<PAGE>   1
 
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 26, 1998
 
                                                     REGISTRATION NO. 333-
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ---------------------
                                    FORM S-4
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                             ---------------------
                            CRESCENT OPERATING, INC.
 
             (Exact name of registrant as specified in its charter)
 
<TABLE>
<S>                             <C>                             <C>
           DELAWARE                        6531/9999                      75-2701931
                                                                 (IRS Employer Identification
 (State or other jurisdiction    (Primary Standard Industrial                No.)
      of incorporation or
          organization)           Classification Code Number)
</TABLE>
 
                        306 WEST 7TH STREET, SUITE 1025
                            FORT WORTH, TEXAS 76102
                           TELEPHONE: (817) 339-2200
  (Address, including zip code, and telephone number, including area code, of
                   registrant's principal executive offices)
                             ---------------------
 
                               GERALD W. HADDOCK
                            CRESCENT OPERATING, INC.
                        306 WEST 7TH STREET, SUITE 1025
                            FORT WORTH, TEXAS 76102
                           TELEPHONE: (817) 321-1444
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)
                             ---------------------
                                   Copies to:
                            ROBERT B. ROBBINS, ESQ.
                            SYLVIA M. MAHAFFEY, ESQ.
                        SHAW PITTMAN POTTS & TROWBRIDGE
                              2300 N STREET, N.W.
                             WASHINGTON, D.C. 20037
                             ---------------------
     APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of the Registration Statement.
                             ---------------------
    If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box.  [ ]
 
    If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.  [ ] __________
 
    If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.  [ ] __________
                             ---------------------
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
=======================================================================================================================
                                                            PROPOSED MAXIMUM       PROPOSED MAXIMUM       AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO    AMOUNT TO BE            OFFERING          AGGREGATE OFFERING     REGISTRATION
          BE REGISTERED(1)               REGISTERED        PRICE PER UNIT(2)           PRICE(3)             FEE(4)
-----------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                 <C>                    <C>                    <C>
Common Stock(5)....................      $30,000,000                                 $30,000,000            $8,850
Preferred Stock....................
Common Stock Warrants..............
=======================================================================================================================
</TABLE>
 
(1) Securities registered hereunder may be sold separately, together or as units
    with other Securities registered hereunder.
 
(2) Omitted pursuant to General Instruction J of Form S-4 under the Securities
    Act.
 
(3) Estimated solely for purposes of calculating the registration fee. The
    maximum aggregate offering price of all Securities issued pursuant to this
    Registration Statement will not exceed $30 million.
 
(4) Calculated pursuant to Rule 457(o) under the Securities Act.
 
(5) Including such indeterminate number of shares of Common Stock as may from
    time to time be issued at indeterminate prices or issuable upon exercise of
    the Common Stock Warrants to purchase Common Stock registered hereunder, as
    the case may be. Also including such indeterminate number of shares of
    Common Stock as may from time to time be issued upon conversion of the
    convertible Preferred Stock registered hereunder.
                             ---------------------
     THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
================================================================================
<PAGE>   2
 
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
 
                             SUBJECT TO COMPLETION
 
                   PRELIMINARY PROSPECTUS DATED JUNE 26, 1998
 
                                  $30,000,000
 
                                     [LOGO]
 
                            CRESCENT OPERATING, INC.
 
                                  COMMON STOCK
                        PREFERRED SHARE PURCHASE RIGHTS
                                PREFERRED STOCK
                             COMMON STOCK WARRANTS
 
                             ---------------------
 
     In connection with the acquisition by Crescent Operating, Inc.
(collectively with its affiliates and subsidiaries, "Crescent Operating" or the
"Company") of other businesses, assets or securities, the Company may offer from
time to time, in one or more series, (i) shares of common stock, par value $0.01
per share (the "Common Stock"), (ii) shares of preferred stock, par value $0.01
per share (the "Preferred Stock") and (iii) warrants exercisable for Common
Stock (the "Common Stock Warrants"), with an aggregate public offering price of
up to $30 million in amounts, at prices and on terms to be determined by direct
negotiations with the owners or controlling persons of the businesses, assets or
securities to be acquired by the Company. Each share of Common Stock will be
accompanied by one Preferred Share Purchase Right (a "Right"). The Common Stock,
Preferred Stock and Common Stock Warrants (collectively, the "Securities") may
be offered, separately or together, in separate series, in amounts, at prices
and on terms to be described in one or more supplements to this Prospectus
(each, a "Prospectus Supplement").
 
     No underwriting discounts or commissions will be paid, although finder's
fees may be paid in cash or in Securities from time to time with respect to
specific acquisitions. Any person receiving such fees may be deemed to be an
underwriter within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). See "Plan of Distribution."
 
     SEE "RISK FACTORS" AT PAGE 3 OF THIS PROSPECTUS FOR A DISCUSSION OF CERTAIN
FACTORS RELEVANT TO AN INVESTMENT IN THE SECURITIES.
 
                             ---------------------
 
  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
 EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
   AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
                               CRIMINAL OFFENSE.
 
                             ---------------------
 
           The date of this Prospectus is                     , 1998.
<PAGE>   3
 
                             AVAILABLE INFORMATION
 
     The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy and information statements
and other information can be inspected at the Public Reference Section
maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549 and the following regional offices of the
Commission: Citicorp Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661-2511 and Seven World Trade Center, Suite 1300, New York, New York
10048. Copies of such material can be obtained from the Public Reference Section
of the Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates, as well as from the Commission's
Web Site (http://www.sec.gov). In addition, the Common Stock trades on The
Nasdaq National Market and such reports, proxy and information statements and
other information concerning the Company can be inspected at the offices of The
Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C. 20006.
 
     The Company has filed with the Commission a Registration Statement, of
which this Prospectus is a part, under the Securities Act, with respect to the
Securities offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
Statements contained in this Prospectus as to the contents of any contract or
other documents are not necessarily complete, and, in each instance, reference
is made to the copy of such contract or documents filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference and the exhibits and schedules thereto.
 
                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
 
     The documents listed below have been filed under the Exchange Act by the
Company (Exchange Act file number 0-22725) with the Commission and are
incorporated herein by reference and made a part hereof:
 
          1. The description of the Common Stock and the Rights contained in the
             Company's Registration Statement on Form 8-A filed on June 20, 1997
             registering the Common Stock and the Rights of the Company under
             Section 12(g) of the Exchange Act.
 
          2. The Company's Annual Report on Form 10-K for the year ended
     December 31, 1997.
 
          3. The Company's Quarterly Report on Form 10-Q for the quarter ended
     March 31, 1998.
 
          4. The Company's Current Report on Form 8-K dated January 15, 1998 and
     filed January 22, 1998.
 
          5. The Company's Current Report on Form 8-K dated June 13, 1997 and
     filed July 2, 1997.
 
          6. The Company's Current Report on Form 8-K/A dated June 13, 1997 and
     filed July 30, 1997.
 
          7. The Company's Current Report on Form 8-K dated July 31, 1997 and
     filed August 14, 1997.
 
          8. The Company's Current Report on Form 8-K/A dated July 31, 1997 and
     filed October 14, 1997.
 
          9. The Company's Current Report on Form 8-K dated August 31, 1997 and
             filed September 15, 1997.
 
        10. The Company's Current Report on Form 8-K/A dated August 31, 1997 and
            filed November 14, 1997.
 
        11. The Company's Proxy Statement filed in connection with the Annual
            Meeting of Shareholders of Crescent Operating held on June 8, 1998.
 
     All documents filed subsequent to the date of this Prospectus pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the
termination of the offering of Securities to which this Prospectus relates shall
be deemed to be incorporated by reference in this Prospectus and shall be part
hereof from the date of filing of such documents.
 
                                        i
<PAGE>   4
 
     Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in this
Prospectus (in the case of a statement in a previously filed document
incorporated or deemed to be incorporated by reference herein), in any
Prospectus Supplement relating to a specific offering of Securities or in any
other subsequently filed document that is also incorporated or deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus or any
Prospectus Supplement. Subject to the foregoing, all information appearing in
this Prospectus and each Prospectus Supplement is qualified in its entirety by
the information appearing in the documents incorporated by reference.
 
     THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. COPIES OF THESE DOCUMENTS (OTHER THAN EXHIBITS AND
SCHEDULES THERETO, UNLESS SUCH EXHIBITS OR SCHEDULES ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO THE INFORMATION THAT THIS PROSPECTUS
INCORPORATES) ARE AVAILABLE WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST, FROM
JEFFREY L. STEVENS, SECRETARY, CRESCENT OPERATING, INC., 306 WEST 7TH STREET,
SUITE 1025, FORT WORTH, TEXAS 76102, TELEPHONE (817) 339-2200.
 
                                       ii
<PAGE>   5
 
                                  THE COMPANY
 
     The following summary is qualified in its entirety by the more detailed
information and financial statements, including the Notes thereto, incorporated
by reference in this Prospectus.
 
     Crescent Operating, Inc. (collectively with its affiliates and
subsidiaries, "Crescent Operating" or the "Company," unless otherwise required
by the context), a Delaware corporation, was formed on April 1, 1997 to be the
lessee and operator of certain assets owned or to be acquired by Crescent Real
Estate Equities Limited Partnership ("Crescent Partnership") and to perform an
agreement (the "Intercompany Agreement") between Crescent Operating and Crescent
Partnership, the operating partnership of Crescent Real Estate Equities Company
("Crescent Equities" and, collectively with Crescent Partnership and the other
direct and indirect subsidiaries of Crescent Equities, "Crescent"), pursuant to
which Crescent Operating and Crescent Partnership each has agreed to provide the
other with rights to participate in certain transactions.
 
     The Company's common stock, par value $0.01 per share (the "Common Stock"),
is listed on The Nasdaq National Market under the symbol "COPI."
 
     As of the date of this Prospectus, the Company conducted its operations
through five business segments: (i) Hospitality; (ii) Land Development; (iii)
Equipment Sales and Leasing; (iv) Healthcare; and (v) Refrigerated Warehousing.
The Company's business segments consisted of the following assets which were
owned directly or indirectly by the Company (collectively, the "Assets"):
 
     - The Hospitality Segment, consisting of the Company's lessee interests
       under lease arrangements relating to seven hotels and two destination
       health and fitness resorts (collectively, the "Hospitality Properties"),
       and a two-thirds interest in the Houston Center Athletic Club Venture, a
       joint venture that owns the Houston Center Athletic Club. The nine
       Hospitality Properties, which are located in six states, are the Denver
       Marriott City Center in Denver, Colorado; the Hyatt Regency Beaver Creek
       in Avon, Colorado; the Hyatt Regency Albuquerque in Albuquerque, New
       Mexico; the Canyon Ranch-Tucson in Tucson, Arizona; the Canyon
       Ranch-Lenox in Lenox, Massachusetts; the Ventana Country Inn and Spa in
       Big Sur, California; the Sonoma Mission Inn and Spa in Sonoma County,
       California; The Four Seasons Hotel in Houston, Texas; and the Austin Omni
       Hotel in Austin, Texas. The Company holds its lessee interests through
       subsidiaries.
 
