Reference Document 2008-09 This reference document includes the annual fi nancial report Key fi gures 2 1. Corporate governance 5 5. Financial report 107 The Board of Directors 6 Investments and fi nancing 108 The Group Executive Committee 23 Property, plant and equipment 110 Stock market and shareholder structure 24 Comments on the fi nancial statements 113 Performance ratios 117 Consolidated fi nancial statements 121 2. Activity 27 Notes to the consolidated fi nancial statements 128 Highlights of the 2008-09 fi nancial year 28 Statutory auditors’ report on the consolidated Market and environment 29 fi nancial statements 206 Strategy 32 Statutory fi nancial statements 208 Passenger activity 35 Notes 210 Cargo activity 42 Statutory auditors’ report on the fi nancial statements 220 Maintenance activity 46 Statutory auditors’ report on regulated Other activities 49 agreements and commitments 221 Fleet 51 Highlights of the beginning of the 2009-10 fi nancial year 59 6. Other information 223 History 224 General Information 226 Social and environmental data 61 3. Information relating to the share capital 227 Social data 62 Information on trading in the stock 232 Note on the methodology for the reporting of social performance indicators 68 Information on the agreements concluded in connection with the business Social indicators for the Group 70 combination between Air France and KLM 234 Environmental data 76 Information relating to the agreements concluded Note on the methodology for the reporting with Alitalia–Compagnia Aerea Italiana (Alitalia-CAI) 239 of environmental indicators 80 Legislative and regulatory environment Environmental indicators for the Group 82 for the air transport industry 241 One of the Statutory Auditors’ Report Glossary 244 on a selection of Environmental Information and control 248 and Social Indicators of the Air France KLM Group for the Year ended December 31, 2008 86 Tables of concordance 250 4. Risks and risk management 89 Risk factors 90 Market risks and their management 93 Report of the Chairman of the Board of Directors on internal control 98 Statutory Auditors’ report 106 2008-09 Reference Document ı Air France-KLM This Reference Document is an unoffi cial translation of the French Document de Référence, which was fi led with the French Autorité des Marchés Financiers on June 9, 2009, pursuant to Article 212-13 of the AMF General Regulations. This unoffi cial translation has been prepared by Air France-KLM for information purposes only and has not been reviewed or registered with the AMF. The French Document de Référence may be used for the purposes of a fi nancial transaction if supplemented with an offering memorandum approved by the AMF. In the event of any ambiguity or discrepancy between this unoffi cial translation and the French Document de Référence, the French version shall prevail. 2008-09 Reference Document ı Air France-KLM 1 Key fi gures Pursuant to Article 28 (EC) no.809/2004 of April 29, 2004, the review of the fi nancial situation and the results for the fi nancial year ended March 31, 2008 fi guring on pages 2 and 3 of the 2007-08 reference document is included by reference in this document. The change in accounting method for the application of the IFRIC 13 interpretation and the related impacts are presented in section 5 note 3.1 of the consolidated fi nancial statements. Revenues (In € billion) Income/(loss) from current operations (In € billion) * A fter restatement for the application of the IFRIC 13 interpretation: + €9 million * A fter restatement for the application of the IFRIC 13 interpretation: + €9 million Revenues were stable (-0.6%), after a negative currency impact of The loss from current operations refl ected the deterioration in the 1.9%. operating environment during the 2008-09 second half. The adjusted operating margin stood at 0.4% versus 6.7% at March 31, 2008 (S ee also section 5, page 117 ). Breakdown of 2008-09 revenues by activity Breakdown of 2008-09 operating income by activity (In € billion) (In € million) 2 2008-09 Reference Document ı Air France-KLM Net income/(loss), Group share (In € million) Investments and fi nancing (In € billion) * A fter restatement for the application of the IFRIC 13 interpretation. The net result for the 2008-09 fi nancial year was signifi cantly impacted by the change in the fair value of fuel hedging instruments linked to the sudden, sharp decline in the oil price. Excluding non-recurrent items and the change in the fair value of hedging instruments, the restated net loss would have been €578 million versus income of €790 million at March 31, 2008 (S ee also section 5, page 117 ). Operating cash fl ow was insuffi cient to fund the totality of tangible and intangible investments. Financial structure Return on capital employed ( S ee also section 5, page 118 ). * A fter restatement for the application of the IFRIC 13 interpretation. * A fter restatement for the application of the IFRIC 13 interpretation. The gearing ratio increased from 0.27 (0.25 before a €639 million negative impact on shareholders’ equity at March 31, 2008 for the application of the IFRIC 13 interpretation during the 2008-09 fi nancial year) to 0.78, under the combined effect of an increase in net debt and a €3.3 billion reduction in shareholders’ equity linked to the change in the fair value of hedging instruments . The ratio would amount to 0.62 versus 0.33 at March 31, 2008 excluding the valuation of hedging instruments. 