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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Extended Stay America Inc | NASDAQ:STAY | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 20.455 | 17.32 | 20.30 | 0 | 01:00:00 |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number: | 001-36190 | Commission File Number: | 001-36191 |
Extended Stay America, Inc. | ESH Hospitality, Inc. | ||||
(Exact name of registrant as specified in its charter) | (Exact name of registrant as specified in its charter) |
Delaware | Delaware | ||||
(State or other jurisdiction of
incorporation or organization)
|
(State or other jurisdiction of
incorporation or organization)
|
||||
46-3140312 | 27-3559821 | ||||
(I.R.S. Employer
Identification No.)
|
(I.R.S. Employer
Identification No.)
|
||||
11525 N. Community House Road, Suite 100 | 11525 N. Community House Road, Suite 100 | ||||
Charlotte | Charlotte | ||||
North Carolina | North Carolina | ||||
28277 | 28277 | ||||
(Address of principal executive offices, zip code) | (Address of principal executive offices, zip code) |
(980)
|
345-1600 |
(980)
|
345-1600 | ||||||||||||||
(Registrant’s telephone number, including area code) | (Registrant’s telephone number, including area code) |
Title of each class | Trading Symbol(s) |
Name of each exchange
on which registered
|
||||||||||||
Common Stock, par value $0.01 per share, of Extended Stay America, Inc. | STAY | Nasdaq Global Select Market | ||||||||||||
and Class B Common Stock, par value $0.01 per share, of ESH Hospitality, Inc., which are attached and trade together as Paired Shares |
Extended Stay America, Inc. | Yes | ☒ | No | ☐ | ||||||||||
ESH Hospitality, Inc. | Yes | ☒ | No | ☐ |
Extended Stay America, Inc. | Yes | ☒ | No | ☐ | ||||||||||
ESH Hospitality, Inc. | Yes | ☒ | No | ☐ |
Extended Stay America, Inc. | Large Accelerated Filer | ☒ | Accelerated filer | ☐ | ||||||||||
Non-accelerated filer | ☐ |
Smaller reporting
company
|
☐ | |||||||||||
Emerging growth company | ☐ | |||||||||||||
ESH Hospitality, Inc. | Large Accelerated Filer | ☒ | Accelerated filer | ☐ | ||||||||||
Non-accelerated filer | ☐ |
Smaller reporting
company
|
☐ | |||||||||||
Emerging growth company | ☐ |
Extended Stay America, Inc. | Yes | ☐ | No | ☒ | ||||||||||
ESH Hospitality, Inc. | Yes | ☐ | No | ☒ |
Page No. | |||||
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||||||||||||
Room revenues | $ | 219,851 | $ | 311,614 | $ | 474,315 | $ | 578,660 | |||||||||||||||||||||||||||
Other hotel revenues | 6,320 | 6,070 | 13,088 | 11,373 | |||||||||||||||||||||||||||||||
Franchise and management fees | 1,218 | 1,447 | 2,497 | 2,672 | |||||||||||||||||||||||||||||||
227,389 | 319,131 | 489,900 | 592,705 | ||||||||||||||||||||||||||||||||
Other revenues from franchised and managed properties | 3,445 | 4,526 | 7,235 | 8,621 | |||||||||||||||||||||||||||||||
Total revenues | 230,834 | 323,657 | 497,135 | 601,326 | |||||||||||||||||||||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||||||||||||||||
Hotel operating expenses | 133,435 | 146,907 | 278,730 | 284,198 | |||||||||||||||||||||||||||||||
General and administrative expenses | 23,103 | 22,287 | 47,041 | 45,314 | |||||||||||||||||||||||||||||||
Depreciation and amortization | 51,042 | 49,017 | 101,562 | 97,795 | |||||||||||||||||||||||||||||||
Impairment of long-lived assets | 675 | — | 675 | — | |||||||||||||||||||||||||||||||
208,255 | 218,211 | 428,008 | 427,307 | ||||||||||||||||||||||||||||||||
Other expenses from franchised and managed properties | 4,083 | 4,996 | 8,290 | 9,643 | |||||||||||||||||||||||||||||||
Total operating expenses | 212,338 | 223,207 | 436,298 | 436,950 | |||||||||||||||||||||||||||||||
OTHER INCOME | 1 | 1 | 3 | 28 | |||||||||||||||||||||||||||||||
INCOME FROM OPERATIONS | 18,497 | 100,451 | 60,840 | 164,404 | |||||||||||||||||||||||||||||||
OTHER NON-OPERATING (INCOME) EXPENSE | (302) | (171) | 401 | (349) | |||||||||||||||||||||||||||||||
INTEREST EXPENSE, NET | 33,621 | 29,766 | 66,306 | 59,370 | |||||||||||||||||||||||||||||||
(LOSS) INCOME BEFORE INCOME TAX (BENEFIT) EXPENSE | (14,822) | 70,856 | (5,867) | 105,383 | |||||||||||||||||||||||||||||||
INCOME TAX (BENEFIT) EXPENSE | (6,052) | 11,198 | (4,942) | 17,321 | |||||||||||||||||||||||||||||||
NET (LOSS) INCOME | (8,770) | 59,658 | (925) | 88,062 | |||||||||||||||||||||||||||||||
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (3,593) | (6,161) | (6,884) | (12,631) | |||||||||||||||||||||||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS | $ | (12,363) | $ | 53,497 | $ | (7,809) | $ | 75,431 | |||||||||||||||||||||||||||
NET (LOSS) INCOME PER EXTENDED STAY AMERICA, INC. COMMON SHARE: | |||||||||||||||||||||||||||||||||||
Basic | $ | (0.07) | $ | 0.28 | $ | (0.04) | $ | 0.40 | |||||||||||||||||||||||||||
Diluted | $ | (0.07) | $ | 0.28 | $ | (0.04) | $ | 0.40 | |||||||||||||||||||||||||||
WEIGHTED-AVERAGE EXTENDED STAY AMERICA, INC. COMMON SHARES OUTSTANDING: | |||||||||||||||||||||||||||||||||||
Basic | 177,551 | 188,450 | 177,771 | 188,399 | |||||||||||||||||||||||||||||||
Diluted | 177,551 | 188,813 | 177,771 | 188,695 |
Common Stock |
Additional
Paid in Capital |
Retained Earnings | Accumulated Other Comprehensive Income |
Total Extended Stay America, Inc.
Shareholders’ Equity |
Noncontrolling Interests |
Total
Equity |
|||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - April 1, 2019 | 188,403 | $ | 1,884 | $ | 750,135 | $ | 41,116 | $ | 1,774 | $ | 794,909 | $ | 501,742 | $ | 1,296,651 | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 53,497 | — | 53,497 | 6,161 | 59,658 | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate cash flow hedge loss, net of tax | — | — | — | — | (985) | (985) | (999) | (1,984) | |||||||||||||||||||||||||||||||||||||||||||||
Corporation common distributions - $0.09 per common share
|
— | — | — | (17,062) | — | (17,062) | — | (17,062) | |||||||||||||||||||||||||||||||||||||||||||||
ESH REIT common distributions - $0.14 per Class B common share
|
— | — | — | — | — | — | (26,542) | (26,542) | |||||||||||||||||||||||||||||||||||||||||||||
ESH REIT preferred distributions | — | — | — | — | — | — | (4) | (4) | |||||||||||||||||||||||||||||||||||||||||||||
Adjustment to reflect changes in book value of noncontrolling interests | — | — | (75) | — | — | (75) | 75 | — | |||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | 9 | — | 1,407 | — | — | 1,407 | 899 | 2,306 | |||||||||||||||||||||||||||||||||||||||||||||
BALANCE - June 30, 2019 | 188,412 | $ | 1,884 | $ | 751,467 | $ | 77,551 | $ | 789 | $ | 831,691 | $ | 481,332 | $ | 1,313,023 |
Common Stock |
Additional
Paid in Capital |
Accumulated Deficit | Accumulated Other Comprehensive Loss |
Total Extended Stay America, Inc.
Shareholders’ Equity |
Noncontrolling Interests |
Total
Equity |
|||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - April 1, 2020 | 177,466 | $ | 1,775 | $ | 723,285 | $ | (63,394) | $ | (512) | $ | 661,154 | $ | 449,730 | $ | 1,110,884 | ||||||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | (12,363) | — | (12,363) | 3,593 | (8,770) | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate cash flow hedge gain, net of tax | — | — | — | — | 23 | 23 | 22 | 45 | |||||||||||||||||||||||||||||||||||||||||||||
Corporation common distributions - $0 per common share
|
— | — | — | 8 | — | 8 | — | 8 | |||||||||||||||||||||||||||||||||||||||||||||
ESH REIT common distributions - $0.01 per Class B common share
|
— | — | — | — | — | — | (1,773) | (1,773) | |||||||||||||||||||||||||||||||||||||||||||||
ESH REIT preferred distributions | — | — | — | — | — | — | (4) | (4) | |||||||||||||||||||||||||||||||||||||||||||||
Adjustment to reflect changes in book value of noncontrolling interests | — | — | 351 | — | — | 351 | (351) | — | |||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | 16 | — | 1,246 | — | — | 1,246 | 732 | 1,978 | |||||||||||||||||||||||||||||||||||||||||||||
BALANCE - June 30, 2020 | 177,482 | $ | 1,775 | $ | 724,882 | $ | (75,749) | $ | (489) | $ | 650,419 | $ | 451,949 | $ | 1,102,368 |
Common Stock |
Additional
Paid in Capital |
Retained Earnings | Accumulated Other Comprehensive Income |
Total Extended Stay America, Inc.
Shareholders’ Equity |
Noncontrolling Interests |
Total
Equity |
|||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - January 1, 2019 | 188,219 | $ | 1,882 | $ | 749,219 | $ | 32,432 | $ | 2,488 | $ | 786,021 | $ | 524,618 | $ | 1,310,639 | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 75,431 | — | 75,431 | 12,631 | 88,062 | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate cash flow hedge loss, net of tax | — | — | — | — | (1,699) | (1,699) | (1,723) | (3,422) | |||||||||||||||||||||||||||||||||||||||||||||
Corporation common distributions - $0.16 per common share
|
— | — | — | (30,312) | — | (30,312) | — | (30,312) | |||||||||||||||||||||||||||||||||||||||||||||
ESH REIT common distributions - $0.29 per Class B common share
|
— | — | — | — | — | — | (54,940) | (54,940) | |||||||||||||||||||||||||||||||||||||||||||||
ESH REIT preferred distributions | — | — | — | — | — | — | (8) | (8) | |||||||||||||||||||||||||||||||||||||||||||||
Adjustment to reflect changes in book value of noncontrolling interests | — | — | 400 | — | — | 400 | (400) | — | |||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | 193 | 2 | 1,848 | — | — | 1,850 | 1,154 | 3,004 | |||||||||||||||||||||||||||||||||||||||||||||
BALANCE - June 30, 2019 | 188,412 | $ | 1,884 | $ | 751,467 | $ | 77,551 | $ | 789 | $ | 831,691 | $ | 481,332 | $ | 1,313,023 |
Common Stock |
Additional
Paid in Capital |
Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income |
Total Extended Stay America, Inc.
