10-Q 1 soho-10q_20150630.htm 10-Q soho-10q_20150630.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

x

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

For the quarterly period ended June 30, 2015

 

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  x    No  ¨     Sotherly Hotels LP    Yes  x    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  x    No  ¨     Sotherly Hotels LP    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting 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

x

 

Sotherly Hotels LP

 

Large Accelerated Filer

¨

 

 

Accelerated Filer

¨

 

 

 

 

 

 

Non-accelerated Filer

x

 

 

Smaller Reporting Company

¨

 

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  x Sotherly Hotels LP    Yes  ¨    No  x

As of August 10, 2015, there were 14,290,714 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, 2015 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 – Equity; and

·

Note 13 – Income (Loss) 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.

 

Financial Statements

 

4

 

 

Sotherly Hotels Inc.

 

4

 

 

Consolidated Balance Sheets as of June 30, 2015 (unaudited) and December 31, 2014

 

4

 

 

Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2015 and 2014

 

5

 

 

Consolidated Statement of Changes in Equity (unaudited) for the Six Months Ended June 30, 2015

 

6

 

 

Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2015 and 2014

 

7

 

 

Sotherly Hotels LP

 

8

 

 

Consolidated Balance Sheets as of June 30, 2015 (unaudited) and December 31, 2014

 

8

 

 

Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2015 and 2014

 

9

 

 

Consolidated Statement of Changes in Partners’ Capital (unaudited) for the Six Months Ended June 30, 2015

 

10

 

 

Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2015 and 2014

 

11

 

 

Notes to Consolidated Financial Statements

 

12

Item 2.

 

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

 

27

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

39

Item 4

 

Controls and Procedures

 

40

 

 

 

 

 

PART II

Item 1.

 

Legal Proceedings

 

42

Item 1A.

 

Risk Factors

 

42

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

42

Item 3.

 

Defaults Upon Senior Securities

 

42

Item 4.

 

Mine Safety Disclosures

 

42

Item 5.

 

Other Information

 

42

Item 6.

 

Exhibits

 

43

 

3


PART I

 

 

Item 1.

Financial Statements

SOTHERLY HOTELS INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30, 2015

 

 

December 31, 2014

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

263,831,439

 

 

$

260,192,153

 

Investment in joint venture

 

 

1,880,824

 

 

 

1,982,107

 

Cash and cash equivalents

 

 

17,274,676

 

 

 

16,634,499

 

Restricted cash

 

 

6,817,281

 

 

 

6,621,864

 

Accounts receivable

 

 

4,203,338

 

 

 

1,908,762

 

Accounts receivable-affiliate

 

 

156,940

 

 

 

197,674

 

Prepaid expenses, inventory and other assets

 

 

3,792,347

 

 

 

3,334,401

 

Deferred income taxes

 

 

3,134,491

 

 

 

3,543,295

 

Deferred financing costs, net

 

 

4,331,736

 

 

 

5,405,288

 

TOTAL ASSETS

 

$

305,423,072

 

 

$

299,820,043

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans

 

$

208,434,927

 

 

$

205,291,657

 

Unsecured notes

 

 

52,900,000

 

 

 

52,900,000

 

Accounts payable and accrued expenses

 

 

12,439,225

 

 

 

12,044,886

 

Advance deposits

 

 

1,628,919

 

 

 

1,220,729

 

Dividends and distributions payable

 

 

995,408

 

 

 

852,914

 

TOTAL LIABILITIES

 

$

276,398,479

 

 

$

272,310,186

 

Commitments and contingencies (see Note 6)

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

 

Sotherly Hotels Inc. stockholders’ equity

 

 

 

 

 

 

 

 

Preferred stock, par value $0.01, 972,350 shares authorized, 0 shares

   issued and outstanding

 

 

 

 

 

 

Common stock, par value $0.01, 49,000,000 shares authorized,

   10,855,714 shares and 10,570,932 shares issued and outstanding

   at June 30, 2015 and December 31, 2014, respectively

 

 

108,557

 

 

 

105,709

 

Additional paid in capital

 

 

59,854,743

 

 

 

58,659,799

 

Distributions in excess of retained earnings

 

 

(34,938,539

)

 

 

(35,388,313

)

Total Sotherly Hotels Inc. stockholders’ equity

 

 

25,024,761

 

 

 

23,377,195

 

Noncontrolling interest

 

 

3,999,832

 

 

 

4,132,662

 

TOTAL EQUITY

 

 

29,024,593

 

 

 

27,509,857

 

TOTAL LIABILITIES AND OWNERS' EQUITY

 

$

305,423,072

 

 

$

299,820,043

 

 

The accompanying notes are an integral part of these 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, 2015

 

 

June 30, 2014

 

 

June 30, 2015

 

