Debt (Tables)

12 Months Ended

Dec. 31, 2016

During the years ended December 31, 2016 and 2015, the following debt transactions occurred (in thousands):



	December 31, 2016				December 31, 2015
Debt - beginning of year	$	2,762,388			$	2,859,391
Additions:
Proceeds from term loan facilities, net of debt discount	1,293,500				—
Proceeds from senior notes payable, net of debt discount	788,000				500,000
Proceeds from revolving credit facilities	70,000				90,000
Amortization and write-off of deferred financing costs and debt discount ⁽¹⁾	29,091				9,902
Deductions:
Payments on mortgage loan	(1,931,157		)		(586,892		)
Payments on term loan facilities	(369,713		)	⁽²⁾	(8,537		)
Payments on revolving credit facilities	(25,000		)		(90,000		)
Payments of deferred financing costs ⁽¹⁾	(31,835		)		(11,476		)
Debt - end of year	$	2,585,274			$	2,762,388

______________________


(1)	Excludes amortization and payments of deferred financing costs related to revolving credit facilities.


(2)	Includes principal payment of $3.25 million made in January 2017, included in accounts payable and accrued liabilities as of December 31, 2016.

Company's Outstanding Debt, Net of Unamortized Deferred Financing Costs and Debt Discount Summary

The Company’s outstanding debt, net of unamortized debt discount, and unamortized deferred financing costs, as of December 31, 2016 and 2015, consists of the following (in thousands):



				Outstanding Principal						Unamortized Deferred Financing Costs					Interest Rate
Loan	Stated Amount ⁽¹⁾			December 31, 2016			December 31, 2015			December 31, 2016		December 31, 2015		Stated Interest Rate	December 31, 2016		December 31, 2015	Maturity Date
Mortgage loan
ESH REIT 2012 Mortgage Loan - Component B	$	350,000		$	—		$	111,157		$	—	$	784	3.4047%	N/A		3.4047%	N/A
ESH REIT 2012 Mortgage Loan - Component C	1,820,000			—			1,820,000			—		18,752		4.0547%	N/A		4.0547%	N/A
Term loan facilities
ESH REIT 2016 Term Facility	1,300,000		⁽²⁾	1,290,560		⁽³⁾	—			15,804		—		LIBOR⁽⁴⁾⁽⁵⁾ + 3.00%	3.75%	⁽⁵⁾	N/A	8/30/2023	⁽⁸⁾
ESH REIT 2014 Term Loan	375,000			—			365,157		⁽⁶⁾	—		3,635		LIBOR + 4.25 %	N/A		5.00%	N/A
Senior notes
ESH REIT 2025 Notes	1,300,000			1,289,041		⁽⁷⁾	500,000			23,523		10,756		5.25%	5.25%		5.25%	5/1/2025
Revolving credit facilities⁽⁹⁾
ESH REIT 2016 Revolving Credit Facility	350,000			45,000			—			2,570		—		LIBOR + 2.75%	3.33%		N/A	8/30/2021
ESH REIT 2013 Revolving Credit Facility	250,000			—			—			—		1,431		LIBOR + 3.00%	N/A		N/A	N/A
Corporation Revolving 2016 Credit Facility	50,000			—			—			511		—		LIBOR + 3.00%	N/A		N/A	8/30/2021
Corporation Revolving 2013 Credit Facility	50,000			—			—			—		956		LIBOR + 3.75%	N/A		N/A	N/A
Unsecured Intercompany Facility
Unsecured Intercompany Facility	75,000		⁽¹⁰⁾	—			—			—		—		5.00%	5.00%		N/A	8/30/2023
Total				$	2,624,601		$	2,796,314		$	42,408	$	36,314

______________________


(1)	Amortization is interest only, except for the 2016 Term Facility which amortizes in equal quarterly installments of $3.25 million.


(2)	ESH REIT is able to increase its borrowings under the 2016 ESH REIT Credit Facilities by an amount of up to $600.0 million, plus additional amounts, in each case subject to certain conditions.


