10-Q 1 soho-10q_20170630.htm 10-Q soho-10q_20170630.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, 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 August 4, 2017, there were 13,815,035 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, 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 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, 2017 (unaudited) and December 31, 2016

 

4

 

 

Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2017 and 2016

 

5

 

 

Consolidated Statement of Changes in Equity (unaudited) for the Six Months Ended June 30, 2017

 

6

 

 

Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2017 and 2016

 

7

 

 

Sotherly Hotels LP

 

8

 

 

Consolidated Balance Sheets as of June 30, 2017 (unaudited) and December 31, 2016

 

8

 

 

Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2017 and 2016

 

9

 

 

Consolidated Statement of Changes in Partners’ Capital (unaudited) for the Six Months Ended June 30, 2017

 

10

 

 

Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2017 and 2016

 

11

 

 

Notes to Consolidated Financial Statements

 

12

Item 2.

 

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

 

29

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

43

Item 4

 

Controls and Procedures

 

44

 

 

 

 

 

PART II

Item 1.

 

Legal Proceedings

 

46

Item 1A.

 

Risk Factors

 

46

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

46

Item 3.

 

Defaults Upon Senior Securities

 

46

Item 4.

 

Mine Safety Disclosures

 

46

Item 5.

 

Other Information

 

46

Item 6.

 

Exhibits

 

47

 

3


PART I

 

 

Item 1.

Consolidated Financial Statements

SOTHERLY HOTELS INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30, 2017

 

 

December 31, 2016

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

357,466,632

 

 

$

348,593,912

 

Investment in hotel properties held for sale, net

 

 

-

 

 

 

5,333,000

 

Cash and cash equivalents

 

 

34,438,950

 

 

 

31,766,775

 

Restricted cash

 

 

4,617,495

 

 

 

4,596,145

 

Accounts receivable, net

 

 

3,287,118

 

 

 

4,127,748

 

Accounts receivable - affiliate

 

 

563,905

 

 

 

4,175

 

Prepaid expenses, inventory and other assets

 

 

5,927,753

 

 

 

4,648,469

 

Deferred income taxes

 

 

6,691,344

 

 

 

6,949,340

 

TOTAL ASSETS

 

$

412,993,197

 

 

$

406,019,564

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans, net

 

$

294,437,781

 

 

$

282,708,289

 

Unsecured notes, net

 

 

24,476,728

 

 

 

24,308,713

 

Accounts payable and accrued liabilities

 

 

13,468,659

 

 

 

12,970,960

 

Advance deposits

 

 

2,270,227

 

 

 

2,315,787

 

Dividends and distributions payable

 

 

2,442,283

 

 

 

2,376,527

 

TOTAL LIABILITIES

 

$

337,095,678

 

 

$

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 June 30, 2017 and December 31, 2016

 

 

16,100

 

 

 

16,100

 

Common stock, par value $0.01, 49,000,000 shares authorized, 13,815,035

   shares and 14,468,551 shares issued and outstanding at June 30, 2017

   and December 31, 2016, respectively

 

 

138,150

 

 

 

144,685

 

Additional paid-in capital

 

 

118,497,398

 

 

 

118,395,082

 

Unearned ESOP shares

 

 

(4,753,453

)

 

 

 

Distributions in excess of retained earnings

 

 

(40,229,144

)

 

 

(39,545,754

)

Total Sotherly Hotels Inc. stockholders’ equity

 

 

73,669,051

 

 

 

79,010,113

 

Noncontrolling interest

 

 

2,228,468

 

 

 

2,329,175

 

TOTAL EQUITY

 

 

75,897,519

 

 

 

81,339,288

 

TOTAL LIABILITIES AND EQUITY

 

$

412,993,197

 

 

$

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

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2017

 

 

June 30, 2016

 

 

June 30, 2017

 

 

June 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

$

28,906,872

 

 

$

29,909,287

 

 

$

56,273,506

 

 

$

57,231,700

 

Food and beverage department

 

 

8,583,358

 

 

 

9,578,410

 

 

