##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the quarterly period ended March 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the transition period from                     to
 Commission file no. 1-14537
 Lodgian, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    52-2093696(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)3445 Peachtree Road, N.E., Suite 700,Atlanta, GA
    
    30326(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code
(404) 364-9400
 (Former name, former address and former fiscal year, if changed since last report): Not applicable
 þ o
  o þ o
 o þ
 þ o
  Class
    
    Outstanding as of May 1, 2007Common
    
    24,667,626




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##### 



LODGIAN, INC. AND SUBSIDIARIES
 INDEX
 PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Condensed Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006 (unaudited)
    
    
    3Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2007 and March 31, 2006 (unaudited)
    
    
    4Condensed Consolidated Statement of Stockholders Equity for the Three Months Ended March 31, 2007 (unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2007 and March 31, 2006 (unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    38Item 4.
    
    Controls and Procedures
    
    
    38PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    39Item 6.
    
    Exhibits
    
    
    39Signatures
    
    
    
    
    40EX-31.1 SECTION 302, CERTIFICATION OF THE CEOEX-31.2 SECTION 302, CERTIFICATION OF THE CFOEX-32 SECTION 906, CERTIFICATION OF THE CEO & CFO
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 LODGIAN, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31, 2007
    
    
    December 31, 2006(Unaudited in thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    41,604
    
    
    $
    48,188Cash, restricted
    
    
    12,575
    
    
    
    13,791Accounts receivable (net of allowances: 2007 - $385; 2006 - $277)
    
    
    11,072
    
    
    
    7,404Insurance receivable
    
    
    1,221
    
    
    
    2,347Inventories
    
    
    2,960
    
    
    
    2,893Prepaid expenses and other current assets
    
    
    24,319
    
    
    
    22,450Assets held for sale
    
    
    85,123
    
    
    
    89,437Total current assets
    
    
    178,874
    
    
    
    186,510Property and equipment, net
    
    
    486,758
    
    
    
    487,022Deposits for capital expenditures
    
    
    21,528
    
    
    
    19,802Other assets
    
    
    5,640
    
    
    
    5,824$
    692,800
    
    
    $
    699,158LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    7,050
    
    
    $
    7,742Other accrued liabilities
    
    
    29,746
    
    
    
    27,724Advance deposits
    
    
    2,145
    
    
    
    1,384Insurance advances
    
    
    1,000
    
    
    
    2,063Current portion of long-term liabilities
    
    
    27,769
    
    
    
    46,557Liabilities related to assets held for sale
    
    
    64,064
    
    
    
    68,351Total current liabilities
    
    
    131,774
    
    
    
    153,821Long-term liabilities
    
    
    309,274
    
    
    
    292,301Total liabilities
    
    
    441,048
    
    
    
    446,122Minority interests
    
    
    10,207
    
    
    
    10,922Commitments and contingenciesStockholders equity:Common stock, $.01 par value, 60,000,000 shares authorized;
24,872,604 and 24,860,321 issued at March 31, 2007 and
December 31, 2006, respectively
    
    
    249
    
    
    
    249Additional paid-in capital
    
    
    329,059
    
    
    
    327,634Accumulated deficit
    
    
    (84,973
    )
    
    
    (84,816
    )Accumulated other comprehensive income
    
    
    2,188
    
    
    
    2,088Treasury stock, at cost, 402,470 and 251,619 shares at
March 31, 2007 and December 31, 2006, respectively
    
    
    (4,978
    )
    
    
    (3,041
    )Total stockholders equity
    
    
    241,545
    
    
    
    242,114$
    692,800
    
    
    $
    699,158
  3




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##### Table of Contents



LODGIAN, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended March 31,2007
    
    
    2006(Unaudited in thousands,except per share data)Revenues:Rooms
    
    $
    50,243
    
    
    $
    47,869Food and beverage
    
    
    13,844
    
    
    
    12,110Other
    
    
    2,061
    
    
    
    1,949Total revenues
    
    
    66,148
    
    
    
    61,928Direct operating expenses:Rooms
    
    
    12,679
    
    
    
    12,203Food and beverage
    
    
    9,984
    
    
    
    9,019Other
    
    
    1,512
    
    
    
    1,525Total direct operating expenses
    
    
    24,175
    
    
    
    22,74741,973
    
    
    
    39,181Other operating expenses:Other hotel operating costs
    
    
    20,013
    
    
    
    18,562Property and other taxes, insurance, and leases
    
    
    5,611
    
    
    
    4,401Corporate and other
    
    
    5,682
    
    
    
    4,917Casualty (gains) losses, net
    
    
    (1,867
    )
    
    
    166Depreciation and amortization
    
    
    7,802
    
    
    
    7,358Impairment of long-lived assets
    
    
    265
    
    
    
    194Total other operating expenses
    
    
    37,506
    
    
    
    35,598Operating income
    
    
    4,467
    
    
    
    3,583Other income (expenses):Interest income and other
    
    
    925
    
    
    
    309Interest expense
    
    
    (6,198
    )
    
    
    (6,342
    )Loss before income taxes and minority interests
    
    
    (806
    )
    
    
    (2,450
    )Minority interests (net of taxes, nil)
    
    
    (365
    )
    
    
    (4
    )Benefit for income taxes  continuing operations
    
    
    686
    
    
    
    725Loss from continuing operations
    
    
    (485
    )
    
    
    (1,729
    )Discontinued operations:Income from discontinued operations before income taxes
    
    
    2,182
    
    
    
    4,812Provision for income taxes  discontinued operations
    
    
    (1,854
    )
    
    
    (1,709
    )Income from discontinued operations
    
    
    328
    
    
    
    3,103Net (loss) income attributable to common stock
    
    $
    (157
    )
    
    $
    1,374Basic and diluted net (loss) income per share attributable to common stock
    
    $
    (0.01
    )
    
    $
    0.06
  4




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LODGIAN, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 AccumulatedAdditional
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    TotalCommon Stock
    
    Paid-In
    
    Accumulated
    
    Comprehensive
    
    Treasury Stock
    
    StockholdersShares
    
    Amount
    
    Capital
    
    Deficit
    
    Income
    
    Shares
    
    Amount
    
    Equity(Unaudited in thousands, except share data)Balance, December 31, 2006
    
    
    24,860,321
    
    
    $
    249
    
    
    $
    327,634
    
    
    $
    (84,816
    )
    
    $
    2,088
    
    
    
    251,619
    
    
    $
    (3,041
    )
    
    $
    242,114Amortization of unearned stock compensation
    
    
    
    
    
    
    
    
    
    
    492
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    492Issuance and vesting of restricted and nonvested shares
    
    
    13,087
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercise of stock options
    
    
    250
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Repurchases of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,851
    
    
    
    (1,937
    )
    
    
    (1,937
    )Income tax benefit related to stock awards
    
    

    
    
    

    
    
    
    159
    
    
    

    
    
    

    
    
    

    
    
    

    
    
    
    159Realization of pre-emergence deferred tax asset
    
    
    
    
    
    
    
    
    
    
    727
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    727Other
    
    
    (1,054
    )
    
    
    
    
    
    
    45
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (157
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (157
    )Currency translation adjustments (related taxes estimated at nil)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    100Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57
    )Balance, March 31, 2007
    
    
    24,872,604
    
    
    $
    249
    
    
    $
    329,059
    
    
    $
    (84,973
    )
    
    $
    2,188
    
    
    
    402,470
    
    
    $
    (4,978
    )
    
    $
    241,545
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LODGIAN, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months EndedMarch 31, 2007
    
    
    March 31, 2006(Unaudited in thousands)Operating activities:Net (loss) income
    
    $
    (157
    )
    
    $
    1,374Adjustments to reconcile net (loss) income to net cash provided by operating activities:Depreciation and amortization
    
    
    7,802
    
    
    
    8,673Impairment of long-lived assets
    
    
    1,730
    
    
    
    7,400Stock compensation expense
    
    
    492
    
    
    
    471Casualty gain, net
    
    
    (4,525
    )
    
    
    Deferred income taxes
    
    
    727
    
    
    
    917Minority interests
    
    
    365
    
    
    
    4Gain on asset dispositions
    
    
    (807
    )
    
    
    (1,489
    )Gain on extinguishment of debt
    
    
    
    
    
    
    (10,869
    )Amortization of deferred financing costs
    
    
    316
    
    
    
    344Other
    
    
    (17
    )
    
    
    (52
    )Changes in operating assets and liabilities:Accounts receivable, net of allowances
    
    
    (4,844
    )
    
    
    (4,607
    )Insurance receivable
    
    
    1,230
    
    
    
    7,495Inventories
    
    
    (67
    )
    
    
    (408
    )Prepaid expenses and other assets
    
    
    (490
    )
    
    
    2,348Accounts payable
    
    
    35
    
    
    
    683Other accrued liabilities
    
    
    1,912
    
    
    
    1,858Advance deposits
    
    
    1,065
    
    
    
    1,352Net cash provided by operating activities
    
    
    4,767
    
    
    
    15,494Investing activities:Capital improvements
    
    
    (8,364
    )
    
    
    (17,153
    )Proceeds from sale of assets, net of related selling costs
    
    
    5,480
    
    
    
    2,073Acquisition of minority partners interest
    
    
    (2,862
    )
    
    
    (Deposits) withdrawals for capital expenditures
    
    
    (1,728
    )
    
    
    2,282Insurance receipts related to casualty claims, net
    
    
    1,097
    
    
    
