International Consolidated Airlines Group. S.A.

Annual / Quarterly Financial Statement • Mar 5, 2025

Financial Report 2024 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Financial statements for the year to 31 December 2024 CONTENTS • Balance sheet at 31 December 20241 • Income statement for the year to 31 December 20242 • Statement of changes in equity for the year to 31 December 20243 • Cash flow statement for the year to 31 December 20245 • Notes to the financial statements for the year to 31 December 20246 MANAGEMENT REPORT FOR THE YEAR TO 31 DECEMBER 2024 STATEMENT OF DIRECTORS’ RESPONSIBILITIES 1 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Balance sheet at 31 December 2024 (Expressed in thousands of euros) Note 2024 2023 ASSETS NON-CURRENT ASSETS 9.377.367 9.812.384 Intangible assets 6 23.741 6.472 Property, plant and equipment 7 43.587 61.986 Investments in Group companies Equity instruments 8 7.483.507 7.483.506 Loan receivable from Group companies 9,16 1.655.156 2.102.789 Non-current financial assets Equity instruments 9 152.972 152.250 Other financial asset 3.625 - Deferred tax asset 12 14.779 5.381 CURRENT ASSETS 2.791.104 1.588.937 Trade and other receivables Clients, Group companies 9,16 126.502 187.530 Current tax receivable 12 51.003 7.810 Other receivables 9 23.848 13.554 Investments in Group companies Loan receivable from Group companies 9,16 207.531 25.824 Cash and cash equivalents Cash 9,10 138.517 151.605 Cash equivalents 9,10 2.243.703 1.202.614 TOTAL ASSETS 12.168.471 11.401.321 EQUITY AND LIABILITIES EQUITY 9.290.522 8.645.732 SHAREHOLDERS’ FUNDS Capital Registered share capital 11 497.147 497.147 Share premium 11 7.770.439 7.770.439 Reserves Legal and statutory reserves 11 99.429 99.429 Other reserves 11 163.660 186.132 Own shares and equity holdings 11 (286.777) (99.333) Profit/(loss) for the year 3 941.797 (22.749) Interim dividend (147.026) - Other equity instruments 11 163.711 118.843 VALUATION ADJUSTMENTS Valuation adjustments to financial assets at fair value through equity 11 87.978 106.562 Translation differences 11 164 (10.738) LIABILITIES NON-CURRENT LIABILITIES 1.185.742 1.679.913 Non-current debt Bond and other marketable securities 9 1.184.800 1.678.905 Deferred tax liability 12 942 1.008 CURRENT LIABILITIES 1.692.207 1.075.676 Current provisions 12 600 600 Current debt Bond and other marketable securities 9 1.559.632 782.616 Group companies, current 9,16 - 209.137 Trade and other payables Suppliers, Group companies 9,16 39.572 17.567 Various creditors 9 52.903 39.976 Current tax payable 12 - 248 Other amounts due to tax authorities 12 39.500 25.532 TOTAL EQUITY AND LIABILITIES 12.168.471 11.401.321 2 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Income statement for the year to 31 December 2024 (Expressed in thousands of euros) Note 2024 2023 Continuing operations Revenue from operations 1.464.314 248.993 Rendering of services to Group companies 13,16 100.884 71.991 Dividend income 16 1.189.253 - Finance income receivable from debt with Group companies and associates 13,16 174.177 177.002 Employee costs 13 (86.967) (65.920) Wages, salaries and other costs (74.050) (55.902) Social security costs (12.917) (10.018) Other operating expenses (175.778) (47.762) External services received (117.519) (44.876) Other operating expenses (58.259) (2.886) Depreciation, amortisation and impairment (2.445) - Amortisation of intangible assets (2.445) - Finance costs (1.443) (5.764) Payable on debt with Group companies and associates 16 (1.443) (5.764) OPERATING PROFIT 1.197.681 129.547 Finance income 62.558 54.504 Receivable from third parties 13 62.558 54.504 Finance costs (59.764) (63.622) Payable on debt with third parties 13 (59.764) (63.622) Change in fair value of financial instruments 13 (280.488) (130.119) Currency differences (504) (2.368) NET FINANCE EXPENSE (278.198) (141.605) PROFIT/(LOSS) BEFORE TAX 919.483 (12.058) Taxes 12 22.314 (10.691) PROFIT/(LOSS) FOR THE YEAR 3 941.797 (22.749) 3 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Statement of changes in equity for the year to 31 December 2024 (Expressed in thousands of euros) A) Statement of other comprehensive income Note 2024 2023 PROFIT/(LOSS) FOR THE YEAR 3 941.797 (22.749) Income and expenses recognised directly in equity Fair value movements on other equity investments 9 (18.650) 105.700 Currency differences 10.902 2.135 Tax effect 12 66 (1.008) TOTAL INCOME AND EXPENSES RECOGNISED DIRECTLY IN EQUITY 11 (7.682) 106.827 TOTAL INCOME AND EXPENSES RECOGNISED 934.115 84.078 4 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Statement of changes in equity for the year to 31 December 2024 (Expressed in thousands of euros) B) Statement of changes in equity Issued share capital Share premium Reserves Own shares and equity holdings (Loss)/profit for the year Interim dividend Other equity instruments Valuation adjustments TOTAL BALANCE AT 31 DECEMBER 2022 497.147 7.770.439 322.250 (28.012) 50.586 - 75.312 (11.003) 8.676.719 Total recognised income and expense - - - - (22.749) - - 106.827 84.078 Transactions with shareholders and owners - - 2.030 (71.321) - - (8.385) - (77.676) Acquisition of treasury shares - - - (76.716) - - - - (76.716) Vesting of share-based payment schemes - - 2.030 5.395 - - (8.385) - (960) Other movements in equity - - (89.305) - - - 51.916 - (37.389) Share-based payments charge (note 17) - - - - - - 51.916 - 51.916 Reverse merger of Veloz and Vueling (note 8.1) - - (89.305) - - - - - (89.305) Appropriation of prior year profit - - 50.586 - (50.586) - - - - BALANCE AT 31 DECEMBER 2023 497.147 7.770.439 285.561 (99.333) (22.749) - 118.843 95.824 8.645.732 Total recognised income and expense - - - - 941.797 - - (7.682) 934.115 Transactions with shareholders and owners - - 277 (187.444) - (147.026) (32.513) - (366.706) Acquisition of treasury shares - - - (210.973) - - - - (210.973) Vesting of share-based payment schemes - - 409 23.529 - - (32.513) - (8.575) Transaction costs on share buyback - - (132) - - - - - (132) Dividend - - - - - (147.026) - - (147.026) Other movements in equity - - - - - - 77.381 - 77.381 Share-based payments charge (note 17) - - - - - - 77.381 - 77.381 Appropriation of prior year loss - - (22.749) - 22.749 - - - - BALANCE AT 31 DECEMBER 2024 497.147 7.770.439 263.089 (286.777) 941.797 (147.026) 163.711 88.142 9.290.522 5 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Cash flow statement for the year to 31 December 2024 (Expressed in thousands of euros) Note 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Profit/(loss) for the year before tax Profit/(loss) from continued operations 919.483 (12.058) Adjustments to profit/(loss) Finance income 13 (236.735) (231.506) Dividend income (1.189.253) - Finance costs 13 61.207 69.386 Change in fair value of financial instruments 13 280.488 130.119 Currency differences 504 2.368 Share-based payments 17 15.456 10.376 Amortisation of intangible assets 2.445 - Air Europa Holdings termination settlement payment 50.000 - Changes in working capital Trade and other payables 14.724 14.131 Trade and other receivables 134.022 28.807 Other cash flows from operating activities Interest paid (782) (3.022) Taxation (paid)/received (24.626) 13.312 Dividend received from Group companies 1.189.253 - CASH FLOWS FROM OPERATING ACTIVITIES 1.216.186 21.913 CASH FLOWS FROM INVESTING ACTIVITIES Amounts paid Purchase of other equity instruments (19.507) (5.127) Purchase of Property, plant and equipment 7 (5.269) (43.901) Purchase of Intangible assets 6 (19.553) (6.426) Amount paid to Group companies (118.500) - Increase in Other financial assets 9 (3.625) - Air Europa Holdings termination settlement payment (50.000) - Amounts received Proceeds from sale of Property, plant and equipment 26.084 90.485 Interest received 57.648 54.431 Amount received from Group companies 557.785 152.196 CASH FLOWS FROM INVESTING ACTIVITIES 425.063 241.658 CASH FLOWS FROM FINANCING ACTIVITIES Receipts and payments on equity instruments Acquisition of treasury shares (201.609) (76.716) Repayment of equity instruments (9.281) (9.284) Repayment Debt with Credit institutions (47.500) (550.000) Debt with Group companies (210.331) (413.820) Settlement of derivative financial instruments (87) - Dividend payments and receipts from other equity instruments Dividend paid 3 (147.026) - CASH FLOWS FROM FINANCING ACTIVITIES (615.834) (1.049.820) IMPACT OF EXCHANGE DIFFERENCES 2.586 (789) INCREASE IN CASH AND CASH EQUIVALENTS 1.028.001 (787.038) Cash and cash equivalents at the beginning of the year 9,10 1.354.219 2.141.257 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 9,10 2.382.220 1.354.219 6 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements 1. CORPORATE INFORMATION AND ACTIVITY International Consolidated Airlines Group, S.A. (hereinafter the ‘Company’ or ‘IAG’) is a Spanish company formed to hold the interests of airline and ancillary operations, and is registered in Madrid and was incorporated on 17 December 2009. IAG is the parent company of British Airways, Iberia, Vueling, Aer Lingus, IAG Cargo Ltd (hereinafter ‘IAG Cargo’), IAG GBS, AERL Holding Limited (hereinafter ‘AERL Holding'), Fly Level S.L., Fly Level Barcelona LH S.L. and IAG Connect all collectively defined as the ‘Group’. The Group presents consolidated financial statements separately. These will be deposited at the Madrid Mercantile Registry and the FCA in London on 5 March 2025. On 21 January 2011 British Airways Plc and Iberia Líneas Aéreas de España S.A. Operadora (hereinafter ‘British Airways’ and ‘Iberia’ respectively) completed a merger transaction becoming the first two airlines of the Group. Vueling Airlines, S.A. (hereinafter ‘Vueling’) was acquired on 26 April 2013 and Aer Lingus Group DAC (hereinafter ‘Aer Lingus’) was acquired on 18 August 2015. During 2017, the Group incorporated Fly Level S.L. (hereinafter 'Fly Level') and IAG Connect Limited (hereinafter ‘IAG Connect’), with a 100% investment by the Company. During 2024 the Group incorporated Fly Level Barcelona LH S.L. (hereinafter Fly Level Barcelona) acquiring 100% investment. The objective and main activity, among others, of the Company is the acquisition, ownership, management and disposal of shares or other equity interests in other companies, provision of management services to those companies, and significant Group investments including aircraft procurement. Following a shareholder meeting of Vueling Airlines, S.A. (‘Vueling’) on 29 December 2023, Veloz Holdco S.L.U. (‘Veloz') (legally absorbed entity) and Vueling (legally absorbing entity) completed a reverse merger in which Vueling absorbed Veloz by means of the block transfer of the entire assets of Veloz. Prior to the reverse merger, the Company owned 100% of the share capital of Veloz, which in turn owned 49,39% of Vueling, with Iberia Líneas Aéreas de España, S.A. Operadora (‘Iberia LAE’) (which the Company owns indirectly through its direct investment in IB Opco Holding, S.L. (hereinafter 'IB Opco Holding') owning 50,10% and a further 0,51% held by shareholders external to the Group. Subsequent to the merger, the Company holds a direct investment in Vueling of 49,39%, such that the investment in Veloz has been allocated proportionally to the shareholding. For further information refer to note 8.1. IAG is a Spanish Private Law entity, incorporated for an indefinite period by virtue of a public deed granted before the Public Notary of Madrid Ignacio Martínez-Gil Vich on 17 December 2009 under number 3.866 of his files, with its registered office in Madrid, at El Caserío, Iberia Zona Industrial nº 2 (La Muñoza), Camino de La Muñoza, s/n, 28042, Madrid, Spain and entered at the Madrid Mercantile Registry with registration number M-492129 in Volume 27312, Book 0, Section 8, Folio 11. IAG holds a premium listing on the FTSE’s UK index series. IAG shares are traded on the London Stock Exchange’s main market for listed securities and also on the stock exchanges of Madrid, Barcelona, Bilbao and Valencia (the ‘Spanish Stock Exchanges’), through the Spanish Stock Exchanges Interconnection System (‘Mercado Continuo Español’). The Company's presentation currency is euro. The United Kingdom (‘UK’) branch's functional currency is pound sterling as this is the currency of the economic environment in which it operates. 2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS Applicable financial reporting framework The financial statements have been prepared in accordance with the accounting principles approved by Royal Decree 1514/2007, of 16 November 2007, which was amended in 2016 by Royal Decree 602/2016 of 2 December 2016, and in 2021 by Royal Decree 1/2021, and the remaining prevailing mercantile law. These financial statements have been prepared by the Directors of the Company for submission to and for approval at the General Shareholders’ Meeting, where it is expected they will be approved without modification. The figures shown in these financial statements are presented in thousands of euros unless otherwise indicated. Going concern At 31 December 2024, the Company had cash and cash equivalents of €2.382 million and the Group had total liquidity of €13.362 million (31 December 2023: total liquidity of €11.624 million), comprising cash and interest-bearing deposits of €9.828 million, €3.400 million of committed and undrawn general facilities and a further €134 million of committed and undrawn aircraft specific facilities. At 31 December 2024 the Company has no financial covenants associated with its loans and borrowings. In its assessment of going concern, the Company and the Group have modelled two scenarios referred to below as the Base Case and the Downside Case over the period of at least 12 months from the date of the approval of the consolidated financial statements (the ‘going concern period’). The Group’s three-year business plan, used in the creation of the Base Case, was prepared for and approved by the Board in December 2024. The business plan takes into account the Board’s and management’s views on capacity based on the potential impact of the wider economic and geopolitical environments on the Company and the Group’s businesses across the going concern period. The key inputs and assumptions underlying the Base Case through to 31 March 2026, include: • the Company and the Group have assumed that the committed and undrawn general facilities of €3.400 million available to the Group will not be drawn over the going concern period. The availability of certain of these facilities reduces over time, with €2.193 million being available to the Group at 31 March 2026; 7 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 2.BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS continued • The Group has €2.651 million of capital commitments due to be paid over the period to 31 March 2026; • the Company and the Group have assumed that the €500 million bond that matures in March 2025 will not be refinanced; • the Company and the Group has incorporated the redemption, as detailed in note 19, prior to maturity, of €577 million from the €500 million 2027 bond and the €700 million 2029 bond; • while the Company and the Group do not expect to finance all expected deliveries over the going concern period, for those expected to be financed, the Company and the Group have forecast securing 100%, or €1.001 million, of the aircraft financing that is currently uncommitted, to align with the timing and payments for those aircraft deliveries expected to be financed, including aircraft delivered in 2024 that had not had their financing secured at the balance sheet date; and • the shareholder returns detailed in note 19. The Downside Case applies stress to the Base Case to model adverse commercial and operational impacts over the going concern period, represented by: reduced levels of capacity operated in each month, including reductions of at least 25% for three months over the going concern period; reduced passenger unit revenue per ASK; increases in the price of jet fuel by 20% above that assumed in the Base Case; and increased operational costs. In the Downside Case, over the going concern period capacity would be 10% down when compared to the Base Case. The Downside Case assumes that British Airways and Iberia would be required to draw down, in full, its portion of the available US dollar Revolving Credit Facility. The Directors consider the Downside Case to be a severe but plausible scenario. Having reviewed the Base Case and Downside Case, the Directors of the Company have a reasonable expectation that the Company and the Group have sufficient liquidity to continue in operational existence for a period of at least 12 months from the date of approval of these financial statements and hence continue to adopt the going concern basis in preparing the financial statements at 31 December 2024. 2.1. True and fair view The accompanying financial statements have been prepared from the Company's accounting records in accordance with prevailing Spanish accounting legislation to give a true and fair view of its equity, financial position and reserves. The cash flow statement has been prepared to present fairly the origin and usage of monetary assets, such as cash and cash equivalents. The annual accounts for 2024 shall be submitted for the approval in the Shareholders' Meeting in June 2025, and it is expected that they will be approved without any modification. 2.2. Comparative information According to corporate law, the prior year information in the Balance sheet, Income statement, Statement of other comprehensive income, Statement of changes in equity and Cash flow statement is presented for comparison purposes, in addition to figures for 2024. The notes to the financial statements also include quantitative information for the prior year, unless an accounting standard specifies that it is not necessary. The notes to the financial statements for the prior year include reclassifications that were made to conform to the current year presentation. The amendments have no material impact on the financial statements. Balance sheet – presentation of convertible bond As a result of the amendments to IFRS issued by the IASB on 31 October 2022 (Amendments to IAS 1 – Classification of liabilities as current or non-current), which are considered relevant comparable accounting principles, and in the absence of specific regulation under Spanish GAAP, the Company changed the presentation of the €825 million convertible bond that matures in 2028 and reclassified it from a non-current liability to a current liability with the comparative presentation at 31 December 2023 also reclassified. Refer to note 9.2 for further details. The Amendments require that where the conversion feature of a convertible instrument does not meet the recognition criteria for separate presentation within equity, and where the associated bond holders have the irrevocable right to exercise the conversion feature within 12 months of the balance sheet date, such convertible instruments be presented as current. 