ANNUAL SHAREHOLDER REVIEW 2013 the airline has benefited from outstanding leadership, When Tony Carter assumes the Chairmanship after this Significant embracing a culture of innovation and calculated risk taking. year’s Annual Shareholder Meeting on 27 September, shareholders and customers alike can be confident that There are numerous examples of ’s leading the progress will continue. Tony is an experienced and innovations, including creative safety videos, the acclaimed Skycouch and a revolutionary new airport experience using successful business leader with a great understanding of self check kiosks and bag drops for customers. competitive markets and the importance of customer focus. The airline today bears little resemblance to that of a It has been a privilege for me to lead this iconic company. progressJohn Palmer – CHAIRMAN decade ago. Fuel prices are at levels that would have been We’ve made great progress on many fronts and our people unimaginable in 2001, and yet Air New Zealand has remained can be proud of what they have achieved. Despite all the consistently profitable through a range of adverse economic industry pressures, we are again generating acceptable conditions and global events. It is one of very few airlines shareholder returns. The challenge for the new Board and globally to maintain an investment grade credit rating. management is to further improve on that momentum – I’m confident that they can. Having the Crown as a majority shareholder has given the airline the stable ownership dynamic required to successfully I wish Tony, the Board and the Air New Zealand family all the execute this turnaround story. The New Zealand government very best in the next stage of the journey. has received in excess of $500 million in dividends during this time, and the fact that the airline is being held up as a model for the mixed ownership programme is testament to how far we’ve come from the dark days of 2001.

John Palmer – CHAIRMAN

THE 2013 FINANCIAL YEAR WAS ONE OF SIGNIFICANT PROGRESS FOR AIR NEW ZEALAND.

Profit before taxation was $256 million, an increase of 172% on the previous year. Net profit after taxation was $182 million. This is our best result in five years, and it is pleasing to note that we have comfortably exceeded our initial guidance of more than doubling last year’s profit figure. Operating cash flow was a record $750 million, reflecting the strength and quality of the result. A number of factors have contributed to this, including the benefits of a modern, more fuel efficient fleet and an optimised global network with fewer underperforming routes. All parts of the network contributed positively, which hasn’t always been the case. Following a period of disappointing results, we are now making good progress towards our goal of delivering sustainably improved returns to shareholders. Having reviewed the current trading environment and the airline’s financial position, the Board has declared a fully imputed contents final dividend of 5.0 cents per share. 2 > Chairman’s report 4 > CEO’s report After nearly 12 years as your Chairman and this being my last 8 > Executive team annual report, it is timely to reflect on some of the events 12 > Financial commentary and changes that have driven the business over that time. 13 > Change in profitability 14 > Financial summary The collapse of Ansett Australia and the events of 9/11 Cover image © S.A.S 2013 provided a challenging environment in which to start Photo by Exm Company rebuilding Air New Zealand in late 2001. Since that time,

