<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K
---
 X               Annual Report Pursuant to Section 13 or 15(d) of
---                       The Securities Exchange Act of 1934

For the fiscal year ended December 31, 2000      Commission File Number 01-12073

                                EQUITY INNS, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

         Tennessee                                     62-1550848
-------------------------------          ---------------------------------------
(State or Other Jurisdiction of          (I.R.S. Employer Identification Number)
Incorporation or Organization)

             7700 Wolf River Boulevard, Germantown, Tennessee 38138
         -----------------------------------------------------------------------
         (Address of Registrant's Principal Executive Office) (Zip Code)

                                 (901) 754-7774
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

   Securities registered pursuant to Section 12(b) of the Act: Not Applicable

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

                          Common Stock, $.01 par value
           9 1/2% Series A Cumulative Preferred Stock, $.01 par value
           ----------------------------------------------------------
                                (Title of Class)

Indicate by check mark whether the Registrant (1) 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 and (2) has been subject to such filing requirements for
the past 90 days.

                           Yes   X        No
                                ---          ---

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

Aggregate market value of voting stock and non-voting stock held by
nonaffiliates of the Registrant as of March 8, 2001:  $28,609,862.
Number of shares of Common Stock, $.01 par value, outstanding as of March 8,
2001: 36,825,021

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the  Registrant's  proxy  statement  for its 2001 Annual  Meeting of
Shareholders to be held May 10, 2001 (the "Proxy Statement") are incorporated by
reference into Part III of this Report.

Exhibit Index beginning on Page 56.



                                  Page 1 of 60


<PAGE>



                                EQUITY INNS, INC
                           ANNUAL REPORT ON FORM 10-K
                      For the Year Ended December 31, 2000


                                TABLE OF CONTENTS


                                     PART I
                                                                            Page

Item 1.   Business                                                             3

Item 2.   Properties                                                          10

Item 3.   Legal Proceedings                                                   16

Item 4.   Submission of Matters to a Vote of Security Holders                 16

                             PART II

Item 5.   Market for Registrant's Common Equity and Related
             Stockholder Matters                                              16

Item 6.   Selected Financial Data                                             17

Item 7.   Management's Discussion and Analysis of Financial
             Condition and Results of Operations                              19

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk          25

Item 8.   Financial Statements and Supplementary Data                         26

Item 9.   Changes in and Disagreements with Accountants on
             Accounting and Financial Disclosure                              49

                            Part III

Item 10.  Directors and Executive Officers of the Registrant                  49

Item 11.  Executive Compensation                                              49

Item 12.  Security Ownership of Certain Beneficial Owners and
             Management                                                       49

Item 13.  Certain Relationships and Related Transactions                      49

                                     PART IV

Item 14.  Exhibits, Financial Statements, Schedules, and Reports on
             Form 8-K                                                         50


                                        2

<PAGE>



THIS REPORT CONTAINS AND  INCORPORATES  BY REFERENCE  CERTAIN  FORWARD-  LOOKING
STATEMENTS  WITHIN THE MEANING OF SECTION 27A OF THE  SECURITIES ACT OF 1933, AS
AMENDED,  AND SECTION 21E OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS AMENDED,
INCLUDING,  WITHOUT  LIMITATION,  STATEMENTS  CONTAINING  THE WORDS  "BELIEVES,"
"ANTICIPATES,"  "ESTIMATES,"  "PROJECTS,"  "EXPECTS"  AND  SIMILAR  WORDS.  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. ATTENTION
SHOULD BE PAID TO THE VARIOUS FACTORS IDENTIFIED OR INCORPORATED BY REFERENCE IN
THIS REPORT  (INCLUDING THOSE FACTORS SET FORTH IN THE COMPANY'S  CURRENT REPORT
ON FORM 8-K DATED MARCH 23,  2001) WHICH COULD CAUSE ACTUAL  RESULTS TO DIFFER,
INCLUDING BUT NOT LIMITED TO THOSE DISCUSSED IN THE SECTIONS ENTITLED  "INTERNAL
GROWTH   STRATEGY,"   "ACQUISITION   STRATEGY,"    "COMPETITION,"    "LEVERAGE,"
"ENVIRONMENTAL  MATTERS," "TAX STATUS" AND "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL  CONDITION AND RESULTS OF OPERATIONS." THE COMPANY IS NOT OBLIGATED
TO UPDATE ANY SUCH FACTORS OR TO REFLECT THE IMPACT OF ACTUAL  FUTURE  EVENTS OR
DEVELOPMENTS ON SUCH FORWARD-LOOKING STATEMENTS.

                                     PART I

ITEM 1.       BUSINESS

(a)      General Development of Business

Equity  Inns,  Inc.  (the  "Company")  is in the  business of  acquiring  equity
interests in hotel properties.  The Company  commenced  operations in March 1994
and is a real estate  investment trust ("REIT") for federal income tax purposes.
The  Company,  through  its  wholly-owned  subsidiary,  Equity  Inns  Trust (the
"Trust"),  is the sole general  partner of Equity Inns  Partnership,  L.P.  (the
"Partnership") and, at December 31, 2000, owned an approximate 96.8% interest in
the  Partnership.  The Company conducts its business through the Partnership and
its subsidiaries.

(b)      Narrative Description of Business

In order to qualify as a REIT,  neither  the  Company  nor the  Partnership  can
operate  hotels.  The Company has  implemented a strategy of utilizing  multiple
lessees and hotel management companies for its hotel properties. At December 31,
2000, the Partnership or its affiliates owned 96 hotel properties,  with a total
of 12,284 rooms in 34 states (the "Hotels").  During the year ended December 31,
2000 the Partnership or its affiliates, under operating leases providing for the
payment of percentage rent (the "Percentage Leases"), leased 75 of the Company's
hotels  to  affiliates  of  Interstate  Hotels  Corporation  ("IHC"),  which was
recently divested from Wyndham International,  Inc. ("Wyndham"). IHC is referred
to herein as the  "Interstate  Lessee." All payments due under these  Percentage
Leases were guaranteed by Interstate  Hotels,  L.L.C.,  a subsidiary of IHC, and
IHC (except for three hotels where Wyndham  rather than IHC was the  guarantor).
The  Partnership  leased  19  hotels  to  wholly-owned   subsidiaries  of  Prime
Hospitality  Corporation  (collectively,  the "Prime Lessee").  All payments due
under these Percentage Leases are guaranteed by Prime  Hospitality  Corporation.
The Interstate  Lessee and the Prime Lessee are referred to herein  collectively
as the "Lessees", and individually as a "Lessee." During the year ended December
31, 2000, the Lessees  operated and leased hotels owned by the  Partnership  and
its  affiliates  pursuant  to the  Percentage  Leases,  which  provide  for rent
payments  equal to the  greater of (i) a fixed base rent  ("Base  Rent") or (ii)
percentage  rent based on the revenues of the hotels  ("Percentage  Rent").  The
remaining two hotels were operated  pursuant to  management  agreements,  one of
which is  operated  by a  subsidiary  of IHC and one of which is  operated  by a
wholly-owned subsidiary of MeriStar Hotels & Resorts, Inc.

                                        3

<PAGE>




Effective  January 1, 2001 (the  "Effective  Date") and  pursuant to the federal
REIT  Modernization Act (the "RMA") which took effect on the Effective Date, the
Company and its  affiliates  (1)  terminated or assigned the  Percentage  Leases
between  the  Company  and the  Interstate  Lessee,  (2)  terminated  the  lease
guaranties with Interstate Hotels, L.L.C. and Wyndham and (3) terminated certain
other  agreements  between  the  Company and the  Interstate  Lessee.  As of the
Effective Date, the Company entered into new Percentage Leases with wholly-owned
taxable REIT subsidiaries of the Company (the "TRS Lessees") for the lease of 77
of the  Hotels.  The terms of the  Percentage  Leases  with the TRS  Lessees are
substantially  identical to the Percentage Leases terminated between the Company
and the Interstate  Lessee. The remaining 19 Hotels continue to be leased to the
Prime  Lessee.  Under  the RMA,  the TRS  Lessees  are  required  to enter  into
management  agreements  with  eligible  independent  contractors  to manage  the
hotels.  On the  Effective  Date,  the TRS Lessees  entered into new  management
agreements  with Promus Hotels,  Inc.  ("Promus")  (as to 20 Hotels),  Crestline
Hotels  &  Resorts,  Inc.  ("Crestline")  (as  to  two  Hotels)  and  Crossroads
Hospitality  Company,  L.L.C., an affiliate of IHC ("CHC") (as to 55 Hotels). In
future reporting periods, the rents generated by the Company's Percentage Leases
with the TRS  Lessees  will be  eliminated  in  consolidation,  while the actual
operating  results of all the Company's hotels leased by the TRS Lessees will be
included in the Company's financial statements.

The diversity of the Company's  portfolio is such that, at December 31, 2000, no
individual  hotel  exceeded  2.1%  of the  total  rooms  in the  portfolio.  The
Company's  geographical  distribution and franchise  diversity is illustrated by
the following charts.

                               Franchise Diversity

                                          # of Hotel            # of Rooms/
  Franchise Affiliation                   Properties              Suites
  ---------------------                   ----------            -----------

  Premium Limited Service Hotels:
       Hampton Inn                            48                   6,030
       Hampton Inn & Suites                    1                     125
       Holiday Inn Express                     1                     101
       Comfort Inn                             2                     245
                                              --                  ------
           Sub-total                          52                   6,501
                                              --                  ------

  All-Suite Hotels:
       AmeriSuites                            19                   2,403

  Premium Extended Stay Hotels:
       Residence Inn                          11                   1,351
       Homewood Suites                         9                   1,295
                                              --                  ------
           Sub-total                          20                   2,646
                                              --                  ------

  Full Service Hotels:
       Holiday Inn                             4                     557
       Comfort Inn                             1                     177
                                              --                  ------
           Sub-total                           5                     734
                                              --                  ------

           Total                              96                  12,284
                                              ==                  ======



                                        4

<PAGE>



                             Geographical Diversity

                        Number of         Number of           Percentage of
State                     Hotels         Suites/Rooms          Suites/Rooms
-----                   ---------        ------------         -------------

Alabama                       3                 382                 3.1%
Arizona                       4                 495                 4.0%
Arkansas                      1                 123                 1.0%
Colorado                      3                 356                 2.9%
Connecticut                   3                 405                 3.3%
Florida                       8               1,079                 8.8%
Georgia                       3                 314                 2.6%
Idaho                         1                 104                 0.8%
Illinois                      3                 499                 4.1%
Indiana                       2                 255                 2.1%
Kansas                        2                 260                 2.1%
Kentucky                      1                 119                 1.0%
Louisiana                     1                 128                 1.0%
Maryland                      2                 244                 2.0%
Michigan                      3                 399                 3.2%
Minnesota                     2                 248                 2.0%
Missouri                      2                 242                 2.0%
Nebraska                      1                  80                 0.7%
Nevada                        1                 202                 1.6%
New Jersey                    3                 424                 3.5%
New Mexico                    1                 128                 1.0%
New York                      1                 154                 1.3%
North Carolina                5                 614                 5.0%
Ohio                          6                 736                 6.0%
Oklahoma                      1                 135                 1.1%
Oregon                        1                 168                 1.4%
Pennsylvania                  2                 249                 2.0%
South Carolina                3                 404                 3.3%
Tennessee                    10               1,172                 9.5%
Texas                         8               1,105                 9.0%
Vermont                       2                 200                 1.6%
Virginia                      2                 245                 2.0%
Washington                    1                 161                 1.3%
West Virginia                 4                 455                 3.7%
                             --              ------               -----

                             96              12,284               100.0%
                             ==              ======               =====



GROWTH STRATEGY

The Company's  business  objectives  are to increase  funds from  operations and
enhance  shareholder value primarily through (i) aggressive asset management and
the strategic  investment of capital in its diversified  hotel  portfolio,  (ii)
selectively  acquiring hotels that have been  underperforming due to the lack of
sufficient capital improvements,  poor management or franchise affiliation,  and
(iii) selectively disposing of hotels that have reached their earnings potential
or may, in management's judgment,  suffer adverse changes in their local market,
or require large capital outlays.


                                        5

<PAGE>



Currently,  the Company's acquisition and growth strategy has been curtailed due
to a variety of factors,  including the difficulty in obtaining equity financing
on terms deemed appropriate by management.

EMPLOYEES

At March 1, 2001, the Company employed,  through a wholly-owned  subsidiary,  14
employees.

COMPETITION

The hotel industry is highly competitive with various participants  competing on
the basis of price, level of service and geographic location. Each of the Hotels
is located in a developed area that includes other hotel properties.  The number
of  competitive  hotel  properties  in a  particular  area could have a material
adverse effect on occupancy,  ADR and Revenue Per Available  Room  ("REVPAR") of
the Hotels or at hotel properties  acquired in the future.  The Company believes
that brand  recognition,  location,  the  quality of the hotel,  consistency  of
services provided, and price are the principal competitive factors affecting the
Company's hotels.

FRANCHISE AGREEMENTS

A part of the  Company's  asset  management  program is the licensing of all its
Hotels  under  nationally  franchised  brands.  The  Company  believes  that the
public's  perception  of quality  associated  with a franchisor  is an important
feature in the  operation  of a hotel.  The  Company  believes  that  franchised
properties  generally  have higher levels of occupancy  and ADR than  properties
which are  unfranchised  due to  access  to  national  reservation  systems  and
advertising and marketing programs provided by franchisors.

The  Partnership  is also  committed  to  franchisors  to make  certain  capital
improvements  to hotel  properties,  which  will be funded  from  borrowings  or
working  capital.  The Partnership  made capital  improvements of  approximately
$13.6 million to its hotel  properties  in 2000,  including  approximately  $1.3
million in renovations required by franchisors. In 2001, the Partnership expects
to fund approximately $17 million of capital improvements for the Hotels.

SEASONALITY

The Hotels'  operations  historically  have been  seasonal in nature,  generally
reflecting  higher  occupancy rates during the second and third  quarters.  This
seasonality  can be expected to cause  fluctuations  in the Company's  quarterly
lease revenue to the extent that it receives Percentage Rent.

TAX STATUS

The  Company  intends  to  operate  so as to be taxed as a REIT  under  Sections
856-860 of the Internal  Revenue Code of 1986, as amended (the "Code").  As long
as the Company  qualifies for taxation as a REIT, with certain  exceptions,  the
Company will not be taxed at the corporate  level on its taxable  income that is
distributed to its shareholders. A REIT is subject to a number of organizational
and operational requirements, including a requirement effective January 1, 2001,
that it  distribute  annually  at least 90% of its  taxable  income.  Failure to
qualify  as a REIT  will  render  the  Company  subject  to tax  (including  any
applicable  minimum tax) on its taxable  income at regular  corporate  rates and
distributions to the shareholders in any such year will not be deductible by the
Company.  Even if the Company  qualifies for taxation as a REIT, the Company may
be subject  to certain  state and local  taxes on its  income and  property.  In
connection  with the  Company's  election to be taxed as a REIT,  the  Company's
Charter imposes certain  restrictions on the transfer of shares of Common Stock.
The Company has adopted the calendar year as its taxable year.

                                        6

<PAGE>




In December  1999,  the RMA was signed into law. The RMA  includes  several REIT
provisions  (the  "REIT  Provisions").  The REIT  Provisions  generally  will be
effective January 1, 2001 and will overhaul the existing tax rules applicable to
taxable subsidiaries of REITs. Under the REIT Provisions, the Company is allowed
to own all of the  stock in TRSs.  In  addition,  a TRS is  allowed  to  perform
"non-customary"  services for hotel guests and is allowed to enter into many new
businesses.  However,  a TRS is not allowed to franchise or manage hotels.  Each
TRS is allowed to enter into management contracts for the Company's hotels, with
independent  third party  management  companies.  The use of TRSs,  however,  is
subject to certain restrictions, including the following:

       o  no more than 20% of the REIT's assets may consist of securities of its
          TRSs,
       o  the tax  deductibility  of  interest  paid or accrued by a TRS to its
          affiliated  REIT is  limited,  and
       o  a 100%  excise  tax is  imposed non-arm's length transactions between
          a TRS and its on affiliated REIT or the REIT's tenants.

As a  result  of the  opportunities  offered  by the  RMA,  effective  as of the
Effective Date, the Company terminated or assigned the Percentage Leases between
the Company and the  Interstate  Lessee and entered into new  Percentage  Leases
with the TRS Lessees for the lease of 77 of the Hotels.  On the Effective  Date,
the TRS Lessees  also entered into new  management  agreements  with CHC (for 55
Hotels), Promus (for 20 Hotels) and Crestline (for two Hotels).

ENVIRONMENTAL MATTERS

Under  various  federal,  state  and  local  laws and  regulations,  an owner or
operator of real estate may be liable for the costs of removal or remediation of
certain  hazardous or toxic substances on such property.  Such laws often impose
such liability  without regard to whether the owner knew of, or was  responsible
for, the presence of hazardous or toxic substances.  Furthermore,  a person that
arranges  for the disposal or  transports  for disposal or treatment a hazardous
substance at a property  owned by another may be liable for the costs of removal
or remediation  of hazardous  substances  released into the  environment at that
property.  The  costs  of  remediation  or  removal  of such  substances  may be
substantial  and the  presence  of such  substances,  or the failure to promptly
remediate  them,  may  adversely  affect the  owner's  ability to sell such real
estate or to use such real estate as collateral.

In  connection  with  the  Partnership's  acquisition  of the  Hotels,  Phase  I
environmental site assessments  ("ESAs") were obtained on all of the Hotels. The
Phase I ESAs included historical review of the Hotels, reviews of certain public
records,  preliminary  investigations  of the sites and surrounding  properties,
screenings for hazardous and toxic substances and underground storage tanks, and
the  preparation  and  issuance  of a written  report.  The Phase I ESAs did not
include invasive procedures to detect contaminants from former operations on the
Hotels or migrating from neighbors or caused by third parties.  The Phase I ESAs
have not revealed any  environmental  liability that the Company  believes would
have a material  adverse effect on the Company's  business,  assets,  results of
operations or liquidity,  nor is the Company aware of any such liability or that
there are material environmental liabilities of which the Company is unaware.

EXECUTIVE OFFICERS OF THE COMPANY

The  Company's  executive  officers,  listed  below,  serve in their  respective
capacities  for  approximate  one year  terms  and are  subject  to  re-election
annually by the Board of Directors, normally in May of each year.


                                        7

<PAGE>



NAME                          POSITION
----                          --------

Phillip H. McNeill, Sr.       Chairman of the Board, Chief Executive Officer
                              and Director

Howard A. Silver              President, Chief Operating Officer and Director

Donald H. Dempsey             Executive Vice President, Chief Financial Officer,
                              Secretary, Treasurer and Director

Phillip H. McNeill, Jr.       Executive Vice President of Development

J. Ronald Cooper              Vice President, Assistant Secretary, Assistant
                              Treasurer and Controller

Phillip H. McNeill, Sr. (age 62) is Chairman and Chief Executive Officer of the
Company  and has been Chairman of McNeill Hospitality Corporation since 1984.
From 1963 to 1977, he served in various capacities, including President and
Chief Executive Officer, with Schumacher Mortgage Company, Inc., a mortgage
banking firm and subsidiary of Time, Inc. Mr. McNeill has served as President
and Director of the Memphis Mortgage Bankers Association and the Tennessee State
Mortgage Bankers Association.  He has served as a member of the Board of
Trustees of the University of Memphis  Foundation and as a Director of First
Commercial Bank of Memphis. He is currently serving as a member of the Boards of
Directors of National Commerce Bancorporation and Interstate Hotels Corporation.
Mr. McNeill holds both a B.S. and a J.D. degree from the University of Memphis
and is a graduate of the Northwestern School of Mortgage Banking.

Howard A. Silver (age 46) is President and Chief Operating Officer of the
Company and has been a certified public accountant since 1980.  Mr. Silver
joined the Company in May 1994 and has previously served as Executive Vice
President of Finance, Secretary, Treasurer and Chief Financial Officer of the
Company.  From 1992 until joining the Company, Mr. Silver served as Chief
Financial Officer of Alabaster Originals, L.P., Memphis, Tennessee, a fashion
jewelry wholesaler.  From 1978 to 1985, Mr. Silver was a certified public
accountant with the national accounting firm of Coopers & Lybrand L.L.P., and
from 1987 to 1992 Mr. Silver was employed as a certified public accountant with
the national accounting firm of Ernst & Young.  Mr. Silver holds a B.S. in
Accounting from the University of Memphis.

Donald H. Dempsey (age 56) is Executive Vice President, Secretary, Treasurer and
Chief Financial Officer of the Company.  Prior to joining the Company in July
1998, Mr. Dempsey served as Executive Vice President and Chief Financial Officer
of Choice Hotels International, Inc. from January 1998 to July 1998.  From April
1995 to December 1997, Mr. Dempsey served as Senior Vice President and Chief
Financial Officer of Promus Hotel Corporation, from October 1993 to April 1995
as Senior Vice President of Finance and Administration of the Hotel Division of
The Promus Companies Incorporated, and from December 1991 to October 1993 as
Vice President, Finance of the Hampton Inn/Homewood Suites Hotel Division of The
Promus Companies Incorporated.  Mr. Dempsey served in various other senior
financial and development officer positions within the Hotel Division of The
Promus Companies Incorporated and its predecessor companies from 1983 to 1991.
From 1969 to 1983, Mr. Dempsey held various corporate and division financial
management and administrative positions with Holiday Inns, Inc.  Mr. Dempsey is
currently serving on the Board of Directors of John Q. Hammons Hotels, Inc.  Mr.
Dempsey holds a B.S. in Accounting from Mississippi State University.



                                        8

<PAGE>



Phillip H. McNeill, Jr. (age 39) is Executive Vice President of Development of
the Company.  From 1994 to 1996, he served as President of Trust Leasing, Inc.,
formerly McNeill Hotel Co., Inc., the Company's former lessee (the "Former
Lessee"), and from 1984 to 1996 served as Vice President of Trust Management,
Inc., formerly McNeill Hospitality Corporation, which was an affiliate of the
Former Lessee.  Mr. McNeill is the son of Phillip H. McNeill, Sr. and holds a
B.B.A. from the University of Memphis and is a graduate of the Northwestern
School of Mortgage Banking.

J. Ronald Cooper (age 52) is Vice President, Assistant Secretary, Assistant
Treasurer and Controller of the Company.  From 1994 to 1996, he was Controller
and Director of Financial Reporting for the Former Lessee and joined the Former
Lessee in October 1994.  Mr. Cooper has been a certified public accountant since
1972.  From 1978 until joining the Former Lessee, Mr. Cooper was employed as
Secretary, Treasurer and Controller of Wall Street Deli, Inc., a publicly-owned
delicatessen company.  Prior to that, Mr. Cooper was a certified public
accountant with the national accounting firm of Coopers & Lybrand L.L.P. from
1970 to 1976.  Mr. Cooper holds a B.S. degree in accounting from Murray State
University.




