Record fuel prices hurt results for full year; weak economic
environment impacts fourth quarter HOUSTON, Jan. 29
/PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL) today
reported a 2008 net loss of $585 million ($5.54 diluted loss per
share). Excluding $234 million of previously announced special
items, Continental recorded a net loss of $351 million ($3.32
diluted loss per share) for the year. Weakening economic conditions
and highly volatile fuel prices presented financial challenges for
the airline in the fourth quarter 2008. Continental recorded a
fourth quarter net loss of $266 million ($2.33 diluted loss per
share). Excluding $170 million of previously announced special
items, Continental recorded a fourth quarter net loss of $96
million ($0.84 diluted loss per share). For the full year 2008, jet
fuel prices exhibited significant volatility, reaching record high
levels and dramatically increasing costs over 2007. Consolidated
fuel cost totaled $5.9 billion in 2008, a $1.9 billion increase
over 2007, with mainline fuel cost totaling $4.9 billion, a $1.6
billion increase over 2007. During the year, the price of a barrel
of crude oil peaked at $147.27 on July 11, then fell to a low of
$32.40 on December 19, the first time in almost five years that the
price fell below $35.00. For 2008, mainline fuel cost was $3.27 per
gallon, including a $0.10 per gallon net cost of effective fuel
hedges. "I want to thank my co-workers for working together to meet
tough operational and financial challenges during the year," said
Larry Kellner, Continental's chairman and chief executive officer.
"While there are continuing hard times ahead, thanks to our team,
we are well-positioned to maintain our place as an industry
leader." Fourth Quarter Revenue and Capacity Total revenue for the
fourth quarter was $3.5 billion, a decrease of 1.5 percent compared
to the same period in 2007. Consolidated revenue passenger miles
(RPMs) for the fourth quarter decreased 8.1 percent year-over-year
on a capacity decrease of 7.4 percent, resulting in a fourth
quarter consolidated load factor of 78.7 percent, 0.7 points lower
than the fourth quarter 2007. Consolidated yield for the fourth
quarter increased 5.7 percent year-over-year. Consolidated revenue
per available seat mile (RASM) for the fourth quarter increased 4.8
percent year-over-year due to increased yields. Mainline RPMs in
the fourth quarter of 2008 decreased 8.5 percent compared to the
fourth quarter 2007, on a capacity decrease of 8.0 percent
year-over-year. Mainline load factor was 79.3 percent, down 0.4
points year-over-year. Continental's mainline yield increased 6.4
percent in the fourth quarter over the same period in 2007. As a
result, fourth quarter 2008 mainline RASM was up 5.9 percent over
the fourth quarter of 2007. Passenger revenue for the fourth
quarter of 2008 and period-to-period comparisons of related
statistics by geographic region for the company's mainline
operations and regional operations are as follows: Percentage
Increase (Decrease) in Fourth Quarter 2008 vs. Fourth Quarter 2007
------------------------------------------- Passenger Revenue
Passenger (in millions) Revenue RASM ASMs ------------ ------- ----
---- Domestic $1,293 (6.9)% 5.5 % (11.8)% Trans-Atlantic 655 1.5 %
2.8 % (1.3)% Latin America 388 6.4 % 10.3 % (3.5)% Pacific 236
(2.4)% 9.6 % (11.0)% Total Mainline $2,572 (2.6)% 5.9 % (8.0)%
Regional $531 (3.8)% (2.0)% (1.9)% Consolidated $3,103 (2.8)% 4.8 %
(7.4)% Fourth Quarter Operations Continental's employees earned a
total of $5 million in cash incentives for on-time performance in
two of the three months during the quarter. The company recorded a
U.S. Department of Transportation (DOT) on-time arrival rate of
75.1 percent and a systemwide mainline segment completion factor of
99.3 percent during the quarter. Continental's operational
performance during the fourth quarter started off positively but
deteriorated in December due to severe winter weather at all three
hub airports, including a rare snow and ice storm at Houston's Bush
Intercontinental Airport. On Dec. 10, 2008, freezing rain and snow
accumulated at Bush Intercontinental in the earliest snowfall in
Houston in more than 60 years. The duration and amount of frozen
precipitation far exceeded the forecast upon which Continental
planned its operations for the evening. As a result, the weather
caused extensive mainline and regional flight cancellations and
delays, including numerous lengthy delays on the tarmac in Houston.
