10-Q 1 soho-10q_20160630.htm FORM 10-Q soho-10q_20160630.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, 2016

 

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, 2016, there were 14,949,651 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,” and the Company’s common stock as “Common Stock.”  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, 2016 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 6 – Equity; and

 

·

Note 12 – 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, 2016 (unaudited) and December 31, 2015

 

4

 

 

Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2016 and 2015

 

5

 

 

Consolidated Statement of Changes in Equity (unaudited) for the Six Months Ended June 30, 2016

 

6

 

 

Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2016 and 2015

 

7

 

 

Sotherly Hotels LP

 

8

 

 

Consolidated Balance Sheets as of June 30, 2016 (unaudited) and December 31, 2015

 

8

 

 

Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2016 and 2015

 

9

 

 

Consolidated Statement of Changes in Partners’ Capital (unaudited) for the Six Months Ended June 30, 2016

 

10

 

 

Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2016 and 2015

 

11

 

 

Notes to Consolidated Financial Statements

 

12

Item 2.

 

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

 

26

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

40

Item 4

 

Controls and Procedures

 

41

 

 

 

 

 

PART II

Item 1.

 

Legal Proceedings

 

43

Item 1A.

 

Risk Factors

 

43

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

43

Item 3.

 

Defaults Upon Senior Securities

 

43

Item 4.

 

Mine Safety Disclosures

 

43

Item 5.

 

Other Information

 

43

Item 6.

 

Exhibits

 

44

 

3


PART I

 

 

Item 1.

Consolidated Financial Statements

SOTHERLY HOTELS INC.

CONSOLIDATED BALANCE SHEETS

 

 

June 30, 2016

 

 

December 31, 2015

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Investment in hotel properties, net

$

355,968,880

 

 

$

354,963,242

 

Cash and cash equivalents

 

26,085,488

 

 

 

11,493,914

 

Restricted cash

 

4,484,016

 

 

 

5,793,840

 

Accounts receivable, net

 

4,064,322

 

 

 

4,071,175

 

Accounts receivable-affiliate

 

210,618

 

 

 

226,552

 

Loan proceeds receivable

 

 

 

 

2,600,711

 

Prepaid expenses, inventory and other assets

 

5,039,136

 

 

 

4,432,432

 

Deferred income taxes

 

5,397,989

 

 

 

5,390,374

 

TOTAL ASSETS

$

401,250,449

 

 

$

388,972,240

 

LIABILITIES

 

 

 

 

 

 

 

Mortgage loans, net

$

279,454,808

 

 

$

270,331,724

 

Unsecured notes, net

 

50,830,408

 

 

 

50,460,106

 

Accounts payable and accrued expenses

 

14,605,689

 

 

 

12,334,879

 

Advance deposits

 

2,197,892

 

 

 

1,651,840

 

Dividends and distributions payable

 

1,505,501

 

 

 

1,335,323

 

TOTAL LIABILITIES

$

348,594,298

 

 

$

336,113,872

 

Commitments and contingencies (See Note 5)

 

 

 

 

 

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, 14,949,651

   shares and 14,490,714 shares issued and outstanding at June 30, 2016

   and December 31, 2015, respectively

 

149,496

 

 

 

144,907

 

Additional paid in capital

 

83,796,667

 

 

 

82,749,058

 

Distributions in excess of retained earnings

 

(34,262,825

)

 

 

(33,890,834

)

Total Sotherly Hotels Inc. stockholders’ equity

 

49,683,338

 

 

 

49,003,131

 

Noncontrolling interest

 

2,972,813

 

 

 

3,855,237

 

TOTAL EQUITY

 

52,656,151

 

 

 

52,858,368

 

TOTAL LIABILITIES AND OWNERS' EQUITY

$

401,250,449

 

 

$

388,972,240

 

 

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, 2016

 

 

June 30, 2015

 

 

June 30, 2016

 

 

June 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

$

29,909,287

 

 

$

26,351,371

 

 

$

57,231,700

 

 

$

47,687,785

 

Food and beverage department

 

9,578,410

 

 

 

8,605,316

 

 

 

17,828,089

 

 

 

16,332,123

 

Other operating departments

 

2,337,257

 

 

 

1,908,421

 

 

 

4,575,309

 

 

 

3,820,830

 

Total revenue

 

41,824,954

 

 

 

36,865,108

 

 

 

79,635,098

 

 

 

67,840,738

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

7,599,209

 

 

 

6,498,077

 

 

 

14,679,842

 

 

 

12,341,017

 

Food and beverage department

 

6,490,681

 

 

 

5,700,236

 

 

 

12,430,542

 

 

 

11,105,621

 

Other operating departments

 

644,430

 

 

 

362,987

 

 

 

1,238,399

 

 

 

