-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Hdr/gaDdJE12BLa/ACvg5c+txHO7cCXKRgZ6a6O+0Tv92Li7NDvDrMKjg4jGttA5 P2fI+XXICYKQR61U7RTmrQ== 0000914121-99-000192.txt : 19990301 0000914121-99-000192.hdr.sgml : 19990301 ACCESSION NUMBER: 0000914121-99-000192 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981211 ITEM INFORMATION: FILED AS OF DATE: 19990226 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LODGIAN INC CENTRAL INDEX KEY: 0001066138 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 522093696 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-14537 FILM NUMBER: 99551971 BUSINESS ADDRESS: STREET 1: 3445 PEACHTREE ROAD N E SUITE 700 CITY: ATLANTA STATE: CA ZIP: 30326 BUSINESS PHONE: 5616899970 MAIL ADDRESS: STREET 1: 3445 PEACHTREE ROAD N E SUITE 700 CITY: ATLANTA STATE: CA ZIP: 30326 8-K/A 1 CURRENT REPORT ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K/A AMENDMENT NO. 1 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT: February 26, 1999 DATE OF EARLIEST EVENT REPORTED: December 11, 1998 LODGIAN, INC. - -------------------------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 001-14537 52-2093696 - -------------------------------------------------------------------------------- (STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.) 3445 Peachtree Road N.E., Suite 700, Atlanta, Georgia 30326 - -------------------------------------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (404) 364-9400 Not Applicable - -------------------------------------------------------------------------------- (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) ================================================================================ ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. Item 7 is amended to include the pro forma financial information required by Article 11 of Regulation S-X as follows: (b) Pro Forma Financial Information. The pro forma financial information of the Registrant is attached as Exhibit A to this Form 8-K/A. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LODGIAN, INC. By: /s/ Robert S. Cole -------------------------- Robert S. Cole Chief Executive Officer Dated: February 26, 1999 EXHIBIT A LODGIAN, INC. UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS The following unaudited pro forma combined financial statements of Lodgian give effect to the Financing Agreement and Merger with Servico acquiring Impac using the purchase method of accounting, after giving effect to the pro forma adjustments described in the accompanying notes in the pro forma financial statements and accompanying notes thereto of Servico and Impac (excluding the Financing Agreement and Merger). The unaudited pro forma combined consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and should be read in conjunction with the historical consolidated financial statements of Servico and Impac including the notes thereto, the pro forma financial statements of Servico and Impac (excluding the Debt Refinancing and Merger) and other financial information of Servico and Impac incorporated by reference in this document. The accompanying unaudited pro forma information is presented for illustrative purposes only and is based on certain assumptions and adjustments described in the pro forma financial statements of Servico and Impac (excluding the Financing Agreement and Merger). Such information is not necessarily indicative of the operating results or financial position that would have occurred had the Financing Agreement or the Merger been consummated at the dates indicated, nor is it necessarily indicative of future operating results or financial position of the combined companies. No effect has been given in the unaudited pro forma combined financial statements for operating and synergistic benefits that may be realized through the Merger. In addition, the unaudited pro forma combined consolidated financial statements do not reflect any of the initial, non-recurring costs associated with the Merger, which costs are not currently estimable. The accompanying unaudited pro forma combined consolidated balance sheet gives effect to the Financing Agreement and the Merger as if they had occurred on September 30, 1998, combining the historical consolidated balance sheet of Servico and the historical balance sheet of