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Section 1: 10-Q (10-Q)

soho-10q_20180331.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

 

SOTHERLY HOTELS INC.

(Exact name of registrant as specified in its charter)

 

 

MARYLAND

001-32379

20-1531029

(State or Other Jurisdiction of

Incorporation or Organization)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

 

SOTHERLY HOTELS LP

(Exact name of registrant as specified in its charter)

 

 

DELAWARE

001-36091

20-1965427

(State or Other Jurisdiction of

Incorporation or Organization)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

 

410 West Francis Street

Williamsburg, Virginia 23185

(757) 229-5648

(Address and Telephone Number of Principal Executive Offices)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Sotherly Hotels Inc.    Yes      No       Sotherly Hotels LP    Yes      No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)

Sotherly Hotels Inc.    Yes      No       Sotherly Hotels LP    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act. (Check one):

Sotherly Hotels Inc.

 

Large Accelerated Filer

 

 

Accelerated Filer

 

 

 

 

 

 

Non-accelerated Filer

 

 

Smaller Reporting Company

 

 

 

 

 

 

Emerging Growth Company

 

 

 

 

Sotherly Hotels LP

 

Large Accelerated Filer

 

 

Accelerated Filer

 

 

 

 

 

 

Non-accelerated Filer

 

 

Smaller Reporting Company

 

 

 

 

 

 

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.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    

Sotherly Hotels Inc.    Yes      No   Sotherly Hotels LP    Yes      No  

 

As of May 4, 2018, there were 14,121,081 shares of Sotherly Hotels Inc.’s common stock issued and outstanding.  

 

 


EXPLANATORY NOTE

We refer to Sotherly Hotels Inc. as the “Company,” Sotherly Hotels LP as the “Operating Partnership,” the Company’s common stock as “Common Stock,” the Company’s preferred stock as “Preferred Stock,” and the Operating Partnership’s preferred interest as the “Preferred Interest.”  References to “we” and “our” mean the Company, its Operating Partnership and its subsidiaries and predecessors, collectively, unless the context otherwise requires or where otherwise indicated.

The Company conducts virtually all of its activities through the Operating Partnership and is its sole general partner. The partnership agreement provides that the Operating Partnership will assume and pay when due, or reimburse the Company for payment of, all costs and expenses relating to the ownership and operations of, or for the benefit of, the Operating Partnership. The partnership agreement further provides that all expenses of the Company are deemed to be incurred for the benefit of the Operating Partnership.

This report combines the Quarterly Reports on Form 10-Q for the period ended March 31, 2018 of the Company and the Operating Partnership. We believe combining the quarterly reports into this single report results in the following benefits:

 

combined reports better reflect how management and investors view the business as a single operating unit;

 

combined reports enhance investors' understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management;

 

combined reports are more efficient for the Company and the Operating Partnership and result in savings in time, effort and expense; and

 

combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review.

To help investors understand the significant differences between the Company and the Operating Partnership, this report presents the following separate sections for each of the Company and the Operating Partnership:

 

Consolidated Financial Statements;

 

the following Notes to Consolidated Financial Statements:

 

Note 7 – Preferred Stock and Units;

 

Note 8 – Common Stock and Units;

 

Note 9 – Related Party Transactions; and

 

Note 13 – Income Per Share and Per Unit;

 

Item 4 - Controls and Procedures; and

 

Item 6 - Certifications of CEO and CFO Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act.

 

 

2


SOTHERLY HOTELS INC.

SOTHERLY HOTELS LP

INDEX

 

 

 

 

 

Page

 

 

 

 

 

PART I

Item 1.

 

Consolidated Financial Statements

 

4

 

 

Sotherly Hotels Inc.

 

4

 

 

Consolidated Balance Sheets as of March 31, 2018 (unaudited) and December 31, 2017

 

4

 

 

Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2018 and 2017

 

5

 

 

Consolidated Statement of Changes in Equity (unaudited) for the Three Months Ended March 31, 2018

 

6

 

 

Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2018 and 2017

 

7

 

 

Sotherly Hotels LP

 

8

 

 

Consolidated Balance Sheets as of March 31, 2018 (unaudited) and December 31, 2017

 

8

 

 

Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2018 and 2017

 

9

 

 

Consolidated Statement of Changes in Partners’ Capital (unaudited) for the Three Months Ended March 31, 2018

 

10

 

 

Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2018 and 2017

 

11

 

 

Notes to Consolidated Financial Statements

 

12

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

30

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

42

Item 4

 

Controls and Procedures

 

43

 

 

 

 

 

PART II

Item 1.

