10-Q 1 soho-10q_20180930.htm 10-Q soho-10q_20180930.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 September 30, 2018

 

SOTHERLY HOTELS INC.

(Exact name of registrant as specified in its charter)

 

 

MARYLAND

001-32379

20-1531029

(State or Other Jurisdiction of

Incorporation or Organization)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

 

SOTHERLY HOTELS LP

(Exact name of registrant as specified in its charter)

 

 

DELAWARE

001-36091

20-1965427

(State or Other Jurisdiction of

Incorporation or Organization)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

 

410 West Francis Street

Williamsburg, Virginia 23185

(757) 229-5648

(Address and Telephone Number of Principal Executive Offices)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Sotherly Hotels Inc.    Yes      No       Sotherly Hotels LP    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 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 November 5, 2018, there were 14,209,378 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 September 30, 2018 of the Company and the Operating Partnership. We believe combining the quarterly reports into this single report results in the following benefits:

 

combined reports better reflect how management and investors view the business as a single operating unit;

 

combined reports enhance investors' understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management;

 

combined reports are more efficient for the Company and the Operating Partnership and result in savings in time, effort and expense; and

 

combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review.

To help investors understand the significant differences between the Company and the Operating Partnership, this report presents the following separate sections for each of the Company and the Operating Partnership:

 

Consolidated Financial Statements;

 

the following Notes to Consolidated Financial Statements:

 

Note 7 – Preferred Stock and Units;

 

Note 8 – Common Stock and Units; 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 September 30, 2018 (unaudited) and December 31, 2017

 

4

 

 

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

 

5

 

 

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

 

6

 

 

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

 

7

 

 

Sotherly Hotels LP

 

9

 

 

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

 

9

 

 

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

 

10

 

 

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

 

11

 

 

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

 

12

 

 

Notes to Consolidated Financial Statements

 

14

Item 2.

 

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

 

34

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

48

Item 4

 

Controls and Procedures

 

49

 

 

 

 

 

PART II

Item 1.

 

Legal Proceedings

 

50

Item 1A.

 

Risk Factors

 

50

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

50

Item 3.

 

Defaults Upon Senior Securities

 

50

Item 4.

 

Mine Safety Disclosures

 

50

Item 5.

 

Other Information

 

50

Item 6.

 

Exhibits

 

51

 

3


PART I

 

 

Item 1.

Consolidated Financial Statements

SOTHERLY HOTELS INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

September 30, 2018

 

 

December 31, 2017

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

437,525,800

 

 

$

357,799,512

 

Cash and cash equivalents

 

 

37,015,264

 

 

 

29,777,845

 

Restricted cash

 

 

5,025,467

 

 

 

3,651,197

 

Accounts receivable, net

 

 

7,822,946

 

 

 

5,587,077

 

Accounts receivable - affiliate

 

 

402,985

 

 

 

394,026

 

Prepaid expenses, inventory and other assets

 

 

6,889,076

 

 

 

7,292,565

 

Favorable lease assets, net

 

 

2,560,245

 

 

 

 

Deferred income taxes

 

 

4,700,379

 

 

 

5,451,118

 

TOTAL ASSETS

 

$

501,942,162

 

 

$

409,953,340

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans, net

 

$

366,576,645

 

 

$

297,318,816

 

Unsecured notes, net

 

 

23,765,024

 

 

 

 

Accounts payable and accrued liabilities

 

 

17,324,207

 

 

 

13,813,623

 

Advance deposits

 

 

2,361,234

 

 

 

1,572,388

 

Dividends and distributions payable

 

 

3,412,239

 

 

 

3,073,483

 

TOTAL LIABILITIES

 

$

413,439,349

 

 

$

315,778,310

 

Commitments and contingencies  (See Note 6)

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

 

Sotherly Hotels Inc. stockholders’ equity

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value, 11,000,000 shares authorized;

 

 

 

 

 

 

 

 

