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	SECURITIES AND EXCHANGE COMMISSION
	WASHINGTON, D.C. 20549
	FORM 10-K
	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934

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

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

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

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

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

      The aggregate market value of the voting stock held by non-affiliates of the registrant, as of March 19, 2002, was approximately $157 million.

      As of March 19, 2002, the registrant had 17,223,334 common shares issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Definitive Proxy Statement for the Annual Meeting of Shareholders to be held May 30, 2002 into Part III, Items 10, 11, 12, and 13.

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FORWARD LOOKING STATEMENTS

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

	•	Leasing, management or performance of the hotels;
	•	Boykin’s plans for expansion, conversion or renovation of the hotels;
	•	Adequacy of reserves for renovation and refurbishment;
	•	Potential acquisitions and dispositions by Boykin;
	•	Boykin’s financing plans;
	•	Boykin’s policies regarding investments, acquisitions, dispositions, financings, conflicts of interest and other matters; and
	•	Trends affecting Boykin’s or any hotel’s financial condition or results of operations.

      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 our expectations 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, war, 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 lessees, and other similar variables. The information contained in this Form 10-K and in the documents incorporated by reference herein and 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.

PART I

(a) General Development of Business

      Boykin Lodging Company, an Ohio corporation, is a real estate investment trust (“REIT”) that, as of March 19, 2002, owns interests in 33 hotels throughout the United States. Boykin Lodging was formed and completed an initial public offering in 1996 to continue and expand the over 40-year history of hotel ownership, acquisition, redevelopment and repositioning activities of its predecessors, Boykin Management Company and its affiliates (the “Boykin Group”). Boykin Hotel Properties, L.P., an Ohio limited partnership (the “Partnership”), is the operating partnership entity that transacts business and holds the direct and indirect ownership interests in our hotels. As of December 31, 2001, Boykin Lodging Company had a 92.3% ownership interest in, is the sole general partner of and does all its business through the Partnership.

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

	•	Maximizing operating cash flows of our hotels through

	•	aggressive asset management to maximize revenue and minimize expenses;
	•	selective renovation;
	•	expansion and development; and
	•	improved brand positioning;

	•	Focused portfolio management including acquiring upscale, full-service commercial and resort hotels located in urban and beach markets at a discount to their replacement cost and disposing of non-core suburban assets;
	•	Branding our hotels with the industry’s premier upscale franchises or by being independent of franchise affiliations in markets that can support this; and
	•	Contracting with high-quality, experienced hotel management companies to operate our hotels effectively by maximizing their cash flow and value.

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

      Through the year ended December 31, 2001, the Partnership leased its properties to established hotel operators. Effective January 1, 2002, we took advantage of the restructuring available under the Work Incentives Improvement Act of 1999 (“REIT Modernization Act”). The REIT Modernization Act amended the tax laws to permit REITs, like us, to lease hotels to a subsidiary that qualifies as a taxable REIT subsidiary (“TRS”) as long as the TRS engages an independent hotel management company to operate those hotels under a management contract. At December 31, 2001, we had an agreement to acquire a total of 28 leasehold interests in our hotels from two of our operators, Boykin Management Company Limited Liability Company (“BMC”) and Meristar Hotels and Resorts, Inc. (“Meristar”), and enter into management contracts with them effective January 1, 2002. Following these transactions, 31 of our 33 hotels are operated under the TRS structure whereby the hotels are leased to a TRS of Boykin Lodging.

      We believe that the new TRS structure will enhance our long-term performance, better align the interests of our operators with ours, and allow us to benefit from expense management initiatives which can be implemented and monitored more closely. In addition, we believe that our flexibility has been significantly enhanced because the new management agreements with BMC and Meristar are terminable by us without penalty, whereas the previous percentage leases provided for significant termination penalties even if we sold a property. We recorded a charge to earnings of $15.0 million for the year ended December 31, 2001 relating to the acquisition and termination of the percentage leases with BMC and Meristar and the related transaction costs. Of this charge, $11.4 million was a non-cash charge related to the issuance of 1.4 million Partnership units to BMC. After the issuance, Boykin Lodging Company had an 85.0% ownership interest in the Partnership. The transaction also resulted in the assumption of the net working capital of the leasehold interests as of December 31, 2001. Although we expect that the transactions will reduce our funds from operations per share for 2002, if the TRS benefits described above are realized, the transactions should allow us to enhance our long-term performance. Going forward, the results of operations of the hotels operated by BMC and Meristar will be recorded in our financial statements, which will replace the previously recorded percentage lease revenue from these properties.

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	•	In October 2001, we completed a $5.5 million renovation of the Doubletree Guest Suites located in Southfield, Michigan, which we acquired in September 2000. Upon completion of the renovation, the hotel was rebranded as an Embassy Suites.
	•	In July 2001, we formed a joint venture with Concord Hospitality Enterprises (“Concord”), a privately owned hotel investment and management company. The joint venture acquired a 219 room full-service hotel in Lyndhurst, New Jersey. Our initial investment in the joint venture was $3.5 million and we have a 50% ownership interest in the hotel through the joint venture. A $5.5 million renovation of the hotel was completed in February 2002 at which time it was rebranded to a Courtyard by Marriott.
	•	In January 2001, we sold our Daytona Beach Radisson resort for consideration of $12.5 million.

(b) Financial Information About Industry Segments

      All of Boykin’s operations are in the hotel industry.

(c) Narrative Description of Business

      As of March 19, 2002, our hotel portfolio includes 31 full-service hotels and two limited-service hotels, all of which compete in the upscale to moderate price segment of the hospitality market. For the year ended December 31, 2001, our hotels, on a same unit basis, had an average occupancy rate of 62.2%, an average daily rate (“ADR”) of $93.82 and revenue per available room (“REVPAR”) of $58.30. Refer to Item 2(a) “Hotel Properties” on page 11 for a listing of our hotels. Also refer to Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 18 for a chart of hotel operating data for 2001 and 2000.

      1. Strong Asset Management

      We believe that the revenue and cash flow from our hotels will be maximized by intensive management and marketing. We intend to derive increased cash flow through the application of our operating strategies, which include active hotel revenue maximization through effective yield management and cost containment initiatives. We believe that our operators’ commitment to customer service and the experience of their management teams positions us to capitalize on the demand in our markets.

      We also believe that, based on improving market conditions, the location of our core hotels, and the strength of our own and our operators’ management teams, the portfolio should provide us with the opportunity for long-term cash flow growth through the hotel operations.

      2. Capital Expenditure and Renovation Strategy

      We believe that our regular program of capital improvements at our hotels, including replacement and refurbishment of furniture, fixtures, and equipment, helps maintain and enhance their competitiveness and maximizes the results of the hotels operations. Consistent with this strategy, we have made significant renovations at several of our hotels in recent years. In 2001, 2000, and 1999 we spent $23.0 million, $18.4 million and $22.1 million, respectively on renovations, excluding the projects at our Chicago, Illinois and Lyndhurst, New Jersey hotels which are owned by unconsolidated joint ventures. This represented 9%, 6% and 7% of 2001, 2000, and 1999 consolidated hotel revenues, respectively, significantly above the hotel industry standard of 4%.

      Looking forward to 2002, we plan to continue certain capital improvement project at the hotels, however, the terms of the March 2002 amendment to our credit facility contain restrictive provisions relative to capital expenditure activity. Specifically, we are entitled to complete our renovations and expansion projects at our Chicago, Meadowlands and Pink Shell properties as discussed within the Liquidity and Capital Resources section

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      3. Development, Expansion and Repositioning Strategy

      Within the past year we have reflagged/repositioned two hotels; the Southfield Embassy Suites in October 2001 and the Meadowlands-Lyndhurst Courtyard by Marriott in February 2002. In 2001, we commenced an approximate $20 million renovation of the Executive Plaza Hotel in Chicago, Illinois. Upon completion, expected to be in the third quarter of 2002, the property will be repositioned as a four-star-quality independent hotel and renamed “Hotel 71”, which reflects the address of the property. We have a 43.75% ownership interest in this property through a joint venture formed with AEW Partners III, L.P. (“AEW”), an investment partnership managed by AEW Capital Management, L.P., a Boston-based real estate investment firm that manages a portfolio of approximately $6 billion.

      In November 2001, we completed a $3 million renovation of a 60-unit tower at the Pink Shell Beach Resort in Ft. Myers Beach, Florida. These renovated studio units in the tower are being sold as Sanibel View Villas Condominiums, with the expectation that the unit owners will make their units available to us by contract for rental as hotel rooms. As of March 19, 2002, 15 of these units have sold, netting proceeds in excess of the renovation cost of the entire project.

      We also continue to work on an expansion project at the Pink Shell Beach Resort, which would increase the resort by 39 rooms. Although we are not obligated at this point to proceed with the project, our plan would be to demolish 53 cottage units, or about 25% of the rooms at the resort. We would then construct a 92-unit tower called White Sand Villas that would significantly upgrade the character of the resort. The units in the new tower would be sold as condominiums, with the expectation that the owners would put their unused room nights back to the resort by contract. As with any renovation, the shorter-term effects may be a lower revenues due to the demolition of the cottage units. The pre-marketing activity for the project has generated significant interest. We anticipate that we will only proceed with this project when we have sufficient pre-sales of these units to fund construction costs and we have secured financing. We anticipate that we may be in a position to commence construction in the summer of 2002.

      We may seek to develop additional full-service or upscale limited-service hotels on land that we acquire in our current geographic markets or on land contiguous to our hotels. We believe that selective development of hotels in our existing geographic markets could enable us to take advantage of operating efficiencies to generate attractive returns on our investment. We may also expand our existing hotels and/or reposition under-performing hotels by changing the franchise brand affiliation.

Portfolio Management

      We believe that the upscale and mid-price market segments of the hospitality industry will present attractive acquisition opportunities. Our acquisition strategy focuses on the following categories:

	1.	Target Markets and Product Type — Full-service commercial and resort hotels located in major urban markets, business centers and destination beach markets.
	2.	Market Repositioning Opportunities — Undervalued hotels whose occupancy, daily rates and overall revenues can be significantly enhanced through new brand affiliations and/or implementation of new management and marketing strategies which will maximize revenues and profitability.
	3.	Redevelopment and Renovation Opportunities — Hotels with sound operational fundamentals that, because of a lack of capital, require physical renovation to achieve their full performance potential, and other properties which can benefit from total redevelopment and market repositioning.
	4.	Portfolio Acquisitions — Portfolios of hotels which result in geographic economies of scale or which may be managed by proven hotel operators, and that may benefit from our repositioning and redevelopment experience and access to capital.

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      We intend to maintain a geographically diversified hotel portfolio and may also cluster hotels within certain primary markets in order to take advantage of operational and managerial economies of scale. We will acquire or develop additional hotel properties only as suitable opportunities arise, and will not undertake acquisition or development of properties unless adequate sources of capital and financing are available. We will also sell selected non-core suburban assets. Funds for future acquisitions or development of hotels are expected to be derived, in whole or in part, from capital obtained from borrowings, from the proceeds of the sale of non-strategic hotels, from additional issuances of common shares, preferred shares, or other securities, from potential joint venture partners and from cash flows from operations. Our credit facility currently places limitations on our ability to make acquisitions.

Brand Strategy

      We believe that we can maximize our market share and revenue by taking advantage of our orientation toward sales and marketing to identify the most effective branding and to leverage our brands with effective direct sales strategies.

      We focus on owning hotel properties that are, or can be, associated with brands that will lead the hospitality industry in REVPAR. Our portfolio is currently operated under franchise license agreements with premier nationally recognized hotel chains, including Marriott®, Radisson®, Hilton®, Embassy Suites®, Doubletree®, Holiday Inn®, Hampton Inn® and Quality Suites®. We expect to continue to affiliate with a number of different franchisors in order to maximize the performance of our hotels by providing greater access to a broad base of national marketing and reservation systems, and to mitigate the risks of franchise loss and franchise overlap. We believe that our relationships with certain franchisors facilitate finding acquisition opportunities and completing acquisitions on attractive terms.

      In selected markets, hotels can be most appropriately marketed and positioned without the need of a franchise affiliation. Our French Lick Springs Resort and Spa in French Lick, Indiana operates as an independent hotel. Upon completion of the renovation of our Chicago property in the third quarter of 2002, “Hotel 71” will also operate independent of a franchise agreement. Broad based reservation systems are available and are being used by the independent hotels.

      Our hotels’ franchise agreements expire at various dates through February 25, 2022, which, in some cases, may be extended for additional terms. The franchise agreements generally impose certain management, operational, record-keeping, accounting, reporting and marketing standards and procedures with which the franchised operator must comply. Some of the key provisions of the franchise agreements include the following:

	•	The franchise agreements provide for early termination at the franchisor’s option on the occurrence of certain events of default, such as the failure to properly maintain the hotel.
	•	Notification must be given to the franchisor upon the sale of a hotel giving the franchisor rights, as defined in its franchise agreement, ranging from consent to the transfer of ownership, the franchisor’s ability to match an offer for sale, or the right to terminate the franchise agreement. Several of the franchise agreements can be terminated upon sale by the franchisee.

Operator Strategy

      In selecting operators, we seek hotel managers with demonstrated full-service hotel expertise, a stable operating and financial performance history, an excellent reputation in the hospitality industry, an ability to introduce additional acquisition opportunities to us and to manage additional hotels for us.

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      As of March 19, 2002, the hotels in our portfolio were operated by the following entities:

      Robert W. Boykin (our Chairman of the Board and Chief Executive Officer) and his brother, John E. Boykin, control BMC. BMC has continued the over 40-year hotel operation and management business of the Boykin Group. The Boykin Group has capabilities in all phases of development and management of hotel properties. BMC currently manages 20 properties containing 5,172 guest rooms located throughout the United States, including 17 hotels owned by us. BMC’s subsidiaries, which conduct management activities for owners other than us, include an award-winning hotel interior design business and a hotel and restaurant food, beverage, supply and equipment purchasing business.

      BMC and its owners, who have a substantial interest in the Partnership, have interests that conflict with our interests in connection with the structuring and enforcement of the management agreements and other agreements between us and BMC and in connection with activities that may maximize profits for BMC without necessarily benefiting us. We have implemented several measures, including those listed below, to align the interests of BMC and its owners with our interests and to address these conflicts of interest:

	•	BMC’s owners have retained their equity interests in the Partnership;
	•	Our corporate charter documents require that our independent directors shall make all determinations to be made on behalf of Boykin Lodging Company with respect to the relationships or opportunities that represent a conflict of interest for any officer or director of Boykin Lodging Company as such;
	•	Any affiliate of the Boykin Group will conduct all hotel acquisition, development and ownership activities only through Boykin Lodging Company;
	•	Beginning in 2002, BMC is entitled to receive incentive management fees with respect to each hotel it manages for us if the gross operating profit at the hotel is in excess of the budgeted gross operating profit for such hotel;
	•	BMC has contractually agreed to provide an incentive to its corporate-level senior executive team by allocating the first portion (equal to one-eighth of one percent of total revenues) of the incentive fee paid under the management agreements to a bonus pool to be paid to the corporate executives, thereby aligning the corporate executives with us and our goal of maximizing gross operating profit; and
	•	BMC has a deferred compensation plan for its corporate-level senior executives, under which the value of each award is based on, and fluctuates with, the value of our common shares.

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

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

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

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

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

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

      The management agreements have the material terms described below:

	•	Duration/Termination. The BMC and Meristar agreements have terms ranging from two years and nine months to eight years. We have the right to terminate each of these agreements upon 90 days advance written notice without having to pay any damages or a termination fee or penalty. The operator does not have the right to terminate prior to expiration of the term absent an event of default by us. The BMC and Meristar agreements do not contain renewal provisions. The DTWC agreement has an initial term which commenced on January 1, 1998 and continues until April 5, 2012. Thereafter, DTWC may extend the agreement for up to ten consecutive renewal terms of five years each. The DTWC agreement does not provide us with a right of termination absent an event of default by DTWC.
	•	Management Fees. Most of the agreements provide for base and incentive management fees. The base fee for each of the BMC managed hotels is 3% of total revenues and the incentive fee is 13.5% of the amount by which the gross operating profit for a hotel exceeds the agreed upon budgeted gross operating profit, up to a maximum of 1.125% of total revenues. The base fee for the Meristar managed hotels is 1.25% of total revenues. The base fee for DTWC is 3% of gross revenues. The DTWC incentive fee is equal to 15% to 25% of gross operating profit as defined in the agreement. The DTWC incentive fees may be deferred to the extent certain cash flow thresholds are not met and such fees which otherwise would have been deferred are instead eliminated after $6 million of incentive fees have been deferred. As of December 31, 2001, the $6 million deferred incentive fee threshold had been met.
	•	Operating and Other Expenses. All the agreements provide that we are responsible for all operating expenses associated with the hotels. In addition, we are responsible to either pay directly or reimburse the operator for all other expenses relating to the hotel including, without limitation, real estate taxes, insurance premiums and debt service.
	•	Indemnification. All the agreements provide that we will hold the operator harmless from and against all liabilities, losses, claims, damages, costs and expenses that arise from or in connection with (a) the performance of operator’s services under the agreement, (b) any act or omission (whether or not willful, tortious, or negligent) of us or any third party, (c) or any other occurrence related to the hotel, except for events that result from (i) the fraud, willful misconduct or gross negligence of operator or (ii) in the case of the BMC and Meristar agreements, the breach by operator of any provision of the agreement.

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	•	Events of Default. Events of default include (a) failure to make any payment required by the agreement, (b) failure to observe or perform any term or provision after 30 days’ notice to cure and, (c) in the case of BMC and Meristar, failure of either party to perform in accordance with the applicable franchise agreement.

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

      As of December 31, 2001, we had joint ventures formed with the following companies or their affiliates who operated and/or leased the following hotels:

      The aftermath of the terrorist attacks on September 11th and the ensuing period of sustained conflict has resulted in the hotel industry experiencing its worst revenue loss since the early 1930’s. The travel industry as a whole has been adversely impacted due to the industry being the vehicle utilized to perform the terrorist attacks. While the effect of heightened awareness and increased security measures has slowly allowed the industry to adjust to a new state of normalcy, uncertainty surrounding possible future terrorist attacks and the travel industry again being a target still looms. Due to the unprecedented nature of these events, the duration of the impact of September 11th on the hotel and travel industries is indeterminable.

      The principal competing factors for each of our hotels are (i) brand affiliation, (ii) room rates, (iii) customer service, (iv) location, and (v) the condition and upkeep of each hotel in general and in relation to other hotels in its local market. We believe that we are well positioned in each category. We have affiliated with a network of high quality franchisors or have utilized broad based reservation systems for our independent hotels. We believe that our operators’ emphasis on customer service and their strong and active “yield management” enable us to maximize revenues at each hotel. While new hotels in certain of our markets have caused us to experience lower than expected occupancies from some of our hotels, our hotels are generally located in areas that generate demand such as airport hotels, major tourist locations, and major cities or business centers. We also believe our strong commitment to regular capital improvements, including the replacement and refurbishment of furniture, fixtures and equipment, helps improve our competitive position.

      Each of our hotels is located in a developed area that includes other hotel properties. The occupancy, ADR and REVPAR of any hotel or any hotel property acquired in the future could be materially and adversely affected by the number of competitive hotel properties in its market area. Competition for potential acquisitions may

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      The operations at our hotels historically have been seasonal. Twenty-nine of the hotels maintain higher occupancy rates during the second and third quarters. Our four hotels in Florida experience their highest occupancy in the first quarter. This seasonality pattern can be expected to cause fluctuations in our quarterly cash flow received from hotel operations.

      We currently have fifteen employees. These employees perform, directly or through the Partnership, various acquisition, development, redevelopment and corporate management functions.

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

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

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

      Richard C. Conti has served as our Chief Operating Officer since May 1998. In January 2001, Mr. Conti was promoted to President and Chief Operating Officer. Prior to joining us, Mr. Conti was a Principal and Director with Coopers & Lybrand L.L.P. Mr. Conti was responsible for Coopers & Lybrand L.L.P.’s hospitality consulting practice in the Midwest and has been involved in the hospitality industry for over 22 years. Mr. Conti has worked closely with many of the leaders in the industry and brings to us a wealth of industry knowledge and contacts.

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

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

      Andrew C. Alexander became our Vice President-Corporate Counsel in July 1997 and was promoted to Senior Vice President and General Counsel in June 1999. From July 1995 until July 1997, Mr. Alexander served as Vice President-Corporate Counsel of Renaissance Hotel Group, N.V., a publicly traded hotel company. From

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

      Under various federal, state and local laws, ordinances, and regulations, an owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances or petroleum on, under or in the property. This liability may be imposed without regard to whether the owner or operator knew of, or was responsible for, the presence of the substances. Other federal, state and local laws, ordinances and regulations and the common law impose on owners and operators certain requirements regarding conditions and activities that may affect human health or the environment. Failure to comply with applicable requirements could result in difficulty in the lease or sale of any affected property or the imposition of monetary penalties, in addition to the costs required to achieve compliance and potential liability to third parties. We may be potentially liable for such costs or claims in connection with the ownership and operation of the current hotels and hotels we may acquire in the future.

      We have not been notified by any governmental authority, nor are we otherwise aware, of any material noncompliance, liability or claim relating to hazardous or toxic substances or to other environmental matters in connection with any of our hotels. Nonetheless, it is possible that material environmental contamination or conditions exist, or could arise in the future, in the hotels or on the land upon which they are located which could create a material environmental liability. Further, there can be no assurance that the hotels that we may acquire will not give rise to any material environmental liability.

      All of our operations are conducted in the United States.

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(a) Hotel Properties

      As of March 19, 2002, we own interests in the following 33 hotel properties:

(b) Office Space

      Pursuant to a shared services and office space agreement, we paid BMC approximately $4,950 per month in 2001 for the right to use certain office space and receive certain related services.

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

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

PART II

(a) Market Information

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

(b) Shareholder Information

      As of March 19, 2002, there were 910 record holders of our common shares, including shares held in “street name” by nominees who are record holders, and approximately 14,200 beneficial owners.

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

(c) Dividend and Distribution Information

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

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      As a result of the recent economic downturn in the hotel industry that was exacerbated by the terrorist attacks on September 11th, and its adverse impact on our cash flow from operations, our Board of Directors suspended our fourth-quarter 2001 and first-quarter 2002 dividends. Based on our current REVPAR and cash flow expectations for 2002, we expect that management will recommend to the Board to resume the dividend for the third quarter of 2002, payable during the fourth quarter, but at a level significantly lower than historical levels. We hope to be in a position to distribute approximately 40% to 50% of our annualized funds from operations (“FFO”) per share going forward, or approximately $0.18 per share for the third-quarter payment based on the low end of our current FFO guidance. There can be no assurance that we will make any such future distributions.

(d) Sales of Unregistered Securities

      Not applicable.

(e) Use of Proceeds from Sales of Registered Securities

      Not applicable.

      The following tables set forth selected historical operating and financial data for Boykin Lodging Company and BMC. The selected historical financial data has been derived from the historical financial statements of Boykin and BMC, as audited by Arthur Andersen LLP, independent public accountants.

      The following selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and all of the financial statements and notes thereto included elsewhere in this Form 10-K.

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BOYKIN LODGING COMPANY

SELECTED HISTORICAL OPERATING AND FINANCIAL DATA

(amounts in thousands, except for per share data)

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(a)

The White Paper on Funds From Operations approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) in October 1999 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 unconsolidated entities and joint ventures. We believe that FFO is helpful to investors as a measure of the performance of an equity REIT because, along with cash flow from operating, financing and investing activities, it provides investors with an indication of our ability to incur and service debt, make capital expenditures and fund other cash needs.

We compute FFO in accordance with 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 management’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 income (loss) and FFO (in thousands):

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BOYKIN MANAGEMENT COMPANY

SELECTED HISTORICAL OPERATING DATA

(amounts in thousands)

Boykin’s Formation and Significant Events

      Boykin Lodging Company was formed and completed an initial public offering in 1996 to continue and expand the over 40-year history of hotel ownership, acquisition, redevelopment and repositioning activities of its predecessors, Boykin Management Company and its affiliates (the “Boykin Group”). Boykin Hotel Properties, L.P., an Ohio limited partnership (the “Partnership”), is the operating partnership entity that transacts business and holds the direct and indirect ownership interests in our hotels. As of March 19, 2002, Boykin Lodging Company has an 85.0% ownership interest in, is the sole general partner of and does all its business through the Partnership.

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

	•	We currently have strategic alliances with four hotel operators and own four hotels with them through joint venture structures. In 1999, we also formed a joint venture with AEW Partners III, L.P. (“AEW”) and, through that joint venture, we purchased a hotel located in downtown Chicago.
	•	At the end of 2001, we had $319.0 million of debt outstanding under various debt instruments.
	•	Effective January 1, 2002, we took advantage of the restructuring available under the REIT Modernization Act and acquired leasehold interests in 28 hotels from two of our operators. Following this transaction, 31 of our 33 hotels are operated under the taxable REIT subsidiary (“TRS”) structure whereby the hotels are leased to a wholly owned subsidiary of the Partnership.

      At the end of 2001, we owned interests in 33 hotels containing a total of 9,249 guestrooms located in 19 different states. Upon completion of the renovation and rebranding of the Lyndhurst, New Jersey property to a Courtyard by Marriott in February 2002, an additional eight rooms were available at the property, thereby increasing our number of guestrooms to 9,257.

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Significant Accounting Policies

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

	•	Revenue recognition. Through December 31, 2001, our principal source of revenue was lease payments from lessees pursuant to percentage lease agreements. Percentage lease revenue is based upon the room, food and beverage and other revenues of our hotels. We recognize lease revenue for interim and annual reporting purposes on an accrual basis pursuant to the terms of the respective percentage leases and on an interim basis in accordance with the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 101 “Revenue Recognition in Financial Statements.” Under the provisions of SAB No. 101, a portion of our percentage lease revenues, which historically were recognized in the first, second, and third quarters, are deferred and recognized in the fourth quarter. SAB No. 101 impacts the interim reporting of revenues related to our leases, but has no impact on interim cash flow or year-end results of operations. In 2002 and beyond, SAB No. 101 only impacts the consolidated statement of operations for the lease revenues related to the two hotels not operated under the TRS structure as lease revenues from hotels operated under the TRS will be eliminated in consolidation.
		Commencing in 2002, as a result of the TRS transaction, our principal source of revenue is the revenues generated from hotel operations. The rooms, food and beverage and other revenue of the hotels are recognized as the services are provided.

