: Net income $ 7,918 $ 15,066 Less preferred dividends (4) (4) Net income available to ESH Hospitality, Inc. common shareholders $ 7,914 $ 15,062 Class A: Net income available to ESH Hospitality, Inc. Class A common $ 4,627 $ 8,598 Amounts attributable to ESH Hospitality, Inc. Class B (2) (4) Net income available to ESH Hospitality, Inc. Class A common $ 4,625 $ 8,594 Class B: Net income available to ESH Hospitality, Inc. Class B common $ 3,287 $ 6,464 Amounts attributable to ESH Hospitality, Inc. Class B 2 4 Net income available to ESH Hospitality, Inc. Class B common $ 3,289 $ 6,468 Denominator: Class A: Weighted-average number of ESH Hospitality, Inc. Class A common 250,494 250,494 Class B: Weighted-average number of ESH Hospitality, Inc. Class B common 177,990 188,348 Dilutive securities 181 228 Weighted-average number of ESH Hospitality, Inc. Class B common 178,171 188,576 Net income per ESH Hospitality, Inc. common share - Class A - basic $ 0.02 $ 0.03 Net income per ESH Hospitality, Inc. common share - Class A - diluted $ 0.02 $ 0.03 Net income per ESH Hospitality, Inc. common share - Class B - basic $ 0.02 $ 0.03 Net income per ESH Hospitality, Inc. common share - Class B - diluted $ 0.02 $ 0.03 |
HOTEL ACQUISITIONS
HOTEL ACQUISITIONS | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
HOTEL ACQUISITIONS | HOTEL ACQUISITIONSNo hotels were acquired during the three months ended March 31, 2020. On November 12, 2019, the Company acquired a 121-room operating hotel from Crestwood Suites of Lakeland, LLC for $10.0 million. Other than ordinary components of prorated net working capital, no liabilities were assumed in the purchase. The majority of the purchase price was allocated to building and improvements, with estimated useful lives ranging from five |
HOTEL ACQUISITIONS - REIT
HOTEL ACQUISITIONS - REIT | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
HOTEL ACQUISITIONS | HOTEL ACQUISITIONSNo hotels were acquired during the three months ended March 31, 2020. On November 12, 2019, the Company acquired a 121-room operating hotel from Crestwood Suites of Lakeland, LLC for $10.0 million. Other than ordinary components of prorated net working capital, no liabilities were assumed in the purchase. The majority of the purchase price was allocated to building and improvements, with estimated useful lives ranging from five |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
HOTEL ACQUISITIONS | HOTEL ACQUISITIONSNo hotels were acquired during the three months ended March 31, 2020. On November 12, 2019, ESH REIT acquired a 121-room operating hotel from Crestwood Suites of Lakeland, LLC for $10.0 million. Other than ordinary components of prorated net working capital, no liabilities were assumed in the purchase. The majority of the purchase price was allocated to building and improvements, with estimated useful lives ranging from five |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Net investment in property and equipment as of March 31, 2020 and December 31, 2019, consists of the following (in thousands): March 31, December 31, 2019 Hotel properties: Land and site improvements (1) $ 1,231,474 $ 1,228,231 Building and improvements 2,814,840 2,792,579 Furniture, fixtures and equipment (2) 749,815 745,145 Total hotel properties 4,796,129 4,765,955 Development in process (3) 80,269 70,864 Corporate furniture, fixtures, equipment, software and other 30,894 30,680 Total cost 4,907,292 4,867,499 Less accumulated depreciation: Hotel properties (1,393,347) (1,353,772) Corporate furniture, fixtures, equipment, software and other (21,124) (20,178) Total accumulated depreciation (1,414,471) (1,373,950) Property and equipment — net $ 3,492,821 $ 3,493,549 _________________________________ (1) Includes finance lease asset of $3.2 million as of March 31, 2020 and December 31, 2019. (2) Includes finance lease asset of $0.4 million and $0 as of March 31, 2020 and December 31, 2019, respectively. (3) Includes finance lease asset of $0.8 million as of March 31, 2020 and December 31, 2019. As of March 31, 2020 and December 31, 2019, development in process consisted of 14 and 15 land parcels, respectively, that were in various phases of construction and/or development. The Company expects to delay commencement of construction at four of these locations as a result of current market uncertainty. During the three months ended March 31, 2020, the Company completed construction of a 120-room hotel in Florida. The hotel opened in March 2020. During 2019, the Company completed construction of a 124-room hotel in Florida and a 136-room hotel in Arizona. The hotels opened in December 2019. During the three months ended March 31, 2020, these hotels contributed total room and other hotel revenues, total operating expenses and income before income tax expense as follows (in thousands): Three Months Ended March 31, 2020 Total room and other hotel revenues $ 1,683 Total operating expenses 1,153 Income before income tax expense 530 |
PROPERTY AND EQUIPMENT - REIT
PROPERTY AND EQUIPMENT - REIT | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Net investment in property and equipment as of March 31, 2020 and December 31, 2019, consists of the following (in thousands): March 31, December 31, 2019 Hotel properties: Land and site improvements (1) $ 1,231,474 $ 1,228,231 Building and improvements 2,814,840 2,792,579 Furniture, fixtures and equipment (2) 749,815 745,145 Total hotel properties 4,796,129 4,765,955 Development in process (3) 80,269 70,864 Corporate furniture, fixtures, equipment, software and other 30,894 30,680 Total cost 4,907,292 4,867,499 Less accumulated depreciation: Hotel properties (1,393,347) (1,353,772) Corporate furniture, fixtures, equipment, software and other (21,124) (20,178) Total accumulated depreciation (1,414,471) (1,373,950) Property and equipment — net $ 3,492,821 $ 3,493,549 _________________________________ (1) Includes finance lease asset of $3.2 million as of March 31, 2020 and December 31, 2019. (2) Includes finance lease asset of $0.4 million and $0 as of March 31, 2020 and December 31, 2019, respectively. (3) Includes finance lease asset of $0.8 million as of March 31, 2020 and December 31, 2019. As of March 31, 2020 and December 31, 2019, development in process consisted of 14 and 15 land parcels, respectively, that were in various phases of construction and/or development. The Company expects to delay commencement of construction at four of these locations as a result of current market uncertainty. During the three months ended March 31, 2020, the Company completed construction of a 120-room hotel in Florida. The hotel opened in March 2020. During 2019, the Company completed construction of a 124-room hotel in Florida and a 136-room hotel in Arizona. The hotels opened in December 2019. During the three months ended March 31, 2020, these hotels contributed total room and other hotel revenues, total operating expenses and income before income tax expense as follows (in thousands): Three Months Ended March 31, 2020 Total room and other hotel revenues $ 1,683 Total operating expenses 1,153 Income before income tax expense 530 |
ESH Hospitality, Inc. | |
Property, Plant and Equipment [Line Items] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Net investment in property and equipment as of March 31, 2020 and December 31, 2019, consists of the following (in thousands): March 31, December 31, Hotel properties: Land and site improvements (1) $ 1,233,841 $ 1,230,598 Building and improvements 2,846,322 2,824,061 Furniture, fixtures and equipment (2) 756,088 751,417 Total hotel properties 4,836,251 4,806,076 Development in process (3) 80,269 70,864 Other 1,675 1,675 Total cost 4,918,195 4,878,615 Less accumulated depreciation (1,412,562) (1,372,595) Property and equipment — net $ 3,505,633 $ 3,506,020 _________________________________ (1) Includes finance lease asset of $3.2 million as of March 31, 2020 and December 31, 2019. (2) Includes finance lease asset of $0.4 million and $0 as of March 31, 2020 and December 31, 2019, respectively (3) Includes finance lease asset of $0.8 million as of March 31, 2020 and December 31, 2019. As of March 31, 2020 and December 31, 2019, development in process consisted of 14 and 15 land parcels, respectively, that were in various phases of construction and/or development. ESH REIT expects to delay commencement of construction of four of these locations as a result of current market uncertainty. During the three months ended March 31, 2020, ESH REIT completed construction of a 120-room hotel in Florida. The hotel opened and was leased to the Corporation in March 2020. During 2019, ESH REIT completed construction of a 124-room hotel in Florida and a 136-room hotel in Arizona. The hotels opened and were leased to the Corporation in December 2019. During the three months ended March 31, 2020, these hotels contributed rental revenues, total operating expenses and income before income tax expense as follows (in thousands): Three Months Ended March 31, 2020 Rental revenues $ 702 Total operating expenses 586 Income before income tax expense 115 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL The Company’s intangible assets and goodwill as of March 31, 2020 and December 31, 2019, consist of the following (dollars in thousands): March 31, 2020 Gross Accumulated Net Definite-lived intangible assets—customer relationships $ 26,800 $ (12,705) $ 14,095 Definite-lived intangible assets—software licenses 10,362 (1,069) 9,293 Indefinite-lived intangible assets—trademarks 10,163 — 10,163 Total intangible assets 47,325 (13,774) 33,551 Goodwill 45,192 — 45,192 Total intangible assets and goodwill $ 92,517 $ (13,774) $ 78,743 December 31, 2019 Gross Accumulated Net Definite-lived intangible assets—customer relationships $ 26,800 $ (12,370) $ 14,430 Definite-lived intangible assets—software licenses 10,353 (763) 9,590 Indefinite-lived intangible assets—trademarks 10,163 — 10,163 Total intangible assets 47,316 (13,133) 34,183 Goodwill 45,192 — 45,192 Total intangible assets and goodwill $ 92,508 $ (13,133) $ 79,375 The remaining weighted-average amortization period for amortizing intangible assets is approximately nine years as of March 31, 2020. Estimated future amortization expense for amortizing intangible assets is as follows (in thousands): Years Ending December 31, Remainder of 2020 $ 1,924 2021 2,565 2022 2,565 2023 2,565 2024 2,565 2025 2,565 Thereafter 8,639 Total $ 23,388 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL - REIT | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL The Company’s intangible assets and goodwill as of March 31, 2020 and December 31, 2019, consist of the following (dollars in thousands): March 31, 2020 Gross Accumulated Net Definite-lived intangible assets—customer relationships $ 26,800 $ (12,705) $ 14,095 Definite-lived intangible assets—software licenses 10,362 (1,069) 9,293 Indefinite-lived intangible assets—trademarks 10,163 — 10,163 Total intangible assets 47,325 (13,774) 33,551 Goodwill 45,192 — 45,192 Total intangible assets and goodwill $ 92,517 $ (13,774) $ 78,743 December 31, 2019 Gross Accumulated Net Definite-lived intangible assets—customer relationships $ 26,800 $ (12,370) $ 14,430 Definite-lived intangible assets—software licenses 10,353 (763) 9,590 Indefinite-lived intangible assets—trademarks 10,163 — 10,163 Total intangible assets 47,316 (13,133) 34,183 Goodwill 45,192 — 45,192 Total intangible assets and goodwill $ 92,508 $ (13,133) $ 79,375 The remaining weighted-average amortization period for amortizing intangible assets is approximately nine years as of March 31, 2020. Estimated future amortization expense for amortizing intangible assets is as follows (in thousands): Years Ending December 31, Remainder of 2020 $ 1,924 2021 2,565 2022 2,565 2023 2,565 2024 2,565 2025 2,565 Thereafter 8,639 Total $ 23,388 |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL ESH REIT's intangible assets and goodwill as of March 31, 2020 and December 31, 2019, consist of the following (dollars in thousands): March 31, 2020 Gross Accumulated Net Definite-lived intangible assets—software licenses $ 10,362 $ (1,069) $ 9,293 Goodwill 44,012 — 44,012 Total intangible assets and goodwill $ 54,374 $ (1,069) $ 53,305 December 31, 2019 Gross Accumulated Net Definite-lived intangible assets—software licenses $ 10,353 $ (763) $ 9,590 Goodwill 44,012 — 44,012 Total intangible assets and goodwill $ 54,365 $ (763) $ 53,602 The remaining weighted-average amortization period for amortizing intangible assets is approximately 8 years as of March 31, 2020. Estimated future amortization expense for amortizing intangible assets is as follows (in thousands): Years Ending December 31, Remainder of 2020 $ 919 2021 1,225 2022 1,225 2023 1,225 2024 1,225 2025 1,225 Thereafter 2,249 Total $ 9,293 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Summary - The Company’s outstanding debt, net of unamortized debt discounts and unamortized deferred financing costs, as of March 31, 2020 and December 31, 2019, consists of the following (dollars in thousands): Stated Carrying Amount Unamortized Deferred Financing Costs Loan March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Stated Interest Rate Maturity Date Term loan facility ESH REIT Term Facility $ 630,909 $ 625,863 (1) $ 627,368 (1) $ 8,693 $ 9,030 LIBOR (2) + 2.00% 9/18/2026 (3) Senior notes 2025 Notes 1,300,000 1,293,315 (4) 1,292,986 (4) 14,349 15,055 5.25% 5/1/2025 2027 Notes 750,000 750,000 750,000 13,199 13,633 4.63% 10/1/2027 Revolving credit facilities ESH REIT Revolving Credit Facility 350,000 350,000 — 2,472 (5) 2,606 (5) LIBOR (2) + 2.00% 9/18/2024 Corporation Revolving Credit Facility 50,000 49,765 — 531 (5) 556 (5) LIBOR (2) + 2.25% 9/18/2024 Unsecured Intercompany Facility Unsecured Intercompany Facility (6) 75,000 — — — — 5.00% 9/18/2026 Total $ 3,068,943 $ 2,670,354 $ 39,244 $ 40,880 _________________________________ (1) The ESH REIT Term Facility (defined below) is presented net of an unamortized debt discount of $1.9 million and $2.0 million as of March 31, 2020 and December 31, 2019, respectively. (2) As of March 31, 2020 and December 31, 2019, one-month LIBOR was 0.99% and 1.76%, respectively. As of March 31, 2020 and December 31, 2019, $150.0 million and $200.0 million, respectively, of the ESH REIT Term Facility was subject to an interest rate swap at a fixed rate of 1.175%. (3) Amortizes in equal quarterly installments of $1.6 million. In addition to scheduled amortization, subject to certain exceptions, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required commencing with the year ending December 31, 2020. Annual mandatory prepayments for a given fiscal year are due during the first quarter of the following fiscal year. (4) The 2025 Notes (defined below) are presented net of an unamortized discount of $6.7 million and $7.0 million as of March 31, 2020 and December 31, 2019, respectively. (5) Unamortized deferred financing costs related to revolving credit facilities are included in other assets in the accompanying consolidated balance sheets. (6) Any outstanding debt balances and interest expense, as applicable, owed from ESH REIT to the Corporation eliminate in consolidation of the Company's condensed consolidated financial statements. ESH REIT Credit Facilities ESH REIT’s credit agreement, as may be amended and supplemented from time to time, provides for senior secured credit facilities (collectively, the “ESH REIT Credit Facilities”) which consist of a $630.9 million senior secured term loan facility (the “ESH REIT Term Facility”) and a $350.0 million senior secured revolving credit facility (the “ESH REIT Revolving Credit Facility”). Subject to the satisfaction of certain criteria, borrowings under the ESH REIT Credit Facilities may be increased by an amount of up to $600.0 million, plus additional amounts, so long as, after giving effect to the incurrence of such incremental facility and the application of proceeds thereof, ESH REIT’s pro-forma senior loan-to-value ratio is less than or equal to 45%. ESH REIT Term Facility — The ESH REIT Term Facility bears interest at a rate equal to (i) LIBOR plus 1.75% for any period during which ESH REIT maintains a public corporate family rating better than or equal to BB (with a stable or better outlook) from S&P and Ba3 (with a stable or better outlook) from Moody’s (a “Level 1 Period”) or LIBOR plus 2.00% for any period other than a Level 1 Period; or (ii) a base rate (determined by reference to the highest of (A) the prime lending rate, (B) the overnight federal funds rate plus 0.50% or (C) the one-month adjusted LIBOR rate plus 1.00%), plus 0.75% during a Level 1 Period or 1.00% for any period other than a Level 1 Period. ESH REIT has the option to prepay outstanding loans under the ESH REIT Term Facility without penalty. ESH REIT Revolving Credit Facility — Borrowings under the ESH REIT Revolving Credit Facility bear interest at a rate equal to (i) LIBOR plus a spread that ranges from 1.50% to 2.00% based on ESH REIT’s Consolidated Total Net Leverage Ratio, as defined, or (ii) a base rate (determined by reference to the highest of (A) the prime lending rate, (B) the overnight federal funds rate plus 0.50%, or (C) the one-month adjusted LIBOR rate plus 1.00%) plus a spread that ranges from 0.50% to 1.00% based on ESH REIT’s Consolidated Total Net Leverage Ratio, as defined. ESH REIT incurs a fee of 0.30% or 0.175% on the unutilized revolver balance. ESH REIT is also required to pay customary letter of credit fees and agency fees. The ESH REIT Revolving Credit Facility provides for the issuance of up to $50.0 million of letters of credit. As of March 31, 2020, ESH REIT had no letters of credit outstanding and no available borrowing capacity under the facility. In March 2020, ESH REIT borrowed the full available borrowing capacity of $350.0 million under the ESH REIT Revolving Credit Facility as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of uncertainty in business markets resulting from the COVID-19 pandemic. These proceeds may in the future be used for working capital, general corporate or other purposes permitted under the agreement. The ESH REIT Revolving Credit Facility is subject to a springing financial covenant whereby the senior loan-to-value ratio may not exceed 45% when the aggregate principal amount of borrowings and letters of credit under the ESH REIT Revolving Credit Facility, excluding up to $30.0 million of letters of credit, is equal to or greater than 35% of the aggregate available principal amount of the ESH REIT Revolving Credit Facility on the applicable fiscal quarter end date. ESH REIT 2025 Notes In May 2015 and March 2016, ESH REIT issued $500.0 million and $800.0 million, respectively, of its 5.25% senior notes due in May 2025 (the “2025 Notes”) under an indenture with Deutsche Bank Trust Company Americas, as trustee, in private placements pursuant to Rule 144A of the Securities Act of 1933, as amended. ESH REIT may redeem the 2025 Notes at any time on or after May 1, 2020, in whole or in part, at a redemption price equal to 102.625% of the principal amount, declining annually to 100% of the principal amount from May 1, 2023 and thereafter, plus accrued and unpaid interest. Prior to May 1, 2020, ESH REIT may redeem the 2025 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus a “make-whole” premium, as defined, plus accrued and unpaid interest. Upon a Change of Control, as defined, holders of the 2025 Notes have the right to require ESH REIT to redeem the 2025 Notes at 101% of the principal amount, plus accrued and unpaid interest. ESH REIT 2027 Notes In September 2019, ESH REIT issued $750.0 million of its 4.625% senior notes due in 2027 (the “2027 Notes”) under an indenture with Deutsche Bank Trust Company Americas, as trustee, at a price equal to 100% of par value in a private placement pursuant to Rule 144A of the Securities Act of 1933, as amended. ESH REIT may redeem the 2027 Notes at any time on or after October 1, 2022, in whole or in part, at a redemption price equal to 102.313% of the principal amount, declining annually to 100% of the principal amount from October 1, 2024 and thereafter, plus accrued and unpaid interest. Prior to October 1, 2022, ESH REIT may redeem the 2027 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus a “make-whole” premium, as defined, plus accrued and unpaid interest. Prior to October 1, 2022, subject to certain conditions, ESH REIT may redeem up to 35% of the aggregate principal amount of the 2027 Notes at a redemption price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, with the net cash proceeds from certain equity offerings, provided 65% of the original amount of the principal remains outstanding after the occurrence of each such redemption. Upon a Change of Control, as defined, holders of the 2027 Notes have the right to require ESH REIT to redeem the 2027 Notes at 101% of the principal amount, plus accrued and unpaid interest. Corporation Revolving Credit Facility The Corporation’s revolving credit facility, as may be amended and supplemented from time to time (the “Corporation Revolving Credit Facility”), provides for the issuance of up to $50.0 million of letters of credit as well as borrowing on same day notice, referred to as swingline loans, in an amount of up to $20.0 million. Borrowings under the Corporation Revolving Credit Facility bear interest at a rate equal to (i) LIBOR plus 2.25% or (ii) a base rate (determined by reference to the highest of (A) the prime lending rate, (B) the overnight federal funds rate plus 0.50% or (C) the one-month adjusted LIBOR plus 1.00%) plus 1.25%. In addition to paying interest on outstanding principal, the Corporation incurs a fee of 0.30% or 0.175% on the unutilized revolver balance, based on the amount outstanding under the facility. As of March 31, 2020, the Corporation had one letter of credit outstanding of $0.2 million and no available borrowing capacity under the facility. In March 2020, the Company borrowed the then-remaining available borrowing capacity of $49.8 million under the Corporation Revolving Credit Facility as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of uncertainty in business markets resulting from the COVID-19 pandemic. The proceeds may in the future be used for working capital, general corporate or other purposes permitted under the agreement. Obligations under the Corporation Revolving Credit Facility are guaranteed by certain existing and future material domestic subsidiaries of the Corporation, excluding ESH REIT and its subsidiaries and subject to customary exceptions. The facility is secured, subject to certain exceptions, by a first priority security interest in substantially all of the assets of the Corporation and the guarantors. If obligations are outstanding under the facility during any fiscal quarter, the Corporation Revolving Credit Facility requires that the Consolidated Leverage Ratio, as defined, calculated as of the end of such fiscal quarter for any consecutive four quarter period, be less than or equal to 8.75 to 1.00 (the "Leverage Covenant"). The facility is also subject to a springing financial covenant whereby the senior loan-to-value ratio may not exceed 45% when the aggregate principal amount of borrowings and letters of credit under the Corporation Revolving Credit Facility, excluding up to $30.0 million of letters of credit, is equal to or greater than 25% of the aggregate available principal amount of the Corporation Revolving Credit Facility on the applicable fiscal quarter end date. Unsecured Intercompany Facility In August 2016, ESH REIT, as borrower, and the Corporation, as lender, entered into an unsecured intercompany credit facility, as may be amended and supplemented from time to time (the “Unsecured Intercompany Facility”). Under the Unsecured Intercompany Facility, ESH REIT may borrow up to $300.0 million, plus additional amounts, in each case subject to certain conditions. Loans under the Unsecured Intercompany Facility bear interest at an annual rate of 5.0%. ESH REIT has the option to prepay outstanding balances under the facility without penalty. As of March 31, 2020 and December 31, 2019, the amount outstanding under the facility was $0. Covenants The ESH REIT Credit Facilities, the 2027 Notes, the 2025 Notes, the Corporation Revolving Credit Facility and the Unsecured Intercompany Facility contain a number of restrictive covenants that, among other things and subject to certain exceptions, limit the Corporation’s or ESH REIT’s ability and the ability of their respective subsidiaries to engage in certain transactions. In addition, the ESH REIT Revolving Credit Facility and the Corporation Revolving Credit Facility contain financial covenants that, subject to certain conditions, require compliance with certain senior loan-to-value and consolidated leverage ratios. The agreements governing the Corporation’s and ESH REIT’s indebtedness also contain certain customary representations and warranties, affirmative covenants and events of default, including, but not limited to, cross-defaults to certain other indebtedness and, in the case of the ESH REIT Credit Facilities and the Unsecured Intercompany Facility, certain material operating leases and management agreements. As of March 31, 2020, the Corporation and ESH REIT were in compliance with all covenants under their respective debt agreements. The Company’s continued compliance with these covenants could be impacted by current or future economic conditions associated with the COVID-19 pandemic. The Company's failure to maintain compliance with its debt covenants or to pay debt obligations as they become due would give rise to default under one or more agreements governing the Company's indebtedness, and could entitle the lenders under the defaulted agreements to accelerate the maturity of the amounts thereunder, which could raise substantial doubt about the Company's ability to continue as a going concern. On May 6, 2020, the Company executed an amendment to the Corporation Revolving Credit Facility (See Note 14). Interest Expense, net —The components of net interest expense during the three months ended March 31, 2020 and 2019, are as follows (in thousands): Three Months Ended March 31, 2020 2019 Contractual interest (1) $ 31,326 $ 28,717 Amortization of deferred financing costs and debt discount 2,052 1,997 Other costs (2) 293 401 Interest Income (986) (1,511) Total $ 32,685 $ 29,604 ______________________ (1) Includes dividends on shares of mandatorily redeemable Corporation preferred stock. Net of capitalized interest of $0.9 million and $0.3 million, respectively. (2) Includes interest expense on finance leases (see Note 12) and unused facility fees. Mandatorily Redeemable Preferred Stock —The Corporation has authorized 350.0 million shares of preferred stock, $0.01 par value, of which 7,130 shares of mandatorily redeemable voting preferred stock were issued and outstanding as of March 31, 2020 and December 31, 2019. Dividends on these mandatorily redeemable voting preferred shares are payable quarterly in arrears at a rate of 8.0% per year. With respect to dividend, distribution and liquidation rights, the 8.0% voting preferred stock ranks senior to the Corporation’s common stock. Holders of the 8.0% voting preferred stock have the right to require the Corporation to redeem in cash the 8.0% voting preferred stock at $1,000 per share plus any accumulated unpaid dividends. On November 15, 2020, the Corporation shall mandatorily redeem all of the 8.0% voting preferred stock at $1,000 per share plus any accumulated unpaid dividends. Fair Value of Debt and Mandatorily Redeemable Preferred Stock —As of March 31, 2020 and December 31, 2019, the estimated fair value of the Company’s debt was $2.7 billion, and the estimated fair value of the Corporation’s 8.0% mandatorily redeemable preferred stock was $7.2 million and $7.1 million, respectively. Estimated fair values are determined by comparing current borrowing rates and risk spreads offered in the market (Level 2 fair value measures) or quoted market prices (Level 1 fair value measures), when available, to the stated interest rates and spreads on the Company’s debt and the Corporation’s 8.0% mandatorily redeemable preferred stock. As of March 31, 2020 and December 31, 2019, the estimated fair value of each of the Corporation and ESH REIT revolving credit facilities is equal to its carrying value due to its short-term nature and frequent settlement. |
DEBT - REIT
DEBT - REIT | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
DEBT | DEBT Summary - The Company’s outstanding debt, net of unamortized debt discounts and unamortized deferred financing costs, as of March 31, 2020 and December 31, 2019, consists of the following (dollars in thousands): Stated Carrying Amount Unamortized Deferred Financing Costs Loan March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Stated Interest Rate Maturity Date Term loan facility ESH REIT Term Facility $ 630,909 $ 625,863 (1) $ 627,368 (1) $ 8,693 $ 9,030 LIBOR (2) + 2.00% 9/18/2026 (3) Senior notes 2025 Notes 1,300,000 1,293,315 (4) 1,292,986 (4) 14,349 15,055 5.25% 5/1/2025 2027 Notes 750,000 750,000 750,000 13,199 13,633 4.63% 10/1/2027 Revolving credit facilities ESH REIT Revolving Credit Facility 350,000 350,000 — 2,472 (5) 2,606 (5) LIBOR (2) + 2.00% 9/18/2024 Corporation Revolving Credit Facility 50,000 49,765 — 531 (5) 556 (5) LIBOR (2) + 2.25% 9/18/2024 Unsecured Intercompany Facility Unsecured Intercompany Facility (6) 75,000 — — — — 5.00% 9/18/2026 Total $ 3,068,943 $ 2,670,354 $ 39,244 $ 40,880 _________________________________ (1) The ESH REIT Term Facility (defined below) is presented net of an unamortized debt discount of $1.9 million and $2.0 million as of March 31, 2020 and December 31, 2019, respectively. (2) As of March 31, 2020 and December 31, 2019, one-month LIBOR was 0.99% and 1.76%, respectively. As of March 31, 2020 and December 31, 2019, $150.0 million and $200.0 million, respectively, of the ESH REIT Term Facility was subject to an interest rate swap at a fixed rate of 1.175%. (3) Amortizes in equal quarterly installments of $1.6 million. In addition to scheduled amortization, subject to certain exceptions, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required commencing with the year ending December 31, 2020. Annual mandatory prepayments for a given fiscal year are due during the first quarter of the following fiscal year. (4) The 2025 Notes (defined below) are presented net of an unamortized discount of $6.7 million and $7.0 million as of March 31, 2020 and December 31, 2019, respectively. (5) Unamortized deferred financing costs related to revolving credit facilities are included in other assets in the accompanying consolidated balance sheets. (6) Any outstanding debt balances and interest expense, as applicable, owed from ESH REIT to the Corporation eliminate in consolidation of the Company's condensed consolidated financial statements. ESH REIT Credit Facilities ESH REIT’s credit agreement, as may be amended and supplemented from time to time, provides for senior secured credit facilities (collectively, the “ESH REIT Credit Facilities”) which consist of a $630.9 million senior secured term loan facility (the “ESH REIT Term Facility”) and a $350.0 million senior secured revolving credit facility (the “ESH REIT Revolving Credit Facility”). Subject to the satisfaction of certain criteria, borrowings under the ESH REIT Credit Facilities may be increased by an amount of up to $600.0 million, plus additional amounts, so long as, after giving effect to the incurrence of such incremental facility and the application of proceeds thereof, ESH REIT’s pro-forma senior loan-to-value ratio is less than or equal to 45%. ESH REIT Term Facility — The ESH REIT Term Facility bears interest at a rate equal to (i) LIBOR plus 1.75% for any period during which ESH REIT maintains a public corporate family rating better than or equal to BB (with a stable or better outlook) from S&P and Ba3 (with a stable or better outlook) from Moody’s (a “Level 1 Period”) or LIBOR plus 2.00% for any period other than a Level 1 Period; or (ii) a base rate (determined by reference to the highest of (A) the prime lending rate, (B) the overnight federal funds rate plus 0.50% or (C) the one-month adjusted LIBOR rate plus 1.00%), plus 0.75% during a Level 1 Period or 1.00% for any period other than a Level 1 Period. ESH REIT has the option to prepay outstanding loans under the ESH REIT Term Facility without penalty. ESH REIT Revolving Credit Facility — Borrowings under the ESH REIT Revolving Credit Facility bear interest at a rate equal to (i) LIBOR plus a spread that ranges from 1.50% to 2.00% based on ESH REIT’s Consolidated Total Net Leverage Ratio, as defined, or (ii) a base rate (determined by reference to the highest of (A) the prime lending rate, (B) the overnight federal funds rate plus 0.50%, or (C) the one-month adjusted LIBOR rate plus 1.00%) plus a spread that ranges from 0.50% to 1.00% based on ESH REIT’s Consolidated Total Net Leverage Ratio, as defined. ESH REIT incurs a fee of 0.30% or 0.175% on the unutilized revolver balance. ESH REIT is also required to pay customary letter of credit fees and agency fees. The ESH REIT Revolving Credit Facility provides for the issuance of up to $50.0 million of letters of credit. As of March 31, 2020, ESH REIT had no letters of credit outstanding and no available borrowing capacity under the facility. In March 2020, ESH REIT borrowed the full available borrowing capacity of $350.0 million under the ESH REIT Revolving Credit Facility as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of uncertainty in business markets resulting from the COVID-19 pandemic. These proceeds may in the future be used for working capital, general corporate or other purposes permitted under the agreement. The ESH REIT Revolving Credit Facility is subject to a springing financial covenant whereby the senior loan-to-value ratio may not exceed 45% when the aggregate principal amount of borrowings and letters of credit under the ESH REIT Revolving Credit Facility, excluding up to $30.0 million of letters of credit, is equal to or greater than 35% of the aggregate available principal amount of the ESH REIT Revolving Credit Facility on the applicable fiscal quarter end date. ESH REIT 2025 Notes In May 2015 and March 2016, ESH REIT issued $500.0 million and $800.0 million, respectively, of its 5.25% senior notes due in May 2025 (the “2025 Notes”) under an indenture with Deutsche Bank Trust Company Americas, as trustee, in private placements pursuant to Rule 144A of the Securities Act of 1933, as amended. ESH REIT may redeem the 2025 Notes at any time on or after May 1, 2020, in whole or in part, at a redemption price equal to 102.625% of the principal amount, declining annually to 100% of the principal amount from May 1, 2023 and thereafter, plus accrued and unpaid interest. Prior to May 1, 2020, ESH REIT may redeem the 2025 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus a “make-whole” premium, as defined, plus accrued and unpaid interest. Upon a Change of Control, as defined, holders of the 2025 Notes have the right to require ESH REIT to redeem the 2025 Notes at 101% of the principal amount, plus accrued and unpaid interest. ESH REIT 2027 Notes In September 2019, ESH REIT issued $750.0 million of its 4.625% senior notes due in 2027 (the “2027 Notes”) under an indenture with Deutsche Bank Trust Company Americas, as trustee, at a price equal to 100% of par value in a private placement pursuant to Rule 144A of the Securities Act of 1933, as amended. ESH REIT may redeem the 2027 Notes at any time on or after October 1, 2022, in whole or in part, at a redemption price equal to 102.313% of the principal amount, declining annually to 100% of the principal amount from October 1, 2024 and thereafter, plus accrued and unpaid interest. Prior to October 1, 2022, ESH REIT may redeem the 2027 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus a “make-whole” premium, as defined, plus accrued and unpaid interest. Prior to October 1, 2022, subject to certain conditions, ESH REIT may redeem up to 35% of the aggregate principal amount of the 2027 Notes at a redemption price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, with the net cash proceeds from certain equity offerings, provided 65% of the original amount of the principal remains outstanding after the occurrence of each such redemption. Upon a Change of Control, as defined, holders of the 2027 Notes have the right to require ESH REIT to redeem the 2027 Notes at 101% of the principal amount, plus accrued and unpaid interest. Corporation Revolving Credit Facility The Corporation’s revolving