TAV AIRPORTS HOLDING TAV AIRPORTS ANNUAL REPORT Istanbul Atatürk Airport International Terminal (Gate A - Next to VIP) 34149 Yeşilköy, Istanbul Phone: +90 212 463 30 00 Fax: +90 212 465 50 50 www.tavairports.com ANNUAL REPORT 2012 http://ir.tav.aero Transporting the past into the future… 2012 Table of Contents TAV AT A GLANCE 2 Who Are We? 16 What Do We Do? 18 How Did 2012 Unfold? 24 Where Do We Operate? 26 Developments in 2012 32 Highlights of the Year 36 Awards 37 Developments After 2012 38 Outlook for 2013 ASSESSMENTS 42 Board of Directors’ Message 44 CEO’s Message 48 Expectations for 2013 OPERATIONS 49 Airport Operations 98 Service Companies 118 Investor Relations and Stock Performance 120 Sustainability CORPORATE GOVERNANCE 130 Risk Management 133 Internal Audit 134 Corporate Governance Principles Compliance Report 144 Ordinary and Extraordinary General Assembly Meetings 146 Board of Directors and Senior Management 158 Operating Principles of the Committees 161 Dividend Policy 163 Subsidiary Report REPORTS AND FINANCIAL STATEMENTS 166 Statutory Auditors’ Report 167 Statement of Responsibility 168 Statement of Independence 171 Consolidated Financial Statements and Independent Audit Report 282 Glossary Başak Helen Taşkan Deniz Ülker Dilara Çamır Duygu Aykut Havaş TAV İzmir Havaş TAV Airports Enis Vardar Figen Bulut Filiz Tuzgu Fulya Altunsoy TAV IT ATÜ TAV Airports ATÜ Ankara Gökçe Atasoy Gonca Aksoy Hilal Doğru Özgün Çelebi TAV Operation Services TAV Istanbul TAV Istanbul TAV Istanbul Özlem Çapkın Recep Çağdaş Rıfat Çelik Seçil Tekin TAV Izmir TGS Ground Services TAV Security BTA Catering Serkan Yüce Sinem Toker Tayfun Bahsi Tuna Hanağasıoğlu TGS Ground Services TAV Airports TAV Airports TAV Airports Transporting the past into the future TAV conducts its operations with the understanding that a better future can only be built on strong and lasting values. With this awareness, we are not only leaving exceptional airports for the future, but we are also transporting the values of yesterday onto today and tomorrow. As TAV Volunteers, we continue to undertake important corporate social responsibility projects. In order to pass our cultural heritage on to future generations, joining forces with the Cultural Awareness Foundation by sponsoring the “Ants of Cultural Heritage Project.” As TAV Volunteers we take great pleasure in introducing our children and young people to the past with this unique initiative. We believe that with the historical perspective these young people gain, they will move Turkey towards a bright future. Cultural Ants Educational Model The Cultural Ants Educational Model of the Cultural Awareness Foundation is based on the method of “student-centered learning by traveling, observing, feeling and perceiving” of elementary school students in small groups. This training program lasts either one or two years, depending on the specific objectives. Under this model, cultural assets are promoted via site visits and activities are reinforced via music, painting, ceramics, drama and other sensory tasks. The heritage left behind by Anatolia for the future Anatolia has been the cradle of civilizations throughout history due to its location on the migration and trade routes, its fertile land, and its inhabitable climate for human settlement. Cultural exchanges accelerated the development of humanity and the monuments marking this development were left behind for the future in many sites across Anatolia. The World Heritage Sites in Turkey The historical sites spanning all corners of our homeland are not just under the protection of Turkey, but they are also being safeguarded by UNESCO. The World Heritage List is a list of natural and cultural assets considered to have value for the entire world that are designated by the World Heritage Committee of UNESCO and the protection of which are guaranteed by the governments of the countries they are located in. Turkey is represented on the UNESCO World Heritage List with 11 sites: Cappadocia and Göreme National Park (1985) Great Mosque and Hospital of Divriği (1985) Historic Areas of Istanbul (1985) Hattusha: the Hittite Capital (1986) Nemrut Dağ (1987) Pamukkale and Hierapolis National Park (1988) Xanthos-Letoon (1988) City of Safranbolu (1994) Ancient City of Troy (1998) Edirne Selimiye Mosque and its Social Complex (2011) Neolithic Site of Çatalhöyük (2012) Our map presents examples from Turkey’s historical assets, some of which also belong to the UNESCO World Heritage. TAV Volunteers Embracing social development as central to its activities since the Company’s inception, TAV Airports has undertaken a large number of social responsibility initiatives to date. One of Turkey’s largest employers, TAV Airports unveiled the TAV Volunteers project in 2012 in order to use the skills and competencies of its human capital to benefit society as a whole. With this initiative, TAV employees of the Holding and its subsidiaries come together as volunteers with the understanding that helping others and contributing to society, the arts and the environment is in fact the best thing that can be done for our society. Established to implement many endeavors in the future focused on sustainable development and progress, TAV Volunteers aim to carry out projects geared toward social development and support as well as improving the general quality of life in TAV Airports countries, not only in Turkey but also in Macedonia, Georgia, Tunisia, Latvia and Saudi Arabia. 