10-Q 1 soho-10q_20170331.htm 10-Q soho-10q_20170331.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, 2017

 

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 8, 2017, there were 13,798,051 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, 2017 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; and

 

Note 8 – Common Stock and Units; 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, 2017 (unaudited) and December 31, 2016

 

4

 

 

Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2017 and 2016

 

5

 

 

Consolidated Statement of Changes in Equity (unaudited) for the Three Months Ended March 31, 2017

 

6

 

 

Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2017 and 2016

 

7

 

 

Sotherly Hotels LP

 

8

 

 

Consolidated Balance Sheets as of March 31, 2017 (unaudited) and December 31, 2016

 

8

 

 

Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2017 and 2016

 

9

 

 

Consolidated Statement of Changes in Partners’ Capital (unaudited) for the Three Months Ended March 31, 2017

 

10

 

 

Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2017 and 2016

 

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

 

38

Item 4

 

Controls and Procedures

 

39

 

 

 

 

 

PART II

Item 1.

 

Legal Proceedings

 

41

Item 1A.

 

Risk Factors

 

41

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

41

Item 3.

 

Defaults Upon Senior Securities

 

41

Item 4.

 

Mine Safety Disclosures

 

41

Item 5.

 

Other Information

 

41

Item 6.

 

Exhibits

 

42

 

3


PART I

 

 

Item 1.

Consolidated Financial Statements

SOTHERLY HOTELS INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

March 31, 2017

 

 

December 31, 2016

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

355,997,751

 

 

$

348,593,912

 

Investment in hotel properties held for sale, net

 

 

-

 

 

 

5,333,000

 

Cash and cash equivalents

 

 

21,743,744

 

 

 

31,766,775

 

Restricted cash

 

 

4,644,532

 

 

 

4,596,145

 

Accounts receivable, net

 

 

5,601,922

 

 

 

4,127,748

 

Accounts receivable-affiliate

 

 

475,537

 

 

 

4,175

 

Prepaid expenses, inventory and other assets

 

 

5,662,512

 

 

 

4,648,469

 

Deferred income taxes

 

 

6,831,290

 

 

 

6,949,340

 

TOTAL ASSETS

 

$

400,957,288

 

 

$

406,019,564

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans, net

 

$

279,269,154

 

 

$

282,708,289

 

Unsecured notes, net

 

 

24,392,721

 

 

 

24,308,713

 

Accounts payable and accrued liabilities

 

 

14,445,106

 

 

 

12,970,960

 

Advance deposits

 

 

3,405,606

 

 

 

2,315,787

 

Dividends and distributions payable

 

 

2,430,869

 

 

 

2,376,527

 

TOTAL LIABILITIES

 

$

323,943,456

 

 

$

324,680,276

 

Commitments and contingencies  (See Note 6)

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

 

Sotherly Hotels Inc. stockholders’ equity

 

 

 

 

 

 

 

 

8% Series B cumulative redeemable perpetual preferred stock, par value $0.01,

   11,000,000 shares authorized, liquidation preference $25 per share, 1,610,000

   shares issued and outstanding at March 31, 2017 and December 31, 2016

 

 

16,100

 

 

 

16,100

 

Common stock, par value $0.01, 49,000,000 shares authorized, 13,798,051

   shares and 14,468,551 shares issued and outstanding at March 31, 2017

   and December 31, 2016, respectively

 

 

137,980

 

 

 

144,685

 

Additional paid-in capital

 

 

118,495,927

 

 

 

118,395,082

 

Unearned ESOP Shares

 

 

(4,874,758

)

 

 

 

Distributions in excess of retained earnings

 

 

(39,142,720

)

 

 

(39,545,754

)

Total Sotherly Hotels Inc. stockholders’ equity

 

 

74,632,529

 

 

 

79,010,113

 

Noncontrolling interest

 

 

2,381,303

 

 

 

2,329,175

 

TOTAL EQUITY

 

 

77,013,832

 

 

 

81,339,288

 

TOTAL LIABILITIES AND EQUITY

 

$

400,957,288

 

 

$

406,019,564

 

 

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, 2017

 

 

March 31, 2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

REVENUE

 

 

 

 

 

 

 

 

Rooms department

 

$

27,366,634

 

 

$

27,322,413

 

Food and beverage department

 

 

8,323,759

 

 

 

8,249,679

 

Other operating departments

 

 

3,004,493

 

 

 

2,238,052

 

Total revenue

 

 

38,694,886

 

 

 

37,810,144

 

EXPENSES

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

Rooms department

 

 

6,682,279

 

 

 

7,080,633

 

Food and beverage department

 

 

5,728,473

 

 

 

5,939,861

 

Other operating departments

 

 

600,020

 

 

 

