##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 001-11975
 Boykin Lodging Company
  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)
 (Registrants telephone number, including area code)
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
 o þ




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONITEM 1. 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 II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSITEM 1A. RISK FACTORSITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSITEM 3. DEFAULTS UPON SENIOR SECURITIESITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITSSIGNATURESEXHIBIT INDEXEX-10.1EX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 BOYKIN LODGING COMPANY
INDEX TO FINANCIAL STATEMENTS
 Consolidated Balance Sheets as of June 30, 2006 and December 31, 2005 (unaudited)
    
    
    3Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2006 and 2005
(unaudited)
    
    
    4Consolidated Statement of Shareholders Equity for the Six Months Ended June 30, 2006 (unaudited)
    
    
    5Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2006 and 2005 (unaudited)
    
    
    6Notes to Consolidated Financial Statements June 30, 2006 (unaudited)
    
    
    7




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##### Table of Contents



BOYKIN LODGING COMPANY
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2006 AND DECEMBER 31, 2005
(unaudited, dollar amounts in thousands)
 June 30,
    
    
    December 31,2006
    
    
    2005ASSETSInvestment in hotel properties
    
    $
    520,377
    
    
    $
    483,334Accumulated depreciation
    
    
    (146,034
    )
    
    
    (135,667
    )Investment in hotel properties, net
    
    
    374,343
    
    
    
    347,667Cash and cash equivalents
    
    
    12,241
    
    
    
    16,290Restricted cash
    
    
    9,460
    
    
    
    31,699Accounts receivable, net of allowance for doubtful accounts of $292
and $340 as of June 30, 2006 and December 31, 2005, respectively
    
    
    7,955
    
    
    
    6,621Inventories
    
    
    1,174
    
    
    
    1,223Deferred financing costs and other, net
    
    
    1,272
    
    
    
    1,933Investment in unconsolidated joint ventures
    
    
    1,412
    
    
    
    1,410Other assets
    
    
    16,349
    
    
    
    12,368Assets related to discontinued operations, net
    
    
    28,216
    
    
    
    28,594$
    452,422
    
    
    $
    447,805LIABILITIES AND SHAREHOLDERS EQUITYBorrowings against credit facility
    
    $
    34,000
    
    
    $
    40,000Term notes payable
    
    
    103,917
    
    
    
    98,529Accounts payable and accrued expenses
    
    
    44,370
    
    
    
    36,391Accounts payable to related party
    
    
    934
    
    
    
    962Dividends/distributions payable
    
    
    1,188
    
    
    
    1,188Minority interest in joint ventures
    
    
    2,649
    
    
    
    777Minority interest in operating partnership
    
    
    13,025
    
    
    
    13,946Liabilities related to discontinued operations
    
    
    1,301
    
    
    
    1,462SHAREHOLDERS EQUITY:Preferred shares, without par value; 10,000,000 shares authorized;
181,000 shares issued and outstanding as of June 30, 2006 and
December 31, 2005 (liquidation preference of $45,250)
    
    
    
    
    
    
    Common shares, without par value; 40,000,000 shares authorized;
17,687,567 and 17,594,081 shares issued and outstanding as of
June 30, 2006 and December 31, 2005, respectively
    
    
    
    
    
    
    Additional paid-in capital
    
    
    361,068
    
    
    
    361,309Distributions and losses in excess of income
    
    
    (107,964
    )
    
    
    (104,261
    )Unearned compensation  restricted shares
    
    
    (2,066
    )
    
    
    (2,498
    )Total shareholders equity
    
    
    251,038
    
    
    
    254,550$
    452,422
    
    
    $
    447,805
  3




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BOYKIN LODGING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006 and 2005
(unaudited, amounts in thousands except for per share data)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues:Hotel
revenuesRooms
    
    $
    33,808
    
    
    $
    32,303
    
    
    $
    65,057
    
    
    $
    61,192Food and beverage
    
    
    15,240
    
    
    
    15,456
    
    
    
    29,814
    
    
    
    28,960Other
    
    
    1,977
    
    
    
    3,352
    
    
    
    3,806
    
    
    
    9,276Total hotel revenues
    
    
    51,025
    
    
    
    51,111
    
    
    
    98,677
    
    
    
    99,428Other operating revenue
    
    
    41
    
    
    
