Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good afternoon, and welcome to the Boykin Lodging Company conference call and webcast to discuss the second quarter 2005 financial results. This conference call is also being broadcast over the Internet at the Company's website www.boykinlodging.com. If you do not have a press release, and would like one, you can call the Company's offices at 216-430-1200 and ask for Gail. She will fax you a copy, or you can find it on the internet. On today's call from the Company are Robert Boykin, Chairman and Chief Executive Officer; Richard Conti, President and Chief Operating Officer; and Shereen Jones, Executive Vice President
and Chief Financial and Investment Officer.
Before turning the call over to management, I would like to remind you that you will hear forward-looking statements during this conference call. While management believes it's business plans are based on reasonable assumptions, there can be no assurance that any expectations that might arise from today's forward-looking statements and their underlying assumptions will be met. Comments and responses made during this conference call or discussions relating to the broadening of the Company's capabilities, its future growth, the potential impact of acquisitions, dispositions, business plans and goals and operating results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Additionally, words such as seek, intends, believes, plans, estimates, expects, and anticipates or the negative of these words and other similar expressions are forward-looking statements within the meaning of the Act. Some or all of the results anticipated in these forward-looking statements may not occur. Factors that could cause actual results to differ materially from expectations include financial performance, real estate conditions, execution of hotel acquisition and disposition plans, changes in local and national economic conditions, military actions, terrorism, hurricanes, changes in interest rates, and other similar risks. Further information on the Company's risk factors is contained in the Company's annual report on Form 10-K and other filings with the Securities and Exchange Commission. Additionally, during this call management may discuss or refer to nonGAAP financial measures such as FFO and EBITDA, which they believe to be useful to investors as a measure of the performance of the Company. You're cautioned that these measures should not considered as alternative to GAAP, net income, cash generated from operating activities, and as determined by GAAP or indicative of funds available to fund cash needs. You are referred to the reconciliation of these measures to GAAP measures contained within the Company's press release. I would now like to turn the floor over to Mr. Boykin.
ROBERT BOYKIN, CHAIRMAN, CEO, BOYKIN LODGING COMPANY: Thank you, operator. The second quarter was a good quarter for the hotels with RevPAR up 13.5% and margins up significantly. We're pleased to see the increase in our stock up 31% during the quarter from $9.53 at March 31st to 13.40 as of June 30th. We believe that management's efforts to upgrade the portfolio are resulting in improving returns for investors. Though FFO isn't yet demonstrating the results of the improved property operations primarily for three reasons. First, last year included profits from condo sales and this year doesn't. Secondly, our portfolio is smaller. We have sold properties and reduced debt by 46% compared to the end of the second quarter last year. Lastly, this year's FFO was impacted by certain nonrecurring charges which Shereen will review in greater detail. We continued our asset sales during the quarter. In April we sold the French Lick Springs Resort for $25 million, and in June we sold the Clarion Hotel and Conference Center in Yakima, Washington for $4.2 million. On the condo hotel front, we continue our marketing efforts for the final phase of the Pink Shell development, the Captiva Villas. We now have 38 of the 42 available units under contract, and we expect to start construction during the fall of '05. Also, I'm pleased to announce that we have entered into a contract with a joint venture partner to acquire a redevelopment project in the Florida Keys. The property currently has located on it a small hotel and marina. The redevelopment plan would be to demolish the majority of the existing buildings and construct 58 entirely new units, which will be sold as condo hotel units, and we will redesign the deepwater marina. The purchase price of the property is 12.5 million, and our partnership interest is expected to be 50%. Let me now turn the call …