Iberdrola, S.A.
Scrip Dividend Scheme
Information Booklet
January 2017
Iberdrola 12pp May 2015_Iberdrola 12pp 04/06/2015 06:37 Page 2
Dear shareholder,
The 2016 Annual General Shareholders’ Meeting of Iberdrola, S.A. (“Iberdrola”) approved a new offer of a scrip
dividend scheme to be implemented through two share capital increases. The Board of Directors of Iberdrola
has approved
on 25General
October 2016
to carry outMeeting
the implementation
of the
second
capital increase,
whichthe
is
The
2015 Annual
Shareholders’
of Iberdrola,
S.A.
(“Iberdrola”)
approved
expected to be
closed
2017. Thisscheme
booklet explains
the implicationsthrough
for shareholders
of Iberdrola
scrip dividend
continued
offer
of in
a January
to be implemented
two share
capitalof
receiving shares
a corporate
service.
increases.
The through
Board of
Directorsnominee
of Iberdrola
has approved on 28 April 2015 to carry out the
Dear shareholder,
implementation of the first capital increase, which is expected to be closed in July 2015. This
Shares, when
referred
in this booklet,for
means
CREST Depository
Interests
whichshares
represent
an
booklet
explains
thetoimplications
shareholders
of Iberdrola
of(CDIs),
receiving
through
a
entitlementnominee
to Iberdrola
shares held through a nominee service, and shareholders, when referred to in this
corporate
service.
booklet, means the holders of those CDIs through that service. Please refer to the Glossary below for other
terms used in this booklet.
Shares, when referred to in this booklet, means CREST Depository Interests (CDIs), which
The schemean
offers
shareholders
the opportunity
choose
whether
to continue
to receive
cash amount
represent
entitlement
to Iberdrola
sharesto
held
through
a nominee
service,
andashareholders,
or whether
to receive
issued Iberdrola
Therefore,
this initiative
offers flexibility
and enables
when
referred
to innewly
this booklet,
meansshares.
the holders
of those
CDIs through
that service.
Please
shareholders
to choosebelow
according
theirterms
personal
situation.
refer
to the Glossary
for to
other
used
in this booklet.
Please note that an election by UK shareholders in respect of the January 2017 scrip dividend
shallscheme
be applied
in respect
of future
dividendto
schemes
shareholders
an express
The
offers
shareholders
thescrip
opportunity
choose unless
whether
to continuemake
to receive
a cash
contrary or
election
at the
time. issued Iberdrola shares. Therefore, this initiative offers
amount
whether
to relevant
receive newly
flexibility and enables shareholders to choose according to their personal situation.
Under this scheme, shareholders will receive one free allocation right for every share of Iberdrola held as of 6
July 2016 at 11:59 pm Madrid time, provided that the shares have been acquired on or before 4 January 2017
at 11:59 p.m. Madrid time (last trading date).
Please note that an election by UK shareholders in respect of the July 2015 scrip dividend
shall be applied in respect of future scrip dividend schemes unless shareholders make
As a shareholder you will have the three options described below:
an express contrary election at the relevant time.
Optionthis
1: Continue
to receive
cash will,
(theon
default
option)
Under
scheme, each
shareholder
the record
date, receive one right for every share
held.
Shareholders can sell their rights off market to Iberdrola at a fixed price. This option has the same Spanish
As
a shareholder you will have the three options described below:
withholding tax treatment as a normal dividend paid in cash (tax currently withheld at 19%, although a
refund may
apply in specific
circumstances).
Seedefault
further information
Option
1: Continue
to receive
cash (the
option) on page 2.
Shareholders
sellrights
their rights
off market to Iberdrola at a fixed price. This option has the same
Option 2: Sellcan
your
on market
Spanish withholding tax treatment as a normal dividend paid in cash (tax withheld currently at
20%,
although
refund
in certain
circumstances).
See further
information
onreceive
page 2.
Shareholders
cana sell
theirmay
rightsapply
on market
(the Spanish
Stock Exchanges).
The proceeds
you will
from such
fluctuate
on market prices and the currency exchange rate between Euros
Option
2:sale
Sellwill
your
rightsdepending
on market
and Sterling and, accordingly, there can be no guarantee of the price received. This option has no Spanish
Shareholders
sell for
their
rights on market
Spanish
Stock Exchanges).
The Spanish
proceeds
withholding taxcan
liability
non-residents
in Spain;(the
however,
this option
could have certain
taxyou
will
receive from
such sale will
fluctuate
depending
on market
prices
implications
for non-residents
in Spain.
See further
information
on page
3. and the currency exchange
rate between Euros and Sterling and, accordingly, there can be no guarantee of the price received.
This option
has no Spanish
withholding
tax liability. See further information on page 3.
Option
3: Receive
new Iberdrola
shares
Option 3: Receive new Iberdrola shares
Shareholders can elect to receive, for free, a number of newly issued Iberdrola shares to which they are
Shareholders
can on
elect
receive,
for free,
a number
of newly
issued
to which
entitled depending
theto
rights
they hold.
The number
of shares
received
willIberdrola
depend onshares
the Iberdrola
share
they
arethe
entitled
depending
on the27,
rights
hold.
The number
of2shares
depend
price on
stock trading
days within
28, 29they
and 30
December
2016 and
Januaryreceived
2017. Thiswill
option
has no
on
the Iberdrola
share
price on
stock trading
days See
within
24 and
30 June on
(both
inclusive).
This
Spanish
withholding
tax liability
forthe
non-residents
in Spain.
further
information
page
4.
option has no Spanish withholding tax liability. See further information on page 3.
1
Iberdrola 12pp May 2015_Iberdrola 12pp 04/06/2015 06:37 Page 3
Default option
Default option
Unless you have chosen a different option in the latest scrip dividend, option 1 is the default
option, therefore, you don’t need to do anything else if this option is your preferred choice and,
Unless you have chosen a different option in the latest scrip dividend, option 1 is the default option,
if you do not return a valid form, you will automatically be assumed to have selected option 1. If
therefore, you don’t need to do anything else if this option is your preferred choice and, if you do not return
you wish to choose option 2 or option 3 or to change previous elections, you should complete,
a valid form, you will automatically be assumed to have selected option 1. If you wish to choose option 2 or
sign and return to your nominee the form enclosed, or you can apply online at
option 3 or to change previous elections, you should complete, sign and return to your nominee the form
www.shareview.co.uk/clients/Iberdrolascrip.
enclosed, or you can apply online at www.shareview.co.uk/clients/iberdrolascrip.
Whichever option you choose, should you wish to make a different choice for future scrip
dividends,option
you can
so byshould
electing
by aproviding
a newfor
instruction
Equiniti,you
who
Whichever
youdo
choose,
you online
wish to or
make
different choice
future scripto
dividends,
can
cansobe
as shown
below. a new instruction to Equiniti, who can be contacted as shown below.
do
bycontacted
electing online
or by providing
Where to find help
Where to find help
At the end of this booklet there are some questions and answers in respect of the new scrip
dividend
If youthere
haveare
further
please
telephone
theofShareholder
At the endscheme.
of this booklet
some questions,
questions and
answers
in respect
the new scripHelpline
dividendon the
numbers
set
out
below.
The
Shareholder
Helpline
is
available
from
8.30
a.m.
to
5.30
p.m. (London
scheme. If you have further questions, please telephone the Shareholder Helpline on the numbers
set
time)
Monday
to Friday (except
bank
and other
holidays
England
and
Wales).toCalls
to the
out
below.
The Shareholder
Helpline
is available
frompublic
8.30 a.m.
to 5.30in
p.m.
(UK time)
Monday
Friday
0871
384
2936
number
from
inside
the
United
Kingdom
are
charged
at
8
pence
per
minute
(excluding public holidays in England and Wales). Calls to the + 44 121 415 7075 number from outside the
(including
VAT) are
from
a BT landline.
Other
service providers’
charges
may vary.
Calls to
the +made
44 121
United Kingdom
charged
at applicable
international
rates. Different
charges
may apply
to calls
415
7075
number
from
outside
the
United
Kingdom
are
charged
at
applicable
international
from mobile telephones and calls may be recorded and monitored for security and training purposes.rates.
Different charges may apply to calls made from mobile telephones and calls may be recorded and
monitored for security and training purposes.
Shareholder Helpline
Shareholder Helpline
2936
(frominside
insidethe
the United
United Kingdom)
08710371
384384
2936
(from
Kingdom)
or +44
121121
415415
7075
(from
UnitedKingdom)
Kingdom)
or +44
7075
(fromoutside
outside the
the United
Please note that, for legal reasons, the Shareholder Helpline is only able to provide
information contained in this document and information relating to the Company’s share
Please
note
that,
legal to
reasons,
the Shareholder
Helplineofisthe
onlyscrip
able to
provide information
register
and
is for
unable
give advice
on the merits
dividend
scheme or to
contained
in thisfinancial,
documenttax
andorinformation
relating
to the Company’s share register and is unable
provide legal,
investment
advice.
to
give advice
theadvised
merits ofthat
the scrip
dividend
or to provide
legal,is
financial,
tax orto the
Finally,
pleaseonbe
the July
2015scheme
scrip dividend
scheme
cumulative
investment
advice
distribution, with a charge to the results for the fiscal year ended on 31 December 2014, of a gross
dividend of €0.03 per share, which has been approved by the General Shareholders’ Meeting of
Option
Sell on
the27rights
market to Iberdrola and receive a fixed amount of cash
Iberdrola1-held
Marchoff
2015
Option
1- Sell
the
rightsoption
off inmarket
to Iberdrola
receive
fixed
Unless you have
chosen
a different
the latest scrip
dividend, this isand
the default
optionaand
amount
of casha fixed amount of cash.
implies you receiving
Unless you have chosen a different option in the latest scrip dividend, this is the default option
Under
optionyou
1, your
rights will
be sold
off market
to Iberdrola at a fixed price (the Purchase Price).
and
implies
receiving
a fixed
amount
of cash.
Under
optionPrice
1, your
rightsIberdrola
will be sold
market toeach
Iberdrola
at market
a fixed is
price
(the Purchase
Price).
The Purchase
at which
willoff
repurchase
right off
expected
to be at least
€0.135
gross. The
finalatvalue
of the
Purchase
will be announced
onoff
3 January
and published
The
Purchase
Price
which
Iberdrola
willPrice
repurchase
each right
market2017
is expected
to be at
at
www.iberdrola.com.
notevalue
that, when
final Purchase
is announced,
be2015
no direct
least
€0.113 gross. Please
The final
of thethe
Purchase
Price Price
will be
announcedthere
on 1will
July
and
communication
with shareholders Please note that, when the final Purchase Price is announced,
published
at www.iberdrola.com.
there will be no direct communication with shareholders.
Spanish withholding
taxtax
applies
in the
way as
it does
relation
to a normal
dividend.
For more
Spanish
withholding
applies
in same
the same
way
as itindoes
in relation
to acash
normal
cash dividend.
information
in relation toin
taxation
ofto
this
option please
see
page
8 of8this
information
booklet.
For more information
relation
taxation
please
see
page
of this
information
booklet.
Followingsettlement
settlement
of the
off market
yourIberdrola
rights, Iberdrola
willthe
pay
you the
Purchase
Following
of the
off market
sale ofsale
yourofrights,
will pay you
Purchase
Price
in
Price
in
respect
of
each
right.
This
amount
less
Spanish
withholding
tax
will
be
paid
to you in
respect of each right. This amount less Spanish withholding tax will be paid to you in Sterling in accordance
Sterling
accordance
which
applyAccordingly,
to the payment
of your
with
your in
usual
instructionswith
whichyour
applyusual
to the instructions
payment of your
dividends.
the final amount
dividends.
you will receive will depend on the currency exchange rate between Euros and Sterling.
If you do not return a valid scrip dividend mandate form nor apply online at
www.shareview.co.uk/clients/Iberdrolascrip you will be deemed to have chosen option 1.
2
Iberdrola 12pp May 2015_Iberdrola 12pp 04/06/2015 06:37 Page 4
Example – option 1
If you do not return a valid scrip dividend mandate form nor apply online at
www.shareview.co.uk/clients/iberdrolascrip
you will be deemed to have chosen option 1.
3 I hold 500 shares.
3 I receive
500
Example
– option
1 rights.
3 Those
rights are sold to Iberdrola for €0.113 each (this price is indicative only).
√ I hold
500 shares.
I still hold 500 shares and I receive the Sterling equivalent of €56.500 (500 rights x
€0.113) in cash less Spanish withholding tax of €11.300 (20% x €56.500) = €45.200
√ I receive 500 rights.
√ Those rights are sold to Iberdrola for €0.137* each.
Option
2 - Sell the rights on market and receive cash
I stillrights
hold 500
and I receive
the Sterling
of €68.500
(500 rights
x €0.137)
in cashday
The
willshares
be admitted
to trading
on theequivalent
Spanish Stock
Exchanges
on the
next trading
less
withholding
tax of
€13.015
(19% x €68.500)
= €55.485.
afterSpanish
they are
issued to you,
which
is expected
to be on
3 July 2015.
* This price is for illustrative purposes only.
If you choose this option, your rights (along with those of the other shareholders who have
chosen 2
this
option)
will beon
delivered
to a receive
broker incash
one aggregated amount and sold on the
Option
- Sell
the rights
market and
Spanish Stock Exchanges by 17 July 2015.
The rights will be admitted to trading on the Spanish Stock Exchanges on the next trading day after they are
The amount you receive per right will depend on the market prices on the Spanish Stock
issued to you, which is expected to be on 1 February 2017.
Exchanges and the currency exchange rate between Euros and Sterling. This amount may be
greater, lesser or equal to the amount you would have received under option 1. There is no
If you choose this option, your rights (along with those of the other shareholders who have chosen this
guarantee of the price you will receive for such rights. In addition, you will be charged with
option) will be delivered to a broker in one aggregated amount and sold on the Spanish Stock Exchanges by
brokerage fees of 0.3%.
19 January 2017.
Following settlement of the on market sale of your rights, you will receive the equivalent in
The amount you receive per right will depend on the market prices on the Spanish Stock Exchanges and
Sterling of the proceeds of the sale of your rights on the market less brokerage fees. This amount
the currency exchange rate between Euros and Sterling. This amount may be greater, lesser or equal to the
will
be paid to you in Sterling by cheque or in accordance with your usual instructions which
amount you would have received under option 1. There is no guarantee of the price you will receive for such
apply
to the payment of your dividends.
rights. In addition, you will be charged with brokerage fees of 0.3%.
Spanish withholding tax does not apply to this option. For more information in relation to
Following please
settlement
the on
sale of your rights,
you will receive the equivalent in Sterling of
taxation
see of
page
8 ofmarket
this information
booklet.
the proceeds of the sale of your rights on the market less brokerage fees. This amount will be paid to you
in Sterling
cheque or insign
accordance
with your
usual
instructions
which
apply toform
the payment
your
You
mustbycomplete,
and return
your
scrip
dividend
mandate
to theofaddress
dividends. on the form by 5.00 p.m. on 8 July 2015 or apply online at
shown
www.shareview.co.uk/clients/Iberdrolascrip by no later than 5.00 p.m. on 8 July 2015 to
Spanishthis
withholding
select
option.tax does not apply to this option if the rights are sold by non-residents in Spain. For
more information in relation to taxation of this option please see page 8 of this information booklet.
Example – Option 2
You must complete, sign and return your scrip dividend mandate form to the address shown on the
3by
I hold
500 on
shares.
form
5:00pm
9 January 2017 or apply online at www.shareview.co.uk/clients/iberdrolascrip by
no later than 5:00pm on 9 January 2017 to select this option.
3 I receive 500 rights
Example – Option 2
3 These rights are sold on the Spanish Stock Exchanges at a price which will depend on the
market price on the Spanish Stock Exchanges (for illustrative purposes only, we assume that
√ I hold 500 shares.
such price is €0.113). No Spanish withholding tax is deducted.
√ I receive 500 rights.
I still hold 500 shares and I receive the Sterling equivalent of €56.500 (500 rights x
€0.113) in cash less brokerage fees of 0.3% (€0.169) = €56.331.
√ These rights are sold on the Spanish Stock Exchanges at a price which will depend on the market price on
the Spanish Stock Exchanges (for illustrative purposes only, we assume that such price is €0.137). No Spanish
withholding tax is deducted if the rights are sold by non-residents in Spain.
I still hold 500 shares and I receive the Sterling equivalent of €68.500 (500 rights x €0.137) in cash
less brokerage fees of 0.3% (€0.2055) = €68.295.
3
Iberdrola 12pp May 2015_Iberdrola 12pp 04/06/2015 06:37 Page 5
Option 3 - Hold the rights and receive shares
Option 3 - Hold the rights and receive shares
If you choose this option, your nominee will continue to hold your rights (along with those of
the
other
participants
chosen
this option)
throughout
the trading
period
(except
If you
choose
this option,who
your have
nominee
will continue
to hold
your rights (along
with those
of the
other for
those
rightswho
which
a fractional
entitlement).
participants
haverepresent
chosen this
option) throughout
the trading period (except for those rights which
represent a fractional entitlement).
At the end of the trading period your rights will automatically convert into a number of new
shares
that
calculated
as follows:
At the end
of is
the
trading period
your rights will automatically convert into a number of new shares that is
calculated as follows:
Number of rights / Conversion Ratio
The Conversion Ratio will be calculated
to the number
Numberby
ofreference
rights / Conversion
Ratio of shares of Iberdrola in issue
on 1 July 2015 divided by the maximum potential number of shares to be issued pursuant to the
scheme.
The Conversion Ratio will be calculated by reference to the number of shares of Iberdrola in issue on 3
January 2017 divided by the maximum potential number of shares to be issued pursuant to the scheme.
If you hold a number of rights that would result in an entitlement to a fraction of a share, the
rights
representing
fractional
entitlement
will be aggregated
with
fractions
of other
If
you hold
a number ofthat
rights
that would
result in an entitlement
to a fraction
of athe
share,
the rights
shareholders
and
sold
on
the
Spanish
Stock
Exchanges.
Any
cash
amounts
in
respect
of
fractions
representing that fractional entitlement will be aggregated with the fractions of other shareholders and sold
will
beSpanish
paid toStock
you Exchanges.
less brokerage
feesamounts
in Sterling
by cheque
or inwill
accordance
withless
your
usual
on the
Any cash
in respect
of fractions
be paid to you
brokerage
instructions
apply
the payment
ofyour
yourusual
dividends.
fees in Sterlingwhich
by cheque
orto
in accordance
with
instructions which apply to the payment of your
dividends.