credit facility, as may be amended and supplemented from time to time (the “Corporation Revolving Credit Facility”), provides for the issuance of up to $50.0 million of letters of credit as well as borrowing on same day notice, referred to as swingline loans, in an amount of up to $20.0 million. Borrowings under the Corporation Revolving Credit Facility bear interest at a rate equal to (i) LIBOR plus 2.25% or (ii) a base rate (determined by reference to the highest of (A) the prime lending rate, (B) the overnight federal funds rate plus 0.50% or (C) the one-month adjusted LIBOR plus 1.00%) plus 1.25%. In addition to paying interest on outstanding principal, the Corporation incurs a fee of 0.30% or 0.175% on the unutilized revolver balance, based on the amount outstanding under the facility. As of March 31, 2020, the Corporation had one letter of credit outstanding of $0.2 million and no available borrowing capacity under the facility. In March 2020, the Company borrowed the then-remaining available borrowing capacity of $49.8 million under the Corporation Revolving Credit Facility as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of uncertainty in business markets resulting from the COVID-19 pandemic. The proceeds may in the future be used for working capital, general corporate or other purposes permitted under the agreement. Obligations under the Corporation Revolving Credit Facility are guaranteed by certain existing and future material domestic subsidiaries of the Corporation, excluding ESH REIT and its subsidiaries and subject to customary exceptions. The facility is secured, subject to certain exceptions, by a first priority security interest in substantially all of the assets of the Corporation and the guarantors. If obligations are outstanding under the facility during any fiscal quarter, the Corporation Revolving Credit Facility requires that the Consolidated Leverage Ratio, as defined, calculated as of the end of such fiscal quarter for any consecutive four quarter period, be less than or equal to 8.75 to 1.00 (the "Leverage Covenant"). The facility is also subject to a springing financial covenant whereby the senior loan-to-value ratio may not exceed 45% when the aggregate principal amount of borrowings and letters of credit under the Corporation Revolving Credit Facility, excluding up to $30.0 million of letters of credit, is equal to or greater than 25% of the aggregate available principal amount of the Corporation Revolving Credit Facility on the applicable fiscal quarter end date. Unsecured Intercompany Facility In August 2016, ESH REIT, as borrower, and the Corporation, as lender, entered into an unsecured intercompany credit facility, as may be amended and supplemented from time to time (the “Unsecured Intercompany Facility”). Under the Unsecured Intercompany Facility, ESH REIT may borrow up to $300.0 million, plus additional amounts, in each case subject to certain conditions. Loans under the Unsecured Intercompany Facility bear interest at an annual rate of 5.0%. ESH REIT has the option to prepay outstanding balances under the facility without penalty. As of March 31, 2020 and December 31, 2019, the amount outstanding under the facility was $0. Covenants The ESH REIT Credit Facilities, the 2027 Notes, the 2025 Notes, the Corporation Revolving Credit Facility and the Unsecured Intercompany Facility contain a number of restrictive covenants that, among other things and subject to certain exceptions, limit the Corporation’s or ESH REIT’s ability and the ability of their respective subsidiaries to engage in certain transactions. In addition, the ESH REIT Revolving Credit Facility and the Corporation Revolving Credit Facility contain financial covenants that, subject to certain conditions, require compliance with certain senior loan-to-value and consolidated leverage ratios. The agreements governing the Corporation’s and ESH REIT’s indebtedness also contain certain customary representations and warranties, affirmative covenants and events of default, including, but not limited to, cross-defaults to certain other indebtedness and, in the case of the ESH REIT Credit Facilities and the Unsecured Intercompany Facility, certain material operating leases and management agreements. As of March 31, 2020, the Corporation and ESH REIT were in compliance with all covenants under their respective debt agreements. The Company’s continued compliance with these covenants could be impacted by current or future economic conditions associated with the COVID-19 pandemic. The Company's failure to maintain compliance with its debt covenants or to pay debt obligations as they become due would give rise to default under one or more agreements governing the Company's indebtedness, and could entitle the lenders under the defaulted agreements to accelerate the maturity of the amounts thereunder, which could raise substantial doubt about the Company's ability to continue as a going concern. On May 6, 2020, the Company executed an amendment to the Corporation Revolving Credit Facility (See Note 14). Interest Expense, net —The components of net interest expense during the three months ended March 31, 2020 and 2019, are as follows (in thousands): Three Months Ended March 31, 2020 2019 Contractual interest (1) $ 31,326 $ 28,717 Amortization of deferred financing costs and debt discount 2,052 1,997 Other costs (2) 293 401 Interest Income (986) (1,511) Total $ 32,685 $ 29,604 ______________________ (1) Includes dividends on shares of mandatorily redeemable Corporation preferred stock. Net of capitalized interest of $0.9 million and $0.3 million, respectively. (2) Includes interest expense on finance leases (see Note 12) and unused facility fees. Mandatorily Redeemable Preferred Stock —The Corporation has authorized 350.0 million shares of preferred stock, $0.01 par value, of which 7,130 shares of mandatorily redeemable voting preferred stock were issued and outstanding as of March 31, 2020 and December 31, 2019. Dividends on these mandatorily redeemable voting preferred shares are payable quarterly in arrears at a rate of 8.0% per year. With respect to dividend, distribution and liquidation rights, the 8.0% voting preferred stock ranks senior to the Corporation’s common stock. Holders of the 8.0% voting preferred stock have the right to require the Corporation to redeem in cash the 8.0% voting preferred stock at $1,000 per share plus any accumulated unpaid dividends. On November 15, 2020, the Corporation shall mandatorily redeem all of the 8.0% voting preferred stock at $1,000 per share plus any accumulated unpaid dividends. Fair Value of Debt and Mandatorily Redeemable Preferred Stock —As of March 31, 2020 and December 31, 2019, the estimated fair value of the Company’s debt was $2.7 billion, and the estimated fair value of the Corporation’s 8.0% mandatorily redeemable preferred stock was $7.2 million and $7.1 million, respectively. Estimated fair values are determined by comparing current borrowing rates and risk spreads offered in the market (Level 2 fair value measures) or quoted market prices (Level 1 fair value measures), when available, to the stated interest rates and spreads on the Company’s debt and the Corporation’s 8.0% mandatorily redeemable preferred stock. As of March 31, 2020 and December 31, 2019, the estimated fair value of each of the Corporation and ESH REIT revolving credit facilities is equal to its carrying value due to its short-term nature and frequent settlement. |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
DEBT | DEBT Summary —ESH REIT’s outstanding debt, net of unamortized debt discount and unamortized deferred financing costs, as of March 31, 2020 and December 31, 2019, consists of the following (dollars in thousands): Stated Carrying Amount Unamortized Deferred Financing Costs Loan March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Stated Interest Rate Maturity Date Term loan facility ESH REIT Term Facility $ 630,909 $ 625,863 (1) $ 627,368 (1) $ 8,693 $ 9,030 LIBOR (2) + 2.00% 9/18/2026 (3) Senior notes 2025 Notes 1,300,000 1,293,315 (4) 1,292,986 (4) 14,349 15,055 5.25% 5/1/2025 2027 Notes 750,000 750,000 750,000 13,199 13,633 4.63% 10/1/2027 Revolving credit facility ESH REIT Revolving Credit Facility 350,000 350,000 — 2,472 (5) 2,606 (5) LIBOR (2) + 2.00% 9/18/2024 Unsecured Intercompany Facility Unsecured Intercompany Facility 75,000 — — — — 5.00% 9/18/2026 Total $ 3,019,178 $ 2,670,354 $ 38,713 $ 40,324 _________________________________ (1) The ESH REIT Term Facility (defined below) is presented net of an unamortized debt discount of $1.9 million and $2.0 million as of March 31, 2020 and December 31, 2019, respectively. (2) As of March 31, 2020 and December 31, 2019, one-month LIBOR was 0.99% and 1.76%, respectively. As of March 31, 2020 and December 31, 2019, $150.0 million and $200.0 million, respectively, of the ESH REIT Term Facility was subject to an interest rate swap at a fixed rate of 1.175%. (3) Amortizes in equal quarterly installments of $1.6 million. In addition to scheduled amortization, subject to certain exceptions, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required commencing with the year ending December 31, 2020. Annual mandatory prepayments for a given fiscal year are due during the first quarter of the following fiscal year. (4) The 2025 Notes (defined below) are presented net of an unamortized discount of $6.7 million and $7.0 million as of March 31, 2020 and December 31, 2019, respectively. (5) Unamortized deferred financing costs related to the revolving credit facility are included in other assets in the accompanying consolidated balance sheets. ESH REIT Credit Facilities ESH REIT’s credit agreement, as may be amended and supplemented from time to time, provides for senior secured credit facilities (collectively, the “ESH REIT Credit Facilities”) which consist of a $630.9 million senior secured term loan facility (the “ESH REIT Term Facility”) and a $350.0 million senior secured revolving credit facility (the “ESH REIT Revolving Credit Facility”). Subject to the satisfaction of certain criteria, borrowings under the ESH REIT Credit Facilities may be increased by an amount of up to $600.0 million, plus additional amounts, so long as, after giving effect to the incurrence of such incremental facility and the application of proceeds thereof, ESH REIT’s pro-forma senior loan-to-value ratio is less than or equal to 45%. ESH REIT Term Facility — The ESH REIT Term Facility bears interest at a rate equal to (i) LIBOR plus 1.75% for any period during which ESH REIT maintains a public corporate family rating better than or equal to BB (with a stable or better outlook) from S&P and Ba3 (with a stable or better outlook) from Moody’s (a “Level 1 Period”) or LIBOR plus 2.00% for any period other than a Level 1 Period; or (ii) a base rate (determined by reference to the highest of (A) the prime lending rate, (B) the overnight federal funds rate plus 0.50% or (C) the one-month adjusted LIBOR rate plus 1.00%), plus 0.75% during a Level 1 Period or 1.00% for any period other than a Level 1 Period. The ESH REIT Term Facility amortizes in equal quarterly installments of $1.6 million. In addition to scheduled amortization, subject to certain exceptions, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required. ESH REIT has the option to voluntarily prepay outstanding loans under the ESH REIT Term Facility at any time without penalty. ESH REIT Revolving Credit Facility — Borrowings under the ESH REIT Revolving Credit Facility bear interest at a rate equal to (i) LIBOR plus a spread that ranges from 1.50% to 2.00% based on ESH REIT’s Consolidated Total Net Leverage Ratio, as defined, or (ii) a base rate (determined by reference to the highest of (A) the prime lending rate, (B) the overnight federal funds rate plus 0.50%, or (C) the one-month adjusted LIBOR rate plus 1.00%) plus a spread that ranges from 0.50% to 1.00% based on ESH REIT’s Consolidated Total Net Leverage Ratio, as defined. ESH REIT incurs a fee of 0.30% or 0.175% on the unutilized revolver balance. ESH REIT is also required to pay customary letter of credit fees and agency fees. The ESH REIT Revolving Credit Facility provides for the issuance of up to $50.0 million of letters of credit. As of March 31, 2020, ESH REIT had no letters of credit outstanding and no available borrowing capacity under the facility. In March 2020, ESH REIT borrowed the full available borrowing capacity of $350.0 million under the ESH REIT Revolving Credit Facility as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of uncertainty in business markets resulting from the COVID-19 pandemic. These proceeds may in the future be used for working capital, general corporate or other purposes permitted under the agreement. The ESH REIT Revolving Credit Facility is subject to a springing financial covenant whereby the senior loan-to-value ratio may not exceed 45% when the aggregate principal amount of borrowings and letters of credit under the ESH REIT Revolving Credit Facility, excluding up to $30.0 million of letters of credit, is equal to or greater than 35% of the aggregate available principal amount of the ESH REIT Revolving Credit Facility on the applicable fiscal quarter end date. ESH REIT 2025 Notes In May 2015 and March 2016, ESH REIT issued $500.0 million and $800.0 million, respectively, of its 5.25% senior notes due in May 2025 (the “2025 Notes”) under an indenture with Deutsche Bank Trust Company Americas, as trustee, in private placements pursuant to Rule 144A of the Securities Act of 1933, as amended. ESH REIT may redeem the 2025 Notes at any time on or after May 1, 2020, in whole or in part, at a redemption price equal to 102.625% of the principal amount, declining annually to 100% of the principal amount from May 1, 2023 and thereafter, plus accrued and unpaid interest. Prior to May 1, 2020, ESH REIT may redeem the 2025 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus a “make-whole” premium, as defined, plus accrued and unpaid interest. Upon a Change of Control, as defined, holders of the 2025 Notes have the right to require ESH REIT to redeem the 2025 Notes at 101% of the principal amount, plus accrued and unpaid interest. ESH REIT 2027 Notes In September 2019, ESH REIT issued $750.0 million of its 4.625% senior notes due in 2027 (the “2027 Notes”) under an indenture with Deutsche Bank Trust Company Americas, as trustee, at a price equal to 100% of par value in a private placement pursuant to Rule 144A of the Securities Act of 1933, as amended. ESH REIT may redeem the 2027 Notes at any time on or after October 1, 2022, in whole or in part, at a redemption price equal to 102.313% of the principal amount, declining annually to 100% of the principal amount from October 1, 2024 and thereafter, plus accrued and unpaid interest. Prior to October 1, 2022, ESH REIT may redeem the 2027 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus a “make-whole” premium, as defined, plus accrued and unpaid interest. Prior to October 1, 2022, subject to certain conditions, ESH REIT may redeem up to 35% of the aggregate principal amount of the 2027 Notes at a redemption price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, with the net cash proceeds from certain equity offerings, provided 65% of the original amount of the principal remains outstanding after the occurrence of each such redemption. Upon a Change of Control, as defined, holders of the 2027 Notes have the right to require ESH REIT to redeem the 2027 Notes at 101% of the principal amount, plus accrued and unpaid interest. Unsecured Intercompany Facility In August 2016, ESH REIT, as borrower, and the Corporation, as lender, entered into an unsecured intercompany credit facility, as may be amended and supplemented from time to time (the “Unsecured Intercompany Facility”). Under the Unsecured Intercompany Facility, ESH REIT may borrow up to $300.0 million, plus additional amounts, in each case subject to certain conditions. Loans under the Unsecured Intercompany Facility bear interest at an annual rate of 5.0%. ESH REIT has the option to prepay outstanding balances under the facility without penalty. As of March 31, 2020 and December 31, 2019, the amount outstanding under the facility was $0. Covenants The ESH REIT Credit Facilities, the 2027 Notes, the 2025 Notes and the Unsecured Intercompany Facility contain a number of restrictive covenants that, among other things and subject to certain exceptions, limit ESH REIT’s ability and the ability of its subsidiaries to engage in certain transactions. In addition, the ESH REIT Revolving Credit Facility contains a financial covenant that, subject to certain conditions, requires compliance with a certain senior loan-to-value ratio. The agreements governing ESH REIT’s indebtedness also contain certain customary representations and warranties, affirmative covenants and events of default, including, but not limited to, cross-defaults to certain other indebtedness and, in the case of the ESH REIT Credit Facilities and the Unsecured Intercompany Facility, certain material operating leases and management agreements. As of March 31, 2020, ESH REIT was in compliance with all covenants under its debt agreements. ESH REIT’s continued compliance with these covenants could be impacted by current or future economic conditions associated with the COVID-19 pandemic. ESH REIT's failure to maintain compliance with its debt covenants or to pay debt obligations as they become due would give rise to a default under one or more of the agreements governing its indebtedness, and could entitle the lenders under the defaulted agreements to accelerate the maturity of the amounts thereunder, which could raise substantial doubt about ESH REIT's ability to continue as a going concern. ESH REIT may seek covenant waivers or attempt to amend its covenants, though there is no certainty that it would be successful in such efforts. Interest Expense, net —The components of net interest expense during the three months ended March 31, 2020 and 2019, are as follows (in thousands): Three Months Ended March 31, 2020 2019 Contractual interest (1) $ 31,090 $ 28,575 Amortization of deferred financing costs and debt discount 2,022 1,969 Other costs (2) 262 356 Interest Income (946) (966) Total $ 32,428 $ 29,934 ______________________ (1) Net of capitalized interest of $0.9 million and $0.3 million, respectively. (2) Includes interest expense on finance leases (see Note 11 ) and unused facility fees. Fair Value of Debt —As of March 31, 2020 and December 31, 2019, the estimated fair value of ESH REIT’s debt was $2.6 billion and $2.7 billion, respectively. Estimated fair values are determined by comparing current borrowing rates and risk spreads offered in the market (Level 2 fair value measures) or quoted market prices (Level 1 fair value measures), when available, to the stated interest rates and spreads on ESH REIT’s debt. As of March 31, 2020 and December 31, 2019, the estimated fair value of the ESH REIT Revolving Credit Facility is equal to its carrying value due to its short-term nature and frequent settlement. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS ESH REIT is a counterparty to a floating-to-fixed interest rate swap at a fixed rate of 1.175% and a floating rate of one-month LIBOR to manage its exposure to interest rate risk on a portion of the ESH REIT Term Facility. The notional amount of the interest rate swap as of March 31, 2020 was $150.0 million. The notional amount decreases by an additional $50.0 million every six months until the swap’s maturity in September 2021. For the three months ended March 31, 2020 and 2019, the Company received proceeds of $0.3 million and $1.0 million, respectively, that offset interest expense. As of March 31, 2020, $1.0 million of interest expense is expected to be recognized over the following twelve months. The table below presents the amounts and classification of the interest rate swap on the Company’s condensed consolidated financial statements (in thousands): (Accrued liabilities) other assets Accumulated other comprehensive (loss) income, net of tax Interest (income) expense, net As of March 31, 2020 $ (1,224) $ (1,042) (1) As of December 31, 2019 $ 831 $ 706 (2) For the three months ended March 31, 2020 $ (257) For the three months ended March 31, 2019 $ (975) _______________________________ (1) Changes during the three months ended March 31, 2020, on a pre-tax basis, consisted of changes in fair value of $(2.1) million. (2) Changes during the year ended December 31, 2019, on a pre-tax basis, consisted of changes in fair value of $(5.0) million. |
DERIVATIVE INSTRUMENTS - REIT
DERIVATIVE INSTRUMENTS - REIT | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS ESH REIT is a counterparty to a floating-to-fixed interest rate swap at a fixed rate of 1.175% and a floating rate of one-month LIBOR to manage its exposure to interest rate risk on a portion of the ESH REIT Term Facility. The notional amount of the interest rate swap as of March 31, 2020 was $150.0 million. The notional amount decreases by an additional $50.0 million every six months until the swap’s maturity in September 2021. For the three months ended March 31, 2020 and 2019, the Company received proceeds of $0.3 million and $1.0 million, respectively, that offset interest expense. As of March 31, 2020, $1.0 million of interest expense is expected to be recognized over the following twelve months. The table below presents the amounts and classification of the interest rate swap on the Company’s condensed consolidated financial statements (in thousands): (Accrued liabilities) other assets Accumulated other comprehensive (loss) income, net of tax Interest (income) expense, net As of March 31, 2020 $ (1,224) $ (1,042) (1) As of December 31, 2019 $ 831 $ 706 (2) For the three months ended March 31, 2020 $ (257) For the three months ended March 31, 2019 $ (975) _______________________________ (1) Changes during the three months ended March 31, 2020, on a pre-tax basis, consisted of changes in fair value of $(2.1) million. (2) Changes during the year ended December 31, 2019, on a pre-tax basis, consisted of changes in fair value of $(5.0) million. |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS ESH REIT is a counterparty to a floating-to-fixed interest rate swap at a fixed rate of 1.175% and a floating rate of one-month LIBOR to manage its exposure to interest rate risk on a portion of the ESH REIT Term Facility. The notional amount of the interest rate swap as of March 31, 2020 was $150.0 million. The notional amount decreases by an additional $50.0 million every six months until the swap’s maturity in September 2021. For the three months ended March 31, 2020 and 2019, ESH REIT received proceeds of $0.3 million and $1.0 million, respectively, that offset interest expense. As of March 31, 2020, $1.0 million of interest expense is expected to be recognized over the following twelve months. The table below presents the amounts and classification of the interest rate swap on ESH REIT’s condensed consolidated financial statements (in thousands): (Accrued liabilities) other assets Accumulated other comprehensive (loss) income, net of tax Interest (income) expense, net As of March 31, 2020 $ (1,224) $ (1,224) (1) As of December 31, 2019 $ 831 $ 830 (2) For the three months ended March 31, 2020 $ (257) For the three months ended March 31, 2019 $ (975) _______________________________ (1) Changes during the three months ended March 31, 2020, on a pre-tax basis, consisted of changes in fair value of $(2.1) million. (2) Changes during the year ended December 31, 2019, on a pre-tax basis, consisted of changes in fair value of $(5.0) million. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenue The following table disaggregates room revenues from owned hotels by booking source for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended 2020 2019 Property direct $ 60,024 $ 69,829 (2) Central call center 77,191 68,108 (2) Proprietary website 52,939 50,398 (2) Third-party intermediaries 57,820 69,097 Travel agency global distribution systems 6,490 9,614 Total room revenues from owned hotels (1) $ 254,464 $ 267,046 _________________________________ (1) In addition to room revenues, the Company’s owned hotels earned $6.8 million and $5.3 million of other hotel revenues during the three months ended March 31, 2020 and 2019, respectively. (2) As a result of the correction of a classification error, $3.7 million of room revenues that were previously classified as revenues generated from property direct have been reclassified and reported as $2.6 million of revenues generated from central call center and $1.1 million of revenues generated from proprietary website. The Company concluded that the effect of the error is immaterial to previously issued financial statements but has made the correction for consistent presentation. The following table disaggregates room revenues from owned hotels by length of guest stay for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended 2020 2019 1-6 nights $ 84,594 $ 101,424 7-29 nights 54,831 55,100 30+ nights 115,039 110,522 Total room revenues from owned hotels (1) $ 254,464 $ 267,046 _________________________________ (1) In addition to room revenues, the Company’s owned hotels earned $6.8 million and $5.3 million of other hotel revenues during the three months ended March 31, 2020 and 2019, respectively. The following table disaggregates revenues from franchised and managed hotels for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended 2020 2019 Management fees $ 235 $ 293 Franchise fees 1,044 932 Indirect reimbursements (system service fees) 1,190 1,185 Direct reimbursements 2,600 2,910 Total revenues from franchised and managed hotels $ 5,069 $ 5,320 Outstanding Contract Liabilities Contract liabilities relate to advance deposits with respect to owned hotels and, with respect to franchised hotels, advance consideration received, such as initial franchise fees paid when a franchise agreement is executed and certain system implementation fees paid at the time of installation. Contract liabilities are included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets. The following table presents outstanding contract liabilities as of March 31, 2020 and January 1, 2020, and the amount of outstanding January 1, 2020 contract liabilities recognized as revenue during the three months ended March 31, 2020 (in thousands): Outstanding Contract Liabilities Outstanding Contract Liabilities as of January 1, 2020 Recognized as Revenue As of March 31, 2020 $ 16,111 As of January 1, 2020 16,231 For the three months ended March 31, 2020 $ 10,172 Performance Obligations As of March 31, 2020, $10.7 million of outstanding contract liabilities related to owned hotels and $5.4 million related to franchised hotels. The Company does not estimate revenues expected to be recognized related to unsatisfied performance obligations for royalty fees, system service fees or management fees, as they are considered either sales-based fees or allocated to wholly unsatisfied performance obligations in a series. Performance obligations related to owned hotels are expected to be satisfied within less than one year. Performance obligations related to third-party owned (i.e., franchised) hotels are expected to be satisfied over the term of the respective franchise agreements, which are typically 20 years. |
SEGMENTS
SEGMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTSThe Company’s operating segments are components of the business which are managed discretely and for which discrete financial information is reviewed regularly by its chief operating decision maker to assess performance and make decisions regarding the allocation of resources. The Company’s operating and reportable segments are defined as follows: • Owned Hotels —Earnings are derived from the operation of Company-owned hotel properties and include room and other hotel revenues. • Franchise and management —Earnings are derived from fees under franchise and management agreements with third parties. These contracts provide the Company the ability to earn compensation for licensing the Extended Stay America brand name, providing access to shared system-wide platforms and/or management services. The performance of the Company’s operating segments is evaluated primarily on income from operations. Selected financial data is provided below (in thousands): Three Months Ended 2020 2019 Revenues: Owned hotels $ 261,232 $ 272,349 Franchise and management (1) 2,062 2,042 Total segment revenues 263,294 274,391 Corporate and other (2) 19,992 19,514 Other revenues from franchised and managed properties (3) 3,790 4,095 Intersegment eliminations (4) (20,775) (20,331) Total $ 266,301 $ 277,669 Income (loss) from operations: Owned hotels $ 48,551 $ 69,695 Franchise and management (1) 2,062 2,042 Total segment income from operations 50,613 71,737 Corporate and other (2) (7,853) (7,232) Other expenses from franchised and managed properties, net (3) (417) (552) Total $ 42,343 $ 63,953 _________________________________ (1) Includes intellectual property fees charged to the owned hotels segment of $0.8 million for each of the three months ended March 31, 2020 and 2019, that are eliminated in the condensed consolidated statements of operations. (2) Includes revenues generated and operating expenses incurred in connection with the overall support of owned, franchised and managed hotels and related operations. Corporate and other revenues are comprised of management fees earned by and cost reimbursements charged to the owned hotels segment that are eliminated in the condensed consolidated statements of operations. (3) Includes direct reimbursement of specific costs incurred under franchise and management agreements that the Company is reimbursed for on a dollar-for-dollar basis as well as indirect reimbursement of certain costs incurred associated with the Company’s shared platform (i.e., system services, see Note 2). (4) Includes management fees, intellectual property fees and other cost reimbursements charged to the owned hotels segment that are eliminated in the condensed consolidated statements of operations. Total assets for each of the Company’s operating segments are provided below (in thousands): March 31, 2020 December 31, 2019 Assets: Owned hotels $ 3,687,800 $ 3,661,609 Franchise and management 13,332 14,576 Total segment assets 3,701,132 3,676,185 Corporate and other 750,602 397,568 Intersegment eliminations (58,729) (43,157) Total $ 4,393,005 $ 4,030,596 Total capital expenditures for each of the Company's operating segments are provided below (in thousands): Three Months Ended 2020 2019 Capital Expenditures: Owned hotels $ 54,368 $ 54,762 Corporate and other 211 526 Total $ 54,579 $ 55,288 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Corporation’s taxable income includes the taxable income of its wholly-owned subsidiaries and distribution income related to its ownership of 59% of ESH REIT. ESH REIT has elected to be taxed as and expects to continue to qualify as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). A REIT is a legal entity that holds real estate assets and is generally not subject to federal and state income taxes. In order to maintain qualification as a REIT, ESH REIT is required to distribute at least 90% of its taxable income, excluding net capital gain, to its shareholders each year. In addition, ESH REIT must meet a number of complex organizational and operational requirements. If ESH REIT were to fail to qualify as a REIT in any taxable year, it would be subject to federal income taxes at regular corporate rates and generally would be precluded from qualifying as a REIT for the subsequent four taxable years following the year during which it lost its REIT qualification. ESH REIT intends to distribute its taxable income to the extent necessary to optimize its tax efficiency including, but not limited to, maintaining its REIT status, while retaining sufficient capital for its ongoing needs. Even in qualifying as a REIT, ESH REIT may be subject to state and local taxes in certain jurisdictions, and is subject to federal income and excise taxes on undistributed income. The Company recorded a provision for federal, state and foreign income taxes of approximately $1.1 million for the three months ended March 31, 2020, an effective tax rate of approximately 12.4%, as compared with a provision of approximately $6.1 million for the three months ended March 31, 2019, an effective tax rate of approximately 17.7%. The Company's effective rate differs from the federal statutory rate of 21% primarily due to ESH REIT's status as a REIT under the provisions of the Code and, specifically during the three months ended March 31, 2020, due to the ability of the Company to carry back and utilize projected losses to higher tax rate years. The decrease in the Company's effective tax rate is substantially due to circumstances caused by business disruption from the COVID-19 pandemic. As of March 31, 2020, the Company projects a taxable loss for the year ending December 31, 2020, and due to the passage of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), the Company is able to carry back the projected loss and fully utilize it in a higher tax rate year, providing an expected federal tax benefit. The expected federal tax benefit due to the projected loss for the year ending December 31, 2020, corresponded to a decrease in the effective tax rate used to measure income tax expense recognized for the three months ended March 31, 2020. As of March 31, 2020, the Company has not completed its accounting for all tax effects related to the enactment of the CARES Act, including the ability to carry back losses to higher federal marginal rate tax years. The Company is still analyzing the CARES Act and refining its calculations, including the CARES Act's impact on state income taxes, all of which are complex and subject to continued interpretation. The Company expects to complete its analysis prior to year-end 2020. |
INCOME TAXES - REIT
INCOME TAXES - REIT | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
INCOME TAXES | INCOME TAXES The Corporation’s taxable income includes the taxable income of its wholly-owned subsidiaries and distribution income related to its ownership of 59% of ESH REIT. ESH REIT has elected to be taxed as and expects to continue to qualify as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). A REIT is a legal entity that holds real estate assets and is generally not subject to federal and state income taxes. In order to maintain qualification as a REIT, ESH REIT is required to distribute at least 90% of its taxable income, excluding net capital gain, to its shareholders each year. In addition, ESH REIT must meet a number of complex organizational and operational requirements. If ESH REIT were to fail to qualify as a REIT in any taxable year, it would be subject to federal income taxes at regular corporate rates and generally would be precluded from qualifying as a REIT for the subsequent four taxable years following the year during which it lost its REIT qualification. ESH REIT intends to distribute its taxable income to the extent necessary to optimize its tax efficiency including, but not limited to, maintaining its REIT status, while retaining sufficient capital for its ongoing needs. Even in qualifying as a REIT, ESH REIT may be subject to state and local taxes in certain jurisdictions, and is subject to federal income and excise taxes on undistributed income. The Company recorded a provision for federal, state and foreign income taxes of approximately $1.1 million for the three months ended March 31, 2020, an effective tax rate of approximately 12.4%, as compared with a provision of approximately $6.1 million for the three months ended March 31, 2019, an effective tax rate of approximately 17.7%. The Company's effective rate differs from the federal statutory rate of 21% primarily due to ESH REIT's status as a REIT under the provisions of the Code and, specifically during the three months ended March 31, 2020, due to the ability of the Company to carry back and utilize projected losses to higher tax rate years. The decrease in the Company's effective tax rate is substantially due to circumstances caused by business disruption from the COVID-19 pandemic. As of March 31, 2020, the Company projects a taxable loss for the year ending December 31, 2020, and due to the passage of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), the Company is able to carry back the projected loss and fully utilize it in a higher tax rate year, providing an expected federal tax benefit. The expected federal tax benefit due to the projected loss for the year ending December 31, 2020, corresponded to a decrease in the effective tax rate used to measure income tax expense recognized for the three months ended March 31, 2020. As of March 31, 2020, the Company has not completed its accounting for all tax effects related to the enactment of the CARES Act, including the ability to carry back losses to higher federal marginal rate tax years. The Company is still analyzing the CARES Act and refining its calculations, including the CARES Act's impact on state income taxes, all of which are complex and subject to continued interpretation. The Company expects to complete its analysis prior to year-end 2020. |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
