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SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
SECTIONS 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934


|           |  |                                                                                                 
|---------- |  | ------------------------------------------------------------------------------------------------
|(Mark One)
|x          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|           |  | For the fiscal
    year ended December 31, 2002                                                 
|           |  | 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 number 001-11975

Boykin Lodging Company

(Exact Name of Registrant as Specified in Its
Charter)


|                                                                                                                      |  |                                               
|--------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|Ohio(State or Other Jurisdiction of
    Incorporation or Organization)                                                |  | 34-1824586(I.R.S. Employer Identification No.)
|                                                                                                                     
|Guildhall Building, Suite 1500,
    45 W. Prospect Avenue,
    Cleveland, Ohio(Address of Principal Executive Office) |  | 44115(Zip Code)                               
|                                                                                                                     
|(216) 430-1200(Registrants telephone number,
    including area code)                                               

Securities registered pursuant to
Section 12(b) of the Act:

|                                                                                                                                               |  |                                     
|---------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------
|Title of Class                                                                                                                                 |  | Name of Exchange on Which Registered
|                                                                                                                                               |  |                                     
|Common Shares, without Par Value                                                                                                               |  | New York Stock Exchange             
|Depositary Shares, each representing  1/10
    of a share of 10 1/2% Class A Cumulative Preferred
    Shares, Series 2002-A, without par value |  | New York Stock Exchange             

Securities registered pursuant to
Section 12(g) of the Act: None

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days.  Yes x  No o

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of
registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K.  o

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).  x

The aggregate market value of the voting shares
held by non-affiliates of the registrant, as of March 13,
2003, and June 30, 2002 was approximately $187 million and
$124 million, respectively. The aggregate market value was
calculated by using the closing price of the shares as of the
respective dates, or the immediate preceding business day, on
the New York Stock Exchange.

As of March 13, 2003, the registrant had
17,323,587 common shares issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Definitive Proxy Statement for
the Annual Meeting of Shareholders to be held May 22, 2003
are incorporated by reference into Part III, Items 10, 11, 12,
and 13 of this report.



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TABLE OF CONTENTS



|                                                |                                                                                               |  |  |  |  |  |  | 
|----------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|FORWARD LOOKING STATEMENTS                     
|PART I                                         
|                                                | Item 1. Business                                                                             
|                                                | Item 2. Properties                                                                           
|                                                | Item 3. Legal Proceedings                                                                    
|                                                | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II                                        
|                                                | Item 5. Market for Registrants Common Shares and Related Shareholder Matters                
|                                                | Item 6. Selected Financial Data                                                              
|                                                | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                          
|                                                | Item 8. Consolidated Financial Statements and Supplemental Data                              
|                                                | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III                                       
|                                                | Item 10. Directors and Executive Officers of the Registrant                                  
|                                                | Item 11. Executive Compensation                                                              
|                                                | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                                                | Item 13. Certain Relationships and Related Transactions                                      
|                                                | Item 14. Controls and Procedures                                                             
|PART IV                                        
|                                                | ITEM 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                    
|SIGNATURES                                     
|EXHIBIT INDEX                                  
|EX-10.21 Description of Employment Arrangement 
|EX-12 Statement Regarding Computation of Ratios
|EX-21  Subsidiaries of the Registrant          
|EX-23.1 Independent Auditors Consent           



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FORWARD LOOKING STATEMENTS

This Form 10-K and the documents
incorporated by reference herein contain statements that
constitute forward-looking statements. Those statements appear
in a number of places in this Form 10-K and the documents
incorporated by reference herein and include statements
regarding our intent, belief or current expectations or those of
our directors or officers with respect to:



| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | Leasing, management or performance of the hotels;                                                                                          
|
| |  | Our plans for expansion, conversion or renovation
    of the hotels;                                                                       
|
| |  | Adequacy of reserves for renovation and
    refurbishment;                                                                                 
|
| |  | Our financing plans;                                                                                                                       
|
| |  | Our continued qualification as a REIT under
    applicable tax laws;                                                                       
|
| |  | Our policies and activities regarding
    investments, acquisitions, dispositions, financings, conflicts
    of interest and other matters;
|
| |  | National and international economic, political or
    market conditions; and                                                               
|
| |  | Trends affecting us or any hotels financial
    condition or results of operations.                                                       

You can identify the forward-looking statements
by their use of forward-looking words, such as
believes, expects, may,
will, should, seeks,
intends, plans, estimates,
or anticipates, or the negative of those words or
similar words. You are cautioned that any such forward-looking
statement is not a guarantee of future performance and involves
risks and uncertainties, and that actual results may differ
materially from those in the forward-looking statement as a
result of various factors. The factors that could cause actual
results to differ materially from those expressed in a
forward-looking statement include, among other factors,
financial performance, real estate conditions, execution of
hotel acquisition or disposition programs, changes in local or
national economic conditions and their impact on the occupancy
of our hotels, military action, terrorism, hurricanes, changes
in interest rates, changes in local or national supply and
construction of new hotels, changes in profitability and margins
and the financial condition of our operators and lessee and
other similar variables.

The information contained in this Form 10-K
and in the documents incorporated by reference herein and in
Boykins periodic filings with the Securities and Exchange
Commission also identifies important factors that could cause
such differences.

With respect to any such forward-looking
statement that includes a statement of its underlying
assumptions or bases, we caution that, while we believe such
assumptions or bases to be reasonable and have formed them in
good faith, assumed facts or bases almost always vary from
actual results, and the differences between assumed facts or
bases and actual results can be material depending on the
circumstances. When, in any forward-looking statement, we or our
management express an expectation or belief as to future
results, that expectation or belief is expressed in good faith
and is believed to have a reasonable basis, but there can be no
assurance that the stated expectation or belief will result or
be achieved or accomplished.

1



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##### Table of Contents






PART I






|        |         
|------- | --------
|Item 1. | Business

(a) General Development of
Business



| |                             
| | ----------------------------
| | About Boykin Lodging Company

Boykin Lodging Company, an Ohio corporation, is a
real estate investment trust (REIT) that as of
March 13, 2003 owned interests in 31 hotels located
throughout the United States. Boykin Lodging was formed and
completed an initial public offering in 1996 to continue and
expand the over 40-year history of hotel ownership, acquisition,
redevelopment and repositioning activities of its predecessors,
Boykin Management Company and its affiliates (the Boykin
Group). Boykin Hotel Properties, L.P., an Ohio limited
partnership (the Partnership), is the operating
partnership entity that transacts business and holds the direct
and indirect ownership interests in our hotels. As of
December 31, 2002, Boykin Lodging had an 85.1% ownership
interest in, is the sole general partner of and does all its
business through the Partnership.



| |                             
| | ----------------------------
| | Business and Growth Strategy

Our primary business objectives are to maximize
current returns to our shareholders by increasing cash flow
available for distribution and long-term total returns to
shareholders through appreciation in value of our common shares.
We seek to achieve these objectives through the following key
business strategies relating to the ownership and operation of
our hotels:



| |   |                                                           
| | - | ----------------------------------------------------------
| |  | Maximizing operating cash flows of our hotels
    through:

| |   |                                                                          
| | - | -------------------------------------------------------------------------
| |  | Aggressive asset management to maximize revenue
    and control expenses;
| |  | Use of the Taxable REIT Subsidiary
    (TRS) structure;                
| |  | Reinvestment in our hotels; and                                          
| |  | Strategic brand positioning.                                             



| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | Identifying opportunities to enhance returns on
    our hotels by investing in new initiatives such as:

| |   |                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Developing ancillary conference centers meeting
    International Association of Conference Centers
    (IACC) standards within our existing hotels and in
    newly acquired properties; and
| |  | Expanding and redeveloping our properties to
    improve asset performance.                                                                                                                    



| |   |                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Managing our hotel portfolio mix to enhance its
    potential for growth in RevPAR, meaning room revenue per
    available room, and operating income by:

| |   |                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------
| |  | Identifying key markets with high barriers to
    entry for future acquisitions;                                                          
| |  | Acquiring upscale commercial and resort hotels
    located in these key markets at a discount to their replacement
    cost;              
| |  | Acquiring assets in these markets with
    repositioning and rebranding opportunities; and                                                
| |  | Selling assets that we believe have lower
    long-term growth prospects because of their physical
    characteristics or market location.



| |   |                                                                                 
| | - | --------------------------------------------------------------------------------
| |  | Optimizing our capital structure and improving
    our financial flexibility by:

| |   |                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------
| |  | Managing our leverage and debt service coverage
    ratios;                                                         
| |  | Expanding the nature and sources of our capital;                                                                    
| |  | Utilizing secured debt when it can be structured
    to provide flexibility regarding the collateral properties; and
| |  | Using joint ventures when appropriate to maximize
    return on invested capital and manage risk exposure.          

Our management has substantial hotel operating,
development, acquisition and transactional experience. Our
executives have over 100 years of combined experience in
the hotel industry and have directly overseen the acquisition,
disposition, recapitalization, development and repositioning of
billions of dollars of hotel assets throughout the United States.

2



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| |                     
| | --------------------
| | Highlights from 2002



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In October we completed a $45.0 million
    offering of 1,800,000 depositary shares. Each depositary share
    represents a 1/10 interest in one share of our 10 1/2%
    Class A Cumulative Preferred Shares, Series 2002-A and has
    a liquidation preference of $25 per share. Dividends on the
    preferred depositary shares are payable quarterly, upon
    authorization of the Board of Directors, beginning in
    January 2003 at an annual rate of $2.625 per depositary
    share. The shares are listed and traded on the New York Stock
    Exchange. Net proceeds from the offering were used to repay the
    outstanding balance on our $65.0 million credit facility
    and pay down over $3.0 million on our $45.0 million
    term loan. An additional 10,000 depositary shares were later
    issued to cover over-allotments.                                           
|
| |  | In August, our Board of Directors reinstated a
    quarterly dividend on our common shares by declaring a dividend
    of $0.18 per common share for the third quarter of 2002. We had
    suspended our regular quarterly dividend in the fourth quarter
    of 2001 due to the hotel operating environment immediately
    following the September 11, 2001 terrorist attacks. In that
    environment, our priority was to retain cash to preserve capital.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | During 2001, we completed a $2.7 million
    renovation of a 60-unit tower at the Pink Shell Beach Resort, in
    Ft. Myers Beach, Florida. The renovated studio units are being
    sold as Sanibel View Villas Condominiums. During 2002, we sold
    40 of the 60 available units generating revenues of
    approximately $8.7 million. All of the unit owners have
    entered into agreements to make their units available for rental
    as hotel rooms, which allows us to continue generating an income
    stream from the sold units. The unsold units are also being used
    for rental as hotel rooms. Through March 13, 2003, we have
    closed on the sales of an additional 12 units, with only one of
    the unit owners not entering into an agreement to make their
    units available to us for rental as hotel rooms.                                                   
|
| |  | We commenced the construction of a new 92-unit
    hotel condominium tower called White Sand Villas at our Pink
    Shell Beach Resort, which will significantly upgrade the
    character of the resort. Total construction costs of the
    condominium tower are estimated to be approximately
    $28.0 million, including expenditures of $3.6 million
    through year end, with a scheduled completion date during the
    fourth quarter of 2003. To finance the construction of the White
    Sand Villas, in January 2003 we closed on a
    $23.3 million construction loan which is secured by the
    project. The remaining funding of construction costs will be
    provided by deposits already collected on pre-sales of the
    condominium units. Through March 13, 2003, we had entered
    into contracts for the sales of 70 units for gross proceeds of
    $28.7 million.
|
| |  | We completed the guestroom portion of the
    renovation of our newly renamed and repositioned four-star
    quality independent property, Hotel 71, located in downtown
    Chicago. The renovation increased the number of rooms at the
    property by 33 units, bringing the total number of rooms to 454.
    The portion of the renovation related to the lobby area was
    completed in early 2003. Through year end, the joint venture
    which owns the property had spent approximately
    $21.3 million towards the total renovation costs, which
    were funded through equity contributions to the joint venture
    and draws on the construction loan previously secured by the
    joint venture.                                                                                                                                                                             
|
| |  | We completed the approximate $6.0 million
    renovation and reflagging of our Lyndhurst, New Jersey property
    to a Courtyard by Marriott.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | After conducting extensive research, we
    identified the opportunity to enhance certain of our properties
    by adding ancillary conference centers at these hotels.
    Construction of the facilities has commenced at our hotel in
    Berkeley, for which we anticipate completion of the upgraded
    facilities and receipt of IACC accreditation in the third
    quarter of 2003. We have progressed to the design stage for two
    other properties, the Doubletree Omaha and the Doubletree
    Portland Lloyd Center.                                                                                                                                                                                                                                                                                                                                                              
|
| |  | We own Marriotts Hunt Valley Inn through a
    joint venture with Davidson Hotel Company
    (Davidson). The joint venture formed a new lessee,
    Hunt Valley Leasing, Inc. (Hunt Valley) which is a
    subsidiary of the partnership and qualifies as a TRS, to lease
    the hotel. The new lease was effective as of September 1,
    2002. Davidson continues to manage the hotel subject to a
    management agreement with the lessee.                                                                                                                                                                                                                                                                                                                                                                                                                                              

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This latest transaction reinforces our strategy
of implementing the TRS structure at the properties in which we
own an interest. Through the year ended December 31, 2001,
the Partnership leased its properties to established hotel
operators. Effective January 1, 2002, we took advantage of
the restructuring available under the Work Incentives
Improvement Act of 1999 (REIT Modernization Act).
The REIT Modernization Act amended the tax laws to permit REITs,
like us, to lease hotels to a subsidiary that qualifies as a TRS
as long as the TRS engages an independent hotel management
company to operate those hotels under a management contract.
Effective January 1, 2002, we acquired the leasehold
interests in 28 of our hotels from two of our operators, Boykin
Management Company Limited Liability Company (BMC)
and Interstate Hotels and Resorts (Interstate) and
entered into agreements with them to continue to manage the
aforementioned properties.

Following this September 2002 transaction,
all but one of the 33 properties in which we owned an interest
at December 31, 2002 were operated under the TRS structure.
Subsequent to the respective TRS transactions, the results of
operations of the hotels operated by BMC, Hilton, Davidson and
Interstate are recorded in our financial statements rather than
the percentage lease revenue from these properties.

(b) Financial Information About Industry
Segments

All of Boykin Lodging Companys operations
are in the hotel industry.

(c) Narrative Description of
Business



| |                                             
| | --------------------------------------------
| | Boykin Lodging Companys Hotel
    Portfolio

During February 2003, we sold two of our
properties, the Knoxville Hilton and the Lake Norman Hampton
Inn; therefore, as of March 13, 2003, our hotel portfolio
includes 30 full-service hotels and one limited-service hotel.
All hotels in our portfolio compete in the upscale to moderate
price segment of the hospitality market. Refer to Item 2(a)
Hotel Properties on page 15 for a current
listing of our hotels. Also refer to Item 7 
Managements Discussion and Analysis of Financial
Condition and Results of Operations on page 23 for a
chart of hotel operating data for 2002 and 2001.



| |                                       
| | --------------------------------------
| | Application of Business
    Strategies

Maximizing Operating Cash Flow

Aggressive
Asset Management

We closely monitor revenue generation, including
rates, group pacing and yield management, and suggest
improvements to managers initiatives to improve hotel
performance. We also utilize the Smith Travel Research
(STR) reports to evaluate the performance of each of
our hotels relative to its competitive set (the hotels in its
market that compete for the same business).

We work closely with all of our property managers
to improve cost control initiatives. Our post-September 11,
2001 action plan is an example of these activities. In response
to the decline in travel precipitated by the terrorist attacks,
our hotel management companies implemented significant
cost-cutting initiatives at the property level to partially
offset the declines in revenues at our properties. Throughout
2002 we continued to monitor the margins at our properties,
which resulted in the gross operating profit after management
fees of the 30 consolidated hotels operated under the TRS
structure to be 26.4% in 2002 versus 27.1% in the prior year.

Use
of the TRS Structure

We are now able to benefit from the cost
reductions in our hotels because we have implemented the TRS
structure for all but one of our hotel properties. We believe
that the TRS structure will enhance our long-term performance,
better align the interests of our operators with ours, and allow
us to benefit from expense management initiatives, which can be
implemented and monitored more closely. In addition, we believe
that our flexibility has been significantly enhanced because we
can terminate our new management agreements with BMC, Interstate
and Davidson without penalty, while our former percentage leases
provided for our payment of significant termination penalties
even if we sold a property.

4



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Reinvestment
in Hotel Properties

We believe that our regular program of capital
improvements at our hotels, including replacement and
refurbishment of furniture, fixtures, and equipment, helps
maintain and enhance their competitiveness and maximizes their
profitability. Consistent with this strategy, we have made
significant renovations at several of our hotels in recent
years. In 2002, 2001 and 2000 we spent $13.5 million,
$23.0 million and $18.4 million, respectively, on
renovations, excluding the projects at our Chicago, Illinois and
Lyndhurst, New Jersey hotels which are owned by unconsolidated
joint ventures. This represented 5%, 9% and 6% of 2002, 2001 and
2000 consolidated hotel revenues, respectively.

Strategic
Brand Positioning

We maximize our market share and revenue by
taking advantage of our sales and marketing orientation to
identify the most effective branding strategy for each hotel and
to further leverage the selected brands with effective direct
sale strategies. Factors we consider in determining the most
effective branding strategy are:



| |   |                                                                          
| | - | -------------------------------------------------------------------------
| |  | Brand strengths and their current presence in the
    specific market;   
|
| |  | Expected contribution to revenues;                                       
|
| |  | Expected capital requirements and ongoing costs
    of the franchise; and
|
| |  | Strengthening strategic franchisor relationships.                        

In certain circumstances, we have concluded that
operating a hotel independent of a franchise affiliation is the
best branding strategy. Such is the case with the French Lick
Springs Resort and Spa in French Lick, Indiana, and Hotel 71 in
Chicago.

The remainder of our portfolio contains
properties that are currently operated under franchise license
agreements with premier nationally-recognized hotel chains
including Marriott®, Radisson®, Hilton®, Embassy
Suites®, Doubletree®, Holiday Inn®, Hampton
Inn® and Quality Suites®.

Initiatives to Enhance Returns on
Hotels

IACC
Ancillary Conference Centers

We have identified a strategic opportunity to
enhance the revenue streams from certain of our existing hotels
by developing ancillary conference centers meeting IACC
standards within those hotels. Each conference center will be a
business unit inside an existing full-service hotel, designed to
complement the existing transient and group business.

The conference center strategy is attractive to
us because it creates demand for our guest and meeting rooms
from a new client base, those who prefer to hold meetings at
conference centers that meet IACC standards or who otherwise
need the types of services provided at IACC conference centers.
IACC requires facilities to meet certain technical standards
regarding technology, telecommunications, lighting, sound
transmission and other items, which standards appeal
particularly to corporate and institutional training programs.
Further, the conference center services and pricing are designed
on a complete meeting package basis, meaning that the users pay
a fixed daily price per person on an all-inclusive basis (rooms,
meals, breaks, telephone services, etc.), regardless of
utilization, thus making the cost of the services predictable
for the planner and the hotel.

The benefit of this pricing structure to us is
that we anticipate a higher RevPOR, meaning revenue per occupied
room, because these guests purchase meals and other services at
the hotel as a part of their packages. Additionally, we expect
higher operating margins from this business segment because
predictable utilization of these services results in the
achievement of greater operational efficiency.

Construction is underway at our first target
property, our hotel in Berkeley, and we are in the design phase
for such facilities at two additional properties.

5



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Property
Redevelopment and Expansion

We are undertaking a series of projects at our
Pink Shell Beach Resort in Ft. Myers Beach, Florida to enhance
this resorts position to a four-star level and to take
advantage of the opportunity to sell portions of the property
while retaining long term cash flow. In 2001, we completed a
$2.7 million renovation of the Sanibel View Villas, a
60-unit tower, which we have been selling as condominium units.
During 2002, we commenced construction of a second condominium
hotel at the resort, a new 92-unit tower to be called White Sand
Villas. The construction entails eventual removal of 53
cottages, 38 of which had been removed at year end. The units in
the new tower will be sold as condominiums, with the expectation
that the owners would put their unused room nights back to the
resort by contract. Therefore, in addition to the cash flow
generated from selling the units, we expect much of the sold
inventory will be placed in our rental program, which will
provide us with continuing fee income. Through March 13,
2003, we had entered into contracts for the sales of 70 units
for gross proceeds of $28.7 million.

We have also completed the renovation of the
newly-renamed Hotel 71 in downtown Chicago into a four-star
level independent hotel and the renovation and conversion of our
Lyndhurst, New Jersey property to a Courtyard by Marriott.

Managing Our Hotel Portfolio Mix

Acquiring
Upscale Commercial and Resort Hotels in Key Markets

Our acquisition criteria focuses on hotels in the
upper upscale and upscale segments located in major metropolitan
markets and destination beach markets. These markets have
historically outperformed other markets because of their high
barriers to entry and diversified demand generators. Our current
target is greater metropolitan markets including San Francisco,
Boston, New York, Washington, D.C. and Los Angeles. Our success
in implementing this strategy is illustrated by our acquisition
of the Meadowlands-Lyndhurst Courtyard by Marriott in the New
York City metropolitan area and Hotel 71 in Chicago.

We also intend sell selected non-core suburban
assets or those hotels not in our target markets. Funds for
future acquisitions or development of hotels are expected to be
derived, in whole or in part, from capital obtained from
borrowings, from the proceeds of the sale of non-strategic
hotels, from additional issuances of common shares, preferred
shares, or other securities, from potential joint venture
partners and from cash flows from operations. Our credit
facility permits us to spend up to $50 million for property
acquisitions.

Disposing
of Assets to Provide Capital for Better Investment
Opportunities

We intend to sell assets that we believe have
lower long-term growth prospects because of physical
characteristics or market location. Due to our efforts in
marketing certain of the properties and modifying our loans, in
2003 we were able to complete the sale of two properties, the
Knoxville Hilton and the Lake Norman Hampton Inn, for total
gross proceeds of $15.2 million.

We intend to maintain a geographically
diversified hotel portfolio and may also cluster hotels within
certain primary markets in order to take advantage of
operational and managerial economies of scale. We will acquire
or develop additional hotel properties only as suitable
opportunities arise, and will not undertake acquisition or
development of properties unless adequate sources of capital and
financing are available and the properties are priced
attractively.

Optimizing Our Capital Structure and Improving
Financial Flexibility

Managing
Our Leverage and Debt Service Coverage Ratios

Our goal is to maximize shareholder value by
strategically using debt and other fixed income instruments,
such as preferred equity, to enhance return on common equity
while appropriately managing financial risk. We successfully
completed our $45.3 million offering of preferred
depositary shares in October 2002, the net proceeds of which
were used to pay down our indebtedness.

6



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Expanding
Our Capital Sources

We are focused on enhancing our capital structure
by diversifying our capital sources. Traditionally, we have
utilized secured debt, common equity and joint venture equity to
finance our capital needs. We intend to broaden our sources of
capital through increasing our use of alternative sources of
debt and equity. For example, we are financing the construction
of White Sand Villas through a construction loan and we recently
issued preferred stock. We will continue to evaluate the use of
other financing structures, such as unsecured debt and
convertible securities, relative to our goal of improving
financial flexibility and achieving an attractive cost of
capital. When using secured debt, we will seek enhanced
flexibility in terms of refinancing options and the ability to
allow for substitutions of collateral to facilitate sales of
properties.

Utilizing
Secured Debt with Flexible Collateral Provisions

The majority of our debt is secured by hotel
assets, and we anticipate continuing to use secured debt in the
future in order to minimize our cost of financing. Our secured
financings are generally cross-collateralized; however, certain
of them contain provisions allowing for substitutions of
collateral to facilitate sales of properties. While these rights
in our existing loans are limited, we will seek enhanced
flexibility in our future financings.

Strategically
Utilizing Joint Venture Equity

The use of joint ventures allows us to further
leverage our capital. We will use joint ventures in instances in
which it is strategically advantageous, or to invest in hotels
larger than we would consider appropriate for us to acquire
without a co-venturer in light of the size of our capital base
and leverage ratios. We currently own five hotels in joint
venture structures. Our joint venture partners manage four of
the hotels and one is managed by BMC.

Hotel Operators

In selecting operators, we seek hotel managers
with demonstrated full-service hotel expertise, a stable
operating and financial performance history and an excellent
reputation in the hospitality industry.

As of March 13, 2003, the hotels in our
portfolio were operated by the following entities:

|                                                |  |           |    | 
|----------------------------------------------- |  | --------- | -- | 
|                                                |  | Number   
|Operator                                        |  | of Hotels
|                                                |  |          
|BMC                                             |  |           | 17 | 
|Hilton Hotels Corporation (Hilton)            |  |           | 10 | 
|Interstate                                      |  |           | 1  | 
|Concord Hospitality Enterprises
    (Concord) |  |           | 1  | 
|Davidson                                        |  |           | 1  | 
|Outrigger Lodging Services (Outrigger)        |  |           | 1  | 
|                                                |  |           | 31 | 

BMC.Robert W.
Boykin (our Chairman of the Board and Chief Executive Officer)
and his brother, John E. Boykin, control BMC. BMC has continued
the over 40-year hotel operation and management business of the
Boykin Group. The Boykin Group has capabilities in all phases of
development and management of hotel properties. BMC currently
manages 24 hotel properties located throughout the United
States, including 17 hotels owned by us. BMCs subsidiaries
include an award-winning hotel interior design business and a
hotel and restaurant food, beverage, supply and equipment
purchasing business.

BMC and its owners, who have a substantial
interest in the Partnership, have interests that conflict with
our interests in connection with the structuring and enforcement
of the management agreements and other agreements between us and
BMC and in connection with activities that may maximize profits
for BMC without necessarily

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benefiting us. The following factors align the
interests of BMC and its owners with our interests and to
address these conflicts of interest:




| |   |                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | BMCs owners have retained their equity
    interests in the Partnership;                                                                                                                                                                                                                                          
|
| |  | Our corporate charter documents require that our
    independent directors shall make all determinations to be made
    on behalf of Boykin Lodging Company with respect to the
    relationships or opportunities that represent a conflict of
    interest for any officer or director of Boykin Lodging Company;
|
| |  | Any affiliate of the Boykin Group, including
    Robert W. Boykin and John E. Boykin, will conduct all hotel
    acquisition, development and ownership activities only through
    Boykin Lodging Company;                                                                                                        
|
| |  | BMC is entitled to receive incentive management
    fees with respect to certain hotels it manages for us if the
    hotel operating performance exceeds benchmarks set forth in the
    term of each management agreement;                                                                                        
|
| |  | A portion of BMCs corporate-level senior
    executive teams compensation is based upon the performance
    of our hotels; and                                                                                                                                                                                   
|
| |  | BMC has a deferred compensation plan for its
    corporate-level senior executives under which the value of each
    award is based on, and fluctuates with, the value of our common
    shares.                                                                                                                   

Hilton.Hilton
develops, owns, manages and franchises hotels, resorts and
vacation ownership properties. Its portfolio includes
internationally known and regarded hotel brands including
Hilton®, Doubletree®, Embassy Suites Hotels®,
Hampton Inn®, Hampton Inn & Suites®, Hilton Garden
Inn®, Homewood Suites® by Hilton and Conrad®.
Hilton currently manages our portfolio of ten Doubletree hotels
through Doubletree DTWC Corporation (DTWC), an
affiliate of Hilton.

Interstate.Interstate is a publicly traded hotel
management company that manages hotels throughout the United
States. Interstates portfolio of full-service hotels under
management includes both independent brands and a number of
well-known franchised brands, including Hilton®,
Sheraton®, Marriott®, Embassy Suites®,
Westin® and Doubletree®.

Concord.Concord is
a privately owned hotel investment and management company based
in Cleveland, Ohio. Concord was formed to acquire, develop and
manage both full and limited-service hotel properties. Concord
owns and operates hotels under franchise agreements with such
franchisors as Marriott®, Radisson®, Hilton®,
Residence Inn® and Hampton Inn®.

Davidson.Davidson
is a privately held national hotel management company located in
Memphis, Tennessee. Davidson provides management, development,
consulting and accounting expertise for the hospitality
industry. Davidson operates hotels under franchise agreements
with such franchisors as Marriott®, Embassy Suites®,
Hilton®, Crowne Plaza®, Omni® and Holiday
Inn®.

Outrigger.Outrigger
is a privately held hotel management company based in Encino,
California. Outrigger has operated or currently operates a full
range of hotel products, including Marriott®,
Sheraton®, Hilton®, Residence Inn®, Holiday
Inn®, Radisson®, and many limited service products. In
addition to branded hotels, Outrigger operates upscale boutique
hotels.



| |                                       
| | --------------------------------------
| | Terms of the Management
    Agreements

The following is a summary of the material terms
of the BMC, Interstate and DTWC management agreements and, with
respect to BMC, is qualified in its entirety by reference to the
Form of Management Agreement, which was filed as an exhibit to
our Current Report on Form 8-K, filed on January 14,
2002.

The management agreements have the material terms
described below:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Duration/ Termination.As of December 31, 2002, the BMC
    and Interstate agreements have remaining terms ranging from one
    year and three months to ten years. We have the right to
    terminate each of these agreements upon 90 days advance
    written notice without having to pay any damages or a
    termination fee or penalty. The operator does not have the right
    to terminate prior to expiration of the term absent an event

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | of default by us. The BMC and Interstate
    agreements do not contain renewal provisions. The DTWC agreement
    has an initial term which commenced on January 1, 1998 and
    continues until April 5, 2012. Thereafter, DTWC may extend
    the agreement for up to ten consecutive renewal terms of five
    years each. The DTWC agreement does not provide us with a right
    of termination absent an event of default by DTWC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Management Fees.Most of the agreements provide for
    base and incentive management fees. For all but four of the BMC
    managed hotels, the base fee is 3% of total revenues and the
    incentive fee is 13.5% of the amount by which the gross
    operating profit for a hotel exceeds the agreed upon budgeted
    gross operating profit, up to a maximum of 1.125% of total
    revenues. The base fee for the Interstate managed hotel is 1.25%
    of total revenues. The base fee for DTWC is 3% of gross
    revenues. The DTWC incentive fee is equal to 15% to 25% of gross
    operating profit as defined in the agreement. The DTWC incentive
    fees may be deferred to the extent certain cash flow thresholds
    are not met and such fees which otherwise would have been
    deferred are instead eliminated after $6.0 million of incentive
    fees have been deferred. As of December 31, 2002, the
    $6.0 million deferred incentive fee threshold had been met.
|
| |  | Operating and Other Expenses.All of the agreements provide that we
    are responsible for all operating expenses associated with the
    hotels. In addition, we are responsible to either pay directly
    or reimburse the operator for all other expenses relating to the
    hotel including, without limitation, real estate taxes,
    insurance premiums and debt service.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Indemnification.All
    of the agreements provide that we will hold the operator
    harmless from and against all liabilities, losses, claims,
    damages, costs and expenses that arise from or in connection
    with (a) the performance of the operators services under
    the agreement, (b) any act or omission (whether or not
    willful, tortious, or negligent) of us or any third party,
    (c) or any other occurrence related to the hotel, except
    for events that result from (i) the fraud, willful
    misconduct or gross negligence of the operator or (ii) in
    the case of the BMC and Interstate agreements, the breach by the
    operator of any provision of the agreement.                                                                                                                                                                                                                                                                                
|
| |  | Events of Default.Events of default include
    (a) failure to make any payment required by the agreement,
    (b) failure to observe or perform any term or provision
    after 30 days notice to cure, and (c) in the
    case of BMC and Interstate, failure of either party to perform
    in accordance with the applicable franchise agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Joint Ventures with Third Party
Hotel Operators

We have formed joint ventures with our third
party lessee/operators to align the hotel lessees economic
interests with our economic interests. In certain of these joint
ventures, the lessee/joint venture partners ability to
receive cash flow and equity capital distributions is
subordinated to our receipt of specified minimum distributions.
In addition, certain lessees must maintain a specified net worth
to support its lease payment obligations and pledge its joint
venture interest as security for the lease payment obligations.
We are permitted to subject any majority-owned joint
ventures hotel to a mortgage or to sell the hotel or its
interest in the joint venture without obtaining the affected
joint venture partners consent.

