lufthansa – first choice

Lufthansa First choice

Annual Report 2014

Kennzahlen Lufthansa Group 2014 2013 Vernderung

in % Umsatz und Ergebnis

Umsatzerlse Mio. 30011 30027 0,1

davon Verkehrserlse Mio. 24388 24568 0,7

Operatives Ergebnis Mio. 954 699 36,5

EBIT Mio. 459 892 48,5

EBITDA Mio. 1990 2670 25,5

Konzernergebnis Mio. 55 313 82,4

Kennzahlen zu Bilanz und Kapitalflussrechnung

Bilanzsumme Mio. 30474 29108 4,7

Eigenkapitalquote % 13,2 21,0 7,8P.

Nettokreditverschuldung Mio. 3418 1695 101,7

OperativerCashflow Mio. 1977 3290 39,9

Investitionen (brutto) Mio. 2777 2499 11,1

Rentabilitts- und Wertschaffungskennzahlen

Vergleichbare operative Marge1) % 3,7 3,0 0,7P.

EBITDA-Marge % 6,6 8,9 2,3P.

CVA Mio. 90 3133 97,1

Lufthansa Aktie

Jahresschlusskurs 13,83 15,42 10,3

Ergebnis pro Aktie 0,12 0,68 82,4

Dividendenvorschlag 0,45 100,0

Leistungsdaten 2)

Fluggste Tsd. 105988 104593 1,3

FrachtundPost Tsd. t 1 924 1965 2,1

Sitzladefaktor % 80,1 79,8 0,3P.

Fracht-Nutzladefaktor % 69,9 69,1 0,8P.

Flge Anzahl 1001975 1028260 2,6

Mitarbeiter

Mitarbeiter im Jahresdurchschnitt Anzahl 118973 117414 1,3

Mitarbeiter zum Stichtag Anzahl 118781 118285 0,4

1) Kennzahl zur Vergleichbarkeit mit anderen Fluggesellschaften: (operatives Ergebnis + Rckstellungsauflsung) / Umsatz.2) Vorjahreszahlen angepasst.

Verffentlichungstag:12.Mrz2015.

Key figures Lufthansa Group 2014 2013 3) Change

in % Revenue and result

Total revenue m 30,011 30,027 0.1

ofwhichtrafficrevenue m 24,388 24,568 0.7

Operating result m 954 699 36.5

EBIT m 459 892 48.5

EBITDA m 1,990 2,670 25.5

Netprofit/loss m 55 313 82.4

Key balance sheet and cash flow statement figures

Total assets m 30,474 29,108 4.7

Equity ratio % 13.2 21.0 7.8pts

Net indebtedness m 3,418 1,695 101.7

Cashflowfromoperatingactivities m 1,977 3,290 39.9

Capital expenditure (gross) m 2,777 2,499 11.1

Key profitability and value creation figures

Adjusted operating margin1) % 3.7 3.0 0.7pts

EBITDA margin % 6.6 8.9 2.3 pts

CVA m 90 3,133 97.1

Lufthansa share

Share price at year-end 13.83 15.42 10.3

Earnings per share 0.12 0.68 82.4

Suggested dividend per share 0.45 100.0

Traffic figures 2)

Passengers thousands 105,988 104,593 1.3

Freight and mail thousand tonnes 1,924 1,965 2.1

Passengerloadfactor % 80.1 79.8 0.3 pts

Cargo load factor % 69.9 69.1 0.8pts

Flights number 1,001,975 1,028,260 2.6

Employees

Average number of employees number 118,973 117,414 1.3

Employees as of 31.12. number 118,781 118,285 0.4

1) Performanceindicatortoenablecomparisonwithotherairlines:(operatingresult+write-backsofprovisions)/revenue.2) Previousyearsfigureshavebeenadjusted.3) PreviousyearsfigureshavebeenadjustedduetoIFRS11.

Dateofpublication:12March2015.

Lufthansa Group

TheLufthansaGroupistheworldsleadingaviationgroup.Itsport-folioofcompaniesconsistsofnetworkairlines,low-costcarriersandaviation service companies. Its combination of business segments makestheLufthansaGroupagloballyuniqueaviationgroupwhoseintegratedvaluechainnotonlyoffersfinancialsynergiesbutalsogivesitanedgeoveritscompetitorsintermsofknow-how.

Business segments 2014figures

30.0Revenue inEURbn

954Operatingresult in EUR m

1,977Operatingcashflowin EUR m

2,777Capital expenditurein EUR m

90 CashValueAdded in EUR m

7.4 Total Shareholder Return in per cent

Keyfigures

LufthansaGroup overview

Passenger Airline GroupThenetworkcarriersLufthansaPassengerAirlines,SWISSandAustrianAirlinesoperateaglobalroutenetworkbasedonamarketstrategyofprovidinghighquality,safety,punctuality,reliabilityandpro-fessionalservice.Theportfolioalsoincludesthelow-costairlineGermanwingsandtheequityinvest-mentsinthecarriersBrusselsAirlines,JetBlueandSunExpress.

LogisticsLufthansaCargoisthelogisticsspecialistwithintheLufthansaGroupandEuropesleadingcargoairline.AswellasmarketingthefreightcapacitiesofLufthansaPassengerAirlinesandAustrianAirlinespassengeraircraft,thecompanyoperatesitsownfleetofcargoaircraft,comprising16BoeingMD11FsandfourB777Fs.

MROLufthansaTechnikistheworldsleadingindepend-ent provider of maintenance, repair and overhaul services(MRO)forciviliancommercialaircraft.Theportfolioconsistsofavarietyofdifferentproductstructuresandcombinations,fromtherepairofindi-vidualcomponentstoconsultancyservicesandthefullyintegratedsupplyofentirefleets.

Catering TheLSGSkyChefsgroupistheglobalmarketleaderinairlinecateringandinallupstreamanddownstreamin-flightserviceprocesses.Itsportfoliocoversairlinecatering,on-boardserviceequip-mentandlogistics,in-flightservicemanagement,in-flightsalesandservicesatairports.Thecompanyalsooperatesinadjacentmarkets,suchasservicesfortrainsandsupplyingtheretailsector.

IT Services LufthansaSystemsoffersconsultancyandITser-vicesforselectedindustriesandisagloballeaderintheaviationsector.Itsportfolioincludesadvisingon,developingandimplementingbespokeindustrysolutionsalongwithoperatingbothsystemsandapplicationsatitsowndatacentres.FollowingthesaleofitsITInfrastructureunit,thisbusinessseg-mentistobedissolvedinthe2015financialyear.

Passenger Airline Group 2014 Change

in %

Revenue m 23,320 0.8 ofwhichtrafficrevenue m 21,564 0.8Operatingresult m 553 7.8Adjustedoperatingmargin % 2.9 0.2ptsSegmentresult m 726 12.2EBITDA* m 1,697 20.9CVA m 37 78.9Segmentcapitalexpenditure m 2,248 22.1Employeesasof31.12. number 54,960 0.6

Logistics

2014 Change

in %

Revenue m 2,435 0.3 ofwhichtrafficrevenue m 2,364 0.6Operatingresult m 100 26.6Adjustedoperatingmargin % 4.3 0.7ptsSegmentresult m 120 34.8EBITDA* m 187 39.6CVA m 49 Segmentcapitalexpenditure m 214 32.7Employeesasof31.12. number 4,663 0.1

MRO

2014 Change

in %

Revenue m 4,337 3.8 of which external revenue m 2,673 3.0Operatingresult m 392 3.0Adjustedoperatingmargin % 9.4 1.5ptsSegmentresult m 429 6.1EBITDA* m 438 26.3CVA m 245 35.0Segmentcapitalexpenditure m 118 13.2Employeesasof31.12. number 20,079 0.8

Catering

2014 Change

in %

Revenue m 2,633 4.7 of which external revenue m 2,022 5.9Operatingresult m 100 4.8Adjustedoperatingmargin % 3.8 0.5ptsSegmentresult m 95 22.8EBITDA* m 148 12.9CVA m 7 Segmentcapitalexpenditure m 140 27.3Employeesasof31.12. number 32,843 1.7

IT Services

2014 Change

in %

Revenue m 646 0.9 of which external revenue m 270 1.9Operatingresult m 37 2.8Adjustedoperatingmargin % 6.0 0.4ptsSegmentresult m 12 EBITDA* m 85 CVA m 170 Segmentcapitalexpenditure m 18 10.0Employeesasof31.12. number 2,721 0.1

* WithoutGroup-internalprofitandlosstransfer/investmentincome.

Contents

1 Lufthansa First choice 2 Letter from the Executive Board 5 Thefieldsofaction 6 Successfulmeasures2014 8 Interview with the CEO 11 Plannedmeasures2015

12 To our shareholders 12 ReportoftheSupervisoryBoard 15 Lufthansashare 18 Annual review

20 Combined management report 22 Principles of the Group

22 BusinessactivitiesandGroupstructure 24 Goalsandstrategies 29 Managementsystemandsupervision 33 Legalandregulatoryfactors 35 Researchanddevelopment

36 Economic report 36 Macroeconomicsituation 38 Sectordevelopments 40 Courseofbusiness 46 Earningsposition 52 Assetsandfinancialposition 59 OverallstatementbytheExecutiveBoard

60 Business segment Passenger Airline Group

72 Business segment Logistics

77 Business segment MRO

81 Business segment Catering

85 Business segment IT Services

89 Other

91 Employees

96 Corporate responsibility

99 Supplementary report

100 Risk and opportunities report

120 Forecast

127 Corporate Governance

142 Notestotheindividualfinancialstatements for Deutsche Lufthansa AG (HGB)

147 Consolidatedfinancialstatements

234 Further information 234 Ten-year overview238 Glossary240 Cedits/contact Financial calendar 2015/2016 and Disclaimer

Lufthansa First choice

TheLufthansaGroupistheworldsleadingaviationgroup. Weoperateoneofthebiggestaircraftfleetsintheworld,andaremarketleaderwithourservicecompaniesintheirrespectiveindustries.Thisset-upisunique. Itprovidesuswithbothaknowledge-basedadvantageinmanyaspectsofourbusinessaswellasareassuringfinancialstabilitythatenablesustoactentre-preneuriallyandtocreatevaluethrougheconomiccycles.However,reinventingourselvesregularlyisnotonlyanabilitybutalsoanecessityinordertodevelopourbusinesssuccessfully.Wedosobyfocusingonsevenfieldsofactioninourstrategicprogramme7to1OurWayForward:

Customercentricityandqualityfocus Newconceptsforgrowth Innovationanddigitalisation Effectiveandleanorganisation Cultureandleadership Value-basedsteering Constantlyimprovingefficiency

Sevenfieldsofaction,onegoal: Lufthansa First choice for customers, employees, shareholders and partners.

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Dr Bettina Volkens Executive Board member Chief Officer Corporate Human Resources and Legal Affairs

Born in 1963, lawyer, Executive Board member since 1 July 2013, at Lufthansa since 2012

Harry Hohmeister Executive Board member Chief Officer Group Airlines, Logistics and IT

Born in 1964, diploma in commercial air transport, Executive Board member since 1July 2013, at Lufthansa since 1985

Karl Ulrich Garnadt Executive Board member Chief Executive Officer Lufthansa German Airlines

Born in 1957, diploma in commercial air transport, Executive Board member since 1 May 2014, at Lufthansa since 1979

Simone Menne Executive Board member Chief Officer Finances and Aviation Services

Born in 1960, business administration graduate, Executive Board member since 1 July 2012, at Lufthansa since 1989

Carsten Spohr Chairman of the Executive Board and CEO

Born in 1966, industrial engineer, Chairman of the Executive Board and CEO since 1 May 2014, Executive Board member since 1 January 2011, at Lufthansa since 1994

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Ladies and gentlemen,

2014wasaneventfulyearfortheLufthansaGroup.AmongthemajorchallengesfortheentireindustrywerethepoliticalcrisesinUkraineandtheMiddleEast,aswellastheadverseeffectsonglobalaviation oftheEbolaepidemicinWestAfrica.Inadditiontothis,wefacedenormouscompetitivepressurefromlow-costcarriersinEuropeaswellasfromstate-ownedGulfairlinesonroutestoAsia.Andfinally,the large-scalestrikesbyourownpilotshadasignificantimpactonourbusinessperformancelastyear.

Wearethereforeverypleasedthatwestillmanagedtoend2014withanewrecord:neverbeforeasmanypassengershaveflownwithourairlines;106millionpassengersplacedtheirtrustinuslastyear.Ourqualityoffensiveattheairlinesisalreadypayingoff.Ourotherbusinesssegmentsalsoincreasedtheircustomernumbers.LufthansaTechnik,forexample,servedatotalof3,290aircraftonanexclusivebasisforalmost800customersworldwide,whichwasanimpressive17percentincreaseonthepreviousyear.