(3)	The 2016 Term Facility is presented net of an unamortized debt discount of approximately $6.2 million as of December 31, 2016.


(4)	The 2016 Term Facility includes a LIBOR floor of 0.75%.


(5)	$500.0 million of the 2016 Term Facility is subject to a floating-to-fixed interest rate swap at a fixed rate of 1.175% as of December 31, 2016 (see Note 8).


(6)	The 2014 Term Loan is presented net of an unamortized debt discount of approximately $1.3 million as of December 31, 2015.


(7)	The 2025 Notes are presented net of an unamortized debt discount of approximately $11.0 million as of December 31, 2016.

(8)

In addition to scheduled amortization noted in (1) above, subject to certain exceptions, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required under the 2016 Term Facility commencing with the year ending December 31, 2017. Annual mandatory prepayments for the year ending December 31, 2017 and each year thereafter, are due during the first quarter of the following year.


(9)	Unamortized deferred financing costs related to revolving credit facilities are included in other assets in the accompanying consolidated balance sheets.

(10)

As of December 31, 2016, the outstanding balance owed from ESH REIT to the Corporation under the Unsecured Intercompany Facility was $50.0 million. ESH REIT is able to increase its borrowings under the Unsecured Intercompany Facility to an amount of up to $300.0 million, plus additional amounts, in each case subject to certain conditions. The outstanding debt balance and interest expense owed by ESH REIT to the Corporation related to the Unsecured Intercompany Facility eliminate in consolidation.

Company's Outstanding Debt, Unamortized Deferred Financing Costs and Debt Discount

The Company’s outstanding debt, net of unamortized debt discount, and unamortized deferred financing costs, as of December 31, 2016 and 2015, consists of the following (in thousands):



				Outstanding Principal						Unamortized Deferred Financing Costs					Interest Rate
Loan	Stated Amount ⁽¹⁾			December 31, 2016			December 31, 2015			December 31, 2016		December 31, 2015		Stated Interest Rate	December 31, 2016		December 31, 2015	Maturity Date
Mortgage loan
ESH REIT 2012 Mortgage Loan - Component B	$	350,000		$	—		$	111,157		$	—	$	784	3.4047%	N/A		3.4047%	N/A
ESH REIT 2012 Mortgage Loan - Component C	1,820,000			—			1,820,000			—		18,752		4.0547%	N/A		4.0547%	N/A
Term loan facilities
ESH REIT 2016 Term Facility	1,300,000		⁽²⁾	1,290,560		⁽³⁾	—			15,804		—		LIBOR⁽⁴⁾⁽⁵⁾ + 3.00%	3.75%	⁽⁵⁾	N/A	8/30/2023	⁽⁸⁾
ESH REIT 2014 Term Loan	375,000			—			365,157		⁽⁶⁾	—		3,635		LIBOR + 4.25 %	N/A		5.00%	N/A
Senior notes
ESH REIT 2025 Notes	1,300,000			1,289,041		⁽⁷⁾	500,000			23,523		10,756		5.25%	5.25%		5.25%	5/1/2025
Revolving credit facilities⁽⁹⁾
ESH REIT 2016 Revolving Credit Facility	350,000			45,000			—			2,570		—		LIBOR + 2.75%	3.33%		N/A	8/30/2021
ESH REIT 2013 Revolving Credit Facility	250,000			—			—			—		1,431		LIBOR + 3.00%	N/A		N/A	N/A
Corporation Revolving 2016 Credit Facility	50,000			—			—			511		—		LIBOR + 3.00%	N/A		N/A	8/30/2021
Corporation Revolving 2013 Credit Facility	50,000			—			—			—		956		LIBOR + 3.75%	N/A		N/A	N/A
Unsecured Intercompany Facility
Unsecured Intercompany Facility	75,000		⁽¹⁰⁾	—			—			—		—		5.00%	5.00%		N/A	8/30/2023
Total				$	2,624,601		$	2,796,314		$	42,408	$	36,314

______________________


(1)	Amortization is interest only, except for the 2016 Term Facility which amortizes in equal quarterly installments of $3.25 million.


