Exhibit 99.1
 

EQUITY INNS ANNOUNCES FOURTH QUARTER AND YEAR END 2006 RESULTS
 
- Fourth Quarter AFFO Reaches Top End of Guidance Range at $0.22 per Share -
 
- Fourth Quarter Adjusted EBITDA Grows 15.8% -
 
- Acquires $160 Million of Marriott and Hilton Branded Hotels in 2006 -
 
- Gross Operating Profit Margin Increases 120 bps to 44.1% in 2006 -
 
- Provides Initial 2007 FFO Guidance of $1.40 to $1.48 per Share -
 

GERMANTOWN, Tenn., February 14, 2007 -- Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate investment trust (REIT), today announced its results for the three months and the full year ended December 31, 2006.
 
Adjusted funds from operations (AFFO) per diluted share for the three-months ended December 31, 2006 was $0.22, the same as for the three-month period ended December 31, 2005. Adjusted EBITDA rose 15.8% to $27.9 million in the fourth quarter 2006 as compared to $24.1 million in the fourth quarter 2005. Net loss applicable to common shareholders for the fourth quarter 2006 was ($3.2) million, or ($0.06) per diluted share, as compared to a net loss of ($4.9) million, or ($0.09) per diluted share in the prior year. During the fourth quarter 2006, the Company recorded a $580,000 non-cash impairment loss related to a write-down of hotel furniture, fixtures and equipment at its Jacksonville Beach hotel after receiving insurance proceeds related to Hurricane Frances, which occurred in late 2004. This loss was the only difference between funds from operations (FFO) and AFFO for the fourth quarter 2006.
 
For the full year ended December 31, 2006, Equity Inns reported a 13.2% increase in AFFO per diluted share to $1.29, as compared to $1.14 per diluted share for the full year ended 2005. Adjusted EBITDA increased 21.2% to $127.0 million for the full year ended December 31, 2006. Net income applicable to common shareholders for the full year ended December 31, 2006 was $9.3 million, or $0.17 per diluted share, as compared to net income of $6.9 million, or $0.13 per diluted share in the prior year.
 
Mr. Howard A. Silver, President and Chief Executive Officer, commented, “In 2006, we grew hotel revenues by over 20% and Adjusted EBITDA by a robust 21%. We accomplished this through a combination of strong internal growth driven by a solid increase in average daily rate along with the external growth propelled by a focused acquisition strategy in which we acquired nearly $160 million of hotels at accretive capitalization rates. Equity Inns produced these successful operating results during a year that included a number of planned large renovations and despite the absence of major hurricanes which added significant business to our hotels in 2004 and 2005.”

 
Financial Highlights for the Fourth Quarter and Full Year 2006:
 
Total hotel revenue increased 14.0% to $92.8 million for the fourth quarter 2006 as compared to $81.4 million for the fourth quarter 2005. Of the Company’s total hotel revenue increase of $11.4 million, $7.5 million was due to net incremental revenue from hotel acquisitions and $3.9 million was due to improved same-store results. The Company’s all comparable revenue per available room (RevPAR) growth of 4.3% was stronger than initially expected in the fourth quarter 2006. This growth was driven by a 6.9% increase in average daily rate (ADR) to $96.50, partially offset by a 170 basis point decline in occupancy to 67.0%. The occupancy decline is primarily attributable to the impact of reduced hurricane-related demand at the Company’s 25 Florida hotels, as compared to the fourth quarter 2005.  The Company’s total hotel revenue for the full year ended December 31, 2006 was $385.6 million, an increase of 20.3% from $320.6 million for the full year ended December 31, 2005. RevPAR increased 6.5% for the full year 2006 as compared to 2005, driven by 7.7% growth in ADR, offset slightly by an 80 basis point decline in occupancy.
 


The following information was filed by W2007 Grace Acquisition I Inc (ENN) on Wednesday, February 14, 2007 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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