8-K

United States
Securities And Exchange Commission

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 25, 2010

Lodgian, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware
(State or other jurisdiction
of incorporation) 001-14537
(Commission File Number) 52-2093696
(I.R.S. Employer
Identification No.)

3445 Peachtree Road, N.E., Suite 700
Atlanta, GA 30326
(Address of principal executive offices)

(404) 364-9400
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On February 25, 2010, Lodgian, Inc. issued a press release announcing its results for the year ended December 31, 2009. A copy of this press release is attached as Exhibit 99.1 and is incorporated by reference into this item.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1  Press release of Lodgian, Inc. dated February 25, 2010

The information in this Current Report on Form 8-K, including the exhibit, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Furthermore, the information in this Current Report on Form 8-K, including the exhibit, shall not be deemed to be incorporated by reference into the filings of the registrant under the Securities Act of 1933 regardless of any general incorporation language in such filings.

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.
Dated: February 25, 2010
By:	/s/ JAMES A. MACLENNAN James A. MacLennan
	Executive Vice President and Chief Financial Officer (Principal Accounting and Financial Officer)

Exhibit Index

Exhibit No.	Description
99.1	Press Release of Lodgian, Inc. dated February 25, 2010.

EX-99.1

Exhibit 99.1

For Immediate Release
Contact:
Debi Neary Ethridge
Vice President, Finance & Investor Relations
dethridge@lodgian.com
(404) 365-2719

Lodgian Reports 2009 Fourth Quarter and Full-Year 2009 Results

     ATLANTA, Ga., February 25, 2010—Lodgian, Inc. (NYSE Amex Equities: LGN), one of the nation’s largest independent owners and operators of full-service hotels, today reports results for the fourth quarter and full year ended December 31, 2009.

     The company will host a 10 a.m. E.T. conference call today to discuss results.

     The “33 continuing operations hotels” comprise those Lodgian properties that are not held for sale as of December 31, 2009, and include six hotels which were surrendered to a receiver in February 2010. Lists of properties, both continuing operations and held for sale, are attached to this press release.

Statistics for 33 Continuing Operations Hotels

	4Q			4Q			%			Year			Year			%
	2009*			2008*			Change			2009*			2008*			Change
Rooms revenue	$	29,864		$	36,857			-19.0	%	$	139,501		$	170,752			-18.3	%
RevPAR	$	51.76		$	63.77			-18.8	%	$	60.90		$	74.24			-18.0	%
Total revenue	$	41,815		$	51,114			-18.2	%	$	188,544		$	228,194			-17.4	%
Loss from continuing operations	$	(8,410	)	$	(4,884	)		n/m		$	(50,349	)	$	(8,014	)		n/m
EBITDA	$	3,731		$	7,386			-49.5	%	$	(2,489	)	$	40,218			n/m
Adjusted EBITDA (defined below)	$	4,057		$	8,795			-53.9	%	$	28,304		$	45,825			-38.2	%

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Consolidated Financial Results

	4Q			4Q			%		Year			Year			%
	2009*			2008*			Change		2009*			2008*			Change
Loss from continuing operations	$	(8,410	)	$	(4,884	)		n/m	$	(50,349	)	$	(8,014	)		n/m
Income (loss) from discontinued operations	$	5,695		$	234			n/m	$	(3,553	)	$	(3,970	)		n/m
Net loss attributable to common stock	$	(2,267	)	$	(4,650	)		n/m	$	(52,365	)	$	(11,984	)		n/m
Loss per share attributable to common stock	$	(0.11	)	$	(0.22	)		n/m	$	(2.46	)	$	(0.55	)		n/m

* Dollars in thousands except for RevPAR and per share data

In this press release, Lodgian uses the term “Adjusted EBITDA” to mean earnings before interest, taxes, depreciation and amortization (“EBITDA”), but excluding the effects of the following charges: impairment losses; and casualty (gains)/losses, net, for properties damaged by events such as hurricane, fire or flood. A reconciliation of EBITDA and Adjusted EBITDA to loss from continuing operations is included in the tables that accompany this press release.

