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) – November 6, 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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share, of	STAY	Nasdaq Global Select Market
Extended Stay America, Inc. and Class B
Common Stock, par value $0.01 per share, of
ESH Hospitality, Inc., which are attached
and trade together as a Paired Share.

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 November 6, 2019, Extended Stay America, Inc. and ESH Hospitality, Inc. issued an earnings release announcing their results of operations for the three and nine months ended September 30, 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 November 7, 2019, Extended Stay America, Inc. and ESH Hospitality, Inc. will hold a conference call announcing their results of operations for the three and nine months ended September 30, 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 November 6, 2019, announcing results for the three and nine months ended September 30, 2019.
99.2	Management’s presentation materials, dated November 6, 2019.
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

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: November 6, 2019	By:	/s/ Christopher N. Dekle
		Name: Christopher N. Dekle
		Title: General Counsel

	ESH HOSPITALITY, INC.
Date: November 6, 2019	By:	/s/ Christopher N. Dekle
		Name: Christopher N. Dekle
		Title: General Counsel

EX-99.1

EXTENDED STAY AMERICA ANNOUNCES THIRD QUARTER 2019 RESULTS

-Net Income of $53.2 million in the Third Quarter

-Adjusted EBITDA¹ of $156.3 million in the Third Quarter

-Franchise pipeline expands 12% to 58 hotels in the Third Quarter

-Repurchased 4.0 million Paired Shares in the Third Quarter

CHARLOTTE, N.C. - November 6, 2019 (GlobeNewswire) - Extended Stay America, Inc. and ESH Hospitality, Inc. (together, the “Company”) (NASDAQ:STAY) today announced consolidated results for the three and nine months ended September 30, 2019.

Third Quarter 2019 Highlights

• Net Income of $53.2 million

• Total revenues of $332.7 million

• Comparable system-wide Revenue Per Available Room (“RevPAR”) declined 1.3%

• Adjusted EBITDA of $156.3 million

• Adjusted Funds from Operations (“Adjusted FFO”)¹ of $0.54 per diluted Paired Share

• Adjusted Paired Share Income¹ of $0.33 per diluted Paired Share

• $186 million in capital returns to shareholders for the first nine months of 2019

Extended Stay America’s President and Chief Executive Officer, Jonathan Halkyard, commented, “Our focus on core extended stay guests enabled us to outperform our competitive set yet again this quarter, a quarter which was characterized by slowing growth in the Economy and Mid-priced chain scales.”

Mr. Halkyard continued, “We have increased the pace of capital returns to shareholders in recent months and are on track to return more than 10% of our recent market capitalization to shareholders in 2019 through dividends and Paired Share repurchases. Capital returns remain a top priority for the Company with a strong balance sheet, a dividend yield in excess of 6% and more than $200 million remaining in repurchase authorization at the end of the third quarter.”

Financial and Operating Results

Total revenues for the three months ended September 30, 2019 were $332.7 million, a decrease of 5.2% over the same period in the prior year due to asset dispositions in 2018 and a decline in Comparable Company-owned RevPAR. Adjusting for asset dispositions in 2018, total revenues declined 0.6% during the third quarter. For the nine months ended September 30, 2019, total revenues declined 5.2% to $934.0 million, driven by asset dispositions. Adjusting for asset dispositions in 2018, total revenues were approximately flat for the nine months ended September 30, 2019.

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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Comparable system-wide RevPAR for the three months ended September 30, 2019 decreased 1.3% over the same period in 2018 to $54.81, driven by a 2.0% decline in Average Daily Rate (“ADR”), partially offset by a 70 basis point increase in occupancy. The decline in Comparable system-wide RevPAR was primarily driven by a decline in business transient and medium length stays, particularly in the month of September. Total Company-owned RevPAR increased 1.1% during the quarter, reflecting the sale of non-core hotels throughout 2018. Comparable system-wide RevPAR for the nine months ended September 30, 2019 declined 0.9% over the same period in 2018 driven by a 2.5% decline in ADR, partially offset by a 120 basis point increase in occupancy. Total Company-owned RevPAR for the nine months ended September 30, 2019 increased 1.7% over the same period in 2018, reflecting the sale of non-core hotels throughout 2018.

Hotel Operating Margin¹for the three months ended September 30, 2019 was 53.8% compared to 55.5% in the same period in 2018. While we continued our strategy to maximize targeted marketing efforts to our longest staying customers and other cost saving initiatives, these were offset by an increase in certain operating expenses, including hotel payroll expense, property insurance expense and property taxes, as well as a decline in Comparable Company-owned RevPAR. Hotel Operating Margin for the nine months ended September 30, 2019 was 52.9% compared to 54.8% in the same period of 2018. Property-level margins remain at industry leading levels.

Net income for the three months ended September 30, 2019 was $53.2 million compared to $75.7 million in the same period in 2018, a decrease of 29.7%. Net income this quarter was adversely impacted by a $6.7 million debt extinguishment charge related to the Company’s Term Loan modifications and Unsecured Notes offering in September 2019, a non-recurring gain on dispositions of $3.5 million in 2018, as well an impairment charge of $2.7 million, partially offset by a decrease in income tax expense. Net income for the nine months ended September 30, 2019 was $141.3 million compared to $172.4 million in the same period in 2018, a decrease of 18.0%. The decline in net income for both the three and nine months ended September 30, 2019 was primarily due to a decline in Hotel Operating Margin, partially offset by lower depreciation expense.