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As of December 31, 2002, we had joint
ventures formed with the following companies or their affiliates
who operated and/or leased the following hotels:

|                                      |  |            |            |            |  |            |    |                                 |  |  |    |   |  |                                             |                              | 
|------------------------------------- |  | ---------- | ---------- | ---------- |  | ---------- | -- | ------------------------------- |  |  | -- | - |  | ------------------------------------------- | ---------------------------- | 
|                                      |  |            |            | Boykin     |  | JV         |    |                                
|                                      |  |            |            | Ownership  |  | Ownership  |    |                                
|Name of Joint Venture                 |  | JV Partner |            | Percentage |  | Percentage |    | Hotel Owned Under Joint Venture
|                                      |  |            |            |            |  |            |    |                                
|BoyStar Ventures, L.P.                |  |            | Interstate |            |  |            | 91 | %                               |  |  | 9  | % |  |                                             | Holiday Inn Minneapolis West | 
|Shawan Road Hotel Limited Partnership |  |            | Davidson   |            |  |            | 91 | %                               |  |  | 9  | % |  |                                             | Marriotts Hunt Valley Inn   | 
|Boykin San Diego, L.L.C               |  |            | Outrigger  |            |  |            | 91 | %                               |  |  | 9  | % |  | Hampton Inn San Diego Airport/Sea World    
|BoyCon, L.L.C                         |  |            | Concord    |            |  |            | 50 | %                               |  |  | 50 | % |  | Meadowlands-Lyndhurst Courtyard by Marriott



| |             
| | ------------
| | Risk Factors

Risks Related to the Hotel
Industry

Public reaction to acts of terrorism or
military action could affect our cash flow.

We are subject to disruptions in the lodging
industry that would likely result from terrorist attacks (actual
or threatened) or military action affecting the United States.
The uncertainty that would result from these events would likely
increase the publics reluctance to travel, which could
adversely affect our operations.

Competition, economic conditions and similar
factors affecting us and the hotel industry generally could
affect our performance.

Our hotels are subject to all operating risks
common to the hotel industry. These risks include:



| |   |                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Competition for guests from other hotels based
    upon brand affiliations, room rates, customer service, location
    and the condition and upkeep of each hotel in general and in
    relation to other hotels in its local market;
|
| |  | Adverse effects of general and local economic
    conditions;                                                                                                                                                                        
|
| |  | Dependence on demand from business and leisure
    travelers, which may fluctuate and be seasonal;                                                                                                                                   
|
| |  | Increases in energy costs, airline fares, and
    other expenses related to travel, which may deter travel;                                                                                                                          
|
| |  | Impact of financial difficulties of the airline
    industry and potential reduction in service on the demand for
    our hotel rooms and collectibility of our outstanding
    receivables from the airlines;                       
|
| |  | Increases in operating costs attributable to
    inflation and other factors; and                                                                                                                                                    
|
| |  | Overbuilding in the hotel industry, especially in
    individual markets.                                                                                                                                                            

Hotel investments are generally illiquid, and
we may not be able to sell our hotels when it is economically
advantageous to do so.

Hotel investments generally cannot be sold
quickly. We may not be able to vary our portfolio promptly in
accordance with our strategies or in response to economic or
other conditions. In addition, provisions of the Internal
Revenue Code of 1986, as amended, limit a REITs ability to
sell its properties in some situations when it may be
economically advantageous to do so.

Risks Related to Our
Operations

The profitability of our hotels depends on the
performance of the hotel management companies.The profitability of our hotels
depends largely upon the ability of the management companies to
generate revenues at our hotels in excess of their operating
expenses. The failure of the management companies to manage the
hotels effectively would adversely affect our cash flow received
from hotel operations. Before January 1, 2002, our cash
flow consisted primarily of lease payments from lessees. Our
lessees were legally bound to make minimum lease

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payments even when such payments exceeded the
cash flow from the hotel. Since implementing our TRS structure
on January 1, 2002, the responsibility and risks associated
with making the minimum lease payments has shifted to lessees
owned by the Partnership. Therefore, we have effectively assumed
the risks associated with operating shortfalls at our hotels
operating under the TRS structure.


We depend to a large degree on the performance
of BMC.BMC currently manages 17 of
our hotels. We are therefore dependent to a large degree on the
operating performance of BMC. BMC has expanded in the past
12 months, with the total number of hotels under its
management increasing from 20 to 24 during that period. We
cannot provide assurance that BMC will successfully manage the
increasing demands that its growth imposes on its management,
administrative, operating and financial resources. Changes in
management at these hotels or at other hotels in the future
could result in temporary service disruptions at the affected
hotels, which could in turn affect their operating and financial
performance.

We are subject to conflicts of interest
involving our Chairman and Chief Executive Officer.Our Chairman and Chief Executive
Officer, Robert W. Boykin, and his brother, John E. Boykin, own
BMC and therefore derive benefits from BMCs management of
17 of our hotels. Accordingly, Mr. Boykin has and will
continue to have conflicts of interest with us. He had conflicts
of interest in connection with our January 2002 TRS
transaction and in connection with the structuring of the
management agreements for the hotels currently managed by BMC.
He will have similar conflicts on renewal of those agreements
and in connection with future management agreements and other
transactions that we may enter into with BMC. Conflicts of
interest may also arise in connection with BMCs management
of our hotels. Under certain circumstances, actions taken and
decisions made by BMC to maximize its profits will not
necessarily benefit us. Additionally, a subsidiary of BMC
provides design services to us for a fee and also receives a
portion of the fees we pay to an independent purchasing agent.
Mr. Boykin may have conflicts of interest with respect to our
procurement of design services and capital goods. Additionally,
the sale of certain of our hotels may result in different and
more adverse tax consequences to Mr. Boykin than would be
experienced by Boykin Lodging and our public shareholders, and
he could seek to influence us not to sell a hotel even though
that sale might otherwise be financially advantageous to us and
our public shareholders. Our articles of incorporation provide
that our independent directors are to make all determinations to
be made on our behalf with respect to the relationships or
opportunities that represent a conflict of interest for any of
our officers or directors.

The covenants in our credit agreements may
restrict our range of operating activities, and we are subject
to refinancing risks.We have a senior
secured credit facility that enables us to borrow up to
$65.0 million and term loans of $45.0 million,
$130.0 million and $108.0 million, respectively, each
of which is secured by certain of our hotel properties. Our
senior secured credit facility and our $45.0 million term
loan require us, among other things, to maintain a minimum net
worth, a coverage ratio of EBITDA to debt service, a coverage
ratio of EBITDA to debt service and fixed charges, and a maximum
leverage ratio, and place limitations on our distributions and
acquisitions. In addition, the $45.0 million term loan
prohibits the sale of the three hotels securing it, and the
$130.0 million term loan and the $108.0 million term
loan limit our ability to sell some of the hotel properties
securing those loans. These credit arrangements may limit our
ability to sell certain hotels whose disposition might be
desirable for strategic or financial purposes. In July 2003, our
credit facility and the $45.0 million term loan mature;
management intends to refinance these facilities. The initial
term of the $108.0 million term loan also expires in
July 2003; however, management intends to utilize the first
of the two one-year extension options available under the terms
of the agreement.

There can be no assurance that we will be able to
renew our credit arrangements upon maturity on favorable terms
or at all. Further, if we are unable to make payments on or to
refinance indebtedness secured by our properties, the properties
could be foreclosed upon with a consequent loss to us of income
and asset value.

A portion of our borrowings bear interest at a
variable rate, as may other indebtedness we incur in the future.
Accordingly, increases in market interest rates could increase
our debt service requirements, which could adversely affect our
cash flow.

Our need to make unexpected capital
expenditures could adversely affect our cash flow.Our hotels require ongoing renovations
and other capital improvements, including periodic replacement
or refurbishment of furniture, fixtures and equipment. If
necessary capital expenditures exceed our expectations, there
can be no

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assurance that sufficient sources of financing
will be available to fund such expenditures. Certain of our
financing agreements place limitations on our capital
expenditures. We may also acquire hotels in the future that
require significant renovation.


We are subject to risks associated with
development, redevelopment and acquisitions of hotels.New and continued development projects
and hotel acquisitions are subject to a number of risks,
including:



| |   |                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------
| |  | the availability of acceptable financing;                                                                           
|
| |  | competition with other entities for investment
    opportunities;                                                   
|
| |  | acquired properties failure to achieve
    anticipated operating results;                                          
|
| |  | construction costs of a property exceeding
    original estimates;                                                  
|
| |  | overruns with respect to the cost of improvements
    to bring acquired properties to the requisite standards; and  
|
| |  | the expenditure of funds on, and the devotion of
    management time to, transactions that may not come to fruition.

We are subject to the risks associated with
investments through joint ventures.
Three of our hotels are owned by joint ventures in which we have
controlling interests. We may enter into similar joint ventures
in the future. Any joint venture investment involves risks such
as the possibility that the co-venturer may seek relief under
federal or state insolvency laws, or have economic or business
interests or goals that are inconsistent with our business
interests or goals. While the bankruptcy or insolvency of our
co-venturer generally should not disrupt the operations of the
joint venture, we could be forced to purchase the
co-venturers interest in the joint venture or the interest
could be sold to a third party. Additionally, we have two joint
ventures in which we have non-controlling interests and we may
enter into similar joint ventures in the future. If we do not
have control over a joint venture, the value of our investment
may be affected adversely by a third party that may have
different goals and capabilities than ours. It may also be
difficult for us to exit a joint venture that we do not control
after an impasse. In addition, a joint venture partner may be
unable to meet its economic or other obligations and we may be
required to fulfill those obligations.

Obligations imposed by our franchise
agreements could affect us adversely.Most of our hotels are subject to
franchise or license agreements. The continuation of a franchise
or license agreement is generally subject to specified operating
standards. Action or inaction on our part or by any of our hotel
managers could result in our failure to meet those standards,
which could result in the loss of the franchise. A franchisor
also could condition the continuation of a franchise on the
completion of capital improvements that we determine are too
expensive or otherwise unwarranted in light of general economic
conditions or the operating results or prospects of the affected
hotel. In that event, we may elect to allow the franchise
agreement to lapse. In any case, the loss of a franchise
agreement could have a material adverse effect upon the
operations or the underlying value of the hotel covered by the
agreement because of the loss of associated name recognition,
marketing support and centralized reservation systems provided
by the franchisor, or because of penalties payable upon early
termination of the agreement. Additionally, the franchise
agreements may place restrictions on the transfer or sale of
assets or make such transfers or sales economically infeasible.

Our insurance may not be adequate to cover
certain risks.We continue to carry
comprehensive liability, fire, flood, earthquake and business
interruption policies that insure us against losses within
policy specification and insurance limits that we believe are
reasonable. Recently, we have also elected under our primary
policy to add coverage for terrorist attacks. There are certain
types of risks, generally of a catastrophic nature, that may be
uninsurable or are not economically insurable. Should an
uninsured loss or a loss in excess of insured limits occur, we
could lose our investment in the affected hotel as well as the
anticipated future cash flow from that hotel, while remaining
obligated for any mortgage indebtedness or other financial
obligations related to that hotel.

Additionally, our insurance costs have increased
significantly over the last two years. Continued increases in
the costs of our insurance coverage could adversely affect our
cash flow.

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The costs of complying with laws and
regulations could adversely affect our cash flow.Our hotels must comply with Title III
of the Americans with Disabilities Act (the ADA) to
the extent that they are public accommodations or
commercial facilities as defined in the ADA.
Noncompliance with the ADA could result in the imposition of
fines or an award of damages to private litigants. If changes in
these laws involve substantial expenditures or must be made on
an accelerated basis, our cash flow could be adversely affected.

Under various federal, state and local laws, an
owner or operator of real estate may be liable for the costs of
removal or remediation of certain hazardous or toxic substances
on, under or in the property. This liability may be imposed
without regard to whether the owner or operator knew of, or was
responsible for, the presence of the substances. Other laws
impose on owners and operators certain requirements regarding
conditions and activities that may affect human health or the
environment. Failure to comply with applicable requirements
could complicate our ability to operate or sell an affected
property and could subject us to monetary penalties, costs
required to achieve compliance and potential liability to third
parties. We may be potentially liable for such costs or claims
in connection with the ownership and operation of our current
hotels and hotels we may acquire in the future. We have not been
notified by any governmental authority of, nor are we aware of,
any material noncompliance, liability or claim relating to
hazardous or toxic substances or other environmental matters in
connection with any of our hotels. Nonetheless, it is possible
that material environmental contamination or conditions exist,
or could arise in the future, in the hotels or on the land upon
which they are located.

We anticipate that we will incur additional costs
for systems, staffing and third party services in maintaining
compliance with new federal laws and regulations addressing
corporate governance issues and with the proposed new listing
requirements of the New York Stock Exchange.

We bear the risk of the timely completion of
the White Sand Villas project.Each
sales contract for the sale of a White Sand Villa unit provides
that the developer, White Sand Villas Development LLC, a
consolidated subsidiary, guarantees that it will complete
construction of the condominium unit within two years following
the date of the sales contract unless such failure is due to
circumstances beyond the control of the developer. The first
sales contracts for White Sand Villa units were entered into in
January 2002. Thirty-seven of the outstanding contracts
were entered into in the first quarter of 2002 and eight were
entered into in the second quarter of 2002. In the event the
developer is unable to complete construction of the units by
January 2004, the developer would potentially be liable to
the first purchaser for damages. Subsequent completion delays
would result in the developer being subject to additional
damages.

Employees

We currently have 16 employees. These employees
perform, directly or through the Partnership, various
acquisition, development, redevelopment and corporate management
functions. All persons employed in the daily operations of the
hotels are employees of the management companies that the
lessees have contracted with to operate the hotels.

Executive Officers of the
Registrant

Our executive officers are elected and serve at
the discretion of the Board of Directors until their successors
are duly chosen and qualified, and are as follows:

|                    |  |     |    |          |  |                                                                     
|------------------- |  | --- | -- | -------- |  | --------------------------------------------------------------------
|Name                |  | Age |    | Position
|                    |  |     |    |         
|Robert W. Boykin    |  |     | 53 |          |  | Chairman of the Board and Chief Executive Officer                   
|Richard C. Conti    |  |     | 53 |          |  | President and Chief Operating Officer                               
|Shereen P. Jones    |  |     | 41 |          |  | Executive Vice President, Chief Financial and
    Investment Officer
|Russ C. Valentine   |  |     | 58 |          |  | Senior Vice President, Acquisitions                                 
|Andrew C. Alexander |  |     | 39 |          |  | Senior Vice President and General Counsel                           

The following is a biographical summary of the
business experience of our executive officers.

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Robert W. Boykin has served as our Chief
Executive Officer since our formation. He served as the
President and Chief Executive Officer of Boykin Management
Company from 1985 until November 1996. He served as Boykin
Management Companys Executive Vice President from 1981
until 1985.

Richard C. Conti has served as our Chief
Operating Officer since May 1998. In January 2001,
Mr. Conti was promoted to President and Chief Operating
Officer. Prior to joining us, Mr. Conti was a Principal and
Director with Coopers & Lybrand L.L.P. Mr. Conti was
responsible for Coopers & Lybrand L.L.P.s hospitality
consulting practice in the Midwest and has been involved in the
hospitality industry for over 25 years. Mr. Conti has
worked closely with many of the leaders in the industry and
brings significant industry knowledge and contacts.

Shereen P. Jones has served as our Executive Vice
President, Chief Financial and Investment Officer since
February 2002. Prior to joining Boykin, she was with Credit
Suisse First Boston in New York where she was Director and
Global Head of Hospitality Investment Banking, spearheading the
development of its lodging investment banking practice.
Previously, she spent seven years with Lehman Brothers, serving
most recently as Senior Vice President and head of its Real
Estate, Lodging and Gaming Mergers & Acquisitions practice.
Prior to joining Lehman, she was Vice President, Corporate
Finance, for Oppenheimer & Co. and Kidder, Peabody & Co.

Russ C. Valentine joined us in June 1999 as
our Senior Vice President, Acquisitions. Prior to joining us,
Mr. Valentine served as Senior Vice President of
Acquisitions for American General Hospitality, a real estate
investment trust that was based in Dallas, Texas.
Mr. Valentine played a significant role in American
Generals successful acquisition program from 1990 to 1998.
Over the past 25 years, Mr. Valentine has worked for
major consulting, investment banking, and hotel organizations.

Andrew C. Alexander became our Vice
President-Corporate Counsel in July 1997 and was promoted to
Senior Vice President and General Counsel in June 1999. From
July 1995 until July 1997, Mr. Alexander served
as Vice President-Corporate Counsel of Renaissance Hotel Group,
N.V., a publicly traded hotel company. From September 1989
until July 1995, Mr. Alexander was an attorney at the
law firm of Calfee, Halter & Griswold, LLP.

There are no arrangements or understandings known
to us between any executive officer and any other person
pursuant to which any executive officer was elected to office.
There is no family relationship between any of our directors or
executive officers and any other director or executive officer.

Corporate
Governance

We believe that the composition, structure and
performance of our Board of Directors, and the significant
partnership interest and share ownership of our officers and
directors, provide us a strong corporate governance function and
serve to align the interests of our management with our
shareholders interests. In addition, the terms of our
arrangements with BMC serve to minimize conflicts of interest
and to align the interests of BMC with the interests of Boykin
Lodging and its shareholders.

Our articles of incorporation require that a
majority of our directors be independent. Under the New York
Stock Exchanges proposed amended listing standards, a
majority of our Board would qualify as independent. Our articles
of incorporation also require that any determination to be made
by our Board in connection with any matter presenting a conflict
of interest for any officer of Boykin Lodging, or for any Boykin
Lodging director who is not an independent director, be made by
our independent directors.

(d) Financial Information About Foreign
and Domestic Operations and Export Sales

All of our operations are conducted in the United
States.

(e) Available Information

We maintain a website at www.boykinlodging.com.
We make available free of charge on our website our annual
reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities
and Exchange Act of 1934, as amended, as soon as reasonably
practicable after we electronically file such material with the
Securities and Exchange Commission.

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##### Table of Contents






Item 2. Properties

(a) Hotel Properties

As of March 13, 2003, we own interests in
the following 31 hotel properties:

|                                            |  |          |       |          |  |  |                      | 
|------------------------------------------- |  | -------- | ----- | -------- |  |  | -------------------- | 
|                                            |  | Number   |       |         
|Property                                    |  | of Rooms |       | Location
|                                            |  |          |       |         
|Doubletree Portland, Lloyd Center           |  |          | 476   |          |  |  | Portland, OR         | 
|Doubletree Sacramento                       |  |          | 448   |          |  |  | Sacramento, CA       | 
|Doubletree Omaha                            |  |          | 413   |          |  |  | Omaha, NE            | 
|Doubletree Kansas City                      |  |          | 388   |          |  |  | Kansas City, MO      | 
|Doubletree Boise                            |  |          | 304   |          |  |  | Boise, ID            | 
|Doubletree Colorado Springs                 |  |          | 299   |          |  |  | Colorado Springs, CO | 
|Doubletree San Antonio                      |  |          | 290   |          |  |  | San Antonio, TX      | 
|Doubletree Spokane Valley                   |  |          | 237   |          |  |  | Spokane, WA          | 
|Doubletree Portland Downtown                |  |          | 235   |          |  |  | Portland, OR         | 
|Doubletree Springfield                      |  |          | 234   |          |  |  | Springfield, OR      | 
|Doubletree Bellevue Center                  |  |          | 208   |          |  |  | Bellevue, WA         | 
|Doubletree Yakima Valley                    |  |          | 208   |          |  |  | Yakima, WA           | 
|Marriotts Hunt Valley Inn                  |  |          | 392   |          |  |  | Baltimore, MD        | 
|Cleveland Airport Marriott                  |  |          | 375   |          |  |  | Cleveland, OH        | 
|Buffalo Marriott                            |  |          | 356   |          |  |  | Buffalo, NY          | 
|Columbus North Marriott                     |  |          | 300   |          |  |  | Columbus, OH         | 
|Berkeley Marina Radisson                    |  |          | 369   |          |  |  | Berkeley, CA         | 
|Radisson Hotel Mt. Laurel                   |  |          | 283   |          |  |  | Mt. Laurel, NJ       | 
|High Point Radisson                         |  |          | 251   |          |  |  | High Point, NC       | 
|Radisson Inn Sanibel Gateway                |  |          | 157   |          |  |  | Fort Myers, FL       | 
|Holiday Inn Minneapolis West                |  |          | 196   |          |  |  | Minneapolis, MN      | 
|Holiday Inn Crabtree                        |  |          | 176   |          |  |  | Raleigh, NC          | 
|Lake Norman Holiday Inn                     |  |          | 119   |          |  |  | Charlotte, NC        | 
|Melbourne Hilton Oceanfront                 |  |          | 118   |          |  |  | Melbourne, FL        | 
|Hampton Inn San Diego Airport/ Sea World    |  |          | 199   |          |  |  | San Diego, CA        | 
|Embassy Suites Southfield                   |  |          | 239   |          |  |  | Southfield, MI       | 
|Melbourne Quality Suites                    |  |          | 208   |          |  |  | Melbourne, FL        | 
|Pink Shell Beach Resort                     |  |          | 156   |          |  |  | Fort Myers, FL       | 
|French Lick Springs Resort and Spa          |  |          | 485   |          |  |  | French Lick, IN      | 
|Meadowlands-Lyndhurst Courtyard by Marriott |  |          | 227   |          |  |  | Lyndhurst, NJ        | 
|Hotel 71                                    |  |          | 454   |          |  |  | Chicago, IL          | 
|                                            |  |          |       |          |  |  |                      | 
|                                            |  |          | 8,800 |          |  |  |                      | 
|                                            |  |          |       |          |  |  |                      | 

(b) Office Space

Pursuant to a shared services and office space
agreement, we were reimbursed approximately $9,900 per month in
2002 from BMC and its subsidiaries for the right to use certain
office space located in Cleveland, Ohio and receive certain
related services.

15



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##### Table of Contents








|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

We are subject to various legal proceedings and
claims that arise in the ordinary course of business. In our
opinion, the amount of any ultimate liability with respect to
these actions will not materially affect our financial
statements.






|        |                                                        
|------- | -------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders

There were no matters submitted to a vote of
security holders during the fourth quarter of the fiscal year
covered by this report.




PART II






|        |                                                                          
|------- | -------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Shares and
    Related Shareholder Matters

(a) Market Information

Our common shares are traded on the New York
Stock Exchange under the symbol BOY. The following
table sets forth for the indicated periods the high and low
sales prices for the common shares and the cash distributions
declared per share:

|                               |                                        |             |   |                    |  |       |   |       |  |  |   |      | 
|------------------------------ | -------------------------------------- | ----------- | - | ------------------ |  | ----- | - | ----- |  |  | - | ---- | 
|                               |                                        |             |   |                   
|                               |                                        | Price Range |   | Cash Distributions
|                               |                                        |             |   | Declared Per      
|                               |                                        | High        |   | Low                |  | Share
|                               |                                        |             |   |                    |  |      
|Year Ended December 31, 2001:  |                                        |             |   |                    |  |       |   |       |  |  |   |     
|                               | First Quarter                          |             | $ | 11.99              |  |       | $ | 8.50  |  |  | $ | .365 | 
|                               | Second Quarter                         |             | $ | 12.90              |  |       | $ | 10.51 |  |  | $ | .365 | 
|                               | Third Quarter                          |             | $ | 12.98              |  |       | $ | 7.50  |  |  | $ | .365 | 
|                               | Fourth Quarter                         |             | $ | 9.59               |  |       | $ | 6.91  |  |  |   |     | 
|Year Ended December 31, 2002:  |                                        |             |   |                    |  |       |   |       |  |  |   |     
|                               | First Quarter                          |             | $ | 9.65               |  |       | $ | 7.95  |  |  |   |     | 
|                               | Second Quarter                         |             | $ | 10.93              |  |       | $ | 8.87  |  |  |   |     | 
|                               | Third Quarter                          |             | $ | 10.66              |  |       | $ | 7.00  |  |  | $ | .18  | 
|                               | Fourth Quarter                         |             | $ | 9.74               |  |       | $ | 7.40  |  |  | $ | .18  | 
|Year Ending December 31, 2003: |                                        |             |   |                    |  |       |   |       |  |  |   |     
|                               | First Quarter (through March 13, 2003) |             | $ | 9.42               |  |       | $ | 6.65  |  |  | $ | .18  | 

(b) Shareholder Information

As of March 13, 2003, there were 1,053
record holders of our common shares, including shares held in
street name by nominees who are record holders, and
approximately 12,600 beneficial owners.

In order to comply with certain requirements
related to our qualification as a REIT, our charter limits the
number of common shares that may be owned by any single person
or affiliated group to 9% of the outstanding common shares.

(c) Dividend and Distribution
Information

The declaration and payment of future dividends
related to our common shares is at the discretion of our Board
of Directors and depends on, among other things, our receipt of
cash distributions from the Partnership, our results of
operations, level of indebtedness and restrictions imposed by
our lenders, any contractual restrictions, the annual dividend
requirements under the REIT provisions of the Internal Revenue
Code, economic conditions and other factors considered relevant
by our Board. The level of our cash dividends is determined by
us in light of our cash needs, including our requirements for
investing and financing activities and other anticipated cash
needs.

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##### Table of Contents



As a result of the economic downturn in the hotel
industry that was exacerbated by the terrorist attacks on
September 11, 2001, and its adverse impact on our cash flow
from operations, our Board of Directors suspended our
fourth-quarter 2001 and first and second-quarter 2002 dividends.
In August 2002, our Board of Directors reinstated a dividend on
our common shares by declaring a dividend of $0.18 per common
share for the third quarter of 2002. Dividends have also been
declared for the fourth quarter of 2002 and first quarter of
2003 at the same level. The fourth quarter dividend was paid in
January and the first quarter dividend is scheduled to be paid
May 1, 2003 to shareholders of record on March 31,
2003. While we are committed to a philosophy of regular
quarterly dividends, the current economic and geopolitical
environment may make it advisable to retain cash in order to
enhance our liquidity going forward. Thus, the continuation of
the common dividend at its current level will depend upon our
performance which will be impacted by the economy and
geopolitical events.

(d) Securities Authorized for Issuance
Under Equity Compensation Plans

The following sets forth the securities
authorized for issuance under our equity compensation plans as
of December 31, 2002:

|                                                               |  |                      |         |                   |  |                          |       |    |  |  |         | 
|-------------------------------------------------------------- |  | -------------------- | ------- | ----------------- |  | ------------------------ | ----- | -- |  |  | ------- | 
|                                                               |  |                      |         |                   |  | Number of securities    
|                                                               |  |                      |         |                   |  | remaining available for 
|                                                               |  | Number of securities |         | Weighted-average  |  | future issuance under   
|                                                               |  | to be issued upon    |         | exercise price of |  | equity compensation     
|                                                               |  | exercise of          |         | outstanding       |  | plans                   
|                                                               |  | outstanding options, |         | options, warrants |  | (excluding securities   
|Plan category                                                  |  | warrants and rights  |         | and rights        |  | reflected in column (a))
|                                                               |  |                      |         |                   |  |                         
|                                                               |  | (a)                  |         | (b)               |  | (c)                     
|Equity compensation plans approved by security
    holders     |  |                      | 839,139 | *                 |  | $                        | 11.24 | ** |  |  | 529,638 | 
|Equity compensation plans not approved by
    security holders |  |                      | None    |                   |  |                          | None  |    |  |  | None    | 
|                                                               |  |                      |         |                   |  |                          |       |    |  |  |         | 
|Total                                                          |  |                      | 839,139 |                   |  | $                        | 11.24 |    |  |  | 529,638 | 
|                                                               |  |                      |         |                   |  |                          |       |    |  |  |         | 



---



|   |                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------
|*  | Includes 422,405 options which are exercisable as
    of December 31, 2002.                                      
|  
|** | The weighted-average exercise price of the
    422,405 exercisable options as of December 31, 2002 is
    $13.72.

(e) Sales of Unregistered
Securities

Not applicable.

(f) Use of Proceeds from Sales of
Registered Securities

Not applicable.






|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

The following tables set forth selected
historical operating and financial data for Boykin Lodging
Company.

The following selected financial data should be
read in conjunction with Managements Discussion and
Analysis of Financial Condition and Results of Operations
and all of the financial statements and notes thereto included
elsewhere in this Form 10-K. The financial data related to
2002 is not directly comparable to the prior years as a result
of the TRS transactions discussed in Item 1. Subsequent to
the transactions, our financial results include the operating
results of the hotels under the TRS structure whereas in prior
years, only lease revenue was recorded for the properties.

