Lodgian (LOD) 8-K Unaudited Pro Forma Condensed Consolidated Financial Statements

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated financial information has been prepared assuming that:

1. the following six properties (the “Pool 3 properties”) had been conveyed to the lender (i) at the beginning of the periods presented for the pro forma condensed consolidated statements of operations for the years ended December 31, 2008, 2007 and 2006 as well as for the nine months ended September 30, 2009 and 2008, and (ii) at September 30, 2009 for the pro forma condensed consolidated balance sheet:

• Courtyard by Marriott — Abilene, Texas

• Courtyard by Marriott — Bentonville, Arkansas

• Courtyard by Marriott — Florence, Kentucky

• Holiday Inn Inner Harbor — Baltimore, Maryland

• Crowne Plaza — Houston, Texas

• Farfield Inn by Marriott — Merrimack, New Hampshire

2.

the Crowne Plaza Worcester, MA had been conveyed to the lender (i) at the beginning of the periods presented for the pro forma condensed consolidated statements of operations for the years ended December 31, 2008, 2007 and 2006, as well as for the nine months ended September 30, 2009 and 2008, and (ii) at September 30, 2009 for the pro forma condensed consolidated balance sheet. As disclosed in the Form 8-K dated November 19, 2009, this property was transferred to a receiver appointed pursuant to a court order approved by the United States District Court for the District of Massachusetts.

3.

the Holiday Inn Express Palm Desert, CA had been sold (i) at the beginning of the periods presented for the pro forma condensed consolidated statements of operations for the years ended December 31, 2008, 2007 and 2006, as well as for the nine months ended September 30, 2009 and 2008, and (ii) at September 30, 2009 for the pro forma condensed consolidated balance sheet. Subsequent to September 30, 2009, the Company reclassified this property from held for use to held for sale.

The unaudited pro forma condensed consolidated statements of operations do not include adjustments for the gain on deconsolidation of the Pool 3 Properties as this is a non-recurring transaction directly attributable to the disposition of the Pool 3 Properties.

In accordance with the terms of the franchise agreements associated with the Pool 3 Properties, the Company could be required to pay liquidated damages to the franchisors upon surrender of control of the Pool 3 Properties. The estimated potential liquidated damages totaled $5.9 million as of December 31, 2009. This amount is not reflected in the pro forma condensed consolidated financial statements presented since the recognition criteria for contingencies as established by U.S. GAAP had not been met.

The unaudited pro forma condensed consolidated financial statements have been prepared by management for illustrative purposes only in accordance with Article 11 of SEC Regulation S-X and are not necessarily indicative of the consolidated financial position or results of operations in future periods or the results that actually would have been realized had the Properties been conveyed to the lender during the specified periods. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with Lodgian, Inc.’s historical consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2008 and its Form 10-Q for the nine months ended September 30, 2009.

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2008

							Pro Forma			Pro Forma
				Pro Forma			adjustments			adjustments
	Lodgian, Inc.			adjustments			related to the			related to the
	For the Year			related to the			Crowne			Holiday Inn
	Ended			Pool 3			Plaza			Express Palm
	December 31, 2008			Properties			Worcester, MA			Desert, CA			Pro Forma
				(unaudited in thousands, except per share data)
Revenues:
Rooms	$	178,623		$	(28,381	)	$	(5,192	)	$	(2,678	)	$	142,372
Food and beverage		53,543			(5,223	)		(3,801	)		(1	)		44,518
Other		8,262			(1,392	)		(517	)		(44	)		6,309
Total revenues		240,428			(34,996	)		(9,510	)		(2,723	)		193,199
Direct operating expenses:
Rooms		46,588			(7,044	)		(1,456	)		(802	)		37,286
Food and beverage		36,755			(3,648	)		(2,435	)		(27	)		30,645
Other		5,806			(1,053	)		(281	)		(58	)		4,414
Total direct operating expenses		89,149			(11,745	)		(4,172	)		(887	)		72,345
		151,279			(23,251	)		(5,338	)		(1,836	)		120,854
Other operating expenses:
Other hotel operating costs		69,960			(10,050	)		(2,762	)		(978	)		56,170
Property and other taxes, insurance, and leases		16,561			(3,313	)		(656	)		(137	)		12,455
Corporate and other		16,805			316			(888	)		(8	)		16,225
Casualty losses, net		1,095			(1,057	)		—			—			38
Depreciation and amortization		31,930			(3,952	)		(237	)		(387	)		27,354
Impairment of long-lived assets		9,468			(718	)		(4,875	)		(81	)		3,794
Total other operating expenses		145,819			(18,774	)		(9,418	)		(1,591	)		116,036
Operating income		5,460			(4,477	)		4,080			(245	)		4,818
Other income (expenses):
Interest income and other		1,054			(2	)		—			—			1,052
Interest expense		(19,345	)		3,456			1,063			379			(14,447	)
Loss before income taxes		(12,831	)		(1,023	)		5,143			134			(8,577	)
Provision for income taxes — continuing operations		(80	)		—			—			—			(80	)
Loss from continuing operations		(12,911	)		(1,023	)		5,143			134			(8,657	)
Basic and diluted net loss per share from continuing operations	$	(0.59	)	$	(0.05	)	$	0.24		$	0.01		$	(0.40	)
Basic and diluted weighted average shares from continuing operations		21,774			—			—			—			21,774