                                        9

<PAGE>



ITEM 2.       PROPERTIES

The following  table sets forth certain  information for the year ended December
31, 2000 with respect to the Hotels owned at December 31, 2000:

<TABLE>
<CAPTION>

                          Year Ended December 31, 2000
                                                                                                          Revenue
                                        Number                                                  Average     Per
                            Date         Of          Room           Lease                        Daily    Available
                           Opened       Rooms      Revenue(1)    Payment (1)(2)   Occupancy      Rate     Room (3)
                           ------      -------     ----------    --------------   ---------    ---------  ---------
<S>                        <C>         <C>         <C>           <C>              <C>          <C>        <C>
Hampton Inn:
   Albany, New York         1986         154        $  3,594       $  1,769          71.1%      $89.73     $63.77
   Ann Arbor, Michigan      1986         150           2,948          1,379          71.5%      $75.62     $54.06
   Atlanta (Northlake),
       Georgia              1988         130           1,754            782          55.7%      $66.16     $36.87
   Austin, Texas            1987         122           2,373          1,156          70.6%      $75.93     $53.58
   Baltimore (Glen Burnie),
       Maryland             1989         116           2,746          1,319          81.3%      $80.28     $65.24
   Beckley, West Virginia   1992         108           1,911            974          73.4%      $65.85     $48.36
   Birmingham (Mountain
       Brook), Alabama      1987         131           2,023            996          59.6%      $70.77     $42.19
   Birmingham (Vestavia),
       Alabama              1986         123           1,555            605          54.9%      $62.91     $34.54
   Chapel Hill, North
       Carolina             1986         122           2,009            968          61.5%      $73.13     $44.99
   Charleston, South
       Carolina             1985         125           1,651            643          54.1%      $66.77     $36.10
   Chattanooga, Tennessee   1988         168           2,541          1,100          67.9%      $60.81     $41.31
   Chicago (Gurnee),
       Illinois             1988         134           1,981            782          57.6%      $70.12     $40.38
   Chicago (Naperville),
       Illinois             1987         130           2,580          1,194          72.3%      $76.19     $55.08
   Cleveland, Ohio          1987         123           1,712            780          53.8%      $70.68     $38.03
   College Station, Texas   1986         135           2,114            950          62.1%      $69.25     $43.02
   Colorado Springs,
       Colorado             1985         128           1,859            786          55.5%      $71.44     $39.68
   Columbia, South Carolina 1985         121           1,587            676          56.7%      $63.22     $35.83
   Columbus, Georgia        1986         119           2,064            987          73.2%      $64.83     $47.47
   Columbus (Dublin), Ohio  1988         123           2,207          1,063          65.6%      $74.71     $49.03
   Dallas (Addison), Texas  1985         160           2,242          1,053          51.9%      $74.39     $38.60
   Dallas (Richardson),
       Texas                1987         130           2,222          1,089          66.2%      $70.48     $46.69
   Denver (Aurora),
       Colorado             1985         132           1,655            616          52.9%      $65.25     $34.51
   Detroit (Madison
       Heights), Michigan   1987         124           2,503          1,224          73.0%      $75.51     $55.16
   Detroit (Northfield),
       Michigan             1989         125           2,661          1,338          72.9%      $79.79     $58.17
   Fayetteville, North
       Carolina             1986         122           1,339            469          51.9%      $57.83     $30.00
   Ft. Worth, Texas         1987         125           1,477            471          55.7%      $57.95     $32.28
   Gastonia, North Carolina 1989         109           1,689            836          60.8%      $69.67     $42.35
   Indianapolis, Indiana    1987         129           2,359          1,089          62.8%      $79.63     $49.97
   Jacksonville, Florida    1986         122           1,676            641          62.1%      $62.34     $38.72
   Kansas City (Overland
       Park), Kansas        1991         134           2,364          1,107          65.4%      $73.66     $48.20
   Kansas City, Missouri    1987         120           2,009            892          62.3%      $73.44     $45.75
   Knoxville, Tennessee     1991         118           1,884            771          72.1%      $60.48     $43.62
   Little Rock (North),
       Arkansas             1985         123           1,309            598          51.0%      $56.97     $29.08
   Louisville, Kentucky     1986         119           1,886            837          58.1%      $74.83     $43.51
   Memphis (Poplar),
       Tennessee            1985         126           2,432          1,190          68.8%      $77.29     $53.17
   Memphis (Sycamore View),
       Tennessee            1984         117           1,512            526          61.4%      $58.03     $35.61
   Meriden, Connecticut     1988         125           2,438          1,219          65.6%      $81.33     $53.32
   Milford, Connecticut     1986         148           3,161          1,557          75.2%      $77.58     $58.35
   Morgantown, West
       Virginia             1991         108           2,033          1,016          66.9%      $76.91     $51.43
   Nashville (Briley
       Parkway), Tennessee  1987         120           2,216            972          66.5%      $75.91     $50.45
   Norfolk, Virginia        1990         119           2,153          1,050          68.2%      $72.53     $49.43
   Pickwick, Tennessee      1994          50             781            260          66.0%      $64.64     $42.65
   San Antonio (Bowie),
       Texas                1995         169           3,568          1,943          69.4%      $83.14     $57.68
   Sarasota, Florida        1987          97           1,290            447          52.4%      $69.32     $36.33
   Scottsdale, Arizona      1996         126           1,753            829          46.0%      $82.67     $38.02
   Scranton, Pennsylvania   1994         129           2,524          1,139          72.5%      $73.70     $53.45
</TABLE>


                                       10

<PAGE>


<TABLE>
<CAPTION>


                          Year Ended December 31, 2000
                                                                                                          Revenue
                                        Number                                                  Average     Per
                            Date         Of           Room           Lease                       Daily    Available
                           Opened       Rooms      Revenue (1)   Payment (1)(2)   Occupancy      Rate      Room (3)
                           ------      -------     -----------   --------------   ---------    ---------  ---------
<S>                        <C>          <C>        <C>           <C>              <C>           <C>        <C>

Hampton Inn (Continued):
   State College,
       Pennsylvania         1987         120           2,400          1,182          65.2%      $83.79     $54.64
   St. Louis (Westport),
       Missouri             1987         122          1,748            685          56.6%      $69.15     $39.15

Hampton Inn & Suites:
   Memphis (Bartlett),
       Tennessee            1998         125          1,992            858          59.1%      $73.65     $43.54

Comfort Inn:
   Dallas (Arlington),
       Texas                1985         141          1,384            622          50.5%      $53.14     $26.82
   Jacksonville Beach,
       Florida              1973         177          4,061          1,946          67.9%      $92.29     $62.68
   Rutland, Vermont         1985         104          1,848            798          73.3%      $66.24     $48.55

Residence Inn:
   Boise, Idaho (4)         1986         104          2,717          1,195          86.3%      $83.26     $71.84
   Burlington, Vermont      1988          96          2,457          1,150          71.1%      $98.36     $69.92
   Colorado Springs,
       Colorado             1984          96          2,673          1,430          82.3%      $92.38     $76.07
   Minneapolis (Eagan),
       Minnesota            1988         120          3,222          1,600          85.5%      $85.75     $73.35
   Oklahoma City, Oklahoma  1982         135          3,011          1,410          76.6%      $79.61     $60.95
   Omaha, Nebraska          1981          80          1,946            750          75.2%      $88.39     $66.46
   Portland, Oregon         1990         168          4,890          2,548          71.9%     $110.56     $79.53
   Princeton, New Jersey    1988         208          6,637          3,560          75.0%     $116.28     $87.18
   Somers Point,
       New Jersey (4)       1988         120          3,621          1,685          77.0%     $107.10     $82.44
   Tinton Falls, New Jersey 1988          96          3,307          1.613          84.9%     $110.89     $94.12
   Tucson, Arizona          1985         128          3,235          1,563          81.9%      $84.28     $69.05

Holiday Inn:
   Bluefield, West Virginia 1980         120          2,044            913          65.2%      $71.35     $46.53
   Charleston (Mt. Pleasant),
       South Carolina       1988         158          2,682          1,206          60.7%      $76.34     $46.38
   Oak Hill, West Virginia  1983         119          1,252            582          42.3%      $67.98     $28.74
   Wilkesboro, North
       Carolina             1985         101          1,174            561          52.3%      $60.78     $31.81
   Winston-Salem, North
       Carolina             1969         160          1,490            528          39.8%      $64.27     $25.61

Homewood Suites:
   Augusta, Georgia         1997          65          1,496            721          68.9%      $91.28     $62.88
   Chicago, Illinois        1999         235          8,835          4,555          72.0%     $143.97    $103.61
   Cincinnati (Sharonville),
       Ohio                 1990         111          2,460          1,169          72.2%      $83.89     $60.56
   Hartford, Connecticut    1990         132          4,329          2,241          76.6%     $116.94     $89.60
   Memphis (Germantown),
       Tennessee            1996          92          1,938            892          66.8%      $86.13     $57.54
   Orlando, Florida         1999         252          6,116          3,058          74.5%      $89.02     $66.31
   Phoenix, Arizona         1996         124          3,368          1,476          73.0%     $101.60     $74.22
   San Antonio, Texas       1996         123          2,611          1,065          70.9%      $81.85     $58.00
   Seattle, Washington      1998         161          5,107          2,425          77.1%     $112.35     $86.67

AmeriSuites:
   Albuquerque, New Mexico  1997         128          2,609          1,343          82.6%      $67.40     $55.70
   Baltimore, Maryland      1996         128          3,676          2,014          86.3%      $90.96     $78.46
   Baton Rouge, Louisiana   1997         128          2,621          1,384          73.7%      $75.93     $55.95
   Birmingham, Alabama      1997         128          2,202          1,041          67.6%      $69.51     $47.00
   Cincinnati (Blue Ash),
       Ohio                 1990         127          1,730            811          51.6%      $72.17     $37.23
   Cincinnati (Forest
       Park), Ohio          1992         126          1,976            832          59.1%      $72.49     $42.85
   Columbus, Ohio           1994         126          2,620          1,270          75.1%      $75.67     $56.81
   Flagstaff, Arizona       1993         117          1,835            781          71.7%      $59.76     $42.85
   Indianapolis, Indiana    1992         126          2,443          1,225          65.8%      $80.47     $52.97
</TABLE>



                                       11

<PAGE>


<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                          Year Ended December 31, 2000
                                                                                                          Revenue
                                        Number                                                  Average     Per
                            Date         Of           Room           Lease                       Daily    Available
                           Opened       Rooms      Revenue(1)    Payment (1)(2)   Occupancy      Rate      Room (3)
                           ------      -------     ----------    --------------   ---------    ---------  ---------
<S>                        <C>         <C>          <C>          <C>              <C>          <C>         <C>
AmeriSuites (Continued):
    Jacksonville, Florida   1996         112           1,729            707          62.5%      $65.44     $40.89
    Las Vegas, Nevada       1998         202           4,962          2,637          84.4%      $79.48     $67.12
    Kansas City (Overland
       Park), Kansas        1994         126           2,452          1,164          65.0%      $81.79     $53.18
    Memphis (Wolfchase),
        Tennessee           1996         128           2,093            961          59.7%      $74.76     $44.67
    Miami, Florida          1996         126           3,114          1,760          85.3%      $79.13     $67.53
    Miami (Kendall),
       Florida              1996          67           2,263          1,392          87.4%     $105.58     $92.30
    Minneapolis, Minnesota  1997         128           2,944          1,483          78.4%      $80.15     $62.84
    Nashville, Tennessee    1997         128           2,408          1,218          68.4%      $75.18     $51.39
    Richmond, Virginia      1992         126           2,444          1,197          68.4%      $77.48     $52.99
    Tampa, Florida          1994         126           3,134          1,772          71.6%      $94.86     $67.96
                                      ------        --------       --------          -----      ------     ------

Consolidated Totals/Weighted
    Average for all Hotels            12,284        $241,651       $115,067          67.1%      $80.26     $53.81
                                      ======        ========       ========          =====      ======     ======
</TABLE>

------------------------

(1)   Amounts in thousands.

(2)   Represents lease payments calculated by applying the rent provisions in
      the Percentage Leases to the room revenues of the hotels.

(3)   Determined by multiplying occupancy times the ADR.

(4)   Hotel  operated  under  a  management   contract;   lease  payment  amount
      represents  operating  income after payment of  management  fees and other
      hotel operating expenses.


THE PERCENTAGE LEASES

Until December 31, 2000, all but two of the Hotels owned by the Partnership were
separately  leased to the Interstate  Lessee and the Prime Lessee (and 77 to the
TRS  Lessees  following  the  Effective  Date)  under  Percentage   Leases.  All
Percentage Leases with the Lessees have a non-cancelable  initial term of ten to
fifteen  years,  subject to earlier  termination  upon the occurrence of certain
contingencies  described  in the  Percentage  Leases.  During  the  term of each
Percentage  Lease, the Lessees are obligated to pay (i) the greater of Base Rent
or Percentage Rent and (ii) certain other amounts, including interest accrued on
any late  payments  or  charges.  Base Rent  accrues  and is required to be paid
monthly.  Percentage  Rent is based on  percentages  of room  revenues  and to a
lesser extent, food and beverage revenues,  if any, for each of the Hotels. Both
the Base Rent and the  threshold  room revenue  amount in each  Percentage  Rent
formula  will be adjusted  annually for changes in the CPI.  The  adjustment  is
calculated  at the  beginning  of each lease year after a holding  period of the
first full calendar year of the lease,  based upon the average change in the CPI
during the prior 24 months.  The  adjustment in any lease year may not exceed 7%
of the Base Rent and threshold  room revenue  amounts for the prior fiscal year.
Percentage  Rent is payable  quarterly,  on or before the 30th day following the
end of each of the calendar quarters in each fiscal year.

At the  Effective  Date and pursuant to the RMA, the Company and its  affiliates
terminated  or  assigned  the  Percentage  Leases  between  the  Company and the
Interstate  Lessee.  As of the Effective Date, the Company also entered into new
Percentage  Leases with the TRS  Lessees for the lease of 77 of the Hotels.  The
terms of the Percentage Leases with the TRS Lessees are substantially  identical
to the  Percentage  Leases  terminated  betwen the  Company  and the  Interstate
Lessee. The remaining 19 Hotels continue to be leased to the Prime Lessee. Under
the RMA, the TRS Lessees are required to enter into  management  agreements with
eligible  independent  contractors to manage the hotels.  On the Effective Date,
the TRS Lessees entered into new management agreements with

                                       12

<PAGE>



Promus  (as to 20  Hotels),  Crestline  (as to two  Hotels)  and  CHC  (as to 55
Hotels).  In future  reporting  periods,  the rents  generated by the  Company's
Percentage  Leases with the TRS Lessees  will be  eliminated  in  consolidation,
while the actual  operating  results of all the Company's  hotels managed by the
TRS Lessees will be included in the Company's financial statements.

The following  table  summarizes  the  percentages of room revenues in excess of
certain  levels  payable as Percentage  Rent under the  Percentage  Leases as of
January 1, 2001.

                                      Range of Percentages of Room Revenue
                                    ---------------------------------------
                                      First Tier                 Top Tier
                                    --------------             ------------

Full Service (1)                    28% to 38%                 65% to 77%

Extended Stay                       27% to 49.4%               65% to 75%

All-Suite                           35.7% to 59.7%             69% to 76.1%

Limited Service                     22% to 37%                 62% to 74%

(1) Percentage Rent formula also includes 15%-30% of beverage revenue and 5%-15%
of food revenue.

Other  than  real  estate  and  personal   property  taxes  and  maintenance  of
underground  utilities and  structural  elements,  which are  obligations of the
Partnership,  the  Percentage  Leases  require  the  Lessees  to pay  insurance,
utilities  and all other costs and  expenses  incurred in the  operation  of the
Hotels. The Percentage Leases also provide for rent reductions and abatements in
the event of damage or destruction or a partial taking of any Hotel.

Maintenance and  Modifications.  Under the Percentage Leases, the Partnership is
required to maintain the  underground  utilities and the structural  elements of
the improvements,  including exterior and interior load bearing walls (excluding
plate glass) and the roof of each Hotel.  In  addition,  the  Percentage  Leases
obligate the  Partnership  to fund certain  capital  expenditures  at the Hotels
pursuant to the capital budgets approved by the Partnership,  when and as deemed
necessary  by the Lessees,  up to an amount equal to 4% of annual room  revenue,
net of amounts actually expended for capital  expenditures for each Hotel during
any fiscal year. The  Partnership's  obligation  will be carried  forward to the
extent  that the Lessees  have not  expended  such  amount,  and any  unexpended
amounts  will remain the property of the  Partnership  upon  termination  of the
Percentage Leases.  Otherwise,  the Lessees are required,  at their expense,  to
maintain the Hotels in good order and repair, except for ordinary wear and tear,
and  to  make  non-structural,   foreseen  and  unforeseen,   and  ordinary  and
extraordinary, repairs which may be necessary and appropriate to keep the Hotels
in good order and repair.

Insurance and Property  Taxes.  The  Partnership is responsible  for paying real
estate and  personal  property  taxes on the Hotels  (except to the extent  that
personal  property  associated  with the  Hotels  is owned by the  Lessee).  The
Lessees are required to keep in force and pay or reimburse the  Partnership  for
all  insurance  on the  Hotels,  with  extended  coverage,  including  casualty,
comprehensive general public liability, workers' compensation, earthquake, flood
and other  insurance  appropriate  and customary for  properties  similar to the
Hotels and is required to name the Partnership as an additional named insured.



                                       13

<PAGE>



Indemnification.  Under  the  Percentage  Leases,  the  Lessees  have  agreed to
indemnify the Partnership,  for certain losses relating to the Hotels, including
losses  related  to any  accident  or  injury to  person  or  property,  certain
environmental  liability,  taxes and  assessments and the sale or consumption of
alcoholic beverages.

Damage to Hotels.  In the event of damage to or destruction of any Hotel covered
by  insurance  which  renders  the Hotel  unsuitable  for the  Lessee's  use and
occupancy,  the Lessee, at its option, will be obligated to (i) repair, rebuild,
or restore  the Hotel or (ii) in the case of the Prime  Lessee,  it may offer to
acquire the Hotel on the terms set forth in the applicable  Percentage Lease. In
the event that damage to or destruction of a Hotel which is covered by insurance
does not render the Hotel wholly  unsuitable for the Lessee's use and occupancy,
the Lessee  generally  will be obligated to repair or restore the Hotel.  In the
event  of  damage  to or  destruction  of any  Hotel  which  is not  covered  by
insurance,  the Lessee will be obligated to either repair,  rebuild,  or restore
the Hotel,  or in the case of the Prime  Lessee,  offer to purchase the Hotel on
the terms and conditions set forth in the Percentage Lease. The Percentage Lease
shall remain in full force and effect  during the period  required for repair or
restoration  of any  damaged  or  destroyed  Hotel,  with the  Lessee to receive
certain credits against rental payments and other charges.

Condemnation  of Hotel.  In the event of a total  condemnation  of a Hotel,  the
relevant  Percentage  Lease will  terminate with respect to such Hotel as of the
date of taking,  and the  Partnership  and the Lessee  will be entitled to their
shares of the condemnation  award under the Percentage  Lease. In the event of a
partial taking which does not render the Hotel  unsuitable for the Lessee's use,
the  Lessee  shall  restore  the  untaken  portion  of the  Hotel to a  complete
architectural  unit and the  Partnership  shall  contribute  to the cost of such
restoration.  If the  condemnation  award is  inadequate to restore the affected
Hotel,  either the  Partnership  or the Lessee shall have the right to terminate
the lease.

Events of Default.  "Events of Default" include the following:

         (i)   the occurrence of an Event of Default under any other lease
between the Partnership and a Lessee or any affiliate of a Lessee;

         (ii) the failure by a Lessee to pay Base Rent,  Percentage  Rent or any
additional  charges within 10 days after written notice that such has become due
and payable;

         (iii) the failure by a Lessee to observe or perform any other term of a
Percentage  Lease and the  continuation  of such failure for a period of 30 days
after receipt by the Lessee of notice from the Partnership thereof,  unless such
failure cannot be cured within such period and the Lessee commences  appropriate
action to cure such failure within such period;

         (iv) if a Lessee files a petition in bankruptcy or  reorganization,  is
adjudicated a bankrupt,  or makes an assignment  for the benefit of creditors or
similar bankruptcy or reorganization action occurs;

         (v) if the Lessee  voluntarily  discontinues  operations of a Hotel for
more than 30 days, except as a result of damage,  destruction,  or condemnation;
or

         (vi) if the franchise  agreement  with respect to a Hotel is terminated
as a result of any action or  failure to act by the Lessee or its agents  (other
than  certain  failures  to  complete  a  capital  improvement  required  by the
franchisor.



                                       14

<PAGE>



Performance Standard in Prime Percentage Leases.  Each Percentage Lease with the
Prime Lessee contains the following performance standards:

         (i) In the  event  the Hotel  does not  produce  REVPAR in an amount at
least equal to 90% of the estimated REVPAR under the applicable operating budget
for any year,  the  Partnership  has the option within 90 days after year-end to
terminate the lease on 30 days notice of such  termination  to the Prime Lessee,
unless during such period Lessee pays to Lessor,  as additional  rent, an amount
equal to the sum the Partnership  would have received as rent during such period
had the Hotel  maintained at least the required 90% of budgeted REVPAR minus the
amount of rent previously received by the Partnership for such period.

         (ii) In the event the  "Competitive  Set" REVPAR index,  as reported by
Smith Travel  Research,  is below certain  levels for any fiscal year,  then the
Partnership has the option within 90 days of year- end to terminate the lease on
30 days notice,  unless  during such period the Prime Lessee pays as  additional
rent an amount equal to the amount of rent the  Partnership  would have received
for such period had the Hotel's  performance met the required criteria minus the
amount of the rent the  Partnership  actually  received for such period.  In the
event the Hotel does not meet or exceed the minimum  REVPAR index for any fiscal
year,  then the threshold  dollar  amounts of Room Revenues then included in the
revenues  computations  shall not be adjusted to reflect any changes in the CPI,
but the Base Rent shall be so adjusted.

         (iii) The Partnership  has the right to terminate the applicable  lease
on 30 days notice if during any fiscal year the Prime Lessee actually expends or
incurs less than 95% of the dollar amounts contained in the operating budget for
sales and  marketing  expenses  (excluding  certain  franchising  and  marketing
expenses,  and employee taxes and benefits),  and normal and recurring  property
maintenance.