    500Net decrease in restricted cash
    
    
    1,216
    
    
    
    587Other
    
    
    53
    
    
    
    26Net cash used in investing activities
    
    
    (5,108
    )
    
    
    (11,685
    )Financing activities:Proceeds from issuance of long term debt
    
    
    
    
    
    
    44,954Proceeds from exercise of stock options and issuance of common stock
    
    
    2
    
    
    
    61Principal payments on long-term debt
    
    
    (3,958
    )
    
    
    (28,746
    )Purchase of treasury stock
    
    
    (1,937
    )
    
    
    (61
    )Payments of deferred financing costs
    
    
    (252
    )
    
    
    (1,238
    )Other
    
    
    (109
    )
    
    
    (10
    )Net cash (used in) provided by financing activities
    
    
    (6,254
    )
    
    
    14,960Effect of exchange rate changes on cash
    
    
    11
    
    
    
    Net (decrease) increase in cash and cash equivalents
    
    
    (6,584
    )
    
    
    18,769Cash and cash equivalents at beginning of period
    
    
    48,188
    
    
    
    19,097Cash and cash equivalents at end of period
    
    $
    41,604
    
    
    $
    37,866Supplemental cash flow information:Cash paid during the period for:Interest, net of the amounts capitalized shown below
    
    $
    7,113
    
    
    $
    7,412Interest capitalized
    
    
    
    
    
    
    117Income taxes, net of refunds
    
    
    705
    
    
    
    206Supplemental disclosure of non-cash investing and financing activities:Net non-cash debt increase
    
    
    
    
    
    
    10,189Purchases of property and equipment on account
    
    
    3,141
    
    
    
    
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LODGIAN, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. Business Summary
   
    
    65 hotels that were wholly owned and operated through subsidiaries; and
    
    two hotels that were operated in joint ventures in which the Company has a 50% or
greater voting equity interest and exercises control.
   2. General
     
    
    the reported amounts of assets and liabilities;
    
    the reported amounts of revenues and expenses during the reporting period; and
 7




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
    
    the disclosures of contingent assets and liabilities at the date of the financial statements.
  3. Stock-Based Compensation
   Issued Under the StockIncentive Plan
    
    TypeAvailable under the plan, less previously issued as of
December 31, 2006
    
    
    2,568,029Issued January 26, 2007
    
    
    (63,000
    )
    
    nonvested stockIssued February 12, 2007
    
    
    (46,000
    )
    
    nonvested stockIssued March 30, 2007
    
    
    (18,800
    )
    
    nonvested stockShares of nonvested stock withheld from awards to satisfy
tax withholding obligations
    
    
    4,226Nonvested shares forfeited in 2007
    
    
    259Options forfeited in 2007
    
    
    12,999Available for issuance, March 31, 2007
    
    
    2,457,713
 Stock Options
   Weighted AverageStock Options
    
    
    Exercise PriceBalance, December 31, 2006
    
    
    356,313
    
    
    $
    10.60Exercised
    
    
    (250
    )
    
    
    9.05Forfeited
    
    
    (12,999
    )
    
    
    11.74Balance, March 31, 2007
    
    
    343,064
    
    
    $
    10.56
   8




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##### Table of Contents



Options outstanding
    
    
    Options exercisableWeighted average
    
    
    Weighted
    
    
    
    
    
    
    Weighted average
    
    
    Weightedremaining life
    
    
    average
    
    
    
    
    
    
    remaining life
    
    
    averageRange of prices
    
    Number
    
    
    (in years)
    
    
    exercise price
    
    
    Number
    
    
    (in years)
    
    
    exercise price$7.83 to $9.39
    
    
    161,239
    
    
    
    8.1
    
    
    $
    9.05
    
    
    
    31,772
    
    
    
    8.1
    
    
    $
    9.05$9.40 to $10.96
    
    
    127,509
    
    
    
    7.3
    
    
    $
    10.49
    
    
    
    62,650
    
    
    
    7.3
    
    
    $
    10.50$10.97 to $15.66
    
    
    54,316
    
    
    
    6.4
    
    
    $
    15.21
    
    
    
    54,316
    
    
    
    6.4
    
    
    $
    15.21343,064
    
    
    
    7.6
    
    
    $
    10.56
    
    
    
    148,738
    
    
    
    7.6
    
    
    $
    11.91Expected to vest
    
    
    291,604
    
    
    
    7.6
    
    
    $
    10.59
 ($ in thousands)Aggregate intrinsic value of stock options outstanding
    
    $
    960Aggregate intrinsic value of stock options expected to vest
    
    $
    808Aggregate intrinsic value of stock options exercisable
    
    $
    216
 Restricted Stock
  Weighted AverageRestricted Stock
    
    
    Exercise PriceBalance, December 31, 2006
    
    
    7,694
    
    
    $
    12.88Expiration of restrictions
    
    
    (7,694
    )
    
    
    12.88Balance, March 31, 2007
    
    
    
    
    
    $
    
 Nonvested Stock
     9




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Weighted AverageNonvested Stock
    
    
    Exercise PriceBalance, December 31, 2006
    
    
    82,607
    
    
    $
    11.63Granted
    
    
    127,800
    
    
    
    12.96Forfeited
    
    
    (259
    )
    
    
    12.88Vested
    
    
    (13,087
    )
    
    
    12.78Balance, March 31, 2007
    
    
    197,061
    
    
    $
    12.41
   Unrecognized
    
    
    Weighted-AverageCompensation
    
    
    AmortizationType of Award
    
    Expense ($000's)
    
    
    Period (in years)Stock Options
    
    $
    490
    
    
    
    0.92Nonvested Stock
    
    
    1,852
    
    
    
    2.46Total
    
    $
    2,342
    
    
    
    2.33
  Three Months Ended March 31, 2007
    
    
    Three Months Ended March 31, 2006Compensation
    
    
    Income Tax
    
    
    Compensation
    
    
    Income TaxType of Award
    
    Expense
    
    
    Benefit
    
    
    Expense
    
    
    Benefit(Unaudited in thousands)Stock Options
    
    $
    206
    
    
    $
    80
    
    
    $
    206
    
    
    $
    80Nonvested Stock
    
    
    286
    
    
    
    111
    
    
    
    104
    
    
    
    40Restricted Stock
    
    
    
    
    
    
    
    
    
    
    161
    
    
    
    62Total
    
    $
    492
    
    
    $
    191
    
    
    $
    471
    
    
    $
    182
 4. Treasury Stock
   5. Dispositions and Discontinued Operations
 Dispositions
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Assets Held for Sale and Discontinued Operations
  a)
    
    Management commits to a plan to sell the asset;b)
    
    The asset is available for immediate sale in its present condition;c)
    
    An active marketing plan to sell the asset at a reasonable price has been initiated;d)
    
    The sale of the asset is probable within one year; ande)
    
    It is unlikely that significant changes to the plan to sell the asset will be made.
     
    
    $1.3 million on the Holiday Inn Clarksburg, WV to reflected the lowered estimated selling price; and
    
    $0.1 million on the University Plaza Bloomington, IN to record the final disposition of the hotel
  
    
    $3.8 million on the Holiday Inn Manhattan, KS to record the final disposition of the hotel;
    
    $2.3 million on the Holiday Inn Lawrence, KS to record the final disposition of the hotel;
    
    $0.4 million on the Holiday Inn Sheffield, AL to reflect the estimated selling costs as
the hotel was identified for sale during the first quarter of 2006;
    
    $0.4 million on the Holiday Inn McKnight, PA to reflect the lowered estimated selling
price and to reflect the write-off of capital improvements that did not add incremental
value or revenue generating capacity;
    
    $0.2 million on the Holiday Inn Valdosta, GA to reflect the estimated selling costs as
the hotel was identified for sale during the first quarter of 2006; and
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
    
    $0.1 million on the Azalea Inn Valdosta, GA to reflect the estimated selling costs as
the hotel was identified for sale during the first quarter 2006
                          March 31, 2007
    
    
    December 31, 2006(Unaudited in thousands)Property and equipment, net
    
    $
    78,178
    
    
    $
    83,462Other assets
    
    
    6,945
    
    
    
    5,975Assets held for sale
    
    $
    85,123
    
    
    $
    89,437Other liabilities
    
    $
    8,484
    
    
    $
    10,630Long-term debt
    
    
    55,580
    
    
    
    57,721Liabilities related to assets held for sale
    
    $
    64,064
    
    
    $
    68,351
  Three Months Ended March 31,2007
    
    
    2006(Unaudited in thousands)Total revenues
    
    
    18,033
    
    
    
    21,895Total expenses
    
    
    (16,640
    )
    
    
    (20,672
    )Impairment of long-lived assets
    
    
    (1,465
    )
    
    
    (7,206
    )Interest income and other
    
    
    1
    
    
    
    10Interest expense
    
    
    (1,212
    )
    
    
    (1,538
    )Casualty gains (losses), net
    
    
    2,658
    
    
    
    (35
    )Gain on asset disposition
    
    
    807
    
    
    
    1,489Gain on extinguishment of debt
    
    
    
    
    
    
    10,869Benefit (provision) for income taxes
    
    
    (1,854
    )
    
    
    (1,709
    )Income from discontinued operations
    
    $
    328
    
    
    $
    3,103
  12




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##### Table of Contents



6. Income (Loss) Per Share
  Three Months Ended March 31,2007
    
    
    2006(Unaudited in thousands,except per share data)Numerator:Loss from continuing operations
    
