FINANCIAL INFORMATION 2004 - Amadeus · - Auditor’s Report and Consolidated Financial Statements...

FINANCIAL INFORMATION 2004

Enclosures:

- Auditor’s Report and Consolidated Financial Statements prepared in accordance with International Financial Reporting Standards (Balance Sheet, Statement of Income and Notes to the Financial Statements) for the years ended as of December 31, 2004 and 2003.

- Auditor’s Report, Consolidated Annual Accounts prepared in accordance with

Spanish Accounting Principles for the years ended as of December 31, 2004 and 2003, and Consolidated Director’s Report.

- Reconciliation of the consolidated shareholders’ equity and net income

prepared in accordance with International Financial Reporting Standards and those prepared in accordance with Spanish Accounting Principles for the year ended as of December 31, 2004.

- Auditor’s Report, Statutory Annual Accounts prepared in accordance with

Spanish Accounting Principles and Director’s Report for the year ended as of December 31, 2004.

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Amadeus Global Travel Distribution, S.A. Consolidated Financial Statements for the years ended December 31, 2004 and 2003 prepared in accordance with International Financial Reporting Standards

CERTIFICATION

MR. JACINTO ESCLAPÉS DÍAZ, Vice-Secretary of the Board of Directors of"AMADEUS, GLOBAL TRAVEL DISTRIBUTION, S.A.", with registered offices at Madrid,Salvador de Madariaga, 1, and CIF A-78876919.

C E R T I F I E S

That the consolidated balance sheet referred to AMADEUS GLOBAL TRAVELDISTRIBUTION, S.A. and its subsidiaries, the related consolidated statement of income, ofcash flows and of changes in shareholders' equity as of December 31, 2004, prepared inaccordance with International Financial Reporting Standards, attached to this certification, area true copy of the said documents, endorsed by the Board of Directors of AMADEUSGLOBAL TRAVEL DISTRIBUTION, S.A., in the meeting held in Madrid, on 29 March 2005.

IN WITNESS WHEREOF, the undersigned signs this Certification in Madrid, on thefirst day of April of two thousand and five.

THE VIJpE-SECRETARY

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31 (EXPRESSED IN THOUSANDS OF EUROS - KEURs)

See the accompanying notes to the consolidated financial statements

ASSETS 2004 2003 Current assets

Cash and cash equivalents (Note 21) 104,669 42,101 Accounts receivable, net (Note 4) 245,228 182,429 Accounts receivable – affiliates, net (Notes 4 and 14) 58,921 63,021 Loans receivable and advances – affiliates (Note 14) 1,190 88 Taxes receivable (Note 19) 41,611 42,023 Prepayments and other current assets (Note 5) 77,456 82,810

Total current assets 529,075 412,472 Tangible assets (Note 6)

Land and buildings 130,142 129,213 Data processing hardware and software 465,097 425,707 Other tangible assets 138,616 128,503

733,855 683,423 Less accumulated depreciation 446,321 410,944

Net tangible assets 287,534 272,479 Intangible assets (Note 7)

Patents, trademarks and licenses 79,903 88,673 Purchased technology 72,282 41,688 Software development projects 371,859 324,957 Purchased contracts 274,748 272,093 Goodwill 453,383 310,961 Other intangible assets 9,137 5,486

1,261,312 1,043,858 Less accumulated amortization 604,103 487,806

Net intangible assets 657,209 556,052 Deferred income taxes (Note 19) 108,779 126,115 Loans receivable – affiliates (Note 14) 1,015 1,725 Investments in associates (Note 8) 27,588 63,273 Other long-term investments, net (Note 8) 63,839 104,757

Total other non-current assets 201,221 295,870

Total non-current assets 1,145,964 1,124,401 Total assets 1,675,039 1,536,873



LIABILITIES AND SHAREHOLDERS’ EQUITY 2004 2003

Current liabilities

Accounts payable, net (Note 4) 316,768 247,400 Accounts payable – affiliates, net (Note 4 and 14) 27,032 24,731 Dividends payable 34 - Debt payable within one year (Note 10) 8,562 80,310 Current obligations under finance leases (Note 11) 9,996 9,643 Income taxes payable (Note 19) 32,651 35,181 Other current liabilities (Note 5) 127,863 100,739

Total current liabilities 522,906 498,004 Long-term liabilities

Long-term debt (Note 10) 2,538 701 Obligations under finance leases (Note 11) 96,003 104,420 Deferred income taxes payable (Note 19) 74,528 102,228 Other long-term liabilities (Note 12) 37,303 72,778

Total long-term liabilities 210,372 280,127 Minority interests 10,037 1,029 Shareholders’ equity (Note 13)

Share capital 23,044 27,898 Additional paid-in capital 360,341 379,358 Treasury shares and other similar equity instruments (109,499) (126,899) Retained earnings and other reserves 686,395 502,879 Cumulative translation adjustments (28,557) (25,523)

Total shareholders’ equity 931,724 757,713 Total liabilities and shareholders’ equity 1,675,039 1,536,873

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF EUROS - KEURs)


2004 2003

Revenue (Note 15) 2,056,680 1,929,009

Cost of sales 1,620,379 1,528,358

Gross profit 436,301 400,651 Selling, general and administrative expenses 92,887 80,021

Operating income 343,414 320,630 Other income (expense)

Interest expense, net (Note 17) (6,045) (15,713) Exchange gains (losses) (4,109) (1,931) Other income (expense), net 397 2,980

Income before income taxes 333,657 305,966 Income tax (Note 19) 129,018 122,182

Income after taxes 204,639 183,784 Equity in income (losses) from associates (8,279) (23,645) Minority interests 11,672 (25)

Net income 208,032 160,114 Basic earnings per class “A” share, in EURs (Note 20) 0.36 0.28

Basic earnings per class “B” share, in EURs (Note 20) - - Diluted earnings per class “A” share, in EURs (Note 20) 0.36 0.28 Diluted earnings per class “B” share, in EURs (Note 20) - -

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF EUROS - KEURs)


2004 2003

Cash flows from operating activities

Operating income 343,414 320,630 Adjustments for:

Depreciation and amortization 205,991 211,905 Operating income before changes in working capital net of amounts acquired 549,405 532,535

Accounts receivable 4,334 (4,067) Taxes receivable (5,810) 2,525 Other current assets 8,053 15,837 Accounts payable (24,855) (17,286) Other current liabilities (10,397) 1,815 Other long-term liabilities (5,127) 2,099

Cash provided from operating activities 515,603 533,458 Taxes paid (105,621) (61,825)

Net cash provided from operating activities 409,982 471,633 Cash flows from investing activities

Additions to tangible assets (77,011) (52,803) Additions to intangible assets (73,830) (89,033) Investment in subsidiaries and associates, net of cash acquired (55,884) (83,957) Interest received 4,631 1,813 Sundry investments and deposits (4,257) (8,529) Loans to third parties (4,367) (55,652) Loans to affiliates (585) (4,941) Cash proceeds collected/(paid) - derivative agreements 3,889 12,225 Disposals of sundry investments 3,663 2,689 Dividends received 7,828 9,076 Proceeds obtained from disposal of fixed assets 3,598 5,112

Net cash used in investing activities (192,325) (264,000) Cash flows from financing activities

Proceeds from borrowings 32,864 300,598 Repayments of borrowings (106,076) (427,819) Interest paid (12,533) (17,928) Redemption of Class “B” shares (485) - Acquisition of Treasury shares (63,086) (96) Disposals of Treasury shares 39,215 224 Dividends paid (35,000) (29,998) Payments of finance lease liabilities (10,419) (9,756)

Net cash used in financing activities (155,520) (184,775) Effect of exchange rate changes on cash and cash equivalents 431 941 Net increase / (decrease) in cash and cash equivalents 62,568 23,799 Cash and cash equivalents at beginning of period 42,101 18,302

Cash and cash equivalents at end of period (Note 21) 104,669 42,101

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (EXPRESSED IN THOUSANDS OF EUROS - KEURs)


Share capital

Additional paid-in capital

Treasury shares and

other similar equity

instruments

Retained earnings

and other reserves

Cumulative translation

adjustments Total

Balance as of December 31, 2002 27,898 373,195 (128,050) 367,026 (17,729) 622,340 Equity instruments - (3,543) - - - (3,543) Available for sale financial assets - - - 4,092 - 4,092

Tax impact - - - (1,441) - (1,441) Hedging instruments - - - 22,076 11,875 33,951

Tax impact - - - (7,735) (4,156) (11,891) Other gains (losses) - - - (10,104) (15,513) (25,617) Gains (losses) not recognized in the

statement of income - (3,543) - 6,888 (7,794) (4,449) (Acquisitions) / disposals of

Treasury shares, net - 9,706 1,151 (1,151) - 9,706 Dividends - - - (29,998) - (29,998) Net income for the period - - - 160,114 - 160,114 Balance as of December 31, 2003 27,898 379,358 (126,899) 502,879 (25,523) 757,713 Available for sale financial assets - - - (2,373) - (2,373)

Tax impact - - - 828 - 828 Hedging instruments - - - (4,131) 2,155 (1,976)

Tax impact - - - 1,444 (755) 689 Other gains (losses) - - - (632) (4,434) (5,066) Gains (losses) not recognized in the

statement of income - - - (4,864) (3,034) (7,898) (Acquisitions) / disposals of

Treasury shares, net - (19,017) 17,400 10,979 - 9,362 Dividends - - - (35,000) - (35,000) Redemption of Class “B” shares (4,854) - - 4,369 - (485) Net income for the period - - - 208,032 - 208,032 Balance as of December 31, 2004 23,044 360,341 (109,499) 686,395 (28,557) 931,724

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2004 AND 2003 (EXPRESSED IN THOUSANDS OF EUROS - KEURs)

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1. ACTIVITY The consolidated financial statements include Amadeus Global Travel Distribution, S.A., domiciled in Spain (“the Company”) and its consolidated subsidiaries (“the Group”). The Group is a leader in information technology, serving the marketing, sales and distribution needs of the global travel and tourism industry. Its worldwide data network and database of travel information are used by travel agencies and airline sales offices. Today, travel agencies and airline offices can make bookings with airlines, hotel chains, car rental companies, and groups of providers such as ferry, rail, cruise, insurance and tour operators. The Group provides the above-mentioned services through a computerised reservation system (“CRS”) and through its e-commerce channel of distribution. Additionally, the Group provides information technology (“IT”) services and solutions to the airline industry, which includes inventory management and passenger departure control. The Company’s share and ownership structure are described in Note 13.


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Below is a summary of the consolidated Group companies as of December 31, 2004 and 2003:

Percentage of participation as of December 31 (2) (9)

Company Country of

incorporation 2004 2003

Fully consolidated companies Airline Automation, Inc. (1) U.S.A. 100.0% 100.0% Amadeus América, S.A. Argentina 100.0% 100.0% Amadeus Americas, Inc. U.S.A. 100.0% 100.0% Amadeus Argentina, S.A. Argentina 80.0% 80.0% Amadeus Asia, Ltd. Thailand 100.0% 100.0% Amadeus Austria Marketing GmbH Austria 100.0% 100.0% Amadeus Benelux, N.V. Belgium 100.0% 100.0% Amadeus Bolivia SRL Bolivia 100.0% 100.0% Amadeus Brasil, Ltda. (9) Brazil 76.0% 34.0% Amadeus Bulgaria EOOD (9) Bulgaria 100.0% 49.0% Amadeus Central and West Africa, S.A. Ivory Coast 100.0% 100.0% Amadeus Data Processing GmbH Germany 100.0% 100.0% Amadeus Denmark A/S (5) Denmark 100.0% 100.0% Amadeus France, S.N.C. (9) France 100.0% 34.0% Amadeus France Services S.A. (9) (12) France 70.6% 19.5% Amadeus GDS LLP Kazakhstan 100.0% 100.0% Amadeus GDS (Malaysia) Sdn. Bhd. Malaysia 100.0% 100.0% Amadeus GDS Singapore Pte. Ltd. Singapore 100.0% 100.0% Amadeus Germany GmbH Germany 100.0% 100.0% AMADEUSGLOBAL Ecuador, S.A. Ecuador 100.0% 100.0% Amadeus Global Travel Distribution, (Malta) Limited Malta 100.0% - Amadeus Global Travel Distribution, S.A. Spain N/A N/A Amadeus Global Travel Israel Ltd. Israel 90.0% 90.0% Amadeus GTD Australia Pty. Ltd. Australia 100.0% 100.0% Amadeus GTD Inc. (1) U.S.A. 100.0% 100.0% Amadeus GTD Ltd. Kenya 100.0% 100.0% Amadeus GTD Southern Africa Pty. Ltd. South Africa 100.0% 100.0% Amadeus Hellas, S.A. Greece 100.0% 100.0% Amadeus Honduras, S.A.(1) Honduras 100.0% 100.0% Amadeus Hong Kong, Ltd. Hong Kong 100.0% 100.0% Amadeus Magyaroszag Kft (Ltd.) Hungary 100.0% 100.0% Amadeus Marketing (Ghana), Ltd. Ghana 100.0% 100.0% Amadeus Marketing Ireland, Ltd. Ireland 100.0% 100.0% Amadeus Marketing Italia, S.P.A. Italy 100.0% 100.0% Amadeus Marketing Nigeria, Ltd. Nigeria 100.0% 100.0% Amadeus Marketing Philippines, Inc. Philippines 100.0% 100.0% Amadeus Marketing Romania, S.R.L. Romania 100.0% 100.0% Amadeus Marketing Schweiz, A.G. Switzerland 100.0% 100.0% Amadeus Marketing (U.K.), Ltd. U.K. 100.0% 100.0% Amadeus México S.A. de C.V. (1) Mexico 100.0% 100.0% Amadeus North America LLC. (1) U.S.A. 100.0% 100.0% Amadeus Norway, AS (5) Norway 100.0% 100.0% Amadeus Paraguay, S.R.L. Paraguay 100.0% 100.0% Amadeus Perú, S.A. Peru 100.0% 100.0% Amadeus Polska, Sp.zo.o. Poland 100.0% 100.0% Amadeus Receptionsservice AB (5) (14) Sweden 100.0% 100.0% Amadeus Rezervasyon Dagitim Sistemleri, A.S. Turkey 100.0% 100.0% Amadeus sas France 100.0% 100.0% Amadeus Saudi Arabia Limited (13) Saudi Arabia 100.0% - Amadeus Scandinavia AB Sweden 100.0% 100.0% Amadeus Services, Ltd. U.K. 100.0% 100.0%


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Percentage of participation as of December 31 (2) (9)

Company Country of

incorporation 2004 2003 Amadeus Services Asia-Pacific, Pty. Ltd. Australia 100.0% 100.0% Amadeus Sweden AB (5) Sweden 78.3% 78.3% Amadeus Technology Center Nordic AB (15) Sweden 100.0% 100.0% Americs AB (5) Sweden 100.0% 100.0% CRS Amadeus América, S.A. Uruguay 100.0% 100.0% e-Travel, Inc. (8) U.S.A. - 100.0% Eviaggi.com, S.P.A. Italy 100.0% 100.0% HDS (9) (11) U.S.A. 96.1% 30.0% Hogatex Allemagne (9) (11) Germany 96.1% 30.0% Hogatex Austria (9) (11) Austria 96.1% 30.0% Hogatex Finland (9) (11) Finland 96.1% 30.0% ICSA-T Australia, Pty. Ltd. (4) (14) Australia 100.0% 100.0% ICSA-T France, S.A.R.L. (4) (14) France 100.0% 100.0% ICSA-T US LLC (1) (8) U.S.A. 100.0% 100.0% ICSA-T N.V. (14) Belgium 100.0% 100.0% ICSA-T Travel Software GmbH (4) (14) Switzerland 100.0% 100.0% ICSA-T UK, Ltd. (4) (14) U.K. 100.0% 100.0% Moneydirect Limited NZ (10) New Zealand 100.0% 100.0% Moneydirect Pty. Ltd. (10) Australia 100.0% 100.0% NMC Eastern European CRS, B.V. The Netherlands 100.0% 100.0% Opodo GmbH (3) Germany 55.4% - Opodo Limited U.K. 55.4% - Opodo S.A.R.L. (3) France 55.4% - Optims Asia (9) (11) Singapore 96.1% 30.0% Optims S.A. (9) France 96.1% 30.0% Optims Italia (9) (11) Italy 96.1% 30.0% Optims U.K. (9) (11) U.K. 96.1% 30.0% Otedis (9) (11) France 96.1% 30.0% Prologest (9) (11) Spain 96.1% 30.0% SIA Amadeus Latvija Latvia 100.0% 100.0% Sistemas de Reservaciones CRS de Venezuela, C.A. Venezuela 100.0% 100.0% Travellink AB (9) Sweden 85.1% 35.1% UAB Amadeus Lietuva Lithuania 100.0% 100.0% Vacation.com, Inc. (1) U.S.A. 100.0% 100.0% Vacation.com Canada, Inc. (1) Canada 100.0% 100.0% Vivacanc es S.A. France 67.5% 67.5%

Investments carried under the equity method

1Travel.com, Inc. (1) U.S.A 38.9% 38.9% AlphaNet BVBA (4) (14) Belgium 28.0% 28.0% Amadeus Algerie, S.A.R.L. Algeria 40.0% 40.0%

Amadeus Gulf LLC United Arabian Emirates 49.0% 49.0%

Amadeus Kuwait Company W.L.L. Kuwait 35.0% 35.0% Amadeus Marketing CSA, s.r.o. Czech Rep. 35.0% 35.0% Amadeus Maroc, S.A.S. Morocco 30.0% 30.0% Amadeus Qatar W.L.L. Qatar 40.0% 40.0% Amadeus Sudani, Co. Ltd. Sudan 40.0% 40.0% Amadeus Tunisie, S.A. Tunisia 30.0% 30.0% Atinera LLC (1) (7) (14) U.S.A. 50.0% 50.0% Comtec (Europe) Limited U.K. 20.0% - ITA (Internet Travel Agent) Inc. (1) U.S.A. 22.3% 22.3% Jordanian National Touristic Marketing Private Shareholding Company Jordan 50.0% - PT Amadeus Indonesia Indonesia 50.0% 50.0% Qivive GmbH (6) (14) Germany 33.3% 33.3% Red Universal de Marketing y Booking On Line, S.A. (“RUMBO”) Spain 50.0% 50.0%


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Sistemas Automatizados de Agencias de Viajes, S.A. (“SAVIA”) Spain 34.0% 34.0% Sociedad Anato-Avianca de Reservaciones de Servicios Turí sticos Savia Ltda. Colombia 50.0% 50.0% Stellar Access, Inc. (1) (7) (14) U.S.A. 20.0% 20.0% Topas Co. Ltd. South Korea 32.0% 32.0% Travel.com.au Ltd. Australia 14.9% 16.7% Traventec Limited (6) Ireland 45.0% 45.0%

(1) The participation in these Group companies is held through Amadeus Americas, Inc ., formerly known as Amadeus NMC Holding Inc. until

August 2, 2004. (2) In certain cases companies are considered to be wholly -owned subsidiaries, even though due to local statutory obligations they are required

to have more than one shareholder or a specific percentage of the capital stock owned by citizens and/or legal entities of the country concerned. These shareholders are not entitled to any economic rights.

(3) The participation in these companies is held through Opodo Limited. (4) The participation in these companies is held through ICSA-T N.V. Business activity performed by ICSA-T N.V. and its subsidiaries is carried

out by other Group Companies. No relevant impact has been recorded in 2004, related to the liquidation process of ICSA -T N.V. and its subsidiaries.

(5) The participation in these companies is held through Amadeus Scandinavia AB. (6) The participation in these companies is held through Amadeus Germany GmbH . (7) This company ceased operations in 2002. (8) This company has merged during 2004 with Amadeus Americas, Inc. (9) The percentage of participation as of December 31, 2003 has been presented for comparative purposes. The applicable accounting method

applies based on the voting rights in each period. (10) The participation in this company is held through Amadeus GTD Australia Pty. Ltd. (11) The partic ipation in these companies is held through Optims S.A. (12) The participation in this company is held through Amadeus France, S.N.C. (13) The indirect participation in this company is held through NMC Eastern European CRS, B.V. (14) These companies are under liquidation process. (15) Previously known as ICSA -T Scandinavia AB.


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2. BASIS OF PRESENTATION AND COMPARABILITY OF THE INFORMATION INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

a) Basis of presentation

i) General Information

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”). These financial statements have been authorized for issue by the Board of Directors of the Company on March 29, 2005.

ii) Consolidated annual accounts prepared under generally accepted accounting

principles in Spain (Spanish GAAP).

In compliance with legal regulatory requirements, the Company’s management also prepares consolidated annual accounts as of December 31, 2004 and 2003 under Spanish GAAP. As a consequence of the difference in accounting principles, the consolidated net equity reflected under Spanish GAAP exceeds the net equity reflected under IFRS by approximately EURs 132.2 million as of December 31, 2004 and the net income reflected under Spanish GAAP is higher than the net income under IFRS for the year ended December 31, 2004 by approximately EURs 8.3 million. As of and for the year ended December 31, 2003 net equity reflected under Spanish GAAP exceeded the net equity reflected under IFRS by approximately EURs 145.4 million and the net income reflected under Spanish GAAP was lower then the IFRS net income by approximately EURs 10.0 million. The main differences as of and for the years ended December 31, 2004 and 2003 are due to the difference in accounting methods used in the acquisition in 1997 of Amadeus Data Processing and Co. KG (“Amadeus Operations KG”), the accounting for Treasury shares and equity related instruments.

iii) Use of estimates

Use of estimates and assumptions, as determined by management, is required in the preparation of consolidated financial statements in conformity with IFRS. Actual results could differ from those estimates and assumptions.

b) Comparison of information

For comparative information purposes, the Group presents, together with the amounts included in the consolidated balance sheet, the consolidated statements of income, of cash flows and of changes in shareholders’ equity, and the explanatory notes as of and for the year ended December 31, 2004, those as of and for the year ended December 31, 2003. Certain amounts for the prior period have been reclassified to conform with 2004 presentation.

c) Changes in the consolidation scope


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Note 1 presents the main changes in the companies which were consolidated or carried under the equity method by the Group during 2004 and 2003, as well as the accounting method used in each case.

3. ACCOUNTING PRINCIPLES The main accounting principles used in the preparation of the consolidated financial statements are as follows: a) Principles of consolidation

The consolidated financial statements include all companies over which the Group has control. Control refers to the power to govern the financial and operating policies so as to obtain the benefits from its activities. Intercompany balances and transactions between Group companies have been eliminated. Associates (investees in which the Group has significant influence but does not exercise management control) and joint-ventures have been accounted for using the equity method. Subsidiaries are not consolidated when control is temporary, this is the case when a subsidiary is acquired with the intention of disposing of it in the following twelve months, instead they are accounted for as an available for sale financial asset.

b) Foreign currency transactions

Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transactions. Gains and losses resulting from the settlement of such transactions and from the translation at year-end of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of income.

c) Currency translation

The financial statements of the individual Group companies are denominated in each company’s local currency. For consolidation purposes, the assets and liabilities are translated into EURs at year-end rates; components of the statement of income are translated at average exchange rates for the year; and share capital, additional paid-in capital, and reserves are translated at historical rates. Any exchange differences arising as a result of this translation, for majority interests in subsidiaries and interests in associates, are shown together as a separate component of shareholders’ equity in the “Cumulative translation adjustments” caption. In the case of translation differences related to minority interests, these are included in the minority interests caption of the balance sheet.

d) Related parties

The Group considers its significant shareholders or affiliates, associates and members of the Board of Directors to be related parties.


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e) Cash equivalents

Cash equivalents generally consist of certificates of deposit, time deposits, commercial paper, short-term government obligations and other money market instruments with maturity of three months or less. Such investments are stated at cost, which approximates fair value.

f) Tangible assets

Tangible assets are recorded at the lower of cost or recoverable value and are depreciated applying the straight-line method over the estimated useful lives of the assets:

Years

Buildings 50 Data processing hardware and software 2 - 5 Other tangible assets 3 - 20

Repairs and renewals are charged to income when the expenditure is incurred.

Leased tangible assets where the Group assumes substantially all the risks and benefits of ownership, are capitalized and the present value of the related lease payments is recorded as a liability. Each lease payment is allocated between the liability and interest expense based on a constant rate of interest on the principal outstanding. The capitalized leased assets are depreciated applying the straight-line method over the above-mentioned useful lives.

Operating lease payments are charged to the statement of income as incurred over the term of the lease.

g) Intangible assets

Intangible assets are recorded at cost and reviewed periodically and adjusted for any diminution in value as noted in paragraph h). These assets include the following:

• Patents, trademarks and licenses - These include the cost of acquiring licences for

CRS and IT services software developed outside the Group as well as acquired trademarks. These assets are being amortized applying the straight-line method over 3 -10 years.

• Purchased technology - This represents the acquisition cost of capability obtained by

the practical application of knowledge, processes, methods, tools and systems to serve the market need more efficiently. These assets are being amortized applying the straight-line method over 3 – 15 years, based on the expected service life.

• Software development projects – These include software applications developed by

the Group which are capitalized once technical feasibility is established, it is reasonably anticipated that the costs will be recovered through future activities or


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benefit future periods and the cost of the assets can be measured reliably. These projects are being amortized applying the straight-line method over 3 - 10 years. Software maintenance costs are charged to expense as incurred.

• Purchased contracts - These represent the acquisition costs of contracts that give the

Group the right to bill for future services as well as capitalizable costs related to travel agency incentives. These costs are being amortized applying the straight-line method, based on the expected service life of the contract, over 3 -10 years.

• Goodwill and negative goodwill represent the excess or deficit when comparing the

purchase price with the fair value of the net assets acquired and are amortized applying the straight-line method over 4 -10 years, except as described below. Amortization is carried out over 10 years in the case of acquisitions with high strategic value and long-term impact on the Group’s business. The excess/default of purchase price corresponding to investments in associates is included in long-term investments and the corresponding amortization expenses are included in the “Equity in income (losses) from associates” caption of the statement of income. When settlement of purchase consideration is deferred, the cost of the acquisition includes the net present value of this deferred consideration. In cases where the exact amount of deferred consideration is contingent on future events, the amount of the deferred consideration is estimated at the acquisition date and recorded as liability. Any subsequent adjustment to the estimated amount of deferred consideration is applied as a cumulative adjustment to goodwill in the period of the change in estimate and recorded as liability.

• Other intangible assets are amortized on a straight-line basis over 3 - 5 years.

Amortization expenses related to intangible assets are included in the cost of sales and selling, general and administrative expense captions of the statement of income.

Goodwill and intangibles assets with indefinite useful lives that result from business combinations for which the agreement date is on or after March 31, 2004 are not amortized and are tested annually for impairment. Negative goodwill on these business combinations is not recognised but charged to the statement of income once the fair value of net assets acquired is reassessed.

h) Impairment of non-current assets

The Group periodically evaluates the carrying value of non-current assets for potential impairment. As a result of this evaluation, an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount by reducing the carrying amount of the asset to its recoverable amount with the corresponding charge to the statement of income in the “Cost of sales” caption. The recoverable amount is the greater of the net selling price and the value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using an appropriate risk adjusted discount rate. Additionally to the impairment analysis required by IFRS, the Group performs periodical impairment tests over the majority of its intangible assets.


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i) Pension and other post-retirement obligations

The Group operates a number of defined benefit and defined contribution pension plans. Liabilities of the Group arising from defined benefit obligations are determined using the projected unit credit method. Independent actuarial valuations are carried out annually for the largest plans and on a regular basis for other plans. The actuarial assumptions used to calculate the benefit obligations vary according to the economic conditions of the country in which the plan is located. Such plans are either externally funded, with the assets of the schemes held separately from those of the Group, or unfunded with the related liabilities carried in the balance sheet. For the funded defined benefit plans, the deficit or excess of the fair value of plan assets over the present value of the defined benefit obligation is recognised as a liability or an asset in the balance sheet, taking into account any unrecognised actuarial gains or losses and past service cost. However, an excess of assets is recognised only to the extent that it represents a future economic benefit which is available to the Group, for example in the form of refunds from the plan or reductions in future contributions. Actuarial gains and losses arise mainly from changes in actuarial assumptions and differences between actuarial assumptions and what has actually occurred. They are recognised in the income statement, over the remaining working lives of employees, only to the extent that their net cumulative amount exceeds 10% of the greater of present value of the obligation or of the fair value of plan assets. For defined benefit plans the actuarial cost charged to the statement of income consists of current service cost, interest cost, expected return on plan assets and past service cost as well as actuarial gains or losses to the extent that they are recognised. Contributions made to defined contribution plans are charged to the statement of income as incurred.

j) Capital issuance costs

Expenses incurred in connection with the increases in capital are applied as a reduction to the proceeds received in the additional paid-in capital caption of the balance sheet, net of any related income tax benefit.

k) Treasury shares

Treasury shares held by the Group are reported as a reduction in shareholders’ equity. The gain or loss on disposal of these shares is recorded in the “Additional paid-in capital” caption.

l) Revenue recognition

The Group receives fees from travel providers for providing electronic travel and reservation services through its CRS. The fee amount is dependent upon the usage and the level of functionality at which the provider participates. Revenue from airline reservations is recognized based on the number of bookings, net of cancellations made


10

and an allowance for future cancellations, or the number of CRS transactions depending on the option contractually selected on an annual basis by the applicable airlines.

Revenue from airline IT services and bookings of car rentals and hotel rooms is recognized at the time the reservation is used by the end costumer. Revenue for other services to travel agencies, airlines and others is recognized in the month of service.

m) Stock incentive plans

The Group accounts for its obligations under stock incentive plans as follows:

• Compensation expense is recognised for stock options, if the fair market value of the underlying stock at the date of the grant is above the exercise price. In this case, the expense is accrued over the vesting period of these rights (currently four years).

• Compensation expense relating to stock grants (i.e. their fair market value at the

grant date) is recognized over the vesting period of these rights. n) Research and development

Research and development costs are charged to expense as incurred, except for significant software projects that have reached development stage (see g, above). The research and development costs expensed for the years ended December 31, 2004 and 2003 were KEURs 97,646 and KEURs 90,320, respectively.

o) Financial instruments

i) Currency and interest rate related derivatives

The Group uses derivative financial instruments to hedge certain currency and interest rate exposures. All of these derivatives, whether designated as hedges or not, are recorded at fair value, being the market value for listed instruments or valuation based on option pricing models and discounted cash flow calculations for unlisted instruments. For accounting recognition purposes, the following policy has been applied.

• Cash flow hedges: Effective gains or losses resulting from remeasurement to fair

value are included, net of tax, directly in retained earnings until the committed or forecasted transaction occurs, at which point they will be reclassified to the statement of income. Ineffective gains or losses are recorded directly in the statement of income.

• Hedges of net investment in a foreign entity: Effective gains or losses obtained

from remeasurement to fair value are included, net of tax, in cumulative translation adjustments. Ineffective gains or losses are recorded directly in the statement of income.

• No hedge accounting: Gains or losses from derivatives not designated nor

qualified for hedging treatment are accounted for directly in the statement of income.


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ii) Equity related instruments

The Group has issued warrants (call options sold) of its class “A” shares as part of the consideration for acquiring certain IT contracts and certain corporate acquisitions. The fair value of these warrants is measured by using an option pricing model and is recorded as additional consideration for the underlying assets acquired. Warrants issued by the Group where the holder has the right to request settlement in cash are considered as a financial liability and recorded in the “Other liabilities” caption and are consequently remeasured to fair value with unrealized gains or losses recorded in the statement of income. Warrants issued by the Group, where the holder does not have the right to request settlement in cash, are considered to be equity instruments and are stated at fair value being recorded as additional paid-in capital, with no subsequent recognition of movements in fair value.

Equity swap agreements (contracts to buy shares of the Company in future periods), entered into in order to manage the exposure to a rise in the Group’s share price with respect to warrants issued as described above, are treated as:

• Derivative financial instruments, when they include interim cash settlement

features that are in substance similar to a form of collateral, and therefore do not qualify as an equity instrument: In such cases, unrealized gains or losses arising from remeasurement to fair value are recorded in the statement of income. Fair value is measured by using an option pricing model.

• Equity instruments, when there is no interim cash settlement feature, the equity

swap agreements qualify as equity instruments and the underlying shares are treated similar to Treasury shares and are presented as a reduction in shareholders’ equity.

As a component of certain commercial agreements, the Group receives warrants or options on shares of other companies. Warrants or options received on shares of other companies are recorded as derivative financial assets and measured initially at cost, which is the fair value as of the day of the transaction of the consideration given. Subsequent remeasurement of these financial assets is performed at their fair values with unrealized gains or losses recorded in the statement of income. Fair value is measured by using an option pricing model. When fair value cannot be reliably determined, these derivative financial assets are reflected in the balance sheet at amortized cost. Additionally, investments in companies over which the Group does not have significant influence or control are recorded as available for sale financial assets and measured at their fair values by reference to the market value for the listed instrument or by using techniques such as market value for similar instruments, discounted cash flow analysis and option pricing models for unlisted instruments. Unrealized gains or losses are included in the statement of changes in shareholders’ equity, net of tax, with realized gains or losses being recognized in the statement of income. When fair value cannot be reliably determined, these investments are reflected in the balance sheet at amortized cost.


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p) Income taxes

The current income tax is recognised in the statement of income, except to the extent that it relates to items directly taken to equity, in which case it is recognised in equity.

Deferred taxes are determined under the liability method. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial statement and tax bases of assets and liabilities using tax rates that are expected to apply when the assets or liabilities are realized based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred taxes arising from movements in equity are charged or credited directly to equity. Deferred tax assets are recognized when the probability of realization is reasonably assured and are adjusted only to the extent that it is no longer probable that a benefit will be realized in the future. Deferred tax assets and liabilities related to the same tax jurisdiction are presented net in the balance sheet.

Tax credits for investments in subsidiaries and associates are applied to reduce the amount of the investment when there is an increase in the percentage of ownership. In the case of capital increases that do not represent an increase in the percentage of ownership or for newly created companies, tax credits are recognized at the moment of the capital contribution.

q) Earnings per share

The Group calculates basic earnings per share using the weighted average number of shares outstanding during the period. The calculation of diluted earnings per share also includes the dilutive effect of the weighted average warrants, stock grants and stock options outstanding during the period.

4. ALLOWANCES – ACCOUNTS RECEIVABLE/PAYABLE The Group provided an allowance against accounts receivable for estimated cancellations of airline bookings as of December 31, 2004 of KEURs 72,290; and the Group provision for the related reduction in accounts payable for distribution fees as of December 31, 2004 was KEURs 25,986. As of December 31, 2003 the related allowances amounted to KEURs 72,758 against accounts receivable and KEURs 30,786 as a reduction in accounts payable. The Group’s provision for potentially uncollectible accounts receivable as of December 31, 2004 was KEURs 64,414; and as of December 31, 2003 was KEURs 48,637.


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5. PREPAYMENTS AND OTHER CURRENT ASSETS AND LIABILITIES The breakdown of the “Prepayments and other current assets” caption as of December 31 is as follows: 2004 2003 Prepaid expenses 28,751 23,388 Short-term deposits 9,232 9,156 Derivative assets (Note 18) 22,354 35,680 Other 17,119 14,586 Total 77,456 82,810

The breakdown of the “Other current liabilities” caption as of December 31 is as follows:

2004 2003 Taxes payable – non income tax 19,435 9,002 Employee related accrual 73,585 60,060 Derivative liabilities (Note 18) 4,323 11,032 Deferred purchase consideration 8,767 7,709 Other 21,753 12,936

Total 127,863 100,739

The “Deferred purchase consideration” caption includes the part of the deferred payment derived from certain corporate acquisitions in 2003 and 2002 that will vest in the following year. The “Taxes payable-non income tax” caption includes VAT Payable and Other taxes payable (see Note 19). The “Employee related accrual” caption mainly includes the variable compensation vested during the years 2004 and 2003 but paid in the following year and holidays accrued but not taken. The “Other” caption includes other public institutions payable, short-term deferred income and other sundry creditors.


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6. TANGIBLE ASSETS Balances and movements for the years ended December 31, 2004 and 2003 of the items included under tangible assets are as follows:

Cost

Land &

buildings

Data

processing hardware &

software

Other tangible assets

Total Balance as of December 31, 2002 129,355 410,471 116,019 655,845 Additions 27 47,993 5,560 53,580 Additions due to acquisitions of subsidiaries - 13,216 11,969 25,185 Retirements and disposals (165) (35,996) (2,288) (38,449) Transfers (3) 2,577 (121) 2,453 Exchange rate adjustments (1) (12,554) (2,636) (15,191) Balance as of December 31, 2003 129,213 425,707 128,503 683,423 Additions - 67,096 11,631 78,727 Additions due to acquisitions of subsidiaries 929 11,020 4,835 16,784 Retirements and disposals - (35,896) (3,925) (39,821) Transfers - 989 (1,234) (245) Exchange rate adjustments - (3,819) (1,194) (5,013) Balance as of December 31, 2004 130,142 465,097 138,616 733,855 Accumulated depreciation Balance as of December 31, 2002 26,928 289,442 62,617 378,987 Additions 2,452 62,921 11,187 76,560 Retirements and disposals (157) (32,400) (1,556) (34,113) Transfers - 371 (7) 364 Exchange rate adjustments - (9,036) (1,818) (10,854) Balance as of December 31, 2003 29,223 311,298 70,423 410,944 Additions 2,452 60,237 11,680 74,369 Additions due to impairment - 346 - 346 Retirements and disposals - (31,908) (3,214) (35,122) Transfers - (35) 48 13 Exchange rate adjustments - (3,321) (908) (4,229) Balance as of December 31, 2004 31,675 336,617 78,029 446,321

Net book value as of December 31, 2002 102,427 121,029 53,402 276,858




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The “Other tangible assets” caption includes building installations, furniture and fittings, and miscellaneous. As of December 31, 2004 fully depreciated items amount to KEURs 260,361 (KEURs 180,575 at December 31, 2003). Leased assets included in the aforementioned numbers are as follows:

December 31, 2004 2003

Land & buildings

Cost 126,396 126,396 Less accumulated depreciation 31,351 28,961

Net book value 95,045 97,435

Data processing hardware & software



Other



Total

Cost 159,796 160,330 Less accumulated depreciation 54,886 51,005 Net book value 104,910 109,325

The depreciation related to assets acquired under finance leases, for the years ended December 31, 2004 and December 31, 2003, was KEURs 5,651 and KEURs 7,130, respectively. The acquisitions of tangible assets under finance leases were KEURs 1,716 and KEURs 776 for the years ended December 31, 2004 and 2003, respectively. As of December 31, 2004 assets under construction of KEURs 1,170 were included in “Data processing hardware & software” and in “Other tangible assets”. As of December 31, 2003 assets under construction of KEURs 590 were included in “Data processing hardware & software” and in “Other tangible assets”.