INCOME TAXES | INCOME TAXES ESH REIT has elected to be taxed and expects to continue to qualify as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (“the Code”). A REIT is a legal entity that holds real estate assets and is generally not subject to federal and state income taxes. In order to maintain qualification as a REIT, ESH REIT is required to distribute at least 90% of its taxable income, excluding net capital gain, to its shareholders each year. In addition, ESH REIT must meet a number of complex organizational and operational requirements. If ESH REIT were to fail to qualify as a REIT in any taxable year, it would be subject to federal income taxes at regular corporate rates and generally would be precluded from qualifying as a REIT for the subsequent four taxable years following the year during which it lost its REIT qualification. ESH REIT intends to distribute its taxable income to the extent necessary to optimize its tax efficiency including, but not limited to, maintaining its REIT status, while retaining sufficient capital for its ongoing needs. Even in qualifying as a REIT, ESH REIT may be subject to state and local taxes in certain jurisdictions, and is subject to federal income and excise taxes on undistributed income. ESH REIT recorded a provision for state income taxes of less than $0.1 million, an effective tax rate of less than 0.1%, for each of the three months ended March 31, 2020 and 2019. ESH REIT’s effective tax rate differs from the federal statutory rate of 21% due to ESH REIT’s status as a REIT under the provisions of the Code. ESH REIT’s income tax returns for the years 2016 to present are subject to examination by the Internal Revenue Service and other taxing authorities. As of March 31, 2020, a subsidiary of ESH REIT was under examination by the Canadian Revenue Agency for the tax years 2014 through 2017. As the audit is still in process the timing of the resolution and any payments that may be required cannot be determined at this time. ESH REIT believes that, to the extent a liability may exist, it is appropriately reserved as of March 31, 2020. |
RELATED PARTY TRANSACTIONS - RE
RELATED PARTY TRANSACTIONS - REIT | 3 Months Ended |
Mar. 31, 2020 | |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Revenues and Expenses Leases and Rental Revenues— All revenues are generated as a result of, and earned from, three operating leases with related parties. The counterparty to each lease agreement is a subsidiary of the Corporation. Fixed and variable rental revenues for the three months ended March 31, 2020 and 2019 are as follows (in thousands): Three Months Ended 2020 2019 Fixed rental revenues $ 119,190 $ 118,005 Variable rental revenues (1) — — _________________________________ (1) Regardless of whether cash rental payments are received, ESH REIT only recognizes revenue when a lessee’s revenue exceeds specific thresholds stated in the lease. Variable rental revenue thresholds were not achieved during the three months ended March 31, 2020 or 2019. Each lease agreement has a five five Years Ending December 31, Remainder of 2020 $ 350,521 2021 479,830 2022 491,866 2023 419,911 Total $ 1,742,128 Overhead Expenses— The Corporation incurs costs under a services agreement between the Corporation and ESH REIT for certain overhead services performed on each entities’ behalf. The services relate to executive management, accounting, financial analysis, training and technology. For the three months ended March 31, 2020 and 2019, ESH REIT incurred $2.9 million and $2.5 million, respectively, included in general and administrative expenses in the accompanying condensed consolidated statements of operations, related to these services. Expenses incurred under this services agreement also include expenses related to certain employees that participate in the Corporation’s long-term incentive plan. Such charges were $0.2 million and $0.3 million for the three months ended March 31, 2020 and 2019, respectively. Debt and Equity Transactions Unsecured Intercompany Facility— As of March 31, 2020 and December 31, 2019, there were no outstanding balances owed by ESH REIT to the Corporation under the Unsecured Intercompany Facility, and ESH REIT incurred no interest expense during the three months ended March 31, 2020 and 2019 related to the Unsecured Intercompany Facility. ESH REIT is able to borrow under the Unsecured Intercompany Facility up to $300.0 million, plus additional amounts, in each case subject to certain conditions (see Note 7). Distributions— During the three months ended March 31, 2020 and 2019, ESH REIT paid distributions of $35.1 million and $37.6 million, respectively, to the Corporation in respect of the Class A common stock of ESH REIT. Issuance of Common Stock— During the three months ended March 31, 2020 and 2019, ESH REIT was compensated $0.7 million and $1.2 million, respectively, for the issuance of 0.2 million shares of Class B common stock, each of which was attached to a share of Corporation common stock to form a Paired Share, used to settle vested restricted stock units (“RSUs”). As of March 31, 2020, the Corporation has granted a total of 1.1 million RSUs, whereby, as a counterparty to these outstanding RSUs, ESH REIT is expected to issue and be compensated in cash for 1.1 million shares of Class B common stock of ESH REIT in future periods, assuming market-based awards vest at 100% and no forfeitures. Related Party Balances Related party transaction balances as of March 31, 2020 and December 31, 2019, include the following (in thousands): March 31, December 31, Leases: Rents receivable (1) $ 666 $ 1,572 Deferred rents receivable (2) $ 31,429 $ 28,917 Unearned rental revenues (1) $ (58,023) $ (38,770) Working capital and other: Ordinary working capital (3) $ (10,598) $ (12,160) Equity awards (payable) receivable (4) (230) 322 Total working capital and other, net (5) $ (10,828) $ (11,838) ______________________ (1) Rents receivable relate to percentage rents. As of March 31, 2020, unearned rental revenues related to April 2020 fixed minimum rent of $38.8 million and percentage rent of $19.2 million. As of December 31, 2019, unearned rental revenues related to January 2020 fixed minimum rent. (2) Revenues recognized in excess of cash rents received. (3) Represents disbursements and/or receipts made by the Corporation or ESH REIT on the other entity’s behalf. Includes overhead costs incurred by the Corporation on ESH REIT’s behalf. (4) Represents amounts related to RSUs not yet settled or issued. (5) Outstanding balances are typically repaid within 30 days. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments —The Company is a tenant under long-term ground leases at five of its hotel properties, including one hotel site for which development is in process. Three of these leases are operating leases and two are finance leases. The ground lease agreements terminate at various dates between 2023 and 2096 and several of the agreements include multiple renewal options for generally five ten five certain that it will exercise the options to extend its ground leases, fixed payments associated with the extensions are included in the measurement of related right-of-use assets and lease liabilities. Payments associated with the option to extend the corporate office lease are not included in the measurement of the right-of-use asset and lease liability, as the associated payments cannot be reasonably estimated. Additionally, as of March 31, 2020, the Company leased certain technology equipment located at its hotel sites under finance leases. Operating lease costs related to ground leases are included in hotel operating expenses, while operating lease costs related to the Company’s office lease are included in general and administrative expenses, in the condensed consolidated statements of operations. Finance lease interest costs are included in interest expense, net in the condensed consolidated statements of operations (see Note 7) or, when pertaining to assets under development, are capitalized and included in property and equipment, net on the condensed consolidated balance sheets (see Note 5). No amortization costs were incurred during the three months ended March 31, 2020 and 2019 for finance leases pertaining to land or land in development. The Company has no variable lease costs or short-term leases. For the three months ended March 31, 2020, the components of the Company’s total lease costs are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease costs $ 769 $ 768 Finance lease costs - interest 61 61 Total lease costs $ 830 $ 829 The Company’s right-of-use assets and lease liabilities are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-use assets: Operating (1) $ 4,298 $ 4,863 Finance (2) 4,343 3,979 Lease liabilities: Operating (3) 12,077 12,590 Finance 3,707 3,379 _________________________________ (1) Included in other assets on the accompanying condensed consolidated balance sheets. (2) Included in property and equipment, net on the accompanying condensed consolidated balance sheets. (3) Included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets. Maturities of lease liabilities as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 2,182 $ 479 2021 2,220 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 83,857 $ 5,363 Total discounted lease liability $ 12,077 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,780 $ 1,656 Weighted-average remaining lease term 45 years 11 years Weighted-average discount rate 6.4 % 6.8 % The Company’s leases do not contain residual value guarantees and do not contain restrictions with respect to incurring additional financial obligations or paying dividends. As of March 31, 2020, the Company does not have any material leases that have not yet commenced. Letter of Credit —As of March 31, 2020, the Company had one outstanding letter of credit, issued by the Corporation, for $0.2 million, which is collateralized by the Corporation Revolving Credit Facility. Legal Contingencies —As of March 31, 2020, six purported class action lawsuits in California have been filed against the Company. The complaints allege, among other things, failure to provide meal and rest periods, wage and hour violations and violations of the Fair Credit Reporting Act. The complaints seek, among other relief, collective and class certification of the lawsuits, unspecified damages, costs and expenses, including attorneys’ fees, and such other relief as the court might find just and proper. With respect to the Fair Credit Reporting Act violations alleged in the lawsuits described above, the parties reached a tentative settlement agreement in May 2019, which is subject to certain conditions, including court approval. During the three months ended June 30, 2019, the Company recorded a payable and a corresponding insurance receivable for the amount of the tentative settlement. The expected resolution of the alleged Fair Credit Reporting Act violations in the lawsuits did not have, and is not expected to have, a material adverse impact on the Company’s condensed consolidated financial statements, results of operations or liquidity. With respect to the meal and rest period and the wage and hour violations alleged in the lawsuits described above, excluding the one lawsuit described below, the parties reached a tentative settlement agreement in January 2020, which is subject to certain conditions, including court approval. During the three months ended December 31, 2019, the Company incurred a loss and recorded a charge equal to the amount of the tentative settlement. The expected resolution of the alleged meal and rest period and wage and hour violations in the lawsuits did not have, and is not expected to have, a material adverse impact on the Company’s condensed consolidated financial statements, results of operations or liquidity. With respect to one lawsuit, although the Company believes it is reasonably possible that it may incur losses associated with such matter, it is not possible to estimate the amount of loss or range of loss, if any, that might result from adverse judgments, settlements or other resolution based on the early stage of the lawsuit, the uncertainty as to the certification of a class or classes and the size of any certified class, if applicable, and the lack of resolution of significant factual and legal issues. However, depending on the amount and timing, an unfavorable resolution of the lawsuit or a change in the Company's assessment of the likelihood of loss could have a material adverse effect on the Company’s condensed consolidated financial statements, results of operations or liquidity in a future period. We believe that we have meritorious defenses and are prepared to vigorously defend the lawsuit. The Company is not a party to any additional litigation or claims, other than routine matters arising in the ordinary course of business that are incidental to the operation of the business of the Company. The Company believes that the results of all |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - REIT | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments —The Company is a tenant under long-term ground leases at five of its hotel properties, including one hotel site for which development is in process. Three of these leases are operating leases and two are finance leases. The ground lease agreements terminate at various dates between 2023 and 2096 and several of the agreements include multiple renewal options for generally five ten five certain that it will exercise the options to extend its ground leases, fixed payments associated with the extensions are included in the measurement of related right-of-use assets and lease liabilities. Payments associated with the option to extend the corporate office lease are not included in the measurement of the right-of-use asset and lease liability, as the associated payments cannot be reasonably estimated. Additionally, as of March 31, 2020, the Company leased certain technology equipment located at its hotel sites under finance leases. Operating lease costs related to ground leases are included in hotel operating expenses, while operating lease costs related to the Company’s office lease are included in general and administrative expenses, in the condensed consolidated statements of operations. Finance lease interest costs are included in interest expense, net in the condensed consolidated statements of operations (see Note 7) or, when pertaining to assets under development, are capitalized and included in property and equipment, net on the condensed consolidated balance sheets (see Note 5). No amortization costs were incurred during the three months ended March 31, 2020 and 2019 for finance leases pertaining to land or land in development. The Company has no variable lease costs or short-term leases. For the three months ended March 31, 2020, the components of the Company’s total lease costs are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease costs $ 769 $ 768 Finance lease costs - interest 61 61 Total lease costs $ 830 $ 829 The Company’s right-of-use assets and lease liabilities are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-use assets: Operating (1) $ 4,298 $ 4,863 Finance (2) 4,343 3,979 Lease liabilities: Operating (3) 12,077 12,590 Finance 3,707 3,379 _________________________________ (1) Included in other assets on the accompanying condensed consolidated balance sheets. (2) Included in property and equipment, net on the accompanying condensed consolidated balance sheets. (3) Included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets. Maturities of lease liabilities as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 2,182 $ 479 2021 2,220 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 83,857 $ 5,363 Total discounted lease liability $ 12,077 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,780 $ 1,656 Weighted-average remaining lease term 45 years 11 years Weighted-average discount rate 6.4 % 6.8 % The Company’s leases do not contain residual value guarantees and do not contain restrictions with respect to incurring additional financial obligations or paying dividends. As of March 31, 2020, the Company does not have any material leases that have not yet commenced. Letter of Credit —As of March 31, 2020, the Company had one outstanding letter of credit, issued by the Corporation, for $0.2 million, which is collateralized by the Corporation Revolving Credit Facility. Legal Contingencies —As of March 31, 2020, six purported class action lawsuits in California have been filed against the Company. The complaints allege, among other things, failure to provide meal and rest periods, wage and hour violations and violations of the Fair Credit Reporting Act. The complaints seek, among other relief, collective and class certification of the lawsuits, unspecified damages, costs and expenses, including attorneys’ fees, and such other relief as the court might find just and proper. With respect to the Fair Credit Reporting Act violations alleged in the lawsuits described above, the parties reached a tentative settlement agreement in May 2019, which is subject to certain conditions, including court approval. During the three months ended June 30, 2019, the Company recorded a payable and a corresponding insurance receivable for the amount of the tentative settlement. The expected resolution of the alleged Fair Credit Reporting Act violations in the lawsuits did not have, and is not expected to have, a material adverse impact on the Company’s condensed consolidated financial statements, results of operations or liquidity. With respect to the meal and rest period and the wage and hour violations alleged in the lawsuits described above, excluding the one lawsuit described below, the parties reached a tentative settlement agreement in January 2020, which is subject to certain conditions, including court approval. During the three months ended December 31, 2019, the Company incurred a loss and recorded a charge equal to the amount of the tentative settlement. The expected resolution of the alleged meal and rest period and wage and hour violations in the lawsuits did not have, and is not expected to have, a material adverse impact on the Company’s condensed consolidated financial statements, results of operations or liquidity. With respect to one lawsuit, although the Company believes it is reasonably possible that it may incur losses associated with such matter, it is not possible to estimate the amount of loss or range of loss, if any, that might result from adverse judgments, settlements or other resolution based on the early stage of the lawsuit, the uncertainty as to the certification of a class or classes and the size of any certified class, if applicable, and the lack of resolution of significant factual and legal issues. However, depending on the amount and timing, an unfavorable resolution of the lawsuit or a change in the Company's assessment of the likelihood of loss could have a material adverse effect on the Company’s condensed consolidated financial statements, results of operations or liquidity in a future period. We believe that we have meritorious defenses and are prepared to vigorously defend the lawsuit. The Company is not a party to any additional litigation or claims, other than routine matters arising in the ordinary course of business that are incidental to the operation of the business of the Company. The Company believes that the results of all |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments —The Company is a tenant under long-term ground leases at five of its hotel properties, including one hotel site for which development is in process. Three of these leases are operating leases and two are finance leases. The ground lease agreements terminate at various dates between 2023 and 2096 and several of the agreements include multiple renewal options for generally five ten five certain that it will exercise the options to extend its ground leases, fixed payments associated with the extensions are included in the measurement of related right-of-use assets and lease liabilities. Payments associated with the option to extend the corporate office lease are not included in the measurement of the right-of-use asset and lease liability, as the associated payments cannot be reasonably estimated. Additionally, as of March 31, 2020, the Company leased certain technology equipment located at its hotel sites under finance leases. Operating lease costs related to ground leases are included in hotel operating expenses, while operating lease costs related to the Company’s office lease are included in general and administrative expenses, in the condensed consolidated statements of operations. Finance lease interest costs are included in interest expense, net in the condensed consolidated statements of operations (see Note 7) or, when pertaining to assets under development, are capitalized and included in property and equipment, net on the condensed consolidated balance sheets (see Note 5). No amortization costs were incurred during the three months ended March 31, 2020 and 2019 for finance leases pertaining to land or land in development. The Company has no variable lease costs or short-term leases. For the three months ended March 31, 2020, the components of the Company’s total lease costs are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease costs $ 769 $ 768 Finance lease costs - interest 61 61 Total lease costs $ 830 $ 829 The Company’s right-of-use assets and lease liabilities are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-use assets: Operating (1) $ 4,298 $ 4,863 Finance (2) 4,343 3,979 Lease liabilities: Operating (3) 12,077 12,590 Finance 3,707 3,379 _________________________________ (1) Included in other assets on the accompanying condensed consolidated balance sheets. (2) Included in property and equipment, net on the accompanying condensed consolidated balance sheets. (3) Included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets. Maturities of lease liabilities as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 2,182 $ 479 2021 2,220 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 83,857 $ 5,363 Total discounted lease liability $ 12,077 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,780 $ 1,656 Weighted-average remaining lease term 45 years 11 years Weighted-average discount rate 6.4 % 6.8 % The Company’s leases do not contain residual value guarantees and do not contain restrictions with respect to incurring additional financial obligations or paying dividends. As of March 31, 2020, the Company does not have any material leases that have not yet commenced. Letter of Credit —As of March 31, 2020, the Company had one outstanding letter of credit, issued by the Corporation, for $0.2 million, which is collateralized by the Corporation Revolving Credit Facility. Legal Contingencies —As of March 31, 2020, six purported class action lawsuits in California have been filed against the Company. The complaints allege, among other things, failure to provide meal and rest periods, wage and hour violations and violations of the Fair Credit Reporting Act. The complaints seek, among other relief, collective and class certification of the lawsuits, unspecified damages, costs and expenses, including attorneys’ fees, and such other relief as the court might find just and proper. With respect to the Fair Credit Reporting Act violations alleged in the lawsuits described above, the parties reached a tentative settlement agreement in May 2019, which is subject to certain conditions, including court approval. During the three months ended June 30, 2019, the Company recorded a payable and a corresponding insurance receivable for the amount of the tentative settlement. The expected resolution of the alleged Fair Credit Reporting Act violations in the lawsuits did not have, and is not expected to have, a material adverse impact on the Company’s condensed consolidated financial statements, results of operations or liquidity. With respect to the meal and rest period and the wage and hour violations alleged in the lawsuits described above, excluding the one lawsuit described below, the parties reached a tentative settlement agreement in January 2020, which is subject to certain conditions, including court approval. During the three months ended December 31, 2019, the Company incurred a loss and recorded a charge equal to the amount of the tentative settlement. The expected resolution of the alleged meal and rest period and wage and hour violations in the lawsuits did not have, and is not expected to have, a material adverse impact on the Company’s condensed consolidated financial statements, results of operations or liquidity. With respect to one lawsuit, although the Company believes it is reasonably possible that it may incur losses associated with such matter, it is not possible to estimate the amount of loss or range of loss, if any, that might result from adverse judgments, settlements or other resolution based on the early stage of the lawsuit, the uncertainty as to the certification of a class or classes and the size of any certified class, if applicable, and the lack of resolution of significant factual and legal issues. However, depending on the amount and timing, an unfavorable resolution of the lawsuit or a change in the Company's assessment of the likelihood of loss could have a material adverse effect on the Company’s condensed consolidated financial statements, results of operations or liquidity in a future period. We believe that we have meritorious defenses and are prepared to vigorously defend the lawsuit. The Company is not a party to any additional litigation or claims, other than routine matters arising in the ordinary course of business that are incidental to the operation of the business of the Company. The Company believes that the results of all |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments —The Company is a tenant under long-term ground leases at five of its hotel properties, including one hotel site for which development is in process. Three of these leases are operating leases and two are finance leases. The ground lease agreements terminate at various dates between 2023 and 2096 and several of the agreements include multiple renewal options for generally five ten five certain that it will exercise the options to extend its ground leases, fixed payments associated with the extensions are included in the measurement of related right-of-use assets and lease liabilities. Payments associated with the option to extend the corporate office lease are not included in the measurement of the right-of-use asset and lease liability, as the associated payments cannot be reasonably estimated. Additionally, as of March 31, 2020, the Company leased certain technology equipment located at its hotel sites under finance leases. Operating lease costs related to ground leases are included in hotel operating expenses, while operating lease costs related to the Company’s office lease are included in general and administrative expenses, in the condensed consolidated statements of operations. Finance lease interest costs are included in interest expense, net in the condensed consolidated statements of operations (see Note 7) or, when pertaining to assets under development, are capitalized and included in property and equipment, net on the condensed consolidated balance sheets (see Note 5). No amortization costs were incurred during the three months ended March 31, 2020 and 2019 for finance leases pertaining to land or land in development. The Company has no variable lease costs or short-term leases. For the three months ended March 31, 2020, the components of the Company’s total lease costs are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease costs $ 769 $ 768 Finance lease costs - interest 61 61 Total lease costs $ 830 $ 829 The Company’s right-of-use assets and lease liabilities are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-use assets: Operating (1) $ 4,298 $ 4,863 Finance (2) 4,343 3,979 Lease liabilities: Operating (3) 12,077 12,590 Finance 3,707 3,379 _________________________________ (1) Included in other assets on the accompanying condensed consolidated balance sheets. (2) Included in property and equipment, net on the accompanying condensed consolidated balance sheets. (3) Included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets. Maturities of lease liabilities as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 2,182 $ 479 2021 2,220 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 83,857 $ 5,363 Total discounted lease liability $ 12,077 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,780 $ 1,656 Weighted-average remaining lease term 45 years 11 years Weighted-average discount rate 6.4 % 6.8 % The Company’s leases do not contain residual value guarantees and do not contain restrictions with respect to incurring additional financial obligations or paying dividends. As of March 31, 2020, the Company does not have any material leases that have not yet commenced. Letter of Credit —As of March 31, 2020, the Company had one outstanding letter of credit, issued by the Corporation, for $0.2 million, which is collateralized by the Corporation Revolving Credit Facility. Legal Contingencies —As of March 31, 2020, six purported class action lawsuits in California have been filed against the Company. The complaints allege, among other things, failure to provide meal and rest periods, wage and hour violations and violations of the Fair Credit Reporting Act. The complaints seek, among other relief, collective and class certification of the lawsuits, unspecified damages, costs and expenses, including attorneys’ fees, and such other relief as the court might find just and proper. With respect to the Fair Credit Reporting Act violations alleged in the lawsuits described above, the parties reached a tentative settlement agreement in May 2019, which is subject to certain conditions, including court approval. During the three months ended June 30, 2019, the Company recorded a payable and a corresponding insurance receivable for the amount of the tentative settlement. The expected resolution of the alleged Fair Credit Reporting Act violations in the lawsuits did not have, and is not expected to have, a material adverse impact on the Company’s condensed consolidated financial statements, results of operations or liquidity. With respect to the meal and rest period and the wage and hour violations alleged in the lawsuits described above, excluding the one lawsuit described below, the parties reached a tentative settlement agreement in January 2020, which is subject to certain conditions, including court approval. During the three months ended December 31, 2019, the Company incurred a loss and recorded a charge equal to the amount of the tentative settlement. The expected resolution of the alleged meal and rest period and wage and hour violations in the lawsuits did not have, and is not expected to have, a material adverse impact on the Company’s condensed consolidated financial statements, results of operations or liquidity. With respect to one lawsuit, although the Company believes it is reasonably possible that it may incur losses associated with such matter, it is not possible to estimate the amount of loss or range of loss, if any, that might result from adverse judgments, settlements or other resolution based on the early stage of the lawsuit, the uncertainty as to the certification of a class or classes and the size of any certified class, if applicable, and the lack of resolution of significant factual and legal issues. However, depending on the amount and timing, an unfavorable resolution of the lawsuit or a change in the Company's assessment of the likelihood of loss could have a material adverse effect on the Company’s condensed consolidated financial statements, results of operations or liquidity in a future period. We believe that we have meritorious defenses and are prepared to vigorously defend the lawsuit. The Company is not a party to any additional litigation or claims, other than routine matters arising in the ordinary course of business that are incidental to the operation of the business of the Company. The Company believes that the results of all |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments —ESH REIT is a tenant under long-term ground leases at five of its hotel properties, including one hotel site for which development is in process. Three of these leases are operating leases and two are finance leases. The ground lease agreements terminate at various dates between 2023 and 2096 and several of the agreements include multiple renewal options for generally five ten Operating lease costs related to ground leases are included in hotel operating expenses in the condensed consolidated statements of operations. Finance lease interest costs are included in interest expense, net in the condensed consolidated statements of operations (see Note 7) or, when pertaining to assets under development, are capitalized and included in property and equipment, net on the condensed consolidated balance sheets (see Note 5). No amortization costs were incurred during the three months ended March 31, 2020 and 2019 for finance leases pertaining to land or land in development. ESH REIT has no variable lease costs or short-term leases. For the three months ended March 31, 2020, components of ESH REIT’s total lease costs are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease costs $ 326 $ 325 Finance lease costs - interest 61 61 Total lease costs $ 387 $ 386 ESH REIT’s right-of-use assets and lease liabilities are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-use assets: Operating (1) $ 1,916 $ 2,084 Finance (2) 4,343 3,979 Lease liabilities: Operating (3) 9,173 9,207 Finance 3,707 3,379 _________________________________ (1) Included in other assets on the accompanying condensed consolidated balance sheets. (2) Included in property and equipment, net on the accompanying condensed consolidated balance sheets. (3) Included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets. Maturities of lease liabilities as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 588 $ 479 2021 784 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 80,827 $ 5,363 Total discounted lease liability $ 9,173 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,654 $ 1,656 Weighted-average remaining lease term 58 years 11 years Weighted-average discount rate 6.6 % 6.8 % ESH REIT’s leases do not contain residual value guarantees and do not contain restrictions with respect to incurring additional financial obligations or paying dividends. As of March 31, 2020, ESH REIT does not have any leases that have not yet commenced. Legal Contingencies —ESH REIT is not a party to any litigation or claims, other than routine matters arising in the ordinary course of business that are incidental to the operation of its business. ESH REIT believes that the results of all litigation and claims, individually or in the aggregate, will not have a material adverse effect on its condensed consolidated financial statements, its business, results of operations and financial condition. |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments —ESH REIT is a tenant under long-term ground leases at five of its hotel properties, including one hotel site for which development is in process. Three of these leases are operating leases and two are finance leases. The ground lease agreements terminate at various dates between 2023 and 2096 and several of the agreements include multiple renewal options for generally five ten Operating lease costs related to ground leases are included in hotel operating expenses in the condensed consolidated statements of operations. Finance lease interest costs are included in interest expense, net in the condensed consolidated statements of operations (see Note 7) or, when pertaining to assets under development, are capitalized and included