<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, 1999      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. [ ]

Aggregate market value of voting stock and non-voting stock held by
nonaffiliates of the Registrant as of March 3, 2000:  $224,575,458.
Number of shares of Common Stock, $.01 par value, outstanding as of March 3,
2000:  36,666,252

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the  Registrant's  Proxy  Statement  for the 2000 Annual  Meeting of
Shareholders to be held May 11, 2000 (the "Proxy Statement") are incorporated by
reference into Part III of this Report.

Exhibit Index beginning on Page 59.

                                  Page 1 of 63


<PAGE>



                                EQUITY INNS, INC
                           ANNUAL REPORT ON FORM 10-K
                      For the Year Ended December 31, 1999


                                TABLE OF CONTENTS


                                     PART I

                                                                            Page

Item 1.    Business                                                            3

Item 2.    Properties                                                         11

Item 3.    Legal Proceedings                                                  18

Item 4.    Submission of Matters to a Vote of Security Holders                18

                                     PART II

Item 5.    Market for Registrant's Common Equity and Related
              Stockholder Matters                                             18

Item 6.    Selected Financial Data                                            20

Item 7.    Management's Discussion and Analysis of Financial
              Condition and Results of Operations                             21

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk         27

Item 8.    Financial Statements and Supplementary Data                        28

Item 9.    Changes in and Disagreements with Accountants on
              Accounting and Financial Disclosure                             51

                                    Part III

Item 10.   Directors and Executive Officers of the Registrant                 51

Item 11.   Executive Compensation                                             51

Item 12.   Security Ownership of Certain Beneficial Owners and
              Management                                                      51

Item 13.   Certain Relationships and Related Transactions                     51

                                     PART IV

Item 14.   Exhibits, Financial Statements, Schedules, and Reports on
              Form 8-K                                                        52


                                        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  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, 1999, owned an approximate 96.6% interest in
the  Partnership.  The Company conducts its business through the Partnership and
its subsidiaries.

(b)   Financial Information About Industry Segment

The  Company  is  in  the  business  of  acquiring  equity  interests  in  hotel
properties. See the Consolidated Financial Statements and notes thereto included
in Item 8 of this Annual Report on Form 10-K for certain  financial  information
required in Item 1.

(c)   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,
1999, the  Partnership or its  affiliates  leased 78 of the Company's  hotels to
affiliates of Interstate  Hotels  Corporation  (formerly named Interstate Hotels
Management,   Inc.)   ("IHC"),   which  was  recently   divested   from  Wyndham
International,  Inc.,  formerly  known  as  Patriot  American  Hospitality, Inc.
("Wyndham"). Affiliates  of IHC  are  collectively  referred  to  herein  as the
"Interstate  Lessee."   All  payments  due  under  these  Percentage  Leases are
guaranteed  by  Interstate  Hotels,  L.L.C.,  a  subsidiary  of  IHC, and by IHC
(except for three hotels where Wyndham rather than IHC is 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


                                        3


<PAGE>



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 percentage leases
(the "Percentage  Leases"),  which  provide for annual  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  Company's  remaining
two hotels are operated  pursuant to management  agreements with a subsidiary of
IHC and with a wholly-owned subsidiary of MeriStar Hotels & Resorts, Inc.

At December 31, 1999, the Partnership  owned 99 hotel properties with a total of
12,618 rooms in 35 states (the "Hotels"). The diversity of the portfolio is such
that, at December 31, 1999, no individual  hotel  exceeded 2% 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                        50                6,284
        Hampton Inn & Suites                1                  125
        Holiday Express                     1                  101
        Comfort Inn                         2                  245
                                           --               ------
              Sub-total                    54                6,755
                                           --               ------

  All-Suite Hotels:
        AmeriSuites                        19                2,403

  Premium Extended Stay Hotels:
        Residence Inn                      12                1,431
        Homewood Suites                     9                1,295
                                           --              -------
              Sub-total                    21                2,726
                                           --              -------

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

              Total                        99               12,618
                                           ==               ======



                                        4


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                             Geographical Diversity

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

Alabama                     3                 382                3.0%
Arizona                     4                 495                3.9%
Arkansas                    1                 123                1.0%
Colorado                    3                 356                2.8%
Connecticut                 3                 405                3.2%
Florida                     8               1,079                8.6%
Georgia                     4                 443                3.5%
Idaho                       1                 104                0.8%
Illinois                    3                 499                4.0%
Indiana                     2                 255                2.0%
Kansas                      2                 260                2.1%
Kentucky                    1                 119                0.9%
Louisiana                   1                 128                1.0%
Maryland                    2                 244                1.9%
Michigan                    3                 399                3.2%
Minnesota                   2                 248                2.0%
Missouri                    2                 242                1.9%
Nebraska                    1                  80                0.6%
Nevada                      1                 202                1.6%
New Jersey                  3                 424                3.4%
New Mexico                  1                 128                1.0%
New York                    1                 154                1.2%
North Carolina              5                 614                4.9%
Ohio                        6                 736                5.8%
Oklahoma                    1                 135                1.1%
Oregon                      1                 168                1.3%
Pennsylvania                2                 249                2.0%
South Carolina              3                 404                3.2%
Tennessee                  10               1,172                9.3%
Texas                       9               1,230                9.7%
Vermont                     2                 200                1.6%
Virginia                    2                 245                1.9%
Washington                  1                 161                1.3%
West Virginia               4                 455                3.6%
Wisconsin                   1                  80                0.6%
                           --              ------              -----

                           99              12,618              100.0%
                           ==              ======              =====


BUSINESS STRATEGY

The Company's primary  long-term  objective is to increase funds from operations
and enhance  shareholder  value by participating in increased  revenues from the
Hotels  through  the  Percentage   Leases,  by  acquiring  equity  interests  in
additional hotels that meet the Company's investment criteria and by disposition
of certain hotels where the Company  believes it can enhance its returns through
redeployment of capital.

                                        5


<PAGE>



ACQUISITION STRATEGY

The Company intends to acquire  additional  existing hotel  properties that meet
its  investment   criteria,   primarily   premier   upscale   limited   service,
extended-stay, all-suite and underperforming hotels that can be renovated and/or
converted  to  premium  franchise   brands.  In  particular,   the  Company  has
increasingly  emphasized  the  acquisition  of  hotel  portfolios  in  order  to
capitalize on the Company's  efficiency and  experience in acquisition  analysis
and transaction structuring and to enable the Company to more rapidly expand its
hotel portfolio.  Based upon current conditions in the REIT and hotel sectors of
the  capital  markets,  the  Company  intends  to focus,  in the near  term,  on
improving the performance of its existing portfolio,  as opposed to acquiring or
developing additional hotels.

The Company has entered into an alliance  with a major  franchisor  of all-suite
hotels,  Prime  Hospitality  Corporation.  This alliance  allows the Company the
right of first offer through the year 2000 to purchase up to 20 hotels per year.
This  alliance  provides the Company  with a distinct  advantage by avoiding the
necessity to bid against competition for new acquisitions.

The Company  considers  investment in hotel properties which meet some or all of
the following criteria:

      Particular  emphasis  is  given to  premium  extended  stay and  all-suite
      properties in the upscale and mid-price  segment,  such as AmeriSuites(R),
      Homewood Suites(R), Residence Inn(R), Hampton Inn & Suites(R), and Embassy
      Suites(R) and premium limited  service hotels,  such as Hampton Inn(R) and
      Marriott  Courtyard(R),  with  major  franchisors  such as  Hilton  Hotels
      Corporation, Marriott Corporation, and Prime Hospitality Corporation;

      Properties in attractive locations that the Company believes could benefit
      significantly  by changing  franchise  affiliations to a brand the Company
      believes will strengthen the acquired  hotel's  competitive  position.  In
      general, the Company focuses on acquisitions in markets with the following
      characteristics:

           o  high barriers to entry,  such as the scarcity or high cost of land
              for additional  development,  restrictive zoning,  stringent local
              development  laws,  extended  permit-approval   processes,  and  a
              relatively low supply of competing hotels;

           o  historically  stable demand  generators,  such as major  corporate
              office or  retail  complexes,  airports,  major  universities  and
              medical centers with convenient access to major  thoroughfares and
              airports;

     Properties with relatively stable operating histories; and

     Properties  with purchase  prices which,  coupled with the  elimination  or
     significant reduction of debt, may allow the Company to realize a favorable
     return on its investment.

The  Company  continually  evaluates  its hotel  portfolio  with  respect to the
potential  sale of  certain  of its hotel  properties  that no  longer  meet its
investment criteria.  Proceeds from the sale of its hotels will be used to repay
indebtedness, buy back outstanding shares of the Company's stock or re-invest in
hotels meeting the Company's investment criteria.

DEVELOPMENT STRATEGY

The Company may consider  selective  internal  development of hotel  properties,
principally in the premium extended stay,  all-suite and limited service segment
of the market.  At December 31,  1999,  the Company held land in Salt Lake City,
Utah for possible  construction of an Embassy Suites hotel. However, the Company
is continuing to evaluate this project.

                                        6


<PAGE>



INTERNAL GROWTH STRATEGY

The  Percentage  Leases are designed to allow the Company to  participate in any
growth in room revenues at the Hotels and to a lesser extent,  food and beverage
revenue,  if any. The Percentage Leases provide for rent equal to the greater of
(i) a fixed Base Rent or (ii)  Percentage  Rent. The  Percentage  Leases provide
that the Base Rent and the thresholds for the payment of Percentage Rent will be
adjusted  annually  (subject  to an annual  cap of 7%) based on  changes  in the
United States Consumer Price Index ("CPI").

EMPLOYEES

At March 1, 2000, the Company employed,  through a wholly-owned  subsidiary,  16
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,  Average  Daily  Rate  ("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.

The Company may be competing for  investment  opportunities  with entities which
have substantially greater financial resources than the Company.  These entities
generally may be able to accept more risk than the Company prudently can manage.
Competition generally may reduce the number of suitable investment opportunities
available to the Company and increase the  bargaining  power of property  owners
seeking to sell.

FRANCHISE AGREEMENTS

All of the Hotels operate under franchise licenses. The Company anticipates that
most of the  additional  hotel  properties  in which it invests will be operated
under franchise  licenses.  The Company believes that the public's perception of
quality associated with a franchisor is an important feature in the operation of
a hotel. Franchisors provide a variety of benefits for franchisees which include
national  advertising,  publicity  and  other  marketing  programs  designed  to
increase brand awareness,  training of personnel,  continuous  review of quality
standards and centralized reservation systems.

The Lessees hold the  franchise  licenses for the leased  hotels.  The franchise
licenses  generally  specify  certain  management,  operational,  recordkeeping,
accounting,  reporting and marketing  standards  and  procedures  with which the
applicable  Lessee must comply.  The franchise  licenses obligate each Lessee to
comply with the franchisors' standards and requirements with respect to training
of operation personnel,  safety,  maintaining specified insurance,  the types of
services and products  ancillary to guest room  services that may be provided by
the Lessee,  display of  signage,  and the type,  quality and age of  furniture,
fixtures and equipment included in guest rooms, lobbies and other common areas.

Each  franchise  license  generally  gives the Lessee  the right to operate  the
particular  Hotel under a franchise  license for periods ranging up to 20 years.
The franchise agreements provide for termination at the franchisor's option upon
the  occurrence  of  certain  events,  including  the  Lessee's  failure  to pay
royalties and fees or perform its other covenants  under the license  agreement,
bankruptcy,  assignment of the license without the consent of the franchisor, or
failure to comply with  applicable  law in the operation of the relevant  Hotel.
The Lessee may terminate the franchise

                                        7


<PAGE>



license only by giving at least 12 months'  notice and paying a specific  amount
of liquidated  damages.  The Percentage  Leases require the Company's consent to
any change or termination in the franchise  brand.  The license  agreements will
not renew automatically upon expiration. The Partnership made franchise transfer
payments  to  franchisors  aggregating   approximately  $200,000  in  1999.  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
$32.8 million to its hotel  properties in 1999,  including  approximately  $10.4
million in renovations required by franchisors. In 2000, the Partnership expects
to fund approximately $11.5 million of capital  improvements for the Hotels. The
Lessees  are  responsible  for  making  royalty  payments  under  the  franchise
agreements to the franchisors.  Under the franchise agreements,  the Lessees pay
franchise  fees ranging from 6.5% to 8.05% of room  revenue.  A portion of these
fees may be designated for a marketing and  reservation  fund for the benefit of
franchised hotels systemwide.

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  that  it  distribute
annually at least 95% 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.

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 such substances, may adversely affect the owner's ability to sell such
real  estate  or to use such  real  estate  as  collateral  for  borrowings.  In
connection  with the  ownership and  operation of the Hotels,  the Company,  the
Partnership or the Lessee, as the case may be, may be potentially liable for any
such costs.

In  connection  with  the  Partnership's  acquisition  of the  Hotels,  Phase  I
environmental site assessments  ("ESAs") were obtained on all of the Hotels from
various independent  environmental  engineers. The Phase I ESAs were intended to
identify potential environmental contamination for

                                        8


<PAGE>



which  the  Hotels  may be  responsible  and  the  potential  for  environmental
regulatory compliance  liabilities.  The Phase I ESAs included historical review
of the Hotels, reviews of certain public records,  preliminary investigations of
the sites and  surrounding  properties,  screening for the presence of hazardous
substances,  toxic substances and underground storage tanks, and the preparation
and  issuance of a written  report.  The Phase I ESAs did not  include  invasive
procedures,   such  as  soil  sampling  or  ground  water   analysis  to  detect
contaminants  from former  operations  on the Current  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.  Nevertheless,  no  assurances  can be given that (i) future
laws,  ordinances  or  regulations  will not impose any  material  environmental
liability or (ii) the current environmental  condition of the Hotels will not be
affected by the  condition of the  properties in the vicinity of Hotels (such as
the presence of leaking underground storage tanks) or by third parties unrelated
to the Partnership or the Company.

EXECUTIVE OFFICERS OF THE COMPANY

The executive  officers of the Company,  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.

    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 61) 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 45)  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

                                        9


<PAGE>



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 55) 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 was
first  appointed to  the Board of Directors  in December  1998.   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.

Phillip H. McNeill, Jr.  (age 38)  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 51)  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.




                                       10


<PAGE>



ITEM 2.           PROPERTIES

The following  table sets forth certain  information for the year ended December
31, 1999 with respect to the Hotels on a pro forma basis:
<TABLE>
<CAPTION>