    $
    (485
    )
    
    $
    (1,729
    )Income from discontinued operations
    
    
    328
    
    
    
    3,103Net (loss) income attributable to common stock
    
    $
    (157
    )
    
    $
    1,374Denominator:Basic and diluted weighted average shares
    
    
    24,497
    
    
    
    24,635Basic and diluted (loss) income per common share:Loss from continuing operations
    
    $
    (0.02
    )
    
    $
    (0.07
    )Income from discontinued operations
    
    
    0.01
    
    
    
    0.13Net (loss) income attributable to common stock
    
    $
    (0.01
    )
    
    $
    0.06
    7. Long-Term Liabilities
  13




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##### Table of Contents



March 31, 2007
    
    
    December 31, 2006Number
    
    
    Property, plant
    
    
    Long-term
    
    
    Long-termof Hotels
    
    
    and equipment, net
    
    
    obligations
    
    
    obligations
    
    
    Interest rates at March 31, 2007(Unaudited in thousands)Refinancing DebtMerrill Lynch Mortgage Lending, Inc.  Floating
    
    
    14
    
    
    $
    68,838
    
    
    $
    55,900
    
    
    $
    58,118
    
    
    LIBOR plus 3.40%; capped at 9.4%Merrill Lynch Mortgage Lending, Inc.  Fixed
    
    
    33
    
    
    
    318,655
    
    
    
    238,247
    
    
    
    239,383
    
    
    
    6.58%Merrill Lynch Mortgage Lending, Inc.  Total
    
    
    47
    
    
    
    387,493
    
    
    
    294,147
    
    
    
    297,501Other FinancingsComputer Share Trust Company of Canada
    
    
    1
    
    
    
    15,493
    
    
    
    7,540
    
    
    
    7,551
    
    
    
    7.88%Lehman Brothers Holdings, Inc.
    
    
    4
    
    
    
    44,679
    
    
    
    15,086
    
    
    
    15,194
    
    
    $8,661 at 9.40%; $6,425 at 8.90%Wachovia
    
    
    4
    
    
    
    36,271
    
    
    
    35,913
    
    
    
    36,081
    
    
    $9,799 at 6.03%; $3,099 at
5.78%;23, 015 at 6.04% $18,941 at LIBOR plus 2.90%,
capped at 8.4%; $21,500 atIXIS
    
    
    4
    
    
    
    36,442
    
    
    
    40,441
    
    
    
    40,500
    
    
    LIBOR plus 2.95%, capped at 8.45%Total  other financing
    
    
    13
    
    
    
    132,886
    
    
    
    98,980
    
    
    
    99,327
    
    
    
    
    

7.13%(1)Total long-term debt
    
    
    60
    
    
    
    520,378
    
    
    
    393,128
    
    
    
    396,828Long-term liabilities  otherTax notes issued pursuant to our Joint Plan
of Reorganization
    
    
    
    
    
    
    
    
    
    
    1,094
    
    
    
    1,263Other
    
    
    
    
    
    
    
    
    
    
    972
    
    
    
    1,038
    
    
    
    
    
    
    
    2,066
    
    
    
    2,301Property, plant and equipment  Unencumbered
    
    
    7
    
    
    
    44,558
    
    
    
    
    
    
    
    67
    
    
    
    564,936
    
    
    
    395,194
    
    
    
    399,129Held for sale
    
    
    (23
    )
    
    
    (78,178
    )
    
    
    (58,151
    )
    
    
    (60,271
    )Total (2)
    
    
    44
    
    
    $
    486,758
    
    
    $
    337,043
    
    
    $
    338,858
 
 (1)
    
    Represents the Companys annual weighted average cost of debt at March 31, 2007.(2)
    
    Includes the current portion. 8. Commitments and Contingencies
 Franchise Agreements and Capital Expenditures
   Three Months Ended March 31,2007
    
    
    2006(Unaudited in thousands)Continuing operations
    
    $
    4,671
    
    
    $
    4,337Discontinued operations
    
    
    1,228
    
    
    
    1,494$
    5,899
    
    
    $
    5,831
   14




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##### Table of Contents




    
    Two hotels are not in compliance with the franchise agreements.
 
    
    One hotel has received a notice of non-compliance due to substandard quality
assurance evaluation scores. The Company is currently in the planning and diligence
phase of renovation, which is expected to remedy this instance of non-compliance.
In order to cure the notice, the hotel must remain in compliance for 24 months.
    
    The other hotel, which is held for sale, is expected to receive an extension
provided the Company completes certain work required by the franchisor. The Company
is currently completing this work.
 
    
    Five hotels are in default of the franchise agreements.
 
    
    Three of these hotels are held for sale. The Company is currently negotiating
license extensions with the franchisor in an effort to maintain the licenses until
the hotels are sold.
    
    One hotel is in default of the franchise agreement for failure to complete a PIP.
The Company has met with the franchisor and is in the planning and diligence phase
of renovation.
    
    One hotel is in default due to substandard guest satisfaction scores. The
Company is planning to convert the hotel to another brand and has received an
extension from the current franchisor through the planned conversion date.
 
    
    Four hotels are currently meeting the requirements to cure the deficiencies by their
respective cure dates. The Company expects to receive cure letters for two hotels within
the next two months and expects to earn clean slate letters for the remaining two hotels
in August 2007 and August 2009, respectively.
    Letters of Credit
  15




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##### Table of Contents



Self-insurance
    Casualty gains (losses) and business interruption insurance
      Litigation
    9. Income Taxes
  16




---



##### Table of Contents



10. Recent Accounting Pronouncements
    17




---



##### Table of Contents



11. Subsequent Events
   
    
    $46.1 million of the loan proceeds, along with $9.7 million in funds held in reserve by
Merrill Lynch, were used to pay off the $55.8 million Merrill Lynch Floating Rate Loan,
which was secured by 14 hotels.
    
    $59.6 million of the loan proceeds, along with $11.7 million of the Companys cash, were
used to defease the Merrill Lynch Fixed Rate #2 Loan, as discussed below.
    
    $15.7 million was held in a restricted cash account, pending resolution or settlement of
the terms of a ground lease relating to one of the ten hotels securing the loan.
    
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 You should read the discussion below in conjunction with the unaudited condensed consolidated
financial statements and accompanying notes, set forth in Item I. Financial Statements included
in this Form 10-Q . Also, the discussion which follows contains forward-looking statements which
involve risks and uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of various factors, including those discussed in
our Form 10-K for the year ended December 31, 2006.
 Executive Overview
  18




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##### Table of Contents




    
    65 hotels that are wholly owned and operated through subsidiaries; and
    
    two hotels that are operated in joint ventures in which we have a 50% or greater voting equity interest and exercise control.
   Overview of Continuing Operations
  
    
    Revenues increased $4.2 million, or 6.8%, driven by a 5.8% expansion in ADR, partially offset
by a 1.2% decrease in occupancy. RevPAR grew 4.4%, outpacing the competitive set, which
increased 3.0%.
 
    
    Operating income rose $0.9 million, or 24.7%. The growth
in operating income was driven by higher revenues and a $1.9
million net casualty gain related to the settlement of a
property damage claim. These gains were largely offset by
higher property insurance premiums, up $0.9 million, and
higher corporate overhead costs, up $0.7 million. The
increase in corporate overhead costs was due in large part to
costs associated with our strategic initiative to realign our
hotel portfolio and our review of strategic alternatives to
enhance shareholder value.
    
    Loss from continuing operations improved $1.2 million from a
loss of $1.7 million in the first quarter of 2006 to a loss of
$0.5 million in the first quarter of 2007.
 Overview of Discontinued Operations
    19




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##### Table of Contents



Critical Accounting Policies and Estimates
    Income Statement Overview
  Results of Operations  Continuing Operations
  Revenues  Continuing Operations
 Three Months Ended March 31,2007
    
    
    2006
    
    
    Increase (decrease)(unaudited in thousands)Revenues:Rooms
    
    $
    50,243
    
    
    $
    47,869
    
    
    $
    2,374
    
    
    
    5.0
    %Food and beverage
    
    
    13,844
    
    
    
    12,110
    
    
    
    1,734
    
    
    
    14.3
    %Other
    
    
    2,061
    
    
    
    1,949
    
    
    
    112
    
    
    
    5.7
    %Total revenues
    
    $
    66,148
    
    
    $
    61,928
    
    
    $
    4,220
    
    
    
    6.8
    %Occupancy
    
    
    65.1
    %
    
    
    65.9
    %
    
    
    
    
    
    
    (1.2
    %)ADR
    
    $
    108.24
    
    
    $
    102.29
    
    
    $
    5.95
    
    
    
    5.8
    %RevPar
    
    $
    70.45
    
    
    $
    67.46
    
    
    $
    2.99
    
    
    
    4.4
    %
 20




---



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21




---



##### Table of Contents



Hotel
    
    Room
    
    
    
    Three Months Ended March 31,Count
    
    Count
    
    
    
    2007
    
    2006
    
    Increase (decrease)43
    
    
    
    7,923
    
    
    Continuing Operations less one hotel
closed in 2006 due to fireOccupancy
    
    
    65.1
    %
    
    
    65.9
    %
    
    
    
    
    
    
    (1.2
    %)ADR
    
    $
    108.24
    
    
    $
    102.57
    
    
    $
    5.67
    
    
    
    5.5
    %RevPAR
    
    $
    70.45
    
    
    $
    67.59
    
    
    $
    2.86
    
    
    