Adjusted EBITDA for the three months ended September 30, 2019 was $156.3 million, a decline of 10.0% compared to the same period in 2018. The decline in Adjusted EBITDA was due to asset dispositions in 2018 resulting in lost contribution of $6.8 million, a decline in Comparable Company-owned RevPAR and an increase in Comparable Company-owned hotel operating expenses. Adjusted EBITDA excludes non-cash equity-based compensation expense of $1.9 million, $2.7 million in impairment expense and $1.8 million in other expenses. Adjusted EBITDA for the nine months ended September 30, 2019 was $426.3 million, a decline of 9.9%, due to asset dispositions in 2018 resulting in lost contribution of $20.5 million and an increase in comparable hotel operating expenses.

Adjusted FFO for the three months ended September 30, 2019 was $101.5 million compared to $115.1 million in the same period in 2018. The decline in Adjusted FFO was due to an increase in Comparable Company-owned hotel operating expenses and a decline in Comparable Company-owned RevPAR. Adjusted FFO per diluted Paired Share was $0.54 compared to $0.61 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 FFO for the nine months ended September 30, 2019 was $269.8 million, or $1.43 per diluted Paired Share, compared to $305.0 million, or $1.60 per diluted

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Paired Share, in the same period in 2018.

Adjusted Paired Share Income for the three months ended September 30, 2019 was $62.6 million, or $0.33 per diluted Paired Share, compared to $74.0 million, or $0.39 per diluted Paired Share, in the same period in 2018.The decline in Adjusted Paired Share Income was due to a decline in Hotel Operating Margin and Comparable Company-owned RevPAR, partially offset by lower depreciation 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. Adjusted Paired Share Income per diluted Paired Share for the nine months ended September 30, 2019 was $0.81 compared to $0.94 in the same period in 2018.

Capital Expenditures

The Company invested $65.1 million in capital expenditures during the third quarter of 2019. This includes $10.2 million in renovation capital, $10.9 million in IT capital and $20.2 million in capital for ESA 2.0 hotel development and land acquisitions. The Company invested $178.0 million in capital expenditures during the first nine months of 2019.

Hotel and Development Pipeline

As of September 30, 2019, the Company had a pipeline of 77 hotels representing approximately 9,400 rooms.

Company-Owned Pipeline & Recently Opened Hotels as of September 30, 2019
Under Option		Pre-Development		Under Construction		Total Pipeline		Opened YTD
# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms
4	496	6	752	9	1,140	19	2,388	—	—
Third-Party Pipeline & Recently Opened Hotels as of September 30, 2019
Commitments		Applications		Executed		Total Pipeline		Opened YTD
# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms	# Hotels	# Rooms
40	4,928	7	868	11	1,261	58	7,057	1	115

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 a certain number of hotels 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

Distributions and Share Repurchases

On November 6, 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 third quarter of 2019. The distributions are payable on December 4, 2019 to shareholders of record as of November 20, 2019. The Company repurchased 4.0 million Paired Shares during the third quarter for an aggregate purchase of $57.5 million. Since the end of the third quarter, the Company has repurchased an additional 2.0 million Paired Shares

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for an aggregate purchase price of $28.8 million. The Company’s total remaining repurchase authorization was approximately $177 million as of close of the market today.

2019 Outlook

The Company’s 2019 Outlook is updated as follows:

in millions, except % and # of hotels	Low		High
# of hotels owned on 12/31/19	556
Total Revenues	$	1,205	$	1,215
Comparable system-wide RevPAR % Δ1		-1.75%		-1.25%
Net income	$	162	$	176
Adjusted Paired Share Income/Paired Share	$	0.93	$	1.01
Adjusted EBITDA2	$	535	$	545
Depreciation and amortization	$	190	$	195
Net interest expense	$	129	$	129
Effective tax rate		15.75%		16.75%
Capital expenditures	$	235	$	275
Expected capital returns	$	285	$	315

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

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

Webcast and Conference Call Details

The Company will host a conference call on Thursday, November 7, 2019 at 8:00 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 1-855-327-6837 for domestic callers or 1-631-891-4304 for international callers. A telephone replay will be available from shortly after the call until November 14, 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 10007887.

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

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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, capital returns, 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.

