8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported) – May 1, 2019

EXTENDED STAY AMERICA, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-36190		46-3140312
(State or other jurisdiction of incorporation or organization)	(Commission File Number)		(I.R.S. Employer Identification Number)
11525 N. Community House Road, Suite 100 Charlotte, North Carolina		28277
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code (980) 345-1600

ESH HOSPITALITY, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-36191	27-3559821
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)
11525 N. Community House Road, Suite 100 Charlotte, North Carolina		28277
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code (980) 345-1600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02. Results of Operations and Financial Condition.

On May 1, 2019, Extended Stay America, Inc. and ESH Hospitality, Inc. issued an earnings release announcing their results of operations for the three months ended March 31, 2019. A copy of the earnings release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference in this Item 2.02.

The information contained under Item 2.02 of this Current Report on Form 8-K (including Exhibit 99.1) is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

On May 2, 2019, Extended Stay America, Inc. and ESH Hospitality, Inc. will hold a conference call announcing their results of operations for the three months ended March 31, 2019. A copy of management’s presentation materials is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference in this Item 7.01.

The information contained under Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.2) is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Exhibit Description
99.1	Earnings release of Extended Stay America, Inc. and ESH Hospitality, Inc., dated May 1, 2019, announcing results for the three months ended March 31, 2019.
99.2	Management’s presentation materials, dated May 1, 2019.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the Registrants has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EXTENDED STAY AMERICA, INC.
Date: May 1, 2019	By:	/s/ Christopher N. Dekle
		Name: Christopher N. Dekle
		Title: General Counsel and Corporate Secretary

	ESH HOSPITALITY, INC.
Date: May 1, 2019	By:	/s/ Christopher N. Dekle
		Name: Christopher N. Dekle
		Title: General Counsel and Corporate Secretary

EX-99.1

EXTENDED STAY AMERICA ANNOUNCES FIRST QUARTER 2019 RESULTS

-Net Income of $28.4 million for the first quarter

-Adjusted EBITDA¹ of $116.3 million for the first quarter

-Raises dividend 4.5% to 23¢ per Paired Share for the quarter

CHARLOTTE, N.C. - May 1, 2019 (GlobeNewswire) - Extended Stay America, Inc. and ESH Hospitality, Inc. (NASDAQ:STAY) (together, the “Company”) today announced consolidated results for the three months ended March 31, 2019.

First Quarter 2019 Highlights

• Net Income of $28.4 million

• Total revenues of $277.7 million

• Comparable system-wide Revenue Per Available Room (“RevPAR”) declined 1.6% to $46.74

• Adjusted EBITDAof $116.3 million

• Adjusted Funds From Operations ("Adjusted FFO")¹ of $0.36 per diluted Paired Share

• Adjusted Paired Share Income¹ of $0.16 per diluted Paired Share

Extended Stay America’s President and Chief Executive Officer, Jonathan Halkyard, commented, “We believe the progress we’ve made in recent months has set us up for success operationally and with our ongoing ESA 2.0 growth strategy.”

Mr. Halkyard continued, “Today we increased our dividend for the fifth consecutive year, highlighting our strong cash generation ability and our commitment to return significant capital to shareholders.”

Financial and Operating Results

Total revenues for the three months ended March 31, 2019 were $277.7 million, a decrease of 6.7% over the same period in the prior year primarily due to asset dispositions in 2018. Adjusting for asset dispositions, total revenues declined 0.8%.

Comparable system-wide RevPAR for the three months ended March 31, 2019 declined 1.6% over the same period in 2018 to $46.74, driven by a 3.0% decline in Average Daily Rate (“ADR”), partially offset by a 110 basis point increase in occupancy to 71.4%. Comparable Company-owned RevPAR decreased 2.1% during the first quarter to $48.23, including minor displacement for renovations during the quarter. Total Company-owned RevPAR increased 0.6% during the quarter, reflecting the sales of non-core hotels in 2018.

Hotel Operating Margin¹for the three months ended March 31, 2019 was 50.1% compared to 52.2% in the same period in 2018. The decline in Hotel Operating Margin was driven primarily by a decrease in comparable system-wide RevPAR and increased

¹ See “Disclosure Regarding Non-GAAP Financial Measures” for an explanation of non-GAAP measures included in this release (i.e., Hotel Operating Profit, Hotel Operating Margin, EBITDA, Adjusted EBITDA, Funds from Operations ("FFO"), Adjusted FFO, Adjusted FFO per diluted Paired Share, Paired Share Income, Adjusted Paired Share Income and Adjusted Paired Share Income per diluted Paired Share).

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payroll expenses.

Net income for the three months ended March 31, 2019 was $28.4 million compared to $31.1 million in the same period in 2018, a decrease of 8.7%. The decline in net income was due to a decline in comparable system-wide RevPAR, an increase in operating expenses on a comparable Company-owned basis and an increase in income tax rate, partially offset by lower depreciation and a decline in net interest expense.

Adjusted EBITDA for the three months ended March 31, 2019 was $116.3 million, a decline of 12.0% compared to the same period in 2018. The decline in Adjusted EBITDA was due primarily to asset dispositions in 2018 resulting in lost contribution of $6.9 million as well as an increase in comparable hotel operating expenses and a decline in comparable system-wide RevPAR. Adjusted EBITDA excludes non-cash equity-based compensation expense of $2.1 million and $1.3 million in other expenses.

