January-June 2014 Financial Results

January - June 2014

Results

1

A I R P O R T S T O L L R O A D S C O N S T R U C T I O N

C I Ó N

S E R V I C E S

GENERAL OVERVIEW

In the first six months of 2014 the Group reported revenue growth of

11.5% reaching EUR4,159mn, mainly driven by the Services division on

the back of organic growth from the contribution of new contracts and

the consolidation of Enterprise (consolidated for six months in 2014 vs.

only three in 2013). LFL revenue growth was a solid +12.5% and EBITDA

increased by 3.5%.

During the period, Ferrovial, through a consortium led by its subsidiary

Cintra Infraestructuras, closed a contract for the design, construction,

financing, operation and maintenance of the concession for 41.8km of the

I-77 toll road in North Carolina (USA), with an estimated investment of

USD655mn.

Another event of note during the first half was the negotiation with 12

banks for a new 5-year, EUR750mn liquidity line for Ferrovial, signed in

early April, at a current cost of 80bp. This line has not yet been drawn,

which increases the company’s financial flexibility. After the close of 1H

2014, the rating agency Fitch upgraded Ferrovial’s corporate debt from

BBB- to BBB with stable Outlook. In the second week of July, Ferrovial

issued its third corporate bond for EUR300mn, with a 10 year maturity

and with a coupon of 2.5%.

Ferrovial S.A.’s AGM was held on 26 June 2014, when the shareholders

approved a capital increase charged to reserves to introduce a new

flexible shareholder remuneration system, the so-called “Ferrovial Flexible

Dividend”.

Also during the period, HAH paid GBP135mn in dividends, of which

EUR41mn corresponded to Ferrovial. The 407ETR toll road paid CAD350m

in dividends during the period (of which EUR110mn corresponded to

Ferrovial), more than the CAD230m paid in the first half of 2013.

Net cash excluding infrastructure projects reached EUR1,599mn at end-

June 2014.

Finally, the Construction division won some important contracts that are

not yet reflected in the backlog, including an electricity generation plant

in Poland and the extension of the I-77 toll road in North Carolina (USA)

and new contracts totalling approximately EUR1,100mn at current

exchange rates.

Business performance

The group’s two principle assets confirmed their resilience during the

period, with EBITDA growth of 15.6% at Heathrow Airport and 10.0% at

the 407ETR toll road.

In terms of traffic, Heathrow’s increased by 1.9% vs. the same period last

year, while at the 407ETR traffic increased by 3.8%. The improving trend

seen since the last quarter of 2013 at the European toll roads was

confirmed, with growth in Spain vs. the same period last year and solid

growth in Portugal and Ireland.

The Services division consolidated its position as the biggest division in

the Group in terms of revenues, EBITDA and backlog, with significant

growth in both the UK and in Spain. The backlog reached a new high of

close to EUR20bn including the contracts consolidated by the equity

method.

At the Construction division there was a slight decline in revenues, mainly

due to exchange-rate movements and the 2013 disposal of Danwood, a

company owned by Budimex. We also highlight Ferrovial’s entry into new

countries with the first contract awards in Brazil and Saudi Arabia, as well

as a strengthening of its position in Australia.

jun-14 jun-13 Var. Like-for-Like (%)

jun-14 dic-13 Var.

Revenues 4.159 3.732 11,5% 12,5%

Construction Backlog 7.297 7.867 -7,3%

EBITDA 435 415 4,8% 3,5%

Services Backlog 18.841 17.749 6,2%

EBIT* 315 302 4,3% 2,2%

Net result 168 287 -41,4%

Traffic jun-14 jun-13 Var.

Cash flow ex-projects

ETR 407 (VKT´ 000) 1.145.192 1.103.360 3,8%

Operating cash flow 72 -154

Chicago Skyway (ADT) 37.755 38.288 -1,4%

Investment -82 -603

Indiana Toll Road (ADT) 25.854 25.765 0,3%

Divestment 21 46

Ausol I (ADT) 10.315 10.132 1,8%

Net debt jun-14 dic-13

Ausol II (ADT) 12.764 12.707 0,5%

Net Debt Ex-Infrastructure Projects 1.599 1.675

M4 (ADT) 25.653 24.562 4,4%

Total net debt -5.563 -5.352

Heathrow (million pax.) 35 34 1,9%

Results January-June 201

2

TOLL ROADS

Jun-14 Jun-13 Var. Like-for-Like

(%)

Revenues 200 206 -3.0% -2.3%

EBITDA 123 125 -1.8% 3.0%

EBITDA

Margin 61.4% 60.7%

EBIT 86 91 -5.6% 0.4%

EBIT Margin 42.9% 44.1%

Revenues at this division were mainly affected by the reversal of

provisions made in 2013 at the Norte Litoral toll road (EUR7mn) and the

adverse weather conditions in the first quarter of the year in the USA.

Assets in operation

TRAFFIC PERFORMANCE

Traffic growth was very positive in the second quarter, on the Group’s toll

roads. In North America, both Chicago and Indiana posted growth in the

period vs. significant declines in the first quarter due to the extreme

weather conditions and heavy snowfalls in January and February. Note

the strong YOY growth (+14.8%) in 1H 2014 on the SH130.

In Spain, the improving trend observed at the end of 2013 was

confirmed, with traffic growth on all the toll roads with the exception of

the R4, which saw a slight fall.

The Portuguese concessions (Algarve and Azores) posted solid traffic

growth, confirming the trend observed in the latter part of 2013.

In Ireland, traffic on the M4 maintained positive growth in the first half of

the year due to the improvement in employment, in line with the

performance in 2013.

Finally, in Greece, the fall in traffic on the Ionian Roads and Central

Greece toll roads is impacted by the 60% increase in tolls applied since

February

.

Traffic Revenues EBITDA EBITDA Margin Net Debt 100%

Global consolidation Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Jun-14 Share

Intangible assets

Chicago Skyway

37,755 38,288 -1.4% 28 29 -4.5% 24 25 -5.4% 85.9% 86.6% -1,081

55%

SH-130 6,273 5,463 14.8% 8 7 24.7% 2 2 -10.3% 25.3% 35.2% -895 65%

Ausol I 10,315 10,132 1.8% 19 20 -8.2% 14 13 8.1% 73.7% 62.6% -452 80%

Ausol II 12,764 12,707 0.5%

M4 25,653 24,562 4.4% 11 11 4.8% 8 7 4.7% 68.3% 68.4% -109 66%

Algarve 7,589 6,824 11.2% 20 17 12.7% 17 15 16.5% 88.5% 85.6% -131 85%

Azores 7,856 7,719 1.8% 10 10 2.5% 8 1 n.s. 78.6% 10.8% -326 89%

Financial assets

Autema

48 44 7.4% 43 39 8.5% 89.6% 88.7% -642 76%

M3

11 10 1.2% 8 8 2.1% 76.2% 75.6% -195 95%

Norte Litoral

24 33 -26.5% 21 29 -28.0% 87.4% 89.2% -189 84%

Via Livre

6 6 -5.6% 1 0 61.7% 9.6% 5.6% 7 84%

Equity accounted Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Jun-14 Share

407 ETR (VKT´ 000) 1,145,192 1,103,360 3.8% 276 277 -0.6% 230 234 -1.7% 83.5% 84.4% -3,992 43%

Intangible assets

Indiana Toll Road 25,854 25,765 0.3% 74 74 0.2% 53 56 -4.7% 71.8% 75.5% -2,829 50%

Central Greece 16,437 17,275 -4.8% 4 4 -5.5% 2 -1 -424.9% 66.8% -19.4% -413 33%

Ionian Roads 22,495 26,253 -14.3% 33 26 24.9% 23 8 172.3% 68.4% 31.4% 187 33%

Serrano Park

3 3 0.7% 2 2 11.9% 66.3% 59.6% -46 50%


3

FINANCIAL ASSETS

In the application of IFRIC 12, concession contracts are classified as one

of two types: intangible assets or financial assets.