    4.2
    %RevPAR Index
    
    
    100.9
    %
    
    
    99.7
    %
    
    
    
    
    
    
    1.2
    %42
    
    
    
    7,679
    
    
    Continuing Operations less one hotel
closed in 2006 due to fire and Radisson
New Orleans Airport hotelOccupancy
    
    
    65.1
    %
    
    
    65.0
    %
    
    
    
    
    
    
    0.2
    %ADR
    
    $
    108.26
    
    
    $
    100.94
    
    
    $
    7.32
    
    
    
    7.3
    %RevPAR
    
    $
    70.51
    
    
    $
    65.59
    
    
    $
    4.92
    
    
    
    7.5
    %RevPAR Index
    
    
    101.3
    %
    
    
    98.6
    %
    
    
    
    
    
    
    2.7
    %41
    
    
    
    7,266
    
    
    Continuing Operations less one hotel
closed in 2006 due to fire and hotels
under renovation in the first quarter
2006 and 2007Occupancy
    
    
    65.7
    %
    
    
    66.1
    %
    
    
    
    
    
    
    (0.6
    %)ADR
    
    $
    108.75
    
    
    $
    103.66
    
    
    $
    5.09
    
    
    
    4.9
    %RevPAR
    
    $
    71.44
    
    
    $
    68.50
    
    
    $
    2.94
    
    
    
    4.3
    %RevPAR Index
    
    
    101.3
    %
    
    
    99.9
    %
    
    
    
    
    
    
    1.4
    %10
    
    
    
    2,259
    
    
    Hotels completing major renovations in
2005 and 2006Occupancy
    
    
    66.8
    %
    
    
    60.9
    %
    
    
    
    
    
    
    9.7
    %ADR
    
    $
    115.04
    
    
    $
    114.82
    
    
    $
    0.22
    
    
    
    0.2
    %RevPAR
    
    $
    76.85
    
    
    $
    69.87
    
    
    $
    6.98
    
    
    
    10.0
    %RevPAR Index
    
    
    95.8
    %
    
    
    88.9
    %
    
    
    
    
    
    
    7.8
    %12
    
    
    
    1,398
    
    
    Marriott HotelsOccupancy
    
    
    65.9
    %
    
    
    71.0
    %
    
    
    
    
    
    
    (7.2
    %)ADR
    
    $
    114.66
    
    
    $
    102.70
    
    
    $
    11.96
    
    
    
    11.6
    %RevPAR
    
    $
    75.60
    
    
    $
    72.91
    
    
    $
    2.69
    
    
    
    3.7
    %RevPAR Index
    
    
    114.3
    %
    
    
    116.2
    %
    
    
    
    
    
    
    (1.6
    %)4
    
    
    
    777
    
    
    Hilton Hotels
Occupancy
    
    
    58.7
    %
    
    
    61.0
    %
    
    
    
    
    
    
    (3.8
    %)ADR
    
    $
    107.81
    
    
    $
    104.42
    
    
    $
    3.39
    
    
    
    3.2
    %RevPAR
    
    $
    63.32
    
    
    $
    63.71
    
    
    ($
    0.39
    )
    
    
    (0.6
    %)RevPAR Index
    
    
    89.8
    %
    
    
    91.1
    %
    
    
    
    
    
    
    (1.4
    %)24
    
    
    
    5,240
    
    
    IHG Hotels
Occupancy
    
    
    65.5
    %
    
    
    63.7
    %
    
    
    
    
    
    
    2.8
    %ADR
    
    $
    106.31
    
    
    $
    99.88
    
    
    $
    6.43
    
    
    
    6.4
    %RevPAR
    
    $
    69.60
    
    
    $
    63.62
    
    
    $
    5.98
    
    
    
    9.4
    %RevPAR Index
    
    
    100.5
    %
    
    
    96.0
    %
    
    
    
    
    
    
    4.7
    %3
    
    
    
    508
    
    
    Other Brands and Independent Hotels
Occupancy
    
    
    68.7
    %
    
    
    81.8
    %
    
    
    
    
    
    
    (16.0
    %)ADR
    
    $
    110.75
    
    
    $
    121.45
    
    
    ($
    10.70
    )
    
    
    (8.8
    %)RevPAR
    
    $
    76.06
    
    
    $
    99.33
    
    
    ($
    23.27
    )
    
    
    (23.4
    %)RevPAR Index
    
    
    89.3
    %
    
    
    105.3
    %
    
    
    
    
    
    
    (15.2
    %)
 22




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##### Table of Contents



Direct operating expenses  Continuing Operations
 % of total revenuesThree Months Ended March 31,
    
    
    
    
    
    
    
    
    
    
    Three Months Ended March 31,2007
    
    
    2006
    
    
    Increase (decrease)
    
    
    2007
    
    
    2006(unaudited in thousands)Direct operating expenses:Rooms
    
    $
    12,679
    
    
    $
    12,203
    
    
    $
    476
    
    
    
    3.9
    %
    
    
    19.2
    %
    
    
    19.7
    %Food and beverage
    
    
    9,984
    
    
    
    9,019
    
    
    
    965
    
    
    
    10.7
    %
    
    
    15.1
    %
    
    
    14.6
    %Other
    
    
    1,512
    
    
    
    1,525
    
    
    
    (13
    )
    
    
    (0.9
    %)
    
    
    2.3
    %
    
    
    2.5
    %Total direct operating expenses
    
    $
    24,175
    
    
    $
    22,747
    
    
    $
    1,428
    
    
    
    6.3
    %
    
    
    36.5
    %
    
    
    36.7
    %Direct operating margin (by revenue source):Rooms
    
    $
    37,564
    
    
    $
    35,666
    
    
    $
    1,898
    
    
    
    5.3
    %Food and beverage
    
    
    3,860
    
    
    
    3,091
    
    
    
    769
    
    
    
    24.9
    %Other
    
    
    549
    
    
    
    424
    
    
    
    125
    
    
    
    29.5
    %Total direct operating margin
    
    $
    41,973
    
    
    $
    39,181
    
    
    $
    2,792
    
    
    
    7.1
    %Direct operating margin % (by revenue source):Rooms
    
    
    74.8
    %
    
    
    74.5
    %Food and beverage
    
    
    27.9
    %
    
    
    25.5
    %Other
    
    
    26.6
    %
    
    
    21.8
    %Total direct operating margin
    
    
    63.5
    %
    
    
    63.3
    %
    
    
    Higher fee-based expenses, including reservations, travel agent and credit card
commissions, due to the 5.8% growth in ADR.
    
    Higher payroll costs, up 3.9% on a POR basis.
    
    Increased costs in other operating areas including room promotion, cable television and walked guest expense.
    23




---



##### Table of Contents



Other operating expenses and operating income  Continuing Operations
 % of total revenuesThree Months Ended March 31,
    
    
    
    
    
    
    
    
    
    
    Three Months Ended March 31,2007
    
    
    2006
    
    
    Increase (decrease)
    
    
    2007
    
    
    2006(unaudited in thousands)Other operating expenses:Other hotel operating costs
General and administrative
    
    $
    4,415
    
    
    $
    3,827
    
    
    $
    588
    
    
    
    15.4
    %
    
    
    6.7
    %
    
    
    6.2
    %Advertising and promotion
    
    
    3,712
    
    
    
    3,375
    
    
    
    337
    
    
    
    10.0
    %
    
    
    5.6
    %
    
    
    5.4
    %Franchise fees
    
    
    4,671
    
    
    
    4,337
    
    
    
    334
    
    
    
    7.7
    %
    
    
    7.1
    %
    
    
    7.0
    %Repairs and maintenance
    
    
    3,314
    
    
    
    3,160
    
    
    
    154
    
    
    
    4.9
    %
    
    
    5.0
    %
    
    
    5.1
    %Utilities
    
    
    3,898
    
    
    
    3,738
    
    
    
    160
    
    
    
    4.3
    %
    
    
    5.9
    %
    
    
    6.0
    %Other expenses
    
    
    3
    
    
    
    125
    
    
    
    (122
    )
    
    
    (97.6
    %)
    
    
    0.0
    %
    
    
    0.2
    %Other hotel operating costs
    
    
    20,013
    
    
    
    18,562
    
    
    $
    1,451
    
    
    
    7.8
    %
    
    
    30.3
    %
    
    
    30.0
    %Property and other taxes, insurance, and leases
    
    
    5,611
    
    
    
    4,401
    
    
    
    1,210
    
    
    
    27.5
    %
    
    
    8.5
    %
    
    
    7.1
    %Corporate and other
    
    
    5,682
    
    
    
    4,917
    
    
    
    765
    
    
    
    15.6
    %
    
    
    8.6
    %
    
    
    7.9
    %Casualty (gains) losses, net
    
    
    (1,867
    )
    
    
    166
    
    
    
    (2,033
    )
    
    
    (1224.7
    %)
    
    
    (2.8
    %)
    
    
    0.3
    %Depreciation and amortization
    
    
    7,802
    
    
    
    7,358
    
    
    
    444
    
    
    
    6.0
    %
    
    
    11.8
    %
    
    
    11.9
    %Impairment of long-lived assets
    
    
    265
    
    
    
    194
    
    
    
    71
    
    
    
    36.6
    %
    
    
    0.4
    %
    
    
    0.3
    %Total other operating expenses
    
    $
    37,506
    
    
    $
    35,598
    
    
    $
    1,908
    
    
    
    5.4
    %
    
    
    56.7
    %
    
    
    57.5
    %Total operating expenses
    
    $
    61,681
    
    
    $
    58,345
    
    
    $
    3,336
    
    
    
    5.7
    %
    
    
    93.2
    %
    
    
    94.2
    %Operating income
    
    $
    4,467
    
    
    $
    3,583
    
    
    $
    884
    
    
    
    24.7
    %
    
    
    6.8
    %
    
    
    5.8
    %
   
    
    General and administrative costs increased $0.6 million, or 15.4%, primarily as a result
of higher payroll, legal and professional fees.
    