Shareholders’ Equity |
Noncontrolling Interests |
Total
Equity |
|||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - January 1, 2020 | 179,483 | $ | 1,795 | $ | 742,397 | $ | (48,283) | $ | 383 | $ | 696,292 | $ | 479,978 | $ | 1,176,270 | ||||||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | (7,809) | — | (7,809) | 6,884 | (925) | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate cash flow hedge loss, net of tax | — | — | — | — | (872) | (872) | (830) | (1,702) | |||||||||||||||||||||||||||||||||||||||||||||
Repurchase of Corporation common stock and ESH REIT Class B common stock (Paired Shares) | (2,237) | (22) | — | (19,665) | — | (19,687) | (11,406) | (31,093) | |||||||||||||||||||||||||||||||||||||||||||||
Corporation common distributions - $0.09 per common share
|
— | — | (15,981) | 8 | — | (15,973) | — | (15,973) | |||||||||||||||||||||||||||||||||||||||||||||
ESH REIT common distributions - $0.15 per Class B common share
|
— | — | — | — | — | — | (26,615) | (26,615) | |||||||||||||||||||||||||||||||||||||||||||||
ESH REIT preferred distributions | — | — | — | — | — | — | (8) | (8) | |||||||||||||||||||||||||||||||||||||||||||||
Adjustment to reflect changes in book value of noncontrolling interests | — | — | (2,968) | — | — | (2,968) | 2,968 | — | |||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | 236 | 2 | 1,434 | — | — | 1,436 | 978 | 2,414 | |||||||||||||||||||||||||||||||||||||||||||||
BALANCE - June 30, 2020 | 177,482 | $ | 1,775 | $ | 724,882 | $ | (75,749) | $ | (489) | $ | 650,419 | $ | 451,949 | $ | 1,102,368 |
Six Months Ended
June 30, |
|||||||||||||||||
2020 | 2019 | ||||||||||||||||
OPERATING ACTIVITIES: | |||||||||||||||||
Net (loss) income | $ | (925) | $ | 88,062 | |||||||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 101,562 | 97,795 | |||||||||||||||
Foreign currency transaction loss (gain) | 401 | (349) | |||||||||||||||
Amortization of deferred financing costs and debt discount | 4,129 | 3,993 | |||||||||||||||
Loss on disposal of property and equipment | 4,979 | 3,377 | |||||||||||||||
Impairment of long-lived assets | 675 | — | |||||||||||||||
Equity-based compensation | 2,990 | 4,255 | |||||||||||||||
Deferred income tax benefit | (3,921) | (2,385) | |||||||||||||||
Changes in assets and liabilities: | |||||||||||||||||
Accounts receivable, net | 624 | (3,464) | |||||||||||||||
Other assets | (3,190) | (3,331) | |||||||||||||||
Accounts payable and accrued liabilities | 2,994 | 16,144 | |||||||||||||||
Net cash provided by operating activities | 110,318 | 204,097 | |||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||
Purchases of property and equipment | (63,317) | (84,785) | |||||||||||||||
Development in process payments | (41,537) | (21,841) | |||||||||||||||
Payment for intangible assets | (455) | (6,296) | |||||||||||||||
Proceeds from insurance and related recoveries | 987 | 613 | |||||||||||||||
Net cash used in investing activities | (104,322) | (112,309) | |||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||
Principal payments on term loan facility | (3,154) | (5,683) | |||||||||||||||
Proceeds from revolving credit facilities | 399,765 | — | |||||||||||||||
Payments of deferred financing costs | (172) | — | |||||||||||||||
Principal payments on finance leases | (69) | (58) | |||||||||||||||
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) | — | |||||||||||||||
Repurchase of Corporation mandatorily redeemable preferred stock | (6,422) | — | |||||||||||||||
Corporation common distributions | (16,177) | (30,287) | |||||||||||||||
ESH REIT common distributions | (26,997) | (54,938) | |||||||||||||||
ESH REIT preferred distributions | (8) | (8) | |||||||||||||||
Net cash provided by (used in) financing activities | 314,858 | (92,545) | |||||||||||||||
CHANGES IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH DUE TO CHANGES IN FOREIGN CURRENCY EXCHANGE RATES | (78) | 61 | |||||||||||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 320,776 | (696) | |||||||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - Beginning of period | 361,670 | 303,336 | |||||||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - End of period | $ | 682,446 | $ | 302,640 | |||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||||||||||||
Cash payments for interest, excluding modification, prepayment and other penalties, net of capitalized interest of $1,643 and $751
|
$ | 64,311 | $ | 57,902 | |||||||||||||
Cash payments for income taxes, net of refunds of $181 and $0
|
$ | 1,024 | $ | 16,583 | |||||||||||||
Operating cash payments for finance leases | $ | 118 | $ | 122 | |||||||||||||
Operating cash payments for operating leases | $ | 1,435 | $ | 1,380 | |||||||||||||
NONCASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||||||||
Capital expenditures included in accounts payable and accrued liabilities | $ | 19,042 | $ | 27,618 | |||||||||||||
Additions to finance lease right-of-use assets and liabilities | $ | 457 | $ | 109 | |||||||||||||
Corporation common distributions included in accounts payable and accrued liabilities | $ | 229 | $ | 380 | |||||||||||||
ESH REIT common distributions included in accounts payable and accrued liabilities | $ | 385 | $ | 794 |
June 30,
2020 |
December 31, 2019 | ||||||||||
Hotel properties: | |||||||||||
Land and site improvements (1)
|
$ | 1,239,747 | $ | 1,228,231 | |||||||
Building and improvements | 2,846,722 | 2,792,579 | |||||||||
Furniture, fixtures and equipment (2)
|
763,319 | 745,145 | |||||||||
Total hotel properties | 4,849,788 | 4,765,955 | |||||||||
Development in process (3)
|
63,611 | 70,864 | |||||||||
Corporate furniture, fixtures, equipment, software and other | 31,378 | 30,680 | |||||||||
Total cost | 4,944,777 | 4,867,499 | |||||||||
Less accumulated depreciation: | |||||||||||
Hotel properties | (1,435,357) | (1,353,772) | |||||||||
Corporate furniture, fixtures, equipment, software and other | (22,080) | (20,178) | |||||||||
Total accumulated depreciation | (1,457,437) | (1,373,950) | |||||||||
Property and equipment — net | $ | 3,487,340 | $ | 3,493,549 |
Opening Date | Location | Number of Hotels |
Number of
Rooms |
|||||||||||
December 2019 | Florida | 1 | 124 | |||||||||||
December 2019 | Arizona | 1 | 136 | |||||||||||
March 2020 | Florida | 1 | 120 | |||||||||||
April 2020 | South Carolina | 1 | 120 | |||||||||||
June 2020 | Georgia | 1 | 124 | |||||||||||
June 2020 | Texas | 1 | 124 |
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2020 | June 30, 2020 | ||||||||||||||||
Total room and other hotel revenues | $ | 1,551 | $ | 3,234 | |||||||||||||
Total operating expenses | 1,831 | 2,985 | |||||||||||||||
(Loss) income before income tax expense | (280) | 249 |
June 30, 2020 | |||||||||||||||||||||||||||||
Gross
Carrying Amount |
Accumulated
Amortization |
Net
Book Value |
|||||||||||||||||||||||||||
Definite-lived intangible assets—customer relationships | $ | 26,800 | $ | (13,041) | $ | 13,759 | |||||||||||||||||||||||
Definite-lived intangible assets—software licenses | 10,476 | (1,380) | 9,096 | ||||||||||||||||||||||||||
Indefinite-lived intangible assets—trademarks | 10,163 | — | 10,163 | ||||||||||||||||||||||||||
Total intangible assets | 47,439 | (14,421) | 33,018 | ||||||||||||||||||||||||||
Goodwill | 45,192 | — | 45,192 | ||||||||||||||||||||||||||
Total intangible assets and goodwill | $ | 92,631 | $ | (14,421) | $ | 78,210 |
December 31, 2019 | |||||||||||||||||||||||||||||
Gross
Carrying Amount |
Accumulated
Amortization |
Net
Book Value |
|||||||||||||||||||||||||||
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 |
Years Ending December 31, | |||||
Remainder of 2020 | $ | 1,290 | |||
2021 | 2,580 | ||||
2022 | 2,580 | ||||
2023 | 2,580 | ||||
2024 | 2,580 | ||||
2025 | 2,580 | ||||
Thereafter | 8,665 | ||||
Total | $ | 22,855 |
Stated
Amount |
Carrying Amount | Unamortized Deferred Financing Costs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan | June 30, 2020 | December 31, 2019 | June 30, 2020 | December 31, 2019 | Stated Interest Rate | Maturity Date | ||||||||||||||||||||||||||||||||||||||||||||||||||
Term loan facility | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ESH REIT Term Facility | $ | 630,909 | $ | 624,359 |
(1)
|
$ | 627,368 |
(1)
|
$ | 8,356 | $ | 9,030 |
LIBOR (2) + 2.00%
|
9/18/2026 |
(3)
|
|||||||||||||||||||||||||||||||||||||||||
Senior notes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2025 Notes | 1,300,000 | 1,293,644 |
(4)
|
1,292,986 |
(4)
|
13,643 | 15,055 | 5.25% | 5/1/2025 | |||||||||||||||||||||||||||||||||||||||||||||||
2027 Notes | 750,000 | 750,000 | 750,000 | 12,759 | 13,633 | 4.63% | 10/1/2027 | |||||||||||||||||||||||||||||||||||||||||||||||||
Revolving credit facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ESH REIT Revolving Credit Facility | 350,000 | 350,000 | — | 2,339 |
(5)
|
2,606 |
(5)
|
LIBOR (2) + 2.00%
|
9/18/2024 | |||||||||||||||||||||||||||||||||||||||||||||||
Corporation Revolving Credit Facility | 50,000 | 49,765 | — | 628 |
(5)
|
556 |
(5)
|
LIBOR (2) + 2.25%
|
9/18/2024 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,067,768 | $ | 2,670,354 | $ | 37,725 | $ | 40,880 |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Contractual interest, net (1)
|
$ | 31,753 | $ | 28,765 | $ | 63,079 | $ | 57,482 | |||||||||||||||||||||||||||
Amortization of deferred financing costs and debt discount | 2,077 | 1,996 | 4,129 | 3,993 | |||||||||||||||||||||||||||||||
Other costs (2)
|
59 | 405 | 352 | 806 | |||||||||||||||||||||||||||||||