Fourth Quarter 2009 Results

     Fourth quarter 2009 total revenue for our 33 continuing operations hotels declined approximately 18.2 percent to $41.8 million, compared to the 2008 fourth quarter. Occupancy decreased 10.6 percent to 57.2 percent, while average daily rate decreased 9.1 percent to $90.56 in the 2009 fourth quarter. Loss from continuing operations was $(8.4) million, compared to $(4.9) million in the 2008 fourth quarter.

     Net loss attributable to common shares was $(2.3) million, or $(0.11) per share, compared to a net loss of $(4.7) million, or $(0.22) per share in the 2008 fourth quarter. The lower net loss in the 2009 fourth quarter was due to net income from discontinued operations of $5.7 million, which was driven by a net $6.1 million gain on property sales.

     EBITDA from continuing operations hotels declined $(3.7) million to $3.7 million, compared to the prior year’s fourth quarter. Adjusted EBITDA for the same properties decreased from $8.8 million in the fourth quarter of 2008 to $4.0 million in the 2009 fourth quarter. Adjusted EBITDA margins for the 33 continuing operations hotels declined 750 basis

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points to 9.7 percent during the 2009 fourth quarter, compared to the 2008 fourth quarter, due to the significant decline in revenue.

Full Year 2009 Results

     2009 total revenue for continuing operations hotels declined 17.4 percent to $188.5 million from $228.2 million in 2008. Occupancy decreased 9.9 percent to 63.1 percent, while average daily rate decreased 9.0 percent to $96.56 in 2009. Loss from continuing operations was $(50.3) million, compared to $(8.0) million in 2008, due to impairment losses of $30.7 million recorded during 2009 compared to $4.5 million of impairment losses recorded during 2008, as well as the significant decline in revenue.

     Net loss attributable to common shares was $(52.4) million, or $(2.46) per share, compared to a net loss of $(12.0) million, or $(0.55) per diluted share in 2008.

     EBITDA from continuing operations hotels declined to $(2.5) million, compared to $40.2 million the prior year, due largely to the previously discussed impairment losses. Adjusted EBITDA for the same properties decreased from $45.8 million in 2008 to $28.3 million in 2009. Adjusted EBITDA margins for the 33 continuing operations hotels decreased 500 basis points to 15.0 percent for the 2009 full year due to the significant revenue decline.

Management Comments

     “Competition remains fierce as hotels in segments above the hotels in our portfolio continue to discount deeply to attract our guests,” said Dan Ellis, Lodgian president and chief executive officer. “This has especially impacted our contract business. This pricing war, combined with a very strong 2008 fourth quarter in which we outperformed the industry, impacted our continuing operations hotels’ RevPAR, which was down 18.2 percent, compared to an industry average of 11.7 percent. Our RevPAR market share declined to 98.9 percent, compared to 102.5 percent in the previous year’s fourth quarter. We continue to compete

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aggressively, but will not take on business solely for the sake of revenue when there is essentially no profit.”

Pending Merger Transaction

     As previously announced on January 22, 2010, the company entered into a definitive agreement to be acquired by LSREF Lodging Investments, LLC (“Purchaser”), in a transaction valued at approximately $270 million, including assumed debt.

     Under the terms of the agreement, Purchaser will acquire all of the outstanding common stock of Lodgian for $2.50 per share in an all-cash transaction. The price represents a premium of approximately 67.2 percent over Lodgian’s average closing share price during the trading period of one calendar month prior to January 15, 2010 and 64.3 percent over Lodgian’s average closing share price during the trading period of six calendar months prior to January 15, 2010.

     Lodgian’s Board of Directors has unanimously approved the merger agreement and has recommended approval of the transaction by Lodgian shareholders.

     Further information can be found in the preliminary proxy statement filed on February 16, 2010.

Asset Disposition Program

     During the year, Lodgian sold five hotels for gross proceeds of $21.9 million. Of the proceeds, $6.8 million was used for debt reduction and the remainder for general corporate purposes.

     As of December 31, 2009, one property remains classified as held for sale.

