2 0 2 1REPSOL Group

Main Alternative Performance Measures (APM)3rd Quarter 2021

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

ALTERNATIVEPERFORMANCEMEASURES

Repsol’s financial information contains indicators andmeasuresprepared inaccordancewithapplicable financial reportingstandardsandregulations,aswellasothermeasurespreparedinaccordancewiththeGroup’sReportingModel,definedasAlternative Performance Measures (APMs). APMs are measures that are “adjusted” compared to those presented inaccordance with IFRS-EU or with Supplementary Information on Oil and Gas Upstream Activities, and the reader shouldthereforeconsidertheminadditionto,butnotinsteadof,thelatter.

APMsareusefulforusersoffinancialinformationastheyarethemeasuresemployedbyRepsol’sManagementtoevaluateitsfinancialperformance,cashflowsorfinancialpositionwhenmakingoperationalorstrategicdecisionsfortheGroup.

FormorehistoricalquarterlyAPMinformation,seewww.repsol.com.

1.Financialperformancemeasures

Adjustednetincome

Adjustednetincome isthekeyfinancialperformancemeasurethatManagement(theExecutiveCommittee)consultswhenmakingdecisions.

RepsolpresentsitssegmentresultsincludingjointventuresorothercompanieswhicharejointlymanagedinaccordancewiththeGroup’s investment percentage, considering its operational and economic indicatorswithin the same perspective anddegreeofdetailasthoseforcompaniesconsolidatedunderthefullconsolidationmethod.Thus,theGroupconsidersthatthenatureofitsbusinessesandthewayinwhichresultsareanalyzedfordecision-makingpurposesisadequatelyreflected.

AdjustednetincomeiscalculatedasNetincomefromcontinuingoperationsatCurrentCostofSupply(orCCS)netoftaxesand non-controlling interests. It excludes certain income and expenses (Special items) and the Inventory effect. Financialincomeisallocatedtotheadjustednetincomeofthe“Corporateandothers”segment.

Adjusted net income is a useful APM for investors in evaluating the performance of operating segments while enablingincreased comparability with Oil & Gas sector companies that use different inventory measurement methods (see thefollowingsection).

Inventoryeffect

Forcurrentcostofsupply(CCS)earnings,thecostofvolumessoldiscalculatedonthebasisofprocurementandproductioncosts1 incurred during the period in question and not based on weighted average cost (WAC), which is the acceptedmethodology under European accounting law and regulations. The difference between CCS earnings andWAC earnings isincludedintheso-called InventoryEffect,whichalso includesotheradjustmentstothevaluationof inventories(write-offs,economichedges,etc.)andispresentednetoftaxesandminorityinterests.ThisInventoryEffectlargelyaffectstheIndustrialsegment.Repsolmanagementconsidersthatthismeasurementisusefulfor investors,consideringthesignificantvariationsarisinginthepricesofinventoriesbetweenperiods.

WACisagenerallyacceptedEuropeanaccountingmethodformeasuringinventories.Itfactorsinpurchasepricesandhistoricproductioncosts,valuinginventoryatthelowerbetweenthiscostanditsmarketvalue.

Specialitems

Significant items for which separate presentation is considered desirable to facilitate the task ofmonitoring the ordinarymanagementofbusinessoperations.Thisheadingincludescapitalgains/lossesarisingfromdivestment,restructuringcosts,impairments,provisionsforrisksandexpensesandothermajorincomeorexpenseitemsoutsidetheordinarymanagementofthebusinesses.Specialitemsarepresentednetoftaxesandminorityinterests.

TranslationofareportoriginallyissuedinSpanishIntheeventofadiscrepancy,theSpanishlanguageversionprevails

1CostofsuppliesiscalculatedonthebasisofinternationalquotedpricesinthereferencemarketsinwhichtheCompanyoperates.Therelevantaveragemonthlypriceisappliedtoeachqualityofdistilledcrude.QuotedpricesareobtainedfromdailycrudeoilpublicationsaccordingtoPlatts,whilefreightratesareestimatedbyWorldscale(whichpublishesglobalreferencepricesforfreightcostsfromoneporttoanother).Allotherproductioncosts(fixedandvariablecosts)arevaluedatthecostrecognizedintheaccounts.

EBITDA

EBITDA, or “EarningsBefore Interest, Taxes,Depreciation,andAmortization,” is a financial indicatorwhichdetermines theoperatingmarginofacompanypriortodeductinginterest,taxes,impairment,restructuringcosts,andamortization.Sinceitdoesnotincludefinancialandtaxindicatorsoraccountingexpensesnotinvolvingcashoutflow,itisusedbyManagementtoevaluatethecompany’sresultsovertime,foramorestraightforwardexerciseinmakingcomparisonswithpeerswithintheOil&Gassector.