2 Air New Zealand Annual Shareholder Review 2013 LEFT TO RIGHT: Rob Jager, Paul Bingham, Dr Jim Fox, Tony Carter – DEPUTY CHAIRMAN, Jan Dawson and Roger France Air New Zealand Annual Shareholder Review 2013 3 Our Domestic network is in good shape. We have added Large investments have been made as Virgin Australia Firing on all further capacity during the past year and seen demand goes through this critical growth phase, and we are continue to increase. Our turboprop network throughout confident of its success going forward. New Zealand is one of the best in the world, and we are Clearly, we are not alone in that view, with both Singapore focused on keeping it that way. Our new ATR72-600 Airlines and Etihad Airways making significant investments, turboprop aircraft are steadily entering service, further forming a group of strong and supportive shareholders. boosting capacity on these routes. The biggest change has been the turnaround of our cylinders At the Paris airshow in June of this year we took delivery International long haul network, which is now profitable of our first new sharklet equipped Airbus A320. The Christopher Luxon – CHIEF EXECUTIVE OFFICER and positioned for growth. During the past year we have sharklet is essentially an extension of the aircraft’s main continued to see improvement in both demand and yields, wing, improving performance while reducing fuel burn. and we are acutely focused on making sure we have our The efficiency gains of this aircraft are tangible, as is the network optimised to market dynamics. improved customer experience of a wider, quieter cabin. The Pacific Rim offers us significant growth opportunities, IN THE COMING YEARS, THE AIRBUS and it is pleasing to report that we are seeing consistent traffic increases on our routes. While China in particular will A320 WILL FORM THE BACKBONE OF OUR see strong travel growth to New Zealand, we are actively DOMESTIC NETWORK, REPLACING THE exploring other opportunities in Asia and expect to be in OLDER GENERATION 737-300 AND a position to make growth related announcements during The fortunes of REDUCING OUR COST BASE AS THEY ARRIVE. the coming year. Air New Zealand CAPACITY UNIT and our nation (ASKs) YIELD COST up OPERATING up to LOAD improved REVENUE c FACTOR are inextricably 1.7% up 13.6 increased to 3.0% linked. 3.0% per RPK 83.6% We play a critical role in connecting families, friends, tourists and businesses to, from and within New Zealand. I am incredibly proud of the efforts of our 11,000 people in delivering a much improved result in the 2013 financial year. Our Tasman and Pacific Islands routes continue to go from strength to strength due in part to our Seats to Suit fare Air New Zealanders have a commitment to customer care, structure, which allows us to offer a range of competitive a resilience, spirit and attitude that are the envy of our fares and service levels within the same aircraft. competitors. They also have a wonderful maturity that was abundant as I transitioned into my first year as Chief Along with our alliance partner Virgin Australia we are Executive Officer and I would like to take this opportunity committed to maintaining a strong competitive position on to thank all Air New Zealanders for the way they have the Tasman and believe the alliance is delivering a superior embraced our Go Beyond strategy and the organisational offering for our customers with access to 35 domestic structure that supports it. Australian ports. I would also like to acknowledge the outstanding In July this year the Australian Competition and Consumer contribution of my Executive team, which is the best I have Commission issued its draft decision to reauthorise worked with in my career. Together we have a resolute our alliance. We will continue to develop and enhance focus on success and growth to build on the wonderful cooperation between our two airlines. work that has gone in over the past decade. We have increased our economic ownership interest One of my key priorities when I started on 1 January this in Virgin Australia to 22.99%. Our strategy behind this year was to rapidly build strong relationships with key investment is simple – it gives us an efficient, cost stakeholders who influence the fortunes of Air New Zealand. effective exposure to the growing domestic Australian These include our local tourism industry and trade market, as well as reinforcing our alliance relationship. partners, airports, alliance partners, government officials While Virgin Australia’s recent financial performance and the investment community. has been disappointing, it is making great progress Wherever I go there is incredible interest in Air New Zealand in rebranding as an airline which appeals to all market and our company is held in high regard. segments, including corporate customers. 4 Air New Zealand Annual Shareholder Review 2013 Air New Zealand Annual Shareholder Review 2013 5 We are continuing to modernise our wide body fleet. be worthwhile and we are looking forward to getting this The new -300ERs are performing very well, aircraft into service around the middle of 2014. offering significant efficiency improvements over the Our Cargo network continues to perform well, achieving retiring -400s. We have two more of these solid revenue growth in a challenging industry. During aircraft due to be delivered in the second half of the the year the team have been focused on building a 2014 calendar year. wider network with interline partners, providing greater During 2014 we will begin refurbishing our Boeing 777- connectivity for our exporters and importers. 200ER fleet. This is a significant investment for us, and Our Airpoints programme continued to grow during will see a total of eight aircraft upgraded over a 12 month the year, up 17% to more than 1.4 million members. period. Our inflight product will then be better aligned Our customer engagement also continues to improve, across both B777 variants that we operate, including with 20% more customers now earning Airpoints with entertainment systems, premium cabins and our award our retail partners, and further growth in activations of winning Skycouch. OneSmart cards. Our first Boeing 787-9 is currently being assembled in the We have been reviewing our customer loyalty programme United States and every indication is that the programme and engaging with customers to better understand what is is progressing to schedule. In the 787, the engineers working and what is not. In July this year, in direct response at Boeing have designed an incredibly innovative new Earlier this year we unveiled As you can see, the livery features the to concerns raised, the first set of changes to upgrades plane that will take operating economics and passenger a bold new aircraft livery for the iconic New Zealand fern mark – the use of and seat selection were made. comfort to new levels. While the wait has been long, it will Air New Zealand fleet. which is managed by Tourism New Zealand and New Zealand Trade and Enterprise. The livery is distinctive yet has a modern edge that we believe will inspire a sense The new look livery will be progressively of pride for New Zealanders. rolled out across the Air New Zealand fleet from later this year.

