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Annual report and accounts 2016

222 Glossary Adjusted

222 Glossary Adjusted aircraft operating leases Aircraft operating lease costs multiplied by 0.67 Adjusted earnings per share Adjusted gearing Adjusted net debt Available seat kilometres (ASK) Available tonne kilometres (ATK) Block hours Cargo revenue per CTK Cargo tonne kilometres (CTK) Dividend cover EBITDAR Earnings per share (EPS) Equity free cash flow Interest cover Invested capital Lease adjusted operating margin Manpower equivalent Merger effective date Net debt Net depreciation rate Net promoter score (NPS) Earnings are based on results before exceptional items, after tax adjusted for earnings attributable to equity holders and interest on convertible bonds, divided by the weighted average number of ordinary shares, adjusted for the dilutive impact of the assumed conversion of the bonds and employee share schemes outstanding Adjusted net debt, divided by adjusted net debt and adjusted equity Net debt plus capitalised operating aircraft lease costs The number of seats available for sale multiplied by the distance flown The number of tonnes of capacity available for the carriage of load (passenger and cargo) multiplied by the distance flown Hours of service for aircraft, measured from the time that the aircraft leaves the gate at the departure airport to the time that it arrives at the gate at the destination airport Cargo revenue divided by CTK The number of tonnes of cargo that generate revenue (freight and mail) carried multiplied by the distance flown The number of times profit for the year covers the dividends paid and proposed Operating profit before depreciation, amortisation and rental charges Earnings are based on results after exceptional items, after tax adjusted for earnings attributable to equity holders and interest on convertible bonds, divided by the weighted average number of ordinary shares, adjusted for the dilutive impact of the assumed conversion of the bonds and employee share schemes outstanding. EBITDA before exceptional items less cash tax, cash interest paid and received and cash capital expenditure net of proceeds from sale of property, plant and equipment and intangible assets. The number of times profit before taxation and net interest expense and interest income cover the net interest expense and interest income Fleet net book value at the balance sheet date, excluding progress payments and adjusted for inflation, plus the net book value of the remaining property, plant and equipment plus annual aircraft operating lease costs multiplied by 8 Operating result less aircraft operating lease cost plus adjusted aircraft operating lease costs divided by revenue Number of employees adjusted for part-time workers, overtime and contractors January 21, 2011, the date British Airways and Iberia signed a merger agreement to create International Airlines Group Current and long-term interest-bearing borrowings less other current interest bearing deposits and cash and cash equivalents Gross book value divided by net book value Metric based on survey responses to the “likelihood to recommend” question and is calculated by subtracting the percentage of customers who are ‘Detractors’ ( unlikely to recommend) from the percentage of customers who are ‘Promoters’ (likely to recommend) INTERNATIONAL AIRLINES GROUP Annual Report and Accounts 2016

223 Operating margin Overall load factor Passenger load factor Operating profit/(loss) as a percentage of total revenue RTK expressed as a percentage of ATK RPK expressed as a percentage of ASK Punctuality The industry’s standard, measured as the percentage of flights departing within 15 minutes of schedule Regularity The percentage of flights completed to flights scheduled, excluding flights cancelled for commercial reasons Return on invested capital (RoIC) EBITDAR less adjusted aircraft operating lease costs, fleet depreciation charge adjusted for inflation, and the depreciation charge for other property, plant and equipment, divided by invested capital. It is expressed as a percentage Revenue passenger kilometres (RPK) The number of passengers that generate revenue carried multiplied by the distance flown Passenger unit revenue per ASK (PASK) Passenger revenue divided by ASK Passenger revenue per RPK (yield) Passenger revenue divided by RPK Revenue tonne kilometres (RTK) The revenue load in tonnes multiplied by the distance flown Sector A one-way revenue flight Total capital Total equity plus net debt Total Group revenue per ASK (RASK) Total group revenue divided by ASK Total operating expenditure excluding Total operating expenditure excluding fuel divided by ASK fuel per ASK Total operating expenditure per ASK Total operating expenditure divided by ASK (CASK) Total traffic revenue per ATK Revenue from total traffic (passenger and cargo) divided by ATK Strategic Report Corporate Governance Financial Statements Additional Information www.iairgroup.com