About Extended Stay America

Extended Stay America® is the leading brand in the mid-priced extended stay segment in the U.S. with 626 hotels. 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 72 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 AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
(In thousands, except per share data)
(Unaudited)
Three Months Ended									Nine Months Ended
September 30,									September 30,
2019			2018			% Variance			2019			2018			% Variance
							REVENUES:
$	320,669		$	340,917		(5.9)%	Room revenues		$	899,329		$	958,075		(6.1)%
6,475			5,943			9.0%	Other hotel revenues		17,848			16,710			6.8%
1,351			864			56.4%	Franchise and management fees		4,023			2,140			88.0%
328,495			347,724			(5.5)%			921,200			976,925			(5.7)%
4,200			3,352			25.3%	Other revenues from franchised and managed properties		12,821			8,419			52.3%
332,695			351,076			(5.2)%	Total revenues		934,021			985,344			(5.2)%
							OPERATING EXPENSES:
152,913			156,341			(2.2)%	Hotel operating expenses		437,111			443,025			(1.3)%
22,292			21,242			4.9%	General and administrative expenses		67,606			69,710			(3.0)%
49,748			52,138			(4.6)%	Depreciation and amortization		147,543			159,652			(7.6)%
2,679			—			n/a	Impairment of long-lived assets		2,679			43,600			(93.9)%
227,632			229,721			(0.9)%			654,939			715,987			(8.5)%
4,699			3,449			36.2%	Other expenses from franchised and managed properties		14,342			8,762			63.7%
232,331			233,170			(0.4)%	Total operating expenses		669,281			724,749			(7.7)%
—			3,517			n/a	GAIN ON SALE OF HOTEL PROPERTIES		—			41,599			n/a
3			39			(92.3)%	OTHER INCOME		31			501			(93.8)%
100,367			121,462			(17.4)%	INCOME FROM OPERATIONS		264,771			302,695			(12.5)%
101			(251		)	(140.2)%	OTHER NON-OPERATING EXPENSE (INCOME)		(248		)	48			(616.7)%
36,535			31,007			17.8%	INTEREST EXPENSE, NET		95,905			95,072			0.9%
63,731			90,706			(29.7)%	INCOME BEFORE INCOME TAX EXPENSE		169,114			207,575			(18.5)%
10,501			15,014			(30.1)%	INCOME TAX EXPENSE		27,822			35,218			(21.0)%
53,230			75,692			(29.7)%	NET INCOME		141,292			172,357			(18.0)%
(12,159		)	(3,790		)	220.8%	NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		(24,790		)	(20,547		)	20.7%
$	41,071		$	71,902		(42.9)%	NET INCOME ATTRIBUTABLE TO EXTENDED STAY AMERICA, INC. COMMON SHAREHOLDERS		$	116,502		$	151,810		(23.3)%
$	0.22		$	0.38		(42.2)%	NET INCOME PER EXTENDED STAY AMERICA, INC. COMMON SHARE - DILUTED		$	0.62		$	0.80		(22.5)%
187,015			189,253				WEIGHTED-AVERAGE EXTENDED STAY AMERICA, INC. COMMON SHARES OUTSTANDING - DILUTED		188,317			190,111
							CONSOLIDATED BALANCE SHEET DATA
							AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
							(In thousands)
							(Unaudited)
								September 30,				December 31,
									2019			2018
							Cash and cash equivalents		$	489,767		$	287,458
							Restricted cash		$	13,572		$	15,878
							Total assets		$	4,155,377		$	3,924,210
							Total debt, net of unamortized deferred financing costs and debt discounts (1)		$	2,639,498		$	2,402,637
							Total equity		$	1,266,471		$	1,310,639
							(1) Unamortized deferred financing costs and debt discounts totaled $48.5 million and $41.1 million as of September 30, 2019 and December 31, 2018, respectively.

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EXTENDED STAY AMERICA, INC.
OPERATING METRICS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
(Unaudited)
COMPARABLE SYSTEM-WIDE OPERATING METRICS (1)
Three Months Ended					Nine Months Ended
September 30,					September 30,
2019	2018	Variance			2019	2018	Variance
624	624	—		Number of hotels (as of September 30)	623	623	—
68,749	68,749	—		Number of rooms (as of September 30)	68,634	68,634	—
80.8%	80.1%	70 bps		Comparable System-Wide Occupancy(1)	77.3%	76.1%	120 bps
$67.87	$69.27	(2.0	)%	Comparable System-Wide ADR(1)	$67.02	$68.77	(2.5	)%
$54.81	$55.51	(1.3	)%	Comparable System-Wide RevPAR(1)	$51.83	$52.31	(0.9	)%

COMPARABLE COMPANY-OWNED OPERATING METRICS (2)
Three Months Ended					Nine Months Ended
September 30,					September 30,
2019	2018	Variance			2019	2018	Variance
553	553	—		Number of hotels (as of September 30)	552	552	—
61,379	61,379	—		Number of rooms (as of September 30)	61,264	61,264	—
80.8%	80.7%	10 bps		Comparable Company-Owned Occupancy(2)	77.4%	76.7%	70 bps
$70.09	$71.23	(1.6	)%	Comparable Company-Owned ADR(2)	$69.15	$70.62	(2.1	)%
$56.66	$57.46	(1.4	)%	Comparable Company-Owned RevPAR(2)	$53.55	$54.20	(1.2	)%
				Renovation Displacement Data (in thousands, except percentages):
5,647	5,647	—		Total available room nights	16,725	16,725	—
10	—	10		Room nights displaced from renovation	45	—	45
0.2%	0.0%	20 bps		% of available room nights displaced	0.3%	0.0%	30 bps