Continental has revised operational procedures and implemented
numerous measures to prevent this poor performance from recurring,
including improving its de-icing capabilities, at its Houston hub.
On Dec. 20, 2008, Continental flight 1404, a Boeing 737-500
aircraft, went off the runway at Denver International Airport. All
110 customers and five crew members safely evacuated from the plane
with no life-threatening injuries. Continental's top priority is to
continue to work closely with passengers and crew members who need
assistance. In addition, the company is cooperating with the
National Transportation Safety Board in its effort to determine the
probable cause of the accident. "We are grateful for the quick
actions of our crew on Flight 1404, who evacuated all our
passengers safely, and for the fact that none of our passengers or
crew sustained life-threatening injuries," said Jeff Smisek,
president and chief operating officer. Product Improvements
Continental completed the installation of Audio/Video on Demand
(AVOD) inflight entertainment systems in economy sections of its
fleet of Boeing 757-200 aircraft. The system has been available in
the BusinessFirst cabins of these aircraft since early 2007. The
aircraft are used primarily on trans-Atlantic flights to and from
Continental's New York hub at Newark Liberty International Airport.
Working with the Transportation Security Administration (TSA),
Continental continued to roll out its paperless boarding pass
program, extending it to New York LaGuardia and Cleveland Hopkins
airports. The technology heightens the ability to detect fraudulent
boarding passes, while improving customer service and reducing
paper use. Continental customers may also use this technology at
six additional airports: Houston Intercontinental and Newark
Liberty, Ronald Reagan Washington National Airport, Logan
International Airport in Boston, Austin-Bergstrom International
Airport and San Antonio International Airport. During the quarter,
the company began waiving first checked-bag fees for primary
cardholders of Continental Airlines Chase credit and debit cards.
In addition, Continental began waiving second checked-bag fees for
primary cardholders of Continental Airlines Presidential Plus
cards. Continental announced that it will launch seasonal daily
nonstop service between its Cleveland hub and London's Heathrow
Airport in May, replacing the current seasonal service between
Cleveland and London/Gatwick Airport, and will begin daily nonstop
service between its Houston hub and Frankfurt in November, subject
to government approval. In addition, the company filed an
application with the DOT to operate daily year-round service
between Houston and Rio de Janeiro, beginning in June. Continental
will inaugurate daily nonstop service between New York and Shanghai
in March 2009. Continental outranked all other U.S. carriers to be
chosen as the Best Airline for North American Travel in Business
Traveler magazine's 2008 Best in Business Travel Survey and placed
highest among U.S. airlines for Best Flight Attendants in North
America. In addition, the company was named the Best Large Domestic
Airline for Premium Class and Best Value for the Money
(International) among all airlines in Zagat's 2008 Airline Survey.
Of the U.S. network airlines, Continental led in most categories,
including Best Frequent Flier Programs and Best Airline Websites.
Fourth Quarter Costs Continental's mainline cost per available seat
mile (CASM) increased 10.7 percent (8.5 percent excluding special
charges). Fuel prices for the fourth quarter were up 16.6 percent
compared to the prior year. CASM holding fuel rate constant and
excluding special charges was up 3.0 percent in the fourth quarter
compared to the same period in 2007. "Given the tremendous
challenges of 2008, the Continental team did an impressive job
operating efficiently and keeping controllable costs down in a
period of reduced capacity," said Zane Rowe, executive vice
president and chief financial officer. Fleet Changes Improve
Efficiency Continental's young, fuel-efficient fleet continued to
provide a natural hedge against the cost of jet fuel. The carrier
is about 36 percent more fuel efficient per mainline revenue
passenger mile than it was in 1997, when the company began its
major re-fleeting. The company continued to improve fuel efficiency
during the quarter by adding modern, fuel-efficient aircraft to its
fleet and installing winglets on additional aircraft. During the
quarter, Continental took delivery of two new Boeing 737-900ER and
two new Boeing 737-800 aircraft. Continental installed winglets on
14 of the company's 737-500 aircraft during the quarter, and now
has winglets on over 270 of its mainline aircraft. All of the
company's 737-700s, 800s, 900s and 757-200s have winglets, as do
select aircraft from Continental's 737-300 and -500 series fleets.