Balance Sheet Update

     Of the 33 continuing operations hotels, 31 were encumbered by mortgage debt as of December 31, 2009. These 31 hotels served as collateral for various mortgage debt facilities totaling $287.7 million at December 31, 2009. In February 2010, the six hotels which secured

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the Merrill Lynch Fixed Rate Pool 3 (“Pool 3”) were transferred to a court-appointed receiver. A summary of mortgage debt facilities, including Pool 3, is included in the supplemental information attached to this release.

     During the 2009 fourth quarter, the company surrendered control of the Crowne Plaza in Worcester, Mass. to a court-appointed receiver. As a result, all assets and liabilities were excluded from the company’s consolidated balance sheet as of December 31, 2009. The company does not believe the limited recourse provisions of the loan secured by the Crowne Plaza will be triggered by this transaction.

     Lodgian has approximately $56 million of mortgage debt maturing in 2010, comprising two single-asset mortgages and the Merrill Lynch Fixed Rate Pool 1. With respect to the Merrill Lynch Fixed Rate Pool 1, which is the largest maturity in 2010 with a principal balance of $34.5 million, Jones Lang LaSalle continues to pursue refinancing options for this pool on behalf of the company.

     At year-end 2009, Lodgian had $31.8 million in unrestricted and restricted cash on its balance sheet, as well as $6.2 million held by lenders for various capital expenditure projects.

Conference Call

     Lodgian will hold a conference call to discuss its 2009 fourth quarter and full year results today, February 25, at 10 a.m. Eastern time. To hear the webcast, interested parties may visit the company’s website at www.lodgian.com and click on Investor Relations and then Webcast, Q4 Earnings Conference Call. A recording of the call will be available by telephone until midnight on Thursday, March 4 by dialing (800) 406-7325, reference number 4231177. A replay of the conference call will be posted on Lodgian’s website.

Non-GAAP Financial Measures

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     The historical non-GAAP financial measures included in this press release are reconciled to the comparable GAAP measures in the schedules attached to this press release.

EBITDA and Adjusted EBITDA

     EBITDA and Adjusted EBITDA are non-GAAP measures and should not be used as a substitute for measures such as net income (loss), cash flows from operating activities, or other measures computed in accordance with GAAP. The company uses EBITDA and Adjusted EBITDA to measure its performance and to assist in the assessment of hotel property values. EBITDA is also a widely used industry measure which Lodgian believes provides pertinent information to investors and is an additional indicator of the company’s operating performance.

     The company defines Adjusted EBITDA as EBITDA excluding the effects of certain charges such as impairment losses; and casualty losses or gains related to damage to and insurance recoveries for properties damaged by events such as hurricane, fire or flood.

RevPAR Index

     RevPAR Index is computed by dividing the company’s RevPAR for a particular period by the market’s RevPAR over the same period. To derive the market’s RevPAR, we identify the hotels that the company considers to be competing hotels for each market in which the company operates. The group of hotels in each market is known as the competitive set. We then obtain RevPAR for each competitive set from Smith Travel Research, a leading provider of lodging industry data. We believe that RevPAR Index is a meaningful indicator of our performance because it measures our hotels in relation to our competitors. We use RevPAR Index to determine if our hotels are increasing market share, which is one of our key business objectives.

About Lodgian

     Lodgian is one of the largest independent owners and operators of full-service hotels in the United States. The company currently owns and manages a portfolio of 28 hotels with 5,359

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rooms located in 19 states. Of the company’s 28-hotel portfolio as of today, 14 are InterContinental Hotels Group brands (Crowne Plaza, Holiday Inn, Holiday Inn Select and Holiday Inn Express), 8 are Marriott brands (Marriott, Courtyard by Marriott, SpringHill Suites by Marriott, Residence Inn by Marriott and Fairfield Inn by Marriott), two are Hilton brands, and four are affiliated with other nationally recognized franchisors including Starwood, Wyndham, and Carlson. For more information about Lodgian, visit the company’s website: www.lodgian.com.

Additional Information and Where to Find it

     In connection with the proposed merger and required shareholder approval, Lodgian filed a preliminary proxy statement with the U.S. Securities and Exchange Commission (the “SEC”) on February 16, 2010. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT LODGIAN AND THE MERGER. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC at the SEC’s web site at www.sec.gov. In addition, the documents filed by Lodgian with the SEC may be obtained free of charge by contacting Lodgian, Inc., Attn: Investor Relations, 3445 Peachtree Road NE, Suite 700, Atlanta, Georgia 30326, Telephone: 404-364-9400. Our filings with the SEC are also available on our website at www.lodgian.com.