Intangible assets (where the operator assumes the traffic risk) are those

where remuneration comprises the right to charge the corresponding

tariffs depending on the level of use.

Financial assets are concession agreements where the remuneration

comprises an unconditional contractual right to receive cash or other

financial assets, either because the entity awarding the concession

guarantees the payment of agreed sums, or because it guarantees it will

cover the gap between the sums received from the users of the public

service and the said agreed amounts. In this type of contract, the

demand risk is assumed by the entity awarding the concession.

Assets in operation classified as financial assets, where there is no traffic

risk due to some kind of guarantee mechanism are the Norte Litoral, the

Eurolink M3, Autema and the Via Livre.

Assets under development

ASSETS UNDER CONSTRUCTION

Global consolidation Invested

Capital

Pending committed

capital

Net Debt 100%

Share

Intangible assets 407 195 -1,661

NTE 165 18 -667 57%

LBJ 221 41 -929 51%

NTE 35W 21 136 -65 50%

Equity accounted

Financial assets 4 15 -259

407 East 9 -207 50%

A-66 Benavente

Zamora 4 6 -52 25%

NTE: This toll road will open to traffic in the second half of 2014.

LBJ: The project is progressing according to schedule, and 84% of the

construction phase is now complete and is expected to conclude in 2015.

NTE 3A3B: The financing for the project was closed on September 2013.

At 30 June 2014, the project is progressing according to schedule, with

the opening expected for mid-2018.

407 East: Construction started in the first week of March, and is expected

to be completed at the end of 2015. The rating agencies DBRS and S&P

have affirmed the project’s rating at A- with stable Outlook.

CONTRACT AWARDS

Ferrovial, through the consortium led by its subsidiary Cintra

Infraestructuras, has closed a contract with North Carolina Department of

Transport (NCDOT) for the design, construction, financing, operation and

maintenance of the extension of the I-77 toll road for a total of

USD655mn (some EUR478mn). The concession period for the new

infrastructure is 50 years from the date the toll road opens to traffic. The

contract was signed after NCDOT’s selection in April of the consortium as

it had the best proposal.

Cintra will be responsible for the development of this project, while the

design and construction will be done by a JV which includes Ferrovial

Agromán and the US construction company W.C. English. The design

includes lane-widening, in both directions, for a 26-mile (41.8km) section

of the I-77 toll road in the metropolitan area to the north of Charlotte,

between the junctions with the I-277 in Charlotte and the NC-150 in

Iredell County. The existing roadway will be reconstructed in three

sections, adding capacity by creating variable electronic toll lanes that will

improve the functioning of the corridor.


4

Tenders in progress

There was a recovery in development activity in Ferrovial’s international

target markets (North America, Europe, Australia and Latin America).

In Australia, the consortium led by Cintra has been selected for the final

stage of the bidding process for the East West Link project. This project

comprises the design, construction, financing, operation and maintenance

of 9km of toll road, of which 4.3km are in a tunnel. This is a project

under payment for availability.

In Canada, Infrastructure Ontario published an RFQ in March 2013 for the

407East Extension II. In April 2014, the Cintra consortium was

prequalified. The project is for the design, construction, financing and

maintenance of approximately 33km of toll road, and the contract has a

life of 35 years.

Portsmouth Bypass (Ohio). Cintra was prequalified on 6 September

2013. The project is for the design, construction, financing and

maintenance of approximately 26km of toll road. This is a project without

traffic risk.

SH288 Toll Lanes (Houston, Texas). In September 2013, Cintra was

prequalified. The project consists of the design, construction, financing,

operation and maintenance of 10.3 miles of two toll lanes in both

directions (new construction), under a real toll regime. It also includes

the operation and maintenance of the existing non-toll lanes and service

roads on the section.

Illinois Portion of the Illiana Corridor (Illinois, USA). Cintra was

prequalified on 17 January 2014. The project consists of the design,

construction, financing, operation and maintenance of 57km of toll road

with two lanes in each direction, under a payment for availability regime.

Indiana Portion of the Illiana Corridor (Indiana, USA). Cintra was

prequalified on 28 February 2014. The project consists of the design,

construction, financing, operation and maintenance of 20km of toll road

with two lanes in each direction, under a payment for availability regime.

The contract would be for 35 years from the completion of construction.

ASSETS UNDER CREDITOR PROTECTION

Global

consolidation

Traffic Revenues EBITDA EBITDA Margin Net Debt 100%

Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Jun-14 Share

Intangible assets

Ocaña-La Roda 2,637 2,505 5.2% 6 5 6.4% 1 0 114.6% 19.2% 9.5% -551 54%

Radial 4 4,153 4,290 -3.2% 6 6 0.1% 2 2 -5.9% 38.6% 41.1% -612 55%

RADIAL 4

On 14 September 2012, the Board of the Radial 4 agreed to request a

judicial declaration of voluntary insolvency. On 4 October, this request

was granted.

Impairments have been recognised for all the investments and

guarantees relating to this project, such that the resolution of the

insolvency process should have no negative impact whatsoever on

Ferrovial’s accounts.

As a result of the filing for insolvency, the moratorium agreements with

the creditor banks were terminated.

OCAÑA - LA RODA

The Ocaña-La Roda toll road requested a judicial declaration of voluntary

insolvency on 19 October 2012. On 4 December 2012 this request was

granted. The Creditor Committee meeting was set for 19 September

2014.

Impairments have been recognised for the entire investment in this

project, and Ferrovial does not expect there to be any negative impact

whatsoever on its accounts from the resolution of the insolvency

proceedings.


5

407ETR

PROFIT & LOSS ACCOUNT

CAD Jun-14 Jun-13 Var.

Revenues 414 372 11.3%

EBITDA 345 314 10.0%

EBITDA Margin 83.5% 84.4% -1.1%

EBIT 313 284 10.1%

EBIT Margin 75.6% 76.4% Financial results -203 -110 85.0%

EBT 109 174 -37.2%

Corporate income tax -29 -46 -37.7%

Net Income 81 128 -37.0%

Contribution to Ferrovial

equity accounted result (€) 18 35 -49.2% NB: since Ferrovial’s sale of 10% of the concession in 2010, the toll road has been consolidated by the equity method, as a reflection of the size of Ferrovial’s stake in the concession (43.23%).

407ETR posted significant revenue and EBITDA growth of 11.3% and

10.0% in local currency terms. This positive performance reflected the

combination of the tariff increases that came into force on 1 February,

the increase in the number of journeys and in the average distance

travelled. Average revenues per journey increased by 8.1% vs 2013.

The financial result was higher than in the previous year due to the

increase in inflationary expectations – with no cash outflow – vs. a decline

last year. In addition, interest expenses were higher due to the issuance

of two bonds of CAD200mn each, one in June and the other in October

2013 and one for EUR250mn in May 2014.

407ETR contributed EUR18mn to Ferrovial’s equity accounted results after

the annual depreciation of the goodwill generated on the sale of 10% of

the concession in 2010, which is being depreciated over the life of the

asset as a function of the expected traffic.

DIVIDENDS

In the first half of the year, the concession paid CAD350mn in dividends

(vs. CAD230mn in 2013). On 17 July, it agreed another distribution of

CAD175mn which will be paid in the third quarter.

CAD 2014 2013 2012

T1 175.0 100.0 87.5

T2 175.0 130.0 87.5

T3 175.0 200.0 87.5

T4 250.0 337.5

Total 680.0 600.0

TRAFFIC

Traffic, total kilometres travelled, increased 3.8% as a reflection of a

2.8% increase in the number of journeys and a 1.0% rise in the average

distance travelled. Traffic is benefiting from maintenance works and lane

closures on the parallel roads.

