Financial Position (consolidated)

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2 Disclaimer This presentation is for informational purposes only, contains preliminary financial and other information about Korean Air Lines Co., Ltd. and is subject to updating, revision, amendment and completion. This presentation does not and is not intended to constitute or contain any offer of securities for sale or a solicitation of an offer to purchase any securities of Korean Air Lines Co., Ltd. or any other company and neither this presentation nor anything contained herein shall form the basis of any contract or commitment. Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements or trend information that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those in the forward-looking statements in this presentation. In addition to statements which are forward-looking by reason of context, including without limitation, statements referring to risk limitations, operational profitability, financial strength, performance targets, profitable growth opportunities, and risk adequate pricing, the words "may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or further", and similar expressions are intended to identify forward-looking statements. Korean Air Lines Co., Ltd. assumes no obligation to update or revise any such statements or any other information contained herein to reflect events or circumstances that may arise after the date of this presentation. 2

3 Financial Position (consolidated) (Unit: billion KRW) 3Q Changes Ratio Current Assets* 4,998 3,140 1, % Cash & Cash Equivalents 743 1, % Non Current Assets 18,319 19,781-1, % Aircraft related assets 12,516 12, % Investment in asssociates 502 2,408-1, % Total Assets 23,317 22, % Financial Liabilities 15,945 15, % Current 5,915 5, % Non Current 10,031 9, % Other Liabilities 4,807 4, % Total Liabilities 20,752 20, % Total Equity 2,565 2, % * Account reclassified as current assets related to the sale of S-Oil stake (2,040 bil. KRW) 3

4 Income Statement (consolidated) 3Q Q 2013 Changes 1~3Q 2014 (Unit: billion KRW) 1~3Q Changes 2013 Sales 3,165 3, % 8,960 8, % Operating Expense 2,924 3, % 8,718 8, % Operating Income % Non Operating Profit Foreign currency related gains, net Turn to Profit Interest expense, net % % Equity method gain, net Income Before Tax Net Income

5 Income Statement (non consolidated) (Unit: billion KRW) 3Q Q 2013 Changes 1~3Q ~3Q 2013 Changes Sales 3,104 3, % 8,786 8, % Operating Expense 2,874 3, % 8,565 8, % Operating Income % Turn to Profit Non Operating Profit Foreign curreny related gains, net Interest Expense, net % % Income Before Tax Net Income

6 Borrowings (non consolidated) As of Sep 30th, 2014 As of Jun 30th, 2014 Changes Balance (billion) Ratio Balance (billion) Ratio Balance (billion) Ratio USD % % % KRW 4, % 4, % % JPY % % 7 4.9% EUR % % % Total (KRW) 14, % 14, % % Applied FX Rate - as of Jun 30 th : 1USD 1,014.4KRW, 100JPY 1,000.0KRW, 1EUR 1,384.2KRW - as of Sep 30 th : 1USD 1,050.6KRW, 100JPY 960.2KRW, 1EUR 1,333.3KRW 6

7 Revenue Composition 3Q 2014 ( 3,104 billion KRW) 3Q 2013 (3,151 billion KRW) 여객 Cargo 22.1% Others 8.1% Cargo 21.3% Others 8.0% apple International Passenger 58.8% Aerospace 6.5% Domestic Passenger 4.5% International Passenger 61.0% Aerospace 5.0% Domestic Passenger 4.7% Others 8.9% Based on non-consolidated F/S 7

8 Passenger Traffic Capacity (Mil ASK) 3Q Q 2013 YOY 3Q Q 2013 YOY 23,094 21, % % Jul 7,730 7, % % Aug 8,047 7, % % Sep 7,317 6, % % Traffic (Mil RPK) International Passenger Domestic Passenger 17,911 17, % % Jul 6,020 5, % % Aug 6,547 6, % % Sep 5,344 5, % % L/F(%) 77.6% 80.6% -3.0%p 71.1% 73.1% -2.0%p Yield (US Cent) % % 8