 

Legal Proceedings

 

44

Item 1A.

 

Risk Factors

 

44

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

44

Item 3.

 

Defaults Upon Senior Securities

 

44

Item 4.

 

Mine Safety Disclosures

 

44

Item 5.

 

Other Information

 

44

Item 6.

 

Exhibits

 

45

 

3


PART I

 

 

Item 1.

Consolidated Financial Statements

SOTHERLY HOTELS INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

March 31, 2018

 

 

December 31, 2017

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

438,649,721

 

 

$

357,799,512

 

Cash and cash equivalents

 

 

30,673,556

 

 

 

29,777,845

 

Restricted cash

 

 

4,901,392

 

 

 

3,651,197

 

Accounts receivable, net

 

 

9,424,697

 

 

 

5,587,077

 

Accounts receivable - affiliate

 

 

307,351

 

 

 

394,026

 

Prepaid expenses, inventory and other assets

 

 

6,207,626

 

 

 

7,292,565

 

Deferred income taxes

 

 

5,190,855

 

 

 

5,451,118

 

TOTAL ASSETS

 

$

495,355,198

 

 

$

409,953,340

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans, net

 

$

357,170,859

 

 

$

297,318,816

 

Unsecured notes, net

 

 

23,530,323

 

 

 

 

Accounts payable and accrued liabilities

 

 

16,534,533

 

 

 

13,813,623

 

Advance deposits

 

 

2,570,635

 

 

 

1,572,388

 

Dividends and distributions payable

 

 

3,229,002

 

 

 

3,073,483

 

TOTAL LIABILITIES

 

$

403,035,352

 

 

$

315,778,310

 

Commitments and contingencies  (See Note 6)

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

 

Sotherly Hotels Inc. stockholders’ equity

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value, 11,000,000 shares authorized;

 

 

 

 

 

 

 

 

8.0% Series B cumulative redeemable perpetual preferred stock,

   liquidation preference $25 per share, 1,610,000 shares issued

   and outstanding at March 31, 2018 and December 31, 2017, respectively

 

 

16,100

 

 

 

16,100

 

7.875% Series C cumulative redeemable perpetual preferred stock,

   liquidation preference $25 per share, 1,300,000 shares issued

   and outstanding at March 31, 2018 and December 31, 2017, respectively

 

 

13,000

 

 

 

13,000

 

Common stock, par value $0.01, 49,000,000 shares authorized, 14,121,081

   shares and 14,078,831 shares issued and outstanding at March 31, 2018

   and December 31, 2017, respectively

 

 

141,211

 

 

 

140,788

 

Additional paid-in capital

 

 

146,360,268

 

 

 

146,249,339

 

Unearned ESOP shares

 

 

(4,572,942

)

 

 

(4,633,112

)

Distributions in excess of retained earnings

 

 

(50,558,067

)

 

 

(48,765,860

)

Total Sotherly Hotels Inc. stockholders’ equity

 

 

91,399,570

 

 

 

93,020,255

 

Noncontrolling interest

 

 

920,276

 

 

 

1,154,775

 

TOTAL EQUITY

 

 

92,319,846

 

 

 

94,175,030

 

TOTAL LIABILITIES AND EQUITY

 

$

495,355,198

 

 

$

409,953,340

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

4


SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2018

 

 

March 31, 2017

 

REVENUE

 

 

 

 

 

 

 

 

Rooms department

 

$

28,285,445

 

 

$

27,366,634

 

Food and beverage department

 

 

8,351,983

 

 

 

8,323,759

 

Other operating departments

 

 

5,098,128

 

 

 

3,004,493

 

Total revenue

 

 

41,735,556

 

 

 

38,694,886

 

EXPENSES

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

Rooms department

 

 

6,700,381

 

 

 

6,682,279

 

Food and beverage department

 

 

6,395,076

 

 

 

5,728,473

 

Other operating departments

 

 

1,528,327

 

 

 

600,020

 

Indirect

 

 

15,233,256

 

 

 

14,205,231

 

Total hotel operating expenses

 

 

29,857,040

 

 

 

27,216,003

 

Depreciation and amortization

 

 

5,634,190

 

 

 

4,061,097

 

Loss on disposal of assets

 

 

3,739

 

 

 

 

Corporate general and administrative

 

 

1,546,300

 

 

 

1,712,082

 