593,969

 

Indirect

 

 

14,205,231

 

 

 

14,135,595

 

Total hotel operating expenses

 

 

27,216,003

 

 

 

27,750,058

 

Depreciation and amortization

 

 

4,061,097

 

 

 

3,668,638

 

Corporate general and administrative

 

 

1,712,082

 

 

 

1,607,294

 

Total operating expenses

 

 

32,989,182

 

 

 

33,025,990

 

NET OPERATING INCOME

 

 

5,705,704

 

 

 

4,784,154

 

Other income (expense)

 

 

 

 

 

 

 

 

Interest expense

 

 

(3,813,717

)

 

 

(4,632,632

)

Interest income

 

 

39,705

 

 

 

8,830

 

Unrealized loss on hedging activities

 

 

(15,945

)

 

 

(50,557

)

Gain on sale of assets

 

 

100,407

 

 

 

 

Gain on involuntary conversion of assets

 

 

1,041,815

 

 

 

 

Net income before income taxes

 

 

3,057,969

 

 

 

109,795

 

Income tax (provision) benefit

 

 

(171,937

)

 

 

436,079

 

Net income

 

 

2,886,032

 

 

 

545,874

 

Less: Net income attributable to noncontrolling interest

 

 

(229,942

)

 

 

(62,779

)

Net income attributable to the Company

 

 

2,656,090

 

 

 

483,095

 

Distributions to preferred stockholders

 

 

(805,000

)

 

 

 

Net income available to common stockholders

 

$

1,851,090

 

 

$

483,095

 

Net income per share available to common stockholders

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.13

 

 

$

0.03

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

Basic and diluted

 

 

14,025,489

 

 

 

14,792,911

 

 

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

 

 

5


SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Distributions

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Paid-

 

 

Unearned ESOP

 

 

in Excess of

 

 

Noncontrolling

 

 

 

 

 

 

Shares

 

 

Par Value

 

 

Shares

 

 

Par Value

 

 

In Capital

 

 

Shares

 

 

Retained Earnings

 

 

Interest

 

 

Total

 

Balances at December 31, 2016

 

1,610,000

 

 

$

16,100

 

 

 

14,468,551

 

 

$

144,685

 

 

$

118,395,082

 

 

$

 

 

$

(39,545,754

)

 

$

2,329,175

 

 

$

81,339,288

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,656,090

 

 

 

229,942

 

 

 

2,886,032

 

Issuance of restricted

   common stock awards

 

 

 

 

 

 

 

12,000

 

 

 

120

 

 

 

89,040

 

 

 

 

 

 

 

 

 

 

 

 

89,160

 

Unearned ESOP Shares and dividends

 

 

 

 

 

 

 

(682,500

)

 

 

(6,825

)

 

 

6,825

 

 

 

(4,874,758

)

 

 

 

 

 

 

 

 

(4,874,758

)

Amortization of restricted

   stock award

 

 

 

 

 

 

 

 

 

 

 

 

 

4,980

 

 

 

 

 

 

 

 

 

 

 

 

4,980

 

Preferred stock dividends

   declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(805,000

)

 

 

 

 

 

(805,000

)

Common stockholders'

   dividends and

   distributions declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,448,056

)

 

 

(177,814

)

 

 

(1,625,870

)

Balances at March 31, 2017 (Unaudited)

 

1,610,000

 

 

$

16,100

 

 

 

13,798,051

 

 

$

137,980

 

 

$

118,495,927

 

 

$

(4,874,758

)

 

$

(39,142,720

)

 

$

2,381,303

 

 

$

77,013,832

 

 

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, 2017

 

 

March 31, 2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

2,886,032

 

 

$

545,874

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

4,061,097

 

 

 

3,668,638

 

Amortization of deferred financing costs

 

 

214,357

 

 

 

313,410

 

Amortization of mortgage premium

 

 

(6,170

)

 

 

(6,479

)

Gain on involuntary conversion of assets

 

 

(1,041,815

)

 

 

 

Unrealized loss on derivative instrument

 

 

15,945

 

 

 

50,557

 

Gain on sale of assets

 

 

(100,407

)

 

 

 

Charges related to equity-based compensation

 

 

94,140

 

 

 

196,742

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Restricted cash

 

 

(403,086

)

 

 

(120,693

)

Accounts receivable

 

 

(1,209,174

)

 

 

222,714

 

Prepaid expenses, inventory and other assets

 

 

(1,066,260

)

 

 

(342,455

)

Deferred income taxes

 

 

118,050

 

 

 

(487,469

)

Accounts payable and other accrued liabilities

 

 

1,435,722

 

 

 

1,892,725

 

Advance deposits

 

 

1,089,819

 

 

 

669,690

 

