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 fourth quarter and year ended December
31, 2018. The Company’s results include the following*:
|
Three Months
Ended |
|
|
Year
Ended |
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
($ in thousands
except per share data) |
|
|
($ in thousands
except per share data) |
|
Total Revenue |
$ |
43,466 |
|
|
$ |
38,160 |
|
|
$ |
178,173 |
|
|
$ |
154,267 |
|
Net loss available to common
stockholders |
|
(3,768 |
) |
|
|
(3,937 |
) |
|
|
(5,720 |
) |
|
|
(3,339 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
7,185 |
|
|
|
7,363 |
|
|
|
40,347 |
|
|
|
34,276 |
|
Hotel EBITDA |
|
10,247 |
|
|
|
10,003 |
|
|
|
47,684 |
|
|
|
40,989 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common stockholders and
unitholders |
|
1,357 |
|
|
|
107 |
|
|
|
14,041 |
|
|
|
12,418 |
|
Adjusted FFO available to common stockholders and
unitholders |
|
1,877 |
|
|
|
3,333 |
|
|
|
15,923 |
|
|
|
15,664 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share |
$ |
(0.28 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.42 |
) |
|
$ |
(0.24 |
) |
FFO per common share and unit |
$ |
0.09 |
|
|
$ |
0.01 |
|
|
$ |
0.92 |
|
|
$ |
0.80 |
|
Adjusted FFO per common share and unit |
$ |
0.12 |
|
|
$ |
0.22 |
|
|
$ |
1.04 |
|
|
$ |
1.00 |
|
(*) Earnings before interest, taxes,
depreciation and amortization (“EBITDA”), hotel EBITDA, funds from
operations (“FFO”) available to common stockholders and
unitholders, adjusted FFO available to common stockholders and
unitholders, FFO per common share and unit and adjusted FFO per
common 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. The Company is the sole general partner of
Sotherly Hotels LP, a Delaware limited partnership (the “Operating
Partnership”), and 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:
- Revenue and RevPAR. For the three-month
period ending December 31, 2018, Total Revenue increased 13.9% over
the three-month period ending December 31, 2017. Room revenue
per available room (“RevPAR”) for the Company’s composite
portfolio, which includes the performance of the rooms
participating in our rental program at the Hyde Resort &
Residences, during the three-month period ending December 31, 2018,
increased 6.0% over the three months ended December 31, 2017, to
$100.10 reflecting a 3.8% increase in occupancy and a 2.2% increase
in average daily rate (“ADR”). For the twelve-month period ending
December 31, 2018, RevPAR increased 7.4% over the twelve months
ended December 31, 2017, to $109.20 driven by a 0.4% increase in
occupancy and a 6.9% increase in ADR.
- Common Dividends. On January 29, 2019, the
Company announced a quarterly dividend (distribution) on its common
stock (and units) of $0.125 per share (and unit) to stockholders
(and unitholders) of record as of March 15, 2019, payable on April
11, 2019.
- Hotel EBITDA. The Company generated hotel
EBITDA of approximately $10.2 million during the three-month period
ending December 31, 2018, hotel EBITDA increased 2.4% or
approximately $0.2 million, over the three months ended December
31, 2017. For the twelve-month period ending December 31, 2018,
hotel EBITDA increased 16.3%, or approximately $6.7 million, over
the twelve months ended December 31, 2017.
- EBITDA. The Company generated EBITDA of
approximately $7.2 million during the three-month period ending
December 31, 2018, a decrease of 2.4% or approximately $(0.2)
million compared to the three months ended December 31, 2017. For
the twelve-month period ending December 31, 2018, EBITDA increased
17.7% or approximately $6.1 million from the twelve months ended
December 31, 2017.
- Adjusted FFO available to common stockholders and
unitholders. For the three-month period ending December
31, 2018, Adjusted FFO available to common stockholders and
unitholders decreased 43.7% or approximately $1.5 million from the
three months ended December 31, 2017. For the twelve-month period
ending December 31, 2018, adjusted FFO available to common
stockholders and unitholders increased 1.6% or approximately $0.3
million from the twelve months ended December 31, 2017.
Andrew M. Sims, Chairman and Chief Executive Officer of Sotherly
Hotels Inc., commented, “Sotherly had a solid fourth quarter, which
resulted in Adjusted FFO of $1.04 per common share and unit for the
year, which is within the Company’s original guidance issued in
February 2018. Many of the financial metrics that we view as
indicative of the Company’s performance showed positive
year-over-year movement in the fourth quarter, including Total
Revenue, RevPAR, EBITDA, Hotel EBITDA, and FFO. RevPAR
outpaced the industry for the fourth quarter, with an increase of
6.0% over the same period in 2017.”
Balance Sheet/Liquidity
At December 31, 2018, the Company had approximately $37.9
million of available cash and cash equivalents, of which
approximately $4.1 million was reserved for real estate taxes,
insurance, capital improvements and certain other expenses or
otherwise restricted. The Company had principal balances of
approximately $392.6 million in outstanding debt at a weighted
average interest rate of approximately 5.13%.
