Financial - Turkish Airlines

(Convenience Translation of Report and Financial Statements Originally Issued in Turkish)TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIESNotes to the Audited Consolidated Financial StatementsFor the Year Ended 31 December 2012(All amounts are expressed in Turkish Lira (TL) unless otherwise stated.)40. EVENTS AFTER THE BALANCE SHEET DATEDuring 24. Labor Union Agreement negotiations for 2013 and 2014, the Group and Turkey Civil Aviation Labor Union(HAVA-İş) could not agree and signed dispute minute. The negotiations continued with an Official Conciliator. However,official supervisor negotiations ended since the parites could not reach an agreement on matters of dispute.The reportprepared by the Official Conciliator within the legal period will be announced to the parties.The Group Board of Directors decided to buy 5 unit of A330-300 aircrafts from Airbus firm. 2 of these purchases arecertain to realize in 2014 and 3 of them are optional for 2015 and 2016 periods.In order to meet increasing repair and maintenance requirements related to fleet planning, the Group Board of Directorsdecided to start negotiations for partnership or purchasing alternatives and works of due diligence with MNG TeknikUçak Bakım Hizmetleri A.Ş.. A good faith agreement is signed by counter parties.41. OTHER ISSUES AFFECTING FINANCIAL STATEMENTS MATERIALLY OR NECESSARY TO MAKE FINANCIALSTATEMENTS SOUND, INTERPRETABLE AND UNDERSTANDABLEAs there is a change in the presentation and classification of the Group’s financial statement items, due to theimplemented ERP system, prior financial statements are reclassified for maintaining comparability. Thesereclassifications have no effect over the prior period’s equity and net profit/ (loss) accounts. Significant reclassificationsin the financial statements include:Balance Sheet ReclassificationsAs of December 2011, TL2,746,677 part of the “Other Doubtful Receivables and Other Doubtful Receivables Provision”item, both was stated under “Other Receivables”, is now classified under “Doubtful Trade Receivables and Doubtful TradeReceivables Provision”As of December 2011, TL1,019,693 part of the “Receivables from Deport Passengers” item, wich was stated under “ShorttermOther Receivables” and TL 3,359,270 part of the “Interline Passenger Revenue Accrual” item which was statedunder “Other Current Assets” ,is now both classified under”Trade Receivables”As of December 2011, TL28,526,223 part of the “Receivables from Training of Captain Candidates” and TL 2,265,376 partof the “Given Deposits and Quarantees” item, both was stated under”Short-term Other Receivables” ,is now classifiedunder”Long-term Other Receivables”77