Accounts receivable - affiliate

 

 

(471,361

)

 

 

17,826

 

Net cash provided by operating activities

 

 

5,616,889

 

 

 

6,621,080

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisitions of hotel properties

 

 

(3,986,849

)

 

 

 

Improvements and additions to hotel properties

 

 

(6,304,669

)

 

 

(4,956,359

)

Funding of restricted cash reserves

 

 

(1,804,485

)

 

 

(1,674,236

)

Proceeds of restricted cash reserves

 

 

2,159,185

 

 

 

3,958,496

 

Proceeds from the sale of hotel property

 

 

5,434,856

 

 

 

 

Proceeds from insurance conversion

 

 

776,815

 

 

 

 

Proceeds from the sale of assets

 

 

2,955

 

 

 

 

Net cash used in investing activities

 

 

(3,722,192

)

 

 

(2,672,099

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from mortgage loan receivable

 

 

 

 

 

2,600,711

 

Repurchase of common stock

 

 

(1,103,130

)

 

 

 

Payments on mortgage loans

 

 

(3,566,914

)

 

 

(1,446,688

)

Refund (payments) of deferred financing costs

 

 

3,600

 

 

 

(278,899

)

Funding of ESOP stock purchase

 

 

(4,874,758

)

 

 

 

Dividends and distributions paid

 

 

(2,376,526

)

 

 

(1,332,094

)

Net cash used in financing activities

 

 

(11,917,728

)

 

 

(456,970

)

Net increase (decrease) in cash and cash equivalents

 

 

(10,023,031

)

 

 

3,492,011

 

Cash and cash equivalents at the beginning of the period

 

 

31,766,775

 

 

 

11,493,914

 

Cash and cash equivalents at the end of the period

 

$

21,743,744

 

 

$

14,985,925

 

Supplemental disclosures:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

3,513,312

 

 

$

3,606,752

 

Cash paid during the period for income taxes

 

$

81,361

 

 

$

9,165

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Change in amount of hotel property improvements in accounts payable and

   accrued liabilities

 

$

(1,141,553

)

 

$

(7,209

)

 

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

 

 

7


SOTHERLY HOTELS LP

CONSOLIDATED BALANCE SHEETS

 

 

March 31, 2017

 

 

December 31, 2016

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Investment in hotel properties, net

$

355,997,751

 

 

$

348,593,912

 

Investment in hotel property held for sale, net

 

 

 

 

5,333,000

 

Cash and cash equivalents

 

21,743,744

 

 

 

31,766,775

 

Restricted cash

 

4,644,532

 

 

 

4,596,145

 

Accounts receivable, net

 

5,601,922

 

 

 

4,127,748

 

Accounts receivable-affiliate

 

495,463

 

 

 

4,175

 

Loan receivable - affiliate

 

4,874,758

 

 

 

 

Prepaid expenses, inventory and other assets

 

5,662,512

 

 

 

4,648,469

 

Deferred income taxes

 

6,831,290

 

 

 

6,949,340

 

TOTAL ASSETS

$

405,851,972

 

 

$

406,019,564

 

LIABILITIES

 

 

 

 

 

 

 

Mortgage loans, net

$

279,269,154

 

 

$

282,708,289

 

Unsecured notes, net

 

24,392,721

 

 

 

24,308,713

 

Accounts payable and other accrued liabilities

 

14,445,106

 

 

 

12,970,960

 

Advance deposits

 

3,405,606

 

 

 

2,315,787

 

Dividends and distributions payable

 

2,430,869

 

 

 

2,376,527

 

TOTAL LIABILITIES

$

323,943,456

 

 

$

324,680,276

 

 

 

 

 

 

 

 

 

Commitments and contingencies (see Note 6)

 

 

 

 

 

 

 

 

 

 

 

 

 

PARTNERS’ CAPITAL

 

 

 

 

 

 

 

8% Series B Cumulative Redeemable Perpetual Preferred units, liquidation preference

$25 per unit, 1,610,000 units issued and outstanding at March 31, 2017 and December 31, 2016

 

37,766,531

 

 

 

37,766,531

 

General Partner: 162,587 units and 162,467 units issued and outstanding as of

   March 31, 2017 and December 31, 2016, respectively

 

695,131

 

 

 

681,389

 

Limited Partners: 16,096,104 units and 16,084,224 units issued and outstanding as

   of March 31, 2017 and December 31, 2016, respectively

 

43,446,854

 

 

 

42,891,368

 

TOTAL PARTNERS’ CAPITAL

 

81,908,516

 

 

 

81,339,288

 

TOTAL LIABILITIES AND PARTNERS’ CAPITAL

$

405,851,972

 

 

$

406,019,564

 

 

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, 2017

 

 