COMPANY-OWNED OPERATING METRICS (3)
Three Months Ended					Nine Months Ended
September 30,					September 30,
2019	2018	Variance			2019	2018	Variance
554	567	(13	)	Number of hotels (as of September 30)	554	567	(13	)
61,486	62,748	(1,262	)	Number of rooms (as of September 30)	61,486	62,748	(1,262	)
80.8%	80.2%	60 bps		Company-Owned Occupancy(3)	77.4%	76.0%	140 bps
$70.10	$69.85	0.4	%	Company-Owned ADR(3)	$69.15	$69.24	(0.1	)%
$56.66	$56.02	1.1	%	Company-Owned RevPAR(3)	$53.53	$52.65	1.7	%
(1) Includes hotels owned, franchised or managed for the full three and nine months ended September 30, 2019 and 2018, respectively.
(2) Includes hotels owned and operated by the Company for the full three and nine months ended September 30, 2019 and 2018, respectively.
(3) Includes results of operations of the Company's owned and operated hotels during the periods presented, which is summarized below:

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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	(32)	(3,456)	567	62,748
November 2018	1	107	568	62,855
November 2018	(14)	(1,369)	554	61,486
September 30, 2019	—	—	554	61,486

EXTENDED STAY AMERICA, INC.
NON-GAAP RECONCILIATION OF NET INCOME TO HOTEL OPERATING PROFIT AND HOTEL OPERATING MARGIN
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
(In thousands)
(Unaudited)
Three Months Ended								Nine Months Ended
September 30,								September 30,
2019			2018			Variance		2019			2018			Variance
$	53,230		$	75,692		(29.7)%	Net income	$	141,292		$	172,357		(18.0)%
10,501			15,014			(30.1)%	Income tax expense	27,822			35,218			(21.0)%
36,535			31,007			17.8%	Interest expense, net	95,905			95,072			0.9%
101			(251		)	(140.2)%	Other non-operating expense (income)	(248		)	48			(616.7)%
(3		)	(39		)	(92.3)%	Other income	(31		)	(501		)	(93.8)%
—			(3,517		)	n/a	Gain on sale of hotel properties	—			(41,599		)	n/a
2,679			—			n/a	Impairment of long-lived assets	2,679			43,600			(93.9)%
49,748			52,138			(4.6)%	Depreciation and amortization	147,543			159,652			(7.6)%
22,292			21,242			4.9%	General and administrative expenses	67,606			69,710			(3.0)%
1,660			1,949			(14.8)%	Loss on disposal of assets (1)	5,037			2,617			92.5%
(1,351		)	(864		)	56.4%	Franchise and management fees	(4,023		)	(2,140		)	88.0%
499			97			414.4%	Other expenses from franchised and managed properties, net of other revenues	1,521			343			343.4%
$	175,891		$	192,468		(8.6)%	Hotel Operating Profit	$	485,103		$	534,377		(9.2)%
$	320,669		$	340,917		(5.9)%	Room revenues	$	899,329		$	958,075		(6.1)%
6,475			5,943			9.0%	Other hotel revenues	17,848			16,710			6.8%
$	327,144		$	346,860		(5.7)%	Total room and other hotel revenues	$	917,177		$	974,785		(5.9)%
53.8		%	55.5		%	(170) bps	Hotel Operating Margin	52.9		%	54.8		%	(190) bps
(1) Included in hotel operating expenses in the unaudited condensed consolidated statements of operations.

8

EXTENDED STAY AMERICA, INC.
NON-GAAP RECONCILIATION OF NET INCOME TO COMPARABLE HOTEL(2)
OPERATING PROFIT AND COMPARABLE HOTEL OPERATING MARGIN
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
(In thousands)
(Unaudited)
Three Months Ended								Nine Months Ended
September 30,								September 30,
2019			2018			Variance		2019			2018			Variance
$	53,230		$	75,692		(29.7)%	Net income	$	141,292		$	172,357		(18.0)%
10,501			15,014			(30.1)%	Income tax expense	27,822			35,218			(21.0)%
36,535			31,007			17.8%	Interest expense, net	95,905			95,072			0.9%
101			(251		)	(140.2)%	Other non-operating expense (income)	(248		)	48			(616.7)%
(3		)	(39		)	(92.3)%	Other income	(31		)	(501		)	(93.8)%
—			(3,517		)	n/a	Gain on sale of hotel properties	—			(41,599		)	n/a
2,679			—			n/a	Impairment of long-lived assets	2,679			43,600			(93.9)%
49,748			52,138			(4.6)%	Depreciation and amortization	147,543			159,652			(7.6)%
22,292			21,242			4.9%	General and administrative expenses	67,606			69,710			(3.0)%
1,660			1,949			(14.8)%	Loss on disposal of assets(1)	5,037			2,617			92.5%
(1,351		)	(864		)	56.4%	Franchise and management fees	(4,023		)	(2,140		)	88.0%
499			97			414.4%	Other expenses from franchised and managed properties, net of other revenues	1,521			343			343.4%
(289		)	(6,751		)	(95.7)%	Hotel operating profit of hotels not owned for entirety of periods presented	(1,235		)	(20,518		)	(94.0)%
$	175,602		$	185,717		(5.4)%	Comparable Hotel Operating Profit(2)	$	483,868		$	513,859		(5.8)%
$	320,669		$	340,917		(5.9)%	Room revenues	$	899,329		$	958,075		(6.1)%
6,475			5,943			9.0%	Other hotel revenues	17,848			16,710			6.8%
(571		)	(16,363		)	(96.5)%	Total revenues of hotels not owned for entirety of periods presented	(2,877		)	(51,788		)	(94.4)%
$	326,573		$	330,497		(1.2)%	Comparable total room and other hotel revenues	$	914,300		$	922,997		(0.9)%
53.8		%	56.2		%	(240) bps	Comparable Hotel Operating Margin(2)	52.9		%	55.7		%	(280) bps
(1) Included in hotel operating expenses in the unaudited condensed consolidated statements of operations.
(2) Includes the results of 553 and 552 hotels owned and operated during the full three and nine months ended September 30, 2019 and 2018, respectively.

