Equity Inns Announces Third Quarter Results

Equity Inns, Inc. (NYSE: ENN):

   --  Third Quarter 2005 Highlights --

   --  Funds From Operations Increased 21% to $0.34 Per Diluted 
        Share --

   --  RevPAR Increased 8.9%; Gross Operating Profit Increased 150
        basis points --

   --  Acquired Seven Premium Branded Hotels; Acquisition Pipeline
        Remains Strong --

   --  Balance Sheet Remains Solid --

   --  Company Increases 2005 Guidance --

   Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate
investment trust (REIT), today announced its results for the third
quarter and nine months ended September 30, 2005.
   Adjusted funds from operations (AFFO), for the third quarter 2005,
which is the same as funds from operations (FFO) this quarter,
increased 44% to $18.6 million versus AFFO of $12.9 million for the
third quarter 2004. AFFO per share for the third quarter 2005
increased 21% to $0.34 from $0.28 in the third quarter 2004. Net
income applicable to common shareholders for the third quarter 2005
was $6.7 million, or $0.12 per diluted share, as compared to $2.5
million, or $0.06 per diluted share, in the third quarter 2004.
Adjusted EBITDA climbed 36% to $30.1 million in the third quarter 2005
versus $22.1 million in the same period last year.
   Howard A. Silver, President and Chief Executive Officer, stated,
"We are extremely pleased to report another quarter of solid results
that exceed the analyst consensus estimate by $0.01 and again
outperform industry revenue metrics. The 30% increase in room revenue
and solid revenue per available room (RevPAR) growth is the result of
the continued performance of our acquisition strategy coupled with the
mix of our premium hotel brands and the geographic diversity of our
locations. The strategic positioning of our hotel portfolio to
maintain occupancy levels during the economic downturn has enabled the
Company to increase average daily rate (ADR) at a rate faster than the
industry during the current recovery. Our ADR increase of 6.6% in the
third quarter 2005, compared to 5.6% for the industry, accounted for
nearly 75% of our quarterly RevPAR growth of 8.9%. This ADR growth has
also translated into better bottom-line results as evidenced by our
improving gross operating profit margins."
   Mr. Silver continued, "Our transaction activity in the third
quarter, and for the past twenty-one months, demonstrates our ability
to execute on our strategy of upgrading our hotel portfolio, while
continuing to maintain a strong balance sheet. Since the beginning of
2004, through the end of October 2005, we have purchased 36 newer
Marriott and Hilton branded hotel properties in key growth markets. We
are aggressively continuing to acquire hotels that will meaningfully
contribute to our long-term growth strategy. Our pipeline of
acquisition opportunities remains solid and we continue to pursue
raising capital opportunistically to fund this acquisition program,
with attractive terms that results in the creation of long-term
shareholder value."

   Financial Highlights for the Third quarter and Nine months 2005:

   In the third quarter of 2005, the AFFO improvement was primarily
due to a $3.1 million net accretive effect of the Company's hotel
acquisitions and same-store (96 hotels) hotel net operating income
increase of $3.0 million. For the third quarter 2005, total hotel
revenue was $90.2 million, representing an increase of approximately
30% from one year ago. This increase was attributable to net
incremental revenues of $14.4 million from hotel acquisitions and an
increase of $6.0 million in same-store hotel revenue, which was driven
by a 9.5% increase in RevPAR to $65.91. Approximately 68% of the
Company's same-store RevPAR improvement was attributable to ADR, which
improved 6.5% to $87.03.
   The Company's RevPAR growth of 8.9% for the 122 comparable hotels
for the third quarter 2005 was driven by the increase in ADR of 6.6%
to $87.99 and a 160 basis points gain in occupancy to 75.6%. RevPAR
growth was strong throughout the third quarter of 2005. RevPAR
increased 8.1% in July, 10.6% in August and 8.4% in September, as
compared to the same periods in the prior year.
   Primarily due to the RevPAR growth, the Company's third quarter
2005 gross operating profit margin (GOP margin) increased 150 basis
points to 43.2% from 41.7% in the third quarter of 2004. Same-store
GOP margins increased 100 basis points to 42.7%.
   The Company's total hotel revenue for the nine months ended
September 2005 was $250.3 million, an increase of 33% from $188.2
million in the nine months ended September 2004. The improvement was
driven by net incremental revenue of $45.6 million from hotel
acquisitions completed in 2004 and 2005 and an increase of $16.5
million from same-store hotel revenue. RevPAR increased 10.5% on a
year-to-date basis for all comparable hotels, driven by 7.3% growth in
ADR and 210 basis points of occupancy improvement.
   Net income applicable to common shareholders for the nine months
ended September 30, 2005 was $11.7 million, or $0.22 per diluted
share, compared to net income applicable to common shareholders of
$0.8 million, or $0.02 per diluted share in the prior year period. For
the nine months ended September 30, 2005, Equity Inns reported a 37%
increase in AFFO per diluted share to $0.92, compared to $0.67 in the
same period a year ago.

