Boykin Lodging (BOY) 8-K Boykin Lodging Announces Sale of Marco Island Property

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):July 17, 2006

Boykin Lodging Company
(Exact Name of Registrant as Specified in its Charter)

Ohio
(State or Other Jurisdiction of
Incorporation) 001-11975
(Commission File Number) 34-1824586
(IRS Employer Identification Number)

Guildhall Building, Suite 1500, 45 W. Prospect Avenue, Cleveland, Ohio
(Address of Principal Executive Offices) 44115
(Zip Code)

(216) 430-1200
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 2 FINANCIAL INFORMATION

ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

On July 17, 2006, Boykin Marco LLC (“Boykin Marco”), a subsidiary of Boykin Lodging Company (“Boykin”), sold the Radisson Suite Beach Resort — Marco Island (“Marco Island”) in Marco Island, Florida, to Marriott Ownership Resorts, Inc., an unrelated third party, for a price of $58.0 million. The sales price for the transaction was the result of arm’s-length negotiations.

SECTION 8 OTHER EVENTS

ITEM 8.01 OTHER EVENTS

On July 18, 2006, the Company issued a press release announcing the sale, which is furnished as Exhibit 99.1 hereto.

CAUTIONARY STATEMENTS

     This report is being made in respect of a proposed merger transaction involving the Company and affiliates of Westmont Hospitality Group and Cadim, Inc., a wholly-owned subsidiary of Caisse de dépôt et placement du Québec. In connection with the transaction, the Company will file with the SEC a definitive proxy statement on Schedule 14A concerning the proposed transaction.Before making any voting or investment decision, shareholders are urged to read the definitive proxy statement carefully and in its entirety when it becomes available because it will contain important information about the proposed transaction.

     The definitive proxy statement will be mailed to the Company’s shareholders. In addition, the definitive proxy statement and other documents will be available free of charge at the SEC’s Internet Web site,www.sec.gov. The definitive proxy statement and other pertinent documents also may be obtained for free at the Company’s web site,www.boykinlodging.com.

     The Company and its executive officers and directors may be deemed, under SEC rules, to be participants in the solicitation of proxies from the Company’s shareholders with respect to the merger involving the Company.Information regarding the Company’s executive officers and directors, including their direct or indirect interest, by securities, holdings, or otherwise, is set forth in the Company’s definitive proxy statement filed with the SEC on April 25, 2006 and the Company’s preliminary proxy statement filed with the SEC on June 21, 2006.

SECTION 9 FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements of Businesses Acquired.

     None.

(b) Pro Forma Financial Information.

The following unaudited pro forma condensed consolidated financial information for Boykin Lodging Company gives effect to the disposition of the Radisson Suite Beach Resort — Marco Island in Marco Island, Florida, as well as the receipt of proceeds from the sale as described in this Current Report on Form 8-K.

The March 31, 2006 unaudited Pro Forma Condensed Consolidated Balance Sheet presents the disposition of the Radisson Suite Beach Resort — Marco Island as if it was effective March 31, 2006. The unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 2006, and each of the years in the three year period ended December 31, 2005 assume the sale was effective as of the beginning of the fiscal year ended December 31, 2003.

The unaudited pro forma condensed consolidated financial information should be read in conjunction with the consolidated financial statements and related footnotes included in Boykin Lodging Company’s 2005 Annual Report on Form 10-K.

THE FOLLOWING UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
INFORMATION IS PRESENTED FOR ILLUSTRATIVE PURPOSES ONLY AND IS NOT
NECESSARILY AN INDICATION OF THE FUTURE FINANCIAL POSITION OR RESULTS
OF OPERATIONS OF BOYKIN LODGING COMPANY.

BOYKIN LODGING COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2006
(unaudited, dollar amounts in thousands)