8.0% Series B cumulative redeemable perpetual preferred stock,

   liquidation preference $25 per share, 1,610,000 shares issued

   and outstanding at September 30, 2018 and December 31, 2017, respectively

 

 

16,100

 

 

 

16,100

 

7.875% Series C cumulative redeemable perpetual preferred stock,

   liquidation preference $25 per share, 1,350,541 and 1,300,000 shares issued

   and outstanding at September 30, 2018 and December 31, 2017, respectively

 

 

13,505

 

 

 

13,000

 

Common stock, par value $0.01, 49,000,000 shares authorized, 14,209,378

   shares and 14,078,831 shares issued and outstanding at September 30, 2018

   and December 31, 2017, respectively

 

 

142,093

 

 

 

140,788

 

Additional paid-in capital

 

 

148,140,659

 

 

 

146,249,339

 

Unearned ESOP shares

 

 

(4,446,975

)

 

 

(4,633,112

)

Distributions in excess of retained earnings

 

 

(55,631,915

)

 

 

(48,765,860

)

Total Sotherly Hotels Inc. stockholders’ equity

 

 

88,233,467

 

 

 

93,020,255

 

Noncontrolling interest

 

 

269,346

 

 

 

1,154,775

 

TOTAL EQUITY

 

 

88,502,813

 

 

 

94,175,030

 

TOTAL LIABILITIES AND EQUITY

 

$

501,942,162

 

 

$

409,953,340

 

 

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

 

 

4


SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2018

 

 

September 30, 2017

 

 

September 30, 2018

 

 

September 30, 2017

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

$

28,626,265

 

 

$

25,093,226

 

 

$

92,242,385

 

 

$

81,366,731

 

Food and beverage department

 

 

8,417,293

 

 

 

7,997,818

 

 

 

27,849,844

 

 

 

24,904,934

 

Other operating departments

 

 

4,374,504

 

 

 

3,678,427

 

 

 

14,614,915

 

 

 

9,835,322

 

Total revenue

 

 

41,418,062

 

 

 

36,769,471

 

 

 

134,707,144

 

 

 

116,106,987

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

7,873,836

 

 

 

6,826,822

 

 

 

22,750,381

 

 

 

20,252,889

 

Food and beverage department

 

 

6,680,563

 

 

 

6,039,174

 

 

 

20,748,688

 

 

 

17,919,142

 

Other operating departments

 

 

1,661,128

 

 

 

705,111

 

 

 

4,870,037

 

 

 

1,928,662

 

Indirect

 

 

16,027,496

 

 

 

15,209,249

 

 

 

48,901,037

 

 

 

45,019,742

 

Total hotel operating expenses

 

 

32,243,023

 

 

 

28,780,356

 

 

 

97,270,143

 

 

 

85,120,435

 

Depreciation and amortization

 

 

4,547,043

 

 

 

4,427,738

 

 

 

15,783,174

 

 

 

12,708,548

 

(Gain) loss on disposal of assets

 

 

(7,555

)

 

 

 

 

 

(3,816

)

 

 

51,569

 

Corporate general and administrative

 

 

1,516,408

 

 

 

1,335,192

 

 

 

4,566,258

 

 

 

4,882,541

 

Total operating expenses

 

 

38,298,919

 

 

 

34,543,286

 

 

 

117,615,759

 

 

 

102,763,093

 

NET OPERATING INCOME

 

 

3,119,143

 

 

 

2,226,185

 

 

 

17,091,385

 

 

 

13,343,894

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(5,306,641

)

 

 

(4,139,267

)

 

 

(14,571,142

)

 

 

(11,827,061

)

Interest income

 

 

88,484

 

 

 

53,314

 

 

 

236,693

 

 

 

126,241

 

Loss on early extinguishment of debt

 

 

(753,133

)

 

 

 

 

 

(753,133

)

 

 

(228,087

)

Unrealized gain (loss) on hedging activities

 

 

123,443

 