The improvements were met with universally positive over the coming years we will continue identifying ways feedback. You can expect to see more of the results from to materially increase our efficiency, effectiveness and this review flow through into changes in the coming months. ultimately our profitability. We are actively working to continually improve the We are focused on further improving on this result in consistency and quality of our customer experience. the 2014 financial year. Based on our forecast of market Air New Zealand already enjoys a strong reputation for demand and fuel prices at current levels, early results customer service, but we can further improve. Our goal is and forward bookings are encouraging. to have a globally aligned brand where we are delivering None of this is possible however, without great people. a consistent customer experience across the entire Air New Zealand is a people driven business, and in the customer journey. following pages you will hear from the members of my DURING 2014 WE WILL BEGIN Several of our lounges will be undergoing upgrades during Executive team who will describe what is important in REFURBISHING OUR the coming year, and a key highlight will be the opening of each of their respective areas. the new lounge in the Tom Bradley International Terminal BOEING 777-200ER FLEET. We are more committed than ever to being the best at in Los Angeles. THIS REPRESENTS A what we do. SIGNIFICANT INVESTMENT Once the terminal transition is complete, our premium customers will be able to relax in a brand new Star Alliance FOR AIR NEW ZEALAND. lounge, which Air New Zealand is proud to have been selected to both design and manage. This stunning new lounge is three times larger than our current lounge in Los Angeles, and will feature a unique open air terrace overlooking the runway. Christopher Luxon – CHIEF EXECUTIVE OFFICER Key elements of our $250 million profit improvement programme are now in place and set to deliver as planned. Our focus on improvement is relentless, and 6 Air New Zealand Annual Shareholder Review 2013 Air New Zealand Annual Shareholder Review 2013 7 < Rob McDonald Our Executive Chief FINANCIAL Officer

Air New Zealand is in great financial shape. We are well positioned with strong liquidity and low gearing as we head into a phase of higher capital team expenditure over coming years to modernise and grow our fleet. With this newer fleet comes superior operating economics, bringing our cost base down and delivering an outstanding customer experience. We have fully embraced mobile as an effective means of connecting with our customers in a convenient and spontaneous manner. Our popular mPass app is being updated to include domestic bookings, but this is just the beginning. Expect big things from us in the mobile space later this year.

Bruce Parton > Norm Thompson ONZM > Chief OPERATIONS Officer Deputy Chief Executive Officer & Chief Sales Officer This is a tough industry to succeed in. There are too many examples of airlines failing We are focused on improving our execution in because they did not focus enough on their cost base. existing markets, as well as identifying new growth If we are to remain competitive and grow as an opportunities to pursue. airline, we must be relentless in pursuing continuous The online channels have been delivering great improvement across all levels of our organisation. results, with significant growth in revenue during We continue to invest in technology, upgrading the past year. the core systems which power the day-to-day Our indirect distribution channels through our operations of the airline. You can see this in our self partners in the travel industry are as important check kiosks, which we are now rolling out in the as ever, and we are committed to further international environment, including at a number of developing these. overseas airports. The crucial inbound leisure market segment is Mobile technology means that we can communicate showing increasing signs of recovery, particularly more effectively with both our customers and in our key Pacific Rim markets. employees, enabling us to better manage disrupt situations. With our valued industry partners including Tourism New Zealand, we are working to maximise We are working to more closely align our product opportunities to further promote New Zealand as specifications with demand, giving customers more a destination. of the things they actually want to pay for.

