Sotherly Hotels Inc.
(NASDAQ:SOHO), (“Sotherly” or the “Company”), a self-managed and
self-administered lodging real estate investment trust (a “REIT”),
today reported its consolidated results for the third quarter ended
September 30, 2016. The Company’s results include the
following*:
|
Three Months
Ended |
|
|
Nine Months
Ended |
|
|
September 30, 2016 |
|
|
September 30, 2015 |
|
|
September 30, 2016 |
|
|
September 30, 2015 |
|
|
($ in thousands
except per share data) |
|
|
($ in thousands
except per share data) |
|
Total Revenue |
$ |
37,275 |
|
|
$ |
33,942 |
|
|
$ |
116,910 |
|
|
$ |
101,783 |
|
Net income/(loss)
attributable to the common shareholders |
|
(1,716 |
) |
|
|
3,872 |
|
|
|
528 |
|
|
|
5,879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
7,715 |
|
|
|
12,102 |
|
|
|
27,223 |
|
|
|
30,099 |
|
Adjusted EBITDA |
|
7,715 |
|
|
|
12,725 |
|
|
|
27,223 |
|
|
|
30,722 |
|
Hotel EBITDA |
|
9,083 |
|
|
|
7,963 |
|
|
|
31,621 |
|
|
|
27,675 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO |
|
2,091 |
|
|
|
1,694 |
|
|
|
12,225 |
|
|
|
10,561 |
|
Adjusted FFO attributable to common
shareholders |
|
2,730 |
|
|
|
1,674 |
|
|
|
13,023 |
|
|
|
11,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per share attributable to the
common shareholders |
$ |
(0.11 |
) |
|
$ |
0.27 |
|
|
$ |
0.04 |
|
|
$ |
0.49 |
|
FFO per share and unit |
$ |
0.13 |
|
|
$ |
0.10 |
|
|
$ |
0.73 |
|
|
$ |
0.74 |
|
Adjusted FFO attributable to common holders per
share and unit |
$ |
0.16 |
|
|
$ |
0.10 |
|
|
$ |
0.78 |
|
|
$ |
0.81 |
|
(*) Earnings before interest, taxes, depreciation and
amortization (“EBITDA”), adjusted EBITDA, hotel EBITDA, funds from
operations (“FFO”), adjusted FFO, FFO per share and unit and
adjusted FFO per share and unit are non-GAAP financial measures.
See further discussion of these non-GAAP measures, including
definitions related thereto, and reconciliations to net income
(loss) later in this press release. All references in this release
to the “Company”, “Sotherly”, “we”, “us” and “our” refer to
Sotherly Hotels Inc., its operating partnership and its
subsidiaries and predecessors, unless the context otherwise
requires or where otherwise indicated.
HIGHLIGHTS:
- RevPAR. Room revenue per available room
(“RevPAR”) for the Company’s wholly-owned properties during the
third quarter 2016 increased 6.6% over the third quarter 2015 to
$96.26 driven by a 1.5% increase in occupancy and a 5.0% increase
in average daily rate (“ADR”). For the nine month period
ending September 30, 2016, RevPAR increased 7.0% over the nine
months ended September 30, 2015, to $101.69 driven by a 0.9%
increase in occupancy and a 6.0% increase in ADR.
- Common Dividends. As previously reported on
October 25, 2016, the Company announced its quarterly dividend
(distribution) on its common stock (and units) at $0.095 per share
(and unit) to be paid on January 11, 2017 to stockholders (and
unitholders) of record as of December 15, 2016.
- Hotel EBITDA. The Company generated hotel
EBITDA of approximately $9.1 million during the third quarter 2016,
an increase of 14.1%, or approximately $1.1 million, over the third
quarter 2015. For the nine month period ending September 30,
2016, hotel EBITDA increased 14.3%, or approximately $3.9 million,
over the nine months ended September 30, 2015.
- Adjusted EBITDA. The Company generated
adjusted EBITDA of approximately $7.7 million during the third
quarter 2016, a decrease of 39.4%, or approximately $5.0 million,
over the third quarter 2015. Excluding the results from a
one-time gain on change in control of approximately $6.6 million
during the third quarter ended September 30, 2015, adjusted EBITDA
for the third quarter 2016 increased 25.2%, or approximately $1.6
million, over the third quarter 2015. For the nine month
period ending September 30, 2016, adjusted EBITDA decreased 11.4%
or approximately $3.5 million over the nine months ended September
30, 2015. Excluding the results from a one-time gain on
change in control of approximately $6.6 million during the nine
months ended September 30, 2015, adjusted EBITDA for the nine month
period ended September 30, 2016 increased 12.7%, or approximately
$3.1 million, over the nine months ended September 30,
2015.
- Adjusted FFO. The Company generated adjusted
FFO of approximately $2.7 million during the third quarter 2016, an
increase of 63.1% or approximately $1.1 million over the third
quarter 2015. For the nine month period ending September 30,
2016, adjusted FFO increased 11.8% or approximately $1.4 million
over the nine months ended September 30, 2015.
Andrew M. Sims, Chairman and Chief Executive Officer of Sotherly
Hotels Inc., commented, “We posted solid quarterly results for the
third quarter despite general headwinds in our region and negative
market conditions in Houston and Miami. Year-to-date, we are
pleased with the results given our relative peer group performance;
however, Hurricane Matthew affected six of our hotels in early
October, resulting in diminished results in a month that has
historically been one of our strongest. Our outlook for the
fourth quarter has been adjusted accordingly, which will require us
to lower guidance for the year.”
Balance Sheet/Liquidity
At September 30, 2016, the Company had approximately $32.3
million of available cash and cash equivalents, of which
approximately $5.9 million was reserved for real estate taxes,
insurance, capital improvements and certain other expenses or
otherwise restricted. The Company had approximately $295.1 million
in outstanding debt at a weighted average interest rate of
approximately 4.83%.
On August 23, 2016, the Company sold 1,610,000 shares
of 8% Series B Cumulative Redeemable Perpetual Preferred
stock, for net proceeds after all expenses of approximately $37.8
million, which it contributed to the Operating
Partnership for an equivalent number of preferred units.