     - The Land Development Segment, consisting of the Company's ownership of
       (i) a 5% economic interest in Desert Mountain Development Corporation,
       the general partner of a partnership that owns a master-planned, luxury
       residential and recreational community in northern Scottsdale, Arizona,
       (ii) a 42.5% general partner interest in The Woodlands Operating Company,
       L.P., which provides management, advisory, landscaping and maintenance
       services to The Woodlands, Texas, (iii) a 2.125% economic interest in The
       Woodlands Land Development Company, L.P., which owns approximately 9,000
       acres for commercial and residential development, as well as a realty
       office, an athletic center and interests in both a title company and a
       mortgage company, and (iv) a 5% economic interest in Corporate Arena
       Associates, Inc., which owns a 6.19% interest in the development of a
       multi-purpose sports arena in Dallas, Texas for the Dallas Stars, a
       National Hockey League club, and the Dallas Mavericks, a National
       Basketball Association club.
 
     - The Equipment Sales and Leasing Segment, consisting of the Company's
       ownership of 100% of the common stock of Crescent Machinery Company,
       formerly known as Moody-Day, Inc. ("Crescent Machinery"), a construction
       equipment sales, leasing and service company.
 
     - The Healthcare Segment, consisting of the Company's ownership of a 50%
       member interest in Charter Behavioral Health Systems, LLC ("CBHS"), a
       limited liability company which operates approximately 90 behavioral
       health care facilities. The Company entered into an agreement in March
       1998 to purchase the remaining 50% interest in CBHS. The consummation of
       the transactions contemplated by such agreement are subject to certain
       closing conditions.
 
     - The Refrigerated Warehousing Segment, consisting of an indirect 2%
       interest in three companies, URS Logistics, Inc. ("URS"), Americold
       Corporation ("Americold") and Freezer Services, Inc.
 
                                        1
<PAGE>   6
 
       ("Freezer Services," and together with URS and Americold, the
       "Warehousing Group"), that currently own and/or operate approximately 90
       refrigerated warehouses with an aggregate of approximately 422.9 million
       cubic feet. The Warehousing Group operates and manages public
       refrigerated warehouses in the continental United States, and provides
       integrated logistics services consisting of warehousing and
       transportation for the frozen food industry. The Company entered into an
       agreement in May 1998 to acquire the Carmar Group, which owns and
       operates five cold storage distribution warehouses in the midwest and
       southeast United States. The Company's acquisition of the Carmar Group is
       subject to customary closing conditions and is expected to be consummated
       in August 1998.
 
     The Company's principal executive offices are located at 306 West 7th
Street, Suite 1025, Fort Worth, Texas 76102, and its telephone number is (817)
339-2200.
 
                                        2
<PAGE>   7
 
                                  RISK FACTORS
 
     Prospective investors should carefully consider the following summary
information in conjunction with the other information contained in this
Prospectus and the more detailed information on risks of investment contained in
the applicable supplement to this Prospectus (each, a "Prospectus Supplement")
relating thereto before purchasing securities offered hereby. The Company also
cautions readers that this Prospectus, including the following summary
information, includes certain forward-looking statements that are based on
management's belief, as well as on assumptions made by and information currently
available to management. When used in this Prospectus, the words "expect,"
"anticipate," "intend," "plan," "believe," "seek," "estimate," and similar
expressions are intended to identify such forward-looking statements. Such
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions, including but not limited to the following
factors, which could cause the Company's future results and stockholder values
to differ materially from those expressed in any forward-looking statements made
by or on behalf of the Company. Many of such factors are beyond the Company's
ability to control or predict. Readers are cautioned not to put undue reliance
on forward-looking statements.
 
RESTRICTIONS ON THE COMPANY'S OPERATIONS AND BUSINESS OPPORTUNITIES
 
     The Certificate of Incorporation and the Intercompany Agreement. The
Company's First Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") provides that, for so long as the Intercompany
Agreement remains in effect, the Company is generally prohibited from engaging
in activities or making investments that a real estate investment trust (a
"REIT") could make unless Crescent was first given the opportunity but elected
not to pursue such activities or investments. The Certificate of Incorporation
also provides that one of the Company's corporate purposes is to perform its
obligations under the Intercompany Agreement. Under the Certificate of
Incorporation and the Intercompany Agreement, the Company has agreed not to
acquire or make (i) investments in real estate (which, for purposes of the
Intercompany Agreement, includes the provision of services related to real
estate and investment in hotel and resort properties, real estate mortgages,
real estate derivatives or entities that invest in real estate assets) or (ii)
any other investments that may be structured in a manner that qualifies under
the federal income tax requirements applicable to REITs, unless it has notified
Crescent of the acquisition or investment opportunity, in accordance with the
terms of the Intercompany Agreement, and Crescent has determined not to pursue
such acquisition or investment. The Company also has agreed to assist Crescent
in structuring and consummating any such acquisition or investment which
Crescent elects to pursue, on terms determined by Crescent. Further, Crescent is
not required to offer the Company the opportunity to participate in transactions
or make investments other than pursuant to the Company's right of first refusal
to become the lessee of any real property acquired by Crescent as to which
Crescent determines that, consistent with Crescent Equities' status as a REIT,
it is required to enter into a master lease arrangement. Such a lessee
opportunity would be available to the Company only if Crescent determines, in
its sole discretion, that the Company is qualified to be the lessee. The nature
of the Company's business and the opportunities it may pursue are restricted by
these provisions of the Certificate of Incorporation and the Intercompany
Agreement.
 
     Dependence Upon Crescent. Although all of its assets have not been
identified by Crescent, the Company has relied, and will continue to rely, on
Crescent to identify business opportunities for the Company as a result of the
terms of the Intercompany Agreement. There can be no assurance that Crescent
will continue to identify such opportunities for the Company or that
opportunities that Crescent identifies in the future will be within the
Company's financial, operational or management parameters. In addition, Crescent
will provide the lessee opportunities provided for in the Intercompany Agreement
only if it is necessary for Crescent Equities, consistent with its status as a
REIT, to enter into a master lease arrangement and only if the Company and
Crescent negotiate a mutually satisfactory master lease arrangement. If the
Company and Crescent do not negotiate a mutually satisfactory lease arrangement
within 30 days after Crescent provides the Company with written notice of the
lessee opportunity (or such longer period to which the Company and Crescent may
agree), Crescent may offer the opportunity to others for a period of one year
before it must again offer the opportunity to the Company. The Company currently
leases the Hospitality Properties from Crescent. Although it is anticipated that
any master lease arrangement involving the Company
 
                                        3
<PAGE>   8
 
generally will provide that the Company's rights will continue following a sale
of property or an assignment of the lease, the Company could lose its rights
under any such master lease arrangement upon the expiration of the lease,
including the leases for the Hospitality Properties.
 
     If, in the future, Crescent Equities were to fail to qualify as a REIT,
such failure could have a material adverse effect on those aspects of the
Company's business operations and business opportunities that are dependent upon
Crescent. For example, the Intercompany Agreement remains effective even if
Crescent Equities fails to qualify as a REIT, with the Company's rights relating
to lessee opportunities under the Intercompany Agreement continuing to be based
on Crescent Equities' need to create a master lease structure due to its status
as a REIT. Accordingly, if Crescent Equities failed to qualify as a REIT and
thereafter acquired a property, Crescent would have the right under the
Intercompany Agreement to lease the property to any person or entity pursuant to
any type of lease (including a master lease arrangement) or to operate the
property itself. The Company, however, would remain subject to all of the
limitations on its operations contained in the Certificate of Incorporation and
the Intercompany Agreement.
 
RISKS RELATING TO THE COMPANY'S INVESTMENT IN THE HEALTHCARE SEGMENT
 
     History of Net Losses for CBHS. As of the date of this Prospectus, the
Company owned a 50% member interest in CBHS. CBHS (or its predecessor) incurred
net losses of $17.3 million, $13.6 million and $63.5 million in the fiscal years
ended September 30, 1997, 1996 and 1995, respectively, and incurred a net loss
of $23.0 million for the three months ended December 31, 1997. In addition, CBHS
anticipates that it will incur a net loss for the fiscal year ending September
30, 1998.
 
     Effective March 3, 1998, the Company signed a definitive agreement to
purchase the remaining 50% interest in CBHS from Charter Behavioral Health
Systems, Inc., a subsidiary of Magellan Health Services, Inc. ("Magellan"). The
consummation of the purchase by the Company of the remaining 50% interest in
CBHS is conditioned upon, among other things, the purchase by CBHS of certain
equity interests in entities and certain assets owned directly or indirectly by
Magellan and upon CBHS or the Company obtaining the requisite funding to pay the
purchase price for the entities to be acquired as provided in the applicable
transaction documents. As part of the transactions relating to the purchase of
such entities by CBHS, approximately $78 million in annual franchise fees
currently paid by CBHS to Magellan would be eliminated. There can be no
assurance, however, that CBHS will consummate the transactions which would
enable it to eliminate payment of the annual franchise fee to Magellan. For
financial reporting purposes, the amount of losses that the Company recognizes
with respect to its investment in CBHS is limited to the amount of the Company's
investment in CBHS. As of the date of this Prospectus, the Company has recorded
losses in an amount equal to the amount of its investment in CBHS. Accordingly,
the Company will not recognize additional losses in respect of its investment in
CBHS until such time, if any, as the Company's investment in CBHS increases. If
the Company acquires the remaining 50% interest in CBHS, the continued
incurrence of substantial net losses by CBHS could have a material adverse
effect on the Company's financial condition and operating results.
 
     Franchise Fee Arrearages. As of June 15, 1998, CBHS had not made all
required franchise fee payments under its franchise agreements with Magellan for
the months of February through June 1998, and, as a result, was in default under
such agreements. CBHS estimates that, as of June 1, 1998, its franchise fee
arrearages totalled approximately $27 million. In addition to other remedies,
when franchise fees are past due in the amount of $6 million or more for any
reason, Magellan has the right to prohibit any incentive compensation payments
to CBHS management and to prohibit any vesting of CBHS management equity. When
franchise fees are past due in the amount of $18 million or more for any reason,
Magellan has the right to prohibit any salary increases for key personnel of
CBHS, to prohibit the hiring of any additional staff by CBHS and to prohibit any
new direct or indirect hospital acquisitions or joint venture participation by
CBHS. When franchise fees are past due in an amount greater than $24 million for
any reason, Magellan has the right to require a 5% cutback on budgeted expenses
under the then-current approved CBHS annual budget, to require monthly approval
of expenditures of CBHS by Magellan, including capital and operating
expenditures, and to require transfer of control and management of CBHS and CBHS
franchisees to Magellan. Although Magellan has not exercised any such management
rights or pursued any other remedies in connection with CBHS'
                                        4
<PAGE>   9
 
franchise fee arrearages, there can be no assurance that Magellan will not
exercise any such rights in the future should franchise fee arrearages continue.
If Magellan elects to exercise such management rights in the future, there can
be no assurance that Magellan will operate and manage CBHS in a manner that will
maximize the Company's return on its investment in CBHS or that any conflicts
that may develop between the Company and Magellan will be resolved in favor of
the Company.
 
     Adverse Trends in the Behavioral Health Care Industry. The behavioral
health care industry has been affected by a number of factors recently,
including: (i) the imposition by payors of more stringent length of stay and
admission criteria and other cost containment measures; (ii) the failure of
certain reimbursement rate increases from certain payors to offset increases in
the cost of providing services; (iii) an increase in the percentage of business
that is derived from payors that reimburse on a per diem or other discounted
basis; (iv) unfavorable changes in the mix of patients in the private-pay,
Medicare and Medicaid categories and among different types of private pay
sources; (v) a trend toward higher deductibles and co-insurance payments for
individual patients; (vi) a trend toward limiting employee behavioral health
benefits, such as reductions in annual and lifetime limits on behavioral health
coverage; and (vii) pricing pressure related to an increasing rate of claim
denials by third-party payors. Any of these factors may result in reductions in
the amount of revenue that the Company derives from the Healthcare Segment.
Assuming the consummation of the purchase by the Company of the remaining 50%
interest in CBHS, substantial reductions in such revenue could have a material
adverse effect on the financial condition and operating results of the Company.
 