9 Passenger Revenue by Route Operation Despite the increased traffic volume, revenue decreased due to the F/X rate (1,109.9KRW 1,026.3KRW) % 3Q Q [billion KRW] -2% -2% -4% - -4% -3% Domestic Japan China SEA Oceania Americas Europe Oceania 3% Americas SEA 15% 34% Europe 3Q 2014 China 18% Domestic Japan 9% 7% Oceania 3% Americas SEA 34% Europe 3Q 2013 China 17% Domestic Japan 11% 7% 9

10 Passenger Revenue by Regional Sales 1, % 3Q Q [billion KRW] -7% -24% -11% 0% -2% Korea Japan China SEA Americas Europe Europe 6% Americas 16% SEA 7% 3Q 2014 Korea 48% Europe 5% Americas 16% SEA 7% 3Q 2013 Korea 45% China 12% Japan 11% China 13% Japan 10

11 Passenger Business Overview 3Q Business Summary Traffic(RPK) changes : Americas 3%, Europe 2%, SEA 2% China 0%, Oceania 0%, Japan 10% No. of Passengers carried : 0% (Korea Outbound 4%, Overseas 3% ) 4Q Business Plan Despite the low season, holidays in October and demand influx from Sewol ferry disaster will contribute to the growth of travel demand Operate routes flexibly to improve profitability; increase the supply of profitable routes such as Europe or China, and reduce the supply of weak demand routes Operate new flights to Nha Trang and charter flights to Phu Quoc, Vietnam to expand the network in SEA, and embark on developing new routes 11

12 Cargo Traffic Cargo (International + Domestic) 3Q Q 2013 Changes Capacity (Mil AFTK) 2,597 2, % Jul % Aug % Sep % Traffic (Mil FTK) 2,054 1, % Jul % Aug % Sep % L/F(%) 79.1% 76.6% 2.5%p Yield (US Cent) % 12

13 Cargo Revenue by Route Operation Q Q % +6% [billion KRW] -3% -5% -9% +40% -8% Domestic Japan China SEA Oceania Americas Europe Europe 27% Domestic 1% Japan 4% Europe 26% Domestic 1% Japan 4% 3Q 2014 China 10% 3Q 2013 China 11% Americas 44% SEA 13% Oceania 1% Americas 43% SEA Oceania 1% 13

14 Cargo Revenue by Regional Sales % -3% 3Q Q % 0% +8% -5% 0 [billion KRW] Korea Japan China SEA Americas Europe Americas SEA Europe 11% 3Q 2014 Korea 29% Japan 7% Americas 13% SEA Europe 12% 3Q 2013 Korea 27% Japan 8% China 25% China 26% 14

15 Cargo Business Overview 3Q Business Summary Traffic(FTK) Changes : Americas 7%, Europe 5%, China 1% Oceania 0%, Japan 1%, SEA 1% Korea Outbound 6%, Transit 3% (Transit from : Americas 10%, China 3%, Japan 3%, SEA 3% ) 4Q Business Plan The air cargo market is forecast to grow continuously due to global economic recovery In accordance with the growing demand of smartphone, semiconductor, and other electronic products, operate charter flights to maximize profits Increase utilization of new aircrafts and maintain flexible-supplyoperation policy to meet seasonal demand trends 15

16 Operating Expense Breakdown 영업수익 x 억원 3Q 2014 (2,874 billion KRW) 3Q 2013 (3,002 billion KRW) Fuel 36% Fuel 38% Rentals 2% Commission 3% In-flight svc 4% Maintenance 3% Airport Related 10% Others Labor Depreciation Rentals 2% Commission 3% In-flight svc 3% Maintenance 3% Airport Related 10% Others 13% Labor Depreciation based on non-consolidated F/S 16

17 Key Expense (billion KRW) 3Q Q 2013 Changes Jet Fuel 1,049 1, % Consumption(Mil. bbl.) % Unit Price (into plane, USD/bbl.) % Labor % A/C rental % # of Rented A/C* A/C Depreciation % # of owned A/C * # of rented A/C includes 6 subleased A/C to JIN Air 17

18 Fleet Status (as of Sep 30 th, 2014) Fleet Type Status Month of Delivery A A B B B Passenger total B747F 17 B747-8F 5 B777F 4 Cargo total 26 0 Total Above table only includes KE operating A/C 18

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