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DEBT - REIT (Tables)

6 Months Ended

Jun. 30, 2019

Summary - The Company’s outstanding debt, net of unamortized debt discount and unamortized deferred financing costs, as of June 30, 2019 and December 31, 2018, consists of the following (dollars in thousands):



	Stated Amount⁽¹⁾		Carrying Amount						Unamortized Deferred Financing Costs
Loan	Stated Amount⁽¹⁾		June 30, 2019			December 31, 2018			June 30, 2019			December 31, 2018			Stated Interest Rate	Maturity Date
Term loan facility
ESH REIT Term Facility	$	1,300,000	$	1,127,040	⁽²⁾	$	1,132,259	⁽²⁾	$	9,416		$	10,546		LIBOR⁽³⁾ + 2.00%	8/30/2023	⁽¹⁾
Senior notes
2025 Notes	1,300,000		1,292,329		⁽⁴⁾	1,291,671		⁽⁴⁾	16,466			17,877			5.25%	5/1/2025
Revolving credit facilities
ESH REIT Revolving Credit Facility	350,000		—			—			1,193		⁽⁵⁾	1,469		⁽⁵⁾	LIBOR⁽³⁾ + 2.75%	8/30/2021
Corporation Revolving Credit Facility	50,000		—			—			237		⁽⁵⁾	292		⁽⁵⁾	LIBOR⁽³⁾ + 3.00%	8/30/2021
Unsecured Intercompany Facility
Unsecured Intercompany Facility⁽⁶⁾	75,000		—			—			—			—			5.00%	8/30/2023
Total			$	2,419,369		$	2,423,930		$	27,312		$	30,184

_________________________________

(1)

Amortization is interest only, except for the ESH REIT Term Facility (as defined below), which amortizes in equal quarterly installments of $2.8 million. In addition to scheduled amortization, subject to certain exceptions, annual mandatory prepayments of up to 50% of Excess Cash Flow, as defined, may be required under the ESH REIT 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 2019 based on ESH REIT’s Excess Cash Flow for the year ended December 31, 2018.


(2)	ESH REIT Term Facility is presented net of an unamortized debt discount of $3.9 million and $4.3 million as of June 30, 2019 and December 31, 2018, respectively.


(3)	As of June 30, 2019 and December 31, 2018, one-month LIBOR was 2.40% and 2.50%, respectively. As of June 30, 2019, $250.0 million of the ESH REIT Term Facility is subject to an interest rate swap at a fixed rate of 1.175%.


(4)	The 2025 Notes (as defined below) are presented net of an unamortized debt discount of $7.7 million and $8.3 million as of June 30, 2019 and December 31, 2018, respectively.


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


(6)	Any outstanding debt balances and interest expense, as applicable, owed from ESH REIT to the Corporation eliminate in consolidation.

Summary of Components of Interest Expense

The components of net interest expense during the three and six months ended June 30, 2019 and 2018, are as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Contractual interest ⁽¹⁾	$	28,765		$	29,076		$	57,482		$	58,038
Amortization of deferred financing costs and debt discount	1,996			1,997			3,993			4,012
Debt extinguishment and other costs ⁽²⁾	405			1,477			806			2,197
Interest income	(1,400		)	(125		)	(2,911		)	(182		)
Total	$	29,766		$	32,425		$	59,370		$	64,065

______________________


(1)	Includes dividends on shares of mandatorily redeemable Corporation preferred stock and is net of capitalized interest of $0.4 million, $0.1 million, $0.8 million and $0.1 million, respectively.

(2)

Includes interest expense on finance leases (see Note 12) and unused facility fees.

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 June 30, 2019 and December 31, 2018, consists of the following (dollars in thousands):



	Stated Amount⁽¹⁾		Carrying Amount						Unamortized Deferred Financing Costs
Loan	Stated Amount⁽¹⁾		June 30, 2019			December 31, 2018			June 30, 2019			December 31, 2018			Stated Interest Rate	Maturity Date
Term loan facility
ESH REIT Term Facility	$	1,300,000	$	1,127,040	⁽²⁾	$	1,132,259	⁽²⁾	$	9,416		$	10,546		LIBOR⁽³⁾ + 2.00%	8/30/2023	⁽¹⁾
Senior notes
2025 Notes	1,300,000		1,292,329		⁽⁴⁾	1,291,671		⁽⁴⁾	16,466			17,877			5.25%	5/1/2025
Revolving credit facility
ESH REIT Revolving Credit Facility	350,000		—			—			1,193		⁽⁵⁾	1,469		⁽⁵⁾	LIBOR⁽³⁾ + 2.75%	8/30/2021
Unsecured Intercompany Facility
Unsecured Intercompany Facility	75,000		—			—			—			—			5.00%	8/30/2023
Total			$	2,419,369		$	2,423,930		$	27,075		$	29,892

_________________________________

(1)


(2)	ESH REIT Term Facility is presented net of an unamortized debt discount of $3.9 million and $4.3 million as of June 30, 2019 and December 31, 2018, respectively.


(3)	As of June 30, 2019 and December 31, 2018, one-month LIBOR was 2.40% and 2.50%, respectively. As of June 30, 2019, $250.0 million of the ESH REIT Term Facility is subject to an interest rate swap at a fixed rate of 1.175%.


(4)	The 2025 Notes (as defined below) are presented net of an unamortized debt discount of $7.7 million and $8.3 million as of June 30, 2019 and December 31, 2018, respectively.


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

Summary of Components of Interest Expense

The components of net interest expense during the three and six months ended June 30, 2019 and 2018, are as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Contractual interest⁽¹⁾	$	28,622		$	28,932		$	57,197		$	57,752
Amortization of deferred financing costs and debt discount	1,969			1,969			3,939			3,957
Debt extinguishment and other costs⁽²⁾	359			1,416			714			2,107
Interest Income	(683		)	(33		)	(1,649		)	(37		)
Total	$	30,267		$	32,284		$	60,201		$	63,779

______________________


(1)	Net of capitalized interest of $0.4 million, $0.1 million, $0.8 million and $0.1 million, respectively.

(2)

Includes interest expense on finance leases (see Note 11) and unused facility fees.

- 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

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+ Details