NET DEBT

The toll road’s net debt at 30 June stood at CAD5,759mn with an average

cost of 4.96%. In May 2014, the concession issued a CAD250mn bond

maturing in May 2024 and with a coupon of 3.35%.

After this issuance, 42% of the debt matures at more than 20 years. The

2015 and 2016 debt maturities amount to CAD627mn and CAD294mn

respectively.

CREDIT RATING

S&P: "A" (Senior Debt), "A-" (Junior Debt) and "BBB" (Subordinated

Debt).

DBRS: "A" (Senior Debt), "A low" (Junior Debt) and "BBB" (Subordinated

Debt).

407ETR TARIFFS

The table below shows the comparison between the tariffs in 2013 and

those in 2014 (increase on 1 February) for light vehicles:

CAD 2014 2013

Regular Zone Peak Period Mon-Fri: 6am-7am, 9am-10am, 3pm-4pm, 6pm-7pm

Peak Hours Mon-Fri: 7am-9am, 4pm-6pm

28,30¢ /km

30,20¢ /km

26,20¢ /km

27,20¢ /km

Light Zone Peak Period Mon-Fri: 6am-7am, 9am-10am, 3pm-4pm, 6pm-7pm Peak Hours Mon-Fri: 7am-9am, 4pm-6pm

26,90¢ /km

28,70¢ /km

24,90¢ /km

25,85¢ /km

Midday Rate

Weekdays 10am-3pm 24,06¢/km 22,70¢/km

Midday Rate

Weekends & holidays 11am-7pm 22,25¢/km 21,00¢/km

Off Peak Rate

Weekdays 7pm-6am, Weekends & holidays 7pm-11am

19,35¢/km 19,35¢/km

Transponder: Monthly rental $3,40 $3,25

Transponder: Annual rental $21,50 $21,50

Video toll per journey $3,95 $3,80

Charge per journey (NB This is not a charge per km)

$0,80 $0,70


6

SERVICES


(%)

Revenues 2,125 1,655 28.4% 25.7%

EBITDA 158 138 14.7% 11.6%

EBITDA Margin 7.5% 8.3%

EBIT 94 76 24.9% 18.5%


EBITDA at Ferrovial % in equity accounted

businesses

11 4 n.s n.s

Backlog* 18,841 17,749 6.2% 3.6%

JVs Backlog* 1,146 875 31.0% 28.4%

Global Backlog+JVs* 19,987 18,624 7.3% 4.7%

*Backlogs compared with December 2013.

Revenue growth vs. 2013 is a consequence of both organic growth in the

division’s activity +8.6% (+10.2% in Spain, +7.4% in the UK and

+24.7% International) and from the increase in the contribution from

Enterprise (with six months consolidated in 2014 vs. three months in

2013).

The 2014 P&L includes the costs incurred in the integration of Amey and

Enterprise in the UK (EUR10mn) and the Spanish businesses (EUR0.3mn).

In June 2013, these costs amounted to EUR12mn in the UK and EUR2mn

in Spain.

The EBITDA margin reached 7.5% in June vs. 6.7% in the first quarter of

this year. The margin is expected to gradually improve over the rest of

the year, supported by an increase in the contribution from the contracts

which have started in 2014, once they have passed the start-up phase,

and the higher volume of synergies in the UK.

There was also strong EBITDA growth in the equity-accounted

companies, which reached EUR11mn vs. EUR4mn in June 2013.

Finally, the backlog maintained the same rate of growth as in recent

quarters, reaching EUR18,841mn. Including Ferrovial’s stake in the

equity-accounted companies, the backlog stood at EUR19,987mn, 7.3%

higher than in December 2013 (+4.7% in pro-forma terms).

Spain


(%)

Revenues 774 702 10.2% 10.2%

EBITDA 84 95 -12.3% -12.4%


EBIT 42 51 -16.4% -16.6%


EBITDA at Ferrovial % in equity accounted businesses

2 0 n.s n.s

Backlog* 6,407 6,330 1.2% 1.2%

JVs Backlog* 343 351 -2.3% -2.3%



Revenues increased 10.2% as a consequence of the start-up of new

contracts won in 2013, such as maintenance at Valdecilla Hospital in

Cantabria, and passenger services on long-distance trains.

In spite of the revenue growth, EBITDA was 12.3% lower than in June

2013 (or -EUR12mn in absolute terms) . This mainly reflected the impact

of two factors: the reversal of provisions for overdue accounts in 2013

(EUR9mn reversed in 2013 vs. zero in 2014), and an increase in Social

Security contributions due to changes in the legislation, which resulted in

an additional charge of EUR3mn in 2014 (the full-year impact is expected

to reach EUR6mn).

Some new contracts came into operation during the year that have been

less profitable than the rest of the backlog during the first few months of

the start-up phase. The margins on these new contracts have now

started to stabilise, and this was the main reason for the higher EBITDA

margin in June (10.8%) than in the first quarter of the year (10.3%).

UK


(%)

Revenues 1,312 918 42.9% 37.0%

EBITDA 73 39 86.9% 58.5%


EBIT 52 24 118.7% 70.6%


EBITDA at Ferrovial % in equity accounted

businesses

8 4 n.s n.s

Backlog* 12,165 11,188 8.7% 4.6%

JVs Backlog* 723 441 63.8% 57.5%



The significant revenue and EBITDA growth vs. 2013 was driven by both

the strong organic growth and the consolidation of six months of

Enterprise in 2014 vs. three months in 2013 after the acquisition in April;

this accounted for an additional EUR265mn of revenues and EUR13mn at

EBITDA level.

Excluding the impact of these additional three months, LfL revenues and

EBITDA growth would have been 7.3% and 27.5% respectively vs. 2013.

The organic revenue growth was mainly derived from the contribution

from the new contracts won in 2013, including the maintenance of public

buildings in London, the waste treatment plant in Milton Keynes and

highway maintenance and street cleaning in Liverpool. The LfL EBITDA

growth (+27.5%) was a reflection of this higher turnover and, above all,

to the savings arising on the merger of Amey and Enterprise.

On the other hand, the integration costs of this merger reached EUR10mn

in the first half of 2014 (vs. EUR12mn in 2013). Integration costs for the

full year are expected to reach approximately GBP17mn (EUR20mn); from

2015 onwards no significant costs are anticipated. The “Proforma” column

in the above table shows the performance vs. 2013 excluding non-

recurrent merger costs in both years, as well as the impact of exchange-

rate movements.

In relation to the integration process, to date the synergies generated

have been driven by action taken in two areas in particular: the

introduction of a single organisational structure, and changes in

procurement procedures. In the first case, the bulk of the integration into

a single unit was completed in 2013, such that the savings arising on this


7

integration are already consolidated in the P&L. In the area of

procurement, the action taken are intended to achieve more efficient

supplier management and personnel expenses; the June accounts already

reflects savings derived from these measures, and these savings are

expected to increase progressively over the rest of the year.

The consolidation of the merger synergies is the main driver of the

improvement in the margin vs. the first quarter of this year (to 5.5% in

June vs. 4.7% in March).

International


(%)

Revenues 39 35 12.0% 24.7%

EBITDA 2 4 -46.2% -32.7%


EBIT 0 1 -147.4% -197.1%

EBIT Margin -1.1% 2.5%

EBITDA at Ferrovial % in

equity accounted businesses

1 0

Backlog* 269 231 16.2% 16.2%

JVs Backlog* 81 83 -2.6% -3.3%

Global Backlog+JVs* 349 314 11.3% 12.2%


The breakdown of revenues by country in the International area is as

follows: Chile (EUR22mn), Portugal (EUR12mn) and Poland (EUR4mn).

The business performance and results in the different countries is

positive, with the principal negative deviation vs. last year due to the

consolidation in 2014 of the structure necessary for this new activity

created in 2013 to function.

