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3-2012

Lufthansa Group overview

Key fi gures Lufthansa Group

		Jan. – Sept. 2012	Jan. – Sept. 2011	Change in %	July – Sept. 2012	July – Sept. 2011	Change in %
Revenue and result
Total revenue	€m	22,821	21,510	6.1	8,312	7,825	6.2
of which traffi c revenue	€m	18,786	17,818	5.4	6,935	6,575	5.5
Operating result	€m	628	724	– 13.3	648	610	6.2
EBIT	€m	697	708	– 1.6	863	727	18.7
EBITDA	€m	2,078	1,998	4.0	1,320	1,164	13.4
Net profi t / loss for the period	€m	474	288	64.6	642	494	30.0
Key balance sheet and cash fl ow statement fi gures
Total assets	€m	29,238	28,825	1.4	–	–	–
Equity ratio	%	28.8	28.0	0.9 pts	–	–	–
Net indebtedness	€m	2,043	1,623	25.9	–	–	–
Cash fl ow from operating activities	€m	2,428	2,121	14.5	766	429	78.6
Capital expenditure (gross)	€m	1,878	1,996	– 5.9	497	559	– 11.1
Key profi tability and value creation fi gures
Adjusted operating margin *	%	3.1	3.8	– 0.7 pts	7.5	8.2	– 0.7 pts
EBITDA margin	%	9.1	9.3	– 0.2 pts	15.9	14.9	1.0 pts
Lufthansa share
Share price at the quarter-end	€	10.55	9.76	8.1	–	–	–
Earnings per share	€	1.04	0.63	65.1	1.40	1.08	29.6
Traffi c fi gures
Passengers	thousands	78,835	76,203	3.5	29,433	28,690	2.6
Passenger load factor	%	79.3	78.1	1.2 pts	83.4	82.1	1.3 pts
Freight and mail	thousand tonnes	1,472	1,588	– 7.3	485	518	– 6.4
Cargo load factor	%	66.2	66.7	– 0.5 pts	66.9	66.6	0.3 pts
Available tonne-kilometres	millions	30,421	30,676	– 0.8	10,618	10,702	– 0.8
Revenue tonne-kilometres	millions	22,606	22,587	0.1	8,212	8,164	0.6
Overall load factor	%	74.3	73.6	0.7 pts	77.3	76.3	1.0 pts
Flights	number	786,611	794,526	– 1.0	274,418	276,718	– 0.8
Employees
Employees as of 30.9.	number	118,088	120,110	– 1.7	118,088	120,110	– 1.7

* Performance indicator to enable comparison with other airlines: (operating result + write-backs of provisions) / revenue. Date of publication: 31 October 2012.

1 To our shareholders
35 Further information
3 Interim management report
24 Interim fi nancial statements
Credits/Contact
Financial calendar 2013

Ladies and gentlemen, Financial calendar 2013

These are unsettling times for Lufthansa. 14 March Press Conference and Analysts' Conference on 2012 results

Ever-growing low-cost airlines and carriers from the Middle East are challenging us in our core business segment. Global alliances start shifting. Fuel costs remain stubbornly high. 2 May Release of Interim Report January – March 2013 7 May Annual General Meeting in Cologne

At the same time, we are investing more than ever before in our product. Today, our valued passengers are experiencing the best Lufthansa there has ever been: seamless travel, from innovative booking processes and the product experience in modern lounges on the ground, through to fundamentally redesigned seats and service concepts across classes on board our aircraft. 2 Aug. Release of Interim Report January – June 2013 31 Oct. Press Conference and Analysts' Conference on interim result January – September 2013

Between these two realities stand our employees and managers. They are the ones who continue to determine our success in the future. With our SCORE programme, we want to achieve sustainable profitability in this industry, to safeguard jobs and to remain one of the world's leading airline groups.

We have already achieved a great deal in the first nine months of this year. We have successfully sold bmi, our biggest loss-maker. We have put Austrian Airlines on the right track through a difficult restructuring process. We have taken the necessary decisions to bring our decentralised traffic back to profitability under the

Germanwings brand. We are fundamentally modernising our organisation and making it more efficient. We are reinventing the way in which we work together.

But more changes are necessary. Some of them will not be easy for our staff and our organisation, and some of them will even be painful. We nevertheless believe firmly that we have to keep changing in order to do right by our shareholders, our customers and, not least to ourselves as "Lufthanseaten" with continued economic success, outstanding products in their respective segments and sustainably secure jobs.

The results of the first nine months reassure us that our convictions are correct. Despite strong headwinds, we have managed to achieve a respectable profit. SCORE works. Unfortunately, the results are not yet as visible as we would wish. The climate is becoming rougher. Our fuel price hedging is losing its effect as prices remain high. The economic environment is worsening and the outlook for bookings is becoming gloomier.

We will therefore intensify our efforts. This applies to the service companies, which remain profitable and bolster earnings as usual, as well as in particular to the airlines which are directly exposed to these external factors.

Stay with us as we forge ahead on this exciting journey. We thank you for your trust.

Christoph Franz Chairman of the Executive Board

Disclaimer in respect of forward-looking statements Simone Menne Member of the Executive Board Chief Financial Officer

Carsten Spohr Member of the Executive Board Chief Officer Lufthansa German Airlines

Lufthansa share

The stock markets recovered in the third quarter despite ongoing market uncertainty. Performance was buoyed by statements from European and US central banks regarding a further easing of monetary policy.

In the course of this upwards trend, airline shares also recorded significant price increases. The price of the Lufthansa share rose by 15.8 per cent in the third quarter, outperforming the DAX, which was up by 12.5 per cent in the same period. Since the beginning of the year, the Lufthansa share, which climbed 14.8 per cent to EUR 10.55, has nonetheless underperformed the DAX (+22.3 per cent to 7,216 points). Including the dividend payment, Lufthansa shareholders achieved a total return of 17.6 per cent to date.

As of the end of September, 62.1 per cent of Lufthansa shares were held by German investors. The largest individual shareholders were still BlackRock Inc. with 5.43 per cent and Franklin Templeton with 5.00 per cent. Major new shareholders are Mackenzie Financial Corporation from Canada, which increased its stake in Lufthansa to 3.01 per cent in August, and US based Capital Group, which holds 3.09 per cent. The free float for Lufthansa shares is unchanged at 100 per cent.

Additional information on the shareholder structure and analysts' recommendations is regularly updated and published on our website i www.lufthansa.com/investor-relations.

Performance of the Lufthansa share, indexed as of 31.12.2011, compared with the DAX and competitors

Interim management report

Economic environment and sector performance

GDP growth 2012 compared with previous year

in %	Q1	Q2	Q3*	Q4*	Full year*
World	2.8	2.6	2.4	2.4	2.5
Europe	0.4	0.0	–0.3	0.0	0.0
Germany	1.2	1.0	0.5	0.8	0.9
North America	2.4	2.2	2.1	1.6	2.1
South America	2.8	2.4	2.9	3.4	2.9
Asia/Pacific	5.0	5.1	4.4	4.6	4.8
China	8.1	7.6	7.2	7.0	7.4
Middle East	3.5	2.9	2.6	2.4	2.9
Africa	3.7	4.8	5.4	5.5	4.9

Source: Global Insight World Overview as of 16.10.2012.

* Forecast.

Macroeconomic situation Global economic growth slowed sharply over the course of 2012. The difficulties resulting from the banking and debt crisis in the euro area remain responsible for this, as was the sharp rise in the oil price in the third quarter. The course of the economic development differed substantially from one region to another, but a downturn in economic growth was visible nearly everywhere. Altogether, the global economy grew year on year by 2.4 per cent in the third quarter.

After falling sharply in the second quarter to a low of USD 89.23/barrel, a resurgence of political tension in the Middle East and a loss of production in the USA and Venezuela contributed to driving the oil price back up again over the further course of the year. At the end of September, ICE Brent was traded at USD 112/barrel. The average price for the past nine months was also USD 112/barrel, just 0.7 per cent up on the same period last year. The market shortage also caused the jet crack, the price difference between kerosene and crude oil, to widen by USD 1.22/barrel compared with the previous year to USD 17.96/barrel. Altogether, the market price for kerosene went up year on year by an average of 1.5 per cent in the reporting period.

Kerosene is made more expensive for European airlines by the euro's decline against the US dollar since last year. The US dollar's average rise of 8.9 per cent inflated overall costs and was only

partially offset on the income front by the stronger British pound sterling, Japanese yen and Chinese renminbi. Exchange rate effects depressed the operating result for the first nine months by a total of EUR 100m.

Development of crude oil, kerosene and currency

		Minimum	Maximum	Average	30.9. 2012
ICE Brent	in USD/bbl	89.23	126.22	112.20	112.39
Kerosene	in USD/t	866.50	1,111.75	1,025.61	1,061.50
USD	1 EUR/USD	1.2053	1.3463	1.2809	1.2876
JPY	1 EUR/ JPY	94.2400	110.8900	101.5684	100.3200
GBP	1 EUR/GBP	0.7775	0.8483	0.8119	0.7971
CHF	1 EUR/CHF	1.2007	1.2186	1.2043	1.2088

Sector developments Despite the further slowdown of global growth, according to IATA calculations, sales in worldwide passenger traffic rose in the first eight months of the year by 5.8 per cent compared with the same period in the previous year. European airline sales grew at a similar rate of 6.0 per cent. Premium traffic increased in the first eight months by 4.7 per cent compared with the same period last year, but the pace of growth declined over the course of the year.

The freight business worldwide contracted over the first eight months. Revenue tonne-kilometres were 2.1 per cent down on the previous year. The decline was even sharper for the European cargo airlines at 3.5 per cent.

This macroeconomic pressure ensured that consolidation in the industry continued. Several mergers and partnerships were completed in the sector in the first nine months of the year. Etihad, for example, acquired a stake of 29 per cent in Air Berlin, which had joined the oneworld alliance just before. In the third quarter, both airlines announced a wide-ranging partnership with Air France-KLM. Avianca, Taca Airlines and Copa Airlines joined the Star Alliance, which also announced the upcoming inclusion of EVA Air. At almost the same time, the airlines TAM and LAN completed their merger in Latin America to become the LATAM Airlines Group. In the third quarter, Qantas and Emirates announced a closer partnership on flights between Asia/Australia and Europe, which is due to start in the second quarter of 2013. Finally, Qatar Airways revealed in early October that it is to join the oneworld alliance and thereby cooperate more closely with International Airlines Group (IAG).

Course of business

Overview The first nine months of the year were an eventful period for the Lufthansa Group. Both the ongoing crisis in the euro area and the persistently high oil price had a distinct effect on business performance. The first and third quarters were also affected by strikes by the air traffic controllers' union, the trade union ver.di and Lufthansa cabin crew.

In the reporting period, the Lufthansa Group was able to increase its revenue overall, but because of the influences mentioned the operating result was down on last year's.

In the Passenger Airline Group segment, the performance of the individual airlines was again mixed. Altogether, the result was slightly lower than last year. Thanks to its successful capacity management, the Logistics segment was able to further limit the fall in earnings. The service segments MRO, IT Services and Catering again made positive earnings contributions in the third quarter, each increasing their operating profit compared with last year.

SCORE – Change for Success The aim of the SCORE programme, launched in early 2012, is to achieve sustainable and structural improvements in the Lufthansa Group's earnings of at least EUR 1.5bn over the operating result for 2011 of EUR 820m. The corresponding steps will exert their full leverage on earnings in 2015. The projects that make up the programme are progressing well throughout the Group. In view of the 3,500 redundancies in administrative functions worldwide which have already been announced, most companies in the Group reached agreements with the codetermination boards on a socially acceptable programme of severance payments for staff in the third quarter. A key lever here is the expansion of Shared Business Services for Human Resources, Finance and Purchasing, which is being driven forward in the GLOBE project. In addition, the group airlines Lufthansa Passenger Airlines, SWISS and Austrian Airlines are working together closely to harmonise their basic fleet and cabin specifications and to develop joint processes and standards for reducing fuel consumption even further.

Lufthansa Passenger Airlines has decided to restructure the decentralised traffic. This entails the commercial and organisational merger of Germanwings and Lufthansa's decentralised European traffic under the Germanwings brand. The organisation of the Lufthansa Group is currently being reviewed for synergies in sales and at the stations. Other projects are also constantly being developed within the Group and the segments and implemented in consultation with the central SCORE project team.

Significant events The opening of Berlin Brandenburg International Airport was postponed yet again and is now planned for 27 October 2013. Lufthansa emphasises the importance of a dependable timetable for preparing and implementing its test operations and at the same time is very concerned that the airport infrastructure should go into service smoothly. Until the opening, the flights originally planned for the new airport are departing from Berlin-Tegel.

On 29 May, the state of Hesse's transport ministry implemented the ruling of the Federal Administrative Court on the night-flight ban. The ban on scheduled night flights at Frankfurt Airport between 11 p.m. and 5 a.m. is thereby definitive. In order to have a buffer for delays, no Lufthansa flights are scheduled to depart Frankfurt after 10.15 p.m. in the 2012/2013 winter timetable. Lufthansa Cargo also adjusted its flight timetable in response to the nightflight ban. Overall, the night-flight ban will reduce the Group's yearly earnings by a mid two-figure million euro amount.

Staff and management On 28 August 2012, the wage negotiations with the cabin crew union UFO were deemed to have failed. As part of the preceding talks, Lufthansa had put forward a plan for the future of cabin staff. It included both pay rises and a profitshare payment for cabin staff, as well as necessary reforms to the remuneration structures. On several days between 31 August and 7 September, UFO then called strikes at various sites in Germany which disrupted Lufthansa Passenger Airlines' flight operations. The strike depressed the operating result by a total of EUR 33m. On 7 September, the parties agreed to go to arbitration, which is currently taking place under the direction of Prof. Bert Rürup. Lufthansa had previously agreed to forego the use of external cabin crews in Berlin for the foreseeable future.

Since 1 July 2012, Simone Menne has been Chief Financial Officer and Aviation Services within the Executive Board of Deutsche Lufthansa AG. She succeeds Stephan Gemkow, who resigned from his post as of 30 June 2012 by mutual agreement with the Executive Board and Supervisory Board.