On September 30, 2016, Sotherly Hotels LP redeemed the entire
$27.6 million aggregate principal amount of its outstanding 8%
Senior Unsecured Notes.
Portfolio Update
At the Company’s hotel in Atlanta, Georgia, an
estimated $7.0 million guestroom renovation is complete. On
September 24, 2015, the hotel became The Georgian Terrace by
Sotherly, the first signature property of our premier boutique
collection.
At the Company’s hotel in Savannah,
Georgia, renovations of the guestrooms and public spaces
totaling an estimated $8.2 million are underway. As
of September 30, 2016, the Company had incurred costs totaling
approximately $3.9 million toward this renovation.
Renovations are expected to be complete in August 2017.
On September 14, 2016, we entered into a Commercial Unit
Purchase Agreement and a related addendum to purchase the
commercial unit of the Hyde Resort & Residences, a condominium
hotel under development in the Hollywood, Florida market, for a
price of $4.25 million from 4111 South Ocean Drive, LLC. The
purchase agreement and addendum also includes the Company’s
purchase of certain inventories consistent with the management and
operation of the hotel and the related condominium association for
an additional price of approximately $0.47 million. In connection
with the closing, the Company intends to enter into a lease
agreement for the 400-space parking garage and meeting rooms
associated with the hotel, a management agreement relating to the
operation and management of the hotel condominium association, and
a pre-opening services agreement whereby the Seller will pay the
Company a fee of $0.75 million for certain pre-opening
preparations. The closing of the transaction is subject
to various closing conditions.
Photos accompanying this announcement are available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/6c3ad530-fc0d-40f8-99a0-3a2b5e47b559
http://www.globenewswire.com/NewsRoom/AttachmentNg/5d7f2f71-0682-4695-943e-52d76d1a963d
http://www.globenewswire.com/NewsRoom/AttachmentNg/b12a1524-d473-45c5-8173-bb84ee185208
Subsequent Events
On October 6, 2016, we entered into an agreement to sell the
Crowne Plaza Hampton Marina to Marina Hotel, LLC for a price of
$5.65 million. The Company may use the proceeds from the sale
of the hotel to repay the existing first mortgage on the hotel and
for general corporate purposes. The closing of the sale,
which may occur in December 2016, is subject to various customary
closing conditions.
On October 12, 2016, the Company entered into a loan agreement
to secure a $20.5 million mortgage on The Whitehall with
International Bank of Commerce. Pursuant to the loan
documents, the loan: provides initial proceeds of $15.0 million,
with an additional $5.5 million available upon the satisfaction of
certain conditions, has a term of five years, bears a floating
interest rate of the 30-day LIBOR plus 3.5%, subject to a floor
rate of 4.0%, amortizes on an 18-year schedule after a 2-year
interest only period, is subject to prepayment fees, and is
guaranteed by Sotherly Hotels LP.
On November 3, 2016, the Company entered into a loan agreement
to refinance the mortgage on the Sheraton Louisville Riverside with
Symetra Life Insurance Company. Pursuant to the loan
documents, the loan: provides proceeds of $12.0 million, has a
maturity date of December 1, 2026, bears a fixed interest rate of
4.27% for the first 5 years of the loan with an option for the
lender to reset that rate after 5 years, amortizes on a 25-year
schedule, is subject to prepayment fees, and is guaranteed by
Sotherly Hotels LP at 50% of the unpaid principal balance,
interest, and other amounts owed.
On November 3, 2016, the Company entered into a loan agreement
to modify and extend the $2.6 million mortgage on the Crowne Plaza
Hampton Marina with TowneBank. Pursuant to the amended loan
documents, the loan: continues to bear a fixed interest rate of
5.00%, has a maturity date of November 1, 2019, and beginning on
December 1, 2016 requires monthly principal payments of $15,367
plus accrued unpaid interest.
2016 Outlook
The Company is updating its previously issued guidance for 2016,
accounting for current and expected performance within its
portfolio, taking into account (i) the impacts of hurricane
Matthew, which affected our properties in Hampton, Virginia;
Wilmington, North Carolina; Savannah, Georgia; and Jacksonville,
Florida, and (ii) continued market weakness in Houston, Texas where
the Company’s hotel was repositioned. The guidance is
predicated on estimates of occupancy and ADR that are consistent
with the most recent 2016 calendar year forecasts by Smith Travel
Research for the market segments in which the Company operates.
The table below reflects the Company’s projections, within a
range, of various financial measures for 2016, in thousands of
dollars, except per share and RevPAR data:
|
Prior 2016 Guidance |
|
|
Revised 2016 Guidance |
|
|
|
Low Range |
|
|
High Range |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
|
|
Total revenue |
$ |
151,136 |
|
|
$ |
153,865 |
|
|
$ |
152,302 |
|
|
$ |
153,832 |
|
|
Net income |
|
4,264 |
|
|
|
5,681 |
|
|
|
906 |
|
|
|
1,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
37,714 |
|
|
|
39,211 |
|
|
|
35,641 |
|
|
|
36,307 |
|
|
Adjusted EBITDA |
|
37,714 |
|
|
|
39,211 |
|
|
|
35,641 |
|
|
|
36,307 |
|
|
Hotel EBITDA |
|
43,264 |
|
|
|
44,461 |
|
|
|
41,216 |
|
|
|
41,807 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO |
|
19,264 |
|
|
|
20,681 |
|
|
|
16,236 |
|
|
|
16,860 |
|
|
Adjusted FFO |
|
19,235 |
|
|
|
20,572 |
|
|
|
16,720 |
|
|
|
17,386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
attributable to the common shareholders |
$ |
0.25 |
|
|
$ |
0.34 |
|
|
$ |
0.05 |
|
|
$ |
0.09 |
|
|
FFO per share and unit |
$ |
1.15 |
|
|
$ |
1.24 |
|
|
$ |
0.97 |
|
|
$ |
1.01 |
|
|
Adjusted FFO per share and unit |
$ |
1.15 |
|
|
$ |
1.23 |
|
|
$ |
1.00 |
|
|
$ |
1.04 |
|
|
Rev PAR |
$ |
101.49 |
|
|
$ |
103.33 |
|
|
$ |
98.07 |
|
|
$ |
99.05 |
|
|
Hotel EBITDA margin |
|
28.6 |
|
% |
|
28.9 |
|
% |
|
27.1 |
|
% |
|
27.2 |
|
% |
Earnings Call/Webcast
The Company will conduct its third quarter 2016 conference call
for investors and other interested parties at 10:00 a.m. Eastern
Time on Tuesday, November 8, 2016. The conference call will be
accessible by telephone and through the Internet. Interested
individuals are invited to listen to the call by telephone at
888-339-0107 (United States) or 855-669-9657 (Canada) or +1
412-902-4188 (International). To participate on the webcast, log on
to www.sotherlyhotels.com at least 15 minutes before the call to
download the necessary software. For those unable to listen to the
call live, a taped rebroadcast will be available beginning one hour
after completion of the live call on November 8, 2016 through
November 7, 2017. To access the rebroadcast, dial 877-344-7529 and
enter conference number 10093409. A replay of the call also
will be available on the Internet at www.sotherlyhotels.com until
November 7, 2017.
