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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 FORM 10-Q (Mark One)[X]
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934For the quarterly period ended March 31, 2004OR[   ]
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934For the
transition period from ______________to _______________
 Commission file number 001-11975 Boykin Lodging Company  Ohio
    
    34-1824586(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)
 Guildhall Building, Suite 1500, 45 W. Prospect Avenue,Cleveland, Ohio
    
    44115(Address of Principal Executive Office)
    
    (Zip Code)
 (216) 430-1200   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    [   ] Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes     [X]     No    [   ] The number of common shares, without par value, outstanding as of April
30, 2004 was 17,396,744.




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TABLE OF CONTENTS  PART IITEM 1. FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETSCONSOLIDATED STATEMENTS OF OPERATIONSCONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITYCONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONSOLIDATED FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART IIITEM 1. LEGAL PROCEEDINGSITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDSITEM 3. DEFAULTS UPON SENIOR SECURITIESITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITS AND REPORTS ON FORM 8-KSIGNATURESEXHIBIT INDEXEX-31.1 302 CERTIFICATION CEOEX-31.2 302 CERTIFICATION CFOEX-32.1  906 CERTIFICATION CEOEX-32.2 906 CERTIFICATION CFO    Table of Contents  
 PART I 
 ITEM 1. FINANCIAL STATEMENTS BOYKIN LODGING COMPANY
INDEX TO FINANCIAL STATEMENTS Consolidated Balance Sheets as of March 31, 2004 (unaudited) and December 31, 2003
    
    
    3Consolidated Statements of Operations for the Three Months Ended March 31, 2004 and 2003 (unaudited)
    
    
    4Consolidated Statement of Shareholders Equity for the Three Months Ended March 31, 2004 (unaudited)
    
    
    5Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2004 and 2003 (unaudited)
    
    
    6Notes to Consolidated Financial Statements
    
    
    7




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BOYKIN LODGING COMPANY 
 CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2004 AND DECEMBER 31, 2003
(dollar amounts in thousands)
 (Unaudited)March 31,
    
    December 31,2004
    
    2003ASSETSInvestment in hotel properties
    
    $
    624,428
    
    
    $
    616,363Accumulated depreciation
    
    
    (152,802
    )
    
    
    (146,072
    )Investment in hotel properties, net
    
    
    471,626
    
    
    
    470,291Cash and cash equivalents
    
    
    22,373
    
    
    
    14,013Restricted cash
    
    
    13,106
    
    
    
    15,365Accounts receivable, net of allowance for doubtful accounts of $151
as of March 31, 2004 and December 31, 2003
    
    
    14,453
    
    
    
    40,650Rent receivable from lessee
    
    
    142
    
    
    
    254Inventories
    
    
    1,836
    
    
    
    1,782Deferred financing costs and other, net
    
    
    2,760
    
    
    
    3,018Investment in unconsolidated joint ventures
    
    
    15,681
    
    
    
    16,158Other assets
    
    
    10,764
    
    
    
    8,718Assets related to discontinued operations, net
    
    
    
    
    
    
    21,043$
    552,741
    
    
    $
    591,292LIABILITIES AND SHAREHOLDERS EQUITYBorrowings against credit facility
    
    $
    69,946
    
    
    $
    71,945Term notes payable
    
    
    196,256
    
    
    
    210,074Accounts payable and accrued expenses
    
    
    44,317
    
    
    
    45,200Accounts payable to related party
    
    
    2,003
    
    
    
    945Dividends/distributions payable
    
    
    1,188
    
    
    
    1,188Due to lessees
    
    
    
    
    
    
    164Deferred lease revenue
    
    
    140
    
    
    
    Minority interest in joint ventures
    
    
    1,144
    
    
    
    1,177Minority interest in operating partnership
    
    
    10,557
    
    
    
    11,495Liabilities related to discontinued operations
    
    
    
    
    
    
    17,563SHAREHOLDERS EQUITY:Preferred shares, without par value; 10,000,000 shares authorized;
181,000 shares issued and outstanding as of March 31, 2004 and
December 31, 2003 (liquidation preference of $45,250)
    
    
    
    
    
    
    Common shares, without par value; 40,000,000 shares authorized;
17,396,744 and 17,344,380 shares outstanding as of March 31,
2004 and December 31, 2003, respectively
    
    
    
    
    
    
    Additional paid-in capital
    
    
    358,639
    
    
    
    357,290Distributions and losses in excess of income
    
    
    (128,831
    )
    
    
    (124,321
    )Unearned compensation  restricted shares
    
    
    (2,618
    )
    
    
    (1,428
    )Total shareholders equity
    
    
    227,190
    
    
    
    231,541$
    552,741
    
    
    $
    591,292
 See notes to consolidated financial statements. 3




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BOYKIN LODGING COMPANY 
 CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 and 2003
(unaudited, amounts in thousands, except for per share data)
 2004
    
    2003Revenues:Hotel revenuesRooms
    
    $
    37,760
    
    
    $
    33,873Food and beverage
    
    
    17,528
    
    
    
    15,734Other
    
    
    2,737
    
    
    
    2,665Total hotel revenues
    
    
    58,025
    
    
    
    52,272Lease revenue
    
    
    343
    
    
    
    337Revenues from condominium development and unit sales
    
    
    3,093
    
    
    
    9,810Total revenues
    
    
    61,461
    
    
    
    62,419Expenses:Hotel operating expensesRooms
    
    
    9,305
    
    
    
    8,577Food and beverage
    
    
    12,326
    
    
    
    11,696Other direct
    
    
    1,948
    
    
    
    1,651Indirect
    
    
    19,094
    
    
    
    16,871Management fees to related party
    
    
    1,686
    
    
    
    938Management
fees - other
    
    
    94
    
    
    
    625Total hotel operating expenses
    
    
    44,453
    
    
    
    40,358Property taxes, insurance and other
    
    
    4,262
    
    
    
    4,100Cost of condominium development and unit sales
    
    
    2,999
    
    
    
    6,332Real estate related depreciation and amortization
    
    
    6,794
    
    
    
    6,608Corporate general and administrative
    
    
    2,025
    
    
    
    1,680Impairment of real estate
    
    
    4,300
    
    
    
    Total operating expenses
    
    
    64,833
    
    
    
    59,078Operating income (loss)
    
    
    (3,372
    )
    
    
    3,341Interest income
    
    
    146
    
    
    
    30Other income
    
    
    103
    
    
    
    90Interest expense
    
    
    (3,580
    )
    
    
    (4,025
    )Amortization of deferred financing costs
    
    
    (330
    )
    
    
    (679
    )Minority interest in earnings of joint ventures
    
    
    (33
    )
    
    
    (20
    )Minority interest in loss of operating partnership
    
    
    1,092
    
    
    
    781Equity in loss of unconsolidated joint ventures
    
    
    (731
    )
    
    
    (844
    )Loss before gain on sale/disposal of assets and discontinued operations
    
    
    (6,705
    )
    
    
    (1,326
    )Gain on sale/disposal of assets
    
    
    2,515
    
    
    
    33Loss before discontinued operations
    
    
    (4,190
    )
    
    
    (1,293
    )Discontinued operations:Operating loss from discontinued operations, net of minority interest income of
$84 and $252 for the three months ended March 31, 2004 and 2003, respectively
    
    
    (476
    )
    
    
    (1,420
    )Gain on sale of assets, net of minority interest expense of $237 and $209
for the three months ended March 31, 2004 and 2003, respectively
    
    
    1,344
    
    
    
    1,175Net loss
    
    $
    (3,322
    )
    
    $
    (1,538
    )Preferred dividends
    
    
    (1,188
    )
    
    
    (1,188
    )Net loss attributable to common shareholders
    
    $
    (4,510
    )
    
    $
    (2,726
    )Net loss attributable to common shareholders before discontinued operations per shareBasic
    
    $
    (0.31
    )
    