   Additional Third Quarter Events:

   --  At the end of the quarter, Equity Inns marked its entrance
        into the Boston, Massachusetts area market with the purchase
        of a Hampton Inn and a Homewood Suites for total consideration
        of $15.2 million, or approximately $74,000 per room, which
        includes estimated renovation costs of $1.1 million.
        Collectively, the two hotels have an average age of six years
        and added 206 rooms to the Company's hotel portfolio.

   --  On September 15th, Equity Inns finalized its purchase of four
        hotels in the Midwest. The Company completed the purchase of
        four Hilton and Marriott branded hotels for approximately
        $25.9 million, or $69,000 per room. Collectively, the four
        hotels have an average age of 5 years and added 376 rooms to
        the Company's hotel portfolio. The average capitalization rate
        of the acquisition was approximately 9.7% on a trailing
        12-month net operating income basis.

   --  On August 9, 2005, the Company completed the purchase of a
        127-room Hampton Inn & Suites in Nashville (Franklin),
        Tennessee for $9.9 million.

   --  Equity Inns sold two exterior corridor Hampton Inn hotels for
        approximately $5.1 million at a combined capitalization rate
        of 7.7% in two separate transactions. Collectively, the sold
        hotels have 235 rooms and an average age of almost 20 years.

   Subsequent Event:

   --  On November 1, 2005, the Company completed its $22.0 million
        purchase of a 145-room, five-year old Marriott Courtyard in
        Carlsbad, CA from the Huntington Hotel Group. The
        capitalization rate of the acquisition was 9.2% on a trailing
        12 month net operating income basis. The deal marks the
        Company's initial entry into the California market.

   Capital Structure:

   At September 30, 2005, Equity Inns had $531.6 million of long-term
debt outstanding, which included $98.5 million drawn under its $125.0
million line of credit. The weighted average interest rate of the
Company's debt was 6.9% compared to 7.3% a year ago. The weighted
average life of the Company's debt was 6.9 years. The total debt
represented 42.4% of the historical cost of the Company's hotels.
Equity Inns' leverage ratio was 4.6 times at the end of the quarter,
which is near a five-year low for the Company. Fixed rate debt,
including variable rate debt hedged by interest rate swaps, amounted
to approximately 90% of total debt. At September 30, 2005, the
Company's outstanding common stock and partnership units were a
combined 55.4 million.

   Dividend:

   For the third quarter 2005, Equity Inns paid quarterly cash
dividends of $0.17 per common share and $0.546875 per preferred share.
The common dividend represented an increase of 31% as compared to the
dividend paid in the third quarter 2004 and was the Company's second
dividend increase in 2005. The cash available for distribution (CAD)
payout ratio was approximately 63% for the trailing twelve-month
period ended September 30, 2005. The level of Equity Inns' common
dividend will continue to be determined by our Board of Directors
based on the operating results of each quarter, economic conditions,
capital requirements, and other operating trends.

   Fourth Quarter Guidance:

   Mr. Silver commented, "Many residents suffered extensive damage to
their homes and businesses as hurricane Wilma came ashore last week
and I would like to acknowledge the hardship of those impacted by the
hurricane and the other storms this year. For Equity Inns, ten of our
properties (hotels) were impacted by power outages, temporary closings
and cancellations of reservations, however no hotels suffered major
damage and all are open today. At this point, our best estimate is
that the storm will have a slight impact on our business, but we do
not believe it will be material to our results."
   Based upon expectations for continued improvement in the upscale
and mid-scale lodging sectors, recent acquisitions and divestitures,
along with planned expense increases, the Company now expects full
year 2005 RevPAR increases will be in the range of 7.5% to 8.5%, which
is expected to result in an Adjusted EBITDA range of $104.0 million to
$105.5 million, an AFFO per diluted share range of $1.09 to $1.11 and
net income per diluted share range of $0.16 to $0.18.
   As a result of these assumptions, management expects fourth
quarter AFFO to be between $0.17 and $0.19 per diluted share and net
loss per diluted share to be in the range of ($0.06) to ($0.04), with
a RevPAR change of between -2% and +2%.
   The assumptions impacting the Company's fourth quarter 2005 RevPAR
and AFFO forecast are as follows:

   1. 13 hotels based in Florida benefited heavily from 2004
hurricane related business.

   --  Six of these hotels realized RevPAR growth of 36% in the
        fourth quarter 2004 due to hurricane related business. These
        hotels are projected to produce a RevPAR decline of 19% in the
        fourth quarter 2005 as compared to the fourth quarter 2004,
        although this is still approximately 17% above fourth quarter
        2003 RevPAR for these hotels.