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2007

							Pro Forma			Pro Forma
				Pro Forma			adjustments			adjustments
	Lodgian, Inc.			adjustments			related to the			related to the
	For the Year			related to the			Crowne			Holiday Inn
	Ended			Pool 3			Plaza			Express Palm
	December 31, 2007			Properties			Worcester, MA			Desert, CA			Pro Forma
				(unaudited in thousands, except per share data)
Revenues:
Rooms	$	179,716		$	(28,723	)	$	(5,351	)	$	(2,969	)	$	142,673
Food and beverage		55,089			(5,731	)		(3,857	)		—			45,501
Other		7,753			(1,311	)		(460	)		(45	)		5,937
Total revenues		242,558			(35,765	)		(9,668	)		(3,014	)		194,111
Direct operating expenses:
Rooms		44,833			(6,786	)		(1,474	)		(794	)		35,779
Food and beverage		37,239			(3,838	)		(2,477	)		—			30,924
Other		5,503			(979	)		(238	)		(50	)		4,236
Total direct operating expenses		87,575			(11,603	)		(4,189	)		(844	)		70,939
		154,983			(24,162	)		(5,479	)		(2,170	)		123,172
Other operating expenses:
Other hotel operating costs		68,623			(10,093	)		(2,879	)		(924	)		54,727
Property and other taxes, insurance, and leases		17,662			(3,143	)		(710	)		(182	)		13,627
Corporate and other		21,391			324			(392	)		—			21,323
Casualty gains, net		(1,867	)		—			—			—			(1,867	)
Restructuring		1,232			—			—			—			1,232
Depreciation and amortization		28,765			(3,525	)		(647	)		(383	)		24,210
Impairment of long-lived assets		1,622			(229	)		(462	)		(6	)		925
Total other operating expenses		137,428			(16,666	)		(5,090	)		(1,495	)		114,177
Operating income		17,555			(7,496	)		(389	)		(675	)		8,995
Other income (expenses):
Interest income and other		3,944			—			—			—			3,944
Interest expense		(23,172	)		3,586			1,078			384			(18,124	)
Loss on debt extinguishment		(3,330	)		—			—			—			(3,330	)
Loss before income taxes		(5,003	)		(3,910	)		689			(291	)		(8,515	)
Provision for income taxes — continuing operations		(157	)		—			—			—			(157	)
Loss from continuing operations		(5,160	)		(3,910	)		689			(291	)		(8,672	)
Basic and diluted net loss per share from continuing operations	$	(0.21	)	$	(0.16	)	$	0.03		$	(0.01	)	$	(0.36	)
Basic and diluted weighted average shares from continuing operations		24,292			—			—			—			24,292