    $
    (0.14
    )Diluted
    
    $
    (0.31
    )
    
    $
    (0.14
    )Discontinued operations per shareBasic
    
    $
    0.05
    
    
    $
    (0.01
    )Diluted
    
    $
    0.05
    
    
    $
    (0.01
    )Net loss attributable to common shareholders per share (a)Basic
    
    $
    (0.26
    )
    
    $
    (0.16
    )Diluted
    
    $
    (0.26
    )
    
    $
    (0.16
    )Weighted average number of common shares outstandingBasic
    
    
    17,397
    
    
    
    17,317Diluted
    
    
    17,574
    
    
    
    17,413
 (a) Per share amounts may not add due to rounding See notes to consolidated financial statements. 4




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BOYKIN LODGING COMPANY 
 CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2004
(unaudited, dollar amounts in thousands)
 DistributionsAdditional
    
    and LossesPreferred
    
    Common
    
    Paid-In
    
    In Excess of
    
    UnearnedShares
    
    Shares
    
    Capital
    
    Income
    
    Compensation
    
    TotalBalance at December 31, 2003
    
    
    181,000
    
    
    
    17,344,380
    
    
    $
    357,290
    
    
    $
    (124,321
    )
    
    $
    (1,428
    )
    
    $
    231,541Issuance of common shares
    
    
    
    
    
    
    61,627
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted
common share grants
    
    
    
    
    
    
    
    
    
    
    1,435
    
    
    
    
    
    
    
    (1,435
    )
    
    
    Common share purchases for
treasury
    
    
    
    
    
    
    (9,263
    )
    
    
    (86
    )
    
    
    
    
    
    
    
    
    
    
    (86
    )Dividends declared
 $6.5625 per Class A
preferred share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,188
    )
    
    
    
    
    
    
    (1,188
    )Amortization of unearned
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    245
    
    
    
    245Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,322
    )
    
    
    
    
    
    
    (3,322
    )Balance at March 31, 2004
    
    
    181,000
    
    
    
    17,396,744
    
    
    $
    358,639
    
    
    $
    (128,831
    )
    
    $
    (2,618
    )
    
    $
    227,190
 See notes to consolidated financial statements. 5




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BOYKIN LODGING COMPANY 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(unaudited, amounts in thousands)
 2004
    
    2003Cash flows from operating activities:Net loss
    
    $
    (3,322
    )
    
    $
    (1,538
    )Adjustments to reconcile net loss to net cash flow provided
by (used in) operating activities -Gain on sale/disposal of assets
    
    
    (4,096
    )
    
    
    (1,417
    )Impairment of real estate
    
    
    4,300
    
    
    
    Depreciation and amortization
    
    
    7,389
    
    
    
    8,091Amortization of unearned compensation
    
    
    245
    
    
    
    224Equity in loss of unconsolidated joint ventures
    
    
    731
    
    
    
    844Deferred lease revenue
    
    
    140
    
    
    
    187Minority interests
    
    
    (906
    )
    
    
    (804
    )Changes in assets and liabilities -Accounts receivable and inventories
    
    
    26,398
    
    
    
    (4,797
    )Restricted cash
    
    
    2,259
    
    
    
    (3,226
    )Accounts payable and accrued expenses
    
    
    (443
    )
    
    
    1,601Amounts due to/from lessees
    
    
    (52
    )
    
    
    (331
    )Other
    
    
    (1,941
    )
    
    
    1,153Net cash flow provided by (used in) operating activities
    
    
    30,702
    
    
    
    (13
    )Cash flows from investing activities:Investment in unconsolidated joint ventures
    
    
    (263
    )
    
    
    (350
    )Distributions received from unconsolidated joint ventures
    
    
    
    
    
    
    84Improvements and additions to hotel properties, net
    
    
    (12,466
    )
    
    
    (3,029
    )Net proceeds
from sale/disposal of assets
    
    
    24,492
    
    
    
    14,833Net cash flow provided by investing activities
    
    
    11,763
    
    
    
    11,538Cash flows from financing activities:Payments of dividends and distributions
    
    
    (1,188
    )
    
    
    (4,747
    )Net borrowings (repayments) against credit facility
    
    
    (2,000
    )
    
    
    Term note borrowings
    
    
    14,133
    
    
    
    955Repayment of term notes
    
    
    (44,821
    )
    
    
    (14,830
    )Payment of deferred financing costs
    
    
    (78
    )
    
    
    (286
    )Net proceeds from issuance of common shares
    
    
    
    
    
    
    137Cash payment for common share purchases
    
    
    (86
    )
    
    
    (50
    )Distributions to joint venture minority interest partners
    
    
    (65
    )
    
    
    (55
    )Net cash flow used in financing activities
    
    
    (34,105
    )
    
    
    (18,876
    )Net change in cash and cash equivalents
    
    $
    8,360
    
    
    $
    (7,351
    )Cash and cash equivalents, beginning of period
    
    
    14,013
    
    
    
    25,453Cash and cash equivalents, end of period
    
    $
    22,373
    
    
    $
    18,102
 See notes to consolidated financial statements. 6




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BOYKIN LODGING COMPANY 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
(unaudited, dollar amounts in thousands except per share data)
 1. BACKGROUND: Boykin Lodging Company, an Ohio corporation (together with its
subsidiaries Boykin), is a real estate investment trust (REIT) that owns
hotels throughout the United States of America. As of March 31, 2004, Boykin
owned interests in 28 hotels containing a total of 8,288 guest rooms located in
18 states. Formation and Significant Events Boykin was formed and completed an initial public offering (IPO) in 1996
to continue and expand the nearly 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 interests
in Boykins hotels. As of March 31, 2004, Boykin had an 85.3% ownership
interest in and was 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, debt financings,
capital from strategic joint venture partners and cash flow generated from
operations. Consolidated Joint Ventures As of March 31, 2004, Boykin owned three hotels through joint venture
structures with hotel operators. The following table sets forth these joint
ventures: Boykin
    
    JVOwnership
    
    Ownership
    
    
    
    Date of HotelName of Joint Venture
    
    JV Partner
    
    Percentage
    
    Percentage
    
    Hotel Owned Under Joint Venture
    
    PurchaseBoyStar Ventures, L.P.
    
    Interstate Hotels and
Resorts
    
    
    91
    %
    
    
    9
    %
    
    Holiday Inn Minneapolis West
    
    July 1997Shawan Road Hotel L.P.
    
    Davidson Hotel Company
    
    
    91
    %
    
    
    9
    %
    
    Marriotts Hunt Valley Inn
    
    July 1997Boykin San Diego LLC
    
    Outrigger Lodging
Services
    
    
    91
    %
    
    
    9
    %
    
    Hampton Inn San Diego
Airport/Sea World
    
    November 1997
 Unconsolidated Joint Ventures Boykin has a 25% ownership interest in 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. The Boykin/AEW venture has a
75% ownership interest in Boykin Chicago, L.L.C., which owns Hotel 71, located
in downtown Chicago. Boykin directly owns the remaining 25% ownership interest
in Boykin Chicago, L.L.C. thereby resulting in Boykins total ownership
percentage in the hotel of 43.75%. Boykin Chicago L.L.C. has entered into a
management agreement with Boykin Management Company Limited Liability Company
(BMC) to manage Hotel 71. Management and other fees earned by BMC for the
three months ended March 31, 2004 totaled $74. For the three months ended
March 31, 2004, fees of $1 were paid to a wholly-owned subsidiary of BMC for
design services related to capital improvements at the hotel. Boykin has a 50% ownership interest in a joint venture with Concord
Hospitality Enterprises (Concord), a privately owned hotel investment and
management company based in Raleigh, North Carolina. The joint venture owns a
227-room Courtyard by Marriott® in Lyndhurst, New Jersey, which is managed by
Concord. 7