Adjusted FFO for the three months ended March 31, 2019 was $68.4 million compared to $80.0 million in the same period in 2018. The decline in Adjusted FFO was primarily due to a decline in comparable system-wide RevPAR and an increase in comparable Company-owned hotel operating expenses. Adjusted FFO per diluted Paired Share was $0.36 compared to $0.42 in the same period in 2018. Adjusted FFO, a non-GAAP measure, represents funds from operations, as adjusted, attributable to the consolidated enterprise, whose representative equity security is a Paired Share. A Paired Share entitles its holder to participate in 100% of the common equity and earnings of both Extended Stay America, Inc. and ESH Hospitality, Inc.

Adjusted Paired Share Income for the three months ended March 31, 2019 was $29.5 million, or $0.16 per diluted Paired Share, compared to $37.5 million, or $0.19 per diluted Paired Share, in the same period in 2018.The decline in Adjusted Paired Share Income per diluted Paired Share was due to a decline in comparable system-wide RevPAR and an increase in comparable Company-owned hotel operating expenses, partially offset by lower depreciation expense and lower net interest expense.Adjusted Paired Share Income, a non-GAAP measure, represents net income, as adjusted, attributable to the consolidated enterprise, whose representative equity security is a Paired Share.

Capital Expenditures

The Company invested $55.3 million in capital expenditures during the first quarter of 2019. This includes $14.8 million in renovation capital, $11.9 million in IT capital and $8.0 million in capital for ESA 2.0 hotel development and land acquisitions.

Hotel and Development Pipeline

As of March 31, 2019, the Company had a pipeline of 60 hotels representing approximately 7,300 rooms.

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Company Owned Pipeline & Recently Opened Hotels as of March 31, 2019
Under Option		Pre-Development		Under Construction		Total Pipeline		Opened YTD
# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms
5	620	5	648	7	872	17	2,140	0	0
Third Party Pipeline & Recently Opened Hotels as of March 31, 2019
Commitments		Applications		Executed		Total Pipeline		Opened YTD
# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms
34	4,216	3	306	6	673	43	5,195	0	0

Definitions
Under Option	Locations with a signed purchase and sale agreement
Pre-Development	Land purchased, permitted and/or site work
Under Construction	Hotel is under construction
Commitments	Signed commitment to build hotel(s) by a third party
Applications	Third party filed franchise application with deposit
Executed	Franchise application approved, various stages of pre-development and/or under construction

Distribution and Share Repurchases

On May 1, 2019, the Boards of Directors of Extended Stay America, Inc. and ESH Hospitality, Inc. declared cash distributions totaling $0.23 per Paired Share for the first quarter of 2019, an increase of 4.5% from the prior distribution of $0.22 per Paired Share. The distributions are payable on May 30, 2019 to shareholders of record as of May 16, 2019. The Company did not repurchase Paired Shares during the first quarter of 2019.

2019 Outlook

The Company re-affirms its initial outlook for 2019 as follows:

in millions, except % and # of hotels	Low		High
# of hotels owned on 12/31/19	554
Total Revenues	$	1,230	$	1,250
Comparable system-wide RevPAR % Δ 1		0.0%		2.0%
Net income	$	188	$	212
Adjusted Paired Share Income/Paired Share	$	1.02	$	1.14
Adjusted EBITDA2	$	560	$	580
Depreciation and amortization	$	187	$	193
Net interest expense	$	126	$	126
Effective tax rate		16.0%		17.0%
Capital expenditures	$	310	$	360
Expected capital returns	$	220	$	270

¹ Approximately 200 basis point negative impact from hurricane affected markets and net renovation displacement

²Lost contribution of approximately $21 million related to 72 hotel dispositions in 2018

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Webcast and Conference Call Details

The Company will host a conference call on Thursday, May 2, 2019 at 8:30 a.m. Eastern Time. The conference call will be webcast simultaneously in the Investor Relations section of the Company’s website at www.aboutstay.com. A replay of the call will be available for 90 days following the webcast on the Company’s website. Alternatively, the conference call can be accessed by dialing 1-877-705-6003 for domestic callers or 1-201-493-6725 for international callers. A telephone replay will be available from shortly after the call until May 9, 2019, and can be accessed by dialing 1-844-512-2921 for domestic callers or 1-412-317-6671 for international callers. The passcode for the replay is 13689947.

Disclosure Regarding Non-GAAP Financial Measures

Hotel Operating Profit, Hotel Operating Margin, EBITDA, Adjusted EBITDA, FFO, Adjusted FFO, Adjusted FFO per diluted Paired Share, Paired Share Income, Adjusted Paired Share Income and Adjusted Paired Share Income per diluted Paired Share (collectively, the “Non-GAAP Financial Measures”), which are detailed in the reconciliation tables that accompany this release, are used by the Company as supplemental performance measures. The Company believes these measures provide useful information to investors regarding our results of operations and allow investors to evaluate the ongoing operating performance of our hotels and facilitate comparisons between the Company and other lodging companies, hotel owners and capital-intensive companies, including those which include a REIT as part of their legal entity structure. The Non-GAAP Financial Measures are not recognized terms under U.S. GAAP.  These measures as presented may not be comparable to measures calculated by other companies. These measures should not be considered as alternative measures of, or superior to, operating profit, net income, net income per share or any other measure of the Company, Extended Stay America, Inc. or ESH Hospitality, Inc. calculated in accordance with U.S. GAAP.  The Company’s presentation of the Non-GAAP Financial Measures does not replace the presentation of the Company’s consolidated financial statements and other disclosures prepared in accordance with U.S. GAAP.

