51061judD1R3.cvr 3/6/02 9:33 AM Page 1 Times have changed. Our commitment hasn’t. CONTINENTAL AIRLINES 2001 ANNUAL REPORT 51061judD1R3.cvr 3/6/02 9:33 AM Page 2 2001 Accomplishments Stockholder Information FLY TO WIN MAKE RELIABILITY A REALITY HEADQUARTERS COMMON STOCK •Made a profit in the first three quarters of 2001 despite • Once again ranked No. 1 in on-time performance among Continental Airlines, Inc. Continental’s common stock trades on the New York Stock a worldwide economic slowdown and a resulting decline major U.S. hub carriers, paying on-time performance 1600 Smith Street Exchange under the symbol CAL. As of February 1, 2002, in yield bonuses to employees 11 of 12 months Houston, TX 77002 there were 63,605,761 shares of common stock outstanding, •Continued to provide customers with inflight amenities, •Delivered the first-ever NYC “train to plane” service (713) 324-5000 with approximately 13,501 holders of record. city ticket offices and Presidents Club lounges after Sept. 11, •Successfully incorporated the B737-900 and B757-300 while most airlines reduced or eliminated services into the fleet INVESTOR INFORMATION Holders of our common stock are entitled to one vote per •Increased eTicket sales to 59.5 percent of total tickets sold, •Increased eService Center usage to 42 percent of eligible To obtain a Form 10-K or other financial share on all matters submitted to a vote of common stock- up from 54.1 percent in 2000 passengers in December information, visit the Company’s website at: holders, subject to restrictions governing voting rights of •Reduced ticket distribution costs •Developed, launched and operated the first polar route continental.com or write: holders who are not United States citizens. We have not paid •Achieved $487 million in sales through continental.com between New York and Hong Kong Investor Relations cash dividends on our common stock and have no current •Completed interline eTicketing with United Air Lines Continental Airlines, Inc. intention to do so. Certain of our credit agreements and WORKING TOGETHER P.O. Box 4607 indentures limit our and certain of our subsidiaries’ ability FUND THE FUTURE • Placed on FORTUNE magazine’s list of “The 100 Best Houston, TX 77210-4607 to pay cash dividends. •Purchased all CAL.A shares from Northwest and cele- Companies to Work For” for the fourth consecutive year brated CO Independence Day •Successfully communicated critical post-Sept. 11 issues TRANSFER AGENT AND REGISTRAR Below are the high and low sale prices for our common •Opened the C3 Concourse of the Newark Global Gate- and challenges to internal and external audiences Mellon Investor Services LLC stock as reported on the New York Stock Exchange for 2001 way project •Reinforced company culture promoting customer satis- 85 Challenger Road and 2000: •Maintained a cash balance of at least $1 billion, ending faction by creating a job environment where people enjoy Ridgefield Park, NJ 07660 the year with $1.13 billion in cash coming to work Attn: Shareholder Services COMMON STOCK PRICES • Financed $1.4 billion of 2001 aircraft at 6.69 percent •Awarded 18 Ford Explorers as part of employee perfect melloninvestor.com 2001 2000 interest attendance program (888) 711-6201 HIGH LOW HIGH LOW • Opened the North Houston Reservation center • Enrolled an additional 5,000 employees to receive daily First Quarter $ 57.88 $ 39.10 $ 46.63 $ 29.00 Second Quarter $ 51.95 $ 38.70 $ 50.00 $ 37.63 •Began construction on Houston Terminal E, which was company news via their home computer INDEPENDENT AUDITORS Third Quarter $ 52.32 $ 12.35 $ 54.81 $ 43.13 financed at 6.99 percent interest •Successfully negotiated a flight instructor contract with Ernst & Young LLP Fourth Quarter $ 27.50 $ 14.85 $ 54.56 $ 40.50 our pilots’ union One Houston Center •Named to Hispanic magazine’s “Most Opportunities for 1221 McKinney Hispanics” list for the third year in a row Houston, TX 77010-2007 •Held employee insurance premiums for best-in-market medical and vision coverage at the previous year’s level – the third consecutive year without an increase 51061judD2R3 3/5/02 6:11 PM Page 1 Financial Highlights YEAR ENDED DECEMBER 31, (In millions except per share data) 2001 2000 1999 1998 1997 Total Operating Revenue $ 8,969 $ 9,899 $ 8,639 $ 7,927 $ 7,194 Total Operating Expenses 8,825 9,170 8,024 7,226 6,478 Operating Income 144 729 615 701 716 Income (Loss) Before Income Taxes, Cumulative Effect of Accounting Changes, Extraordinary Charges and Special Items (1) (385) 562 553 770 640 Income (Loss) Before Cumulative Effect of Accounting Changes and Extraordinary Charge (95) 348 488 387 389 Net Income (Loss) (95) 342 455 383 385 Basic Earnings (Loss) per Share ($ 1.72) $ 5.62 $ 6.54 $ 6.34 $ 6.65 Diluted Earnings (Loss) per Share ($ 1.72) $ 5.45 $ 6.20 $ 5.02 $ 4.99 Diluted Earnings (Loss) per Share Adjusted for Cumulative Effect of Accounting Changes, Extraordinary Charges and Special Items (1) ($ 4.79) $ 5.45 $ 4.61 $ 6.03 $ 5.03 (1) Special items in 2001 included a $146 million charge for fleet impairment losses, costs associated with furloughs and company-offered leaves and other items. In addition, special items included a $417 million grant under the Air Transportation Safety and System Stabilization Act. Results for 2000 include a $9 mil- lion one-time gain for the sale of the Company’s investment in America West. Special items in 1999 include a fleet disposition/impairment loss of $81 million and a net gain on the sale of non-strategic assets of $326 million (primarily Amadeus Global Travel Distribution S.A.) and in 1998 special items include a fleet disposition/impairment loss of $122 million. Operating Statistics (Jet operations only, excluding regional jets operated by ExpressJet) 2001 2000 1999 1998 1997 Revenue Passengers (thousands) 44,238 46,896 45,540 43,625 41,210 Revenue Passenger Miles (millions) (a) 61,140 64,161 60,022 53,910 47,906 Available Seat Miles (millions) (b) 84,485 86,100 81,946 74,727 67,576 Passenger Load Factor (c) 72.4% 74.5% 73.2% 72.1% 70.9% Breakeven Passenger Load Factor (d)(e) 74.9% 67.6% 66.4% 61.6% 61.0% Passenger Revenue per Available Seat Mile 8.98¢ 9.84¢ 9.12¢ 9.23¢ 9.29¢ Operating Cost per Available Seat Mile (f) 9.58¢ 9.68¢ 8.98¢ 8.89¢ 9.04¢ Average Yield per Revenue Passenger Mile (g) 12.42¢ 13.20¢ 12.45¢ 12.79¢ 13.11¢ Average Price per Gallon of Fuel 78.32¢ 84.21¢ 46.56¢ 46.83¢ 62.91¢ Fuel Gallons Consumed (millions) 1,424 1,533 1,536 1,487 1,357 Actual Aircraft in Fleet at End of Period (h) 352 371 363 363 337 (a) The number of scheduled miles flown by revenue passengers. (b) The number of seats available for passengers multiplied by the number of scheduled miles those seats are flown. (c) Revenue passenger miles divided by available seat miles. (d) The percentage of seats that must be occupied by revenue passengers in order for us to breakeven on an income before income taxes basis, excluding nonre- curring charges and other special items. (e) 2001 excludes $146 million of fleet impairment, severance and other special charges and a $417 million Stabilization Act grant. 2000 excludes a $9 million one-time gain for the sale of our investment in America West. Also excludes an $81 million fleet disposition/impairment loss and a $326 million net gain pri- marily resulting from the sale of our interest in Amadeus Global Travel Distribution S.A. and other asset sales in 1999 and a $122 million fleet disposition/ impairment loss in 1998. (f) 2001 excludes $124 million of fleet impairment, severance and other special charges and a $417 million Stabilization Act grant. Also excludes an $81 million and $122 million fleet disposition/impairment loss in 1999 and 1998, respectively. (g) The average revenue received for each mile a revenue passenger is carried. (h) Excludes the following aircraft that are either temporarily or permanently removed from service: 24 DC-10-30 aircraft, two 747-200 aircraft, two 727-200 aircraft, 25 MD-80 aircraft and six 737-300 aircraft removed from service as of December 31, 2001. Excludes nine DC-10-30 aircraft, three 747-200 aircraft, one A-300 aircraft and two 727-200 aircraft removed from service as of December 31, 2000. Excludes three DC-10-30 aircraft, three 747-200 aircraft, three DC-9-30 aircraft, one A300 aircraft and two 727-200 aircraft removed from service as of December 31, 1999 and four all cargo 727 aircraft at our wholly owned subsidiary Continental Micronesia, Inc. Excludes six all cargo 727 aircraft at Continental Micronesia, Inc., one A300 aircraft and one 747-200 aircraft at December 31, 1998. Excludes six all cargo 727 aircraft at Continental Micronesia, Inc., two 737-100 aircraft (removed from service in 1997) and three DC- 10-30 aircraft (that were delivered in 1997 but were not placed into service until 1998) at December 31, 1997. 2001 ANNUAL REPORT 1 51061judD2R3 3/5/02 6:11 PM Page 2 To our co-workers, FIVE YEAR ON-TIME PERFORMANCE FIVE YEAR COMPLETION FACTOR 1997–2001 1997–2001 (average of annual on-time percentage) (average of annual completion percentage) 78.2 97.8 77.1 97.3 76.5 76.3 76.2 97.1 96.6 96.4 96.1 96.0 71.8 71.2 Continental Delta Northwest American US Airways United America West Continental Delta America West American US Airways United Northwest Source: Derived from U.S.