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Section 1: 10-Q (10-Q)

soho-10q_20180630.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 June 30, 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 August 3, 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 June 30, 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 June 30, 2018 (unaudited) and December 31, 2017

 

4

 

 

Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2018 and 2017

 

5

 

 

Consolidated Statement of Changes in Equity (unaudited) for the Six Months Ended June 30, 2018

 

6

 

 

Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2018 and 2017

 

7

 

 

Sotherly Hotels LP

 

8

 

 

Consolidated Balance Sheets as of June 30, 2018 (unaudited) and December 31, 2017

 

8

 

 

Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2018 and 2017

 

9

 

 

Consolidated Statement of Changes in Partners’ Capital (unaudited) for the Six Months Ended June 30, 2018

 

10

 

 

Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2018 and 2017

 

11

 

 

Notes to Consolidated Financial Statements

 

12

Item 2.

 

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

 

31

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

45

Item 4

 

Controls and Procedures

 

46

 

 

 

 

 

PART II

Item 1.

 

Legal Proceedings

 

47

Item 1A.

 

Risk Factors

 

47

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

47

Item 3.

 

Defaults Upon Senior Securities

 

47

Item 4.

 

Mine Safety Disclosures

 

47

Item 5.

 

Other Information

 

47

Item 6.

 

Exhibits

 

48

 

3


PART I

 

 

Item 1.

Consolidated Financial Statements

SOTHERLY HOTELS INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30, 2018

 

 

December 31, 2017

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

434,285,458

 

 

$

357,799,512

 

Cash and cash equivalents

 

 

28,435,806

 

 

 

29,777,845

 

Restricted cash

 

 

5,301,033

 

 

 

3,651,197

 

Accounts receivable, net

 

 

10,972,446

 

 

 

5,587,077

 

Accounts receivable - affiliate

 

 

426,041

 

 

 

394,026

 

Prepaid expenses, inventory and other assets

 

 

6,693,982

 

 

 

7,292,565

 

Favorable lease assets, net

 

 

2,655,069

 

 

 

 

Deferred income taxes

 

 

3,929,188

 

 

 

5,451,118

 

TOTAL ASSETS

 

$

492,699,023

 

 

$

409,953,340

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans, net

 

$

354,529,454

 

 

$

297,318,816

 

Unsecured notes, net

 

 

23,635,174

 

 

 

 

Accounts payable and accrued liabilities

 

 

17,277,577

 

 

 

13,813,623

 

Advance deposits

 

 

1,861,704

 

 

 

1,572,388

 

Dividends and distributions payable

 

 

3,302,095

 

 

 

3,073,483

 

TOTAL LIABILITIES

 

$

400,606,004

 

 

$

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 June 30, 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 June 30, 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 June 30, 2018

   and December 31, 2017, respectively

 

 

141,211

 

 

 

140,788

 

Additional paid-in capital

 

 

146,368,293

 

 

 

146,249,339

 

Unearned ESOP shares

 

 

(4,511,269

)

 

 

(4,633,112

)

Distributions in excess of retained earnings

 

 

(50,811,546

)

 

 

(48,765,860

)

Total Sotherly Hotels Inc. stockholders’ equity

 

 

91,215,789

 

 

 

93,020,255

 

Noncontrolling interest

 

 

877,230

 

 

 

1,154,775

 

TOTAL EQUITY

 

 

92,093,019

 

 

 

94,175,030

 

TOTAL LIABILITIES AND EQUITY

 

$

492,699,023

 

 

$

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

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

 

June 30, 2018

 

 

June 30, 2017

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

$

35,330,676

 

 

$

28,906,872

 

 

$

63,616,121

 

 

$

56,273,506

 

Food and beverage department

 

 

11,080,568

 

 

 

8,583,358

 

 

 

19,432,551

 

 

 

16,907,117

 

Other operating departments

 

 

5,142,283

 

 

 

3,152,402

 

 

 

10,240,411

 

 

 

6,156,895

 

Total revenue

 

 

51,553,527

 

 

 

40,642,632

 

 

 

93,289,083

 

 

 

79,337,518

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

8,176,164

 

 

 

6,743,788

 

 

 

14,876,545

 

 

 

13,426,067

 

Food and beverage department

 

 

7,673,049

 

 

 

6,151,495

 

 

 

14,068,125

 

 

 

11,879,968

 

Other operating departments

 

 

1,680,582

 

 

 

623,530

 

 

 

3,208,909

 

 

 

1,223,550

 

Indirect

 

 

17,640,285

 

 

 

15,605,262

 

 

 

32,873,541

 

 

 

29,810,493

 

Total hotel operating expenses

 

 

35,170,080

 

 

 

29,124,075

 

 

 

65,027,120

 

 

 

56,340,078

 

Depreciation and amortization

 

 

5,601,940

 

 

 

4,219,712

 

 

 

11,236,130

 

 

 

8,280,809

 

Loss on disposal of assets

 

 

 

 

 

51,507

 

 

 

3,739

 

 

 

51,507

 

Corporate general and administrative

 