Activity in Qatar is also included in the International area, although the

results are equity-accounted. During 2013, three infrastructure

maintenance contracts at Doha airport came into operation. In June

2014, the main figures of Ferrovial’s stake in these contracts stood at:

revenues EUR12mn; EBITDA EUR1mn; and backlog EUR81mn.

Backlog

As in 2013, in the first half of the year there was a high volume of awards

which took the backlog pending execution to a new all-time high of

EUR18,841mn, +6.2% vs. December 2013 (+3.6% excluding exchange-

rate movements).

Including the part corresponding to Ferrovial pro rata to its stake in the

equity-accounted companies and in which it has a significant interest, the

backlog amounted to EUR19,987mn (+7.3% vs. 2013, +4.7% excluding

exchange-rate movements).

By business area, in Spain the backlog pending execution to June stood

at EUR6,750mn (+1% vs December 2013). The awards in 2Q14 included

extensions of contracts for waste collection and street cleaning in

Barcelona, Almendralejo, Sitges and Pontevedra, together amounting to

EUR166mn.

In the UK, the backlog amounted to EUR12,888mn (+10.8% vs. 2013,

+6.6% in pro-forma terms). In 2Q14 the notable awards included a new

contract with Network Rail for the renewal of switches and crossings on

the Scottish, Welsh, Midlands and London area networks for a period of

10 years for EUR469mn; maintenance of military buildings and

installations in various regions of England and Scotland worth EUR378mn

over five years; and highway maintenance in south east Scotland for

EUR183mn over six years.

In International, the backlog to June stood at EUR349mn (+11.3% vs.

2013, +12.2% in pro-forma terms). In the second quarter the awards of

note were integrated support services for the Ministro Hales mine in Chile

(EUR25mn, five years) and a contract for earth moving and mine waste

management in the municipality of Talabre (EUR12mn, four years). In

Poland, the company was awarded a contract for the maintenance of the

S7 toll road (EUR11mn, six years). Finally, in Qatar, the maintenance

services contract for Doha airport was extended for 22 months for a

consideration of EUR18mn.


8

CONSTRUCTION


(%)

Revenues 1,804 1,859 -3.0% 0.7%

EBITDA 153 154 -0.9% -0.1%


EBIT 137 140 -2.3% -2.0%


Backlog* 7,297 7,867 -7.3% -7.7%


Revenues declined slightly, principally due to the deconsolidation of

Danwood, a company owned by Budimex sold in the last quarter of 2013,

as well as lower activity in Spain and the UK. In LfL terms, there was a

mild increase in revenues (0.7%). International turnover represented

75% of the division’s revenues.

EBITDA remained in line with 2013 in LfL terms.

Budimex


(%)

Revenues 481 476 1.1% 10.7%

EBITDA 20 18 7.9% 28.6%


EBIT 17 15 14.7% 40.2%


Backlog* 945 1,044 -9.5% -9.4%


The figures for June 2014 do not include the contribution from Danwood,

sold at the end of 2013, as noted above, whose contribution in 1H13

amounted to revenues of EUR45mn and EBITDA of EUR2.5mn. In LfL

terms, the division posted both strong revenue growth (+11%) and

stronger EBIT growth (+40%), principally due to better management of

costs of materials and subcontractors.

The backlog stood at EUR945mn, or 9.4% lower LfL vs. December 2013,

although this situation will reverse in the coming months when some

large contracts still pending signature worth more than EUR500mn are

included in the backlog, marking the start of a new expansive cycle

supported by EU funding. These contracts include pre-assigned projects

for the Directorate General of Roads for approximately EUR350mn, as

well as the construction of a coal unit at the Turow electricity generating

plant for EUR770mn awarded to a consortium in which Budimex has a

22.3% stake.

Webber


(%)

Revenues 326 348 -6.1% -1.8%

EBITDA 33 19 75.4% 84.6%


EBIT 29 15 92.2% 102.5%


Backlog* 906 1,095 -17.2% -17.8%


The slight decline in revenues in LfL terms (-1.8%) was due to reduced

execution in the organic construction activity. EBIT doubled, principally

due to the progressive mitigation of risks in the construction of the

principal toll road contracts, which are close to completion.

The backlog contracted (-17.8% in local currency terms) due to the lower

volume of contract awards in the first half of the year.

Ferrovial Agromán


(%)

Revenues 996 1,036 -3.8% -2.7%

EBITDA 101 118 -14.4% -16.3%


EBIT 90 110 -17.6% -19.8%


Backlog* 5,446 5,728 -4.9% -5.5%


Revenues at Ferrovial Agromán fell by 2.7% LfL, mainly due to the

Spanish market, which fell by 3.1%, and the lower output in the UK due

to the completion of the recently inaugurated Terminal 2 at Heathrow

Airport. The contracts awarded to Ferrovial Agromán in new countries in

the first half (Brazil and Australia, principally) are in the start-up phase

and are not yet generating revenues.

Profitability slipped a little vs. 2013, reflecting a combination of the

margins generated on the US projects and the reversal of provisions on

the completion of projects, which were not offset by the start of new

projects.

Backlog

The backlog contracted by 7.3% vs. December 2013 (-7.7% LfL). The

performance was affected by the high level of execution, but does not

include the award of new contracts that will be included in the next few

months, worth approximately EUR1,100mn. In addition to those noted

above at Budimex, these contracts include the extension of the I-77 toll

road in North Carolina (USA) and the construction of a section or urban

toll road for the new access to Riyadh (Saudi Arabia).

The international backlog stood at EUR5,216mn, well above the level of

the domestic backlog (EUR2,081mn), and representing 71% of the total.

Jun-14 Dec-13 Var.

Civil work 5,755 6,164 -6.6%

Residential work 174 182 -4.0%

Non-residential work

703 768 -8.5%

Industrial 664 753 -11.8%

Total 7,297 7,867 -7.3%


9

AIRPORTS The equity-accounted contribution from HAH to Ferrovial amounted to

EUR20mn vs. the EUR140mn in 2013, which included the capital gain of

EUR138mn generated by the sale of Stansted Airport.

HAH traffic performance

In the first half of 2014, the number of passengers passing through HAH

airports reached 41.1 million, up 2.5% vs. 2013. This traffic growth was

thanks to an acceleration of the trends observed earlier, with higher load-

factors and larger aircraft in service.

At Heathrow, traffic growth reached 1.9% overall, and 8.3% for domestic

flights due to the impact of the new Virgin Atlantic routes. Long-haul

traffic increased 2.5%, with 2.2% growth in North American traffic and

4.4% on the Middle East routes. Load-factors reached 74.5% in the first

half vs. 74.4% in 2013 and the average number of seats per flight

reached 203.5 (vs. 201.4 in 2013), with 1,700 more flights than in the

same period last year.

For the third year running, Heathrow Terminal 5 was voted the best

airport terminal in the world by “Skytrax World Airports Awards”.

The new Terminal 2 at Heathrow (The Queen’s Terminal) was opened to

traffic on 4 June. By the end of October all the Star Alliance airlines will

operate from this terminal.

Traffic at the non-regulated airports increased 5.7%.

Traffic growth by destination

Jun-14 Jun-13 Var.

UK 6 6 5.9%

Europe 17 16 1.2%

Long Haul 19 18 2.6%

Total 41 40 2.5%

User satisfaction levels reached record levels in the first half of the year,

with 79% of passengers rating their experience as very good or excellent,

reflecting the improvements in punctuality, security and immigration.

GBP Traffic (million passengers) Revenues EBITDA EBITDA Margin

Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Var.

(bps)

Heathrow 35.1 34.4 1.9% 1,223 1,137 7.5% 701 606 15.6% 57.3% 53.3% 402

Heathrow express

36 34 5.1% 3 3 5.3% 9.2% 9.2% 1

Adjustments

-25 -22 n.s.

n.s. n.s.

