Analyst Presentation Year End Results 2005 Unique (Flughafen Zürich AG) Josef Felder Chief Executive Officer Beat Spalinger Chief Financial Officer March 16 th , 2006 1
Agenda • Traffic 2005 • Elimination of financing- and balance sheet- risks related to aircraft noise • New Accounting Treatments • 2005 Year End Financial Results • Current Developments • Outlook 2
Traffic 2005 3
Traffic Overview 2005 Jan - Dec 2005 TRAFFIC % YoY DEVELOPMENT 2004 2005 Local Passengers 12'323'227 12'468'199 1.2% Transfer Passengers 4'883'515 5'367'092 9.9% Transfer share 28% 30% Total Passengers 17'252'906 17'884'652 3.7% Aircraft Movements 266'660 267'363 0.3% Cargo (in tons) 363'537 372'415 2.4% 4
Traffic Operational Key Figures for ZRH 17.3 Traffic was mainly driven by the • Pax + 3.7% growth of Swiss International Air (in million) 17.9 Lines, flying 0.75 million more passengers in and out of Zurich 14.0 16.0 18.0 than 2004 266.7 Movements The increase in passenger • + 0.3% (in thousand) numbers and only minor change 267.4 in flight movements resulted in 240 260 270 (more seats per aircraft) and a higher seat load factor of 66.7% 363.5 Cargo versus 65.1% for 2004 +2.4% (in thousand 372.4 tons) Cargo volumes have bottomed • out in 2004 and started to pick 320 360 380 2004 up again 2005 5
Traffic Passenger Mix for ZRH As expected, the high local • 12.3 Local passenger growth of 2004 + 1.2% Passengers flattened out throughout 2005 12.5 Nevertheless, local passengers • are 0.7% above the record level 11.0 12.0 13.0 of the year 2000 million passengers Transfer passengers rebounded • as Swiss International Airlines approached foreign markets with 4.9 Transfer competitive offers via Zurich + 9.9% Passengers 5.4 The transfer rate stabilized • around 29.6% after its low of 4.5 5.0 5.5 28.0% in 2004 2004 million passengers 2005 6
Traffic Passenger development since 1986 wwwwwwwwwwwwwww million passengers 25.0 total airline passengers 20.0 transfer passengers local passengers 15.0 10.0 5.0 0.0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 7
Traffic Transfer Passenger Rate – 1986 - 2006 % 50 45 45 43 43 40 39 40 37 37 37 36 35 35 32 31 31 30 30 30 30 29 29 30 28 25 20 15 10 5 0 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 8 8 8 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 8
Traffic Changes in Airlines & Destinations 2004 2003 2005 139 destination 143 destinations 148 destinations 67 countries 69 countries 67 countries 118 airlines 108 airlines 120 airlines selected destinations selected destinations added during 2005 withdrawn during 2005 Delhi Colombo Bristol Linz Dortmund Bratislava Palermo Florence Lamezia 9
Traffic Passenger market share & growth (2005) Europe 76.0% (+5.6%) North America 7.9% +0.0%) Asia 10.4% (-1.6%) Latin America 1.2% (-15.0%) Africa 4.5% (-3.5%) 10
Traffic Local passenger market share & growth (2005) Europe 80.3% (+2.3%) North America 6.4% (+2.7%) Asia 8.3% (-3.3%) Latin America 1.1% (-15.6%) Africa 3.9% (-7.1%) 11
Traffic Transfer passenger market share & growth (2005) Europe 66.5% (+16.8%) North America 11.7% (-4.4%) Asia 14.8% (-0.2%) Latin America 1.2% (-13.4%) Africa 5.8% (+4.0%) 12
Traffic Performance Indicators Passengers per Movement Seat Load Factor Average Take-Off Weight 67% 80 78 66% 76 Seat Load factor 65% Passengers per Movement 74 Average Take-Off Weight 64% 72 70 63% 68 62% 66 61% 64 60% 62 1999 2000 2001 2002 2003 2004 2005 13
Traffic European Benchmark (2005) Number of Passengers (in Mio. PAX) London-Heathrow (1) 67,7 (+0,9%) 53,4 (+4,9%) Paris Charles-de-Gaulle (2) 51,9 (+2,1%) Frankfurt (3) Amsterdam (4) 44,1 (+3,9%) 41,6 (+8,6%) Madrid (5) 32,7 (+4,2%) London-Gatwick (6) München (7) 28,5 (+6,9%) 28,2 (+2,2%) Rom-Fiumicino (8) 26,9 (+10,6%) Barcelona (9) Paris-Orly (10) 24,9 (+3,3%) 22,1 (+5,3%) Manchester (11) 22,0 (+5,3%) London-Stansted (12) Palma de Mallorca (13) 21,2 (+4,1%) Copenhagen (14) 19,7 (+5,0%) Mailand-Malpensa (15) 19,5 (+5,8%) Dublin (16) 18,3 (+7,5%) Zürich (17) 17,8 (+3,7%) Stockholm (18) 17,1 (+5,2%) Brussels (19) 16,1 (+3,4%) Oslo (20) 15,9 (+7,0%) Vienna (21) 15,8 (+7,4%) Düsseldorf (22) 15,4 (+1,9%) 0 10 20 30 40 50 60 70 80 Quelle: ACI-Europe 14
Elimination of financing- and balance sheet-risks related to aircraft noise 15
