<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report: April 4, 1997
(Date of earliest event reported)
Boykin Lodging Company
----------------------
(Exact Name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Ohio 001-11975 34-1824586
---- --------- ----------
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification
Incorporation) Number)
</TABLE>
Terminal Tower, Suite 1500, 50 Public Square, Cleveland, Ohio 44113-2258
------------------------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(216) 241-6375
--------------
(registrant's telephone number, including area code)
<PAGE> 2
THIS FORM 8-K HAS BEEN AMENDED TO INCLUDE THE FINANCIAL
STATEMENTS AND PRO FORMA FINANCIAL INFORMATION OMITTED FROM
THE INITIAL REPORT ON FORM 8-K FILED ON APRIL 21, 1997.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
- --------------------------------------------
French Lick, Indiana business purchase
- --------------------------------------
On April 4, 1997, the Company acquired the French Lick Springs Resort
in French Lick, Indiana. The acquisition price was $20 million and was funded
with cash proceeds from the Company's secured line of credit obtained in
November 1996 from a lending syndicate led by Lehman Brothers Holdings, Inc. The
seller was French Lick Springs Resort, Inc., a privately held corporation.
Neither the Company nor any of its shareholders, directors or officers own any
interests in the seller.
The independent resort, opened in 1904, contains 485 guest rooms in
four and six story guest wings, has approximately 60,000 square feet of meeting
space including a 24,000 square foot exhibit hall, an 88 seat gourmet dining
room, a 300 seat family dining room, a 100 seat country club dining room and
lounge, a 175 seat Bistro, a 600 seat showroom, the 60 seat Derby bar, several
retail shops, indoor and outdoor pools, a six lane bowling alley, complete spa
facilities (including mineral baths, massages, facials, hair styling and
exercise equipment), two 18 hole golf courses, indoor and outdoor tennis
facilities, horseback riding trails and other full service resort hotel
amenities. The purchase includes approximately 2,050 acres of land, six main
buildings, and several outbuildings.
The Company has leased the resort to Boykin Management Company Limited
Liability Company (the Lessee), an entity in which the Company's chairman and
chief executive officer, Robert W. Boykin, owns a 53.8% interest. The Lessee
will continue the business of operating the resort.
In determining the price to be paid for the resort, the Company
considered the historical and expected cash flow from the hotel, the nature of
the occupancy and average daily rate trends, current operating costs and taxes,
the physical condition of the property, the potential to increase its cash flow
and other factors including the sales prices of similar properties. No
independent appraisal of the resort was performed in connection with the
acquisition.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Boykin Lodging Company:
We have audited the accompanying balance sheets of the French Lick Springs
Resort, Inc. as of December 31, 1995 and 1996 and the related statements of
income, shareholder's equity and cash flows for each of the three years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 the French Lick Springs Resort,
Inc. as of December 31, 1995 and 1996 and the results of their operations and
their cash flows for each of the three years in the period ended December 31,
1996, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Cleveland, Ohio,
May 16, 1997.
<PAGE> 4
FRENCH LICK SPRINGS RESORT, INC.
--------------------------------
BALANCE SHEETS
--------------
DECEMBER 31, 1995 AND 1996
--------------------------
<TABLE>
<CAPTION>
1995 1996
---------- ----------
ASSETS
------
<S> <C> <C>
INVESTMENT IN HOTEL PROPERTY, at cost:
Land $1,089,081 $1,089,081
Buildings and improvements 2,517,040 2,574,254
Furniture and equipment 3,390,703 3,490,202
---------- ----------
6,996,824 7,153,537
Less-Accumulated depreciation 2,462,164 3,236,605
--------- ----------
Net investment in hotel property 4,534,660 3,916,932
---------- ----------
CASH AND CASH EQUIVALENTS 559,658 717,049
ACCOUNTS RECEIVABLE, net of bad debt reserve of
$9,500 and $8,100 at December 31, 1995 and 1996,
respectively 305,201 294,616
DUE FROM RELATED PARTIES 362,392 112,967
INVENTORIES 238,977 245,078
PREPAIDS AND OTHER ASSETS 115,603 123,005
---------- ----------
$6,116,491 $5,409,647
========== ==========
LIABILITIES AND SHAREHOLDER'S EQUITY
------------------------------------
LONG TERM DEBT $3,822,060 $ 542,050
NOTE PAYABLE DUE RELATED PARTY - 1,500,000
ACCOUNTS PAYABLE 291,266 385,040
ACCRUED REAL ESTATE AND PERSONAL
PROPERTY TAXES 256,312 269,113
ACCRUED DISTRIBUTIONS TO SHAREHOLDER - 51,300
OTHER ACCRUED EXPENSES AND LIABILITIES 292,496 352,141
COMMITMENTS AND CONTINGENCIES
---------- ----------
4,662,134 3,099,644
---------- ----------
</TABLE>
<PAGE> 5
-2-
<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
SHAREHOLDER'S EQUITY:
Common stock, 1,000 shares authorized, $10 stated value, 100
shares issued and outstanding $ 1,000 $ 1,000
Retained earnings 1,453,357 2,309,003
---------- ----------
1,454,357 2,310,003
---------- ----------
$6,116,491 $5,409,647
========== ==========
</TABLE>
The accompanying notes to financial statements are an
integral part of these balance sheets.
<PAGE> 6
FRENCH LICK SPRINGS RESORT, INC.
--------------------------------
STATEMENTS OF INCOME
--------------------
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
----------------------------------------------------
<TABLE>
<CAPTION>
1994 1995 1996
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES:
Room revenue $ 4,147,908 $ 4,125,953 $ 4,266,643
Food and beverage revenue 4,187,994 3,978,642 4,253,615
Other revenue 2,712,075 2,638,873 2,577,614
------------ ------------ ------------
Total revenues 11,047,977 10,743,468 11,097,872
------------ ------------ ------------
EXPENSES:
Departmental expenses-
Rooms 922,504 933,354 1,021,159
Food and beverage 2,619,549 2,552,028 2,799,061
Other 1,426,385 1,470,065 1,464,139
General and administrative 866,501 788,575 823,809
Advertising and promotion 482,047 455,104 486,395
Utilities 601,823 585,387 695,780
Repairs and maintenance 869,390 759,569 694,938
Real estate and personal property taxes,
insurance and rent 342,938 339,442 360,690
Interest expense 193,174 207,082 188,165
Depreciation and amortization 673,569 796,176 787,475
Gain on property insurance recovery -- -- (290,000)
Other 118,552 136,164 122,178
------------ ------------ ------------
Total expenses 9,116,432 9,022,946 9,153,789
------------ ------------ ------------
NET INCOME $ 1,931,545 $ 1,720,522 $ 1,944,083
============ ============ ============
</TABLE>
The accompanying notes to financial statements are an
integral part of these statements.
<PAGE> 7
FRENCH LICK SPRINGS RESORT, INC.
--------------------------------
STATEMENTS OF SHAREHOLDER'S EQUITY
----------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
----------------------------------------------------
<TABLE>
<CAPTION>
Common Retained
Stock Earnings
----------- -----------
<S> <C> <C>
BALANCE, DECEMBER 31, 1993 $ 1,000 $ 1,132,490
Net income -- 1,931,545
Cash distributions -- (1,542,000)
----------- -----------
BALANCE, DECEMBER 31, 1994 1,000 1,522,035
Net income -- 1,720,522
Cash distributions -- (1,789,200)
----------- -----------
BALANCE, DECEMBER 31, 1995 1,000 1,453,357
Net income -- 1,944,083
Cash distributions -- (1,088,437)
----------- -----------
BALANCE, DECEMBER 31, 1996 $ 1,000 $ 2,309,003
=========== ===========
</TABLE>
The accompanying notes to financial statements are an
integral part of these statements.
<PAGE> 8
FRENCH LICK SPRINGS RESORT, INC.
--------------------------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE YEARS ENDED DECEMBER 1994, 1995 AND 1996
------------------------------------------------
<TABLE>
<CAPTION>
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,931,545 $ 1,720,522 $ 1,944,083
Adjustments to reconcile net income to net cash
provided by operating activities-
Depreciation and amortization expense 673,569 796,176 787,475
Changes in assets and liabilities-
Accounts receivable (275,995) 218,103 10,585
Due from related parties (15,867) (346,525) 249,425
Inventories, prepaids and other assets 41,857 4,826 (13,503)
Accounts payable, accrued expenses and
other liabilities 64,412 (53,981) 166,220
----------- ----------- -----------
Net cash provided by operating activities 2,419,521 2,339,121 3,144,285
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of timber 392,500 - -
Improvements and additions to hotel property, net (1,125,187) (574,911) (169,747)
----------- ----------- -----------
Net cash used for investing activities (732,687) (574,911) (169,747)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long term borrowings 50,000 325,000 1,500,000
Principal payments on mortgage notes payable (40,649) (52,726) (3,280,010)
Distributions paid (1,542,000) (1,789,200) (1,037,137)
----------- ----------- -----------
Net cash used for financing
activities (1,532,649) (1,516,926) (2,817,147)
----------- ----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 154,185 247,284 157,391
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 158,189 312,374 559,658
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 312,374 $ 559,658 $ 717,049
=========== =========== ===========
</TABLE>
<PAGE> 9
-2-
<TABLE>
<CAPTION>
1994 1995 1996
----------- ------------ --------
<S> <C> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Interest paid $ 190,000 $ 199,000 $196,000
NONCASH INVESTING AND FINANCING
ACTIVITIES:
Accrued distributions to shareholder $ -- $ -- $ 51,300
</TABLE>
The accompanying notes to financial statements are an
integral part of these statements.
<PAGE> 10
FRENCH LICK SPRINGS RESORT, INC.
--------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1994, 1995 AND 1996
--------------------------------
1. BASIS OF PRESENTATION:
- -------------------------
French Lick Springs Resort (the Resort) was purchased by Boykin Lodging Company
(the Company) in April 1997 for $20 million from French Lick Springs Resort,
Inc.
The Resort consists of a 485-room hotel, two 18-hole golf courses, tennis
facilities, horseback riding trails, and other full service resort hotel
amenities.
The accompanying financial statements are prepared on the accrual basis of
accounting and include the accounts of the Resort using its historical cost
basis.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
- ----------------------------------------------
Investment in Hotel Property
- ----------------------------
Hotel property is stated at cost. Depreciation is computed using the
straight-line method based upon the following estimated useful lives:
<TABLE>
<S> <C>
Buildings 30 years
Building improvements 10 years
Furniture and equipment 5 years
</TABLE>
The shareholder and management of the Resort review the hotel property for
impairment when events or changes in circumstances indicate the carrying amount
of the hotel property may not be recoverable. When such conditions exist,
management estimates the future cash flows from operations and disposition of
the hotel property. If the estimated undiscounted future cash flows are less
than the carrying amount of the asset, an adjustment to the related estimated
fair market value would be recorded and an impairment loss would be recognized.
No such impairment losses have been recognized.
Maintenance and repairs are charged to operations as incurred; major
renewals and betterments are capitalized. Upon the sale or disposition of a
fixed asset, the asset and related accumulated depreciation are removed from the
accounts, and the gain or loss is included in the determination of net income.
Cash and Cash Equivalents
- -------------------------
All highly liquid investments with an original maturity date of three months or
less are considered to be cash equivalents.
Revenue Recognition
- -------------------
Revenue is recognized as earned. Ongoing credit evaluations are performed
and an allowance for potential credit losses is provided against the portion of
accounts receivable which is estimated to be uncollectible. Such losses have
been within management's expectations.
<PAGE> 11
-2-
Income Taxes
- ------------
The French Lick Springs Resort, Inc. is an S-Corporation and therefore is not
subject to federal or state income taxes; however, it must file informational
income tax returns and the shareholder must take income or loss of the Resort
into consideration when filing his respective tax returns.
Management's Use of Estimates in the
Preparation of Financial Statements
- -----------------------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. LONG-TERM DEBT:
- ------------------
<TABLE>
<CAPTION>
1995 1996
--------- ---------
<S> <C> <C>
Line of credit payable upon demand with quarterly
interest payments; the interest rate is variable and is
8.75% and 8.25% at December 31, 1995 and 1996,
respectively; secured by certain assets $335,000 $ 109,900
Promissory note due to Euro Canadian Bank, interest
was payable quarterly at a rate of 5.50%; the note was
retired in 1996 3,000,000 --
Promissory note due to the town of French Lick, Indiana
in monthly installments of principal and interest of
$5,500 at an interest rate of 5% and matures in March
2004. The note is collateralized by certain
real and personal property 447,060 402,150
Promissory note due to an unrelated individual, payable
in annual installments of $10,000 plus accrued interest
at a rate of 7%. The note is collateralized by certain
real property 40,000 30,000
--------- ---------
$3,822,060 $ 542,050
========== =========
</TABLE>
The above long-term debt was retired in connection with the Company's
acquisition of the Resort in April 1997.