701,166

 

Indirect

 

14,613,064

 

 

 

12,332,869

 

 

 

28,748,658

 

 

 

23,801,212

 

Total hotel operating expenses

 

29,347,384

 

 

 

24,894,169

 

 

 

57,097,441

 

 

 

47,949,016

 

Depreciation and amortization

 

3,801,478

 

 

 

3,304,906

 

 

 

7,470,115

 

 

 

6,209,297

 

Corporate general and administrative

 

1,356,754

 

 

 

1,490,380

 

 

 

2,964,048

 

 

 

2,941,604

 

Total operating expenses

 

34,505,616

 

 

 

29,689,455

 

 

 

67,531,604

 

 

 

57,099,917

 

NET OPERATING INCOME

 

7,319,338

 

 

 

7,175,653

 

 

 

12,103,494

 

 

 

10,740,821

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(4,613,165

)

 

 

(3,840,435

)

 

 

(9,245,797

)

 

 

(7,614,970

)

Interest income

 

10,207

 

 

 

15,308

 

 

 

19,038

 

 

 

25,409

 

Equity income in joint venture

 

 

 

 

24,368

 

 

 

 

 

 

498,717

 

Loss on early debt extinguishment

 

(70,293

)

 

 

(698,083

)

 

 

(70,293

)

 

 

(698,083

)

Loss on disposal of assets

 

(140,193

)

 

 

 

 

 

(140,193

)

 

 

 

Unrealized loss on hedging activities

 

(15,517

)

 

 

 

 

 

(66,074

)

 

 

 

Gain on involuntary conversion of asset

 

 

 

 

37,833

 

 

 

 

 

 

37,833

 

Net income before income taxes

 

2,490,377

 

 

 

2,714,644

 

 

 

2,600,175

 

 

 

2,989,727

 

Income tax provision

 

(512,827

)

 

 

(955,535

)

 

 

(76,747

)

 

 

(516,760

)

Net income

 

1,977,550

 

 

 

1,759,109

 

 

 

2,523,428

 

 

 

2,472,967

 

Less: Net income attributable to the noncontrolling interest

 

(216,444

)

 

 

(327,999

)

 

 

(279,223

)

 

 

(466,523

)

Net income attributable to the Company

$

1,761,106

 

 

$

1,431,110

 

 

$

2,244,205

 

 

$

2,006,444

 

Net income per share attributable to the Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

$

0.12

 

 

$

0.13

 

 

$

0.15

 

 

$

0.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

14,949,651

 

 

 

10,768,730

 

 

 

14,871,281

 

 

 

10,682,743

 

 

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

 

 

5


SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Distributions

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-

 

 

in Excess of

 

 

Noncontrolling

 

 

 

 

 

 

Shares

 

 

Par Value

 

 

In Capital

 

 

Retained Earnings

 

 

Interest

 

 

Total

 

Balances at December 31, 2015

 

14,490,714

 

 

$

144,907

 

 

$

82,749,058

 

 

$

(33,890,834

)

 

$

3,855,237

 

 

$

52,858,368

 

Net income

 

 

 

 

 

 

 

 

 

 

2,244,205

 

 

 

279,223

 

 

 

2,523,428

 

Issuance of unrestricted common stock

   awards

 

24,250

 

 

 

242

 

 

 

128,040

 

 

 

 

 

 

 

 

 

128,282

 

Issuance of restricted common stock awards

 

12,000

 

 

 

120

 

 

 

63,360

 

 

 

 

 

 

 

 

 

63,480

 

Conversion of Operating Partnership units

   into shares of common stock

 

422,687

 

 

 

4,227

 

 

 

846,249

 

 

 

 

 

 

(850,476

)

 

 

 

Amortization of restricted stock award

 

 

 

 

 

 

 

9,960

 

 

 

 

 

 

 

 

 

9,960

 

Dividends and distributions declared

 

 

 

 

 

 

 

 

 

 

(2,616,196

)

 

 

(311,171

)

 

 

(2,927,367

)

Balances at June 30, 2016 (unaudited)

 

14,949,651

 

 

$

149,496

 

 

$

83,796,667

 

 

$

(34,262,825

)

 

$

2,972,813

 

 

$

52,656,151

 

 

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, 2016

 

 

June 30, 2015

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$

2,523,428

 

 

$

2,472,967

 

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

 

 

 

 

 

 

 

Depreciation and amortization

 

7,470,115

 

 

 

6,209,297

 

Equity income in joint venture

 

 

 

 

(498,717

)

Amortization of deferred financing costs

 

626,807

 

 

 

686,249

 

Amortization of mortgage premium

 

(12,958

)

 

 

 

Unrealized loss on derivative instrument

 

66,074

 

 

 

 

Loss on disposal of assets

 