				Pro Forma Adjustments
	(a)			(b)			(c)
				Prior			Marco
	Historical			Transaction			Island			Pro Forma
Investment in hotel properties	$	536,420			—			(29,393	)	$	507,027
Accumulated depreciation		(143,017	)		—			2,142			(140,875	)
Investment in hotel properties, net		393,403			—			(27,251	)		366,152
Cash and cash equivalents		25,217			—			57,170	(d)		82,387
Restricted cash		7,280			—			—			7,280
Accounts receivable, net of allowance for doubtful accounts of $307		9,852			—			(638	)		9,214
Inventories		1,217			—			(68	)		1,149
Deferred financing costs and other, net		1,765			—			(13	)		1,752
Investment in unconsolidated joint ventures		1,213			(497	)		—			716
Other assets		17,469			—			(1,040	)		16,429
	$	457,416			(497	)		28,160		$	485,079
LIABILITIES AND SHAREHOLDERS’ EQUITY
Borrowings against credit facility	$	37,000			—			—		$	37,000
Term notes payable		105,292			—			—			105,292
Accounts payable and accrued expenses		43,907			—			(1,373	)		42,534
Accounts payable to related party		1,557			—			(158	)		1,399
Dividends/distributions payable		1,188			—			—			1,188
Minority interest in joint ventures		2,529			—			—			2,529
Minority interest in operating partnership		13,453			(73)	(e)		4,385	(e)		17,765
SHAREHOLDERS’ EQUITY:
Preferred shares, without par value; 10,000,000 shares authorized; 181,000 shares issued and outstanding as of March 31, 2006 (liquidation preference of $45,250)		—			—			—			—
Common shares, without par value; 40,000,000 shares authorized; 17,687,567 issued and outstanding as of March 31, 2006		—			—			—			—
Additional paid-in capital		361,068			—			—			361,068
Distributions and losses in excess of income		(106,301	)		(424)	(e)		25,306	(e)		(81,419	)
Unearned compensation — restricted shares		(2,277	)		—			—			(2,277	)
Total shareholders’ equity		252,490			(424	)		25,306			277,372
	$	457,416			(497	)		28,160		$	485,079

BOYKIN LODGING COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006
(unaudited, amounts in thousands, except for per share data)

				Pro Forma Adjustments
	(a)			(b)			(f)
				Prior			Marco
	Historical			Transaction			Island			Pro Forma
Revenues:
Hotel revenues
Rooms	$	34,685			—			(3,436	)	$	31,249
Food and beverage		15,201			—			(627	)		14,574
Other		2,129			—			(299	)		1,830
Total hotel revenues		52,015			—			(4,362	)		47,653
Other operating revenue		33			—			—			33
Revenues from condominium development and unit sales		1,006			—			—			1,006
Total revenues		53,054			—			(4,362	)		48,692
Expenses:
Hotel operating expenses
Rooms		8,253			—			(635	)		7,618
Food and beverage		10,187			—			(465	)		9,722
Other direct		1,424			—			(117	)		1,307
Indirect		16,268			—			(1,091	)		15,177
Management fees to related party		1,748			—			(210	)		1,538
Total hotel operating expenses		37,880			—			(2,518	)		35,362
Property taxes, insurance and other		4,770			—			(335	)		4,435
Cost of condominium development and unit sales		908			—			—			908
Real estate related depreciation and amortization		5,437			—			(224	)		5,213
Corporate general and administrative		3,092			—			—			3,092
Total operating expenses		52,087			—			(3,077	)		49,010
Operating income		967			—			(1,285	)		(318	)
Interest income		504			—			—			504
Other income		16			—			—			16
Interest expense		(2,893	)		—			—			(2,893	)
Amortization of deferred financing costs		(466	)		—			—			(466	)
Minority interest in earnings of joint ventures		(15	)		—			—			(15	)
Minority interest in loss of operating partnership		493			1			270			764
Equity in income of unconsolidated joint ventures		3			(9	)		—			(6	)
Loss before preferred dividends and gain on sale/disposal of assets		(1,391	)		(8	)		(1,015	)		(2,414	)
Preferred dividends		(1,188	)		—			—			(1,188	)
Loss attributable to common shareholders before gain on sale/disposal of assets	$	(2,579	)	$	(8	)	$	(1,015	)	$	(3,602	)
Loss attributable to common shareholders before gain on sale/disposal of assets
Basic	$	(0.15	)							$	(0.20	)
Diluted	$	(0.15	)							$	(0.20	)
Weighted average number of common shares outstanding
Basic		17,688									17,688
Diluted		17,956									17,956

BOYKIN LODGING COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2005
(unaudited, amounts in thousands, except for per share data)