Overall,thepastfinancialyearthereforefeaturedsomepositivedevelopmentsdespitethemajorchallenges.Amongthelesspositiveeventswereundoubtedlythestrikes.Alreadyinspring,theGroupwassignificantlyaffectedbytheindustrialactiontakenbystaffoutsideofourCompany,beforethepilotsatLufthansaPassen-gerAirlines,GermanwingsandLufthansaCargowentonstrikeforthreefulldaysinApril.Atthispoint,ourairlineswerealsofacedwithanincreasinglyseveredownturnindemand.ThistrendwasexacerbatedbythestrikesbythepilotsunionVereinigungCockpit.ByJune,thesharpfallinyieldsforcedustoadjustourprofitforecastforthefullyear.Intotal,therewere15daysofstrikesandmorethan8,600flightcancellationsin2014,whichhadanegativeimpactbothonourcustomersconfidenceinourreliabilityaswellasonourearnings,particularlythoseofLufthansaPassengerAirlines.Althoughthelatterstillendedtheyearwithapositiveoperatingresult,thefigurewasnonethelessdownonthepreviousyeardespitethestrongtailwindfrom the new depreciation method for aircraft.

Ourotherairlinesreportedabetterperformance.SWISSwasabletoincreaseitsearningsfurtherinachallengingenvironment.AustrianAirlinesrecordedanotherpositiveoperatingresult.However,ofevengreaterimportanceforthefutureofthiscompanywasthepivotalagreementwithitslabourunionpartnersconcerningsustainableandmorecompetitivestructuresamajorsuccessforallsides.LufthansaCargoincreaseditsearningsdespiteadditionalburdens.Asinthepreviousyears,LufthansaTechniksearningswereexcellentandonceagainmadeasubstantialcontributiontowardsstabilisingtheGroupsresultfor theperiod.EarningsatLSGSkyChefswereonlyslightlylowerthaninthepreviousyearandwereclearlypositive.LufthansaSystemswasabletokeepitsearningsstable.

Intheend,theLufthansaGrouprecordedanoperatingresultofEUR954m,anincreaseofaround36percentonthepreviousyear.However,theaccountingeffectsoftheaforementionedchangetothedepreciationmethodforaircraftandreserveengineswerealsoincludedhere.Withouttheseeffects,ouroperatingresultwouldhavebeendownonthepreviousyear.Wethereforecannotbesatisfiedwiththisfinancialresult,althoughwecertainlycanwiththewayinwhichweachievedit,givenalltheadversitywefaced.Inthemeantimewehavelaidthefoundationsforsustainableimprovementsinourearnings.Inourstrategicpro-gramme7to1OurWayForward,wehavedefinedsevenfieldsofactionthatshouldenableustoliveuptoourclaimtobeLufthansaFirstchoice,thesloganofthisyearsannualreport.ThisisthebasisforthesuccessfulfurtherdevelopmentoftheLufthansaGroup.Overthecourseoftheyear,wehavealreadylaidessentialfoundationsandachievedthefirstinterimobjectives,suchassellingtheInfrastructureunitofourITServicesbusinesssegmentandcarving-outMiles&Moreintoaseparatelegalentity.

Lufthansa First choice Letter from the Executive Board

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Setting-upthenewEurowingsasaEuropeanlow-costairlineandourpartnershipwiththeChinesecarrier AirChinaalsorepresentmajorstepsonthejourneytowardsourgoalofsafeguardingthefutureofourCompanyandmakingLufthansathebenchmarkintheaviationsectoronceagain.

Withtheintroductionofnewfinancialperformanceindicatorsforthe2015financialyearwehavealsoincreasedtransparencyintheinternalandexternalassessmentoftheCompanysperformance.Starting inthenewfinancialyear,wewillbereportingtoyou,ourshareholders,onthecommercialperformance oftheLufthansaGroupusingthekeyperformanceindicatorsEACC(EarningsAfterCostofCapital)andAdjustedEBIT(adjustedearningsbeforeinterestandtaxes).Inconjunctionwiththeintroductionofthenew performanceindicators,wehavealsomodernisedourdividendpolicy.Itallowsforconsistentlyhighdividendamounts.ToavoidpayingoutdividendsfromthesubstanceoftheCompany,however,wewillcontinuetoproposeadividendonlyifitiscoveredbyasufficientnetresultfortheyearintheindividualfinancialstate-mentsforDeutscheLufthansaAGpreparedinaccordancewiththeGermanCommercialCode(HGB).

Unfortunately,thiswasnotthecaseinthe2014financialyear.ThenegativechangeinmarketvaluesofourfuelhedgeshadanadverseimpactontheindividualfinancialstatementsinaccordancewithHGB,asdidincreasingpensionliabilitiesduetofallinginterestratesandnegativeeffectsfromtheoutsourcingofLufthansaSystemsInfrastructureunit.Asaresult,andinlinewithourdividendpolicy,nodividendwillbepaidforthe2014financialyear.

Withtheyearoflayingfoundationsbehindus,wenowhavetheyearofimplementationaheadofus,sothatwecanachievetheimprovementinearningsthatissourgentlyneeded.Wewant,forinstance,tosuccess-fullytakethedecisivefinalstepwithLufthansaPassengerAirlinesonourjourneytowardsbecomingthefirst,privatefive-starairlineinthewesternhemisphere.Thiswillunderscoreourclaimtobeapremiumairlineandallowustoofferourcustomersthebestandlatestproductsinallbookingclasses.Inparallel,wewillconcentrateonfurtherexpandingEurowingsandcreatetheconditionsforfurtherprofitablegrowthforourcommerciallysuccessfulbusinesssegments.Inourothercompanies,wewillincreaseprofitabilityandmakethechangesnecessarytodothis.Wewillalsopushaheadwiththefurtherorganisationaldevel-opmentoftheLufthansaGroupbymodernisingstructuresandsystematicallyutilisingsynergieswherever itmakesoperationalandstrategicsensetodoso.

Forthe2015financialyear,weareforecastinganAdjustedEBITofmorethanEUR1,5bn.However,ourearningswillalsodependonthedevelopmentoftheoilprice,theeuroexchangerateagainsttheUSdollarandtheSwissfranc,andtheperformanceofthePassengerAirlineGroupsaverageyields.ThefurthercourseofthewagenegotiationsatLufthansaPassengerAirlineswillalsoplayarolehere.

Dearshareholders,on1May2014ItookoverfromChristophFranzasChairmanoftheExecutiveBoard andCEOofDeutscheLufthansaAG.TogetherwithmycolleaguesontheExecutiveBoard,KarlUlrichGarnadt,HarryHohmeister,SimoneMenneandDrBettinaVolkens,weareworkingonleadingyour Companytowardsafuturecharacterisedbysustainablesuccess:LufthansaFirstchoiceforcustomers,employees,shareholdersandbusinesspartners:thatisoursharedobjective.

Wearewellpositionedandopentochange,andwehavethebestemployeeswhowanttoachievethisobjectivetogetherwithus.Thankyouforyourcontinuedtrustandyoursupport.

Frankfurt, March 2015

CarstenSpohrChairmanoftheExecutiveBoardandCEOofDeutscheLufthansaAG

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02 / Newconcepts forgrowth

WearefocusedonthecontinuousprofitabledevelopmentofourGroupandourcompanies.

03 / Innovation and digitalization

Withnewsolutionsandbusinessmodels,wearemakingtheCompanyviableforthefuture,bothinternallyandexternally.

07 / Constantly improvingefficiency

Apermanentfocusondevelopingandimplementingearningimprovement potentialsisacontinuousmanagementtaskforus.

06 / Value-based steering

Withtherightchoiceoffinancialperformanceindicators,wearemakingsurethatourfinancialresourcesareallocatedinthebestway.

05 / Culture and leadership

Motivationandpassionforaviationarewhatsetsusapart.

04 / Effective and lean organisation

Wearemanagingactivelyandlean ourdiversegroupofcompanies.

01 / Customer centricity and quality focus

Onbehalfofourcustomers,wearereachingforthestarsonboardandontheground.

Whatwehavealreadyachievedin2014...

Lufthansa First choice Thefieldsofactionofourstrategicprogramme 7to1OurWayForward

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Ageoffleet

Financial stability

Market position

Customer

Shareholder Employee


TheLufthansaGroupfostersitsactivitiesintheareaofinnovation.Aninnovationfundtosupportinnovativesolutionsandtechnologiesislaunched,andaninnova-tionhubisestablishedinBerlintostrengthenlinkswithrelevantstart-upcompanies.

InnovatorAwardsaregiventoemployeesfordevelop-ingandimplementinginnovativeideasandprojectsforthefirsttime.


Theoptimisationofadministrativeareasmakesprogress.TheplannedtransferofvariousadministrativefunctionstothenewlyestablishedLufthansaGlobalBusinessServicesisimplementedsuccessfully.Administrativeprocessescontinuetoconsistofthesamehighquality,butarenowalsostandardisedandconductedefficientlyandcost- effectivelyfromasinglesourcefortheentireLufthansaGroup.Thismakestheindividualbusinesssegmentsleaner in the future.

AustrianAirlinesandemployeerepresentativesagreeonnewstructuresthatareviableforthefuture.


ThenewFirstandBusinessClassisintroducedonmorethan100LufthansaPassengerAirlineslong-haulaircraft.Thismeansthattheentirelong-haulfleetofthePassengerAirlineGroupwillsoonhavefullyflatbedsinBusinessClass.TheinstallationofPremiumEconomyClassstartsatLufthansaPassengerAirlines.

AcrossalloftheGroupsairlinesandcompanies,initiativestoimprovequalitymakegoodprogress.

02 /Newconceptsforgrowth

LufthansaPassengerAirlinestransfersitsconnectionsoutsideoftheFrankfurtandMunichhubstoGerman-wingsasplanned.ThedecisiontoestablishthenewEurowingspavesthewayforthesystematicfurtherexpansionofthisbusiness.

Infuture,LufthansaTechnikwillalsocarryoutmaintenanceworkonaircraftatamaintenancefacilityinPuertoRico,theconstructionofwhichbeganin2014.LSGSkyChefsdrivesitsgrowthbymeansofpartnershipsinairlinecater-ingaswellasinadjacentmarkets.Miles&Moreissuc-cessfullycarvedoutinordertoutiliseupgrowthpotential.

Lufthansa First choice SuccessfulmeasuresonourOurWayForwardin2014

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07 / Constantly improvingefficiency

TheSCOREprogrammeseestheimplementationofmorethan2,700projects,withagrossearningscontri-butionofEUR974min2014,thussuccessfullyhelpingtostabiliseearnings.Forthecomingyears,too,thereareplentyoffurthermeasurestoimproveearningsinthepipeline.

AnagreementtooutsourcetheITInfrastructureunit oftheITServicessegmentissigned.


ManagersattheLufthansaGroupuseuniformprinciplesthroughouttheentireCompanytomanagetheirstaffandareas.ThenewlydevelopedLeadershipPrinciplesDrivingBusiness,LeadingChange,CreatingSpirit,Fostering TalentandMasteringComplexityareputinevenmorefocusacrossalloftheGroupscompanies.

06 / Valued-based steering

TheLufthansaGroupadoptsanewsystemoffinancialkeyperformanceindicatorstomanagetheCompany. TheintroductionofEACCandEBITaskeyperformanceindicatorsreducesthecomplexityofreportingsystemsandmakesinternalandexternalreportingmorecloselyinterconnected.Thenewkeyperformanceindicatorsaremoretransparentandeasiertouse,whichshouldhelp toembedvalue-basedmanagementevenmorefirmlywithintheCompany.

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Our most important priority, apart from safety, is our future viability.

Carsten Spohr, Chairman of the Executive Board and CEO

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Lufthansa First choiceCEO in interview

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Mr Spohr, Lufthansa First choice is the slogan ofthisannualreportforthe2014financialyear.What makes the Lufthansa Group the company of choice?

Beingthefirstchoiceprimarilymeansenjoyingahighleveloftrust.Iamverygratefulthatwehavenotlostthistrustamongourcustomers,ouremployeesandourshareholders,inspiteofalltheturbulenceoverthepastyear.

OuremployeesthroughouttheCompanyputeveryeffortintoimpressingourcustomerseverysingledayanddemonstratingthattheLufthansaGroupistherightchoiceonthegroundandonboardouraircraft,atourairlinesandatourservicecompanies.However,wedonotjustwanttobethefirstchoiceforourcustomers.Ouraimisalsotoremainthefirstchoiceforouremployeesand,lastbutnotleast,inthecapitalmarketforourshareholders.

