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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



---



FORM 10-Q



(Mark One)

|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ---------------------------------------------------------------------------------------



| |  | For the quarterly period ended March 31, 2003
| |  | ---------------------------------------------



OR



| ̈ |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
|- |  | -------------------------------------------------------------------

| | EXCHANGE ACT OF 1934
| | --------------------



| |  | For the transition period from  to
| |  | ----------------------------------



Commission file number 0-24568



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INNKEEPERS USA TRUST

(Exact name of registrant as specified in its charter)



|Maryland                                                       |  | 65-0503831                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. employer identification no.)



|306 Royal Poinciana Way, Palm Beach, Florida |  | 33480     
|-------------------------------------------- |  | ----------
|(Address of principal executive offices)     |  | (Zip Code)



(561)
835-1800

Registrants telephone number, including area code:



N/A

(former name)



---



Indicate by check mark whether the
Registrant (i) has filed all reports required 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 report), and (ii) has
been subject to such filing requirements for the past 90 days. Yes  x  No ̈



Indicate by check mark whether
the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes  x No ̈



The number of common
shares of beneficial interest, $.01 par value, outstanding on May 1, 2003, was 37,489,570.



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TABLE OF CONTENTS



|               |  |                                                                                               |  | Page
|-------------- |  | --------------------------------------------------------------------------------------------- |  | ----
|Part I         |  | Financial Information                                                                         |  | 1   
|              
|.              |  | Item 1. Financial Statements                                                                  |  | 1   
|              
|               |  | INNKEEPERS USA TRUST                                                                          |  |     
|              
|               |  | Consolidated Balance Sheets at March 31, 2003 and December 31, 2002                           |  | 1   
|              
|               |  | Consolidated Statements of Operations for the three months ended March 31, 2003 and 2002      |  | 2   
|              
|               |  | Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002      |  | 3   
|              
|               |  | Notes to Consolidated Financial Statements                                                    |  | 4   
|              
|               |  | INNKEEPERS HOSPITALITY                                                                        |  |     
|              
|               |  | Combined Balance Sheets at March 31, 2003 and December 31, 2002                               |  | 7   
|              
|               |  | Combined Statements of Operations for the three months ended March 31, 2003 and 2002          |  | 8   
|              
|               |  | Combined Statements of Cash Flows for the three months ended March 31, 2003 and 2002          |  | 9   
|              
|               |  | Notes to Combined Financial Statements                                                        |  | 10  
|              
|               |  | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 12  
|              
|               |  | Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |  | 19  
|              
|               |  | Item 4. Controls and Procedures                                                               |  | 20  
|              
|Part II.       |  | Other Information                                                                             |  | 21  
|              
|               |  | Item 6. Exhibits and Reports on Form 8-K                                                      |  | 21  
|              
|Signature      |  |                                                                                               |  | 22  
|              
|Certifications |  |                                                                                               |  | 23  
|              
|Exhibit Index  |  |                                                                                               |  | 26  



|
|





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INNKEEPERS
USA TRUST

PART I  FINANCIAL INFORMATION

ITEM 1  FINANCIAL STATEMENTS



Innkeepers USA Trust

Consolidated Balance Sheets

(in thousands, except share and per share data)



|                                                                                                                              |  | March 31, 2003 |          |   | December 31, 2002 |  
|----------------------------------------------------------------------------------------------------------------------------- |  | -------------- | -------- | - | ----------------- | -
|ASSETS                                                                                                                        |  |                |          |   |                   |  
|Investment in hotel properties:                                                                                               |  |                |          |   |                   |  
|Land and improvements                                                                                                         |  | $              | 101,140  |   |                   | $
|Buildings and improvements                                                                                                    |  |                | 655,121  |   |                   |  
|Furniture and equipment                                                                                                       |  |                | 105,684  |   |                   |  
|Renovations in process                                                                                                        |  |                | 4,950    |   |                   |  
|Hotels held for sale, net                                                                                                     |  |                | 2,000    |   |                   |  
|                                                                                                                              |  |                |          |   |                   |  
|                                                                                                                              |  |                | 868,895  |   |                   |  
|Accumulated depreciation                                                                                                      |  |                | (189,246 | ) |                   |  
|                                                                                                                              |  |                |          |   |                   |  
|Net investment in hotel properties                                                                                            |  |                | 679,649  |   |                   |  
|Cash and cash equivalents                                                                                                     |  |                | 13,838   |   |                   |  
|Restricted cash and cash equivalents                                                                                          |  |                | 14,406   |   |                   |  
|Due from Lessees                                                                                                              |  |                | 10,188   |   |                   |  
|Deferred expenses, net                                                                                                        |  |                | 3,985    |   |                   |  
|Other assets                                                                                                                  |  |                | 2,625    |   |                   |  
|                                                                                                                              |  |                |          |   |                   |  
|Total assets                                                                                                                  |  | $              | 724,691  |   |                   | $
|                                                                                                                              |  |                |          |   |                   |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                          |  |                |          |   |                   |  
|Debt                                                                                                                          |  | $              | 235,582  |   |                   | $
|Accounts payable and accrued expenses                                                                                         |  |                | 7,076    |   |                   |  
|Distributions payable                                                                                                         |  |                | 5,908    |   |                   |  
|Deferred rent revenue                                                                                                         |  |                | 3,463    |   |                   |  
|Minority interest in Partnership                                                                                              |  |                | 52,207   |   |                   |  
|                                                                                                                              |  |                |          |   |                   |  
|Total liabilities                                                                                                             |  |                | 304,236  |   |                   |  
|                                                                                                                              |  |                |          |   |                   |  
|Shareholders equity:                                                                                                         |  |                |          |   |                   |  
|Preferred shares, $0.01 par value, 20,000,000 shares authorized, 4,630,000 shares issued
and outstanding                      |  |                | 115,750  |   |                   |  
|Common shares, $0.01 par value, 100,000,000 shares authorized, 37,488,913 and 37,483,913
issued and outstanding, respectively |  |                | 375      |   |                   |  
|Additional paid-in capital                                                                                                    |  |                | 393,295  |   |                   |  
|Unearned compensation                                                                                                         |  |                | (728     | ) |                   |  
|Distributions in excess of earnings                                                                                           |  |                | (88,237  | ) |                   |  
|                                                                                                                              |  |                |          |   |                   |  
|Total shareholders equity                                                                                                    |  |                | 420,455  |   |                   |  
|                                                                                                                              |  |                |          |   |                   |  
|Total liabilities and shareholders equity                                                                                    |  | $              | 724,691  |   |                   | $
|                                                                                                                              |  |                |          |   |                   |  



The
accompanying notes are an integral part of these consolidated financial statements.



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Innkeepers USA Trust

Consolidated Statements of Operations

(in thousands, except per share data)



|                                                                             |  | Three Months Ended March 31, |       
|---------------------------------------------------------------------------- |  | ---------------------------- | ------
|                                                                             |  | 2003                         |       
|Revenue:                                                                     |  |                              |       
|Percentage Lease revenue                                                     |  | $                            | 16,624
|Other revenue                                                                |  |                              | 130   
|                                                                             |  |                              |       
|Total revenue                                                                |  |                              | 16,754
|                                                                             |  |                              |       
|Expenses:                                                                    |  |                              |       
|Depreciation                                                                 |  |                              | 8,457 
|Amortization of franchise costs                                              |  |                              | 14    
|Ground rent                                                                  |  |                              | 124   
|Interest expense                                                             |  |                              | 4,315 
|Amortization of loan origination fees                                        |  |                              | 269   
|Property taxes and insurance                                                 |  |                              | 2,952 
|General and administrative (excluding amortization of unearned
compensation) |  |                              | 1,406 
|Amortization of unearned compensation                                        |  |                              | 345   
|Other charges                                                                |  |                              | 655   
|                                                                             |  |                              |       
|Total expenses                                                               |  |                              | 18,537
|                                                                             |  |                              |       
|Loss before minority interest                                                |  |                              | (1,783
|Minority interest, common                                                    |  |                              | 157   
|Minority interest, preferred                                                 |  |                              | (1,068
|                                                                             |  |                              |       
|Loss from continuing operations                                              |  |                              | (2,694
|Discontinued operations                                                      |  |                              | 140   
|                                                                             |  |                              |       
|Net loss                                                                     |  |                              | (2,554
|Preferred share dividends                                                    |  |                              | (2,496
|                                                                             |  |                              |       
|Net loss applicable to common shareholders                                   |  | $                            | (5,050
|                                                                             |  |                              |       
|Earnings (loss) per share data:                                              |  |                              |       
|Basic-continuing operations                                                  |  | $                            | (0.14 
|                                                                             |  |                              |       
|Basic                                                                        |  | $                            | (0.14 
|                                                                             |  |                              |       
|Diluted-continuing operations                                                |  | $                            | (0.14 
|                                                                             |  |                              |       
|Diluted                                                                      |  | $                            | (0.14 
|                                                                             |  |                              |       



The
accompanying notes are an integral part of these consolidated financial statements.



