Crescent Operating Announces Results of Annual Meeting.

Business Editors

FORT WORTH, Texas--(BUSINESS WIRE)--Dec. 6, 2001

Crescent Operating, Inc, ("Crescent Operating" or the "Company") (OTCBB:COPI.OB) today announced the results of its Annual Meeting of Stockholders, held December 6, 2001.

The Company's stockholders approved each item submitted to them for vote at the Annual Meeting as described in the Company's proxy statement for the meeting, including certain major interrelated and mutually dependent asset sale, restructuring and financing transactions submitted as parts of a single proposal (the "Restructuring Proposal"). The other proposals approved by the Company's stockholders were the election of Richard E. Rainwater and Anthony E. Frank to new three-year terms on the Company's Board of Directors and ratification of the appointment of Ernst & Young LLP as the Company's independent auditors for the fiscal year ending December 31, 2001.

The receipt of stockholder approval of the Restructuring Proposal satisfies one of several conditions to the closing of the transactions included in the Restructuring Proposal. As disclosed in the Company's proxy statement for the Annual Meeting and again in its quarterly report on Form 10-Q filed November 14, 2001, Crescent Machinery is currently in payment default on certain major loans from commercial lending institutions. Among the other conditions to the closing of the transactions included in the Restructuring Proposal is the consent of Crescent Machinery's secured lenders, including those institutions. Crescent Machinery is currently negotiating with these lenders regarding these defaults and the possible restructuring of the loans. The differences in the positions of the lenders and Crescent Machinery are significant and, as a result, management is not optimistic that an agreement will be reached with these lenders. Without the consent of the lenders, it is unlikely that the Restructuring Proposal will be consummated. Any failure by the Company to consummate the transactions included in the Restructuring Proposal would greatly impair the Company's prospects to continue to operate as a going concern.

Forward-Looking Statements

In addition to any forward-looking statements contained in this press release, the future operations of COPI and its subsidiaries may be affected by one or more of the following factors:

-- the inability of the Company to pay its ongoing and deferred obligations to
Crescent Real Estate Equities Limited Partnership, the operating partnership of
Crescent Real Estate Equities Company (NYSE:CEI) as they come due which is
likely in the absence of a successful restructuring of the Company or infusion
of equity,

-- the high levels of debt that the Company maintains and the Company's current
inability to generate revenue sufficient to meet debt service payments, other
obligations and operating expenses,

-- the availability of equity and debt financing that likely will be necessary
to maintain the Company's operations and investments,

-- the current and continuing 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, 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 proxy statement for the Annual Meeting, annual reports on Form 10-K, particularly for the year ended December 31, 2000, quarterly reports on Form 10-Q, particularly for the quarter ended September 30, 2001, and current reports on Form 8-K.

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.