140,193

 

 

 

 

Loss on early debt extinguishment

 

70,293

 

 

 

698,083

 

Charges related to equity-based compensation

 

201,722

 

 

 

276,016

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

Restricted cash

 

37,066

 

 

 

(417,603

)

Accounts receivable

 

6,853

 

 

 

(2,294,576

)

Prepaid expenses, inventory and other assets

 

(712,835

)

 

 

(467,358

)

Deferred income taxes

 

(7,615

)

 

 

408,804

 

Accounts payable and other accrued liabilities

 

2,522,235

 

 

 

1,844,024

 

Advance deposits

 

546,052

 

 

 

408,191

 

Accounts receivable - affiliate

 

15,934

 

 

 

40,734

 

Net cash provided by operating activities

 

13,493,364

 

 

 

9,366,111

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Improvements and additions to hotel properties

 

(8,827,313

)

 

 

(10,702,570

)

Distributions from joint venture

 

 

 

 

600,000

 

Funding of restricted cash reserves

 

(4,272,057

)

 

 

(3,715,397

)

Proceeds from involuntary conversion of assets

 

 

 

 

37,833

 

Proceeds of restricted cash reserves

 

5,544,815

 

 

 

3,937,582

 

Net cash used in investing activities

 

(7,554,555

)

 

 

(9,842,552

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds of mortgage debt

 

28,453,664

 

 

 

47,000,000

 

Proceeds from mortgage loan receivable

 

2,600,711

 

 

 

 

Proceeds from sale of common stock

 

 

 

 

682,210

 

Payments on mortgage debt and loans

 

(19,100,406

)

 

 

(43,856,730

)

Payment of deferred financing costs

 

(544,015

)

 

 

(934,897

)

Dividends and distributions paid

 

(2,757,189

)

 

 

(1,773,965

)

Net cash provided by financing activities

 

8,652,765

 

 

 

1,116,618

 

Net increase in cash and cash equivalents

 

14,591,574

 

 

 

640,177

 

Cash and cash equivalents at the beginning of the period

 

11,493,914

 

 

 

16,634,499

 

Cash and cash equivalents at the end of the period

$

26,085,488

 

 

$

17,274,676

 

Supplemental disclosures:

 

 

 

 

 

 

 

Cash paid during the period for interest

$

8,071,068

 

 

$

6,019,832

 

Cash paid during the period for income taxes

$

59,490

 

 

$

97,200

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

Change in amount of hotel property improvements in accounts payable and accrued

   liabilities

$

251,422

 

 

$

633,167

 

 

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

 

 

7


SOTHERLY HOTELS LP

CONSOLIDATED BALANCE SHEETS

 

 

June 30, 2016

 

 

December 31, 2015

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Investment in hotel properties, net

$

355,968,880

 

 

$

354,963,242

 

Cash and cash equivalents

 

26,085,488

 

 

 

11,493,914

 

Restricted cash

 

4,484,016

 

 

 

5,793,840

 

Accounts receivable, net

 

4,064,322

 

 

 

4,071,175

 

Accounts receivable-affiliate

 

210,618

 

 

 

226,552

 

Loan proceeds receivable

 

 

 

 

2,600,711

 

Prepaid expenses, inventory and other assets

 

5,039,136

 

 

 

4,432,432

 

Deferred income taxes

 

5,397,989

 

 

 

5,390,374

 

TOTAL ASSETS

$

401,250,449

 

 

$

388,972,240

 

LIABILITIES

 

 

 

 

 

 

 

Mortgage loans, net

$

279,454,808

 

 

$

270,331,724

 

Unsecured notes, net

 

50,830,408

 

 

 

50,460,106

 

Accounts payable and other accrued liabilities

 

14,605,689

 

 

 

12,334,879

 

Advance deposits

 

2,197,892

 

 

 

1,651,840

 

Dividends and distributions payable

 

1,505,501

 

 

 

1,335,323

 

TOTAL LIABILITIES

$

348,594,298

 

 

$

336,113,872

 

 

 

 

 

 

 

 

 

Commitments and contingencies (see Note 5)

 

 

 

 

 

 

 

 

 

 

 

 

 

PARTNERS’ CAPITAL

 

 

 

 

 

 

 

General Partner: 167,278 and 166,915 units issued and outstanding as of

   June 30, 2016 and December 31, 2015, respectively

 

772,305

 

 

 

774,295

 

Limited Partners: 16,560,513 and 16,524,626 units issued and outstanding as

   of June 30, 2016 and December 31, 2015, respectively

 

51,883,846

 

 

 

52,084,073

 

TOTAL PARTNERS’ CAPITAL

 

52,656,151

 

 

 

52,858,368

 

TOTAL LIABILITIES AND PARTNERS’ CAPITAL

$

401,250,449

 