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7. INTANGIBLE ASSETS Balances and movements for the years ended December 31, 2004 and 2003 of the items included under intangible assets are as follows:

Patents, trademarks & licenses

Purchased technology

Software development

projects Purchased contracts Goodwill

Other intangible

assets Total

Cost

Balance as of December 31, 2002 82,797 - 269,809 260,480 225,680 15,989 854,755

Additions 5,887 - 54,694 28,209 100,636 79 189,505

Additions due to acquisitions of subsidiaries 891 - 3,734 - - - 4,625

Retirements and disposals - - - (18,043) - (10,191) (28,234)

Transfers - 41,688 1,205 9,880 5,202 (284) 57,691 Exchange rate adjustments (902) - (4,485) (8,433) (20,557) (107) (34,484)

Balance as of December 31, 2003 88,673 41,688 324,957 272,093 310,961 5,486 1,043,858

Additions 1,461 - 55,562 16,207 109,027 601 182,858

Additions due to acquisitions of subsidiaries 724 24,572 4,617 3,620 2,639 2,945 39,117

Retirements and disposals (8,253) - (14,839) (15,037) 43 (8) (38,094)

Transfers (2,406) 6,022 3,118 168 38,023 136 45,061 Exchange rate adjustments (296) - (1,556) (2,303) (7,310) (23) (11,488)

Balance as of December 31, 2004 79,903 72,282 371,859 274,748 453,383 9,137 1,261,312

Accumulated amortization

Balance as of December 31, 2002 46,721 - 112,245 138,967 72,751 13,464 384,148

Additions 11,120 4,011 35,510 42,746 25,767 1,008 120,162

Additions due to impairment 2,054 - 1,213 - 14,028 - 17,295

Retirements and disposals (16) - - (16,489) - (10,188) (26,693) Transfers - - (297) 10 12,566 (77) 12,202

Exchange rate adjustments (510) - (2,782) (4,902) (11,045) (69) (19,308)

Balance as of December 31, 2003 59,369 4,011 145,889 160,332 114,067 4,138 487,806

Additions 9,911 8,463 38,052 38,863 25,881 1,000 122,170

Additions due to impairment 397 - 7,252 - 3,002 - 10,651

Retirements and disposals (8,253) - (14,603) (14,521) - - (37,377) Transfers 8 464 (485) - 29,079 - 29,066

Exchange rate adjustments (294) - (1,393) (1,680) (4,866) 20 (8,213)

Balance as of December 31, 2004 61,138 12,938 174,712 182,994 167,163 5,158 604,103

Net book value as of December 31, 2002 36,076 - 157,564 121,513 152,929 2,525 470,607

Net book value as of December 31, 2003 29,304 37,677 179,068 111,761 196,894 1,348 556,052

Net book value as of December 31, 2004 18,765 59,344 197,147 91,754 286,220 3,979 657,209

The increase in software development projects during the years 2003 and 2004 is mainly due to capitalization of software for IT services, as well as ongoing investments in the traditional and e-commerce areas. The increase in purchased technology during the years 2004 and 2003 are mainly due to the acquisition of the 55.36% share interest in Opodo Limited (UK) and the acquisition of the


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remaining 66% share interest in Amadeus Germany GmbH and Balance Sheet reclassification of the original 34% acquisition, respectively. The increase in purchased contracts during the years 2004 and 2003 are primarily due to signing bonuses paid to travel agencies. The increase in goodwill during the year 2004 is mainly due to the acquisition of the subsidiaries Amadeus France SNC, Optims SA, and Opodo Limited (UK) and during the year 2003 is mainly due to the acquisition of the subsidiary Amadeus Germany GmbH. As of December 31, 2004 fully amortized items amount to KEURs 119,862 (KEURs 126,468 at December 31, 2003). As of December 31, 2004 an impairment loss amounting KEURs 7,252 has been recognised in the statement of income mainly related to software developments in the leisure area. These write downs were necessary on account of the change in Management’s expectations on the recoverable value, on the basis of discounted future cash-flow compared to the book value. As of December 31, 2003 an impairment loss amounting to KEURs 9,961 was recognised in the statement of income related to the goodwill of the Consortia Business unit. An additional impairment loss amounting to KEURs 4,067 has been considered for the goodwill related to a company in the e-commerce arena and to ICSA-T N.V. These write downs were necessary on account of the low recoverable value on the basis of discounted future cash-flow compared to the book value. As of December 31, 2004 and 2003 assets under construction of KEURs 1,910 and KEURs 2,758 respectively, were included in “Licenses”.


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8. INVESTMENTS IN ASSOCIATES AND OTHER LONG-TERM INVESTMENTS Balances and movements for the years ended December 31, 2004 and 2003 of the items included under investments in associates and long-term investments are as follows:

Investments In associates

Other long-term investments

Total

Balance at December 31, 2002 124,153 38,278 162,431 Additions 6,471 80,088 86,559 Additions due to acquisitions 857 67 924 Decreases - (2,870) (2,870) Share of associates’ results (21,706) - (21,706) Dividends received (9,076) - (9,076) Transfers (35,087) (11,200) (46,287) Remeasurement to fair value of investments - 2,274 2,274 Exchange rate adjustments (2,339) (1,880) (4,219) Balance at December 31, 2003 63,273 104,757 168,030 Additions 3,441 19,685 23,126 Additions due to acquisitions - 19,048 19,048 Decreases - (7,758) (7,758) Share of associates’ results (7,566) - (7,566) Dividends received (8,126) - (8,126) Transfers (23,521) (68,332) (91,853) Remeasurement to fair value of investments - (2,876) (2,876) Exchange rate adjustments 87 (685) (598) Balance at December 31, 2004 27,588 63,839 91,427

The “Share of associates’ results” caption excludes the impact of taxes payable at the respective shareholder level. The “Transfers” caption for investments in associates includes the impact of acquiring controlling interests in associates. The increase in the “Other long-term investments” caption during year 2004 is mainly due to deposits of Opodo Limited (UK). The increase in this caption during 2003 is mainly due to the convertible loan given to Opodo Limited (UK) (Note 9). As of December 31, 2004, the transfers out of the “Other long –term investment” caption includes the impact of considering the convertible loan, given to Opodo Limited (UK) in 2003, as an intercompany loan upon the acquisition by the Group of 55.36% interest in this company. The terms of the convertible loan contract have been revised and the option to convert has been cancelled.


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9. NEW INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES a) During the year ended December 31, 2004 the Group made the following investments in

subsidiaries and associates:

i) Acquisitions:

• 42% interest in Amadeus Brasil Ltda (total interest 76%). • 50% interest in Travellink AB (total interest 85.1%). • 20% interest in Comtec (Europe) Limited. • 51% interest in Amadeus Bulgaria EOOD (total interest 100%). • 55.36% interest in Opodo Limited (UK). • 66.12% interest in Optims S.A. (total interest 96.12%). • 66% interest in Amadeus France SNC (total interest 100%).

ii) Newly created companies:

• 100% interest in the NMC Amadeus Global Travel Distribution (Malta) Limited. • 100% interest in the NMC Amadeus Saudi Arabia Limited. • 50% Interest in Jordanian National Touristic Marketing Private Shareholding

Company.

iii) Capital increases:

• Amadeus Hong Kong Ltd. • Amadeus Marketing (Ghana) Ltd. • Amadeus Austria Marketing, GmbH. • Eviaggi.com S.P.A. • Amadeus Marketing Philippines Inc. • Amadeus Central and West Africa S.A. • Sistema de Reservaciones CRS de Venezuela C.A.

The main balance sheet impacts of these transactions are summarized below:

Cash paid for current transactions 131,063 Conversion of debt to equity 2,772 Deferred consideration 42,652 Tax benefit on investments (28,728)

Equity in net assets acquired (29,146) Excess purchase price 118,613 Allocation of fair value to net assets acquired (8,487) Goodwill 110,126

The reconciliation between the net cash paid for current acquisitions and the net cash invested in subsidiaries and associates is as follows:


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Cash paid for current transactions 131,063 Cash acquired as a result of current acquisition (42,409) Cash acquired related to the pre-existing ownership in Amadeus Brazil, Travellink, Bulgaria, Optims and Amadeus France (5,579) Cash acquired related to minority interests (27,191) Net cash invested in subsidiaries and associates 55,884

Of the business combinations performed during the year 2004, the acquisition of Opodo Limited, Optims S.A. and Amadeus France SNC have been effected from March 31 onwards being, therefore, subject to the application of the new IFRS 3 “Business Combinations”. The accounting for these acquisitions has been determined provisionally and is within the provisional accounting period. The purchase price and goodwill amounts recognised for Optims S.A. and Amadeus France SNC are included in the purchase price and goodwill aggregates for the year 2004 presented above. On July 1, 2004 we acquired a 55.36% controlling stake, via capital increase, in Opodo Ltd, a leading pan-European online travel portal for EURs 62 million in cash, being EURs 20 million paid upon acquisition, and the remaining EURs 42 million deferred in two installments before year end. The revenues and net profit for the Group from acquisition date is KEURs 24,110 and KEURs (14,015) respectively. Opodo is managed under Amadeus’ umbrella and operates as a separate entity with its own board. Opodo's nine pre-existing airline owners remain as shareholders in the portal. Amadeus was already the technology provider of Opodo and had presence on its board since April 2003, by means of a Convertible Loan amounting to approximately EURs 52 million. Upon completion of the 55.36% acquisition, the conversion rights attached to the loan have terminated, and remain as a financial loan. The purchase consideration paid for the above acquisition and the goodwill acquired is as follows: Purchase consideration

Cash invested 62,000 Tax benefit on investment (10,059)

Total purchase consideration 51,941 Fair value of net assets acquired 18,952

Goodwill 32,989

The goodwill amount recognised is attributed to the economic benefits to be obtained at central level and to the tax losses carry-forward not recognised at acquisition date.


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The fair value of assets, liabilities and contingent liability amounts recognised at the acquisition date is as follows:

Fair values recognised

at acquisition

Assets

Curent assets 115,228 Tangible assets 4,358 Intangible assets

Purchased technology 21,900 Other non current assets 16,483

Liabilites

Deferred Tax Liablities 6,570 Other liabilities 117,165

Contingent liabilites -

Net assets 34,234 Minority interest (15,282)

Net assets acquired 18,952

Information on carrying amounts of the above items immediately before the acquisition was effected are not disclosed since the information is currently not available. Following the 55.36% acquisition of Opodo Limited (UK), the following fair values were identified with respect to the net assets acquired:

Purchased technology 21,900 Deferred income taxes payable (6,570)

100% allocation of fair value to the net assets acquired 15,330 55.36% allocation of fair value to net assets acquired 8,487

Purchased technology is the capability obtained by the practical application of knowledge, processes, methods, tools and systems to serve the market need more efficiently. In the case of Opodo, it relates to its capability to operate the online travel web-site providing a wide range of travel agency services. The recoverable amount of Opodo has been determined as of December 31, 2004 on the basis of a value in use calculation, which has resulted in no impairment. Cash flow projections have been based on a five year period financial budget approved by management. Estimated cash flows beyond this period are extrapolated using the estimated growth rate for the business in which Opodo operates.


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b) During the year ended December 31, 2003 the Group made the following investments in subsidiaries and associates:

i) Acquisitions:

• 66% interest in Amadeus Germany GmbH (former Start Amadeus GmbH; total interest 100%).

• 24.5% interest in Amadeus Polska Sp.zo.o (total interest 100%). • 100% interest in Airline Automation, Inc. • 17.54% interest in Vivacances S.A. (total interest 67.54%). • 35% interest in Amadeus Kuwait Company W.L.L. • 30% interest in Optims S.A. • 10% interest in Travellink AB (total interest 35%). • 100% interest in German Travel Services GmbH. The Group had temporary

control over the company and, therefore, has not consolidated this participation, which has been sold in 2004.

ii) Newly created companies:

• 100% interest in the NMCs Amadeus Global Travel Distribution Southern Africa

Limited, Amadeus Marketing Romania S.R.L., Amadeus East Africa and Amadeus Hong Kong Ltd.

• 50% interest in PT Amadeus Indonesia • 49% interest in Amadeus Gulf LLC

iii) Capital increases

• Amadeus Polska Sp.zo.o • Amadeus Hellas S.A. • Amadeus Global Travel Israel Limited • Amadeus GTD Australia Pty Ltd. • Eviaggi.com S.P.A. • Travellink AB

The main balance sheet impacts of these transactions are summarized below:

Cash paid for current transactions 137,666 Conversion of debt to equity 2,000 Deferred consideration 13,863 Tax benefit on investments (16,837) Equity in net assets acquired (33,882)

Excess purchase price 102,810 Allocation of fair value to net assets acquired (21,633)

Goodwill 81,177


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Following the 66% acquisition of Amadeus Germany GmbH (former Start Amadeus), the following fair values were identified with respect to net assets acquired:

Purchased technology 30,056 Purchased contracts 5,234 Deferred income taxes payable (13,657)

Allocation of fair value to net assets acquired 21,633

Purchased technology related to the original 34% acquisition, amounting to KEURs 11,632 has been transferred to the Purchased technology caption in the Balance Sheet.

The reconciliation between the net cash paid for current transactions and the net cash invested in subsidiaries and associates is as follows:

Cash paid for current transactions 137,666 Cash acquired as a result of current acquisition (35,233) Cash acquired related to the pre-existing ownership in Amadeus Germany and Vivacances (18,476)

Net cash invested in subsidiaries and associates 83,957

10. CURRENT AND LONG TERM DEBT The breakdown of amounts owed to financial institutions, by maturity, is as follows as of December, 31:

2004 2003

Syndicated loans – short-term - 62,729 Other credit facilities 8,562 17,581 Total short-term debt 8,562 80,310 Other 2,538 701 Total long-term debt 2,538 701

Total debt 11,100 81,011

The Group has two syndicated variable rate loans as of December 31, 2004 which are under KEURs 200,000 and KEURs 300,000 dual currency revolving credit facility agreements, denominated in EUR and USD. As of December 31, 2004 and 2003, the total unused amounts available under these facilities are KEURs 500,000 and KEURs 565,000, respectively. The interest rates for the drawdowns on these loans ranged from 2.37% to 2.58% for the year ended December 31, 2004 and from 2.39% to 3.75% in 2003. These


24

loans have commitment fees that range from 0.25% to 0.26% of the unused portion. Under the terms of these loan agreements, the Group is obliged to meet certain covenants, the most important of which are that the ratio of debt to total EBITDA (Earnings before interest, tax, depreciation and amortization) shall not exceed 3:1 and that the ratio of EBITDA to total financial charges shall be or shall exceed 4:1. The repayment and maturity schedule for these two facilities as of December 31, is as follows:

2004 2003

Date of maturity Amount of

facilities maturing

Repayment schedule for outstanding

amount Amount of facilities

maturing


amount

April 21, 2004 - - 27,729 27,729 April 24, 2004 - - 100,000 35,000 April 24, 2005 100,000 - 100,000 - April 24, 2006 100,000 - 100,000 - December 20, 2006 150,000 - 150,000 - December 20, 2007 150,000 - 150,000 -

500,000 - 627,729 62,729

Short term credit facilities have accrued interest at rates between 2.31% and 6.21% during 2004 and between 2.37% and 5.60% in 2003. In addition to the syndicated loans mentioned above, various financial institutions have made available lines of credit and credit facilities, which require no commitment fees. As of December 31, 2004 and 2003, the unused portion of these credit facilities is KEURs 96,089 and KEURs 94,360, respectively.

11. COMMITMENTS a) Leases

The Group leases certain facilities and equipment under operating and finance leases.

The most significant asset acquired under finance lease is the CRS data processing center in Erding. The original cost (in 1988) of this facility was KEURs 106,558, which was increased due to new construction by KEURs 10,942 during the year 2000. These expenditures have been financed via lease agreements with similar terms and recorded as tangible assets under a finance lease (see Note 6). These leases expire on December 31, 2019, although the Group has an option to terminate the main lease on June 30, 2011. At the end of years 2009 and 2019 the Group has the option to purchase the land and the buildings for the residual value of KEURs 70,235 and KEURs 21,097, respectively. Quarterly payments consisted of principal plus interest at an average of 4.98% during 2004 and 2003.


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The future minimum lease payments for finance leases as of December 31, is as follows:

Year(s) due 2004 2003

Gross Net present

value Gross Net present

value 0 – 1 15,089 13,979 14,912 13,824 1 – 2 12,727 11,650 14,029 12,861 2 – 3 10,965 9,741 12,263 10,982 3 – 4 10,542 9,170 10,468 9,028 4 – 5 8,976 7,469 10,402 8,790 5 – 10 35,924 24,725 37,716 26,484 10 – 15 35,865 19,266 35,865 19,267 15 – 20 21,097 9,999 28,271 12,827

Total minimum lease payments 151,185 105,999 163,926 114,063 Less amount representing interest 45,186 - 49,863 -

Obligations under finance leases 105,999 105,999 114,063 114,063

Current portion 9,996 9,643 Long-term portion 96,003 104,420

105,999 114,063

For the year ended December 31, 2004 and 2003 the rental expense for operating leases were KEURs 51,089 and KEURs 41,839, respectively.

The future minimum lease payments for operating leases as of December 31, is as follows:

Year(s) due 2004 2003 0 – 1 38,972 44,097 1 – 2 33,524 36,880 2 – 3 26,687 29,580 3 – 4 21,875 23,571 4 – 5 21,117 21,094 5 – 10 49,428 56,756 10 – 15 6,482 15,500

Total payments 198,085 227,478

b) Other commitments

As of December 31, 2004 and 2003, the Group had short-term commitments to acquire tangible assets for KEURs 8,142 and KEURs 9,252, respectively. Additionally, the Group has entered into various software license agreements, which could entail future


26

payments. The likelihood that the Group will make these payments is subject to the compliance by the counterparty with certain contractual obligations. The maximum amount committed under these agreements, at December 31, 2004, is KEURs 7,761 and KEURs 660 for the short and the long-term, respectively (at December 31, 2003, KEURs 1,227 and KEURs 268 for the short and the long-term, respectively).

12. OTHER LONG-TERM LIABILITIES The breakdown of this caption as of December 31, 2004 and 2003 is as follows:

2004 2003

Debt related to equity instruments similar to treasury shares (see Note 13) - 28,380 Deferred purchase consideration 24,173 27,070 Defined benefit plans 3,355 3,711 Derivative liabilities (Note 18) 2,448 4,980 Others 7,327 8,637

37,303 72,778

a) Deferred purchase consideration

The amount of this liability is contingent on the evolution of the respective businesses acquired.

b) Pension and Post-retirement benefits

The Group operates funded and unfunded defined benefit plans.

The amounts related to defined benefit plans recognized in the balance sheet as of December 31, are as follows:

2004 2003 Present value of wholly unfunded obligations 9,045 6,596 Present value of partially or wholly funded obligations 38,819 34,852

Present value of defined benefit obligations 47,864 41,448 Fair value of plan assets (33,728) (31,270) Funded Status of the Plan 14,136 10,178 Past service cost (1,596) - Unrecognized actuarial gains/(losses) (9,185) (6,467) Net (asset)/liability in balance sheet 3,355 3,711


27

The defined benefit plan amounts recognized in the statement of income for the years ended December 31, are as follows:

2004 2003 Net Current service cost 2,408 2,243 Interest cost 2,405 2,289 Expected return on plan assets (2,281) (1,943) Amortization of unrecognized actuarial (gains)/losses 236 238 Effect of curtailments or settlements 242 684 Past service cost 219 -

Total net periodic pension cost 3,229 3,511

Balances and movements for the years ended December 31, 2004 and 2003 of the items included under defined benefit plan liability are as follows:

2004 2003

Balance at the beginning of the period 3,711 8,396 Company contributions (3,087) (4,076) Net periodic pension cost for the year 2,987 2,828 Benefits paid directly by the company in the year (298) (329) Adjustments relating to acquisitions/divestures/business combinations - 1,459 Adjustments relating to settlements/curtailments/terminations 242 684 Exchange rates differences (161) (488) Additional minimum liability adjustment - (2,602) Reclassification from other net liabilities (39) (2,161)

Balance at the end of the period 3,355 3,711

A summary of the major actuarial assumptions used to calculate the most significant portion of the defined benefit obligation as of December 31, is as follows:

2004 2003 Discount rate for Obligations 5.18% - 6.00% 5.61% - 6.25% Discount rate for Expense 5.55% - 6.25% 5.88% - 6.75% Long – Term Rate of Return on Plan Assets 5.68% - 8.30% 6.32% - 8.50% Rate of Future Compensation Increases 3.30% - 3.75% 3.27% - 3.75% Rate of Pension Increases 1.82% 1.84% Medical rate and ultimate rate 10.5% / 5.25% 11.0% / 5.25%

For the years ended December 31, 2004 and 2003 the expense for defined contribution plans is KEURs 15,660 and KEURs 13,419, respectively.


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13. SHAREHOLDERS’ EQUITY Balances and movements of class “A” and class “B” shares for the years 2004 and 2003 are as follows:

Class “A” shares (Par value 0.01 Euros)

Issued shares

Treasury shares

Outstanding shares

Class “B” shares (Par value 0.10 Euros)

As of December 31, 2002 590,000,000 15,711,730 574,288,270 219,983,100

Additions - 22,025 (22,025) - Disposals - (230,912) 230,912 -

As of December 31, 2003 590,000,000 15,502,843 574,497,157 219,983,100

Additions - 10,311,563 (10,311,563) - Disposals - (6,708,736) 6,708,736 (48,539,400)

As of December 31, 2004 590,000,000 19,105,670 570,894,330 171,443,700

The shares included above represent the authorized share capital of the Company. All shares are fully subscribed and paid. The Treasury shares have been acquired primarily in order to cover obligations under the Stock Incentive Plan described in Note 16 and warrants issued as described in Note 18. Disposals include shares and options granted to employees in connection with the different Stock Incentive Plans and portfolio adjustments made in order to match with the current obligations of the Group. In the Annual General Shareholders’ meeting that has taken place in June 2004, the redemption of 48,539,400 class “B” shares was approved, following the sale of 78,000,000 Amadeus Class “A” shares by Lufthansa Commercial Holding GmbH on February 12, 2004. Each class “A” share carries the right to one vote, whilst each class “B” share carries the right to 10 votes. Economic rights are greater for class “A” shares in respect of any future distribution of dividends. The right to receive a dividend for class “B” shares is calculated as the lesser of 1% of total dividends or 1% of the par value of class “B” shares. In the event of liquidation of the assets of the Group, class “A” shares have greater economic rights than class “B” shares, as the Group would pay out the par value of class “A” shares and in the case of any outstanding amounts they would be distributed among class “B” shares for their par value; further remaining amounts would be distributed among class “A” shares.


29

As of December 31, 2004 the Company’s shares are held as follows:

Shareholder

Class “A”

shares Class “B”

shares

% of Class “A”

Shares % of total

voting rights

Société Air France 137,847,654 85,782,614 23.36% 43.21% Iberia Líneas Aéreas de España, S.A. 107,826,173 67,100,243 18.28% 33.80% Lufthansa Commercial Holding, GmbH 29,826,173 18,560,843 5.05% 9.34% Other (1) 314,500,000 - 53.31% 13.65% Total 590,000,000 171,443,700 100% 100%

(1) Includes the Treasury shares and the public shares.

As of December 31, 2003 the Company’s shares are held as follows:

Shareholder

Class “A”

shares Class “B”

shares

% of Class “A”

Shares % of total

voting rights

Société Air France 137,847,654 85,782,614 23.36% 35.69% Iberia Líneas Aéreas de España, S.A. 107,826,173 67,100,243 18.28% 27.92% Lufthansa Commercial Holding, GmbH 107,826,173 67,100,243 18.28% 27.92% Other (1) 236,500,000 - 40.08% 8.47%

Total 590,000,000 219,983,100 100% 100%


The General Shareholders’ Assembly of June 14, 2004 declared a dividend per class “A” and per class “B” share, in accordance with the Company’s by-laws and once the economic rights of the Treasury shares were proportionally distributed to the remaining shares. The final dividend of KEURs 35,000 was paid in July 2004 with regards to the distribution of 2003 results. Included in retained earnings are reserves of KEURs 117,683 and KEURs 106,696 as of December 31, 2004 and 2003, respectively, which cannot be distributed as dividends according to statutory regulations applicable to various Group companies. Within these restricted reserves there is an allocation for the total amount of Treasury shares acquired which is charged to additional paid-in capital. The components of the Treasury shares and other similar equity instruments caption as of December 31, were as follows:


30

Number of shares KEURs

2004 2003 2004 2003 Treasury shares 19,105,670 15,502,843 109,499 98,519 Equity swaps - 4,500,000 - 28,380

19,105,670 20,002,843 109,499 126,899

14. RELATED PARTY BALANCES AND TRANSACTIONS Below is a summary of significant balances and transactions with affiliates. All transactions with affiliates are carried out on an arm’s length basis. a) Accounts receivables - affiliates

The receivables are primarily for revenues earned from worldwide bookings made through the Amadeus CRS for flights on the shareholder airlines. Total revenues earned by the Group from affiliates for the year ended December 31, 2004 and 2003 are KEURs 498,452 and KEURs 505,291, respectively.

b) Loans receivable and advances - affiliates

Total interest earned by the Group from affiliates is KEURs 146 and KEURs 44 for the year ended December 31, 2004 and 2003, respectively. Interest rates for these loans denominated in United States Dollars (USD) and EURs ranged from 3.29% to 6.15% for the year ended December 31, 2004. Interest rates for these loans denominated in United States Dollars (USD), EURs and Swedish Krona (SEK) ranged from 3.16% to 4.15% for the year ended December 31, 2003.

c) Accounts payable - affiliates

The payables arise primarily from distribution fees due for bookings made through the shareholder airlines. Total operating expenses incurred by the Amadeus Group with its affiliates are KEURs 266,701 and KEURs 281,589 for the year ended December 31, 2004 and 2003, respectively.

d) Board of Directors remuneration

Total remuneration of all kinds to the members of the Board of Directors of the Company amounts to KEURs 426 in 2004 (KEURs 460 in 2003). No loans, advances or stock options have been granted to the members of the Board of Directors.


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15. SEGMENT INFORMATION The Group operates in the travel industry and, accordingly, events that significantly affect the industry could also affect the Group’s operations and financial position. The following geographical distribution of revenues is based primarily on the country where bookings were made and, with respect to bookings made through the Group’s CRS directly with airlines, based upon the home country of the airline: Year ended December 31,

2004 2003

Europe 1,371,988 1,293,464

United States 169,717 182,544

Rest of the world 514,975 453,001

Total 2,056,680 1,929,009

The following geographical distribution of assets is based on the country where the assets were located or relate to. The split of assets as of December 31, 2004 is as follows:

Europe US Rest of the

world

Assets used for general enterprise purposes Total

Tangible assets 266,220 6,929 14,385 - 287,534

Intangible assets 367,637 60,279 14,034 215,259 657,209

Investments in associates 16,382 2,664 8,542 - 27,588

Total 650,239 69,872 36,961 215,259 972,331

The split of assets as of December 31, 2003 is as follows:

Europe US Rest of the

world

Assets used for general enterprise purposes Total

Tangible assets 249,330 12,177 10,972 - 272,479

Intangible assets 255,727 85,722 14,558 200,045 556,052

Investments in associates 45,040 6,579 11,654 - 63,273

Total 550,097 104,478 37,184 200,045 891,804

Because of the interrelationships between the Group’s geographical activities, it is not meaningful to segment global results for purposes of IAS 14, “Segment Reporting”.


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16. STOCK INCENTIVE PLANS Beginning with the International Global Offering of 1999, the Group adopted a stock based Employee Incentive Plan (the Plan) to retain and motivate senior management and employees starting October 19, 1999. The plan provides for the award of common stock in the form of stock options and stock grants as follows: i) The Group granted to its employees a one-time grant of shares, depending on salary

level and seniority, which would vest over a three-year period in three equal annual installments.

ii) The Group granted to senior management a one-time grant of shares, which would vest

at the end of a three to four year period. iii) The Group also granted to executive employees (including non-senior members from the

management team), in each of the years 1999 to 2004, options to purchase shares of the Group´s Common Stock at the market price on the date of the grant until the year 2003, and at the average market price for the year 2004. Thus no compensation expense has been recorded for plans prior to 2004 and KEURs 415 compensation expense have been recognised related to the 2004 Plan. The aforementioned options vest in equal installments over a four-year period measured from the date of the grant and have a ten-year term from the grant date.

As of December 31, the detail of these plans is as follows:

2004 2003

Number

of options Value

at exercise price Number

of options Value

at exercise price

Outstanding at 1st January 12,056,290 66,559 8,945,901 48,378

Of which vested 4,983,719 29,549 2,747,244 17,454

New rights 3,630,120 19,203 3,446,115 19,919 Rights exercised (*) (889,071) (4,576) (49,707) (224)

Rights expired (217,042) (1,238) (286,019) (1,514)

Plan 2003 adjustment (168,049) (971) - -

Outstanding at 31st December 14,412,248 78,977 12,056,290 66,559

Of which vested 6,476,974 37,696 4,983,719 29,549

(*) The average price for the rights exercised has been 5.15 EURs during 2004 and 4.5 EURs during 2003.

The increase in new rights during 2004 corresponds to the 2004 Stock Option Program. The maturity dates of options as of December 31, are as follows:


33

2004 2003

Number Exercise

price

Number Exercise

price

Five years 1,596,212 5.75 - - Six years 1,122,956 8.89 1,941,603 5.75 Seven years 2,106,936 5.42 1,160,967 8.89 Eight years 2,754,393 3.88 2,458,081 5.42 Nine years 3,201,631 5.78 3,049,524 3.88 Ten years 3,630,120 5.29 3,446,115 5.78

Total 14,412,248 12,056,290

iv) During 2002, the Group implemented an Employee Stock Purchase Program. The general conditions of the program allow employees to purchase Company shares every three months up to an established percentage of the employee’s annual salary. If the purchased shares are maintained over a period of 30 days, the Company will grant shares for 15% of the amount the employee contributes to the program. The cost for the year ended December 31, 2004 and 2003 was KEURs 86 and KEURs 97, respectively. The IFRS 2 on share–based payment transactions, which provides a fair value approach to accounting for share based payments, has been issued in the first quarter 2004. The effective application date will be January 1, 2005. The transitional provisions will require prospective application for equity settled stock incentive plans. As a result, the Group does not provide a pro forma impact on the income statement and earnings per share that would have applied had the transition provision required retrospective application.

17. ADDITIONAL INCOME STATEMENT DATA AND RELATED DISCLOSURES The Group’s personnel expense and number of employees were as follows:

Year ended December 31 2004 2003

Gross personnel costs 402,111 387,863 Less amount capitalized 25,144 26,429

Net charge to income 376,967 361,434

Average number of employees 5,760 5,257

In the year 2003, the average headcount has been recalculated using the period from the acquisition to year-end instead of averaging across the full year.


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The Group’s net interest expense was as follows:

Year ended December 31, 2004 2003 Interest expense 12,266 17,750 Less interest income 6,221 2,037

Net interest expense 6,045 15,713

18. FINANCIAL INSTRUMENTS a) Objectives and significant terms and conditions

The Group uses the following financial instruments as part of its commercial operations and to manage the risks arising from fluctuations in currency exchange rates, interest rates and share market prices:

i) Currency derivatives

The Group has risks associated with fluctuations in currency exchange rates and uses currency derivatives to hedge future cash flows, net investments in foreign entities and certain monetary assets and liabilities. The Group is party to a variety of foreign currency forward and option contracts for the management of these exchange rate exposures. As of December 31, 2004, the details of open foreign currency options and open forward contracts is as follows:


35

Derivative Assets:

Fair value (KEURs)

Type

Financial Instrument Currency Maturity

Notional amount

(KEURs) (***)

OCI (**)

CTA

P&L

Total

2005 68,748 7,264 - 4,143 11,407

USD 2006 12,587 1,644 - - 1,644

2005 (39,668) 1,949 - 468 2,417

Cash flow hedge

Forward

Others 2006 (28,292) 723 - - 723

Options USD 2005 55,062 7,158 - (1,696) 5,462 2006 66,808 5,481 - (1,468) 4,013 2007 40,378 2,693 - (947) 1,746

USD 2005 5,284 - 154 - 154

Net equity investments

Forward

Others 2005 19,049 - 112 - 112

USD 2005 23,758 - - 888 888 Others (*)

Forward

Others 2005 11,606 - - 144 144

IRS EUR 2009 8,474 - - 28 28

Premium paid 4,473

Total 26,912 266 1,560 33,211 Total short term

(Note 5)

16,371 266 3,947 22,354

Total long term

10,541 - (2,387) 10,857

(*) “Others” includes derivative instruments, which do not qualify for hedge accounting and are used by the Company to protect itself from changes in

value of foreign-currency denominated monetary assets and liabilities. (**) Other Comprehensive Income (OCI) included within “retained earnings and other reserves” caption. (***) Notional amounts for Options are presented based on year-end exchange rates.


36

Derivative Liabilities

Fair value (KEURs)

Type


Notional amount

(KEURs) (***)

OCI (**)

CTA

P&L

Total

USD 2005 (13,571) 781 - 412 1,193

Cash flow hedge

Forward

Others 2005 (49,145) 1,383 - 372 1,755 2006 (41,303) 1,192 - - 1,192 2007 (19,349) 263 - - 263 Options USD 2005 40,378 - - 373 373 2006 28,632 - - 506 506 2007 38,176 - - 487 487

USD 2005 (5,222) - 93 - 93


Forward

Others 2005 (19,014) - 79 - 79

Others (*) Forward Others 2005 (13,357) - - 830 830 Total 3,619 172 2,980 6,771 Total short term (Note 5)

2,164 172 1,987 4,323

Total long term (Note 12)

1,455 - 993 2,448


value of foreign-currency denominated monetary assets and liabilities. (**) Other Comprehensive Income (OCI) included within “retained earnings and other reserves” caption. (***) Notional amounts for Opt ions are presented based on year-end exchange rates.

During the year 2004, the Group entered into certain derivative instruments designated as cash flow hedge for which the underlying transaction is expected to occur in 2005. These hedge designations have been cancelled in 2004. The cumulative gain on these hedging instruments at the time of cancellation was KEURs 2,201, and is included in equity as of December 31, 2004 until the forecasted transaction occurs. Part of the balance amount of KEURs 2,142 related to derivative instruments cancelled in 2003 that remained in equity as of December 31, 2003 has been reclassified to the statement of income in 2004 at the time the underlying transaction occurred. Additionally, of the total outstanding derivative instruments in equity as of December 31, 2003, a net gain of KEURs 13,704 has been reclassified to the statement of income in 2004. Of the outstanding derivative instruments in equity as of December 31, 2002, a net gain of KEURs 6,309 was reclassified to the statement of income during the year 2003.


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As of December 31, 2003 the details of open foreign currency options and open forward contracts is as follows:

Derivative Assets:

Fair value (KEURs)

Type


Notional amount

(KEURs) (***)

OCI (**)

CTA

P&L

Total

2004 125,741 19,451 - 2,797 22,248

USD 2005 52,716 6,365 - - 6,365

2004 (33,999) 1,425 - 407 1,832

Cash flow hedge

Forward

Others 2005 (26,039) 1,994 - - 1,994

Options USD 2004 24,545 1,934 - 15 1,949 2005 30,278 2,885 - 377 3,262 2006 16,129 125 - 93 218

USD 2004 36,283 - 4,346 - 4,346


Forward

Others 2004 9,531 - 235 - 235 Options USD 2004 11,876 - 1,032 - 1,032 2005 38,005 - 2,684 - 2,684

USD 2004 46,709 - - 2,615 2,615

2004 (12,059) - - 832 832 2005 (3,120) - - 40 40

Others (*)

Forward

Others

IRS EUR 2009 10,048 - - 178 178

Premium paid - - - 2,738

Total 34,179 8,297 7,354 52,568 Total short term

(Note 5)

22,810 5,613 6,666 35,680 Total long term 11,369 2,684 688 16,888




38

Derivative Liabilities:

Fair value (KEURs)

Type


Notional amount

(KEURs) (***)

OCI (**)

CTA

P&L

Total

2004 27,979 3,098 - 129 3,227

USD 2005 4,453 444 - - 444

2004 25,870 1,463 - 429 1,892

Cash flow hedge

Forward

Others 2005 20,661 1,285 - - 1,285

Options USD 2004 24,545 - - 441 441 2005 19,873 - - 1,065 1,065

USD 2004 15,568 - 4,355 - 4,355


Forward

Others 2004 743 - 23 - 23 Options USD 2004 11,876 - - 279 279 2005 38,005 - - 1,150 1,150

Others (*) Forward Others 2004 30,300 - - 815 815

IRS EUR 2005 50,000 - - 1,036 1,036

Total 6,290 4,378 5,344 16,012 Total short term (Note 5)

4,561 4,378 2,093 11,032


1,729 - 3,251 4,980



ii) Interest rate derivatives

The Group entered into an interest rate swap agreement to hedge against exposure to increases in interest rates related to a finance lease agreement, which has expired in December 2004. During the year, this agreement entitled the Group to receive interest at floating rates and obliged it to pay interest at a fixed rate of 5.785%, both relating to a declining schedule of principal amounts, beginning on December 31, 1999 at KEURs 20,016 and ending on December 31, 2004 at KEURs 10,427. The remaining notional amounts of this interest rate swap were KEURs 12,501 as of December 31, 2003. Of the total fair value of interest rate derivatives included in equity as of December 31, 2003, a net loss of KEURs 240 has been reclassified to the statement of income during the year 2004.


39

In 2002, the Group entered into an interest rate swap agreement starting November 29, 2002 ending November 29, 2005 with a fixed notional principal of KEURs 100,000. This agreement entitled the Group to receive interest at floating rates and pay at a fixed rate of 3.423%. The agreement entered into is to limit the Group’s exposure to increases in interest rates of its credits and loans. As of August 2003, the bullet principal of the outstanding agreement was reduced up to KEURs 50,000. In January 2004, the remaining notional of this IRS was fully cancelled. Additionally, in June 2003 the Group entered into a new agreement ending June 5, 2009. The principal amounted to KEURs 10,799 and would be reduced during the life of the agreement (amortising principal). As of December 31, 2004 the principal amounts to KEURs 8,474. This agreement entitles the Group to receive interest at floating rates and pay at a fixed rate of 2.6775%. As a result of the 2003 year end change of the interest payment structure of the Group’s credits and loans, this structure does not qualify for hedge accounting as of December 31, 2004 and 2003. The fair value of the outstanding agreements as of December 31, 2004 and 2003 is an unrealized gain of KEURs 28 and an unrealized loss of KEURs 858 respectively.

iii) Equity related instruments

• Warrants issued

As a result of certain commercial agreements in the IT services arena and other areas the Group issued during the year 2000 warrants to purchase 10,668,000 of its class “A” shares at exercise prices ranging from EURs 9.09 to EURs 13.40 per share. Under the terms of the respective contractual agreements, the number of warrants is based on the number of class “A” shares issued on the date of the contract. Therefore, any increase in the number of issued class “A” shares could require a corresponding increase in the number of warrants. As of December 31, 2003, these warrants were fully vested.

The warrants mentioned above are classified as follows at December 31:

Number of warrants as of

Cash settlement option

December 31, 2004

December 31, 2003

Yes - 5,900,000 No 1,818,000 4,768,000

1,818,000 10,668,000

During 2004, 8,850,000 of these warrants have expired without being executed. The fair value as of December 31, 2003 amounting to KEURs 59, has been charged to the statement of income during 2004. Expiration date for the remaining warrants is November 2005.


40

The initial fair value of the 1,818,000 warrants, vested in 2001, which were considered to be equity instruments, amounting to KEURs 8,617, was credited directly to equity during the year ended December 31, 2000, in the “Additional paid-in capital” caption.

• Equity swap

In order to manage the exposure to a rise in its share price with respect to the warrants described above, the Group entered during the year 2000 into equity swap agreements which allowed Amadeus to buy 12,812,858 of its class “A” shares at any time until mid-2004 at an average price of EURs 10.32 or settle the difference with the market price in cash. The financing costs relating to these agreements were at interest rates of 2.55% to 2.74% and 2.50% to 3.56% during 2004 and 2003, respectively. These costs are recognized in the “Financial expenses” caption and amount to KEURs 465 and KEURs 478 during 2004 and 2003, respectively.

In November 2003, an equity swap agreement representing 1,812,462 class “A” shares was cancelled. As of December 31, 2004 all agreements have matured and converted into Treasury shares. The current situation of these agreements is as follows:

Number of shares

December 31, 2003 Cancellations December 31,

2004

No interim cash settlement 4,500,000 (4,500,000) - Converted into Treasury shares 6,500,396 4,500,000 11,000,396

11,000,396 - 11,000,396

• Investments in securities

Additionally, as of December 31, 2004, the Group had investments in companies over which it does not have significant influence or control. As of December 31, 2004 and 2003, the Group recorded in the statement of changes in shareholders’ equity an unrealized loss of KEURs 1,545 and an unrealized gain of KEURs 2,651, net of tax, respectively, resulting from changes in fair values of these assets. The fair values of these securities as of December 31, 2004 and 2003 was KEURs 6,818 and KEURs 9,781, respectively, and are recorded in the “Other long-term investments” caption.

b) Credit risk

The Group has no significant concentrations of credit risk. Derivative financial instruments are entered into with financial institutions with high credit ratings. The credit exposure of derivative financial instruments is represented by the net fair values of the contracts, as disclosed above.