17



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##### Table of Contents



BOYKIN LODGING COMPANY

SELECTED HISTORICAL OPERATING AND FINANCIAL
DATA

(amounts in thousands, except for per share
data)

|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |         |        | 
|------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | - | ------- | ------ | ---- | - | ------- | ------ | ---- | - | ------- | ------ |  | - | ------- | ------ |  | - | ------- | ------ | 
|                               |                                                                                                                                                |                        
|                               |                                                                                                                                                | Year Ended December 31,
|                               |                                                                                                                                                |                        
|                               |                                                                                                                                                | 2002                    |   | 2001    |        | 2000 |   | 1999    |        | 1998
|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |     
|OPERATING DATA:                |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Total revenues                                                                                                                                 |                         | $ | 263,107 |        |      | $ | 78,653  |        |      | $ | 92,589  |        |  | $ | 85,302  |        |  | $ | 69,747  |       
|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Real estate related depreciation
    and amortization                                                                                          |                         |   | 30,174  |        |      |   | 28,474  |        |      |   | 30,374  |        |  |   | 28,878  |        |  |   | 21,265  |       
|                               | Property taxes, insurance, hotel operations,
    general and other                                                                             |                         |   | 211,012 |        |      |   | 22,563  |        |      |   | 21,984  |        |  |   | 16,149  |        |  |   | 12,158  |       
|                               | Impairment of real estate                                                                                                                      |                         |   |        |        |      |   | 24,000  |        |      |   | 7,000   |        |  |   |        |        |  |   |        |       
|                               | Costs associated with termination of leases                                                                                                    |                         |   |        |        |      |   | 15,000  |        |      |   |        |        |  |   |        |        |  |   |        |       
|                               | Gain on property insurance recovery                                                                                                            |                         |   |        |        |      |   |        |        |      |   | (407    | )      |  |   |        |        |  |   |        |       
|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Operating income (loss)                                                                                                                        |                         |   | 21,921  |        |      |   | (11,384 | )      |      |   | 33,638  |        |  |   | 40,275  |        |  |   | 36,324  |       
|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Other income                                                                                                                                   |                         |   | 1,095   |        |      |   | 1,071   |        |      |   | 631     |        |  |   |        |        |  |   |        |       
|                               | Interest income                                                                                                                                |                         |   | 357     |        |      |   | 409     |        |      |   | 531     |        |  |   | 857     |        |  |   | 375     |       
|                               | Interest expense                                                                                                                               |                         |   | (20,011 | )      |      |   | (21,916 | )      |      |   | (24,291 | )      |  |   | (20,610 | )      |  |   | (13,905 | )     
|                               | Amortization of deferred financing costs                                                                                                       |                         |   | (2,182  | )      |      |   | (1,205  | )      |      |   | (1,242  | )      |  |   | (798    | )      |  |   | (593    | )     
|                               | Minority interest in earnings (loss) of
    joint ventures and operating partnership                                                           |                         |   | 507     |        |      |   | 2,999   |        |      |   | (919    | )      |  |   | (1,625  | )      |  |   | (2,059  | )     
|                               | Equity in income (loss) of unconsolidated
    joint ventures                                                                                   |                         |   | (2,040  | )      |      |   | 589     |        |      |   | 68      |        |  |   | 23      |        |  |   |        |       
|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Income (loss) before gain (loss) on
    sale of assets, extraordinary item and cumulative effect of
    change in accounting principle         |                         |   | (353    | )      |      |   | (29,437 | )      |      |   | 8,416   |        |  |   | 18,122  |        |  |   | 20,142  |       
|                               | Gain (loss) on sale of assets                                                                                                                  |                         |   | (18     | )      |      |   | 240     |        |      |   |        |        |  |   |        |        |  |   |        |       
|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Income (loss) before extraordinary item and
    cumulative effect of change in accounting principle                                            |                         |   | (371    | )      |      |   | (29,197 | )      |      |   | 8,416   |        |  |   | 18,122  |        |  |   | 20,142  |       
|                               | Extraordinary item  loss on early
    extinguishment of debt, net of minority interest                                                        |                         |   |        |        |      |   |        |        |      |   | (686    | )      |  |   |        |        |  |   | (1,138  | )     
|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Income (loss) before cumulative effect of
    change in accounting principle                                                                   |                         |   | (371    | )      |      |   | (29,197 | )      |      |   | 7,730   |        |  |   | 18,122  |        |  |   | 19,004  |       
|                               | Cumulative effect of change in accounting
    principle, net of minority interest                                                              |                         |   |        |        |      |   | (373    | )      |      |   |        |        |  |   |        |        |  |   |        |       
|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Net income (loss)                                                                                                                              |                         |   | (371    | )      |      |   | (29,570 | )      |      |   | 7,730   |        |  |   | 18,122  |        |  |   | 19,004  |       
|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Preferred dividends                                                                                                                            |                         |   | (1,109  | )      |      |   |        |        |      |   |        |        |  |   |        |        |  |   |        |       
|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Net income (loss) applicable to
    common shareholders                                                                                        |                         | $ | (1,480  | )      |      | $ | (29,570 | )      |      | $ | 7,730   |        |  | $ | 18,122  |        |  | $ | 19,004  |       
|                               |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|EARNINGS PER SHARE:            |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Net income (loss) applicable to common
    shareholders before extraordinary item and cumulative effect of
    change in accounting principle: |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |         |       
|                               |                                                                                                                                                | Basic                   |   | $       | (0.09  | )    |   | $       | (1.70  | )    |   | $       | 0.49   |  |   | $       | 1.06   |  |   | $       | 1.32   | 
|                               |                                                                                                                                                | Diluted                 |   | $       | (0.09  | )    |   | $       | (1.70  | )    |   | $       | 0.49   |  |   | $       | 1.06   |  |   | $       | 1.32   | 
|                               | Net income (loss) applicable to common
    shareholders before cumulative effect of change in accounting
    principle:                        |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |         |       
|                               |                                                                                                                                                | Basic                   |   | $       | (0.09  | )    |   | $       | (1.70  | )    |   | $       | 0.45   |  |   | $       | 1.06   |  |   | $       | 1.25   | 
|                               |                                                                                                                                                | Diluted                 |   | $       | (0.09  | )    |   | $       | (1.70  | )    |   | $       | 0.45   |  |   | $       | 1.06   |  |   | $       | 1.25   | 
|                               | Net income (loss) applicable to common
    shareholders:                                                                                       |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |         |       
|                               |                                                                                                                                                | Basic                   |   | $       | (0.09  | )    |   | $       | (1.72  | )    |   | $       | 0.45   |  |   | $       | 1.06   |  |   | $       | 1.25   | 
|                               |                                                                                                                                                | Diluted                 |   | $       | (0.09  | )    |   | $       | (1.72  | )    |   | $       | 0.45   |  |   | $       | 1.06   |  |   | $       | 1.25   | 
|                               | Weighted average number of common shares
    outstanding:                                                                                      |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |         |       
|                               |                                                                                                                                                | Basic                   |   |         | 17,248 |      |   |         | 17,176 |      |   |         | 17,137 |  |   |         | 17,063 |  |   |         | 15,252 | 
|                               |                                                                                                                                                | Diluted                 |   |         | 17,383 |      |   |         | 17,281 |      |   |         | 17,305 |  |   |         | 17,127 |  |   |         | 15,252 | 
|HISTORICAL BALANCE SHEET DATA: |                                                                                                                                                |                         |   |         |        |      |   |         |        |      |   |         |        |  |   |         |        |  |   |        
|                               | Investment in hotel properties, net                                                                                                            |                         | $ | 495,076 |        |      | $ | 520,484 |        |      | $ | 565,224 |        |  | $ | 584,875 |        |  | $ | 595,132 |       
|                               | Total assets                                                                                                                                   |                         |   | 575,509 |        |      |   | 559,218 |        |      |   | 600,593 |        |  |   | 606,103 |        |  |   | 615,062 |       
|                               | Total debt                                                                                                                                     |                         |   | 274,827 |        |      |   | 318,971 |        |      |   | 311,440 |        |  |   | 294,000 |        |  |   | 286,000 |       
|                               | Minority interest                                                                                                                              |                         |   | 16,621  |        |      |   | 18,351  |        |      |   | 16,750  |        |  |   | 18,263  |        |  |   | 22,961  |       
|                               | Shareholders equity                                                                                                                           |                         |   | 240,291 |        |      |   | 202,646 |        |      |   | 253,266 |        |  |   | 273,730 |        |  |   | 286,216 |       

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|                                                                                    |  |                         |         |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |          |  
|----------------------------------------------------------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | - |  | - | -------- | -
|                                                                                    |  |                        
|                                                                                    |  | Year Ended December 31,
|                                                                                    |  |                        
|                                                                                    |  | 2002                    |         | 2001 |  | 2000 |         | 1999 |  | 1998
|                                                                                    |  |                         |         |      |  |      |         |      |  |     
|OTHER DATA:                                                                         |  |                         |         |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |          |  
|Funds from operations available to common
    shareholders(a) (c)                   |  | $                       | 29,393  |      |  | $    | 36,167  |      |  | $    | 46,005  |   |  | $ | 48,189  |   |  | $ | 42,805   |  
|Earnings before interest, taxes, depreciation and
    amortization (EBITDA) (b) (c) |  | $                       | 54,405  |      |  | $    | 60,639  |      |  | $    | 72,837  |   |  | $ | 69,785  |   |  | $ | 57,303   |  
|Net cash provided by operating activities                                           |  | $                       | 39,188  |      |  | $    | 34,043  |      |  | $    | 43,400  |   |  | $ | 51,795  |   |  | $ | 39,960   |  
|Net cash used in investing activities                                               |  | $                       | (11,985 | )    |  | $    | (14,798 | )    |  | $    | (23,109 | ) |  | $ | (26,480 | ) |  | $ | (299,784 | )
|Net cash (used in) provided by
    financing activities                             |  | $                       | (5,360  | )    |  | $    | (19,810 | )    |  | $    | (20,087 | ) |  | $ | (26,987 | ) |  | $ | 263,612  |  
|Cash dividends declared 
    common shares                                         |  | $                       | 6,297   |      |  | $    | 19,030  |      |  | $    | 28,889  |   |  | $ | 32,260  |   |  | $ | 30,685   |  
|Weighted average number of common shares and
    units outstanding:                 |  |                         |         |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |          |  
|Basic                                                                               |  |                         | 19,966  |      |  |      | 18,467  |      |  |      | 18,428  |   |  |   | 18,354  |   |  |   | 16,549   |  
|Diluted                                                                             |  |                         | 20,101  |      |  |      | 18,572  |      |  |      | 18,596  |   |  |   | 18,418  |   |  |   | 16,549   |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The White Paper on Funds From Operations approved
    by the Board of Governors of the National Association of Real
    Estate Investment Trusts (NAREIT) in April 2002
    defines FFO as net income (loss) (computed in accordance with
    GAAP), excluding gains (or losses) from sales of properties and
    extraordinary items, plus real estate related depreciation and
    amortization, and after comparable adjustments for our portion
    of these items related to unconsolidated entities and joint
    ventures.

We compute FFO in accordance with our
interpretation of standards established by NAREIT which may not
be comparable to FFO reported by other REITs that do not define
the term in accordance with the current NAREIT definition or
that interpret the NAREIT definition differently than us.

We believe that FFO is helpful as a measure of
the performance of an equity REIT because it provides investors
and management with another indication of the Companys
performance prior to deduction of real estate related
depreciation and amortization.

The following is a reconciliation between net
income (loss) and FFO (in thousands):

|                                                             |  |      |        |      |  |      |         |      |  |      |        |   |  |   |        |   |  |   |        |  
|------------------------------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------- | ---- |  | ---- | ------ | - |  | - | ------ | - |  | - | ------ | -
|                                                             |  | 2002 |        | 2001 |  | 2000 |         | 1999 |  | 1998
|                                                             |  |      |        |      |  |      |         |      |  |     
|Net income (loss)                                            |  | $    | (371   | )    |  | $    | (29,570 | )    |  | $    | 7,730  |   |  | $ | 18,122 |   |  | $ | 19,004 |  
|Real estate related depreciation
    and amortization        |  |      | 30,174 |      |  |      | 28,474  |      |  |      | 30,374 |   |  |   | 28,878 |   |  |   | 21,265 |  
|Minority interest                                            |  |      | (507   | )    |  |      | (2,999  | )    |  |      | 919    |   |  |   | 1,625  |   |  |   | 2,059  |  
|Gain on property insurance recovery                          |  |      |       |      |  |      |        |      |  |      | (407   | ) |  |   |       |   |  |   |       |  
|Impairment of real estate                                    |  |      |       |      |  |      | 24,000  |      |  |      | 7,000  |   |  |   |       |   |  |   |       |  
|Costs associated with termination of leases                  |  |      |       |      |  |      | 15,000  |      |  |      |       |   |  |   |       |   |  |   |       |  
|(Gain) loss on sale of assets                                |  |      | 18     |      |  |      | (240    | )    |  |      |       |   |  |   |       |   |  |   |       |  
|Cumulative effect of change in accounting
    principle      |  |      |       |      |  |      | 373     |      |  |      |       |   |  |   |       |   |  |   |       |  
|Extraordinary item                                           |  |      |       |      |  |      |        |      |  |      | 686    |   |  |   |       |   |  |   | 1,138  |  
|Equity in (income) loss of unconsolidated joint
    ventures |  |      | 2,040  |      |  |      | (589    | )    |  |      | (68    | ) |  |   | (23    | ) |  |   |       |  
|FFO adjustment related to joint ventures                     |  |      | (852   | )    |  |      | 1,718   |      |  |      | (229   | ) |  |   | (413   | ) |  |   | (661   | )
|                                                             |  |      |        |      |  |      |         |      |  |      |        |   |  |   |        |   |  |   |        |  
|Funds from operations                                        |  |      | 30,502 |      |  |      | 36,167  |      |  |      | 46,005 |   |  |   | 48,189 |   |  |   | 42,805 |  
|                                                             |  |      |        |      |  |      |         |      |  |      |        |   |  |   |        |   |  |   |        |  
|Preferred dividends                                          |  |      | (1,109 | )    |  |      |        |      |  |      |       |   |  |   |       |   |  |   |       |  
|                                                             |  |      |        |      |  |      |         |      |  |      |        |   |  |   |        |   |  |   |        |  
|Funds from operations available to common
    shareholders   |  | $    | 29,393 |      |  | $    | 36,167  |      |  | $    | 46,005 |   |  | $ | 48,189 |   |  | $ | 42,805 |  
|                                                             |  |      |        |      |  |      |         |      |  |      |        |   |  |   |        |   |  |   |        |  

19



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|    |                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | We believe that EBITDA is helpful to investors
    and management as a measure of the performance of the Company
    because it provides an indication of the operating performance
    of the properties within the portfolio and is not impacted by
    the capital structure of the REIT.

The following is a reconciliation between
operating income (loss) and EBITDA (in thousands):

|                        |                                                                |        |        |        |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |        |        | 
|----------------------- | -------------------------------------------------------------- | ------ | ------ | ------ | ------ | ---- | ------- | ------ | ------ | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                        |                                                                | 2002   |        | 2001   |        | 2000 |         | 1999   |        | 1998
|                        |                                                                |        |        |        |        |      |         |        |        |     
|Operating income (loss) |                                                                | $      | 21,921 |        |        | $    | (11,384 | )      |        | $    | 33,638 |        |        | $ | 40,275 |        |        | $ | 36,324 |       
|                        | Other income                                                   |        |        | 1,095  |        |      |         | 1,071  |        |      |        | 631    |        |   |        |       |        |   |        |       |       
|                        | Interest income                                                |        |        | 357    |        |      |         | 409    |        |      |        | 531    |        |   |        | 857    |        |   |        | 375    |       
|                        | Real estate related depreciation and amortization              |        |        | 30,174 |        |      |         | 28,474 |        |      |        | 30,374 |        |   |        | 28,878 |        |   |        | 21,265 |       
|                        | Companys share of EBITDA of unconsolidated
    joint ventures |        |        | 1,030  |        |      |         | 2,784  |        |      |        | 1,428  |        |   |        | 317    |        |   |        |       |       
|                        | EBITDA applicable to joint venture
    minority interest       |        |        | (172   | )      |      |         | 285    |        |      |        | (765   | )      |   |        | (542   | )      |   |        | (661   | )     
|                        | Costs associated with termination of leases                    |        |        |       |        |      |         | 15,000 |        |      |        |       |        |   |        |       |        |   |        |       |       
|                        | Impairment of real estate                                      |        |        |       |        |      |         | 24,000 |        |      |        | 7,000  |        |   |        |       |        |   |        |       |       
|                        |                                                                |        |        |        |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|                        |                                                                | EBITDA |        | $      | 54,405 |      |         | $      | 60,639 |      |        | $      | 72,837 |   |        | $      | 69,785 |   |        | $      | 57,303 | 
|                        |                                                                |        |        |        |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | Neither FFO nor EBITDA represent cash generated
    from operating activities as determined by GAAP and neither
    should be considered as an alternative to GAAP net income as an
    indication of the Companys financial performance or to
    cash flow from operating activities as determined by GAAP as a
    measure of liquidity, nor is either indicative of funds
    available to fund cash needs, including the ability to make cash
    distributions. FFO and EBITDA may include funds that may not be
    available for the Companys discretionary use due to
    functional requirements to conserve funds for capital
    expenditures and property acquisitions, and other commitments
    and uncertainties.






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of
    Financial Condition and Results of Operations

Boykins Formation and Significant
Events

Boykin Lodging Company (Boykin), an
Ohio corporation, is a real estate investment trust
(REIT) that was formed and completed an initial
public offering in 1996 to continue and expand the over 40-year
history of hotel ownership, acquisition, redevelopment and
repositioning activities of its predecessors, Boykin Management
Company and its affiliates. Boykin Hotel Properties, L.P., an
Ohio limited partnership (the Partnership), is the
operating partnership entity that transacts business and holds
the direct and indirect ownership interests in Boykins
hotels. As of March 13, 2003, Boykin Lodging Company has an
85.1% ownership interest in, is the sole general partner of and
does all its business through the Partnership.

Since our initial public offering, we have
increased our portfolio by using capital raised through a
combination of common share issuances, various debt financings,
capital from strategic joint venture partners and cash flow
generated from operations.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In October 2002, we completed a
    $45.3 million offering of 1,810,000 preferred depositary
    shares, each representing a 1/10 interest in one share of our
    10  1/2% cumulative preferred shares and has a liquidation
    preference of $25 per share. Dividends are payable quarterly,
    upon authorization of the Board of Directors, at an annual rate
    of $2.625 per depositary share. The shares are listed on the New
    York Stock Exchange. Proceeds from the offering were used to
    reduce outstanding indebtedness.
|
| |  | We currently have strategic alliances with four
    hotel operators and own four hotels with them through joint
    venture structures. In 1999, we also formed a joint venture with
    AEW Partners III, L.P. (AEW) and, through that joint
    venture we purchased a hotel located in downtown Chicago.                                                                                                                                                                                                                                 
|
| |  | At the end of 2002, we had $274.8 million of
    debt outstanding under various debt instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                             

20



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Effective January 1, 2002, we took advantage
    of the restructuring available under the REIT Modernization Act
    and acquired leasehold interests in 28 hotels from two of our
    operators. During 2002, we acquired the leasehold interest in
    yet another property. Following these transactions, all but one
    of our hotels are operated under the taxable REIT subsidiary
    (TRS) structure whereby the hotels are leased to a
    wholly owned subsidiary of the Partnership.

At the end of 2002, we owned interests in 33
hotels containing a total of 9,252 guestrooms located in 19
different states. During February 2003, we sold the
Knoxville Hilton and Lake Norman Hampton Inn. Therefore, as of
March 13, 2003, we own interests in 31 hotels containing
8,800 guestrooms located in 18 states.

Critical Accounting Policies

The critical accounting policies which we believe
are the most significant to fully understand and evaluate our
reported financial results include the following:



| |   |                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Investment in Hotel Properties.Hotel properties are stated at cost,
    net of any impairment charges, and are depreciated using the
    straight-line method over estimated useful lives ranging from 10
    to 35 years for buildings and improvements and three to
    20 years for furniture and equipment.

We review our hotel properties for impairment
whenever events or changes in circumstances indicate the
carrying value of the hotel properties may not be recoverable.
Events or circumstances that may cause us to perform our review
include, but are not limited to, adverse changes in the demand
for lodging at our properties due to declining national or local
economic conditions and/or new hotel construction in markets
where our hotels are located. When such conditions exist,
management performs an analysis to determine if the estimated
undiscounted future cash flows from operations and the proceeds
from the ultimate disposition of a hotel property exceed its
carrying value. If the estimated undiscounted future cash flows
are less than the carrying amount of the asset, an adjustment to
reduce the carrying amount to the related hotel propertys
estimated fair market value is recorded and an impairment loss
recognized.

There were no charges recorded for impairment of
real estate in 2002. In 2001 and 2000, we recorded charges of
$24.0 million and $7.0 million, respectively, for
impairment of real estate on the carrying value of several
hotels due to their book value exceeding their net realizable
value. We do not believe that there are any factors or
circumstances indicating impairment of any other of our
investments in hotel properties at this time.

We estimate the fair market values of our
properties through cash flow analysis taking into account each
propertys expected cash flow generated from operations,
holding period and ultimate proceeds from disposition. In
projecting the expected cash flows from operations of the asset,
we base our estimates on future projected earnings before
interest expense, income taxes, depreciation and amortization,
or EBITDA, and deduct expected capital expenditure requirements.
We then apply growth assumptions to project these amounts over
the expected holding period of the asset. Our growth assumptions
are based on estimated changes in room rates and expenses and
the demand for lodging at our properties, as impacted by local
and national economic conditions and estimated or known future
new hotel supply. The estimated proceeds from disposition are
judgmentally determined based on a combination of anticipated
cash flow in the year of disposition, terminal capitalization
rate, ratio of selling price to gross hotel revenues and selling
price per room.

If actual conditions differ from those in our
assumptions, the actual results of each assets future
operations and fair market value could be significantly
different from the estimated results and value used in our
analysis. Our operating results are also subject to the risks
set forth under Items 1(c) and 7 of this Form 10-K.



| |   |                    
| | - | -------------------
| |  | Revenue recognition

Hotel revenues Hotel revenues
including room, food, beverage and other hotel revenues are
recognized as the related services are delivered. Ongoing credit
evaluations are performed and an allowance for

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potential credit losses is provided against the
portion of accounts receivable that is estimated to be
uncollectible.


Lease revenue Through December 31, 2001, our
principal source of revenue was lease payments from lessees
pursuant to percentage lease agreements. Percentage lease
revenue is based upon the room, food and beverage and other
revenues of our hotels.

Sales of condominium units During 2001, we completed a renovation
of a 60-unit tower at the Pink Shell Beach Resort. These
renovated units are being sold as Sanibel View Villas
Condominiums, with the expectation that the unit owners will
make their units available to us by contract for rental as hotel
rooms. The revenue related to the sales of these units is
recorded upon closing of the sale. As of December 31, 2002,
we had closed on the sale of 40 of the units within the tower.
As of December 31, 2002, all of the Sanibel View unit
owners have contracted with us to allow their unused room nights
to be rented out as hotel rooms. The related gross rental income
generated by these units is recorded by the resort and included
in hotel revenues within the consolidated financial statements.
Under the terms of their contracts, a percentage of the gross
rental income of each unit is to be remitted to the respective
unit owner. Any unsold units are also being rented out as hotel
rooms.

With regard to the White Sand Villa project which
was commenced during 2002, revenue will be recorded on the sale
of the units under the percentage of completion method of
accounting after the project meets certain required criteria.
The appropriate criteria had not been met as of
December 31, 2002.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Income Tax Valuation Allowance.Upon the effective date of the
    establishment of Boykins TRSs, the subsidiaries became
    subject to federal and state income taxes. Boykins TRSs
    account for income taxes in accordance with the provisions of
    SFAS No. 109, Accounting for Income Taxes. As
    of December 31, 2002, Boykins TRSs have a deferred
    tax asset of approximately $1,400,000, prior to any valuation
    allowance, related to the assumption of the retained deficit of
    Westboy as well as the operating losses of the TRSs and their
    subsidiaries. Boykins TRSs have recorded a 100% valuation
    allowance against this asset due to the uncertainty of
    realization of the deferred tax asset and therefore, no
    provision or benefit from income taxes is reflected in the
    accompanying consolidated statements of operations.

Our significant accounting policies are more
fully described in Note 2 to our consolidated financial
statements included within this Form 10-K.

Results of Operations

We are reporting the hotel operating revenues and
expenses with respect to the hotels included within the TRS
transactions discussed above beginning with their respective
effective dates, whereas in the past, we reported percentage
lease revenue. As a result, the results of operations for 2002
are not directly comparable to the actual results for the same
periods in 2001 and 2000.



| |                                                                                  
| | ---------------------------------------------------------------------------------
| | Results of Operations Year Ended
    December 31, 2002 Compared to Pro Forma 2001

For year ended December 31, 2002, the
Companys net loss applicable to common shareholders
totaled $1.5 million or $0.09 per fully-diluted share
compared with the same period last year when pro forma net loss
totaled $15.4 million, or $0.90 per share.

Revenues for the year ended December 31,
2002 were $263.1 million, compared with pro forma revenues
of $262.2 million for the same period last year. Hotel
revenues were $249.7 million for the year ended
December 31, 2002 compared with pro forma hotel revenues of
$256.2 million for the same period last year. The
decreasing hotel revenues can be attributed to the general
softening in the economy and the continued impact on the travel
industry from the aftermath of the terrorist attacks and the
current political environment. The following

22



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##### Table of Contents



table sets forth the full year operating data of
the 30 consolidated properties that were operated under the TRS
structure as of December 31, 2002:


|                                         |  |                            |       |           |  |        |       |      |  |      |      |       |  |      |      |      |  |       |      |   |  |  |      |    |  |   |       |  |  |   |       |  |  |  |      |   
|---------------------------------------- |  | -------------------------- | ----- | --------- |  | ------ | ----- | ---- |  | ---- | ---- | ----- |  | ---- | ---- | ---- |  | ----- | ---- | - |  |  | ---- | -- |  | - | ----- |  |  | - | ----- |  |  |  | ---- | --
|                                         |  |                            |       |           |  |       
|                                         |  | Average Daily Rate (ADR) |       | Occupancy |  | RevPAR
|                                         |  |                            |       |           |  |       
|                                         |  | 2002                       |       | 2001      |  | % Chg  |       | 2002 |  | 2001 |      | % Chg |  | 2002 |      | 2001 |  | % Chg
|                                         |  |                            |       |           |  |        |       |      |  |      |      |       |  |      |      |      |  |      
|30 consolidated hotels operated by a TRS |  | $                          | 89.54 |           |  | $      | 92.49 |      |  |      | (3.2 | )%    |  |      | 61.3 | %    |  |       | 61.8 | % |  |  | (0.8 | )% |  | $ | 54.88 |  |  | $ | 57.14 |  |  |  | (4.0 | )%

Lease revenues decreased approximately
$1.3 million primarily as a result of Marriotts Hunt
Valley Inn converting to the TRS structure effective
September 1, 2002. As such, the current year only includes
eight months of lease revenue related to that hotel versus a
full year for pro forma 2001.

Included in 2002 revenues is approximately
$8.7 million related to the sales of 40 Sanibel View Villas
units during the year. The renovation and conversion of the
Sanibel View building to condominiums was completed in late
2001, therefore, no sales had occurred in the prior year. The
related costs of the units sold during 2002 totaled
$6.5 million and are recorded as such within the financial
statements.

For those consolidated hotels operated under the
TRS structure as of December 31, 2002, the gross operating
profit after management fees subsequent to the respective dates
of the TRS transactions averaged 26.4%, compared with 27.1% on a
pro forma basis for the previous year. In 2002 we were faced
with continued increases in the cost of workers
compensation insurance and utilities as well as the need to
reserve approximately $0.3 million of outstanding United
Airlines receivables at the time of their parent companys,
UAL Corp., bankruptcy filing.

We experienced a $1.7 million acceleration
in depreciation expense during 2002 related to the removal of
cottages from the Pink Shell Beach Resort property to make way
for the White Sand Villas development project.

In 2001, management identified changes in
circumstances which indicated that the carrying value of certain
properties were impaired, and accordingly recorded a
$24.0 million non-cash charge related to eight specific
properties. Management did not identify any similar instances
and therefore did not take any impairment charges related to any
of its properties during 2002.

During 2002, there was a significant decrease in
the weighted average interest rate on our outstanding debt.
Additionally, in October, we repaid the entire outstanding
balance of our $65.0 million credit facility and
approximately $3.0 million of the $45.0 million term
note with the proceeds from our preferred depositary share
offering. These factors resulted in an overall decrease in
interest expense of $1.9 million from 2001.

Amortization of deferred financing costs
increased $1.0 million over prior year primarily as a
result of the additional financing costs incurred for our
March 2002 amendments of the $65.0 million line of
credit and the $45.0 million term loan.

Our equity loss in our unconsolidated joint
ventures totaled $2.0 million in 2002 versus income of
$0.3 million for the prior year pro forma period. The
change primarily resulted from the impact of the renovation on
the operating results of our newly repositioned and renamed
Hotel 71 in downtown Chicago. The guestroom portion of the
renovation was completed late in the third quarter of 2002.

Approximately $1.1 million of dividends
related to the outstanding preferred depositary shares were
declared in 2002; those dividends reduced net income applicable
to common shareholders. As the preferred shares were issued
during 2002, there was no similar deduction for the year earlier
period.

For the full year 2002, funds from operations
applicable to common shareholders (FFO) of
$29.4 million was below the pro forma $35.4 million
reported for the same period last year. On a fully-diluted
basis, the full year 2002 FFO declined to $1.46 per share
compared with last years pro forma FFO of $1.77 per share.
For a detailed definition of FFO, reconciliation of net income
(loss) to FFO and discussion of why we believe FFO is a
useful measure of a REITs financial performance, please
see Item 6 Selected Financial Data.

23



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##### Table of Contents





| |                                                                               
| | ------------------------------------------------------------------------------
| | Results of Operations Year Ended
    December 31, 2002 Compared to Actual 2001

Total revenues increased to $263.1 million
from $78.7 million and hotel revenues increased to
$249.7 million from $6.7 million, primarily as a
result of the TRS transaction discussed earlier.

Lease revenue decreased to $4.7 million
versus $72.0 million for 2001 because there were only two
hotels which were not under the TRS structure during 2002. After
the implementation of this structure at our Marriotts Hunt
Valley Inn property effective September 1, 2002, there was
only one property, Hampton Inn San Diego Airport/ Sea World,
which was not under the TRS structure and was therefore
generating lease revenues.

Please refer to the Year Ended
December 31, 2002 Compared to Pro Forma 2001 section
for discussion regarding changes in revenues from sale of
condominium units and the related cost of units sold.

Similar to total revenues, total operating
expenses increased substantially to $241.2 million for 2002
versus $90.0 million for 2001. Hotel operating expenses,
which include hotel departmental expenses, indirect expenses and
management fees, increased to $183.6 million from
$5.4 million in the prior year due to the inclusion of the
results of the 29 properties for which we acquired leasehold
interests in connection with the TRS transactions. Property
taxes, insurance and other expense increased $3.3 million
over prior year due to increases in property and casualty
insurance rates and the inclusion of related costs at the hotel
property level in our operating results under the TRS structure.
We incurred charges of $15.0 million, $11.4 million
being non-cash, during 2001 relating to the acquisition and
termination of the percentage leases and related transaction
costs to implement the TRS structure. Such costs were not
incurred during 2002. Please refer to the Year Ended
December 31, 2002 Compared to Pro Forma 2001 section
above for discussion regarding the impairment charges incurred
during 2001 and the increase in depreciation.

Other items which had significant changes over
the prior year include interest expense, amortization of
deferred financing costs, our equity in the income
(loss) of unconsolidated joint ventures and the declaration
of preferred dividends. For detailed discussion regarding these
changes, please see the Year Ended December 31, 2002
Compared to Pro Forma 2001 section above.

Based upon the above, 2002 had a net loss
applicable to common shareholders of $1.5 million compared
to the $29.6 million loss for the same period last year.

Our FFO for 2002 was $29.4 million compared
to $36.2 million in 2001.



| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Actual Results of Operations Year Ended
    December 31, 2001 Compared to Year Ended 2000

For the year ended December 31, 2001, our
net loss totaled $29.6 million versus net income of
$7.7 million in 2000.

Our percentage lease revenue decreased to
$72.0 million from $85.9 million in 2000 due to the
decrease in consolidated hotel revenues. Our percentage lease
revenue was driven by hotel revenues which were, in turn, driven
by ADR, occupancy, and RevPAR. The following table sets forth
the operating data of the hotels owned by us as of
December 31, 2001 (including those owned by unconsolidated
joint ventures), without regard to when we acquired the hotels.

|                                 |  |      |       |           |  |        |       |      |  |      |      |       |  |      |      |      |  |       |      |   |  |  |      |    |  |   |       |  |  |   |       |  |  |  |      |   
|-------------------------------- |  | ---- | ----- | --------- |  | ------ | ----- | ---- |  | ---- | ---- | ----- |  | ---- | ---- | ---- |  | ----- | ---- | - |  |  | ---- | -- |  | - | ----- |  |  | - | ----- |  |  |  | ---- | --
|                                 |  |      |       |           |  |       
|                                 |  | ADR  |       | Occupancy |  | RevPAR
|                                 |  |      |       |           |  |       
|                                 |  | 2001 |       | 2000      |  | % Chg  |       | 2001 |  | 2000 |      | % Chg |  | 2001 |      | 2000 |  | % Chg
|                                 |  |      |       |           |  |        |       |      |  |      |      |       |  |      |      |      |  |      
|All Hotels (33 Hotels)(a)        |  | $    | 93.82 |           |  | $      | 95.05 |      |  |      | (1.3 | )%    |  |      | 62.2 | %    |  |       | 67.4 | % |  |  | (7.7 | )% |  | $ | 58.30 |  |  | $ | 64.04 |  |  |  | (9.0 | )%
|Comparable Hotels (30 Hotels)(b) |  | $    | 93.60 |           |  | $      | 94.46 |      |  |      | (0.9 | )%    |  |      | 62.2 | %    |  |       | 67.5 | % |  |  | (7.9 | )% |  | $ | 58.25 |  |  | $ | 63.73 |  |  |  | (8.6 | )%



|    |                                                                                      
|--- | -------------------------------------------------------------------------------------
|(a) | Includes all hotels we owned at the end of 2001,
    including predecessors results.



|    |                                          
|--- | -----------------------------------------
|(b) | Includes hotels we owned in both periods.

The decrease in hotel revenues from the prior
year, and resultant decrease in our lease revenues, resulted
from the weak hotel operating environment. During the first
eight months of 2001, lodging demand declined modestly due to
the softening economy; following September 11, 2001, the
decline in demand was more severe.

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Another factor contributing to the decrease in
revenues was the sale of the Daytona Beach Radisson Resort in
January 2001, which generated lease revenues of
$1.7 million in 2000. Additionally, in February 2000,
we took over the Radisson Hotel Mt. Laurel. In 2000, we recorded
lease revenue of $0.3 million related to Mt. Laurel. Since the
take over and throughout 2001, instead of percentage lease
revenues, Mt. Laurels hotel revenues and expenses are
reflected in the results of operations.


Operating expenses increased to
$90.0 million from $59.0 million in 2000 due to a
one-time $15.0 million charge related to the acquisition
and termination of 28 leasehold interests, of which
$11.4 million was non-cash; a $24.0 million non-cash
impairment charge to reduce the carrying value of eight
properties to their estimated fair value (during 2000, the
non-cash impairment charges totaled $7.0 million); all
offset by a $1.9 million decrease in real estate related
depreciation primarily related to three assets for which no
depreciation was charged while they were classified as held for
sale through the first three quarters of 2001 and the sale of
the Daytona property in January 2001 for which
approximately $0.5 million of depreciation was recorded in
2000.

Other items which lead to the change to the net
loss in 2001 included a $2.4 million decrease in interest
expense due to significant decreases in interest rates on
outstanding borrowings and the non-recurring $0.7 million
extraordinary loss on extinguishment of debt in 2000 offset by a
charge of $0.4 million for the cumulative effect of a change in
accounting principle related to the write-down of a derivative
asset pursuant to the adoption of Statement of Financial
Accounting Standards (SFAS) No. 133.

Our FFO in 2001 was $36.2 million compared
to $46.0 million in 2000.