				Pro Forma Adjustments
	(g)			(b)			(f)
				Prior			Marco
	Historical			Transaction			Island			Pro Forma
Revenues:
Hotel revenues
Rooms	$	128,856			—			(9,703	)	$	119,153
Food and beverage		59,968			—			(1,873	)		58,095
Other		15,463			—			(1,065	)		14,398
Total hotel revenues		204,287			—			(12,641	)		191,646
Other operating revenue		198			(49	)		—			149
Total revenues		204,485			(49	)		(12,641	)		191,795
Expenses:
Hotel operating expenses
Rooms		32,296			—			(2,243	)		30,053
Food and beverage		40,577			—			(1,737	)		38,840
Other direct		5,729			—			(444	)		5,285
Indirect		63,136			—			(4,087	)		59,049
Management fees to related party		5,635			—			(532	)		5,103
Total hotel operating expenses		147,373			—			(9,043	)		138,330
Property taxes, insurance and other		16,680			—			(894	)		15,786
Real estate related depreciation and amortization		22,291			(9	)		(839	)		21,443
Corporate general and administrative		11,664			—			—			11,664
Impairment of real estate		5,500			—			—			5,500
Total operating expenses		203,508			(9	)		(10,776	)		192,723
Operating income		977			(40	)		(1,865	)		(928	)
Interest income		1,106			—			—			1,106
Other income		2			—			—			2
Interest expense		(11,586	)		—			—			(11,586	)
Amortization of deferred financing costs		(1,540	)		—			—			(1,540	)
Federal income taxes		(75	)		—			—			(75	)
Minority interest in loss of joint ventures		38			—			—			38
Minority interest in income of operating partnership		(620	)		1,644			278			1,302
Equity in income of unconsolidated joint ventures including gain on sale		11,343			(11,014	)		—			329
Loss before preferred dividends, gain on sale/disposal of assets and discontinued operations		(355	)		(9,410	)		(1,587	)		(11,352	)
Preferred dividends		(4,751	)		—			—			(4,751	)
Loss attributable to common shareholders before gain on sale/disposal of assets and discontinued operations	$	(5,106	)	$	(9,410	)	$	(1,587	)	$	(16,103	)
Loss attributable to common shareholders before gain on sale/disposal of assets and discontinued operations
Basic	$	(0.29	)							$	(0.92	)
Diluted	$	(0.29	)							$	(0.92	)
Weighted average number of common shares outstanding
Basic		17,567									17,567
Diluted		17,887									17,887

BOYKIN LODGING COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
(unaudited, amounts in thousands, except for per share data)

				Pro Forma
				Adjustments
	(h)			(f)
	Historical			Marco Island			Pro Forma
Revenues:
Hotel revenues
Rooms	$	127,505			(10,226	)	$	117,279
Food and beverage		57,791			(2,195	)		55,596
Other		10,683			(1,040	)		9,643
Total hotel revenues		195,979			(13,461	)		182,518
Other operating revenue		184			—			184
Revenues from condominium development and unit sales		7,541			—			7,541
Total revenues		203,704			(13,461	)		190,243
Expenses:
Hotel operating expenses
Rooms		32,056			(2,330	)		29,726
Food and beverage		39,310			(1,895	)		37,415
Other direct		5,563			(468	)		5,095
Indirect		62,743			(4,183	)		58,560
Management fees to related party		5,454			(565	)		4,889
Total hotel operating expenses		145,126			(9,441	)		135,685
Property taxes, insurance and other		14,441			(601	)		13,840
Cost of condominium development and unit sales		5,509			—			5,509
Real estate related depreciation and amortization		22,181			(816	)		21,365
Corporate general and administrative		8,778			26			8,804
Total operating expenses		196,035			(10,832	)		185,203
Operating income		7,669			(2,629	)		5,040
Interest income		377			—			377
Other income		8			—			8
Interest expense		(13,629	)		—			(13,629	)
Amortization of deferred financing costs		(1,367	)		—			(1,367	)
Minority interest in loss of operating partnership		1,741			393			2,134
Equity in income of unconsolidated joint ventures		121			—			121
Loss before preferred dividends, gain on sale/disposal of assets and discontinued operations		(5,080	)		(2,236	)		(7,316	)
Preferred dividends		(4,751	)		—			(4,751	)
Loss attributable to common shareholders before gain on sale/disposal of assets and discontinued operations	$	(9,831	)	$	(2,236	)	$	(12,067	)
Loss attributable to common shareholders before gain on sale/disposal of assets and discontinued operations per share
Basic	$	(0.56	)				$	(0.69	)
Diluted	$	(0.56	)				$	(0.69	)
Weighted average number of common shares outstanding
Basic		17,426						17,426
Diluted		17,553						17,553

BOYKIN LODGING COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
(unaudited, amounts in thousands, except for per share data)