    Advertising and promotion costs increased $0.3 million, or 10.0%, due primarily to
increased sales staffing and resulting payroll costs.
    
    Franchise fees increased $0.3 million, or 7.7%, driven largely by higher room revenues.
As a percentage of total revenues, franchise fees increased 10 basis points from 7.0% to
7.1%. As a percentage of room revenues, franchise fees increased 20 basis points from 9.1%
to 9.3%.
    
    Repairs and maintenance expenses increased $0.2 million, or 4.9%, driven by higher
payroll and snow removal costs. Repairs and maintenance expenses decreased 10 basis points
from 5.1% to 5.0% as a percentage of revenues.
    
    Utilities increased $0.2 million, or 4.3% (5.1% on a cost POR basis), primarily as a
result of a $0.48 POR increase in electricity expense due to higher rates. As a
percentage of total revenues, utilities decreased 10 basis points.
   
    
    Costs associated with our corporate operations team increased $0.3 million. In November
2006, we announced a major strategic initiative to reconfigure our hotel portfolio and
dispose of our non-core hotels. In conjunction with this initiative,
 24




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##### Table of Contents



we restructured our operations team to focus on the different needs of our core and non-core
(held for sale) hotels. We expect these costs to decline following the sale of all of our
non-core hotels.
 
    
    In January 2007, we announced a review of strategic alternatives to enhance shareholder
value. During the first quarter, we incurred $0.2 million in consulting and other related
costs.
    
    The remaining $0.2 million increase is attributable to the amortization of non-vested
stock awards granted to our Board of Directors in February 2007 and consulting costs
associated with our proxy filing. Two members of the Board of Directors did not stand for
reelection at the April 2007 annual meeting of stockholders and the Board elected to
accelerate the vesting of the shares for these individuals as of April 24, 2007. The stock
awarded to the remaining members of our Board of Directors is being amortized over a
three-year vesting period. We utilized the services of compensation consultants and
attorneys to assist us in adopting the new disclosure rules for our proxy filing.
   Non-operating income (expenses)  Continuing Operations
 Three Months Ended March 31,2007
    
    2006
    
    Increase (decrease)(unaudited in thousands)Non-operating income (expenses):Interest income and other
    
    $
    925
    
    
    $
    309
    
    
    $
    616
    
    
    
    199.4
    %Interest expense
    
    
    (6,198
    )
    
    
    (6,342
    )
    
    
    (144
    )
    
    
    (2.3
    %)
  Results of Operations  Discontinued Operations
    
    
    $1.3 million on the Holiday Inn Clarksburg, WV to reflected the lowered estimated selling price; and
    
    $0.1 million on the University Plaza Bloomington, IN to record the final disposition of the hotel
  
    
    $3.8 million on the Holiday Inn Manhattan, KS to record the final disposition of the hotel;
    
    $2.3 million on the Holiday Inn Lawrence, KS to record the final disposition of the hotel;
    
    $0.4 million on the Holiday Inn Sheffield, AL to reflect the estimated selling costs as
the hotel was identified for sale during the first quarter of 2006;
 25




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##### Table of Contents




    
    $0.4 million on the Holiday Inn McKnight, PA to reflect the lowered estimated selling
price and to reflect the write-off of capital improvements that did not add incremental
value or revenue generating capacity;
    
    $0.2 million on the Holiday Inn Valdosta, GA to reflect the estimated selling costs as
the hotel was identified for sale during the first quarter of 2006; and
    
    $0.1 million on the Azalea Inn Valdosta, GA to reflect the estimated selling costs as
the hotel was identified for sale during the first quarter 2006
 Income Taxes
      26




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##### Table of Contents



EBITDA
   Three Months Ended March 31,2007
    
    
    2006(Unaudited in thousands)Loss from continuing operations
    
    $
    (485
    )
    
    $
    (1,729
    )Depreciation and amortization
    
    
    7,802
    
    
    
    7,358Interest income
    
    
    (925
    )
    
    
    (309
    )Interest expense
    
    
    6,198
    
    
    
    6,342Benefit for income taxes  continuing operations
    
    
    (686
    )
    
    
    (725
    )EBITDA from continuing operations
    
    $
    11,904
    
    
    $
    10,937
  Three Months Ended March 31,2007
    
    2006(Unaudited in thousands)Post-emergence Chapter 11 expenses, included in corporate
and other on consolidated statement of operations
    
    $
    
    
    
    $
    3Impairment of long-lived assets
    
    
    265
    
    
    
    194Casualty (gains) losses, net (1)
    
    
    (1,531
    )
    
    
    130
 
 (1)
    
    Amount is net of the related minority interest effect. 27




---



##### Table of Contents



Additional Financial Information Regarding Quarterly Results of Our Continuing Operations
  2007
    
    
    2006
    
    
    2005First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    SecondQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter(Unaudited in thousands)Revenues:Rooms
    
    $
    50,243
    
    
    $
    45,617
    
    
    $
    50,445
    
    
    $
    53,788
    
    
    $
    47,869
    
    
    $
    40,957
    
    
    $
    44,652
    
    
    $
    44,058Food and beverage
    
    
    13,844
    
    
    
    15,134
    
    
    
    12,912
    
    
    
    15,636
    
    
    
    12,110
    
    
    
    11,973
    
    
    
    11,570
    
    
    
    13,152Other
    
    
    2,061
    
    
    
    2,066
    
    
    
    2,105
    
    
    
    2,154
    
    
    
    1,949
    
    
    
    1,849
    
    
    
    2,014
    
    
    
    2,04366,148
    
    
    
    62,817
    
    
    
    65,462
    
    
    
    71,578
    
    
    
    61,928
    
    
    
    54,779
    
    
    
    58,236
    
    
    
    59,253Direct operating expenses:Rooms
    
    
    12,679
    
    
    
    12,462
    
    
    
    13,297
    
    
    
    13,310
    
    
    
    12,203
    
    
    
    11,253
    
    
    
    11,766
    
    
    
    11,586Food and beverage
    
    
    9,984
    
    
    
    10,363
    
    
    
    9,772
    
    
    
    10,469
    
    
    
    9,019
    
    
    
    8,444
    
    
    
    8,277
    
    
    
    8,989Other
    
    
    1,512
    
    
    
    1,456
    
    
    
    1,523
    
    
    
    1,657
    
    
    
    1,525
    
    
    
    1,484
    
    
    
    1,517
    
    
    
    1,56724,175
    
    
    
    24,281
    
    
    
    24,592
    
    
    
    25,436
    
    
    
    22,747
    
    
    
    21,181
    
    
    
    21,560
    
    
    
    22,14241,973
    
    
    
    38,536
    
    
    
    40,870
    
    
    
    46,142
    
    
    
    39,181
    
    
    
    33,598
    
    
    
    36,676
    
    
    
    37,111Other operating expenses:Other hotel operating costs
    
    
    20,013
    
    
    
    18,304
    
    
    
    19,078
    
    
    
    18,755
    
    
    
    18,562
    
    
    
    17,265
    
    
    
    17,813
    
    
    
    16,282Property and other taxes, insurance and leases
    
    
    5,611
    
    
    
    5,813
    
    
    
    5,862
    
    
    
    4,717
    
    
    
    4,401
    
    
    
    3,937
    
    
    
    4,357
    
    
    
    4,278Corporate and other
    
    
    5,682
    
    
    
    4,959
    
    
    
    5,592
    
    
    
    5,292
    
    
    
    4,917
    
    
    
    4,314
    
    
    
    5,771
    
    
    
    5,282Casualty (gain) losses, net
    
    
    (1,867
    )
    
    
    
    
    
    
    (3,085
    )
    
    
    31
    
    
    
    166
    
    
    
    (28,754
    )
    
    
    190
    
    
    
    Depreciation and amortization
    
    
    7,802
    
    
    
    7,770
    
    
    
    7,886
    
    
    
    7,704
    
    
    
    7,358
    
    
    
    7,002
    
    
    
    5,250
    
    
    
    5,007Impairment of long-lived assets
    
    
    265
    
    
    
    225
    
    
    
    323
    
    
    
    16
    
    
    
    194
    
    
    
    1,018
    
    
    
    83
    
    
    
    64Other operating expenses
    
    
    37,506
    
    
    
    37,071
    
    
    
    35,656
    
    
    
    36,515
    
    
    
    35,598
    
    
    
    4,782
    
    
    
    33,464
    
    
    
    30,9134,467
    
    
    
    1,465
    
    
    
    5,214
    
    
    
    9,627
    
    
    
    3,583
    
    
    
    28,816
    
    
    
    3,212
    
    
    
    6,198Other income (expenses):Business interruption insurance proceeds
    
    
    
    
    
    
    530
    
    
    
    2,706
    
    
    
    695
    
    
    
    
    
    
    
    1,772
    
    
    
    6,094
    
    
    
    1,729Interest income and other
    
    
    925
    
    
    
    664
    
    
    
    786
    
    
    
    848
    
    
    