2008-09 Reference Document ı Air France-KLM 3 4 2008-09 Reference Document ı Air France-KLM Corporate governance 1. The Board of Directors 6 The Group Executive Committee 23 Stock market and shareholder structure 24 2008-09 Reference Document ı Air France-KLM 5 Corporate governance 1. The Board of Directors The Board of Directors Composition of the Board of Directors Non-French companies at March 31, 2009 o Director of Unilever (United Kingdom) until July 2007; o Director of Alitalia (Italy) until January 2007. Other At March 31, 2009, the Board of Directors comprised 15 members: o Chairman of the IATA (International Air Transport Association) Board o 10 directors appointed by the Shareholders’ Meeting; of Governors (Canada) until June 2005. o 2 representatives of the employee shareholders appointed by the Shareholders’ Meeting; Born October 4, 1943, Mr Spinetta is a graduate of the Institut o 3 representatives of the French State appointed by ministerial des Sciences Politiques de Paris and of the École Nationale order. d’Administration. The functions exercised by the Board of Directors members within the specialized committees are detailed in the Board of Directors Pierre-Henri Gourgeon Committees section. Chief Executive Offi cer of Air France-KLM * First appointed as a Board director: January 20, 2005. Directors appointed by the Shareholders’ Meeting Expiration date of current term of offi ce: Shareholders’ Meeting called to approve the fi nancial statements for the year ending Jean-Cyril Spinetta March 31, 2011. Chairman of the Board of Directors of Air France-KLM * Number of shares held in the company’s stock: 45,797 shares. First appointed as a Board director: September 23, 1997. Other directorships and offi ces Expiration date of current term of offi ce: Shareholders’ Meeting called French companies o to approve the fi nancial statements for the year ending March 31, 2010. Chief Executive Offi cer of Air France and Permanent representative of Air France-KLM on the Board of Directors of Air France; Number of shares held in the company’s stock: 65,349 shares. o Member of the Supervisory Board of Steria *. Other directorships and offi ces Non-French company French companies o Vice-Chairman of the Board of Directors of Amadeus IT Group o Chairman of the Board of Directors of Air France; (Spain). o Chairman of the Supervisory Board of Areva * since April 30, 2009 ; Directorships and offi ces held in the last fi ve years and having o Director of Saint-Gobain *; expired o Director of Alcatel-Lucent *; o Director (representing the French State) of GDF-Suez * since French companies o June 2008. Deputy Chief Executive Officer of Air France-KLM until December 31, 2008; Non-French company o Deputy Chief Executive Officer of Air France until o Director of Alitalia CAI (Italy) since January 2009. December 31, 2008; Others o Director of Autoroutes du Sud de la France until March 2006; o Member of the IATA (International Air Transport Association) Board o Chairman of Amadeus GTD until September 2005. of Governors (Canada); Born April 28, 1946, Mr Gourgeon is a graduate of the École o Member of the Board of Paris Europlace. Polytechnique and the École Nationale Supérieure de l’Aéronautique. Directorships and offi ces held in the last fi ve years and having He is also a graduate of the California Institute of Technology. expired French companies and public institutions o Chairman and Chief Executive Officer of Air France-KLM until December 31, 2008; o Chairman and Chief Executive Officer of Air France until December 31, 2008; o Director (representing the French State) of La Poste between August 2008 and April 2009. * Listed company. 6 2008-09 Reference Document ı Air France-KLM Corporate governance The Board of Directors 1. Leo M. van Wijk Non-French companies o Chief Executive Offi cer and Director of Palazzo Grassi (Italy); Vice-Chairman of the Board of Directors o Chairman and Director of Christie’s International Plc (United First appointed as a Board director: June 24, 2004. Kingdom); o Expiration date of current term of offi ce: Shareholders’ Meeting Director of Tawa * (United Kingdom); o called to approve the fi nancial statements for the year ending Member of the Supervisory Board of Gucci (Netherlands).