The Concept Unique to implement measures to ensure its ability ( bearable risk ) to bear balance sheet and financing risks associated with aircraft noise on its own up to CHF 1.1 billion ( noise related cost ). Should the total anticipated potential costs associated with aircraft noise exceed the CHF 1.1bn threshold , the Canton of Zurich will then assure the pre-financing of all “old” noise-related liabilities , against a pre-defined portion of the revenues from noise charges. 16
Key Definitions (1) „old“ noise related “Old” noise-related liabilities are potential liabilities (for liabilities formal expropriation) that arose prior to June 2001, up to which date the Canton of Zurich was holder of the operating licence. As before, the Canton of Zurich is jointly liable for such claims in an external capacity, while in an internal capacity, Flughafen Zürich AG assumed responsibility for these liabilities in the merger agreement dated 14 December 1999. „new“ noise related “New” noise-related liabilities are potential liabilities (for liabilities formal expropriation) that arose after June 2001. Threshold Total anticipated noise related cost of CHF 1.1bn has to be exceeded to force pre-financing into effect. The threshold can be adjusted upwards should the company develop above its expected base case scenario. 17
Key Definitions (2) Noise related Total costs associated with aircraft noise (potential formal cost: expropriations, costs for sound insulation and all related operating costs) Bearable risk: Balance Sheet risk: • The balance sheet of the company stays „healthy“ • No breech of financial covenants Financing risk: A potentialy arising financing gap (cumulated noise- related costs higher than cumulated noise related revenues) can be funded Total anticipated Constantly updated conservative projection of expected cost: noise-related cost. 18
The Concept / Three phases Toaday 100 % to FZAG Stage 1 Assessment following first payment for “old” formal expropriations Estimated Yes No total cost > „Threshold“ (CHF 1,1 bn.) Divided between the Canton of Zurich Revenue from noise charges and FZAG as per key Prefinancing by Canton of Zurich and FZAG Prefinancing by FZAG only Continuous Revue Canton of Zurich FZAG FZAG Stage 2 � formal expropriations � formal expropriations � formal expropriations + for „old“ noise-related for „old“ noise-related for „old“ noise-related liabilities. liabilities. liabilities. � sound insulation � sound insulation � noise related � noise related operation cost operation cost no Estimated yes no total cost > „Threshold“ (CHF 1,1 bn.) Prefinancing by FZAG only 100% to FZAG FZAG Stage 3 � formal expropriations for „old“ noise-related liabilities. � sound insulation � noise related operation cost 19
The Concept / Conservative anticipated cost Conservative estimates of total noise related cost „Threshold“ (CHF 1,1 bn in base-case). t Today Other important Other important First compensation for court decision court decision „old“ claims (presumably end of 2007 when first final court decision are taken) Phase - 1 Phase - 2 Phase - 3 If anticipated total noise related cost remains above threshold, Phase 2 continues until all „old“ noise claims are settled by the Canton 20
The Concept / Cash Flows in Phase – 2 (Pre-Financing by the Canton of Zurich) Pre-financing ot the Canton of Zurich (kicks-in when the first compensation for “old” formal expropriation has to be paid (Phase – 2). Yearly noise related Positive balance on Air- revenues port Zurich Noise Fund Specified Key 1. Formal Formal expropriations for expropriations for Noise Noise „new“ noise „old“ noise related Account Account related liabilities liabilities „Canton“ „Unique“ 2. cost for noise insulation 3. noise related operating cost 21
The Concept / Resulting Transactions 1) The Board of Directors is to ask the General Meeting of Shareholders to approve a capital increase with a market value of approximately CHF 300m Swiss francs in order to strengthen the company’s equity. => solves the balance-sheet risk 2) The company obtains a committed, but undrawn credit line of CHF 200m to cover a potential financing gap. => solves the financing risk 22
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