         (iv) The  Partnership  has the right to terminate  the lease on 30 days
notice  in the event  any  general  manager  or sales  director  of the Hotel is
transferred to another hotel or similar  property owned,  leased,  or managed by
Prime,  the  Prime  Lessee  or an  affiliate  in the  same  market  without  the
Partnership's  reasonable consent and such person is not transferred back to the
Hotel within 15 days notice from the Partnership.

The  Partnership's  sole  remedy in the event of any  failure  to meet the above
performance   standards  shall  be  the  termination  of  the  applicable  Prime
Percentage Lease.  Neither the failure to meet any performance  standard nor the
termination  of a lease by the  Partnership  solely  upon the  failure to meet a
performance  standard  shall cause a default or Event of Default under any other
lease. The Partnership shall not incur any termination  payment as a result of a
termination of the lease due to a breach of these performance standards.

Right of First Offer. If the Partnership desires to sell its interest in a Prime
Hotel,  the Partnership  shall first offer to the Prime Lessee by written notice
the  opportunity  to  acquire  the Hotel at the  price at which the  Partnership
intends to offer the Hotel (the "Offer  Price"),  and if the Prime Lessee elects
within 15 days after  receipt of such  notice to acquire  the Hotel at the Offer
Price,  the Partnership  will be obligated to sell the Hotel to the Prime Lessee
or its nominee at the Offer Price. On such sale, the applicable Percentage Lease
shall terminate.

Termination  of  Percentage   Leases  on  Disposition  of  the  Hotels.  If  the
Partnership  enters into an agreement to sell or otherwise  transfer a Hotel and
the Prime  Lessee  does not elect to acquire  the Hotel in  accordance  with the
right of first offer described above, the Partnership shall be permitted to sell
the Hotel to a third party at a price equal to or greater  than 95% of the offer
price. As compensation for the early termination of the Prime Lessee's leasehold
estate,  the Partnership  will have the right to terminate the Percentage  Lease
with  respect  to such Hotel  upon  either  (i) paying the Prime  Lessee the net
present value of the Prime Lessee's  leasehold interest in the remaining term of
the  Percentage  Lease to be terminated  as set forth in the lease  agreement or
(ii) offering to

                                       15

<PAGE>



lease to the Prime Lessee one or more substitute  hotels on leasehold terms with
a fair  market  value at  least  equal to the  fair  market  value of the  Prime
Lessee's remaining leasehold interest under the terminating Percentage Lease.

Termination of Percentage Leases on Company's Termination of REIT Status. In the
event that the Company  terminates  its REIT status or the Code  provisions  are
amended so that REITs are permitted to operate hotels, the Partnership may elect
to terminate the Percentage  Leases.  In such event,  the  Partnership  shall be
obligated  to pay to the Prime  Lessee and the TRS Lessees  certain  termination
payments  described in the  Percentage  Leases with the Prime Lessee and the TRS
Lessees.

ITEM 3.        LEGAL PROCEEDINGS

Neither the Company nor the  Partnership  currently  is involved in any material
litigation nor, to the Company's knowledge, is any material litigation currently
threatened against the Company or the Partnership.

ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were  submitted to a vote of the  Company's  shareholders  during the
fourth quarter of 2000, through the solicitation of proxies or otherwise.

ITEM 5.        MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
               STOCKHOLDER MATTERS

(a)      Market Information

The Company's common stock, $.01 par value (the "Common Stock") is traded on the
New York Stock Exchange (the "NYSE") under the symbol "ENN." The following table
sets forth for the  indicated  periods the high and low  closing  prices for the
Common  Stock  as  traded  through  the  facilities  of the  NYSE  and the  cash
distributions declared per share:

<TABLE>
<CAPTION>

                                           Price Range            Distributions
                                           -----------             Declared           Record
                                        High          Low          Per Share           Date
                                      -------       -------       -------------   ------------------
<S>                                   <C>           <C>           <C>             <C>

Year Ended December 31, 1999:
     First Quarter                    $10-1/8       $8-1/2            $0.31       March 31, 1999
     Second Quarter                   $10-1/8       $9-1/4            $0.31       June 30, 1999
     Third Quarter                    $9-5/16       $8-1/2            $0.31       September 30, 1999
     Fourth Quarter                   $8-9/16       $6-1/4            $0.31       December 31, 1999

Year Ended December 31, 2000:
     First Quarter                    $7-1/16       $6-5/16           $0.31       March 31, 2000
     Second Quarter                        $7       $6-1/8            $0.25       June 30, 2000
     Third Quarter                    $6-15/16      $6-1/8            $0.25       September 30, 2000
     Fourth Quarter                   $6-13/16      $5-1/2            $0.25       December 29, 2000

</TABLE>



                                       16

<PAGE>



(b)      Stockholder Information

On March 8, 2001, there were 1,007 record holders of the Company's Common Stock,
including  shares held in "street name" by nominees who are record holders,  and
approximately 23,500 beneficial owners.

(c)      Distributions

In order to qualify as a REIT for federal income tax purposes,  the Company must
distribute  to  shareholders  annually at least 90% of its taxable  income.  The
Company's  ability  to  make  distributions  is  dependent  on  the  receipt  of
distributions from the Partnership.  The Partnership's primary source of revenue
consists of rent  payments  from the Lessees under the  Percentage  Leases.  The
Company,  as general  partner of the Partnership  through the Trust,  intends to
cause the Partnership to distribute to its partners sufficient amounts to permit
the Company to make regular  quarterly  distributions  to its shareholders in an
annual amount necessary to maintain the Company's REIT status.

A portion of the  distribution to shareholders is expected to represent a return
of capital for federal income tax purposes  which  generally will not be subject
to federal  income tax under  current law. The Company's  distributions  made in
2000 and 1999 are considered to be approximately  54% and 33% return of capital,
respectively, for federal income tax purposes.

Future  distributions paid by the Company will be at the discretion of the Board
of  Directors  of the  Company  and will  depend on the actual  cash flow of the
Company, its financial condition, capital requirements,  the annual distribution
requirements under the REIT provisions of the Code and such other factors as the
directors of the Company deem relevant.

(d)      Recent Sales of Unregistered Securities

In the year ended December 31, 2000, the Company issued no securities which were
not registered pursuant to the Securities Act of 1933, as amended,  under either
a registration statement on Form S-3 or Form S-8.

ITEM 6.  SELECTED FINANCIAL DATA

The  following  table sets forth (i)  selected  historical  operating  and other
financial  information for the years ended December 31, 2000,  1999, 1998, 1997,
and 1996 and (ii)  selected  historical  balance  sheet data as of December  31,
2000, 1999, 1998, 1997, and 1996. The selected historical financial  information
has been derived from the historical financial statements of the Company audited
by PricewaterhouseCoopers LLP, independent accountants.

The following selected financial  information should be read in conjunction with
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  and all of the  financial  statements  and notes  thereto  included
elsewhere in this report.



                                       17

<PAGE>



                                EQUITY INNS, INC
                             SELECTED FINANCIAL DATA
                      (in thousands, except per share data)
<TABLE>
<CAPTION>

                                                                Year Ended December 31,
                                           2000          1999             1998          1997          1996
                                         --------      --------         --------       -------       -------
<S>                                      <C>           <C>              <C>            <C>           <C>

Operating Data:
     Revenue                             $116,810      $117,294         $107,436       $71,095       $38,430
     Net income                            16,340        29,316           31,595        23,543        14,473
     Preferred stock dividends              6,531         6,531            3,374
     Net income applicable to common
         shareholders                       9,809        22,785           28,221        23,543        14,473
     Income before extraordinary
         item per common share                .27           .61              .78           .88           .69

     Net income per common share,
         basic and diluted                    .27           .61              .78           .82           .69

     Distributions declared per
         common share and Unit               1.06          1.24             1.24          1.14          1.12

     Weighted average number of
         common shares and Units
         outstanding-diluted               37,960        38,570           38,001        29,963        21,681

Balance Sheet Data:

     Investments in hotel properties,
         net                             $772,411      $814,537         $790,132      $617,072      $309,202

     Total assets                         801,743       832,119          807,023       635,525       317,880

     Debt                                 383,403       381,175          331,394       233,206        77,399

     Minority interest in Partnership      10,370        12,008           19,070        19,035         7,728

     Shareholders' Equity                 383,786       412,252          431,264       360,172       222,951

Cash Flow Data:
     Cash flows from operating activities  58,010        71,515           69,386        50,402        26,200
     Cash used from investing activities   (2,201)      (61,899)        (193,539)     (314,089)     (101,175)
     Cash flows (used) from financing
         activities                       (55,377)       (9,655)         124,363       263,748        74,971

Other Data:

     Funds from operations (1)            $53,729       $61,180          $64,985       $45,748       $26,397
</TABLE>

(1)    Represents Funds from Operations ("FFO") of the Company on a consolidated
       basis.  Industry analysts generally consider FFO to be an appropriate
       measure of the performance of an equity REIT.  In accordance with the
       resolution adopted by the Board of Governors of the National Association
       of Real Estate Investment Trusts ("NAREIT"), FFO represents net income
       (loss) (computed in accordance with generally accepted accounting
       principles), excluding gains (or losses) from sales of property, plus
       depreciation, and after adjustment for unconsolidated partnerships and
       joint ventures.  For the periods presented, depreciation, minority
       interest, and the charge from write-off of deferred organizational costs
       were the Company's only adjustments to net income for the determination
       of FFO.  The Company's computation of FFO may not be comparable to FFO
       reported by other REITs that do not define the term in accordance with
       the current NAREIT definition or that interpret the current NAREIT
       definition differently than the Company.  FFO should not be considered an
       alternative to net income or other measurements under generally accepted
       accounting principles as an indicator of operating performance or to cash
       flows from operating, investing or financing activities as a measure of
       liquidity.  FFO does not reflect working capital changes, cash
       expenditures for capital improvements or principal payments with respect
       to indebtedness on the hotels.



                                       18

<PAGE>



ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

The Company

Equity Inns, Inc. (the "Company") is a self-advised hotel real estate investment
trust  ("REIT")  for  federal  income tax  purposes.  The  Company,  through its
wholly-owned  subsidiary,  Equity Inns Trust (the "Trust"),  is the sole general
partner of Equity Inns Partnership, L.P. (the "Partnership") and at December 31,
2000 owned an approximate 96.8% interest in the Partnership.

At  December  31,  2000,  the  Partnership  or its  affiliates  owned  96  hotel
properties,  with a total of 12,284  rooms in 34  states.  During the year ended
December 31, 2000, the  Partnership or its affiliates,  under  operating  leases
providing for the payment of percentage rent (the "Percentage  Leases"),  leased
75 of the  Company's  hotels to  affiliates  of  Interstate  Hotels  Corporation
("IHC"),   which  was  recently  divested  from  Wyndham   International,   Inc.
("Wyndham").  IHC is referred to herein as the "Interstate Lessee." All payments
due under these Percentage Leases were guaranteed by IHC and Interstate  Hotels,
L.L.C.,  a subsidiary of IHC (except for three hotels where Wyndham  rather than
IHC was the  guarantor).  Also,  during the year ended  December 31,  2000,  the
Partnership  leased 19 hotels to wholly-owned  subsidiaries of Prime Hospitality
Corporation  (collectively,  the "Prime  Lessee").  All payments due under these
Percentage  Leases  were  guaranteed  by  Prime  Hospitality  Corporation.   The
remaining two hotels were  operated in 2000  pursuant to management  agreements,
one of which was operated by a  subsidiary  of IHC and one of which was operated
by a wholly-owned subsidiary of MeriStar Hotels & Resorts, Inc.

In December  1999, the REIT  Modernization  Act (the "RMA") was signed into law,
allowing the Company to own all of the stock in taxable REIT  subsidiaries  (the
"TRS").  As a result  of the  opportunities  offered  by the RMA,  effective  on
January 1, 2001,  the Company  terminated  or  assigned  the  Percentage  Leases
between the Company and the Interstate  Lessee and terminated the guarantee with
Interstate  Hotels,  L.L.C.  and Wyndham and entered into new Percentage  Leases
with the taxable REIT  subsidiaries  of the Company (the "TRS  Lessees") for the
lease of 77 of the Company's hotels. The terms of the Percentage Leases with the
TRS Lessees are  substantially  identical to the  Percentage  Leases  terminated
between the Company and the Interstate  Lessee.  The  Interstate  Lessee and the
Prime  Lessee  are  referred  to  herein  collectively  as  the  "Lessees",  and
individually  as a "Lessee."  The Lessees  operate and lease hotels owned by the
Partnership and its affiliates pursuant to the Percentage Leases,  which provide
for rent  payments to the  Partnership  equal to the greater of (i) a fixed base
rent ("Base Rent") or (ii)  percentage  rent based on the revenues of the hotels
("Percentage  Rent").  In future reporting  periods,  the rents generated by the
Percentage  Leases with the TRS Lessees  will be  eliminated  in  consolidation,
while the actual operating results of all the Company's hotels leased by the TRS
Lessees will be included in the Company's financial statements.


Recent Highlights

Since its inception,  the Company has taken steps to position  itself for growth
and stability.  Several  changes have occurred since December 31, 1999 which add
significantly to these efforts. These events are as follows:



                                       19

<PAGE>



Acquisitions and Disposition of Hotels

Since  the IPO,  the  Company  has  actively  implemented  its  acquisition  and
disposition  strategy.  During 2000,  1999, and 1998,  the Company  acquired and
disposed of the following types of hotels:

<TABLE>
<CAPTION>

                                December 31, 2000                December 31, 1999                December 31, 1998
                         -------------------------------  -------------------------------  ---------------------------------------

                                              Properties                       Properties                       Properties
                                               Owned at                         Owned at                         Owned at
                                                End of                           End of                           End of
                         Acquisitions  Sales     Year     Acquisitions  Sales     Year     Acquisitions  Sales     Year
                         ------------  -----  ----------  ------------  -----  ----------  ------------- -----  ----------
<S>                      <C>           <C>    <C>         <C>           <C>    <C>         <C>           <C>    <C>

Premium Limited Service                  2       52                       5       54            2          3       58
Premium Extended Stay                    1       20            2                  21            5                  19
All Suite                                        19                               19            9                  19
Full Service                                      5                                5                                4
Independent                                                                                                         2
                              -          -       --            -          -       --           --          -      ---

                              0          3       96            2          5       99           16          3      102
                              =          =       ==            =          =       ==           ==          =      ===
</TABLE>


With the  above-mentioned  acquisitions  and sales,  the Company has reduced its
exposure  in the premium  limited  service  segment  from  approximately  61% of
revenues in 1997 to approximately  44% of revenues in 2000. The premium extended
stay and  all-suite  segments now represent  approximately  52% of the Company's
revenues.

Debt Refinancing

During the fourth  quarter of 2000,  the Company  financed  $108.8  million with
several financial  institutions,  at fixed rates ranging from 8.25% - 8.50%. The
principal  amounts of the various loans are amortized over periods  ranging from
20 - 25 years,  with the unpaid  balances  payable from November 2005 - November
2010.  Proceeds from the  completion of these loans were used to repay  existing
debt under its prior  unsecured  line of credit with Bank One, NA. In connection
with these  transactions,  twenty-five of the Company's hotel  properties with a
carrying value of approximately $181.3 million collateralize the loans.

On November 9, 2000, the Company repaid the then  outstanding  balance under its
prior  unsecured  line of credit with Bank One, NA with  borrowings  under a new
$125  million  secured  line of credit with Bank One, NA (the "Line of Credit").
The Line of Credit bears interest at a variable rate of LIBOR plus 1.5%,  1.75%,
2.0%,  2.25%,  2.5% or 2.75% as determined by the Company's  percentage of total
debt  to  earnings  before  interest,   taxes,   depreciation  and  amortization
("EBITDA"), as defined in the loan agreement (the "Percentage").  The Percentage
is reviewed quarterly and the interest rate is adjusted as necessary. Currently,
the  interest  rate on the Line of Credit is LIBOR  (6.65% at December 31, 2000)
plus 2.50%. In connection with these transactions, twenty-eight of the Company's
hotel  properties  with  a  carrying  value  of  approximately   $267.3  million
collateralize  the loans. The Line of Credit has a three-year term,  expiring on
November 9, 2003.

On January 16, 2001,  the Company  entered into an interest rate swap  agreement
with a financial  institution on a notional principal amount of $50 million. The
agreement effectively fixes the interest rate on floating rate debt at a rate of
6.4275%, plus the Percentage. The swap agreement will expire in November 2003.



                                       20

<PAGE>



Action Taken as a Result of Recent Legislation

The Company  terminated  all 75 of its  Percentage  Leases  with the  Interstate
Lessee  effective  January  1,  2001.  No  remuneration  was  exchanged  for the
termination of the leases.  This action was precipitated by the recent enactment
of the RMA,  which enables REITs such as the Company to gain greater  control of
their  properties by establishing  taxable  subsidiaries to function as lessees,
with hotel management provided by independent companies.  On January 1, 2001, 55
of the leases  acquired from the Interstate  Lessee were  terminated and the TRS
Lessees entered into management  contracts with an affiliate of IHC, which later
will expire on a staggered basis, beginning January 1, 2002 through 2005. Twenty
of the leases were converted to management contracts with Promus Hotels, Inc., a
subsidiary  of Hilton  Hotels  Corporation,  and two leases  were  converted  to
management contracts with Crestline Hotels and Resorts, Inc.

Results of Operations

Comparison of the Company's  operating  results for the year ended  December 31,
2000 with the year ended December 31, 1999

For the year ended  December 31, 2000,  the Company had total  revenue of $116.8
million,  consisting  substantially of Percentage  Lease revenue.  This compares
with total revenue of $117.3 million for the year ended December 31, 1999.

Decreases in revenue from hotel  operations for the year ended December 31, 2000
as  compared  to 1999  are due to the  recognition  in  1999  of $2  million  in
percentage  revenue applicable to the amendment of the Company's leases with the
Interstate  Lessee,  partially  offset  by (i) a .9%  increase  in  revenue  per
available  room  ("REVPAR")  for  comparable  hotels  and  (ii) a full  year  of
operations in 2000 of two hotels acquired in 1999.

Real estate and personal  property taxes increased over the comparable period in
1999 due primarily to taxes on two large  extended stay hotels  purchased in mid
1999 that were not assessed at full value until 2000.

Depreciation and amortization  increased over the comparable  period in 1999 due
primarily to capitalized renovation costs at certain hotels.

Interest  expense  increased to $32.3  million from $27.9 million in 1999 due to
(i) an increase in the Company's  weighted  average  outstanding  debt to $379.9
million  from $362.4  million in 1999 and (ii) an  increase in weighted  average
interest  rates to 8.44% from 7.74% in 1999.  The increase in  borrowings is due
primarily to costs  incurred as a result of  refinancing  a major portion of the
Company's debt during the year.

Amortization  of loan costs  increased to $1.7 million from $1.2 million in 1999
as a result of refinancing a significant  amount of the Company's  variable rate
debt with fixed rate debt.

General and administration  expenses  increased to $5.7 million,  an increase of
$571,000  over  1999.  This  increase  is  primarily  attributable  to legal and
professional  fees  incurred  in the  conversion  of  the  Company's  leases  to
management  contracts and to the  establishment  of a taxable REIT subsidiary to
serve as a lessee.

Net income applicable to common  shareholders for 2000 was $9.8 million or $0.27
per share, compared to $22.8 million or $0.61 per share for 1999.

                                       21

<PAGE>



Comparison of the Company's  operating  results for the year ended  December 31,
1999 with the year ended December 31, 1998

For the year ended  December 31, 1999,  the Company had total revenues of $117.3
million,  consisting  substantially of Percentage  Lease revenue.  This compares
with total revenue of $107.4 million for the year ended December 31, 1998.

Increases in revenue from hotel  operations for the year ended December 31, 1999
as compared to 1998 are due to (i) an increased number of hotels being owned and
leased by the Partnership throughout 1999, (ii) a full year of operation in 1999
of hotels  acquired  in 1998 and  (iii) the  recognition  of the $2  million  in
percentage  lease revenue  applicable  to the amendment of the Company's  leases
with the Interstate  Lessee.  Assuming all hotels which were in operation a full
year in both 1999 and 1998 had been  owned and  leased as of  January  1,  1998,
REVPAR on a pro forma basis would have decreased 2.0% compared to 1998.

Real estate and personal property taxes and general and administration  expenses
in the  aggregate  remained  fairly  constant  in 1999 as  compared to 1998 as a
percentage of total revenue.  Interest  expense  increased to $27.9 million from
$21.6  million in 1998 due  primarily  to  borrowings  incurred  to finance  the
Company's  acquisitions  and slightly  higher  interest  rates on the  Company's
variable rate  borrowings.  The Company's  weighted  average  interest  rates on
outstanding  borrowings  during the years ended  December 31, 1999 and 1998 were
7.74% and 7.46%, respectively.  Net income applicable to common shareholders for
1999 was $22.8 million, or $0.61 per share,  compared to $28.2 million, or $0.78
per share for 1998.

Liquidity and Capital Resources

The Company's principal source of cash to meet its cash requirements,  including
distributions  to  its  shareholders,   is  its  cash   distributions  from  the
Partnership. The Partnership receives cash payments from the Lessees pursuant to
the Percentage  Leases. The Company's  liquidity,  including its ability to make
distributions  to  shareholders,  is dependent upon the Lessees' ability to make
payments under the Percentage Leases.

Cash and cash  equivalents  were  $793,000 at  December  31,  2000,  compared to
$361,000 at December  31,  1999.  Excess  cash  balances  are used to reduce the
Company's  outstanding  debt.  For the year ended  December 31, 2000,  cash flow
provided by  operating  activities,  consisting  primarily of  Percentage  Lease
revenue, was $58 million.

The Company intends to make additional  investments in hotel  properties and may
incur, or cause the Partnership to incur,  indebtedness to make such investments
or to meet  distribution  requirements  imposed  on a REIT under the Code to the
extent that working  capital and cash flow from the  Company's  investments  are
insufficient  to make such  distributions.  The Company's Board of Directors has
adopted  a  policy  limiting  aggregate  indebtedness  to 45%  of the  Company's
investment in hotel  properties,  at cost,  after giving effect to the Company's
use of proceeds from any indebtedness. This policy may be amended at any time by
the Board of Directors  without  shareholder  vote.  The Company's  consolidated
indebtedness  was 42.3% of its  investments in hotels,  at cost, at December 31,
2000.

On January 16, 2001,  the Company  entered into an interest rate swap  agreement
with a financial  institution on a notional principal amount of $50 million. The
agreement effectively fixes the interest rate on floating rate debt at a rate of
6.4275% plus 1.50%,  1.75%,  2.00%,  2.25%,  2.50% or 2.75% as determined by the
Percentage. The swap agreement will expire in November 2003.

During 2000,  the Company  invested  $13.6  million,  including $1.3 million for
renovations required by franchisors, to fund capital improvements to its hotels,
including  replacement  of  carpets,  drapes,  renovation  of  common  areas and
improvements  of hotel  exteriors.  In  addition,  the  Company  expects to fund
approximately $17 million in 2001 for capital improvements.

                                       22

<PAGE>




The  Company  intends  to  fund  such  improvements  out  of  future  cash  from
operations, present cash balances and borrowings under its Line of Credit. Under
certain of its loan  covenants,  the Partnership is obligated to fund 4% of room
revenues  per  quarter on a  cumulative  basis,  to a separate  room  renovation
account for the ongoing replacement or refurbishment of furniture,  fixtures and
equipment at the Hotels.  For the years ended  December  31, 2000 and 1999,  the
amounts expended exceeded the amounts required under the loan covenants.

The Company elected to be taxed as a REIT commencing with its taxable year ended
December 31, 1994,  and expects to continue to be taxed as a REIT under Sections
856 through 860 of the Internal Revenue Code of 1986. Accordingly,  no provision
for federal income taxes has been reflected in the financial statements.

REITs are subject to a number of  organizational  and operational  requirements.
For example, for federal income tax purposes, a REIT, and therefore the Company,
is required to pay  distributions  of at least 90% of its taxable  income to its
shareholders. The Company intends to pay these distributions from operating cash
flows. During 2000, the Partnership distributed an aggregate of $40.2 million to
its partners, or $1.06 per Unit (including $38.9 million of distributions to the
Company  to fund  distributions  to  shareholders  of $1.06  per share in 2000).
During 1999,  the  Partnership  distributed an aggregate of $47.7 million to its
partners,  or $1.24 per Unit (including  $46.1 million of  distributions  to the
Company to fund  distributions  to shareholders of $1.24 per share in 1999). For
federal income tax purposes, approximately 54% of 2000 distributions represented
a return of capital, compared with approximately 33% for 1999.

The Company  expects to meet its  short-term  liquidity  requirements  generally
through  net cash  provided  by  operations,  existing  cash  balances  and,  if
necessary,  short-term borrowings under the Line of Credit. The Company believes
that its net cash provided by operations will be adequate to fund both operating
requirements and payment of distributions by the Company in accordance with REIT
requirements.

The  Company  expects  to meet its  long-term  liquidity  requirements,  such as
scheduled debt maturities and property  acquisitions,  through long-term secured
and unsecured  borrowings,  the issuance of additional  equity securities of the
Company or, in connection with acquisitions of hotel properties, the issuance of
Partnership Units.  Pursuant to the Partnership's  limited partnership agreement
(the "Partnership  Agreement"),  subject to certain holding period requirements,
holders of Units in the Partnership have the right to require the Partnership to
redeem their Units.  During the year ended December 31, 2000,  74,703 Units were
tendered for redemption.  Pursuant to the Partnership Agreement, the Company has
the option to redeem Units  tendered for  redemption on a one-for-one  basis for
shares  of  Common  Stock  or for an  equivalent  amount  of cash.  The  Company
anticipates  that it will  acquire  any Units  tendered  for  redemption  in the
foreseeable  future in  exchange  for  shares of Common  Stock and has agreed to
register such shares so as to be freely tradeable by the recipient.

Funds from Operations

Industry  analysts  generally  consider Funds from  Operations  ("FFO") to be an
appropriate measure of the performance of an equity REIT. In accordance with the
resolution adopted by the Board of Governors of the National Association of Real
Estate Investment Trusts ("NAREIT"),  FFO represents net income (loss) (computed
in accordance with generally accepted  accounting  principles),  excluding gains
(or losses) from sales of property, plus depreciation, and after adjustments for
unconsolidated  partnerships  and joint  ventures.  For the  periods  presented,
depreciation, minority interest, the write- off of non-recurring merger expenses
and the charge from write-off of deferred  organization costs were the Company's
only  adjustments  to net  income  for  the  definition  of FFO.  The  Company's
computation  of FFO may not be comparable to FFO reported by other REITs that do
not define the term in  accordance  with the current  NAREIT  definition or that
interpret the current NAREIT definition

                                       23

<PAGE>



differently than the Company. FFO should not be considered an alternative to net
income or other measurements under generally accepted  accounting  principles as
an indicator of operating performance or to cash flows from operating, investing
or financing activities as a measure of liquidity.  FFO does not reflect working
capital  changes,  cash  expenditures  for  capital  improvements  or  principal
payments with respect to indebtedness on the hotels.

The following  reconciliation of net income to FFO illustrates the difference in
the two measures of operating performance:

                                        For the Years Ended December 31,
                                              2000          1999
                                             -------       -------
                                  (in thousands, except per share and Unit data)

Net income                                   $16,340       $29,316

Less:
    Gain on sale of hotel properties                        (1,130)
    Preferred stock dividends                 (6,531)       (6,531)

Add:
    Minority interest                            337           819
    Depreciation of buildings,
        furniture and fixtures                40,267        38,573
    Loss on sale of hotel properties           3,316
    Change in accounting for corporate
        organization costs                                     133
                                             -------       -------

Funds from Operations                        $53,729       $61,180
                                             =======       =======

Weighted average number of
    common shares and Units
    outstanding                               37,960        38,570
                                              ======        ======

Inflation

Operators  of hotels in general  have the ability to adjust room rates  quickly.
However,  competitive  pressures  may limit the  Lessees'  ability to raise room
rates in the face of inflation.

Seasonality

Hotel  operations  historically  are  seasonal in nature,  generally  reflecting
higher  occupancy rates during the second and third quarters.  This  seasonality
can be expected to cause fluctuations in the Company's  quarterly lease revenues
to the extent that it receives Percentage Rent.

Impact of Recently Issued Accounting Standards to be Adopted in 2001

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101") which provides guidance on revenue recognition. SAB
101 requires that a lessor not recognize  contingent  rental income until annual
specified  revenue  levels have been  achieved by the  Lessees.  During 1999 and
prior years, the Company has recognized  contingent  rentals throughout the year
since it was  considered  probable  that the  Lessees  would  exceed  the annual
specified  hurdles.  The Company has reviewed the terms of its Percentage Leases
and has  determined  that  the  provisions  of SAB  101  materially  impact  the
Company's  revenue  recognition on an interim basis,  effectively  deferring the
recognition of revenue from its Percentage Leases from

                                       24

<PAGE>



the first and  second  quarters  of the  calendar  year to the third and  fourth
quarters. SAB 101 will not impact the Company's revenue recognition on an annual
basis nor will it impact the  Company's  interim or annual  cash flow or its FFO
from its Lessees,  and therefore  will not effect its ability to pay  dividends.
The  Company  adopted  SAB 101 as a change  in  accounting  principle  effective
January 1, 2000.

In June  1998,  the FASB  issued  SFAS No.  133 ("SFAS  133"),  "Accounting  for
Derivative Instruments and Hedging Activities", as amended, which is required to
be adopted in years beginning after June 15, 2000. SFAS 133 requires the Company
to  recognize  all  derivatives  on the  balance  sheet  at fair  value.  If the
derivative is a hedge, depending on the nature of the hedge, changes in the fair
value of the  derivative  will either be offset against the change in fair value
of the hedged assets,  liabilities,  or firm commitments  through  earnings,  or
recognized in other comprehensive income, until the hedged item is recognized in
earnings.  Any ineffective portion of a derivatives's  change in fair value will
be immediately  recognized in earnings,  and any derivatives that are not hedges
must be adjusted to fair value through  income.  The Company adopted SFAS 133 in
January 2001. The impact of adoption was immaterial and the Company  expects the
impact to continue to be immaterial in future periods.

Forward-Looking Statements

This Management's  Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Act
of 1934, as amended,  including,  without limitation,  statements containing the
words "believes," "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 achievement expressed or implied by such forward-looking statements.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The Company is exposed to certain  financial  market risks, the most predominant
of which is the  fluctuation  in interest  rates.  At  December  31,  2000,  the
Company's  exposure  to market  risk for a change in  interest  rates is related
solely to its debt outstanding under its $125 million Line of Credit. Total debt
outstanding  under the Line of Credit totaled $96.5 million at December 31, 2000
for  which the  Company  was  exposed  to  fluctuations  in the  market  rate of
interest.

The  Company's  operating  results are  affected  by changes in interest  rates,
primarily as a result of borrowing  under the Line of Credit.  If interest rates
increased by 25 basis points,  the Company's  annual interest expense would have
increased by approximately  $241,250,  based on balances  outstanding during the
year ended December 31, 2000.




                                       25

<PAGE>



ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

(a)    Financial Statements:

The  following  financial  statements  are  located in this  report on the pages
indicated.

Equity Inns, Inc.                                                           Page

  Report of Independent Accountants                                          28
  Consolidated Balance Sheets as of December 31, 2000 and
      1999                                                                   29
  Consolidated Statements of Operations for the years ended
      December 31, 2000, 1999 and 1998                                       30
  Consolidated Statements of Shareholders' Equity for the
      years ended December 31, 2000, 1999 and 1998                           31
  Consolidated Statements of Cash Flows for the years ended
      December 31, 2000, 1999 and 1998                                       34
  Notes to Consolidated Financial Statements                                 35
  Schedule III -- Real Estate and Accumulated Depreciation
      as of December 31, 2000                                                47



                                       26

<PAGE>



(b)     Supplementary Data:

Quarterly Financial Information

        Unaudited quarterly results for 2000 and 1999 are summarized as follows:

<TABLE>
<CAPTION>

                                                      First          Second              Third           Fourth
                                                   Quarter (1)     Quarter (1)        Quarter  (1)     Quarter (1)
                                                   -----------     -----------       -------------     -----------
         <S>                                       <C>             <C>               <C>               <C>
                    2000                                         (in thousands, except per share data)
                    ----
         Revenue                                    $20,332           $20,759             $29,430        $46,289
         Net income applicable to
             common shareholders                     (6,180)           (6,499)              3,520         18,968
         Net income per common
             share, basic and diluted                  (.17)             (.18)                .10            .52

                    1999 Pro Forma (2)
                    --------------
         Revenue                                    $18,723           $20,096             $30,458        $48,017
         Net income applicable to
             common shareholders                     (3,831)           (2,197)              6,187         22,624

         Net income per common share,
             basic and diluted                         (.10)             (.06)                .17            .61


                    1999
                    ----
         Revenue                                     $26,076          $31,675             $34,185        $25,358
         Net income applicable to
             common shareholders                       3,259            8,976               9,788            762

         Net income per common share,
             basic and diluted                           .09              .24                 .26            .02
</TABLE>

------------------------

(1)  Acquisitions of hotel  properties  throughout both years,  coupled with the
seasonality of the hotels,  have impacted the trend of quarterly results for the
periods shown.

(2) For comparative  purposes,  pro forma information is presented to illustrate
1999 quarterly earnings in accordance with SAB 101, which was adopted January 1,
2000.  SAB 101 provides  that a lessor  shall defer  recognition  of  contingent
rental  income in interim  periods  until  specified  targets  that  trigger the
contingent  income are met. SAB 101 has  significantly  impacted  the  Company's
current  revenue  recognition  on a  quarterly  basis,  but has no impact on the
Company's annual  Percentage Lease revenue,  FFO or quarterly cash flow from its
Lessees.





                                       27

<PAGE>



Report of Independent Accountants



To the Board of Directors and
Shareholders of Equity Inns, Inc.


In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects, the financial position of Equity
Inns,  Inc. at December 31, 2000 and 1999, and the results of its operations and
its cash flows for each of the three  years in the  period  ended  December  31,
2000, in conformity with accounting  principles generally accepted in the United
States  of  America.  In  addition,  in our  opinion,  the  financial  statement
schedules  listed in the  accompanying  index  present  fairly,  in all material
respects,  the information  set forth therein when read in conjunction  with the
related  consolidated  financial  statements.  These  financial  statements  and
financial   statement   schedules  are  the   responsibility  of  the  Company's
management;  our  responsibility  is to express  an  opinion on these  financial
statements and financial  statement  schedules based on our audits. We conducted
our audits of these statements in accordance with auditing  standards  generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe that our audits provide a reasonable basis for our opinion.





Memphis, Tennessee
January 22, 2001, except as to Note 11, for which
the date is January 25, 2001

                                       28

<PAGE>



                                EQUITY INNS, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)



                                                December 31,   December 31,
                                                   2000            1999
                                                ------------   ------------

Assets:
    Investment in hotel properties, net           $772,411       $814,537
    Cash and cash equivalents                          793            361
    Due from Lessees                                 5,595          5,124
    Notes receivable                                 3,408          3,314
    Deferred expenses, net                          12,843          7,019
    Deposits and other assets                        6,693          1,764
                                                  --------       --------

      Total Assets                                $801,743       $832,119
                                                  ========       ========

Liabilities and Shareholders' Equity:
    Debt                                          $383,403       $381,175
    Accounts payable and accrued expenses           13,605         13,755
    Distributions payable                           10,579         12,929
    Minority interest in Partnership                10,370         12,008
                                                  --------       --------

      Total Liabilities                            417,957        419,867
                                                  --------       --------

Commitments and contingencies (Note 6)

Shareholders' Equity:
    Preferred stock, $.01 par value,
      10,000,000 shares authorized,
      2,750,000 issued and outstanding
      at December 31, 2000 and 1999                 68,750         68,750
    Common stock, $.01 par value,
      50,000,000 shares authorized,
      37,498,659 and 37,308,523 shares
      issued and outstanding at December 31,
      2000 and 1999, respectively                      375            373
    Additional paid-in capital                     417,755        416,354
    Treasury stock, at cost, 747,600 shares
      and 557,300 shares issued and
      outstanding at December 31, 2000 and
      1999, respectively                            (5,173)        (3,883)
    Unearned directors' and officers'
      compensation                                  (1,854)        (2,375)
    Predecessor basis assumed                       (1,264)        (1,264)
    Distributions in excess of net earnings        (94,803)       (65,703)
                                                  --------       --------
      Total Shareholders' Equity                   383,786        412,252
                                                  --------       --------

    Total Liabilities and Shareholders' Equity    $801,743       $832,119
                                                  ========       ========



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


                                       29

<PAGE>



                                EQUITY INNS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)


                                               For the Years Ended December 31,
                                                2000         1999         1998
                                              --------     --------    ---------

Revenue:
Percentage lease revenues                     $115,875     $116,459    $106,661
Other income                                       935          835         775
                                              --------     --------    --------
    Total Revenue                              116,810      117,294     107,436
                                              --------     --------    --------

Expenses:
Real estate and personal property taxes         14,085       12,756      10,411
Depreciation and amortization                   40,494       38,856      32,665
Interest                                        32,323       27,947      21,587
Amortization of loan costs                       1,749        1,210         834
General and administrative                       5,721        5,150       4,650
Amortization of unearned directors' and
    officers' compensation                         927          891         331
Rental expense                                   1,518        1,346         969
Merger expense                                                            2,197
                                              --------     --------     -------
    Total Expenses                              96,817       88,156      73,644
                                              --------     --------    --------

Income before minority interest
  and other items                               19,993       29,138      33,792

Minority interest                                 (337)        (819)     (1,492)
Gain (loss) on sale of hotel properties         (3,316)       1,130        (705)
Change in accounting for corporate
  organizational costs                                         (133)
                                              --------     --------    --------
Net income                                      16,340       29,316      31,595

Preferred stock dividends                        6,531        6,531       3,374
                                              --------     --------    --------

Net income applicable to common
    shareholders                              $  9,809     $ 22,785    $ 28,221
                                              ========     ========    ========

Net income per common share, basic
    and diluted                               $    .27     $    .61    $    .78
                                              ========     ========    ========

Weighted average number of common
    shares and units outstanding - diluted      37,960       38,570      38,001
                                              ========     ========    ========




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

                                       30

<PAGE>



                                EQUITY INNS, INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 (in thousands, except share and per share data)


<TABLE>
<CAPTION>

                                            Preferred Stock         Common Stock       Additional      Treasury Stock
                                          -------------------    ------------------     Paid-In       -----------------
                                           Shares     Dollars      Shares    Dollars    Capital       Shares    Dollars
                                          ---------   -------    ----------  -------   ----------     ------    -------
<S>                                        <C>        <C>        <C>         <C>       <C>            <C>        <C>
Balance at December 31, 1997                                     34,865,578  $349      $387,134

Issuance of common shares, net of
    offering expenses                                             1,286,718    13        18,795

Issuance of preferred shares, net of
    offering expenses                     2,750,000   $68,750                            (2,408)

Issuance of common shares to officers
    in lieu of cash bonus                                            69,123     1         1,062

Issuance of common shares to
    directors in lieu of cash
    compensation                                                      4,042                  55

Issuance of restricted common
    shares to officers and directors                                161,000     1         2,135

Issuance of common shares to
    officers through exercise of stock
    options                                                           9,000                 112

Forfeitures of unvested shares by an
    officer, upon resignation                                        (6,000)                (73)

Amortization of unearned officers' and
    directors' compensation

Issuance of common shares upon
    redemption of Units                                              49,074                 525

Net income applicable to common
    shareholders

Distributions ($1.24 per share)

Adjustments to minority interest from
    issuance of common shares and
    partnership units                                                                       496
                                          ---------   -------    ----------  ----     ---------       ------   --------

Balance at December 31, 1998              2,750,000    68,750    36,438,535   364       407,833

Issuance of common shares to
    officers in lieu of cash bonus                                   98,824     1           987

Issuance of common shares to
    directors in lieu of cash
    compensation                                                      9,235                  80

<CAPTION>

                                          Unearned
                                          Directors'      Predecessor   Distributions
                                         and Officers'       Basis      In Excess of
                                         Compensation       Assumed     Net Earnings       Total
                                         -------------    -----------   -------------     --------
<S>                                      <C>              <C>             <C>            <C>
Balance at December 31, 1997             $  (274)          $(1,264)       $(25,773)       $360,172

Issuance of common shares, net of
    offering expenses                                                                       18,808

Issuance of preferred shares, net of
    offering expenses                                                                       66,342

Issuance of common shares to officers
    in lieu of cash bonus                                                                    1,063

Issuance of common shares to
    directors in lieu of cash
    compensation                                                                                55

Issuance of restricted common
    shares to officers and directors      (2,136)                                                0

Issuance of common shares to
    officers through exercise of stock
    options                                                                                    112

Forfeitures of unvested shares by an
    officer, upon resignation                 73                                                 0

Amortization of unearned officers' and
    directors' compensation                  331                                               331

Issuance of common shares upon
    redemption of Units                                                                        525

Net income applicable to common
    shareholders                                                            28,221          28,221

Distributions ($1.24 per share)                                            (44,861)        (44,861)

Adjustments to minority interest from
    issuance of common shares and
    partnership units                                                                          496
                                         -------           -------        --------        --------

Balance at December 31, 1998              (2,006)           (1,264)        (42,413)        431,264

Issuance of common shares to
    officers in lieu of cash bonus                                                             988

Issuance of common shares to
    directors in lieu of cash
    compensation                                                                                80

</TABLE>



                                       31

<PAGE>


                                EQUITY INNS, INC.
           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (CONTINUED)
                 (in thousands, except share and per share data)
<TABLE>
<CAPTION>


                                            Preferred Stock         Common Stock       Additional      Treasury Stock
                                          -------------------    ------------------     Paid-In       -----------------
                                           Shares     Dollars      Shares    Dollars    Capital       Shares    Dollars
                                          ---------   -------    ----------  -------   ----------     ------    -------
<S>                                        <C>        <C>         <C>        <C>        <C>           <C>       <C>
Issuance of restricted common
    stock to officers and directors                                 129,800     1         1,259

Repurchase of Treasury Stock                                                                          557,300   $(3,883)

Offering expenses                                                                           (30)

Amortization of unearned officers'
    and directors' compensation

Issuance of common shares upon
    redemption of Units                                             632,129     7         6,266

Net income applicable to common
    shareholders

Distributions ($1.24 per share)

Adjustments to minority interest from
    purchase of treasury stock,
    issuance of common shares and
    partnership units                                                                       (41)
                                          ---------   -------    ----------  ----     ---------       -------  --------

Balance at December 31, 1999              2,750,000    68,750    37,308,523   373       416,354       557,300   (3,883)

Issuance of common shares to
    officers in lieu of cash bonus                                   38,669                 265

Issuance of common shares to
    directors in lieu of cash
    compensation                                                     12,324                  80

Issuance of restricted common
    stock to officers and directors                                  71,450     1           481

Forfeiting of unvested shares by
   an officer, upon resignation                                      (7,010)                (76)

Repurchase of Treasury Stock                                                                          190,300   (1,290)

Amortization of unearned officers'
    and directors' compensation

Issuance of common shares upon
    redemption of Units                                              74,703     1           675

Net income applicable to common
    shareholders

Distributions ($1.06 per share)

<CAPTION>


                                          Unearned
                                          Directors'      Predecessor   Distributions
                                         and Officers'       Basis      In Excess of
                                         Compensation       Assumed     Net Earnings       Total
                                         -------------    -----------   -------------     --------
<S>                                      <C>              <C>           <C>               <C>
Issuance of restricted common
    stock to officers and directors       (1,260)                                                0

Repurchase of Treasury Stock                                                                (3,883)

Offering expenses                                                                              (30)

Amortization of unearned officers'
    and directors' compensation              891                                               891

Issuance of common shares upon
    redemption of Units                                                                      6,273

Net income applicable to common
    shareholders                                                            22,785          22,785

Distributions ($1.24 per share)                                            (46,075)        (46,075)

Adjustments to minority interest from
    purchase of treasury stock,
    issuance of common shares and
    partnership units                                                                          (41)
                                         -------           -------        --------        --------


Balance at December 31, 1999              (2,375)           (1,264)        (65,703)        412,252

Issuance of common shares to
    officers in lieu of cash bonus                                                             265

Issuance of common shares to
    directors in lieu of cash
    compensation                                                                                80

Issuance of restricted common
    stock to officers and directors         (482)                                                0

Forfeiting of unvested shares by
   an officer, upon resignation               76                                                 0

Repurchase of Treasury Stock                                                                (1,290)

Amortization of unearned officers'
    and directors' compensation              927                                               927

Issuance of common shares upon
    redemption of Units                                                                        676

Net income applicable to common
    shareholders                                                             9,809           9,809

Distributions ($1.06 per share)                                            (38,909)        (38,909)
</TABLE>


                                       32

<PAGE>




                                EQUITY INNS, INC.
           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (CONTINUED)
                 (in thousands, except share and per share data)


