Debt (Tables)

9 Months Ended

Sep. 30, 2018

Summary - The Company’s outstanding debt, net of unamortized debt discount and unamortized deferred financing costs, as of September 30, 2018 and December 31, 2017, consists of the following (dollars in thousands):



	Stated Amount⁽¹⁾			Carrying Amount						Unamortized Deferred Financing Costs								Interest Rate
Loan	Stated Amount⁽¹⁾			September 30, 2018			December 31, 2017			September 30, 2018			December 31, 2017			Stated Interest Rate		September 30, 2018			December 31, 2017		Maturity Date
Term loan facilities
ESH REIT 2016 Term Facility	$	1,300,000	⁽²⁾	$	1,210,079	⁽³⁾	$	1,278,545	⁽³⁾	$	11,110		$	13,433		LIBOR⁽⁴⁾ + 2.00%		3.99	%	⁽⁴⁾	3.69	%	8/30/2023	^{(1), (6)}
Senior notes
ESH REIT 2025 Notes	1,300,000			1,291,342		⁽⁵⁾	1,290,356		⁽⁵⁾	18,583			20,700			5.25	%	5.25	%		5.25	%	5/1/2025
Revolving credit facilities
ESH REIT 2016 Revolving Credit Facility	350,000		⁽²⁾	—			—			1,607		⁽⁷⁾	2,020		⁽⁷⁾	LIBOR + 2.75%		N/A			N/A		8/30/2021
Corporation 2016 Revolving Credit Facility	50,000			—			—			319		⁽⁷⁾	401		⁽⁷⁾	LIBOR + 3.00%		N/A			N/A		8/30/2021
Unsecured Intercompany Facility
Unsecured Intercompany Facility	75,000		⁽⁸⁾	—			—			—			—			5.00	%	5.00	%		5.00	%	8/30/2023
Total				$	2,501,421		$	2,568,901		$	31,619		$	36,554

_________________________________


(1)	Amortization is interest only, except for the 2016 Term Facility (as defined below), which amortizes in equal quarterly installments of approximately $3.1 million. See (6) below. In February 2018, ESH REIT made a voluntary prepayment of $60.0 million.


(2)	ESH REIT is able to increase its borrowings under the 2016 ESH REIT Credit Facilities (as defined below) 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 $4.6 million and $5.3 million as of September 30, 2018 and December 31, 2017, respectively.


(4)	$300.0 million of the 2016 Term Facility is subject to an interest rate swap at a fixed rate of 1.175% as of September 30, 2018 (see Note 7).


(5)	The 2025 Notes (as defined below) are presented net of an unamortized debt discount of approximately $8.7 million and $9.6 million as of September 30, 2018 and December 31, 2017, respectively.

(6)

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. Annual mandatory prepayments for the year are due during the first quarter of the following year. No mandatory prepayments were required in the first quarter of 2018 based on ESH REIT's Excess Cash Flow for the year ended December 31, 2017.


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

(8)

As of September 30, 2018, no amounts were outstanding under the Unsecured Intercompany Facility. ESH REIT is able to borrow under the Unsecured Intercompany Facility an amount up to $300.0 million, plus additional amounts, in each case subject to certain conditions. Outstanding debt balances and interest expense, as applicable, owed from ESH REIT to the Corporation related to the Unsecured Intercompany Facility eliminate in consolidation.

Summary of Components of Interest Expense

The components of net interest expense during the three and nine months ended September 30, 2018 and 2017, are as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Contractual interest ⁽¹⁾	$	29,120		$	29,314		$	87,158		$	89,018
Amortization of deferred financing costs and debt discount	1,996			2,024			6,008			6,073
Debt extinguishment and other costs	231			363			2,428			1,980
Interest Income	(340		)	(50		)	(522		)	(113		)
Total	$	31,007		$	31,651		$	95,072		$	96,958

______________________

⁽¹⁾ Contractual interest includes dividends payable on shares of the Corporation's mandatorily redeemable preferred stock.

Future Maturities of Debt

Future Maturities of Debt—The future maturities of debt as of September 30, 2018, are as follows (in thousands):



Years Ending December 31,
Remainder of 2018	$	3,052
2019	12,207		⁽¹⁾
2020	12,207		⁽¹⁾
2021	12,207		⁽¹⁾
2022	12,207		⁽¹⁾
Thereafter	2,462,764		⁽¹⁾
Total	$	2,514,644


(1)	Under the 2016 Term Facility, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required. Annual mandatory prepayments for the year are due during the first quarter of the following year. No mandatory prepayments were required in the first quarter of 2018 based on ESH REIT's Excess Cash Flow for the year ended December 31, 2017.