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Innkeepers USA Trust

Consolidated Statements of Cash Flows

(in thousands)



|                                                                                |  | Three Months Ended March 31, |        
|------------------------------------------------------------------------------- |  | ---------------------------- | -------
|                                                                                |  | 2003                         |        
|Cash flows from operating activities:                                           |  |                              |        
|Net loss                                                                        |  | $                            | (2,554 
|Adjustments to reconcile net loss to net cash provided by operating
activities: |  |                              |        
|Depreciation and amortization                                                   |  |                              | 9,085  
|Minority interests                                                              |  |                              | 911    
|Deferred rent revenue                                                           |  |                              | 3,463  
|Changes in operating assets and liabilities:                                    |  |                              |        
|Due from Lessees                                                                |  |                              | (1,404 
|Other assets                                                                    |  |                              | 407    
|Accounts payable and accrued expenses                                           |  |                              | (624   
|                                                                                |  |                              |        
|Net cash provided by operating activities                                       |  |                              | 9,284  
|                                                                                |  |                              |        
|Cash flows from investing activities:                                           |  |                              |        
|Investment in hotel properties                                                  |  |                              | (5,077 
|Costs paid on sale of hotel                                                     |  |                              |       
|Deposit and costs incurred in acquisition of hotel                              |  |                              | (440   
|Net withdrawals (deposits) into restricted cash accounts                        |  |                              | (255   
|                                                                                |  |                              |        
|Net cash used by investing activities                                           |  |                              | (5,772 
|                                                                                |  |                              |        
|Cash flows from financing activities:                                           |  |                              |        
|Payments on debt                                                                |  |                              | (1,148 
|Distributions paid to unit holders                                              |  |                              | (1,255 
|Distributions paid to shareholders                                              |  |                              | (8,495 
|Redemption of units                                                             |  |                              |       
|Loan origination fees and costs paid                                            |  |                              | (143   
|                                                                                |  |                              |        
|Net cash used by financing activities                                           |  |                              | (11,041
|                                                                                |  |                              |        
|Net decrease in cash and cash equivalents                                       |  |                              | (7,529 
|Cash and cash equivalents at beginning of period                                |  |                              | 21,367 
|                                                                                |  |                              |        
|Cash and cash equivalents at end of period                                      |  | $                            | 13,838 
|                                                                                |  |                              |        
|Supplemental cash flow information:                                             |  |                              |        
|Interest paid                                                                   |  | $                            | 4,348  
|                                                                                |  |                              |        



The
accompanying notes are an integral part of these consolidated financial statements.



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Innkeepers USA Trust

Notes to Consolidated Financial Statements



|1. |  | Organization
|-- |  | ------------



Innkeepers USA Trust (Innkeepers) is a self-administered real estate investment trust (REIT), which at March 31,
2003, owned 67 hotels with an aggregate of 8,196 rooms/suites (the Hotels) through its partnership interests in Innkeepers USA Limited Partnership (with its subsidiary partnerships, the Partnership and collectively with
Innkeepers, the Company).



At March
31, 2003, the Company leased 61 of the Hotels to Innkeepers Hospitality, Inc. (or other entities under common control, collectively the IH Lessee) and six of the Hotels to affiliates of Wyndham International, Inc. (the Summerfield
Lessee and, together with the IH Lessee, the Lessees) pursuant to leases (Percentage Leases), each of which provides for rent (Percentage Rent) based on a fixed percentage of annual room revenue below, plus
a higher fixed percentage of annual room revenue in excess of, a specified dollar amount (Threshold), subject to a minimum annual base rent (Base Rent). Base Rent and the Threshold under each Percentage Lease increase each
year based on the increase in the Consumer Price Index for the previous year. Jeffrey H. Fisher, the Companys Chief Executive Officer, President and Chairman of the Board of Trustees, controls the IH Lessee. Rolf E. Ruhfus, a trustee of the
Company, is also a director of Wyndham International, Inc.



These unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC) and should be read in conjunction with the financial statements and notes
thereto of the Company and the IH Lessee included in the Companys Annual Report on Form 10-K for the year ended December 31, 2002 (the 10-K). The notes to the financial statements included herein highlight significant changes to
the notes included in the 10-K and present interim disclosures required by the SEC. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. The results
of any interim period are not necessarily indicative of results for the full year.



|2. |  | Recent Development
|-- |  | ------------------



In March 2003, the Company entered into a contract to purchase a hotel property for $8,900,000 and made a security deposit of $426,000
towards the purchase price of the hotel. The security deposit is included in deferred expenses in the accompanying consolidated balance sheet at March 31, 2003. The Company is currently performing its due diligence on the acquisition and, under the
contract, the due diligence period ends in May 2003.



|3. |  | Earnings per Share
|-- |  | ------------------



The following table sets forth the computation of basic and diluted earnings (loss) per share for the three months ended March 31, 2003
and 2002 (in thousands, except share and per share data):



|                                                                                                             |  | 2003 |            |   | 2002 |  
|------------------------------------------------------------------------------------------------------------ |  | ---- | ---------- | - | ---- | -
|Numerator:                                                                                                   |  |      |            |   |      |  
|Loss from continuing operations                                                                              |  | $    | (2,694     | ) |      | $
|Preferred share dividends                                                                                    |  |      | (2,496     | ) |      |  
|                                                                                                             |  |      |            |   |      |  
|Loss applicable to common shareholders from continuing operations                                            |  |      | (5,190     | ) |      |  
|Discontinued operations                                                                                      |  |      | 140        |   |      |  
|                                                                                                             |  |      |            |   |      |  
|Net loss applicable to common shareholders                                                                   |  | $    | (5,050     | ) |      | $
|                                                                                                             |  |      |            |   |      |  
|Denominator:                                                                                                 |  |      |            |   |      |  
|Denominator for basic earnings (loss) per share  weighted average
shares                                    |  |      | 37,386,312 |   |      |  
|Effect of dilutive securities:                                                                               |  |      |            |   |      |  
|Stock options                                                                                                |  |      | 12         |   |      |  
|Restricted shares                                                                                            |  |      | 3,019      |   |      |  
|                                                                                                             |  |      |            |   |      |  
|Denominator for diluted earnings (loss) per share  adjusted weighted average
shares and assumed conversions |  |      | 37,389,343 |   |      |  
|                                                                                                             |  |      |            |   |      |  



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|                                |  | 2003 |       |   | 2002 |  
|------------------------------- |  | ---- | ----- | - | ---- | -
|Earnings (loss) per share data: |  |      |       |   |      |  
|Basic-continuing operations     |  | $    | (0.14 | ) |      | $
|Discontinued operations         |  |      |      |   |      |  
|                                |  |      |       |   |      |  
|Basic                           |  | $    | (0.14 | ) |      | $
|                                |  |      |       |   |      |  
|Diluted-continuing operations   |  | $    | (0.14 | ) |      | $
|Discontinued operations         |  |      |      |   |      |  
|                                |  |      |       |   |      |  
|Diluted                         |  | $    | (0.14 | ) |      | $
|                                |  |      |       |   |      |  



The
conversion of Common Units into common shares would have no effect on earnings (loss) per share. The conversion of the Series A Preferred Shares, the Class B Preferred Units and 1,355,500 outstanding options are anti-dilutive (i.e., assuming that
they were converted into common shares would reduce the loss per share) and, therefore, are not included in the calculation of diluted earnings (loss) per share. For the periods where a loss was incurred, the denominator used for calculating diluted
earnings (loss) per share is the same as the denominator for basic earnings per share.