   --  The remaining seven Florida based hotels that also benefited
        from 2004 hurricane related business are expected to produce a
        RevPAR decline of 10% in the fourth quarter 2005 as compared
        to the fourth quarter 2004.

   2. Residence Inn "Gen I Refresh" renovations at four hotels in the
Northeast are expected to result in a RevPAR decline of 15.0% in the
fourth quarter 2005 as compared to the fourth quarter 2004, as a
result of rooms at these hotels being out of service.

   Conference Call:

   Equity Inns will hold a conference call and webcast to discuss the
Company's third quarter 2005 results after the market close on
November 1, 2005, at 4:30 p.m. (Eastern Time). Interested investors
and other parties may listen to the conference call by dialing
1-800-289-0529 or 1-913-981-5523 for international participants. A
simultaneous webcast of the conference call may be accessed by logging
onto the Company's website at http://www.equityinns.com/ and selecting
the microphone icon.
   A replay of the conference call will be available on the Internet
at www.streetevents.com and the Company's website, www.equityinns.com
for seven days following the call. A recording of the call will also
be available by telephone until midnight, on November 8, 2005 by
dialing 1-888-203-1112 or 1-719-457-0820 for international
participants. The pass code is 1142779.

   Certain matters discussed in this press release which are not
historical facts are "forward-looking statements" within the meaning
of the federal securities laws and involve risks and uncertainties.
The words "may," "plan," "project," "anticipate," "believe,"
"estimate," "forecast, "expect," "intend," "will," and similar terms
are intended to identify forward-looking statements, which include,
without limitation, statements concerning our outlook for the hotel
industry, acquisition and disposition plans for our hotels and
assumptions and forecasts of future results for fiscal year 2005.
Forward-looking statements are not guarantees of future performance
and involve numerous risks and uncertainties which may cause our
actual financial condition, results of operations and performance to
be materially different from the results of expectations expressed or
implied by such statements. General economic conditions, future acts
of terrorism or war, risks associated with the hotel and hospitality
business, the availability of capital, risks associated with our debt
financing, hotel operating risks and numerous other factors, may
affect our future results and performance and achievements. These
risks and uncertainties are described in greater detail in our Current
Report on Form 8-K filed on March 16, 2005 and our other periodic
filings with the United States Securities and Exchange Commission
(SEC). We undertake no obligation and do not intend to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. Although we believe our
current expectations to be based upon reasonable assumptions, we can
give no assurance that our expectations will be attained or that
actual results will not differ materially.

   Notes to Financial Information

   The Company operates as a self-managed and self-administered real
estate investment trust, or REIT. Readers are encouraged to find
further detail regarding Equity Inns organizational structure in its
annual report on Form 10-K for the year ended December 31, 2004 as
filed with the SEC.

   Non-GAAP Financial Measures

   Included in this press release are certain "non-GAAP financial
measures," which are measures of the Company's historical or future
financial performance that are different from measures calculated and
presented in accordance with generally accepted accounting principles,
or GAAP, within the meaning of applicable SEC rules. These include:
(i) Gross Operating Profit Margin, (ii) Funds From Operations, (iii)
Adjusted Funds From Operations, (iv) Adjusted EBITDA, (v) Cash
Available for Distribution (CAD), (vi) CAD Payout Ratio, (vii)
Capitalization Rate (viii) Leverage Ratio, and (ix) Hotel Operating
Statistics. The following discussion defines these terms, which the
Company believes can be useful measures of its performance.

   Gross Operating Profit Margin

   The Company uses a measure common in the hotel industry to
evaluate its operating results. Gross operating profit margin (GOP
margin) is defined as hotel revenues minus hotel operating costs
before property taxes, insurance and management fees, divided by hotel
revenues.

   Funds from Operations

   The National Association of Real Estate Investment Trusts, or
NAREIT, defines funds from operations, or FFO, as net income (loss)
applicable to common shareholders (computed in accordance with
generally accepted accounting principles), excluding gains (or losses)
from sales of property, plus depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures. FFO is
presented on a per share basis after making adjustments for the effect
of dilutive securities. Equity Inns uses FFO per share as a measure of
performance to adjust for certain non-cash expenses such as
depreciation and amortization because historical cost accounting for
real estate assets implicitly assumes that the value of real estate
assets diminishes predictably over time. FFO is also used by
management in the annual budget process.
   Because real estate values have historically risen or fallen with
market conditions, many industry investors have considered
presentation of operating results for real estate companies that use
historical cost accounting to be less informative. NAREIT adopted the
definition of FFO in order to promote an industry-wide standard
measure of REIT operating performance. Accordingly, as a member of
NAREIT, Equity Inns adopted FFO as a measure to evaluate performance
and facilitate comparisons between the Company and other REITs,
although FFO and FFO per share may not be comparable to those measures
or similarly titled measures as reported by other companies.