8 Air New Zealand Annual Shareholder Review 2013 Air New Zealand Annual Shareholder Review 2013 9 < Stephen Jones < Captain David Morgan Chief StrateGy, Networks Chief Flight Operations & Alliances Officer & Safety Officer

Air New Zealand’s performance is built on good The safety of our customers and employees is strategy, getting the big decisions right and paramount and non-negotiable. executing the plan; which markets to serve, which Every day we deliver world class flight operations partners to work with and which aircraft to deploy. expertise that transports customers and cargo to 53 Our partnership with Virgin Australia on the Tasman destinations in New Zealand and around the world. has created a compelling customer proposition This expertise also allows us to seek out and in this critical market, and our growth into deliver new and innovative ways to reduce international markets is now clearly focused on the our carbon footprint and impact on the Pacific Rim. environment across the 200,000 flights We have moved decisively in suspending poor we operate annually. performing routes and redeploying capacity into Air New Zealand takes social responsibility growth markets. seriously, and as such we are actively pursuing Our alliance with Cathay Pacific on Hong Kong a new world-class sustainability framework and the increase to daily services on Shanghai which will launch this financial year. demonstrate our commitment to China.

Mike Tod > Lorraine Murphy > Chief Marketing Chief PEOPLE Officer & Customer Officer We are driving a high performance culture by The foundation has been laid to see Air New attracting, retaining and developing great people, Zealand become an even more customer centric and leveraging the power of one Air New Zealand airline that is a benchmark across industries. working together. We are consistently delivering a customer We want to be known for developing world class experience that is among the best in the world, leaders who make a strong and enduring imprint on and our people are critical in enabling us to our organisation and our nation. achieve this. With this in mind, one of our focus areas over We are listening to our customers more than ever the coming year will be enhancing our talent before, and turning off what they don’t want and management framework, of which a key element is dialling up what they value. workplace diversity. We have step changed our capabilities in areas We are developing our capability in all of the markets such as customer insights, giving us much improved we serve. Air New Zealanders collectively speak visibility on who our customers are and what more than 40 languages. they want. This, along with staff who understand the Our brand is known for innovation and creativity, numerous cultures of our customers and partners, and is one of very few New Zealand brands to be helps us make better decisions as an organisation acknowledged on the world stage. and better relate to those from all walks of life. But we are not satisfied with this. We have a restless ambition to see Air New Zealand recognised amongst the world’s best.

10 Air New Zealand Annual Shareholder Review 2013 Air New Zealand Annual Shareholder Review 2013 11 financial commentary change in profitability

Air New Zealand’s earnings before taxation for the 2013 financial year were $256 million, an increase of 172 percent on the previous year. Net profit after taxation was $182 million, up 156 percent. The result reflects sustained earnings The key changes in profitability, after isolating the impact of foreign momentum with revenue growth and continued improvements in cost efficiencies across the Group. Operating cash * flow of $750 million was a record for the Group. exchange movements, are set out in the table below :

dividend history is crude oil. The impact of the programme 2012 earnings before taxation $94m 10.0 (including the cost of options) was losses totalling $21 million for the year, compared to 8.0 Dividend losses of $24 million for the previous year. > Yield growth in International routes offset by reduced Domestic 8.0 7.0 Aircraft maintenance and overhaul costs yield to stimulate growth 6.5 Record Date: were $303 million for the period, flat against Passenger yield $34m 6.0 5.5 5.5 13/09/2013 the previous year, with reduced maintenance > Long haul yields improved by 4.3 percent (6.1 percent FX adjusted) share costs on the Air New Zealand fleet offset