Trustisavaluableasset.HowcantheLufthansaGroup succeed in maintaining this trust despite the challenging operating environment?

Byactinginasustainablemanner.Itismydutyandmyunderstandingofmanagingthecompanysuccess-fullylong-termtobalancetheinterestsofstakeholdersandtodosowithsustainableprospectsandviablestructuresforeveryone.Itisnocoincidencethatthetrianglewhichrepresentsthebalancebetweentheseinterestsservesasanimportantbasisforhowweact.

What do you consider to be the key tothisdifficulttask?

Weareaservicecompany.Ourfocusisonservingtheneedsofour106millionpassengersandourcustomersinourservicecompaniesasbestwecan.Toachievethis,wehavetomeetthehighestqualitystandardsinourindustryandofferthebestproductsandexcellentservicesineachsector.

That means the customer is the priority for you? Yes.Evenifthisisnotanendinitself.Wecanonlygen-

erateadequatereturnsforourshareholdersandensurethatouremployeeshavejobswithprospectsifwehavesatisfiedandloyalcustomers.Howweactisthereforeguidedbythequestion:whatisthecustomerwillingtopayforandhowdoweproducethisattherequiredqualityeverysingleday?

Whatisyouranswertothisquestion? Wealwaysstartbyfocusingonthemostimportant

thing:thesafetyofourpassengersandcrews.Beyondthis,ouraimistoachievethehighestlevelofproductqualityinallareasoftheCompany.TheLufthansaGroupisanetworkofpremiumserviceprovidersintheirrespec-tivesectors.Thisiswhywehavealsodeclared2015tobetheyearofthenewLufthansapremiumquality.

What does that mean exactly? WewillhavethelatestproductinFirst,Businessand

EconomyClassinallofLufthansaPassengerAirlineslong-haulaircraft.Bytheendoftheyear,thiswillalso betrueforthenewPremiumEconomyClass.We wanttobethefirstEuropeanairlinetoreachthehighlyregardedfive-starlevel.ItgoeswithoutsayingthatwealsoofferoutstandingserviceandconsistentproductsatSWISSandAustrianAirlines,aswellasnewlounges atourZurichandViennahubs.Ourhighlevelofinvest-mentisnowdeliveringclearbenefitsforourcustomersand,asaresultofmorestablerevenue,forourshare-holders,too.

The Lufthansa Group is not just made up of airlines, however,butalsoincludesservicecompaniessuchas Lufthansa Technik and LSG Sky Chefs.

Thatiscorrect.AlloftheservicecompaniesintheLufthansaGroupareeconomicallysuccessfulmarketleadersintheirrespectiveindustries.

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Forthisveryreason,Ibelievethatthetwobiggestofthesecompanies,LufthansaTechnikandLSGSkyChefs,haveexcellentopportunitiestoincreasetheirmarketpresenceandexpandtheirproductrange.However,othersuccessfulcompanieslikeAirPlusandMiles&Morealsohaveenormouspotentialtobuildontheirsuccesses.

Are the service companies in the Lufthansa Group doing better than the airlines?

Inrecentyears,wehaveseenthatatleastthefinancialperformanceofourservicecompanieshasbeenmorestablethanthatofourairlines.Thisisalsobecausetheyhaveexpandedintoothercountriesasmarketshavedeveloped.Ourservicecompaniesarethereforesome-timesabletooperatemorecost-effectivelythanourair-lines,whicharetiedtotheirhomemarkets.

Why is that so? Germany,AustriaandSwitzerlandarenolow-wage

countries,aseveryoneknows.Fortheairlinesinparti-cular,itisthereforeespeciallyimportanttoprovideout-standingqualityandtocounteractcostdisadvantages.However,itgoeswithoutsayingthatourgoalistoprovidethebestpossiblequalityinalloftheLufthansaGroupscompaniesatalltimes.

Taking all of that into consideration, howdoyouviewtheLufthansaGroup?

Itcannotbestressedenough:theLufthansaGroupistheworldsleadingaviationgrouptoday.Weareveryproudofthisparticularlyinouranniversaryyearof2015whenwelookbackatourmodestrelaunch60yearsago.Today,weoperateoneofthebiggestaircraftfleetsintheworld,andourservicecompaniesaremarketlead-ersintheirrespectiveindustries.Thisset-upisuniqueandgivesusarealcompetitiveadvantage.Itprovidesuswithbothaknowledge-basedadvantageinmanyaspectsofourbusinessaswellasaleveloffinancialstabilitythatenablesustoactentrepreneurallyandtocreatevalue,irrespectiveofeconomiccycles.However,wecanandwehavetoregularlyquestionthisstrategy.

Whatarethespecificchallengesfacingyou? Whilewearebuildingonthestrengthsofourservice

companies,weneedtoopenlyidentifyandaddresspotentialsforimprovementinourpassengerbusiness.Thatisthecoreofourprogramme7to1OurWayForward.Ourexcessivelyhighcostsareamajorweak-

ness.Gettingahandleonthemisabigchallengeandhasthepotentialtocauseconflictasweexperienced inthepastfinancialyear,particularlyinournegotiationswiththepilotsunionVereinigungCockpit.Atthesametime,wemustincreaseourrevenuethroughourqualityoffensiveandmakeourairlinesroutenetworksevenmoreattractivethroughnewpartnerships,forexample,suchasmostrecentlywithAirChina.

InEuropeand,indeed,worldwide,point-to-pointtrafficisgrowing.However,thebusinessmodelsoftheLufthansaGroupsairlinesarefocused primarily on hubs.

OurgrowingbusinessindirecttrafficoutsideourhubswillplayacentralandindispensableroleinthefuturedevelopmentoftheLufthansaGroup.TrafficvolumesindirecttrafficwithinEuropearealreadytodayseveraltimesgreaterthantravelviathehubs.Thismarketoffersusattractiveopportunities,andthatiswhywewanttofurtherbuildonthesuccessofourWingsairlines.

Someninemonthsago,yououtlinedsevennewstrategicfieldsofaction.Arethesestrategicfieldsalready being implemented?

Overthelastfewmonths,wehavelaidsomeessentialfoundationsforourfurtherdevelopment.Now,weareconcentratingonimplementation.Thisalsoappliestothefirst-timeapplicationofthenewvalue-basedmanage-mentindicatorsthatweoutlinedinDecember2014.OuraimnowistodeterminewhichstructureswillenabletheLufthansaGrouptobesuccessfulinthefuture.

Will SCORE be part of these structures? WithSCORE,wehavebeenimplementingavery

successfulearningsimprovementprogrammeforthreeyears.Withouttheresultingsuccesses,wewouldnothavebeenabletoovercomethechallengesofthemarketaseffectively.Theprocessimprovementsthatwedevelopedarenowgraduallybecomingpartofourroutine.YoucouldsaythatSCOREwillneverfinish. OurfocusnowisincreasinglyontheorganisationalstructureoftheGroup.Iamcertainthatthisareain particularwillseeanumberofexcitingdevelopments inthecourseoftheyear.

Lookingahead,howdoyoumeasure your success in the future?

Byeveryyearbeingbetterthantheyearbefore.Ourmostimportantpriority,apartfromsafety,isourfutureviability.

10

Measures 2015

Lufthansa First choice Nextsteps


Five-starquality:LufthansaPassengerAirlinesfinalisestheintroductionofthenewFirst,BusinessandPremium EconomyClasswithadditionalservicesonboardand ontheground.

02/Newconceptsforgrowth

ThenewEurowings:profitablegrowthindirecttraffic within Europe and all over the world.


Lookingtothefuture:implementingofinitialinnovation potentialwithexternalpartners.


Leaner,moreagile,moreefficient:theLufthansaGroup exploitsitssynergypotentialandpoolsitsorganisationalstrengths.


Structuresforquickerdecision-makingandconsent implementation:cultureisakeyelementofsuccess.

06 / Value-based steering

Newkeyperformanceindicators:value-basedmanagement oftheCompanyusingEACCandEBITforthefirsttime.

07/Constantlyimprovingefficiency

Continuousimprovement:changeremainsalong-termactivityoftheCompanyevenaftertheSCOREprogrammeends.

11

Ladies and gentlemen,

Inthefinancialyear2014,theSupervisoryBoardagaincarriedoutthedutiesconferredonitbylaw,theCompanysArticlesofAssociationanditsinternalregulations:toappointthemembersoftheExecutiveBoard,tosupervisetheirworkandtoadvisethem.TheExecutiveBoardsreportingobligationsandthelistoftransac-tionsrequiringauthorisationaredefinedbylawandarespecifiedininternalregulations.

TheExecutiveBoardprovideduswithfull,timelyinformationonthecompetitiveenvironment,plannedCompanypolicyaswellasallsignificantstrategicandoperatingdecisions.

LargeritemsofprojectedcapitalexpenditureandequityinvestmentsaswellasplannedGroupfinancingactivitieswerecoordinatedwithus.AsChairmanoftheSupervisoryBoardIreadtheminutesoftheExecutiveBoardmeetingsanddiscussedthecurrentcourseofbusinesswiththeChiefExecutiveOfficeronanongoingbasis.

In2014,theSupervisoryBoardheldfivemeetings,on7February,12March,28April,17Septemberand3December.InDecemberwecarriedouttheregularreviewoftheefficiencyofourworkingpracticesandtogetherwiththeExecutiveBoardissuedanupdateddeclarationofcompliancewiththeGermanCorporateGovernanceCode,whichcanbefoundontheLufthansaGroupwebsiteatwww.lufthansagroup.com/declaration-of-compliance. There were no

conflictsofinterestrequiringdisclosurein2014.NomemberoftheSupervisoryBoardwaspresentatfewerthanhalfthemeetingsoftheSupervisoryBoardortheSupervisoryBoardcommittees.

OurmeetingsfocusedontheeconomicdevelopmentofDeutscheLufthansaAGanditsassociatedcompanies.SpecialattentionwaspaidtotheconsiderabledisruptioncausedbymultiplepilotsstrikesatLufthansaPassengerAirlines,LufthansaCargoandGermanwings,theprogressmadeontheSCOREprogrammeandthelegalandcollectivebargainingeffectsoftransferringflightoper-ationsfromAustrianAirlinestoTyroleanAirwaysTirolerLuftfahrtGmbHinthefinancialyear2012.InSeptemberweheldintensivetalkswiththeExecutiveBoardonthepackageofstrategicmeasuresdubbed7to1OurWayForward,whichisintendedtocreatemorecompetitivestructuresinatotalofsevenactionareasinordertoensurethefutureviabilityoftheLufthansaGroupandenablefurthergrowthintheairlineindustry.

Weapprovedthepurchaseofatotalof25aircraftfromtheAirbusA320familyfortheGroupsairlinesandthewetleasesforuptosevenlong-haulaircraftfromtheA330familyforthenewEurowings.Wealsogaveourapprovaltothecarve-outoftheMiles&MoredivisionfromDeutscheLufthansaAGintoMiles&MoreInterna-tionalGmbHandtheplannedbreak-upofLufthansaSystemsAGandsubsequentsaleofitsITInfrastructureunittotheIBMGroup.

WolfgangMayrhuber,ChairmanoftheSupervisoryBoard

12 Lufthansa Annual Report 2014

http://www.lufthansagroup.com/en/responsibility.html

TheExecutiveBoardinformedusregularlyofchangesintheshareholderstructure,theperformanceoftheLufthansashare,transactionswithderivativefinancialinstruments,andallocationstoandreturnsfromtheLufthansapensionfund.ThedisclosuresrequiredbytakeoverlawmadeinthecombinedmanagementreportbytheExecutiveBoardinaccordancewithSections289Paragraph4and315Paragraph4oftheGermanCommercialCoderequirenofurthercomment.

On7February2014andattherecommendationoftheSteeringCommittee,whichmetfivetimesin2014,theSupervisoryBoardappointedMrCarstenSpohrtosucceedDrChristophFranzasChairmanoftheExecutiveBoardandCEOwitheffectfrom1May2014.AsmentionedintheSupervisoryBoardsreportforthepreviousyear,DrFranzendedhisworkfortheExecutiveBoard inagreementwiththeCompanyon30April2014.Atthemeetingheldon12March2014,theSupervisoryBoardfollowedanotherrecommendationfromtheSteeringCommitteeandappointedMrKarlUlrichGarnadt,previouslyChairmanoftheExecutiveBoardandCEOofLufthansaCargoAG,totakeMrSpohrsseatontheExecutiveBoardofDeutscheLufthansaAG,withresponsibilityforLufthansaPassengerAirlines.Theappointmentwasmade fortheperiodfrom1May2014to30April2017.