 

June 30, 2014

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

$

26,351,371

 

 

$

25,416,248

 

 

$

47,687,785

 

 

$

42,869,437

 

Food and beverage department

 

 

8,605,316

 

 

 

9,020,055

 

 

 

16,332,123

 

 

 

15,271,738

 

Other operating departments

 

 

1,908,421

 

 

 

1,903,398

 

 

 

3,820,830

 

 

 

3,208,915

 

Total revenue

 

 

36,865,108

 

 

 

36,339,701

 

 

 

67,840,738

 

 

 

61,350,090

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

6,498,077

 

 

 

6,278,583

 

 

 

12,341,017

 

 

 

11,030,109

 

Food and beverage department

 

 

5,700,236

 

 

 

5,936,451

 

 

 

11,105,621

 

 

 

10,006,821

 

Other operating departments

 

 

362,987

 

 

 

335,502

 

 

 

701,166

 

 

 

537,008

 

Indirect

 

 

12,332,869

 

 

 

12,189,910

 

 

 

23,801,212

 

 

 

21,673,784

 

Total hotel operating expenses

 

 

24,894,169

 

 

 

24,740,446

 

 

 

47,949,016

 

 

 

43,247,722

 

Depreciation and amortization

 

 

3,304,906

 

 

 

2,988,968

 

 

 

6,209,297

 

 

 

5,423,296

 

Corporate general and administrative

 

 

1,490,380

 

 

 

1,391,206

 

 

 

2,941,604

 

 

 

2,698,997

 

Total operating expenses

 

 

29,689,455

 

 

 

29,120,620

 

 

 

57,099,917

 

 

 

51,370,015

 

NET OPERATING INCOME

 

 

7,175,653

 

 

 

7,219,081

 

 

 

10,740,821

 

 

 

9,980,075

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(3,840,435

)

 

 

(3,925,428

)

 

 

(7,614,970

)

 

 

(6,808,867

)

Interest income

 

 

15,308

 

 

 

5,267

 

 

 

25,409

 

 

 

7,156

 

Equity income in joint venture

 

 

24,368

 

 

 

17,417

 

 

 

498,717

 

 

 

404,968

 

Loss on early debt extinguishment

 

 

(698,083

)

 

 

-

 

 

 

(698,083

)

 

 

-

 

Gain on involuntary conversion of asset

 

 

37,833

 

 

 

-

 

 

 

37,833

 

 

 

-

 

Net income before income taxes

 

 

2,714,644

 

 

 

3,316,337

 

 

 

2,989,727

 

 

 

3,583,332

 

Income tax (provision) benefit

 

 

(955,535

)

 

 

(563,782

)

 

 

(516,760

)

 

 

171,537

 

Net income

 

 

1,759,109

 

 

 

2,752,555

 

 

 

2,472,967

 

 

 

3,754,869

 

Less: Net income attributable to the noncontrolling interest

 

 

(327,999

)

 

 

(585,866

)

 

 

(466,523

)

 

 

(805,178

)

Net income attributable to the Company

 

$

1,431,110

 

 

$

2,166,689

 

 

$

2,006,444

 

 

$

2,949,691

 

Net income per share attributable to the Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.13

 

 

$

0.21

 

 

$

0.19

 

 

$

0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

10,768,730

 

 

 

10,353,677

 

 

 

10,682,743

 

 

 

10,290,047

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

5


SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-

 

 

in Excess of

 

 

Noncontrolling

 

 

 

 

 

 

 

Shares

 

 

Par Value

 

 

In Capital

 

 

Retained Earnings

 

 

Interest

 

 

Total

 

Balances at December 31, 2014

 

 

10,570,932

 

 

$

105,709

 

 

$

58,659,799

 

 

$

(35,388,313

)

 

$

4,132,662

 

 

$

27,509,857

 

Issuance of unrestricted common stock awards

 

 

26,350

 

 

 

263

 

 

 

193,936

 

 

 

-

 

 

 

-

 

 

 

194,199

 

Issuance of restricted common stock awards

 

 

9,750

 

 

 

98

 

 

 

71,760

 

 

 

-

 

 

 

-

 

 

 

71,858

 

Issuance of common stock from ATM sales

 

 

98,682

 

 

 

987

 

 

 

681,223

 

 

 

-

 

 

 

-

 

 

 

682,210

 

Conversion of units into common stock

 

 

150,000

 

 

 

1,500

 

 

 

238,065

 

 

 

-

 

 

 

(239,565

)

 

 

-

 

Amortization of restricted stock award

 

 

-

 

 

 

-

 

 

 

9,960

 

 

 

-

 

 

 

-

 

 

 

9,960

 

Dividends and distributions declared

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,556,670

)

 

 

(359,788

)

 

 

