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 26, 2008

Lodgian, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	001-14537	52-2093696
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer
of incorporation)		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 26, 2008, Lodgian, Inc. issued a press release announcing its results for the quarter and year ended December 31, 2007. A copy of this press release is attached as Exhibit 99.1 and is incorporated by reference into this item.

Item 8.01 Other Events

Certain of our directors have indicated to management their desire to purchase Lodgian shares, although any such activities by them will be independent of the Company’s, and we cannot predict the timing, number or value of any shares that may be so acquired. The Company will continue executing its share repurchases in accordance with the requirements of the safe harbor provisions of SEC Rule 10b-18.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Except for the disclosure contained in Item 8.01 hereof, 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 Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Lodgian, Inc.
Dated:	February 26, 2008
By:	/s Daniel E. Ellis
	Daniel E. Ellis
	Senior Vice President, General Counsel and Secretary

Exhibit Index

Exhibit No.	Description
99.1	Press Release of Lodgian, Inc. dated February 26, 2008.

EX-99.1

Exhibit 99.1

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

Lodgian Reports 2007 Fourth Quarter and Full-Year 2007 Results

          ATLANTA, Ga., February 26, 2008—Lodgian, Inc. (AMEX: LGN), one of the nation’s largest independent owners and operators of full-service hotels, today reported results for the fourth quarter and full year ended December 31, 2007.

          The “44 Continuing Operations hotels” comprise all Lodgian properties except its held for sale portfolio (two hotels at December 31, 2007).

Fourth Quarter 2007 Highlights for 44 Continuing Operations hotels

• Achieved a 4.3 percent improvement in revenue per available room (RevPAR), despite the displacement caused by three major renovations ongoing in the quarter.

• Increased total revenue 4.3 percent, to $65.5 million.

• Improved direct operating contribution (defined as total revenue less direct operating expenses) by 7.3 percent, resulting in a 180 basis point margin improvement to 63.1 percent.

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Lodgian Fourth Quarter Results
Page 2

• Increased Adjusted EBITDA (defined below) to $12.7 million, a 30 percent improvement.

• Improved Adjusted EBITDA margin to 19.4 percent.

Full Year 2007 Highlights for 44 Continuing Operations hotels

• Increased room revenue by 5.3 percent and food and beverage revenue by 9.2 percent, a combined 6.2 percent increase in total revenues.

• Improved direct operating contribution 7.3 percent to $176.8 million in 2007, resulting in a 70 basis point direct operating margin increase.

• Achieved a 70 basis point increase in Adjusted EBITDA margin, with Adjusted EBITDA increasing to $53.6 million.

• Made substantial progress on the conversion of the Holiday Inn Select DFW to a Wyndham hotel, and the conversion of the Doubletree Club Philadelphia hotel to a Four Points by Sheraton.

Statistics for 44 Continuing Operations hotels

	4Q			4Q			%			Year			Year			%
	2007*			2006*			Change			2007*			2006*			Change
Rooms revenue	$	47,576		$	45,617			4.3	%	$	208,222		$	197,719			5.3	%
RevPAR	$	65.27		$	62.57			4.3	%	$	72.00		$	68.45			5.2	%
Total revenue	$	65,498		$	62,817			4.3	%	$	278,079		$	261,785			6.2	%
Income/(loss) from continuing operations	$	(8,612	)	$	(12,385	)		30.5	%	$	(9,926	)	$	(10,267	)		3.3	%
EBITDA	$	6,963		$	10,100			(31.1	)%	$	44,616		$	54,833			(18.6	)%
Adjusted EBITDA (defined below)	$	12,734		$	9,795			30.0	%	$	53,640		$	48,775			10.0	%

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Lodgian Fourth Quarter Results
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Consolidated Financial Results

Income/(loss) from continuing operations	$	(8,612	)	$	(12,385	)	30.5	%	$	(9,926	)	$	(10,267	)	3.3	%
Income/(loss) from discontinued operations	$	539		$	(8,328	)	n/m		$	1,480		$	(4,909	)	n/m
Net income/(loss) attributable to common stock	$	(8,073	)	$	(20,713	)	61.0	%	$	(8,446	)	$	(15,176	)	44.3	%
Net income/(loss) per diluted share attributable to common stock	$	(0.34	)	$	(0.84	)	59.5	%	$	(0.35	)	$	(0.62	)	43.5	%

* 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; casualty (gains)/losses, net, for properties damaged by hurricane, fire or flood; gain/loss on extinguishment of debt; and proceeds arising from business interruption insurance claims.