    40
    
    
    
    74
    
    
    
    123Revenues from condominium development and unit sales
    
    
    242
    
    
    
    
    
    
    
    1,248
    
    
    
    Total revenues
    
    
    51,308
    
    
    
    51,151
    
    
    
    99,999
    
    
    
    99,551Expenses:Hotel operating expensesRooms
    
    
    8,080
    
    
    
    7,681
    
    
    
    15,699
    
    
    
    14,687Food and beverage
    
    
    9,909
    
    
    
    10,089
    
    
    
    19,630
    
    
    
    19,285Other direct
    
    
    1,343
    
    
    
    1,379
    
    
    
    2,650
    
    
    
    2,676Indirect
    
    
    15,628
    
    
    
    14,921
    
    
    
    30,804
    
    
    
    29,174Management fees to related party
    
    
    1,246
    
    
    
    1,570
    
    
    
    2,785
    
    
    
    3,100Total hotel operating expenses
    
    
    36,206
    
    
    
    35,640
    
    
    
    71,568
    
    
    
    68,922Property taxes, insurance and other
    
    
    4,635
    
    
    
    4,096
    
    
    
    9,070
    
    
    
    8,395Cost of condominium development and unit sales
    
    
    216
    
    
    
    
    
    
    
    1,124
    
    
    
    Real estate related depreciation and amortization
    
    
    5,179
    
    
    
    5,470
    
    
    
    10,393
    
    
    
    10,941Corporate general and administrative
    
    
    3,995
    
    
    
    3,821
    
    
    
    7,088
    
    
    
    6,084Total operating expenses
    
    
    50,231
    
    
    
    49,027
    
    
    
    99,243
    
    
    
    94,342Operating income
    
    
    1,077
    
    
    
    2,124
    
    
    
    756
    
    
    
    5,209Interest income
    
    
    92
    
    
    
    422
    
    
    
    597
    
    
    
    434Other income
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    Interest expense
    
    
    (2,724
    )
    
    
    (3,015
    )
    
    
    (5,617
    )
    
    
    (6,198
    )Amortization of deferred financing costs
    
    
    (473
    )
    
    
    (286
    )
    
    
    (939
    )
    
    
    (639
    )Minority interest in (earnings) loss of joint ventures
    
    
    6
    
    
    
    
    
    
    
    (9
    )
    
    
    Minority interest in (income) loss of operating partnership
    
    
    561
    
    
    
    392
    
    
    
    1,324
    
    
    
    (1,918
    )Equity in income of unconsolidated joint ventures including gain on sale
    
    
    209
    
    
    
    93
    
    
    
    212
    
    
    
    11,159Income (loss) before gain on sale/disposal of assets and discontinued operations
    
    
    (1,252
    )
    
    
    (270
    )
    
    
    (3,660
    )
    
    
    8,047Gain on sale/disposal of assets
    
    
    6
    
    
    
    38
    
    
    
    6
    
    
    
    6,914Income (loss) before discontinued operations
    
    
    (1,246
    )
    
    
    (232
    )
    
    
    (3,654
    )
    
    
    14,961Discontinued operations:Discontinued operations, net of operating partnership minority interest
expense of $133 and $403 for the three and six months ended June 30, 2006
and $1,303 and $1,426 for the three and six months ended June 30, 2005,
respectively
    
    
    771
    
    
    
    7,459
    
    
    
    2,327
    
    
    
    8,158Net income (loss)
    
    $
    (475
    )
    
    $
    7,227
    
    
    $
    (1,327
    )
    
    $
    23,119Preferred dividends
    
    
    (1,188
    )
    
    
    (1,188
    )
    
    
    (2,376
    )
    
    
    (2,376
    )Net income (loss) attributable to common shareholders
    
    $
    (1,663
    )
    
    $
    6,039
    
    
    $
    (3,703
    )
    
    $
    20,743Net income (loss) attributable to common shareholders before discontinued
operations per shareBasic
    
    $
    (0.14
    )
    
    $
    (0.08
    )
    
    $
    (0.34
    )
    
    $
    0.72Diluted
    
    $
    (0.14
    )
    
    $
    (0.08
    )
    
    $
    (0.34
    )
    
    $
    0.71Discontinued operations per shareBasic
    
    $
    0.04
    
    
    $
    0.43
    
    
    $
    0.13
    
    
    $
    0.47Diluted
    
    $
    0.04
    
    
    $
    0.42
    
    
    $
    0.13
    
    
    $
    0.46Net income (loss) attributable to common shareholders per share (a)Basic
    
    $
    (0.09
    )
    
    $
    0.34
    
    
    $
    (0.21
    )
    
    $
    1.18Diluted
    
    $
    (0.09
    )
    
    $
    0.34
    
    
    $
    (0.21
    )
    
    $
    1.17Weighted average number of common shares outstandingBasic
    
    
    17,688
    
    
    
    17,544
    
    
    
    17,688
    
    
    
    17,539Diluted
    
    
    17,876
    
    
    
    17,789
    
    
    
    17,926
    
    
    
    17,737
 
 (a)
    
    Per share amounts may not add due to rounding.  4




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BOYKIN LODGING COMPANY
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2006
(unaudited, dollar amounts in thousands except for per share data)
 DistributionsAdditional
    
    
    and LossesPreferred
    
    
    Common
    
    
    Paid-In
    
    
    In Excess of
    
    
    UnearnedShares
    
    
    Shares
    
    
    Capital
    
    
    Income
    
    
    Compensation
    
    
    TotalBalance at December 31, 2005
    
    
    181,000
    
    
    
    17,594,081
    
    
    $
    361,309
    
    
    $
    (104,261
    )
    
    $
    (2,498
    )
    
    $
    254,550Vesting of restricted common share
grants
    
    
    
    
    
    
    113,327
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common share purchases for treasury
    
    
    
    
    
    
    (19,841
    )
    
    
    (241
    )
    
    
    
    
    
    
    
    
    
    
    (241
    )Dividends declared
 $13.125 per Class A preferred share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,376
    )
    
    
    
    
    
    
    (2,376
    )Amortization of unearned compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    432
    
    
    
    432Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,327
    )
    
    
    
    
    
    
    (1,327
    )Balance at June 30, 2006
    
    
    181,000
    
    
    
    17,687,567
    
    
    $
    361,068
    
    
    $
    (107,964
    )
    
    $
    (2,066
    )
    
    $
    251,038
  5




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BOYKIN LODGING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND 2005
(unaudited, amounts in thousands)
 2006
    
    
    2005Cash flows from operating activities:Net income (loss)
    
    $
    (1,327
    )
    
    $
    23,119Adjustments to reconcile net income (loss) to net cash
flow provided
by operating activities Gain on sale/disposal of assets
    
    
    (678
    )
    
    
    (15,098
    )Depreciation and amortization
    
    
    11,705
    
    
    
    12,594Charges related to equity based compensation
    
    
    432
    
    
    
    1,165Equity in income of unconsolidated joint ventures
including gain on sale
    
    
    (212
    )
    
    
    (11,159
    )Deferred lease revenue
    
    
    
    
    
    
    630Minority interests
    
    
    (912
    )
    
    
    3,389Changes in
assets and liabilities 
Accounts receivable and inventories
    
    
    (887
    )
    
    
    3,577Accounts payable and accrued expenses
    
    
    7,790
    
    
    
    (1,553
    )Amounts due to/from lessees
    
    
    (3
    )
    
    
    (291
    )Other
    
    
    (4,477
    )
    
    
    (234
    )Net cash flow provided by operating activities
    
    
    11,431
    
    
    
    16,139Cash flows from investing activities:Distributions received from unconsolidated joint ventures
    
    
    210
    
    
    
    23,697Changes in restricted cash
    
    
    22,239
    
    
    
    3,229Improvements and additions to hotel properties, net
    
    
    (37,096
    )
    
    
    (7,479
    )Net proceeds from sale of assets
    
    
    690
    
    
    
    34,630Net cash flow provided by (used in) investing activities
    
    
    (13,957
    )
    
    
    54,077Cash flows from financing activities:Payments of dividends and distributions
    
    
    (2,376
    )
    
    
    (2,376
    )Net borrowings (repayments) against credit facility
    
    
    (6,000
    )
    
    
    33,554Term note borrowings
    
    
    7,800
    
    
    
    Repayment of term notes
    
    
    (2,412
    )
    
    
    (93,043
    )Payment of deferred financing costs
    
    
    (157
    )
    
    
    (1,394
    )Net proceeds from issuance of common shares
    
    
    
    
    
    
    118Cash payment for common share purchases
    
    
    (241
    )
    
    
    (142
    )Contributions from (distributions to) to joint venture
minority interest partners, net
    
    
    1,863
    
    
    
    (110
    )Net cash flow used in financing activities
    
    
    (1,523
    )
    
    
    (63,393
    )Net change in cash and cash equivalents
    
    $
    (4,049
    )
    
    $
    6,823Cash and cash equivalents, beginning of period
    
    
    16,290
    
    
    
    13,521Cash and cash equivalents, end of period
    
    $
    12,241
    
    
    $
    20,344
  6




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BOYKIN LODGING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2006
(unaudited, dollar amounts in thousands except per share and per unit data)
 1. BACKGROUND:
  Formation
   Merger Agreement
      7




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Radisson Suite Beach Resort  Marco Island
  Consolidated Joint Ventures
   Unconsolidated Joint Ventures
      8




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Boykin/AEW
    
    
    Boykin/ConcordJune 30,
    
    
    December 31,
    
    
    June 30,
    
    
    December 31,2006
    
    
    2005
    
    
    2006
    
    
    2005Total assets
    
    $
    1,748
    
    
    $
    2,828
    
    
    $
    20,289
    
    
    $
    20,499Accrued expenses
    
    
    806
    
    
    
    1,934
    
    
    
    564
    
    
    
    578Outstanding debt
    
    
    
    
    
    
    
    
    
    
    17,909
    
    
    
    18,078Total liabilities
    
    
    806
    
    
    
    1,934
    
    
    
    18,473
    
    
    
    18,656Minority interest
    
    
    229
    
    
    
    224
    
    
    
    
    
    
    
    Equity
    
    
    713
    
    
    
    670
    
    
    
    1,816
    
    
    
    1,843Investment in
unconsolidated
joint venture
    
    $
    504
    
    
    $
    488
    
    
    $
    908
    
    
    $
    922
 Boykin/AEW
    
    
    Boykin/ConcordThree Months
    
    
    Six Months
    
    
    Three Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues
    
    $
    
    
    
    $
    6
    
    
    $
    
    
    
    $
    2,009
    
    
    $
    2,422
    
    
    $
    2,221
    
    
    $
    4,314
    
    
    $
    3,909Hotel operating expenses
    
    
    30
    
    
    
    (78
    )
    
    
    32
    
    
    
    (2,111
    )
    
    
    (1,370
    )
    
    
    (1,234
    )
    
    
    (2,630
    )
    
    
    (2,315
    )Management fees to related party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (60
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Real estate related depreciation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (772
    )
    
    
    (286
    )
    
    
    (281
    )
    
    
    (570
    )
    
    
    (561
    )Property taxes, insurance and other
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    (368
    )
    
    
    (83
    )
    
    
    (83
    )
    
    
    (166
    )
    
    
    (162
    )Operating income (loss)
    
    
    30
    
    
    
    (72
    )
    
    
    43
    
    
    
    (1,302
    )
    
    
    683
    
    
    
    623
    
    
    
    948
    
    
    
    871Interest and other income
    
    
    8
    
    
    
    4
    
    
    
    15
    
    
    
    28
    
    
    
    4
    
    
    
    2
    
    
    
    8
    
    
    
    3Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (133
    )
    
    
    (11
    )
    
    
    (11
    )
    
    
    (22
    )
    
    
    (22
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (512
    )
    
    
    (272
    )
    
    
    (277
    )
    
    
    (542
    )
    
    
    (552
    )Gain (loss) on sale/disposal of assets
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    29,308
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19
    )
    
    
    (87
    )
    
    
    (19
    )
    
    
    (112
    )Net income (loss) before minority interest
    
    
    38
    
    
    
    (72
    )
    
    
    58
    
    
    
    27,389
    
    
    
    385
    
    
    
    250
    
    
    
    373
    
    
    
    188Boykins share of net income (loss)
    
    
    16
    
    
    
    (32
    )
    
    
    25
    
    
    
    12,012
    
    
    
    193
    
    
    
    125
    
    
    
    187
    
    
    
    94Reduction of additional basis in Boykin Chicago, L.L.C
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (947
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    (32
    )
    
    
    25
    
    
    
    11,065
    
    
    
    193
    
    
    
    125
    
    
    
    187
    
    
    
    94
 Taxable REIT Subsidiaries
    Hotel Managers
  9




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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 Basis of Presentation
   Condominium Units
   Investment in Hotel Properties
   Insurance Recoveries
    10




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Deferred Compensation Plans
  Stock-based Compensation
  3. EARNINGS PER SHARE:
  11




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##### Table of Contents



Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Basic
    
    
    17,687,567
    
    
    
    17,543,916
    
    
    
    17,687,567
    
    
    
    17,539,026Effect of dilutive securities:Common stock options
    
    
    106,549
    
    
    
    123,898
    
    
    
    139,843
    
    
    
    97,375Restricted share grants
    
    
    82,216
    
    
    
    121,582
    
    
    
    98,717
    
    
    
    100,304Diluted
    
    
    17,876,332
    
    
    
    17,789,396
    
    
    
    17,926,127
    
    
    
    17,736,705
 4. PARTNERSHIP UNITS/MINORITY INTERESTS:
   5. DISCONTINUED OPERATIONS:
     Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Lease revenue
    
    $
    
    
    
    $
    354
    
    
    $
    
    
    
    $
    709Hotel revenues
    
    
    3,934
    
    
    
    4,290
    
    
    
    8,296
    
    
    
    11,221Hotel operating expenses
    
    
    (2,507
    )
    
    
    (3,273
    )
    
    
    (4,813
    )
    
    
    (8,511
    )Management fees to related party
    
    
    (132
    )
    
    
    (110
    )
    
    
    (342
    )
    
    
    (310
    )Management fees  other
    
    
    
    
    
    
    (11
    )
    
    
    
    
    
    
    (19
    )Property taxes, insurance and other
    
    
    (375
    )
    
    
    (254
    )
    
    
    (710
    )
    
    
    (632
    )Other expenses
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (12
    )Interest income
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    4Real estate related depreciation and
amortization
    
    
    (149
    )
    
    
    (394
    )
    
    
    (373
    )
    
    
    (1,005
    )Gain on sale of individual assets
    
    
    133
    
    
    
    366
    
    
    
    672
    
    
    
    366Gain on sale of property
    
    
    
    
    
    
    7,818
    
    
    
    
    
    
    
    7,818Minority interest in earnings of
joint ventures
    
    
    
    
    
    
    (23
    )
    
    
    
    
    
    
    (45
    )Income from discontinued operations
    
    $
    904
    
    
    $
    8,762
    
    
    $
    2,730
    
    
    $
    9,584
 12




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##### Table of Contents



June 30,
    
    
    December 31,2006
    
    
    2005Accounts receivable, net
    
    $
    322
    
    
    $
    686Inventories
    
    
    40
    
    
    
    74Other assets
    
    
    736
    
    
    
    371Deferred financing costs and other, net
    
    
    13
    
    
    
    13Investment in hotel properties, net
    
    
    27,105
    
    
    
    27,450Total assets
    
    $
    28,216
    
    
    $
    28,594Accounts payable and accrued expenses
    
    $
    1,189
    
    
    $
    1,279Accounts payable to related party
    
    
    112
    
    
    
    183Total liabilities
    
    $
    1,301
    
    
    $
    1,462
 6. CREDIT FACILITY:
   7. TERM NOTES PAYABLE:
     13




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##### Table of Contents



2006
    
    $
    1,7542007
    
    
    4,4482008
    
    
    12,5882009
    
    
    5,1342010
    
    
    5,5052011 and thereafter
    
    
    74,488$
    103,917
 8. RELATED PARTY TRANSACTIONS:
      9. STATEMENT OF CASH FLOWS, SUPPLEMENTAL DISCLOSURES:
    10. INCOME TAXES:
  14




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##### Table of Contents



11. SUBSQUENT EVENTS:
   15




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OVERVIEW
   FORWARD LOOKING STATEMENTS
  
    
    Our ability to close the announced merger transaction;
    
    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.
    SECOND QUARTER HIGHLIGHTS AND OUTLOOK FOR THE REMAINDER OF 2006
 th 1 2
 16




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CRITICAL ACCOUNTING POLICIES
 Investment in Hotel Properties
   17