March 31, 2016

 

 

 

 

(Unaudited)

 

 

(Unaudited)

 

REVENUE

 

 

 

 

 

 

 

 

 

Rooms department

 

 

$

27,366,634

 

 

$

27,322,413

 

Food and beverage department

 

 

 

8,323,759

 

 

 

8,249,679

 

Other operating departments

 

 

 

3,004,493

 

 

 

2,238,052

 

Total revenue

 

 

 

38,694,886

 

 

 

37,810,144

 

EXPENSES

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

Rooms department

 

 

 

6,682,279

 

 

 

7,080,633

 

Food and beverage department

 

 

 

5,728,473

 

 

 

5,939,861

 

Other operating departments

 

 

 

600,020

 

 

 

593,969

 

Indirect

 

 

 

14,205,231

 

 

 

14,135,595

 

Total hotel operating expenses

 

 

 

27,216,003

 

 

 

27,750,058

 

Depreciation and amortization

 

 

 

4,061,097

 

 

 

3,668,638

 

Corporate general and administrative

 

 

 

1,712,082

 

 

 

1,607,294

 

Total operating expenses

 

 

 

32,989,182

 

 

 

33,025,990

 

NET OPERATING INCOME

 

 

 

5,705,704

 

 

 

4,784,154

 

Other income (expense)

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

(3,813,717

)

 

 

(4,632,632

)

Interest income

 

 

 

59,631

 

 

 

8,830

 

Unrealized loss on hedging activities

 

 

 

(15,945

)

 

 

(50,557

)

Gain on sale of assets

 

 

 

100,407

 

 

 

 

Gain on involuntary conversion of assets

 

 

 

1,041,815

 

 

 

 

Net income before income taxes

 

 

 

3,077,895

 

 

 

109,795

 

Income tax (provision) benefit

 

 

 

(171,937

)

 

 

436,079

 

Net income

 

 

 

2,905,958

 

 

 

545,874

 

Distributions to preferred unit holders

 

 

 

(805,000

)

 

 

 

Net income available to operating partnership unit holders

 

 

$

2,100,958

 

 

$

545,874

 

Net income attributable per operating partner unit

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

$

0.13

 

 

$

0.03

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of operating partner units outstanding

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

 

16,252,691

 

 

 

16,715,044

 

 

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

 

 

Amount

 

Units

 

 

Amount

 

 

Units

 

 

Amounts

 

 

Total

 

Balances at December 31, 2016

 

1,610,000

 

 

$

37,766,531

 

 

162,467

 

 

$

681,389

 

 

 

16,084,224

 

 

$

42,891,368

 

 

$

81,339,288

 

Issuance of common

   partnership units

 

 

 

 

 

 

120

 

 

 

892

 

 

 

11,880

 

 

 

88,268

 

 

 

89,160

 

Amortization of restricted

   units award

 

 

 

 

 

 

 

 

 

50

 

 

 

 

 

 

4,930

 

 

 

4,980

 

Preferred units distributions

   declared

 

 

 

 

(805,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(805,000

)

Partnership units

   distributions declared

 

 

 

 

 

 

 

 

 

(16,260

)

 

 

 

 

 

(1,609,610

)

 

 

(1,625,870

)

Net income

 

 

 

 

805,000

 

 

 

 

 

29,060

 

 

 

 

 

 

2,071,898

 

 

 

2,905,958

 

Balances at March 31, 2017 (Unaudited)

 

1,610,000

 

 

$

37,766,531

 

 

162,587

 

 

$

695,131

 

 

 

16,096,104

 

 

$

43,446,854

 

 

$

81,908,516

 

 

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

 

 

10


SOTHERLY HOTELS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2017

 

 

March 31, 2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

2,905,958

 

 

$

545,874

 

Adjustments to reconcile net income to net cash provided by operating

   activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

4,061,097

 

 

 

3,668,638

 

Amortization of deferred financing costs

 

 

214,357

 

 

 

313,410

 

Amortization of mortgage premium

 

 

(6,170

)

 

 

(6,479

)

Proceeds from involuntary conversion of assets

 

 

(1,041,815

)

 

 

 

Unrealized loss on derivative instrument

 

 

15,945

 

 

 

50,557

 

Gain on sale of assets

 

 

(100,407

)

 

 

 

Charges related to equity-based compensation

 

 

94,140

 

 

 

196,742

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Restricted cash

 

 

(403,086

)

 

 

(120,693

)

Accounts receivable

 

 

(1,209,174

)

 

 

222,714

 

Prepaid expenses, inventory and other assets

 

 

(1,066,260

)

 

 

(342,455

)

Deferred income taxes

 

 

118,050

 

 

 

(487,469

)

Accounts payable and other accrued liabilities