|4. |  | Other Charges
|-- |  | -------------



Other charges for the three months ended March 31, 2003 and 2002 include the following (in thousands):



|                                 |  | 2003 |     | 2002
|-------------------------------- |  | ---- | --- | ----
|Legal fees                       |  |      |    |     
|Litigation settlement            |  | $    | 21  |     
|Advisory services related to RMA |  |      | 416 |     
|TRS transaction costs            |  |      | 218 |     
|                                 |  |      |     |     
|                                 |  | $    | 655 |     
|                                 |  |      |     |     



The
legal fees and litigation settlement are related to litigation with the Companys former Chief Operating Officer and the advisory services are related to the Companys consideration of its alternatives under the REIT Modernization Act. The
TRS transaction costs are related to the Companys possible transaction with IH Lessee (please see Note 14 in the Companys December 31, 2002 financial statements included in the 10-K).



|5. |  | Discontinued Operations
|-- |  | -----------------------



In 2002, the Company adopted the provision of FASB No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.
During the third quarter of 2002, the Company classified one of its hotel properties as held for sale. The Company has stopped depreciation of the hotel and has classified it as held for sale in the accompanying balance sheets. The
results of operations from this hotel are classified as discontinued operations in the accompanying statements of operations. The previously reported 2002 results of operations have been reclassified to reflect the classification of this hotel as
held for sale. As a result of the held for sale classification, the Company reduced the carrying value of this hotel to its estimated fair value (less costs to sell) of $2,000,000. The Company expects to complete the sale of this hotel in 2003.



The following table sets forth the components of
discontinued operations for the three months ended March 31, 2003 and 2002 (in thousands):



|                             |  | 2003 |     |   | 2002 |  
|---------------------------- |  | ---- | --- | - | ---- | -
|Percentage Lease revenue     |  | $    | 163 |   |      | $
|Depreciation                 |  |      |    |   |      |  
|Property taxes and insurance |  |      | (23 | ) |      |  
|                             |  |      |     |   |      |  
|Discontinued operations      |  | $    | 140 |   |      | $
|                             |  |      |     |   |      |  



|6. |  | Litigation Settlement
|-- |  | ---------------------



In May 2000, the Companys former Chief Operating Officer (who is a minority shareholder in certain of the IH Lessee entities) filed
suit against the Company, the IH Lessee and Mr. Fisher. The suit alleges that he was



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wrongfully terminated by the
Company in breach of his employment contract with the Company, was wrongfully terminated by the IH Lessee under his employment contract with the IH Lessee, was injured by various breaches of fiduciary duty by Mr. Fisher in his capacity as a director
and majority shareholder of the IH Lessee, and various other related claims against the Company and the IH Lessee. In December 2002, the defendants entered into a settlement agreement with the plaintiff that is contingent upon the closing of a TRS
Transaction as described in Note 14 in the Companys December 31, 2002 financial statements included in the 10-K. In exchange for a complete release of all claims and in settlement of the litigation, (a) the Company agreed to pay the plaintiff
$1.8 million in cash and vest 116,908 unvested restricted common shares, which resulted in a non-cash charge of $1.2 million, and (b) the IH Lessee agreed to pay the plaintiff $5.9 million. Mr. Fisher agreed to purchase the plaintiffs equity
interest in the IH Lessee for $1 million. The Company also agreed to purchase the plaintiffs 116,908 restricted shares, at his option, upon closing of a TRS Transaction at the then-current market price. The settlement agreement provided that
if a TRS Transaction did not close by April 30, 2003, in the absence of a further agreement among the parties, the litigation would resume and the Company (and the IH Lessee and Mr. Fisher) presently intends to continue to aggressively defend all
allegations in that event. The parties are currently negotiating an extension of the time within which the TRS Transaction must close and the settlement must be finalized.



|7. |  | Related Party Transactions
|-- |  | --------------------------



On March 28, 2003, the IH Lessee assumed the management of four hotels from Marriott and on April 25, 2003 assumed the management of an
additional six hotels. The IH Lessee expects to assume the management on the remaining seven Marriott managed hotels upon obtaining the necessary third party consents that are expected to be received later in the second quarter of 2003. The Company
has guaranteed the IH Lessees obligations under the new franchise agreements. The Company has determined that the fair value of this guarantee is zero and, therefore, no liability was recorded. Please see Note 14 in the Companys December
31, 2002 financial statements included in the 10-K for additional information concerning this transaction.



In the first quarter of 2003, the Company commenced renovations at its Hampton Inn  Norcross, GA hotel that required that a
substantial number of rooms be taken out of service. The Company compensated the IH lessee for the significant loss of room nights by reducing the Rent payable under the lease for this hotel by $110,000 in the first quarter of 2003.



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Innkeepers Hospitality

Combined Balance Sheets

(in thousands, except share data)



|                                                                             |  | March 31, 2003 |        |   | December 31, 2002 |  
|---------------------------------------------------------------------------- |  | -------------- | ------ | - | ----------------- | -
|ASSETS                                                                       |  |                |        |   |                   |  
|Current assets:                                                              |  |                |        |   |                   |  
|Cash and cash equivalents                                                    |  | $              | 11,950 |   |                   | $
|Marketable securities                                                        |  |                | 2,213  |   |                   |  
|Accounts receivable, net                                                     |  |                | 4,218  |   |                   |  
|Prepaid expenses                                                             |  |                | 857    |   |                   |  
|                                                                             |  |                |        |   |                   |  
|Total current assets                                                         |  |                | 19,238 |   |                   |  
|Other assets                                                                 |  |                | 256    |   |                   |  
|                                                                             |  |                |        |   |                   |  
|Total assets                                                                 |  | $              | 19,494 |   |                   | $
|                                                                             |  |                |        |   |                   |  
|LIABILITIES AND SHAREHOLDERS DEFICIT                                        |  |                |        |   |                   |  
|Current liabilities:                                                         |  |                |        |   |                   |  
|Accounts payable                                                             |  | $              | 2,788  |   |                   | $
|Accrued expenses                                                             |  |                | 5,117  |   |                   |  
|Accrued litigation settlement                                                |  |                | 5,475  |   |                   |  
|Payable to Manager                                                           |  |                | 2,475  |   |                   |  
|Due to Partnership                                                           |  |                | 9,462  |   |                   |  
|                                                                             |  |                |        |   |                   |  
|Total current liabilities                                                    |  |                | 25,317 |   |                   |  
|Line of credit                                                               |  |                | 1,000  |   |                   |  
|Other long-term liabilities                                                  |  |                | 860    |   |                   |  
|                                                                             |  |                |        |   |                   |  
|Total liabilities                                                            |  |                | 27,177 |   |                   |  
|                                                                             |  |                |        |   |                   |  
|Shareholders deficit:                                                       |  |                |        |   |                   |  
|Common shares, $1 par value, 9,000 shares authorized, issued and
outstanding |  |                | 9      |   |                   |  
|Additional paid-in capital                                                   |  |                | 1,160  |   |                   |  
|Unrealized loss on marketable securities                                     |  |                | (1,230 | ) |                   |  
|Retained deficit                                                             |  |                | (7,622 | ) |                   |  
|                                                                             |  |                |        |   |                   |  
|Total shareholders deficit                                                  |  |                | (7,683 | ) |                   |  
|                                                                             |  |                |        |   |                   |  
|Total liabilities and shareholders deficit                                  |  | $              | 19,494 |   |                   | $
|                                                                             |  |                |        |   |                   |  



The
accompanying notes are an integral part of these combined financial statements.