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    INTERNATIONAL AIRLINES GROUP The be

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    Strategic report “2016 was a chal

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    3 Chairman’s letter A firm focus

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    5 Q A And, importantly, we have to

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    7 IAG combines the leading airlines

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    9 Operating highlights British Airw

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    11 Business model and strategy Maxi

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    13 4 5 6 Grow share of Europeto-Afr

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    15 The performance indicators prese

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    17 IT This year significant work ha

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    19 and additional summer aircraft a

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    21 This is why we have recently lau

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    23 Aer Lingus Making the most of ou

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    25 IAG Cargo Resilient performance

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    27 Risk management and principal ri

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    29 Risk Potential impact Management

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    31 Risk Potential impact Management

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    33 Financial overview A significant

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    35 However, continued weakness in t

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    37 Exchange impact before exception

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    39 By supplier cost category: Handl

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    41 Capacity 21% 11% 8% 60% Operatin

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    43 Cash flow € million 2016 2015

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    45 Sustainability Committed to our

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    47 UN Sustainable Development Goals

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    49 Aspect and link to SDGs Noise Wa

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    51 Air quality - electric tug trial

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    “2016 has really tested the Group

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    55 I think we can be very proud tha

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    57 James Lawrence Non-Executive Dir

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    59 The Group operating companies Av

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    61 The Board Secretary is Álvaro L

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    63 Induction programme New director

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    65 Other statutory information Dire

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    67 The significant shareholders of

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    69 Report of the Audit and Complian

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    71 ICFR, which is a Spanish Corpora

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    73 The Committee’s responsibiliti

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    75 Report of the Safety Committee D

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    77 Despite a growth in share price

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    79 The table below summarises the m

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    81 Malus and Clawback Provisions Th

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    83 Service contracts and exit payme

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    85 Annual Remuneration Report Commi

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    87 Additional explanations in respe

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    89 IAG PSP Award 2014 The IAG PSP a

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    91 Statement of Voting The table be

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    93 IAG’s total shareholder return

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    95 The second performance condition

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    97 Incentive Award Deferral Plan Th

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    Strategic Financial Statements Repo

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    101 Consolidated statement of other

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    103 Consolidated cash flow statemen

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    105 Consolidated statement of chang

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    107 the Income statement. All other

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    109 b Other interest-bearing deposi

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    111 Employee leaving indemnities an

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    113 IAG has initiated a project to

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    115 For the year to December 31, 20

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    117 7 Auditors’ remuneration The

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    119 For the year to December 31, 20

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    121 c Reconciliation of the total t

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    123 13 Property, plant and equipmen

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    125 16 Intangible assets and impair

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    127 Basis for calculating recoverab

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    129 19 Trade and other receivables

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    131 2 Floating rate euro mortgage l

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    133 depending on whether the employ

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    135 At December 31, 2016 the Group

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    137 27 Financial instruments a Fina

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    139 The carrying amounts and fair v

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    141 December 31, 2015 Financial ins

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    143 31 Other reserves and non-contr

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    145 Defined benefit schemes i. APS

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    147 d Fair value of scheme assets A

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    149 e Present value of scheme liabi

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    151 33 Contingent liabilities and g

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    Spanish corporate governance report

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    155 Indicate the most significant m

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    157 Explain any significant changes

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    159 B. SHAREHOLDERS’ MEETING B.1

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    161 C.1.3 Complete the following ta

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    163 Individual or corporate name of

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    165 When reviewing board appointmen

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    167 C.1.10 Indicate what powers, if

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    169 Selection of directors In ident

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  • Page 187 and 188: 185 c) Steps taken during the year:
  • Page 189 and 190: 187 C.2.2 b) Functions The main fun
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  • Page 199 and 200: 197 The financial risk assessment i
  • Page 201 and 202: 199 F.3.2 Internal control policies
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  • Page 211 and 212: 209 52. The terms of reference of s
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  • Page 227 and 228: 225 In 2015, the definition of inve
  • Page 229 and 230: 227 Sustainability indicators Indic
  • Page 231 and 232: Shareholder information Registered
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