On 19 September 2012, the Nomination Committee of the Supervisory Board of Deutsche Lufthansa AG made a recommendation to determine successors for those Supervisory Board members who are no longer eligible for re-election after the close of the Annual General Meeting 2013 due to their age. Wolfgang Mayrhuber, Chairman of the Executive Board and CEO of Deutsche Lufthansa AG until December 2010, is recommended as successor to the current Chairman of the Supervisory Board, Dipl.-Ing. Dr-Ing. E.h. Jürgen Weber. Dr Karl-Ludwig Kley, Chairman of the Executive Board of Merck KGaA and former CFO of Deutsche Lufthansa AG, is recommended to succeed Dr Klaus G. Schlede.

Changes in reporting standards and in the group of consoli-

dated companies The standards mandatory since 1 January 2012 did not have a significant effect on the Group's net assets, financial and earnings position. For further details, see the Notes to the consolidated financial statements from p. 30 .

The group of consolidated companies was altered significantly compared with the same period last year through the sale of British Midland (bmi) to IAG. bmi was deconsolidated on 19 April 2012. The assets of EUR 576m and liabilities of EUR 690m attributable to the company and shown on the balance sheet for the period ending 31 December 2011 as per IFRS 5 were closed out. The particular accounting treatment of bmi since the successful signing of the contract for its sale to IAG is discussed in detail in the following section 'Earnings position'. The individual changes to the group of consolidated companies compared with year-end 2011 and 30 September 2011 are presented in the Notes on p. 30 . Apart from the effects outlined above, the changes to the group of consolidated companies did not have a significant effect on the balance sheet or the income statement in comparison with the same period in the previous year.

Earnings position

Traffic figures of the Lufthansa Group's airlines

		Jan. – Sept. 2012	Jan. – Sept. 2011	Change in %
Passengers carried	thousands	78,835	76,203	3.5
Available seat-kilometres	millions	198,131	194,576	1.8
Revenue seat-kilometres	millions	157,076	152,015	3.3
Passenger load factor	%	79.3	78.1	1.2 pts
Freight/mail	thousand tonnes	1,472	1,588	–7.3
Available cargo tonne-kilometres	millions	11,519	12,223	–5.8
Revenue cargo tonne-kilometres	millions	7,623	8,148	–6.4
Cargo load factor	%	66.2	66.7	–0.5 pts
Total available tonne-kilometres	millions	30,421	30,676	–0.8
Total revenue tonne-kilometres	millions	22,606	22,587	0.1
Overall load factor	%	74.3	73.6	0.7 pts
Flights	number	786,611	794,526	–1.0

As a result of the contract for the sale of bmi to IAG signed by Lufthansa and IAG on 22 December 2011, bmi is to be presented in the Group's income statement as a discontinued operation in line with IFRS 5. bmi was deconsolidated when the sale transaction was completed on 19 April 2012. The proceeds from the discontinued operation include the after-tax result recorded for bmi until its disposal and changes in the valuation or proceeds of disposal for the discontinued operation compared with the 2011 financial statements resulting from the aforementioned contractual agreement. The figures for the previous year have been adjusted accordingly. The result from discontinued operations at the end of the third quarter 2012 was mainly due to price adjustments made as a result of bmi's better than expected liquidity position. For details, please see the Notes on p. 31 .

External revenue share of the business segments in % (as of 30.9.2012)

Revenue and income The traffic figures for the Lufthansa Group improved overall in comparison with the same period last year. Developments in the passenger and freight business differed substantially, however. Whereas the passengers flying with the Group's passenger airlines increased by 3.5 per cent to a total of 78.8 million, the transport of freight and mail fell by 7.3 per cent to 1.5 million tonnes, see table on p. 5 . The individual performance data for the separate segments is presented in the respective chapters.

Revenue and income
	Jan. – Sept.	Jan. – Sept.	Change
	2012 in €m	2011 in €m	in %
Traffic revenue	18,786	17,818	5.4
Other revenue	4,035	3,692	9.3
Total revenue	22,821	21,510	6.1
Changes in inventories and work performed by the entity and capitalised	96	53	81.1
Other operating income	1,446	1,703	–15.1
Total operating income	24,363	23,266	4.7

As a result of the higher traffic, traffic revenue rose by 5.4 per cent to EUR 18.8bn in the first nine months of the financial year. Higher volumes accounted for 2.0 per cent and exchange rate effects for 3.1 per cent of the increase. Prices (including surcharges for fuel and air traffic tax) contributed to a slight rise of 0.3 per cent. The Passenger Airline Group accounted for EUR 16.5bn (+7.5 per cent) of traffic revenue and the Logistics segment for EUR 1.9bn (–9.5 per cent).

At EUR 4.0bn, other revenue was 9.3 per cent up on the previous year. Of this, the MRO segment generated EUR 1.8bn (+7.3 per cent), IT Services EUR 187m (+11.3 per cent) and Catering EUR 1.5bn (+13.6 per cent). The airborne companies in the Passenger Airline Group and Logistics segments contributed EUR 535m (+4.5 per cent) to other revenue.

Compared with the same period last year, revenue therefore rose by 6.1 per cent to EUR 22.8bn. The development of revenue over the last five years is shown in the chart above. The Passenger Airline Group's share of total revenue rose to 76.0 per cent (+1.0 percentage points) in 2012. The distribution of revenue by segment and region is shown in the segment reporting from p. 33 .

Other operating income decreased sharply by 15.1 per cent to EUR 1.4bn. In addition to non-recurring income last year (reimbursement of security charges and compensation payments), this decline is due to lower exchange rate gains (EUR –91m) and a fall in book gains from the disposal of assets (EUR –18m). The lower exchange rate gains correspond with a fall in exchange rate losses recognised in other operating expenses. Other items did not vary significantly compared with the previous year.

Total operating income went up by EUR 1.1bn, or 4.7 per cent, to EUR 24.4bn.

Expenses Operating expenses climbed by a total of EUR 1.2bn (+5.6 per cent) to EUR 23.7bn. The main factor behind this increase was the cost of materials and services, which went up by 9.3 per cent. As in the first half-year, the increase stemmed above all from the EUR 972m (+21.2 per cent) leap in fuel costs to EUR 5.6bn. Apart from the 12.3 per cent increase in fuel prices after hedging, the upwards trend of the US dollar also added 10.0 per cent to expenses. On the other hand, the volume effect caused by the smaller number of flights led to a slight reduction in expenses (–1.1 per cent). Fuel costs included a positive, but in comparison with the previous year significantly lower, result of price hedging of EUR 154m. Other raw materials, consumables and supplies were up by 3.4 per cent at EUR 2.0bn.

Fees and charges went up by 4.6 per cent to EUR 3.9bn. This stemmed largely from higher passenger fees (+10.4 per cent), take-off and landing fees (+4.6 per cent) and air traffic control charges (+3.9 per cent). Expenses for the air traffic tax went up by 4.2 per cent to EUR 274m, partly due to the tax that has been levied in Austria since 1 April 2011. Other purchased services totalled EUR 2.1bn, 2.7 per cent less than last year, due primarily to lower charter expenses.

Expenses

	Jan. – Sept. 2012 in €m	Jan. – Sept. 2011 in €m	Change in %
Cost of materials and services	13,545	12,393	9.3
of which fuel	5,567	4,595	21.2
of which fees and charges	3,920	3,748	4.6
of which operating lease	87	105	–17.1
Staff costs	5,107	4,943	3.3
Depreciation	1,345	1,242	8.3
Other operating expenses	3,726	3,897	–4.4
Total operating expenses	23,723	22,475	5.6

Staff costs rose by 3.3 per cent to EUR 5.1bn in conjunction with a 2.3 per cent increase in the average number of employees in the Group to 117,554, not counting the staff at bmi. Additional expenses from exchange rate movements, additions to the group of consolidated companies and wage agreements all added to costs. These were offset by a reduction in costs resulting from pension provisions, due mainly to adjustments to retirement saving schemes for cabin crew from Austrian Airlines which were agreed when the carrier's flight operations were transferred to Tyrolean Airways.

Depreciation and amortisation was up 8.3 per cent on the previous year at EUR 1.3bn. EUR 25m (+2.5 per cent) of this rise stems from depreciation of aircraft. Of the total impairment losses of EUR 65m (previous year: EUR 5m), EUR 63m (previous year: EUR 5m) related to aircraft: specifically four Boeing 747-400s, nine B737-300s and two B737-800s, which have been decommissioned or are held for disposal. Impairment losses of EUR 18m were also incurred on three of the B747-400s and the B737-800s mentioned above, as well as on three B737-800s, one Airbus A330-200, one Canadair Regional Jet 200 and five Avro RJs, which are shown in the balance sheet as assets held for sale. These impairment charges are recognised in other operating expenses.

Other operating expenses fell by 4.4 per cent to EUR 3.7bn. This decline stemmed mainly from lower exchange rate losses (EUR –184m), which correspond to lower exchange rate gains in other operating income. Expenses also fell as a result of reduced losses from current financial investments (EUR –24m) and lower expenses for advertising and sales promotion (EUR –10m). Last year's figure also included expenses from provisions for long-term contracts in the MRO business segment. By contrast, expenses were inflated by higher write-downs on current assets (EUR +63m) and higher staff-related expenses (EUR +34m). The other items did not change significantly compared with last year.

Earnings development In the first nine months of the 2012 financial year 2012, Lufthansa generated a result from operating activities of EUR 640m (previous year: EUR 791m). The operating result, which is regularly adjusted for the items shown in the table on p. 8 , was down EUR 96m, or 13.3 per cent, on last year's figure at EUR 628m. This includes an operating profit of EUR 648m generated in the third quarter (previous year: EUR 610m). This result does not include any significant restructuring costs in connection with SCORE. The adjusted operating margin declined by 0.7 percentage points in the reporting period to 3.1 per cent as against the previous year. This is calculated as operating result plus writebacks of provisions divided by revenue.

Operating result and net profit / loss for the period in €m (Jan.– Sept.)

The result from equity investments increased by EUR 15m to EUR 77m. While the result of the equity valuation improved by EUR 26m, other income from equity investments fell by EUR 11m to EUR 54m. Net interest declined by EUR 34m to EUR –241m.

The result from other financial items improved by EUR 125m to EUR –20m. This stemmed largely from changes in the time value of options used for hedging (mostly for fuel hedging) recognised in profit or loss. Whereas last year this resulted in expenses of EUR 113m, higher market values in the current financial year produced income of EUR 20m.

Reconciliation of results

		Jan. – Sept. 2012	Jan. – Sept. 2011
in €m	Income statement	Reconciliation with operating result	Income statement	Reconciliation with operating result
Total revenue	22,821	–	21,510	–
Changes in inventories	96	–	53	–
Other operating income	1,446	–	1,703	–
of which book gains and current financial investments	–	–47	–	–58
of which income from reversal of provisions	–	–72	–	–89
of which write-ups on capital assets	–	–8	–	–4
of which period-end valuation of non-current financial liabilities	–	–10	–	–27
Total operating income	24,363	–137	23,266	–178
Cost of materials and services	–13,545	–	–12,393	–
Staff costs	–5,107	–	–4,943	–
of which past service cost	–	–3	–	19
Depreciation, amortisation and impairment	–1,345		–1,242
of which impairment losses	–	65	–	5
Other operating expenses	–3,726		–3,897
of which impairment losses on assets held for sale – non-operating	–	18	–	8
of which expenses incurred from book losses and current financial investments	–	30	–	58
of which period-end valuation of non-current financial liabilities	–	15	–	21
Total operating expenses	–23,723	125	–22,475	111
Profit / loss from operating activities	640	–	791	–
Total from reconciliation with operating result	–	–12	–	–67
Operating result	–	628	–	724
Result from equity investments	77	–	62	–
Other financial items	–20	–	–145	–
EBIT	697	–	708	–
Write-downs (included in profit from operating activities)	1,345	–	1,242	–
Write-downs on financial investments, securities and assets held for sale	36	–	48	–
EBITDA	2,078	–	1,998	–

Earnings position

Cash flow and capital expenditure

Earnings before interest and taxes (EBIT) reflect the changes in the operating result, the result from equity investments and from other financial items and dropped slightly by EUR 11m to EUR 697m at the end of the third quarter.

Earnings before taxes (EBT) fell by EUR 45m to EUR 456m. Because of the tax-free income included here and the use of tax loss carryforwards that could not previously be recognised, there was only a minor income tax charge of EUR 8m. This led to a result from continuing operations of EUR 448m (previous year: EUR 442m).

Including the result of discontinued operations (EUR 36m, see Notes on p. 31 ) and after minority interests (EUR 10m), the net profit for the first nine months of 2012 came to EUR 474m (previous year: EUR 288m). Earnings per share improved to EUR 1.04 (previous year: EUR 0.63).

Cash flow and capital expenditure

In the first nine months of the financial year 2012, the Lufthansa Group generated cash flow from operating activities of EUR 2.4bn (previous year: EUR 2.1bn). Based on a EUR 45m decrease in earnings before income taxes, non-cash expenses of EUR 14m from changes in the market value of financial derivatives (previous year: EUR 126m) were eliminated when calculating cash flow.

After adjustment for non-cash depreciation and amortisation as well as for the proceeds of non-current asset disposals, which are attributed to investing activities, cash flow improved by EUR 181m. Furthermore, EUR 190m less was spent on income tax payments than in the previous year.

The change in working capital also lifted cash flow from operating activities by EUR 46m compared with the previous year. Starting with the financial statements for 2011, the calculation of cash flow from operating activities also includes retirement benefits paid to former staff from external pension funds, which are included in changes in working capital. The figures for the previous year have been adjusted accordingly.

In the first nine months of 2012, the Lufthansa Group recorded capital expenditure of EUR 1.9bn (previous year: EUR 2.0bn). Of this, EUR 1.6bn was for a total of 36 aircraft (three Boeing 747-8is, two B767s, two Airbus A380s, five A330s, five A321s, six A320s, five A319s and eight Embraer 195s) as well as aircraft overhauls and down payments. An additional EUR 166m was invested in other property, plant and equipment. Intangible assets accounted for EUR 49m of the remaining capital expenditure. Financial investments of EUR 18m related solely to loans. The disposal of bmi resulted in cash outflows totalling EUR 176m. EUR 100m went towards repairable spare parts for aircraft. The funding requirement was partly covered by interest and dividend income (EUR 326m in total) and proceeds of EUR 368m from the disposal of assets and shares – in particular aircraft and noncurrent securities. The purchase and sale of current securities and funds resulted in a net cash outflow of EUR 362m. A total of EUR 1.8bn in net cash was therefore used for capital expenditure and cash management activities (previous year: EUR 464m).