   Adjusted Funds From Operations

   Equity Inns further adjusts FFO for losses on impairment of
hotels, prepayment penalties on extinguishment of debt and other
non-cash or unusual items. We refer to this as adjusted funds from
operations, or AFFO. The Company's computation of AFFO and AFFO per
diluted share is not comparable to the NAREIT definition of FFO or to
similar measures reported by other REITs, but the Company believes it
is an appropriate measure for this Company. The Company uses AFFO
because it believes that this measure provides investors a useful
indicator of the operating performance of the Company's hotels by
adjusting for the effects of certain non-cash or non-recurring items
arising from the Company's financing activities, impairment charges on
hotels held for sale and other areas. In addition to being used by
management in the annual budget process, AFFO per share is also used
by the Compensation Committee of the Board of Directors as one of the
criteria for performance-based compensation.

   Adjusted EBITDA

   Earnings before Interest Expense, Income Taxes, Depreciation and
Amortization, or EBITDA, is a commonly used measure of performance in
many industries, which the Company believes provides useful
information to investors regarding its results of operations. EBITDA
helps Equity Inns and its investors evaluate the ongoing operating
performance of its properties and facilitates comparisons with other
lodging REITs, hotel owners who are not REITs, and other
capital-intensive companies. The Company uses EBITDA to provide a
baseline when evaluating hotel results.
   The Company also uses EBITDA as one measure in determining the
value of acquisitions and dispositions and, like FFO and AFFO, it is
also used by management in the annual budget process.
   The Company further adjusts EBITDA to exclude preferred stock
dividends, income or losses from discontinued operations, minority
interests and losses on impairment of hotels because it believes that
including such items in EBITDA is not consistent with reflecting the
ongoing operating performance of the remaining assets.
   The Company has historically adjusted EBITDA when evaluating its
performance because management believes that the exclusion of certain
non-cash and non-recurring items described above assists the Company
in measuring the performance of its hotels and reflects the ongoing
value of the Company as a whole. Therefore, the Company modifies
EBITDA and refers to this measure as Adjusted EBITDA.

   Cash available for distribution (CAD) and CAD Payout Ratio

   Cash available for distribution (CAD) is defined as AFFO, adjusted
for certain non-cash amortization and an allowance for recurring
capital expenditures equal to four percent of hotel room revenue from
continuing operations. The Company computes the CAD Payout Ratio by
dividing common dividends per share and unit paid over the last twelve
months by trailing twelve-month CAD per share for the same period. The
Company believes the CAD Payout Ratio also helps improve equity
holders' ability to understand the Company's ability to make
distributions to its shareholders.

   Capitalization Rate

   The Company uses a measure common in the hotel industry to discuss
its underwriting of acquired or disposed hotel assets. Capitalization
rate, for this discussion, is defined as the percentage derived by
dividing the net operating income of the hotel asset(s), less a
management fee and an allowance for recurring capital expenditures by
the purchase price paid or received for the hotel asset(s).

   Leverage Ratio

   The Company uses a measure common in the hotel industry to
evaluate its financial leverage. Leverage ratio is defined as the
Company's long-term debt divided by EBITDA as defined in the financial
covenants of its line of credit.

   Hotel Operating Statistics

   The Company uses a measure common in the hotel industry to
evaluate the operations of its hotel room revenue per available room,
or RevPAR. RevPAR is the product of the ADR charged and the average
daily occupancy achieved. RevPAR does not include food and beverage or
other ancillary revenues such as parking, telephone, or other guest
services generated by the property. Similar to the reporting periods
for the Company's statement of operations, hotel operating statistics
(i.e., RevPAR, ADR and average occupancy) are reported based on a
quarter end. This facilitates year-to-year comparisons of hotel
results, as each reporting period will be comprised of the same number
of days of operations as in the prior year.
   GOP Margin, FFO, AFFO, FFO per Share, AFFO per Share, Adjusted
EBITDA, CAD, CAD Payout Ratio, Capitalization Rate, Leverage Ratio and
Hotel Operating Statistics presented, may not be comparable to the
same or similarly titled measures calculated by other companies and
may not be helpful to investors when comparing Equity Inns to other
companies. This information should not be considered as an alternative
to net income, income from operations, cash from operations, or any
other operating performance measure prescribed by GAAP. Cash
expenditures for various long-term assets (such as renewal and
replacement capital expenditures), interest expense (for Adjusted
EBITDA purposes) and other items have been and will be incurred and
are not reflected in the Adjusted EBITDA, FFO and AFFO per share
presentations. Equity Inns' statement of operations and cash flows
include disclosure of its interest expense, capital expenditures, and
other excluded items, all of which should be considered when
evaluating the Company's performance, as well as the usefulness of its
non-GAAP financial measures. Additionally, FFO, AFFO, FFO per share,
AFFO per share, Adjusted EBITDA and CAD should not be considered as a
measure of the Company's liquidity or indicative of funds available to
fund its cash needs, including the Company's ability to make cash
distributions. In addition, FFO per share, AFFO per share and CAD do
not measure, and should not be used as measures of, amounts that
accrue directly to shareholders' benefit.