On August 31, 2018, we entered into a Sales Agency Agreement,
with Sandler O’Neill & Partners, L.P. (“Sandler O’Neill”),
under which the Company may sell from time to time through Sandler
O’Neill, as sales agent, shares of the Company’s common stock, par
value $0.01 per share, having an aggregate gross sales price of up
to $5,000,000 and up to 400,000 shares of the Company’s 7.875%
Series C Cumulative Redeemable Preferred Stock, $0.01 par value per
share. Through December 31, 2018, the Company sold 88,297
shares of common stock and 52,141 shares of Series C Preferred
Stock, for aggregate proceeds of approximately $1.9 million.
On December 12, 2018, the Company authorized the extension
of the Company’s stock repurchase program, which was originally
announced in December 2016, authorizing the Company to purchase up
to $10.0 million of its outstanding common stock, par value $0.01
per share, at prevailing prices on the open market or in privately
negotiated transactions, at the discretion of
management. As of December 12, 2018, the Company had
repurchased shares of the Company’s common stock at an aggregate
cost of approximately $5.9 million pursuant to the stock repurchase
program, leaving a balance of approximately $4.1 million of its
common stock that may be repurchased. As of December 31,
2018, the Company had approximately 14.2 million shares
outstanding.
Portfolio Update
At the Company’s hotel in Tampa, Florida, renovations are
underway for an estimated $11.3 million renovation project in
anticipation of a planned conversion in June 2019 of the Crowne
Plaza Tampa Westshore to Hotel Alba, which we expect to become a
member of the Tapestry Collection by Hilton. As of December
31, 2018, we incurred costs totaling approximately $7.5 million
toward this renovation.
2019 Outlook
Set forth below is the Company’s guidance for 2019. The
guidance is predicated on estimates of occupancy and ADR that are
consistent with the most recent 2019 calendar year forecasts by STR
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 2019, in thousands of
dollars, except per share and RevPAR data:
|
2019 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
Total revenue |
$ |
184,247 |
|
|
$ |
187,053 |
|
Net income |
|
1,511 |
|
|
|
2,099 |
|
Net loss available to common stockholders and
unitholders |
|
(4,631 |
) |
|
|
(4,043 |
) |
|
|
|
|
|
|
|
|
EBITDA |
|
43,136 |
|
|
|
44,074 |
|
Hotel EBITDA |
|
49,186 |
|
|
|
50,224 |
|
|
|
|
|
|
|
|
|
FFO available to common stockholders and
unitholders |
|
15,369 |
|
|
|
15,957 |
|
Adjusted FFO available to common stockholders and
unitholders |
|
15,939 |
|
|
|
16,877 |
|
|
|
|
|
|
|
|
|
Net loss per share available to common
stockholders |
$ |
(0.30 |
) |
|
$ |
(0.26 |
) |
FFO per common share and unit |
$ |
0.98 |
|
|
$ |
1.02 |
|
Adjusted FFO per common share and unit |
$ |
1.02 |
|
|
$ |
1.08 |
|
Rev PAR |
$ |
109.60 |
|
|
$ |
110.49 |
|
Hotel EBITDA margin |
|
26.7 |
% |
|
|
26.9 |
% |
|
|
|
|
|
|
|
|
Earnings Call/Webcast
The Company will conduct its fourth quarter 2018 conference call
for investors and other interested parties at 10:00 a.m. Eastern
Time on Tuesday, February 26, 2019. 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 February 26, 2019 through
February 25, 2020. To access the rebroadcast, dial 877-344-7529 and
enter conference number 10127127. A replay of the call also
will be available on the Internet at www.sotherlyhotels.com until
February 25, 2020.
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
3,156 rooms, and an interest in the Hyde Resort & Residences, a
luxury condo hotel. The Company owns hotels that operate under the
Hilton Worldwide, InterContinental Hotels Group and Marriott
International, Inc. brands, as well as independent hotels. Sotherly
Hotels Inc. was organized in 2004 and is headquartered in
Williamsburg, Virginia. For more information, please visit
www.sotherlyhotels.com.