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Innkeepers Hospitality

Combined Statements of Operations

(in thousands)

|                                                                                |  | Three Months Ended March 31, |        
|------------------------------------------------------------------------------- |  | ---------------------------- | -------
|                                                                                |  | 2003                         |        
|Gross operating revenue:                                                        |  |                              |        
|Rooms                                                                           |  | $                            | 40,264 
|Food and beverage                                                               |  |                              | 73     
|Telephone                                                                       |  |                              | 624    
|Other                                                                           |  |                              | 620    
|                                                                                |  |                              |        
|Gross operating revenue                                                         |  |                              | 41,581 
|Departmental expenses:                                                          |  |                              |        
|Rooms                                                                           |  |                              | 8,851  
|Food and beverage                                                               |  |                              | 74     
|Telephone                                                                       |  |                              | 366    
|Other                                                                           |  |                              | 250    
|                                                                                |  |                              |        
|Total departmental profit                                                       |  |                              | 32,040 
|                                                                                |  |                              |        
|Unallocated operating expenses:                                                 |  |                              |        
|General and administrative                                                      |  |                              | 3,675  
|Franchise and marketing fees                                                    |  |                              | 2,685  
|Advertising and promotions                                                      |  |                              | 2,196  
|Utilities                                                                       |  |                              | 2,414  
|Repairs and maintenance                                                         |  |                              | 2,325  
|Management fees                                                                 |  |                              | 374    
|                                                                                |  |                              |        
|Total unallocated operating expenses                                            |  |                              | 13,669 
|                                                                                |  |                              |        
|Gross profit                                                                    |  |                              | 18,371 
|Insurance                                                                       |  |                              | (490   
|Lessee overhead                                                                 |  |                              | (1,123 
|Percentage lease expense                                                        |  |                              | (18,144
|                                                                                |  |                              |        
|Net loss                                                                        |  |                              | (1,386 
|Other comprehensive income  unrealized gains (losses) on marketable
securities |  |                              | (336   
|                                                                                |  |                              |        
|Comprehensive loss                                                              |  | $                            | (1,722 
|                                                                                |  |                              |        



The
accompanying notes are an integral part of these combined financial statements.



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Innkeepers Hospitality

Combined Statements of Cash Flows

(in thousands)



|                                                                            |  | Three Months Ended March 31, |       
|--------------------------------------------------------------------------- |  | ---------------------------- | ------
|                                                                            |  | 2003                         |       
|Cash flows from operating activities:                                       |  |                              |       
|Net loss                                                                    |  | $                            | (1,386
|Adjustments to reconcile net loss to net cash used by operating
activities: |  |                              |       
|Depreciation                                                                |  |                              | 10    
|Changes in operating assets and liabilities:                                |  |                              |       
|Accounts receivable                                                         |  |                              | (955  
|Prepaid expenses                                                            |  |                              | (178  
|Accounts payable                                                            |  |                              | (578  
|Accrued expenses                                                            |  |                              | 282   
|Payable to Manager                                                          |  |                              | 24    
|Due to Partnership                                                          |  |                              | 1,252 
|                                                                            |  |                              |       
|Net cash used by operating activities                                       |  |                              | (1,529
|                                                                            |  |                              |       
|Cash flows from investing activities:                                       |  |                              |       
|Purchase of equipment                                                       |  |                              | (11   
|                                                                            |  |                              |       
|Net cash used by investing activities                                       |  |                              | (11   
|                                                                            |  |                              |       
|Cash flows from financing activities:                                       |  |                              |       
|Advance under line of credit                                                |  |                              | 1,000 
|Advances to shareholder                                                     |  |                              |      
|                                                                            |  |                              |       
|Net cash provided (used) by financing activities                            |  |                              | 1,000 
|                                                                            |  |                              |       
|Net decrease in cash and cash equivalents                                   |  |                              | (540  
|Cash and cash equivalents at beginning of period                            |  |                              | 12,490
|                                                                            |  |                              |       
|Cash and cash equivalents at end of period                                  |  | $                            | 11,950
|                                                                            |  |                              |       



The
accompanying notes are an integral part of these combined financial statements.





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Innkeepers Hospitality

Notes to Combined Financial Statements



|1. |  | Organization
|-- |  | ------------



Innkeepers Hospitality, Inc. and other entities under common control (collectively IH or the IH Lessee) are
controlled by Jeffrey H. Fisher and were formed primarily to lease and operate hotels owned by the Company. Mr. Fisher is the Chief Executive Officer, President and Chairman of the Board of Trustees of the Company. The IH Lessee leased 61 hotels
(the IH Leased Hotels) from the Company at March 31, 2003.



The IH Lessee operates 48 of the IH Leased Hotels and wholly-owned subsidiaries of Marriott International, Inc. (Marriott) operate 13 of the IH Leased Hotels as of March 31, 2003.



These unaudited financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC) and should be read in conjunction with the financial statements and notes thereto of the Company and the IH Lessee included in the Companys
Annual Report on Form 10-K for the year ended December 31, 2002 (the 10-K). The notes to the financial statements included herein highlight significant changes to the notes included in the 10-K and present interim disclosures required by
the SEC. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. The results of any interim period are not necessarily indicative of results for the
full year.



|2. |  | Summary of Significant Accounting Policies
|-- |  | ------------------------------------------



Each IH Leased Hotel is leased by the Company to the IH Lessee under a percentage lease agreement (Percentage Lease). The
Percentage Lease for each IH Leased Hotel provides for rent (Percentage Rent) based on a fixed percentage of annual room revenue below, plus a higher fixed percentage of annual room revenue in excess of, a specified dollar amount
(Threshold), subject to a minimum annual base rent (Base Rent). Base Rent and the Threshold under each Percentage Lease increase each year based on the increase in the Consumer Price Index for the previous year. Base Rent is
paid monthly and Percentage Rent is paid no later than 25 days after the end of each calendar quarter.



The IH Lessee currently estimates that 16 of the IH Leased Hotels will pay only the minimum Base Rent in 2003. The remaining IH Leased
Hotels will pay Percentage Rent that is in excess of the minimum Base Rent.



The IH Lessee recognizes Percentage Lease expense for a hotel prior to the achievement of the annual Threshold when it is probable that the Threshold will be exceeded for the full year. Additionally,
the IH Lessee recognizes Base Rent as Percentage Lease expense to the extent that it exceeds the calculated Percentage Lease payments (using in the calculation a prorated portion of the Threshold based on how much of the year has elapsed). This
generally results in the recognition of Percentage Lease expense in an amount equal to the payments due under the Percentage Leases.



|3. |  | Litigation Settlement
|-- |  | ---------------------



In May 2000, the IH Lessees former president (who is a minority shareholder in certain of the IH Lessee entities and a former
officer in the Company) filed suit against the IH Lessee, the Company and Mr. Fisher. The suit alleges that he was wrongfully terminated by the IH Lessee in breach of his employment contract with the IH Lessee, was wrongfully terminated by the
Company under his employment contract with the Company, was injured by various breaches of fiduciary duty by Mr. Fisher in his capacity as a director and majority shareholder of the IH Lessee, and various other related claims against the IH Lessee
and the Company. In December 2002, the defendants entered into a settlement agreement with the plaintiff that is contingent upon the closing of a TRS Transaction as described in Note 8 to the IH Lessees December 31, 2002 financial statements
included in the 10-K. In exchange for a complete release of all claims, (a) the IH Lessee agreed to pay the plaintiff $5.9 million and (b) the Company agreed to pay the plaintiff $1.8 million in cash and vest 116,908 unvested restricted common
shares, which resulted in a non-cash charge of $1.2 million. Mr. Fisher agreed to purchase the plaintiffs equity interest in the IH Lessee for $1 million. The settlement agreement provided that if a TRS Transaction did not close by April 30,
2003, in the absence of a further agreement among the parties, the litigation would resume and the IH



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Lessee (and the Company and
Mr. Fisher) presently intends to continue to aggressively defend all allegations in that event. The parties are currently negotiating an extension of the time within which the TRS Transaction must close and the settlement must be finalized.



|4. |  | Related Party Transactions
|-- |  | --------------------------



On March 28, 2003, the IH Lessee assumed the management of four hotels from Marriott and on April 25, 2003 assumed the management of an
additional six hotels. The IH Lessee expects to assume the management on the remaining seven Marriott managed hotels when the Company obtains the necessary third party consents that are expected to be received later in the second quarter of 2003.
Please see Note 5 in the IH Lessees December 31, 2002 financial statements included in the 10-K for additional information concerning this transaction.