     Reliance on Government Programs; Health Care Reform. As of June 15, 1998,
more than 50% of the Company's gross patient service revenue from its hospital
operations was derived from payments made by government sponsored health care
programs. Regulatory changes or the enactment of legislation, including
legislation to balance the federal budget, could result in the reduction of
reimbursement rates, limitations on reimbursement, reductions in funding for
government sponsored programs or the elimination of coverage for certain
individuals under the programs. Assuming the consummation of the purchase by the
Company of the remaining 50% interest in CBHS, such reform measures could have a
material adverse effect on the financial condition and operating results of the
Company.
 
     Government Regulation. The operation of psychiatric hospitals and other
health care facilities, such as those operated by the Company, are subject to
extensive federal and state laws and regulations. Such laws and regulations
provide for periodic inspections or other reviews by governmental entities to
determine compliance with their respective standards of medical care, staffing,
equipment, safety and cleanliness. The Company also is subject to substantial
state and federal regulations relating to admissions and confidentiality of
patient information. The Company's failure to comply with laws and regulations
to which it is subject could result in the revocation of required licenses and
government approvals. Such revocations could result in a significant alteration
in the nature and scope of the operations of the Healthcare Segment and,
assuming the consummation of the purchase by the Company of the remaining 50%
interest in CBHS, any such revocations could have a material adverse effect on
the financial condition and operating results of the Company.
 
     Managed Care Risks. As an increasing percentage of patients enter into
health care coverage arrangements with managed care payors, management believes
that the Company's success in the Healthcare Segment will be dependent, in part,
upon its ability to contract with such payors to provide patient care services
to the payors' members. There can be no assurance that the Company will be able
to establish or maintain satisfactory relationships with managed care and other
third party payors, many of which already have existing provider structures in
place and may not be able or willing to change their provider networks. Assuming
the consummation of the purchase by the Company of the remaining 50% interest in
CBHS, the inability of the Company to enter into such arrangements or the
termination of such existing arrangements could have a material adverse effect
on the financial condition and operating results of the Company.
 
     Dependence on Health Care Professionals. Physicians and other health care
professionals traditionally have been a source of a significant portion of the
patients treated at the Company's facilities and outpatient clinics.
Consequently, the success of the Company is dependent in part on the number and
quality of the physicians and other health care professionals on its clinical
staffs. Hospital physicians generally are not employees of the Company and, in
general, the Company does not have contractual arrangements with
 
                                        5
<PAGE>   10
 
hospital physicians restricting the ability of such physicians to practice
elsewhere. In addition, the ability of the Company to develop or acquire
additional facilities and clinics, as well as the success of any such additional
facilities or clinics, will depend, in part, upon the successful development of
relationships with key physicians and other health care professionals in the
markets served by such facilities and clinics. There can be no assurance that
the Company can retain its physicians or other health care professionals
currently on staff or that additional relationships with physicians or health
care professionals will be developed in the future.
 
     Competition. In general, the operation of behavioral health care programs
is characterized by intense competition. Management anticipates that competition
will become more intense as pressure to contain the rising costs of health care
continues to intensify. Each of the Company's inpatient facilities competes with
other hospitals and behavioral health care facilities, some of which are larger
and have greater financial resources than the Company's facilities. Facilities
frequently draw patients from areas outside their immediate locale, and,
therefore, the Company's facilities may, in certain markets, compete with both
local and distant hospitals, as well as other facilities. With respect to
outpatient services, the Company competes with private practicing behavioral
health professionals, publicly funded behavioral health centers and partial
hospitalization and other intensive outpatient programs offered by other
inpatient providers. There can be no assurance that the Company will be able to
compete effectively with its present or future competitors. Assuming the
consummation of the purchase by the Company of the remaining 50% interest in
CBHS, an inability to compete effectively could have a material adverse effect
on the Healthcare Segment and the financial condition and results of operations
of the Company.
 
RISKS RELATING TO THE LAND DEVELOPMENT SEGMENT
 
     The economic performance and value of the Company's real estate assets are
and will continue to be subject to all of the risks incident to the ownership
and operation of real estate. These include the risks normally associated with
changes in national, regional and local economic and market conditions. Local
real estate market conditions may include excess supply and competition for
purchasers, relative attractiveness and location of the property and quality of
maintenance and management services. In addition, other factors may affect the
performance and value of a property adversely, including changes in laws and
governmental regulations (including those governing usage, zoning and taxes),
changes in interest rates (including the risk that increased interest rates may
result in decreased sales of lots in developments in which the Company has an
interest) and the availability of financing.
 
RISKS RELATING TO THE HOSPITALITY SEGMENT
 
     The Company's results of operations from the Hospitality Segment are, and
will continue to be, affected by such factors as changes in general economic
conditions, the level of demand for rooms and related services at the
Hospitality Properties, the ability of the managers of the Hospitality
Properties to maintain and increase profits at the Hospitality Properties,
competition in the hospitality industry and other factors relating to the
operation of the Hospitality Properties. The Hospitality Properties are subject
to long-term lease arrangements with Crescent as lessor, pursuant to which
substantial amounts of rent are payable to Crescent as base rent or percentage
rent. There can be no assurance that the Company will be able to meet its
obligations under such leases. Failure by the Company to make lease payments as
they become due or to satisfy its other obligations under the leases may cause
Crescent to terminate such leases, which may have a material adverse effect on
the financial condition and operating results of the Company.
 
RISKS RELATING TO THE EQUIPMENT SALES AND LEASING SEGMENT
 
     The Company sells, leases and services construction equipment and
accessories primarily to the construction and utility industries. An economic
downturn or recession in these industries, as well as equipment shortages, could
have a material adverse affect on the financial condition and results of
operations of the Company. The Company also faces exposure for claims of injury
incurred in connection with the use of the equipment it sells, leases and
services. There can be no assurance that any such claims would not have a
material adverse effect on the financial condition and results of operations of
the Company. In addition, some of the Company's competitors in the Equipment
Sales and Leasing Segment are larger and better capitalized
                                        6
<PAGE>   11
 
than the Company and may be better positioned to acquire a larger share of the
market. The Company intends to expand the Equipment Sales and Leasing Segment by
acquiring several additional equipment sales and leasing companies. There can be
no assurance that the Company will be successful in integrating the personnel
and operations of these acquired entities into the Company's operations. The
Company's failure to integrate the personnel and operations of the acquired
entities could have a material adverse effect on the operating results and
financial condition of the Company.
 
RISKS RELATING TO THE COMPANY'S INVESTMENT IN THE REFRIGERATED WAREHOUSING
SEGMENT
 
     Lack of Management Control of Investment. The Company owns, through three
subsidiaries (the "Warehousing Subsidiaries"), a 2% interest in each of three
partnerships (the "Warehousing Partnerships"), one of which owns Americold, one
of which owns URS and the other of which owns Freezer Services. Crescent owns,
through the Warehousing Subsidiaries, a 38% interest in each of the Warehousing
Partnerships. The remaining 60% interest in each of the Warehousing Partnerships
is owned by two subsidiaries of Vornado Realty Trust ("Vornado"). The Company
owns all of the voting common stock of the Warehousing Subsidiaries and Crescent
owns all of the non-voting common stock of the Warehousing Subsidiaries. Under
the terms of each partnership agreement, Vornado has the right to make all
decisions relating to the management and operation of the Warehousing
Partnerships, other than certain major decisions that require the approval of
both the Company and Vornado. The partnership agreement for each of the
Warehousing Partnerships provides for a buy-sell arrangement upon a failure of
the Company and Vornado to agree on any of the specified major decisions,
pursuant to which the entire interest of the Company and Crescent or the entire
interest of Vornado may be purchased by the other party. Until November 1, 2000,
the buy-sell arrangement can only be exercised by Vornado at a price equal to
the Company's cost (less any distributions made to the Company in respect of its
investment) plus a 10% per annum return on such investment. There can be no
assurance that Vornado will operate and manage the Warehousing Partnerships in a
manner that will maximize the Company's return on its investment or that any
conflicts that may develop between the Company and Vornado will be resolved in
favor of the Company.
 
     Operating Risks. The refrigerated warehouse business has low barriers to
entry, allowing new participants to enter the national, regional and local
markets in which the Warehousing Group operates with relative ease. In addition,
current customers of the Warehousing Group may in the future build their own
refrigerated warehouse facilities, eliminating the need for services currently
provided by the Warehousing Group. Similarly, several national and local
enterprises provide, or may provide in the future, transportation management
services offered by the Warehousing Group. There can be no assurance that the
Warehousing Group will continue to compete effectively in the markets in which
it operates. The inability of the Warehousing Group to compete effectively could
reduce the value of the Company's investment in the Warehousing Partnerships
and, in turn, could have a material adverse effect on the financial condition
and results of operations of the Company.
 
     A portion of warehousing sales are derived from the storage and handling of
agricultural products. Accordingly, the operating results of the Company derived
from the Refrigerated Warehousing Segment may be negatively affected by severe
weather conditions or other factors affecting the agricultural market generally.
 
ENVIRONMENTAL RISKS
 
     Under various federal, state and local laws, ordinances and regulations, an
owner or operator of real property may become liable for the costs of removal or
remediation of certain hazardous or toxic substances released on or in its
property, as well as certain other costs relating to hazardous or toxic
substances. Such liability may be imposed without regard to whether the owner or
operator knew of, or was responsible for, the release of such substances. The
presence of, or the failure to remediate properly, such substances, may
adversely affect the owner's ability to sell the affected real estate or to
borrow funds using such real estate as collateral. Such costs or liabilities
could exceed the value of the affected real estate. The Company has not been
notified by any governmental authority of any non-compliance, liability or other
claim in connection with any real property owned or operated by it, and the
Company is not aware of any other environmental condition
 
                                        7
<PAGE>   12
 
with respect to such real property that management believes would have a
material adverse effect on the Company's business, assets or results of
operations.
 
ACQUISITION AND MANAGEMENT OF UNRELATED INVESTMENTS; COMPETITION
 
     Either through management of the Assets or through the implementation of
its strategy and corporate purpose of performing the Intercompany Agreement, the
Company will pursue a variety of other business opportunities and investments.
Although the Company intends to acquire a complementary group of businesses,
there are differences among the businesses in which it engages and in which it
may engage in the future that may require a wide range of skills and
qualifications, and there is no assurance that the management or employees of
the Company will have, or that the Company will be able to hire and retain
employees with, such skills and qualifications. There also is no assurance that
the opportunities that the Company pursues will be integrated, perform as
expected or contribute significant revenues or profits to the Company. The
industries in which the Company will compete may be subject to government
regulation and restrictions, some of which may be significant and burdensome.
The businesses with which it will compete may be better capitalized or have
other features that will make it difficult for the Company to compete
effectively.
 