Liquidity and Capital Resources

Our principal source of cash to meet our cash
requirements, including dividends to shareholders, is our share
of Partnerships cash flow from the operations of the
hotels. Cash flow from hotel operations is subject to all
operating risks common to the hotel industry, including:



| |   |                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------
| |  | Competition for guests from other hotels;                                                                                         
|
| |  | Adverse effects of general and local economic
    conditions;                                                                     
|
| |  | Dependence on demand from business and leisure
    travelers, which may fluctuate and be seasonal;                                
|
| |  | Increases in energy costs, airline fares, and
    other expenses related to travel, which may deter traveling;                    
|
| |  | Increases in operating costs related to inflation
    and other factors, including wages, benefits, insurance and
    energy;     
|
| |  | Overbuilding in the hotel industry, especially in
    particular markets; and                                                     
|
| |  | Actual or threatened acts of terrorism and
    actions taken against terrorists that cause public concern about
    travel safety.

In October 2002, we completed an
underwritten public offering of 1,800,000 depositary shares,
each share representing 1/10 of a share of our 10  1/2%
Class A Cumulative Preferred Shares, Series 2002-A
(Liquidation Preference $25 per depositary share). An additional
10,000 depositary shares were issued to cover over-allotments.
Net proceeds after underwriting discounts and commissions were
used to repay the entire outstanding balance on our credit
facility and reduce the outstanding balance on the
$45.0 million term loan to just under $42.0 million.
Annual dividends of $2.625 per depositary share are payable
quarterly upon the authorization of the Board of Directors. The
shares are listed on the New York Stock Exchange. We own a
corresponding Series A Preferred equity interest in the
Partnership that entitles us to income and distributions in
amounts equal to the dividends payable on the Companys
Series A Preferred shares.

As of December 31, 2002, we had
$25.5 million of unrestricted cash and cash equivalents and
$13.5 million of restricted cash for the payment of capital
expenditures, real estate tax and insurance, and deposits
received on pre-sales of White Sand Villas condominium units.
There were outstanding borrowings totaling $274.8 million
against our term notes payable at year end. Proceeds from two
property sales in February 2003 allowed for

25



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additional repayment of approximately
$14.3 million on the $108.0 million term note payable,
thereby reducing the outstanding balance to $93.7 million.
We have not drawn on our credit facility since the October
repayment.


We have a $65.0 million credit facility to
fund acquisitions of additional hotels, renovations and capital
expenditures, and for our working capital needs, subject to
limitations contained in the credit agreement. For information
relating to the terms of our credit facility and our $130.0
million, $45.0 million, and $108.0 million term notes
payable, please see Notes 4 and 5, respectively, of the Notes to
Consolidated Financial Statements of Boykin Lodging Company
included in this Form 10-K.

Our $130.0 million and $108.0 million
term notes payable are property-specific mortgages and pose no
covenant compliance issues. The credit facility and the
$45.0 million term note contain covenant formulas regarding
our overall leverage and debt service coverage. In
March 2002, we amended both debt facilities in order to,
among other things, ease the leverage and debt service coverage
covenants.

In January 2003, our credit facility and the
$45.0 million term note were amended to provide us greater
latitude in making capital expenditures and acquisitions, and to
moderately tighten our financial covenants. Specifically, we are
entitled to use up to $50.0 million of proceeds under our
credit facility for new acquisitions, and our capital
expenditures for 2003 are now limited to 12.5% of our total
hotel revenues. In addition, dividends on our common shares
cannot exceed the lesser of 50% of our trailing twelve months
FFO or $3.8 million per quarter, subject to certain
exceptions, one being that we are entitled to distribute up to
100% of REIT taxable income. Based upon our current RevPAR and
cash flow expectations, we expect to be in compliance with our
covenants under the amended facilities through their
July 2003 maturity. We can give no assurance that our
actual results will not differ materially from our expectations.

We may seek to negotiate additional credit
facilities, replacement credit facilities, or we may issue debt
instruments. Any debt incurred or issued by us may be secured or
unsecured, long-term, medium-term or short-term, bear interest
at a fixed or variable rate, and be subject to such other terms
as the Board of Directors considers prudent. The availability of
borrowings under the credit facility is restrained by borrowing
base and loan-to-value limits, as well as other financial
performance covenants contained in the agreement. There can be
no assurance that funds will be available in anticipated amounts
from the credit facility.

Due to our desire to maintain liquidity in the
challenging hotel environment following September 2001, our
Board of Directors suspended the regular quarterly dividend in
the fourth quarter of 2001. In August 2002, the Board of
Directors reinstated a regular quarterly dividend on our common
shares by declaring a dividend of $0.18 per common share for the
third quarter. Dividends have also been declared for the fourth
quarter 2002 and first quarter 2003 at the same level. The
fourth quarter dividend was paid in January and the first
quarter dividend is scheduled to be paid May 1, 2003 to
shareholders of record March 31, 2003. While we are
committed to a philosophy of regular quarterly dividends, the
current economic and geopolitical environment may make it
advisable to retain cash in order to enhance our liquidity going
forward. Additionally, we are limited by the terms of our
amended credit agreement to only distribute 50% of our trailing
twelve months FFO through common share dividends. Thus, while we
expect to continue to pay a regular quarterly dividend on our
preferred shares, the continuation of the common dividend at its
current level will depend upon the effect of the economy and
geopolitical events on our performance.

In 2003, we expect to spend approximately
$30 million related to capital expenditures at our hotels,
excluding the Pink Shell Beach Resort project discussed below.
This amount includes planned refurbishments and replacements at
selected existing hotels as well as revenue generating projects,
such as the development of ancillary conference centers within
certain properties. We expect to use cash available from
operations and restricted capital expenditure reserves, as well
as borrowings under our line of credit to fund our 2003
renovations.

We are proceeding with the expansion project at
the Pink Shell Beach Resort, which will add 39 rooms to the
resort. The project includes demolishing 53 cottage units (38 of
which have already been removed) and constructing a new 92-unit
tower called White Sand Villas, which will significantly upgrade
the character of the resort. The units in the tower will be sold
as condominiums, with the expectation that the owners would put
their unused room nights back to the resort by contract, which
will provide us with continuing fee income. Total

26



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construction costs of the condominium tower are
estimated to be approximately $28.0 million with a
scheduled completion date during the fourth quarter of 2003.
Approximately $3.6 million had been spent through
December 31, 2002. To finance the construction of the White
Sand Villas, in January 2003 we closed on a
$23.3 million construction loan which is secured by the
project. The loan bears interest at a rate that floats at LIBOR
plus 250 basis points and is secured by the project. While the
loan matures in January 2005, it requires principal
payments upon closing the sales of the units. The remaining
funding of construction costs will be provided by deposits
already collected on pre-sales of the condominium units.


We have an active shelf registration statement
with the Securities and Exchange Commission for the issuance of
up to $142.3 million in securities. Securities issued under
this registration statement may be preferred shares, depositary
shares, common shares or any combination thereof, and may be
issued at different times, depending on market conditions.
Warrants to purchase these securities may also be issued. The
terms of issuance of any securities covered by this registration
statement would be determined at the time of their offering. No
assurance can be made as to the availability of such capital.

Inflation

Operators of hotels in general can change room
rates quickly, but competitive pressures may limit the
operators ability to raise rates to keep pace with
inflation.

Our general and administrative costs as well as
real estate and personal property taxes, property and casualty
insurance and ground rent are subject to inflation.

Seasonality

Our hotels operations historically have
been seasonal. The four hotels located in Florida experience
their highest occupancy in the first quarter, while the
remaining hotels maintain high occupancy rates during the second
and third quarters. This seasonality pattern can be expected to
cause fluctuations in our quarterly operating results and cash
flow received from hotel operations.

Competition and Other Economic
Factors

Our hotels are located in developed areas that
contain other hotel properties. The future occupancy, ADR and
RevPAR of any hotel could be materially and adversely affected
by an increase in the number of or quality of the competitive
hotel properties in its market area. Competition could also
affect the quality and quantity of future investment
opportunities, or our ability to sell existing properties.

As a portion of the lodging industrys sales
are based upon business, commercial and leisure travel, changes
in general economic conditions, demographics, or changes in
local business economics, could affect these and other travel
segments. This may affect demand for rooms, which would affect
hotel revenues.

Please refer to Item 1(c) of this
Form 10-K for further discussion regarding Competition.

New Accounting Pronouncements

In August 2001, the Financial Accounting
Standards Board (FASB) issued SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived
Assets. The provisions of SFAS No. 144 are effective
for us beginning in 2002. SFAS No. 144 supersedes SFAS
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of. SFAS
No. 144 also established a single accounting model for
long-lived assets to be disposed of by sale. The statement did
not have a material effect on the financial condition or results
of operations for 2002; however, as we sold these hotel
properties in 2003, the properties results of operations
will be retroactively disclosed separately as discontinued
operations in our financial statements going forward.

In April 2002, the FASB issued Statement
No. 145, Rescission of FASB Statements No. 4, 44
and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. Included in SFAS No. 145 is a
requirement that all gains and losses related to extinguishments
of debt (other than extinguishments of debt items meeting the

27



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criteria in APB Opinion No. 30,
Reporting the Results of Operations  Reporting the
Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and
Transaction (APB Opinion 30)) not be treated
as extraordinary items. Any gains or losses on extinguishments
of debt formerly classified as extraordinary and not meeting the
criteria for extraordinary classification as defined in APB
Opinion 30 shall be reclassified. The statement is not expected
to have a material effect on our financial condition or results
of operations.


In November 2002, the FASB issued
Interpretation No. 45, Guarantors Accounting
and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, which addresses the
disclosure to be made by a guarantor in its interim and annual
financial statements about its obligations under guarantees.
Interpretation No. 45 also requires the recognition of a
liability by a guarantor at the inception of certain guarantees.
Interpretation No. 45 requires the guarantor to recognize a
liability for the non-contingent component of the guarantee,
this is the obligation to stand ready to perform in the event
that specified triggering events or conditions occur. The
initial measurement of this liability is the fair value of the
guarantee at inception. The recognition of the liability is
required even if it is not probable that payments will be
required under the guarantee or if the guarantee was issued with
a premium payment or as part of a transaction with multiple
elements. We have adopted the disclosure requirements of
Interpretation No. 45 and will apply the recognition and
measurement provisions for all guarantees entered into or
modified after December 31, 2002. To date, we have not
entered into any guarantees.

In December 2002, the FASB issued Statement
No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure  an amendment
of FASB Statement No. 123. Statement No. 148
amends FASB Statement No. 123, Accounting for
Stock-Based Compensation, to provide alternative methods
of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In
addition, Statement No. 148 amends the disclosure
requirements of Statement No. 123 to require prominent
disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee
compensation and the effect of the method used on reported
results. In addition, to address concerns raised by some
constituents about the lack of comparability caused by multiple
transition methods, Statement No. 148 does not permit the
use of the Statement No. 123 prospective method of
transition for changes to the fair value based method made in
fiscal years beginning after December 15, 2003. Adoption is
not expected to have a material effect on our financial
condition or results of operations.

In January 2003, the FASB issued
Interpretation No. 46, Consolidation of Variable
Interest Entities, which addresses consolidation by
business enterprises of variable interest entities. In general,
a variable interest entity is a corporation, partnership, trust,
or any other legal structure used for business purposes that
either (a) does not have equity investors with voting
rights or (b) has equity investors that do not provide
sufficient financial resources for the entity to support its
activities. A variable interest entity often holds financial
assets, including loans or receivables, real estate or other
property. A variable interest entity may be essentially passive
or it may engage in research and development or other activities
on behalf of another company. The objective of Interpretation
No. 46 is not to restrict the use of variable interest
entities but to improve financial reporting by companies
involved with variable interest entities. Until now, a company
generally has included another entity in its consolidated
financial statements only if it controlled the entity through
voting interests. Interpretation No. 46 changes that by
requiring a variable interest entity to be consolidated by a
company if that company is subject to a majority of the risk of
loss from the variable interest entitys activities or is
entitled to receive a majority of the entitys residual
returns or both. The consolidation requirements of
Interpretation No. 46 apply immediately to variable
interest entities created after January 31, 2003. The
consolidation requirements apply to older entities in the first
fiscal year or interim period beginning after June 15,
2003. Certain of the disclosure requirements apply in all
financial statements issued after January 31, 2003,
regardless of when the variable interest entity was established.
Adoption is not expected to have a material effect on our
financial condition or results of operations.

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|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About
    Market Risk

Interest Rate Risk

Our primary market risk exposure consists of
changes in interest rates on borrowings under our debt
instruments that bear interest at variable rates that fluctuate
with market interest rates. These debt instruments include our
$65.0 million secured credit facility (no amounts outstanding as
of December 31, 2002), the remaining balance on our
$45.0 million secured term loan, our $108.0 million secured
term loan and our share of floating rate debt under our
unconsolidated joint ventures of $24.6 million at year end.

We have entered into both variable and fixed rate
debt arrangements to allow us to optimize the balance of using
variable rate debt versus fixed rate debt. Our variable rate
debt allows us to maximize financial flexibility when selling
properties and minimize potential prepayment penalties on fixed
rate loans. Our $130.0 million, 6.9% fixed rate term note
allows us to minimize our interest rate risk exposure. In
March 2001, we also purchased interest protection on
$83.0 million of our floating rate debt that fixes the
overall interest rate on this debt at 7.32% through
July 2003. Approximately 76% of our outstanding debt at
December 31, 2002 is fixed-rate in nature, compared with
66% at the end of 2001. The weighted average interest rate of
our variable rate debt was 4.5% as of December 31, 2002.

We review interest rate exposure continuously in
an effort to minimize the risk of interest rate fluctuations. It
is our policy to manage our exposure to fluctuations in market
interest rates on our borrowings through the use of fixed rate
debt instruments, to the extent that reasonably favorable rates
are obtainable with such arrangements, and after considering the
need for financial flexibility related to our debt arrangements.
We may enter into forward interest rate agreements, or similar
agreements, to hedge our variable rate debt instruments where we
believe the risk of adverse changes in market rates is
significant. Under a forward interest rate agreement, if the
referenced interest rate increases, we would be entitled to a
receipt in settlement of the agreement that economically would
offset the higher financing cost of the debt issued. If the
referenced interest rate decreases, we would make payments in
settlement of the agreement, creating an expense that
economically would offset the reduced financing cost of the debt
issued. Other than the interest protection agreement discussed
above, we do not have any other material market-sensitive
financial instruments.

We do not believe that changes in market interest
rates will have a material impact on the performance or fair
value of our hotel portfolio as the value of our hotel portfolio
is based primarily on the operating cash flow of the hotels,
before interest expense charges. However, a change of 1/4% in
the index rate to which our variable rate debt is tied would
change our annual interest incurred by $0.2 million, based
upon the balances outstanding on our variable rate instruments
at December 31, 2002.






|        |                                                            
|------- | -----------------------------------------------------------
|Item 8. | Consolidated Financial Statements and
    Supplemental Data

See Index to the Financial Statements on page F-1.






|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants
    on Accounting and Financial Disclosure

Effective April 17, 2002, the Board of
Directors dismissed Arthur Andersen, LLP (Andersen)
as the Companys independent accountant. The Audit
Committee of the Board of Directors did not consider the
recommendation to change accountants because the change was
considered and approved by the entire Board of Directors. On
April 17, 2002, Deloitte & Touche LLP
(Deloitte) was engaged as the Companys new
independent accountant.

The reports of Andersen on the Companys
financial statements for the past two fiscal years did not
contain an adverse opinion or a disclaimer of opinion and were
not qualified or modified as to uncertainty, audit scope, or
accounting principles.

In connection with the audits of the
Companys financial statements for each of the two fiscal
years ended December 31, 2001, there were no disagreements
with Andersen on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope and
procedures which, if not resolved to the satisfaction of
Andersen would have caused Andersen to make reference to the
matter in its report; and there were

29



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##### Table of Contents



no reportable events as defined in
Item 304(a)(1)(v) of Securities and Exchange Commission
Regulation S-K. Attached as Exhibit 16.1 to the
Companys Current Report on Form 8-K filed with the
Securities and Exchange Commission on April 22, 2002 is a copy
of Andersens letter, dated April 19, 2002, stating
that it agrees with the above statements.


During the two most recent fiscal years and their
subsequent interim period through April 22, 2002, neither
the Company nor anyone on behalf of the Company consulted with
Deloitte regarding either the application of accounting
principles to a specified transaction, either completed or
proposed; or the type of audit opinion that might be rendered on
the Companys financial statements; or on any matter
considered important by the Company in reaching a decision as to
any accounting, auditing or financial reporting issue or any
matter that was either the subject of a disagreement as defined
in Item 304(a)(1)(v)(iv) of Regulation S-K, or any
reportable event, as defined in Item 304(a)(1)(v) of
Regulation S-K.




PART III






|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant

The information required by this Item 10 is
incorporated by reference to the information under the headings
Election of Directors and Section 16(a)
Beneficial Ownership Reporting Compliance contained in
Boykins Proxy Statement in connection with its Annual
Meeting of Shareholders to be held on May 22, 2003, and the
information under the heading Executive Officers in
Part I of this Annual Report on Form 10-K.






|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

The information required by this Item 11 is
incorporated by reference to the information under the heading
Executive Compensation contained in Boykins
Proxy Statement in connection with its Annual Meeting of
Shareholders to be held on May 22, 2003.






|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
    Owners and Management

The information required by this Item 12,
other than the information required by Item 201(d) of
Regulation S-K is incorporated by reference to the
information under the heading Security Ownership of
Certain Beneficial Owners and Management contained in
Boykins Proxy Statement in connection with its Annual
Meeting of Shareholders to be held on May 22, 2003. The
information required by Item 201(d) of Regulation S-K
is set forth in section (d) of Item 5 of this Annual
Report on Form 10-K.






|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

The information required by this Item 13 is
incorporated by reference to the information under the heading
Certain Relationships and Related Transactions
contained in Boykins Proxy Statement in connection with
its Annual Meeting of Shareholders to be held on May 22,
2003.






|         |                        
|-------- | -----------------------
|Item 14. | Controls and Procedures

(a) Evaluation of Disclosure Controls and
Procedures

An evaluation was performed under the supervision
and with the participation of the principal executive and
financial officers with regard to the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14(c) and 15d-14). Based upon their evaluation as
of a date within 90 days of the filing date of this annual
report, they have concluded that our disclosure controls and
procedures were adequate and effective.

(b) Changes in Internal
Controls

There have not been any significant changes
within our internal controls or in other factors that could
significantly affect the controls subsequent to the date of
their evaluation.

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##### Table of Contents






PART IV






|         |                                                                     
|-------- | --------------------------------------------------------------------
|ITEM 15. | Exhibits, Financial Statement Schedules, and
    Reports on Form 8-K

(a) See page F-1 for an index to financial
statements and required schedules.All other financial statement
schedules within the provisions of Regulation S-X that are
not listed in the index are either not required to be included
under the related instructions or are not applicable or the
appropriate information is included in the notes to the
consolidated financial statements and therefore, have been
omitted.

|         |       |     |  |                                                                                                                                                                   
|-------- | ----- | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |       |    
|         |       |    
|         | 3.1   | (a) |  | Amended and Restated Articles of Incorporation,
    as amended                                                                                                    
|         | 3.2   | (b) |  | Code of Regulations                                                                                                                                               
|         | 4.1   | (b) |  | Specimen Share Certificate                                                                                                                                        
|         | 4.2   | (a) |  | Dividend Reinvestment and Optional Share Purchase
    Plan                                                                                                        
|         | 4.3   | (d) |  | Shareholder Rights Agreement, dated as of May 25,
    1999 between Boykin Lodging Company and National City Bank as
    rights agent                              
|         | 4.3a  | (g) |  | Amendment to Shareholder Rights Agreement, dated
    as of December 31, 2001                                                                                      
|         | 10.1  | (i) |  | Third Amended and Restated Agreement of Limited
    Partnership of Boykin Hotel Properties, L.P.                                                                  
|         | 10.2  | (b) |  | Form of Registration Rights Agreement                                                                                                                             
|         | 10.3  | (b) |  | Long-Term Incentive Plan*                                                                                                                                         
|         | 10.4  | (b) |  | Directors Deferred Compensation Plan*                                                                                                                            
|         | 10.5  | (b) |  | Employment Agreement between the Company and
    Robert W. Boykin*                                                                                                
|         | 10.6  | (b) |  | Form of Percentage Lease                                                                                                                                          
|         | 10.7  | (b) |  | Intercompany Convertible Note                                                                                                                                     
|         | 10.8  | (b) |  | Agreements with General Partners of the
    Contributed Partnerships                                                                                              
|         | 10.9  | (b) |  | Form of Noncompetition Agreement                                                                                                                                  
|         | 10.10 | (b) |  | Alignment of Interests Agreement                                                                                                                                  
|         | 10.11 | (c) |  | Description of Employment Arrangement between the
    Company and Richard C. Conti*                                                                               
|         | 10.12 | (d) |  | Limited Liability Company Agreement of Boykin/AEW
    LLC dated as of February 1, 1999                                                                            
|         | 10.13 | (e) |  | Stock Purchase Option Agreement by and among
    Boykin Lodging Company, Boykin Hotel Properties, L.P. and AEW
    Partners III, L.P. dated as of February 1, 1999
|         | 10.14 | (e) |  | Warrant to Purchase Class A Cumulative Preferred
    Stock, Series 1999-A of Boykin Lodging Company dated as of
    February 1, 1999                              
|         | 10.15 | (e) |  | Registration Rights Agreement by and among Boykin
    Lodging Company and AEW Partners III, L.P. dated as of February
    1, 1999                                 
|         | 10.16 | (f) |  | Key Employee Severance Plan*                                                                                                                                      
|         | 10.17 | (f) |  | Form of Severance Agreement*                                                                                                                                      
|         | 10.18 | (g) |  | Master Contribution Agreement between BMC, JABO
    LLC, the Company and the Partnership dated as of December 31,
    2001                                        
|         | 10.19 | (g) |  | Form of Hotel Management Agreement*                                                                                                                               
|         | 10.20 | (g) |  | Registration Rights Agreement between the Company
    and JABO LLC dated January 1, 2002                                                                          
|         | 10.21 |     |  | Description of Employment Arrangement between the
    Company and Shereen P. Jones*                                                                               
|         | 12    |     |  | Statement re Computation of Ratios                                                                                                                                
|         | 16.1  | (h) |  | Letter of Arthur Andersen LLP required by Item
    304 of Regulation S-K                                                                                          
|         | 21    |     |  | Subsidiaries of the Registrant                                                                                                                                    



---



##### Table of Contents



|         |      |  |  |                              
|-------- | ---- |  |  | -----------------------------
|Exhibits |      | 
|         |      | 
|         | 23.1 |  |  | Independent Auditors Consent



|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|(a) | Incorporated by reference from Boykins
    Form 10-Q for the quarter ended June 30, 1999.



|    |                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Incorporated by reference from Amendment
    No. 3 to Boykins Registration Statement on
    Form S-11 (Registration No. 333-6341) (the
    Form S-11) filed on October 24, 1996. Each
    of the above exhibits has the same exhibit number in the
    Form S-11.



|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|(c) | Incorporated by reference from Boykins
    Form 10-Q for the quarter ended June 30, 1998.



|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(d) | Incorporated by reference from Boykins
    Form 10-Q for the quarter ended March 31, 1999.



|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(e) | Incorporated by reference from Boykins
    Form 10-Q for the quarter ended March 31, 1999.



|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(f) | Incorporated by reference from Boykins
    Form 10-K for the year ended December 31, 1999.



|    |                                                                                
|--- | -------------------------------------------------------------------------------
|(g) | Incorporated by reference from Boykins
    Form 8-K filed on January 14, 2002.
|   
|(h) | Incorporated by reference from Boykins
    Form 8-K filed on April 22, 2002.  



|    |                                                                               
|--- | ------------------------------------------------------------------------------
|(i) | Incorporated by reference from Boykins
    Form 8-K filed on October 4, 2002.



|    |                                                             
|--- | ------------------------------------------------------------
|*   | Management contract or compensatory plan or
    arrangement.
|   
|(b) | Reports on Form 8-K                                         

On October 4, 2002, Boykin filed a Current
Report on Form 8-K related to the submission of the forms
of preferred share certificate and depositary share certificate
and Underwriting Agreement and Deposit Agreement related to the
Companys October 2002 preferred share offering as well as
the Third Amended and Restated Limited Partnership Agreement of
Boykin Hotel Properties L.P.



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##### Table of Contents



BOYKIN LODGING COMPANY

AS OF DECEMBER 31, 2002 AND 2001


INDEX TO FINANCIAL STATEMENTS

|                                                                                                             |  |  |      | 
|------------------------------------------------------------------------------------------------------------ |  |  | ---- | 
|Independent Auditors Report                                                                                 |  |  | F-2  | 
|Consolidated Balance Sheets as of
    December 31, 2002 and 2001                                             |  |  | F-3  | 
|Consolidated Statements of Operations for the
    Years Ended December 31, 2002, 2001 and 2000               |  |  | F-4  | 
|Consolidated Statements of Shareholders
    Equity for the Years Ended December 31, 2002, 2001
    and 2000 |  |  | F-5  | 
|Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2002, 2001 and 2000               |  |  | F-6  | 
|Notes to Consolidated Financial Statements                                                                   |  |  | F-7  | 
|Schedule III  Real Estate and
    Accumulated Depreciation as of December 31, 2002                          |  |  | F-28 | 

F-1



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##### Table of Contents



INDEPENDENT AUDITORS REPORT

To the Board of Directors and Shareholders of

Boykin Lodging Company:


We have audited the accompanying consolidated
balance sheets of Boykin Lodging Company (an Ohio corporation)
and subsidiaries (the Company) as of December 31,
2002 and 2001, and the related consolidated statements of
operations, shareholders equity and cash flows for each of
the three years in the period ended December 31, 2002. Our
audits also included the financial statement schedule listed in
the Index to the financial statements. These financial
statements and the financial statement schedule are the
responsibility of the Companys management. Our
responsibility is to express an opinion on the financial
statements and the financial statement schedule based on our
audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, such consolidated financial
statements present fairly, in all material respects, the
financial position of Boykin Lodging Company and subsidiaries as
of December 31, 2002 and 2001, and the results of their
operations and their cash flows for each of the three years in
the period ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States of
America. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

As discussed in Note 2 to the consolidated
financial statements, effective January 1, 2001, the
Company changed its method of accounting for derivative
financial instruments.

Deloitte & Touche LLP

Cleveland, Ohio


February 26, 2003


F-2



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##### Table of Contents



BOYKIN LODGING COMPANY

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2002 AND 2001

(dollar amounts in thousands)

|                                                                                                |                                                                                                                                                                               |      |         |          |   |   |         |          |  
|----------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | ------- | -------- | - | - | ------- | -------- | -
|                                                                                                |                                                                                                                                                                               | 2002 |         | 2001    
|                                                                                                |                                                                                                                                                                               |      |         |         
|ASSETS                                                                                          |                                                                                                                                                                               |      |         |          |   |   |         |         
|Investment in hotel properties                                                                  |                                                                                                                                                                               | $    | 630,672 |          |   | $ | 629,203 |         
|                                                                                                | Accumulated depreciation                                                                                                                                                      |      |         | (135,596 | ) |   |         | (108,719 | )
|                                                                                                |                                                                                                                                                                               |      |         |          |   |   |         |         
|Investment in hotel properties, net                                                             |                                                                                                                                                                               |      | 495,076 |          |   |   | 520,484 |         
|Cash and cash equivalents                                                                       |                                                                                                                                                                               |      | 25,453  |          |   |   | 3,610   |         
|Restricted cash                                                                                 |                                                                                                                                                                               |      | 13,492  |          |   |   | 9,423   |         
|Accounts receivable, net of allowance for
    doubtful accounts of $421 as of December 31, 2002 |                                                                                                                                                                               |      | 9,474   |          |   |   |        |         
|Receivable from related party related to
    lease terminations                                 |                                                                                                                                                                               |      | 6       |          |   |   | 2,008   |         
|Rent receivable from lessees                                                                    |                                                                                                                                                                               |      | 154     |          |   |   | 1,459   |         
|Inventories                                                                                     |                                                                                                                                                                               |      | 2,124   |          |   |   |        |         
|Deferred financing costs and other, net                                                         |                                                                                                                                                                               |      | 3,147   |          |   |   | 4,588   |         
|Investment in unconsolidated joint ventures                                                     |                                                                                                                                                                               |      | 17,156  |          |   |   | 14,973  |         
|Other assets                                                                                    |                                                                                                                                                                               |      | 9,427   |          |   |   | 2,673   |         
|                                                                                                |                                                                                                                                                                               |      |         |          |   |   |         |         
|                                                                                                |                                                                                                                                                                               | $    | 575,509 |          |   | $ | 559,218 |         
|                                                                                                |                                                                                                                                                                               |      |         |          |   |   |         |         
|LIABILITIES AND SHAREHOLDERS
    EQUITY                                                        |                                                                                                                                                                               |      |         |          |   |   |         |         
|Borrowings against credit facility                                                              |                                                                                                                                                                               | $    |        |          |   | $ | 39,000  |         
|Term notes payable                                                                              |                                                                                                                                                                               |      | 274,827 |          |   |   | 279,971 |         
|Accounts payable and accrued expenses                                                           |                                                                                                                                                                               |      | 38,742  |          |   |   | 15,239  |         
|Dividends/distributions payable                                                                 |                                                                                                                                                                               |      | 4,747   |          |   |   |        |         
|Net liabilities assumed in connection with
    termination of leases                            |                                                                                                                                                                               |      |        |          |   |   | 3,515   |         
|Due to lessees                                                                                  |                                                                                                                                                                               |      | 281     |          |   |   | 496     |         
|Minority interest in joint ventures                                                             |                                                                                                                                                                               |      | 2,419   |          |   |   | 2,530   |         
|Minority interest in operating partnership                                                      |                                                                                                                                                                               |      | 14,202  |          |   |   | 15,821  |         
|                                                                                               
|SHAREHOLDERS EQUITY:                                                                           |                                                                                                                                                                               |      |         |          |   |   |         |         
|                                                                                                | Preferred shares, without par value; 10,000,000
    shares authorized; 181,000 shares and no shares issued and
    outstanding as of December 31, 2002 and 2001, respectively |      |         |         |   |   |         |         |  
|                                                                                                | Common shares, without par value; 40,000,000
    shares authorized; 17,276,407 and 17,191,954 shares outstanding
    at December 31, 2002 and 2001, respectively              |      |         |         |   |   |         |         |  
|                                                                                                | Additional paid-in capital                                                                                                                                                    |      |         | 356,228  |   |   |         | 312,171  |  
|                                                                                                | Distributions in excess of income                                                                                                                                             |      |         | (112,970 | ) |   |         | (105,193 | )
|                                                                                                | Other comprehensive loss                                                                                                                                                      |      |         | (1,773   | ) |   |         | (2,838   | )
|                                                                                                | Unearned compensation 
    restricted shares                                                                                                                                 |      |         | (1,194   | ) |   |         | (1,494   | )
|                                                                                                |                                                                                                                                                                               |      |         |          |   |   |         |         
|                                                                                                | Total shareholders equity                                                                                                                                                    |      |         | 240,291  |   |   |         | 202,646  |  
|                                                                                                |                                                                                                                                                                               |      |         |          |   |   |         |         
|                                                                                                |                                                                                                                                                                               | $    | 575,509 |          |   | $ | 559,218 |         
|                                                                                                |                                                                                                                                                                               |      |         |          |   |   |         |         

See notes to consolidated financial statements.

