CONSOLIDATED CASH FLOW

EX-INFRASTRUCTURE PROJECT CASH FLOW

Ex-infrastructure activity cash flow*:

The ex-infrastructure pre-tax cash flow figures are as follows:

Cash flow from ex-infrastructure operations

At end-December 2017, cash flow from ex-infrastructure project operations reached EUR999mn (pre-tax), improving on 2016 of EUR995mn, impacted by the significant increase in dividends received from the main infrastructure projects: 407 ETR (EUR262mn, +7.6% vs. 2016), HAH (EUR153mn, +59.6%) and AGS (EUR84mn vs EUR38mn 2016, after the refinancing carried out in 1Q 2017).

Changes in cash flow from ex-infrastructure project operations by segment in 2017 as compared with 2016, are shown in the following table:

The entry “Others” includes the operations cash flow corresponding to Corporate Business, headquarters of Airports, Toll Roads and Real Estate, as well as remuneration systems linked to the share prices of Airports, Toll Roads and Corporate divisions.

Breakdown of cash flow from Construction and Services:

The following table shows a breakdown of the Services business:

Breakdown of cash flow from Toll Roads and Airports:

The dividends from Toll Roads operations amounted to EUR277mn in 2017, resulting from dividends and repaid shareholder equity from companies owning toll road infrastructure projects. The 2017 figure (EUR277mn) was less than the amount received in 2016 (EUR290mn) due to the sale of stakes in the Portuguese toll roads (EUR9mn in 2017 vs. EUR37mn in 2016), although this was partially offset by the higher dividend from 407 ETR (EUR262mn vs. EUR244mn in 2016).

Distributions to shareholders from Airports (EUR237mn) correspond to dividends received from HAH (EUR153mn) and AGS (EUR84mn). Of particular Note as regards the second of these two figures is the extraordinary dividend paid following the refinancing obtained in 1Q 2017 (EUR43mn in extraordinary dividends corresponding to Ferrovial).

Ex-project investment cash flow

The following table shows the breakdown by business segment of investment cash flow, 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 net investment cash flow in 2017 (-EUR102mn) includes:

• EUR59mn received after the sale of 1 million shares in Budimex (equivalent to 3.9% of the company’s share capital), having no impact on Ferrovial’s Profit and Loss Account as it retains a controlling share in the company (55.1%).
• EUR104mn received for the 51% stake in Norte Litoral and EUR58mn for 49% of Algarve.

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

Ex-infrastructure financing cash flow

Financing cash flows include:

• Shareholder remuneration cash flow: -EUR520mn for Ferrovial shareholders, which includes the cash payment of the scrip dividend of -EUR235mn and the share buy-back for -EUR285mn. Dividends to minorities in subsidiaries also reached -EUR48mn.
• Net interest payments for the year (-EUR32mn).
• FX impact (-EUR43mn), which originates from the operating cash for the businesses outside the Eurozone and the positions held in currencies, mainly in American and Canadian dollars (-EUR147mn), offset by exchange rate derivatives (+EUR103mn).
• Other non-cash flow related movements (+EUR506mn), which 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. This entry also includes the cash flow obtained from the hybrid subordinated bond issue (+EUR500mn), treated as an equity instrument.

INFRASTRUCTURE PROJECT CASH FLOW

Operating cash flow from infrastructure projects

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.

Infrastructure projects investment cash flow

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

Infrastructure projects financing cash flow

Projects 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 Ferrovial, these amounts represent 100% of the amounts paid out and received by the concession-holding companies, regardless of the percentage share that the Company 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 2017 was a positive impact in the amount of EUR398mn, mainly as the result of the depreciation of the US dollar against the euro, a circumstance that had a significant effect on the net debt figure for the American toll roads.