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Annual report and accounts 2016

226 Alternative

226 Alternative performance measures continued Equity free cash flow Equity free cash flow is EBITDA 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. EBITDA is calculated as operating profit before exceptional items, depreciation, amortisation and impairment. € million 2016 2015 Operating profit before exceptional items 2,535 2,335 Depreciation, amortisation and impairment 1,287 1,307 EBITDA 3,822 3,642 Interest paid (185) (197) Interest received 37 48 Tax paid (318) (245) Acquisition of property plant and equipment and intangible assets (3,038) (2,040) Proceeds from sale of property, plant and equipment and intangible assets 1,737 273 Equity free cash flow 2,055 1,481 INTERNATIONAL AIRLINES GROUP Annual Report and Accounts 2016

227 Sustainability indicators Indicator Units 2016 2015 11 2014 2013 2012 Total energy consumption from jet fuel, gas and electricity Greenhouse gas (GHG) emissions 1 2 3 4 Direct (Scope 1) Indirect (Scope 2) Other indirect (Scope 3) (2016- 2015) Megawatt hours 108,386,850 101,051,244 96,712,371 91,062,826 89,350,479 7.3% Tonnes CO 2 e 28,264,447 26,335,726 25,219,827 23,664,495 23,249,641 7.3% Tonnes CO 2 e 123,345 115,304 113,833 118,036 132,610 7.0% Tonnes CO 2 e 7,640,028 5,419,599 5,179,537 4,871,126 n/a 41.0% GHG emissions intensity (grammes of carbon dioxide per passenger kilometre) 1 2 4 gCO 2 /pkm 94.3 96.0 98.2 100.4 101.2 (1.8%) CO 2 emissions intensity for flight operations only gCO 2 /pkm 93.7 95.4 97.5 99.7 100.5 (1.8%) Percentage of aircraft fleet that meet ICAO technology standard for noise 5 6 Noise Chapter 4 % 99.0% 99.0% 98.7% 93.1% 90.9% - Noise Chapter 14 10 % 46.0% n/a n/a n/a n/a n/a Percentage of aircraft fleet that meet ICAO CAEP technology standards for Oxides of Nitrogen (NOx) emissions 5 6 NOx CAEP 4 % 95.0% 93.0% 91.7% 89.7% 87.5% 2.0pts NOx CAEP 6 % 67.0% 65.0% 61.7% 56.1% 48.0% 2.0pts NOx CAEP 8 10 % 24.0% n/a n/a n/a n/a n/a Water consumption at main sites 10 Cubic metres 500,868 543,028 501,219 n/a n/a (7.8%) Waste produced at main sites excluding suppliers 7 10 Tonnes 8,204 10,546 9,932 n/a n/a (22.2%) Average age of aircraft fleet Years 10.8 10.8 10.5 11.1 11.8 - Average manpower equivalent Number 63,387 60,892 59,484 60,089 59,574 4.1% Number of new permanent hires in calendar year Number 4,286 5,216 3,670 2,647 4,389 (17.8%) Average hours of training per year, per employee Hours 36.7 36.1 37.3 35.6 35.0 1.7% Monetary value of significant fines for non-compliances with laws and regulations 8 10 Euros 1,209,114 468,576 392,359 n/a n/a 158% Total customer and colleague direct and in-kind donations to charity 9 Euros 9,318,294 11,457,171 13,515,678 15,058,811 20,139,797 (18.7%) Strategic Report Corporate Governance Financial Statements Additional Information Notes 1 GHG indicators represent the most accurate figures available at date of publication. The IAG Investor CDP report available later in the year will contain the finalised data. 2 IAG has reported all GHG emissions sources required under the 2006 Companies Act (Strategic and Directors’ Reports) Regulations 2013. IAG uses the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (revised edition), applying an operational control boundary. 3 The GHG emissions are split into Scope 1 (direct, burning jet fuel and natural gas), Scope 2 (indirect, electricity), and Scope 3 (indirect, upstream fossil fuel production). 4 The emissions data was calculated by applying the UK Government’s GHG conversion factors for Company Reporting (2012 to 2016). 5 The International Civil Aviation Organization’s Committee on Aviation Environmental Protection (CAEP) establishes international standards for aircraft noise and engine emissions. Oxides of Nitrogen (NOx) emissions are relevant to local air quality around airports. The ICAO CAEP 4 and 6 NOx standards were applicable for engines first manufactured after December 31, 2003 and December 31, 2007 respectively and the newer CAEP 8 standards apply from 2014. The ICAO CAEP Chapter 4 technology standard for aircraft noise applies to new aircraft certified on or after January 1, 2006 and Chapter 14 is applicable for new aircraft certified from January 1, 2017. 6 Noise and NOx indicators include the combined performance of all airlines in the Group. Historic values have been revised in line with this and therefore are different to those shown in previous reports. 7 Waste figures exclude Vueling. 8 Figures referring to monetary fines relate to British Airways, Iberia, Vueling and Aer Lingus. In 2016 we included €828,000 fines related to disruptions suffered during the summer. 9 Figures referring to charity donations for 2013 and 2012 relate to British Airways and Iberia only. 2014 includes Vueling also and 2015 also includes Aer Lingus from August 18, 2015. Euro to pound sterling conversion rate full year average for 2016 of 1.2347. 10 These indicators are being disclosed for the first time in 2016, in these instances historic data is unavailable. 11 All figures for IAG 2015 include Aer Lingus from August 18, 2015. 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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    171 C.1.20 ter List any business re

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    173 C.1.31 Indicate whether the con

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  • Page 231 and 232: Shareholder information Registered
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