Impac at September 30, 1998. The accompanying unaudited pro forma combined consolidated statements of operations give effect to the Financing Agreement and Merger as if they had occurred on January 1, 1997. THE UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS DO NOT PURPORT TO REPRESENT WHAT THE FINANCIAL POSITION OR RESULTS OF OPERATIONS OF LODGIAN, SERVICO, OR IMPAC WOULD ACTUALLY HAVE BEEN IF THE OFFERING OR THE MERGER HAD IN FACT OCCURRED ON THE DATES INDICATED OR TO PROJECT THE FINANCIAL POSITION OR RESULTS OF OPERATIONS FOR ANY FUTURE DATE OR PERIOD. LODGIAN, INC. CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 1998 (IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL HISTORICAL PRO FORMA PRO FORMA SERVICO IMPAC ADJUSTMENTS (A) LODGIAN ------------------------------------------------------------------------ Assets Current Assets: Cash and cash equivalents $ 26,257 $ 1,010 $ 14,426 B $ 41,693 Cash restricted 0 4,687 0 4,687 Accounts Receivable, net of allowances 16,150 9,821 0 25,971 Inventories 4,931 629 1,938 C 7,498 Other Current Assets 14,816 4,093 8,666 B 27,575 ------------------------------------------------------------------------ Total Current Assets 62,154 20,240 25,030 107,424 Property and equipment, net 681,439 454,204 112,653 B,C 1,248,296 Deposits for capital expenditures 12,553 0 23,000 B 35,553 Other assets, net 30,502 13,499 5,997 B 49,998 ------------------------------------------------------------------------ $786,648 $487,943 $166,680 $1,441,271 ======================================================================== Liabilities and stockholder's equity Current Liabilities Accounts payable $ 11,531 $ 27,702 ($737)B $ 38,496 Accrued liabilities 34,303 13,392 (154)B,C 47,541 Current portion of long-term obligations 4,511 0 0 4,511 ------------------------------------------------------------------------ Total current liabilities 50,345 41,094 (891) 90,548 Long-term obligations, less current portion 330,062 419,754 80,619 B 830,435 Deferred income taxes 15,213 0 43,476 C 58,689 Commitments and contingencies Minority interests - other 14,763 171 0 14,934 Minority interest - preferred redeemable securities 175,000 0 0 175,000 Stockholder's equity: Common Stock, $.01 par value -- 25,000,000 shares authorized; 21,074,872 shares and 20,974,852 shares issued and outstanding at March 31, 1998 and December 31, 1997, respectively 184 0 80 C 264 Additional paid in capital 177,292 0 70,320 C 247,612 Retained earnings 23,789 0 0 23,789 Members' equity 0 26,924 (26,924)C 0 ------------------------------------------------------------------------ Total stockholder's equity 201,265 26,924 43,476 271,665 ------------------------------------------------------------------------ $786,648 $487,943 $166,680 $1,441,271 ========================================================================
LODGIAN, INC. UNAUDITED PRO FORMA STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS, EXCEPT SHARE DATA)
PRO FORMA PRO FORMA PRO FORMA PRO FORMA SERVICO IMPAC ADJUSTMENTS LODGIAN --------------------------------------------------------------- Revenues Rooms $276,257 $105,716 $ 0 $381,973 Food and beverage 108,625 26,545 0 135,170 Other 20,485 7,369 0 27,854 --------------------------------------------------------------- 405,367 139,630 0 544,997 Operating expenses: Direct Rooms 72,691 32,414 0 105,105 Food and beverage 83,503 22,097 0 105,600 General and administrative 8,973 12,653 0 21,626 Other 141,231 51,231 0 192,462 Depreciation and amortization 30,563 12,173 3,989 D 46,725 --------------------------------------------------------------- 336,961 130,568 3,989 471,518 --------------------------------------------------------------- Income from operations 68,406 9,062 (3,989) 73,479 Other income (expenses): Interest income and other 2,880 271 0 3,151 Interest expense (15,006) (24,028) (8,868)E (47,902) Minority interest-preferred redeemable securities (12,794) 0 0 (12,794) Minority interests-other (779) 263 0 (516) --------------------------------------------------------------- Income before income taxes and extraordinary item 42,707 (14,432) (12,857) 15,418 Provision for income taxes 17,086 (5,773) (5,143)F 6,170 --------------------------------------------------------------- Income before extraordinary item $ 25,621 ($8,659) ($7,714) $ 9,248 =============================================================== Income before extraordinary item per common share - $1.22 $0.32 G =============== =========== basic and diluted Basic weighted average shares 20,918 28,918 G