Subject to necessary approvals, new shares are expected to be added to your holding by 29 July
2015.
Spanish withholding tax does not apply to this option. For more information in relation to
Subject to necessary approvals, new shares are expected to be added to your holding by 1 February 2017.
taxation
please seetax
page
8 not
of this
information
booklet.
Spanish withholding
does
apply
to this option
for non-residents in Spain. For more information in
relation
to taxation
of thissign
option
please
see page
this information
booklet. form to the address
You must
complete,
and
return
your8 of
scrip
dividend mandate
shown on the form by 5.00 p.m. on 8 July 2015 or apply online at
www.shareview.co.uk/clients/Iberdrolascrip by no later than 5.00 p.m. on 8 July 2015 to
You must complete, sign and return your scrip dividend mandate form to the address shown on the
select
this option.
form by 5:00pm on 9 January 2017 or apply online at www.shareview.co.uk/clients/iberdrolascrip by
no later than
5:00pm3on 9 January 2017 to select this option.
Example
– Option
3 I hold
500 shares.
Example
– Option
3
3 I receive 500 rights.
√ I hold 500 shares.
3 The Conversion Ratio for the purposes of this example only is 52.
√ I receive 500 rights.
3 The number of new shares I will receive is 9 (being 500 / 52 rounded down to the nearest
whole
number).
√ The
Conversion
Ratio for the purposes of this example only is 44.
3 I receive 9 new Iberdrola shares which accounts for 468 of my rights (being 9 multiplied by
the Conversion Ratio). My remaining 32 rights are sold on the Spanish Stock Exchanges for
€0.113* each.
√ The number of new shares I will receive is 11 (being 500 / 44 rounded down to the nearest whole number).
√ I receive 11 new Iberdrola shares which accounts for 484 of my rights (being 11 multiplied by the
Conversion
Ratio).
Myshares
remaining
16 Irights
are sold
the Spanish
Stock Exchanges
for(32
€0.137*
each.
I now hold
509
and
receive
the on
Sterling
equivalent
of €3.616
rights
x €0.113)
in cash less brokerage fees of 0.3% (€0.011) = €3.605
I now hold 511 shares and I receive the Sterling equivalent of €2.192 (16 rights x €0.137) in cash
*less
Thisbrokerage
price is for illustrative
purposes
only. = €2.185
fees of 0.3%
(€0.0066)
* This price is for illustrative purposes only.
4
Iberdrola 12pp May 2015_Iberdrola 12pp 04/06/2015 06:37 Page 6
Timetable for July 2015 scrip dividend scheme
Timetable for January 2017 scrip dividend scheme
1 July
Conversion Ratio and Purchase Price announced.
3 January 2017
2 July (11:59 p.m.
Madrid time)
3 July
4 January 2017
Conversion Ratio and Purchase Price announced.
Record date for rights; rights are issued.
Last trading date.
Commencement of trading period for rights.
8 July 5 January 2017
Latest
date to make or revoke your choice of option (5:00 p.m.).
Ex-date.
14 July
Date up to which Iberdrola shall arrange for the purchase of rights
trading
period
for rights.
fromCommencement
shareholders toofbe
sold off
market
for cash.
17 July
5 January 2017
6 January 2017
17 July
On market sales completed.
Record date for rights.
End of trading period.
9 January 2017
By 22 July
16 January 2017
Latest date to make or revoke your choice of option (5:00pm).
Cash received by the UK corporate sponsored nominees for
those rights sold both off and on market.
Date up to which Iberdrola shall arrange for the purchase of
By 24 July
Newrights
shares
added
to existing
from
shareholders
toshareholdings.
be sold off market for cash.
19 January 2017
By 29 July
On market
sales
completed.
Despatch
of sale
advice
and cheque to shareholders for rights
sold on market.
19 January 2017
By 29 July
End
of trading
period.
BACS
payments
made
to shareholders for rights sold on and off
market.
By 23 January 2017
By 5 August
By 30 January 2017
By 5 August
By 30 January 2017
Cash received by the UK corporate sponsored nominees for
Despatch
of sale advice and cheque to shareholders for rights
those rights sold both off and on market.
sold off market.
Despatch of sale advice and cheque to shareholders for rights
Statements
despatched for those choosing to hold shares
sold on market.
including cheques in relation to fractional amounts.
BACS payments made to shareholders for rights sold on and
off market.
By 1 February 2017
New shares added to existing shareholdings.
By 6 February 2017
Despatch of sale advice and cheque to shareholders for rights
sold off market.
By 6 February 2017
Statements despatched for those choosing to hold shares
including cheques in relation to fractional amounts.
5
Iberdrola 12pp May 2015_Iberdrola 12pp 04/06/2015 06:37 Page 7
Questions and answers
Questions and answers
This section contains the answers to many of the questions that you may have. If once you’ve
readsection
through
thisthesection
have
any
further
please
the
FAQs
at
This
contains
answers you
to many
of the
questions
thatquestions,
you may have.
If oncesee
you’ve
read
through
www.iberdrola.com
or contact
the Shareholder
Helpline.
this
section you have any
further questions,
please see
the FAQs at www.iberdrola.com or contact the
Shareholder
1. What is aHelpline.
scrip dividend?
Through
1.
What isaascrip
scrip dividend
dividend?a shareholder is entitled to receive new shares free of charge issued by
a company instead of a fixed cash amount. It is a Spanish process requirement that rights be
issued
offered
shareholders
option
choose
to receive
new
shares
Throughbefore
a scripshares.
dividendIberdrola
a shareholder
is entitled
to receivethe
new
sharesto
free
of charge
issued by
a company
or
a cash
onamount.
ten previous
occasions.
instead
of amount
a fixed cash
It is a Spanish
process requirement that rights be issued before shares.
Iberdrola offered shareholders the option to choose to receive new shares or a cash amount on ten previous
2.
I just want to continue to receive a fixed amount of cash – what do I do?
occasions.
The default option, option 1, is a fixed amount of cash so you don’t need to do anything (unless
2. I just
want
to continue
to receive
amount
of dividend).
cash – whatYour
do Irights
do? will then be purchased
you
have
chosen
a different
optionainfixed
the latest
scrip
by Iberdrola and you will receive your cash payment as before.