Forward Looking Statements

This release contains forward-looking statements within the meaning of the federal securities laws. These statements include, but are not limited to, statements related to our expectations regarding our business performance, financial results, liquidity and capital resources, capital expenditures, distribution policy and other non-historical statements, including the statements in the “2019 Outlook” section of this release. Forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results or performance to differ from those projected in the forward-looking statements, possibly materially. For a description of factors that may cause the Company’s actual results or performance to differ from projected results or performance implied by forward-looking statements, please review the information under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” included in the Company’s combined annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 27, 2019 and other documents of the Company on file with or furnished to the SEC. Any forward-looking statements made in this release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, will have the expected consequences to, or effects on, the Company, its business or operations. Except as required by law, the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. We caution you that actual results may differ materially from what is expressed, implied or forecasted by the Company’s forward-looking statements.

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About Extended Stay America

Extended Stay America® is the leading brand in the mid-priced extended stay segment in the U.S. with 628 hotels and approximately twice as many rooms as its nearest competitor. ESH Hospitality, Inc. (“ESH”), a subsidiary of Extended Stay America, Inc. (“ESA”), is the largest lodging REIT in North America by unit and room count, with 554 hotels and approximately 61,500 rooms in the U.S. ESA also manages or franchises an additional 74 Extended Stay America® hotels. Visit www.esa.com for more information.

Contacts

Investors or Media:

Rob Ballew

(980) 345-1546

investorrelations@esa.com    

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EXTENDED STAY AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(In thousands, except per share data)
(Unaudited)
		Three Months Ended
		March 31,
		2019			2018			% Variance
REVENUES:
Room revenues		$	267,046		$	290,210		(8.0)%
Other hotel revenues		5,303			5,275			0.5%
Franchise and management fees		1,225			415			195.2%
		273,574			295,900			(7.5)%
Other revenues from franchised and managed properties		4,095			1,867			119.3%
Total revenues		277,669			297,767			(6.7)%
OPERATING EXPENSES:
Hotel operating expenses		137,291			142,630			(3.7)%
General and administrative expenses		23,027			24,961			(7.7)%
Depreciation and amortization		48,778			54,015			(9.7)%
Impairment of long-lived assets		—			43,600			(100.0)%
		209,096			265,206			(21.2)%
Other expenses from franchised and managed properties		4,647			1,919			142.2%
Total operating expenses		213,743			267,125			(20.0)%
GAIN ON SALE OF HOTEL PROPERTIES		—			38,082			(100.0)%
OTHER INCOME		27			5			440.0%
INCOME FROM OPERATIONS		63,953			68,729			(6.9)%
OTHER NON-OPERATING (INCOME) EXPENSE		(178		)	197			190.4%
INTEREST EXPENSE, NET		29,604			31,640			(6.4)%
INCOME BEFORE INCOME TAX EXPENSE		34,527			36,892			(6.4)%
INCOME TAX EXPENSE		6,123			5,797			5.6%
NET INCOME		28,404			31,095			(8.7)%
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		(6,470		)	(16,243		)	(60.2)%
NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC COMMON SHAREHOLDERS		$	21,934		$	14,852		47.7%
NET INCOME PER EXTENDED STAY AMERICA, INC. COMMON SHARE - DILUTED		$	0.12		$	0.08		50.8%
WEIGHTED-AVERAGE EXTENDED STAY AMERICA, INC. COMMON SHARES OUTSTANDING - DILUTED		188,576			192,566
CONSOLIDATED BALANCE SHEET DATA
AS OF MARCH 31, 2019 AND DECEMBER 31, 2018
(In thousands)
(unaudited)
	March 31,				December 31,
		2019			2018
Cash and cash equivalents		$	287,993		$	287,458
Restricted cash		$	15,943		$	15,878
Total assets		$	3,922,886		$	3,924,210
Total debt, net of unamortized deferred financing costs and debt discounts (1)		$	2,401,626		$	2,402,637
Total equity		$	1,296,651		$	1,310,639
(1) Unamortized deferred financing costs and debt discounts totaled approximately $39.3 million and $41.1 million as of March 31, 2019 and December 31, 2018, respectively.

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EXTENDED STAY AMERICA, INC.
OPERATING METRICS
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(Unaudited)
COMPARABLE SYSTEM-WIDE OPERATING METRICS (1)
	Three Months Ended
	March 31,
	2019	2018	Variance
Number of hotels (as of March 31)	625	625	—
Number of rooms (as of March 31)	68,780	68,780	—
Comparable System-Wide Occupancy(1)	71.4%	70.3%	110 bps
Comparable System-Wide ADR(1)	$65.50	$67.56	(3.0)%
Comparable System-Wide RevPAR(1)	$46.74	$47.50	(1.6)%

COMPARABLE COMPANY-OWNED OPERATING METRICS (2)
	Three Months Ended
	March 31,
	2019		2018		Variance
Number of hotels (as of March 31)	552		552		—
Number of rooms (as of March 31)	61.264		61.264		—
Comparable Company-Owned Occupancy(2)	71.5%		71.2%		30 bps
Comparable Company-Owned ADR(2)	$67.50		$69.22		(2.5)%
Comparable Company-Owned RevPAR(2)	$48.23		$49.28		(2.1)%
Renovation Displacement Data (in thousands,except percentages):
Total available room nights	5,514		5,514		—
Room nights displaced from renovation	20		—		20
% of available room nights displaced	0.4	%	—	%	40 bps