 

16,907,117

 

 

 

17,828,089

 

Other operating departments

 

 

3,152,402

 

 

 

2,337,257

 

 

 

6,156,895

 

 

 

4,575,309

 

Total revenue

 

 

40,642,632

 

 

 

41,824,954

 

 

 

79,337,518

 

 

 

79,635,098

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

6,743,788

 

 

 

7,354,387

 

 

 

13,426,067

 

 

 

14,204,240

 

Food and beverage department

 

 

6,151,495

 

 

 

6,490,681

 

 

 

11,879,968

 

 

 

12,430,542

 

Other operating departments

 

 

623,530

 

 

 

644,430

 

 

 

1,223,550

 

 

 

1,238,399

 

Indirect

 

 

15,605,262

 

 

 

14,857,886

 

 

 

29,810,493

 

 

 

29,224,260

 

Total hotel operating expenses

 

 

29,124,075

 

 

 

29,347,384

 

 

 

56,340,078

 

 

 

57,097,441

 

Depreciation and amortization

 

 

4,219,712

 

 

 

3,801,478

 

 

 

8,280,809

 

 

 

7,470,115

 

Corporate general and administrative

 

 

1,834,930

 

 

 

1,356,754

 

 

 

3,547,012

 

 

 

2,964,048

 

Total operating expenses

 

 

35,178,717

 

 

 

34,505,616

 

 

 

68,167,899

 

 

 

67,531,604

 

NET OPERATING INCOME

 

 

5,463,915

 

 

 

7,319,338

 

 

 

11,169,619

 

 

 

12,103,494

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(3,874,076

)

 

 

(4,613,165

)

 

 

(7,687,793

)

 

 

(9,245,797

)

Interest income

 

 

13,294

 

 

 

10,207

 

 

 

72,925

 

 

 

19,038

 

Loss on early debt extinguishment

 

 

(228,087

)

 

 

(70,293

)

 

 

(228,087

)

 

 

(70,293

)

Unrealized loss on hedging activities

 

 

(11,261

)

 

 

(15,517

)

 

 

(27,206

)

 

 

(66,074

)

Gain (loss) on disposal of assets

 

 

(51,507

)

 

 

(140,193

)

 

 

48,900

 

 

 

(140,193

)

Gain on involuntary conversion of assets

 

 

 

 

 

 

 

 

1,041,815

 

 

 

 

Net income before income taxes

 

 

1,312,278

 

 

 

2,490,377

 

 

 

4,390,173

 

 

 

2,600,175

 

Income tax provision

 

 

(196,483

)

 

 

(512,827

)

 

 

(368,420

)

 

 

(76,747

)

Net income

 

 

1,115,795

 

 

 

1,977,550

 

 

 

4,021,753

 

 

 

2,523,428

 

Less: Net income attributable to noncontrolling interest

 

 

(33,869

)

 

 

(216,444

)

 

 

(263,811

)

 

 

(279,223

)

Net income attributable to the Company

 

 

1,081,926

 

 

 

1,761,106

 

 

 

3,757,942

 

 

 

2,244,205

 

Distributions to preferred stockholders

 

 

(805,000

)

 

 

 

 

 

(1,610,000

)

 

 

 

Net income available to common stockholders

 

$

276,926

 

 

$

1,761,106

 

 

$

2,147,942

 

 

$

2,244,205

 

Net income per share available to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.02

 

 

$

0.12

 

 

$

0.15

 

 

$

0.15

 

Diluted

 

$

0.02

 

 

$

0.12

 

 

$

0.15

 

 

$

0.15

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

13,813,168

 

 

 

14,949,651

 

 

 

13,898,910

 

 

 

14,871,281

 

Diluted

 

 

13,815,035

 

 

 

14,949,651

 

 

 

13,908,359

 

 

 

14,871,281

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,757,942

 

 

 

263,811

 

 

 

4,021,753

 

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

)

Allocated and committed to be released  ESOP shares

 

 

 

 

 

 

 

16,984

 

 

 

170

 

 

 

