GRUPO FERROVIAL, S · Separate financial statements at 31 December 2013 Ferrovial, S.A. Ferrovial,...
Transcript of GRUPO FERROVIAL, S · Separate financial statements at 31 December 2013 Ferrovial, S.A. Ferrovial,...
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 1
a
Board of Directors 25 February 2014
2013 Separate Financial Statements
Ferrovial, S.A.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 2
BALANCE SHEETS AT 31 DECEMBER 2013 AND 2012 …………………………………………………………………………………….…3
INCOME STATEMENTS FOR 2013 AND 2012 …………………………………………………………………………………………………………5
STATEMENTS OF CHANGES IN EQUITY FOR 2013 AND 2012 ...................................................................................... 6
STATEMENTS OF CASH FLOWS FOR 2013 AND 2012 .................................................................................................. 7
1. COMPANY ACTIVITIES ......................................................................................................................................... 8
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS .................................................................................. 8
3. DISTRIBUTION OF PROFIT ................................................................................................................................... 9
4. ACCOUNTING POLICIES ....................................................................................................................................... 9
5. PROPERTY, PLANT AND EQUIPMENT ................................................................................................................... 13
6. OPERATING LEASES .......................................................................................................................................... 13
7. INVESTMENTS IN GROUP COMPANIES AND ASSOCIATES ..................................................................................... 13
8. DERIVATIVES .................................................................................................................................................... 16
9. CASH AND CASH EQUIVALENTS .......................................................................................................................... 18
10. BALANCES AND TRANSACTIONS WITH GROUP COMPANIES ................................................................................ 18
11. TRADE PAYABLES ............................................................................................................................................ 21
12. SHAREHOLDERS' EQUITY ................................................................................................................................. 22
13. PROVISIONS FOR CONTINGENCIES AND CHARGES ............................................................................................ 23
14. BANK BORROWINGS ........................................................................................................................................ 23
15. TAX MATTERS ................................................................................................................................................. 24
16. GUARANTEE COMMITMENTS TO THIRD PARTIES AND OTHER CONTINGENT LIABILITIES ..................................... 26
17. INCOME AND EXPENSES ................................................................................................................................... 27
18. EMPLOYEES……………………………………………………………………………………………………………………………………………………..…27
19. REMUNERATION OF THE BOARD OF DIRECTORS ............................................................................................... 28
20. SHARE-BASED PAYMENT .................................................................................................................................. 32
21. RELATED PARTY DISCLOSURES ........................................................................................................................ 33
22. DIRECTORS’ OWNERSHIP INTERESTS IN COMPANIES ENGAGING IN AN ACTIVITY THAT IS
IDENTICAL, SIMILAR OR COMPLEMENTARY TO THE COMPANY OBJECT OF FERROVIAL .............................................. 37
23. ENVIRONMENTAL POLICY ................................................................................................................................ 37
24. FEES PAID TO AUDITORS ................................................................................................................................. 38
25. EVENTS AFTER THE REPORTING PERIOD .......................................................................................................... 38
26. COMMENTS ON APPENDICES ............................................................................................................................ 38
27. EXPLANATION ADDED FOR TRANSLATION TO ENGLISH ..................................................................................... 39
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 3
(Thousands of euros)
2013 2012
NON-CURRENT ASSETS 6,690,602 7,192,870
Property, plant and equipment (Note 5) 65 64
Other fixtures, tools and furniture 30 23
Other items of property, plant and equipment 317 285
Accumulated depreciation -282 -244
Non-current investments in Group companies and associates (Note 7) 6,269,939 6,647,632
Equity instruments 6,258,758 6,636,926
Loans to Group companies (Note 10) 11,180 10,706
Non-current financial assets 1,852 477
Other loans 11 22
Long-term deposits and guarantees given 456 456
Derivatives (Note 8) 1,386 0
Deferred tax assets (Note 15) 418,747 544,697
CURRENT ASSETS 896,453 567,781
Inventories 2 103
Raw materials and other supplies 2 2
Finished goods 0 108
Write-downs 0 -7
Accounts receivable 152,124 35,397
Receivable from Group companies and associates (Note 10) 55,965 5,256
Other receivables 431 1,036
Employee receivables 110 93
Tax receivables 95,870 32,846
Allowances -253 -3,834
Current investments in Group companies and associates (Note 10) 37,646 169,966
Loans to Group companies 2,718 2,541
Other financial assets 34,928 167,424
Current financial assets 3,710 9,619
Derivatives (Note 8) 3,707 6,973
Other financial assets 0 2,643
Short-term deposits and guarantees given 3 3
Current prepayments and accrued income 1,176 1,251
Cash and cash equivalents (Note 9) 701,795 351,445
7,587,055 7,760,652
The accompanying Notes 1 to 27 and Appendix 1 are an integral part of the balance sheet at 31 December 2013.
TOTAL ASSETS
Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reportingframework applicable to the Company (see Notes 2 and 27). In the event of a discrepancy, the Spanish-language version prevails.
FERROVIAL, S.A.
BALANCE SHEETS AT 31 DECEMBER 2013 and 2012
A S S E T S
The accompanying Notes 1 to 27 and Appendix 1 are an integral part of the balance sheet at 31 December 2013.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 4
(Thousands of euros)
2013 2012
EQUITY 3,347,770 3,213,852
Shareholders' equity (Note 12) 3,347,770 3,216,679
Share capital 146,702 146,702
Share premium and merger premium 2,656,058 2,839,436
Reserves 360,449 224,696
Legal reserve 29,340 29,340
Other reserves 331,108 195,356
Profit for the year 477,965 739,354
Interim dividend paid during the year -293,404 -733,510
Valuation adjustments 0 -2,827
Hedges 0 -4,039
Other 0 1,212
NON-CURRENT LIABILITIES 1,319,228 1,623,911
Long-term provisions 115,875 126,793
Other provisions (Note 13) 115,875 126,793
Non-current payables 42,113 1,051,096
Bank borrowings (Note 14) 24,425 1,007,805
Derivatives (Note 8) 17,688 43,291
Non-current payables to Group companies and associates (Note 10) 1,028,703 280,699
Deferred tax liabilities (Note 15) 132,536 165,323
CURRENT LIABILITIES 2,920,057 2,922,889
Current payables 9,732 237
Bank borrowings (Note 14) 209 188
Derivatives (Note 8) 2,404 0
Other financial liabilities 7,120 49
Current payables to Group companies and associates (Note 10) 2,871,899 2,807,867
Trade and other payables 38,425 114,786
Trade payables (Note 11) 2,057 1,298
Payable to suppliers - Group companies and associates (Note 10) 1,736 13,666
Sundry accounts payable 112 234
Remuneration payable 14,089 14,642
Other accounts payable to public authorities (Note 3) 20,430 84,938
Customer advances 0 7
Current accruals and deferred income 1 0
7,587,055 7,760,652
The accompanying Notes 1 to 27 and Appendix 1 are an integral part of the balance sheet at 31 December 2013
E Q U I T Y A N D L I A B I L I T I E S
TOTAL EQUITY AND LIABILITIES
FERROVIAL, S.A.
BALANCE SHEETS AT 31 DECEMBER 2013 and 2012
Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting
framework applicable to the Company (see Notes 2 and 27). In the event of a discrepancy, the Spanish-language version prevails.
The accompanying Notes 1 to 27 and Appendix 1 are an integral part of the balance sheet at 31 December 2013.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
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FERROVIAL S.A.
INCOME STATEMENTS FOR 2013 and 2012
(Thousands of euros)
2013 2012
Revenue (Note 17) 518,238 817,445
Sales 160 0
Dividends received from subsidiaries 501,128 804,984
Other income received from subsidiaries 4,503 2,617
Services 12,447 9,844
Procurements 150 77
Cost of raw materials and other consumables used 149 77
Work performed by other companies 1 0
Staff costs (Note 18) 24,636 25,252
Wages, salaries and similar expenses 14,135 14,753
Employee benefit costs 651 585
Provisions 9,850 9,913
Other operating expenses 12,797 8,996
Outside services 12,673 10,736
Taxes other than income tax 99 -790
Other current operating expenses 25 -950
Depreciation and amortisation charge 80 40
Excessive provisions 0 447
Impairment and gains or losses on disposals of non-current assets 56 0
PROFIT FROM OPERATIONS 480,673 783,527
462,527
Finance income (Note 17) 21,842 16,532
From marketable securities and other financial instruments 21,842 16,532
Finance costs 91,190 129,314
On debts to Group companies and associates (Note 10) 44,236 53,171
On debts to third parties (Note 18) 46,955 76,143
Changes in fair value of financial instruments (Notes 8 and 17) 45,741 50,006
Exchange differences -647 -722
Impairment and gains or losses on disposals of financial instruments (Note 17) 29,635 -6,877
Impairment and other losses -10,785 -6,787
Gains or losses on disposals and other 40,420 -89
FINANCIAL RESULT (Note 17) 5,381 -70,376
167,458
PROFIT BEFORE TAX 486,053 713,151
Income tax (Note 15) -8,088 26,203
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS 477,965 739,354
Profit/Loss for the year from discontinued operations net of tax 0 0
PROFIT FOR THE YEAR 477,965 739,354
The accompanying Notes 1 to 27 and Appendix 1 are an integral part of the income statement for the year ended 31 December 2013.
CONTINUING OPERATIONS
DISCONTINUED OPERATIONS
The accompanying Notes 1 to 27 and Appendix 1 are an integral part of the statement of recognised income and expense for the year ended 31 December 2013.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
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STATEMENTS OF CHANGES IN EQUITY FOR 2013 AND 2012 A) STATEMENTS OF RECOGNISED INCOME AND EXPENSE FOR 2013 AND 2012
Thousands of euros 2013 2012
Total profit for the year per income statement 477,965 739,354
Income and expense recognised directly in equity 2,827 -3,218
Arising from cash flow hedges 4,039 -4,598
Tax effect -1,212 1,379
Transfers to profit or loss 0 391
Arising from cash flow hedges 0 559
Tax effect 0 -168
TOTAL RECOGNISED INCOME AND EXPENSE 480,792 736,527 The accompanying Notes 1 to 27 and Appendix 1 are an integral part of the statement of recognised income and expense for the year ended 31 December 2013.
B) STATEMENTS OF CHANGES IN TOTAL EQUITY FOR 2013 AND 2012
Thousands of euros Share capital
Share / merger
premiumReserves
Profit for the year
Interim dividend
Other equity instruments
Valuation adjustments
Total
Balance at 31/12/12 146,702 2,839,436 224,696 739,354 -733,510 0 -2,827 3,213,852
Total recognised income and expense 0 477,965 2,827 480,792
Transactions with shareholders 0 -183,378 -1,879 -739,354 440,106 0 0 -484,504
Distribution of profit 5,844 -739,354 733,510 0
Dividends paid -183,378 -293,404 -476,782
Other transactions with shareholders -7,723 0 -7,723
Other changes in equity 137,631 0 137,631
Balance at 31/12/13 146,702 2,656,058 360,449 447,965 -293,404 0 0 3,347,770
Thousands of euros Share capital
Share / merger
premiumReserves
Profit/Loss for the year
Interim dividend
Other equity instruments
Valuation adjustments
Total
Balance at 31/12/11 146,702 3,022,813 197,540 157,440 -146,702 4,253 0 3,382,046
Total recognised income and expense 0 739,354 -2,827 736,527
Transactions with shareholders 0 -183,378 22,904 -157,440 -586,808 0 0 -904,722
Distribution of profit 10,738 -157,440 146,702 0
Dividends paid -183,378 -733,510 -916,888
Other transactions with shareholders 12,166 12,166
Other changes in equity 4,253 -4,253 0
Balance at 31/12/12 146,702 2,839,436 224,696 739,354 -733,510 0 -2,827 3,213,852
2013
2012
The accompanying Notes 1 to 27 and Appendix 1 are an integral part of the statement of changes in total equity for the year ended 31 December 2013.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
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STATEMENTS OF CASH FLOWS FOR 2013 AND 2012
Balance at 31/12/13 Balance at 31/12/12
CASH FLOWS FROM OPERATING ACTIVITIES 404,820 689,356
Profit before tax 486,053 713,151
Adjustments for: -510,974 -734,568
Depreciation and amortisation charge/provisions 38 40
Other adjustments to profit (net) -511,012 -734,608
Changes in working capital -27,933 -4,254
Other cash flows from operating activities: 457,674 715,027
Interest paid -55,906 -88,332
Dividends received 501,128 804,984
Interest received 5,583 4,753
Income tax recovered (paid) 6,869 -6,378
Other amounts received/(paid) relating to operating activities 0
CASH FLOWS FROM INVESTING ACTIVITIES 515,659 -1,048
Payments due to investment: -604,033 -9,331
Group companies, associates and business units -594,594 -9,331
Property, plant and equipment, intangible assets and investment property -39
Other financial assets -9,401
Other assets
Proceeds from disposal: 1,119,692 8,283
Group companies, associates and business units 1,118,566 0
Property, plant and equipment, intangible assets and investment property
Other financial assets 1,126 8,283
Other assets
CASH FLOWS FROM FINANCING ACTIVITIES -569,482 -800,394
Proceeds and (payments) relating to equity instruments: -2,235 0
Proceeds from issue
Redemption
Purchase
Disposal -2,235
Grants, donations and legacies received
Proceeds and (payments) relating to financial liability instruments: -55,637 21,276
Change in financing accounts - Group companies 912,157 28,645
Repayment and redemption -967,794 -7,369
Dividends and returns on other equity instruments paid -511,610 -821,670
EFFECT OF FOREIGN EXCHANGE RATE CHANGES -647 -24,179
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 350,350 -136,266
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 351,445 487,711
CASH AND CASH EQUIVALENTS AT END OF YEAR 701,795 351,445
Thousands of euros
Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reportingframework applicable to the Company (see Notes 2 and 27). In the event of a discrepancy, the Spanish-language version prevails.
The accompanying Notes 1 to 27 and Appendix 1 are an integral part of the statement of cash flows for the year ended 31 December 2013.
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Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 2 and 27). In the event of a discrepancy, the Spanish-language version prevails.