CONFLICTS OF INTEREST
 
     Common Management and Ownership. Richard E. Rainwater and John C. Goff are,
respectively, the Chairman of the Board and the Vice Chairman of the Board of
both the Company and Crescent Equities, and Gerald W. Haddock serves as the
President, Chief Executive Officer and a director of the Company, Crescent
Equities and Crescent Real Estate Equities, Ltd., the general partner of
Crescent Partnership. As a result, Messrs. Rainwater, Goff and Haddock have
fiduciary obligations to the Company, Crescent Partnership and Crescent
Equities. As of the date of this Prospectus, Messrs. Rainwater, Goff and Haddock
beneficially owned, in the aggregate, an equity interest of over 16% and 14% in
the Company and Crescent Partnership, respectively. The common management and
ownership among these entities may lead to conflicts of interest in connection
with transactions between the Company and Crescent. For example, such conflicts
of interest between the Company and Crescent could arise in the event of a
dispute relating to any leases in which the Company is a lessee pursuant to the
Intercompany Agreement, or in the event there is a default by the Company under
any such lease. Further, conflicts of interest could arise in connection with
the negotiation of the terms of any joint investments between the Company and
Crescent. There can be no assurance that any such conflicts would be resolved in
favor of the Company.
 
     Competition for Management Time. Messrs. Rainwater, Goff and Haddock are
engaged, and in the future will continue to engage, in the management of other
business entities and properties, including Crescent. Messrs. Rainwater, Goff
and Haddock may experience conflicts of interest in allocating management time,
services and functions among the Company and the various other business
activities, including the operation of Crescent, in which any of them are or may
become involved. There can be no assurance that any such conflicts would be
resolved in favor of the Company.
 
     Relationships with Magellan. As of the date of this Prospectus, Mr.
Rainwater, along with certain of his affiliates and members of his family, owned
approximately 12% of the outstanding common stock of Magellan. Mr. Rainwater's
spouse, Darla D. Moore, is a member of the board of directors of Magellan.
Through these relationships, Mr. Rainwater may have the ability to influence
decisions of Magellan in a manner that may benefit Magellan to the detriment of
the Company.
 
     Legal Representation. Shaw Pittman Potts & Trowbridge, which has served as
special counsel to the Company in connection with certain matters, also serves
as securities and tax counsel to Crescent. In the event any controversy arises
in which the interests of the Company appear to be in conflict with those of
Crescent, other counsel may be retained for one or both parties.
 
                                        8
<PAGE>   13
 
SUBSTANTIAL INDEBTEDNESS
 
     The Company's organizational documents do not limit the level or amount of
debt that it may incur. The Company has incurred, and anticipates that it will
continue to incur, substantial indebtedness in order to manage the Assets, to
operate its business segments and to acquire new assets. The Company, under its
credit facilities, is subject to financial covenants and other restrictions that
require it to meet certain financial tests and that limit, among other things,
its ability to borrow additional funds, to dispose of assets and to pay
dividends. There can be no assurance that the cash flow from the Company's
operations will be sufficient to meet the Company's debt service obligations
under its credit facilities. In the event that the Company's cash flow and
capital resources are insufficient to fund its debt service obligations, the
Company may be forced to reduce or delay capital expenditures, seek additional
equity capital or restructure its debt. The occurrence of any of the foregoing
could have a material adverse effect on the financial condition and operating
results of the Company.
 
DEPENDENCE ON ADDITIONAL CAPITAL FOR EXPANSION
 
     The Company's business strategy emphasizes expanding through acquisitions
and other investment opportunities identified in accordance with the terms of
the Intercompany Agreement and through other means. There is no assurance that
the Company will have sufficient working capital to finance future acquisitions
or pursue other investment opportunities. The Company expects to finance
expansion through equity offerings, various financing alternatives with Crescent
and affiliated persons, bank financing, and other private equity financing
possibilities, but there is no assurance that the Company will be able to obtain
financing at all or in amounts or on terms acceptable to it. The failure of the
Company to obtain needed capital could result in its inability to capitalize on
identified business and investment opportunities.
 
DIVIDEND POLICY AND RESTRICTIONS ON THE PAYMENT OF DIVIDENDS
 
     The Company intends to use its available funds to pursue investment and
business opportunities and, therefore, does not anticipate the declaration or
payment of cash dividends on the Common Stock or preferred stock, par value
$0.01 per share (the "Preferred Stock"), in the foreseeable future. In addition,
dividend payments on the Common Stock and Preferred Stock are prohibited under
agreements with certain of the Company's creditors until all amounts outstanding
under such credit facilities have been paid in full. Similar restrictions on the
payment of dividends on the Common Stock and Preferred Stock may be imposed in
the future by credit facilities that the Company may obtain from time to time.
 
CERTAIN ANTITAKEOVER DEVICES
 
     The Certificate of Incorporation, the Amended and Restated Bylaws of the
Company (the "Bylaws"), the Preferred Share Purchase Rights Plan of the Company
(the "Rights Plan"), pursuant to which one Preferred Share Purchase Right (a
"Right") will be issued with every share of Common Stock, and applicable
sections of the Delaware General Corporation Law (the "DGCL"), contain several
provisions that may make more difficult the acquisition of control of the
Company without the approval of the Crescent Operating Board of Directors (the
"Board"). Certain provisions of the Certificate of Incorporation and the Bylaws,
among other things: (i) classify the Board into three classes, each of which
serves for staggered three-year terms; (ii) provide that a director of Crescent
Operating may be removed by the stockholders only for cause; (iii) provide that
only the Chairman of the Board, Vice Chairman, President or the Board may call
special meetings of the stockholders; (iv) provide that the stockholders may
take action only at a meeting of Crescent Operating stockholders, not by written
consent; (v) provide that stockholders must comply with certain advance notice
procedures in order to nominate candidates for election to the Board or to place
stockholders' proposals on the agenda for consideration at meetings of the
stockholders; (vi) provide that, under certain circumstances, the affirmative
vote of the holders of two-thirds of the Common Stock is required to approve any
merger or similar business combination involving Crescent Operating; (vii)
provide that the holder of "control shares" of Crescent Operating acquired in a
control share acquisition have no voting rights with respect to such control
shares except to the extent approved by the vote of the holders of two-thirds of
the Common Stock (the "control shares provision"); and (viii) provide that the
stockholders may amend or
                                        9
<PAGE>   14
 
repeal any of the foregoing provisions of the Certificate of Incorporation or
the Bylaws only by a vote of 80% of the stock entitled to vote generally in the
election of directors. With certain exceptions, Section 203 of the DGCL
("Section 203") imposes certain restrictions on mergers and other business
combinations between Crescent Operating and any holder of 15% or more of the
Common Stock. The Certificate of Incorporation provides that the control shares
provision, the Rights Plan and Section 203 do not apply to Crescent and its
affiliates. Accordingly, Crescent and its affiliates will be in a position to
effect a business combination or other transaction with Crescent Operating in
situations where others would be restricted from effecting a similar
transaction. The Certificate of Incorporation authorizes the Board to issue up
to 10 million shares of Preferred Stock, in series, and to establish the rights
and preferences (including the convertibility of such shares of Preferred Stock
into shares of Common Stock) of any series of Preferred Stock so issued. The
issuance of Preferred Stock could have the effect of delaying or preventing a
change in control of Crescent Operating, even if such a change in control were
in the best interests of some, or a majority, of Crescent Operating's
stockholders.
 
     In addition, the Rights Plan would cause substantial dilution to a person
or group (an "Acquiring Person") that attempts to acquire Crescent Operating on
terms not approved in advance by the Board. Under the Rights Plan, until 10
business days following such time as an Acquiring Person has acquired beneficial
ownership of, or has proposed a tender offer or exchange offer that would result
in an Acquiring Person owning 10% or more of the outstanding shares of Common
Stock (the "Rights Distribution Effective Date"), the Rights will be transferred
only with the Common Stock. Following the Rights Distribution Effective Date,
separate certificates evidencing the Rights will be mailed to each holder of
record on the Rights Distribution Effective Date. Thereafter, each holder of a
Right (other than the Acquiring Person) will have the right to receive, upon
exercise of such Right, that number of shares of Common Stock having a market
value equal to two times the exercise price of the Right. Similar provisions
apply in the event of a merger or other business combination as a result of
which an Acquiring Person will own 10% or more of the outstanding shares of
Common Stock. Prior to the time that any such Acquiring Person acquires 10% or
more of the outstanding shares of Common Stock, the Board may redeem the Rights
in whole for $0.01 per Right. After the time that any such Acquiring Person
acquires 10% or more, but less than 50%, of the outstanding shares of Common
Stock, the Board may exchange the Rights, in whole or in part, at an exchange
ratio of one share of Common Stock, or one-hundredth of a share of the Company's
Series A Junior Preferred Stock, par value $0.01 per share (the "Series A Junior
Preferred Stock"), per Right.
 
COMPANY'S SUCCESS DEPENDENT UPON KEY PERSONNEL
 
     The success of the Company depends to a significant degree upon the
contribution of its executive officers and other key personnel, none of whom has
an employment agreement with the Company. Consequently, none of such persons is
obligated to remain with the Company for any specified period of time. The
Company has entered into agreements with two entities for the provision of
certain services to the Company. One of the entities is owned by Jeffrey L.
Stevens, Executive Vice President and Chief Operating Officer of the Company.
The other is owned by Sanjay Varma, a Vice President of the Company, and his
wife, Johanna Varma. There can be no assurance that the Company will be able to
retain its executive officers and other key personnel or to attract replacements
or additional personnel if required. The Company's loss of its executive
officers and other key personnel could have an adverse effect on the operations
of the Company. The Company has not obtained key-man insurance for any of its
executive officers or other key personnel.
 
                                       10
<PAGE>   15
 
                            SELECTED FINANCIAL DATA
 
     The following table sets forth certain summary historical financial
information for the Company and for the Company's predecessor, the
Carter-Crowley Asset Group. For purposes of this table, the "Carter-Crowley
Asset Group" consists of Moody-Day, Inc. (the predecessor of Crescent Machinery)
and Hicks Muse Tate & Furst Equity Fund II, LP, a private venture capital fund.
 
<TABLE>
<CAPTION>
                                      CRESCENT
                                  OPERATING, INC.                   CARTER-CROWLEY ASSET GROUP (PREDECESSOR)
                         ----------------------------------   -----------------------------------------------------
                                           FOR THE PERIOD     FOR THE PERIOD
                          THREE MONTHS          FROM               FROM           FOR THE YEAR ENDED DECEMBER 31,
                             ENDED         MAY 9, 1997 TO     JANUARY 1, 1997   -----------------------------------
                         MARCH 31, 1998   DECEMBER 31, 1997   TO MAY 8, 1997     1996      1995      1994     1993
                         --------------   -----------------   ---------------   -------   -------   ------   ------
                                            (DOLLARS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<S>                      <C>              <C>                 <C>               <C>       <C>       <C>      <C>
OPERATING DATA:
  Revenues.............     $ 97,377          $156,882            $ 4,657       $10,394   $ 9,147   $7,671   $6,979
  Income (loss) from
    operations.........        3,941              (993)               158           109        89       83       89
  Net income (loss)....       (1,179)          (22,165)                25          (111)       79       43       36
  Loss per share.......         (.11)            (2.00)                --            --        --       --       --
BALANCE SHEET DATA:
  Total assets.........     $553,493          $585,977                          $17,483   $13,230   $5,348   $4,578
  Total debt...........      228,614           258,129                            5,405     3,121    1,375      850
  Total shareholders'
    equity.............       (9,203)           (8,060)                          10,925     9,358    3,338    3,289
</TABLE>
 
                  RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
                         AND PREFERRED STOCK DIVIDENDS
 
     The Company's ratios of earnings to combined fixed charges and preferred
stock dividends (including such ratios of the Carter-Crowley Asset Group) for
the quarter ended March 31, 1998, for the period from January 1, 1997 to May 8,
1997, and for the years ended December 31, 1995, 1994 and 1993 were 1.11, 1.29,
1.81, 3.33 and 2.16, respectively. The Company's earnings were insufficient to
cover fixed charges by $2,682,168 for the period from May 9, 1997 to December
31, 1997 and by $168,461 for the year ended December 31, 1996. There were no
shares of Preferred Stock outstanding for any of these periods.
 