 

$

388,972,240

 

 

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, 2016

 

 

June 30, 2015

 

 

June 30, 2016

 

 

June 30, 2015

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

$

29,909,287

 

 

$

26,351,371

 

 

$

57,231,700

 

 

$

47,687,785

 

Food and beverage department

 

 

9,578,410

 

 

 

8,605,316

 

 

 

17,828,089

 

 

 

16,332,123

 

Other operating departments

 

 

2,337,257

 

 

 

1,908,421

 

 

 

4,575,309

 

 

 

3,820,830

 

Total revenue

 

 

41,824,954

 

 

 

36,865,108

 

 

 

79,635,098

 

 

 

67,840,738

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

7,599,209

 

 

 

6,498,077

 

 

 

14,679,842

 

 

 

12,341,017

 

Food and beverage department

 

 

6,490,681

 

 

 

5,700,236

 

 

 

12,430,542

 

 

 

11,105,621

 

Other operating departments

 

 

644,430

 

 

 

362,987

 

 

 

1,238,399

 

 

 

701,166

 

Indirect

 

 

14,613,064

 

 

 

12,332,869

 

 

 

28,748,658

 

 

 

23,801,212

 

Total hotel operating expenses

 

 

29,347,384

 

 

 

24,894,169

 

 

 

57,097,441

 

 

 

47,949,016

 

Depreciation and amortization

 

 

3,801,478

 

 

 

3,304,906

 

 

 

7,470,115

 

 

 

6,209,297

 

Corporate general and administrative

 

 

1,356,754

 

 

 

1,490,380

 

 

 

2,964,048

 

 

 

2,941,604

 

Total operating expenses

 

 

34,505,616

 

 

 

29,689,455

 

 

 

67,531,604

 

 

 

57,099,917

 

NET OPERATING INCOME

 

 

7,319,338

 

 

 

7,175,653

 

 

 

12,103,494

 

 

 

10,740,821

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(4,613,165

)

 

 

(3,840,435

)

 

 

(9,245,797

)

 

 

(7,614,970

)

Interest income

 

 

10,207

 

 

 

15,308

 

 

 

19,038

 

 

 

25,409

 

Equity income in joint venture

 

 

 

 

 

24,368

 

 

 

 

 

 

498,717

 

Loss on early debt extinguishment

 

 

(70,293

)

 

 

(698,083

)

 

 

(70,293

)

 

 

(698,083

)

Loss on disposal of assets

 

 

(140,193

)

 

 

 

 

 

(140,193

)

 

 

 

Unrealized loss on hedging activities

 

 

(15,517

)

 

 

 

 

 

(66,074

)

 

 

 

Gain on involuntary conversion of asset

 

 

 

 

 

37,833

 

 

 

 

 

 

37,833

 

Net income before income taxes

 

 

2,490,377

 

 

 

2,714,644

 

 

 

2,600,175

 

 

 

2,989,727

 

Income tax provision

 

 

(512,827

)

 

 

(955,535

)

 

 

(76,747

)

 

 

(516,760

)

Net income

 

$

1,977,550

 

 

$

1,759,109

 

 

$

2,523,428

 

 

$

2,472,967

 

Net income per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.12

 

 

$

0.13

 

 

$

0.15

 

 

$

0.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of units outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

16,727,791

 

 

 

13,052,524

 

 

 

16,721,417

 

 

 

13,099,316

 

 

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

 

 

9


SOTHERLY HOTELS LP

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS’ CAPITAL

 

 

General Partner

 

 

Limited Partner

 

 

 

 

 

 

Units

 

 

Amount

 

 

Units

 

 

Amounts

 

 

Total

 

Balances at December 31, 2015

 

166,915

 

 

$

774,295

 

 

 

16,524,626

 

 

$

52,084,073

 

 

$

52,858,368

 

Issuance of partnership units

 

363

 

 

 

1,918

 

 

 

35,887

 

 

 

189,844

 

 

 

191,762

 

Amortization of restricted units award

 

 

 

 

100

 

 

 

 

 

 

9,860

 

 

 

9,960

 

Distributions declared

 

 

 

 

(29,242

)

 

 

 

 

 

(2,898,125

)

 

 

(2,927,367

)

Net income

 

 

 

 

25,234

 

 

 

 

 

 

2,498,194

 

 

 

2,523,428

 

Balances at June 30, 2016 (unaudited)

 

167,278

 

 

$

772,305

 

 

 

16,560,513

 

 

$

51,883,846

 

 

$

52,656,151

 

 

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

 

 

10


SOTHERLY HOTELS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

Six Months Ended

 

 

Six Months Ended

 

 

June 30, 2016

 

 

June 30, 2015

 

Cash flows from operating activities: