Air France-KLM Group

1 Air France-KLM Group - 1 - 15/02/ 2017 CONSOLIDATED FINANCIAL STATEMENTS Prepared in accordance with international Financial Reporting Standards ( IFRS ) as adopted by the european Commission for use in the european Union January 1, 2016 December 31, 2016 Air France-KLM Group - 2 - 15/02/ 2017 Table of contents CONSOLIDATED INCOME - 5 - CONSOLIDATED STATEMENT OF RECOGNIZED INCOME AND EXPENSES .. - 6 - CONSOLIDATED BALANCE - 7 - CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS - 9 - CONSOLIDATED STATEMENT OF CASH FLOWS .. - 10 - 1. BUSINESS DESCRIPTION .. - 13 - 2. RESTATEMENT OF ACCOUNTS 2015 .. - 13 - Presentation of Servair Group as discontinued operation .. - 13 - 3. SIGNIFICANT EVENTS.

2 - 14 - Events that occurred in the period .. - 14 - Subsequent events .. - 14 - 4. ACCOUNTING POLICIES .. - 15 - Accounting - 15 - Use of estimates .. - 16 - Consolidation principles .. - 17 - Translation of foreign companies financial statements and transactions in foreign currencies . - 18 - Business combinations .. - 18 - Sales .. - 19 - Loyalty programs .. - 19 - Distinction between income from current operations and income from operating activities .. - 20 - Aggregates used within the framework of financial communication .. - 20 - Earnings per share .. - 20 - Financial instruments, valuation of financial assets and liabilities .. - 20 - Goodwill .. - 22 - Intangible assets .. - 23 - Property, plant and equipment.

3 - 23 - Impairment test .. - 24 - - 25 - Treasury shares .. - 25 - Employee benefits .. - 25 - Provisions for restitution of aircraft under operating leases .. - 26 - Other provisions .. - 26 - Emission Trading Scheme .. - 26 - Equity and debt issuance costs .. - 26 - Deferred taxes .. - 26 - Non-current assets held for sale and discontinued operations .. - 27 - 5. CHANGE IN THE CONSOLIDATION SCOPE .. - 28 - 6. INFORMATION BY ACTIVITY AND GEOGRAPHICAL AREA .. - 28 - Information by business segment .. - 30 - Information by geographical area .. - 32 - 7. EXTERNAL EXPENSES .. - 33 - 8. SALARIES AND NUMBER OF EMPLOYEES .. - 34 - 9. AMORTIZATION, DEPRECIATION AND PROVISIONS .. - 35 - 10. OTHER INCOME AND EXPENSES .. - 35 - 11.

4 OTHER NON-CURRENT INCOME AND - 35 - 12. OTHER FINANCIAL INCOME AND EXPENSES .. - 38 - 13. INCOME TAXES .. - 39 - Income tax charge .. - 39 - Deferred tax recorded in equity (equity holders of Air France-KLM ) .. - 40 - Effective tax rate .. - 40 - Variation in deferred tax recorded during the period .. - 41 - Unrecognized deferred tax assets .. - 42 - 14. NET INCOME FROM DISCONTINUED OPERATIONS .. - 42 - 15. ASSETS HELD FOR SALE AND LIABILITIES RELATED TO ASSETS TO BE DISPOSED .. - 43 - 16. EARNINGS PER SHARE .. - 44 - Income for the period Equity holders of Air France-KLM per share .. - 44 - Non-dilutive instruments .. - 45 - Instruments issued after the closing date .. - 45 - Air France-KLM Group - 3 - 15/02/ 2017 17.

5 GOODWILL .. - 45 - Detail of consolidated goodwill .. - 45 - Movement in net book value of goodwill .. - 45 - 18. INTANGIBLE ASSETS .. - 46 - 19. - 47 - 20. TANGIBLE ASSETS .. - 48 - 21. CAPITAL EXPENDITURES .. - 49 - 22. EQUITY AFFILIATES .. - 49 - 23. PENSION ASSETS .. - 51 - 24. OTHER FINANCIAL ASSETS .. - 52 - 25. INVENTORIES .. - 54 - 26. TRADE ACCOUNTS RECEIVABLES .. - 54 - 27. OTHER ASSETS .. - 55 - 28. CASH, CASH EQUIVALENTS AND BANK OVERDRAFTS .. - 55 - 29. EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF AIR France-KLM SA .. - 55 - Issued capital .. - 55 - Additional paid-in capital .. - 56 - Treasury shares .. - 57 - Perpetual subordinated bond .. - 57 - Reserves and retained earnings .. - 57 - 30. SHARE-BASED COMPENSATION.

