Glossary Iberdrola

Financial statement that expresses the financial position of a company.

Stock index that includes companies that stand out for their performance in gender equality through the implementation of corporate policies for this purpose. IBERDROLA has been selected in the ranking of the index, in recognition of its equal opportunity policy. See "Board of Directors Composition and Member Selection Policy" and "Equal Opportunity and Anti-Harassment Policy".

Collective corporate decision-making body, made up of the directors appointed or ratified by the shareholders at a general shareholders' meeting, vested with the power to represent the company.

IBERDROLA's Board of Directors focuses its activity on establishing the general management policies, strategies, and guidelines for the Group, supervising the general development of such strategies and guidelines, and deciding matters of strategic significance.

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World Commission on Environment and Development, named after its chair Gro Harlem Brundtland, a former prime minister of Norway. The results of its works were published in 1987 under the title "Our Common Future" and is one of the leading reference texts on sustainable development.

Rules approved by the shareholders governing the operation of a company, the relationships between the company and its shareholders, the relationships among shareholders themselves, and the manner in which it must act with respect to third parties. 

The By-Laws of IBERDROLA contain the definition of its enterprise, the particular concept of corporate interest that must govern the conduct of its management decision-making bodies, the commitment to the social dividend and to its purpose and values, and the determination of the essential basis and of the most significant foundations and aspects of its business, corporate and institutional organisation, which make up its virtual soul.

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See "Announcement of the call to meeting".

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Termination of the relationship between a director and the company, which occurs upon the expiration of the term of office to which the director was appointed or when so decided by the shareholders in exercise of their powers at a general shareholders' meeting.

Position held by the chair of the board of directors of a company at its general shareholders' meeting, whose function is, among other things, to verify the legality of the meeting, certify the identity and status of the attendees, regulate the conduct thereof and announce the results of the voting, which must be recorded in the minutes.

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Counsel appointed by the Board of Directors, who has the duty to give advice on the legality of the resolutions adopted by the board of directors and, if applicable, of the deliberations at which the counsel is present; evidence of all action taken in the counsel's professional capacity must be recorded in the corporate documents, as provided by Law 39/1975 of 31 October on the Appointment of Counsel to the Board of Directors of Certain Commercial Companies.

Atmospheric pattern that manifests cyclically over a long period of time in a particular region or area of the planet. The atmospheric patterns are: tropical, subtropical, marine and Mediterranean.

See "Co-ownership of shares".

A situation in which one or more shares of a company are held by several owners. The co-owners of one or more shares must designate a single person for the exercise of shareholder rights, and shall be jointly and severally liable to the company for all obligations arising from such shareholder status. The same rule applies to other instances of co-ownership of rights in equity interests or shares.

A code that further develops the ethical principles set out in the Purpose and Values of the Iberdrola group, good governance recommendations and social responsibility principles, and is intended to serve as a guide for the conduct of the directors, professionals and suppliers of the Company and its group of companies.

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A process whereby electricity and useful thermal energy, such as steam, domestic hot water and cold air, are obtained simultaneously. The advantages of cogeneration are greater energy efficiency, fuel savings and a reduction in CO2 emissions.

Committees created by the board of directors and made up of directors in order to issue proposals and reports (in the case of consultative committees) or make binding decisions (in the case of executive committees) in the areas within their purview. At least one audit committee and one appointments and remuneration committee (or separate appointments and remuneration committees) are required, with the requirements stated in the Companies Act.

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Restatement approved by Royal Legislative Decree 1/2010 of 2 July on the Rules Governing Partnerships Limited by Shares, Joint-Stock Companies and Limited Liability Companies. See "Company".

A company in which capital is divided into shares of stock and made up of the contributions of all the shareholders, who are not personally liable for the debts of the company.

Books legalised at the Commercial Registry in which the minutes of the meetings held and the decisions and resolutions adopted by the corporate decision-making bodies are recorded.

Set of activities that a company can perform in accordance with the provisions of its by-laws.

Fixed-income negotiable security representing a debt for the issuer thereof, which bears interest in favour of the investor and entitles the holder to exchange it for newly-issued shares at the price specified in the terms of the issue.