                                                         Year Ended December 31, 1999

                                                                                                  Revenue
                                         Number  Pro Forma    Pro Forma                 Average     Per
                                 Date      Of      Room         Lease                    Daily    Available
                                Opened   Rooms   Revenue(3)  Payment (1)(3)  Occupancy   Rate     Room (2)
                                ------  -------  ----------  --------------  ---------  --------  ---------
<S>                             <C>     <C>     <C>          <C>             <C>        <C>       <C>
Hampton Inn:
Albany, New York                 1986      154     $3,312       $1,585          68.0%    $86.88     $58.93
Ann Arbor, Michigan              1986      150      2,775        1,273          67.4%    $75.15     $50.68
Atlanta (Northlake),
    Georgia                      1988      130      1,754          791          57.7%    $64.08     $36.96
Austin, Texas                    1987      122      2,078          957          66.2%    $71.10     $47.05
Baltimore (Glen Burnie),
    Maryland                     1989      116      2,520        1,169          80.2%    $74.87     $60.04
Beckley, West Virginia           1992      108      1,885          962          73.5%    $65.04     $47.83
Birmingham (Mountain
    Brook), Alabama              1987      131      2,266        1,185          65.2%    $72.67     $47.38
Birmingham (Vestavia),
    Alabama                      1986      123      1,778          719          62.0%    $63.90     $39.60
Chapel Hill, North Carolina      1986      122      2,132        1,066          64.1%    $74.68     $47.88
Charleston, South Carolina       1985      125      2,053          933          66.4%    $67.72     $44.99
Chattanooga, Tennessee           1988      168      2,574        1,138          71.7%    $58.70     $42.10
Chicago (Gurnee), Illinois       1988      134      1,985          796          51.6%    $78.68     $40.58
Chicago (Naperville), Illinois   1987      130      2,449        1,121          72.4%    $71.89     $52.02
Cleveland, Ohio                  1987      123      1,812          854          58.1%    $69.46     $40.35
College Station, Texas           1986      135      2,008          888          62.1%    $65.61     $40.76
Colorado Springs, Colorado       1985      128      1,840          789          57.8%    $68.09     $39.37
Columbia, South Carolina         1985      121      1,686          754          59.3%    $64.31     $38.17
Columbus, Georgia                1986      119      2,067          997          76.8%    $61.96     $47.59
Columbus (Dublin), Ohio          1988      123      2,118        1,009          65.5%    $72.03     $47.17
Dallas (Addison), Texas          1985      160      2,287        1,097          55.1%    $71.20     $39.20
Dallas (Garland), Texas          1987      125        908          429          39.7%    $50.07     $19.90
Dallas (Richardson), Texas       1987      130      1,959          912          62.9%    $65.64     $41.28
Denver (Aurora), Colorado        1985      132      1,731          680          56.6%    $63.62     $36.03
Detroit (Madison Heights),
    Michigan                     1987      124      2,429        1,182          74.6%    $71.90     $53.66
Detroit (Northfield), Michigan   1989      125      2,587        1,296          75.3%    $75.31     $56.71
Fayetteville, North Carolina     1986      122      1,226          439          50.6%    $54.39     $27.54
Ft. Worth, Texas                 1987      125      1,313          397          48.1%    $59.88     $28.75
Gastonia, North Carolina         1989      109      1,977        1,031          73.8%    $67.37     $49.69
Indianapolis, Indiana            1987      129      2,311        1,066          64.6%    $76.02     $49.08
Jacksonville, Florida            1986      122      1,796          697          65.2%    $61.86     $40.33
Kansas City (Overland Park),
    Kansas                       1991      134      2,387        1,132          66.3%    $73.60     $48.81
Kansas City, Missouri            1987      120      2,002          897          62.3%    $73.33     $45.70
Knoxville, Tennessee             1991      118      1,966          838          73.6%    $62.05     $45.65
Little Rock (North),
    Arkansas                     1985      123      1,565          644          59.3%    $58.83     $34.86
Louisville, Kentucky             1986      119      1,895          852          59.5%    $73.36     $43.63
Memphis (Poplar),
    Tennessee                    1985      126      2,628        1,341          74.2%    $77.35     $57.41
Memphis (Sycamore View),
    Tennessee                    1984      117      1,437          500          57.2%    $59.13     $33.81
Meriden, Connecticut             1988      125      2,261        1,111          67.5%    $73.40     $49.56
Milford, Connecticut             1986      148      3,059        1,499          75.6%    $74.95     $56.64
Morgantown, West Virginia        1991      108      2,119        1,078          72.8%    $73.88     $53.76
Nashville (Briley Parkway),
    Tennessee                    1987      120      2,213          981          66.0%    $76.53     $50.53
Norfolk, Virginia                1990      119      2,097        1,019          68.9%    $70.04     $48.27
Pickwick, Tennessee              1994       50        771          258          62.2%    $67.96     $42.26
San Antonio (Bowie), Texas       1995      169      3,579        1,964          69.1%    $84.03     $58.02
Sarasota, Florida                1987       97      1,360          467          61.5%    $62.51     $38.41
Savannah, Georgia                1986      129      2,055          988          70.2%    $62.68     $44.00
Scottsdale, Arizona              1996      126      1,746          814          43.4%    $87.38     $37.96
Scranton, Pennsylvania           1994      129      2,382        1,048          70.3%    $71.98     $50.59

</TABLE>


                                       11


<PAGE>


<TABLE>
<CAPTION>

                                                         Year Ended December 31, 1999

                                                                                                  Revenue
                                        Number   Pro Forma    Pro Forma                 Average     Per
                                 Date     Of       Room         Lease                    Daily    Available
                                Opened   Rooms   Revenue(3)  Payment (1)(3)  Occupancy   Rate     Room (2)
                                ------  -------  ----------  --------------  ---------  --------  ---------
<S>                             <C>     <C>      <C>         <C>             <C>        <C>       <C>
Hampton Inn (Continued):
   St. Louis (Westport),
       Missouri                  1987      122      1,717          673          57.2%    $67.35     $38.50
   State College,
       Pennsylvania              1987      120      2,412        1,196          70.4%    $78.23     $55.08

Hampton Inn & Suites:
   Memphis (Bartlett),
       Tennessee                 1998      125      2,060          940          59.3%    $76.12     $45.14

Comfort Inn:
   Dallas (Arlington), Texas     1985      141      1,260          610          41.3%    $59.28     $24.50
   Jacksonville Beach, Florida   1973      177      3,739        1,710          66.6%    $87.40     $58.20
   Rutland, Vermont              1985      104      1,816          785          76.3%    $62.69     $47.84

Residence Inn:
   Boise, Idaho (5)              1986      104      2,662        1,155          84.1%    $83.62     $70.31
   Burlington, Vermont           1988       96      2,563        1,241          85.0%    $86.11     $73.15
   Colorado Springs, Colorado    1984       96      2,541        1,341          80.6%    $89.98     $72.50
   Madison, Wisconsin            1988       80      1,383          456          59.7%    $79.31     $47.36
   Minneapolis (Eagan),
       Minnesota                 1988      120      3,159        1,569          81.0%    $89.05     $72.12
   Oklahoma City, Oklahoma       1982      135      3,002        1,419          78.5%    $77.64     $60.92
   Omaha, Nebraska               1981       80      2,033          824          78.3%    $88.90     $69.61
   Portland, Oregon (1)          1990      168      5,279        2,835          77.8%   $110.67     $86.09
   Princeton, New Jersey         1988      208      6,198        3,269          72.2%   $113.02     $81.63
   Somers Point,
       New Jersey (5)            1988      120      3,355        1,340          76.5%   $100.25     $76.71
   Tinton Falls, New Jersey      1988       96      3,193        1,549          84.7%   $107.55     $91.12
   Tucson, Arizona               1985      128      3,253        1,592          86.0%    $80.99     $69.63

Holiday Inn:
   Bluefield, West Virginia      1980      120      1,953          867          64.8%    $68.82     $44.60
   Charleston (Mt. Pleasant),
       South Carolina            1988      158      3,018        1,483          69.0%    $76.53     $52.77
   Oak Hill, West Virginia       1983      119      1,155          530          43.0%    $61.89     $26.59
   Wilkesboro, North Carolina    1985      101      1,217          596          52.7%    $62.63     $33.00
   Winston-Salem, North
       Carolina                  1969      160        795          494          22.8%    $59.89     $13.63

Homewood Suites:
   Augusta, Georgia              1997       65      1,405          661          65.6%    $90.37     $59.24
   Chicago, Illinois (4)         1999      235                   4,159
   Cincinnati (Sharonville),
       Ohio                      1990      111      2,292        1,062          70.2%    $80.57     $56.57
   Hartford, Connecticut         1990      132      4,119        2,103          79.2%   $107.95     $85.50
   Memphis (Germantown),
       Tennessee                 1996       92      1,946          908          65.3%    $88.80     $57.96
   Orlando, Florida (4)          1999      252                   2,740
   Phoenix, Arizona              1996      124      3,525        1,604          72.0%   $108.19     $77.88
   San Antonio, Texas            1996      123      2,732        1,166          72.5%    $84.00     $60.86
   Seattle, Washington           1998      161      4,295        2,575          65.2%   $112.16     $73.09

AmeriSuites:
   Albuquerque, New Mexico       1997      128      2,460        1,248          76.8%    $68.54     $52.65
   Baltimore, Maryland           1996      128      2,957        1,528          75.6%    $83.96     $63.46
   Baton Rouge, Louisiana        1997      128      2,649        1,412          73.9%    $76.77     $56.70
   Birmingham, Alabama           1997      128      1,998          909          60.8%    $70.30     $42.76
   Cincinnati (Blue Ash), Ohio   1990      127      1,969          876          56.3%    $75.41     $42.47
   Cincinnati (Forest Park),
       Ohio                      1992      126      2,375        1,130          68.5%    $75.44     $51.65
   Columbus, Ohio                1994      126      2,553        1,233          70.8%    $78.40     $55.51
   Flagstaff, Arizona            1993      117      1,902          839          70.6%    $63.12     $44.54
   Indianapolis, Indiana         1992      126      2,466        1,253          64.7%    $82.84     $53.61

</TABLE>





                                       12


<PAGE>

<TABLE>
<CAPTION>


                                                         Year Ended December 31, 1999

                                                                                                  Revenue
                                        Number   Pro Forma    Pro Forma                 Average     Per
                                 Date     Of       Room         Lease                    Daily    Available
                                Opened  Rooms    Revenue(3)  Payment (1)(3)  Occupancy   Rate     Room (2)
                                ------  ------   ----------  --------------  ---------  --------- ---------
<S>                             <C>     <C>      <C>         <C>             <C>        <C>       <C>
AmeriSuites (Continued):
     Jacksonville, Florida       1996      112      1,745          770          64.8%    $65.84     $42.69
     Las Vegas, Nevada           1998      202      4,610        2,380          80.4%    $77.81     $62.53
     Kansas City (Overland
         Park), Kansas           1994      126      2,517        1,225          69.4%    $78.89     $54.74
     Memphis (Wolfchase),
         Tennessee               1996      128      2,276        1,030          61.9%    $78.76     $48.71
     Miami, Florida              1996      126      3,220        1,852          86.8%    $80.66     $70.02
     Miami (Kendall), Florida    1996       67      2,209        1,357          89.0%   $101.48     $90.33
     Minneapolis, Minnesota      1997      128      2,541        1,274          68.6%    $79.27     $54.39
     Nashville, Tennessee        1997      128      2,432        1,244          68.7%    $75.76     $52.05
     Richmond, Virginia          1992      126      2,555        1,295          70.0%    $79.42     $55.56
     Tampa, Florida              1994      126      3,160        1,803          73.9%    $93.02     $68.72
                                        ------   --------     --------          ----     ------     ------

Consolidated Totals/Weighted
    Average for all Hotels              12,618   $227,809     $115,753          67.0%    $75.80     $51.51
                                        ======   ========     ========          ====     ======     ======
</TABLE>

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

(1)     Represents  lease  payments  calculated on a pro forma basis by applying
        the rent  provisions  in the  Percentage  Leases using  historical  room
        revenues  of the hotels as if January 1, 1999 was the  beginning  of the
        lease year.

(2)     Determined by multiplying occupancy and the average daily rate.

(3)     Amounts in thousands.

(4)     Hotel  was  not open for the entire period; therefore, pro forma results
        are not available, minimum rent has been assumed.

(5)     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

All but two of the Hotels owned by the Partnership are separately  leased to the
Lessees under a Percentage  Lease. 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.

                                       13


<PAGE>



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, 2000.

                                       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.

Two of the Hotels are  operated  pursuant  to  management  agreements  between a
subsidiary of the Company and third party management companies,  with management
fees ranging from 3% to 5% of total hotel revenues.

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.

Indemnification.  Under each of the Percentage Leases, the Lessees are obligated
to  indemnify,  and are obligated to hold  harmless,  the  Partnership  from and
against liabilities,  costs and expenses (including  reasonable  attorneys' fees
and expenses)  incurred by, imposed upon or asserted  against the Partnership on
account of, among other things, (i) any accident or injury to person or property
on or about the Hotels, (ii) any misuse by the Lessees or any of their agents of
the leased property, (iii) any environmental liability resulting from any action
or negligence of the Lessees, (iv) taxes and

                                       14


<PAGE>



assessments  in respect  of the  Hotels  (other  than real  estate and  personal
property taxes and income taxes of the Partnership on income attributable to the
Hotels),  (v) the sale or consumption  of alcoholic  beverages on or in the real
property or improvements thereon, or (vi) any breach of the Percentage Leases by
Lessees;  provided,  however, that such indemnification will not be construed to
require the Lessees to indemnify the Partnership  against the  Partnership's own
grossly  negligent  acts or  omissions  or  willful  misconduct  or  third-party
contractual liabilities arising from termination of the Percentage Leases due to
an event of default by the Partnership thereunder.

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) offer to acquire  the Hotel on the terms set forth
in the  applicable  Percentage  Lease.  If a  Lessee  rebuilds  the  Hotel,  the
Partnership  is obligated to disburse to the Lessee,  from time to time and upon
satisfaction of certain conditions,  any insurance proceeds actually received by
the Partnership as a result of such damage or destruction,  and any excess costs
of repair or restoration  will be paid by the Lessee.  If the Lessee decides not
to  rebuild  and the  Partnership  exercises  its right to reject  the  Lessee's
mandatory  offer to purchase the Hotel on the terms set forth in the  Percentage
Lease,  the Percentage  Lease will terminate and the insurance  proceeds will be
retained by the  Partnership.  If the Partnership  accepts the Lessee's offer to
purchase the Hotel,  the Percentage  Lease will terminate and the Lessee will be
entitled to the insurance  proceeds.  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 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 a credit  against  rental  payments  and other  charges in an
amount equal to any  loss-of-income  insurance proceeds actually received by the
Partnership.

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 in  accordance  with the  provisions  of 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  that part of the condemnation  award
specified  for  restoration,  provided  that  if  the  condemnation  awards  are
inadequate  to restore  the  affected  Hotel to a complete  architectural  unit,
either the  Partnership  or the Lessee  shall  have the right to  terminate  the
applicable Percentage Lease.

Events of Default.   Events of  Default  under  the  existing  Percentage Leases
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 from the Partnership
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 said 30 days and thereafter acts,
with diligence, to correct such failure within such time as is necessary;

                                       15


<PAGE>



            (iv) if a Lessee or a guarantor of the Percentage  Leases shall file
a petition  in  bankruptcy  or  reorganization  pursuant to any federal or state
bankruptcy  law or any similar  federal or state law, or shall be  adjudicated a
bankrupt or shall make an assignment for the benefit of creditors or shall admit
in writing its inability to pay its debts  generally as they become due, or if a
petition or answer  proposing the  adjudication  of the Lessee or a guarantor of
the Percentage Leases as bankrupt or its reorganization  pursuant to any federal
or state  bankruptcy  law or any similar  federal or state law shall be filed in
any court and the  Lessee  or a  guarantor  of the  Percentage  Leases  shall be
adjudicated a bankrupt and such  adjudication  shall not be vacated or set aside
or stayed within 60 days after the entry of an order in respect thereof, or if a
receiver of the Lessee or a guarantor of the  Percentage  Leases or of the whole
or  substantially  all of the assets of the  Lessee  shall be  appointed  in any
proceeding  brought by the Lessee or a guarantor of the Percentage  Leases or if
any such  receiver,  trustee or liquidator  shall be appointed in any proceeding
brought  against the Lessee or any guarantor of the Percentage  Leases and shall
not be vacated or set aside or stayed within 60 days after such appointment;

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

            (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 a failure to complete a capital  improvement  required by the
franchisor  resulting  from  the  Partnership's  failure  to fund  such  capital
improvements); or

            (vii)  the  occurrence  of an  event  of  default  under  the  Lease
Guaranties  with respect to the hotels leased to the Interstate  Lessee or IHC's
inability  to  maintain a liquid net worth of not less than 15% of the rent paid
under all Percentage  Leases between the Partnership  and the Interstate  Lessee
(the  "Minimum  Liquid Net  Worth"),  if uncured for 30 days,  or if IHC makes a
distribution  and after  giving  effect to such  distribution,  IHC's liquid net
worth shall be less than the Minimum Net Worth.

Performance  Standards in Interstate  Percentage Leases. In 1999 each Percentage
Lease with the  Interstate  Lessee was  amended to  include  the  following  new
performance standards:

            (i) In the event that a leased  hotel does not produce  REVPAR in an
amount of at least 93% of the estimated  amount under the  applicable  operating
budget for any two consecutive  quarters,  the Partnership shall give the lessee
notice of potential termination. If, in each of the two following quarters, such
hotel continues to achieve  negative REVPAR variance to the estimated  amount of
at least 7%, the  Partnership has the option at any time thereafter to terminate
the  relevant  Percentage  Lease  upon at  least  30  days  notice,  unless  the
Interstate Lessee pays the Partnership during such 30-day period an amount equal
to the sum the Partnership  would have received as rent had the hotel maintained
REVPAR equal to 93% of the budgeted  amount minus the amount of rent  previously
received  by the  Partnership  for such  period.  If such hotel does not meet or
exceed  the  REVPAR  budgeted  for it for any  fiscal  year,  then  the  hotel's
threshold room revenue amount in the hotel's Percentage Rent formula will not be
adjusted  for changes in CPI,  but the hotel's  Base Rent shall be adjusted  for
changes in CPI;

            (ii) In the event the  REVPAR  yield  index,  as  reported  by Smith
Travel  Research,  declines by five or more  percentage  points for any calendar
year  compared with the previous  calendar  year, or in the event a leased hotel
performs  at below  100% of such  REVPAR  yield  index for any four  consecutive
calendar quarters,  the Partnership shall have the option at any time thereafter
to terminate the applicable  Percentage Lease upon 30 days notice, unless during
such 30-day period the Interstate  Lessee pays to the Partnership  rent equal to
the amount of rent the  Partnership  would have received for such period had the
performance  of such  hotel  met such  criteria  minus  the  amount  of rent the
Partnership actually received for such period;

                                       16


<PAGE>



            (iii) In the event the  Interstate  Lessee fails either of the above
performance  standards,  then the  Interstate  Lessee may elect to terminate the
relevant  Percentage Lease within 30 days after such failure,  effective 90 days
after the  Interstate  Lessee  gives notice of its  election to  terminate,  all
provided the Interstate Lessee timely pays to the Partnership a termination fee.
The amount of such termination fee is on a declining  scale,  equal to the total
estimated rent for the affected  Percentage  Lease under the relevant  operating
budget if terminated  during the first fiscal year declining to a minimum of 20%
of the  total  rent  accrued  during  the  fiscal  year  prior  to the  date  of
termination if terminated during any fiscal year after the eighth fiscal year;

            (iv)  The  Partnership   shall  have  the  right  to  terminate  any
Percentage  Lease on 30 days  notice if during  any fiscal  year the  Interstate
Lessee does not expend or incur in accordance with generally accepted accounting
principles at least 95% of the dollar amounts  contained in the operating budget
for  sale  and  marketing   expenses   (excluding   certain   franchisor-related
advertising and marketing expenses) and property maintenance; and

            (v) The Partnership shall have the right to terminate any Percentage
Lease on 30 days notice if any  general  manager or director of sales of a hotel
is transferred to another hotel or similar property owned, leased, or managed by
IHC,  the  Interstate  Lessee or an  affiliate  in the same  market  without the
Partnership's  consent  and such  person is not  transferred  back to such hotel
within 15 days notice from Equity Inns.

