CONSOLIDATED PROFIT AND LOSS ACCOUNT

REVENUES

EBITDA

DEPRECIATION

Depreciation increased by +33.5% (+14.0% LFL) to EUR342mn.

EBIT

(before impairments and disposals of fixed assets)

DISPOSALS & IMPAIRMENTS

The impairments and disposals of fixed assets amounted to EUR324mn at year-end 2016 (EUR131mn in 2015), mainly due to the following impacts:

• The capital gain on the sale of the Chicago Skyway toll road, which amounted to +EUR259mn (before tax).
• The capital gain on the sale of the Irish toll roads, which amounted to +EUR21mn.
• Further impairments at Autema amounting to -EUR21mn.
• The positive impact (+EUR52mn) of the deconsolidation of the SH-130 toll road (reversal of accumulated losses).

FINANCIAL RESULT

Financial expenses in 2016 were less than the corresponding figure in 2015, as a combination of the following impacts:

• Financing result: EUR144mn drop in expenses to EUR354mn. The change compared with 2015 was primarily due to infrastructure projects:
• Deconsolidation of the Chicago Skyway (contributed for just two months in 2016 vs. the whole of 2015).
  • Deconsolidation of the Ireland toll road debt (since February 2016 consolidated by the equity method).
  • Deconsolidation of the OLR and R4 toll roads (February and December 2015, respectively).
  • Lower financial costs at SH-130 (Chapter 11).
  • These impacts have been partially offset by the increase in expenses after the opening of the LBJ managed lanes.
• Result from derivatives and other: EUR101mn less financial expenses (to EUR37mn), primarily due to:
  • The extraordinary negative impact brought in 2015 by the costs resulting from Ausol and SH-130, and which did not take place in 2016.
  • This impact is partially offset by greater financial expenditure for ex-projects and specifically for the equity swaps hedging linked to the remuneration packages (financial income in 2015), although this was a non-cash item. These hedges implied expenses of -EUR18mn at year-end 2016, due to the fall in the share price in 2016, compared to the positive performance in 2015, as shown in the following table:

At year-end 2016, the number of shares hedged reached 3,429,600.

EQUITY-ACCOUNTED RESULTS

At the net profit level, the equity-accounted consolidated assets contributed EUR82mn after tax (against EUR312mn in 2015).

The improvement in the Toll Roads contribution (407ETR’s EBITDA increased +17.3%) did not make up for the drop at Airports (-EUR46mn in 2016 vs. +EUR199mn in 2015), due to a double impact:

1. Heathrow’s December 2015 results included a positive non-recurrent non-cash item of +GBP237mn (EUR67mn given the 25% stake held by Ferrovial), due to changes in the pension plan conditions.
2. Negative fair value adjustments to the portfolio of interest-rate and inflation derivatives (equity-accounted contribution impacted by –EUR160mn at year-end 2016). These derivatives relate to economic hedging, not accounting, as aeronautical revenues and the value of regulated assets are positively impacted by an increase in inflation.

The contribution made by AGS remained in line with 2015, reaching EUR12mn in 2016 vs. EUR14mn the year before.

TAXES

Corporate tax amounted to -EUR233mn vs +EUR54mn at year-end 2015, which included the recognition of tax credits from prior years.

The tax rate stood at 37.9% (or 43.6% excluding equity-accounted), there are certain extraordinary effects that distort the calculation of the effective tax rate, among which we would highlight:

• Equity-accounted results (EUR82mn): companies accounted using equity method which, pursuant to accounting legislation, are presented net of the related tax effect.
• Results with no tax impact (EUR186mn):
  • Losses of fully consolidated concession companies in US, in which other companies have ownership interest and are fully consolidated. The tax credit is exclusively recognised at the percentage of Ferrovial’s ownership when paying tax under a fiscal transparency regime. Therefore, the adjustment (EUR42mn) corresponds to the tax credit attributable to the other shareholders of the company.
  • Chicago Skyway divestment result: goodwill allocated to the toll road (EUR 132mn) has been discharged as a result of the sale of the highway (thereby reducing capital gains), with no fiscal impact.

Excluding these extraordinary items, the effective tax rate would be of 32%.

NET PROFIT

Net profit stood at EUR376mn (EUR720mn in 2015). The difference is primarily due to a series of extraordinary impacts in 2016 and 2015:

• Main extraordinary impacts in 2016:
  • Positive impact of the capital gain on the sale of the Chicago Skyway: +EUR103mn; and the Irish toll roads: +EUR21mn.
  • Non-recurrent items at HAH: -EUR107mn (vs. +EUR139mn in 2015).
  • The positive impact (+EUR30mn) of the deconsolidation of the SH-130 toll road (reversal of accumulated losses).
  • Impact of fair value adjustments to derivative instruments: -EUR31mn (vs. -EUR53mn in 2015).
  • Impact of the impairment at the Autema toll road: -EUR21mn (vs. –EUR54mn in 2015).
• Additionally, in 2015: There was an extraordinary positive impact due to the removal from the perimeter of Ocaña-La Roda and R4 (EUR+122mn).