First half financial report

January-June 2016

Société anonyme with share capital of €300,219,278 Registered office: 2, rue Robert Esnault-Pelterie, 75007 Paris

Mailing address: Air France-KLM, AFKL.FI, 95737 Roissy Charles de Gaulle Cedex Paris Trade and Company Register 552,043,002

Free translation into English for convenience only - French version prevails

CONTENTS

Corporate governance

3

The Board of Directors 3

The Group Executive Committee 6

Stock market and shareholder structure 7

Market and environment

9

Highlights

10

Strategy

13

Activity

16

Passenger network business 16

Cargo business 17

Maintenance business 18

Transavia 18

Air France-KLM fleet

19

Outlook and subsequent events

21

Risk factors

22

Related parties

22

Comments on the financial statements

23

Key financial indicators

28

Interim condensed consolidated financial statements (unaudited)

32

Consolidated income statement (unaudited)

33

Consolidated statement of recognized income and expenses (unaudited)

34

Consolidated balance sheet (unaudited)

35

Consolidated statement of changes in stockholders' equity (unaudited)

37

Consolidated statements of cash flows (unaudited)

38

Notes to the consolidated financial statements (unaudited)

40

Note 1 Business description

41

Note 2 Restatements of accounts 2015

41

Note 3 Significant events

41

Note 4 Accounting policies

42

Note 5 Change in the consolidation scope

44

Note 6 Information by activity and geographical area

44

Note 7 External expenses

46

Note 8 Salaries and number of employees

46

Note 9 Amortization, depreciation and provisions

47

Note 10 Other income and expenses

47

Note 11 Other non-current income and expenses

47

Note 12 Net cost of financial debt and other financial income and expenses

48

Note 13 Income taxes

49

Note14 Share of profits (losses) of associates

49

Note15 Net income from discontinued operations 50

Note 16 Earnings per share 50

Note 17 Tangible assets 51

Note 18 Pension assets and provisions 51

Note 19 Assets held for sale and liabilities relatied to assets

To be disposed of 52

Note 20 Equity attributable to equity holders of Air France-KLM S.A. 52

Note 21 Provisions 53

Note 22 Financial debt 55

Note 23 Net debt 55

Note 24 Lease commitments 56

Note 25 Flight equipment orders 56

Note 26 Related parties 57

Information and control

Attestation by the person responsible for the financial report

58

58

Statutory Auditors' review report on the

2016 half-year financial information

58

Corporate governance

The Board of Directors

During the 2016 first half, the composition of the Board of Directors saw the following changes:

  • The Board director mandates of Mssrs. Jean-François Dehecq, Cornelis J.A van Lede and Leo M. van Wijk expired at the end of the Ordinary General Shareholders' Meeting of May 19, 2016;

  • Ms. Anne-Marie Couderc was appointed as an independent Board director during the Ordinary General Shareholders' Meeting of May 19, 2016, for a four-year term of office;

  • Mr. Hans N.J. Smits was appointed as a Board director during the Ordinary General Shareholders' Meeting of May 19, 2016, for a four-year term of office;

  • Mr. Alexander R. Wynaendts was appointed as an independent Board director during the Ordinary General Shareholders' Meeting of May 19, 2016, for a four-year term of office.

Furthermore, at its meeting of June 22, 2016, in line with the succession plan established during its meeting of May 1, 2016, the Board of Directors decided to co-opt Mr. Jean-Marc Janaillac as a Board director and to appoint him as Chairman and Chief Executive Officer of Air France-KLM, replacing Mr. Alexandre de Juniac, effective from July 4, 2016.

As of June 30, 2016, the Board of Directors was composed of fifteen members including:

  • Thirteen Board directors appointed by the General Shareholders' Meeting, of whom:

    • two proposed by the French State1, and

    • two representatives of the employee shareholders2;

    • one representative of the French State appointed by ministerial order3;

    • one representative of the employees appointed by the Comité de Groupe Français4.

As of July 4, 2016, the composition of the Board of Directors remained unchanged, with the exception of the appointment of Mr. Jean-Marc Janaillac in the capacity of Chairman and Chief Executive Officer, replacing Mr. Alexandre de Juniac.

1 Pursuant to Article 6 of Ordinance no.2014-948 of August 20, 2014, relating to governance and to transactions involving the share

.

capital of State-owned companies

2 The Board directors representing the employee shareholders are appointed pursuant to Article L.225-23 of the Code of Commerce, Article L.6411-9 of the Transport Code and Article 17-2 of the Articles of Incorporation.

3 Pursuant to Article 4 of Ordinance no.2014-948 of August 20, 2014 relating to governance and to transactions involving the share capital of State-owned companies.

4 Pursuant to the provisions of Article L.225-27-1 of the Code of Commerce and Article 17-3 of the Articles of Incorporation.

Air France-KLM SA published this content on 28 July 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 28 July 2016 16:06:21 UTC.

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