Red Lion Hotels 8-K RLH Corporation Closes Sale of

Exhibit 99.2

Unaudited Proforma Financial Statements

The following Unaudited Pro Forma Financial Statements are based on Red Lion Hotels Corporation’s (the “Company’s”) historical consolidated results of operations and financial position, adjusted to give effect to the asset sales described in Item 2.01 of this Form8-K, as if they had been completed on March 31, 2018 with respect to the pro forma unaudited condensed balance sheet and as of January 1, 2017 with respect to the pro forma unaudited condensed statements of operations. This transaction does not represent discontinued operations under ASC 205, Presentation of Financial Statements.

The Unaudited Pro Forma Financial Statements and the accompanying notes should be read together with the Company’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2017, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form10-K for the year ended December 31, 2017 (“Annual Report”). The Unaudited Pro Forma Financial Statements may differ materially from the future financial position or results of operations due to a number of factors described in “Risk Factors” under Item 1A of Part 1 of our Annual Report and “Forward-Looking Statements” under Item 1 of Part 1 of our Annual Report.

Red Lion Hotels Corporation

Unaudited Pro Forma Condensed Consolidated Balance Sheet

March 31, 2018

	March 31, 2018			Less: Bend and Post Falls Hotel Assets(q)			Less: Port Angeles Hotel Assets Sold			Add: Pro Forma Adjustments			Pro Forma
ASSETS		(in thousands)
Current assets:
Cash and cash equivalents	$	25,426		$	2,380		$	4,830	(a)	$	645	(f)	$	30,878
											(3,178	)(h)
											775	(g)
Restricted cash		13,681			(585	)					(775	)(g)		12,321
Accounts receivable, net		12,957			(98	)					(91	)(f)		12,768
Accounts receivable from related parties		1,870			(29	)								1,841
Notes receivable, net		1,239												1,239
Inventories		406									(44	)(f)		362
Prepaid expenses and other		5,911			(67	)					(60	)(f)		5,784
Assets held for sale		12,446			(12,446	)								0
Total current assets		73,936			(10,845	)		4,830			(2,728	)		65,193
Property and equipment, net		155,849						(7,778	)(b)					148,071
Goodwill		9,404												9,404
Intangible assets		50,255												50,255
Other assets, net		4,858												4,858
Total assets	$	294,302		$	(10,845	)	$	(2,948	)	$	(2,728	)	$	277,781
LIABILITIES
Current liabilities:
Accounts payable	$	5,667		$	(60	)				$	(38	)(f)		5,569
Accrued payroll and related benefits		3,113			(64	)					(47	)(f)		3,002
Other accrued liabilities		5,551			(366	)		(34	)(c)		(136	)(f)		5,015
Long-term debt, due within one year		33,924			(10,509	)		(14,477	)(d)					8,938
Contingent consideration for acquisition due to related party, due within one year		5,446												5,446
Total current liabilities		53,701			(10,998	)		(14,511	)		(221	)		27,971
Long-term debt, due after one year, net of debt issuance		39,593												39,593
Contingent consideration for acquisition due to related party, due after one year														—
Deferred income and other long term liabilities		1,407			(0	)								1,407
Deferred income taxes		2,301												2,301
Total liabilities		97,002			(10,998	)		(14,511	)		(221	)		71,272
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Red Lion Hotels Corporation stockholders’ equity Preferred stock - 5,000,000 shares authorized; $0.01 par value; no shares issued or outstanding		—
Common stock - 50,000,000 shares authorized; $0.01 par value: 24,125,600 shares issued and outstanding		241												241
Additionalpaid-in capital, common stock		178,318												178,318
Accumulated deficit		(13,390	)		1,902			11,563	(e)		(104	)(e)		(29	)
Total Red Lion Hotels Corporation stockholders’		165,169			1,902			11,563			(104	)		178,530
Noncontrolling interest		32,131			(1,749	)					(2,403	)(i)		27,979
Total stockholders’ equity		197,300			153			11,563			(2,507	)		206,509
Total liabilities and stockholders’ equity	$	294,302		$	(10,845	)	$	(2,948	)	$	(2,728	)	$	277,781