(3,509

)

 

 

121,305

 

 

 

 

 

 

 

 

 

117,966

 

Amortization of restricted

   stock award

 

 

 

 

 

 

 

 

 

 

 

 

 

9,960

 

 

 

 

 

 

 

 

 

 

 

 

9,960

 

Preferred stock dividends

   declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,610,000

)

 

 

 

 

 

(1,610,000

)

Common stockholders'

   dividends and

   distributions declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,831,332

)

 

 

(364,518

)

 

 

(3,195,850

)

Balances at June 30, 2017 (Unaudited)

 

1,610,000

 

 

$

16,100

 

 

 

13,815,035

 

 

$

138,150

 

 

$

118,497,398

 

 

$

(4,753,453

)

 

$

(40,229,144

)

 

$

2,228,468

 

 

$

75,897,519

 

 

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, 2017

 

 

June 30, 2016

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

4,021,753

 

 

$

2,523,428

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

8,280,809

 

 

 

7,470,115

 

Amortization of deferred financing costs

 

 

414,366

 

 

 

626,807

 

Amortization of mortgage premium

 

 

(12,341

)

 

 

(12,958

)

Gain on involuntary conversion of assets

 

 

(1,041,815

)

 

 

 

Unrealized loss on derivative instrument

 

 

27,206

 

 

 

66,074

 

(Gain) loss on disposal of assets

 

 

(48,900

)

 

 

140,193

 

Loss on early extinguishment of debt

 

 

228,087

 

 

 

70,293

 

Share - based compensation

 

 

217,086

 

 

 

201,722

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Restricted cash

 

 

(1,260,345

)

 

 

37,066

 

Accounts receivable

 

 

840,630

 

 

 

6,853

 

Prepaid expenses, inventory and other assets

 

 

(1,377,186

)

 

 

(712,835

)

Deferred income taxes

 

 

257,996

 

 

 

(7,615

)

Accounts payable and other accrued liabilities

 

 

1,438,743

 

 

 

2,522,235

 

Advance deposits

 

 

(555,560

)

 

 

546,052

 

Accounts receivable - affiliate

 

 

(559,730

)

 

 

15,934

 

Net cash provided by operating activities

 

 

10,870,799

 

 

 

13,493,364

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisitions of hotel properties

 

 

(3,986,849

)

 

 

 

Improvements and additions to hotel properties

 

 

(12,480,207

)

 

 

(8,827,313

)

Funding of restricted cash reserves

 

 

(2,366,331

)

 

 

(4,272,057

)

Proceeds of restricted cash reserves

 

 

3,605,325

 

 

 

5,544,815

 

Proceeds from the sale of hotel property

 

 

5,434,856

 

 

 

 

Proceeds from insurance conversion

 

 

1,041,815

 

 

 

 

Proceeds from the sale of assets

 

 

3,355

 

 

 

 

Net cash used in investing activities

 

 

(8,748,036

)

 

 

(7,554,555

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds of mortgage debt

 

 

35,500,000

 

 

 

28,453,664

 

Proceeds from mortgage loan receivable

 

 

 

 

 

2,600,711

 

Repurchase of common stock

 

 

(1,103,130

)

 

 

 

Payments on mortgage loans

 

 

(23,647,602

)

 

 

(19,100,406

)

Payments of deferred financing costs

 

 

(585,004

)

 

 

(544,015

)

Funding of ESOP stock purchase

 

 

(4,874,758

)

 

 

 

Dividends and distributions paid

 

 

(4,740,094

)

 

 

(2,757,189

)

Net cash provided by financing activities

 

 

549,412

 

 

 

8,652,765

 

Net increase in cash and cash equivalents

 

 

2,672,175

 

 

 

14,591,574

 

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

 

$

34,438,950

 

 

$

26,085,488

 

Supplemental disclosures:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

7,311,583

 

 

$

8,071,068

 

Cash paid during the period for income taxes

 

$

271,961

 

 

$

59,490

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Change in amount of hotel property improvements in accounts payable and

   accrued liabilities

 

