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Whether you have been following Atlantic Coast since the very beginning, or just over the past year, you have undoubtedly recognized that this is a company made up of people who simply refuse to stand still. We are a team that is constantly in motion, always searching for new and better ways to grow. During 2000, that growth was demonstrated in many ways. Most notably, shareholder value increased substantially-72% above our 1999 close. We also inaugurated revenue service with our new Delta Connection carrier, and added a new regional jet type to our fleet, more than doubling the total number of jets to 52, with twice that number still to be delivered. But while all this growth created many headlines over the past year, we think 2000 should be remembered for something even more important. In our opinion, this past year marked the beginning of a new chapter of maturity and development for our company and our people that will carry us well into the future, because this was the first year in which the growth of our organizational and strategic skills was more significant in many respects than the growth of our fleet. Previously, we were often viewed as a company awash in the unlimited possibilities of future success-only to have that potential regularly dampened by factors that were for the most part outside our control. But now, we believe we have produced a blueprint for financial stability and growth that capitalizes on our strengths, while mitigating many of the risks and pitfalls that impeded our progress in the past. The codeshare agreements we have with both of our major airline partners-United and Delta-now work along the same lines; they choose the destinations, schedules and fares, we focus only on operating the flights. As long as we complete those flights, we receive a fee for our services, covering our costs plus a reasonable margin. We earn our profits by doing what we think we can do best-operating our daily schedule, serving our passengers and keeping our planes busy and productive all day, every day. What this means is that for the first time in our 11-year history, the "predictably unpredictable" roller-coaster cycles of the airline industry-influenced by competitive changes, fare wars, fuel price hikes and seasonal travel patterns-will no longer have a direct impact on our bottom line. The successes we expect to attain in the coming years are now ours to achieve, but only if we continue to work hard to satisfy the needs of our three primary constituencies. And so, we have enacted a new program, embraced at every level of the company, based on achieving new heights in these three areas:· Customer satisfaction· Employee satisfaction· Shareholder satisfactionAnd although we can probably all agree that these goals look good on paper, you will be pleased to note that even today, we are already well along the way to achieving them, based on three continued initiatives that will drive our progress during 2001:Continued expansion of our regional jet program. By further developing the partnerships with our two aircraft vendors, Bombardier and Fairchild, we have now completed firm orders that will take our fleet of regional jets to 158 by the end of 2003, which will increase our system capacity by nearly 150% over 2000 levels. Furthermore, these jet orders, combined with the previously-announced retirement of our J-32 turboprop aircraft, bring us another step closer to our ultimate goal of becoming an all-jet operation. Our relationships with United and Delta are structured so that each new jet is put into revenue service as soon as possible. Both partners are as excited about the future of RJs as we are, and every month a new group of customers will get to experience the enhanced service of regional jet travel. Caring for our own people the way we want them to care for our customers. As of 2001, the energy, creativity and care we put into attracting new people, helping them become part of our corporate culture and developing their skills has never been greater. In fact, with the development of our new Employee Services division, we are working toward a goal of responding to the individual needs of each of our 3,200+ employees, one person at a time. When we do, we believe two things will happen; we will succeed in reaching our goal of growing to over 4,000 employees by year-end, and, our passengers will benefit from the higher service levels delivered by a competent, confident frontline team whose members each clearly understand their individual role in the overall success of the company. Company-wide support for our daily operation and the team that makes it go. Under the new agreement with United, as well as the existing contract with Delta, the productivity of our operation is the primary measure of our performance. Therefore, we have refocused our internal measurement and reward systems from an emphasis on load factors and average fares (these, again, are now controlled by our partners) to the issues of running an excellent airline operation-completing flights, keeping the schedule on time and creating the best possible experience for our customers. One of our overriding goals is to ensure that every member of our team-in every facet of the company-is unified in the understanding that a successful operation translates directly to the financial success of Atlantic Coast and all parties associated with our company. And, by focusing a great degree of management time and resources to supporting and encouraging those on the front lines of our operation, we are already beginning to see dramatic results. In the end, all this is being done so that you, our shareholders, will reap the ultimate benefit. We remain appreciative of the support you have shown throughout the history of the company, and believe the returns you have seen over the past year are another indication that we are on the right track for a very bright future ahead. When you consider the security of our partnerships, the continued growth of our regional jet fleet, the immediate benefits resulting from our new fee-per-departure model and our increasingly sharp focus on the need to support the individual members of our operational team, we think you will agree that there is every reason to believe this upcoming year will be our best ever.