F-3



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##### Table of Contents



BOYKIN LODGING COMPANY

CONSOLIDATED STATEMENTS OF
OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2002, 2001
AND 2000

(amounts in thousands, except for per share
data)

|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |         |        | 
|------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ------------------------ | ------ | ------- | ------- | ---- | ------- | ------- | ------- | - | ----- | ------- | ------ | 
|                                                                                                                                                        |                                                                                                    | 2002                     |        | 2001    |         | 2000
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |     
|Revenues:                                                                                                                                               |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        | Hotel revenues:                                                                                    |                          |        |         |         |      |         |         |         |   |       |         |       
|                                                                                                                                                        |                                                                                                    | Rooms                    |        | $       | 161,300 |      |         | $       | 4,315   |   |       | $       | 4,497  | 
|                                                                                                                                                        |                                                                                                    | Food and beverage        |        |         | 73,903  |      |         |         | 2,051   |   |       |         | 1,890  | 
|                                                                                                                                                        |                                                                                                    | Other                    |        |         | 14,459  |      |         |         | 297     |   |       |         | 348    | 
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        | Total hotel revenues                                                                               |                          |        | 249,662 |         |      |         | 6,663   |         |   |       | 6,735   |       
|                                                                                                                                                        | Lease revenue                                                                                      |                          |        | 4,730   |         |      |         | 71,990  |         |   |       | 85,854  |       
|                                                                                                                                                        | Sales of condominium units                                                                         |                          |        | 8,715   |         |      |         |        |         |   |       |        |       
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        |                                                                                                    | Total revenues           |        |         | 263,107 |      |         |         | 78,653  |   |       |         | 92,589 | 
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|Expenses:                                                                                                                                               |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        | Hotel operating expenses:                                                                          |                          |        |         |         |      |         |         |         |   |       |         |       
|                                                                                                                                                        |                                                                                                    | Rooms                    |        |         | 40,670  |      |         |         | 1,121   |   |       |         | 1,200  | 
|                                                                                                                                                        |                                                                                                    | Food and beverage        |        |         | 51,292  |      |         |         | 1,422   |   |       |         | 1,393  | 
|                                                                                                                                                        |                                                                                                    | Other direct             |        |         | 8,455   |      |         |         | 157     |   |       |         | 184    | 
|                                                                                                                                                        |                                                                                                    | Indirect                 |        |         | 76,024  |      |         |         | 2,511   |   |       |         | 2,442  | 
|                                                                                                                                                        |                                                                                                    | Management fees          |        |         | 7,205   |      |         |         | 200     |   |       |         | 202    | 
|                                                                                                                                                        | Property taxes, insurance and other                                                                |                          |        | 14,178  |         |      |         | 10,922  |         |   |       | 10,714  |       
|                                                                                                                                                        | Cost of sales of condominium units                                                                 |                          |        | 6,474   |         |      |         |        |         |   |       |        |       
|                                                                                                                                                        | Real estate related depreciation
    and amortization                                              |                          |        | 30,174  |         |      |         | 28,474  |         |   |       | 30,374  |       
|                                                                                                                                                        | Corporate general and administrative                                                               |                          |        | 6,714   |         |      |         | 6,230   |         |   |       | 5,849   |       
|                                                                                                                                                        | Gain on property insurance recovery                                                                |                          |        |        |         |      |         |        |         |   |       | (407    | )     
|                                                                                                                                                        | Impairment of real estate                                                                          |                          |        |        |         |      |         | 24,000  |         |   |       | 7,000   |       
|                                                                                                                                                        | Costs associated with termination of leases                                                        |                          |        |        |         |      |         | 15,000  |         |   |       |        |       
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        |                                                                                                    | Total operating expenses |        |         | 241,186 |      |         |         | 90,037  |   |       |         | 58,951 | 
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        |                                                                                                    | Operating income (loss)  |        |         | 21,921  |      |         |         | (11,384 | ) |       |         | 33,638 | 
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        | Interest income                                                                                    |                          |        | 357     |         |      |         | 409     |         |   |       | 531     |       
|                                                                                                                                                        | Other income                                                                                       |                          |        | 1,095   |         |      |         | 1,071   |         |   |       | 631     |       
|                                                                                                                                                        | Interest expense                                                                                   |                          |        | (20,011 | )       |      |         | (21,916 | )       |   |       | (24,291 | )     
|                                                                                                                                                        | Amortization of deferred financing costs                                                           |                          |        | (2,182  | )       |      |         | (1,205  | )       |   |       | (1,242  | )     
|                                                                                                                                                        | Minority interest in earnings (loss) of
    joint ventures                                         |                          |        | (133    | )       |      |         | 193     |         |   |       | (534    | )     
|                                                                                                                                                        | Minority interest in earnings (loss) of
    operating partnership                                  |                          |        | 640     |         |      |         | 2,806   |         |   |       | (385    | )     
|                                                                                                                                                        | Equity in income (loss) of unconsolidated
    joint ventures                                       |                          |        | (2,040  | )       |      |         | 589     |         |   |       | 68      |       
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|Income (loss) before gain (loss) on
    sale of assets, extraordinary item and cumulative effect of
    change in accounting principle                  |                                                                                                    |                          | (353   | )       |         |      | (29,437 | )       |         |   | 8,416 |        
|                                                                                                                                                        | Gain (loss) on sale of assets                                                                      |                          |        | (18     | )       |      |         | 240     |         |   |       |        |       
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|Income (loss) before extraordinary item and
    cumulative effect of change in accounting principle                                                     |                                                                                                    |                          | (371   | )       |         |      | (29,197 | )       |         |   | 8,416 |        
|                                                                                                                                                        | Extraordinary item  loss
    on early extinguishment of debt, net of minority interest
    of $59 |                          |        |        |         |      |         |        |         |   |       | (686    | )     
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|Income (loss) before cumulative effect of
    change in accounting principle                                                                            |                                                                                                    |                          | (371   | )       |         |      | (29,197 | )       |         |   | 7,730 |        
|                                                                                                                                                        | Cumulative effect of change in accounting
    principle, net of minority interest of $32           |                          |        |        |         |      |         | (373    | )       |   |       |        |       
|Net income (loss)                                                                                                                                       |                                                                                                    | $                        | (371   | )       |         | $    | (29,570 | )       |         | $ | 7,730 |        
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        | Preferred dividends                                                                                |                          |        | (1,109  | )       |      |         |        |         |   |       |        |       
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|Net income (loss) applicable to common
    shareholders                                                                                                 |                                                                                                    | $                        | (1,480 | )       |         | $    | (29,570 | )       |         | $ | 7,730 |        
|                                                                                                                                                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|Net income (loss) per share applicable
    to common shareholders before extraordinary item and
    cumulative effect of change in accounting principle |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        | Basic                                                                                              |                          | $      | (0.09   | )       |      | $       | (1.70   | )       |   | $     | 0.49    |       
|                                                                                                                                                        | Diluted                                                                                            |                          | $      | (0.09   | )       |      | $       | (1.70   | )       |   | $     | 0.49    |       
|Net income (loss) per share applicable to
    common shareholders before cumulative effect of change in
    accounting principle                        |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        | Basic                                                                                              |                          | $      | (0.09   | )       |      | $       | (1.70   | )       |   | $     | 0.45    |       
|                                                                                                                                                        | Diluted                                                                                            |                          | $      | (0.09   | )       |      | $       | (1.70   | )       |   | $     | 0.45    |       
|Net income (loss) per share applicable to
    common shareholders                                                                                       |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        | Basic                                                                                              |                          | $      | (0.09   | )       |      | $       | (1.72   | )       |   | $     | 0.45    |       
|                                                                                                                                                        | Diluted                                                                                            |                          | $      | (0.09   | )       |      | $       | (1.72   | )       |   | $     | 0.45    |       
|Weighted average number of common shares
    outstanding                                                                                                |                                                                                                    |                          |        |         |         |      |         |         |         |   |       |        
|                                                                                                                                                        | Basic                                                                                              |                          |        | 17,248  |         |      |         | 17,176  |         |   |       | 17,137  |       
|                                                                                                                                                        | Diluted                                                                                            |                          |        | 17,383  |         |      |         | 17,281  |         |   |       | 17,305  |       

See notes to consolidated financial statements.

F-4



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##### Table of Contents



BOYKIN LODGING COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS
EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2002, 2001,
AND 2000

(dollar amounts in thousands)

|                             |                                                                      |                                                                          |         |         |   |            |            |               |   |               |         |              |   |       |          |         |        |   |        |   |        |   |        |      |   |   |         |         |        |  
|---------------------------- | -------------------------------------------------------------------- | ------------------------------------------------------------------------ | ------- | ------- | - | ---------- | ---------- | ------------- | - | ------------- | ------- | ------------ | - | ----- | -------- | ------- | ------ | - | ------ | - | ------ | - | ------ | ---- | - | - | ------- | ------- | ------ | -
|                             |                                                                      |                                                                          |         |         |   | Additional |            | Distributions |   | Other         |         |              |   |      
|                             |                                                                      | Preferred                                                                |         | Common  |   | Paid-In    |            | In Excess of  |   | Comprehensive |         | Unearned     |   |      
|                             |                                                                      | Shares                                                                   |         | Shares  |   | Capital    |            | Income        |   | Gain/(Loss)   |         | Compensation |   | Total
|                             |                                                                      |                                                                          |         |         |   |            |            |               |   |               |         |              |   |      
|Balance at January 1, 2000   |                                                                      |                                                                          |        |         |   |            | 17,106,242 |               |   | $             | 310,396 |              |   | $     | (35,434  | )       |        | $ |       |   |        | $ | (1,232 | )    |   | $ | 273,730 |        
|                             | Issuance of common shares, net of offering
    expenses of $31       |                                                                          |         |        |   |            |            | 40,696        |   |               |         | 1,097        |   |       |          |        |        |   |        |  |        |   |        | (865 | ) |   |         | 232     |       
|                             | Dividends declared   $1.67 per common
    share                     |                                                                          |         |        |   |            |            |              |   |               |         |             |   |       |          | (28,889 | )      |   |        |  |        |   |        |     |   |   |         | (28,889 | )     
|                             | Amortization of unearned compensation                                |                                                                          |         |        |   |            |            |              |   |               |         |             |   |       |          |        |        |   |        |  |        |   |        | 463  |   |   |         | 463     |       
|                             | Net income                                                           |                                                                          |         |        |   |            |            |              |   |               |         |             |   |       |          | 7,730   |        |   |        |  |        |   |        |     |   |   |         | 7,730   |       
|                             |                                                                      |                                                                          |         |         |   |            |            |               |   |               |         |              |   |       |          |         |        |   |        |   |        |   |        |      |   |   |         |        
|Balance at December 31, 2000 |                                                                      |                                                                          |        |         |   |            | 17,146,938 |               |   |               | 311,493 |              |   |       | (56,593  | )       |        |   |       |   |        |   | (1,634 | )    |   |   | 253,266 |        
|                             | Issuance of common shares, net of offering
    expenses of $6        |                                                                          |         |        |   |            |            | 45,016        |   |               |         | 678          |   |       |          |        |        |   |        |  |        |   |        | (449 | ) |   |         | 229     |       
|                             | Dividends declared   $1.10 per
    common share                     |                                                                          |         |        |   |            |            |              |   |               |         |             |   |       |          | (19,030 | )      |   |        |  |        |   |        |     |   |   |         | (19,030 | )     
|                             | Amortization of unearned compensation                                |                                                                          |         |        |   |            |            |              |   |               |         |             |   |       |          |        |        |   |        |  |        |   |        | 589  |   |   |         | 589     |       
|                             | Net loss                                                             |                                                                          |         |        |   |            |            |              |   |               |         |             |   |       |          | (29,570 | )      |   |        |  |        |   |        |     |   |   |         | (29,570 | )     
|                             |                                                                      | Other comprehensive loss  net
    unrealized loss on interest rate swap |         |         |  |            |            |               |  |               |         |              |  |       |          |         |       |   |        |   | (2,838 | ) |        |      |  |   |         |         | (2,838 | )
|                             |                                                                      |                                                                          |         |         |   |            |            |               |   |               |         |              |   |       |          |         |        |   |        |   |        |   |        |      |   |   |         |        
|                             | Total comprehensive loss                                             |                                                                          |         |        |   |            |            |              |   |               |         |             |   |       |          |        |        |   |        |  |        |   |        |     |   |   |         | (32,408 | )     
|                             |                                                                      |                                                                          |         |         |   |            |            |               |   |               |         |              |   |       |          |         |        |   |        |   |        |   |        |      |   |   |         |        
|Balance at December 31, 2001 |                                                                      |                                                                          |        |         |   |            | 17,191,954 |               |   |               | 312,171 |              |   |       | (105,193 | )       |        |   | (2,838 | ) |        |   | (1,494 | )    |   |   | 202,646 |        
|                             | Issuance of common shares, net of offering
    expenses of $3        |                                                                          |         |        |   |            |            | 104,461       |   |               |         | 1,126        |   |       |          |        |        |   |        |  |        |   |        | (692 | ) |   |         | 434     |       
|                             | Issuance of preferred shares, net of offering
    expenses of $2,016 |                                                                          |         | 181,000 |   |            |            |              |   |               |         | 43,234       |   |       |          |        |        |   |        |  |        |   |        |     |   |   |         | 43,234  |       
|                             | Common share purchases for treasury                                  |                                                                          |         |        |   |            |            | (20,008       | ) |               |         | (303         | ) |       |          |        |        |   |        |  |        |   |        |     |   |   |         | (303    | )     
|                             | Dividends declared                                                   |                                                                          |         |         |   |            |            |               |   |               |         |              |   |       |          |         |        |   |        |   |        |   |        |      |   |   |         |         |       
|                             |                                                                      |  $0.36 per common share                                                 |         |         |  |            |            |               |  |               |         |              |  |       |          |         | (6,297 | ) |        |   |       |   |        |      |  |   |         |         | (6,297 | )
|                             |                                                                      |  $6.125 per Class A
    preferred share                                 |         |         |  |            |            |               |  |               |         |              |  |       |          |         | (1,109 | ) |        |   |       |   |        |      |  |   |         |         | (1,109 | )
|                             | Amortization of unearned compensation                                |                                                                          |         |        |   |            |            |              |   |               |         |             |   |       |          |        |        |   |        |  |        |   |        | 992  |   |   |         | 992     |       
|                             | Net loss                                                             |                                                                          |         |        |   |            |            |              |   |               |         |             |   |       |          | (371    | )      |   |        |  |        |   |        |     |   |   |         | (371    | )     
|                             | Other comprehensive income                                           |                                                                          |         |         |   |            |            |               |   |               |         |              |   |       |          |         |        |   |        |   |        |   |        |      |   |   |         |         |       
|                             |                                                                      |  Net unrealized gain on interest
    rate swap                          |         |         |  |            |            |               |  |               |         |              |  |       |          |         |       |   |        |   | 1,065  |   |        |      |  |   |         |         | 1,065  |  
|                             |                                                                      |                                                                          |         |         |   |            |            |               |   |               |         |              |   |       |          |         |        |   |        |   |        |   |        |      |   |   |         |        
|                             | Total comprehensive income                                           |                                                                          |         |        |   |            |            |              |   |               |         |             |   |       |          |        |        |   |        |  |        |   |        |     |   |   |         | 694     |       
|                             |                                                                      |                                                                          |         |         |   |            |            |               |   |               |         |              |   |       |          |         |        |   |        |   |        |   |        |      |   |   |         |        
|Balance at December 31, 2002 |                                                                      |                                                                          | 181,000 |         |   |            | 17,276,407 |               |   | $             | 356,228 |              |   | $     | (112,970 | )       |        | $ | (1,773 | ) |        | $ | (1,194 | )    |   | $ | 240,291 |        
|                             |                                                                      |                                                                          |         |         |   |            |            |               |   |               |         |              |   |       |          |         |        |   |        |   |        |   |        |      |   |   |         |        

See notes to consolidated financial statements.

F-5



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##### Table of Contents



BOYKIN LODGING COMPANY

CONSOLIDATED STATEMENTS OF CASH
FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2002, 2001
AND 2000

(amounts in thousands)

|                                                   |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |         |        |        |  
|-------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------- | ------------------------------------- | ------- | ------ | ------ | ------- | ------- | ------ | ------ | ------- | ------- | ------ | ------ | -
|                                                   |                                                                                                        | 2002                                                          |                                       | 2001    |        | 2000  
|                                                   |                                                                                                        |                                                               |                                       |         |        |       
|Cash flows from operating activities:              |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |        
|                                                   | Net income (loss)                                                                                      |                                                               | $                                     | (371    | )      |        | $       | (29,570 | )      |        | $       | 7,730   |       
|                                                   | Adjustments to reconcile net income
    (loss) to net cash flow provided by
    operating activities  |                                                               |                                       |         |        |        |         |         |        |        |         |         |       
|                                                   |                                                                                                        | Cumulative effect of change in
    accounting principle       |                                       |         |       |        |         |         | 373    |        |         |         |       |       
|                                                   |                                                                                                        | Extraordinary item  loss on early
    extinguishment of debt |                                       |         |       |        |         |         |       |        |         |         | 686    |       
|                                                   |                                                                                                        | (Gain) loss on sale of assets                                 |                                       |         | 18     |        |         |         | (240   | )      |         |         |       |       
|                                                   |                                                                                                        | Gain on property insurance recovery                           |                                       |         |       |        |         |         |       |        |         |         | (407   | )     
|                                                   |                                                                                                        | Non-cash charges associated with termination
    of leases    |                                       |         |       |        |         |         | 11,394 |        |         |         |       |       
|                                                   |                                                                                                        | Impairment of real estate                                     |                                       |         |       |        |         |         | 24,000 |        |         |         | 7,000  |       
|                                                   |                                                                                                        | Depreciation and amortization                                 |                                       |         | 32,356 |        |         |         | 29,679 |        |         |         | 31,616 |       
|                                                   |                                                                                                        | Amortization of unearned compensation                         |                                       |         | 992    |        |         |         | 589    |        |         |         | 463    |       
|                                                   |                                                                                                        | Equity in (income) loss of unconsolidated
    joint ventures  |                                       |         | 2,040  |        |         |         | (589   | )      |         |         | (68    | )     
|                                                   |                                                                                                        | Minority interests                                            |                                       |         | (507   | )      |         |         | (2,999 | )      |         |         | 919    |       
|                                                   |                                                                                                        | Changes in assets and liabilities                            |                                       |         |        |        |         |         |        |        |         |         |        |       
|                                                   |                                                                                                        |                                                               | Accounts receivable and inventories   |         |        | 266    |         |         |        |       |         |         |        |       |  
|                                                   |                                                                                                        |                                                               | Restricted cash                       |         |        | (4,069 | )       |         |        | (2,389 | )       |         |        | (3,462 | )
|                                                   |                                                                                                        |                                                               | Accounts payable and accrued expenses |         |        | 1,321  |         |         |        | 2,868  |         |         |        | 734    |  
|                                                   |                                                                                                        |                                                               | Amounts due to/from lessees           |         |        | 3,092  |         |         |        | 1,415  |         |         |        | (372   | )
|                                                   |                                                                                                        |                                                               | Other                                 |         |        | 4,050  |         |         |        | (488   | )       |         |        | (1,439 | )
|                                                   |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |        
|Net cash flow provided by
    operating activities |                                                                                                        |                                                               | 39,188                                |         |        |        | 34,043  |         |        |        | 43,400  |        
|                                                   |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |        
|Cash flows from investing activities:              |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |        
|                                                   | Cash assumed in connection with termination
    of leases                                              |                                                               |                                       | 5,765   |        |        |         |        |        |        |         |        |       
|                                                   | Investment in unconsolidated joint ventures                                                            |                                                               |                                       | (4,408  | )      |        |         | (5,510  | )      |        |         | (6,270  | )     
|                                                   | Distributions received from unconsolidated
    joint ventures                                          |                                                               |                                       | 148     |        |        |         | 1,380   |        |        |         | 406     |       
|                                                   | Improvements and additions to hotel
    properties, net                                                |                                                               |                                       | (13,490 | )      |        |         | (23,042 | )      |        |         | (18,431 | )     
|                                                   | Net proceeds from sale of asset                                                                        |                                                               |                                       |        |        |        |         | 12,374  |        |        |         |        |       
|                                                   | Net proceeds from property insurance recovery                                                          |                                                               |                                       |        |        |        |         |        |        |        |         | 1,186   |       
|                                                   |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |        
|Net cash flow used in investing activities         |                                                                                                        |                                                               | (11,985                               | )       |        |        | (14,798 | )       |        |        | (23,109 | )      
|                                                   |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |        
|Cash flows from financing activities:              |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |        
|                                                   | Payments of dividends and distributions                                                                |                                                               |                                       | (3,638  | )      |        |         | (27,234 | )      |        |         | (32,954 | )     
|                                                   | Net borrowings (repayments) against
    credit facility                                                |                                                               |                                       | (39,000 | )      |        |         | 9,500   |        |        |         | (89,500 | )     
|                                                   | Term note borrowings                                                                                   |                                                               |                                       |        |        |        |         |        |        |        |         | 108,000 |       
|                                                   | Repayment of term note                                                                                 |                                                               |                                       | (5,144  | )      |        |         | (1,969  | )      |        |         | (1,060  | )     
|                                                   | Payment of deferred financing costs                                                                    |                                                               |                                       | (830    | )      |        |         |        |        |        |         | (4,588  | )     
|                                                   | Net proceeds from issuance of
    preferred shares                                                     |                                                               |                                       | 43,234  |        |        |         |        |        |        |         |        |       
|                                                   | Net proceeds from issuance of common shares                                                            |                                                               |                                       | 434     |        |        |         | 229     |        |        |         | 232     |       
|                                                   | Cash payment for common share purchases                                                                |                                                               |                                       | (172    | )      |        |         |        |        |        |         |        |       
|                                                   | Distributions to joint venture minority interest
    partners, net                                     |                                                               |                                       | (244    | )      |        |         | (336    | )      |        |         | (217    | )     
|                                                   |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |        
|Net cash flow used in financing activities         |                                                                                                        |                                                               | (5,360                                | )       |        |        | (19,810 | )       |        |        | (20,087 | )      
|                                                   |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |        
|Net change in cash and cash equivalents            |                                                                                                        | $                                                             | 21,843                                |         |        | $      | (565    | )       |        | $      | 204     |        
|Cash and cash equivalents, beginning of year       |                                                                                                        |                                                               | 3,610                                 |         |        |        | 4,175   |         |        |        | 3,971   |        
|                                                   |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |        
|Cash and cash equivalents, end of year             |                                                                                                        | $                                                             | 25,453                                |         |        | $      | 3,610   |         |        | $      | 4,175   |        
|                                                   |                                                                                                        |                                                               |                                       |         |        |        |         |         |        |        |         |        

See notes to consolidated financial statements.

F-6



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##### Table of Contents



BOYKIN LODGING COMPANY

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2002, 2001
AND 2000

(dollar amounts in thousands except per share
data)



|   |            
|-- | -----------
|1. | Background:

Boykin Lodging Company (Boykin) is a
real estate investment trust (REIT) that owns hotels
throughout the United States. As of December 31, 2002,
Boykin owned interests in 33 hotels containing a total of 9,252
guestrooms located in 19 states, 31 of which are affiliated with
nationally-recognized franchisors. Boykins largest
franchise affiliation is with Doubletree®. Boykin owns 12
Doubletree hotels in eight states, which account for roughly 40%
of the total rooms in Boykins portfolio. Other brands that
Boykin is affiliated with include Hilton®, Marriott®
and Radisson®.

The operations of the hotels have historically
been seasonal. Twenty-nine hotels historically maintained higher
occupancy rates during the second and third quarters while the
four hotels located in Florida have historically experienced
their highest occupancy in the first quarter.



| |          
| | ---------
| | Formation

Boykin was formed and completed an initial public
offering (the IPO) in 1996 to continue and expand
the over 40-year history of hotel ownership, acquisition,
redevelopment and repositioning activities of its predecessors,
Boykin Management Company and its affiliates. Boykin Hotel
Properties, L.P., an Ohio limited partnership (the
Partnership), is the operating partnership that
transacts business and holds the direct and indirect ownership
interest in Boykins hotels. As of December 31, 2002,
Boykin Lodging Company had an 85.1% ownership interest in and is
the sole general partner of the Partnership.

Since the IPO, Boykin has expanded its hotel
portfolio by using capital raised through a combination of
common share issuances, various debt financings, capital from
strategic joint venture partners and cash flow generated from
operations.

As of December 31, 2002, Boykin Management
Company Limited Liability Company (BMC) and certain
of its subsidiaries managed 19 of the 33 hotels in which Boykin
has ownership interests. BMC is owned by Robert W. Boykin,
Chairman and Chief Executive Officer of Boykin (53.8%) and his
brother, John E. Boykin (46.2%).



| |                                     
| | ------------------------------------
| | Taxable REIT Subsidiary Transactions

The Work Incentives Improvement Act of 1999
(REIT Modernization Act) amended the tax laws to
permit REITs, like Boykin, to lease hotels to a subsidiary that
qualifies as a taxable REIT subsidiary (TRS) as long
as the TRS engages an independent hotel management company to
operate those hotels under a management contract. Boykin
implemented this structure for the properties previously leased
to BMC and certain of its subsidiaries and Interstate Hotels and
Resorts (Interstate) effective January 1, 2002.

In conjunction with the transaction, the
Partnership acquired 16 subsidiaries of BMC. The Partnership
acquired these entities, whose primary assets were leasehold
interests in 25 hotel properties owned by the Partnership, and
certain working capital assets and liabilities of those hotels,
for consideration comprised of 1,427,142 limited partnership
units valued at $11.4 million (based upon the average
closing price of the common shares for the five-day period prior
to the closing of the transaction), and the assumption of
$1.6 million of working capital liabilities in excess of
assets relating to Westboy LLC (Westboy), one of the
subsidiaries (See Note 7). The Partnership then contributed the
acquired subsidiaries to Bellboy, Inc. (Bellboy), a
wholly owned subsidiary of the Partnership. Bellboy has elected
to be treated as a TRS.

Effective December 31, 2001, Boykin
terminated percentage lease agreements with affiliates of
Interstate for two hotel properties owned by Boykin. These hotel
properties were re-leased to subsidiaries of Bellboy. An
Interstate affiliate also assigned a percentage lease agreement
for a third hotel property Boykin owns to a

F-7



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





subsidiary of Bellboy. As part of the transaction
with Interstate, Interstate also assigned to Boykin its 20%
equity interest in the joint venture that owns the Kansas City
Doubletree hotel, and certain personal property it owned at the
Pink Shell Beach Resort.


Boykin recorded a charge to earnings of
$15.0 million for the year ended December 31, 2001
relating to the acquisition and termination of the percentage
leases described above and the related transaction costs.

Effective January 1, 2002, Boykin entered
into new management agreements with BMC to operate 15 of the
hotels previously leased to BMC and with Interstate to operate
the three hotels previously leased to them. The BMC management
agreements have terms of three to nine years, but are cancelable
by Boykin without penalty upon 90 days notice. The
Interstate management agreements have terms of five to six
years, and are also cancelable by Boykin without penalty upon
90 days notice.

Boykin later exercised its option to cancel the
management agreements with Interstate for the Kansas City
Doubletree Hotel and the Pink Shell Beach Resort. Effective
October 24, 2002, BMC began managing the hotels under new
management agreements. The new management agreement related to
the Kansas City property is for a term of five years and is
cancelable by Boykin without penalty upon 90 days notice.
The new agreement related to the Pink Shell Beach Resort is for
a term of ten years and provides for certain liquidated damages
in the event of early termination.

Westboy, now a subsidiary of Bellboy, leases ten
Doubletree branded hotels from Boykin. Westboy is party to an
existing long-term management agreement with a subsidiary of
Hilton Hotels Corporation (Hilton) to operate these
hotels. This management agreement has an initial term which
expires in April 2012 and Hilton has renewal options to extend
the term. Except with respect to the three Doubletree hotels
located in the state of Washington, the agreement with Hilton
may not be terminated without penalty.

Boykin owns Marriotts Hunt Valley Inn
through a joint venture with Davidson Hotel Company
(Davidson). The joint venture formed a new
subsidiary, Hunt Valley Leasing, Inc. (Hunt Valley)
effective September 1, 2002, which qualifies as a TRS, to
lease the hotel. Davidson continues to manage the hotel under a
new management agreement which was also effective
September 1, 2002.

Subsequent to this most recent transaction, all
but one of the 33 hotel properties Boykin owned an interest in
as of December 31, 2002 were operated under the TRS
structure.

As a result of the TRS transactions discussed
above, from the effective date of each transaction going
forward, the consolidated financial statements include the
operating results of the consolidated hotels operated by BMC,
Hilton, Interstate and Davidson, as applicable. Previously,
revenues were derived primarily from lease payments which were
made out of the net operating income of the properties; now
revenues are generated from total revenues from the properties
with the related operating expenses also being reported.

F-8



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued







| |                            
| | ---------------------------
| | Consolidated Joint Ventures

As of December 31, 2002, Boykin had
strategic alliances with three hotel operators and owned three
hotels with them through consolidated joint venture structures.
The following table sets forth the joint ventures established
with these hotel operators:

|                       |  |         |            |            |  |            |    |                     |  |               |   |   |  |                                         |  |  |               |  |  | 
|---------------------- |  | ------- | ---------- | ---------- |  | ---------- | -- | ------------------- |  | ------------- | - | - |  | --------------------------------------- |  |  | ------------- |  |  | 
|                       |  |         |            | Boykin     |  | JV         |    |                     |  |              
|                       |  | JV      |            | Ownership  |  | Ownership  |    | Hotel Owned         |  | Date of Hotel
|Name of Joint Venture  |  | Partner |            | Percentage |  | Percentage |    | Under Joint Venture |  | Purchase     
|                       |  |         |            |            |  |            |    |                     |  |              
|BoyStar Ventures, L.P. |  |         | Interstate |            |  |            | 91 | %                   |  |               | 9 | % |  | Holiday Inn Minneapolis West            |  |  | July 1997     | 
|Shawan Road Hotel L.P. |  |         | Davidson   |            |  |            | 91 | %                   |  |               | 9 | % |  | Marriotts Hunt Valley Inn              |  |  | July 1997     | 
|Boykin San Diego LLC   |  |         | Outrigger  |            |  |            | 91 | %                   |  |               | 9 | % |  | Hampton Inn San Diego Airport/Sea World |  |  | November 1997 | 

In 2001, Interstate assigned their 20% ownership
interest in Boykin Kansas City LLC, which owns the Doubletree
Kansas City hotel, to Boykin. The elimination of
Interstates minority interest in the hotel was accounted
for as a $5,029 reduction in the value of the building as of the
date of assignment. After the transfer, Boykin owned 100% of
Boykin Kansas City LLC.

Effective February 1, 2000, Boykin took over
the operations of the Radisson Hotel Mt. Laurel under REIT tax
regulations related to foreclosure properties. The hotel was
previously owned 85% by Boykin under a joint venture agreement
with an affiliate of Radisson Hotels Worldwide
(Radisson) and was leased to the Radisson affiliate.
Under the terms of the agreement with Radisson, the lease was
terminated and Boykin obtained a 100% interest in the hotel. The
hotel is managed by a wholly-owned subsidiary of BMC pursuant to
a management agreement.



| |                              
| | -----------------------------
| | Unconsolidated Joint Ventures

In 1999, Boykin formed a joint venture with AEW
Partners III, L.P. (AEW), an investment partnership
managed by AEW Capital Management, L.P., a Boston-based real
estate investment firm. Boykin has a 25% ownership interest in
the joint venture. In the same year, the Boykin/ AEW venture
formed and acquired a 75% ownership interest in Boykin Chicago,
LLC, which purchased a hotel in downtown Chicago. In 2000,
Boykin purchased the remaining 25% ownership interest in Boykin
Chicago, LLC from a private investor for $6.3 million, thereby
increasing Boykins total ownership percentage in the hotel
to 43.75%.

In July 2001, Boykin formed a joint venture
with Concord Hospitality Enterprises (Concord), a
privately owned hotel investment and management company based in
Cleveland, Ohio. Boykin has a 50% ownership interest in the
joint venture, which acquired a full-service hotel in Lyndhurst,
New Jersey.

Because of the non-controlling nature of
Boykins ownership interests in these joint ventures,
Boykin accounts for these investments using the equity method.
Refer to Note 8 for further discussions of the aforementioned
joint venture with AEW.

Boykins carrying value of its investments
in these joint ventures differs from its share of the
partnership equity reported in the balance sheets of the
unconsolidated joint ventures due to Boykins cost of its
investment in excess of the historical net book values related
to the direct investment in Boykin Chicago, LLC. Boykins
additional basis is allocated to depreciable assets and is
recognized on a straight line basis over 30 years.