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Because of the non-controlling nature of Boykins ownership interests in
these joint ventures, Boykin accounts for these investments using the equity
method. Boykins carrying value of its investment in the 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, L.L.C. Boykins additional basis is allocated to depreciable assets
and depreciation is recognized on a straight-line basis over 30 years. The following table sets forth the total assets, liabilities, equity and
components of net income (loss), including Boykins share, related to the
unconsolidated joint ventures discussed above as of March 31, 2004 and December
31, 2003 and for the three month periods ended March 31, 2004 and 2003: Boykin/AEW
    
    Boykin/ConcordMarch 31,
    
    December 31,
    
    March 31,
    
    December 31,2004
    
    2003
    
    2004
    
    2003Total assets
    
    $
    67,594
    
    
    $
    68,601
    
    
    $
    22,182
    
    
    $
    22,272Accrued expenses
    
    
    2,987
    
    
    
    2,884
    
    
    
    444
    
    
    
    469Outstanding debt
    
    
    36,971
    
    
    
    37,236
    
    
    
    16,661
    
    
    
    16,728Total liabilities
    
    
    39,958
    
    
    
    40,120
    
    
    
    17,105
    
    
    
    17,197Minority interest
    
    
    6,871
    
    
    
    7,081
    
    
    
    
    
    
    
    Equity
    
    
    20,765
    
    
    
    21,400
    
    
    
    5,077
    
    
    
    5,075Boykins share of equity and minority interest
    
    
    12,159
    
    
    
    12,627
    
    
    
    2,538
    
    
    
    2,537Boykins additional basis in Boykin Chicago, L.L.C.
    
    
    984
    
    
    
    994
    
    
    
    
    
    
    
    Investment in unconsolidated joint venture
    
    $
    13,143
    
    
    $
    13,621
    
    
    $
    2,538
    
    
    $
    2,537
 Boykin/AEW
    
    Boykin/ConcordThree Months
    
    Three MonthsEnded
    
    EndedMarch 31,
    
    March 31,2004
    
    2003
    
    2004
    
    2003Revenues
    
    $
    2,451
    
    
    $
    2,395
    
    
    $
    1,634
    
    
    $
    1,385Hotel operating expenses
    
    
    (2,297
    )
    
    
    (2,276
    )
    
    
    (983
    )
    
    
    (877
    )Real estate related depreciation
    
    
    (774
    )
    
    
    (771
    )
    
    
    (277
    )
    
    
    (304
    )Property taxes, insurance and other
    
    
    (347
    )
    
    
    (130
    )
    
    
    (136
    )
    
    
    (142
    )Operating income (loss)
    
    
    (967
    )
    
    
    (782
    )
    
    
    238
    
    
    
    62Interest and other income
    
    
    8
    
    
    
    
    
    
    
    1
    
    
    
    1Amortization
    
    
    (75
    )
    
    
    (69
    )
    
    
    (22
    )
    
    
    (22
    )Interest expense
    
    
    (412
    )
    
    
    (439
    )
    
    
    (190
    )
    
    
    (205
    )Other
    
    
    
    
    
    
    4
    
    
    
    (25
    )
    
    
    (402
    )Net income (loss) before minority
interest
    
    
    (1,446
    )
    
    
    (1,286
    )
    
    
    2
    
    
    
    (566
    )Boykins share of net income (loss)
    
    
    (732
    )
    
    
    (561
    )
    
    
    1
    
    
    
    (283
    )
 Taxable REIT Subsidiaries Bellboy, Inc. (Bellboy) is a wholly-owned taxable REIT subsidiary
(TRS) of Boykin which, through its subsidiaries, leased 25 of Boykins
properties as of March 31, 2004. Boykin Chicago, L.L.C. and the Boykin/Concord
joint venture each also have TRS entities that lease their properties, 71 E.
Wacker Leasing, Inc. and BoyCon Leasing, Inc., respectively. The joint venture
with Davidson Hotel Company (Davidson) also has formed a TRS, Hunt Valley
Leasing, Inc. (Hunt Valley), which leases the Marriotts Hunt Valley Inn. 8




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As of March 31, 2004, all hotels Boykin had an ownership interest in,
other than the Hampton Inn San Diego Airport/Sea World, were operated under the
TRS structure. The consolidated financial statements include the operating results of the
consolidated hotels under the TRS structure. For the one consolidated hotel
not operated under the TRS structure, lease revenues are recorded within the
consolidated financial statements. Hilton Modification Agreement In connection with the terms of an agreement which Boykin entered into
with Hilton Hotels Corporation (Hilton) during 2003, Hilton ceased management
of Boykins hotel in Yakima, Washington, in February 2004. Simultaneously, the
hotel changed from a Doubletree to a Clarion. At that time, Boykin entered into
an agreement with a regional management company, Chambers Group, to take over
operations of the hotel. The new management agreement has an indefinite life
but is cancelable by Boykin without penalty upon providing 30 days notice. Doubletree Portland Downtown Hotel On March 2, 2004, the City of Portland, through the Portland Development
Commission (PDC), acquired Boykins Doubletree Portland Downtown Hotel in
Portland, Oregon, through its power of eminent domain. Boykin was informed that
the property will be redeveloped for the purpose of student housing, academic,
retail and conference uses for Portland State University. The PDC acquired the
property for its fair market value of $19,700. Approximately $16,870 of the
proceeds were applied to the outstanding balance of Boykins $130,000 term
loan, for which the property served as collateral. The remainder of the net
proceeds was available for general corporate purposes. Additionally, Boykin
sold the related furniture, fixtures and equipment contained within the
property to Portland State University for $2,272. The proceeds from the sale of
the related furniture, fixtures and equipment were deposited into the
furniture, fixtures and equipment reserve fund of the $130,000 term loan.
Boykin recorded a gain on sale/disposal of assets of $1,581 as a result of
these transactions. Hotel Managers As of March 31, 2004, BMC and certain of its subsidiaries managed 24 of
the 28 hotels in which Boykin had 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%). Chambers Group, Concord, Davidson and
Outrigger Lodging Services each manage one property. 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.
Boykin believes that the results of operations contained within the financial
statements reflect all costs of Boykin doing business. These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. Boykin
believes that all adjustments, consisting of normal recurring adjustments and
accruals, considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 2004 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2004. The operations of the hotels have historically been
seasonal. The five hotels located in Florida have historically experienced
their highest occupancy in the first quarter, while the remaining hotels have
historically maintained higher occupancy rates during the second and third
quarters. For further information, refer to the consolidated financial
statements and footnotes thereto included in Boykins annual report on Form
10-K for the year ended December 31, 2003. Certain prior period amounts have
been reclassified to conform to the current period presentation. Condominium Units During 2002, Boykin began construction of a new 92-unit tower, White Sand
Villas, at the Pink Shell Beach Resort. Condominium project revenue and expenses for units under construction are
recognized on the percentage of completion method upon satisfaction of the
following criteria: (a) construction is determined to be beyond a preliminary
stage, (b) the buyer is not entitled to a refund except for nondelivery of the
unit, (c) sufficient units are under binding contract to assure the entire
property will not revert to rental property, (d) sales prices have been
determined to be collectible, and (e) aggregate sales proceeds and costs can be
reasonably estimated. Beginning in 2003, revenue was recognized under
percentage of completion accounting as the project had satisfied the criteria
outlined above. Percentage of completion accounting involves the use of
estimates for the relation of revenues on sold units to total revenues of the
project and for total cost 9




