INCOME STATEMENTS

For the financial year ended 31 December 2011

64 Malaysian Airline System Berhad (10601-W)

Group Company
Note 2011 2010 2011 2010
RM’000 RM’000 RM’000 RM’000
Restated Restated

Operating revenue 3 13,653,894 12,978,396 11,984,708 11,104,531

Operating expenditure (16,197,154) (13,409,127) (14,396,034) (11,608,405)
Other operating income 247,527 607,163 261,726 568,600
(Loss)/Profit from operations 4 (2,295,733) 176,432 (2,149,600) 64,726
Fair value change of derivatives 5 60,660 164,251 60,660 164,251
Unrealised foreign exchange (loss)/gain (129,115) 62,174 (96,631) 22,079
Finance costs 6 (159,424) (138,402) (154,533) (138,584)
Share of results of associated companies 25,332 27,728 - -
Share of results of jointly controlled entity (14,604) (10,147) - -
(Loss)/Profit before taxation (2,512,884) 282,036 (2,340,104) 112,472
Taxation 9 (8,441) (44,690) (4,294) (5,231)
(Loss)/Profit for the year (2,521,325) 237,346 (2,344,398) 107,241

(Loss)/Profit attributable to:

Equity holders of the Company (2,523,988) 234,469 (2,344,398) 107,241
Non-controlling interests 2,663 2,877 - -
(2,521,325) 237,346 (2,344,398) 107,241

(Loss)/Earnings per share attributable to

equity holders of the Company (sen):

Basic, for (loss)/profit for the year 10 (75.5) 7.2

Diluted, for (loss)/profit for the year 10 (75.5) 7.2

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
STATEMENTS OF COMPREHENSIVE INCOME
For the financial year ended 31 December 2011
Malaysian Airline System Berhad (10601-W) 65

Group Company
2011 2010 2011 2010
RM’000 RM’000 RM’000 RM’000

(Loss)/Profit for the year (2,521,325) 237,346 (2,344,398) 107,241

Other comprehensive income:
Gains/(Losses) on cash flow hedges 41,780 (70,002) 41,780 (70,002)
Total comprehensive (loss)/income for the year (2,479,545) 167,344 (2,302,618) 37,239

Total comprehensive (loss)/income

attributable to:
Equity holders of the Company (2,482,208) 164,467 (2,302,618) 37,239
Non-controlling interests 2,663 2,877 - -
(2,479,545) 167,344 (2,302,618) 37,239

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
STATEMENTS OF FINANCIAL POSITION
As at 31 December 2011
66 Malaysian Airline System Berhad (10601-W)

Group
Note 2011 2010 2009
RM’000 RM’000 RM’000
Restated Restated

Non-current assets
Aircraft, property, plant and equipment 11 9,073,907 7,663,357 3,149,827
Investments in associates 13 120,043 101,804 78,976
Investments in a jointly controlled entity 14 - 2,360 1,798
Other investments 15 54,599 54,604 53,952
Intangible assets 16 151,757 137,732 110,041
Other receivables 18 343,582 442,575 386,537
Deferred tax assets 31 765 3,495 34,026
9,744,653 8,405,927 3,815,157

Current assets
Inventories 17 362,267 430,849 384,916
Trade and other receivables 18 1,268,154 1,372,186 1,383,831
Tax recoverable 8,865 19,436 15,645
Negotiable instruments of deposit 19 101,073 139,206 287,466
Cash and bank balances 20 1,014,464 2,085,451 2,664,859
2,754,823 4,047,128 4,736,717

Current liabilities
Sales in advance of carriage 21 1,705,943 1,677,346 1,451,401
Deferred revenue 22 205,307 232,823 225,135
Trade and other payables 24 2,643,899 2,240,044 2,081,639
Provisions 25 1,188,165 934,967 902,295
Borrowings 26 1,379,411 293,867 315,518
Derivative financial instruments 41 9,820 108,080 584,788
Taxation 1,437 3,614 3,696
7,133,982 5,490,741 5,564,472

Net current liabilities (4,379,159) (1,443,613) (827,755)