in property and equipment, net on the condensed consolidated balance sheets (see Note 5). No amortization costs were incurred during the three months ended March 31, 2020 and 2019 for finance leases pertaining to land or land in development. ESH REIT has no variable lease costs or short-term leases. For the three months ended March 31, 2020, components of ESH REIT’s total lease costs are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease costs $ 326 $ 325 Finance lease costs - interest 61 61 Total lease costs $ 387 $ 386 ESH REIT’s right-of-use assets and lease liabilities are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-use assets: Operating (1) $ 1,916 $ 2,084 Finance (2) 4,343 3,979 Lease liabilities: Operating (3) 9,173 9,207 Finance 3,707 3,379 _________________________________ (1) Included in other assets on the accompanying condensed consolidated balance sheets. (2) Included in property and equipment, net on the accompanying condensed consolidated balance sheets. (3) Included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets. Maturities of lease liabilities as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 588 $ 479 2021 784 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 80,827 $ 5,363 Total discounted lease liability $ 9,173 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,654 $ 1,656 Weighted-average remaining lease term 58 years 11 years Weighted-average discount rate 6.6 % 6.8 % ESH REIT’s leases do not contain residual value guarantees and do not contain restrictions with respect to incurring additional financial obligations or paying dividends. As of March 31, 2020, ESH REIT does not have any leases that have not yet commenced. Legal Contingencies —ESH REIT is not a party to any litigation or claims, other than routine matters arising in the ordinary course of business that are incidental to the operation of its business. ESH REIT believes that the results of all litigation and claims, individually or in the aggregate, will not have a material adverse effect on its condensed consolidated financial statements, its business, results of operations and financial condition. |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments —ESH REIT is a tenant under long-term ground leases at five of its hotel properties, including one hotel site for which development is in process. Three of these leases are operating leases and two are finance leases. The ground lease agreements terminate at various dates between 2023 and 2096 and several of the agreements include multiple renewal options for generally five ten Operating lease costs related to ground leases are included in hotel operating expenses in the condensed consolidated statements of operations. Finance lease interest costs are included in interest expense, net in the condensed consolidated statements of operations (see Note 7) or, when pertaining to assets under development, are capitalized and included in property and equipment, net on the condensed consolidated balance sheets (see Note 5). No amortization costs were incurred during the three months ended March 31, 2020 and 2019 for finance leases pertaining to land or land in development. ESH REIT has no variable lease costs or short-term leases. For the three months ended March 31, 2020, components of ESH REIT’s total lease costs are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease costs $ 326 $ 325 Finance lease costs - interest 61 61 Total lease costs $ 387 $ 386 ESH REIT’s right-of-use assets and lease liabilities are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-use assets: Operating (1) $ 1,916 $ 2,084 Finance (2) 4,343 3,979 Lease liabilities: Operating (3) 9,173 9,207 Finance 3,707 3,379 _________________________________ (1) Included in other assets on the accompanying condensed consolidated balance sheets. (2) Included in property and equipment, net on the accompanying condensed consolidated balance sheets. (3) Included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets. Maturities of lease liabilities as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 588 $ 479 2021 784 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 80,827 $ 5,363 Total discounted lease liability $ 9,173 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,654 $ 1,656 Weighted-average remaining lease term 58 years 11 years Weighted-average discount rate 6.6 % 6.8 % ESH REIT’s leases do not contain residual value guarantees and do not contain restrictions with respect to incurring additional financial obligations or paying dividends. As of March 31, 2020, ESH REIT does not have any leases that have not yet commenced. Legal Contingencies —ESH REIT is not a party to any litigation or claims, other than routine matters arising in the ordinary course of business that are incidental to the operation of its business. ESH REIT believes that the results of all litigation and claims, individually or in the aggregate, will not have a material adverse effect on its condensed consolidated financial statements, its business, results of operations and financial condition. |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION The Corporation and ESH REIT each maintain a long-term incentive plan (“LTIP”), approved by their shareholders. Under each LTIP, the Corporation and ESH REIT may issue to eligible employees or directors restricted stock units (“RSUs”) or other equity-based awards, in respect of Paired Shares, with service, performance or market vesting conditions. The aggregate number of Paired Shares that may be the subject of awards under the LTIPs shall not exceed 8.0 million, of which no more than 4.0 million may be granted as incentive stock options. Each of the Corporation’s and ESH REIT’s LTIPs has a share reserve of an equivalent number of shares of Corporation common stock and ESH REIT Class B common stock. As of March 31, 2020, 4.3 million Paired Shares were available for future issuance under the LTIPs. Equity-based compensation expense is recognized by amortizing the grant-date fair value on a straight-line basis over the requisite service period of each award. A portion of the grant-date fair value of all equity-based awards is allocated to a share of Corporation common stock and a portion is allocated to a share of ESH REIT Class B common stock. Equity-based compensation expense, which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations, was $1.1 million and $2.1 million for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, unrecognized compensation expense related to outstanding equity-based awards and the related weighted-average period over which it is expected to be recognized subsequent to March 31, 2020, is presented in the following table. Total unrecognized compensation expense will be adjusted for forfeitures and the achievement of certain market-based conditions. Unrecognized Compensation Expense Related to Outstanding Awards (in thousands) Remaining Weighted-Average Amortization Period (in years) RSUs with service vesting conditions $ 8,689 1.9 RSUs with market vesting conditions 3,963 2.4 Total unrecognized compensation expense $ 12,652 RSU activity during the three months ended March 31, 2020, was as follows: Performance-Based Awards - Service-Based Awards Market Vesting Number of Weighted- Number of Weighted- Outstanding at January 1, 2020 928 $ 16.77 255 $ 16.56 Granted 248 $ 13.07 281 $ 11.67 Settled (280) $ 17.73 (46) $ 18.58 Forfeited (182) $ 16.99 (93) $ 15.39 Outstanding at March 31, 2020 714 $ 15.05 397 $ 13.15 Vested at March 31, 2020 28 $ 14.50 — $ — Nonvested at March 31, 2020 686 $ 15.08 397 $ 13.15 The grant-date fair value of awards with service vesting conditions is based on the closing price of a Paired Share on the date of grant. Service-based awards vest over a period of one three Expected holding period 2.92 years Risk–free rate of return 1.43 % Expected dividend yield 7.01 % |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS In April 2020, 6,422 shares of the Corporation's 8.0% mandatorily redeemable voting preferred stock were redeemed for $6.4 million, plus accrued and unpaid dividends. On May 6, 2020, the Board of Directors of ESH REIT declared a cash distribution of $0.01 per share for the first quarter of 2020 on its Class A and Class B common stock. This distribution is payable on June 4, 2020 to shareholders of record as of May 21, 2020. Corporation Revolving Credit Facility Amendment On May 6, 2020, the Company executed an amendment to the Corporation Revolving Credit Facility and obtained a suspension of the quarterly tested leverage covenant from the beginning of the second quarter of 2020 through the end of the first quarter of 2021 (the “Four Quarter Suspension Period”). For the second quarter of 2021 through the fourth quarter of 2021, the leverage covenant calculation has been modified to use annualized EBITDA, as opposed to trailing twelve-month EBITDA. Additionally, the amendment provides for the Corporation to borrow up to $150.0 million from ESH REIT through an intercompany loan facility. Throughout the Four Quarter Suspension Period, the Company has agreed to maintain minimum liquidity of $150.0 million and to limit share repurchases and dividend payments made by the Corporation. COVID-19 Pandemic Update In December 2019, an outbreak of a novel strain of coronavirus (“COVID-19”) originated in Wuhan, China and has since spread worldwide, posing public health risks that, by March 2020, reached pandemic proportions. The COVID-19 pandemic has significantly affected the global economy and strained the lodging industry due to travel restrictions, stay-at-home directives and shelter-in-place ordinances that have resulted in cancellations and reduced travel around the world. The impact on the lodging industry and other macroeconomic effects has resulted in materially reduced occupancy, ADR, RevPAR and subsequent decreases in hotel room revenues. All of our hotel properties remain open through the COVID-19 pandemic and we expect that our hotels will remain open, subject to government ordinances requiring their closure. We expect our business and operational outlook to be materially negatively impacted by the COVID-19 pandemic. As the COVID-19 pandemic evolves, we will continue to monitor the impacts of the pandemic on our operations and financial condition and implement mitigation strategies while working to preserve our liquidity. As of April 30, 2020, the Company had unrestricted and restricted cash and cash equivalents of $678.0 million. Based on a preliminary assessment of our performance for the first four weeks of the second quarter and current trends, we expect a decline in total revenues in the second quarter of 2020 compared to the second quarter of 2019, in addition to declines in RevPAR and Adjusted EBITDA. Because our second quarter results are not complete and the actual performance of the remaining portion of the quarter could deviate from current trends, our expectations with respect to any of the foregoing quarterly measures or metrics are subject to change. The Company does not expect to, and undertakes no obligation to, announce any change in expectations prior to the announcement of actual second quarter results. In response to the continuing negative impact on our business, results of operations and financial condition, we have taken, or intend to take, additional steps to reduce operating costs and maintain financial and liquidity flexibility, such as, but not limited to the following: • increasing effort and focus for the remainder of 2020 to attract guests staying for one month or longer at a time, which has proven significantly more resilient to date than typical transient and group guests in the broader lodging industry; • reducing labor hours at hotels in response to the decline in occupancy and longer length of stay guests at a number of our properties; • reducing planned capital expenditures related to non-guest facing capital investments, as well as hotel renovations and construction of new hotels; • drawing the full $400 million of borrowing capacity under our revolving credit facilities (see Note 7); • reducing the quarterly dividend to holders of Paired Shares for the first quarter of 2020 and likely reducing it in future periods; and • suspending Paired Share repurchases until the RevPAR environment stabilizes. On March 27, 2020, President Trump signed into law the CARES Act. The CARES Act, among other things, includes provisions relating to net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company continues to examine the impacts the COVID-19 pandemic and the CARES Act may have on its business; however, it is impossible to predict the complete effect and ultimate impact of the COVID-19 pandemic at this time as the situation is continuously evolving. |
SUBSEQUENT EVENTS - REIT
SUBSEQUENT EVENTS - REIT | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Event [Line Items] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS In April 2020, 6,422 shares of the Corporation's 8.0% mandatorily redeemable voting preferred stock were redeemed for $6.4 million, plus accrued and unpaid dividends. On May 6, 2020, the Board of Directors of ESH REIT declared a cash distribution of $0.01 per share for the first quarter of 2020 on its Class A and Class B common stock. This distribution is payable on June 4, 2020 to shareholders of record as of May 21, 2020. Corporation Revolving Credit Facility Amendment On May 6, 2020, the Company executed an amendment to the Corporation Revolving Credit Facility and obtained a suspension of the quarterly tested leverage covenant from the beginning of the second quarter of 2020 through the end of the first quarter of 2021 (the “Four Quarter Suspension Period”). For the second quarter of 2021 through the fourth quarter of 2021, the leverage covenant calculation has been modified to use annualized EBITDA, as opposed to trailing twelve-month EBITDA. Additionally, the amendment provides for the Corporation to borrow up to $150.0 million from ESH REIT through an intercompany loan facility. Throughout the Four Quarter Suspension Period, the Company has agreed to maintain minimum liquidity of $150.0 million and to limit share repurchases and dividend payments made by the Corporation. COVID-19 Pandemic Update In December 2019, an outbreak of a novel strain of coronavirus (“COVID-19”) originated in Wuhan, China and has since spread worldwide, posing public health risks that, by March 2020, reached pandemic proportions. The COVID-19 pandemic has significantly affected the global economy and strained the lodging industry due to travel restrictions, stay-at-home directives and shelter-in-place ordinances that have resulted in cancellations and reduced travel around the world. The impact on the lodging industry and other macroeconomic effects has resulted in materially reduced occupancy, ADR, RevPAR and subsequent decreases in hotel room revenues. All of our hotel properties remain open through the COVID-19 pandemic and we expect that our hotels will remain open, subject to government ordinances requiring their closure. We expect our business and operational outlook to be materially negatively impacted by the COVID-19 pandemic. As the COVID-19 pandemic evolves, we will continue to monitor the impacts of the pandemic on our operations and financial condition and implement mitigation strategies while working to preserve our liquidity. As of April 30, 2020, the Company had unrestricted and restricted cash and cash equivalents of $678.0 million. Based on a preliminary assessment of our performance for the first four weeks of the second quarter and current trends, we expect a decline in total revenues in the second quarter of 2020 compared to the second quarter of 2019, in addition to declines in RevPAR and Adjusted EBITDA. Because our second quarter results are not complete and the actual performance of the remaining portion of the quarter could deviate from current trends, our expectations with respect to any of the foregoing quarterly measures or metrics are subject to change. The Company does not expect to, and undertakes no obligation to, announce any change in expectations prior to the announcement of actual second quarter results. In response to the continuing negative impact on our business, results of operations and financial condition, we have taken, or intend to take, additional steps to reduce operating costs and maintain financial and liquidity flexibility, such as, but not limited to the following: • increasing effort and focus for the remainder of 2020 to attract guests staying for one month or longer at a time, which has proven significantly more resilient to date than typical transient and group guests in the broader lodging industry; • reducing labor hours at hotels in response to the decline in occupancy and longer length of stay guests at a number of our properties; • reducing planned capital expenditures related to non-guest facing capital investments, as well as hotel renovations and construction of new hotels; • drawing the full $400 million of borrowing capacity under our revolving credit facilities (see Note 7); • reducing the quarterly dividend to holders of Paired Shares for the first quarter of 2020 and likely reducing it in future periods; and • suspending Paired Share repurchases until the RevPAR environment stabilizes. On March 27, 2020, President Trump signed into law the CARES Act. The CARES Act, among other things, includes provisions relating to net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company continues to examine the impacts the COVID-19 pandemic and the CARES Act may have on its business; however, it is impossible to predict the complete effect and ultimate impact of the COVID-19 pandemic at this time as the situation is continuously evolving. |
ESH Hospitality, Inc. | |
Subsequent Event [Line Items] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On May 6, 2020, the Board of Directors of ESH REIT declared a cash distribution of $0.01 per share for the first quarter of 2020 on its Class A and Class B common stock. This distribution is payable on June 4, 2020 to shareholders of record as of May 21, 2020. COVID-19 Pandemic Update In December 2019, an outbreak of a novel strain of coronavirus (“COVID-19”) originated in Wuhan, China and has since spread worldwide, posing public health risks that, by March 2020, reached pandemic proportions. The COVID-19 pandemic has significantly affected the global economy and strained the lodging industry due to travel restrictions, stay-at-home directives and shelter-in-place ordinances that have resulted in cancellations and reduced travel around the world. ESH REIT's business and operational outlook is expected to be materially negatively impacted by the COVID-19 pandemic, specifically its ability to generate material, if any, percentage rental revenues under its leases due to material decreases in hotel revenues of the Operating Lessees. As the COVID-19 pandemic evolves, ESH REIT will continue to monitor the impacts of the pandemic on the operations of the Operating Lessees, including their ability to pay fixed minimum rents in accordance with the terms of the lease agreements. ESH REIT will also continue to monitor its financial condition and implement mitigation strategies while working to preserve liquidity. As of April 30, 2020, ESH REIT had unrestricted cash and cash equivalents of $608.4 million. Based on a preliminary assessment of our performance for the first four weeks of the second quarter and current trends, ESH REIT expects a decline in cash percentage rental payments in the second quarter of 2020 compared to the second quarter of 2019. Because second quarter results are not complete and the actual performance of the remaining portion of the quarter could deviate from current trends, ESH REIT's expectations with respect to any of the foregoing are subject to change. ESH REIT does not expect to, and undertakes no obligation to, announce any change in expectations prior to the announcement of actual second quarter results. In response to the negative impact on ESH REIT's business and financial condition, ESH REIT has taken, or intends to take, additional steps to reduce operating costs and maintain financial and liquidity flexibility, such as, but not limited to the following: • reducing planned capital expenditures related to non-guest facing capital investments, as well as hotel renovations and construction of new hotels; • drawing the full $350 million of borrowing capacity under the ESH REIT Revolving Credit Facility (see Note 7); • reducing the quarterly distribution to holders of ESH REIT's Class A and Class B common stock for the first quarter of 2020 and likely reducing it in future periods; and • suspending Paired Share repurchases until the economic environment stabilizes. On March 27, 2020, President Trump signed into law the CARES Act. The CARES Act, among other things, includes provisions relating to net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. ESH REIT continues to examine the impacts the COVID-19 pandemic and the CARES Act may have on its business; however, it is impossible to predict the complete effect and ultimate impact as the situation is continuously evolving. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Interim Presentation | Interim Presentation— Certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP have been condensed or omitted in the accompanying condensed consolidated financial statements. The Company believes the disclosures made are adequate to prevent the information presented from being misleading. However, the condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2019 included in the combined annual report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 26, 2020. The accompanying condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring items) necessary to present fairly the Company’s financial position as of March 31, 2020 and the results of the Company’s operations, comprehensive income, changes in equity and cash flows for the three months ended March 31, 2020 and 2019. Interim results are not necessarily indicative of full year performance because of the impact of seasonal, short-term or other market variations, as well as the impact of acquisitions, dispositions, hotel renovations and financing or other capital transactions. |
Use of Estimates | Use of Estimates —The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and amounts of revenues and expenses during the reporting period. Management used significant estimates to determine the estimated useful lives of tangible assets, as well as in the assessment of tangible and intangible assets for impairment, estimated liabilities for insurance reserves and income taxes. Actual results could differ from those estimates. |
Property and Equipment | Property and Equipment —Property and equipment additions are recorded at cost. Major improvements that extend the life or utility of property or equipment are capitalized and depreciated over a period equal to the shorter of the estimated useful life of the improvement or the remaining estimated useful life of the asset. Ordinary repairs and maintenance are charged to expense as incurred. Depreciation and amortization are recorded on a straight-line basis over estimated useful lives which range from 2 to 49 years. Management assesses long-lived assets for potential impairment quarterly, as well as when events or changes in circumstances indicate the carrying amount of an asset or group of assets may not be recoverable. The identification of events or changes in circumstances that indicate the carrying value of assets may not be recoverable requires judgment. The Company reviews for impairment indicators at the lowest level of identifiable cash flows based on quantitative, qualitative and certain industry-related factors. Quantitative factors include, but are not limited to, hotel property EBITDA, EBITDA margins and EBITDA multiples, and serve to screen assets with historical, current or projected operating cash flow losses or deterioration. Qualitative factors include a change in physical condition, economic environment, regulatory environment or primary use, including the evaluation of the asset for disposition. Recoverability of property and equipment is measured by a comparison of the carrying amount of a hotel property or group of hotel properties to the estimated future undiscounted cash flows expected to be generated by the hotel property or group of hotel properties. Impairment is recognized when estimated future undiscounted cash flows, including expected proceeds from disposition, are less than the carrying value of the hotel property or group of hotel properties. To the extent that a hotel property or group of hotel properties is impaired, the excess carrying amount over estimated fair value is recognized as an impairment charge. Fair value is determined based upon the discounted cash flows of the hotel property or group of hotel properties, bids, quoted market prices or independent appraisals, as considered necessary. The estimation and evaluation of future cash flows, in particular the holding period for real estate assets and asset composition and/or concentration within real estate portfolios, relies on judgments and assumptions regarding holding period, current and future operating performance and current and future market conditions. It is possible that such judgments and/or estimates will change; in particular, the effects of the COVID-19 pandemic could cause economic and market conditions to continue to deteriorate, and if this occurs, or if the Company's expected holding period for real estate assets changes, the Company may recognize impairment charges or losses on sale in future periods reflecting either changes in estimate, circumstance or the estimated market value of assets. Based on market conditions and the Company's plans with respect to its hotel properties as of March 31, 2020, the Company believes that the carrying amounts of the hotel properties are recoverable |
Intangible Assets and Goodwill | Intangible Assets and Goodwill —Intangible assets include trademarks, corporate customer relationships and licenses related to certain internal-use software. Corporate customer relationships and software licenses are amortized using the straight-line method over their estimated useful lives; the estimated useful life of customer relationships is 20 years, and the estimated useful life of software licenses is the remaining non-cancellable term of each respective contract. Trademarks are not amortized. Goodwill represents the purchase price in excess of the fair value of net assets acquired in conjunction with the acquisition of the Company's predecessor in 2010. Definite-lived intangible assets are reviewed for impairment quarterly and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Indefinite-lived intangible assets, including goodwill, are reviewed for impairment quarterly, and the Company tests for impairment more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has two reportable operating segments, owned hotels and franchise and management. There is no goodwill associated with our franchise and management segment. Management analyzes goodwill associated with all owned hotels when analyzing for potential impairment. The Company first assesses qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. As of March 31, 2020, the Company believes that the carrying amount of its intangible assets, including goodwill, are recoverable and there are no changes in circumstances that would more likely than not reduce the fair value of its reporting units below their carrying amount; therefore, no impairment charges were recorded during the three months ended March 31, 2020. However, if the effects of the COVID-19 pandemic cause economic and market conditions to continue to deteriorate, in particular if the market price of the Company's Paired Shares further declines, these events could result in impairment charges in the future. Actual results are subject to a high degree of uncertainty due to the volatility of macroeconomic trends and the evolving nature of the COVID-19 pandemic. |
Revenue Recognition | Revenue from Owned and Operated Hotels — Revenue generated from owned and operated hotels consists of room and other hotel revenues recognized when services are provided. When a reservation is made, the Company deems that the parties have approved a contract in accordance with customary business practices and are committed to perform their respective obligations. At such time, each party’s rights regarding the services to be transferred are identified, payment terms are specified, the contract has commercial substance and, in most instances, it is probable the Company will collect substantially all consideration to which it will be entitled in exchange for services. Each room night consumed by a guest with a cancellable reservation represents a contract whereby the Company has a performance obligation to provide the room night at an agreed upon price. For cancellable reservations, the Company recognizes revenue as each performance obligation (i.e., each room night) is met. Such contract is renewed if the guest continues their stay. For room nights consumed by a guest with a non-cancellable reservation, the entire reservation period represents the contract term whereby the Company has a performance obligation to provide the room night or nights at an agreed upon price. For non-cancellable reservations, the Company recognizes revenue over the term of the performance period (i.e., the reservation period) as room nights are consumed. For these reservations, the room rate is typically fixed over the reservation period. The Company uses an output method based on performance completed to date (i.e., room nights consumed) to determine the amount of revenue it recognizes on a daily basis if the length of a non-cancellable reservation exceeds one night since consumption of room nights indicates when services are transferred to the guest. In certain instances, variable consideration may exist with respect to the transaction price, such as discounts, coupons and price concessions made upon guest checkout. In evaluating its performance obligation, the Company bundles the obligation to provide the guest the room itself with other obligations (such as free WiFi, grab and go breakfast, access to on-site laundry facilities and parking), as the other obligations are not distinct and separable because the guest cannot benefit from the additional amenities without the consumed room night. The Company’s obligation to provide the additional items or services is not separately identifiable from the fundamental contractual obligation (i.e., providing the room and its contents). The Company has no performance obligations once a guest’s stay is complete. Certain revenues are generated through third-party intermediaries or distribution channels (i.e., online travel agents). Regardless of the basis on which the Company is compensated (i.e., gross or net), the Company is responsible for fulfilling the promise to provide the hotel room and related services to the guest and retains inventory risk. Since the Company controls the inventory and services provided and because third-party intermediaries are typically not contractually required to guarantee room night consumption, the Company is the principal in these transactions. As such, the Company is required to record revenue at an amount equal to the price charged to the guest (i.e., on a gross basis). Third-party intermediaries that pay the Company directly (i.e., on a net basis) typically charge the guest additional fees, blend the room offering with other offerings at amounts which are not allocable and may adjust the price without the Company’s approval. As such, the Company is unable to calculate the room rate charged to the guest. Since any estimate the Company would make has significant uncertainty that ultimately would not be resolved, despite its role as principal, in these instances the Company records revenue equal to the amount paid by the third-party intermediaries (i.e., the net amount). Revenue from Franchise and Management Fees — Revenue generated from franchise and management fees consists of the following: • Franchise fees, which consist of an initial fee and an ongoing royalty fee based on a percentage of a hotel’s monthly revenue in exchange for the access to and use of the Company’s brand name and other intellectual property. Initial fees are deferred and recognized over the expected contract or customer life. Royalty fees are recognized over time as franchisees derive value from the license to use the intellectual property. • Management fees, which consist of an ongoing base fee calculated as a percentage of a hotel’s monthly revenue in exchange for on-site hotel management services. Management fees are recognized over time as third-party hotel owners derive value from on-site personnel and related services. • Other revenues from franchised and managed properties, which include the reimbursement of costs incurred on behalf of third-party hotel owners on a direct and an indirect basis, as follows: ◦ Direct costs incurred with respect to management and franchise agreements include on-site hotel personnel and incremental reservation and distribution costs for which the Company is reimbursed on a dollar-for-dollar basis. Since the Company employs the hotel personnel and has discretion over reservation and distribution costs, it is the principal with respect to these services and revenue is recognized on a gross basis. ◦ Indirect costs incurred with respect to franchise agreements include costs associated with certain shared system-wide platforms (i.e., system services), such as marketing, technology infrastructure, central reservations, national sales and revenue management systems. The Company is reimbursed for indirect costs through a system service fee, or program fee, based on a percentage of a hotel’s monthly revenue. System service fees are recognized over time as franchisees derive value from the license to use these processes and systems. The Company has discretion over how it spends system service fees and is the principal with respect to these services. Revenue is recognized on a gross basis; expense is recognized as incurred. Over time, the Company manages system services to break-even, but the timing of system service fee revenues will typically not align with expenses incurred to operate the programs. The promise to provide access to the Company’s intellectual property is combined with the promise to provide system services to form a single performance obligation since the promises generally accompany one another. Hotel management services form a single performance obligation. As noted above, each identified performance obligation is considered to be a series of services transferred over time. Revenue is recognized on an output method based on performance completed to date. The Company recognizes revenue in the amount to which it has a right to bill third parties under their respective franchise or management agreements, as it has a right to consideration in an amount that corresponds directly with the third parties’ hotel revenues. Franchise, management and system service fees are characterized as variable consideration and vary from period to period. In the event that fees include variables that extend beyond the current period, the Company uses the most likely amount method to determine the amount of revenue to record based on a reasonable revenue forecast for the applicable hotel. In most instances, the Company does not have constraining estimates, as third-party hotel revenues are typically available and obtained monthly. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Reference Rate Reform —In March 2020, the FASB issued an accounting standards update that provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR, subject to meeting certain criteria. The Company adopted this update on March 12, 2020, and the update is effective through December 31, 2022, during which time the Company may elect to apply the optional expedients and exceptions offered under the standard. The Company's variable rate debt and interest rate swap are tied to rates that reference LIBOR (see Notes 7 and 8). As of March 31, 2020, the Company had not applied any of these optional expedients or exceptions. The adoption of this update did not, and is not expected to, have a material effect on the Company's condensed consolidated financial statements. Income Taxes —In December 2019, the FASB issued an accounting standards update which simplifies the accounting for income taxes. The update amends several topics including interim period accounting for enacted changes in tax law and year- to-date loss limitation in interim-period tax accounting. This update will be effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, and may be early adopted. The Company does not expect the adoption of this update to have a material effect on its condensed consolidated financial statements. Fair Value Measurement— In August 2018, the FASB issued an accounting standards update which modifies the disclosure requirements for fair value measurements in Topic 820, Fair Value Measurement . The Company adopted this update on January 1, 2020. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Intangibles-Goodwill and Other—Internal-Use Software— In August 2018, the FASB issued an accounting standards update which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The Company adopted this update on January 1, 2020, using a prospective transition method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Goodwill— In January 2017, the FASB issued an accounting standards update in which the guidance on testing for goodwill was updated to eliminate Step 2 in the determination on whether goodwill should be considered impaired. Annual and/or interim assessments are still required. The Company adopted this update on January 1, 2020, using a prospective transition method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Financial Instruments—Credit Losses— In June 2016, the FASB issued an accounting standards update which requires the measurement of an impairment allowance for certain financial assets based on a company’s current estimate of all contractual cash flows it does not expect to collect. The new standard primarily impacts the manner in which the Company estimates its allowance for uncollectible trade receivables. The standard requires the Company to measure its allowance for doubtful accounts based on current conditions, historical experience and reasonable and supportable forecasts for each pool of receivables with similar risk characteristics. The Company adopted this update on January 1, 2020, using a modified retrospective method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements and had no effect on or impact to retained earnings. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REIT (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