F-9



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





The following table sets forth the total assets,
liabilities, revenues and net income (loss), including
Boykins share, related to the unconsolidated joint
ventures discussed above as of December 31, 2002 and 2001
and for each of the three years in the period ended
December 31, 2002:

|                                                     |  |              |        |                |  |      |        |      |  |      |       |      |  |   |        |   |  |   |        |   |  |  |  | 
|---------------------------------------------------- |  | ------------ | ------ | -------------- |  | ---- | ------ | ---- |  | ---- | ----- | ---- |  | - | ------ | - |  | - | ------ | - |  |  |  | 
|                                                     |  |              |        |               
|                                                     |  | Boykin/AEW   |        | Boykin/Concord
|                                                     |  | December 31, |        | December 31,  
|                                                     |  |              |        |               
|                                                     |  | 2002         |        | 2001           |  | 2000 |        | 2002 |  | 2001 |       | 2000
|                                                     |  |              |        |                |  |      |        |      |  |      |       |     
|Total assets                                         |  | $            | 70,058 |                |  | $    | 57,556 |      |  |      |       |      |  | $ | 23,762 |   |  | $ | 21,463 |   |  |  |  | 
|Total liabilities                                    |  |              | 39,941 |                |  |      | 33,012 |      |  |      |       |      |  |   | 17,494 |   |  |   | 14,748 |   |  |  |  | 
|Equity                                               |  |              | 30,117 |                |  |      | 24,544 |      |  |      |       |      |  |   | 6,268  |   |  |   | 6,715  |   |  |  |  | 
|                                                    
|Boykins share of equity                             |  |              | 12,992 |                |  |      | 10,547 |      |  |      |       |      |  |   | 3,134  |   |  |   | 3,358  |   |  |  |  | 
|Boykins additional basis in Boykin
    Chicago, LLC |  |              | 1,030  |                |  |      | 1,068  |      |  |      |       |      |  |   |        |   |  |   |        |   |  |  |  | 
|                                                     |  |              |        |                |  |      |        |      |  |      |       |      |  |   |        |   |  |   |        |   |  |  |  | 
|Investment in unconsolidated joint venture           |  | $            | 14,022 |                |  | $    | 11,615 |      |  |      |       |      |  | $ | 3,134  |   |  | $ | 3,358  |   |  |  |  | 
|                                                     |  |              |        |                |  |      |        |      |  |      |       |      |  |   |        |   |  |   |        |   |  |  |  | 
|Revenues                                             |  | $            | 10,056 |                |  | $    | 11,066 |      |  | $    | 7,004 |      |  | $ | 5,531  |   |  | $ | 1,513  |   |  |  |  | 
|Net income (loss)                                    |  |              | (4,169 | )              |  |      | 1,645  |      |  |      | 57    |      |  |   | (448   | ) |  |   | (285   | ) |  |  |  | 
|Boykins share of net income (loss)                  |  |              | (1,816 | )              |  |      | 731    |      |  |      | 68    |      |  |   | (224   | ) |  |   | (142   | ) |  |  |  | 



|   |                                                
|-- | -----------------------------------------------
|2. | Summary of Significant Accounting
    Policies:



| |                      
| | ---------------------
| | Basis of Presentation

The separate financial statements of Boykin, the
Partnership, Bellboy, Hunt Valley and the consolidated joint
ventures discussed above are consolidated because Boykin
exercises unilateral control over these entities. All
significant intercompany transactions and balances have been
eliminated.



| |                               
| | ------------------------------
| | Investment in Hotel Properties

Hotel properties are stated at cost, net of any
impairment charges, and are depreciated using the straight-line
method over estimated useful lives ranging from 10 to
35 years for buildings and improvements and three to 20
years for furniture and equipment.

Investment in hotel properties as of
December 31, 2002 and 2001 consisted of the following:

|                                |  |      |          |      |  |   |          |  
|------------------------------- |  | ---- | -------- | ---- |  | - | -------- | -
|                                |  | 2002 |          | 2001
|                                |  |      |          |     
|Land                            |  | $    | 54,245   |      |  | $ | 55,145   |  
|Buildings and improvements      |  |      | 494,222  |      |  |   | 496,203  |  
|Furniture and equipment         |  |      | 78,322   |      |  |   | 76,268   |  
|Construction in progress        |  |      | 3,883    |      |  |   | 1,587    |  
|                                |  |      |          |      |  |   |          |  
|                                |  |      | 630,672  |      |  |   | 629,203  |  
|Less  Accumulated depreciation |  |      | (135,596 | )    |  |   | (108,719 | )
|                                |  |      |          |      |  |   |          |  
|                                |  | $    | 495,076  |      |  | $ | 520,484  |  
|                                |  |      |          |      |  |   |          |  

Boykin reviews the hotel properties for
impairment whenever events or changes in circumstances indicate
the carrying value of the hotel properties may not be
recoverable. Events or circumstances that may cause a review
include, but are not limited to, adverse changes in the demand
for lodging at the properties due to declining national or local
economic conditions and/or new hotel construction in markets
where the hotels are located. When such conditions exist,
management performs an analysis to determine if the estimated
undiscounted future cash flows from operations and the proceeds
from the ultimate disposition of a hotel property

F-10



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





exceed its carrying value. If the estimated
undiscounted future cash flows are less than the carrying amount
of the asset, an adjustment to reduce the carrying amount to the
related hotel propertys estimated fair market value is
recorded and an impairment loss recognized.


In 2001 and 2000, management identified changes
in circumstances which indicated the carrying value of certain
properties were impaired, and accordingly recorded charges of
$24,000 and $7,000, respectively. Boykin does not believe that
there are any factors or circumstances indicating impairment of
any other investments in hotel properties at this time.

Fair market values of hotel properties are
estimated through a discounted cash flow analysis taking into
account each propertys expected cash flow generated from
operations, holding period and ultimate proceeds from
disposition. In projecting the expected cash flows from
operations of the asset, the estimates are based on future
projected earnings before interest expense, income taxes,
depreciation and amortization, or EBITDA, and deduct expected
capital expenditure requirements. Growth assumptions are applied
to project these amounts over the expected holding period of the
asset. The growth assumptions are based on estimated
inflationary increases in room rates and expenses and the demand
for lodging at the properties, as impacted by local and national
economic conditions and estimated or known future new hotel
supply. The estimated proceeds from disposition are judgmentally
determined based on a combination of anticipated cash flow in
the year of disposition, cap rate, ratio of selling price to
gross hotel revenues and selling price per room.

If actual conditions differ from the assumptions,
the actual results of each assets future operations and
fair market value could be significantly different from the
estimated results and value used in the analysis.

There were no properties held for sale as of
December 31, 2002 and 2001, as defined within the
provisions of Statement of Financial Accounting Standards
(SFAS) No. 144 Accounting for the
Impairment or Disposal of Long-Lived Assets.



| |                          
| | -------------------------
| | Cash and Cash Equivalents

Cash and cash equivalents are defined as cash on
hand and in banks plus short-term investments with an original
maturity of three months or less.



| |                
| | ---------------
| | Restricted Cash

Restricted cash consists of cash held in escrow
reserves under the terms of the term notes payable discussed in
Note 5 and deposits on the White Sand Villas condominium sales
as discussed further below. The escrow reserves relate to the
payment of capital expenditures, insurance and real estate taxes.



| |                    
| | -------------------
| | Accounts Receivable

Accounts receivable, consisting primarily of
hotel guest receivables, is stated at fair value. The related
allowance for doubtful accounts assumed with the TRS transaction
effective January 1, 2002 (Note 1) totaled $243. Bad debt
expense and accounts receivable write-offs for the year ended
December 31, 2002 were $768 and $590, respectively.



| |            
| | -----------
| | Inventories

Inventories consisting primarily of food and
beverages and gift store merchandise are stated at the lower of
first-in, first-out cost or market.

F-11



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued







| |                                            
| | -------------------------------------------
| | Deferred Financing Costs and Other,
    net

Included in deferred financing costs and other at
December 31, 2002 and 2001 were the following:

|                         |  |      |        |      |  |   |        |  
|------------------------ |  | ---- | ------ | ---- |  | - | ------ | -
|                         |  | 2002 |        | 2001
|                         |  |      |        |     
|Financing costs          |  | $    | 7,239  |      |  | $ | 6,401  |  
|Franchise fees           |  |      | 611    |      |  |   | 618    |  
|                         |  |      |        |      |  |   |        |  
|                         |  |      | 7,850  |      |  |   | 7,019  |  
|Accumulated amortization |  |      | (4,703 | )    |  |   | (2,431 | )
|                         |  |      |        |      |  |   |        |  
|                         |  | $    | 3,147  |      |  | $ | 4,588  |  
|                         |  |      |        |      |  |   |        |  

Deferred financing costs are being amortized
using the straight-line method over the terms of the related
financing agreements, including extension options where it is
the intent of management to exercise such options. Accumulated
amortization at December 31, 2002 and 2001 was $4,449 and
$2,259, respectively.

Deferred franchise fees are being amortized on a
straight-line basis over the terms of the related franchise
agreements. Accumulated amortization at December 31, 2002
and 2001 was $254 and $172, respectively.



| |          
| | ---------
| | Dividends

Boykin pays dividends on common shares which are
dependent upon the receipt of distributions from the Partnership
and are based upon the discretion of Boykins Board of
Directors.

Dividends on the preferred shares (Note 6) are
cumulative from the date of issue at the rate of 10  1/2%
of the liquidation preference per year and are payable quarterly
in arrears based upon authorization of the Board of Directors.
Dividends will accrue whether or not Boykin has earnings,
whether or not there are funds legally available for the payment
of such dividends and whether or not such dividends are declared.



| |                    
| | -------------------
| | Revenue Recognition



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Hotel revenues Hotel revenues
    including room, food, beverage and other hotel revenues are
    recognized as the related services are delivered. Ongoing credit
    evaluations are performed and an allowance for potential credit
    losses is provided against the portion of accounts receivable
    that is estimated to be uncollectible.                                                                                                                                                                                                                                                                                                                                                                    
|
| | Lease revenue Boykin
    recognizes lease revenue for interim and annual reporting
    purposes on an accrual basis pursuant to the terms of the
    respective percentage leases once all terms have been satisfied
    and certain thresholds have been met. Boykin recognizes the
    revenue in accordance with Securities and Exchange Commission
    (SEC) Staff Accounting Bulletin (SAB)
    No. 101 Revenue Recognition in Financial
    Statements. The adoption of SAB No. 101 impacts the
    interim reporting of revenues related to Boykins leases
    for properties not operated under the TRS structure, but has no
    impact on its interim cash flow or year-end results of
    operations.



| |                  
| | -----------------
| | Condominium Units

During 2001, Boykin completed a $2,700 renovation
of a 60-unit tower at the Pink Shell Beach Resort in Ft. Myers
Beach, Florida. These renovated studio units are being sold as
Sanibel View Villas Condominiums, with the expectation that the
unit owners will make their units available by contract for
rental as hotel rooms. The revenue related to the sale of the
units is recorded upon closing of the sale. Through
December 31, 2002, 40 of these units have sold, generating
revenues in excess of the renovation cost of the entire project.
Cost of sales of condominium units in 2002 includes $482 related
to commissions on the sales and $99 related to real estate taxes.

F-12



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





Unsold units are being used for rental as hotel
rooms. The depreciated cost basis of the unsold units as of
December 31, 2002 of $2,895 is reflected in the
consolidated balance sheets as other assets.


As of December 31, 2002, all of the Sanibel
View unit owners have contracted with the resort to allow their
unused room nights to be rented out as hotel rooms. The related
gross rental income generated by these units is recorded by the
resort and included in hotel revenues within the consolidated
financial statements. Under the terms of the contract, a
percentage of the gross rental income of each unit is to be
remitted to the respective unit owner. For the year ended
December 31, 2002, $1,599 was remitted to third party unit
owners and is included within property taxes, insurance and
other in the consolidated financial statements.

During 2002, Boykin also began construction of a
new 92-unit tower at the Pink Shell Beach Resort. In order to
prepare the site for construction of the tower, Boykin paid for
the removal of 38 cottages. Depreciation of the cottages was
accelerated through the period of disposal resulting in an
additional $1.7 million charge, in accordance with the
provisions of SFAS No. 144 as they relate to asset abandonment.
The costs of removing the cottages and preparing the site for
construction of the new building have been capitalized to the
extent that total expected costs do not exceed the expected net
realizable value for the project.

Deposits received for the purchase of units in
the 92-unit tower are currently reflected in restricted cash
with an offsetting liability. Revenue will be recorded on the
sale of the units under the percentage of completion method of
accounting after the project meets certain required criteria.
The project has a scheduled completion date during the fourth
quarter of 2003.



| |                   
| | ------------------
| | Minority Interests

Minority interest in the Partnership represents
the limited partners proportionate share of the equity in
the Partnership. Income is allocated to minority interest based
on the weighted average limited partnership percentage ownership
throughout the period.

Minority interest in joint ventures represents
the joint venture partners proportionate share of the
equity in the joint ventures. Income and losses are allocated to
minority interest based on the joint venture partners
percentage ownership throughout the period, subject to minimum
returns to the Partnership, as defined in the joint venture
agreements.



| |             
| | ------------
| | Income Taxes

Boykin qualifies as a REIT under
Sections 856-860 of the Internal Revenue Code. As a REIT,
Boykin generally will not be subject to federal corporate income
tax on that portion of its net income that relates to non-TRS
subsidiaries. Accordingly, no provision for income taxes has
been reflected in the accompanying consolidated financial
statements for the corporate level entities.

Upon the effective date of the establishment of
Boykins TRSs, Bellboy and Hunt Valley, the subsidiaries
became subject to federal and state income taxes. Boykins
TRSs account for income taxes in accordance with the provisions
of SFAS No. 109, Accounting for Income Taxes.
As of December 31, 2002, Boykins TRSs have a deferred
tax asset of approximately $1,400, prior to any valuation
allowance, related to the assumption of the retained deficit of
Westboy as well as the net operating losses of the TRSs and
their subsidiaries. Boykins TRSs have recorded a 100%
valuation allowance against this asset due to the uncertainty of
realization of the deferred tax asset and therefore, no
provision or benefit from income taxes is reflected in the
accompanying consolidated statements of operations. As of
December 31, 2002, the net operating loss carryforwards
have remaining lives of 19 to 20 years.

Boykins earnings and profits, as defined by
federal income tax law, will determine the taxability of
distributions to shareholders. Earnings and profits will differ
from income reported for financial reporting purposes primarily
due to the differences in the estimated useful lives and methods
used to compute depreciation

F-13



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





and differences in the timing of when certain
expenses are deductible for tax purposes. For federal income tax
purposes, dividends to shareholders applicable to 2002, 2001 and
2000 operating results represented the following allocations of
ordinary taxable income, return of capital, and 20% capital gain:


|     |      |                 |  |                   |      |                  |  |       |      |   |  |  |     |   |  |  |       |  
|---- | ---- | --------------- |  | ----------------- | ---- | ---------------- |  | ----- | ---- | - |  |  | --- | - |  |  | ----- | -
|     |      |                 |  |                   |      |                 
|     |      |                 |  | Common Shares     |      |                 
|     |      |                 |  |                   |      |                 
|Year |      | Ordinary Income |  | Return of Capital |      | 20% Capital Gain |  | Total
|     |      |                 |  |                   |      |                  |  |      
|     | 2002 |                 |  |                   | 90.8 | %                |  |       |     |   |  |  | 9.2 | % |  |  | 100.0 | %
|     | 2001 |                 |  |                   | 49.1 | %                |  |       | 50.9 | % |  |  |    |   |  |  | 100.0 | %
|     | 2000 |                 |  |                   | 75.6 | %                |  |       | 24.4 | % |  |  |    |   |  |  | 100.0 | %

|     |      |                 |  |                   |      |                  |  |       |   |  |  |  |     |   |  |  |       |  
|---- | ---- | --------------- |  | ----------------- | ---- | ---------------- |  | ----- | - |  |  |  | --- | - |  |  | ----- | -
|     |      |                 |  |                   |      |                 
|     |      |                 |  | Preferred Shares  |      |                 
|     |      |                 |  |                   |      |                 
|Year |      | Ordinary Income |  | Return of Capital |      | 20% Capital Gain |  | Total
|     |      |                 |  |                   |      |                  |  |      
|     | 2002 |                 |  |                   | 90.8 | %                |  |       |  |  |  |  | 9.2 | % |  |  | 100.0 | %



| |                   
| | ------------------
| | Earnings Per Share

Boykins basic and diluted earnings per
share for the years ended 2002, 2001 and 2000 are computed under
the provisions of SFAS No. 128, Earnings per
Share.

Basic earnings per share is based on the weighted
average number of common shares outstanding during the period
whereas diluted earnings per share adjusts the weighted average
shares outstanding for the effect of all dilutive securities.
The weighted average number of shares used in determining basic
earnings per share was 17,248,000, 17,176,000 and 17,137,000 for
the years ended December 31, 2002, 2001 and 2000,
respectively. For 2002, 2001 and 2000, diluted per share amounts
reflect incremental common shares outstanding of 135,000,
105,000 and 168,000, respectively, related to unexercised share
options and unvested restricted share grants as of
December 31, 2002, 2001 and 2000, respectively. There are
no adjustments to the reported amounts of income in computing
diluted per share amounts.



| |                                          
| | -----------------------------------------
| | Partnership Units/ Minority
    Interests

A total of 2,718,256 and 1,291,114 limited
partnership units (Note 7) were issued and outstanding at
December 31, 2002 and 2001, respectively. The weighted
average number of limited partnership units outstanding for each
of the periods ended December 31, 2002 and 2001 was
2,718,256 and 1,291,114, respectively.

Effective January 1, 2002, an additional
1,427,142 limited partnership units were issued as consideration
for the acquisition of leasehold interests in conjunction with
the TRS transactions discussed in Note 1.



| |                                    
| | -----------------------------------
| | Fair Value of Financial Instruments

Fair values are determined by using available
market information and appropriate valuation methodologies.
Boykins principal financial instruments are cash, cash
equivalents, restricted cash, accounts receivable, borrowings
against the credit facility, the term notes payable and interest
rate protection instruments.

Cash, cash equivalents, restricted cash and
accounts receivable, due to their short maturities, are carried
at amounts which reasonably approximate fair value. As
borrowings against the credit facility (Note 4), and the $45,000
term note payable (Note 5) bear interest at variable market
rates, carrying value approximates market value at
December 31, 2002.

At December 31, 2002, the fair value of the
$130,000 term note payable (Note 5) approximates carrying value
as the interest rate associated with the note approximates
market rates currently offered for debt with similar terms and
maturities.

F-14



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





Effective January 1, 2001, Boykin adopted
the provisions of SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. This
statement requires companies to carry all derivative
instruments, including embedded derivatives, in the balance
sheet at fair value. The accounting for changes in the fair
value of a derivative instrument depends on whether it has been
designated and qualifies as part of a hedging relationship and,
if so, on the reason for holding it. For financial reporting
purposes, the change in market value of the effective portion of
an instrument defined as a cash flow hedge flows through the
other comprehensive income component of equity. All other
changes will flow through earnings.

The adoption of SFAS No. 133 resulted in
Boykin recording an unrealized loss of $373, net of minority
interest of $32, related to its existing interest rate cap,
which is reflected as a cumulative effect of a change in
accounting principle in Boykins 2001 statement of
operations. The interest rate cap is with a third party and had
no value at December 31, 2002 based upon estimated market
valuations. Changes in the fair value of the interest rate cap
are recorded through the statement of operations.

In March 2001, Boykin entered into an
interest rate swap, which fixes the overall interest rate at
7.32% on $83,000 of Boykins $108,000 term note until
July 2003. The estimated fair market value of the swap as
of December 31, 2002 is reflected as other comprehensive
loss of $1,773 in shareholders equity, with a
corresponding liability in the accompanying consolidated balance
sheet. In connection with the execution of this swap contract,
Boykin wrote an option contract (reverse cap contract) until
July 2003 with a notional balance of $83,000 and a LIBOR
based strike price of 7.90%, obligating Boykin as the floating
rate counterparty. This contract is with a third party and had
no value at December 31, 2002. Changes in the
contracts fair value are recorded through the statement of
operations.



| |                     
| | --------------------
| | Comprehensive Income

Comprehensive income is defined as changes in
shareholders equity from non-owner sources, which for
Boykin consists of the difference between the cost basis and
fair market value of its interest rate swap. For the year ended
December 31, 2002 and 2001, the difference between net
income (loss) and comprehensive income (loss) was due
to the change in the market value of the swap.



| |                              
| | -----------------------------
| | New Accounting Pronouncements

In August 2001, the Financial Accounting
Standards Board (FASB) issued SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived
Assets. The provisions of Statement 144 are effective for
Boykin beginning in the fiscal year ending December 31,
2002. SFAS No. 144 supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of. SFAS No. 144
also requires that one accounting model be used for long-lived
assets to be disposed of by sale. The Statement did not have a
material effect on the financial condition or results of
operations of Boykin for 2002; however, as Boykin disposed of
hotel properties via sale in 2003, the properties results
of operations will be retroactively disclosed separately as
discontinued operations in Boykins financial statements
going forward.

In April 2002, the FASB issued SFAS
No. 145, Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections. Included in SFAS No. 145 is a
requirement that all gains and losses related to extinguishments
of debt (other than extinguishments of debt items meeting the
criteria in APB Opinion No. 30, Reporting the Results
of OperationsReporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions (APB
Opinion 30)) not be treated as extraordinary items. The
provisions of this statement are effective for Boykin on
January 1, 2003. Any gains or losses on extinguishments of
debt formerly classified as extraordinary and not meeting the
criteria for extraordinary classification as defined in APB
Opinion 30 shall be reclassified. The Statement is not expected
to have a material effect on the financial condition or results
of operations of Boykin.

F-15



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





In November 2002, the FASB issued
Interpretation No. 45, Guarantors Accounting
and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, which addresses the
disclosure to be made by a guarantor in its interim and annual
financial statements about its obligations under guarantees.
Interpretation No. 45 also requires the recognition of a
liability by a guarantor at the inception of certain guarantees.
Interpretation No. 45 requires the guarantor to recognize a
liability for the non-contingent component of the guarantee,
this is the obligation to stand ready to perform in the event
that specified triggering events or conditions occur. The
initial measurement of this liability is the fair value of the
guarantee at inception. The recognition of the liability is
required even if it is not probable that payments will be
required under the guarantee or if the guarantee was issued with
a premium payment or as part of a transaction with multiple
elements. The Company has adopted the disclosure requirements of
Interpretation No. 45 and will apply the recognition and
measurement provisions for all guarantees entered into or
modified after December 31, 2002. To date the Company has
not entered into guarantees.

In December 2002, the FASB issued Statement
No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure  an amendment of
FASB Statement No. 123. Statement No. 148 amends
FASB Statement No. 123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition
for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition,
Statement No. 148 amends the disclosure requirements of
Statement No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect
of the method used on reported results. In addition, to address
concerns raised by some constituents about the lack of
comparability caused by multiple transition methods, Statement
No. 148 does not permit the use of the Statement
No. 123 prospective method of transition for changes to the
fair value based method made in fiscal years beginning after
December 15, 2003. Adoption is not expected to have a
material effect on the financial condition or results of
operations of Boykin.

At December 31, 2002, Boykin has a Long-Term
Incentive Plan, which is described more fully in Note 11. Boykin
has adopted the disclosure only provisions of SFAS No. 123,
Accounting for Stock-Based Compensation, and applies
Accounting Principles Board Opinion No. 25 and related
interpretations in accounting for its employee share option
plan. If Boykin had elected to recognize compensation costs for
the LTIP based on the fair value at the grant dates for option
awards consistent with the method prescribed by SFAS
No. 123, reported amounts of net income (loss) and
earnings (loss) per share would have been changed to the
pro forma amounts indicated below.

|                                                        |         |                   |        |                   |   |                   |         |       |   |   |       |      | 
|------------------------------------------------------- | ------- | ----------------- | ------ | ----------------- | - | ----------------- | ------- | ----- | - | - | ----- | ---- | 
|                                                        |         |                  
|                                                        |         | Year Ended       
|                                                        |         |                  
|                                                        |         | December 31, 2002 |        | December 31, 2001 |   | December 31, 2000
|                                                        |         |                   |        |                   |   |                  
|                                                        |         | Pro Forma         |        | Pro Forma         |   | Pro Forma        
|                                                        |         |                   |        |                   |   |                  
|Net income (loss) applicable to
    common shareholders |         | $                 | (1,480 | )                 |   | $                 | (29,570 | )     |   | $ | 7,730 |     
|Stock-based employee compensation expense               |         |                   | (151   | )                 |   |                   | (151    | )     |   |   | (241  | )   
|                                                        |         |                   |        |                   |   |                   |         |       |   |   |       |     
|Proforma net income (loss)                              |         |                   | (1,631 | )                 |   |                   | (29,721 | )     |   |   | 7,489 |     
|Proforma net income (loss) per common share:            |         |                   |        |                   |   |                   |         |       |   |   |       |     
|                                                        | Basic   |                   | $      | (0.09             | ) |                   | $       | (1.73 | ) |   | $     | 0.44 | 
|                                                        | Diluted |                   | $      | (0.09             | ) |                   | $       | (1.73 | ) |   | $     | 0.43 | 

In January 2003, the FASB issued
Interpretation No. 46, Consolidation of Variable
Interest Entities, which addresses consolidation by
business enterprises of variable interest entities. In general,
a variable interest entity is a corporation, partnership, trust,
or any other legal structure used for business purposes that
either (a) does not have equity investors with voting
rights or (b) has equity investors that do not provide
sufficient

F-16



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





financial resources for the entity to support its
activities. A variable interest entity often holds financial
assets, including loans or receivables, real estate or other
property. A variable interest entity may be essentially passive
or it may engage in research and development or other activities
on behalf of another company. The objective of Interpretation
No. 46 is not to restrict the use of variable interest
entities but to improve financial reporting by companies
involved with variable interest entities. Until now, a company
generally has included another entity in its consolidated
financial statements only if it controlled the entity through
voting interests. Interpretation No. 46 changes that by
requiring a variable interest entity to be consolidated by a
company if that company is subject to a majority of the risk of
loss from the variable interest entitys activities or is
entitled to receive a majority of the entitys residual
returns or both. The consolidation requirements of
Interpretation No. 46 apply immediately to variable
interest entities created after January 31, 2003. The
consolidation requirements apply to older entities in the first
fiscal year or interim period beginning after June 15,
2003. Certain of the disclosure requirements apply in all
financial statements issued after January 31, 2003,
regardless of when the variable interest entity was established.
Adoption is not expected to have a material effect on the
financial condition or results of operations of Boykin.




| |                 
| | ----------------
| | Use of Estimates

The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual
results could differ from those estimates.



| |                  
| | -----------------
| | Reclassifications

Certain reclassifications have been made to the
prior year financial statements to conform with the current year
presentation.



|   |                    
|-- | -------------------
|3. | Hotel Transactions:

The following table summarizes Boykins
hotel acquisitions and dispositions in 2002, 2001 and 2000:

|                              |  |          |                   |                  |  |                 |                |            |  |                     |     |          |  |   |        |  |  |  |     |   |  |  |         | 
|----------------------------- |  | -------- | ----------------- | ---------------- |  | --------------- | -------------- | ---------- |  | ------------------- | --- | -------- |  | - | ------ |  |  |  | --- | - |  |  | ------- | 
|                              |  |          |                   | Acquisition/     |  |                 |                | Purchase/  |  | Percentage owned by |     |         
|Hotel                         |  | Location |                   | Disposition Date |  | Number of Rooms |                | Sale Price |  | Partnership         |     | Operator
|                              |  |          |                   |                  |  |                 |                |            |  |                     |     |         
|Property Exchange:            |  |          |                   |                  |  |                 |                |            |  |                     |     |          |  |   |        |  |  |  |     |   |  |  |         | 
|Acquisitions:                 |  |          |                   |                  |  |                 |                |            |  |                     |     |          |  |   |        |  |  |  |     |   |  |  |         | 
|Doubletree Hotel San Antonio  |  |          | San Antonio, TX   |                  |  |                 | September 2000 |            |  |                     | 290 |          |  |   | N/A    |  |  |  | 100 | % |  |  | BMC     | 
|Doubletree Hotel Guest Suites |  |          | Southfield, MI    |                  |  |                 | September 2000 |            |  |                     | 239 |          |  |   | N/A    |  |  |  | 100 | % |  |  | BMC     | 
|                             
|Disposition:                  |  |          |                   |                  |  |                 |                |            |  |                     |     |          |  |   |        |  |  |  |     |   |  |  |         | 
|Cleveland Marriott East       |  |          | Cleveland, OH     |                  |  |                 | September 2000 |            |  |                     | 403 |          |  |   | N/A    |  |  |  | 100 | % |  |  | BMC     | 
|                             
|Acquisition:                  |  |          |                   |                  |  |                 |                |            |  |                     |     |          |  |   |        |  |  |  |     |   |  |  |         | 
|Novotel Meadowlands*          |  |          | Lyndhurst, NJ     |                  |  |                 | July 2001      |            |  |                     | 219 | *        |  | $ | 17,500 |  |  |  | 50  | % |  |  | Concord | 
|                             
|Disposition:                  |  |          |                   |                  |  |                 |                |            |  |                     |     |          |  |   |        |  |  |  |     |   |  |  |         | 
|Daytona Beach Radisson Resort |  |          | Daytona Beach, FL |                  |  |                 | January 2001   |            |  |                     | 206 |          |  | $ | 12,500 |  |  |  | 100 | % |  |  | BMC     | 



---



|  |                                                                                                                                                                               
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | In February 2002, a renovation of this hotel
    was completed resulting in eight additional rooms at the
    property and the hotel was rebranded as a Courtyard by Marriott.

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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





In September 2000, Boykin transferred
ownership of its Cleveland Marriott East in Beachwood, Ohio, to
Hilton. In exchange, Boykin obtained from Hilton a 239-suite
Doubletree Guest Suites hotel in Southfield, Michigan (rebranded
as an Embassy Suites in October 2001) and a 290-room
Doubletree hotel in San Antonio, Texas. The transaction was
accounted for as a like-kind exchange of similar assets with the
net book value of the Beachwood hotel being carried forward and
allocated as the cost basis of the Southfield and San Antonio
hotels with no gain or loss recognized.

The remaining acquisition was accounted for using
the purchase method. The operating results of the acquired
property are included in the consolidated operating results of
Boykin as equity in income (loss) of unconsolidated joint
ventures since the hotel was acquired through an unconsolidated
joint venture.



|   |                 
|-- | ----------------
|4. | Credit Facility:

During March 2002, Boykin negotiated new
terms to its secured credit facility which enables Boykin to
borrow up to $65,000, subject to borrowing base and
loan-to-value limitations, at a rate that fluctuates at LIBOR
plus 2.25% to LIBOR plus 4.00%, as defined. Boykin is required
to pay a .25% fee on the unused portion of the credit facility.
The facility expires on July 11, 2003. Management intends
to refinance the obligation upon maturity.

The credit facility was secured by seven hotel
properties with a net carrying value of $94,334 at
December 31, 2002 and was secured by eight hotel properties
with a net carrying value of $117,016 at December 31, 2001.
Outstanding borrowings against the credit facility at
December 31, 2001 was $39,000. The net proceeds from the
October 2002 preferred stock offering (Note 6) were used to
repay the outstanding balance on the credit facility, therefore;
at December 31, 2002, there were no amounts outstanding.

The credit facility requires Boykin, among other
things, to maintain a minimum net worth, a coverage ratio of
EBITDA to debt service, a coverage ratio of EBITDA to debt
service and fixed charges and a maximum leverage ratio. Further,
Boykin is required to maintain the franchise agreement at each
hotel and to maintain its REIT status. The terms of the
amendment provide certain restrictions on common share
dividends; however, Boykin is entitled to distribute 100% of
REIT taxable income. Boykin was in compliance with its covenants
at December 31, 2002.



|   |                    
|-- | -------------------
|5. | Term Notes Payable:

Red Lion Inns Operating L.P. (OLP), a
wholly-owned subsidiary of the Partnership, has a $130,000 term
loan agreement that expires in June 2023 and may be prepaid
without penalty after May 21, 2008. The outstanding balance
as of December 31, 2002 and 2001 was $124,860 and $126,971,
respectively. The loan bears interest at a fixed rate of 6.9%
until May 2008, and at a new fixed rate to be determined
thereafter. The loan was secured by ten Doubletree hotels with a
net carrying value of $226,698 and $230,812 at December 31,
2002 and 2001, respectively and requires principal repayments
based on a 25-year amortization schedule. Under covenants in the
loan agreement, assets of OLP are not available to pay the
creditors of any other Boykin entity, except to the extent of
permitted cash distributions from OLP to Boykin. Likewise, the
assets of other Boykin entities are not available to pay the
creditors of OLP. The loan agreement also requires OLP to hold
funds in escrow for the payment of capital expenditures,
insurance and real estate taxes. The term note also requires OLP
to maintain certain financial reporting requirements. OLP was in
compliance with these requirements at December 31, 2002 and
2001.