   About Equity Inns

   Equity Inns, Inc. is a self-advised REIT that focuses on the
upscale extended stay, all-suite and midscale limited-service segments
of the hotel industry. The Company, which ranks as the third largest
hotel REIT based on number of hotels, currently owns 123 hotels with
14,788 rooms located in 36 states. For more information about Equity
Inns, visit the Company's Web site at www.equityinns.com.
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                           EQUITY INNS, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                   (in thousands, except share data)

                                            September 30, December 31,
                                                2005          2004
                                            ------------- ------------
                                             (unaudited)
ASSETS
Investment in hotel properties, net            $964,542     $852,755
Assets held for sale                                  -        3,849
Cash and cash equivalents                         8,674        6,991
Accounts receivable, net of doubtful 
 accounts of $225 and $225, respectively          9,422        7,543
Interest rate swaps                                 748            -
Note receivable                                   1,700            -
Deferred expenses, net                           11,312        8,679
Deposits and other assets, net                   18,256       13,437
                                            ------------- ------------

       Total Assets                          $1,014,654     $893,254
                                            ============= ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt                                 $531,575     $439,183
Accounts payable and accrued expenses            40,161       30,366
Distributions payable                            10,673        8,090
Interest rate swaps                                   -          119
Minority interests in Partnership                 8,714        9,064
                                            ------------- ------------

       Total Liabilities                        591,123      486,822
                                            ------------- ------------

Commitments and Contingencies

Shareholders' Equity:

Preferred stock (Series B), 8.75%, $.01 par
 value, 10,000,000 shares authorized, 
 3,450,000 shares issued and outstanding         83,524       83,524
Common stock, $.01 par value, 100,000,000 
 shares authorized, 54,746,329 and 
 51,872,460 shares issued and outstanding           547          519
Additional paid-in capital                      572,488      542,397
Treasury stock, at cost, 747,600 shares          (5,173)      (5,173)
Unearned directors' and officers' 
 compensation                                    (2,474)      (2,211)
Distributions in excess of net earnings        (226,129)    (212,505)
Unrealized gain (loss) on interest rate 
 swaps                                              748         (119)
                                            ------------- ------------

       Total Shareholders' Equity               423,531      406,432
                                            ------------- ------------

       Total Liabilities and Shareholders'
        Equity                               $1,014,654     $893,254
                                            ============= ============

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

                                    For the Three      For the Nine 
                                    Months Ended       Months Ended 
                                    September 30,      September 30,
                                    -------------      -------------
                                    2005    2004       2005     2004
                                    ----    ----       ----     ----
Revenue:
  Room revenue                    $86,526 $66,534   $239,975 $179,283
  Other hotel revenue               3,668   3,249     10,316    8,873
  Other revenue                       370     120        595      327
                                   ------ -------   -------- --------
  Total revenue                    90,564  69,903    250,886  188,483

Operating expenses:
  Direct hotel expenses            50,344  39,482    138,152  106,158
  Other hotel expenses              2,807   2,329      7,856    6,535
  Depreciation                     12,298  10,061     35,232   28,991
  Property taxes, rental
   expense and insurance            5,398   4,344     16,072   12,913
  General and administrative 
   expenses:
     Non-cash stock-based 
      compensation                    290     162      1,053      484
     Other general and 
      administrative expenses       1,951   1,662      5,866    5,346
  Loss on impairment of hotels          -       -      2,150        -
                                   ------ -------   -------- --------
Total operating expenses           73,088  58,040    206,381  160,427
                                   ------ -------   -------- -------- 

Operating income                   17,476  11,863     44,505   28,056

Interest expense, net               9,294   7,315     26,041   21,057
                                   ------ -------   -------- --------

Income (loss) from continuing
 operations before minority 
 interests and income taxes         8,182   4,548     18,464    6,999
  Minority interests income 
   (expense)                         (192)    (97)      (311)     (53)
  Deferred income tax benefit 
   (expense)                            -       -          -        -
                                   ------ -------   -------- --------

Income (loss) from continuing 
 operations                         7,990   4,451     18,153    6,946