41

c) Fair values

The fair values of loans receivable, accounts receivable, cash and cash equivalents and accounts payable approximate to their carrying amounts due to the short-term maturities of these assets and liabilities. The fair value of short and long-term debt is estimated to approximate the carrying amount, as the interest rates applicable are primarily variable. The fair value of obligations under finance leases is estimated using the expected future payments discounted at market interest rates and as of December 31, 2004 and December 31, 2003 was approximately KEURs 109,314 and KEURs 114,911, respectively.

d) SITA INC NV depository certificates

As of December 31, 2004 and 2003 the Group holds 3,214,200 depository certificates of SITA INC NV issued by Stiching “the SITA Information Networking Computing Foundation” (“the Foundation”), representing 3,214,200 shares of SITA INC NV, at a cost of KEURs 3,557, which is included in the “Long-term investments” caption.

The convertibility and saleability of these depository certificates are subject to restrictions imposed by the Foundation under shareholders’ agreements and under the Terms of Administration of the Foundation. Accordingly, the Group believes that it is not practicable to determine with sufficient reliability a fair value of the depository certificates.

19. TAXATION The companies that make up the Group are all individually responsible for their own tax assessments and hence do not file a consolidated tax return. The majority of these companies are open to tax inspection according to local tax laws in each case. Income tax returns cannot be considered definitive until its expiration or acceptance by the Tax Authorities and, independently that fiscal legislation is susceptible to different interpretations, it is estimated that whatever additional fiscal liability may arise as a consequence of an eventual tax inspection will not have a significant effect on the consolidated financial statements considered as a whole. In this regard, in December 2003, the French Tax Authorities issued a tax assessment on Amadeus s.a.s. for the fiscal years 2000 and 2001. Irrespective of the final outcome of the administrative / legal process initiated then by the company, in case that the final tax assessment materialises, it will not have a significant effect on the consolidated financial statements as of December 2004 due to the bilateral tax adjustment to be applied at group level. Additionally, the general tax audit initiated by the Spanish tax authorities over the Company in July 2004 is still in progress. The taxes and fiscal years under review are the Corporate Income Tax for the years 1999 and 2002 and remaining taxes (VAT, Withholding taxes, etc.) for the years 2000 to 2002.


42

Income tax expense was as follows: Year ended December 31 2004 2003 Current 122,866 117,455 Deferred 6,152 4,727 Total 129,018 122,182

The reconciliation between the statutory income tax rate in Spain and the effective income tax rate applicable to the Group as of December 31, is as follows: 2004 2003

% % Statutory income tax rate in Spain 35.0 35.0 Effect of different tax rates in other countries 0.9 0.8 Permanent differences due to goodwill amortization 2.5 3.9 Other permanent differences (2.2) 0.3 Losses with no tax benefit recognition 2.4 1.3 Other 0.1 (1.4)

Effective income tax rate 38.7 39.9

A detail of tax receivables and payables as of December 31 is as follows: 2004 2003 Tax receivable Income tax receivable 15,103 20,929 VAT 22,134 17,751 Others receivable 4,374 3,343 Total 41,611 42,023

Tax payable Income tax payable 32,651 35,181 VAT 8,089 1,223 Other tax payable 11,346 7,779

Total 52,086 44,183


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The Group’s deferred tax balances as of December 31, are as follows:

2004 2003 Assets

Amadeus Operations KG – acquisition 74,706 84,043 Unused tax losses 12,591 27,822 Unused investment tax credits 32,261 25,131 Finance leases 2,571 2,389 Net cancellation reserve 16,207 14,690 Depreciation and amortization 24,214 20,586 Bad debt provision 9,623 8,867 Hedge accounting 978 1,258 Employees benefits 7,202 7,305 IPO cost - 1,352 ICSA - T Liquidation 3,907 - Dividends tax credits 4,165 2,965 Other 10,716 5,988 199,141 202,396 Netting (90,362) (76,281)

108,779 126,115

Liabilities

Unrealized gains - foreign currency and financial instruments 16,668 33,512 Provision for decline in value of investments 73,204 68,618 Depreciation and amortization 40,201 33,717 Capitalization of IT related costs 9,388 5,679 Purchased Intangible Assets 18,922 16,806 Other 6,507 20,177 164,890 178,509 Netting (90,362) (76,281) 74,528 102,228

Acquisitions of new subsidiaries generated KEURs 1,222 of acquired deferred tax assets in 2004 and KEURs 6,570 and KEURs 2,429 of acquired deferred tax liabilities in 2004 and 2003, respectively as well as KEURs 28,728 and KEURs 16,837 of investment tax credits during 2004 and 2003. The European Commission has asked the Spanish Government for the necessary information to analyse the export activity deduction (Investment tax credit) in order to determine whether it constitutes a state grant. The European Commission has not concluded its analysis yet, so the scope of the claim is still not known. With the situation as it stands, it is not possible to objectively determine the impact it may have on the Amadeus Group once the claim is resolved. In these consolidated financial statements, the Group has not recorded any provision for this concept as the Group estimates that the probable outcome will be the cancellation of the rebate in the short-term without the need to pay back rebates already received.


44

Deferred tax assets charged to equity during 2004 were KEURs 1,563 while deferred tax income payable charged to equity during 2003 was KEURs 12,568, mainly relating to cash flow and net equity investment hedges. The following table shows the expiration date of unused tax losses for which no deferred tax asset was recognized in the financial statements mainly due to the uncertainty of their recoverability as of December 31: 2004 2003 Year(s) of expiration 0-1 - 101 1-2 796 611 2-3 1,261 77 3-4 1,710 1,385 4-5 12,728 1,650 Unlimited 211,198 15,166

Total 227,693 18,990

The main increase in 2004 relates to the acquisition of Opodo Limited (UK) .


45

20. EARNINGS PER SHARE The reconciliation of the weighted average number of shares and diluted weighted average number of shares outstanding as of December 31, 2004 and December 31, 2003 is as follows:

Class “A” shares as of

December 31, 2004

Class “A” shares as of

December 31, 2003

Weighted average number of class “A”

shares as of December 31, 2004

Weighted average number of class “A”

shares as of December 31, 2003

Total shares issued 590,000,000 590,000,000 590,000,000 590,000,000

Treasury shares and other

similar equity instruments

(19,105,670) (20,002,843) (19,791,050) (20,156,222)

Total shares outstanding 570,894,330 569,997,157 570,208,950 569,843,778

Dilutive effect of warrants,

stock options and stock grants

2,902,973 722,393 2,470,576 853,736

Total number of diluted shares 573,797,303 570,719,550 572,679,526 570,697,514

Class “B” shares

as of December 31,

2004

Class “B” shares as of

December 31, 2003

Weighted average

number of class “B” shares as of

December 31, 2004

Weighted average

number of class “B” shares as of

December 31, 2003

Total shares issued 219,983,100 219,983,100 219,983,100 219,983,100

Total shares outstanding 171,443,700 219,983,100 210,275,220 219,983,100 Total number of diluted shares 171,443,700 219,983,100 210,275,220 219,983,100

For the purposes of allocating earnings between the class “A” and class “B” shares, the assumption is made that the maximum economic rights attributable to the class “B” shares would be according to the dividend calculation described in Note 13. Additionally, the assumption is made that 100% of the profits are paid out as dividends and the respective portion is allocated to the class “B” shares first and the remainder to the class “A” shares. The calculation of basic earnings per share (rounded to two digits) for the years ended December 31, is as follows:


46

2004 2003 Net income in KEURs 208,032 160,114 Weighted average number of class “A” shares outstanding 570,208,950 569,843,778 Weighted average number of class “B” shares outstanding 210,275,220 219,983,100 Basic earnings per class “A” share, in EURs 0.36 0.28

Basic earnings per class “B” share, in EURs - -

The calculation of diluted earnings per share (rounded to two significant digits) for the years ended December 31, is as follows: 2004 2003 Net income in KEURs 208,032 160,114 Weighted average number of diluted class “A” shares outstanding 572,679,526 570,697,514 Weighted average number of diluted class “B” shares outstanding 210,275,220 219,983,100 Diluted earnings per class “A” share, in EURs 0.36 0.28

Diluted earnings per class “B” share, in EURs - -

21. ADDITIONAL STATEMENT OF CASH FLOWS RELATED DISCLOSURE The components of cash and cash equivalents as of December 31, are as follows: 2004 2003

Cash on hand and balances with banks 39,342 22,507 Short-term investments 65,327 19,594

104,669 42,101

22. AUDITING SERVICES Professional fees for auditing services performed in the Company and its subsidiaries by its auditor Deloitte and related member firms amount to KEURs 1,404 and KEURs 1,248 for the years ended December 31, 2004 and 2003, respectively. Additionally, fees for audit related services, such as due diligence and purchase audits, and other professional services delivered to the Company and its subsidiaries by its auditor Deloitte and related member firms amount to KEURs 393 and KEURs 505 for the year ended December 31, 2004 and KEURs 725 and KEURs 906 for the year ended December 31, 2003, respectively.


47

23. SUBSEQUENT EVENTS Amadeus has increased from 55.36% to 74.02% its stake, for EUR 80.4 million, in the pan-European on-line portal Opodo, with the corresponding proportional dilution of the other shareholders. The transaction was carried out within the context of the acquisition by Opodo of Karavel S.A., Quest and the integration of the wholly owned e-commerce subsidiaries for the Italian and Scandinavian market, of eviaggi.com and Travellink AB, respectively. The acquisition of 100% equity stake in Karavel, S.A. amounts approximately EUR 60 million in cash, plus the resulting amount of additional adjustments to the initial purchase price in relation to the working capital. Karavel is a leading online travel company in France, whose core expertise is in the pre-packaged holiday market. Its wholly owned subsidiary Promovacances, S.A is a well-known and respected brand, established in the French market since 1997, offering great value to travellers to a wide range of destinations and product types. Continuing the strategy of consolidating its global distribution network, Amadeus has increased its shareholding in SAVIA Amadeus, its Spanish national marketing and distribution company (NMC) for Spain and Portugal, from 34 to 100 per cent. SAVIA Amadeus, headquartered in Madrid (Spain), is one of Amadeus' largest markets worldwide in terms of bookings. The cost of the acquisition has been EUR 82.3 million in cash plus the resulting amount of additional adjustments to the initial purchase price in relation to the working capital. As it is of public domain, the major shareholders of the Company (Air France, Iberia and Lufthansa) initiated in the year 2004 a selection process among a group of financial investors for the acquisition of the Company. As already informed to the Spanish Stock Exchange Commission, the major shareholders together with BC Partners and Cinven have reached an agreement to launch a public tender offer over 100 per cent of Amadeus shares at a price of EUR 7.35 per share, with the final objective of de-listing the Company from the Stock Market. At this agreed price, the value of the Group amounts to EUR 4,340 million. As there is no more available information from these private negotiations, we cannot foresee the potential accounting impacts derived from this transaction. The stock option plans, according to their rules, would become immediately vested in the case of a change of control. The holders would have up to six months to exercise their options (Note 16).

Amadeus Global Travel Distribution, S.A. Auditors’ Report, Consolidated Annual Accounts and Directors’ Report for the Years Ended December 31, 2004 and 2003 prepared in accordance with Spanish GAAP

“Free translation of an audit report and of consolidated annual accounts originally issued in Spanish and prepared in accordance with generally accepted accounting principles in Spain. In the event of a discrepancy, the Spanish-language version prevails. Certain accounting practices applied by the Group that conform with generally accepted accounting principles in Spain may not conform with the generally accepted accounting principles in other countries.”

CERTIFICATION


C E R T I F I E S

That the consolidated annual accounts and the consolidated Directors'report for theyear ended as of December 31, 2004, attached to this Certification, are a true copy of theEnglish translation of the consolidated annual accounts and the consolidated Directors'reportoriginally issued in Spanish, drawn-up by the Board of Directors of AMADEUS GLOBALTRAVEL DISTRIBUTION, S.A., in the meeting held in Madrid, on 29 March 2005, inaccordance with Article 171 of the Spanish Corporations Law, for submission to the resolutionof the Ordinary General Assembly of Shareholders of AMADEUS GLOBAL TRAVELDISTRIBUTION, S.A.


THE yiCE-SECRETARY


See the accompanying notes to the consolidated annual accounts

ASSETS 2004 2003 Fixed assets 927,332 962,124 Start-up expenses (Note 5) - 3,864 Intangible fixed assets (Note 6) 498,049 484,031

Research and development expenses 4,630 984 Patents, licences and trademarks 79,903 88,673 Intangible rights 274,748 272,093 Rights on assets acquired under finance leases 159,796 160,330 Software 428,135 371,793 Other intangibles 72,282 41,688 Accumulated amortization (521,445) (451,530)

Tangible fixed assets (Note 7) 159,973 146,281

Land and buildings 3,746 2,817 Furniture and office equipment 30,180 29,279 EDP equipment 398,962 367,322 Other fixed assets 84,896 76,839 Accumulated amortization (357,811) (329,976)

Investments (Note 8) 184,594 253,652

Investments – equity method 17,586 27,037 Loans to related companies 15,259 16,979 Long-term securities portfolio 11,565 44,923 Other loans 7,296 57,892 Other long-term assets 34,388 16,008 Long-term tax receivable (Note 23.4) 113,025 111,345 Provisions (14,525) (20,532)

Treasury shares (Note 13) 84,716 74,296 Goodwill (Note 9) 478,245 433,109 Deferred expenses (Note 10) 51,287 58,215 Current assets 558,998 429,636 Receivables 408,858 346,380

Trade accounts receivable (Note 11) 362,989 285,098 Receivables from related companies 5,431 8,750 Accounts receivable – other (Note 12) 12,875 16,491 Employee advances 967 468 Tax (Note 23.4) 91,010 84,210 Provisions for doubtful accounts (64,414) (48,637)

Short-term financial investments 76,968 30,155

Loans to related companies 1,190 88 Other loans 1,220 3,541 Deposits 74,558 26,526

Cash 39,342 22,507 Prepaid expenses 33,830 30,594 TOTAL 2,015,862 1,883,084



SHAREHOLDERS' EQUITY AND LIABILITIES 2004 2003

Shareholders' equity (Note 13) 1,063,930 903,141

Share capital 23,044 27,898 Additional paid-in capital 425,850 436,830 Holding company reserves:

Legal reserve 7,468 7,468 Treasury share reserve 109,499 98,519 Other reserves 11,565 7,196

Prior years´ results 222,301 123,701 Reserves in consolidated companies 84,117 84,649 Cumulative translation adjustments (CTA) (36,281) (33,247) Net profit attributable to the Holding company 216,367 150,127

Minority Interests 10,037 1,029

Negative goodwill - 367

Deferred income 87,571 108,245

Unrealized exchange gains 13,706 11,212 Other deferred income 73,865 97,033

Provisions for liabilities 9,814 11,564

Pension and other related provisions (Note 14) 5,285 4,937 Other provisions 4,529 6,627

Long-term liabilities 275,714 323,106

Debt with financial institutions (Note 15) 137,971 149,056 Long-term tax (Note 23.4) 107,609 109,311 Other liabilities (Note 16) 30,134 64,739

Short-term liabilities 568,796 535,632

Debt with financial institutions (Note 15) 21,401 87,899 Accounts payable – related companies 9,290 12,578 Trade accounts payable (Note 17) 334,016 258,925 Non-trade creditors

Tax (Note 23.4) 98,421 80,627 Other accounts payable (Note 12) 24,963 30,799 Personnel related 73,582 60,060

Accruals 7,123 4,744 TOTAL 2,015,862 1,883,084



DEBIT 2004 2003 Expenses Personnel expenses

Salaries 307,054 299,284 Social benefits 96,278 86,728

Amortization and depreciation charges 174,917 179,486 Net change in short-term provisions 17,510 13,962 Other operating expenses (Note 19.3)

External services 477,119 412,177 Other 664,698 634,471

Total operating expenses 1,737,576 1,626,108

Operating income 376,923 361,472

Financial expenses with third parties 3,174 11,094 Finance lease expenses 5,154 5,620 Other financial expenses 3,788 1,213 Exchange losses 4,057 4,138

Total expenses from financial activity 16,173 22,065

Goodwill amortization (Note 9) 83,427 85,376 Share in losses from companies under the equity method (net) - 4,680

Profits before extraordinary items 289,871 255,242

Extraord inary expenses (Note 22) 25,121 13,966

Net extraordinary income 36,210 3,628

Consolidated profit before tax 326,081 258,870

Corporate income tax (Note 23) 121,386 108,718

Net consolidated profit for the period 204,695 150,152

Profit for minority shareholders 11,672 -

Net income for the period 216,367 150,127



CREDIT 2004 2003 Revenues Trade revenues

Services rendered (Note 19.1 and 19.2) 2,037,071 1,919,691 Expenses capitalized – intangible assets 57,482 55,393 Other operating income (Note 19.1 and 19.2) 19,946 12,496

Total operating revenue 2,114,499 1,987,580

Financial income from companies under equity method 109 44 Other financial income 379 2,984 Profit from money market investments 5,966 1,945

Total income from financial activity 6,454 4,973

Net loss from financial activity 9,719 17,092

Share in earnings from companies under the equity method (net) 5,727 - Negative Goodwill amortization 367 918 Extraordinary income (Note 22) 61,331 17,594

Losses from minority shareholders - 25

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF EUROS - KEURs)


2004 2003 Cash flows from operating activities

Operating income 376,923 361,472 Adjustments for:

Depreciation and amortization 174,917 179,486 Operating income before changes in working capital 551,840 540,958

Accounts receivable (4,843) 19,860 Other current assets (46,248) (16,543) Accounts payable (24,721) (19,934) Provision for liabilities (1,750) (2,497) Deferred income (1,068) 2,273 Other creditors (1,354) (9,236)

Cash provided from operating activities 471,856 514,881 Taxes paid (105,621) (61,825)

Net cash provided from operating activities 366,235 453,056

Cash flows from investing activities

Acquisitions to tangible assets (66,967) (42,972) Acquisitions to intangible assets (85,860) (98,651) Investment in subsidiaries and associates, net of cash acquired (55,884) (83,957)

Interest received 4,631 1,813

Sundry investments and deposits (4,257) (8,529) Loans to third parties (4,367) (55,652)

Loans to affiliates (585) (4,941) Cash proceeds collected / (paid) from derivative agreements 3,889 12,225 Disposals of sundry investments 3,663 2,689 Dividends received 7,828 9,076 Proceeds obtained from disposal of fixed assets 3,598 4,945

Net cash used in investing activities (194,311) (263,954)

Cash flows from financing activities

Proceeds from borrowings 32,864 300,598 Repayments of borrowings (106,076) (427,819) Interest paid (12,533) (17,928) Redemption of Class “B” shares (485) - Acquisition of Treasury shares (63,086) (96)

Disposals of Treasury shares 39,215 224 Dividends paid (35,000) (29,998) Payments of finance lease liabilities (10,419) (9,756)

Net cash used in financing activities (155,520) (184,775)

Effect of exchange rate changes on cash and cash equivalent 431 941 Net increase (decrease) in cash 16,835 5,268 Cash at the beginning of the period 22,507 17,239 Cash at the end of the period 39,342 22,507

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 (EXPRESSED IN THOUSANDS OF EUROS - KEURs)

1

1. ACTIVITY Amadeus Global Travel Distribution, S.A. (“the Company”) was created in Madrid on July 14, 1988. The Amadeus Group (“the Group”) is defined as the Company consolidated with its subsidiaries. The Group is a leader in information technology, serving the marketing, sales and distribution needs of the global travel and tourism industry. Its worldwide data network and database of travel information are used by travel agencies and airline sales offices. Today, travel agencies and airline offices can make bookings with airlines, hotel chains, car rental companies, and groups or providers such as ferry, rail, cruise, insurance and tour operators. The Group provides the above-mentioned services through a computerised reservation system (“CRS”) and through its e-commerce channel of distribution. Additionally, the Group provides information technology (“IT”) services and solutions to the airline industry which includes inventory management and passenger departure control. The Company’s share and ownership structure are described in Note 13. Due to the Group’s activity, it does not have any responsibilities, expenses, assets, contingencies or liabilities of environmental nature which may have a significant impact in the net equity, finance position or net income of the Group. As a result, the Group does not present any type of breakdown with regards to environmental issues in the notes to the consolidated annual accounts.


2

Below is a summary o f the consolidated Group companies as of December 31, 2004 and 2003:

Name Type of company Country Activity

% of direct participation (3) (11) 31.12.04 31.12.03

% of indirect participation (3) (11)

31.12.04 31.12.03

Date of acquisition

or creation (2)

Cost of direct investment (8)

31.12.04 31.12.03 Fully consolidated companies Airline Automation, Inc. (1) Inc. U.S.A. I.T - - 100% 100% 07.11.03 - - Amadeus America, S.A. Sociedad Anónima Argentina Regional support 100% 100% - - 28.04.00 435 435 Amadeus Americas, Inc. Inc. U.S.A. Regional support 100% 100% - - 17.04.95 215,991 215,991 Amadeus Argentina, S.A. Sociedad Anónima Argentina Distribution 80% 80% - - 06.10.97 10,701 10,701 Amadeus Asia, Ltd. Limited Thailand Regional support 100% 100% - - 24.11.95 1,031 1,031 Amadeus Austria Marketing GmbH GmbH Austria Distribution 100% 100% - - 13.02.88 3,001 1,544 Amadeus Benelux, N.V. N.V. Belgium Distribution 100% 100% - - 11.07.89 2,143 2,143 Amadeus Bolivia SRL SRL Bolivia Distribution 100% 100% - - 14.03.02 252 252 Amadeus Brasil, Ltda. (11) Limited Brazil Distribution 76% 34% - - 30.06.99 18,597 15,650 Amadeus Bulgaria EOOD (11) Limited Bulgaria Distribution 100% 49% - - 17.11.98 735 71 Amadeus Central and West Africa,

S.A. S.A. Ivory Coast Distribution

100% 100% - - 03.10.01 1,617

108

Amadeus Data Processing GmbH GmbH Germany Data processing 100% 100% - - 01.04.88 275,484 275,484 Amadeus Denmark A/S (5) A/S Denmark Distribution - - 100% 100% 31.08.02 - - Amadeus France, S.N.C. (11) SNC France Distribution 100% 34% - - 27.04.98 127,557 41,549 Amadeus France Services S.A. (11)

(12) S.A. France Distribution

- - 70.55% 19.5% 27.04.98 - - Amadeus GDS LLP LLP Kazakhstan Distribution 100% 100% - - 08.01.02 171 171 Amadeus GDS (Malaysia) Sdn. Bhd. Sdn. Bhd. Malaysia Distribution 100% 100% - - 02.10.98 122 122 Amadeus GDS Singapore Pte. Ltd. Pte. Ltd. Singapore Distribution 100% 100% - - 28.02.98 205 205 Amadeus Germany GmbH GmbH Germany Distribution 100% 100% - - 07.08.99 205,585 205,585 AMADEUSGLOBAL Ecuador, S.A. Sociedad Anónima Ecuador Distribution 100% 100% - - 12.01.96 49 49 Amadeus Global Travel Distribution,

(Malta) Limited Limited Malta Distribution

100% N/A - - 17.02.04 90 - Amadeus Global Travel Distribution,

S.A. Sociedad Anónima Spain Group management

N/A N/A N/A N/A 14.07.88 N/A N/A Amadeus Global Travel Israel Ltd. Limited Israel Distribution 90% 90% - - 23.03.00 1,912 1,912 Amadeus GTD Australia Pty. Ltd. Pty. Ltd. Australia Distribution 100% 100% - - 18.11.97 18,842 18,842 Amadeus GTD Inc. (1) Inc. U.S.A. Distribution - - 100% 100% 28.04.95 - - Amadeus GTD Ltd. Limited Kenya Distribution 100% 100% - - 03.07.03 195 195


3




31.12.04 31.12.03

Date of acquisition

or creation (2)


31.12.04 31.12.03 Amadeus GTD Southern Africa Pty.

Ltd. Pty. Ltd South Africa Distribution

100% 100% - - 01.01.03 593 593 Amadeus Hellas, S.A. S.A. Greece Distribution 100% 100% - - 30.12.92 4,124 4,124 Amadeus Honduras, S.A. (1) Sociedad Anónima Honduras Distribution - - 100% 100% 17.03.98 - - Amadeus Hong Kong, Ltd. Limited Hong Kong Distribution 100% 100% - - 21.08.03 462 -

Amadeus Magyaroszag Kft (Ltd.) Korlatolf Felelossegu

Tarsasag (Ltd.) Hungary Distribution 100% 100% - - 13.10.93 480 480 Amadeus Marketing (Ghana), Ltd. Limited Ghana Distribution 100% 100% - - 14.11.00 197 102 Amadeus Marketing Ireland, Ltd. Limited Ireland Distribution 100% 100% - - 20.06.01 400 400 Amadeus Marketing Italia, S.P.A. Societá per Azioni Italy Distribution 100% 100% - - 18.12.92 3,714 3,714 Amadeus Marketing Nigeria, Ltd. Limited Nigeria Distribution 100% 100% - - 18.05.01 266 266 Amadeus Marketing Philippines, Inc. Inc. Philippines Distribution 100% 100% - - 09.06.97 1,879 173 Amadeus Marketing Romania, S.R.L. S.R.L. Romania Distribution 100% 100% - - 22.01.03 470 470 Amadeus Marketing Schweiz, A.G. A.G. Switzerland Distribution 100% 100% - - 09.06.94 58 58 Amadeus Marketing (U.K.), Ltd. Limited U.K. Distribution 100% 100% - - 13.07.88 5,517 5,517 Amadeus México S.A. de C.V. (1) S.A. Mexico Distribution - - 100% 100% 13.02.95 - - Amadeus North America LLC. (1) Limited Liability

Company U.S.A. Distribution - -

100% 100% 28.04.95 -

-

Amadeus Norway, A.S. (5) AS Norway Distribution - - 100% 100% 31.08.02 - - Amadeus Paraguay, S.R.L. S.R.L. Paraguay Distribution 100% 100% - - 13.03.95 103 103 Amadeus Perú, S.A. Sociedad Anónima Peru Distribution 100% 100% - - 12.10.95 534 534 Amadeus Polska, Sp.zo.o. Sp.zo.o Poland Distribution 100% 100% - - 17.12.92 5,507 5,507 Amadeus Receptionsservice AB (5) (14)

AB Sweden Distribution - - 100%

100% 31.08.02 -

-

Amadeus Rezervasyon Dagitim Sistemleri, AS Anonim Sirketi Turkey Distribution 100% 100% - - 11.05.94 2,110 2,110

Amadeus sas Société par Actions Simplifiée France

Software development and product definition 100% 100% - - 02.05.88 7,748 7,748

Amadeus Saudi Arabia Limited (13) Limited Saudi Arabia Distribution 95% N/A 5% - 06.05.04 420 N/A Amadeus Scandinavia AB Limited Sweden Distribution 100% 100% - - 31.08.02 132,171 132,171

Amadeus Services, Ltd. Limited U.K. Software

development 100% 100% - - 20.07.00 82 82 Amadeus Services Asia-Pacific, Pty.

Ltd. Pty. Ltd. Australia Software

development 100% 100% - - 12.12.00 55 55 Amadeus Sweden AB (5) AB Sweden Distribution - - 78.25% 78.25% 31.08.02 - -


4




31.12.04 31.12.03

Date of acquisition

or creation (2)


31.12.04 31.12.03 Amadeus Technology Center Nordic

AB (15) Limited Sweden Software

development 100% - - 100% 30.11.02 1,143 - Americs AB (5) AB Sweden Distribution - - 100% 100% 31.08.02 - - CRS Amadeus América, S.A. Sociedad Anónima Uruguay Regional support 100% 100% - - 22.07.93 802 802 e-Travel, Inc. (1) (17) Inc. U.S.A. E-commerce - - - 100% 27.07.01 - - Eviaggi.com, S.P.A. Societá per Azioni Italy E-commerce 100% 100% - - 01.10.01 6,917 6,019

HDS (11) (10) Inc. U.S.A. Software

development - - 96.1% 30% 10.09.03 - -

Hogatex Allemagne (11) (10) GmbH Germany Software

development - - 96.1% 30% 10.09.03 - -

Hogatex Austria (11) (10) GmbH Austria Software

development - - 96.1% 30% 10.09.03 - -

Hogatex Finland (11) (10) Oy Finland Software

development - - 96.1% 30% 10.09.03 - -

ICSA-T Australia, Pty. Ltd. (4) (14) Pty. Ltd. Australia Software

development - - 100% 100% 30.11.02 - -

ICSA-T France, S.A.R.L. (4) (14) S.A.R.L. France Software

development - - 100% 100% 30.11.02 - -

ICSA-T US LLC (1) (17) Limited Liability

Company U.S.A Software

development - - 100% 100% 01.03.00 - -

ICSA-T N.V. (14) N.V. Belgium Software

development 100% 100% - - 07.08.98 14,466 14,466

ICSA-T Travel Software GmbH (4) (14) GmbH Switzerland Software

development - - 100% 100% 30.11.02 - -

ICSA-T UK, Ltd. (4) (14) Limited U.K. Software

development - - 100% 100% 30.11.02 - -

Moneydirect Limited NZ (16) Limited New Zealand Software

development - - 100% 100% 03.12.97 - -

Moneydirect Pty. Ltd. (16) Limited Australia Software

development - - 100% 100% 03.12.97 - -

NMC Eastern European CRS, B.V. B.V. The

Netherlands Distribution

100% 100% - - 30.06.98 18 18 Opodo GmbH (9) GmbH Germany E-commerce - - 55.36% - 01.07.04 - - Opodo Limited Limited U.K. E-commerce 55.36% - - - 01.07.04 62,000 - Opodo S.A.R.L. (9) S.A.R.L. France E-commerce - - 55.36% - 01.07.04 - -


5




31.12.04 31.12.03

Date of acquisition

or creation (2)


31.12.04 31.12.03

Optims Asia (11) (10) Ltd Singapore Software

development - - 96.1% 30% 10.09.03 - -

Optims S.A. (11) Société Anonyme France Software

development 96.1% 30% - - 10.09.03 27,261 5,986

Optims Italia (11) (10) S.R.L. Italy Software

development - - 96.1% 30% 10.09.03 - -

Optims U.K. (11) (10) Ltd. U.K. Software

development - - 96.1% 30% 10.09.03 - -

Otedis (11) (10) Société par Actions

Simplifiée France Software

development - - 96.1% 30% 10.09.03 - -

Prologest (11) (10) S.A. Spain Software

development - - 96.1% 30% 10.09.03 - - SIA Amadeus Latvija SIA Latvia Distribution 100% 100% - - 31.08.02 906 906 Sistemas de Reservaciones CRS de Venezuela, C.A. C.A. Venezuela Distribution 100% 100% - - 14.11.95 879 363 Travellink AB (11) AB Sweden E-commerce 85.1% 35.1% - - 09.04.01 15,397 11,763 UAB Amadeus Lietuva UAB Lithuania Distribution 100% 100% - - 31.08.02 1,265 1,265 Vacation.com, Inc. (1) Inc. U.S.A. Distribution - - 100% 100% 15.11.00 - - Vacation.com Canada, Inc. (1) Inc. Canada Distribution - - 100% 100% 15.11.00 - - Vivacances S.A. Société Anonyme France E-commerce 67.5% 67.5% - - 09.08.02 5,350 5,350 1,188,009 1,003,185 Investments carried under the equity

method

1Travel.com, Inc. (1) Inc. U.S.A. E-commerce - - 38.9% 38.9% 27.04.00 - - AlphaNet BVBA (4) (14) BVBA Belgium E-commerce - - 28% 28% 30.11.02 - - Amadeus Algerie, S.A.R.L. S.A.R.L. Algeria Distribution 40% 40% - - 27.08.02 90 90

Amadeus Gulf LLC Limited Liability

Company

United Arabian Emirates Distribution 49% 49% - - 27.12.03 84 84

Amadeus Kuwait Company W.L.L. W.L.L. Kuwait Distribution 35% 35% - - 06.08.03 309 309 Amadeus Marketing CSA, s.r.o. s.r.o. Czech Rep. Distribution 35% 35% - - 19.09.97 6 6


6




31.12.04 31.12.03

Date of acquisition

or creation (2)


31.12.04 31.12.03 Amadeus Maroc, S.A.S. SAS Morocco Distribution 30% 30% - - 30.06.98 201 201 Amadeus Qatar W.L.L. W.L.L. Qatar Distribution 40% 40% - - 03.07.01 145 145 Amadeus Sudani, Co. Ltd. Limited Sudan Distribution 40% 40% - - 21.09.02 62 62 Amadeus Tunisie, S.A. Société Anonyme Tunisia Distribution 30% 30% - - 06.09.99 115 115

Atinera LLC (1) (7) (14) Limited Liability

Company U.S.A. Software

development - - 50% 50% 06.12.00 - - Comtec (Europe) Limited Limited U.K. I.T. 20% - - - 05.02.04 2,968 -

ITA (Internet Travel Agent) Inc. (1) Inc. U.S.A. Software

development - - 22.3% 22.3% 23.08.98 - - Jordanian National Touristic Marketing

Private Shareholding Company Limited Jordan Distribution

50% - - - 19.05.04 178 - PT Amadeus Indonesia Foreign Investment Co. Indonesia Distribution 50% 50% - - 10.10.03 109 109 Qivive GmbH (6) (14) GmbH Germany I.T. - - 33.3% 33.3% 26.02.03 - - Red Universal de Marketing y Booking

On Line, S.A. (“RUMBO”) Sociedad Anónima Spain E-commerce 50% 50% - - 09.03.00 7,500 7,500 Sistemas Automatizados de Agencias

de Viajes, S.A. (“SAVIA”) Sociedad Anónima Spain Distribution 34% 34% - - 23.09.98 21,953 21,953 Sociedad Anato-Avianca de

Reservaciones de Servicios Turísticos Savia Ltda. Limited Colombia Distribution 50% 50% - -

25.07.02 1,753 1,753

Stellar Access, Inc. (1) (7) (14) Inc. U.S.A E-commerce - - 20% 20% 01.12.00 - - Topas Co. Ltd. Limited South Korea Regional CRS 32% 32% - - 07.06.99 13,128 13,128 Travel.com.au Ltd. Limited Australia E-commerce 14.9% 16.7% - - 21.12.00 5,390 5,390 Traventec Limited (6) Limited Ireland I.T. - - 45% 45% 26.02.03 - - 53,991 50,845

(1) The participation in these companies is held through Amadeus Americas, Inc . formerly known as Amadeus NMC Holding Inc until 02.08.04. (2) In case of various investments or capital increases, the date of acquisition or creation refers to the first one. (3) In certain cases companies are considered to be wholly -owned subsidiaries, even though due to local statutory obligations they are required to have more than one shareholder or a specific percentage of the capital stock

owned by citizens and/or legal entities of the country concerned. These shareholders are not entitled to any economic rights. (4) The participation in these companies is held through ICSA-T N.V. Business activity performed by ICSA-T N.V. and its subsidiaries is carried out by other Group Companies. No relevant impact has been recorded in 2004,

related to the liquidation process of ICSA -T N.V. and its subsidiaries. (5) The participation in these companies is held through Amadeus Scandinavia AB. (6) The participation in these companies is held through Amadeus Germany GmbH .


7

(7) This company ceased operations in 2002. (8) Book value of the investment as per the financial statements of the parent company at December 31, 2004 and 2003, before the provision for decline in value of long-term financial investments. Except for the NMC Amadeus

Global Travel Israel Ltd, w hich is owned by the parent company with 95% and by the NMC Eastern European CRS, B.V with 5%. (9) The participation in these companies is held through Opodo Limited. (10) The participation in these companies is held through Optims S.A. (11) The percentage of participation as of December 31, 2003 has been presented for comparative purposes. The applicable accounting method applies based on the voting rights in each period. (12) The participation in this company is held through Amadeus France, S.N.C. (13) The indirect participation in this company is held through NMC Eastern European CRS, B.V. (14) These companies are under liquidation process. (15) Previously known as ICSA -T Scandinavia AB. (16) The participation in this company is held through Amadeus GTD Australia Pty. Ltd. (17) This company has merged during 2004 with Amadeus Americas, Inc.


8

2. BASIS OF PRESENTATION AND COMPARABILITY OF THE INFORMATION INCLUDED IN THE CONSOLIDATED ANNUAL ACCOUNTS

a) Basis of presentation

i) General information

The consolidated annual accounts have been obtained from the accounting records of the companies of the Group and prepared in accordance with generally accepted accounting principles in Spain (“Spanish GAAP”), applied on a consistent basis with the prior year. Although under Spanish accounting legislation for consolidation, companies are not obliged to present statements of cash flow, the Group has voluntarily included this information following presentation guidelines prescribed by International Financial Reporting Standards (“IFRS”).

ii) International Financial Reporting Standards financial statements

In addition to the consolidated annual accounts prepared in accordance with Spanish GAAP, the Group prepares consolidated financial statements under IFRS. As a consequence of the difference in accounting principles, the consolidated net equity reflected under Spanish GAAP exceeds the net equity reflected under IFRS by approximately EURs 132.2 million as of December 31, 2004 and the net income reflected under Spanish GAAP is higher than the net income under IFRS by approximately EURs 8.3 million for the year ended December 31, 2004. As of and for the year ended December 31, 2003 net equity reflected under Spanish GAAP exceeded the net equity reflected under IFRS by approximately EURs 145.4 million and the net income reflected under Spanish GAAP was lower than the IFRS net income by approximately EURs 10.0 million. The main differences as of and for the years ended December 31, 2004 and 2003 are due to the difference in accounting methods used in the acquisition in 1997 of Amadeus Data Processing and Co. KG (“Amadeus Operations KG”), the accounting for Treasury shares and equity related instruments.

iii) Use of estimates

Use of estimates and assumptions, as determined by management, is required in the preparation of consolidated annual accounts in conformity with Spanish GAAP. Actual results could differ from those estimates and assumptions.

b) Comparison of information

For comparative purposes, the Group presents, together with the amounts included in the balance sheet, the statements of income and of cash flow, and the explanatory notes as of and for the year ended December 31, 2004, those as of and for the year ended December 31, 2003.

Certain amounts of the annual accounts for the prior period have been reclassified to conform with 2004 presentation.


9

c) Changes in the consolidation scope

Note 1 presents the main changes in the companies which were consolidated or carried under the equity method by the Group during 2004 and the respective amounts invested by the Group, as well as the accounting method used in each case. Additionally, Note 9 includes a detail of the movements in Goodwill.

3. PROPOSED DISTRIBUTION OF THE HOLDING COMPANY’S RESULTS The proposed distribution of 2004 earnings that the Board of Directors of the Company will submit to the General Shareholders’ Meeting for approval, and the approved distribution for 2003, are as follows (in EURs): 2004 2003

Amount to be distributed

Profit for the year 207,868,453.20 150,026,789.05

Distribution: - to dividend - 35,000,000.00 - to other reserves 207,868,453.20 115,026,789.05 207,868,453.20 150,026,789.05

4. ACCOUNTING PRINCIPLES The main accounting principles used in the preparation of the consolidated annual accounts are as follows: a) Principles of consolidation The consolidated annual accounts include all companies over which the Group has

control. Intercompany balances and transactions between Group companies have been eliminated. Associates (investees in which the Group has significant influence) and joint-ventures have been accounted for using the equity method. Subsidiaries are not consolidated when control is temporary, this is the case when a subsidiary is acquired with the intention of disposing of it in the following twelve months, instead they are accounted for in the “Long-term securities portfolio” caption.

b) Foreign currency transactions Foreign currency transactions are accounted for at the exchange rates prevailing at the

date of the transactions. Gains and losses resulting from the settlement of such


10

transactions and losses from the translation at year-end of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of income. In the majority of cases unrealized exchange gains are not credited to the income of the period, but are accounted for as a liability in the “Unrealized exchange gains” caption.

c) Currency translation The financial statements of the individual Group companies are denominated in each

company’s local currency. For consolidation purposes: the assets and liabilities are translated into EURs at year-end rates; components of the statement of income are translated at average exchange rates for the year; and share capital, additional paid-in capital and reserves are translated at historical rates. Any exchange differences arising as a result of this translation, for majority interests in subsidiaries and interests in associates, are shown together as a separate component of shareholders’ equity in the “Cumulative translation adjustments” caption. In the case of translation differences related to minority interests, these are included in the “Minority interests” caption of the balance sheet.

d) Related companies The Group considers companies over which it exercises a significant influence as related

companies. e) Start-up expenses This caption includes expenses, commissions and taxes related to the Public Offering for

Subscription of Shares of October 1999. These expenses are amortized on a straight-line basis over a period of five years.

f) Intangible fixed assets Intangible assets are recorded at cost and reviewed periodically and adjusted for any

diminution in value as noted in paragraph k). These assets include the following:

• Research and development expenses – These consist primarily of those expenses incurred by the Group in connection with the development of new investigations which leads to making new products or improving existing products. Capitalized costs are amortized over a 3 - 5 year period, as from the date the project becomes a functional business.

