Annual Report Japan Airlines Corporation at a Glance Consolidated Financial Highlights Consolidated Operating Highlights Message from the Management Interview with the Group CEO Dream Skyward II: Stepping-stone to become "the world' s No.1 airline group" Review of Operations Corporate Social Responsibility (CSR) Activities Management's Review and Analysis of Financial Position Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Stockholder' Equity (Note8) Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Report of Independent Auditors Consolidated Subsidiaries JAL and Its Subsidiaries and Affiliates Directory JAL Group Route Network Board of Directors Investor Information

Consolidated Statements of Operations

Japan Airlines Corporation and Consolidated Subsidiaries

			Millions of yen	Thousands of U.S. dollars (Note 2)
Years ended March 31,	2004	2003	2002 Pro forma (Unaudited)	2004
Operating revenues:
Passenger:
Domestic	¥ 668,888	¥ 629,358	¥ 650,185	$ 6,370,362
International	549,764	668,472	632,472	5,235,848
Cargo:
Domestic	42,670	42,217	43,201	406,381
International	161,331	165,613	145,846	1,536,486
Incidental and other revenues	509,086	577,818	557,775	4,848,438
	1,931,742	2,083,480	2,029,481	18,397,543
Operating expenses (Note 10):
Wages, salaries and benefits	510,203	499,448	487,647	4,859,076
Aircraft fuel	244,341	245,921	250,457	2,327,057
Aircraft maintenance	82,206	81,139	72,385	782,914
Aircraft rent	86,720	91,921	98,657	825,904
Landing fees and other rent	233,230	231,835	222,354	2,221,238
Depreciation and amortization	119,388	118,187	113,519	1,137,028
Commission	113,396	125,717	136,729	1,079,961
Incidental and other expenses	503,203	566,796	520,458	4,792,409
	1,999,387	2,072,891	2,030,522	19,041,780
Operating (loss) income	(67,645)	10,589	(1,041)	(644,238)
Non-operating income (expenses):
Interest and dividend income	2,928	2,932	3,814	27,885
Interest expense	(28,503)	(34,657)	(38,829)	(271,457)
Exchange gain (loss), net	424	(1,975)	3,800	4,038
Flight equipment purchase incentives	29,260	42,075	−	278,666
Gain on sales of ground property and equipment	1,330	4,446	5,933	12,666
Gain on sales of investments in securities	1,235	4,623	14,337	11,761
Subsidy received for purchases of aircraft for isolated island routes	1,618	−	−	15,409
Gain recognized upon separation of substitutional portion of benefit obligation of welfare pension fund plan	755	−	−	7,190
Loss on sales and disposal of flight equipment	(13,946)	(10,637)	(7,147)	(132,819)
Loss on sales and disposal of ground property and equipment	(5,153)	(9,852)	(5,176)	(49,076)
Loss on investments in unconsolidated subsidiaries and affiliates	(6,518)	−	(5,622)	(62,076)
Equity in earnings (losses) of affiliates	1,221	340	(155)	11,628
Expenses arising from business combination	−	(7,304)	−	−
Other, net	846	3,500	(1,116)	8,057
	(14,503)	(6,508)	(30,163)	(138,123)
(Loss) income before income taxes and minority interests	(82,148)	4,081	(31,205)	(782,361)
Income taxes (Note 7):
Current	8,854	8,100	8,526	84,323
Deferred	(3,092)	(16,468)	(3,793)	(29,447)
	5,761	(8,368)	4,732	54,866
Minority interests	(709)	(804)	140	(6,752)
Net (loss) income	¥(88,619)	¥11,645	¥(35,797)	$(843,990)

In order to enhance comparability, supplemental unaudited pro forma financial statements for the year ended 2002 are presented above.
The accompanying notes are an integral part of these consolidated statements.

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