 

 

(3,542

)

 

 

141,970

 

 

 

(30,748

)

Gain (loss) on sale of assets

 

 

 

 

 

(23,000

)

 

 

 

 

 

77,807

 

Gain on involuntary conversion of assets

 

 

 

 

 

 

 

 

898,565

 

 

 

1,041,815

 

Net (loss) income before income taxes

 

 

(2,728,704

)

 

 

(1,886,310

)

 

 

3,044,338

 

 

 

2,503,861

 

Income tax benefit (provision)

 

 

746,924

 

 

 

950,310

 

 

 

(882,045

)

 

 

581,890

 

Net (loss) income

 

 

(1,981,780

)

 

 

(936,000

)

 

 

2,162,293

 

 

 

3,085,751

 

Less: Net loss (income) attributable to noncontrolling interest

 

 

385,616

 

 

 

190,445

 

 

 

245,298

 

 

 

(73,366

)

Net (loss) income attributable to the Company

 

 

(1,596,164

)

 

 

(745,555

)

 

 

2,407,591

 

 

 

3,012,385

 

Distributions to preferred stockholders

 

 

(1,469,719

)

 

 

(805,000

)

 

 

(4,359,407

)

 

 

(2,415,000

)

Net (loss) income available to common stockholders

 

$

(3,065,883

)

 

$

(1,550,555

)

 

$

(1,951,816

)

 

$

597,385

 

Net (loss) income per share available to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.23

)

 

$

(0.11

)

 

$

(0.14

)

 

$

0.04

 

Diluted

 

$

(0.23

)

 

$

(0.11

)

 

$

(0.14

)

 

$

0.04

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

13,513,996

 

 

 

13,822,543

 

 

 

13,491,807

 

 

 

13,873,175

 

Diluted

 

 

13,513,996

 

 

 

13,822,543

 

 

 

13,491,807

 

 

 

13,885,290

 

 

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

 

 

5


SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Unearned

 

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Paid-

 

 

ESOP

 

 

in Excess of

 

 

Noncontrolling

 

 

 

 

 

 

 

Shares

 

 

Par Value

 

 

Shares

 

 

Par Value

 

 

In Capital

 

 

Shares

 

 

Retained Earnings

 

 

Interest

 

 

Total

 

Balances at December 31,

   2017

 

 

2,910,000

 

 

$

29,100

 

 

 

14,078,831

 

 

$

140,788

 

 

$

146,249,339

 

 

$

(4,633,112

)

 

$

(48,765,860

)

 

$

1,154,775

 

 

$

94,175,030

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,407,591

 

 

 

(245,298

)

 

 

2,162,293

 

Issuance of unrestricted

   common stock awards

 

 

 

 

 

 

 

 

2,250

 

 

 

23

 

 

 

13,455

 

 

 

 

 

 

 

 

 

 

 

 

13,478

 

Issuance of restricted

   common stock awards

 

 

 

 

 

 

 

 

40,000

 

 

 

400

 

 

 

89,450

 

 

 

 

 

 

 

 

 

 

 

 

89,850

 

Issuance of common stock

 

 

 

 

 

 

 

 

88,297

 

 

 

882

 

 

 

576,779

 

 

 

 

 

 

 

 

 

 

 

 

577,661

 

Issuance of preferred stock

 

 

50,541

 

 

 

505

 

 

 

 

 

 

 

 

 

1,187,561

 

 

 

 

 

 

 

 

 

 

 

 

1,188,066

 

Amortization of ESOP

   shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

186,137

 

 

 

 

 

 

 

 

 

186,137

 

Amortization of restricted

   stock award

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24,075

 

 

 

 

 

 

 

 

 

 

 

 

24,075

 

Preferred stock dividends

   declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,359,407

)

 

 

 

 

 

(4,359,407

)

Common stockholders'

   dividends and

   distributions declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,914,239

)

 

 

(640,131

)

 

 