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##### Table of Contents



of the project. The profit margin realized on the White Sand Villas could
change if actual sales prices differ from current estimates and if estimated
costs change due to a change in scope or scheduling of the project or other
factors. Boykin reported revenues of $3,093 and $6,445 and costs of $2,999 and
$4,112 under the percentage of completion method of accounting for the three
month periods ended March 31, 2004 and 2003, respectively. Boykin began closing on the sales of the units during the first quarter of
2004. As of March 31, 2004, 85 of the 91 units under contract
had closed. The sales of the remaining six units under contract closed during April
2004. The amount of costs in excess of the revenue recognized on the White Sand
Villas project were $332 and $518 as of March 31, 2004 and December 31, 2003,
respectively, and are reflected in other assets within the consolidated balance
sheets. The outstanding accounts receivable related to the recognition of
revenue for the White Sand Villas units totaled $4,885 and $32,173 as of March
31, 2004 and December 31, 2003, respectively. Deposits totaling $1,318 and $7,864 at March 31, 2004 and December 31,
2003, respectively, received for the purchase of units in the White Sand Villas
that had not yet closed are included in accounts payable and accrued expenses
on the consolidated balance sheets. A portion of the deposits was available
for use as payment of construction costs. The portion that was not available
is reflected as restricted cash. Investment in Hotel Properties 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, new
hotel construction in markets where the hotels are located or changes in the
expected holding period of the property. 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. In the first quarter of 2004, Boykin identified changes in circumstances,
namely the intended holding period of the property, which indicated that the
carrying value of one of its non-core west coast properties was impaired and
accordingly recorded an impairment charge of $4,300. 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 combination
of comparable property sales, replacement cost and 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, capitalization
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 March 31, 2004 and December
31, 2003, as defined within the provisions of Statement of Financial Accounting
Standards (SFAS) No. 144 Accounting for the Impairment or Disposal of
Long-Lived Assets. Boykin considers assets to be held for sale when they
are under contract, significant non-refundable deposits have been made by the
potential buyer and the assets are immediately available to be sold. Property Insurance Recoveries In 2003, Boykin disposed of certain assets due to water infiltration
remediation activities. Insurance proceeds received in the first quarter of
2004 totaled $2,500 and are recorded as gain on sale/disposal of assets within
the consolidated financial statements. 10




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Stock-based Compensation At March 31, 2004, Boykin had a Long-Term Incentive Plan (LTIP). 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 loss and net loss
per share would have been changed to the pro forma amounts indicated below. Three Months EndedMarch 31,2004
    
    2003Pro Forma
    
    Pro FormaNet loss attributable to common shareholders
    
    $
    (4,510
    )
    
    $
    (2,726
    )Stock-based employee compensation expense
    
    
    (31
    )
    
    
    (32
    )Pro forma net loss attributable to common shareholders
    
    
    (4,541
    )
    
    
    (2,758
    )Pro forma net loss attributable to common
shareholders per share:Basic
    
    $
    (0.26
    )
    
    $
    (0.16
    )Diluted
    
    $
    (0.26
    )
    
    $
    (0.16
    )
 New Accounting Pronouncements In May 2003, the Financial Accounting Standard Board (FASB) issued
Statement of Financial Accounting Standards No. 150, Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity,
which establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its
scope as a liability. The effective date of a portion of the Statement has
been indefinitely postponed by the FASB. Boykin did not enter into new
financial instruments subsequent to May 2003 which would fall within the scope
of this statement. Boykin has identified a consolidated joint venture which
has minority interest amounts totaling $210 at March 31, 2004
that appears to
meet the criteria for liability recognition in accordance with paragraphs 9 and
10 under SFAS 150 due to the finite life of the joint venture arrangements.
Accordingly, if and when the measurements and classification provision of these
paragraphs are adopted, Boykin may be required to reclassify the liquidation
amounts of such minority interests to liabilities with the resulting income
statement effect being classified as a cumulative effect of an accounting
change and subsequent fluctuations in current liquidation amounts recorded
through interest expense. 3. 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. For the three months ended March 31, 2004 and 2003, the weighted
average basic and diluted common shares outstanding were as follows: Three Months EndedMarch 31,2004
    
    2003Basic
    
    
    17,396,744
    
    
    
    17,316,701Effective of dilutive securities:Common stock options
    
    
    73,101
    
    
    
    20,614Restricted share grants
    
    
    103,751
    
    
    
    75,313Diluted
    
    
    17,573,596
    
    
    
    17,412,628
 4. PARTNERSHIP UNITS/MINORITY INTERESTS: A total of 2,718,256 limited partnership units of the Partnership were
issued and outstanding at March 31, 2004 and 2003. The weighted average number
of limited partnership units outstanding for each of the three month periods
ended March 31, 2004 and 2003 was 2,718,256. The minority interest liability is affected by the limited partnership
units outstanding as well as the existence of preferred partnership units which
are owned by Boykin. The preferred partnership units mirror the terms of the
preferred depositary shares outstanding. 11




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##### Table of Contents



5. DISCONTINUED OPERATIONS: The provisions of SFAS No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets require that hotels sold or held for sale be treated as
discontinued operations. As discussed in Note 1, on March 2, 2004, Boykins Doubletree Portland
Downtown Hotel in Portland, Oregon, was acquired by the City of Portland
through its power of eminent domain. During 2003, Boykin sold the Knoxville
Hilton, the Hampton Inn Lake Norman, the Holiday Inn Lake Norman, a hotel in
Springfield, Oregon and the Doubletree Spokane Valley. The assets and liabilities of the Doubletree Portland Downtown Hotel as of
December 31, 2003, and the results of operations of the property through the
2004 disposal date and for the three months ended March 31, 2003, have been
reclassified as discontinued operations in the accompanying financial
statements. The first quarter 2003 results of operations of the five
properties sold during 2003 have also been reclassified as discontinued
operations in the accompanying financial statements. Interest expense and
deferred loan costs have been attributed to the properties, as applicable,
based upon the term loan amounts that were repaid with the proceeds of the
dispositions. The results of operations and the financial position of the applicable
properties were as follows: Three Months EndedMarch 31,2004
    
    2003Revenues
    
    $
    721
    
    
    $
    4,438Hotel operating expenses
    
    
    (748
    )
    
    
    (4,400
    )Management fees to related party
    
    
    (12
    )
    
    
    (31
    )Management fees  other
    
    
    
    
    
    
    (102
    )Property taxes, insurance and other
    
    
    (59
    )
    
    
    (361
    )Other expenses
    
    
    (1
    )
    
    
    (10
    )Interest expense
    
    
    (197
    )
    
    
    (402
    )Real estate related depreciation and amortization
    
    
    (177
    )
    
    
    (641
    )Amortization of deferred financing costs
    
    
    (87
    )
    
    
    (163
    )Loss from discontinued operations
    
    $
    (560
    )
    
    $
    (1,672
    )
 December 31,2003Accounts receivable, net
    
    $
    217Inventories
    
    
    38Other assets
    
    
    266Deferred financing costs, net
    
    
    88Investment in hotel properties, net
    
    
    20,434Total assets
    
    $
    21,043Accounts payable and accrued expenses
    
    $
    647Accounts payable to related party
    
    
    46Term notes payable
    
    
    16,870Total liabilities
    
    $
    17,563
 6. CREDIT FACILITY: As of March 31, 2004, Boykin had a secured, revolving credit facility with
a financial institution which enables Boykin to borrow up to $78,000 subject to
borrowing base and loan-to-value limitations. Boykin had borrowed $69,946 and
$71,945 at March 31, 2004 and December 31, 2003, respectively. The facility
expires in October 2006 and currently bears interest at a floating rate of
LIBOR plus 3.75% (4.88% at March 31, 2004). Boykin is required to pay a fee of
0.375% on the unused portion of the credit facility. The facility was secured
by eight hotel properties with a net carrying value of $102,826 at March 31,
2004 and seven hotels with a net carrying value of $90,518 at December 31,
2003, respectively. 12