4. GAIN ON PROPERTY INSURANCE RECOVERY:
- ---------------------------------------
During 1996, the Resort received proceeds of $290,000 from an insurance company
as settlement for property damage caused by an ice storm.
<PAGE> 12
-3-
5. RELATED PARTY TRANSACTIONS:
- ------------------------------
In 1995 and 1996, the Resort loaned funds to the son of the principal
shareholder, funding such loans through borrowings against the line of credit.
No principal repayment terms were specified on the loans. The loans bear
interest at the same rate as the line of credit. The Resort has recorded the
outstanding principal and accrued interest as of December 31, 1995 and 1996 as
amounts due from related parties.
During each of the three years presented herein, the Resort has advanced
amounts to the principal shareholder's family members for various purposes. Such
advances do not bear interest and no repayment terms were specified. The
outstanding balances as of December 31, 1995 and 1996 have been recorded as
amounts due from related parties.
In 1996, the Resort retired the note payable to Euro Canadian Bank. The
note repayment was funded partially with proceeds from a loan from the spouse of
the principal shareholder of the Resort. No principal repayment terms were
specified under the loan agreement. The loan bears interest at 8.75%. The Resort
has recorded the loan as a note payable due related party in the accompanying
balance sheets.
The following table summarized interest income and expense on related party
transactions for the years presented:
<TABLE>
<CAPTION>
1994 1995 1996
------- ------- --------
<S> <C> <C> <C>
Related party-
Interest income $ - $5,200 $ 8,400
Interest expense - - 79,200
</TABLE>
6. FAIR VALUE OF FINANCIAL INSTRUMENTS:
- ---------------------------------------
Statement of Financial Accounting Standards No. 107 requires disclosure about
fair value for all financial instruments, whether or not recognized for
financial statement purposes. Disclosure about fair value of financial
instruments is based on pertinent information available to management as of
December 31, 1996. Considerable judgment is necessary to interpret market data
and develop estimated fair value. Accordingly, the estimates presented herein
are not necessarily indicative of the amounts which could be realized on
disposition of the financial instruments. The use of different market
assumptions and/or estimation methodologies may have a material effect on the
estimated fair value amounts.
Cash Equivalents
- ----------------
Management estimates that the fair value of cash equivalents approximates
carrying value due to the relatively short maturity of these instruments.
Long-Term and Related Party Debt
- --------------------------------
Management estimates that the fair values of debt instruments approximate
carrying values based upon the Resort's effective borrowing rate for issuance of
debt with similar terms and remaining maturities.
<PAGE> 13
-4-
7. COMMITMENTS AND CONTINGENCIES:
- ---------------------------------
In 1996, certain union welfare-pension funds have issued a claim against French
Lick Springs Resort, Inc. for alleged delinquent contributions in the amount of
approximately $243,000 including interest and applicable expenses. The Resort is
contesting the claim, but the ultimate outcome of this matter is uncertain. The
Company assumed no obligation to satisfy this claim in the purchase agreement
and has been indemnified by French Lick Springs Resort, Inc. against any
liability in this regard. Accordingly, the Resort has not recorded any liability
or loss related to the claim in the accompanying financial statements.
<PAGE> 14
PRO FORMA FINANCIAL INFORMATION
-------------------------------
The following unaudited Pro Forma Consolidated Balance Sheet of Boykin Lodging
Company (the Company) as of March 31, 1997 is presented as if the acquisition of
the French Lick Springs Resort (the Resort) had been consummated as of March 31,
1997. The unaudited Pro Forma Consolidated Statements of Income of the Company
for the year ended December 31, 1996 and the three months ended March 31, 1997
are presented as if (i) the Company's initial public offering as of November 4,
1996 (the Offering) and the related formation transactions as discussed in the
Company's Form S-11, as amended, dated October 4, 1996, (ii) the acquisition of
the Holiday Inn Crabtree on March 19, 1997, and (iii) the acquisition of the
Resort had been consummated as of January 1, 1996. The pro forma information
does not reflect the acquisition of the Melbourne Beach Hilton which occured on
March 13, 1997. The pro forma information is not necessarily indicative of what
actual financial position or results of operations of the Company would have
been had such transactions been consummated as of the dates indicated, nor does
it purport to represent the financial position or results of operations for
future periods.
