Four Seasons to redeem Liquid Yield Option(TM) Notes due 2029

Four Seasons to redeem Liquid Yield Option(TM) Notes due 2029



TORONTO, Aug. 23  /PRNewswire-FirstCall/ -- Four Seasons Hotels Inc. (TSX
Symbol "FSH"; NYSE Symbol "FS") today announced that it intends to redeem all
of its Liquid Yield Option(TM) Notes due 2029 (Zero Coupon - Subordinated:
CUSIP 35100EA06) on September 23, 2004 for US$328.73 cash per US$1,000
principal amount at maturity (the redemption price being the issue price plus
interest that is accrued but unpaid to but excluding September 23, 2004). The
redemption of all of the outstanding LYONs for cash would require an aggregate
payment of approximately US$215.5 million, assuming that none of the holders of
LYONs exercised the right to convert the LYONs before their redemption. Four
Seasons intends to fund the redemption of the LYONs with a portion of its
current cash on hand.

In accordance with Canadian generally accepted accounting principles, Four
Seasons will allocate the consideration paid on the redemption to the liability
and equity components of the LYONs based on their relative fair values at the
date of redemption. Depending on interest rates at the date of redemption, Four
Seasons anticipates that it will recognize a pre-tax accounting loss that could
be in the range of $14 million to $44 million related to the debt component of
the LYONs (such amount representing the difference between the carrying value
of the debt component and the allocated relative fair value of the debt
component - estimated at the present value of the LYONs, yielding an assumed
25-year interest rate ranging from 7.5% to 8.5% per annum, compounding
semi-annually). This loss will be recorded in the statement of operations of
Four Seasons in its third quarter. In addition, at these interest rates, Four
Seasons expects to recognize a pre-tax accounting gain on the extinguishment of
the equity component of the LYONs, which could be in the range of approximately
$2 million to $32 million. The gain would be recognized directly in retained
earnings in the third quarter. The amount of the gain and loss is extremely
sensitive to interest rate changes. Based on the foregoing, the expected net
impact on retained earnings from the extinguishment of the debt and equity
components of the LYONs would be a reduction of approximately $12 million,
although the US to Canadian dollar exchange rates will also affect the net
impact.

Holders may convert LYONs into Limited Voting Shares of Four Seasons prior to
the close of business on September 23, 2004, at a conversion rate of 5.284
Limited Voting Shares per US$1,000 principal amount at maturity of LYONs. (Cash
will be paid in lieu of any fractional shares that otherwise would be issued on
conversion.) Four Seasons has the right to acquire LYONs presented for
conversion for cash in lieu of issuing Limited Voting Shares. If Four Seasons
exercises this right, the amount of cash per US$1,000 principal amount at
maturity of LYONs will be equal to the product of the conversion rate and the
closing sale price of a Limited Voting Share on the New York Stock Exchange on
the trading day immediately prior to the conversion date. On August 20, 2004,
the last reported sale price of Limited Voting Shares on the New York Stock
Exchange was US$57.27.

A notice of redemption is being sent by The Bank of Nova Scotia Trust Company
of New York, the U.S. trustee for the LYONs, to the registered holders of
LYONs. Copies of the notice of redemption and additional information relating
to the procedure for redemption may be obtained from The Bank of Nova Scotia
Trust Company of New York by calling [phone]. The Bank of Nova Scotia
Trust Company of New York at One Liberty Plaza, 23rd Floor, New York, New York
10006 is acting as paying agent and conversion agent for the LYONs.

All dollar amounts referred to in this news release are in Canadian dollars
unless otherwise noted.

With a history spanning four decades and a portfolio that extends worldwide,
Four Seasons Hotels and Resorts is the world's leading operator of luxury
hotels, currently managing 64 properties in 29 countries.

This news release contains "forward-looking statements" within the meaning of
federal securities laws. These statements concern anticipated future events,
results, circumstances, performance or expectations that are not historical
facts. These statements are not guarantees of future performance and are
subject to numerous risks and uncertainties that can affect our actual results
and could cause our actual results to differ materially from those expressed or
implied in any forward-looking statement made by us or on our behalf. These
statements are made as of the date of this news release and, except as required
by applicable law, we undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise. 

DATASOURCE: Four Seasons Hotels and Resorts



CONTACT: Douglas L. Ludwig, Chief Financial Officer and Executive Vice

President, [phone]; Barbara Henderson, Vice President Taxation and

Investor Relations, [phone]

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