CNL Inc. Reports Net Income

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. October 14, 2008

ORLANDO, FL, August 15, 2006. CNL Hotels & Resorts, Inc., the nation's second largest hotel real estate investment trust, today announced results for the second quarter ended June 30, 2006. The following results are compared to the second quarter ended June 30, 2005 or year-to-date period ended June 30, 2005, and where applicable, defined terms are included in the Notes to Financial and Portfolio Information section of this news release.

Second Quarter Performance Highlights

--Total revenue increased 28.5% to $436.3 million, and 20.1% to $841.1 million year-to-date.

--RevPAR for adjusted comparable properties increased 10.5% and RevPAR for comparable properties increased 10.9%. Year-to-date, RevPAR for adjusted comparable properties increased 9.0% and RevPAR for comparable properties increased 10.3%.

Hotel and resort operating profit margin for adjusted comparable properties was 32.5%, representing a 1.4 percentage point increase.

--Net income increased $5.2 million to $47.0 million year-to-date.

--Adjusted EBITDA increased 29.3% to $119.1 million, and 19.9% to $242.9 million year-to-date.

--Adjusted FFO per diluted share increased 32.1% to $0.37, and 16.7% to $0.84 year-to-date.

Thomas J. Hutchison III, chief executive officer, stated, "We are aggressively pursuing opportunities to build on our distinctive portfolio of high-end assets and are continuing to deliver consistent operating performance. Employing our disciplined ownership strategy, we maximized inherent growth in the portfolio as evidenced by another strong quarter of RevPAR growth and operating profit margin. We acquired the remaining interests in the JW Marriott Desert Ridge Resort & Spa and the Courtyard San Francisco Downtown -- two extraordinary assets with significant revenue growth potential -- and capitalized on healthy fundamentals with the sale of two non-core properties. Our management will build on this momentum to further our position as a leading lodging company, continuing to execute a focused business plan, prudent ownership initiatives and superior portfolio performance."

Operating Performance

RevPAR for the Company's 90 adjusted comparable properties increased 10.5% to $119.62 in the second quarter compared to the same period in 2005, driven by a 9.1% gain in ADR to $155.19, representing 86.7% of RevPAR growth. This strong rate component of RevPAR growth positively impacted hotel and resort operating profit margin, which increased 140 basis points to 32.5% despite escalating insurance and energy costs. Year-to-date, RevPAR for these adjusted comparable properties increased 9.0% and hotel and resort operating profit margin improved by 0.6 percentage points.

RevPAR for the Company's 88 comparable properties increased 10.9% to $115.65 in the second quarter compared to the same period in 2005, resulting from a 0.9 percentage point increase in occupancy to 77.0% and a 9.6% gain in ADR to $150.11. For the 88 comparable properties, hotel and resort operating profit margin increased in the second quarter by 1.5 percentage points to 32.5%. For the six months ended June 30, 2006, RevPAR for the Company's comparable properties increased by 10.3% to $118.62, resulting from a 9.0% gain in ADR to $156.73 and a 1.0 percentage point increase in occupancy to 75.7%. In addition to strong rooms performance, food and beverage revenue for the Company's 88 comparable properties experienced double-digit growth for the quarter.

"Strong demand growth relative to the muted supply growth continues to lift rates, positively impacting margins and reinforcing our position in the upside of the lodging cycle. Our results benefited by the solid performance this quarter in our relative markets, particularly Dallas, Seattle and Hawaii," stated John A. Griswold, president and chief operating officer. "Overall, the group booking pace has strengthened and we expect our new ballroom developments at Doral Golf Resort & Spa, JW Marriott Desert Ridge Resort & Spa and The Ritz-Carlton Orlando to further enhance performance once completed."

Balance Sheet & Financing Activities

During the second quarter, the Company continued to take advantage of favorable capital markets. In April 2006, one of the Company's consolidated partnerships obtained a new $120 million loan at a fixed rate of 5.47% for five years. The Company used the new loan proceeds to refinance $96.5 million in existing debt, both decreasing the partnership's cost of capital and providing a return of capital to the Company. In June 2006, the Company increased its senior secured revolving credit facility from $200 million to $240 million.

"We were pleased with our continued ability this past quarter to enhance liquidity, lock in favorable interest rates and extend maturity dates," stated C. Brian Strickland, executive vice president and chief financial officer.

Acquisitions

On May 19, 2006, the Company acquired the remaining interests in the JW Marriott Desert Ridge Resort & Spa in Phoenix, Arizona. The remaining 56% venture-interests were purchased from Desert Ridge Resort, Ltd. and Marriott Hotel Services, Inc. for an aggregate purchase price of approximately $65 million. The 950-room resort is surrounded by the McDowell Mountains and features nine distinctive dining experiences, a luxurious 28,000-square-foot European spa, magnificent swimming pools, an eight-court tennis pavilion and world-class golf on two 18-hole championship courses. The property features 200,000 square feet of indoor and outdoor meeting space, with an additional 10,000 square feet of meeting space in the early stages of development.

On June 16, 2006, the Company acquired the remaining 51.85% interest in the Courtyard San Francisco Downtown hotel from Marriott International, Inc. for approximately $10 million, representing an implied valuation of approximately $79.5 million for the property. The 405-room hotel includes 31 suites, meeting rooms, two on-site restaurants, a fitness center and indoor pool. The 18-story hotel is conveniently located minutes away from the Moscone Convention Center, AT&T Park, Union Square and the San Francisco Museum of Modern Art.

Dispositions

On April 28, 2006, the Company sold two non-core Wyndham hotels to an affiliate of The Blackstone Group for $42.5 million with an estimated net gain of approximately $5.2 million. Subsequent to the second quarter, on July 17, 2006, the Company entered into an agreement with Hersha Hospitality Trust to sell its 66.7% interest in the partnership that owns the 144-room Hampton Inn Chelsea in New York. The sales price was based on a valuation of $54.0 million for the property, resulting in an estimated net gain of approximately $17 million. The transaction is expected to close in the third quarter of 2006 subject to closing conditions, although there can be no assurance that the sale will be completed.

Capital Projects

Total capital expenditures were approximately $61.4 million as of June 30, 2006, with an additional $100.4 million planned for the remainder of 2006. Notable projects underway at core properties include a spa expansion at Arizona Biltmore Resort & Spa, a new signature pool at La Quinta Resort & Club and ballroom expansions at Doral Golf Resort & Spa, The Ritz-Carlton Orlando and JW Marriott Desert Ridge Resort & Spa.