	•	Impairment of long-lived assets. We review our hotel properties for impairment whenever events or changes in circumstances indicate the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause us to perform our review include, but are not limited to, adverse changes in the demand for lodging at our properties due to declining national or local economic conditions and/or new hotel construction in markets where our hotels are located. When such conditions exist, management performs an analysis to determine if the estimated 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 fourth quarter of 2001 and 2000, we recorded charges of $24,000 and $7,000, respectively, for unrealized losses on the carrying value of several hotels due to their book value exceeding their net realizable value. We do not believe that there are any factors or circumstances indicating impairment of any other of our investments in hotel properties at this time.
		We estimate the fair market values of our properties through a combination of 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 inflationary increases 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, cap rate, ratio of selling price to gross hotel revenues and selling price per room.
		If actual conditions differ from those in our assumptions, the actual results of each asset’s future operations and fair market value could be significantly different from the estimated results and value used in our analysis. Our operating results are also subject to the risks set forth under Item 7 of this Form 10-K.
	•	Use of estimates. The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make certain estimates and assumptions that we believe are reasonable based upon the current information available. These estimates

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		and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented.

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

Results of Operations

      The following discusses our historical results of operations for 2001 compared to 2000 and 2000 compared to 1999. Because the rent we collected from BMC and its subsidiaries constituted a significant portion of our lease revenues in these periods, we believe that a discussion of the historical operations of BMC is also important to understand our business.

Boykin Lodging Company

      Our percentage lease revenue decreased 16.1% to $72.0 million from $85.9 million in 2000 due to a 9.3% decrease in consolidated hotel revenues. Our percentage lease revenue is driven by hotel revenues which are, in turn, driven by average daily rate (“ADR”), occupancy, and room revenue per available room (“REVPAR”). The following table sets forth the operating data of the hotels owned by us as of December 31, 2001 (including those owned by unconsolidated joint ventures), without regard to when we acquired the hotels.

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

(b)	Includes hotels we owned in both periods.

      The decrease in hotel revenues from the prior year, and resultant decrease in our lease revenues, resulted from the weak hotel operating environment. During the first eight months of 2001, lodging demand declined modestly due to the softening economy; following September 11th, the decline in demand was more severe. Another factor contributing to the decrease in revenues was the sale of the Daytona Beach Radisson Resort in January 2001, which generated lease revenues of $1.7 million in 2000. Additionally, in February 2000, we took over the Radisson Hotel Mt. Laurel. In 2000, we recorded lease revenue of $.3 million related to Mt. Laurel. Since the take over and throughout 2001, instead of percentage lease revenues, Mt. Laurel’s hotel revenues and expenses are reflected in the results of operations. Percentage lease revenue payable by related parties, BMC and Westboy, represented $60.2 million, or 83.7% of the total percentage lease revenue in 2001, compared to $71.9 million, or 83.8% of total percentage lease revenue, in 2000.

      The net loss of $29.6 million in 2001 versus net income of $7.7 million in 2000 resulted from, among other things, the following:

	•	a one-time $15.0 million charge related to the acquisition and termination of 28 leasehold interests, of which $11.4 million was non-cash;
	•	a $24.0 million non-cash charge to reduce the carrying value of eight properties to their net realizable value;
	•	a charge of $.4 million for the one-time effect of a change in accounting principle related to the write-down of a derivative asset pursuant to the adoption of SFAS No. 133; and,

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	•	a gain on property insurance recovery of $.4 million recorded in 2000 related to property damage at our two Melbourne, Florida hotels.

      These items were offset by reduced expenses or additional income in 2001 due to:

	•	minority interest income of $3.0 million due to the net losses incurred by the Partnership versus minority interest expense of $.9 million in 2000;
	•	a $1.9 million decrease in real estate related depreciation and amortization primarily related to three assets for which no depreciation was charged while they were classified as held for sale through the first three quarters of 2001 and the sale of the Daytona property in January 2001 for which approximately $.5 million of depreciation was recorded in 2000;
	•	a $2.4 million decrease in interest expense due to significant decreases in interest rates on outstanding borrowings;
	•	a $.2 million gain on the sale of our Daytona Beach Radisson Resort in January 2001; and
	•	the non-recurring $.7 million extraordinary loss on extinguishment of debt in 2000.

      Our FFO in 2001 was $36.2 million compared to $46.0 million in 2000. For a definition of FFO, reconciliation of net income to FFO and discussion of why we believe FFO is an important measure to investors of a REIT’s financial performance, please see Item 6 “Selected Financial Data” on page 15.

      Our percentage lease revenue increased to $85.9 million in 2000 from $85.3 million in 1999. This increase was due to increased percentage lease revenues from our lessees of $2.4 million, offset by a $1.8 million decrease in percentage lease revenue attributable to our foreclosure of the Radisson Hotel Mt. Laurel lease in February 2000 from the prior lessee. Instead of percentage lease revenues, the hotel’s revenues of $6.7 million and hotel operating expenses of $5.4 million are reflected in the results of operations in 2000. The overall impact of the foreclosure was a decrease in net income of $.7 million in 2000. Percentage lease revenue payable by BMC is $71.9 million, or 83.8% of total percentage lease revenue in 2000, compared to $70.9 million, or 83.1% of percentage lease revenues 1999.

      The main driver of our percentage lease revenues is hotel revenues, which are driven by ADR, occupancy, and REVPAR. For all hotels owned by us as of December 31, 2000 (including the unconsolidated Executive Plaza Hotel), there was a 2.1% increase in REVPAR compared to 1999.