1. COMPANY ACTIVITIES Ferrovial, S.A., formerly Cintra, Concesiones de Infraestructuras de Transportes, S.A., is the company that resulted from the merger of Cintra, Concesiones de Infraestructuras de Transportes, S.A. (the absorbing company) and Grupo Ferrovial, S.A. (the absorbed company). Its registered office is at Príncipe de Vergara 135, 28002 Madrid and its employer identification number is A81939209. The Company's object, per its bylaws, is the management and coordination of all the activities carried on by the companies composing the Group. The Company is the head of a group of subsidiaries called the Ferrovial Group and is obliged under current legislation to prepare consolidated financial statements separately. The consolidated financial statements of the Ferrovial Group for 2013 were formally prepared by the directors at the Board of Directors Meeting held on 25 February 2014. The consolidated financial statements for 2012 were approved by the shareholders at the Annual General Meeting of Ferrovial, S.A. on 22 March 2013, and were filed at the Madrid Mercantile Registry. The shares of Ferrovial, S.A. are traded on the Spanish Stock Market Interconnection System and are included in the IBEX-35 index. 2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS
2.1 Fair presentation and regulatory framework of reference
The accompanying financial statements, which were obtained from the Company's accounting records, are presented in accordance with
the regulatory financial reporting framework applicable to the Company and, accordingly, present fairly the Company's equity, financial
position, results of operations and cash flows for 2013. The regulatory framework consists of:
a. The Spanish Commercial Code and all other Spanish corporate law approved by Royal Decree 1514/2007.
b. The Spanish National Chart of Accounts and its industry adaptations.
c. The mandatory rules approved by the Spanish Accounting and Audit Institute in order to implement the Spanish National Chart
of Accounts and the relevant secondary legislation.
d. All other applicable Spanish accounting legislation. These financial statements will be submitted for approval by the shareholders at the Annual General Meeting, and it is considered that they will be approved without any changes. The Company is the majority shareholder of certain subsidiaries and has ownership interests equal to or exceeding 20% in the share capital of other companies. The financial statements do not reflect the increases or decreases in net assets that would arise from fully consolidating the majority ownership interests and from accounting for the other significant investments using the equity method. In addition, as the Parent of the Ferrovial Group, the Company prepares consolidated financial statements in accordance with International Financial Reporting Standards (EU-IFRSs).
The main aggregates in the IFRS consolidated financial statements are as follows: Equity 6,074 (Millions of euros) Net profit for the year attributable to the Parent 727 Interim Dividend 293 Total assets 22,820 Revenue 8,166 2.2 Key issues in relation to the measurement and estimation of uncertainty In the financial statements for 2013 estimates were made to measure certain of the assets, liabilities, income, expenses and obligations reported herein. These estimates relate basically to the following:
- The useful life of the property, plant and equipment and intangible assets (see Note 4). - The measurement of share options (see Note 20). - The impairment of financial assets (see Note 7). - The assessment of possible legal and tax contingencies (see Note 13). - The fair value of derivatives (see Note 8). - The recoverability of deferred tax assets and tax loss carryforwards (see Note 15).
Although these estimates were made on the basis of the best information available at 2013 year-end, events that take place in the future might make it necessary to change these estimates (upwards or downwards) in coming years. Changes in accounting estimates would be applied prospectively.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
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2.3 Comparative information The figures for 2012 are presented for comparison purposes. 3. DISTRIBUTION OF PROFIT The Board of Directors will propose to the shareholders at the Company’s duly convened Annual General Meeting that the profit of FERROVIAL, S.A. (individual company) be distributed as follows:
Profit of FERROVIAL, S.A. (individual company) (euros) 477,965,213.37
Distribution (euros)
To voluntary reserves (euros) 184,561,111.37
Interim dividend (euros) 293,404,102.00
The legal reserve has reached the legally required minimum. Liquidity statement and interim dividend: on 28 October 2013, the Board of Directors resolved to: - Prepare the following accounting statement supporting the Company’s liquidity, pursuant to Article 277 of the Spanish Limited Liability Companies Law, for subsequent inclusion in the notes to the Company's financial statements:
Liquidity summary
(thousands of euros at 30 September 2013)
Available cash (Corporate + FA + FS + Cintra) 626,153
Available credit Ferrovial, S.A. 772,000
Available credit Ferrovial Agromán, S.A. 8,000
Available credit Ferrovial Servicios, S.A. 10,000
Available credit Cintra Infraestructuras, S.A. 2,000
Total liquidity available for distribution 1,418,153
- Distribute, as an interim dividend for 2013, EUR 0.40 gross per share. The maximum amount payable in the form of this interim dividend is EUR 293,404,102. This amount does not exceed the individual profit of Ferrovial, S.A. obtained since the end of the last reporting period after deducting the items established in Article 277 of the Spanish Limited Liability Companies Law (EUR 316,432,502). This interim dividend was paid on 10 December 2013. The withholdings payable amounting to EUR 29 million were recognised at year-end under "Other Accounts Payable to Public Authorities" and were paid in January 2014. 4. ACCOUNTING POLICIES
The principal accounting policies used in preparing the financial statements were as follows: 4.1 Property, plant and equipment The assets included in “Plant, Property and Equipment” in the accompanying balance sheet are carried at acquisition or production cost, less the related accumulated depreciation and any accumulated impairment losses. The cost of these items was revalued pursuant to Royal Decree-Law 7/1996. The Company opted not to avail itself of the asset revaluation permitted by Law 16/2012. In-house work on property, plant and equipment is valued, for each investment, by adding the direct or indirect costs allocable to the investment to the cost of the materials used. Property, plant and equipment upkeep and maintenance expenses are recognised as an expense in the year in which they are incurred. In-house work on non-current assets is recognised at the actual cost incurred. The costs of expansion, modernisation or improvements leading to increased productivity or to a lengthening of the useful lives of the assets are capitalised. a. Impairment losses Assets that are amortised or depreciated are tested for impairment whenever an event or a change in circumstances indicates that their carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of an asset exceeds its recoverable amount, which is understood to be the higher of fair value less costs to sell and value in use. For the purpose of assessing impairment losses, assets are grouped at the lowest level for which there are separately identifiable cash flows (cash-generating units). Assets that have suffered an impairment loss are reviewed at the end of each reporting period in order to identify any
Separate financial statements at 31 December 2013 Ferrovial, S.A.
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possible reversal of the impairment loss. b. Depreciation of property, plant and equipment The Company depreciates its machinery, fixtures and tools by the diminishing balance method, and it depreciates all other property, plant and equipment items by the straight-line method, allocating the depreciable amount of the assets over their years of estimated useful life. The years of estimated useful life used for each class of property, plant and equipment are basically as follows:
Total years of estimated useful life
Machinery, fixtures and tools 5
Furniture 10
Transport equipment 5 4.2 Financial assets a. Equity investments in Group companies, jointly controlled entities and associates These investments are measured at cost less any accumulated impairment losses. However, where the Company holds an investment in the investee prior to its classification as a Group company, jointly controlled entity or associate, the cost of the investment is considered to be its carrying amount prior to its classification as such. Any previous valuation adjustments recognised directly in equity are retained in equity until the related investments are disposed of or are derecognised. If there is objective evidence that the carrying amount of an investment is not recoverable, an impairment loss is recognised for the difference between its carrying amount and its recoverable amount. Recoverable amount is the higher of fair value less costs to sell and the present value of the future cash flows from the investment. Unless there is better evidence of the recoverable amount, the impairment loss on these investments is estimated based on the value of the equity of the investee, adjusted by the amount of the unrealised gains existing at the date of measurement. Impairment losses and any reversals of impairment losses are recognised in the income statement for the year in which they arise. b. Held-to-maturity investments and accounts receivable Held-to-maturity investments, loans granted and receivables are initially recognised at fair value plus any attributable costs and are subsequently measured at amortised cost, and any accrued interest is recognised on the basis of the effective interest rate. The effective interest rate is the discount rate that exactly matches the carrying amount of a financial instrument to all its estimated cash flows of all kinds through its residual life. However, trade receivables maturing within twelve months are measured at face value, both at initial recognition and subsequently, provided that the effect of not discounting the cash flows is not material. At least at each reporting date, the necessary impairment losses are recognised if there is objective evidence that not all the amounts receivable will be collected. The amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows, discounted at the effective interest rate at the date of initial recognition. Impairment losses and any reversals of impairment losses are recognised in profit or loss. Financial assets are derecognised when the risks and rewards of ownership of the financial asset are substantially transferred. In the specific case of receivables, this is deemed to occur when the default and delinquency risks have been transferred. 4.3 Derivative financial instruments Derivative financial instruments are initially recognised at fair value on the date they are arranged. Subsequent changes in fair value are also recognised at each reporting date. The method used to recognise gains or losses on derivatives depends on whether the instrument has been designated as a hedging instrument and, as the case may be, on the type of hedge involved. In accordance with the rulings of the Spanish Accounting and Audit Institute (ICAC), an entity must evaluate credit risk when measuring its liabilities relating to derivatives. If prior to 2013 credit risk was not taken into consideration and the concomitant effect is material, the impact thereof must be calculated and an adjustment to reserves must be recognised. Ferrovial, S.A. arranges mainly cash flow hedges to hedge against the risk of fluctuations in cash flows resulting from changes in market interest rates or exchange rates. The ineffective portion of the gain or loss on the hedging instrument is recognised in profit or loss, whereas the effective portion is recognised directly in equity in the balance sheet. The amount deferred in equity is not recognised in the income statement until the gains or losses on the hedged transactions are recognised in profit or loss or until the transactions mature. That amount is recognised in the same line item as the gain or loss on the hedged item. Lastly, should the hedge become ineffective, the amount recognised in equity until then is taken to profit or loss proportionately over the term of the derivative arranged.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
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4.4 Inventories Raw materials and other supplies are recognised at acquisition cost. When the net realisable value of the inventories is lower than their acquisition cost, the appropriate write-downs are made and recognised as an expense in the income statement. If the circumstances causing the inventories to be written down cease to exist, the amount of the write-down is reversed and credited to the income statement. Goods received in payment of debts are recognised at the lower of the carrying amount of the debt thus offset and the realisable value of the goods. 4.5 Cash and cash equivalents Cash and cash equivalents include cash on hand, demand deposits at banks and other short-term, highly liquid investments with an initial maturity of three months or less. 4.6 Equity Ordinary shares are classified as share capital. Incremental costs directly attributable to the issue of new shares are deducted, net of taxes, from equity. Acquisitions of the Parent’s treasury shares are deducted from equity for the amount of the consideration paid, including the attributable costs associated with the acquisitions. When treasury shares are sold or reissued, any amount received is taken, net of costs, to equity. 4.7 Provisions and contingent liabilities The Company recognises a provision for a commitment or obligation to a third party that meets the following requirements: it is a present obligation (legal, contractual, constructive or implied), the settlement of which is expected to result in an outflow of resources the amount or timing of which are not known for certain but can be estimated sufficiently reliably. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. Where discounting is used, adjustments made to provisions are recognised as interest cost on an accrual basis. Provisions maturing within one year for which the effect of discounting is not material are not discounted. Contingent liabilities are possible obligations arising from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or more future events not wholly within the control of the Company. Contingent liabilities are not recognised, but rather are disclosed (see Note 16). 4.8 Financial liabilities Financial liabilities are initially recognised at fair value net of transaction costs and are subsequently measured at amortised cost using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash payments up to the maturity of the liability to the amount initially received. If the effective interest rate is initially considered to differ from the market interest rate, the liability is measured based on the present value of future cash flows at the market rate in the case of interest-bearing loans. Where no effective interest rate is specified, the cash flows are also measured using the market interest rate. 4.9 Income tax and deferred taxes The income tax expense recognised in the Company's financial statements is calculated on the basis of accounting profit, increased or decreased, as appropriate, by the effect of tax adjustments and by the temporary differences that arise between the tax bases of assets and liabilities and their carrying amounts in the financial statements (balance sheet liability method), which give rise to the recognition of deferred tax assets and liabilities. Deferred tax assets and liabilities are calculated at the tax rates in force at the balance sheet date and at the rates that are expected to be in force in the period in which the assets are realised or the liabilities are settled. They are charged or credited to the income statement, except when they relate to items that are recognised directly in equity, in which case they are charged or credited to equity. Deferred tax assets and tax loss carryforwards are recognised when it is probable that the Company will recover them in the future, regardless of when they will be recovered, provided this is within the maximum period provided by law. Deferred tax assets and liabilities are not discounted and are classified as a non-current asset or liability, respectively, in the balance sheet. Deferred taxes recognised are reviewed at the end of each reporting period and the appropriate adjustments are made to the extent that there are doubts as to their future recoverability. Also, unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that they will be recovered through future taxable profits.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 12
Deferred taxes are not recognised when the transaction has no effect on the accounting profit or loss or tax base of the related assets and liabilities. The difference between the income tax expense recognised at the previous year-end and the income tax expense reported in the final tax returns filed constitutes a change in accounting estimates and is recognised as current-year income or expense. Ferrovial, S.A. is the parent of a consolidated group for income tax purposes, which is regulated in Chapter VII of Title VII of Legislative Royal Decree 4/2004 (see Appendix in Note 27). 4.10 Translation of foreign currency transactions Transactions performed by the Company in a currency other than the functional currency, which is the euro, are translated by applying the exchange rates prevailing at the transaction date or at the year-end exchange rates in the case of balances outstanding at the date of preparation of the financial statements. The foreign currency gains or losses arising from the settlement of these transactions and from translation at the year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, unless they are deferred in equity, as is the case of cash flow hedges and hedges of a net investment in a foreign operation that qualify for hedge accounting. 4.11 Revenue recognition The Company's income relates to the dividends received from the investees which, on the basis of Ruling no. 2 published in Official Gazette no. 79/2009 of the Spanish Accounting and Audit Institute in relation to the accounting classification in separate financial statements of the income and expenses of holding companies, is treated as the Company's revenue as its ordinary activity consists of the ownership of interests in the share capital of Group companies. 4.12 Share-based payment
a. Share option plans: share option plans are measured at fair value when the options are initially granted using a financial method, based on an improved binomial model, taking into account the exercise price, volatility, option life, expected dividends, the risk-free interest rate and the assumptions made to incorporate the effects of expected early exercise. The initial fair value is not subsequently revised. This fair value is recognised under “Staff Costs” in proportion to the stipulated period of time during which the employee must remain at the Company, with a balancing entry in equity.
b. Equity-settled share-based payment transactions: these transactions are measured at the grant date at the market price
of the shares at that time, deducting therefrom the present value of expected dividends during the established vesting period. This fair value is recognised under “Staff Costs” in proportion to the stipulated period of time during which the employee must remain at the Company, with a balancing entry in equity.
