�Nineteen ninety-nine was a very exciting year for Four Seasons. We opened more hotels in a single year than ever before in our nearly 40-year history. Each of these new Four Seasons properties is an important addition to our portfolio. But in particular we believe that the Four Seasons Hotel, George V Paris, which reopened in late December of 1999 after a complete renovation, will be a pivotal addition to our European portfolio and should increase the global awareness of the Four Seasons brand,� said Isadore Sharp, Chairman and Chief Executive Officer. �Nineteen ninety-nine was also a year of solid performance at the other hotels under our management and a year when we made further improvements to our balance sheet which should ensure that we have the financial flexibility to continue to grow.�

Consolidated revenues increased 11.9% to $ 277.5 million for the year ended December 31, 1999, as compared to $247.9 million in 1998.

OPERATING IMPROVEMENTS

The US Core Hotels(1) continued their solid operating performance in the fourth quarter of 1999, with an improvement in RevPAR(2), on a US dollar basis, of 7.1% and an improvement in gross operating profits of 8%, as compared to the fourth quarter of 1998. For the full year 1999, RevPAR of the US Core Hotels, on a US dollar basis, increased 6%, while gross operating profits increased 12.4%, as compared to the same period in 1998.  In the fourth quarter of 1999, other North American Core Hotels(3) realized an improvement in RevPAR, on a US dollar basis, of 6.7%, while gross operating profits were flat compared to the fourth quarter of 1998. For the full year 1999, other North American Core Hotels experienced a 4.7% increase in RevPAR, on a US dollar basis, and a 5.1% increase in gross operating profits, as compared to the same period in 1998. 

The European Core Hotels� RevPAR, on a US dollar basis, increased 4.6%, and gross operating profits improved 8.1% in the fourth quarter of 1999, compared to the same period in 1998. For the full year 1999, European Core Hotels� RevPAR, on a US dollar basis, declined 3.1% compared to the same period in 1998. Gross operating profits declined 4.4% for the full year 1999 compared to 1998. The decline in European RevPAR, on a US dollar basis, was primarily attributable to reduced occupancy in Istanbul resulting from disrupted travel in the region due to the severe earthquake. In addition, during 1998, Lisbon hosted Expo. As a result, that market experienced lower occupancy levels in 1999, as compared to the same period in 1998.

During the fourth quarter of 1999, RevPAR in the Company�s Asian Core Hotels, on a US dollar basis, increased 8%, while gross operating profits increased 14.2%, as compared to the fourth quarter of 1998. This strong improvement reflects market stabilization in destinations such as Hong Kong, Bali and Tokyo. Nonetheless, other markets, including Jakarta and Kuala Lumpur continue to operate under difficult economic conditions. For the full year 1999, RevPAR, on a US dollar basis, for the Asian Core Hotels increased 4.7% and gross operating profits increased 18.8%, as compared to the same period in 1998.

�During the fourth quarter, we were pleased to see strong operating results in all of the regions in which we operate. The luxury segment continues to experience solid underlying fundamentals and we expect to see continued RevPAR and gross operating profit improvements in each of the regions this year,� said Wolf Hengst, President and Chief Operations Officer.

REVENUE AND PROFITABILITY GROWTH IN HOTEL MANAGEMENT BUSINESS

Revenues under management for the year ended December 31, 1999 increased 4.4 % to $2.4 billion, as compared to $2.3 billion for the year ended December 31, 1998. Fee revenues increased 13.4% to $144 million for the year ended December 31, 1999, as compared to $126.9 million for the same period in 1998. The Company�s management incentive fees, which are tied to the profitability of certain managed hotels increased to $35.1 million in 1999, as compared to $32.1 million in 1998.

General and administrative expenses increased approximately 10.4% for the fourth quarter of 1999, as compared to the same period in 1998. This planned increase in costs is related to investments in technology as well as additional staffing, primarily in the Company�s regional offices, to facilitate its unit growth expansion.  Management earnings increased 11.6% to $89.1 million for the year ended December 31, 1999, as compared to $79.9 million in 1998. Hotel management earnings before other operating items increased 7.9% to $25.4 million in the fourth quarter of 1999, as compared to $23.5 million in the fourth quarter of 1998. The Company�s hotel management operations contributed approximately 91% of total operating earnings for the year ended December 31, 1999.

For the full year 1999, the Company�s profit margin on its hotel management operations was 61.9%, as compared to 62.9% in 1998. This slight decrease in the profit margin is the result of the planned regional expansion and technology investments discussed above.

HOTEL OWNERSHIP EARNINGS

Included in hotel ownership earnings are the consolidated revenues and expenses from the Company�s 100% interest in The Pierre hotel in New York and the Four Seasons Hotel in Vancouver, dividend distributions from the Company�s 25% in The Regent Hong Kong and other minority interests. Also, upon the signing of the lease amendment for the Four Seasons Hotel Berlin, the Company began consolidating 100% of this investment effective November 30, 1999.