On17September2014,againfollowingtherecommendationoftheSteeringCommittee,theSupervisoryBoardappointedMsSimoneMenneasamemberoftheExecutiveBoardofDeutscheLufthansaAGwithresponsibilityforFinancesandAviationServicesuntil30June2020.

TheArbitrationCommitteeandtheNominationCommitteewerenotconvenedinthereportingyear.

TheAuditCommitteemetfivetimesin2014,fourofthemeetingsinthepresenceoftheauditors.TheAuditCommitteediscussedtheinterimreportswiththeCFObeforetheirpublication.Thecom-mitteealsodealtwiththesupervisionofaccountingprocessesandtheeffectivenessoftheinternalcontrolsystem,riskmanage-mentandinternalauditingsystems.Themembersreceivedregularreportsonriskmanagement,complianceandtheworkoftheGroupsinternalauditdepartment.Theylookedindetailatthenewconceptforvalue-basedmanagementtobeestablishedin2015andthechangestotheLufthansaGroupsdividendpolicy.

InformationonthecommitteesworkwasprovidedatthebeginningofthesubsequentSupervisoryBoardmeeting.

DrJrgenHambrechtlefttheSupervisoryBoardatthecloseoftheAnnualGeneralMeetingon29April2014.HewasamemberoftheSupervisoryBoardforsixyearsandwascloselyinvolvedinpreparingimportantstaffdecisionsasamemberofboththeSteeringCommitteeandtheNominationCommittee.TheSuper-visoryBoardthankshimforhissenseofresponsibility,hispragma-tismandthegreatcommitmenthebroughttohiswork.

MsMonikaRibarwaselectedtotheSupervisoryBoardtosucceedDrHambrechtattheAnnualGeneralMeetingon29April2014.Onthesameday,theSupervisoryBoardelectedMsRibarasamemberoftheAuditCommittee,whereshesucceedsDrKarl-LudwigKley,whotookoverthepostsontheSteeringCommittee,ArbitrationCommitteeandNominationCommitteeleftvacantbythedepartureofDrHambrecht.DrWernerBrandtwaselectedasChair of the Audit Committee.

MsIlonaRitterlefttheSupervisoryBoardasof31December2014.Shewasreplacedasof1January2015bythesubstitutememberMrJan-WillemMarquardt,whowaselectedbythestaffoftheLufthansaGroup.TheSupervisoryBoardthanksMsRitterforherresponsiblecontributiontoitswork.MrJan-WillemMarquardtwaselectedtosucceedherontheAuditCommitteewitheffectfrom 11 March 2015.

WeappointedPricewaterhouseCoopersAktiengesellschaftWirt-schaftsprfungsgesellschaft,Dusseldorf,whowereelectedasauditorsforDeutscheLufthansaAGandtheGroupattheAnnualGeneralMeeting2014,toauditthefinancialstatementsandtheconsolidatedfinancialstatements,thecombinedmanagementreportandthesystemfortheearlyidentificationofrisks.TheAuditCommitteeacknowledgedthedeclarationofindependencepro-videdbyPricewaterhouseCoopersanddiscussedthemaintopicsoftheaudit.Nopotentialgroundsfordisqualifyingtheauditors ordoubtingtheirimpartialitycametolightduringthecourseof the audit.

13Lufthansa Annual Report 2014

To our shareholders

ReportoftheSupervisoryBoard

TheconsolidatedfinancialstatementshavebeenpreparedinaccordancewiththeInternationalFinancialReportingStandards(IFRS)issuedbytheInternationalAccountingStandardsBoard(IASB),takingaccountofinterpretationsbytheIFRSInterpretationsCommitteeasapplicableintheEuropeanUnion(EU).TheauditorsauditedtheannualfinancialstatementsandconsolidatedfinancialstatementsofDeutscheLufthansaAGandthecombinedmanage-mentreportasof31December2014inaccordancewiththelegalrequirements,andhadnoreservationstomake.Theyfurthercon-firmedthatthesystemfortheearlyidentificationofrisksestablishedbytheExecutiveBoardissuitablefortheearlyidentificationofdevelopmentswhichcouldendangertheCompanyscontinuedexistence.Duringtheiraudittheauditorsdidnotcomeacrossanyfactsincontradictionwiththedeclarationofcompliance.

InearlyMarch2015,theAuditCommitteediscussedtheauditreportsindetailwiththeCFOinthepresenceofthetwoauditorswhohadsignedthefinancialstatements.AttheSupervisoryBoardaccountsmeetingtheauditorsreportedontheirauditfindingsandansweredquestions.WeexaminedindetailthefinancialstatementsandtheconsolidatedfinancialstatementsofDeutscheLufthansaAGaswellasthecombinedmanagementreportandhadnoobjectionstomake.WeagreewiththeExecutiveBoardsproposalnottopayadividendandtobalancethenetlossaccordingtoHGBforthefinancialyear2014bymeansofatransferfromthecapitalreserve.Thefinancialstatementsandtheconsolidatedfinancialstatementswereapproved.The2014annualfinancialstatementsofDeutscheLufthansaAGaspreparedbytheExecutiveBoardhavetherebybeenadopted.

InJanuary2015,DrBernhardWalter,theformerChairmanoftheExecutiveBoardofDresdnerBank,passedawayattheageof72,asdidMrJanStenberg,theformerCEOofSASScandinavian

Airlines,attheageof75.DrWalterwasamemberofourSupervi-soryBoardfrom1998to2000andwascloselyinvolvedinthetimelyandfar-sightedappointmentofExecutiveBoardmembersasamemberoftheSteeringCommittee.MrStenbergwasamemberofourSupervisoryBoardfrom1998to2003andcon-tributedhisinternationalexperienceasCEOofoneoftheStarAlliancesfivefoundingmemberstotheworkoftheBoard.Wewillalwaysrememberbothgentlemenwithrespect.

Theyear2014wasmarkedbyvariousfactorsthataffectedtheresultsoftheLufthansaGroup.Performancewasseverelyhin-deredbystrikesthroughouttheyear.Theywereaccompaniedbyintensecompetitionandtheensuingdeclineinaverageyieldsfromthepassengerbusiness.TheExecutiveBoardhadtoaltertheoriginalforecastfortheoperatingresultasearlyasJunefromEUR1.3to1.5bntoaroundEUR1bn.Fuelpricemovementsinthelastquarterhadapositiveimpactonearnings,althoughpoliti-calinstabilityalsoaffecteddemand.Underthesecircumstancestheresultfinallyreportedforthefinancialyear2014canbeconsid-eredacceptable.

TheSupervisoryBoardexpresslythankstheExecutiveBoardandtheemployeesoftheLufthansaGroupfortheirworkunderverydifficultconditionsandtheirgreatpersonalcommitment.

Cologne,11March2015

FortheSupervisoryBoardWolfgangMayrhuber,Chairman


Lufthansa share

Totalshareholderreturnof7.4percentin2014./ Nodividendforthefinancial

year2014./ Majorityofanalystsrecommendholdingtheshare./ Shareholderstructure

changesslightly./ Comprehensive,transparentcommunicationwithcapitalmarketsto

continue. / TheLufthansashareispartofmajorshareindices.

Lufthansa share loses value in 2014ThepriceoftheLufthansasharefellby10.3percentinfinancialyear2014.IncludingthedividendpaymentofEUR0.45,theshare-holdersoftheLufthansaGroupreceivedatotalreturnof7.4percentin2014.Thesharepricewasveryvolatileoverthecourseoftheyear.Inthefirstquarterthesharepriceroseby23.3percentbeforefallingby17.5percentinthesecondquarterfollowingtheadjustmenttotheearningsforecastfor2014and2015.Asaresult,atthemiddleoftheyearthesharewasonlytradingat1.7percentaboveitsopeningpricefortheyear.Inthethirdquarter,theLufthansasharedeclinedby20.2percentduetouncertaintysur-roundingthedevelopmentofpricecompetitionandthestrikesbythepilotsunionVereinigungCockpit.Theselosseswerepartlyrecoupedinthefourthquarter(+10.6percent)supportedbytheconsiderablefallintheoilprice.

Thesharereacheditshighpricefortheyearon4April2014atEUR20.26,followedbythelowfortheyearon10October2014atEUR10.88.TheshareclosedtheyearatEUR13.83.ThismeantthattheshareunderperformedincomparisontotheDAXindex(+2.7percent).

On11December2014,theLufthansaGrouppresenteditsnewconceptforvalue-basedmanagement.Asofthefinancialyear2015,theCVAistobereplacedasthekeymanagementmetricbyEarningsAfterCostofCapital(EACC).

TheLufthansaGroupalsopresentedanewdividendpolicytoitsshareholdersonthesameday.Changesinthedepreciationpolicyforaircraftandengines,alongwiththeswitchinfinancialmanagementindicatorsinthenewfinancialyear,madeitneces-sarytorevisethepolicy.Inlinewiththenewdividendpolicy,adividendpaymentof10to25percentofEBITshouldbemadefromfinancialyear2015(payoutin2016),ifandinsofarasapositiveHGBresultallowsforthis.Thismeansthattheabsoluteamountofthedividendwillbeinthesamerangeasunderthepreviouspolicy.ShareholderswillcontinuetoparticipatedirectlyintheCompanyssuccess.

TheLufthansashare:keyfigures

2014 2013 2012 2011 2010 Year-endshareprice 13.83 15.42 14.24 9.19 16.36

Highestshareprice 20.26 17.10 14.47 17.39 17.77

Lowestshareprice 10.88 12.93 8.02 8.35 10.34

Numberofshares millions 462.8 461.1 459.9 457.9 457.9

Marketcapitalisation(atyear-end) bn 6.4 7.1 6.5 4.2 7.5

Earningspershare 0.12 0.68 2.68 0.03 2.47

Cashflowfromoperatingactivitiespershare 4.27 7.15 6.20 5.14 6.71

Dividendpershare 0.45 0.25 0.6

Dividendyield(gross) % 2.9 2.7 3.7

Dividend m 207.5 114.5 274.8

Totalshareholderreturn % 7.4 8.3 57.7 40.2 39.2


To our shareholders

Lufthansashare

DuetoDeutscheLufthansaAGsconsiderablynegativeHGBresult,nodividendispaidforthe2014financialyear.ApayouttotheshareholderswoulddirectlyreducetheCompanysequity.Inacaselikethis,theusualdividendpolicystipulatesthatnopaymentbemade,inordernottoerodetheCompanysfinancialsubstance.

Furtherinformationontheperformanceindicatorsforvalue-basedmanagementandonthenewdividendpolicyisprovidedinthechapter Financial strategy on p.28.

Analysts give Lufthansa share a balanced valuationAmajorityofanalystsrecommendholdingtheLufthansashare.Outof27equitiesanalysts,14recommendedtheshareasaholdatyear-end2014.Sevenconsideredtheshareasabuyandsixasasell.

Slightchangesinforeignshareownership and structure of major shareholdersInordertoprotectinternationalairtrafficrightsanditsoperatinglicence,theGermanAviationComplianceDocumentationAct(LuftNaSiG)requiresLufthansatoprovideevidencethatamajorityofitssharesareheldbyGermanshareholders.Forthisreason,allLufthansasharesareregisteredshareswithtransferrestrictions.

Accordingtotheshareholdersregister,attheendof2014,Germaninvestorsheld65.5percentoftheshares(previousyear:62.4percent).Thesecondlargestgroupwith10.5percentwassharehold-ersfromtheUSA(previousyear:11.5percent).InvestorsfromtheUKaccountedfor5.2percentofsharecapital(previousyear:3.6percent),followedbySaudiArabiawith3.5percent(previousyear:2.2percent)andtheCaymanIslandswith3.3percent(previousyear:3.9percent).TheshareholderstructurethereforeeasilycomplieswiththerelevantprovisionsoftheGermanAviationComplianceDocumentationAct(LuftNaSiG).

Analystsrecommendations*asof31.12.2014

7 14 6

* Targetprice:EUR13.97,averageof27analysts. Range:fromEUR9.60uptoEUR22.20.

Buy Hold Sell

Shareholder structure by nationalityasof31.12.2014in%

Other 9.0Luxembourg 3.0

USA 10.5

UnitedKingdom 5.2

SaudiArabia 3.5

Germany 65.5

CaymanIslands 3.3

Freefloat:100%

Performance of the Lufthansa share, indexedasof31.12.2013,comparedwiththeDAXandcompetitors,in%

Jan2014

Dec2014

Aug Sept NovOctFeb Mar Apr May Jun Jul60708090

100110120130140150160 160

150

140

130

120

110

100

90

80

70

60

DAX Lufthansa InternationalAirlinesGroup Air France-KLM easyJet Ryanair Air Berlin


ThefreefloatforLufthansasharesis100.0percent,asperthedefinitionofDeutscheBrse.Asofthereportingdate60.3percent(previousyear:63.5percent)oftheshareswereheldbyinstitutionalinvestorsand39.7percentbyprivateindividuals(previousyear:36.5percent).