Discontinued operations:
  Gain (loss) on sale of hotel
   properties                         625       -        625     (320)
  Loss on impairment of hotels
   held for sale                        -       -     (1,350)       -
  Income (loss) from operations of
   discontinued operations             (4)    (43)       (63)    (148)
                                   ------ -------   -------- --------
Income (loss) from discontinued
 operations                           621     (43)      (788)    (468)
                                   ------ -------   -------- --------

Net income (loss)                   8,611   4,408     17,365    6,478

Preferred stock dividends          (1,887) (1,887)    (5,660)  (5,660)
                                   ------ -------   -------- --------

Net income (loss) applicable to
 common shareholders               $6,724  $2,521    $11,705     $818
                                   ====== =======   ======== ========

Net income (loss) per share data:
Basic and diluted income (loss) 
 per share:
  Continuing operations             $0.11   $0.06      $0.23    $0.03
  Discontinued operations            0.01    0.00      (0.01)   (0.01)
                                   ------ -------   -------- --------

Net income (loss) per common share  $0.12   $0.06      $0.22    $0.02
                                   ====== =======   ======== ========

Weighted average number of common 
 shares outstanding, basic and
 diluted                           54,005  45,453     53,360   44,482
                                   ====== =======   ======== ========

                           EQUITY INNS, INC.
 RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED FUNDS FROM OPERATIONS
                  AND CASH AVAILABLE FOR DISTRIBUTION
                              (unaudited)

The following is a reconciliation of net income (loss) to FFO and
AFFO, both applicable to common shareholders, and cash available for
distribution and illustrates the difference in these measures of
operating performance (in thousands, except per share and unit data):

                                    For the Three      For the Nine 
                                    Months Ended       Months Ended 
                                    September 30,      September 30,
                                    -------------      -------------
                                    2005    2004       2005     2004
                                    ----    ----       ----     ----

Net income (loss) applicable to 
 common shareholders               $6,724  $2,521    $11,705     $818

Add (subtract):
    (Gain) loss on sale of hotel 
     properties                      (625)      -       (625)     320
    Minority interests (income) 
     expense                          192      97        311       53
    Depreciation                   12,298  10,061     35,232   28,991
    Depreciation from discontinued
     operations                        37     201        250      605
                                  ------- -------    -------  -------

Funds From Operations (FFO)        18,626  12,880     46,873   30,787

Loss on impairment of hotels            -       -      3,500        -
Fees incurred on indefinitely 
 postponed unsecured offering           -       -        245        -
                                  ------- -------    -------  -------

Adjusted Funds From Operations 
 (AFFO)                            18,626  12,880     50,618   30,787

Add:
  Amortization of debt issuance 
   costs                              482     431      1,688    1,236
  Amortization of deferred 
   expenses and stock-based
   compensation                       340     201      1,139      596
  Amortization from discontinued 
   operations                           1       8         10       22
Capital reserves                   (3,461) (2,661)    (9,599)  (7,171)
                                  ------- -------    -------  -------

Cash Available for Distribution   $15,988 $10,859    $43,856  $25,470
                                  ======= =======    =======  =======

Weighted average number of diluted 
 common shares and Partnership 
 units outstanding                 55,393  46,709     54,774   45,663
                                  ======= =======    =======  =======

FFO per Share and Unit              $0.34   $0.28      $0.86    $0.67
                                  ======= =======    =======  =======

AFFO per Share and Unit             $0.34   $0.28      $0.92    $0.67
                                  ======= =======    =======  =======

Cash Available for Distribution 
 per Share and Unit                 $0.29   $0.23      $0.80    $0.56
                                  ======= =======    =======  =======

                           EQUITY INNS, INC.
        RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
                              (unaudited)

The following is a reconciliation of net income (loss) applicable to
common shareholders to Adjusted EBITDA and illustrates the difference
in these measures of operating performance (in thousands):

                                    For the Three      For the Nine 
                                    Months Ended       Months Ended 
                                    September 30,      September 30,
                                    -------------      -------------
                                    2005    2004       2005     2004
                                    ----    ----       ----     ----
Net income (loss) applicable to
 common shareholders               $6,724  $2,521    $11,705     $818

Add (subtract):
  Preferred stock dividends         1,887   1,887      5,660    5,660
  (Income) loss from discontinued
   operations                        (621)     43        788      468
  Minority interests (income) 
   expense                            192      97        311       53
  Interest expense, net             9,294   7,315     26,041   21,057
  Loss on impairment of hotels          -       -      2,150        -
  Depreciation                     12,298  10,061     35,232   28,991
  Amortization of deferred 
   expenses and stock-based 
   compensation                       341     209      1,149      618
                                  ------- -------    -------  -------

Adjusted EBITDA                   $30,115 $22,133    $83,036  $57,665
                                  ======= =======    =======  =======