Contact at the Company:
Scott KucinskiVice President – Operations & Investor
RelationsSotherly Hotels Inc.410 West Francis StreetWilliamsburg,
Virginia 23185757.229.5648
Forward-Looking Statements
This news release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended. 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 and new supply of hotel rooms,
increases in wages, energy costs and other operating costs; risks
associated with adverse weather conditions, including hurricanes;
the availability and terms of financing and capital and the general
volatility of the securities markets; the Company’s intent to
repurchase shares from time to time; 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 |
|
|
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Investment in hotel properties, net |
|
$ |
435,725,814 |
|
|
$ |
357,799,512 |
|
Cash and
cash equivalents |
|
|
33,792,773 |
|
|
|
29,777,845 |
|
Restricted cash |
|
|
4,075,508 |
|
|
|
3,651,197 |
|
Accounts
receivable, net |
|
|
6,766,696 |
|
|
|
5,587,077 |
|
Accounts
receivable - affiliate |
|
|
262,572 |
|
|
|
394,026 |
|
Prepaid
expenses, inventory and other assets |
|
|
5,262,884 |
|
|
|
7,292,565 |
|
Favorable
lease assets, net |
|
|
2,465,421 |
|
|
|
— |
|
Deferred
income taxes |
|
|
5,131,179 |
|
|
|
5,451,118 |
|
TOTAL
ASSETS |
|
$ |
493,482,847 |
|
|
$ |
409,953,340 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
Mortgage
loans, net |
|
$ |
364,828,845 |
|
|
$ |
297,318,816 |
|
Unsecured
notes, net |
|
|
23,894,658 |
|
|
|
— |
|
Accounts
payable and accrued liabilities |
|
|
16,268,096 |
|
|
|
13,813,623 |
|
Advance
deposits |
|
|
2,815,283 |
|
|
|
1,572,388 |
|
Dividends
and distributions payable |
|
|
3,409,593 |
|
|
|
3,073,483 |
|
TOTAL
LIABILITIES |
|
$ |
411,216,475 |
|
|
$ |
315,778,310 |
|
Commitments and contingencies |
|
|
— |
|
|
|
— |
|
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 December 31, 2018 and 2017,
respectively |
|
|
16,100 |
|
|
|
16,100 |
|
7.875% Series C cumulative redeemable perpetual preferred
stock, liquidation preference $25 per share, 1,352,141 and
1,300,000 shares issued and outstanding at December 31, 2018
and 2017, respectively |
|
|
13,521 |
|
|
|
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 December 31, 2018 and 2017, respectively |
|
|
142,093 |
|
|
|
140,788 |
|
Additional paid-in capital |
|
|
147,281,247 |
|
|
|
146,249,339 |
|
Unearned
ESOP shares |
|
|
(4,379,742 |
) |
|
|
(4,633,112 |
) |
Distributions in excess of retained earnings |
|
|
(61,248,553 |
) |
|
|
(48,765,860 |
) |
Total
Sotherly Hotels Inc. stockholders’ equity |
|
|
81,824,666 |
|
|
|
93,020,255 |
|
Noncontrolling interest |
|
|
441,706 |
|
|
|
1,154,775 |
|
TOTAL
EQUITY |
|
|
82,266,372 |
|
|
|
94,175,030 |
|
TOTAL
LIABILITIES AND EQUITY |
|
$ |
493,482,847 |
|
|
$ |
409,953,340 |
|
|
|
SOTHERLY
HOTELS INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms department |
|
$ |
28,751,074 |
|
|
$ |
24,360,641 |
|
|
$ |
120,993,460 |
|
|
$ |
105,727,372 |
|
Food and beverage department |
|
|
10,284,968 |
|
|
|
9,608,761 |
|
|
|
38,134,813 |
|
|
|
34,513,695 |
|
Other operating departments |
|
|
4,429,933 |
|
|
|
4,190,302 |
|
|
|
19,044,848 |
|
|
|
14,025,626 |
|
Total
revenue |
|
|
43,465,975 |
|
|
|
38,159,704 |
|
|
|
178,173,121 |
|
|
|
154,266,693 |
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms department |
|
|
7,583,927 |
|
|
|
6,420,838 |
|
|
|
30,334,309 |
|
|
|
26,673,727 |
|
Food and beverage department |
|
|
7,341,457 |
|
|
|
6,666,781 |
|
|
|
28,090,145 |
|
|
|
24,585,923 |
|
Other operating departments |
|
|
1,549,465 |
|
|
|
782,820 |
|
|
|
6,419,502 |
|
|
|
4,405,515 |
|
Indirect |
|
|
16,744,463 |
|
|
|
14,286,495 |
|
|
|
65,645,500 |
|
|
|
57,612,203 |
|
Total
hotel operating expenses |
|
|
33,219,312 |
|
|
|
28,156,934 |
|
|
|
130,489,456 |
|
|
|
113,277,368 |
|
Depreciation and
amortization |
|
|
5,101,469 |
|
|
|
4,291,071 |
|
|
|
20,884,643 |
|
|
|
16,999,619 |
|
Loss on disposal of
assets |
|
|
515,565 |
|
|
|
1,438,323 |
|
|
|
511,749 |
|
|
|
1,489,892 |
|
Corporate general and
administrative |
|
|
1,614,705 |
|
|
|
1,453,385 |
|
|
|
6,180,962 |
|
|
|
6,335,926 |
|
Total
operating expenses |
|
|
40,451,051 |
|
|
|
35,339,713 |
|
|
|
158,066,810 |
|
|
|
138,102,805 |
|