COMPANY-OWNED HOTEL OPERATING METRICS(3)
	Three Months Ended
	March 31,
	2019	2018	Variance
Number of hotels (as of March 31)	554	598	(44)
Number of rooms (as of March 31)	61.486	66.089	(4,603)
Company-Owned Occupancy(3)	71.4%	70.5%	90 bps
Company-Owned ADR(3)	$67.51	$67.99	(0.7)%
Company-Owned RevPAR(3)	$48.20	$47.92	0.6%
(1) Includes hotels owned, franchised or managed for the full three months ended March 31, 2019 and 2018.
(2) Includes hotels owned and operated by the Company for the three months ended March 31, 2019 and 2018.
(3) Includes results of operations based on the Company's ownership and operation of hotels during the periods presented, which is summarized below:

Date	Number of Hotels (Sold) Acquired	Number of Rooms	Number of Owned Hotels	Number of Owned Rooms
January 1, 2018	—	—	624	68,620
February 2018	(25)	(2,430)	599	66,190
March 2018	(1)	(101)	598	66,089
May 2018	1	115	599	66,204
September 2018	(16)	(1,680)	583	64,524
September 2018	(16)	(1,776)	567	62,748
November 2018	1	107	568	62,855
November 2018	(14)	(1,369)	554	61,486
March 31, 2019	—	—	554	61,486

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EXTENDED STAY AMERICA, INC.
NON-GAAP RECONCILIATION OF NET INCOME TO HOTEL OPERATING PROFIT AND HOTEL OPERATING MARGIN
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(In thousands)
(Unaudited)
	Three Months Ended
	March 31,
	2019			2018			Variance
Net income	$	28,404		$	31,095		(8.7)%
Income tax expense	6,123			5,797			5.6%
Interest expense, net	29,604			31,640			(6.4)%
Other non-operating (income) expense	(178		)	197			190.4%
Other income	(27		)	(5		)	440.0%
Gain on sale of hotel properties	—			(38,082		)	(100.0)%
Impairment of long-lived assets	—			43,600			(100.0)%
Depreciation and amortization	48,778			54,015			(9.7)%
General and administrative expenses	23,027			24,961			(7.7)%
Loss on disposal of assets(1)	1,376			1,492			(7.8)%
Franchise and management fees	(1,225		)	(415		)	195.2%
Other expenses from franchised and managed properties, net of other revenues	552			52			961.5%
Hotel Operating Profit	$	136,434		$	154,347		(11.6)%
Room revenues	$	267,046		$	290,210		(8.0)%
Other hotel revenues	5,303			5,275			0.5%
Total room and other hotel revenues	$	272,349		$	295,485		(7.8)%
Hotel Operating Margin	50.1		%	52.2		%	(210) bps
(1) Included in hotel operating expenses in the unaudited condensed consolidated statements of operations.

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EXTENDED STAY AMERICA, INC.
NON-GAAP RECONCILIATION OF NET INCOME TO COMPARABLE HOTEL(2)
OPERATING PROFIT AND COMPARABLE HOTEL OPERATING MARGIN
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(In thousands)
(Unaudited)
	Three Months Ended
	March 31,
	2019			2018			Variance
Net income	$	28,404		$	31,095		(8.7)%
Income tax expense	6,123			5,797			5.6%
Interest expense, net	29,604			31,640			(6.4)%
Other non-operating (income) expense	(178		)	197			190.4%
Other income	(27		)	(5		)	440.0%
Gain on sale of hotel properties	—			(38,082		)	(100.0)%
Impairment of long-lived assets	—			43,600			(100.0)%
Depreciation and amortization	48,778			54,015			(9.7)%
General and administrative expenses	23,027			24,961			(7.7)%
Loss on disposal of assets(1)	1,376			1,492			(7.8)%
Franchise and management fees	(1,225		)	(415		)	195.2%
Other expenses from franchised and managed properties, net of other revenues	552			52			961.5%
Hotel operating profit of hotels not owned for entirety of periods presented	(353		)	(6,878		)	(94.9)%
Comparable Hotel Operating Profit(2)	$	136,081		$	147,469		(7.7)%
Room revenues	$	267,046		$	290,210		(8.0)%
Other hotel revenues	5,303			5,275			0.5%
Total revenues of hotels not owned for entirety of periods presented	(828		)	(18,700		)	(95.6)%
Comparable total room and other hotel revenues	$	271,521		$	276,785		(1.9)%
Comparable Hotel Operating Margin(2)	50.1		%	53.3		%	(320) bps
(1) Included in hotel operating expenses in the unaudited condensed consolidated statements of operations.
(2) Includes the results of 552 hotels owned and operated during the full three months ended March 31, 2019 and 2018.