    309
    
    
    
    271
    
    
    
    340
    
    
    
    51Other interest expense
    
    
    (6,198
    )
    
    
    (6,297
    )
    
    
    (6,482
    )
    
    
    (6,227
    )
    
    
    (6,342
    )
    
    
    (5,485
    )
    
    
    (5,285
    )
    
    
    (5,275
    )(Loss) income before income taxes and minority interest
    
    
    (806
    )
    
    
    (3,638
    )
    
    
    2,224
    
    
    
    4,943
    
    
    
    (2,450
    )
    
    
    25,374
    
    
    
    4,361
    
    
    
    2,703Minority interests
    
    
    (365
    )
    
    
    335
    
    
    
    100
    
    
    
    (136
    )
    
    
    (4
    )
    
    
    (8,486
    )
    
    
    (1,127
    )
    
    
    (120
    )(Loss) income before income taxes  continuing operations
    
    
    (1,171
    )
    
    
    (3,303
    )
    
    
    2,324
    
    
    
    4,807
    
    
    
    (2,454
    )
    
    
    16,888
    
    
    
    3,234
    
    
    
    2,583Benefit (provision) for income taxes  continuing operations
    
    
    686
    
    
    
    (9,082
    )
    
    
    (1,039
    )
    
    
    (2,245
    )
    
    
    725
    
    
    
    (8,383
    )
    
    
    (12
    )
    
    
    (67
    )(Loss) income from continuing operations
    
    
    (485
    )
    
    
    (12,385
    )
    
    
    1,285
    
    
    
    2,562
    
    
    
    (1,729
    )
    
    
    8,505
    
    
    
    3,222
    
    
    
    2,516Discontinued operations:Income (loss) from discontinued operations before income taxes
    
    
    2,182
    
    
    
    (12,765
    )
    
    
    (1,917
    )
    
    
    1,853
    
    
    
    4,812
    
    
    
    (1,014
    )
    
    
    6,487
    
    
    
    (642
    )Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Provision) benefit for income taxes
    
    
    (1,854
    )
    
    
    4,437
    
    
    
    794
    
    
    
    (414
    )
    
    
    (1,709
    )
    
    
    313
    
    
    
    
    
    
    
    Income (loss) from discontinued operations
    
    
    328
    
    
    
    (8,328
    )
    
    
    (1,123
    )
    
    
    1,439
    
    
    
    3,103
    
    
    
    (701
    )
    
    
    6,487
    
    
    
    (642
    )Net (loss) income attributable to common stock
    
    $
    (157
    )
    
    $
    (20,713
    )
    
    $
    162
    
    
    $
    4,001
    
    
    $
    1,374
    
    
    $
    7,804
    
    
    $
    9,709
    
    
    $
    1,874
 28




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##### Table of Contents



EBITDA Reconciliation of Continuing Operations
  2007
    
    
    2006
    
    
    2005First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    SecondQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter(Unaudited in thousands)Income (loss) from continuing operations
    
    $
    (485
    )
    
    $
    (12,385
    )
    
    $
    1,285
    
    
    $
    2,562
    
    
    $
    (1,729
    )
    
    $
    8,505
    
    
    $
    3,222
    
    
    $
    2,516Depreciation and amortization
    
    
    7,802
    
    
    
    7,770
    
    
    
    7,886
    
    
    
    7,704
    
    
    
    7,358
    
    
    
    7,002
    
    
    
    5,250
    
    
    
    5,007Interest income
    
    
    (925
    )
    
    
    (664
    )
    
    
    (786
    )
    
    
    (848
    )
    
    
    (309
    )
    
    
    (262
    )
    
    
    (340
    )
    
    
    (204
    )Interest expense
    
    
    6,198
    
    
    
    6,297
    
    
    
    6,482
    
    
    
    6,227
    
    
    
    6,342
    
    
    
    5,485
    
    
    
    5,285
    
    
    
    5,275Provision (benefit) for income taxes  continuing operations
    
    
    (686
    )
    
    
    9,082
    
    
    
    1,039
    
    
    
    2,245
    
    
    
    (725
    )
    
    
    8,383
    
    
    
    12
    
    
    
    67EBITDA from continuing operations
    
    $
    11,904
    
    
    $
    10,100
    
    
    $
    15,906
    
    
    $
    17,890
    
    
    $
    10,937
    
    
    $
    29,113
    
    
    $
    13,429
    
    
    $
    12,661
  2007
    
    2006
    
    2005First
    
    Fourth
    
    Third
    
    Second
    
    First
    
    Fourth
    
    Third
    
    SecondQuarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter(Unaudited in thousands)Post-emergence Chapter 11 expenses, included in corporate
and other on consolidated statement of operations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    3
    
    
    $
    (2
    )
    
    $
    13
    
    
    $
    52Impairment of long-lived assets
    
    
    265
    
    
    
    225
    
    
    
    323
    
    
    
    16
    
    
    
    194
    
    
    
    1,018
    
    
    
    83
    
    
    
    64Casualty (gains) losses (1)
    
    
    (1,531
    )
    
    
    
    
    
    
    (3,464
    )
    
    
    30
    
    
    
    130
    
    
    
    (20,859
    )
    
    
    155
    
    
    
    Business interruption insurance proceeds
    
    
    
    
    
    
    (696
    )
    
    
    (2,252
    )
    
    
    (695
    )
    
    
    
    
    
    
    (1,223
    )
    
    
    (4,780
    )
    
    
    (1,430
    )Write-off of receivable from non-consolidated hotel
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    (200
    )
    
    
    946Write-off of investment in subsidiary for non-consolidated hotel
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    170
 
 (1)
    
    Amount is net of the related minority interest effect. Hotel data by market segment and region
 Hotel data by market segment
   
    
    Upper Upscale: Hilton and Marriott;
    
    Upscale: Courtyard by Marriott, Crowne Plaza, Radisson, Residence Inn by
Marriott, and Springhill Suites by Marriott;
    
    Midscale with Food & Beverage: Clarion, Doubletree Club, Holiday Inn, Holiday
Inn Select, Quality Inn, Ramada, and Ramada Plaza;
    
    Midscale without Food & Beverage: Fairfield Inn by Marriott and Holiday Inn Express; and
    
    Economy: Park Inn
 29




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##### Table of Contents



Combined Continuing and Discontinued Operations  66 hotels (excludes 1 hotel)
 Three Months Ended March 31,2007
    
    2006Upper UpscaleNumber of properties
    
    
    4
    
    
    
    4Number of rooms
    
    
    825
    
    
    
    825Occupancy
    
    
    66.6
    %
    
    
    67.4
    %Average daily rate
    
    $
    119.30
    
    
    $
    112.19RevPAR
    
    $
    79.51
    
    
    $
    75.59UpscaleNumber of properties
    
    
    21
    
    
    
    22Number of rooms
    
    
    3,852
    
    
    
    4,149Occupancy
    
    
    68.3
    %
    
    
    68.3
    %Average daily rate
    
    $
    115.09
    
    
    $
    107.89RevPAR
    
    $
    78.60
    
    
    $
    73.66Midscale with Food & BeverageNumber of properties
    
    
    33
    
    
    
    32Number of rooms
    
    
    6,409
    
    
    
    6,112Occupancy
    
    
    56.0
    %
    
    
    54.9
    %Average daily rate
    
    $
    82.78
    
    
    $
    80.78RevPAR
    
    $
    46.38
    
    
    $
    44.39Midscale without Food & BeverageNumber of properties
    
    
    5
    
    
    
    6Number of rooms
    
    
    596
    
    
    
    713Occupancy
    
    
    64.9
    %
    
    
    60.7
    %Average daily rate
    
    $
    85.13
    
    
    $
    80.65RevPAR
    
    $
    55.23
    
    
    $
    48.96EconomyNumber of properties
    
    
    1
    
    
    
    1Number of rooms
    
    
    126
    
    
    
    126Occupancy
    
    
    66.5
    %
    
    
    41.4
    %Average daily rate
    
    $
    61.64
    
    
    $
    58.46RevPAR
    
    $
    41.00
    
    
    $
    24.23Independent HotelsNumber of properties
    
    
    2
    
    
    
    1Number of rooms
    
    
    222
    
    
    
    105Occupancy
    
    
    37.6
    %
    
    
    55.3
    %Average daily rate
    
    $
    50.49
    
    
    $
    52.67RevPAR
    
    $
    18.97
    
    
    $
    29.11All HotelsNumber of properties
    
    
    66
    
    
    
    66Number of rooms
    
    
    12,030
    
    
    
    12,030Occupancy
    
    
    60.9
    %
    
    
    60.6
    %Average daily rate
    
    $
    96.64
    
    
    $
    93.28RevPAR
    
    $
    58.85
    
    
    $
    56.51
 30




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##### Table of Contents



Continuing Operations  43 hotels (excludes 1 hotel and held for sale hotels)
 Three Months Ended March 31,2007
    
    2006Upper UpscaleNumber of properties
    
    
    4
    
    
    
    4Number of rooms
    
    
    825
    
    
    
    825Occupancy
    
    
    66.6
    %
    
    
    67.4
    %Average daily rate
    
    $
    119.30
    
    
    $
    112.19RevPAR
    
    $
    79.51
    
    
    $
    75.59UpscaleNumber of properties
    
    
    20
    
    
    
    20Number of rooms
    
    
    3,577
    
    
    