1 Ownership Structure Aéroports de Paris closed its acquisition of a 38% equity stake in TAV Airports on May 16, 2012. Prior to the Aéroports de Paris acquisition Number of Shares Ownership Share (%) Tepe İnşaat Sanayi A.Ş. 94,664,477 26.1 Akfen Holding A.Ş. 94,886,071 26.1 Sera Yapı Endüstrisi ve Ticaret A.Ş. 14,645,132 4.0 Non-floating (Other) 12,775,048 3.5 Free-float (Other) 146,310,552 40.3 TOTAL 363,281,250 100.0 After the Aéroports de Paris acquisition Number of Shares Ownership Share (%) Aéroports de Paris* 138,046,875 38.0 Tepe İnşaat Sanayi A.Ş. 29,273,852 8.1 Akfen Holding A.Ş. 29,495,446 8.1 Sera Yapı Endüstrisi ve Ticaret A.Ş. 7,379,507 2.0 Non-floating (Other) 12,775,048 3.5 Free-float (Other) 146,310,522 40.3 TOTAL 363,281,250 100.0 * Though Tank ÖWA alpha GmbH, a wholly owned subsidiary of Aéroports de Paris 2 TAV ANNUAL REPORT 2012 TAV AT A GLANCE Who Are We? 38% 40% 8% Aéroports de Free-float Akfen Paris (Other) Holding A.Ş. 8% 2% 4% Tepe İnşaat Sera Yapı Endüstrisi ve Non-floating Sanayi A.Ş. Ticaret A.Ş. (Other) SHAREHOLDERS 38% Aéroports de Paris: One of Europe’s leading airport operators with operations around the world 8% Tepe İnşaat: A leading company in the construction industry operating since 1969 8% Akfen Holding: Active in maritime investments (e.g. port operation) and in the energy, real estate, and construction industries with a special focus on infrastructure investments 2% Sera Yapı: Focused on infrastructure and superstructure construction 4% Non-floating (Other) 40% Free-float (Other) 3 Organizational Structure Airport Operations 100% 100% 100% Atatürk Airport Esenboğa Airport Adnan Menderes Airport 100% 33% 67% Gazipaşa Airport Medinah Airport Monastir and Enfidha Hammamet Airports 76% 100% 100% Batumi and Tbilisi Airports Skopje and Ohrid Airports Riga Airport* * Commercial areas only 4 TAV ANNUAL REPORT 2012 TAV AT A GLANCE Who Are We? Service Companies 50% 67% 100% ATÜ BTA Havaş 50% 67% 100% TGS Havaş Europe TAV Operation Services Serving 575,000 flights and 72 million passengers in 2012, TAV Airports bolstered its presence further in Europe and the Middle East after assuming the operation of Izmir Domestic Terminal in Turkey and the Medinah Airport in Saudi Arabia. The Company enhanced its brand awareness, reputation and value on a global scale through these investments. 99% 100% TAV IT TAV Security 5 TAV VOLUNTEERS TOOK CHILDREN BACK 1,400 YEARS! The Hagia Sophia Museum, one of the most majestic monuments in world architectural history still standing, will always serve as a shining example for us as well as for future generations with its magnificent construction, awe-inspiring size, timeless functionality and overall splendor. 2 1 16 Fulya AltunsoyTAV ANNUAL – ATÜ Ankara,REPORT 2 2012Deniz Ülker – TAV Izmir, 3 Filiz Tuzgu – TAV Airports, 4 Dilara Çamır – Havaş TAV AT A GLANCE Who Are We? 4 3 7 Milestones 1997 2004 2006 • TAV was founded and awarded the • BTA began operating the Istanbul • Operation and construction services tender for Istanbul Atatürk Airport. International Airport Hotel. were restructured under TAV • Tepe - Akfen assumed construction Havalimanları (TAV Airports) and 1999 and operation of the Esenboğa TAV Yatırım Holding (TAV Investment • ATÜ, established as a TAV Airports Airport Domestic and International Holding) as two separate holding venture to provide duty free shopping Terminal. companies. services, was incorporated into the • TAV İşletme Hizmetleri A.Ş. (TAV • Izmir Adnan Menderes Airport TAV corporate structure; BTA, a food Operation Services) was founded. International Terminal went into and beverage services provider, was service. established. 2005 • Ankara Esenboğa Airport Domestic • TAV Airports was awarded the and International Terminal 2000 tender to operate the Atatürk Airport commenced operation. • TAV began operating the Istanbul International and Domestic Terminal • TAV Özel Güvenlik Hizmetleri A.Ş. Atatürk Airport International Buildings, Parking Garage and (TAV Security) was founded and the Terminal. General Aviation Terminal for 15.5 private security services developed years. during the operation of the airports 2001 • A 60% stake in Havaş was acquired. were consolidated under this • The “primeclass” CIP Service was • Construction and operation of the company. launched. Izmir Adnan Menderes International Terminal was assumed by TAV. 2007 • TAV Bilişim Hizmetleri A.Ş. (TAV IT) • TAV Airports shares were floated. was founded and the information • Tbilisi Airport’s new passenger technology services developed during terminal commenced service.