• Patents, licences and trademarks – These include the cost of acquiring licences for

CRS and IT services software developed outside the Group as well as acquired trademarks. These assets are being amortized applying the straight-line method over 3 -10 years.

• Intangible rights – These represent the acquisition costs of contracts that give the

Group the right to bill for future services, as well as capitalizable costs related to travel agency incentives. These costs are being amortized applying the straight-line method, based on the expected service life of the contract, over 3 -10 years.

• Rights on assets acquired under finance leases – Rights derived from finance lease agreements, when there are no reasonable doubts that the purchase option will be


11

exercised, are recorded as intangible assets at the present value of the asset. The total of payments due plus the purchase option is recorded as a liability. The difference between both amounts relates to interest expense and is recorded as deferred expenses and subsequently charged to the statement of income based on financial criteria. Rights are amortized over the estimated useful life of the asset acquired. Once the purchase option is exercised, the value of the rights recorded and its related accumulated amortization are transferred to tangible fixed assets.

• Software – The value of these assets includes amounts incurred to obtain the

ownership or rights to use software, as well as amounts incurred by the Group to develop software applications. These amounts are capitalized once technical feasibility is established, it is reasonably anticipated that the cost will be recovered through future benefits and the cost of the assets can be measured reliably. Software is amortized applying the straight-line method over 3 - 10 years. Software maintenance costs are charged to expense as incurred.

• Other intangibles - These consist of Purchased Technology that represents the

capability obtained by the practical application of knowledge, processes, methods, tools and systems to serve the market need more efficiently. These assets are amortized applying the straight-line method over 3 - 15 years based on the expected service life.

g) Tangible fixed assets Tangible fixed assets are recorded at the lower of cost or recoverable value and are

depreciated applying the straight-line method over the estimated useful lives of the assets:

Buildings.................................................................................................50 years Furniture and office equipment .........................................................10-15 years EDP equipment.....................................................................................2-5 years Other tangible fixed assets .................................................................3-20 years


h) Investments Investments in marketable short and long-term fixed-income and equity securities are

recorded at the lower of cost or market. i) Treasury shares Treasury shares designated to cover specific commitments, are stated at the lower of cost

(which includes the total amount paid upon acquisition plus expenses related to the transaction), market value or exercise price. Treasury shares not designated to cover specific commitments are recorded at the lower of cost, market or net book value. The difference between cost and market value is accounted for in the statement of income, while the difference between the market and the net book value is recorded against reserves.


12

In accordance with Article 79.3 of the Spanish Companies Act, an allocation has been made to the corresponding restricted reserve for the cost of Treasury shares, before any required provision.

j) Goodwill Goodwill represents the excess when comparing the purchase price with the fair value of

net assets acquired and is amortized applying the straight-line method over 4 - 10 years. Amortization is carried out over 10 years in the case of acquisitions with high strategic value and long-term impact on the Group’s business.

When settlement of purchase consideration is deferred, the cost of the acquisition includes the net present value of this deferred consideration. In cases where the exact amount of deferred consideration is contingent on future events, the amount of the deferred consideration is estimated at the acquisition date and recorded as liability. Accumulated unrealized gains from any subsequent remeasurement of the deferred consideration are recorded as deferred income, while accumulated unrealized losses are recorded in the statement of income.

k) Impairment of non-current assets The Group periodically evaluates the carrying value of fixed assets and goodwill for

potential impairment. As a result of this evaluation, the corresponding provision is recognized whenever the carrying amount of an asset exceeds its recoverable amount by reducing the carrying amount of the asset to its recoverable amount with the corresponding charge to the statement of income.

l) Deferred expenses Deferred expenses are valued as the difference between the settlement amount and the

present value of the liability. These deferred expenses are charged to income based on financial criteria.

m) Negative goodwill This represents the excess when comparing the fair value of net assets acquired with the

purchase price, and is treated similar to deferred income. It is amortized applying the straight-line method over 5 years.

n) Pension and other post-retirement obligations

The Group operates a number of defined benefit and defined contribution pension plans. Liabilities of the Group arising from defined benefit obligations are determined using the projected unit credit method. Independent actuarial valuations are carried out annually, for the largest plans and on a regular basis for other plans. The actuarial assumptions used to calculate the benefit obligations vary according to the economic conditions of the country in which the plan is located. Such plans are either externally funded, with the assets of the schemes held separately from those of the Group, or unfunded with the related liabilities carried in the balance sheet.


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For the funded defined benefit plans, the deficit or excess of the fair value of plan assets over the present value of the defined benefit obligation is recognised as a liability or an asset in the balance sheet, taking into account any unrecognised actuarial gains or losses and past service cost. However, an excess of assets is recognised only to the extent that it represents a future economic benefit which is available to the Group, for example in the form of refunds from the plan or reductions in future contributions. Actuarial gains and losses arise mainly from changes in actuarial assumptions and differences between actuarial assumptions and what has actually occurred. They are recognised in the statement of income, over the remaining working lives of employees, only to the extent that their net cumulative amount exceeds 10% of the greater of present value of the obligation or of the fair value of plan assets. For defined benefit plans the actuarial cost charged to the statement of income consists of current service cost, interest cost, expected return on plan assets and past service cost as well as actuarial gains or losses to the extent that they are recognised. Contributions made to defined contribution plans are charged to the statement of income as incurred.

o) Other provisions and contingencies Risks in connection with claims, trials, indemnities and contingencies considered probable

are accrued in accordance with a reasonable estimate of their amount. p) Revenue recognition The Group receives fees from travel providers for providing electronic travel and

reservation services through its CRS. The fee amount is dependent upon the usage and the level of functionality at which the provider participates. Revenue from airline reservations is recognized based on the number of bookings, net of cancellations made and an allowance for future cancellations, or the number of CRS transactions depending on the option contractually selected on an annual basis by the applicable airlines.

Revenue from airline IT services and bookings of car rentals and hotel rooms is recognized at the time the reservation is used by the end customer. Revenue for other services to travel agencies, airlines and others is recognized in the month of service.

q) Stock incentive plans The Group accounts for its obligations under stock incentive plans as follows:

• Compensation expense is recognized for stock options, if the fair market value of the underlying stock at the date of the grant is above the exercise price. In this case, the expense is accrued over the vesting period of these rights (currently four years).

• Compensation expense relating to stock grants (i.e. their market value at the grant

date) is recognized over the vesting period of these rights.


14

r) Financial instruments


The Group uses derivative financial instruments to hedge certain currency and interest rate exposures. The fair value of these derivatives is the market value for listed instruments or valuation based on option pricing models and discounted cash flow calculations for unlisted instruments. For accounting recognition purposes, the following policy has been applied:

• Cash flow hedges: No remeasurement to fair value is performed until the

committed or forecasted transaction occurs (except for monetary assets or liabilities which are designated as hedges of future cash flows, in which case effective gains and losses resulting from remeasurement are deferred until the future forecasted transaction occurs). When the underlying transaction occurs, unrealised gains and losses obtained from remeasurement to fair value are accounted for in the statement of income to the extent that the revaluation of the underlying asset or liability is also included in the statement of income. Ineffective unrealized gains are deferred on the balance sheet and ineffective unrealized losses are recognized directly in the statement of income.

• Hedges of net investment in foreign entities: Effective gains or losses obtained

from remeasurement to fair value are included in cumulative translation adjustments. Ineffective unrealized gains are deferred on the balance sheet and ineffective unrealized losses are included in the statement of income.

• Hedges of monetary assets and liabilities: For consistency purposes with respect to

the valuation of the underlying assets and liabilities, unrealized losses obtained from remeasurement to fair value are deferred, and unrealized gains are recorded in the statement of income.

• No hedge accounting: Unrealized losses from derivatives not designated nor

qualified for hedging treatment are accounted for directly in the statement of income, whereas unrealized gains are recorded as deferred income on the balance sheet in the “Other deferred income” caption.


15


The Group has issued warrants (call options sold) of its class “A” shares as part of the consideration for acquiring certain IT contracts and certain corporate acquisitions. The fair value of these warrants is measured by using an option pricing model and is recorded as additional consideration for the underlying assets acquired. These warrants have been considered as a financial liability in the “Other liabilities” caption and are consequently remeasured to fair value for which accumulated unrealized losses have been included in the statement of income and accumulated unrealized gains have been recorded in the “Other deferred income” caption until the maturity of the contracts. In order to manage the exposure to a rise in its share price with respect to part of the warrants mentioned above, the Group has acquired Treasury shares. In the event that the warrants covered by Treasury shares were not exercisable, the difference in value arising from the comparison between fair value and net book value of these Treasury shares could be compensated by the balance included in the “Other deferred income” caption.

Equity swap agreements (contracts to buy shares of the Company in future periods), entered into in order to manage the exposure to a rise in the Company´s share price with respect to some of the warrants issued as described above, are treated as:


features that are in substance similar to a form of collateral, and therefore do not qualify as an equity instrument: In such cases, accumulated unrealized gains arising from remeasurement to fair value are recorded as deferred income and accumulated unrealized losses are recorded under Net income/loss from financial activity in the statement of income. Fair value is measured by using an option pricing model.

• Instruments similar to a deferred purchase of Treasury shares, when there is no

interim cash settlement feature, the equity swap agreements are considered to be equity instruments and are recorded as an asset. This asset is classified under the “Long-term securities portfolio” caption, as opposed to the “Treasury shares” caption, since the underlying shares are not physically held by the Company. These instruments are valued following the criteria for Investments.

As a component of certain commercial agreements, the Group receives warrants or options on shares of other companies. Warrants or options received on shares of other companies are recorded as derivative financial assets, and measured initially at cost, which is the fair value as of the date of the transaction of the consideration given. Subsequent remeasurement of these financial assets is performed at their fair values with unrealized losses recorded in the statement of income and unrealized gains recorded as deferred income. Fair value is measured by using an option pricing model. When fair value cannot be reliably determined, these derivative financial assets are reflected in the balance sheet at cost.


16

s) Income taxes The current income tax is recognised in the statement of income. Income tax expense

includes the income tax for related companies that are subject to tax at the shareholder level.

Deferred taxes are determined under the liability method. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial statement and tax bases of assets and liabilities using tax rates that are expected to apply when the assets or liabilities are realized, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred taxes arising from movements in equity (for example arising from the hedge of equity investments in Group and related companies) are charged or credited directly to equity. Deferred tax assets are recognized when the probability of realization is reasonably assured and are adjusted only to the extent that it is no longer probable that a benefit will be realized in the future. Deferred tax assets and liabilities are included in the captions of tax receivable and payable and are classified as short or long-term based on the underlying assets and liabilities.

Tax credits for investments in subsidiaries and associates when there is an increase in the percentage of ownership are deferred, reducing income tax expense on a straight-line basis over the useful lives of the corresponding goodwill. This deferred tax credit is included in the “Other deferred income” caption. In the case of capital increases that do not represent an increase in the percentage of ownership or for newly created companies, tax credits are recognized at the moment of the capital contribution.

5. START-UP EXPENSES Balances and movements for the years ended December 31, 2004 and 2003 of the items included under start-up expenses are as follows: Balance at 31.12.02 8,779

Amortization (4,915)

Balance at 31.12.03 3,864

Amortization (3,864)

Balance at 31.12.04 -


17

6. INTANGIBLE FIXED ASSETS Balances and movements for the years ended December 31, 2004 and 2003 of the items included under intangible fixed assets are as follows:

Research and development

Expenses

Patents, licences and trademarks

Intangible rights

Rights on assets

acquired under finance lease Software

Other Intangibles Total

Cost

Balance at 31.12.02 11,247 82,797 260,480 177,790 306,818 - 839,132

Additions 30 5,887 28,209 776 64,525 - 99,427

Additions due to acquisitions of subsidiaries - 891 - 5,331 9,953 - 16,175

Retirements & disposals (10,190) - (18,043) (87) (4,642) - (32,962)

Transfers (40) - 9,880 (23,332) 1,583 41,688 29,779

Exchange rate adjustments (63) (902) (8,433) (148) (6,444) - (15,990)

Balance at 31.12.03 984 88,673 272,093 160,330 371,793 41,688 935,561

Additions 600 1,461 16,206 1,716 65,877 - 85,860

Additions due to acquisit ions of subsidiaries 2,940 724 3,620 576 12,234 24,572 44,666

Retirements & disposals (7) (8,253) (15,037) (2,626) (22,583) - (48,506)

Transfers 136 (2,406) 169 (137) 3,095 6,022 6,879


Balance at 31.12.04 4,630 79,903 274,748 159,796 428,135 72,282 1,019,494


Balance at 31.12.02 11,152 46,721 138,967 61,076 139,223 - 397,139

Additions 135 11,120 42,746 7,131 43,833 4,011 108,976

Additions due to impairment - 2,054 - - 1,213 - 3,267

Retirements & disposals (10,188) (16) (16,489) (81) (4,321) - (31,095)

Transfers (77) - 10 (16,983) 91 - (16,959)


Balance at 31.12.03 961 59,369 160,332 51,005 175,852 4,011 451,530

Additions 165 9,911 38,863 5,651 48,905 8,463 111,958

Additions due to impairment - 397 - - 7,599 - 7,996

Retirements & disposals - (8,252) (14,521) (1,712) (21,458) - (45,943)

Transfers - 9 - (11) (506) 464 (44)

Exchange rate adjustments 26 (294) (1,681) (47) (2,056) - (4,052)

Balance at 31.12.04 1,152 61,140 182,993 54,886 208,336 12,938 521,445

Net book value at 31.12.02 95 36,076 121,513 116,714 167,595 - 441,993

Net book value at 31.12.03 23 29,304 111,761 109,325 195,941 37,677 484,031

Net book value at 31.12.04 3,478 18,763 91,755 104,910 219,799 59,344 498,049


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The additions due to impairment of “Patents, licenses and trademarks” and “Software development projects” for 2004 and 2003 includes KEURs 7,996 and KEURs 3,267 respectively, due to the write down of projects related to the traditional and leisure travel industry and write down of licenses. The most significant component included in the rights on assets acquired under finance lease item is the CRS data processing center in Erding. The original (1988) cost of this facility was KEURs 106,558, which was increased due to new construction by KEURs 10,942 during the year 2000. These leases expire on December 31, 2019, although the Group has an option to terminate the main lease on June 30, 2011. At the end of years 2009 and 2019 the Group has the option to purchase the land and the buildings for the residual value of KEURs 70,235 and KEURs 21,097, respectively. Quarterly payments consisted of principal plus interest at an average of 4.98% during 2004 and 2003. A breakdown of the Group’s rights on assets acquired under finance leases classified by asset captions is provided below:

Balance at 31.12.04 Balance at 31.12.03

Cost


Net value

Cost


Net value

Land and buildings 126,396 (31,351) 95,045 126,396 (28,960) 97,436 EDP equipment 9,860 (8,655) 1,205 11,549 (8,479) 3,070 Other fixed assets 23,540 (14,880) 8,660 22,385 (13,566) 8,819

159,796 (54,886) 104,910 160,330 (51,005) 109,325

In addition, Note 15.1 includes a breakdown of future payment commitments for assets acquired under finance lease. The increase in software development projects during the years 2003 and 2004 is mainly due to capitalization of software for IT services as well as ongoing investments in the traditional and e-commerce areas. The increases in intangible rights during the years 2004 and 2003 are mainly due to signing bonuses paid to travel agencies. The increases in other intangibles, during the years 2004 and 2003 are mainly due to the acquisition of the 55.36% share interest in Opodo Limited (UK) and the acquisition of the remaining 66% share interest in Amadeus Germany GmbH and Balance Sheet reclassification of the original 34% acquisition, respectively. At December 31, 2004 fully amortized items amount to KEURs 215,681 (KEURs 205,745 at December 31, 2003).


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7. TANGIBLE FIXED ASSETS Balances and movements for the years ended December 31, 2004 and 2003 of the items included under tangible fixed assets are as follows:

Cost Land and building

Furniture & office equipment EDP equipment

Other fixed assets Total

Balance at 31.12.02 2,959 24,403 362,470 51,214 441,046

Additions 27 1,511 37,408 4,026 42,972 Additions due to acquisitions of

subsidiaries - 4,611 4,582 4,441 13,634 Retirements & disposals (165) (715) (31,266) (1,573) (33,719) Transfers (3) 221 4,580 20,609 25,407 Exchange rate adjustments (1) (752) (10,452) (1,878) (13,083)

Balance at 31.12.03 2,817 29,279 367,322 76,839 476,257

Additions - 1,762 56,275 8,659 66,696 Additions due to acquisitions of

subsidiaries 929 1,830 3,203 2,631 8,593 Retirements & disposals - (1,437) (25,778) (2,236) (29,451) Transfers - (929) 982 (138) (85) Exchange rate adjustments - (325) (3,042) (859) (4,226)

Balance at 31.12.04 3,746 30,180 398,962 84,896 517,784 Accumulated depreciation Balance at 31.12.02 357 13,585 253,630 23,361 290,933

Additions 61 3,206 52,359 5,480 61,106 Retirements & disposals (157) (315) (27,999) (1,241) (29,712) Transfers - (13) 2,364 14,608 16,959 Exchange rate adjustments - (515) (7,498) (1,297) (9,310)

Balance at 31.12.03 261 15,948 272,856 40,911 329,976

Additions 61 3,322 47,543 6,937 57,863 Retirements & disposals - (1,151) (23,432) (1,972) (26,555) Transfers - (34) (14) 93 45 Exchange rate adjustments - (239) (2,614) (665) (3,518)

Balance at 31.12.04 322 17,846 294,339 45,304 357,811

Net book value at 31.12.02 2,602 10,818 108,840 27,853 150,113

Net book value at 31.12.03 2,556 13,331 94,466 35,928 146,281

Net book value at 31.12.04 3,424 12,334 104,623 39,592 159,973

At December 31, 2004 fully depreciated items amount to KEURs 164,542 (KEURs 101,298 at December 31, 2003).


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The table below summarises the cost and accumulated depreciation of tangible fixed assets located outside of Spain:

December 31, 2004 December 31, 2003

Cost Accumulated amortization Net value

Cost

Accumulated amortization Net value

Land and buildings 3,746 (322) 3,424 2,817 (261) 2,556 Furniture & office equipment 29,133 (17,100) 12,033 28,195 (15,251) 12,944 EDP equipment 397,000 (292,666) 104,334 365,055 (270,641) 94,414 Other fixed assets 82,463 (44,221) 38,242 74,373 (39,899) 34,474

512,342 (354,309) 158,033 470,440 (326,052) 144,388

8. LONG-TERM INVESTMENTS 8.1. Balances and movements of the accounts included in this caption for the years ended December 31, 2004 and 2003 are as follows:

Balance at 31.12.03 Additions Decreases Transfers

Exchange rate

adjustments Balance at 31.12.04

Investments - equity method (*) 27,037 6,425 (8,126) (7,782) 32 17,586 Loans to related companies 16,979 585 - (1,423) (882) 15,259 Long-term securities portfolio 44,923 3,367 (8,513) (28,605) 393 11,565 Other loans 57,892 4,903 (799) (54,675) (25) 7,296 Long-term deposits 16,008 33,351 (954) (13,432) (585) 34,388 Long-term tax receivable (**) 111,345 33,048 (26,829) (3,023) (1,516) 113,025 Provisions (20,532) (208) - 5,329 886 (14,525)

253,652 81,471 (45,221) (103,611) (1,697) 184,594


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Balance at 31.12.02 Additions Decreases Transfers

Exchange rate

adjustments Balance at 31.12.03

Investments - equity method (*) 52,198 7,538 (13,756) (17,500) (1,443) 27,037 Loans to related companies 17,466 4,998 - (2,974) (2,511) 16,979 Long-term securities portfolio 39,326 5,839 (217) - (25) 44,923 Other loans 5,903 55,488 (2,015) (1,105) (379) 57,892 Long-term deposits 13,042 8,823 (638) (3,804) (1,415) 16,008 Long-term tax receivable (**) 115,871 24,407 (26,960) 6,201 (8,174) 111,345 Provisions (25,421) - 5,490 (3,086) 2,485 (20,532) 218,385 107,093 (38,096) (22,268) (11,462) 253,652

The increase in “Long – term deposits” caption during the year 2004 is mainly due to the deposits of Opodo Limited (UK). The increase in “Other loans” caption during the year 2003 is mainly due to the convertible loan given to Opodo Limited (UK). As of December 31, 2004, the transfer in “Other loans” caption includes the impact of considering the convertible loan given to Opodo Limited (UK) in 2003, as an intercompany loan upon the acquisition by the Group of 55.36% interest in this company. The terms of the convertible loan contract have been revised and the option to convert has been cancelled.

(*) Details of investments under the equity method are inc luded in Note 1. During the year 2004 and 2003, decreases primarily related to the results and the distribution of dividends by the companies included in this caption. The transfer caption in 2004 and 2003 includes the impact of acquiring a controlling interest in related parties.

(**) See Note 23

8.2 The breakdown of Long-term securities portfolio for the years ended December 31, 2004 and 2003 is as follows:

Balance at 31.12.04 Balance at 31.12.03

Equity instruments similar to treasury shares (Note 21) - 28,380 Investments in companies less than 20% 6,687 11,731 Other 4,878 4,812

11,565 44,923

Equity swap agreements with no interim cash settlement feature are treated as equity instruments similar to Treasury shares and reported in the “Long-term securities portfolio” caption. As of December 31, 2004, the equity swap agreements have matured being converted into Treasury Shares.


22

8.3. The breakdown of Provisions for the year ended December 31, 2004 and 2003 is as follows: Balance at 31.12.04 Balance at 31.12.03

Equity instruments similar to treasury shares - 5,206 Long-term loans receivable from related parties 14,244 15,253 Other provisions 281 73

14,525 20,532


23

9. GOODWILL The balances and movements for the year ended December 31, 2004 of the items included in this caption are as follows:

Company Balance at 31.12.03

Increase/ decrease Amortization (1) Transfers

Exchange rate adjustments

Balance at 31.12.04

Fully consolidated companies Airline Automation, Inc. 9,610 417 (402) (6,794) (700) 2,131 Amadeus Data Processing GmbH 151,150 - (37,785) - - 113,365 Amadeus Germany GmbH 99,273 795 (12,339) - - 87,729 Amadeus GTD Australia, Pty Ltd. 1,648 - (1,586) - - 62 Amadeus Scandinavia AB 94,960 - (10,873) - 334 84,421 e-Travel, Inc. 1,705 - (1,743) - 38 - Eviaggi.com, S.P.A. 942 - (343) - - 599 Vacation.com, Inc. 37,318 - (5,488) - (2,200) 29,630 Amadeus Brasil Ltd. - 2,302 (1,700) - - 602 Travellink AB - (909) (390) 1,299 - - Opodo - 43,049 (2,152) - - 40,897 Amadeus BulgariaEOOD - 135 (135) - - - OPTIMS, S.A. - 9,428 (94) 200 - 9,534 Prologest - 373 (4) - - 369 Hogatex - 1,767 (6) - - 1,761 HDS - 499 (3) - 130 626 Amadeus France, S.N.C. - 82,102 - 14,223 - 96,325 Investments carried under the equity method Sociedad Anato- Avianca de Reservaciones de Servicios Turísticos Savia, Ltda. 1,315 - (1,123) - - 192 Amadeus France, S.N.C. 18,506 - (4,283) (14,223) - - ITA (Internet Travel Agent Inc.) - 205 - - (19) 186 OPTIMS, S.A. 248 - (48) (200) - - Sistemas Autorizados de Agencias de Viajes, S.A. (“SAVIA”) 9,818 - (2,075) - - 7,743 Topas Co Ltd. 1,103 - (1,103) - - - 1Travel.com Inc. 3,249 - (3,323) - 74 - Travel.com.au Ltd. 1,159 - (1,159) - - - Travellink AB 1,105 - 194 (1,299) - - Comtec (Europe) Limited - 2,538 (465) - - 2,073 433,109 142,701 (88,428) (6,794) (2,343) 478,245

(1) The amortization of the period includes an impairment loss amount of KEURs 3,002 related mainly to the goodwill of the Brasil NMC and KEURs 1,999, due to accelerated amortisation in certain companies mainly in the e- commerce arena.


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The balances and movements of items included in this caption for the year ended December 31, 2003 are as follows:

Company Balance at 31.12.02

Increase/ decrease Amortization (1) Transfers

Exchange rate adjustments

Balance at 31.12.03

Fully consolidated companies Airline Automation, Inc. - 11,230 (330) - (1,290) 9,610 Amadeus Data Processing GmbH 188,935 - (37,785) - - 151,150 Amadeus Germany GmbH - 107,091 (10,284) 2,466 - 99,273 Amadeus GTD Australia,Pty Ltd. 2,661 - (993) (20) - 1,648 Amadeus Polska Sp.zo.o. 3 11 (14) - - - Amadeus Scandinavia AB 113,135 (3,788) (10,619) (4,656) 888 94,960 e-Travel, Inc 3,358 - (1,229) - (424) 1,705 Eviaggi.com, S.P.A. 1,284 - (342) - - 942 ICSA -T N.V. 3,611 - (3,611) - - - Vacation.com, Inc. 63,147 - (17,142) - (8,687) 37,318 Vivacances - 1,592 (1,592) - - - Investments carried under the equity method Sociedad Anato- A v ianca de Reservaciones de Servicios Turísticos Savia, Ltda. 1,682 - (367) - - 1,315 Amadeus Brasil Ltd. 118 - (118) - - - Amadeus France, S.N.C. 22,759 - (4,277) - 24 18,506 Amadeus Germany GmbH 24,724 - (624) (24,100) - - ITA (Internet Travel Agent Inc.) 403 - (376) - (27) - OPTIMS, S.A. - 266 (18) - - 248 Sistemas Autorizados de Agencias de Viajes, S.A. (“SAVIA”) 11,897 - (2,079) - - 9,818 Topas Co Ltd. 3,635 - (2,532) - - 1,103 1Travel.com Inc. 7,486 - (3,365) - (872) 3,249 Travel.com.au Ltd. 1,739 - (580) - - 1,159 Travellink AB 3,695 (476) (2,114) - - 1,105 Vivacances 712 1,336 (2,048) - - - 454,984 117,262 (102,439) (26,310) (10,388) 433,109

(1) The amortization of the period includes an impairment loss amount of KEURs 17,063 related mainly to the goodwill of the Consortia Business unit, ICSA-T N.V. and certain companies in the e-commerce arena.


25

The increase in goodwill during the year 2004 is mainly due to the acquisition of the subsidiaries Amadeus France S.N.C., Optims S.A. and Opodo Limited (UK) and during the year 2003 is primarily due to the acquisition of the subsidiary Amadeus Germany, GmbH.

10. DEFERRED EXPENSES Balances and movements for the years ended December 31, 2004 and 2003 of the items included under deferred expenses are as follows:

Loan arrangement

expenses

Interest on finance lease

contracts Others Total

Balance at 31.12.02 2,145 55,186 9,029 66,360 Increase / (Decrease) 45 - (240) (195) Price adjustment - - (353) (353) Amortization (681) (5,620) (1,556) (7,857) Exchange rate adjustment - 297 (37) 260

Balance at 31.12.03 1,509 49,863 6,843 58,215

Increase / (Decrease) - - 4 4 Price adjustment - - 431 431 Amortization (567) (5,154) (2,117) (7,838) Exchange rate adjustment - 478 (3) 475

Balance at 31.12.04 942 45,187 5,158 51,287

Price adjustment in “Others” relate to the difference between the settlement amount and the present value of the deferred purchase consideration (including the related subsequent remeasurement) for acquisitions.

11. TRADE ACCOUNTS RECEIVABLE The breakdown of the “Trade account receivable” caption as of December 31, is as follows: 2004 2003

Companies belonging to the Group’s significant shareholders 53,490 54,271 Other customers 309,499 230,827

362,989 285,098


26

The allowance provided by the Group against accounts receivable for estimated cancellations of airline bookings was KEURs 72,290 as of December 31, 2004; the allowance provided by the Group for the related reduction in accounts payable for distribution fees was KEURs 25,986 as of December 31, 2004. Related allowances amounting to KEURs 72,758 were provided against accounts receivable and KEURs 30,786 as a deduction in accounts payable as of December 31, 2003.

12. OTHER ACCOUNTS RECEIVABLE AND PAYABLE The breakdown of the “Accounts receivable – other” caption as of December 31 is as follows: 2004 2003 Derivative assets (Note 21) 5,983 12,870 Other 6,892 3,621

Total 12,875 16,491

The breakdown of the “Other accounts payable” caption as of December 31 is as follows: 2004 2003 Derivative liabilities (Note 21) 2,165 6,471 Deferred purchase consideration 10,100 9,122 Warrants debt 855 - Other 11,843 15,206

Total 24,963 30,799

The “Deferred purchase consideration” caption includes the part of the deferred payment derived from certain corporate acquisitions in 2003 and 2002 that will vest in the following year.


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13. SHAREHOLDERS’ EQUITY 13.1. Balances and movements for the years ended December 31, 2004 and 2003 of the items included under Shareholders’ equity are as follows:

Share capital

Additional paid-in capital

Controlling company’s

legal reserve

Treasury share

reserve Other

reserves

Controlling company’s prior year

results

Reserves in consolidated

companies (1)

Cumulative translation

adjustments

Net profit attributable to

the holding company Dividend Total

Balance at 31.12.02 27,898 435,679 7,468 99,670 8,259 96,476 57,051 (25,453) 84,820 - 791,868

Distribution of 2002 profit - - - - - 27,225 27,597 - (84,820) 29,998 -

Effect of movements in Treasury shares (net)

- 1,151 - (1,151) - - - - - - -

Other movements - - - - (1,063) - 1 (7,794) - (29,998) (38,854)

2003 profit - - - - - - - - 150,127 - 150,127

Balance at 31.12.03 27,898 436,830 7,468 98,519 7,196 123,701 84,649 (33,247) 150,127 - 903,141

Distribution of 2003 profit - - - - - 115,027 100 - (150,127) 35,000 -

Effect of movements in Treasury shares (net)

- (10,980) - 10,980 - - - - - - -

Other movements (4,854) - - - 4,369 (16,427) (632) (3,034) - (35,000) (55,578)

2004 profit - - - - - - - - 216,367 - 216,367

Balance at 31.12.04 23,044 425,850 7,468 109,499 11,565 222,301 84,117 (36,281) 216,367 - 1,063,930

(1) Of total reserves in consolidated companies at December 31, 2004, KEURs 707 (KEURs 699 at December 31, 2003) are restricted reserves.


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13.2. Balances and movements of class “A” and class “B” shares for the years 2004 and 2003 are as follows: Class “A” shares (Par value 0.01 Euros)

Issued shares Treasury shares Class “B” shares (Par

value 0.10 Euros)

As of December 31, 2002 590,000,000 15,711,730 219,983,100 Additions - 22,025 - Disposals - (230,912) -

As of December 31, 2003 590,000,000 15,502,843 219,983,100

Additions - 10,311,563 - Disposals - (6,708,736) (48,539,400) As of December 31, 2004 590,000,000 19,105,670 171,443,700

The shares included above represent the authorized share capital of the Company. All shares are fully subscribed and paid. The Treasury shares have been acquired primarily in order to cover obligations under the Stock Incentive Plan described in Note 20 and warrants issued as described in Note 21.3. Disposals include shares and options granted to employees in connection with the different Stock Incentive Plans and portfolio adjustments made in order to match with the current obligations of the Group. In the Annual General Shareholders’ meeting that has taken place in June 2004, the redemption of 48,539,400 class “B” shares was approved, following the sale of 78,000,000 Amadeus class “A” shares by Lufthansa Commercial Holding GmbH on February 12, 2004. The acquisition cost of the Treasury shares mentioned above as of December 31, 2004 and 2003 is KEURs 109,499 and KEURs 98,519, respectively. As of December 31, 2004, the Group has recorded in the balance sheet a provision for decline in value of Treasury shares amounting to KEURs 24,783. During 2004 a reversion of KEURs 15,868 has been included in the statement of income and a negative impact of KEURs 16,427 in the “Other reserves” caption. The provision for decline in value of Treasury shares for the year ended December 31, 2003 amounted to KEURs 24,223. Treasury shares disposals during 2004 have resulted on a net loss of KEURs 12,783 that has been recognized in the “Extraordinary expense” caption by KEURs 12,850 (See Note 22) and in the “Extraordinary income” caption by KEURs 67. 13.3. Each class “A” share carries the right to one vote, whilst each class “B” share carries the right to 10 votes. Economic rights are greater for class “A” shares in respect of any future distribution of dividends. The right to receive a dividend for class “B” shares is calculated as the lesser of 1% of total dividends or 1% of the par value of class “B” shares. In the event of


29

liquidation of the assets of the Group, class “A” shares have greater economic rights than class “B” shares, as the Group would pay out first the par value of class “A” shares and in the case of any remaining amounts they would be distributed amongst class “B” shares for their par value; further remaining amounts would be distributed among class “A” shares. As of December 31, 2004 and 2003 the Company’s shares are held as follows:

Shareholder Class “A” shares


% of class “A” shares

% of total voting rights

Société Air France 137,847,654 85,782,614 23.36% 43.21% Iberia Líneas Aéreas de

España, S.A.

107,826,173 67,100,243 18.28% 33.80% Lufthansa Commercial

Holding, GmbH

29,826,173 18,560,843 5.05% 9.34% Others (1) 314,500,000 - 53.31% 13.65% Total 590,000,000 171,443,700 100% 100%


Shareholder Class “A” shares


% of class “A” shares


Société Air France 137,847,654 85,782,614 23.36% 35.69% Iberia Líneas Aéreas de

España, S.A.

107,826,173 67,100,243 18.28% 27.92% Lufthansa Commercial

Holding, GmbH

107,826,173 67,100,243 18.28% 27.92% Others (1) 236,500,000 - 40.08% 8.47% Total 590,000,000 219,983,100 100% 100%


13.4. The General Shareholders’ Assembly of June 14, 2004, declared a dividend per class “A” and per class “B” share, in accordance with the Company’s by-laws and once the economic rights of the Treasury shares were proportionally distributed to the remaining shares. The final dividend of KEURs 35,000 was paid in July 2004 with regards to the distribution of 2003 results. 13.5. The Company has fully established the required legal reserve. This reserve can only be used to compensate for prior year losses up to a value of 20% of share capital, in the event that no other reserves are available. Or, part of the reserve may be used to increase the Company’s share capital, but the value remaining in the reserve must be no lower that 10% of the increased share capital.


30

13.6. In view of the Group’s business structure it was not considered relevant to provide a breakdown of reserves in consolidated companies or of the contribution of each consolidated Company to the consolidated results.

14. PENSION AND OTHER RELATED PROVISIONS Balances and movements for the years ended December 31, of the items included in this caption are as follows:

2004 2003

Defined benefit plans Balance at the beginning of the period 3,711 8,396 Company contributions (3,087) (4,076) Net periodic pension cost for the year 2,987 2,828 Benefits paid directly by the company in the year (298) (329) Adjustments relating to acquisitions/diverstitures/business combinations - 1,459 Adjustments relating to settlements/curtailments/terminations 242 684 Exchange rates differences (161) (488) Additional minimum liability adjustment - (2,602) Reclassification from other net liabilities (39) (2,161)

Balance at the end of the period 3,355 3,711 Other pension plans 1,930 1,226

Total balance 5,285 4,937

A summary of the major actuarial assumptions used to calculate the most significant portion of the defined benefit obligation as of December 31, is as follows:

2004 2003 Discount rate for Obligations 5.18% - 6.00% 5.61% - 6.25% Discount rate for Expense 5.55% - 6.25% 5.88% - 6.75% Long – Term Rate of Return on Plan Assets 5.68% - 8.30% 6.32% - 8.50% Rate of Future Compensation Increases 3.30% - 3.75% 3.27% - 3.75% Rate of Pension Increases 1.82% 1.84% Medical rate and ultimate rate 10.5% / 5.25% 11.0% / 5.25%


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15. DEBT WITH FINANCIAL INSTITUTIONS 15.1 The breakdown of amounts owed to financial institutions, by maturity, is as follows as of December 31: 2004 2003 Syndicated loans – short-term - 62,729 Other credit facilities 5,922 9,973 Interest due on loans and credits 390 285 Short-term obligations under finance lease 15,089 14,912

Total short-term debt 21,401 87,899 Other 1,875 42 Long-term obligations under finance lease 136,096 149,014

Total long-term debt 137,971 149,056

Total Debt 159,372 236,955

The Group has two variable rate syndicated loans as of December 31, 2004 which are under KEURs 200,000 and KEURs 300,000 dual currency revolving credit facility agreements, denominated in EUR and USD. As of December 31, 2004 and 2003, the total unused amounts available under these facilities were KEURs 500,000 and KEURs 565,000, respectively. The interest rates for the drawdowns on these loans ranged from 2.37% to 2.58% for the year ended December 31, 2004 and from 2.39% to 3.75% in 2003. These loans have commitment fees that range from 0.25% to 0.26% of the unused portion. Under the terms of these loan agreements, the Group is obliged to meet certain covenants, based on its consolidated IFRS Financial Statements, the most important of which are that the ratio of debt to total EBITDA (Earnings before interest, tax, depreciation and amortization) shall not exceed 3:1 and that the ratio of EBITDA to total financial charges shall be or shall exceed 4:1. The repayment and maturity schedule for these two facilities as of December 31, is as follows:


32

2004 2003

Date of maturity

Amount of facilities maturing


amount Amount of

facilities maturing


amount

April 21, 2004 - - 27,729 27,729 April 24, 2004 - - 100,000 35,000 April 24, 2005 100,000 - 100,000 - April 24, 2006 100,000 - 100,000 - December 20, 2006 150,000 - 150,000 - December 20, 2007 150,000 - 150,000 - 500,000 - 627,729 62,729

The balance of long-term and short-term obligations under finance lease, as of December 31, 2004 and 2003, is principally denominated in EUR. Finance lease obligations have accrued interest between 1.96% and 9.58% during 2004 (between 2.85% and 9.58% in 2003). The future minimum payments for finance leases, as of December 31, are as follows:

Year(s) due 2004 2003

0 – 1 15,089 14,912 1 – 2 12,727 14,029 2 – 3 10,965 12,263 3 – 4 10,542 10,468 4 – 5 8,976 10,402

5 – 10 35,924 37,716 10 – 15 35,865 35,865 15 – 20 21,097 28,271

Total debt 151,185 163,926

15.2. The breakdown of amounts owed for short-term credit facilities, by currency, is set out below as of December 31:

2004 2003

Credit limit Outstanding

balance

Currency Credit limit Outstanding

balance Currency

85,741 3,971 EUR 89,493 6,366 EUR 6,240 92 USD 6,239 2,323 USD 2,128 - GBP 2,128 - GBP 4,307 - AUD 5,059 774 AUD 1,139 182 Others 699 510 Others

99,555 4,245 103,618 9,973


33

Short-term credit facilities have accrued at interest rates between 2.31% and 6.21% during 2004 and between 2.37% and 5.60% in 2003. 15.3. The breakdown of long-term credits is as follows as of December 31:

2004 2003

Credit limit Outstanding

balance

Currency Credit limit Outstanding

balance Currency

2,654 1,875 EUR 42 42 EUR

16. OTHER LIABILITIES The breakdown of this caption as of December 31, is as follows:

2004 2003

Debt related to equity instruments similar to treasury shares - 28,380 Deferred purchase consideration 28,439 32,684 Derivative liabilities (Note 21) 993 3,251 Others 702 424

30,134 64,739

The deferred purchase consideration (payable over a period of up to 10 years from the acquisition date) is derived from certain corporate acquisitions during 2002 and 2003 (see Note 9). The amount of this liability is contingent on the evolution of the respective businesses acquired.