<TABLE>
<CAPTION>


                                            Preferred Stock         Common Stock       Additional      Treasury Stock
                                          -------------------    ------------------     Paid-In       -----------------
                                           Shares     Dollars      Shares    Dollars    Capital       Shares    Dollars
                                          ---------   -------    ----------  -------   ----------     ------    -------
<S>                                       <C>         <C>        <C>         <C>       <C>            <C>       <C>
Adjustments to minority interest from
   purchase of treasury stock,
    issuance of common shares and
    partnership units                                                                       (24)
                                          ---------   -------    ----------  ----      --------       -------   -------

Balance at December 31, 2000              2,750,000   $68,750    37,498,659  $375      $417,755       747,600   $(5,173)
                                          =========   =======    ==========  ====      ========       =======   =======

<CAPTION>

                                          Unearned
                                          Directors'      Predecessor   Distributions
                                         and Officers'       Basis      In Excess of
                                         Compensation       Assumed     Net Earnings       Total
                                         -------------    -----------   -------------     --------
<S>                                      <C>              <C>           <C>               <C>
Adjustments to minority interest from
   purchase of treasury stock,
    issuance of common shares and
    partnership units                                                                           (24)
                                         -------           -------        --------         --------

Balance at December 31, 2000             $(1,854)          $(1,264)       $(94,803)        $383,786
                                         =======           =======        ========         ========
</TABLE>










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

                                       33

<PAGE>



                                EQUITY INNS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)


<TABLE>
<CAPTION>

                                                             For the Years Ended December 31,
                                                              2000         1999        1998
                                                            -------      -------      -------
<S>                                                         <C>          <C>          <C>
Cash flows from operating activities:
Net income                                                  $16,340      $29,316      $31,595
Adjustment to reconcile net income to net cash
   provided by operating activities:
      (Gain) loss on sale of hotel properties                 3,316       (1,130)         705
      Depreciation and amortization                          40,494       38,856       32,665
      Amortization of loan costs                              1,749        1,210          834
      Change in accounting for corporate
         organizational costs                                                133
      Amortization of unearned directors' and
         officers' compensation                                 927          891          331
      Directors' compensation                                    80           80           55
      Minority interest                                         337          819        1,492
      Changes in assets and liabilities:
         Due from Lessees                                      (471)       1,164         (363)
         Note receivable                                        (94)         (99)         669
         Deferred expenses                                                     5          (11)
         Deposits and other assets                           (4,929)      (1,089)         503
         Accounts payable and accrued expenses                  261        1,359          911
                                                            -------      -------      -------
             Net cash flow provided by operating
                activities                                   58,010       71,515       69,386
                                                            -------      -------      -------

Cash flows from investing activities:
Acquisitions of hotel properties                                         (57,188)    (175,576)
Improvements and additions to hotel properties              (13,602)     (32,800)     (25,998)
Cash paid for franchise applications                           (833)        (234)        (215)
Proceeds from sale of hotel properties                       12,234       28,323        8,250
                                                            -------      -------      -------
             Net cash flow used in investing activities      (2,201)     (61,899)    (193,539)
                                                            -------      -------      -------

Cash flows from financing activities:
Gross proceeds from public offering of common stock                                    20,145
Gross proceeds from public offering of preferred stock                                 68,750
Purchase of Treasury stock                                   (1,290)      (2,815)
Payment of offering expenses                                                 (30)      (3,745)
Proceeds from exercise of stock options                                                   112
Distributions paid to common and preferred shareholders
   and unit holders                                         (49,114)     (54,305)     (48,262)
Proceeds from borrowings                                    182,467      263,170      179,475
Payments on debt                                           (180,239)    (213,320)     (92,080)
Cash paid for loan costs                                     (7,201)      (2,286)         (28)
Payments on capital lease obligations                                        (69)          (4)
                                                            -------      -------      -------
      Net cash flow provided by (used in)
         financing activities                               (55,377)      (9,655)     124,363
                                                            -------      -------      -------

Net increase (decrease) in cash and cash
   equivalents                                                  432          (39)         210

Cash and cash equivalents at beginning of year                  361          400          190
                                                            -------      -------      -------

Cash and cash equivalents at end of year                    $   793      $   361      $   400
                                                            =======      =======      =======
</TABLE>







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

                                       34

<PAGE>



                                EQUITY INNS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Organization

Equity  Inns,  Inc.  (the  "Company")  is a hotel real estate  investment  trust
("REIT") for federal income tax purposes. The Company,  through its wholly owned
subsidiary,  Equity Inns Trust (the  "Trust"),  is the sole  general  partner of
Equity Inns Partnership, L.P. (the "Partnership") and at December 31, 2000 owned
an approximate 96.8% interest in the Partnership.

At  December  31,  2000,  the  Partnership  or its  affiliates  owned  96  hotel
properties,  with a total of 12,284  rooms in 34  states.  During the year ended
December 31, 2000, the  Partnership or its affiliates,  under  operating  leases
providing for the payment of percentage rent (the "Percentage  Leases"),  leased
75 of the  Company's  hotels to  affiliates  of  Interstate  Hotels  Corporation
("IHC"),   which  was  recently  divested  from  Wyndham   International,   Inc.
("Wyndham").  IHC is referred to herein as the "Interstate Lessee." All payments
due under these Percentage Leases were guaranteed by IHC and Interstate  Hotels,
L.L.C.,  a subsidiary of IHC (except for three hotels where Wyndham  rather than
IHC was the  guarantor).  Also,  during the year ended  December 31,  2000,  the
Partnership  leased 19 hotels to wholly-owned  subsidiaries of Prime Hospitality
Corporation  (collectively,  the "Prime  Lessee").  All payments due under these
Percentage  Leases  were  guaranteed  by  Prime  Hospitality  Corporation.   The
remaining two hotels were  operated in 2000  pursuant to management  agreements,
one of which was operated by a  subsidiary  of IHC and one of which was operated
by a wholly-owned subsidiary of MeriStar Hotels & Resorts, Inc.

In December  1999, the REIT  Modernization  Act (the "RMA") was signed into law,
allowing the Company to own all of the stock in taxable REIT  subsidiaries  (the
"TRS").  As a result  of the  opportunities  offered  by the RMA,  effective  on
January 1, 2001,  the Company  terminated  or  assigned  the  Percentage  Leases
between the Company and the Interstate  Lessee and terminated the guarantee with
Interstate  Hotels,  L.L.C.  and Wyndham and entered into new Percentage  Leases
with the Taxable REIT  subsidiaries  of the Company (the "TRS  Lessees") for the
lease of 77 of the Company's hotels. The terms of the Percentage Leases with the
TRS Lessees are  substantially  identical to the  Percentage  Leases  terminated
between the Company and the Interstate  Lessee.  The  Interstate  Lessee and the
Prime  Lessee  are  referred  to  herein  collectively  as  the  "Lessees",  and
individually  as a "Lessee."  The Lessees  operate and lease hotels owned by the
Partnership and its affiliates pursuant to the Percentage Leases,  which provide
for rent  payments to the  Partnership  equal to the greater of (i) a fixed base
rent ("Base Rent") or (ii)  percentage  rent based on the revenues of the hotels
("Percentage  Rent").  In future reporting  periods,  the rents generated by the
Percentage  Leases with the TRS Lessees  will be  eliminated  in  consolidation,
while the actual operating results of all the Company's hotels leased by the TRS
Lessees will be included in the Company's financial statements.

2.     Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated  financial  statements include the accounts of the Company, the
Trust  and  the   Partnership.   All  significant   intercompany   balances  and
transactions have been eliminated.

Investment in Hotel Properties

The hotel  properties are recorded at cost.  Depreciation  is computed using the
straight-line  method over estimated useful lives of the assets which range from
5 to 40 years for  buildings and  components  and 5 to 7 years for furniture and
equipment.

                                       35

<PAGE>


                                EQUITY INNS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



2.     Summary of Significant Accounting Policies, Continued

Maintenance and repairs are the  responsibility  of the Lessees;  major renewals
and  improvements  are  capitalized.   Upon  disposition,  both  the  asset  and
accumulated  depreciation accounts are relieved, and the related gain or loss is
credited or charged to the income statement.

The Company  reviews the carrying  value of each hotel  property to determine if
circumstances  exist  indicating  an  impairment  in the  carrying  value of the
investment  in the  hotel  property  or  that  depreciation  periods  should  be
modified.  If impairment is indicated,  the carrying value of the hotel property
will be adjusted to its fair market  value.  The Company  does not believe  that
there are any current facts or circumstances indicating impairment of any of its
investment in hotel properties.

Cash and Cash Equivalents

All highly  liquid  investments  with  maturities  of three  months or less when
purchased are considered to be cash equivalents.

Deferred Expenses

Deferred  expenses  are  recorded  at cost and  consist of initial  fees paid to
franchisors and loan fees and other costs incurred in issuing debt. Amortization
of franchise fees is computed using the  straight-line  method over the lives of
the franchise  agreements which range up to 20 years.  Amortization of loan fees
and other costs  incurred in issuing  debt is computed  using the  straight-line
method,  which  approximates the interest  method,  over the term of the related
debt.  Accumulated  amortization of deferred  expenses  totaled $2.9 million and
$3.4 million at December 31, 2000 and 1999, respectively.

Deposits and Other Assets

Deposits  include escrow  deposits and other deposits  relating to the Company's
mortgage debt.

Revenue Recognition

Percentage  Lease revenue is  recognized  when earned from the Lessees under the
Percentage Leases from the date of acquisition of each hotel property.

Net Income Per Common Share

Statement  of  Financial  Accounting  Standards  No. 128,  "Earnings  per Share"
requires the  presentation  of basic and diluted  earnings per share,  replacing
primary  and  fully  diluted   earnings  per  share   previously   required.   A
reconciliation  of the numerator and denominator  used in the basic earnings per
share  computation to the numerator and denominator used in the diluted earnings
per share  computation is presented below for the years ended December 31, 2000,
1999 and 1998, respectively.


                                       36

<PAGE>


                                EQUITY INNS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



2.     Summary of Significant Accounting Policies, Continued

<TABLE>
<CAPTION>

                                                              For the Years Ended December 31,
                         -----------------------------------------------------------------------------------------------------------
                                        2000                                1999                                 1998
                         ----------------------------------- ----------------------------------- -----------------------------------
                           Income      Shares      Per Share   Income      Shares      Per Share   Income       Shares     Per Share
                         (Numerator) (Denominator)  Amount   (Numerator) (Denominator)  Amount   (Numerator) (Denominator)  Amount
                         ----------- ------------- --------- ----------- ------------- --------- ----------- ------------- ---------
                                                             (in thousands except per share data)
<S>                      <C>         <C>           <C>       <C>          <C>           <C>       <C>        <C>            <C>
Net income applicable to
  common shareholders-
  basic                    $ 9,809      36,698       $.27      $22,785      37,225       $.61     $28,221      36,073        $.78
Dilutive effect of
  potential conversion
  of partnership units
  and elimination of
  minority interest            337       1,262                     819       1,345                  1,492       1,907

Dilutive effect of
  stock options
  outstanding
  using the treasury
  stock method                                                                                                     21
                           -------      ------       ----      -------      ------       ----     -------      ------        ----

Net income applicable to
  common shareholders-
  diluted                  $10,146      37,960       $.27      $23,604      38,570       $.61     $29,713      38,001        $.78
                           =======      ======       ====      =======      ======       ====     =======      ======        ====
</TABLE>

Distributions

The Company pays regular quarterly cash  distributions to shareholders which are
dependent upon receipt of distributions from the Partnership.

Minority Interest

Minority   interest  in  the  Partnership   represents  the  limited   partners'
proportionate  share of the equity of the  Partnership.  Income is  allocated to
minority interest based on weighted average percentage  ownership throughout the
year.

Stock-Based Compensation Plans

The Company applies APB Opinion No. 25 and related interpretations in its
accounting for Stock Based Compensation Plans.  Accordingly, the Company has
adopted the disclosure-only provisions of SFAS No. 123, "Accounting for Stock-
Based Compensation."

Income Taxes

The  Company  has  qualified  as a REIT under  Sections  856  through 860 of the
Internal Revenue Code, as amended.  Accordingly, no provision for federal income
taxes has been reflected in the financial statements.

Earnings and profits,  which will determine the taxability of  distributions  to
shareholders,  will  differ from net income  reported  for  financial  reporting
purposes primarily due to the differences for federal income tax purposes in the
estimated useful lives and methods used to compute  depreciation.  Distributions
made to shareholders in 2000 and 1999 are considered to be approximately 54% and
33% return of capital, respectively, for federal income tax purposes.



                                       37

<PAGE>


                                EQUITY INNS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



2.   Summary of Significant Accounting Policies, Continued

Concentration of Credit Risk

The Company  maintains  cash  balances  with  financial  institutions  with high
ratings.  The  Company  has not  experienced  any  losses  with  respect to bank
balances in excess of government-provided insurance.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

Reclassifications

Certain  reclassifications  of the prior year  amounts have been made to conform
with the current year presentation.

3.     Investment in Hotel Properties

Hotel properties consist of the following at December 31:

                                                   2000                 1999
                                                 --------             --------
                                                         (in thousands)
         Land                                    $101,532             $103,315
         Buildings and improvements               691,516              695,923
         Furniture and equipment                  110,458              112,817
         Construction in progress                   3,490                3,366
                                                 --------             --------
                                                  906,996              915,421
         Less accumulated depreciation           (134,585)            (100,884)
                                                 --------             --------

                                                 $772,411             $814,537
                                                 ========             ========

Fifty-two of the hotel  properties are premium limited service hotels,  five are
full service hotels,  twenty are premium extended stay hotels,  and nineteen are
all-suite hotels.

During 2000,  the Company  sold three  hotels to third  parties for an aggregate
sales  price of  approximately  $13  million.  The  Company  realized  a loss of
approximately $3,300,000 as a result of these sales. The sales price was paid in
cash.

During 1999, the Company acquired two hotels for approximately $56.7 million and
sold five hotels to third parties for an aggregate sales price of  approximately
$29 million. The Company realized a gain of approximately $1,130,000 as a result
of these sales.




                                       38

<PAGE>


                                EQUITY INNS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)




4.       Notes Receivable

Notes receivable consist of the following at December 31:

                                                   2000                 1999
                                                  ------               ------
                                                         (in thousands)
Hudson Hotels Properties Corporation, a
    subsidiary of Hudson Hotels Corporation       $2,634               $2,634
Officers of the Company                              633                  539
Rosemont Hospitality Group, L.L.C.                   141                  141
                                                  ------              -------

                                                  $3,408               $3,314
                                                  ======               ======

On August 13, 1997,  the Company sold nine Hampton Inn hotels to a subsidiary of
Hudson  Hotels  Corporation  ("Hudson")  for a purchase  price of  approximately
$46.25 million, $3.9 million of which was in the form of a two-year note bearing
interest  at an annual rate of 10%,  and is secured by 666,667  shares of Hudson
Hotels  Corporation  common stock.  In 1998, the Company  modified the repayment
terms of the note and  extended  the term of the note by one year.  On April 14,
2000, the Company, in connection with Hudson's overall financial  restructuring,
modified  the  repayment  terms of the note and  extended  the term to mature on
April 1, 2006.  The modified  terms  require  monthly  payments of principal and
interest,  beginning in April 2001.  The note  continues to bear  interest at an
annual rate of 10%.

In December  1999,  the Company  assigned its  obligation to purchase a Hawthorn
Suites hotel in Chicago to Rosemont  Hospitality Group,  L.L.C. As a result, the
Company  received a  one-year  note  receivable  in the  amount of  $140,878  as
reimbursement for expenses incurred in regard to the proposed acquisition of the
hotel. In December 2000, the Company  extended the term of the note by one year.
The note bears interest at 12.25% and is due on December 31, 2001.

Since January  1998,  the Company has advanced  loans  annually to its executive
officers for taxes  relating to annual  bonuses taken in shares of the Company's
common stock.  At December 31, 2000,  the aggregate  amount of notes  receivable
from officers of the Company is $632,960.  In January 2001, the Company advanced
loans to its  officers  in the amount of  $105,951  for taxes  relating  to 2000
bonuses taken in common  stock.  All loans are  collateralized  by all shares of
common  stock  received  as  bonus  compensation  held  by  each  officer,   are
non-interest bearing and have an original term of one year. However, these notes
have  historically  been extended an additional year for each year in which they
are not repaid. All loans are due in full upon termination of employment or upon
retirement.



                                       39

<PAGE>


                                EQUITY INNS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



5.       Debt

The following  details the Company's  debt  outstanding at December 31, 2000 and
1999 (in thousands):
<TABLE>
<CAPTION>

                              Principal Balance                                          Collateral     Net Book
                             -------------------         Interest                           # of        Value at
                             12/31/00   12/31/99           Rate            Maturity        Hotels       12/31/00
                             --------   --------      -------------        --------      -----------    --------
<S>                          <C>        <C>           <C>                  <C>           <C>             <C>

Commercial Mortgage Bonds
     Class A                 $ 12,084   $ 21,138      6.83%   Fixed        11/20/06
     Class B                   50,600     50,600      7.37%   Fixed        12/20/15
     Class C                   10,000     10,000      7.58%   Fixed        02/20/17
                             --------   --------
                               72,684     81,738                                              21          $120,818

Line of Credit                96,525     192,500  LIBOR plus  Variable     Nov 2003           28           267,335
                                                  Percentage

Mortgage                       95,360     96,561      8.37%   Fixed        July 2009          19           174,033
Mortgage                       69,653                 8.25%   Fixed        Nov 2010           16           111,538
Mortgage                       35,964                 8.25%   Fixed        Nov 2010            8            62,406
Mortgage                        3,126                 8.50%   Fixed        Nov 2005            1             7,366
Mortgage                        6,062      6,234     10.00%   Fixed        Sept 2005           1            12,152
Mortgage                        4,029      4,142      8.57%   Fixed        Nov 2016            1             7,220
                             --------   --------                                                          --------

                             $383,403   $381,175                                                          $762,868
                             ========   ========                                                          ========
</TABLE>

In February 1997, the Company, through a subsidiary, issued $88 million of rated
Commercial Mortgage Bonds (the "Bonds") in a private placement transaction.  The
combined interest rate on the outstanding  balances on all three issues of Bonds
at December  31,  2000 is 7.25%.  Principal  payments  are to be applied to each
class of Bonds in order of their respective maturities with no principal payment
on any Bond until all Bonds in a bond class with an earlier stated maturity have
been paid in full.  The  Company  expects to repay these Bonds in full within 10
years with no prepayment penalty.

During the fourth  quarter of 2000,  the Company  converted  approximately  $109
million of its debt  outstanding  under its  unsecured  lines of credit to fixed
rate debt with several  financial  institutions,  at interest rates ranging from
8.25% - 8.50%.  The principal  amounts of the various  loans are amortized  over
periods  ranging  from 20 - 25 years,  with the  unpaid  balances  payable  from
November 2005 - November 2010.

On November 9, 2000, the Company repaid the remaining  outstanding balance under
its prior unsecured line of credit with Bank One, NA with borrowings under a new
$125 million secured line of credit with Bank One, NA (the "Line of Credit").

The Line of Credit bears interest at a variable rate of LIBOR plus 1.5%,  1.75%,
2.0%,  2.25%,  2.5% or 2.75% as determined by the Company's  percentage of total
debt  to  earnings  before  interest,   taxes,   depreciation  and  amortization
("EBITDA"), as defined in the loan agreement (the "Percentage").  The Percentage
is  reviewed  quarterly  and the  interest  rate is adjusted  as  necessary.  At
December 31, 2000,  the interest  rate on the Line of Credit was LIBOR (6.65% at
December 31, 2000) plus 2.50%.  Fees ranging from .25% to .55%, as determined by
the Company's ratio of total  indebtedness to EBITDA,  are paid quarterly on the
unused  portion  of the Line of  Credit.  The Line of  Credit  contains  various
covenants  including  the  maintenance  of a minimum  net  worth,  minimum  debt
coverage and interest coverage ratios,  and total indebtedness  limitations.  At
December 31, 2000, the Company was in compliance with all covenants contained in
the Line of Credit.

                                       40

<PAGE>


                                EQUITY INNS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



5.   Debt, Continued

Certain of the  Company's  loan  agreements  require a  quarterly  deposit  into
separate room renovation  accounts for the amount by which 4% of revenues at the
Company's  hotels exceeds the amount expended by the Company during the year for
replacement of furniture,  fixtures and equipment and capital  improvements  for
the hotels. For the year ended December 31, 2000, actual  expenditures  exceeded
the amounts required.

Future scheduled principal payments of debt obligations at December 31, 2000 are
as follows (in thousands):

                  Year                        Amount
                  ----                       --------

                  2001                       $  4,712
                  2002                          5,100
                  2003                        102,045
                  2004                          5,770
                  2005                         14,138
                  Thereafter                  251,638
                                             --------

                                             $383,403
                                             ========

6.       Commitments and Related Party Transactions

All of the Company's  hotels are operated  under  franchise  agreements  and are
licensed as Hampton Inn hotels  (48),  AmeriSuites  hotels (19),  Residence  Inn
hotels (11),  Homewood  Suites hotels (9),  Holiday Inn hotels (5),  Comfort Inn
hotels (3),  and Hampton Inn & Suites  hotels (1). The  franchisors  approve the
transfer of the franchise licenses to the applicable Lessee when the Partnership
acquires each hotel property.  The franchise  agreements  require the payment of
fees based on a percentage of hotel room revenue which are paid by the Lessee.

The Company earned Base Rents of $77.2 million, $77.0 million, and $65.9 million
and Percentage  Rents in excess of Base Rents of $38.7  million,  $39.5 million,
and $40.8 million, respectively, for the years ended December 31, 2000, 1999 and
1998.  The  Percentage  Lease  revenue  is based on a  percentage  of gross room
revenue, and, if applicable, food and beverage revenue of the hotels.

The  Prime  Lessee  has  future  lease  commitments  to the  Company  under  the
Percentage  Leases for various  terms  extending  through 2010.  Minimum  future
rental  income (Base Rents) under these  non-cancelable  operating  leases is as
follows (in thousands):

                  Year                        Amount
                  ----                       --------

                  2001                       $ 20,140
                  2002                         20,140
                  2003                         20,140
                  2004                         20,140
                  2005                         20,140
                  Thereafter                   85,836
                                             --------

                                             $186,536
                                             ========

                                       41

<PAGE>


                                EQUITY INNS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



 6.    Commitments and Related Party Transactions, Continued

The Percentage Leases range in terms from ten to fifteen years.  Rental rates on
all fifteen-year  leases are required to be re-negotiated  after ten years. Both
the Base Rent and the  threshold  room revenue  amount in each  Percentage  Rent
formula  are  adjusted  annually  for changes in the U.S.  Consumer  Price Index
("CPI").  The  adjustment is calculated on January 1 of each year,  provided the
lease has been in effect  for a  complete  calendar  year and is based  upon the
average  change in the CPI  during the prior 24 months.  The  adjustment  in any
lease year may not exceed 7%. Effective  January 1, 2001, the Percentage  Leases
for the Prime Lessee were  adjusted,  resulting in a 3.13% increase in both Base
Rent and threshold room revenue.  As discussed in Note 1, the Company terminated
or assigned the Percentage Leases with the Interstate Lessee, effective December
31, 2000.