In the first nine months of the financial year 2012, Lufthansa generated free cash flow of EUR 975m (previous year: EUR 868m).

The balance of financing activities was a net cash outflow of EUR 57m. New borrowing (EUR 940m) was offset by scheduled capital repayments (EUR 502m), dividend payments (EUR 130m) and interest payments of EUR 385m. The new borrowing consisted largely of six borrower's note loans, as well as aircraft financing and a convertible bond issue, which can be exchanged for Lufthansa's JetBlue shares.

Cash and cash equivalents rose by EUR 561m to EUR 1.4bn. This figure includes an increase of EUR 5m in cash balances due to exchange rate movements.

The internal financing ratio was 129.3 per cent (previous year: 106.3 per cent). At the end of the third quarter, cash including securities came to EUR 4.9bn (previous year: EUR 4.4bn). The detailed cash flow statement can be found on p. 29 .

Assets and financial position

The Group's total assets rose by EUR 1.2bn compared with year-end 2011 to EUR 29.2bn. Non-current assets increased by EUR 263m to EUR 18.9bn and current assets by EUR 894m to EUR 10.3bn.

Within non-current assets, the item aircraft and reserve engines went up by EUR 381m to EUR 12.0bn. The increase of EUR 173m in other equity investments is primarily attributable to changes in the market value of the shares in Amadeus IT Holding S.A. (EUR +191m) and in JetBlue (EUR –13m), which are not recognised in profit or loss. By contrast, non-current derivative financial instruments (mainly relating to currency hedges) shrank by a total of EUR 45m. Non-current securities were down EUR 114m following the sale of a borrower's note loan. Loans and receivables also fell by EUR 125m.

In current assets, receivables increased by EUR 646m, mainly for seasonal and billing reasons. The decline in current financial derivatives (EUR –159m) mainly related to fuel and currency hedges. Cash and cash equivalents, consisting of current securities, bank balances and cash-in-hand, rose by EUR 900m to EUR 4.9bn. The sale of bmi to IAG on 19 April 2012 resulted in a reduction of EUR 576m in assets held for sale. The proportion of non-current assets in the balance sheet total declined from 66.3 per cent at year-end 2011 to 64.6 per cent currently.

Shareholders' equity (including minority interests) came to EUR 8.4bn as of the reporting date, an increase of EUR 390m (+4.8 per cent). The higher figure stems mainly from the positive after-tax result, diminished in particular by the dividend payment of EUR 130m to the shareholders of Deutsche Lufthansa AG and minority interests. The equity ratio picked up as a result to 28.8 per cent (year-end 2011: 28.6 per cent).

Calculation of net indebtedness and gearing

	30 Sept. 2012	31 Dec. 2011	Change as of 31 Dec. 2011
	in €m	in €m	in %
Liabilities to banks	1,587	1,456	9.0
Bonds	2,312	2,119	9.1
Other non-current borrowing	3,006	2,849	5.5
	6,905	6,424	7.5
Other bank borrowing	36	16	125.0
Group indebtedness	6,941	6,440	7.8
Cash and cash equivalents	1,448	887	63.2
Securities	3,450	3,111	10.9
Non-current securities
(liquidity reserve)*	0	114	–100.0
Net indebtedness	2,043	2,328	–12.2
Pension provisions	2,089	2,165	–3.5
Net indebtedness and pensions	4,132	4,493	–8.0
Gearing in %	49.0	55.9	–6.9 pts

* Realisable at any time.

Non-current liabilities and provisions went up slightly by EUR 38m to EUR 10.3bn, while current borrowing increased by EUR 729m to EUR 10.5bn. Within non-current borrowing, pension provisions fell by EUR 76m, mainly following the settlement of bmi's pension obligations. Pension provisions also declined in conjunction with the adjustments to retirement saving schemes for cabin crew from Austrian Airlines which were agreed when the carrier's flight operations were transferred to Tyrolean Airways.

Financial liabilities rose by EUR 95m. Derivative financial instruments increased by EUR 52m. Of this, EUR 43m was attributable to the market value of conversion options associated with the convertible bond issued in April 2012, which entitles the holder to acquire Lufthansa's shares in JetBlue.

Within current liabilities, financial liabilities were up by a total of EUR 386m as a result of maturity dates. In addition, trade payables and other financial liabilities climbed (EUR +308m) for seasonal

and billing reasons, as did liabilities from unused flight documents (EUR +607m). Debt in connection with assets held for sale fell by EUR 690m following the sale of bmi.

Net indebtedness at the end of the third quarter 2012 came to EUR 2.0bn, EUR 285m less than at year-end 2011. Gearing including pension provisions decreased to 49.0 per cent (year-end 2011: 55.9 per cent). It therefore remains within the target range of 40 to 60 per cent.

Group fleet – Number of commercial aircraft as of 30.9.2012

Manufacturer/type	LH Passenger Airlines1)	SWISS	Austrian	LH Cargo	Group fleet	of which finance lease	of which operating lease	Change as of 31.12.11	Change as of 30.9.11
Airbus A310	23)				2			–	–
Airbus A319	67	7	7		81	2	16	–6	–6
Airbus A320	49	27	10		86	12	2	–1	–1
Airbus A321	61	7	6		74	4		–2	+1
Airbus A330	18	17			35		4	+1	+1
Airbus A340	48	13	22)		63	2	2	–2	–2
Airbus A380	10				10			+2	+2
Boeing 737	45		7		52			–28	–32
Boeing 747	29				29			–1	–1
Boeing 767			6		6	2		–	–
Boeing 777			4		4			–	–
Boeing MD-11F				18	18			–	–
Bombardier CRJ	56		1		57		1	–8	–17
Bombardier C-Series					0			–	–
Bombardier Q-Series			14		14			–	–
ATR	11				11		6	–	–
Avro RJ	4	20			24		6	–5	–9
Embraer	38	43)	33)		45	2	4	–11	–9
Fokker F70			9		9			–	–
Fokker F100			15		15			–	–
Total aircraft	438	95	84	18	635	24	41	–61	–73

1) Including regional airlines and Germanwings.

2) Let to SWISS.

3) Leased to company outside the Group.

Passenger Airline Group business segment

Key figures Passenger Airline Group1) of which Lufthansa

						Passenger Airlines 3)
		Jan. – Sept. 2012	Jan. – Sept. 2011	Change in %	July – Sept. 2012	July – Sept. 2011	Change in %	Jan. – Sept. 2012	Jan. – Sept. 2011	Change in %
Revenue	€m	17,851	16,686	7.0	6,628	6,213	6.7	13,067	12,233	6.8
of which with companies of the Lufthansa Group	€m	515	557	–7.5	166	184	–9.8
Operating result	€m	345	354	–2.5	524	454	15.4	64	138	–53.6
Segment result	€m	324	396	–18.2	565	505	11.9
EBITDA1)	€m	1,451	1,461	–0.7	954	759	25.7	861	904	–4.8
Segment capital expenditure	€m	1,552	1,701	–8.8	375	451	–16.9
Employees as of 30.9.	number	55,578	55,312	0.5	55,578	55,312	0.5	40,927	40,579	0.9
Passengers 2)	thousands	78,835	76,203	3.5	29,433	28,690	2.6	57,205	55,237	3.6
Available seat-kilometres 2)	millions	198,131	194,576	1.8	71,197	70,525	1.0	146,474	144,215	1.6
Revenue seat kilometres 2)	millions	157,076	152,015	3.3	59,410	57,919	2.6	115,209	112,307	2.6
Passenger load factor 2)	%	79.3	78.1	1.2 pts	83.4	82.1	1.3 pts	78.7	77.9	0.8 pts

1) Before profit/loss transfer from other companies.

3) Including Germanwings. Previous year's figures have been adjusted.

2) Lufthansa Passenger Airlines, SWISS and Austrian Airlines.

Segment structure and course of business The Passenger Airline Group consists of Lufthansa Passenger Airlines (including Germanwings), SWISS and Austrian Airlines. Equity investments such as Sun Express and Brussels Airlines also form part of the segment. As part of an in-depth restructuring programme, Lufthansa has announced granting Brussels Airlines a credit line of up to EUR 100m. The granting of this credit line is dependent on concrete conditions, progress with the restructuring and contributions from other stakeholder groups. With the sale of bmi to IAG in April, Lufthansa disassociated itself of a persistently loss-making subsidiary.

The passenger business was marked by volatile demand in the first nine months of the year. The companies in the Passenger Airline Group reacted to the uncertainty felt by many customers concerning global economic developments with flexible adjustments to capacity and strict yield management. Load factors improved and income rose in all companies and traffic regions. However, this only partially offset the financial impact of high average fuel prices this year and the strike by the Lufthansa Passenger Airlines cabin crew in the third quarter.

Passengers signalled their appreciation of the new features in the individual airlines' products. Customer satisfaction, for instance, as measured by the Customer Performance Index in comparision to the previous year, was increased thanks to the investment in more efficient and quieter aircraft and in the new Business Class. For the second time in a row, the Lufthansa Group was awarded first place in the "Doing it All" category at the World Saver Awards organised by the US travel magazine Condé Nast Traveler.

Operating performance The companies in the Passenger Airline Group carried 78.8 million passengers in the first nine months of the year (+3.5 per cent). The load factor climbed by 1.2 percentage points to 79.3 per cent. The number of flights sank by 0.9 per cent, whereas the available seat-kilometres rose moderately by 1.8 per cent. Revenue seat-kilometres rose by 3.3 per cent. Average yields went up by 4.0 per cent. Traffic revenue climbed by a total of 7.5 per cent. The drivers behind the revenue increases varied from one region to another. Higher sales in European traffic went hand in hand with a moderate increase in average yields. In the Americas traffic region, it was primarily average yields which lifted traffic revenue by 11.2 per cent overall, as capacity remained stable. In the Asia/Pacific region, both the passenger load factor and average yields improved slightly on the back of a modest increase in capacity and sales. In the Middle East/Africa traffic region, a slight reduction in capacity bolstered the load factor and average yields.

The Passenger Airline Group's strategy increasingly focuses on strengthening its network and distribution capability by means of joint ventures with long-term partners. As the Atlantic++ joint venture with United Airlines and Air Canada made a successful contribution to the positive performance in transatlantic traffic, a similar joint venture (Japan+) was launched in the first half of the year with All Nippon Airways (ANA) from Japan. Following approval by the Japanese competition authorities in September, the plan is now to include SWISS and Austrian Airlines in this joint venture by mid 2013. Like Atlantic++ Japan+ entails the full integration of network planning, revenue management, pricing and distribution but with regard to the Europe-Japan traffic.

Revenue and earnings development The segment's traffic revenue went up to EUR 16.5bn (+7.5 per cent) thanks to the overall positive development in the traffic figures. In addition to a 3.3 per cent increase in sales volumes, exchange rate effects (+3.1 per cent) and slightly higher prices (+1.1 per cent) also lifted revenue.

Other operating income declined sharply by 15.9 per cent to EUR 701m. This is largely due to the non-recurring income generated in the same period last year (reimbursement of security charges and compensation payments) as well as lower exchange rate gains (EUR –17m).

Overall, total operating income went up by 5.9 per cent to EUR 18.6bn.

Compared with the previous year, operating expenses rose by 6.1 per cent to EUR 18.2bn. This increase was driven by the considerably higher cost of materials and services, which were up 10.1 per cent at EUR 11.9bn. Fuel costs were the main factor behind the rise, soaring by 22.7 per cent to EUR 5.2bn. Fees and charges were also higher, up by 5.2 per cent to EUR 3.7bn. The main components of the increase were higher passenger fees (+10.4 per cent), air traffic tax (+4.2 per cent), take-off and landing fees (+ 4.8 per cent) and air traffic control charges (+4.1 per cent).

Staff costs only rose by a marginal 0.3 per cent to EUR 2.9bn, despite a higher average number of employees (+1.8 per cent). This is mainly due to a reduction in expenses associated with pension provisions, caused by adjustments to retirement saving schemes for cabin crew from Austrian Airlines which were agreed when the carrier's flight operations were transferred to Tyrolean Airways. This reduction was largely offset by cost increases from exchange rate movements and rises resulting from wage agreements.

Depreciation and amortisation was up by 5.3 per cent to a total of EUR 1.1bn mainly due to new aircraft deliveries this year and last.

Other operating expenses fell by 4.5 per cent to EUR 2.4bn. A fall in expenses from exchange rate losses was offset by higher indirect staff costs and write-downs on current assets.

The operating result for the first nine months came to EUR 345m, just short of the previous year's figure of EUR 354m. Earnings improvements at Austrian Airlines as a result of the successful restructuring partly made up for lower earnings at Lufthansa Passenger Airlines and SWISS. Comments on the earnings contributions from the individual airlines can be found on the following pages.

Other segment income of EUR 76m (previous year: EUR 102m) was attributable above all to income from write-backs of provisions (EUR 52m) and book gains on the disposal of non-current assets (EUR 16m).

Other segment expenses came to EUR 85m (previous year: EUR 39m). EUR 65m of the total relates to impairment losses on the aircraft listed on p. 7 . The result of the equity valuation of EUR –12m (previous year: EUR –21m) related mainly to SN Airholding (EUR –22m), Sun Express (EUR –10m) as well as to Terminal 2 Gesellschaft mbH & Co OHG (EUR 21m), which was accounted for using the equity method for the first time. The segment result fell overall by EUR 72m to EUR 324m.

Segment capital expenditure at EUR 1.6bn went mainly on new aircraft and was 8.8 per cent lower than the previous year. As part of the ongoing fleet modernisation, investments were made in a total of 36 aircraft in the first nine months, for details see p. 9 .