6 - 58 - 31. RETIREMENT BENEFITS .. - 58 - Characteristics of the main defined benefit plans .. - 58 - Description of the actuarial assumptions and related sensitivities .. - 62 - Evolution of commitments .. - 64 - Asset allocation .. - 65 - Expected cash flows and risks linked to the pension obligations .. - 65 - 32. OTHER PROVISIONS .. - 66 - Provisions .. - 67 - Contingent liabilities .. - 68 - 33. FINANCIAL DEBT .. - 69 - Perpetual subordinated bond .. - 70 - OCEANE .. - 70 - Bonds .. - 71 - Capital lease commitments .. - 72 - Other debt .. - 73 - Maturity analysis .. - 73 - Currency analysis .. - 74 - Credit lines .. - 74 - 34. NET DEBT .. - 75 - 35. OTHER LIABILITIES .. - 76 - 36. FINANCIAL INSTRUMENTS .. - 76 - Risk management.

7 - 76 - Derivative instruments .. - 80 - Market value of financial - 85 - Valuation methods for financial assets and liabilities at their fair value .. - 87 - 37. LEASE COMMITMENTS .. - 88 - Capital leases .. - 88 - Operating leases .. - 88 - 38. FLIGHT EQUIPMENT ORDERS .. - 89 - 39. OTHER COMMITMENTS .. - 91 - Commitments made .. - 91 - Commitments received .. - 91 - 40. RELATED PARTIES .. - 92 - Transactions with the principal executives .. - 92 - Transactions with the other related parties .. - 92 - 41. CONSOLIDATED STATEMENT OF CASH FLOW .. - 93 - Other non-monetary items and impairment .. - 93 - Acquisitions of subsidiaries, of shares in non-controlled entities .. - 93 - Disposal of subsidiaries, of shares in non-controlled entities.

8 - 94 - Non cash transactions .. - 94 - 42. STATUTORY AUDITORS - 95 - 43. CONSOLIDATION SCOPE .. - 95 - Air France-KLM Group - 4 - 15/02/ 2017 Consolidated entities .. - 96 - Equity affiliates .. - 97 - Air France-KLM Group - 5 - 15/02/ 2017 CONSOLIDATED INCOME STATEMENT In millions Period from January 1 to December 31 Notes 2016 2015 Restated(*) Sales 6 24,844 25,689 Other revenues 2 2 Revenues 24,846 25,691 External expenses 7 (14,263) (15,768) Salaries and related costs 8 (7,474) (7,464) Taxes other than income taxes (164) (155) Other income and expenses 10 842 1,110 EBITDAR (**) 3,787 3,414 Aircraft operating lease costs (1,073) (1,027) EBITDA (**) 2,714 2,387 Amortization, depreciation and provisions 9 (1,665) (1,607) Income from current operations 1,049 780 Sales of aircraft equipment 21 (5)

9 Other non-current income and expenses 11 46 305 Income from operating activities 1,116 1,080 Cost of financial debt 12 (309) (372) Income from cash and cash equivalents 49 62 Net cost of financial debt (260) (310) Other financial income and expenses 12 (33) (604) Income before tax 823 166 Income taxes 13 (294) (30) Net income of consolidated companies 529 136 Share of profits (losses) of associates 22 (7) (35) Net income from continuing operations 522 101 Net income from discontinued operations 14 270 26 Net income for the period 792 127 Non-controlling interests - 9 Net income - Group part 792 118 Earnings per share Equity holders of Air France-KLM (in euros) - basic 16 - diluted Net income from continuing operations - Equity holders of Air France-KLM (in euros) - basic 16 - diluted Net income from discontinued operations - Equity holders of Air France-KLM (in euros) - basic 16 - diluted The accompanying notes are an integral part of these consolidated financial statements.

10 (*)See note 2 in notes to the consolidated financial statements. (**)See note in notes to the consolidated financial statements. Air France-KLM Group - 6 - 15/02/ 2017 CONSOLIDATED STATEMENT OF RECOGNIZED INCOME AND EXPENSES In millions Period from January 1 to December 31 Notes 2016 2015 Net income for the period 792 127 Fair value adjustment on available-for-sale securities Change in fair value recognized directly in other comprehensive income 32 11 Change in fair value transferred to profit or loss (133) (221) - - Cash flow hedges Effective portion of changes in fair value hedge recognized directly in other comprehensive income 429 (955) Change in fair value transferred to profit or loss 731 1,216 Currency translation adjustment 8 8 Deferred tax on items of comprehensive income that will be reclassified to profit or loss (352) (48) Total of other comprehensive income that will be reclassified to profit or loss 715 11 Remeasurements of defined benefit pension plans (547) 498 Deferred tax on items of comprehensive income that will not be reclassified to profit or loss 114 (295) Total of other comprehensive income that will not be reclassified to profit or loss (433)