Glossary

Aviation terminology
Average yieldsAverage revenue earned per unit of output; normally based on total passenger-kilometres or tonne-kilometres sold, but they can also be calculated per unit of traffic volume, e.g. per passenger carried or per kilometre flown. Block hoursThe time from the moment an aircraft leaves its parking position (off-blocks time) to taxi to the runway for take-off until itcomes to a complete standstill at its final parking position at the destination airport (on blocks). Code-shareA code-share is a flight segment that is sold under the flight number of one airline, while being operated either partly or entirely by another airline. Both companies maintain their own independent profile on the market. HubIn air traffic a hub refers to an airlines transfer airport, a central connecting point for different routes. Passengers and goods are transported from the original starting point to the airports hub. From there they are carried to their destination by a second flight alongside passengers and goods from other departure points. IATAInternational Air Transport Association the international trade association for the airline industry. Low-cost carrierLow-cost carrier are airlines which offer largely low ticket prices but with reduced service levels and sometimes additional charges on board and on the ground. Flights are mostly from secondary airports outside the major cities (e.g. Hahn in the Hunsrck area outside Frankfurt). MROShort for maintenance, repair and overhaul of aircraft. Network carrierIn contrast to low-cost carriers these airlines offer awide-ranging, normally global route network via one or more hubs, with synchronised connecting flights. SharkletsSharklets, or winglets, are the extensions fitted to the endsof the wings on aircraft belonging to the Airbus A320 family. They reduce the drag that occurs at the wing, thereby lowering fuel consumption. Passenger-kilometre/tonne-kilometreStandard output units for airtransport. A revenue passenger-kilometre (RPK) denotes one fare-paying passenger transported one kilometre. A revenue tonne- kilometre (RTK) denotes one tonne of load (passengers and/or cargo) transported one kilometre. Passenger load factor/cargo load factorMeasure of capacity Simone utilisation in per cent. The cargo load factor Menne expresses the ratio of capacity sold to available capacity. The passenger load factor refers Chief Offi cer Finances topassenger transportation and the cargo load factor to freight and Aviation Services transport or total traffic.

Financial terminology
Call optionThe right to purchase a specific underlying security within a specified period of time at an agreed price. Cash flowMeasure of a companys financial and earnings potential. It is calculated as the difference between the inflow and outflow of cash and cash equivalents generated from ongoing business activities during the financial year, see consolidated cash flow statement on p. 135 . Cash value added CVAParameter for measuring performance of value creation. When the cash flow generated in a period (EBITDAplus) is greater than the minimum cash flow required to cover the cost ofcapital, the CVA is positive and value is created, see Value-based
management and targets from p. 30

ComplianceInstitutionalised arrangements for ensuring that a companys management and staff duly comply with all statutory provisions and prohibitions. Deferred taxesA balance sheet item used to show taxable and deductible temporary differences. Deferred taxes reflect the temporary differences between assets and liabilities recognised for financial reporting purposes and such amounts recognised for income tax purposes. Directors dealingsTransactions by members of a companys supervisory, executive or divisional boards, or their family members, involving shares in their company. Under German law, any such dealings must be disclosed if they exceed EUR 5,000 within a calendar year. Dividend yieldIndicator for assessing the profitability of an investment in shares. It is determined by dividing the dividend by the share priceat the close of the reporting year and then multiplying it by 100. Debt repayment ratio A financial indicator. It represents the ratio of adjusted cash flow from operating activities to net indebtedness and pensions, see p. 56 . The rating agencies comparable criteria for aninvestment grade rating are met if a target of at least 60 per cent isachieved sustainably. EBITFinancial indicator denoting earnings before interest and taxes. EBITDAFinancial indicator denoting earnings before interest, taxes, depreciation and amortisation. Depreciation relates to items of property, plant and equipment and amortisation to intangible assets both terms apply equally to non-current and current assets. The figure also includes impairment losses on equity investments accounted for under the equity method and on assets held for sale. Christoph Franz
Chairman of the Executive Board and CEO

Stefan Lauer

Carsten Spohr
CEO Lufthansa German Airlines

Chief Officer Group Airlines and Corporate Human Resources

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To our shareholders | Management report | Consolidated fi nancial statements

Further information
Glossary

EBITDAplusEBITDAplus refers to the operating result adjusted fornon-cash items. It includes all cash-relevant items over which management has an influence, see Value-based management and
targets from p. 30

Equity methodAccounting method for measuring income derived from a companys investments in associated companies and joint ventures. Under this method, investment income equals a share of netincome proportional to the size of the equity investment. Equity ratioFinancial indicator expressing the ratio of shareholders equity to total assets. Financial covenantsCovenants are obligations on the part of a borrower towards its banks that are defined in loan agreements. They can also be described as conditions relating to the companys capital structure. During the term of the loan they oblige the borrower to maintain certain financial ratios (relating to equity, debt or liquidity, for example). Deutsche Lufthansa AGs main financial liabilities do not include covenants. Free cash fl owFinancial indicator expressing the cash flow from operating activities remaining in the reporting period after deducting net cash used for investing activities. GearingFinancial indicator expressing the ratio of net indebtedness plus pension provisions to equity. Group of consolidated companiesGroup of subsidiaries included ina companys consolidated financial statements. ImpairmentLosses recognised on the carrying amount of assets. Impairment charges are recognised when an assets recoverable value (the higher of fair value less costs to sell and value in use) is below its carrying amount. By contrast, depreciation or amortisation is the systematic allocation of the depreciable amount of an asset over its useful life. Internal fi nancing ratioFinancial indicator expressing the degree to which capital expenditure was financed from the cash flow generated. Jet fuel crackPrice difference between crude oil and kerosene. Lufthansa Pension TrustA fund to which Lufthansa has been contributing since 2004 to finance future retirement benefits to staff inGermany and those seconded abroad. Annual contributions are planned to build up fund assets, with the objective of funding benefit obligations in full. Net indebtedness/net liquidityFinancial indicator denoting noncurrent borrowing less cash, cash equivalents and current securities.

Operating resultAn earnings measure. The operating result is calculated as the profit from operating activities, adjusted for book gains and losses, write-backs of provisions, impairment losses, results of financial investments and the measurement of financial liabilities at theend of the period, see p. 49 . Put optionA contract giving the option buyer the right to sell a specified amount of the underlying security within a specified period of time at an agreed price (strike price). RatingA standardised measure used on international financial markets to judge and categorise a companys creditworthiness. A rating can enable conclusions to be drawn about whether an issuer is capable of meeting in full its obligations under the terms of the issue. Registered shares with transfer restrictionsRegistered shares that may only be transferred with the approval of the company. Retention of earningsTransfer of a companys profit to equity. It strengthens the companys financial position. Return on equityFinancial indicator expressing the ratio of net profit to shareholders equity. Return on salesFinancial indicator expressing the net profit before taxes in relation to sales revenue. Total shareholder returnFinancial indicator expressing the overall return that an investor earns from the increase in the market capitalisation or share price, plus the dividend payment. The total shareholder return is calculated from the share price at the close of the reporting year plus the dividend paid in respect of the previous year, multiplied by 100 and divided by the share price at the close of the previous year. Traffi c revenueRevenue generated solely from flight operations. Itcomprises revenue from transporting passengers and cargo as well as related ancillary services. Weighted average cost of capital WACCThe average return required on the capital employed at a company. The return on capital is calculated using the weighted average return required for both debt and equity. Working capitalFinancial indicator for assessing a companys liquidity, measured as the difference between its current assets and itscurrent liabilities.

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