                           EQUITY INNS, INC.
                     2005 FORECAST RECONCILIATION
                              (unaudited)

The following is a reconciliation of the Company's 2005 forecast of
net income (loss) to FFO and AFFO, both applicable to common
shareholders, and Adjusted EBITDA, and illustrates the difference in
these measures of operating performance (in thousands, except per
share and unit data):

                                Three Months Ended Twelve Months Ended
                                December 31, 2005   December 31, 2005
                                ------------------ -------------------
                                Low End  High End  Low End   High End
                                 Range    Range     Range     Range
                                -------  --------  -------   --------

FFO AND AFFO RECONCILIATION:

Net income (loss) applicable to 
 common shareholders            $(3,000) $(2,000)   $8,700    $9,700

Add (subtract):
    (Gain) loss on sale of hotel 
     properties                       -        -      (625)     (625)
    Minority interests (income) 
     expense                       (160)    (150)      140       150
    Depreciation                 12,800   12,800    48,000    48,000
                                -------  --------  -------   --------

Funds From Operations (FFO)       9,640   10,650    56,215    57,225

Loss on impairment of hotels          -        -     3,500     3,500
Fees incurred on indefinitely 
 postponed unsecured offering         -        -       245       245
                                -------  --------  -------   --------

Adjusted Funds From Operations 
 (AFFO)                          $9,640  $10,650   $59,960   $60,970
                                =======  ========  =======   ========

Weighted average number of 
 diluted common shares and 
 Partnership units outstanding   55,393   55,393    54,930    54,930
                                =======  ========  =======   ========

FFO per Share and Unit            $0.17    $0.19     $1.02     $1.04
                                =======  ========  =======   ========

AFFO per Share and Unit           $0.17    $0.19     $1.09     $1.11
                                =======  ========  =======   ========


ADJUSTED EBITDA RECONCILIATION:

Net income (loss) applicable to 
 common shareholders            $(3,000) $(2,000)   $8,700    $9,700

Add (subtract):
  Preferred stock dividends       1,850    1,850     7,550     7,550
  (Income) loss from 
   discontinued operations            -        -       800       800
  Minority interests (income)
   expense                         (160)    (150)      140       150
  Interest expense, net           9,185    9,675    35,185    35,675
  Loss on impairment of hotels        -        -     2,150     2,150
  Depreciation                   12,800   12,800    48,000    48,000
  Amortization of deferred 
   expenses and stock-based 
   compensation                     325      325     1,475     1,475
                                -------  --------  -------   --------

Adjusted EBITDA                 $21,000  $22,500  $104,000  $105,500
                                =======  ========  =======   ========

                           Equity Inns, Inc.

                           Hotel Performance

        For the Three Months Ended September 30, 2005 and 2004

                          All Comparable (1)

                           RevPAR (2)      Occupancy         ADR
                          -------------  -------------  -------------
                   # of         Variance       Variance       Variance
                  Hotels  2005  to 2004  2005  to 2004  2005  to 2004
                  ------  ----  -------  ----  -------  ----  -------
Portfolio                                        1.6
                   122   $66.52   8.9%   75.6%   pts.  $87.99   6.6%

Franchise 
 AmeriSuites                                    -0.6
                    18   $58.03   8.4%   72.9%   pts.  $79.55   9.3%
 Comfort Inn                                     3.3
                     2   $71.03  16.0%   73.4%   pts.  $96.77  10.7%
 Courtyard                                       2.2
                    11   $75.43   6.9%   79.8%   pts.  $94.56   3.9%
 Hampton Inn                                     3.4
                    51   $59.53  12.8%   73.2%   pts.  $81.29   7.5%
 Hampton Inn &                                   0.0
  Suites             2   $68.69   6.2%   73.7%   pts.  $93.22   6.3%
 Hilton Garden                                  -4.9
  Inn                2   $67.62   2.7%   69.5%   pts.  $97.29   9.9%
 Holiday Inn                                     5.9
                     4   $48.54  10.9%   71.2%   pts.  $68.17   1.6%
 Homewood                                        2.1
  Suites            10   $88.86   8.5%   83.8%   pts. $106.09   5.9%
 Residence                                      -2.9
  Inn               20   $81.00   2.1%   80.2%   pts. $101.01   5.8%
 SpringHill                                      2.2
  Suites             2   $75.31   8.5%   81.5%   pts.  $92.43   5.6%