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2006

							Pro Forma			Pro Forma
	Lodgian, Inc.			Pro Forma			adjustments			adjustments
	For the Year			adjustments			related to the			related to the
	Ended			related to the			Crowne			Holiday Inn
	December 31,			Pool 3			Plaza Worcester,			Express Palm
	2006			Properties			MA			Desert, CA			Pro Forma
				(unaudited in thousands, except per share data)
Revenues:
Rooms	$	170,764		$	(27,305	)	$	(5,929	)	$	(2,952	)	$	134,578
Food and beverage		49,807			(5,248	)		(3,539	)		—			41,020
Other		7,064			(1,184	)		(337	)		(47	)		5,496
Total revenues		227,635			(33,737	)		(9,805	)		(2,999	)		181,094
Direct operating expenses:
Rooms		43,329			(6,603	)		(1,517	)		(832	)		34,377
Food and beverage		34,861			(3,685	)		(2,260	)		—			28,916
Other		5,402			(931	)		(180	)		(54	)		4,237
Total direct operating expenses		83,592			(11,219	)		(3,957	)		(886	)		67,530
		144,043			(22,518	)		(5,848	)		(2,113	)		113,564
Other operating expenses:
Other hotel operating costs		63,467			(9,467	)		(2,821	)		(939	)		50,240
Property and other taxes, insurance, and leases		17,383			(3,127	)		(633	)		(169	)		13,454
Corporate and other		20,693			364			(391	)		—			20,666
Casualty gains, net		(2,985	)		—			—			—			(2,985	)
Depreciation and amortization		27,414			(3,532	)		(715	)		(366	)		22,801
Impairment of long-lived assets		632			(5	)		—			—			627
Total other operating expenses		126,604			(15,767	)		(4,560	)		(1,474	)		104,803
Operating income		17,439			(6,751	)		(1,288	)		(639	)		8,761
Other income (expenses):
Business interruption proceeds		3,094			—			—			—			3,094
Interest income and other		2,558			1			—			—			2,559
Interest expense		(21,970	)		3,686			1,465			362			(16,457	)
Income before income taxes		1,121			(3,064	)		177			(277	)		(2,043	)
Provision for income taxes — continuing operations		(11,854	)		—			—			—			(11,854	)
Loss from continuing operations		(10,733	)		(3,064	)		177			(277	)		(13,897	)
Basic and diluted net loss per share from continuing operations	$	(0.44	)	$	(0.12	)	$	0.01		$	(0.01	)	$	(0.56	)
Basic and diluted weighted average shares from continuing operations		24,617			—			—			—			24,617

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2009

	Lodgian, Inc.				Pro Forma adjustments			Pro Forma adjustments			Pro Forma adjustments
	For the Nine Months				related to the Pool 3			related to the Crowne			related to the Holiday Inn
	Ended September 30, 2009				Properties			Plaza Worcester, MA			Express Palm Desert, CA			Pro Forma
				(unaudited in thousands, except per share data)
Revenues:
Rooms	$	114,415			$	(15,737	)	$	(3,073	)	$	(1,706	)	$	93,899
Food and beverage		33,852				(2,875	)		(2,088	)		(2	)		28,887
Other		5,689				(980	)		(335	)		(24	)		4,350
Total revenues		153,956				(19,592	)		(5,496	)		(1,732	)		127,136
Direct operating expenses:
Rooms		31,818				(4,511	)		(996	)		(614	)		25,697
Food and beverage		23,706				(2,159	)		(1,485	)		—			20,062
Other		3,881				(687	)		(163	)		(36	)		2,995
Total direct operating expenses		59,405				(7,357	)		(2,644	)		(650	)		48,754
		94,551				(12,235	)		(2,852	)		(1,082	)		78,382
Other operating expenses:
Other hotel operating costs		46,229				(6,607	)		(1,768	)		(660	)		37,194
Property and other taxes, insurance, and leases		12,829				(2,608	)		(505	)		(108	)		9,608
Corporate and other		11,458				49			(228	)		(3	)		11,276
Casualty losses, net		133				(12	)		(15	)		—			106
Depreciation and amortization		26,067				(3,497	)		(594	)		(325	)		21,651
Impairment of long-lived assets		35,349				(29,495	)		(4,996	)		(5	)		853
Total other operating expenses		132,065				(42,170	)		(8,106	)		(1,101	)		80,688
Operating loss		(37,514	)			29,935			5,254			19			(2,306	)
Other income (expenses):
Interest income and other		98				1			—			—			99
Interest expense		(10,598	)			2,442			768			279			(7,109	)
Loss before income taxes and noncontrolling interest		(48,014	)			32,378			6,022			298			(9,316	)
Provision for income taxes — continuing operations		(29	)			—			—			—			(29	)
Loss from continuing operations		(48,043	)			32,378			6,022			298			(9,345	)
Basic and diluted net loss per share from continuing operations	$	(2.25	)		$	1.52		$	0.28		$	0.01		$	(0.44	)
Basic and diluted weighted average shares from continuing operations		21,313				—			—			—			21,313