Heathrow SP 35.1 34.4 1.9% 1,234 1,149 7.4% 704 610 15.6% 57.1% 53.0% 404

Glasgow 3.5 3.3 4.4% 44 42 4.6% 14 12 13.8% 32.0% 29.4% 256

Aberdeen 1.8 1.6 8.2% 31 28 11.4% 11 10 9.2% 36.3% 37.0% -75

Southampton 0.8 0.8 5.7% 13 12 2.6% 3 3 -3.9% 22.4% 23.9% -153

Non Designated 6.1 5.8 5.7% 87 82 6.7% 28 26 9.9% 32.1% 31.2% 94

Adjustments

-3 -1 n.s. -23 -2 n.s. n.s. n.s. HAH total 41.1 40.2 2.5% 1,319 1,230 7.2% 710 633 12.1% 53.8% 51.5% 235


10

Profit & Loss account

GBP Jun-14 Jun-13 Var. Like-for-Like

(%)

Revenues 1,319 1,230 7.2% 7.2%

EBITDA 710 633 12.1% 12.1%

EBITDA margin % 53.8% 51.5%

Depreciation 281 263 7.1% 7.1%

EBIT 428 370 15.7% 15.7%

EBIT margin % 32.5% 30.1%

Impairments & disposals 0 0 n.s. n.a.

Financial results -341 -490 30.4% -0.6%

EBT 87 -120 172.9% n.s.

Corporate income tax -23 126 -118.2% -164.3%

Result from discontinued

operations 1 350 -99.6% n.a.

Net income 64 356 -81.5% n.s.

Contribution to Ferrovial

equity accounted result (€)

20 140 -85.7% n.s.

HAH posted revenue and EBITDA growth of 7.2% and 12.1% respectively

as a reflection of a 10.5% increase in aeronautical revenues, driven by

the tariff increase (+10.4% at Heathrow in April 2013) and the growth in

passenger traffic (+2.5%); retail revenues rose by 3.7% and Other

revenues by 1.0%.

Revenue breakdown

GBP jun-14 jun-13 Var. Like-for-

Like (%)

Aeronautic 814 736 10.5% 10.5%

Retail 262 252 3.7% 3.7%

Others 243 241 1.0% 1.0%

TOTAL 1,319 1,230 7.2% 7.2%

Aeronaut Retail Other

GBP Jun-14 LfL (%) Jun-14 LfL (%) Jun-14 LfL (%)

Heathrow 767 10.8% 237 3.6% 230 0.9%

Glasgow 22 4.1% 14 4.9% 8 5.6%

Aberdeen 17 13.8% 6 7.0% 8 10.0%

Southampton 7 -1.6% 4 12.4% 1 1.4%

Adj & others

-3 n.s.

Total airports

814 10.5% 262 3.7% 243 1.0%

Aeronautical revenues increased by 10.8% at Heathrow, thanks to the

combination of the higher passenger traffic and the tariff increase in April

2013 (+10.4%). Average aeronautical revenues per passenger grew by

8.5% to GBP21.87 (vs. GBP20.15 in 2013).

At Heathrow, retail revenue growth reached 3.6%. Net retail revenues

per passenger increased by 2.2% to GBP6.42, probably affected by the

higher proportion of European traffic, which has traditionally had less

propensity to spend money in Heathrow’s retail outlets, and the strength

of sterling against other currencies in recent months, plus the faster

growth of domestic traffic.

Regulatory aspects

Regulatory asset base (RAB)

RAB stood at GBP14,871mn in June (vs. GBP14,585mn in December

2013), reflecting the investment made (GBP470mn), the increase in

inflation (GBP170mn), partially offset by depreciation during the quarter

(GBP325mn).

New regulatory period

The new regulatory period (Q6) started on 1 April 2014 and lasts until 31

December 2018. The CAA approved a maximum annual tariff increase per

passenger of RPI -1.5%.

Airport Commission

At the end of 2013, the Airport Commission led by Sir Howard Davies

included Heathrow’s proposal for a new runway to the northeast of the

airport as one of the possible alternatives to increase capacity in the

southeast of the UK. In May 2014, HAH presented a more detailed

proposal. With this proposal, the airport’s capacity would increase to 130

million passengers a year vs. the current level of 80 million. The

investment is estimated to amount to GBP16bn over a period of 15 years.

The Commission is expected to publish its conclusions at the end of the

summer in 2015.

Net debt

GBP jun-14 dic-13 Var.

Senior loan facility 497 496 0.1%

Subordinated 755 754 0.1%

Securitized Group 11,568 11,119 4.0%

Non-Securitized Group 330 325 1.6%

Other & adjustments -22 -12 n.s.

Total 13,129 12,683 3.5%

At 30 June 2014, Heathrow’s average cost of external debt stood at

5.75%, taking into account all the costs of hedging for interest rates,

foreign exchange and inflation.

Dividends

In the first half of 2014, HAH distributed GBP135mn in dividends vs.

GBP128mn in the same period last year. The total dividend payable in

2014 is estimated at GBP270mn. In 2013, HAH paid its shareholders

GBP255mn, and GBP240mn in 2012.


11

CONSOLIDATED PROFIT & LOSS ACCOUNT

Before Fair

value Adjustments

Fair value

Adjustments Jun-14

Before Fair

value Adjustments

Fair value

Adjustments Jun-13

Revenues 4,159

4,159 3,732

3,732

Other income 3

3 5

5

Total income 4,163

4,163 3,737

3,737

COGS 3,728

3,728 3,322

3,322

EBITDA 435

435 415 415

EBITDA margin 10.5%

10.5% 11.1%

11.1%

Period depreciation 120

120 113

113

EBIT (ex disposals & impairments) 315

315 302 302

EBIT margin 7.6%

7.6% 8.1%

8.1%

Disposals & impairments 0

0 21 21

EBIT 315

315 323 323

EBIT margin 7.6%

7.6% 8.7%

8.7%

FINANCIAL RESULTS -206 39 -167 -219 33 -186

Financial result from financings of infrastructures projects -172

-172 -169

-169

Derivatives, other fair value adjustments & other financial result from infrastructure projects -5 -2 -7 -3 9 6

Financial result from ex infra projects -17

-17 -30

-30

Derivatives, other fair value adjustments & other ex infra

projects -13 41 29 -18 24 7

Equity-accounted affiliates 49 0 49 212 -32 180

EBT 158 40 197 316 2 318

Corporate income tax -40 -12 -52 -41 -9 -51

Net Income from continued operations 118 28 146 274 -8 267

Net income from discontinued operations

CONSOLIDATED NET INCOME 118 28 146 274 -8 267

Minorities 23

23 21 0 20

NET INCOME ATTRIBUTED 141 28 168 295 -8 287


12

REVENUES

Jun-14 Jun-13 Var. Like-for-Like (%)

Construction 1,804 1,859 -3.0% 0.7%

Airports 3 4 -21.3% -21.3%

Toll Roads 200 206 -3.0% -2.3%

Services 2,125 1,655 28.4% 25.7%

Others 28 8 258.4% 245.3%

Total 4,159 3,732 11.5% 12.5%

EBITDA

Jun-14 Jun-13 Var. Like-for-

Like (%)

Construction 153 154 -0.9% -0.1%

Airports -7 -6 -9.7% -14.7%

Toll Roads 123 125 -1.8% 3.0%

Services 158 138 14.7% 11.6%

Others 8 4 108.1% -38.5%

Total 435 415 4.8% 3.5%

DEPRECIATION

Depreciation was higher than in the same period last year (+6.4% LfL) at

EUR120mn.

EBIT (before impairments and disposals of fixed assets)

Jun-14 Jun-13 Var. Like-for-Like (%)

Construction 137 140 -2.3% -2.0%

Airports -7 -6 -10.2% -15.1%

Toll Roads 86 91 -5.6% 0.4%

Services 94 76 24.9% 18.5%

Others 5 2 138.8% -53.3%

Total 315 302 4.3% 2.2%

For comparative purposes, all comments refer to EBIT before impairments and

disposals of fixed assets.