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EXTENDED STAY AMERICA, INC.
NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(In thousands)
(Unaudited)
	Three Months Ended
	March 31,
	2019		2018
Net income	$	28,404	$	31,095
Interest expense, net	29,604		31,640
Income tax expense	6,123		5,797
Depreciation and amortization	48,778		54,015
EBITDA	112,909		122,547
Equity-based compensation	2,109		2,403
Impairment of long-lived assets	—		43,600
Gain on sale of hotel properties	—		(38,082		)
Other expense(1)	1,293		1,696
Adjusted EBITDA	$	116,311	$	132,164

NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND COMPARABLE ADJUSTED EBITDA(2)
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(In thousands)
(Unaudited)
	Three Months Ended
	March 31,
	2019			2018
Net income	$	28,404		$	31,095
Interest expense, net	29,604			31,640
Income tax expense	6,123			5,797
Depreciation and amortization	48,778			54,015
EBITDA	112,909			122,547
Adjusted Property EBITDA of hotels not owned for entirety of periods presented	(353		)	(6,878		)
Equity-based compensation	2,109			2,403
Impairment of long-lived assets	—			43,600
Gain on sale of hotel properties	—			(38,082		)
Other expense(1)	1,293			1,696
Comparable Adjusted EBITDA(2)	$	115,958		$	125,286
(1) Includes loss on disposal of assets, non-operating (income) expense, including foreign currency transaction costs, and certain costs associated with dispositions. Loss on disposal of assets totaled $1.4 million and $1.5 million, respectively.
(2) Includes the results of 552 hotels owned and operated during the full three months ended March 31, 2019 and 2018.

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EXTENDED STAY AMERICA, INC.
NON-GAAP RECONCILIATION OF NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC.
COMMON SHAREHOLDERS TO FUNDS FROM OPERATIONS, ADJUSTED FUNDS FROM OPERATIONS
AND ADJUSTED FUNDS FROM OPERATIONS PER DILUTED PAIRED SHARE
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(In thousands, except per share and per Paired Share data)
(Unaudited)
	Three Months Ended
	March 31,
	2019			2018
Net income per Extended Stay America, Inc. common share - diluted	$	0.12		$	0.08
Net income attributable to Extended Stay America, Inc. common shareholders	$	21,934		$	14,852
Noncontrolling interests attributable to Class B common shares of ESH REIT	6,466			16,239
Real estate depreciation and amortization	47,433			52,748
Impairment of long-lived assets	—			43,600
Gain on sale of hotel properties	—			(38,082		)
Tax effect of adjustments to net income attributable to Extended Stay America, Inc. common shareholders	(7,400		)	(9,725		)
Funds From Operations	68,433			79,632
Debt modification and extinguishment costs	—			437
Tax effect of adjustments to Funds From Operations	—			(73		)
Adjusted Funds From Operations	$	68,433		$	79,996
Adjusted Funds From Operations per Paired Share- diluted	$	0.36		$	0.42
Weighted average Paired Shares outstanding – diluted	188,576			192,566

11

EXTENDED STAY AMERICA, INC.
NON-GAAP RECONCILIATION OF NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC.
COMMON SHAREHOLDERS TO PAIRED SHARE INCOME, ADJUSTED PAIRED SHARE INCOME
AND ADJUSTED PAIRED SHARE INCOME PER DILUTED PAIRED SHARE
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(In thousands, except per share and per Paired Share data)
(Unaudited)
	Three Months Ended March 31,
	2019			2018
Net income per Extended Stay America, Inc. common share - diluted	$	0.12		$	0.08
Net income attributable to Extended Stay America, Inc. common shareholders	$	21,934		$	14,852
Noncontrolling interests attributable to Class B common shares of ESH REIT	6,466			16,239
Paired Share Income	28,400			31,091
Debt modification and extinguishment costs	—			437
Impairment of long-lived assets	—			43,600
Gain on sale of hotel properties	—			(38,082		)
Other expense(1)	1,293			1,696
Tax effect of adjustments to Paired Share Income	(202		)	(1,277		)
Adjusted Paired Share Income	$	29,491		$	37,465
Adjusted Paired Share Income per Paired Share – diluted	$	0.16		$	0.19
Weighted average Paired Shares outstanding – diluted	188,576			192,566
(1) Includes loss on disposal of assets, non-operating (income) expense, including foreign currency transaction costs, and certain costs associated with dispositions. Loss on disposal of assets totaled $1.4 million and $1.5 million, respectively.

12

EXTENDED STAY AMERICA, INC.
TOTAL REVENUES AND NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
FOR THE YEARS ENDED DECEMBER 31, 2018 (ADJUSTED)(1) AND 2019 (OUTLOOK)
(In thousands)
(Unaudited)
Year Ended				Year Ending December 31, 2019
December 31, 2018				(Outlook)
(Adjusted) (1)				Low		High
$	1,204,429		Total revenues	$	1,230,000	$	1,250,000
$	211,756		Net income	$	188,202	$	212,310
124,870			Interest expense, net	126,000		126,000
42,076			Income tax expense	38,548		40,440
209,329			Depreciation and amortization	193,000		187,000
588,031			EBITDA	545,750		565,750
(21,422		)	Adjusted Property EBITDA of hotels not owned for entirety of periods presented	—		—
7,724			Equity-based compensation	8,250		8,250
43,600			Impairment of long-lived assets	—		—
(42,478		)	Gain on sale of hotel properties	—		—
2,860			Other expense (2)	6,000		6,000
$	578,315		Comparable Adjusted EBITDA	$	560,000	$	580,000
(1) 2018 results adjusted to reflect the results of 552 hotels owned and operated for the full year ended December 31, 2018.
(2) Includes loss on disposal of assets, non-operating (income) expense, including foreign currency transaction costs, and certain costs associated with acquisitions, dispositions and capital transactions.