(1,916,458

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,006,444

 

 

 

466,523

 

 

 

2,472,967

 

Balances at June 30, 2015

 

 

10,855,714

 

 

$

108,557

 

 

$

59,854,743

 

 

$

(34,938,539

)

 

$

3,999,832

 

 

$

29,024,593

 

 

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

 

 

6


SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2015

 

 

June 30, 2014

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

2,472,967

 

 

$

3,754,869

 

Adjustments to reconcile net income to net cash provided by

   operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

6,209,297

 

 

 

5,423,296

 

Equity income in joint venture

 

 

(498,717

)

 

 

(404,968

)

Amortization of deferred financing costs

 

 

1,384,332

 

 

 

613,279

 

Charges related to equity-based compensation

 

 

276,016

 

 

 

235,605

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Restricted cash

 

 

(417,603

)

 

 

(1,018,062

)

Accounts receivable

 

 

(2,294,576

)

 

 

(1,705,481

)

Prepaid expenses, inventory and other assets

 

 

(467,358

)

 

 

(1,063,887

)

Deferred income taxes

 

 

408,804

 

 

 

(307,245

)

Accounts payable and other accrued liabilities

 

 

1,844,024

 

 

 

6,455,198

 

Advance deposits

 

 

408,191

 

 

 

438,763

 

Accounts receivable - affiliate

 

 

40,734

 

 

 

(55,559

)

Net cash provided by operating activities

 

 

9,366,111

 

 

 

12,365,808

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisition of hotel properties

 

 

-

 

 

 

(61,106,085

)

Improvements and additions to hotel properties

 

 

(10,702,570

)

 

 

(2,559,086

)

Distributions from joint venture

 

 

600,000

 

 

 

750,000

 

Funding of restricted cash reserves

 

 

(3,715,397

)

 

 

(1,652,014

)

Proceeds from involuntary conversion of assets

 

 

37,833

 

 

 

-

 

Proceeds of restricted cash reserves

 

 

3,937,582

 

 

 

1,727,194

 

Net cash used in investing activities

 

 

(9,842,552

)

 

 

(62,839,991

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds of mortgage debt

 

 

47,000,000

 

 

 

45,600,000

 

Proceeds of loans

 

 

-

 

 

 

19,000,000

 

Proceeds from the sale of common stock

 

 

682,210

 

 

 

-

 

Dividends and distributions paid

 

 

(1,773,965

)

 

 

(1,178,049

)

Payment of deferred financing costs

 

 

(934,897

)

 

 

(1,686,615

)

Payments on mortgage debt and loans

 

 

(43,856,730

)

 

 

(2,712,097

)

Net cash provided by financing activities

 

 

1,116,618

 

 

 

59,023,239

 

Net increase in cash and cash equivalents

 

 

640,177

 

 

 

8,549,056

 

Cash and cash equivalents at the beginning of the period

 

 

16,634,499

 

 

 

9,376,628

 

Cash and cash equivalents at the end of the period

 

$

17,274,676

 

 

$

17,925,684

 

Supplemental disclosures:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

6,019,832

 

 

$

5,515,200

 

Cash paid during the period for income taxes

 

$

97,200

 

 

$

221,157

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Proceeds of mortgage debt contributed to restricted cash reserves

 

$

-

 

 

$

1,500,000

 

Change in amount of hotel property improvements in accounts payable and

   accrued liabilities

 

$

633,167

 

 

$

-

 

Change in amount of deferred financing and deferred offering cost in accounts

   payable and accrued liabilities

 

$

-

 

 

$

-

 

 

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

 

 

7


SOTHERLY HOTELS LP

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30, 2015

 

 

December 31, 2014

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

263,831,439

 

 

$

260,192,153

 

Investment in joint venture

 

 

1,880,824

 

 

 

1,982,107

 

Cash and cash equivalents

 

 

17,274,676

 

 

 

16,634,499

 

Restricted cash

 

 

6,817,281

 

 

 

6,621,864

 

Accounts receivable, net

 

 

4,203,338

 

 

 

1,908,762

 

Accounts receivable-affiliate

 

 

156,940

 

 

 

197,674

 

Prepaid expenses, inventory and other assets

 

 

3,792,347

 

 

 

3,334,401

 

Deferred income taxes

 

 

3,134,491

 

 

 

3,543,295

 

Deferred financing costs, net

 

 

4,331,736

 

 

 

5,405,288

 

TOTAL ASSETS

 

$

305,423,072

 

 

$

299,820,043

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans

 

$

208,434,927

 

 

$

205,291,657

 

Unsecured notes

 

 

52,900,000

 

 

 

52,900,000

 

Accounts payable and other accrued liabilities

 

 

12,439,225

 

 

 

12,044,886

 

