Finnair Plc Stock Exchange Release 27 March 2014 at 14.30 EET Finnair is changing the accounting principle of its aircraft engine overhauls and will combine the Aviation Services segment with Airline Business segment from the first quarter of 2014 onward. Finnair's financial reporting for 2013 has been adjusted to account for the new reporting practices. The restated 2013 figures are presented in the attached tables. Capitalization of the aircraft engine overhauls Finnair is changing the accounting principle for its aircraft engine overhauls. From the beginning of 2014, Finnair capitalizes engine overhauls to its balance sheet and depreciates related costs during the engines’ maintenance periods. Earlier overhauls have been booked as expense when they occur. The change will reduce the volatility of engine overhaul costs, which improves the accuracy of forecasting future profitability and improves comparability over of periods. It will also improve comparability with other airlines, because, based on the study conducted by International Air Traffic Association (IATA), the amended practice corresponds to the current industry practice. It will decrease Finnair equity at 31 December 2013 by 13.8 million euros and improve 2013 EBIT by 16.7 million euros. In addition, the change will increase 2013 gross investments, improve 2013 cash flow from operating activities and reduce cash flow from investing activities respectively. It will also impact Finnair’s 2013 key figures. The change in the accounting principle affects the Airline Business segment. Aviation Services segment combined with Airline Business segment Due to restructurings made in past years, the nature and scope of Aviation Services business have changed. Due to the changes, the Board of Directors has decided to change the business segment structure. From the first quarter of 2014 onward, the Aviation Services segment is not reported separately, but its operations are reported as a part of the Airline Business segment. After the structural changes in technical services and catering implemented in 2012, the Aviation Services segment has consisted of aircraft maintenance and the operations of Finncatering Oy and Finnair Travel Retail Oy, as well as Finnair’s property holdings, office services and the management and maintenance of properties related to the company’s operational activities. Finncatering Oy was sold to LSG Lufthansa Service Europa/Afrika GmbH on 28 February 2014. The segment information for 2013 have been restated accordingly. Appendix: Restated comparable 2013 figures FINNAIR PLC Further information: Finnair communications, 358 9 818 4020, comms(a)finnair.com Distribution: NASDAQ OMX Helsinki Principal media
Changes in Finnair’s financial reporting principles
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