The  Partnership's  sole  remedy in the event of any  failure to meet any of the
above performance  standards shall be the termination of the relevant Percentage
Lease;  provided,  however,  that  neither the  failure to meet any  performance
standard  under  any  Percentage  Lease  with  the  Interstate  Lessee  nor  the
termination  of a  Percentage  Lease  based  sole  upon  the  failure  to meet a
performance  standard shall result in a cross-default under any other Percentage
Leases, nor shall the Partnership incur any termination payment as a result of a
termination of a Percentage Lease for failure to meet the performance standards.

If an Event of Default  occurs and  continues  beyond any curative  period,  the
Partnership  will have the option of terminating  the  Percentage  Lease and any
other Percentage Leases between the Partnership and the Lessee.

Performance  Standard in Prime Percentage Leases. With respect to the Percentage
Leases  between  the  Partnership  and  the  Prime  Lessee,   unless  caused  by
unavoidable  delays  (due to,  among  other  things,  acts of God,  strikes  and
lock-outs),  upon a "REVPAR Market Decline" (as defined in the Percentage Leases
with the Prime Lessee), the Partnership may terminate the applicable  Percentage
Lease upon 30 days prior written notice to the Prime Lessee,  unless during such
30-day period the Prime Lessee pays the  Partnership as additional  Base Rent an
amount  reasonably  calculated by the  Partnership  and specified in such notice
that is equal to the sum the  Partnership  would have  received  as rent had the
Percentage Lease met the minimum criteria to avoid such a REVPAR Market Decline.

Right of First  Offer.  In the event  that the  Partnership  desires to sell its
interest in a Hotel, the Partnership  shall first offer to the 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").  In the event that
the 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 Lessee or its nominee at the Offer Price, and upon such sale, the applicable
Percentage  Lease shall  terminate  with respect to the Hotel.  Such  provisions
shall not apply to any sale,  transfer or conveyance by the  Partnership  of any
interest in the Hotels to any affiliate of the Partnership.

Termination of Percentage  Leases on Disposition of the Hotels. In the event the
Partnership  enters into an agreement to sell or otherwise  transfer a Hotel and
the Lessee does not elect to acquire the Hotel in  accordance  with the right of
first offer described above, the Partnership shall be permitted

                                       17


<PAGE>



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 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 Lessee
the net present value of the 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 lease to the Lessee one or more substitute hotels on terms that
would create a leasehold  interest in such hotels with a fair market value equal
to or  exceeding  the fair  market  value of the  Lessee's  remaining  leasehold
interest under the Percentage Lease to be terminated.

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  Lessees  the  termination  payment  described  in the
preceding paragraph.

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 1999, 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, 1998:
  First Quarter                      $16    $14-1/4        $0.31      March 27, 1998
  Second Quarter                $16-1/16   $13-3/16        $0.31      June 30, 1998
  Third Quarter                  $14-1/8     $9-7/8        $0.31      September 30, 1998
  Fourth Quarter               $11-13/16     $8-3/4        $0.31      December 31, 1998

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 30, 1999
</TABLE>

                                       18


<PAGE>




(b)  Stockholder Information

On March 3, 2000, there were 1,135 record holders of the Company's Common Stock,
including  shares held in "street name" by nominees who are record holders,  and
approximately 27,000 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 95% 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
1999 and 1998 are considered to be approximately  33% and 26% 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, 1999, 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, 1999,  1998,  1997, 1996
and 1995 and (ii)  selected  historical  balance  sheet data as of December  31,
1999, 1998, 1997, 1996 and 1995. 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.

                                       19


<PAGE>



                                EQUITY INNS, INC
                             SELECTED FINANCIAL DATA

                      (in thousands, Except Per Share Data)

<TABLE>
<CAPTION>
                                                       Year Ended December 31,
                                           1999       1998       1997       1996       1995
                                         --------   --------   --------   --------   --------
<S>                                      <C>        <C>        <C>        <C>        <C>
Operating Data:

      Revenue                            $118,424   $106,731   $ 71,761   $ 38,430   $ 24,145
      Net income                           29,316     31,595     23,543     14,473      8,511
      Preferred stock dividends             6,531      3,374
      Net income applicable to common
          shareholders                     22,785     28,221     23,543     14,473      8,511
      Income before extraordinary
          item per common share               .61        .78        .88        .69        .70

      Net income per common share,
          basic and diluted                   .61        .78        .82        .69        .70

      Distributions declared per

          common share and Unit              1.24       1.24       1.14       1.12       1.00

      Weighted average number of
          common shares and Units
          outstanding-diluted              38,570     38,001     29,963     21,681     12,920

Balance Sheet Data:

      Investments in hotel properties,
          net                            $814,537   $790,132   $617,072   $309,202   $218,429

      Total assets                        832,119    807,023    635,525    317,880    225,067

      Debt                                381,175    331,394    233,206     77,399     74,939

      Minority interest in Partnership     12,008     19,070     19,035      7,728      6,073

      Shareholders' Equity                412,252    431,264    360,172    222,951    137,493

Other Data:

      Funds from operations (1)          $ 61,180   $ 64,985   $ 45,748   $ 26,397   $ 15,804

      Funds from operations per
          common share and Unit              1.59       1.71       1.53       1.22       1.22
</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, the write-off of non-recurring  merger
         expenses 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.

                                       20


<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 real estate investment trust
("REIT") which commenced  operations on March 1, 1994. 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,
1999 owned an approximate 96.6% interest in the Partnership.

In order to qualify as a REIT,  neither  the  Company  nor the  Partnership  can
operate hotels.  Therefore, the Partnership leases 78 of the Company's hotels to
affiliates of Interstate Hotels Corporation  ("IHC"),  formerly named Interstate
Hotels Management, Inc., which was recently divested from Wyndham International,
Inc. ("Wyndham"), formerly known as Patriot  American  Hospitality, Inc.  IHC is
referred to herein as the  "Interstate  Lessee."  All  payments  due under these
Percentage Leases are guaranteed by Interstate  Hotels,  L.L.C., a subsidiary of
IHC,  and IHC  (except for three  hotels  where  Wyndham  rather than IHC is 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 IHC  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 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 are
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. The Partnership's,  and therefore the Company's,
principal  sources of revenue are lease  payments  made by the Lessees under the
Percentage  Leases.  Percentage  Rent is based  primarily  upon the hotels' room
revenues and, to a lesser extent, food and beverage revenues.

Recent Highlights

Since its inception,  the Company has taken steps to position  itself for growth
and stability.  Several  changes have occurred since December 31, 1998 which add
significantly to these efforts. These events are as follows:

     Acquisitions and Disposition of Hotels

     Since  the  IPO,  the  Company  has  actively  implemented  its acquisition
     strategy.   During  1999,  1998  and   1997,  the  Company   acquired   the
     following types of hotels for the approximate amounts indicated:

<TABLE>
<CAPTION>
                                     1999                   1998                   1997
                                -----------------      -----------------      -----------------
                                No. of   Purchase      No. of   Purchase      No. of   Purchase
                                Hotels     Price       Hotels     Price       Hotels     Price
                                ------   --------      ------   --------      ------   --------
                                       (in thousands)         (in thousands)         (in thousands)
<S>                              <C>     <C>           <C>      <C>           <C>      <C>
     Premium Limited Service                              2     $ 20,100         34    $198,574
     Premium Extended Stay         2     $56,676          5       68,350          6      61,650
     All-Suite                                            9       96,996         10      86,966
                                   -     -------         --     --------         --    --------

                                   2     $56,676         16     $185,446         50    $347,190
                                   =     =======         ==     ========         ==    ========
</TABLE>



                                       21


<PAGE>



            During  1999,  the  Partnership   sold  five  hotels  (Hampton  Inn,
            Nashville (Brentwood),  Tennessee; Comfort Inn, Enterprise, Alabama;
            Hampton Inn, Southaven,  Mississippi;  Hampton Inn, Destin, Florida;
            Hampton Inn, Traverse City, Michigan) to third parties for aggregate
            sales prices of approximately $29 million.    The Company realized a
            gain  of  approximately  $1,130,000  as a result of these sales. The
            sales prices were paid in cash.

            Lessee Relationship

            As a result of certain restructuring changes at Wyndham, including a
            spin-off of the hotel  management  business  Wyndham  acquired  from
            Interstate Hotels Company (which includes the Percentage Leases with
            the Interstate  Lessee) into a separate public company,  the Company
            entered into a  consolidated  lease  amendment  with its  Interstate
            Lessee on March 31, 1999 (the  "Consolidated  Amendment")  for 78 of
            the  Company's  hotels.  The  consolidated  lease  amendment  became
            effective as of April 15, 1999.

            Under the terms of the Consolidated Amendment, the Interstate Lessee
            relinquished  the  right of first  refusal  to lease  the  Company's
            hotels.  The  Company  relinquished  the right of first  refusal  to
            purchase   Interstate  assets  in  the  future.  In  the  event  the
            Interstate Lessee desires to sell its current Percentage Leases with
            the Company,  the Company has a right of first offer to purchase the
            leases.

            In  addition,  performance  standards  have  been  included  in  all
            existing  Percentage  Leases  based on  revenues  of the  hotels and
            expenditures  for marketing and  maintenance of the hotels,  and the
            Company,  in April  1999,  received  $2 million of  additional  1999
            incentive rent.

            Debt Restructuring

            In March 1999, the Company obtained a $25 million  unsecured line of
            credit (the "Bank of America  Line") from Bank of America.  The Bank
            of America  Line  bears  interest  at a variable  rate of LIBOR plus
            1.775%, 1.875%, 2.00%, 2.25% or 2.50% as determined by the Company's
            percentage of total debt to total value of the Company's  investment
            in  hotel  properties,   as  defined  in  the  loan  agreement.  The
            percentage is reviewed quarterly,  and the interest rate is adjusted
            as necessary. At December 31, 1999, the interest rate on the Bank of
            America Line was LIBOR (5.82% at December 31, 1999) plus 2.50%.  The
            Bank of America Line expires in October 2000.

            On June  21,  1999,  the  Company  financed  $97,020,000  with  GMAC
            Commercial  Mortgage  Company  at an  interest  rate of  8.37%.  The
            principal  amount of the loan is amortized  over 25 years,  with the
            unpaid  balance  due and  payable  in July 2009.  Proceeds  from the
            completion  of this loan were used to repay  existing debt under the
            Bank One Line (as  defined  below).  In  connection  with  the  GMAC
            financing,  19 of the  Company's  hotel  properties  with a carrying
            value of approximately $181 million collateralize the loan.

            On June 23, 1999,  the Company  amended its $250  million  unsecured
            line of credit  (the  "Bank One  Line")  primarily  to allow for the
            measurement  of  certain  ratios  and  covenants  against a trailing
            twelve month period, which is consistent with industry practice.  At
            that  time,  certain  participant  banks  elected  to  reduce  their
            exposure  to  lodging  REITs,  resulting  in the Bank One Line being
            reduced to $219.5  million.  The Bank One Line bears  interest  at a
            variable rate of LIBOR plus 1.5%,  1.75%,  2.00%,  2.25% or 2.50% as
            determined  by the  Company's  percentage of total debt to the total
            value of the Company's investment in hotel properties, as defined in
            the loan  agreement  which is reviewed  quarterly,  and the interest
            rate is adjusted as  necessary.  At December 31, 1999,  the interest
            rate on the Bank One Line was LIBOR  (5.82% at  December  31,  1999)
            plus 2.50%. The Bank One Line expires in October 2000.

                                       22


<PAGE>




            In October 1999, the Company's  Board of Directors  approved a stock
            repurchase  program  authorizing  the  Company to buy back up to $25
            million of its Common Stock over the next eighteen  months,  subject
            to  certain market conditions  and other  factors  in the  Company's
            discretion.  The  stock  repurchase  is to be  funded  primarily  by
            proceeds from the sale of hotels not currently meeting the Company's
            investment criteria. At December 31, 1999, a total of 557,300 shares
            had been repurchased at a cost of $3.9 million.

Results of Operations

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 $118.4
million,  consisting  substantially of Percentage  Lease revenue.  This compares
with total revenue of $106.7 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
special  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,
revenue per available room  ("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 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.

Comparison of the Company's  operating  results for the year ended  December 31,
1998 with the year ended December 31, 1997.

For the year ended  December 31, 1998,  the Company had total revenues of $106.7
million,  consisting  substantially of Percentage  Lease revenue.  This compares
with total revenues of $71.8 million for the year ended December 31, 1997.

Increases in revenue from hotel  operations for the year ended December 31, 1998
as compared to 1997 are due to (i) an increased number of hotels being owned and
leased  by the  Partnership  throughout  1998,  (ii)  increases  in  ADR  and/or
occupancy at many of the hotels leased during both years,  and (iii) a full year
of operation in 1998 of hotels acquired in 1997.  Assuming all hotels which were
in  operation  a full year in both 1998 and 1997 had been owned and leased as of
January 1, 1997, REVPAR on a pro forma basis would have increased .7% over 1997.

Real estate and personal property taxes and general and administrative  expenses
in the  aggregate  remained  fairly  constant  in 1998 as  compared to 1997 as a
percentage of total revenue.  Interest  expense  increased to $21.6 million from
$12.6  million in 1997 due  primarily  to  borrowings  incurred  to finance  the
Company's  acquisitions.   The  Company's  weighted  average  interest  rate  on
outstanding  borrowings  during the years ended  December 31, 1998 and 1997, was
7.46% and 7.53%, respectively.  Net income applicable to common shareholders for
1998 was $28.2  million or $0.78 per share,  compared to $23.5  million or $0.82
per share for 1997.

                                       23


<PAGE>



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 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:

<TABLE>
<CAPTION>
                                             For the Years Ended December 31,
                                             1999                       1998
                                            -------                    -------
                                       (in thousands, except per share and Unit data)
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Net income                                  $29,316                    $31,595

Less:
     Gain on sale of hotel properties        (1,130)
     Preferred stock dividends               (6,531)                    (3,374)

Add:
     Minority interest                          819                      1,492
     Depreciation of buildings,
         furniture and fixtures              38,573                     32,370
     Loss on sale of hotel properties                                      705
     Change in accounting for corporate
         organization costs                     133
     Non-recurring merger expenses                                       2,197
                                            -------                    -------

Funds from Operations                       $61,180                    $64,985
                                            =======                    =======

Weighted average number of
     common shares and Units
     outstanding                             38,570                     38,001
                                            =======                    =======

Funds from Operations per common share
     and Unit                               $  1.59                    $  1.71
                                            =======                    =======
</TABLE>


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

                                       24


<PAGE>



payments under the Percentage Leases.

Cash and cash  equivalents  were  $361,000 at  December  31,  1999,  compared to
$400,000 at December  31,  1998.  Excess  cash  balances  are used to reduce the
Company's  outstanding  debt.  For the year ended  December 31, 1999,  cash flow
provided by  operating  activities,  consisting  primarily of  Percentage  Lease
revenue, was $71.5 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.

At December 31, 1999, the Company had outstanding debt of  approximately  $381.2
million,  including  $174.5 million under the $219.5  million  unsecured line of
credit with Bank One (the "Bank One Line"),  $18.0 million under the $25 million
unsecured  line of credit  with Bank of America  (the  "Bank of America  Line"),
$81.7 million  under the  Commercial  Mortgage  Bonds (the  "Bonds"),  and $96.6
million under the GMAC term loan, leaving $39.5 million available under the Bank
One Line after  consideration of outstanding letters of credit, $7 million under
the $25 million  unsecured line of credit from Bank of America and $10.0 million
available under the NBC Credit Line. Additionally, the Company had $10.4 million
of mortgage notes payable  assumed in connection with the purchase of two hotels
in 1998. The Company's consolidated indebtedness was 42.2% of its investments in
hotels, at cost, at December 31, 1999.

