Contents 1 Shaping the future together 2 Letter to the shareholders 5 How we are using SCORE to shape the future together 16 To our shareholders 16 Annual review 18 Lufthansa share 22 Report of the Supervisory Board 24 Corporate Governance 27 Combined management report 129 Consolidated fi nancial statements 214 Further information Lufthansa Group Annual Report 2012 214 Ten-year overview 218 Glossary Destination Time 220 Credits/contact Financial calendar 2013/2014 and Disclaimer SHAPING THE FUTURE TOGETHER ANNUAL REPORT 2012 www.lufthansa.com www.lufthansagroup.com/investor-relations www.lufthansagroup.com/responsibility Lufthansa Group overview 2012 fi gures Key fi gures Lufthansa Group Key fi gures business segments Financial calendar 2013/2014 2012 2011 Change Passenger Airline Group 2012 Change Passenger Airline Group The airlines in the in % in % Passenger Airline Group again increased the 30.1 number of passengers compared with the pre- Revenue and result Revenue €m 23,559 5.7 Revenue 2013 2014 of which external revenue €m 22,855 6.1 Total revenue €m 30,135 28,734 4.9 vious year’s record fi gure. Revenue increased, Operating result €m 258 – 26.1 in EUR bn while the operating profi t fell. High fuel costs of which traffi c revenue €m 24,793 23,779 4.3 Adjusted operating margin % 1.6 – 0.5 pts 14 March Press Conference and Analysts’ 13 March Press Conference and Analysts’ Operating result €m 524 820 – 36.1 Segment result €m 262 – 26.2 and unfavou rable exchange rates depressed Conference on 2012 results Conference on 2013 results EBIT €m 1,357 734 84.9 EBITDA* €m 1,851 11.0 the result. The transfer of fl ight operations from CVA €m – 340 – 178.7 EBITDA €m 3,270 2,546 28.4 Austrian Airlines to Tyrolean Airways had a Segment capital expenditure €m 1,868 – 10.4 2 May Release of Interim Report 29 April Annual General Meeting in Hamburg Net profi t/loss €m 990 – 13 Employees as of 31.12. number 55,236 – 0.2 positive effect on earnings. January – March 2013 Key balance sheet and cash fl ow statement fi gures 6 May Release of Interim Report Total assets €m 28,419 28,081 1.2 Logistics 2012 Change Logistics Lufthansa Cargo was able to close 7 May Annual General Meeting in Cologne January – March 2014 Equity ratio % 29.2 28.6 0.6 pts in % its fi nancial year with a profi t, despite weaker 524 Net indebtedness €m 1,953 2,328 – 16.1 Revenue €m 2,688 – 8.7 demand and lower revenue. Consistent capac- Operating result 2 Aug. Release of Interim Report 31 July Release of Interim Report Cash fl ow from operating activities €m 2,842 2,356 20.6 of which external revenue €m 2,662 – 8.7 ity management was the key to the company’s January – June 2013 January – June 2014 Operating result €m 104 – 58.2 in EUR m Capital expenditure (gross) €m 2,359 2,566 – 8.1 Adjusted operating margin % 4.2 – 4.9 pts success. Confi rmation of the night-fl ight ban at Segment result €m 127 – 47.7 Frankfurt Airport hit Lufthansa Cargo’s business 31 Oct. Release of Interim Report 30 Oct. Release of Interim Report Key profi tability and value creation fi gures EBITDA* €m 196 – 40.2 hard. The operating profi t was therefore down January – September 2013 January – September 2014 Adjusted operating margin1) % 2.3 3.4 – 1.1 pts CVA €m 65 – 67.8 on the previous year. EBITDA margin % 10.9 8.9 2.0 pts Segment capital expenditure €m 198 160.5 Employees as of 31.12. number 4,606 – 0.4 CVA €m 375 99 278.8 CFROI % 9.2 8.0 1.2 pts MRO 2012 Change MRO Although revenue was fl at, Lufthansa Lufthansa share in % Technik notably improved its operating result 1,397 Share price at year-end € 14.24 9.19 55.0 Revenue €m 4,013 – 2.0 compared with the previous year. A large num- Free cash fl ow Earnings per share € 2.16 – 0.03 of which external revenue €m 2,429 5.4 ber of new contracts with external customers Suggested dividend per share € – 0.25 – 100.0 Operating result €m 318 23.7 in EUR m Adjusted operating margin % 8.6 1.7 pts were signed over the course of the year. Its Traffi c fi gures Segment result €m 367 19.9 comprehensive, innovative product portfolio EBITDA* €m 491 30.2 Passengers thousands 103,051 100,605 2.4 and expansion into key growth markets form CVA €m 241 58.6 Freight and mail thousand tonnes 1,972 2,120 – 7.0 Segment capital expenditure €m 129 – 7.2 the basis for the comp any’s leading position Passenger load factor % 78.8 77.6 1.2 pts Employees as of 31.12. number 20,282 1.5 among independent MRO providers. Cargo load factor % 66.9 66.8 0.1 pts Flights number 1,033,588 1,050,728 – 1.6 Catering 2012 Change Catering LSG Sky Chefs