About Sotherly Hotels Inc.
Sotherly Hotels Inc. is a self-managed and self-administered
lodging REIT focused on the acquisition, renovation, upbranding and
repositioning of upscale to upper-upscale full-service hotels in
the Southern United States. Currently, the Company’s portfolio
consists of investments in twelve hotel properties, comprising
3,011 rooms. Most of the Company’s properties operate under the
Hilton Worldwide, InterContinental Hotels Group and Marriott
International, Inc. brands. Sotherly Hotels Inc. was organized in
2004 and is headquartered in Williamsburg, Virginia. For more
information please visit www.sotherlyhotels.com.
Forward-Looking Statements
This news release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Although
the Company believes that the expectations and assumptions
reflected in the forward-looking statements are reasonable, these
statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions which are difficult to
predict and many of which are beyond the Company’s control.
Therefore, actual outcomes and results may differ materially from
what is expressed, forecasted or implied in such forward-looking
statements. Factors which could have a material adverse effect on
the Company’s future results, performance and achievements,
include, but are not limited to: national and local economic and
business conditions that affect occupancy rates and revenues at the
Company’s hotels and the demand for hotel products and services;
risks associated with the hotel industry, including competition,
increases in wages, energy costs and other operating costs; the
magnitude and sustainability of the economic recovery in the
hospitality industry and in the markets in which the Company
operates; the availability and terms of financing and capital and
the general volatility of the securities markets; risks associated
with the level of the Company’s indebtedness and its ability to
meet covenants in its debt agreements and, if necessary, to
refinance or seek an extension of the maturity of such indebtedness
or modify such debt agreements; management and performance of the
Company’s hotels; risks associated with maintaining our system of
internal controls; risks associated with the conflicts of interest
of the Company’s officers and directors; risks associated with
redevelopment and repositioning projects, including delays and cost
overruns; supply and demand for hotel rooms in the Company’s
current and proposed market areas; risks associated with our
ability to maintain our franchise agreements with our third party
franchisors; the Company’s ability to acquire additional properties
and the risk that potential acquisitions may not perform in
accordance with expectations; the Company’s ability to successfully
expand into new markets; legislative/regulatory changes, including
changes to laws governing taxation of REITs; the Company’s ability
to maintain its qualification as a REIT; and the Company’s ability
to maintain adequate insurance coverage. These risks and
uncertainties are described in greater detail under “Risk Factors”
in the Company’s Annual Report on Form 10-K and subsequent reports
filed with the Securities and Exchange Commission. The Company
undertakes no obligation to and does not intend to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. Although the Company
believes its current expectations to be based upon reasonable
assumptions, it can give no assurance that its expectations will be
attained or that actual results will not differ materially.
Financial Tables Follow…
|
|
SOTHERLY HOTELS INC. |
|
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
September 30, 2016 |
|
|
December 31, 2015 |
|
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Investment in hotel properties,
net |
|
$ |
354,137,772 |
|
|
$ |
354,963,242 |
|
Cash and cash equivalents |
|
|
26,432,532 |
|
|
|
11,493,914 |
|
Restricted cash |
|
|
5,866,231 |
|
|
|
5,793,840 |
|
Accounts receivable, net |
|
|
4,552,916 |
|
|
|
4,071,175 |
|
Accounts receivable-affiliate |
|
|
190,733 |
|
|
|
226,552 |
|
Loan proceeds receivable |
|
|
— |
|
|
|
2,600,711 |
|
Prepaid expenses, inventory and
other assets |
|
|
4,923,258 |
|
|
|
4,432,431 |
|
Deferred income taxes |
|
|
5,846,563 |
|
|
|
5,390,374 |
|
TOTAL ASSETS |
|
$ |
401,950,005 |
|
|
$ |
388,972,239 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
Mortgage loans, net |
|
$ |
270,836,333 |
|
|
$ |
270,331,724 |
|
Unsecured notes, net |
|
|
24,224,706 |
|
|
|
50,460,106 |
|
Accounts payable and accrued
expenses |
|
|
15,563,701 |
|
|
|
12,334,878 |
|
Advance deposits |
|
|
2,439,097 |
|
|
|
1,651,840 |
|
Dividends and distributions
payable |
|
|
1,929,029 |
|
|
|
1,335,323 |
|
TOTAL LIABILITIES |
|
$ |
314,992,866 |
|
|
$ |
336,113,871 |
|
Commitments and contingencies |
|
|
— |
|
|
|
— |
|
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 and 0 shares issued and outstanding at September 30,
2016 and December 31, 2015, respectively |
|
|
16,100 |
|
|
|
— |
|
Common stock, par value $0.01,
49,000,000 shares authorized, 14,949,651 shares and 14,490,714
shares issued and outstanding at September 30, 2016
and December 31, 2015, respectively |
|
|
149,496 |
|
|
|
144,907 |
|
Additional paid in capital |
|
|
121,559,775 |
|
|
|
82,749,058 |
|
Distributions in excess of retained
earnings |
|
|
(37,399,276 |
) |
|
|
(33,890,834 |
) |
Total Sotherly Hotels Inc.