The shareholders acting at a General Shareholders' Meeting, the Board of Directors, the Executive Committee, and the chairman & chief executive officer of IBERDROLA, S.A.

Internal rules of a listed company. IBERDROLA's Corporate Governance System is made up of its By-Laws, the Purpose and Values of the Iberdrola group, corporate policies and other governance and compliance rules.

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Guidelines of a company that guide the conduct of its shareholders, officers and other professionals. IBERDROLA's corporate policies are grouped into corporate governance and regulatory compliance policies, risk policies and sustainable development policies.

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The European Union defines it as "The responsibility of enterprises for their impact on society". This definition includes any kind of impact (direct or indirect, positive or negative) that companies may have on their various Stakeholders.

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Defined in the Cadbury Report as the system by which companies are directed and controlled, it is a set of rules, principles and procedures that govern the structure and operation of a company's governance bodies and the relations among the board of directors, shareholders and stakeholders.

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Companies of the IBERDROLA group grouping together equity stakes in each of the head of business companies that carry out their activities in the various countries in which the Group operates and centralising the provisions of services common to such companies.

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Entity that issues reports and ratings on the ability of issuers to meet their short-and-long-term financial obligations.

Time at which trading officially ends on the Automated Quotation System (Electronic Market), namely, at 17:35 and 30 seconds on a trading day, and which determines the closing price of a share on that trading day.

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Fixed-income negotiable security representing a pro rata share of a loan obtained by the issuer and entitling the holder thereof to collect interest at a fixed or variable rate and to the return of the principal provided on the date of maturity of the issue.

Holder or subscriber of debentures.

Process by which countries, companies and individuals attempt to achieve an economy with low CO2 emissions by reducing their emissions. In the energy context, this term refers to the efforts to maximise the reduction in the amount of CO2 emissions produced per unit of energy consumed by encouraging emission-free energies.

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Portion of corporate profits used to remunerate the shareholders.

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Earnings before interest, taxes, depreciation and amortisation. Gross operating profit before interest, taxes, provisions, amortisation and depreciation.

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Compensatory measure provided by the European Commission (COM 2003, 830 final) in the planning of greenhouse gas emissions. "The accommodation of early action (in a national plan for the assignment of emission rights) is considered as desirable from a fairness point of view. Those installations that have already reduced greenhouse gas emissions in the absence of or beyond legal mandates should not be disadvantaged vis-à-vis other installations that have not undertaken such efforts. The application of this criterion necessarily implies fewer allowances available for installations that have not undertaken early action." See "Atmosphere", "Global warming", "CO2 equivalent", "Emission Trading Scheme (ETS)" and "Greenhouse Gases (GHGs)".

Result of dividing net attributable profit by the number of outstanding shares.

Electronic tool required by the Companies Act for listed companies in Spain in order to facilitate communication among shareholders and shareholder associations through its corporate website on occasion of the call to and until the holding of each general shareholders' meeting.

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A business association, of which IBERDROLA is a founding member, comprising a group of large companies committed to sustainable growth from the economic, social and environmental point of view. Its aim is to serve as a forum of dialogue with stakeholders and as a sustainable development benchmarking platform and to transmit good practices to the Spanish corporate community.

Director who performs management duties within the company or within its group, whatever the legal relationship the director maintains therewith.

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Meeting of the shareholders that is not considered to be an annual general meeting. An extraordinary general meeting can be held at any time, when the circumstances so advise and after it has been called as provided by the regulations.

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Consolidated set of standards for preparing sustainability reports of the Global Reporting Initiative, the purpose of which is to serve as a guide in the preparation of public reports on the economic, environmental and social impacts of organisations, and thus their contributions (positive or negative) to the goal of Sustainable Development. See "Non-Financial Information Statement - Sustainability Report".

Meeting at which the shareholders can decide on the matters within their purview by the majority established by law or in the by-laws.

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First global standard for the preparation of sustainability reports of companies that wish to evaluate their economic, environmental and social performance.

Document approved by the CNMV on 18 February 2015 that contains the good governance recommendations with respect to which listed companies in Spain must report their level of compliance in their annual corporate governance report.