per > Short haul yields deteriorated 2.3 percent (1.7 percent FX adjusted) 4.0 by increased costs relating to third party contracts. Foreign currency decreased the cents Dividend current period expense by $3 million compared > Passenger demand was up 2.7 percent, driven by strong demand in 2.0 Payment Date: to the prior period. Tasman Pacific (up 5.1 percent), and Domestic (up 4.2 percent) 23/09/2013 Aircraft operations costs were up $29 million > Capacity increased by 1.7 percent, with growth across the 0.0 or 7.4 percent to $419 million, offset slightly Passenger traffic $137m 2009 2010 2011 2012 2013 by a favourable foreign exchange impact of short haul network $3 million. The increase was driven mostly by revenue Cargo revenue for the year was $301 million, higher New Zealand airport landing charges of > The resulting passenger load factor for the Group improved 0.8 an improvement of $3 million or 1.0 percent. $26 million. percentage points to 83.6 percent Operating revenue increased by $135 million Excluding the impact of foreign exchange, to $4.6 billion, up 3.0 percent on the previous Passenger services expenses were down Cargo revenue was $8 million or 2.7 percent year. Excluding the negative impact of foreign $11 million to $222 million, due to inflight Cargo, contract services and other revenue $12m > Increase in cargo volumes and yield and focus on ancillary revenues higher than last year. This result was driven by exchange movement, operating revenue was passenger entertainment and meal savings a 2.0 percent increase in volume (revenue up 4.0 percent on the previous year. achieved through a series of product > Reduced headcount and productivity improvements offset by tonne kilometres) as well as yield growth of alignment and supply chain initiatives. Labour -$20m Passenger revenue increased by $131 million 0.7 percent. rate increases or 3.6 percent. This can be attributed to Fleet replacement programmes resulted in Contract Services revenue was $313 million increased depreciation and reduced lease increased capacity (available seat kilometres) > The average US$ into plane cost decreased 1.6 percent compared for the period down 0.9 percent, while Other costs as owned aircraft replaced operating of 1.7 percent, an improvement in load factors revenue increased by $4 million or 1.7 percent leased aircraft. The residual values of exiting Fuel price $11m to last year offset by derivatives hedging exposures in other of 0.8 percentage points to 83.6 percent, to $239 million with a continued focus on fleets were reassessed, resulting in an increase financial periods and stronger yields. The New Zealand dollar ancillary revenue opportunities. in depreciation. remained strong against major trading Net finance costs were down $10 million on > Higher consumption due to an increase in capacity of 1.7 percent currencies during the period, which reduced expenses Fuel volume -$11m New Zealand dollar passenger revenue by the previous period, benefiting from partially offset by the introduction of new fuel efficient aircraft $40 million. Operating expenditure decreased $48 million increased cash holdings and more favourable or 1.3 percent. Excluding foreign exchange interest rates. International long haul yields were up 4.3 > Increase in third party activity offset by reduced maintenance costs related movements and net gains on Maintenance -$3m percent on a 1.0 percent reduction in on the Air New Zealand fleet and completion of end of lease activity non-hedge accounted and ineffective foreign exchange impact capacity as the network was further derivatives, operating expenditure increased optimised with exits from the The impact of a stronger New Zealand dollar 1.2 percent on the previous year, on a 1.7 > Landing charge price increases across New Zealand airports and underperforming Hong Kong-London and against Air New Zealand’s major trading Aircraft operations -$32m increase in capacity and a 2.7 percent activity driven cost increases Auckland-Beijing services. Demand was up currencies resulted in a negative foreign increase in demand. 0.9 percent, and load factor increased exchange movement of $18 million on the 1.6 percentage points to 84.0 percent. Unit costs reduced by 3.0 percent with revenue and cost base, offset by a positive Passenger services $9m > Cost savings from product alignment improved operating efficiencies combined movement from the hedging programme. Capacity increased 6.0 percent on Tasman with reduced hedging losses. and Pacific Islands routes, driven by the Foreign exchange gains of $7 million in the Sales and marketing -$8m > Revenue driven commission increases introduction of B777-200 aircraft on the Labour costs were $1,069 million for the current year compared to losses of $68 year, an increase of $19 million or 1.8 percent. in the prior year resulted in a $75 million > Continued focus on discretionary spend offset by losses on Virgin Auckland-Perth and Auckland-Honolulu Other expenses -$1m services, as well as the new seasonal Rate increases were offset by productivity improvement. Overall, currency movements derivative and New Zealand Commerce Commission settlement Auckland-Bali service. Demand was up 5.1 improvements as well as headcount had a $57 million favourable impact on the reductions. Group’s result. percent, with load factor decreasing 0.7 of > Depreciation costs increased reflecting new aircraft (including the a percentage point to 83.5 percent. Yield on Fuel costs were down $15 million due to full period impact of investment in B777-300ER aircraft in the prior Tasman and Pacific Islands routes improved reduced prices and improved fleet efficiencies, cash & financial position Depreciation, lease and funding costs -$23m year) and the reassessment of residual values on exiting fleets 1.9 percent during the period. partially offset by increased flying with Net cash at year end was $1.15 billion, offset by lease savings Capacity on Domestic routes increased 2.8 capacity (available seat kilometres) increasing $123 million higher than the previous year. percent, due to the introduction of new A320 by 1.7 percent. The average US dollar into The key driver was operating cash flow of plane cost excluding hedge timing was 1.6 $750 million, an increase of $278 million, offset > The net impact of currency movements on revenue and costs, aircraft replacing the smaller B737-300, and Net impact of foreign exchange movements $57m additional ATR72-600 aircraft into service. percent lower than the previous year. Fuel also by the acquisition of fixed assets and debt including reduced foreign exchange hedging losses Load factor improved 1.1 percentage points to benefited from a stronger New Zealand dollar repayments during the period. during the period. 82.6 percent. Yield reduced 5.3 percent, a result Net gearing, including capitalised operating 2013 earnings before taxation $256m of pricing reductions to stimulate demand, Air New Zealand undertakes a fuel hedging leases, improved 7.0 percentage points to which increased 4.2 percent during the period. programme, of which a significant component 39.1 percent. *The numbers referred to in the Financial Commentary on the previous page have not isolated the impact of foreign exchange.