2.3. Critical accounting estimates and assumptions The Directors have prepared the financial statements using estimates and assumptions based on current and historical experience and various other factors that affect the reported value of the assets and liabilities, and are considered reasonable under the circumstances. The carrying amount of assets and liabilities, which are not readily apparent from other sources, is established on the basis of these estimates. The Directors are not aware of any specific risks that might significantly alter the value of the assets or liabilities in the following year and, therefore, considers that it is not necessary to make estimates of uncertainty at the end of the reporting period. 8 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 2.BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS continued 2.3Critical accounting estimates and assumptions continued Impairment of investments in Group companies The Company assesses whether there are any indicators of impairment for equity investments in Group companies. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amounts of equity investments in Group companies have been determined based on the future forecast cash flows of the investments, which require the use of estimates and assumptions, including three year business plan assumptions, long-term growth rates and discount rates. Impairment losses can be reversed and recognised in the Income statement if there is any indication that the impairment loss no longer exists. The reversal is limited to the carrying value of the asset that would have been recognised on the reversal date had the original impairment not occurred. Determining whether the Company has significant influence over Air Europa Holdings The Company applies judgement in the determination as to whether it has the power with which to participate in the decision making of, and as a result significant influence over, Air Europa Holdings. Such judgement includes the consideration as to the ability of the Company to: have representation on the board of Air Europa Holdings; participate in the policy-making processes, including participation in decisions regarding dividends and other distributions; the existence of material transactions between Air Europa Holdings and the Company; enable the interchange of management personnel; and provide essential technical information. In forming its judgement, the Company notes that: it does not have the ability to have representation on the board of Air Europa Holdings; it does not have the ability to participate in the policy-making processes; has not entered into material transactions outside of the normal course of business, with those transactions arising in the normal course of business being immaterial in nature; it does not have the ability to enable the interchange of management personnel and it does not have the ability to provide essential technical information. The Company has therefore concluded that it does not have significant influence over Air Europa Holdings. Accordingly, the Company accounts for its shareholding in Air Europa Holdings as an Equity instrument and measures it at fair value through other comprehensive income. Had the Company concluded that it does have significant influence over Air Europa Holdings, then the shareholding would have been classified as an associate measured at cost on inception and subsequently measured using the equity method. At 31 December 2024, the fair value of its shareholding in Air Europa Holdings was €139 million. Further information is given in note 9.1.2. 3. APPROPRIATION OF PROFIT/(LOSS) The appropriation of the 2023 result was approved in the Shareholders’ Meeting dated 26 June 2024. The Board of Directors will submit the following proposed appropriation of the 2024 result for approval at the Shareholders' Meeting in June 2025: €'000 2024 2023 Proposed appropriation: Profit/(loss) for the year 941.797 (22.749) 941.797 (22.749) Appropriation to: Interim dividend 147.026 - Final dividend 288.000 - Voluntary reserve 506.771 - Prior year reserves - (22.749) 941.797 (22.749) 9 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 3.APPROPRIATION OF BASIS OF PROFIT/(LOSS) continued 3.1. Interim dividend On 1 August 2024 the Board of Directors approved an interim dividend of €0,03 per share. The interim cash dividend was paid on 9 September 2024 for a total amount (net of withholding tax of €27.935.000) of €147.026.000. The withholding tax was paid from September 2024. In accordance with article 277 of the Spanish Corporations Law, the following table shows the statement (unaudited) issued by the Directors to substantiate that the Company had sufficient liquidity to distribute the interim dividend (expressed in thousands of euros): Accounting statement Six months to 30 June 2024 Amount (€ thousand) Net profit (after estimated tax) for the period from 1 January to 30 June 2024 277.792 Losses from prior years - Mandatory allocations to reserves - Distributable income for the period 277.792 Proposed interim dividend (maximum amount) 146.969 Liquidity statement (funds available for distribution) Cash and cash equivalents 1.942.774 Cash deposits maturing after the payment date of the proposed interim dividend (360.000) Estimation of additional net outflows until the payment date of the proposed interim dividend (38.000) Payment of Air Europa Holdings termination fee (50.000) Available credits - Total estimated funds available at the payment date of the proposed interim dividend 1.494.774 3.2. Final dividend On 27 February 2025 IAG’s Board of Directors proposed a distribution in cash of a final dividend of €0,06 per share. The proposed final dividend is subject to approval at the annual general meeting and subject to approval, will be recognised as a liability on that date. The proposed final dividend would be distributed from net profit for the year to 31 December 2024. €'000 2024 2023 Cash dividends on ordinary shares declared Interim dividend for 2024 of €0,03 per share (2023: Nil) 147.026 - Proposed dividends on ordinary shares Final dividend for 2024 of €0,06 per share 288.000 - 3.3. Limitations on the distribution of the profit British Airways agreed with the Trustee of its main UK defined benefit pension scheme (NAPS) as part of the triennial valuation as at 31 March 2021 that, subject to the scheme being in technical deficit, any dividends paid to IAG from 1 January 2025 to 30 September 2025, in excess of 50% of British Airways’ profit after tax will trigger a pension contribution of 50% of the amount of the dividend in excess of the 50% of profit after tax. At 31 December 2024, NAPS was in technical surplus, and any dividend that British Airways were to pay to IAG, would not trigger a payment into NAPS unless NAPS were to move back into technical deficit. The Company is obliged to transfer 10% of the profit for the year to a legal reserve until this reserve reaches an amount at least equal to 20% of share capital. Unless the balance of the reserve exceeds this amount, it cannot be distributed to shareholders. As at 31 December 2024 and 2023 the legal reserve included the minimum amount required by law. The non-distributable reserves at 31 December 2024 are €966.720.000 (2023: €966.720.000). Once the guidance provided by the law or the statutes has been covered, dividends can only be distributed from profit for the year, or from distributable reserves, if the value of equity is not or, does not become as a result of the distribution, lower than share capital. In this case, the profit charged directly to equity cannot be distributed, directly or indirectly. If losses from previous years existed, that make the Company’s equity lower than share capital, the profits would be used to compensate those losses. 10 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 4. RECOGNITION AND MEASUREMENT ACCOUNTING POLICIES The main recognition and measurement accounting policies applied in the preparation of the 2024 financial statements are the following: 4.1. Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the Company. All other lease arrangements are classified as operating leases. For operating leases, the total minimum payments, measured at inception, are charged to the Income statement in equal annual amounts over the term of the lease. 4.2. Intangible assets The cost to purchase or develop computer software that is separable from an item of related hardware is capitalised separately and amortised on a straight-line basis generally over a period not exceeding five years. 4.3. Property, plant and equipment Property, plant and equipment are held at cost. Depreciation is calculated to write off the cost less the estimated residual value on a straight-line basis, over the economic life of the asset. 4.4. Investments in Group companies Equity investments in Group companies include investments in entities over which the Company has control. On initial recognition the investments are measured at fair value, which generally is equal to the fair value of the consideration paid, plus directly attributable transaction costs. Equity investments are subsequently measured at cost less, where appropriate, provisions for impairment, or distributions received recognised against the cost of the investment, if applicable. 4.5. Impairment of non-financial assets Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the value by which the asset’s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and value-in-use. Non-financial assets other than goodwill that were subject to an impairment are reviewed for possible reversal of the impairment at each balance sheet date. 4.6. Financial instruments The Company classifies financial instruments on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the economic substance of the contractual arrangement and the definitions of a financial asset, a financial liability and an equity instrument. The Company recognises a financial instrument when it becomes party to the contract or legal transaction, in accordance with the terms set out therein, either as the issuer or as the holder or acquirer thereof. The Company classifies financial instruments into the following categories: financial assets and financial liabilities at fair value through profit or loss and financial assets and financial liabilities measured at amortised cost. Other equity investments, on initial recognition, are irrevocably designated as measured at fair value through other comprehensive income. They are subsequently measured at fair value, with changes in fair value recognised in other comprehensive income with no recycling of these gains and losses to the Income statement when the investment is sold. The Company classifies investments in equity instruments of Group companies and associates, and investments in equity instruments whose fair value cannot be determined by reference to a quoted price in an active market for an identical asset, or cannot be reliably estimated, at cost. All other financial assets are classified at fair value through profit or loss. The Company designates a financial liability at initial recognition as measured at fair value through profit or loss when doing so eliminates or significantly reduces a measurement or recognition inconsistency or mismatch that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The Company classifies all other financial liabilities at amortised cost. i. Offsetting principles A financial asset and a financial liability are offset only when the Company currently has the legally enforceable right to offset the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. 11 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 4.RECOGNITION AND MEASUREMENT ACCOUNTING POLICIES continued 4.6Financial instruments continued ii. Financial assets and financial liabilities Financial assets and financial liabilities are classified, upon initial recognition, as measured at amortised cost, fair value through other comprehensive income (OCI), or fair value through profit or loss. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets . The classification of financial assets at initial recognition depends on the financial assets contractual cash flow characteristics and the Group’s business model for managing them. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest’ (SPPI) on the principal amount outstanding. A financial asset that is not SPPI is classified and measured at fair value through profit or loss. This assessment is performed on an instrument by instrument basis. The Group’s business model for managing financial assets establishes how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling. iii. Derivatives Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured at their fair value. The resulting gain or loss arising from remeasurement is recognised in the Income statement unless the derivative financial instrument has been designated as a hedge of a highly probable expected future cash flow and is assessed as effective, when gains and losses are recognised in equity. iv. Convertible debt Convertible bonds are classified as either compound financial instruments or hybrid financial instruments depending on the settlement alternatives upon redemption. Where the bondholders exercise their equity conversion options and the Company has no alternative other than to settle the convertible bonds into a fixed number of ordinary shares of the Company, then the bonds are classified as a compound financial instrument. Where the Group has an alternative settlement mechanism to the convertible bonds that permits settlement in cash, then the convertible instrument is classified as a hybrid financial instrument. Convertible bonds that are classified as compound financial instruments consist of a liability and an equity component. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible debt, and is subsequently recorded at an amortised cost basis using the effective interest method until extinguished on conversion or maturity of the bonds, and is recognised within Long-term borrowings. The difference between the proceeds of issue of the convertible bond and the fair value assigned to the liability component, representing the embedded option to convert the liability into equity of the Company, is included in the equity portion of the convertible bond in Other reserves and is not subsequently remeasured. The interest expense on the liability component is calculated by applying the effective interest rate for similar non- convertible debt to the liability component of the instrument. The difference between this value and the interest paid is added to the carrying amount of the liability. Convertible bonds that are classified as hybrid financial instruments consist only of a liability component recognised within Long- term borrowings. At the date of issue, the entirety of the convertible bonds is accounted for at fair value with subsequent fair value gains or losses recorded within Finance cost in the Income statement. The fair value of such financial instruments is obtained from their respective quoted prices in active markets. Issue costs associated with compound financial instruments are apportioned between the liability and equity components of the convertible bonds where appropriate based on their relative carrying values at the date of issue. The portion relating to the equity component is charged directly against equity. Issue costs associated with hybrid financial instruments are expensed immediately to the Income statement. v. Investments in Group companies and associates Equity investments in Group companies and associates are measured at the fair value of the consideration given, plus any directly attributable transaction costs (except fees paid to legal advisors or other professionals, which are taken directly to the income statement), less any accumulated impairment. Such impairment is calculated as the difference between the carrying amount and the recoverable amount, which is the higher of fair value less costs to sell and the present value of future cash flows from the investment. In the absence of better evidence of the recoverable amount, the investee's equity is taken into consideration, corrected for any unrealised gains existing at the measurement date (including any goodwill). vi. Equity instruments Equity instruments are non-derivative financial assets including unlisted investments, excluding interests in associates and joint ventures. On initial recognition, these equity instruments are irrevocably designated as measured at fair value through other comprehensive income. They are subsequently measured at fair value, with changes in fair value recognised in other comprehensive income with no recycling of these gains and losses to the Income statement when the investment is sold or a change in the structure of transaction changes its classification as an Equity instruments. Dividends received on equity instruments are recognised in the Income statement. The fair value of quoted investments is determined by reference to bid prices at the close of business on the balance sheet date. Where there is no active market, fair value is determined using valuation techniques. 