4.13 Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases. The only significant lease held by the Company is an operating lease on the property where its head office is located (see Note 6). Expenses resulting from operating leases are charged to income in the year in which they are incurred. A payment made on entering into or acquiring a leasehold that is accounted for as an operating lease represents prepaid lease payments that are amortised over the lease term in accordance with the pattern of benefits provided. 4.14 Related party transactions The Company performs all its transactions with related parties on an arm's length basis. Also, the transfer prices are adequately supported and, therefore, the Company's directors consider that there are no material risks in this connection that might give rise to significant liabilities in the future.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 13
5. PROPERTY, PLANT AND EQUIPMENT
The changes in "Property, Plant and Equipment" in the years ended 31 December 2013 and 2012 and the most significant information affecting this heading were as follows:
(Thousands of euros) Balance at 31/12/12 Additions Disposals
Balance at 31/12/13
Investment
Other fixtures, tools and furniture 23 7 0 30
Other items of property, plant and equipment 285 32 0 317
Total investment in property, plant and equipment 308 39 0 347
Accumulated depreciation
Land and buildings 0 0 0 0
Plant and machinery 0 0 0 0
Other fixtures, tools and furniture -15 -2 0 -17
Other items of property, plant and equipment -229 -36 0 -265 Total accumulated depreciation of property, plant and equipment -244 -38 0 -282
Total property, plant and equipment 64 1 0 65
(Thousands of euros) Balance at 31/12/11 Additions Disposals
Balance at 31/12/12
Investment
Other fixtures, tools and furniture 23 0 0 23
Other items of property, plant and equipment 285 0 0 285
Total investment in property, plant and equipment 308 0 0 308
Accumulated depreciation
Land and buildings 0 0 0 0
Plant and machinery 0 0 0 0
Other fixtures, tools and furniture -13 -2 0 -15
Other items of property, plant and equipment -191 -38 0 -229 Total accumulated depreciation of property, plant and equipment -204 -40 0 -244
Total property, plant and equipment 103 -40 0 64
No investments have been made outside Spain and there are no assets subject to guarantees or that must be handed over to third parties or any grants related to non-current assets. No impairment losses were recognised or reversed in relation to any individual item of property, plant and equipment and no interest or exchange differences were capitalised in 2013. At 31 December 2013 and 2012, Ferrovial, S.A. had not recognised any fully depreciated items of property, plant and equipment. 6. OPERATING LEASES On 23 December 2009, Ferrovial, S.A. signed an agreement for the sale and operating lease of the property where its head office is located. In 2011 Ferrovial, S.A. transferred this agreement to Ferrovial Corporación, S.L. as a result of the spin-off performed in that year. As a result, Ferrovial, S.A. began to assume 15% of the annual rent established in the agreement. The current initial annual rent set in the agreement totals EUR 2,400 thousand and it is reviewed on a yearly basis on the basis of the change in the Consumer Price Index (CPI) in Spain. If the initial lease term is extended, the rent in force at that time must be updated in line with market rates. 7. INVESTMENTS IN GROUP COMPANIES AND ASSOCIATES Non-current financial assets make up most of the Company's assets, accounting for 83% of the total (2012: 86%). These non-current financial assets consist mainly of ownership interests in Group companies and associates. The detail of "Non-Current Investments in Group Companies and Associates" and of the changes therein in 2013 and 2012 is as follows:
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 14
(Thousands of euros) Balance at 31/12/12
Additions Disposals Transfers Balance at 31/12/13
Investments in Group companies 7,069,533 878,002 -1,227,461 0 6,720,074
Investments in associates 46,676 0 0 0 46,676
Loans to Group companies 10,706 475 0 0 11,180
Loans to associates 19,758 1,437 0 0 21,195
Allowances -499,041 -22,515 1,053 -8,683 -529,186
Investments in Group companies -432,607 -21,078 1,053 -8,683 -461,315
Investments in associates -46,676 0 0 0 -46,676
Loans to Group companies 0 0 0 0 0
Loans to associates -19,758 -1,437 0 0 -21,195
Total investments in Group companies and associates 6,647,632 857,398 -1,226,408 -8,683 6,269,939
(Thousands of euros) Balance at 31/12/11
Additions Disposals Transfers Balance at 31/12/12
Investments in Group companies 7,055,275 14,258 0 0 7,069,533
Investments in associates 46,676 0 0 0 46,676
Loans to Group companies 1,840 8,865 0 0 10,706
Loans to associates 18,419 1,339 0 0 19,758
Allowances -370,857 -4,414 1,231 -125,000 -499,041
Investments in Group companies -305,762 -3,075 1,231 -125,000 -432,607
Investments in associates -46,676 0 0 0 -46,676
Loans to Group companies 0 0 0 0 0
Loans to associates -18,419 -1,339 0 0 -19,758
Total investments in Group companies and associates 6,751,353 20,049 1,231 -125,000 6,647,632
The changes in 2013 were as follows: Additions The additions to "Investments in Group Companies" amount to EUR 878,002 thousand, corresponding to the following transactions recognised in the year: Firstly, on 19 April 2013 the Company formally executed the capital increase at Ferrofin, S.L. for EUR 577,898 thousand through
the issue of 557,171 thousand new shares of EUR 1 par value each with a share premium of EUR 20,747 thousand, i.e. a share premium of EUR 0.037 per share. All the new shares and the share premium were paid through a monetary contribution. The purpose of this capital increase was to provide Ferrofin, S.L. with sufficient funds with which to grant a loan to Ferrovial Servicios in order to acquire Enterprise, one of the leading UK service providers to utilities and the public sector.
Also, on 8 May 2013 the Company increased capital at Burety, S.L. by EUR 15,795 thousand through the issue of 527 thousand
new shares of EUR 3 par value each with a share premium of EUR 14,215 thousand, i.e. a share premium of EUR 26.98 per share. All the new shares and the share premium were paid through a monetary contribution. The purpose of this capital increase was to redress Burety, S.L.'s equity imbalance at the date of the transaction.
In 2013 there was an addition of EUR 141,704 thousand to the investment in Cintra Infraestructuras, S.A. as a result of the corporate restructuring of the Ferrovial Group in the US, the purpose of which is to bring together under a single parent all the business activities of Ferrovial in that country. The aforementioned restructuring was performed as follows: - Firstly, Ferrovial, S.A. received from Finecofer, S.L. -through the distribution of a share premium- the shares of Webber LLC and Ferrovial Agroman US Corp. for EUR 141,704 thousand, and the impact on reserves was recognised as detailed in Note 12. - Then, Ferrovial, S.A. transferred these shares to Cintra Infraestructuras through a non-monetary contribution of the same amount, thereby giving rise to an increase in the ownership interest in Cintra Infraestructuras equal to the aforementioned EUR 141,704 thousand.
Disposals The disposals under "Investments in Group Companies" amount to EUR 1,227,461 thousand, corresponding to the following transactions recognised in the year:
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 15
In 2013 Ferrovial, S.A. sold its 99% ownership interest in Ferrovial Aeropuertos, S.A. for EUR 209,579 thousand, based on the
underlying carrying amount of that company at December 2012 and, therefore, Ferrovial, S.A. derecognised its investment in Ferrovial Aeropuertos, S.A. for its historical cost value (EUR 171,319 thousand). The transaction gave rise to a gain amounting to EUR 38,260 thousand (see Note 17).
Also, Finecofer, S.L. distributed a share premium of EUR 1,040,000 thousand to Ferrovial, S.A. In accordance with Official Gazette no. 96/2013 of the ICAC this distribution led to a reduction of Ferrovial, S.A.'s investment in this company of EUR 887,256 thousand, and the remaining EUR 152,744 thousand were recognised as dividends in the income statement.
Similarly, under the same rule, Ferrovial Corporación, S.L. returned a share premium of EUR 21,707 thousand, which led to a
reduction in the ownership interest that Ferrovial, S.A. held in that company as there were no unrestricted reserves at the date of distribution of the aforementioned share premium.
As explained in the final paragraph on additions, Ferrovial, S.A. transferred the shares of Webber LLC and Ferrovial Agromán US Corp. for a total of EUR 141,704 thousand to Cintra Infraestructuras through a non-monetary contribution.
The net change in impairment losses (EUR -21,463 thousand) relates to the adjustment to the carrying amount of the investments in Group companies and associates (see Note 17). Also, the transfer of EUR -8,683 thousand corresponds to the reclassification of the provision for the investment in Burety, S.L. from long-term provisions for contingencies (see Note 13). A detail is included in Appendix I of all the subsidiaries and associates in which Ferrovial, S.A. holds direct ownership interests, indicating the related line of business, registered office and percentage of ownership. The following tables show a detail of the cost per books and the main components of the equity of the companies controlled by Ferrovial, S.A. at 31 December 2013 (in thousands of euros):
Thousands of euros
Companies - 2013 Gross
investment Impairment
losses Carrying amount
Share capital
Share premium
and reserves
Other equity items
Net profit/loss for the year
TOTAL EQUITY
Companies heading business lines Finecofer, S.L. 2,138,265 0 2,138,265 100,003 4,483,190 0 -20,130 4,563,063
Cintra Infraestructuras, S.A.U. 1,921,631 0 1,921,631 167,935 1,932,812 7,828 -46,378 2,062,197
Ferrovial Servicios, S.A. 578,482 0 578,482 573,042 103,995 0 77,004 754,041
Ferrovial Fisa, S.L. 214,633 -142,169 72,463 17,600 58,329 0 -1,851 74,078
Corporate companies
Betonial, S.A. 35,699 -3,750 31,949 3,660 28,512 0 70 32,242
Alkes Reinsurance Ltd. 3,000 0 3,000 3,000 3,021 0 525 6,546
Triconitex, S.L. 11,659 -5,478 6,181 806 6,621 0 -828 6,599
Ferrocorp UK Limited 630 0 630 630 95 24 24 773
Ferrovial Telecomunicaciones, S.A. 563 -493 70 100 -36 0 4 69
Ferrovial Inversiones, S.A. 200 0 200 600 75 0 26 701
Promotora Ibérica de Negocios, S.A. 582 -121 461 60 405 0 0 465
Fring Gold, S.A. 89 -17 72 62 12 0 -1 73
Remtecolex, S.A. 60 -3 57 60 -2 0 0 58
Ferrovial Emisiones, S.A. 60 0 60 60 -4 0 3,617 3,674
Burety, S.L. 24,701 -24,701 0 1,683 -1,494 0 -99 90
Inversiones Trenza, S.A. 7,094 -6,586 507 725 -213 0 0 512
Can-am, S.A. 3,208 -1,268 1,940 347 1,494 0 70 1,911
Ferrovial Corporación, S.AL. 5,403 0 5,403 5,403 161 0 10,537 16,101
Ferrofin, S.L. 1,480,612 0 1,480,612 1,890,310 68,835 -6,627 27,963 1,980,482
Other Group companies
Grimalinvest, B.V. 288,581 -274,638 13,943 20 13,320 0 7 13,347
Autovía de Aragón S.C., S.A. 2,831 0 2,831 18,873 -5,638 -9,864 4,755 8,126
Sotaverd 2,093 -2,092 0 1,784 -13,796 0 0 -12,012
Investments in Group companies 6,720,074 -461,315 6,258,759 2,786,763 6,679,694 -8,639 55,315 9,513,133
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 16
Thousands of euros
Companies - 2012 Gross
investment Impairment
losses Carrying amount
Share capital
Share premium and
reserves
Other equity items
Net profit/loss for the year
TOTAL EQUITY
Companies heading business lines Finecofer, S.L. 3,025,520 3,025,520 100,003 4,661,738 0 220,684 4,982,425
Cintra Infraestructuras, S.A.U. 1,781,870 1,781,870 153,764 1,657,105 -17,569 168,499 1,961,799
Ferrovial Servicios, S.A. 581,846 581,846 573,043 69,186 0 47,490 689,719
Ferrovial Aeropuertos, S.A. 170,713 170,713 166,414 36,157 0 6,681 209,252
Ferrovial Fisa, S.L. 215,406 -138,138 77,270 17,600 61,653 0 -2,275 76,978
Corporate companies 0 Betonial, S.A. 35,699 -3,848 31,851 3,660 28,080 0 432 32,172
Alkes Reinsurance Ltd. 3,000 3,000 3,000 2,951 0 70 6,021
Triconitex, S.L. 11,659 -4,233 7,426 806 7,284 0 -664 7,426
Ferrocorp UK Limited 630 630 630 75 41 20 766
Ferrovial Telecomunicaciones, S.A. 563 -499 64 64 0 0 0 64
Ferrovial Inversiones, S.A. 200 200 600 10 0 65 675
Promotora Ibérica de Negocios, S.A. 582 -121 461 60 400 0 5 465 Fring Gold, S.A. 89 -16 73 62 11 0 1 74 Remtecolex, S.A. 60 -2 58 58 0 0 1 59 Ferrovial Emisiones, S.A. 60 -3 56 56 0 0 0 56 Burety, S.L. 8,906 -223 8,683 102 36 0 -15,749 -15,611 Inversiones Trenza, S.A. 7,094 -6,582 511 511 0 0 1 512 Can-am, S.A. 3,208 -1,367 1,841 347 1,482 0 12 1,841
Ferrovial Corporación, S.AL. 27,110 27,110 5,403 21,698 0 16,640 43,741
Ferrofin, S.L. 902,714 902,714 1,333,159 31,150 0 16,938 1,381,247
Other Group companies 0 Grimalinvest, B.V. 288,581 -274,638 13,943 20 12,922 0 398 13,340 Autovía de Aragón S.C., S.A. 1,931 -845 1,086 5,711 0 -15,178 1,531 -7,936 Sotaverd 2092 -2092 0 1784 -13796 0 0 -12,012
Investments in Group companies 7,069,533 -432,607 6,636,926 2,366,857 6,578,145 -32,705 460,779 9,373,076
See the detail of investments in associates (Note 26). The listed Group companies are Ferrovial, S.A. and Budimex, S.A. and the detail of the market value thereof is as follows:
Quoted market price (euros) Budimex, S.A. Ferrovial, S.A.
At end of year 17.14 14.07
Last-quarter average 14.82 13.74
The market price shown in the table above is expressed in euros per share. In the case of Budimex, S.A., the market price was translated to euros using the exchange rate at 31 December 2013 both for the market price at the end of the year and for the average price in the last quarter. 8. DERIVATIVES The detail of the derivatives and their fair values at 31 December 2013 and 2012, as well as the maturities of the notional amounts to which the derivatives are tied and the related cash flows are shown below. The notional amounts shown in this table include all those arranged at 31 December 2013. Accordingly, the maturities are presented with a positive sign and the future increases the amount of which has already been arranged are shown with a negative sign.
Type of instrument
Balance at 31/12/13
Balance at 31/12/12
31/12/14 31/12/15 31/12/16 31/12/17
31/12/18 and
subsequent
years
TOTAL
Equity swaps -16,059 -29,276 128,925 43,101 152,200 0 0 324,225
Interest rate swaps -204 -14,015 0 250,000 0 0 0 250,000
Currency forwards 1,263 6,973 443,638 0 0 0 0 443,638
Total hedges -14,999 -36,317 572,563 293,101 152,200 0 0 1,017,864
Fair value Maturities of notional amounts
The cash flows relating to the derivatives mature as follows:
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 17
Type of instrument
Balance at 31/12/12
Balance at 31/12/11
31/12/14 31/12/15 31/12/16 31/12/17
31/12/18 and
subsequent
years
TOTAL
Equity swaps -16,059 -29,276 -16,685 -8,873 9,499 0 0 -16,059
Interest rate swaps -204 -14,015 -1,417 353 -456 -213 1,530 -204
Currency forwards 1,263 6,973 1,263 0 0 0 0 1,263
Total hedges -14,999 -36,317 -16,838 -8,520 9,043 -213 1,530 -14,999
Fair value Maturities of cash flows
Following is an explanation of the changes in fair value of the hedges between 2013 and 2012 and of the effects of such changes on the balance sheet and income statement for 2012 (in thousands of euros).