<PAGE> 15
BOYKIN LODGING COMPANY
----------------------
PRO FORMA CONSOLIDATED BALANCE SHEET
------------------------------------
AS OF MARCH 31, 1997
--------------------
(Unaudited, amounts in thousands)
<TABLE>
<CAPTION>
Historical Resort
Company Acquisition Pro Forma
----------- ------------- -----------
(A) (B) (C)
ASSETS
------
<S> <C> <C> <C>
INVESTMENTS IN HOTEL PROPERTIES, net $133,395 $ 20,000 $153,395
CASH AND CASH EQUIVALENTS 476 -- 476
RENT RECEIVABLE FROM THE LESSEE 2,172 -- 2,172
DEFERRED EXPENSES, net 1,480 -- 1,480
OTHER ASSETS 1,081 -- 1,081
-------- -------- --------
$138,604 $ 20,000 $158,604
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
BORROWINGS AGAINST CREDIT FACILITY $ 1,000 $ 20,000 $ 21,000
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 2,285 -- 2,285
DIVIDENDS/DISTRIBUTIONS PAYABLE 4,902 -- 4,902
DUE TO LESSEE 442 -- 442
MINORITY INTEREST IN PARTNERSHIP 13,869 -- 13,869
SHAREHOLDERS' EQUITY 116,106 -- 116,106
-------- -------- --------
$138,604 $ 20,000 $158,604
======== ======== ========
</TABLE>
See the accompanying notes to pro forma consolidated balance sheet.
<PAGE> 16
BOYKIN LODGING COMPANY
----------------------
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
---------------------------------------------
AS OF MARCH 31, 1997
--------------------
(Unaudited, amounts in thousands)
(A) Represents the Company's historical balance sheet as of March 31, 1997 as
reported in the Company's Form 10-Q for the three month period then ended.
(B) Represents the pro forma adjustments to reflect the Company's acquisition
of the Resort for $20,000 and the borrowing against the Credit Facility to
fund the purchase price.
<PAGE> 17
BOYKIN LODGING COMPANY
----------------------
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
(Unaudited, amounts in thousands except per share data)
<TABLE>
<CAPTION>
Holiday Inn
Historical Offering and Crabtree Resort Pro
Company Formation Acquisition Acquisition Forma
------------ --------------- -------------- ------------- -------
(A) (B) (C) (C)
<S> <C> <C> <C> <C> <C>
LEASE REVENUE $ 3,258 $ 24,553 $ 1,354 $ 3,000 $ 32,165
INTEREST INCOME 120 -- -- (120) --
-------- -------- -------- -------- --------
Total revenue 3,378 24,553 1,354 2,880 32,165
-------- -------- -------- -------- --------
REAL ESTATE RELATED DEPRECIATION AND
AMORTIZATION 1,344 6,792 279 819 9,234
REAL ESTATE AND PERSONAL PROPERTY TAXES,
INSURANCE AND GROUND RENT 620 3,438 88 361 4,507
GENERAL AND ADMINISTRATIVE 450 1,000 -- -- 1,450
INTEREST EXPENSE 54 (54) -- 1,688 1,688
AMORTIZATION OF DEFERRED FINANCING COSTS 69 367 -- -- 436
-------- -------- -------- -------- ---------
2,537 11,543 367 2,868 17,315
-------- -------- -------- -------- --------
INCOME BEFORE MINORITY INTEREST AND
EXTRAORDINARY ITEM 841 13,010 987 12 14,850
MINORITY INTEREST (40) (1,517) (153) (2) (1,712)
-------- -------- -------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM $ 801 $ 11,493 $ 834 $ 10 $ 13,138
======== ======== ======== ======== ========
INCOME PER SHARE BEFORE EXTRAORDINARY ITEM
$ .09 $ 1.38
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING 8,981 9,516
</TABLE>
See the accompanying notes to pro forma consolidated statements of income.