Corporate Highlights:

• Announced appointment of Peter T. Cyrus as interim president and chief executive officer, following the January 29, 2008 resignation of Edward J. Rohling.

• Continued Lodgian’s strategic initiative to redefine the company’s portfolio, listing a total of nine hotels for sale, and retaining 35 hotels in continuing operations.

• Continued stock repurchase program, having acquired approximately $27.4 million of common stock from May 2006 through February 21, 2008.

• Sold 23 hotels during 2007 for aggregate gross proceeds of $82.2 million, net proceeds of $76.0 million.

Fourth Quarter 2007 Results

          Fourth quarter 2007 total revenue for 44 continuing operations hotels improved 4.3 percent to $65.5 million, compared to the 2006 same period. During the quarter, the

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Lodgian Fourth Quarter Results
Page 4

displacement of total revenue related to renovations at three properties was $0.8 million. Loss from continuing operations was $(8.6) million, compared to a loss of $(12.4) million in the 2006 fourth quarter, an improvement of $3.8 million. The improvement was driven by the successful implementation by the company of certain sales and profitability initiatives, a $1.1 million reduction in the provision related to self-insurance programs, and a lower effective income tax rate. These gains were offset in part by $5.2 million in impairment charges related to three of the nine hotels which were reclassified to discontinued operations in the 2008 first quarter.

          Net loss attributable to common shares was $(8.1) million, or a loss of $(0.34) per diluted share, compared to a net loss of $(20.7) million, or $(0.84) per diluted share in the 2006 fourth quarter.

          EBITDA from 44 continuing operations hotels declined $3.1 million, or 31.1 percent, to $7.0 million compared to the prior year, primarily due to the aforementioned impairment charges. Adjusted EBITDA for the same group of properties increased 30.0 percent, from $9.8 million in the fourth quarter of 2006, to $12.7 million in the 2007 fourth quarter.

Full Year 2007 Results

          2007 total revenue for the 44 continuing operations hotels improved 6.2 percent to $278.1 million from $261.8 million in 2006. Food and beverage revenues increased 9.2 percent to $60.9 million. During 2007, the impact of displacement related to renovations at six properties was $1.9 million of total revenue. Loss from continuing operations was $(9.9) million, compared to a loss of $(10.3) million in 2006. The 2007 results benefited from a lower effective tax rate,

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Lodgian Fourth Quarter Results
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revenue and profitability initiatives, and a $1.2 million reduction in the provision associated with self-insurance programs. However, these gains were more than offset by:

• $5.2 million in impairment charges related to three of the nine hotels which were reclassified to discontinued operations in the 2008 first quarter,

• a $3.4 million loss on debt extinguishment related to refinancing transactions,

• a $3.4 million decrease in business interruption proceeds related to the settlement of claims in 2006 for hotels closed due to hurricane damage during 2004 and 2005, and

• a $1.2 million restructuring charge associated with cost-reduction initiatives to improve future operating performance.

          Net loss attributable to common shares in 2007 was $(8.4) million, or a loss of $(0.35) per diluted share, compared to a net loss of $(15.2) million, or $(0.62) per diluted share in 2006.

          EBITDA from 44 continuing operations hotels for 2007 was $44.6 million, compared to $54.8 million in 2006. Adjusted EBITDA for the same group of properties increased 10.0 percent, from $48.8 million in 2006, to $53.6 million in 2007.