	Net traffic revenue in €m external revenue		Number of passengers in thousands		Available seat-kilometres in millions		Revenue seat-kilometres in millions		Passenger load factor in %
	Jan.– Sept. 2012	Change in %	Jan.– Sept. 2012	Change in %	Jan.– Sept. 2012	Change in %	Jan.– Sept. 2012	Change in %	Jan.– Sept. 2012	Change in pts
Europe	7,529	7.3	62,543	3.8	69,342	3.5	50,704	4.9	73.1	0.9
America	4,277	11.2	6,958	1.8	60,221	0.2	51,696	2.4	85.8	1.8
Asia/Pacific	3,106	4.1	4,760	1.6	45,209	1.7	37,225	2.6	82.3	0.7
Middle East/Africa	1,380	4.9	3,636	3.9	19,653	–0.5	14,578	1.2	74.2	1.2
Total scheduled services	16,292	7.5	77,897	3.5	194,425	1.6	154,204	3.1	79.3	1.1
Charter	236	8.6	938	2.6	3,706	13.1	2,872	15.3	77.5	1.4
Total	16,528	7.5	78,835	3.5	198,131	1.8	157,076	3.3	79.3	1.2

Trends in traffic regions Passenger Airline Group*

* Lufthansa Passenger Airline, SWISS and Austrian Airlines.

Forecast All of the group airlines respond to the challenges of the year 2012 with active capacity management. Sustainable restructuring measures are being implemented in parallel, as demonstrated by the successful transfer of flight operations at Austrian Airlines. The one-off earnings effects achieved here partly made up for the fall in profits at Lufthansa Passenger Airlines and SWISS. The economic environment and the market conditions remain challenging, however, making it necessary to continue, and in some cases to intensify, the initiatives to safeguard an adequate level of profitability in the long term. More details of the individual measures can be found in the comments regarding the separate companies. Despite the revenue increase which is still expected, the Passenger Airline Group is not yet satisfied with the earnings level attained in the current financial year. From a current perspective, the operating profit for the financial year 2012 is only expected to be modest. The precise figure will depend on external factors, which remain volatile. All airlines in the group have made a commitment to the SCORE programme in order to achieve structural earnings improvements and adapt their efforts to match the higher demands. Capacity management is to be intensified at the same time. Capacity growth of 0.5 per cent is currently forecast for the Passenger Airline Group in the financial year 2012 and in the winter flight timetable capacities are being cut by 3.0 per cent.

Lufthansa Passenger Airlines

In the first three quarters of 2012, Lufthansa Passenger Airlines was unable to repeat the result for the same period in the previous year. The revenue trend was again positive, but was mitigated by high cost pressure. The main cost drivers were fuel, higher fees and charges and the strike by cabin staff. As a result of this, the operating result fell by half compared with the previous year. Altogether, Lufthansa Passenger Airlines (including Germanwings) carried 57.2 million passengers in the first nine months of the year (+2.6 per cent). Strict capacity management made it possible to lift the load factor to 78.7 per cent (+0.8 percentage points). Average yields (including fuel surcharges and exchange rate effects) rose by 4.9 per cent compared with the previous year. As a result, traffic revenue went up by 7.6 per cent to EUR 12.2bn. Revenue rose by a similar amount (+6.8 per cent) to EUR 13.1bn, and total operating income to EUR 13.6bn (+6.5 per cent).

Operating expenses climbed by 7.2 per cent to EUR 13.6bn. This stems primarily from the 22.0 per cent rise in fuel costs (EUR +694m), as well as higher fees and charges (EUR +114m). The strike by cabin crew depressed the operating result by a total of EUR 33m.

Lufthansa Passenger Airlines achieved an operating profit of EUR 64m in the reporting period (–53.6 per cent). This earnings situation remains unsatisfactory, depending as it does largely on external factors, especially fuel costs. The efforts being made as part of the Group's SCORE programme are therefore to be intensified in the foreseeable future in order to achieve the desired long-term profitability. Lufthansa Passenger Airlines has already initiated several earnings improvement projects. In this context, the restructuring of decentralised traffic has been a particular focus. Germanwings and Lufthansa decentralised European traffic is to be merged in commercial and organisational terms as of 1 January 2013. In legal terms, the new company will be based on the current Germanwings GmbH, which is headquartered in Cologne, and it will operate under the Germanwings brand. Considerable efficiency gains are expected from the merger. The partnership between Lufthansa Passenger Airlines and Contact Air came to a close at the end of the summer flight timetable 2012.

Irrespective of this ongoing restructuring, Lufthansa Passenger Airlines is continuing to invest in their product. The new Business Class seat with a horizontal sleeping area was successfully introduced in the summer when the first Boeing 747-8i entered into service. This seat is to be installed successively in the entire longhaul fleet. Delhi and Bangalore, as well as Washington D.C., are now served by a B747-8i. Los Angeles and Chicago have already been named as further destinations. The new aircraft boasts greater fuel efficiency and lower noise emissions than its predecessor. This is one reason why Lufthansa Passenger Airlines again received several awards for its product in the reporting period.

For the remainder of the year, Lufthansa Passenger Airlines is expecting increasingly uncertain sales development, which is also reflected in much shorter notice of advance bookings. From the current perspective, the booking indicators for the winter months have weakened. At the same time, the persistently high fuel price and the higher fees and charges will continue to inflate the cost base. In the meantime, the assumption is therefore that the financial year 2012 will close with a noticeable operating loss. Strict capacity management and the projects being pursued as part of SCORE will make important contributions to bringing Lufthansa Passenger Airlines back to profitability. In view of the challenges described above, they will have to be reinforced, however. The Lufthansa Passenger Airlines Executive Board is currently drawing up additional measures to effect a sustainable turnaround in the earnings trend. Key components will include a further review and adjustments to the route network and capacities as well as further cutting of complexity of commercial systems. Lufthansa Passenger Airlines aims to bring its earnings power back into line with its position as a leading European network carrier in order to re-establish the basis for profitable growth.

To our shareholders Interim management report | Interim financial statements | Further information

Other Group airlines

SWISS
		Jan. – Sept. 2012	Jan. – Sept. 2011	Change in %
Revenue	€m	3,194	2,957	8.0
Operating result	€m	163	244	–33.2
EBITDA	€m	397	440	–9.8
Passengers carried	thousands	12,870	12,386	3.9
Employees as of 30.9.	number	8,331	7,897	5.5

Further information on SWISS can be found at www.swiss.com.

In a challenging market environment, the performance of SWISS was largely determined by the exchange rate for the Swiss franc, which remains strong, and the high oil price. In the first nine months of the current year, SWISS generated revenue of EUR 3.2bn (previous year: EUR 3.0bn). The operating result nevertheless fell to EUR 163m as a result of the factors mentioned, and was therefore 33.2 per cent down on the same period in the previous year. Passenger numbers rose by 3.9 per cent. SWISS carried a total of 12.9 million passengers in the first nine months of 2012. The passenger load factor increased to 82.8 per cent (+1.3 percentage points).

Despite the unfavourable factors described earlier, the company is still pursuing a course of sustainable, profitable growth. From May 2013, SWISS will be offering a new, direct connection from Zurich to the Asian economic hub Singapore. The thirteenth Airbus A330-300 joined the SWISS fleet in October. The fleet will also welcome a new A320 in March 2013 and an A321 in April. From late 2014, the Avro-RJ regional fleet will be gradually replaced by more efficient Bombardier C-Series aircraft. Future growth in addition to this fleet renewal will depend on market conditions and developments.

Management is concentrating on implementing the steps to be taken as part of the SCORE programme. The planned earnings improvements should take full effect from 2015. Vital aspects, such as obtaining better terms for the daily maintenance and the engineering of the entire Airbus fleet, have already been implemented this year. In ground services, improvements to the check-in machines at the hub in Zurich have been launched. These and other steps are intended to achieve the long-term earnings objectives.

The economic environment is expected to remain difficult for the remainder of the year. SWISS management therefore continues to assume that despite forecast revenue growth and the measures already taken, the operating result will not match the previous year's figure.

Austrian Airlines

		Jan. – Sept. 2012	Jan. – Sept. 2011	Change in %
Revenue	€m	1,648	1,549	6.4
Operating result	€m	73	–34
EBITDA	€m	195	102	91.2
Passengers carried	thousands	8,760	8,581	2.1
Employees as of 30.9.	number	6,320	6,836	–7.5

Further information on Austrian Airlines can be found at www.austrian.com.

The restructuring of Austrian Airlines is showing results, in spite of the difficult market environment. The traffic figures improved markly over the first nine months of the year, especially on European routes. Austrian Airlines was able to increase passenger numbers by 2.1 per cent to around 8.8 million. A 2.5 per cent capacity reduction was complemented by a 2.1 per cent increase in sales. This took the load factor up by 3.5 percentage points compared with the same period in the previous year, to 77.7 per cent. Austrian Airlines' revenue of EUR 1.6bn was up 6.4 per cent on last year. The operating result improved to EUR 73m (EUR +107m). Adjusted for the positive non-recurring effect of transferring the operating business from Austrian Airlines to Tyrolean Airways, the operating result rose from EUR –34m to EUR 5m.

Austrian Airlines began a comprehensive restructuring programme in early 2012, which focused on increasing competitiveness and profitability. By the end of the third quarter, it had enabled a number of steps to be taken to achieve lasting earnings improvements. A core feature of the programme was the successful transfer of flight operations to the subsidiary Tyrolean Airways, which came into effect on 1 July, with no adverse effects for passengers. The harmonisation of the fleet in European traffic is also progressing. By the end of the year, three out of a total of seven planned new Airbus A320s should be flying in the Austrian Airlines fleet. The plan is to bring the four remaining A320s into service by the start of the 2013 summer flight timetable and thereby to gradually replace the Boeing 737-800 fleet. In October, Austrian Airlines launched a product offensive in its fleet of wide-bodied aircraft. By April 2013, all B767s and B777s are to be equipped with an updated, modern cabin, Business Class seats with a horizontal sleeping area and a new in-flight entertainment system.

For the final quarter, Austrian Airlines is expecting demand to remain volatile and fuel costs to stay high. Cost savings initiated by the restructuring programme within the company and at suppliers will already have a partial impact on earnings in 2012. The non-recurring effects of transferring flight operations mean that Austrian Airlines will post a positive operating result as early as 2012.

Logistics business segment

Key figures Logistics

		Jan. – Sept. 2012	Jan. – Sept. 2011	Change in %	July – Sept. 2012	July – Sept. 2011	Change in %
Revenue	€m	2,005	2,220	–9.7	653	717	–8.9
of which with companies of the Lufthansa Group	€m	20	19	5.3	7	6	16.7
Operating result	€m	66	173	–61.8	19	40	–52.5
Segment result	€m	79	173	–54.3	23	36	–36.1
EBITDA*	€m	125	242	–48.3	39	58	–32.8
Segment capital expenditure	€m	134	42	219.0	51	7	628.6
Employees as of 30.9.	number	4,623	4,612	0.2	4,623	4,612	0.2
Freight and mail	thousand tonnes	1,288	1,413	–8.9	423	461	–8.1
Available cargo tonne-kilometres	millions	9,459	10,269	–7.9	3,083	3,368	–8.4
Revenue cargo tonne-kilometres	millions	6,526	7,120	–8.3	2,166	2,353	–7.9
Cargo load factor	%	69.0	69.3	–0.3 pts	70.3	69.9	0.4 pts

* Before profit/loss transfer from other companies.

Segment structure and course of business The Logistics segment comprises Lufthansa Cargo AG as well as Lufthansa Cargo Charter Agency GmbH, the airfreight container specialist Jettainer GmbH and the equity investment in the cargo airline AeroLogic GmbH. Furthermore, Lufthansa Cargo holds equity interests in various handling companies. In June 2012, an application was made to liquidate Jade Cargo International Ltd., which ceased operations in December 2011. In addition to its own and chartered freighter capacities, Lufthansa Cargo also markets the belly capacities of passenger aircraft flown by Lufthansa Passenger Airlines and Austrian Airlines.

Global demand for airfreight fell significantly in the first nine months of 2012. The persistently high oil price and the confirmation of the night-flight ban in Frankfurt depressed Lufthansa Cargo's business even further. Thanks to strict capacity and cost management the company was nonetheless able to earn an operating profit in the third quarter.

At the end of September, the Supervisory Board of Deutsche Lufthansa AG approved an investment in a new airfreight centre in Frankfurt. The replacement for the Lufthansa Cargo Center, which is 30 years old, is due to go into operation in 2018. Construction is planned to start in 2014. The new building will make use of the latest technology to provide higher quality and much lower unit costs. Due to the night-flight ban in Frankfurt, Lufthansa Cargo has cut capacities by 20 per cent compared with its original plans. At the same time it is securing future growth options.

Product and route network Lufthansa Cargo's product portfolio comprises standard and express solutions. With the Courier. Solutions and Emergency.Solutions products launched this year, the company offers its customers new services in the segment of particularly urgent express deliveries. The quality initiative in place in the German market since two years is continued in 2012. In March, Lufthansa Cargo was one of just five airlines in the world to obtain the platinum seal for its own quality management as part of the industry-wide IATA Cargo 2000 initiative.

In September, Lufthansa Cargo launched the second edition of its open innovation platform. It enables customers, experts from the logistics industry and academics to work together on further developments. In addition, a pilot project over the next six months will test the use of GSM technology for airfreight consignments. The aim is to give Lufthansa Cargo's customers even greater transparency concerning the status of their shipments.

Lufthansa Cargo adapted its route network, in particular by reducing frequencies and capacities, in line with demand. The remaining capacities were also deployed selectively to new destinations in the network. For the first time, MD-11 freighters will now fly to Detroit, the centre of the US automotive industry. In South America, Montevideo was added to the route network. On the other hand, the service introduced this year to the Chinese city of Chongqing will cease with the winter flight timetable, as the market did not meet expectations. The winter flight plan, however, for the first time does include freighter flights to Tel Aviv.

Operating performance Freight volumes fell year on year by 8.9 per cent in the first three quarters of 2012. Lufthansa Cargo continued its restrictive capacity management and reduced capacity by 7.9 per cent. This kept the load factor more or less stable at 69.0 per cent (–0.3 percentage points). Average yields were also roughly on par with the previous year's, despite the weak market environment. The decline in tonnage was steepest in the Asia/Pacific region. Sales slumped, but the load factor even went up thanks to successful capacity management. In the Americas region, the cargo load factor was low and capacity stayed almost the same. Sales fell in Europe, but the load factor here was also improved significantly. In the Middle East/Africa region, sales fell somewhat faster than capacity, which resulted in a slightly lower cargo load factor.

Revenue and earnings development As a result of the lower traffic revenue (–9.5 per cent to EUR 1.9bn), Lufthansa Cargo's revenue in the first nine months of the year fell by 9.7 per cent compared with the same period in the previous year to EUR 2.0bn. Other revenue sank to EUR 69m (–16.9 per cent), in particular due to lower income from aircraft charters. Other operating income of EUR 50m was 7.4 per cent down on the previous year, mainly due to lower foreign currency results and lower insurance payments. Total operating income fell to EUR 2.1bn (–9.6 per cent).