stockholders’ equity |
|
|
84,326,095 |
|
|
|
49,003,131 |
|
Noncontrolling interest |
|
|
2,631,044 |
|
|
|
3,855,237 |
|
TOTAL EQUITY |
|
|
86,957,139 |
|
|
|
52,858,368 |
|
TOTAL LIABILITIES AND
EQUITY |
|
$ |
401,950,005 |
|
|
$ |
388,972,239 |
|
|
|
SOTHERLY
HOTELS INC. |
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2016 |
|
|
September 30, 2015 |
|
|
September 30, 2016 |
|
|
September 30, 2015 |
|
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms department |
|
$ |
26,665,132 |
|
|
$ |
24,132,181 |
|
|
$ |
83,896,833 |
|
|
$ |
71,819,966 |
|
Food and beverage department |
|
|
8,412,842 |
|
|
|
7,556,969 |
|
|
|
26,240,932 |
|
|
|
23,889,092 |
|
Other operating departments |
|
|
2,197,338 |
|
|
|
2,252,725 |
|
|
|
6,772,647 |
|
|
|
6,073,555 |
|
Total revenue |
|
|
37,275,312 |
|
|
|
33,941,875 |
|
|
|
116,910,412 |
|
|
|
101,782,613 |
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms department |
|
|
7,236,932 |
|
|
|
6,657,947 |
|
|
|
21,916,775 |
|
|
|
18,998,964 |
|
Food and beverage department |
|
|
5,820,000 |
|
|
|
5,562,404 |
|
|
|
18,250,542 |
|
|
|
16,668,025 |
|
Other operating departments |
|
|
642,219 |
|
|
|
491,751 |
|
|
|
1,880,618 |
|
|
|
1,192,917 |
|
Indirect |
|
|
14,492,775 |
|
|
|
13,245,062 |
|
|
|
43,241,433 |
|
|
|
37,046,275 |
|
Total hotel operating expenses |
|
|
28,191,926 |
|
|
|
25,957,164 |
|
|
|
85,289,368 |
|
|
|
73,906,181 |
|
Depreciation and
amortization |
|
|
3,790,872 |
|
|
|
3,374,209 |
|
|
|
11,260,987 |
|
|
|
9,583,506 |
|
Loss on disposal of
assets |
|
|
189,267 |
|
|
|
207,235 |
|
|
|
329,461 |
|
|
|
201,835 |
|
Corporate general and
administrative |
|
|
1,367,848 |
|
|
|
2,437,428 |
|
|
|
4,331,896 |
|
|
|
5,379,032 |
|
Total operating expenses |
|
|
33,539,913 |
|
|
|
31,976,036 |
|
|
|
101,211,712 |
|
|
|
89,070,554 |
|
NET OPERATING
INCOME |
|
|
3,735,399 |
|
|
|
1,965,839 |
|
|
|
15,698,700 |
|
|
|
12,712,059 |
|
Other income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(4,626,333 |
) |
|
|
(4,245,679 |
) |
|
|
(13,872,129 |
) |
|
|
(11,860,649 |
) |
Interest income |
|
|
44,485 |
|
|
|
15,480 |
|
|
|
63,523 |
|
|
|
40,888 |
|
Equity income in joint venture |
|
|
— |
|
|
|
8,173 |
|
|
|
— |
|
|
|
506,890 |
|
Loss on early
debt extinguishment |
|
|
(1,087,395 |
) |
|
|
(74,824 |
) |
|
|
(1,157,688 |
) |
|
|
(772,907 |
) |
Unrealized loss
on hedging activities |
|
|
(492 |
) |
|
|
(106,808 |
) |
|
|
(66,567 |
) |
|
|
(106,808 |
) |
Gain on change in
control |
|
|
— |
|
|
|
6,560,958 |
|
|
|
— |
|
|
|
6,560,958 |
|
Gain on
involuntary conversion of asset |
|
|
— |
|
|
|
- |
|
|
|
— |
|
|
|
32,433 |
|
Net income/(loss)
before income taxes |
|
|
(1,934,336 |
) |
|
|
4,123,139 |
|
|
|
665,839 |
|
|
|
7,112,864 |
|
Income tax
(provision)/benefit |
|
|
385,145 |
|
|
|
513,505 |
|
|
|
308,398 |
|
|
|
(3,255 |
) |
Net
income/(loss) |
|
|
(1,549,191 |
) |
|
|
4,636,644 |
|
|
|
974,237 |
|
|
|
7,109,609 |
|
Less: Net income
attributable to the noncontrolling interest |
|
|
172,846 |
|
|
|
(764,250 |
) |
|
|
(106,377 |
) |
|
|
(1,230,773 |
) |
Net income/(loss)
attributable to the Company |
|
|
(1,376,345 |
) |
|
|
3,872,394 |
|
|
|
867,860 |
|
|
|
5,878,836 |
|
Distributions to
preferred shareholders |
|
|
(339,889 |
) |
|
|
— |
|
|
|
(339,889 |
) |
|
|
— |
|
Net income/(loss)
attributable to the common shareholders |
|
$ |
(1,716,234 |
) |
|
$ |
3,872,394 |
|
|
$ |
527,971 |
|
|
$ |
5,878,836 |
|
Net income/(loss)
per share attributable to the common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
$ |
(0.11 |
) |
|
$ |
0.27 |
|
|
$ |
0.04 |
|
|
$ |
0.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
|
14,949,651 |
|
|
|
14,247,671 |
|
|
|
14,897,595 |
|
|
|
11,884,110 |
|
SOTHERLY HOTELS INC.KEY
OPERATING METRICS(unaudited)
The following tables illustrate the key operating metrics for
the three and nine months ended September 30, 2016 and 2015,
respectively, for the Company’s wholly-owned properties during each
respective reporting period (“actual” portfolio metrics), as well
as the eleven wholly-owned properties in the portfolio that were
under the Company’s control during the three and nine months ended
September 30, 2016 and the corresponding period in 2015
(“same-store” portfolio metrics). Accordingly, the same-store data
does not reflect the performance of the Crowne Plaza Hollywood
Beach Resort, which was acquired through a joint venture in August
2007 and in which the Company had a 25.0% indirect interest during
each respective reporting period prior to its acquisition of the
remaining 75.0% interest in July 2015.