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2008

	Lodgian, Inc.			Pro Forma adjustments			Pro Forma adjustments			Pro Forma adjustments
	For the Nine Months			related to the Pool 3			related to the Crowne			related to the Holiday Inn
	Ended September 30, 2008			Properties			Plaza Worcester, MA			Express Palm Desert, CA			Pro Forma
				(unaudited in thousands, except per share data)
Revenues:
Rooms	$	139,891		$	(22,125	)	$	(3,842	)	$	(2,154	)	$	111,770
Food and beverage		40,011			(3,893	)		(2,776	)		(1	)		33,341
Other		6,376			(1,097	)		(392	)		(34	)		4,853
Total revenues		186,278			(27,115	)		(7,010	)		(2,189	)		149,964
Direct operating expenses:
Rooms		35,562			(5,405	)		(1,088	)		(614	)		28,455
Food and beverage		27,740			(2,766	)		(1,792	)		(19	)		23,163
Other		4,473			(836	)		(215	)		(43	)		3,379
Total direct operating expenses		67,775			(9,007	)		(3,095	)		(676	)		54,997
		118,503			(18,108	)		(3,915	)		(1,513	)		94,967
Other operating expenses:
Other hotel operating costs		53,885			(7,664	)		(2,038	)		(773	)		43,410
Property and other taxes, insurance, and leases		12,338			(2,493	)		(496	)		(102	)		9,247
Corporate and other		13,742			249			(788	)		(2	)		13,201
Casualty gains, net		(57	)		(106	)		—			—			(163	)
Depreciation and amortization		23,578			(2,910	)		(94	)		(296	)		20,278
Impairment of long-lived assets		9,114			(636	)		(4,849	)		(12	)		3,617
Total other operating expenses		112,600			(13,560	)		(8,265	)		(1,185	)		89,590
Operating income		5,903			(4,548	)		4,350			(328	)		5,377
Other income (expenses):
Interest income and other		907			(1	)		—			—			906
Interest expense		(14,768	)		2,629			797			285			(11,057	)
Loss before income taxes and noncontrolling interest		(7,958	)		(1,920	)		5,147			(43	)		(4,774	)
Provision for income taxes — continuing operations		(6	)		—			—			—			(6	)
Loss from continuing operations		(7,964	)		(1,920	)		5,147			(43	)		(4,780	)
Basic and diluted net loss per share from continuing operations	$	(0.36	)	$	(0.09	)	$	0.23		$	—		$	(0.22	)
Basic and diluted weighted average shares from continuing operations		21,944			—			—			—			21,944

Lodgian, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2009

				Pro Forma adjustments			Pro Forma adjustments			Pro Forma adjustments
	Lodgian, Inc. as of			related to the Pool 3			related to the Crowne			related to the Holiday
	September 30, 2009			Properties			Plaza Worcester, MA			Inn Palm Desert, CA			Pro Forma
			(Unaudited in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	24,647		$	(320	)	$	(205	)		(3	)	$	24,119
Cash, restricted		9,419			(2,127	)		—			—			7,292
Accounts receivable (net of allowances)		7,035			(746	)		(225	)		(23	)		6,041
Inventories		3,100			(399	)		(129	)		(19	)		2,553
Prepaid expenses and other current assets		15,342			(2,467	)		(352	)		(503	)		12,020
Assets held for sale		4,554			—			—			—			4,554
Total current assets		64,097			(6,059	)		(911	)		(548	)		56,579
Property and equipment, net		403,815			(46,408	)		(9,627	)		(5,404	)		342,376
Deposits for capital expenditures		5,586			(1,032	)		(103	)		(32	)		4,419
Other assets		4,893			(362	)		(153	)		(82	)		4,296
	$	478,391		$	(53,861	)	$	(10,794	)	$	(6,066	)	$	407,670
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,152		$	(621	)	$	(177	)	$	(39	)	$	4,315
Other accrued liabilities		23,674			(2,089	)		(380	)		(100	)		21,105
Advance deposits		1,619			(184	)		(98	)		(34	)		1,303
Current portion of long-term liabilities		102,614			(45,513	)		(16,270	)		(130	)		40,701
Liabilities related to assets held for sale		607			—			—			—			607
Total current liabilities		133,666			(48,407	)		(16,925	)		(303	)		68,031
Long-term liabilities		208,935			(7	)		—			(5,550	)		203,378
Total liabilities		342,601			(48,414	)		(16,925	)		(5,853	)		271,409
Commitments and contingencies
Stockholders’ equity:
Common stock, $.01 par value, 60,000,000 shares authorized; 25,148,819 issued at September 30, 2009		252			—			—			—			252
Additional paid-in capital		331,601			—			—			—			331,601
Accumulated deficit		(155,344	)		(5,447	)		6,131			(213	)		(154,873	)
Accumulated other comprehensive income		64			—			—			—			64
Treasury stock, at cost, 3,827,603 at September 30, 2009		(39,692	)		—			—			—			(39,692	)
Total stockholders’ equity attributable to common stock		136,881			(5,447	)		6,131			(213	)		137,352
Noncontrolling interest		(1,091	)		—			—			—			(1,091	)
Total equity		135,790			(5,447	)		6,131			(213	)		136,261
	$	478,391		$	(53,861	)	$	(10,794	)	$	(6,066	)	$	407,670