In the fourth quarter of 1999, hotel ownership earnings before other operating items increased 53.5% to $11.5 million ($7.5 million in the fourth quarter of 1998), primarily as a result of operating earnings improvements at The Pierre hotel in New York, and distributions from minority interests. These earnings increases were partially offset by lower earnings from the Four Seasons Hotel Vancouver caused by weak economic conditions in that market.  Hotel ownership earnings before other operating items were $8.4 million for the year ended December 31, 1999, as compared to $8.2 million for the year ended December 31, 1998. During the fourth quarter of 1999, the Company resolved its dispute with the landlord of the Four Seasons Hotel Berlin regarding certain construction deficiencies. The deficiencies will be rectified and Four Seasons has assumed the 100% leasehold interest in the Four Seasons Hotel Berlin. Prior to the resolution of the dispute, the Company had been accruing the start -up losses of the hotel. As of the date of the settlement (November 30,1999), the Company consolidated the results of that hotel.

LOWER NET INTEREST COSTS

The Company had net interest income of $1.3 million in the fourth quarter of 1999, as compared with net interest expense of $960,000 in the fourth quarter of 1998. For the full year 1999, the Company had net interest income of $409,000, as compared to net interest expense of $3.8 million for the comparable period of 1998. These reductions are the result of lower interest costs and increased interest income from investments made in notes receivable in connection with certain of its new projects.

BALANCE SHEET

As at December 31, 1999, the Company�s cash reserves increased to $222.2 million, compared to total long-term debt of $187.1 million. Shareholders� equity was $587.7 million as at December 31, 1999.

INCOME TAX EXPENSE

The Company�s effective tax rate in 1999 was approximately 2.8%, as compared to 2% in 1998. The lower effective tax rate is due primarily to the utilization of the benefits of the unrecorded tax losses created by the write-down in hotel investment values in 1993 and 1995. The Company is expected to realize a more normalized tax cost in the mid-20% range of taxable income in the year 2000.

YEAR 2000 ROLLOVER

No problems were experienced with the transition of our computer systems into the year 2000 either at the properties or the corporate offices. There were no disruptions for our guests or employees as a result of the year 2000 computer systems rollovers.The majority of the year 2000 costs were borne by the owners of our hotels;
Four Seasons share of these costs was less than one million dollars and the majority of these costs were funded in 1999 in connection with the acquisition of new hardware and software assets.

OUTLOOK

�We are pleased that in 1999 we were once again able to exceed our long-term earnings growth target of 20%. In 2000, as a result of the change in the Company�s effective tax rate, net earnings growth will be constrained; however, we expect strong growth in net earnings before taxes. This growth is expected from increased contributions from the recently opened hotels, continued good internal growth in RevPAR and operating profits in all geographic segments and a growing contribution from Four Seasons Residence Club and other residential projects,� said Douglas Ludwig, Executive Vice President and Chief Financial Officer.  Four Seasons Hotels and Resorts is the world�s largest operator of luxury hotels. The Company currently manages 47 hotels in 19 countries. During the year 2000, new Four Seasons hotels and resorts are scheduled to open in Dublin, Cairo, Caracas and Sharm el Sheikh. The following year the Company expects to open new hotels in Prague, San Francisco, Amman, Doha, Shanghai and Riyadh.
 

1. The term �Core Hotels� means hotels and resorts under management for the full year of both 1999 and 1998. Changes from the 1998/1997 Core Hotels are the additions of the Four Seasons Hotel Atlanta, the Four Seasons Resort Aviara and the Four Seasons Hotel, The Ritz Lisbon, and the deletion of The Regent Hotel Sydney (which was temporarily closed for a portion of 1999 for extensive renovations) and the Four Seasons Resort Nevis (which closed for repairs in late November following damage sustained during Hurricane Lenny).

1. Occupancy percentage is defined as the total number of rooms occupied divided by the total number of rooms available.

1. ADR is defined as average daily room rate per room occupied.

1. RevPAR is defined as average room revenue per available room. RevPAR is a commonly used indicator of market performance for hotels and represents the combination of the average daily room rate and the average occupancy rate achieved during the period. RevPAR does not include food and beverage or other ancillary revenues generated by a hotel

1. Gross operating margin represents gross operating profit as a percent of gross operating revenue.

All dollar amounts referred to above are Canadian dollars unless otherwise noted.
Certain statements contained in this press release that do not relate to historical information are �forward-looking statements� within the meaning of the United States Private Securities Litigation Reform Act of 1995 and are thus prospective.