In December 1997, the Company  entered into an interest rate swap agreement with
a financial  institution  on a notional  principal  amount of $75  million.  The
agreement effectively fixes the interest rate on floating rate debt at a rate of
5.90% plus 1.50%,  1.75%,  2.00%, 2.25%, or 2.50% as determined by the Company's
percentage  of total debt to the total  value of the  Company's  investments  in
hotel properties,  as defined in the Company's Bank One Line and Bank of America
Line loan agreements (the "Percentage"). In May 1999, the Company entered into a
second interest rate swap on a notional  principal amount of $40 million,  which
effectively  fixes the  interest  rate on floating  rate debt at a rate of 5.24%
plus the Percentage. These swap agreements will expire in October 2000.

During 1999, the Company  invested $32.8  million,  including  $10.4 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 $11.5 million in 2000 for capital improvements.

The  Company  intends  to  fund  such  improvements  out  of  future  cash  from
operations,  present cash balances and borrowings  under its Bank One Line, Bank
of America Line and the NBC Credit Line.  Under the Bank One Line and the Bonds,
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.
During  1999 and  1998,  non-recurring  enhancements  for  capital  expenditures
exceeded this threshold,  which based upon 4% of room revenue, were $9.3 million
and $8.6 million, respectively.

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.

                                       25


<PAGE>



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 95% of its taxable  income to its
shareholders. The Company intends to pay these distributions from operating cash
flows. 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).
During 1998,  the  Partnership  distributed an aggregate of $47.2 million to its
partners,  or $1.24 per Unit (including  $44.9 million of  distributions  to the
Company to fund  distributions  to shareholders of $1.24 per share in 1998). For
federal income tax purposes, approximately 33% of 1999 distributions represented
a return of capital, compared with approximately 26% for 1998.

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 Bank One Line, Bank of America Line
and the NBC Credit  Line.  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  Agreement for the Partnership,
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,  1999,  632,129  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.

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.

Revenue Recognition and Impact of Recently Issued Accounting Standards to be
  Adopted in 2000

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101") which provides guidance on revenue recognition. SAB
101 is effective for fiscal years  beginning  after  December 15, 1999.  SAB 101
requires  that a lessor not  recognize  contingent  rental  income  until annual
specified  hurdles  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 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 Funds from

                                       26


<PAGE>



Operations  from its third  party  Lessees,  and  therefore  will not effect its
ability to pay  dividends.  The Company  will account for SAB 101 as a change in
accounting principle effective January 1, 2000.

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 RISK

The Company is  exposed to certain  financial market risks, the most predominant
of  which  is  the  fluctuation  in  interest  rates.  At December 31, 1999, the
Company's exposure to  market  risk for a  change in  interest  rates is related
solely to its debt outstanding under its $219.5 million Bank One Line,  its  $25
million Bank of America  Line and its $10 million NBC Credit Line  (collectively
referred to as the  "Facilities").   Total debt outstanding under the Facilities
totaled $192.5 million at December  31, 1999.   In  December  1997,  the Company
entered into an interest rate swap agreement, expiring in October  2000,  with a
financial institution  on a  notional  principal  amount  of $75  million.   The
agreement effectively fixes the  interest  rate on floating  rate debt at a rate
of  5.90%  plus  1.50%,  1.75%,  2.00%,  2.25%,  or 2.50% as  determined  by the
Company's  percentage  of  total  debt  to  the  total  value of  the  Company's
investments  in hotel properties,  as defined in the Company's Bank One Line and
Bank  of  America  Line  loan  agreements  (the "Percentage").  In May 1999, the
Company entered into a second interest rate swap agreement,  expiring in October
2000, on a notional principal amount of $40 million, which effectively fixes the
interest  rate  on  floating  rate  debt at a rate of 5.24% plus the Percentage.
Thus, at  December 31, 1999, the Company had $77.5 million of variable rate debt
outstanding  under the Facilities that 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  Facilities.   If interest  rates
increased by 25 basis points,  the Company's annual interest expense  would have
increased  by  approximately  $275,000, based on balances outstanding during the
year ended December 31, 1999.

                                       27


<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                                          29
  Consolidated Balance Sheets as of December 31, 1999 and
    1998                                                                     30
  Consolidated Statements of Operations for the years ended
    December 31, 1999, 1998 and 1997                                         31
  Consolidated Statements of Shareholders' Equity for the
    years ended December 31, 1999, 1998 and 1997                             32
  Consolidated Statements of Cash Flows for the years ended
    December 31, 1999, 1998 and 1997                                         34
  Notes to Consolidated Financial Statements                                 35
  Schedule III -- Real Estate and Accumulated Depreciation
    as of December 31, 1999                                                  49

(b)  Supplementary Data:

Quarterly Financial Information

     Unaudited quarterly results for 1999 and 1998 are summarized as follows:

<TABLE>
<CAPTION>
                                 First        Second       Third         Fourth
                               Quarter (1)  Quarter (1)  Quarter  (1)  Quarter (1)
                               -----------  -----------  ------------  -----------
     1999                              (in thousands, except per share data)
     ----
<S>                             <C>         <C>           <C>           <C>
Revenue                          $26,076      $31,944       $34,185      $26,219
Net income applicable to
    common shareholders            3,259        8,976         9,788          762
Income before extraordinary

    item per common share            .09          .24           .26          .02

Net income per common share,
    basic and diluted                .09          .24           .26          .02

     1998
     ----

Revenue                          $21,577      $28,237       $32,481      $24,436
Net income applicable to
    common shareholders            6,004       10,491         8,590        3,136
Net income per common
    share, basic and diluted         .17          .29           .24          .09
</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.

                                       28


<PAGE>



Report of Independent Accountants

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


In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements of income,  shareholders' equity and cash flows present
fairly, in all material respects, the financial position of Equity Inns, Inc. at
December 31, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States. In addition,
in our opinion,  the financial  statement  schedule listed in Item 14(a) of this
Form 10-K, when considered in relation to the basic financial  statements  taken
as a whole, presents fairly, in all material respects,  the information required
to be included  therein.  These  financial  statements  and financial  statement
schedule are the responsibility of the Company's management;  our responsibility
is to express an opinion on these financial  statements and financial  statement
schedule  based on our audits.  We conducted  our audits of these  statements in
accordance  with auditing  standards  generally  accepted in the United  States,
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 the opinion expressed above.

Memphis, Tennessee January 21, 2000,
except as to Note 4, for which the
date is January 25, 2000

                                       29


<PAGE>


                                EQUITY INNS, INC.
                           CONSOLIDATED BALANCE SHEETS

                        (in thousands, except share data)

<TABLE>
<CAPTION>

                                                  December 31,   December 31,
                                                     1999           1998
                                                  ------------   -----------
<S>                                               <C>            <C>
Assets:
     Investment in hotel properties, net           $814,537        $790,132
     Cash and cash equivalents                          361             400
     Due from Lessees                                 5,124           6,288
     Notes receivable                                 3,314           3,215
     Deferred expenses, net                           7,019           6,313
     Deposits and other assets                        1,764             675
                                                   --------        --------

       Total Assets                                $832,119        $807,023
                                                   ========        ========

Liabilities and Shareholders' Equity:
     Debt                                          $381,175        $331,394
     Accounts payable and accrued expenses           13,755          12,316
     Distributions payable                           12,929          12,979
     Minority interest in Partnership                12,008          19,070
                                                   --------        --------

       Total Liabilities                            419,867         375,759
                                                   --------        --------

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, 1999 and 1998                 68,750          68,750
     Common stock, $.01 par value,
       50,000,000 shares authorized,
       37,308,523 and 36,438,535 shares
       issued and outstanding at December 31,
       1999 and 1998, respectively                      373             364
     Additional paid-in capital                     416,354         407,833
     Treasury stock, at cost, 557,300 shares         (3,883)
     Unearned directors' and officers'
       compensation                                  (2,375)         (2,006)
     Predecessor basis assumed                       (1,264)         (1,264)
     Distributions in excess of net earnings        (65,703)        (42,413)
                                                   --------        --------
       Total Shareholders' Equity                   412,252         431,264
                                                   --------        --------

     Total Liabilities and Shareholders' Equity    $832,119        $807,023
                                                   ========        ========

</TABLE>





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

                                       30


<PAGE>



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

<TABLE>
<CAPTION>
                                                   For the Years Ended December 31,
                                                     1999        1998         1997
                                                   --------    --------      -------
<S>                                                <C>         <C>          <C>
Revenue:
Percentage lease revenues                          $116,459    $106,661      $70,478
Gain (loss) on sale of hotel properties               1,130        (705)         666
Other income                                            835         775          617
                                                   --------    --------      -------
     Total Revenue                                  118,424     106,731       71,761
                                                   --------    --------      -------

Expenses:
Real estate and personal property taxes              12,756      10,411        6,688
Depreciation and amortization                        38,856      32,665       20,214
Interest                                             27,947      21,587       12,601
Amortization of loan costs                            1,210         834        1,013
General and administrative                            5,150       4,650        4,142
Amortization of unearned directors' and
     officers' compensation                             891         331           92
Rental expense                                        1,346         969          566
Merger expense                                                    2,197
                                                   --------    --------      -------
     Total Expenses                                  88,156      73,644       45,316
                                                   --------    --------      -------

Income before extraordinary charges
    and minority interest                            30,268      33,087       26,445

Extraordinary charges
    Change in accounting for corporate
         organizational costs                           133
    Write-off of deferred financing fees                                       1,984
                                                   --------    --------      -------

Income before minority interest                      30,135      33,087       24,461

Minority interest                                       819       1,492          918
                                                   --------    --------      -------

Net income                                           29,316      31,595       23,543

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

Net income applicable to common
    shareholders                                   $ 22,785    $ 28,221      $23,543
                                                   ========    ========      =======

Net income per common share, basic and diluted:

        Income before extraordinary item           $    .61    $    .78      $   .88
        Extraordinary charge                                                     .06
                                                   --------    --------      -------

         Net income                                $    .61    $    .78      $   .82
                                                   ========    ========      =======

Weighted average number of common
     shares and units outstanding - diluted          38,570      38,001       29,963
                                                   ========    ========      =======
</TABLE>

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

                                       31


<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, 1996                                    23,693,278    $237     $238,748

Issuance of common shares, net of
    offering expenses                                           11,082,300     111      144,428

Issuance of common shares to officers
    and directors through exercise of
   of stock options                                                 90,000       1        1,124

Amortization of unearned officers'
    and directors' compensation

Net income applicable to common
    shareholders

Distributions ($1.14 per share)

Adjustments to minority interest from
    issuance of common shares and
    partnership units                                                                     2,834
                                         ---------   -------   -----------   -------   -----------   -------   --------
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

<CAPTION>
                                                          Unearned
                                                          Directors'    Predecessor   Disbributions
                                                        and Officers'      Basis      In Excess of
                                                        Compensation      Assumed     Net Earnings     Total
                                                        -------------   -----------   -------------   --------
<S>                                                      <C>            <C>           <C>             <C>

Balance at December 31, 1996                              $ (366)        $(1,264)      $(14,404)      $222,951

Issuance of common shares, net of
    offering expenses                                                                                  144,539

Issuance of common shares to officers
    and directors through exercise of
   of stock options                                                                                      1,125

Amortization of unearned officers'
    and directors' compensation                               92                                            92

Net income applicable to common
    shareholders                                                                         23,543         23,543

Distributions ($1.14 per share)                                                         (34,912)       (34,912)

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

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
</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>
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                                  98,820       1          987

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

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)
                                         ==========   =======   ==========    ====     ========      =======   =======
<CAPTION>
                                                          Unearned
                                                          Directors'    Predecessor   Disbributions
                                                        and Officers'      Basis      In Excess of
                                                        Compensation      Assumed     Net Earnings     Total
                                                        -------------   -----------   -------------   --------
<S>                                                     <C>             <C>           <C>             <C>
Issuance of common shares upon
    redemption of Units                                                                                    555

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

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
                                                         =======         =======       ========       ========
</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,
                                                                  1999         1998        1997
                                                                -------      -------      -------
<S>                                                              <C>          <C>         <C>
Cash flows from operating activities:

Net income                                                      $29,316      $31,595      $23,543
Adjustment to reconcile net income to net cash
   provided by operating activities:
        (Gain) loss on sale of hotel properties                  (1,130)         705         (666)
        Depreciation and amortization                            38,856       32,665       20,214
        Amortization of loan costs                                1,210          834        1,013
        Write-off of debt costs                                                             1,984
        Change in accounting for corporate
            organizational costs                                    133
        Amortization of unearned directors' and
            officers' compensation                                  891          331           92
        Directors' compensation                                      80           55
        Minority interest                                           819        1,492          918
        Changes in assets and liabilities:
            Due from Lessees                                      1,164         (363)      (2,548)
            Note receivable                                         (99)         669       (3,884)
            Deferred expenses                                         5          (11)          (8)
            Deposits and other assets                            (1,089)         503          215
            Accounts payable and accrued expenses                 1,359          911        9,529
                                                                -------      -------      -------
                 Net cash flow provided by operating
                     activities                                  71,515       69,386       50,402
                                                                -------      -------      -------
Cash flows from investing activities:

Acquisitions of hotel properties                                (57,188)    (175,576)    (337,069)
Improvements and additions to hotel properties                  (32,800)     (25,998)     (18,083)
Cash paid for franchise applications                               (234)        (215)      (2,144)
Proceeds from sale of hotel properties                           28,323        8,250       43,207
                                                                -------      -------      -------
                 Net cash flow used in investing activities     (61,899)    (193,539)    (314,089)
                                                                -------      -------      -------
Cash flows from financing activities:

Gross proceeds from public offering of common stock                           20,145      153,388
Gross proceeds from public offering of preferred stock                        68,750
Purchase of Treasury stock                                       (2,815)
Payment of offering expenses                                        (30)      (3,745)      (8,849)
Proceeds from exercise of stock options                                          112        1,125
Distributions paid                                              (54,305)     (48,262)     (32,656)
Borrowings under revolving credit facility                      166,150      179,475      326,411
Payments on revolving credit facility                          (210,250)     (89,725)    (256,885)
Borrowings under CMBS credit facility                                                      88,000
Payments under CMBS credit facility                              (2,351)      (2,195)      (1,717)
Borrowings under GMAC Term Loan                                  97,020
Payments on GMAC Term Loan                                         (459)
Payments on debt assumed                                           (260)        (160)
Cash paid for loan costs                                         (2,286)         (28)      (5,067)
Payments on capital lease obligations                               (69)          (4)          (2)
                                                                 -------      -------     -------
                 Net cash flow provided by (used in)
                     financing activities                        (9,655)     124,363      263,748
                                                                -------      -------      -------
Net increase (decrease) in cash and cash
   equivalents                                                      (39)         210           61

Cash and cash equivalents at beginning of year                      400          190          129
                                                                -------      -------      -------
Cash and cash equivalents at end of year                        $   361      $   400      $   190
                                                                =======      =======      =======

Supplemental disclosure of cash flow information --
   Interest paid                                                $27,537      $20,947      $12,226
                                                                =======      =======      =======
</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 in the  business of  acquiring  equity
interests in hotel  properties.  The Company 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, 1999 owned
an approximate 96.6% interest in the Partnership.

As of December  31,  1999,  the  Partnership  or its  affiliates  owned 99 hotel
properties,  with a total of 12,618 rooms in 35 states.  The  Partnership or its
affiliates,  under operating leases providing for the payment of percentage rent
(the  "Percentage  Leases"),  leased 78 of the Company's hotels to affiliates of
Interstate  Hotels  Corporation  (formerly named Interstate  Hotels  Management,
Inc.)  ("IHC"),  which was  recently divested from Wyndham International,  Inc.,
formerly  known  as  Patriot  American  Hospitality,  Inc.  ("Wyndham").  IHC is
referred to herein as the  "Interstate  Lessee."  All  payments  due under these
Percentage Leases are guaranteed by  Interstate Hotels,  L.L.C., a subsidiary of
IHC, and  IHC  (except for  three  hotels where  Wyndham  rather than IHC is 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 IHC 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 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  are
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.

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.

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

                                       35


<PAGE>


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



2.     Summary of Significant Accounting Policies, Continued

property is adjusted based on the discounted future cash flows. 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 the following at December
31, 1999 and 1998:
<TABLE>
<CAPTION>
                                                 1999             1998
                                                ------           ------
                                                    (in thousands)
       <S>                                      <C>              <C>
       Initial franchise fees                   $3,712           $3,712
       Loan costs                                6,694            4,413
       Other                                                        260
                                                ------           ------
                                                10,406            8,385
       Accumulated amortization                 (3,387)          (2,072)
                                                -------          ------

                                                $7,019           $6,313
                                                ======           ======
</TABLE>

Amortization of franchise fees is computed using the  straight-line  method over
the remaining lives of the franchise  agreements  which range up to 20 years and
is included in depreciation and amortization expense. Amortization of loan costs
is computed using the straight-line method over the term of the related debt. In
1997, the Company expensed  approximately $2.0 million of unamortized loan costs
relating to debt that was replaced in 1997.

Deposits and Other Assets

Deposits include escrow deposits and other prepayments relating to the potential
acquisition of hotel properties.

Interest Rate Swap Agreements

The Company has entered into interest rate swap  agreements to reduce the impact
of changes in interest  rates on its  floating  rate debt.  The  agreements  are
contracts to exchange  floating rate  interest  payments for fixed rate interest
payments  periodically  over the life of the agreements  without the exchange of
the  underlying  notional  amounts.   The  notional  amounts  of  interest  rate
agreements  are used to measure  the  interest to be received or paid and do not
represent  the amount of  exposure  to credit  loss.  The  differential  paid or
received on interest rate  agreements is recognized as an adjustment to interest
expense.

                                       36


<PAGE>


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



2.     Summary of Significant Accounting Policies, Continued

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 (Note 5).

Net Income Per Common Share

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards No. 128, "Earnings per Share" (SFAS 128), which
changed  the  computation  and  presentation  of  earnings  per share.  SFAS 128
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, 1999,
1998 and 1997, respectively.
<TABLE>
<CAPTION>
                                                               For the Years Ended December 31,
                         -----------------------------------------------------------------------------------------------------------
                                         1999                                1998                                1997
                         ----------------------------------- ----------------------------------- -----------------------------------
                            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                    $22,785       37,225      $.61      $28,221       36,073      $.78      $23,543       28,773     $.82
Dilutive effect of
  potential conversion
  of partnership units
  and elimination of
  minority interest            819        1,345                  1,492        1,907                    918        1,129
Dilutive effect of stock
  options outstanding
  using the treasury
  stock method                                                                   21                                  61
                           -------       ------      ----     -------        ------      ----      -------       ------     ---

Net income applicable to
  common shareholders-
  diluted                  $23,604       38,570      $.61     $29,713        38,001      $.78      $24,461       29,963     $.82
                           =======       ======      ====     =======        ======      ====      =======       ======     ====
</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."

                                       37


<PAGE>


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



2.     Summary of Significant Accounting Policies, Continued

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  tax  purposes in the
estimated useful lives and methods used to compute  depreciation.  Distributions
made to shareholders in 1999 and 1998 are considered to be approximately 33% and
26% return of capital, respectively, for federal income tax purposes.

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:
<TABLE>
<CAPTION>

                                               1999                  1998
                                             --------              --------
                                                     (in thousands)
<S>                                           <C>                   <C>
       Land                                  $103,315              $102,897
       Buildings and improvements             695,923               655,300
       Furniture and equipment                112,817                97,556
       Construction in progress                 3,366                 2,854
                                             --------              --------
                                              915,421               858,607
       Less accumulated depreciation         (100,884)              (68,475)
                                             --------              --------

                                             $814,537              $790,132
                                             ========              ========
</TABLE>



                                       38


<PAGE>


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



3.     Investment in Hotel Properties, Continued

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

During 1999 and 1998, the Company acquired the following types of hotels for the
approximate amounts indicated:
<TABLE>
<CAPTION>
                                            1999                           1998
                                -----------------------------  -----------------------------
                                No. of Hotels  Purchase Price  No. of Hotels  Purchase Price
                                -------------  --------------  -------------  --------------
                                               (in thousands)                 (in thousands)
<S>                              <C>            <C>             <C>            <C>
  Mid-scale Limited Service                                         2           $ 20,100
  Upscale Extended Stay               2           $56,676           5             68,350
  Upscale All-Suite                                                 9             96,996
                                      -           -------          --           --------

                                      2           $56,676          16           $185,446
                                      =           =======          ==           ========
</TABLE>

The above acquisitions were accounted for as purchases,  and the results of such
acquisitions are included in the Company's consolidated statements of operations
from the dates of acquisition.

During  1999,  the  Partnership   sold  five  hotels  (Hampton  Inn,   Nashville
(Brentwood),   Tennessee;   Comfort  Inn,  Enterprise,   Alabama;  Hampton  Inn,
Southaven,  Mississippi;  Hampton Inn, Destin,  Florida;  Hampton Inn,  Traverse
City,  Michigan) 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. The sales price was paid in cash.

During  January  2000,  the  Partnership  sold a Residence Inn hotel in Madison,
Wisconsin to a third party for an aggregate  sales price of  approximately  $4.2
million.  The Company realized a loss of  approximately  $280,000 as a result of
the sale. The sales price was paid in cash.

4.     Notes Receivable

Notes receivable consist of the following at December 31:
<TABLE>
<CAPTION>
                                                      1999             1998
                                                     ------           ------
                                                         (in thousands)
<S>                                                  <C>               <C>
Hudson Hotels Properties Corporation, a
    subsidiary of Hudson Hotels Corporation          $2,634           $2,884

Rosemont Hospitality Group, L.L.C.                      141

Officers of the Company                                 539              331
                                                     ------           ------

                                                     $3,314           $3,215
                                                     ======           ======
</TABLE>



                                       39


<PAGE>


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



4.     Notes Receivable, Continued

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 secured by two million  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. In 1999, Hudson
defaulted  on its  obligation  to make  three  of the four  scheduled  principal
payments on the outstanding  balance of the note,  although Hudson  continues to
make regular  interest  payments in accordance  with the terms of the promissory
note. The Company has accelerated the full loan amount of the note due upon such
default in accordance with the terms of the note, but has agreed not to exercise
any remedies  with respect to such default  until at such time the Company gives
Hudson one day written notice thereof.  The Company is currently  discussing the
restructuring  of the note with Hudson,  in  connection  with  Hudson's  overall
financial  restructuring.  The  Company's  management  does not  believe  that a
write-off or reduction in principal is appropriate at this time.

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 note  receivable in the amount of $140,878 as  reimbursement
for expenses  incurred in regard to the proposed  acquisition of the hotel.  The
note bears interest at 10% and is due on December 31, 2000.

In January  1998 and 1999,  the Company  advanced  loans to its  officers in the
amount of $330,508 and $308,803,  respectively,  for taxes  relating to 1997 and
1998  bonuses  taken in shares of the  Company's  common  stock,  $.01 par value
("Common  Stock"),  in lieu of cash,  of which  $100,764  was repaid in February
1998.  At December 31,  1999,  the  aggregate  amount of notes  receivable  from
officers of the Company is $538,547. In January 2000, the Company advanced loans
to its  officers  in the amount of $94,413 for taxes  relating  to 1999  bonuses
taken in Common Stock in lieu of cash.  All loans are  non-interest  bearing and
have an  original  term of one year,  but have  historically  been  extended  an
additional year for each year that they are not repaid.  However,  all loans are
due in full upon termination of employment or upon retirement.

5.     Debt

Debt is comprised of the following at December 31:
<TABLE>
<CAPTION>
                                                  1999                1998
                                                --------            --------
                                                       (in thousands)
            <S>                                 <C>                 <C>
            Revolving credit facilities         $192,500            $236,600
            Commercial Mortgage Bonds             81,738              84,088
            GMAC Term Loan                        96,561
            Mortgage notes payable                10,376              10,637
            Other                                                         69
                                                --------            --------

                                                $381,175            $331,394
                                                ========            ========
</TABLE>



                                       40


<PAGE>


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



5.     Debt, Continued

In February 1997, the Company, through a subsidiary, issued $88 million of rated
Commercial  Mortgage Bonds (the "Bonds") in a private  placement  transaction as
follows:

<TABLE>
<CAPTION>
              Initial
             Principal      Interest           Stated
  Class       Amount          Rate            Maturity        Rating
  -----    -------------    --------     -----------------    ------
  <S>       <C>             <C>          <C>                  <C>
    A      $27.4 million      6.825%     November 20, 2006     AA
    B      $50.6 million      7.370%     December 20, 2015     A
    C      $10.0 million      7.580%     February 20, 2017     BBB
</TABLE>

The initial  combined  interest  rate for all three issues of Bonds was fixed at
7.22%.  The  combined  interest  rate on the  outstanding  balances on all three
issues of Bonds at December  31,  1999 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.  Twenty-three  hotel
properties with a carrying value of approximately $135.5 million at December 31,
1999 and their respective Percentage Leases collateralize the Bonds.

Aggregate annual principal payments for the next five years at December 31, 1999
for the Bonds are as follows (in thousands):

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

                        2000                  $2,518
                        2001                   2,698
                        2002                   2,890
                        2003                   3,096
                        2004                   3,317

The Company's  $219.5 million  unsecured line of credit with Bank One (the "Bank
One Line") bears interest at a variable rate of LIBOR plus 1.5%,  1.75%,  2.00%,
2.25% or 2.50% as determined  by the  Company's  percentage of total debt to the
total value of the Company's  investment in hotel properties,  as defined in the
loan agreement (the "Percentage"). The Percentage is reviewed quarterly, and the
interest rate is adjusted as necessary.  At December 31, 1999, the interest rate
on the Bank One Line was LIBOR (5.82% at December 31, 1999) plus 2.50%. The Bank
One Line expires in October 2000.

The Company's $10,000,000 line of credit with the National Bank of Commerce (the
"NBC Credit  Line")  bears  interest at the bank's prime rate (8.50% at December
31, 1999) and is unsecured.  The NBC Credit Line has a three-year term, expiring
in September 2000.

In March 1999, the Company obtained a $25 million  unsecured line of credit from
Bank of America,  formerly NationsBank (the "Bank of America Line"). The Bank of
America Line bears interest at a variable rate of LIBOR plus 1.5%, 1.75%, 2.00%,
2.25% or 2.50% as determined by the Company's  percentage of total debt to total
value of the Company's  investment in hotel  properties,  as defined in the loan
agreement.  The  percentage  is reviewed  quarterly,  and the  interest  rate is
adjusted as

                                       41


<PAGE>


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





5.     Debt, Continued

necessary.  At December 31, 1999,  the interest rate on the Bank of America Line
was LIBOR  (5.82% at December  31,  1999) plus 2.50%.  The Bank of America  Line
expires in October 2000.

In December 1997, the Company  entered into an interest rate swap agreement with
a financial  institution  on a notional  principal  amount of $75  million.  The
agreement effectively fixes the interest rate on floating rate debt at a rate of
5.90%  plus the  Percentage.  In May 1999,  the  Company  entered  into a second
interest  rate  swap  on a  notional  principal  amount  of $40  million,  which
effectively  fixes the  interest  rate on floating  rate debt at a rate of 5.24%
plus the Percentage. These swap agreements will expire in October 2000.

In June 1999, the Company  financed  $97,020,000  with GMAC Commercial  Mortgage
Company  (the "GMAC Term  Loan") at an  interest  rate of 8.37%.  The  principal
amount of the loan is amortized  over 25 years,  with the unpaid balance due and
payable in July 2009.  The proceeds  from this loan were used to repay  existing
debt under the Bank One Line. In  connection  with this  transaction,  19 of the
Company's hotel properties with a carrying value of  approximately  $181 million
collateralize  the loan.  The  agreement  requires a  quarterly  deposit  into a
separate room renovation  account for the amount by which 4% of room 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,  1999,  actual  expenditures
exceeded the amounts required.

In connection with the purchase of a Hampton Inn hotel in San Antonio,  Texas in
April 1998,  the  Partnership  assumed a mortgage  note payable with a principal
balance of approximately $6.5 million. The note bears interest at 10% and is due
in monthly  principal and interest  installments of approximately  $66,000.  The
note is due September 1, 2015. The hotel securing this note has a carrying value
of $12.5 million at December 31, 1999.

In  connection  with the  purchase of a Residence  Inn hotel in Boise,  Idaho in
April 1998,  the  Partnership  assumed a mortgage  note payable with a principal
balance of  approximately  $4.3 million.  The note bears  interest at a variable
rate which,  as of  December  31,  1999,  was  approximately  8.6% and is due in
monthly principal and interest  installments of approximately  $39,000. The note
is due December 1, 2016 and contains a prepayment  penalty.  The hotel  securing
this note has a carrying  value of  approximately  $7.5  million at December 31,
1999.

Aggregate  principal  payments at December  31, 1999 for the next five years for
the mortgage notes payable described above are as follows (in thousands):

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

                        2000                  $286
                        2001                   314
                        2002                   345
                        2003                   379
                        2004                   416



                                       42


<PAGE>


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



5.     Debt, Continued

The weighted  average  interest  rate on the  Company's  outstanding  borrowings
during  1999 and 1998 was 7.74% and 7.46%,  respectively.  Fees of .50% are paid
quarterly  on the  unused  portion  of the Bank One Line and the Bank of America
Line and .20% on the NBC  Credit  Line.  The  carrying  amount of the  Company's
borrowings on its revolving credit facilities approximates fair value due to the
Company's ability to obtain such borrowings at comparable interest rates.

Prior to its 1998 annual  shareholders  meeting,  the Company's  Charter limited
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 limitation was deleted by shareholder  vote on May 14, 1998.
The Company's  Board of Directors has  subsequently  adopted a policy  currently
imposing the same limitations previously imposed by the Charter.

The Bank One Line and the Bank of America Line agreements require the Company to
maintain  certain debt  coverage  ratios and certain  levels of cash flow,  with
which the Company was in  compliance  at December  31, 1999.  Additionally,  the
agreements  require a quarterly deposit into a separate room renovation  account
for the amount by which 4% of room 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 years
ended  December  31, 1999 and 1998,  actual  expenditures  exceeded  the amounts
required.

6.     Commitments and Related Party Transactions

All of the hotels are operated  under  franchise  agreements and are licensed as
Hampton Inn hotels (50),  AmeriSuites  hotels (19),  Residence  Inn hotels (12),
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  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 Lessees have future lease  commitments  to the Company under the  Percentage
Leases for various terms  extending  through 2014.  Minimum future rental income
(Base  Rents)  under  these  non-cancelable  operating  leases is as follows (in
thousands):

                     Year                     Amount

                     2000                     $ 78,042
                     2001                       77,263
                     2002                       77,263
                     2003                       77,263
                     2004                       77,263
                     2005 and thereafter       509,757
                                              --------

                                              $896,851
                                              ========

The Company earned Base Rents of $77.0 million,  $65.9 million and $38.3 million
and Percentage Rents in excess of Base Rents of $39.5 million, $40.8 million and
$32.2 million, respectively, for the

                                       43


<PAGE>


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



6.     Commitments and Related Party Transactions, Continued

years ended December 31, 1999,  1998 and 1997.  The Percentage  Lease revenue is
based on a  percentage  of gross room  revenue,  and,  if  applicable,  food and
beverage revenue of the hotels. 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, 2000,
ninety-three  of the  Percentage  Leases  were  adjusted,  resulting  in a 1.92%
increase in both Base Rent and threshold room revenue.

At December  31,  1999,  the Lessees  owed the Company  $5,124,000  representing
fourth quarter  Percentage  Rent. All of the amounts due were collected prior to
January 31, 2000.

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 $32.8
million, $26.0 million, and $18.1 million in 1999, 1998, and 1997, respectively,
were made to the hotel  properties,  including those required by the franchisors
at the  acquisition  of the  property.  In 2000,  the  Company  expects  to fund
approximately  $11.5 million of capital  improvements  for the hotel  properties
owned at December 31, 1999.

The Company has  commitments  under  operating land leases through  December 31,
2062, at eight hotel properties for payments as follows: 2000 -- $757,738;  2001
-- $769,461; 2002 -- $795,888; 2003 -- $798,388; 2004 -- $801,138; thereafter --
$11.1 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 $538,547 of  non-interest  bearing notes
receivable  from its officers for taxes  relating to 1997 and 1998 bonuses taken
in Common Stock in lieu of cash.

7.     Supplemental Disclosure of Noncash Investing and Financing Activities

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  of  limited  partnership  interest  in the
partnership  ("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.

                                       44


<PAGE>


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




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

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.

In 1997,  the Company  issued  90,000  shares of Common Stock to an officer upon
exercise of options; 1,021,062 Units valued at $14.7 million were issued as part
of the total  acquisition  cost of six hotel  properties;  and $10.6  million in
distributions to common  shareholders and limited partners had been declared but
not paid at December 31, 1997.

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 in the  Partnership  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,
1999 and 1998 were 1,284,774 and 1,916,903, respectively. The total market value
of these Units at December 31, 1999,  based on the last reported  sales price of
the common stock on the NYSE of $6.75, was approximately $8.7 million.

In October 1999, the Company's  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, 1999,
557,300 shares had been repurchased at a cost of $3.9 million.

                                       45


<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  Company's  Non-Employee  Directors  Stock  Option 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 grant is 50,000,  which
may only be awarded in the form of stock options.

Stock Options

All options have 8 to 10 year  contractual  terms and vest ratably over 5 years,
with the  exception of 100,000  stock  options  granted in 1998, of which 20,000
vested immediately with the remainder to vest ratably over 4 years. A summary of
the  Company's  stock  options as of December  31,  1999,  1998 and 1997 and the
changes during the years are presented below:
<TABLE>
<CAPTION>
                                        1999                       1998                       1997
                              ------------------------   ------------------------   ------------------------

                                              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                      568,000       $12.68       519,000       $12.49       606,000       $12.49
Granted                           14,000       $ 9.24       118,000       $13.40         3,000       $13.50
Exercised                                                    (9,000)      $12.50       (90,000)      $12.50
Forfeited                                                   (60,000)      $12.50
                                 -------       ------       -------       ------       -------       ------

Outstanding at end of year       582,000       $12.60       568,000       $12.68       519,000       $12.49

Exercisable at end of year       505,000       $12.55       383,000       $12.56       279,000       $12.49
</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 12/31/99       Life      Price      at 12/31/99      Life       Price
------------------------      -------------   --------    --------   -------------   ---------   --------
<S>                           <C>             <C>         <C>        <C>             <C>         <C>

$8.69 -- $13.69                  582,000         3.25      $12.60       505,000        2.67       $12.55
</TABLE>

The Company applies APB Opinion No. 25 and related interpretations in accounting
for the Plans. FASB Statement No. 23, "Accounting for Stock-Based  Compensation"
("SFAS 123"), was issued by the FASB in 1995 and, if fully adopted,  changes the
methods for  recognition  of cost on plans similar to the Plan.  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.

                                       46


<PAGE>


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



9.     Stock Based Compensation Plans, Continued

The fair value of each option granted during 1999, 1998 and 1997 is estimated on
the  date of  grant  using  the  Black-Scholes  option-pricing  model  with  the
following  assumptions:  (1) dividend of $1.24 for 1999 and 1998,  and $1.14 for
1997; (2) expected  volatility of .19 for 1999 and 1998, and .11 for 1997; (3) a
risk-free  interest rate of 6.0% for 1999, 5.2% for 1998, and 6.5% for 1997; and
(4) expected life of ten years for 1999, eight years for 1998, and ten years for
1997.

Had  compensation  cost  for the  Company's  1999,  1998  and  1997  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 1999,  1998
and 1997 would have decreased less than 1%.

The effects of applying SFAS 123 in this pro forma disclosure are not indicative
of  future  amounts.  SFAS 123  does not  apply  to  awards  prior to 1995,  and
additional 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,  1999,  1998 and 1997 and the changes  during the
years are presented below:

<TABLE>
<CAPTION>

                                                  1999                        1998                        1997
                                         -------------------------   -------------------------   -------------------------
                                                        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            193,500      $12.92        40,000         $11.41        40,000       $11.41
Granted:
    With 5 year pro rata vesting             91,400      $ 9.69        99,000         $13.12
    With 4 year pro rata vesting                                       16,000         $13.56
    With 3 year pro rata vesting             38,400      $ 9.75        42,000         $13.50
    Vest 100% at grant date                                             4,000         $13.56
                                            -------      ------       -------                       ------       ------

Total granted                               129,800      $ 9.71       161,000         $13.27
Vested to former employee                                              (1,500)
Forfeited                                                              (6,000)        $12.25
                                            -------      ------       -------         ------        ------       ------

Outstanding at end of year                  323,300      $11.64       193,500         $12.92        40,000       $11.41

Vested at end of year                        71,300      $12.42        29,000         $11.27        17,000       $10.67
</TABLE>

In January 2000,  71,450  shares of restricted  stock were issued to officers of
the Company at a price of $6.75 per share, to vest ratably over 3 to 5 years.

                                       47


<PAGE>


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



10.    Significant Lessee Information

As discussed in Note 1, the Company's  Lessees each  guarantee  Percentage  Rent
Leases relating to hotels  accounting for more than 20% of the Company's assets.
The  following  financial  information  as of December 31, 1999 is presented for
each Lessee:
<TABLE>
<CAPTION>
                                                         IHC          Prime
                                                       ------      ----------
    <S>                                                <C>         <C>

    Miscellaneous Data:

    Number of hotels owned, managed or leased             158             209
    Number of rooms owned, managed or leased           29,379          27,839

    Balance Sheet Data (in thousands):

       Investment in hotel real estate                $12,623      $1,227,497
       Cash and short-term investments                 22,440          15,502
       Total assets                                   142,459       1,320,939
       Total debt                                                     549,032
       Shareholders' equity                            60,006         630,849

    Income Statement Data (in thousands):

       Total revenue                                 $240,354        $552,732
       Net income (loss)                               (7,617)         34,882
</TABLE>



                                       48


<PAGE>



                                EQUITY INNS, INC.
            SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION
                             AS OF DECEMBER 31, 1998
                                 (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
-----------------------             -------- ------------ --------- ---- ------------ ---------- -------- ------------ ----------
Hampton Inn- Albany, New York       $    953  $  9,897     $   802          $   262     $   459  $    953    $10,159   $  1,261
Hampton Inn-Cleveland, Ohio              820     4,428         217              544         520       820      4,972        737
Hampton Inn-College Station, Texas       656     4,655         671              754         594       656      5,409      1,265
Hampton Inn-Columbus, Georgia            603     2,591       1,073              646         247       603      3,237      1,320
Hampton Inn-Ft. Worth, Texas             385     1,754         896              462         424       385      2,216      1,320
Hampton Inn-Louisville, Kentucky         395     2,406         919              712         445       395      3,118      1,364
Hampton Inn-Sarasota, Florida            553     3,389         753              508         412       553      3,897      1,165
Hampton Inn-Ann Arbor, Michigan          565     4,499         506              500         680       565      4,999      1,186
Hampton Inn-Gurnee, Illinois             630     3,397         277              989       1,094       630      4,386      1,371
Comfort Inn-Arlington, Texas             425     6,387         582              580         625       425      6,967      1,207
Residence Inn-Eagan, Minnesota           540     8,130         652            1,124         861       540      9,254      1,513
Residence Inn-Tinton Falls,
   New Jersey                                    7,711         419              905         622                8,616      1,041
Hampton Inn-Milford, Connecticut         759     5,689         467              781       1,099       759      6,470      1,566
Hampton Inn-Meriden, Connecticut         648     3,226         435              724         758       648      3,950      1,193
Hampton Inn-Beckley, West
   Virginia                            1,876     5,557         402              252         384     1,876      5,809        786
Holiday Inn-Bluefield, West
   Virginia                            1,661     6,141         342              967       1,202     1,661      7,108      1,544
Hampton Inn-Gastonia, North
   Carolina                            1,651     4,741         358              264         696     1,651      5,005      1,054
Hampton Inn-Morgantown, West
   Virginia                            1,573     4,311         324  $ 4         141         479     1,577      4,452        803
Holiday Inn-Oak Hill, West
   Virginia                              269     3,727          85            1,628       1,153       269      5,355      1,238
Holiday Inn Express-Wilkesboro,
   North Carolina                        269     2,778         177              374         446       269      3,152        623
Hampton Inn-Naperville, Illinois         678     6,455         396              666         942       678      7,121      1,338
Hampton Inn-State College,
   Pennsylvania                          718     7,310         525              405         659       718      7,715      1,184
Comfort Inn-Rutland, Vermont             359     3,683         354              355         292       359      4,038        646
Hampton Inn-Scranton, Pennsylvania       403     7,017         720              188         281       403      7,205      1,001
Residence Inn-Omaha, Nebraska            953     2,650         162    6       1,174         756       959      3,824        918
Hampton Inn-Fayetteville, North
   Carolina                              403     5,043         148   17         611         812       420      5,654        960
Hampton Inn-Indianapolis, Indiana      1,207     6,513         126              597       1,117     1,207      7,110      1,243
Hampton Inn-Jacksonville Florida         403     4,793         126              444       1,217       403      5,237      1,343
Holiday Inn-Mt. Pleasant, South
   Carolina                            1,205     7,874         247              510         816     1,205      8,384      1,063
Comfort Inn-Jacksonville Beach,
   Florida                               849     7,307         371    2       1,879       1,248       851      9,186      1,619
Hampton Inn-Austin, Texas                500     6,659         375    6         545         767       506      7,204      1,142
Hampton Inn-Garland, Texas               375     4,959         450    3         336         704       378      5,295      1,154
Hampton Inn-Knoxville, Tennessee         617     3,871         232              299         853       617      4,170      1,085
Hampton Inn-Glen Burnie, Maryland                5,075         322              526         772                5,601      1,094
Hampton Inn-Detroit, Michigan          1,207     5,785         526              476         382     1,207      6,261        908
Homewood Suites-Hartford,
   Connecticut                         2,866     7,660         915              680         678     2,866      8,340      1,593
Residence Inn-Madison, Wisconsin         700     2,879         356              507         514       700      3,386        870
Holiday Inn-Winston-Salem, North
   Carolina                            1,350     3,124         639            3,300       1,031     1,350      6,424      1,670
Hampton Inn-Scottsdale, Arizona        2,227     6,566         723              206          17     2,227      6,772        740
Hampton Inn-Chattanooga, Tennessee     1,475     6,824         752              430         380     1,475      7,254      1,132
Homewood Suites-San Antonio, Texas       907     6,661       1,029               44          35       907      6,705      1,064
Residence Inn-Burlington, Vermont        678     6,677         342              896         658       678      7,573      1,000
Homewood Suites-Phoenix, Arizona                 7,086         902            1,633           0                8,719        902
Residence Inn-Colorado Springs,
   Colorado                            1,350     7,638         740              457         578     1,350      8,095      1,318
Residence Inn-Oklahoma City,
   Oklahoma                            1,450     8,921         850              872         809     1,450      9,793      1,659
Residence Inn-Tucson, Arizona            832     7,078         705              619         376       832      7,697      1,081
Hampton Inn-Savannah, Georgia            705     4,186         334              401         742       705      4,587      1,076
Hampton Inn-Norfolk, Virginia                    5,092         520              224         517                5,316      1,037
Hampton Inn-Pickwick, Tennessee          370     1,484         263               82         131       370      1,566        394
Hampton Inn-Overland Park, Kansas        906     5,931         330              591         710       906      6,522      1,040
Hampton Inn-Addison, Texas             2,981     6,336         810              692         710     2,981      7,028      1,520
Hampton Inn-Atlanta-Northlake,
   Georgia                                       6,905         600              295         706                7,200      1,306
Hampton Inn-Birmingham (Mountain
   Brook), Alabama                               7,988         687              661         626                8,649      1,313
Hampton Inn-Birmingham (Vestavia),
   Alabama                             1,057     5,162         541              307         641     1,057      5,469      1,182
Hampton Inn-Chapel Hill, North
   Carolina                            1,834     6,504         725              398         681     1,834      6,902      1,406
Hampton Inn-Charleston, South
   Carolina                              712     5,219         516              278         483       712      5,497        999

<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         $ 12,373    $  2,716       $  9,657         1986        5-40 Yrs.
Hampton Inn-Cleveland, Ohio             6,529       1,339          5,190         1987        5-40 Yrs.
Hampton Inn-College Station, Texas      7,330       1,604          5,726         1986        5-40 Yrs.
Hampton Inn-Columbus, Georgia           5,160       1,515          3,645         1986        5-40 Yrs.
Hampton Inn-Ft. Worth, Texas            3,921       1,080          2,841         1987        5-40 Yrs.
Hampton Inn-Louisville, Kentucky        4,877       1,833          3,044         1986        5-40 Yrs.
Hampton Inn-Sarasota, Florida           5,615       1,351          4,264         1987        5-40 Yrs.
Hampton Inn-Ann Arbor, Michigan         6,750       1,559          5,191         1986        5-31 Yrs.
Hampton Inn-Gurnee, Illinois            6,387       1,379          5,008         1988        5-31 Yrs.
Comfort Inn-Arlington, Texas            8,599       1,881          6,718         1985        5-31 Yrs.
Residence Inn-Eagan, Minnesota         11,307       2,259          9,048         1988        5-31 Yrs.
Residence Inn-Tinton Falls,
   New Jersey                           9,657       1,639          8,018         1988        5-31 Yrs.
Hampton Inn-Milford, Connecticut        8,795       1,730          7,065         1986        5-31 Yrs.
Hampton Inn-Meriden, Connecticut        5,791       1,139          4,652         1988        5-31 Yrs.
Hampton Inn-Beckley, West
   Virginia                             8,471       1,321          7,150         1992        5-31 Yrs.
Holiday Inn-Bluefield, West
   Virginia                            10,313       1,628          8,685         1980        5-31 Yrs.
Hampton Inn-Gastonia, North
   Carolina                             7,710       1,275          6,435         1989        5-31 Yrs.
Hampton Inn-Morgantown, West
   Virginia                             6,832       1,110          5,722         1991        5-31 Yrs.
Holiday Inn-Oak Hill, West
   Virginia                             6,862       1,172          5,690         1983        5-31 Yrs.
Holiday Inn Express-Wilkesboro,
   North Carolina                       4,044         827          3,217         1985        5-31 Yrs.
Hampton Inn-Naperville, Illinois        9,137       1,707          7,430         1987        5-31 Yrs.
Hampton Inn-State College,
   Pennsylvania                         9,617       1,678          7,939         1987        5-31 Yrs.
Comfort Inn-Rutland, Vermont            5,043         941          4,102         1985        5-31 Yrs.
Hampton Inn-Scranton, Pennsylvania      8,609       1,487          7,122         1994        5-31 Yrs.
Residence Inn-Omaha, Nebraska           5,701         682          5,019         1985        5-31 Yrs.
Hampton Inn-Fayetteville, North
   Carolina                             7,034       1,234          5,800         1986        5-31 Yrs.
Hampton Inn-Indianapolis, Indiana       9,560       1,551          8,009         1987        5-31 Yrs.
Hampton Inn-Jacksonville Florida        6,983       1,205          5,778         1986        5-31 Yrs.
Holiday Inn-Mt. Pleasant, South
   Carolina                            10,652       1,625          9,027         1988        5-31 Yrs.
Comfort Inn-Jacksonville Beach,
   Florida                             11,656       1,668          9,988         1990        5-31 Yrs.
Hampton Inn-Austin, Texas               8,852       1,295          7,557         1987        5-31 Yrs.
Hampton Inn-Garland, Texas              6,827       1,185          5,642         1986        5-31 Yrs.
Hampton Inn-Knoxville, Tennessee        5,872         880          4,992         1988        5-31 Yrs.
Hampton Inn-Glen Burnie, Maryland       6,695       1,036          5,659         1989        5-31 Yrs.
Hampton Inn-Detroit, Michigan           8,376       1,047          7,329         1989        5-31 Yrs.
Homewood Suites-Hartford,
   Connecticut                         12,799       1,502         11,297         1990        5-31 Yrs.
Residence Inn-Madison, Wisconsin        4,956         651          4,305         1988        5-31 Yrs.
Holiday Inn-Winston-Salem, North
   Carolina                             9,444         585          8,859         1969        5-31 Yrs.
Hampton Inn-Scottsdale, Arizona         9,739       1,109          8,630         1996        5-31 Yrs.
Hampton Inn-Chattanooga, Tennessee      9,861       1,285          8,576         1988        5-31 Yrs.
Homewood Suites-San Antonio, Texas      8,676       1,190          7,486         1996        5-31 Yrs.
Residence Inn-Burlington, Vermont       9,251       1,073          8,178         1988        5-31 Yrs.
Homewood Suites-Phoenix, Arizona        9,621       1,296          8,325         1996        5-31 Yrs.
Residence Inn-Colorado Springs,
   Colorado                            10,763       1,182          9,581         1984        5-31 Yrs.
Residence Inn-Oklahoma City,
   Oklahoma                            12,902       1,388         11,514         1982        5-31 Yrs.
Residence Inn-Tucson, Arizona           9,610       1,050          8,560         1985        5-31 Yrs.
Hampton Inn-Savannah, Georgia           6,368         750          5,618         1968        5-31 Yrs.
Hampton Inn-Norfolk, Virginia           6,353         844          5,509         1990        5-31 Yrs.
Hampton Inn-Pickwick, Tennessee         2,330         268          2,062         1994        5-31 Yrs.
Hampton Inn-Overland Park, Kansas       8,468         803          7,665         1991        5-31 Yrs.
Hampton Inn-Addison, Texas             11,529         949         10,580         1985        5-31 Yrs.
Hampton Inn-Atlanta-Northlake,
   Georgia                              8,506         933          7,573         1988        5-31 Yrs.
Hampton Inn-Birmingham (Mountain
   Brook), Alabama                      9,962       1,032          8,930         1987        5-31 Yrs.
Hampton Inn-Birmingham (Vestavia),
   Alabama                              7,708         772          6,936         1986        5-31 Yrs.
Hampton Inn-Chapel Hill, North
   Carolina                            10,142         985          9,157         1986        5-31 Yrs.
Hampton Inn-Charleston, South
   Carolina                             7,208         704          6,504         1985        5-31 Yrs.
</TABLE>