5,365,494 6,962,314 2,987,402

Financed by:
Equity attributable to equity holders of the Company:
Share capital 29 3,342,156 3,342,156 1,671,078
Reserves 30 (2,299,648) 182,010 (971,385)
1,042,508 3,524,166 699,693
Non-controlling interests 13,639 13,078 11,869
Total equity 1,056,147 3,537,244 711,562

Non-current liabilities
Borrowings 26 4,290,583 3,414,913 2,004,062
Derivative financial instruments 41 18,566 10,155 271,778
Deferred tax liabilities 31 198 2 -
4,309,347 3,425,070 2,275,840
5,365,494 6,962,314 2,987,402

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Statements of Financial Position
As at 31 December 2011
Malaysian Airline System Berhad (10601-W) 67

Company
Note 2011 2010 2009
RM’000 RM’000 RM’000
Restated Restated

Non-current assets
Aircraft, property, plant and equipment 11 7,884,568 7,113,341 2,692,446
Investments in subsidiaries 12 160,345 160,194 39,637
Investments in associates 13 88,274 81,274 81,274
Other investments 15 54,599 54,604 53,952
Intangible assets 16 139,451 129,184 95,743
Other receivables 18 898,444 748,285 830,977
9,225,681 8,286,882 3,794,029

Current assets
Inventories 17 354,186 424,963 378,073
Trade and other receivables 18 1,398,937 1,433,197 1,345,264
Tax recoverable 3,445 4,726 14,550
Negotiable instruments of deposit 19 101,073 139,206 287,466
Cash and bank balances 20 915,425 2,012,667 2,612,204
2,773,066 4,014,759 4,637,557

Current liabilities
Sales in advance of carriage 21 1,680,991 1,677,346 1,451,401
Deferred revenue 22 204,812 232,823 225,135
Trade and other payables 24 2,643,548 2,227,900 1,984,606
Provisions 25 1,151,007 919,280 887,938
Borrowings 26 1,328,503 292,817 314,248
Derivative financial instruments 41 9,820 108,080 584,788
Taxation 745 2,555 2,683
7,019,426 5,460,801 5,450,799

Net current liabilities (4,246,360) (1,446,042) (813,242)

4,979,321 6,840,840 2,980,787

Financed by:

Share capital 29 3,342,156 3,342,156 1,671,078

Reserves 30 (2,248,958) 53,110 (973,057)
Total equity 1,093,198 3,395,266 698,021

Non-current liabilities
Other payables 24 30,466 24,714 12,778
Borrowings 26 3,837,091 3,410,705 1,998,210
Derivative financial instruments 41 18,566 10,155 271,778
3,886,123 3,445,574 2,282,766
4,979,321 6,840,840 2,980,787

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
STATEMENTS OF CHANGES IN EQUITY
For the financial year ended 31 December 2011
68 Malaysian Airline System Berhad (10601-W)

Non-
Distributable

Equity
Share Share component
Note capital premium of RCPS
RM’000 RM’000 RM’000

Group
At 1 January 2011 3,342,156 4,995,970 58,076
Loss for the year - - -
Other comprehensive income - - -
Transactions with owners
Dividends - - -
ESOS vested 23 - - -
Total transactions with owners - - -

At 31 December 2011 3,342,156 4,995,970 58,076

At 1 January 2010 1,671,078 4,007,678 58,076

Profit for the year - - -
Other comprehensive income - - -
Transactions with owners
Dividends - - -
Rights issue 1,671,078 1,002,647 -
Net expenses recognised directly in equity - (14,355) -
ESOS vested 23 - - -
Total transactions with owners 1,671,078 988,292 -

At 31 December 2010 3,342,156 4,995,970 58,076

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
 Malaysian Airline System Berhad (10601-W) 69

Attributable to equity holders of the Company

Distri-
butable
Employee
share Cash flow Accu- Non-
option hedge General mulated Total controlling Total
reserve reserves reserve losses reserves Total interests equity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