Red Lion Hotels Corporation

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For Year Ended December 31, 2017

	As Reported			Less: Redding, Eureka, Boise, Richland, Pasco, Bend, and Post Falls Hotel Assets(m)			Less: Port Angeles Hotel Asset Sold			Pro Forma
	(in thousands)
Revenue:
Company operated hotels	$	119,186		$	(33,528	)	$	(7,230	)(k)	$	78,428
Other revenues from managed properties		3,914									3,914
Franchised hotels		48,559			2,887			662	(l)		52,108
Other		267									267
Total revenues		171,926			(30,641	)		(6,568	)		134,717
Operating expenses:
Company operated hotels		91,622			(27,018	)		(4,365	)(k)		60,239
Other costs from managed properties		3,914									3,914
Franchised hotels		34,794			1,758			403	(n)		36,954
Other		(9	)								(9	)
Depreciation and amortization		18,824			(3,444	)		(549	)(k)		14,831
Hotel facility and land lease		4,806			(70	)					4,736
Gain on asset dispositions, net		(449	)		5						(444	)
General and administrative expenses		15,792			1,142			177	(o)		17,110
Acquisition and integration costs		1,529									1,529
Total operating expenses		170,823			(27,627	)		(4,334	)		138,862
Operating income (loss)		1,103			(3,014	)		(2,234	)		(4,145	)
Other income (expense):
Interest expense		(8,252	)		1,714			542	(p)		(5,996	)
Other income, net		818									818
Total other income (expense)		(7,434	)		1,714			542			(5,178	)
Income (loss) from continuing operations before taxes		(6,331	)		(1,301	)		(1,691	)		(9,323	)
Income tax expense		(4,662	)								(4,662	)
Net income (loss) from continuing operations		(1,669	)		(1,301	)		(1,691	)		(4,661	)
Net (income) loss attributable to noncontrolling interest		2,069			(110	)		644	(i)		2,602
Net income (loss) attributable to RLH Corporation from continuing operations	$	400		$	(1,411	)	$	(1,048	)	$	(2,058	)
Earnings (loss) per share - basic
Income (loss) from continuing operations attributable to RLH Corporation	$	0.01								$	(0.09	)
Earnings (loss) per share - diluted
Income (loss) from continuing operations attributable to RLH Corporation	$	0.01								$	(0.09	)
Weighted average shares - basic		23,669									23,699
Weighted average shares - diluted		24,253									23,699

Red Lion Hotels Corporation

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For Three Months March 31, 2018

	As Reported			Less: Redding, Eureka, Boise, Richland, Pasco, Bend, and Post Falls Hotel Assets(m)			Less: Port Angeles Hotel Asset Sold			Pro Forma
	(in thousands)
Revenue:
Company operated hotels	$	22,003		$	(3,924	)	$	(1,018	)(k)	$	17,061
Other revenues from managed properties		893									893
Franchised hotels		10,123			221			62	(l)		10,406
Other		20									20
Total revenues		33,039			(3,703	)		(956	)		28,380
Operating expenses:
Company operated hotels		19,547			(3,986	)		(834	)(k)		14,728
Other costs from managed properties		893									893
Franchised hotels		7,901			80			22	(n)		8,004
Other		(7	)								(7	)
Depreciation and amortization		4,392						(130	)(k)		4,262
Hotel facility and land lease		1,204			(17	)					1,187
Gain on asset dispositions, net		(14,043	)		13,926	(i)					(117	)
General and administrative expenses		3,486			221			46	(o)		3,753
Acquisition and integration costs		104						—			104
Total operating expenses		23,477			10,224			(895	)		32,807
Operating income (loss)		9,562			(13,927	)		(61	)		(4,426	)
Other income (expense):
Interest expense		(2,247	)		694			114	(p)		(1,439	)
Other income, net		158									158
Total other income (expense)		(2,089	)		694			114			(1,281	)
Income (loss) from continuing operations before taxes		7,473			(13,233	)		53			(5,707	)
Income tax expense		135									135
Net income (loss) from continuing operations		7,338			(13,233	)		53			(5,842	)
Net (income) loss attributable to noncontrolling interest		(4,750	)		5,833			(50	)(i)		1,033
Net income (loss) attributable to RLH Corporation from continuing operations	$	2,588		$	(7,400	)	$	3		$	(4,810	)
Earnings (loss) per share - basic
Income (loss) from continuing operations attributable to RLH Corporation	$	0.11								$	(0.20	)
Earnings (loss) per share - diluted
Income (loss) from continuing operations attributable to RLH Corporation	$	0.10								$	(0.20	)
Weighted average shares - basic		24,101									24,101
Weighted average shares - diluted		25,166									24,101