In the first quarter of 2003, the Company commenced renovations at its Hampton Inn  Norcross, GA hotel that required that a
substantial number of rooms be taken out of service. The Company compensated the IH lessee for the significant loss of room nights by reducing the Rent payable under the lease for this hotel by $110,000 in the first quarter of 2003.



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INNKEEPERS USA TRUST

ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS



General



The following discussion and analysis should be read in conjunction with (a) the financial statements and accompanying notes included in
this report and (b) Managements Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and related notes thereto included in the Companys Annual Report on Form 10-K for the year
ended December 31, 2002 (the 10-K). An investment in the Company is subject to significant risks, which the Company discloses in reports filed from time to time with the SEC, including a discussion of Risk Factors included in
the 10-K. The Companys 2002 annual report (including the 10-K) is posted on the Companys website at www.innkeepersusa.com, and the 10-K may be found at the SECs EDGAR website at www.sec.gov.



The following chart sets forth certain information with
respect to the Hotels at March 31, 2003:



|Franchise Affiliation         |  | Number of Hotels |  | Number of Rooms/Suites
|----------------------------- |  | ---------------- |  | ----------------------
|Upscale Extended-Stay         |  |                  |  |                       
|Residence Inn by Marriott     |  | 46               |  | 5,489                 
|Summerfield Suites by Wyndham |  | 5                |  | 650                   
|Sunrise Suites                |  | 1                |  | 96                    
|                              |  |                  |  |                       
|                              |  | 52               |  | 6,235                 
|                              |  |                  |  |                       
|Mid-Priced                    |  |                  |  |                       
|Hampton Inn                   |  | 12               |  | 1,526                 
|Courtyard by Marriott         |  | 1                |  | 136                   
|TownePlace Suites by Marriott |  | 1                |  | 95                    
|Holiday Inn Express           |  | 1                |  | 204                   
|                              |  |                  |  |                       
|                              |  | 15               |  | 1,961                 
|                              |  |                  |  |                       
|                              |  | 67               |  | 8,196                 
|                              |  |                  |  |                       



Occupancy, average daily rate (ADR) and revenue per available room (RevPAR) for 66 of the Hotels are presented in the following table.



|                                 |  | Three Months ended March 31, |       |   | Percentage increase |  
|-------------------------------- |  | ---------------------------- | ----- | - | ------------------- | -
|                                 |  | 2003                         |       |   | 2002                |  
|Portfolio (1)                    |  |                              |       |   |                     |  
|ADR                              |  | $                            | 92.63 |   |                     | $
|Occupancy                        |  |                              | 66.1  | % |                     |  
|RevPAR                           |  | $                            | 61.23 |   |                     | $
|By Segment                       |  |                              |       |   |                     |  
|Upscale Extended-Stay Hotels (2) |  |                              |       |   |                     |  
|ADR                              |  | $                            | 93.95 |   |                     | $
|Occupancy                        |  |                              | 69.4  | % |                     |  
|RevPAR                           |  | $                            | 65.20 |   |                     | $
|Mid-Priced Hotels (3)            |  |                              |       |   |                     |  
|ADR                              |  | $                            | 87.57 |   |                     | $
|Occupancy                        |  |                              | 56.0  | % |                     |  
|RevPAR                           |  | $                            | 49.00 |   |                     | $



---

|(1) |  | 66 hotels, excludes one hotel opened on September 15, 2002
|--- |  | ----------------------------------------------------------



|(2) |  | 51 hotels, excludes one hotel opened on September 15, 2002
|--- |  | ----------------------------------------------------------



|(3) |  | 15 hotels
|--- |  | ---------



Results of Operations



Deferred Recognition of Percentage Lease Revenue under SAB 101



On December 3, 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 (SAB 101), Revenue Recognition in Financial Statements. SAB 101 provides
that a lessor shall defer recognition of contingent rental income in interim periods until specified annual targets that



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trigger the contingent income are met. The Company reviewed the terms of its Percentage Leases and
determined that the provisions of SAB 101 apply to the Companys revenue recognition on an interim basis, but have no impact on the Companys annual Percentage Lease revenue recognition or its receipt of interim payments under the
Percentage Leases from its Lessees. The Companys quarterly distributions are based on Percentage Rent collected or due from the Lessees.



The effect of the application of SAB 101 on the financial statements for the three months ended March 31, 2003 and 2002 was to defer the
recognition of Percentage Lease revenue of $3,463,000 and $5,688,000. At March 31, 2003 and 2002, Deferred rent revenue of $3,463,000 and $5,688,000, respectively, represents Percentage Rent collected or due from the Lessees under the
terms of the Percentage Leases that the Company expects to recognize as Percentage Lease revenue in the third and/or fourth quarters of 2003 or 2002, as appropriate.



Comparison of the Three Months Ended March 31, 2003 (2003) to the Three Months Ended March 31, 2002
(2002)



Percentage Lease revenue
increased by $492,000, or 3%, from $16,132,000 in 2002 to $16,624,000 in 2003. This increase was due primarily to the increase in base rent as of January 1, 2003 ($377,000) and rent on the Companys newly developed Residence Inn by Marriott
hotel located in Saddle River, NJ ($442,000), partially offset by the reduction in rent from a hotel sold in the third quarter of 2002 ($327,000). On January 1, 2003 the base rent for each hotel increased by 2.37% (such increase was based on the
change in the consumer price index for the previous year) as provided for in the Percentage Leases.



Depreciation, amortization of franchise costs, amortization of loan origination fees, and amortization of unearned compensation
(Depreciation and Amortization) were $9,085,000 in the aggregate for 2003 compared with $10,418,000 for 2002. The decrease in Depreciation and Amortization was primarily due to certain assets becoming fully-depreciated in 2002 and the
elimination of depreciation on a hotel which was sold in the third quarter of 2002, partially offset by the depreciation of renovations completed during 2002 and depreciation on the Saddle River, NJ hotel.



Interest expense for 2003 was $4,315,000 compared with
$4,458,000 for 2002. This decrease is due primarily to principal reductions on the Companys amortizing debt, repayment of the entire balance outstanding under the Companys Line of Credit in the second quarter of 2002 and slight decreases
in the interest rates on the Companys variable rate debt.



Property taxes and insurance decreased by $321,000, or 10%, in 2003 compared with 2002. This decrease was due primarily to the receipt of refunds of prior year taxes paid (or a reduction in the accrual for certain prior year taxes
which will be paid in 2003) ($354,000) and property taxes expensed in 2002 for a hotel which was sold in the third quarter of 2002 ($55,000), partially offset by property taxes incurred on the Saddle River, NJ hotel ($60,000) and an increase in
insurance premiums ($64,000).



General and
administrative expenses increased by $325,000 in 2003 compared with 2002. This increase was due primarily to an increase in franchise taxes paid to certain states ($104,000), an increase in trustees and officer insurance premiums ($56,000),
increases in salaries related primarily to the addition of additional personnel ($48,000), increases in trustee fees and expenses ($44,000), costs incurred in complying with certain Sarbanes-Oxley (and similar) rules ($31,000) and increases in legal
expenses ($20,000).



Other charges were $655,000
in 2003 and $133,000 in 2002. This increase was primarily due to fees for advisory services rendered to a special committee of the Companys Board of Trustees, which is considering the Companys alternatives under the REIT Modernization
Act ($374,000), and costs incurred in contemplation of a taxable REIT subsidiary transaction with Innkeepers Hospitality ($218,000), partially offset by a decrease in costs related to litigation with a former officer of the Company
($70,000).



Net loss applicable to common
shareholders for 2003 was $(5,050,000), or $(0.14) per diluted share, compared with $(6,467,000), or $(0.19) per diluted share, for 2002. This change is due primarily to the factors discussed previously.



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Liquidity and Capital Resources



The Companys principal source of liquidity is rent payments from the Lessees under the Percentage
Leases, and the Company is dependent on the Lessees to make such payments to provide cash for debt service, distributions, capital expenditures at its Hotels, and working capital. The Company does not expect that its cash provided by operating
activities will be adequate to meet all of its liquidity and capital expenditure needs. The Company currently expects to fund any liquidity or capital expenditure shortfall and its external growth objectives primarily by borrowing on its Line of
Credit or other facilities, exchanging equity for hotel properties or possibly accessing the capital markets if market conditions permit.