The default option, option 1, is a fixed amount of cash so you don’t need to do anything (unless you have
3. How do I change my choice?
chosen a different option in the latest scrip dividend). Your rights will then be purchased by Iberdrola and
you
your
cash
payment
as before. a new scrip dividend mandate form or revoking your
Youwill
canreceive
change
your
choice
by completing
existing choice online at www.shareview.co.uk/clients/Iberdrolascrip or by calling the
3.
How do I change
myto
choice?
Shareholder
Helpline
request that a new scrip dividend mandate form be sent to you. Any new
choice that you make must reach your nominee no later than 5.00 p.m. on 8 July 2015 or in
You can change
your
choice bydates
completing
a newdividend
scrip dividend
mandate form or revoking your existing
accordance
with
published
for future
payments.
choice online at www.shareview.co.uk/clients/iberdrolascrip or by calling the Shareholder Helpline to
4.
Howthat
willathe
andform
Purchase
Price
request
newConversion
scrip dividendRatio
mandate
be sent to
you.be
Anycalculated?
new choice that you make must reach
yourConversion
nominee no later
p.m. on 9 January
2017 or to
in accordance
published
dates for future
The
Ratiothan
will5.00
be calculated
by reference
the numberwith
of shares
of Iberdrola
in issue
dividend
on
1 Julypayments.
2015 divided by the maximum potential number of shares to be issued pursuant to the
scheme.
4. How will the Conversion Ratio and Purchase Price be calculated?
For further details on the calculation of the Conversion Ratio and the Purchase Price, please refer
to the
report submitted
the Board
Directors
of number
the Company
onof17Iberdrola
February
2015on
in 3respect
The
Conversion
Ratio will beby
calculated
by of
reference
to the
of shares
in issue
January
of
item
6 onby
the
Agenda
forpotential
the General
Shareholders’
Iberdrola
held
on 27 March 2015
2017
divided
the
maximum
number
of shares to Meeting
be issuedof
pursuant
to the
scheme.
available at www.iberdrola.com.
For further details on the calculation of the Conversion Ratio and the Purchase Price, please refer to the report
5. Can I change my mind once Iberdrola publishes the Conversion Ratio and Purchase Price?
submitted by the Board of Directors of the Company on 23 February 2016 in respect of item 6 on the Agenda for
Yes,General
you can
change your
mindofby
completing
dividend
form or revoking
the
Shareholders’
Meeting
Iberdrola
held ona8new
April scrip
2016 available
at mandate
www.iberdrola.com.
your existing choice online at www.shareview.co.uk/clients/Iberdrolascrip or by calling the
Shareholder
Helpline
to once
request
that a publishes
new form the
be sent
to you. Ratio
Any new
you
make must
5.
Can I change
my mind
Iberdrola
Conversion
and choice
Purchase
Price?
reach your nominee by no later than 5.00 p.m. on 8 July 2015 or in accordance with published
dates
for
future
dividends.
Yes, you
can
change
your mind by completing a new scrip dividend mandate form or revoking your existing
choice online at www.shareview.co.uk/clients/iberdrolascrip or by calling the Shareholder Helpline to
request that a new form be sent to you. Any new choice you make must reach your nominee by no later than
5.00 p.m. on 9 January 2017 or in accordance with published dates for future dividends
Yes.
6. Do my new shares have the same rights as my existing shares?
7.
Are
any circumstances
in which
I won’tshares?
be issued shares under the scrip
6. Do
mythere
new shares
have the same rights
as my existing
dividend scheme?
Yes. (i) if you don’t return a valid form or apply online and choose to receive shares you will receive
Yes,
cash; (ii) if you return a scrip dividend mandate form choosing that your rights are sold either on
7. Are there any circumstances in which I won’t be issued shares under the scrip dividend scheme?
the
Spanish Stock Exchanges or off market by Iberdrola you will also receive cash; or (iii) if you
have
receive
new
share
you
will receive
cash.
Yes, (i)insufficient
if you do notrights
return to
a valid
formaor
do not
apply
online
and choose
to receive shares you will receive
cash; (ii) if you return a scrip dividend mandate form choosing that your rights are sold either on the Spanish
Stock Exchanges or off market by Iberdrola you will also receive cash; or (iii) if you have insufficient rights to
receive a new share you will receive cash.
6
Iberdrola 12pp May 2015_Iberdrola 12pp 04/06/2015 06:37 Page 8
8. What are the benefits of the scheme?
8. What are the benefits of the scheme?
The scheme offers flexibility and enables you to choose what to receive depending upon your
personal
circumstances.
The scheme
offers flexibility and enables you to choose what to receive depending upon your
personalfor
circumstances.
A benefit
those who receive shares or sell their rights on the Spanish Stock Exchanges will be
that they will not be subject to the general 20% Spanish withholding tax which currently applies
benefit
for thoseShareholders
shareholders who
are
nottoresident
Spainby
and
who opt
forrights
receiving
shares
or
toAcash
dividends.
who
opt
receiveincash
selling
their
back
to Iberdrola
selling
rights on the
Spanish Stock
Exchanges
will be that they
will
incurtheir
a deduction
to account
for Spanish
withholding
tax. will not be subject to the general
19% Spanish withholding tax which currently applies to cash dividends.
9. Shareholders
I want to receive
cash.
Is it
better
for their
me rights
to sell
ontomarket
toincur
sellaoff
market
who opt to
receive
cash
by selling
back
Iberdrolaor
will
deduction
to to
Iberdrola?
account for Spanish withholding tax (currently, at 19% rate, although a refund may apply in specific
circumstances).
This
is a decision you need to make for yourself. If you have any doubts as to what to do please
seek independent financial advice from your stockbroker, bank manager, accountant or other
Please consider the further Spanish tax implications of these three options in page 8 of this
appropriately
authorised financial adviser.
information booklet.
However, as a general matter:
9. I want to receive cash. Is it better for me to sell on market or to sell off market to Iberdrola?
If you sell off market to Iberdrola, you will receive a fixed price (the Purchase Price per right).
This
price will be subject to the same Spanish withholding tax that applies to cash dividends. You
This is a decision you need to make for yourself. If you have any doubts as to what to do please
will
receive
the same amount which you would have received from a dividend paid in cash as
seek independent financial advice from your stockbroker, bank manager, accountant or other
normal.
appropriately authorised financial adviser.