12 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 4.RECOGNITION AND MEASUREMENT ACCOUNTING POLICIES continued 4.6Financial instruments continued vii. Reclassification of financial instruments The Company reclassifies financial assets when it changes the business model for their management or when they meet or cease to meet the criteria for classification as an investment in Group companies or associates, or the fair value of an investment ceases to be or is once again reliable, except for equity instruments classified at fair value through equity, which cannot be reclassified. The Company does not reclassify financial liabilities. viii. Interest and dividends The Company recognises interest and dividends accrued on financial assets after their acquisition as income. The Company accounts for interest on financial assets carried at amortised cost using the effective interest rate method and recognises dividends when the Company’s right to receive payment is established. If the dividends are clearly derived from profits generated prior to the acquisition date because amounts higher than the profits generated by the investee itself or by any investee thereof since acquisition have been distributed, the carrying amount of the investment is reduced. This criterion applies irrespective of the measurement criterion used to measure equity instruments. Therefore, in the case of equity instruments at fair value, the value of the investment is also reduced, and any subsequent increase in value is recognised in the income statement or in equity, depending on the instrument’s classification. ix. Impairment of financial assets A financial asset or a group of financial assets is impaired and impairment losses are incurred if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset and the event or events have an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. The Company recognises impairment on financial assets at amortised cost when estimated future cash flows are reduced or delayed due to debtor insolvency. For equity instruments, objective evidence of impairment exists when the carrying amount of an asset is uncollectible due to a significant or prolonged decline in its fair value. • Impairment of financial assets carried at amortised cost. The amount of the impairment loss of financial assets carried at amortised cost is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. For variable income financial assets, the effective interest rate corresponding to the measurement date under the contractual conditions is used. Nevertheless, the Company uses the market value, providing this is sufficiently reliable to be considered representative of the recoverable amount. The impairment loss is recognised in profit or loss and may be reversed in subsequent periods if the decrease can be objectively related to an event occurring after the impairment has been recognised. The loss can only be reversed to the limit of the amortised cost of the assets had the impairment loss not been recognised. The Company directly reduces the carrying amount of a financial asset when it has no reasonable expectations of recovering the financial asset in its entirety or a portion thereof. • Impairment of investments in Group companies, associates and equity instruments carried at cost. Impairment is calculated by comparing the carrying amount of the equity investment with its recoverable amount. The recoverable amount is the higher of value in use and fair value less costs to sell. Value in use is calculated based on the Company’s share of the present value of future cash flows expected to be derived from ordinary activities and from the disposal of the asset, or the estimated cash flows expected to be received from the distribution of dividends and the final disposal of the investment. Nonetheless, and in certain cases, unless better evidence of the recoverable amount of the equity investment is available, when estimating impairment of these types of assets, the investee’s equity is taken into consideration, adjusted, where appropriate, to generally accepted accounting principles and standards in Spain, corrected for any net unrealised gains existing at the measurement date. If the investee forms a subgroup of companies, the equity shown in the consolidated annual accounts is taken into account, provided that these accounts have been authorised for issue. Otherwise, the equity reflected in the individual annual accounts is considered. The carrying amount of the equity investment includes any monetary item that is receivable or payable for which settlement is neither planned nor likely to occur in the foreseeable future, excluding trade receivables or trade payables. In subsequent years, reversals of impairment losses in the form of increases in the recoverable amount are recognised, up to the limit of the carrying amount that would have been determined for the investment if no impairment loss had been recognised. Impairment losses are recognised and reversed in the income statement. 13 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 4.RECOGNITION AND MEASUREMENT ACCOUNTING POLICIES continued 4.6Financial instruments continued x. Derecognition and modifications of financial liabilities The Company derecognises all or part of a financial liability when it either discharges the liability by paying the creditor, or is legally released from primary responsibility for the liability either by process of law or by the creditor. The exchange of debt instruments between the Company and the counterparty or substantial modifications of initially recognised liabilities are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability, provided that the instruments have substantially different terms. The Company considers the terms to be substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. If the exchange is accounted for as an extinguishment of the financial liability, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised at amortised cost over the remaining term of the modified liability. In the latter case, a new effective interest rate is determined on the modification date, calculated as the rate that equates the present value of the flows payable under the new terms to the carrying amount of the financial liability at that date. The difference between the carrying amount of a financial liability, or part of a financial liability, extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. If the Company transfers non-monetary assets in settlement of the debt, the difference between their fair value and their carrying amount is recognised as results from operating activities, and the difference between the value of the debt being settled and the fair value of the assets as net finance income/cost. If the Company transfers inventories, the corresponding sale transaction is recognised at their fair value and the change in inventories at their carrying amount. 4.7. Treasury shares When the share capital of the Company is repurchased, the amount of the consideration paid, including directly attributable transaction costs, is recognised as a deduction from equity within the treasury share reserve. When treasury shares are sold or reissued, the amount received is recognised as an increase in equity and the resulting gain or loss on the transaction is presented as an adjustment to Retained earnings with no gain or loss recorded in the Income statement. 4.8. Cash and cash equivalents Cash and cash equivalents includes cash in hand and deposits with any qualifying financial institution repayable on demand or maturing within three months of the date of acquisition and which are subject to an insignificant risk of change in value. 4.9. Foreign currency translation Transactions in foreign currencies are initially recorded in the functional currency using the rate of exchange prevailing on the date of the transaction. Monetary foreign currency balances are translated into the functional currency at the rates ruling at the balance sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at balance sheet exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income statement. The net assets of foreign operations are translated into euros at the rate of exchange ruling at the balance sheet date. Profits and losses of such operations are translated into euros at average rates of exchange during the year. The resulting exchange differences are taken directly to a separate component of equity until all or part of the interest is sold, when the relevant portion of the cumulative exchange difference is recognised in the Income statement. 4.10. Corporate tax From 1 January 2015 onwards the Spanish entities International Consolidated Airlines Group S.A., Vueling Airlines S.A., Avios Group Limited Sucursal en España, IAG GBS Limited Sucursal en España and IAG Cargo Limited Sucursal en España, filed consolidated tax returns as part of the Spanish tax unity (0061/15, pursuant to title VII, Chapter VI of the Spanish Corporate Income Tax Law set forth in the Law 27/2014 of 27 November 2014). Fly Level S.L. joined the tax unity on 7 November 2017. Yellow Handling S.L.U. joined the tax unity on 17 October 2019. From 1 January 2020 Vueling and Yellow Handling S.L.U. ceased to be part of the Spanish tax unity due to modifications in their shareholding. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the balance sheet date. Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, with the following exceptions: • where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss; • in respect of taxable temporary differences associated with investments in subsidiaries or associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and • deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised. 14 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 4.RECOGNITION AND MEASUREMENT ACCOUNTING POLICIES continued 4.10Corporate tax continued Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date. Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise income tax is recognised in the Income statement. Top-up tax The Company's current income tax expense includes the tax related to the minimum effective taxation of multinational enterprise groups (OECD model rules or Pillar Two, hereinafter the "Top-up Tax"), in respect of which the Company is a taxable person and taxpayer. If the Company is a substitute taxpayer, then the current income tax expense accrued on behalf of the taxpayer is recognised as a receivable from group companies. If the Company is a taxable person and taxpayer in respect of the Top-up Tax, but the parent acts as a substitute taxpayer of the Company, the latter recognises the accrued current income tax expense with a credit to an account payable to group companies. The Company recognises the accrual of the Top-up Tax expense with a credit to non-current tax liabilities in the balance sheet. The Company has applied the exception to the recognition and disclosure of deferred tax assets and liabilities related to the Top- up Tax. 4.11. Revenue and expense recognition The Company presents the income from rendering management services to Group companies, dividends received from Group Companies and financial income from financing granted to them as Revenue from operations. 4.12. Provisions Provisions are made when all of the following criteria have been met: (i) an obligation exists for a present liability in respect of a past event; (ii) where the amount of the obligation can be reliably estimated; and (iii) where it is considered probable that an outflow of economic resources will be required to settle the obligation. Where it is not considered probable that there will be an outflow of economic resources required to settle the obligation, the Company does not recognise a provision, but discloses the matter as a contingent liability. The Company assesses whether each matter is probable of there being an outflow of economic resources to settle the obligation at each balance sheet date. 4.13. Long-term remuneration to personnel The Company offers a defined contribution pension plan to all IAG employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior years. Current service costs are recognised within the Income statement in the year in which they arise. At each financial year end, accrued contributions payable are recognised in the Balance sheet. 4.14. Share-based payment transactions The Company operates a number of equity-settled, share-based payment plans, under which the Company awards equity instruments of the Company for services rendered by employees. The fair value of the share-based payment plans is measured at the date of grant using a valuation model provided by external specialists (note 17). The resulting cost, as adjusted for the expected and actual level of vesting of the plan, is charged to the Income statement over the period in which the options vest. At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management’s best estimate of the achievement or otherwise of non-market conditions, and accordingly the number of equity instruments that will ultimately vest. The movement in the cumulative expense since the previous balance sheet date is recognised in the Income statement with a corresponding entry in equity. 4.15. Dividends Interim dividends are recognised when they are paid and final dividends are recognised when authorised in general meetings by shareholders. 15 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 4.16. Related parties Transactions between group companies, except those related to mergers and non-cash contributions of businesses where particular regulations apply, including investments in group companies, are recognised at the fair value of the consideration given or received. The difference between fair value and the transaction price is recognised either as a contribution or a dividend distribution. However, the amount which is not realised in proportion to the percentage interest held in the group company is recognised as an income or expense. In the transactions where the aforementioned particular regulations apply, the values of the net assets received must be those that come from consolidated accounts of the group or of the larger sub-group in which the assets and liabilities are included and whose parent company is Spanish. If the aforementioned financial statements are not prepared under one of the exemptions considered in the consolidation rules, the values to be used shall be those existing prior to the transaction in the separate financial statements of the transferring or acquired company. 4.17. Classification of assets and liabilities between current and non-current Assets and liabilities are presented in the Balance sheet as either current or non-current. The assets and liabilities are classified as current when linked to the normal operating cycle of the Company. When an asset or liability is not linked to the normal operating cycle but the Company expects the asset or liability to mature or liquidate, or plans to dispose of the asset or liability within 12 months, then these are also classified as current when they are maintained for the purposes of operations, or the instrument is related to cash and cash equivalents. Any asset or liability whose use is restricted to beyond one year is classified as non-current. 5. LEASES The Company has a property in Madrid which is leased from Iberia with an annual renewal. The contract has an option to review the duration of the lease on an annual basis. The Company also has an office in London which is leased from British Airways. The lease expires in 2025. The annual cost of the leases is €700.000 (2023: €617.000). The amount of future minimum lease payment is €710.000 (2023: €623.000) for less than one year and €nil (2023: €484.000) for between one year and two years. 6. INTANGIBLE ASSETS €'000 1 January Additions Exchange movements Transfers 31 December 2024 Cost Computer software - - - 13.785 13.785 Computer applications in progress 6.472 19.553 277 (13.887) 12.415 6.472 19.553 277 (102) 26.200 Amortisation Computer software - 2.430 29 - 2.459 Computer applications in progress - - - - - - 2.430 29 - 2.459 Net book value Computer software - (2.430) (29) 13.785 11.326 Computer applications in progress 6.472 19.553 277 (13.887) 12.415 6.472 17.123 248 (102) 23.741 2023 Cost Computer applications in progress - 6.472 - - 6.472 - 6.472 - - 6.472 Net book value Computer software - - - - - Computer applications in progress - 6.472 - - 6.472 - 6.472 - - 6.472 In 2024 the Company acquired computer developments or programmes from third parties for a total of €19.553.000 (2023: €6.472.000) of which €13.785.000 (2023: €nil) have been put into operation. 16 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 7. PROPERTY, PLANT AND EQUIPMENT €'000 1 January Additions Exchange movements Transfers 31 December 2024 Cost Fleet¹ 61.986 5.269 2.654 (26.412) 43.497 Computer equipment - - 3 102 105 61.986 5.269 2.657 (26.310) 43.602 Amortisation and depreciation Computer equipment - 15 - - 15 - 15 - - 15 Net book value Fleet¹ 61.986 5.269 2.654 (26.412) 43.497 Computer equipment - (15) 3 102 90 61.986 5.254 2.657 (26.310) 43.587 2023 Net book value Fleet 83.046 43.901 869 (65.830) 61.986 83.046 43.901 869 (65.830) 61.986 1Relates to pre-delivery payments made on aircraft. Capital expenditure authorised and contracted for but not provided for in the financial statements was €2.699.036.000 (2023: €2.305.811.000) in relation to fleet purchases. The capital expenditure is denominated in US dollars, and as such is subject to changes in exchange rates. 8. EQUITY INVESTMENTS IN GROUP COMPANIES The details and movement of individual items that comprise this section are: €'000 1 January Additions 31 December 2024 Equity instruments Cost 8.096.275 1 8.096.276 Distribution received (342.766) - (342.766) Impairment (270.003) - (270.003) 7.483.506 1 7.483.507 2023 Equity instruments Cost 8.185.959 (89.684) 8.096.275 Distribution received (342.766) - (342.766) Impairment (270.003) - (270.003) 7.573.190 (89.684) 7.483.506 17 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 8.EQUITY INVESTMENTS IN GROUP COMPANIES continued 8.1. Description of the main movements On 16 July 2024 LEVEL BCN was incorporated and the Company subscribed to 49,90% of the share capital with IB Opco Holding subscribing to the other 50,10%. The total amount paid for the shares was €1.497. Prior year movements Following a shareholder meeting of Vueling on 29 December 2023, Veloz (legally absorbed entity) and Vueling (legally absorbing entity) completed a reverse merger in which Vueling absorbed Veloz by means of the block transfer of the entire assets of Veloz. As a result of the merger, Veloz ceased to exist. The reverse merger was carried out in accordance with the provisions set forth in Book One, on the Transposition of the European Union Directive regarding Structural Changes in Commercial Companies, of the Royal Decree-Law 5/2023, of 28th June, with the Company exchanging all of the shares of Veloz in exchange for 14,775,037 shares in Vueling of €1 nominal value. The deed executing the merger was filed for registration in the Mercantile Registry of Barcelona on 29 December 2023. Prior to the reverse merger, the Company owned 100% of the share capital of Veloz, which in turn owned 49,39% of Vueling, Iberia LAE (which the Company owns indirectly through its direct investment in IB Opco Holding) owning 50,10% and a further 0,51% held by shareholders external to the Group. Subsequent to the merger, the Company holds a direct investment in Vueling of 49,39%, such that the investment in Veloz has been allocated proportionally to the shareholding. This resulted in the following accounting impact: (i) the de-recognition of the direct investment in Veloz of €166.139.000; (ii) a direct investment in Vueling of €37.961.000; (iii) an increase in the investment in IB Opco Holding of €33.259.000; (iv) an increase in the investment in British Airways of €5.235.000; (v) the recognition of a charge to the voluntary reserve in equity of €89.305.000; and (vi) a charge of €379.000 being recorded in Finance costs in the Income statement reflecting the proportion relating to the non-controlling third party shareholders. 8.2. Details of investments Information at 31 December on the Group companies, prepared in accordance with International Financial Reporting Standards, is as follows: Business activity Percentage of ownership¹ Capital Reserves Profit/ (loss) after tax for the year Total shareholders' equity Operating profit/ (loss) Dividend received during the year Net book value €'000 2024 €’000 Iberia Airline operations Indirect 66.717 (42.939) 745.034 768.812 670.500 - - IB Opco Holding Holding company 100% 10 1.601.308 779.967 2.381.285 791.100 610.246 2.421.807 Aer Lingus Airline operations Indirect³ 27.615 95.482 137.842 260.939 205.024 - - Vueling Airline operations 99,5%² 29.905 (390.439) 241.002 (119.532) 400.082 - 37.961 AERL Holding Holding company 100% 760.000 524.016 (2.984) 1.281.032 - - 836.000 LEVEL6 Airline operations 100% 185.003 (172.327) 2.390 15.066 1.363 - - Fly Level Barcelona Airline operations Indirect⁵ 3 - (743) (740) (644) 1 £’000 British Airways Airline operations 100% 290.000 2.138.000 2.389.000 4.817.000 2.060.000 483.434 4.160.632 IAG Cargo Air freight operations 100% - 9.139 1.498 10.637 1.779 - - IAG GBS IT, finance, procurement services 100% 20.000 (26.701) 1.120 (5.581) 1.879 - 22.218 IAG Connect Inflight eCommerce platform 100% - 4.325 118 4.443 35 - 4.888 Polish złoty '000 IAG GBS Poland IT, finance, procurement services 1%⁴ - 11.056 2.094 13.150 3.690 - - Other Group companies n/a n/a n/a n/a n/a n/a n/a 7.483.507 18 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 8.EQUITY INVESTMENTS IN GROUP COMPANIES continued 8.2Details of investments continued Business activity Percentage of ownership¹ Capital Reserves Profit/ (loss) after tax for the year Total shareholders' equity Operating profit/ (loss) Dividend received during the year Net book value €'000 2023 €’000 Iberia Airline operations Indirect 66.717 (91.550) 803.929 779.096 778.075 - - IB Opco Holding Holding company 100% 10 2.294.733 15.192 2.309.935 (63) - 2.421.807 Aer Lingus Airline operations Indirect³ 27.615 (58.132) 173.877 143.360 225.008 - - Vueling Airline operations 99,5%² 29.905 (732.785) 290.603 (412.277) 396.051 - 37.961 AERL Holding Holding company 100% 760.000 526.791 (2.775) 1.284.016 - - 836.000 LEVEL6 Airline operations 100% 185.003 (178.005) 5.678 12.676 (451) - - £’000 British Airways Airline operations 100% 290.000 1.149.000 1.161.000 2.600.000 1.431.000 - 4.160.632 IAG Cargo Air freight operations 100% - 7.219 1.009 8.228 2.977 - - IAG GBS IT, finance, procurement services 100% 20.000 (30.411) 2.291 (8.120) 2.836 - 22.218 IAG Connect Inflight eCommerce platform 100% - 4.208 117 4.325 125 - 4.888 Polish złoty '000 IAG GBS Poland IT, finance, procurement services 1%⁴ - 8.350 2.705 11.055 4.003 - - Other Group companies n/a n/a n/a n/a n/a n/a n/a 7.483.506 1IAG directly holds 90,02% and 86,45% of the economic rights in British Airways and Iberia respectively. The remaining economic ownership of both companies is indirectly held by IAG through the cross-holdings between British Airways and Iberia. IAG, including through British Airways’ shareholding, holds 49,9% of the total nominal share capital and of the total number of voting rights in IB Opco Holding, S.L. (and thus, indirectly, in Iberia Líneas Aéreas de España, S.A. Operadora), such stake having almost 100% of the economic rights in these two companies. The remaining shares, representing 50,1% of the total nominal share capital and of the total number of voting rights belong to Garanair, S.L., a Spanish company incorporated for the purposes of implementing the Spanish nationality structure. IAG, including through Iberia’s shareholding, holds 49,9% of the total number of voting rights and 99,65% of the total nominal share capital in British Airways Plc, such stake having almost 100% of the economic rights. The remaining nominal share capital and voting rights, representing 0,35% and 50,1% respectively, correspond to a trust established for the purposes of implementing the British Airways nationality structure. 2 IAG holds a total investment of 99,49% in Vueling, 49,39% held directly and 50,10% held through its subsidiary IB Opco Holding. 3IAG holds 49,75% of the total number of voting rights and almost 100% of the economic rights in Aer Lingus. The remaining voting rights, representing 50,25%, correspond to a trust established for implementing the Aer Lingus nationality structure. 4 IAG holds a direct investment of 1% in IAG GBS Poland and an indirect investment of 99% through IAG GBS. 5 IAG holds a total investment of 100% in Fly Level Barcelona, 49,90% held directly and 50,10% held through its subsidiary IB Opco Holding. 6 LEVEL includes Fly Level S.L and its subsidiary Fly Level UK Limited. 19 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 8.EQUITY INVESTMENTS IN GROUP COMPANIES continued 8.2Details of investments continued British Airways’ registered office is at Waterside, PO Box 365, Harmondsworth, Middlesex, UB7 0GB, United Kingdom. The main activity of British Airways is the operation of international and domestic air services for the carriage of passengers and cargo. In addition it provides aircraft maintenance services. Iberia’s registered office is at Calle Martínez Villergas 49, 28027, Madrid, Spain. The main business of Iberia is the operation of international and domestic air services for the carriage of passengers and cargo. In addition it provides ancillary services including aircraft maintenance and handling services. Vueling’s registered office is at Calle Catalunya 83, Viladecans, 08840, Barcelona, Spain. The main business of Vueling consists of the the operation of international and domestic air services for the carriage of passengers. IAG Cargo’s registered office is at Carrus Cargo Centre, PO Box 99, Sealand Road, London Heathrow Airport, Hounslow, Middlesex, TW6 2JS, United Kingdom. The principal activity of IAG Cargo is commercial sales, support and management services in the provision of air freight on the British Airways, Iberia and Aer Lingus networks. IAG GBS’s registered office is at Waterside (HAA2), PO Box 365, Harmondsworth, Middlesex, UB7 0GB, United Kingdom. The principal activity is the provision of business services to the IAG Group. IAG GBS Poland’s registered office is at ul. Opolska 114, 31-323 Kraków, Poland. The principal activity is the provision of business services to the IAG Group. AERL Holding’s registered office is at Waterside (HAA2), PO Box 365, Harmondsworth, Middlesex, UB7 0GB, United Kingdom. The principal activity is acquisition and holding of equity interests in Aer Lingus Group DAC and the management and disposition of such equity interests. Fly Level S.L.'s registered offices are at El Caserío, Camino de la Muñoza s/n, Iberia zona Industrial no 2, 28042 Madrid, Spain. The principal activity is airline operations. Fly Level Barcelona LH S.L’s registered offices are at Calle Catalunya, 83, Viladecans, Barcelona, 08840, Spain. The principal activity is passenger air transport. IAG Connect Limited’s registered office is at Dublin Airport, County Dublin, Republic of Ireland. The principal activity is the provision of the Group’s inflight eCommerce platform. In accordance with article 155 of the Spanish Companies Law (Ley de Sociedades de Capital), the Company has duly notified the above mentioned subsidiaries of the acquisition of their share capital. 8.3. Impairment review The principal equity investments in Group companies comprise British Airways, Iberia, Vueling and AERL Holding (the holding company of Aer Lingus). Basis for calculating recoverable amount The recoverable amounts of Company’s investments have been measured based on their value-in-use, which utilises a weighted average multi-scenario discounted cash flow model. The details of these scenarios are given in the going concern section of note 2, with a weighting of 70% to the Base Case and 30% to the Downside case. Cash flow projections are based on the business plans approved by the relevant operating companies covering a three-year period. Cash flows extrapolated beyond the three-year period are projected to increase based on long-term growth rates. Cash flow projections are discounted using the pre-tax discount rate for each investment. Annually the relevant operating companies and their respective boards approve three-year business plans, and the IAG Board approves the Group three-year business plan in the fourth quarter of the year. The business plan cash flows used in the value-in- use calculations also reflect all restructuring of the business where relevant that has been approved by the Board and which can be executed by management under existing labour agreements. Impact of climate change on the Company’s investment impairment analysis The Group’s Flightpath Net Zero climate strategy is long-term in nature and includes commitments that will occur at differing points over this time horizon. To the extent that certain of those commitments occur over the short-term, then they have been incorporated into the three-year business plans. The Group adjusts the final year of these probability-weighted cash flows to incorporate the impacts of climate change from the Group’s Flightpath Net Zero climate strategy that are expected to occur over the medium term. These adjustments are limited to those that: (i) the Group can reliably estimate at the balance sheet date; (ii) only relate to the Group’s existing asset base in its current condition; and (iii) incorporate expected legislation and regulation that is expected to be required to achieve the Group’s Flightpath Net Zero climate strategy, and which is sufficiently progressed at the balance sheet date. As a result, the Company’s investment impairment modelling incorporates the following aspects of the Group’s Flightpath Net Zero climate strategy through to 2030, after which time the level of uncertainty regarding timing and costing becomes insufficiently reliable to estimate: (i) an increase in the level of SAF consumption of 10% of the overall fuel mix; (ii) forecast cost of carbon, including SAF, ETS allowances and CORSIA allowances (all derived from externally sourced or derived information); (iii) the removal of existing free ETS allowances issued by EU member states, Switzerland and the UK; (iv) forecast kerosene taxes applied to jet fuel for all intra-EU flight activity; and (v) assumptions regarding the ability of the Group to recover these incremental costs through increased ticket pricing. 20 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 8.EQUITY INVESTMENTS IN GROUP COMPANIES continued 8.3Impairment review continued In preparing the impairment models, the Group cash flow projections are prepared on the basis of using the current fleet in its current condition. The Company excludes the estimated cash flows expected to arise from future restructuring unless already committed and assets not currently in use by the Group. In addition, for the avoidance of doubt, the Group’s impairment modelling excludes the following aspects of the Group’s Flightpath Net Zero climate strategy: (i) the transition to electric and hydrogen aircraft, as well as future technological developments to jet engines and airframes; (ii) any savings from the transition to more fuel efficient aircraft other than those either in the Group’s fleet or those committed orders due to be delivered over the business plan period; (iii) the benefit of the development of carbon capture technologies and enhanced carbon offsetting mechanisms; (iv) the required beneficial reforms to air traffic management regulation and legislation; and (v) the required government incentives and/or support across the supply chain. Given the inherent uncertainty associated with the impact of climate change, the Company and the Group have applied additional sensitivities below to reflect a more adverse impact of climate change than currently expected. This has been captured through both the downward sensitivities of the long-term growth rates, ASKs, operating margins and the increased fuel price sensitivity Key assumptions The value-in-use calculations for each investment reflect the wider economic and geopolitical environments, including updated projected cash flows for activity from 2025 through to the end of 2027. For each of the Group’s investments the key assumptions used in the value-in-use calculations are as follows Per cent 2024 British Airways Iberia Vueling Aerl Holding Operating margin¹ 12-16 11-13 8-10 8-13 Average ASK growth per annum¹ 0-8 2-7 1-8 2-3 Long-term growth rate 1,8 1,4 1,0 1,3 Pre-tax discount rate 11,3 11,6 13,7 10,7 Per cent 2023 British Airways Iberia Vueling Aerl Holding Operating margin¹ 7-14 7-14 4-12 6-14 Average ASK growth per annum¹ 3-9 5-11 1-6 2-16 Long-term growth rate 1,7 1,5 0,9 1,3 Pre-tax discount rate 11,2 12,4 14,3 10,9 1 Operating margin and average ASK growth per annum are stated as the weighted average derived from the multi-scenario discounted cash flow model. Jet fuel price ($ per MT) Within 12 months 1-2 years 2-3 years 3 years and thereafter 2024 704 715 717 717 2023 895 829 800 800 Forecast ASKs in the current year modelling represent the range of average annual increases in capacity over the forecast period, based on planned network growth and taking into account management's expectation of the market. The long-term growth rate is calculated for each investment, considering a number of data points: (i) industry publications; (ii) forecast weighted average exposure in each primary market using gross domestic product (GDP); and (iii) internal analysis regarding the long-term changes in consumer preferences and the effects on demand from the increased costs to the Group of climate change. The calculation of the long-term growth rate utilises a Base Case and a Downside Case growth rate, which is then weighted on the same basis as the cash flows detailed above of 70% to the Base Case and 30% to the Downside Case. The terminal value cash flows and long term growth rate incorporate the impacts of climate change insofar as they can be determined. The airlines’ network plans are reviewed annually as part of the three-year business plan preparation and reflect management’s plans in response to specific market risk or opportunity. 21 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 8.EQUITY INVESTMENTS IN GROUP COMPANIES continued 8.3Impairment review continued Pre-tax discount rates represent the current market assessment of the risks specific to each investment, taking into consideration the time value of money and underlying risks of its primary market. The discount rate calculations are based on the circumstances of the airline industry, the Group and the investment. These rates are derived from the weighted average cost of capital (WACC). The WACC takes into consideration both debt and equity available to airlines and loyalty schemes. The cost of equity is derived from the expected return on investment by airline investors and loyalty scheme investors and the cost of debt is derived from both market data structure and industry gearing levels derived from comparable companies. Investment specific risk is incorporated by applying individual beta factors which are evaluated annually based on available market data. The pre-tax discount rate reflects the timing of future tax flows. The Company engages an external valuation expert as at the valuation date to assist in the determination of the post-tax discount rate. Jet fuel price assumptions are derived from forward price curves in the fourth quarter of each year and sourced externally from readily available market data at the valuation date. The cash flow forecasts reflect these price increases after taking into consideration the level of fuel derivatives and their associated prices that the Group has in place and the incremental price differentials expected for the purchase of SAF. As detailed above, the Group adjusts the final year of the three-year business plans to incorporate the medium-term impacts of climate change from the Group’s Flightpath Net Zero climate strategy through to 2030. These adjustments include the following key assumptions: (i) a 10% level of SAF consumption out of the overall fuel mix with an assumed price of €7.000 per metric tonne; (ii) a kerosene tax of €526 per metric tonne on all intra-EU flights; (iii) for costs of carbon, prices of €120, €120, €179 and €42 for EU ETS allowances, Swiss ETS, UK ETS allowances and CORSIA allowances, respectively, per tonne of CO2 equivalents emitted; and (iv) the removal of all free ETS and CORSIA allowances. Summary of results At 31 December 2024 and 31 December 2023 management reviewed the recoverable amount of each of the investments and concluded the recoverable amounts exceeded the carrying values. Reasonable possible changes in key assumptions, both individually and in combination, have been considered for each investment, where applicable, which include reducing the operating margin by 2 percentage points in each year, reducing ASKs by 5% in each year, reducing long-term growth rates in the terminal value calculation to zero, increasing pre-tax discount rates by 2,5 percentage points and increasing the fuel price (both jet fuel and SAF) by 40%, both with cost recovery consistent with that experienced historically and with no assumed cost recovery. Given the inherent uncertainty associated with the impact of climate change, these sensitivities represent a reasonably possible impact, in addition to those incorporated in the impairment modelling, of climate change on the recoverability of the Company's investments For the British Airways, Iberia, Vueling and AERL Holding investments, while the recoverable amounts are estimated to exceed the carrying amounts by €24.952 million, €10.305 million, €1.329 million and €2.251 million (2023: €19.803 million, €8.124 million, €746 million and €2.384 million), respectively, the recoverable amounts would equal the carrying amounts when applying reasonable possible but not probable changes in assumptions in each of the following scenarios: • British Airways: (i) if ASKs had been 5% lower combined with a fuel price increase without cost recovery of 51% (2023: 32%); and (ii) if the fuel price had been 58% (2023: 37%) higher; • Iberia: if ASKs had been 5% lower combined with a fuel price increase without cost recovery of 45% (2023: 29%); and (ii) if the fuel price had been 49% (2023: 34%) higher; • Vueling: (i) if ASKs had been 5% lower combined with a fuel price increase without cost recovery of 36% (2023: 16%); and (ii) if the fuel price had been 43% (2023: 22%) higher; and • AERL Holding: (i) if ASKs had been 5% lower combined with a fuel price increase of 25% (2023: 23%); and (ii) if the fuel price had been 32% (2023: 29%) higher without cost recovery. For the remainder of the reasonable possible changes in key assumptions applied to the British Airways, Iberia, Vueling and AERL Holding investments and for all the reasonable possible changes in key assumptions applied to the remaining investments, no impairment arises. 