<PAGE> 18
BOYKIN LODGING COMPANY
----------------------
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
------------------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 1997
-----------------------------------------
(Unaudited, amounts in thousands except per share data)
<TABLE>
<CAPTION>
Holiday Inn
Historical Crabtree Resort Pro
Company Acquisition Acquisition Forma
------------ ----------- ----------- ---------
(A) (C) (C)
<S> <C> <C> <C> <C>
LEASE REVENUE $ 7,208 $ 246 $ 750 $ 8,204
INTEREST INCOME 231 -- (231) --
------- ------- ----- -------
Total revenue 7,439 246 519 8,204
------- ------- ----- -------
REAL ESTATE RELATED DEPRECIATION AND
AMORTIZATION 1,941 70 204 2,215
REAL ESTATE AND PERSONAL PROPERTY TAXES,
INSURANCE AND GROUND RENT 1,022 36 84 1,142
GENERAL AND ADMINISTRATIVE 488 -- -- 488
INTEREST EXPENSE 52 -- 370 422
AMORTIZATION OF DEFERRED FINANCING COSTS 109 -- -- 109
------- ------- ----- -------
3,612 106 658 4,376
------- ------- ----- -------
INCOME BEFORE MINORITY INTEREST AND
EXTRAORDINARY ITEM 3,827 140 (139) 3,828
MINORITY INTEREST (446) (22) 22 (446)
------- ------- ----- -------
NET INCOME BEFORE EXTRAORDINARY ITEM $ 3,381 $ 118 $(117) $ 3,382
======= ======= ===== =======
EARNINGS PER SHARE $ .36 $ .36
======= =======
WEIGHTED AVERAGE SHARES OUTSTANDING 9,516 9,516
</TABLE>
See the accompanying notes to pro forma consolidated statements of income.
<PAGE> 19
BOYKIN LODGING COMPANY
----------------------
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
----------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996 AND
----------------------------------------
THE THREE MONTHS ENDED MARCH 31, 1997
-------------------------------------
(Unaudited, amounts in thousands)
(A) With respect to the year ended December 31, 1996, reflects the
Company's historical consolidated statement of income for the period
November 4, 1996 (commencement of operations) through December 31, 1996.
With respect to the three months ended March 31, 1997, reflects the
Company's historical consolidated statement of income for the period
indicated.
(B) Represents pro forma adjustments to the Company's historical
consolidated statement of income for the year ended December 31, 1996 to
reflect the assumed consummation of the Offering and related formation
transactions as of January 1, 1996. For additional information, please see
pages F-1 through F-60 (Historical and Pro Forma Financial Statements) of
the Company's Form S-11, as amended, dated October 29, 1996, and the
Company's annual report on Form 10-K for the year ended December 31, 1996.
(C) Represents pro forma adjustments to reflect the assumed consummation of
the acquisitions of (i) the Resort, and (ii) the Holiday Inn Crabtree
(previously reported on Form 8-K dated March 21, 1997) as of January 1,
1996. The pro forma adjustments include the following:
1. Pro forma lease payments to the Partnership calculated on a pro forma
basis by applying the rent provision of the percentage lease agreements
to the historical revenues of the Resort and the Holiday Inn Crabtree for
the applicable period. As the hotel operating revenues will be earned by
the Lessee, historical hotel operating revenues of the acquired hotel
properties have not been reflected in the accompanying pro forma
consolidated income statements.
2. Pro forma depreciation of the buildings and improvements and furniture
and equipment of the Resort and the Holiday Inn Crabtree. Depreciation is
computed using the straight-line method and is based upon estimated
useful lives of 30 years for buildings and improvements and 7 years for
furniture and equipment. The purchase price allocation related to the
acquisition of the Resort and the Holiday Inn Crabtree, including
transaction related costs, was as follows:
<TABLE>
<CAPTION>
Holiday Inn
Resort Crabtree
--------- -----------
<S> <C> <C>
Land $ 2,000 $ 725
Buildings and improvements 16,000 6,534
Furniture and equipment 2,000 431
--------- --------
$20,000 $ 7,690
========= ========
</TABLE>
<PAGE> 20
-2-
3. Historical amounts of real estate and personal property taxes,
property and casualty insurance related to the Resort and the Holiday
Inn Crabtree to be paid by the Partnership. All other hotel operating
expenses will be incurred by the Lessee and, therefore,
historical amounts of such expenses have not been reflected in the
accompanying pro forma consolidated income statements.
4. Pro forma interest expense related to the $20,000 of borrowings
used to fund the acquisition of the Resort. Historical interest
income of the Company has been eliminated as after consummation
of the acquisition of the Resort and the Holiday Inn Crabtree, the
Company has no invested funds.
5. Minority interest related to the pro forma adjustments, calculated at
15.5%.
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused Amendment No. 1 to this report to be signed on
its behalf by the undersigned hereunto duly authorized.
BOYKIN LODGING COMPANY
Date: June 17, 1997 By: /s/ RAYMOND P. HEITLAND
Raymond P. Heitland, Chief Financial Officer
