EX-99.1 2 g22127exv99w1.htm EX-99.1 exv99w1
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