Annual Financial Statements 2020
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ANNUAL FINANCIAL STATEMENTS 2020 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 25, 2021, 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, 2020, 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 25, 2021 Javier Ferrán Larraz Luis Gallego Martín Chairman Chief Executive Officer Giles Agutter Peggy Bruzelius Eva Castillo Sanz Margaret Ewing Heather Ann McSharry Robin Phillips 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, 2020 CONTENTS ▪ Balance sheet at December 31, 2020 1 ▪ Income statement for the year to December 31, 2020 2 ▪ Statement of changes in equity for the year to December 31, 2020 3 ▪ Cash flow statement for the year to December 31, 2020 5 ▪ Notes to the financial statements for the year to December 31, 2020 6 MANAGEMENT REPORT FOR THE YEAR TO DECEMBER 31, 2020 STATEMENT OF DIRECTORS’ RESPONSIBILITIES INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Balance sheet at December 31, 2020 (Expressed in thousands of euros) Note 2020 2019 ASSETS NON-CURRENT ASSETS 9.340.132 7.864.567 Investments in Group companies Equity instruments 6 7.573.190 7.658.193 Loan receivable from Group companies 7,14 1.746.961 184.234 Non-current financial assets Equity instruments 7 17.945 14.536 Deferred tax asset 10 2.036 7.604 CURRENT ASSETS 1.785.011 1.004.129 Trade and other receivables Clients, Group companies 7,14 130.548 201.678 Current tax receivable 10 95.658 88.718 Other receivables 7 15.489 10.828 Investments in Group companies Loan receivable from Group companies 7,14 16.078 8.822 Cash and cash equivalents Cash 7,8 3.987 80.415 Cash equivalents 7,8 1.523.251 613.668 TOTAL ASSETS 11.125.143 8.868.696 EQUITY AND LIABILITIES EQUITY 8.580.805 6.209.366 SHAREHOLDERS’ FUNDS Capital Registered share capital 9 497.147 996.016 Share premium 9 7.770.439 5.327.295 Reserves Legal and statutory reserves 9 205.799 205.799 Other reserves 9 309.146 (897.437) Own shares and equity holdings 9 (39.168) (59.568) (Loss)/profit for the year 3 (296.305) 763.583 Interim dividend 3 - (287.728) Other equity instruments 9 130.338 166.141 VALUATION ADJUSTMENTS Currency differences 9 3.409 (4.735) LIABILITIES NON-CURRENT LIABILITIES 2.273.705 2.499.510 Non-current debt Bond and other marketable securities 7 1.461.828 1.448.995 Group companies, non-current 7,14 811.877 1.047.515 Deferred tax liability 10 - 3.000 CURRENT LIABILITIES 270.633 159.820 Current provisions 10 5.391 4.347 Current debt Bond and other marketable securities 7 13.125 13.125 Group companies, current 7,14 217.047 6.271 Trade and other payables Suppliers, Group companies 7,14 7.397 40.316 Various creditors 7 15.135 15.768 Payroll accruals 7 - 9.723 Current tax payable 10 - 447 Other amounts due to tax authorities 10 12.538 69.823 TOTAL EQUITY AND LIABILITIES 11.125.143 8.868.696 1 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Income statement for the year to December 31, 2020 (Expressed in thousands of euros) Note 2020 2019 Continuing operations Revenue from operations 42.489 893.487 Rendering of services to Group companies 11,14 42.489 68.341 Dividend income 14 - 825.146 Employee costs 11 (18.949) (52.459) Wages, salaries and other costs (15.413) (44.483) Social security costs (3.536) (7.976) Other operating expenses (19.863) (29.846) External services received (18.607) (28.315) Other operating expenses (1.256) (1.531) Impairment and (losses)/gains on financial instruments 6 (160.003) - Impairment losses on equity instruments, Group companies (160.003) - OPERATING (LOSS)/PROFIT (156.326) 811.182 Finance income 26.257 13.250 Marketable securities and other financial instruments Receivable from debt with Group companies and associates 11,14 15.995 13.110 Receivable from third parties 11 10.262 140 Finance costs (52.360) (59.929) Payable on debt with Group companies and associates 11,14 (17.950) (15.905) Payable on debt with third parties 11 (34.410) (44.024) Impairment and (losses)/gains on financial instruments 6,11 (108.917) - Impairment losses on loans