The IH Lessee, which leases 61 of the Companys hotels, reported a net loss of $1,386,000 for the three months ended March 31, 2003.
The IH Lessee borrowed $1,000,000 under its line of credit in March 2003 to meet its operating costs, Percentage Lease obligations and other liquidity needs.



The Summerfield Lessee leases six of the Hotels that are not leased by the IH Lessee, under Percentage Leases. The obligations of the
Summerfield Lessee under its Percentage Leases and related agreements are collateralized by $4,759,220 in irrevocable letters of credit, one of which is pledged to a lender to the Company, and are guaranteed by Wyndham. Wyndham has had significant
net losses in recent reporting periods. We believe that Wyndham may be unable to meet its guarantee obligations and relies exclusively on the cash flow of the Summerfield Hotels to generate sufficient cash flow to pay rent and satisfy its capital
expenditure and other obligations under its Percentage Leases. There can be no assurance that the Summerfield Hotels will generate sufficient cash flow to allow the Summerfield Lessee to meet its obligations under the Percentage Leases.



As of May 6, 2003, the Lessees were current in
their financial obligations under the Percentage Leases.



The Company believes that the Summerfield Lessee failed certain performance tests at one or more of the Summerfield Hotels in 2002, which may give rise to certain rights under the Percentage Leases for the effected Summerfield
Hotels, possibly including the right to terminate those Percentage Leases. The Company is in discussions with the Summerfield Lessee regarding the Companys rights under the Percentage Leases and a possible resolution of these matters.



Cash Flow Analysis



Cash and cash equivalents (including restricted cash and cash
equivalents) at March 31, 2003 and 2002 were $28,244,000 and $21,140,000, including $6,891,000 and $5,596,000, respectively, which the Company is required, under the Percentage Leases, to make available to the Lessees for the replacement and
refurbishment of furniture and equipment and certain other capital expenditures. Additionally, cash and cash equivalents included $7,515,000 and $10,584,000 at March 31, 2003 and 2002, respectively, that was held in escrow by lenders to pay for
insurance, taxes, and capital expenditures for certain Hotels.



Net cash provided by operating activities for the three months ended March 31, 2003 and 2002 was $9,284,000 and $11,742,000, respectively. The $2,458,000 decrease is primarily due to the $1,733,000 reduction in amounts paid or
payable under the Percentage leases for the first quarter of 2003 versus the first quarter of 2002 and the increase in amounts Due from Lessees.



Net cash used in investing activities was $5,772,000 for the three months ended March 31, 2003. This was comprised primarily of (a)
renovations at certain hotels of $5,077,000, (b) net deposits of $255,000 into certain restricted cash accounts, and (c) deposits and costs of $440,000 incurred in connection with the potential acquisition of a hotel.



Net cash used in investing activities was $6,723,000 for the
three months ended March 31, 2002. This was comprised primarily of (a) renovations at certain hotels of $6,566,000 and (b) development costs on the Companys project in Saddle River, NJ of $2,937,000, which was partially offset by withdrawals
of $2,958,000 in cash from certain restricted cash accounts for renovations completed during the quarter.



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##### Table of Contents

Net cash used by financing activities was $11,041,000 for the three months ended March 31,
2003, consisting primarily of (a) principal payments on amortizing debt of $1,148,000, (b) distributions paid of $9,750,000 and (c) loan costs paid of $143,000.



Net cash used by financing activities was $5,136,000 for the three months ended March 31, 2002, consisting
primarily of (a) principal payments on amortizing debt of $808,000, (b) distributions paid of $3,923,000, (c) the redemption of 15,894 Common Units in the Partnership for $160,000 and (d) loan costs paid of $245,000.



Distributions/Dividends



The Company has paid regular distributions on its common
shares and Common Units, and the 2003 first quarter distribution was $0.08 per share or unit. Quarterly preferred distributions of between $0.275 and $0.28875 are payable on each Class B Preferred Unit (depending on the level of common share
dividends paid) and the 2003 first quarter distribution was $0.275. Each Class B Preferred Unit may be converted into one Common Unit at the election of the holder. Each Series A Preferred Share is entitled to annual dividends equal to the greater
of (i) $2.15624 ($0.53906 payable quarterly) or (ii) the cash dividend paid or payable on the number of common shares into which a Series A Preferred Share is then convertible (1.4811). The 2003 first quarter distribution was $0.53906 per Series A
Preferred Share. The timing and amount of any future dividends will be determined by the Companys Board of Trustees in its sole discretion based on factors it deems relevant and no assurance can be given that the current dividend levels will
be sustained. The holders of the Common Units and Class B Preferred Units may redeem each of their units for cash equal to the then-trading value of a common share or, at the election of Innkeepers, one common share. Under federal income tax law
provisions applicable to REITs, the Company is required to distribute at least 90% of its taxable income to maintain its REIT status.



Financing



In making future investments in hotel properties, the Company may incur additional indebtedness. The Company may also incur indebtedness
to meet distribution requirements imposed on a REIT under the Internal Revenue Code, to fund its renovation and upgrade program or to fund any other liquidity needs to the extent that working capital and cash flow from the Companys operations
are insufficient to fund such needs. The Companys Declaration of Trust limits aggregate indebtedness to 50% of the Companys investment in hotel properties, at cost, after giving effect to the Companys use of proceeds from any
indebtedness. The Company has bank-funding commitments available under the Line of Credit of approximately $125,000,000 at March 31, 2003. However, the actual amount that can be borrowed is subject to borrowing base availability as described in the
loan agreement. During the first quarter of 2002, the Company negotiated an amendment to the Line of Credit. This amendment reset certain financial covenant thresholds for 2002 and increased the allowable percentage of total debt to implied value of
the Hotels from 40% to 50%. The interest rate on the Line of Credit, as amended, is LIBOR plus 122.5 to 225 basis points, depending on certain financial ratios. In January 2003, the Company obtained an extension of the Line of Credit amendment
obtained in the first quarter of 2002, which is effective until December 31, 2003. At March 31, 2003, the Company was in compliance with the financial covenants contained in its various loan agreements, as amended, and there were no borrowings
outstanding under the Line of Credit. If the operating environment in 2003 worsens substantially from the Companys current expectations and the Company violates the amended covenants, the Company may have to locate replacement financing for
borrowings that may then be outstanding under the Line of Credit, reduce distributions to its shareholders and/or significantly reduce its planned capital expenditures.



The following table summarizes certain information concerning the Companys debt at March 31, 2003 and
2002:



|                                                    |  | 2003 |             |   | 2002 |  
|--------------------------------------------------- |  | ---- | ----------- | - | ---- | -
|Investment in hotels, at cost                       |  | $    | 868,895,000 |   |      | $
|Debt                                                |  |      | 235,582,000 |   |      |  
|Percentage of debt to investment in hotels, at cost |  |      | 27.1        | % |      |  
|Percentage of fixed rate debt to total debt         |  |      | 95.8        | % |      |  
|Weighted average implied interest rates on:         |  |      |             |   |      |  
|Fixed rate debt                                     |  |      | 7.54        | % |      |  
|Variable rate debt                                  |  |      | 1.25        | % |      |  



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|           |  | 2003 |   |  | 2002 |  
|---------- |  | ---- | - |  | ---- | -
|Total debt |  | 7.27 | % |  | 7.00 | %



In the
future, the Company may seek to increase or decrease the amount of its credit facilities, negotiate additional credit facilities, or issue corporate debt instruments, all in compliance with the Companys debt limitation. Any debt incurred or
issued by the Company may be secured or unsecured, short-term or long-term, bear a fixed or variable interest rate and may be subject to such other terms as management or the Board of Trustees of the Company deems prudent. The Company has no
interest rate hedging instrument exposure or forward equity commitments.



Capital Expenditures



The
Percentage Leases generally require the Company to make available to the Lessees an amount equal to 4% of room revenues from the Hotels, on a monthly basis, for the periodic replacement or refurbishment of furniture, fixtures and equipment and
certain other capital expenditures at the Hotels. Each of the Companys term loans require that the Company make available for such purposes, at the Hotels collateralizing those loans, amounts up to 5% of gross revenues from such Hotels. The
Company intends to cause the expenditure of amounts in excess of such obligated amounts, if necessary, to comply with the reasonable requirements of any franchise agreement and otherwise to the extent that the Company deems such expenditures to be
in the best interests of the Company.