At December  31,  2000,  the Lessees  owed the Company  $5,595,000  representing
fourth quarter  Percentage  Rent. All of the amounts due were collected prior to
January 31, 2001.

Under the Percentage  Leases,  the  Partnership is obligated to pay the costs of
real estate and personal  property taxes and to maintain  underground  utilities
and  structural  elements of the Hotels.  In  addition,  the  Percentage  Leases
obligate the  Partnership to fund the cost of periodic  repair,  replacement and
refurbishment  of furniture,  fixtures and equipment in the Hotels.  The Company
also may be required by  franchisors  to fund certain  capital  improvements  to
hotel properties, which are funded from borrowings, working capital, or the room
renovation  account  (Note 5).  Capital  improvements  of $13.6  million,  $32.8
million, and $26.0 million in 2000, 1999, and 1998,  respectively,  were made to
the  hotel  properties,  including  those  required  by the  franchisors  at the
acquisition of the property.

The Company has  commitments  under  operating land leases through  December 31,
2062, at eight hotel properties for payments as follows: 2001 -- $769,461;  2002
-- $795,888; 2003 -- $798,388; 2004 -- $801,138; 2005 -- $743,863; thereafter --
$10.4 million.

The  Company  has  commitments  under a lease  with an  affiliate  of Phillip H.
McNeill,  Sr., the Company's  Chairman of the Board,  for the  Company's  office
space through December 2008 at monthly payments of $13,238.

As discussed in Note 4, the Company has $632,960 of  non-interest  bearing notes
receivable  from its  officers  for taxes  relating to annual  bonuses  taken in
common stock.

7.     Supplemental Disclosure of Noncash Operating, Investing and Financing
       Activities

In 2000,  $145,000 of deferred  franchise fees and  corresponding  payables were
determined  not to be owed;  the Company  issued  38,669  shares of Common Stock
valued at $6.88  per  share to its  officers  in lieu of cash to  satisfy  bonus
compensation accrued at December 31, 1999; 7,010 unvested,  restricted shares of
common  stock  were  forfeited  by an officer of the  Company;  74,703  units of
limited  partnership  interest in the  partnership  ("Units") were exchanged for
shares of Common Stock by certain limited partners;  71,450 restricted shares of
Common  Stock valued at $6.75 per share were issued to the  Company's  officers;
12,324 shares of Common Stock at prices  ranging from $5.50 to $6.88 were issued
to  independent  directors  of  the  Company  in  lieu  of  cash  as  directors'
compensation;  and $9.5  million in  distributions  to common  shareholders  and
limited partners had been declared but not paid at December 31, 2000.


                                       42

<PAGE>


                                EQUITY INNS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



7.     Supplemental Disclosure of Noncash Ooperating, Investing and Financing
       Activities, Continued

In 1999,  the Company  issued 98,824 shares of Common Stock valued at $10.00 per
share to its officers in lieu of cash to satisfy bonus  compensation  accrued at
December 31, 1998;  632,129  Units were  exchanged for shares of Common Stock by
certain limited  partners;  124,800  restricted shares of Common Stock valued at
$9.75 per share were issued to the Company's  officers;  5,000 restricted shares
of  Common  Stock  valued  at $8.69  per  share  were  issued  to the  Company's
independent directors; 9,235 shares of Common Stock at prices ranging from $6.31
to $9.63 were issued to independent  directors of the Company in lieu of cash as
directors' compensation;  157,300 treasury shares valued at $6.79 per share were
traded in December 1999, but not settled at December 31, 1999; and $11.8 million
in distributions  to common  shareholders and limited partners had been declared
but not paid at December 31, 1999.

In 1998,  the Company  issued 69,123 shares of Common Stock valued at $15.38 per
share to its officers in lieu of cash to satisfy bonus  compensation  accrued at
December 31, 1997;  49,074  Units were  exchanged  for shares of Common Stock by
certain limited partners; 123,457 Units valued at $1.9 million and an assumption
of a $6.5 million note payable were issued as part of the total acquisition cost
of a hotel  property;  a $4.3  million  note  payable was assumed as part of the
acquisition cost of a hotel property;  141,000 restricted shares of Common Stock
valued from $13.50 to $13.56 per share were  issued to the  Company's  officers;
20,000  restricted  shares of Common Stock valued from $9.63 to $12.31 per share
were issued to the Company's independent directors; 4,042 shares of Common Stock
at prices ranging from $9.63 to $15.50 were issued to  independent  directors of
the Company in lieu of cash as directors'  compensation;  9,000 shares of Common
Stock were issued to an officer upon  exercise of options;  and $11.9 million in
distributions to common  shareholders and limited partners had been declared but
not paid at December 31, 1998.

8.     Capital Stock

The Board of Directors is  authorized to provide for the issuance of ten million
shares of  preferred  stock in one or more series,  to  establish  the number of
shares in each  series  and to fix the  designation,  powers,  preferences,  and
rights of each such series and the  qualifications,  limitations  or restriction
thereof.  On June 25, 1998,  the Company issued  2,750,000  shares of its 9 1/2%
Series A  Cumulative  Preferred  Stock,  $.01 par  value  ("Series  A  Preferred
Stock").  The offering  price was $25 per share,  resulting in gross proceeds of
$68.8  million.   The  Company  received   approximately   $66.3  million  after
underwriters' discounts and offering expenses.

The  outstanding  Units are  redeemable  at the  option of the holder for a like
number of shares of Common  Stock,  or at the  option of the  Company,  the cash
equivalent  thereof.  Total Units outstanding at December 31, 2000 and 1999 were
1,210,071 and 1,284,774, respectively.

In October  1999,  the Board of Directors  approved a stock  repurchase  program
authorizing  the  Company to buy back up to $25  million of Common  Stock on the
open market over the next eighteen months,  subject to certain market conditions
and other factors.  The Company expects to fund any stock repurchases  primarily
with proceeds from the sale of hotels which do not currently  meet the Company's
investment  criteria.  The Company believes that these  repurchases,  at current
market prices,  will enhance  shareholder  value. At December 31, 2000,  747,600
shares had been repurchased at a cost of approximately $5.2 million.



                                       43

<PAGE>


                                EQUITY INNS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



9.     Stock Based Compensation Plans

The Company is authorized, under the 1994 Stock Incentive Plan (the "1994 Plan")
and the  Directors'  Compensation  Plan (the  "Directors  Plan"),  (referred  to
collectively  as the  "Plans"),  to issue a total of 4,050,000  shares of common
stock to  directors,  officers  and key  employees of the Company in the form of
stock options,  restricted stock, or performance stock. Under the 1994 Plan, the
total shares available for grant is 4,000,000,  of which not more than 1,100,000
shares  may be  grants  of  restricted  stock or  performance  stock.  Under the
Directors  Plan,  the total  shares  available  for grants of options is 50,000.
Awards of common  stock may also be made,  and  directors  may elect to  receive
their meeting and retainer fees in the form of common stock.

Stock Options

All options to officers and key employees  have 8 to 10 year  contractual  terms
and  generally  vest  ratably  over 5 years.  A summary of the  Company's  stock
options as of December 31, 2000,  1999 and 1998 and the changes during the years
are presented below:
<TABLE>
<CAPTION>


                                         2000                            1999                        1998
                              --------------------------      ------------------------      -----------------------

                                                Weighted                      Weighted                     Weighted
                               # of Shares      Average        # of Shares    Average        # of Shares   Average
                              of Underlying     Exercise      of Underlying   Exercise      of Underlying  Exercise
                                 Options         Price          Options        Price           Options      Price
                              -------------   -----------     -------------   --------      -------------  --------
<S>                           <C>             <C>             <C>             <C>           <C>            <C>
Outstanding at beginning
    of year                      582,000        $12.60           568,000       $12.68          519,000      $12.49
Granted                            4,000        $ 6.88            14,000       $ 9.24          118,000      $13.40
Exercised                                                                                       (9,000)     $12.50
Forfeited                                                                                      (60,000)     $12.50
                                 -------        ------           -------       ------          -------      ------

Outstanding at end of year       586,000        $12.56           582,000       $12.60          568,000      $12.68

Exercisable at end of year       529,000        $12.58           505,000       $12.55          383,000      $12.56
</TABLE>

<TABLE>
<CAPTION>

                                        Options Outstanding                      Options Exercisable
                              ---------------------------------------    -------------------------------------
                                                Weighted    Weighted                      Weighted    Weighted
                                                Average     Average                       Average     Average
                              # Outstanding    Remaining    Exercise     # Exercisable   Remaining    Exercise
Range of Exercise Prices         at 12/31/00     Life        Price        at 12/31/00      Life        Price
------------------------      --------------   ---------    --------     ------------    ---------   ---------
<S>                           <C>              <C>          <C>          <C>             <C>         <C>
$8.69 -- $13.69                  586,000          2.39       $12.56         529,000         2.02       $12.58
</TABLE>

The Company applies APB Opinion No. 25 and related interpretations in accounting
for the Plans. FASB Statement No. 123, "Accounting for Stock-Based Compensation"
("SFAS 123"), was issued by the FASB in 1995 and, if fully adopted,  changes the
method for  recognition  of  compensation  cost on stock plans.  Adoption of the
expense  recognition  provisions  of SFAS 123 is  optional;  however,  pro forma
disclosures as if the Company adopted the cost  recognition  requirements  under
SFAS 123 in 1995 are presented below.

The fair value of each option granted during 2000, 1999 and 1998 is estimated on
the  date of  grant  using  the  Black-Scholes  option-pricing  model  with  the
following  assumptions:  (1)  dividend  of $1.06 for 2000 and $1.24 for 1999 and
1998; (2) expected volatility of .21 for 2000 and .19 for 1999 and


                                       44

<PAGE>


                                EQUITY INNS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



9.       Stock Based Compensation Plans, Continued

1998;  (3) a risk-free  interest rate of 6.3% for 2000,  6.0% for 1999, and 5.2%
for 1998;  and (4) expected life of six years for 2000,  ten years for 1999, and
eight years for 1998.

Had  compensation  cost  for the  Company's  2000,  1999  and  1998  grants  for
stock-based  compensation  plans been  determined  consistent with SFAS 123, the
Company's pro forma net income,  and net income per common share for 2000,  1999
and 1998 would have decreased less than 1%.

The effects of applying SFAS 123 in this pro forma disclosure are not indicative
of the future  effect,  since  additional  SFAS 123  awards in future  years are
anticipated.

Restricted Stock

A summary of the status of the Company's restricted stock grants to officers and
directors  as of December  31,  2000,  1999 and 1998 and the changes  during the
years are presented below:
<TABLE>
<CAPTION>

                                           2000                      1999                      1998
                                  ------------------------  ------------------------  ------------------------
                                                Weighted                  Weighted                  Weighted
                                                Average                   Average                   Average
                                               Fair Market               Fair Market               Fair Market
                                                Value at                  Value at                  Value at
                                  # of Shares    Grant      # of Shares    Grant      # of Shares    Grant
                                  -----------  -----------  -----------  -----------  -----------  -----------
<S>                               <C>          <C>          <C>          <C>          <C>           <C>

Outstanding at beginning of year    323,300       $11.64      193,500       $12.92       40,000       $11.41
Granted:
    With 5 year pro rata vesting     51,450       $ 6.75       91,400       $ 9.69       99,000       $13.12
    With 4 year pro rata vesting                                                         16,000       $13.56
    With 3 year pro rata vesting     20,000       $ 6.75       38,400       $ 9.75       42,000       $13.50
    Vest 100% at grant date                                                               4,000       $13.56
                                    -------       ------      -------       ------      -------       ------

Total granted                        71,450       $ 6.75      129,800       $ 9.71      161,000       $13.27
Vested to former employee            (1,440)      $11.83                                 (1,500)      $12.25
Forfeited                            (7,010)      $10.93                                 (6,000)      $12.25
                                    -------       ------      -------       ------      -------       ------

Outstanding at end of year          386,300       $11.23      323,300       $11.64      193,500       $12.92

Vested at end of year               141,240       $12.06       71,300       $12.42       29,000       $11.27
</TABLE>


In January 2001,  31,820  shares of restricted  stock were issued to officers of
the Company at a price of $6.19 per share, to vest ratably over 3 to 5 years.



                                       45

<PAGE>


                                EQUITY INNS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



10.      Significant Lessee Information

As discussed in Note 1, the Company's  Prime Lessee  guarantees  Percentage Rent
Leases relating to hotels  accounting for more than 20% of the Company's assets.
The following financial information as of December 31, 2000 is presented for the
Prime Lessee:

                                                                 Prime
                                                              -----------
       Miscellaneous Data:

       Number of hotels owned, managed or leased                      214
       Number of rooms owned, managed or leased                    27,871

       Balance Sheet Data (in thousands):
             Investment in hotel real estate                   $1,015,997
             Cash and short-term investments                        5,060
             Total assets                                       1,174,265
             Total debt                                           345,689
             Shareholders' equity                                 668,100

         Income Statement Data (in thousands):

             Total revenue                                       $559,944
             Net income                                            62,500

11.      Subsequent Events

Effective  January 1, 2001,  the Company  terminated  or assigned  all 75 of its
Percentage Leases with the Interstate  Lessee. No remuneration was exchanged for
the  termination  of the  leases.  This  action was  precipitated  by the recent
enactment of the federal REIT Modernization Act, which enables REITs such as the
Company to gain greater  control of their  properties  by  establishing  taxable
subsidiaries  to  function  as  lessees,   with  hotel  management  provided  by
independent  companies.  On January 1, 2001, the Company entered into management
contracts on 55 of its hotels with an affiliate of IHC,  which later will expire
on a staggered basis,  beginning January 1, 2002 through 2005. Also, the Company
entered into management  contracts on 20 of its hotels with Promus Hotels, Inc.,
a subsidiary of Hilton Hotels Corporation,  and two of its hotels with Crestline
Hotels and Resorts, Inc.

Effective  January 16,  2001,  the Company  entered  into an interest  rate swap
agreement  with a financial  institution on a notional  principal  amount of $50
million. The agreement effectively fixes the interest rate on floating rate debt
at a rate of 6.4275%,  plus the  Percentage.  The swap  agreement will expire in
November 2003.

On January 25, 2001,  the Company issued 39,722 shares of common stock valued at
$6.19 per share to its  officers in lieu of cash to satisfy  bonus  compensation
accrued at December 31, 2000 and also issued 31,820  restricted shares of common
stock valued at $6.19 per share to its officers.



                                       46

<PAGE>



                                EQUITY INNS, INC.
            SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION
                             AS OF DECEMBER 31, 2000
                                 (In Thousands)

<TABLE>
<CAPTION>

                                                                   Cost Capitalized Subsequent      Gross Amount at Which
                                            Initial Cost                 to Acquisition           Carried at Close of Period
                                   ------------------------------- ---------------------------- -------------------------------
                                                         Furniture        Buildings   Furniture           Buildings   Furniture
                                                            and              and        and                 and          and
Description of Property              Land   Improvements Fixtures  Land  Improvements Fixtures    Land   Improvements Fixtures
-----------------------            -------- ------------ --------- ----  ------------ --------- -------- ------------ ---------
<S>                                <C>      <C>          <C>       <C>   <C>          <C>       <C>      <C>          <C>
Hampton Inn- Albany, New York      $    953   $  9,897    $   802           $   548   $   532   $    953   $10,445    $  1,334
Hampton Inn-Cleveland, Ohio             820      4,428        217               544       531        820     4,972         748
Hampton Inn-College Station,
    Texas                               656      4,655        671               865       686        656     5,520       1,357
Hampton Inn-Columbus, Georgia           603      2,591        787               665       267        603     3,256       1,054
Hampton Inn-Ft. Worth, Texas            385      1,754        896               539       237        385     2,293       1,133
Hampton Inn-Louisville, Kentucky        395      2,406        919               712       208        395     3,118       1,127
Hampton Inn-Sarasota, Florida           553      3,389        753               511        60        553     3,900         813
Hampton Inn-Ann Arbor, Michigan         565      4,499        506               685       748        565     5,184       1,254
Hampton Inn-Gurnee, Illinois            630      3,397        277             1,029     1,082        630     4,426       1,359
Comfort Inn-Arlington, Texas            425      6,387        582               625       851        425     7,012       1,433
Residence Inn-Eagan, Minnesota          540      8,130        652             1,152       870        540     9,282       1,522
Residence Inn-Tinton Falls,
     New Jersey                                  7,711        419               942       639                8,653       1,058
Hampton Inn-Milford, Connecticut        759      5,689        467               819     1,200        759     6,508       1,667
Hampton Inn-Meriden, Connecticut        648      3,226        435               724       782        648     3,950       1,217
Hampton Inn-Beckley, West
Virginia                              1,876      5,557        402               324       502      1,876     5,881         904
Holiday Inn-Bluefield, West
    Virginia                          1,661      6,141        342             1,406     1,215      1,661     7,547       1,557
Hampton Inn-Gastonia, North
    Carolina                          1,651      4,741        358               271       771      1,651     5,012       1,129
Hampton Inn-Morgantown, West
    Virginia                          1,573      4,311        324  $ 4          176       501      1,577     4,487         825
Holiday Inn-Oak Hill, West
    Virginia                            269      3,727         85             1,628     1,167        269     5,355       1,252
Holiday Inn Express-Wilkesboro,
    North Carolina                      269      2,778        177             1,065       854        269     3,843       1,031
Hampton Inn-Naperville, Illinois        678      6,455        396               846       963        678     7,301       1,359
Hampton Inn-State College,
    Pennsylvania                        718      7,310        525               399       726        718     7,709       1,251
Comfort Inn-Rutland, Vermont            359      3,683        354               355       308        359     4,038         662
Hampton Inn-Scranton,
    Pennsylvania                        403      7,017        720               218       280        403     7,235       1,000
Residence Inn-Omaha, Nebraska           953      2,650        162    6        1,502       770        959     4,152         932
Hampton Inn-Fayetteville, North
    Carolina                            403      5,043        148   17          652       820        420     5,695         968
Hampton Inn-Indianapolis,
    Indiana                           1,207      6,513        126               597     1,161      1,207     7,110       1,287
Hampton Inn-Jacksonville
    Florida                             403      4,793        126               447     1,279        403     5,240       1,405
Holiday Inn-Mt. Pleasant,
    South Carolina                    1,205      7,874        247               580       926      1,205     8,454       1,173
Comfort Inn-Jacksonville
    Beach, Florida                      849      7,307        371    2        1,883     1,266        851     9,190       1,637
Hampton Inn-Austin, Texas               500      6,659        375    6          592       805        506     7,251       1,180
Hampton Inn-Knoxville,
    Tennessee                           617      3,871        232               624       951        617     4,495       1,183
Hampton Inn-Glen Burnie,
    Maryland                                     5,075        322               526       879                5,601       1,201
Hampton Inn-Detroit, Michigan         1,207      5,785        526               484       424      1,207     6,269         950
Homewood Suites-Hartford,
    Connecticut                       2,866      7,660        915             1,112       474      2,866     8,772       1,389
Holiday Inn-Winston-Salem,
    North Carolina                    1,350      3,124        639             3,629       949      1,350     6,753       1,588
Hampton Inn-Scottsdale,
    Arizona                           2,227      6,566        723               206       140      2,227     6,772         863
Hampton Inn-Chattanooga,
Tennessee                             1,475      6,824        752               506       467      1,475     7,330       1,219
Homewood Suites-San Antonio,
    Texas                               907      6,661      1,029                44       109        907     6,705       1,138
Residence Inn-Burlington,
    Vermont                             678      6,677        342               902       722        678     7,579       1,064
Homewood Suites-Phoenix,
    Arizona                                      7,086        902             1,693        52                8,779         954
Residence Inn-Colorado
    Springs, Colorado                 1,350      7,638        740               977       632      1,350     8,615       1,372
Residence Inn-Oklahoma
    City, Oklahoma                    1,450      8,921        850             1,073       214      1,450     9,994       1,064
Residence Inn-Tucson,
    Arizona                             832      7,078        705               679       721        832     7,757       1,426
Hampton Inn-Norfolk, Virginia                    5,092        520               236       537                5,328       1,057
Hampton Inn-Pickwick, Tennessee         370      1,484        263               257       131        370     1,741         394
Hampton Inn-Overland Park,
    Kansas                              906      5,931        330               808       793        906     6,739       1,123
Hampton Inn-Addison, Texas            2,981      6,336        810               693       741      2,981     7,029       1,551
Hampton Inn-Atlanta-Northlake,
    Georgia                                      6,905        600               571       726                7,476       1,326
Hampton Inn-Birmingham
    (Mountain Brook), Alabama                    7,988        687               661       700                8,649       1,387
Hampton Inn-Birmingham
    (Vestavia), Alabama               1,057      5,162        541               327       694      1,057     5,489       1,235
Hampton Inn-Chapel Hill,
    North Carolina                    1,834      6,504        725               436       371      1,834     6,940       1,096
Hampton Inn-Charleston,
    South Carolina                      712      5,219        516               281       494        712     5,500       1,010
Hampton Inn-Colorado
    Springs, Colorado                   803      3,925        411               499       319        803     4,424         730
Hampton Inn-Columbia,
South Carolina                          650      6,572        628               525       333        650     7,097         961