      Income before minority interests and extraordinary item decreased from $19.7 million in 1999 to $9.3 million in 2000. As a percent of total revenues, income before minority interests and extraordinary item decreased to 10.0% in 2000 from 22.9% in 1999, primarily resulting from:

	•	a $7.0 million charge for unrealized losses on the carrying value of certain Doubletree hotels;
	•	an increase in interest expense to $24.3 million in 2000, or 25.9% of total revenues, compared to $20.6 million, or 23.9%, in 1999, primarily due to higher interest rates and an increase in the average outstanding debt balances in 2000; and
	•	an increase in real estate related depreciation and amortization, as a percent of percentage lease revenue, to 35.4% in 2000 from 33.9% in 1999.

      Increased capital expenditures from renovations increased depreciation expense in 2000 over 1999. Higher interest rates on our variable rate debt, which increased to approximately 8.4% in 2000 from 7.0% in 1999, along with higher average outstanding debt balances, caused interest expense to increase over 1999.

      Net income was $7.7 million in 2000 compared to $18.1 million in 1999. As a percent of total revenue, net income decreased from 21.0% in 1999 to 8.2% in 2000. Minority interest applicable to the operating partnership and joint venture partnerships included in income before extraordinary item was $.9 million in 2000, or 1% of total revenues, compared to $1.6 million, or 1.9% in 1999. The extraordinary loss (net of minority interest of $59)

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BMC

      For the year ended December 31, 2001, BMC had hotel revenues of $232.5 million compared to $266.7 million in 2000. The decrease was primarily due to the events of September 11th and the slowdown in travel in the subsequent months combined with the continued softening demand as a result of the slowing economy. The sale of the Daytona Beach Radisson Resort in January 2001 also contributed to the decrease in hotel revenues, as $5.5 million of revenues were recorded in 2000 versus $.1 million in 2001.

      Percentage lease expense during 2001 was $64.2 million, or 27.6% of hotel revenues, compared to $78.8 million, or 29.5% of hotel revenues, in 2000. Departmental and other hotel operating expenses, consisting primarily of rooms expenses, food and beverage costs, franchise fees, utilities, repairs and maintenance, and other general and administrative expenses of the hotels were $169.4 million in 2001 compared to $187.2 million in 2000. As a percent of hotel revenues, the departmental and other hotel operating expenses increased to 72.9% in 2001 from 70.2% in 2000, because of falloff in demand during 2001.

      For the year ended December 31, 2000, BMC had hotel revenues of $266.7 million compared to $252.4 million in 1999. The increase was primarily due to the addition of the Executive Plaza Hotel in which a subsidiary of BMC commenced operations at the end of August 1999.

      Percentage lease expense during 2000 was $78.8 million, or 29.5% of hotel revenues, compared to $73.3 million, or 29.0% of hotel revenues, in 1999. Departmental and other hotel operating expenses, consisting primarily of rooms expenses, food and beverage costs, franchise fees, utilities, repairs and maintenance, and other general and administrative expenses of the hotels, were $187.2 million in 2000 compared to $178.6 million in 1999. As a percent of hotel revenues, the departmental and other hotel operating expenses decreased to 70.2% in 2000 from 70.7% in 1999, because of increases in hotel revenues at a higher rate relative to increased expenses incurred.

Liquidity and Capital Resources

      Historically, our primary source of cash to meet our cash requirements, including distributions to shareholders, was our share of the Partnership’s cash flow from the percentage leases. The lessees’ obligations under the percentage leases were largely unsecured and the lessees’ ability to make rent payments to the Partnership under the percentage leases was substantially dependent upon the lessees’ ability to generate sufficient cash flow from the operation of the hotels. Going forward, under the TRS structure, our primary source of cash will be our share of the Partnership’s cash flow from the operations of the hotels.

      As of December 31, 2001, we had $3.6 million of unrestricted cash and cash equivalents, and $9.4 million of restricted cash for the payment of capital expenditures, real estate tax and insurance. We had outstanding borrowings totaling $39.0 million and $280.0 million against our credit facility and term notes payable, respectively.

      As of December 31, 2001, we had a $100 million credit facility available, as limited under terms of the credit agreement, to fund acquisitions of additional hotels, renovations and capital expenditures, and for our working capital needs. For information relating to the terms of our credit facility and our $130 million, $45 million, and $108 million term notes payable, please see Notes 5 and 6, respectively, of the Notes to Consolidated Financial Statements of Boykin Lodging Company included in this Form 10-K.

      Our $130 million and $108 million term notes payable are property-specific mortgages and pose no covenant compliance issues. The $39 million drawn on the credit facility as of December 31, 2001 and the $45 million term note contain covenant formulas regarding our overall leverage and debt service coverage. As anticipated, at

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      The terms of the amendment to our credit facility contain more restrictive provisions than before relative to, among other things, our acquisition and capital expenditure activity, as well as the amount of distributions we may pay out. Specifically, we may only use up to $5 million of proceeds under our credit facility for new acquisitions and, except for the ability to complete our renovations and expansion projects at our Chicago, Meadowlands and Pink Shell properties, our capital expenditures may not exceed 5% of our total hotel revenues. In addition, dividends on our common shares can not exceed the lesser of 50% of our FFO or $3.8 million per quarter, subject to certain exceptions, one being that we are entitled to distribute up to 100% of REIT taxable income. The terms of the amendments also provide that these restrictions may cease once our financial covenant tests are back in line with the thresholds provided for in the original credit facility agreements. Based upon our current REVPAR and cash flow expectations, we expect to be in compliance with our covenants under the amended facilities throughout 2002. We can not guarantee that our actual results will not differ materially from our expectations.