IMPAIRMENTS AND DISPOSALS OF FIXED ASSETS

In 2013, this heading included the EUR20mn capital gain on the sale of

Amey’s joint ventures.

FINANCIAL RESULT

Jun-14 Jun-13 Var.

Infrastructure projects -172 -169 -1.9%

Ex infra projects -17 -30 45.0%

Net financial result (financing) -189 -199 5.2%

Infrastructure projects -7 6 -210.2%

Ex infra projects 29 7 n.s.

Derivatives, other fair value adjustments & other financial result

22 13 70.2%

Financial Result -167 -186 10.4%

The financial result improved by 10.4%, due to the combined effect of:

Lower financing costs excluding infrastructure projects, principally due to

the inclusion in 2013 of EUR16mn for accelerated depreciation of the

origination fees on the bank loans cancelled with the proceeds of the

bond issuance.

The movements in the financial result for the derivatives and other was

mainly determined by the performance of the derivatives linked to the

share price, which rose from EUR14.07/share in December 2013 to

EUR16.27/share at the end of June.

EQUITY-ACCOUNTED RESULTS

Jun-14 Jun-13 Var.

Construction -2 -1 -151.0%

Services 12 6 107.1%

Toll Roads 18 35 -47.1%

Airports 20 140 -85.7%

Total 49 180 -72.8%

The companies consolidated by the equity method contributed EUR49mn

net of tax (vs. EUR180mn in 2013). The 2013 result included a number of

non-recurrent items at HAH, principally the capital gain on the sale of

Stansted Airport (EUR138mn).

TAXATION

The effective tax rate was 26%. Excluding the equity-accounted results,

which are added net of tax, the rate would have been 35%.

NET RESULT

The group posted a net profit of EUR168mn (vs. EUR287mn in 2013).

The lower figure was due to the inclusion in the 2013 results of non-

recurrent items such as the sale of Stansted airport and the capital gain

on the disposal of Amey’s joint ventures.


13

BALANCE SHEET AND OTHER MAGNITUDES

Jun-14 Dec-13

FIXED AND OTHER NON-CURRENT ASSETS 17,821 17,202

Consolidation goodwill 1,929 1,893

Intangible assets 206 229

Investments in infrastructure projects 8,154 7,639

Property 38 37

Plant and Equipment 456 483

Equity-consolidated companies 3,517 3,562

Non-current financial assets 1,876 1,870

Receivables from Infrastructure assets 1,399 1,341

Financial assets classified as held for sale 1 1

Restricted Cash and other non-current assets 351 377

Other receivables 126 152

Deferred taxes 1,441 1,344

Derivative financial instruments at fair value 203 144

CURRENT ASSETS 5,893 5,618

Assets classified as held for sale 2 2

Inventories 325 325

Trade & other receivables 2,397 2,202

Trade receivable for sales and services 1,768 1,635

Other receivables 527 470

Taxes assets on current profits 103 98

Cash and other financial investments 3,162 3,070

Infrastructure project companies 455 279

Restricted Cash 62 41

Other cash and equivalents 393 238

Other companies 2,707 2,791


TOTAL ASSETS 23,714 22,820

EQUITY 5,940 6,074

Capital & reserves attributable to the Company´s equity holders 5,631 5,719

Minority interest 309 355

DEFERRED INCOME 742 503

NON-CURRENT LIABILITIES 11,736 11,230

Pension provisions 121 107

Other non current provisions 1,355 1,350

Financial borrowings 7,744 7,496

Financial borrowings on infrastructure projects 6,648 6,403

Financial borrowings other companies 1,097 1,093

Other borrowings 215 208

Deferred taxes 1,176 1,117

Derivative financial instruments at fair value 1,125 952

CURRENT LIABILITIES 5,296 5,013

Financial borrowings 1,331 1,303

Financial borrowings on infrastructure projects 1,267 1,228

Financial borrowings other companies 64 75


Trade and other payables 3,479 3,254

Trades and payables 2,698 2,665

Deferred tax liabilities 98 60

Other liabilities 683 528

Trade provisions 404 389

TOTAL LIABILITIES & EQUITY 23,714 22,820


14

Net debt

The net cash position excluding infrastructure projects stood at

EUR1,599mn (vs. EUR1,675mn in December 2013). The net cash position

was more favourable in the first half of 2014 than in the same period last

year, when it declined by EUR1,046mn, reflecting a better working capital

performance, lower investment and a different dividend payment

calendar.

In the first half of the year, Ferrovial made net investments (excluding

infrastructure projects) amounting to EUR61mn.

In January 2014, Ferrovial paid over the withholding tax applied to the

dividend paid in December 2013, amounting to EUR36mn vs. the

EUR85mn paid in the previous financial year.

Cash generation was less seasonal in the first half of the year, principally

in the international Construction business and the Services activity in

Spain.

Net project debt stood at EUR7,162mn, slightly higher than in December

2013, reflecting the impact of exchange-rate movements and the

investment made in the construction of the various projects under

development. This net debt includes EUR1,661mn of net debt related to

toll roads under construction (the NTE, LBJ and NTE 3A3B). It also

includes EUR1,163mn of debt related to the two toll roads (R4 and OLR)

that are in insolvency proceedings.

The Group’s consolidated net debt stood at EUR5,563mn.

jun-14 dic-13

NCP ex-infrastructures projects 1,599 1,675

Toll roads -6,835 -6,710

Others -327 -317

NCP infrastructures projects -7,162 -7,027

Net Cash Position -5,563 -5,352

Credit rating

In August 2011, the credit rating agencies Standard & Poor’s and Fitch

Ratings published their opinions on Ferrovial’s credit for the first time; in

both cases the rating was investment grade.

Standard & Poor’s upgraded Ferrovial’s rating from BBB- to BBB on May

2013.

Fitch Ratings upgraded Ferrovial’s credit rating from BBB- to BBB in July

2014.

Rating Agency Rating Outlook

S&P BBB Estable

FITCH BBB Estable

2013 dividend

At a meeting held on 28 October 2013, the Board agreed to distribute a

gross dividend of EUR0.40/share on account for 2013. Payment of this

dividend was made on 10 December 2013.

Ferrovial Flexible Dividend

At Ferrovial’s AGM held on 26 June, the shareholders approved a capital

increase fully charged to reserves.

The capital increase was approved by the AGM as a way of introducing a

new flexible system of shareholder remuneration, the Ferrovial Flexible

Dividend, in place of what would have been the traditional payment of a

supplementary dividend for 2013.

The purpose of this scheme is to offer all Ferrovial’s shareholders the

option – at their choice – of receiving new shares in the company,

without this affecting the company’s policy of distributing cash to its

shareholders, as they have the alternative of receiving cash by selling the

free warrants that they receive for the shares that they already own to

the company (or in the market).

The fixed price for the purchase of warrants guaranteed by Ferrovial was

EUR0.291 per warrant. The number of free warrants needed for one new

share was 55.

At the close of the trading period for the warrants, the number of new

shares issued was 5,911,393, taking the issued share capital to

739,421,648 shares, each with a nominal value of EUR0.20.


15

Corporate bond issuance

In July, Ferrovial issued a EUR300mn 10-year bond that was closed at

113 basis points over mid-swap, with a coupon of 2.5%.

With this bond and the issuance in 2013, Ferrovial has optimised the

maturity profile of its corporate debt and reduced its cost.

In January 2013, Ferrovial made its inaugural issuance with a EUR500mn

five-year bond that closed at a price of 240 basis points over mid-swap,

with a coupon of 3.375%.

In May 2013, it issued another EUR500mn with a coupon of 3.375%, this

time at eight years, which closed at a price of 200bp over mid-swap.