(5,554,370

)

Balances at September 30,

   2018 (unaudited)

 

 

2,960,541

 

 

$

29,605

 

 

 

14,209,378

 

 

$

142,093

 

 

$

148,140,659

 

 

$

(4,446,975

)

 

$

(55,631,915

)

 

$

269,346

 

 

$

88,502,813

 

 

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

 

 

6


SOTHERLY HOTELS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2018

 

 

September 30, 2017

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

2,162,293

 

 

$

3,085,751

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

15,783,174

 

 

 

12,708,548

 

Amortization of deferred financing costs

 

 

598,142

 

 

 

616,390

 

Amortization of mortgage premium

 

 

(18,511

)

 

 

(18,511

)

Gain on involuntary conversion of assets

 

 

(898,565

)

 

 

(1,041,815

)

Unrealized (gain) loss on derivative instrument

 

 

(141,970

)

 

 

30,748

 

Gain on sale or disposal of assets

 

 

(3,816

)

 

 

(26,238

)

Loss on early extinguishment of debt

 

 

753,133

 

 

 

228,087

 

Share - based compensation

 

 

313,540

 

 

 

282,237

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(1,942,179

)

 

 

(1,453,147

)

Prepaid expenses, inventory and other assets

 

 

1,045,824

 

 

 

(1,699,380

)

Deferred income taxes

 

 

750,739

 

 

 

(779,771

)

Accounts payable and other accrued liabilities

 

 

3,006,385

 

 

 

3,962,544

 

Advance deposits

 

 

566,621

 

 

 

1,871

 

Accounts receivable - affiliate

 

 

(8,959

)

 

 

(489,720

)

Net cash provided by operating activities

 

 

21,965,851

 

 

 

15,407,594

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisitions of hotel properties

 

 

(79,732,716

)

 

 

(3,986,849

)

Improvements and additions to hotel properties

 

 

(18,497,781

)

 

 

(17,483,257

)

Proceeds from the sale of hotel property

 

 

 

 

 

5,434,856

 

Proceeds from involuntary conversion

 

 

898,565

 

 

 

1,041,815

 

Proceeds from the sale or disposal of assets

 

 

7,555

 

 

 

3,355

 

Net cash used in investing activities

 

 

(97,324,377

)

 

 

(14,990,080

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds of mortgage debt

 

 

145,795,332

 

 

 

40,500,000

 

Proceeds of unsecured debt

 

 

25,000,000

 

 

 

 

Proceeds from issuance of common stock, net

 

 

577,661

 

 

 

 

Proceeds from issuance of preferred stock, net

 

 

1,188,066

 

 

 

 

Repurchase of common stock

 

 

 

 

 

(1,103,130

)

Payments on mortgage loans

 

 

(75,346,629

)

 

 

(24,767,275

)

Payments of deferred financing costs

 

 

(3,669,192

)

 

 

(585,004

)

Funding of ESOP stock purchase

 

 

 

 

 

(4,874,758

)

Dividends and distributions paid

 

 

(5,318,695

)

 

 

(4,767,377

)

Preferred dividends paid

 

 

(4,256,328

)

 

 

(2,415,000

)

Net cash provided by financing activities

 

 

83,970,215

 

 

 

1,987,456

 

Net increase in cash, cash equivalents and restricted cash

 

 

8,611,689

 

 

 

2,404,970

 

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

 

 

33,429,042

 

 

 

36,362,920

 

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

 

$

42,040,731

 

 

$

38,767,890

 

Supplemental disclosures:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

12,859,556

 

 

$

11,227,980

 

Cash paid during the period for income taxes

 

$

278,720

 

 

$

155,077

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Excess of cost over fair value of interest rate SWAP

 

$

294,176

 

 

$

-

 

Change in amount of improvements to hotel property in accounts payable

   and accrued liabilities

 

$

251,195

 

 

$

77,843

 

 

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

7


 

 

