Repsol S A : Alternative Performance Measures - Reconciliations Q2 and H1 2022

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REPSOL Group

Alternative

Performance Measures reconciliations 1st Half

and 2nd Quarter 2022

Translation of a report originally issued in Spanish. In the event of a discrepancy, the Spanish language version prevails

Translation of a report originally issued in Spanish

In the event of a discrepancy, the Spanish language version prevails.

ALTERNATIVE PERFORMANCE MEASURES

Repsol's financial information contains indicators and measures prepared in accordance with applicable financial reporting standards and regulations, as well as other measures prepared in accordance with the Group's Reporting Model, defined as Alternative Performance Measures (APMs). APMs are measures that are "adjusted" compared to those presented in accordance with IFRS-EU or with Supplementary Information on Oil and Gas Upstream Activities, and the reader should therefore consider them in addition to, but not instead of, the latter.

Repsol presents its segment performance measures including joint ventures or other companies which are jointly managed in accordance with the Group's investment percentage, considering its operational and economic indicators within the same perspective and degree of detail as those for companies consolidated under the full consolidation method. Thus, the Group considers that the nature of its businesses and the way in which results are analyzed for decision-making purposes is adequately reflected.

APMs are useful for users of financial information as they are the measures employed by Repsol's Management to evaluate its financial performance, cash flows or financial position when making operational or strategic decisions for the Group.

For more historical quarterly APM information, see www.repsol.com.

1. Financial performance measures

Adjusted net income

												First half
												ADJUSTMENTS
		Adjusted net	Reclassifications						Inventory effect		Total		IFRS-EU profit/
		of joint		Special items
		income		(2)			adjustments		loss
		ventures
Million euros		2022		2021		2022		2021		2022		2021		2022			2021		2022		2021		2022			2021
Operating income	4,894 ⁽¹⁾		1,679 ⁽¹⁾	(931)	(155)	(1,960)	(475)	1,661			675	(1,230)	45	3,664			1,724
Financial result	100	(111)		105	75	(95)	206		-	-	10	281	110			170
Net income of companies accounted	6	4		544	113	(6)		-		-	-	538	113	544			117
for using the equity method - net of tax
Net income before tax	5,000	1,572		(282)	33	(2,061)	(269)	1,661			675	(682)	439	4,318			2,011
Income tax		(1,776)		(619)		282		(33)		183		56		(420)			(171)		45		(148)		(1,731)			(767)
Consolidated net income for the year	3,224	953		-		-	(1,878)	(213)	1,241			504	(637)	291	2,587			1,244
Net income attributed to non-	(47)	6		-		-	34		-	(35)			(15)	(1)	(15)	(48)			(9)
controlling interests
TOTAL NET INCOME ATTRIBUTABLE TO	3,177	959		-		-	(1,844)	(213)	1,206			489	(638)	276	2,539			1,235
THE PARENT COMPANY

1. Net income from operations at current cost of supply (CCS).
2. The Inventory effect represents an adjustment to "Procurements" and "Changes in inventory of finished goods and work in progress" on the IFRS-EU income statement.

Translation of a report originally issued in Spanish

In the event of a discrepancy, the Spanish language version prevails.

													Second quarter
													ADJUSTMENTS
		Adjusted net			Reclassifications						Inventory effect		Total		IFRS-EU profit/
				of joint		Special items
		income				(2)			adjustments		loss
				ventures
Million euros		2022		2021			2022		2021		2022		2021		2022			2021		2022		2021		2022			2021
Operating income	3,080 ⁽¹⁾	917	⁽¹⁾	(624)	(45)	(1,486)	(379)	733			233	(1,377)	(191)	1,703			726
Financial result	84	(138)			33	57	(66)	218		-	-	(33)	275	51			137
Net income of companies accounted
for using the equity method - net of tax	5		4			389		99		(1)		-		-			-		388		99		393			103
Net Income before tax	3,169	783			(202)	111	(1,553)	(161)	733			233	(1,022)	183	2,147			966
Income tax		(1,005)		(296)			202		(111)		16		92		(187)			(60)		31		(79)		(974)			(375)
Consolidated net income for the year	2,164	487			-		-	(1,537)	(69)	546			173	(991)	104	1,173			591
Net income attributed to non-	(43)		1			-		-		31		-		(14)			(5)		17		(5)		(26)			(4)
controlling interests
TOTAL NET INCOME ATTRIBUTABLE TO
THE PARENT COMPANY	2,121	488			-		-	(1,506)	(69)	532			168	(974)	99	1,147			587

1. Net income from operations at current cost of supply (CCS)
2. The Inventory effect represents an adjustment to "Procurements" and "Changes in inventory of finished goods and work in progress" on the IFRS-EU income statement.

Special items

		First half			Second quarter
Million euros		2022			2021		2022			2021
Divestments	8			1	2			(5)
Indemnities and workforce restructuring	(15)			(54)	(12)			(31)
Impairment of assets	(1,230)			(5)	(1,064)			(15)
Provisions and others	(607)			(155)	(432)			(18)
TOTAL	(1,844)			(213)	(1,506)			(69)

EBITDA

							First half
		Group Reporting Model			Reclassifications of joint ventures		IFRS-EU(2)
Million euros
2022		2021			2022			2021		2022			2021
Upstream	3,689			1,845	(1,256)			(595)	2,433			1,250
Industrial	3,933			1,355	(34)			(30)	3,899			1,325
Commercial and Renewables	596			519	(11)			(6)	585			513
Corporate and others		(199)			(84)		48			26		(151)			(58)
EBITDA		8,019			3,635		(1,253)			(605)		6,766			3,030
Upstream
Industrial	(1,587)			(642)	9			-	(1,578)			(642)
Commercial and Renewables	(74)			(33)						(74)			(33)
Corporate and others
Inventory effect (1)		(1,661)			(675)		9			-		(1,652)			(675)
CCS EBITDA	6,358			2,960	(1,244)			(605)	5,114			2,355

1. Before tax.
2. Corresponds to "Income before tax" and "Adjustments to income" on the consolidated statement of cash flows under IFRS-EU.