                                       49


<PAGE>



                                EQUITY INNS, INC.
      SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
                             AS OF DECEMBER 31, 1998
                                 (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>    <C>
Hampton Inn-Colorado Springs,
   Colorado                              803     3,925         411              355         256       803      4,280        667
Hampton Inn-Columbia, South
   Carolina                              650     6,572         628              365         287       650      6,937        915
Hampton Inn-Aurora, Colorado             784     3,344         359              436         260       784      3,780        619
Hampton Inn-Detroit (Madison
   Heights), Michigan                    881     4,304         451              521         223       881      4,825        674
Hampton Inn-Dublin, Ohio                 944     3,612         483              573         518       944      4,185      1,001
Hampton Inn-Kansas City, Kansas          585     4,294         425              305         260       585      4,599        685
Hampton Inn-Little Rock, Arkansas        898     5,520         558              273         492       898      5,793      1,050
Hampton Inn-Memphis (Poplar),
   Tennessee                           1,955     6,547         739              676         654     1,955      7,223      1,393
Hampton Inn-Memphis (Sycamore),
   Tennessee                                     2,751         239              471         423                3,222        662
Hampton Inn-Nashville (Briley),
   Tennessee                                     6,550         569              270         372                6,820        941
Hampton Inn-Richardson, Texas          1,750     5,252         609              423         579     1,750      5,675      1,188
Hampton Inn-St. Louis, Missouri          665     3,775         386              698         728       665      4,473      1,114
Homewood Suites-Germantown,
   Tennessee                           1,011     5,760       1,011              143          74     1,011      5,903      1,085
Homewood Suites-Augusta, Georgia         330     4,164         516              102          24       330      4,266        540
Residence Inn-Princeton, New
   Jersey                              1,920    15,875       1,500            1,162       1,444     1,920     17,037      2,944
AmeriSuites-Cincinnati (Blue Ash),
   Ohio                                  900     6,241         466              264         207       900      6,505        673
AmeriSuites-Cincinnati (Forest
   Park), Ohio                           800     5,616         569              318         332       800      5,934        901
AmeriSuites-Columbus, Ohio               903     6,774         856              196         335       903      6,970      1,191
AmeriSuites-Flagstaff, Arizona           600     3,832         737              138          91       600      3,970        828
AmeriSuites-Jacksonville, Florida      1,168     5,734         436              371         414     1,168      6,105        850
AmeriSuites-Indianapolis, Indiana        700     4,775         800              148         174       700      4,923        974
AmeriSuites-Miami, Florida             1,500     9,387         900              143          37     1,500      9,530        937
AmeriSuites-Overland Park, Kansas      1,300     7,030         900              304         276     1,300      7,334      1,176
AmeriSuites-Richmond, Virginia         1,772     9,640         921              161         141     1,772      9,801      1,062
AmeriSuites-Tampa, Florida             1,400     9,786         523              144          68     1,400      9,930        591
Hampton Inn-San Antonio, Texas         3,749     7,539       1,317              592         126     3,749      8,131      1,443
Homewood Suites-Sharonville, Ohio        863     6,194         746              632         452       863      6,826      1,198
Residence Inn-Boise, Idaho               950     5,758         350              368         509       950      6,126        859
Residence Inn-Portland, Oregon         2,400    20,735         500              269         420     2,400     21,004        920
Hampton Inn & Suites-Memphis
   (Bartlett), Tennessee                 860     5,721       1,052               11          22       860      5,732      1,074
Residence Inn-Somers Point, New
   Jersey                              1,094     6,372         729              637         574     1,094      7,009      1,303
AmeriSuites-Albuquerque, New
   Mexico                              1,776     6,871         918               36          14     1,776      6,907        932
AmeriSuites-Baltimore, Maryland          659     8,514         898               43          22       659      8,557        920
AmeriSuites-Baton Rouge, Louisiana       649     9,085       1,157               46          15       649      9,131      1,172
AmeriSuites-Birmingham, Alabama        1,066     5,871         758               42          11     1,066      5,913        769
AmeriSuites-Las Vegas, Nevada          4,126    13,056       1,965               33          34     4,126     13,089      1,999
AmeriSuites-Memphis (Wolfchase),
   Tennessee                           1,108     6,433         900               41          16     1,108      6,474        916
AmeriSuites-Miami (Kendall),
   Florida                             2,426     7,394         802               38          66     2,426      7,432        868
AmeriSuites-Minneapolis, Minnesota     1,312     7,421         873               38          14     1,312      7,459        887
AmeriSuites-Nashville, Tennessee       1,622     8,452       1,198               40           9     1,622      8,492      1,207
Homewood Suites-Seattle, Washington    2,640    17,769       1,760              199         224     2,640     17,968      1,984
Homewood Suites-Chicago, Illinois               29,052                                    3,568               29,052      3,568
Homewood Suites-Orlando, Florida       4,250    17,015                                    2,792     4,250     17,015      2,792
Construction in Progress               3,366                                                        3,366
Corporate Office--Memphis, TN                                                               344                             344
                                     -------- --------     -------   ---    -------     -------  --------   --------   --------

                                     $106,643 $646,641     $60,631   $38    $47,726     $53,742  $106,681   $694,367   $114,373
                                     ======== ========     =======   ===    =======     =======  ========   ========   ========

<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-Colorado Springs,
   Colorado                             5,750         529          5,221         1985        5-31 Yrs.
Hampton Inn-Columbia, South
   Carolina                             8,502         848          7,654         1985        5-31 Yrs.
Hampton Inn-Aurora, Colorado            5,183         495          4,688         1985        5-31 Yrs.
Hampton Inn-Detroit (Madison
   Heights), Michigan                   6,380         581          5,799         1987        5-31 Yrs.
Hampton Inn-Dublin, Ohio                6,130         638          5,492         1988        5-31 Yrs.
Hampton Inn-Kansas City, Kansas         5,869         587          5,282         1987        5-31 Yrs.
Hampton Inn-Little Rock, Arkansas       7,741         804          6,937         1985        5-31 Yrs.
Hampton Inn-Memphis (Poplar),
   Tennessee                           10,571         974          9,597         1985        5-31 Yrs.
Hampton Inn-Memphis (Sycamore),
   Tennessee                            3,884         430          3,454         1984        5-31 Yrs.
Hampton Inn-Nashville (Briley),
   Tennessee                            7,761         821          6,940         1987        5-31 Yrs.
Hampton Inn-Richardson, Texas           8,613         782          7,831         1987        5-31 Yrs.
Hampton Inn-St. Louis, Missouri         6,252         638          5,614         1987        5-31 Yrs.
Homewood Suites-Germantown,
   Tennessee                            7,999         852          7,147         1986        5-31 Yrs.
Homewood Suites-Augusta, Georgia        5,136         524          4,612         1997        5-31 Yrs.
Residence Inn-Princeton, New
   Jersey                              21,901       1,923         19,978         1988        5-31 Yrs.
AmeriSuites-Cincinnati (Blue Ash),
   Ohio                                 8,078         598          7,480         1990        5-31 Yrs.
AmeriSuites-Cincinnati (Forest
   Park), Ohio                          7,635         598          7,037         1992        5-31 Yrs.
AmeriSuites-Columbus, Ohio              9,064         744          8,320         1994        5-31 Yrs.
AmeriSuites-Flagstaff, Arizona          5,398         450          4,948         1993        5-31 Yrs.
AmeriSuites-Jacksonville, Florida       8,123         578          7,545         1996        5-31 Yrs.
AmeriSuites-Indianapolis, Indiana       6,597         580          6,017         1992        5-31 Yrs.
AmeriSuites-Miami, Florida             11,967         904         11,063         1996        5-31 Yrs.
AmeriSuites-Overland Park, Kansas       9,810         780          9,030         1994        5-31 Yrs.
AmeriSuites-Richmond, Virginia         12,635         944         11,691         1992        5-31 Yrs.
AmeriSuites-Tampa, Florida             11,921         829         11,092         1994        5-31 Yrs.
Hampton Inn-San Antonio, Texas         13,323         784         12,539         1995        5-31 Yrs.
Homewood Suites-Sharonville, Ohio       8,887         582          8,305         1990        5-31 Yrs.
Residence Inn-Boise, Idaho              7,935         481          7,454         1986        5-31 Yrs.
Residence Inn-Portland, Oregon         24,324       1,311         23,013         1990        5-31 Yrs.
Hampton Inn & Suites-Memphis
   (Bartlett), Tennessee                7,666         562          7,104         1998        5-31 Yrs.
Residence Inn-Somers Point, New
   Jersey                               9,406         569          8,837         1998        5-31 Yrs.
AmeriSuites-Albuquerque, New
   Mexico                               9,615         531          9,084         1997        5-31 Yrs.
AmeriSuites-Baltimore, Maryland        10,136         607          9,529         1996        5-31 Yrs.
AmeriSuites-Baton Rouge, Louisiana     10,952         690         10,262         1997        5-31 Yrs.
AmeriSuites-Birmingham, Alabama         7,748         449          7,299         1997        5-31 Yrs.
AmeriSuites-Las Vegas, Nevada          19,214       1,056         18,158         1998        5-31 Yrs.
AmeriSuites-Memphis (Wolfchase),
   Tennessee                            8,498         506          7,992         1996        5-31 Yrs.
AmeriSuites-Miami (Kendall),
   Florida                             10,726         535         10,191         1996        5-31 Yrs.
AmeriSuites-Minneapolis, Minnesota      9,658         548          9,110         1997        5-31 Yrs.
AmeriSuites-Nashville, Tennessee       11,321         667         10,654         1997        5-31 Yrs.
Homewood Suites-Seattle, Washington    22,592       1,196         21,396         1998        5-31 Yrs.
Homewood Suites-Chicago, Illinois      32,620         886         31,734         1999        5-31 Yrs.
Homewood Suites-Orlando, Florida       24,057         498         23,559         1999        5-31 Yrs.
Construction in Progress                3,366                      3,366                     5-31 Yrs.
Corporate Office--Memphis, TN             344          66            278                        7 Yrs.
                                     --------    --------       --------

                                     $915,421    $100,884       $814,537
                                     ========    ========       ========
</TABLE>


<TABLE>
<S>                                                      <C>
(a) Reconciliation of Real Estate:
     Balance at December 31, 1997                       $660,891
       Additions during the period                       208,374
       Sales during the period                           (10,658)
                                                        --------
     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
                                                        ========

(b) Reconciliation of Accumulated Depreciation:
      Balance At December 31, 1997                      $ 43,819
         Depreciation expense during the period           26,447
         Depreciation on sales during the period          (1,791)
                                                        --------
       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
                                                        ========
</TABLE>

                                   50


<PAGE>



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

During the fiscal  year ended  December  31,  1999 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 "Proposal One - 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 the Company's Common Stock" and "Proposal One - 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.

                                       51


<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                                         29
   Consolidated Balance Sheets at December 31, 1999 and 1998                 30
   Consolidated Statements of Operations for the years ended
     December 31, 1999, 1998 and 1997                                        31
   Consolidated Statements of Shareholders' Equity for the
     years ended December 31, 1999, 1998 and 1997                            32
   Consolidated Statements of Cash Flows for the years ended
     December 31, 1999, 1998 and 1997                                        34
   Notes to Consolidated Financial Statements                                35
   Schedule III - Real Estate and Accumulated Depreciation
     as of December 31, 1999                                                 49

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:

<TABLE>
<CAPTION>
Exhibit
Number     Description
------     -----------
<S>         <C>
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)
</TABLE>

                                       52


<PAGE>


<TABLE>
<S>        <C>
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 Companny'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) --  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(b) --  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,   --  Indenture   dated  as   of  February  6,  1997  among  EQI  Financing
10.1       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)

10.2(a)--  Form  of  Percentage  Lease  Agreement  (incorporated by reference to
           Exhibit  10.3 to the  Company's  Registration  Statement on Form S-11
           (Registration No. 33-73304))

10.2(b)--  Consolidated  Lease  Amendment  dated as of November 15, 1996 between
           Equity  Inns  Partnership,  L.P. and  Crossroads/Memphis Partnership,
           L.P. (incorporated  by reference  to Exhibit 10.1(a) to the Company's
           Current Report on Form 8-K (Registration No. 01-12073) filed with the
           Securities and Exchange Commission on December 13, 1996)

10.2(c)--  Form of  Percentage  Lease Amendment between Equity Inns Partnership,
           L.P. and Crossroads/Future Company, L.L.C. (incorporated by reference
           to  Exhibit  10.1(b)  to the Company's Amended Current Report on Form
           8-K  (Registration  No.  01-12073)  filed  with  the  Securities  and
           Exchange Commission on July 22, 1997)

</TABLE>

                                       53


<PAGE>

<TABLE>
<S>        <C>
10.2(d)--  Form of  Percentage Lease  Amendment between Equity Inns Partnership,
           L.P. and Caldwell Holding Corp. (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
           December 24, 1997)

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  --   Credit Agreement between Equity Inns, Inc., Equity Inns Trust, Equity
           Inns  Partnership,  L.P.,  Smith Barney Mortgage Capital Group, Inc.,
           National  Bank  of  Commerce,  First National Bank of Chicago, Leader
           Federal  Bank  for  Savings,  AmSouth Bank,  First  National  Bank of
           Commerce,  Bank  of  Mississippi, Mercantile Bank of St. Louis, First
           National  Bank  of  Chicago  and Smith Barney Mortgage Capital Group,
           Inc. as  collateral  agent (incorporated by reference to Exhibit 10.7
           to  the  Company's  Annual  Report  on Form 10-K/A for the year ended
           December  31,   1995   (Registration  No.  0-23290)  filed  with  the
           Securities and Exchange Commission on March 20, 1996)

10.6(a)--  1st  Amendment to  Revolving Credit Agreement, dated August 10, 1998,
           between  Equity  Inns  Partnership,  L.P.,  Equity Inns/West Virginia
           Partnership, L.P., Equity Inns, Inc., Equity Inns Trust and  National
           Bank of Commerce

10.6(b)--  2nd Amendment to Revolving Credit Agreement, dated December 18, 1998,
           between  Equity  Inns  Partnership,  L.P.,  Equity Inns/West Virginia
           Partnership, L.P., Equity Inns, Inc., Equity Inns Trust and  National
           Bank of Commerce

10.7  --   Unsecured Revolving Credit Agreement dated as of October 10, 1997, by
           and among Equity Inns Partnership, L.P. and Equity Inns/West Virginia
           Partnership, L.P. as Borrower and The First National Bank of Chicago,
           Credit Lyonnais New York Branch, and  AmSouth Bank as Lenders, Credit
           Lyonnais New York Branch, as Syndication Agent and The First National
           Bank of Chicago as Administrative Agent (incorporated by reference to
           Exhibit   10.3  to  the   Company's   Current   Report  on  Form  8-K
           (Registration No.  01-12073)  filed with  the Securities and Exchange
           Commission on November 24, 1997)

10.7(a)--  First Amendment to  Unsecured  Revolving Credit Agreement dated as of
           November 24, 1997, by and among Equity Inns Partnership, L.P., Equity
           Inns/West  Virginia  Partnership,  L.P.,  The  First National Bank of
           Chicago and Credit Lyonnais New York Branch

10.7(b)--  Second Amendment to  Unsecured Revolving Credit Agreement dated as of
           September  28,  1998,  by and  among  Equity  Inns Partnership, L.P.,
           Equity Inns/West Virginia  Partnership, L.P., The First National Bank
           of Chicago and Credit Lyonnais New York Branch
</TABLE>

                                       54


<PAGE>


<TABLE>
<S>        <C>
10.7(c)--  Amended and Restated Unsecured Revolving Credit Agreement dated as of
           June 23, 1999, by and  among  Equity Inns  Partnership, L.P.,  Equity
           Inns/West  Virginia Partnership, L.P. and Equity Inns Partnership II,
           L.P. as  Borrowers and  The First  National  Bank  of Chicago, Credit
           Lyonnais New York Branch,  NationsBank, N.A., AmSouth Bank, PNC Bank,
           National Association, National Bank of Commerce, Chang Hwa Commercial
           Bank,  Ltd.,   New  York  Branch,   Union  Planters  Bank,   National
           Association,  and First  Tennessee  Bank as  Lenders (incorporated by
           reference to  Exhibit 10.1  to the Company's Quarterly Report on Form
           10-K  (Registration  No.  01-12073)  filed  with  the  Securities and
           Exchange Commission on August 13, 1999)

10.8 --    Unsecured  Revolving  Credit Agreement dated as of March 29, 1999, by
           and among Equity Inns Partnership, L.P. and Equity Inns/West Virginia
           Partnership, L.P. as Borrowers, NationsBank, N.A. and Credit Lyonnais
           New York  Branch as Lenders,  NationsBank, N.A. as Administrative and
           Documentation  Agent,  Credit Lyonnais New York Branch as Syndication
           Agent,  Joint  Agent  and  Book  Arranger  and NationsBanc Montgomery
           Securities,  LLC   (incorporated  by reference to Exhibit 10.1 to the
           Company's  Current  Report  on  Form 8-K  (Registration No. 01-12073)
           filed with the Securities and Exchange Commission on May 7, 1999)