Interest income | (268) | (1,400) | (1,254) | (2,911) | |||||||||||||||||||||||||||||||
Total | $ | 33,621 | $ | 29,766 | $ | 66,306 | $ | 59,370 |
(Accrued liabilities) other assets | Accumulated other comprehensive (loss) income, net of tax | Interest expense (income), net | ||||||||||||||||||
As of June 30, 2020 | $ | (1,170) | $ | (996) |
(1)
|
|||||||||||||||
As of December 31, 2019 | $ | 831 | $ | 706 |
(2)
|
|||||||||||||||
For the three months ended June 30, 2020 | $ | 250 | ||||||||||||||||||
For the three months ended June 30, 2019 | $ | (821) | ||||||||||||||||||
For the six months ended June 30, 2020 | $ | (7) | ||||||||||||||||||
For the six months ended June 30, 2019 | $ | (1,797) |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||
Property direct | $ | 59,830 | $ | 75,426 |
(2)
|
$ | 119,854 | $ | 145,255 |
(2)
|
|||||||||||||||||||||||||||||||
Central call center | 70,840 | 81,089 |
(2)
|
148,031 | 149,197 |
(2)
|
|||||||||||||||||||||||||||||||||||
Proprietary website | 46,643 | 60,257 |
(2)
|
99,582 | 110,655 |
(2)
|
|||||||||||||||||||||||||||||||||||
Third-party intermediaries | 39,851 | 83,744 | 97,671 | 152,841 | |||||||||||||||||||||||||||||||||||||
Travel agency global distribution systems | 2,687 | 11,098 | 9,177 | 20,712 | |||||||||||||||||||||||||||||||||||||
Total room revenues from owned hotels (1)
|
$ | 219,851 | $ | 311,614 | $ | 474,315 | $ | 578,660 |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
1-6 nights | $ | 60,491 | $ | 121,052 | $ | 145,085 | $ | 222,476 | |||||||||||||||||||||||||||
7-29 nights | 44,170 | 63,867 | 99,001 | 118,967 | |||||||||||||||||||||||||||||||
30+ nights | 115,190 | 126,695 | 230,229 | 237,217 | |||||||||||||||||||||||||||||||
Total room revenues from owned hotels (1)
|
$ | 219,851 | $ | 311,614 | $ | 474,315 | $ | 578,660 |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Management fees | $ | 208 | $ | 367 | $ | 443 | $ | 660 | |||||||||||||||||||||||||||
Franchise fees | 1,010 | 1,080 | 2,054 | 2,012 | |||||||||||||||||||||||||||||||
Indirect reimbursements (system service fees) | 1,157 | 1,400 | 2,347 | 2,584 | |||||||||||||||||||||||||||||||
Direct reimbursements | 2,288 | 3,126 | 4,888 | 6,037 | |||||||||||||||||||||||||||||||
Total revenues from franchised and managed hotels | $ | 4,663 | $ | 5,973 | $ | 9,732 | $ | 11,293 |
Outstanding Contract Liabilities | Outstanding Contract Liabilities as of January 1, 2020 Recognized as Revenue | ||||||||||
As of June 30, 2020 | $ | 19,283 | |||||||||
As of January 1, 2020 | 16,231 | ||||||||||
For the three months ended June 30, 2020 | $ | 559 | |||||||||
For the six months ended June 30, 2020 | $ | 10,732 |
Three Months Ended June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||
Owned hotels | $ | 226,170 | $ | 317,684 | $ | 487,402 | $ | 590,033 | |||||||||||||||||||||||||||
Franchise and management (1)
|
1,897 | 2,400 | 3,959 | 4,442 | |||||||||||||||||||||||||||||||
Total segment revenues | 228,067 | 320,084 | 491,361 | 594,475 | |||||||||||||||||||||||||||||||
Corporate and other (2)
|
18,636 | 19,704 | 38,628 | 39,218 | |||||||||||||||||||||||||||||||
Other revenues from franchised and managed properties (3)
|
3,445 | 4,526 | 7,235 | 8,621 | |||||||||||||||||||||||||||||||
Intersegment eliminations (4)
|
(19,314) | (20,657) | (40,089) | (40,988) | |||||||||||||||||||||||||||||||
Total | $ | 230,834 | $ | 323,657 | $ | 497,135 | $ | 601,326 | |||||||||||||||||||||||||||
Income (loss) from operations: | |||||||||||||||||||||||||||||||||||
Owned hotels | $ | 25,311 | $ | 104,653 | $ | 73,862 | $ | 174,348 | |||||||||||||||||||||||||||
Franchise and management (1)
|
1,897 | 2,400 | 3,959 | 4,442 | |||||||||||||||||||||||||||||||
Total segment income from operations | 27,208 | 107,053 | 77,821 | 178,790 | |||||||||||||||||||||||||||||||
Corporate and other (2)
|
(8,073) | (6,132) | (15,926) | (13,364) | |||||||||||||||||||||||||||||||
Other expenses from franchised and managed properties, net (3)
|
(638) | (470) | (1,055) | (1,022) | |||||||||||||||||||||||||||||||
Total | $ | 18,497 | $ | 100,451 | $ | 60,840 | $ | 164,404 |
June 30, 2020 | December 31, 2019 | ||||||||||
Assets: | |||||||||||
Owned hotels | $ | 3,732,706 | $ | 3,661,609 | |||||||
Franchise and management | 13,369 | 14,576 | |||||||||
Total segment assets | 3,746,075 | 3,676,185 | |||||||||
Corporate and other | 644,382 | 397,568 | |||||||||
Intersegment eliminations | (42,218) | (43,157) | |||||||||
Total | $ | 4,348,239 | $ | 4,030,596 |
Six Months Ended
June 30, |
|||||||||||||||||
2020 | 2019 | ||||||||||||||||
Capital Expenditures: | |||||||||||||||||
Owned hotels | $ | 104,658 | $ | 112,294 | |||||||||||||
Corporate and other | 651 | 628 | |||||||||||||||
Total | $ | 105,309 | $ | 112,922 |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Operating lease costs | $ | 769 | $ | 770 | $ | 1,538 | $ | 1,538 | |||||||||||||||||||||||||||
Finance lease costs | 80 | 61 | 146 | 122 | |||||||||||||||||||||||||||||||
Total lease costs | $ | 849 | $ | 831 | $ | 1,684 | $ | 1,660 |
June 30, 2020 | December 31, 2019 | |||||||||||||
Right-of-use assets: | ||||||||||||||
Operating(1)
|
$ | 3,719 | $ | 4,863 | ||||||||||
Finance(2)
|
4,415 | 3,979 | ||||||||||||
Lease liabilities: | ||||||||||||||
Operating(3)
|
11,545 | 12,590 | ||||||||||||
Finance | 3,767 | 3,379 |
Years Ending December 31, | Operating Leases | Finance Leases | |||||||||||||||
Remainder of 2020 | $ | 1,460 | $ | 307 | |||||||||||||
2021 | 2,220 | 738 | |||||||||||||||
2022 | 806 | 397 | |||||||||||||||
2023 | 552 | 400 | |||||||||||||||
2024 | 503 | 402 | |||||||||||||||
2025 | 503 | 429 | |||||||||||||||
Thereafter | 77,091 | 2,671 | |||||||||||||||
Total | $ | 83,135 | $ | 5,344 | |||||||||||||
Total discounted lease liability | $ | 11,545 | $ | 3,767 | |||||||||||||
Difference between undiscounted cash flows and discounted cash flows | $ | 71,590 | $ | 1,577 | |||||||||||||
Weighted-average remaining lease term | 47 years | 11 years | |||||||||||||||
Weighted-average discount rate | 6.4 | % | 6.7 | % |
Unrecognized Compensation Expense Related to Outstanding Awards (in thousands) | Remaining Weighted-Average Amortization Period (in years) | ||||||||||
RSUs with service vesting conditions | $ | 8,080 | 1.6 | ||||||||
RSUs with market vesting conditions | 3,471 | 2.2 | |||||||||
Total unrecognized compensation expense | $ | 11,551 |
Service-Based Awards |
Performance-Based Awards -
Market Vesting |
||||||||||||||||||||||||||||||||||||||||||||||
Number of
RSUs (in thousands) |
Weighted-
Average Grant- Date Fair Value |
Number of
RSUs (in thousands) |
Weighted-
Average Grant- Date Fair Value |
||||||||||||||||||||||||||||||||||||||||||||
Outstanding at January 1, 2020 | 928 | $ | 16.77 | 255 | $ | 16.56 | |||||||||||||||||||||||||||||||||||||||||
Granted | 356 | $ | 12.37 | 290 | $ | 11.52 | |||||||||||||||||||||||||||||||||||||||||
Settled | (280) | $ | 17.73 | (46) | $ | 18.58 | |||||||||||||||||||||||||||||||||||||||||
Forfeited | (202) | $ | 16.80 | (105) | $ | 15.23 | |||||||||||||||||||||||||||||||||||||||||
Outstanding at June 30, 2020 | 802 | $ | 14.47 | 394 | $ | 12.97 | |||||||||||||||||||||||||||||||||||||||||
Vested at June 30, 2020 | 132 | $ | 15.83 | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
Nonvested at June 30, 2020 | 670 | $ | 14.21 | 394 | $ | 12.97 |
Expected holding period | 2.92 years | ||||
Risk–free rate of return | 1.43 | % | |||
Expected dividend yield | 7.01 | % |
June 30,
2020 |
December 31,
2019 |
||||||||||
ASSETS | |||||||||||
PROPERTY AND EQUIPMENT - Net of accumulated depreciation of $1,454,959 and $1,372,595
|
$ | 3,499,562 | $ | 3,506,020 | |||||||
CASH AND CASH EQUIVALENTS | 606,680 | 296,134 | |||||||||
RENTS RECEIVABLE FROM EXTENDED STAY AMERICA, INC. (Note 10) | 13,056 | 1,572 | |||||||||
DEFERRED RENTS RECEIVABLE FROM EXTENDED STAY AMERICA, INC. (Note 10) | 33,950 | 28,917 | |||||||||
INTANGIBLE ASSETS - Net of accumulated amortization of $1,380 and $763
|
9,096 | 9,590 | |||||||||
GOODWILL | 44,012 | 44,012 | |||||||||
OTHER ASSETS | 20,942 | 21,209 | |||||||||
TOTAL ASSETS | $ | 4,227,298 | $ | 3,907,454 | |||||||
LIABILITIES AND EQUITY | |||||||||||
LIABILITIES: | |||||||||||
Term loan facility payable - Net of unamortized deferred financing costs and debt discount
of $10,174 and $10,993
|
$ | 616,003 | $ | 618,338 | |||||||
Senior notes payable - Net of unamortized deferred financing costs and debt discount
of $32,758 and $35,702
|
2,017,242 | 2,014,298 | |||||||||
Revolving credit facility | 350,000 | — | |||||||||
Finance lease liabilities | 3,767 | 3,379 | |||||||||
Unearned rental revenues from Extended Stay America, Inc. (Note 10) | 70,528 | 38,770 | |||||||||
Due to Extended Stay America, Inc., net (Note 10) | 7,261 | 11,838 | |||||||||
Accounts payable and accrued liabilities | 73,318 | 71,453 | |||||||||
Deferred tax liabilities | 11 | 11 | |||||||||
Total liabilities | 3,138,130 | 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, 177,482,082 and 179,483,397 shares issued and outstanding
|
4,280 | 4,300 | |||||||||
Additional paid in capital | 1,051,560 | 1,050,740 | |||||||||
Preferred stock—no par value, $1,000 liquidation value, 125 shares authorized, issued and outstanding
|
73 | 73 | |||||||||
Retained earnings | 34,426 | 93,424 | |||||||||
Accumulated other comprehensive (loss) income | (1,171) | 830 | |||||||||
Total equity | 1,089,168 | 1,149,367 | |||||||||
TOTAL LIABILITIES AND EQUITY | $ | 4,227,298 | $ | 3,907,454 |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