ThestructureofthemaininstitutionalshareholdersintheLufthansaGroupchangedoverthecourseoftheyear.BlackRock,Inc.reduceditsstaketo2.96percent(previousyear:5.43percent).TempletonGlobalAdvisorsremainedthelargestshareholderintheLufthansaGroupatyear-end2014,itsholdingunchangedat5.00percent.InthirdplaceisTheCapitalGroupCompanies,amajorinvestorsince2012,with2.95percent(previousyear:4.75percent).

Allthetransactionsrequiringdisclosureandpublishedduringthefinancialyear2014,aswellasthequarterlyupdatesontheshare-holderstructure,areshownonthewebsite www.lufthansagroup.com/investor-relations.

LufthansaGrouppursuesintensivedialoguewithinvestorsAsinprioryears,theLufthansaGroupagainprovidedallitsshare-holderswithtimely,comprehensiveandobjectiveinformationin2014.ContinuousdialoguewithinvestorsisavitalconditionfortheirconfidenceintheCompany.In2014andinadditiontothequarterlymeetings,theExecutiveBoardandtheInvestorRelationsteamheld26roadshowsand13investorconferencestoinforminstitutionalinvestorsaboutcurrentdevelopmentsattheLufthansaGroup.Thisinvolvedmorethan300one-on-oneandgroupmeet-ings.SpecialattentionwasalsopaidtoGermanprivateinvestors.Ourinvestorrelationsrepresentativeswereavailabletoanswerquestionsatsixspecialforumsorganisedforprivateinvestors.Thiscommunicationsplatformistobeextendedin2015.Theser-viceforprivateshareholdersalsoincludestheshareholderinfor-mationletter,whichwasagainpublishedtwicein2014andcanbeviewedontheInvestorRelationswebsite.ThesitealsocontainsthefinancialcalendarandthedatesofalltheconferencesandshareholdereventsthattheLufthansaGroupwillbeattending.

Inadditiontotheannualandinterimreports,themonthlyInvestorInfoprovidesthecapitalmarketswiththelatesttrafficfiguresfortheairbornecompaniesandothercurrentnewsfromtheLufthansaGroup.Onrequest,creditorsandbondholdersarealsosentourCreditorInfoseveraltimesayear,whichcontainsinformationofrelevancetothem.Allthepublications,financialreports,presenta-tions,backgroundinformation,speechesandthelatestnewsarealsoavailableat www.lufthansagroup.com/investor-relations.

Included in the DAX and other important indices AsamemberoftheDAX,theLufthansaGroupisoneofthe30largestpubliclylistedcompaniesinGermany.Atyear-endthesharehadaweightingof0.79percentintheleadingGermanindex.WithamarketcapitalisationofEUR6.4bntheLufthansaGroupcamein32ndplace(previousyear:28th)intherankingofpubliclylistedcompaniesinGermanybymarketcapitalisation.IntermsofstockmarketturnovertheLufthansasharemovedupthreeplacestonumber19.Tradingvolumefortheshareamountedto1,289,605,341sharesin2014;thisrepresentsatransactionvolumeofEUR19.3bn(previousyear:EUR12.7bn).

TheLufthansashareisincludedinmanyinternationalshareindi-ces.Furthermore,itfeaturesintheFTSE4Good,EthibelandECPIsustainabilityindices.

InadditiontoitsstockmarketlistingsinGermany,investorsrestrictedtoassetsdenominatedinUSdollarscangainexposuretotheLufthansaGroupviatheSponsoredAmericanDepositoryReceiptProgram(ADR).Since2011,theLufthansaADRshavealsobeenregisteredonthestandardisedtradingandinformationplatformOTCQX.

TheLufthansashare:data

ISIN International SecurityIdentificationNumber

DE0008232125

Securityidentificationnumber 823212

Germanstockexchangecode LHA

Stockexchanges Frankfurt,Stuttgart,Munich,Hannover,Dusseldorf,Berlin,Hamburg,Xetra

Primesector Transport&Logistics

Industry Airlines

Indices (Selection)

DAX,DivDAXPriceIndex,EUROSTOXXIndex,BloombergWorldAirlinesIndex,S&PEurope350Index,FTSEEurofirstSupersectorIndex


To our shareholders

Lufthansashare

http://investor-relations.lufthansagroup.com/en.htmlhttp://investor-relations.lufthansagroup.com/en.htmlhttp://investor-relations.lufthansagroup.com/en.html

Annualreview Keyeventsin2014

MarchThenewPremiumEconomyClassfromLufthansaPassengerAirlinesispresentedtotradevisitorsattheITBon5March2014.IthasbeenbookablesinceMay2014andhasbeeninitiallyavailableontheBoeing747-8sinceNovember2014.Thenewseats,whichgivecustomersupto50percentmoreroomthanintheEconomyClass,aretobeinstalledsuccessivelyintheentirelong-haulfleetbyautumn2015.

AprilStrikesbythepilotsunionVereinigungCockpitatLufthansaPassengerAirlines,GermanwingsandLufthansaCargodepresstheoperatingresultfor2014byatotalofEUR222m.Thefirststriketakesplacefrom 2to4April2014.Itwasprecededbylong,intensetalksandnegotiationsaboutpayandthefutureshapeofthepilotstransitionalretirementbenefits.Overthecourseoftheyear,thereareatotalof15strikedaysand morethan8,600flightcancellations.

MayCarsten SpohrbecomesChairman of the Executive Board and CEO of Deutsche Lufthansa AGasof1May2014.KarlUlrichGarnadtissimultaneouslyappointedtotheExecutiveBoardtosucceedCarstenSpohrasChiefOfficerLufthansaGermanAirlines.

JuneOn 11 June 2014, the Lufthansa Groupadjustsitsearnings forecastduetothenon-recurringeffectsofstrikes,thedepreciationoftheVenezuelanbolivarandrevenuebelowexpectationsinthepassengerandcargobusinesses.TheExecutiveBoardforecastsareportedoperatingresultofEUR1.0bnforthefinancialyear2014.ThisdoesnotincludethecostsofstrikeactionfromJuly2014onwards.

JulyInJuly2014,theLufthansa Group and Air Chinasignamemorandumtoprepareacommercial joint ven-turebetweenthetwocompaniesforthePassengerAirlineGroup.Thefirstphaseofthisnewpartnershipagree-mentcomesintoeffectwiththewinterflighttimetableattheendofOctober2014.

On9July2014,theChairmanoftheExecutiveBoardandCEOofDeutscheLufthansaAG,CarstenSpohr,givesapublicpresentationofthestrategicprogramme7to1OurWayForward on the planned development of theLufthansaGroup.

On15July2014,theFanhansaSiegerfliegeraircraftlandsatBerlin-TegelairportwiththeGermanfootballworldchampions.TheBoeing747-8onflightnumberLH2014firstcompletesaflypastforthefansassembledinthecentreofBerlin,whogivetheworldchampionsagreatreception.


SeptemberAllNipponAirways(ANA),Japansbiggestairline,andLufthansa Cargostartastrategic joint venture inSeptember2014onroutesbetweenJapanandEurope.Thisisthefirstjointventureofitskindintheglobalairfreightindustry.Customersbenefitfromawiderrangeofservicesandmoreflightconnections.

InSeptember2014,theMiles & More bonus businessiscarvedoutintoanindependent unit,thewhollyownedLufthansaGermanAirlinessubsidiaryMiles&MoreGmbH.Throughgreaterindependence,Europesleadingcustomerloyaltyprogrammeisintendedtobecomeevenmoresuccessfulandattractiveinthisnew legalstructure.

OctoberInOctober,SWISSannouncesitsintentiontomakecomprehensiveinvestmentsintheyearsaheadinmodernaircraft,attractivedestinationsandproductaspartofitsNextGenerationAirlineofSwitzerlandstrategy.AnewcabinlayoutisintroducedontheEuropeanAirbusfleetinlateNovember2014andnew,freshin-flightcateringproductsfromSwitzerlandareofferedinEconomyClass.

Austrian AirlinesanditssubsidiaryTyroleanAirwayssignonacompletelynewcollectiveagreement with the labourunionpartnerson31October2014.ThisnewGroupcollectiveagreementcoverssome900pilotsand2,300flightattendantsatthecompanyfrom1December2014.Itgovernsthefuturesalariesandpensions,work-inghoursandcareerdevelopmentforcockpitandcabincrews.

TheLufthansaGroupandLufthansaSystemsAGtakeajointdecisiontoalter the strategic direction of Lufthansa Systems,tosplitthecompanyintothreepartsandtodissolvethestrategicITServicessegment. TheITInfrastructureunitisacquiredbyIBMin2015aspartofalong-termoutsourcingagreement.

NovemberInmid-November2014,thegroundbreakingceremonytakesplaceforthenewLufthansaTechnikoverhaulcentre in Puerto Rico.ItsignalsafurtherboosttoLufthansaTechnikspresenceontheAmericancontinentandaddstothecompanysmaintenancecapacitiesforaircraftintheAirbusA320family.

WiththeopeningofanewsiteinSofia,LSGSkyChefsisnowalsopresentinBulgaria.ThejointventurewithBulgariaAirGroupandAlphaGroup/dnataisoneofsixnewsitesandthreenewjointventuresenteredintobyLSGSkyChefsin2014.

DecemberTheLufthansaGroupsetsanewpassenger recordinthe2014financialyear.TheairlinesinthePassengerAirlineGroupcarried106 millionpassengers,thehighestfigureinthehistoryoftheLufthansaGroup.Revenueseat-kilometresalsoreachanewhighof214.6billion.

InDecember2014,theSupervisoryBoardgivesitsapprovaltofurtherelementsoftheWingsconceptadoptedbytheExecutiveBoard.UnderthebrandnameofEurowings,from2015theEurowingsairlineandotherairlinesinEuropeareplanningtowinnewcustomerswitharangeofshort-andlong-hauldirectflightsofferingqualityatlowcost.


To our shareholders

Annual review

Combined management report

60 Business segment Passenger Airline Group72 Business segment Logistics77 Business segment MRO81 Business segment Catering85 Business segment IT Services89 Other

91 Employees96 Corporate responsibility

99 Supplementary report

100 Risk and opportunities report

100 Riskmanagementsystem 103 Risksandopportunitiesatanindividuallevel 117 Overallassessmentofopportunitiesandrisks

bythemanagement 118 Descriptionoftheaccounting-related

internalcontrolandriskmanagement systeminaccordancewithSection289 Paragraph5andSection315Paragraph2 No.5HGB

120 Forecast

120 Macroeconomic outlook 121 Sector outlook 122 Changesinbusinessandorganisation 122 OutlookfortheLufthansaGroup 126 Overallstatementontheexpected

developmentoftheLufthansaGroup

127 Corporate Governance

127SupervisoryBoardandExecutiveBoard 128SupervisoryBoardCommittees 129Mandates 130Corporategovernancereport 132 Remuneration report 140Disclosuresinaccordancewith

Section289Paragraph4HGBand Section315Paragraph4HGB

142 Notestotheindividualfinancialstatements forDeutscheLufthansaAG(HGB)

21 Standards applied and changes in the group of consolidated companies

22 Principles of the Group

22 Business activities and Group structure 24 Goals and strategies

24 Groupstrategy 28 Financialstrategy

29 Management system and supervision 33 Legal and regulatory factors 35 Research and development

36 Economic report

36 Macroeconomic situation 38 Sector developments 40 Course of business

40 Overviewofthecourseofbusiness 40 Significantevents 42 SCOREprogramme 43 Targetachievement

46 Earnings position

46 Revenue and income 47 Expenses 49 Earningsdevelopment 51 NetresultfortheyearaccordingtoHGB

52 Assetsandfinancialposition

52 Capital expenditure 53 Cashflow 54 Assets 57 Fleet 57 Financing

59 Overall statement by the Executive Board

Totheextentthatthecombinedmanagementreportreferstosourcesotherthanthecombinedmanagementreportortheconsolidatedfinancialstatements (e.g.internetsites),thecontentsofthesesourcesarenotpartofthecombinedmanagementreportandaresolelyforinformationalpurposes.