Participants in the Solicitation

     Lodgian and its officers and directors may be deemed to be participants in the solicitation of proxies from Lodgian’s shareholders with respect to the merger. Information about Lodgian’s officers and directors and their ownership of Lodgian’s common shares is set forth in the proxy statement for Lodgian’s 2009 Annual Meeting of Shareholders, which was filed with the SEC on March 20, 2009. Investors and security holders may obtain more detailed

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information regarding the direct and indirect interests of Lodgian and its respective officers and directors in the merger by reading the preliminary proxy statement regarding the merger which was filed with the SEC on February 16, 2010, and the definitive proxy statement which will be filed with the SEC at a later date.

Cautionary Note Regarding Forward-looking Statements

     This press release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than statements of historical facts, including, among others, statements regarding the anticipated merger with an affiliate of Lone Star, Lodgian’s expectations regarding returning certain hotels to lenders, anticipated cost reductions, optional maturity extensions, property dispositions, future financial position, business strategy, projected performance and financing needs, are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Lodgian and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by such forward-looking statements. Many of these factors are beyond Lodgian’s ability to control or predict. Such factors include, but are not limited to, any conditions imposed in connection with the merger, approval of the Merger Agreement by the stockholders of Lodgian, the satisfaction of various other conditions to the closing of the merger contemplated by the Merger Agreement, the effects

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of regional, national and international economic conditions, our ability to refinance or extend maturing mortgage indebtedness, competitive conditions in the lodging industry and increases in room supply, requirements of franchise agreements (including the right of franchisors to immediately terminate their respective agreements if we breach certain provisions), our ability to complete planned hotel dispositions, the ability to realize anticipated cost reductions, the effects of unpredictable weather events such as hurricanes, the financial condition of the airline industry and its impact on air travel, the effect of self-insured claims in excess of our reserves and our ability to obtain adequate insurance at reasonable rates, and other factors discussed under Item IA (Risk Factors) in Lodgian’s Form 10-K for the year ended December 31, 2008, and as updated in its Forms 10-Q for the quarters ended March 31, June 30 and September 30, 2009. Lodgian assumes no duty to update these statements.

     Management believes these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. All written and oral forward-looking statements attributable to Lodgian or persons acting on its behalf are qualified in their entirety by these cautionary statements. Further, forward-looking statements speak only as of the date they are made, and Lodgian undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time unless otherwise required by law.

# # #

LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

	December 31, 2009			December 31, 2008
	($ in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	20,446		$	20,454
Cash, restricted		11,395			8,179
Accounts receivable (net of allowances: 2009 - $208; 2008 - $263)		4,786			7,115
Inventories		2,936			2,983
Prepaid expenses and other current assets		12,016			21,257
Assets held for sale		6,406			33,021
Total current assets		57,985			93,009
Property and equipment, net		382,663			447,366
Deposits for capital expenditures		6,162			11,408
Other assets		6,153			3,631
	$	452,963		$	555,414
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,931		$	7,897
Other accrued liabilities		21,032			22,897
Advance deposits		958			1,293
Current portion of long-term liabilities		102,616			124,955
Liabilities related to assets held for sale		6,029			16,167
Total current liabilities		134,566			173,209
Long-term liabilities		185,132			194,800
Total liabilities		319,698			368,009
Commitments and contingencies
Stockholders’ equity:
Common stock, $.01 par value, 60,000,000 shares authorized; 25,148,853 and 25,075,837 issued at December 31, 2009 and December 31, 2008, respectively		252			251
Additional paid-in capital		331,779			330,785
Accumulated deficit		(157,611	)		(105,246	)
Accumulated other comprehensive income		74			1,262
Treasury stock, at cost, 3,827,603 and 3,806,000 shares at December 31, 2009 and December 31, 2008, respectively		(39,692	)		(39,647	)
Total stockholders’ equity attributable to common stock		134,802			187,405
Noncontrolling interest		(1,537	)		0
Total stockholders’ equity		133,265			187,405
	$	452,963		$	555,414