REVENUES - Rental revenues from Extended Stay America, Inc. (Note 10) | $ | 119,486 | $ | 118,102 | $ | 238,676 | $ | 236,107 | |||||||||||||||||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||||||||||||||||
Hotel operating expenses | 23,289 | 21,937 | 47,816 | 43,245 | |||||||||||||||||||||||||||||||
General and administrative expenses (Note 10) | 3,769 | 3,544 | 7,936 | 7,525 | |||||||||||||||||||||||||||||||
Depreciation and amortization | 50,127 | 48,132 | 99,715 | 95,999 | |||||||||||||||||||||||||||||||
Impairment of long-lived assets | 675 | — | 675 | — | |||||||||||||||||||||||||||||||
Total operating expenses | 77,860 | 73,613 | 156,142 | 146,769 | |||||||||||||||||||||||||||||||
OTHER INCOME | — | — | — | 15 | |||||||||||||||||||||||||||||||
INCOME FROM OPERATIONS | 41,626 | 44,489 | 82,534 | 89,353 | |||||||||||||||||||||||||||||||
OTHER NON-OPERATING (INCOME) EXPENSE | (245) | (134) | 315 | (273) | |||||||||||||||||||||||||||||||
INTEREST EXPENSE, NET | 33,197 | 30,267 | 65,625 | 60,201 | |||||||||||||||||||||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 8,674 | 14,356 | 16,594 | 29,425 | |||||||||||||||||||||||||||||||
INCOME TAX EXPENSE | 9 | 7 | 11 | 10 | |||||||||||||||||||||||||||||||
NET INCOME | $ | 8,665 | $ | 14,349 | $ | 16,583 | $ | 29,415 | |||||||||||||||||||||||||||
NET INCOME PER ESH HOSPITALITY, INC. COMMON SHARE: | |||||||||||||||||||||||||||||||||||
Class A - basic | $ | 0.02 | $ | 0.03 | $ | 0.04 | $ | 0.07 | |||||||||||||||||||||||||||
Class A - diluted | $ | 0.02 | $ | 0.03 | $ | 0.04 | $ | 0.07 | |||||||||||||||||||||||||||
Class B - basic | $ | 0.02 | $ | 0.03 | $ | 0.04 | $ | 0.07 | |||||||||||||||||||||||||||
Class B - diluted | $ | 0.02 | $ | 0.03 | $ | 0.04 | $ | 0.07 | |||||||||||||||||||||||||||
WEIGHTED-AVERAGE ESH HOSPITALITY, INC. COMMON SHARES OUTSTANDING: | |||||||||||||||||||||||||||||||||||
Class A - basic | 250,494 | 250,494 | 250,494 | 250,494 | |||||||||||||||||||||||||||||||
Class A - diluted | 250,494 | 250,494 | 250,494 | 250,494 | |||||||||||||||||||||||||||||||
Class B - basic | 177,551 | 188,450 | 177,771 | 188,399 | |||||||||||||||||||||||||||||||
Class B - diluted | 177,844 | 188,813 | 178,008 | 188,695 |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
NET INCOME | $ | 8,665 | $ | 14,349 | $ | 16,583 | $ | 29,415 | |||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME: | |||||||||||||||||||||||||||||||||||
INTEREST RATE CASH FLOW HEDGE GAIN (LOSS), NET OF TAX OF $0, $1, $1, $2
|
53 | (2,327) | (2,001) | (4,014) | |||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME | $ | 8,718 | $ | 12,022 | $ | 14,582 | $ | 25,401 |
Common Stock | Preferred Stock |
Additional
Paid in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Income |
Total
Equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A
Shares |
Class B
Shares |
Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - April 1, 2019 | 250,494 | 188,403 | $ | 4,389 | 125 | $ | 73 | $ | 1,091,456 | $ | 63,185 | $ | 4,102 | $ | 1,163,205 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 14,349 | — | 14,349 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate cash flow hedge loss, net of tax | — | — | — | — | — | — | — | (2,327) | (2,327) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common distributions - $0.14 per Class A and Class B common share
|
— | — | — | — | — | — | (61,611) | — | (61,611) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred distributions | — | — | — | — | — | — | (4) | — | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | 9 | — | — | — | 389 | — | — | 389 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - June 30, 2019 | 250,494 | 188,412 | $ | 4,389 | 125 | $ | 73 | $ | 1,091,845 | $ | 15,919 | $ | 1,775 | $ | 1,114,001 |
Common Stock | Preferred Stock |
Additional
Paid in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Loss |
Total
Equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A
Shares |
Class B
Shares |
Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - April 1, 2020 | 250,494 | 177,466 | $ | 4,280 | 125 | $ | 73 | $ | 1,051,076 | $ | 30,043 | $ | (1,224) | $ | 1,084,248 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 8,665 | — | 8,665 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate cash flow hedge gain, net of tax | — | — | — | — | — | — | — | 53 | 53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common distributions - $0.01 per Class A and Class B common share
|
— | — | — | — | — | — | (4,278) | — | (4,278) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred distributions | — | — | — | — | — | — | (4) | — | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | 16 | — | — | — | 484 | — | — | 484 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - June 30, 2020 | 250,494 | 177,482 | $ | 4,280 | 125 | $ | 73 | $ | 1,051,560 | $ | 34,426 | $ | (1,171) | $ | 1,089,168 |
Common Stock | Preferred Stock |
Additional
Paid in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Income |
Total
Equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A
Shares |
Class B
Shares |
Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - January 1, 2019 | 250,494 | 188,219 | $ | 4,387 | 125 | $ | 73 | $ | 1,090,809 | $ | 114,096 | $ | 5,789 | $ | 1,215,154 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 29,415 | — | 29,415 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate cash flow hedge loss, net of tax | — | — | — | — | — | — | — | (4,014) | (4,014) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common distributions - $0.29 per Class A and Class B common share
|
— | — | — | — | — | — | (127,584) | — | (127,584) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred distributions | — | — | — | — | — | — | (8) | — | (8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | 193 | 2 | — | — | 1,036 | — | — | 1,038 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - June 30, 2019 | 250,494 | 188,412 | $ | 4,389 | 125 | $ | 73 | $ | 1,091,845 | $ | 15,919 | $ | 1,775 | $ | 1,114,001 |
Common Stock | Preferred Stock |
Additional
Paid in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive (Loss) Income |
Total
Equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A
Shares |
Class B
Shares |
Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - January 1, 2020 | 250,494 | 179,483 | $ | 4,300 | 125 | $ | 73 | $ | 1,050,740 | $ | 93,424 | $ | 830 | $ | 1,149,367 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 16,583 | — | 16,583 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate cash flow hedge loss, net of tax | — | — | — | — | — | — | — | (2,001) | (2,001) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of Class B common stock | — | (2,237) | (22) | — | — | — | (11,384) | — | (11,406) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common distributions - $0.15 per Class A and Class B common share
|
— | — | — | — | — | — | (64,189) | — | (64,189) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred distributions | — | — | — | — | — | — | (8) | — | (8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | 236 | 2 | — | — | 820 | — | — | 822 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE - June 30, 2020 | 250,494 | 177,482 | $ | 4,280 | 125 | $ | 73 | $ | 1,051,560 | $ | 34,426 | $ | (1,171) | $ | 1,089,168 |
Six Months Ended
June 30, |
|||||||||||||||||
2020 | 2019 | ||||||||||||||||
OPERATING ACTIVITIES: | |||||||||||||||||
Net income | $ | 16,583 | $ | 29,415 | |||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 99,715 | 95,999 | |||||||||||||||
Foreign currency transaction loss (gain) | 315 | (273) | |||||||||||||||
Amortization of deferred financing costs and debt discount | 4,046 | 3,939 | |||||||||||||||
Loss on disposal of property and equipment | 4,979 | 3,377 | |||||||||||||||
Impairment of long-lived assets | 675 | — | |||||||||||||||
Equity-based compensation | 264 | 277 | |||||||||||||||
Changes in assets and liabilities: | |||||||||||||||||
Deferred rents receivable from Extended Stay America, Inc. | (5,033) | (10,288) | |||||||||||||||
Due to Extended Stay America, Inc., net | (4,867) | (7,764) | |||||||||||||||
Other assets | (2,819) | (5,111) | |||||||||||||||
Unearned rental revenues/rents receivable from Extended Stay America, Inc., net | 20,274 | 67,646 | |||||||||||||||
Accounts payable and accrued liabilities | 7,027 | 8,140 | |||||||||||||||
Net cash provided by operating activities | 141,159 | 185,357 | |||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||
Purchases of property and equipment | (61,145) | (80,173) | |||||||||||||||
Development in process payments | (41,537) | (21,841) | |||||||||||||||
Payment for intangible assets | (455) | (6,296) | |||||||||||||||
Proceeds from insurance and related recoveries | 987 | 613 | |||||||||||||||
Net cash used in investing activities | (102,150) | (107,697) | |||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||
Principal payments on term loan facility | (3,154) | (5,683) | |||||||||||||||
Proceeds from revolving credit facility | 350,000 | — | |||||||||||||||
Payments of deferred financing costs | (17) | — | |||||||||||||||
Principal payments on finance leases | (69) | (58) | |||||||||||||||
Repurchase of Class B common stock | (11,406) | — | |||||||||||||||
Issuance of Class B common stock related to issuance of Paired Shares | 762 | 1,248 | |||||||||||||||
Common distributions | (64,571) | (127,582) | |||||||||||||||
Preferred distributions | (8) | (8) | |||||||||||||||