Standards applied and changes in the group of consolidated companies

Theconsolidatedfinancialstatementsfor2014andthequarterlyreportsareprepared

inaccordancewiththeInternationalFinancialReportingStandards(IFRS)andthe

interpretationsoftheIFRSInterpretationsCommitteeasapplicableintheEuropean

Union(EU).ThecommerciallawprovisionsofSection315aParagraph1ofthe

GermanCommercialCode(HGB)havealsobeenapplied.Allmandatorystandards

andinterpretationsforthe2014financialyearwererespected.Changesinthe

reportingstandardresultedfromIFRS11JointArrangements,whichwasobliga-

toryforthefirsttimeasof1January2014.Inaccordancewiththisstandard,the

equityinvestmentinAerologicGmbHisnolongeraccountedforusingtheequity

method.Instead,theincomeandexpenses,andassetsandliabilitiesofthiscompany

arenowrecognisedintheconsolidatedfinancialstatementsonaproratabasis.

Thefiguresforthepreviousyearhavebeenadjustedaccordingly.Thischangehad

nomaterialeffectin2014orthepreviousyear.Theotherstandardsandinterpreta-

tionsmandatoryforthefirsttimeasof1January2014alsohadnosignificanteffect

ontheGroupsnetassets,financialandearningspositionasshowninthepresent

annualreport.MoreinformationcanbefoundintheNotestotheconsolidatedfinan-

cialstatementson p.154.

Therehavebeennosignificantchangestothegroupofconsolidatedcompanies

sincethistimelastyear.Theindividualchangescomparedwithyear-end2013

areshowninNote 1totheconsolidatedfinancialstatementson p.159.Thesechanges

hadnosignificanteffectontheconsolidatedbalancesheetandtheconsolidated

incomestatementincomparisonwiththesameperiodlastyear.



Principles of the GroupBusiness activities and Group structure

TheLufthansaGroupismadeupoffivebusinesssegments,whicheachhold

leadingmarketpositions./ ThepassengerairlinesformtheLufthansaGroupsbiggest

businesssegment./ LufthansaCargoisoneoftheworldsleadingfreightairlines.

/ Theservicesegmentsprovideawiderangeofservicesfortheairlineindustry.

/ TheITInfrastructureunitistobesoldtoIBMandtheITServicesbusinesssegment

isdissolved./ ThecompositionoftheExecutiveBoardchangedduringtheyear.

Portfolio of business segments reorganisedTheLufthansaGroupisaglobalaviationgroupwithatotalofaround540subsidiariesandequityinvestments,whichinthefinancialyear2014wereorganisedintofivebusinesssegments:PassengerAirlineGroup,Logistics,MRO,Cateringand,uptotheendof2014,ITServices.Allthesegmentsoccupyaleadingpositionintheirrespectivemarkets.In2014,theLufthansaGroupgeneratedrevenueofEUR30.0bnandemployedan averageof118,973staff.

ThebiggestbusinesssegmentintheLufthansaGroupisthePassengerAirlineGroup.LufthansaPassengerAirlines,SWISSandAustrianAirlinesarenetworkcarriersservingtheglobalmar-ketandallpassengersegments.GermanwingsoperatesdirectflightswithinEurope.InvestmentsintheBelgiannetworkcarrier

BrusselsAirlinesandtheGerman-TurkishcharterairlineSunExpresscompletetheairlineportfolio.TheairlinegroupdefendeditsEuro-peanmarketleadershipinthereportingperiod,againrecordingthegreatestnumberofpassengersandthehighestrevenueofanyEuropean airline.

TheLogisticssegmentwithitsfreightairlineLufthansaCargoisoneoftheworldsleadingprovidersofstandard,expressandspecialcargo.

TheservicesegmentsMRO,CateringandITServices,offerawiderangeofservicesforcustomersbothinsideandoutsidetheGroup.LufthansaTechnikistheworldsleadingproviderofmaintenance,repairandoverhaulservicesforcivilaircraft.Itsrangeofproductsextendsfromone-offjobstotheservicingofentirefleets.

Lufthansa Group structure

Supervisory Board

Chairman of the Executive Board

ChiefOfficer Group Airlines, Logistics and IT

ChiefOfficer Lufthansa Passenger Airlines

ChiefOfficer Finances and Aviation Services

ChiefOfficer Corporate HR and Legal Affairs

PassengerAirlineGroup

LufthansaPassengerAirlines

(Including Germanwings)

SWISS

AustrianAirlines

BrusselsAirlines

Sun- Express

MRO

LufthansaTechnik

Other

Service and Financial

Companies

Catering

LSGSkyChefs

ITServices

LufthansaSystems

Logistics

LufthansaCargo


TheCateringsegmentistheglobalmarketleaderinairlinecateringandsuppliesregional,nationalandinternationalcarriers.TheLSGSkyChefsgroupisalsoincreasinglypresentinadjacentmarkets,whereitoffersbothcateringproductsandservicesinconnectionwithin-flightarticles.

TheITServicessegmentwasoneoftheleadingglobalITservicesproviderstotheairlineindustry.Giventhelong-terminvestmentsrequiredintheITinfrastructurearea,theLufthansaGroupissplit-tingLufthansaSystemsAGintoitsthreesegments.TheITInfra-structureunitwassoldtotheITservicesproviderIBMaspartofanoutsourcingagreement.Thedealisduetobecompletedinthefirsthalf-yearof2015.Followingthisfundamentalchange,theITServicessegmentwasdissolvedatthebeginningofthe2015financialyear.Itsremainingsegments,AirlineSolutionsandIndus-trySolutions,willremainintheLufthansaGroupasindependentcompanieswithintheOtherbusinesssegment.

TheLufthansaGroupsstrategicformationisreviewedandadjustedcontinuouslyinordertolaythebasisforastablebusinessperfor-mancewithadiversifiedportfolioofbusinesssegmentsthatoffseteconomicfluctuations.

No change in Group structure, changes to membership of the Executive Board DeutscheLufthansaAGhasthemanagementandsupervisorystructurestypicalforcompaniesinGermany.TheExecutiveBoardisresponsibleformanagingtheCompanyanddefiningitsstrategicdirection.Indoingso,theaimistoincreaseCompanyvaluesus-tainably.TheSupervisoryBoardappoints,advisesandsupervisesthe Executive Board.

DeutscheLufthansaAGismanagedbyanExecutiveBoardcom-prisingfivemembers.ChairmanoftheExecutiveBoardandCEOsince1May2014isMrCarstenSpohr.InthisrolehesucceedsDrChristophFranz,wholefttheCompanyathisownrequest.MrSpohrwaspreviouslyinchargeofLufthansaPassengerAir-lines.HissuccessorinthisfunctionisMrKarlUlrichGarnadt,whowasappointedbytheSupervisoryBoardon12March2014asamemberoftheExecutiveBoardandasCEOLufthansaGermanAirlines.MsSimoneMenneisChiefOfficerFinancesandAviationServices.On17September2014,theSupervisoryBoardrenewedMsMennesappointmentuntil30June2020.DrBettinaVolkens isChiefOfficerHumanResourcesandLegal.Inadditiontoherpreviousresponsibilities,DrBettinaVolkensalsoassumedtheroleofChiefHumanResourcesOfficeratLufthansaPassengerAirlinesasof1May2014.MrHarryHohmeisterisChiefOfficerGroup Airlines,LogisticsandIT.

DeutscheLufthansaAGistheparentcompanyandthelargestsingleoperatingcompanyintheLufthansaGroup.TheindividualbusinesssegmentsarerunasseparateGroupcompanies,withtheexceptionofLufthansaPassengerAirlines.Theyhavetheirownprofitandoperatingresponsibilityandaremonitoredbytheirrespectivesupervisoryboards,inwhichmembersofDeutscheLufthansaAGsExecutiveBoardarealsorepresented.FurtherinformationcanbefoundinthemanagementreportchapterCoporate Governance starting on p.127andintheNotestothe consolidatedfinancialstatements,Note 44 on p.219.


Principles of the GroupBusinessactivitiesandGroupstructure


Goals and strategies

Increasingcompanyvalue,profitablegrowthandcustomersatisfactionarethe

strategicpillarsoftheLufthansaGroup./ TheoveralltargetistobeLufthansa

Firstchoice./ 7to1OurWayForwardstrategicprogrammedefinessevenfields

ofactionforthedevelopmentoftheCompany./ Financialstabilityprovidesroom

formanoeuvre.

Group strategy

Main pillars of the strategy are confirmed andwillbeexpanded:SincenewmembershavejoinedtheExecutiveBoardanditsresponsibilitieshavebeenreorganised,theLufthansaGrouphasreviewedandrefineditsstrategy.Thepreviouspillarsofthestrategyhavebeenconfirmed:

Increasecompanyvalue

Profitablegrowthandactiveroleinshapingtheaviationindustry

Continuouslyincreasecustomersatisfaction

TheLufthansaGroupsobjectiveistobethefirstchoiceforcustomers,employees,shareholdersandpartners.

Sevenfieldsofactionhavebeendefinedtoreachthesegoals,inwhichstrategicstepsaretobeimplementedacrossallsegmentsintheyearsahead,underthetitle7to1OurWayForward.TheyensurethefutureviabilityoftheLufthansaGroup,takingintoaccountthekeysuccessfactorsoffinancialstability,marketposi-tionandfleetage.ThesevenareasofactionandtheirindividualactivitiesaredirectedattheoverarchingobjectiveofensuringthatLufthansaremainsthefirstchoiceandareasfollows:

Customercentricityandqualityfocus

Newconceptsforgrowth

Innovationanddigitalization

Effectiveandleanorganisation

Cultureandleadership

Value-basedsteering

Constantlyimprovingefficiency

Customer satisfaction and a focus on quality secure customer loyaltyIntheyearsahead,theLufthansaGroupwillfocusevenmoresharplyoncustomerorientationinallofitsoperatingsegments.Keybuildingblocksforthisdevelopmentarecontinuousinvest-mentinquality,aswellasproductsandservicestailoredevenmorecloselytoindividualcustomers.

Investmentsinproductqualityinclude,aboveall,the263aircraftwithalistvalueofEUR37bnthatwereontheorderlistofthePas-sengerAirlineGroupatthebeginningof2015.Theywillbedeliv-eredby2025tocoverfuturereplacementandgrowthneeds.MoreinformationisavailableintheFleet chapter on p.57. In 2014, the LufthansaGroupordered25newAirbusA320aircraftatatotallistpriceofEUR2.5bn.Continuingthefleetrenewalprogrammenotonlyincreasestravelcomfortforcustomersandbooststheenvi-ronmentalefficiencyofthefleet,butitalsoreducesthenumberofdifferentaircrafttypesandthusthecomplexityofthefleetfortheLufthansaGroup.

Passengersin-flightexperienceisalsoundergoingimprovementsonboardthestate-of-theartaircraftfleet.Theseextensiveinvest-mentsintheairlinesin-flightproductsenabletheLufthansaGrouptodifferentiateitselfbetterfromthecompetition.AtLufthansaPassengerAirlines,allaircraftshouldbeequippedwiththelatestgenerationofproductsbythethirdquarterof2015.Allaircraftflyinglong-haulrouteswillthenbefittedwiththenewFirstClass,BusinessClass,PremiumEconomyandEconomyClass,aswellaswithFlyNetinternetaccess.

Continuousimprovementsarealsobeingmadetothein-flightservice.LufthansaPassengerAirlinesaimstobethefirstwesternairlinewithafive-starqualitystandard,whichonlyafewcarriersintheworldcanclaim.LufthansaPassengerAirlinesandSWISSwillalsotailortheirproducts,servicesandcommunicationonboardmoretopassengersindividualneeds.AtLufthansaPassen-gerAirlines,therangeoffoodanddrinksinBusinessClassisalsotobeupgraded.

PositivefeedbackfromcustomersatalltheGroupsnetworkcarriersisanindicationthattheongoingqualityoffensivehasalreadywonthepassengersapproval.


Theotherbusinesssegmentsarealsopursuingtheirqualitylead-ershipinitiatives.IntheLogisticssegment,LufthansaCargotookdeliveryofitsthirdandfourthBoeing777freightersin2014,outofatotaloffiveonorder.TheITenvironmentforfreighthandlingatLufthansaCargoisalsotobefurthermodernised.Thekeybenefitshereareimproveddataquality,increasedsecurity,paperlessdatacommunicationandconsistentprocessmanagement.Theflexibilityofthenewsystemmakeseverydayworkeasierandtherebysavestimeandmoneyforthecompanyaswellasforitscustomers.

LufthansaTechnikhasreorganiseditssalesstructuretoenableittoofferitsglobalcustomersmoreindividualservicesacrossdiffer-entproductsinfuture,andtokeepgrowinginthehighlycompeti-tive MRO market.