<CAPTION>

                                            Accumulated      Net Book
                                            Depreciation       Value                     Life Upon
                                            Buildings and  Buildings and                   Which
                                            Improvements;  Improvements;                Depreciation
                                             Furniture &    Furniture &     Date of     In Statement
                                   Total      Fixtures       Fixtures     Construction  Is Computed
                                  --------  -------------  -------------  ------------  ------------
<S>                                 <C>      <C>            <C>           <C>          <C>
Hampton Inn- Albany, New York     $ 12,732    $  3,177       $  9,555         1986      5-40 Yrs.
Hampton Inn-Cleveland, Ohio          6,540       1,581          4,959         1987      5-40 Yrs.
Hampton Inn-College Station,
    Texas                            7,533       1,935          5,598         1986      5-40 Yrs.
Hampton Inn-Columbus, Georgia        4,913       1,464          3,449         1986      5-40 Yrs.
Hampton Inn-Ft. Worth, Texas         3,811       1,081          2,730         1987      5-40 Yrs.
Hampton Inn-Louisville, Kentucky     4,640       1,868          2,772         1986      5-40 Yrs.
Hampton Inn-Sarasota, Florida        5,266       1,193          4,073         1987      5-40 Yrs.
Hampton Inn-Ann Arbor, Michigan      7,003       1,867          5,136         1986      5-31 Yrs.
Hampton Inn-Gurnee, Illinois         6,415       1,727          4,688         1988      5-31 Yrs.
Comfort Inn-Arlington, Texas         8,870       2,306          6,564         1985      5-31 Yrs.
Residence Inn-Eagan, Minnesota      11,344       2,806          8,538         1988      5-31 Yrs.
Residence Inn-Tinton Falls,
     New Jersey                      9,711       2,100          7,611         1988      5-31 Yrs.
Hampton Inn-Milford, Connecticut     8,934       2,166          6,768         1986      5-31 Yrs.
Hampton Inn-Meriden, Connecticut     5,815       1,467          4,348         1988      5-31 Yrs.
Hampton Inn-Beckley, West
Virginia                             8,661       1,624          7,037         1992      5-31 Yrs.
Holiday Inn-Bluefield, West
    Virginia                        10,765       2,111          8,654         1980      5-31 Yrs.
Hampton Inn-Gastonia, North
    Carolina                         7,792       1,597          6,195         1989      5-31 Yrs.
Hampton Inn-Morgantown, West
    Virginia                         6,889       1,371          5,518         1991      5-31 Yrs.
Holiday Inn-Oak Hill, West
    Virginia                         6,876       1,531          5,345         1983      5-31 Yrs.
Holiday Inn Express-Wilkesboro,
    North Carolina                   5,143       1,060          4,083         1985      5-31 Yrs.
Hampton Inn-Naperville, Illinois     9,338       2,140          7,198         1987      5-31 Yrs.
Hampton Inn-State College,
    Pennsylvania                     9,678       2,099          7,579         1987      5-31 Yrs.
Comfort Inn-Rutland, Vermont         5,059       1,166          3,893         1985      5-31 Yrs.
Hampton Inn-Scranton,
    Pennsylvania                     8,638       1,867          6,771         1994      5-31 Yrs.
Residence Inn-Omaha, Nebraska        6,043         972          5,071         1985      5-31 Yrs.
Hampton Inn-Fayetteville, North
    Carolina                         7,083       1,560          5,523         1986      5-31 Yrs.
Hampton Inn-Indianapolis,
    Indiana                          9,604       1,972          7,632         1987      5-31 Yrs.
Hampton Inn-Jacksonville
    Florida                          7,048       1,580          5,468         1986      5-31 Yrs.
Holiday Inn-Mt. Pleasant,
    South Carolina                  10,832       2,048          8,784         1988      5-31 Yrs.
Comfort Inn-Jacksonville
    Beach, Florida                  11,678       2,197          9,481         1990      5-31 Yrs.
Hampton Inn-Austin, Texas            8,937       1,700          7,237         1987      5-31 Yrs.
Hampton Inn-Knoxville,
    Tennessee                        6,295       1,190          5,105         1988      5-31 Yrs.
Hampton Inn-Glen Burnie,
    Maryland                         6,802       1,379          5,423         1989      5-31 Yrs.
Hampton Inn-Detroit, Michigan        8,426       1,387          7,039         1989      5-31 Yrs.
Homewood Suites-Hartford,
    Connecticut                     13,027       1,763         11,264         1990      5-31 Yrs.
Holiday Inn-Winston-Salem,
    North Carolina                   9,691       1,089          8,602         1969      5-31 Yrs.
Hampton Inn-Scottsdale,
    Arizona                          9,862       1,438          8,424         1996      5-31 Yrs.
Hampton Inn-Chattanooga,
Tennessee                           10,024       1,687          8,337         1988      5-31 Yrs.
Homewood Suites-San Antonio,
    Texas                            8,750       1,560          7,190         1996      5-31 Yrs.
Residence Inn-Burlington,
    Vermont                          9,321       1,493          7,828         1988      5-31 Yrs.
Homewood Suites-Phoenix,
    Arizona                          9,733       1,708          8,025         1996      5-31 Yrs.
Residence Inn-Colorado
    Springs, Colorado               11,337       1,577          9,760         1984      5-31 Yrs.
Residence Inn-Oklahoma
    City, Oklahoma                  12,508       1,606         10,902         1982      5-31 Yrs.
Residence Inn-Tucson,
    Arizona                         10,015       1,511          8,504         1985      5-31 Yrs.
Hampton Inn-Norfolk, Virginia        6,385       1,167          5,218         1990      5-31 Yrs.
Hampton Inn-Pickwick, Tennessee      2,505         382          2,123         1994      5-31 Yrs.
Hampton Inn-Overland Park,
    Kansas                           8,768       1,180          7,588         1991      5-31 Yrs.
Hampton Inn-Addison, Texas          11,561       1,395         10,166         1985      5-31 Yrs.
Hampton Inn-Atlanta-Northlake,
    Georgia                          8,802       1,365          7,437         1988      5-31 Yrs.
Hampton Inn-Birmingham
(Mountain Brook), Alabama           10,036       1,500          8,536         1987      5-31 Yrs.
Hampton Inn-Birmingham
    (Vestavia), Alabama              7,781       1,124          6,657         1986      5-31 Yrs.
Hampton Inn-Chapel Hill,
    North Carolina                   9,870       1,227          8,643         1986      5-31 Yrs.
Hampton Inn-Charleston,
    South Carolina                   7,222       1,026          6,196         1985      5-31 Yrs.
Hampton Inn-Colorado
    Springs, Colorado                5,957         787          5,170         1985      5-31 Yrs.
Hampton Inn-Columbia,
South Carolina                       8,708       1,216          7,492         1985      5-31 Yrs.
</TABLE>


                                       47

<PAGE>



                                EQUITY INNS, INC.
      SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
                             AS OF DECEMBER 31, 2000
                                 (In Thousands)


<TABLE>
<CAPTION>
                                                                   Cost Capitalized Subsequent      Gross Amount at Which
                                            Initial Cost                 to Acquisition           Carried at Close of Period
                                   ------------------------------- ---------------------------- -------------------------------
                                                         Furniture        Buildings   Furniture           Buildings   Furniture
                                                            and              and        and                 and          and
Description of Property              Land   Improvements Fixtures  Land  Improvements Fixtures    Land   Improvements Fixtures
-----------------------            -------- ------------ --------- ----  ------------ --------- -------- ------------ ---------
<S>                                <C>      <C>          <C>       <C>   <C>          <C>       <C>      <C>          <C>
Hampton Inn-Aurora, Colorado            784      3,344        359               475       292        784     3,819         651
Hampton Inn-Detroit (Madison
    Heights), Michigan                  881      4,304        451               521       272        881     4,825         723
Hampton Inn-Dublin, Ohio                944      3,612        483               573       660        944     4,185       1,143
Hampton Inn-Kansas City, Kansas         585      4,294        425               343       351        585     4,637         776
Hampton Inn-Little Rock,
    Arkansas                            898      5,520        558               273       497        898     5,793       1,055
Hampton Inn-Memphis (Poplar),
    Tennessee                         1,955      6,547        739               686       280      1,955     7,233       1,019
Hampton Inn-Memphis (Sycamore),
    Tennessee                                    2,751        239               531       624                3,282         863
Hampton Inn-Nashville
    (Briley), Tennessee                          6,550        569               880       456                7,430       1,025
Hampton Inn-Richardson, Texas         1,750      5,252        609               468       691      1,750     5,720       1,300
Hampton Inn-St. Louis, Missouri         665      3,775        386               722       751        665     4,497       1,137
Homewood Suites-Germantown,
    Tennessee                         1,011      5,760      1,011               143       113      1,011     5,903       1,124
Homewood Suites-Augusta,
    Georgia                             330      4,164        516               102        31        330     4,266         547
Residence Inn-Princeton,
    New Jersey                        1,920     15,875      1,500             1,326     1,157      1,920    17,201       2,657
AmeriSuites-Cincinnati
    (Blue Ash), Ohio                    900      6,241        466               296       255        900     6,537         721
AmeriSuites-Cincinnati
    (Forest Park), Ohio                 800      5,616        569               368       328        800     5,984         897
AmeriSuites-Columbus, Ohio              903      6,774        856               214       394        903     6,988       1,250
AmeriSuites-Flagstaff, Arizona          600      3,832        737               184        72        600     4,016         809
AmeriSuites-Jacksonville,
    Florida                           1,168      5,734        436               544       332      1,168     6,278         768
AmeriSuites-Indianapolis,
    Indiana                             700      4,775        800               157       217        700     4,932       1,017
AmeriSuites-Miami, Florida            1,500      9,387        900               143        49      1,500     9,530         949
AmeriSuites-Overland Park,
    Kansas                            1,300      7,030        900               336       298      1,300     7,366       1,198
AmeriSuites-Richmond, Virginia        1,772      9,640        921               173       159      1,772     9,813       1,080
AmeriSuites-Tampa, Florida            1,400      9,786        523               150        97      1,400     9,936         620
Hampton Inn-San Antonio, Texas        3,749      7,539      1,317               647       163      3,749     8,186       1,480
Homewood Suites-Sharonville,
    Ohio                                863      6,194        746               746       516        863     6,940       1,262
Residence Inn-Boise, Idaho              950      5,758        350               403       566        950     6,161         916
Residence Inn-Portland, Oregon        2,400     20,735        500               269       575      2,400    21,004       1,075
Hampton Inn & Suites-Memphis
    (Bartlett), Tennessee               860      5,721      1,052                55        28        860     5,776       1,080
Residence Inn-Somers Point,
    New Jersey                        1,094      6,372        729               749       564      1,094     7,121       1,293
AmeriSuites-Albuquerque, New
    Mexico                            1,776      6,871        918                36        25      1,776     6,907         943
AmeriSuites-Baltimore,
    Maryland                            659      8,514        898                43        28        659     8,557         926
AmeriSuites-Baton Rouge,
    Louisiana                           649      9,085      1,157                46        20        649     9,131       1,177
AmeriSuites-Birmingham,
    Alabama                           1,066      5,871        758                45        16      1,066     5,916         774
AmeriSuites-Las Vegas, Nevada         4,126     13,056      1,965                41        34      4,126    13,097       1,999
AmeriSuites-Memphis
    (Wolfchase), Tennessee            1,108      6,433        900                41        26      1,108     6,474         926
AmeriSuites-Miami (Kendall),
    Florida                           2,426      7,394        802                38        68      2,426     7,432         870
AmeriSuites-Minneapolis,
    Minnesota                         1,312      7,421        873                38        27      1,312     7,459         900
AmeriSuites-Nashville,
    Tennessee                         1,622      8,452      1,198                40        10      1,622     8,492       1,208
Homewood Suites-Seattle,
    Washington                        2,640     17,769      1,760               240       258      2,640    18,009       2,018
Homewood Suites-Chicago,
    Illinois                                    29,052                          179     3,559               29,231       3,559
Homewood Suites-Orlando,
    Florida                           4,250     17,015                          163     2,834      4,250    17,178       2,834
Construction in Progress              3,490                                                        3,490
Corporate Office--Memphis, TN                                                             402                              402
                                   --------   --------    -------  ---      -------   -------   --------  --------    --------

                                   $104,987   $634,617    $59,205  $35      $54,477   $53,675   $105,022  $689,094    $112,880
                                   ========   ========    =======  ===      =======   =======   ========  ========    ========
<CAPTION>
                                            Accumulated      Net Book
                                            Depreciation       Value                     Life Upon
                                            Buildings and  Buildings and                   Which
                                            Improvements;  Improvements;                Depreciation
                                             Furniture &    Furniture &     Date of     In Statement
                                   Total      Fixtures       Fixtures     Construction  Is Computed
                                  --------  -------------  -------------  ------------  ------------
<S>                               <C>       <C>             <C>           <C>           <C>
Hampton Inn-Aurora, Colorado         5,254         720          4,534         1985      5-31 Yrs.
Hampton Inn-Detroit (Madison
    Heights), Michigan               6,429         838          5,591         1987      5-31 Yrs.
Hampton Inn-Dublin, Ohio             6,272         917          5,355         1988      5-31 Yrs.
Hampton Inn-Kansas City, Kansas      5,998         843          5,155         1987      5-31 Yrs.
Hampton Inn-Little Rock,
    Arkansas                         7,746       1,141          6,605         1985      5-31 Yrs.
Hampton Inn-Memphis (Poplar),
    Tennessee                       10,207       1,231          8,976         1985      5-31 Yrs.
Hampton Inn-Memphis (Sycamore),
    Tennessee                        4,145         651          3,494         1984      5-31 Yrs.
Hampton Inn-Nashville
    (Briley), Tennessee              8,455       1,089          7,366         1987      5-31 Yrs.
Hampton Inn-Richardson, Texas        8,770       1,178          7,592         1987      5-31 Yrs.
Hampton Inn-St. Louis, Missouri      6,299         953          5,346         1987      5-31 Yrs.
Homewood Suites-Germantown,
    Tennessee                        8,038       1,206          6,832         1986      5-31 Yrs.
Homewood Suites-Augusta,
    Georgia                          5,143         739          4,404         1997      5-31 Yrs.
Residence Inn-Princeton,
    New Jersey                      21,778       2,779         18,999         1988      5-31 Yrs.
AmeriSuites-Cincinnati
    (Blue Ash), Ohio                 8,158         910          7,248         1990      5-31 Yrs.
AmeriSuites-Cincinnati
    (Forest Park), Ohio              7,681         926          6,755         1992      5-31 Yrs.
AmeriSuites-Columbus, Ohio           9,141       1,146          7,995         1994      5-31 Yrs.
AmeriSuites-Flagstaff, Arizona       5,425         701          4,724         1993      5-31 Yrs.
AmeriSuites-Jacksonville,
    Florida                          8,214         893          7,321         1996      5-31 Yrs.
AmeriSuites-Indianapolis,
    Indiana                          6,649         878          5,771         1992      5-31 Yrs.
AmeriSuites-Miami, Florida          11,979       1,345         10,634         1996      5-31 Yrs.
AmeriSuites-Overland Park,
    Kansas                           9,864       1,188          8,676         1994      5-31 Yrs.
AmeriSuites-Richmond, Virginia      12,665       1,415         11,250         1992      5-31 Yrs.
AmeriSuites-Tampa, Florida          11,956       1,236         10,720         1994      5-31 Yrs.
Hampton Inn-San Antonio, Texas      13,415       1,263         12,152         1995      5-31 Yrs.
Homewood Suites-Sharonville,
    Ohio                             9,065       1,014          8,051         1990      5-31 Yrs.
Residence Inn-Boise, Idaho           8,027         807          7,220         1986      5-31 Yrs.
Residence Inn-Portland, Oregon      24,479       2,136         22,343         1990      5-31 Yrs.
Hampton Inn & Suites-Memphis
    (Bartlett), Tennessee            7,716         908          6,808         1998      5-31 Yrs.
Residence Inn-Somers Point,
    New Jersey                       9,508       1,005          8,503         1998      5-31 Yrs.
AmeriSuites-Albuquerque, New
    Mexico                           9,626         887          8,739         1997      5-31 Yrs.
AmeriSuites-Baltimore,
    Maryland                        10,142       1,015          9,127         1996      5-31 Yrs.
AmeriSuites-Baton Rouge,
    Louisiana                       10,957       1,152          9,805         1997      5-31 Yrs.
AmeriSuites-Birmingham,
    Alabama                          7,756         750          7,006         1997      5-31 Yrs.
AmeriSuites-Las Vegas, Nevada       19,222       1,763         17,459         1998      5-31 Yrs.
AmeriSuites-Memphis
    (Wolfchase), Tennessee           8,508         846          7,662         1996      5-31 Yrs.
AmeriSuites-Miami (Kendall),
    Florida                         10,728         899          9,829         1996      5-31 Yrs.
AmeriSuites-Minneapolis,
    Minnesota                        9,671         916          8,755         1997      5-31 Yrs.
AmeriSuites-Nashville,
    Tennessee                       11,322       1,114         10,208         1997      5-31 Yrs.
Homewood Suites-Seattle,
    Washington                      22,667       2,065         20,602         1998      5-31 Yrs.
Homewood Suites-Chicago,
    Illinois                        32,790       2,411         30,379         1999      5-31 Yrs.
Homewood Suites-Orlando,
    Florida                         24,262       1,500         22,762         1999      5-31 Yrs.
Construction in Progress             3,490                      3,490                   5-31 Yrs.
Corporate Office--Memphis, TN          402         121            281                      7 Yrs.
                                  --------    --------       --------

                                  $906,996    $134,585       $772,411
                                  ========    ========       ========
</TABLE>


(a) Reconciliation of Real Estate:
     Balance at December 31, 1998                        $858,607
       Additions during the period                         87,769
       Sales during the period                            (30,955)
                                                         --------
     Balance at December 31, 1999                         915,421
       Additions during the period                          9,791
       Sales during the period                            (18,216)
                                                         --------

     Balance at December 31, 2000                        $906,996
                                                         ========


(b) Reconciliation of Accumulated Depreciation:
      Balance At December 31, 1998                       $ 68,475
         Depreciation expense during the period            36,290
         Depreciation on sales during the period           (3,881)
                                                         --------
       Balance at December 31, 1999                       100,884
         Depreciation expense during the period            36,455
         Depreciation on sales during the period           (2,754)
                                                         --------

       Balance at December 31, 2000                      $134,585
                                                         ========








                                       48

<PAGE>



ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
              ACCOUNTING AND FINANCIAL DISCLOSURE

During the fiscal  year ended  December  31,  2000 and  through the date of this
report, there has been no change in the Company's independent  accountants,  nor
have any disagreements with such accountants or reportable events occurred.


                                    PART III


ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information  required by this item is incorporated by reference from the section
entitled "The Election of Directors" in the Proxy  Statement as to the Company's
directors. See also Item 1 -- "Business- Executive Officers of the Company."



ITEM 11.      EXECUTIVE COMPENSATION

Information  required by this item is incorporated by reference from the section
entitled "Executive Compensation" in the Proxy Statement.



ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information required by this item is incorporated by reference from the sections
entitled  "Ownership of Our Common Stock" and "The Election of Directors" in the
Proxy Statement.



ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information  required by this item is incorporated by reference from the section
entitled  "Certain   Relationships  and  Related   Transactions"  in  the  Proxy
Statement.



                                       49

<PAGE>



                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

The following documents are filed as part of this report:

(a)    Financial Statements:
       --------------------

The following financial statements and financial statement schedules are located
in this report on the pages indicated:

Equity Inns, Inc.                                                          Page
                                                                           ----
  Report of Independent Accountants                                         28
  Consolidated Balance Sheets at December 31, 2000 and 1999                 29
  Consolidated Statements of Operations for the years ended
    December 31, 2000, 1999 and 1998                                        30
  Consolidated Statements of Shareholders' Equity for the
    years ended December 31, 2000, 1999 and 1998                            31
  Consolidated Statements of Cash Flows for the years ended
    December 31, 2000, 1999 and 1998                                        34
  Notes to Consolidated Financial Statements                                35
  Schedule III - Real Estate and Accumulated Depreciation
    as of December 31, 2000                                                 47

All other schedules to the consolidated financial statements required by Article
7 of  Regulation  S-X are not  required  under the related  instructions  or are
inapplicable and therefore have been omitted.

(b)      Reports on Form 8-K:

No Current  Reports on Form 8-K were filed during the last quarter of the period
covered by this Annual Report on Form 10-K.

(c)     Exhibits:

Exhibit
Number        Description
------        -----------

3.1(a)  --    Charter of the Registrant (incorporated by reference to Exhibit
              3.1 to the Company's Registration Statement on Form S-11
              (Registration No. 33-73304)

3.1(b)  --    Articles  of  Amendment  to  the  Charter  of  the  Registrant
              (incorporated by reference to Exhibit 3.1 to the Company's Current
              Report  on Form 8-K  (Registration  No.  0-23290)  filed  with the
              Securities and Exchange Commission on April 27, 1995)

3.1(c)  --    Articles  of  Amendment  to  the  Charter  of  the  Registrant
              (incorporated by reference to Exhibit 3.1 to the Company's Current
              Report  on Form 8-K  (Registration  No.  0-23290)  filed  with the
              Securities and Exchange Commission on May 31, 1996)

3.1(d)  --    Second   Amended  and  Restated   Charter  of  the  Registrant
              (incorporated by reference to Exhibit 3.1 to the Company's Current
              Report on Form 8-K  (Registration  No.  01-12073)  filed  with the
              Securities and Exchange Commission on October 23, 1997)

                                       50

<PAGE>




3.1(e)  --    Articles of Amendment to the Second Amended and Restated Charter
              of the Registrant (incorporated by reference to Exhibit 3.1 to the
              Company's Current Report on Form 8-K (Registration No. 01-12073)
              filed with the Securities and Exchange Commission on May 28, 1998)

3.1(f)  --    Articles of Amendment to the Second Amended and Restated Charter
              of the Registrant (incorporated by reference to Exhibit 4.2 to the
              Company's Current Report on Form 8-K (Registration No. 01-12073)
              filed with the Securities and Exchange Commission on June 24,
              1998)

3.2     --    By-Laws of the Registrant (incorporated by reference to Exhibit
              3.2 to the Company's Registration Statement on Form S-11
              (Registration No. 33-73304)

4.1(a)  --    Form of Share  Certificate for the Company's Common Stock, $.01
              par  value  (incorporated  by  reference  to  Exhibit  4.1  to the
              Company's  Registration  Statement on Form S-11  (Registration No.
              33-73304))

4.1(b)  --    Form of Share  Certificate  for the  Company's  9 1/2% Series A
              Cumulative  Preferred  Stock,  $.01  par  value  (incorporated  by
              reference to Exhibit 4.1 to the Company's  Registration  Statement
              on Form S-11 (Registration No. 33-73304))

4.2(a)  --    Second Amended and Restated Agreement of Limited Partnership of
              Equity Inns Partnership, L.P. (incorporated by reference to
              Exhibit 4.1 to the Company's Registration Statement on Form S-3
              (Registration No. 33-90364)

4.2(b) --     Third Amended and Restated Agreement of Limited Partnership of
              Equity Inns Partnership, L.P. (incorporated by reference to
              Exhibit 4.1 to the Company's Current Report on Form 8-K dated June
              24, 1997 (Registration No. 01-12073) filed with the Securities and
              Exchange Commission on July 10, 1997

4.2(c)  --    Amendment No. 1 to Third Amended and Restated Agreement of Limited
              Partnership of Equity Inns Partnership, L.P. (incorporated by
              reference to Exhibit 99.1 to the Company's Current Report on Form
              8-K (Registration No. 01-12073) filed with the Securities and
              Exchange Commission on June 24, 1998)