If you sell on market, there will be no Spanish withholding tax, but the price depends on the
However,
as afor
general
matter:
market
price
the rights
on the Spanish Stock Exchanges and is not guaranteed by Iberdrola.
Brokerage fees will be deducted from the gross sale proceeds. In this case, you may receive a
If you sell
offor
market
Iberdrola,
will amount
receive a you
fixedwould
price (the
Purchase
per right).
greater,
lesser
equal to
cash
amountyou
to the
receive
if youPrice
decide
to sellThis
directly
will be subject to the same Spanish withholding tax that applies to cash dividends. You will
toprice
Iberdrola.
receive the same amount which you would have received from a dividend paid in cash as normal.
10. Can I participate even if I am resident outside the UK?
If you
on market,
there will
be no
Spanish withholding
forshares
non-residents
Spain,
but
You
maysell
treat
this booklet
as an
invitation
to receive tax
new
if suchinan
invitation
could
the price
on you
the market
for the rights
on theyou
Spanish
Stock
Exchanges
and is notwith any
lawfully
bedepends
made to
in theprice
jurisdiction
in which
reside
without
compliance
guaranteed tax
by Iberdrola.
fees will be deducted
saledo
proceeds.
In and
this case,
registration,
or other Brokerage
legal requirements.
If it couldfrom
not,the
yougross
should
nothing
continue
may receive
a greater,
lesser
or equal cash
amount
thedefault
amountoption
you would
receive
toyou
receive
cash (less
Spanish
withholding
tax)
undertothe
(option
1). if you decide
to sell directly to Iberdrola.
11. Will I receive shares for every dividend if I choose to receive shares under the Iberdrola
scrip
dividend
scheme?
10. Can
I participate
even if I am resident outside the UK?
No. If you choose to receive shares under the Iberdrola scrip dividend scheme, you will only
You may treat this booklet as an invitation to receive new shares if such an invitation could lawfully be
receive
shares whenever a scrip dividend scheme is put in place by Iberdrola.
made to you in the jurisdiction in which you reside without compliance with any registration, tax or
12.other
Willlegal
Iberdrola
offer aIf scrip
dividend
alternative
in the
requirements.
it could
not, you should
do nothing
andfuture?
continue to receive cash (less the
relevant Spanish withholding tax) under the default option (option 1).
The scrip dividend program approved by the General Shareholders’ Meeting of Iberdrola on 27
March 2015 will also be implemented by means of a second share capital increase, expected to
11. Will I receive shares for every dividend if I choose to receive shares under the Iberdrola
be executed in January 2016
scrip dividend scheme?
Iberdrola will indicate when announcing future dividends whether the scrip dividend alternative
No.
you choose to receive shares under the Iberdrola scrip dividend scheme, you will only receive
will
beIf offered.
shares whenever a scrip dividend scheme is put in place by Iberdrola.
13. How do I make my choice online?
12. Will
Iberdrola
offer
a scrip
dividend
alternative
in theabout
future?
If you
wish
to choose
any
option,
or change
your mind
your choice at any point up to 8
July 2015, or in accordance with published dates for future dividends, you can do so online at
Iberdrola will indicate when announcing future dividends
whether
the scrip
dividend alternative
willthat
www.shareview.co.uk/clients/Iberdrolascrip
and follow
the online
instructions.
Please note
be offered
only
the last choice received by your nominee will be honoured and that all previously submitted
choices received by your nominee will be ignored.
7
Iberdrola 12pp May 2015_Iberdrola 12pp 04/06/2015 06:37 Page 9
Taxation
13. How do I make my choice online?
The implementation of the scrip dividend scheme will not alter the UK tax treatment of future
cash
received
by holders
of Iberdrola
If youdividends
wish to choose
any option,
or change
your mindshares.
about your choice at any point up to 9
January 2017, or in accordance with published dates for future dividends, you can do so online at
This
section of the booklet summarises certain tax consequences of the scrip dividend scheme
www.shareview.co.uk/clients/iberdrolascrip and follow the online instructions. Please note that only
for
holders of Iberdrola shares. It is based on current law and on what is understood to be current
the last choice received by your nominee will be honoured and that all previously submitted choices
HM Revenue & Customs practice. It is not advice. It applies only to holders of Iberdrola shares
received by your nominee will be ignored.
who
are resident (and, in the case of individuals, ordinarily resident and domiciled) for tax
purposes in the UK, who hold their Iberdrola shares as an investment and not through a
Taxation establishment located in Spain, and who are the absolute beneficial owners of their
permanent
Iberdrola shares. Special rules may apply to certain classes of shareholder, including insurance
The implementation of the scrip dividend scheme will not alter the UK tax treatment of future cash
companies,
collective investment schemes, individuals who are resident but not domiciled in
dividends received by holders of Iberdrola shares.
the
UK, partnerships and shareholders who have acquired (or are deemed for tax purposes to
have acquired) their Iberdrola shares by reason of an office or employment.
This section of the booklet summarises certain UK and Spanish tax consequences of the scrip dividend
scheme for holders
of Iberdrola
It is based
on whator
is understood
be current
Shareholders
who
are in shares.
any doubt
as on
to current
their law
tax and
position
who are to
resident
or
HM Revenuein,
& Customs
practice.
It isin,
not
advice. It applies
onlythan
to holders
of Iberdrola
shares who
are own
domiciled
or subject
to tax
a jurisdiction
other
the UK
should consult
their
resident
(and, inadvisers
the case ofimmediately.
individuals, ordinarily
residentthat
and your
domiciled)
for taxdepends
purposes on
in the
UK, who
professional
Remember
position
your
own
hold
their Iberdrola
shares as anand
investment
not through
a permanent
located in Spain,
particular
circumstances
may beand
subject
to change
in the establishment
future.
and who are the absolute beneficial owners of their Iberdrola shares. Special rules may apply to certain
Option 1 – sell off market to Iberdrola and receive cash
classes of shareholder, including insurance companies, collective investment schemes, individuals who are
resident
not domiciled
in the
UK,scrip
partnerships
and
shareholders
who haveinacquired
(or are
deemed
for
Spanishbut
company
law treats
this
dividend
scheme
as an increase
Iberdrola’s
share
capital,
tax
purposes
acquired)
their
shares
reasonofofthe
an office
or employment.
rather
than to
as have
a dividend
paid
byIberdrola
Iberdrola.