Type of instrument
Balance at 31/12/13
Balance at 31/12/12
ChangeImpact on reserves
Impact on profit of loss
of change in
fair value
Impact on financial
resultCash
Other impacts on
balance
sheet or
income
statement
TOTAL
Equity swaps -16,059 -29,276 13,218 0 49,749 10,518 -1,455 -45,594 13,218
Interest rate swaps -204 -14,015 13,811 4,039 576 -194 9,401 -10 13,811
Currency forwards 1,263 6,973 -5,710 0 -4,584 0 -1,126 0 -5,710
Total hedges -14,999 -36,317 21,318 4,039 45,741 10,324 6,819 -45,605 21,318
Fair value Breakdown of the change
Equity swaps In order to hedge against the possible losses resulting from the exercise of the share-based payment schemes granted to its employees, Ferrovial arranged equity swaps. The swaps function as follows: The calculation base is a given number of Ferrovial shares and a reference price which is usually the share price on the arrangement date of the swap. During the term of the swap, Ferrovial pays interest equal to a given interest rate (EURIBOR plus a spread to be applied to the result of multiplying the number of shares by the strike price) and receives dividends on the shares. When the swap expires, if the share price has risen, Ferrovial receives the difference between the share price and the reference price. If the share price falls, Ferrovial would pay the aforementioned difference to the bank.
These equity swaps do not qualify for hedge accounting and the related gains or losses are recognised as fair value adjustments under “Financial Result”. The change in value in 2013 was due to the increase in the Ferrovial share price from EUR 11.20 at 31 December 2012 to EUR 14.07 at 31 December 2013, which gave rise to income of EUR 49,749 thousand (net result of EUR 34,824 thousand). In 2013 the agreement concerning the distribution of the costs of the equity swaps between Ferrovial, S.A. and the subsidiaries that head its business divisions was amended. Under the aforementioned agreement, Ferrovial, S.A. recognised a liability for all the equity swaps arranged and an account receivable for the portion thereof corresponding to the companies heading the business lines, whereas previously only the liability for the amount relating to its own employees was recognised. The EUR 45,605 thousand increase in the liability arising from the change in accounting method is recognised under “Other Impacts on Balance Sheet or Income Statement”. At 2013 year-end, these derivatives had a notional amount equivalent to 21,902 thousand shares, which, based on the strike price of the equity swaps (the price at which they have to be settled with the banks) amounted to EUR 324,225 thousand. Interest rate swaps It should be noted that the main change in the year ended 31 December 2012 was the cancellation of the IRSs with a notional of EUR 300 million that hedged the Ferrovial Group's corporate debt, which was repaid substantially in full in 2013 and replaced with two bond issues of EUR 500,000 thousand each in January and May 2013. As described in Note 14, these issues were carried out by the Group company Ferrovial Emisiones, S.A., an intercompany loan having been formally arranged by the latter and Ferrovial, S.A. Also, in relation to these bonds, Ferrovial, S.A. arranged new interest rate derivatives for a notional amount of EUR 250,000 thousand, expiring in 2015. These derivatives do not qualify for hedge accounting and, therefore, they are recognised directly in the income statement as a fair value adjustment. In addition to the aforementioned derivatives, the bond issuer, Ferrovial Emisiones, S.A., also arranged derivatives for an additional notional amount of EUR 250,000 thousand, expiring in 2021. The aforementioned interest rate swaps had a fair value of EUR -204 thousand at 31 December 2013 (31 December 2010: EUR -14,015 thousand) and a notional amount of EUR 250,000 thousand. The accrual of ordinary settlements of the IRSs gave rise to a finance cost on financing of EUR 194 thousand. Also, payments relating to ordinary and extraordinary cash settlements (EUR 9,401 thousand) were made. The latter related to the cancellation of the aforementioned derivatives.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 18
In 2013 IFRS 13, Fair Value Measurement began to be applied. This standard requires the credit risk of the parties to the related agreement be taken into account in the measurement of derivatives. The impact of credit risk will be recognised in profit or loss, except when the derivatives qualify as effective hedges, in which case they will be recognised in reserves. The impact of the first-time application of this standard on the accompanying financial statements, given the speculative nature of the IRSs, amounts to EUR 17 thousand on the financial result (impact on net result: EUR 12 thousand). Currency forwards At 2013 year-end there were various EUR/GBP (notional of EUR 226 million) and EUR/USD (notional of EUR 218 million) currency forwards with an asset position of EUR 1,263 thousand expiring at short term. These forward contracts are intended to hedge exposure to foreign currency risk on future cash flows from subsidiaries and do not qualify for hedge accounting in the financial statements of the individual company. However, the EUR/GBP derivatives in the Group's consolidated financial statements do qualify for hedge accounting, and any changes in the value thereof are recognised directly in equity. 9. CASH AND CASH EQUIVALENTS The detail of "Cash and Cash Equivalents" in 2013 and 2012 is as follows:
Thousands of euros
Balance at 31/12/13
Balance at 31/12/12
Cash 243,412 82,458 Cash equivalents 290,046 130,249 Short-term guarantees and deposits given 168,337 138,739 TOTAL 701,795 351,445
"Cash" relates mainly to demand deposits at various banks. "Cash Equivalents" relates to term deposits maturing in less than three months. The short-term guarantees and deposits given relate to restricted accounts the availability of which is limited to meeting certain obligations relating to the repayment of the principal and payment of interest on borrowings. 10. BALANCES AND TRANSACTIONS WITH GROUP COMPANIES The detail of the changes of the balance held by Ferrovial, S.A. in 2013 with respect to 2012 is as follows:
Thousands of euros Long-term
loans Short-term
loans Current
receivables Non-current
payables Current
payables
Current payables to
Group company suppliers
TOTAL GROUP COMPANIES at 31/12/12
10,706 169,966 5,256 280,699 2,807,867 13,666
TOTAL GROUP COMPANIES at
31/12/13 11,180 37,646 55,965 1,028,703 2,871,899 1,736
TOTAL CHANGE 474 -132,320 50,709 748,004 64,032 -11,930
As regards non-current payables, the change relates mainly to the balances of Ferrovial, S.A. payable to Ferrovial Emisiones, S.A. EUR (992,072 thousand at long term and EUR 26,690 thousand at short term) arising from the transfer the latter made of the funds obtained from the issuance of two corporate bonds, which were used by Ferrovial, S.A. to repay the syndicated debt (see Note 14). This debt between Group companies has the same conditions as the bonds themselves, which bear an annual coupon of 3.375% payable annually with nominal amounts of EUR 500,000 thousand maturing in 2018 and EUR 500,000 thousand maturing in 2021. The detail of the balances with Group companies at 31 December 2013 and 2012 is as follows:
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 19
Balances with Group companies at 31 December 2013
Thousands of euros 2013
Group companies 31/12/13 Long-term
loans Short-term
loans Current
receivables Non-current
payables Current
payables
Current payables to
Group company suppliers
Autovía de Aragón, S.A. 2,034 542 366 1,829
Heathrow Airport Holdings, Ltd. 229
Hellas Tolls, S.A. 382
Betonial, S.A. 27,832
Budimex, S.A. 24 1,993
Burety, S.L. 47
Cadagua, S.A. 42
Can-Am, S.A.U. 1,205
Cespa, S.A. 65
Cespa Gestión de Residuos, S.A. 7 -67
Ecoparc Can Mata, S.L.U. 158
Cintra Infraestructuras, S.A. 12,476 93,719 3,722
Ferrocorp UK Limited 8 145
Ferrovial Aeropuertos, S.A. 4,213 46,631
Ferrovial Agromán, S.A. 19,823 957,802 -67
Ferrofin, S.L. 1,280,808
Ferrovial Emisiones, S.A. 992,072 26,690
Ferrovial FISA, S.L. 35 1,953 36,631
Ferrovial Inversiones, S.A. 958
Ferrovial Servicios, S.A. 14,850 112,682
Ferrovial Telecomunicaciones, S.A. 56
Hubco Netherlands B.V. 12 17
Autopista del Sol, C.E.S.A. 9,126 186
Remtecolex, S.A. 58
Fring Gold, S.A. 72
Finecofer, S.L. 307,074
Grimalinvest, S.L. 40,927
Promotora Ibérica, S.A. 465
Nea Odos, S.A. 20,487 24
Amey UK plc 49
Central Greece Motorway 704
Laertida, S.L. -71
407 International Inc -53
Cintra US Corp. 31
Eurolink Motorway Operation, Ltd. -1,986
Triconitex, S.L. 481
Inversiones Trenza, S.A. 512
Cintra Servicios, S.L. 138
Ferrovial Corporación, S.L. 6,410 1,698 66
Allowances for doubtful debts -21,195 0 0 0 0
TOTAL GROUP COMPANIES 11,180 37,646 55,965 1,028,703 2,871,899 1,736
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 20
Balances with Group companies at 31 December 2012
Thousands of euros 2012
Group companies 31/12/12 Long-term
loans Short-term
loans Current
receivables Non-current
payables Current
payables
Current payables to
Group company suppliers
Autovía de Aragón, S.A. 1,840 542 115 3,070
Heathrow Airport Holdings, Ltd. 1,178 229
Betonial, S.A. 32,159
Budimex, S.A. 1,991
Burety, S.L. 15,538
Cadagua, S.A.
Can-Am, S.A.U. 1,137
Cespa, S.A. 9
Cintra Infraestructuras, S.A. 105,168 918
Ferrocorp UK Limited 3 145
Ferrovial Aeropuertos, S.A. 6,289 33,010 1,436
Ferrovial Agromán, S.A. 1,357,479 6,427
Ferrofin, S.L. 243,193 682,048
Ferrovial Emisiones, S.A. 57
Ferrovial FISA, S.L. 37,506 634
Ferrovial Inversiones 895
Ferrovial Servicios, S.A. 38,440 4,653
Ferrovial Telecomunicaciones, S.A. 57
Hubco Netherlands B.V. 2,085 426
Autopista del Sol, C.E.S.A. 8,865 9
Remtecolex, S.A. 58
Fring Gold, S.A. 74
Finecofer, S.L. 653,465
Grimalinvest, S.L. 41,061
Promotora Ibérica, S.A. 467
Nea Odos, S.A. 19,106 3,520
Central Greece Motorway 652 443
Triconitex, S.L. 159
Ferrovial Corporación, S.L. 1830 0 -982
Inversiones Trenza, S.A. 512
Allowances for doubtful debts -19,758 0 0 0 0 0
TOTAL GROUP COMPANIES 10,706 169,966 5,256 280,699 2,807,867 13,666
Transactions with Group companies in 2013
Thousands of euros
Group companies Operating
income Operating expenses
Finance costs
Autovía de Aragón, S.A. 194 8
Hellas Tolls, S.A. 3,043
Betonial, S.A.
90
Autopista del Sol, C.E.S.A. 444
Burety, S.L. 202
Ferrovial Emisiones, S.A. 7 26,464
Cintra Infraestructuras, S.A. 2,277 128
Cespa, S.A. 7
Ferrovial Aeropuertos, S.A.
2,215 1,044
Ferrovial Agromán, S.A. 2,775 2,640
Ferrofin, S.L.
11,347
Ferrovial FISA, S.L. 832 1,112
Ferrovial Servicios, S.A.
3,596 25
Autopista Terrasa-Manresa 291
Finecofer, S.L.
481,050 1,061
Central Greece Motorway 533
Nea Odos, S.A.
2,738
Ferrovial Corporación, S.L. 17,593 568
Cintra Inversora Autopistas de Cataluña, S.A. 194
Cintra Servicios, S.L. 190 1,881
Budimex, S.A.
27
Grimaldi Investments B.V. 115
Other Group companies 72 31 8
TOTAL GROUP COMPANIES 518,078 2,488 44,236
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 21
Transactions with Group companies in 2012
Thousands of euros
Group companies Operating
income Operating expenses
Finance costs
Autovía de Aragón, S.A. 179
48
Betonial, S.A.
439
Autopista del Sol, C.E.S.A. 206
Burety, S.L.
52
Cintra Infraestructuras, S.A. 401,453 3,293
Cespa, S.A. 7 0
Ferrovial Aeropuertos, S.A.
1,488 -31 972
Ferrovial Agromán, S.A. 2,398 21,488
Ferrofin, S.L.
31,684 17,072
Ferrovial FISA, S.L. 826 882
Ferrovial Servicios, S.A.
223,123 3 2,088
Finecofer, S.L. 153,610 5,924
Central Greece Motorway 91
Nea Odos, S.A. 2,129
Ferrovial Corporación, S.L. 151 632 242
Cintra Servicios, S.L. 922
Grimaldi Investments B.V. 637
Other Group companies 107 28
TOTAL GROUP COMPANIES 817,445 1,702 53,171
In all cases the fair values of the loans and receivables are considered to be the same as the carrying amounts thereof. The long-term loans relate to long-term loans earning interest at rates similar to market rates.
The current payables to and receivables from Group companies constitute the main component of the Company's current assets and current liabilities. These balances bore interest at between 3.24% and 3.75% in 2013. Of the total operating income, EUR 501,128 thousand relate to dividends received from subsidiaries: mainly EUR 480,495 thousand from Finecofer, EUR 17,590 thousand from Ferrovial Corporación, S.L. and EUR 3,043 thousand from Hellas Tolls, S.A. 11. TRADE PAYABLES The outstanding trade payables at 2013 year-end totalled EUR 2,057 thousand (2012: EUR 1,298 thousand). The table below presents the disclosures on the payment periods to suppliers as provided for in the ICAC Resolution of 29 December 2010 implementing the disclosure obligation provided for in Additional Provision Three of Law 15/2010, of 5 July, on measures to combat late payment in commercial transactions.