17. TRADE ACCOUNTS PAYABLE The breakdown at December 31, is as follows:

2004 2003 Companies belonging to the Group´s significant shareholders 17,742 12,153 Other creditors 316,274 246,772 334,016 258,925

These amounts are mostly denominated in EUR and USD.


34

18. COMMITMENTS WITH THIRD PARTIES 18.1. Operating lease agreements As of December 31, 2004 the Group has contracted commitments for operating leases totalling KEURs 198,085 (KEURs 227,478 at December 31, 2003). 18.2. Other commitments As of December 31, 2004 and 2003, the Group had short-term commitments to acquire tangible assets for KEURs 8,142 and KEURs 9,252, respectively. Additionally, the Group has entered into various software licence agreements which could entail future payments. The likelihood that the Group will make these payments is subject to the compliance by the counterparty with certain contractual obligations and certain other events. The maximum amount committed under these agreements, at December 31, 2004, is KEURs 7,761 and KEURs 660, for the short and the long-term, respectively (KEURs 1,227 and KEURs 268, for the short and the long-term, respectively, at December 31, 2003).

19. REVENUES, EXPENSES AND WORKFORCE 19.1. The Group operates in the travel industry and, accordingly, events that significantly affect the industry could also affect the Group’s operations and financial position. The following geographical distribution of revenues is based primarily on the country where bookings were made and, with respect to bookings made through the Group’s CRS directly with airlines, based upon the home country of the airline: As of December 31, Geographical market 2004 2003 Europe 1,372,325 1,296,642 United States 169,717 182,544 Rest of the world 514,975 453,001 2,057,017 1,932,187

19.2. A breakdown of the trade revenues and other operating income, denominated mainly in EUR and USD, by type of customer is as follows:


35

2004 2003

Companies belonging to the Group’ s significant

shareholders and the Group’s related companies

498,452 505,291 Others 1,558,565 1,426,896

2,057,017 1,932,187

19.3. Likewise, a breakdown of the other operating expenses, denominated mainly in EUR and USD, by type of supplier is as follows: 2004 2003

Companies belonging to the Group’s significant

shareholders and the Group’s related companies

266,701 281,589 Others 875,116 765,059

1,141,817 1,046,648

19.4. The average number of employees of the Amadeus Group for the year ending December 31, 2004, is 5,760 (5,257 employees in 2003). For the year 2003 the average headcount has been recalculated using the period from the acquisition to year – end instead of averaging across the full year.

20. STOCK INCENTIVE PLANS Beginning with the International Global Offering of 1999, the Group adopted a stock based Employee Incentive Plan (the Plan) to retain and motivate senior management and employees starting October 19, 1999. The plan provides for the award of common stock in the form of stock options and stock grants as follows: i) The Group granted to its employees a one-time grant of shares, depending on salary


ii) The Group granted to senior management a one-time grant of shares which would vest

at the end of a three to four year period. iii) The Group also granted to executive employees (including non-senior members from the

management team) in each of the years 1999 to 2004, options to purchase shares of the Group’s Common Stock, at the market price on the day of the grant until year 2003 and at average market price for year 2004 thus no compensation expense has been recorded for plans prior 2004 and KEURs 88 of compensation expense have been


36

recognised related to 2004 Plan. The aforementioned options vest in equal installments over a four-year period measured from the date of the grant and have a ten-year term from the grant date.

As of December 31, the detail for these plans is as follows: 2004 2003

Number

of options Value at

exercise price Number

of options Value at

exercise price

Outstanding at 1st January 12,056,290 66,559 8,945,901 48,378

Of which vested 4,983,719 29,549 2,747,244 17,454

New rights 3,630,120 19,203 3,446,115 19,919 Rights exercised (*) (889,071) (4,576) (49,707) (224)

Rights expired (217,042) (1,238) (286,019) (1,514)

Plan 2003 adjustment (168,049) (971) - -

Outstanding at 31st December 14,412,248 78,977 12,056,290 66,559

Of which vested 6,476,974 37,696 4,983,719 29,549

(*) The average price for the rights exercised has been 5.15 EURs during 2004 and 4.5 EURs during 2003.

The increase in new rights during 2004 corresponds to the 2004 Stock Option Plan. The maturity dates of options as of December 31, are as follows:

2004 2003

Number Exercise

price

Number Exercise

price

Five years 1,596,212 5.75 - - Six years 1,122,956 8.89 1,941,603 5.75 Seven years 2,106,936 5.42 1,160,967 8.89 Eight years 2,754,393 3.88 2,458,081 5.42 Nine years 3,201,631 5.78 3,049,524 3.88 Ten years 3,630,120 5.29 3,446,115 5.78

Total 14,412,248 12,056,290

iv) During 2002, the Group has implemented an Employee Stock Purchase Program. The

general conditions of the program allow employees to purchase Company shares every three months up to an established percentage of the employee’s annual salary. If the purchased shares are maintained over a period of 30 days, the Company will grant


37

shares for 15% of the amount the employee contributes to the program. The cost for the year ended December 31, 2004 and 2003 was KEURs 86 and KEURs 97 respectively.

21. FINANCIAL INSTRUMENTS The Group uses the following financial instruments as part of its commercial operations and to manage the risks arising from fluctuations in currency exchange rates, interest rates and share market prices: 21.1. Currency derivatives The Group has risks associated with fluctuations in currency exchange rates and uses currency derivatives to hedge future cash flows, net investments in foreign entities and certain monetary assets and liabilities. The Group is party to a variety of foreign currency forward and option contracts for the management of these exchange rate exposures. As of December 31, 2004, the details of open foreign currency options and open forward contracts are as follows:


38

Derivative Assets:

Fair value (KEURs)

Type Financial

Instrument Currency Maturity

Notional amount

(KEURs) (**)

CTA

Balance

P&L

Total

USD 2005 24,432 - - 4,143 4,143

2005 (5,672) - - 468 468

Cash flow hedge

Forward

Others

Options USD 2005 55,062 - (1,696) - (1,696) 2006 68,808 - (1,468) - (1,468) 2007 40,378 - (947) - (947)

USD 2005 5,284 154 - - 154 2005 19,049 112 - - 112


Forward

Others

Others (*) Forward USD 2005 23,758 - - 888 888 Others 2005 11,606 - - 144 144

IRS EUR 2009 8,474 - 28 - 28

Premium paid - - - 4,473

Total 266 (4,083) 5,643 6,299 Total short term

(Note 12)

266 (1,696) 5,643 5,983

Total long term

- (2,387) - 316

(*) “Others” includes derivative instruments which do not qualify for hedge accounting and are used by the Company to protect itself from changes in

value of foreign-currency denominated monetary assets and liabilities. (**) Notional amounts for Options are presented based on year end exchange rates.


39


Fair value (KEURs)

Type Financial


Notional amount

(KEURs) (**)

CTA

Balance

P&L

Total

Cash flow

hedge

Forward

USD

2005

(9,117) - 412 - 412 Others 2005 (10,832) - 372 - 372 Opciones USD 2005 40,378 - - 373 373

2006 28,632 - - 506 506 2007 38,176 - - 487 487

Net equity

investments

Forward

USD

2005

(5,222) 93 - - 93 Others 2005 (19,014) 79 - - 79

Others (*) Forward USD 2005 6,359 - - 6 6 Others 2005 (13,357) - 830 - 830

Total 172 1,614 1,372 3,158

Total short term (Note 12)

172 1,614 379 2,165


- - 993 993




40

As of December 31, 2003, the details of open foreign currency options and open forward contracts are as follows:

Derivative Assets:

Fair value (KEURs)

Type Financial


Notional amount

(KEURs) (**)

CTA

Balance

P&L

Total

2004 22,629 - - 2,797 2,797 USD

2004 (5,351) - - 407 407

Cash flow hedge

Forward

Others

Options USD 2004 24,545 - 15 - 15 2005 30,278 - 377 - 377 2006 16,129 - 93 - 93

2004 36,283 4,346 - - 4,346 USD

2004 9,531 235 - - 235


Forward

Others

Options USD 2004 11,876 1,032 - - 1,032 2005 38,005 2,684 - - 2,684

2004 46,709 - - 2,615 2,615 USD

2004 (12,059) - - 832 832

Others (*)

Forward

Others

2005 (3,120) - - 40 40 IRS EUR 2009 10,048 - 178 - 178 Premium paid - - - 2,738

Total 8,297 663 6,691 18,389 Total short term

(Note 12)

5,613 15 6,651 12,870

Total long term

2,684 648 40 5,519




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Fair value (KEURs)

Type Financial


Notional amount

(KEURs) (**)

CTA

Balance

P&L

Total

2004 (11,128) - 129 - 129 USD

2004 (7,420) - 429 - 429

Cash flow hedge

Forward

Others

Options USD 2004 24,545 - - 441 441 2005 19,873 - - 1,065 1,065

2004 15,568 4,355 - - 4,355 USD

2004 743 23 - - 23


Forward

Others

Options USD 2004 11,876 - - 279 279 2005 38,005 - - 1,150 1,150

Others (*) Forward Others 2004 30,300 - 815 - 815

IRS EUR 2005 50,000 - - 1,036 1,036

Total 4,378 1,373 3,971 9,722 Total short term

(Note 12)

4,378 1,373 720 6,471 Total long term

(Note 16)

- - 3,251 3,251



21.2. Interest rate derivatives The Group entered into an interest rate swap agreement to hedge against exposure to increases in interest rates related to a finance lease agreement which has expired in December 2004. During the year, this agreement entitled the Group to receive interest at floating rates and obliged it to pay interest at a fixed rate of 5.785%, both relating to a declining schedule of principal amounts, beginning on December 31, 1999 at KEURs 20,016


42

and ending on December 31, 2004 at KEURs 10,427. The remaining notional amount of this interest rate swap was KEURs 12,501 as of December 31, 2003. The estimated fair value of the contract, based on the net present value of the future cash flows, was an unrealized loss of KEURs 372 as of December 31, 2003, which has been recorded in the statement of income during the year 2004 with a net impact of KEURs 240. In 2002, the Group entered into an interest rate swap agreement starting November 29, 2002 ending November 29, 2005 with a fixed notional principal of KEURs 100,000. This agreement entitled the Group to receive interest at floating rates and pay at a fixed rate of 3.423%. The agreement entered into is to limit the Group’s exposure to increases in interest rates of its credits and loans. As of August 2003, the bullet principal of the outstanding agreement was reduced up to KEURs 50,000. In January 2004, the remaining notional of this was fully cancelled. Additionally, in June 2003 the Group entered into a new agreement ending June 5, 2009. The principal amounted to KEURs 10,799 and would be reduced during the life of the agreement (amortising principal). As of December 31, 2004 the principal amounts to KEURs 8,474. This agreement entitles the Group to receive interest at floating rates and pay at a fixed rate of 2.6775%. As a result of the 2003 year end change of the interest payment structure of the Group’s credits and loans, this structure does not qualify for hedge accounting as of December 31, 2004 and 2003. The fair value of the outstanding agreement as of December 31, 2004 and 2003 is an unrealized gain of KEURs 28 and an unrealized loss of KEURs 858 respectively. 21.3. Equity related instruments a) Warrants issued

As a result of certain commercial agreements in the IT services arena and other areas, the Group issued, during the year 2000, warrants to purchase 10,668,000 of its class “A” shares at exercise prices ranging from EURs 9.09 to EURs 13.40 per share. Under the terms of the respective contractual agreements, the number of warrants is based on the number of class “A” shares issued on the date of the contract. Therefore, any increase in the number of issued class “A” shares could require a corresponding increase in the number of warrants. As of December 31, 2003, these warrants were fully vested. During 2004, 8,850,000 of these warrants have expired without having been executed. As a result, 40,267 KEURs included in “Other deferred income” caption as of December 31, 2003, have been recognized as extraordinary income in 2004. Expiration date for the remaining warrants is November 2005. The fair values of the outstanding warrants are estimated based on quoted market prices of the underlying Amadeus class “A” shares at the balance sheet date and applying an appropriate valuation methodology. This methodology uses certain estimates, including the volatility of the Company´s share price. The cumulative unrealized gains resulting from the remeasurement of these warrants as of December 31, 2004, included in the “Other deferred income” caption, amounts to KEURs 7,708 (KEURs 48,070 as of December 31, 2003).


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b) Equity swap

In order to manage the exposure to a rise in its share price with respect to the warrants described above, the Group entered during the year 2000 into equity swap agreements which allowed Amadeus to buy 12,812,858 of its class “A” shares at an average price of EURs 10.32 or settle the difference with the market price in cash at any time until mid-2004. The financing costs relating to these agreements were at interest rates of 2.55% to 2.74% and 2.50% to 3.56% during 2004 and 2003, respectively. These costs are recognized in the “Financial expenses” caption and amount to KEURs 465 as of December 31, 2004 (KEURs 478 as of December 31, 2003). In November 2003, an equity swap agreement representing 1,812,462 class “A” shares was cancelled. As of December 31, 2004 all agreements have matured being converted into Treasury shares. Therefore, the current situation of these agreements is as follows:

Number of shares

December 31, 2003 Cancellations December 31, 2004 No interim cash settlement 4,500,000 (4,500,000) - Converted into Treasury shares 6,500,396 4,500,000 11,000,396 11,000,396 - 11,000,396

c) SITA Inc NV depository certificates

As of December 31, 2004 and 2003 the Group holds 3,214,200 depository certificates of SITA Inc N.V. issued by Stichting “the SITA Information Networking Computing Foundation” (“the Foundation”), representing 3,214,200 shares of SITA Inc NV, at a cost of KEURs 3,557, which is included in the “Long-term securities portfolio” caption.


44

22. EXTRAORDINARY INCOME AND EXPENSES The breakdown at December 31, is as follows: 2004 2003 Extraordinary expenses

Impairment (Note 6) 7,996 17,063 Goodwill adjustment (Note 9) 5,001 - Losses related to sale of Treasury shares (Note 13.2) 12,850 - Other equity instruments (5,205) (5,489) Losses on disposal of fixed assets 1,866 1,501 Others 2,613 891

25,121 13,966 Extraordinary income

Warrrants instruments (Note 21.3) 40,267 - Gains from Treasury shares provision (Note 13.2) 15,868 14,853 Gains on disposal of fixed assets 868 575 Other 4,328 2,166

61,331 17,594

23. TAXATION 23.1. The companies that make up the Group are all individually responsible for their own tax assessments and hence do not file a consolidated tax return. The majority of these companies are open to tax inspection according to local tax laws in each case. Income tax returns cannot be considered definitive until its expiration or acceptance by the Tax Authorities and, independently that fiscal legislation is susceptible to different interpretations, it is estimated that whatever additional fiscal liability may arise as a consequence of an eventual tax inspection will not have a significant effect on the consolidated financial statements considered as a whole. In this regard, in December 2003, the French Tax Authorities issued a tax assessment on Amadeus sas for the fiscal years 2000 and 2001. Irrespective of the final outcome of the administrative / legal process initiated then by the company, in case that the final tax assessment materialises, it will not have a significant effect on the consolidated annual accounts as of December 2004 due to the bilateral tax adjustment to be applied at group level. Additionally, the general tax audit initiated by the Spanish Tax Authorities over the Company in July 2004 is still in progress. The taxes and fiscal years under review are the Corporate Income Tax for the year 1999 to 2002 and remaining taxes (VAT, withholding taxes, etc.) for the year 2000 to 2002.


45

23.2. The reconciliation between the Statutory Income Tax rate in Spain and the effective income tax rate applicable to the Group for fiscal years ended December 31, is as follows: 2004 2003

Amount % Amount % Consolidated income before tax 326,081 - 258,870 - Tax calculated at statutory tax rate in Spain 114,128 35.0 90,605 35.0 Losses with no tax benefit recognition 8,012 2.5 4,071 1.6 Recognized tax credits for tax loss carry-forwards and deferred

tax assets (1,200) (0.4) (2,965) (1.1) Effect of higher tax rates in other countries 2,940 0.9 1,300 0.5 Tax effect for net results from associates and minorities (2,898) (0.9) 8,661 3.3 Permanent differences due to Goodwill amortization 8,464 2.6 8,179 3.2 Other permanent differences (8,148) (2.5) (1,174) (0.5) Other 88 - 41 -

Corporate Income Tax expense 121,386 37.2 108,718 42.0

23.3. As of December 31, 2004 and 2003, there are tax credits mainly due to exportation activities amounting to KEURs 16,188 and KEURs 10,731 that have been credited to income tax in 2004 and 2003, respectively. An additional amount of KEURs 32,262 will be applied in subsequent years. Tax credits for investments in subsidiaries and related companies as of December 31, 2004 and 2003, amount to KEURs 65,831 and KEURs 48,877, respectively, and are included in the “Other deferred income” caption. The European Commission has asked to the Spanish Government for the necessary information to analyse the export activity deduction to determine whether it constitutes being termed a state grant. The European Commission has not concluded its analysis yet, so the scope of the claim is still not known. With the situation as it stands, it is not possible to objectively determine any final impact on the Amadeus Group once the claim is resolved. In these consolidated financial statements, the Group has not recorded any provision for this concept as the Group estimates that the probable outcome will be the cancellation of the rebate in the short-term without the need to pay back rebates already received.


46

23.4 As of December 31, 2004 and 2003, details of tax receivables and payables are as follows: Receivable Payable

2004 2003 2004 2003

VAT 22,134 17,751 8,089 1,223 Deferred tax assets / liabilities 46,292 41,563 41,565 33,949 Tax receivable / payable 4,374 3,343 11,346 7,779 Income Tax 15,103 20,929 32,651 35,181 Others 3,107 624 4,770 2,495

Total short-term tax 91,010 84,210 98,421 80,627

Long-term deferred tax assets / liabilities 80,763 86,214 107,609 109,311 Tax receivable 32,262 25,131 - -

Total long-term tax 113,025 111,345 107,609 109,311

Tax receivable long - term includes tax credits as a result of the increase in export activities derived from new corporate acquisitions, to be applied in subsequent years.


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23.5 The Group’s deferred tax balances, short-term and long-term, as of December 31, are as follows: 2004 2003

Assets Unused tax losses 12,591 27,822 Finance leases 2,571 2,389 Net cancellation reserve 16,207 14,690 Depreciation and amortization 56,372 47,307 Bad debt provision 9,623 8,867 Hedge accounting 502 260 Provision for Treasury shares and other similar equity instruments 2,470 9,846 Employee benefits 7,202 7,305 Group company liquidation 3,907 - Dividends tax credits 4,165 2,965 Other 11,445 6,326

127,055 127,777

2004 2003 Liabilities Unrealized gains - foreign currency and financial instruments 3,426 459 Provision for decline in value of investments 73,204 68,618 Depreciation and amortization 40,201 33,717 Capitalization of IT related costs 9,388 5,679 Purchased intangible assets 18,922 16,806 Other 4,033 17,981

149,174 143,260

23.6. The following table shows the expiration date of unused tax losses, for which no deferred tax asset was recognized in the annual accounts due to the uncertainty of their recoverability as of December 31:

Year(s) of expiration 2004 2003

0-1 - 101 1-2 796 611 2-3 1,261 77 3-4 1,710 1,385 4-5 12,728 1,650

Unlimited 211,198 15,166

Total 227,693 18,990

The main increase in 2004 relates to the acquisition of Opodo Limited (UK).


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24. OTHER INFORMATION Total remuneration of all kinds to the members of the Board of Directors of the Company amounts to KEURs 426 in 2004 (KEURs 460 in 2003). No loans, advances or stock options have been granted to the members of the Board of Directors. Detail of significant interests in, and transactions, on their own behalf or on behalf of a third party, regarding, companies with activities similar to those of the Company on behalf of directors. In accordance with article 127, section 4 of the Spanish Corporation Law, introduced by Law 26/2003 on 17 July, which modifies the Stock Market legislation, Law 24/1988, of 28 July, and the text in reference to Bankruptcy of the Spanish Corporation Law, with the express purpose of enforcing the transparency of public listed companies, we report that no members of the Board of Directors have maintained financial interests in companies engaged activities that are the same, analogous or complementary to the principle activities of the Company. Similarly, and in accordance with the aforementioned text, any transactions performed by members of Board of Directors, on their own behalf or one behalf of a third party, in companies engaged in activities which are the same, analogous or complementary to those of the Amadeus Global Travel Distribution, S.A. are outlined below:

Name

Transaction realised

Name of third party on behalf of which the transaction was realised, if appropriate )

Role or function of the agent in the third party

Christian Boireau Third party Amadeus France SNC Board Member

Manuel López Colmenarejo

Third party Sistemas Automatizados Agencias de Viaje, S.A. Chairman

Professional fees for auditing services performed in the Company and its subsidiaries by its auditor Deloitte and related member firms amount to KEURs 1,404 and KEURs 1,248 for the years ended December 31, 2004 and 2003, respectively. Additionally, fees for audit related services such as due diligence and purchase audits and other professional services delivered to the Company and its member firms by its auditor Deloitte and related companies amount to KEURs 393 and KEURs 505 for the year ended December 31, 2004 respectively, and KEURs 725 and KEURs 906 for the year ended December 31, 2003, respectively.


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25. SUBSEQUENT EVENTS Amadeus has increased from 55.36% to 74.02% its stake, for EUR 80.4 million, in the pan-European on-line portal Opodo, with the corresponding proportional dilution of the other shareholders. The transaction was carried out within the context of the acquisition by Opodo of Karavel S.A., Quest and the integration of the wholly owned e-commerce subsidiaries for the Italian and Scandinavian market, of eviaggi.com and Travellink AB, respectively. The acquisition of 100% equity stake in Karavel, S.A. amounts approximately EUR 60 million in cash, plus the resulting amount of additional adjustments to the initial purchase price in relation to the working capital. Karavel is a leading online travel company in France, whose core expertise is in the pre-packaged holiday market. Its wholly owned subsidiary Promovacances, S.A is a well-known and respected brand, established in the French market since 1997, offering great value to travellers to a wide range of destinations and product types. Continuing the strategy of consolidating its global distribution network, Amadeus has increased its shareholding in SAVIA Amadeus, its Spanish national marketing and distribution company (NMC) for Spain and Portugal, from 34 to 100 per cent. SAVIA Amadeus, headquartered in Madrid (Spain), is one of Amadeus' largest markets worldwide in terms of bookings. The cost of the acquisition has been EUR 82.3 million in cash plus the resulting amount of additional adjustments to the initial purchase price in relation to the working capital. As it is of public domain, the major shareholders of the Company (Air France, Iberia and Lufthansa) initiated in the year 2004 a selection process among a group of financial investors for the acquisition of the Company. As already informed to the Spanish Stock Exchange Commission, the major shareholders together with BC Partners and Cinven have reached an agreement to launch a public tender offer over 100 per cent of Amadeus shares at a price of EUR 7.35 per share, with the final objective of de-listing the Company from the Stock Market. At this agreed price, the value of the Group amounts to EUR 4,340 million. As there is no more available information from these private negotiations, we cannot foresee the potential accounting impacts derived from this transaction. As a consequence of the above mentioned transaction, the stock option plans, according to their rules, would become immediately vested in the case of a change of control. The holders would have up to six months to exercise their options (see Note 20).

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CONSOLIDATED DIRECTORS´ REPORT OF AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A.

INTRODUCTION

According to IATA, 2004 was a year of strong recovery for the travel market. Indeed, traffic rebounded stronger than at any time since the 1991 Gulf War recovery. While full year data is not yet in, IATA estimates that 1.8 billion passengers traveled by air in 2004, an increase of 7.6% over 2003. Despite the fact that part of this growth has been fuelled by Low Cost Airlines, which have a limited participation in the GDSs’ screens, bookings volume in 2004 was very strong, both for the GDS industry and Amadeus. It should be kept in mind that air volumes were severely depressed in the first half of 2003 by SARS in Asia and the Iraq War weakening the base of comparison.

It is worth to mention that at the end of June 2004, Amadeus took a majority stake in the pan-European travel website Opodo. In spite of the consolidation of Opodo´s losses during the second half of the year, Amadeus Net Income reached an all time record of EUR 216 million, 44% higher than in 2003 and above market expectations. These results were achieved thanks to the rebound in travel and cost control measures.

Amadeus business activity is divided into three different line of business. Furthermore during 2004 we have increased our presence into e-comerce market through the acquisition of a controlling stake in the travel portal Opodo.

• Travel distribution

During 2004 Amadeus continued to increase the number of airlines showing real-time information in its system with 50 new airlines, including the newly created Spanish long haul carrier, Air Madrid. Other important additions to the system have been:

• The European rail operator, Eurostar became available on the Amadeus airline display in January 2004.

• National Car Rental and Fox Rent-a-car that are now under Amadeus Complete Access Plus

• Barcelo Hotels and Resorts and Envergure.

• Amadeus reached an agreement to get access to all published fares, including its web fares, from Delta Air Lines, Continental Airlines, United Airlines, Northwest Airlines and US Airways .

On the agency side Amadeus has signed a global partnership agreements with RADIUS, one of the world’s largest travel management company and ebookers moved its Travelbag brand to the Amadeus reservation system.

These are the most important acquisitions made during the year:

• In the first quarter we increased our participation in both Amadeus Brasil and Travellink. By the end of these operations we owned the 76% and 85% respectively.

• In the leisure arena, Amadeus expanded its agency and tour distribution offering through a strategic technology partnership with Comtec (Europe) Ltd, and acquired a 20% shareholding in the company.

• In July we announced the acquisition of a controlling stake in the travel portal Opodo.

2

• During the last quarter we acquired a significant stake of Optims, raising our shareholding from 30% to 96%.

• In December we concluded the acquisition of 100% of Amadeus France, acquiring the remaining 66% shareholding.

Finally during this year Amadeus started to pilot with British Airways one of the key elements of its new value-based pricing philosophy released in November 2003: the Low-Fare Distribution (LFD) model. This initiative was well received, more than 85 percent of Amadeus’ United Kingdom travel agency customers in terms of booking volume chose to opt-in to this programme which brings them access to British Airways' low fare inventory.

• IT Services

On the IT Services side Amadeus continues the successful development of the Amadeus Altea Customer Management Systems, which now has the following clients: British Airways, Qantas, Finnair, and the new 2004 clients dba and South African Airways.

During 2004 Amadeus has successfully migrated Qantas to Altea Plan and is now migrating British Airways.

During the fourth quarter, Amadeus consolidated its market leadership position in the area of electronic ticketing. Amadeus today provides e-ticketing hosting for 16 carriers with 88 interlining agreements implemented.

• E-Commerce

Amadeus e-Travel bookings grew by 72.9% for the full year 2004 compared with 2003. One of our products Amadeus’e-Travel Planitgo was voted “World’s Leading Internet Booking Engine” by the World Travel Association, recognising it as the airline industry’s internet booking engine of choice. Other important achievements have been :

• In May, e-Travel signed a major agreement with TQ3 Travel Solutions Singapore. As part of a multi-year agreement, TQ3, one of the world's largest providers of travel management services, delivers Aergo to its corporate customer base.

• In June Air Canada signed a five-year agreement with e-Travel to provide online booking technology and services to Air Canada's travel booking websites for consumers and travel agencies. Air Canada’s websites will be powered by Planitgo , including Planitgo Flex Pricer Calendar.

• In September, Lufthansa chose e-Travel and IBM to build and run its next generation internet portal. e-Travel will provide and operate the overall booking and faring solution and IBM will supply the consulting, solution development, maintenance and hosting operations.

• SAP Travel Management, powered by e-Travel, experienced 50% booking growth in 2004, thanks to growing adoption and new corporate customers, like Woodside Energy, Australia's leading oil and gas exploration and production company.

• Opodo

After the acquisition of 55.36%% of Opodo, this company is now fully consolidated.

The months of July and August were record months for Opodo with gross sales reaching an all time high. This was helped by strong growth in the French & German package holiday sales.

3

In September Opodo signed a Management Services Agreement with Eviaggi.com to take over the operational management of the Amadeus-owned Italian internet travel agency. During the next few months they will be looking at a potential deeper integration of Opodo’s products and services with Eviaggi.com, to maximise the synergies between the two companies

During the fourth quarter Simon Vincent was appointed Chief Executive Officer of Opodo, effective 1 November. Simon has over 20 years’ experience in the travel and financial services industries.

ECONOMIC RESULTS

Operating revenues

Amadeus Group revenues come mainly from the invoicing of:

a) Air bookings made through terminals installed both in travel agencies and the airlines’ direct sales offices, or via web pages connected to the Amadeus data processing center.

b) Non air bookings: Mainly hotel rooms, car rentals, train tickets as well as other travel services.

c) Information Technology services provided to British Airways and Qantas.

d) Other non-booking revenues mainly include the issuing fees of air tickets (both paper tickets and electronic ticketing), the sale of statistical information on airline bookings, fare quote services, interlink charges and subscriber fees, as well as the consolidated revenues from Vacation.com.

Revenues from air and non-air bookings increased by 78.1 million Euros in 2004. They represent an increase of approximately 5.4% when compared to the previous year, mainly due to the increase in booking volume, partially offset by adverse foreign exchange variances.

Other revenues grew 46.7 million Euros, including the e-commerce revenue increase mainly due to the acquisition of Opodo Limited, that contributes with 24.1 millions Euros.

The total number of bookings net of cancellations registered in 2004, excluding potential future cancellations from the open booking inventory, was 454.1 million, which represents an increase of 7.6% compared to previous year. This amount includes an additional 42.9 million non-air bookings of Amadeus Germany GmbH, so comparable bookings of 2004 were 411.2 million, which represents an increase of 6.7% compared to previous year.

The air bookings increase was 6.8%, representing 24.2 million bookings, while the non-air bookings (excluding the aforementioned Amadeus Germany GmbH bookings) raise a 5.4% or 1.6 million bookings.

The number of bookings in the European market (excluding the aforementioned Amadeus Germany GmbH non-air bookings) increased by 4.5% or 11.7 million bookings compared to last year. Additionally, in the Rest of the World markets (excluding North America) the increase was 14.7%, representing 13.4 million bookings, mainly due to the SARS effect virus crisis during 2003. In the North American market, bookings increased by 1.9% or 0.7 million bookings.

4

Operating Expenses

Operating expenses for the twelve months ended December 31, 2004 amounted to 1,737.6 million Euros, which represents an increase of 6.9% compared to the 1,626.1 million Euros registered in 2003. This variation is mainly due to:

• The increase in variable distribution cost because of the aforementioned increase in bookings.

• The effect of Amadeus Germany GmbH during the whole 2004 versus ten months in 2003.

• The recent acquisition of Opodo Limited.

• The effect of full integration of certain companies, as a result of the increase in the participation, previously reported in the associate line according to our shareholding percentage, like Optims S.A., Travellink AB and Amadeus Brasil Ltda.

The most significant operating expense is the distribution fee paid to third parties (i.e., companies that are not consolidated by the purchase method). This includes mainly National Marketing Companies (NMCs) and system users for bookings made in Travel Agencies and certain Airlines ticketing offices (ATOs/CTOs). Total expenses corresponding to distribution fees during 2004 were 664.7 million Euros, representing an increase of 4.8% compared to the previous year, where total distribution fees were 634.5 million Euros.

Operating expenses, other than distribution fees, include mainly the following concepts:

• Salaries and social charges, which during 2004 increased by 4.5%.The average number of employees of the Amadeus Group for the year ending December 31, 2004 is 5,760 (5,257 employees in 2003).

• Amortization expenses, which decreased by 2.6% during 2004 compared to 2003.

• External services expenses, which include among others general and administrative expenses; operating expenses relating to the development and maintenance of pricing and reservation system software and Travel Agencies software, which is mainly developed to facilitate access to the system; central activities of publicity, public relations and conventions; and support activities to the NMCs relating to documentation, training and technical solutions to access the system. External services expense increased by 15.8% during 2004 compared to 2003, mainly due to the aforementioned reasons.

Operating profits and net results

Operating profit was 376.9 million Euros during 2004, representing an increase of 4.3% from 2003 results of 361.5 million Euros.

The decrease in the Net loss from financial activity reported as of December 31, 2004 and 2003, amounting to 9.7 million Euros and 17.1 million Euros respectively reported as of December 31, 2003 is mainly due to the reduction in the non-operating exchange losses.

The share in result from associate companies under the equity method have improved from the year ended 31 December 2003 losses of 4.7 million Euros to the year ended 31 December 2004, earnings of 5.7 million Euros. This increase is mainly due to the net effect of:

• The full integration of certain companies with losses, as a result of the increase in the participation like Amadeus Brasil Ltda (February 2004), and Travellink AB (March 2004).

5

• During 2003 the associate line was harmed with the negative result of Vivacances, S.A., which became subsidiary in December 2003.

• The profit increase in companies like Red Universal de Marketing y Booking Online (Rumbo), S.A., and ITA (Internet Travel Agent), Inc.

The Net extraordinary income is 36.2 million Euros during 2004, while 2003 extraordinary income was 3.6 millions euros. This increase is mainly due to the profit arisen from the due date of the warrants issued to British Airways and Qantas, that have expired without having been executed.

Net results for the year ended December 31, 2004, was 216.4 million Euros, compared to 150.1 million Euros for the same period in 2003.

FINANCIAL RISK MANAGEMENT

Given Amadeus Group’ capital structure currently in place, its main financial risk derives from its foreign exchange exposures.

The Amadeus FX Risk Management Policy ensures that business exposures to foreign exchange risks are identified, measured and managed by using the most effective and efficient methods to eliminate, reduce, or transfer such exposures. 2004 is the third full year under Amadeus FX Risk Management Policy as approved by the Board of Directors on September 24, 2001.

According to this Policy there are three different categories of FX exposures: operating exposures, transactional exposures and exposures in net equity investments in foreign subsidiaries. For each of these categories, Amadeus FX Risk Management Policy sets a different approach:

• Operating exposures : the Group has put in place an active mid-term (3 year horizon) hedging approach for operating exposures (the target operating exposures are defined in the form of EBITDA flows).

The goals of the Foreign Exchange Risk Management Policy for this risk category are twofold: reducing the volatility of Amadeus’ operating result due to movements in the foreign exchange rates, and additionally, adding some economic value through an active hedging strategy.

In every moment the risk management strategies implemented must be within the limits set up in the Annual Foreign Exchange Treasury Plan approved by the Board of Directors. The aforementioned limits are checked before the implementation of any change in the hedging strategy and on monthly basis.

• Transactional exposures: In accordance with the Foreign Exchange Risk Management Policy, Amadeus follows a passive hedging approach for this risk category, aiming to minimize the foreign exchange gains or losses in the Group statement of income.

• Exposures in net equity investments in foreign subsidiaries : Our target in the hedging of these assets is to protect, in the long term, the EUR value of the foreign currency denominated equity investments through an active hedging strategy.

6

RESEARCH AND DEVELOPMENT ACTIVITIES

The research and development policy (R&D) for the Amadeus Group is a relevant tool to obtain competitive advantage, to increase efficiency and to improve the Amadeus System functionality as well as to reduce the maintenance and operating costs.

The constant process of modernization that the Group performs to its systems requires that the R&D center located in Nice continuously develops products using the latest state-of-the-art technology available.

During 2004 Amadeus has expensed 98.2 million Euros for R&D activities and capitalized 57.5 million Euros in software development projects.

Amadeus keeps on investing to improve administrative products targeting multinational Travel Agencies. These products have as their main objective the automation of the transmission of booking data during the billing process and the management of customer accounts and its consolidation at a branch or central level.

Amadeus, continuing with 2003 activity, has dedicated part of the resources for R&D to the development and implementation of a common platform for the information technology services (“New Generation Platform”) as the basis to market the offering of its information technology services line of business to airlines.

TREASURY SHARES

As of December 31, 2004, the Treasury shares portfolio is composed of 19,105,670 Class “A” shares, equivalent to 0.83% of the share capital of the Company with a nominal value of EUR 191,056.7. The accounting value of these Treasury shares at year-end, having deducted the provision for the decline in value, amounts to EUR 84,716,423.

The Treasury shares portfolio is assigned almost totally to a specific purpose, i.e. the hedging of commitments incurred by the Group in connection with the remuneration systems consisting of stock option plans for employees and senior executives or hedging of stock options granted by the Group in partial consideration of commercial transactions carried out by the Group (warrants).

The Ordinary General Assembly celebrated on June 14, 2004, authorized the Board of Directors to proceed, in one or more acts, with the acquisitions of Treasury shares by the Company itself and by companies of its group, both directly as well as indirectly, as the case might be, in accordance with Article 75 of the Spanish Corporations Law. The maximum number of shares to be acquired cannot exceed 5% of the total Class “A” shares, provided that the total par value of the shares to be acquired from the date of the General Assembly of Shareholders’ meeting together with the total par value of the existing Treasury shares prior to this date does not exceed 5% of the share capital of the Company. The maximum and minimum price to be paid is 125% and 75% respectively of the Stock Market value at the acquisition date. The Board of Directors may use the Treasury shares in consideration of business and corporate transactions, stock loans, hedging of financial risk derived from commercial transactions, as well as disposal and application of current remuneration systems consisting of the stock grant and stock option plans for employees and senior executives. The authorization is valid for 18 months from the date of celebration of the Ordinary General Assembly, leaving without effect the previous authorization conferred by the Ordinary General Assembly celebrated on June 20, 2003.

The Group purchased 11,563 Class “A” shares and disposed of 908,736 Class “A” shares during the calendar year 2004, in order to fulfill its obligations related to the stock incentive plans for employees and/or senior executives. At the same time, a re-assignment of 5,800,000 Class

7

“A” shares has taken place during the year with the purpose of matching the current commitments of the Group in connection with the stock option plans for employees. The global result of all the aforementioned transactions represents a nominal value of EUR 8,971.73, equivalent to 0.03% of the share capital of the Company.

In addition, during the calendar year 2004, the Group purchased 4,500,000 Class “A” shares, as a result of the maturity of an equity swap agreed with a financial institution for hedging the financial risk derived from the warrants granted to British Airways. This transaction represents a 0.19% of the share capital of the Company, with a nominal value of EUR 45,000.

RELEVANT FACTS OCCURRED AFTER THE CLOSING OF THE YEAR

Amadeus has increased from 55.36% to 74.02% its stake, for EUR 80.4 million, in the pan-European on-line portal Opodo, with the corresponding proportional dilution of the other shareholders. The transaction was carried out within the context of the acquisition by Opodo of Karavel S.A., Quest and the integration of the wholly owned e-commerce subsidiaries for the Italian and Scandinavian market, of eviaggi.com and Travellink AB, respectively. The acquisition of 100% equity stake in Karavel, S.A. amounts approximately EUR 60 million in cash, plus the resulting amount of additional adjustments to the initial purchase price in relation to the working capital. Karavel is a leading online travel company in France, whose core expertise is in the pre-packaged holiday market. Its wholly owned subsidiary Promovacances, S.A is a well-known and respected brand, established in the French market since 1997, offering great value to travellers to a wide range of destinations and product types. Continuing the strategy of consolidating its global distribution network, Amadeus has increased its shareholding in SAVIA Amadeus, its Spanish national marketing and distribution company (NMC) for Spain and Portugal, from 34 to 100 per cent. SAVIA Amadeus, headquartered in Madrid (Spain), is one of Amadeus' largest markets worldwide in terms of bookings. The cost of the acquisition has been EUR 82.3 million in cash plus the resulting amount of additional adjustments to the initial purchase price in relation to the working capital. As it is of public domain, the major shareholders of the Company (Air France, Iberia and Lufthansa) initiated in the year 2004 a selection process among a group of financial investors for the acquisition of the Company. As already informed to the Spanish Stock Exchange Commission, the major shareholders together with BC Partners and Cinven have reached an agreement to launch a public tender offer over 100 per cent of Amadeus shares at a price of EUR 7.35 per share, with the final objective of de-listing the Company from the Stock Market. At this agreed price, the value of the Group amounts to EUR 4,340 million. As there is no more available information from these private negotiations, we cannot foresee the potential accounting impacts derived from this transaction.

The stock option plans, according to their rules, would become immediately vested in the case of a change of control. The holders would have up to six months to exercise their options.

8

AUDIT COMMITTEE

Annual Report 2004 of the Audit Committee of the Board of Directors of Amadeus Global Travel Distribution S.A.

According to article 44.2 c) of the Regulations of the Board of Directors of Amadeus Global Travel Distribution, S.A., the Board of Directors' Audit Committee must draw up an annual report on the Committee's activities for inclusion in the Directors´ Report, which must be drawn up by the Company's Board of Directors and approved by the General Shareholders’ Meeting, as appropriate.