9

EXTENDED STAY AMERICA, INC.
NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
(In thousands)
(Unaudited)
Three Months Ended						Nine Months Ended
September 30,						September 30,
2019		2018				2019		2018
$	53,230	$	75,692		Net income	$	141,292	$	172,357
36,535		31,007			Interest expense, net	95,905		95,072
10,501		15,014			Income tax expense	27,822		35,218
49,748		52,138			Depreciation and amortization	147,543		159,652
150,014		173,851			EBITDA	412,562		462,299
1,876		1,811			Equity-based compensation	6,131		5,999
2,679		—			Impairment of long-lived assets	2,679		43,600
—		(3,517		)	Gain on sale of hotel properties	—		(41,599		)
1,756		1,532			Other expense(1)	4,907		2,879
$	156,325	$	173,677		Adjusted EBITDA	$	426,279	$	473,178

NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND COMPARABLE ADJUSTED EBITDA(2)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
(In thousands)
(Unaudited)
Three Months Ended							Nine Months Ended
September 30,							September 30,
2019			2018				2019			2018
$	53,230		$	75,692		Net income	$	141,292		$	172,357
36,535			31,007			Interest expense, net	95,905			95,072
10,501			15,014			Income tax expense	27,822			35,218
49,748			52,138			Depreciation and amortization	147,543			159,652
150,014			173,851			EBITDA	412,562			462,299
(289		)	(6,751		)	Adjusted Property EBITDA of hotels not owned for entirety of periods presented	(1,235		)	(20,518		)
1,876			1,811			Equity-based compensation	6,131			5,999
2,679			—			Impairment of long-lived assets	2,679			43,600
—			(3,517		)	Gain on sale of hotel properties	—			(41,599		)
1,756			1,532			Other expense(1)	4,907			2,879
$	156,036		$	166,926		Comparable Adjusted EBITDA(2)	$	425,044		$	452,660
(1) Includes loss on disposal of assets, non-operating expense (income), including foreign currency transaction costs, and certain costs associated with acquisitions and dispositions. Loss on disposal of assets totaled $1.7 million, $1.9 million, $5.0 million and $2.6 million, respectively.
(2) Includes results of 553 and 552 hotels owned and operated during the full three and nine months ended September 30, 2019 and 2018, respectively.

10

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 AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
(In thousands, except per share and per Paired Share data)
(Unaudited)
Three Months Ended							Nine Months Ended
September 30,							September 30,
2019			2018				2019			2018
$	0.22		$	0.38		Net income per Extended Stay America, Inc. common share - diluted	$	0.62		$	0.80
$	41,071		$	71,902		Net income attributable to Extended Stay America, Inc. common shareholders	$	116,502		$	151,810
12,155			3,786			Noncontrolling interests attributable to Class B common shares of ESH REIT	24,778			20,535
48,247			50,807			Real estate depreciation and amortization	143,335			155,788
2,679			—			Impairment of long-lived assets	2,679			43,600
—			(3,517		)	Gain on sale of hotel properties	—			(41,599		)
(8,250		)	(7,897		)	Tax effect of adjustments to net income attributable to Extended Stay America, Inc. common shareholders	(23,132		)	(26,502		)
95,902			115,081			Funds from Operations	264,162			303,632
6,716			—			Debt modification and extinguishment costs	6,716			1,621
(1,088		)	—			Tax effect of adjustments to Funds from Operations	(1,088		)	(274		)
$	101,530		$	115,081		Adjusted Funds from Operations	$	269,790		$	304,979
$	0.54		$	0.61		Adjusted Funds from Operations per Paired Share - diluted	$	1.43		$	1.60
187,015			189,253			Weighted average Paired Shares outstanding - diluted	188,317			190,111

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 AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
(In thousands, except per share and per Paired Share data)
(Unaudited)
Three Months Ended September 30,							Nine Months Ended September 30,
2019			2018				2019			2018
$	0.22		$	0.38		Net income per Extended Stay America, Inc. common share - diluted	$	0.62		$	0.80
$	41,071		$	71,902		Net income attributable to Extended Stay America, Inc. common shareholders	$	116,502		$	151,810
12,155			3,786			Noncontrolling interests attributable to Class B common shares of ESH REIT	24,778			20,535
53,226			75,688			Paired Share Income	141,280			172,345
6,716			—			Debt modification and extinguishment costs	6,716			1,621
2,679			—			Impairment of long-lived assets	2,679			43,600
—			(3,517		)	Gain on sale of hotel properties	—			(41,599		)
1,756			1,532			Other expense(1)	4,907			2,879
(1,806		)	331			Tax effect of adjustments to Paired Share Income	(2,299		)	(1,088		)
$	62,571		$	74,034		Adjusted Paired Share Income	$	153,283		$	177,758
$	0.33		$	0.39		Adjusted Paired Share Income per Paired Share – diluted	$	0.81		$	0.94
187,015			189,253			Weighted average Paired Shares outstanding – diluted	188,317			190,111
(1) Includes loss on disposal of assets, non-operating expense (income), including foreign currency transaction costs, and certain costs associated with acquisitions and dispositions. Loss on disposal of assets totaled $1.7 million, $1.9 million, $5.0 million and $2.6 million, respectively.