Millions of euros Millions of euros
Paid in the maximum payment period 8,933 8,886
Remainder 185 220
TOTAL 9,118 9,106
% paid in the maximum payment period 98.0% 97.6%
% remainder 2.0% 2.4%
Weighted average period of late payment 95 73
Amount deferred 54 0
“Weighted Average Period of Late Payment” is considered to be the amount calculated as the quotient whose numerator is the result of multiplying the payments made to suppliers outside the maximum payment period by the number of days of late payment and whose denominator is the total amount of the payments made in the year outside the maximum payment period. "Remainder" includes the payments that exceed the maximum payment period permitted by the Law. “Payments Not Made in the Maximum Payment Period” includes the balance payable to suppliers past due by more than the maximum payment period at 31 December 2013.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 22
12. SHAREHOLDERS’ EQUITY
The detail of the main impacts net of taxes that affected the changes in equity in 2013 and 2012 is as follows:
Thousands of euros 2013 2012
Balance at 31/12/12 3,213,852 3,382,046
Profit for the year 477,965 739,354
Income and expenses recognised in equity 2,827 -3,218
Impact on reserves of hedging instruments 2,827 -3,218
Transfers to profit or loss 0 391
Arising from hedging instruments 0 391
Total recognised income and expense 480,792 736,527
Dividends paid -476,782 -916,888
Other transactions with shareholders -7,723 12,166
Transactions with shareholders -484,504 -904,722
Other changes 137,631 0
Balance at 31/12/13 3,347,770 3,213,852
Equity increased by EUR 133,918 thousand in 2013. The main impacts relate to:
- Profit for the year of EUR 477,965 thousand. - Hedging instruments: includes the impact of the IRSs that were hedges of corporate debt, which were cancelled in 2013 (see
Note 8). - Dividends: includes the distribution of the dividend approved by the shareholders at the General Meeting in March 2013
amounting to EUR 0.25 per share (EUR 183,378 thousand). Also, in October the distribution of an interim dividend of EUR 0.40 per share out of 2013 profit was approved, totalling EUR 293,404 thousand.
- Other transactions with shareholders: reflects mainly the impact of the delivery of performance shares to executive personnel. - Other changes: the main impact relates to the Group's restructuring of its US businesses amounting to EUR 141,704 thousand,
as described below in 12-f on Other reserves.
The main equity items are: a. Share capital At 31 December 2013, the share capital of Ferrovial, S.A. was represented by 733,510,255 fully subscribed and paid shares of EUR 0.20 par value each. At 31 December 2013, the only shareholder holding more than 10% of the share capital of Ferrovial, S.A. was Portman Baela, S.L., with an ownership interest of 41.053%. The shares of the Parent are traded on the Spanish Stock Market Interconnection System (SIBE) and the Spanish Stock Exchanges and they all carry the same voting and dividend rights. b. Share premium and merger premium At 31 December 2013, the Company's share premium amounted to EUR 1,202,174 thousand, and the merger premium, which arose as a result of the merger of Grupo Ferrovial, S.A. with Cintra in 2009, totalled EUR 1,453,885 thousand. Both line items are considered to be unrestricted reserves. In 2013 the shareholders at the Annual General Meeting held on 22 March 2013 resolved to distribute a dividend of EUR 0.25 per share totalling EUR 183,378 thousand with a charge to the merger premium. c. Legal reserve Under the Consolidated Spanish Limited Liability Companies Law, 10% of net profit for each year must be transferred to the legal reserve until the balance of this reserve reaches at least 20% of the share capital. The legal reserve can be used to increase capital provided that the remaining reserve balance does not fall below 10% of the increased share capital amount. At 31 December 2013, the legal reserve had reached the level stipulated in the previous paragraph.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 23
Otherwise, until the legal reserve exceeds 20% of share capital, it can only be used to offset losses, provided that sufficient other reserves are not available for this purpose. d. Treasury shares There were no treasury shares at 31 December 2013. In 2013 a total of 1,214,247 shares were acquired, representing 0.2% of the share capital and a total nominal value of EUR 243 thousand, which were acquired and subsequently delivered in implementing of the share-based payment schemes. The total cost of acquisition of these shares was EUR 16,149 thousand and the shares were delivered at a value of EUR 12,965 thousand, thereby reducing the Company's equity by EUR 3,184 thousand. e. Profit for the year EUR 5,844 thousand of the profit for 2012 were appropriated to voluntary reserves and the remainder (EUR 733,510 thousand) was used to pay the interim dividend approved by the shareholders at the 2011 Annual General Meeting. f. Other reserves In 2013 there was an increase of EUR 135,752 thousand in "Other Reserves" in the Company's balance sheet, due primarily to the following impacts:
- Distribution of 2012 profit amounting to EUR 5,844 thousand as discussed above. - Impact of the executive share-based payment schemes of EUR -7,723 thousand in 2013. - Positive impact on reserves of the distribution of the share premium by Finecofer, through the delivery of the shares of
Webber LLC and Ferrovial Agroman U.S. Corp, amounting to EUR 141,704 thousand. This transaction -discussed in Note 7- was a result of the corporate restructuring of the Ferrovial Group in the US, the purpose of which is to bring together under a single parent all the business activities of Ferrovial in that country. Since this share premium distribution takes the form of a contribution of a business, pursuant to Ruling 10 of Official Gazette no. 85 of the ICAC, the income generated by the distribution must be recognised in a reserve account. This second phase of the restructuring transaction is also described in Note 7.
The transactions forming part of the aforementioned restructuring process were completed for legal purposes on 16 February 2013. However, since at the beginning of the aforementioned process the most recent consolidated carrying amounts available were those recognised at 31 March 2013, these were used as a reference value for the shares and also for the purposes of accounting for the transaction pursuant to Measurement Standard 21 of the Spanish National Chart of Accounts. 13. PROVISIONS FOR CONTINGENCIES AND CHARGES
The changes in 2013 were as follows:
Balance at 31/12/12
Additions Reversals Transfers Balance at 31/12/13
Provisions for contingencies and charges 126,793 0 -2,235 -8,683 115,875
Total 126,793 0 -2,235 -8,683 115,875
"Provisions for Contingencies and Charges" includes EUR 116 million relating to a tax provision for assessments issued by the Spanish tax authorities in relation to VAT for 2006-2010 (EUR 16 million) and income tax for 2006 (EUR 100 million). The transfer in 2013 relates to the provision amounting to EUR 8,683 thousand for to the investment in Burety, S.L. which was reclassified as an impairment loss on financial assets (see Note 7). 14. BANK BORROWINGS The detail of Ferrovial, S.A.'s bank borrowings at 31 December 2013 and 2012 is as follows:
(thousands of euros)
2013 2012
Bank borrowings
24,634 1,005,495
Obligations under finance leases
0 2,498
Non-current bank borrowings 24,634 1,007,993
In 2013 bank borrowings decreased significantly due to the partial repayment of the syndicated loan that Ferrovial had in 2012. Specifically, the amount repaid was EUR 993 million with a balance of only EUR 25 million outstanding at 31 December 2013.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 24
The funds used for the repayment arose from the intra-Group loan (see Note 10) received from the subsidiary Ferrovial Emisiones, S.A., which in 2013 issued bonds amounting to EUR 1,000 million. The financial obligations applicable to the outstanding balance of the syndicated loan remain unchanged and the fulfilment thereof must be evidenced every six months. Specifically: i. The Group’s Net Financial Debt/EBITDA ratio must not exceed certain pre-established levels. ii. The Group’s EBITDA/Net Finance Costs ratio must not fall below certain pre-established levels. For the purposes of achieving the above-mentioned ratios, the Group is deemed to include the consolidated Group companies excluding infrastructure projects and other companies (mainly Amey, Budimex, Webber and BNI). The Parent was achieving both ratios at 31 December 2013. The non-current obligations under finance leases amounting to EUR 2,498 thousand were transferred to Ferrovial Corporación, S.L. in 2013 as a result of the latter becoming the lessee under the related arrangements. Information on maturities:
Financial debt (millions of euros) Currency Fair
value 2013
Carrying amount
2013 2014 2015
Total maturities
Corporate debt EUR 24 24 0 28 28
Total 24 24 0 28 28
The differences between the total maturities of bank borrowings and the carrying amounts of the debt at 31 December 2013 are explained mainly by the difference between the nominal values and carrying amounts of the debts, as certain adjustments are made in accordance with applicable accounting legislation (basically accrued interest payable and the application of the amortised cost method). The fair value of the bank borrowings coincides with the related carrying amount because the borrowings are tied to a floating market interest rate and, therefore, changes in the benchmark interest rates do not affect their fair value. Information on credit limits and drawable credit At 31 December Ferrovial, S.A. had a credit limit of EUR 673 million, of which EUR 645 million relates to drawable credit. This includes the renewal of the working capital line for EUR 541 million, which continues to be undrawn and matures in 2015, and a bilateral loan of EUR 100 million, which is undrawn and matures in September 2014. Corporate rating
The financial rating agencies Standard & Poor's and Fitch issued their opinion on the credit rating of Ferrovial at December 2013, which were BBB and BBB-, respectively, and which, therefore, were in the category of “investment grade”. 15. TAX MATTERS
Ferrovial, S.A. has filed consolidated tax returns since 2002. The companies composing the consolidated tax group together with Ferrovial, S.A. in 2013 are shown in Appendix I. 15.1 Reconciliation of the accounting profit to the tax loss The reconciliation of the accounting profit to the tax loss for income tax purposes is as follows:
Thousands of euros Increase Decrease Total Increase Decrease Total
Profit before tax 486,053 713,151
Permanent differences: 21,078 (502,087) (481,008) 4,790 (805,290) (800,500)
Temporary differences:
Arising in the year 6,015 (107,566) (101,551) 11,641 (42,189) (30,548)
Arising in prior years 0 0 0 0 0 0
Tax loss (96,506) (117,897)
2013 2012
The negative permanent differences relate mainly to the tax effect of the elimination on tax consolidation of the intra-Group dividends amounting to EUR 498,085 thousand, whereas the temporary differences relate mainly to reversals of accounting provisions that were
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 25
not deductible for tax purposes and eliminations of gains relating to sales of companies in the consolidated tax group, of particular note being the gain on the sale of Ferrovial Aeropuertos, S.A. amounting to EUR 40,419 thousand (see Note 17). 15.2 Explanation of the effective tax rate and the difference between deferred and current taxes Set forth below is the reconciliation of the total income tax benefit or expense to the profit before tax for 2013 and 2012.
2013 2012
Tax rate 30% 30%
Profit before tax 486,053 713,151
Permanent differences (481,008) (800,500)
Taxable profit/(tax loss) 5,045 (87,349)
Tax charge at 30% 1,514 (26,205)
Adjustment of prior years' income tax and other adjustments 6,575 2
Total tax expense (benefit) 8,088 (26,203)
Thousands of euros
Ferrovial, S.A. recognised an income tax expense of EUR 8,088 thousand in its income statement, equal to 30% of the profit generated in the year, adjusted for the permanent differences, which relate mainly to intra-Group dividends of consolidated companies (EUR 498,085 thousand). The breakdown of the accrued tax for 2013 and 2012, differentiating between current tax and deferred tax is as follows:
2013 2012
Income tax expense (benefit) for the year 1,514 (26,205)
Current tax expense (59,699) (22,959)
Deferred tax expense (benefit) 61,213 (3,246)
Adjustment of prior years' income tax and other adjustments 6,575 2
Total tax expense (benefit) 8,088 (26,203)
Thousands of euros
The deferred tax expense relates mainly to the change in the deferred taxes corresponding to provisions not deductible for tax purposes. 15.3 Changes in deferred taxes
The changes in deferred taxes in 2013 were as follows:
Thousands of euros
2013Assets Liabilities
Balance at 01/01/13 0 0
Adjustment of 2012 tax and other (16,894) 0
Generation 23,849 (44,378)
Reversal (132,906) 11,592
Balance at 31/12/13 418,747 132,536 The main deferred tax assets relate to the following: a) Tax loss carryforwards amounting to EUR 259,137 thousand. A model has been created in order to analyse the recoverability of the tax assets of the Ferrovial consolidated tax group in Spain and to be able to compare them with those that have been recognised for accounting purposes. This model takes into account the changes in Spanish tax legislation announced in recent months and the future projections have been updated. Based on this model, all the tax loss carryforwards and tax credits will be recovered before they expire and, accordingly, they have been retained in the balance sheet. The Company considers it probable that taxable profit will be obtained with which to offset the aforementioned tax losses in a term not exceeding that envisaged in tax legislation, with the maximum limit of ten years from year-end, pursuant to Ruling no. 10 of the Official Gazette 80/2009 of the ICAC . b) Provisions recognised for accounting purposes that are not deductible for tax purposes amounting to EUR 142,745 thousand recognised mainly for financial assets, doubtful loans to Group companies and equity swaps.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 26
c) Tax credits not yet used by the Company amounting to EUR 12,023 thousand. The main deferred tax liabilities relate to the following: a) The results of transactions between companies in the consolidated tax group which were eliminated, amounting to EUR 132,247 thousand. b) Differences between the tax bases and carrying amounts of equity investments and impairment losses totalling EUR 288 thousand. The changes in the deferred taxes in 2012 were as follows:
2012 Assets Liabilities
Balance at 01/01/12 482,172 236,990
Adjustment of 2011 tax and other 59,280 (71,667)
Generation 15,902 0
Reversal (12,657) 0
Balance at 31/12/12 544,697 165,323
Thousands of euros
15.4 Years open for review by the tax authorities The criteria that the tax the authorities may adopt in relation to the years open for review may give rise to contingent tax liabilities that cannot be objectively quantified. The main tax audits in progress currently affect the following consolidated tax group companies: Ferrovial, S.A. (Grupo Ferrovial, S.A.), Ferrovial Servicios, S.A. and Ferroser Servicios Auxiliares, S.A. (audit of income tax 2007 to 2011; VAT December 2009 to 2011; personal income tax withholdings (employees and professionals) December 2009 to 2011; tax withholdings from income from movable capital December 2009 to 2011; and non-resident income tax withholdings December 2009 to 2011).
16. GUARANTEE COMMITMENTS TO THIRD PARTIES AND OTHER CONTINGENT LIABILITIES Transactions between Group companies The Company's contingent liabilities include most notably the guarantees provided by the Company for certain Group companies. In this regard, at 2013 year-end Ferrovial, S.A. had provided guarantees amounting to EUR 2,079,916 thousand (2012: EUR 1,521,409 thousand). The guarantees include most notably those granted to customers of other Group companies belonging to the construction division (either provided to them directly or through insurance companies) amounting to EUR 1,023,750 thousand (2012: EUR 1,415,794 thousand) and the guarantee provided by Ferrovial, S.A. (jointly with other Group companies) to Ferrovial Emisiones in relation to the corporate bond issue amounting to EUR 1,000,000 thousand. In relation with this transaction, Ferrovial has already recognised an intercompany loan from Ferrovial Emisiones S.A., since the funds raised by Ferrovial Emisiones in the issue were loaned to Ferrovial, S.A. in order for it to repay its bank borrowings (see Note 10). In addition to the above, at 2013 year-end the Company had provided guarantees granted by banks amounting to EUR 351,540 thousand (2012: EUR 248,438 thousand) through its guarantee lines, relating mainly in this case also to coverage of the aforementioned normal liability of construction companies in contracts awarded to various Group companies. Litigation The Company is also involved as the defendant in various lawsuits. The Parent's directors consider that the possible effect of the aforementioned lawsuits on the accompanying financial statements would in no case be material. As indicated in Note 13, Ferrovial, S.A. is involved in various tax claims for which it has recognised a provision of EUR 116 million. These claims arose mainly from assessments issued by the Spanish tax authorities largely in relation to income tax and VAT for 2006 to 2012. Security interests At 31 December 2013, no significant in security interests had been given.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 27
17. INCOME AND EXPENSES
As Ferrovial, S.A. is a holding company, the dividends received from the subsidiaries and the finance income associated with the financing provided to them form part of the Company's revenue. Accordingly, in 2013 revenue of EUR 518,238 thousand was generated, of which EUR 501,128 thousand relate to dividends received by Ferrovial S.A. from its subsidiaries (see Note 10).