13

EXTENDED STAY AMERICA, INC.
NON-GAAP RECONCILIATION OF NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC.
COMMON SHAREHOLDERS TO PAIRED SHARE INCOME, ADJUSTED PAIRED SHARE INCOME
AND ADJUSTED PAIRED SHARE INCOME PER DILUTED PAIRED SHARE
FOR THE YEARS ENDED DECEMBER 31, 2018 (ACTUAL) AND 2019 (OUTLOOK)
(In thousands, except per share and per Paired Share data)
(Unaudited)
	Year Ended				Year Ending December 31, 2019
	December 31, 2018				(Outlook)
	(Actual)				Low			High
	$	0.59		Net income per Extended Stay America, Inc. common share- diluted	$	0.43		$	0.50
	$	112,864		Net income attributable to Extended Stay America, Inc. common shareholders	$	80,721		$	94,962
	98,876			Noncontrolling interests attributable to Class B common shares of ESH REIT	107,465			117,332
	211,740			Paired Share Income	188,186			212,294
	1,621			Debt modification and extinguishment costs	—			—
	43,600			Impairment of long-lived assets	—			—
	(42,478		)	Gain on sale of hotel properties	—			—
	2,860			Other expense (1)	6,000			6,000
	(937		)	Tax effect of adjustments to Paired Share Income	(1,020		)	(960		)
	$	216,406		Adjusted Paired Share Income	$	193,166		$	217,334
	$	1.14		Adjusted Paired Share Income per Paired Share – diluted	$	1.02		$	1.14
	189,821			Weighted average Paired Shares outstanding – diluted	189,821			189,821
	(1) Includes loss on disposal of assets, non-operating (income) expense, including foreign currency transaction costs, and certain costs associated with acquisitions, dispositions and capital transactions.

14

EX-99.2

Q1 2019 Earnings Summary May 1, 2019 Extended Stay America, Inc. ESH Hospitality, Inc.

important disclosure information This presentation contains forward-looking statements within the meaning of the federal securities laws. These statements include, but are not limited to, statements related to our expectations regarding our business performance, financial results, liquidity and capital resources, capital expenditures, distribution policy and other non-historical statements, including the statements in the “2019 Outlook” section of this presentation. Forward looking statements involve known and unknown risks, uncertainties and other factors that may cause Extended Stay America, Inc.’s (“ESA”) and ESH Hospitality, Inc.’s (“ESH REIT,” and together with ESA, the “Company”) actual results or performance to differ from those projected in the forward-looking statements, possibly materially. For a description of factors that may cause the Company’s actual results or performance to differ from projected results or performance implied by forward-looking statements, please review the information under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” included in the Company’s combined annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 27, 2019 and other documents of the Company on file with or furnished to the SEC. Any forward-looking statements made in this presentation are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, will have the expected consequences to, or effects on, the Company, its business or operations. Except as required by law, the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. We caution you that actual results may differ materially from what is expressed, implied or forecasted by the Company’s forward-looking statements. This presentation includes certain non-GAAP financial measures, including Hotel Operating Profit, Hotel Operating Margin, EBITDA, Adjusted EBITDA, Funds from Operations (“FFO”), Adjusted Funds From Operations (“Adjusted FFO”), Adjusted FFO per diluted Paired Share, Paired Share Income, Adjusted Paired Share Income and Adjusted Paired Share Income per diluted Paired Share. These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with U.S. GAAP. Please refer to the Appendix of this presentation for a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with U.S. GAAP, and to the Company’s combined quarterly report on Form 10-Q filed with the SEC on May 1, 2019 for definitions of these non-GAAP measures. This presentation includes certain operating metrics presented on a comparable system-wide basis. The term “comparable system-wide” refers to hotels operated under the Extended Stay America brand and owned, franchised or managed by the Company for the full three months ended March 31, 2019 and 2018. For franchised or managed hotels, ESA earns certain fees based on a percentage of hotel revenues. Unless otherwise stated, the financial and operating data included in this presentation do not give effect to hotel dispositions. 2

Q1 2019 Operating Results and Financial Highlights comparable system-wide revenue per available net income (in millions)1 room (“RevPAR”) $47.50 $46.74 $31.1 $28.4 Q1 2018 Q1 2019 Q1 2018 Q1 2019 hotel operating margin2 adjusted FFO per diluted Paired Share1,2 52.2% $0.42 50.1% $0.36 Q1 2018 Q1 2019 Q1 2018 Q1 2019 adjusted EBITDA (in millions) 1,2 adjusted Paired Share income per diluted Paired Share1,2 $132.2 $0.19 $116.3 $0.16 Q1 2018 Q1 2019 Q1 2018 Q1 2019 1Net Income, Adjusted EBITDA, Adjusted FFO per diluted Paired Share and Adjusted Paired Shared Income per diluted Paired Share were affected by lost contribution from 26 hotels sold in 1Q 2018, 32 hotels sold in 3Q 2018 and 14 hotels sold in 4Q 2018. 2See Appendix for Hotel Operating Margin, Adjusted FFO per diluted Paired Share, Adjusted EBITDA and Adjusted Paired Share Income per diluted Paired Share reconciliations. 3

Quarterly Distribution and Select Balance Sheet Statistics quarterly distribution cash balance (in millions)2 per Paired Share1 +4.5% $304 $0.23 $303 $0.22 Q1 2018 Q1 2019 4Q 2018 1Q 2019 adjusted net debt / TTM adjusted EBITDA ratio3 debt outstanding (in millions)4 3.8X 3.7X $2,444 $2,441 4Q 2018 1Q 2019 4Q 2018 1Q 2019 ¹ Distribution dates of May 25, 2018 and May 30, 2019. 2 Includes restricted and unrestricted cash. 3 Net debt calculation is (gross debt – total restricted and unrestricted cash) divided by TTM Adjusted EBITDA on a 554 hotel basis for 4Q 2018 and 1Q 2019. 4 4 Gross debt outstanding (excludes discounts and deferred financing costs).

