SEGMENTS

The Company's operating segments are components of the business which are managed discretely and for which discrete financial information is reviewed regularly by its chief operating decision maker to assess performance and make decisions regarding the allocation of resources. The Company's operating and reportable segments are defined as follows:


•	Owned Hotels—Earnings are derived from the operation of owned hotel properties and include room revenues and other hotel revenues.

•

Franchise and management—Earnings are derived from revenues (i.e., fees) under various franchise and management agreements with third-parties. These contracts provide the Company the ability to earn compensation for licensing the Extended Stay America brand name as well as for certain services rendered, such as hotel management services and access to certain of the Company’s shared platforms, such as its central reservations, revenue management and property management systems.

The performance of the Company's operating segments is evaluated primarily on income from operations. Selected financial data is provided below (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Revenues:
Owned hotels	$	346,860		$	350,866		$	974,785		$	980,220
Franchise and management ⁽¹⁾	2,484			1,063			6,416			2,957
Total segment revenues	349,344			351,929			981,201			983,177
Corporate and other ⁽²⁾	19,471			20,089			61,601			58,183
Other revenues from franchise and managed properties ⁽³⁾	2,770			—			7,066			—
Intersegment eliminations ⁽⁴⁾	(20,509		)	(21,152		)	(64,524		)	(61,140		)
Total	351,076			350,866			985,344			980,220

Income (loss) from operations:
Owned hotels ⁽⁵⁾	$	124,848		$	122,646		$	315,994		$	288,999
Franchise and management ⁽¹⁾	2,484			1,063			6,416			2,957
Total segment income from operations	127,332			123,709			322,410			291,956
Corporate and other ⁽²⁾	(5,870		)	(5,791		)	(19,715		)	(22,665		)
Total	$	121,462		$	117,918		$	302,695		$	269,291

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(1)	Includes intellectual property fees charged to the owned hotels segment of approximately $1.0 million and $1.1 million for the three months ended September 30, 2018 and 2017, respectively, and approximately $2.9 million and $3.0 million for the nine months ended September 30, 2018 and 2017, respectively, that are eliminated in the unaudited condensed consolidated statements of operations.

(2)

Includes revenues generated and operating expenses incurred in connection with the overall support of owned, franchised and managed hotels and related operations. These amounts include management fees earned by and cost reimbursements charged to the owned hotels segment of approximately $19.5 million and $20.1 million for the three months ended September 30, 2018 and 2017, respectively, and approximately $61.6 million and $58.2 million for the nine months ended September 30, 2018 and 2017, respectively, that are eliminated in the unaudited condensed consolidated statements of operations.


(3)	Includes direct reimbursement of specific costs incurred under franchise and management agreements that the Company is reimbursed for on a dollar-for-dollar basis as outlined in the applicable agreements.


(4)	Includes management fees, intellectual property fees and other cost reimbursements charged to the owned hotels segment that are eliminated in the unaudited condensed consolidated statements of operations.


(5)	Net of impairment charges of $0 for each of the three months ended September 30, 2018 and 2017, and approximately $43.6 million and $20.4 million for the nine months ended September 30, 2018 and 2017, respectively.

Total assets for each of the Company's operating segments are provided below (in thousands):



	September 30, 2018			December 31, 2017
Assets:
Owned hotels	$	3,758,680		$	4,021,672
Franchise and management	11,702			9,933
Total segment assets	3,770,382			4,031,605
Corporate and other	301,709			85,215
Intersegment eliminations	(39,519		)	(40,815		)
Total	$	4,032,572		$	4,076,005

Total capital expenditures for each of the Company's operating segments are provided below (in thousands):



	Nine Months Ended September 30,
	2018		2017
Capital Expenditures:
Owned hotels	$	146,445	$	131,822
Franchise and management	250		—
Total segment capital expenditures	146,695		131,822
Corporate and other	842		1,053
Total	$	147,537	$	132,875