Crescent Operating Announces Its Annual Meeting

Press Release: Crescent Operating, Inc.
November 2, 2001
FORT WORTH, TX -- Crescent Operating, Inc, (``Crescent Operating'' or the ``Company'') (OTCBB:COPI.OB) yesterday announced the mailing of its proxy statement for the annual meeting of shareholders to be held on December 6, 2001 at the Fort Worth Club, located at 306 West 7th Street, Fort Worth, Texas.

At the meeting, shareholders will be asked to vote on a number of items relating to the sale of assets and capital infusion previously announced by the Company on June 29, 2001. Shareholders of record at the close of business on October 3, 2001 will receive a proxy statement and are entitled to vote at the annual meeting.

FORWARD-LOOKING STATEMENTS

This press release contains 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. These statements are generally characterized by terms such as ``believe,'' ``expect,'' ``may'' and ``will.''

Although the Company believes that the expectations reflected in its forward-looking statements are based upon reasonable assumptions, actual results could differ materially from those given in the forward-looking statements.

The following factors might cause such a difference:

• the inability of the Company to consummate the previously announced agreements for the sale of assets within its Hospitality and Land Development segments and for capital infusions into its Equipment Sales and Leasing segment,
• the inability of the Company to pay its obligations to Crescent Real Estate Equities Limited Partnership, the operating partnership of Crescent Real Estate Equities Company (NYSE:CEI - news) as they come due which is probable in the absence of a successful restructuring of the Company or infusion of equity,
• the relatively high levels of debt that the Company maintains and the Company's ability to generate revenue sufficient to meet debt service payments and other operating expenses,
• the availability of equity and debt financing that may be necessary or advantageous to expand or maintain the Company's operations and investments,
• the underperformance or non-performance of the Company's existing business investments,
• any unfavorable resolution of issues that relate to the bankruptcy petition of Charter Behavioral Health Systems, LLC (``CBHS''), including, but not limited to, judgments against the Company in respect of lawsuits instituted in connection with the closure of certain CBHS facilities prior to CBHS's filing bankruptcy,
• the impact of terrorism acts on the industries in which the Company's business and investments operate (including equipment sales and leasing, hospitality, temperature controlled logistics and land development); and
• the impact of changes in the industries in which the Company's businesses and investments operate (including equipment sales and leasing, hospitality, temperature controlled logistics and land development) and the economic, demographic and other competitive conditions affecting those industries, the Company's cash flows and the value of the Company's investments.

For a more complete discussion of these and other risk factors, please see the Company's SEC reports, including its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and Registration Statements on Forms S-1 and S-4, and especially including its annual report on Form 10-K for the year ended December 31, 2000, its quarterly report on Form 10-Q for the quarters ended March 31, 2001 and June 30, 2001, and its proxy statement filed today for the December 2001 annual meeting of shareholders.

Given these uncertainties, readers are cautioned not to place undue reliance on such statements. The Company is not obligated to update these forward-looking statements to reflect any future events or circumstances.

ABOUT THE COMPANY

Crescent Operating is a diversified management company which through various subsidiaries and affiliates, owns, leases or operates a portfolio of assets consisting primarily of three business-class hotels, five luxury resorts and spas, an interest in a temperature controlled logistics operating company, an interest in three residential developments, and an equipment sales and leasing business.

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Contact: 

     Crescent Operating, Inc., Fort Worth
     Jeffrey L. Stevens, 817/339-2210