22 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 9. FINANCIAL INSTRUMENTS 9.1. Financial assets Details of the Company’s financial assets at 31 December by nature and classification for measurement purposes is as follows: At 31 December 2024 Financial assets at amortised cost Financial assets at fair value through Other comprehensive income Total €'000 Non-current assets Loan receivable from Group company (note 16.1) 1.655.156 - 1.655.156 Other financial asset 3.625 - 3.625 Investment in other equity instruments (note 9.1.2) - 152.972 152.972 1.658.781 152.972 1.811.753 Current assets Trade and other receivables (note 9.1.1) 150.350 - 150.350 Loan receivable from Group company (note 16.1) 207.531 - 207.531 Cash and cash equivalents (note 10) 2.382.220 - 2.382.220 2.740.101 - 2.740.101 At 31 December 2023 Financial assets at amortised cost Financial assets at fair value through Other comprehensive income Total €'000 Non-current assets Loan receivable from Group company (note 16.1) 2.102.789 - 2.102.789 Investment in other equity instruments (note 9.1.2) - 152.250 152.250 2.102.789 152.250 2.255.039 Current assets Trade and other receivables (note 9.1.1) 201.084 - 201.084 Loan receivable from Group company (note 16.1) 25.824 - 25.824 Cash and cash equivalents (note 10) 1.354.219 - 1.354.219 1.581.127 - 1.581.127 9.1.1. Trade and other receivables The breakdown of trade and other receivables at 31 December is as follows: €'000 2024 2023 Current Receivables from Group companies (note 16.1) 126.502 187.530 Other receivables 23.848 13.554 150.350 201.084 9.1.2. Non-current investments in other equity instruments Non-current investments in other equity instruments at 31 December is as follows: €'000 2024 2023 Cost Unlisted investments 152.972 152.250 152.972 152.250 23 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 9.FINANCIAL INSTRUMENTS continued 9.1Financial assets continued Investment in Air Europa Holdings On 15 June 2022, the Company entered into a financing arrangement with Globalia Corporación Empresarial, S,A, (‘Globalia’), whereby, the Company provided a €100 million seven-year unsecured loan, which was convertible for a period of two years from inception into a fixed number of the shares of Air Europa Holdings, S.L. (‘Air Europa Holdings’), a wholly owned subsidiary of Globalia. Subsequently, on 16 August 2022, the Company exercised its exchange option with Globalia and converted the aforementioned loan into an investment in 20% of the share capital of Air Europa Holdings, which is recorded as an Other equity investment. On 23 February 2023, the Company entered into an agreement to acquire the remaining 80% of the share capital of Air Europa Holdings that it had not previously owned. On 1 August 2024 the Company withdrew from the agreement. Up until the Company withdrew from the agreement, the recognition criteria of NRV 21ª Business combinations had not been met. As a result of the Company withdrawing from the agreement with Globalia, the Company was required to pay a break-fee to Globalia of €50 million, which has been recognised as as a charge to other operating expenses. At 31 December 2024, the fair value of the investment in Air Europa Holdings was €139 million, representing a increase of €10 million from the €129 million recorded at 31 December 2023, with the fair value movement having been recorded within other comprehensive income. The tax effect of this is a deferred tax liability of €66.000 recorded in other comprehensive income. The Company, with its external valuation advisors, determined the fair value of the investment in Air Europa Holdings at 31 December 2024 using the market comparison approach (31 December 2023, both the market comparison approach and the income approach), whereby the Company used both observable market data and unobservable inputs. The fair value was determined based on market-multiples derived from quoted prices of comparable airline companies to Air Europa Holdings. These quoted prices were subsequently adjusted for the effect of the non-marketability of the equity held and the revenue and EBITDA of Air Europa Holdings. The range of market-multiples applied in determining the fair value of the investment in Air Europa Holdings at 31 December 2024 was between 1 and 6. 9.2. Financial liabilities Details of the Company’s financial liabilities at 31 December by nature and classification for measurement purposes is as follows: €'000 2024 2023 Non-current liabilities Bonds and other marketable securities 1.184.800 1.678.905 1.184.800 1.678.905 Current liabilities Trade and other payables (note 9.2.1) 52.903 39.976 Group companies (note 16.1) 39.572 226.704 Bond and other marketable securities 544.115 47.500 Convertible bond¹ 1.015.517 735.116 1.652.107 1.049.296 1The 2023 financial liabilities include a reclassification to conform with the current basis of presentation, where the non-current portion of the 2028 convertible bond, amounting to €726 million at 31 December 2023, has been reclassified as a current liability. In July 2019, the Group issued two tranches of senior unsecured bonds for an aggregate principal amount of €1 billion, €500 million due 4 July 2023 and €500 million due 4 July 2027. The 2023 bond bore a fixed rate of interest of 0,5% per annum and was redeemed in full at maturity on 4 July 2023. The 2027 bond bears a fixed rate of interest of 1,5% per annum annually payable in arrears. The 2027 bond was issued at 98,803% of its principal amount, and, unless previously redeemed or purchased and cancelled, will be redeemed at 100% of its principal amount on its maturity date. On 25 March 2021, two senior unsecured bonds were issued by the Group for an aggregate principal amount of €1,2 billion; €500 million fixed rate 2,75% due in 2025, and €700 million fixed rate 3,75% due in 2029. Details of the 2028 convertible bond On 11 May 2021, the Company issued the €825 million fixed rate 1,125% senior unsecured bond convertible into ordinary shares of IAG. The convertible bond raised net proceeds of €818 million and matures in 2028. The Company holds an option to redeem the convertible bond at its principal amount, together with accrued interest, no earlier than two years prior to the final maturity date. The convertible bond provides bondholders with dividend protection and includes a total of 244.850.715 options at inception and following the 2024 interim dividend, includes 248,269,636 options at 31 December 2024 to convert into ordinary shares of the Company. The Company also holds an option to redeem the convertible bond, in full or in part, in cash in the event that bondholders exercise their right to convert the bond into ordinary shares of the Company. The bondholders’ conversion right is currently exercisable. 24 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 9.FINANCIAL INSTRUMENTS continued 9.2Financial liabilities continued The convertible bond is recorded at its fair value, which at 31 December 2024 was €1.015.517.000 (2023: €735.116.000), representing a increase of €280.401.000 since 1 January 2024. 9.2.1. Trade and other payables The breakdown of trade and other payables at 31 December is as follows: €'000 2024 2023 Current trade and other payables Various creditors 52.903 39.976 52.903 39.976 9.2.2. Average payment days to suppliers The information on average period for payment to suppliers in commercial transactions at 31 December is as follows: Days 2024 2023 Average days for payment to suppliers 66 63 Ratio of transactions paid 66 67 Ratio of transactions outstanding for payment 60 42 €'000 2024 2023 Total payments made 62.506 33.989 Total payments outstanding 2.247 5.718 Information on invoices paid in a period shorter than the maximum period established in the late payment regulations 2024 2023 Total payments made 28.003 13.083 Percentage share of total payments to suppliers 45% 38% Number of invoices paid 1.061 531 Percentage share of total number of invoices paid 43% 36% 9.3. Fair value of financial assets and financial liabilities The fair values of the Company’s financial instruments are disclosed in hierarchy levels depending on the nature of the inputs used in determining the fair values and using the following methods and assumptions: Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. Level 1 methodologies (market values at the balance sheet date) were used to determine the fair value of listed asset investments classified as equity investments and listed interest-bearing borrowings. The fair value of financial liabilities and financial assets incorporates own credit risk and counterparty credit risk, respectively. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of financial instruments that are not traded in an active market is determined by valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. Level 3: Inputs for the asset or liability that are not based on observable market data. The principal method of such valuation is performed using a valuation model that considers the present value of the dividend cash flows expected to be generated by the associated assets. The fair value of cash and cash equivalents, other current interest-bearing deposits, and trade and other payables and receivables approximate their carrying value largely due to the short-term maturities of these instruments. 25 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 9.FINANCIAL INSTRUMENTS continued 9.3Fair value of financial assets and financial liabilities continued The fair values and carrying amounts of the Company’s financial assets and liabilities at 31 December 2024 are as follows: 2024 Fair value Carrying value €'000 Level 1 Level 2 Level 3 Total Total Financial assets Loan receivable from Group companies - 1.862.687 - 1.862.687 1.862.687 Other financial assets - - 3.625 3.625 3.625 Equity instruments - - 152.972 152.972 152.972 Financial liabilities Bond and other marketable securities¹ 2.706.509 - - 2.706.509 2.744.432 Loan payable to Group companies - - - - - The fair values and carrying amounts of the Company’s financial assets and liabilities at 31 December 2023 were as follows: 2023 Fair value Carrying value €'000 Level 1 Level 2 Level 3 Total Total Financial assets Loan receivable from Group companies - 2.128.613 - 2.128.613 2.128.613 Equity instruments - - 152.250 152.250 152.250 Financial liabilities Bond and other marketable securities¹ 2.373.395 - - 2.373.395 2.461.521 Loan payable to Group companies - 209.137 - 209.137 209.137 1Bond and other marketable securities includes the convertible bond. Bonds and other marketable securities, with the exception of the IAG €825 million convertible bond due 2028 which is measured at fair value, are measured at amortised cost. Loans with Group companies are measured at amortised cost. Level 3 financial assets reconciliation The following table summarises key movements in Level 3 financial assets: €'000 % Holding 1 January Additions Valuation adjustments Exchange movements 31 December 2024 Air Europa Holdings 20 129.300 16.250 (7.050) - 138.500 Other 22.950 3.257 (11.600) (135) 14.472 152.250 19.507 (18.650) (135) 152.972 2023 Air Europa Holdings 20 23.600 - 105.700 - 129.300 Other 17.823 5.088 - 39 22.950 41.423 5.088 105.700 39 152.250 26 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 10. CASH AND CASH EQUIVALENTS The cash and cash equivalents as at 31 December is as follows: €'000 2024 2023 Cash at bank 138.517 151.605 Cash equivalents 2.243.703 1.202.614 2.382.220 1.354.219 There are no restrictions on the use of the amounts included in these captions. At 31 December 2024 and 2023, the Company had no outstanding bank overdrafts. 11. EQUITY – CAPITAL AND RESERVES 11.1. Share capital At 31 December 2024, the share capital of the Company amounts to €497.147.000, divided into 4.971.476.000 ordinary shares of the same class and series and with a nominal value of 0,10 € each, fully subscribed and paid. Details of shareholders and their equity based on their declaration at 31 December is as follows: Per cent 2024 2023 Significant shareholders: Qatar Airways (Q.C.S.C.) 24,995 25,143 Capital Research and Management Company 5,001 5,001 Hargreaves Lansdown Plc 3,122 4,023 Other shareholders 66,882 65,833 100 100 The share capital and premium for the Company is as follows: Number of shares Share capital Share premium 000s €'000 €'000 At 31 December 2024: Ordinary shares of 0,10 € each 4.971.476 497.147 7.770.439 At 31 December 2023: Ordinary shares of 0,10 € each 4.971.476 497.147 7.770.439 11.2. Reserves and prior year results Details of movements through reserves for the years to 31 December is as follows: €'000 1 January Appropriation of prior year profit/(loss) Vesting of share based payments Share buyback transaction costs Reverse merger of Veloz and Vueling 31 December 2024 Legal reserve 99.429 - - - - 99.429 Other reserve 186.132 (22.749) 409 (132) - 163.660 285.561 (22.749) 409 (132) - 263.089 2023 Legal reserve 99.429 - - - - 99.429 Other reserve 222.821 50.586 2.030 - (89.305) 186.132 322.250 50.586 2.030 - (89.305) 285.561 According to Spanish Companies Law, the legal reserve is not distributable to shareholders until it exceeds 20% of the share capital, and may only be used, in the case that no other reserves are available, to offset losses. This reserve may also be used to increase the share capital in excess of 10% of the increased capital stock. As permitted by the Spanish Companies law, the Company may decrease its share capital without granting its creditors the right of objection legally contemplated in connection with such capital reduction if it records from unrestricted reserves a reserve for redeemed capital for an amount equal to the nominal value of the cancelled shares. This reserve can only be used if the same requirements as those applicable to the reduction of share capital are met. Other reserves include a Redeemed capital reserve of €70.478.000 (2023: €70.478.000) associated with the decrease in share capital relating to cancelled shares and a Share capital reduction reserve of €796.813.000 (2023: €796.813.000) associated with a reduction in the nominal value of the Company’s share capital in 2020. 27 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 11.EQUITY – CAPITAL AND RESERVES continued 11.3. Equity – valuation reserve A breakdown of movements through the valuation reserve for the years to 31 December is as follows: €'000 1 January Valuation adjustment 31 December 2024 Fair value movements on other equity investments (note 9.1.2) 106.562 (18.584) 87.978 Currency translation differences (10.738) 10.902 164 95.824 (7.682) 88.142 2023 Fair value movements on other equity investments (note 9.1.2) 1.870 104.692 106.562 Currency translation differences (12.873) 2.135 (10.738) (11.003) 106.827 95.824 The currency differences include the impact of converting the functional currency of the UK branch into the Company’s presentation currency. 