Management Comments

          “Our continuing operations hotels had a very solid fourth quarter, with RevPAR up 4.3 percent compared to the 2006 fourth quarter,” said Peter Cyrus, Lodgian interim president and chief executive officer. “For the 2007 full year, RevPAR for the 40 continuing operations hotels open and not under renovation increased 6.8 percent, compared to the 2007 industry average of 5.7 percent, according to Smith Travel Research. The 10 hotels that completed major renovations in 2005 and 2006 reported a 9.2 percent RevPAR increase in 2007 and an impressive

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Lodgian Fourth Quarter Results
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4.4 percent improvement in their RevPAR index. We believe there is still substantial future growth in these hotels.”

          Adjusted EBITDA margins for the 44 continuing operations hotels improved 385 basis points to 19.4 percent during the 2007 fourth quarter compared to 2006, primarily led by sales and profitability initiatives and a $1.1 million cost reduction in the company’s self-insurance programs. For the full-year 2007, Adjusted EBITDA margins rose 66 basis points compared to 2006.

Asset Disposition Program

          In the 2006 fourth quarter, the company announced and commenced a program to strategically reposition its hotel portfolio. A total of 27 properties were identified for sale, with two properties sold by the end of 2006. Of the 25 properties being marketed at the beginning of 2007, 23 properties were sold during the year. Aggregate gross proceeds were $82.2 million. Net proceeds, after closing costs and debt paydown, of $76.0 million were used for capital expenditures, share repurchases and general corporate purposes. At year-end 2007, two hotels remained as held for sale from this program.

          In the 2007 fourth quarter, the company announced that it would place an additional nine hotels on its held for sale list in 2008. The properties were included in continuing operations for 2007, as they were not reclassified to discontinued operations until the 2008 first quarter. A list of properties currently held for sale is included in the supplemental information attached to this release. Additionally, pro forma income statements for 2006 and 2007 are attached, reflecting the 35 continuing operations hotels effective from the 2008 first quarter.

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Lodgian Fourth Quarter Results
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          The company anticipates receiving aggregate gross proceeds of approximately $94 million to $102 million for the 11 remaining hotels, with net proceeds after debt reduction and closing costs of $39 million to $47 million.

Balance Sheet Update

          The company significantly strengthened its balance sheet during the past several years. As of December 31, 2007, 38 hotels were encumbered as collateral for various mortgage debt facilities totaling approximately $359 million. A summary of mortgage debt facilities is included in the supplemental information attached to this release. There are no debt maturities requiring refinancing until July 2009. “We have implemented a structure that will provide maximum flexibility to the company going forward, as well as keep our weighted average cost of debt (as of December 31, 2007) at a very acceptable 6.74 percent,” said James MacLennan, executive vice president and chief financial officer. “At year-end 2007, the company had $63 million in cash and restricted cash on its balance sheet, providing further flexibility as we move forward.”

          During the 2007 fourth quarter, Lodgian acquired 863,765 shares of common stock at an average price of $11.75 per share, for a total cost of approximately $10.2 million, as part of its previously announced plan to repurchase up to $30 million of its common shares over a two year period ending no later than August 22, 2009. The company has acquired 2,485,267 shares, or approximately 10 percent of common stock outstanding prior to initiating the repurchase program in May 2006, for a total cost of approximately $27.4 million, as of February 21, 2008. As of February 21, 2008, the company has the approval to acquire up to $7.3 million under the current program.

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Lodgian Fourth Quarter Results
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Conference Call

          Lodgian will hold a conference call to discuss its 2007 fourth quarter results today, February 26, at 10 a.m. Eastern time. To hear the webcast, interested parties may visit the company’s Web site 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 Tuesday, March 4, by dialing (800) 405-2236, reference number 11107300. A replay of the conference call will be posted on Lodgian’s Web site.

Non-GAAP Financial Measures

          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, gain/loss on extinguishment of debt, casualty losses or gains related to damage to and insurance recoveries for properties damaged by hurricane, fire or flood,

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Lodgian Fourth Quarter Results
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and charges related to the surrender of two wholly-owned hotels to the bond trustee and the disposition or surrender of one minority interest hotel to the lender.