EBITDA iscalculatedasOperatingIncome+Amortization+Impairmentaswellasother itemswhichdonotrepresentcashinflowsoroutflowsfromtransactions(restructuring,capitalgains/lossesfromdivestment,provisionsetc.).Operatingincomecorrespondstotheresult fromcontinuingoperationsatweightedaveragecost(WAC).WhereNet incomefromcontinuingoperationsatCurrentCostofSupply(CCS)isused,itisknownasCCSEBITDA.

ROACE

ThisAPM isusedbyRepsolManagement toevaluate thecapacityof itsoperatingassets togenerateprofit,and thereforemeasurestheefficiencyofcapitalemployed(equityanddebt).

ROACE ("Returnonaveragecapitalemployed") iscalculatedas:(AdjustedNetIncomebeforenon-controllingandexcludingFinanceIncome+InventoryEffect+SpecialItems)/(Averagecapitalemployedfortheperiodincontinuingoperations,whichmeasuresownandexternalcapitalemployedbythecompany,andcomprisesTotalEquity+Netdebt).Thisincludescapitalemployedinjointventuresorothercompaniesmanagedoperationallyasjointventures.IftheInventoryEffectisnotusedinthecalculationprocess,itisknownasCCSROACE.

2.Cashflowmeasures

Cashflowfromoperations

Cashflowfromoperationsmeasuresthegenerationofcashflowcorrespondingtooperationsandiscalculatedas:EBITDA+/-Changesinworkingcapital+Collectionofdividends+Collection/-paymentofincometax+Othercollections/-paymentsrelating to operating activities. Cash flow from operations may be presented excluding working capital (cash flow fromoperations excl.working capital) due to its usefulness and to help understanding how cash flowevolves betweenperiodsisolatingcurrentcapitalmovements.

Freecashflow

Freecashflowmeasurescashflowgenerationfromoperatingandinvestmentactivities,andisusefulforevaluatingthefundsavailableforpayingshareholderdividendsandservicingdebt.

Cashflowgenerated

Cashgeneratedisfreecashflowlessdividendpayments,paymentofremunerationforotherequityinstruments,netinterestpayments, andpayments for leasesand treasury shares. ThisAPMmeasures the fundsgeneratedby theCompanybeforefinancialtransactions(mainlydebtissuanceandrepayments).

Liquidity

TheGroupmeasures liquidityasthesumof“Cashandcashequivalents”on-demandcashdepositsatfinancial institutions,andshortandlong-termcreditfacilitiesthatremainundrawnattheendoftheperiod,i.e.,creditfacilitiesgrantedbyfinancialinstitutionsthatmaybedrawnonbytheCompanyontheterms,intheamountandsubjecttotheotherconditionsagreedinthecontract.

TranslationofareportoriginallyissuedinSpanishIntheeventofadiscrepancy,theSpanishlanguageversionprevails

Operatinginvestments

GroupManagementusesthisAPMtomeasureeachperiod’sinvestmenteffortandallocationbybusinesssegment,reflectingoperatinginvestmentsbythevariousGroupbusinessunits.Thefigureincludesjointventuresorothercompaniesmanagedoperationallyasjointventures.

Investmentsmay be presented as organic (acquisition of projects, assets or companies for the expansion of the Group’sactivities)orinorganic(fundsinvestedinthedevelopmentormaintenanceoftheGroup’sprojectsandassets).ThisdistinctionisusefulinunderstandinghowtheGroup’sManagementallocatesitsresourcesandallowsforamorereliablecomparisonofinvestmentbetweenperiods.

3.Financialpositionmeasures

Debtandfinancialpositionratios2

NetDebtisthemainAPMusedbyManagementtomeasuretheCompany’slevelofdebt.Thefigureismadeupoffinancialliabilities less financial assets, cash and cash equivalents, and the effect arising from the mark-to-market of financialderivatives (excluding interest rates). It also includes the net debt of joint ventures and other companies operationallymanagedassuch.

GrossDebtisthemeasureusedtoanalyzetheGroup’ssolvencyandincludesfinancialliabilitiesandthemark-to-marketvalueofexchangeratederivatives. Italso includesthenetdebtof jointventuresandothercompaniesoperationallymanagedassuch.

ThefollowingratiosareusedbyGroupManagementtoevaluateleverageratiosandGroupsolvency.

• The Leverage ratio isNetDebt divided byCapital employed at the end of the period. This ratio can be used toexamine financial structure and degree of indebtedness in relation to capital contributed by shareholders andfinancingentities.LeverageisthechiefmeasureusedtoevaluateandcomparetheCompany’sfinancialpositionwithrespecttoitspeersintheOil&Gasindustry.

• TheSolvencyratioiscalculatedasLiquidity(section2ofthisAppendix)dividedbyCurrentGrossdebtandisusedtodeterminethenumberoftimestheGroupmayserviceitscurrentdebtusingitsexistingliquidity.

TranslationofareportoriginallyissuedinSpanishIntheeventofadiscrepancy,theSpanishlanguageversionprevails

2InordertofacilitatethemonitoringofthepreviousStrategicPlan,until2020themeasuresfornetdebtandreturnonequitywerefurtherbrokendown,excludingtheeffectofleaseliabilities.