In March 2002, Boykin renegotiated the terms
of the $45,000 term loan agreement which had an original
maturity date of October 2002 with an option to extend to
July 2003. Boykin exercised its option to extend the
maturity date and the loan will now mature in July 2003.
Management intends to refinance the obligation upon maturity.
The loan was secured by three hotel properties with a net
carrying value of $43,150 and $44,582 at December 31, 2002
and 2001, respectively and bears interest at a rate that
fluctuates at LIBOR plus 2.0% to

F-18



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





LIBOR plus 4.0% (4.88% at December 31,
2002). The loan agreement requires Boykin, among other things,
to maintain a minimum net worth, a coverage ratio of EBITDA to
debt service and fixed charges, and to maintain a leverage ratio
below a specified level. Boykin is required to maintain the
franchise agreement at each hotel and to maintain its REIT
status. In conjunction with the preferred stock offering in
October 2002 (Note 6), Boykin used a portion the net
proceeds to reduce the loan balance by $3,033, therefore at
December 31, 2002, the outstanding balance was $41,967.
Boykin was in compliance with its covenants at December 31,
2002.


Boykin Holding, LLC (BHC), a
wholly-owned subsidiary of the Partnership, has a $108,000 term
loan agreement. The loan matures in July 2003 and contains
two one-year extension options. The loan was secured by nine
hotel properties with a net carrying value of $74,136 and
$76,477 at December 31, 2002 and 2001, respectively and
bears interest at a rate that fluctuates at LIBOR plus 2.35%
(3.73% at December 31, 2002). Under covenants in the loan
agreement, assets of BHC are not available to pay the creditors
of any other Boykin entity, except to the extent of permitted
cash distributions from BHC to Boykin. Likewise, the assets of
other entities are not available to pay the creditors of BHC.
The loan agreement also requires BHC to hold funds in escrow for
the payment of capital expenditures, insurance and real estate
taxes and requires BHC to maintain certain financial reporting
requirements. BHC was in compliance with these requirements at
December 31, 2002 and 2001.

In March 2001, the Partnership entered into
an interest rate swap, which fixes the overall interest rate at
7.32% on $83,000 of debt designated to BHCs $108,000 term
note until July 2003. BHC also has interest rate protection
on the remaining $25,000 to cap the overall loan interest rate
at no more than 10.25%.

As a part of normal business activities, Boykin
issues letters of credit through major banking institutions as
required by certain debt and insurance agreements. As of
December 31, 2002, letters of credit outstanding totaled
$2,116. As of December 31, 2002, Boykin has not entered
into any significant other off-balance sheet financing
arrangements.

Maturities of long-term debt at December 31,
2002 were as follows:

|                    |  |   |         | 
|------------------- |  | - | ------- | 
|2003                |  | $ | 152,231 | 
|2004                |  |   | 2,402   | 
|2005                |  |   | 2,601   | 
|2006                |  |   | 2,788   | 
|2007                |  |   | 2,990   | 
|2008 and thereafter |  |   | 111,815 | 
|                    |  |   |         | 
|                    |  | $ | 274,827 | 
|                    |  |   |         | 



|   |                               
|-- | ------------------------------
|6. | Description of Capital Shares:

Common
Shares

Holders of Boykins common shares are
entitled to receive dividends, as and if declared by the Board
of Directors, out of funds legally available therefore. The
holders of common shares, upon any liquidation, dissolution or
winding-up of Boykin, are entitled to share ratably in any
assets remaining after payment in full of all liabilities of
Boykin and all preferences of the holders of any outstanding
preferred shares. The common shares possess ordinary voting
rights, each share entitling the holder thereof to one vote.
Holders of common shares do not have cumulative voting rights in
the election of directors and do not have preemptive rights.

Preferred
Shares

The Board of Directors is authorized to provide
for the issuance of two classes of preferred shares, each in one
or more series, to establish the number of shares in each series
and to fix the designation, powers, preferences

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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





and rights (other than voting rights) of each
series and the qualifications, limitations or restrictions
thereon. Because the Board of Directors has the power to
establish the preferences and rights of each series of preferred
shares, the Board of Directors may afford the holders of any
series of preferred shares preferences, powers and rights senior
to the rights of holders of common shares. The issuance of
preferred shares could have the effect of delaying or preventing
a change in control of Boykin. As a result of the preferred
offering in October as discussed below, there were 181,000
preferred shares issued and outstanding at December 31,
2002. No preferred shares had been issued or were outstanding as
of December 31, 2001.


In October 2002, Boykin completed an
underwritten public offering of 1,800,000 preferred depositary
shares. Each depositary share represents a 1/10 interest in one
share of Boykins 10  1/2% Class A Cumulative
Preferred Shares, Series 2002-A, and has a liquidation
preference of $25 per share. Dividends on the depositary shares
are payable quarterly, upon authorization by the Board of
Directors, beginning on January 15, 2003 at an annual rate
of $2.625 per depositary share and are senior to the common
shares. The shares are listed and traded on the New York Stock
Exchange. The shares do not have a stated maturity and are not
subject to any sinking fund or mandatory redemption provisions.
Net proceeds from the offering were used to repay the
outstanding balance on the $65,000 credit facility (Note 4) and
pay down $3,033 on the $45,000 term note (Note 5). An additional
10,000 depositary shares were later issued to cover
over-allotments. The Company owns a corresponding Series A
Preferred equity interest in the Partnership that entitles the
Company to income and distributions in amounts equal to the
dividends payable on the Companys Series A Preferred
shares.

7. Limited Partnership
Interests:

Pursuant to the Partnership Agreement, the
minority interest limited partners of the Partnership have
exchange rights which enable them to cause the Partnership to
pay cash for their interests in the Partnership, or at
Boykins election, to exchange common shares for such
interests. The exchange rights may be exercised in whole or in
part. The number of common shares issuable to the limited
partners upon exercise of the exchange rights as of
December 31, 2001 was 1,291,114. Effective January 1,
2002, in conjunction with the TRS transactions discussed in Note
1, an additional 1,427,142 limited partnership units were issued
as consideration for the acquisition of leasehold interests in
the hotels. As such, as of December 31, 2002, there were
2,718,256 minority interest limited partnership units
outstanding. The number of shares issuable upon exercise of the
exchange rights will be adjusted upon the occurrence of stock
splits, mergers, consolidations or similar pro rata share
transactions, which otherwise would have the effect of diluting
the ownership interests of the limited partners or the
shareholders of Boykin.



|   |                        
|-- | -----------------------
|8. | Joint Venture with AEW:

In February 1999, Boykin formed a joint
venture with AEW. Pursuant to the joint venture agreement, AEW
has contributed $21,215 of equity capital into the joint
venture. Boykin has contributed $7,072, has served as the
operating partner of the joint venture for which it receives
compensation from the joint venture, and has the right to
receive incentive returns based on the performance of acquired
assets. Because of the non-controlling nature of its ownership
interest in the joint venture, Boykin accounts for its
investment utilizing the equity method.

AEW has the option to acquire convertible
preferred shares in exchange for its capital invested in the
joint venture. If issued, the preferred shares would be
convertible into common shares at $16.48 per common share and
would have a minimum cumulative annual dividend equivalent to
$1.88 per common share. As of December 31, 2002, AEW had
the option to acquire preferred shares convertible into
1,287,304 common shares.

In August 1999, the Boykin/ AEW venture
partnered with a private investor, forming Boykin Chicago, LLC,
in which Boykin/ AEW has a 75% interest. Boykin Chicago, LLC
purchased Hotel 71, located in Chicago, Illinois for cash
consideration of $48,000. The acquisition was accounted for as a
purchase and was funded with proceeds from a $30,000 secured
mortgage note with the remainder in cash from the partners. In
September 2000, Boykin purchased the 25% interest in Boykin
Chicago, LLC from the private investor for $6,270, thereby
increasing

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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





Boykins total ownership interest in the
hotel from 18.75% to 43.75%. A subsidiary of BMC leased the
property pursuant to a long-term percentage lease agreement,
which was terminated on June 30, 2001. Subsequently, a TRS
of Boykin Chicago, LLC entered into a management agreement with
the subsidiary of BMC to manage the property.




|   |                     
|-- | --------------------
|9. | Extraordinary Items:

In connection with obtaining the secured credit
facility (Note 4) and the $108,000 secured term loan (Note 5) in
2000, Boykin wrote off existing unamortized deferred financing
costs under the previous $175,000 credit facility totaling $745.
These charges, net of $59 of minority interest, are reflected as
an extraordinary item in the accompanying consolidated statement
of operations for the year ended December 31, 2000.



|    |                             
|--- | ----------------------------
|10. | Percentage Lease Agreements:

Rent due under percentage leases is the greater
of minimum rent, as defined, or percentage rent. Percentage rent
applicable to room and other hotel revenues varies by lease and
is calculated by multiplying fixed percentages by the total
amounts of such revenues over specified threshold amounts. Both
the minimum rent and the revenue thresholds used in computing
percentage rents applicable to room and other hotel revenues are
subject to annual adjustments based on increases in the United
States Consumer Price Index (CPI). Percentage rent
applicable to food and beverage revenues is calculated by
multiplying fixed percentages by the total amounts of such
revenues. Percentage lease revenues were $4,730, $71,990 and
$85,854, respectively, for the years ended December 31,
2002, 2001 and 2000, of which approximately $1,082, $11,794 and
$24,882, respectively, was in excess of minimum rent.

The one percentage lease remaining for the
property not operated under the TRS structure (Note 1) has a
noncancelable remaining term of five years, subject to earlier
termination on the occurrence of certain contingencies, as
defined. Future minimum rentals (ignoring future CPI increases)
to be received by Boykin from this lease for each of the years
in the period 2003 to 2007 and in total thereafter are as
follows:

|                    |  |   |       | 
|------------------- |  | - | ----- | 
|2003                |  | $ | 1,347 | 
|2004                |  |   | 1,347 | 
|2005                |  |   | 1,347 | 
|2006                |  |   | 1,347 | 
|2007                |  |   | 1,148 | 
|2008 and thereafter |  |   | 0     | 
|                    |  |   |       | 
|                    |  | $ | 6,536 | 
|                    |  |   |       | 



|    |                          
|--- | -------------------------
|11. | Share Compensation Plans:

Boykin has a Long-Term Incentive Plan
(LTIP) which provides for the granting to officers and
eligible employees of incentive or nonqualified share options,
restricted shares, deferred shares, share purchase rights and
share appreciation rights in tandem with options, or any
combination thereof. Boykin has reserved 1,700,000 common shares
for issuance under the LTIP.

F-21



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





Share
Option Plan

The table below summarizes information related to
share option grant and exercise activity in 2002, 2001 and 2000.

|     |  |                    |         |                  |  |                 |        |           |  |                 |      |  |  |  |   |  |  |  |   | 
|---- |  | ------------------ | ------- | ---------------- |  | --------------- | ------ | --------- |  | --------------- | ---- |  |  |  | - |  |  |  | - | 
|     |  |                    |         |                  |  |                 |        |          
|     |  | Options Granted to |         |                  |  |                 |        |          
|     |  |                    |         | Weighted Average |  |                 |        |          
|     |  | Officers and       |         | Non-employee     |  | Fair Value of   |        | Options   |  | Exercised Price
|Year |  | Employees          |         | Directors        |  | Options Granted |        | Exercised |  | Per Share      
|     |  |                    |         |                  |  |                 |        |           |  |                
|2002 |  |                    | 353,000 |                  |  |                 |       |           |  | $               | 1.05 |  |  |  |  |  |  |  |  | 
|2001 |  |                    | 145,000 |                  |  |                 | 30,000 |           |  | $               | 0.66 |  |  |  |  |  |  |  |  | 
|2000 |  |                    | 143,000 |                  |  |                 | 6,000  |           |  | $               | 0.88 |  |  |  |  |  |  |  |  | 

As of December 31, 2002 and 2001,
information related to outstanding options was as follows:

|     |      |               |  |                     |         |                  |  |             |       |                    |  |  |           |  |  |  |         |  |  |   |       | 
|---- | ---- | ------------- |  | ------------------- | ------- | ---------------- |  | ----------- | ----- | ------------------ |  |  | --------- |  |  |  | ------- |  |  | - | ----- | 
|     |      |               |  |                    
|     |      | Total Options |  | Exercisable Options
|     |      |               |  |                    
|     |      |               |  | Weighted Average    |         | Weighted Average |  |             |       | Weighted Average  
|     |      | Options       |  | Per Share Exercise  |         | Remaining        |  | Options     |       | Per Share Exercise
|Year |      | Outstanding   |  | Price               |         | Contractual Life |  | Outstanding |       | Price             
|     |      |               |  |                     |         |                  |  |             |       |                   
|     | 2002 |               |  |                     | 839,139 |                  |  | $           | 11.24 |                    |  |  | 7.5 years |  |  |  | 422,405 |  |  | $ | 13.72 | 
|     | 2001 |               |  |                     | 594,139 |                  |  | $           | 12.84 |                    |  |  | 7.7 years |  |  |  | 361,073 |  |  | $ | 14.75 | 

Options vest over various periods ranging from
one to nine years from the date of grant. The term of each
option granted will not exceed ten years from date of grant, and
the exercise price may not be less than 100% of the fair market
value of Boykins common shares on the grant date.

The fair value of employee share options used to
compute the pro forma amounts of net income (loss) and
basic earnings per share presented in Note 2 was estimated using
the Black-Scholes option pricing model with the following
weighted average assumptions:

|                        |  |                    |           |      |  |      |           |   |  |  |           |  
|----------------------- |  | ------------------ | --------- | ---- |  | ---- | --------- | - |  |  | --------- | -
|                        |  |                   
|                        |  | Options Issued In:
|                        |  |                   
|                        |  | 2002               |           | 2001 |  | 2000
|                        |  |                    |           |      |  |     
|Dividend yield          |  |                    | 10.00     | %    |  |      | 12.29     | % |  |  | 10.00     | %
|Expected volatility     |  |                    | 34.30     | %    |  |      | 35.94     | % |  |  | 29.19     | %
|Risk-free interest rate |  |                    | 4.40      | %    |  |      | 5.40      | % |  |  | 6.52      | %
|Expected holding period |  |                    | 5.0 years |      |  |      | 8.0 years |   |  |  | 8.0 years |  

Restricted
Share Grant Plan

The following table summarizes Boykins
restricted share grant activity related to its officers,
eligible employees and non-employee directors.

|                                                      |  |      |         |      |  |  |         |  
|----------------------------------------------------- |  | ---- | ------- | ---- |  |  | ------- | -
|                                                      |  | 2002 |         | 2001
|                                                      |  |      |         |     
|Restricted shares outstanding 
    beginning of year |  |      | 200,736 |      |  |  | 168,512 |  
|New share grants                                      |  |      | 99,170  |      |  |  | 54,750  |  
|Shares cancelled                                      |  |      | (11,315 | )    |  |  | (976    | )
|Shares vested                                         |  |      | (69,239 | )    |  |  | (21,550 | )
|                                                      |  |      |         |      |  |  |         |  
|Restricted shares outstanding  end
    of year       |  |      | 219,352 |      |  |  | 200,736 |  
|                                                      |  |      |         |      |  |  |         |  

The restricted shares vest over various periods
ranging from one to five years from the date of grant. The value
of shares granted has been calculated based on the average of
the high and low share price on the date of grant and is being
amortized as compensation expense over the respective vesting
periods. For the years ended December 31, 2002, 2001 and
2000, Boykins compensation expense related to these
restricted shares was $992,

F-22



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





$589 and $463, respectively. As of
December 31, 2002, the unearned compensation related to
restricted share grants was $1,194 and has been classified as a
component of shareholders equity in the accompanying
balance sheet.




|    |                        
|--- | -----------------------
|12. | Employee Benefit Plans:

Boykin maintains two employee benefit plans, the
Boykin Lodging Company Money Purchase Pension Plan and the
Boykin Lodging Company Profit Sharing Plan. Both plans are
defined contribution plans which were established to provide
retirement benefits to eligible employees. Boykins
contributions to these plans for the years ended
December 31, 2002, 2001 and 2000 totaled $219, $275 and
$261, respectively.



|    |             
|--- | ------------
|13. | Commitments:

Portions of land related to six of the hotels
owned by Boykin are subject to land leases which expire at
various dates through 2068. All leases require minimum annual
rentals, and one lease requires percentage rent based on hotel
revenues. The other five leases are adjusted for increases in
CPI every one to ten years. Rental expense charged to operations
related to these leases for the years ended December 31,
2002, 2001 and 2000 was $987, $1,057 and $1,194, respectively.

Boykin entered into a lease agreement which
expires in January 2008 for the office space currently used
by Boykin and BMC and its subsidiaries. Pursuant to a shared
services and office space agreement, BMC reimburses Boykin for
its proportionate share of the space used under the lease
agreement. Boykins expense charged to operations related
to its proportionate share of the utilized space for the years
ended December 31, 2002, 2001 and 200 was $64, $61 and $59,
respectively.

Boykins annual obligations to make future
minimum payments under the land lease agreements (ignoring
future CPI increases) and the office space lease as of
December 31, 2002 are as follows:

|                    |  |   |        | 
|------------------- |  | - | ------ | 
|2003                |  | $ | 731    | 
|2004                |  |   | 738    | 
|2005                |  |   | 744    | 
|2006                |  |   | 744    | 
|2007                |  |   | 743    | 
|2008 and thereafter |  |   | 25,327 | 
|                    |  |   |        | 
|                    |  | $ | 29,027 | 
|                    |  |   |        | 

Boykins joint venture partner in Shawan
Road Hotel Limited Partnership has the right, subject to certain
performance criteria, to sell one-half of its respective
interests in this joint venture to Boykin at fair market value,
with Boykin retaining the option to fund the purchase price with
cash or through the issuance of common shares. As of
December 31, 2002, Boykins joint venture partner did
not have the ability to exercise this right.



|    |                            
|--- | ---------------------------
|14. | Related Party Transactions:

The Chairman and Chief Executive Officer of
Boykin is the majority shareholder of BMC. BMC and Westboy LLC,
previously a subsidiary of BMC, were significant sources of
Boykins percentage lease revenue through December 31,
2001. At December 31, 2001, Boykin had rent receivable of
$1,118, due from related party lessees. At December 31,
2001, Boykin had a payable to related party lessees of $90,
primarily for the reimbursement of capital expenditure costs
incurred on behalf of Boykin. Boykin paid a $1,600 lease
termination fee to BMC related to the sale of the Daytona hotel
in January 2001.

As a result of the TRS transaction discussed in
Note 1, Boykin acquired 16 subsidiaries of BMC whose primary
assets were leasehold interests in 25 hotel properties owned by
Boykin. At December 31, 2001, Boykin

F-23



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





had recorded a receivable from BMC of $2,008 for
the net working capital assets of the subsidiaries acquired. As
of December 31, 2002, $6 of the receivable remains
outstanding.


Also in conjunction with the TRS transaction,
effective January 1, 2002, BMC managed 16 of the
consolidated properties in which Boykin owned an interest.
Additionally, during October 2002, BMC assumed management
of the Doubletree Kansas City and the Pink Shell Beach Resort
after we terminated the previously existing management
agreements with Interstate. BMC is entitled to management fees
plus reimbursement for employee related expenses. Management
fees earned by BMC related to these hotels during the year ended
December 31, 2002 totaled $4,148. As of December 31,
2002, Boykin had related party payables to BMC of $798 primarily
related to management fees and reimbursements of expenses on
behalf of the hotel properties.

During the years ended December 31, 2002,
2001 and 2000, Boykin paid a wholly-owned subsidiary of BMC
$192, $774 and $1,082, respectively, for design, purchasing and
project management services and for reimbursement of expenses
related to capital improvements at its hotels. During 2001, a
subsidiary of BMC sold a portion of its business to an unrelated
third party. A portion of the sales price is payable contingent
upon future revenues of the business, including revenues from
Boykin. During 2002, an additional $78 of sales proceeds was
provided to BMC as a result of purchases made by Boykin.

Prior to the TRS transactions, effective
February 1, 2000, Jersey Boy LLC, a wholly owned subsidiary
of BMC, (JerseyBoy) managed the Radisson Hotel Mt.
Laurel pursuant to a management agreement. Boykin paid JerseyBoy
management fees of $200 and $202 in 2001 and 2000, respectively.



|    |                                                        
|--- | -------------------------------------------------------
|15. | Statements of Cash Flows, Supplemental
    Disclosures:

As of December 31, 2002, there was $4,747 of
dividends and Partnership distributions which were declared but
not paid. As of December 31, 2001, there were no dividends
or Partnership distributions which were declared but not paid.

Interest paid during the years ended
December 31, 2002, 2001, and 2000 was $20,240, $22,178 and
$22,992, respectively.

As discussed in Note 3, in 2000, Boykin
transferred ownership of its Cleveland Marriott East hotel in
Cleveland, Ohio to Hilton in exchange for Hiltons
Doubletree hotel in San Antonio, Texas and their Doubletree
Guest Suites hotel in Southfield, Michigan, which was renovated
and rebranded as an Embassy Suites in 2001.



|    |                                                 
|--- | ------------------------------------------------
|16. | Pro Forma Financial Information
    (Unaudited):

As a result of the TRS transactions discussed in
Note 1, Boykins consolidated financial statements for 2002
include the results of operations of the consolidated hotels
operated by BMC, Hilton, Interstate and Davidson as compared to
the lease revenues from these properties recorded in
Boykins historical financial information. For comparative
purposes, the following pro forma financial information for 2001
is presented as if the following transactions had been
consummated as of January 1, 2001:



| |   |                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | acquisition of lessees from BMC;                                                                                                                                                                                               
|
| |  | the issuance of 1,427,142 Partnership units to a
    BMC subsidiary;                                                                                                                                                           
|
| |  | entering into the BMC management agreements;                                                                                                                                                                                   
|
| |  | termination/assignment of Interstate leases;                                                                                                                                                                                   
|
| |  | entering into the Interstate management
    agreements; and                                                                                                                                                                    
|
| |  | termination of the percentage lease for a hotel
    in Chicago, Illinois owned by an unconsolidated joint venture,
    and a new TRS owned by that joint venture entering into a
    management contract with a BMC subsidiary.

F-24



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##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued





|                                                                                               |                                                       |                          |         |         |         | 
|---------------------------------------------------------------------------------------------- | ----------------------------------------------------- | ------------------------ | ------- | ------- | ------- | 
|                                                                                               |                                                       | Year Ended December 31, 
|                                                                                               |                                                       |                         
|                                                                                               |                                                       | 2001                    
|                                                                                               |                                                       |                         
|Revenues:                                                                                      |                                                       |                          |         |        
|                                                                                               | Hotel revenues:                                       |                          |         |         |        
|                                                                                               |                                                       | Rooms                    |         | $       | 166,140 | 
|                                                                                               |                                                       | Food and beverage        |         |         | 74,861  | 
|                                                                                               |                                                       | Other                    |         |         | 15,176  | 
|                                                                                               |                                                       |                          |         |        
|                                                                                               | Total hotel revenues                                  |                          |         | 256,177 |        
|                                                                                               | Lease revenue                                         |                          |         | 6,038   |        
|                                                                                               |                                                       |                          |         |        
|                                                                                               |                                                       | Total revenues           |         |         | 262,215 | 
|                                                                                               |                                                       |                          |         |        
|Expenses:                                                                                      |                                                       |                          |         |        
|                                                                                               | Hotel operating expenses:                             |                          |         |         |        
|                                                                                               |                                                       | Rooms                    |         |         | 42,065  | 
|                                                                                               |                                                       | Food and beverage        |         |         | 52,152  | 
|                                                                                               |                                                       | Other direct             |         |         | 8,644   | 
|                                                                                               |                                                       | Indirect                 |         |         | 73,843  | 
|                                                                                               |                                                       | Management fees          |         |         | 9,972   | 
|                                                                                               | Property taxes, insurance and other                   |                          |         | 13,811  |        
|                                                                                               | Real estate related depreciation
    and amortization |                          |         | 28,474  |        
|                                                                                               | Corporate general and administrative                  |                          |         | 6,230   |        
|                                                                                               | Impairment of real estate                             |                          |         | 24,000  |        
|                                                                                               |                                                       |                          |         |        
|                                                                                               |                                                       | Total operating expenses |         |         | 259,191 | 
|                                                                                               |                                                       |                          |         |        
|                                                                                               |                                                       | Operating income         |         |         | 3,024   | 
|                                                                                               |                                                       |                          |         |        
|                                                                                               | Interest income                                       |                          |         | 596     |        
|                                                                                               | Other income                                          |                          |         | 1,071   |        
|                                                                                               | Interest expense                                      |                          |         | (21,916 | )      
|                                                                                               | Amortization of deferred financing costs              |                          |         | (1,205  | )      
|                                                                                               | Minority interest in joint ventures                   |                          |         | 193     |        
|                                                                                               | Minority interest in operating partnership            |                          |         | 2,694   |        
|                                                                                               | Equity in income of unconsolidated
    joint ventures |                          |         | 262     |        
|                                                                                               |                                                       |                          |         |        
|Loss before gain on sale of assets and cumulative
    effect of change in accounting principle |                                                       |                          | (15,281 | )      
|                                                                                               | Gain on sale of assets                                |                          |         | 240     |        
|                                                                                               |                                                       |                          |         |        
|Loss before cumulative effect of change in
    accounting principle                            |                                                       | $                        | (15,041 | )      
|                                                                                               |                                                       |                          |         |        
|Loss per share before cumulative effect of change
    in accounting principle                  |                                                       |                          |         |        
|                                                                                               | Basic                                                 |                          | $       | (0.88   | )      
|                                                                                               | Diluted                                               |                          | $       | (0.88   | )      
|Weighted average shares outstanding (in thousands)                                             |                                                       |                          |         |        
|                                                                                               | Basic                                                 |                          |         | 17,176  |        
|                                                                                               | Diluted                                               |                          |         | 17,281  |        

F-25



---



##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued







|    |                                             
|--- | --------------------------------------------
|17. | Quarterly Operating Results
    (Unaudited):

Boykins unaudited consolidated quarterly
operating data for the years ended December 31, 2002 and
2001 follows. In the opinion of management, all adjustments
(consisting of normal recurring accruals) necessary for a fair
presentation of quarterly results have been reflected in the
data. Quarterly operating results are not necessarily indicative
of the results to be achieved in succeeding quarters or years.

|                                                                         |         |                            |        |          |   |               |        |              |  |   |        |        |  |   |        |        |  
|------------------------------------------------------------------------ | ------- | -------------------------- | ------ | -------- | - | ------------- | ------ | ------------ |  | - | ------ | ------ |  | - | ------ | ------ | -
|                                                                         |         |                           
|                                                                         |         | For the 2002 Quarter Ended
|                                                                         |         |                           
|                                                                         |         | March 31,                  |        | June 30, |   | September 30, |        | December 31,
|                                                                         |         |                            |        |          |   |               |        |             
|Total revenues                                                           |         | $                          | 60,664 |          |   | $             | 68,297 |              |  | $ | 67,470 |        |  | $ | 66,676 |       
|Net income (loss)                                                        |         |                            | (1,945 | )        |   |               | 2,898  |              |  |   | 88     |        |  |   | (1,412 | )     
|Preferred dividends                                                      |         |                            |       |          |   |               |       |              |  |   |       |        |  |   | (1,109 | )     
|                                                                         |         |                            |        |          |   |               |        |              |  |   |        |        |  |   |        |       
|Net income (loss) applicable to common
    shareholders                  |         |                            | (1,945 | )        |   |               | 2,898  |              |  |   | 88     |        |  |   | (2,521 | )     
|Net income (loss) applicable to common
    shareholders per share:       |         |                            |        |          |   |               |        |              |  |   |        |        |  |   |        |       
|                                                                         | Basic   |                            |        | (0.11    | ) |               |        | 0.17         |  |   |        | 0.01   |  |   |        | (0.15  | )
|                                                                         | Diluted |                            |        | (0.11    | ) |               |        | 0.17         |  |   |        | 0.01   |  |   |        | (0.15  | )
|Weighted average number of common shares
    outstanding (in thousands): |         |                            |        |          |   |               |        |              |  |   |        |        |  |   |        |       
|                                                                         | Basic   |                            |        | 17,218   |   |               |        | 17,239       |  |   |        | 17,262 |  |   |        | 17,273 |  
|                                                                         | Diluted |                            |        | 17,294   |   |               |        | 17,379       |  |   |        | 17,385 |  |   |        | 17,396 |  

|                                                                                                                                  |         |                            |        |          |   |               |        |              |  |   |        |        |  |   |         |        |  
|--------------------------------------------------------------------------------------------------------------------------------- | ------- | -------------------------- | ------ | -------- | - | ------------- | ------ | ------------ |  | - | ------ | ------ |  | - | ------- | ------ | -
|                                                                                                                                  |         |                           
|                                                                                                                                  |         | For the 2001 Quarter Ended
|                                                                                                                                  |         |                           
|                                                                                                                                  |         | March 31,                  |        | June 30, |   | September 30, |        | December 31,
|                                                                                                                                  |         |                            |        |          |   |               |        |             
|Total revenues                                                                                                                    |         | $                          | 17,675 |          |   | $             | 18,325 |              |  | $ | 19,110 |        |  | $ | 23,543  |       
|Income (loss) applicable to common
    shareholders before cumulative effect of change in
    accounting principle                |         |                            | (92    | )        |   |               | 1,172  |              |  |   | 1,306  |        |  |   | (31,583 | )     
|Net income (loss) applicable to common
    shareholders                                                                           |         |                            | (465   | )        |   |               | 1,172  |              |  |   | 1,306  |        |  |   | (31,583 | )     
|Net income (loss) applicable to common
    shareholders before cumulative effect of change in accounting
    principle per share: |         |                            |        |          |   |               |        |              |  |   |        |        |  |   |         |       
|                                                                                                                                  | Basic   |                            |        | (0.01    | ) |               |        | 0.07         |  |   |        | 0.08   |  |   |         | (1.84  | )
|                                                                                                                                  | Diluted |                            |        | (0.01    | ) |               |        | 0.07         |  |   |        | 0.08   |  |   |         | (1.84  | )
|Net income (loss) applicable to common
    shareholders per share:                                                                |         |                            |        |          |   |               |        |              |  |   |        |        |  |   |         |       
|                                                                                                                                  | Basic   |                            |        | (0.03    | ) |               |        | 0.07         |  |   |        | 0.08   |  |   |         | (1.84  | )
|                                                                                                                                  | Diluted |                            |        | (0.03    | ) |               |        | 0.07         |  |   |        | 0.08   |  |   |         | (1.84  | )
|Weighted average number of common shares
    outstanding (in thousands):                                                          |         |                            |        |          |   |               |        |              |  |   |        |        |  |   |         |       
|                                                                                                                                  | Basic   |                            |        | 17,161   |   |               |        | 17,171       |  |   |        | 17,181 |  |   |         | 17,188 |  
|                                                                                                                                  | Diluted |                            |        | 17,191   |   |               |        | 17,234       |  |   |        | 17,240 |  |   |         | 17,207 |  

F-26



---



##### Table of Contents



BOYKIN LODGING COMPANY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued







|    |                   
|--- | ------------------
|18. | Subsequent Events:

In January 2003, Boykin closed a $23,300
construction loan secured by the White Sand Villas hotel
condominium project. The loan is due in January 2005, bears
interest at a floating rate of 250 basis points over LIBOR and
requires principal payments based on condominium sales.

In February 2003, Boykin completed the sale
of the Knoxville Hilton and the Hampton Inn Lake Norman, for
aggregate proceeds of $15,200. The net proceeds of these sales
were applied to the $108,000 term loan as a release of the
underlying security which the assets historically provided to
the loan. The loan has a remaining outstanding balance of
$93,750 after applying such proceeds. Boykin will record an
approximate $1,500 net gain on the sale of these two properties
in the first quarter of 2003. These assets were not classified
as held for sale as of December 31, 2002 under the
definition of SFAS 144 as a release was required to be granted
by the lenders in the term loan. The release was not granted
until 2003.