    3,577Occupancy
    
    
    68.1
    %
    
    
    70.8
    %Average daily rate
    
    $
    118.45
    
    
    $
    111.37RevPAR
    
    $
    80.68
    
    
    $
    78.88Midscale with Food & BeverageNumber of properties
    
    
    16
    
    
    
    16Number of rooms
    
    
    3,171
    
    
    
    3,171Occupancy
    
    
    62.1
    %
    
    
    60.8
    %Average daily rate
    
    $
    94.39
    
    
    $
    90.21RevPAR
    
    $
    58.63
    
    
    $
    54.87Midscale without Food & BeverageNumber of properties
    
    
    2
    
    
    
    2Number of rooms
    
    
    245
    
    
    
    245Occupancy
    
    
    58.0
    %
    
    
    60.5
    %Average daily rate
    
    $
    107.32
    
    
    $
    99.21RevPAR
    
    $
    62.27
    
    
    $
    60.07Independent HotelsNumber of properties
    
    
    1
    
    
    
    1Number of rooms
    
    
    105
    
    
    
    105Occupancy
    
    
    56.3
    %
    
    
    55.3
    %Average daily rate
    
    $
    47.70
    
    
    $
    52.67RevPAR
    
    $
    26.88
    
    
    $
    29.11All HotelsNumber of properties
    
    
    43
    
    
    
    43Number of rooms
    
    
    7,923
    
    
    
    7,923Occupancy
    
    
    65.1
    %
    
    
    65.9
    %Average daily rate
    
    $
    108.24
    
    
    $
    102.57RevPAR
    
    $
    70.45
    
    
    $
    67.59
 31




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##### Table of Contents



Hotel data by region
   
    
    Northeast: Canada, Connecticut, Massachusetts, Maryland, New Hampshire, New York,
Ohio, Pennsylvania, Vermont, West Virginia;
    
    Southeast: Alabama, Florida, Georgia, Kentucky, Louisiana, North Carolina, South Carolina, Tennessee;
    
    Midwest: Arkansas, Iowa, Indiana, Michigan, Minnesota, Oklahoma, Texas; and
    
    West: Arizona, California, Colorado, New Mexico.
 32




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##### Table of Contents



Combined Continuing and Discontinued Operations  66 hotels (excludes 1 hotel)
 Three Months Ended March 31,2007
    
    2006Northeast RegionNumber of properties
    
    
    25
    
    
    
    25Number of rooms
    
    
    4,639
    
    
    
    4,639Occupancy
    
    
    57.3
    %
    
    
    56.8
    %Average daily rate
    
    $
    94.60
    
    
    $
    93.13RevPAR
    
    $
    54.18
    
    
    $
    52.89Southeast RegionNumber of properties
    
    
    22
    
    
    
    22Number of rooms
    
    
    3,777
    
    
    
    3,777Occupancy
    
    
    58.9
    %
    
    
    58.5
    %Average daily rate
    
    $
    93.65
    
    
    $
    92.79RevPAR
    
    $
    55.16
    
    
    $
    54.32Midwest RegionNumber of properties
    
    
    12
    
    
    
    12Number of rooms
    
    
    2,298
    
    
    
    2,298Occupancy
    
    
    59.7
    %
    
    
    62.3
    %Average daily rate
    
    $
    86.74
    
    
    $
    82.18RevPAR
    
    $
    51.76
    
    
    $
    51.21West RegionNumber of properties
    
    
    7
    
    
    
    7Number of rooms
    
    
    1,316
    
    
    
    1,316Occupancy
    
    
    81.5
    %
    
    
    76.5
    %Average daily rate
    
    $
    120.54
    
    
    $
    110.51RevPAR
    
    $
    98.30
    
    
    $
    84.49All HotelsNumber of properties
    
    
    66
    
    
    
    66Number of rooms
    
    
    12,030
    
    
    
    12,030Occupancy
    
    
    60.9
    %
    
    
    60.6
    %Average daily rate
    
    $
    96.64
    
    
    $
    93.28RevPAR
    
    $
    58.85
    
    
    $
    56.51
 33




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##### Table of Contents



Continuing Operations  43 hotels (excludes 1 hotel and held for sale hotels)
 Three Months Ended March 31,2007
    
    2006Northeast RegionNumber of properties
    
    
    17
    
    
    
    17Number of rooms
    
    
    3,463
    
    
    
    3,463Occupancy
    
    
    61.3
    %
    
    
    61.5
    %Average daily rate
    
    $
    101.68
    
    
    $
    98.86RevPAR
    
    $
    62.31
    
    
    $
    60.83Southeast RegionNumber of properties
    
    
    11
    
    
    
    11Number of rooms
    
    
    1,729
    
    
    
    1,729Occupancy
    
    
    64.9
    %
    
    
    65.1
    %Average daily rate
    
    $
    115.44
    
    
    $
    114.56RevPAR
    
    $
    74.91
    
    
    $
    74.54Midwest RegionNumber of properties
    
    
    8
    
    
    
    8Number of rooms
    
    
    1,415
    
    
    
    1,415Occupancy
    
    
    59.4
    %
    
    
    67.8
    %Average daily rate
    
    $
    99.46
    
    
    $
    88.96RevPAR
    
    $
    59.04
    
    
    $
    60.27West RegionNumber of properties
    
    
    7
    
    
    
    7Number of rooms
    
    
    1,316
    
    
    
    1,316Occupancy
    
    
    81.5
    %
    
    
    76.5
    %Average daily rate
    
    $
    120.54
    
    
    $
    110.51RevPAR
    
    $
    98.30
    
    
    $
    84.49All HotelsNumber of properties
    
    
    43
    
    
    
    43Number of rooms
    
    
    7,923
    
    
    
    7,923Occupancy
    
    
    65.1
    %
    
    
    65.9
    %Average daily rate
    
    $
    108.24
    
    
    $
    102.57RevPAR
    
    $
    70.45
    
    
    $
    67.59
 34




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##### Table of Contents



Liquidity and Capital Resources
 Working Capital
     
    
    $46.1 million of the loan proceeds, along with $9.7 million of funds held in reserve,
were used to pay off a floating rate loan.
    
    $59.6 million of the loan proceeds, along with $11.7 million of cash, were used to
defease a fixed rate loan.
    
    $15.7 million was held in a restricted cash account, pending resolution of the terms of
a ground lease relating to one of the hotels secured by the new loan.
      Cash Flow
  35




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##### Table of Contents



Operating activities
  Investing activities
   Financing activities
   Debt and Contractual Obligations
  Off Balance Sheet Arrangements
  Market Risk
    Forward-looking Statements
  36




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##### Table of Contents




    
    The effects of regional, national and international economic conditions;
    
    Competitive conditions in the lodging industry and increases in room supply;
    
    The effects of actual and threatened terrorist attacks and international
conflicts in the Middle East and elsewhere, and their impact on domestic and
international travel;
    
    The effectiveness of changes in management and our ability to retain qualified
individuals to serve in senior management positions;
    
    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;
    
    Seasonality of the hotel business;
    
    The effects of unpredictable weather events such as hurricanes;
    
    The financial condition of the airline industry and its impact on air travel;
    
    The effect that Internet reservation channels may have on the rates that we are able to charge for hotel rooms;
    
    Increases in the cost of debt and our continued compliance with the terms of our loan agreements;
    
    The effect of the majority of our assets being encumbered on our borrowings and future growth;
    
    Our ability to meet the continuing listing requirements of the American Stock Exchange;
    
    The effect of self-insured claims in excess of our reserves, or our ability to
obtain adequate property and liability insurance to protect against losses, or to obtain
insurance at reasonable rates;
    
    Potential litigation and/or governmental inquiries and investigations;
    
    Laws and regulations applicable to our business, including federal, state or
local hotel, resort, restaurant or land use regulations, employment, labor or disability
laws and regulations;
    
    A downturn in the economy due to several factors, including but not limited to,
high energy costs, natural gas and gasoline prices; and
    
    The risks identified in our Form 10-K for the year ended December 31, 2006 under
Risks Related to Our Business and Risks Related to Our Common Stock.
  Inflation
  37




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
   38




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 6. Exhibits
  39




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##### Table of Contents



SIGNATURES
  LODGIAN, INC.By:
    
    /s/ EDWARD J. ROHLING

Edward J. RohlingDate: May 9, 2007
    
    
    
    President and
Chief Executive OfficerBy:
    
    /s/ JAMES A. MACLENNAN

James A. MacLennanDate: May 9, 2007
    
    
    
    Executive Vice President and
Chief Financial Officer
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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description2.1
    
    Disclosure Statement for Joint Plan of Reorganization of Lodgian, Inc., et al(other than the
CCA Debtors), Together with the Official Committee of Unsecured Creditors under Chapter 11 of
the Bankruptcy Code, dated September 26, 2002) (Incorporated by reference to Exhibit 10.6 to
the Companys Annual Report for the period ended December 31, 2003 (File No. 1-14537), filed
on March 9, 2004).2.2
    
    First Amended Joint Plan of Reorganization of Lodgian, Inc., et al(Other than CCA Debtors),
Together with the Official Committee of Unsecured Creditors under Chapter 11 of the Bankruptcy
Code, dated September 26, 2002) (Incorporated by reference to Exhibit 10.7 to the Companys
Annual Report for the period ended December 31, 2003 (File No. 1-14537), filed on March 9,
2004).2.3
    