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The head of business companies of the Group are in charge of the day-to-day administration and effective management of each of the business subgroups, as well as day-to-day control through their respective boards of directors and management decision-making bodies.

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Rights inherent to all human beings, regardless of nationality, place of residence, sex, national origin or ethnicity, colour, religion, language or any other status. We are all equally entitled to our human rights without discrimination. These rights are all interrelated, interdependent and indivisible.

Respect for human rights is one of the main pillars of IBERDROLA's culture of social responsibility and of its contribution to sustainable development, which is why it has a set of tools that guarantee and promote the protection of and respect for human rights.
See "Policy on Respect for Human Rights".

What is an Increase in share capital: Resolution adopted by the shareholders at a general shareholders' meeting or, if applicable, by the management decision-making body in exercise of powers granted or delegated thereto by the shareholders, in order to increase capital through the conversion of reserves into capital or the provision of fresh funds. See "Share capital".

Director who is appointed because of the personal and professional qualities thereof, who can carry out their duties without being constrained by relationships with the company, its group of companies, its significant shareholders or its officers, and who is not affected by the disqualifications from being classified as independent provided by the law applicable to each company.

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All information of a specific nature referring directly or indirectly to one or more negotiable securities, financial instruments or issuers that has not been made public and that, if it is or had been made public, could appreciably influence or could have appreciably influenced the price of said securities on a market or organised trading system.

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Resolution adopted by the shareholders at a general shareholders' meeting or, if applicable, by the board of directors in exercise of powers previously delegated thereto by the shareholders, in order to place homogeneous negotiable securities into circulation and make them available to the public for subscription.

Documento que elabora IBERDROLA desde 2003 para informar sobre el desempeño de la Sociedad en las dimensiones económica, ambiental, social y de gobierno corporativo, siguiendo el conjunto consolidado de estándares para la elaboración de informes de sostenibilidad y el suplemento para las empresas del sector eléctrico, ambos del Global Reporting Initiative (GRI), así como la norma AA1000, y que se somete a una verificación externa independiente.

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Person in whose name ownership of the shares is recorded and who is therefore attributed the status of shareholder as well as the rights and duties established by law and the Corporate Governance System.

A company carrying out liberalised activities. See "Liberalised activities".

A company whose shares are admitted to trading on an official secondary market. IBERDROLA is a listed company.

Set of practices relating to the improper use of inside information or the manipulation of markets, such as the listing price of a financial instrument. These types of practices are prohibited by commercial law and may constitute a crime.

Commercial company that manages the system of offers to buy and sell electric energy on the daily and intraday energy market on the terms established by applicable regulations.

Business combination carried out through the dissolution of one or more companies that contribute their assets to another pre-existing or newly created company, with the shareholders of the predecessor companies becoming shareholders of the new one.

Document containing a written record of the proceedings at meetings of the corporate decision-making bodies and of the resolutions or decisions adopted thereby.

The profit obtained by a company after subtracting all expenses (including amortisation/depreciation and taxes) from total revenues.

Nitrogen oxides are composed of nitrogen and oxygen, two elements that do not usually react with each other, but which may do so during high-temperature combustion, such as in a car engine. Such gases include nitric oxide (NO) and nitrogen dioxide (NO2), which contribute towards air pollution, and nitrous oxide (N2O), which is one of the main greenhouse gases; although its warming effect is not very high, its stays in the atmosphere for a long time so its impact is 298 times greater than CO2.

Set of information regarding environmental, social and corporate governance issues, including issues relating to personnel, human rights and the fight against corruption and bribery, which companies considered to be public interest entities under the laws on auditing have had to include since 2018 in their management report or in a separate report, which must be subject to independent external verification and submitted for the approval of the shareholders at the General Shareholders' Meeting. IBERDROLA submits it for the approval of the shareholders at the General Shareholders' Meeting as a specific item on the agenda. See "Statement of Non-Financial Information - Sustainability Report".

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Notifications sent by the Company to the National Securities Market Commission (Comisión Nacional del Mercado de Valores) (CNMV) in order to immediately publicise and disseminate significant information to the market. Notifications may be inside information or other relevant information.

Inside information is specific, non-public information referring to an issuer or financial instrument that, if made public, could have an appreciable influence on the price, while information categorised as other relevant information does not affect the price.