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##### Table of Contents



Revenue recognition
 Hotel Condominium Revenues-
   Insurance Recoveries 
    FINANCIAL CONDITION
 June 30, 2006 Compared to December 31, 2005
   RESULTS OF OPERATIONS
 Quarter Ended June 30, 2006 Compared to Quarter Ended June 30, 2005
  18




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Six Months Ended June 30, 2006 Compared to Six Months Ended June 30, 2005
  19




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20




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Non-GAAP Financial Measures
   FFO
    Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income (loss)
    
    $
    (475
    )
    
    $
    7,227
    
    
    $
    (1,327
    )
    
    $
    23,119Minority interest
    
    
    (434
    )
    
    
    934
    
    
    
    (912
    )
    
    
    3,389Gain on sale/disposal of assets
    
    
    (6
    )
    
    
    (7,856
    )
    
    
    (6
    )
    
    
    (14,732
    )Gain on sale/disposal of individual assets included in
discontinued operations
    
    
    (133
    )
    
    
    (366
    )
    
    
    (672
    )
    
    
    (366
    )Real estate related depreciation and amortization
    
    
    5,179
    
    
    
    5,470
    
    
    
    10,393
    
    
    
    10,941Real estate related depreciation and amortization
included in discontinued operations
    
    
    149
    
    
    
    394
    
    
    
    373
    
    
    
    1,005Equity in income of unconsolidated joint ventures
including gain on sale
    
    
    (209
    )
    
    
    (93
    )
    
    
    (212
    )
    
    
    (11,159
    )FFO adjustment related to joint ventures
    
    
    345
    
    
    
    204
    
    
    
    463
    
    
    
    (190
    )Preferred dividends declared
    
    
    (1,188
    )
    
    
    (1,188
    )
    
    
    (2,376
    )
    
    
    (2,376
    )Funds from operations after preferred dividends
    
    $
    3,228
    
    
    $
    4,726
    
    
    $
    5,724
    
    
    $
    9,631Less: Funds from operations related to minority interest
    
    
    430
    
    
    
    634
    
    
    
    763
    
    
    
    1,292Funds from operations attributable to common shareholders
    
    $
    2,798
    
    
    $
    4,092
    
    
    $
    4,961
    
    
    $
    8,339
 EBITDA
   21




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Operating income
    
    $
    1,077
    
    
    $
    2,124
    
    
    $
    756
    
    
    $
    5,209Interest income
    
    
    92
    
    
    
    422
    
    
    
    597
    
    
    
    434Other income
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    Real estate related depreciation and amortization
    
    
    5,179
    
    
    
    5,470
    
    
    
    10,393
    
    
    
    10,941EBITDA attributable to discontinued operations
    
    
    920
    
    
    
    995
    
    
    
    2,431
    
    
    
    2,450Companys share of EBITDA of unconsolidated joint
ventures
    
    
    503
    
    
    
    423
    
    
    
    788
    
    
    
    500EBITDA applicable to joint venture minority interest
    
    
    (104
    )
    
    
    (32
    )
    
    
    (192
    )
    
    
    (64
    )EBITDA
    
    $
    7,667
    
    
    $
    9,402
    
    
    $
    14,789
    
    
    $
    19,470
 Key Hotel Operating Statistics
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005All Hotels (17 hotels) (a)Hotel revenues (in thousands)
    
    $
    52,870
    
    
    $
    52,053
    
    
    $
    101,856
    
    
    $
    99,336RevPAR
    
    $
    74.01
    
    
    $
    71.38
    
    
    $
    71.23
    
    
    $
    67.72Occupancy
    
    
    69.3
    %
    
    
    72.3
    %
    
    
    67.4
    %
    
    
    68.0
    %Average daily rate
    
    $
    106.76
    
    
    $
    98.71
    
    
    $
    105.69
    
    
    $
    99.55Comparable Hotels (16 hotels) (b)Hotel revenues (in thousands)
    
    $
    50,448
    
    
    $
    49,831
    
    
    $
    97,542
    
    
    $
    95,427RevPAR
    
    $
    72.70
    
    
    $
    70.47
    
    
    $
    70.30
    
    
    $
    67.12Occupancy
    
    
    68.6
    %
    
    
    71.7
    %
    
    
    66.9
    %
    
    
    67.6
    %Average daily rate
    
    $
    105.96
    
    
    $
    98.34
    
    
    $
    105.06
    
    
    $
    99.23
 
 (a)
    