About Lodgian

          Lodgian is one of the largest independent owners and operators of full-service hotels in the United States. The company currently manages a portfolio of 46 hotels with 8,430 rooms located in 24 states and Canada. Of the company’s 46-hotel portfolio, 25 are InterContinental Hotels Group brands (Crowne Plaza, Holiday Inn, Holiday Inn Select and Holiday Inn Express), 12 are Marriott brands (Marriott, Courtyard by Marriott, Springhill Suites by Marriott and Residence Inn by Marriott), three are Hilton brands, and four are affiliated with three other nationally recognized franchisors. Two hotels are independent, unbranded properties. One hotel is owned by a partnership, in each of which Lodgian has a 50 percent equity interest, and is the operating partner. For more information about Lodgian, visit the company’s Web site: www.lodgian.com.

Forward-Looking Statements

          This press release includes forward-looking statements related to Lodgian’s operations that are based on management’s current expectations, estimates and projections. These statements are not guarantees of future performance and actual results could differ materially. The words “guidance,” “may,” “should,” “expect,” “believe,” “anticipate,” “project,” “estimate,” “plan,” and similar expressions are intended to identify forward-looking statements. Certain factors are not within the company’s control and readers are cautioned not to put undue reliance on forward-looking statements. These statements involve risks and uncertainties including, but not limited to, the company’s ability to generate sufficient working capital from operations and other risks detailed from time to time in the company’s SEC reports. The company undertakes no obligations to update events to reflect changed assumptions, the occurrence of unanticipated events or changes to future results over time.

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LODGIAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31, 2007			December 31, 2006
	(Unaudited in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	54,389		$	48,188
Cash, restricted		8,363			13,791
Accounts receivable (net of allowances: 2007 - $323; 2006 - $277)		8,794			7,404
Insurance receivable		2,254			2,347
Inventories		3,097			2,893
Prepaid expenses and other current assets		18,186			22,450
Assets held for sale		8,009			89,437
Total current assets		103,092			186,510
Property and equipment, net		499,986			487,022
Deposits for capital expenditures		16,565			19,802
Other assets		5,087			5,824
	$	624,730		$	699,158
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,692		$	7,742
Other accrued liabilities		28,336			27,724
Advance deposits		1,683			1,384
Insurance advances		2,650			2,063
Current portion of long-term liabilities		5,092			46,557
Liabilities related to assets held for sale		961			68,351
Total current liabilities		48,414			153,821
Long-term liabilities		355,728			292,301
Total liabilities		404,142			446,122
Minority interests		—			10,922
Commitments and contingencies
Stockholders’ equity:
Common stock, $.01 par value, 60,000,000 shares authorized; 25,008,621 and 24,860,321 issued at December 31, 2007 and December 31, 2006, respectively		250			249
Additional paid-in capital		329,694			327,634
Accumulated deficit		(93,262	)		(84,816	)
Accumulated other comprehensive income		4,115			2,088
Treasury stock, at cost, 1,709,878 and 251,619 shares at December 31, 2007 and December 31, 2006, respectively		(20,209	)		(3,041	)
Total stockholders’ equity		220,588			242,114
	$	624,730		$	699,158