12 Air New Zealand Annual Shareholder Review 2013 Air New Zealand Annual Shareholder Review 2013 13 financial summary financial summary FINANCIAL PERFORMANCE Financial position

30 JUNE 2013 30 JUNE 2012 12 months to 12 MONTHS TO AS AT 30 JUNE 2013 30 JUNE 2012 $M $M $m $M Bank and short term deposits 1,150 1,029 Operating Revenue Trade and other receivables 350 374 Passenger revenue 3,765 3,634 Inventories 155 170 Cargo 301 298 Derivative financial assets 98 40 Contract services and other revenue 552 551 Income taxation - 20 4,618 4,483 Other assets 105 67 Operating Expenditure Total Current Assets 1,858 1,700 Labour (1,069) (1,050) Fuel (1,204) (1,219) Trade and other receivables 49 48 Maintenance (303) (303) Property, plant and equipment 2,935 3,092 Aircraft operations (419) (390) Intangible assets 69 63 Passenger services (222) (233) Investment in quoted equity instruments 261 203 Sales and marketing (274) (270) Investments in other entities 46 60 Foreign exchange gains/(losses) 7 (68) Other assets 394 293 Other expenses (236) (235) Total Non-Current Assets 3,754 3,759 (3,720) (3,768) Total Assets 5,612 5,459 Earnings Before Finance Costs, Depreciation, Amortisation, Rental Expenses and Taxation 898 715 Depreciation and amortisation (411) (348) Bank overdraft and short term borrowings - 2 Rental and lease expenses (177) (209) Trade and other payables 382 373 Earnings Before Finance Costs and Taxation 310 158 Revenue in advance 918 902 Net finance costs (54) (64) Interest-bearing liabilities 159 155 Profit Before Taxation 256 94 Derivative financial liabilities 13 14 Taxation expense (74) (23) Provisions 15 61 Net Profit Attributable to Shareholders of Parent Company 182 71 Income taxation 27 - Other liabilities 196 176 Interim and final dividend declared per share (cents) 8.0 5.5 Total Current Liabilities 1,710 1,683 Net tangible assets per share (cents) 158 148 Revenue in advance 140 135 Interest-bearing liabilities 1,470 1,537 Supplementary information Provisions 145 94 Earnings before Taxation (per NZ IFRS above) 256 94 Other liabilities 21 25 Reverse net (gains)/losses on derivatives that hedge exposures in other financial periods: Fuel derivatives (2) (11) Deferred taxation 310 297 Foreign exchange derivatives 2 8 Total Non-Current Liabilities 2,086 2,088 Normalised Earnings before Taxation 256 91 Total Liabilities 3,796 3,771 Normalised Earnings after Taxation 182 69 Net Assets 1,816 1,688

