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CST: 18/09/2019 15:39:43   

Extended Stay America Announces First Quarter 2019 Results

139 Days ago

-  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 01, 2019 (GLOBE NEWSWIRE) -- 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 EBITDA of $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

______________________________________________
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).


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 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.

     
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, 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
         

 

Distributions 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 % D1   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
2 Lost 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, 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.

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

 
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.
           

 

           
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   0.37 %     - %   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 full three months ended March 31, 2019 and 2018.
           
(3) Include 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
         

 

 
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  
           
 
           
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.

 

 
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 HOTEL 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.
               

 

 
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  
       

 

 
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.
 

 

 
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 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.
                   

 

 
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.
           

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