Interim Presentation | Interim Presentation— Certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP have been condensed or omitted in the accompanying condensed consolidated financial statements. The Company believes the disclosures made are adequate to prevent the information presented from being misleading. However, the condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2019 included in the combined annual report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 26, 2020. The accompanying condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring items) necessary to present fairly the Company’s financial position as of March 31, 2020 and the results of the Company’s operations, comprehensive income, changes in equity and cash flows for the three months ended March 31, 2020 and 2019. Interim results are not necessarily indicative of full year performance because of the impact of seasonal, short-term or other market variations, as well as the impact of acquisitions, dispositions, hotel renovations and financing or other capital transactions. |
Use of Estimates | Use of Estimates —The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and amounts of revenues and expenses during the reporting period. Management used significant estimates to determine the estimated useful lives of tangible assets, as well as in the assessment of tangible and intangible assets for impairment, estimated liabilities for insurance reserves and income taxes. Actual results could differ from those estimates. |
Property and Equipment | Property and Equipment —Property and equipment additions are recorded at cost. Major improvements that extend the life or utility of property or equipment are capitalized and depreciated over a period equal to the shorter of the estimated useful life of the improvement or the remaining estimated useful life of the asset. Ordinary repairs and maintenance are charged to expense as incurred. Depreciation and amortization are recorded on a straight-line basis over estimated useful lives which range from 2 to 49 years. Management assesses long-lived assets for potential impairment quarterly, as well as when events or changes in circumstances indicate the carrying amount of an asset or group of assets may not be recoverable. The identification of events or changes in circumstances that indicate the carrying value of assets may not be recoverable requires judgment. The Company reviews for impairment indicators at the lowest level of identifiable cash flows based on quantitative, qualitative and certain industry-related factors. Quantitative factors include, but are not limited to, hotel property EBITDA, EBITDA margins and EBITDA multiples, and serve to screen assets with historical, current or projected operating cash flow losses or deterioration. Qualitative factors include a change in physical condition, economic environment, regulatory environment or primary use, including the evaluation of the asset for disposition. Recoverability of property and equipment is measured by a comparison of the carrying amount of a hotel property or group of hotel properties to the estimated future undiscounted cash flows expected to be generated by the hotel property or group of hotel properties. Impairment is recognized when estimated future undiscounted cash flows, including expected proceeds from disposition, are less than the carrying value of the hotel property or group of hotel properties. To the extent that a hotel property or group of hotel properties is impaired, the excess carrying amount over estimated fair value is recognized as an impairment charge. Fair value is determined based upon the discounted cash flows of the hotel property or group of hotel properties, bids, quoted market prices or independent appraisals, as considered necessary. The estimation and evaluation of future cash flows, in particular the holding period for real estate assets and asset composition and/or concentration within real estate portfolios, relies on judgments and assumptions regarding holding period, current and future operating performance and current and future market conditions. It is possible that such judgments and/or estimates will change; in particular, the effects of the COVID-19 pandemic could cause economic and market conditions to continue to deteriorate, and if this occurs, or if the Company's expected holding period for real estate assets changes, the Company may recognize impairment charges or losses on sale in future periods reflecting either changes in estimate, circumstance or the estimated market value of assets. Based on market conditions and the Company's plans with respect to its hotel properties as of March 31, 2020, the Company believes that the carrying amounts of the hotel properties are recoverable |
Intangible Assets and Goodwill | Intangible Assets and Goodwill —Intangible assets include trademarks, corporate customer relationships and licenses related to certain internal-use software. Corporate customer relationships and software licenses are amortized using the straight-line method over their estimated useful lives; the estimated useful life of customer relationships is 20 years, and the estimated useful life of software licenses is the remaining non-cancellable term of each respective contract. Trademarks are not amortized. Goodwill represents the purchase price in excess of the fair value of net assets acquired in conjunction with the acquisition of the Company's predecessor in 2010. Definite-lived intangible assets are reviewed for impairment quarterly and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Indefinite-lived intangible assets, including goodwill, are reviewed for impairment quarterly, and the Company tests for impairment more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has two reportable operating segments, owned hotels and franchise and management. There is no goodwill associated with our franchise and management segment. Management analyzes goodwill associated with all owned hotels when analyzing for potential impairment. The Company first assesses qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. As of March 31, 2020, the Company believes that the carrying amount of its intangible assets, including goodwill, are recoverable and there are no changes in circumstances that would more likely than not reduce the fair value of its reporting units below their carrying amount; therefore, no impairment charges were recorded during the three months ended March 31, 2020. However, if the effects of the COVID-19 pandemic cause economic and market conditions to continue to deteriorate, in particular if the market price of the Company's Paired Shares further declines, these events could result in impairment charges in the future. Actual results are subject to a high degree of uncertainty due to the volatility of macroeconomic trends and the evolving nature of the COVID-19 pandemic. |
Revenue Recognition | Revenue from Owned and Operated Hotels — Revenue generated from owned and operated hotels consists of room and other hotel revenues recognized when services are provided. When a reservation is made, the Company deems that the parties have approved a contract in accordance with customary business practices and are committed to perform their respective obligations. At such time, each party’s rights regarding the services to be transferred are identified, payment terms are specified, the contract has commercial substance and, in most instances, it is probable the Company will collect substantially all consideration to which it will be entitled in exchange for services. Each room night consumed by a guest with a cancellable reservation represents a contract whereby the Company has a performance obligation to provide the room night at an agreed upon price. For cancellable reservations, the Company recognizes revenue as each performance obligation (i.e., each room night) is met. Such contract is renewed if the guest continues their stay. For room nights consumed by a guest with a non-cancellable reservation, the entire reservation period represents the contract term whereby the Company has a performance obligation to provide the room night or nights at an agreed upon price. For non-cancellable reservations, the Company recognizes revenue over the term of the performance period (i.e., the reservation period) as room nights are consumed. For these reservations, the room rate is typically fixed over the reservation period. The Company uses an output method based on performance completed to date (i.e., room nights consumed) to determine the amount of revenue it recognizes on a daily basis if the length of a non-cancellable reservation exceeds one night since consumption of room nights indicates when services are transferred to the guest. In certain instances, variable consideration may exist with respect to the transaction price, such as discounts, coupons and price concessions made upon guest checkout. In evaluating its performance obligation, the Company bundles the obligation to provide the guest the room itself with other obligations (such as free WiFi, grab and go breakfast, access to on-site laundry facilities and parking), as the other obligations are not distinct and separable because the guest cannot benefit from the additional amenities without the consumed room night. The Company’s obligation to provide the additional items or services is not separately identifiable from the fundamental contractual obligation (i.e., providing the room and its contents). The Company has no performance obligations once a guest’s stay is complete. Certain revenues are generated through third-party intermediaries or distribution channels (i.e., online travel agents). Regardless of the basis on which the Company is compensated (i.e., gross or net), the Company is responsible for fulfilling the promise to provide the hotel room and related services to the guest and retains inventory risk. Since the Company controls the inventory and services provided and because third-party intermediaries are typically not contractually required to guarantee room night consumption, the Company is the principal in these transactions. As such, the Company is required to record revenue at an amount equal to the price charged to the guest (i.e., on a gross basis). Third-party intermediaries that pay the Company directly (i.e., on a net basis) typically charge the guest additional fees, blend the room offering with other offerings at amounts which are not allocable and may adjust the price without the Company’s approval. As such, the Company is unable to calculate the room rate charged to the guest. Since any estimate the Company would make has significant uncertainty that ultimately would not be resolved, despite its role as principal, in these instances the Company records revenue equal to the amount paid by the third-party intermediaries (i.e., the net amount). Revenue from Franchise and Management Fees — Revenue generated from franchise and management fees consists of the following: • Franchise fees, which consist of an initial fee and an ongoing royalty fee based on a percentage of a hotel’s monthly revenue in exchange for the access to and use of the Company’s brand name and other intellectual property. Initial fees are deferred and recognized over the expected contract or customer life. Royalty fees are recognized over time as franchisees derive value from the license to use the intellectual property. • Management fees, which consist of an ongoing base fee calculated as a percentage of a hotel’s monthly revenue in exchange for on-site hotel management services. Management fees are recognized over time as third-party hotel owners derive value from on-site personnel and related services. • Other revenues from franchised and managed properties, which include the reimbursement of costs incurred on behalf of third-party hotel owners on a direct and an indirect basis, as follows: ◦ Direct costs incurred with respect to management and franchise agreements include on-site hotel personnel and incremental reservation and distribution costs for which the Company is reimbursed on a dollar-for-dollar basis. Since the Company employs the hotel personnel and has discretion over reservation and distribution costs, it is the principal with respect to these services and revenue is recognized on a gross basis. ◦ Indirect costs incurred with respect to franchise agreements include costs associated with certain shared system-wide platforms (i.e., system services), such as marketing, technology infrastructure, central reservations, national sales and revenue management systems. The Company is reimbursed for indirect costs through a system service fee, or program fee, based on a percentage of a hotel’s monthly revenue. System service fees are recognized over time as franchisees derive value from the license to use these processes and systems. The Company has discretion over how it spends system service fees and is the principal with respect to these services. Revenue is recognized on a gross basis; expense is recognized as incurred. Over time, the Company manages system services to break-even, but the timing of system service fee revenues will typically not align with expenses incurred to operate the programs. The promise to provide access to the Company’s intellectual property is combined with the promise to provide system services to form a single performance obligation since the promises generally accompany one another. Hotel management services form a single performance obligation. As noted above, each identified performance obligation is considered to be a series of services transferred over time. Revenue is recognized on an output method based on performance completed to date. The Company recognizes revenue in the amount to which it has a right to bill third parties under their respective franchise or management agreements, as it has a right to consideration in an amount that corresponds directly with the third parties’ hotel revenues. Franchise, management and system service fees are characterized as variable consideration and vary from period to period. In the event that fees include variables that extend beyond the current period, the Company uses the most likely amount method to determine the amount of revenue to record based on a reasonable revenue forecast for the applicable hotel. In most instances, the Company does not have constraining estimates, as third-party hotel revenues are typically available and obtained monthly. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Reference Rate Reform —In March 2020, the FASB issued an accounting standards update that provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR, subject to meeting certain criteria. The Company adopted this update on March 12, 2020, and the update is effective through December 31, 2022, during which time the Company may elect to apply the optional expedients and exceptions offered under the standard. The Company's variable rate debt and interest rate swap are tied to rates that reference LIBOR (see Notes 7 and 8). As of March 31, 2020, the Company had not applied any of these optional expedients or exceptions. The adoption of this update did not, and is not expected to, have a material effect on the Company's condensed consolidated financial statements. Income Taxes —In December 2019, the FASB issued an accounting standards update which simplifies the accounting for income taxes. The update amends several topics including interim period accounting for enacted changes in tax law and year- to-date loss limitation in interim-period tax accounting. This update will be effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, and may be early adopted. The Company does not expect the adoption of this update to have a material effect on its condensed consolidated financial statements. Fair Value Measurement— In August 2018, the FASB issued an accounting standards update which modifies the disclosure requirements for fair value measurements in Topic 820, Fair Value Measurement . The Company adopted this update on January 1, 2020. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Intangibles-Goodwill and Other—Internal-Use Software— In August 2018, the FASB issued an accounting standards update which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The Company adopted this update on January 1, 2020, using a prospective transition method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Goodwill— In January 2017, the FASB issued an accounting standards update in which the guidance on testing for goodwill was updated to eliminate Step 2 in the determination on whether goodwill should be considered impaired. Annual and/or interim assessments are still required. The Company adopted this update on January 1, 2020, using a prospective transition method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements. Financial Instruments—Credit Losses— In June 2016, the FASB issued an accounting standards update which requires the measurement of an impairment allowance for certain financial assets based on a company’s current estimate of all contractual cash flows it does not expect to collect. The new standard primarily impacts the manner in which the Company estimates its allowance for uncollectible trade receivables. The standard requires the Company to measure its allowance for doubtful accounts based on current conditions, historical experience and reasonable and supportable forecasts for each pool of receivables with similar risk characteristics. The Company adopted this update on January 1, 2020, using a modified retrospective method. The adoption of this update did not have a material effect on the Company's condensed consolidated financial statements and had no effect on or impact to retained earnings. |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
Interim Presentation | Interim Presentation —Certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP have been condensed or omitted in the accompanying condensed consolidated financial statements. ESH REIT believes the disclosures made are adequate to prevent the information presented from being misleading. However, the condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2019, included in the combined annual report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 26, 2020. The accompanying condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring items) necessary to present fairly ESH REIT’s financial position as of March 31, 2020 and the results of ESH REIT’s operations, comprehensive income, changes in equity and cash flows for the three months ended March 31, 2020 and 2019. Interim results are not necessarily indicative of full year performance because of acquisitions, dispositions, financing or other capital transactions and the impact of accounting for variable rental payments under lease arrangements. |
Use of Estimates | Use of Estimates —The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the amounts of revenues and expenses during the |
Property and Equipment | Property and Equipment —Property and equipment additions are recorded at cost. Major improvements that extend the life or utility of property or equipment are capitalized and depreciated over a period equal to the shorter of the estimated useful life of the improvement or the remaining estimated useful life of the asset. Ordinary repairs and maintenance are charged to expense as incurred. Depreciation and amortization are recorded on a straight-line basis over estimated useful lives which range from 2 to 49 years. Management assesses long-lived assets for potential impairment quarterly, as well as when events or changes in circumstances indicate the carrying amount of an asset or group of assets may not be recoverable. The identification of events or changes in circumstances that indicate the carrying value of assets may not be recoverable requires judgment. ESH REIT reviews for impairment indicators at the lowest level of identifiable cash flows based on quantitative, qualitative and certain industry-related factors. Quantitative factors include, but are not limited to, hotel property EBITDA, EBITDA margins and EBITDA multiples, and serve to screen assets or asset groups with historical, current or projected operating cash flow losses or deterioration. Qualitative factors include a change in physical condition, economic environment, regulatory environment or primary use, including the evaluation of the asset or group of assets for disposition. Recoverability of property and equipment is measured by a comparison of the carrying amount of a hotel property or group of hotel properties (grouped under ESH REIT’s leases) to the estimated future undiscounted cash flows expected to be generated by the hotel property or group of hotel properties. Impairment is recognized when estimated future undiscounted cash flows, including expected proceeds from disposition, are less than the carrying value of the hotel property or group of hotel properties. To the extent that a hotel property or group of hotel properties is impaired, the excess carrying amount over estimated fair value is recognized as an impairment charge. Fair value is determined based upon the discounted cash flows of the hotel property or group of hotel properties, bids, quoted market prices or independent appraisals, as considered necessary. The estimation and evaluation of future cash flows, in particular the holding period for real estate assets and asset composition and/or concentration within real estate portfolios, relies on judgments and assumptions regarding holding period, current and future operating performance and current and future market conditions. It is possible that such judgments and/or estimates will change; in particular, the effects of the COVID-19 pandemic could cause economic and market conditions to continue to deteriorate, and if this occurs, or if ESH REIT's expected holding period for real estate assets changes, ESH REIT may recognize impairment charges or losses on sale in future periods reflecting either changes in estimate, circumstance or the estimated market value of assets. Based on market conditions and ESH REIT's plans with respect to its hotel properties as of March 31, 2020, ESH REIT believes that the carrying amounts of the hotel properties are recoverable and no impairment charges were recorded during the three months ended March 31, 2020. However, actual results are subject to a high degree of uncertainty due to the volatility of macroeconomic trends and the evolving nature of the COVID-19 pandemic. |
Intangible Assets and Goodwill | Intangible Assets and Goodwill —Intangible assets include licenses related to certain internal-use software. Licenses are amortized using the straight-line method over their estimated useful life, which is the remaining non-cancellable term of each respective contract. Goodwill represents the purchase price in excess of the fair value of net assets acquired in conjunction with the acquisition of ESH REIT's predecessor in 2010. Definite-lived intangible assets are reviewed for impairment quarterly and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is reviewed for impairment quarterly, and ESH REIT tests for impairment more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. ESH REIT has one operating segment, which is its reporting unit; therefore, management analyzes goodwill associated with all hotels when analyzing for potential impairment. ESH REIT first assesses qualitative factors to determine if it is more likely than not that the fair value of its reporting unit is less than its carrying amount. |
Revenue Recognition | Revenue Recognition —ESH REIT’s sole source of revenues is rental revenue derived from operating leases with subsidiaries of the Corporation (i.e., all revenues are generated from agreements with related parties (see Note 10)). Rental |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Reference Rate Reform —In March 2020, the FASB issued an accounting standards update that provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR, subject to meeting certain criteria. ESH REIT adopted this update on March 12, 2020, and the update is effective through December 31, 2022, during which time ESH REIT may elect to apply the optional expedients and exceptions offered under the standard. ESH REIT's variable rate debt and interest rate swap are tied to rates that reference LIBOR (see Notes 7 and 8). As of March 31, 2020, ESH REIT had not applied any of these optional expedients or exceptions. The adoption of this update did not, and is not expected to, have a material effect on ESH REIT's condensed consolidated financial statements. Income Taxes —In December 2019, the FASB issued an accounting standards update which simplifies the accounting for income taxes. The update amends several topics including interim period accounting for enacted changes in tax law and year-to-date loss limitation in interim-period tax accounting. This update will be effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, and may be early adopted. ESH REIT does not expect the adoption of this update to have a material effect on its condensed consolidated financial statements. Fair Value Measurement— In August 2018, the FASB issued an accounting standards update which modifies the disclosure requirements for fair value measurements in Topic 820, Fair Value Measurement . ESH REIT adopted this update on January 1, 2020. The adoption of this update did not have a material effect on ESH REIT's condensed consolidated financial statements. Intangibles-Goodwill and Other—Internal-Use Software— In August 2018, the FASB issued an accounting standards update which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. ESH REIT adopted this update on January 1, 2020, using a prospective transition method. The adoption of this update did not have a material effect on ESH REIT's condensed consolidated financial statements. |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Calculations of Basic and Diluted Net Income per Share, Including a Reconciliation of Numerators and Denominators | The calculations of basic and diluted net income per share, including a reconciliation of the numerators and denominators, are as follows (in thousands, except per share data): Three Months Ended 2020 2019 Numerator: Net income available to Extended Stay America, Inc. common shareholders - basic $ 4,554 $ 21,934 Income attributable to noncontrolling interests assuming conversion (2) (4) Net income available to Extended Stay America, Inc. common shareholders - diluted $ 4,552 $ 21,930 Denominator: Weighted-average number of Extended Stay America, Inc. common shares outstanding - basic 177,990 188,348 Dilutive securities 181 228 Weighted-average number of Extended Stay America, Inc. common shares outstanding - diluted $ 178,171 $ 188,576 Net income per Extended Stay America, Inc. common share - basic $ 0.03 $ 0.12 Net income per Extended Stay America, Inc. common share - diluted $ 0.03 $ 0.12 |
NET INCOME PER SHARE - REIT (Ta
NET INCOME PER SHARE - REIT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
Calculations of Basic and Diluted Net Income per Share, Including a Reconciliation of Numerators and Denominators | The calculations of basic and diluted net income per share, including a reconciliation of the numerators and denominators, are as follows (in thousands, except per share data): Three Months Ended 2020 2019 Numerator: Net income available to Extended Stay America, Inc. common shareholders - basic $ 4,554 $ 21,934 Income attributable to noncontrolling interests assuming conversion (2) (4) Net income available to Extended Stay America, Inc. common shareholders - diluted $ 4,552 $ 21,930 Denominator: Weighted-average number of Extended Stay America, Inc. common shares outstanding - basic 177,990 188,348 Dilutive securities 181 228 Weighted-average number of Extended Stay America, Inc. common shares outstanding - diluted $ 178,171 $ 188,576 Net income per Extended Stay America, Inc. common share - basic $ 0.03 $ 0.12 Net income per Extended Stay America, Inc. common share - diluted $ 0.03 $ 0.12 |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
Calculations of Basic and Diluted Net Income per Share, Including a Reconciliation of Numerators and Denominators | The calculations of basic and diluted net income per share, including a reconciliation of the numerators and denominators, are as follows (in thousands, except per share data): Three Months Ended 2020 2019 Numerator: Net income $ 7,918 $ 15,066 Less preferred dividends (4) (4) Net income available to ESH Hospitality, Inc. common shareholders $ 7,914 $ 15,062 Class A: Net income available to ESH Hospitality, Inc. Class A common $ 4,627 $ 8,598 Amounts attributable to ESH Hospitality, Inc. Class B (2) (4) Net income available to ESH Hospitality, Inc. Class A common $ 4,625 $ 8,594 Class B: Net income available to ESH Hospitality, Inc. Class B common $ 3,287 $ 6,464 Amounts attributable to ESH Hospitality, Inc. Class B 2 4 Net income available to ESH Hospitality, Inc. Class B common $ 3,289 $ 6,468 Denominator: Class A: Weighted-average number of ESH Hospitality, Inc. Class A common 250,494 250,494 Class B: Weighted-average number of ESH Hospitality, Inc. Class B common 177,990 188,348 Dilutive securities 181 228 Weighted-average number of ESH Hospitality, Inc. Class B common 178,171 188,576 Net income per ESH Hospitality, Inc. common share - Class A - basic $ 0.02 $ 0.03 Net income per ESH Hospitality, Inc. common share - Class A - diluted $ 0.02 $ 0.03 Net income per ESH Hospitality, Inc. common share - Class B - basic $ 0.02 $ 0.03 Net income per ESH Hospitality, Inc. common share - Class B - diluted $ 0.02 $ 0.03 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Net Investment in Property and Equipment | Net investment in property and equipment as of March 31, 2020 and December 31, 2019, consists of the following (in thousands): March 31, December 31, 2019 Hotel properties: Land and site improvements (1) $ 1,231,474 $ 1,228,231 Building and improvements 2,814,840 2,792,579 Furniture, fixtures and equipment (2) 749,815 745,145 Total hotel properties 4,796,129 4,765,955 Development in process (3) 80,269 70,864 Corporate furniture, fixtures, equipment, software and other 30,894 30,680 Total cost 4,907,292 4,867,499 Less accumulated depreciation: Hotel properties (1,393,347) (1,353,772) Corporate furniture, fixtures, equipment, software and other (21,124) (20,178) Total accumulated depreciation (1,414,471) (1,373,950) Property and equipment — net $ 3,492,821 $ 3,493,549 _________________________________ (1) Includes finance lease asset of $3.2 million as of March 31, 2020 and December 31, 2019. (2) Includes finance lease asset of $0.4 million and $0 as of March 31, 2020 and December 31, 2019, respectively. (3) Includes finance lease asset of $0.8 million as of March 31, 2020 and December 31, 2019. |
Schedule of Real Estate Properties | During the three months ended March 31, 2020, these hotels contributed total room and other hotel revenues, total operating expenses and income before income tax expense as follows (in thousands): Three Months Ended March 31, 2020 Total room and other hotel revenues $ 1,683 Total operating expenses 1,153 Income before income tax expense 530 |
PROPERTY AND EQUIPMENT - REIT (
PROPERTY AND EQUIPMENT - REIT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |
Net Investment in Property and Equipment | Net investment in property and equipment as of March 31, 2020 and December 31, 2019, consists of the following (in thousands): March 31, December 31, 2019 Hotel properties: Land and site improvements (1) $ 1,231,474 $ 1,228,231 Building and improvements 2,814,840 2,792,579 Furniture, fixtures and equipment (2) 749,815 745,145 Total hotel properties 4,796,129 4,765,955 Development in process (3) 80,269 70,864 Corporate furniture, fixtures, equipment, software and other 30,894 30,680 Total cost 4,907,292 4,867,499 Less accumulated depreciation: Hotel properties (1,393,347) (1,353,772) Corporate furniture, fixtures, equipment, software and other (21,124) (20,178) Total accumulated depreciation (1,414,471) (1,373,950) Property and equipment — net $ 3,492,821 $ 3,493,549 _________________________________ (1) Includes finance lease asset of $3.2 million as of March 31, 2020 and December 31, 2019. (2) Includes finance lease asset of $0.4 million and $0 as of March 31, 2020 and December 31, 2019, respectively. (3) Includes finance lease asset of $0.8 million as of March 31, 2020 and December 31, 2019. |
Schedule of Real Estate Properties | During the three months ended March 31, 2020, these hotels contributed total room and other hotel revenues, total operating expenses and income before income tax expense as follows (in thousands): Three Months Ended March 31, 2020 Total room and other hotel revenues $ 1,683 Total operating expenses 1,153 Income before income tax expense 530 |
ESH Hospitality, Inc. | |
Property, Plant and Equipment [Line Items] | |
Net Investment in Property and Equipment | Net investment in property and equipment as of March 31, 2020 and December 31, 2019, consists of the following (in thousands): March 31, December 31, Hotel properties: Land and site improvements (1) $ 1,233,841 $ 1,230,598 Building and improvements 2,846,322 2,824,061 Furniture, fixtures and equipment (2) 756,088 751,417 Total hotel properties 4,836,251 4,806,076 Development in process (3) 80,269 70,864 Other 1,675 1,675 Total cost 4,918,195 4,878,615 Less accumulated depreciation (1,412,562) (1,372,595) Property and equipment — net $ 3,505,633 $ 3,506,020 _________________________________ (1) Includes finance lease asset of $3.2 million as of March 31, 2020 and December 31, 2019. (2) Includes finance lease asset of $0.4 million and $0 as of March 31, 2020 and December 31, 2019, respectively (3) Includes finance lease asset of $0.8 million as of March 31, 2020 and December 31, 2019. |