10.9 --    Consolidated Amendment to Lease Agreements and Master Agreement dated
           as of  March 31, 1999,  by and  among  Equity Inns, Inc., Equity Inns
           Partnership, L.P.,  Equity Inns/West Virginia Partnership, L.P.,  EQI
           Financing  Partnership  I,  L.P.,  Equity  Inns Partnership II, L.P.,
           Crossroads/Memphis Partnership, L.P., State College BBQ/Concord Joint
           Venture,  Crossroads/Memphis  Financing  Company,  L.L.C., Crossroads
           Future   Company,   L.L.C.,   Patriot   American  Hospitality,  Inc.,
           Interstate  Hotels, LLC,  Crossroads Hospitality Company, L.L.C.  and
           Interstate  Hotels  Management,  Inc.  (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 May 7, 1999)


10.10  --  Guaranty  of  Leases  dated  November 15, 1996 by  Interstate  Hotels
           Company  (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 December 13, 1996)

10.11  --  Guaranty  of  Leases  dated  November  15, 1996 by  Interstate Hotels
           Corporation  (incorporated  by  reference  to  Exhibit  10.3  to  the
           Company's  Current  Report  on  Form  8-K (Registration No. 01-12073)
           filed  with  the  Securities and  Exchange Commission on December 13,
           1996)

10.12  --  Master  Agreement  dated  as  of  November 4, 1996 among Equity Inns,
           Inc.,  Equity Inns Partnership, L.P.,  Interstate Hotels Corporation,
           Crossroads/Memphis  Partnership, L.P.  and Crossroads Future Company,
           L.L.C.  (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 December 13, 1996)

10.13  --  First  Amendment to  Master  Agreement  dated as of November 15, 1996
           among  Equity Inns, Inc.,  Equity Inns Partnership, L.P.,  Interstate
           Hotels   Corporation,   Crossroads/Memphis   Partnership,  L.P.   and
           Crossroads   Future  Company,  L.L.C.  (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 December 13, 1996)
</TABLE>


                                       55


<PAGE>


<TABLE>
<S>        <C>
10.14  --  Second Amendment to  Master Agreement dated as of February 6, 1997 by
           Equity  Inns,  Inc.,  Equity  Inns  Partnership, L.P.,  EQI Financing
           Partnership  1,  L.P.,  Interstate  Hotels  Corporation,  Crossroads/
           Memphis  Partnership,  L.P.,  Crossroads/Memphis  Financing  Company,
           L.L.C.,  and  Crossroads  Future  Company,  L.L.C.  (incorporated  by
           reference to  Exhibit  10.3 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)

10.15  --  Form of Deed of Trust  dated as of February 6, 1997 by  EQI Financing
           Partnership 1,  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  --  Credit  Agreement  dated  June 25,  1997,  by and  among  Equity Inns
           Partnership, L.P. and  Equity Inns Trust,  The First National Bank of
           Chicago,  Credit  Lyonnais,  New  York  Branch  and  AmSouth  Bank of
           Alabama,   as  Lenders,   Credit  Lyonnais,   New  York  Branch,   as
           Documentation  Agent  and  The  First  National  Bank  of Chicago, as
           Administrative Agent and Syndication Agent (incorporated by reference
           to  Exhibit  10.1  to  the  Company's  Current  Report  on  Form  8-K
           (Registration  No. 01-12073)  filed with the  Securities and Exchange
           Commission on July 10, 1997)

10.17  --  Revolving Credit  Loan Agreement dated as of November 14, 1997 by and
           among  Equity  Inns  Partnership,  L.P.,  Equity Inns/West   Virginia
           Partnership, L.P.,  Equity Inns, Inc., Equity Inns Trust and National
           Bank of Commerce

10.18  --  Alliance  Agreement  dated  as  of  January  20,  1998  between U. S.
           Franchise   Systems,   Inc.   and   Equity  Inns   Partnership,  L.P.
           (incorporated by  reference to  Exhibit 10.1 to the Company's Current
           Report  on  Form  8-K  (Registration  No. 01-12073)  filed  with  the
           Securities and Exchange Commission on February 6, 1998)

10.19 --   Commercial  Lease dated as of December 17, 1998 between  64 LTD.  LLC
           and Equity Inns Services, Inc.

10.20 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Phillip H. McNeill, Sr.

10.21 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Howard A. Silver

10.22 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Donald H. Dempsey

10.23 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Phillip H. McNeill, Jr.

10.24 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and J. Ronald Cooper

10.25 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Richard F. Mitchell

</TABLE>


                                       56


<PAGE>


<TABLE>
<S>        <C>
10.26* --  Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Michael K. Goforth

10.27  --  Equity Inns, Inc. Executive Deferred Compensation Plan

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

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

27.1*  --  Financial Data Schedule (filed electronically with the Securities and
           Exchange Commission)
</TABLE>

--------------
*  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).

                                       57


<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 15th day of March,
2000.

                                       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 15th day of March, 2000.

<TABLE>
<CAPTION>
        Signature                       Title                          Date
        ---------                       -----                          ----
<S>                             <C>                               <C>
/s/ Phillip H. McNeill, Sr.    Chairman of the Board and          March 15, 2000
---------------------------    Chief Executive Officer
Phillip H. McNeill, Sr.        (Principal Executive Officer)
                               and Director

/s/ Howard A. Silver           President, Chief Operating         March 15, 2000
--------------------           Officer and Director
Howard A. Silver


/s/ Donald H. Dempsey          Executive Vice President,          March 15, 2000
---------------------          Secretary, Treasurer, Chief
Donald H. Dempsey              Financial Officer (Principal
                               Financial and Accounting
                               Officer) and Director


/s/ William A. Deupree, Jr.    Director                           March 15, 2000
---------------------------
William A. Deupree, Jr.


/s/ Harry S. Hays              Director                           March 15, 2000
-----------------
Harry S. Hays

/s/ Joseph W. McLeary          Director                           March 15, 2000
---------------------
Joseph W. McLeary

/s/ Raymond E. Schultz         Director                           March 15, 2000
----------------------
Raymond E. Schultz
</TABLE>

                                       58


<PAGE>




                                INDEX OF EXHIBITS
<TABLE>
<CAPTION>

Exhibit
Number     Description
------     -----------
<S>        <C>
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) --  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(b) --  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)
</TABLE>


                                       59


<PAGE>

<TABLE>
<S>        <C>
4.3, --    Indenture  dated  as  of   February   6,   1997  among  EQI Financing
10.1       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)

10.2(a)--  Form  of  Percentage  Lease  Agreement  (incorporated by reference to
           Exhibit  10.3  to the  Company's  Registration Statement on Form S-11
           (Registration No. 33-73304))

10.2(b)--  Consolidated  Lease  Amendment dated as of  November 15, 1996 between
           Equity  Inns  Partnership, L.P.  and  Crossroads/Memphis Partnership,
           L.P. (incorporated by  reference to  Exhibit 10.1(a) to the Company's
           Current Report on Form 8-K (Registration No. 01-12073) filed with the
           Securities and Exchange Commission on December 13, 1996)

10.2(c)--  Form of  Percentage  Lease Amendment between Equity Inns Partnership,
           L.P. and Crossroads/Future Company, L.L.C. (incorporated by reference
           to  Exhibit  10.1(b) to the  Company's Amended Current Report on Form
           8-K  (Registration  No.  01-12073)  filed  with  the  Securities  and
           Exchange Commission on July 22, 1997)

10.2(d)--  Form of  Percentage  Lease Amendment between Equity Inns Partnership,
           L.P. and Caldwell Holding Corp. (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
           December 24, 1997)

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  --   Credit Agreement between Equity Inns, Inc., Equity Inns Trust, Equity
           Inns  Partnership,  L.P.,  Smith Barney Mortgage Capital Group, Inc.,
           National  Bank of  Commerce,  First National Bank of Chicago,  Leader
           Federal  Bank  for  Savings,  AmSouth Bank,  First  National  Bank of
           Commerce,  Bank of Mississippi,  Mercantile Bank of St. Louis,  First
           National  Bank  of  Chicago and  Smith Barney Mortgage Capital Group,
           Inc. as collateral agent  (incorporated by  reference to Exhibit 10.7
           to the  Company's  Annual  Report on Form  10-K/A for the  year ended
           December  31,  1995   (Registration  No.   0-23290)  filed  with  the
           Securities and Exchange Commission on March 20, 1996)

10.6(a)--  1st Amendment to  Revolving  Credit Agreement, dated August 10, 1998,
           between  Equity  Inns  Partnership, L.P.,  Equity  Inns/West Virginia
           Partnership, L.P., Equity Inns, Inc., Equity Inns Trust and  National
           Bank of Commerce
</TABLE>

                                       60


<PAGE>


<TABLE>
<S>        <C>
10.6(b)--  2nd Amendment to Revolving Credit Agreement, dated December 18, 1998,
           between  Equity  Inns  Partnership, L.P.,  Equity  Inns/West Virginia
           Partnership, L.P., Equity Inns, Inc., Equity Inns Trust and  National
           Bank of Commerce

10.7  --   Unsecured Revolving Credit Agreement dated as of October 10, 1997, by
           and among Equity Inns Partnership, L.P. and Equity Inns/West Virginia
           Partnership, L.P. as Borrower and The First National Bank of Chicago,
           Credit Lyonnais New York Branch,  and AmSouth Bank as Lenders, Credit
           Lyonnais New York Branch, as Syndication Agent and The First National
           Bank of Chicago as Administrative Agent (incorporated by reference to
           Exhibit   10.3  to   the   Company's  Current  Report   on  Form  8-K
           (Registration  No.  01-12073)  filed with the Securities and Exchange
           Commission on November 24, 1997)

10.7(a)--  First Amendment  to Unsecured  Revolving Credit Agreement dated as of
           November 24, 1997, by and among Equity Inns Partnership, L.P., Equity
           Inns/West  Virginia  Partnership,  L.P.,  The  First National Bank of
           Chicago and Credit Lyonnais New York Branch

10.7(b)--  Second Amendment to Unsecured  Revolving Credit Agreement dated as of
           September 28, 1998,  by and  among  Equity  Inns  Partnership,  L.P.,
           Equity Inns/West Virginia Partnership, L.P.,  The First National Bank
           of Chicago and Credit Lyonnais New York Branch

10.7(c)--  Amended and Restated Unsecured Revolving Credit Agreement dated as of
           June 23, 1999,  by  and among  Equity  Inns Partnership, L.P., Equity
           Inns/West Virginia Partnership, L.P. and  Equity Inns Partnership II,
           L.P.  as  Borrowers  and  The First National Bank of Chicago,  Credit
           Lyonnais New York Branch, NationsBank, N.A.,  AmSouth Bank, PNC Bank,
           National Association, National Bank of Commerce, Chang Hwa Commercial
           Bank,  Ltd.,   New  York  Branch,   Union  Planters  Bank,   National
           Association,  and  First  Tennessee  Bank as Lenders (incorporated by
           reference  to Exhibit  10.1 to the Company's Quarterly Report on Form
           10-K  (Registration  No.  01-12073)  filed  with  the  Securities and
           Exchange Commission on August 13, 1999)

10.8 --    Unsecured Revolving  Credit  Agreement dated as of March 29, 1999, by
           and among Equity Inns Partnership, L.P. and Equity Inns/West Virginia
           Partnership, L.P. as Borrowers, NationsBank, N.A. and Credit Lyonnais
           New York Branch as  Lenders,  NationsBank, N.A. as Administrative and
           Documentation  Agent,  Credit Lyonnais New York Branch as Syndication
           Agent,  Joint  Agent  and  Book  Arranger  and NationsBanc Montgomery
           Securities,  LLC  (incorporated  by reference  to Exhibit 10.1 to the
           Company's  Current  Report  on Form  8-K (Registration No.  01-12073)
           filed with the Securities and Exchange Commission on May 7, 1999)

10.9 --    Consolidated Amendment to Lease Agreements and Master Agreement dated
           as of March 31, 1999,  by and  among  Equity Inns, Inc.,  Equity Inns
           Partnership,  L.P.,  Equity Inns/West Virginia Partnership, L.P., EQI
           Financing Partnership  I,  L.P.,  Equity  Inns  Partnership II, L.P.,
           Crossroads/Memphis Partnership, L.P., State College BBQ/Concord Joint
           Venture,  Crossroads/Memphis  Financing  Company,  L.L.C., Crossroads
           Future   Company,   L.L.C.,   Patriot   American  Hospitality,  Inc.,
           Interstate  Hotels,  LLC,  Crossroads Hospitality Company, L.L.C. and
           Interstate  Hotels  Management,  Inc.  (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 May 7, 1999)
</TABLE>


                                       61


<PAGE>


<TABLE>
<S>        <C>
10.10  --  Guaranty  of  Leases  dated  November 15, 1996 by  Interstate  Hotels
           Company  (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 December 13, 1996)

10.11  --  Guaranty  of  Leases  dated  November  15, 1996 by  Interstate Hotels
           Corporation  (incorporated  by  reference  to  Exhibit  10.3  to  the
           Company's  Current  Report  on  Form 8-K  (Registration No. 01-12073)
           filed  with  the  Securities  and Exchange Commission on December 13,
           1996)

10.12  --  Master  Agreement  dated  as  of  November 4, 1996 among Equity Inns,
           Inc., Equity Inns  Partnership, L.P.,  Interstate Hotels Corporation,
           Crossroads/Memphis  Partnership, L.P. and  Crossroads Future Company,
           L.L.C.  (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 December 13, 1996)

10.13  --  First  Amendment  to  Master  Agreement dated as of November 15, 1996
           among Equity Inns, Inc.,  Equity Inns Partnership, L.P.,   Interstate
           Hotels  Corporation,   Crossroads/Memphis   Partnership,   L.P.   and
           Crossroads  Future  Company,  L.L.C.  (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 December 13, 1996)

10.14  --  Second Amendment to Master Agreement dated as of February 6, 1997 by
           Equity Inns,  Inc.,  Equity  Inns  Partnership,  L.P.,  EQI Financing
           Partnership  1,  L.P.,  Interstate  Hotels  Corporation,  Crossroads/
           Memphis  Partnership,  L.P.,  Crossroads/Memphis  Financing  Company,
           L.L.C.,  and  Crossroads  Future  Company,  L.L.C.  (incorporated  by
           reference  to Exhibit 10.3  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)

10.15  --  Form of Deed of Trust  dated as of February 6, 1997 by  EQI Financing
           Partnership  1, 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  --  Credit  Agreement  dated  June 25,  1997,  by  and  among Equity Inns
           Partnership, L.P.  and  Equity Inns Trust, The First National Bank of
           Chicago,  Credit  Lyonnais,  New  York  Branch  and  AmSouth  Bank of
           Alabama,  as   Lenders,   Credit   Lyonnais,   New  York  Branch,  as
           Documentation  Agent  and  The  First  National  Bank  of Chicago, as
           Administrative Agent and Syndication Agent (incorporated by reference
           to  Exhibit  10.1  to  the  Company's  Current  Report  on  Form  8-K
           (Registration  No. 01-12073)  filed with the  Securities and Exchange
           Commission on July 10, 1997)

10.17  --  Revolving Credit  Loan Agreement dated as of November 14, 1997 by and
           among   Equity  Inns  Partnership,  L.P.,   Equity Inns/West Virginia
           Partnership, L.P.,  Equity Inns, Inc., Equity Inns Trust and National
           Bank of Commerce
</TABLE>


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<PAGE>

<TABLE>
<S>        <C>
10.18  --  Alliance  Agreement  dated  as  of  January  20,  1998  between U. S.
           Franchise   Systems,   Inc.   and   Equity  Inns  Partnership,   L.P.
           (incorporated  by reference to  Exhibit 10.1 to the Company's Current
           Report  on  Form  8-K  (Registration  No.  01-12073)  filed  with the
           Securities and Exchange Commission on February 6, 1998)

10.19 --   Commercial  Lease  dated as of December 17, 1998 between 64 LTD.  LLC
           and Equity Inns Services, Inc.

10.20 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Phillip H. McNeill, Sr.

10.21 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Howard A. Silver

10.22 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Donald H. Dempsey

10.23 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Phillip H. McNeill, Jr.

10.24 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and J. Ronald Cooper

10.25 --   Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Richard F. Mitchell

10.26* --  Change  in  Control  and  Termination  Agreement  between Equity Inns
           Services, Inc., Equity Inns, Inc. and Michael K. Goforth

10.27 --   Equity Inns, Inc. Executive Deferred Compensation Plan

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

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

27.1*  --  Financial Data Schedule (filed electronically with the Securities and
           Exchange Commission)
</TABLE>

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


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