 

1,503,549

 

 

 

1,834,930

 

 

 

3,049,849

 

 

 

3,547,012

 

Total operating expenses

 

 

42,275,569

 

 

 

35,230,224

 

 

 

79,316,838

 

 

 

68,219,406

 

NET OPERATING INCOME

 

 

9,277,958

 

 

 

5,412,408

 

 

 

13,972,245

 

 

 

11,118,112

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(5,087,482

)

 

 

(3,874,076

)

 

 

(9,264,501

)

 

 

(7,687,793

)

Interest income

 

 

66,505

 

 

 

13,294

 

 

 

148,209

 

 

 

72,925

 

Loss on early extinguishment of debt

 

 

 

 

 

(228,087

)

 

 

 

 

 

(228,087

)

Unrealized gain (loss) on hedging activities

 

 

5,798

 

 

 

(11,261

)

 

 

18,528

 

 

 

(27,206

)

Gain on sale of assets

 

 

 

 

 

 

 

 

 

 

 

100,407

 

Gain on involuntary conversion of assets

 

 

27,824

 

 

 

 

 

 

898,565

 

 

 

1,041,815

 

Net income before income taxes

 

 

4,290,603

 

 

 

1,312,278

 

 

 

5,773,046

 

 

 

4,390,173

 

Income tax provision

 

 

(1,323,014

)

 

 

(196,483

)

 

 

(1,628,969

)

 

 

(368,420

)

Net income

 

 

2,967,589

 

 

 

1,115,795

 

 

 

4,144,077

 

 

 

4,021,753

 

Less: Net income attributable to noncontrolling interest

 

 

(170,331

)

 

 

(33,869

)

 

 

(140,318

)

 

 

(263,811

)

Net income attributable to the Company

 

 

2,797,258

 

 

 

1,081,926

 

 

 

4,003,759

 

 

 

3,757,942

 

Distributions to preferred stockholders

 

 

(1,444,844

)

 

 

(805,000

)

 

 

(2,889,688

)

 

 

(1,610,000

)

Net income available to common stockholders

 

$

1,352,414

 

 

$

276,926

 

 

$

1,114,071

 

 

$

2,147,942

 

Net income per share available to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.10

 

 

$

0.02

 

 

$

0.08

 

 

$

0.15

 

Diluted

 

$

0.10

 

 

$

0.02

 

 

$

0.08

 

 

$

0.15

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

13,488,526

 

 

 

13,813,168

 

 

 

13,480,529

 

 

 

13,898,910

 

Diluted

 

 

13,489,475

 

 

 

13,815,035

 

 

 

13,486,140

 

 

 

13,908,359

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,003,759

 

 

 

140,318

 

 

 

4,144,077

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

121,843

 

 

 

 

 

 

 

 

 

 

121,843

 

Amortization of restricted

   stock award

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,050

 

 

 

 

 

 

 

 

 

 

 

 

16,050

 

Preferred stock dividends

   declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,889,688

)

 

 

 

 

 

(2,889,688

)

Common stockholders'

   dividends and

   distributions declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,159,757

)

 

 

(417,863

)

 

 

(3,577,620

)

Balances at June 30,

   2018 (unaudited)

 

 

2,910,000

 

 

$

29,100

 

 

 

14,121,081

 

 

$

141,211

 

 

$

146,368,293

 

 

$

(4,511,269

)

 

$

(50,811,546

)

 

$

877,230

 

 

$

92,093,019

 

 

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

 

 

6


SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

4,144,077

 

 

$

4,021,753

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

11,236,130

 

 

 

8,280,809

 

Amortization of deferred financing costs

 

 

462,469

 

 

 

414,366

 

Amortization of mortgage premium

 

 

(12,341

)

 

 

(12,341

)

Gain on involuntary conversion of assets

 

 

(898,565

)

 

 

(1,041,815

)

Unrealized (gain) loss on derivative instrument

 

 

(18,528

)

 

 

27,206

 

Loss/(gain) on sale or disposal of assets

 

 

3,739

 

 

 

(48,900

)

Loss on early extinguishment of debt

 

 

 

 

 

228,087

 

Share - based compensation

 

 

241,221

 

 

 

217,086

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(4,415,667

)

 

 

840,630

 

Prepaid expenses, inventory and other assets

 

 

1,014,182

 

 

 

(1,377,186

)

Deferred income taxes

 

 

1,521,929

 

 

 

257,996

 

Accounts payable and other accrued liabilities

 

 

2,911,180

 

 

 

1,438,743

 

Advance deposits

 

 

67,091

 

 

 

(555,560

)

Accounts receivable - affiliate

 

 

(32,015

)

 

 

(559,730

)

Net cash provided by operating activities

 

 

16,224,902

 

 

 

12,131,144

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisitions of hotel properties

 

 

(79,732,716

)

 

 

(3,986,849

)

Improvements and additions to hotel properties

 

 

(10,563,930

)

 

 

(12,480,207

)

Proceeds from the sale of hotel property

 

 

 

 

 

5,434,856

 