88,388 (70,002) 501,530 (5,391,952) 182,010 3,524,166 13,078 3,537,244

- - - (2,523,988) (2,523,988) (2,523,988) 2,663 (2,521,325)
- 41,780 - - 41,780 41,780 - 41,780

- - - - - - (2,102) (2,102)
550 - - - 550 550 - 550
550 - - - 550 550 (2,102) (1,552)

88,938 (28,222) 501,530 (7,915,940) (2,299,648) 1,042,508 13,639 1,056,147

87,752 - 501,530 (5,626,421) (971,385) 699,693 11,869 711,562

- - - 234,469 234,469 234,469 2,877 237,346
- (70,002) - - (70,002) (70,002) - (70,002)

- - - - - - (1,668) (1,668)
- - - - 1,002,647 2,673,725 - 2,673,725
- - - - (14,355) (14,355) - (14,355)
636 - - - 636 636 - 636
636 - - - 988,928 2,660,006 (1,668) 2,658,338

88,388 (70,002) 501,530 (5,391,952) 182,010 3,524,166 13,078 3,537,244

 Non- Distri-

70
Distributable butable

Employee Cash
Equity share flow Accu-
Share Share component option hedge General mulated Total
Note capital premium of RCPS reserve reserves reserve losses reserves Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Company
At 1 January 2011 3,342,156 4,995,970 58,076 88,388 (70,002) 500,000 (5,519,322) 53,110 3,395,266
Loss for the year - - - - - - (2,344,398) (2,344,398) (2,344,398)
Other comprehensive
income - - - - 41,780 - - 41,780 41,780
Transactions with
owners
ESOS vested 23 - - - 550 - - - 550 550
Malaysian Airline System Berhad (10601-W)
For the financial year ended 31 December 2011

At 31 December 2011 3,342,156 4,995,970 58,076 88,938 (28,222) 500,000 (7,863,720) (2,248,958) 1,093,198
Statements of Changes in Equity

At 1 January 2010 1,671,078 4,007,678 58,076 87,752 - 500,000 (5,626,563) (973,057) 698,021
Profit for the year - - - - - - 107,241 107,241 107,241
Other comprehensive
income - - - - (70,002) - - (70,002) (70,002)
Transactions with
owners
Rights Issue 1,671,078 1,002,647 - - - - - 1,002,647 2,673,725
Net expenses
recognised
directly in equity - (14,355) - - - - - (14,355) (14,355)
ESOS vested 23 - - - 636 - - - 636 636
Total transactions
with owners 1,671,078 988,292 - 636 - - - 988,928 2,660,006

At 31 December 2010 3,342,156 4,995,970 58,076 88,388 (70,002) 500,000 (5,519,322) 53,110 3,395,266

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
STATEMENTS OF CASH FLOWs
For the financial year ended 31 December 2011
Malaysian Airline System Berhad (10601-W) 71

Group Company
Note 2011 2010 2011 2010
RM’000 RM’000 RM’000 RM’000
Restated Restated