again increased in % Employees 2) revenue and operating profi t despite diffi cult 375 Average number of employees number 117,443 115,335 1.8 Revenue €m 2,503 8.9 market con ditions, and remains the global Cash value added Employees as of 31.12. number 116,957 116,365 0.5 of which external revenue €m 1,933 11.2 market leader for airline catering. The company Operating result €m 97 14.1 in EUR m 1) Performance indicator to enable comparison with other airlines: (operating result + write-backs of provisions) / revenue. Adjusted operating margin % 3.9 0.2 pts consolidated its position in particular through 2) Excluding bmi. Segment result €m 127 30.9 expansion into adjacent markets, by adding Date of publication: 14 March 2013. EBITDA* €m 214 45.6 products and services and by developing CVA €m 39 Segment capital expenditure €m 46 – 37.8 new, high-potential markets around the world. Employees as of 31.12. number 30,088 1.7 Tight cost management remains paramount. Disclaimer in respect of forward-looking statements Revenue in €m Operating result in €m IT Services 2012 Change IT Services Lufthansa Systems again Information published in the Annual Report 2012, with regard to the future development of the Lufthansa Group and its subsidiaries consists in % improved its revenue and operating result. 57.7 purely of forecasts and assessments and not of defi nitive historical facts. Its purpose is exclusively informational identifi ed by the use of such 24,842 22,283 26,459 28,734 30,135 1,280 130 1,020 820 524 cautionary terms as “believe”, “expect”, “forecast”, “intend”, “project”, “plan”, “estimate” or “intend”. These forward-looking statements are Revenue €m 609 1.7 High-volume contracts were signed with cus- Total Shareholder based on all discernible information, facts and expectations available at the time. They can, therefore, only claim validity up to the date of their of which external revenue €m 256 11.3 tomers last year, which form the basis for future Operating result €m 21 10.5 Return in per cent publication. Adjusted operating margin % 3.6 – 0.4 pts growth. By developing innovative infl ight Segment result €m 20 – 4.8 entertainment products, Lufthansa Systems is Since forward-looking statements are by their nature subject to uncertainties and imponderable risk factors – such as changes in underlying EBITDA* €m 76 31.0 preparing for the changes in the airline IT mar- economic conditions – and rest on assumptions that may not or divergently occur, it is possible that the Group’s actual results and development CVA €m 7 – 69.6 may differ materially from those implied by the forecasts. Lufthansa makes a point of checking and updating the information it publishes. It ket and for expansion into adjacent markets. Segment capital expenditure €m 24 – 56.4 cannot, however, assume any obligation to adapt forward-looking statements to accommodate events or developments that may occur at some Employees as of 31.12. number 2,766 – 1.9 later date. Accordingly, it neither expressly nor conclusively accepts liability, nor gives any guarantee, for the actuality, accuracy and complete- 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 * Without Group-internal profi t and loss transfer/investment income. ness of this data and information. Lufthansa Group overview 2012 fi gures Key fi gures Lufthansa Group Key fi gures business segments Financial calendar 2013/2014 2012 2011 Change Passenger Airline Group 2012 Change Passenger Airline Group The airlines in the in % in % Passenger Airline Group again increased the 30.1 number of passengers compared with the pre- Revenue and result Revenue €m 23,559 5.7 Revenue 2013 2014 of which external revenue €m 22,855 6.1 Total revenue €m 30,135 28,734 4.9 vious year’s record fi gure. Revenue increased, Operating result €m 258 – 26.1 in EUR bn while the operating profi t fell. High fuel costs of which traffi c revenue €m 24,793 23,779 4.3 Adjusted operating margin % 1.6 – 0.5 pts 14 March Press Conference and Analysts’ 13 March Press Conference and Analysts’ Operating result €m 524 820 – 36.1 Segment result €m 262 – 26.2 and unfavou rable exchange rates depressed Conference on 2012 results Conference on 2013 results EBIT €m 1,357 734 84.9 EBITDA* €m 1,851 11.0 the result. The transfer of fl ight operations from CVA €m – 340 – 178.7 EBITDA €m 3,270 2,546 28.4 Austrian Airlines to Tyrolean Airways had a Segment capital expenditure €m 1,868 – 10.4 2 May Release of Interim Report 29 April Annual General Meeting in Hamburg Net profi t/loss €m 990 – 13 Employees as of 31.12.