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##### Table of Contents



The credit facility requires Boykin, among other things, to maintain a
minimum net worth, a coverage ratio of EBITDA to debt service, a coverage 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 agreement provide certain
restrictions on common share dividends; however, Boykin is entitled to
distribute sufficient dividends to maintain its REIT status. Boykin was in
compliance with its covenants at March 31, 2004. 7. 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 March 31, 2004 and December 31, 2003 was $105,131 and $122,597,
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 requires
principal repayment based on a 25-year amortization schedule. As of March 31,
2004, the loan was secured by six Doubletree hotels with a net carrying value
of $188,963 and, as of December 31, 2003, was secured by seven Doubletree
hotels with a net carrying value of $209,123. 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, interest and real
estate taxes and requires OLP to maintain certain financial reporting
requirements. OLP was in compliance with these requirements at March 31, 2004
and December 31, 2003. Boykin Holding, LLC (BHC), a wholly-owned subsidiary of the Partnership,
has a $108,000 term loan agreement. The outstanding balance as of March 31,
2004 and December 31, 2003 was $91,125. The loan has a maturity date of July
2004 and Boykin has an option to extend the maturity to July of 2005. The loan
was secured by six hotel properties with a net carrying value of $60,968 and
$61,273 at March 31, 2004 and December 31, 2003, respectively. The term loan
bears interest at a rate that fluctuates at LIBOR plus 2.35% (3.45% at March
31, 2004). 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 Boykin 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 March 31, 2004 and December 31, 2003.
Subject to the terms of the loan agreement, BHC has purchased interest
rate protection on the entire outstanding balance of $91,125, to cap the
interest rate at no more than 10.25% through July 2004. The cap had no value
at March 31, 2004. In 2003, White Sand Villas Development LLC, a wholly-owned subsidiary of
Bellboy, closed on a $23,300 construction loan with a bank. The loan, which
had an outstanding balance of $13,222 at December 31, 2003, required principal
payments based upon the closing of White Sand Villas unit sales and was repaid
as of March 31, 2004. The loan bore interest at a rate that fluctuated at
LIBOR plus 2.50%. As a part of normal business activities, Boykin has issued letters of
credit through major banking institutions as required by certain debt and
insurance agreements. As of March 31, 2004, there were no outstanding letters
of credit. As of March 31, 2004, Boykin had not entered into any other
significant off-balance sheet financing arrangements. Maturities of long-term debt at March 31, 2004 were as follows: 2004
    
    $
    93,8412005
    
    
    3,8852006
    
    
    4,1662007
    
    
    4,4482008
    
    
    4,7882009 and thereafter
    
    
    85,128$
    196,256
 13




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8. RELATED PARTY TRANSACTIONS: Management and other fees earned by BMC for the continuing operations of
the consolidated hotels related to provisions within the hotel management
contracts for the three months ended March 31, 2004 and 2003 totaled $1,686 and
$938, respectively. Management fees earned by BMC related to discontinued
operations totaled $12 and $31 for the three month periods ended March 31, 2004
and 2003, respectively. The management agreements between Boykin and BMC were
approved by the independent members of the Board of Directors. As of March 31,
2004 and December 31, 2003, with respect to the consolidated hotels, Boykin had
related party payables to BMC of $2,003 and $991, primarily related to
management fees and reimbursements of expenses on behalf of the hotel
properties. For the three months ended March 31, 2004, Boykin paid a wholly-owned
subsidiary of BMC $92 for design services related to capital improvements at
its consolidated 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
contingent upon the revenues the business receives from Boykin. For the three
months ended March 31, 2004, an additional $21 of sales proceeds was provided
to BMC as a result of purchases made by Boykin. Fees paid to BMC and its subsidiaries for services which are not subject
to management agreements are at market prices as determined by the independent
members of the Board of Directors. The Boards market price determinations are
based on market checks performed by management and outside consultants from
time to time, comparative information provided by BMC, and industry
publications. Boykin believes that the methodologies used for determining the amounts to
be paid to BMC and its subsidiaries for management and other services are
reasonable. 9. STATEMENT OF CASH FLOWS, SUPPLEMENTAL DISCLOSURES: As of March 31, 2004 and December 31, 2003, there were $1,188 of preferred
share dividends which were declared but not paid. Interest paid during the three-month periods ended March 31, 2004 and 2003
was $4,024 and $4,525, respectively. In
the first three months of 2004, Boykin granted 154,000 restricted common shares,
valued at $1,435, under its LongTerm Incentive Plan. 10. 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 does not relate to 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 March 31, 2004, Boykin has
a deferred tax asset of approximately $6,792, prior to any valuation allowance,
related to the assumption of the retained deficit of certain leases upon the
formation of the TRSs as well as the cumulative operating losses of the TRSs
and their subsidiaries since their formation. Boykin has 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
March 31, 2004, the net operating loss carry-forwards have remaining lives of
approximately 18 to 19 years. 14




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Boykin Lodging Company, an Ohio corporation, (Boykin) is a real estate
investment trust (REIT) that currently owns interests in 28 hotels throughout
the United States. Boykin was formed and completed an initial public offering
in 1996 to continue and expand the nearly 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 our hotels. As of March 31, 2004, Boykin had an 85.3% ownership
interest in, is the sole general partner of and does all its business through
the Partnership. 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. FIRST QUARTER HIGHLIGHTS AND OUTLOOK FOR THE REMAINDER OF 2004 Refer to the Results of Operations section below for discussion of our
first quarter 2004 results compared to 2003 results. During the first quarter, the impact of the recovering economy and travel
industry led to a slight increase in our portfolios revenue per available room
(RevPAR) over the prior year, as a result of a 1.0% increase in average daily
rate offset against a slightly smaller decrease in occupancy. In connection with the terms of the agreement that we entered into with
Hilton Hotels Corporation during 2003, Hilton ceased management of our hotel in
Yakima, Washington, in February 2004. Simultaneously, the hotel changed from a
Doubletree to a Clarion. At that time, we entered into an agreement with a
regional management company, Chambers Group, to take over operations of the
hotel. The new management agreement has an indefinite life but is cancelable by
us without penalty upon providing 30 days notice. On March 2, 2004, the City of Portland, through the Portland Development
Commission (PDC), acquired our Doubletree Portland Downtown Hotel in
Portland, Oregon, through its power of eminent domain. We have been told that
the property will be redeveloped for the purpose of student housing, academic,
retail and conference uses for Portland State University. The PDC acquired the
property for its fair market value of $19.7 million. Approximately $16.9
million of the proceeds were applied to the outstanding balance of our $130.0
million term loan, for which the property served as collateral. The remaining
net proceeds were used for general corporate purposes. Additionally, we sold
the related furniture, fixtures and equipment contained within the property to
Portland State University for approximately $2.3 million and the proceeds from
the sale were deposited into the furniture, fixtures and equipment reserve fund
of the loan. The transfers resulted in a gain of approximately $1.6 million. During the quarter, the White Sand Villas hotel condominium tower was
placed into service. The grand opening celebration was held in late March.
During the first quarter, the sales of 85 units closed. The remaining six
units closed in April. We are projecting that the total profit from this
development project will be in excess of $11.5 million. Additionally, as all
unit owners have entered into agreements with the resort to put their units
back to the resort for use as hotel rooms, we expect to continue to receive
income from the operation of these units. We are nearing completion of the architecture and design stage of the
final component to the Pink Shell redevelopment project, which involves tearing
down two low-rise buildings and replacing them with a new 43-unit building,
Captiva Villas. Similar to White Sand Villas, the units in the new building
will be sold as condominiums, with the prospect that the owners would put their
unused room nights back to the resort by contract. Zoning for the new
building, which will contain a full-service fine dining restaurant with a view
of the Gulf of Mexico, has been approved. We started the marketing efforts and
pre-sales of this new building during the first quarter of 2004. We expect to
commence demolition of the existing buildings and construction of the new
building once we have non-cancelable contracts for approximately two-thirds of
the available units and have secured construction financing for the project. In April 2004, the ancillary conference center project at our Doubletree
Portland Lloyd Center hotel was completed and became operational. The physical
characteristics and the service standards within the facility were designed to
meet criteria established by the International Association of Conference
Centers (IACC). Upon completion of the project, the facilities were
inspected by, and awarded membership to, IACC. During the first quarter of 2004, the Indiana Gaming Commission (the
Commission) began to solicit proposals from interested parties to develop and
operate a casino in Orange County, Indiana, where our French Lick Springs
Resort and Spa is located. It is anticipated that the Commission will select
an operator during 2004. We anticipate that a casino opening in Orange County
would increase tourism in the county, leading to greater demand for rooms at
our French Lick Springs Resort and Spa. Opening of a casino remains subject to
many items including identification of a suitable operator, approval of the
operator by the Indiana Gaming Commission and such operators ability to raise
financing to fund construction of a riverboat casino. 15