Net cash provided by (used in) financing activities | 271,537 | (132,083) | |||||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 310,546 | (54,423) | |||||||||||||||
CASH AND CASH EQUIVALENTS - Beginning of period | 296,134 | 178,538 | |||||||||||||||
CASH AND CASH EQUIVALENTS - End of period | $ | 606,680 | $ | 124,115 | |||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||||||||||||
Cash payments for interest, excluding modification, prepayment and other penalties, net of capitalized interest of $1,643 and $751
|
$ | 63,687 | $ | 57,527 | |||||||||||||
Cash payments for income taxes, net of refunds of $181 and $0
|
$ | 290 | $ | 606 | |||||||||||||
Operating cash payments for finance leases | $ | 118 | $ | 122 | |||||||||||||
Operating cash payments for operating leases | $ | 385 | $ | 354 | |||||||||||||
NONCASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||||||||
Capital expenditures included in due to/from Extended Stay America, Inc. and accounts payable and accrued liabilities | $ | 18,857 | $ | 26,920 | |||||||||||||
Additions to finance lease right-of-use assets and liabilities | $ | 457 | $ | 109 | |||||||||||||
Common distributions included in accounts payable and accrued liabilities | $ | 385 | $ | 794 | |||||||||||||
Net receivable (payable) related to RSUs not yet settled or issued included in due to/from Extended Stay America, Inc. | $ | 83 | $ | (131) |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||||||||||||||
Net income | $ | 8,665 | $ | 14,349 | $ | 16,583 | $ | 29,415 | |||||||||||||||||||||||||||
Less preferred dividends | (4) | (4) | (8) | (8) | |||||||||||||||||||||||||||||||
Net income available to ESH Hospitality, Inc. common shareholders | $ | 8,661 | $ | 14,345 | $ | 16,575 | $ | 29,407 | |||||||||||||||||||||||||||
Class A: | |||||||||||||||||||||||||||||||||||
Net income available to ESH Hospitality, Inc. Class A common
shareholders - basic |
$ | 5,065 | $ | 8,186 | $ | 9,689 | $ | 16,783 | |||||||||||||||||||||||||||
Amounts attributable to ESH Hospitality, Inc. Class B
shareholders assuming conversion |
(3) | (7) | (5) | (12) | |||||||||||||||||||||||||||||||
Net income available to ESH Hospitality, Inc. Class A common
shareholders - diluted |
$ | 5,062 | $ | 8,179 | $ | 9,684 | $ | 16,771 | |||||||||||||||||||||||||||
Class B: | |||||||||||||||||||||||||||||||||||
Net income available to ESH Hospitality, Inc. Class B common
shareholders - basic |
$ | 3,596 | $ | 6,159 | $ | 6,886 | $ | 12,624 | |||||||||||||||||||||||||||
Amounts attributable to ESH Hospitality, Inc. Class B
shareholders assuming conversion |
3 | 7 | 5 | 12 | |||||||||||||||||||||||||||||||
Net income available to ESH Hospitality, Inc. Class B common
shareholders - diluted |
$ | 3,599 | $ | 6,166 | $ | 6,891 | $ | 12,636 | |||||||||||||||||||||||||||
Denominator: | |||||||||||||||||||||||||||||||||||
Class A: | |||||||||||||||||||||||||||||||||||
Weighted-average number of ESH Hospitality, Inc. Class A common
shares outstanding - basic and diluted |
250,494 | 250,494 | 250,494 | 250,494 | |||||||||||||||||||||||||||||||
Class B: | |||||||||||||||||||||||||||||||||||
Weighted-average number of ESH Hospitality, Inc. Class B common
shares outstanding - basic |
177,551 | 188,450 | 177,771 | 188,399 | |||||||||||||||||||||||||||||||
Dilutive securities | 293 | 363 | 237 | 296 | |||||||||||||||||||||||||||||||
Weighted-average number of ESH Hospitality, Inc. Class B common
shares outstanding - diluted |
177,844 | 188,813 | 178,008 | 188,695 | |||||||||||||||||||||||||||||||
Net income per ESH Hospitality, Inc. common share - Class A - basic | $ | 0.02 | $ | 0.03 | $ | 0.04 | $ | 0.07 | |||||||||||||||||||||||||||
Net income per ESH Hospitality, Inc. common share - Class A - diluted | $ | 0.02 | $ | 0.03 | $ | 0.04 | $ | 0.07 | |||||||||||||||||||||||||||
Net income per ESH Hospitality, Inc. common share - Class B - basic | $ | 0.02 | $ | 0.03 | $ | 0.04 | $ | 0.07 | |||||||||||||||||||||||||||
Net income per ESH Hospitality, Inc. common share - Class B - diluted | $ | 0.02 | $ | 0.03 | $ | 0.04 | $ | 0.07 | |||||||||||||||||||||||||||
June 30,
2020 |
December 31,
2019 |
||||||||||
Hotel properties: | |||||||||||
Land and site improvements (1)
|
$ | 1,242,113 | $ | 1,230,598 | |||||||
Building and improvements | 2,878,203 | 2,824,061 | |||||||||
Furniture, fixtures and equipment (2)
|
769,594 | 751,417 | |||||||||
Total hotel properties | 4,889,910 | 4,806,076 | |||||||||
Development in process (3)
|
63,611 | 70,864 | |||||||||
Other | 1,000 | 1,675 | |||||||||
Total cost | 4,954,521 | 4,878,615 | |||||||||
Less accumulated depreciation: | (1,454,959) | (1,372,595) | |||||||||
Property and equipment — net | $ | 3,499,562 | $ | 3,506,020 |
Opening Date | Location |
Number of
Hotels |
Number of Rooms | |||||||||||
December 2019 | Florida | 1 | 124 | |||||||||||
December 2019 | Arizona | 1 | 136 | |||||||||||
March 2020 | Florida | 1 | 120 | |||||||||||
April 2020 | South Carolina | 1 | 120 | |||||||||||
June 2020 | Georgia | 1 | 124 | |||||||||||
June 2020 | Texas | 1 | 124 |
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2020 | June 30, 2020 | ||||||||||||||||
Rental revenues | $ | 1,062 | $ | 1,763 | |||||||||||||
Total operating expenses | 1,070 | 1,657 | |||||||||||||||
(Loss) income before income tax expense | (8) | 106 |
June 30, 2020 | |||||||||||||||||||||||||||||
Gross
Carrying Amount |
Accumulated
Amortization |
Net
Book Value |
|||||||||||||||||||||||||||
Definite-lived intangible assets—software licenses | $ | 10,476 | $ | (1,380) | $ | 9,096 | |||||||||||||||||||||||
Goodwill | 44,012 | — | 44,012 | ||||||||||||||||||||||||||
Total intangible assets and goodwill | $ | 54,488 | $ | (1,380) | $ | 53,108 |
December 31, 2019 | |||||||||||||||||||||||||||||
Gross
Carrying Amount |
Accumulated
Amortization |
Net
Book Value |
|||||||||||||||||||||||||||
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 |
Years Ending December 31, | |||||
Remainder of 2020 | $ | 620 | |||
2021 | 1,240 | ||||
2022 | 1,240 | ||||
2023 | 1,240 | ||||
2024 | 1,240 | ||||
2025 | 1,240 | ||||
Thereafter | 2,276 | ||||
Total | $ | 9,096 |
Stated
Amount |
Carrying Amount | Unamortized Deferred Financing Costs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan | June 30, 2020 | December 31, 2019 | June 30, 2020 | December 31, 2019 | Stated Interest Rate | Maturity Date | ||||||||||||||||||||||||||||||||||||||||||||||||||
Term loan facility | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ESH REIT Term Facility | $ | 630,909 | $ | 624,359 |
(1)
|
$ | 627,368 |
(1)
|
$ | 8,356 | $ | 9,030 |
LIBOR (2) + 2.00%
|
9/18/2026 |
(3)
|
|||||||||||||||||||||||||||||||||||||||||
Senior notes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2025 Notes | 1,300,000 | 1,293,644 |
(4)
|
1,292,986 |
(4)
|
13,643 | 15,055 | 5.25% | 5/1/2025 | |||||||||||||||||||||||||||||||||||||||||||||||
2027 Notes | 750,000 | 750,000 | 750,000 | 12,759 | 13,633 | 4.63% | 10/1/2027 | |||||||||||||||||||||||||||||||||||||||||||||||||
Revolving credit facility | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ESH REIT Revolving Credit Facility | 350,000 | 350,000 | — | 2,339 |
(5)
|
2,606 |
(5)
|
LIBOR (2) + 2.00%
|
9/18/2024 | |||||||||||||||||||||||||||||||||||||||||||||||
Unsecured intercompany facility | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ESH REIT Intercompany Facility | 75,000 | — | — | — | — | 5.00% | 9/18/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,018,003 | $ | 2,670,354 | $ | 37,097 | $ | 40,324 | ||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Contractual interest, net (1)
|
$ | 31,361 | $ | 28,622 | $ | 62,451 | $ | 57,197 | |||||||||||||||||||||||||||
Amortization of deferred financing costs and debt discount | 2,024 | 1,969 | 4,046 | 3,939 | |||||||||||||||||||||||||||||||
Other costs (2)
|
57 | 359 | 319 | 714 | |||||||||||||||||||||||||||||||
Interest income | (245) | (683) | (1,191) | (1,649) | |||||||||||||||||||||||||||||||
Total | $ | 33,197 | $ | 30,267 | $ | 65,625 | $ | 60,201 |
(Accrued liabilities) other assets | Accumulated other comprehensive (loss) income, net of tax | Interest expense (income), net | |||||||||||||||||||||
As of June 30, 2020 | $ | (1,170) | $ | (1,171) |
(1)
|
||||||||||||||||||
As of December 31, 2019 | $ | 831 | $ | 830 |
(2)
|
||||||||||||||||||
For the three months ended June 30, 2020 | $ | 250 | |||||||||||||||||||||
For the three months ended June 30, 2019 | $ | (821) | |||||||||||||||||||||
For the six months ended June 30, 2020 | $ | (7) | |||||||||||||||||||||
For the six months ended June 30, 2019 | $ | (1,797) |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Fixed rental revenues | $ | 119,486 | $ | 118,005 | $ | 238,676 | $ | 236,010 | |||||||||||||||||||||||||||
Variable rental revenues(1)
|
— | 97 | — | 97 |
Years Ending
December 31,
|
|||||
Remainder of 2020 | $ | 234,900 | |||
2021 | 482,706 | ||||
2022 | 494,828 | ||||
2023 | 422,453 | ||||
Total | $ | 1,634,887 |
June 30,
2020 |
December 31,
2019 |
||||||||||
Leases: | |||||||||||
Rents receivable(1)
|
$ | 13,056 | $ | 1,572 | |||||||
Deferred rents receivable(2)
|
$ | 33,950 | $ | 28,917 | |||||||
Unearned rental revenues(1)
|
$ | (70,528) | $ | (38,770) | |||||||
Working capital and other: | |||||||||||
Ordinary working capital(3)
|
$ | (7,343) | $ | (12,160) | |||||||
Equity awards receivable(4)
|
82 | 322 | |||||||||
Total working capital and other, net(5)
|
$ | (7,261) | $ | (11,838) |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Operating lease costs | $ | 327 | $ | 327 | $ | 653 | $ | 652 | |||||||||||||||||||||||||||