8


SOTHERLY HOTELS LP

CONSOLIDATED BALANCE SHEETS

 

 

 

September 30, 2018

 

 

December 31, 2017

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in hotel properties, net

 

$

437,525,800

 

 

$

357,799,512

 

Cash and cash equivalents

 

 

37,015,264

 

 

 

29,777,845

 

Restricted cash

 

 

5,025,467

 

 

 

3,651,197

 

Accounts receivable, net

 

 

7,822,946

 

 

 

5,587,077

 

Accounts receivable - affiliate

 

 

402,985

 

 

 

394,026

 

Loan receivable - affiliate

 

 

4,502,953

 

 

 

4,650,969

 

Prepaid expenses, inventory and other assets

 

 

6,889,076

 

 

 

7,292,565

 

Favorable lease assets, net

 

 

2,560,245

 

 

 

 

Deferred income taxes

 

 

4,700,379

 

 

 

5,451,118

 

TOTAL ASSETS

 

$

506,445,115

 

 

$

414,604,309

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage loans, net

 

$

366,576,645

 

 

$

297,318,816

 

Unsecured notes, net

 

 

23,765,024

 

 

 

 

Accounts payable and other accrued liabilities

 

 

17,324,207

 

 

 

13,813,623

 

Advance deposits

 

 

2,361,234

 

 

 

1,572,388

 

Dividends and distributions payable

 

 

3,465,347

 

 

 

3,119,027

 

TOTAL LIABILITIES

 

$

413,492,457

 

 

$

315,823,854

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (see Note 6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PARTNERS’ CAPITAL

 

 

 

 

 

 

 

 

Preferred units, $0.01 par value, 11,000,000 units authorized;

 

 

 

 

 

 

 

 

8% Series B cumulative redeemable perpetual preferred units, liquidation

   preference $25 per unit, 1,610,000 units issued and outstanding at September

   30, 2018 and December 31, 2017, respectively

 

 

37,766,531

 

 

 

37,766,531

 

7.875% Series C cumulative redeemable perpetual preferred units, liquidation

   preference $25 per unit, 1,350,541 and 1,300,000  units issued and outstanding at September 30, 2018 and December 31, 2017, respectively

 

 

31,676,726

 

 

 

30,488,660

 

General Partner: 159,876 units and 158,570 units issued and outstanding as of

   September 30, 2018 and December 31, 2017, respectively

 

 

514,243

 

 

 

586,725

 

Limited Partners: 15,827,642 units and 15,698,401 units issued and outstanding as

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

 

 

22,995,158

 

 

 

29,938,539

 

TOTAL PARTNERS’ CAPITAL

 

 

92,952,658

 

 

 

98,780,455

 

TOTAL LIABILITIES AND PARTNERS’ CAPITAL

 

$

506,445,115

 

 

$

414,604,309

 

 

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

 

 

9


SOTHERLY HOTELS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2018

 

 

September 30, 2017

 

 

September 30, 2018

 

 

September 30, 2017

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

$

28,626,265

 

 

$

25,093,226

 

 

$

92,242,385

 

 

$

81,366,731

 

Food and beverage department

 

 

8,417,293

 

 

 

7,997,818

 

 

 

27,849,844

 

 

 

24,904,934

 

Other operating departments

 

 

4,374,504

 

 

 

3,678,427

 

 

 

14,614,915

 

 

 

9,835,322

 

Total revenue

 

 

41,418,062

 

 

 

36,769,471

 

 

 

134,707,144

 

 

 

116,106,987

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms department

 

 

7,873,836

 

 

 

6,826,822

 

 

 

22,750,381

 

 

 

20,252,889

 

Food and beverage department

 

 

6,680,563

 

 

 

6,039,174

 

 

 

20,748,688

 

 

 

17,919,142

 

Other operating departments

 

 

1,661,128

 

 

 

705,111

 

 

 

4,870,037

 

 

 

1,928,662

 

Indirect

 

 

16,027,496