LODGIAN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

	2009			2008
	($ in thousands)
Revenues:
Rooms	$	139,501		$	170,752
Food and beverage		42,191			49,741
Other		6,852			7,701
Total revenues		188,544			228,194
Direct operating expenses:
Rooms		39,438			44,330
Food and beverage		29,444			34,293
Other		4,730			5,467
Total direct operating expenses		73,612			84,090
		114,932			144,104
Other operating expenses:
Other hotel operating costs		57,009			66,221
Property and other taxes, insurance, and leases		16,387			15,769
Corporate and other		14,769			16,289
Casualty losses (gains), net		119			1,095
Depreciation and amortization		33,323			31,306
Impairment of long-lived assets		30,674			4,512
Total other operating expenses		152,281			135,192
Operating (loss) income		(37,349	)		8,912
Other income (expenses):
Interest income and other		110			1,054
Interest expense		(12,837	)		(17,900	)
Loss before income taxes and noncontrolling interest		(50,076	)		(7,934	)
Provision for income taxes — continuing operations		(273	)		(80	)
Loss from continuing operations		(50,349	)		(8,014	)
Discontinued operations:
Loss from discontinued operations before income taxes		(3,749	)		(3,939	)
Benefit (provision) for income taxes — discontinued operations		196			(31	)
Loss from discontinued operations		(3,553	)		(3,970	)
Net loss		(53,902	)		(11,984	)
Less: Net loss (income) attributable to noncontrolling interest		1,537			—
Net loss attributable to common stock	$	(52,365	)	$	(11,984	)
Basic and diluted net loss per share attributable to common stock	$	(2.46	)	$	(0.55	)

LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS BY QUARTER
(UNAUDITED)

	2009												2008
	Fourth			Third			Second			First			Fourth			Third			Second			First
	Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter
	($ in thousands)
Revenues:
Rooms	$	29,864		$	36,686		$	38,053		$	34,898		$	36,857		$	45,014		$	47,183		$	41,698
Food and beverage		10,428			9,930			11,765			10,068			12,507			11,752			14,217			11,265
Other		1,523			1,911			1,834			1,584			1,750			2,042			1,977			1,932
		41,815			48,527			51,652			46,550			51,114			58,808			63,377			54,895
Direct operating expenses:
Rooms		9,231			10,430			10,222			9,555			10,470			11,644			11,594			10,622
Food and beverage		7,223			7,348			7,760			7,113			8,365			8,500			9,174			8,254
Other		1,049			1,199			1,254			1,228			1,252			1,459			1,445			1,311
		17,503			18,977			19,236			17,896			20,087			21,603			22,213			20,187
		24,312			29,550			32,416			28,654			31,027			37,205			41,164			34,708
Other operating expenses:
Other hotel operating costs		13,209			14,911			14,150			14,739			15,146			17,404			16,782			16,889
Property and other taxes, insurance and leases		4,170			3,951			4,249			4,017			4,029			4,034			3,559			4,147
Corporate and other		3,322			4,288			3,559			3,600			3,057			4,368			3,505			5,359
Casualty losses (gains), net		1			23			14			81			1,151			(56	)		—			—
Depreciation and amortization		8,174			8,433			8,505			8,211			8,119			7,927			7,891			7,369
Impairment of long-lived assets		325			29,488			699			162			258			1,371			743			2,140
Other operating expenses		29,201			61,094			31,176			30,810			31,760			35,048			32,480			35,904
Operating (loss) income		(4,889	)		(31,544	)		1,240			(2,156	)		(733	)		2,157			8,684			(1,196	)
Other income (expenses):
Interest income and other		12			16			37			45			146			242			276			390
Other interest expense		(3,287	)		(2,949	)		(3,172	)		(3,429	)		(4,218	)		(4,438	)		(4,424	)		(4,820	)
(Loss) income before income taxes and non-controlling interests		(8,164	)		(34,477	)		(1,895	)		(5,540	)		(4,805	)		(2,039	)		4,536			(5,626	)
(Provision) benefit for income taxes — continuing operations		(246	)		(9	)		47			(65	)		(79	)		15			(16	)		—
(Loss) income from continuing operations		(8,410	)		(34,486	)		(1,848	)		(5,605	)		(4,884	)		(2,024	)		4,520			(5,626	)
Discontinued operations:
Income (loss) from discontinued operations before income taxes		5,693			(2,461	)		(5,540	)		(1,440	)		131			(4,171	)		1,758			(1,657	)
Benefit (provision) for income taxes		2			157			68			(31	)		103			12			89			(235	)
Income (loss) from discontinued operations		5,695			(2,304	)		(5,472	)		(1,472	)		234			(4,159	)		1,847			(1,892	)
Net (loss) income		(2,713	)		(36,790	)		(7,317	)		(7,082	)		(4,650	)		(6,183	)		6,367			(7,518	)
Less: Net loss attributable to noncontrolling interest		446			589			342			160			—			—			—			—
Net (loss) income attributable to common stock	$	(2,267	)	$	(36,201	)	$	(6,975	)	$	(6,922	)	$	(4,650	)	$	(6,183	)	$	6,367		$	(7,518	)
Net (loss) income from continuing operations Basic and diluted	$	(0.11	)	$	(1.70	)	$	(0.33	)	$	(0.32	)	$	(0.22	)	$	(0.29	)	$	0.29		$	(0.33	)