Proceeds from involuntary conversion

 

 

222,553

 

 

 

1,041,815

 

Proceeds from the sale or disposal of assets

 

 

 

 

 

3,355

 

Net cash used in investing activities

 

 

(90,074,093

)

 

 

(9,987,030

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds of mortgage debt

 

 

65,300,000

 

 

 

35,500,000

 

Proceeds of unsecured debt

 

 

25,000,000

 

 

 

 

Repurchase of common stock

 

 

 

 

 

(1,103,130

)

Payments on mortgage loans

 

 

(7,707,048

)

 

 

(23,647,602

)

Payments of deferred financing costs

 

 

(2,197,268

)

 

 

(585,004

)

Funding of ESOP stock purchase

 

 

 

 

 

(4,874,758

)

Dividends and distributions paid

 

 

(3,349,008

)

 

 

(3,130,094

)

Preferred dividends paid

 

 

(2,889,688

)

 

 

(1,610,000

)

Net cash provided by financing activities

 

 

74,156,988

 

 

 

549,412

 

Net increase in cash, cash equivalents and restricted cash

 

 

307,797

 

 

 

2,693,526

 

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

 

 

33,429,042

 

 

 

36,362,919

 

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

 

$

33,736,839

 

 

$

39,056,445

 

Supplemental disclosures:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

8,769,755

 

 

$

3,513,312

 

Cash paid during the period for income taxes

 

$

280,552

 

 

$

81,361

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Change in proceeds of involuntary conversion in accounts receivable

 

$

676,013

 

 

$

-

 

Change in amount of improvements to hotel property in accounts payable

   and accrued liabilities

 

$

91,556

 

 

$

1,141,553

 

 

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

 

 

7


SOTHERLY HOTELS LP

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30, 2018

 

 

December 31, 2017

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

434,285,458

 

 

$

357,799,512

 

Cash and cash equivalents

 

 

28,435,806

 

 

 

29,777,845

 

Restricted cash

 

 

5,301,033

 

 

 

3,651,197

 

Accounts receivable, net

 

 

10,972,446

 

 

 

5,587,077

 

Accounts receivable - affiliate

 

 

426,041

 

 

 

394,026

 

Loan receivable - affiliate

 

 

4,556,062

 

 

 

4,650,969

 

Prepaid expenses, inventory and other assets

 

 

6,693,982

 

 

 

7,292,565

 

Favorable lease assets, net

 

 

2,655,069

 

 

 

 

Deferred income taxes

 

 

3,929,188

 

 

 

5,451,118

 

TOTAL ASSETS

 

$

497,255,085

 

 

$

414,604,309

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans, net

 

$

354,529,454

 

 

$

297,318,816

 

Unsecured notes, net

 

 

23,635,174

 

 

 

 

Accounts payable and other accrued liabilities

 

 

17,277,577

 

 

 

13,813,623

 

Advance deposits

 

 

1,861,704

 

 

 

1,572,388

 

Dividends and distributions payable

 

 

3,352,750

 

 

 

3,119,027

 

TOTAL LIABILITIES

 

$

400,656,659

 

 

$

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 June

   30, 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 June 30,

   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

   June 30, 2018 and December 31, 2017, respectively

 

 

591,835

 

 

 

586,725

 

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

   of June 30, 2018 and December 31, 2017, respectively

 

 

27,751,400

 

 

 

29,938,539

 

TOTAL PARTNERS’ CAPITAL

 

 

96,598,426

 

 

 

98,780,455

 

TOTAL LIABILITIES AND PARTNERS’ CAPITAL

 

$

497,255,085

 

 

$

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

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

 

June 30, 2018

 

 

June 30, 2017

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

$

35,330,676

 

 

$

28,906,872

 

 

$

63,616,121

 

 

$

56,273,506

 

Food and beverage department

 

 

11,080,568

 

 

 

8,583,358

 

 

 

19,432,551

 

 

 

16,907,117

 

Other operating departments

 

 

5,142,283

 

 

 

3,152,402

 

 

 

10,240,411

 

 

 

6,156,895

 

Total revenue

 

 

51,553,527

 

 

 

40,642,632

 

 

 

93,289,083

 

 

 

79,337,518

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

8,176,164

 

 

 

6,743,788

 

 

 

14,876,545

 

 

 

13,426,067

 

Food and beverage department

 

 

7,673,049

 

 

 

6,151,495

 

 

 

14,068,125

 

 

 

11,879,968

 

Other operating departments

 

 

1,680,582

 

 

 

623,530

 

 

 

3,208,909

 

 

 

1,223,550

 

Indirect

 

 

17,640,285

 

 

 

15,605,262

 

 

 

32,873,541

 

 

 

29,810,493

 

Total hotel operating expenses

 

 

35,170,080

 

 

 

29,124,075

 

 

 

65,027,120

 

 

 

56,340,078

 

Depreciation and amortization

 

 

5,601,940

 

 

 

4,219,712

 

 

 

11,236,130

 

 

 

8,280,809

 

Loss on disposal of assets