Total operating expenses

 

 

37,041,269

 

 

 

32,989,182

 

NET OPERATING INCOME

 

 

4,694,287

 

 

 

5,705,704

 

Other income (expense)

 

 

 

 

 

 

 

 

Interest expense

 

 

(4,177,019

)

 

 

(3,813,717

)

Interest income

 

 

81,704

 

 

 

39,705

 

Unrealized gain (loss) on hedging activities

 

 

12,730

 

 

 

(15,945

)

Gain on sale of assets

 

 

 

 

 

100,407

 

Gain on involuntary conversion of assets

 

 

870,741

 

 

 

1,041,815

 

Net income before income taxes

 

 

1,482,443

 

 

 

3,057,969

 

Income tax provision

 

 

(305,955

)

 

 

(171,937

)

Net income

 

 

1,176,488

 

 

 

2,886,032

 

Less: Net loss (income) attributable to noncontrolling interest

 

 

30,013

 

 

 

(229,942

)

Net income attributable to the Company

 

 

1,206,501

 

 

 

2,656,090

 

Distributions to preferred stockholders

 

 

(1,444,844

)

 

 

(805,000

)

Net income (loss) available to common stockholders

 

$

(238,343

)

 

$

1,851,090

 

Net income (loss) per share available to common stockholders

 

 

 

 

 

 

 

 

Basic and Diluted

 

$

(0.02

)

 

$

0.13

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

13,472,444

 

 

 

14,025,489

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

5


SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Unearned

 

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Paid-

 

 

ESOP

 

 

in Excess of

 

 

Noncontrolling

 

 

 

 

 

 

 

Shares

 

 

Par Value

 

 

Shares

 

 

Par Value

 

 

In Capital

 

 

Shares

 

 

Retained Earnings

 

 

Interest

 

 

Total

 

Balances at December 31,

   2017

 

 

2,910,000

 

 

$

29,100

 

 

 

14,078,831

 

 

$

140,788

 

 

$

146,249,339

 

 

$

(4,633,112

)

 

$

(48,765,860

)

 

$

1,154,775

 

 

$

94,175,030

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,206,501

 

 

 

(30,013

)

 

 

1,176,488

 

Issuance of unrestricted

   common stock awards

 

 

 

 

 

 

 

 

2,250

 

 

 

23

 

 

 

13,454

 

 

 

 

 

 

 

 

 

 

 

 

13,477

 

Issuance of restricted

   common stock awards

 

 

 

 

 

 

 

 

40,000

 

 

 

400

 

 

 

89,450

 

 

 

 

 

 

 

 

 

 

 

 

89,850

 

Amortization of ESOP

   shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

60,170

 

 

 

 

 

 

 

 

 

 

60,170

 

Amortization of restricted

   stock award

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,025

 

 

 

 

 

 

 

 

 

 

 

 

8,025

 

Preferred stock dividends

   declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,444,844

)

 

 

 

 

 

(1,444,844

)

Common stockholders'

   dividends and

   distributions declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,553,864

)

 

 

(204,486

)

 

 

(1,758,350

)

Balances at March 31,

   2018 (unaudited)

 

 

2,910,000

 

 

$

29,100

 

 

 

14,121,081

 

 

$

141,211

 

 

$

146,360,268

 

 

$

(4,572,942

)

 

$

(50,558,067

)

 

$

920,276

 

 

$

92,319,846

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

6


SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2018

 

 

March 31, 2017

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

1,176,488

 

 

$

2,886,032

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

5,634,190

 

 

 

4,061,097

 

Amortization of deferred financing costs

 

 

186,694

 

 

 

214,357

 

Amortization of mortgage premium

 

 

(6,170

)

 

 

(6,170

)

Gain on involuntary conversion of assets

 

 

(870,741

)

 

 

(1,041,815

)

Unrealized (gain) loss on derivative instrument

 

 

(12,730

)

 

 

15,945

 

Loss on disposal of assets

 

 

3,739

 

 

 

 

Gain on sale of assets

 

 

 

 

 

(100,407

)

Share - based compensation

 

 

171,523

 

 

 

94,140

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(3,837,620

)

 

 

(1,209,174

)

Prepaid expenses, inventory and other assets

 

 

1,075,655

 

 

 

(1,066,260

)

Deferred income taxes

 

 

260,262

 

 

 

118,050

 

Accounts payable and other accrued liabilities

 

 

2,441,901

 

 

 

1,435,722

 