As abyresult
Spanish
company law treatment,
the cash payment you receive should generally be treated for UK tax purposes as a capital
Shareholders
who are
in any
doubt asincome.
to their tax
are resident
or domiciled
or
distribution rather
than
as dividend
Theposition
amountor
ofwho
the capital
distribution
will bein,equal
subject
to tax
in, acash
jurisdiction
other
theand
UK should
consult Spanish
their own
professional
to the sum
of the
payment
youthan
receive
the applicable
withholding
taxadvisers
deducted
immediately.
Remember that your position depends on your own particular circumstances and may
from the payment.
be subject to change in the future.
The capital distribution may give rise to a liability to UK capital gains tax or (for companies)
corporation tax: whether you are liable to tax will depend on your particular circumstances
(including
what
paidtofor
your Iberdrola
shares),
Option
1 – sell
offyou
market
Iberdrola
and receive
cashand on whether any exemptions or reliefs
are available. For example, individuals are entitled to an annual exempt amount of up to
(currently)
£11,100
chargeable
gains
in any
tax year
before
becoming
liableshare
to pay
capital
gains
Spanish
company
lawoftreats
this scrip
dividend
scheme
as an
increase
in Iberdrola’s
capital,
rather
tax
than as a dividend paid by Iberdrola. As a result of the Spanish company law treatment, the cash payment
you
receive
should your
generally
be treated
for and
UK tax
as a capital distribution
as dividend
If
you
purchased
Iberdrola
shares
thepurposes
capital distribution
is “small” rather
for UKthan
tax purposes,
income.
The amount
of the capital
distribution
equal to the sum
theallowable
cash payment
receive
and
the
capital
distribution
will not
give risewill
to be
a chargeable
gainofor
loss,you
but
will be
the applicable
Spanish
withholding
deducted
fromshares.
the payment.
deducted
from
the base
cost oftax
your
Iberdrola
HM Revenue & Customs treats a capital
distribution as “small” if it amounts to £3,000 or less, or if it represents five per cent or less of the
The capital
distribution
give rise
to a liability
UK capital
gainsdistribution
tax or (for companies)
corporation tax:
market
value
of your may
Iberdrola
shares
at the to
time
the capital
was made.
whether you are liable to tax will depend on your particular circumstances (including what you paid for
Spanish
withholding
taxonwill
be deducted
from the
cash are
payment
atFor
theexample,
corresponding
your Iberdrola
shares), and
whether
any exemptions
or reliefs
available.
individualsrate
are
(currently,
20%).
If you
are liable
to of
pay
capital gains
tax or
tax in
onany
thetax
cash
receipt,
entitled to an
annual
exempt
amount
upUK
to (currently)
£11,100
of corporation
chargeable gains
year
before
you should
generally
be able
credit a proportion of the Spanish withholding tax (fifteen
becoming
liable
to pay capital
gainstotax.
nineteenths) against your UK tax liability. However, the credit cannot reduce your UK tax liability
onyou
thepurchased
paymentyour
below
zero. shares
Depending
oncapital
your distribution
circumstances,
youfor
may
to claim
a full
If
Iberdrola
and the
is “small”
UK be
tax able
purposes,
the capital
or partial refund
therise
Spanish
withholding
tax
from the
Spanish
authorities,
under
distribution
will notof
give
to a chargeable
gain or
allowable
loss,
but will tax
be deducted
fromeither
the base
cost
theyour
new
UK Spain
double
tax treaty
(whichtreats
entered
intodistribution
force on 12
or under
the
of
Iberdrola
shares.
HM Revenue
& Customs
a capital
as June
“small”2014)
if it amounts
to £3,000
Spanish
Resident five
Income
Taxor
Law.
further
details
asyour
to this
refund,
youatshould
consult
or
less, orNon
if it represents
per cent
lessFor
of the
market
value of
Iberdrola
shares
the time
the
your tax
advisors.was made.
capital
distribution
Spanish withholding tax will be deducted from the cash payment at the corresponding rate (generally 19%).
If you are liable to pay UK capital gains tax or corporation tax on the cash receipt, you should generally be
able to credit a proportion of the Spanish withholding tax (fifteen nineteenths) against your UK tax liability.
8
Iberdrola 12pp May 2015_Iberdrola 12pp 04/06/2015 06:37 Page 10
Option 2 – sell the rights on market and receive cash
However, the credit cannot reduce your UK tax liability on the payment below zero. Depending on your
The
cash payment
youbereceive
should
beortreated
for UKoftax
as a capital
circumstances,
you may
able to claim
a full
partial refund
thepurposes
Spanish withholding
taxdistribution
from the
rather
than
as
dividend
income.
The
amount
of
the
capital
distribution
will
be
equal
to the cash
Spanish tax authorities, either under the UK Spain double tax treaty or under the Spanish Non Resident
payment
Fordetails
moreas
information
onyou
capital
distributions,
refer to paragraphs
Income
Taxyou
Law.receive.
For further
to this refund,
should
consult your please
tax advisors.
2 and 3 of the tax summary for option 1 above.
Option
– selllaw
thetreats
rightsoption
on market
receive by
cash
Spanish2 tax
2 asand
a disposal
you of rights to subscribe for Iberdrola shares
and therefore Spanish withholding tax will not be deducted from your cash payment; the amount
The
cash payment
you receive
should be
treated
UKof
tax
purposes
as a capital
rather
as
obtained
in the market
will reduce
the
base for
cost
your
Iberdrola
sharesdistribution
from which
the than
rights
dividend
income.
amount
of the
capital obtained
distribution
will be equal
to thecost
cashof
payment
you receive.
For
to subscribe
soldThe
derive;
if the
amount
exceeds
the base
your Iberdrola
shares
more
information
on capital distributions,
pleasewill
refer
paragraphs
2 and 3 oftax
thepurposes
tax summary
option
for Spanish
tax purposes,
then the excess
betotreated
for Spanish
as aforcapital
1
above.
gain
derived from a disposal of your Iberdrola shares. In the last scenario, you are required to file
a tax return with the Spanish tax authorities in order to claim, if applicable, an exemption under
Spanish
treats
optiontax
2 astreaty,
a disposal
by you the
of rights
to subscribe
for Iberdrola
shares
therefore
the newtax
UKlaw
Spain
double
or under
Spanish
Non Resident
Income
Taxand
Law,
as the
Spanish
withholding
will not
beon
deducted
from your cash payment; however, the amount obtained
case may
be, from tax
Spanish
tax
the disposal.
in the market will be treated for Spanish tax purposes as a capital gain derived from a disposal of your
Option 3shares.