Winglets increase aerodynamic efficiency and decrease drag,
reducing fuel consumption and emissions by up to five percent.
During the quarter, 12 Boeing 737 classic aircraft exited
Continental's fleet. Two owned 737-500 aircraft were sold to a
Russian leasing company and two owned 737-300 aircraft were
retired. In addition, the company terminated the leases of three
737-500 aircraft, which were sold by the lessor to a Russian
airline, and returned five leased 737-300 aircraft to lessors upon
lease expiration. New Aircraft Deliveries As a result of
rescheduling due to the recent Boeing strike and other adjustments,
Continental is now scheduled to take delivery of 13 Boeing
737-900ER aircraft in 2009 (one of which was delivered earlier this
month), and 11 Boeing 737 and two Boeing 777 aircraft in 2010.
Continental has also agreed to terms under which it would lease
four additional 757-300 aircraft from Boeing Capital Corporation.
Continental expects to place these aircraft in service in the first
half of 2010, following completion of all modifications required to
conform the aircraft to Continental's other 757-300 aircraft. Cash
and Financing Continental ended the fourth quarter with $2.64
billion in unrestricted cash and short-term investments. In the
fourth quarter, the company completed a public offering of 13
million shares of Class B common stock at an average price to the
public of $15.84 per share, raising $200 million ($196 million
net). Proceeds from the offering were used for general corporate
purposes. 2008 in Review Continental took a number of steps to
strengthen its cash balance and future competitive position, and
continued to distinguish itself from competitors through superior
customer service and excellent employee relations. Continental: --
Increased total revenue by $1.0 billion to $15.2 billion for the
year, up 7.1 percent over the same period in 2007. Continental
reported record full year passenger revenue with increases in all
mainline geographic regions as well as regional operations. --
Raised approximately $1.2 billion through an amended Bankcard
Agreement (including the advance sale of mileage credits), the
issuance of common stock, the sale of Continental's remaining
equity interest in Copa, a new pre-delivery payment facility and
other new secured borrowings. -- Announced plans to leave SkyTeam
and join Star Alliance and begin broad code-sharing and other
commercial cooperation with United in the fourth quarter of 2009.
-- Filed an application with the DOT to join United, Lufthansa, Air
Canada and certain other Star Alliance members in an antitrust
immunized alliance. Approval by the DOT will enable Continental,
United and the other immunized Star Alliance carriers to work
closely together to deliver highly competitive international flight
schedules, fares and service. -- Unveiled new 180-degree lie-flat
seats for the BusinessFirst cabin. Customers will begin seeing
lie-flats seats on Continental's Boeing 777 and 757-200 aircraft
that serve long-haul international routes in the fall of 2009, on
its 767-400 aircraft (which will also receive AVOD entertainment
systems) beginning in 2010, and on its Boeing 787 fleet as the
aircraft are delivered to Continental. -- Entered into a new
seven-year capacity purchase agreement with ExpressJet Airlines,
Inc. to provide regional jet service at lower rates, resulting in
approximately $50 million of annual savings. -- Inaugurated service
from its New York and Houston hubs to London's Heathrow airport. --
Reduced costs within its control. Although CASM increased 14.9
percent in 2008 compared to 2007, CASM holding fuel rate constant
and excluding special charges decreased 1.5 percent. -- Reduced
capacity from its hubs at the conclusion of the peak summer season,
resulting in a 4.9 percent decline of domestic mainline capacity
and 0.2 percent decline in consolidated capacity in 2008 compared
to 2007. -- Took delivery of 17 Boeing 737-900ER and 12 Boeing
737-800 aircraft. -- Delivered solid operational performance,
despite operating a large number of flights in the New York
airspace, which is the most delayed and congested airspace in the
nation. The company recorded a DOT on-time arrival rate of 74.0
percent and a systemwide mainline segment completion factor of 98.9