LODGIAN, INC. UNAUDITED PRO FORMA STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER, 1998 (IN THOUSANDS, EXCEPT SHARE DATA)
PRO FORMA HISTORICAL PRO FORMA PRO FORMA SERVICO IMPAC ADJUSTMENTS LODGIAN ------------------------------------------------------------ Revenues Rooms $213,107 $ 90,763 $ 0 $303,870 Food and beverage 78,614 19,817 0 98,431 Other 15,129 6,944 0 22,073 ------------------------------------------------------------ 306,850 117,524 0 424,374 Operating expenses: Direct Rooms 57,892 21,311 0 79,203 Food and beverage 60,914 16,100 0 77,014 General and administrative 7,237 8,477 0 15,714 Other 103,145 43,619 0 146,764 Depreciation and amortization 23,945 11,177 945 D 36,067 ------------------------------------------------------------ 253,133 100,684 945 354,762 ------------------------------------------------------------ Income from operations 53,717 16,840 (945) 69,612 Other income (expenses): Interest income and other 1,840 0 0 1,840 Loss on Asset Disposition (432) 0 0 (432) Interest expense (14,659) (21,563) (6,651)E (42,873) Settlement on swap transactions (31,492) 0 0 (31,492) Merger Related Costs 0 (3,084) 0 (3,084) Minority interest-preferred 0 redeemable securities (9,396) 0 0 (9,396) Minority interests-other (1,126) 16 0 (1,110) ------------------------------------------------------------ Income before income taxes and extraordinary item (1,548) (7,791) (7,596) (16,935) Provision for income taxes (619) 0 (6,155)F (6,774) ------------------------------------------------------------ Income before extraordinary item (929) (7,791) (1,441) (10,161) ============================================================ Income before extraordinary item per common share - ($0.05) ($0.36)G ============= ============= basic and diluted Basic weighted average shares 20,261 28,261 G
LODGIAN, INC. NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS A) The unaudited historical Servico and unaudited historical Impac financial information was derived from information provided by the respective companies as of September 30, 1998 and December 31, 1997. The pro forma adjustments reflect the merger of Servico and Impac with Servico (the Merger) which is accounted for under the purchase method of accounting whereby Servico is the acquiring company. The pro forma adjustments also reflect the consummation of a $265 million financing agreement (the Financing Agreement). All pro forma adjustments in the condensed consolidated balance sheet give effect to the Merger and the Financing Agreement as if they had occurred September 30, 1998 and January 1, 1997 for the statements of operations. The pro forma statements are presented for illustrative purposes only. Such information is not necessarily indicative of the financial position of Lodgian had these transactions been consummated at the date indicated. B) The proceeds from the Financing Agreement were used as follows: Cash proceeds at closing $14,426 Prepayment of expenses at closing 8,666 Acquisition related closing costs 22,639 Amount placed in required reserve fund at closing 23,000 Debt related closing costs paid at closing 5,997 Payment of accounts payable at closing 737 Payment of accrued liabilities at closing 5,154 Repayment of long term obligations at closing 184,381 ================== Total debt from Financing Agreement $265,000 ================== C) The purchase price of Impac is estimated to be $556,419 consisting of the issuance of 8,000,000 shares of stock at $8.80 per share plus the payment of $15 million in cash and the assumption of $519,324 of Impac debt plus acquisition related costs of $10 million. Additionally, 1,400,000 shares to be issued are deferred until the completion of certain developments in progress. The allocation of the preliminary purchase price is as follows (in thousands):