Schedule of Real Estate Properties | During the three months ended March 31, 2020, these hotels contributed rental revenues, total operating expenses and income before income tax expense as follows (in thousands): Three Months Ended March 31, 2020 Rental revenues $ 702 Total operating expenses 586 Income before income tax expense 115 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The Company’s intangible assets and goodwill as of March 31, 2020 and December 31, 2019, consist of the following (dollars in thousands): March 31, 2020 Gross Accumulated Net Definite-lived intangible assets—customer relationships $ 26,800 $ (12,705) $ 14,095 Definite-lived intangible assets—software licenses 10,362 (1,069) 9,293 Indefinite-lived intangible assets—trademarks 10,163 — 10,163 Total intangible assets 47,325 (13,774) 33,551 Goodwill 45,192 — 45,192 Total intangible assets and goodwill $ 92,517 $ (13,774) $ 78,743 December 31, 2019 Gross Accumulated Net Definite-lived intangible assets—customer relationships $ 26,800 $ (12,370) $ 14,430 Definite-lived intangible assets—software licenses 10,353 (763) 9,590 Indefinite-lived intangible assets—trademarks 10,163 — 10,163 Total intangible assets 47,316 (13,133) 34,183 Goodwill 45,192 — 45,192 Total intangible assets and goodwill $ 92,508 $ (13,133) $ 79,375 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization expense for amortizing intangible assets is as follows (in thousands): Years Ending December 31, Remainder of 2020 $ 1,924 2021 2,565 2022 2,565 2023 2,565 2024 2,565 2025 2,565 Thereafter 8,639 Total $ 23,388 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - REIT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
Schedule of Intangible Assets and Goodwill | The Company’s intangible assets and goodwill as of March 31, 2020 and December 31, 2019, consist of the following (dollars in thousands): March 31, 2020 Gross Accumulated Net Definite-lived intangible assets—customer relationships $ 26,800 $ (12,705) $ 14,095 Definite-lived intangible assets—software licenses 10,362 (1,069) 9,293 Indefinite-lived intangible assets—trademarks 10,163 — 10,163 Total intangible assets 47,325 (13,774) 33,551 Goodwill 45,192 — 45,192 Total intangible assets and goodwill $ 92,517 $ (13,774) $ 78,743 December 31, 2019 Gross Accumulated Net Definite-lived intangible assets—customer relationships $ 26,800 $ (12,370) $ 14,430 Definite-lived intangible assets—software licenses 10,353 (763) 9,590 Indefinite-lived intangible assets—trademarks 10,163 — 10,163 Total intangible assets 47,316 (13,133) 34,183 Goodwill 45,192 — 45,192 Total intangible assets and goodwill $ 92,508 $ (13,133) $ 79,375 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization expense for amortizing intangible assets is as follows (in thousands): Years Ending December 31, Remainder of 2020 $ 1,924 2021 2,565 2022 2,565 2023 2,565 2024 2,565 2025 2,565 Thereafter 8,639 Total $ 23,388 |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
Schedule of Intangible Assets and Goodwill | ESH REIT's intangible assets and goodwill as of March 31, 2020 and December 31, 2019, consist of the following (dollars in thousands): March 31, 2020 Gross Accumulated Net Definite-lived intangible assets—software licenses $ 10,362 $ (1,069) $ 9,293 Goodwill 44,012 — 44,012 Total intangible assets and goodwill $ 54,374 $ (1,069) $ 53,305 December 31, 2019 Gross Accumulated Net Definite-lived intangible assets—software licenses $ 10,353 $ (763) $ 9,590 Goodwill 44,012 — 44,012 Total intangible assets and goodwill $ 54,365 $ (763) $ 53,602 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization expense for amortizing intangible assets is as follows (in thousands): Years Ending December 31, Remainder of 2020 $ 919 2021 1,225 2022 1,225 2023 1,225 2024 1,225 2025 1,225 Thereafter 2,249 Total $ 9,293 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Outstanding Debt | Summary - The Company’s outstanding debt, net of unamortized debt discounts and unamortized deferred financing costs, as of March 31, 2020 and December 31, 2019, consists of the following (dollars in thousands): Stated Carrying Amount Unamortized Deferred Financing Costs Loan March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Stated Interest Rate Maturity Date Term loan facility ESH REIT Term Facility $ 630,909 $ 625,863 (1) $ 627,368 (1) $ 8,693 $ 9,030 LIBOR (2) + 2.00% 9/18/2026 (3) Senior notes 2025 Notes 1,300,000 1,293,315 (4) 1,292,986 (4) 14,349 15,055 5.25% 5/1/2025 2027 Notes 750,000 750,000 750,000 13,199 13,633 4.63% 10/1/2027 Revolving credit facilities ESH REIT Revolving Credit Facility 350,000 350,000 — 2,472 (5) 2,606 (5) LIBOR (2) + 2.00% 9/18/2024 Corporation Revolving Credit Facility 50,000 49,765 — 531 (5) 556 (5) LIBOR (2) + 2.25% 9/18/2024 Unsecured Intercompany Facility Unsecured Intercompany Facility (6) 75,000 — — — — 5.00% 9/18/2026 Total $ 3,068,943 $ 2,670,354 $ 39,244 $ 40,880 _________________________________ (1) The ESH REIT Term Facility (defined below) is presented net of an unamortized debt discount of $1.9 million and $2.0 million as of March 31, 2020 and December 31, 2019, respectively. (2) As of March 31, 2020 and December 31, 2019, one-month LIBOR was 0.99% and 1.76%, respectively. As of March 31, 2020 and December 31, 2019, $150.0 million and $200.0 million, respectively, of the ESH REIT Term Facility was subject to an interest rate swap at a fixed rate of 1.175%. (3) Amortizes in equal quarterly installments of $1.6 million. In addition to scheduled amortization, subject to certain exceptions, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required commencing with the year ending December 31, 2020. Annual mandatory prepayments for a given fiscal year are due during the first quarter of the following fiscal year. (4) The 2025 Notes (defined below) are presented net of an unamortized discount of $6.7 million and $7.0 million as of March 31, 2020 and December 31, 2019, respectively. (5) Unamortized deferred financing costs related to revolving credit facilities are included in other assets in the accompanying consolidated balance sheets. (6) Any outstanding debt balances and interest expense, as applicable, owed from ESH REIT to the Corporation eliminate in consolidation of the Company's condensed consolidated financial statements. |
Summary of Components of Interest Expense | The components of net interest expense during the three months ended March 31, 2020 and 2019, are as follows (in thousands): Three Months Ended March 31, 2020 2019 Contractual interest (1) $ 31,326 $ 28,717 Amortization of deferred financing costs and debt discount 2,052 1,997 Other costs (2) 293 401 Interest Income (986) (1,511) Total $ 32,685 $ 29,604 ______________________ (1) Includes dividends on shares of mandatorily redeemable Corporation preferred stock. Net of capitalized interest of $0.9 million and $0.3 million, respectively. |
DEBT - REIT (Tables)
DEBT - REIT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
Outstanding Debt | Summary - The Company’s outstanding debt, net of unamortized debt discounts and unamortized deferred financing costs, as of March 31, 2020 and December 31, 2019, consists of the following (dollars in thousands): Stated Carrying Amount Unamortized Deferred Financing Costs Loan March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Stated Interest Rate Maturity Date Term loan facility ESH REIT Term Facility $ 630,909 $ 625,863 (1) $ 627,368 (1) $ 8,693 $ 9,030 LIBOR (2) + 2.00% 9/18/2026 (3) Senior notes 2025 Notes 1,300,000 1,293,315 (4) 1,292,986 (4) 14,349 15,055 5.25% 5/1/2025 2027 Notes 750,000 750,000 750,000 13,199 13,633 4.63% 10/1/2027 Revolving credit facilities ESH REIT Revolving Credit Facility 350,000 350,000 — 2,472 (5) 2,606 (5) LIBOR (2) + 2.00% 9/18/2024 Corporation Revolving Credit Facility 50,000 49,765 — 531 (5) 556 (5) LIBOR (2) + 2.25% 9/18/2024 Unsecured Intercompany Facility Unsecured Intercompany Facility (6) 75,000 — — — — 5.00% 9/18/2026 Total $ 3,068,943 $ 2,670,354 $ 39,244 $ 40,880 _________________________________ (1) The ESH REIT Term Facility (defined below) is presented net of an unamortized debt discount of $1.9 million and $2.0 million as of March 31, 2020 and December 31, 2019, respectively. (2) As of March 31, 2020 and December 31, 2019, one-month LIBOR was 0.99% and 1.76%, respectively. As of March 31, 2020 and December 31, 2019, $150.0 million and $200.0 million, respectively, of the ESH REIT Term Facility was subject to an interest rate swap at a fixed rate of 1.175%. (3) Amortizes in equal quarterly installments of $1.6 million. In addition to scheduled amortization, subject to certain exceptions, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required commencing with the year ending December 31, 2020. Annual mandatory prepayments for a given fiscal year are due during the first quarter of the following fiscal year. (4) The 2025 Notes (defined below) are presented net of an unamortized discount of $6.7 million and $7.0 million as of March 31, 2020 and December 31, 2019, respectively. (5) Unamortized deferred financing costs related to revolving credit facilities are included in other assets in the accompanying consolidated balance sheets. (6) Any outstanding debt balances and interest expense, as applicable, owed from ESH REIT to the Corporation eliminate in consolidation of the Company's condensed consolidated financial statements. |
Summary of Components of Interest Expense | The components of net interest expense during the three months ended March 31, 2020 and 2019, are as follows (in thousands): Three Months Ended March 31, 2020 2019 Contractual interest (1) $ 31,326 $ 28,717 Amortization of deferred financing costs and debt discount 2,052 1,997 Other costs (2) 293 401 Interest Income (986) (1,511) Total $ 32,685 $ 29,604 ______________________ (1) Includes dividends on shares of mandatorily redeemable Corporation preferred stock. Net of capitalized interest of $0.9 million and $0.3 million, respectively. |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
Outstanding Debt | ESH REIT’s outstanding debt, net of unamortized debt discount and unamortized deferred financing costs, as of March 31, 2020 and December 31, 2019, consists of the following (dollars in thousands): Stated Carrying Amount Unamortized Deferred Financing Costs Loan March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Stated Interest Rate Maturity Date Term loan facility ESH REIT Term Facility $ 630,909 $ 625,863 (1) $ 627,368 (1) $ 8,693 $ 9,030 LIBOR (2) + 2.00% 9/18/2026 (3) Senior notes 2025 Notes 1,300,000 1,293,315 (4) 1,292,986 (4) 14,349 15,055 5.25% 5/1/2025 2027 Notes 750,000 750,000 750,000 13,199 13,633 4.63% 10/1/2027 Revolving credit facility ESH REIT Revolving Credit Facility 350,000 350,000 — 2,472 (5) 2,606 (5) LIBOR (2) + 2.00% 9/18/2024 Unsecured Intercompany Facility Unsecured Intercompany Facility 75,000 — — — — 5.00% 9/18/2026 Total $ 3,019,178 $ 2,670,354 $ 38,713 $ 40,324 _________________________________ (1) The ESH REIT Term Facility (defined below) is presented net of an unamortized debt discount of $1.9 million and $2.0 million as of March 31, 2020 and December 31, 2019, respectively. (2) As of March 31, 2020 and December 31, 2019, one-month LIBOR was 0.99% and 1.76%, respectively. As of March 31, 2020 and December 31, 2019, $150.0 million and $200.0 million, respectively, of the ESH REIT Term Facility was subject to an interest rate swap at a fixed rate of 1.175%. (3) Amortizes in equal quarterly installments of $1.6 million. In addition to scheduled amortization, subject to certain exceptions, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required commencing with the year ending December 31, 2020. Annual mandatory prepayments for a given fiscal year are due during the first quarter of the following fiscal year. (4) The 2025 Notes (defined below) are presented net of an unamortized discount of $6.7 million and $7.0 million as of March 31, 2020 and December 31, 2019, respectively. (5) Unamortized deferred financing costs related to the revolving credit facility are included in other assets in the accompanying consolidated balance sheets. |
Summary of Components of Interest Expense | The components of net interest expense during the three months ended March 31, 2020 and 2019, are as follows (in thousands): Three Months Ended March 31, 2020 2019 Contractual interest (1) $ 31,090 $ 28,575 Amortization of deferred financing costs and debt discount 2,022 1,969 Other costs (2) 262 356 Interest Income (946) (966) Total $ 32,428 $ 29,934 ______________________ (1) Net of capitalized interest of $0.9 million and $0.3 million, respectively. (2) Includes interest expense on finance leases (see Note 11 ) and unused facility fees. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The table below presents the amounts and classification of the interest rate swap on the Company’s condensed consolidated financial statements (in thousands): (Accrued liabilities) other assets Accumulated other comprehensive (loss) income, net of tax Interest (income) expense, net As of March 31, 2020 $ (1,224) $ (1,042) (1) As of December 31, 2019 $ 831 $ 706 (2) For the three months ended March 31, 2020 $ (257) For the three months ended March 31, 2019 $ (975) _______________________________ (1) Changes during the three months ended March 31, 2020, on a pre-tax basis, consisted of changes in fair value of $(2.1) million. (2) Changes during the year ended December 31, 2019, on a pre-tax basis, consisted of changes in fair value of $(5.0) million. |
DERIVATIVE INSTRUMENTS - REIT (
DERIVATIVE INSTRUMENTS - REIT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
Schedule of Derivative Instruments | The table below presents the amounts and classification of the interest rate swap on the Company’s condensed consolidated financial statements (in thousands): (Accrued liabilities) other assets Accumulated other comprehensive (loss) income, net of tax Interest (income) expense, net As of March 31, 2020 $ (1,224) $ (1,042) (1) As of December 31, 2019 $ 831 $ 706 (2) For the three months ended March 31, 2020 $ (257) For the three months ended March 31, 2019 $ (975) _______________________________ (1) Changes during the three months ended March 31, 2020, on a pre-tax basis, consisted of changes in fair value of $(2.1) million. (2) Changes during the year ended December 31, 2019, on a pre-tax basis, consisted of changes in fair value of $(5.0) million. |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
Schedule of Derivative Instruments | The table below presents the amounts and classification of the interest rate swap on ESH REIT’s condensed consolidated financial statements (in thousands): (Accrued liabilities) other assets Accumulated other comprehensive (loss) income, net of tax Interest (income) expense, net As of March 31, 2020 $ (1,224) $ (1,224) (1) As of December 31, 2019 $ 831 $ 830 (2) For the three months ended March 31, 2020 $ (257) For the three months ended March 31, 2019 $ (975) _______________________________ (1) Changes during the three months ended March 31, 2020, on a pre-tax basis, consisted of changes in fair value of $(2.1) million. (2) Changes during the year ended December 31, 2019, on a pre-tax basis, consisted of changes in fair value of $(5.0) million. |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates room revenues from owned hotels by booking source for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended 2020 2019 Property direct $ 60,024 $ 69,829 (2) Central call center 77,191 68,108 (2) Proprietary website 52,939 50,398 (2) Third-party intermediaries 57,820 69,097 Travel agency global distribution systems 6,490 9,614 Total room revenues from owned hotels (1) $ 254,464 $ 267,046 _________________________________ (1) In addition to room revenues, the Company’s owned hotels earned $6.8 million and $5.3 million of other hotel revenues during the three months ended March 31, 2020 and 2019, respectively. (2) As a result of the correction of a classification error, $3.7 million of room revenues that were previously classified as revenues generated from property direct have been reclassified and reported as $2.6 million of revenues generated from central call center and $1.1 million of revenues generated from proprietary website. The Company concluded that the effect of the error is immaterial to previously issued financial statements but has made the correction for consistent presentation. The following table disaggregates room revenues from owned hotels by length of guest stay for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended 2020 2019 1-6 nights $ 84,594 $ 101,424 7-29 nights 54,831 55,100 30+ nights 115,039 110,522 Total room revenues from owned hotels (1) $ 254,464 $ 267,046 _________________________________ (1) In addition to room revenues, the Company’s owned hotels earned $6.8 million and $5.3 million of other hotel revenues during the three months ended March 31, 2020 and 2019, respectively. The following table disaggregates revenues from franchised and managed hotels for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended 2020 2019 Management fees $ 235 $ 293 Franchise fees 1,044 932 Indirect reimbursements (system service fees) 1,190 1,185 Direct reimbursements 2,600 2,910 Total revenues from franchised and managed hotels $ 5,069 $ 5,320 |
Schedule of Outstanding Customer Contract Liabilities | Outstanding Contract Liabilities Outstanding Contract Liabilities as of January 1, 2020 Recognized as Revenue As of March 31, 2020 $ 16,111 As of January 1, 2020 16,231 For the three months ended March 31, 2020 $ 10,172 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments Evaluated on Income from Operations | The performance of the Company’s operating segments is evaluated primarily on income from operations. Selected financial data is provided below (in thousands): Three Months Ended 2020 2019 Revenues: Owned hotels $ 261,232 $ 272,349 Franchise and management (1) 2,062 2,042 Total segment revenues 263,294 274,391 Corporate and other (2) 19,992 19,514 Other revenues from franchised and managed properties (3) 3,790 4,095 Intersegment eliminations (4) (20,775) (20,331) Total $ 266,301 $ 277,669 Income (loss) from operations: Owned hotels $ 48,551 $ 69,695 Franchise and management (1) 2,062 2,042 Total segment income from operations 50,613 71,737 Corporate and other (2) (7,853) (7,232) Other expenses from franchised and managed properties, net (3) (417) (552) Total $ 42,343 $ 63,953 _________________________________ (1) Includes intellectual property fees charged to the owned hotels segment of $0.8 million for each of the three months ended March 31, 2020 and 2019, that are eliminated in the condensed consolidated statements of operations. (2) Includes revenues generated and operating expenses incurred in connection with the overall support of owned, franchised and managed hotels and related operations. Corporate and other revenues are comprised of management fees earned by and cost reimbursements charged to the owned hotels segment that are eliminated in the condensed consolidated statements of operations. (3) Includes direct reimbursement of specific costs incurred under franchise and management agreements that the Company is reimbursed for on a dollar-for-dollar basis as well as indirect reimbursement of certain costs incurred associated with the Company’s shared platform (i.e., system services, see Note 2). (4) Includes management fees, intellectual property fees and other cost reimbursements charged to the owned hotels segment that are eliminated in the condensed consolidated statements of operations. |
Schedule of Assets and Capital Expenditures of Operating Segments | Total assets for each of the Company’s operating segments are provided below (in thousands): March 31, 2020 December 31, 2019 Assets: Owned hotels $ 3,687,800 $ 3,661,609 Franchise and management 13,332 14,576 Total segment assets 3,701,132 3,676,185 Corporate and other 750,602 397,568 Intersegment eliminations (58,729) (43,157) Total $ 4,393,005 $ 4,030,596 Total capital expenditures for each of the Company's operating segments are provided below (in thousands): Three Months Ended 2020 2019 Capital Expenditures: Owned hotels $ 54,368 $ 54,762 Corporate and other 211 526 Total $ 54,579 $ 55,288 |
RELATED PARTY TRANSACTIONS - _2
RELATED PARTY TRANSACTIONS - REIT (Tables) - ESH Hospitality, Inc. | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
Future minimum rental payments to be received | Future fixed rental payments to be received under current remaining noncancellable lease terms are as follows (in thousands): Years Ending December 31, Remainder of 2020 $ 350,521 2021 479,830 2022 491,866 2023 419,911 Total $ 1,742,128 |
Schedule of Related Party Transaction Balances | ixed and variable rental revenues for the three months ended March 31, 2020 and 2019 are as follows (in thousands): Three Months Ended 2020 2019 Fixed rental revenues $ 119,190 $ 118,005 Variable rental revenues (1) — — _________________________________ (1) Regardless of whether cash rental payments are received, ESH REIT only recognizes revenue when a lessee’s revenue exceeds specific thresholds stated in the lease. Variable rental revenue thresholds were not achieved during the three months ended March 31, 2020 or 2019. Related party transaction balances as of March 31, 2020 and December 31, 2019, include the following (in thousands): March 31, December 31, Leases: Rents receivable (1) $ 666 $ 1,572 Deferred rents receivable (2) $ 31,429 $ 28,917 Unearned rental revenues (1) $ (58,023) $ (38,770) Working capital and other: Ordinary working capital (3) $ (10,598) $ (12,160) Equity awards (payable) receivable (4) (230) 322 Total working capital and other, net (5) $ (10,828) $ (11,838) ______________________ (1) Rents receivable relate to percentage rents. As of March 31, 2020, unearned rental revenues related to April 2020 fixed minimum rent of $38.8 million and percentage rent of $19.2 million. As of December 31, 2019, unearned rental revenues related to January 2020 fixed minimum rent. (2) Revenues recognized in excess of cash rents received. (3) Represents disbursements and/or receipts made by the Corporation or ESH REIT on the other entity’s behalf. Includes overhead costs incurred by the Corporation on ESH REIT’s behalf. (4) Represents amounts related to RSUs not yet settled or issued. (5) Outstanding balances are typically repaid within 30 days. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Components of lease expense | For the three months ended March 31, 2020, the components of the Company’s total lease costs are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease costs $ 769 $ 768 Finance lease costs - interest 61 61 Total lease costs $ 830 $ 829 |
Schedule of right of use assets and lease liabilities | The Company’s right-of-use assets and lease liabilities are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-use assets: Operating (1) $ 4,298 $ 4,863 Finance (2) 4,343 3,979 Lease liabilities: Operating (3) 12,077 12,590 Finance 3,707 3,379 _________________________________ (1) Included in other assets on the accompanying condensed consolidated balance sheets. (2) Included in property and equipment, net on the accompanying condensed consolidated balance sheets. (3) Included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets. |
Maturities of finance lease liabilities | as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 2,182 $ 479 2021 2,220 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 83,857 $ 5,363 Total discounted lease liability $ 12,077 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,780 $ 1,656 Weighted-average remaining lease term 45 years 11 years Weighted-average discount rate 6.4 % 6.8 % |
Maturities of operating lease liabilities | as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 2,182 $ 479 2021 2,220 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 83,857 $ 5,363 Total discounted lease liability $ 12,077 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,780 $ 1,656 Weighted-average remaining lease term 45 years 11 years Weighted-average discount rate 6.4 % 6.8 % |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - REIT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Entity Information [Line Items] | |
Components of lease expense | For the three months ended March 31, 2020, the components of the Company’s total lease costs are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease costs $ 769 $ 768 Finance lease costs - interest 61 61 Total lease costs $ 830 $ 829 |
Schedule of right of use assets and lease liabilities | The Company’s right-of-use assets and lease liabilities are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-use assets: Operating (1) $ 4,298 $ 4,863 Finance (2) 4,343 3,979 Lease liabilities: Operating (3) 12,077 12,590 Finance 3,707 3,379 _________________________________ (1) Included in other assets on the accompanying condensed consolidated balance sheets. (2) Included in property and equipment, net on the accompanying condensed consolidated balance sheets. (3) Included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets. |
Maturities of finance lease liabilities | as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 2,182 $ 479 2021 2,220 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 83,857 $ 5,363 Total discounted lease liability $ 12,077 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,780 $ 1,656 Weighted-average remaining lease term 45 years 11 years Weighted-average discount rate 6.4 % 6.8 % |
Maturities of operating lease liabilities | as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 2,182 $ 479 2021 2,220 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 83,857 $ 5,363 Total discounted lease liability $ 12,077 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,780 $ 1,656 Weighted-average remaining lease term 45 years 11 years Weighted-average discount rate 6.4 % 6.8 % |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
Components of lease expense | For the three months ended March 31, 2020, components of ESH REIT’s total lease costs are as follows (in thousands): Three Months Ended March 31, 2020 2019 Operating lease costs $ 326 $ 325 Finance lease costs - interest 61 61 Total lease costs $ 387 $ 386 |
Schedule of right of use assets and lease liabilities | ESH REIT’s right-of-use assets and lease liabilities are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-use assets: Operating (1) $ 1,916 $ 2,084 Finance (2) 4,343 3,979 Lease liabilities: Operating (3) 9,173 9,207 Finance 3,707 3,379 _________________________________ (1) Included in other assets on the accompanying condensed consolidated balance sheets. (2) Included in property and equipment, net on the accompanying condensed consolidated balance sheets. (3) Included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets. |
Maturities of finance lease liabilities | Maturities of lease liabilities as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 588 $ 479 2021 784 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 80,827 $ 5,363 Total discounted lease liability $ 9,173 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,654 $ 1,656 Weighted-average remaining lease term 58 years 11 years Weighted-average discount rate 6.6 % 6.8 % |
Maturities of operating lease liabilities | Maturities of lease liabilities as of March 31, 2020, are as follows (in thousands): Years Ending December 31, Operating Leases Finance Leases Remainder of 2020 $ 588 $ 479 2021 784 585 2022 806 397 2023 552 400 2024 503 402 2025 503 429 Thereafter 77,091 2,671 Total $ 80,827 $ 5,363 Total discounted lease liability $ 9,173 $ 3,707 Difference between undiscounted cash flows and discounted cash flows $ 71,654 $ 1,656 Weighted-average remaining lease term 58 years 11 years Weighted-average discount rate 6.6 % 6.8 % |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Unrecognized Compensation Cost | Total unrecognized compensation expense will be adjusted for forfeitures and the achievement of certain market-based conditions. Unrecognized Compensation Expense Related to Outstanding Awards (in thousands) Remaining Weighted-Average Amortization Period (in years) RSUs with service vesting conditions $ 8,689 1.9 RSUs with market vesting conditions 3,963 2.4 Total unrecognized compensation expense $ 12,652 |
Summary of Restricted Stock Award and Restricted Stock Unit Activity | RSU activity during the three months ended March 31, 2020, was as follows: Performance-Based Awards - Service-Based Awards Market Vesting Number of Weighted- Number of Weighted- Outstanding at January 1, 2020 928 $ 16.77 255 $ 16.56 Granted 248 $ 13.07 281 $ 11.67 Settled (280) $ 17.73 (46) $ 18.58 Forfeited (182) $ 16.99 (93) $ 15.39 Outstanding at March 31, 2020 714 $ 15.05 397 $ 13.15 Vested at March 31, 2020 28 $ 14.50 — $ — Nonvested at March 31, 2020 686 $ 15.08 397 $ 13.15 |
Summary of Key Assumptions Used for Fair Value Computation | During the three months ended March 31, 2020, the grant-date fair value of awards with market vesting conditions were calculated using a Monte Carlo simulation model with the following key assumptions: Expected holding period 2.92 years Risk–free rate of return 1.43 % Expected dividend yield 7.01 % |
BUSINESS, ORGANIZATION AND BA_3
BUSINESS, ORGANIZATION AND BASIS OF CONSOLIDATION - Additional Information (Detail) | Mar. 31, 2020USD ($)HotelRoomState$ / sharesshares | Mar. 31, 2020USD ($)HotelRoomState$ / sharesshares | Dec. 31, 2019RoomHotel$ / sharesshares |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Common stock, shares issued (shares) | 177,466,325 | 177,466,325 | 179,483,397 |
Common stock, par value (dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Paired shares repurchased and retired, amount | $ | $ 31,093,000 | ||
Common share to paired share ratio | 1 | ||
Paired Share Repurchase Program | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Amount of stock repurchase plan authorized (up to) | $ | $ 550,000,000 | $ 550,000,000 | |
Paired shares repurchased and retired (shares) | 28,600,000 | ||
Remaining available shares for repurchase (in shares) | 101,100,000 | 101,100,000 | |
ESH REIT | Paired Share Repurchase Program | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Paired shares repurchased and retired, amount | $ | $ 166,400,000 | ||
Parent Company | Paired Share Repurchase Program | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Paired shares repurchased and retired, amount | $ | $ 283,000,000 | ||
Class B common stock | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Common stock, shares issued (shares) | 1 | 1 | |
Common stock, par value (dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |
Class B common stock | ESH REIT | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Common stock, shares issued (shares) | 177,500,000 | 177,500,000 | 179,500,000 |
Class A common stock | ESH REIT | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Common stock, shares issued (shares) | 250,500,000 | 250,500,000 | |
Extended Stay America, Inc. | Class B common stock | ESH REIT | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Percentage of common equity (as a percent) | 41.00% | 41.00% | 42.00% |
Extended Stay America, Inc. | Class A common stock | ESH REIT | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Approximate percentage of ownership of common stock (as a percent) | 59.00% | 59.00% | |
Percentage of common equity (as a percent) | 59.00% | 59.00% | 58.00% |
Hotel properties | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Number of hotel properties | Hotel | 632 | 632 | |
Hotel properties | ESH REIT | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Number of hotel properties managed for third parties | Hotel | 25 | 25 | |
U.S. | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Number of states in which the company owns hotels | State | 40 | 40 | |
U.S. | Hotel properties | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Number of hotel properties | Hotel | 558 | 558 | 557 |
Number of rooms | Room | 62,100 | 62,100 | 61,900 |
Number of hotel properties managed for third parties | Hotel | 74 | 74 | 73 |
Number of rooms managed by third parties | Room | 7,600 | 7,600 | 7,500 |
BUSINESS, ORGANIZATION AND BA_4
BUSINESS, ORGANIZATION AND BASIS OF CONSOLIDATION - REIT - Additional Information (Detail) | Mar. 31, 2020USD ($)HotelRoomState$ / sharesshares | Mar. 31, 2020USD ($)HotelRoomState$ / sharesshares | Dec. 31, 2019RoomHotel$ / sharesshares |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Common stock, shares issued (shares) | 177,466,325 | 177,466,325 | 179,483,397 |
Common stock, par value (dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Paired shares repurchased and retired, amount | $ | $ 31,093,000 | ||
Paired Share Repurchase Program | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Amount of stock repurchase plan authorized (up to) | $ | $ 550,000,000 | $ 550,000,000 | |
Paired shares repurchased and retired (shares) | 28,600,000 | ||
Remaining available shares for repurchase (in shares) | 101,100,000 | 101,100,000 | |
U.S. | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Number of states in which the company owns hotels | State | 40 | 40 | |
Hotel properties | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Number of hotel properties | Hotel | 632 | 632 | |
Hotel properties | U.S. | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Number of hotel properties | Hotel | 558 | 558 | 557 |
Number of rooms | Room | 62,100 | 62,100 | 61,900 |
Class B common stock | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Common stock, shares issued (shares) | 1 | 1 | |
Common stock, par value (dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |
ESH Hospitality, Inc. | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Common stock, shares issued (shares) | 1 | 1 | |
Common stock, par value (dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |
ESH Hospitality, Inc. | Paired Share Repurchase Program | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Amount of stock repurchase plan authorized (up to) | $ | $ 550,000,000 | $ 550,000,000 | |
Paired shares repurchased and retired (shares) | 28,600,000 | ||
Paired shares repurchased and retired, amount | $ | $ 166,400,000 | ||
Remaining available shares for repurchase (in shares) | 101,100,000 | 101,100,000 | |
ESH Hospitality, Inc. | Hotel properties | U.S. | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Number of rooms | Room | 62,100 | 62,100 | 61,900 |
ESH Hospitality, Inc. | Class B common stock | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Common stock, par value (dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Paired shares repurchased and retired, amount | $ | $ 11,406,000 | ||
ESH Hospitality, Inc. | ESH Hospitality, Inc. | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Approximate percentage of ownership of common stock (as a percent) | 59.00% | 59.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |
Impairment charges | $ 0 |
Customer Relationships | |
Summary Of Significant Accounting Policies [Line Items] | |
Useful life | 20 years |
Minimum | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimated useful life of asset (years) | 2 years |
Maximum | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimated useful life of asset (years) | 49 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REIT - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |
Impairment charges | $ 0 |
ESH Hospitality, Inc. | |
Summary Of Significant Accounting Policies [Line Items] | |
Impairment charges | $ 0 |
Minimum | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimated useful life of asset (years) | 2 years |
Minimum | ESH Hospitality, Inc. | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimated useful life of asset (years) | 2 years |
Maximum | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimated useful life of asset (years) | 49 years |
Maximum | ESH Hospitality, Inc. | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimated useful life of asset (years) | 49 years |
NET INCOME PER SHARE - Calculat
NET INCOME PER SHARE - Calculations of Basic and Diluted Net Income Per Share, Including a Reconciliation of Numerators and Denominators (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net income available to Extended Stay America, Inc. common shareholders - basic | $ 4,554 | $ 21,934 |
Income attributable to noncontrolling interests assuming conversion | (2) | (4) |
Net income available to common shareholders - diluted | $ 4,552 | $ 21,930 |
Denominator: | ||
Weighted-average number of Extended Stay America, Inc. common shares outstanding - basic (shares) | 177,990 | 188,348 |
Dilutive securities (shares) | 181 | 228 |
Weighted-average number of common shares outstanding - diluted (shares) | 178,171 | 188,576 |
Net income per common share - basic (dollars per share) | $ 0.03 | $ 0.12 |
Net income per common share - diluted (dollars per share) | $ 0.03 | $ 0.12 |
NET INCOME PER SHARE - Calcul_2