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

	2007			2006
	($ in thousands)
Revenues:
Rooms	$	208,222		$	197,719
Food and beverage		60,898			55,792
Other		8,959			8,274
Total revenues		278,079			261,785
Direct operating expenses:
Rooms		53,161			51,272
Food and beverage		41,796			39,623
Other		6,286			6,161
Total direct operating expenses		101,243			97,056
		176,836			164,729
Other operating expenses:
Other hotel operating costs		80,637			74,699
Property and other taxes, insurance, and leases		20,684			20,793
Corporate and other		21,454			20,760
Casualty (gains), net		(1,867	)		(2,888	)
Restructuring		1,232			—
Depreciation and amortization		32,145			30,718
Impairment of long-lived assets		6,819			758
Total other operating expenses		161,104			144,840
Operating income		15,732			19,889
Other income (expenses):
Business interruption insurance proceeds		571			3,931
Interest income and other		4,014			2,607
Interest expense		(26,030	)		(25,348	)
Loss on debt extinguishment		(3,411	)		—
(Loss) income before income taxes and minority interests		(9,124	)		1,079
Minority interests (net of taxes, nil)		(421	)		295
(Provision) for income taxes — continuing operations		(381	)		(11,641	)
(Loss) income from continuing operations		(9,926	)		(10,267	)
Discontinued operations:
Income (loss) from discontinued operations before income taxes		2,072			(8,017	)
Minority interests — discontinued operations		—			—
(Provision) benefit for income taxes — discontinued operations		(592	)		3,108
Income (loss) from discontinued operations		1,480			(4,909	)
Net (loss) income attributable to common stock	$	(8,446	)	$	(15,176	)
Net (loss) income per share attributable to common stock:
Basic	$	(0.35	)	$	(0.62	)
Diluted	$	(0.35	)	$	(0.62	)

	2007			2006
	($ in thousands, except share data)
Numerator:
(Loss) income from continuing operations	$	(9,926	)	$	(10,267	)
Income (loss) from discontinued operations		1,480			(4,909	)
Net (loss) income attributable to common stock	$	(8,446	)	$	(15,176	)
Denominator:
Basic weighted average shares		24,292			24,617
Diluted weighted average shares		24,292			24,617
Basic (loss) income per common share:
(Loss) income from continuing operations	$	(0.41	)	$	(0.42	)
Income (loss) from discontinued operations		0.06			(0.20	)
Net (loss) income attributable to common stock	$	(0.35	)	$	(0.62	)
Diluted (loss) income per common share:
(Loss) income from continuing operations	$	(0.41	)	$	(0.42	)
Income (loss) from discontinued operations		0.06			(0.20	)
Net (loss) income attributable to common stock	$	(0.35	)	$	(0.62	)

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

	2007												2006
	Fourth			Third			Second			First			Fourth			Third			Second			First
	Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter
							(Unaudited in thousands)
Revenues:
Rooms	$	47,576		$	54,187		$	56,216		$	50,243		$	45,617		$	50,445		$	53,788		$	47,869
Food and beverage		15,894			14,381			16,779			13,844			15,134			12,912			15,636			12,110
Other		2,028			2,417			2,453			2,061			2,066			2,105			2,154			1,949
		65,498			70,985			75,448			66,148			62,817			65,462			71,578			61,928
Direct operating expenses:
Rooms		12,569			14,157			13,756			12,679			12,462			13,297			13,310			12,203
Food and beverage		10,140			10,651			11,021			9,984			10,363			9,772			10,469			9,019
Other		1,449			1,683			1,642			1,512			1,456			1,523			1,657			1,525
		24,158			26,491			26,419			24,175			24,281			24,592			25,436			22,747
		41,340			44,494			49,029			41,973			38,536			40,870			46,142			39,181
Other operating expenses:
Other hotel operating costs		19,222			20,924			20,478			20,013			18,304			19,078			18,755			18,562
Property and other taxes, insurance and leases		5,127			4,734			5,212			5,611			5,813			5,862			4,717			4,401
Corporate and other		4,257			5,585			5,930			5,682			4,959			5,592			5,292			4,917
Casualty (gain) losses, net		—			—			—			(1,867	)		—			(3,085	)		31			166
Restructuring		(26	)		1,258
Depreciation and amortization		8,297			8,086			7,960			7,802			7,770			7,886			7,704			7,358
Impairment of long-lived assets		5,797			535			222			265			225			323			16			194
Other operating expenses		42,674			41,122			39,802			37,506			37,071			35,656			36,515			35,598
		(1,334	)		3,372			9,227			4,467			1,465			5,214			9,627			3,583
Other income (expenses):
Business interruption insurance proceeds		—			299			272			—			530			2,706			695			—
Interest income and other		937			1,330			822			925			664			786			848			309
Other interest expense		(6,423	)		(6,642	)		(6,767	)		(6,198	)		(6,297	)		(6,482	)		(6,227	)		(6,342	)
Loss on debt extinguishment		—			—			(3,411	)		—			—			—			—			—
(Loss) income before income taxes and minority interests		(6,820	)		(1,641	)		143			(806	)		(3,638	)		2,224			4,943			(2,450	)
Minority interests (net of taxes, nil)		—			—			(56	)		(365	)		335			100			(136	)		(4	)
(Loss) income before income taxes — continuing operations		(6,820	)		(1,641	)		87			(1,171	)		(3,303	)		2,324			4,807			(2,454	)
Benefit (provision) for income taxes — continuing operations		(1,792	)		744			(19	)		686			(9,082	)		(1,039	)		(2,245	)		725
(Loss) income from continuing operations		(8,612	)		(897	)		68			(485	)		(12,385	)		1,285			2,562			(1,729	)
Discontinued operations:
Income (loss) from discontinued operations before income taxes		(845	)		1,300			(565	)		2,182			(12,765	)		(1,917	)		1,853			4,812
(Provision) benefit for income taxes		1,384			(356	)		234			(1,854	)		4,437			794			(414	)		(1,709	)
Income (loss) from discontinued operations		539			944			(331	)		328			(8,328	)		(1,123	)		1,439			3,103
Net income (loss) attributable to common stock	$	(8,073	)	$	47		$	(263	)	$	(157	)	$	(20,713	)	$	162		$	4,001		$	1,374

