REG - Intl Con Airline Grp - 1st Half Results 2016 <Origin Href="QuoteRef">ICAG.L</Origin> - Part 3
29/07/2016 07:09
- Part 3: For the preceding part double click ID:nRSc5930Fb
Current
Bank and other loans 487 576
Finance leases 564 556
1,051 1,132
Non-current
Bank and other loans 1,835 2,176
Finance leases 5,933 5,322
7,768 7,498
Following the announcement by the Group that it had exercised its option to
redeem all of its outstanding E390 million 1.75 per cent convertible bonds due
2018, in June 2016 all remaining bondholders exercised their option to
exchange their convertible bonds for ordinary shares, resulting in the
issuance of 91,981,118 new shares.
In the six months to June 30, 2016, the Group issued bonds totalling E49
million; E11 million 2.5 per cent coupon repayable in 2018, and E38 million
2.5 per cent coupon repayable in 2019.
16. SHARE BASED PAYMENTS
During the period 5,125,613 nil-cost options were awarded, under the Group's
Performance Share Plan (PSP) to key senior executives and selected members of
the wider management team. No payment is due upon the vesting of the shares.
The fair value of equity-settled share options granted is estimated as at the
date of the award using the Monte-Carlo model, taking into account the terms
and conditions upon which the options were awarded, or based on the share
price at the date of grant, dependent on the performance criteria attached.
The following are the inputs to the model for the PSP options granted in the
year:
Expected share price volatility: 30 per cent
Expected life of options: 3 years
Weighted average share price: £5.41
The Group also made awards under the Group's Incentive Award Deferral Plan
during the period, under which 1,915,957 conditional shares were awarded.
17. EMPLOYEE BENEFIT OBLIGATIONS
The Group operates two principal funded defined benefit pension schemes in the
UK, the Airways Pension Scheme (APS) and the New Airways pension scheme
(NAPS), both of which are closed to new members.
June 30, 2016
E million APS NAPS Other Total
Scheme assets at fair value 9,240 16,620 391 26,251
Present value of scheme liabilities (7,860) (18,000) (671) (26,531)
Net pension asset/(liability) 1,380 (1,380) (280) (280)
Effect of the asset ceiling (508) - - (508)
Other employee benefit obligations - - (11) (11)
June 30, 2016 872 (1,380) (291) (799)
Represented by:
Employee benefit asset 878
Employee benefit obligation (1,677)
(799)
December 31, 2015
E million APS NAPS Other Total
Scheme assets at fair value 9,916 17,997 429 28,342
Present value of scheme liabilities (8,405) (18,460) (805) (27,670)
Net pension asset/(liability) 1,511 (463) (376) 672
Effect of the asset ceiling (561) - - (561)
Other employee benefit obligations - - (12) (12)
December 31, 2015 950 (463) (388) 99
Represented by:
Employee benefit asset 957
Employee benefit obligation (858)
99
At June 30, 2016, the assumptions used to determine the obligations under the
APS and NAPS were reviewed and updated to reflect market conditions at that
date. The change in assumptions has resulted in a charge to Other
comprehensive income of E1,256 million (net of tax). Key assumptions were as
follows:
APS NAPS
Per cent per annum June 30,2016 December 31, 2015 June 30,2016 December 31, 2015
Inflation (CPI) 1.60 1.85 1.60 2.00
Inflation (RPI) 2.70 2.85 2.70 3.00
Salary increases (as RPI) 2.70 2.85 2.70 3.00
Discount rate 2.70 3.60 2.90 3.85
Pension contributions for APS and NAPS were determined by an actuarial valuation made as at March 31, 2012 using assumptions and methodologies agreed with the Trustees of each scheme.
The Group is currently in discussions with the Trustees of the APS and NAPS
over the latest actuarial valuations as at March 31, 2015. Although
discussions have been constructive, further work is required beyond June 30,
2016 (the date set by the statutory framework) to finalise the valuations and
conclude a satisfactory agreement.
18. PROVISIONS FOR LIABILITIES AND CHARGES
E million Restoration and handback provisions Restructuring Employee leaving indemnities and other employee related provisions Legal claims provisions Other provisions Total
Net book value at January 1, 2016 1,013 744 579 235 83 2,654
Provisions recorded during the period 148 15 12 7 48 230
Utilised during the period (82) (91) (11) (6) (47) (237)
Release of unused amounts and other movements (9) (5) - (35) (2) (51)
Unwinding of discount 3 1 7 - - 11
Exchange differences (26) (2) (2) (1) (7) (38)
Net book value June 30, 2016 1,047 662 585 200 75 2,569
Analysis:
Current 177 190 67 9 41 484
Non-current 870 472 518 191 34 2,085
19. CONTINGENT LIABILITIES
The Group has certain contingent liabilities and guarantees, which at June 30,
2016 amounted to E125 million (December 31, 2015: E172 million). No material
losses are likely to arise from such contingent liabilities and guarantees.
