Annual Financial Statements 2019

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Annual Financial Statements 2019 ANNUAL FINANCIAL STATEMENTS 2019 LIABILITY STATEMENT OF DIRECTORS LIABILITY STATEMENT OF DIRECTORS FOR THE PURPOSES ENVISAGED UNDER ARTICLE 8.1.b OF SPANISH ROYAL DECREE 1362/2007 OF 19 OCTOBER (REAL DECRETO 1362/2007). At a meeting held on February 27, 2020, the directors of International Consolidated Airlines Group, S.A. state that, to the best of their knowledge, the individual and consolidated financial statements for the year to December 31, 2019, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole, and that the individual and consolidated management reports include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with the description of the principal risks and uncertainties that they face. February 27, 2020 Antonio Vázquez Romero William Matthew Walsh Chairman Chief Executive Officer Marc Jan Bolland Margaret Ewing Francisco Javier Ferrán Larraz Stephen William Lawrence Gunning Deborah Linda Kerr María Fernanda Mejía Campuzano Kieran Charles Poynter Emilio Saracho Rodríguez de Torres Lucy Nicola Shaw Alberto Terol Esteban INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Financial statements for the year to December 31, 2019 CONTENTS ▪ Balance sheet at December 31, 2019 1 ▪ Income statement for the year to December 31, 2019 2 ▪ Statement of changes in equity for the year to December 31, 2019 3 ▪ Cash flow statement for the year to December 31, 2019 5 ▪ Notes to the financial statements for the year to December 31, 2019 6 MANAGEMENT REPORT FOR THE YEAR TO DECEMBER 31, 2019 STATEMENT OF DIRECTORS’ RESPONSIBILITIES INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Balance sheet at December 31, 2019 (Expressed in thousands of euros) Note 2019 2018 ASSETS NON-CURRENT ASSETS 7.864.567 7.828.628 Intangible assets 6 - 1.705 Property, plant and equipment 7 - 17.251 Investments in Group companies Equity instruments 8 7.658.193 7.631.193 Loan receivable from Group companies 9,16 184.234 161.797 Non-current financial assets Equity instruments 9 14.536 8.120 Other financial asset 9 - 1.807 Deferred tax asset 12 7.604 6.755 CURRENT ASSETS 1.004.129 668.447 Trade and other receivables Clients, Group companies 9,16 201.678 87.185 Current tax receivable 12 88.718 216.874 Other receivables 9 10.828 5.045 Investments in Group companies Loan receivable from Group companies 9,16 8.822 13.540 Current financial investments Derivatives 9 - 8.099 Cash and cash equivalents Cash 9,10 80.415 195.548 Cash equivalents 9,10 613.668 142.156 TOTAL ASSETS 8.868.696 8.497.075 EQUITY AND LIABILITIES EQUITY 6.209.366 6.730.306 SHAREHOLDERS’ FUNDS Capital Registered share capital 11 996.016 996.016 Share premium 11 5.327.295 6.021.802 Reserves Legal and statutory reserves 11 205.799 205.799 Other reserves 11 (897.437) (983.770) Own shares and equity holdings 11 (59.568) (67.292) Profit for the year 3 763.583 662.180 Interim dividend 3 (287.728) (287.580) Other equity instruments 11 166.141 186.752 VALUATION ADJUSTMENTS Currency differences 11 (4.735) (3.601) LIABILITIES NON-CURRENT LIABILITIES 2.499.510 1.561.081 Non-current debt Bond and other marketable securities 9 1.448.995 937.437 Group companies, non-current 9,16 1.047.515 620.644 Deferred tax liability 12 3.000 3.000 CURRENT LIABILITIES 159.820 205.688 Current Provisions 12 4.347 4.576 Current debt Bond and other marketable securities 9 13.125 4.375 Group companies, current 9,16 6.271 86.599 Trade and other payables Suppliers, Group companies 9,16 40.316 27.632 Various creditors 9 15.768 7.917 Payroll accruals 9 9.723 7.498 Current tax payable 12 447 1.039 Other amounts due to tax authorities 12 69.823 66.052 TOTAL EQUITY AND LIABILITIES 8.868.696 8.497.075 1 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Income statement for the year to December 31, 2019 (Expressed in thousands of euros) Note 2019 2018 Continuing operations Revenue from operations 893.487 760.104 Rendering of services to Group companies 13,16 68.341 67.233 Dividend income 16 825.146 692.871 Employee costs 13 (52.459) (50.160) Wages, salaries and other costs (44.483) (41.240) Social security costs (7.976) (8.920) Other operating expenses (29.846) (23.992) External services received (28.315) (22.799) Other operating expenses (1.531) (1.193) OPERATING PROFIT 811.182 685.952 Finance income 13.250 5.524 Marketable securities and other financial instruments Receivable from debt with Group companies and associates 13,16 13.110 5.350 Receivable from third parties 13 140 174 Finance costs (59.929) (34.078) Payable on debt with Group companies and associates 13,16 (15.905) (8.190) Payable on debt with third parties 13 (44.024) (25.888) Change in fair value of financial instruments 13 (18.715) 3.696 Currency differences 344 75 NET FINANCE EXPENSE (65.050) (24.783) PROFIT BEFORE TAX 746.132 661.169 Taxes 12 17.451 1.011 PROFIT FOR THE YEAR 3 763.583 662.180 2 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Statement of changes in equity for the year to December 31, 2019 (Expressed in thousands of euros) A) Statement of other comprehensive income Note 2019 2018 PROFIT FOR THE YEAR 3 763.583 662.180 Income and expenses recognised directly in equity Currency differences (1.134) (3.264) TOTAL INCOME AND EXPENSES RECOGNISED DIRECTLY IN EQUITY 11 (1.134) (3.264) TOTAL INCOME AND EXPENSES RECOGNISED 762.449 658.916 3 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Statement of changes in equity for the year to December 31, 2019 (Expressed in thousands of euros) B) Statement of changes in equity Issued Share Share Own shares and Profit for Interim Other equity Valuation capital premium Reserves equity holdings the year Dividend instruments adjustments 1 TOTAL BALANCE AT DECEMBER 31, 2017 1.028.994 6.021.802 (357.553) (76.737) 596.469 (256.178) 172.867 (337) 7.129.327 Total recognised income and expense - - - - 662.180 - - (3.264) 658.916 Transactions with shareholders and owners (32.978) - (760.709) 9.445 - (287.580) (16.839) - (1.088.661) Capital reductions (32.978) - (467.577) 500.000 - - - - (555) Acquisition of treasury shares - - - (500.000) - - - - (500.000) Vesting of share-based payment schemes - - 1.577 9.445 - - (16.839) - (5.817) Dividend - - (294.709) - - (287.580) - - (582.289) Other movements in equity - - - - - - 30.724 - 30.724 Cost of share-based payments (note 17) - - - - - - 30.724 - 30.724 Appropriation of prior year profit - - 340.291 - (596.469) 256.178 - - - BALANCE AT DECEMBER 31, 2018 996.016 6.021.802 (777.971) (67.292) 662.180 (287.580) 186.752 (3.601) 6.730.306 Total recognised income and expense - - - - 763.583 - - (1.134) 762.449 Transactions with shareholders and owners - (694.507) (288.267) 7.724 - (287.728) (53.485) - (1.316.263) Vesting of share-based payment schemes - - 726 7.724 - - (14.583) - (6.133) Equity portion of convertible bond redeemed - - 38.418 - - - (38.902) - (484) Dividend - (694.507) (327.411) - - (287.728) - - (1.309.646) Other movements in equity - - - - - - 32.874 - 32.874 Cost of share-based payments (note 17) - - - - - - 32.874 - 32.874 Appropriation of prior year profit - - 374.600 - (662.180) 287.580 - - - BALANCE AT DECEMBER 31, 2019 996.016 5.327.295 (691.638) (59.568) 763.583 (287.728) 166.141 (4.735) 6.209.366 1 Relates to currency translation adjustments only. 4 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Cash flow statement for the year to December 31, 2019 (Expressed in thousands of euros) Note 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES Profit for the year before tax Profit from continuing operations 746.132 661.169 Adjustments to profit Finance income 13 (13.250) (5.524) Dividend income 16 (825.146) (692.871) Finance expenses 13 59.929 34.078 Change in fair value of financial instruments 18.715 (3.696) Currency differences (344) (75) Share-based payments 17 14.381 12.689 Changes in working capital Trade and other payables 35.464 15.166 Trade and other receivables (62.246) 15.852 Other current liabilities 2.225 (6.641) Other current assets (5.783) 342 Other cash flows from operating activities Interest paid (1.594) (8.085) Taxation received/(paid) 112.808 (29.562) Dividend received from Group companies 825.146 692.871 CASH FLOW FROM OPERATING ACTIVITIES 906.437 685.713 CASH FLOWS FROM INVESTING ACTIVITIES Amounts paid Purchase of other equity instruments 9 (8.329) (7.621) Purchase of property, plant and equipment 7 - (34.527) Purchase of intangibles - (488) Amount paid to Group companies (43.054) (219.484) Amounts received Transfer of property, plant and equipment to Group companies 7 - 69.212 Investment in Group companies - 75.374 Interest received 256 541 Amount received from Group companies 12.714 3.281 CASH FLOWS FROM INVESTING ACTIVITIES (38.413) (113.712) CASH FLOWS FROM FINANCING ACTIVITIES Receipts and payments on equity instruments Acquisition of treasury shares - (500.000) Repayment of equity instruments (507.465) (4.375) Receipts and payments on financial liabilities Issue Debt with Credit institutions 987.062 - Debt with Group companies 348.231 508.000 Repayment Debt with Group companies (24.012) (3.634) Dividend payments and receipts from other equity instruments Dividend paid 3 (1.308.240) (576.550) CASH FLOWS FROM FINANCING ACTIVITIES (504.424) (576.559) IMPACT OF EXCHANGE DIFFERENCES (7.221) (305) INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 356.379 (4.863) Cash and cash equivalents at the beginning of the year 9,10 337.704 342.567 Cash and cash equivalents at the end of the year 9,10 694.083 337.704 5 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.
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