Operating expenses sank by 5.3 per cent year on year to EUR 2.0bn. This was primarily due to the reduced cost of materials and services, which came to EUR 1.5bn (–5.9 per cent). Within this item, charter expenses fell by 12.0 per cent to EUR 689m, handling charges by 9.5 per cent to EUR 143m and MRO expenses by 6.9 per cent to EUR 94m. Despite lower transport volumes, fuel expenses went up to EUR 385m (+3.8 per cent) on the back of a significant increase in kerosene prices and the strong US dollar.

Staff costs went up by 6.2 per cent to EUR 275m, mainly due to new wage agreements, a slight increase in employee numbers and higher retirement benefit expenses. The Logistics segment had an average of 4,609 employees (+1.3 per cent). Depreciation and amortisation dropped by 36.4 per cent to EUR 42m. This was principally because depreciation of further MD-11 freighters had come to an end. Other operating expenses fell by 5.9 per cent to EUR 215m.

In the reporting period, Lufthansa Cargo generated an operating profit of EUR 66m, which, as expected, was below the previous year's strong figure of EUR 173m.

Other segment income – which largely stemmed from provision reversals – amounted to EUR 4m (previous year: EUR 8m). There were no other segment expenses. The segment result was EUR 79m (previous year: EUR 173m). This includes pro rata income of EUR 9m (previous year: EUR –8m) from subsidiaries accounted for using the equity method.

Segment capital expenditure went up to EUR 134m in the reporting period (previous year: EUR 42m). The rise was due largely to the down payments for five Boeing 777F aircraft.

Forecast On the basis of the available leading indicators, demand for airfreight is only expected to recover in mid 2013 at the earliest. In its operational management, Lufthansa Cargo will therefore continue to focus on a high load factor, stable average yields and strict cost control. This will continue to be based primarily on dimensioning freighter capacities strictly in line with load factors. Altogether, Lufthansa Cargo is nevertheless expecting that the operating profit will be in the low three-figure million euro range for 2012, albeit well below the very good result achieved last year.

	Net traffic revenue in €m external revenue*		Freight/mail in thousand tonnes		Available cargo tonne kilometres in millions		Revenue cargo tonne kilometres in millions		Cargo load factor in %
	Jan.– Sept. 2012	Change in %	Jan.– Sept. 2012	Change in %	Jan.– Sept. 2012	Change in %	Jan.– Sept. 2012	Change in %	Jan.– Sept. 2012	Change in pts
Europe	181	–1.6	445	–5.2	525	–14.8	264	–6.3	50.3	4.6
America	765	–4.0	389	–9.8	4,144	–1.7	2,818	–5.9	68.0	–3.1
Asia/Pacific	824	–15.5	352	–12.9	3,894	–13.6	2,918	–11.3	74.9	1.9
Middle East/Africa	153	–7.8	102	–5.7	896	–4.0	527	–4.9	58.8	–0.5
Total	1,923	–9.5	1,288	–8.9	9,459	–7.9	6,526	–8.3	69.0	–0.3

Trends in traffic regions Lufthansa Cargo

* Not including Extracharter.

MRO business segment

Key figures MRO

		Jan. – Sept. 2012	Jan. – Sept. 2011	Change in %	July – Sept. 2012	July – Sept. 2011	Change in %
Revenue	€m	3,002	3,048	–1.5	986	1,001	–1.5
of which with companies of the Lufthansa Group	€m	1,155	1,326	–12.9	382	445	–14.2
Operating result	€m	227	198	14.6	83	92	–9.8
Segment result	€m	265	232	14.2	92	101	–8.9
EBITDA*	€m	339	304	11.5	135	102	32.4
Segment capital expenditure	€m	89	78	14.1	26	27	–3.7
Employees as of 30.9.	number	20,397	19,889	2.6	20,397	19,889	2.6

* Before profit/loss transfer from other companies.

Segment structure and course of business The Lufthansa Technik group comprises 33 technical maintenance operations around the world, including the headquarters in Hamburg. Lufthansa Technik also holds direct and indirect stakes in 55 companies. The group of consolidated companies expanded to include two more companies than last year. The market for maintenance, repair and overhaul (MRO) services was stable and prices remained low. Expanding global MRO capacities in a consolidating market and the tense financial and earnings situation at many airlines represent significant challenges. The one-off expenses in the previous year's result meant that the operating profit in the first nine months of 2012 were higher than a year ago.

Dr Johannes Bußmann was appointed to succeed Uwe Mukrasch as the new Executive Board member for Human Resources, Engine and VIP Services and took up this position on 1 September.

Products With its broad product portfolio in the MRO service sector, Lufthansa Technik is the global market leader. An additional key mainstay is the completion and modification of passenger aircraft for private and government customers (VIP business).

Operating performance By the end of September, Lufthansa Technik had signed 298 contracts with a total volume of EUR 467m for 2012; a slight increase on the number of customers and aircraft serviced compared with the previous year. Key sales successes in the reporting period included the six-year contract with Air Canada to overhaul the engines on its Airbus A320 fleet, an eight-year contract with Virgin Atlantic for maintenance services and a tenyear contract to supply components for up to 90 aircraft from the A320 family with GO Airlines from India. As part of the Group SCORE programme, a review of all administrative functions and processes was initiated in order to achieve a sustainable increase in profitability.

Revenue and earnings development In the first nine months of the year, revenue amounted to some EUR 3.0bn, similar to last year. Intra-Group revenue fell by 12.9 per cent year on year to EUR 1.2bn, due to the sale of bmi and a high-revenue modification programme in 2011. At the same time, external revenue climbed by 7.3 per cent to EUR 1.8bn. Other operating income fell to EUR 137m (–14.9 per cent) due to exchange rate movements. In aggregate, this meant that total operating income of EUR 3.1bn was slightly down on the previous year (–2.2 per cent).

Total operating expenses fell to EUR 2.9bn (–3.3 per cent). The cost of materials and services fell by 6.2 per cent to EUR 1.5bn. As the group of consolidated companies was expanded at the end of the year, the average number of employees went up by 3.1 per cent to 20,386. In combination with the wage increase in place since the start of the year and additional partial retirement agreements, this led to a rise in staff costs by 8.9 per cent to EUR 881m. Depreciation and amortisation was EUR 9m higher than the previous year at EUR 75m. Other operating expenses fell by 14.5 per cent to EUR 494m due to exchange rate movements and the previous year's provisions in connection with long-term contracts.

Lufthansa Technik generated an operating profit of EUR 227m in the reporting period. This was 14.6 per cent above the figure for the previous year. Other segment income rose to EUR 25m, whereas the result of the equity valuation remained virtually unchanged at EUR 14m. Lufthansa Technik achieved a segment result totalling EUR 265m (+14.2 per cent). Segment capital expenditure, primarily for expanding infrastructure and purchasing reserve engines, rose to EUR 89m (EUR +11m).

Forecast Bolstered by the cost-cutting and sales measures which have been initiated, Lufthansa Technik now expects revenue for 2012 to remain unchanged and the operating profit to be higher than last year.

IT Services business segment

Key figures IT Services

	Jan. – Sept. 2012	Jan. – Sept. 2011	Change in %	July – Sept. 2012	July – Sept. 2011	Change in %
Revenue	€m 448	436	2.8	147	147	0.0
of which with companies of the Lufthansa Group	€m 261	268	–2.6	86	89	–3.4
Operating result	€m 13	12	8.3	5	6	–16.7
Segment result	€m 13	9	44.4	6	5	20.0
EBITDA	€m 59	38	55.3	15	16	–6.3
Segment capital expenditure	€m 18	25	–28.0	8	9	–11.1
Employees as of 30.9. number	2,764	2,846	–2.9	2,764	2,846	–2.9

Segment structure and course of business Lufthansa Systems is one of the leading IT service providers for the global airline industry. In addition, the company offers consultancy and IT services for other selected industries. The focus of its activities are on consultancy, developing and implementing industry solutions as well as system operations in a global network of its own data centres. Alongside its headquarters in Kelsterbach and several German branch offices, the group has overseas offices in 16 other countries. In the first nine months of 2012, Lufthansa Systems was able to increase both revenue and operating result compared with the previous year.

Products Lufthansa Systems' portfolio covers a range of business processes used by airlines. In the industrial sector, the company offers consultancy, individual applications, industry solutions and specific software. Lufthansa Systems is also a certified SAP partner. Cloud computing, mobile solutions and other innovative concepts have a special place in its service portfolio. The most recent example is the wireless in-flight entertainment system BoardConnect, which has already won several awards.

Operating performance The roll-out of the IT workplace model deskBase continued throughout the Lufthansa Group in the reporting period. Lufthansa Passenger Airlines, Lufthansa Cargo and Star Alliance also renewed contracts for the operation of their global data networks on the basis of the product SkyConnect. Another customer, Malaysia Airlines, was also won for this product. Important new customers for the flight planning solution Lido/Flight include Air France and Ryanair. The latter also renewed its contracts for the planning systems NetLine/Sched, /Ops and /Crew for ten years. Singapore Airlines extended its existing contract for Lido/Flight for a further eight years. The Norwegian cruise ship company Hurtigruten is to equip its twelve vessels with the interactive Guest Service Portal from Lufthansa Systems. With the airlines US Airways, SWISS and Asiana Airlines, the staff travel system myIDTravel now has 164 customers worldwide. Consultancy agreements were also signed with Volkswagen and GlaxoSmithKline.

Revenue and earnings development Compared with the previous year revenue for Lufthansa Systems increased by 2.8 per cent to EUR 448m. External revenue was particularly important, rising by 11.3 per cent to EUR 187m. In contrast, revenue from Lufthansa Group companies of EUR 261m fell slightly (previous year: EUR 268m). Other operating income fell to EUR 13m (previous year: EUR 19m). This brought total operating income to EUR 461m (+1.3 per cent).

The cost of materials and services went up as a result of the higher revenue to EUR 70m (EUR +11m). In the reporting period, Lufthansa Systems had an average of 2,779 employees (–3.0 per cent). Staff costs nonetheless went up slightly, by 1.2 per cent to EUR 173m, driven by wage increases and higher expenses for partial retirement. Depreciation and amortisation came to EUR 27m (EUR +2m). Other operating expenses amounted to EUR 178m, down EUR 10m year on year, largely thanks to the savings achieved by introducing deskBase. Total operating expenses were EUR 448m (+1.1 per cent).

The company generated an operating profit of EUR 13m in the reporting period (EUR +1m). The segment result also rose to EUR 13m (EUR +4m). Segment capital expenditure fell to EUR 18m (previous year: EUR 25m). Capital expenditure was higher in 2011 because of switching the model for IT workplaces to cloud computing (deskBase).

Forecast Based on the successful restructuring in 2011, Lufthansa Systems is now reporting profitable growth. Revenue from Lufthansa Passenger Airlines will initially continue to decline as cheaper technologies are deployed. However, the growing share of new and additional contracts with customers outside the Group will more than make up for this shortfall. For the current financial year, the company is therefore still expecting moderate revenue growth and a positive earnings performance.

Catering business segment

Key figures Catering

		Jan. – Sept. 2012	Jan. – Sept. 2011	Change in %	July – Sept. 2012	July – Sept. 2011	Change in %
Revenue	€m	1,897	1,710	10.9	694	621	11.8
of which with companies of the Lufthansa Group	€m	431	420	2.6	155	150	3.3
Operating result	€m	73	56	30.4	50	35	42.9
Segment result	€m	85	64	32.8	56	39	43.6
EBITDA	€m	122	101	20.8	70	42	66.7
Segment capital expenditure	€m	42	51	–17.6	18	21	–14.3
Employees as of 30.9.	number	30,660	29,687	3.3	30,660	29,687	3.3

Segment structure and course of business The LSG Sky Chefs group consists of 150 companies with approximately 200 sites in 52 countries. The parent company for the group, LSG Lufthansa Service Holding AG, is based in Neu-Isenburg. Year on year, the group of consolidated companies has grown, with the addition of three companies. LSG Sky Chefs signed an agreement with Finnair to manage the catering activities in Helsinki, which took effect in early August. A joint venture with Alpha Flight Group in the UK was established as of 1 October. The restructuring in Germany is progressing promptly as the branch structure is adjusted to reflect changes in local markets. The Nuremberg site is to close in early 2013, and talks are underway with employee representatives to reduce capacities in Hamburg, Stuttgart and Cologne.

The first nine months were positive for LSG Sky Chefs, with higher passenger volumes and a higher operating profit than last year.

Products The products and concepts developed by LSG Sky Chefs all reflect an increasing environmental awareness. Following its launch on Lufthansa's long-haul routes, the lightweight Quantum trolley has also been in service at Condor since mid-August. In September, the company exhibited for the first time at the Innotrans trade fair for transport technology, presenting a wide range of innovative products and services for the new generation of highspeed trains.

Operating performance In North America, LSG Sky Chefs won contract renewals with US Airways, Fedex and Alaska Airlines, as well as acquiring new customers at many stations. Negotiations with the unions in Germany to establish competitive structures for staff costs were called off with no agreement at the end of May. In the USA, however, a new wage agreement for some 8,000 staff, valid until early 2015, was signed in January.

Revenue and earnings development Revenue increased year on year by 10.9 per cent (adjusted for exchange rates: +6.1 per cent) to EUR 1.9bn. External revenue went up to EUR 1.5bn (+13.6 per cent), while internal revenue increased by 2.6 per cent to EUR 431m. Other operating income went up sharply compared with the previous year to EUR 61m (EUR +19m), due largely to a non-recurring effect stemming from the premature termination of a lease in the USA. Overall, total operating income increased by 11.8 per cent to EUR 2.0bn. Total operating expenses came to EUR 1.9bn (+11.1 per cent). The cost of materials and services amounted to EUR 859m (+12.4 per cent). LSG Sky Chefs had an average of 29,953 employees (+3.0 per cent). Exchange rate movements, additions to the group of consolidated companies and one-off wage payments in the USA lifted staff costs by 11.3 per cent to EUR 662m. Depreciation and amortisation went up by 14.3 per cent to EUR 48m, mainly as a result of greater capital expenditure in 2011. Other operating expenses rose to EUR 316m (+7.1 per cent) due to the higher volume of business.