11.4. Treasury shares The Company has authority to acquire its own shares, subject to specific conditions. The treasury shares balance consists of shares held directly by the Company. During the year to 31 December 2024, the Company commenced a €350 million share buyback programme, with an expected completion date of February 2025. At 31 December 2024, the Company had purchased 47.854.000 shares amounting to €156 million. The treasury shares acquired under the €350 million share buyback programme will be cancelled after approval at the 2025 General Shareholders Meeting. The Company also acquired treasury shares for IAG’s use, which will be applied towards employee share scheme requirements. In total, the Company purchased 74.918.000 shares, at a weighted average share price of €2,82 per share totalling €211 million, which are held as treasury shares. A total of 13.141.000 shares (2023: 3.208.000) were issued to employees during the year as a result of vesting of employee share schemes. At 31 December 2024 the Group held 117.622.000 treasury shares (2023: 55.845.000) which represented 2,37% (2023: 1,12%) of the issued share capital of the Company. €'000 1 January Purchase of treasury shares Share-based payment scheme vesting 31 December 2024 Treasury shares (99.333) (210.973) 23.529 (286.777) (99.333) (210.973) 23.529 (286.777) 2023 Treasury shares (28.012) (76.716) 5.395 (99.333) (28.012) (76.716) 5.395 (99.333) 11.5. Other equity instruments The detail of balances related to other equity instruments at 31 December is as follows: €'000 1 January Equity instruments movement for the year 31 December 2024 Share-based payments charge (note 17) 353.442 77.381 430.823 Vesting of share-based payment (234.599) (32.513) (267.112) 118.843 44.868 163.711 2023 Share-based payments charge (note 17) 301.526 51.916 353.442 Vesting of share-based payment (226.214) (8.385) (234.599) 75.312 43.531 118.843 28 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 12. TAXES 12.1. Current taxes 12.1.1. Tax receivables and payables The detail of balances related to tax assets and liabilities at 31 December is as follows: €'000 2024 2023 Corporate income tax receivable from Tax Authorities (net): Spain 50.299 6.886 UK 704 676 Total corporate income tax receivable 51.003 7.562 Intercompany payable relating to UK corporate income tax (16.353) (16.812) Provisions for taxes (600) (600) Social security and withholding taxes payable (39.500) (25.532) Value added tax receivable 9.432 4.315 3.982 (31.067) 12.1.2. Reconciliation of accounting profit for corporate income tax T he reconciliation between the accounting profit and tax (charge)/credit is as follows: €'000 2024 2023 Profit/(loss) after tax for the year from continuing operations 941.797 (22.749) Current tax (2.293) 2.630 Deferred tax (3.151) (1.561) Impact of rate change - 121 Adjustments in respect of prior years (16.870) 9.501 Profit/(loss) before tax 919.483 (12.058) Permanent differences (1.104.670) (8.261) Temporary differences 10.969 8.061 Adjustment for the purposes of determining the Group taxable base (50% of current tax loss) 82.523 - Taxable loss (91.695) (12.258) The adjustment for the purposes of determining the Group taxable base (50% of current tax loss) is an amount of €83 million that originated as a tax loss and in accordance with the Nineteenth Amendment of Law 27/2014 can be deducted in 10 equal annual instalments. 12.1.3. Reconciliation of accounting profit to taxable profit for corporate income tax 2024 2023 €'000 Total Total Profit/(loss) before tax 919.483 (12.058) Tax at the standard rates in Spain (25%) and the UK (25%) (229.871) 2.716 Permanent differences decreasing the tax charge / increasing the tax credit 289.253 7.965 Permanent differences increasing the tax charge / decreasing the tax credit (12.966) (6.122) Adjustment in respect of prior years 16.869 (9.501) Impact of rate change - 121 Current year tax asset not recognised (41.262) (5.870) Prior year tax assets not recognised 291 - Tax credit/(charge) 22.314 (10.691) 29 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 12.TAXES continued 12.1Current taxes continued From 1 January 2015 onwards the Spanish companies International Consolidated Airlines Group, S.A., Vueling Airlines, S.A, Veloz Holding, S.L.U., Avios Group Limited Sucursal en España, IAG GBS Limited Sucursal en España and IAG Cargo Limited Sucursal en España filed consolidated tax returns as part of the Spanish tax unity (0061/15, pursuant to title VII, Chapter VI of the Spanish Corporate Income Tax Law set forth in the Law 27/2014 of 27 November 2014). Fly Level S.L. joined the tax unity on 7 November 2017. Yellow Handling S.L.U. joined the tax unity on 17 October 2019. Vueling and Yellow Handling S.L.U. were excluded from the Spanish tax unity since 1 January 2020 due to modifications in their shareholding. In 2023 there was a merger between Veloz Holding, S.L.U. and Vueling Airlines, S.A. pursuant to Structural Changes in Commercial Companies legislation. The merger had retroactive accounting effect as of 1 January 2023. Due to the merger, Veloz Holding, S.L.U was excluded from the Spanish tax unity since 1 January 2023. No tax liability arose a result of the merger, as the transaction was carried out under the tax neutrality regime. For further information refer to note 8.1 IAG will be responsible for filing consolidated tax returns on behalf of the other companies that belong to this tax unity. 12.1.4. Taxable (loss)/profit The taxable profit for the year to 31 December arises as follows: €'000 2024 2023 Profit/(loss) before tax 919.483 (12.058) Spain 992.518 7.867 UK (73.035) (19.925) Permanent differences (1.104.670) (8.261) Temporary differences 10.969 8.061 Adjustment for the purposes of determining the Group taxable base (50% of current tax loss) 82.523 - Taxable loss (91.695) (12.258) 12.2. Current provisions and tax audits €'000 2024 2023 Provisions for taxes 600 600 600 600 Under prevailing tax regulations, tax returns in Spain may not be considered final until they have either been inspected by tax authorities or until the four-year inspection period has expired. A tax provision in the balance sheet of €600.000 (2023: €600.000) has been made as a result of potentially varying interpretations of the tax legislation applicable to the Company’s transactions. Under prevailing tax regulations, tax returns in the UK may not be considered final until they have either been inspected by tax authorities or until the six-year inspection period for discovery assessment has expired. In December 2016 the UK Tax Authority opened an audit into corporate income tax for the year to 31 December 2014. Audits into subsequent years have since been opened each year for all years up to and including 31 December 2021. As the UK branch is part of the Group’s UK tax group, the tax provision relating to the UK tax audit is included in “Corporate income tax receivable/(payable) with group companies - UK” in the balance sheet. 12.3. Deferred tax asset The detail and movements of balances related to deferred tax assets at 31 December is as follows: Variations reflected in €'000 1 January Income statement Equity Exchange difference 31 December 2024 Temporary differences on share-based payments 5.381 3.151 5.750 497 14.779 5.381 3.151 5.750 497 14.779 2023 Temporary differences on share-based payments 3.731 1.591 - 59 5.381 3.731 1.591 - 59 5.381 30 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 12.TAXES continued 12.4. Deferred tax liability The detail and movements of balances related to deferred tax liability at 31 December is as follows: Variations reflected in €'000 1 January Income statement Equity Exchange difference 31 December 2024 Temporary differences on Air Europa shares revaluation (1.008) - 66 - (942) (1.008) - 66 - (942) 2023 Temporary differences on Air Europa shares revaluation - - (1.008) - (1.008) - - (1.008) - (1.008) 12.5. Unrecognised tax assets At the balance sheet date, the Company has €113.259.069 of unrecognised tax losses that arose in Spain in 2014 (before the tax unity was formed), 2020, 2023 and 2024, and €101.802.416 of unrecognised deductible temporary differences that arose in Spain in 2015, 2016, 2023 and 2024. Unrecognised tax losses €'000 2024 2023 2014 8.284 8.284 2020 12.614 69.076 2023 9.838 23.480 2024 82.523 - Total 113.259 100.840 Unrecognised deductible temporary differences €'000 2024 2023 2015 6.191 6.191 2016 2.608 2.608 2023 10.480 - 2024 82.523 - Total 101.802 8.799 12.6. Tax related contingent liabilities The Company has certain contingent liabilities, across all taxes, which at 31 December 2024 amounted to €104 million. No material losses are likely to arise from such contingent liabilities. As such the Directors do not consider it appropriate to make a provision for these amounts. Included in the tax related contingent liability is the following: 12.6.1. Merger gain Following tax audits covering the period 2011 to 2014, the Spanish Tax Authorities issued a corporate income tax assessment to the Company regarding the merger in 2011 between British Airways and Iberia (the ‘Merger’). The maximum exposure in this case is €104 million (31 December 2023: €100 million), being the amount in the tax assessment with an estimate of the interest accrued on that assessment through to 31 December 2024. The Company appealed the assessment to the Tribunal Económico-Administrativo Central or ‘TEAC’ (Central Administrative Tax Tribunal). On 23 October 2019, the TEAC ruled in favour of the Spanish Tax Authorities. The Company subsequently appealed this ruling to the Audiencia Nacional (National High Court) on 20 December 2019, and on 24 July 2020 filed submissions in support of its case. To assist it in its deliberations as to whether a gain arose from the Merger, on 15 September 2023, the Audiencia Nacional commissioned an independent accounting expert to provide a report on the appropriate basis of accounting. As at 31 December 2024 and through to the date of these financial statements, the Audiencia Nacional has not ruled on whether a gain arose from the Merger. The Company does not expect a judgment at the Audiencia Nacional on this case until the first half of 2026 at the earliest. The Company disputes the technical merits of the assessment and ruling of the TEAC. Based on legal advice and an external accounting expert’s opinion, the Company believes that it has strong arguments to support its appeal. The Company does not consider it appropriate to make a provision for these amounts and accordingly has classified this matter as a contingent liability. Should the Company be unsuccessful in its appeal to the Audiencia Nacional, it would re-assess its position and the associated accounting treatment accordingly. 31 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 12.TAXES continued 12.6Tax related contingent liabilities continued 12.6.1Merger gain continued Within the context of the aforementioned tax audits, the Spanish tax authorities concluded on the value of Iberia’s business within the Merger. This valuation was contested by the Company in a separate case, where no tax liability is due. The Company believes there are technical merits for a higher value, something that would indirectly reduce the quantum of the merger gain assessed in the dispute described above. On 18 January 2024, the Audiencia Nacional served notice on its judgment issued on 13 December 2023, whereby it ruled in favour of the Spanish tax authorities in respect of the valuation of Iberia’s business within the Merger. On 28 February 2024, the Company submitted a request for an appeal of the judgment to the Supreme Court in Spain. The Company does not expect to receive a decision from the Supreme Court on its request for an appeal until the remainder of 2025. If an appeal on this matter was ultimately successful, it would reduce the exposure of the merger gain described above. 12.7. Other Information Pillar Two minimum effective tax rate reform On December 21 2024, Law 7/2024, of 20 December, was published in the Spanish Official State Gazette, establishing a Top-up Tax in order to guarantee a global minimum tax rate for multinational groups and large national groups, a Tax on the Net Interest Income and certain financial institutions’ fees and a Tax on liquids for electronic cigarettes and other products related to tobacco. Other tax regulations are also amended (hereinafter, "Law 7/2024"). Law 7/2024 implements Pillar Two in Spain, establishing, with retroactive effect for Fiscal Years beginning from December 31, 2023, a Top-up Tax, which guarantees that large multinational groups are taxed at a minimum effective rate of 15 per cent wherever they operate. In this regard, the group has carried out an analysis of the possible impacts that may arise from the application of this tax in Fiscal Year 2024, considering the application of the Transitional Safe Harbours that have been established in the Fourth Transitional Provision of Law 7/2024 and the full computation, where applicable. The Company has no impact related to Pillar Two rules on its current tax expense and applies the exception to the recognition of deferred tax assets and liabilities arising from the implementation of Law 7/2024, as established in IAS 12. Revocation of Royal Decree-Law 3/2016 in Spain In January 2024, the ruling of the Tribunal Constitutional (Constitutional Court) in Spain was made public, which upheld the exceptions of unconstitutionality raised regarding several modifications to the Corporate Tax introduced by Royal Decree-Law 3/2016, through which measures were adopted in the tax field aimed at consolidating public finances and other urgent social measures. In this regard, prior to the aforementioned ruling, in January 2024, the Company submitted a request for correction of the Corporate Tax returns for the fiscal years 2021 and 2022, requesting the non-application of the measures introduced by Royal Decree-Law 3/2016. Prior to the introduction of Royal Decree-Law 3/2016, the Company was permitted to offset up to 70 per cent of its taxable profit with historical accumulated tax losses (to the extent there were sufficient tax losses to do so). With the introduction of Royal Decree-Law 3/2016, this limitation of tax losses applied to taxable profit was reduced to 25 per cent. The declaration of unconstitutionality of certain measures introduced by Royal Decree-Law 3/2016 resulted in the reinstatement of the limitation on the offsetting of tax losses, returning it to 70 per cent. As a result of the above, the Company has recognized a current tax credit of €15 million during 2024, equivalent to the refund received from the Spanish tax authorities in relation to the fiscal years 2021 and 2022. Restoration of the measures declared unconstitutional, following the approval of Law 7/2024 The aforementioned Law 7/2024 has restored the tax measures mentioned in the previous section, which had been declared unconstitutional by the Constitutional Court in its ruling of January 18, 2024. Specifically, effective from January 1, 2024, the Group’s Spanish subsidiaries will be able to offset up to 25 per cent of their taxable base with historical accumulated tax losses (to the extent there were sufficient tax losses to do so). 13. INCOME AND EXPENSES 13.1. Revenue The Company’s activity as described in note 1, is the acquisition, ownership, management and disposal of shares or other equity interests in other companies and provision of management services to those companies. Details and distribution of the revenue for the year to 31 December, from continuing operations by geographical segments can be represented by the following information: €'000 2024 2023 Revenue from operations Rendering of services to Group companies (note 16.1) 100.884 71.991 Receivable from debt with Group companies (note 16.1) 174.177 177.002 275.061 248.993 32 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 13.INCOME AND EXPENSES continued 13.1 Revenue continued €'000 2024 2023 Revenue by area of geographical sale: UK 200.487 180.903 Spain 65.220 57.725 Rest of the World 9.354 10.365 275.061 248.993 13.2. Finance income and costs The breakdown of finance income and cost is as follows: €'000 2024 2023 Finance income Receivable from third parties 62.558 54.504 62.558 54.504 Finance costs Payable interest on convertible bond and other securities payables (59.292) (61.043) Payable to third parties (472) (2.579) (59.764) (63.622) Changes in fair value of financial instruments Net change in fair value of convertible bond (280.401) (130.119) Realised (losses)/gains on derivatives not qualifying for hedge accounting (87) - (280.488) (130.119) During the year the Company recognised a €87.000 loss (2023: €nil) related to foreign exchange derivatives taken to mitigate exposure arising from intra group dividends received in currencies other than euro. 13.3. Employee costs The breakdown of personnel expenses is as follows: €'000 2024 2023 Wages, salaries and other costs Salaries and wages 58.594 45.526 Share-based payments charge (note 17) 15.456 10.376 Social security costs Social security 9.159 6.624 Other social costs 3.758 3.394 86.967 65.920 The Company offers a defined contribution pension plan to all IAG employees. The contributions paid into the defined contribution scheme during the year to 31 December 2024 totalled €3.758.000 (2023: €3.394.000), and have been recognised as Other social costs. Employee numbers are presented in 18.1. 33 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 14. FOREIGN CURRENCY IAG is a Spanish Company with a UK branch which has a pound sterling functional currency. The breakdown of assets and liabilities of the UK branch, all denominated in pound sterling, is as follows: Pound sterling '000 2024 2023 Assets Property, plant and equipment 53.225 59.082 Investment in other equity instruments 36.273 43.439 Current tax receivable 582 583 Deferred tax asset 12.232 4.646 Amounts owed by Group companies 80.599 93.664 Other receivables 51.369 45.234 Cash and cash equivalents 66.047 45.492 300.327 292.140 Liabilities Other taxes and social security 32.184 21.424 Accruals and others payables 33.782 30.782 Amounts due from Group companies 21.703 20.623 87.669 72.829 Net assets 212.658 219.311 The Income statement, all denominated in ‘000 pound sterling, of the branch is as follows: Pound sterling '000 2024 2023 Revenue 72.769 57.977 Finance income 2.508 5.088 Employee costs (64.984) (48.774) Other costs (71.596) (28.868) Finance costs (630) (2.714) Loss for the year before tax (61.933) (17.291) 15. FINANCIAL RISK MANAGEMENT The nature of the Company’s business model and its ability to pay dividends to shareholders means the Company is primarily exposed to capital and credit risk. Counterparty risk The Company is exposed to the non-performance by its counterparties in respect of financial assets receivable. The Group has policies and procedures to monitor the risk by assigning limits to each counterparty. The underlying exposures are monitored on a daily basis and the overall exposure limit by counterparty is periodically reviewed by using available market information. The carrying amount of financial assets represents the maximum exposure to counterparty risk. Foreign currency risk The Company undertakes external foreign exchange derivatives trading activity to mitigate the exposure arising from potential dividends received in currencies other than the euro. Liquidity risk The Company invests cash in interest-bearing accounts, time deposits and money market funds, choosing instruments with appropriate maturities or liquidity to retain sufficient headroom to readily generate cash inflows required to manage liquidity risk. The Company had no committed revolving credit facilities as at 31 December 2024 (2023: €nil). Capital risk The Company’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to maintain an optimal capital structure, to reduce the cost of capital and to provide returns to shareholders. 