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

	2007			2006
	($ in thousands)
Continuing operations:
(Loss) income from continuing operations	$	(9,926	)	$	(10,267	)
Depreciation and amortization		32,145			30,718
Interest income		(4,014	)		(2,607	)
Interest expense		26,030			25,348
Provision (benefit) for income taxes		381			11,641
EBITDA from continuing operations	$	44,616		$	54,833
Adjustments to EBITDA:
Post-emergence Chapter 11 expenses, included in corporate and other on consolidated statement of operations	$	—		$	3
Restructuring expenses		1,232			—
Impairment of long-lived assets		6,819			758
Casualty (gains) losses, net		(1,867	)		(2,888	)
(Gain) loss on debt extinguishment		3,411			—
Business interruption insurance proceeds		(571	)		(3,931	)
Adjusted EBITDA from continuing operations	$	53,640		$	48,775

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

	2007												2006
	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	$	(8,612	)	$	(897	)	$	68		$	(485	)	$	(12,385	)	$	1,285		$	2,562		$	(1,729	)
Depreciation and amortization		8,297			8,086			7,960			7,802			7,770			7,886			7,704			7,358
Interest income		(937	)		(1,330	)		(822	)		(925	)		(664	)		(786	)		(848	)		(309	)
Interest expense		6,423			6,642			6,767			6,198			6,297			6,482			6,227			6,342
Provision (benefit) for income taxes		1,792			(744	)		19			(686	)		9,082			1,039			2,245			(725	)
EBITDA from continuing operations	$	6,963		$	11,757		$	13,992		$	11,904		$	10,100		$	15,906		$	17,890		$	10,937
Adjustments to EBITDA:
Post-emergence Chapter 11 expenses, included in corporate and other on consolidated statement of operations	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	3
Restructuring expenses		(26	)		1,258			—			—			—			—			—			—
Impairment of long-lived assets		5,797			535			222			265			225			323			16			194
Casualty (gains) losses, net		—			—			—			(1,867	)		—			(3,085	)		31			166
(Gain) loss on debt extinguishment		—			—			3,411			—			—			—			—			—
Business interruption insurance proceeds		—			(299	)		(272	)		—			(530	)		(2,706	)		(695	)		—
Adjusted EBITDA from continuing operations	$	12,734		$	13,251		$	17,353		$	10,302		$	9,795		$	10,438		$	17,242		$	11,300