NET OPERATING
INCOME |
|
|
3,014,924 |
|
|
|
2,819,991 |
|
|
|
20,106,311 |
|
|
|
16,163,888 |
|
Other income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(5,382,604 |
) |
|
|
(3,900,567 |
) |
|
|
(19,953,746 |
) |
|
|
(15,727,628 |
) |
Interest income |
|
|
116,258 |
|
|
|
92,415 |
|
|
|
352,951 |
|
|
|
218,656 |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
(950,261 |
) |
|
|
(753,133 |
) |
|
|
(1,178,348 |
) |
Unrealized gain (loss) on hedging activities |
|
|
(950,928 |
) |
|
|
2,364 |
|
|
|
(808,958 |
) |
|
|
(28,384 |
) |
Gain (loss) on sale of assets |
|
|
— |
|
|
|
(1,574 |
) |
|
|
— |
|
|
|
76,233 |
|
Gain on involuntary conversion of assets |
|
|
19,202 |
|
|
|
1,201,061 |
|
|
|
917,767 |
|
|
|
2,242,876 |
|
Net (loss) income
before income taxes |
|
|
(3,183,148 |
) |
|
|
(736,571 |
) |
|
|
(138,808 |
) |
|
|
1,767,293 |
|
Income tax benefit (provision) |
|
|
412,696 |
|
|
|
(2,319,694 |
) |
|
|
(469,349 |
) |
|
|
(1,737,804 |
) |
Net (loss)
income |
|
|
(2,770,452 |
) |
|
|
(3,056,265 |
) |
|
|
(608,157 |
) |
|
|
29,489 |
|
Less: Net loss attributable to the noncontrolling
interest |
|
|
472,794 |
|
|
|
486,379 |
|
|
|
718,093 |
|
|
|
413,014 |
|
Net (loss) income
attributable to the Company |
|
|
(2,297,658 |
) |
|
|
(2,569,886 |
) |
|
|
109,936 |
|
|
|
442,503 |
|
Distributions to preferred stockholders |
|
|
(1,470,507 |
) |
|
|
(1,366,639 |
) |
|
|
(5,829,914 |
) |
|
|
(3,781,639 |
) |
Net loss
available to common stockholders |
|
$ |
(3,768,165 |
) |
|
$ |
(3,936,525 |
) |
|
$ |
(5,719,978 |
) |
|
$ |
(3,339,136 |
) |
Net loss per
share available to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.28 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.42 |
) |
|
$ |
(0.24 |
) |
Weighted average
number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
13,594,651 |
|
|
|
13,699,225 |
|
|
|
13,517,488 |
|
|
|
13,829,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOTHERLY HOTELS INC.KEY
OPERATING METRICS(unaudited)
The following tables illustrate the key operating metrics for
the three and twelve months ended December 31, 2018 and 2017,
respectively, for the Company’s wholly-owned properties (“actual”
portfolio metrics), as well as the ten wholly-owned properties in
the portfolio that were under the Company’s control during the
three and twelve months ended December 31, 2018 and the
corresponding periods in 2017 (“same-store” portfolio metrics).
Accordingly, the same-store data does not reflect the performance
of the Crowne Plaza Hampton Marina which was sold in February 2017,
our interest in the Hyde Resort & Residences which was acquired
on January 30, 2017, or the Hyatt Centric Arlington which we
acquired in March 2018. The composite portfolio metrics
represent all of the Company’s wholly-owned properties and the
participating condominium hotel rooms at the Hyde Resort &
Residences during the three and twelve months ended December 31,
2018 and the corresponding periods in 2017.
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
Actual Portfolio
Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
% |
|
|
66.3 |
% |
|
|
64.0 |
% |
|
|
|
70.3 |
% |
|
|
70.4 |
% |
ADR |
|
$ |
149.38 |
|
|
$ |
145.71 |
|
|
|
$ |
151.93 |
|
|
$ |
144.03 |
|
RevPAR |
|
$ |
99.02 |
|
|
$ |
93.30 |
|
|
|
$ |
106.77 |
|
|
$ |
101.44 |
|
Same-Store Portfolio
Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
% |
|
|
65.3 |
% |
|
|
64.0 |
% |
|
|
|
69.0 |
% |
|
|
70.6 |
% |
ADR |
|
$ |
146.69 |
|
|
$ |
145.71 |
|
|
|
$ |
148.57 |
|
|
$ |
144.21 |
|
RevPAR |
|
$ |
95.84 |
|
|
$ |
93.30 |
|
|
|
$ |
102.52 |
|
|
$ |
101.88 |
|
Composite Portfolio
Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
% |
|
|
64.7 |
% |
|
|
62.4 |
% |
|
|
|
69.1 |
% |
|
|
68.8 |
% |
ADR |
|
$ |
154.60 |
|
|
$ |
151.21 |
|
|
|
$ |
158.02 |
|
|
$ |
147.77 |
|
RevPAR |
|
$ |
100.10 |
|
|
$ |
94.42 |
|
|
|
$ |
109.20 |
|
|
$ |
101.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOTHERLY HOTELS
INC.SUPPLEMENTAL
DATA(unaudited)
The following tables illustrate the key operating metrics for
the three and twelve months ended December 31, 2018, 2017 and 2016,
respectively, for each of the Company’s wholly-owned properties
during each respective reporting period, irrespective of ownership
percentage during any period.