Finance lease costs | 80 | 61 | 146 | 122 | |||||||||||||||||||||||||||||||
Total lease costs | $ | 407 | $ | 388 | $ | 799 | $ | 774 |
June 30, 2020 | December 31, 2019 | |||||||||||||
Right-of-use assets: | ||||||||||||||
Operating(1)
|
$ | 1,740 | $ | 2,084 | ||||||||||
Finance(2)
|
4,415 | 3,979 | ||||||||||||
Lease liabilities: | ||||||||||||||
Operating(3)
|
9,128 | 9,207 | ||||||||||||
Finance | 3,767 | 3,379 |
Years Ending December 31, | Operating Leases | Finance Leases | |||||||||||||||
Remainder of 2020 | $ | 392 | $ | 307 | |||||||||||||
2021 | 784 | 738 | |||||||||||||||
2022 | 806 | 397 | |||||||||||||||
2023 | 552 | 400 | |||||||||||||||
2024 | 503 | 402 | |||||||||||||||
2025 | 503 | 429 | |||||||||||||||
Thereafter | 77,091 | 2,671 | |||||||||||||||
Total | $ | 80,631 | $ | 5,344 | |||||||||||||
Total discounted lease liability | $ | 9,128 | $ | 3,767 | |||||||||||||
Difference between undiscounted cash flows and discounted cash flows | $ | 71,503 | $ | 1,577 | |||||||||||||
Weighted-average remaining lease term | 59 years | 11 years | |||||||||||||||
Weighted-average discount rate | 6.6 | % | 6.7 | % |
Date | Location |
Number of
Hotels |
Number of
Rooms |
Acquisition /
New-Build |
||||||||||
November 2019 | Florida | 1 | 121 | Acquisition | ||||||||||
December 2019 | Florida | 1 | 124 | New-Build | ||||||||||
December 2019 | Arizona | 1 | 136 | New-Build | ||||||||||
March 2020 | Florida | 1 | 120 | New-Build | ||||||||||
April 2020 | South Carolina | 1 | 120 | New-Build | ||||||||||
June 2020 | Georgia | 1 | 124 | New-Build | ||||||||||
June 2020 | Texas | 1 | 124 | New-Build |
Company-Owned Pipeline & Recently Opened Hotels as of June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Under Option | Pre-Development | Under Construction | Total Pipeline | Opened YTD | ||||||||||||||||||||||||||||||||||||||||||||||||||||
# Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | |||||||||||||||||||||||||||||||||||||||||||||||
— | — | 4 | 504 | 7 | 888 | 11 | 1,392 | 4 | 488 | |||||||||||||||||||||||||||||||||||||||||||||||
Third-Party Pipeline & Recently Opened Hotels as of June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments | Applications | Executed | Total Pipeline | Opened YTD | ||||||||||||||||||||||||||||||||||||||||||||||||||||
# Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | # Hotels | # Rooms | |||||||||||||||||||||||||||||||||||||||||||||||
27 | 3,348 | 4 | 464 | 27 | 3,184 | 58 | 6,996 | 2 | 205 | |||||||||||||||||||||||||||||||||||||||||||||||
Definitions | ||||||||
Under Option | Locations with a signed purchase and sale agreement | |||||||
Pre-Development | Land purchased, permitting and/or site work | |||||||
Under Construction | Hotel is under construction | |||||||
Commitments | Signed commitment to build or convert a certain number of hotels by a third party, generally associated with a prior portfolio sale | |||||||
Applications | Third party filed franchise application with deposit | |||||||
Executed | Franchise and development application approved, geography identified and deposits paid, various stages of pre-development and/or construction | |||||||
Percentage of 2020 Year to Date Total Revenues | |||||
• Room revenues. Room revenues relate to owned hotels and are driven primarily by ADR and occupancy. Pricing policy and customer mix are significant drivers of ADR. Room revenues and similar measures or metrics are presented and/or discussed with respect to owned hotels only as opposed to on a system-wide basis. System-wide hotels include all owned, franchised and/or managed hotels.
|
95.4% | ||||
• Other hotel revenues. Other hotel revenues relate to owned hotels and include ancillary revenues such as laundry revenues, vending commissions, additional housekeeping fees, purchased WiFi upgrades, parking revenues and pet charges. Occupancy and customer mix, as well as the number and percentage of guests that have longer-term stays, have been historical drivers of our other hotel revenues.
|
2.6% | ||||
• Franchise and management fees. Franchise and management fees include royalty and other fees charged to third party hotel owners for use of our brand name and hotel management services. The substantial majority of these fees are based on a percentage of revenues of the franchised or managed hotels.
|
0.5% | ||||
• Other revenues from franchised and managed properties. Other revenues from franchised and managed properties include the direct reimbursement of specific costs, such as on-site personnel, incremental reservation costs and other distribution costs, incurred by us for which we are reimbursed on a dollar-for-dollar basis by third party hotel owners. Additionally, these revenues include fees charged, based on a percentage of revenue of the franchised hotel, as reimbursement for indirect costs incurred by us associated with certain shared system-wide platforms (i.e., system services), such as marketing, technology infrastructure, central reservations, national sales and revenue management systems.
|
1.5% |
Percentage of 2020 Year to Date Total Operating Expenses | |||||
• Hotel operating expenses. Hotel operating expenses relate to owned hotels and have both fixed and variable components. Operating expenses that are relatively fixed include personnel expense, real estate tax expense and property insurance premiums. Occupancy is a key driver of expenses that have a high degree of variability, such as housekeeping services and amenity costs. Other variable expenses include marketing costs, reservation costs, property insurance claims and repairs and maintenance expense.
|
63.9% | ||||
• General and administrative expenses. General and administrative expenses include expenses associated with corporate overhead. Costs consist primarily of compensation expense of our corporate staff, including equity-based compensation and severance costs, and professional fees, including audit, tax and consulting fees, legal fees and legal settlement costs.
|
10.8% | ||||
• Depreciation and amortization. Depreciation and amortization relates primarily to the acquisition and usage of hotels and other property and equipment, including capital expenditures incurred with respect to renovations and other capital expenditures.
|
23.3% | ||||
• Impairment of long-lived assets. Impairment of long-lived assets is a charge recognized when events and circumstances indicate that the carrying value of a real estate asset, including an individual hotel asset or a group of hotel assets, may not be recoverable. The estimation and evaluation of future cash flows, which is a key factor in determining the amount and/or timing of impairment charges, in particular the holding period for real estate asset composition and/or concentration within real estate portfolios, relies on judgments and assumptions regarding holding period, current and future operating and economic performance and current and future market conditions. It is possible that such judgments and/or estimates will change; if this occurs, we may recognize additional impairment charges reflecting either changes in estimate, circumstance or the estimated market value of our assets.
|
0.2% | ||||
• Other expenses from franchised and managed properties. Other expenses from franchised and managed properties include specific costs, such as on-site hotel personnel expense, incremental reservation costs and other distribution costs, incurred by us in the delivery of services for which we are reimbursed on a dollar-for-dollar basis. Additionally, these expenses include costs associated with shared system-wide platforms (i.e., system services), such as marketing, technology infrastructure, central reservations, national sales and revenue management systems for which we are reimbursed over time through system service (i.e., program) fees.
|
1.8% | ||||
Percentage of 2020 Year to Date Total Operating Expenses | |||||
• Hotel operating expenses. ESH REIT’s hotel operating expenses include expenses directly related to hotel ownership, such as real estate tax expense, property insurance premiums and loss on disposal of certain capital assets.
|
30.6% | ||||
• General and administrative expenses. General and administrative expenses include overhead expenses incurred directly by ESH REIT and certain administrative service costs reimbursed to the Corporation.
|
5.1% | ||||
• Depreciation and amortization. Depreciation and amortization relate primarily to the acquisition and usage of hotels and other property and equipment, including capital expenditures incurred with respect to renovations and other capital expenditures.
|
63.9% | ||||
• Impairment of long-lived assets. Impairment of long-lived assets is a charge recognized when events and circumstances indicate that the carrying value of a real estate asset, including an individual hotel asset or a group of hotel assets, may not be recoverable. The estimation and evaluation of future cash flows, which is a key factor in determining the amount and/or timing of impairment charges, in particular the holding period for real estate asset composition and/or concentration within real estate portfolios, relies on judgments and assumptions regarding holding period, current and future operating and economic performance and current and future market conditions. It is possible that such judgments and/or estimates will change; if this occurs, we may recognize additional impairment charges reflecting either changes in estimate, circumstance or the estimated market value of our assets.