CONTINUING OPERATIONS HOTEL PORTFOLIO (35 HOTELS)
EFFECTIVE 2008 FIRST QUARTER
PRO FORMA INCOME STATEMENT

	2007			2006
Rooms available		2,340,807			2,337,556
Rooms sold		1,624,627			1,599,104
Occupancy %		69.4			68.4
Average daily rate		107.33			103.13
RevPAR		74.49			70.55
	(Unaudited in thousands)
Revenues:
Rooms	$	174,366		$	164,922
Food and beverage		51,233			46,312
Other		7,326			6,761
Total revenues		232,925			217,995
Operating expenses:
Direct:
Rooms		43,360			41,892
Food and beverage		34,762			32,635
Other		5,264			5,241
Total direct operating expenses		83,386			79,768
Direct operating contribution		149,539			138,227
Other operating expenses:
Other hotel operating costs		65,832			60,869
Property and other taxes, insurance, and leases		17,166			17,479
Corporate and other		21,396			20,699
Casualty (gains) losses, net		(1,867	)		(2,885	)
Restructuring		1,232			—
Depreciation and amortization		28,192			26,797
Impairment of long-lived assets		1,159			632
Total other operating expenses		133,110			123,591
Operating income		16,429			14,636
Other income (expenses):
Business interruption insurance proceeds		571			3,931
Interest income and other		3,944			2,558
Interest expense		(22,267	)		(20,688	)
Loss on extinguishment of debt		(3,329	)		—
Income before income taxes and minority interests		(4,652	)		437
Minority interests		(421	)		295
Provision for income taxes		(138	)		(4,676	)
Net income/(loss)	$	(5,211	)	$	(3,944	)

Lodgian, Inc.
Summary of Mortgage Debt as of December 31, 2007
(in $ thousands)

	Number	Debt		Maturity
	of Hotels	Balance		Date		Interest rate
Mortgage Debt
IXIS	3	$	21,276	Mar-08	[1]	LIBOR plus 2.95%, capped at 8.45%
IXIS	1		18,765	Dec-08	[2]	LIBOR plus 2.90%, capped at 8.40%
Goldman Sachs	10		130,000	May-09	[1]	LIBOR plus 1.50%; capped at 8.50%
Merrill Lynch Mortgage Lending, Inc. — Fixed #1	5		45,986	Jul-09		6.58%
Merrill Lynch Mortgage Lending, Inc. — Fixed #3	8		61,686	Jul-09		6.58%
Merrill Lynch Mortgage Lending, Inc. — Fixed #4	7		46,268	Jul-09		6.58%
Wachovia- Pinehurst	1		3,053	Jun-10		5.78%
Wachovia- Phoenix West	1		9,666	Jan-11		6.03%
Wachovia- Palm Desert	1		5,880	Feb-11		6.04%
Wachovia- Worcester	1		16,826	Feb-11		6.04%
Total Mortgage Debt	38	$	359,406			6.74% [3]

[1]-	Three one-year extension options are available beyond the maturity date
[2]-	Two one-year extension options are available beyond the maturity date
[3]-	Annual effective weighted average cost of debt at December 31, 2007.