34 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 16. RELATED PARTY TRANSACTIONS The Company has the following related parties at 31 December: Nature of relationship British Airways Plc Other Group companies Iberia Líneas Aéreas de España S.A. Operadora Other Group companies IB Opco Holding, S.L. Other Group companies Vueling Airlines, S.A. Other Group companies IAG Cargo Ltd Other Group companies IAG GBS Ltd Other Group companies IAG GBS Poland Sp. z o.o. Other Group companies Aerl Holding Limited Other Group companies Aer Lingus Group DAC Other Group companies Avios Group (AGL) Limited Other Group companies IAG Connect Other Group companies Fly Level S.L. Other Group companies FLYLEVEL UK Limited Other Group companies Fly Level Barcelona LH S.L. Other Group companies Qatar Airways (Q.C.S.C.) Significant shareholder Key management personnel Directors and Management Committee 16.1. Related entities The following transactions took place with related parties for the financial years to 31 December: €'000 2024 2023 Revenue from operations Rendering of services to Group companies 100.884 71.991 Dividend income received from Group companies 1.189.253 - Receivable from debt with Group companies 174.177 177.002 Purchases of services Purchases from Group companies 19.017 7.877 Costs Payable on debt with Group companies 1.443 5.764 December balances 2024 2023 Receivables from related parties Amounts owed by Group companies 126.502 187.530 Loan receivable from Group companies 1.862.687 2.128.613 Payables to related parties Amounts owed to Group companies 39.572 17.567 Loan payable to Group companies - 209.137 35 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 16.RELATED PARTY TRANSACTIONS continued 16.1Related entities continued The details of the loans receivable from Group companies is as follows: Amount outstanding 31 December Finance income €'000 2024 2023 Due date Interest rate 2024 2023 AERL Holdings - - 2023 3 year mid swap vs 3 months EURIBOR +4,00% - 1.900 AERL Holdings 77.496 73.218 2025 5,66% fixed 4.278 1.354 British Airways 1.648.645 1.648.425 2026 3 months EURIBOR + 4,60% 140.131 132.952 Aer Lingus - - 2023 3 months EURIBOR + 4,70% - 3.853 Fly Level Barcelona 6.511 - 2027 6,20 % fixed 118 - Fly Level Barcelona 2.018 - 2025 12 months EURIBOR + EBIT component 18 - IB Opco Holding - 81.006 2026 3,50 % fixed 1.641 3.404 IB Opco Holding 17.711 325.964 2026 12 months EURIBOR + EBIT component 27.685 33.539 Vueling 110.306 - 2025 12 months EURIBOR + EBIT component 306 - 1.862.687 2.128.613 174.177 177.002 During 2024 IB Opco Holding repaid the principal and interest outstanding totalling €417.768.000 to the Company. The outstanding balance as at 31 December 2024 was €17.711.000 (2023 €406.970.000) During 2024 Vueling borrowed €110.000.000 from the Company which was issued as a profit participating loan. The outstanding balance as at 31 December 2024 was €110.306.000 (2023: €nil). During 2024 Fly Level Barcelona borrowed €8.500.000 from the Company. €2.018.000 was issued as a profit participating loan. The outstanding balance as at 31 December 2024 was €8.529.000 (2023: €nil). Prior year movements: In 2023, a new loan agreement was entered into with AERL Holdings which replaced the existing loan. The outstanding balance as at 31 December 2023 was €73.218.000 The details of the loans payable to Group companies is as follows: Amount outstanding 31 December Finance costs €'000 2024 2023 Due date Interest rate 2024 2023 Vueling - 109.069 2024 1,20% 1.239 1.308 Avios - - 2023 2 year GILT + 1,25% - 1.161 Iberia - - 2023 5 year euro mid swap rate +1,95% - 1.152 Aer Lingus - 100.068 2024 5 year euro mid swap rate +1,03% 204 1.086 British Airways - - 2023 5 year euro mid swap rate +2,00% - 316 British Airways - - 2023 5 year euro mid swap rate +2,00% - 741 - 209.137 1.443 5.764 During 2024 the Company repaid to Vueling the principal and interest outstanding of €110.059.000.The outstanding balance as at 31 December 2024 was €nil (2023: €109.069.000). During 2024 the Company repaid to Aer Lingus the principal and interest outstanding of €100.272.000. The outstanding balance as at 31 December 2024 was €nil (2023: €100.068.000). 36 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 16.RELATED PARTY TRANSACTIONS continued 16.1Related entities continued Prior year movements: In June 2023 the Company repaid to Avios the principal and interest outstanding of €216.270.000. The outstanding balance as at 31 December 2023 was €nil. During 2023 the Company repaid to Iberia the principal and interest outstanding of €101.658.000. The outstanding balance as at 31 December 2023 was €nil. During 2023 the Company repaid to British Airways the principal and interest outstanding of €97.390.000. The outstanding balance as at 31 December 2023 was €nil. On 28 December 2023, the shareholders of Vueling approved the reverse merger between Veloz and Vueling, whereby Vueling absorbed the assets and liabilities of Veloz. Accordingly, the €109.044.000 loan payable from the Company to Veloz became a loan payable to Vueling. Ordinary transactions with Group companies were carried out on an arm’s length basis in accordance with the Group’s transfer pricing policies. Outstanding balances that relate to trading balances are placed on intragroup accounts with payment terms of 90 days. 16.2. Board of Directors and Management Committee remuneration A breakdown of the remuneration received by the Board of Directors and Management Committee for the years to 31 December is as follows: €'000 2024 2023 Board of Directors Salaries (fixed and variable) 4.673 4.419 Benefits in kind 297 259 Life insurance policies 12 12 4.982 4.690 Management Committee Salaries (fixed and variable) 14.008 12.686 Benefits in kind 2.543 2.244 Life insurance policies 35 33 Pension contributions 163 42 Share-based payments 3.110 - 19.859 15.005 The pension obligation outstanding, which represents the transfer value of the accrued pension was €3.665.000 (2023: €3.501.000) for the Management Committee. Information regarding share-based remuneration can be found on the Report of the Remuneration Committee in the Group Annual Report and Accounts 2024. At 31 December 2024 and 2023, no advances or loans had been given to members of the Board of Directors. The members of the Board of Directors of the Company and persons related to them are as defined per Article 229 of the Spanish Capital Companies Act approved by Royal Decree 1/2010 dated 2 July, amended by Law 31/2014 dated 3 December, amending the Spanish Capital Companies. They have also confirmed that they have not engaged in activities on their own behalf or on behalf of others that involve effective competition, whether actual or potential, with the Company or that in any other way places them in permanent conflict with the interests of the company. 17. SHARE-BASED PAYMENTS The Group operates share-based payment schemes as part of the total remuneration package provided to employees. These schemes comprise both share option schemes where employees acquire shares at an option price and share award plans whereby shares are issued to employees at no cost, subject to the achievement by the Group of specified performance targets. 37 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 17.SHARE-BASED PAYMENTS continued IAG Performance Share Plan The IAG Performance Share Plan (PSP) was granted to senior executives and managers of the Group who are most directly involved in shaping and delivering business success over the medium to long term. Awards made from 2015 to 2020 were nil-cost options, with a two-year holding period following the three-year performance period, before options can be exercised. All awards had three independent performance measures with equal weighting: Total Shareholder Return (TSR) relative to the STOXX Europe 600 Travel and Leisure Index (2020 awards) or MSCI European Transportation Index (prior to 2020 awards), earnings per share, and Return on Invested Capital. IAG Restricted Share Plan The IAG Restricted Share Plan (RSP) was introduced in 2021 to increase the alignment of both interests and outcomes between the Group’s senior management and shareholders through the build-up and maintenance of senior management shareholdings and an increased focus on the long-term, sustainable performance of the Group. Awards have been made as conditional awards, with a two-year holding period following the three-year vesting period. There are no performance measures associated with the awards. Vesting will be contingent on the satisfaction of a discretionary underpin, normally assessed over three financial years commencing from the financial year in which the award was granted. Approval at the end of the vesting period will be at the discretion of the Remuneration Committee, considering the Group’s overall performance, including financial and non-financial performance measures over the course of the vesting period, as well as any material risk or regulatory failures identified. IAG Full Potential Incentive Plan In 2021, the Group launched the Full Potential Incentive Plan (FPIP), which was granted to key individuals involved in the delivery of a series of transformation projects that will enable the Group to deliver business success over the medium to long term. The awards have been made as conditional awards, vesting in 2025 and dependent on stretch operating result performance targets for 2024 and the approval of the Board. IAG Incentive Award Deferral Plan The IAG Incentive Award Deferral Plan (IADP) is granted to qualifying employees based on performance and service tests. It will be awarded when an annual incentive award is triggered subject to the employee remaining in employment with the Group for three years after the grant date. The relevant population will receive a proportion of their incentive award up front in cash, and the remaining proportion in shares after three years through the IADP. Share-based payment schemes summary Outstanding at 1 January 2024 Granted number Lapsed number Vested number Outstanding at 31 December 2024 Exercisable 31 December 2024 000s 000s 000s 000s 000s 000s Performance Share Plans 2.602 - - 1.588 1.014 1.014 Restricted Share Plans 12.137 5.388 582 2.159 14.784 - Full Potential Incentive Plan 4.847 - 21 - 4.826 - Incentive Award Deferral Plans 448 465 - - 913 - 20.034 5.853 603 3.747 21.537 1.014 Outstanding at 1 January 2023 Granted number Lapsed number Vested number Outstanding at 31 December 2023 Exercisable 31 December 2023 000s 000s 000s 000s 000s 000s Performance Share Plans 4.973 - 2.156 215 2.602 1.038 Restricted Share Plans 8.499 4.967 1.104 225 12.137 - Full Potential Incentive Plan 5.039 923 1.115 - 4.847 - Incentive Award Deferral Plans 909 447 7 901 448 - 19.420 6.337 4.382 1.341 20.034 1.038 The weighted average share price at the date of exercise of options exercised during the year to 31 December 2024 was €1,91 (2023: €1,74). The weighted average contractual life for awards outstanding at 31 December 2024 was 0,9 years (2023: 1,8 years). In 2024 there were no equity-settled share-based payment plan grants made with a fair value determined using the Monte Carlo method of valuation. The fair value of awards made during 2024 is the share price at the date of award. The Company recognised a share-based payments charge of €15.456.000 for the year to 31 December 2024 (2023: €10.376.000). A credit of €77.381.000 (2023: €51.916.000) representing the total Group charge was recognised in Reserves including a deferred tax credit of €5.750.000 (2023: €nil). Group companies are recharged for the grants made to employees of those Group companies. 38 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 18. OTHER DISCLOSURES 18.1. Employee numbers Number of employees at year end Average number Professional category Men Women Total of employees 2024 Management Committee 8 3 11 11 All other employees 89 63 152 148 97 66 163 159 2023 Management Committee 9 3 12 11 All other employees 84 59 143 135 93 62 155 146 There are no employees with a certified disability greater than 33% (2023: €nil) At 31 December 2024, the Board consisted of 11 people, including six men and five women (2023: 11 people, including six men and five women). 18.2. Audit fees The fees for the audit of the Company’s financial statements, the audit of the Group consolidation and non-audit services provided to the Company by the external auditor KPMG Auditores S.L. are as follows: €'000 2024 2023 Fees for the audit of the financial statements 1.901 1.936 Other audit related services 758 671 All other services - - 2.659 2.607 Information on services provided to the Company and its subsidiaries by KPMG and other network firms is included in the Group’s consolidated financial statements. 18.3. Contingent liabilities There are a number of legal and regulatory proceedings against the Company in a number of jurisdictions which at 31 December 2024, where they could be reliably estimated, amounted to €3,5 million (31 December 2023: €53,5 million). The Company does not consider it probable that there will be an outflow of economic resources with regard to these proceedings and accordingly no provisions have been recorded. Contingent liabilities associated with income taxes, deferred taxes and indirect taxes are presented in note 12. 18.4. Information on environmental issues The undersigned, as Directors of the Company, hereby state that the accounting records relating to these financial statements do not contain any item of an environmental nature that should be included pursuant to point 5 of the Valuation Standard 4ª Financial Statements, or Section 3 of the Spanish National Chart of Accounts (Royal Decree 1514/2010, of 16 November). Please refer to the Corporate Sustainability Reporting Directive within the Group Annual Report and Accounts 2024 for Group disclosures on environmental matters and climate change. 39 INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Notes to the financial statements continued 19. POST BALANCE SHEET EVENTS Partial redemption of 2027 and 2029 bonds On 17 January 2025, the Company paid €574 million to redeem, at a net discount, €577 million of the notional value of its unsecured bonds in advance of maturity. The notional value of the bonds redeemed amounted to €277 million of the €500 million fixed rate bond 2027 and €300 million of the €700 million fixed rate bond 2029. In addition, the Company paid accrued interest for the bonds that were redeemed amounting to €11 million. Further information relating to these two bonds is given in note 9. Completion of share buyback programme As detailed in note 11, on 8 November 2024 the Company announced a €350 million share buyback programme, with an expected completion date of February 2025. The shares purchased under the programme will be cancelled at the Annual General Meeting in June 2025. Final dividend A final dividend of €0,06 per share was proposed by the Board of Directors on 27 February 2025 (31 December 2023: €nil). It is payable from 30 June 2025 to shareholders who are on the register at 27 June 2025. The final dividend amounting to €288 million, calculated based on the number of shares in issue less treasury shares at the close of trading on 27 February 2025, has not been recognised as a liability in these consolidated financial statements. It will be recognised in total equity in the year to 31 December 2025. Share buyback programme On 27 February 2025 the Board approved a share buyback programme of up to €1.000 million (31 December 2023: €nil) to be completed in up to 12 months from the date of this report. INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. Management report for the year to 31 December 2024 1 MANAGEMENT REPORT International Consolidated Airlines Group, known as International Airlines Group or IAG is the parent company of British Airways, Iberia, Vueling, Aer Lingus, IAG Cargo, IAG GBS, AERL Holding, Fly Level, Fly Level Barcelona and IAG Connect. The Group was formed on 21 January 2011 when the merger between British Airways and Iberia was completed. Business review IAG is a Spanish registered company with the majority of its Board meetings held in Spain. IAG operates a head office through its UK branch in London, with an average staff of 159 (2023: 146) managing key support functions for the Group. The Company’s focus is on the Group strategy, synergies, digital and connectivity, and support of finance, legal and communications functions as well as the administration of the Company. Costs in relation to work carried out for the operating companies of the Group are recharged back to those companies. It is expected that the Company will remain relatively small within the Group, whilst continuing to provide support to the operating companies where required and providing leadership of the Group strategy. Our business model is centred on our purpose: to connect people, businesses and countries. We are an active parent company that invests in our airlines, with a culture of being stronger together. As the parent company, IAG is responsible for managing and allocating capital, driving overall Group performance and setting the agenda for sustainability and innovation. There is active engagement and collaboration between the Group's operating companies, facilitated by the parent company, so that ideas and expertise can be shared and progress tracked where necessary. IAG as the parent company sets the ambition, drives the management and pipeline of top talent, promotes the sustainability agenda, facilitates the capture of synergies, drives innovation and provides centres of excellence to facilitate the sharing of best practice. IAG’s three strategic imperatives are: • A strong core; • Capital-light earnings growth; and • A robust financial and sustainability framework These imperatives are achieved through a series of strategic priorities: • Growing our portfolio of global leadership positions and strengthening our portfolio of world-class brands; • Developing our loyalty and holidays businesses and leveraging our strategic airline partnerships; • Performing disciplined capital allocation and balance sheet management; and • Being an industry leader in the transition to net zero. The Board is dedicated to maintaining high standards of corporate governance, ensuring we create long-term sustainable value for our shareholders while balancing the interests of all our stakeholders. Our strong and effective governance processes are fundamental to our ability to uphold our values and execute our strategy. The Board recognises the importance of culture and setting the tone of the organisation from the top and embedding it throughout the Group. Our culture is a key component in continuing to make progress with our strategic and transformation plans and therefore the Board has continued to focus on and support the development of a healthy Group culture that supports our ambition and transformation and is aligned with our core values and purpose. Finance review Income statement Revenue derived from charging the airline companies for the services that IAG provides to them totalled €101 million for the year to 31 December 2024 (2023: €72 million). Such services cover financial control over treasury policy, treasury support including hedging, financing and refinancing, major capital investments, co-ordination and delivery support of the synergies, strategy and general management of the Group. Revenue from services in 2024 increased compared to 2023 to cover additional costs relating to IT and digital services. Revenue also includes finance income received from lending provided to operating companies within the Group. Finance income from debt with Group companies in the period was €174 million compared to €177 million in 2023. The Company received dividend income from British Airways and Iberia amounting to €1.189 million during the year (2023: €nil). The Company’s expenses are split between employee costs, services received and other operating expenses. Employee costs for the year were €87 million (2023: €66 million). The increase in employee costs is due to salary increases as well as an increase in the share based payment and social security charges.The share-based payment cost was €15 million for the year, compared with €10 million in 2023. Services received largely relate to supporting the activities of the key departments. Other expenses reflect the cost of operating the IAG offices and IT costs, as well as the costs supporting the Group’s market listings with the CNMV and UKLA. Operating expenses increased to €176 million in 2024 from €48 million in 2023. Legal and advisory fees incurred in pursuit of the acquisition of 80% of Air Europa totalled €30 million and €50 million relates to the Air Europa termination settlement payment, with the balance largely relating to IT and digital services. Finance costs payable on debt with third parties of €60 million (2023: €64 million) include interest expense on bonds. 