(2)	ESH REIT is able to increase its borrowings under the 2016 ESH REIT Credit Facilities by an amount of up to $600.0 million, plus additional amounts, in each case subject to certain conditions.


(3)	The 2016 Term Facility is presented net of an unamortized debt discount of approximately $6.2 million as of December 31, 2016.


(4)	The 2016 Term Facility includes a LIBOR floor of 0.75%.


(5)	$500.0 million of the 2016 Term Facility is subject to a floating-to-fixed interest rate swap at a fixed rate of 1.175% as of December 31, 2016 (see Note 8).


(6)	The 2014 Term Loan is presented net of an unamortized debt discount of approximately $1.3 million as of December 31, 2015.


(7)	The 2025 Notes are presented net of an unamortized debt discount of approximately $11.0 million as of December 31, 2016.

(8)


(9)	Unamortized deferred financing costs related to revolving credit facilities are included in other assets in the accompanying consolidated balance sheets.

(10)

Components of Interest Expense

Interest Expense—The components of net interest expense for the years ended December 31, 2016, 2015 and 2014 are as follows (in thousands):



	Year Ended December 31, 2016			Year Ended December 31, 2015			Year Ended December 31, 2014
Contractual interest⁽¹⁾	$	127,633		$	123,411		$	123,736
Amortization of deferred financing costs and debt discount	9,882			10,490			14,510
Debt extinguishment and other costs	27,435			4,198			11,228
Interest income	(413		)	(317		)	(110		)
Total	$	164,537		$	137,782		$	149,364

______________________


(1)	Contractual interest includes dividends on the shares of mandatorily redeemable preferred stock (see Note 9).

Future Maturities of Debt

Future Maturities of Debt—The future maturities of debt as of December 31, 2016, are as follows (in thousands):



Years Ending December 31,
2017	$	13,000
2018	13,000
2019	13,000
2020	13,000
2021	58,000
Thereafter	2,531,750		⁽¹⁾
Total	$	2,641,750

______________________


(1)	Under the 2016 Term Facility, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required commencing with the year ending December 31, 2017. Annual mandatory prepayments for the year ending December 31, 2017 and each year thereafter, are due during the first quarter of the following year.

ESH REIT [Member]

Entity Information [Line Items]

Debt Transactions

During the years ended December 31, 2016 and 2015, the following debt transactions occurred (in thousands):



	December 31, 2016				December 31, 2015
Debt - beginning of year	$	2,762,388			$	2,859,391
Additions:
Proceeds from term loan facilities, net of debt discount	1,293,500				—
Proceeds from senior notes payable, net of debt discount	788,000				500,000
Proceeds from loan payable to Extended Stay America, Inc.	75,000				—
Proceeds from revolving credit facility	70,000				90,000
Amortization and write-off of deferred financing costs and debt discount ⁽¹⁾	29,091				9,902
Deductions:
Payments on mortgage loan	(1,931,157		)		(586,892		)
Payments on term loan facilities	(369,713		)	⁽²⁾	(8,537		)
Payments on loan payable to Extended Stay America, Inc.	(25,000		)		—
Payments on revolving credit facility	(25,000		)		(90,000		)
Payments of deferred financing costs ⁽¹⁾	(31,835		)		(11,476		)
Debt - end of year	$	2,635,274			$	2,762,388

______________________


(1)	Excludes amortization and payments of deferred financing costs related to the revolving credit facility.

Company's Outstanding Debt, Unamortized Deferred Financing Costs and Debt Discount

ESH REIT’s outstanding debt, net of unamortized debt discounts, and unamortized deferred financing costs as of December 31, 2016 and 2015, consists of the following (in thousands):