LSG Sky Chefs posted an operating profit of EUR 73m. This is 30.4 per cent above the figure for the previous year. Other segment income and expenses were roughly balanced (EUR +3m). The result of the equity valuation was stable year on year at EUR 11m. The segment result was therefore EUR 85m (+ 32.8 per cent). Segment capital expenditure fell to EUR 42m (EUR –9m).

Forecast For the remainder of 2012, LSG Sky Chefs continues to anticipate modest growth. At the same time, current exchange rate movements are having a positive impact on revenue and earnings in the Catering segment. Efficiency programmes in purchasing, production, sales and administration continue to be pursued in addition to the restructuring activities taking place as part of SCORE. For the 2012 financial year, LSG Sky Chefs is still anticipating higher revenue. The operating result is now expected to be above that of the previous year.

Catering Other To our shareholders Interim management report | Interim financial statements | Further information

Other

		Jan. – Sept. 2012	Jan. – Sept. 2011	Change in %	July – Sept. 2012	July – Sept. 2011	Change in %
Total operating income	€m	973	954	2.0	269	304	–11.5
Operating result	€m	–106	–9		–35	–9	–288.9
Segment result	€m	–105	–34	–208.8	–28	–42	33.3
EBITDA*	€m	7	21	–66.7	–22	–34	35.3
Segment capital expenditure	€m	14	16	–12.5	7	4	75.0
Employees as of 30.9.	number	4,066	3,953	2.9	4,066	3,953	2.9

* Before profit/loss transfer from other companies.

Structure The segment Other includes the Service and Financial Companies which incorporate the Lufthansa Group's financial and service activities. They include AirPlus, Lufthansa Flight Training and Lufthansa Commercial Holding. The central Group functions of Deutsche Lufthansa AG also belong to this segment.

Companies' performance In the reporting period, the number of transactions performed by AirPlus customers was 7 per cent higher than last year. The growth rate for national business travel did begin to slow in the third quarter, but billing revenue for the AirPlus business travel products was still 11 per cent higher than last year. However, the pace of growth has nearly halved compared with the first half of 2012. Total operating income went up by 6.1 per cent to EUR 225m, while the operating result fell to EUR 23m (–8.0 per cent) due to non-recurring positive effects in 2011 and greater expenses for write-downs.

Lufthansa Flight Training felt the effects of the economic downturn in the third quarter. Revenue of EUR 128m for the first nine months was 3.8 per cent down on last year. The operating result came to EUR 21m (– 27.6 per cent). Steps to further improve the cost and income structure are being implemented as part of the SCORE programme.

The earnings contributions of the Group functions were again severely affected by the fluctuations in exchange rates. Total operating income went down by 14.5 per cent to EUR 491m. Operating expenses were unchanged at EUR 649m. The operating result came to EUR –158m (previous year: EUR –75m).

Revenue and earnings development In the Other segment, total operating income rose to EUR 973m (+2.0 per cent). Operating expenses grew by 12.0 per cent to EUR 1.1bn, largely due to exchange rate movements. This resulted in an operating loss of EUR –106m (previous year: EUR –9m). The segment result was EUR –105m (previous year: EUR –34m).

Risk and opportunities report

As an international aviation company Lufthansa is exposed to macroeconomic, sector-specific and company risks. These are primarily market and competition risks which affect capacity and load factors. The volatility of kerosene prices and exchange rates is having an increasing effect. They are flanked by political risks, operational and collective bargaining risks, legal risks and contingencies, procurement risks, IT risks and financial and treasury risks.

Our constantly updated management systems make it possible to identify both risks and opportunities at an early stage and act accordingly. For further information on the opportunity and risk management system, see Annual Report 2011 from p. 114 . As part of the reorganisation of Lufthansa's risk management, a system was set up in the third quarter which is accessible throughout the Group. It enables a uniform Group standard for risk comparisons and offers standardised, up-to-date reporting. In addition, risk management is to be more closely interlinked with controlling.

In the first nine months of 2012, the opportunities and risks for the Group described in detail in the Annual Report 2011 have materialised or developed as follows.

The global economic recovery hoped for by the end of the year has not occurred so far. Growth in all regions is lagging and continuing at a much slower rate. The sovereign debt crises in Europe and endeavours to overcome it continue to depress the development of the global economy. To date, these macroeconomic developments have not adversely impacted worldwide passenger traffic, but performance again varies widely from one region to another. In the cargo business – which traditionally serves as an early indicator for other aviation sectors – the consequences of slower economic growth are having a pronounced effect, depressing trade volumes and transport orders. The airlines in the Group have responded to indicators that the pace of growth will drop by significantly reducing their planned capacities. Capacity growth in the Passenger Airline Group was cut to 0.5 per cent in 2012. To date, Lufthansa Cargo has reduced available cargo capacities equivalent to two freighter planes.

Fuel prices have not fallen and remain high despite the modest growth prospects. The usual hedging mechanisms reduce the risk, but it is unlikely we will be able to compensate fully for the effect of extra costs by increasing income – in a market where competition remains tough – even with surcharges on ticket prices and freight rates.

As the measures of the SCORE programme become more concrete, negotiations to achieve a balance of interests are likely to become more fraught which may also lead to industrial action.

Altogether, and even considering the particular macroeconomic situation and all other known issues and circumstances, there are currently no identifiable developments which could endanger the Company's continued existence.

Supplementary report

Since 1 October 2012, no events of particular importance have occurred that would be expected to have a significant influence on the Group's net assets, financial and earnings position.

Forecast

GDP development

	2012*	2013*	2014*	2015*	2016*
in %
World	2.5	2.6	3.7	4.1	3.9
Europe	0.0	0.3	1.2	2.3	2.4
Germany	0.9	0.6	1.3	1.7	1.6
North America	2.1	1.8	2.9	3.3	2.9
South America	2.9	3.5	4.4	4.1	4.2
Asia/Pacific	4.8	4.6	5.7	6.0	5.6
China	7.4	7.6	8.4	8.2	7.9
Middle East	2.9	2.4	3.5	4.1	4.5
Africa	4.9	4.3	4.7	4.9	5.0

Source: Global Insight World Overview as of 16.10.2012. * Forecast.

Macroeconomic outlook The prospects for the global economy are becoming ever gloomier. Under these circumstances, growth is expected to remain subdued. The further development of the sovereign debt crises in the euro area and the effects these are having on demand in the real economy and on financial markets are vital elements in all scenarios. Despite an expansive monetary policy, the pace of growth in industrialised economies is expected to remain subdued. As the rate of growth slows in emerging markets, additional measures to stimulate the economy are to be expected here as well. Subdued growth of 2.5 per cent is therefore predicted for the full year.

Risk and opportunities report Supplementary report Forecast

No economic growth is projected for Europe in 2012, given the tangible effects of the debt crisis on the individual members of the euro zone. For the USA, the growth forecast has been raised slightly to 2.1 per cent. The outlook for the emerging markets in the Asia/Pacific region remains more favourable. However, some are suffering from weak demand from the euro area and the USA, which has already prompted a number of countries to respond to the slowdown with measures to stimulate the economy.

The pervasive economic uncertainty is also reflected in the oil price. The oil price is therefore expected to remain extremely volatile at the current high level.

In view of these challenges, the airlines have further intensified their efforts to find cost-savings. Capacity discipline has also improved. As a result, IATA has moderately raised its 2012 outlook for the industry as a whole, and is now predicting net profits of USD 4.1bn for the global airline industry in 2012. Compared with last year (USD 8.4bn), this still constitutes a steep fall in profits. At the same time, the European debt crisis is forecast to depress the earnings situation for airlines in Europe in 2012. IATA now expects a total net loss of USD 1.2bn.

Outlook for the Lufthansa Group We must currently assume that the uncertainty regarding the economic environment and market conditions will continue to affect the Lufthansa Group's course of business over the remainder of the year. There is also no sign at the moment that the cost pressure on the airborne companies will diminish. The unrelentingly high fuel price combined with the weak euro and falling income from fuel hedging will lead to massive additional fuel expenses for Lufthansa, which over the full year are currently estimated to be EUR 1.1bn higher than last year. Bookings are being made at much shorter notice and the outlook for the winter period has worsened for airfreight. There is no recovery in sight through to mid-2013. The Group's service segments will have a stabilising effect, however. Whether their earnings performance will be sufficient to make good the forecast decline in profits in the airborne companies is currently uncertain. The forecasts for the individual operating segments can be found in the corresponding chapters.

Overall, our assumption is still that Group revenue will increase and the operating profit will be in the mid three-digit million euro range. Even at this point, the ongoing volatility in the market environment makes it impossible to give a more precise forecast for the absolute level of profit. This earnings forecast still does not take into account the restructuring costs which we expect to incur in connection with the job cuts that are necessary as part of SCORE. Some of the restructuring measures have been delayed as discussions with the collective bargaining partners are still taking place. We therefore currently anticipate the effect on profit and loss in 2012 will be at EUR 100m at most.

Given this uncertainty about the level of the operating result, it is currently also impossible to give any indication of expected net profit or earnings per share.

We continue to uphold our ambition of taking a leading role in the airline industry in terms of profitability. The business segments are supported by the tried and tested risk management system and the Lufthansa Group's solid financial profile. These ensure that we retain adequate room for manoeuvre both for coping with acute operating challenges and for the Company's strategic development.

Despite forecast gross capital expenditure of EUR 2.5bn, we are striving to generate a free cash flow for the full year. The defined minimum liquidity requirement of EUR 2.3bn is exceeded comfortably by available liquid funds. The overwhelming share of the Lufthansa fleet is still owned and unencumbered; the figure for the Group fleet is currently 73 per cent. Net indebtedness will remain within acceptable bounds at the end of the year. The equity ratio also remains solid but below its target of 30 per cent. Gearing will stay in the target corridor of 40 to 60 per cent. We will continue our dividend policy as before, which states that a dividend payment is based on the operating profit, with a dividend ratio of 30 to 40 per cent. This is subject to the condition that Deutsche Lufthansa AG's net profit for the year as measured under HGB and the financial targets permit a payment.

The development of the Lufthansa Group follows the principles of value-based management. The performance indicator is cash value added (CVA, for more information, see Annual Report 2011 from p. 34 ). Lufthansa pursues the objective of generating value over the air traffic industry's economic cycle. Altogether, in the last decade we have achieved this goal with a CVA of EUR 2.3bn. For 2012, the level of forecast earnings means that a positive CVA cannot be assumed at present, however.

Information on the economic, product and other developments in the individual segments can be found in the respective chapters.

Consolidated income statement

January – September 2012

in €m	Jan.– Sept. 2012	Jan. – Sept. 2011	July – Sept. 2012	July – Sept. 2011
Traffic revenue	18,786	17,818	6,935	6,575
Other revenue	4,035	3,692	1,377	1,250
Total revenue	22,821	21,510	8,312	7,825
Changes in inventories and work performed by entity and capitalised	96	53	25	29
Other operating income	1,446	1,703	477	383
Cost of materials and services	–13,545	–12,393	–4,791	–4,365
Staff costs	–5,107	–4,943	–1,708	–1,634
Depreciation, amortisation and impairment	–1,345	–1,242	–450	–420
Other operating expenses	–3,726	–3,897	–1,176	–1,299
Profit / loss from operating activities	640	791	689	519
Result of equity investments accounted for using the equity method	23	–3	51	15
Result of other equity investments	54	65	–5	30
Interest income	119	140	39	44
Interest expenses	–360	–347	–119	–107
Other financial items	–20	–145	128	163
Financial result	–184	–290	94	145
Profit / loss before income taxes	456	501	783	664
Income taxes	–8	–59	–138	–136
Profit / loss from continuing operations	448	442	645	528
Profit/loss from discontinued operations	36	–143	0	–30
Profit / loss after income taxes	484	299	645	498
Profit/loss attributable to minority interests	–10	–11	–3	–4
Net profit / loss attributable to shareholders of Deutsche Lufthansa AG	474	288	642	494
Basic/diluted earnings per share in €	1.04	0.63	1.40	1.08
of which from continuing operations	0.96	0.94	1.40	1.15
of which from discontinued operations	0.08	–0.31	0.00	–0.07

Statement of comprehensive income

January – September 2012

in €m	Jan. – Sept. 2012	Jan. – Sept. 2011	July – Sept. 2012	July – Sept. 2011
Profit / loss after income taxes	484	299	645	498
Other comprehensive income
Differences from currency translation	29	29	–33	–7
Subsequent measurement of available-for-sale financial assets	229	–237	72	–172
Subsequent measurement of cash flow hedges	–277	–85	–164	–72
Other comprehensive income from investments accounted for using the equity method	2	2	0	0
Other expenses and income recognised directly in equity	–11	–6	–15	0
Income taxes on items in other comprehensive income	60	15	39	–10
Other comprehensive income after income taxes	32	–282	–101	–261
Total comprehensive income	516	17	544	237
Comprehensive income attributable to minority interests	–4	–4	6	–3
Comprehensive income attributable to shareholders of Deutsche Lufthansa AG	512	13	550	234

Consolidated balance sheet

as of 30 September 2012

Assets
in €m	30.9.2012	31.12.2011	30.9.2011
Intangible assets with an indefinite useful life*	1,196	1,191	1,545
Other intangible assets	367	384	337
Aircraft and reserve engines	11,973	11,592	11,775
Repairable spare parts for aircraft	869	840	855
Property, plant and other equipment	2,095	2,118	2,075
Investments accounted for using the equity method	389	394	377
Other equity investments	1,071	898	897
Non-current securities	20	134	140
Loans and receivables	491	616	623
Derivative financial instruments	298	343	235
Deferred charges and prepaid expenses	25	24	23
Effective income tax receivables	62	60	51
Deferred tax assets	34	33	39
Non-current assets	18,890	18,627	18,972
Inventories	651	620	622
Trade receivables and other receivables	4,083	3,437	4,139
Derivative financial instruments	255	414	347
Deferred charges and prepaid expenses	138	171	162
Effective income tax receivables	119	128	97
Securities	3,450	3,111	3,329
Cash and cash equivalents	1,448	887	1,021
Assets held for sale	204	686	136
Current assets	10,348	9,454	9,853

Total assets	29,238	28,081	28,825

* Including goodwill.