percent for the year, operating 78 days without a single mainline
flight cancellation. -- Continued global operations during
Hurricane Ike by activating its off-site Business Continuity
facility, transferring operations of the airline away from its
downtown Houston headquarters. Continental was forced to suspend
operations at Houston for two-and-a-half days in September due to
the hurricane. -- Distributed $158 million of 2007 profit sharing
to its employees on Feb. 14, 2008. In addition, employees earned
$20 million ($455 per employee) in cash incentive payments in 2008
for monthly on-time performance during the year. -- Contributed
$102 million to its defined benefit pension plans in 2008. In
addition, the company contributed $50 million to its defined
benefit pension plans earlier this month. Since the beginning of
2002, Continental has contributed more than $1.6 billion to its
defined benefit pension plans. -- Provided scholarships to 179
employees and dependents through the Continental Scholarship Fund.
Since 2002, the scholarship fund has assisted 1,025 employees or
their dependents. Scholarship funds are donated by employees
through payroll deduction and raised by the Continental Management
Association. -- Donated nearly $1 million to assist 766 employees
with necessities during unexpected emergencies, including Hurricane
Ike relief through Continental's WE CARE Employee Fund. -- Rated as
the top airline on FORTUNE magazine's annual airline industry list
of World's Most Admired Companies for the fifth consecutive year.
The airline also ranked No. 41 on FORTUNE's World's Most Admired
Companies "Top 50" list, which ranks companies in a wide variety of
industries. Continental was the only U.S. passenger carrier on the
"Top 50" list. -- Was named the "Best Airline in North America" at
the 2008 OAG Airline of the Year Awards for the fifth straight
year. Corporate Background Continental Airlines is the world's
fifth largest airline. Continental, together with Continental
Express and Continental Connection, has more than 2,800 daily
departures throughout the Americas, Europe and Asia, serving 135
domestic and 132 international destinations. More than 650
additional points are served via alliance partners. With more than
42,000 employees, Continental has hubs serving New York, Houston,
Cleveland and Guam, and together with Continental Express, carries
approximately 67 million passengers per year. Continental
consistently earns awards and critical acclaim for both its
operation and its corporate culture. For more company information,
visit continental.com. Continental Airlines will conduct a regular
quarterly telephone briefing today to discuss these results and the
company's financial and operating outlook with the financial
community and news media at 9:30 a.m. CT/10:30 a.m. ET. To listen
to a live broadcast of this briefing, go to continental.com/About
Continental /Investor Relations. This press release contains
forward-looking statements that are not limited to historical
facts, but reflect the company's current beliefs, expectations or
intentions regarding future events. All forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from those in the forward-looking statements. For
examples of such risks and uncertainties, please see the risk
factors set forth in the company's 2007 Form 10-K and its other
securities filings, including any amendments thereto, which
identify important matters such as the consequences of the
company's high leverage, the significant volatility in the cost of
aircraft fuel, its transition to a new global alliance, delays in
scheduled aircraft deliveries, its high labor and pension costs,
service interruptions at one of its hub airports, disruptions to
the operations of its regional operators, disruptions in its
computer systems, and industry conditions, including the airline
pricing environment, industry capacity decisions, industry
consolidation, terrorist attacks, regulatory matters, excessive
taxation, the availability and cost of insurance, public health
threats, an economic downturn in the U.S. and global economies and
the seasonal nature of the airline business. The company undertakes
no obligation to publicly update or revise any forward-looking