Notes to Unaudited Pro Forma Condensed Financial Information

Note 1 — Basis of presentation

The historical consolidated financial statements have been adjusted in the unaudited pro forma condensed financial statements to give effect to pro forma events that are (1) directly attributable to the sale of the asset, (2) factually supportable and (3) with respect to the unaudited pro forma condensed statements of operations, expected to have a continuing impact on the results following the sale of the assets. These proforma financial statements also reflect the impact of the sales of hotels in Eureka, CA, Redding, CA, Boise, ID, Post Falls, ID, Richland, WA Pasco, WA and Bend, OR which were previously reported.

Note 2 — The transaction

On July 9, 2018 RL Port Angeles, LLC completed the sale of the Red Lion Hotel Port Angeles in Port Angeles, Washington to BGP PA, LLC, an Oregon limited liability company (the “Purchaser”). The purchase price for the hotel was $19.5 million, which was paid in cash at closing.

At closing, an affiliate of the Purchaser entered into a franchise agreement with Red Lion Hotels Franchising, Inc., a wholly owned subsidiary of Red Lion Hotels Corporation, to continue to operate the hotel under the Red Lion^® brand. The franchise agreement provides for a 10 year term and the payment of monthly royalty and program fees equal to a percentage of the hotel’s gross room revenue. Early termination of the franchise agreement by Red Lion Franchising upon default of the franchisee, or termination of the agreement by the franchisee without cause, will require the franchisee to pay a termination fee.

RL Port Angeles, LLC is a wholly owned subsidiary of RL Venture, LLC. RL Venture, LLC is a variable interest entity in which Red Lion Hotels Corporation holds a 55% interest, and therefore the registrant consolidates the assets, liabilities and results of operations of this entity.

Note 3 — Pro forma adjustments

The following adjustments have been reflected in the unaudited pro forma condensed financial information:

(a) Reflects the cash from the sale of assets less selling costs and repayment of debt.

(b) Reflects the basis of the assets sold.

(c) Reflects the capital leases assumed by the purchaser.

(d) Represents the related debt payment made at the closing of the sale of the assets.

(e) Reflects the gain on sale and/or settlement of the assets.

(f) Reflects the settlement of all other assets and liabilities related to the Port Angeles assets sold.

(g) Represents the release of restricted cash related to the assets sold.

(h) Represents the proforma distribution of cash to the noncontrolling interest.

(i) Reflects the removal of the noncontrolling interest portion of the transaction.

(j) Removes the gain on the sales of the hotels in Eureka, CA, Redding, CA, Boise, ID, Richland, WA, and Pasco, WA which were reported in the three months ended March 31, 2018.

(k) Reflects the elimination of direct revenues and expenses related to the Port Angeles assets sold.

(l) Represents the franchise income that would have been received under the existing intercompany franchise agreement. Does not represent the impact of the franchise agreements with the new owners of the assets.

(m) Impact of the sales of hotels in Eureka, CA, Redding, CA, Boise, ID, Post Falls, ID, Richland, WA, Pasco, WA and Bend, OR which were previously reported.

(n) Represents the marketing and other costs to support the franchise income that would have been received under the existing intercompany franchise agreement. Does not represent the impact of the franchise agreements with the new owners of the assets.

(o) Reflects the corporate and administrative expenses which were previously allocated to the assets sold.

(p) Reflects interest expense on allocated debt related to assets sold.

(q) Reflects the sales of the hotels in Bend, OR and Post Falls, ID as these transactions closed after March 31, 2018.

(d) Exhibits.