    Order Confirming First Amended Joint Plan of Reorganization of Lodgian, Inc., et alissued on
November 5, 2002 by the United States Bankruptcy Curt for the Southern District of New York
(Incorporated by reference to Exhibit 10.8 to the Companys Annual Report for the period ended
December 31, 2003 (File No. 1-14537), filed on March 9, 2004).2.4
    
    Disclosure Statement for Joint Plan of Reorganization of Impac Hotels II, L.L.C. and Impac
Hotels III, L.L.C. Together with the Official Committee of Unsecured Creditors Under Chapter
11 of the Bankruptcy Code (Incorporated by reference to Exhibit 10.13.1 to the Companys
Annual Report for the period ended December 31, 2003 (File No. 1-14537), filed on March 9,
2004).2.5
    
    Joint Plan of Reorganization of Impac Hotels II, L.L.C. and Impac Hotels III, L.L.C. Together
with the Official Committee of Unsecured Creditors under Chapter 11 of the Bankruptcy Code
(Incorporated by reference to Exhibit 10.13.2 to the Companys Annual Report for the period
ended December 31, 2003 (File No. 1-14537), filed on March 9, 2004).2.6
    
    Order Confirming Joint Plan of Reorganization of Impac Hotels II, L.L.C. and Impac Hotels
III, L.L.C. Together with the Official Committee of Unsecured Creditors under Chapter 11 of
the Bankruptcy Code (Incorporated by reference to Exhibit 10.13.3 to the Companys Annual
Report for the period ended December 31, 2003 (File No. 1-14537), filed on March 9, 2004).2.7
    
    Post Confirmation Order and Notice for Joint Plan of Reorganization of Impac Hotels III,
L.L.C. Together with the Official Committee of Unsecured Creditors under Chapter 11 of the
Bankruptcy Code (Incorporated by reference to Exhibit 10.13.4 to the Companys Annual Report
for the period ended December 31, 2003 (File No. 1-14537), filed on March 9, 2004).3.1
    
    Certificate of Correction to the Second Amended and Restated Certificate of Incorporation and
Second Amended and Restated Certificate of Incorporation of Lodgian, Inc. (Incorporated by
reference to Exhibit 3.1 to Amendment No. 2 to the Companys Registration Statement on Form
S-1 (File No. 333-113410), filed on June 4, 2004).3.2
    
    Amended and Restated Bylaws of Lodgian, Inc. (Incorporated by reference to Exhibit 3.4 to the
Companys Annual Report for the period ended December 31, 2003 (File No. 1-14537), filed on
March 9, 2004).4.1
    
    Specimen Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to Amendment No.
2 to the Companys Registration Statement on Form S-1 (File No. 333-113410), filed on June 6,
2004).4.2
    
    Class A Warrant Agreement, dated as of November 25, 2002, between Lodgian, Inc. and Wachovia
Bank, N.A. (Incorporated by reference to Exhibit 10.9 to the Companys Annual Report for the
period ended December 31, 2003 (File No. 1-14537), filed on March 9, 2004).4.3
    
    Class B Warrant Agreement, dated as of November 25, 2002, between Lodgian, Inc. and Wachovia
Bank, N.A. (Incorporated by reference to Exhibit 10.10 to the Companys Annual Report for the
period ended December 31, 2003 (File No. 1-14537), filed on March 9, 2004).4.4
    
    4.5 Preferred Share Exchange Agreement, dated June 22, 2004, by and among Lodgian, Inc. and
the record and/or beneficial stockholders as signatories thereto (Incorporated by reference
to Exhibit 10.9 to the Companys Quarterly Report for the period ended June 30, 2004 (File No.
1-14537), filed on August 16, 2004).10.1
    
    Employment Agreement between Lodgian, Inc. and Daniel E. Ellis, dated May 2, 2004
(Incorporated by reference to Exhibit 10.4 to the Companys Quarterly Report for the period
ended March 31, 2004 (File No. 1-14537), filed with the Commission on May 14, 2004).
 41




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##### Table of Contents



ExhibitNumber
    
    Description10.2
    
    Amended and Restated Executive Employment Agreement between Lodgian, Inc. and Daniel E.
Ellis, dated March 29, 2007 (Incorporated be reference to Exhibit 10.2 to the Companys
Current Report on Form 8-K (File No. 1-12537), filed with the Commission on March 30, 2007).10.3
    
    Participation Form for Daniel E. Ellis under the Lodgian, Inc. Executive Incentive Plan
(Incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K (File
No. 1-14537), filed with the Commission on February 6, 2006).10.4
    
    Agreement for Consulting Services between Lodgian, Inc. and Linda Borchert Philp dated
December 19, 2005 (Incorporated by reference to Exhibit 10.1 to the Companys Current Report
on Form 8-K (File No. 1-14537), filed with the Commission on December 22, 2005).10.5
    
    Release Agreement between Lodgian, Inc. and Linda Borchert Philp dated December 16, 2005
(Incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K (File
No. 1-14537), filed with the Commission on December 22, 2005).10.6
    
    Executive Employment Agreement between Edward J. Rohling and Lodgian, Inc., dated July 12,
2005 (Incorporated by reference to Exhibit 10.35 to the Companys Quarterly Report for the
period ended June 30, 2005 (File No. 1-14537), filed with the Commission on August 9, 2005).10.7
    
    Amended and Restated Executive Employment Agreement between Edward J. Rohling and Lodgian,
Inc., dated April 23, 2007 (Incorporated by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K (File No. 1-14537). Filed with the Commission on April 26, 2007).10.8
    
    Restricted Stock Award Agreement between Edward J. Rohling and Lodgian, Inc., dated July 15,
2005 (Incorporated by reference to Exhibit 10.36 to the Companys Quarterly Report for the
period ended June 30, 2005 (File No. 1-14537), filed with the Commission on August 9, 2005).10.9
    
    Employment Agreement between Lodgian, Inc. and James A. MacLennan dated March 1, 2006
(Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K (File
No. 1-14537), filed with the Commission on March 3, 2006).10.10
    
    Amended and Restated Executive Employment Agreement between Lodgian, Inc. and James A.
MacLennan dated March 29, 2007 (Incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K (File No.1-14537), filed with the Commission on March 30, 2007).10.11
    
    Restricted Stock Award Agreement between Lodgian, Inc. and James A. MacLennan dated March 1,
2006 (Incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K
(File No. 1-14537), filed with the Commission on March 3, 2006).10.12
    
    Participation Form for James A. MacLennan under the Lodgian, Inc. Executive Incentive Plan
(Incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K (File
No. 1-14537), filed with the Commission on March 3, 2006).10.13
    
    2002 Amended and Restated Stock Incentive Plan of Lodgian, Inc. (Incorporated by reference
to Exhibit 10.5 to Amendment No. 2 to the Companys Registration Statement on Form S-1 (File
No. 333-1113410), filed on June 6, 2004).10.14
    
    First Amendment to the Amended and Restated 2002 Stock Incentive Plan of Lodgian, Inc. dated
April 28, 2005 (Incorporated by reference to Exhibit 10.34 to the Companys Quarterly Report
for the period ended March 31, 2005 (File No. 1-14537), filed with the Commission on May 10,
2005).10.15
    
    Form of Stock Option Award Agreement (Incorporated by reference to Exhibit 10.37 to the
Companys Annual Report for the period ended December 31, 2004 (File No. 1-14537), filed with
the Commission on March 23, 2005).10.16
    
    Form of Restricted Stock Award Agreement (Incorporated by reference to Exhibit 10.40 to the
Companys Quarterly Report for the period ended June 30, 2005 (File No. 1-14537), filed with
the Commission on August 9, 2005).10.17
    
    Lodgian, Inc. 401(k) Plan, As Amended and Restated Effective September 1, 2003 (Incorporated
by reference to Exhibit 20.1.1 to Amendment No. 2 to the Companys Registration Statement on
Form S-1 (File No. 333-113410), filed on June 6, 2004).10.18
    
    Executive Employment Agreement between Mark D. Linch and Lodgian, Inc., dated June 8, 2006
(Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K (File
No. 1-14537), filed with the Commission on June 14, 2006).10.19
    
    Amended and Restated Executive Employment Agreement between Mark D. Linch and Lodgian, Inc.
dated March 29, 2007 (Incorporated by reference to Exhibit 10.3 to the Companys Current
Report on Form 8-K (File No. 1-14537),
filed with the Commission on March 30, 2007).
 42




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##### Table of Contents



ExhibitNumber
    
    Description10.20
    
    Executive Employment Agreement between Donna B. Cohen and Lodgian, Inc. dated March 29, 2007
(Incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K (File
No. 1-14537), filed with the Commission on March 30, 2007).10.21
    
    Lodgian, Inc. Executive Incentive Plan (Covering the calendar years 2006-2008).
(Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K (File
No. 1-14537), filed with the Commission on February 6, 2006).10.22
    
    Form of Restricted Stock Award Agreement for Employees (Incorporated by reference to Exhibit
10.1 to the Companys Current Report on Form 8-K/A (File No. 1-14537), filed with the
Commission on March 6, 2007).10.23
    
    Form of Restricted Stock Award Agreement for Non-Employee Directors (Incorporated by
reference to Exhibit 10.2 to the Companys Current Report on Form 8-K/A (File No. 1-14537),
filed with the Commission on March 6, 2007).31.1
    
    Sarbanes-Oxley Section 302 Certification by the CEO.**31.2
    
    Sarbanes-Oxley Section 302 Certification by the CFO.**32
    
    Sarbanes-Oxley Section 906 Certification by the CEO and CFO.**
 
 **
    
    Filed herewith. 43