12

EXTENDED STAY AMERICA, INC.
TOTAL REVENUES AND NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND COMPARABLE ADJUSTED EBITDA
FOR YEARS ENDED DECEMBER 31, 2018 (ADJUSTED)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	$	1,205,000	$	1,215,000
$	211,756		Net income	$	161,772	$	176,353
124,870			Interest expense, net	129,000		129,000
42,076			Income tax expense	32,549		32,968
209,329			Depreciation and amortization	195,000		190,000
588,031			EBITDA	518,321		528,321
(21,422		)	Adjusted Property EBITDA of hotels not owned for entirety of periods presented	—		—
7,724			Equity-based compensation	8,000		8,000
43,600			Impairment of long-lived assets	2,679		2,679
(42,478		)	Gain on sale of hotel properties	—		—
2,860			Other expense(2)	6,000		6,000
$	578,315		Comparable Adjusted EBITDA	$	535,000	$	545,000
(1) 2018 results adjusted to reflect 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	$	0.38		$	0.43
$	112,864		Net income attributable to Extended Stay America, Inc. common shareholders	$	71,234		$	79,893
98,876			Noncontrolling interests attributable to Class B common shares of ESH REIT	90,522			96,444
211,740			Paired Share Income	161,756			176,337
1,621			Debt modification and extinguishment costs	6,716			6,716
43,600			Impairment of long-lived assets	2,679			2,679
(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	(2,579		)	(2,425		)
$	216,406		Adjusted Paired Share Income	$	174,572		$	189,307
$	1.14		Adjusted Paired Share Income per Paired Share – diluted	$	0.93		$	1.01
189,821			Weighted average Paired Shares outstanding – diluted	187,000			187,000
(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

Q3 2019 Earnings Summary November 6, 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, capital returns, 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 November 6, 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, including those owned, franchised or managed by the Company, for the three and nine months ended September 30, 2019 and 2018. For franchised or managed hotels, ESA earns certain fees based on a percentage of hotel revenues. 2

Q3 2019 Operating Results and Financial Highlights comparable system-wide revenue per available net income (in millions)1 room (“RevPAR”) $75.7 $55.51 $54.81 $53.2 Q3 2018 Q3 2019 Q3 2018 Q3 2019 hotel operating margin2 adjusted FFO per diluted Paired Share1,2 $0.61 55.5% 53.8% $0.54 Q3 2018 Q3 2019 Q3 2018 Q3 2019 adjusted EBITDA (in millions) 1,2 adjusted Paired Share income per diluted Paired Share1,2 $173.7 $0.39 $156.3 $0.33 Q3 2018 Q3 2019 Q3 2018 Q3 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 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

1st Nine Months 2019 Operating Results and Financial Highlights comparable system-wide RevPAR net income (in millions)1 $52.31 $51.83 $172.4 $141.3 Q1-Q3 2018 Q1-Q3 2019 Q1-Q3 2018 Q1-Q3 2019 hotel operating margin2 adjusted FFO per diluted Paired Share1,2 54.8% 52.9% $1.60 $1.43 Q1-Q3 2018 Q1-Q3 2019 Q1-Q3 2018 Q1-Q3 2019 adjusted EBITDA (in millions) 1,2 adjusted Paired Share income per diluted Paired Share1,2 $473.2 $0.94 $426.3 $0.81 Q1-Q3 2018 Q1-Q3 2019 Q1-Q3 2018 Q1-Q3 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. 4

Quarterly Distribution and Select Balance Sheet Statistics quarterly distribution cash balance (in millions)2 per Paired Share1 +4.5% $503 $0.23 $0.22 $303 Q3 2018 Q3 2019 2Q 2019 3Q 2019 adjusted net debt / TTM adjusted EBITDA ratio3 debt outstanding (in millions)4 $2,688 4.0X $2,438 3.8X 2Q 2019 3Q 2019 2Q 2019 3Q 2019 ¹ Distribution dates of November 29, 2018 and December 4, 2019. 2 Includes restricted and unrestricted cash. 3 Calculation is (gross debt – total restricted and unrestricted cash) divided by TTM Adjusted EBITDA on a 554 owned hotel basis for 2Q 2019 and 3Q 2019. 5 4 Gross debt outstanding (excludes discounts and deferred financing costs).