    Includes all hotels owned or partially owned by Boykin as of August 8, 2006 and for all
periods presented, excluding properties not operating during such periods due to damage caused
by hurricanes.(b)
    
    Includes consolidated hotels owned or partially owned by Boykin as of August 8, 2006 and for
all periods presented and operated under the TRS structure, excluding properties not operating
during such periods due to damage caused by hurricanes. 22




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
   
    
    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;
    
    Weather-related issues;
    
    Increases in supply of rooms as a result of the construction of new hotels; and
    
    Actual or threatened acts of terrorism and actions taken against terrorists that causes public concern about travel safety.
  
    
    Competition from other condominium projects;
    
    Construction delays;
    
    Reliance on contractors and subcontractors;
    
    Construction cost overruns;
    
    Market pressures surrounding pricing of condominium units and their effect on
condominium purchasers willingness to close on the sales; and
    
    The ability of the condominium purchasers to secure financing.
      23




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Capital Projects






Off Balance Sheet Arrangements




Cash Flows




INFLATION






SEASONALITY


24




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##### Table of Contents





COMPETITION AND OTHER ECONOMIC FACTORS











ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Interest Rate Risk










1 4







ITEM 4. CONTROLS AND PROCEDURES




25




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
     
 ITEM 1A. RISK FACTORS
 Risks Related to the Mergers
 While the merger agreement is in effect, we are subject to business uncertainties and
significant restrictions on our business activities that may have a negative impact on our
operating results.
  Failure to complete the mergers may negatively impact our stock price, future business and
financial results.
  
 26




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##### Table of Contents




 
 
 
 
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  27




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##### Table of Contents



ITEM 6. EXHIBITS
 2.1
    
    (f)
    
    Agreement and Plan of Merger3.1
    
    (a)
    
    Amended and Restated Articles of Incorporation, as amended3.2
    
    (b)
    
    Code of Regulations3.3
    
    (c)
    
    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
    
    (d)
    
    Shareholder Rights Agreement, dated as of May 25, 1999, between
Boykin Lodging Company and National City Bank, as rights agent4.3a
    
    (e)
    
    Amendment to Shareholder Rights Agreement dated as of December
31, 2001, between Boykin Lodging Company and National City Bank4.3b
    
    (f)
    
    Second Amendment to Shareholder Rights Agreement dated as of May
19, 2006, between Boykin Lodging Company and National City Bank4.4
    
    (c)
    
    Form of Preferred Share Certificate4.5
    
    (c)
    
    Form of Depositary Receipt10.1
    
    
    
    Hotel Purchase Agreement between Boykin Marco LLC, as Seller and Marriott
Ownership Resorts, Inc., as Buyer10.2
    
    (f)
    
    First Amendment to Third Amended and Restated Agreement of Limited Partnership
of Boykin Hotel Properties, L.P.10.3
    
    (f)
    
    Directors Deferred Compensation Plan (As Amended and Restated Effective May
19, 2006)*10.4
    
    (f)
    
    Limited Liability Company Interests and Asset Purchase Agreement related to
the Pink Shell Beach Resort & Spa10.5
    
    (f)
    
    Limited Liability Company Interests Purchase Agreement related to Marathon
Partners Manager LLC10.6
    
    (f)
    
    Agreement and Guaranty by Westbridge Hospitality Management Limited, as
general partner of Westbridge Hospitality Fund, L.P., in favor of Boykin Lodging
Company10.7
    
    (g)
    
    Amendment to Boykin Lodging Company Long-Term Incentive Plan dated June 20,
2006*31.1
    
    
    
    Certification Pursuant to Rule 13a-14(a), in Accordance with Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    
    
    Certification Pursuant to Rule 13a-14(a), in Accordance with Section
302 of the Sarbanes-Oxley Act of 200232.1
    
    
    
    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 from Boykins Form 10-Q for the quarter ended June
30, 1999.(b)
    
    Incorporated by reference from Amendment No. 3 to
Boykins Registration Statement on Form S-11 (Registration No. 333-6341)
(the Form S-11) filed on October 24, 1996. Each of the above exhibits has
the same exhibit number in the Form S-11.(c)
       