– holdAsthe
rights
and
shares
Iberdrola
a result,
you
are receive
required to
file a tax return with the Spanish tax authorities in order
to either (a) claim, if applicable, an exemption from Spanish tax on the disposal (either under the UK Spain
For UK tax purposes, your receipt of additional Iberdrola shares should not give rise to taxable
double tax treaty or under the Spanish Non Resident Income Tax Law, as the case may be, and in all cases
income or to a disposal for the purposes of taxation of chargeable gains. Spanish withholding tax
subject to the satisfaction of the conditions specified thereunder, as the case may be, including providing
will also not be deducted if you choose option 3. Your new shares should be treated as part of the
evidence of your tax residence in the UK by means of a certificate of tax residence duly issued by the UK
same
asset as your existing holding of Iberdrola shares for the purposes of taxation of chargeable
tax authorities within the meaning of the UK Spain double tax treaty, if applicable) or (b) pay the relevant
gains,
with any base cost in your corresponding existing Iberdrola shares being apportioned
Spanish Non Resident Income Tax (typically, at a 19% rate). For further details as to the tax implications of
between
your existing shares (from which they derive from) and your new Iberdrola shares for
this option, you should consult your tax advisors.
Spanish tax purposes.
Option
3 – holdany
thecash
rights
receive
shares
If you receive
inand
respect
of the
sale of an entitlement to a fraction of a share, this will be
treated as a disposal by you of rights to subscribe for Iberdrola shares for Spanish tax purposes,
For
taximplications
purposes, your
receipt ofinadditional
Iberdrola shares
should
not givewhich
rise tomay
taxable
withUKthe
described
the tax summary
for option
2 above,
giveincome
rise to the
or
to a disposal
for the purposes
of taxation
of chargeable
reporting
obligations
discussed
in that tax
summary gains. Spanish withholding tax will also not
be deducted if you choose option 3. Your new shares should be treated as part of the same asset as your
existing holding of Iberdrola shares for the purposes of taxation of chargeable gains, with any base cost in
your corresponding existing Iberdrola shares being apportioned between your existing shares (from which
they derive from) and your new Iberdrola shares for Spanish tax purposes.
If you receive any cash in respect of the sale of an entitlement to a fraction of a share, this will be treated as
a disposal by you of rights to subscribe for Iberdrola shares for Spanish tax purposes, with the implications
described in the tax summary for option 2 above, which may give rise to the tax obligations discussed in
that tax summary.
9
Iberdrola 12pp May 2015_Iberdrola 12pp 04/06/2015 06:37 Page 11
Glossary of terms used in this booklet
Glossary of terms used in this booklet
Conversion Ratio means the calculation used to establish the number of rights needed to
receive a new
Iberdrola
share
on conversion
of the the
rights
which
calculated
asreceive
described
Conversion
Ratio
means the
calculation
used to establish
number
of is
rights
needed to
a newon
page
6. The
Conversion
Ratio
be announced
to shareholders
on 1onJuly
2015
and
published
at
Iberdrola
share
on conversion
of will
the rights
which is calculated
as described
page
6. The
Conversion
Ratio
www.iberdrola.com.
will be announced to shareholders on 3 January 2017 and published at www.iberdrola.com.
Purchase Price means the fixed off market cash amount at which Iberdrola will repurchase each
Last
date means
the will
finalbe
date
upon whichto
theshareholders
shares of Iberdrola
traded
right to at
right.trading
The Purchase
Price
announced
on 1are
July
2015with
andthe
published
participate
in the scrip dividend
schemePrice
(being
January 2017
at at
11:59
p.m.
MadridPlease
time). note, whilst the
www.iberdrola.com.
The Purchase
is 4expected
to be
least
€0.113.
Conversion Ratio and the final Purchase Price will be announced, there will be no direct
Purchase Price means
fixed off market cash amount at which Iberdrola will repurchase each right. The
communication
with the
shareholders.
Purchase Price will be announced to shareholders on 3 January 2017 and published at www.iberdrola.com.
Record
datePrice
forisrights
means
final
datePlease
uponnote,
which
youthe
areConversion
eligible toRatio
receive
rights
The Purchase
expected
to be the
at least
€0.135.
whilst
and the
finalin
connection
with
scrip dividend
July 2015 (11:59
p.m.
Madrid time).
Purchase Price
will the
be announced,
therescheme,
will be nobeing
direct 2
communication
with
shareholders.
Rights means the rights issued to you in connection with the scrip dividend scheme which will
Record date for rights means the final date upon which you have to be a holder of Iberdrola shares in order
convert
automatically into new Iberdrola shares unless they are sold before the end of the trading
to be eligible to receive rights in connection with the scrip dividend scheme (being 6 July 2016 at 11:59 p.m.
period
on 17 July 2015. Rights, when used in this booklet, also include the rights issued to the
Madrid time provided that the Iberdrola shares have been acquired on or before the last trading date.
shares
underlying the CDIs which will convert automatically into new Iberdrola CDIs.
Rightsdividend
means thescheme
rights issued
to you
in connection
the scrip
dividend
schemeat
which
will convert
Scrip
means
Iberdrola’s
scripwith
dividend
scheme
approved
Iberdrola’s
Annual
automatically
into new
Iberdrola
unless
they are sold,
either
off market to Iberdrola or on market
General Meeting
on 27
March shares
2015 and
summarised
in this
document.
before the end of the trading period on 19 January 2017. Rights, when used in this booklet, also include the
Shares when used in this booklet means CREST Depository Interests ("CDIs") which represent an
rights issued to the shares underlying the CDIs which will convert automatically into new Iberdrola CDIs.
entitlement to Iberdrola shares held through a nominee service and corresponding references
to
“shareholders” means the holders of those CDIs through that service.
Scrip dividend scheme means Iberdrola’s scrip dividend scheme approved at Iberdrola’s Annual General
Meeting on 8 April 2016 and summarised in this document
Shares when used in this booklet means CREST Depository Interest (“CDIs”) which represent an entitlement
to Iberdrola shares held through a nominee service and corresponding references to “shareholders” means
the holders of those CDIs through that service.
10