Occupancy
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2018 |
|
|
Q4 2017 |
|
|
Q4 2016 |
|
|
YTD |
|
|
YTD |
|
|
YTD |
|
Crowne Plaza Tampa WestshoreTampa, Florida |
|
64.7 |
% |
|
|
78.7 |
% |
|
|
67.2 |
% |
|
|
71.9 |
% |
|
|
79.1 |
% |
|
|
74.6 |
% |
The DeSotoSavannah, Georgia |
|
56.5 |
% |
|
|
61.6 |
% |
|
|
63.0 |
% |
|
|
61.6 |
% |
|
|
66.6 |
% |
|
|
71.5 |
% |
DoubleTree by Hilton Jacksonville
RiverfrontJacksonville, Florida |
|
78.2 |
% |
|
|
78.0 |
% |
|
|
72.0 |
% |
|
|
81.6 |
% |
|
|
79.9 |
% |
|
|
77.4 |
% |
DoubleTree by Hilton LaurelLaurel, Maryland |
|
66.4 |
% |
|
|
57.8 |
% |
|
|
52.7 |
% |
|
|
66.8 |
% |
|
|
64.9 |
% |
|
|
60.5 |
% |
DoubleTree by Hilton Philadelphia
AirportPhiladelphia, Pennsylvania |
|
74.0 |
% |
|
|
72.2 |
% |
|
|
67.7 |
% |
|
|
78.2 |
% |
|
|
75.5 |
% |
|
|
77.0 |
% |
DoubleTree by Hilton Raleigh Brownstone –
UniversityRaleigh, North Carolina |
|
71.0 |
% |
|
|
69.9 |
% |
|
|
66.9 |
% |
|
|
74.8 |
% |
|
|
74.2 |
% |
|
|
70.0 |
% |
DoubleTree Resort by Hilton Hollywood
BeachHollywood, Florida |
|
62.6 |
% |
|
|
61.0 |
% |
|
|
73.2 |
% |
|
|
69.2 |
% |
|
|
72.1 |
% |
|
|
79.6 |
% |
Georgian TerraceAtlanta, Georgia |
|
63.9 |
% |
|
|
67.0 |
% |
|
|
70.2 |
% |
|
|
67.9 |
% |
|
|
70.6 |
% |
|
|
70.8 |
% |
Hotel Ballast Wilmington, Tapestry Collection by
HiltonWilmington, North Carolina |
|
64.2 |
% |
|
|
61.8 |
% |
|
|
61.9 |
% |
|
|
63.9 |
% |
|
|
68.3 |
% |
|
|
70.5 |
% |
Hyatt Centric Arlington (1)Arlington,
Virginia |
|
74.8 |
% |
|
|
76.0 |
% |
|
|
65.7 |
% |
|
|
83.8 |
% |
|
|
84.0 |
% |
|
|
79.5 |
% |
Sheraton Louisville RiversideJeffersonville,
Indiana |
|
58.5 |
% |
|
|
48.6 |
% |
|
|
53.8 |
% |
|
|
60.6 |
% |
|
|
63.8 |
% |
|
|
63.1 |
% |
The WhitehallHouston, Texas |
|
54.6 |
% |
|
|
41.2 |
% |
|
|
52.3 |
% |
|
|
57.5 |
% |
|
|
58.1 |
% |
|
|
54.4 |
% |
Hyde Resort & Residences (2)Hollywood Beach,
Florida |
|
39.3 |
% |
|
|
38.4 |
% |
|
N/A |
|
|
|
49.8 |
% |
|
|
37.9 |
% |
|
N/A |
|
All properties weighted
average (1) |
|
65.6 |
% |
|
|
58.4 |
% |
|
|
64.7 |
% |
|
|
70.2 |
% |
|
|
67.4 |
% |
|
|
71.6 |
% |
(1) |
Includes operating results
under previous ownership. Results for periods prior to the
Company’s ownership were provided by prior owners of the hotel and
have not been audited or confirmed by the Company. |
(2) |
Reflects only the
condominium units at the Hyde Resort & Residences participating
in our rental program for the period those units participated in
our rental program. |
|
|
|
|
ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2018 |
|
|
Q4 2017 |
|
|
Q4 2016 |
|
|
YTD |
|
|
YTD |
|
|
YTD |
|
Crowne Plaza Tampa WestshoreTampa, Florida |
$ |
116.92 |
|
|
$ |
116.39 |
|
|
$ |
115.81 |
|
|
$ |
124.72 |
|
|
$ |
119.85 |
|
|
$ |
116.15 |
|
The DeSotoSavannah, Georgia |
$ |
173.37 |
|
|
$ |
157.93 |
|
|
$ |
151.81 |
|
|
$ |
177.19 |
|
|
$ |
159.50 |
|
|
$ |
155.87 |
|
DoubleTree by Hilton Jacksonville
RiverfrontJacksonville, Florida |
$ |
134.76 |
|
|
$ |
140.34 |
|
|
$ |
143.00 |
|
|
$ |
139.84 |
|
|
$ |
132.19 |
|
|
$ |
126.67 |
|
DoubleTree by Hilton LaurelLaurel, Maryland |
$ |
104.12 |
|
|
$ |
104.74 |
|
|
$ |
105.18 |
|
|
$ |
107.98 |
|
|
$ |
107.77 |
|
|
$ |
104.35 |
|
DoubleTree by Hilton Philadelphia
AirportPhiladelphia, Pennsylvania |
$ |
139.61 |
|
|
$ |
138.64 |
|
|
$ |
137.14 |
|
|
$ |
139.25 |
|
|
$ |
135.54 |
|
|
$ |
144.92 |
|
DoubleTree by Hilton Raleigh Brownstone –
UniversityRaleigh, North Carolina |
$ |
134.17 |
|
|
$ |
131.29 |
|
|
$ |
140.87 |
|
|
$ |
134.26 |
|
|
$ |
133.24 |
|
|
$ |
134.74 |
|
