DERIVATIVE INSTRUMENTS - REIT

3 Months Ended

Mar. 31, 2020

Entity Information [Line Items]

DERIVATIVE INSTRUMENTS

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 March 31, 2020 was $150.0 million. The notional amount decreases by an additional $50.0 million every six months until the swap’s maturity in September 2021.

For the three months ended March 31, 2020 and 2019, the Company received proceeds of $0.3 million and $1.0 million, respectively, that offset interest expense. As of March 31, 2020, $1.0 million of interest expense is expected to be recognized over the following twelve months.

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

	(Accrued liabilities) other assets		Accumulated other comprehensive (loss) income, net of tax			Interest (income) expense, net
As of March 31, 2020	$	(1,224)	$	(1,042)	(1)
As of December 31, 2019	$	831	$	706	(2)
For the three months ended March 31, 2020						$	(257)
For the three months ended March 31, 2019						$	(975)

_______________________________

(1)Changes during the three months ended March 31, 2020, on a pre-tax basis, consisted of changes in fair value of $(2.1) million.

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

ESH Hospitality, Inc.

Entity Information [Line Items]

DERIVATIVE INSTRUMENTS

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 March 31, 2020 was $150.0 million. The notional amount decreases by an additional $50.0 million every six months until the swap’s maturity in September 2021.

For the three months ended March 31, 2020 and 2019, ESH REIT received proceeds of $0.3 million and $1.0 million, respectively, that offset interest expense. As of March 31, 2020, $1.0 million of interest expense is expected to be recognized over the following twelve months.

The table below presents the amounts and classification of the interest rate swap on ESH REIT’s condensed consolidated financial statements (in thousands):

	(Accrued liabilities) other assets		Accumulated other comprehensive (loss) income, net of tax			Interest (income) expense, net
As of March 31, 2020	$	(1,224)	$	(1,224)	(1)
As of December 31, 2019	$	831	$	830	(2)
For the three months ended March 31, 2020						$	(257)
For the three months ended March 31, 2019						$	(975)

_______________________________

(1)Changes during the three months ended March 31, 2020, on a pre-tax basis, consisted of changes in fair value of $(2.1) million.

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