Management
believes that the amounts required to be made available by the Company under the Percentage Leases will be sufficient to meet most of the routine expenditures for furniture, fixtures and equipment at the Hotels. However, in the past, the Company has
spent substantially more on capital expenditures than the Percentage Leases require. Management believed these additional expenditures were necessary to meet competitive pressures from other hotels, many of which are newly constructed. In many
cases, the expenditures were also required by franchisors of the Hotels, such as Marriotts requirements to substantially upgrade and refresh the Companys Generation 1 Residence Inn by Marriott hotels. Management believes that
for the foreseeable future the Company will continue to spend more on capital expenditures than it is required to make available to the Lessees under the Percentage Leases or loan agreements. The extent to which the actual expenditures exceed the
amounts required to be made available will vary from year to year, based on a number of factors. Those factors include, for any given year, market and franchisor requirements, the point in the normal recurring upgrade cycle the hotels are at in that
year, and the revenue of the hotels for that year. In 2003, management expects to spend approximately $25 million on capital expenditures. To the extent that the Company spends more on capital expenditures than is available from the Companys
operations, the Company intends to borrow under the Line of Credit.



Related Party Transactions



The Company has entered into a number of ongoing transactions and arrangements that may involve conflicts of interest. For a description of these transactions and arrangements, please see Risk Factors  Conflicts of
Interest and Related Party Transactions beginning on page R-2 in the 10-K.



Contractual Obligations and Commercial Commitments



In March 2003, the Company entered into a contract to purchase a hotel property for $8,900,000. There were no other significant changes, outside the normal course of business, in the contractual
obligations and commercial commitments disclosed in the 10-K.



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Seasonality of Hotel Business



The hotel industry is seasonal in nature. Historically, the Hotels operations have generally reflected
higher occupancy rates and ADR during the second and third quarters. To the extent that cash flow from the Percentage Leases for a quarter is insufficient to fund all of the operating expenses and distributions for such quarter due to seasonal and
other factors, the Company may fund quarterly operating expenses and distributions with available cash and/or borrowings under the Line of Credit.



Inflation



Operators of hotels, including the Lessees and any third-party managers retained by the Lessees, generally possess the ability to adjust
room rates quickly. However, competitive pressures and other factors have limited and may in the future limit the ability of the Lessees and any third-party managers retained by the Lessees to raise room rates in response to inflation. In fact, room
rates have decreased over the last two years while inflation has been modest. However, there can be no assurance that these modest inflation levels will not increase in future years or that the Company will not continue to be constrained from
raising room rates.



Funds From Operations



Funds From Operations (FFO) is a widely used
performance measure for an equity REIT. FFO, as defined by the National Association of Real Estate Investment Trusts (NAREIT), is net income (loss) (computed in accordance with generally accepted accounting principles), excluding gains
(or losses) from sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate implicitly assumes that the value of real estate diminishes
predictably over time. Since real estate values instead have historically risen or fallen with market conditions, we believe that the presentation of our operating results should include FFO and FFO per share. In addition, certain of
managements compensation goals are based on the attainment of certain levels of FFO per share. Therefore, FFO and FFO per share is presented to assist investors in analyzing the performance of the Company. The Companys method of
calculating FFO and FFO per share may be different from methods used by other REITs. Accordingly, the Companys method of calculating FFO and FFO per share may not be comparable to such other REITs. Moreover, FFO (i) does not represent cash
flows from operating activities as defined by generally accepted accounting principles, (ii) is not indicative of cash available to fund all cash flow and liquidity needs, including its ability to make distributions, and (iii) should not be
considered as an alternative to net income (as determined in accordance with generally accepted accounting principles) for purposes of evaluating the Companys operating performance.



The following presents the Companys calculations of FFO and FFO per share for the three months ended
March 31, 2003 and 2002 (in thousands, except share data):



|                                           |  | 2003 |            |   | 2002 |  
|------------------------------------------ |  | ---- | ---------- | - | ---- | -
|Net loss applicable to common shareholders |  | $    | (5,050     | ) |      | $
|Depreciation                               |  |      | 8,457      |   |      |  
|Minority interest, common                  |  |      | (157       | ) |      |  
|                                           |  |      |            |   |      |  
|Basic FFO                                  |  | $    | 3,250      |   |      | $
|                                           |  |      |            |   |      |  
|Minority interest, preferred               |  |      |           |   |      |  
|Preferred share dividends                  |  |      |           |   |      |  
|                                           |  |      |            |   |      |  
|Diluted FFO                                |  | $    | 3,250      |   |      | $
|                                           |  |      |            |   |      |  
|Denominator for basic earnings per share   |  |      | 37,386,312 |   |      |  
|Weighted average:                          |  |      |            |   |      |  
|Common Units                               |  |      | 1,167,893  |   |      |  
|                                           |  |      |            |   |      |  
|Denominator for basic FFO per share        |  |      | 38,554,205 |   |      |  
|                                           |  |      |            |   |      |  
|Denominator for diluted earnings per share |  |      | 37,389,343 |   |      |  
|Weighted average:                          |  |      |            |   |      |  
|Common Units                               |  |      | 1,167,893  |   |      |  
|Class B Preferred Units                    |  |      |           |   |      |  



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|                                      |  | 2003 |            | 2002
|------------------------------------- |  | ---- | ---------- | ----
|Series A Preferred Shares             |  |      |           |     
|                                      |  |      |            |     
|Denominator for diluted FFO per share |  |      | 38,557,236 |     
|                                      |  |      |            |     
|Basic FFO per share                   |  | $    | 0.08       |     
|                                      |  |      |            |     
|Diluted FFO per share                 |  | $    | 0.08       |     
|                                      |  |      |            |     



Forward-Looking
Statements



This report contains
forward-looking statements within the meaning of the federal securities laws including, without limitation, statements containing the words estimates, projects, anticipates, expects and
words of similar import. Such forward-looking statements relate to future events and the future financial performance of the Company and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from the results or achievements expressed or implied by such forward-looking statements. The Company is not obligated to update any such factors or to reflect the impact of actual future
events or developments or such forward-looking statements.



Cautionary statements set forth in reports filed by the Company from time to time with the SEC discuss important factors with respect to such forward-looking statements. These factors include, without limitation, (i) risks that
disruptions in oil imports or higher oil prices, widespread health alerts, changes in domestic or international political environments, war, terrorism or similar activity would have results that could negatively affect the travel industry and/or
Company in ways and to an extent that cannot be anticipated, (ii) the relative strength and performance of businesses and industries that are important demand generators in the Companys key markets, (iii) international, national, regional and
local economic conditions that will, among other things, affect demand for the Companys hotel rooms and the availability and terms of financing, (iv) the Companys ability to maintain its properties in competitive condition, (v) the
Companys ability to acquire or develop additional properties and risks that potential acquisitions or developments may not perform in accordance with expectations, (vi) changes in travel patterns, pricing methods and mechanisms, or the
prevailing means of commerce, i.e., e-commerce, and (vii) the complex tax rules that the company must satisfy to qualify as a REIT, and other governmental regulation. Although we believe that the expectations reflected in the forward-looking
statements are based on reasonable assumptions, we can give no assurances that our expectations will be attained or that any deviations will not be material.



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INNKEEPERS USA TRUST

ITEM 3  QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK



The Companys primary market risk exposure is to changes in interest rates on its Line of Credit and other debt. The Companys
interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower its overall borrowing costs. To achieve these objectives, the Company manages its exposure to fluctuations in market interest
rates for a portion of its borrowings through the use of fixed rate debt instruments to the extent that reasonably favorable rates are obtainable with such arrangements. The Company may enter into derivative financial instruments such as interest
rate swaps or caps and treasury options or locks to mitigate its interest rate risk on a related financial instrument or to effectively fix the interest rate on a portion of its variable rate debt. Currently, the Company has no derivative financial
instruments. The Company does not enter into derivative or interest rate transactions for speculative purposes. The Company regularly reviews interest rate exposure on its outstanding borrowings in an effort to minimize the risk of interest rate
fluctuations.