Cash flows from operating activities

(Loss)/Profit before taxation (2,512,884) 282,036 (2,340,104) 112,472

Adjustments for:
Fair value change of derivatives 5 (60,660) (164,251) (60,660) (164,251)
Aircraft, property, plant and
equipment:
- depreciation 4 423,573 366,602 376,871 333,116
- loss/(gain) on disposal, net 4 56,429 (510) 56,513 (470)
- provision for/(writeback of)
impairment losses, net 4 426,558 (2,671) 337,004 (2,671)
- written off, net 4 25,462 9,402 25,458 9,402
Provision for/(Writeback of):
- aircraft maintenance and
overhaul costs 25 928,469 735,577 905,111 734,247
- short term accumulating
compensated absences 7 17,037 15,399 17,037 15,399
- unavailed credit on sales in advance
of carriage 3 (186,337) (213,359) (175,734) (202,290)
- doubtful debts, net 4 39,428 4,826 41,049 8,444
- inventories obsolescence, net 4 46,810 11,250 46,810 11,250
- stock loss 4 42,119 (6,493) 42,119 (6,493)
- impairment losses for:
- subsidiaries, net 4 - - - (121,000)
- associates, net 4 - - (7,000) -
Amortisation of intangible assets 4 33,420 33,316 27,006 27,287
Operating (loss)/profit before working
capital changes carried forward (720,576) 1,071,124 (708,520) 754,442
ESOS expense 7 550 636 550 636
Share of results of:
- associated companies (25,332) (27,728) - -
- jointly controlled entity 14,604 10,147 - -
Unrealised foreign exchange loss/(gain) 129,115 (62,174) 96,631 (22,079)
Interest income 4 (28,830) (51,993) (49,632) (60,361)
Dividend income 4 (18,292) (18,694) (29,664) (27,884)
Interest expense 6 153,486 137,244 154,533 138,584
Operating (loss)/profit before
working capital changes (495,275) 1,058,562 (536,102) 783,338
Increase in inventories (20,347) (50,690) (18,152) (51,647)
Decrease/(increase) in trade and
other receivables 164,080 41,023 (270,586) 49,094
Decrease in amount owing to
immediate holding company - (115,974) - (115,974)
Increase in sales in advance of carriage 214,934 439,304 179,379 428,235
(Decrease)/Increase in deferred revenue (27,516) 7,688 (28,011) 7,688
Increase in trade and other payables 564,636 235,021 683,411 338,336
Decrease in provisions 25 (675,271) (702,905) (673,384) (702,905)
Cash (used in)/generated from operating
activities (274,759) 912,029 (663,445) 736,165
Net cash settlement on derivatives (102,080) (623,121) (102,080) (623,121)
Premium paid on derivatives (24,886) (37,873) (24,886) (37,873)
Interest paid (197,773) (176,435) (164,777) (176,617)
Taxes refunded/(paid) 2,879 (8,606) (4,823) (4,086)
Net cash (used in)/generated from
operating activities (596,619) 65,994 (960,011) (105,532)
Statements of Cash Flows
For the financial year ended 31 December 2011
72 Malaysian Airline System Berhad (10601-W)

Group Company
Note 2011 2010 2011 2010
RM’000 RM’000 RM’000 RM’000
Restated Restated

Cash flows from investing activities

Purchase of:
- aircraft, property, plant and equipment (3,516,585) (3,706,348) (3,386,370) (3,580,221)
- intangible assets 16 (47,445) (61,007) (37,273) (60,728)
- investments in jointly controlled entity (12,244) (10,709) - -
- other investments - (652) - (652)
- investment in subsidiary - - (293) -
Withdrawal of:
- negotiable instruments of deposits 35,000 150,000 35,000 150,000
- deposits pledged with banks 106,024 53,823 106,024 53,823
Proceeds from disposal of:
- aircraft, property, plant and equipment 1,216,076 1,076 1,861,360 1,030
- other investments 5 - 5 -
Interest received 29,429 37,834 50,231 46,203
Dividend received 25,385 23,593 29,664 27,884
Net cash used in investing activities (2,164,355) (3,512,390) (1,341,652) (3,362,661)

Cash flows from financing activities

Proceeds from:
- borrowings 1,160,418 50,000 673,892 50,000
- aircraft refinancing 1,033,879 694,530 1,033,879 694,530
- issuance of shares - 2,673,725 - 2,673,725
Repayment of:
- borrowings (277,390) (260,000) (250,000) (260,000)
- finance lease (106,340) (208,271) (134,872) (208,271)
Settlement of RCPS 27 - (696) - (696)
Expenses incurred on issuance of Rights
share exercise - (14,355) - (14,355)
Dividends paid to:
- RCPS holders 27 (12,454) (12,454) (12,454) (12,454)
- minority shareholders in subsidiaries (2,102) (1,668) - -
Net cash generated from financing
activities 1,796,011 2,920,811 1,310,445 2,922,479

Net decrease in cash and cash equivalents (964,963) (525,585) (991,218) (545,714)
Cash and cash equivalents at beginning
of year 1,923,777 2,449,362 1,850,993 2,396,707
Cash and cash equivalents at end of year 20 958,814 1,923,777 859,775 1,850,993

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.