In order to meet this obligation, the Board of Directors' Audit Committee drew up the Audit Committee’s Annual Report 2004 to be submitted to the Company’s Board of Directors, in the Meeting held on March 11, 2005, under the Chairmanship of Mr. Friedrich Fröschl and attended by all of its Members.

Introduction

The Audit Committee of the Board of Directors of Amadeus Global Travel Distribution, S.A. was set up on September 21, 2000, by virtue of a resolution adopted by the Board of Directors in a Meeting held on such date, within the framework of Corporate Governance´ practices and the recommendations of the Olivencia Code.

The Committee's duties and operating regulations are set out in article 25 of the Company's By-laws and developed in the Regulations of the Board of Directors (Article 43 et seq.), current version of which was approved by the Board on June 20, 2003, following the Report by the Special Commission to Foster Transparency and Security in the Markets and Listed Companies, dated January 8, 2003 (the Aldama Report), registered with the Spanish Securities and Exchange Commission on July 4, 2003, with registration number 2003069515 and filed with the Commercial Registry on July 21, 2004.

The full contents of the regulations are available on the Company’s website (www.amadeus.com) in the INVESTORS, CORPORATE GOVERNANCE section.

Competence and duties of the Audit Committee

The basic duty of the Audit Committee is to support the Board of Directors in its supervisory tasks, by means of regular review of the process for drawing up the economic-financial information, its internal controls and the independence of the external Auditors.

The Committee is obliged to report to the General Shareholders' Meeting on the issues that the shareholders may raise therein concerning the issues for which the Commission is competent, as well as to supervise the internal audit services.

The Audit Committee is responsible for drawing up the proposal for a resolution by the Board of Directors on the appointment of the External Auditors of the Company, extending the term of office and dismissal thereof and on the terms and conditions of their contract.

It is also responsible for receiving information on any issues that could jeopardize the independence of the external Auditors and any others related to the process of the development of the accounting audit, as well as any other notifications set forth in accounts audit law and the technical audit rules.

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In particular, the Audit Committee is responsible for studying, reporting and reviewing the following issues or questions:

a. Audit issues

- The financial statements regularly submitted to the Board of Directors Meeting.

- The regular information submitted to the Securities Exchanges in which the securities issued by the Company are traded.

- The annual accounts and the Management Report submitted to the Board of Directors Meeting to be drawn up pursuant to law.

- The Accounts Audit Report, with special attention to that set forth in Article 210.2 of the Spanish Corporations Law.

- The replies of the management bodies of the Company to the recommendations made by the Accounts Auditors regarding the audit of the financial year.

- Specific investment transactions or of any other kind not included in the annual budget, when the importance thereof makes it advisable.

- The prospectus for issuing securities and, in general, any financial public information of the Company.

b. Control issues

- Knowledge of the financial information process and policies and internal control policies and procedures of the Company regarding expenditure, investment, etc.

- Codes of Conduct of the Senior Management staff of the Company.

- Internal Code of Conduct for matters related to the Securities Markets.

- Internal control systems, proposing, when appropriate, the relevant modifications.

- Accounting practices and principles used to draw up the annual accounts of the Company.

- Supervision of the internal audit services.

c. Fulfillment issues

- The policies and procedures implemented to ensure the due fulfillment of the Rules in the different scopes of action of the Company and its subsidiaries and affiliates companies.

- Receive information and, when appropriate, issue a report on the disciplinary measures related to members of the senior executive team of the Company and its subsidiaries and affiliates companies.

- Inform the General Shareholders Meeting of the issues proposed by the shareholders within its competence.

- Drawing up an annual report on the activities of the Audit Committee to be included in the Management Report.

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- Drawing up the required reports so that the Board may issue the Annual Corporate Governance Report.

Additionally, the Audit Committee studies any other matter that is submitted by the Board of Directors’ Meeting or by the Chairman.

Members of the Audit Committee

The Audit Committee is made up of four members, two of which must be independent directors.

On December 31, 2004, the members were as follows:

Director Kind of Director Position

Dr. Friedrich Fröschl External independent Chairman

Mr. José Caparrós External independent Member

Mr. Enrique Dupuy de Lôme External owner's representative Member

Mr. Philippe Calavia External owner's representative Member

Appointments are made for two-year periods, although the Chairman, who must be an Independent Director, may hold the position for up to four years and may be reelected once one year has elapsed after he/she has left the position.

The dates of appointment and respective expiry dates for each of the members of the Audit Committee are as follows:

Appointment Expiry

Dr. Friedrich Fröschl 27 Sep 2002 27 Sep 2006

Mr. José Caparrós 14 Nov 2003 27 Sep 2006

Mr. Enrique Dupuy de Lôme 27 Sep 2002 27 Sep 2006

Mr. Philippe Calavia 27 Sep 2002 27 Sep 2006

The Board of Directors resolved, in the meeting held on September 20, 2004, to renew in their seat to all the members of the Committee for an additional two years term.

The Audit Committee resolved, in the meeting held on December 3, 2004, to renew Dr. Fröschl appointment as Chairman of the Audit Committee for an additional two years term. When this two years term expires in December 2006, Dr. Fröschl will have complete the maximum period for which he can be appointed as Chairman of the Audit Committee.

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Operating procedures

The Audit Committee meets regularly after being called by the Chairman.

In order to do this, the Secretary of the Board draws up an Agenda for the approval of the Chairman of the Committee. This is sent to all the participating Members before the Meeting, together with the relevant documents for each of the items on the Agenda.

The Committee held four Meetings in the financial year 2004:

- March 18, 2004

- May 27, 2004

- December 3, 2004

As well as the Committee Members, the following executives of Amadeus’ Management team regularly attended the Meetings:

- Mr. José Antonio Tazón, President and Chief Executive Officer (CEO)

- Mr. Luis Maroto, Chief Financial Officer (CFO)

- Mr. Agustín Rodríguez, Director of Internal Audit

- Mr. Tomás López Fernebrand, Secretary of the Board of Directors, who acts as Secretary of the Committee

- Mr. Jacinto Esclapés, Vice-Secretary of the Board

plus the external auditors, Deloitte, represented by the members responsible for auditing the Company’s annual accounts.

The Committee Secretary draws up Minutes of the conclusions reached in each Meeting. These are included as an item on the Agenda for the next Board of Directors Meeting, in which the Chairman of the Committee informs the Board of the most relevant points covered and, when appropriate, the recommendations made.

Matters dealt with by the Audit Committee in the financial year 2004

The Agenda for each of the Audit Committee Meetings has three regular sections and others that may be included in the Agenda for discussion, analysis and recommendations, as applicable, depending on the matter in question.

The three regular sections are the External Audit, the Internal Audit and Corporate Governance. The main issues covered in the financial year 2004 are detailed below.

External Audit:

In this section, the External Auditors inform the Audit Committee of the most relevant aspects of the work in progress on the audit and regular quarterly information, as well as important accounting aspects, including the application of accounting standards. Whenever there are any, they point out any discrepancies between the Company management and the Auditors regarding specific points.

The matters dealt within the financial year 2004 included the following:

- The Company's financial statements for the financial year 2003 (using Spanish accounting principles and International Financial Reporting Standards) to be drawn up by the Board of Directors.

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- Reconciliation of the financial statements in line with Spanish Accounting Principles and International Financial Reporting Standards.

- The Auditors’ opinion.

- Review of the quarterly results.

- Results of the impairment analysis.

- Pre-closing of year-end 2004.

- Significant acquisitions.

- Cancellation provision analysis.

- Status on tax credits for foreign acquisitions.

- Accounting policies (derivatives accounting treatment).

- Annual Foreign Exchange Treasury Plan.

- Benchmark of annual dividends.

- Application of International Financial Reporting Standards and analysis of the impact of the Standards under review.

- Group tax inspections in progress.

Internal Audit:

In this section, the Director of Internal Audit reports to the Audit Committee on the status of the internal audits carried out on the Group Companies, as well as the status of the recommendations made by the Internal Auditor, and the extent to which they have been implemented and performed. The general scope of audits covers the suitability and effectiveness of the internal control systems (SECS), unless an audit has a more specific scope.

For this purpose, the Director of Internal Audit presents the Audit Committee with an Audit Plan for that year. This serves as a basis to monitor the audits. The Director of Internal Audit regularly submits the results of the audits carried out on the Group Companies.

Internal audits were issued on the following Group Companies in the financial year 2004:

Company Scope

- Amadeus Argentina, S.A. SECS

- Sistemas de Reservaciones CRS de Venezuela,

C.A. SECS

- Amadeus Services, Ltd. SECS

- Amadeus sas (follow-up of implementation of

recommendations of prior audits).

- Amadeus Central and West Africa, S.A. SECS

- Amadeus Global Travel Israel Ltd. SECS

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- Amadeus GTD y Amadeus Taiwan (specific analysis of financial flows).

- Amadeus Germany GmbH Partial audit

No material consequence arisen in the internal audits that required the intervention of the Audit Committee.

Corporate Governance

This section, which is a regular section in all of the Audit Committee Meetings, is the result of the efforts made regarding the transparency necessary in financial markets and the Company's and the Board's commitment to the shareholders, not only regarding the transparency of quantitative information (economic information), but also qualitative information and, more specifically, with regards to Corporate Governance practices in the companies.

The Secretary of the Board of Directors reports on the progress made in these areas in each of the Committee Meetings. In this regard, the Audit Committee has been informed on the creation of the new Corporate Web Page once adapted to the requirements established by the Spanish Stock Exchange Commission, as well as on the development of the Regulations of the General Shareholders Meeting and on the amendments to the By-Laws of the Company, following the new legal corporate governance environment.

As par of the Group Audit Plan for the year 2005, the Committee has requested the Internal Audit Department to review and report on the compliance by the Company with the Corporate Governance practices.

*************************

14

BOARD OF DIRECTORS

Composition refers to the date of adoption of the Consolidated Annual Accounts and Consolidated Directors’ Report.

CHAIRMAN

Pierre-Henri Gourgeon

DIRECTORS

Manuel López-Colmenarejo

Enrique Dupuy de Lôme

Karl-Ludwig Kley

Philippe-Clément Calavia

Christian Boireau

Bruno Matheu

Silvia Cairo

José Caparrós

Francis Lorentz

Friedrich Fröschl

SECRETARY (non Director)

Tomás López Fernebrand

VICE-SECRETARY (non Director)

Jacinto Esclapés Díaz

Madrid, 29th of March of 2005

Amadeus Global Travel Distribution, S.A. Report on agreed-upon procedures with respect to the reconciliation of the consolidated shareholders’ equity and net income as of December 31, 2004 and 2003 as included in the consolidated financial statements prepared under International Financial Reporting Standards and those prepared in accordance with Generally Accepted Accounting Principles in Spain.

RECONCILIATION OF IFRS CONSOLIDATED FINANCIAL STATEMENTS TO SPANISH GAAP FINANCIAL STATEMENTS WITH REGARD TO NET INCOME AND SHAREHOLDERS’ EQUITY. Amadeus Global Travel Distribution, S.A. (“the Company”) and its consolidated subsidiaries (“the Group”) prepare consolidated annual accounts in accordance with generally accepted accounting principles in Spain (Spanish GAAP). The Group also prepares consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”). In general, the classifications of balances in the financial statements differ under Spanish GAAP and International Financial Reporting Standards and different levels of disclosure are also required in the respective notes. Furthermore, under Spanish GAAP it is not obligatory to include statements of cash flow, nor a calculation of earnings per share. The main differences affecting net income and shareholders’ equity for the years ended December 31, 2004 and 2003 are set out below. Figures are expressed in thousand (K) Euros. Reconciliation of Net Income

For the years ended December 31,

Note 2004 2003 (Unaudited) Net Income-Spanish GAAP 216,367 150,127 Adjustments for IFRS purposes:

Acquisition of Amadeus Operations KG 1 23,826 23,309 Treasury shares and other similar equity instruments 2 (5,602) (13,179) Public Offering expenses 3 2,512 3,194 Unrealised exchange gains 4 1,718 2,277 Accounting for financial instruments 5 (1,868) (1,467) Equity related instruments 6 (26,437) (4,147) Impact new acquisitions (after 31/03/04) and others 7 (2,484) -

Net Income-IFRS 208,032 160,114

Reconciliation of Shareholders’ Equity

For the years ended December 31,

Note 2004 2003 (Unaudited) Shareholders’ equity Spanish GAAP 1,063,930 903,141 Adjustments for IFRS purposes:

Acquisition of Amadeus Operations KG 1 (71,147) (94,973) Treasury shares and other similar equity instruments 2 (87,129) (107,316) Public Offering expenses 3 - (2,512) Unrealised exchange gains 4 8,890 7,172 Accounting for financial instruments 5 14,258 18,815

Equity related instruments 6 5,406 33,386 Impact new acquisitions (after 31/03/04) and others 7 (2,484) -

Shareholders’ equity-IFRS 931,724 757,713

Explanatory analysis of differences 1. Acquisition of Amadeus Operations KG

In accordance with IFRS, the acquisition of Amadeus Data Processing GmbH and Co. KG (Amadeus Operations KG - a German company), which took place at the end of 1997, was accounted for in a manner similar to a pooling of interests. Accordingly, the prior periods’ financial statements, prepared in accordance with IFRS, included the combined results of operations, financial position and cash flows of Amadeus Operations KG as though it had always been a subsidiary of the Company. The price paid to the shareholders was accounted for as a reduction in shareholders’ equity (retained earnings), while the deferred tax asset corresponding to the tax credit for the future amortization of goodwill was accounted for as an increase in shareholders’ equity (retained earnings). In accordance with Spanish GAAP, this transaction was accounted for as an acquisition, recording the resulting goodwill, which is being amortized over a period of 10 years.

2. Treatment of acquired Treasury shares and other similar equity instruments

In accordance with IFRS, Treasury shares and other similar equity instruments must be shown in the balance sheet as a deduction from Shareholders’ equity. Under Spanish GAAP, Treasury shares and other similar equity instruments, which are primarily designated to cover specific commitments, are presented as assets. Under Spanish GAAP, treasury shares designated to cover specific commitments, are stated at the lower of cost, market value or exercise price. Treasury shares not designated to cover specific commitments are recorded at the lower of cost, market or net book value. The difference between cost and market price is accounted for in the income statement, while the difference between the market price and the net book value is recorded against reserves. Other similar equity instruments (see description in note 6e) are recorded and valued at the lower of cost or market.

3. Public Offering expenses

In accordance with IFRS, expenses relating to the Public Offering for subscription of shares are considered as a reduction in Shareholders’ equity and deducted from additional paid-in capital. Under Spanish GAAP, such expenses are capitalised and amortised over a period of five years.

4. Unrealized exchange gains

In accordance with IFRS, unrealized exchange gains are recognized currently in the statement of income. Under Spanish GAAP, in general terms, unrealized exchange gains are deferred until they are realized.

5. Accounting for financial instruments

The Group uses derivative financial instruments to hedge certain currency and interest rate exposures. Under IFRS, all of these derivatives, whether designated as hedges or not, are recorded at fair value as follows: a) Cash flow hedges (i.e. forecasted foreign currency revenue flows or future floating

interest expense flows): Effective gains or losses resulting from re-measurement to fair value are included directly in retained earnings. Amounts shall remain in equity until the committed or forecasted transaction occurs, at which point they will be reclassified to earnings in the Revenue caption. Ineffective gains or losses are recorded directly in the statement of income in the exchange gains and losses caption.

b) Hedges of the net investment in a foreign entity: Effective gains or losses resulting from re-measurement to fair value are included in cumulative translation adjustments. Ineffective gains or losses are recorded directly in the statement of income in the exchange gains and losses caption.

c) No hedge accounting: Gains or losses from derivatives not designated or qualifying for hedging treatment are accounted for directly in the statement of income in the exchange gains and losses caption.

For Spanish GAAP, these derivative instruments are accounted for as follows: a) Cash flow hedges (i.e. forecasted foreign currency revenue flows or future floating

interest expense flows): No re-measurement to fair value is performed until the committed or forecasted transaction occurs (except for monetary assets or liabilities which are designated as hedges of future cash flows, in which case effective gains and losses resulting from re-measurement are deferred until the future forecasted transaction occurs). When the underlying transaction occurs, unrealised gains and losses obtained from re-measurement to fair value are accounted for in the statement of income to the extent that the revaluation of the underlying asset or liability is also included in the statement of income. Ineffective unrealized gains are deferred on the balance sheet and ineffective unrealized losses are recognized directly in the statement of income.

b) Hedges of the net investment in foreign entities: Effective gains or losses obtained from re-measurement to fair value are included in cumulative translation adjustments. Ineffective unrealized gains are deferred on the balance sheet and ineffective unrealized losses are included in the statement of income.

c) Hedges of monetary assets and liabilities: For consistency purposes with respect to the valuation of the underlying assets and liabilities, unrealized losses obtained from re-measurement to fair value are deferred, and unrealized gains are recorded on the statement of income.

d) No hedge accounting: Unrealized losses from derivatives not designated or qualifying for hedging treatment are accounted for directly in the statement of income, whereas unrealized gains are recorded as deferred income on the balance sheet.

6. Equity related instruments

In conjunction with certain transactions the Group is party to certain equity related instruments. Under IFRS these equity related instruments are accounted for as follows: a) Warrants issued by the Group, where the holder has the right to request settlement in

cash, are stated at market value, with unrealised gains or losses recorded in the statement of income.

b) Warrants issued by the Group, where the holder does not have the right to request settlement in cash, are stated at market value and are accounted for as additional paid-in capital, with no subsequent recognition of movements in fair value.

c) Warrants or options received on shares of other companies are recorded as derivative financial assets, and measured initially at cost, which is the fair value of the consideration given. Subsequent re-measurement of the fair value of these financial assets is performed at their fair values and unrealized gains or losses are included in the statement of income. When fair value cannot be reliably determined, these derivative financial assets are reflected in the balance sheet at cost.

d) Investments in companies over which the Group does not have significant influence or control are recorded as financial assets available-for-sale, and measured at their fair values, with unrealized gains or losses recorded in the statement of changes in shareholders’ equity. When fair value cannot be reliably determined, these investments are reflected in the balance sheet at cost.

e) Equity swap agreements, entered into in order to manage the exposure to a rise in the Group’s share price with respect to warrants issued, are considered as derivative financial instruments when they include interim cash settlement features that are in substance similar to a form of collateral, and therefore do not qualify as an equity instrument. In such cases, unrealized gains or losses arising from re-measurement to fair value are recorded in the statement of income. However, when no interim cash settlement feature exists, the equity swap agreements qualify as equity instruments and the underlying shares are treated similar to Treasury shares and are presented as a reduction in shareholders’ equity.

For Spanish GAAP purposes, in general, these equity related instruments are stated at market value as of the balance sheet date. Unrealised losses are accounted for in the statement of income and unrealised gains are recorded as deferred income on the balance sheet. However, the following additional items should be mentioned with respect to the sections referred to above: b) – this section does not apply as the existence of a cash settlement option is irrelevant for Spanish GAAP, and, therefore, all warrants issued are stated at market value as described previously in this paragraph; d) - investments in companies over which the Group does not have significant influence are accounted for at the lower of cost or market; and e) - the differences in accounting for equity instruments treated similar to Treasury shares are described in section 2.

7. Impact of new acquisitions (after 31/03/04) and others

In accordance with IFRS 3, goodwill arising from new acquisitions made after March 31, 2004 will not be amortized but will be subject to periodic impairment tests and any resulting losses will be recognized in the statement of income. Under Spanish GAAP, the aforementioned goodwill is amortized lineally over 4-10 years. Additionally, under IFRS certain investment tax credits have been charged to the statement of income, while under Spanish GAAP have been reversed against deferred income.

Amadeus Global Travel Distribution, S.A. Auditors’ Report, Annual Accounts and Directors’ Report for the Year Ended December 31, 2004

“Free translation of an audit report and of annual accounts originally issued in Spanish and prepared in accordance with generally accepted accounting principles in Spain. In the event of a discrepancy, the Spanish-language version prevails. Certain accounting practices applied by the Company that conform with generally accepted accounting principles in Spain may not conform with generally accepted accounting principles in other countries”.

CERTIFICATION


C E R T I F I E S

That the statutory annual accounts and the Directors'report for the year ended as ofDecember 31, 2004, attached to this Certification, are a true copy of the English translation ofthe statutory annual accounts and the Directors'report originally issued in Spanish, drawn-upby the Board of Directors of AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A., in themeeting held in Madrid, on 29 March 2005, in accordance with Article 171 of the SpanishCorporations Law, for submission to the resolution of the Ordinary General Assembly ofShareholders of AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A.


THE VÍCE-SECRETARY

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. BALANCE SHEETS AS OF DECEMBER 31 (EXPRESSED IN THOUSANDS OF EUROS - KEURs)

See the accompanying notes to the annual accounts

ASSETS 2004 2003 Fixed assets 1,199,814 1,140,509 Start-up expenses (Note 5) - 3,864 Intangible fixed assets (Note 6) 58,670 71,003

Research and development expenses 537 537 Patents, licenses and trademarks 21,598 21,481 Intangible rights 106,448 110,306 Software 10,584 14,463 Accumulated amortization (80,497) (75,784)

Tangible fixed assets (Note 7) 6,651 6,843

Furniture and office equipment 1,102 1,150 Other tangible fixed assets 25,576 24,334 Accumulated depreciation (20,027) (18,641)

Investments (Note 8) 1,049,776 984,503

Investments in Group companies 1,188,009 928,166 Loans to Group companies 79,231 45,335 Investments in related companies 53,991 125,865 Loans to related companies 3,977 4,813 Long-term securities portfolio 10,123 43,739 Other long-term loans 6,855 53,153 Other long-term assets 9,492 15,013 Long-term tax receivable (Note 20) 107,454 87,757 Provisions (409,356) (319,338)

Treasury shares (Note 12) 84,717 74,296 Deferred expenses (Note 9) 6,541 8,536 Current assets 415,640 399,761 Receivables 302,964 285,113

Trade accounts receivable (Note 10) 272,831 241,745 Accounts receivable - Group companies 20,237 12,806 Accounts receivable - related companies 4,641 9,588 Other accounts receivable (Note 11) 9,955 17,067 Employee advances 326 52 Tax (Note 20) 47,197 47,700 Provisions for doubtful accounts (52,223) (43,845)

Short-term financial investments 110,518 109,423

Loans to Group companies 8,667 7,763 Dividends from Group Companies 50,004 75,317 Loans to related companies 1,228 123 Other loans 410 246 Deposits 56,809 25,974 Provisions (6,600) -

Cash 1,207 4,158 Prepaid expenses 951 1,067 Total 1,621,995 1,548,806

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. BALANCE SHEETS AS OF DECEMBER 31 (EXPRESSED IN THOUSANDS OF EUROS - KEURs)


LIABILITIES AND SHAREHOLDERS' EQUITY 2004 2003

Shareholders' equity (Note 12) 1,006,663 850,779

Share capital 23,044 27,898 Additional paid-in capital 425,850 436,830 Legal reserve 7,468 7,468 Treasury shares reserve 109,499 98,519 Other reserves 232,934 130,037 Net income for the year 207,868 150,027

Deferred income 86,154 111,111

Unrealized exchange gains 12,615 13,737 Other deferred income 73,539 97,374

Provisions for liabilities 6,989 17,115

Other provisions (Note 8) 6,989 17,115

Long-term liabilities 27,638 61,038

Other long-term liabilities (Note 14) 27,638 61,038

Short-term liabilities 494,551 508,763

Short-term debts with financial institutions (Note 13) 696 63,236

Accounts payable - Group and related companies 340,536 308,718

Accounts payable - Group companies 332,172 292,463 Accounts payable - related companies 8,364 16,255

Trade creditors 133,399 111,213

Trade accounts payable (Note 10) 133,399 111,213

Non-trade creditors 18,506 24,022

Tax (Note 20) 1,432 2,036 Other accounts payable (Note 11) 12,233 16,495 Personnel related 4,841 5,491

Accruals 1,414 1,574

Total 1,621,995 1,548,806

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF EUROS - KEURs)


DEBIT 2004 2003 Expenses

Personnel expenses Salaries 24,455 24,386 Social benefits 6,265 5,730 Depreciation and amortization of fixed assets 26,195 29,244 Net change in short-term provisions 11,842 9,846 Other operating expenses External services 27,139 17,175 Local taxes 184 179 Other operating expenses (Note 16.3) 1,658,577 1,560,752

Total operating expenses 1,754,657 1,647,312

Operating income 151,028 155,259

Financial expenses For debts with Group and related companies 2,173 1,984 Other financial expenses with third parties 4,785 11,983 Exchange losses 37 -

Total expenses from financial activity 6,995 13,967

Net income from financial activity 128,519 89,567

Income before extraordinary items 279,547 244,826

Provisions for long-term investments (Note 8.6) 96,414 82,973 Losses on disposal of fixed assets 17 451 Losses related to treasury shares 12,850 5 Extraordinary losses 601 11,890

Total extraordinary expenses (Note 19) 109,882 95,319

Net income before tax 239,945 165,786

Corporate income tax (Note 20) 32,077 15,759

Net income for the year 207,868 150,027

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF EUROS - KEURs)


CREDIT 2004 2003 Revenues Trade revenues (Notes 16.1 and 16.2) 1,903,303 1,799,829 Other operating income 2,382 2,742

Total operating revenue 1,905,685 1,802,571

Income from long-term investments

Dividends from Group companies 120,591 79,889 Dividends from related companies 8,130 9,076 Dividends from third parties 1,680 27

Financial and related income

Group companies 2,688 2,453 Related companies 146 42 Other financial income 2,279 3,854 Exchange gains - 8,193

Total income from financial activity 135,514 103,534

Profit on disposal of fixed assets 970 334 Profit related to treasury shares (Note 12.2) 15,935 14,853 Extraordinary income 53,375 1,092

Total extraordinary income (Note 19) 70,280 16,279

Net extraordinary expenses 39,602 79,040

AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED DECEMBER 31, 2004 (EXPRESSED IN THOUSANDS OF EUROS - KEURs)

1

1. ACTIVITY Amadeus Global Travel Distribution, S.A. ("the Company") was created in Madrid on July 14, 1988. The Company is the holding company of the Amadeus Group (“the Group”). The Group is a leader in information technology, serving the marketing, sales and distribution needs of the global travel and tourism industry. Its worldwide data network and database of travel information are used by travel agencies and airline sales offices. Today, travel agencies and airline offices can make bookings with airlines, hotel chains, car rental companies, and groups of providers such as ferry, rail, cruise, insurance and tour operators. The Group provides the above-mentioned services through a computerized reservation system (“CRS”), and through its e-commerce channel of distribution. Additionally, the Company provides information technology (“IT”) services and solutions to the airline industry which includes inventory management and passenger departure control. The Company's share and ownership structure are described in Note 12. Due to the Company’s activity, it does not have any responsibilities, expenses, assets, contingencies or liabilities of environmental nature which may have a significant impact in the net equity, finance position or net income of the Company. As a result, the Company does not present any type of breakdown with regards to environmental issues in the notes to the annual accounts.


2

The companies consolidated within the Group are:


Direct participation

% (3)

Indirect participation

% Date of acquisition or

creation (2)

Fully Consolidated Companies

Airline Automation, Inc. (1) Inc . U.S.A. I.T. - 100% 07.11.03

Amadeus América, S.A.

Sociedad Anónima

Argentina

Regional Support 100%

-

28.04.00

Amadeus Americas, Inc.

Inc.

U.S.A.


-

17.04.95

Amadeus Argentina, S.A.

Sociedad Anónima

Argentina

Distribution 80%

-

06.10.97

Amadeus Asia, Ltd.

Limited

Thailand


-

24.11.95

Amadeus Austria Marketing GmbH

GmbH

Austria

Distribution 100%

-

13.02.88

Amadeus Benelux, N.V.

N.V.

Belgium

Distribution 100%

-

11.07.89

Amadeus Bolivia SRL SRL Bolivia Distribution 100%

-

14.03.02

Amadeus Brasil, Ltda.

Limited

Brazil Distribution 76%

-

30.06.99

Amadeus Bulgaria EOOD

Limited

Bulgaria Distribution 100%

-

17.11.98

Amadeus Central and West Africa, S.A. S. A. Ivory Coast Distribution 100%

-

03.10.01

Amadeus Data Processing GmbH

GmbH

Germany

Data processing 100%

-

01.04.88

Amadeus Denmark A/S (6) A/S Denmark

Distribution

- 100% 31.08.02

Amadeus France, S.N.C.

SNC

France Distribution 100%

-

27.04.98

Amadeus France Services S.A. (8)

S.A.

France Distribution -

70.55%

27.04.98

Amadeus GDS LLP

LLP

Kazakhstan

Distribution 100%

-

08.01.02

Amadeus GDS (Malaysia) Sdn. Bhd.

Sdn. Bhd.

Malaysia

Distribution 100%

-

02.10.98

Amadeus GDS Singapore Pte. Ltd.

Pte. Ltd.

Singapore

Distribution 100%

-

28.02.98

Amadeus Germany GmbH

GmbH

Germany

Distribution 100%

-

07.08.99

AMADEUSGLOBAL Ecuador, S.A. Sociedad Anónima Ecuador Distribution 100% - 12.01.96

Amadeus Global Travel Distribution, (Malta) Limited Limited Malta Distribution 100% - 17.02.04

Amadeus Global Travel Distribution, S.A.

Sociedad Anónima

Spain

Group Management N/A

N/A

14.07.88

Amadeus Global Travel Israel Ltd.

Limited

Israel

Distribution 90%

-

23.03.00


3



% (3)



creation (2)

Amadeus GTD Australia Pty. Ltd.

Pty. Ltd.

Australia

Distribution 100%

-

18.11.97

Amadeus GTD Inc .. (1) Inc . U.S.A. Distribution - 100% 28.04.95

Amadeus GTD Ltd. Limited Kenya Distribution 100% - 03.07.03

Amadeus GTD Southern Africa Pty. Ltd. Pty. Ltd. South Africa Distribution 100% - 01.01.03

Amadeus Hellas, S.A.

S. A.

Greece

Distribution 100%

-

30.12.92

Amadeus Honduras , S.A. (1) Sociedad Anónima Honduras Distribución - 100% 17.03.98

Amadeus Hong Kong, Ltd. Limited Hong Kong Distribution 100% - 21.08.03

Amadeus Magyaroszag Kft (Ltd.)

Korlatolf Felelossegu Tarsasag (Ltd.)

Hungary

Distribution 100%

-

13.10.93

Amadeus Marketing (Ghana), Ltd.

Limited

Ghana

Distribution 100%

-

14.11.00

Amadeus Marketing Ireland, Ltd. Limited Ireland Distribution 100%

-

20.06.01

Amadeus Marketing Italia, S.P.A.

Societá per Azioni

Italy

Distribution 100%

-

18.12.92

Amadeus Marketing Nigeria, Ltd. Limited Nigeria Distribution 100%

-

18.05.01

Amadeus Marketing Philippines, Inc.

Inc.

Philippines

Distribution 100%

-

09.06.97

Amadeus Marketing Romania, S.R.L. S.R.L. Romania Distribution 100% - 22.01.03

Amadeus Marketing Schweiz, A.G.

A.G.

Switzerland

Distribution 100%

-

09.06.94

Amadeus Marketing (U.K.), Ltd.

Limited

U.K.

Distribution 100%

-

13.07.88

Amadeus México S.A. de C.V. (1) S.A. Mexico Distribución - 100% 13.02.95

Amadeus North America LLC. (1)

Limited Liability Company

U.S.A.

Distribution -

100%

28.04.95

Amadeus Norway, AS (6) AS Norway

Distribution

- 100% 31.08.02

Amadeus Paraguay, S.R.L.

S.R.L.

Paraguay

Distribution 100%

- 13.03.95

Amadeus Perú, S.A.

Sociedad Anónima

Peru

Distribution 100%

- 12.10.95

Amadeus Polska, Sp.zo.o.

Sp.zo.o.

Poland

Distribution 100%

-

17.12.92

Amadeus Receptionsservice AB (12) (6) AB Sweden

Distribution - 100% 31.08.02

Amadeus Rezervasyon Dagitim Sistemleri, A.S.

Anonim Sirketi

Turkey

Distribution 100%

-

11.05.94

Amadeus sas

Société par Actions Simplifiée

France

Software development and product definition

100%

-

02.05.88

Amadeus Saudi Arabia Limited (14) Limited Saudi Arabia Distribution 95% 5% 06.05.04

Amadeus Scandinavia AB

Limited

Sweden

Distribution 100%

-

31.08.02


4



% (3)



creation (2)

Amadeus Services, Ltd.

Limited

U.K.

Software development 100%

-

20.07.00

Amadeus Services Asia-Pacific, Pty. Ltd. Pty. Ltd.

Australia Software development 100%

- 12.12.00

Amadeus Sweden AB (6) AB Sweden

Distribution

- 78.25% 31.08.02

Amadeus Technology Center Nordic AB (9) Limited Sweden Software development 100% - 30.11.02

Americs AB (6) AB Sweden

Distribution - 100% 31.08.02

CRS Amadeus América, S.A. Sociedad Anónima Uruguay Regional Support

100% - 22.07.93

Ev iaggi.com, S.P.A. Societá per Azioni Italy

E-commerce

100% - 01.10.01

HDS (10) Inc. U.S.A. Software development - 96.1% 10.09.03

Hogatex Allemagne (10) GmbH Germany Software development - 96.1% 10.09.03

Hogatex Austria (10) GmbH Austria Software development - 96.1% 10.09.03

Hogatex Finland (10) Oy Finland Software development - 96.1% 10.09.03

ICSA -T Australia, Pty. Ltd. (12) (5) Pty. Ltd. Australia


- 100% 30.11.02

ICSA -T France, S.A.R.L. (12) (5) S.A.R.L. France


- 100% 30.11.02

ICSA -T N.V..(12) N.V.

Belgium


100 %

- 07.08.98

ICSA -T Travel Software GmbH (5) (12) GmbH Switzerland Software development

- 100% 30.11.02

ICSA -T UK, Ltd. (5) (12) Limited U.K. Software development

- 100% 30.11.02

Moneydirect Limited NZ (13) Limited New Zealand Software development

- 100% 03.12.97

Moneydirect Pty. Ltd. (13) Limited Australia Software development

- 100% 03.12.97

NMC Eastern European CRS, B.V. B.V.

The Netherlands

Distribution

100%

-

30.06.98

Opodo GmbH (11) GmbH Germany E-commerce - 55.36% 01.07.04

Opodo Limited Limited U.K. E-commerce 55.36% - 01.07.04

Opodo S.A.R.L. (11) S.A.R.L France E-commerce - 55.36% 01.07.04

Optims Asia(10) Ltd. Singapore Software development - 96.1% 10.09.03

Optims S.A.

Société Anonyme

France

Software development 96.1%

- 10.09.03

Optims Italia(10) S.R.L. Italy Software development - 96.1% 10.09.03

Optims U.K. (10) Ltd. U.K. Software development - 96.1% 10.09.03

Otedis (10) Société par actions simplifiée France Software development - 96.1% 10.09.03

Prologest (10) S.A. Spain Software development - 96.1% 10.09.03


5



% (3)



creation (2)

SIA Amadeus Latvija SIA Latvia

Distribution

100% - 31.08.02

Sistemas de Reservaciones CRS de Venezuela, C.A. C.A.

Venezuela

Distribution

100%

-

14.11.95

Travellink AB

AB

Sweden E-commerce

85.1%

-

09.04.01

UAB Amadeus Lietuva UAB Lithuania

Distribution

100% - 31.08.02

Vacation.com, Inc. (1) Inc. U.S.A. Distribution - 100% 15.11.00

Vacation.com Canada, Inc. (1) Inc . Canada Distribution - 100% 15.11.00

Vivacances S.A.

Société Anonyme

France

E-commerce

67.5%

-

09.08.02

Companies consolidated under the equity of method

1Travel.com, Inc. (1)

Inc.

U.S.A. E-commerce -

38.9%

27.04.00

AlphaNet BVBA (5) (12) BVBA Belgium

E-commerce - 28% 30.11.02

Amadeus Algerie, S.A.R.L.

S.A.R.L.

Algeria Distribution 40%

-

27.08.02

Amadeus Gulf LLC Limited Liability Company United Arabian Emirates Distribution 49% - 27.12.03

Amadeus Kuwait Company W.L.L. W.L.L. Kuwait Distribution 35% - 06.08.03

Amadeus Marketing CSA, s.r.o.

s.r.o

Czech Rep. Distribution 35%

-

19.09.97

Amadeus Maroc, S.A.S.

S.A.S.

Morocco Distribution 30%

-

30.06.98

Amadeus Qatar W.L.L.

W.L.L.

Qatar Distribution 40%

-

03.07.01

Amadeus Sudani, Co.Ltd.

Limited

Sudan Distribution 40%

-

21.09.02

Amadeus Tunisie, S.A.

Société Anonyme

Tunisia Distribution 30%

-

06.09.99

Atinera LLC (1) (4) (12)

Limited Liability Company

U.S.A. Software development -

50%

06.12.00

Comtec (Europe) Limited Limited U.K. I.T. 20% - 05.02.04

ITA (Internet Travel Agent ) Inc. (1)

Inc.

U.S.A.

Software development -

22.3%

23.08.98

Jordanian National Touristic Marketing Private Shareholding Company Limited Jordan Distribution 50% - 19.05.04

PT Amadeus Indonesia Foreign Investment Co. Indonesia Distribution 50% - 10.10.03

Qivive GmbH (7)

GmbH

Germany

I.T. - 33.3%

26.02.03


6



% (3)



creation (2)

Red Universal de Marketing y Booking On Line, S.A. (“RUMBO”) Sociedad Anónima Spain E-commerce 50% - 09.03.00

Sistemas Automatizados de Agencias de Viajes, S.A. (“SAVIA”)

Sociedad Anónima

Spain

Distribution 34%

-

23.09.98

Sociedad Anato-Avianca de Reservaciones de Servicios Turisticos Savia Ltda.

Limited

Colombia Distribution 50%

-

25.07.02

Stellar Access, Inc. (1) (4) (12)

Inc.

U.S.A. E-commerce -

20%

01.12.00

Topas Co. Ltd.

Limited

South Korea Regional CRS

32%

-

07.06.99

Travel.com.au Ltd.

Limited

Australia E-commerce

14.9%

-

21.12.00

Traventec Limited (7)

Limited

Ireland

I.T. - 45%

26.02.03

(1) The participation in these companies is held through Amadeus Americas, Inc. formerly known as Amadeus NMC Holding, Inc. until August 2, 2004. (2) In case of various investments or capital increases, the date of acquisition or creation refers to the first one. (3) In certain cases companies are considered to be wholly owned subsidiaries, even though due to local statutory obligations they are required to have more than one shareholder or a specific percentage of the capital stock

owned by citizens and/or legal entities of the country concerned. These shareholders are not entitled to any economic rights. (4) This Company ceased operations in year 2002. (5) The participation in these companies is held through ICSA -T N.V. Business activity performed by ICSA -T N.V. and its subsidiaries is carried out by other Group companies. Not relevant impact has been recorded in 2004

related to the liquidation process of ICSA -T, N.V. and its subsidiaries. (6) The participation in these companies is held through Amadeus Scandinavia AB. (7) The participation in these companies is held through Amadeus Germany GmbH. (8) The participation in this company is held through Amadeus France S.N.C. (9) Previously known as ICSA -T Scandinavia AB. (10) The participation in these companies is held through Optims S.A. (11) The participation in these companies is held through Opodo Limited. (12) These companies are under liquidation. (13) The participation in these companies is held through Amadeus GTD Australia Pty. Ltd. (14) The indirect participation in this Company is held through NMC Eastern European CRS, B.V.