LSGSkyChefsisincreasingitsproximitytothemarketandbroad-eningitscustomerfocustomeetincreasinglydifferentiatedcusto-merneedsforspecificin-flightserviceprogrammesandin-flightsalesmodels.Today,LSGSkyChefsisalreadyabletocovertheentire value chain, from procurement and the development of innovativeproductstologisticsandfulfilment.Infuture,LSGSkyChefsplanstoincreaseitsservicequalityevenfurther,todevelopnewproductsandconceptsbasedonmoderntechnologiesandcommunicationplatforms,andtogainanextensiveknowledgeofconsumertrendsandneeds.

WhentheobjectiveofqualityleadershipinallmarketsandbusinesssegmentswasdefinedfortheLufthansaGroup,aGroup-wideQualityCirclewassetuptoestablishandadvancethisgoalinallcompanies.ItischairedbytheChairmanoftheExecutiveBoardandCEOoftheLufthansaGroupandincludestheChairsoftheExecutiveBoardandCEOsofallthesegments.

NewconceptscreateprofitablegrowthThestrategicdevelopmentoftheLufthansaGroup,andofeachindividualoperatingsegment,rangefromorganicgrowthtostrate-gicacquisitions,andfromtheexpansionofexistingpartnershipstotheestablishmentofnewones.Aspartoftheongoingglobaltrendtowardsconsolidation,allpossibleacquisitionswhichhavethepotentialtosignificantlyincreasethecompetitivenessoftheLufthansaGroupandcreatevalueforitsshareholderswillbeexam-ined.Toexploitopportunitiesfromcooperationsandpartnerships,theLufthansaGroupstrivestobethefirst-choicepartnerforallstakeholdersfromafinancial,culturalandstrategicperspective.

InEurope,theprogressofconsolidationintheairlineindustrystillhasalongwaytogotoreachthelevelachievedinNorthAmerica,forinstance.Existingpartnershipsaretobeexpandedinthecaseofthepassengerbusiness,theNorthAtlanticjointventureA++,theJapanesejointventureJ+and,infuture,theChinesejointventurewithAirChina,forinstancewhilenewpartnershipsandcooperationagreementswillbeexaminedwherevertheyservethestrategicdevelopmentoftheLufthansaGroupandsupportitssustainablyprofitablecourseofgrowth.Thisapproachisfollowedbothinthepassengerbusinessbyreviewingfurtherjointventureswitharegionalfocus,aswellasinourservicecompaniesbylookingatpossiblepartnershipsintheareasoflogistics,MROandcatering.

By2020,theLufthansaGroupintendstogenerate40percentofitsrevenuefromsegmentsotherthanthenetworkairlines.Inthissegment,thefocusisinitiallyonboostingprofitabilitybeforegener-atingfurthergrowthwiththelargernumberofaircraft.

7to1OurWayForward

Ageoffleet

Financialstability

Marketposition

#Shareholder Employee

Customer

New concepts for growth

Effective and lean

organisation

Culture and leadership

Value-based steering

Constantly improvingefficiency

Customer centricity and quality focus Innovation and

digitalization


Principles of the GroupGoalsandstrategies


Withitsnewshort-andlong-haulconceptforthenewEurowings,theLufthansaGrouphasdeliveredacustomer-orientedresponsetoprice-sensitivedemandfordirectflights.Infuture,theLufthansaGroupintendstogenerateasignificantshareofrevenuewithpoint-to-pointtraffic.

Theaviationservicecompanies,particularlyLufthansaTechnikandLSGSkyChefs,areaddressinggrowthopportunitiesidentifiedinAmericaandAsiaandinadjacentproductmarkets.Othersegments,suchasMiles&MoreandAirPlus,arewinningnewmarketsbyexpandingtheirserviceportfolios.Furthermore,theLufthansaGroupcontinuouslyreviewsopportunitiesfromnewfieldsofbusi-nessalongtheentiretravelandtransportvaluechain.

TherangeofinvestmentintheMROsegmentstretchesfromnewstationsforhighlyefficientandinnovativeenginewashestothemaintenanceofthelatestaircraftcomponents.Anewfacilityforoverhaulingshort-andmedium-haulaircraftisbeingbuiltinPuertoRico.AnewwheelandbrakeshopfloorisunderconstructioninFrankfurtandisduetogointooperationinearly2017.

IntheCateringsegment,acquisitionsofvariousoperationsandextensivecapitalexpenditureinnewproductionfacilitiesingrowthregionsnotonlyenablethecompanytoenternewmarkets,butalsotofurtherincreasethequalityofserviceforairlinecustomers.

IncludingmorepartnersfromoutsidethetravelsectorintheMiles&Moreprogrammewillmakeitmoreattractive,notonlyforstatuspassengers,butalso,andinparticular,forthegroupofoccasionalflyers,whichinturnwillenabletheplatformtogrow.

Innovationanddigitalisationdrivenew developments and reinforce the culture of changeGreatimportanceisdrawnonthemanagementofinnovationanddigitalisationintheLufthansaGroup.AGroup-wideinnovationunithasbeenestablishedtostrengthenthecultureofchangethrough outtheLufthansaGroup.Itsroleistosystematicallypromoteexist-ingideasandprojectsandgetthemtomarketfaster.AninnovationbudgethasbeensetupforthispurposeandconcreteinnovationtargetsdefinedacrosstheGroup.AnannualinternalInnovatorAwardhasbeencreatedtoembedacultureofchangeatanemotionallevelandtoboostinnovation,andworkhasbegun toimplementtechnologicalinfrastructuresfortheinnovation managementprocess.

TogivetheLufthansaGroupadditionalimpetusfromoutside,anInnovationHubwasfoundedinBerlinin2014.Theteamworkingthere,whichconsistsofinternalandexternalstaffwithstart-up

experience,willworkwithpartnerstodevelopdigitalcontentforproducts,servicesandprocessesalongtheairtravelchain,frombookingtoarrivalatthefinaldestination,therebycontributingtowardsanticipatingandshapingfuturecustomerneeds.

LufthansaTechnikinparticularalreadyholdsimportantpatentsandisworkingonnewcutting-edgetechnologiesandmodernproductsthatmeetmarketneeds.Theyincludeinnovativerepairmethodsfornewaircraftmodelsandprocedurestocutkeroseneconsumptionandnoiselevelsasaserviceforairlinecustomers.

StrategicinnovationsintheareaofpartnershipsarevitaltokeepdevelopingtheglobalmarketpositionoftheLufthansaGroup.AsinthepastsuchaswiththeestablishmentoftheStarAllianceandthefirstcommercialjointventuresintheairlineindustrytheLufthansaGroupintendstocontinueplayingamajorroleinshap-ingtheongoingdevelopmentoftheentireaviationindustrybymeansofstrategicinnovations.

Newgovernancestructuresupportsaneffectiveandefficientorganisation and accelerates decision-making processesFurtherimprovementsinthecooperationbetweenoperatingseg-mentsareplanned,alsointermsofprocesses.Afocusonstand-ardisedprocessesisintendedtofacilitatecooperationwithintheLufthansaGroup.TheaimofthisorganisationalprogrammeistoidentifybestpracticesbycomparingsimilarprocessesindifferentbusinessentitiesandtoestablishtheseprocessesasabenchmarkstandardfortheLufthansaGroup.Atthesametime,theSharedServicesunitsandthecentresofexcellencearetobedeveloped.Theseinitiativesareintendedtodeliverfasterdecision-makingprocesses,morestreamlinedhierarchies,fewerpointsofcontactandlowercosts,aswellasboostingproductivityandagility.TheywillenabletheLufthansaGrouptodeployitscollectivestrengthstothefullandstaycompetitiveinavolatileanddynamicmarket.

Activities to support and assist employees aimtoingrainthenewcultureThecommitmentofitsstaffandmanagershasmadetheLufthansaGroupaleadingaviationgroup.OnekeysuccessfactorwasandistheemployeesdesiretoleadtheLufthansaGroupsuccessfullyintothefutureandtocontributetothesuccessoftheircompany.Andjustaswiththeinvestmentinitsfleet,productsandservices,theLufthansaGroupalsoinvestsinitsemployees,whosediscerningservicedelightscustomersaroundtheworldonthegroundandintheaireveryday.Inthiscontext,theaimistotransferresponsibilitytoindividuals,measuretheirperformancemoreaccuratelyandencouragetherotationofstaffandmanagersbetweenthedifferentoperatingsegments.


Theleadershipprinciplesadoptedinlate2013applytoallthemanagersintheLufthansaGroupandareintendedtoreinforcethisculture.Theyareappliedaccordinglytotheselection,incentiv-isationanddevelopmentoftalentedstaffandmanagers.Achangemanagementprogrammehasbeensetuptoaccompanythischangeprocess.

Altogether,theseactivitiesaremeanttohelpallemployeesandmanagersintheLufthansaGrouptothinkandactinanetworked,open-mindedwayandtoincreasethelevelofmutualtrust.

Increasing enterprise value is the basis for successful developmentTheabilitytocreatesustainablevalueisthefundamentalconditionfortheLufthansaGrouptokeepinvestingsuccessfullyforthebenefitofitscustomersinitsbusinesssegments,fleets,productsandservices,aswellasinitsstaff.Itisalsorequiredforthepur-poseofmeetingtheLufthansaGroupsobligationtogiveitsshare-holdersanadequatefinancialreturnandforkeepingtheproductandservicepromisegiventocustomers.IncreasingcompanyvalueisthereforethefoundationforthesuccessfuldevelopmentoftheLufthansaGroup.

TooptimisecapitalallocationwithintheGroupandtoestablishvaluecreationasaguidingprincipleatalllevels,theLufthansaGrouphasintroducednewparametersforvalue-basedmanage-ment.Thepreviousmanagementmetricsoperatingresultandcashvalueadded(CVA)arebeingreplacedbyamoretranspar-entandlesscomplexsystemthatmakesitpossibleinternallyandexternallytosetincentivesforfurthervaluecreation.Detailscanbefound in the chapter Management system and supervision on p.29.

Oneimportantgoalistomaintaintheinvestmentgraderating.Asanexpressionoffinancialstrength,itenablestheLufthansaGrouptoobtainfinancingonfavourabletermsinthefuture.For furtherdetailsseethenextchapter,Financial strategy on p.28.

Moving SCORE into routine operations contributes to continuous efficiency gainsInanindustryascompetitiveastheairlinebusiness,efficiencygainsmustalwaysbeontheagendainallareas.Forthisreason,theSCOREprogramme,itsmeasurementlogicandthemonitoringofefficiencyinitiativesaretobeincorporatedintoroutineprocessesatallcompanies.

TheSCOREprogrammewaslaunchedintheLufthansaGroupin2012;itrunsuntil2015andaimsforlastingincreasesinprofitability.AlloftheGroupcompaniescontinuetoworkattopprioritytoimple-mentaround5,600individualsegment-specificandcross-segmentmeasures.Thesustainableearningsimprovementisintendedtomakeakeycontributiontosafeguardingtheongoingprogrammeofinvestment.Anoverviewofthemainactivitiesin2014canbefoundinthesectionSCORE programme onp.42.

SCORE,alongwiththeculturalchangeitinspiresinbothourmanagersandouremployees,isthereforelayingthefoundationsforlong-termagilityandadaptabilitybeyond2015.

ToensurethatcontinuousefficiencygainsremainontheagendafortheLufthansaGroupevenaftertheprogrammecomestoanend,stepshavebeentakentoembedSCOREprocessesintotheorganisationalstructure.Theyconsistofdefininganannualminimumprofitabilityincreasetocompensateforcostinflationandincomedeflation,bothattheleveloftheLufthansaGroupandinderivedformfortheindividualoperatingsegments.Thissetsthestageforrespondingmoreflexiblytochangingmarketconditionsandcustomerdemandsinfutureandforearningadequatereturnsoncapital.Itthereforeenablesgrowthandsustainablevaluecreationandensureslong-termjobsecurity.

7to1OurWayForwardwillsetthe Lufthansa Group up for the challenges of the future ThefuturedevelopmentoftheLufthansaGroupisdeterminedbythepillarsoftheCompanystrategy,toincreasecompanyvalue,generateprofitablegrowth,playanactiveroleinshapingtheavia-tionindustryandtoachieveeverhigherlevelsofcustomersatis-faction.ItscombinationofoperatingsegmentsmakestheLufthansaGroupagloballyuniqueaviationgroupwhoseintegratedvaluechainnotonlyoffersfinancialsynergiesbutalsogivesitanedgeoveritscompetitorsintermsofknow-how.