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##### Table of Contents



The outlook for the remainder of 2004 is uncertain; however, based upon
our year to date results and our current booking trends, we are anticipating
that the second quarter RevPAR for our entire portfolio will be flat
to 2% above the same period last year with the full year 2004 RevPAR
up 1% to 3% from 2003. For the second quarter, we anticipate a range
of a $0.02 net loss to $0.03 of net income attributable to common
shareholders per share. Full-year net losses should range between
$0.73 and $0.53 per share. With that assumption, we expect that our funds from
operations attributable to common shareholders (FFO) could range between
$0.34 and $0.39 per fully-diluted share for the second quarter and
$0.73 and
$0.92 per share for the full year prior to the reduction for
impairment. For a definition of FFO, a reconciliation
of net loss to FFO and why we believe FFO is an important measure to investors
of a REITs financial performance, see Results of Operations section below. During the quarter our Board of Directors declared a dividend on our
preferred shares of $6.5625 per preferred share. The dividends were payable to
shareholders of record as of March 31, 2004 and were paid on April 15, 2004.
The Board did not declare a common share dividend for the first quarter. We
will continue to evaluate the status of a common share dividend; management
will recommend to the Board of Directors resumption of the dividend when and at
a level we believe that our RevPAR and cash flow can support, however, we will
make distributions necessary, if any, to meet REIT requirements. CRITICAL ACCOUNTING POLICIES Investment in Hotel Properties 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 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, new hotel construction in
markets where the hotels are located or changes in the expected holding period
of the property. 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 are equal to
or 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 the first quarter of 2004, we recorded a charge of $4.3 million for
impairment of real estate on one of our non-core west coast hotels as a result
of a change in managements intended holding period of the property. As of
March 31, 2004, we did not believe that there were any factors or circumstances
indicating impairment of any other of our investments in hotel properties. We estimate the fair market values of our properties through a combination
of comparable property sales, replacement cost and 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 discussed within
this Quarterly Report on Form 10-Q. Revenue recognition - Percentage of Completion In 2003, we began recognizing revenue related to the White Sand Villas
project under the percentage of completion method. Condominium project revenue
and expenses are recognized on the percentage of completion method upon
satisfaction of the following criteria: (a) construction is determined to be
beyond a preliminary stage, (b) the buyer is not entitled to a refund except
for nondelivery of the unit, (c) sufficient units are under binding contract to
assure the entire property will not revert to rental property, (d) sales prices
have been determined to be collectible, and (e) aggregate sales proceeds and
costs can be reasonably estimated. Starting in 2003 and during 2004, revenue
was recognized under percentage of completion accounting as the project had
satisfied the criteria outlined above. Percentage of completion accounting
involves the use of estimates for the relation of revenues on sold units to
total revenues of the project and for total cost of the project. The profit
realized on the White Sand Villas could change if actual sales prices differ
from current estimates and if estimated costs change due to a change in scope
or scheduling of the project or other factors. 16




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##### Table of Contents



FINANCIAL CONDITION March 31, 2004 Compared to December 31, 2003 As a result of the progress made towards completion of the White Sand
Villas and the closing of the sale of 85 of the available units during the
first quarter, the outstanding accounts receivable related to the recognition
of revenue for the units based upon the percentage of completion method
decreased in excess of $27 million. Release of restricted cash related to
deposits made on the pre-sales (approximately $3.7 million at December 31,
2003) and the remaining proceeds from the closing of the sales of the 85 units
were used to repay the construction loan related to the project ($13.2 million
outstanding as of December 31, 2003) as well as to provide cash for general
corporate purposes. Additionally, approximately $6.5 million of payables
related to deposits received for pre-sales (whether or not used to fund
construction) were released upon closing of the units. In accordance with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, the assets and liabilities of the Doubletree Portland
Downtown Hotel as of December 31, 2003 have been classified as discontinued
operations in the accompanying financial statements. As such, the only
material changes in our financial condition as a result of the disposal of the
hotel in the first quarter has been the removal of these segregated assets and
liabilities and the receipt of the cash in excess of the paydown of the related
$130.0 million loan. RESULTS OF OPERATIONS Quarter Ended March 31, 2004 Compared to Quarter Ended March 31, 2003 Total revenues from continuing operations decreased 1.5% to $61.5 million
for the first quarter 2004 versus $62.4 million for the same period in 2003.
The overall decrease is primarily due to the $6.7 million decrease in revenues
from condominium development and unit sales as a result of the near completion
of the White Sand Villas development project in 2004 and the completion of
sales of Sanibel View Villas units during 2003. Hotel revenues for the three
months ended March 31, 2004 were $58.0 million, an 11.0% increase from $52.3
million in hotel revenues for the same period in 2003. This increase resulted
primarily as a result of the inclusion of $4.8 million of revenues related to
our Marco Island property, which was purchased in the third quarter of 2003.
The remaining increase can be attributed to the slight increase in RevPAR and
increases in food and beverage revenues. For further information, see the
table below which illustrates the key operating statistics of the hotels within
our portfolio, including RevPAR. Hotel operating profit margins of the 25 consolidated hotels under the TRS
structure for the first quarter was 23.4%, an increase from the 22.8% hotel
operating profit for the 24 consolidated hotels under the TRS structure for the
first quarter of 2003. Excluding the contribution made by the Marco Island
property in 2004, the hotel operating profit for the remaining consolidated
hotels totaled 21.7%. Consistent with our peers, we continue to experience
increases in payroll and related employee costs and benefits, insurance, food
and energy. Cost of condominium development and unit sales decreased from $6.3 million
for the first quarter of 2003 to $3.0 million for the first quarter of 2004 as
a result of the near completion of the White Sand Villas project as well as the
completion of the sales of the Sanibel View Villas units at our Pink Shell
Beach Resort in 2003. Corporate general and administrative expenses increased $0.3 million over
prior year due to increases in payroll and staffing levels, directors fees and
expenses, including directors and officers insurance, and legal fees. These
additional costs had been anticipated to comply with new federal laws and
regulations addressing corporate governance issues and with the new listing
requirements of the New York Stock Exchange.
We anticipate that we will continue to incur such costs. In
the first quarter of 2004, Boykin changed the intended holding period
of one of its non-core west coast properties, which indicated that the
carrying value of the property was impaired and
accordingly recorded an impairment charge of $4.3 million. Interest expense from continuing operations decreased from $4.0 million to
$3.6 million from first quarter 2003 to 2004 primarily as a result of our
weighted average interest rate of 5.2% at March 31, 2004 being significantly
lower than the 6.6% rate as of the first quarter of 2003. Slightly offsetting
this is an increase in the weighted average outstanding debt during 2004. The
first quarter 2004 experienced a significant decrease in amortization of
deferred financing costs as a result of the replacement of the previously
existing credit facility and $45.0 million term loan with a new credit facility
in October 2003 (the $78.0 million credit facility) which has approximately $2
million less of deferred costs to be amortized. In the third quarter of 2003, we disposed of certain assets due to water
infiltration remediation activities. Insurance proceeds received in the first
quarter of 2004 totaled $2.5 million and are recorded as gain on sale/disposal
of assets within the consolidated financial statements. 17