Year Corporate debt maturing

2014 44

2015 42

2016 19

2017 11

2018 501

2019 5

2020

2021 - 2030 503

2031 - 2040 7

2041 - 2050 0


16

CONSOLIDATED CASH FLOW

jun-14

Ex-infrastructure

projects

Infrastructure projects

Adjustments Total

EBITDA 251 184 435

Dividends received 165 -6 159

Working capital -339 40 -298

Operating flow (before taxes) 77 225 -6 296

Tax payment -5 -3 -7

Operating cash flow 72 222 -6 289

Investment -82 -169 42 -208

Divestment 21 -13 8

Investment cash flow -61 -169 29 -201

Activity cash flow 12 53 23 88

Interest flow -30 -123 -152

Capital flow from Minorities 0 56 -29 27

Dividend payment -65 -9 6 -69

Forex impact 12 -28 -17

Deconsolidated Debt of assets classified as held for sale/ Perimeter changes/ Equity acc.

Other (non-cash) -5 -84 -89

Financing Cash Flow -88 -188 -23 -299

Net debt variation -76 -135 -211

Net debt initial position 1,675 -7,027

-5,352

Net debt final position 1,599 -7,162

-5,563

jun-13

Ex-

infrastructure projects

Infrastructure

projects Adjustments Total

EBITDA 242 173 415

Dividends received 139 -4 135

Working capital -522 -25 0 -547

Operating flow (before taxes) -140 147 -4 3

Tax payment -14 -7 -21

Operating cash flow -154 140 -4 -18

Investment -603 -309 55 -856

Divestment 46 46

Investment cash flow -557 -309 55 -811

Activity cash flow -711 -168 51 -828

Interest flow -13 -130 -143

Capital flow from Minorities 0 96 -55 41

Dividend payment -273 -4 4 -273

Forex impact -31 -44 -75

Deconsolidated Debt of assets classified as held for sale/ Perimeter changes/ Equity acc.

17 -17

Other (non-cash) -34 -41 0 -75

Financing Cash Flow -334 -140 -52 -526

Net debt variation -1,046 -309 0

-1,354

Net debt initial position 1,484 -6,595 0

-5,111

Net debt final position 438 -6,903 0

-6,465


17

Cash flow excluding infrastructure projects

OPERATING FLOW

The breakdown of cash flow from operations by division excluding

infrastructure projects is shown in the table below (June 2014 vs. June

2013):

Operating cash flow jun-14 jun-13

Construction -41 -191

Services 11 -30

Dividends from Toll roads 114 77

Dividends from Airports 41 50

Other -49 -47

Operating flow (before taxes) 77 -140

Tax payment -5 -14

Total 72 -154

The Other element includes the operating flows relating to the

Corporation and the parent companies of the Airports and Toll Roads

divisions.

The significant EUR217mn improvement in the operating flow before

taxes in 2014 vs. 2013 was due to the better working capital

performance: the deterioration was reduced from EUR522mn in 2013 to

EUR339mn in June 2014. The improvement in Construction was

particularly marked, as was the increase in dividends received from the

toll road projects.

In the first half, the figures include payments received under the supplier

payment plan totalling EUR49mn at the Construction division and

EUR26mn at the Services division.

The table below shows the detail of the flows at the Construction and

Services divisions:

Construction jun-14 jun-13

EBITDA 147 148

Settlement of provisions from completed

works -48 -84

Adjusted EBITDA 99 64

Changes in factoring -41 9

Ex Budimex Working Capital 25 -140

Budimex Working Capital -123 -123

Operating Cash Flow before Taxes -41 -191

Services jun-14 jun-13

EBITDA 126 114

Dividends received 10 12

Changes in factoring 0 0

Pensions payments UK -10 -9

Ex UK Working Capital -24 -66

UK Working Capital -90 -81

Op. cash flow ex-Taxes 11 -30

The breakdown by business area in the Services division is shown in the

following table:

Spain UK Rest of

Services Services

EBITDA 61 63 2 126

Dividends 3 7 0 10

Pension scheme payments 0 -10 0 -10

Working capital -13 -90 -12 -115

Op. cash flow ex-Taxes 52 -31 -9 11

At the Toll Roads division, the operating flow in 2014 includes EUR114mn

from dividends and capital repayments from the companies holding the

toll road infrastructure projects, as shown in the table below:

Dividends and Capital reimbursements

jun-14 jun-13

ETR 407 110 74

Irish toll roads 3 3

Portuguese toll roads 0 0

Greek toll roads 0 1

Spanish toll roads 1 1

Other 0 0

Total 114 77

INVESTMENT FLOW

The following table shows the breakdown by business segment of the

investment flow excluding infrastructure projects, in each case

distinguishing between outflows for investments and inflows from

disposals.

jun-14 Investment Divestment Investment

Cash Flow

Construction -10 2 -8

Services -26 15 -11

Toll roads -45 0 -45

Airports 0 -2 -2

Others -1 6 5

Total -82 21 -61

jun-13 Investment Divestment Investment

Cash Flow

Construction -21 1 -20

Services -525 49 -476

Toll roads -56 0 -56

Airports 0 -4 -4

Others -2 0 -2

Total -603 46 -557

The lower level of investment in 2014 vs. 2013 reflects the acquisition of

the UK company Enterprise in the first half of 2013 for EUR474mn, and

the Chilean company Steel Ingeniería for EUR29mn.

In 2014 the highlights include the capital investments made in the

infrastructure projects (US toll roads under construction); and also the

investment in material fixed assets, principally at the Services division.


18

The disposals in 2014 were mainly small sales of machinery at the

Construction division and sales of land.

In 2013, it was the Services division that stood out, due to the sale of

40% of Amey’s JVs for EUR44mn and Ecocat for EUR5mn.

Equity investment in toll roads jun-14 jun-13

LBJ -10 -34

NTE -16 -20

NTE 3A&B -8 -1

SH-130 -2 0

Spanish toll roads -5 -1

Portuguese toll roads -4 0

Greek toll roads 0 0

Others 0 0

Total -45 -55

FINANCING FLOW

Included in the financing flow are the dividend flows, which in the first six

months of 2014 corresponded to the dividend payment to the Budimex

minorities (EUR30mn) and the payment in January 2014 of the

withholding tax applied to the dividend paid in December 2013,

amounting to EUR36mn vs. the EUR85mn paid to June last year.

Note also the net interest payment of EUR30mn due to the payment of

the annual coupons on the bond issuance in January and June. This

figure is higher than the figure recognised in the P&L, because the latter

only reflects the accrual for the first six months of the year.

Cash flow at infrastructure projects

OPERATING FLOW

As regards the operating flow from the infrastructure concession

companies, this basically includes the entry of funds at the companies

that are in operation, although it also includes the VAT payments and

refunds at those in the construction stage. The table below shows a

breakdown of the operating flows for the infrastructure projects:

jun-14 jun-13

Toll roads 159 114

Other 63 26

Operating flow 222 140

INVESTMENT FLOW

Note the investment in assets under construction at the Toll Roads

division in 2014, particularly in the USA (NTE and LBJ).

Investment cash flow jun-14 jun-13

LBJ -169 -201

North Tarrant Express -162 -160

North Tarrant Express 3A3B -33 0

SH-130 -1 -4

Portuguese toll roads -1 -2

Spanish toll roads -1 0

Chicago 0 -1

Other 0 0

Total toll roads -369 -368

Other -41 -7

Projects total -410 -375

Equity Subsidy 241 66

Total investment cash flow (projects) -169 -309

FINANCING FLOW

The financing flow reflects the dividend payments and capital repayments

made by the concession companies, as well as the capital increases

received by these companies. In the case of the concession companies

the Group consolidates by global integration, these amounts correspond

to 100% of the amounts disbursed and received by the concession

companies, independent of the size of the Group’s stake. It does not

include any dividends or capital repayments relating to the companies

that are consolidated by the equity method.