ThenetworkairlinesremainthecoreoftheLufthansaGroup,butthecompaniesoutsidethenetworkairlineswillcontributeagrowingshareofrevenueandearnings.ThenewEurowingsiscreatinganadditionalplayerinthelow-costsegment,bothforshort-haulroutesinEuropeandlong-haulleisuretravelroutes.Theservicecom-paniesremainastrategiccompetitiveadvantagefortheLufthansaGroup,andiftheirmarginsstaystable,theywillcontinuetogrow.Theirstrongmarketpositionprovidesanaturalhedgeagainstthepressuresexertedonthenetworkandpoint-to-pointairlinesbythegrowthoftheircompetitors.


Principles of the GroupGoalsandstrategies


Financial strategy

Financial strength creates sustainable competitive advantages and trustThecoreofthefinancialstrategyistosafeguardthestrongfinan-cialprofile,creditratingandthusthefinancialstabilityoftheLufthansaGroup.ItsystematicallyaimstosupportandpromotethestrategicandoperatingperformanceoftheCompany.Itsobjectiveistoensureaccesstocapitalonfavourabletermsatalltimes.

ItsfinancialstabilitygivestheLufthansaGrouproomformanoeuvre,whichrepresentsasignificantadvantageincompetitionwithotherairlines.StrictapplicationofthefinancialstrategyisthereforeaprerequisitefortheLufthansaGrouptorespondflexiblytoperma-nentchangesintheunderlyingconditionsandtoplayanactivepartinshapingtheenvironmentinwhichitoperates.ItsfinancialprofilemakestheLufthansaGroupatrustedandvaluedpartnerforcustomersandbusinesspartnersalike.

Financial strategy is the basis for all main planning and decision-making processesTomaintainitsfinancialstability,theGroupsystematicallystrivestomeetthefollowingstrategictargets:

Maintainagoodcreditratingfromthepointofviewoftheinvestorsandlendinginstitutions:Theaimistomaintainandfurtherstrengthentheexistinginvestmentgraderating.

Ensureadequateliquidity:Theaimistohaveminimumliquid-ityofEUR2.3bnatalltimes.Intimesofvolatilityindemandandfinancialmarkets,thisreducesliquidityandrefinancingrisks.

Managenetdebt:Theaimisadebtrepaymentratioof45percent,butnolessthan35percent.ThedebtrepaymentratiomeasurestheGroupsabilitytoserviceitsdebt.Itisanadjustedmeasureofcashflowfromoperatingactivitiesinrelationtonetdebt,includingpensionobligations.Withthesetargets,theGroupwouldeasilymeetthecorrespondingcriteriasetbytheratingcompaniesforaninvestmentgraderating.

Maintainastablecapitalstructure:Theaimistooptimisethecostofcapitalbymeansofanappropriatecapitalstructure.Inthemediumterm,thegoalisanequityratioof25percent.Theplanistoachievethistargetbyretainingsufficientprofitsandcontinuingthesuccessivefundingofpensionobligations.However,thisratioissubjecttoexternalfactors(interestrate)andtogreatvolatility,becauseIFRSrequiresthatpensionobli-gationsaremeasuredasofthereportingdate.

Maintainalargelyunencumberedfleet:TheaimistoensureahighdegreeoffinancialandoperatingflexibilityfortheLufthansaGroup.ThebulkoftheaircraftfleetisunencumberedandwhollyownedbytheGroup.

Hedgeagainstexternalfinancialrisks:Theaimistoman-agetheLufthansaGroupsfinancialrisksbysmoothingpricefluctuationsusingrule-basedandintegratedriskmanagementprocedures,inparticularbyhedgingfuel,exchangerateandinterestraterisks.

ShareholdersparticipateintheCompanyssuccessLettingshareholdersparticipateintheCompanyssuccessisacentraltenetoftheLufthansaGroup.WhentheCompanyskeyperformanceindicatorswerealteredinDecember2014,changeswerealsomadetothedividendpolicyoftheLufthansaGroup.

ThedividendproposalisnowprimarilybasedonEBIT,whichisthemainearningsindicatorfortheGroupunderIFRS.Aregulardivi-dendratioof10to25percentofEBITistheaim.ThisdividendproposalrequiressufficientnetprofitfortheyearintheindividualfinancialstatementsforDeutscheLufthansaAGpreparedinaccordancewiththeGermanCommercialCode;seefrom p.142.

Development of earnings and dividends

2014 2013 2012 2011 2010 Operatingresult in m 954 6991) 839 820 1020

Netprofit/loss(Group) in m 55 313 1228 13 1131

Netprofit/loss(HGB) in m 732 407 592 116 483

Dividendpershare in 0.45 0.25 0.60

Dividendratio(basedonoperatingresult) in % 29.8 14.0 26.9 2)

Dividendyield(gross) in % 2.9 2.7 3.7

1) Previousyear'sfigurehavebeenadjustedduetoIFRS11.2) 31.4%basedontheoperatingresultof876mreportedfor2010.

Inadditiontotheregulardividendpayment,thedividendpolicyalsoallowsforshareholderstoparticipateinaparticularlypositiveperformancebytheCompanybymeansofaspecialdividendorsharebuy-back.

Informationonperformanceagainstthestrategictargetsfor2014andthedividendproposalbytheExecutiveBoardandSupervisoryBoardofDeutscheLufthansaAGforthefinancialyearcanbefoundintheeconomicreportinthesectionTarget achievement on p.43 and in the Earnings position chapter on p.51.Asummaryofthestrategicgoalsforthefinancialyear2015canbefoundinthesectionOutlook for the Lufthansa Group from p.122.


Management system and supervision

Value-basedmanagementsystemaimsforsustainableincreaseinthevalueof

theLufthansaGroup./ ValuecontributioninthefinancialyearisapositiveCVAof

EUR90m./ From2015,EACCwillreplaceCVAasthemainperformanceindicator

forvaluecontribution./ Variableremunerationformanagerslargelydependenton

Companysperformance.

Sustainable increase in company value remains the ultimate objectiveSince1999,theleadershipandmanagementoftheLufthansaGrouphaveaimedtoincreasecompanyvaluesustainably,i.e.acrossindustrycycles.

Thisapproachisanintegralpartofallplanning,management andcontrollingprocesses.ThedemandsmadeoftheCompanybyshareholdersintermsofanappropriatereturnoncapitalandsustainablecapitalappreciationarefirmlyembeddedinthewholesystemofcorporatemanagement.Theachievementofvaluecreationtargetsisreviewedonaregularbasisandtheresultsareincorporatedintointernalandexternalreporting.Thevalue-basedmanagementsystemisalsolinkedtoperformance-relatedpay.DetailscanbefoundinthesectionVariable remuneration for managers is linked to the Companys performance starting on p.31.

Value contribution has been measured by CVA since 1999Sincevalue-basedmanagementwasintroduced,themainperfor-manceindicatorfortheLufthansaGrouphasbeencashvalueadded(CVA).CVAisbasedonthereturnexpectationsofallinves-torsandlendersandmeasuresthevaluecontributiongeneratedinthereportingperiodbyeachindividualbusinesssegmentandbytheGroupasawhole.

TheCVAisanabsoluteresidualamount,whichiscalculatedasthedifferencebetweenthecashflowgeneratedinagivenyearandtheminimumcashflowrequiredtoincreasethevalueoftheCompany.Ifthecashflowgeneratedishigherthantheminimumrequiredcashflow,thevaluecreationisexpressedbyapositiveCVA.Theindividualparametersarecalculatedasfollows:

Theminimumrequiredcashflowisthesumoftherequiredreturnoncapitalemployed,thecapitalrecoveryrateandtheflattaxrate.Thecapitalbaseisdefinedasthetotalofnon-currentandcurrentassetslessinterest-freeliabilities.Itismeasuredathistoriccost.

Thepaceofdepreciationandamortisationthereforehasnoeffectonthecalculationandevolutionofthecapitalbase.TherequiredreturnoncapitaliscalculatedusingtheweightedaveragecostsofdebtandequityfortheLufthansaGroupandfortheindividualoperatingsegments(WeightedAverageCostofCapitalWACC).

In2014,theWACCwasderivedfromthefollowingparameters:

Return on capital 2014

in % Risk-freemarketinterestrate 2.6

Marketriskpremium 5.2

Beta factor 1.1

Proportionofequity 50.0

Proportionofdebt 50.0

Cost of equity 8.4

Cost of debt 3.4

Theseparametersarereviewedeveryyearandupdatedasneces-saryforthefollowingyearscorporateplanningandperformancemeasurement.Short-termfluctuationsaresmoothedinordertoensurethelong-termcharacteroftheconcept.InthecourseoftheregularreviewoftheindividualparametersofCVA,itbecameapparentthat,givenconsistentlylowinterestratesandfurtherfallsintheriskpremiumforshareholdersequity,itwasnecessarytoadjusttheWACC.Inthefinancialyear2014,aWACCof5.9percentwasusedfortheLufthansaGroup.

Onthebasisofthefinancialstrategy,atargetcapitalstructureof50percentequityatmarketvalueand50percentdebtisusedtocalculatetheWACCforboththeGroupandthebusinesssegments.Thedifferentsegmentrisksarefactoredinbymeansofindividualcostsofequity,andthereforetotalcostsofcapital.Inthisway,theLufthansaGroupensuresthattheallocationofcapitaltoprojectsinthebusinesssegmentsisadjustedforrisk.ThefollowingtableillustratestherequiredreturnoncapitalfortheLufthansaGroupanditsindividualbusinesssegments:


Principles of the GroupManagementsystemandsupervision


Costofcapital(WACC)fortheGroupandthebusinesssegments

in % 2014 2013 2012 2011 2010 Group 5.9 6.2 7.0 7.0 7.9

PassengerAirlineGroup 5.9 6.2 7.0 7.0 7.9

Logistics 6.2 6.5 7.2 7.2 8.2

MRO 5.6 6.0 6.7 6.7 7.6

Catering 5.9 6.2 7.0 7.0 7.9

ITServices 5.6 6.0 6.7 6.7 7.6

Theminimumrequiredcashflowincludeswhatisknownascapi-talrecovery,inordertoreflectthedepletionoftheCompanysnon-currentassetsintheproductionprocess.Thisisderivedfromtotaldepreciablenon-currentassetsandrepresentstheamountthatneedstobeputbyeveryyearandinvestedatarateequivalenttotheWACCinordertorecouptheamountofthepurchasecostsbytheendoftheassetsusefullife.TherelevantusefullifeforCVAisthatusedfordepreciationandamortisationpurposes.

Finally,theexpectedtaxpaymentisaddedbyapplyingasur-chargeofcurrently0.6percentofthecapitalbase.Theminimumrequiredcashflowfor2014,takingthenewusefullifeofaircraftandreserveenginesandtherelatedchangesintoaccount,amountedtoEUR2.9bn(previousyear:EUR2.9bn).

IntheLufthansaGroup,thecashfloweffectivelygeneratedisrepresentedbytheperformanceindicatorEBITDAplus,whichismadeupofanoperatingandafinancialcomponent.Theoperat-ingcomponentofEBITDAplusisderivedfromtheoperatingresultbyadjustingitfornon-cashitems.

Reconciliation EBITDAplus

in m 2014 2013* Operating result 954 697

Depreciationandamortisation 1,413 1,697

Resultfromdisposalofproperty, plantandequipment 11 3

Incomefromreversalofprovisions 168 191

Impairmentlossesonintangible assetsandproperty,plantandequipment 63 137

Changeinpensionprovisionsbeforeinterests 159 242

Operating EBITDAplus 2,642 2,693

Proratapre-taxresultsof non-consolidatedequityinvestments 259 210

Interestincome 163 120

Resultfromdisposaloffinancialassets 128 15

Impairmentcharges/additionof financialcapitalbase 53

FinancialcashflowEBITDAplus 347 345

Non-recurring effects 3,002

CashflowEBITDAplus 2,989 6,040

* Asreportedinpreviousyear.

Theseareprincipallydepreciationandamortisation,incomefromthewrite-backofprovisionsandnetchangesinpensionprovisions.ThenthefinancialcomponentofEBITDAplusisadded,comprisingproratapre-taxearningsofnon-consolidatedequityinvestments,netinterestincomeandearningscontributionsfromthedisposaloffinancialinvestments.ThisensuresthatEBITDAplusincludesallsig-nificantcash-relevantitems.Inthereportingyear,theLufthansaGroupsEBITDApluscametoEUR3.0bn(previousyear:EUR6.0bn).

InordertoobtaintheCVA,theminimumrequiredcashflowisthendeducted from EBITDAplus.

Lufthansa Group generates value contribution of EUR 90bn in 2014Inthefinancialyear2014,theLufthansaGroupgeneratedapositiveCVAofEUR90m.

Valuecreation(CVA)oftheLufthansaGroup and the business

lufthansa – first choice

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