receivable from Group companies (108.917) - Change in fair value of financial instruments - (18.715) Currency differences 17 344 NET FINANCE EXPENSE (135.003) (65.050) (LOSS)/PROFIT BEFORE TAX (291.329) 746.132 Taxes 10 (4.976) 17.451 (LOSS)/PROFIT FOR THE YEAR 3 (296.305) 763.583 2 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Statement of changes in equity for the year to December 31, 2020 (Expressed in thousands of euros) A) Statement of other comprehensive income Note 2020 2019 (LOSS)/PROFIT FOR THE YEAR 3 (296.305) 763.583 Income and expenses recognised directly in equity Currency differences 8.144 (1.134) TOTAL INCOME AND EXPENSES RECOGNISED DIRECTLY IN EQUITY 9 8.144 (1.134) TOTAL INCOME AND EXPENSES RECOGNISED (288.161) 762.449 3 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Statement of changes in equity for the year to December 31, 2020 (Expressed in thousands of euros) B) Statement of changes in equity Issued Own shares Other share Share and equity (Loss)/profit Interim equity Valuation capital premium Reserves holdings for the year dividend instruments adjustments 1 TOTAL 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 Share-based payments cost (note 15) - - - - - - 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 Total recognised income and expense - - - - (296.305) - - 8.144 (288.161) Transactions with shareholders and owners - - 3.576 20.400 - - (25.568) - (1.592) Vesting of share-based payment schemes - - 3.576 20.400 - - (25.568) - (1.592) Other movements in equity (498.869) 2.443.144 727.152 - - - (10.235) - 2.661.192 Share-based payments credit (note 15) - - - - - - (10.235) - (10.235) Share capital reduction (796.813) - 796.813 - - - - - - Rights issue 297.944 2.443.144 (69.661) - - - - - 2.671.427 Appropriation of prior year profit - - 475.855 - (763.583) 287.728 - - - BALANCE AT DECEMBER 31, 2020 497.147 7.770.439 514.945 (39.168) (296.305) - 130.338 3.409 8.580.805 1 Relates to currency translation adjustments only. 4 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Cash flow statement for the year to December 31, 2020 (Expressed in thousands of euros) Note 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES (Loss)/profit for the year before tax (Loss)/profit from continuing operations (291.329) 746.132 Adjustments to (loss)/profit Finance income 11 (26.257) (13.250) Dividend income 14 - (825.146) Finance expenses 11 52.360 59.929 Change in fair value of financial instruments - 18.715 Currency differences (17) (344) Share-based payments 15 (5.086) 14.381 Impairment charge 6,14 268.920 - Changes in working capital Trade and other payables (48.746) 35.464 Trade and other receivables 43.947 (62.246) Other current liabilities - 2.225 Other current assets - (5.783) Other cash flows from operating activities Interest paid (7.887) (1.594) Taxation received - 112.808 Dividend received from Group companies - 825.146 CASH FLOW FROM OPERATING ACTIVITIES (14.095) 906.437 CASH FLOWS FROM INVESTING ACTIVITIES Amounts paid Purchase of other equity instruments 7 (3.409) (8.329) Amount paid to Group companies (1.753.550) (43.054) Amounts received Interest received 9.753 256 Amount received from Group companies 15.755 12.714 CASH FLOWS FROM INVESTING ACTIVITIES (1.731.451) (38.413) CASH FLOWS FROM FINANCING ACTIVITIES Receipts and payments on equity instruments Repayment of equity instruments (13.125) (507.465) Proceeds from rights issue 9 2.674.321 - Receipts and payments on financial liabilities Issue Debt with Credit institutions - 987.062 Debt with Group companies - 348.231 Repayment Debt with Group companies (27.554) (24.012) Dividend payments and receipts from other equity instruments Dividend paid 3 (53.285) (1.308.240) CASH FLOWS FROM FINANCING ACTIVITIES 2.580.357 (504.424) IMPACT OF EXCHANGE DIFFERENCES (1.656) (7.221) INCREASE IN CASH AND CASH EQUIVALENTS 833.155 356.379 Cash and cash equivalents at the beginning of the year 7,8 694.083 337.704 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 7,8 1.527.238 694.083 5 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.