Advance deposits

 

 

1,628,919

 

 

 

1,220,729

 

Dividends and distributions payable

 

 

995,408

 

 

 

852,914

 

TOTAL LIABILITIES

 

$

276,398,479

 

 

$

272,310,186

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (see Note 6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PARTNERS’ CAPITAL

 

 

 

 

 

 

 

 

General Partner: 132,573 and 131,218 units issued and outstanding as of

   June 30, 2015 and December 31, 2014, respectively

 

 

536,014

 

 

 

520,791

 

Limited Partners: 13,123,968 and 12,990,541 units issued and outstanding

   as of June 30, 2015 and December 31, 2014, respectively

 

 

28,488,579

 

 

 

26,989,066

 

TOTAL PARTNERS’ CAPITAL

 

 

29,024,593

 

 

 

27,509,857

 

TOTAL LIABILITIES AND PARTNERS’ CAPITAL

 

$

305,423,072

 

 

$

299,820,043

 

 

The accompanying notes are an integral part of these 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, 2015

 

 

June 30, 2014

 

 

June 30, 2015

 

 

June 30, 2014

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

$

26,351,371

 

 

$

25,416,248

 

 

$

47,687,785

 

 

$

42,869,437

 

Food and beverage department

 

 

8,605,316

 

 

 

9,020,055

 

 

 

16,332,123

 

 

 

15,271,738

 

Other operating departments

 

 

1,908,421

 

 

 

1,903,398

 

 

 

3,820,830

 

 

 

3,208,915

 

Total revenue

 

 

36,865,108

 

 

 

36,339,701

 

 

 

67,840,738

 

 

 

61,350,090

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

6,498,077

 

 

 

6,278,583

 

 

 

12,341,017

 

 

 

11,030,109

 

Food and beverage department

 

 

5,700,236

 

 

 

5,936,451

 

 

 

11,105,621

 

 

 

10,006,821

 

Other operating departments

 

 

362,987

 

 

 

335,502

 

 

 

701,166

 

 

 

537,008

 

Indirect

 

 

12,332,869

 

 

 

12,189,910

 

 

 

23,801,212

 

 

 

21,673,784

 

Total hotel operating expenses

 

 

24,894,169

 

 

 

24,740,446

 

 

 

47,949,016

 

 

 

43,247,722

 

Depreciation and amortization

 

 

3,304,906

 

 

 

2,988,968

 

 

 

6,209,297

 

 

 

5,423,296

 

Corporate general and administrative

 

 

1,490,380

 

 

 

1,391,206

 

 

 

2,941,603

 

 

 

2,698,997

 

Total operating expenses

 

 

29,689,455

 

 

 

29,120,620

 

 

 

57,099,916

 

 

 

51,370,015

 

NET OPERATING INCOME

 

 

7,175,653

 

 

 

7,219,081

 

 

 

10,740,822

 

 

 

9,980,075

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(3,840,435

)

 

 

(3,925,428

)

 

 

(7,614,970

)

 

 

(6,808,867

)

Interest income

 

 

15,308

 

 

 

5,267

 

 

 

25,408

 

 

 

7,156

 

Equity income in joint venture

 

 

24,368

 

 

 

17,417

 

 

 

498,717

 

 

 

404,968

 

Loss on early debt extinguishment

 

 

(698,083

)

 

 

-

 

 

 

(698,083

)

 

 

-

 

Gain on involuntary conversion of asset

 

 

37,833

 

 

 

-

 

 

 

37,833

 

 

 

-

 

Net income before income taxes

 

 

2,714,644

 

 

 

3,316,337

 

 

 

2,989,727

 

 

 

3,583,332

 

Income tax benefit  (provision)

 

 

(955,535

)

 

 

(563,782

)

 

 

(516,760

)

 

 

171,537

 

Net income

 

$

1,759,109

 

 

$

2,752,555

 

 

$

2,472,967

 

 

$

3,754,869

 

Net income per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.13

 

 

$

0.21

 

 

$

0.19

 

 

$

0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of units outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

13,052,524

 

 

 

13,107,804

 

 

 

13,099,316

 

 

 

13,098,870

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

9


SOTHERLY HOTELS LP

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS’ CAPITAL

(unaudited)

 

 

 

General Partner

 

 

Limited Partner

 

 

 

 

 

 

 

Units

 

 

Amount

 

 

Units

 

 

Amounts

 

 

Total

 

Balances at December 31, 2014

 

 

131,218

 

 

$

520,791

 

 

 

12,990,541

 

 

$

26,989,066

 

 

$

27,509,857

 

Issuance of partnership units

 

 

1,355

 

 

 

9,607

 

 

 

133,427

 

 

 

938,660

 

 

 

948,267

 

Amortization of restricted units award