Consistently strong capital returns to shareholders Capital Returns to Shareholders STAY DIVIDEND HISTORY (in millions) REIT Regular C-Corp Regular $340 REIT Special C-Corp Special $300 $0.30 $251 $221 $0.25 $0.20 $135 $0.15 $108 $0.10 $0.05 2014 2015 2016 2017 2018 2019* -STAY will have returned more than $1.3 billion to shareholders as a public company through dividends and Paired Share repurchases by the end of 2019, approximately 50% of our recent market capitalization -STAY has increased its quarterly dividend each year as a public company -STAY has de-levered from 5.4x to 4.0x during that same period *Midpoint of 2019 Capital Return guidance as of 11/6/2019 6

Pipeline Update Company Owned Pipeline & Recently Opened Hotels as of September 30, 2019 Under Option Pre-Development Under Construction Total Pipeline Opened YTD # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms 4 496 6 752 9 1,140 19 2,388 0 0 Third Party Pipeline & Recently Opened Hotels as of September 30, 2019 Commitments Applications Executed Total Pipeline Opened YTD # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms # Hotels # Rooms 40 4,928 7 868 11 1,261 58 7,057 1 115 19 15 59 42 Definitions Under Option Locations with a signed purchase and sale agreement Pre-Development Land purchased, permitting and/or site work Under Construction Hotel is under construction Commitments Signed commitment to build a certain number of hotels 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 7

Q3 2019 Results, Q4 2019 Outlook1 and Full Year 2019 Outlook1 (in millions, except %) Q3 2019 Outlook Q3 2019 Actual RevPAR % D -1.0% to 1.0% -1.3% Adjusted EBITDA $157 $163 $156.3 1 (in millions, except %) Q4 2019 Outlook RevPAR % D2 -4.5% to -2.0% Adjusted EBITDA $109 $119 1 4 (in millions, except %) 2019 Outlook Prior Outlook RevPAR % D2 -1.75% to -1.25% 1.0% to 2.75% Net income $162 $176 $194 $208 Adjusted EBITDA3 $535 $545 $595 $610 Depreciation and amortization $190 $195 $213 $213 Net interest expense $129 $129 $130 $130 Effective tax rate 15.75% 16.75% 16.5% 17.0% Adjusted Paired Share income $0.93 $1.01 $1.07 $1.15 per diluted Paired Share Expected capital returns $285 $315 $260 $300 Capital expenditures $235 $275 $205 $235 1 Guidance for Q4 2019 and full year 2019 is as of November 6, 2019. 2 RevPAR % D shown on a comparable system-wide basis. 2019 outlook includes an approximately 200 basis point negative impact from hurricane related markets and renovation disruption. 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 AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 Variance 2019 2018 Variance $ 53,230 $ 75,692 (29.7)% Net income $ 141,292 $ 172,357 (18.0)% 10,501 15,014 (30.1)% Income tax expense 27,822 35,218 (21.0)% 36,535 31,007 17.8% Interest expense, net 95,905 95,072 0.9% 101 (251) (140.2)% Other non-operating expense (income) (248) 48 (616.7)% (3) (39) (92.3)% Other income (31) (501) (93.8)% - (3,517) n/a Gain on sale of hotel properties - (41,599) n/a 2,679 - n/a Impairment of long-lived assets 2,679 43,600 (93.9)% 49,748 52,138 (4.6)% Depreciation and amortization 147,543 159,652 (7.6)% 22,292 21,242 4.9% General and administrative expenses 67,606 69,710 (3.0)% 1,660 1,949 (14.8)% Loss on disposal of assets (1) 5,037 2,617 92.5% (1,351) (864) 56.4% Franchise and management fees (4,023) (2,140) 88.0% Other expenses from franchised and managed properties, 499 97 414.4% net of other revenues 1,521 343 343.4% $ 175,891 $ 192,468 (8.6)% Hotel Operating Profit $ 485,103 $ 534,377 (9.2)% $ 320,669 $ 340,917 (5.9)% Room revenues $ 899,329 $ 958,075 (6.1)% 6,475 5,943 9.0% Other hotel revenues 17,848 16,710 6.8% $ 327,144 $ 346,860 (5.7)% Total room and other hotel revenues $ 917,177 $ 974,785 (5.9)% 53.8% 55.5% (170) bps Hotel Operating Margin 52.9% 54.8% (190) 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 AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 $ 53,230 $ 75,692 Net income $ 141,292 $ 172,357 36,535 31,007 Interest expense, net 95,905 95,072 10,501 15,014 Income tax expense 27,822 35,218 49,748 52,138 Depreciation and amortization 147,543 159,652 150,014 173,851 EBITDA 412,562 462,299 1,876 1,811 Equity-based compensation 6,131 5,999 2,679 - Impairment of long-lived assets 2,679 43,600 - (3,517) Gain on sale of hotel properties - (41,599) 1,756 1,532 Other expense(1) 4,907 2,879 $ 156,325 $ 173,677 Adjusted EBITDA $ 426,279 $ 473,178 (1) Includes loss on disposal of assets, non-operating expense (income), including foreign currency transaction costs, and certain costs associated with acquisitions and dispositions. Loss on disposal of assets totaled $1.7 million, $1.9 million, $5.0 million and $2.6 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 AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 (In thousands, except per share and per Paired Share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Net income per Extended Stay America, Inc. common share - $ 0.22 $ 0.38 $ 0.62 $ 0.80 diluted Net income attributable to Extended Stay America, Inc. common $ 41,071 $ 71,902 $ 116,502 $ 151,810 shareholders Noncontrolling interests attributable to Class B 12,155 3,786 24,778 20,535 common shares of ESH REIT 48,247 50,807 Real estate depreciation and amortization 143,335 155,788 2,679 - Impairment of long-lived assets 2,679 43,600 - (3,517) Gain on sale of hotel properties - (41,599) Tax effect of adjustments to net income attributable to Extended (8,250) (7,897) (23,132) (26,502) Stay America, Inc. common shareholders 95,902 115,081 Funds from Operations 264,162 303,632 6,716 - Debt modification and extinguishment costs 6,716 1,621 (1,088) - Tax effect of adjustments to Funds from Operations (1,088) (274) $ 101,530 $ 115,081 Adjusted Funds from Operations $ 269,790 $ 304,979 Adjusted Funds from Operations $ 0.54 $ 0.61 per Paired Share – diluted $ 1.43 $ 1.60 Weighted average Paired Shares 187,015 189,253 outstanding – diluted 188,317 190,111 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 AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 (In thousands, except per share and per Paired Share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Net income per Extended Stay America, Inc. common share - $ 0.22 $ 0.38 $ 0.62 $ 0.80 diluted Net income attributable to Extended Stay America, Inc. common $ 41,071 $ 71,902 shareholders $ 116,502 $ 151,810 Noncontrolling interests attributable to Class B 12,155 3,786 common shares of ESH REIT 24,778 20,535 53,226 75,688 Paired Share Income 141,280 172,345 6,716 - Debt modification and extinguishment costs 6,716 1,621 2,679 - Impairment of long-lived assets 2,679 43,600 - (3,517) Gain on sale of hotel properties - (41,599) 1,756 1,532 Other expense(1) 4,907 2,879 (1,806) 331 Tax effect of adjustments to Paired Share Income (2,299) (1,088) $ 62,571 $ 74,034 Adjusted Paired Share Income $ 153,283 $ 177,758 $ 0.33 $ 0.39 Adjusted Paired Share Income per Paired Share – diluted $ 0.81 $ 0.94 187,015 189,253 Weighted average Paired Shares outstanding – diluted 188,317 190,111 (1) Includes loss on disposal of assets, non-operating expense (income), including foreign currency transaction costs, and certain costs associated with acquisitions and dispositions. Loss on disposal of assets totaled $1.7 million, $1.9 million, $5.0 million and $2.6 million, respectively. 13