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2016 |
|
|
September 30, 2015 |
|
|
September 30, 2016 |
|
|
September 30, 2015 |
|
Actual Portfolio
Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
71.5 |
% |
|
|
70.5 |
% |
|
|
72.0 |
% |
|
|
71.4 |
% |
ADR |
|
$ |
134.55 |
|
|
$ |
128.16 |
|
|
$ |
141.16 |
|
|
$ |
133.20 |
|
RevPAR |
|
$ |
96.26 |
|
|
$ |
90.32 |
|
|
$ |
101.69 |
|
|
$ |
95.06 |
|
Same-Store Portfolio
Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy % |
|
|
70.7 |
% |
|
|
69.9 |
% |
|
|
70.9 |
% |
|
|
71.2 |
% |
ADR |
|
$ |
134.79 |
|
|
$ |
128.91 |
|
|
$ |
136.70 |
|
|
$ |
133.59 |
|
RevPAR |
|
$ |
95.32 |
|
|
$ |
90.07 |
|
|
$ |
96.95 |
|
|
$ |
95.10 |
|
SOTHERLY HOTELS
INC.SUPPLEMENTAL
DATA(unaudited)
The following tables illustrate the key operating metrics for
the three and nine months ended September 30, 2016, 2015 and 2014,
respectively, for each of the Company’s wholly-owned properties
during each respective reporting period, irrespective of ownership
percentage during any period.
Occupancy
|
Q3 2016 |
|
|
Q3 2015 |
|
|
Q3 2014 |
|
|
9 Months 2016 |
|
|
9 Months 2015 |
|
|
9 Months 2014 |
|
Crowne Plaza Hampton MarinaHampton, Virginia |
|
67.9 |
% |
|
|
68.2 |
% |
|
|
65.7 |
% |
|
|
60.2 |
% |
|
|
57.1 |
% |
|
|
53.9 |
% |
Crowne Plaza Hollywood Beach Resort*Hollywood,
Florida |
|
78.7 |
% |
|
|
81.1 |
% |
|
|
79.5 |
% |
|
|
81.7 |
% |
|
|
83.5 |
% |
|
|
84.1 |
% |
Crowne Plaza Tampa WestshoreTampa, Florida |
|
67.9 |
% |
|
|
61.4 |
% |
|
|
66.8 |
% |
|
|
77.1 |
% |
|
|
73.0 |
% |
|
|
74.5 |
% |
DoubleTree by Hilton Jacksonville
RiverfrontJacksonville, Florida |
|
79.2 |
% |
|
|
68.2 |
% |
|
|
59.9 |
% |
|
|
79.2 |
% |
|
|
69.0 |
% |
|
|
66.2 |
% |
DoubleTree by Hilton LaurelLaurel, Maryland |
|
64.9 |
% |
|
|
46.9 |
% |
|
|
64.0 |
% |
|
|
63.2 |
% |
|
|
51.3 |
% |
|
|
63.2 |
% |
DoubleTree by Hilton Philadelphia
AirportPhiladelphia, Pennsylvania |
|
81.8 |
% |
|
|
80.1 |
% |
|
|
78.4 |
% |
|
|
80.2 |
% |
|
|
81.5 |
% |
|
|
80.0 |
% |
DoubleTree by Hilton Raleigh Brownstone –
UniversityRaleigh, North Carolina |
|
68.4 |
% |
|
|
75.5 |
% |
|
|
77.4 |
% |
|
|
71.0 |
% |
|
|
74.9 |
% |
|
|
75.9 |
% |
The Georgian Terrace *ϮAtlanta, Georgia |
|
68.4 |
% |
|
|
71.3 |
% |
|
|
80.3 |
% |
|
|
71.0 |
% |
|
|
71.3 |
% |
|
|
81.1 |
% |
Hilton Savannah DeSoto ϮSavannah, Georgia |
|
70.8 |
% |
|
|
75.3 |
% |
|
|
77.2 |
% |
|
|
74.4 |
% |
|
|
78.5 |
% |
|
|
77.0 |
% |
Hilton Wilmington RiversideWilmington, North
Carolina |
|
78.2 |
% |
|
|
77.7 |
% |
|
|
80.7 |
% |
|
|
73.4 |
% |
|
|
72.9 |
% |
|
|
73.1 |
% |
Sheraton Louisville RiversideJeffersonville,
Indiana |
|
72.1 |
% |
|
|
74.4 |
% |
|
|
72.5 |
% |
|
|
66.1 |
% |
|
|
71.5 |
% |
|
|
69.1 |
% |
The WhitehallHouston, Texas |
|
51.7 |
% |
|
|
62.9 |
% |
|
|
75.0 |
% |
|
|
55.1 |
% |
|
|
72.4 |
% |
|
|
77.9 |
% |
All properties weighted
average* |
|
71.5 |
% |
|
|
71.0 |
% |
|
|
73.7 |
% |
|
|
72.0 |
% |
|
|
72.4 |
% |
|
|
74.2 |
% |
* |
Includes periods of
non-ownership/partial ownership. |
† |
Property undergoing
renovation during the current quarter. |
ADR
|
Q3 2016 |
|
|
Q3 2015 |
|
|
Q3 2014 |
|
|
9 Months 2016 |
|
|
9 Months 2015 |
|
|
9 Months 2014 |
|
Crowne Plaza Hampton MarinaHampton, Virginia |
$ |
102.11 |
|
|
$ |
97.64 |
|
|
$ |
93.81 |
|
|
$ |
98.59 |
|
|
$ |
95.09 |
|
|
$ |
94.81 |
|
Crowne Plaza Hollywood Beach Resort*Hollywood,
Florida |
$ |
132.73 |
|
|
$ |
123.20 |
|
|
$ |
125.48 |
|
|
$ |
174.77 |
|
|
$ |
174.64 |
|
|
$ |
161.02 |
|
Crowne Plaza Tampa WestshoreTampa, Florida |
$ |
102.74 |
|
|
$ |
101.71 |
|
|
$ |
96.64 |
|
|
$ |
116.26 |
|
|
$ |
112.48 |
|
|
$ |
106.72 |
|
DoubleTree by Hilton Jacksonville
RiverfrontJacksonville, Florida |
$ |
119.52 |
|
|
$ |
102.21 |
|
|
$ |
95.47 |
|
|
$ |
121.69 |
|
|
$ |
105.15 |
|
|
$ |
97.41 |
|
DoubleTree by Hilton LaurelLaurel, Maryland |
$ |
101.62 |
|
|
$ |
90.20 |
|
|
$ |
82.69 |
|
|
$ |
104.11 |
|
|
$ |
94.09 |
|
|
$ |
89.00 |
|
DoubleTree by Hilton Philadelphia
AirportPhiladelphia, Pennsylvania |
$ |
163.24 |
|
|
$ |
136.53 |
|
|
$ |
133.32 |
|
|
$ |
147.13 |
|
|
$ |
136.31 |
|
|
$ |
133.78 |
|
DoubleTree by Hilton Raleigh Brownstone –
UniversityRaleigh, North Carolina |
$ |
126.69 |
|
|
$ |
127.63 |
|
|
$ |
119.58 |
|
|
$ |
132.80 |
|
|
$ |
129.75 |
|
|
$ |
121.19 |
|
The Georgian Terrace *ϮAtlanta, Georgia |
$ |
166.11 |
|
|
$ |
158.41 |
|
|
$ |
143.02 |
|
|
$ |
161.09 |
|
|
$ |
156.10 |
|
|
$ |