DoubleTree Resort by Hilton Hollywood
BeachHollywood, Florida |
$ |
168.37 |
|
|
$ |
167.71 |
|
|
$ |
156.61 |
|
|
$ |
175.18 |
|
|
$ |
170.76 |
|
|
$ |
170.57 |
|
Georgian TerraceAtlanta, Georgia |
$ |
193.65 |
|
|
$ |
186.21 |
|
|
$ |
160.31 |
|
|
$ |
186.28 |
|
|
$ |
175.06 |
|
|
$ |
160.89 |
|
Hotel Ballast Wilmington, Tapestry Collection by
HiltonWilmington, North Carolina |
$ |
158.77 |
|
|
$ |
143.62 |
|
|
$ |
141.37 |
|
|
$ |
153.04 |
|
|
$ |
148.69 |
|
|
$ |
147.14 |
|
Hyatt Centric Arlington (1)Arlington,
Virginia |
$ |
170.31 |
|
|
$ |
173.07 |
|
|
$ |
169.42 |
|
|
$ |
181.38 |
|
|
$ |
176.31 |
|
|
$ |
170.19 |
|
Sheraton Louisville RiversideJeffersonville,
Indiana |
$ |
112.16 |
|
|
$ |
138.65 |
|
|
$ |
125.95 |
|
|
$ |
122.62 |
|
|
$ |
133.86 |
|
|
$ |
137.34 |
|
The WhitehallHouston, Texas |
$ |
147.60 |
|
|
$ |
154.94 |
|
|
$ |
136.22 |
|
|
$ |
146.01 |
|
|
$ |
147.66 |
|
|
$ |
140.70 |
|
Hyde Resort & Residences (2)Hollywood Beach,
Florida |
$ |
299.46 |
|
|
$ |
289.66 |
|
|
N/A |
|
|
$ |
299.30 |
|
|
$ |
282.20 |
|
|
N/A |
|
All properties weighted
average (1) |
$ |
156.15 |
|
|
$ |
153.03 |
|
|
$ |
143.64 |
|
|
$ |
160.11 |
|
|
$ |
150.73 |
|
|
$ |
145.78 |
|
(1) |
Includes operating results
under previous ownership. Results for periods prior to the
Company’s ownership were provided by prior owners of the hotel and
have not been audited or confirmed by the Company. |
(2) |
Reflects only the
condominium units at the Hyde Resort & Residences participating
in our rental program for the period those units participated in
our rental program. |
|
|
|
|
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2018 |
|
|
Q4 2017 |
|
|
Q4 2016 |
|
|
YTD |
|
|
YTD |
|
|
YTD |
|
Crowne Plaza Tampa WestshoreTampa, Florida |
$ |
75.68 |
|
|
$ |
91.57 |
|
|
$ |
77.81 |
|
|
$ |
89.73 |
|
|
$ |
94.81 |
|
|
$ |
86.69 |
|
The DeSotoSavannah, Georgia |
$ |
97.91 |
|
|
$ |
97.22 |
|
|
$ |
95.67 |
|
|
$ |
109.21 |
|
|
$ |
106.15 |
|
|
$ |
111.48 |
|
DoubleTree by Hilton Jacksonville
RiverfrontJacksonville, Florida |
$ |
105.33 |
|
|
$ |
109.41 |
|
|
$ |
102.93 |
|
|
$ |
114.06 |
|
|
$ |
105.56 |
|
|
$ |
98.06 |
|
DoubleTree by Hilton LaurelLaurel, Maryland |
$ |
69.16 |
|
|
$ |
60.57 |
|
|
$ |
55.42 |
|
|
$ |
72.09 |
|
|
$ |
69.91 |
|
|
$ |
63.16 |
|
DoubleTree by Hilton Philadelphia
AirportPhiladelphia, Pennsylvania |
$ |
103.34 |
|
|
$ |
100.09 |
|
|
$ |
92.88 |
|
|
$ |
108.88 |
|
|
$ |
102.32 |
|
|
$ |
111.66 |
|
DoubleTree by Hilton Raleigh Brownstone –
UniversityRaleigh, North Carolina |
$ |
95.29 |
|
|
$ |
91.83 |
|
|
$ |
94.28 |
|
|
$ |
100.36 |
|
|
$ |
98.91 |
|
|
$ |
94.33 |
|
DoubleTree Resort by Hilton Hollywood
BeachHollywood, Florida |
$ |
105.47 |
|
|
$ |
102.34 |
|
|
$ |
114.65 |
|
|
$ |
121.19 |
|
|
$ |
123.12 |
|
|
$ |
135.74 |
|
Georgian TerraceAtlanta, Georgia |
$ |
123.79 |
|
|
$ |
124.75 |
|
|
$ |
112.54 |
|
|
$ |
126.56 |
|
|
$ |
123.66 |
|
|
$ |
113.88 |
|
Hotel Ballast Wilmington, Tapestry Collection by
HiltonWilmington, North Carolina |
$ |
101.94 |
|
|
$ |
88.75 |
|
|
$ |
87.53 |
|
|
$ |
97.75 |
|
|
$ |
101.62 |
|
|
$ |
103.72 |
|
Hyatt Centric Arlington (1)Arlington,
Virginia |
$ |
127.39 |
|
|
$ |
131.46 |
|
|
$ |
111.30 |
|
|
$ |
152.04 |
|
|
$ |
148.13 |
|
|
$ |
135.24 |
|
Sheraton Louisville RiversideJeffersonville,
Indiana |
$ |
65.60 |
|
|
$ |
67.38 |
|
|
$ |
67.82 |
|
|
$ |
74.25 |
|
|
$ |
85.45 |
|
|
$ |
86.60 |
|
The WhitehallHouston, Texas |
$ |
80.55 |
|
|
$ |
63.90 |
|
|
$ |
71.24 |
|
|
$ |
83.95 |
|
|
$ |
85.78 |
|
|
$ |
76.56 |
|
Hyde Resort & Residences (2)Hollywood Beach,
Florida |
$ |