F-27



---



##### Table of Contents



BOYKIN LODGING COMPANY

SCHEDULE III  REAL ESTATE AND
ACCUMULATED DEPRECIATION

AS OF DECEMBER 31, 2002

(in thousands)

|                                                                  |  |              |     |              |  |               |        |                            |  |              |        |      |  |              |      |             |  |   |        |   |  |   |       |  |  |   |        |  |  |   |        | 
|----------------------------------------------------------------- |  | ------------ | --- | ------------ |  | ------------- | ------ | -------------------------- |  | ------------ | ------ | ---- |  | ------------ | ---- | ----------- |  | - | ------ | - |  | - | ----- |  |  | - | ------ |  |  | - | ------ | 
|                                                                  |  |              |     |              |  |               |        |                            |  |              |        |      |  |             
|                                                                  |  |              |     |              |  |               |        | Costs Capitalized          |  |             
|                                                                  |  |              |     |              |  | Subsequent to |        | Gross Amounts at Which    
|                                                                  |  |              |     | Initial Cost |  | Acquisition   |        | Carried at Close of Period
|                                                                  |  |              |     |              |  |               |        |                           
|                                                                  |  |              |     |              |  | Buildings and |        |                            |  | Building and |        |      |  | Building and |      |            
|Description                                                       |  | Encumbrances |     | Land         |  | Improvements  |        | Land                       |  | Improvements |        | Land |  | Improvements |      | Total(h)(i)
|                                                                  |  |              |     |              |  |               |        |                            |  |              |        |      |  |              |      |            
|Corporate Offices
    Cleveland, Ohio                             |  | $            |    |              |  | $             |       |                            |  | $            |       |      |  | $            |     |             |  | $ | 35     |   |  | $ |      |  |  | $ | 35     |  |  | $ | 35     | 
|Berkeley Marina Radisson
    Berkeley, California                 |  |              | (c | )            |  |               |       |                            |  |              | 10,807 |      |  |              |     |             |  |   | 6,545  |   |  |   |      |  |  |   | 17,352 |  |  |   | 17,352 | 
|Buffalo Marriott
    Buffalo, New York                            |  |              | (c | )            |  |               | 1,164  |                            |  |              | 15,174 |      |  |              |     |             |  |   | 2,454  |   |  |   | 1,164 |  |  |   | 17,628 |  |  |   | 18,792 | 
|Cleveland Airport Marriott
    Cleveland, Ohio                    |  |              | (c | )            |  |               | 1,175  |                            |  |              | 11,441 |      |  |              |     |             |  |   | 8,045  |   |  |   | 1,175 |  |  |   | 19,486 |  |  |   | 20,661 | 
|Columbus North Marriott
    Columbus, Ohio                        |  |              | (a | )            |  |               | 1,635  |                            |  |              | 12,873 |      |  |              |     |             |  |   | 2,776  |   |  |   | 1,635 |  |  |   | 15,649 |  |  |   | 17,284 | 
|Melbourne Quality Suites
    Melbourne, Florida                   |  |              | (a | )            |  |               | 3,092  |                            |  |              | 7,819  |      |  |              |     |             |  |   | 964    |   |  |   | 3,092 |  |  |   | 8,783  |  |  |   | 11,875 | 
|Radisson Inn Sanibel Gateway
    Ft. Myers, Florida               |  |              | (c | )            |  |               | 718    |                            |  |              | 2,686  |      |  |              |     |             |  |   | 694    |   |  |   | 718   |  |  |   | 3,380  |  |  |   | 4,098  | 
|Lake Norman Hampton Inn
    Charlotte, North Carolina             |  |              | (c | )            |  |               | 490    |                            |  |              | 4,131  |      |  |              |     |             |  |   | (237   | ) |  |   | 490   |  |  |   | 3,894  |  |  |   | 4,384  | 
|Lake Norman Holiday Inn
    Charlotte, North Carolina             |  |              | (c | )            |  |               | 700    |                            |  |              | 4,435  |      |  |              |     |             |  |   | (1,568 | ) |  |   | 700   |  |  |   | 2,867  |  |  |   | 3,567  | 
|Holiday Inn Crabtree
    Raleigh, North Carolina                  |  |              | (c | )            |  |               | 725    |                            |  |              | 6,542  |      |  |              |     |             |  |   | 832    |   |  |   | 725   |  |  |   | 7,374  |  |  |   | 8,099  | 
|Melbourne Hilton Oceanfront
    Melbourne, Florida                |  |              | (d | )            |  |               | 852    |                            |  |              | 7,699  |      |  |              |     |             |  |   | 826    |   |  |   | 852   |  |  |   | 8,525  |  |  |   | 9,377  | 
|French Lick Springs Resort
    French Lick, Indiana               |  |              | (d | )            |  |               | 2,000  |                            |  |              | 16,000 |      |  |              | (3   | )           |  |   | 1,677  |   |  |   | 1,997 |  |  |   | 17,677 |  |  |   | 19,674 | 
|Holiday Inn Minneapolis West
    Minneapolis, Minnesota           |  |              | (d | )            |  |               | 1,000  |                            |  |              | 10,604 |      |  |              |     |             |  |   | 1,787  |   |  |   | 1,000 |  |  |   | 12,391 |  |  |   | 13,391 | 
|Marriotts Hunt Valley Inn
    Baltimore, Maryland                |  |              | (d | )            |  |               | 2,890  |                            |  |              | 21,575 |      |  |              |     |             |  |   | 2,365  |   |  |   | 2,890 |  |  |   | 23,940 |  |  |   | 26,830 | 
|Hampton Inn San Diego Airport/Sea World
    San Diego, California |  |              | (c | )            |  |               | 1,000  |                            |  |              | 7,400  |      |  |              |     |             |  |   | 385    |   |  |   | 1,000 |  |  |   | 7,785  |  |  |   | 8,785  | 
|Doubletree Kansas City
    Kansas City, Missouri                  |  |              | (f | )            |  |               | 1, 500 |                            |  |              | 20,958 |      |  |              |     |             |  |   | (8,097 | ) |  |   | 1,500 |  |  |   | 12,861 |  |  |   | 14,361 | 
|Knoxville Hilton
    Knoxville, Tennessee                         |  |              | (c | )            |  |               | 1,500  |                            |  |              | 8,132  |      |  |              |     |             |  |   | 666    |   |  |   | 1,500 |  |  |   | 8,798  |  |  |   | 10,298 | 
|High Point Radisson
    High Point, North Carolina                |  |              | (a | )            |  |               | 450    |                            |  |              | 25,057 |      |  |              |     |             |  |   | (2,195 | ) |  |   | 450   |  |  |   | 22,862 |  |  |   | 23,312 | 
|Radisson Hotel Mt. Laurel
    Mt. Laurel, New Jersey              |  |              | (d | )(e)         |  |               | 2,000  |                            |  |              | 19,697 |      |  |              |     |             |  |   | (5,705 | ) |  |   | 2,000 |  |  |   | 13,992 |  |  |   | 15,992 | 
|Pink Shell Beach Resort
    Ft. Myers, Florida                    |  |              | (g | )            |  |               | 6,000  |                            |  |              | 13,445 |      |  |              | (900 | )           |  |   | (6,713 | ) |  |   | 5,100 |  |  |   | 6,732  |  |  |   | 11,832 | 
|Doubletree Sacramento
    Sacramento, California                  |  |              | (b | )            |  |               | 4,400  |                            |  |              | 41,884 |      |  |              |     |             |  |   | 3,267  |   |  |   | 4,400 |  |  |   | 45,151 |  |  |   | 49,551 | 
|Doubletree Colorado Springs
    Colorado Springs, Colorado        |  |              | (b | )            |  |               | 3,340  |                            |  |              | 31,296 |      |  |              |     |             |  |   | 1,386  |   |  |   | 3,340 |  |  |   | 32,682 |  |  |   | 36,022 | 
|Doubletree Boise
    Boise, Idaho                                 |  |              | (b | )            |  |               | 2,470  |                            |  |              | 23,998 |      |  |              |     |             |  |   | 1,822  |   |  |   | 2,470 |  |  |   | 25,820 |  |  |   | 28,290 | 
|Doubletree Omaha
    Omaha, Nebraska                              |  |              | (b | )            |  |               | 1,100  |                            |  |              | 19,690 |      |  |              |     |             |  |   | 4,979  |   |  |   | 1,100 |  |  |   | 24,669 |  |  |   | 25,769 | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                  |  |                 |       |                |  |              |        |             |  |                  |         |  |  |  |      |  |  |  |          | 
|----------------------------------------------------------------- |  | --------------- | ----- | -------------- |  | ------------ | ------ | ----------- |  | ---------------- | ------- |  |  |  | ---- |  |  |  | -------- | 
|                                                                  |  | Accumulated     |       | Net Book       |  |              |        |             |  | Life on Which   
|                                                                  |  | Depreciation    |       | Value Land and |  |              |        |             |  | Depreciation in 
|                                                                  |  | Buildings and   |       | Buildings and  |  | Date of      |        | Date of     |  | Income Statement
|Description                                                       |  | Improvements(j) |       | Improvements   |  | Construction |        | Acquisition |  | is Computed     
|                                                                  |  |                 |       |                |  |              |        |             |  |                 
|Corporate Offices
    Cleveland, Ohio                             |  | $               | 17    |                |  | $            | 18     |             |  |                  |         |  |  |  | 1998 |  |  |  | 10 years | 
|Berkeley Marina Radisson
    Berkeley, California                 |  |                 | 5,204 |                |  |              | 12,148 |             |  |                  | 1972    |  |  |  | 1996 |  |  |  | 20 years | 
|Buffalo Marriott
    Buffalo, New York                            |  |                 | 4,016 |                |  |              | 14,776 |             |  |                  | 1981    |  |  |  | 1996 |  |  |  | 25 years | 
|Cleveland Airport Marriott
    Cleveland, Ohio                    |  |                 | 5,767 |                |  |              | 14,894 |             |  |                  | 1970    |  |  |  | 1996 |  |  |  | 20 years | 
|Columbus North Marriott
    Columbus, Ohio                        |  |                 | 3,569 |                |  |              | 13,715 |             |  |                  | 1981    |  |  |  | 1996 |  |  |  | 25 years | 
|Melbourne Quality Suites
    Melbourne, Florida                   |  |                 | 1,734 |                |  |              | 10,141 |             |  |                  | 1986    |  |  |  | 1996 |  |  |  | 30 years | 
|Radisson Inn Sanibel Gateway
    Ft. Myers, Florida               |  |                 | 626   |                |  |              | 3,472  |             |  |                  | 1986    |  |  |  | 1996 |  |  |  | 30 years | 
|Lake Norman Hampton Inn
    Charlotte, North Carolina             |  |                 | 917   |                |  |              | 3,467  |             |  |                  | 1991    |  |  |  | 1996 |  |  |  | 30 years | 
|Lake Norman Holiday Inn
    Charlotte, North Carolina             |  |                 | 978   |                |  |              | 2,589  |             |  |                  | 1987    |  |  |  | 1996 |  |  |  | 30 years | 
|Holiday Inn Crabtree
    Raleigh, North Carolina                  |  |                 | 1,707 |                |  |              | 6,392  |             |  |                  | 1974    |  |  |  | 1997 |  |  |  | 30 years | 
|Melbourne Hilton Oceanfront
    Melbourne, Florida                |  |                 | 1,379 |                |  |              | 7,998  |             |  |                  | 1986    |  |  |  | 1997 |  |  |  | 35 years | 
|French Lick Springs Resort
    French Lick, Indiana               |  |                 | 3,518 |                |  |              | 16,156 |             |  |                  | 1903    |  |  |  | 1997 |  |  |  | 30 years | 
|Holiday Inn Minneapolis West
    Minneapolis, Minnesota           |  |                 | 2,098 |                |  |              | 11,293 |             |  |                  | 1986    |  |  |  | 1997 |  |  |  | 30 years | 
|Marriotts Hunt Valley Inn
    Baltimore, Maryland                |  |                 | 4,124 |                |  |              | 22,706 |             |  |                  | 1971    |  |  |  | 1997 |  |  |  | 30 years | 
|Hampton Inn San Diego Airport/Sea World
    San Diego, California |  |                 | 1,307 |                |  |              | 7,478  |             |  |                  | 1989    |  |  |  | 1997 |  |  |  | 30 years | 
|Doubletree Kansas City
    Kansas City, Missouri                  |  |                 | 3,902 |                |  |              | 10,459 |             |  |                  | 1969    |  |  |  | 1997 |  |  |  | 30 years | 
|Knoxville Hilton
    Knoxville, Tennessee                         |  |                 | 1,378 |                |  |              | 8,920  |             |  |                  | 1981    |  |  |  | 1998 |  |  |  | 30 years | 
|High Point Radisson
    High Point, North Carolina                |  |                 | 4,018 |                |  |              | 19,294 |             |  |                  | 1982    |  |  |  | 1998 |  |  |  | 30 years | 
|Radisson Hotel Mt. Laurel
    Mt. Laurel, New Jersey              |  |                 | 2,645 |                |  |              | 13,347 |             |  |                  | 1975    |  |  |  | 1998 |  |  |  | 30 years | 
|Pink Shell Beach Resort
    Ft. Myers, Florida                    |  |                 | 1,119 |                |  |              | 10,713 |             |  |                  | 1989    |  |  |  | 1998 |  |  |  | 30 years | 
|Doubletree Sacramento
    Sacramento, California                  |  |                 | 6,637 |                |  |              | 42,914 |             |  |                  | 1974    |  |  |  | 1998 |  |  |  | 30 years | 
|Doubletree Colorado Springs
    Colorado Springs, Colorado        |  |                 | 4,935 |                |  |              | 31,087 |             |  |                  | 1986    |  |  |  | 1998 |  |  |  | 30 years | 
|Doubletree Boise
    Boise, Idaho                                 |  |                 | 3,873 |                |  |              | 24,417 |             |  |                  | 1968    |  |  |  | 1998 |  |  |  | 30 years | 
|Doubletree Omaha
    Omaha, Nebraska                              |  |                 | 3,420 |                |  |              | 22,349 |             |  |                  | 1970/81 |  |  |  | 1998 |  |  |  | 30 years | 

F-28



---



##### Table of Contents



|                                                      |       |              |     |              |  |               |       |                            |  |              |        |         |  |              |   |             |   |  |        |        |  |  |       |        |  |  |        |         |  |  |        |         | 
|----------------------------------------------------- | ----- | ------------ | --- | ------------ |  | ------------- | ----- | -------------------------- |  | ------------ | ------ | ------- |  | ------------ | - | ----------- | - |  | ------ | ------ |  |  | ----- | ------ |  |  | ------ | ------- |  |  | ------ | ------- | 
|                                                      |       |              |     |              |  |               |       |                            |  |              |        |         |  |             
|                                                      |       |              |     |              |  |               |       | Costs Capitalized          |  |             
|                                                      |       |              |     |              |  | Subsequent to |       | Gross Amounts at Which    
|                                                      |       |              |     | Initial Cost |  | Acquisition   |       | Carried at Close of Period
|                                                      |       |              |     |              |  |               |       |                           
|                                                      |       |              |     |              |  | Buildings and |       |                            |  | Building and |        |         |  | Building and |   |            
|Description                                           |       | Encumbrances |     | Land         |  | Improvements  |       | Land                       |  | Improvements |        | Land    |  | Improvements |   | Total(h)(i)
|                                                      |       |              |     |              |  |               |       |                            |  |              |        |         |  |              |   |            
|Doubletree Springfield
    Springfield, Oregon        |       |              | (b | )            |  |               | 2,160 |                            |  |              | 6,050  |         |  |              |  |             |   |  | (1,363 | )      |  |  | 2,160 |        |  |  | 4,687  |         |  |  | 6,847  |        
|Doubletree Portland Lloyd Center
    Portland, Oregon |       |              | (b | )            |  |               | 3,900 |                            |  |              | 61,633 |         |  |              |  |             |   |  | 2,222  |        |  |  | 3,900 |        |  |  | 63,855 |         |  |  | 67,755 |        
|Doubletree Portland Downtown
    Portland, Oregon     |       |              | (b | )            |  |               | 1,800 |                            |  |              | 21,034 |         |  |              |  |             |   |  | 905    |        |  |  | 1,800 |        |  |  | 21,939 |         |  |  | 23,739 |        
|Doubletree Bellevue
    Bellevue, Washington          |       |              | (b | )            |  |               | 2,400 |                            |  |              | 13,730 |         |  |              |  |             |   |  | 99     |        |  |  | 2,400 |        |  |  | 13,829 |         |  |  | 16,229 |        
|Doubletree Spokane Valley
    Spokane, Washington     |       |              | (b | )            |  |               | 1,630 |                            |  |              | 6,693  |         |  |              |  |             |   |  | (2,727 | )      |  |  | 1,630 |        |  |  | 3,966  |         |  |  | 5,596  |        
|Doubletree Yakima Valley
    Yakima, Washington       |       |              | (b | )            |  |               | 1,140 |                            |  |              | 6,188  |         |  |              |  |             |   |  | (3,120 | )      |  |  | 1,140 |        |  |  | 3,068  |         |  |  | 4,208  |        
|Embassy Suites Southfield
    Southfield, Michigan    |       |              | (d | )            |  |               | 777   |                            |  |              | 7,639  |         |  |              |  |             |   |  | 3,209  |        |  |  | 777   |        |  |  | 10,848 |         |  |  | 11,625 |        
|Doubletree Hotel San Antonio
    San Antonio, Texas   |       |              | (d | )            |  |               | 1,140 |                            |  |              | 11,203 |         |  |              |  |             |   |  | 494    |        |  |  | 1,140 |        |  |  | 11,697 |         |  |  | 12,837 |        
|                                                      |       |              |     |              |  |               |       |                            |  |              |        |         |  |              |   |             |   |  |        |        |  |  |       |        |  |  |        |         |  |  |        |        
|                                                      | Total |              |     |              |  |               | $     | 55,148                     |  |              | $      | 477,513 |  |              | $ | (903        | ) |  | $      | 16,709 |  |  | $     | 54,245 |  |  | $      | 494,222 |  |  | $      | 548,467 | 
|                                                      |       |              |     |              |  |               |       |                            |  |              |        |         |  |              |   |             |   |  |        |        |  |  |       |        |  |  |        |         |  |  |        |        

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                      |       |                 |       |                |  |              |        |             |  |                  |         |  |  |  |      |  |  |  |          |  | 
|----------------------------------------------------- | ----- | --------------- | ----- | -------------- |  | ------------ | ------ | ----------- |  | ---------------- | ------- |  |  |  | ---- |  |  |  | -------- |  | 
|                                                      |       | Accumulated     |       | Net Book       |  |              |        |             |  | Life on Which   
|                                                      |       | Depreciation    |       | Value Land and |  |              |        |             |  | Depreciation in 
|                                                      |       | Buildings and   |       | Buildings and  |  | Date of      |        | Date of     |  | Income Statement
|Description                                           |       | Improvements(j) |       | Improvements   |  | Construction |        | Acquisition |  | is Computed     
|                                                      |       |                 |       |                |  |              |        |             |  |                 
|Doubletree Springfield
    Springfield, Oregon        |       |                 | 1,066 |                |  |              | 5,781  |             |  |                  | 1973    |  |  |  | 1998 |  |  |  | 30 years | 
|Doubletree Portland Lloyd Center
    Portland, Oregon |       |                 | 9,619 |                |  |              | 58,136 |             |  |                  | 1964/81 |  |  |  | 1998 |  |  |  | 30 years | 
|Doubletree Portland Downtown
    Portland, Oregon     |       |                 | 3,290 |                |  |              | 20,449 |             |  |                  | 1972    |  |  |  | 1998 |  |  |  | 30 years | 
|Doubletree Bellevue
    Bellevue, Washington          |       |                 | 2,562 |                |  |              | 13,667 |             |  |                  | 1981    |  |  |  | 1998 |  |  |  | 30 years | 
|Doubletree Spokane Valley
    Spokane, Washington     |       |                 | 1,050 |                |  |              | 4,546  |             |  |                  | 1969    |  |  |  | 1998 |  |  |  | 30 years | 
|Doubletree Yakima Valley
    Yakima, Washington       |       |                 | 856   |                |  |              | 3,352  |             |  |                  | 1968    |  |  |  | 1998 |  |  |  | 30 years | 
|Embassy Suites Southfield
    Southfield, Michigan    |       |                 | 725   |                |  |              | 10,900 |             |  |                  | 1978    |  |  |  | 2000 |  |  |  | 30 years | 
|Doubletree Hotel San Antonio
    San Antonio, Texas   |       |                 | 903   |                |  |              | 11,934 |             |  |                  | 1987    |  |  |  | 2000 |  |  |  | 30 years | 
|                                                      |       |                 |       |                |  |              |        |             |  |                  |         |  |  |  |      |  |  |  |          | 
|                                                      | Total |                 | $     | 88,959         |  |              | $      | 459,508     |  |                  |         |  |  |  |      |  |  |  |          |  | 
|                                                      |       |                 |       |                |  |              |        |             |  |                  |         |  |  |  |      |  |  |  |          | 



| | 
| | 
| | 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | These hotels are collateral for the $45,000 term
    note payable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(b) | These hotels are collateral for the $130,000 term
    note payable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(c) | These hotels are collateral for the $108,000 term
    note payable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(d) | These hotels are collateral for the $65,000
    credit facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(e) | Effective February 1, 2000, the Partnership
    took over the operations of the Radisson Hotel Mt. Laurel under
    the REIT tax regulations related to foreclosure properties. The
    hotel was owned 85% by the Partnership under a joint venture
    agreement with an affiliate of Radisson Hotels Worldwide and
    leased to the Radisson affiliate. The lease was terminated and
    the Partnership obtained 100% interest in the hotel. The
    elimination of Radissons interest in the hotel ($3,573)
    was accounted for as a reduction in the value of the building as
    of December 31, 1999.



|    |                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(f) | Effective November 30, 2001, Interstate
    assigned their 20% minority interest in the joint venture which
    owns the hotel to the Partnership. The elimination of the
    minority interest in the hotel ($5,129) was accounted for as a
    reduction in the value of the building as of November 30,
    2001.



|    |                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(g) | This activity includes the reclassification of
    the net book value of the Sanibel View Villas to other assets
    for their eventual sale and the disposal of 38 cottages at the
    Pink Shell Beach resort to make way for the construction of
    White Sand Villas, both which occurred in 2002.
|   
|(h) | Aggregate cost for federal income tax reporting
    purposes at December 31, 2002 is as follows:                                                                                                                                                                                                       

|                           |  |   |         | 
|-------------------------- |  | - | ------- | 
|Land                       |  | $ | 50,775  | 
|Buildings and improvements |  |   | 563,570 | 
|                           |  |   |         | 
|                           |  | $ | 614,345 | 
|                           |  |   |         | 



|    |                                                                        
|--- | -----------------------------------------------------------------------
|(i) | Reconciliation of Gross Amounts of Land,
    Buildings and Improvements

|                                 |  |   |         |  
|-------------------------------- |  | - | ------- | -
|Balance as of December 31, 2001  |  | $ | 551,348 |  
|Disposals                        |  |   | (11,511 | )
|Improvements and other additions |  |   | 8,630   |  
|                                 |  |   |         |  
|Balance as of December 31, 2002  |  | $ | 548,467 |  
|                                 |  |   |         |  



|    |                                                                             
|--- | ----------------------------------------------------------------------------
|(i) | Reconciliation of Accumulated Depreciation of
    Buildings and Improvements

|                             |  |   |        |  
|---------------------------- |  | - | ------ | -
|Balance at December 31, 2001 |  | $ | 71,759 |  
|Disposals                    |  |   | (919   | )
|Depreciation expense         |  |   | 18,119 |  
|                             |  |   |        |  
|Balance at December 31, 2002 |  | $ | 88,959 |  
|                             |  |   |        |  

F-29



---



##### Table of Contents






SIGNATURES

Pursuant to the requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

|               |  |                                                       
|-------------- |  | ------------------------------------------------------
|March 24, 2003 |  | BOYKIN LODGING COMPANY                                
|               |  | By: /s/ ROBERT W. BOYKIN          Robert
    W. Boykin

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|               |  |                                                                                                                                                                      
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              
|March 24, 2003 |  | /s/ ROBERT W. BOYKIN     Robert W.
    Boykin     Chairman of the Board
    and     Chief Executive
    Officer     (Principal Executive
    Officer)                
|              
|March 24, 2003 |  | /s/ SHEREEN P. JONES     Shereen P.
    Jones     Executive Vice President,
    Chief Financial     and Investment
    Officer     (Principal Accounting
    Officer)
|              
|March 24, 2003 |  | /s/ IVAN J. WINFIELD     Ivan J.
    Winfield     Director                                                                                                           
|              
|March 24, 2003 |  | /s/ LEE C. HOWLEY, JR.     Lee C.
    Howley, Jr.     Director                                                                                                       
|              
|March 24, 2003 |  | /s/ FRANK E. MOSIER     Frank E.
    Mosier     Director                                                                                                             
|              
|March 24, 2003 |  | /s/ WILLIAM H. SCHECTER     William H.
    Schecter     Director                                                                                                     
|              
|March 24, 2003 |  | /s/ ALBERT T. ADAMS     Albert T.
    Adams     Director                                                                                                             
|              
|March 24, 2003 |  | /s/ RAYMOND P. HEITLAND     Raymond P.
    Heitland     Director                                                                                                     



---



##### Table of Contents



SARBANES-OXLEY ACT SECTION 302
CERTIFICATION

I, Robert W. Boykin, Chairman of the Board and
Chief Executive Officer, certify that:



| |    |                                                                                                                                                                                                                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | I have reviewed this annual report on
    Form 10-K of Boykin Lodging Company;                                                                                                                                                                                                                                                              
|
| | 2. | Based on my knowledge, this annual report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    annual report;
|
| | 3. | Based on my knowledge, the financial statements,
    and other financial information included in this annual report,
    fairly present in all material respects the financial condition,
    results of operations and cash flows of the registrant as of,
    and for, the periods presented in this annual report;                       
|
| | 4. | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                          



| |    |                                                                                                                                                                                                                                                                                                             
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this annual report is being prepared;



| |    |                                                                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date), and



| |    |                                                                                                                                                                             
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c. | presented in this annual report our conclusions
    about the effectiveness of the disclosure controls and
    procedures based on our evaluation as of the Evaluation Date;



| |    |                                                                                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |    |                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and



| |    |                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrants internal controls; and



| |    |                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. | The registrants other certifying officers
    and I have indicated in this annual report whether or not there
    were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.

Date: March 24, 2003

| |  |                                                                          
| |  | -------------------------------------------------------------------------
| |  | By: /s/ ROBERT W. BOYKIN                                                 
| |  | Robert
    W. BoykinChairman of the Board
    and Chief Executive Officer



---



##### Table of Contents



SARBANES-OXLEY ACT SECTION 302
CERTIFICATION

I, Shereen P. Jones, Executive Vice President,
Chief Financial and Investment Officer, certify that:



| |    |                                                                                                                                                                                                                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | I have reviewed this annual report on
    Form 10-K of Boykin Lodging Company;                                                                                                                                                                                                                                                              
|
| | 2. | Based on my knowledge, this annual report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    annual report;
|
| | 3. | Based on my knowledge, the financial statements,
    and other financial information included in this annual report,
    fairly present in all material respects the financial condition,
    results of operations and cash flows of the registrant as of,
    and for, the periods presented in this annual report;                       
|
| | 4. | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                          



| |    |                                                                                                                                                                                                                                                                                                             
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this annual report is being prepared;



| |    |                                                                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date), and



| |    |                                                                                                                                                                             
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c. | presented in this annual report our conclusions
    about the effectiveness of the disclosure controls and
    procedures based on our evaluation as of the Evaluation Date;



| |    |                                                                                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |    |                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and



| |    |                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrants internal controls; and



| |    |                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. | The registrants other certifying officers
    and I have indicated in this annual report whether or not there
    were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.

Date: March 24, 2003

| |  |                                                                                         
| |  | ----------------------------------------------------------------------------------------
| |  | By: /s/ SHEREEN P. JONES                                                                
| |  | Shereen
    P. JonesExecutive Vice President,
    Chief Financial and Investment Officer



---



##### Table of Contents






EXHIBIT INDEX

| |    |        |  |                                                                                                                                                                   
| | -- | ------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3  | .1(a)  |  | Amended and Restated Articles of Incorporation,
    as amended                                                                                                    
| | 3  | .2(b)  |  | Code of Regulations                                                                                                                                               
| | 4  | .1(b)  |  | Specimen Share Certificate                                                                                                                                        
| | 4  | .2(a)  |  | Dividend Reinvestment and Optional Share Purchase
    Plan                                                                                                        
| | 4  | .3(d)  |  | Shareholder Rights Agreement, dated as of May 25,
    1999 between Boykin Lodging Company and National City Bank as
    rights agent                              
| | 4  | .3a(g) |  | Amendment to Shareholder Rights Agreement, dated
    as of December 31, 2001                                                                                      
| | 10 | .1(i)  |  | Third Amended and Restated Agreement of Limited
    Partnership of Boykin Hotel Properties, L.P.                                                                  
| | 10 | .2(b)  |  | Form of Registration Rights Agreement                                                                                                                             
| | 10 | .3(b)  |  | Long-Term Incentive Plan*                                                                                                                                         
| | 10 | .4(b)  |  | Directors Deferred Compensation Plan*                                                                                                                            
| | 10 | .5(b)  |  | Employment Agreement between the Company and
    Robert W. Boykin*                                                                                                
| | 10 | .6(b)  |  | Form of Percentage Lease                                                                                                                                          
| | 10 | .7(b)  |  | Intercompany Convertible Note                                                                                                                                     
| | 10 | .8(b)  |  | Agreements with General Partners of the
    Contributed Partnerships                                                                                              
| | 10 | .9(b)  |  | Form of Noncompetition Agreement                                                                                                                                  
| | 10 | .10(b) |  | Alignment of Interests Agreement                                                                                                                                  
| | 10 | .11(c) |  | Description of Employment Arrangement between the
    Company and Richard C. Conti*                                                                               
| | 10 | .12(d) |  | Limited Liability Company Agreement of Boykin/AEW
    LLC dated as of February 1, 1999                                                                            
| | 10 | .13(e) |  | Stock Purchase Option Agreement by and among
    Boykin Lodging Company, Boykin Hotel Properties, L.P. and AEW
    Partners III, L.P. dated as of February 1, 1999
| | 10 | .14(e) |  | Warrant to Purchase Class A Cumulative Preferred
    Stock, Series 1999-A of Boykin Lodging Company dated as of
    February 1, 1999                              
| | 10 | .15(e) |  | Registration Rights Agreement by and among Boykin
    Lodging Company and AEW Partners III, L.P. dated as of
    February 1, 1999                                 
| | 10 | .16(f) |  | Key Employee Severance Plan*                                                                                                                                      
| | 10 | .17(f) |  | Form of Severance Agreement*                                                                                                                                      
| | 10 | .18(g) |  | Master Contribution Agreement between BMC, JABO
    LLC, the Company and the Partnership dated as of
    December 31, 2001                                        
| | 10 | .19(g) |  | Form of Hotel Management Agreement*                                                                                                                               
| | 10 | .20(g) |  | Registration Rights Agreement between the Company
    and JABO LLC dated January 1, 2002                                                                          
| | 10 | .21    |  | Description of Employment Arrangement between the
    Company and Shereen P. Jones*                                                                               
| | 12 |        |  | Statement re Computation of Ratios                                                                                                                                
| | 16 | .1(h)  |  | Letter of Arthur Andersen LLP required by Item
    304 of Regulation S-K                                                                                          
| | 21 |        |  | Subsidiaries of the Registrant                                                                                                                                    
| | 23 | .1     |  | Independent Auditors Consent                                                                                                                                     



|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|(a) | Incorporated by reference from Boykins
    Form 10-Q for the quarter ended June 30, 1999.



|    |                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Incorporated by reference from Amendment
    No. 3 to Boykins Registration Statement on
    Form S-11 (Registration No. 333-6341) (the
    Form S-11) filed on October 24, 1996. Each
    of the above exhibits has the same exhibit number in the
    Form S-11.



|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|(c) | Incorporated by reference from Boykins
    Form 10-Q for the quarter ended June 30, 1998.



|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(d) | Incorporated by reference from Boykins
    Form 10-Q for the quarter ended March 31, 1999.



|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(e) | Incorporated by reference from Boykins
    Form 10-Q for the quarter ended March 31, 1999.



|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(f) | Incorporated by reference from Boykins
    Form 10-K for the year ended December 31, 1999.



|    |                                                                                
|--- | -------------------------------------------------------------------------------
|(g) | Incorporated by reference from Boykins
    Form 8-K filed on January 14, 2002.
|   
|(h) | Incorporated by reference from Boykins
    Form 8-K filed on April 22, 2002.  



|    |                                                                               
|--- | ------------------------------------------------------------------------------
|(i) | Incorporated by reference from Boykins
    Form 8-K filed on October 4, 2002.



| |   |                                                             
| | - | ------------------------------------------------------------
| | * | Management contract or compensatory plan or
    arrangement.