137.97 |
|
Hilton Savannah DeSoto ϮSavannah, Georgia |
$ |
146.47 |
|
|
$ |
147.13 |
|
|
$ |
138.33 |
|
|
$ |
157.02 |
|
|
$ |
155.11 |
|
|
$ |
146.83 |
|
Hilton Wilmington RiversideWilmington, North
Carolina |
$ |
154.36 |
|
|
$ |
146.68 |
|
|
$ |
142.00 |
|
|
$ |
148.77 |
|
|
$ |
140.18 |
|
|
$ |
141.23 |
|
Sheraton Louisville RiversideJeffersonville,
Indiana |
$ |
119.47 |
|
|
$ |
124.62 |
|
|
$ |
128.78 |
|
|
$ |
140.45 |
|
|
$ |
169.81 |
|
|
$ |
157.41 |
|
The WhitehallHouston, Texas |
$ |
126.10 |
|
|
$ |
136.52 |
|
|
$ |
129.97 |
|
|
$ |
142.13 |
|
|
$ |
142.19 |
|
|
$ |
139.06 |
|
All properties weighted
average* |
$ |
134.55 |
|
|
$ |
128.24 |
|
|
$ |
122.61 |
|
|
$ |
141.16 |
|
|
$ |
138.48 |
|
|
$ |
126.32 |
|
* |
Includes periods of
non-ownership/partial ownership. |
† |
Property undergoing
renovation during the current quarter. |
RevPAR
|
Q3 2016 |
|
|
Q3 2015 |
|
|
Q3 2014 |
|
|
9 Months 2016 |
|
|
9 Months 2015 |
|
|
9 Months 2014 |
|
Crowne Plaza Hampton MarinaHampton, Virginia |
$ |
69.29 |
|
|
$ |
66.61 |
|
|
$ |
61.66 |
|
|
$ |
59.31 |
|
|
$ |
54.34 |
|
|
$ |
51.11 |
|
Crowne Plaza Hollywood Beach Resort*Hollywood,
Florida |
$ |
104.42 |
|
|
$ |
99.95 |
|
|
$ |
99.76 |
|
|
$ |
142.82 |
|
|
$ |
145.83 |
|
|
$ |
136.96 |
|
Crowne Plaza Tampa WestshoreTampa, Florida |
$ |
69.73 |
|
|
$ |
62.50 |
|
|
$ |
64.52 |
|
|
$ |
89.67 |
|
|
$ |
82.10 |
|
|
$ |
79.51 |
|
DoubleTree by Hilton Jacksonville
RiverfrontJacksonville, Florida |
$ |
94.68 |
|
|
$ |
69.74 |
|
|
$ |
57.15 |
|
|
$ |
96.43 |
|
|
$ |
72.53 |
|
|
$ |
64.49 |
|
DoubleTree by Hilton LaurelLaurel, Maryland |
$ |
65.98 |
|
|
$ |
42.31 |
|
|
$ |
52.95 |
|
|
$ |
65.76 |
|
|
$ |
48.26 |
|
|
$ |
56.21 |
|
DoubleTree by Hilton Philadelphia
AirportPhiladelphia, Pennsylvania |
$ |
133.59 |
|
|
$ |
109.36 |
|
|
$ |
104.52 |
|
|
$ |
117.96 |
|
|
$ |
111.09 |
|
|
$ |
106.98 |
|
DoubleTree by Hilton Raleigh Brownstone –
UniversityRaleigh, North Carolina |
$ |
86.64 |
|
|
$ |
96.39 |
|
|
$ |
92.55 |
|
|
$ |
94.34 |
|
|
$ |
97.14 |
|
|
$ |
92.01 |
|
The Georgian Terrace *ϮAtlanta, Georgia |
$ |
113.60 |
|
|
$ |
112.92 |
|
|
$ |
114.81 |
|
|
$ |
114.33 |
|
|
$ |
111.27 |
|
|
$ |
111.96 |
|
Hilton Savannah DeSoto ϮSavannah, Georgia |
$ |
103.72 |
|
|
$ |
110.73 |
|
|
$ |
106.73 |
|
|
$ |
116.80 |
|
|
$ |
121.71 |
|
|
$ |
113.10 |
|
Hilton Wilmington RiversideWilmington, North
Carolina |
$ |
120.65 |
|
|
$ |
113.93 |
|
|
$ |
114.64 |
|
|
$ |
109.16 |
|
|
$ |
102.24 |
|
|
$ |
103.20 |
|
Sheraton Louisville RiversideJeffersonville,
Indiana |
$ |
86.19 |
|
|
$ |
92.72 |
|
|
$ |
93.40 |
|
|
$ |
92.91 |
|
|
$ |
121.35 |
|
|
$ |
108.75 |
|
The WhitehallHouston, Texas |
$ |
65.14 |
|
|
$ |
85.89 |
|
|
$ |
97.49 |
|
|
$ |
78.34 |
|
|
$ |
103.01 |
|
|
$ |
108.27 |
|
All properties weighted
average* |
$ |
96.26 |
|
|
$ |
91.09 |
|
|
$ |
90.65 |
|
|
$ |
101.69 |
|
|
$ |
100.34 |
|
|
$ |
97.19 |
|
* |
Includes periods of
non-ownership/partial ownership. |
† |
Property undergoing
renovation during the current quarter. |
|
|
SOTHERLY HOTELS INC. |
|
RECONCILIATION OF NET INCOME (LOSS) TO FFO,
Adjusted FFO, EBITDA, Adjusted EBITDA and Hotel
EBITDA |
|
(unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2016 |
|
|
September 30, 2015 |
|
|
September 30, 2016 |
|
|
September 30, 2015 |
|
Net income/(loss)
attributable to the common shareholders |
|
$ |
(1,716,234 |
) |
|
$ |
3,872,394 |
|
|
$ |
527,971 |
|
|
$ |
5,878,836 |
|
Add: Net income/(loss) attributable
to the noncontrolling interest |
|
|
(172,846 |
) |
|
|
764,250 |
|
|
|
106,377 |
|
|
|
1,230,773 |
|
Depreciation and amortization |
|
|
3,790,872 |
|
|
|
3,374,209 |
|
|
|
11,260,987 |
|
|
|
9,583,506 |
|
Equity in depreciation and
amortization of joint venture |
|
|
— |
|
|
|
37,034 |
|
|
|
— |
|
|
|
259,279 |
|
Gain on involuntary conversion of
asset |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(32,433 |
) |
Gain on change in control |
|
|
— |
|
|
|
(6,560,958 |
) |
|
|
— |
|
|
|
(6,560,958 |
) |
Loss on disposal of assets |
|
|
189,267 |
|
|
|
207,235 |
|
|
|
329,461 |
|
|
|
201,835 |
|
FFO |
|
$ |
2,091,059 |
|
|
$ |
1,694,164 |
|
|
$ |
12,224,796 |
|
|
$ |
10,560,838 |
|
Increase (decrease) in deferred
income taxes |
|
|
(448,574 |
) |
|
|
(824,973 |
) |
|
|
(456,188 |
) |
|
|
(416,169 |
) |
Acquisition costs |
|
|
— |
|
|
|
622,973 |
|
|
|
— |
|
|
|
622,973 |
|
Loss on early debt
extinguishment |
|
|
1,087,395 |
|
|
|
74,824 |
|
|
|