				Outstanding Principal						Unamortized Deferred Financing Costs					Interest Rate
Loan	Stated Amount⁽¹⁾			December 31, 2016			December 31, 2015			December 31, 2016		December 31, 2015		Stated Interest Rate	December 31, 2016		December 31, 2015	Maturity Date
Mortgage loan
2012 Mortgage Loan - Component B	$	350,000		$	—		$	111,157		$	—	$	784	3.4047%	N/A		3.4047%	N/A
2012 Mortgage Loan - Component C	1,820,000			—			1,820,000			—		18,752		4.0547%	N/A		4.0547%	N/A
Term loan facilities
2016 Term Facility	1,300,000		⁽²⁾	1,290,560		⁽³⁾	—			15,804		—		LIBOR⁽⁴⁾⁽⁵⁾ + 3.00%	3.75%	⁽⁵⁾	N/A	8/30/2023	⁽⁸⁾
2014 Term Loan	375,000			—			365,157		⁽⁶⁾	—		3,635		LIBOR + 4.25%	N/A		5.00%	N/A
Senior notes
2025 Notes	1,300,000			1,289,041		⁽⁷⁾	500,000			23,523		10,756		5.25%	5.25%		5.25%	5/1/2025
Revolving credit facilities ⁽⁹⁾
2016 Revolving Credit Facility	350,000			45,000			—			2,570		1,431		LIBOR + 2.75%	3.33%		N/A	8/30/2021
2013 Revolving Credit Facility	250,000			—			—			—		—		LIBOR + 3.75%	N/A		N/A	N/A
Unsecured Intercompany Facility
Unsecured Intercompany Facility	75,000		⁽¹⁰⁾	50,000			—			—		—		5.00%	5.00%		N/A	8/30/2023
Total				$	2,674,601		$	2,796,314		$	41,897	$	35,358

______________________


(1)	Amortization is interest only, except for the 2016 Term Facility which amortizes in equal quarterly installments of $3.25 million.


(2)	ESH REIT is able to increase its borrowings under the 2016 ESH REIT Credit Facilities by an amount of up to $600.0 million, plus additional amounts, in each case subject to certain conditions.


(3)	The 2016 Term Facility is presented net of an unamortized debt discount of approximately $6.2 million as of December 31, 2016.


(4)	The 2016 Term Facility includes a LIBOR floor of 0.75%.


(5)	$500.0 million of the 2016 Term Facility is subject to a floating-to-fixed interest rate swap at a fixed rate of 1.175% as of December 31, 2016 (see Note 7).


(6)	The 2014 Term Loan is presented net of an unamortized debt discount of approximately $1.3 million as of December 31, 2015.


(7)	The 2025 Notes are presented net of an unamortized debt discount of approximately $11.0 million as of December 31, 2016.

(8)


(9)	Unamortized deferred financing costs related to revolving credit facilities are included in other assets in the accompanying consolidated balance sheets.


(10)	As of December 31, 2016, the outstanding balance owed by ESH REIT to the Corporation under the Unsecured Intercompany Facility was $50.0 million. ESH REIT is able to increase its borrowings under the Unsecured Intercompany Facility to an amount of up to $300.0 million, plus additional amounts, in each case subject to certain conditions.

Components of Interest Expense

The components of net interest expense for the years ended December 31, 2016, 2015 and 2014, are as follows (in thousands):



	Year Ended December 31, 2016			Year Ended December 31, 2015			Year Ended December 31, 2014
Contractual interest	$	127,215		$	121,715		$	121,672
Amortization of deferred financing costs and debt discount	9,124			9,408			11,869
Debt extinguishment and other costs	27,196			3,890			10,223
Interest income	(92		)	(233		)	(532		)
Total	$	163,443		$	134,780		$	143,232

Future Maturities of Debt

The future maturities of debt as of December 31, 2016, are as follows (in thousands):



Years Ending December 31,
2017	$	13,000
2018	13,000
2019	13,000
2020	13,000
2021	58,000
Thereafter	2,581,750		⁽¹⁾
Total	$	2,691,750

______________________


(1)	Under the 2016 Term Facility, mandatory annual prepayments of up to 50% of Excess Cash Flow, as defined, may be required commencing with the year ending December 31, 2017. Annual mandatory prepayments for the year ending December 31, 2017 and each year thereafter, are due during the first quarter of the following year.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Publisher FASB
-Name Accounting Standards Codification
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-Publisher FASB
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-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21521-112644

+ Details