Historical Pro Forma Fair Value Impac Adjustments ---------------- -------------- ------------------ Assets: Current assets $ 22,178 $ 20,240 $ 1,938 Property and equipment 544,218 454,204 90,014 Other assets 13,499 13,499 - ================ ============== ================== $579,895 $487,943 $91,952 ================ ============== ================== Liabilities and equity: Current liabilities $46,094 $41,094 $5,000 Long-term obligations 419,754 419,754 - Deferred income taxes 43,476 - 43,476 Minority interests 171 171 - Paid-in capital 70,400 - 70,400 Members' equity - 26,924 (26,924) ================ ============== ================== $579,895 $487,943 $91,952 ================ ============== ==================
D) Depreciation expense for the period ending September 30, 1998, and the year ended December 31, 1997 is recorded to reflect the costs associated with the acquired Impac assets. The allocation of the cost of the acquired assets between land, buildings, and furnishings and equipment is based on the assets' fair value. Depreciation expense of buildings and furnishings and equipment is based upon an estimated useful life of 40 years and 7 years, respectively. Depreciation is calculated based on a straight line basis. E) Interest expense for the period ending September 30, 1998, and the year ending December 31, 1997 is based on the incremental debt related to the Financing Agreement at 11% to reflect the interest rate and any amortization of loan costs less any amounts that would have been expensed during the year as a result the debt being written off as of January 1, 1997. F) Provision for income taxes in the pro forma adjustments is recorded using Lodgian's effective tax rate of 40%. G) The following table sets forth the pro forma computation of basic and diluted earnings per share:
Nine Months Ended Year September 30, Ended 1998 December 31, 1997 ------------------ ----------------- Numerator - basic and diluted per share: Income before extraordinary items ($10,161) $ 9,248 Effect of dilutive securities: Minority interest- preferred redeemable securities 0 0 ================== ================= Diluted earnings numerator ($10,161) $ 9,248 ================== ================= Denominator: Denominator for basic earnings per share - weighted average shares * 28,261 28,918 Effect of dilutive securities: Employee stock options 0 0 Convertible preferred securities 0 0 Denominator for diluted earnings per share - ================== ================= adjusted weighted average shares 28,261 28,918 ================== ================= Earnings per share - basic and diluted ($0.36) $0.32
- ---------- NOTE: No effect has been given to employee stock options and preferred redeemable securities for the 1998 period and the year ended December 31, 1997 as they are anti-dilutive. * Includes 8,000 shares issued in connection with the Merger. SERVICO, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA STATEMENTS OF INCOME EXCLUDING THE MERGER AND FINANCING AGREEMENT The accompanying unaudited pro forma statements of income are presented as if the hotels acquired by Servico in 1997, hotels acquired by Servico in 1998, the shares of Common Stock issued by Servico in a public offering in June 1997, and the convertible redeemable equity structured trust securities of June 1998 had occurred on January 1, 1997. All of Servico's acquisitions have been accounted for using the purchase method of accounting. Accordingly, assets acquired and liabilities assumed have been recorded at their estimated fair values based on their purchase price and other analyses. The pro forma statements of income do not purport to present the results of operations of Servico had the transactions and events assumed therein occurred on the dates specified, nor is it necessarily indicative of the results of operations that may be achieved in the future. The pro forma statements of income do not reflect cost savings and revenue enhancements which management believes have been and may continue to be realized following the hotel acquisitions. These cost savings and revenue enhancements have been and are expected to be realized primarily through the restructuring of operations. No assurances can be made as to the amount of cost savings or revenue enhancements, if any that actually will be realized. The pro forma statements of income are based on certain assumptions and adjustments described in the Notes to unaudited pro forma statements of income and should be read in conjunction therewith and with the consolidated financial statements and related notes thereto of Servico