To our shareholders | Interim management report Interim financial statements | Further information

Shareholders' equity and liabilities

in €m	30.9.2012	31.12.2011	30.9.2011
Issued capital	1,176	1,172	1,172
Capital reserve	1,376	1,366	1,366
Retained earnings	3,678	3,800	3,800
Other neutral reserves	1,662	1,624	1,354
Net profit/loss	474	–13	288
Equity attributable to shareholders of Deutsche Lufthansa AG	8,366	7,949	7,980
Minority interests	68	95	84
Shareholders' equity	8,434	8,044	8,064
Pension provisions	2,089	2,165	2,544
Other provisions	561	578	590
Borrowings	5,903	5,808	5,330
Other financial liabilities	202	128	117
Advance payments received, deferred income and other non-financial liabilities	1,186	1,156	1,156
Derivative financial instruments	107	55	110
Deferred tax liabilities	244	364	315
Non-current provisions and liabilities	10,292	10,254	10,162
Other provisions	856	818	939
Borrowings	1,002	616	723
Trade payables and other financial liabilities	4,535	4,227	4,820
Liabilities from unused flight documents	2,966	2,359	2,929
Advance payments received, deferred income and other non-financial liabilities	978	939	1,066
Derivative financial instruments	17	37	44
Effective income tax obligations	97	71	78
Liabilities related to assets held for sale	61	716	0
Current provisions and liabilities	10,512	9,783	10,599
Total shareholders' equity and liabilities	29,238	28,081	28,825

Consolidated statement of changes in shareholders' equity

as of 30 September 2012

in €m	Issued capital	Capital reserve	Fair value measure ment of financial instru ments	Currency differ ences	Revalu ation reserve (due to business combi nations)	Other neutral reserves	Total other neutral reserves	Retained earnings	Net profit/ loss	Equity attrib utable to share holders of Deutsche Lufthansa AG	Minority interests	Total share holders' equity
As of 31.12.2010	1,172	1,366	856	241	193	339	1,629	2,944	1,131	8,242	98	8,340
Capital increases/reductions	–	–	–	–	–	–	–	–	–	–	–	–
Reclassifications	–	–	–	–	–	–	–	856	–856	–	–	–
Dividends to Lufthansa shareholders /minority interests	–	–	–	–	–	–	–	–	–275	–275	–18	–293
Consolidated net profit/loss attributable to Lufthansa shareholders /minority interests	–	–	–	–	–	–	–	–	288	288	11	299
Other expenses and income recognised directly in equity	–	–	–307	29	–	3	–275	–	–	–275	–7	–282
As of 30.9.2011	1,172	1,366	549	270	193	342	1,354	3,800	288	7,980	84	8,064
As of 31.12.2011	1,172	1,366	766	322	193	343	1,624	3,800	–13	7,949	95	8,044
Capital increases /reductions	4	10	–	–	–	–	–	–	–	14	–	14
Reclassifications	–	–	–	–	–	–	–	–127	127	–	–	–
Dividends to Lufthansa shareholders /minority interests	–	–	–	–	–	–	–	–	–114	–114	–16	–130
Transactions with minority interests	–	–	–	–	–	–	–	5	–	5	–15	–10
Consolidated net profit/loss attributable to Lufthansa shareholders /minority interests	–	–	–	–	–	–	–	–	474	474	10	484
Other expenses and income recognised directly in equity	–	–	12	29	–	–3	38	–	–	38	–6	32
As of 30.9.2012	1,176	1,376	778	351	193	340	1,662	3,678	474	8,366	68	8,434

Consolidated statement of changes in shareholders' equity Consolidated cash flow statement

Consolidated cash flow statement

January – September 2012

in €m	Jan. – Sept. 2012	Jan. – Sept. 3) 2011	July – Sept. 2012	July – Sept. 3) 2011
Cash and cash equivalents 1.1.1)	887	1,097	958	1,232
Net profit/loss before income taxes	456	501	783	664
Depreciation, amortisation and impairment losses on non-current assets (net of reversals)	1,350	1,258	448	417
Depreciation, amortisation and impairment losses on repairable spare parts for aircraft (net of reversals)	73	–4	37	–
Net proceeds on disposal of non-current assets	–22	–34	–6	–
Result of equity investments	–77	–62	–46	–45
Net interest	241	207	80	63
Income tax payments /reimbursements	–38	–228	29	–56
Measurement of financial derivatives through profit or loss	14	126	–125	–161
Change in working capital 2)	513	467	–434	–373
Cash flow from continuing operations	2,510	2,231	766	509
Cash flow from discontinued operations	–82	–110	–	–80
Cash flow from operating activities	2,428	2,121	766	429
Capital expenditure for property, plant and equipment and intangible assets	–1,860	–1,895	–488	–536
Capital expenditure for financial investments	–18	–78	–5	–20
Increase/decrease in repairable spare parts for aircraft	–100	22	–31	4
Proceeds from disposal of non-consolidated equity investments	7	2	2	1
Proceeds from disposal of consolidated equity investments	–176	–	–8	–
Cash outflows for acquisitions of non-consolidated equity investments	–	–23	–	–3
Cash outflows for acquisitions of consolidated equity investments	–	–	–	–
Proceeds from disposal of intangible assets, property, plant and equipment and other financial investments	368	344	93	57
Interest income	253	284	64	89
Dividends received	73	91	–2	38
Net cash from/used in investing activities	–1,453	–1,253	–375	–370
of which from discontinued operations	–138	1	–8	15
Purchase of securities /fund investments 4)	–804	–835	47	–199
Disposal of securities /fund investments	442	1,624	125	278
Net cash from/used in investing and cash management activities	–1,815	–464	–203	–291
of which from discontinued operations	–138	13	–8	19
Capital increase	–	–	–	–
Non-current borrowing	940	145	188	32
Repayment of non-current borrowing	–502	–1,181	–122	–227
Other financial debt	20	6	24	–2
Dividends paid	–130	–293	–4	–7
Interest paid	–385	–407	–150	–138
Net cash from/used in financing activities	–57	–1,730	–64	–342
of which from discontinued operations	–5	–40	–	–22
Net increase/decrease in cash and cash equivalents	556	–73	499	–204
Changes due to currency translation differences	5	–3	–9	–7
Cash and cash equivalents 30.9.4)	1,448	1,021	1,448	1,021
Securities	3,450	3,329	3,450	3,329
Total liquidity	4,898	4,350	4,898	4,350
Net increase/decrease in total liquidity	900	–860	–268	–534

1) Presented for the individual quarter, cash and cash equivalents as of 1 July.

2) Working capital consists of inventories, receivables, liabilities and provisions.

3) Previous year adjusted to current year's presentation.

4) In previous year including transfer to LH Pension Trust of EUR 168m.

Notes

1) Standards applied and changes in the group of consolidated companies

The consolidated financial statements of Deutsche Lufthansa AG and its subsidiaries have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), taking account of interpretations by the IFRS Interpretations Committee (IFRS IC) as applicable in the European Union (EU).

This interim report as of 30 September 2012 has been prepared in condensed form in accordance with IAS 34. In preparing the interim financial statements the standards and interpretations applicable as of 1 January 2012 have been applied. The standards mandatory for the first time as of 1 January 2012 did not have a significant effect on the Group's net assets, financial and earnings position. With the exception of the sale of bmi, the changes to the group of consolidated companies (see table) had no significant influence on the Group's net assets, financial and earnings position. The following section provides details of the result posted by bmi, including the proceeds from the company's deconsolidation.

Changes in the group of consolidated companies in the period 1.10.2011 to 30.9.2012

Name, registered office	Additions	Disposals	Reason
Passenger Airline Group segment
ALIP No. 4 Co., Ltd., Tokyo, Japan	26.10.11		Established
ALIP No. 6 Co., Ltd., Tokyo, Japan	26.10.11		Established
Gina Leasing Co. Ltd., Tokyo, Japan	16.12.11		Established
NBB Cologne Lease Co., Ltd., Tokyo, Japan	23.12.11		Established
Lufthansa Leasing Austria GmbH & Co. OG Nr. 15, Salzburg, Austria	10.8.12		Established
Lufthansa Leasing Austria GmbH & Co. OG Nr. 16, Salzburg, Austria	10.8.12		Established
Lufthansa Leasing Austria GmbH & Co. OG Nr. 17, Salzburg, Austria	10.8.12		Established
Lufthansa Leasing Austria GmbH & Co. OG Nr. 18, Salzburg, Austria	10.8.12		Established
Lufthansa Leasing Austria GmbH & Co. OG Nr. 19, Salzburg, Austria	10.8.12		Established
Lufthansa Leasing Austria GmbH & Co. OG Nr. 20, Salzburg, Austria	10.8.12		Established
Lufthansa Leasing Austria GmbH & Co. OG Nr. 21, Salzburg, Austria	10.8.12		Established
Heike LH8 Kumiai Ltd., Tokyo, Japan	28.3.12		Established
Empyrée S.A.S., Paris, France	25.4.12		Established
Gabriela Finance 2012 Limited, Dublin, Ireland	27.9.12		Established
AUA A320/A321 2001 Ltd., George Town, Cayman Islands		15.12.11	Liquidation
British Midland Airways Ltd., Donington Hall, United Kingdom		19.4.12	Disposal
British Midland Ltd., Donington Hall, United Kingdom		19.4.12	Disposal
Lauda Air Luftfahrt GmbH, Vienna, Austria		20.9.12	Merger
MRO segment
Lufthansa Technik Component Services LLC, Dallas, USA	1.1.12		Consolidated for the first time
Lufthansa Technik Logistik Services GmbH, Hamburg, Germany	1.1.12		Consolidated for the first time
Catering segment
Constance Food Group, Inc., New York, USA	1.11.11		Acquisition
LSG Sky Chefs Spain, S.A., Madrid, Spain	15.2.12		Established
LSG Sky Chefs Finland Oy, Vantaa, Finland	1.8.12		Acquisition of control
Other
Lufthansa Malta Blues LP, St. Julians, Malta	29.3.12		Established
Lufthansa Asset Management GmbH, Frankfurt am Main, Germany	27.4.12		Established
Lufthansa Leasing Austria 1. Beteiligungs GmbH, Salzburg, Austria	1.6.12		Increase of shareholding
Lufthansa AITH Beteiligungs GmbH, Cologne, Germany	23.8.12		Consolidated for the first time

2) Notes to the income statement, balance sheet, cash flow statement and segment reporting

Assets held for sale

in €m	Group 30.9.2012	Financial statements 31.12.2011	Group 30.9.2011
Assets
Aircraft and reserve engines	111	172	102
Financial assets	4	47	9
Other assets	89	467	25
Equity / liabilities associated with assets held for sale
Shareholders' equity	–	–	–
Liabilities	61	716	–

The British Midland Group represented a separate cash-generating unit within the Passenger Airline Group segment of the Lufthansa Group. It is therefore a separate line of business within the meaning of IFRS 5, to which clearly defined cash flows are attributed for operating and accounting purposes. As a result of the contract for the sale of British Midland Ltd. (bmi) to International Consolidated Airlines Group, S.A. (IAG) signed by Deutsche Lufthansa AG and IAG on 22 December 2011, bmi is to be presented in the Group's income statement as a discontinued operation in line with IFRS 5. bmi was deconsolidated when the sale transaction was completed on 19 April 2012. The proceeds from the discontinued operation shown in this interim report include the after-tax result recorded for bmi until its disposal and changes in the valuation or proceeds of disposal for the discontinued operation compared with the 2011 financial statements, which in this case are the proceeds of the aforementioned contractual agreement. The figures for the previous year have been adjusted in accordance with the presentation in the reporting period.

The following table shows the result of the discontinued operations at British Midland Group:

in €m	Jan. – Sept. 2012	Jan.– Sept. 2011
Income	237	665
Expenses	–330	–816
Current result from discontinued operations before taxes	–93	–151
Taxes on income and earnings for discontinued operations	13	8
Current result from discontinued operations after taxes	–80	–143
Valuation/disposal proceeds from discontinued operations	135	0
Taxes on valuation/disposal proceeds	–19	0
Valuation/disposal proceeds from discontinued operations after taxes	116	0
Result from discontinued operations	36	–143

The result from discontinued operations as of 30 September 2012 was mainly due to price adjustments made as a result of bmi's better than expected liquidity position.

Assets of EUR 576m and liabilities of EUR 690m attributable to bmi were shown separately in the balance sheet as of 31 December 2011 in accordance with IFRS 5. These were derecognised in conjunction with the deconsolidation completed on 19 April 2012.

Detailed comments on the income statement, the balance sheet, the cash flow statement and the segment reporting can also be found in the management report on p. 3 – 23 .

3) Seasonality

The Lufthansa Group's business is mainly exposed to seasonal effects via the Passenger Airline Group segment. As such, revenue in the first and fourth quarters is generally lower as people travel less, while higher revenue and operating profits are normally earned in the second and third quarters.

4) Contingencies and events after the balance sheet date

Contingent liabilities
in €m	30.9.2012	31.12.2011
From guarantees, bills of exchange and cheque guarantees	891	874
From warranty contracts	1,039	977
From providing collateral for third-party liabilities	43	35

Several provisions could not be made because an outflow of resources was not sufficiently probable. The potential financial effect of these provisions on the result would have been EUR 161m (yearend 2011: EUR 161m) for subsequent years. Contracts signed at the end of 2011 for the sale of three Canadair Regional Jet 200s resulted in profits up to 30 September 2012 of EUR 1m and cash inflows of EUR 6m. Signed contracts for the sale of two Boeing 737s, one Canadair Regional Jet 200 and four Avro RJ 85s are expected to give rise to cash inflows of a further EUR 27m by the end of 2012. In addition, signed contracts for the sale of five B737s are expected to yield profits of EUR 5m and cash receipts of EUR 73m in the financial year 2013. At the end of September 2012, there were order commitments of EUR 6.2bn for capital expenditure on property, plant and equipment and intangible assets. As of 31 December 2011, the order commitments came to EUR 7.7bn.

Please refer to the comments on p. 22 of the management report for events after the balance sheet date.