7

2. BASIS OF PRESENTATION AND COMPARABILITY OF THE INFORMATION INCLUDED IN THE ANNUAL ACCOUNTS a) General information

The annual accounts have been obtained from the accounting records of the Company and prepared in accordance with generally accepted accounting principles in Spain (Spanish GAAP), applied on a consistent basis with the prior year. Certain amounts for the prior period have been reclassified to conform with 2004 presentation. As of December 31, 2004 the annual accounts include, using the global integration method, the amounts corresponding to the assets and liabilities as well as the profits and losses of the Company's branch offices (Japan and Ukraine). During 2004, the branch office of Malta was converted into group company. In accordance with Spanish Law, this document only refers to the individual annual accounts of Amadeus Global Travel Distribution S.A. and does not represent the consolidated annual accounts of the Amadeus Group, which are presented in a different document. The Group’s consolidated shareholders´ equity and net income exceed those of the individual annual accounts by approximately EUR 57.2 million and EUR 8.5 million, respectively, as of and for the year ended December 31, 2004. The Group considers that due to its structure, the consolidated annual accounts are more representative of the Group's activities than the individual annual accounts. Examples of the components of the individual annual accounts that do not affect the consolidated Group are the provisions for the decline in value of long-term investments in Group and related companies, intercompany transactions and dividends earned from Group and related companies. In addition to the consolidated annual accounts prepared in accordance with Spanish GAAP, the Group prepares consolidated financial statements under IFRS. As a consequence of the difference in accounting principles, the consolidated net equity reflected under Spanish GAAP exceeds the net equity reflected under IFRS by approximately EURs 132.2 million as of December 31, 2004 and the net income reflected under Spanish GAAP is higher than the net income under IFRS by approximately EURs 8.3 million for the year ended December 31, 2004. The main differences as of and for the year ended December 31, 2004 are due to the difference in accounting methods used in the acquisition in 1997 of Amadeus Data Processing & Co KG (“Amadeus Operations KG”), the accounting for Treasury shares and equity related instruments.

b) Use of estimates

Use of estimates and assumptions, as determined by management, is required in the preparation of annual accounts in conformity with Spanish GAAP. Actual results could differ from those estimates and assumptions.


8

c) Merger

During 1999 the Company merged with Amadeus Marketing, S.A., Sociedad Unipersonal and Amadeus Shares, S.L., Sociedad Unipersonal (acquired companies). The valuation of the individual components of the shareholders´ equity of the acquired companies, as they were wholly owned, has been incorporated using consolidation criteria. For accounting purposes, this type of merger is known as a merger of wholly owned entities. All the information required by Spanish law was included in the Company’s notes to the annual accounts for the year ended December 31, 1999.

3. PROPOSED DISTRIBUTION OF RESULTS FOR YEAR 2004 The proposed distribution of 2004 earnings that the Board of Directors will submit to the General Shareholders’ Meeting for approval is as follows (in EUR): Profits for the year 207,868,453.20

Distribution to:

- Other reserves 207,868,453.20

207,868,453.20

4. ACCOUNTING PRINCIPLES The main accounting principles used in the preparation of the annual accounts are as follows: a) Foreign currency transactions Foreign currency transactions are accounted for at the exchange rates prevailing at the

date of the transactions. Gains and losses resulting from the settlement of such transactions and losses from the translation at year-end of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of income. In the majority of the cases, unrealized exchange gains are not credited to the income of the period, but are accounted for as a liability in the “Unrealized exchange gains” caption.


9

b) Related companies The Company considers companies over which it exercises a significant influence as

related companies. c) Start-up expenses This caption includes expenses, commissions and taxes related to the Public Offering for

Subscription of Shares of October 1999. These expenses are amortized on a straight-line basis over a period of five years.

d) Intangible fixed assets Intangible assets are recorded at cost and reviewed periodically and adjusted for any

diminution in value as noted in paragraph h). These assets include the following:

• Patents, licenses and trademarks - These include the costs of acquiring licenses for CRS and IT services software developed outside the Company as well as acquired trademarks. These assets are being amortized applying the straight-line method over 5 - 10 years.

• Intangible rights - These represent the acquisition cost of contracts that give the

Company the right to bill for future services, as well as capitalizable costs related to travel agency incentives. These costs are being amortized applying the straight-line method, based on the expected service life of the contract, over 3 - 10 years.

• Software - The value of these assets includes amounts incurred to obtain the

ownership or rights to use software, as well as amounts incurred by the Company to develop software applications. These amounts are capitalized once technical feasibility is established, where it is reasonably anticipated that the cost will be recovered through future activities or benefit future periods and the cost of the assets can be measured reliably. Software is amortized applying the straight-line method over 3 - 5 years. Software maintenance costs are charged to expense as incurred.

e) Tangible fixed assets Tangible fixed assets are recorded at the lower of cost or recoverable value and are

depreciated applying the straight-line method over the estimated useful lives of the assets:

Furniture and office equipment 10 -15 years Other tangible fixed assets 3 -15 years



10

f) Investments Investments in marketable short and long-term fixed income and equity securities are

recorded at the lower of cost or market.

For shares in companies that are not listed in the stock market, Group and related companies, the market value is considered to be their net book value, adjusted for any unrecognized gains existing at the acquisition date which remain at the closing date. When settlement of purchase consideration is deferred, the cost of the acquisition includes the net present value of this deferred consideration. In cases where the exact amount of deferred consideration is contingent on future events, the amount of the deferred consideration is estimated at the acquisition date and recorded as a liability. Accumulated unrealized gains from any subsequent remeasurement of the deferred consideration are recorded as deferred income, while accumulated unrealized losses are recorded in the statement of income.

g) Treasury shares Treasury shares, designated to cover specific commitments, are stated at the lower of

cost (which includes the total amount paid upon acquisition plus expenses related to the transaction), market value or exercise price.

Treasury shares not designated to cover specific commitments are recorded at the lower of cost, market or net book value. The difference between cost and the market value is accounted for in the statement of income, while the difference between the market and the net book value is recorded against reserves. In accordance with Article 79.3 of the Spanish Companies Act, an allocation has been made to the corresponding restricted reserve for the cost of Treasury shares, before any required provisions.

h) Impairment of non-current assets The Company periodically evaluates the carrying value of non-current assets for

potential impairment. As a result of this evaluation, the corresponding provision is recognized whenever the carrying amount of an asset exceeds its recoverable amount by reducing the carrying amount of the asset to its recoverable amount with the corresponding charge to the statement of income.

i) Deferred expenses Deferred expenses are valued as the difference between the settlement amount and the

present value of the liability. These deferred expenses are charged to income based on financial criteria.


11

j) Pension and other post-retirement obligations The Company has pension commitments with its employees which are being fulfilled

through a defined contribution Employment System Pension Plan for all employees and defined benefit/contribution Collective Life Insurance Contracts for a selective group of executive (senior management included) employees (internal funds externalized in January 2001). The contributions to these plans are charged to the statement of income in the period to which they relate.

k) Other provisions and contingencies Risks in connection with claims, trials, indemnities and contingencies considered

probable are accrued in accordance with a reasonable estimate of their amount. l) Revenue recognition The Company receives fees from travel providers for providing electronic travel and

reservation services through its CRS. The fee amount is dependent upon the usage and the level of functionality at which the provider participates. Revenue from airline reservations is recognized based on the number of bookings, net of cancellations made and an allowance for future cancellations, or the number of CRS transactions, depending on the option contractually selected on an annual basis by the applicable airlines.

Revenue from airline IT services and bookings of car rentals and hotel rooms is recognized at the time the reservation is used by the end customer. Revenue for other services to travel agencies, airlines and others is recognized in the month of service.

m) Stock incentive plans The Company accounts for its obligations under stock incentive plans as follows:

• Compensation expense is recognized for stock options, if the fair market value of the underlying stock at the date of the grant is above the exercise price. In this case, the expense is accrued over the vesting period of these rights (currently four years).

• Compensation expense relating to stock grants (i.e. their fair market value at the

grant date) is recognized over the vesting period of these rights. n) Financial instruments


The Company uses derivative financial instruments to hedge certain currency and interest rate exposures. The fair value of these derivatives is the market value for listed instruments or valuation based on option pricing models and discounted cash


12

flow calculations for unlisted instruments. For accounting recognition purposes, the following policy has been applied:

• Cash flow hedges: No remeasurement to fair value is performed until the

committed or forecasted transaction occurs (except for monetary assets or liabilities which are designated as hedges of future cash flows, in which case effective gains and losses resulting from remeasurement are deferred until the future forecasted transaction occurs). When the underlying transaction occurs, unrealized gains and losses obtained from remeasurement to fair value are accounted for in the statement of income to the extent that the revaluation of the underlying asset or liability is also included in the statement of income. Ineffective unrealized gains are deferred on the balance sheet and ineffective unrealized losses are recognized directly in the statement of income.

• Hedges of net investments in foreign entities: Effective losses obtained from

remeasurement to fair value are included in the statement of income while effective gains are deferred. However, effective gains are included in the statement of income to the extent that a foreign currency translation loss has been recorded in the provision for decline in portfolio with respect to the underlying investment. Ineffective unrealized gains are deferred on the balance sheet and ineffective unrealized losses are included in the statement of income.

• Hedges of monetary assets and liabilities: For consistency purposes with respect

to the valuation of the underlying assets and liabilities, unrealized losses obtained from remeasurement to fair value are deferred and unrealized gains are recorded in the statement of income.

• No hedge accounting: Unrealized losses from derivatives not designated nor

qualified for hedging treatment are accounted for directly in the statement of income, whereas unrealized gains are recorded as deferred income on the balance sheet in the “Other deferred income” caption.


The Company has issued warrants (call options sold) of its class “A” shares as part of the consideration for acquiring certain IT contracts and certain corporate acquisitions. The fair value of these warrants is measured by using an option pricing model and is recorded as additional consideration for the underlying assets acquired. These warrants have been considered as a financial liability and recorded in the “Other liabilities” caption and are consequently remeasured to fair value for which accumulated unrealized losses have been included in the statement of income and accumulated unrealized gains have been recorded in the “Other deferred income” caption until the maturity of the contracts. In order to manage the exposure to a rise in its share price with respect to part of the warrants mentioned above, the Company has acquired Treasury shares. In the event that the warrants covered by Treasury shares were not exercisable, the difference in value arising from the comparison between fair value and net book value of these Treasury shares would be compensated by the balance included in the “Other deferred income” caption.


13

Equity swap agreements (contracts to buy shares of the Company in future periods), entered into in order to manage the exposure to a rise in the Company’s share price with respect to some of the warrants issued as described above, are treated as:


features that are in substance similar to a form of collateral, and therefore do not qualify as an equity instrument. In such cases, accumulated unrealized gains arising from remeasurement to fair value are recorded as deferred income and accumulated unrealized losses are recorded under Net income/loss from financial activity in the statement of income. Fair value is measured by using an option pricing model.

• Instruments similar to a deferred purchase of Treasury shares, when there is no

interim cash settlement feature, the equity swap agreements are considered to be equity instruments and are recorded as an asset. This asset is classified under the “Long-term securities portfolio ” caption, as opposed to the “Treasury shares” caption, since the underlying shares are not physically held by the Company. These instruments are valued following the criteria for Investments.

As a component of certain commercial agreements, the Company receives warrants or options on shares of other companies. Warrants or options received on shares of other companies are recorded as derivative financial assets, and measured initially at cost, which is the fair value as of the date of the transaction. Subsequent remeasurement of these financial assets is performed at their fair values of the consideration given, with unrealized losses recorded in the statement of income and unrealized gains recorded as deferred income. Fair value is measured by using an option pricing model. When fair value cannot be reliably determined, these derivative financial assets are reflected in the balance sheet at cost.

o) Income taxes

The current income tax is recognized in the statement of income. Income tax expense includes the income tax for related companies that are subject to tax at shareholder level. Deferred taxes are determined under the liability method. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial statement and tax bases of assets and liabilities using tax rates that are expected to apply when the assets or liabilities are realized, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized when the probability of realization is reasonably assured, and are adjusted only to the extent that it is no longer probable that a benefit will be realized in the future. Deferred tax assets and liabilities are included in the captions of tax receivable and payable and are classified as short or long-term based on the underlying assets and liabilities Tax credits for investments in subsidiaries and associates, when there is an increase in the percentage of ownership are deferred, reducing income tax expense on a straight-


14

line basis over the period during which the unrecognized gains at the time of the acquisition should be amortized. This deferred tax credit is included in the “Other deferred income” caption. In the case of capital increases that do not represent an increase in the percentage of ownership or for newly created companies, tax credits are recognized at the moment of the capital contribution.

5. START-UP EXPENSES Balances and movements for the year ended December 31, 2004 of the items included under start-up expenses are as follows:

Balance at 31/12/03 Amortization Balance at 31/12/04

3,864 (3,864) -

3,864 (3,864) -

6. INTANGIBLE FIXED ASSETS Balances and movements for the year ended December 31, 2004 of the items included under intangible fixed assets are as follows:

Cost Balance at 31/12/03 Additions

Retirements and disposals

Balance at 31/12/04

Research and development expenses 537 - - 537 Patents, licenses and trademarks 21,481 118 (1) 21,598 Intangible rights 110,306 5,740 (9,598) 106,448 Software 14,463 602 (4,481) 10,584

Total 146,787 6,460 (14,080) 139,167

Accumulated amortization Research and development expenses 503 14 - 517 Patents, licenses and trademarks 12,178 2,106 - 14,284 Intangible rights 51,820 15,216 (9,603) 57,433 Software 11,283 1,435 (4,455) 8,263

Total 75,784 18,771 (14,058) 80,497 Total net intangible fixed assets 71,003 (12,311) (22) 58,670


15

The additions in intangible rights are mainly due to signing bonuses paid to travel agencies. At December 31, 2004 fully amortized items amount to KEURs 18,809. The net book value of the items included under intangible fixed assets as of December 31, are as follows: 2004 2003

Research and development expenses 20 34 Patents, licenses and trademarks 7,314 9,303 Intangible rights 49,015 58,486 Software 2,321 3,180

Total 58,670 71,003

7. TANGIBLE FIXED ASSETS Balances and movements for the year ended December 31, 2004 of the items included under tangible fixed assets are as follows:

Cost Balance at

31/12/03 Additions Retirements

and disposals Balance at 31/12/04

Furniture and office equipment 1,150 13 (61) 1,102 Other tangible fixed assets 24,334 3,495 (2,253) 25,576

Total 25,484 3,508 (2,314) 26,678

Accumulated depreciation Furniture and office equipment 750 99 (59) 790 Other tangible fixed assets 17,891 3,461 (2,115) 19,237

Total 18,641 3,560 (2,174) 20,027 Total net tangible fixed assets 6,843 (52) (140) 6,651

At December 31, 2004 fully depreciated items amount to KEURs 14,102. Also, at December 31, 2004 the total amount of tangible fixed assets outside Spain is KEURs 21,853 with an accumulated depreciation of KEURs 17,083.


16

The net book value of the items included under tangible fixed assets as of December 31, are as follows:

2004 2003 Furniture and office equipment 312 400 Other tangible fixed assets 6,339 6,443

Total 6,651 6,843


17

8. LONG-TERM INVESTMENTS 8.1. Balances and movements for the year ended December 31, 2004 of the items included under this caption are as follows:

Balance at 31/12/03 Additions Decreases Transfers

Transfer from

short-term

Transfer to

short-term Exchange rate

difference Balance at 31/12/04

Investments in Group companies 928,166 179,067 - 79,628 1,148 - - 1,188,009 Loans to Group companies 45,335 5,578 (35,249) 48,896 2,202 (768) 13,237 79,231 Investments in related companies 125,865 3,147 - (75,021) - - - 53,991 Loans to related companies 4,813 583 - (708) - (715) 4 3,977 Long-term securities portfolio 43,739 581 (34,197) - - - - 10,123 Other long-term loans 53,153 7,097 (160) (52,795) (571) - 131 6,855 Other long-term assets 15,013 2,001 (6,084) - - (1,327) (111) 9,492 Long-term tax receivable 87,757 51,978 (15,866) - - (16,415) - 107,454 Provisions (319,338) (95,223) 5,205 - - - - (409,356)

Total 984,503 154,809 (86,351) 0 2,779 (19,225) 13,261 1,049,776


18

8.2. Investments in Group companies correspond to the direct shareholding of Amadeus Global Travel Distribution, S.A. in the following companies:

Company

Direct ownership

(%) Local

currency Cost of direct Investment (1)

Total paid-in capital (2)

Reserves and retained

earnings (losses) (2) Result for the year (2)

Equity (deficit) as of

31/12/04 (2)


31/12/04 (5) Provision (3)

Amadeus América, S.A. 100 ARS 435 0 2 0 2 412 24

Amadeus Americas, Inc.(4) 100 USD 215,991 198 (93) (1) 104 76,544 150,287

Amadeus Argentina, S.A. 80 ARS 10,701 1 5 0 6 1,487 9,511

Amadeus Asia, Ltd. 100 BATH 1,031 37 17 (4) 50 1,007 116

Amadeus Austria Marketing GmbH 100 EUR 3,001 3 (3) 0 0 (60) 2,677

Amadeus Benelux , N.V. 100 EUR 2,143 0 2 2 4 4,052 0

Amadeus Bolivia SRL 100 BOB 252 2 0 0 2 189 63

Amadeus Brasil, Ltda. 76 BRL 18,597 83 (31) (8) 44 12,167 15,483

Amadeus Bulgaria EOOD 100 BGN 735 0 1 1 2 1,015 0

Amadeus Central and West Africa, S.A. 100 XOF 1,617 1,054 384 (96) 1,342 2,047 0

Amadeus Data Processing GmbH 100 EUR 275,484 25 253 60 338 338,533 0

Amadeus France, S.N.C. 100 EUR 127,557 0 8 0 8 7,652 25,298

Amadeus GDS LLP 100 KZT 171 26 (12) 27 41 234 0

Amadeus GDS (Malaysia) Sdn. Bhd. 100 MYR 122 1 2 0 3 548 0

Amadeus GDS Singapore Pte. Ltd. 100 SGD 205 0 2 0 2 823 0

Amadeus Germany GmbH (4) 100 EUR 205,585 9 22 5 36 36,316 54,551

AMADEUSGLOBAL Ecuador, S.A. 100 USD 49 0 1 0 1 951 0

Amadeus Global Travel Distribution, (Malta) Limited 100 MTL 90 0 0 0 0 90 0

Amadeus Global Travel Israel Ltd. 90 ILS 1,912 10 (7) 0 3 538 1,312

Amadeus GTD Australia Pty. Ltd. 100 AUD 18,842 50 (38) 3 15 8,456 10,386

Amadeus GTD Ltd. 100 KES 195 16 (2) 7 21 199 12

Amadeus GTD Southern Africa Pty. Ltd. 100 ZAR 593 6 (1) 1 6 803 0

Amadeus Hellas, S.A. 100 EUR 4,124 3 (2) 0 1 1,570 2,213

Amadeus Hong Kong, Ltd. 100 HKD 462 4 1 0 5 455 7

Amadeus Magyaroszag Kft (Ltd.) 100 HUF 480 10 163 9 182 741 0

Amadeus Marketing (Ghana), Ltd. 100 GHC 197 600 661 (37) 1,224 100 97

Amadeus Marketing Ireland, Ltd. 100 EUR 400 0 0 0 0 455 0

Amadeus Marketing Italia, S.P.A. 100 EUR 3,714 2 0 0 2 2,142 1,772

Amadeus Marketing Nigeria, Ltd 100 NGN 266 26 (9) (6) 11 59 206


19

Company

Direct ownership

(%) Local

currency Cost of direct Investment (1)

Total paid-in capital (2)

Reserves and retained

earnings (losses) (2) Result for the year (2)


31/12/04 (2)


31/12/04 (5) Provision (3)

Amadeus Marketing Philippines, Inc . 100 PHP 1,879 133 (10) 4 127 1,664 215

Amadeus Marketing Romania, S.R.L. 100 ROL 470 16,645 9,526 (5,851) 20,320 516 0

Amadeus Marketing Schweiz , A.G. 100 CHF 58 0 1 0 1 686 0

Amadeus Marketing (U.K.), Ltd. 100 GBP 5,517 1 0 0 1 1,152 3,344

Amadeus Paraguay , S.R.L. 100 PYG 103 117 1,175 79 1,371 165 0

Amadeus Perú, S.A. 100 PEN 534 2 1 1 4 758 0

Amadeus Polska, Sp.zo.o. 100 PLN 5,507 24 (18) (1) 5 1,295 4,212

Amadeus Rezervasyon Dagitim Sistemleri, A.S. 100 TRL 2,110 1,275,537 (293,859) 707,545 1,689,223 920 1,394

Amadeus sas 100 EUR 7,748 23 116 57 196 195,970 0

Amadeus Saudi Arabia Limited 95 SAR 420 2 0 0 2 426 16

Amadeus Scandinavia AB (4) 100 SEK 132,171 20 79 25 124 13,722 31,611

Amadeus Services, Ltd. 100 GBP 82 0 4 1 5 6,757 0

Amadeus Services Asia-Pacific , Pty. Ltd. 100 AUD 55 0 1 1 2 1,305 0

Amadeus Technology Center Nordic AB 100 SEK 1,143 0 7 3 10 1,163 457

CRS Amadeus América, S.A. 100 USD 802 1 0 0 1 649 153

Eviaggi.com, S.P.A. 100 EUR 6,917 2 (1) (1) 0 91 5,687

ICSA -T.N.V. (4) 100 EUR 14,466 3 (15) 1 (11) (10,612) 14,466

NMC Eastern European CRS, B.V. 100 USD 18 0 0 0 0 439 0

Opodo Limited (4) 55.36 EUR 62,000 237 (218) (23) (4) (3,858) 16,167

Optims S.A. (4) 96.12 EUR 27,261 8 11 (1) 18 18,387 1,165

SIA Amadeus Latvija 100 LVL 906 0 0 0 0 43 146

Sistemas de Reservaciones CRS de Venezuela, C.A. 100 VEB 879 1,580 (398) (48) 1,134 434 437

Travellink AB 85 SEK 15,397 12 90 (53) 49 5,449 13,683

UAB Amadeus Lietuva 100 LTL 1,265 0 0 0 0 53 193

Vivacances S.A. 67.54 EUR 5,350 6 (7) (4) (5) (4,838) 5,350

1,188,009 372,711

(1) The cost of direct investment (in KEURs) does not include provisions for the decline in value of long-term financial investments. (2) Total paid-in capital, reserves, retained earnings/(losses), result for the year and net equity (deficit) are expressed in millions of the corresponding local currency and are derived from the respective local statutory accounts. (3) Any differences between the provision (in KEURs) and the difference between the investment value and the net equity of the Company are due to unrecognized gains existing at the acquisition date which remain at the

closing date, or negative equity accrued in the “ Other provisions” caption. (4) Consolidated figures. (5) Net equity (deficit), from the corresponding local statutory accounts, expressed in KEURs at December 31, 200 4 exchange rates.


20

8.3. The breakdown of loans to Group companies, is as follows:

Currency Amount Average interest rate First maturity date Last maturity date

EUR 1,900 3.12% 01.02.05 31.07.06 EUR 500 2.62% 15.02.05 18.11.06 EUR 50 2.86% 23.04.05 21.04.08 EUR 52,795 4.88% 29.06.05 19.03.06 EUR 100 2.88% 31.10.05 31.10.06 EUR 300 2.87% 10.12.05 09.12.08 EUR 3,335 2.63% (*) (*) GBP 2,128 5.03% 30.01.05 26.01.06 USD 954 2.00% 20.01.05 26.05.08 USD 184 1.89% 16.02.05 16.02.09 USD 150 2.48% 05.04.05 11.02.09 USD 734 2.08% 03.05.05 30.04.06 USD 228 2.29% 11.11.05 30.11.08 USD 2,349 6.03% 24.11.05 19.11.07 USD 367 2.39% 26.11.05 26.11.07 USD 13,004 1.98% 31.12.05 31.12.06 UYU 153 23.00% 20.01.05 06.05.07

79,231

(*) See Note 8.6

The interest accrued as of December 31, 2004 for these loans amounts to KEURs 469 and is included in short-term financial investments.

As of December 31, 2004, the transfer in the “Loans to Group Companies” caption includes the impact of considering the convertible loan given to Opodo Limited (UK) in 2003, as an intercompany loan upon the acquisition by the Company of 55.36% interest. The terms of the convertible loan contract have been revised and the option to convert has been cancelled.


21

8.4. Investments in related companies correspond to:

Company Direct

ownership Cost of direct investment (1)

Amadeus Algerie, S.A.R.L. 40% 90 Amadeus Gulf LLC 49% 84 Amadeus Kuwait Company W.L.L. 35% 309 Amadeus Marketing CSA, s.r.o. 35% 6 Amadeus Maroc, S.A.S. 30% 201 Amadeus Qatar W.L.L. 40% 145 Amadeus Sudani Co. Ltd. 40% 62 Amadeus Tunisie, S.A. 30% 115 Comtec (Europe) Limited

20% 2,968

Jordanian National Touristic Marketing Private Shareholding Company 50% 178 PT Amadeus Indonesia 50% 109 Red Universal de Marketing y Booking on line S.A. (“RUMBO”) 50% 7,500 Sistemas Automatizados de Agencias de Viajes, S.A. (“SAVIA”) 34% 21,953 Sociedad Anato – Avianca de Reservaciones de Servicios Turísticos Savia Ltda. 50% 1,753 Topas Co.Ltd. 32% 13,128 Travel.com.au. Ltd. 14.9% 5,390

53,991

(1) The cost of direct investment does not include provisions for the decline in value of long-term financial investments.

Due to the Group’s business structure, most of the related companies represent a specific geographical market, while the majority of the revenues from these markets flow through the Company. Additionally, since these companies are not publicly traded (except Travel.com.au. Ltd.) nor under the control of the Company, the financial data related to these companies is not always in the public domain. Therefore, the Company considers that it is not appropriate to provide a breakdown of the provision for decline in value of long-term investment and dividends paid for each related company, and that if it were to do so, the Company would bear a significant strategic and commercial risk.

8.5. The breakdown of “Long-term securities portfolio” caption is as follows:

Other investments less than 20% 6,566 Deposit certificates (Note 18.3) 3,557

10,123


22

8.6. The breakdown of the provision for decline in value of long-term financial investments as of December 31, 2004 is as follows:

Investments in Group Companies 372,711 Investments in related Companies 33,033 Long term provision for doubtful debts with Group Companies 3,335 Other provisions 277

409,356

The Company has accounted for a provision for the decline in value of long-term financial investments included in the statement of income as extraordinary expenses and amounting to KEURs 86,479 (see Note 19) from which KEURs 91,684 corresponds to the provision for Group and related parties financial investments and a reversion of KEURs 5,205 corresponds to equity instruments similar to treasury shares. Likewise, extraordinary income amounting to KEURs 10,125 (see Note 19) has been recorded with a debit to the “Other provisions” caption in order to reflect the impact of the company’s equity of those investments with negative net book value as of December 31, 2004. A provision for doubtful debt on Group Companies has been accounted for, as of December 31, 2004. A total charge of KEURs 9,935 (see Note 19) has been registered into the “Extraordinary expenses” caption against “Provisions – Investments” caption by KEURs 3,335 (see Note 8.3) and “Provision – Short term financial investments” caption by KEURs 6,600. In general terms, these provisions have been calculated based on the financial statements of each company, adjusted, where necessary, to Spanish GAAP. These accounting standards may not coincide in some cases with those used by each company in the financial statements of their respective countries.

8.7. The breakdown of “Other long-term assets” caption is as follows:

2004

Derivative Assets (Note 18) 316 Deposits 9,176

9,492


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9. DEFERRED EXPENSES Balances and movement for the year ended December 31, 2004 of the items included under deferred expenses are as follows: Balance at

31/12/03 Increase / (Decrease) Amortization

Balance at 31/12/04

Loan arrangement expenses 1,509 - (567) 942 Others 7,027 431 (1,859) 5,599

8,536 431 (2,426) 6,541

Additions in Others are price adjustments that relate to the difference between the settlement amount and the present value of the deferred purchase consideration for new corporate acquisitions.

10. TRADE ACCOUNTS RECEIVABLE AND PAYABLE 10.1. The breakdown of the “Trade accounts receivable” caption as of December 31, 2004 is

as follows:

Companies belonging to the Group’s significant shareholders 52,959 Other customers 219,872 Total 272,831

Amounts of trade accounts receivable and accounts receivable, Group and related companies, included in the balance sheet of the Company are mainly denominated in EURs and USD.

10.2.The breakdown of the “Trade accounts payable” caption as of December 31, 2004 is as

follows:

Companies belonging to the Group’s significant shareholders 12,127 Other creditors 121,272

Total 133,399


24

Out of the total amount of accounts payable as of December 31, 2004, KEURs 61,778 is denominated in foreign currencies, as follows:

Amount (thousand of

foreign currency) Amount (KEURs)

Accounts payable - Group and related companies USD 22,341 16,401 DKK 9,312 1,252 NOK 4,057 493 SEK 118,610 13,149

Trade creditors

USD 21,699 15,930 GBP 1,615 2,291 SEK 67 7 INR 724,435 12,255

Total 61,778

11. OTHER ACCOUNTS RECEIVABLE AND PAYABLE 11.1.The breakdown of the “Other accounts receivable” caption as of December 31, 2004 is

as follows:

Advances to vendors 3,926 Derivative assets (Note 18) 5,983 Other 46

Total 9,955

11.2. The breakdown of the “Other accounts payable” caption as of December 31, 2004 is as

follows:

Derivative liabilities (Note 18) 2,165 Deferred purchase consideration 9,056 Warrants debts 855 Other 157

Total 12,233

The “Deferred purchase consideration” caption includes the part of the deferred payment derived from certain corporate acquisitions in 2003 and 2002 that will vest in the following year.


25

12. SHAREHOLDERS' EQUITY 12.1. Balances and movements for the year ended December 31, 2004 of the items included under Shareholders' equity are as follows:

Balance at 31/12/03

Distribution of year 2003 net income

Dividend distribution

Capital reduction Amort B

Disposal of treasury shares

Increase of treasury shares

Treasury Shares

Provision CTA

movements Net income for the year

Balance at 31/12/04

Share capital 27,898 - - (4,854) - - - - - 23,044 Additional paid-in capital 436,830 - - - 52,105 (63,085) - - - 425,850 Legal reserve 7,468 - - - - - - - - 7,468 Treasury shares reserve 98,519 - - - (52,105) 63,085 - - - 109,499 Other reserves 130,037 115,027 - 4,369 - - (16,427) (72) - 232,934 Net income for the year 150,027 (150,027) - - - - - 207,868 207,868 Dividends - 35,000 (35,000) - - - - - - -

850,779 - (35,000) (485) - - (16,427) (72) 207,868 1,006,663


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12.2. Balances and movements of class “A” and class “B” shares for the year 2004 are as follows:

Class “A” shares (Par value 0.01 Euros) Issued shares Treasury shares

Class “B” shares (Par value 0.10 Euros)

As of December 31, 2003 590,000,000 15,502,843 219,983,100

Additions - 10,311,563 - Disposals - (6,708,736) (48,539,400)

As of December 31, 2004 590,000,000 19,105,670 171,443,700

The shares included above represent the authorized share capital of the Company. All shares are fully subscribed and paid. The Treasury shares have been acquired primarily in order to cover obligations under the Stock Incentive Plan described in Note 17, and warrants issued described in Note 18.3. Disposals include shares and options granted to employees in connection with the different Stock Incentive Plans and portfolio adjustments made in order to match with the current obligations of the Group. In the Annual General Shareholders’ meeting that has taken place in June 2004, the redemption of 48,539,400 class “B” shares was approved, following the sale of 78,000,000 Amadeus class “A” shares by Lufthansa Commercial Holding, GmbH on February 12, 2004 The acquisition cost of the Treasury shares mentioned above as of December 31, 2004 is KEURs 109,499. As of December 31, 2004 the Company has recorded in the balance sheet a provision for decline in value of treasury shares amounting to KEURs 24,782. During 2004 a reversion of KEURs 15,868 (see Note 19) has been included in the statement of income, and a negative impact of KEURs 16,427 in the “Other reserves” caption. Treasury shares disposals during 2004 have resulted on a net loss of KEURs 12,783 that has been recognized in the “Extraordinary expense” caption by KEURs 12,850 (see Note 19) and in the “Extraordinary income” caption by KEURs 67.

12.3. Each class “A” share carries the right to one vote, whilst each class “B” share carries

the right to 10 votes. Economic rights are greater for class “A” shares in respect of any future distribution of dividends. The right to receive a dividend for class “B” shares is calculated as the lesser of 1% of total dividends or 1% of the par value of class “B” shares. In the event of liquidation of the assets of the Company, class “A” shares have greater economic rights than class “B” shares, as the Company would pay out the par value of class “A” shares and in case of any outstanding amounts they would be distributed among class “B” shares for their par value; further remaining amounts would be distributed among class “A” shares.


27

As of December 31, 2004 the Company's shares are held as follows:

Shareholders Class "A"

shares Class "B"

shares % of class “A” shares


Société Air France 137,847,654 85,782,614 23.36% 43.21% Iberia Líneas Aéreas de España, S.A. 107,826,173 67,100,243 18.28% 33.80% Lufthansa Commercial Holding, GmbH 29,826,173 18,560,843 5.05% 9.34% Others (1) 314,500,000 - 53.31% 13.65% Total 590,000,000 171,443,700 100% 100%


12.4. The General Shareholders’ Assembly of June 14, 2004 declared a dividend per class

“A” and per class “B” share, in accordance with the Company’s by-laws and once the economic rights of the Treasury shares were proportionally distributed to the remaining shares. The final dividend of KEURs 35,000 was paid in July 2004 with regards to the distribution of 2003 results.

12.5. The Company has fully established the required legal reserve. This reserve can only

be used to compensate for prior year losses up to a value of 20% of share capital, in the event that no other reserves are available. Or, part of the reserve may be used to increase the Company´s share capital, but the value remaining in the reserve must be no lower that 10% of the increased share capital.

13. DEBTS WITH FINANCIAL INSTITUTIONS The breakdown of amounts owed to financial institutions, by maturity, as of December 31, 2004 is as follows: Other credit facilities 559 Interest due on loans and credits 137

Total short-term debt 696

The Company has two variable interest rate syndicated loans as of December 31, 2004 which are under KEURs 200,000 and KEURs 300,000 dual currency revolving credit facility agreements, denominated in EUR and USD. As of December 31, 2004, the total unused amount available under these facilities is of KEURs 500,000. The interest rates for the drawdowns on these loans ranged from 2.37% to 2.58% for the year ended December 31, 2004. These loans have commitment fees that range from 0.25% to 0.26% of the unused portion. Under the terms of these loan agreements, the Company is obliged to meet certain covenants, based on its Consolidated IFRS Financial Statements, the most important of which are that the ratio of debt to total EBITDA (Earnings before interest, tax, depreciation


28

and amortization) shall not exceed 3:1 and that the ratio of EBITDA to total financial charges shall be or shall exceed 4:1. The repayment and the maturity schedule for these two facilities as of December 31, 2004 are as follows:

Date of maturity

Amount of facilities maturing Repayment schedule

for outstanding amounts

April 24, 2005 100,000 - April 24, 2006 100,000 - December 20, 2006 150,000 - December 20, 2007 150,000 -

500,000 -

In addition to the syndicated loans mentioned above, the Company has short-term credit lines for a total of KEURs 50,000, of which KEURs 559 was used as of December 31, 2004.

14. OTHER LONG-TERM LIABILITIES

The breakdown of this caption as of December 31, 2004 is as follows:

2004

Deferred purchase consideration 25,739 Derivative liabilities (Note 18) 993 Others 906

Total 27,638

The deferred purchase consideration (payable over a period of up to 10 years from the acquisition date) is derived from certain corporate acquisitions during 2002 and 2003. The amount of this liability is contingent on the evolution of the respective businesses acquired.


29

15. COMMITMENTS WITH THIRD PARTIES As of December 31, 2004, the Company has issued guarantees to cover certain lease obligations entered into by Group and related companies, as per the following detail: Assets under lease Data processing equipment 4,172 Office buildings 76,772 Others 627 81,571

16. REVENUES, EXPENSES AND WORKFORCE 16.1.The Company operates in the travel industry and, accordingly, events that significantly

affect the industry could also affect the Company’s operations and financial position. The following geographical distribution of revenues is based primarily on the country where bookings were made and, with respect to bookings made through the Company’s CRS directly with airlines, based upon the home country of the airline:

Geographical market Europe 1,269,672 United States 157,060 Rest of the world 476,571 1,903,303

16.2. A breakdown of the trade revenues denominated mainly in EUR and USD, by type of

customer, is as follows:

Companies belonging to the Group 35,085 Companies belonging to Group's significant shareholders and the Group's related companies 493,282 Others 1,374,936 1,903,303

16.3. Likewise, a breakdown of the other operating expenses denominated mainly in EUR

and USD, by type of supplier, is as follows:

Companies belonging to the Group 1,078,443 Companies belonging to Group's significant shareholders and Group's related companies 246,020 Others 334,114 1,658,577


30

16.4. The average number of employees of the Company for the year ending December 31, 2004 was 345.

17. STOCK INCENTIVE PLANS Beginning with the International Global offering of 1999, the Group adopted a stock based Employee Incentive Plan (the Plan) to retain and motivate senior management and employees starting October 19, 1999. The plan provides for the award of common stock in the form of stock options and stock grants as follows: i) The Group granted to its employees a one-time grant of shares, depending on salary


ii) The Group granted to senior management a one-time grant of shares which would vest

between three and four years. iii) The Group also granted to executive employees (including non-senior members from the

management team) in each of the years 1999 to 2004, options to purchase shares of the Company's Common Stock at the market price on the date of the grant until year 2003 and at average market price for year 2004. Thus, no compensation expenses has been recorded for Plans prior to 2004, and KEURs 88 compensation expense has been recognized related to 2004 Plan. The aforementioned options vest in equal installments over a four-year period measured from the date of the grant and have a ten-year term from the grant date.

As of December 31, 2004 the detail of these plans is as follows:

2004

Number

of options Value at

exercise price Outstanding at 1st January 12,056,290 66,559

Of which vested 4,983,719 29,549

New rights 3,630,120 19,203 Rights exercised (*) (889,071) (4,576) Rights expired (217,042) (1,238) Plan 2003 adjustment (168,049) (971) Outstanding at 31st December 14,412,248 78,977

Of which vested 6,476,974 37,696

(*) The average price for the rights exercised was 5.15 EURs The increase in new rights during 2004 corresponds to the 2004 Stock Option Program.


31

Maturity dates of options as of December 31, 2004 are as follows:

2004

Number Exercise

price Five years 1,596,212 5.75 Six years 1,122,956 8.89 Seven years 2,106,936 5.42 Eight years 2,754,393 3.88 Nine years 3,201,631 5.78 Ten years 3,630,120 5.29 Total 14,412,248

iv) During 2002, the Company implemented an Employee Stock Purchase Program. The

general conditions of the program allow employees to purchase Company shares every three months up to an established percentage of the employee’s annual salary. If the purchased shares are maintained over a period of 30 days, the Company will grant shares for 15% of the amount the employee contributes to the program. The cost for the year ended December 31, 2004 was KEURs 13.

18. FINANCIAL INSTRUMENTS The Company uses the following financial instruments as part of its commercial operations and to manage the risks arising from fluctuations in currency exchange rates, interest rates and share market prices: 18.1. Currency derivatives

The Company has risks associated with fluctuations in currency exchange rates and uses currency derivatives to hedge future cash flows, net investments in foreign entities and certain monetary assets and liabilities. The Company is party to a variety of foreign currency forward and option contracts for the management of these exchange rate exposures.


32

As of December 31, 2004 the details of the open currency options and open forward contracts are as follows:

Derivative Assets

Type Financial

Instrument Currency Maturity Notional(**)

Fair value (KEURs)

(KEURs)

P/L Balance Premium

Paid Total

USD 2005 24,432 4,143 - - 4,143 Forward

Others 2005 (5,672) 468 - - 468

2005 55,062 - (1,696) 1,770 74 2006 66,808 - (1,468) 1,751 283

Cash Flow

Options

USD

2007 40,378 - (947) 952 5

USD 2005 5,284 - 154 - 154

Net Equity Investments

Forward

Others 2005 19,049 - 112 - 112

USD 2005 23,758 888 - - 888 Forward

Others 2005 11,606 144 - - 144 IRS EUR 2009 8,474 - 28 - 28

Others (*)

Total 5,643 (3,817) 4,473 6,299

Total short-term (Note 11) 5,643 (1,430) 1,770 5,983 Total long-term (Note 8.7) - (2,387) 2,703 316

(*) Others include derivative instruments, which not qualify for hedge accounting, that are used by the

Company to protect itself from changes in value of foreign currency denominated monetary assets and liabilities.

