8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  January 28, 2004

Extended Stay America, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-13125	36-3996573
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)
100 Dunbar Street Spartanburg, SC 29306
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code:  (864) 573-1600
N/A
(Former name or former address, if changed since last report)

Item 5.  Other Events.

On January 28, 2004, Extended Stay America, Inc. (the “Company”) held its regular conference call to discuss its quarterly earnings and operating results for the period ended December 31, 2003.  In order to more broadly respond to questions raised during that call, the Company issued a press release providing additional clarifying information regarding its financial reporting of repairs and maintenance expenditures and related accounting practices.  The release is incorporated herein by this reference, and is provided as Exhibit 99.1 to this current report.

Item 7.   Financial Statements and Exhibits.

(c)Exhibits.

Exhibit Number	Description of Exhibit
99.1	Press Release, dated January 28, 2004, of Extended Stay America, Inc., providing clarifying information regarding its financial reporting of repairs and maintenance expenditures.

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SIGNATURE

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

Dated: January 28, 2004
	Extended Stay America, Inc.
	By:	/s/ CORRY W. OAKES, III
		Corry W. Oakes, III
		President and Chief Operating Officer

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EX-99.1

Exhibit 99.1

[Extended Stay America, Inc. logo]

EXTENDED STAY AMERICA, INC.

RELEASES CLARIFYING INFORMATION REGARDING ITS FINANCIAL REPORTING OF REPAIRS AND MAINTENANCE EXPENDITURES AND RELATED ACCOUNTING PRACTICES

Spartanburg, SC – January 28, 2004 – Extended Stay America, Inc. (NYSE:ESA), a leading provider of extended stay lodging, today held its regular conference call to discuss its quarterly earnings and operating results.  In order to more broadly respond to questions raised during that call, the Company is providing additional clarifying information regarding its financial reporting of repair and maintenance expenditures and related accounting practices.

Pursuant to the Company’s accounting practices, the Company capitalizes new construction costs, major renewals and improvements, but expenses repairs, maintenance, and replacements as those costs are incurred.  Major renewals and improvements consist of new expenditures for equipment not included in the original construction, while repairs, maintenance, and replacements include, among other items, expenditures to replace case goods, lighting fixtures, flooring, furnishings, and HVAC equipment (“Refurbishment Expenditures”).

In 2002, the Company recorded as part of its property operating expenses $17.6 million in Refurbishment Expenditures, which represented 3.2% of  revenue.  In 2003, the Company recorded Refurbishment Expenditures of $29.3 million.  In 2004, we anticipate Refurbishment Expenditures of approximately $40 million.  The increase in these expenses is primarily attributable to the Company’s practice of significantly refurbishing properties approaching 6 to 7 years old.  The Company opened 230 properties during 1997 and 1998, and expects to complete the refurbishment of a majority of these properties during 2004.  Subsequent to 2004, the number of properties approaching 6 to 7 years of age declines, and we anticipate Refurbishment Expenditures will begin to return to more historical levels.

Certain statements and information included in this release constitute “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995.  Such forward-looking statements 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 any future results, performance or achievements expressed or implied in such forward-looking statements.  Additional discussion of factors that could cause actual results to differ materially from management’s projections, forecasts, estimates and expectations is contained in the Company’s SEC filings.