Notifications sent by the Company to the National Securities Market Commission (Comisión Nacional del Mercado de Valores) (CNMV) in order to immediately publicise and disseminate significant information to the market. Notifications may be inside information or other relevant information.

Inside information is specific, non-public information referring to an issuer or financial instrument that, if made public, could have an appreciable influence on the price, while information categorised as other relevant information does not affect the price.

Initiative adopted by IBERDROLA, S.A. in order to strengthen the relationship with those persons who have demonstrated their support for and confidence in the track record of the Company through the purchase of securities thereof. Joining this club allows the shareholders of IBERDROLA, S.A. to be continuously informed of the performance and strategy of the Company.

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Official journal in which all events, announcements and legal notices of commercial companies are published as required by law. The electronic issue of the Official Bulletin of the Commercial Registry is published on the website www.boe.es/diario_borme (Spanish version) with the same effects that are legally attributed to the printed edition thereof.

Remuneration system that allows shareholders to receive bonus shares of the company, with favourable tax treatment, without limiting their ability to receive the dividend in cash. IBERDROLA offers this option to its shareholders through the "Iberdrola Flexible Remuneration" optional dividend system.

Security granting the same rights to all holders thereof, as is the case with the shares issued by IBERDROLA. Ordinary shares carry no preferential rights, as opposed to preferred shares.

A director who is not an executive director and who also does not fit the description of a proprietary or independent director.

Shares of a company derivatively acquired by the company itself or through companies belonging to the same group.

Title whereby the holder of the shares acquires the rights and becomes subject to the obligations inherent to such shares.

The market value of a company's shares (stock market capitalisation) divided by the net attributable profit. Reflects the value of the net attributable profit as a function of the stock market valuation (capitalisation).

Result of dividing the share capital by the number of shares.

Financial documents prepared on a quarterly, semi-annual and annual basis pursuant to the provisions of Royal Decree 1362/2007, which are publicised by delivery to the CNMV and which are therefore available to shareholders and investors. See "Annual accounts".

Delivery of shares as security for a loan, a credit facility or for compliance with a principal obligation generally.

The right of all shareholders to acquire, on a preferential basis, newly-issued shares in the event of an increase in capital or the conversion into shares of an issue of convertible debentures.

Share carrying some financial privilege in addition to that carried by ordinary shares (normally, a higher dividend by means of a special participation in profits). They are rare in the Spanish market, and IBERDROLA currently has no shares of this type.

Principle adopted by applicable law to guarantee equal treatment in the acknowledgement and exercise of their rights by all shareholders who are in the same position or have the same interest.

Agreement executed by and among some or all of the shareholders or members of a commercial company in order to supplement, specify or modify their internal relationships and the legal and by-law relationships governing the company. They are legal devices protected under article 1255 of the Civil Code, which embodies the principle of free will of the parties in contractual matters.

Financial statement reflecting a summary of all income and expenditure during a financial year.

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External director who either holds a shareholding interest equal to or greater than that legally regarded as significant and who has been appointed owing to their status as a shareholder, even if their shareholding interest does not reach said amount, or who represents shareholders among those described above.

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Entity that offers recommendations to institutional investors regarding the exercise of voting rights at the listed companies in which they invest.

Financial transaction whereby an individual or legal entity makes a public offering to the shareholders of a listed company for the acquisition of its shares in order to obtain a significant interest in the capital or to increase their interest by a specified percentage. A public takeover bid can always be made on a voluntary basis, but it must be targeted to all of the shareholders in the case of a takeover bid for a listed company in Spain.

Ideological and axiological basis that sustains IBERDROLA's corporate enterprise, guides its strategy and conduct, governs its day-to-day activities and guides the ethical behaviour of the entire human team participating in the realisation thereof.

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Percentage of profits used to remunerate the shareholders.

Percentage of share capital accounted for by shareholders present in person and by proxy that is required for the valid formation of the corporate decision-making body.

Resolution adopted by the shareholders at a general shareholders' meeting that entails a reduction in the nominal value of the shares, the redemption of shares, or the formation of a pool in order to exchange them, and the purpose of which may be to return contributions, cancel capital calls, create or increase reserves, re-establish equilibrium between the capital and the assets of the Company diminished due to losses, or several of such purposes simultaneously.