    Incorporated by reference from Boykins Registration
Statement on Form 8-A filed on October 3, 2002.(d)
    
    Incorporated by reference as Exhibit 1 from Boykins
Registration Statement on Form 8-A filed on June 10, 1999.(e)
        
    Incorporated by reference from Boykins Form 8-K filed on January 14, 2002.(f)
    
    Incorporated by reference from Boykins Form 8-K filed on May 22, 2006.(g)
    
    Incorporated by reference from Boykins Form 8-K filed on June 23, 2006.*
    
    Compensatory plan or arrangement
 28




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##### Table of Contents



SIGNATURES
  August 8, 2006
    /s/ Robert W. BoykinRobert W. BoykinChairman of the Board and Chief Executive Officer

(Principal Executive Officer) August 8, 2006
    /s/ Shereen P. JonesShereen P. Jones

Executive Vice President, Chief Financial and Investment Officer

(Principal Accounting Officer)




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##### Table of Contents



EXHIBIT INDEX
 2.1
    
    (f)
    
    Agreement and Plan of Merger3.1
    
    (a)
    
    Amended and Restated Articles of Incorporation, as amended3.2
    
    (b)
    
    Code of Regulations3.3
    
    (c)
    
    Amendment to the Companys Articles of Incorporation for the 10-1/2% Class A
Cumulative Preferred shares, Series 2002-A4.6
    
    (b)
    
    Specimen Share Certificate4.7
    
    (a)
    
    Dividend Reinvestment and Optional Share Purchase Plan4.8
    
    (d)
    
    Shareholder Rights Agreement, dated as of May 25, 1999, between
Boykin Lodging Company and National City Bank, as rights agent4.3a
    
    (e)
    
    Amendment to Shareholder Rights Agreement dated as of December
31, 2001, between Boykin Lodging Company and National City Bank4.3b
    
    (f)
    
    Second Amendment to Shareholder Rights Agreement dated as of May
19, 2006, between Boykin Lodging Company and National City Bank4.9
    
    (c)
    
    Form of Preferred Share Certificate4.10
    
    (c)
    
    Form of Depositary Receipt10.1
    
    
    
    Hotel Purchase Agreement between Boykin Marco LLC, as Seller and Marriott
Ownership Resorts, Inc., as Buyer10.2
    
    (f)
    
    First Amendment to Third Amended and Restated Agreement of Limited Partnership
of Boykin Hotel Properties, L.P.10.3
    
    (f)
    
    Directors Deferred Compensation Plan (As Amended and Restated Effective May
19, 2006)*10.4
    
    (f)
    
    Limited Liability Company Interests and Asset Purchase Agreement related to
the Pink Shell Beach Resort & Spa10.5
    
    (f)
    
    Limited Liability Company Interests Purchase Agreement related to Marathon
Partners Manager LLC10.6
    
    (f)
    
    Agreement and Guaranty by Westbridge Hospitality Management Limited, as
general partner of Westbridge Hospitality Fund, L.P., in favor of Boykin Lodging
Company10.7
    
    (g)
    
    Amendment to Boykin Lodging Company Long-Term Incentive Plan dated June 20,
2006*31.1
    
    
    
    Certification Pursuant to Rule 13a-14(a), in Accordance with Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    
    
    Certification Pursuant to Rule 13a-14(a), in Accordance with Section
302 of the Sarbanes-Oxley Act of 200232.1
    
    
    
    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 from Boykins Form 10-Q for the quarter ended June
30, 1999.(b)

    
    Incorporated by reference from Amendment No. 3 to
Boykins Registration Statement on Form S-11 (Registration No. 333-6341)
(the Form S-11) filed on October 24, 1996. Each of the above exhibits has
the same exhibit number in the Form S-11.(c)
    
    Incorporated by reference from Boykins Registration
Statement on Form 8-A filed on October 3, 2002.(d)
    
    Incorporated by reference as Exhibit 1 from Boykins
Registration Statement on Form 8-A filed on June 10, 1999.(e)

    
    Incorporated by reference from Boykins Form 8-K filed on January 14, 2002.(f)    
    Incorporated by reference from Boykins Form 8-K filed on May 22, 2006.(g)

    
    Incorporated by reference from Boykins Form 8-K filed on June 23, 2006.*

    
    Compensatory plan or arrangement
 30