statements to reflect events or circumstances that may arise after
the date of this press release, except as required by applicable
law. CONTINENTAL AIRLINES, INC. AND SUBSIDIARIES STATEMENTS OF
OPERATIONS (In millions, except per share data) (Unaudited) Three
Months % Year Ended % Ended December 31, Increase December 31,
Increase 2008 2007 (Decrease) 2008 2007 (Decrease) ---- ---- ------
---- ---- ------ Operating Revenue: Passenger (excluding fees and
taxes of $345, $363, $1,531 and $1,499) $3,103 $3,193 (2.8)%
$13,737 $12,995 5.7 % Cargo 114 125 (8.8)% 497 453 9.7 % Other, net
254 205 23.9 % 1,007 784 28.4 % --- --- ----- --- 3,471 3,523
(1.5)% 15,241 14,232 7.1 % ----- ----- ------ ------ Operating
Expenses: Aircraft fuel and related taxes 993 955 4.0 % 4,905 3,354
46.2 % Wages, salaries and related costs 760 723 5.1 % 2,957 3,127
(5.4)% Regional capacity purchase, net 425 474 (10.3)% 2,073 1,793
15.6 % Aircraft rentals 240 249 (3.6)% 976 994 (1.8)% Landing fees
and other rentals 210 198 6.1 % 853 790 8.0 % Distribution costs
159 173 (8.1)% 717 682 5.1 % Maintenance, materials and repairs 135
142 (4.9)% 612 621 (1.4)% Depreciation and amortization 111 107 3.7
% 438 413 6.1 % Passenger services 91 95 (4.2)% 406 389 4.4 %
Special charges (credits) (A) 40 (17) NM 181 13 NM Other 332 344
(3.5)% 1,437 1,369 5.0 % --- --- ----- ----- 3,496 3,443 1.5 %
15,555 13,545 14.8 % ----- ----- ------ ------ Operating Income
(Loss) (25) 80 NM (314) 687 NM ---- ---- ----- --- Nonoperating
Income (Expense): Interest expense (94) (94) - (365) (383) (4.7)%
Interest capitalized 8 9 (11.1)% 33 27 22.2 % Interest income 8 39
(79.5)% 65 160 (59.4)% Gain on sale of investments - 30 (100.0)% 78
37 NM Other, net (B) (161) 7 NM (181) 38 NM ----- --- ----- -----
(239) (9) NM (370) (121) NM ----- --- ----- ----- Income (Loss)
before Income Taxes (264) 71 NM (684) 566 NM Income Tax Benefit
(Expense) (C) (2) (103) (98.1)% 99 (107) NM --- ----- ---- -----
Net Income (Loss) $(266) $(32) NM $(585) $459 NM ====== =====
====== ==== Earnings (Loss) per Share: Basic $(2.33) $(0.33) NM
$(5.54) $4.73 NM ======= ======= ======= ===== Diluted $(2.33)
$(0.33) NM $(5.54) $4.18 NM ======= ======= ======= ===== Shares
used for Computation: Basic 114 98 16.3 % 106 97 9.3 % Diluted 114
98 16.3 % 106 114 (7.0)% (A) Operating Expenses: Special Charges
(Credits). Includes the following (in millions): Three Months Year
Ended Ended December 31, December 31, 2008 2007 2008 2007 ---- ----
---- ---- Pension plan settlement charges $44 $7 $52 $31 Aircraft
related charges net of (gains) losses on sales (5) (28) 40 (22)
Severance 1 - 34 - Route impairment and other - 4 55 4 --- -----
---- --- Special charges (credits) $40 $(17) $181 $13 === =====
==== === (B) Nonoperating Income (Expense): Other, net. Other
nonoperating income (loss) includes the following special items:
Loss on fuel contracts with Lehman Brothers. Lehman Brothers, the
counterparty to several of the company's fuel derivative contracts,
declared bankruptcy on Sept. 15, 2008. The derivative contracts
with Lehman Brothers largely consisted of crude oil collars
(comprised of option contracts with both call and put options) that
extended through March 2009. The company determined that its fuel
derivative contracts with Lehman Brothers were no longer considered
highly-effective hedges and recorded subsequent changes in the fair
value of the contracts since that determination date (of Sept. 15,
2008) as part of nonoperating income (expense). The total amount of
the loss recorded during the fourth quarter as a result of changes
to the fair value of the contracts was $125 million. In January of
2009, Continental terminated all the derivative contracts with
Lehman Brothers. Write-down in value of auction rate securities,
net. Continental recorded a loss of $60 million during 2008 ($31
million during the fourth quarter) to reflect an
other-than-temporary decline in the value of company-held student
loan related auction rate securities. Separately, during the fourth
quarter, one institution granted Continental a put right permitting
the company to sell its auction rate securities with a par value of
$125 million in 2010 at their full par value. The company recorded
a gain of $26 million during the fourth quarter for this put right.