     For purposes of computing these ratios, earnings have been calculated by
adding fixed charges (excluding capitalized interest) to income (loss) before
taxes and extraordinary items. Fixed charges consist of (i) interest costs,
whether expensed or capitalized, (ii) amortization of debt expense and discount
or premium relating to any indebtedness, whether expensed or capitalized, and
(iii) the portion of rental expense that can be demonstrated to represent the
interest factor in the particular case.
 
                          DESCRIPTION OF COMMON STOCK
 
     The Certificate of Incorporation authorizes the Company to issue up to
22,500,000 shares of Common Stock. The Common Stock is listed on The Nasdaq
National Market under the symbol "COPI."
 
     Holders of Common Stock are entitled to one vote for each share on all
matters voted on by stockholders, including elections of directors, and, except
as otherwise required by law or provided in any resolution adopted by the Board
with respect to any series of Preferred Stock, the holders of such shares will
possess all voting power. The Certificate of Incorporation does not provide for
cumulative voting in the election of directors. Subject to any preferential
rights of any outstanding series of Preferred Stock created from time to time by
the Board, the holders of Common Stock will be entitled to such dividends as may
be declared from time to time by the Board from funds available therefor, and
upon liquidation will be entitled to receive pro rata all assets of the Company
available for distribution to such holders.
 
                                       11
<PAGE>   16
 
                         DESCRIPTION OF PREFERRED STOCK
 
GENERAL
 
     The Certificate of Incorporation authorizes the Board to issue up to
10,000,000 shares of Preferred Stock. Under the Certificate of Incorporation,
the Board may from time to time establish and issue one or more series of
Preferred Stock without stockholder approval. The Board may classify or
reclassify any unissued Preferred Stock by setting or changing the number,
designation, preference, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms or
conditions of redemption of such series. Because the Board has the power to
establish the preferences and rights of each series of Preferred Stock, it may
afford the holders of any series of Preferred Stock preferences, powers and
rights, voting or otherwise, senior to the rights of holders of Common Stock.
Preferred Stock, when issued, will be fully paid and nonassessable.
 
     The following description of the Preferred Stock sets forth certain general
terms and provisions of Preferred Stock to which any Prospectus Supplement may
relate. The statements below describing the Preferred Stock are in all respects
subject to and qualified in their entirety by reference to the applicable
provisions of the Certificate of Incorporation and the Bylaws.
 
     The Prospectus Supplement relating to any Preferred Stock offered thereby
will contain the specific terms thereof, including, without limitation: (i) the
title and stated value of such Preferred Stock; (ii) the number of shares of
such Preferred Stock offered, the liquidation preference per share and the
offering price of such Preferred Stock; (iii) the dividend rate(s), period(s)
and/or payment date(s) or method(s) of calculation thereof applicable to such
Preferred Stock; (iv) the date from which dividends on such Preferred Stock
shall accumulate, if applicable; (v) the procedures for any auction and
remarketing, if any, for such Preferred Stock; (vi) the provision for a sinking
fund, if any, for such Preferred Stock; (vii) the provision for redemption, if
applicable, of such Preferred Stock; (viii) any listing of such Preferred Stock
on any securities exchange; (ix) the terms and conditions, if applicable, upon
which such Preferred Stock will be convertible into Common Stock, including the
conversion price (or manner of calculation thereof); (x) any other specific
terms, preferences, rights, limitations or restrictions of such Preferred Stock;
(xi) the relative ranking and preferences of such Preferred Stock as to dividend
rights and rights upon liquidation, dissolution or winding up of the affairs of
the Company; and (xii) any limitations on issuance of any series of Preferred
Stock ranking junior to or on a parity with such series of Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Company.
 
RANK
 
     Unless otherwise specified in the applicable Prospectus Supplement, the
Preferred Stock will, with respect to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of the Company, rank (i)
senior to all classes or series of Common Stock, and to all equity securities
ranking junior to the Preferred Stock, (ii) on a parity with all equity
securities issued by the Company the terms of which specifically provide that
such equity securities rank on a parity with the Preferred Stock, and (iii)
junior to all equity securities issued by the Company the terms of which
specifically provide that such equity securities rank senior to the Preferred
Stock. The term "equity securities" does not include convertible debt
securities.
 
DIVIDENDS
 
     Holders of Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board, out of assets of the Company legally
available for payment, cash dividends (or dividends in kind or in other property
if expressly permitted and described in the applicable Prospectus Supplement) at
such rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Each such dividend shall be payable to holders of record as they
appear on the stock transfer books of the Company on such record dates as shall
be fixed by the Board.
 
     Dividends on any series of Preferred Stock may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set
                                       12
<PAGE>   17
 
forth in the applicable Prospectus Supplement. If the Board fails to declare a
dividend payable on a dividend payment date on any series of Preferred Stock for
which dividends are noncumulative, then the holders of such series of Preferred
Stock will have no right to receive a dividend in respect of the dividend period
ending on such dividend payment date and the Company will have no obligation to
pay the dividend accrued for such period, whether or not dividends on such
series are declared payable on any future dividend payment date.
 
     Unless otherwise specified in the Prospectus Supplement, if any shares of
Preferred Stock of any series are outstanding, no full dividends shall be
declared or paid or set apart for payment on any capital stock of the Company of
any other series ranking, as to dividends, on a parity with or junior to the
Preferred Stock of such series for any period unless (i) if such series of
Preferred Stock has a cumulative dividend, full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the Preferred Stock of such
series for all past dividend periods and the then-current dividend period or
(ii) if such series of Preferred Stock does not have a cumulative dividend, full
dividends for the then-current dividend period have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for such payment on the Preferred Stock of such series. When dividends
are not paid in full (or a sum sufficient for such full payment is not so set
apart) upon Preferred Stock of any series and the shares of any other series of
Preferred Stock ranking on a parity as to dividends with the Preferred Stock of
such series, all dividends declared upon Preferred Stock of such series and any
other series of Preferred Stock ranking on a parity as to dividends with such
Preferred Stock shall be declared pro rata so that the amount of dividends
declared per share of Preferred Stock of such series and such other series of
Preferred Stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the Preferred Stock of such series (which shall
not include any accumulation in respect of unpaid dividends for prior dividend
periods if such Preferred Stock does not have a cumulative dividend) and such
other series of Preferred Stock bear to each other. No interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on Preferred Stock of such series which may be in arrears.
 
     Except as provided in the immediately preceding paragraph, no dividends
(other than in Common Stock or other capital stock ranking junior to the
Preferred Stock of such series as to dividends and upon liquidation) shall be
declared or paid or set aside for payment or other distribution upon the Common
Stock, or any other capital stock of the Company ranking junior to or on a
parity with the Preferred Stock of such series as to dividends or upon
liquidation, nor shall any Common Stock, or any other capital stock of the
Company ranking junior to or on a parity with the Preferred Stock of such series
as to dividends or upon liquidation be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any such shares) by the Company (except by conversion
into or exchange for other capital stock of the Company ranking junior to the
Preferred Stock of such series as to dividends and upon liquidation) unless (i)
if such series of Preferred Stock has a cumulative dividend, full cumulative
dividends on the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for all past dividend periods and the then-current
dividend period, and (ii) if such series of Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment for the then-current dividend
period.
 
REDEMPTION
 
     If so provided in the applicable Prospectus Supplement, any series of
Preferred Stock will be subject to mandatory redemption or redemption at the
option of the Company, in whole or in part, in each case upon the terms, at the
times and at the redemption prices set forth in such Prospectus Supplement.
 
     The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon (which
shall not, if such Preferred Stock does not have a cumulative dividend, include
any accumulation in respect of unpaid dividends for prior dividend periods) to
the date of redemption. The redemption price may be payable in cash or other
property,
                                       13
<PAGE>   18
 
as specified in the applicable Prospectus Supplement. If the redemption price
for Preferred Stock of any series is payable only from the net proceeds of the
issuance of capital stock of the Company, the terms of such Preferred Stock may
provide that, if no such capital stock shall have been issued or to the extent
the net proceeds from any issuance are insufficient to pay in full the aggregate
redemption price then due, such Preferred Stock shall automatically and
mandatorily be converted into the applicable capital stock of the Company
pursuant to conversion provisions specified in the applicable Prospectus
Supplement.
 
     Notwithstanding the foregoing, no Preferred Stock of any series shall be
redeemed unless all outstanding Preferred Stock of such series are
simultaneously redeemed unless (i) if such series of Preferred Stock has a
cumulative dividend, full cumulative dividends on all Preferred Stock of any
series shall have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for all past
dividend periods and the then-current dividend period and (ii) if such series of
Preferred Stock does not have a cumulative dividend, full dividends on the
Preferred Stock of any series have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for the then-current dividend period; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Preferred Stock of
such series pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding shares of Preferred Stock of such series. In
addition, the Company shall not purchase or otherwise acquire directly or
indirectly any Preferred Stock of such series (except by conversion into or
exchange for capital stock of the Company ranking junior to the Preferred Stock
of such series as to dividends and upon liquidation) unless (i) if such series
of Preferred Stock has a cumulative dividend, full cumulative dividends on all
outstanding Preferred Stock of any series have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past dividend periods and the then-current dividend
period and (ii) if such series of Preferred Stock does not have a cumulative
dividend, full dividends on the Preferred Stock of any series have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for the then-current dividend period;
provided, however, that the foregoing shall not prevent the purchase or
acquisition of Preferred Stock of such series pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding shares of Preferred
Stock of such series.
 
     If fewer than all of the outstanding shares of Preferred Stock of any
series are to be redeemed, the number of shares to be redeemed will be
determined by the Company, and such shares may be redeemed pro rata from the
holders of record of such shares in proportion to the number of such shares held
or for which redemption is requested by such holder (with adjustments to avoid
redemption of fractional shares) or by lot in a manner determined by the
Company.
 
     Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Stock of
any series to be redeemed at the address shown on the stock transfer books of
the Company. Each notice shall state: (i) the redemption date; (ii) the number
of shares and the series of Preferred Stock to be redeemed; (iii) the redemption
to be surrendered for payment of the redemption price; (iv) that dividends on
the shares of Preferred Stock to be redeemed will cease to accrue on such
redemption date; and (v) the date upon which the holder's conversion rights, if
any, as to such shares shall terminate. If fewer than all of the shares of
Preferred Stock of any series are to be redeemed, the notice mailed to each such
holder thereof shall also specify the number of shares of Preferred Stock to be
redeemed from each such holder. If notice of redemption of any Preferred Stock
has been given and if the funds necessary for such redemption have been set
aside by the Company in trust for the benefit of the holders of any Preferred
Stock so called for redemption, then from and after the redemption date
dividends will cease to accrue on such Preferred Stock, and all rights of the
holders of such shares will terminate, except the right to receive the
redemption price.
 