incorporated by reference in this document. THE UNAUDITED PRO FORMA FINANCIAL STATEMENTS DO NOT PURPORT TO REPRESENT WHAT THE RESULTS OF OPERATIONS OF SERVICO WOULD ACTUALLY HAVE BEEN IF THE EVENTS NOTED ABOVE HAD IN FACT OCCURRED ON THE DATES INDICATED OR TO PROJECT THE RESULTS OF OPERATIONS FOR ANY FUTURE DATE OR PERIOD. SERVICO, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA STATEMENT OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 1998 (IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO FORMA PRO FORMA SERVICO ADJUSTMENTS (A) SERVICO --------------------------------------------------------- Revenues Rooms $197,273 $15,834 $213,107 Food and beverage 74,673 3,941 78,614 Other 14,683 446 15,129 --------------------------------------------------------- 286,629 20,221 306,850 Operating expenses: Direct Rooms 54,015 3,877 57,892 Food and beverage 57,575 3,339 60,914 General and administrative 7,237 0 7,237 Other 93,703 9,442 103,145 Depreciation and amortization 22,528 1,417 23,945 --------------------------------------------------------- 235,058 18,075 253,133 --------------------------------------------------------- Income from operations 51,571 2,146 53,717 Other income (expenses): Interest income and other 1,035 805 1,840 Loss on Asset Disposition (432) 0 (432) Interest expense (21,893) 7,234 (14,659) Settlement on swap transactions (31,492) 0 (31,492) Merger Related Costs 0 0 0 Minority interest-preferred 0 redeemable securities (3,323) (6,073)C (9,396) Minority interests-other (1,126) 0 (1,126) --------------------------------------------------------- Income before income taxes and extraordinary item (5,660) 4,112 (1,548) Provision for income taxes (2,264) 1,645 D (619) --------------------------------------------------------- Income before extraordinary item ($3,396) $2,467 ($929) ========================================================= Income before extraordinary item per common share - ($0.16) ($0.05)E ============= ============= basic and diluted Weighted average shares 20,871 20,261 E
SERVICO, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA STATEMENT OF INCOME TWELVE MONTHS ENDED DECEMBER 31, 1997 (IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO FORMA PRO FORMA SERVICO ADJUSTMENTS (B) SERVICO ------------------------------------------------- Revenues Rooms $179,956 $ 96,301 $276,257 Food and beverage 80,335 28,290 108,625 Other 16,366 4,119 20,485 ------------------------------------------------- 276,657 128,710 405,367 Operating expenses: Direct Rooms 49,608 23,083 72,691 Food and beverage 60,919 22,584 83,503 General and administrative 8,973 0 8,973 Other 88,036 53,195 141,231 Depreciation and amortization 23,023 7,540 30,563 ------------------------------------------------- 230,559 106,402 336,961 ------------------------------------------------- Income from operations 46,098 22,308 68,406 Other income (expenses): Interest income and other 1,720 1,160 2,880 Interest expense (25,909) 10,903 (15,006) Minority interest-preferred redeemable securities 0 (12,794)C (12,794) Minority interests-other (960) 181 (779) ------------------------------------------------- Income before income taxes and extraordinary item 20,949 21,758 42,707 Provision for income taxes 8,379 8,707 D 17,086 ------------------------------------------------- Income before extraordinary item $12,570 $13,051 $25,621 ================================================= Income before extraordinary item per common share - $0.83 $1.22 E =========== =============== basic Income before extraordinary item per common share $0.83 $1.13 E =========== =============== assuming dilution Basic weighted average shares 15,183 20,918 E Diluted weighted average shares 15,183 29,545 E