5) Earnings per share

		30.9.2012	30.9.2011
Basic earnings per share	€	1.04	0.63
Consolidated net profit/loss	€m	474	288
Weighted average number of shares		457,952,879	457,899,351

Diluted earnings per share	€	1.04	0.63
Consolidated net profit/loss	€m	474	288
+ interest expenses on the convertible bonds	€m	–	–
– current and deferred taxes	€m	–	–
Adjusted net profit/loss for the period	€m	474	288
Weighted average number of shares		457,957,863	458,235,755

6) Issued capital

A resolution passed at the Annual General Meeting on 24 April 2009 authorised the Executive Board until 23 April 2014, subject to approval by the Supervisory Board, to increase the Company's issued capital by up to EUR 25m by issuing new registered shares to employees for payment in cash. The new shares are to be offered for sale solely to employees of Deutsche Lufthansa AG and its affiliated companies. Existing shareholders' subscription rights are excluded. Under the terms of this authorisation, the Executive Board, with the approval of the Supervisory Board, decided on 19 September 2012 that a total of 1,402,869 new Deutsche Lufthansa AG shares are required to satisfy employees' claims under the profit-sharing agreement for 2011, and therefore passed a resolution to increase issued capital by EUR 3,591,344.64 from EUR 1,172,320,184.32 to EUR 1,175,911,528.96 and to set the issue price at EUR 9.65 per share. The sum of EUR 9,946,341.21 received over the face value of the shares when they were issued was transferred to the capital reserve.

Following a resolution of the Annual General Meeting held on 8 May 2012 the distributable profit of EUR 114m shown in the 2011 financial statements was paid out as dividends. This corresponds to a dividend of EUR 0.25 per share for the financial year 2011.

The convertible bonds still outstanding as of 31 December 2011, which entitled holders to convert them into 336,404 shares in Deutsche Lufthansa AG at a share price of EUR 19.86, were redeemed in full on 4 January 2012.

7) Segment reporting

Segment information by operating segment January – September 2012

in €m	Passenger Airline Group	Logistics	MRO	IT Services	Catering	Total reportable operating segments	Other	Reconciliation	Group
External revenue	17,336	1,985	1,847	187	1,466	22,821	–	–	22,821
of which traffic revenue	16,528	1,923	–	–	–	18,451	–	335	18,786
Inter-segment revenue	515	20	1,155	261	431	2,382	–	–2,382	–
Total revenue	17,851	2,005	3,002	448	1,897	25,203	–	–2,382	22,821
Other operating income	701	50	137	13	61	962	973	–530	1,405
Total operating income	18,552	2,055	3,139	461	1,958	26,165	973	–2,912	24,226
Operating expenses	18,207	1,989	2,912	448	1,885	25,441	1,079	–2,922	23,598
of which cost of materials and services	11,874	1,457	1,462	70	859	15,722	74	–2,251	13,545
of which staff costs	2,899	275	881	173	662	4,890	224	–3	5,111
of which depreciation and amortisation	1,054	42	75	27	48	1,246	32	2	1,280
of which other operating expenses	2,380	215	494	178	316	3,583	749	–670	3,662
Operating result 1)	345	66	227	13	73	724	–106	10	628
Other segment income	76	4	25	0*	1	106	26	5	137
Other segment expenses	85	0*	1	0*	0*	86	26	13	125
of which impairment losses	83	–	–	–	0*	83	–	–	83
Result of investments accounted for using the equity method	–12	9	14	–	11	22	1	–	23
Segment result 2)	324	79	265	13	85	766	–105	2	663
Other financial result									–207
Profit/loss before income taxes									456
Segment assets 3)	15,652	918	3,033	271	1,377	21,251	1,593	6,394	29,238
of which from investments accounted for using the equity method	48	55	191	–	89	383	6	–	389
Segment liabilities 4)	9,728	443	1,229	123	563	12,086	1,751	6,967	20,804
Segment capital expenditure 5)	1,552	134	89	18	42	1,835	14	29	1,878
of which on investments accounted for using the equity method	–	–	–	–	–	–	–	–	–
Employees on balance sheet date	55,578	4,623	20,397	2,764	30,660	114,022	4,066	–	118,088

* Rounded below EUR 1m.

1) See page 8 of the interim management report for reconciliation between operating result and profit from operating activities.

2) Profit from operating activities including result of investments measured at equity.

3) Intangible assets, property, plant and equipment, investments accounted for using the equity method, inventories, trade receivables

and other assets constitute assets. Under the heading "Group" all assets are shown.

4) All liabilities with the exception of financial debt, liabilities to Group companies, derivative financial instruments,

other deferred income and tax obligations. Under the heading "Group" all liabilities are shown.

5) Capital expenditure for intangible assets, property, plant and equipment, and investments accounted for using the equity method.

Segment information by operating segment January – September 2011

in €m	Passenger Airline Group1)	Logistics	MRO	IT Services	Catering	Total reportable operating segments	Other	Reconciliation	Group1)
External revenue	16,129	2,201	1,722	168	1,290	21,510	–	–	21,510
of which traffic revenue	15,379	2,124	–	–	–	17,503	–	315	17,818
Inter-segment revenue	557	19	1,326	268	420	2,590	–	–2,590	–
Total revenue	16,686	2,220	3,048	436	1,710	24,100	–	–2,590	21,510
Other operating income	834	54	161	19	42	1,110	954	–486	1,578
Total operating income	17,520	2,274	3,209	455	1,752	25,210	954	–3,076	23,088
Operating expenses	17,166	2,101	3,011	443	1,696	24,417	963	–3,016	22,364
of which cost of materials and services	10,783	1,548	1,558	59	764	14,712	71	–2,390	12,393
of which staff costs	2,889	259	809	171	595	4,723	205	–4	4,924
of which depreciation and amortisation	1,001	66	66	25	42	1,200	32	5	1,237
of which other
operating expenses	2,493	228	578	188	295	3,782	655	–627	3,810
Operating result 2)	354	173	198	12	56	793	–9	–60	724
Other segment income	102	8	21	0*	1	132	20	26	178
Other segment expenses	39	0*	2	3	3	47	46	18	111
of which impairment losses	13	0*	0*	–	0*	13	–	–	13
Result of investments accounted for using the equity method	–21	–8	15	–	10	–4	1	–	–3
Segment result 3)	396	173	232	9	64	874	–34	–52	788
Other financial result									–287
Profit/loss before income taxes									501
Segment assets 4)	15,912	749	3,000	226	1,238	21,125	1,701	5,999	28,825
of which from investments accounted for using the
equity method	92	47	161	–	72	372	6	–1	377
Segment liabilities 5)	10,499	445	1,285	201	504	12,934	1,645	6,182	20,761
Segment capital expenditure 6)	1,701	42	78	25	51	1,897	16	83	1,996
of which on investments accounted for using the equity method	–	10	1	–	–	11	0*	–	11
Employees on balance sheet date	55,312	4,612	19,889	2,846	29,687	112,346	3,953	3,811	120,110

* Rounded below EUR 1m.

1) Previous year's figures have been adjusted for the result from discontinued operations.

2) See page 8 of the interim management report for reconciliation between operating result and profit from operating activities.

3) Profit from operating activities including result of investments shown at equity.

4) Intangible assets, property, plant and equipment, investments accounted for using the equity method, inventories, trade receivables

and other assets constitute assets. Under the heading "Group" all assets are shown.

5) All liabilities with the exception of financial debt, liabilities to Group companies, derivative financial instruments,

other deferred income and tax obligations. Under the heading "Group" all liabilities are shown.

6) Capital expenditure for intangible assets, property, plant and equipment, and investments accounted for using the equity method.

Figures by region January –September 2012

in €m	Europe	thereof Germany	North America	thereof U.S.A.	Central and South America	Asia/Pacific	Middle East	Africa	Total
Traffic revenue*	11,983	5,201	2,682	2,279	549	2,667	569	336	18,786
Other operating revenue	1,842	640	903	773	126	814	199	151	4,035
Total revenue	13,825	5,841	3,585	3,052	675	3,481	768	487	22,821

* Traffic revenue is allocated according to the original location of sale.

Figures by region January –September 2011

in €m	Europe	thereof Germany	North America	thereof U.S.A.	Central and South America	Asia/Pacific	Middle East	Africa	Total
Traffic revenue*	11,538	4,949	2,466	2,157	426	2,559	489	340	17,818
Other operating revenue	1,708	656	826	706	116	706	187	149	3,692
Total revenue	13,246	5,605	3,292	2,863	542	3,265	676	489	21,510

* Traffic revenue is allocated according to the original location of sale.

8) Related party disclosures

As stated in "Note 49" to the consolidated financial statements for 2011 from p. 203 , the operating segments in the Lufthansa Group render numerous services to related parties within the scope of their ordinary business activities and also receive services from them. These extensive supply and service relationships take place unchanged on the basis of market prices. There have been no significant changes in comparison with the balance sheet date. The contractual relationships with the group of related parties described in "Note 50" from p. 205 of the 2011 consolidated financial statements also still exist unchanged, but are not of material significance for the Group.

Declaration by the legal representatives

We declare that to the best of our knowledge and according to the applicable accounting standards for interim reporting the consolidated interim financial statements give a true and fair view of the net assets, financial and earnings position of the Group and that the Group interim management report gives a true and fair view of the course of business, including the business result, and the situation of the Group, and suitably presents the opportunities and risks to its future development in the remainder of the financial year.

Executive Board, 30 October 2012

Christoph Franz Chairman of the Executive Board

Simone Menne Member of the Executive Board Chief Financial Officer

Stefan Lauer Member of the Executive Board Chief Officer Group Airlines and Corporate Human Resources

Carsten Spohr Member of the Executive Board Chief Officer Lufthansa German Airlines

Credits

Published by

Deutsche Lufthansa AG Von-Gablenz-Str. 2–6 50679 Cologne Germany

Entered in the Commercial Register of Cologne District Court under HRB 2168

Editorial staff

Frank Hülsmann (Editor) Anne Katrin Brodowski Andreas Hagenbring Christian Schmidt

Deutsche Lufthansa AG, Investor Relations

Concept, design and realisation

HGB Hamburger Geschäftsberichte GmbH & Co. KG, Hamburg, Germany

Printed by

Broermann Druck + Medien GmbH, Troisdorf, Germany. Printed on Circlesilk Premium White (100 per cent recycled paper bearing the EU Ecolabel. registration number FR/011/003)

Printed in Germany ISSN 1616-0258

Contact

Andreas Hagenbring +49 69 696–28001

Gregor Schleussner

+49 69 696–28012

Deutsche Lufthansa AG Investor Relations LAC, Airportring 60546 Frankfurt am Main Germany Phone: +49 69 696–28008 Fax: +49 69 696–90990 E-Mail: [email protected]

The Lufthansa 3rd Interim Report is a translation of the original German Lufthansa Zwischenbericht 3/2012. Please note that only the German version is legally binding.

You can order the Annual and Interim Reports in German or English via our website – www.lufthansa.com/investor-relations – or from the address above.

The latest financial information on the Internet: www.lufthansa.com/investor-relations

This Interim Report was produced using climateneutral printing. The greenhouse gases resulting from this process were offset by relevant climate protection activities.

Financial calendar 2013

14 March Press Conference and Analysts' Conference on 2012 results
2 May Release of Interim Report January March 2013
7 May Annual General Meeting in Cologne
2 Aug. Release of Interim Report January June 2013
31 Oct. Press Conference and Analysts' Conference on interim result January September 2013

Disclaimer in respect of forward-looking statements

Information published in the 3rd Interim Report 2012, with regard to the future development of the Lufthansa Group and its subsidiaries consists purely of forecasts and assessments and not of defi nitive historical facts. Its purpose is exclusively informational identifi ed by the use of such cautionary terms as "believe", "expect", "forecast", "intend", "project", "plan", "estimate" or "intend". These forward-looking statements are based on all discernible information, facts and expectations available at the time. They can, therefore, only claim validity up to the date of their publication.

Since forward-looking statements are by their nature subject to uncertainties and imponderable risk factors – such as changes in underlying economic conditions – and rest on assumptions that may not or divergently occur, it is possible that the Group's actual results and development may differ materially from those implied by the forecasts. Lufthansa makes a point of checking and updating the information it publishes. It cannot, however, assume any obligation to adapt forward-looking statements to accommodate events or developments that may occur at some later date. Accordingly, it neither expressly nor conclusively accepts liability, nor gives any guarantee for the actuality, accuracy and completeness of this data and information.

www.lufthansa.com www.lufthansa.com/investor-relations www.lufthansa.com/responsibility

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Deutsche Lufthansa AG — Interim / Quarterly Report 2012

109_10-q_2012-11-19_71243ef0-c273-4b55-ad2d-c05486dbf4ae.pdf

For a safe journey

Lufthansa Group overview

Key fi gures Lufthansa Group

Contents

Ladies and gentlemen, Financial calendar 2013

Lufthansa share

Interim management report

Economic environment and sector performance

GDP growth 2012 compared with previous year

Development of crude oil, kerosene and currency

Course of business

Earnings position

Traffic figures of the Lufthansa Group's airlines

Expenses

Reconciliation of results

Cash flow and capital expenditure

Assets and financial position

Calculation of net indebtedness and gearing

Group fleet – Number of commercial aircraft as of 30.9.2012

Passenger Airline Group business segment

Key figures Passenger Airline Group1) of which Lufthansa

Trends in traffic regions Passenger Airline Group*

Lufthansa Passenger Airlines

Other Group airlines

Austrian Airlines

Logistics business segment

Key figures Logistics

Trends in traffic regions Lufthansa Cargo

MRO business segment

Key figures MRO

IT Services business segment

Key figures IT Services

Catering business segment

Key figures Catering

Other

Risk and opportunities report

Supplementary report

Forecast

GDP development

Consolidated income statement

Statement of comprehensive income

Consolidated balance sheet

To our shareholders | Interim management report Interim financial statements | Further information

Consolidated statement of changes in shareholders' equity

Consolidated cash flow statement

Notes

1) Standards applied and changes in the group of consolidated companies

Changes in the group of consolidated companies in the period 1.10.2011 to 30.9.2012

2) Notes to the income statement, balance sheet, cash flow statement and segment reporting

Assets held for sale

3) Seasonality

4) Contingencies and events after the balance sheet date

5) Earnings per share

6) Issued capital

7) Segment reporting

Segment information by operating segment January – September 2011

Figures by region January –September 2012

8) Related party disclosures

Declaration by the legal representatives

Credits

Published by

Editorial staff

Concept, design and realisation

Printed by

Contact

Gregor Schleussner

Financial calendar 2013

Disclaimer in respect of forward-looking statements

More from Deutsche Lufthansa AG

Deutsche Lufthansa AG Interim / Quarterly Report 2012