LIQUIDATION PREFERENCE
 
     Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, then, before any distribution or payment shall be
made to the holders of any Common Stock or any other class or series of capital
stock of the Company ranking junior to the Preferred Stock in the distribution
of assets upon any liquidation, dissolution or winding up of the affairs of the
Company, the holders of each series of
                                       14
<PAGE>   19
 
Preferred Stock shall be entitled to receive out of assets of the Company
legally available for distribution to stockholders liquidating distributions in
the amount of the liquidation preference per share set forth in the applicable
Prospectus Supplement, plus an amount equal to all dividends accrued and unpaid
thereon (which shall not include any accumulation in respect of unpaid dividends
for prior dividend periods if such Preferred Stock does not have a cumulative
dividend). After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Preferred Stock will have no right or
claim to any of the remaining assets of the Company. In the event that, upon any
such voluntary or involuntary liquidation, dissolution or winding up, the
available assets of the Company are insufficient to pay the amount of the
liquidating distributions on all outstanding Preferred Stock and the
corresponding amounts payable on all shares of other classes or series of
capital stock of the Company ranking on a parity with the Preferred Stock in the
distribution of assets, then the holders of the Preferred Stock and all other
such classes or series of capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
 
     If liquidating distributions shall have been made in full to all holders of
Preferred Stock, the remaining assets of the Company shall be distributed among
the holders of any other classes or series of capital stock ranking junior to
the Preferred Stock upon liquidation, dissolution or winding up, according to
their respective rights and preferences and in each case according to their
respective number of shares. For such purposes, the consolidation or merger of
the Company with or into any other corporation or entity, or the sale, lease or
conveyance of all or substantially all of the property or business of the
Company, shall not be deemed to constitute a liquidation, dissolution or winding
up of the Company.
 
VOTING RIGHTS
 
     Holders of Preferred Stock will not have any voting rights, except as set
forth below or as otherwise from time to time required by law or as indicated in
the applicable Prospectus Supplement.
 
     Unless otherwise provided for any series of Preferred Stock in the
applicable Prospectus Supplement, so long as any Preferred Stock remains
outstanding, the Company will not, without the affirmative vote or consent of
the holders of at least two-thirds of each series of Preferred Stock outstanding
at the time, given in person or by proxy, either in writing or at a meeting
(such series voting separately as a class), (i) authorize or create, or increase
the authorized or issued amount of, any class or series of capital stock ranking
senior to such series of Preferred Stock with respect to the payment of
dividends or the distribution of assets upon liquidation, dissolution or winding
up or reclassify any authorized capital stock of the Company into such shares,
or create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or (ii) amend, alter or repeal
the provisions of the Certificate of Incorporation or the designating amendment
for such series of Preferred Stock, whether by merger, consolidation or
otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of such series of Preferred Stock or the
holders thereof; provided, however, that with respect to the occurrence of any
of the Events set forth in (ii) above, so long as the Preferred Stock remains
outstanding with the terms thereof materially unchanged, taking into account
that upon the occurrence of such an Event, the Company may not be the surviving
entity, the occurrence of any such Event shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting power of holders
of Preferred Stock and provided further that (x) any increase in the amount of
the authorized Preferred Stock or the creation or issuance of any other series
of Preferred Stock, or (y) any increase in the amount of authorized shares of
such series or any other series of Preferred Stock, in each case ranking on a
parity with or junior to the Preferred Stock of such series with respect to
payment of dividends or the distribution of assets upon liquidation, dissolution
or winding up, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
 
     The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding Preferred Stock of such series shall have been
redeemed or called for redemption and sufficient funds shall have been deposited
in trust to effect such redemption.
 
                                       15
<PAGE>   20
 
CONVERSION RIGHTS
 
     The terms and conditions, if any, upon which any series of Preferred Stock
is convertible into Common Stock will be set forth in the applicable Prospectus
Supplement relating thereto. Such terms will include the number of shares of
Common Stock into which the Preferred Stock is convertible, the conversion price
(or manner of calculation thereof), the conversion period, provisions as to
whether conversion will be at the option of the holders of Preferred Stock or
the Company, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such series of
Preferred Stock.
 
SHAREHOLDER LIABILITY
 
     Under Delaware law, no holder of fully paid shares, including holders of
Preferred Stock, shall be personally liable for any contractual obligation of
the Company.
 
REGISTRAR AND TRANSFER AGENT
 
     The Registrar and Transfer Agent for the Preferred Stock will be set forth
in the applicable Prospectus Supplement.
 
                      DESCRIPTION OF COMMON STOCK WARRANTS
 
     The Company may issue warrants exercisable for Common Stock (the "Common
Stock Warrants") for the purchase of Common Stock. Common Stock Warrants may be
issued independently or together with Common Stock or Preferred Stock (the
Common Stock, the Preferred Stock and the Common Stock Warrants are
collectively, the "Securities") offered by any Prospectus Supplement and may be
attached to or separate from such Securities. Each series of Common Stock
Warrants will be issued under a separate warrant agreement (each, a "Warrant
Agreement") to be entered into between the Company and a warrant agent specified
in the applicable Prospectus Supplement (the "Warrant Agent"). The Warrant Agent
will act solely as an agent of the Company in connection with the Common Stock
Warrants of such series and will not assume any obligation or relationship of
agency or trust for or with any holders or beneficial owners of Common Stock
Warrants. The following sets forth certain general terms and provisions of the
Common Stock Warrants offered hereby. Further terms of the Common Stock Warrants
and the applicable Warrant Agreements will be set forth in the applicable
Prospectus Supplement.
 
     The applicable Prospectus Supplement will describe the terms of the Common
Stock Warrants, including, where applicable, the following: (i) the title of
such Common Stock Warrants; (ii) the aggregate number of such Common Stock
Warrants; (iii) the price or prices at which such Common Stock Warrants will be
issued; (iv) the number of shares of Common Stock purchasable upon exercise of
such Common Stock Warrants; (v) the designation and terms of any other
Securities offered thereby with which such Common Stock Warrants are to be
issued and the number of such Common Stock Warrants issued with each such
Security offered thereby; (vi) the date, if any, on and after which such Common
Stock Warrants and the related Common Stock will be separately transferable;
(vii) the price at which the Common Stock purchasable upon exercise of such
Common Stock Warrants may be purchased; (viii) the date on which the right to
exercise such Common Stock Warrants shall commence and the date on which such
right shall expire; (ix) the minimum or maximum number of such Common Stock
Warrants which may be exercised at any one time; (x) information with respect to
book entry procedures, if any; (xi) a discussion of certain federal income tax
considerations; and (xii) any other terms of such Common Stock Warrants.
 
                                       16
<PAGE>   21
 
                        CERTAIN ANTITAKEOVER PROVISIONS
 
STAGGERED BOARD
 
     The Certificate of Incorporation and the Bylaws provide for the division of
the Board into three classes of directors, each class constituting approximately
one-third of the total number of directors, with the classes serving staggered
three-year terms. The classification of the Board has the effect of making it
more difficult for stockholders to change the composition of the Board, because
only a minority of the directors are up for election, and the Board may not be
replaced by vote of the stockholders, at any one time. Crescent Operating
believes, however, that the longer terms associated with the classified Board
will help to ensure continuity and stability of the Company's management and
policies.
 
     The classification provisions also could have the effect of discouraging a
third party from accumulating a large block of Common Stock or attempting to
obtain control of Crescent Operating, even though such an attempt might be
beneficial to the Company and some, or a majority, of its stockholders.
Accordingly, under certain circumstances stockholders could be deprived of
opportunities to sell their shares of Common Stock at a higher price than might
otherwise be available.
 
NUMBER OF DIRECTORS; REMOVAL; FILLING VACANCIES
 
     The Certificate of Incorporation provides that, subject to any rights of
holders of Preferred Stock to elect additional directors under specified
circumstances ("Preferred Holders' Rights"), the number of directors will be
fixed by the Bylaws. The Bylaws provide that, subject to any Preferred Holders'
Rights, the number of directors will be fixed by the Board, but must not be more
than 25 nor less than three. In addition, the Bylaws provide that, subject to
any Preferred Holders' Rights, and unless the Board otherwise determines, any
vacancies (other than vacancies created by an increase in the total number of
directors) will be filled by the affirmative vote of a majority of the remaining
directors, though less than a quorum, and any vacancies created by an increase
in the total number of directors may be filled by a majority of the entire
Board. Accordingly, the Board could temporarily prevent any stockholder from
enlarging the Board and then filling the new directorship with such
stockholder's own nominees.
 
     The Certificate of Incorporation and the Bylaws provide that, subject to
any Preferred Holders' Rights, directors may be removed only for cause upon the
affirmative vote of holders of at least 80% of the entire voting power of all
the then-outstanding shares of stock entitled to vote generally in the election
of directors, voting together as a single class.
 
NO STOCKHOLDER ACTION BY WRITTEN CONSENT; SPECIAL MEETINGS
 
     The Certificate of Incorporation and the Bylaws provide that any action
required or permitted to be taken by the stockholders of Crescent Operating must
be effected at a duly called annual or special meeting of such holders and may
not be effected by any consent in writing by such holders. Except as otherwise
required by law and subject to the rights of the holders of any Preferred Stock,
special meetings of stockholders of Crescent Operating for any purpose or
purposes may be called only by the Chairman of the Board, Vice Chairman,
President or the Board pursuant to a resolution stating the purpose or purposes
thereof, and any power of stockholders to call a special meeting is specifically
denied. No business other than that stated in the notice shall be transacted at
any special meeting. These provisions may have the effect of delaying
consideration of a stockholder proposal until the next annual meeting, unless a
special meeting is called by the Chairman of the Board, Vice Chairman, President
or the Board.
 
ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS AND STOCKHOLDER PROPOSALS
 
     The Bylaws establish an advance notice procedure for stockholders to make
nominations of candidates for directors or bring other business before an annual
meeting of stockholders of Crescent Operating (the "Stockholder Notice
Procedure").
 
                                       17
<PAGE>   22
 
     The Stockholder Notice Procedure provides that (i) only persons who are
nominated by, or at the direction of, the Board, or by a stockholder who has
given timely written notice containing specified information to the Secretary of
Crescent Operating prior to the meeting at which directors are to be elected,
will be eligible for election as directors of Crescent Operating and (ii) at an
annual meeting, only such business may be conducted as has been brought before
the meeting by, or at the direction of the Chairman or the Board or by a
stockholder who has given timely written notice to the Secretary of Crescent
Operating of such stockholder's intention to bring such business before such
meeting. In general, for notice of stockholder nominations or proposed business
to be conducted at an annual meeting to be timely, such notice must be received
by the Company not less than 70 days nor more than 90 days prior to the first
anniversary of the previous year's annual meeting.
 
     The purpose of requiring stockholders to give the Company advance notice of
nominations and other business is to afford the Board a meaningful opportunity
to consider the qualifications of the proposed nominees or the advisability of
the other proposed business and, to the extent deemed necessary or desirable by
the Board, to inform stockholders and make recommendations about such nominees
or business, as well as to ensure an orderly procedure for conducting meetings
of stockholders. Although the Bylaws do not give the Board power to block
stockholder nominations for the election of directors or proposal for action,
they may have the effect of discouraging a stockholder from proposing nominees
or business, precluding a contest for the election of directors or the
consideration of stockholder proposals if procedural requirements are not met,
and deterring third parties from soliciting proxies for a non-management slate
of directors or proposal, without regard to the merits of such slate or
proposal.
 