The amount of the other income received from subsidiaries (EUR 4,503 thousand) relates mainly to the interest earned on the loans granted to Group companies. The other operating income (EUR 12,447 thousand) relates to sales and services rendered to Group companies and associates (see Note 10).
The grant by Ferrovial, S.A. of loans to Group companies constitutes non-core operations, which are not performed for a commercial purpose, but rather are effected with a view to obtaining returns on the capital invested, do not involve the use of resources exclusively earmarked for carrying them out and also entail a scantly significant use, in terms of both goods and services from third parties and human and material resources of the Company which are used to provide services to its subsidiaries.
Finance income amounted to EUR 21,842 thousand and included mainly the income relating to the dividends received from the equity swaps arranged to hedge the effect on equity of the share option plans (see Notes 8 and 20) totalling EUR 14,570 thousand. It also includes EUR 1,565 thousand relating to the interest earned on the financial investments held by the Company (see Note 7), and income of EUR 6,414 thousand arising from the provision of guarantees for Group companies.
Finance costs amounted to EUR 91,190 thousand, the detail being as follows:
Interest borne on borrowings received from various Group companies amounting to EUR 44,236 thousand (31 December 2012: EUR 53,171 thousand).
Borrowing costs on corporate debt and the financial effect of the measurement thereof at amortised cost, amounting to EUR 25,981 thousand (see Note 14 on, "Financial Liabilities"). This amount includes the impact of repaying EUR 16,295 thousand of the syndicated loan.
Late-payment interest arising from tax assessments from prior years amounting to EUR 4,848 thousand (see Note 13). Of the remaining amount (EUR 16,126 thousand), EUR 7,238 thousand relate mainly to the expenses related to guarantees,
sometimes provided in relation to projects in which the Company has an indirect interest and which are charged to the companies performing the projects as mentioned above, while EUR 4,035 thousand relate to the financial interest on the equity swaps (see Notes 8 and 20).
The fair value adjustments to financial instruments resulted in income in the year of EUR 45,741 thousand. They include the gain relating to the change in value of the equity swaps arranged in relation to the remuneration schemes explained in Note 20 (EUR 49,749 thousand), and the impact of the associated costs and a loss of EUR 4,533 thousand associated with the foreign currency derivatives and EUR 526 thousand corresponding to interest rate derivatives (see Note 8).
The exchange losses amounted to EUR 647 thousand and relate mainly to the current financial assets arranged in foreign currency (short-term deposits and Eurodeposits, see Note 9), which were offset by the foreign currency derivatives hedging the fair value thereof (see Note 8).
"Impairment and Gains or Losses on Disposals of Financial Instruments" includes the provision recognised in relation to the equity deficits of certain Group companies (EUR -21,463 thousand), reversals of allowances for doubtful debts (EUR 10,678 thousand) and EUR 40,419 thousand corresponding principally to the gains on sales of shares of Ferrovial Aeropuertos.
18. EMPLOYEES
The headcount at 31 December 2013 and 2012 was as follows:
Men Women Total Men Women Total
Executives 16 0 16 17 0 17
University and further education college graduates 13 15 28 11 13 24
Clerical staff 3 9 12 3 11 14
Manual workers and unqualified technicians 1 0 1 1 0 1
Total 33 24 57 32 24 56
FERROVIAL, S.A. FERROVIAL, S.A.
31/12/13 31/12/12
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 28
19. REMUNERATION OF THE BOARD OF DIRECTORS 19.1.- Bylaw-stipulated directors’ remuneration The table below shows the itemised bylaw-stipulated emoluments of the members of the Board of Directors earned in 2013 and 2012. This table does not include the remuneration received by the executive directors for the discharge of their executive functions at the Company, which is detailed in Note 19.2.
(Amounts in thousands of euros)
2013 2012
DIRECTOR (a) Fixed
remuneration Attendance
fees Remainder Total
Fixed remuneration
(a)
Attendance fees
Remainder Total
Rafael del Pino y Calvo-Sotelo 35.0 85.8 110.2 231.0 35.0 86.0 105.0 226.0
Santiago Bergareche Busquet 35.0 47.9 96.4 179.3 35.0 48.5 91.9 175.4
Joaquín Ayuso García 35.0 42.9 68.9 146.8 35.0 43.0 65.6 143.6
Iñigo Meirás Amusco 35.0 42.9 55.1 133.0 35.0 43.0 52.5 130.5
Jaime Carvajal Urquijo 35.0 47.3 55.1 137.4 35.0 47.5 52.5 135.0
Portman Baela, S.L. 35.0 45.1 55.1 135.2 35.0 45.0 52.5 132.5
Juan Arena de la Mora 35.0 64.9 55.1 155.0 35.0 62.5 52.5 150.0
Gabriele Burgio 35.0 58.3 55.1 148.4 35.0 55.0 52.5 142.5
María del Pino y Calvo-Sotelo 35.0 39.6 55.1 129.7 35.0 40.0 52.5 127.5
Santiago Fernández Valbuena 35.0 45.1 55.1 135.2 35.0 41.0 52.5 128.5
José Fernando Sánchez-Junco Mans 35.0 42.9 55.1 133.0 35.0 40.0 52.5 127.5
Karlovy, S.L. 35.0 36.3 55.1 126.4 35.0 33.0 52.5 120.5
TOTAL 420.0 599.0 771.4 1,790.4 420.0 584.5 735.0 1,739.5
(a) Period in office. Full year, unless otherwise stated.
Under the Company’s current remuneration scheme, regulated by Article 57 of its bylaws, the shareholders at the General Meeting determine the total annual remuneration for all the members of the Board of Directors. The shareholders at the Company's General Meeting held on 22 October 20091 set the annual remuneration for the Board of Directors as a whole at EUR 1,772.7 thousand, based on the number of Board members at the date of approval (thirteen). As per the resolutions of that same General Meeting, if the number of Board members were to increase or decrease, the overall annual amount is to be adjusted accordingly based on the period of Board membership of the incoming or outgoing members. The shareholders at the General Meeting also decided that, for financial years after 2009, this amount would be automatically revised in line with the changes in the Consumer Price Index. In accordance with these resolutions2 the overall annual amount for 2013 was set at EUR 1,790.2 thousand for the twelve members of the Board of Directors. Pursuant to Article 57 of the bylaws, each year the Board of Directors must distribute among its members the overall annual amount set by the General Meeting, comprising the following items:
(i) A fixed emolument, set at a gross annual amount of EUR 420 thousand for the twelve members of the Board of Directors at the end of 2013. This total did not change with respect to 2012. (ii) Fees for actual attendance at meetings of the Board of Directors and its committees or advisory bodies. Attendance fees for 2013 totalled EUR 599.0 thousand. The amounts per meeting increased by 10% in 2013 and are now set at: Board of Directors: EUR 3,300/meeting; Executive Committee: EUR 2,200/meeting; Audit and Control Committee: EUR 2,200/meeting; Nomination and Remuneration Committee: EUR 1,700/meeting. The amount of the attendance fees earned by the chairman of each of these bodies is twice the sum indicated. (iii) And the lower of the following amounts: (a) the amount remaining, after deducting the preceding two items, to reach the
1 Under the name of Cintra Concesiones de Infraestructuras de Transporte, S.A. 2 The year-on-year increase in the Consumer Price Index (CPI) in December 2012 was 2.9%, the percentage that was applied to the automatic revision of the remuneration of the Board of Directors.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 29
overall total amount determined by the shareholders at the General Meeting; and (b) a sum equal to 0.5% of the consolidated profit for the year attributable to the Company. For 2013, since the figure of 0.5% of consolidated profit for the year attributable to the Company was higher, the remainder described in letter (a), i.e., the gross sum of EUR 771.2 thousand is to be distributed. The resulting amount is distributed by dividing it into 14, and the following factors are applied to the quotient in allocating the individual amounts: Chairman of the Board: *2; First Deputy-Chairman: *1.75; Second Deputy-Chairman: *1.25 and the other Board members: *1.
Pursuant to the resolutions of the Board of Directors, the amount earned for this third item must be invested in shares of the Company. The acquisition of shares, in a single transaction, shall take place at the first trading session following the deadline set by the Spanish National Securities Market Commission (CNMV) to send the periodic financial information once the Annual General Meeting approving the financial statements for the year has been held. The shares acquired can only be divested by the interested party once three full years have elapsed after the year of acquisition.
With regard to 2013, the Board of Directors of Ferrovial, S.A. intends to prepare and make available to shareholders the “Annual Report on Directors' Remuneration” referred to in Article 61 ter. of the Spanish Securities Market Law. This report will include a description of matters relating to the Company's remuneration policy for 2013, the policy planned for future years, an overview of how the remuneration policy was applied in 2013 and a detail of the individual remuneration earned by each of the directors in 2013. 19.2.- Individual remuneration of the Executive Directors a) Remuneration earned in 2013 and 2012 The two executive directors in 2013 and the three executive directors in 2012 earned the following remuneration for discharging their functions, in addition to the remuneration discussed in the preceding section. (Amounts in thousands of euros) 2013
REMUNERATION OF EXECUTIVE DIRECTORS
Fixed remuneration
Variable remuneration
Attendance of Board meetings
of other subsidiaries
Exercise of share options
Life insurance premiums
Share plans (1)
Total 2013
Rafael del Pino y Calvo-Sotelo
1,175.00 2,063.00 0 0 5.01 1,875.00 5,118.01
Joaquín Ayuso García 0 0 37.77 413.38 0 625.00 1,076.15
Iñigo Meirás Amusco 970.00 1,854.00 0 118.65 3.14 1,875.00 4,820.79
TOTAL 2,145.00 3,917.00 37.77 532.03 8.15 4,375.00 11,014.95
(1) In March 2013, since the agreed conditions had been complied with in full, a number of shares equivalent to the units allocated in 2010
were delivered, after the relevant withholdings had been made. The CNMV was notified thereof on 12/03/13.
(Amounts in thousands of euros) 2012
REMUNERATION OF EXECUTIVE
DIRECTORS
Fixed
remuneration
Variable
remuneration
Attendance of board meetings
of other subsidiaries
Exercise of share
options
Life insurance
premiums
Share
plans
Total
2012
Rafael del Pino y Calvo-Sotelo
1,150.00 1,970.00 0 318.61 4.67 0 3,443.28
Joaquín Ayuso García (2) 900 848.02 46.87 318.2 5.65 0 2,118.74
Iñigo Meirás Amusco 950 1,770 0 127.44 2.97 0 2,850.41
TOTAL 3,000.00 4,588.02 46.87 764.25 13.29 0 8,412.43
(2) As compensation for the loss of the position of senior executive at the Company and the concomitant annulment of the senior executive relationship, EUR 8,100 thousand gross were paid to Joaquín Ayuso in 2012 (an amount subject in full to personal income tax). Joaquín Ayuso ceased to discharge his executive functions on 29 November 2012.
b) Share-based payment schemes The detail of the outstanding share option plans and performance-related share award plans for executive directors at 31 December 2013 is as follows:
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 30
SHARE OPTION PLANS EXECUTIVE DIRECTORS Situation at 31/12/13
Share options No. of
equivalent shares
Exercise price (euros)
% of share capital
Rafael del Pino y Calvo-Sotelo 2006 Plan 786,400 786,400 15.94 0.107
2008 Plan 1,179,600 1,179,600 11.69 0.161
Joaquín Ayuso García (1) 2006 Plan 786,400 786,400 15.94 0.107
2008 Plan 929,600 929,600 11.69 0.132
Íñigo Meirás Amusco 2006 Plan 400,000 400,000 15.94 0.055
2008 Plan 590,000 590,000 11.69 0.08
(1) J. Ayuso retains entitlement to these plans, which were granted to him when he was an executive director.
As indicated in Note 20-a, the exercise prices of the these plans were revised for the reasons described therein. Specifically, this
adjustment led to exercise price reductions of EUR 0.54 for the 2006 plan and EUR 0.43 for the 2008 plan, resulting in exercise prices of
EUR 15.94 for the 2006 plan and EUR 11.69 for the 2008 plan. The premiums charged to the beneficiaries were EUR 0.5 for the 2006
plan and EUR 0.495 for the 2008 plan.
