CONSOLIDATED PROFIT AND LOSS ACCOUNT

REVENUES

EBITDA

DEPRECIATION

In 2017, depreciation increased by +9.6% (+7.1% LFL) to EUR375mn.

EBIT

(Before impairments and disposals of fixed assets)

IMPAIRMENTS & DISPOSALS

Impairments and disposals of fixed assets amounted to +EUR81mn at the end of 2017, accounted for by the additional impairment applied to Autema (-EUR29mn) and the capital gains on the sale of Norte Litoral (EUR48mn) and Algarve (EUR42mn). This figure stood at +EUR324mn in 2016, as it was affected by the capital gains relating to the disposals in Chicago Skyway and the Irish toll roads.

FINANCIAL RESULT

Financial expenses in 2017 were lower in EUR80mn vs. 2016, as a combination of the following impacts:

• Financing result: EUR70mn drop in expenses to -EUR284mn. The change compared with 2016 was primarily due to changes in the consolidation perimeter in the infrastructure projects:
  • Deconsolidated assets in 2016:
  • Deconsolidation of Chicago Skyway (two months’ contribution in 2016, generating EUR21mn in costs).
  • Deconsolidation of the SH-130 toll road (deconsolidated at the close of 2016, contributed EUR13mn in costs that year).
  • Deconsolidation of debt in Irish toll roads (two months’ global consolidation in 2016, generating EUR3mn in costs).
  • Deconsolidated assets in 2017:
  • Deconsolidation of debt in Norte Litoral (four months’ global consolidation in 2017 vs. 12 months contribution in 2016, generating EUR7mn lower financial expenses).
  • Deconsolidation of debt in Algarve (nine months’ global consolidation in 2017 vs. 12 months contribution in 2016, generating EUR4mn lower financial expenses).
• Result from derivatives and others: EUR10mn drop in financial expenses to -EUR27mn in 2017 vs. -EUR37mn in financial expenses in 2016, comprised of:
  • As regards infrastructure projects, EUR14mn less in financial expenses due mainly to the extraordinary negative impact caused in 2016 by the cancellation of the Ausol derivative, the result of the refinancing carried out in respect of this asset.
  • In the ex-infrastructure projects related category, -EUR4mn in costs, mainly resulting from financial restructuring processes, notable among which are the cancellation of the Broadspectrum high yield bonds (with an annual cost of 8.375%). Following the restructuring, the average cost of Broadspectrum stood below 6%.

EQUITY-ACCOUNTED RESULTS

At the net profit level, the equity-accounted consolidated assets contributed EUR251mn after tax (EUR82mn in 2016).

This improvement was due to the recovery of Heathrow’s contribution (+EUR87mn as compared with -EUR57mn in 2016, due to the negative impact of the fair value of the derivatives) and the positive performance of Toll Roads (net profit at 407 ETR rose by +26.1%). AGS’s contribution decreased compared to 2016 (EUR2mn vs. EUR12mn in 2016), primarily due to the positive non-recurrent non-cash item in 2016, due to the changes in the pension plan conditions (EUR7mn) and the two percentage point drop in tax rate to 17% (EUR6mn).

TAXES

Corporate Income Tax amounted to -EUR71mn in 2017 compared with -EUR233mn in 2016, the latter having been impacted principally by the extraordinary impact of the Chicago Skyway and the Irish toll roads divestments, figure which:

• Does not include the tax expenses corresponding to the companies accounted for using the equity method which, pursuant to accounting legislation, are presented net of its related tax effect.
• Includes a corporate tax income corresponding to previous years of EUR16mn (vs a EUR5mn expense in 2016), mainly as a consequence of the lower corporate tax rate in USA from 35% to 21%.

Excluding the result of these entities integrated through equity consolidation (net income of EUR251mn), and considering the income tax expense accrued in 2017 (-EUR87mn), the effective tax rate would reach 26.7%.

MINORITIES

The minorities figure in 2017 amounted to -EUR53mn vs. -EUR7mn in 2016. The main impacts causing this difference are:

• Greater profit at Budimex (-EUR11mn vs. 2016)
• Fewer losses at toll roads (-EUR33mn vs. 2016), as a result of the deconsolidations of SH-130 and Chicago Skyway and the improved results from Managed Lanes.

NET PROFIT

Net profit stood at EUR454mn at year-end 2017 (EUR376mn in 2016). This result includes a series of extraordinary impacts, notable among which were:

• Fair value adjustments for derivatives: +EUR69mn (this item resulted in a negative impact of -EUR150mn in 2016), primarily impacted by derivatives from HAH, as previously mentioned.
• Capital gain after tax on the sale of Norte Litoral and Algarve: +EUR98mn (+EUR124mn were earned in 2016 from the sale of the Chicago Skyway and Irish toll roads).
• Impairment at Autema: -EUR29mn (-EUR21mn in 2016).