(**)Notional amounts for options are presented based on year-end exchange rates.


33

Derivative Liabilities

Type Financial

Instrument Currency Maturity Notional(**)

Fair value (KEURs) (KEURs) P/L Balance Total

USD 2005 (9,117) - 412 412 Forward

Others 2005 (10,832) - 372 372

2005 40,378 373 - 373 2006 28,632 506 - 506

Cash Flow Hedge

Options

USD

2007 38,176 487 - 487

USD 2005 (5,222) 93 - 93

Net Equity Investments

Forward

Others 2005 (19,014) 79 - 79

USD 2005 6,359 6 - 6 Others (*)

Forward

Others 2005 (13,357) - 830 830

Total 1,544 1,614 3,158

Total short-term (Note 11) 551 1,614 2,165

Total long-term (Note 14) 993 - 993

(*) Others include derivative instruments, which not qualify for hedge accounting, that are used by the

Company to protect itself from changes in value of foreign currency denominated monetary assets and liabilities.

(**) Notional amounts for options are presented based on year-end exchange rates. 18.2. Interest rate derivatives

In 2002, the Company entered into an interest rate swap agreement starting November 29, 2002 ending November 29, 2005 with a fixed notional of KEURs 100,000. This agreement entitled the Company to receive interest at floating rates and pay at a fixed rate of 3.423%. The agreement entered into is to limit the Company’s exposure to increases in interest rates of its credits and loans. As of August 2003, the bullet principal of the outstanding agreement was reduced up to KEURs 50,000. In January 2004, the remaining notional of this IRS was fully cancelled. Additionally, in June 2003 the Company entered into a new agreement ending June 5, 2009. The principal amounted to KEURs 10,799 and would be reduced during the life of the agreement (amortizing principal). As of December 31, 2004 the principal amounts to KEURs 8,474. This agreement entitles the company to receive interest at floating rates and pay at a fixed rate of 2.6775%. As a result of the change in the interest payment structure of the Company’s credits and loans as of December 2003,


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this structure does not qualify for hedge accounting as of December 2004. The fair value of the outstanding agreement as of December 31, 2004 is an unrealized gain of KEURs 28, which is treated for accounting purposes as ineffective derivatives.

18.3. Equity related instruments

a) Warrants issued

As a result of certain commercial agreements in the IT services arena and other areas, the Company issued, during the year 2000, warrants to purchase 10,668,000 of its class “A” shares at exercise prices ranging from of EURs 9.09 to EURs 13.40 per share. Under the terms of the respective contractual agreements, the number of warrants is based on the number of class “A” shares issued on the date of the contract. Therefore, any increase in the number of issued class “A” shares could require a corresponding increase in the number of warrants. During 2004, 8,850,000 of these warrants have expired without been executed. As result, 40,267 KEURs included in “Other deferred income” caption as of December 31, 2003 (see Note 19) has been recognized as extraordinary income. Expiration date for the remaining warrants is November 2005. As of December 31, 2004 these warrants are fully vested. The fair values of the outstanding warrants are estimated based on quoted market prices of the underlying Amadeus class “A” shares at the balance sheet date and applying an appropriate valuation methodology. This methodology uses certain estimates, including the volatility of the Company’s share price. The cumulative unrealized gains resulting from the remeasurement of these warrants as of December 31, 2004 included in the “Other deferred income” caption amounts to KEURs 7,708.

b) Equity swap

In order to manage the exposure to a rise in its share price with respect to the warrants described above, the Company entered during the year 2000 into equity swap agreements which allowed the Company to buy 12,812,858 of its class “A” shares at an average price of EURs 10.32 or settle the difference with the market price in cash, at any time until mid-2004. The financing costs relating to this agreement were at interest rates of 2.55% to 2.74% during 2004. These costs are recognized in the “Financial expenses” caption, and amount to 465 KEURs as of December 31, 2004. In November 2003, an “equity swap” agreement representing 1,812,462 class “A” shares was cancelled. As of December 31, 2004 all agreements have matured being converted into Treasury shares.


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c) SITA Inc N.V. depository certificates

As of December 31, 2004 the Company holds 3,214,200 depository certificates of SITA Inc N.V. issued by Stitching, “the SITA Information Networking Computing Foundation” (“the Foundation”), representing 3,214,200 shares of SITA Inc N.V., at a cost of KEURs 3,557 which is included in the “Long-term securities portfolio” caption.

19. EXTRAODINARY EXPENSE AND INCOME The breakdown of extraordinary expense and income as of December 31 is as follows:

Extraordinary expense Provisions for long-term investments and equity instruments (see Note 8.6) 86,479 Provision for doubtful debts with Group Companies (see Note 8.6) 9,935 Losses on disposals of fixed assets 17 Losses related to sales of treasury shares (see Note 12.2) 12,850 Others 601 Total 109,882 Extraordinary income Warrants issued (see Note 18.3) 40,267 Reversal of treasury shares provision (see Note 12.2) 15,868 Reversal of long-term investments provision (see Note 8.6) 10,125 Others 4,020 Total 70,280

20. TAXATION

20.1. All taxes corresponding to the years 2000 to 2004 as well as Corporate Income Tax

related to 1999 are still open to tax inspection.

A general tax audit initiated by the Spanish tax authorities over the Company in July 2004 is still in progress. The taxes and fiscal years under review are the Corporate Income Tax for the years 1999 to 2002 and remaining taxes (VAT, withholding taxes, etc.) for the years 2000 to 2002.


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20.2. The reconciliation of the difference between the net accounting result for year 2004

and the estimated taxable income is as follows:

Net accounting result before tax 239,945 Increases Decreases Permanent differences 26,848 (81,265) (54,417) Temporary differences arising in current year 146,011 (457) 145,554 Temporary differences with origin in prior years - (97,003) (97,003)

Tax result for the year - 234,079

Total temporary differences due to deferred taxes from year 2004 48,551

The reconciliation between the tax calculated at the tax rate applicable in Spain and the Corporate Income Tax expense for fiscal year ended December 31, 2004 is as follows:

Income before tax 239,945 Tax calculated at Statutory rate in Spain 83,981 Permanent differences (835) Tax credits (52,736) Partnership taxed at Parent company level 906 Other 761

Income tax expense 32,077

The most significant temporary differences correspond to movements in the provision for decline in value of long-term financial investments, depreciation/amortization rates, bad debtors and cancellations. Additionally, permanent differences relate mainly to tax exemption regimes applying to dividends from certain Group and related companies. As of December 31, 2004 there are tax credits mainly due to export activities, and to international double tax treaties, amounting to KEURs 49,391 that have been credited to income tax in 2004. An additional amount of KEURs 32,261, will be applied in subsequent years. Deferred tax credits for investments in subsidiaries and related companies as of December 31, 2004 amount to KEURs 65,831 and are included in the “Other deferred income” caption. The European Commission has asked to the Spanish Government for the necessary information to analyze the export activity deduction to determine whether it constitutes being termed a state grant. The European Commission has not concluded its analysis yet, so the scope of the claim is still not known. With the situation as it stands, it is not possible to objectively determine any final impact on the Company once the claim is resolved. The Company has not registered any provision for this concept as Amadeus estimates that the probable outcome will be the cancellation of the rebate in the short-term without the need to pay back rebates already received.


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20.3. As of December 31, 2004, details of tax receivables and payables are as follows:

Receivable Payable

VAT 4,491 37

Tax receivable short term 2,324 -

Deferred tax assets short-term 28,656 -

Income Tax 11,631 406

Others 95 989

Total short-term 47,197 1,432

Long term deferred tax assets 75,193 - Tax receivable long-term 32,261 -

Total long-term 107,454 -

Tax receivable long-term includes tax credits as a result of the increase in export activities derived from new corporate acquisitions, to be applied in 2004 and subsequent years.

20.4. The Company’s deferred tax balances as of December 31, 2004 are as follows:

Deferred tax assets short-term:

Group Companies bad debt 3,477 Bad Debt provision 7,364 Cancellations provision 16,207 Other 1,608

28,656

Deferred tax assets long-term:

Depreciation of assets 3,130 Investment provision 67,776 Treasury shares provision 2,470 Other 1,817

75,193


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21. OTHER INFORMATION Total remuneration of all kinds to the members of the Board of Directors of the Company amounts to KEURs 426 in 2004. No loans, advances or stock options have been granted to the members of the Board of Directors. Detail of significant interests in, and transactions, on their own behalf or on behalf of a third party, regarding, companies with activities similar to those of the Company on behalf of directors. In accordance with article 127, section 4 of the Spanish Corporation Law, introduced by Law 26/2003 on 17 July, which modifies the Stock Market legislation, Law 24/1988, of 28 July, and the text in reference to Bankruptcy of the Spanish Corporation Law, with the express purpose of enforcing the transparency of public listed companies, we report that no members of the Board of Directors have maintained financial interests in companies engaged activities that are the same, analogous or complementary to the principle activities of the Company.

Similarly, and in accordance with the aforementioned text, any transactions performed by members of Board of Directors, on their own behalf or one behalf of a third party, in companies engaged in activities which are the same, analogous or complementary to those of the Amadeus Global Travel Distribution, S.A. are outlined below:

Name Transaction realized on agent’s own

behalf or on behalf for third party Name of third party on behalf of which the transaction was realized, if appropriate (2)

Role or function of the agent in the third party

Christian Boireau

Third party Amadeus France SNC Board Member

Manuel López Colmenarejo

Third party Sistemas Automatizados Agencias de Viaje, S.A.

Chairman

Professional fees for auditing services performed in the Company and its subsidiaries by its auditor Deloitte and their related member firms amount to KEURs 1,404, out of which KEURs 358 correspond to the Company for the year ended December 31, 2004. Additionally, fees for audit related services, such as due diligence and purchase audits, and other professional services delivered to the Company and its subsidiaries by its auditor Deloitte and their related member firms amount to KEURs 393 and KEURs 505 respectively for the year ended December 31, 2004, out of which KEURs 323 and KEURs 254 correspond to the Company, also respectively.

22. SUBSEQUENT EVENTS Amadeus has increased from 55.36% to 74.02% its stake, for EUR 80.4 million, in the pan-European on-line portal Opodo, with the corresponding proportional dilution of the other shareholders. The transaction was carried out within the context of the acquisition by Opodo


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of Karavel S.A., Quest and the integration of the wholly owned e-commerce subsidiaries for the Italian and Scandinavian market, of eviaggi.com and Travellink AB, respectively. The acquisition of 100% equity stake in Karavel, S.A. amounts approximately EUR 60 million in cash, plus the resulting amount of additional adjustments to the initial purchase price in relation to the working capital. Karavel is a leading online travel company in France, whose core expertise is in the pre-packaged holiday market. Its wholly owned subsidiary Promovacances, S.A is a well-known and respected brand, established in the French market since 1997, offering great value to travellers to a wide range of destinations and product types. Continuing the strategy of consolidating its global distribution network, Amadeus has increased its shareholding in SAVIA Amadeus, its Spanish national marketing and distribution company (NMC) for Spain and Portugal, from 34 to 100 per cent. SAVIA Amadeus, headquartered in Madrid (Spain), is one of Amadeus' largest markets worldwide in terms of bookings The cost of the acquisition is EUR 82.3 million in cash plus the resulting amount of additional adjustments to the initial purchase price in relation to the working capital.

As it is of public domain, the major shareholders of the Company (Air France, Iberia and Lufthansa) initiated in the year 2004 a selection process among a group of financial investors for the acquisition of the Company. As already informed to the Spanish Stock Exchange Commission the major shareholders together with BC Partners and Cinven have reached an agreement to launch a public tender offer over 100 per cent of Amadeus shares at a price of EUR 7.35 per share, with the final objective of de-listing the Company from the Stock Market. At this agreed price, the value of the Group amounts to EUR 4,340 million. As there is no more available information from these private negotiations, we cannot foresee the potential accounting impacts derived from this transaction. The stock option plans, according to their rules, would become immediately vested in the case of a change of control. The holders would have up to six months to exercise their options (see Note 17).


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23. STATEMENT OF SOURCE AND APPLICATION OF FUNDS Applications 2004 2003

Purchases of fixed assets

Intangible fixed assets (6,460) (18,249) Tangible fixed assets (3,509) (4,703) Investments (263,293) (214,464)

Transfer to long-term from financial investments (2,779) (12,166) Treasury shares (63,085) (96) Capital redemption, class “B” shares (485) - Deferred expenses (431) (916) Dividend (35,000) (29,998) Reduction of long-term debt (33,545) (146,720) Currency translation adjustments (72) (88)

Total applications (408,659) (427,400)

Sources Increase of long-term debt 145 48,617 Funds provided by operations 274,820 234,274 Sale of fixed assets

Intangible assets 85 - Tangible assets 171 861 Long-term investments 104,982 75,206

Sale of Treasury shares 39,322 1,242 Transfer to short -term from long-term investments 19,225 11,432 Deferred expenses - 1,224

Total sources 438,750 372,856

Excess of sources (applications) over applications (sources) Increase/(decrease) in working capital 30.091 (54,544)


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2004 2003

Variation in working capital Increase Decrease Increase Decrease

Receivables 17,851 - 1,477 - Short-term liabilities 14,212 - - 128,240 Short-term financial investments 1,095 - 69,457 - Cash - 2,951 2,806 - Prepaid expenses - 116 - 44

Total 33,158 3,067 73,740 128,284

Variation in working capital 30,091 - - 54,544

Funds provided by / (applied to) operations 2004 2003

Net income for the year 207,868 150,027 Net variation of depreciation of start-up expenses 3,864 4,915 Net variation of depreciation of tangible fixed assets 3,560 4,963 Net variation of amortization of intangible fixed assets 18,771 19,366 Net variation of provisions for long-term investments 90,018 82,973 Net variation of provisions for treasury shares (15,868) (14,848) Provision for long-term liabilities (10,125) 11,736 Amortization of deferred expenses 2,426 2,045 Deferred income (24,957) (297) Results on sale of fixed assets (953) 117 Losses from Treasury shares 12,783 - Long-term deferred tax assets (12,567) (26,723)

Total funds provided by / (applied to) operations 274,820 234,274

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DIRECTORS´ REPORT OF AMADEUS GLOBAL TRAVEL DISTRIBUTION, S.A. INTRODUCTION According to IATA, 2004 was a year of strong recovery for the travel market. Indeed, traffic rebounded stronger than at any time since the 1991 Gulf War recovery. While full year data is not yet in, IATA estimates that 1.8 billion passengers travelled by air in 2004, an increase of 7.6% over 2003. Despite the fact that part of this growth has been fuelled by Low Cost Airlines, which have a limited participation in the GDSs’ screens, bookings volume in 2004 was very strong, both for the GDS industry and Amadeus. It should be kept in mind that air volumes were severely depressed in the first half of 2003 by SARS in Asia and the Iraq War weakening the base of comparison.

It is worth to mention that at the end of June 2004, Amadeus took a majority stake in the pan-European travel website Opodo. In spite of the consolidation of Opodo´s losses during the second half of the year, Amadeus Net Income reached an all time record of EUR 216 million, 44% higher than in 2003 and above market expectations. These results were achieved thanks to the rebound in travel and cost control measures.

Amadeus business activity is divided into three different line of business. Furthermore during 2004 we have increased our presence into e-commerce market through the acquisition of a controlling stake in the travel portal Opodo.

• Travel distribution

During 2004 Amadeus continued to increase the number of airlines showing real-time information in its system with 50 new airlines, including the newly created Spanish long haul carrier, Air Madrid. Other important additions to the system have been:

• The European rail operator, Eurostar became available on the Amadeus airline display in January 2004.

• National Car Rental and Fox Rent-a-car that are now under Amadeus Complete Access Plus

• Barceló Hotels and Resorts and Envergure.

• Amadeus reached an agreement to get access to all published fares, including its web fares, from Delta Air Lines, Continental Airlines, United Airlines, Northwest Airlines and US Airways .

On the agency side Amadeus has signed a global partnership agreements with RADIUS, one of the world’s largest travel management company and ebookers moved its Travelbag brand to the Amadeus reservation system.

These are the most important acquisitions made during the year:

• In the first quarter we increased our participation in both Amadeus Brasil and Travellink. By the end of these operations we owned the 76% and 85% respectively.

• In the leisure arena, Amadeus expanded its agency and tour distribution offering through a strategic technology partnership with Comtec (Europe) Ltd, and acquired a 20% shareholding in the company.

• In July we announced the acquisition of a controlling stake in the travel portal Opodo.

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• During the last quarter we acquired a significant stake of Optims, raising our shareholding from 30% to 96%.

• In December we concluded the acquisition of 100% of Amadeus France, acquiring the remaining 66% shareholding.

Finally during this year Amadeus started to pilot with British Airways one of the key elements of its new value-based pricing philosophy released in November 2003: the Low-Fare Distribution (LFD) model. This initiative was well received, more than 85 percent of Amadeus’ United Kingdom travel agency customers in terms of booking volume chose to opt-in to this programme which brings them access to British Airways' low fare inventory.

• IT Services

On the IT Services side Amadeus continues the successful development of the Amadeus Altea Customer Management Systems, which now has the following clients: British Airways, Qantas, Finnair, and the new 2004 clients dba and South African Airways.

During 2004 Amadeus has successfully migrated Qantas to Altea Plan and is now migrating British Airways.

During the fourth quarter, Amadeus consolidated its market leadership position in the area of electronic ticketing. Amadeus today provides e-ticketing hosting for 16 carriers with 88 interlining agreements implemented.

• E-Commerce

Amadeus e-Travel bookings grew by 72.9% for the full year 2004 compared with 2003. One of our products Amadeus’e-Travel Planitgo was voted “World’s Leading Internet Booking Engine” by the World Travel Association, recognizing it as the airline industry’s internet booking engine of choice. Other important achievements have been :

• In May, e-Travel signed a major agreement with TQ3 Travel Solutions Singapore. As part of a multi-year agreement, TQ3, one of the world's largest providers of travel management services, delivers Aergo to its corporate customer base.

• In June Air Canada signed a five-year agreement with e-Travel to provide online booking technology and services to Air Canada's travel booking websites for consumers and travel agencies. Air Canada’s websites will be powered by Planitgo , including Planitgo Flex Pricer Calendar.

• In September, Lufthansa chose e-Travel and IBM to build and run its next generation internet portal. e-Travel will provide and operate the overall booking and faring solution and IBM will supply the consulting, solution development, maintenance and hosting operations.

• SAP Travel Management, powered by e-Travel, experienced 50% booking growth in 2004, thanks to growing adoption and new corporate customers, like Woodside Energy, Australia's leading oil and gas exploration and production company.

• Opodo

After the acquisition of 55.36% of Opodo, this company is now fully consolidated.

The months of July and August were record months for Opodo with gross sales reaching an all time high. This was helped by strong growth in the French & German package holiday sales.

In September Opodo signed a Management Services Agreement with Eviaggi.com to take over the operational management of the Amadeus-owned Italian internet travel agency. During the

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next few months they will be looking at a potential deeper integration of Opodo’s products and services with Eviaggi.com, to maximise the synergies between the two companies

During the fourth quarter Simon Vincent was appointed Chief Executive Officer of Opodo, effective 1 November. Simon has over 20 years’ experience in the travel and financial services industries.

ECONOMIC RESULTS Introduction Given the structure and operative processes of the Group, the Management of Amadeus believes that the consolidated annual accounts show a more adequate image of the Group activity than the individual annual accounts. Some of the components of the individual annual accounts not included in the consolidated annual accounts are the provision for the decline in value of long-term financial investments in Group and related companies, inter-company transactions and dividends from Group and related companies. Operating revenues Trade revenues for the year ended December 31, 2004 were EUR 1,903.3 million, with an increase of 5.7% compared to the previous year of EUR 1,799.8 million. Amadeus’ revenues come mainly from the invoicing of: a) Air bookings made through terminals installed both in travel agencies and in the airlines’

direct sales offices, or via web pages connected to the Amadeus data processing center. b) Non air bookings: Mainly hotel rooms, car rentals, train tickets as well as other travel

services. c) Information technology services provided to British Airways and Qantas. d) Other non booking revenues mainly include the issuing fees of air tickets (both paper tickets

and electronic ticketing), the sale of statistical information on airline bookings, fare quote services, interlink charges and subscriber fees.

Revenues from air and non-air bookings increased by EUR 60.6 million in 2004. They represent an increase of approximately 4.3% when compared to the previous year, mainly as result of the increase by 6.8% in air bookings. Other revenue related to services rendered increased by EUR 42.9 million in 2004, representing an increase of approximately 11.1% compared to the previous year. This increase is mainly due to the evolution of traditional products like ticketing, marketing and information systems and interlinks, and the on-line solutions for airlines like the Planitgo products. The total number of bookings net of cancellations registered in 2004, excluding potential future cancellations from the open booking inventory, was 411.2 million, which represents an increase of 6.7% or 25.8 million bookings compared to previous year. The air bookings increase was 6.8%, representing 24.2 million bookings, while the non-air bookings grew by 5.4% or 1.6 million bookings.

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The number of bookings in the European market increased by 4.5% or 11.7 million bookings compared to last year. Additionally, in the Rest of the World markets (excluding North America) the increase was 14.7%, representing 13.4 million bookings. In the North American market, bookings increased by 1.9% or 0.7 million bookings. Operating Expenses Operating expenses for the twelve months ended December 31, 2004 amounted to EUR 1,754.6 million, which compared to EUR 1,647.3 million registered in 2003; represent an increase of 6.5%. The most significant operating expense is the distribution fee paid to National Marketing Companies (NMCs) and system users for bookings made in Travel Agencies and certain Airlines´ ticketing offices (ATOs/CTOs). Total expenses corresponding to distribution fees during 2004 were EUR 962.5 million, representing an increase of 5.4% compared to the previous year, where total distribution fees were EUR 912.8 million. Operating expenses, other than distribution fees, include mainly the following concepts: § Data processing fees, that during 2004 amount to EUR 318.8 million, representing an

increase of 1.7% compared to the previous year, when total data processing fee amounted to EUR 313.3 million.

§ Personnel expenses, which during 2004 increased by 2.01%. § Amortization expenses, which decreased by 10.4% during 2004 compared to 2003. § External services expenses, which include among others general and administrative

expenses, central activities of publicity, public relations and conventions, as well as consultancy services. External services expense increased by 58.01% during 2004 compared to 2003, due to consultancy services for several projects being implemented by the Company.

Operating profits and net results Operating profit was EUR 151 million during 2004, representing a decrease of 2.7% from 2003 results of EUR 155.3 million. Net results for the year ended December 31, 2004, was EUR 207.9 million, compared to EUR 150 million for the same period in 2003. The difference between Net income from financial activity reported as of December 31, 2004, amounting to EUR 128.5 million and Net income from financial activity, EUR 89.6 million reported as of December 31, 2003 is mainly due to the increase in dividends received from the Group companies. The differences between Net extraordinary expenses reported for the year ended December 31, 2004, amounting to EUR 39.6 million and Net extraordinary expenses, EUR 79 million reported as of December 31, 2003 are mainly due to the expiration of some warrants issued without having been executed.

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Outlook Amadeus management assumes that 2005 booking volumes will grow between 4.7% and 5% compared to 2004 and total revenues will show between 6.2% and 8% growth. The company continues to work on its cost restructuring plan initiated in 2004 that should allow it to achieve improvements in the net income in 2005. FINANCIAL RISK MANAGEMENT

Given Amadeus Global Travel Distribution’ capital structure currently in place, its main financial risk derives from its foreign exchange exposures.

The Amadeus FX Risk Management Policy ensures that business exposures to foreign exchange risks are identified, measured and managed by using the most effective and efficient methods to eliminate, reduce, or transfer such exposures. 2004 is the third full year under Amadeus FX Risk Management Policy as approved by the Board of Directors on September 24, 2001.

According to this Policy there are three different categories of FX exposures: operating exposures, transactional exposures and exposures in net equity investments in foreign subsidiaries. For each of these categories, Amadeus FX Risk Management Policy sets a different approach:

• Operating exposures: the Company has put in place an active mid-term (3 year horizon) hedging approach for operating exposures (the target operating exposures are defined in the form of EBITDA flows).

The goals of the Foreign Exchange Risk Management Policy for this risk category are twofold: reducing the volatility of Amadeus’ operating result due to movements in the foreign exchange rates, and additionally, adding some economic value through an active hedging strategy.

In every moment the risk management strategies implemented must be within the limits set up in the Annual Foreign Exchange Treasury Plan approved by the Board of Directors. The aforementioned limits are checked before the implementation of any change in the hedging strategy and on monthly basis.

• Transactional exposures: In accordance with the Foreign Exchange Risk Management Policy, Amadeus follows a passive hedging approach for this risk category, aiming to minimize the foreign exchange gains or losses in the Company’s statement of income.

• Exposures in net equity investments in foreign subsidiaries: Our target in the hedging of these assets is to protect, in the long term, the EUR value of the foreign currency denominated equity investments through an active hedging strategy.

RESEARCH AND DEVELOPMENT ACTIVITIES The Company does not perform Research and Development activities by itself. These responsibilities are performed by other subsidiaries of its Group, so the information included in the Consolidated Directors’ Report is more representative. TREASURY SHARES As of December 31, 2004, the Treasury shares portfolio is composed of 19,105,670 class “A” shares, equivalent to 0.83% of the share capital of the Company with a nominal value of EUR 191,056.7. The accounting value of these Treasury shares at year-end, having deducted the provision for the decline in value, amounts to EUR 84,716,423.

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The Treasury shares portfolio is assigned almost totally to a specific purpose, i.e. the hedging of commitments incurred by the Group in connection with the remuneration systems consisting of stock option plans for employees and senior executives or hedging of stock options granted by the Company in partial consideration of commercial transactions carried out by the Company (warrants). The Ordinary General Assembly celebrated on June 14, 2004, authorized the Board of Directors to proceed, in one or more acts, with the acquisitions of Treasury shares by the Company itself and by companies of its group, both directly as well as indirectly, as the case might be, in accordance with Article 75 of the Spanish Corporations Law. The maximum number of shares to be acquired cannot exceed 5% of the total class “A” shares, provided that the total par value of the shares to be acquired from the date of the General Assembly of Shareholders’ meeting together with the total par value of the existing Treasury shares prior to this date does not exceed 5% of the share capital of the Company. The maximum and minimum price to be paid is 125% and 75% respectively of the Stock Market value at the acquisition date. The Board of Directors may use the Treasury shares in consideration of business and corporate transactions, stock loans, hedging of financial risk derived from commercial transactions, as well as disposal and application of current remuneration systems consisting of the stock grant and stock option plans for employees and senior executives. The authorization is valid for 18 months from the date of celebration of the Ordinary General Assembly, leaving without effect the previous authorization conferred by the Ordinary General Assembly celebrated on June 20, 2003. The Company purchased 11,563 class “A” shares and disposed of 908,736 class “A” shares during the calendar year 2004, in order to fulfill its obligations related to the stock incentive plans for employees and/or senior executives. At the same time, a reassignment of 5,800,000 class “A” shares has taken place during the year with the purpose of matching the current commitments of the Group in connection with the stock option plans for employees. The global result of all the above mentioned transactions represents a nominal value of EUR 8,971.73, equivalent to 0.03% of the share capital of the Company. In addition, during the calendar year 2004, the Company purchased 4,500,000 class “A” shares, as a result of the maturity of an equity swap agreed with a financial institution for hedging the financial risk derived from the warrants granted to British Airways. This transaction represents a 0.19% of the share capital of the Company, with a nominal value of EUR 45,000. RELEVANT FACTS OCCURRED AFTER THE CLOSING OF THE YEAR Amadeus has increased from 55.36% to 74.02% its stake, for EUR 80.4 million, in the pan-European on-line portal Opodo, with the corresponding proportional dilution of the other shareholders. The transaction was carried out within the context of the acquisition by Opodo of Karavel S.A., Quest and the integration of the wholly owned e-commerce subsidiaries for the Italian and Scandinavian market, of eviaggi.com and Travellink AB, respectively. The acquisition of 100% equity stake in Karavel, S.A. amounts approximately EUR 60 million in cash, plus the resulting amount of additional adjustments to the initial purchase price in relation to the working capital. Karavel is a leading online travel company in France, whose core expertise is in the pre-packaged holiday market. Its wholly owned subsidiary Promovacances, S.A is a well-known and respected brand, established in the French market since 1997, offering great value to travellers to a wide range of destinations and product types.

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Continuing the strategy of consolidating its global distribution network, Amadeus has increased its shareholding in SAVIA Amadeus, its Spanish national marketing and distribution company (NMC) for Spain and Portugal, from 34 to 100 per cent. SAVIA Amadeus, headquartered in Madrid (Spain), is one of Amadeus' largest markets worldwide in terms of bookings The cost of the acquisition is EUR 82.3 million in cash plus the resulting amount of additional adjustments to the initial purchase price in relation to the working capital. As it is of public domain, the major shareholders of the Company (Air France, Iberia and Lufthansa) initiated in the year 2004 a selection process among a group of financial investors for the acquisition of the Company. As already informed to the Spanish Stock Exchange Commission the major shareholders together with BC Partners and Cinven have reached an agreement to launch a public tender offer over 100 per cent of Amadeus shares at a price of EUR 7.35 per share, with the final objective of de-listing the Company from the Stock Market. At this agreed price, the value of the Group amounts to EUR 4,340 million. As there is no more available information from these private negotiations, we cannot foresee the potential accounting impacts derived from this transaction. The stock option plans, according to their rules, would become immediately vested in the case of a change of control. The holders would have up to six months to exercise their options. AUDIT COMMITTEE Annual Report 2004 of the Audit Committee of the Board of Directors of Amadeus Global Travel Distribution S.A. According to article 44.2 c) of the Regulations of the Board of Directors of Amadeus Global Travel Distribution, S.A., the Board of Directors' Audit Committee must draw up an annual report on the Committee's activities for inclusion in the Directors´ Report, which must be drawn up by the Company's Board of Directors and approved by the General Shareholders’ Meeting, as appropriate. In order to meet this obligation, the Board of Directors' Audit Committee drew up the Audit Committee’s Annual Report 2004 to be submitted to the Company’s Board of Directors, in the Meeting held on March 11, 2005, under the Chairmanship of Mr. Friedrich Fröschl and attended by all of its Members. Introduction The Audit Committee of the Board of Directors of Amadeus Global Travel Distribution, S.A. was set up on September 21, 2000, by virtue of a resolution adopted by the Board of Directors in a Meeting held on such date, within the framework of Corporate Governance´ practices and the recommendations of the Olivencia Code. The Committee's duties and operating regulations are set out in article 25 of the Company's By-laws and developed in the Regulations of the Board of Directors (Article 43 et seq.), current version of which was approved by the Board on June 20, 2003, following the Report by the Special Commission to Foster Transparency and Security in the Markets and Listed Companies, dated January 8, 2003 (the Aldama Report), registered with the Spanish Securities and Exchange Commission on July 4, 2003, with registration number 2003069515 and filed with the Commercial Registry on July 21, 2004.

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The full contents of the regulations are available on the Company’s website (www.amadeus.com) in the INVESTORS, CORPORATE GOVERNANCE section. Competence and duties of the Audit Committee

The basic duty of the Audit Committee is to support the Board of Directors in its supervisory tasks, by means of regular review of the process for drawing up the economic-financial information, its internal controls and the independence of the external Auditors. The Committee is obliged to report to the General Shareholders' Meeting on the issues that the shareholders may raise therein concerning the issues for which the Commission is competent, as well as to supervise the internal audit services. The Audit Committee is responsible for drawing up the proposal for a resolution by the Board of Directors on the appointment of the External Auditors of the Company, extending the term of office and dismissal thereof and on the terms and conditions of their contract. It is also responsible for receiving information on any issues that could jeopardize the independence of the external Auditors and any others related to the process of the development of the accounting audit, as well as any other notifications set forth in accounts audit law and the technical audit rules. In particular, the Audit Committee is responsible for studying, reporting and reviewing the following issues or questions:

a. Audit issues

- The financial statements regularly submitted to the Board of Directors Meeting. - The regular information submitted to the Securities Exchanges in which the securities

issued by the Company are traded. - The annual accounts and the Management Report submitted to the Board of

Directors Meeting to be drawn up pursuant to law. - The Accounts Audit Report, with special attention to that set forth in Article 210.2 of

the Spanish Corporations Law. - The replies of the management bodies of the Company to the recommendations

made by the Accounts Auditors regarding the audit of the financial year. - Specific investment transactions or of any other kind not included in the annual

budget, when the importance thereof makes it advisable. - The prospectus for issuing securities and, in general, any financial public information

of the Company. b. Control issues

- Knowledge of the financial information process and policies and internal control

policies and procedures of the Company regarding expenditure, investment, etc. - Codes of Conduct of the Senior Management staff of the Company. - Internal Code of Conduct for matters related to the Securities Markets. - Internal control systems, proposing, when appropriate, the relevant modifications. - Accounting practices and principles used to draw up the annual accounts of the

Company. - Supervision of the internal audit services.

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c. Fulfillment issues

- The policies and procedures implemented to ensure the due fulfillment of the Rules

in the different scopes of action of the Company and its subsidiaries and affiliates companies.

- Receive information and, when appropriate, issue a report on the disciplinary measures related to members of the senior executive team of the Company and its subsidiaries and affiliates companies.

- Inform the General Shareholders Meeting of the issues proposed by the shareholders within its competence.

- Drawing up an annual report on the activities of the Audit Committee to be included in the Management Report.

- Drawing up the required reports so that the Board may issue the Annual Corporate Governance Report.

Additionally, the Audit Committee studies any other matter that is submitted by the Board of Directors’ Meeting or by the Chairman. Members of the Audit Committee The Audit Committee is made up of four members, two of which must be independent directors. On December 31, 2004, the members were as follows:

Director Kind of Director Position Dr. Friedrich Fröschl External independent Chairman Mr. José Caparrós External independent Member Mr. Enrique Dupuy de Lôme External owner's representative Member Mr. Philippe Calavia External owner's representative Member

Appointments are made for two-year periods, although the Chairman, who must be an Independent Director, may hold the position for up to four years and may be reelected once one year has elapsed after he/she has left the position. The dates of appointment and respective expiry dates for each of the members of the Audit Committee are as follows:

Appointment Expiry Dr. Friedrich Fröschl 27 Sep 2002 27 Sep 2006 Mr. José Caparrós 14 Nov 2003 27 Sep 2006 Mr. Enrique Dupuy de Lôme 27 Sep 2002 27 Sep 2006 Mr. Philippe Calavia 27 Sep 2002 27 Sep 2006

The Board of Directors resolved, in the meeting held on September 20, 2004, to renew in their seat to all the members of the Committee for an additional two years term. The Audit Committee resolved, in the meeting held on December 3, 2004, to renew Dr. Fröschl´ appointment as Chairman of the Audit Committee for an additional two years term. When this two years term expires in December 2006, Dr. Fröschl will have completed the maximum period for which he can be appointed as Chairman of the Audit Committee.

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Operating procedures The Audit Committee meets regularly after being called by the Chairman. In order to do this, the Secretary of the Board draws up an Agenda for the approval of the Chairman of the Committee. This is sent to all the participating Members before the Meeting, together with the relevant documents for each of the items on the Agenda. The Committee held three Meetings in the financial year 2004: - March 18, 2004 - May 27, 2004 - December 3, 2004 As well as the Committee Members, the following executives of Amadeus’ Management team regularly attended the Meetings: - Mr. José Antonio Tazón, President and Chief Executive Officer (CEO) - Mr. Luis Maroto, Chief Financial Officer (CFO) - Mr. Agustín Rodríguez, Director of Internal Audit - Mr. Tomás López Fernebrand, Secretary of the Board of Directors, who acts as Secretary

of the Committee - Mr. Jacinto Esclapés, Vice-Secretary of the Board plus the external auditors, Deloitte, represented by the members responsible for auditing the Company’s annual accounts. The Committee Secretary draws up Minutes of the conclusions reached in each Meeting. These are included as an item on the Agenda for the next Board of Directors Meeting, in which the Chairman of the Committee informs the Board of the most relevant points covered and, when appropriate, the recommendations made. Matters dealt with by the Audit Committee in the financial year 2004 The Agenda for each of the Audit Committee Meetings has three regular sections and others that may be included in the Agenda for discussion, analysis and recommendations, as applicable, depending on the matter in question. The three regular sections are the External Audit, the Internal Audit and Corporate Governance. The main issues covered in the financial year 2004 are detailed below.

External Audit: In this section, the External Auditors inform the Audit Committee of the most relevant aspects of the work in progress on the audit and regular quarterly information, as well as important accounting aspects, including the application of accounting standards. Whenever there are any, they point out any discrepancies between the Company management and the Auditors regarding specific points. The matters dealt within the financial year 2004 included the following: - The Company's financial statements for the financial year 2003 (using Spanish

accounting principles and International Financial Reporting Standards) to be drawn up by the Board of Directors.

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- Reconciliation of the financial statements in line with Spanish Accounting Principles and International Financial Reporting Standards.

- The Auditors’ opinion. - Review of the quarterly results.

- Results of the impairment analysis. - Pre-closing of year-end 2004. - Significant acquisitions. - Cancellation provision analysis. - Status on tax credits for foreign acquisitions. - Accounting policies (derivatives accounting treatment). - Annual Foreign Exchange Treasury Plan. - Benchmark of annual dividends. - Application of International Financial Reporting Standards and analysis of the impact of

the Standards under review. - Group tax inspections in progress.

Internal Audit: In this section, the Director of Internal Audit reports to the Audit Committee on the status of the internal audits carried out on the Group Companies, as well as the status of the recommendations made by the Internal Auditor, and the extent to which they have been implemented and performed. The general scope of audits covers the suitability and effectiveness of the internal control systems (SECS), unless an audit has a more specific scope. For this purpose, the Director of Internal Audit presents the Audit Committee with an Audit Plan for that year. This serves as a basis to monitor the audits. The Director of Internal Audit regularly submits the results of the audits carried out on the Group Companies. Internal audits were issued on the following Group Companies in the financial year 2004: Company Scope - Amadeus Argentina, S.A. SECS - Sistemas de Reservaciones de Venezuela CA SECS - Amadeus Services Ltd. SECS - Amadeus sas (follow-up of implementation of

recommendations of prior audits). - Amadeus Central and West Africa SECS - Amadeus Global Travel Israel, Ltd SECS - Amadeus GTD y Amadeus Taiwan (specific analysis of financial flows). - Amadeus Germany GmbH Partial audit

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No material consequence arisen in the internal audits that required the intervention of the Audit Committee. Corporate Governance This section, which is a regular section in all of the Audit Committee Meetings, is the result of the efforts made regarding the transparency necessary in financial markets and the Company's and the Board's commitment to the shareholders, not only regarding the transparency of quantitative information (economic information), but also qualitative information and, more specifically, with regards to Corporate Governance practices in the companies.

The Secretary of the Board of Directors reports on the progress made in these areas in each of the Committee Meetings. In this regard, the Audit Committee has been informed on the creation of the new Corporate Web Page once adapted to the requirements established by the Spanish Stock Exchange Commission, as well as on the development of the Regulations of the General Shareholders Meeting and on the amendments to the By-Laws of the Company, following the new legal corporate governance environment.

As par of the Group Audit Plan for the year 2005, the Committee has requested the Internal Audit Department to review and report on the compliance by the Company with the Corporate Governance practices.

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BOARD OF DIRECTORS

Composition refers to the date of adoption of the Annual Accounts and Directors’ Report.

CHAIRMAN

Pierre-Henri Gourgeon

DIRECTORS

Manuel López-Colmenarejo Enrique Dupuy de Lôme

Karl-Ludwig Kley Philippe-Clément Calavia

Christian Boireau Bruno Matheu

Silvia Cairo José Caparrós Francis Lorentz

Friedrich Fröschl

SECRETARY (non Director)

Tomás López Fernebrand

VICE-SECRETARY (non Director)

Jacinto Esclapés Díaz

Madrid, March 29, 2005

FINANCIAL INFORMATION 2004 - Amadeus · - Auditor’s Report and Consolidated Financial Statements...

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