117.83 |
|
|
$ |
111.27 |
|
|
N/A |
|
|
$ |
149.15 |
|
|
$ |
106.84 |
|
|
N/A |
|
All properties weighted
average (1) |
$ |
102.47 |
|
|
$ |
89.44 |
|
|
$ |
92.95 |
|
|
$ |
112.41 |
|
|
$ |
101.62 |
|
|
$ |
104.37 |
|
(1) |
Includes operating results
under previous ownership. Results for periods prior to the
Company’s ownership were provided by prior owners of the hotel and
have not been audited or confirmed by the Company. |
(2) |
Reflects only the
condominium units at the Hyde Resort & Residences participating
in our rental program for the period those units participated in
our rental program. |
|
|
|
|
|
|
SOTHERLY HOTELS
INC.RECONCILIATION OF NET LOSS
TOFFO, Adjusted FFO, EBITDA and Hotel
EBITDA(unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
Net loss
available to common stockholders |
|
$ |
(3,768,165 |
) |
|
$ |
(3,936,525 |
) |
|
|
$ |
(5,719,978 |
) |
|
$ |
(3,339,136 |
) |
Add: Net
loss attributable to noncontrolling interest |
|
|
(472,794 |
) |
|
|
(486,379 |
) |
|
|
|
(718,093 |
) |
|
|
(413,014 |
) |
Depreciation and amortization |
|
|
5,101,469 |
|
|
|
4,291,071 |
|
|
|
|
20,884,643 |
|
|
|
16,999,619 |
|
Gain on
involuntary conversion of assets |
|
|
(19,202 |
) |
|
|
(1,201,061 |
) |
|
|
|
(917,767 |
) |
|
|
(2,242,876 |
) |
Loss on
disposal and/or sale of assets |
|
|
515,565 |
|
|
|
1,439,897 |
|
|
|
|
511,749 |
|
|
|
1,413,659 |
|
FFO available
to common stockholders and unitholders |
|
$ |
1,356,873 |
|
|
$ |
107,003 |
|
|
|
$ |
14,040,554 |
|
|
$ |
12,418,252 |
|
(Increase) decrease in deferred income taxes |
|
|
(430,800 |
) |
|
|
2,277,994 |
|
|
|
|
319,939 |
|
|
|
1,498,222 |
|
Loss on
early extinguishment of debt |
|
|
— |
|
|
|
950,261 |
|
|
|
|
753,133 |
|
|
|
1,178,348 |
|
Loss on
aborted offering costs |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
541,129 |
|
Unrealized (gain) loss on hedging activities |
|
|
950,928 |
|
|
|
(2,364 |
) |
|
|
|
808,958 |
|
|
|
28,384 |
|
Adjusted FFO
available to common stockholders and unitholders |
|
$ |
1,877,001 |
|
|
$ |
3,332,894 |
|
|
|
$ |
15,922,584 |
|
|
$ |
15,664,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding, basic |
|
|
13,594,651 |
|
|
|
13,699,225 |
|
|
|
|
13,517,488 |
|
|
|
13,829,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of non-controlling units |
|
|
1,778,140 |
|
|
|
1,778,140 |
|
|
|
|
1,778,140 |
|
|
|
1,778,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares and units outstanding, basic |
|
|
15,372,791 |
|
|
|
15,477,365 |
|
|
|
|
15,295,628 |
|
|
|
15,607,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per
common share and unit |
|
$ |
0.09 |
|
|
$ |
0.01 |
|
|
|
$ |
0.92 |
|
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
FFO per common share and unit |
|
$ |
0.12 |
|
|
$ |
0.22 |
|
|
|
$ |
1.04 |
|
|
$ |
1.00 |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
Net loss
available to common stockholders |
|
$ |
(3,768,165 |
) |
|
$ |
(3,936,525 |
) |
|
|
$ |
(5,719,978 |
) |
|
$ |
(3,339,136 |
) |
Add: Net
loss attributable to noncontrolling interest |
|
|
(472,794 |
) |
|
|
(486,379 |
) |
|
|
|
(718,093 |
) |
|
|
(413,014 |
) |
Interest
expense |
|
|
5,382,604 |
|
|
|
3,900,567 |
|
|
|
|
19,953,746 |
|
|
|
15,727,628 |
|
Interest
income |
|
|
(116,258 |
) |
|
|
(92,415 |
) |
|
|
|
(352,951 |
) |
|
|
(218,656 |
) |
Income
tax (benefit) provision |
|
|
(412,696 |
) |
|
|
2,319,694 |
|
|
|
|
469,349 |
|
|
|
1,737,804 |
|
Depreciation and amortization |
|
|
5,101,469 |
|
|
|
4,291,071 |
|
|
|
|
20,884,643 |
|
|
|
16,999,619 |
|
Distributions to preferred stockholders |
