2003 Annual Report - Turkish Airlines

FINANCIAL REVIEWThe comparative operation results of Turkish Airlines for the years 2002 and 2003 are as follows:31 December 2003 31 December 2002 31 December 2003 31 December 2002Profit/Loss (TL Millions) (UAS)* (UAS)* (IFRS)** (IFRS)**Operating Income 2,390,842,395 2,171,619,433 2,499,793,339 2,950,540,284Operating Expenses (2,208,871,203) (2,152,412,536) (2,174,674,745) (2,567,609,822)Operating Profit/Loss 181,971,192 19,206,897 325,118,594 382,930,462Other Operating Income 306,064,457 220,560,370 89,948,593 43,699,711Other Operating Expenses (233,302,864) (139,716,351) (10,681,740) (8,150,546)Fin./Mon. Gain/Pre-tax Prof./Loss 254,732,785 100,050,916 404,385,447 418,479,627Financial Income/(Exp.) (Net) (2,223,214) (249,208) 259,735,872 (438,861,860)Monetary Gain/(Loss) - - (376,874,468) 479,134,761Income Before Taxation 252,509,571 99,801,708 287,246,851 458,752,528Provisions for Taxes (78,990,691) (32,398,092) (73,386,988) (111,237,890)Net Profit/Loss 173,518,880 67,403,616 213,859,863 347,514,638Profit/Loss per Share 992 385 1,222 1,986On 15 November 2003, Capital Markets Board ("CMB") published Communiqué No: 25 of Series XI, "Communiqué on Capital MarketAccounting Standards". The Communiqué is applicable to the first interim financial statements ending after 1 January 2005 and is effectivefrom the date of publishing. However, companies may choose to adopt Communique No: 25 of Series XI, for years or interim periodsending on or after 31 December 2003.As explained in the first temporary clause of Article 34 of the foresaid Communiqué - General Provisions related to financial statementsobligations, preparation and public announcement of financial statements in accordance with IFRS until the beginning of that period inwhich application Communiqué No: 25 of Series XI becomes enforceable, is counted for fulfillment of provisions of preparation offinancial statements and public announcement in accordance with that Communiqué. Consequently, the Company prepared and publiclyannounced its financial statements as of 31 December 2003 in accordance with IFRS.The companies which choose to apply Communiqué No: 25 of Series XI or IFRS as of 31 December 2003 are not required to report inaccordance with CMB Communiqué No.1 of Series XI “Rules and Principles Relating to Financial Statements and Reports in CapitalMarkets”, Communiqué No: 20 of Series XI “Rules and Principles Relating to Adjustment of Financial Statements in HyperinflationaryPeriods” and Communiqué No: 21 of Series XI “Rules and Principles Relating to Consolidated Financial Statements and Accounting ForEquity Participations”.(*) According to Uniform Accounting System(**) According to International Financial Reporting Standards35