NET INCOME PER SHARE - Calculations of Basic and Diluted Net Income Per Share, Including a Reconciliation of Numerators and Denominators - REIT (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net income | $ 7,845 | $ 28,404 |
NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS | 4,554 | 21,934 |
Net income available to ESH Hospitality, Inc. common shareholders | 4,554 | 21,934 |
Income attributable to noncontrolling interests assuming conversion | (2) | (4) |
Net income available to common shareholders - diluted | $ 4,552 | $ 21,930 |
Denominator: | ||
Weighted average number of ESH Hospitality, Inc. Class B common shares outstanding - basic (shares) | 177,990 | 188,348 |
Dilutive securities (shares) | 181 | 228 |
Weighted-average number of common shares outstanding - diluted (shares) | 178,171 | 188,576 |
Net income per common share - basic (dollars per share) | $ 0.03 | $ 0.12 |
Net income per common share - diluted (dollars per share) | $ 0.03 | $ 0.12 |
ESH Hospitality, Inc. | ||
Numerator: | ||
Net income | $ 7,918 | $ 15,066 |
Less preferred dividends | (4) | (4) |
NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS | 7,914 | 15,062 |
Net income available to ESH Hospitality, Inc. common shareholders | 7,914 | 15,062 |
ESH Hospitality, Inc. | Class A common stock | ||
Numerator: | ||
NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS | 4,627 | 8,598 |
Net income available to ESH Hospitality, Inc. common shareholders | 4,627 | 8,598 |
Income attributable to noncontrolling interests assuming conversion | (2) | (4) |
Net income available to common shareholders - diluted | $ 4,625 | $ 8,594 |
Denominator: | ||
Weighted-average number of ESH Hospitality, Inc. shares outstanding, basic and diluted (shares) | 250,494 | 250,494 |
Weighted average number of ESH Hospitality, Inc. Class B common shares outstanding - basic (shares) | 250,494 | 250,494 |
Weighted-average number of common shares outstanding - diluted (shares) | 250,494 | 250,494 |
Net income per common share - basic (dollars per share) | $ 0.02 | $ 0.03 |
Net income per common share - diluted (dollars per share) | $ 0.02 | $ 0.03 |
ESH Hospitality, Inc. | Class B common stock | ||
Numerator: | ||
NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS | $ 3,287 | $ 6,464 |
Net income available to ESH Hospitality, Inc. common shareholders | 3,287 | 6,464 |
Income attributable to noncontrolling interests assuming conversion | 2 | 4 |
Net income available to common shareholders - diluted | $ 3,289 | $ 6,468 |
Denominator: | ||
Weighted average number of ESH Hospitality, Inc. Class B common shares outstanding - basic (shares) | 177,990 | 188,348 |
Dilutive securities (shares) | 181 | 228 |
Weighted-average number of common shares outstanding - diluted (shares) | 178,171 | 188,576 |
Net income per common share - basic (dollars per share) | $ 0.02 | $ 0.03 |
Net income per common share - diluted (dollars per share) | $ 0.02 | $ 0.03 |
HOTEL ACQUISITIONS - Additional
HOTEL ACQUISITIONS - Additional Information (Details) $ in Millions | Nov. 12, 2019USD ($)Room | Mar. 31, 2020Hotel |
Property, Plant and Equipment [Line Items] | ||
Number of hotels acquired | Hotel | 0 | |
ESH REIT | Crestwood Suites Of Lakeland, LLC | ||
Property, Plant and Equipment [Line Items] | ||
Purchase price | $ | $ 10 | |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of asset (years) | 2 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of asset (years) | 49 years | |
Hotel properties | ESH REIT | Crestwood Suites Of Lakeland, LLC | ||
Property, Plant and Equipment [Line Items] | ||
Number of rooms | Room | 121 | |
Hotel properties | Minimum | Building and improvements | ESH REIT | Crestwood Suites Of Lakeland, LLC | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of asset (years) | 5 years | |
Hotel properties | Maximum | Building and improvements | ESH REIT | Crestwood Suites Of Lakeland, LLC | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of asset (years) | 44 years |
HOTEL ACQUISITIONS - Addition_2
HOTEL ACQUISITIONS - Additional Information - REIT (Details) $ in Millions | Nov. 12, 2019USD ($)Room | Mar. 31, 2020Hotel |
Property, Plant and Equipment [Line Items] | ||
Number of hotels acquired | 0 | |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of asset (years) | 2 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of asset (years) | 49 years | |
ESH Hospitality, Inc. | ||
Property, Plant and Equipment [Line Items] | ||
Number of hotels acquired | 0 | |
ESH Hospitality, Inc. | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of asset (years) | 2 years | |
ESH Hospitality, Inc. | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of asset (years) | 49 years | |
ESH Hospitality, Inc. | Crestwood Suites Of Lakeland, LLC | ||
Property, Plant and Equipment [Line Items] | ||
Purchase price | $ | $ 10 | |
Hotel properties | ESH Hospitality, Inc. | Crestwood Suites Of Lakeland, LLC | ||
Property, Plant and Equipment [Line Items] | ||
Number of rooms | Room | 121 | |
Hotel properties | ESH Hospitality, Inc. | Crestwood Suites Of Lakeland, LLC | Building and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of asset (years) | 5 years | |
Hotel properties | ESH Hospitality, Inc. | Crestwood Suites Of Lakeland, LLC | Building and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of asset (years) | 44 years |
PROPERTY AND EQUIPMENT - Net In
PROPERTY AND EQUIPMENT - Net Investment in Property and Equipment (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 4,907,292 | $ 4,867,499 |
Less accumulated depreciation | (1,414,471) | (1,373,950) |
Property and equipment — net | 3,492,821 | 3,493,549 |
Finance lease asset | 4,343 | 3,979 |
Land and site improvement | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 1,231,474 | 1,228,231 |
Finance lease asset | 3,200 | 3,200 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 2,814,840 | 2,792,579 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 749,815 | 745,145 |
Finance lease asset | 400 | 0 |
Hotel properties | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 4,796,129 | 4,765,955 |
Less accumulated depreciation | (1,393,347) | (1,353,772) |
Development in process | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 80,269 | 70,864 |
Finance lease asset | 800 | 800 |
Corporate furniture, fixtures, equipment, software and other | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 30,894 | 30,680 |
Less accumulated depreciation | $ (21,124) | $ (20,178) |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Detail) | Mar. 31, 2020ParcelRoom | Dec. 31, 2019Parcel | Mar. 31, 2019Room |
Hotel properties | FLORIDA | |||
Property, Plant and Equipment [Line Items] | |||
Number of rooms | 120 | 124 | |
Hotel properties | ARIZONA | |||
Property, Plant and Equipment [Line Items] | |||
Number of rooms | 136 | ||
Development in process | |||
Property, Plant and Equipment [Line Items] | |||
Number of land parcels | Parcel | 14 | 15 |
PROPERTY AND EQUIPMENT - New Co
PROPERTY AND EQUIPMENT - New Construction (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | $ 266,301 | $ 277,669 |
Total operating expenses | 223,960 | 213,743 |
Income (loss) from operations: | 42,343 | $ 63,953 |
New Construction | ||
Disaggregation of Revenue [Line Items] | ||
Total operating expenses | 1,153 | |
Income (loss) from operations: | 530 | |
Occupancy Hotel and Other | New Construction | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | $ 1,683 |
PROPERTY AND EQUIPMENT - Net _2
PROPERTY AND EQUIPMENT - Net Investment in Property and Equipment - REIT (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 4,907,292 | $ 4,867,499 |
Less accumulated depreciation | (1,414,471) | (1,373,950) |
Property and equipment — net | 3,492,821 | 3,493,549 |
Finance lease asset | 4,343 | 3,979 |
ESH Hospitality, Inc. | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 4,918,195 | 4,878,615 |
Less accumulated depreciation | (1,412,562) | (1,372,595) |
Property and equipment — net | 3,505,633 | 3,506,020 |
Finance lease asset | 4,343 | 3,979 |
Land and site improvement | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 1,231,474 | 1,228,231 |
Finance lease asset | 3,200 | 3,200 |
Land and site improvement | ESH Hospitality, Inc. | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 1,233,841 | 1,230,598 |
Finance lease asset | 3,200 | 3,200 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 2,814,840 | 2,792,579 |
Building and improvements | ESH Hospitality, Inc. | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 2,846,322 | 2,824,061 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 749,815 | 745,145 |
Finance lease asset | 400 | 0 |
Furniture, fixtures and equipment | ESH Hospitality, Inc. | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 756,088 | 751,417 |
Finance lease asset | 400 | 0 |
Hotel properties | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 4,796,129 | 4,765,955 |
Less accumulated depreciation | (1,393,347) | (1,353,772) |
Hotel properties | ESH Hospitality, Inc. | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 4,836,251 | 4,806,076 |
Development in process | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 80,269 | 70,864 |
Finance lease asset | 800 | 800 |
Development in process | ESH Hospitality, Inc. | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 80,269 | 70,864 |
Finance lease asset | 800 | 800 |
Undeveloped land parcel | ESH Hospitality, Inc. | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 1,675 | $ 1,675 |
PROPERTY AND EQUIPMENT - Addi_2
PROPERTY AND EQUIPMENT - Additional Information - REIT (Details) | Mar. 31, 2020ParcelRoom | Dec. 31, 2019ParcelRoom | Mar. 31, 2019Room |
Hotel properties | FLORIDA | |||
Property, Plant and Equipment [Line Items] | |||
Number of rooms | 120 | 124 | |
Hotel properties | FLORIDA | ESH Hospitality, Inc. | |||
Property, Plant and Equipment [Line Items] | |||
Number of rooms | 120 | 124 | |
Hotel properties | ARIZONA | |||
Property, Plant and Equipment [Line Items] | |||
Number of rooms | 136 | ||
Hotel properties | ARIZONA | ESH Hospitality, Inc. | |||
Property, Plant and Equipment [Line Items] | |||
Number of rooms | 136 | ||
Development in process | |||
Property, Plant and Equipment [Line Items] | |||
Number of land parcels | Parcel | 14 | 15 | |
Development in process | ESH Hospitality, Inc. | |||
Property, Plant and Equipment [Line Items] | |||
Number of land parcels | Parcel | 14 | 15 |
Property and Equipment - REIT -
Property and Equipment - REIT - Schedule of Newly Built Hotels (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Total operating expenses | $ 223,960 | $ 213,743 |
Income (loss) from operations: | 42,343 | 63,953 |
ESH Hospitality, Inc. | ||
Property, Plant and Equipment [Line Items] | ||
Rental revenues | 119,190 | 118,005 |
Total operating expenses | 78,282 | 73,156 |
Income (loss) from operations: | 40,908 | $ 44,864 |
New Construction | ||
Property, Plant and Equipment [Line Items] | ||
Total operating expenses | 1,153 | |
Income (loss) from operations: | 530 | |
New Construction | ESH Hospitality, Inc. | ||
Property, Plant and Equipment [Line Items] | ||
Rental revenues | 702 | |
Total operating expenses | 586 | |
Income (loss) from operations: | $ 115 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Company's Intangible Assets and Goodwill (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 10,163 | |
Total intangible assets, gross | $ 47,325 | 47,316 |
Accumulated Amortization | (13,774) | (13,133) |
Definite-lived intangible assets, total net book value | 23,388 | |
Total intangible assets, net book value | 33,551 | 34,183 |
Goodwill, gross | 45,192 | 45,192 |
Goodwill net book value | 45,192 | 45,192 |
Total intangible assets and goodwill, gross | 92,517 | 92,508 |
Total intangible assets and goodwill, net book value | 78,743 | 79,375 |
Customer Relationships | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross | 26,800 | 26,800 |
Accumulated Amortization | (12,705) | (12,370) |
Definite-lived intangible assets, total net book value | 14,095 | 14,430 |
Computer Software, Intangible Asset | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross | 10,362 | 10,353 |
Accumulated Amortization | (1,069) | (763) |
Definite-lived intangible assets, total net book value | 9,293 | 9,590 |
Trademarks | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 10,163 | 10,163 |
Total intangible assets, net book value | $ 34,183 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Weighted Average Amortization Period For Intangible Assets | 9 years |
Intangible Assets and Goodwil_6
Intangible Assets and Goodwill - Estimated Future Amortization Expense for Definite-lived Intangible Assets (Detail) $ in Thousands | Mar. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2020 | $ 1,924 |
2021 | 2,565 |
2022 | 2,565 |
2023 | 2,565 |
2024 | 2,565 |
2025 | 2,565 |
Thereafter | 8,639 |
Definite-lived intangible assets, total net book value | $ 23,388 |
INTANGIBLE ASSETS AND GOODWIL_7
INTANGIBLE ASSETS AND GOODWILL - REIT - Company's Intangible Assets and Goodwill (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Accumulated amortization of intangible assets | $ 13,774 | $ 13,133 |
Definite-lived intangible assets, total net book value | 23,388 | |
Goodwill, gross | 45,192 | 45,192 |
GOODWILL | 45,192 | 45,192 |
Intangible Assets, Net (Including Goodwill) | 92,517 | 92,508 |
Total intangible assets and goodwill, net book value | 78,743 | 79,375 |
Computer Software, Intangible Asset | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross | 10,362 | 10,353 |
Accumulated amortization of intangible assets | 1,069 | 763 |
Definite-lived intangible assets, total net book value | 9,293 | 9,590 |
ESH Hospitality, Inc. | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Accumulated amortization of intangible assets | 1,069 | 763 |
Definite-lived intangible assets, total net book value | 9,293 | |
Goodwill, gross | 44,012 | 44,012 |
GOODWILL | 44,012 | 44,012 |
Intangible Assets, Net (Including Goodwill) | 54,374 | 54,365 |
Total intangible assets and goodwill, net book value | $ 53,305 | 53,602 |
Useful life | 8 years | |
ESH Hospitality, Inc. | Computer Software, Intangible Asset | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross | $ 10,362 | 10,353 |
Accumulated amortization of intangible assets | 1,069 | 763 |
Definite-lived intangible assets, total net book value | $ 9,293 | $ 9,590 |
INTANGIBLE ASSETS AND GOODWILL-
INTANGIBLE ASSETS AND GOODWILL- REIT - Estimated Future Amortization Expense for Definite-lived Intangible Assets (Detail) $ in Thousands | Mar. 31, 2020USD ($) |
Entity Information [Line Items] | |
Remainder of 2020 | $ 1,924 |
2021 | 2,565 |
2022 | 2,565 |
2023 | 2,565 |
2024 | 2,565 |
2025 | 2,565 |
Thereafter | 8,639 |
Definite-lived intangible assets, total net book value | 23,388 |
ESH Hospitality, Inc. | |
Entity Information [Line Items] | |
Remainder of 2020 | 919 |
2021 | 1,225 |
2022 | 1,225 |
2023 | 1,225 |
2024 | 1,225 |
2025 | 1,225 |
Thereafter | 2,249 |
Definite-lived intangible assets, total net book value | $ 9,293 |
DEBT - Company's Outstanding De
DEBT - Company's Outstanding Debt (Detail) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2016 | May 31, 2015 |
Debt Instrument [Line Items] | |||||||
Carrying Amount, Term loan facility | $ 617,170,000 | $ 618,338,000 | $ 617,170,000 | ||||
Carrying Amount, Revolving credit facilities | 399,765,000 | 0 | 399,765,000 | ||||
Carrying Amount, Total | 3,068,943,000 | 2,670,354,000 | 3,068,943,000 | ||||
Unamortized Deferred Financing Costs | 39,244,000 | 40,880,000 | 39,244,000 | ||||
ESH Hospitality, Inc. | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Amount, Term loan facility | 617,170,000 | 618,338,000 | 617,170,000 | ||||
Carrying Amount, Revolving credit facilities | 350,000,000 | 0 | 350,000,000 | ||||
Carrying Amount, Total | 3,019,178,000 | 2,670,354,000 | 3,019,178,000 | ||||
Unamortized Deferred Financing Costs | 38,713,000 | 40,324,000 | $ 38,713,000 | ||||
Mandatory prepayments are required up to a certain amount of excess cash flow | 50.00% | ||||||
ESH REIT Term Facility | Medium-term Notes | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | 630,900,000 | $ 630,900,000 | |||||
Carrying Amount, Term loan facility | 625,863,000 | 625,863,000 | |||||
Unamortized Deferred Financing Costs | 8,693,000 | 8,693,000 | |||||
ESH REIT Term Facility | Term Loan Facility | Medium-term Notes | ESH Hospitality, Inc. | |||||||
Debt Instrument [Line Items] | |||||||
Unamortized discount on debt | 1,900,000 | 2,000,000 | 1,900,000 | ||||
Quarterly installment | 1,600,000 | ||||||
ESH REIT Term Facility | ESH REIT | Medium-term Notes | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | $ 630,909,000 | $ 630,909,000 | |||||
Carrying Amount, Term loan facility | 627,368,000 | ||||||
Unamortized Deferred Financing Costs | 9,030,000 | ||||||
ESH REIT Term Facility | ESH REIT | Term Loan Facility | Medium-term Notes | |||||||
Debt Instrument [Line Items] | |||||||
Derivative rate (as a percent) | 1.175% | 1.175% | |||||
2025 Notes | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Amount, Senior notes | $ 1,293,315,000 | $ 1,293,315,000 | |||||
Unamortized Deferred Financing Costs | 14,349,000 | 14,349,000 | |||||
2025 Notes | Senior Notes | ESH Hospitality, Inc. | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | 1,300,000,000 | 1,300,000,000 | $ 800,000,000 | $ 500,000,000 | |||
Carrying Amount, Senior notes | 1,293,315,000 | 1,292,986,000 | 1,293,315,000 | ||||
Unamortized Deferred Financing Costs | $ 14,349,000 | 15,055,000 | $ 14,349,000 | ||||
Stated Interest Rate | 5.25% | 5.25% | 5.25% | ||||
Unamortized discount on debt | $ 6,700,000 | 7,000,000 | $ 6,700,000 | ||||
2025 Notes | ESH REIT | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | $ 1,300,000,000 | $ 1,300,000,000 | $ 800,000,000 | $ 500,000,000 | |||
Carrying Amount, Senior notes | 1,292,986,000 | ||||||
Unamortized Deferred Financing Costs | 15,055,000 | ||||||
Stated Interest Rate | 5.25% | 5.25% | 5.25% | ||||
Unamortized discount on debt | $ 6,700,000 | 7,000,000 | $ 6,700,000 | ||||
2027 Notes | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Amount, Senior notes | $ 750,000,000 | 750,000,000 | $ 750,000,000 | ||||
Unamortized Deferred Financing Costs | 13,633,000 | $ 13,199,000 | |||||
Stated Interest Rate | 4.63% | 4.63% | |||||
2027 Notes | Senior Notes | ESH Hospitality, Inc. | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | $ 750,000,000 | $ 750,000,000 | $ 750,000,000 | ||||
Carrying Amount, Senior notes | 750,000,000 | 750,000,000 | 750,000,000 | ||||
Unamortized Deferred Financing Costs | $ 13,199,000 | 13,633,000 | $ 13,199,000 | ||||
Stated Interest Rate | 4.63% | 4.63% | 4.625% | ||||
ESH REIT Revolving Credit Facility | ESH REIT | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | $ 350,000,000 | $ 350,000,000 | |||||
Carrying Amount, Revolving credit facilities | 350,000,000 | 0 | 350,000,000 | ||||
Unamortized Deferred Financing Costs | 2,472,000 | 2,606,000 | 2,472,000 | ||||
Corporation Revolving Credit Facility | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | 50,000,000 | 50,000,000 | |||||
Carrying Amount, Revolving credit facilities | 49,765,000 | 0 | 49,765,000 | ||||
Unamortized Deferred Financing Costs | $ 531,000 | 556,000 | $ 531,000 | ||||
Unsecured Intercompany Facility | Line of Credit | Unsecured Debt | ESH Hospitality, Inc. | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 5.00% | 5.00% | |||||
Unsecured Intercompany Facility | ESH REIT | Line of Credit | Unsecured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | $ 75,000,000 | $ 75,000,000 | |||||
Carrying Amount, Revolving credit facilities | 0 | 0 | 0 | ||||
Unamortized Deferred Financing Costs | $ 0 | $ 0 | $ 0 | ||||
Stated Interest Rate | 5.00% | 5.00% | |||||
LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 0.99% | 1.76% | 0.99% | 1.76% | |||
LIBOR | ESH REIT Term Facility | Medium-term Notes | ESH Hospitality, Inc. | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 2.00% | ||||||
LIBOR | ESH REIT Term Facility | ESH REIT | Medium-term Notes | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 2.00% | ||||||
LIBOR | ESH REIT Revolving Credit Facility | ESH REIT | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 2.00% | ||||||
LIBOR | Corporation Revolving Credit Facility | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 2.25% | ||||||
Designated as Hedging Instrument | Interest Rate Swap | |||||||
Debt Instrument [Line Items] | |||||||
Derivative notional amount | $ 150,000,000 | $ 150,000,000 | |||||
Designated as Hedging Instrument | Interest Rate Swap | ESH Hospitality, Inc. | |||||||
Debt Instrument [Line Items] | |||||||
Derivative notional amount | 150,000,000 | $ 200,000,000 | 150,000,000 | ||||
Designated as Hedging Instrument | Interest Rate Swap | ESH REIT | |||||||
Debt Instrument [Line Items] | |||||||
Derivative notional amount | $ 150,000,000 | $ 200,000,000 | $ 150,000,000 |
Debt - Additional Information (
Debt - Additional Information (Details) | Mar. 31, 2020USD ($)LetterOfCredit$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($) | Mar. 31, 2020USD ($)letter_of_credit$ / sharesshares | Mar. 31, 2019 | Dec. 31, 2019USD ($)$ / sharesshares | Mar. 12, 2020USD ($) | Aug. 31, 2016USD ($) | Jun. 30, 2016USD ($) | May 31, 2015USD ($) |
Debt Instrument [Line Items] | ||||||||||
Estimated fair value | $ 2,700,000,000 | $ 2,700,000,000 | ||||||||
ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Mandatory prepayments are required up to a certain amount of excess cash flow | 50.00% | |||||||||
Preferred stock, authorized (shares) | shares | 125 | 125 | 125 | 125 | ||||||
Preferred stock, issued (shares) | shares | 125 | 125 | 125 | 125 | ||||||
Preferred stock, outstanding (shares) | shares | 125 | 125 | 125 | 125 | ||||||
Preferred stock, redemption value (dollars per share) | $ / shares | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | ||||||
Estimated fair value | $ 2,600,000,000 | $ 2,700,000,000 | $ 2,600,000,000 | $ 2,700,000,000 | ||||||
Mandatorily Redeemable Preferred Stock | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Preferred stock, authorized (shares) | shares | 350,000,000 | 350,000,000 | 350,000,000 | 350,000,000 | ||||||
Preferred stock, par value (dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Preferred stock, issued (shares) | shares | 7,130,000 | 7,130,000 | 7,130,000 | 7,130,000 | ||||||
Preferred stock, outstanding (shares) | shares | 7,130,000 | 7,130,000 | 7,130,000 | 7,130,000 | ||||||
Preferred stock, redemption rate (percent) | 8.00% | 8.00% | ||||||||
Preferred stock, redemption value (dollars per share) | $ / shares | $ 1,000 | $ 1,000 | ||||||||
Estimated fair value | $ 7,200,000 | $ 7,100,000 | $ 7,200,000 | $ 7,100,000 | ||||||
LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 0.99% | 1.76% | 0.99% | 1.76% | ||||||
Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolving credit facility, capacity | $ 600,000,000 | |||||||||
Fair value of amount outstanding | $ 400,000,000 | $ 400,000,000 | ||||||||
ESH REIT Term Facility | Revolving Credit Facility | Federal Funds Rate | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 0.50% | |||||||||
ESH REIT Term Facility | Revolving Credit Facility | One-Month London Interbank Offered Rate | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 1.00% | |||||||||
ESH REIT Term Facility | Revolving Credit Facility | ESH REIT | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolving credit facility, capacity | $ 350,000,000 | |||||||||
ESH REIT Term Facility | Revolving Credit Facility | ESH REIT | Libor Plus Rate Other than Level 1 Period | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 1.00% | |||||||||
ESH REIT Term Facility | Revolving Credit Facility | ESH REIT | Libor Plus Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 0.75% | |||||||||
ESH REIT Term Facility | Medium-term Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated amount | 630,900,000 | $ 630,900,000 | ||||||||
ESH REIT Term Facility | Medium-term Notes | LIBOR | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 2.00% | |||||||||
ESH REIT Term Facility | Medium-term Notes | ESH REIT | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated amount | 630,909,000 | $ 630,909,000 | ||||||||
ESH REIT Term Facility | Medium-term Notes | ESH REIT | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 2.00% | |||||||||
ESH REIT Term Facility | Medium-term Notes | Term Loan Facility | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Quarterly installment | $ 1,600,000 | |||||||||
2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolving credit facility, capacity | $ 350,000,000 | $ 350,000,000 | ||||||||
Loan to value ratio maximum | 45.00% | 45.00% | ||||||||
Stated Interest Rate | 1.00% | |||||||||
Fair value of amount outstanding | $ 350,000,000 | $ 350,000,000 | ||||||||
2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | Maximum | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fee on unutilized revolving credit facility | 0.30% | |||||||||
2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | Minimum | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fee on unutilized revolving credit facility | 0.175% | |||||||||
2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | LIBOR | Maximum | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 2.00% | |||||||||
2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | LIBOR | Minimum | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 1.50% | |||||||||
2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | Base Rate | Maximum | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 1.00% | |||||||||
2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | Base Rate | Minimum | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 0.50% | |||||||||
2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | Federal Funds Rate | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 0.50% | |||||||||
2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | ESH REIT | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of letters of credit | letter_of_credit | 0 | |||||||||
Fair value of amount outstanding | $ 350,000,000 | $ 350,000,000 | ||||||||
2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | ESH REIT | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loan to value ratio maximum | 45.00% | 45.00% | ||||||||
2016 ESH REIT Revolving Credit Facility | Letter of Credit | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolving credit facility, capacity | $ 50,000,000 | $ 50,000,000 | ||||||||
Number of letters of credit | LetterOfCredit | 0 | |||||||||
2016 ESH REIT Revolving Credit Facility | Line of Credit | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated amount | $ 350,000,000 | $ 350,000,000 | ||||||||
2016 ESH REIT Revolving Credit Facility | Line of Credit | Revolving Credit Facility | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Minimum principal coverage | 35.00% | |||||||||
2016 ESH REIT Revolving Credit Facility | Line of Credit | Revolving Credit Facility | ESH REIT | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Minimum principal coverage | 35.00% | |||||||||
2016 ESH REIT Revolving Credit Facility | Line of Credit | Letter of Credit | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolving credit facility, capacity | 30,000,000 | $ 30,000,000 | ||||||||
2016 ESH REIT Revolving Credit Facility | Line of Credit | Letter of Credit | ESH REIT | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolving credit facility, capacity | $ 30,000,000 | $ 30,000,000 | ||||||||
2016 Corporation Revolving Credit Facility | Revolving Credit Facility | Maximum | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fee on unutilized revolving credit facility | 0.30% | |||||||||
2016 Corporation Revolving Credit Facility | Revolving Credit Facility | Minimum | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fee on unutilized revolving credit facility | 0.175% | |||||||||
2016 Corporation Revolving Credit Facility | Revolving Credit Facility | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 2.25% | |||||||||
2016 Corporation Revolving Credit Facility | Revolving Credit Facility | LIBOR | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 1.25% | |||||||||
2016 Corporation Revolving Credit Facility | Revolving Credit Facility | Federal Funds Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 0.50% | |||||||||
2016 Corporation Revolving Credit Facility | Revolving Credit Facility | One-Month London Interbank Offered Rate | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 1.00% | |||||||||
2016 Corporation Revolving Credit Facility | Revolving Credit Facility | ESH REIT | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loan to value ratio maximum | 45.00% | 45.00% | ||||||||
2016 Corporation Revolving Credit Facility | Letter of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of letters of credit | letter_of_credit | 1 | |||||||||
Fair value of amount outstanding | $ 200,000 | $ 200,000 | $ 49,800,000 | |||||||
Consolidated leverage ratio maximum | 8.75 | |||||||||
2016 Corporation Revolving Credit Facility | Letter of Credit | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolving credit facility, capacity | 50,000,000 | $ 50,000,000 | ||||||||
2016 Corporation Revolving Credit Facility | Swingline Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolving credit facility, capacity | 20,000,000 | $ 20,000,000 | ||||||||
2016 Corporation Revolving Credit Facility | Line of Credit | Revolving Credit Facility | ESH REIT | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Minimum principal coverage | 25.00% | |||||||||
2016 Corporation Revolving Credit Facility | Line of Credit | Letter of Credit | ESH REIT | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolving credit facility, capacity | 30,000,000 | $ 30,000,000 | ||||||||
2025 Notes | Senior Notes | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated amount | $ 1,300,000,000 | $ 1,300,000,000 | $ 800,000,000 | $ 500,000,000 | ||||||
Stated Interest Rate | 5.25% | 5.25% | 5.25% | |||||||
2025 Notes | Senior Notes | Change of Control | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price as a percentage of principal repayment | 101.00% | |||||||||
2025 Notes | Senior Notes | Maximum | Redemption period three | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price as a percentage of principal repayment | 102.625% | |||||||||
2025 Notes | Senior Notes | Minimum | Redemption period three | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price as a percentage of principal repayment | 100.00% | |||||||||
2025 Notes | Senior Notes | ESH REIT | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated amount | $ 1,300,000,000 | $ 1,300,000,000 | $ 800,000,000 | $ 500,000,000 | ||||||
Stated Interest Rate | 5.25% | 5.25% | 5.25% | |||||||
2025 Notes | Senior Notes | ESH REIT | Change of Control | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price as a percentage of principal repayment | 101.00% | |||||||||
2025 Notes | Senior Notes | ESH REIT | Maximum | Redemption period three | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price as a percentage of principal repayment | 102.625% | |||||||||
2025 Notes | Senior Notes | ESH REIT | Minimum | Redemption period three | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price as a percentage of principal repayment | 100.00% | |||||||||
2027 Notes | Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 4.63% | 4.63% | ||||||||
2027 Notes | Senior Notes | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated amount | $ 750,000,000 | $ 750,000,000 | $ 750,000,000 | |||||||
Stated Interest Rate | 4.63% | 4.625% | 4.63% | |||||||
Percent of debt issued in private placement | 100.00% | |||||||||
2027 Notes | Senior Notes | Redemption period one | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price as a percentage of principal repayment | 102.313% | |||||||||
2027 Notes | Senior Notes | Redemption period two | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price as a percentage of principal repayment | 100.00% | |||||||||
2027 Notes | Senior Notes | Redemption period three | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price as a percentage of principal repayment | 100.00% | |||||||||
Redemption price percentage of principal amount redeemed | 35.00% | |||||||||
Percentage of principal amount outstanding | 65.00% | |||||||||
2027 Notes | Senior Notes | Redemption period four | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price as a percentage of principal repayment | 101.00% | |||||||||
Unsecured Intercompany Facility | ESH REIT | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Carrying amount, unsecured intercompany facility | $ 0 | $ 0 | ||||||||
Unsecured Intercompany Facility | Unsecured Debt | Line of Credit | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 5.00% | 5.00% | ||||||||
Maximum unsecured intercompany credit facility amount | $ 300,000,000 | $ 300,000,000 | ||||||||
Unsecured Intercompany Facility | Unsecured Debt | Line of Credit | ESH REIT | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated amount | $ 75,000,000 | $ 75,000,000 | ||||||||
Stated Interest Rate | 5.00% | 5.00% | ||||||||
Maximum unsecured intercompany credit facility amount | $ 300,000,000 | $ 300,000,000 | ||||||||
Unsecured Intercompany Facility | Line of Credit | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated amount | $ 75,000,000 | $ 75,000,000 | ||||||||
Stated Interest Rate | 5.00% | 5.00% | ||||||||
Carrying amount, unsecured intercompany facility | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Public Corporate Family Rating Better Than Or Equal To BB- | ESH REIT Term Facility | Medium-term Notes | LIBOR | ESH Hospitality, Inc. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated Interest Rate | 1.75% |
DEBT - Summary of Components of
DEBT - Summary of Components of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Contractual interest | $ 31,326 | $ 28,717 |
Amortization of deferred financing costs and debt discount | 2,052 | 1,997 |
Other costs | 293 | 401 |
Interest Income | (986) | (1,511) |
Total | 32,685 | 29,604 |
Interest costs capitalized | $ 859 | $ 313 |
DEBT - Company's Outstanding _2
DEBT - Company's Outstanding Debt - REIT (Detail) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2016 | May 31, 2015 |
Debt Instrument [Line Items] | |||||||
Carrying Amount, Term loan facility | $ 617,170,000 | $ 618,338,000 | $ 617,170,000 | ||||
Carrying Amount, Revolving credit facilities | 399,765,000 | 0 | 399,765,000 | ||||
Carrying Amount, Total | 3,068,943,000 | 2,670,354,000 | 3,068,943,000 | ||||
Unamortized Deferred Financing Costs | 39,244,000 | 40,880,000 | 39,244,000 | ||||
2025 Notes | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Amount, Senior notes | 1,293,315,000 | 1,293,315,000 | |||||
Unamortized Deferred Financing Costs | 14,349,000 | 14,349,000 | |||||
2027 Notes | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Amount, Senior notes | $ 750,000,000 | 750,000,000 | $ 750,000,000 | ||||
Unamortized Deferred Financing Costs | $ 13,633,000 | $ 13,199,000 | |||||
Stated Interest Rate | 4.63% | 4.63% | |||||
LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 0.99% | 1.76% | 0.99% | 1.76% | |||
Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Derivative notional amount | $ 150,000,000 | $ 150,000,000 | |||||
ESH Hospitality, Inc. | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Amount, Term loan facility | 617,170,000 | $ 618,338,000 | 617,170,000 | ||||
Carrying Amount, Revolving credit facilities | 350,000,000 | 0 | 350,000,000 | ||||
Carrying Amount, Total | 3,019,178,000 | 2,670,354,000 | 3,019,178,000 | ||||
Unamortized Deferred Financing Costs | 38,713,000 | 40,324,000 | $ 38,713,000 | ||||
Mandatory prepayments are required up to a certain amount of excess cash flow | 50.00% | ||||||
ESH Hospitality, Inc. | ESH REIT 2016 Term Facility | Medium-term Notes | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | 630,909,000 | $ 630,909,000 | |||||
Carrying Amount, Term loan facility | 625,863,000 | 627,368,000 | 625,863,000 | ||||
Unamortized Deferred Financing Costs | 8,693,000 | 9,030,000 | 8,693,000 | ||||
ESH Hospitality, Inc. | ESH REIT 2016 Term Facility | Term Loan Facility | Medium-term Notes | |||||||
Debt Instrument [Line Items] | |||||||
Unamortized discount on debt | $ 1,900,000 | 2,000,000 | $ 1,900,000 | ||||
Derivative rate (as a percent) | 1.175% | 1.175% | |||||
Quarterly installment | $ 1,600,000 | ||||||
Mandatory prepayments are required up to a certain amount of excess cash flow | 50.00% | ||||||
ESH Hospitality, Inc. | 2025 Notes | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | $ 1,300,000,000 | $ 1,300,000,000 | $ 800,000,000 | $ 500,000,000 | |||