RELEVANT FACTORS TO BE CONSIDERED BY THE BOARD
 
     The Certificate of Incorporation, which provides that one of the purposes
of Crescent Operating is to perform the Intercompany Agreement, also provides
that, in determining what is in the best interest of Crescent Operating in
evaluating a "business combination," "change in control" or other transaction, a
director of Crescent Operating shall consider all of the relevant factors, which
may include (i) the immediate and long-term effects of the transaction on
Crescent Operating's stockholders, including stockholders, if any, who do not
participate in the transaction; (ii) the social and economic effects of the
transaction on the Company's employees, suppliers, creditors and customers and
others dealing with the Company and on the communities in which the Company
operates and is located; (iii) whether the transaction is acceptable, based on
the historical and current operating results and financial condition of the
Company; (iv) whether a more favorable price would be obtained for the Company's
stock or other securities in the future; (v) the reputation and business
practices of the other party or parties to the proposed transaction, including
its or their management and affiliates, as they would affect employees of the
Company; (vi) the future value of the Company's securities; (vii) any legal or
regulatory issues raised by the transactions; (viii) the effect on the
Intercompany Agreement; and (ix) the business and financial condition and
earnings prospects of the other party or parties to the proposed transactions
including, without limitation, debt service and other existing financial
obligations, financial obligations to be incurred in connection with the
transaction and other foreseeable financial obligations of such other party or
parties. Pursuant to this provision, the Board may consider subjective factors
affecting a proposal, including certain nonfinancial matters, and on the basis
of these considerations, may oppose a business combination or other transaction
which, evaluated only in terms of its financial merits, might be attractive to
some, or a majority, of the Company's stockholders.
 
AMENDMENT
 
     The Certificate of Incorporation provides that the affirmative vote of the
holders of at least 80% of the stock entitled to vote generally in the election
of directors (the "Voting Stock"), voting together as a single class, is
required to amend provisions of the Certificate of Incorporation relating to
stockholder action without a meeting; the calling of special meetings; the
number, election and term of the Company's directors; the filling of vacancies;
and the removal of directors. The Certificate of Incorporation further provides
that the related Bylaws described above (including the Stockholder Notice
Procedure) may be amended only by the Board or by the affirmative vote of the
holders of at least 80% of the voting power of the outstanding shares of
 
                                       18
<PAGE>   23
 
Voting Stock, voting together as a single class. In all cases, amendments to the
Certificate of Incorporation require that the Board determine that the proposed
amendment is advisable.
 
DELAWARE BUSINESS COMBINATION STATUTE
 
     Section 203 of the DGCL provides that, subject to certain exceptions
specified therein, an "interested stockholder" of a Delaware corporation shall
not engage in any business combination, including mergers or consolidations or
acquisitions of additional shares of the corporation, with the corporation for a
three-year period following the date that such stockholder becomes an interested
stockholder unless (i) prior to such date, the board of directors of the
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder, (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (excluding certain shares), or (iii) on or subsequent to such date,
the business combination is approved by the board of directors of the
corporation and authorized at an annual or special meeting of stockholders by
the affirmative vote of at least 66 2/3% of the outstanding voting stock which
is not owned by the interested stockholder. Except as otherwise specified in
Section 203, an "interested stockholder" is defined to include (x) any person
that is the owner of 15% or more of the outstanding voting stock of the
corporation, or is an affiliate or associate of the corporation and was the
owner of 15% or more of the outstanding voting stock of the corporation at any
time within three years immediately prior to the date of determination and (y)
the affiliates and associates of any such person.
 
     Under certain circumstances, Section 203 makes it more difficult for a
person who would be an interested stockholder to effect various business
combinations with a corporation for a three-year period. Crescent Operating has
not elected to be exempt from the restrictions imposed under Section 203.
However, the Certificate of Incorporation excludes Crescent and its affiliates
from the definition of "interested stockholder" pursuant to the terms of Section
203. The provisions of Section 203 may encourage persons interested in acquiring
Crescent Operating to negotiate in advance with the Board, since the stockholder
approval requirement would be avoided if a majority of the directors then in
office approves either the business combination or the transaction which results
in any such person becoming an interested shareholder. Such provisions also may
have the effect of preventing changes in the management of Crescent Operating.
It is possible that such provisions could make it more difficult to accomplish
transactions which the Company's stockholders may otherwise deem to be in their
best interest.
 
CONTROL SHARE ACQUISITIONS
 
     The Certificate of Incorporation provides that the holder of "control
shares" of Crescent Operating acquired in a control share acquisition have no
voting rights with respect to such control shares except to the extent approved
by a vote of two-thirds of the votes entitled to be cast by stockholders,
excluding shares owned by the acquirer, officers of Crescent Operating and
employees of Crescent Operating who are also directors. "Control shares" are
shares which, if aggregated with all other shares previously acquired which the
person is entitled to vote, would entitle the acquirer to vote (i) 20% or more
but less than one-third, (ii) one-third or more but less than a majority, or
(iii) a majority of the outstanding shares. Control shares do not include shares
that the acquiring person is entitled to vote on the basis of prior stockholder
approval. A "control share acquisition" means that acquisition of control shares
subject to certain exceptions.
 
     The Certificate of Incorporation provides that a person who has made or
proposed to make a control share acquisition and who has obtained a definitive
financing agreement with a responsible financial institution providing for any
amount of financing not to be provided by the acquiring person may compel the
Board to call a special meeting of stockholders to be held within 50 days of
demand to consider the voting rights of the holder in respect of such control
shares. If no request for a meeting is made, the Certificate of Incorporation
permits Crescent Operating itself to present the question at any stockholders'
meeting.
 
     Pursuant to the Certificate of Incorporation, if voting rights are not
approved at a stockholders' meeting or if the acquiring person does not deliver
an acquiring person's statement, which would disclose certain
 
                                       19
<PAGE>   24
 
information about the particular control share acquisition, as required by the
Certificate of Incorporation, then, subject to certain conditions and
limitations set forth in the Certificate of Incorporation, Crescent Operating
may redeem any or all of the control shares, except those for which voting
rights have previously been approved, for "fair value." Fair value is
determined, without regard to the absence of voting rights, as of the date of
the last control share acquisition or of any meeting of stockholders at which
the voting rights of the holder in respect of such control shares are considered
and not approved, and means, for purposes of the redemption, the highest closing
sale price during the 30-day period immediately prior to and including the date
in question, of a share of such stock on the exchange on which the shares are
listed or, if not so listed, the highest closing bid quotation during such
30-day period or, if no such quotations are available, the fair market value as
determined by the Board. Under the Certificate of Incorporation, if voting
rights of the holder in respect of such control shares are approved at a
stockholders' meeting and, as a result, the acquirer would be entitled to vote a
majority of the shares entitled to vote, then the Certificate of Incorporation
shall be amended to so state, and all other stockholders will have the rights of
dissenting stockholders under the DGCL. The Certificate of Incorporation
provides that the fair value of the shares for purposes of such appraisal rights
may not be less than the highest price per share paid by the acquirer in the
control share acquisition, and that certain limitations and restrictions of the
DGCL otherwise applicable to the exercise of dissenters' rights do not apply.
 
     The control share acquisition provisions do not apply to the holder in
respect of control shares acquired in a merger, consolidation or share exchange
if Crescent Operating is a party to the transaction, or if the acquisition is
approved or excepted by the Certificate of Incorporation or Bylaws prior to a
control share acquisition. The control share provisions in the Certificate of
Incorporation do not apply to Crescent and its affiliates.
 
RIGHTS PLAN
 
     The Company has adopted the Rights Plan, pursuant to which one Right will
be issued with every share of Common Stock. Each Right entitles the registered
holder of such Right to purchase from the Company one-hundredth of a share of
Series A Junior Preferred Stock at a price of $5.00, subject to adjustment. The
Rights will not be exercisable until the Rights Distribution Effective Date.
 
     Under the Rights Plan, until the Rights Distribution Effective Date, the
Rights will be transferred only with the Common Stock. Following the Rights
Distribution Effective Date, separate certificates evidencing the Rights will be
mailed to each holder of record on the Rights Distribution Effective Date.
Thereafter, each holder of a Right (other than the Acquiring Person) will have
the right to receive, upon exercise of such Right, that number of shares of
Common Stock having a market value equal to two times the exercise price of the
Right. Similar provisions apply in the event of a merger or other business
combination as a result of which an Acquiring Person will own 10% or more of the
outstanding shares of Common Stock. Prior to the time that any such Acquiring
Person acquires 10% or more of the outstanding shares of Common Stock, the Board
may redeem the Rights in whole for $0.01 per Right. After the time that any such
Acquiring Person acquires 10% or more, but less than 50%, of the outstanding
shares of Common Stock, the Board may exchange the Rights, in whole or in part,
at an exchange ratio of one share of Common Stock, or one-hundredth of a share
of the Series A Junior Preferred Stock per Right.
 
     The Rights will expire on June 12, 2007, unless such expiration date is
extended or unless the Rights are redeemed earlier or exchanged by the Company.
The terms of the Rights may be amended by the Board without the consent of the
holders of the Rights; provided however, that from and after such time as any
person or group of affiliated or associated persons becomes an Acquiring Person,
no such amendment may adversely affect the interests of the holders of the
Rights.
 
     The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to an Acquiring Person that attempts to acquire the Company
on terms not approved by the Board. The Rights Plan contains certain provisions
to exclude Crescent and its affiliates from the operative provisions thereof.
 
                                       20
<PAGE>   25
 
                              PLAN OF DISTRIBUTION
 
     The Company may issue the Securities from time to time in connection with
the acquisition by the Company of other businesses, assets or securities. It is
expected that the terms of the acquisitions involving the issuance of Securities
covered by this Prospectus will be determined by direct negotiations with the
owners or controlling persons of the businesses, assets or securities to be
acquired by the Company. No underwriting discounts or commissions will be paid,
although finder's fees may be paid from time to time with respect to specific
acquisitions. Any person receiving such fees may be deemed to be an underwriter
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
 
                                    EXPERTS
 
     The combined financial statements of the Carter-Crowley Asset Group for the
period from January 1, 1997 through May 8, 1997 and the consolidated financial
statements of Crescent Operating for the period from May 9, 1997 through
December 31, 1997, both appearing in Crescent Operating's Annual Report on Form
10-K for the year ended December 31, 1997, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their reports thereon included
therein and incorporated herein by reference. Such combined financial statements
and consolidated financial statements are incorporated herein by reference in
reliance upon such report given the authority of such firm as experts in
accounting and auditing.
 
     The audited combined financial statements of the Carter-Crowley Asset Group
as of and for the two years in the period ended December 31, 1996 and the
audited consolidated financial statements of CBHS as of and for the period ended
September 30, 1997, both included in Crescent Operating's Annual Report on Form
10-K for the year ended December 31, 1997 incorporated by reference in this
prospectus and elsewhere in the registration statement, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated herein by reference in
reliance upon the authority of said firm as experts in giving said reports.
 
                                 LEGAL MATTERS
 
     The legality of the issuance of the Securities will be passed upon for the
Company by Shaw Pittman Potts & Trowbridge, Washington, D.C.
 
                                       21
<PAGE>   26
 
                                    PART II
               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
 
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
     The Certificate of Incorporation provides that no director shall be
personally liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director. However, unless the DGCL provides
otherwise, a director may be personally liable to the Company or its
stockholders (i) for any breach of the director's duty of loyalty to the Company
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, which concerns unlawful payments of dividends, stock
purchases or redemptions or (iv) for any transaction from which the director
derived an improper personal benefit. Neither the amendment nor repeal of such
Certificate of Incorporation provision will eliminate or reduce the effect of
such provision in respect of any matter occurring, or any cause of action, suit
or claim that, but for such provision, would accrue or arise prior to such
amendment or repeal.
 
     While the Certificate of Incorporation provides directors with protection
from awards for monetary damages for breaches of their duty of care, it does not
eliminate such duty. Accordingly, the Certificate of Incorporation will have no
effect on the availability of equitable remedies, such as an injunction or
rescission, based on the director's breach of his or her duty of care.
 