STAY Dividend History Consistently increased Paired Share dividend each year as a public company STAY DIVIDEND HISTORY REIT Regular C-Corp Regular REIT Special C-Corp Special $0.30 special dividend after $0.25 sale of 53 hotels $0.20 $0.15 $0.10 $0.05 5

Pipeline Update Company-Owned Pipeline & Recently Opened Hotels as of March 31, 2019 Under Option Pre-Development Under Construction Total Pipeline Opened YTD # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms 5 620 5 648 7 872 17 2,140 0 0 Third-Party Pipeline & Recently Opened Hotels as of March 31, 2019 Commitments Applications Executed Total Pipeline Opened YTD # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms 34 4,216 3 306 6 673 43 5,195 0 0 Definitions Under Option Locations with a signed purchase and sale agreement Pre-Development Land purchased, permitted and/or site work Under Construction Hotel is under construction Commitments Signed commitment to build hotel(s) by a third party Applications Third party filed franchise application with deposit Executed Franchise application approved, various stages of pre-development and/or under construction 6

Progress on ESA 2.0 new build construction © 2019 ESH Hospitality Strategies LLC © 2019 ESH Hospitality Strategies LLC © 2019 ESH Hospitality Strategies LLC Eight locations were under construction for new ESA 2.0 hotels at the end of 1Q 2019, including the Riverview location in Gibsonton, FL shown above 7

Q1 2019 Results, Q2 2019 Outlook1 and Full Year 2019 Outlook1 (in millions, except %) Q1 2019 Outlook Q1 2019 Actual RevPAR % D2 -2.5% to -0.5% -1.6% Adjusted EBITDA $114 $120 $116.3 1 (in millions, except %) Q2 2019 Outlook RevPAR % D2 0.0% to 1.5% Adjusted EBITDA $153 $158 1 4 (in millions, except %) 2019 Outlook (No change) Prior Outlook RevPAR % D2 0.0% to 2.0% 1.0% to 2.75% Net income $188 $212 $194 $208 Adjusted EBITDA3 $560 $580 $595 $610 Depreciation and amortization $187 $193 $213 $213 Net interest expense $126 $126 $130 $130 Effective tax rate 16.0% 17.0% 16.5% 17.0% Adjusted Paired Share income per diluted Paired $1.02 $1.14 $1.07 $1.15 Share Expected capital returns $220 $270 $260 $300 Capital expenditures $310 $360 $205 $235 1 Guidance for Q2 2019 and full year 2019 is as of May 1, 2019. 2 RevPAR % D shown on a comparable system-wide basis. Both 2019 and Q2 2019 RevPAR outlook includes an approximately 200 basis point negative impact from hurricane affected markets and renovation disruption. Q2 2019 RevPAR outlook also has an approximately 60 basis point negative impact from Easter holiday shift into April from March in 2018. 3 Lost contribution of approximately $21 million related to 72 hotel dispositions in 2018. 8

appendix

NON-GAAP RECONCILIATION OF NET INCOME TO HOTEL OPERATING PROFIT AND HOTEL OPERATING MARGIN FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018 (In thousands) (Unaudited) Three Months Ended March 31, 2019 2018 % Variance Net income $ 28,404 $ 31,095 (8.7)% Income tax expense 6,123 5,797 5.6% Interest expense, net 29,604 31,640 (6.4)% Other non-operating (income) expense (178) 197 190.4% Other income (27) (5) 440.0% Gain on sale of hotel properties - (38,082) (100.0)% Impairment of long-lived assets - 43,600 (100.0)% Depreciation and amortization 48,778 54,015 (9.7)% General and administrative expenses 23,027 24,961 (7.7)% Loss on disposal of assets(1) 1,376 1,492 (7.8)% Franchise and management fees (1,225) (415) 195.2% Other expenses from franchised and managed properties, net of other revenues 552 52 961.5% Hotel Operating Profit $ 136,434 $ 154,347 (11.6)% Room revenues $ 267,046 $ 290,210 (8.0)% Other hotel revenues 5,303 5,275 0.5% Total room and other hotel revenues $ 272,349 $ 295,485 (7.8)% Hotel Operating Margin 50.1% 52.2% (210) bps (1) Included in hotel operating expenses in the unaudited condensed consolidated statements of operations. 10

NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018 (In thousands) (Unaudited) Three Months Ended March 31, 2019 2018 Net income $ 28,404 $ 31,095 Interest expense, net 29,604 31,640 Income tax expense 6,123 5,797 Depreciation and amortization 48,778 54,015 EBITDA 112,909 122,547 Equity-based compensation 2,109 2,403 Impairment of long-lived assets - 43,600 Gain on sale of hotel properties - (38,082) Other expense(1) 1,293 1,696 Adjusted EBITDA $ 116,311 $ 132,164 (1) Includes loss on disposal of assets, non-operating (income) expense, including foreign currency transaction costs, and certain costs associated with dispositions. Loss on disposal of assets totaled $1.4 million and $1.5 million, respectively. 11