ESH REIT

Entity Information [Line Items]

Outstanding Debt

ESH REIT’s outstanding debt, net of unamortized debt discount and unamortized deferred financing costs, as of September 30, 2018 and December 31, 2017, consists of the following (dollars in thousands):



	Stated Amount⁽¹⁾			Carrying Amount						Unamortized Deferred Financing Costs								Interest Rate
Loan	Stated Amount⁽¹⁾			September 30, 2018			December 31, 2017			September 30, 2018			December 31, 2017			Stated Interest Rate		September 30, 2018			December 31, 2017		Maturity Date
Term loan facility
2016 Term Facility	$	1,300,000	⁽²⁾	$	1,210,079	⁽³⁾	$	1,278,545	⁽³⁾	$	11,110		$	13,433		LIBOR⁽⁴⁾ + 2.00%		3.99	%	⁽⁴⁾	3.69	%	8/30/2023	^{(1), (6)}
Senior notes
2025 Notes	1,300,000			1,291,342		⁽⁵⁾	1,290,356		⁽⁵⁾	18,583			20,700			5.25	%	5.25	%		5.25	%	5/1/2025
Revolving credit facility
2016 Revolving Credit Facility	350,000		⁽²⁾	—			—			1,607		⁽⁷⁾	2,020		⁽⁷⁾	LIBOR + 2.75%		N/A			N/A		8/30/2021
Unsecured Intercompany Facility
Unsecured Intercompany Facility	75,000		⁽⁸⁾	—			—			—			—			5.00	%	5.00	%		5.00	%	8/30/2023
Total				$	2,501,421		$	2,568,901		$	31,300		$	36,153

_________________________________


(1)	Amortization is interest only, except for the 2016 Term Facility (as defined below), which amortizes in equal quarterly installments of approximately $3.1 million. See (6) below. In February 2018, ESH REIT made a voluntary prepayment of $60.0 million.


(2)	ESH REIT is able to increase its borrowings under the 2016 ESH REIT Credit Facilities (as defined below) 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 $4.6 million and $5.3 million as of September 30, 2018 and December 31, 2017, respectively.


(4)	$300.0 million of the 2016 Term Facility is subject to an interest rate swap at a fixed rate of 1.175% as of September 30, 2018 (see Note 7).


(5)	The 2025 Notes (as defined below) are presented net of an unamortized debt discount of approximately $8.7 million and $9.6 million as of September 30, 2018 and December 31, 2017, respectively.

(6)

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. Annual mandatory prepayments for the year are due during the first quarter of the following year. No mandatory prepayments were required in the first quarter of 2018 based on ESH REIT’s Excess Cash Flow for the year ended December 31, 2017.


(7)	Unamortized deferred financing costs related to the revolving credit facility are included in other assets in the accompanying unaudited condensed consolidated balance sheets.


(8)	As of September 30, 2018, no amounts were outstanding under the Unsecured Intercompany Facility. ESH REIT is able to borrow under the Unsecured Intercompany Facility an amount up to $300.0 million, plus additional amounts, in each case subject to certain conditions (see Note 9).

Summary of Components of Interest Expense

The components of net interest expense during the three and nine months ended September 30, 2018 and 2017, are as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Contractual interest	$	28,978		$	29,810		$	86,730		$	89,970
Amortization of deferred financing costs and debt discount	1,969			1,997			5,926			5,991
Debt extinguishment and other costs	199			313			2,306			1,830
Interest Income	(215		)	(4		)	(252		)	(12		)
Total	$	30,931		$	32,116		$	94,710		$	97,779

Future Maturities of Debt

The future maturities of debt as of September 30, 2018, are as follows (in thousands):



Years Ending December 31,
Remainder of 2018	$	3,052
2019	12,207		⁽¹⁾
2020	12,207		⁽¹⁾
2021	12,207		⁽¹⁾
2022	12,207		⁽¹⁾
Thereafter	2,462,764		⁽¹⁾
Total	$	2,514,644

______________________


(1)	Under the 2016 Term Facility, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required. Annual mandatory prepayments for the year are due during the first quarter of the following year. No mandatory prepayments were required in the first quarter of 2018 based on ESH REIT's Excess Cash Flow for the year ended December 31, 2017.

- 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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details