Translation of a report originally issued in Spanish

In the event of a discrepancy, the Spanish language version prevails.

						First half
		Group Reporting Model		Reclassifications of joint		IFRS-EU(1)
						ventures
Million euros		2022		2021		2022			2021		2022		2021
Net income before tax	4,601	1,978	(283)			34	4,318	2,012
(-) Financial result	(5)	(96)	(105)			(74)	(110)	(170)
(-) Net income from investments accounted for using the equity method	(1)	(4)	(543)			(113)	(544)	(117)
Operating income	4,595	1,878	(931)			(154)	3,664	1,724
Depreciation of property, plant and equipment	1,388	1,254	(275)			(272)	1,113	982
Operating provisions	2,028	502	(46)			(188)	1,982	314
(Provision for) / Reversal of impairment provisions	1,862	179	(132)			(158)	1,730	21
(Provision for) / Reversal of provisions for risks	166	323	86			(30)	252	293
Other items	8		1		(1)			9		7		10
EBITDA	8,019	3,635	(1,253)			(605)	6,766	3,030

1. Corresponds to "Income before tax" and "Adjustments to income" on the consolidated statement of cash flows under IFRS-EU.

								Second quarter
		Group Reporting Model			Reclassifications of joint ventures		IFRS-EU(2)
Million euros
2022			2021			2022		2021		2022			2021
Upstream		2,004			918	(743)	(289)	1,261			629
Industrial		2,501			647	(20)	(17)	2,481			630
Commercial and Renewables		299			277	(7)	(4)	292			273
Corporate and others			(169)			(44)		49		2		(120)			(42)
EBITDA			4,635			1,798		(721)		(308)		3,914			1,490
Upstream
Industrial		(685)			(223)	8		-	(677)			223
Commercial and Renewables		(48)			(10)					(48)			10
Corporate and others
Inventory effect (1)			(733)			(233)		8		-		(725)			233
CCS EBITDA		3,902			1,565	(713)	(308)	3,189			1,723

1. Before tax.
2. Corresponds to "Income before tax" and "Adjustments to income" on the consolidated statement of cash flows under IFRS-EU.

						Second quarter
		Group Reporting Model		Reclassifications of joint		IFRS-EU(1)
						ventures
Million euros		2022		2021		2022		2021		2022		2021
Net income before tax	2,350	855	(203)	112	2,147	967
(-) Financial Result	(18)	(81)	(33)	(56)	(51)	(137)
(-) Net Income from Investments Accounted for using the Equity Method	(5)	(4)	(388)	(99)	(393)	(103)
Operating Income	2,327	770	(624)	(44)	1,703	726
Depreciation of property, plant and equipment	683	611	(140)	(133)	543	478
Operating provisions	1,618	401	43	(130)	1,661	271
(Provision for) / Reversal of impairment provisions	1,600	153	(29)	(113)	1,571	40
(Provision for) / Reversal of provisions for risks	18	248	72	(17)	90	231
Other items	7		16		-	(1)	7	15
EBITDA	4,635	1,798	(721)	(308)	3,914	1,490

1. Corresponds to "Income before tax" and "Adjustments to income" on the consolidated statement of cash flows under IFRS-EU.

Translation of a report originally issued in Spanish

In the event of a discrepancy, the Spanish language version prevails.

ROACE

NUMERATOR (Million euros)	1H 2022		1H 2021
Operating income IFRS-EU	3,664	1,724
Reclassification of joint ventures	931	155
Income tax (1)	(1,990)	(658)
Net income of companies accounted for using the equity method - net of tax	-		4
I. ROACE result at weighted average cost	2,605	1,225
DENOMINATOR (Million euros)		1S 2022		1S 2021
Total equity	25,346	20,962
Net debt	5,031	6,386
Capital employed at period-end	30,377	27,348
II. Average capital employed (2)	29,467		27,333
ROACE (I/II) (3)	8.8%		4.5%

1. Does not include income tax corresponding to financial results.
2. Corresponds to the average balance of capital employed at the beginning and end of the period.
3. ROACE on CCS (without taking into account the Inventory Effect) amounts to 4.5%.

2. Cash flow measurements

Free cash flow and Cash generation

Million euros

I. Cash flows from / (used in) operating activities (cash flow from operations)

1. Cash flows from / (used in) investing activities Free cash flow (I+II)

Cash generation

III. Cash flows from / (used in) financing activities and others

(1)

Net increase / (decrease) in cash and cash equivalents (I+II+III)

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

First half

Adjusted cash flow		Reclassification of joint		IFRS-EU statement of cash
	ventures and others		flow
2022		2021		2022		2021		2022			2021
2,930	1,932	(598)	(392)	2,332			1,540
(1,476)	(977)	89	32	(1,387)			(945)
1,454	955	(509)	(360)	945			595
472	163	(487)	(341)	(15)			(178)
(2,634)	(286)	426	284	(2,208)			(2)
(1,180)	669	(83)	(76)	(1,263)			593
5,906	4,578	(311)	(257)	5,595			4,321
4,726	5,247	(394)	(333)	4,332			4,914

1. Includes payments for dividends and returns on other equity instruments, interest payments, other proceeds from / (payments for) financing activities, proceeds from / (payments for) the issue / (return) of equity instruments, proceeds from / (payments for) financial liabilities and the exchange rate fluctuations effect.