|
0.4% | ||||
Three Months Ended
June 30, |
|||||||||||||||||||||||||||||
2020 | 2019 | Change ($) | Change (%) | ||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||
Room revenues | $ | 219,851 | $ | 311,614 | $ | (91,763) | (29.4)% | ||||||||||||||||||||||
Other hotel revenues | 6,320 | 6,070 | 250 | 4.1% | |||||||||||||||||||||||||
Franchise and management fees | 1,218 | 1,447 | (229) | (15.8)% | |||||||||||||||||||||||||
227,389 | 319,131 | (91,742) | (28.7)% | ||||||||||||||||||||||||||
Other revenues from franchised and managed properties | 3,445 | 4,526 | (1,081) | (23.9)% | |||||||||||||||||||||||||
Total revenues | 230,834 | 323,657 | (92,823) | (28.7)% | |||||||||||||||||||||||||
Operating Expenses: | |||||||||||||||||||||||||||||
Hotel operating expenses | 133,435 | 146,907 | (13,472) | (9.2)% | |||||||||||||||||||||||||
General and administrative expenses | 23,103 | 22,287 | 816 | 3.7% | |||||||||||||||||||||||||
Depreciation and amortization | 51,042 | 49,017 | 2,025 | 4.1% | |||||||||||||||||||||||||
Impairment of long-lived assets | 675 | — | 675 | n/a | |||||||||||||||||||||||||
208,255 | 218,211 | (9,956) | (4.6)% | ||||||||||||||||||||||||||
Other expenses from franchised and managed properties | 4,083 | 4,996 | (913) | (18.3)% | |||||||||||||||||||||||||
Total operating expenses | 212,338 | 223,207 | (10,869) | (4.9)% | |||||||||||||||||||||||||
Other income | 1 | 1 | — | 0.0% | |||||||||||||||||||||||||
Income from operations | 18,497 | 100,451 | (81,954) | (81.6)% | |||||||||||||||||||||||||
Other non-operating income | (302) | (171) | (131) | 76.6% | |||||||||||||||||||||||||
Interest expense, net | 33,621 | 29,766 | 3,855 | 13.0% | |||||||||||||||||||||||||
Income before income tax (benefit) expense | (14,822) | 70,856 | (85,678) | (120.9)% | |||||||||||||||||||||||||
Income tax (benefit) expense | (6,052) | 11,198 | (17,250) | (154.0)% | |||||||||||||||||||||||||
Net (loss) income | (8,770) | 59,658 | (68,428) | (114.7)% | |||||||||||||||||||||||||
Net income attributable to noncontrolling interests(1)
|
(3,593) | (6,161) | 2,568 | (41.7)% | |||||||||||||||||||||||||
Net (loss) income attributable to Extended Stay America, Inc. common shareholders | $ | (12,363) | $ | 53,497 | $ | (65,860) | (123.1)% | ||||||||||||||||||||||
Three Months Ended
June 30, |
|||||||||||||||||||||||
2020 | 2019 | Change | |||||||||||||||||||||
Number of hotels (as of June 30) | 561 | 554 | 7 | ||||||||||||||||||||
Number of rooms (as of June 30) | 62,421 | 61,552 | 869 | ||||||||||||||||||||
Occupancy | 68.7% | 79.9% | (1,120) bps | ||||||||||||||||||||
ADR | $56.68 | $69.65 | (18.6)% | ||||||||||||||||||||
RevPAR | $38.96 | $55.63 | (30.0)% | ||||||||||||||||||||
Six Months Ended
June 30, |
|||||||||||||||||||||||||||||
2020 | 2019 | Change ($) | Change (%) | ||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||
Room revenues | $ | 474,315 | $ | 578,660 | $ | (104,345) | (18.0)% | ||||||||||||||||||||||
Other hotel revenues | 13,088 | 11,373 | 1,715 | 15.1% | |||||||||||||||||||||||||
Franchise and management fees | 2,497 | 2,672 | (175) | (6.5)% | |||||||||||||||||||||||||
489,900 | 592,705 | (102,805) | (17.3)% | ||||||||||||||||||||||||||
Other revenues from franchised and managed properties | 7,235 | 8,621 | (1,386) | (16.1)% | |||||||||||||||||||||||||
Total revenues | 497,135 | 601,326 | (104,191) | (17.3)% | |||||||||||||||||||||||||
Operating Expenses: | |||||||||||||||||||||||||||||
Hotel operating expenses | 278,730 | 284,198 | (5,468) | (1.9)% | |||||||||||||||||||||||||
General and administrative expenses | 47,041 | 45,314 | 1,727 | 3.8% | |||||||||||||||||||||||||
Depreciation and amortization | 101,562 | 97,795 | 3,767 | 3.9% | |||||||||||||||||||||||||
Impairment of long-lived assets | 675 | — | 675 | n/a | |||||||||||||||||||||||||
428,008 | 427,307 | 701 | 0.2% | ||||||||||||||||||||||||||
Other expenses from franchised and managed properties | 8,290 | 9,643 | (1,353) | (14.0)% | |||||||||||||||||||||||||
Total operating expenses | 436,298 | 436,950 | (652) | (0.1)% | |||||||||||||||||||||||||
Other income | 3 | 28 | (25) | (89.3)% | |||||||||||||||||||||||||
Income from operations | 60,840 | 164,404 | (103,564) | (63.0)% | |||||||||||||||||||||||||
Other non-operating expense (income) | 401 | (349) | 750 | (214.9)% | |||||||||||||||||||||||||
Interest expense, net | 66,306 | 59,370 | 6,936 | 11.7% | |||||||||||||||||||||||||
Income before income tax (benefit) expense | (5,867) | 105,383 | (111,250) | (105.6)% | |||||||||||||||||||||||||
Income tax (benefit) expense | (4,942) | 17,321 | (22,263) | (128.5)% | |||||||||||||||||||||||||
Net (loss) income | (925) | 88,062 | (88,987) | (101.1)% | |||||||||||||||||||||||||
Net income attributable to noncontrolling interests(1)
|
(6,884) | (12,631) | 5,747 | (45.5)% | |||||||||||||||||||||||||
Net (loss) income attributable to Extended Stay America, Inc. common shareholders | $ | (7,809) | $ | 75,431 | $ | (83,240) | (110.4)% | ||||||||||||||||||||||
Six Months Ended
June 30, |
|||||||||||||||||||||||
2020 | 2019 | Change | |||||||||||||||||||||
Number of hotels (as of June 30) | 561 | 554 | 7 | ||||||||||||||||||||
Number of rooms (as of June 30) | 62,421 | 61,552 | 869 | ||||||||||||||||||||
Occupancy | 70.1% | 75.7% | (560) bps | ||||||||||||||||||||
ADR | $60.07 | $68.64 | (12.5)% | ||||||||||||||||||||
RevPAR | $42.09 | $51.94 | (19.0)% | ||||||||||||||||||||
Three Months Ended
June 30, |
|||||||||||||||||||||||||||||
2020 | 2019 | Change ($) | Change (%) | ||||||||||||||||||||||||||
Revenues- Rental revenues from Extended Stay America, Inc.
|
$ | 119,486 | $ | 118,102 | $ | 1,384 | 1.2% | ||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||
Hotel operating expenses | 23,289 | 21,937 | 1,352 | 6.2% | |||||||||||||||||||||||||
General and administrative expenses | 3,769 | 3,544 | 225 | 6.3% | |||||||||||||||||||||||||
Depreciation and amortization | 50,127 | 48,132 | 1,995 | 4.1% | |||||||||||||||||||||||||
Impairment of long-lived assets | 675 | — | 675 | n/a | |||||||||||||||||||||||||
Total operating expenses | 77,860 | 73,613 | 4,247 | 5.8% | |||||||||||||||||||||||||
Income from operations | 41,626 | 44,489 | (2,863) | (6.4)% | |||||||||||||||||||||||||
Other non-operating income | (245) | (134) | (111) | (82.8)% | |||||||||||||||||||||||||
Interest expense, net | 33,197 | 30,267 | 2,930 | 9.7% | |||||||||||||||||||||||||
Income before income tax expense | 8,674 | 14,356 | (5,682) | (39.6)% | |||||||||||||||||||||||||
Income tax expense | 9 | 7 | 2 | 28.6% | |||||||||||||||||||||||||
Net income | $ | 8,665 | $ | 14,349 | $ | (5,684) | (39.6)% |
Six Months Ended
June 30, |
|||||||||||||||||||||||||||||
2020 | 2019 | Change ($) | Change (%) | ||||||||||||||||||||||||||
Revenues- Rental revenues from Extended Stay America, Inc.
