CNL Hotels & Resorts Reports Results for Second Quarter 2005

. October 14, 2008

FLORIDA, August 16, 2005. CNL Hotels & Resorts, Inc., the nation's second largest hotel real estate investment trust ("REIT"), today announced results for the second quarter ended June 30, 2005. The following results are compared to the second quarter or year-to-date periods ended June 30, 2004.

Second Quarter & Year-to-Date Highlights

Total revenue increased 9.0% to $391.4 million for the quarter, and 40.1% to $791.0 million year-to-date.
Revenue per available room ("RevPAR") increased 7.8% for the quarter, resulting from a 2.0 percentage point increase in occupancy to 77.0% and a 5.1% increase in average daily room rate ("ADR"). RevPAR increased 9.5% year- to-date.
Hotel and resort EBITDA margin was 31.5% for the quarter, representing a 1.5 percentage point increase. Hotel and resort EBITDA margin increased 1.3 percentage points to 31.9% year-to-date.
Net income increased 1,398% to $32.9 million for the quarter, and increased 710% to $41.8 million year-to-date.
Adjusted EBITDA, as defined in the attached Notes to Financial and Portfolio Information, increased 5.3% to $109.9 million for the quarter, and 46.4% to $232.0 million year-to-date.
Adjusted Funds from Operations, as defined in the attached Notes to Financial and Portfolio Information, per diluted share decreased 13.5% to $0.32 for the quarter, and increased 22.2% to $0.77 year-to-date.
Approximately $413 million of long-term debt was retired during the quarter with sales proceeds received from the disposition of 31 non-strategic assets.

"We are pleased with our second quarter results which reflect our strategy of maximizing internal growth through superior portfolio management and value- enhancing capital reinvestment," stated Thomas J. Hutchison III, chief executive officer. "Our successful effort to sell non-strategic assets during an advantageous market underscores our commitment to strengthen our balance sheet while maintaining our position as a leading owner of distinctive lodging assets."

Operating Performance

RevPAR for the Company's 94 adjusted comparable properties increased by 7.8% to $107.80 in the second quarter as compared to the same period of 2004, resulting from a 2.0 percentage point increase in occupancy to 77.0% and a 5.1% gain in ADR to $139.98. Total adjusted comparable properties EBITDA margin improved in the second quarter by 1.5 percentage points to 31.5%. For the six months ended June 30, 2005, adjusted comparable RevPAR increased by 9.5% to $109.02, resulting from a 5.5% gain in ADR to $144.70 and a 2.7 percentage point increase in occupancy to 75.3%.

RevPAR for the Company's consolidated 35 luxury resort and upper-upscale properties posted an increase of 5.7% to $126.50 for the quarter, and EBITDA margin improved by 1.7 percentage points. Year-to-date, RevPAR for these properties increased 7.7% and EBITDA margin improved by 1.0 percentage points. The Company's 49 properties, which have undergone or are currently undergoing a change in management company or brand affiliation and/or repositioning through renovation, have posted a RevPAR gain of 12.4% and EBITDA margin improved 2.2 percentage points for the quarter. Year-to-date, RevPAR for these properties increased 15.3% and EBITDA margin improved by 3.6 percentage points.

John A. Griswold, president and chief operating officer, stated, "We posted solid RevPAR gains this quarter, which we were pleased with considering the double-digit growth we experienced in 2004. We continue to see improvement in our strong margins, propelled by a favorable room rate environment, robust group travel and our ability to influence cost containment efforts by our third-party management companies."

Balance Sheet & Financing Activities

The Company reduced long-term debt by $413 million with proceeds from the sale of 31 non-strategic assets. The Company, through its partnership in the JW Marriott Desert Ridge Resort & Spa, also refinanced the construction debt for the property ahead of schedule, reducing the cost of debt for the partnership.

"We remain focused on effectively managing our corporate capital structure, as reflected by our recent significant debt reductions and favorable refinancing," stated C. Brian Strickland, executive vice president and chief financial officer. "In alignment with our strategic objectives, we will continue to evaluate our portfolio for opportunities to harvest value and recycle capital in order to enhance our financial flexibility."

The Company's board of directors previously declared a second quarter distribution rate of $0.25 per share, which it expects to sustain for the remainder of 2005.

Non-Strategic Dispositions

During the second quarter, as previously announced, the Company completed the sale of 30 hotel properties to affiliates of Ashford Hospitality Trust, Inc., with a gain of $41.5 million, net of a loss on extinguishment of debt of $7.7 million, as well as the sale of the Holiday Inn Express in Austin, Texas.

The Company also entered into an agreement with Pyramid Hotel Opportunity Venture LLC to sell five hotel properties for $109 million, with an estimated total net gain of $2.1 million, net of an estimated loss on extinguishment of debt of $2.5 million. The Company purchased the five properties - the Doubletree Hotel San Diego/Del Mar, Hotel Rex, Beverly Heritage, Hilton San Francisco Fisherman's Wharf and Holiday Inn Columbia - in 2003 through its acquisition of RFS Hotel Investors, Inc. and expects to complete the transaction in the third quarter of 2005.

Year-to-date, the Company has sold 32 non-strategic hotels and is under contract to sell five additional properties for cumulative proceeds of $582.3 million. Proceeds from the sales are being used to primarily pay down existing long-term debt, as well as for general corporate expenses.

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