1,157,688 |
|
|
|
772,907 |
|
Loan modification fees |
|
|
— |
|
|
|
— |
|
|
|
30,057 |
|
|
|
— |
|
Loss on hedging activities |
|
|
492 |
|
|
|
106,808 |
|
|
|
66,567 |
|
|
|
106,808 |
|
Adjusted FFO attributed
to common shareholders |
|
$ |
2,730,372 |
|
|
$ |
1,673,796 |
|
|
$ |
13,022,920 |
|
|
$ |
11,647,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding, basic and diluted |
|
|
14,949,651 |
|
|
|
14,247,671 |
|
|
|
14,897,595 |
|
|
|
11,884,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of non-controlling units |
|
|
1,778,140 |
|
|
|
2,368,218 |
|
|
|
1,825,962 |
|
|
|
2,444,783 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
and units outstanding, basic and diluted |
|
|
16,727,791 |
|
|
|
16,615,889 |
|
|
|
16,723,557 |
|
|
|
14,328,893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share and unit |
|
$ |
0.13 |
|
|
$ |
0.10 |
|
|
$ |
0.73 |
|
|
$ |
0.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FFO per share and
unit |
|
$ |
0.16 |
|
|
$ |
0.10 |
|
|
$ |
0.78 |
|
|
$ |
0.81 |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2016 |
|
|
September 30, 2015 |
|
|
September 30, 2016 |
|
|
September 30, 2015 |
|
Net income/(loss)
attributable to the common shareholders |
|
$ |
(1,716,234 |
) |
|
$ |
3,872,394 |
|
|
$ |
527,971 |
|
|
$ |
5,878,836 |
|
Add: Net income/(loss) attributable
to the noncontrolling interest |
|
|
(172,846 |
) |
|
|
764,250 |
|
|
|
106,377 |
|
|
|
1,230,773 |
|
Interest expense |
|
|
4,626,333 |
|
|
|
4,245,679 |
|
|
|
13,872,129 |
|
|
|
11,860,649 |
|
Interest income |
|
|
(44,485 |
) |
|
|
(15,480 |
) |
|
|
(63,523 |
) |
|
|
(40,888 |
) |
Income tax provision |
|
|
(385,145 |
) |
|
|
(513,505 |
) |
|
|
(308,398 |
) |
|
|
3,255 |
|
Depreciation and amortization |
|
|
3,790,872 |
|
|
|
3,374,209 |
|
|
|
11,260,987 |
|
|
|
9,583,506 |
|
Equity in interest, depreciation
and amortization of joint venture |
|
|
— |
|
|
|
92,844 |
|
|
|
— |
|
|
|
640,188 |
|
Loss on early debt
extinguishment |
|
|
1,087,395 |
|
|
|
74,824 |
|
|
|
1,157,688 |
|
|
|
772,907 |
|
Loss on disposal of assets |
|
|
189,267 |
|
|
|
207,235 |
|
|
|
329,461 |
|
|
|
201,835 |
|
Gain on involuntary conversion of
asset |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(32,433 |
) |
Distributions to preferred
shareholders |
|
|
339,889 |
|
|
|
— |
|
|
|
339,889 |
|
|
|
— |
|
EBITDA |
|
|
7,715,046 |
|
|
|
12,102,450 |
|
|
|
27,222,581 |
|
|
|
30,098,628 |
|
Acquisition costs |
|
|
— |
|
|
|
622,973 |
|
|
|
— |
|
|
|
622,973 |
|
Adjusted EBITDA |
|
|
7,715,046 |
|
|
|
12,725,423 |
|
|
|
27,222,581 |
|
|
|
30,721,601 |
|
Corporate general and
administrative |
|
|
1,367,848 |
|
|
|
1,814,455 |
|
|
|
4,331,896 |
|
|
|
4,756,059 |
|
Equity in Adjusted EBITDA of joint
venture |
|
|
— |
|
|
|
(101,017 |
) |
|
|
— |
|
|
|
(1,147,078 |
) |
Unrealized loss on hedging
activities |
|
|
492 |
|
|
|
106,808 |
|
|
|
66,567 |
|
|
|
106,808 |
|
Gain on change in control |
|
|
— |
|
|
|
(6,560,958 |
) |
|
|
— |
|
|
|
(6,560,958 |
) |
Other fee income |
|
|
— |
|
|
|
(21,913 |
) |
|
|
— |
|
|
|
(200,976 |
) |
Hotel EBITDA |
|
$ |
9,083,386 |
|
|
$ |
7,962,798 |
|
|
$ |
31,621,044 |
|
|
$ |
27,675,456 |
|
Non-GAAP Financial Measures
The Company considers the non-GAAP measures of FFO (including
FFO per share), EBITDA and hotel EBITDA to be key supplemental
measures of the Company’s performance and could be considered along
with, not alternatives to, net income (loss) as a measure of the
Company’s performance. These measures do not represent cash
generated from operating activities determined by generally
accepted accounting principles (“GAAP”) or amounts available for
the Company’s discretionary use and should not be considered
alternative measures of net income, cash flows from operations or
any other operating performance measure prescribed by GAAP.
FFO
Industry analysts and investors use Funds from Operations
(“FFO”), as a supplemental operating performance measure of an
equity REIT. FFO is calculated in accordance with the definition
adopted by the Board of Governors of the National Association of
Real Estate Investment Trusts (“NAREIT”). FFO, as defined by
NAREIT, represents net income or loss determined in accordance with
GAAP, excluding extraordinary items as defined under GAAP and gains
or losses from sales of previously depreciated operating real
estate assets, plus certain non-cash items such as real estate