|
$ | 238,676 | $ | 236,107 | $ | 2,569 | 1.1% | ||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||
Hotel operating expenses | 47,816 | 43,245 | 4,571 | 10.6% | |||||||||||||||||||||||||
General and administrative expenses | 7,936 | 7,525 | 411 | 5.5% | |||||||||||||||||||||||||
Depreciation and amortization | 99,715 | 95,999 | 3,716 | 3.9% | |||||||||||||||||||||||||
Impairment of long-lived assets | 675 | — | 675 | n/a | |||||||||||||||||||||||||
Total operating expenses | 156,142 | 146,769 | 9,373 | 6.4% | |||||||||||||||||||||||||
Other income | — | 15 | (15) | (100.0)% | |||||||||||||||||||||||||
Income from operations | 82,534 | 89,353 | (6,819) | (7.6)% | |||||||||||||||||||||||||
Other non-operating expense (income) | 315 | (273) | 588 | 215.4% | |||||||||||||||||||||||||
Interest expense, net | 65,625 | 60,201 | 5,424 | 9.0% | |||||||||||||||||||||||||
Income before income tax expense | 16,594 | 29,425 | (12,831) | (43.6)% | |||||||||||||||||||||||||
Income tax expense | 11 | 10 | 1 | 10.0% | |||||||||||||||||||||||||
Net income | $ | 16,583 | $ | 29,415 | $ | (12,832) | (43.6)% |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Net (loss) income | $ | (8,770) | $ | 59,658 | $ | (925) | $ | 88,062 | |||||||||||||||||||||||||||
Income tax (benefit) expense | (6,052) | 11,198 | (4,942) | 17,321 | |||||||||||||||||||||||||||||||
Interest expense, net | 33,621 | 29,766 | 66,306 | 59,370 | |||||||||||||||||||||||||||||||
Other non-operating (income) expense | (302) | (171) | 401 | (349) | |||||||||||||||||||||||||||||||
Other income | (1) | (1) | (3) | (28) | |||||||||||||||||||||||||||||||
Impairment of long-lived assets | 675 | — | 675 | — | |||||||||||||||||||||||||||||||
Depreciation and amortization | 51,042 | 49,017 | 101,562 | 97,795 | |||||||||||||||||||||||||||||||
General and administrative expenses | 23,103 | 22,287 | 47,041 | 45,314 | |||||||||||||||||||||||||||||||
Loss on disposal of assets (1)
|
1,636 | 2,001 | 4,979 | 3,377 | |||||||||||||||||||||||||||||||
Franchise and management fees | (1,218) | (1,447) | (2,497) | (2,672) | |||||||||||||||||||||||||||||||
System services loss, net | 638 | 470 | 1,055 | 1,022 | |||||||||||||||||||||||||||||||
Hotel Operating Profit | $ | 94,372 | $ | 172,778 | $ | 213,652 | $ | 309,212 | |||||||||||||||||||||||||||
Room revenues | $ | 219,851 | $ | 311,614 | $ | 474,315 | $ | 578,660 | |||||||||||||||||||||||||||
Other hotel revenues | 6,320 | 6,070 | 13,088 | 11,373 | |||||||||||||||||||||||||||||||
Total room and other hotel revenues | $ | 226,171 | $ | 317,684 | $ | 487,403 | $ | 590,033 | |||||||||||||||||||||||||||
Hotel Operating Margin | 41.7 | % | 54.4 | % | 43.8 | % | 52.4 | % |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Net (loss) income | $ | (8,770) | $ | 59,658 | $ | (925) | $ | 88,062 | |||||||||||||||||||||||||||
Interest expense, net | 33,621 | 29,766 | 66,306 | 59,370 | |||||||||||||||||||||||||||||||
Income tax (benefit) expense | (6,052) | 11,198 | (4,942) | 17,321 | |||||||||||||||||||||||||||||||
Depreciation and amortization | 51,042 | 49,017 | 101,562 | 97,795 | |||||||||||||||||||||||||||||||
EBITDA | 69,841 | 149,639 | 162,001 | 262,548 | |||||||||||||||||||||||||||||||
Equity-based compensation | 1,864 | 2,147 | 2,990 | 4,255 | |||||||||||||||||||||||||||||||
Impairment of long-lived assets | 675 | — | 675 | — | |||||||||||||||||||||||||||||||
System services loss, net (1)
|
638 | — | 1,055 | — | |||||||||||||||||||||||||||||||
Other expense (2)
|
1,335 | 1,857 | 5,381 | 3,151 | |||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 74,353 | $ | 153,643 | $ | 172,102 | $ | 269,954 |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Net (loss) income per Extended Stay America, Inc. common share - diluted | $ | (0.07) | $ | 0.28 | $ | (0.04) | $ | 0.40 | |||||||||||||||||||||||||||
Net (loss) income attributable to Extended Stay America, Inc. common shareholders | $ | (12,363) | $ | 53,497 | $ | (7,809) | $ | 75,431 | |||||||||||||||||||||||||||
Noncontrolling interests attributable to Class B common shares of ESH REIT | 3,589 | 6,157 | 6,876 | 12,623 | |||||||||||||||||||||||||||||||
Real estate depreciation and amortization | 49,429 | 47,655 | 98,310 | 95,088 | |||||||||||||||||||||||||||||||
Impairment of long-lived assets | 675 | — | 675 | — | |||||||||||||||||||||||||||||||
Tax effect of adjustments to net (loss) income attributable to Extended Stay America, Inc. common shareholders | (10,822) | (7,482) | (12,430) | (14,882) | |||||||||||||||||||||||||||||||
FFO | 30,508 | 99,827 | 85,622 | 168,260 | |||||||||||||||||||||||||||||||
Adjusted FFO | $ | 30,508 | $ | 99,827 | $ | 85,622 | $ | 168,260 | |||||||||||||||||||||||||||
Adjusted FFO per Paired Share - diluted | $ | 0.17 | $ | 0.53 | $ | 0.48 | $ | 0.89 | |||||||||||||||||||||||||||
Weighted Average Paired Shares outstanding - diluted | 177,844 | 188,813 | 178,008 | 188,695 |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||
Net (loss) income per Extended Stay America, Inc. common share - diluted | $ | (0.07) | $ | 0.28 | $ | (0.04) | $ | 0.40 | ||||||||||||||||||||||||||||||
Net (loss) income attributable to Extended Stay America, Inc. common shareholders | $ | (12,363) | $ | 53,497 | $ | (7,809) | $ | 75,431 | ||||||||||||||||||||||||||||||
Noncontrolling interests attributable to Class B common shares of ESH REIT | 3,589 | 6,157 | 6,876 | 12,623 | ||||||||||||||||||||||||||||||||||
Paired Share (Loss) Income | (8,774) | 59,654 | (933) | 88,054 | ||||||||||||||||||||||||||||||||||
Impairment of long-lived assets | 675 | — | 675 | — | ||||||||||||||||||||||||||||||||||
System services loss, net(1)
|
638 | — | 1,055 | — | ||||||||||||||||||||||||||||||||||
Other expense(2)
|
1,335 | 1,857 | 5,381 | 3,151 | ||||||||||||||||||||||||||||||||||
Tax effect of adjustments to Paired Share (Loss) Income | (573) | (291) | (720) | (493) | ||||||||||||||||||||||||||||||||||
Adjusted Paired Share (Loss) Income | $ | (6,699) | $ | 61,220 | $ | 5,458 | $ | 90,712 | ||||||||||||||||||||||||||||||
Adjusted Paired Share (Loss) Income per Paired Share – diluted | $ | (0.04) | $ | 0.32 | $ | 0.03 | $ | 0.48 | ||||||||||||||||||||||||||||||
Weighted average Paired Shares outstanding – diluted | 177,551 | 188,813 | 178,008 | 188,695 |
Declaration Date | Record Date | Date Paid/Payable | ESH REIT Distribution | Corporation Distribution | Total Distribution | |||||||||||||||||||||||||||
2/26/2020 | 3/12/2020 | 3/26/2020 | $0.14 | $0.09 | $0.23 | |||||||||||||||||||||||||||
5/6/2020 | 5/21/2020 | 6/4/2020 | $0.01 | $— | $0.01 | |||||||||||||||||||||||||||
8/10/2020 | 8/25/2020 | 9/8/2020 | $0.01 | $— | $0.01 |
Six Months Ended June 30, | |||||||||||||||||||||||
2020 | 2019 | Change ($) | |||||||||||||||||||||
Cash provided by (used in): | |||||||||||||||||||||||
Operating activities | $ | 110,318 | $ | 204,097 | $ | (93,779) | |||||||||||||||||
Investing activities | (104,322) | (112,309) | 7,987 | ||||||||||||||||||||
Financing activities | 314,858 | (92,545) | 407,403 | ||||||||||||||||||||
Effects of changes in exchange rate on cash and cash equivalents | (78) | 61 | (139) | ||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | $ | 320,776 | $ | (696) | $ | 321,472 |
Six Months Ended June 30, | |||||||||||||||||||||||
2020 | 2019 | Change ($) | |||||||||||||||||||||
Cash provided by (used in): | |||||||||||||||||||||||
Operating activities | $ | 141,159 | $ | 185,357 | $ | (44,198) | |||||||||||||||||
Investing activities | (102,150) | (107,697) | 5,547 | ||||||||||||||||||||
Financing activities | 271,537 | (132,083) | 403,620 | ||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | $ | 310,546 | $ | (54,423) | $ | 364,969 |
Date of Filing | Plaintiff(s) | Defendant(s) | Court | ||||||||
March 27, 2018 | Tracy Reid, on behalf of himself, all others similarly situated | ESA Management, LLC | US District Court, Northern District of California | ||||||||
June 8, 2018 | Franisha Beasley and Stephanie Randall, individually and on behalf of others similarly situated | ESA Management, LLC | US District Court, Northern District of California | ||||||||
July 13, 2018 | Adrienne Liggins, individually and on behalf of others similarly situated and aggrieved | ESA Management, LLC, Extended Stay America - Anaheim Convention Center | US District Court, Northern District of California | ||||||||
July 13, 2018 | Bridget Liggins, individually and on behalf of others similarly situated and aggrieved | ESA Management, LLC | State of California, Orange County Superior Court | ||||||||
August 21, 2018 | Sandra Arizmendi, an individual, on behalf of the State of California, as private attorney general, and on behalf of all others similarly situated | ESA Management, LLC | US District Court, Northern District of California | ||||||||
January 18, 2019 | Lisa M. Sanchez, individually and on behalf of all others similarly situated | Extended Stay America, Inc. and ESA Management, LLC | State of California, Orange County Superior Court |
Exhibit
Number
|
Description | ||||
10.1 | Separation Agreement between Extended Stay America, Inc. and Ames Flynn, dated as of January 30, 2020 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36190) filed January 31, 2020, and incorporated by reference herein). Agreement between Extended Stay America, Inc. and Ames Flynn, dated as of January 30, 2020 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36190) filed January 31, 2020, and incorporated by reference herein). | ||||
10.2 | Credit Agreement, dated as of July 2, 2020, between Extended Stay America, Inc., as borrower, and ESH Hospitality, Inc., as lender (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36190) filed July 6, 2020, and incorporated by reference herein). | ||||
101.1.INS | XBRL Instance Document | ||||
101.1.SCH | XBRL Taxonomy Extension Schema Document | ||||
101.1.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.1.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||
101.1.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||||
101.1.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
EXTENDED STAY AMERICA, INC. | |||||||||||
Date: August 10, 2020 | By: | /s/ Bruce N. Haase | |||||||||
Bruce N. Haase | |||||||||||
President and Chief Executive Officer | |||||||||||
Date: August 10, 2020 | By: | /s/ Brian T. Nicholson | |||||||||
Brian T. Nicholson | |||||||||||
Chief Financial Officer | |||||||||||
ESH HOSPITALITY, INC. | |||||||||||
Date: August 10, 2020 | By: | /s/ Bruce N. Haase | |||||||||
Bruce N. Haase | |||||||||||
President and Chief Executive Officer | |||||||||||
Date: August 10, 2020 | By: | /s/ Brian T. Nicholson | |||||||||
Brian T. Nicholson | |||||||||||
Chief Financial Officer |
1 Year Extended Stay America Chart |
1 Month Extended Stay America Chart |
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