Advance deposits

 

 

998,247

 

 

 

1,089,819

 

Accounts receivable - affiliate

 

 

86,675

 

 

 

(471,361

)

Net cash provided by operating activities

 

 

7,308,113

 

 

 

6,019,975

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisitions of hotel properties

 

 

(80,479,137

)

 

 

(3,986,849

)

Improvements and additions to hotel properties

 

 

(5,851,104

)

 

 

(6,304,669

)

Proceeds from the sale of hotel property

 

 

 

 

 

5,434,856

 

Proceeds from insurance conversion

 

 

870,741

 

 

 

776,815

 

Proceeds from the sale or disposal of assets

 

 

 

 

 

2,955

 

Net cash used in investing activities

 

 

(85,459,500

)

 

 

(4,076,892

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds of mortgage debt

 

 

62,000,000

 

 

 

 

Proceeds of unsecured debt

 

 

25,000,000

 

 

 

 

Repurchase of common stock

 

 

 

 

 

(1,103,130

)

Payments on mortgage loans

 

 

(1,649,012

)

 

 

(3,566,914

)

(Payments) refund of deferred financing costs

 

 

(2,006,021

)

 

 

3,600

 

Funding of ESOP stock purchase

 

 

 

 

 

(4,874,758

)

Dividends and distributions paid

 

 

(1,602,830

)

 

 

(1,571,526

)

Preferred dividends paid

 

 

(1,444,844

)

 

 

(805,000

)

Net cash provided by (used in) financing activities

 

 

80,297,293

 

 

 

(11,917,728

)

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

2,145,906

 

 

 

(9,974,645

)

Cash, cash equivalents and restricted cash at the beginning of the period

 

 

33,429,042

 

 

 

36,362,921

 

Cash, cash equivalents and restricted cash at the end of the period

 

$

35,574,948

 

 

$

26,388,276

 

Supplemental disclosures:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

3,831,409

 

 

$

3,513,312

 

Cash paid during the period for income taxes

 

$

13,437

 

 

$

81,361

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Change in amount of improvements to hotel property in accounts payable

   and accrued liabilities

 

$

94,122

 

 

$

1,141,553

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

7


SOTHERLY HOTELS LP

CONSOLIDATED BALANCE SHEETS

 

 

 

March 31, 2018

 

 

December 31, 2017

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

438,649,721

 

 

$

357,799,512

 

Cash and cash equivalents

 

 

30,673,556

 

 

 

29,777,845

 

Restricted cash

 

 

4,901,392

 

 

 

3,651,197

 

Accounts receivable, net

 

 

9,424,697

 

 

 

5,587,077

 

Accounts receivable - affiliate

 

 

307,351

 

 

 

394,026

 

Loan receivable - affiliate

 

 

4,606,717

 

 

 

4,650,969

 

Prepaid expenses, inventory and other assets

 

 

6,207,626

 

 

 

7,292,565

 

Deferred income taxes

 

 

5,190,855

 

 

 

5,451,118

 

TOTAL ASSETS

 

$

499,961,915

 

 

$

414,604,309

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans, net

 

$

357,170,859

 

 

$

297,318,816

 

Unsecured notes, net

 

 

23,530,323

 

 

 

-

 

Accounts payable and other accrued liabilities

 

 

16,534,535

 

 

 

13,813,623

 

Advance deposits

 

 

2,570,635

 

 

 

1,572,388

 

Dividends and distributions payable

 

 

3,273,254

 

 

 

3,119,027

 

TOTAL LIABILITIES

 

$

403,079,606

 

 

$

315,823,854

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (see Note 6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PARTNERS’ CAPITAL

 

 

 

 

 

 

 

 

Preferred units, $0.01 par value, 11,000,000 units authorized;

 

 

 

 

 

 

 

 

8% Series B cumulative redeemable perpetual preferred units, liquidation

   preference $25 per unit, 1,610,000 units issued and outstanding at March

   31, 2018 and December 31, 2017, respectively

 

 

37,766,531

 

 

 

37,766,531

 

7.875% Series C cumulative redeemable perpetual preferred units, liquidation

   preference $25 per unit, 1,300,000  units issued and outstanding at March 31,

   2018 and December 31, 2017, respectively

 

 

30,488,660

 

 

 

30,488,660

 

General Partner: 158,993 units and 158,570 units issued and outstanding as of

   March 31, 2018 and December 31, 2017, respectively

 

 

581,239

 