For debt obligations outstanding
at March 31, 2003, the following table presents principal repayments and related weighted average interest rates by expected maturity dates (in thousands):



|                      |  | 2003 |       |   | 2004 |   |       | 2005 |  |   | 2006  |   |  | 2007 |       |   | Thereafter |   |        | Total |  |   | Fair Value
|--------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | - |  | ---- | ----- | - | ---------- | - | ------ | ----- |  | - | ----------
|Debt:                 |  |      |       |   |      |   |       |      |  |   |       |   |  |      |       |   |            |   |        |       |  |   |           
|Fixed Rate            |  | $    | 3,408 |   |      | $ | 4,883 |      |  | $ | 5,884 |   |  | $    | 6,399 |   |            | $ | 27,566 |       |  | $ | 177,442   
|Average Interest Rate |  |      | 7.57  | % |      |   | 7.57  | %    |  |   | 7.59  | % |  |      | 7.59  | % |            |   | 8.03   | %     |  |   | 7.46      
|Variable Rate         |  |      |      |   |      |   |      |      |  |   |      |   |  |      |      |   |            |   |       |       |  | $ | 10,000    
|Average Interest Rate |  |      |      |   |      |   |      |      |  |   |      |   |  |      |      |   |            |   |       |       |  |   | 1.25      



The
table incorporates only those exposures that existed as of March 31, 2003 and does not consider exposures or positions that could arise after that date. As a result, the Companys ultimate realized gain or loss with respect to interest rate
fluctuations will depend on the exposures that arise during the future period, prevailing interest rates, and the Companys hedging strategies at that time. There is inherent rollover risk for borrowings as they mature and are renewed at
current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and the Companys financing requirements.



The Companys Line of Credit, which currently has no outstanding borrowings under it, matures in July
2004. All of our other debt matures in 2007 or thereafter.



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INNKEEPERS USA TRUST

ITEM 4  CONTROLS AND PROCEDURES



Innkeepers USA Trust



Within ninety (90) days prior to the filing date of this
report, the Company evaluated, under the supervision and with the participation of the Companys management (including its chief executive officer and chief financial officer), the effectiveness of the design and operation of its disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14 and 15d-14.



Based on their evaluation of such disclosure controls and procedures, the Companys chief executive officer and chief financial officer have concluded that such controls were effective as of May 6, 2003, are operating
as designed and will alert them on a timely basis to any material information relating to the Company required to be included in the Companys periodic SEC filings.



There have been no significant changes in the Companys internal controls or other factors that could
significantly affect these controls subsequent to the date of their evaluation, and no corrective actions with regards to significant deficiencies and material weaknesses (of which none were noted) were required.



Innkeepers Hospitality



Innkeepers Hospitality has advised the Company that within
ninety (90) days prior to the filing date of this report, Innkeepers Hospitality evaluated, under the supervision and with the participation of Innkeepers Hospitalitys management (including its vice president of accounting), the effectiveness
of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rule 13a-14 and 15d-14.



Innkeepers Hospitality has advised the Company that based on this evaluation of such disclosure controls and procedures, Innkeepers
Hospitalitys vice president of accounting has concluded that such controls were effective as of May 6, 2003, are operating as designed and will alert him on a timely basis to any material information relating to Innkeepers Hospitality required
to be included in the Companys periodic SEC filings.



Innkeepers Hospitality has advised the Company that there have been no significant changes in Innkeepers Hospitalitys internal controls or other factors that could significantly affect these controls subsequent to the date of
their evaluation, and no corrective actions with regards to significant deficiencies and material weaknesses (of which none were noted) were required.



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INNKEEPERS USA TRUST

PART II  OTHER INFORMATION



ITEM 6  Exhibits and Reports on Form 8-K



(a) Exhibits



|Exhibit |  | Description                                                                                                                                                                                                                                                                                                      
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|10.31   |  | Omnibus Agreement for a 17 Hotel Conversion, dated March 25, 2003, between Residence Inn by Marriott, Inc. and
TownePlace Management Corporation, affiliates of Marriott International, Inc., Innkeepers USA Trust and several of its subsidiaries and Innkeepers Hospitality, Inc. and several of its affiliates
|       
|99.1    |  | Certification of Jeffrey H. Fisher, Chief Executive Officer of Innkeepers USA Trust, pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and dated May 6, 2003                                                                                               
|       
|99.2    |  | Certification of David Bulger, Chief Financial Officer of Innkeepers USA Trust, pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and dated May 6, 2003                                                                                                    
|       
|99.3    |  | Certification of Roger Pollak, Vice President of Accounting of Innkeepers Hospitality, dated May 6,
2003                                                                                                                                                                                                         





(b) Reports on Form 8-K  The Company filed with the SEC a Current Report on Form 8-K on March 14, 2003 that contained the
certifications of Jeffrey H. Fisher, the Companys Chief Executive Officer, and David Bulger, the Companys Chief Financial Officer, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and
the certification of Roger Pollak, the Vice President of Accounting of Innkeepers Hospitality.



The Company filed with the SEC a Current Report on Form 8-K on February 6, 2003 that described the Companys amendment to its Line of Credit and furnished the Companys press release for the
fourth quarter and year ended December 31, 2002.



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SIGNATURE



Pursuant to
the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



|      |  |             |  | INNKEEPERS USA TRUST
|----- |  | ----------- |  | --------------------
|     
|Date: |  | May 6, 2003 |  |                     
|      |  |             |  |                     
|      |  |             |  |                     
|      |  |             |  |                     





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CERTIFICATIONS



(a) CEO
Certification



I, Jeffrey H. Fisher, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Innkeepers USA Trust;
| | -- |  | ---------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a. |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report
(the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c. |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function):
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a. |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize
and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. |  | The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Date: May 6, 2003



/s/    JEFFREY H.
FISHERJeffrey H. FisherChairman of the Board and Chief Executive Officer




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(b) CFO
Certification



I, David Bulger, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Innkeepers USA Trust;
| | -- |  | ---------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report
(the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function):
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize
and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. |  | The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Date: May 6, 2003



/s/    DAVID
BULGERDavid BulgerChief Financial Officer




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##### Table of Contents



(c) Innkeepers
Hospitality Vice President of Accounting



I, Roger
Pollak, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Innkeepers USA Trust;
| | -- |  | ---------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact relating to Innkeepers Hospitality or omit to state a material
fact relating to Innkeepers Hospitality necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of Innkeepers Hospitality as of, and for, the periods presented in this quarterly report;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Innkeepers Hospitality
and we have:
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to Innkeepers Hospitality, including its combined affiliates, is made
known to me by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of Innkeepers Hospitalitys disclosure controls and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation Date;
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | I have disclosed, based on my most recent evaluation, to Innkeepers Hospitalitys auditors and the audit committee of registrants board of directors (or
persons performing the equivalent function):
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect Innkeepers Hospitalitys ability to record, process,
summarize and report financial data and have identified for Innkeepers Hospitalitys auditors any material weaknesses in internal controls; and
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in Innkeepers Hospitalitys internal controls; and
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. |  | I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Date: May 6, 2003



/s/    ROGER
POLLAKRoger PollakVice President of AccountingInnkeepers Hospitality




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EXHIBIT INDEX





|Exhibit |  | Description                                                                                                                                                                                                                                                                                                      
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|10.31   |  | Omnibus Agreement for a 17 Hotel Conversion, dated March 25, 2003, between Residence Inn by Marriott, Inc. and
TownePlace Management Corporation, affiliates of Marriott International, Inc., Innkeepers USA Trust and several of its subsidiaries and Innkeepers Hospitality, Inc. and several of its affiliates
|       
|99.1    |  | Certification of Jeffrey H. Fisher, Chief Executive Officer of Innkeepers USA Trust, pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and dated May 6, 2003                                                                                               
|       
|99.2    |  | Certification of David Bulger, Chief Financial Officer of Innkeepers USA Trust, pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and dated May 6, 2003                                                                                                    
|       
|99.3    |  | Certification of Roger Pollak, Vice President of Accounting of Innkeepers Hospitality, dated May 6,
2003                                                                                                                                                                                                         



26