PERFORMANCE-RELATED SHARE AWARD PLAN EXECUTIVE DIRECTORS Situation at 31/12/13
Units No. of voting rights
% of voting power
Rafael del Pino y Calvo-Sotelo
2011 allocation 132,000 132,000 0.018%
2012 allocation 122,000 122,000 0.017%
2013 allocation 104,650 104,650 0.014%
Íñigo Meirás Amusco
2011 allocation 132,000 132,000 0.018%
2012 allocation 122,000 122,000 0.017%
2013 allocation 104,650 104,650 0.014%
The general characteristics of the two plans are detailed in Note 20-a on "Share-based payment". 19.3. Remuneration of the members of the Board of Directors due to membership of other managing bodies of Group companies or associates The executive and non-executive directors of Ferrovial, S.A. who are in turn members of the managing bodies of other Group companies or associates received EUR 37.7 thousand in this connection in 2013 (EUR 46.9 thousand in 2012). 19.4.- Pension funds and plans or life insurance premiums As in 2012, no contributions were made in 2013 to pension plans or funds for former or current members of the Company’s Board of Directors. No such obligations were incurred during the year. As regards life insurance premiums, the Company has insurance policies covering death (for which premiums totalling EUR 8.15 thousand were paid in 2013; EUR 13.3 thousand in 2012), of which the executive directors are beneficiaries. No contributions were made and no obligations were incurred in respect of pension funds or plans for the directors of Ferrovial, S.A. who are members of other boards of directors and/or senior executives of Group companies or associates. No life insurance premiums were paid in this regard. The situation has not changed since 2012. 19.5.- Advances and loans At 31 December 2013, no advances or loans had been granted by the Company to the directors in their capacity as such or as members of other boards of directors and/or as senior executives of Group companies or associates. 19.6.- Remuneration of senior executives The joint remuneration earned by the Company’s senior executives in 2013 was as follows:
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 31
REMUNERATION OF SENIOR EXECUTIVES (thousands of euros)
2013 2012
Fixed remuneration 4,403.8 4,431.7
Variable remuneration 5,165.0 5,348.6
Performance-based share award plan 6,712.5 0
Exercise of share options and/or other financial instruments (see description)
1,388.7 1,386.8
Remuneration as members of managing bodies of other Group companies, jointly controlled entities or associates
25.0 24.5
Contributions to pension funds or plans, or related obligations [-] [-]
Insurance premiums 16.8 19.7
TOTAL 17,711.8 11,211.3
The aforementioned remuneration corresponds to the following posts: General Secretary, Chief Financial Officer, General Director of HR, General Director of Construction, General Director of Real Estate, General Director of Services, General Director of Airports, General Director of Toll Roads, General Director of Information Systems and Innovation, Director of Internal Audit, Director of Communications and Corporate Responsibility and Director of Corporate Strategy. This does not include remuneration for senior executives who were also executive directors, which was addressed previously. The Company has also introduced a flexible remuneration system called the Flexibility Plan, which provides employees with the possibility of voluntarily modifying their remuneration package based on their personal needs, replacing a portion of their remuneration with the award of certain payments in kind. These products include a group life and retirement-related savings insurance plan. Participants may request that a portion of their gross annual remuneration be paid by the Company in the form of a premium for a group life and retirement-related savings insurance policy. In this connection, the senior executives requested contributions of EUR 215.0 thousand from the Company, instead of the equivalent remuneration shown in the foregoing table (2012: EUR 301.5 thousand). 19.7.- Relationship between remuneration obtained and profit/loss of the Company In keeping with the best practices for director and senior executive remuneration, a portion of Ferrovial, S.A. directors' remuneration is linked to the consolidated profit for the year attributable to the Company. Similarly, the variable remuneration of the executive directors and senior executives of the Company is linked to various profit and profitability metrics at both corporate and business area level. The variable remuneration scheme of Ferrovial, S.A. is therefore linked closely to the Company's performance metrics. Since the consolidated profit attributable to the Company in 2013 amounted to EUR 727.2 million, the members of the Board of Directors were paid remuneration of EUR 771.2 thousand in respect of the remainder of their annual emoluments. Having achieved the objectives for profit and profitability established at the beginning of 2013, the members of the Board of Directors who perform executive duties received total aggregate variable remuneration of EUR 3,917 thousand. 19.8.- Other disclosures on remuneration The agreements between the Company and senior executives, including one executive director, specifically provide for the right to receive the indemnities referred to in Article 56 of the Workers’ Statute in the event of unjustified dismissal. In order to encourage loyalty and long-service, a deferred remuneration scheme was recognised for ten senior executives, including one executive director. The scheme consists of extraordinary remuneration that will only be paid when one of the following circumstances occurs:
- Removal of the senior executive by mutual agreement upon reaching a certain age.
- Unjustified dismissal or termination by the Company at its discretion without any justification for dismissal, prior to the senior executive reaching the age initially agreed upon, if the amount of this remuneration exceeds that resulting from applying the Workers' Statute.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 32
- The death or disability of the senior executive.
To cover this incentive, each year the Company makes contributions to a group savings insurance policy, of which the Company is both policy-holder and beneficiary. These contributions are quantified on the basis of a certain percentage of the total monetary remuneration of each senior executive. The contributions made in 2013 amounted to EUR 1,883.5 thousand (2012: EUR 2,580.6 thousand), of which EUR 437.8 thousand correspond to executive directors. Individuals are occasionally hired to hold executive positions, mainly abroad, in areas unrelated to senior management. The contracts of these individuals include certain clauses that provide for indemnities in the event of unjustified dismissal. The contracts entered into with two senior executives stipulate additional rights in their favour, including prior-notice obligations incumbent upon the Company in the event of unjustified dismissal. 20. SHARE-BASED PAYMENT Ferrovial, S.A.'s share-based payment plans awarded to executives of all the companies of the Group headed by Ferrovial are awarded directly by Ferrovial, S.A. Therefore, the information below relates to all the payment plans of Group company executives. However, there is a distribution agreement whereby Ferrovial, S.A. passes on the impact of these plans to the income statement and cash of the various subsidiaries. In this regard, in 2013 Ferrovial, S.A. recognised an expense for the aforementioned plans of EUR 6,340 thousand, having passed on EUR 11,553 thousand to the various Group subsidiaries in this connection. a) Share option plans
Until 2008 Ferrovial used a remuneration system based on the delivery of share options. The share option plans outstanding at 31
December 2013 were as follows:
Participants Approval date Exercise deadline
Exercise price
Outstanding options (2013)
Executives 05 - Ferrovial (additional) 01/08/06 31/07/14 EUR 14.89 160,000
Executives 05 - Ferrovial (additional) 30/10/06 29/10/14 EUR 16.02 115,200
Executives 05 - Ferrovial (additional) 25/01/07 24/01/15 EUR 17.59 73,600
Executives 05 - Ferrovial (additional) 03/07/07 02/07/15 EUR 17.74 14,400
Executives 05 - Cintra (additional) 25/07/07 24/07/15 EUR 10.65 39,582
Senior executives 06 - Ferrovial 04/05/06 03/05/14 EUR 15.94 2,908,800
Senior executives 06 - Ferrovial (additional) 03/07/07 02/07/15 EUR 17.74 228,000
Executives 07 - Ferrovial 23/11/07 22/11/15 EUR 14.35 5,004,600
Executives 07 - Cintra 23/11/07 22/11/15 EUR 10.35 364,262
Senior executives 08 - Ferrovial 26/04/08 25/04/16 EUR 11.69 4,958,200
Number of shares at end of year 13,866,644
These share option plans include the plans described above in Note 19 on remuneration of executive directors and senior executives. In 2013 changes were made to the exercise price of these options (which were notified to the CNMV on 25/02/13). This adjustment was in response to the change in value of the outstanding options, since the dividends effectively distributed were ultimately higher than those considered on the grant date for the calculation of the premium to be paid by the executives. The impact of this change on the income statement for 2013 was an expense amounting to EUR 2.6 million. All the share option plans include a three-year vesting period as from the grant date followed by a five-year exercise period, provided that certain minimum returns on consolidated equity or certain ratios of returns on productive assets are achieved. The detail of the changes in the Company's share option plans in 2013 and 2012 is as follows:
2013 2012
Number of options at beginning of year 20,021,771 25,533,963 Plans granted 0 0 Options not taken up and other -840,436 -490,800 Plans expired -4,076,960 0 Options exercised -1,237,731 -5,021,392
Number of options at end of year 13,866,644 20,021,771
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 33
Since the aforementioned plans are in the exercise period, they do not give rise to staff costs on a regular basis. However, in 2013 cost adjustments were recognised amounting to EUR -1 million due to the reversal of staff costs incurred in prior years for options that were surrendered by the beneficiaries (EUR -1 million in 2012). b) Performance-based share award plan
In 2009 the Company decided to implement a remuneration system based on the performance-related award of shares. Thus, on 17 December 2009 the Company decided to use as a remuneration system a three-year plan consisting of the award of shares of Ferrovial, S.A. The total number of shares granted annually under the plan may not exceed 2,420,000, representing 0.33% of Ferrovial, S.A.'s share capital. The plan consists of the allocation to beneficiaries of a number of units that will serve as a basis in order to determine the final number of shares that they will be able to receive as a result of their participation in the plan. Delivery is conditional upon at least three years’ service at the Company (barring special circumstances) and is subject to the achievement during this period of ratios based, on the one hand, on cash flows from operating activities and, on the other, on EBITDA as a percentage of net productive assets. The plan is aimed at executive directors, senior executives and other executives. The application of this programme to executive directors and senior executives was authorised by the Annual General Meeting held on 29 June 2010. On 19 December 2012, the Board of Directors approved a new three-year remuneration plan consisting of the award of shares of Ferrovial, S.A. The total number of shares that can be granted annually under the plan may not exceed 1,900,000, representing 0.26% of Ferrovial, S.A.'s share capital. The terms and conditions concerning award and duration are similar to those of the previous plan explained above, with the inclusion of an additional condition related to total shareholder return in relation to a comparable group. The application of this plan to executive directors and senior executives was authorised by the Annual General Meeting held on 22 March 2013. The changes in the aforementioned remuneration schemes in 2013 and 2012 are summarised as follows:
2013 2012
Number of shares at beginning of year 5,829,974 4,117,600 Plans granted 1,581,049 1,854,969 Plans settled -2,003,400 0 Shares surrendered and other -129,299 -94,671 Shares exercised -77,499 -47,924
Number of shares at end of year 5,200,825 5,829,974
These share award plans include the plans described above in Note 19 on remuneration of executive directors and senior executives. In 2013 the staff costs recognised in relation to these remuneration systems amounted to EUR 18 million (2012: EUR 13 million). These costs were measured as futures and, therefore, the value of the shares and the foreseeable dividends up to the delivery date is discounted to the value of the shares at the grant date, using a rate of return equal to the average cost of borrowings over the share award period. 21. INFORMATION ON RELATED PARTY TRANSACTIONS As regards the information on related party transactions, the disclosures below relate to transactions performed by Ferrovial, S.A. and all of its subsidiaries. Approval of transactions In accordance with the Board of Directors Regulations, all professional or commercial transactions of the persons referred to below with Ferrovial, S.A. or its subsidiaries require the authorisation of the Board of Directors, subject to a report from the Audit and Control Committee. In the case of ordinary transactions involving Ferrovial, S.A. the general approval of the Board of Directors for the related line of transactions will suffice. This authorisation is not necessary, however, for transactions that simultaneously fulfil the following three conditions: 1. Performed under contracts containing standard terms and conditions and applied en masse to numerous customers. 2. Effected at prices or rates established on a general basis by the party acting as the supplier of the good or service in question.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 34
3. Amount does not exceed 1% of the Company’s annual income. The following persons are subject to these rules:
- Directors of Ferrovial, S.A. The person requesting authorisation shall vacate the meeting room while the Board deliberates and votes and may not exercise or delegate his or her voting rights.
- Controlling shareholders. - Natural persons representing directors that are legal persons. - The Company's senior executives. - Such other executives as might be designated individually by the Board of Directors. - Persons related to the persons listed above, as defined in the Board of Directors Regulations.
Related party transactions The main arm’s length transactions with related parties carried out in 2013 in the ordinary course of business of the Company and of the Group are disclosed below. Where the profit or loss from a transaction cannot be stated, as it pertains to the entity or individual supplying the related good or service, the transaction has been marked with an asterisk (*).
a) Significant shareholders The following table contains a breakdown of the transactions carried out in 2013 with significant shareholders, with members of the “controlling family group” (except for the natural persons who are in turn directors or representatives of directors of the Company, included in the following section) or entities related through shareholdings to persons from the “controlling family group” (1):
TRANSACTIONS WITH SIGNIFICANT SHAREHOLDERS 2013 2012
Name/ Company name
Ferrovial Group company
Nature of
transaction Type of transaction Amount
Profit or loss
Balance Amount Profit or
loss Balance
Members of “controlling family group” / entities related to them
Ferrovial Agromán, S.A. / subsidiaries
Commercial Construction and renovation work
(-) (-) (-) 140 14 0
Ferrovial Servicios, S.A. / subsidiaries
Commercial Integrated management of services at Madrid offices
450 47 178 461 124 143
Ferrovial Servicios, S.A. / subsidiaries
Commercial Integral management of services
2 0 0 (-) (-) (-)
(1) According to the “Notification of Voting Rights” form submitted to the CNMV and the Company on 31 July 2013, the family group formed by María, Rafael, Joaquín, Leopoldo and Fernando del Pino y Calvo-Sotelo controls, as defined in Article 4 of the Spanish Securities Market Law, through Karlovy, S.L. (Karlovy), the majority of the share capital of Portman Baela, S.L. (Portman). Also, Casa Grande de Cartagena, S.L.U. is controlled by certain members of the aforementioned family group. At the aforementioned date, Portman held 41.053% of the share capital of Ferrovial, S.A. At that date, Karlovy held a direct ownership interest of 0.002% in the share capital of Ferrovial, S.A. The family group formed by the persons listed above controlled, at the aforementioned date, through Karlovy and Portman, 41.055% of the share capital of Ferrovial, S.A. The concerted action described is merely de facto and independent of the shareholders agreements notified to the CNMV as a relevant event on 29 December 2009 (entry no. 2009118302) with regard to the restrictions on the free transferability of the shares of Karlovy and Portman. Based on this notification, the sum of the shares held directly and indirectly by all the members of the family group, i.e. María, Rafael, Joaquín, Leopoldo and Fernando del Pino y Calvo-Sotelo, as well as by Karlovy, S.L., Portman Baela, S.L. and Casa Grande de Cartagena, S.L.U., amounted to 319,413,835 shares, representing 43.546% of the share capital of Ferrovial, S.A.