Normalised Earnings represents Earnings stated in compliance with NZ IFRS (Statutory Earnings) after excluding net gains and losses on derivatives that Issued capital 2,277 2,282 hedge exposures in other financial periods. Normalised Earnings is a non-IFRS financial performance measure that matches derivative gains or losses with Reserves (462) (596) the underlying hedged transaction, and represents the underlying performance of the business for the relevant period. Statutory Earnings is similar to Non-controlling interests 1 2 Normalised Earnings in both the 2013 and 2012 financial years and accordingly has been used in the current year Financial Commentary. Total Equity 1,816 1,688

The summary financial information has been derived from, and should be read in conjunction with, the Air New Zealand Group Annual Financial Statements (the ‘Annual Financial Statements’). The Annual Financial Statements, dated 29 August 2013, are available at: www.airnzinvestor.com. The summary financial Cash flows information cannot be expected to provide as complete an understanding as provided by the Annual Financial Statements. The accounting policies used in these financial statements are attached in the notes to the Annual Financial Statements. 12 months to 12 MONTHS TO 30 JUNE 2013 30 JUNE 2012 $m $M

Cash inflows from operating activities 4,692 4,544 Electronic Shareholder Full Annual Financial Report Share Registrar Cash outflows from operating activities (3,953) (4,089) Communication The full Annual Financial Report is available by LINK MARKET SERVICES LIMITED visiting our website www.airnzinvestor.com or you 739 455 We encourage investors to elect to receive investor Level 7, Zurich House, 21 Queen Street, may elect to have a copy sent to you by contacting Rollover of foreign exchange contracts relating to operating activities 11 17 communications electronically. This is more Auckland 1010, New Zealand Investor Relations. efficient and aligns with our strategic objective PO Box 91976, Auckland, 1142, New Zealand Net cash flow from operating activities 750 472 of becoming one of the most environmentally Email: [email protected] Net cash flow from investing activities (480) (654) sustainable airlines in the world. Simply visit the Investor Relations Office Website: www.linkmarketservices.com Net cash flow from financing activities (147) 349 Link Market Services website Private Bag 92007, Auckland 1142, New Zealand www.linkmarketservices.com or contact them New Zealand Phone: (64 9) 375 5998 Increase in cash and cash equivalents 123 167 Phone: 0800 22 22 18 (New Zealand) directly (details at right). Fax: (64 9) 375 5990 Cash and cash equivalents at the beginning of the year 1,027 860 (64 9) 336 2287 (Overseas) Australia Phone: (61) 1300 554 474 Cash and Cash Equivalents at the End of the Year 1,150 1,027 Fax: (64 9) 336 2664 Email: [email protected] Website: www.airnzinvestor.com

14 Air New Zealand Annual Shareholder Review 2013 Air New Zealand Annual Shareholder Review 2013 15 DISCOVER

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