 

 

586,725

 

Limited Partners: 15,740,228 units and 15,698,401 units issued and outstanding as

   of March 31, 2018 and December 31, 2017, respectively

 

 

28,045,879

 

 

 

29,938,539

 

TOTAL PARTNERS’ CAPITAL

 

 

96,882,309

 

 

 

98,780,455

 

TOTAL LIABILITIES AND PARTNERS’ CAPITAL

 

$

499,961,915

 

 

$

414,604,309

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

8


SOTHERLY HOTELS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2018

 

 

March 31, 2017

 

REVENUE

 

 

 

 

 

 

 

 

Rooms department

 

$

28,285,445

 

 

$

27,366,634

 

Food and beverage department

 

 

8,351,983

 

 

 

8,323,759

 

Other operating departments

 

 

5,098,128

 

 

 

3,004,493

 

Total revenue

 

 

41,735,556

 

 

 

38,694,886

 

EXPENSES

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

Rooms department

 

 

6,700,381

 

 

 

6,682,279

 

Food and beverage department

 

 

6,395,076

 

 

 

5,728,473

 

Other operating departments

 

 

1,528,327

 

 

 

600,020

 

Indirect

 

 

15,233,256

 

 

 

14,205,231

 

Total hotel operating expenses

 

 

29,857,040

 

 

 

27,216,003

 

Depreciation and amortization

 

 

5,634,190

 

 

 

4,061,097

 

Loss on disposal of assets

 

 

3,739

 

 

 

 

Corporate general and administrative

 

 

1,546,300

 

 

 

1,712,082

 

Total operating expenses

 

 

37,041,269

 

 

 

32,989,182

 

NET OPERATING INCOME

 

 

4,694,287

 

 

 

5,705,704

 

Other income (expense)

 

 

 

 

 

 

 

 

Interest expense

 

 

(4,177,019

)

 

 

(3,813,717

)

Interest income

 

 

81,704

 

 

 

59,631

 

Unrealized gain (loss) on hedging activities

 

 

12,730

 

 

 

(15,945

)

Gain on sale of assets

 

 

 

 

 

100,407

 

Gain on involuntary conversion of assets

 

 

870,741

 

 

 

1,041,815

 

Net income before income taxes

 

 

1,482,443

 

 

 

3,077,895

 

Income tax provision

 

 

(305,955

)

 

 

(171,937

)

Net income

 

 

1,176,488

 

 

 

2,905,958

 

Distributions to preferred unit holder

 

 

(1,444,844

)

 

 

(805,000

)

Net income (loss) available to operating partnership unit holders

 

$

(268,356

)

 

$

2,100,958

 

Net income (loss) attributable per operating partner unit

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.02

)

 

$

0.13

 

 

 

 

 

 

 

 

 

 

Weighted average number of operating partner units outstanding

 

 

 

 

 

 

 

 

Basic and diluted

 

 

15,892,513

 

 

 

16,252,691

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

9


SOTHERLY HOTELS LP

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS’ CAPITAL

 

 

Preferred Units

 

 

General Partner

 

 

Limited Partner

 

 

 

 

 

 

Units

 

 

Series B Amounts

 

 

Series C Amounts

 

 

Units

 

 

 

 

Amounts

 

 

Units

 

 

Amounts

 

 

Total

 

Balances at December

   31, 2017

 

2,910,000

 

 

$

37,766,531

 

 

$

30,488,660

 

 

 

158,570

 

 

 

 

$

586,725

 

 

 

15,698,401

 

 

$

29,938,539

 

 

$

98,780,455

 

Issuance of common

   partnership units

 

 

 

 

 

 

 

 

 

 

423

 

 

 

 

 

1,034

 

 

 

41,827

 

 

 

102,294

 

 

 

103,328

 

Amortization of restricted

   units award

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,025

 

 

 

8,025

 

Unit based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

87,267

 

 

 

87,267

 

Preferred units distributions

   declared

 

 

 

 

(1,444,844

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,444,844

)

Partnership units

   distributions declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,285

)

 

 

 

 

 

(1,810,125

)

 

 

(1,828,410

)

Net income

 

 

 

 

1,444,844

 

 

 

 

 

 

 

 

 

 

 

11,765

 

 

 

 

 

 

(280,121

)

 

 

1,176,488

 

Balances at March 31, 2018

   (unaudited)

 

2,910,000

 

 

$

37,766,531

 

 

$

30,488,660

 

 

 

158,993