				Pro Forma
				Adjustments
	(h)			(f)
	Historical			Marco Island			Pro Forma
Revenues:
Hotel revenues:
Rooms	$	115,812			(1,992	)	$	113,820
Food and beverage		53,341			(526	)		52,815
Other		7,220			(204	)		7,016
Total hotel revenues		176,373			(2,722	)		173,651
Other operating revenue		120			—			120
Revenues from condominium development and unit sales		36,883			—			36,883
Total revenues		213,376			(2,722	)		210,654
Expenses:
Hotel operating expenses:
Rooms		28,981			(627	)		28,354
Food and beverage		36,917			(481	)		36,436
Other direct		4,406			(131	)		4,275
Indirect		56,115			(1,200	)		54,915
Management fees to related party		3,976			(85	)		3,891
Management fees — other		746			—			746
Total hotel operating expenses		131,141			(2,524	)		128,617
Property taxes, insurance and other		13,863			(303	)		13,560
Cost of condominium development and unit sales		24,645			—			24,645
Real estate related depreciation and amortization		24,030			(267	)		23,763
Corporate general and administrative		8,098			(48	)		8,050
Total operating expenses		201,777			(3,142	)		198,635
Operating income		11,599			420			12,019
Interest income		597			—			597
Other income		28			—			28
Interest expense		(14,923	)		—			(14,923	)
Amortization of deferred financing costs		(1,906	)		—			(1,906	)
Minority interest in loss of operating partnership		1,938			(63	)		1,875
Equity in loss of unconsolidated joint ventures		(133	)		—			(133	)
Loss before preferred dividends, gain on sale/disposal of assets and discontinued operations		(2,800	)		357			(2,443	)
Preferred dividends		(4,751	)		—			(4,751	)
Loss attributable to common shareholders before gain on sale/disposal of assets and discontinued operations	$	(7,551	)	$	357		$	(7,194	)
Loss attributable to common shareholders before gain on sale/disposal of assets and discontinued operations per share
Basic	$	(0.44	)				$	(0.41	)
Diluted	$	(0.44	)				$	(0.41	)
Weighted average number of common shares outstanding
Basic		17,336						17,336
Diluted		17,470						17,470

(a)	Historical data presented reflects amounts reported on Form 10-Q for the quarterly period ended March 31, 2006 filed on May 5, 2006.
(b)	On March 30, 2005, Boykin Chicago, L.L.C., a joint venture between Boykin and AEW Partners III L.P., sold Hotel 71 in Chicago, Illinois, for a price of $95.05 million to Chicago H&S Hotel Property, LLC, an unrelated third party. Since Boykin accounts for its investment in Boykin Chicago, L.L.C. using the equity method, amounts relating to this entity or the sale of Hotel 71 have not been reclassified to discontinued operations within the historical 2005 and 2006 financial statements. Historical data for periods prior to 2005 in this Form 8-K, obtained from the Form 8-K filed on November 21, 2005, reflect this reclassification.
	The necessary adjustments for this transaction are reflected within the “Prior Transaction” column within this Form 8-K.
(c)	Represents the necessary adjustments to Boykin’s historical financial statements to remove the assets and liabilities associated with Marco Island, as applicable, as well as to reflect the receipt of the sales proceeds.
(d)	Represents the net proceeds from the sale totaling approximately $57.2 million.
(e)	Reflects the estimated impact of the sales on minority interest and shareholders’ equity as if the sales took place on March 31, 2006. The actual impact of the transactions was based upon the carrying value of the assets at the time of the sales.
(f)	Reflects the adjustment to Boykin’s historical financial statements to present them as if the disposition of Marco Island had occurred on January 1, 2003. The gain or loss on the sale is not reflected in the pro forma condensed consolidated statements of operations. Boykin anticipates that the actual gain on the sale, net of minority interest, will approximate $25.3 million.
(g)	Historical data presented reflects amounts reported on Form 10-K for the year ended December 31, 2005 filed on March 15, 2006.
(h)	Historical data presented reflects amounts reported on Form 8-K filed on November 21, 2005.

(c) Exhibits.

     99.1     Boykin Lodging Company press release announcing transaction dated July 18, 2006.

SIGNATURE

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.

BOYKIN LODGING COMPANY
By:	/s/ Shereen P. Jones
	Shereen P. Jones Executive Vice President, Chief Financial and Investment Officer

Date: July 20, 2006