Lodgian, Inc.
2007 Supplemental Operating Information

Hotel		Room
Count		Count			2007			2006			Increase (Decrease)
	43		7,923	All Continuing Operations less one hotel closed in 2006 & 2007 due to fire
				Occupancy		68.4	%		67.4	%				1.5	%
				ADR	$	105.29		$	101.54		$	3.75		3.7	%
				RevPAR	$	72.00		$	68.48		$	3.52		5.1	%
				RevPAR Index		99.3	%		98.4	%				0.9	%
	36		6,419	Continuing Operations less one hotel closed in 2006 & 2007 due to fire and hotels under renovation in 2006 and 2007
				Occupancy		69.7	%		66.9	%				4.2	%
				ADR	$	103.56		$	101.06		$	2.50		2.5	%
				RevPAR	$	72.22		$	67.64		$	4.58		6.8	%
				RevPAR Index		102.3	%		99.6	%				2.7	%
	10		2,259	Hotels completing major renovations in 2005 and 2006
				Occupancy		71.6	%		65.6	%				9.1	%
				ADR	$	109.86		$	109.71		$	0.15		0.1	%
				RevPAR	$	78.63		$	71.98		$	6.65		9.2	%
				RevPAR Index		97.5	%		93.4	%				4.4	%
	12		1,398	Marriott Hotels
				Occupancy		71.1	%		72.5	%				(1.9	)%
				ADR	$	113.72		$	106.59		$	7.13		6.7	%
				RevPAR	$	80.81		$	77.31		$	3.50		4.5	%
				RevPAR Index		112.9	%		114.2	%				(1.1	)%
	4		777	Hilton Hotels
				Occupancy		67.2	%		64.7	%				3.9	%
				ADR	$	107.15		$	104.47		$	2.68		2.6	%
				RevPAR	$	72.04		$	67.57		$	4.47		6.6	%
				RevPAR Index		95.1	%		91.3	%				4.2	%
	23		4,958	IHG Hotels less one hotel closed in 2006 & 2007 due to fire
				Occupancy		69.0	%		66.1	%				4.4	%
				ADR	$	104.95		$	101.49		$	3.46		3.4	%
				RevPAR	$	72.45		$	67.11		$	5.34		8.0	%
				RevPAR Index		100.4	%		97.4	%				3.1	%
	3		685	Other Brands (1)
				Occupancy		61.6	%		71.0	%				(13.2	)%
				ADR	$	93.62		$	94.88			($1.26	)	(1.3	)%
				RevPAR	$	57.70		$	67.41			($9.71	)	(14.4	)%
				RevPAR Index		73.2	%		85.9	%				(14.8	)%

(1) Other Brands include the Wyndham DFW Airport North, which was under renovation and brand conversion during 2007 and experienced a significant amount of displacement, as well as the Radisson New Orleans Airport Hotel in Kenner, LA which, experienced a dramatic increase in 2006 (and decrease in 2007) in occupancy and ADR as a result of Hurricane Katrina.

Lodgian, Inc.
Continuing Operations Hotel Portfolio

Location	Brand	Rooms
Bentonville, AR	Courtyard by Marriott		90
Little Rock, AR	Residence Inn by Marriott		96
Phoenix, AZ	Crowne Plaza		299
Phoenix, AZ	Radisson		159
Palm Desert, CA	Holiday Inn Express		129
Denver, CO	Marriott		238
Melbourne, FL	Crowne Plaza		270
West Palm Beach, FL	Crowne Plaza		219
Atlanta, GA	Courtyard by Marriott		181
Marietta, GA	Holiday Inn		193	[1]
Ft. Wayne, IN	Hilton		244
Florence, KY	Courtyard by Marriott		78
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		260
Baltimore (Inner Harbor), MD	Holiday Inn		375
Columbia, MD	Hilton		152
Silver Spring, MD	Crowne Plaza		231
Pinehurst, NC	Springhill Suites by Marriott		107
Merrimack, NH	Fairfield Inn by Marriott		116
Santa Fe, NM	Holiday Inn		130
Albany, NY	Crowne Plaza		384
Strongsville, OH	Holiday Inn Select		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		99
Dallas (DFW Airport), TX	Wyndham		282
Houston, TX	Crowne Plaza		291
			6,606

[1]- Hotel remains closed after fire suffered in January 2006

Lodgian, Inc.
Assets Held for Sale

Location		Brand	Rooms
Held for sale as of December 31, 2007
	Frederick, MD	Holiday Inn		158
	St. Paul/Arden Hills, MN	former Holiday Inn		156
Added to held for sale during 2008 first quarter:
	Phoenix, AZ	Holiday Inn		144
	Frisco, CO	Holiday Inn		217
	East Hartford, CT	Holiday Inn		130
	Worcester, MA	Crowne Plaza		243
	Glen Burnie, MD	Holiday Inn		127
	Towson, MD	Holiday Inn		139
	Troy, MI	Hilton		191
	Memphis, TN	Independent		105
	Windsor, Ontario, Canada	Holiday Inn Select		214