Carrying Amount, Senior notes | 1,293,315,000 | 1,292,986,000 | 1,293,315,000 | ||||
Unamortized Deferred Financing Costs | $ 14,349,000 | 15,055,000 | $ 14,349,000 | ||||
Stated Interest Rate | 5.25% | 5.25% | 5.25% | ||||
Unamortized discount on debt | $ 6,700,000 | 7,000,000 | $ 6,700,000 | ||||
ESH Hospitality, Inc. | 2027 Notes | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | 750,000,000 | 750,000,000 | $ 750,000,000 | ||||
Carrying Amount, Senior notes | 750,000,000 | 750,000,000 | 750,000,000 | ||||
Unamortized Deferred Financing Costs | $ 13,199,000 | 13,633,000 | $ 13,199,000 | ||||
Stated Interest Rate | 4.63% | 4.63% | 4.625% | ||||
ESH Hospitality, Inc. | 2016 ESH REIT Revolving Credit Facility | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | $ 350,000,000 | $ 350,000,000 | |||||
Carrying Amount, Revolving credit facilities | 350,000,000 | 0 | 350,000,000 | ||||
Unamortized Deferred Financing Costs | 2,472,000 | 2,606,000 | $ 2,472,000 | ||||
ESH Hospitality, Inc. | 2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 1.00% | ||||||
ESH Hospitality, Inc. | Unsecured Intercompany Facility | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Stated Amount | 75,000,000 | $ 75,000,000 | |||||
Carrying amount, unsecured intercompany facility | 0 | 0 | 0 | ||||
Unamortized Deferred Financing Costs | $ 0 | 0 | $ 0 | ||||
Stated Interest Rate | 5.00% | 5.00% | |||||
ESH Hospitality, Inc. | Unsecured Intercompany Facility | Line of Credit | Unsecured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 5.00% | 5.00% | |||||
ESH Hospitality, Inc. | LIBOR | ESH REIT 2016 Term Facility | Medium-term Notes | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 2.00% | ||||||
ESH Hospitality, Inc. | LIBOR | 2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 1.50% | ||||||
ESH Hospitality, Inc. | LIBOR | 2016 ESH REIT Revolving Credit Facility | Revolving Credit Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Stated Interest Rate | 2.00% | ||||||
ESH Hospitality, Inc. | Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Derivative notional amount | $ 150,000,000 | $ 200,000,000 | $ 150,000,000 |
DEBT - Additional Information -
DEBT - Additional Information - REIT (Details) | Mar. 31, 2020USD ($)LetterOfCredit | Dec. 31, 2019USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019 | Sep. 30, 2019USD ($) | Aug. 31, 2016USD ($) | Jun. 30, 2016USD ($) | May 31, 2015USD ($) |
Debt Instrument [Line Items] | ||||||||
Estimated fair value | $ 2,700,000,000 | $ 2,700,000,000 | ||||||
2027 Notes | Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate (as a percent) | 4.63% | 4.63% | ||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility, capacity | $ 600,000,000 | |||||||
Amount of borrowing capacity drawn | $ 400,000,000 | $ 400,000,000 | ||||||
LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 0.99% | 1.76% | 0.99% | 1.76% | ||||
ESH Hospitality, Inc. | ||||||||
Debt Instrument [Line Items] | ||||||||
Mandatory prepayments are required up to a certain amount of excess cash flow | 50.00% | |||||||
Estimated fair value | $ 2,600,000,000 | $ 2,700,000,000 | $ 2,600,000,000 | |||||
ESH Hospitality, Inc. | 2016 ESH REIT Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated amount | 350,000,000 | 350,000,000 | ||||||
ESH Hospitality, Inc. | ESH REIT 2016 Term Facility | Medium-term Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated amount | 630,909,000 | 630,909,000 | ||||||
ESH Hospitality, Inc. | 2025 Notes | Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated amount | $ 1,300,000,000 | $ 1,300,000,000 | $ 800,000,000 | $ 500,000,000 | ||||
Stated interest rate (as a percent) | 5.25% | 5.25% | 5.25% | |||||
ESH Hospitality, Inc. | 2025 Notes | Senior Notes | Change of Control | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price as a percentage of principal repayment | 101.00% | |||||||
ESH Hospitality, Inc. | 2027 Notes | Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated amount | $ 750,000,000 | $ 750,000,000 | $ 750,000,000 | |||||
Stated interest rate (as a percent) | 4.63% | 4.63% | 4.625% | |||||
ESH Hospitality, Inc. | 2027 Notes | Senior Notes | Redemption period one | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price as a percentage of principal repayment | 102.313% | |||||||
ESH Hospitality, Inc. | 2027 Notes | Senior Notes | Redemption period two | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price as a percentage of principal repayment | 100.00% | |||||||
ESH Hospitality, Inc. | 2027 Notes | Senior Notes | Redemption period three | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price as a percentage of principal repayment | 100.00% | |||||||
Redemption price percentage of principal amount redeemed | 35.00% | |||||||
Percentage of principal amount outstanding | 65.00% | |||||||
ESH Hospitality, Inc. | 2027 Notes | Senior Notes | Redemption period four | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price as a percentage of principal repayment | 101.00% | |||||||
ESH Hospitality, Inc. | Unsecured Intercompany Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated amount | $ 75,000,000 | $ 75,000,000 | ||||||
Stated interest rate (as a percent) | 5.00% | 5.00% | ||||||
Carrying amount, unsecured intercompany facility | $ 0 | $ 0 | $ 0 | |||||
ESH Hospitality, Inc. | Revolving Credit Facility | 2016 ESH REIT Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility, capacity | 350,000,000 | 350,000,000 | ||||||
Accordion feature increase limit | $ 600,000,000 | $ 600,000,000 | ||||||
Loan to value ratio maximum | 45.00% | 45.00% | ||||||
Spread on base rate (as a percent) | 1.00% | |||||||
Amount of borrowing capacity drawn | $ 350,000,000 | $ 350,000,000 | ||||||
ESH Hospitality, Inc. | Term Loan Facility | ESH REIT 2016 Term Facility | Medium-term Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Quarterly installment | $ 1,600,000 | |||||||
Mandatory prepayments are required up to a certain amount of excess cash flow | 50.00% | |||||||
ESH Hospitality, Inc. | Letter of Credit | 2016 ESH REIT Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility, capacity | $ 50,000,000 | $ 50,000,000 | ||||||
Number of letters of credit | LetterOfCredit | 0 | |||||||
ESH Hospitality, Inc. | Letter of Credit | 2016 ESH REIT Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility, capacity | $ 30,000,000 | $ 30,000,000 | ||||||
ESH Hospitality, Inc. | Line of Credit | Unsecured Intercompany Facility | Unsecured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate (as a percent) | 5.00% | 5.00% | ||||||
Maximum unsecured intercompany credit facility amount | $ 300,000,000 | $ 300,000,000 | ||||||
ESH Hospitality, Inc. | LIBOR | ESH REIT 2016 Term Facility | Medium-term Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 2.00% | |||||||
ESH Hospitality, Inc. | Libor Plus Rate | Revolving Credit Facility | ESH REIT 2016 Term Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 0.75% | |||||||
ESH Hospitality, Inc. | Libor Plus Rate Other than Level 1 Period | Revolving Credit Facility | ESH REIT 2016 Term Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 1.00% | |||||||
ESH Hospitality, Inc. | One-Month London Interbank Offered Rate | Revolving Credit Facility | ESH REIT 2016 Term Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 1.00% | |||||||
ESH Hospitality, Inc. | Federal Funds Rate | Revolving Credit Facility | 2016 ESH REIT Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 0.50% | |||||||
ESH Hospitality, Inc. | Federal Funds Rate | Revolving Credit Facility | ESH REIT 2016 Term Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 0.50% | |||||||
ESH Hospitality, Inc. | Minimum | 2025 Notes | Senior Notes | Redemption period three | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price as a percentage of principal repayment | 100.00% | |||||||
ESH Hospitality, Inc. | Minimum | Revolving Credit Facility | 2016 ESH REIT Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Fee on unutilized revolving credit facility | 0.175% | |||||||
ESH Hospitality, Inc. | Minimum | LIBOR | Revolving Credit Facility | 2016 ESH REIT Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 1.50% | |||||||
ESH Hospitality, Inc. | Minimum | Base Rate | Revolving Credit Facility | 2016 ESH REIT Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 0.50% | |||||||
ESH Hospitality, Inc. | Maximum | 2025 Notes | Senior Notes | Redemption period three | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price as a percentage of principal repayment | 102.625% | |||||||
ESH Hospitality, Inc. | Maximum | Revolving Credit Facility | 2016 ESH REIT Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Fee on unutilized revolving credit facility | 0.30% | |||||||
ESH Hospitality, Inc. | Maximum | LIBOR | Revolving Credit Facility | 2016 ESH REIT Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 2.00% | |||||||
ESH Hospitality, Inc. | Maximum | Base Rate | Revolving Credit Facility | 2016 ESH REIT Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 1.00% | |||||||
ESH Hospitality, Inc. | Public Corporate Family Rating Better Than Or Equal To BB- | LIBOR | ESH REIT 2016 Term Facility | Medium-term Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on base rate (as a percent) | 1.75% |
DEBT - Summary of Components _2
DEBT - Summary of Components of Interest Expense - REIT (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Entity Information [Line Items] | ||
Contractual interest | $ 31,326 | $ 28,717 |
Amortization of deferred financing costs and debt discount | 2,052 | 1,997 |
Other costs | 293 | 401 |
Interest Income | (986) | (1,511) |
Total | 32,685 | 29,604 |
Interest costs capitalized | 859 | 313 |
ESH Hospitality, Inc. | ||
Entity Information [Line Items] | ||
Contractual interest | 31,090 | 28,575 |
Amortization of deferred financing costs and debt discount | 2,022 | 1,969 |
Other costs | 262 | 356 |
Interest Income | (946) | (966) |
Total | 32,428 | 29,934 |
Interest costs capitalized | $ 859 | $ 313 |
DERIVATIVE INSTRUMENTS - Additi
DERIVATIVE INSTRUMENTS - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Sep. 30, 2016 | |
Designated as Hedging Instrument | Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Derivative notional amount | $ 150,000,000 | |||
Reduction of outstanding derivative amount | 50,000,000 | |||
Interest rate cash flow hedge gain, net of tax | (1,042,000) | $ 706,000 | ||
Gain to be reclassified to earnings in next twelve months | (1,000,000) | |||
Designated as Hedging Instrument | Interest Rate Swap | Interest (income) expense, net | ||||
Derivative [Line Items] | ||||
Interest rate cash flow hedge gain, net of tax | 257,000 | $ 975,000 | ||
ESH REIT | Designated as Hedging Instrument | Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Derivative notional amount | $ 150,000,000 | $ 200,000,000 | ||
Term Loan Facility | Medium-term Notes | ESH REIT Term Facility | ESH REIT | ||||
Derivative [Line Items] | ||||
Derivative rate (as a percent) | 1.175% |
DERIVATIVE INSTRUMENTS - Schedu
DERIVATIVE INSTRUMENTS - Schedule of Derivative Instruments (Details) - Designated as Hedging Instrument - Interest Rate Swap - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Derivative [Line Items] | |||
Fair value of interest rate swap | $ (1,224) | $ 831 | |
Interest rate cash flow hedge gain, net of tax | (1,042) | 706 | |
Gain (loss) on derivatives | (2,100) | $ (5,000) | |
Interest (income) expense, net | |||
Derivative [Line Items] | |||
Interest rate cash flow hedge gain, net of tax | $ 257 | $ 975 |
DERIVATIVE INSTRUMENTS - Addi_2
DERIVATIVE INSTRUMENTS - Additional Information - REIT (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Designated as Hedging Instrument | Interest Rate Swap | |||
Derivative [Line Items] | |||
Derivative notional amount | $ 150,000,000 | ||
Reduction of outstanding derivative amount | 50,000,000 | ||
Gain to be reclassified to earnings in next twelve months | (1,000,000) | ||
ESH Hospitality, Inc. | Designated as Hedging Instrument | Interest Rate Swap | |||
Derivative [Line Items] | |||
Derivative notional amount | 150,000,000 | $ 200,000,000 | |
Reduction of outstanding derivative amount | 50,000,000 | ||
Gain (loss) recognized in income | 300,000 | $ 1,000,000 | |
Gain to be reclassified to earnings in next twelve months | $ (1,000,000) | ||
Term Loan Facility | Medium-term Notes | ESH REIT Term Facility | ESH Hospitality, Inc. | |||
Derivative [Line Items] | |||
Derivative rate (as a percent) | 1.175% |
DERIVATIVE INSTRUMENTS - Sche_2
DERIVATIVE INSTRUMENTS - Schedule of Derivative Instruments - REIT (Details) (Details) - Designated as Hedging Instrument - Interest Rate Swap - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Derivative [Line Items] | |||
Fair value of interest rate swap | $ (1,224) | $ 831 | |
Interest rate cash flow hedge gain, net of tax | (1,042) | 706 | |
Interest (income) expense, net | |||
Derivative [Line Items] | |||
Interest rate cash flow hedge gain, net of tax | 257 | $ 975 | |
ESH Hospitality, Inc. | |||
Derivative [Line Items] | |||
Fair value of interest rate swap | (1,224) | 831 | |
Interest rate cash flow hedge gain, net of tax | (1,224) | 830 | |
Change in fair value | (2,100) | $ (5,000) | |
ESH Hospitality, Inc. | Interest (income) expense, net | |||
Derivative [Line Items] | |||
Interest rate cash flow hedge gain, net of tax | $ 257 | $ 975 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation by Booking Source (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | $ 266,301 | $ 277,669 |
Room revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 254,464 | 267,046 |
Other Hotel Revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 6,800 | 5,300 |
Property direct | Room revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 60,024 | 69,829 |
Property direct | Room revenues | Restatement Adjustment | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | (3,700) | |
Central call center | Room revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 77,191 | 68,108 |
Central call center | Room revenues | Restatement Adjustment | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 2,600 | |
Proprietary website | Room revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 52,939 | 50,398 |
Proprietary website | Room revenues | Restatement Adjustment | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 1,100 | |
Third-party intermediaries | Room revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 57,820 | 69,097 |
Travel agency global distribution systems | Room revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | $ 6,490 | $ 9,614 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation by Length of Guest Stay (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | $ 266,301 | $ 277,669 |
Room revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 254,464 | 267,046 |
Other Hotel Revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 6,800 | 5,300 |
1-6 nights | Room revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 84,594 | 101,424 |
7-29 nights | Room revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | 54,831 | 55,100 |
30+ nights | Room revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total room and other hotel revenues | $ 115,039 | $ 110,522 |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of Revenues from Franchised and Managed Hotels (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 266,301 | $ 277,669 |
Management fees | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 235 | 293 |
Franchise fees | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1,044 | 932 |
Indirect reimbursements (system service fees) | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1,190 | 1,185 |
Direct reimbursements | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 2,600 | 2,910 |
Total revenues from franchised and managed hotels | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 5,069 | $ 5,320 |
REVENUE FROM CONTRACTS WITH C_6
REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Outstanding Customer Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Jan. 01, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Outstanding Contract Liabilities | $ 16,111 | $ 16,231 |
Outstanding contract liabilities, recognized revenue | $ 10,172 |
REVENUE FROM CONTRACTS WITH C_7
REVENUE FROM CONTRACTS WITH CUSTOMERS - Performance Obligations (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Owned hotels | |
Disaggregation of Revenue [Line Items] | |
Outstanding contract liabilities | $ 10.7 |
Performance obligation, term | 1 year |
Franchised Hotels | |
Disaggregation of Revenue [Line Items] | |
Outstanding contract liabilities | $ 5.4 |
Performance obligation, term | 20 years |
SEGMENTS - Schedule of Operatin
SEGMENTS - Schedule of Operating Segments Evaluated on Income from Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total revenues | $ 266,301 | $ 277,669 |
Income (loss) from operations: | 42,343 | 63,953 |
Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total revenues | 263,294 | 274,391 |
Income (loss) from operations: | 50,613 | 71,737 |
Operating Segments | Owned hotels | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total revenues | 261,232 | 272,349 |
Income (loss) from operations: | 48,551 | 69,695 |
Operating Segments | Franchise and management | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total revenues | 2,062 | 2,042 |
Income (loss) from operations: | 2,062 | 2,042 |
Intellectual property fees | 800 | 800 |
Corporate and Other | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total revenues | 19,992 | 19,514 |
Income (loss) from operations: | (7,853) | (7,232) |
Intersegment Eliminations | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total revenues | (20,775) | (20,331) |
Other revenues from franchised and managed properties | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total revenues | 3,790 | 4,095 |
Income (loss) from operations: | $ (417) | $ (552) |
SEGMENTS - Schedule of Assets a
SEGMENTS - Schedule of Assets and Capital Expenditures of Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Assets: | $ 4,393,005 | $ 4,030,596 | |
Capital Expenditures: | 54,579 | $ 55,288 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Assets: | 3,701,132 | 3,676,185 | |
Operating Segments | Owned hotels | |||
Segment Reporting Information [Line Items] | |||
Assets: | 3,687,800 | 3,661,609 | |
Capital Expenditures: | 54,368 | 54,762 | |
Operating Segments | Franchise and management | |||
Segment Reporting Information [Line Items] | |||
Assets: | 13,332 | 14,576 | |
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Assets: | 750,602 | 397,568 | |
Capital Expenditures: | 211 | $ 526 | |
Intersegment Eliminations | |||
Segment Reporting Information [Line Items] | |||
Assets: | $ (58,729) | $ (43,157) |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Income Taxes [Line Items] | |||
Provision (benefit) for income taxes | $ 1,110 | $ 6,123 | |
Effective tax rate, percent | 12.40% | 17.70% | |
ESH REIT | Extended Stay America, Inc | Class A common stock | |||
Income Taxes [Line Items] | |||
Dividend subject to corporate income tax, percent | 59.00% |
INCOME TAXES - Additional Inf_2
INCOME TAXES - Additional Information - REIT (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Taxes [Line Items] | ||
Provision (benefit) for income taxes | $ 1,110 | $ 6,123 |
Effective tax rate, percent | 12.40% | 17.70% |
ESH Hospitality, Inc. | ||
Income Taxes [Line Items] | ||
Provision (benefit) for income taxes | $ 2 | $ 3 |
State and Local Jurisdiction | ESH Hospitality, Inc. | ||
Income Taxes [Line Items] | ||
Provision (benefit) for income taxes | $ 100 | $ 100 |
Effective tax rate, percent | 0.10% | 0.10% |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information - REIT (Detail) shares in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)leaseshares | Mar. 31, 2019USD ($)shares | Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | |||
Common distributions | $ 16,177,000 | $ 13,334,000 | |
ESH Hospitality, Inc. | |||
Related Party Transaction [Line Items] | |||
Number of leases | lease | 3 | ||
Term of lease | 5 years | ||
Lease renewal term | 5 years | ||
Termination period | 30 months | ||
Expenses from related party | $ 2,900,000 | 2,500,000 | |
Common distributions | 60,291,000 | 66,137,000 | |
Issuance of Class B common stock related to issuance of Paired Shares | 737,000 | 1,213,000 | |
ESH Hospitality, Inc. | Class A common stock | |||
Related Party Transaction [Line Items] | |||
Common distributions | 35,100,000 | 37,600,000 | |
ESH Hospitality, Inc. | Class B common stock | |||
Related Party Transaction [Line Items] | |||
Issuance of Class B common stock related to issuance of Paired Shares | $ 700,000 | $ 1,200,000 | |
Stock issued (shares) | shares | 200 | 200 | |
Restricted stock, granted (shares) | shares | 1,100 | ||
Shares expected to be issued (shares) | shares | 1,100 | ||
ESH Hospitality, Inc. | Line of Credit | Unsecured Intercompany Facility | |||
Related Party Transaction [Line Items] | |||
Carrying amount, unsecured intercompany facility | $ 0 | $ 0 | |
ESH Hospitality, Inc. | Equity Based Awards | Corporation | |||
Related Party Transaction [Line Items] | |||
Total equity-based compensation | 200,000 | $ 300,000 | |
ESH Hospitality, Inc. | Line of Credit | Unsecured Debt | Unsecured Intercompany Facility | |||
Related Party Transaction [Line Items] | |||
Interest expense, related party | 0 | $ 0 | |
Line of credit maximum additional principal available | $ 300,000,000 | ||
Performance Based Awards | ESH Hospitality, Inc. | |||
Related Party Transaction [Line Items] | |||
Percentage of award vest | 100.00% |
RELATED PARTY TRANSACTIONS - _3
RELATED PARTY TRANSACTIONS - REIT RELATED PARTY TRANSACTIONS - Schedule of rental revenues - REIT (Details) - ESH Hospitality, Inc. - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Entity Information [Line Items] | ||
Fixed rental revenues | $ 119,190 | $ 118,005 |
Variable rental revenues | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS - Sc
RELATED PARTY TRANSACTIONS - Schedule of Future Fixed Rental Payments -REIT (Details) - ESH Hospitality, Inc. $ in Thousands | Mar. 31, 2020USD ($) |
Related Party Transaction [Line Items] | |
Remainder of 2020 | $ 350,521 |
2021 | 479,830 |
2022 | 491,866 |
2023 | 419,911 |
Total | $ 1,742,128 |
RELATED PARTY TRANSACTIONS - _4
RELATED PARTY TRANSACTIONS - Schedule of Related Party Transaction Balances - REIT (Details) - ESH Hospitality, Inc. - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Working capital and other: | |||
Fixed rental revenues | $ 119,190 | $ 118,005 | |
Variable rental revenues | 0 | $ 0 | |
Corporation | |||
Leases: | |||
Rents receivable | 666 | $ 1,572 | |
Deferred rents receivable | 31,429 | 28,917 | |
Unearned rental revenues | (58,023) | (38,770) | |
Working capital and other: | |||
Ordinary working capital | (10,598) | (12,160) | |
Equity awards (payable) receivable | (230) | 322 | |
Total working capital and other, net | (10,828) | $ (11,838) | |
Fixed rental revenues | 38,800 | ||
Variable rental revenues | $ 19,200 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($)leaseletter_of_creditlawsuitrenewal_option | |
Commitment And Contingencies [Line Items] | |
Number of properties subject to ground leases | 5 |
Number of outstanding letters of credit | letter_of_credit | 1 |
Letters of credit outstanding | $ | $ 0.2 |
Number of purported class action lawsuits | lawsuit | 6 |
Minimum | |
Commitment And Contingencies [Line Items] | |
Renewal term (years) | 5 years |
Maximum | |
Commitment And Contingencies [Line Items] | |
Renewal term (years) | 10 years |
Corporate Office Lease | |
Commitment And Contingencies [Line Items] | |
Renewal term (years) | 5 years |
Number of renewal options | renewal_option | 2 |
Hotel properties | |
Commitment And Contingencies [Line Items] | |
Number of properties subject to ground leases | 1 |
Ground lease | |
Commitment And Contingencies [Line Items] | |
Number of ground leases that are operating leases | 3 |
Number of ground leases that are finance leases | 2 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease costs | $ 769 | $ 768 |
Finance lease costs - interest | 61 | 61 |
Total lease costs | $ 830 | $ 829 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - The Company's right-of-use assets and lease liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Right-of-use assets: | ||
Operating | $ 4,298 | $ 4,863 |
Finance | 4,343 | 3,979 |
Lease liabilities: | ||
Operating | 12,077 | 12,590 |
Finance | $ 3,707 | $ 3,379 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Future Minimum Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
Remainder of 2020 | $ 2,182 | |
2021 | 2,220 | |
2022 | 806 | |
2023 | 552 | |
2024 | 503 | |
2025 | 503 | |
Thereafter | 77,091 | |
Total | 83,857 | |
Total discounted lease liability | 12,077 | $ 12,590 |
Difference between undiscounted cash flows and discounted cash flows | $ 71,780 | |
Weighted-average remaining lease term | 45 years | |
Weighted-average discount rate | 6.40% | |
Finance Leases | ||
Remainder of 2020 | $ 479 | |
2021 | 585 | |
2022 | 397 | |
2023 | 400 | |
2024 | 402 | |
2025 | 429 | |
Thereafter | 2,671 | |
Total | 5,363 | |
Total discounted lease liability | 3,707 | $ 3,379 |
Difference between undiscounted cash flows and discounted cash flows | $ 1,656 | |
Weighted-average remaining lease term | 11 years | |
Weighted-average discount rate | 6.80% |
COMMITMENTS AND CONTINGENCIES_7
COMMITMENTS AND CONTINGENCIES - Additional Information - REIT (Detail) | 3 Months Ended |
Mar. 31, 2020lease | |
Commitment And Contingencies [Line Items] | |
Number of properties subject to ground leases | 5 |
Minimum | |
Commitment And Contingencies [Line Items] | |
Renewal term (years) | 5 years |
Maximum | |
Commitment And Contingencies [Line Items] | |
Renewal term (years) | 10 years |
ESH Hospitality, Inc. | |
Commitment And Contingencies [Line Items] | |
Number of properties subject to ground leases | 5 |
ESH Hospitality, Inc. | Minimum | |
Commitment And Contingencies [Line Items] | |
Renewal term (years) | 5 years |
ESH Hospitality, Inc. | Maximum | |
Commitment And Contingencies [Line Items] | |
Renewal term (years) | 10 years |
Hotel properties | |
Commitment And Contingencies [Line Items] | |
Number of properties subject to ground leases | 1 |
Hotel properties | ESH Hospitality, Inc. | |
Commitment And Contingencies [Line Items] | |
Number of properties subject to ground leases | 1 |
Ground lease | |
Commitment And Contingencies [Line Items] | |
Number of ground leases that are operating leases | 3 |
Number of ground leases that are finance leases | 2 |
Ground lease | ESH Hospitality, Inc. | |
Commitment And Contingencies [Line Items] | |
Number of ground leases that are operating leases | 3 |
Number of ground leases that are finance leases | 2 |
COMMITMENTS AND CONTINGENCIES_8
COMMITMENTS AND CONTINGENCIES - Components of Lease Expense - REIT (Details) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Entity Information [Line Items] | ||
Operating lease costs | $ 769 | $ 768 |
Finance lease costs - interest | 61 | 61 |
Total lease costs | 830 | 829 |
ESH Hospitality, Inc. | ||
Entity Information [Line Items] | ||
Operating lease costs | 326 | 325 |
Finance lease costs - interest | 61 | 61 |
Total lease costs | $ 387 | $ 386 |
COMMITMENTS AND CONTINGENCIES_9
COMMITMENTS AND CONTINGENCIES - REIT COMMITMENTS AND CONTINGENCIES - The Company's right-of-use assets and lease liabilities -REIT (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Right-of-use assets: | ||
Operating | $ 4,298 | $ 4,863 |
Finance | 4,343 | 3,979 |
Lease liabilities: | ||
Operating | 12,077 | 12,590 |
Finance | 3,707 | 3,379 |
ESH Hospitality, Inc. | ||
Right-of-use assets: | ||
Operating | 1,916 | 2,084 |
Finance | 4,343 | 3,979 |
Lease liabilities: | ||
Operating | 9,173 | 9,207 |
Finance | $ 3,707 | $ 3,379 |
COMMITMENTS AND CONTINGENCIE_10
COMMITMENTS AND CONTINGENCIES - Future Minimum Payments - REIT (Details) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
Remainder of 2020 | $ 2,182 | |
2021 | 2,220 | |
2022 | 806 | |
2023 | 552 | |
2024 | 503 | |
2025 | 503 | |
Thereafter | 77,091 | |
Total | 83,857 | |
Total discounted lease liability | 12,077 | $ 12,590 |
Difference between undiscounted cash flows and discounted cash flows | $ 71,780 | |
Weighted-average remaining lease term | 45 years | |
Weighted-average discount rate | 6.40% | |
Finance Leases | ||
Remainder of 2020 | $ 479 | |
2021 | 585 | |
2022 | 397 | |
2023 | 400 | |
2024 | 402 | |
2025 | 429 | |
Thereafter | 2,671 | |
Total | 5,363 | |
Total discounted lease liability | 3,707 | 3,379 |
Difference between undiscounted cash flows and discounted cash flows | $ 1,656 | |
Weighted-average remaining lease term | 11 years | |
Weighted-average discount rate | 6.80% | |
ESH Hospitality, Inc. | ||
Operating Leases | ||
Remainder of 2020 | $ 588 | |
2021 | 784 | |
2022 | 806 | |
2023 | 552 | |
2024 | 503 | |
2025 | 503 | |
Thereafter | 77,091 | |
Total | 80,827 | |
Total discounted lease liability | 9,173 | 9,207 |
Difference between undiscounted cash flows and discounted cash flows | $ 71,654 | |
Weighted-average remaining lease term | 58 years | |
Weighted-average discount rate | 6.60% | |
Finance Leases | ||
Remainder of 2020 | $ 479 | |
2021 | 585 | |
2022 | 397 | |
2023 | 400 | |
2024 | 402 | |
2025 | 429 | |
Thereafter | 2,671 | |
Total | 5,363 | |
Total discounted lease liability | 3,707 | $ 3,379 |
Difference between undiscounted cash flows and discounted cash flows | $ 1,656 | |
Weighted-average remaining lease term | 11 years | |
Weighted-average discount rate | 6.80% |
EQUITY-BASED COMPENSATION - Add
EQUITY-BASED COMPENSATION - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate number of Paired Shares (shares) | 8 | |
Granted incentive stock options (no more than) (shares) | 4 | |
Shares available for future issuance (shares) | 4.3 | |
General and Administrative Expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total equity-based compensation | $ 1.1 | $ 2.1 |
EQUITY-BASED COMPENSATION - Sch
EQUITY-BASED COMPENSATION - Schedule of Unrecognized Compensation Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense Related to Outstanding Awards (in thousands) | $ 12,652 |
RSUs with service vesting conditions | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense Related to Outstanding Awards (in thousands) | $ 8,689 |
Remaining Weighted-Average Amortization Period (in years) | 1 year 10 months 24 days |
RSUs with market vesting conditions | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Expense Related to Outstanding Awards (in thousands) | $ 3,963 |
Remaining Weighted-Average Amortization Period (in years) | 2 years 4 months 24 days |
EQUITY-BASED COMPENSATION - Sum
EQUITY-BASED COMPENSATION - Summary of Restricted Stock Award and Restricted Stock Unit Activity (Detail) shares in Thousands | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Service-Based Awards | |
Number of RSUs (in thousands) | |
Outstanding Beginning Balance (shares) | shares | 928 |
Granted (shares) | shares | 248 |
Settled (shares) | shares | (280) |
Forfeited (shares) | shares | (182) |
Outstanding Ending Balance (shares) | shares | 714 |
Vested (shares) | shares | 28 |
Nonvested (shares) | shares | 686 |
Weighted- Average Grant- Date Fair Value | |
Outstanding Beginning Balance (dollars per share) | $ / shares | $ 16.77 |
Granted (dollars per share) | $ / shares | 13.07 |
Settled (dollars per share) | $ / shares | 17.73 |
Forfeited (dollars per share) | $ / shares | 16.99 |
Outstanding Ending Balance (dollars per share) | $ / shares | 15.05 |
Vested (dollars per share) | $ / shares | 14.50 |
Nonvested (dollars per share) | $ / shares | $ 15.08 |
Market Vesting | |
Number of RSUs (in thousands) | |
Outstanding Beginning Balance (shares) | shares | 255 |
Granted (shares) | shares | 281 |
Settled (shares) | shares | (46) |
Forfeited (shares) | shares | (93) |
Outstanding Ending Balance (shares) | shares | 397 |
Vested (shares) | shares | 0 |
Nonvested (shares) | shares | 397 |
Weighted- Average Grant- Date Fair Value | |
Outstanding Beginning Balance (dollars per share) | $ / shares | $ 16.56 |
Granted (dollars per share) | $ / shares | 11.67 |
Settled (dollars per share) | $ / shares | 18.58 |
Forfeited (dollars per share) | $ / shares | 15.39 |
Outstanding Ending Balance (dollars per share) | $ / shares | 13.15 |
Vested (dollars per share) | $ / shares | 0 |
Nonvested (dollars per share) | $ / shares | $ 13.15 |
EQUITY-BASED COMPENSATION - Per
EQUITY-BASED COMPENSATION - Performance-Based Awards - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2020 | |
Market Based Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards vesting period (years) | 3 years |
Market Based Awards | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of award vest | 0.00% |
Market Based Awards | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of award vest | 150.00% |
ESH REIT | Service Based Awards | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards vesting period (years) | 1 year |
ESH REIT | Service Based Awards | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards vesting period (years) | 3 years |
EQUITY-BASED COMPENSATION - S_2
EQUITY-BASED COMPENSATION - Summary of Key Assumptions Used for Fair Value (Details) - Performance Based Awards | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected holding period | 2 years 11 months 1 day |
Risk–free rate of return | 1.43% |
Expected dividend yield | 7.01% |
SUBSEQUENT EVENTS - Additional
SUBSEQUENT EVENTS - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Apr. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | May 06, 2020 | Dec. 31, 2018 | |
Subsequent Event [Line Items] | ||||||
Common distributions, per common share (dollars per share) | $ 0.09 | $ 0.07 | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 725,009,000 | $ 303,936,000 | $ 361,670,000 | $ 303,336,000 | ||
Mandatorily Redeemable Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, redemption rate (percent) | 8.00% | 8.00% | ||||
Revolving Credit Facility | ||||||
Subsequent Event [Line Items] | ||||||
Amount of borrowing capacity drawn | $ 400,000,000 | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 678,000,000 | |||||
Subsequent Event | Mandatorily Redeemable Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Redeemed preferred stock (in shares) | 6,422 | |||||
Redemption of redeemable convertible preferred stock | $ 6,400,000 | |||||
Subsequent Event | ESH REIT | Revolving Credit Facility | ESH REIT Term Facility | ||||||
Subsequent Event [Line Items] | ||||||
Additional borrowing capacity | $ 150,000,000 | |||||
Minimum liquidity | $ 150,000,000 | |||||
Class B common stock | ||||||
Subsequent Event [Line Items] | ||||||
Common distributions, per common share (dollars per share) | $ 0.14 | $ 0.15 |
SUBSEQUENT EVENTS - REIT - Addi
SUBSEQUENT EVENTS - REIT - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | May 06, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Apr. 30, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | |||||
Common distributions, per common share (dollars per share) | $ 0.09 | $ 0.07 | |||
Unrestricted cash and cash equivalents | $ 710,131 | $ 346,812 | |||
Revolving Credit Facility | |||||
Subsequent Event [Line Items] | |||||
Amount of borrowing capacity drawn | 400,000 | ||||
ESH Hospitality, Inc. | |||||
Subsequent Event [Line Items] | |||||
Unrestricted cash and cash equivalents | 628,887 | $ 296,134 | |||
ESH Hospitality, Inc. | Revolving Credit Facility | 2016 ESH REIT Revolving Credit Facility | |||||
Subsequent Event [Line Items] | |||||
Amount of borrowing capacity drawn | $ 350,000 | ||||
Subsequent Event | ESH Hospitality, Inc. | |||||
Subsequent Event [Line Items] | |||||
Unrestricted cash and cash equivalents | $ 608,400 | ||||
Class A common stock | ESH Hospitality, Inc. | |||||
Subsequent Event [Line Items] | |||||
Common distributions, per common share (dollars per share) | $ 0.14 | 0.15 | |||
Class A common stock | Subsequent Event | ESH Hospitality, Inc. | |||||
Subsequent Event [Line Items] | |||||
Common distributions, per common share (dollars per share) | $ 0.01 | ||||
Class B common stock | |||||
Subsequent Event [Line Items] | |||||
Common distributions, per common share (dollars per share) | 0.14 | 0.15 | |||
Class B common stock | ESH Hospitality, Inc. | |||||
Subsequent Event [Line Items] | |||||
Common distributions, per common share (dollars per share) | $ 0.14 | $ 0.15 | |||
Class B common stock | Subsequent Event | ESH Hospitality, Inc. | |||||
Subsequent Event [Line Items] | |||||
Common distributions, per common share (dollars per share) | $ 0.01 |