Region
 East North                                      0.6
  Central           18   $66.88   5.8%   74.1%   pts.  $90.28   5.0%
 East South                                      2.7
  Central           16   $63.47  11.2%   77.8%   pts.  $81.61   7.4%
 Middle                                          0.3
  Atlantic           6   $83.34  -1.5%   76.5%   pts. $108.92  -1.9%
 Mountain                                        3.7
                    10   $63.55  15.2%   77.6%   pts.  $81.89   9.7%
 New England                                     3.2
                     7   $66.19   9.7%   72.5%   pts.  $91.26   4.8%
 Pacific                                         1.6
                     2  $105.51  11.3%   89.9%   pts. $117.43   9.3%
 South                                          -0.2
  Atlantic          46   $65.58   8.0%   75.3%   pts.  $87.09   8.3%
 West North                                     -2.8
  Central            7   $65.63   7.0%   74.6%   pts.  $87.99  11.0%
 West South                                      8.9
  Central           10   $57.46  19.7%   73.0%   pts.  $78.69   5.2%

Type
 All Suite                                      -0.6
                    18   $58.03   8.4%   72.9%   pts.  $79.55   9.3%
 Extended                                       -0.9
  Stay              30   $84.14   4.7%   81.6%   pts. $103.10   5.9%
 Full                                            7.1
  Service            5   $57.18  15.0%   72.3%   pts.  $79.10   3.7%
 Limited                                         2.7
  Service           69   $62.29  10.9%   74.1%   pts.  $84.08   6.9%

(1) All Comparable is defined as our system-wide gross lodging
    revenues for hotels that the Company owns at period end.

(2) RevPAR is calculated by taking the Company's average daily rate
    (ADR) times occupancy.

                           Equity Inns, Inc.

                           Hotel Performance

         For the Nine Months Ended September 30, 2005 and 2004

                          All Comparable (1)

                           RevPAR (2)      Occupancy         ADR
                          -------------  -------------  -------------
                   # of         Variance       Variance       Variance
                  Hotels  2005  to 2004  2005  to 2004  2005  to 2004
                  ------  ----  -------  ----  -------  ----  -------
Portfolio                                        2.1
                   122   $65.04  10.5%   73.3%   pts.  $88.76   7.3%

Franchise
 AmeriSuites                                     0.6
                    18   $54.80   9.1%   69.4%   pts.  $78.91   8.2%
 Comfort Inn                                    -3.5
                     2   $68.41   8.1%   69.1%   pts.  $99.05  13.5%
 Courtyard                                       2.4
                    11   $76.64   7.4%   80.6%   pts.  $95.11   4.2%
 Hampton Inn                                     4.0
                    51   $58.18  14.6%   70.8%   pts.  $82.19   8.2%
 Hampton Inn                                     2.3
  & Suites           2   $84.32  15.4%   78.5%   pts. $107.37  12.1%
 Hilton                                         -0.3
  Garden Inn         2   $81.36  12.2%   73.5%   pts. $110.68  12.6%
 Holiday Inn                                     4.1
                     4   $42.99   6.9%   64.8%   pts.  $66.33   0.2%
 Homewood                                        1.9
  Suites            10   $85.74   8.0%   80.5%   pts. $106.53   5.5%
 Residence                                      -1.3
  Inn               20   $78.77   6.2%   78.8%   pts.  $99.99   7.9%
 SpringHill                                      1.6
  Suites             2   $63.88   7.4%   73.8%   pts.  $86.53   5.1%

Region
 East North                                      3.2
  Central           18   $59.29   9.0%   68.0%   pts.  $87.15   3.9%
 East South                                      2.4
  Central           16   $59.94   9.7%   74.4%   pts.  $80.57   6.2%
 Middle                                         -1.3
  Atlantic           6   $72.96   1.3%   71.4%   pts. $102.19   3.1%
 Mountain                                        4.0
                    10   $64.96  15.1%   76.1%   pts.  $85.35   9.1%
 New England                                     2.2
                     7   $58.85   8.6%   66.7%   pts.  $88.28   4.9%
 Pacific                                         2.6
                     2   $88.21   9.8%   81.0%   pts. $108.97   6.2%
 South                                           0.6
  Atlantic          46   $70.52  10.9%   76.3%   pts.  $92.46  10.0%
 West North                                     -0.1
  Central            7   $58.87  10.6%   68.9%   pts.  $85.42  10.7%
 West South                                      7.2
  Central           10   $57.81  16.6%   72.6%   pts.  $79.67   5.0%

Type
 All Suite                                       0.6
                    18   $54.80   9.1%   69.4%   pts.  $78.91   8.2%
 Extended                                        0.0
  Stay              30   $81.56   6.9%   79.5%   pts. $102.64   6.9%
 Full                                            2.1
  Service            5   $52.55   8.1%   66.8%   pts.  $78.69   4.7%
 Limited                                         3.5
  Service           69   $62.07  13.1%   72.3%   pts.  $85.80   7.6%

(1) All Comparable is defined as our system-wide gross lodging
    revenues for hotels that the Company owns at period end.

(2) RevPAR is calculated by taking the Company's average daily rate
    (ADR) times occupancy.
*T