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

      The impact of the recent weak hotel operating environment and the events of September 11th on our cash flow and balance sheet has been dramatic. We suspended the fourth quarter 2001 dividend and recently announced that the suspension would continue through the first quarter 2002. At this time, based on our current REVPAR and cash flow expectations, we anticipate that we will reinstate our dividend for the third quarter of 2002, payable during the fourth quarter, but at a level significantly lower than historical levels. We hope to be in a position to distribute approximately 40% to 50% of our annualized FFO per share going forward, or approximately $0.18 per share for the third-quarter payment based on the low end of our current FFO guidance. Our priorities are to conserve cash and maintain our leverage to allow us to take advantage of opportunities in the marketplace.

      In 2002, we expect to spend approximately $13 million in renovations at our hotels, excluding the Pink Shell and Chicago Executive Plaza projects discussed below. This amount primarily includes planned refurbishments and replacements at selected existing hotels. We expect to use cash available from operations and restricted capital expenditure reserves, as well as borrowings under our line or credit to fund our 2002 renovations.

      We also continue to work on an expansion project at the Pink Shell Beach Resort, which would increase the resort by 39 rooms. Although we are not obligated at this point to proceed with the project, our plan would be to demolish 53 cottage units, or about 25% of the rooms at the resort. We would then construct a 92-unit tower called White Sand Villas that would significantly upgrade the character of the resort. The units in the new tower would be sold as condominiums, with the expectation that the owners would put their unused room nights back to the resort by contract. We anticipate that we will only proceed with the approximate $27 million expansion project when we have enough pre-sales of these units to fund our construction costs and we have secured financing.

      Our approximate $20 million renovation of the Chicago Executive Plaza hotel is scheduled for completion in the third quarter of 2002. During 2001, the joint venture which owns the property spent approximately $5 million

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      We have an active shelf registration statement with the Securities and Exchange Commission for the issuance of up to $187.5 million in securities. Securities issued under this registration statement may be preferred shares, depository shares, common shares or any combination thereof, and may be issued at different times, depending on market conditions. Warrants to purchase these securities may also be issued. The terms of issuance of any securities covered by this registration statement would be determined at the time of their offering.

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. Twenty-nine of our hotels maintain higher occupancy rates during the second and third quarters. The four hotels located in Florida experience their highest occupancy in the first quarter. This seasonality pattern can be expected to cause fluctuations in our quarterly cash flow received from hotel operations.

Competition and Other Economic Factors

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

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

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

New Accounting Pronouncements

      Effective January 1, 2001, we adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities”. This statement requires companies to carry all derivative instruments including embedded derivatives in the balance sheet at fair value.

      During 2001, the Financial Accounting Standards Board issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. SFAS No. 144 supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of”. SFAS No. 144 also established a single accounting model for long-lived assets to be disposed of by sale. We are currently in the process of evaluating the effect this new standard will have on our consolidated financial position or results of operations, if any. See Footnote 2 to the Consolidated Financial Statements for further information.

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Interest Rate Risk

      Our primary market risk exposure consists of changes in interest rates on borrowings under our debt instruments that bear interest at variable rates that fluctuate with market interest rates. These debt instruments include our $65 million secured credit facility, our $45 million secured term loan, our $108 million secured term loan and our share of floating rate debt under our unconsolidated joint ventures of $19.7 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 on fixed rate loans. Our $130 million, 6.9% fixed rate term note allows us to minimize our interest rate risk exposure. In March 2001, we also purchased interest protection on $83 million of our floating rate debt that fixes the overall interest rate on this debt at 7.32%. Approximately 66% of our outstanding debt at December 31, 2001 is fixed-rate in nature, compared with 41% at the end of 2000. The weighted average interest rate of our variable rate debt was 5.1% as of December 31, 2001.

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

      We do not believe that changes in market interest rates will have a material impact on the performance or fair value of our hotel portfolio as the value of our hotel portfolio is based primarily on the operating cash flow of the hotels, before interest expense charges. However, a change of 1/4% in the index rate to which our variable rate debt is tied would change our annual interest incurred by $.3 million, based upon the balances outstanding on our variable rate instruments at December 31, 2001.

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

      Not applicable.

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PART III

      The information required by this Item 10 is incorporated by reference to the information under the headings “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” contained in Boykin’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held on May 30, 2002, and the information under the heading “Executive Officers” in Part I of this Annual Report on Form 10-K.

      The information required by this Item 11 is incorporated by reference to the information under the heading “Executive Compensation” contained in Boykin’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held on May 30, 2002.

      The information required by this Item 12 is incorporated by reference to the information under the heading “Security Ownership of Certain Beneficial Owners and Management” contained in Boykin’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held on May 30, 2002.

      The information required by this Item 13 is incorporated by reference to the information under the heading “Transactions with Management” contained in Boykin’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held on May 30, 2002.

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BOYKIN LODGING COMPANY

INDEX TO FINANCIAL STATEMENTS

F-1

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of

      We have audited the accompanying consolidated balance sheets of Boykin Lodging Company (an Ohio corporation) and subsidiaries as of December 31, 2001 and 2000 and the related consolidated statements of operations and comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements and the schedule referred to below are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

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

      In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Boykin Lodging Company and subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.

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

      Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed in the index to financial statements is the responsibility of Boykin Lodging Company’s management and is presented for purposes of complying with the Securities and Exchange Commission’s rules and is not part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Cleveland, Ohio,

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BOYKIN LODGING COMPANY

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2001 AND 2000

(dollar amounts in thousands)