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As a result of the above, the first quarter 2004 resulted in a net loss
before discontinued operations of $4.2 million compared to the same period last
year when we experienced a net loss of $1.3 million. In accordance with SFAS No. 144, the results of operations of the
Doubletree Portland Downtown Hotel through the disposal date and for the three
months ended March 31, 2003, have been classified as discontinued operations in
the accompanying financial statements. Additionally, the first quarter 2003
results of operations of the five properties sold during 2003 have also been
reclassified as discontinued operations in the accompanying financial
statements. Please refer to note 5 of our Notes to Consolidated Financial
Statements included within this Quarterly Report on Form 10-Q for a summary of
such operations. FFO 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 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. 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. FFO
does not represent cash generated from operating activities as determined by
GAAP and should not be considered as an alternative to GAAP net income as an
indication of our financial performance or to cash flow from operating
activities as determined by GAAP as a measure of our liquidity, nor is it
indicative of funds available to fund our cash needs, including our ability to
make cash distributions. FFO 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. The following is a reconciliation between net loss and FFO for the three
months ended March 31, 2004 and 2003, respectively (in thousands): Three Months EndedMarch 31,2004
    
    2003Net loss
    
    $
    (3,322
    )
    
    $
    (1,538
    )Minority interest
    
    
    (906
    )
    
    
    (804
    )Gain on sale/disposal of assets
    
    
    (4,096
    )
    
    
    (1,417
    )Real estate related depreciation and amortization
    
    
    6,794
    
    
    
    6,608Real estate related depreciation and amortization
included in discontinued operations
    
    
    177
    
    
    
    641Equity in loss of unconsolidated joint ventures
    
    
    731
    
    
    
    844FFO adjustment related to joint ventures
    
    
    (197
    )
    
    
    (184
    )Preferred dividends declared
    
    
    (1,188
    )
    
    
    (1,188
    )Funds from operations after preferred dividends
    
    $
    (2,007
    )
    
    $
    2,962Less: Funds from operations related to minority interest
    
    
    (271
    )
    
    
    402Funds from operations attributable to common shareholders
    
    $
    (1,736
    )
    
    $
    2,560
 FFO was negatively impacted by the $4.3 million impairment charge recorded
during the three months ended March 31, 2004. 18




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##### Table of Contents



EBITDA 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. EBITDA does not represent cash
generated from operating activities as determined by GAAP and should not be
considered as an alternative to GAAP net income as an indication of our
financial performance or to cash flow from operating activities as determined
by GAAP as a measure of our liquidity, nor is it indicative of funds available
to fund our cash needs, including our ability to make cash distributions.
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. The following is a reconciliation between operating income (loss) and
EBITDA for the three months ended March 31, 2004 and 2003, respectively (in
thousands): Three Months EndedMarch 31,2004
    
    2003Operating income (loss)
    
    $
    (3,372
    )
    
    $
    3,341Interest income
    
    
    146
    
    
    
    30Other income
    
    
    103
    
    
    
    90Real estate related depreciation and amortization
    
    
    6,794
    
    
    
    6,608EBITDA attributable to discontinued operations
    
    
    (98
    )
    
    
    (466
    )Companys share of EBITDA of unconsolidated joint
ventures
    
    
    178
    
    
    
    179EBITDA applicable to joint venture
minority interest
    
    
    (44
    )
    
    
    (30
    )EBITDA
    
    $
    3,707
    
    
    $
    9,752
 EBITDA was negatively impacted by the $4.3 million impairment charge
recorded during the three months ended March 31, 2004. Key Hotel Operating Statistics The following table illustrates key operating statistics of our portfolio
for the three months ended March 31, 2004 and 2003: Three Months EndedMarch 31,2004
    
    2003All Hotels (28 hotels) (a) (b)Hotel revenues (in thousands)
    
    $
    63,313
    
    
    $
    61,822RevPAR
    
    $
    56.53
    
    
    $
    56.35Occupancy
    
    
    57.2
    %
    
    
    57.6
    %Average daily rate
    
    $
    98.83
    
    
    $
    97.78Comparable Hotels (24 hotels) (c)Hotel revenues (in thousands)
    
    $
    53,240
    
    
    $
    52,267RevPAR
    
    $
    52.70
    
    
    $
    53.17Occupancy
    
    
    56.8
    %
    
    
    57.7
    %Average daily rate
    
    $
    92.73
    
    
    $
    92.08
  (a)
    
    Includes all hotels owned or partially owned by Boykin as of March 31,
2004.(b)
    
    Results calculated including 35 lock-out rooms at the Radisson Suite
Beach Resort on Marco Island.(c)
    
    Includes all consolidated hotels operated under the TRS structure for all
periods presented and owned or partially owned by Boykin as of March 31,
2004. 19




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LIQUIDITY AND CAPITAL RESOURCES: Our principal source of cash to meet our cash requirements, including
dividends to shareholders, is our share of the Partnerships cash flow from the
operations of the hotels and condominium sales. Cash flow from hotel
operations is subject to all operating risks common to the hotel industry,
including, but not limited to:  
    
    Competition for guests from other hotels;
    
    Adverse effects of general and local economic conditions;
    
    Dependence on demand from business and leisure travelers, which may
be seasonal and which may be adversely impacted by health and
safety-related concerns;
    
    Increases in energy costs, airline fares, and other expenses related to travel, which may deter traveling;
    
    Impact of the financial difficulties of the airline industry;
    
    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. The cash flow from condominium development is subject to risk factors common to real estate sales and development,
including, but not limited to:  
    
    Competition from other condominium projects;
    
    Construction delays;
    
    Reliance on contractors and subcontractors;
    
    Construction cost overruns; and
    
    The ability of the condominium purchasers to secure financing. As of March 31, 2004, we had $22.4 million of unrestricted cash and cash
equivalents and $13.1 million of restricted cash for the payment of capital
expenditures, real estate taxes, interest and insurance, and deposits received
on pre-sales of White Sand Villas condominium units which had not yet closed.
There were outstanding borrowings at quarter end totaling $69.9 million against
our credit facility and $196.3 million against our two term notes payable. In
March 2004, the balance of the $130.0 million term loan was reduced by
approximately $16.9 million with proceeds from the disposition of the
Doubletree Portland Downtown. As of March 31, 2004, the outstanding balance on the $23.3 million
construction loan related to White Sand Villas was fully repaid. Proceeds from
the sales of the individual units were applied to the outstanding balance. We currently have a $78.0 million credit facility ($69.9 million
outstanding as of March 31, 2004) to fund acquisitions of additional hotels,
renovations and capital expenditures, and for our working capital needs,
subject to limitations contained in the credit agreement. During the first
quarter of 2004, we added a previously uncollateralized property with
a net carrying value of $13.0 million as security
for the facility. The addition of the collateral increased the availability
under the facility. For information relating to the terms of our credit facility, our term
notes and our construction loan, please see Notes 6 and 7, respectively, of the
Notes to Consolidated Financial Statements of Boykin Lodging Company included
in this Quarterly Report on Form 10-Q. Our $130.0 million and $108.0 million term notes payable and the
construction loan are property-specific mortgages and have only financial
reporting covenants. The credit facility contains covenants regarding overall
leverage and debt service coverage. As of March 31, 2004, we are in compliance
with such covenants. 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 the continued uncertainty of the hotel industry and its impact on
the results of our operations, the Board of Directors did not declare a
dividend for the common shareholders for the first quarter of 2004. Pursuant
to the terms of our credit facility, we are limited to distributing not more
than 75% of FFO attributable to common shareholders and only if the outstanding
balance has been reduced to $60.0 million. The credit facility does not limit
distributions to preferred shareholders or distributions required for us to
maintain our REIT status. Currently, we expect to continue to pay a regular
quarterly dividend on our preferred shares and anticipate that such dividends
will be sufficient 20