|
|
1,470,507 |
|
|
|
1,366,639 |
|
|
|
|
5,829,914 |
|
|
|
3,781,639 |
|
EBITDA |
|
|
7,184,667 |
|
|
|
7,362,652 |
|
|
|
|
40,346,630 |
|
|
|
34,275,884 |
|
Loss on
early extinguishment of debt |
|
|
— |
|
|
|
950,261 |
|
|
|
|
753,133 |
|
|
|
1,178,348 |
|
Loss on
disposal and/or sale of assets |
|
|
515,565 |
|
|
|
1,439,897 |
|
|
|
|
511,749 |
|
|
|
1,413,659 |
|
Gain on
involuntary conversion of assets |
|
|
(19,202 |
) |
|
|
(1,201,061 |
) |
|
|
|
(917,767 |
) |
|
|
(2,242,876 |
) |
Subtotal |
|
|
7,681,030 |
|
|
|
8,551,749 |
|
|
|
|
40,693,745 |
|
|
|
34,625,015 |
|
Corporate
general and administrative |
|
|
1,614,705 |
|
|
|
1,453,385 |
|
|
|
|
6,180,962 |
|
|
|
6,335,926 |
|
Unrealized (gain) loss on hedging activities |
|
|
950,928 |
|
|
|
(2,364 |
) |
|
|
|
808,958 |
|
|
|
28,384 |
|
Hotel
EBITDA |
|
$ |
10,246,663 |
|
|
$ |
10,002,770 |
|
|
|
$ |
47,683,665 |
|
|
$ |
40,989,325 |
|
|
|
Reconciliation of Outlook of Net Income to EBITDA and Hotel
EBITDA |
|
|
|
|
|
|
|
|
|
|
2019 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
|
|
Net income |
$ |
1,511 |
|
|
$ |
2,099 |
|
Interest expense |
|
21,255 |
|
|
|
21,255 |
|
Interest income |
|
(380 |
) |
|
|
(380 |
) |
Income tax provision |
|
750 |
|
|
|
1,100 |
|
Depreciation and amortization |
|
20,000 |
|
|
|
20,000 |
|
|
|
|
|
|
|
|
|
EBITDA |
|
43,136 |
|
|
|
44,074 |
|
Corporate general and administrative |
|
6,050 |
|
|
|
6,150 |
|
|
|
|
|
|
|
|
|
Hotel EBITDA |
$ |
49,186 |
|
|
$ |
50,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Outlook of Net Income to FFO and Adjusted
FFO |
|
|
|
|
|
|
|
|
|
|
2019 Guidance |
|
|
Low Range |
|
|
High Range |
|
|
|
|
|
|
|
|
|
Net income |
$ |
1,511 |
|
|
$ |
2,099 |
|
Depreciation and amortization |
|
20,000 |
|
|
|
20,000 |
|
|
|
|
|
|
|
|
|
FFO |
|
21,511 |
|
|
|
22,099 |
|
Distributions to preferred stockholders |
|
(6,142 |
) |
|
|
(6,142 |
) |
|
|
|
|
|
|
|
|
FFO available to common stockholders and
unitholders |
|
15,369 |
|
|
|
15,957 |
|
Decrease in deferred income taxes |
|
570 |
|
|
|
920 |
|
|
|
|
|
|
|
|
|
Adjusted FFO available to common stockholders and
unitholders |
$ |
15,939 |
|
|
$ |
16,877 |
|
|
|
|
|
|
|
|
|
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.
Adjusted FFO
The Company presents adjusted FFO, including adjusted FFO per
share and unit, which adjusts for certain additional items
including changes in deferred income taxes, any unrealized gain
(loss) on hedging instruments or warrant derivative, loan
impairment losses, losses on early extinguishment of debt, aborted
offering costs, loan modification fees, franchise termination
costs, 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. We exclude these items as we believe it allows for
meaningful comparisons between periods and among other REITs and is
more indicative than FFO of the on-going performance of our
business and assets. Our calculation of Adjusted FFO may be
different from similar measures calculated 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) distributions to
preferred stockholders and (15) other operating revenue not related
to our wholly-owned portfolio. We believe this provides a
more complete understanding of the operating results over which our
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 our hotels
and the effectiveness of third-party management companies operating
our business on a property-level basis. The Company’s calculation
of hotel EBITDA may be different from similar measures calculated
by other REITs.
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