LODGIAN, INC. AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA (non-GAAP measures)
with Loss from Continuing Operations (a GAAP measure)
(UNAUDITED)

	2009			2008
	($ in thousands)
Continuing operations:
Loss from continuing operations	$	(50,349	)	$	(8,014	)
Net loss attributable to noncontrolling interest		1,537			—
Loss from continuing operations attributable to common stock	$	(48,812	)	$	(8,014	)
Depreciation and amortization		33,323			31,306
Interest income		(110	)		(1,054	)
Interest expense		12,837			17,900
Provision for income taxes		273			80
EBITDA from continuing operations	$	(2,489	)	$	40,218
Adjustments to EBITDA:
Impairment of long-lived assets	$	30,674		$	4,512
Casualty losses, net		119			1,095
Adjusted EBITDA from continuing operations	$	28,304		$	45,825

LODGIAN, INC. AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA (non-GAAP measures) with Loss from Continuing Operations (a GAAP measure)
(UNAUDITED)

	2009												2008
	Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter			First Quarter
	($ in thousands)												($ in thousands)
Continuing operations:
(Loss) income from continuing operations	$	(8,410	)	$	(34,486	)	$	(1,848	)	$	(5,605	)	$	(4,884	)	$	(2,024	)	$	4,520		$	(5,626	)
Net loss attributable to noncontrolling interest		446			589			342			160			—			—			—			—
(Loss) income from continuing operations attributable to common stock	$	(7,964	)	$	(33,897	)	$	(1,506	)	$	(5,445	)	$	(4,884	)	$	(2,024	)	$	4,520		$	(5,626	)
Depreciation and amortization		8,174			8,433			8,505			8,211			8,119			7,927			7,891			7,369
Interest income		(12	)		(16	)		(37	)		(45	)		(146	)		(242	)		(276	)		(390	)
Interest expense		3,287			2,949			3,172			3,429			4,218			4,438			4,424			4,820
Provision (benefit) for income taxes		246			9			(47	)		65			79			(15	)		16			—
EBITDA from continuing operations	$	3,731		$	(22,522	)	$	10,087		$	6,215		$	7,386		$	10,084		$	16,575		$	6,173
Adjustments to EBITDA:
Impairment of long-lived assets	$	325		$	29,488		$	699		$	162		$	258		$	1,371		$	743		$	2,140
Casualty losses, net		1			23			14			81			1,151			(56	)		—			—
Adjusted EBITDA from continuing operations	$	4,057		$	6,989		$	10,800		$	6,458		$	8,795		$	11,399		$	17,318		$	8,313

Lodgian, Inc.
Summary of Mortgage Debt as of December 31, 2009
($ in thousands)