4.3(a), --    Indenture dated as of February 6, 1997 among EQI Financing
10.1(a)       Partnership I., L.P., as Issuer, LaSalle National Bank, as
              Trustee, and ABN AMBRO Bank N.V., as Fiscal Agent (incorporated by
              reference to  Exhibit  10.1  to the  Company's Quarterly Report on
              Form 10-Q (Registration No. 01-12073) for the quarter ended  March
              31, 1997 and filed with the  Securities and Exchange Commission on
              April 30, 1997)

4.3(b), --    Agreement  regarding  indenture and mortgages dated as of January
10.2(b)       1, 2001 by and between LaSalle Bank National Association and EQI
              Financing Partnership I, L.P. (incorporated by reference to
              Exhibits 4.2 and 10.2 to the Company's Current Report on Form 8-K
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on February 26, 2001)

10.2    --    Form  of  Lease   Agreement,   effective   as  of  January  1,
              2001(incorporated  by reference  to Exhibit 10.5 to the  Company's
              Current Report on Form 8-K  (Registration No. 01-12073) filed with
              the Securities and Exchange Commission on February 26, 2001

                                       51

<PAGE>




10.3(a) --    Equity Inns, Inc. 1994 Stock Incentive Plan (incorporated by
              reference to Exhibit 10.29(a) to the Company's Registration
              Statement on Form S-11 (Registration No. 33-80318))

10.3(b) --    Equity Inns, Inc. Non-Employee Directors' Stock Option Plan
              (incorporated by reference to Exhibit 10.29(b) to the Company's
              Registration Statement on Form S-11 (Registration No. 33-80318))

10.4    --    Right of First Refusal Agreement between Wolf River Hotel, L.P.
              and Equity Inns Partnership, L.P. (incorporated by reference to
              Exhibit 10.5 to the Company's Registration Statement on Form S-3
              (Registration No. 33-93158))

10.5    --    Right of First Refusal Agreement between SAHI I L.P. and Equity
              Inns Partnership, L.P. (incorporated by reference to Exhibit 10.6
              to the Company's Registration Statement on Form S-3 (Registration
              No. 33-93158))

10.6(a) --    Loan Agreement, dated as of June 16, 1999, among EQI Financing
              Partnership II, L.P. and EQI/WV Financing Partnership, L.P., as
              Borrower Parties, and GMAC Commercial Mortgage Corporation, as
              Lender (incorporated by reference to Exhibit 10.2 to the Company's
              Current Report on Form 8-K (Registration No. 01-12073) filed with
              the Securities and Exchange Commission on February 26, 2001)

10.6(b) --    Loan Affirmation and Modification Agreement dated as of December
              31, 2000 by and among EQI Financing Partnership II, L.P., EQI/WV
              Financing Partnership, L.P., ENN Leasing Company II, L.L.C.,
              Equity Inns Partnership, L.P., Equity Inns, Inc., Norwest Bank
              Minnesota, National Association, as trustee, and LaSalle Bank
              National Association, as trustee (incorporated by reference to
              Exhibit 10.4 to the Company's Current Report on Form 8-K
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on February 26, 2001)

10.7*   --    Loan Agreement, dated as of October 20, 2000, between EQI
              Financing Partnership V, L.P., as Borrower, and GMAC Commercial
              Mortgage Corporation, as Lender

10.8*   --    Loan Agreement, dated as of November 7, 2000, between EQI
              Financing Partnership III, L.P., as Borrower, and General Electric
              Capital Corporation, as Lender

10.9*   --    Loan Agreement, dated as of November 7, 2000, between EQI
              Financing Partnership IV, L.P. and EQI/WV Financing Partnership
              II, L.P., as Borrowers, and General Electric Corporation, as
              Lender

10.10   --    Secured Revolving Credit Agreement dated as of October 26, 2000,
              by and among Equity Inns Partnership, L.P., Equity Inns/West
              Virginia Partnership, L.P. and Equity Inns Partnership II, L.P. as
              Borrower, Bank One, NA, Credit  Lyonnais New York Branch, Bank of
              America, N.A., National Bank of Commerce, AmSouth Bank and Union
              Planters Bank, National Association, as Lenders, Bone One, NA, as
              Administrative Agent, Banc One Capital Markets, Inc. as Co-Lead
              Arranger/Book Manager, Credit Lyonnais New York Branch as
              Syndication Agent and Co-Lead Arranger/Book Manager, and Bank of
              America N.A. as Documentation Agent (incorporated by reference to
              Exhibit 10.8 to the Company's Current Report on Form 8-K
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on January 11, 2001)




                                       52

<PAGE>



10.11   --    Master Lease Termination Agreement dated as of September 7, 2000,
              by and among Equity Inns, Inc., Equity Inns Partnership, L.P.,
              Equity Inns/West Virginia Partnership, L.P., EQI Financing
              Partnership I, L.P., EQI Financing Partnership II, L.P., EQI/WV
              Financing Partnership, L.P., Equity Inns Partnership II, L.P.,
              E.I.P. Orlando, L.P., Crossroads/Memphis Partnership, L.P.,
              Crossroads/Memphis Financing Company, L.L.C., Crossroads/Memphis
              Financing Company II, L.L.C., Crossroads Future Company, L.L.C.,
              Crossroads Future Financing Company, L.L.C., Interstate Hotels,
              LLC and Crossroads Hospitality Company, L.L.C. (incorporated by
              reference to Exhibit 10.7 to the Company's Current Report on Form
              8-K (Registration No. 01-12073) filed with the Securities and
              Exchange Commission on January 11, 2001)

10.12   --    Form of Management Agreement between certain subsidiaries of
              Equity Inns TRS Holdings, Inc., as lessees, and Promus Hotels,
              Inc., effective as of January 1, 2001 incorporated by reference to
              Exhibit 10.6 to the Company's Current Report on Form 8-K
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on February 26, 2001)

10.13   --    Form of Management Agreement between certain subsidiaries of
              Equity Inns TRS Holdings, Inc. as lessees, and Crestline Hotels
              and Resorts, Inc., effective as of January 1, 2001 incorporated by
              reference to Exhibit 10.7 to the Company's Current Report on Form
              8-K (Registration No. 01-12073) filed with the Securities and
              Exchange Commission on February 26, 2001)

10.14   --    Form of Management Agreement between certain subsidiaries of
              Equity Inns TRS Holdings, Inc as lessees, and Crossroads
              Hospitality Company, L.L.C., effective as of January 1, 2001
              incorporated by reference to Exhibit 10.8 to the Company's Current
              Report on Form 8-K (Registration No. 01-12073) filed with the
              Securities and Exchange Commission on February 26, 2001)

10.15   --    Form of Deed of Trust dated as of February 6, 1997 by EQI
              Financing Partnership I, L.P. in favor of LaSalle National Bank,
              as Trustee (incorporated by reference to Exhibit 10.2 to the
              Company's Quarterly Report on Form 10-Q (Registration No.
              01-12073) for the quarter ended March 31, 1997 and filed with the
              Securities and Exchange Commission on April 30, 1997)

10.16   --    Commercial Lease dated as of December 17, 1998 between 64 LTD, LLC
              and Equity Inns Services, Inc. (incorporated by reference to
              Exhibit 10.32 to the Company's Annual Report on Form 10-K for the
              year ended December 31, 1998 (Registration No. 01-12073) filed
              with the Securities and Exchange Commission on March 23, 1999

10.17   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and Phillip H. McNeill, Sr.
              (incorporated by reference to Exhibit 10.33 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)

10.18   --    Change in Control and Termination Agreement between Equity Inn
              Services, Inc., Equity Inns, Inc. and Howard A. Silver
              (incorporated by reference to Exhibit 10.34 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)



                                       53

<PAGE>



10.19   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and Donald H. Dempsey
              (incorporated by reference to Exhibit 10.35 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)

10.20   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and Phillip H. McNeill, Jr.
              (incorporated by reference to Exhibit 10.36 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)

10.21   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and J. Ronald Cooper
              (incorporated by reference to Exhibit 10.37 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)

10.22   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and Richard F. Mitchell
              (incorporated by reference to Exhibit 10.38 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)

10.23   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and Michael K. Goforth
              (incorporated by reference to Exhibit 10.26 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1999
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 17, 2000)

10.24   --    Employment Agreement between Equity Inns Services, Inc., Equity
              Inns, Inc. and Donald H. Dempsey (incorporated by reference to
              Exhibit 10.39 to the Company's Annual Report on Form 10-K for the
              year ended December 31, 1998 (Registration No. 01-12073) filed
              with the Securities and Exchange Commission on March 23, 1999)

10.25   --    Equity Inns, Inc. Executive Deferred Compensation Plan
              (incorporated by reference to Exhibit 10.27 to the Company Annual
              Report on From 10-K for the year ended December 31, 1999
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 17, 2000)

21.1*   --    List of subsidiaries of Equity Inns, Inc.

23.1*   --    Consent of PricewaterhouseCoopers L.L.P.

--------------
*  Filed herewith.

(d)  Financial Statement Schedules

         The  response  to this  portion of Item 14 is  submitted  as a separate
         section of this Annual Report on Form 10-K. See Item 14 (a).



                                       54

<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the  undersigned  thereunto duly  authorized on the 19th day of March,
2001.

                                                 EQUITY INNS, INC.



                                                 By:  /s/Phillip H. McNeill, Sr.
                                                      --------------------------
                                                      Phillip H. McNeill, Sr.
                                                      Chairman of the Board and
                                                      Chief Executive Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities indicated on the 19th day of March, 2001.


       Signature                        Title                         Date
       ---------                        -----                         ----

/s/ Phillip H. McNeill, Sr.    Chairman of the Board and          March 19, 2001
---------------------------    Chief Executive Officer
Phillip H. McNeill, Sr.        (Principal Executive Officer)
                               and Director

/s/ Howard A. Silver           President, Chief Operating         March 19, 2001
--------------------           Officer and Director
Howard A. Silver


/s/ Donald H. Dempsey          Executive Vice President,          March 19, 2001
---------------------          Secretary, Treasurer,
Donald H. Dempsey              Chief Financial Officer
                               (Principal Financial and
                               Accounting Officer) and
                               Director


/s/ William A. Deupree, Jr.    Director                           March 19, 2001
---------------------------
William A. Deupree, Jr.


/s/ Harry S. Hays              Director                           March 19, 2001
-----------------
Harry S. Hays


/s/ Joseph W. McLeary          Director                           March 19, 2001
---------------------
Joseph W. McLeary

/s/ Raymond E. Schultz         Director                           March 19, 2001
----------------------
Raymond E. Schultz


                                       55

<PAGE>




                                INDEX OF EXHIBITS
Exhibit
Number        Description
------        -----------

3.1(a)  --    Charter of the Registrant (incorporated by reference to Exhibit
              3.1 to the Company's Registration Statement on Form S-11
              (Registration No. 33-73304)

3.1(b)  --    Articles  of  Amendment  to  the  Charter  of  the  Registrant
              (incorporated by reference to Exhibit 3.1 to the Company's Current
              Report  on Form 8-K  (Registration  No.  0-23290)  filed  with the
              Securities and Exchange Commission on April 27, 1995)

3.1(c)  --    Articles  of  Amendment  to  the  Charter  of  the  Registrant
              (incorporated by reference to Exhibit 3.1 to the Company's Current
              Report  on Form 8-K  (Registration  No.  0-23290)  filed  with the
              Securities and Exchange Commission on May 31, 1996)

3.1(d)  --    Second   Amended  and  Restated   Charter  of  the  Registrant
              (incorporated by reference to Exhibit 3.1 to the Company's Current
              Report on Form 8-K  (Registration  No.  01-12073)  filed  with the
              Securities and Exchange Commission on October 23, 1997)

3.1(e)  --    Articles of Amendment to the Second Amended and Restated Charter
              of the Registrant (incorporated by reference to Exhibit 3.1 to the
              Company's Current Report on Form 8-K (Registration No. 01-12073)
              filed with the Securities and Exchange Commission on May 28, 1998)

3.1(f)  --    Articles of Amendment to the Second Amended and Restated Charter
              of the Registrant (incorporated by reference to Exhibit 4.2 to the
              Company's Current Report on Form 8-K (Registration No. 01-12073)
              filed with the Securities and Exchange Commission on June 24,
              1998)

3.2     --    By-Laws of the Registrant (incorporated by reference to Exhibit
              3.2 to the Company's Registration Statement on Form S-11
              (Registration No. 33-73304)

4.1(a)  --    Form of Share  Certificate for the Company's Common Stock, $.01
              par  value  (incorporated  by  reference  to  Exhibit  4.1  to the
              Company's  Registration  Statement on Form S-11  (Registration No.
              33-73304))

4.1(b)  --    Form of Share  Certificate  for the  Company's  9 1/2% Series A
              Cumulative  Preferred  Stock,  $.01  par  value  (incorporated  by
              reference to Exhibit 4.1 to the Company's  Registration  Statement
              on Form S-11 (Registration No. 33-73304))

4.2(a)  --    Second Amended and Restated Agreement of Limited Partnership of
              Equity Inns Partnership, L.P. (incorporated by reference to
              Exhibit 4.1 to the Company's Registration Statement on Form S-3
              (Registration No. 33-90364)

4.2(b)  --    Third Amended and Restated Agreement of Limited Partnership of
              Equity Inns Partnership, L.P. (incorporated by reference to
              Exhibit 4.1 to the Company's Current Report on Form 8-K dated
              June 24, 1997 (Registration No. 01-12073) filed with the
              Securities and Exchange Commission on July 10, 1997



                                       56

<PAGE>



4.2(c)  --    Amendment No. 1 to Third Amended and Restated Agreement of Limited
              Partnership of Equity Inns Partnership, L.P. (incorporated by
              reference to Exhibit 99.1 to the Company's Current Report on Form
              8-K (Registration No. 01-12073) filed with the Securities and
              Exchange Commission on June 24, 1998)

4.3(a), --    Indenture dated as of February 6, 1997 among EQI Financing
10.1(a)       Partnership I, L.P., as Issuer, LaSalle National Bank, as Trustee,
              and ABN AMBRO Bank N.V., as Fiscal Agent (incorporated  by
              reference to Exhibit  10.1  to the  Company's Quarterly Report on
              Form 10-Q (Registration No. 01-12073) for the quarter ended  March
              31, 1997 and filed with the  Securities and Exchange Commission on
              April 30, 1997)

4.3(b), --    Agreement  regarding  indenture and mortgages dated as of January
10.2(b)       1, 2001 by and between LaSalle Bank National Association and EQI
              Financing Partnership I, L.P. (incorporated by reference to
              Exhibits 4.2 and 10.2 to the Company's Current Report on Form 8-K
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on February 26, 2001)

10.2    --    Form  of  Lease   Agreement,   effective   as  of  January  1,
              2001(incorporated  by reference  to Exhibit 10.5 to the  Company's
              Current Report on Form 8-K  (Registration No. 01-12073) filed with
              the Securities and Exchange Commission on February 26, 2001


10.3(a) --    Equity Inns, Inc. 1994 Stock Incentive Plan (incorporated by
              reference to Exhibit 10.29(a) to the Company's Registration
              Statement on Form S-11 (Registration No. 33-80318))

10.3(b) --    Equity Inns, Inc. Non-Employee Directors' Stock Option Plan
              (incorporated by reference to Exhibit 10.29(b) to the Company's
              Registration Statement on Form S-11 (Registration No. 33-80318))

10.4    --    Right of First Refusal Agreement between Wolf River Hotel, L.P.
              and Equity Inns Partnership, L.P. (incorporated by reference to
              Exhibit 10.5 to the Company's Registration Statement on Form S-3
              (Registration No. 33-93158))

10.5    --    Right of First Refusal Agreement between SAHI I L.P. and Equity
              Inns Partnership, L.P. (incorporated by reference to Exhibit 10.6
              to the Company's Registration Statement on Form S-3 (Registration
              No. 33-93158))

10.6(a) --    Loan Agreement, dated as of June 16, 1999, among EQI Financing
              Partnership II, L.P. and EQI/WV Financing Partnership, L.P., as
              Borrower Parties, and GMAC Commercial Mortgage Corporation, as
              Lender (incorporated by reference to Exhibit 10.2 to the Company's
              Current Report on Form 8-K (Registration No. 01-12073) filed with
              the Securities and Exchange Commission on February 26, 2001)

10.6(b) --    Loan Affirmation and Modification Agreement dated as of December
              31, 2000 by and among EQI Financing Partnership II, L.P., EQI/WV
              Financing Partnership, L.P., ENN Leasing Company II, L.L.C.,
              Equity Inns Partnership, L.P., Equity Inns, Inc., Norwest Bank
              Minnesota, National Association, as trustee, and LaSalle Bank
              National Association, as trustee (incorporated by reference to
              Exhibit 10.4 to the Company's Current Report on Form 8-K
              (Registration No. 01-12073) filed with the Securities and
              Exchange Commission on February 26, 2001)


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10.7*   --    Loan Agreement, dated as of October 20, 2000, between EQI
              Financing Partnership V, L.P., as Borrower, and GMAC Commercial
              Mortgage Corporation, as Lender

10.8*   --    Loan Agreement, dated as of November 7, 2000, between EQI
              Financing Partnership III, L.P., as Borrower, and General Electric
              Capital Corporation, as Lender

10.9*   --    Loan Agreement, dated as of November 7, 2000, between EQI
              Financing Partnership IV, L.P. and EQI/WV Financing Partnership
              II, L.P., as Borrowers, and General Electric Corporation, as
              Lender

10.10   --    Secured Revolving Credit Agreement dated as of October 26, 2000,
              by and among Equity Inns Partnership, L.P., Equity Inns/West
              Virginia Partnership, L.P. and Equity Inns Partnership II, L.P. as
              Borrower, Bank One, NA, Credit  Lyonnais New York Branch, Bank of
              America, N.A., National Bank of Commerce, AmSouth Bank and Union
              Planters Bank, National Association, as Lenders, Bone One, NA, as
              Administrative Agent, Banc One Capital Markets, Inc. as Co-Lead
              Arranger/Book Manager, Credit Lyonnais New York Branch as
              Syndication Agent and Co-Lead Arranger/Book Manager, and Bank of
              America N.A. as Documentation Agent (incorporated by reference to
              Exhibit 10.8 to the Company's Current Report on Form 8-K
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on January 11, 2001)

10.11   --    Master Lease Termination Agreement dated as of September 7, 2000,
              by and among Equity Inns, Inc., Equity Inns Partnership, L.P.,
              Equity Inns/West Virginia Partnership, L.P., EQI Financing
              Partnership I, L.P., EQI Financing Partnership II, L.P., EQI/WV
              Financing Partnership, L.P., Equity Inns Partnership II, L.P.,
              E.I.P. Orlando, L.P., Crossroads/Memphis Partnership, L.P.,
              Crossroads/Memphis Financing Company, L.L.C., Crossroads/Memphis
              Financing Company II, L.L.C., Crossroads Future Company, L.L.C.,
              Crossroads Future Financing Company, L.L.C., Interstate Hotels,
              LLC and Crossroads Hospitality Company, L.L.C. (incorporated by
              reference to Exhibit 10.7 to the Company's Current Report on Form
              8-K (Registration No. 01-12073) filed with the Securities and
              Exchange Commission on January 11, 2001)

10.12   --    Form of Management Agreement between certain subsidiaries of
              Equity Inns TRS Holdings, Inc., as lessees, and Promus Hotels,
              Inc., effective as of January 1, 2001 incorporated by reference to
              Exhibit 10.6 to the Company's Current Report on Form 8-K
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on February 26, 2001)

10.13   --    Form of Management Agreement between certain subsidiaries of
              Equity Inns TRS Holdings, Inc. as lessees, and Crestline Hotels
              and Resorts, Inc., effective as of January 1, 2001 incorporated by
              reference to Exhibit 10.7 to the Company's Current Report on Form
              8-K (Registration No. 01-12073) filed with the Securities and
              Exchange Commission on February 26, 2001)

10.14   --    Form of Management Agreement between certain subsidiaries of
              Equity Inns TRS Holdings, Inc as lessees, and Crossroads
              Hospitality Company, L.L.C., effective as of January 1, 2001
              incorporated by reference to Exhibit 10.8 to the Company's Current
              Report on Form 8-K (Registration No. 01-12073) filed with the
              Securities and Exchange Commission on February 26, 2001)

10.15   --    Form of Deed of Trust dated as of February 6, 1997 by EQI
              Financing Partnership I, L.P. in favor of LaSalle National Bank,
              as Trustee (incorporated by reference to Exhibit 10.2 to the
              Company's Quarterly Report on Form 10-Q (Registration No.

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<PAGE>



              01-12073) for the quarter ended March 31, 1997 and filed with the
              Securities and Exchange Commission on April 30, 1997)

10.16   --    Commercial Lease dated as of December 17, 1998 between 64 LTD, LLC
              and Equity Inns Services, Inc. (incorporated by reference to
              Exhibit 10.32 to the Company's Annual Report on Form 10-K for the
              year ended December 31, 1998 (Registration No. 01-12073) filed
              with the Securities and Exchange Commission on March 23, 1999

10.17   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and Phillip H. McNeill, Sr.
              (incorporated by reference to Exhibit 10.33 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)

10.18   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and Howard A. Silver
              (incorporated by reference to Exhibit 10.34 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)

10.19   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and Donald H. Dempsey
              (incorporated by reference to Exhibit 10.35 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)

10.20   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and Phillip H. McNeill, Jr.
              (incorporated by reference to Exhibit 10.36 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)

10.21   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and J. Ronald Cooper
              (incorporated by reference to Exhibit 10.37 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)

10.22   --    Change in Control and Termination Agreement between Equity Inns
              Services, Inc., Equity Inns, Inc. and Richard F. Mitchell
              (incorporated by reference to Exhibit 10.38 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1998
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 23, 1999)

10.23   --    Change in Control and Termination Agreement between Equity Inn
              Services, Inc., Equity Inns, Inc. and Michael K. Goforth
              (incorporated by reference to Exhibit 10.26 to the Company's
              Annual Report on Form 10-K for the year ended December 31, 1999
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 17, 2000)

10.24   --    Employment Agreement between Equity Inns Services, Inc., Equity
              Inns, Inc. and Donald H. Dempsey (incorporated by reference to
              Exhibit 10.39 to the Company's Annual Report on Form 10-K for the

                                                        59

<PAGE>


              year ended December 31, 1998 (Registration No. 01-12073) filed
              with the Securities and Exchange Commission on March 23, 1999)

10.25   --    Equity Inns, Inc. Executive Deferred Compensation Plan
              (incorporated by reference to Exhibit 10.27 to the Company Annual
              Report on From 10-K for the year ended December 31, 1999
              (Registration No. 01-12073) filed with the Securities and Exchange
              Commission on March 17, 2000)

21.1*   --    List of subsidiaries of Equity Inns, Inc.

23.1*   --    Consent of PricewaterhouseCoopers L.L.P.

--------------
*  Filed herewith.


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