A company carrying out regulated activities. See "Regulated activities".

Portion of the consolidated result after taxes and minority interests that belongs to the holders of ordinary shares of the parent company of the Group.

The power of all holders of shares of a company with voting rights to attend the general shareholders' meeting and take part in deliberations thereof. A national identity document or equivalent document is sufficient to be able to attend IBERDROLA's General Shareholders' Meeting and evidence one's status as a shareholder.

The right of all shareholders entitled to attend the general shareholders' meeting to be represented by another person, provided that said person complies with the requirements and formalities established by law and the by-laws.

The power of all shareholders of a company to request in writing the information or clarifications that they deem are required, or to ask the written questions they deem relevant, regarding the matters contained in the agenda for the general shareholders' meeting.

The right of all shareholders to participate in the adoption of resolutions at the general shareholders' meeting. If the shareholder cannot attend in person, this right may be delegated to another person, by giving them a proxy using one of the means provided by law and the by-laws.

Position generally held by the secretary of the board of directors of a company at the general shareholders' meeting, the duties of which include preparing the minutes of the meeting, assisting the chair, and certifying and formalising the resolutions adopted.

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Position designated by the board of directors of a listed company, who shall in all cases be responsible for the following duties under the Companies Act:

- Keep custody of the documentation of the board of directors, record the proceedings of meetings in the minute books and certify the content thereof and the resolutions adopted.
- Endeavour to ensure that the conduct of the board of directors conforms to applicable legal provisions and adheres to the by-laws and other internal regulations.
Assist the chairman so that the directors receive information relevant to the exercise of their duties sufficiently in advance and in the proper format.

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Regulation of the Spanish systems for trading financial instruments approved by Royal Legislative Decree 4/2015 of 23 October establishing the principles for the organisation and operation thereof and the rules applicable to the financial instruments traded therein, as well as those applicable to the issuers of such instruments, the provision of investment services in Spain, and the rules for supervision, inspection and imposition of penalties.

Equity of a company consisting of the shareholders' contributions.

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An individual or legal entity holding shares of a company.

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All of the individuals and legal entities holding shares issued by a company.

Percentage of the capital of a listed company that directly or indirectly exceeds a threshold specified from time to time by applicable legal provisions. In Spain, it is currently deemed that a shareholder possesses a significant interest when holding at least 3% of voting rights. Changes in a significant interest must be reported by the holder to the CNMV as provided by securities market regulations.

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Shareholder whose interest is equal to or greater than that legally regarded as significant at any time. See "Significant interest".

Term adopted by the Iberdrola group to express its goal for the sustainable creation of value for all of its stakeholders, especially through its contribution to the communities in which the Company does business, both from the economic viewpoint and from the perspective of business ethics, the promotion of equality and justice, the encouragement of innovation and the protection of the environment, as well as through the generation of quality employment and leadership in the fight against climate change.

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Also known as special purpose vehicle, it is an entity created for a specific purpose or for a limited period.

Resolution adopted by the shareholders at a general shareholders' meeting in order to divide one, more or all portions of the corporate assets and transfer them en bloc to an existing or newly-created company that acquires them as a universal successor.

Report that the audit committees of listed companies in Spain must prepare to verify the independence of the Company's statutory auditor.

Financial indicator of the equity value of the Company on the Stock Market, which is calculated by multiplying the number of its outstanding shares by the market price.

Reference standard prepared by a specialised agency, which a company may choose to follow for the preparation of sustainability reports. See "Sustainability Report".

Development that satisfies the needs of the present without compromising the ability of future generations to meet their own needs. Sustainable development covers three dimensions: economic, environmental and social. See "Sustainable Development Policy".

Transaction whereby a change in ownership of the shares is effected.

Fixed-income negotiable security representing a debt for the issuer thereof, which bears interest in favour of the investor and is repayable at maturity or upon early repayment.

Position held, upon a proposal of its chairman and after a report from the appointments and remuneration committee, by one or more members of the board of directors to temporarily replace the chairman in the event of vacancy, absence, illness or incapacity.

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