	Number		Debt		Maturity
	of Hotels		Balance		Date		Interest rate
Mortgage Debt
IXIS		3	$	20,679	Mar-10	[1]	LIBOR plus 2.95%, capped at 7.45		%
IXIS		1		18,294	Dec-10		LIBOR plus 2.90%, capped at 7.90		%
Goldman Sachs		10		130,000	May-10	[2]	LIBOR plus 1.50%; capped at 6.50		%
Merrill Lynch Mortgage Lending, Inc. — Fixed #1		4		34,471	Jul-10			6.58	%
Merrill Lynch Mortgage Lending, Inc. — Fixed #3		6		45,500	Oct-09	[3]		6.58	%
Merrill Lynch Mortgage Lending, Inc. — Fixed #4		6		34,648	Jul-12			6.58	%
Wachovia- Pinehurst		1		2,920	Jun-10			5.78	%
Wachovia- Palm Desert		1		5,645	Feb-11			6.04	%
Total Mortgage Debt		32	$	292,157				3.96	% [4]

[1]-	Upon the satisfaction of certain conditions, one one-year extension option is available beyond the maturity date
[2]-	Upon the satisfaction of certain conditions, two one-year extension options are available beyond the maturity date
[3]-	These hotels were transferred to a court-appointed receiver in February 2010
[4]-	Annual effective weighted average cost of debt at December 31, 2009

Lodgian, Inc.
2009 Supplemental Operating Information

Hotel		Room			Three months ended
Count [1]		Count			December 31, 2009			December 31, 2008			Increase (Decrease)
	33		6,272	All Continuing Operations hotels
				Occupancy		57.1	%		64.0	%				(10.8	)%
				ADR	$	90.56		$	99.66		$	(9.10	)	(9.1	)%
				RevPAR	$	51.76		$	63.77		$	(12.01	)	(18.8	)%
				RevPAR Index		98.9	%		102.5	%				(3.5	)%
	28		5,189	Continuing Operations less hotels under renovation in the fourth quarter 2008 or 2009
				Occupancy		58.4	%		64.8	%				(9.9	)%
				ADR	$	90.36		$	99.60		$	(9.24	)	(9.3	)%
				RevPAR	$	52.79		$	64.54		$	(11.75	)	(18.2	)%
				RevPAR Index		99.7	%		104.2	%				(4.3	)%
	12		1,398	Marriott Hotels
				Occupancy		60.4	%		67.6	%				(10.7	)%
				ADR	$	95.97		$	107.97		$	(12.00	)	(11.1	)%
				RevPAR	$	57.97		$	73.03		$	(15.06	)	(20.6	)%
				RevPAR Index		110.9	%		117.4	%				(5.5	)%
	2		396	Hilton Hotels
				Occupancy		51.3	%		60.5	%				(15.2	)%
				ADR	$	105.98		$	107.43		$	(1.45	)	(1.3	)%
				RevPAR	$	54.40		$	65.04		$	(10.64	)	(16.4	)%
				RevPAR Index		98.4	%		101.9	%				(3.4	)%
	15		3,603	IHG Hotels
				Occupancy		55.1	%		61.8	%				(10.8	)%
				ADR	$	90.40		$	98.56		$	(8.16	)	(8.3	)%
				RevPAR	$	49.80		$	60.96		$	(11.16	)	(18.3	)%
				RevPAR Index		95.7	%		98.2	%				(2.5	)%
	4		875	Other Brands — Radisson, Wyndham & Four Points by Sheraton
				Occupancy		63.1	%		68.6	%				(8.0	)%
				ADR	$	77.19		$	87.57		$	(10.38	)	(11.9	)%
				RevPAR	$	48.70		$	60.05		$	(11.35	)	(18.9	)%
				RevPAR Index		92.6	%		96.4	%				(3.9	)%

Note:

[1]- Hotel count includes six hotels which were surrendered to a court-appointed receiver in February 2010