b) Transactions with directors, senior executives and related companies The transactions performed with the Company’s directors, representatives of directors and senior executives in 2013 are shown below. The table also includes the transactions performed with companies considered to be related to the foregoing (if they were so considered during a portion of the year, the transactions performed in that period are indicated):
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 35
TRANSACTIONS WITH DIRECTORS, SENIOR EXECUTIVES AND RELATED COMPANIES (1 of 2) (thousands of euros)
2013 2012
Name/ Company name Ferrovial Group company Nature
of transaction
Type of transaction Amount Profit or
loss Balance Amount
Gain or loss
Balance
Rafael del Pino y Calvo-Sotelo Ferrovial Servicios, S.A./subsidiaries Commercial Maintenance, cleaning and gardening services 18 2 2 15 5 1
Ferrovial Agromán/subsidiaries Commercial Construction and renovation work 2,122 60 105 25 0 0
Person related to Iñigo Meirás Amusco Ferrovial Servicios, S.A./subsidiaries Commercial Maintenance and gardening services (-) (-) (-) 31 0 0
Álvaro Echániz and related person Ferrovial Inmobiliaria, S.A. Commercial Sale of buildings/land (-) (-) (-) 396 0 114
Ferrovial Agromán/subsidiaries Commercial Real estate renovation 8 0 0 (-) (-) (-)
Santiago Olivares and related person Ferrovial Inmobiliaria, S.A. Commercial Sale of buildings/land (-) (-) (-) 260 1 76
Person related to Jaime Aguirre de Cárcer
Ferrovial Inmobiliaria, S.A. Commercial Sale of buildings/land (-) (-) (-) 129 1 38
Joaquín Ayuso García Ferrovial Agromán/subsidiaries Commercial Real estate renovation 1 0 0 8 0 0
María del Pino y Calvo-Sotelo Ferrovial Agromán/subsidiaries Commercial Real estate renovation 1 0 0 2 0 20
Almirall Laboratorios Ferrovial Servicios, S.A./subsidiaries Commercial Provision of waste collection services 29 1 4 122 10 17
Aviva Ferrovial Group companies Commercial Arrangement of insurance policies 2,440 (*) 0 2,581 (*) 149
Maxam Europe and Group companies Ferrovial Agromán/subsidiaries Commercial Receipt of supplies of explosives and detonators 147 (*) -48 232 (*) 46
Cepsa
Ferrovial Agromán/subsidiaries Commercial Construction work (-) (-) (-) 45 0 0
Ferrovial Group companies Commercial Receipt of fuel supplies 14,129 (*) -339 16,933 (*) -1,250
Ferrovial Servicios, S.A./subsidiaries Commercial Provision of maintenance services 16 2 0 3 3 0
Everis and Group companies Cintra Commercial Receipt of communication services 23 (*) -27 16 (*) 0
Ferrovial Servicios, S.A./subsidiaries Commercial Receipt of communication services 685 (*) 0 (-) (-) (-)
Asea Brown Bovery Ferrovial Group companies Commercial
Receipt of equipment repair, upkeep and maintenance services
141 (*) -49 21 (*) 0
Ferrovial Servicios, S.A./subsidiaries Commercial Provision of waste collection services 6 1 0 12 1 4
(*) No gain or loss is stated as the relevant amount pertains to the entity or person providing the service.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 36
TRANSACTIONS WITH DIRECTORS, SENIOR EXECUTIVES AND RELATED COMPANIES (2 of 2) (thousands of euros)
2013 2012
Name/ Company name Ferrovial Group company Nature
of transaction
Type of transaction Amount Profit or
loss Balance Amount
Gain or loss
Balance
Telefónica Ferrovial Group companies Commercial Receipt of telecommunications services 9,218 (*) -1,618 8,449 (*) -2,095
Corporate Commercial Rebilling of cancellation costs 1,500 0 0 704 0 99
Meliá Hotels and Group companies
Ferrovial Group companies Commercial Receipt of hospitality services 3 (*) -1 5 (*) -1
Ferrovial Servicios, S.A. / subsidiaries Commercial Provision of maintenance and waste collection services
55 4 15 26 0 22
Acerinox Ferrovial Servicios, S.A. / subsidiaries Commercial Provision of waste collection services (-) (-) (-) -1 0 0
Indra
Ferrovial Servicios, S.A. / subsidiaries Commercial Provision of maintenance services 535 49 297 (-) (-) (-)
Corporate Commercial Receipt of IT services 2,266 (*) -156 (-) (-) (-)
Ferrovial Servicios, S.A. / subsidiaries Commercial Receipt of IT services 343 (*) -266 (-) (-) (-)
Cintra Commercial Receipt of IT services 114 (*) -5 (-) (-) (-)
Ferrovial Agromán / subsidiaries Commercial Fire prevention systems 6 (*) -44 (-) (-) (-)
Holcim Ferrovial Agromán / subsidiaries Commercial Purchase of cement 539 (*) -278 1 (*) 0
Bankia
Ferrovial Group companies Commercial Provision of financial services 13,334 (*) 0 7,078 (*) 0
Ferrovial Group companies Commercial Financing agreements Guarantee 297,900 (*) 0 301,200 (*) 0
Ferrovial Group companies Commercial Interest paid 266 266 0 731 731 0
Ferrovial Group companies Commercial Interest paid 6,163 (*) 0 5,511 (*) 0
Ferrovial Group companies Commercial Balance drawn down against guarantee facilities
227,800 (*) 227,800 268,600 (*) 268,600
Ferrovial Servicios, S.A. / subsidiaries Commercial Provision of maintenance services 14 2 1 (-) (-) (-)
Fundación Seres Corporate Commercial Donation 18 (*) 0 6 (*) 0
La Rioja Alta Ferrovial Servicios, S.A. / subsidiaries Commercial Receipt of food services 1 (*) 0 1 (*) 0
Panda Security Ferrovial Agromán / subsidiaries Commercial Receipt of IT services 4 (*) 0 (-) (-) (-)
Zurich Insurance
Ferrovial Group companies Commercial Arrangement of insurance policies 566 (*) 0 216 (*) -3
Ferrovial Servicios, S.A. / subsidiaries Commercial Lease of offices 448 (*) -28 (-) (-) (-)
Ferrovial Servicios, S.A. / subsidiaries Commercial Provision of maintenance services 4 1 5 2 -2 0
La Rioja Alta Ferrovial Servicios, S.A. / subsidiaries Commercial Receipt of food services 1 (*) 0 1 (*) 0
(*) No Gain or loss is stated as the relevant amount pertains to the entity or person providing the service.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 37
The information on remuneration and loans to directors and senior executives may be consulted in Note 20.
c) Intra-Group transactions The transactions performed by Ferrovial, S.A. with the other Group companies are detailed in Note 10. 22. DIRECTORS’ OWNERSHIP INTERESTS IN AND POSITIONS OR FUNCTIONS AT COMPANIES ENGAGING IN AN ACTIVITY THAT IS IDENTICAL, SIMILAR OR COMPLEMENTARY TO THE COMPANY OBJECT OF FERROVIAL Article 229 of the Spanish Limited Liability Companies Law requires the directors to notify the Company of the following information:
- Any conflicts of interest that they may have with the Company. - Any ownership interests they may have in the share capital of a company engaging in an activity that is identical, similar or
complementary to the Company’s object. - Any positions held or functions discharged at such companies.
In accordance with paragraph 3 of the aforementioned Article 229, this information is to be included in the notes to the financial statements. Furthermore, Article 230 of the Spanish Limited Liability Companies Law establishes that directors may not engage, as independent professionals or as employees, in activities that are identical, similar or complementary to the activity that constitutes the Company's object, except in the event of receiving express authorisation to do so from the Company, through a resolution by the General Meeting, which shall require notice to be given as required under Article 229 of the Law. In this regard, the information furnished to the Company by the persons who served on the Board of Directors of Ferrovial, S.A. in 2013 is as follows: Conflicts of interest: No conflicts, direct or indirect, were disclosed vis-à-vis the Company's interests, without prejudice to the agreements relating to the appointment or re-appointment of each of the directors, to the renewal of positions and to the remuneration of the executive directors. Ownership interests in share capital: The directors do not have any ownership interests in the share capital of companies as provided for in Article 229 of the Spanish Limited Liability Companies Law. Positions or functions: For information purposes, the positions held by Ferrovial directors at Group subsidiaries are as follows:
Joaquín Ayuso García: Chairman of the Board of Directors of Autopista del Sol, S.A.
Iñigo Meirás Amusco: Chairman of the Board of Directors of Ferrovial Agromán, S.A., Ferrovial Aeropuertos, S.A., Cintra Infraestructuras, S.A., Ferrovial Servicios, S.A. and Ferrovial Fisa, S.L.; Chairman and CEO of Finecofer, S.L.
23. ENVIRONMENTAL POLICY Any operation designed mainly to prevent, reduce or repair damage to the environment is treated as an environmental activity. However, Ferrovial's activities include street cleaning, the collection of urban solid waste and its subsequent treatment, water treatment and water quality control and other activities involved in the provision of environmental services to third parties. Also, a large majority of the construction contracts include an environmental impact assessment and the performance of work to conserve, maintain and restore the environment. Ferrovial does not consider environmental assets and expenses to be those related to the aforementioned provision of services since they are performed for third parties. However, environmental claims and obligations are included regardless of whether or not they arise from the Company's own operations or operations performed for third parties. Investments relating to environmental activities are measured at acquisition cost and capitalised as an addition to non-current assets in the year in which they are made. Costs incurred in protecting and improving the environment are taken to the income statement in the year in which they are incurred, irrespective of when the related monetary or financial flow takes place.
Separate financial statements at 31 December 2013 Ferrovial, S.A.
Ferrovial, S.A. Separate financial statements at 31 December 2013 - 38
Provisions for probable or certain environmental liability, litigation in progress and indemnities or other outstanding obligations of undetermined amount not covered by the insurance policies taken out are recorded when the liability or obligation giving rise to the indemnity or payment arises. 24. FEES PAID TO AUDITORS In compliance with Spanish Audit Law 12/2010, of 30 June, all the fees for the audit of the financial statements for 2013 and 2012 by the auditors of Ferrovial, S.A. are disclosed herein. A breakdown of the fees billed for those years for audit-related services is also provided. -Fees billed to Ferrovial, S.A. for audit services: EUR 78 thousand (2012: EUR 76 thousand). -Fees billed to Ferrovial, S.A. for audit-related services: EUR 117 thousand (2012: EUR 342 thousand). 25. EVENTS AFTER THE REPORTING PERIOD In January 2014 the UK Civil Aviation Authority (CAA) published its decision on economic regulation at Heathrow, reducing airport charges by an amount in line with inflation (Retail Price Index), i.e. -1.5%, over the period 2014-2019. This reduction will entail a fall in revenue per passenger in real terms from GBP 20.71 in 2013/14 to GBP 19.10 in 2018/19. 26. COMMENTS ON APPENDICES
Appendix I contains a list of Group companies, making a distinction between fully consolidated companies and companies accounted for using the equity method. The net cost of the ownership interest presented relates to that recognised at the individual company which holds the direct ownership interest in each subsidiary.
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Ferrovial, S.A. Separate financial statements at 31 December 2013 - 39
SUBSIDIARIES (fully consolidated companies)
Individual information
Company Auditor Parent % of ownership
Net cost of ownership
interest (millions of
euros)
Country Registered office
SPAIN
Ferrovial Inversiones, S.A.
Ferrovial, S.A. 100% 0 Spain Príncipe de Vergara, 135, 28002, Madrid
Betonial, S.A.
Ferrovial, S.A. 99% 32 Spain Príncipe de Vergara, 135, 28002, Madrid
Burety, S.L.
Ferrovial, S.A. 100% 0 Spain Príncipe de Vergara, 135, 28002, Madrid
Can-Am, S.A., Sole-Shareholder Company
Ferrovial, S.A. 100% 2 Spain Príncipe de Vergara, 135, 28002, Madrid
Frin-Gold, S.A.
Ferrovial, S.A. 99% 0 Spain Príncipe de Vergara, 135, 28002, Madrid
Inversiones Trenza, S.A.
Ferrovial, S.A. 100% 1 Spain Príncipe de Vergara, 135, 28002, Madrid
Promotora Ibérica de Negocios, S.A. Ferrovial, S.A. 99% 0 Spain Príncipe de Vergara, 135, 28002, Madrid
Ferrovial Telecomunicaciones, S.A.
Ferrovial, S.A. 99% 0 Spain Príncipe de Vergara, 135, 28002, Madrid
Remtecolex, S.A.
Ferrovial, S.A. 99% 0 Spain Príncipe de Vergara, 135, 28002, Madrid
Ferrovial Emisiones, S.A. Deloitte Ferrovial, S.A. 99% 0 Spain Príncipe de Vergara, 135, 28002, Madrid
Triconitex, S.L.
Ferrovial, S.A. 100% 6 Spain Príncipe de Vergara, 135, 28002, Madrid
Finecofer, S.L. Deloitte Ferrovial, S.A. 100% 2,138 Spain Príncipe de Vergara, 135, 28002, Madrid
Ferrofin, S.L. Deloitte Ferrovial, S.A. 67% 1,481 Spain Príncipe de Vergara, 135, 28002, Madrid
Ferrovial Corporación, S.A. Deloitte Ferrovial, S.A. 100% 5 Spain Príncipe de Vergara, 135, 28002, Madrid
Autovía de Aragón, S.C., S.A.
Ferrovial, S.A. 15% 3 Spain Príncipe de Vergara, 135, 28002, Madrid
Cintra Infraestructuras, S.A. Deloitte Ferrovial, S.A. 100% 1,922 Spain Plaza Manuel Gómez Moreno, 2. Edificio Alfredo Mahou, 28020, Madrid
Ferrovial Servicios, S.A. Deloitte Ferrovial, S.A. 100% 578 Spain Príncipe de Vergara, 135, 28002, Madrid
Ferrovial FISA, S.L. Ferrovial, S.A. 100% 72 Spain Príncipe de Vergara, 135, 28002, Madrid
IRELAND
Alkes Reinsurance Ltd. Deloitte Ferrovial, S.A. 100% 3 Ireland 13-17 Dawson Street, Dublin 2
UNITED KINGDOM
Ferrocorp UK Limited BDO Ferrovial, S.A. 100% 1 UK Edmund Halley Road, Oxford OX4 4DQ
NETHERLANDS
Grimalinvest, B.V.
Ferrovial, S.A. 100% 14 Spain Naritaweg 165, 1043 BW, Amsterdam
ASSOCIATES (companies accounted for using the equity method)
Millions of euros
Company Auditor % of ownership -
Ferrovial S.A.
Net cost of ownership
interest (millions of euros)
Location Assets Liabilities Revenue
Profit/Loss Address
GREECE
Nea Odos, S.A. Deloitte 33.3% 0 Greece 448 119 56 0 Nea Odos Themistokleous, 87, 10683
Central Greece Motorway Deloitte 33.3% 0 Greece 774 442 8 0 1st Km Lamia, Athens
27. EXPLANATION ADDED FOR TRANSLATION TO ENGLISH These financial statements are presented on the basis of the regulatory financial reporting framework applicable to the Company (see Note 2.1). Certain accounting practices applied by the Company that conform with that regulatory framework may not conform with other generally accepted accounting principles and rules.
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Ferrovial, S.A. Separate financial statements at 31 December 2013 - 40
The foregoing pages contain the financial statements of FERROVIAL, S.A. -the balance sheet, income statement, statement of changes in equity, statement of cash flows and notes to the financial statements- for the year ended 31 December 2013, which were authorised for issue by the Company's Board of Directors at the meeting held in Madrid on 25 February 2014 and which, pursuant to Article 253 of the Spanish Limited Liability Companies Law, are signed below by all the directors who attended the meeting. _________________________________ _________________________________ Rafael del Pino y Calvo-Sotelo Santiago Bergareche Busquet Chairman Deputy Chairman _________________________________ _________________________________ Joaquín Ayuso García Íñigo Meirás Amusco Deputy Chairman CEO _________________________________ _________________________________ Jaime Carvajal Urquijo Leopoldo del Pino y Calvo-Sotelo Director Director
for Portman Baela, S.L. _________________________________ _________________________________ Juan Arena de la Mora Gabriele Burgio Director Director _________________________________ _________________________________ María del Pino y Calvo-Sotelo Santiago Fernández Valbuena Director Director _________________________________ _________________________________ José Fernando Sánchez-Junco Mans Joaquín del Pino y Calvo-Sotelo Director Director
for Karlovy, S.L. Certificate issued by the Secretary of the Board of Directors attesting that Santiago Fernández Valbuena did not sign this document due to absence for unavoidable professional obligations and that he appointed the Chairman of the Board of Directors as his proxy. _________________________________ Santiago Ortiz Vaamonde Secretary of the Board of Directors