CONSOLIDATED CASH FLOW

EX-INFRASTRUCTURE PROJECT CASH FLOW

Cash flow from ex-project operations

At year-end 2016, cash flow from ex-infrastructure project operations reached EUR995mn (pre-tax), improving on the 2015 of EUR889mn. This improvement was primarily the result of balanced contributions with higher dividends from infrastructures (+6.2%) and improved operating cash flow from Services (which improved significantly in the final quarter). This good performance has enabled the company to increase shareholder payments (EUR544mn against EUR532mn in 2015), as well as carry out the investments required for the organic growth of the company (EUR356mn).

Changes in cash flow from ex-Infrastructure project operations by segment in 2016 as compared with 2015 are shown in the following table:

The entry “Other” includes the revenues from operations corresponding to Corporate Business, Airports, Toll Roads and Real Estate, as well as remuneration systems linked to the share price of the Airports, Toll Roads and Corporate divisions.

The higher tax payments, is mainly due to the integration of Broadspectrum, which paid its tax during the seven months when it was consolidated.

The following table shows a breakdown of the cash flow from Construction and Services:

The following table shows the Services business detail:

Cash flow from Toll Roads at December 2016 includes EUR290mn from dividends and repaid shareholder equity from companies owning toll road infrastructure projects. The detail is shown in the following table.

Dividends from Airports (EUR134mn) correspond to dividends received from HAH (EUR96mn) and the regional airports (EUR38mn).

Ex-project investment cash flow

The following table shows the breakdown by business segment of investment streams, excluding Infrastructure projects, with a separate entry in each case for the amounts paid for investments undertaken and the amounts received from divestments made:

The gross investment stream of EUR985mn, is broken down as follows:

Inorganic growth investments amounted to -EUR629mn by year-end, highlighting the acquisition of Broadspectrum in the Services division (-EUR499mn) and Transchile in the Airports division for -EUR69mn.

The Company’s organic growth investments totalled -EUR356mn in 2016, including the fixed asset investments and the share capital increases in the Toll Roads division (-EUR113mn), particularly noting the US toll road under construction NTE 35W, the 407EDG toll road in Canada and the Ruta del Cacao in Colombia. It also includes the acquisition of minority stakes in the Algarve and Norte Litoral (Portugal).

The following table shows Cintra’s capital investment in infrastructure projects:

In terms of disposals in 2016, we would highlight Cintra, for the sale of the Chicago Skyway for +EUR230mn; and the Irish toll roads (+EUR59mn), as well as UK services, sale of a fleet of lorries for +EUR30mn.

As regards divestment in 2015, particular mention should be made of Cintra and its sale of ITR for a total of +EUR45mn.

Ex-project financing cash flow

Financing streams include:

• Shareholder remuneration: -EUR544mn for Ferrovial shareholders, which includes the cash payment of the scrip dividend of -EUR226mn and the share buy-back for -EUR317mn. Dividends to minorities in subsidiaries reached -EUR23mn.
• Net interest payments for the year (-EUR48mn).
• Exchange rate impact (-EUR9mn), which originates from the operating cash for the businesses outside the Eurozone and the positions held in currencies, mainly in Polish Zloty and Australian dollars (-EUR30mn), offset by exchange rate derivatives (+EUR21mn).
• Other non-cash flow debt movements (-EUR422mn), where particular mentions should be made of the consolidation of book net debt movements brought by Broadspectrum (-EUR435mn). This section also includes book debt movements that do not affect cash flow, such as interest that has been accrued and remains unpaid, mainly resulting from interest accrued from corporate bonds.

INFRASTRUCTURE PROJECT CASH FLOW

Cash flow from project operations

As regards cash flows for companies that own Infrastructure project concessions, these basically include revenues from those companies that are currently in operation, though they also include VAT refunds and payments corresponding to projects currently in the construction phase.

The following table shows a breakdown of cash flow operations for Infrastructure projects.

Project investment cash flow

The following table shows a breakdown of the investment cash flow for infrastructure projects, basically payments made in respect of capex investments over the course of the year.

As regards investment cash flow, particular mention should be made of the investment in concessions under construction in the Toll Roads business in 2016, notably in the USA (NTE Extension and I-77).

Project financing cash flow

Financing cash flow includes the payment of dividends and the repayment of equity by concessionary companies to their shareholders, along with the payments for share capital increases received by these companies. In the case of concession holders, which are fully integrated within the consolidated Group, these amounts represent 100% of the amounts paid out and received by the concession-holding companies, regardless of the percentage share that the Group holds in such concessions. No dividend or Equity repayment is included for companies accounted for by the equity method.

The interest cash flow refers to the interest paid by the concession-holding companies, together with other fees and costs closely related to the acquisition of financing. The cash flow for these items relates to interest costs for the period, along with any other item that represents a direct change in the net debt amount for the period.

The financing cash flow also includes the impact that changes in the interest rate have had on the debt held in foreign currency, which in 2016 was a negative impact in the amount of -USD111mn, mainly as the result of the appreciation of the US dollar against the euro, a circumstance that had a significant effect on the net debt figure for the American toll roads.

Finally, the entry “Other debt movements (non-cash)” (+EUR1,472mn), includes those items that represent a variation in the book debt amount but do not involve any actual cash movement; particular mention should be made of the debt reduction for the deconsolidation of the SH-130 Concession company (EUR1,421mn) and the classification of assets being held for sale of the Portuguese toll roads, which are expected to be sold in the coming months (EUR323mn), as well as the reclassification as debt of the fair value balance amount for the SH-130 derivative (-EUR143mn).