The interest flow corresponds to the interest paid by the concession

companies, as well as other commissions and costs that are closely

related to obtaining financing. The flow for these items corresponds to

the interest expense relating to the period, as well as any other item that

implies a direct variation in net debt during the period. The amount does

not coincide with the financing result in the P&L, fundamentally due to

differences between accrual and payment of interest.

Interest Cash Flow jun-14 jun-13

Spanish toll roads -32 -31

US toll roads -56 -64

Portuguese toll roads -13 -14

Other toll roads -8 -7

Total toll roads -109 -116

Other -14 -14

Total -123 -130

Additionally, the financing flow includes the impact of exchange-rate

movements on foreign currency denominated debt (-EUR28mn in the

year to June 2014), fundamentally due to the appreciation of the US

dollar vs. the euro, which has had a significant impact on the net debt of

the US toll roads.

Finally, under the heading Other non-cash movements in debt, are

included those items that result in a variation in accounting debt, but

imply no real cash movement, such as the case of unpaid interest

accrued, etc.


19

APPENDIX I: SIGNIFICANT EVENTS

Ferrovial announces the proposals adopted by the 2014 AGM.

(26 June, 2014)

Events after the close

Fitch Ratings upgraded its long-term rating for Ferrovial, S.A.

from BBB - to BBB with stable Outlook.

(7 July, 2014)

Ferrovial successfully places a EUR300mn bond issue,

maturing on 15 July 2024.

(8 July, 2014)

Ferrovial Emisiones, S.A., a Ferrovial subsidiary, successfully

completed the pricing of a EUR300mn bond issue maturing on 15 July

2024, guaranteed by Ferrovial, at 99.459% of nominal. The bonds pay

an annual coupon of 2.5%. Ferrovial expects net proceeds of

approximately EUR297,177mn, which it expects to apply to general

corporate needs.

Ferrovial announces the subscription and disbursement of the

EUR300mn bond issue, maturing on 15 July 2024.

(15 July, 2014)

Continuing with the information published on 8 July 2014, Ferrovial

announces that as of 15 July 2014 the subscription and disbursement

of the bonds by investors has taken place. The company has

requested that the bonds be admitted into negotiation at the AIAF

fixed income markets (AIAF). The bonds are expected to be admitted

into negotiation prior to 15 August 2014, once the CNMV approves

and registers the prospectus that has been written in accordance with

international standards for new issues.

Ferrovial announces the end of the negotiation period for the

warrants issued corresponding to the capital increase which

instruments the shareholder remuneration program

“Ferrovial Flexible Dividend”.

(17 July, 2014)

At the end of the negotiating period, the owners of 44.32% of the

warrants (325,126,615 warrants) have chosen to receive new

Ferrovial shares as remuneration. The final number of ordinary shares

with a unitary nominal value of EUR0.2 issued in the capital increase

is 5,911,393. The owners of 55.68% of the warrants have sold them

to Ferrovial which has acquired a total of 408,383,606 warrants

(118,839,629.35 Euros). The capital increase was closed on 17 July

2014.

APPENDIX II: PRINCIPAL CONTRACT AWARDS

CONSTRUCTION

SPAIN

Olivar highway, Puente del Obispo junction, Jaén.

75 residential units in Tres Cantos, Madrid.

169 residential units in Balcón de San Lázaro, Zaragoza.

Installation of tracks for the AVE high-speed train, Valladolid-Palencia.

Platform improvements on Line 12 of the Madrid Metro.

Urban and infrastructure integration works for the Granada Metro.

West dock platform in the port of Palma de Mallorca.

Secondary school in Santa Eularia des Riu, Ibiza.

Railway infrastructure Legutiano-Escoriatza in the Basque country.

Multipurpose building in Fuerteventura.

Psycho-geriatric centre in Pamplona.

Industrial premises for Renault España, Palencia.

BUDIMEX

Completion of the S5 Poznan-Wroclaw highway.

Railway station in Bydgoszcz.

Palacio de Congresos en Lublin.

National Road N 21, Slupsk.

Expansion of Szczecin-Goleniów Airport.

Tram station in Olsztyn.

Industrial distribution centre for JMP SA.

Tram remodelling, Gdansk.

Completion of the A1 highway in Lodz.

Road-widening works on the N747 Ilza-Konopnica.

Logistics area for the Michelin Olsztyn factory.

INTERNATIONAL

Design and construction of the Warrell Creek-Nambucca toll road,

Australia.

Los Condores hydroelectric project, Chile.

FM 423 highway in Denton, Texas, USA.

Traffic improvement works in Sancrox, Australia.

Improvements to the PR18/PR21 intersection, Puerto Rico.

New link road in Florianopolis, Brazil.

Stafford-Sugarland toll road, USA.

SERVICES

SPAIN

Street cleaning, selective urban waste collection in Barcelona.

Street cleaning and urban waste collection in the municipality of

Almendralejo, Badajoz.

New maintenance contract for OAMI offices and headquarters (Office

for the Harmonisation of the Internal Market), in Alicante.

Parks and gardens maintenance in the metropolitan area of Barcelona.

Cleaning, logistics, maintenance and auxiliary production services for

the saloon car production line at the Michelin plant in Vitoria.

Extension of the service contract for street cleaning and waste

collection in Sitges, Barcelona.

Extension of the street cleaning and urban waste collection

contraction for Pontevedra.


20

UK

Renewal of the switches and crossings on the railway infrastructure in

Scotland, North Wales, East Midlands, London North East and London

North West (Amey Sersa).

Maintenance management of service quarters in the UK.

New maintenance contract for the toll roads in South East Scotland

(STRU SE).

New contract for maintenance of military infrastructure in Scotland

and Northern Ireland.

INTERNATIONAL

New contract for integrated services and leasing of permanent support

teams for the Ministro Hales mine, Chile.

Extension of maintenance services for Doha airport (Qatar).

New integrated services contract for earth moving and mine waste

dumping in the municipality of Talabre, Chile.

New conservation contract for the S7 toll road in Poland.

Industrial cleaning oriented towards the removal of extraction

/processing waste from the Gabriela Mistral mine, Chile.

Renewal of the office cleaning contract for Vodafone, Portugal.

APPENDIX III: EXCHANGE-RATE MOVEMENTS

Exchange-rate Last

(Balance sheet) Change%

14/13 Exchange-rate Mean

(P&L) Change%

14/13

GBP 0.8005 -3.82%

0.8179 -4.14%

US Dollar 1.3690 -0.72%

1.3714 4.66%

Canadian Dollar 1.4603 -0.36%

1.5009 11.95%

Polish Zloty 4.1577 0.05%

4.1789 -0.86%

Exchange rate expressed in units of currency per euro, with negative variations implying euro depreciation and positive variations euro appreciation.

INVESTOR RELATIONS DEPARTMENT

ADDRESS: PRÍNCIPE DE VERGARA 135 - 28002 MADRID

TELEPHONE: +34 91 586 25 65

FAX: +34 91 586 26 89

E-MAIL: [email protected]

WEB: HTTP://WWW.FERROVIAL.COM

Important information

This document contains statements regarding the Company’s future intentions, expectations and forecasts at the time of writing. These statements are

based on projections and financial estimates with underlying assumptions, announcements relating to plans, objectives and expectations that refer to

various aspects, including the growth of the various lines of business and the global business, market share, the Company’s results and other aspects

relating to its activities and situation.

These estimates, projections and forecasts are not in themselves guarantees of future performance as they are subject to risks, uncertainties and other

important factors that could result in the development and final results differing from those contained in these estimates, projections and forecasts.

This should be taken into account by all individuals or institutions that might have to take decisions or form or transmit opinions relating to stocks and

shares issued by the Company, and in particular, by the analysts and investors who consult this document. All interested parties are invited to consult

the documentation and information publicly available or filed by the Company with stock market supervisory authorities and, in particular, the

information filed with the CNMV (the Spanish stock market regulator).

January-June 2014 Financial Results

Investor Relations

Transcript of January-June 2014 Financial Results