Derivative Instruments

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

ESH REIT is a counterparty to a floating-to-fixed interest rate swap at a fixed rate of 1.175% and a floating rate of one-month LIBOR to manage its exposure to interest rate risk on a portion of the ESH REIT Term Facility. The notional amount of the interest rate swap as of December 31, 2019 was $200.0 million. The notional amount decreases by an additional $50.0 million every six months until the swap’s maturity in September 2021.

For each of the years ended December 31, 2019 and 2018, the Company received proceeds of $2.8 million that offset interest expense and recorded interest expense of $0.7 million for the year ended December 31, 2017. As of December 31, 2019, $0.7 million is expected to be recognized through earnings over the following twelve months.

The table below presents the amounts and classification on the Company’s financial statements related to the interest rate swap (in thousands):


	Other assets		Accumulated other comprehensive income, net of tax			Other non-operating income		Interest (income) expense, net
As of December 31, 2019	$	831	$	706	⁽¹⁾
As of December 31, 2018	$	5,789	$	4,934	⁽²⁾
For the year ended December 31, 2019						$	—	$	(2,842)
For the year ended December 31, 2018						$	—	$	(2,765)
For the year ended December 31, 2017						$	314	$	707

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(1)Changes during the year ended December 31, 2019, on a pre-tax basis, consisted of changes in fair value of $(5.0) million.

(2)Changes during the year ended December 31, 2018, on a pre-tax basis, consisted of changes in fair value of $(0.6) million and the cumulative effect adjustment of $(0.7) million as a result of adopting ASU 2017-12, Derivative and Hedging: Targeted Improvements to Accounting for Hedging Activities, on January 1, 2018.