asset depreciation and amortization, and after adjustment for any
noncontrolling interest from unconsolidated partnerships and joint
ventures. Historical cost accounting for real estate assets in
accordance with GAAP implicitly assumes that the value of real
estate assets diminishes predictably over time. Since real estate
values instead have historically risen or fallen with market
conditions, many investors and analysts have considered the
presentation of operating results for real estate companies that
use historical cost accounting to be insufficient by itself.
The Company considers FFO to be a useful measure of adjusted net
income (loss) for reviewing comparative operating and financial
performance because we believe FFO is most directly comparable to
net income (loss), which remains the primary measure of
performance, because by excluding gains or losses related to sales
of previously depreciated operating real estate assets and
excluding real estate asset depreciation and amortization, FFO
assists in comparing the operating performance of a company’s real
estate between periods or as compared to different companies.
Although FFO is intended to be a REIT industry standard, other
companies may not calculate FFO in the same manner as we do, and
investors should not assume that FFO as reported by us is
comparable to FFO as reported by other REITs.
EBITDA
The Company believes that excluding the effect of non-operating
expenses and non-cash charges, and the portion of those items
related to unconsolidated entities, all of which are also based on
historical cost accounting and may be of limited significance in
evaluating current performance, can help eliminate the accounting
effects of depreciation and financing decisions and facilitate
comparisons of core operating profitability between periods and
between REITs, even though EBITDA also does not represent an amount
that accrued directly to shareholders.
Hotel EBITDA
The Company defines hotel EBITDA as net income or loss
excluding: (1) interest expense, (2) interest income, (3)
income tax provision or benefit, (4) equity in the income or
loss of equity investees, (5) unrealized gains and losses on
derivative instruments not included in other comprehensive income,
(6) gains and losses on disposal of assets, (7) realized
gains and losses on investments, (8) impairment of long-lived
assets or investments, (9) loss on early debt extinguishment,
(10) gains or losses on change in control, (11) corporate general
and administrative expense, (12) depreciation and
amortization, (13) gains and losses on involuntary conversions
of assets, (14) loan modification fees and (15) other operating
revenue not related to the Company’s wholly-owned portfolio. We
believe this provides a more complete understanding of the
operating results over which the Company’s wholly-owned hotels and
its operators have direct control. We believe hotel EBITDA provides
investors with supplemental information on the on-going operational
performance of the Company’s hotels and the effectiveness of
third-party management companies operating the Company’s business
on a property-level basis. The Company’s calculation of hotel
EBITDA may be different from similar measures calculated by other
REITs.
Adjusted FFO and Adjusted EBITDA
The Company presents adjusted FFO, including adjusted FFO per
share and unit, and adjusted EBITDA, which adjusts for certain
additional items including changes in deferred income taxes, any
unrealized gain (loss) on its hedging instruments or warrant
derivative, loan impairment losses, losses on early extinguishment
of debt, aborted offering costs, franchise termination costs, loan
modification fees, costs associated with the departure of executive
officers, litigation settlement, over-assessed real estate taxes on
appeal, change in control gains or losses and acquisition
transaction costs. The Company excludes these items as it believes
it allows for meaningful comparisons between periods and among
other REITs and is more indicative of the on-going performance of
its business and assets. The Company’s calculation of adjusted FFO
and adjusted EBITDA may be different from similar measures
calculated by other REITs.
Contact at the Company:
Scott Kucinski
Vice President – Operations & Investor Relations
Sotherly Hotels Inc.
410 West Francis Street
Williamsburg, Virginia 23185
757.229.5648
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