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##### Table of Contents



for us to maintain our REIT status. The resumption of a common dividend will
depend upon the improving performance of our hotels and other factors that our
Board of Directors considers relevant. We have considered our short-term (defined as one-year or less) liquidity
needs and the adequacy of our estimated cash flow from operations and other
expected liquidity sources to meet these needs. We expect our principal
short-term liquidity needs will be to fund normal recurring expenses, debt
service requirements, distributions on the preferred shares and any minimum
distribution required to maintain our REIT status. We anticipate that these
needs will be met with cash flows provided by operating activities, using
availability under the credit facility, proceeds from dispositions of non-core
assets and proceeds from additional financings. We expect to meet long-term (defined as greater than one year) liquidity
requirements such as property acquisitions, scheduled debt maturities, major
renovations, development projects and other nonrecurring capital improvements
utilizing cash flow from operations, proceeds from dispositions of non-core
assets, additional debt financings and preferred or common equity offerings.
We expect to acquire or develop additional hotel properties only as suitable
opportunities arise, and we will not undertake acquisition or development of
properties unless stringent criteria have been met. Capital Projects For the three months ended March 31, 2004, we completed approximately
$12.5 million of capital improvements at our hotels and our corporate
headquarters. This amount included planned refurbishments and replacements at
selected existing hotels as well as revenue generating projects, such as the
development of an ancillary conference center within our Doubletree Portland
Lloyd Center hotel. We anticipate spending an additional $16 to $20 million
related to capital expenditures for the remainder of 2004. We expect to use
cash available from operations and restricted capital expenditure reserves, as
well as borrowings under our line of credit, to fund these costs. With regard to the planned Captiva Villas project, similar to Sanibel View
Villas and White Sand Villas, the units in the tower will be sold as
condominiums, with the prospect that the owners would put their unused room
nights back to the resort by contract, which will provide us with continuing
income. Subject to achieving a sufficient level of pre-sales, the project is
currently expected to commence in late summer 2004. We are currently talking
to various lenders regarding our financing options for the construction of
Captiva Villas. Off Balance Sheet Arrangements We believe that neither Boykin nor its unconsolidated entities have
entered into any off balance sheet arrangements which would have a current or
future impact on our financial condition, changes in financial condition,
results of operations, liquidity or capital resources in ways which would be
considered material to our investors. 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 five 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, average daily rate 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,
and 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. 21




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##### Table of Contents



ITEM 3. 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 the $78.0
million secured credit facility, the $108.0 million secured term loan and our
share of floating rate debt under our unconsolidated joint ventures of $24.5
million. 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 typical of fixed
rate loans. Our $130.0 million, 6.9% fixed rate term note allows us to
minimize our interest rate risk exposure. Approximately 39% of our outstanding
debt at March 31, 2004, was fixed-rate in nature, compared with 41% at December
31, 2003. The weighted average interest rate of our variable rate debt and
total debt as of March 31, 2004 was 4.1% and 5.2%, respectively. 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. As of March 31, 2004, we do not
have any 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 because
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 $0.4 million, based upon the balances outstanding on our
variable rate instruments at March 31, 2004. Using sensitivity analysis to measure the potential change in fair value
of financial instruments based on changes in interest rates, we have determined
that a hypothetical increase of 1% in the interest rates for instruments with
similar maturities would decrease the fair market value of our fixed rate debt
by $3.6 million as compared with the fair market value at March 31, 2004, which
was approximately $3.1 million higher than the carrying value. 
 ITEM 4. CONTROLS AND PROCEDURES As of March 31, 2004, an evaluation was performed under the supervision
and with the participation of the principal executive and financial officers
with regards to the effectiveness of our disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e)). Based upon the evaluation, they
concluded that our disclosure controls and procedures were effective in
ensuring that material information required to be disclosed in this Quarterly
Report was recorded, processed, summarized and reported on a timely basis. There were no changes in our internal control over financial reporting
during the quarter ended March 31, 2004 that materially affected or are
reasonably likely to materially affect our internal control over financial
reporting. 
 PART II 
 ITEM 1. 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 position, results of operations or liquidity. 
 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None. 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 22




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##### Table of Contents



ITEM 5. OTHER INFORMATION None. 
 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a)
    
    Exhibits3.1
    
    
    (a)
    
    Amended and Restated Articles of Incorporation, as amended3.2
    
    
    (b)
    
    Code of Regulations3.3
    
    
    (e)
    
    Amendment to the Companys Articles of Incorporation for the
10-1/2% Class A Cumulative Preferred shares, Series 2002-A4.1
    
    
    (b)
    
    Specimen Share Certificate4.2
    
    
    (a)
    
    Dividend Reinvestment and Optional Share Purchase Plan4.3
    
    
    (c)
    
    Shareholder Rights Agreement, dated as of May 25,
1999, between Boykin Lodging Company and National City Bank, as
rights agent4.3a
    
    
    (d)
    
    Amendment to Shareholder Rights Agreement dated
as of December 31, 2001, between Boykin Lodging Company and
National City Bank4.4
    
    
    (e)
    
    Form of Preferred Share Certificate4.5
    
    
    (e)
    
    Form of Depositary Receipt31.1
    
    
    
    
    Certification Pursuant to Rule 13a-14(a)31.2
    
    
    
    
    Certification Pursuant to Rule 13a-14(a)32.1
    
    
    
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
200232.2
    
    
    
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002(a)
    
    Incorporated by reference form 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 as Exhibit 1 from
Boykins Registration Statement on Form 8-A filed on June
10, 1999.(d)
    
    Incorporated by reference from Boykins Form 8-K filed on
January 14, 2002.(e)
    
    Incorporated by reference from Boykins Registration
Statement on Form 8-A filed on October 3, 2002.(b)
    
    Reports on Form 8-KDuring the quarter ended March 31, 2004, Boykin filed two
Current Reports on Form 8-K as follows:
 Date
    
    Items Reported OnFebruary 24, 2004
    
    Item 7  Financial Statements and Exhibits
Item 12  Results of Operations and Financial Condition
Furnished the Companys fourth quarter and year ended
December 31, 2003 earnings releaseMarch 17, 2004
    
    Item 2  Acquisition or Disposition of Assets
Item 7  Financial Statements, Pro forma Financial
Information and Exhibits
Furnished required information regarding disposition of
the Doubletree Portland Downtown Hotel
 23




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##### Table of Contents



FORWARD LOOKING STATEMENTS This Form 10-Q contains statements that constitute forward-looking
statements. Those statements appear in a number of places in this Form 10-Q
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-Q 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. 
 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized. May 6, 2004
    
    /s/ Robert W. BoykinRobert W. BoykinChairman of the Board and Chief Executive Officer(Principal Executive Officer)May 6, 2004
    
    /s/ Shereen P. JonesShereen P. JonesExecutive Vice President, Chief Financial and Investment Officer(Principal Accounting Officer)




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##### Table of Contents



EXHIBIT INDEX 3.1
    
    (a)
    
    Amended and Restated Articles of Incorporation, as amended3.2
    
    (b)
    
    Code of Regulations3.3
    
    (e)
    
    Amendment to the Companys Articles of Incorporation for the
10-1/2% Class A Cumulative Preferred shares, Series 2002-A4.1
    
    (b)
    
    Specimen Share Certificate4.2
    
    (a)
    
    Dividend Reinvestment and Optional Share Purchase Plan4.3
    
    (c)
    
    Shareholder Rights Agreement, dated as of May 25,
1999, between Boykin Lodging Company and National City Bank, as
rights agent4.3a
    
    (d)
    
    Amendment to Shareholder Rights Agreement dated
as of December 31, 2001, between Boykin Lodging Company and
National City Bank4.4
    
    (e)
    
    Form of Preferred Share Certificate4.5
    
    (e)
    
    Form of Depositary Receipt31.1
    
    
    
    Certification Pursuant to Rule 13a-14(a)31.2
    
    
    
    Certification Pursuant to Rule 13a-14(a)32.1
    
    
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
200232.2
    
    
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002(a)
    
    Incorporated by reference form 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 as Exhibit 1 from
Boykins Registration Statement on Form 8-A filed on June
10, 1999.(d)
    
    Incorporated by reference from Boykins Form 8-K filed on
January 14, 2002.(e)
    
    Incorporated by reference from Boykins Registration
Statement on Form 8-A filed on October 3, 2002.