Lodgian, Inc.
2009 Supplemental Operating Information

Hotel Count		Room
[1]		Count			2009			2008			Increase (Decrease)
	33		6,272	All Continuing Operations hotels
				Occupancy		63.1	%		70.0	%				(9.9	)%
				ADR	$	96.56		$	106.13		$	(9.57	)	(9.0	)%
				RevPAR	$	60.90		$	74.24		$	(13.34	)	(18.0	)%
				RevPAR Index		100.0	%		100.6	%				(0.6	)%
	21		4,018	Continuing Operations less hotels under renovation during 2008 or 2009
				Occupancy		63.0	%		70.4	%				(10.5	)%
				ADR	$	93.28		$	102.57		$	(9.29	)	(9.1	)%
				RevPAR	$	58.75		$	72.20		$	(13.45	)	(18.6	)%
				RevPAR Index		98.6	%		100.0	%				(1.4	)%
	12		1,398	Marriott Hotels
				Occupancy		65.9	%		72.2	%				(8.7	)%
				ADR	$	99.75		$	112.33		$	(12.58	)	(11.2	)%
				RevPAR	$	65.74		$	81.09		$	(15.35	)	(18.9	)%
				RevPAR Index		111.4	%		111.6	%				(0.2	)%
	2		396	Hilton Hotels
				Occupancy		56.0	%		65.1	%				(14.0	)%
				ADR	$	109.03		$	111.27		$	(2.24	)	(2.0	)%
				RevPAR	$	61.10		$	72.47		$	(11.37	)	(15.7	)%
				RevPAR Index		96.2	%		97.3	%				(1.1	)%
	15		3,603	IHG Hotels
				Occupancy		62.3	%		70.0	%				(11.0	)%
				ADR	$	98.71		$	105.93		$	(7.22	)	(6.8	)%
				RevPAR	$	61.47		$	74.13		$	(12.66	)	(17.1	)%
				RevPAR Index		97.8	%		99.4	%				(1.6	)%
	4		875	Other Brands — Radisson, Wyndham & Four Points by Sheraton
				Occupancy		65.0	%		68.5	%				(5.1	)%
				ADR	$	78.06		$	94.28		$	(16.22	)	(17.2	)%
				RevPAR	$	50.76		$	64.55		$	(13.79	)	(21.4	)%
				RevPAR Index		90.3	%		88.7	%				1.8	%

Note:

[1]- Hotel count includes six hotels which were surrendered to a court-appointed receiver in February 2010

Lodgian, Inc.
Hotel Portfolio as of December 31, 2009

Location	Brand	Rooms
Continuing Operations
Bentonville, AR	Courtyard by Marriott		90	[1]
Little Rock, AR	Residence Inn by Marriott		96
Phoenix, AZ	Crowne Plaza		295
Phoenix, AZ	Radisson		159
Denver, CO	Marriott		238
Melbourne, FL	Crowne Plaza		270
West Palm Beach, FL	Crowne Plaza		219
Atlanta, GA	Courtyard by Marriott		181
Ft. Wayne, IN	Hilton		244
Florence, KY	Courtyard by Marriott		78	[1]
Paducah, KY	Courtyard by Marriott		100
Kenner, LA	Radisson		244
Lafayette, LA	Courtyard by Marriott		90
Dedham, MA	Residence Inn by Marriott		81
Baltimore (BWI Airport), MD	Holiday Inn		259
Baltimore (Inner Harbor), MD	Holiday Inn		365	[1]
Columbia, MD	Hilton		152
Silver Spring, MD	Crowne Plaza		231
Pinehurst, NC	Springhill Suites by Marriott		107
Merrimack, NH	Fairfield Inn by Marriott		115	[1]
Santa Fe, NM	Holiday Inn		130
Albany, NY	Crowne Plaza		384
Strongsville, OH	Holiday Inn		303
Tulsa, OK	Courtyard by Marriott		122
Monroeville, PA	Holiday Inn		187
Philadelphia, PA	Four Points by Sheraton		190
Pittsburgh — Washington, PA	Holiday Inn		138
Pittsburgh, PA	Crowne Plaza		193
Hilton Head, SC	Holiday Inn		202
Myrtle Beach, SC	Holiday Inn		133
Abilene, TX	Courtyard by Marriott		100	[1]
Dallas (DFW Airport), TX	Wyndham		282
Houston, TX	Crowne Plaza		294	[1]
			6,272
Held For Sale
Palm Desert, CA	Holiday Inn Express		129

Note:

[1]- These properties were surrendered to a court-appointed receiver in February 2010.