$

(247,806

)

 

$

251,422

 

 

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

 

 

7


SOTHERLY HOTELS LP

CONSOLIDATED BALANCE SHEETS

 

 

June 30, 2017

 

 

December 31, 2016

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Investment in hotel properties, net

$

357,466,632

 

 

$

348,593,912

 

Investment in hotel property held for sale, net

 

 

 

 

5,333,000

 

Cash and cash equivalents

 

34,438,950

 

 

 

31,766,775

 

Restricted cash

 

4,617,495

 

 

 

4,596,145

 

Accounts receivable, net

 

3,287,118

 

 

 

4,127,748

 

Accounts receivable - affiliate

 

563,905

 

 

 

4,175

 

Loan receivable - affiliate

 

4,744,079

 

 

 

 

Prepaid expenses, inventory and other assets

 

5,927,753

 

 

 

4,648,469

 

Deferred income taxes

 

6,691,344

 

 

 

6,949,340

 

TOTAL ASSETS

$

417,737,276

 

 

$

406,019,564

 

LIABILITIES

 

 

 

 

 

 

 

Mortgage loans, net

$

294,437,781

 

 

$

282,708,289

 

Unsecured notes, net

 

24,476,728

 

 

 

24,308,713

 

Accounts payable and other accrued liabilities

 

13,468,659

 

 

 

12,970,960

 

Advance deposits

 

2,270,227

 

 

 

2,315,787

 

Dividends and distributions payable

 

2,512,162

 

 

 

2,376,527

 

TOTAL LIABILITIES

$

337,165,557

 

 

$

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 June 30, 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

   June 30, 2017 and December 31, 2016, respectively

 

689,267

 

 

 

681,389

 

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

   of June 30, 2017 and December 31, 2016, respectively

 

42,115,921

 

 

 

42,891,368

 

TOTAL PARTNERS’ CAPITAL

 

80,571,719

 

 

 

81,339,288

 

TOTAL LIABILITIES AND PARTNERS’ CAPITAL

$

417,737,276

 

 

$

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

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

 

June 30, 2017

 

 

June 30, 2016

 

 

June 30, 2017

 

 

June 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

$

28,906,872

 

 

$

29,909,287

 

 

$

56,273,506

 

 

$

57,231,700

 

Food and beverage department

 

 

 

8,583,358

 

 

 

9,578,410

 

 

 

16,907,117

 

 

 

17,828,089

 

Other operating departments

 

 

 

3,152,402

 

 

 

2,337,257

 

 

 

6,156,895

 

 

 

4,575,309

 

Total revenue

 

 

 

40,642,632

 

 

 

41,824,954

 

 

 

79,337,518

 

 

 

79,635,098

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

 

6,743,788

 

 

 

7,354,387

 

 

 

13,426,067

 

 

 

14,204,240

 

Food and beverage department

 

 

 

6,151,495

 

 

 

6,490,681

 

 

 

11,879,968

 

 

 

12,430,542

 

Other operating departments

 

 

 

623,530

 

 

 

644,430

 

 

 

1,223,550

 

 

 

1,238,399

 

Indirect

 

 

 

15,605,262

 

 

 

14,857,886

 

 

 

29,810,493

 

 

 

29,224,260

 

Total hotel operating expenses

 

 

 

29,124,075

 

 

 

29,347,384

 

 

 

56,340,078

 

 

 

57,097,441

 

Depreciation and amortization

 

 

 

4,219,712

 

 

 

3,801,478

 

 

 

8,280,809

 

 

 

7,470,115

 

Corporate general and administrative

 

 

 

1,834,930

 

 

 

1,356,754

 

 

 

3,547,012

 

 

 

2,964,048

 

Total operating expenses

 

 

 

35,178,717

 

 

 

34,505,616

 

 

 

68,167,899

 

 

 

67,531,604

 

NET OPERATING INCOME

 

 

 

5,463,915

 

 

 

7,319,338

 

 

 

11,169,619

 

 

 

12,103,494

 

Other income (expense)