NON-GAAP RECONCILIATION OF NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS TO FUNDS FROM OPERATIONS, ADJUSTED FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS PER DILUTED PAIRED SHARE FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018 (In thousands, except per share and per Paired Share data) (Unaudited) Three Months Ended March 31, 2019 2018 Net income per Extended Stay America, Inc. common share - diluted $ 0.12 $ 0.08 Net income attributable to Extended Stay America, Inc. common shareholders $ 21,934 $ 14,852 Noncontrolling interests attributable to Class B common shares of ESH REIT 6,466 16,239 Real estate depreciation and amortization 47,433 52,748 Impairment of long-lived assets - 43,600 Gain on sale of hotel properties - (38,082) Tax effect of adjustments to net income attributable to Extended Stay America, Inc. common shareholders (7,400) (9,725) Funds From Operations 68,433 79,632 Debt modification and extinguishment costs - 437 Tax effect of adjustments to Funds From Operations - (73) Adjusted Funds from Operations $ 68,433 $ 79,996 Adjusted Funds from Operations per Paired Share – diluted $ 0.36 $ 0.42 Weighted average Paired Shares outstanding – diluted 188,576 192,566 12

NON-GAAP RECONCILIATION OF NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS TO PAIRED SHARE INCOME, ADJUSTED PAIRED SHARE INCOME AND ADJUSTED PAIRED SHARE INCOME PER DILUTED PAIRED SHARE FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018 (In thousands, except per share and per Paired Share data) (Unaudited) Three Months Ended March 31, 2019 2018 Net income per Extended Stay America, Inc. common share - diluted $ 0.12 $ 0.08 Net income attributable to Extended Stay America, Inc. common shareholders $ 21,934 $ 14,852 Noncontrolling interests attributable to Class B common shares of ESH REIT 6,466 16,239 Paired Share Income 28,400 31,091 Debt modification and extinguishment costs - 437 Impairment of long-lived assets - 43,600 Gain on sale of hotel properties - (38,082) Other expense(1) 1,293 1,696 Tax effect of adjustments to Paired Share Income (202) (1,277) Adjusted Paired Share Income $ 29,491 $ 37,465 Adjusted Paired Share Income per Paired Share – diluted $ 0.16 $ 0.19 Weighted average Paired Shares outstanding – diluted 188,576 192,566 (1) Includes loss on disposal of assets, non-operating (income) expense, including foreign currency transaction costs, and certain costs associated with dispositions. Loss on disposal of assets totaled $1.4 million and $1.5 million, respectively. 13

TOTAL REVENUES AND NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA FOR THE YEARS ENDED DECEMBER 31, 2019 (OUTLOOK) AND DECEMBER 31, 2018 (ADJUSTED)(1) (In thousands) (Unaudited) Year Ended Year Ending December 31, 2019 December 31, 2018 (Outlook) (Adjusted) (1) Low High $ 1,204,429 Total revenues $ 1,230,000 $ 1,250,000 $ 211,756 Net income $ 188,202 $ 212,310 124,870 Interest expense, net 126,000 126,000 42,076 Income tax expense 38,548 40,440 209,329 Depreciation and amortization 193,000 187,000 588,031 EBITDA 545,750 565,750 Adjusted Property EBITDA of hotels not owned (21,422) for entirety of period presented - - 7,724 Equity-based compensation 8,250 8,250 43,600 Impairment of long-lived assets - - (42,478) Gain on sale of hotel properties - - 2,860 Other expense(2) 6,000 6,000 $ 578,315 Comparable Adjusted EBITDA $ 560,000 $ 580,000 (1) 2018 results adjusted to reflect the results of 552 hotels owned and operated for the full year ended December 31, 2018. (2) Includes loss on disposal of assets, non-operating (income) expense, including foreign currency transaction costs, and certain costs associated with acquisitions, dispositions and capital transactions. 14

NON-GAAP RECONCILIATION OF NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS TO PAIRED SHARE INCOME, ADJUSTED PAIRED SHARE INCOME AND ADJUSTED PAIRED SHARE INCOME PER DILUTED PAIRED SHARE FOR THE YEARS ENDED DECEMBER 31, 2019 (OUTLOOK) AND DECEMBER 31, 2018 (ACTUAL) (In thousands, except per share and per Paired Share data) (Unaudited) Year Ended Year Ending December 31, 2019 December 31, 2018 (Outlook) (Actual) Low High Net income per Extended Stay America, Inc. common share - $ 0.59 $ 0.43 $ 0.50 diluted Net income attributable to Extended Stay America, Inc. common $ 112,864 shareholders $ 80,721 $ 94,962 Noncontrolling interests attributable to Class B common shares 98,876 of ESH REIT 107,465 117,332 211,740 Paired Share Income 188,186 212,294 1,621 Debt modification and extinguishment costs - - 43,600 Impairment of long-lived assets - - (42,478) Gain on sale of hotel properties - - 2,860 Other expense (1) 6,000 6,000 (937) Tax effect of adjustments to Paired Share Income (1,020) (960) $ 216,406 Adjusted Paired Share Income $ 193,166 $ 217,334 $ 1.14 Adjusted Paired Share Income per Paired Share – diluted $ 1.02 $ 1.14 189,821 Weighted average Paired Shares outstanding – diluted 189,821 189,821 (1) Includes loss on disposal of assets, non-operating (income) expense, including foreign currency transaction costs, and certain costs associated with acquisitions, dispositions and capital transactions. 15