     The Certificate of Incorporation provides that each person who was
threatened to be made a party to or is involved in any proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that
such person, or a person for whom such person is the legal representative, is or
was a director or officer of the Company or is or was serving at the request of
the Company as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other capacity while serving as a director, officer, employee or
agent, will be indemnified and held harmless by the Company to the fullest
extent authorized by the DGCL (but, in the case of any such amendment, only to
the extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment), against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith. Such right to indemnification
includes the right to have the Company pay the expenses incurred in defending
any such proceeding in advance of its final disposition, subject to the
provisions of the DGCL. Such rights are not exclusive of any other right which
any person may have or thereafter acquire under any statute, provision of the
Certificate of Incorporation, Bylaw, agreement, vote of stockholders or
disinterested directors or otherwise. No repeal or modification of such
provision will in any way diminish or adversely affect the rights of any
director, officer, employee or agent of the Company thereunder in respect of any
occurrence or matter arising prior to any such repeal or modification. The
Certificate of Incorporation also specifically authorizes the Company to
maintain insurance and to grant similar indemnification rights to employees or
agents.
 
     The Company has entered into indemnification agreements with each of its
executive officers and directors. Such indemnity agreements require that the
Company indemnify its officers and directors to the fullest extent permitted by
law, and advance to the officers and directors all related expenses, subject to
reimbursement if it is subsequently determined that the indemnification is not
permitted. Such agreements require the Company to indemnify and advance expenses
incurred by officers and directors seeking to enforce their rights under the
indemnification agreements and cover officers and directors under the Company's
directors' and officers' liability insurance. The indemnification agreements
offer substantially the same scope of coverage afforded by the Certificate of
Incorporation, and provide greater assurance to directors and officers that
indemnification is available, because as contracts, they cannot be modified
unilaterally in the future by the Board or the stockholders.
 
                                      II-1
<PAGE>   27
 
     The Company carries insurance for its officers and directors that insures
against certain liabilities incurred by them in the discharge of their official
functions.
 
ITEM 21. EXHIBITS.
 
     The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-4, including those incorporated herein by
reference.
 
<TABLE>
<CAPTION>
        EXHIBIT
          NO.                               DESCRIPTION OF EXHIBIT
        -------                             ----------------------
<C>                      <S>
          4.1            -- First Amended and Restated Certificate of Incorporation
                            of the Company (filed as Exhibit 3.3 to the Company's
                            Registration Statement on Form S-1 (File No. 333-25223)
                            (the "Form S-1") and incorporated herein by reference).
          4.2            -- Amended and Restated Bylaws of the Company (filed as
                            Exhibit 3.4 to the Company's Quarterly Report on Form
                            10-Q for the quarter ended June 30, 1997 (the "June 1997
                            Form 10-Q") and incorporated herein by reference).
          4.3            -- Specimen Stock Certificate (filed as Exhibit 4.1 to the
                            Form S-1 and incorporated herein by reference).
          4.4            -- Preferred Share Purchase Rights Plan (filed as Exhibit
                            4.2 to the June 1997 Form 10-Q) and incorporated herein
                            by reference).
          4.21           -- Amendment to Amended and Restated Bylaws (filed
                            herewith).
          5.1*           -- Opinion of Shaw Pittman Potts & Trowbridge as to the
                            legality of the Securities being registered by the
                            Company.
         12.1            -- Computation of ratio of earnings to fixed charges and
                            Preferred Stock dividends (filed herewith).
         23.01           -- Consent of Ernst & Young LLP, Independent Auditors, dated
                            June 26, 1998 (filed herewith).
         23.02           -- Consent of Arthur Andersen LLP, Independent Public
                            Accountants, dated June 26, 1998 (filed herewith).
         23.03           -- Consent of Arthur Andersen LLP, Independent Public
                            Accountants, dated June 23, 1998 (filed herewith).
         23.04*          -- Consent of Shaw Pittman Potts & Trowbridge (included in
                            its opinion filed as Exhibit 5.1 to this Registration
                            Statement).
         24.1            -- Powers of Attorney (included on the signature page
                            herewith).
</TABLE>
 
---------------
 
* To be filed by amendment
 
ITEM 22. UNDERTAKINGS.
 
     (a) The undersigned Registrant hereby undertakes:
 
          (1) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this Registration Statement:
 
             (i) To include any prospectus required by Section 10(a)(3) of the
        Securities Act;
 
             (ii) To reflect in the prospectus any facts or events arising after
        the effective date of the Registration Statement (or the most recent
        post-effective amendment thereof) which, individually or in the
        aggregate, represent a fundamental change in the information set forth
        in the Registration Statement. Notwithstanding the foregoing, any
        increase or decrease in volume of Securities offered (if the total
        dollar value of securities offered would not exceed that which was
        registered) and any deviation from the low or high end of the estimated
        maximum offering range may be reflected in the form of prospectus filed
        with the Commission pursuant to Rule 424(b) if, in the aggregate, the
        changes in volume and price represent no more than a 20% change in the
        maximum aggregate offering price set forth in the "Calculation of
        Registration Fee" table in the effective Registration Statement;
 
                                      II-2
<PAGE>   28
 
             (iii) To include any material information with respect to the plan
        of distribution not previously disclosed in the Registration Statement
        or any material change to such information in the Registration
        Statement;
 
     provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
     the information required to be included in a post-effective amendment by
     those paragraphs is contained in periodic reports filed by the Registrant
     pursuant to Section 13 or Section 15(d) of the Exchange Act that are
     incorporated by reference in the Registration Statement.
 
          (2) That, for the purpose of determining any liability under the
     Securities Act, each such post-effective amendment shall be deemed to be a
     new registration statement relating to the securities offered therein, and
     the offering of such securities at that time shall be deemed to be the
     initial bona fide offering thereof.
 
          (3) To remove from registration by means of a post-effective amendment
     any of the securities being registered which remain unsold at the
     termination of the offering.
 
     (b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
 
     (c) The undersigned Registrant hereby undertakes as follows:
 
          (1) that prior to any public reoffering of Securities registered
     hereunder through use of a prospectus which is a part of this Registration
     Statement, by any person or party deemed to be an underwriter within the
     meaning of Rule 145(c), the issuer undertakes that such reoffering
     prospectus will contain the information called for by the applicable
     registration form with respect to reofferings by persons who may be deemed
     underwriters, in addition to the information called for by the other items
     of the applicable form.
 
          (2) that every prospectus: (i) that is filed pursuant to paragraph (1)
     immediately preceding, or (ii) that purports to meet the requirements of
     Section 10(a)(3) of the Securities Act and is used in connection with an
     offering of securities subject to Rule 415, will be filed as a part of an
     amendment to the Registration Statement and will not be used until such
     amendment is effective, and that, for purposes of determining any liability
     under the Securities Act, each such post-effective amendment shall be
     deemed to be a new registration statement relating to the securities
     offered therein, and the offering of such securities at that time shall be
     deemed to be the initial bona fide offering thereof.
 
     (d) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
 
     (e) The undersigned Registrant hereby undertakes to supply by means of a
Prospectus Supplement or post-effective amendment all information concerning a
transaction, and the company being acquired involved therein, that was not the
subject of and included in the Registration Statement when it became effective.
 
                                      II-3
<PAGE>   29
 
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Fort Worth, State of
Texas, on the 26 day of June, 1998.
 
                                            CRESCENT OPERATING, INC.
 
                                            By:    /s/ GERALD W. HADDOCK
                                              ----------------------------------
                                                      Gerald W. Haddock
                                                President and Chief Executive
                                                            Officer
 
                               POWERS OF ATTORNEY
 
     KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of Gerald W. Haddock, John C. Goff and Jeffrey L. Stevens, and
each of them, as his true and lawful attorney-in-fact and agent, each with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, with full power to act alone, to sign any or
all documents (including both pre- and post-effective amendments to this
Registration Statement) and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as
each said attorney-in-fact and agent might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or any substitute or substitutes for any of them, may lawfully do or cause
to be done by virtue hereof.
 
     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
 
<TABLE>
<CAPTION>
                     SIGNATURES                                       TITLE                    DATE
                     ----------                                       -----                    ----
<C>                                                      <S>                               <C>
              /s/ RICHARD E. RAINWATER                   Chairman of the Board of          June 26, 1998
-----------------------------------------------------      Directors
                Richard E. Rainwater*
 
                  /s/ JOHN C. GOFF                       Vice Chairman of the Board of     June 26, 1998
-----------------------------------------------------      Directors
                    John C. Goff*
 
                /s/ GERALD W. HADDOCK                    President and Chief Executive     June 26, 1998
-----------------------------------------------------      Officer and Director
                  Gerald W. Haddock                        (Principal Executive Officer)
 
               /s/ JEFFREY L. STEVENS                    Executive Vice President, Chief   June 26, 1998
-----------------------------------------------------      Operating Officer and Director
                 Jeffrey L. Stevens*
 
                /s/ RICHARD P. KNIGHT                    Chief Financial Officer           June 26, 1998
-----------------------------------------------------      (Principal Financial and
                 Richard P. Knight*                        Accounting Officer)
 
                /s/ ANTHONY M. FRANK                     Director                          June 26, 1998
-----------------------------------------------------
                  Anthony M. Frank*
 
                 /s/ CARL F. THORNE                      Director                          June 26, 1998
-----------------------------------------------------
                   Carl F. Thorne*
 
               /s/ PAUL E. ROWSEY, III                   Director                          June 26, 1998
-----------------------------------------------------
                Paul E. Rowsey, III*
</TABLE>
 
---------------
 
* by Gerald W. Haddock pursuant to power of attorney
 
                                      II-4
<PAGE>   30
 
                                  EXHIBIT LIST
 
<TABLE>
<CAPTION>
  EXHIBIT
    NO.                        DESCRIPTION OF EXHIBIT
  -------                      ----------------------
<C>         <S>
        4.1 -- First Amended and Restated Certificate of Incorporation
               of the Company (filed as Exhibit 3.3 to the Company's
               Registration Statement on Form S-1 (File No. 333-25223)
               (the "Form S-1") and incorporated herein by reference).
        4.2 -- Amended and Restated Bylaws of the Company (filed as
               Exhibit 3.4 to the Company's Quarterly Report on Form
               10-Q for the quarter ended June 30, 1997 (the "June 1997
               Form 10-Q") and incorporated herein by reference).
        4.3 -- Specimen Stock Certificate (filed as Exhibit 4.1 to the
               Form S-1 and incorporated herein by reference).
        4.4 -- Preferred Share Purchase Rights Plan (filed as Exhibit
               4.2 to the June 1997 Form 10-Q and incorporated herein by
               reference).
        4.21 -- Amendment to Amended and Restated Bylaws (filed
               herewith).
        5.1* -- Opinion of Shaw Pittman Potts & Trowbridge as to the
               legality of the Securities being registered by the
               Company.
       12.1 -- Computation of ratio of earnings to fixed charges and
               Preferred Stock dividends (filed herewith).
       23.01 -- Consent of Ernst & Young LLP, Independent Auditors, dated
               June 26, 1998 (filed herewith).
       23.02 -- Consent of Arthur Andersen LLP, Independent Public
               Accountants, dated June 26, 1998 (filed herewith).
       23.03 -- Consent of Arthur Andersen LLP, Independent Public
               Accountants, dated June 23, 1998 (filed herewith).
       23.04* -- Consent of Shaw Pittman Potts & Trowbridge (included in
               its opinion filed as Exhibit 5.1 to this Registration
               Statement).
       24.1 -- Powers of Attorney (included on the signature page
               herewith).
</TABLE>
 
---------------
 
* To be filed by amendment