The write-down, net of the gain on the put right, was $5 million
during the fourth quarter and $34 million for the full year 2008.
(C) Income Taxes. During the year ended December 31, 2008, the
company recorded a non-cash income tax credit of $28 million
resulting from higher utilization of net operating loss (NOL)
carryforwards than had previously been anticipated. In 2007, we
recorded a special non-cash tax charge of $104 million to increase
the valuation allowance to be fully reserved for certain NOLs,
expiring in 2008 through 2011. CONTINENTAL AIRLINES, INC. AND
SUBSIDIARIES STATISTICS Three Months Ended % Year Ended % December
31, Increase December 31, Increase 2008 2007 (Decrease) 2008 2007
(Decrease) ---- ---- ---------- ---- ---- ---------- Mainline
Operations: Passengers (thousands) 10,968 12,311 (10.9)% 48,682
50,960 (4.5)% Revenue passenger miles (millions) 18,548 20,271
(8.5)% 82,806 84,309 (1.8)% Available seat miles (millions) 23,402
25,447 (8.0)% 102,527 103,139 (0.6)% Cargo ton miles (millions) 236
280 (15.7)% 1,005 1,037 (3.1)% Passenger load factor: Mainline
79.3% 79.7% (0.4) pts. 80.8% 81.7% (0.9) pts. Domestic 82.6% 82.3%
0.3 pts. 83.3% 83.9% (0.6) pts. International 75.8% 76.7% (0.9)
pts. 78.2% 79.4% (1.2) pts. Passenger revenue per available seat
mile (cents) 10.99 10.38 5.9 % 11.10 10.47 6.0 % Total revenue per
available seat mile (cents) 12.51 11.64 7.5 % 12.51 11.65 7.4 %
Average yield per revenue passenger mile (cents) 13.87 13.03 6.4 %
13.75 12.80 7.4 % Average fare per revenue passenger $236.87
$216.62 9.3 % $232.26 $214.06 10.4 % Cost per available seat mile
(CASM) (cents) (A) 12.27 11.08 10.7 % 12.44 10.83 14.9 % Special
charges (credits) per available seat mile (cents) 0.17 (0.07) NM
0.15 0.01 NM CASM, holding fuel rate constant (cents) (A) 11.66
11.08 5.2 % 10.81 10.83 (0.2)% Average price per gallon of fuel,
including fuel taxes (cents) 292.54 250.89 16.6 % 327.45 217.53
50.5 % Fuel gallons consumed (millions) 339 381 (11.0)% 1,498 1,542
(2.9)% Actual aircraft in fleet at end of period (B) 350 365 (4.1)%
350 365 (4.1)% Average length of aircraft flight (miles) 1,489
1,444 3.1 % 1,494 1,450 3.0 % Average daily utilization of each
aircraft (hours) 10:14 11:20 (9.2)% 11:06 11:34 (4.0)% Regional
Operations: Passengers (thousands) 4,215 4,421 (4.7)% 18,010 17,970
0.2 % Revenue passenger miles (millions) 2,277 2,399 (5.1)% 9,880
9,856 0.2 % Available seat miles (millions) 3,046 3,104 (1.9)%
12,984 12,599 3.1 % Passenger load factor 74.7% 77.3% (2.6) pts.