2 The change in fair value of financial instruments reflects €87 thousand loss on derivatives entered into by the Company not qualifying for hedge accounting (2023: €nil ). The profit before tax for the year was €919 million (2023: loss €12 million). The tax credit of €22 million (2023: €11 million charge) reflects: • UK tax on the tax adjusted results of the Company’s UK branch at the tax rate of 25% (2023: 23,5%); • No Spanish tax credit being recognised on the tax adjusted losses of the Company’s head office; and • Adjustments in respect of prior years. The profit after tax for the year was €942 million (2023: loss €23 million). Balance sheet IAG’s primary assets are its subsidiaries. IAG’s investments in British Airways and Iberia were created at the time of the merger on 21 January 2011 and amounted to €6.208 million. At 31 December 2024, IAG held an investment of €4.161 million in British Airways, €2.422 million in Iberia, €836 million in AERL Holding, €38 million in Vueling, €22 million in GBS, €5 million in IAG Connect and €1.000 in Fly Level Barcelona, totalling €7.484 million (2023: €7.484 million). It also holds an investment in Cargo. Treasury shares At 31 December 2024 the Company held 117,6 million shares (2023: 55,8 million). During the year the Company purchased 74,9 million shares, and a total number of 13,1 million shares vested in relation to share- based payment schemes. The total number of the Company’s treasury shares as at 31 December 2024 accounts for 2,37% (2023: 1,12%) of the total issued capital at that date. Dividends On 1 August 2024 the Board of Directors approved an interim dividend of €0,03 per share. The interim cash dividend was paid on 9 September 2024 for a total amount (net of withholding tax of €27.935.000) of €147.026.000. The withholding tax was paid from September 2024. On 27 February 2025 IAG’s Board of Directors proposed a distribution in cash of a final dividend of €0,06 per share. The proposed final dividend is subject to approval at the annual general meeting and subject to approval, will be recognised as a liability on that date. The proposed final dividend would be distributed from net profit for the year to 31 December 2024. Post balance sheet events Partial redemption of 2027 and 2029 bonds On 17 January 2025, the Company paid €574 million to redeem, at a net discount, €577 million of the notional value of its unsecured bonds in advance of maturity. The notional value of the bonds redeemed amounted to €277 million of the €500 million fixed rate bond 2027 and €300 million of the €700 million fixed rate bond 2029. In addition, the Company paid accrued interest for the bonds that were redeemed amounting to €11 million. Further information relating to these two bonds is given in note 9. Completion of share buyback programme As detailed in note 11, on 8 November 2024 the Company announced a €350 million share buyback programme, with an expected completion date of February 2025. The shares purchased under the programme will be cancelled at the Annual General Meeting in June 2025. Final dividend A final dividend of €0,06 per share was proposed by the Board of Directors on 27 February 2025 (31 December 2023: €nil). It is payable from 30 June 2025 to shareholders who are on the register at 27 June 2025. The final dividend amounting to €288 million, calculated based on the number of shares in issue less treasury shares at the close of trading on 27 February 2025, has not been recognised as a liability in these consolidated financial statements. It will be recognised in total equity in the year to 31 December 2025. Share buyback programme On 27 February 2025 the Board approved a share buyback programme of up to €1.000 million (31 December 2023: €nil) to be completed in up to 12 months from the date of this report. Research and development The Company does not undertake any research or development activity. 3 Financial risk management The nature of the Company’s business model and ability to pay dividends to shareholders means the Company is primarily exposed to capital and credit risk. The Company’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to maintain an optimal capital structure in order to reduce the cost of capital and to provide future returns to shareholders. Principal risks and uncertainties The Company has continued to maintain its framework and processes to identify, assess and manage risks, and monitors the risk landscape in the light of changes that influence or impact the Company’s performance or the aviation industry. Through its risk reviews, the Group has been considering further how to assess the combining effect of groups of risks on the business to help develop mitigations that address risk and opportunity more holistically or identify themes or emerging risks earlier. In assessing its principal risks, the Company has considered the status of the financial markets, geopolitical and economic risk, including potential policy change with new governments, pace of transformation, Artificial Intelligence (AI) adoption and future skillsets, people engagement, and securing talent and expertise to deliver cultural change. The Directors of the Company believe that the risks and uncertainties described below are the ones that may have the most significant impact on the day to day operations of IAG as a parent company. These risks are considered by the IAG Management Committee as part of its wider consideration of Group risks under the IAG Enterprise Risk Management framework. Management remains focused on mitigating risks, where appropriate or feasible, whilst recognising that such risk events may not be so easily planned for and that mitigations may be more responsive in nature. The list is not intended to be exhaustive. Data and cybersecurity The risks from cyber threats continue as threat actors seek to exploit any weaknesses in defences particularly through social engineering and human behaviours, with the threat of malware attacks on the Company or its suppliers remaining high and increasing in the year with heightened geopolitical tensions. The Company could face financial loss, disruption or damage to brand reputation arising from an attack on the Company’s systems. The emergence and usage of AI to enhance existing tactics, techniques and procedures (TTPs), produce phishing emails and deploy malware has also accelerated attempts to access organisations’ systems and data and increases the threat and scale of social engineering or cyberattacks. The Company continues to improve its cyber security posture either through IT transformational change or additional monitoring through tools as well as better understanding the risk presented by its suppliers. There is significant oversight of critical systems and suppliers to ensure that the Company understands the data it holds, that it is secure and regulations are adhered to. The fast-moving nature of this risk means that the Company will always retain a level of vulnerability. Economic and political risk Geopolitical risk and uncertainty remains high and wider macroeconomic events may continue to drive market volatility. Changes in government may result in a change in sentiment to aviation and access to markets. The Company continues to monitor the implications for trade and any imposition of extensive tariff regimes may disrupt the markets or economic confidence and drive cost inflation. The tone of dialogue between the US, Russia, China and the EU and UK which can influence markets and result in imposition of misaligned policies or tariffs and any potential impact to the Group is also kept under review. Financial risk, including tax Access to the secured and unsecured debt markets may be disrupted by geopolitical and economic uncertainty, impacting funding options and interest rates available to the Group for new aircraft financing or where it chooses to re-finance debt. Any interest rate increases implemented by central banks increase the cost for the Group of existing floating rate debt, as well as for new financing. The failure to manage the financial counterparties credit exposure arisen from cash investments and derivatives trading may result in financial losses. The Company is exposed to non-performance of financial contracts by counterparties, for activities such as money market deposits, fuel and currency hedging. The Group has a financial counterparty credit limit allocation by airline and by type of exposure and monitors the financial and counterparty risk on an ongoing basis. The Company has maintained its clear focus on managing liquidity and maintaining strong relationships with banks, lenders and lessors. There is continuous review of the capital structure to minimise interest rate exposure and lower cost of capital. The Company is exposed to systemic tax risks arising from either changes to tax legislation and accounting standards or challenges by tax authorities on the interpretation or application of tax legislation. The Company may be subject to higher levels of taxation as governments seek to redesign the global tax framework and rebuild public finances. The Group adheres to the tax strategy which is reviewed and approved annually by the IAG Board. It is committed to complying with all tax laws, to acting with integrity in all tax matters and to working openly with tax authorities. The Group takes expert advice on tax matters as required. Group Governance Structure The aviation industry continues to operate under a range of nationality and other restrictions, some of which are relevant to market access under applicable bi-lateral and multi-lateral air service agreements, while some are relevant to eligibility for applicable operating licences. IAG could face a challenge to its ownership and control structure. IAG will continue to monitor regulatory developments affecting the ownership and control of airlines in the UK and EU and will continue to encourage stakeholders to normalise ownership of airlines in line with other business sectors. Operational and IT resilience The dependency on IT systems for key business and customer processes for operational resilience is increasing and the failure of a critical system may cause significant disruption. Obsolescence within the Company’s IT estate could result in service outages or delays in implementation of transformation activities. The Company works to deliver digital and IT change initiatives to enhance security, stability and availability. System controls, disaster recovery and business continuity arrangements exist to mitigate the risk of a critical system failure People and culture 4 Our people, their engagement and cultural appetite and mindset for change are critical to achieving our transformation plans. Our people and leaders are a critical enabler of the Company’s current performance and future success. The Company may fail to attract, motivate, retain or develop its people with critical skillsets not being in place to execute on the required transformation or to exploit innovation and AI opportunities and drive the business forward. The Company is also at risk of our people not being engaged or not displaying the required leadership or cultural behaviours. Enhancing leadership capability, succession planning and plans for improving organisational health and employee engagement mitigate these risks. The Company is exposed to the risk of individual employees’ or groups of employees’ inappropriate and/or unethical behaviour. Failure to meet legal or regulatory standards may result in breach with the potential to hurt or impact our employees, or third parties, and lead to reputational damage, fines or losses to the Company. There are clear frameworks in place including comprehensive Group-wide policies designed to ensure compliance, monitored by the IAG Audit and Compliance Committee. There are mandatory training programmes in place to educate employees in these matters, including training in respect of the IAG Code of Conduct framework. Compliance, human resources and legal professionals advise the Company as needed Reputation As a listed entity in Spain and the UK, and as owner of British Airways, Iberia, IAG Cargo, Vueling, Aer Lingus, IAG Loyalty and LEVEL, the Company is exposed to reputational risk and consequent impact to the Group’s brands. The Company’s Investor Relations and Media Relations teams work with stakeholders to understand their concerns or update on specific matters. The Annual Corporate Governance Report is part of this Management Report but has been presented separately together with the Group Annual Report and Accounts. This report has been filed with the CNMV, together with the required statistical annex, in accordance with the CNMV Circular 2/2018, dated June 12. The Annual Corporate Governance Report and the statistical annex are also available on the Company’s website (www.iairgroup.com). The Corporate Sustainability Reporting Directive in response to the requirements of Law 11/2018, of 28 December, (amending the Commercial Code, the revised Capital Companies Law approved by Legislative Royal Decree 1/2010, of 2 July 2010 and Audit Law 22/2015, of 20 July 2015), is part of this Management Report and is available on the Company’s website (www.iairgroup.com). ANNUAL CORPORATE GOVERNANCE REPORT AND DIRECTORS REMUNERATION REPORT The 2024 annual corporate governance and directors’ remuneration reports of International Consolidated Airlines Group, S.A., prepared according to Circular 3/2021, of 28 September, of the Spanish National Stock Exchange Commission are part of this Management Report and, from the date of the publication of the 2024 Financial Statements, are available in the Spanish National Stock Exchange Commission website and in the International Consolidated Airlines Group, S.A. website, being incorporated by reference to this report as appropriate. 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 27 February 2025, 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 31 December 2024, prepared in accordance with the applicable set of accounting standards and in single electronic format, 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. 27 February 2025 Javier Ferrán Larraz Chairman Luis Gallego Martín Chief Executive Officer Peggy Bruzelius Eva Castillo Sanz Margaret Ewing Maurice Lam Bruno Matheu Heather Ann McSharry Robin Phillips Emilio Saracho Rodríguez de Torres Lucy Nicola Shaw FORMULATION OF THE INDIVIDUAL FINANCIAL STATEMENTS AND OF THE INDIVIDUAL MANAGEMENT REPORT FOR THE YEAR 2024 The Board of Directors of International Consolidated Airlines Group, S.A., in compliance with the provisions of Article 253 of the Capital Companies Law and of Article 37 of the Commercial Code, proceeded to formulate on 27 February 2025 the individual financial statements and the individual management report of the company for the year to 31 December 2024, in single electronic format according with the Commission Delegated Regulation (EU) 2018/815 of 17 December 2018. In witness whereof, the members of the Board of Directors of International Consolidated Airlines Group, S.A. signed below on 27 February 2025: Javier Ferrán Larraz Chairman Luis Gallego Martín Chief Executive Officer Peggy Bruzelius Eva Castillo Sanz Margaret Ewing Maurice Lam Bruno Matheu Heather Ann McSharry Robin Phillips Emilio Saracho Rodríguez de Torres Lucy Nicola Shaw Runtime Error Server Error in '/WebServices/VerDocumento' Application. Runtime Error Description: An application error occurred on the server. The current custom error settings for this application prevent the details of the application error from being viewed remotely (for security reasons). It could, however, be viewed by browsers running on the local server machine. Details: To enable the details of this specific error message to be viewable on remote machines, please create a tag within a "web.config" configuration file located in the root directory of the current web application. 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