SERVICO, INC. AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA STATEMENTS OF INCOME A) The historical statement of income of Servico for the period ended September 30,1998, includes the operations of various properties that it acquired during 1998 from the date of acquisition through September 30, 1998 and the effect of the convertible redeemable equity structured trust securities offering completed in June 1998. The pro forma adjustments include operations of the acquired properties from the beginning of 1998 through the date of acquisition as follows: PROPERTY DATE OF ACQUISITION -------- ------------------- Clarion Hotel, Niagara Falls January 16, 1998 Holiday Inn, Niagara Falls January 16, 1998 Holiday Inn, Grand Island January 16, 1998 Town Center Hotel, Silver Springs February 19, 1998 Holiday Inn, East Hartford May 28, 1998 Holiday Inn, New Haven May 28, 1998 Holiday Inn, Moravia May 28, 1998 Holiday Inn, Inner Harbor May 28, 1998 Holiday Inn, Glen Burnie North May 28, 1998 Holiday Inn, Baltimore International Airport May 28, 1998 Holiday Inn, Frederick May 28, 1998 Holiday Inn, Cromwell Bridge May 28, 1998 Holiday Inn, Belmont May 28, 1998 Holiday Inn, Arsenal Road May 28, 1998 Holiday Inn, Market Street May 28, 1998 Holiday Inn, East Lancaster May 28, 1998 Holiday Inn, North Lancaster May 28, 1998 B) The historical statement of income of Servico for the year ended December 31, 1997, includes the operations of various properties that it acquired during 1998 from the date of acquisition through December 31, 1997 and the effect of the convertible redeemable equity structured trust securities offering completed in June 1998. The pro forma adjustments include operations of the acquired properties from the beginning of 1997 through the date of acquisition as follows: PROPERTY DATE OF ACQUISITION -------- ------------------- Holiday Inn Select, Phoenix February 28, 1997* Holiday Inn, Manhattan February 28, 1997* Holiday Inn, Lawrence February 28, 1997* Crowne Plaza, Cedar Rapids May 29, 1997 Holiday Inn, Dallas July 15, 1997 Sheraton, Concord September 24, 1997 Holiday Inn Select, Windsor October 3, 1997 Comfort Inn, Roseville October 17, 1997 Holiday Inn, Jamestown November 7, 1997 Hilton, Columbia November 7, 1997 Ramada, Houston November 21, 1997 Sheraton, West Palm Beach November 21, 1997 Holiday Inn, Silver Spring November 21, 1997 Holiday Inn, Rolling Meadows November 21, 1997 Holiday Inn, Winter Haven November 21, 1997 - ---------- * Ownership percentage increased from 51% to 100%. The pro forma adjustments include operations of the properties acquired in 1998 from the beginning of 1997 through December 31, 1997 as follows: PROPERTY DATE OF ACQUISITION Clarion Hotel, Niagara Falls January 16, 1998 Holiday Inn, Niagara Falls January 16, 1998 Holiday Inn, Grand Island January 16, 1998 Town Center Hotel, Silver Springs February 19, 1998 Holiday Inn, East Hartford May 28, 1998 Holiday Inn, New Haven May 28, 1998 Holiday Inn, Moravia May 28, 1998 Holiday Inn, Inner Harbor May 28, 1998 Holiday Inn, Glen Burnie North May 28, 1998 Holiday Inn, Baltimore International Airport May 28, 1998 Holiday Inn, Frederick May 28, 1998 Holiday Inn, Cromwell Bridge May 28, 1998 Holiday Inn, Belmont May 28, 1998 Holiday Inn, Arsenal Road May 28, 1998 Holiday Inn, Market Street May 28, 1998 Holiday Inn, East Lancaster May 28, 1998 Holiday Inn, North Lancaster May 28, 1998 C) Minority Interests - preferred redeemable securities represents interest on the $175 million at 7.0% plus amortization of the Offering costs for the full year ended December 31, 1997 and the period from January 1, 1998 to the date of the Offering. D) To record the provision for income taxes relating to the pro forma adjustments using Servico's effective rate of 40%. E) The following table sets forth the pro forma computation of basic and diluted earnings per share:
Nine Months Ended Year September 30, Ended 1998 December 31, 1997 ------------------ ----------------- Numerator - basic and diluted per share: Income before extraordinary items ($929) $25,621 Effect of dilutive securities: Minority interest- preferred redeemable securities 0 7,676 ================== ================= Diluted earnings numerator ($929) $33,297 ================== ================= Denominator: Denominator for basic earnings per share - weighted average shares 20,261 20,918 Effect of dilutive securities: Employee stock options 0 457 Convertible preferred securities 0 8,170 Denominator for diluted earnings per share - ================== ================= adjusted weighted average shares 20,261 29,545 ================== ================= Basic earnings per share $0.05 $1.22 Diluted earnings per share $0.05 $1.13
- ---------- NOTE: No effect has been given to employee stock options and preferred redeemable securities for the 1998 period as they are anti-dilutive. -----END PRIVACY-ENHANCED MESSAGE-----