The Group also had the following claims:
Cargo
The Group is party to a number of legal proceedings in the English courts
relating to a decision by the European Commission in 2010 which fined British
Airways and ten other airline groups for participating in a cartel in respect
of air cargo prices. The decision was partially annulled as against British
Airways following an appeal to the general court of the European Union and the
fine was refunded in full. It is not yet clear what the European Commission's
next steps will be. The original decision has led to a large number of
claimants seeking, in proceedings brought in the English courts, to recover
damages from British Airways which they claim arise from the alleged cartel
activity. It is not possible at this stage to predict the outcome of the
proceedings, which British Airways will vigorously defend. British Airways has
joined the other airlines alleged to have participated in cartel activity to
these proceedings to contribute to such damages, if any awarded.
The Group is also party to similar litigation in a number of other
jurisdictions including Germany, the Netherlands and Canada together with a
number of other airlines. At present, the outcome of the proceedings is
unknown. In each case, the precise effect, if any, of the alleged cartelising
activity on the claimants will need to be assessed.
We are currently unable to determine whether the Group has an existing
obligation as a result of the past event.
Other
A number of other lawsuits and regulatory proceedings are pending, the outcome
of which in the aggregate is not expected to have a material effect on the
Group's financial position or results of operations.
20. RELATED PARTY TRANSACTIONS
The Group had the following transactions in the ordinary course of business
with related parties.
Sales and purchases of goods and services:
Six months to June 30
E million 2016 2015
Sales of goods and services
Sales to associates 4 7
Sales to significant shareholders 18 5
Purchases of goods and services
Purchases from associates 23 21
Purchases from significant shareholders 29 2
Period end balances arising from sales and purchases of goods and services:
E million June 30,2016 December 31,2015
Receivables from related parties
Amounts owed by associates 3 3
Amounts owed by significant shareholders 1 1
Payables to related parties
Amounts owed to associates 6 3
Amounts owed to significant shareholders - 4
For the six months to June 30, 2016 the Group has not made any provision for doubtful debts arising relating to amounts owed by related parties (2015: nil).
Board of Directors and Management Committee remuneration
Compensation received by the Group's key management personnel is as follows:
Six months to June 30
E million 2016 2015
Base salary, fees and benefits
Board of Directors' remuneration 2 2
Management Committee remuneration 3 3
At June 30, 2016 the Board of Directors includes remuneration for two
Executive Directors (June 30, 2015: two Executive Directors). The Management
Committee includes remuneration for nine members (June 30, 2015: eight
members).
The Company provides life insurance for all Executive Directors and the
Management Committee. For the six months to June 30, 2016 the Company's
obligation was E25,000 (2015: E26,000).
At June 30, 2016 the transfer value of accrued pensions covered under defined
benefit pension obligation schemes, relating to the current members of the
Management Committee totalled E4 million (2015: E8 million).
No loans or credit transactions were outstanding with Directors or officers of
the Group at June 30, 2016 (2015: nil).
21. POST BALANCE SHEET EVENTS
There are no post balance sheet events.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
LIABILITY STATEMENT OF COMPANY DIRECTORS FOR THE PURPOSES ENVISAGED UNDER
ARTICLE 11.1.b OF SPANISH ROYAL DECREE 1362/2007 OF 19 OCTOBER (REAL DECRETO
1362/2007).
At a meeting held on July 28, 2016, the Directors of International
Consolidated Airlines Group, S.A. (the 'Company') state that, to the best of
their knowledge, the condensed consolidated financial statements for the six
months to June 30, 2016, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and of the companies that
fall within the consolidated group taken as a whole, and that the interim
management report includes a true and fair review of the information
required.
July 28, 2016
Antonio Vázquez RomeroChairman William Matthew WalshChief Executive Officer
Marc Jan Bolland Patrick Jean Pierre Cescau
Enrique Dupuy de Lôme Chávarri Denise Patricia Kingsmill
James Arthur Lawrence María Fernanda Mejía Campuzano
Kieran Charles Poynter Emilio Saracho Rodríguez de Torres
Marjorie Morris Scardino Alberto Terol Esteban
AIRCRAFT FLEET
Number in service with Group companies
Onbalancesheet fixedassets Offbalancesheetoperatingleases TotalJune 30,2016 TotalDecember 31, 2015 Changes sinceDecember 31,2015 Futuredeliveries Options
Airbus A318 2 - 2 2 - - -
Airbus A319 34 32 66 68 (2) - -
Airbus A320 68 157 225 222 3 95 128
Airbus A321 26 21 47 43 4 19 -
Airbus A330-200 7 1 8 4 4 9 7
Airbus A330-300 4 8 12 12 - 2 -
Airbus A340-300 4 - 4 7 (3) - -
Airbus A340-600 4 13 17 17 - - -
Airbus A350 - - - - - 43 57
Airbus A380 12 - 12 10 2 - 7
Boeing 747-400 39 - 39 40 (1) - -
Boeing 757-200 1 2 3 3 - - -
Boeing 767-300 11 - 11 12 (1) - -
Boeing 777-200 41 5 46 46 - - -
Boeing 777-300 9 3 12 12 - - -
Boeing 787-800 8 - 8 8 - 1 12
Boeing 787-900 10 - 10 5 5 11 6
Boeing 787-1000 - - - - - 12 -
Embraer E170 6 - 6 6 - - -
Embraer E190 9 4 13 12 1 1 15
Group total 295 246 541 529 12 193 232
As well as those aircraft in service the Group also holds 3 aircraft (2015: 11) not in service.
This information is provided by RNS
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