76.1% 78.2% (2.1) pts. Passenger revenue per available seat mile
(cents) 17.44 17.79 (2.0)% 18.14 17.47 3.8 % Average yield per
revenue passenger mile (cents) 23.33 23.02 1.3 % 23.83 22.33 6.7 %
Actual aircraft in fleet at end of period (C) 282 263 7.2 % 282 263
7.2 % Consolidated Operations (Mainline and Regional): Passengers
(thousands) 15,183 16,732 (9.3)% 66,692 68,930 (3.2)% Revenue
passenger miles (millions) 20,825 22,670 (8.1)% 92,686 94,165
(1.6)% Available seat miles (millions) 26,448 28,551 (7.4)% 115,511
115,738 (0.2)% Passenger load factor 78.7% 79.4% (0.7) pts. 80.2%
81.4% (1.2) pts. Passenger revenue per available seat mile (cents)
11.73 11.19 4.8 % 11.89 11.23 5.9 % Average yield per revenue
passenger mile (cents) 14.90 14.09 5.7 % 14.82 13.80 7.4 % (A)
Includes impact of special charges (credits). (B) Excludes 12
737-300 and seven 737-500 grounded aircraft at December 31, 2008.
(C) Consists of flights operated under capacity purchase agreements
with Continental's regional carriers ExpressJet, Colgan, Chautauqua
and CommutAir. Excludes 30 EMB-135 temporarily grounded aircraft at
December 31, 2008. CONTINENTAL AIRLINES, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES Net Income (Loss) (in millions) Three
Months Year Ended Ended December 31, December 31, 2008 2007 2008
2007 ---- ---- ---- ---- Net income (loss) $(266) $(32) $(585) $459
Special items, net of income taxes: Special charges (credits) (net
of tax of $0, $0, $18 and $0) 40 (17) 163 13 Gain on sale of
investments (net of tax of $0, $0, $(29) and $0) - (30) (49) (37)
Other, net (net of tax of $0, $0, $11 and $0) 130 - 148 - Income
taxes - 104 (28) 104 ----- --- ---- --- Net income (loss),
excluding special items (A) $(96) $25 $(351) $539 ===== === ======
==== Earnings (Loss) per Share Three Months Ended Year Ended
December 31, December 31, 2008 2008 ------------ ------------
Diluted earnings (loss) per share $(2.33) $(5.54) Special items:
Special charges (credits) 0.35 1.53 Gain on sale of investments -
(0.46) Other, net 1.14 1.41 Income taxes - (0.26) ------- ------
Diluted earnings per share, excluding special items (A) $(0.84)
$(3.32) ======= ======= CASM Mainline Operations (cents) Three
Months Ended % Year Ended % December 31, Increase/ December 31,
Increase/ 2008 2007 (Decrease) 2008 2007 (Decrease) ---- ----
--------- ---- ---- ---------- Cost per available seat mile (CASM)
12.27 11.08 10.7 % 12.44 10.83 14.9 % Less: Special NM NM (charges)
credits (0.17) 0.07 (0.15) (0.01) ----- ---- ------ ------ CASM,
excluding special charges (credits) (A) 12.10 11.15 8.5 % 12.29
10.82 13.6 % Less: Current year fuel cost per available seat mile
(B) (4.24) - NM (4.79) - NM Add: Current year fuel cost at prior
year fuel price per available seat mile (B) 3.63 - NM 3.16 - NM
----- ----- ------ ----- CASM, holding fuel rate constant and
excluding special charges (credits) (A) 11.49 11.15 3.0 % 10.66
10.82 (1.5)% ===== ===== ===== ===== (A) These financial measures
provide management and investors the ability to measure and monitor
Continental's performance on a consistent basis. (B) Both the cost
and availability of fuel are subject to many economic and political
factors and are therefore beyond the company's control. DATASOURCE:
Continental Airlines CONTACT: Corporate Communications of
Continental Airlines, +1-713-324-5080, Web Site:
http://www.continental.com/
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