TOTAL REVENUES AND NON-GAAP RECONCILIATION OF NET INCOME TO EBITDA AND COMPARABLE ADJUSTED EBITDA FOR THE YEARS ENDED DECEMBER 31, 2018 (ADJUSTED) AND DECEMBER 31, 2019 (OUTLOOK)(1) (In thousands) (Unaudited) Year Ended Year Ending December 31, 2019 December 31, 2018 (Outlook) (Adjusted)(1) Low High $ 1,204,429 Total revenues $ 1,205,000 $ 1,215,000 $ 211,756 Net income $ 161,772 $ 176,353 124,870 Interest expense, net 129,000 129,000 42,076 Income tax expense 32,549 32,968 209,329 Depreciation and amortization 195,000 190,000 588,031 EBITDA 518,321 528,321 Adjusted Property EBITDA of hotels not owned (21,422) for entirety of period presented - - 7,724 Equity-based compensation 8,000 8,000 43,600 Impairment of long-lived assets 2,679 2,679 (42,478) Gain on sale of hotel properties - - 2,860 Other expense(2) 6,000 6,000 $ 578,315 Comparable Adjusted EBITDA $ 535,000 $ 545,000 (1) 2018 results adjusted to reflect 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, 2018 (ACTUAL) AND DECEMBER 31, 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 Net income per Extended Stay America, Inc. common share - $ 0.59 $ 0.38 $ 0.43 diluted Net income attributable to Extended Stay America, Inc. common $ 112,864 shareholders $ 71,234 $ 79,893 Noncontrolling interests attributable to Class B common shares 98,876 of ESH REIT 90,522 96,444 211,740 Paired Share Income 161,756 176,337 1,621 Debt modification and extinguishment costs 6,716 6,716 43,600 Impairment of long-lived assets 2,679 2,679 (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 (2,579) (2,425) $ 216,406 Adjusted Paired Share Income $ 174,572 $ 189,307 $ 1.14 Adjusted Paired Share Income per Paired Share – diluted $ 0.93 $ 1.01 189,821 Weighted average Paired Shares outstanding – diluted 187,000 187,000 (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

XML

Cover Page Cover Page	Nov. 06, 2019
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Nov. 06, 2019
Entity Registrant Name	EXTENDED STAY AMERICA, INC
Entity Incorporation, State or Country Code	DE
Entity File Number	001-36190
Entity Tax Identification Number	46-3140312
Entity Address, Address Line One	11525 N. Community House Road, Suite 100
Entity Address, City or Town	Charlotte
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	28277
City Area Code	980
Local Phone Number	345-1600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Central Index Key	0001581164
ESH Hospitality, Inc.
Entity Information [Line Items]
Entity Registrant Name	ESH HOSPITALITY, INC
Entity Incorporation, State or Country Code	DE
Entity File Number	001-36191
Entity Tax Identification Number	27-3559821
Entity Address, Address Line One	11525 N. Community House Road, Suite 100
Entity Address, City or Town	Charlotte
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	28277
City Area Code	980
Local Phone Number	345-1600
Entity Central Index Key	0001507563