Results GENERAL OVERVIEW

Transcription

1 January-September 2014 Results TOLL RO ADS S E R V I C E S C ONSTRUCTION A I R P O R T S GENERAL OVERVIEW The results of the first nine months of 2014 show revenue growth of 10.2% to EUR6,488mn, principally driven by the Services division as a consequence of its organic growth through contributions from new contracts (+7.8%) and the consolidation of Enterprise for nine months versus six months in In like-for-like terms, revenue growth was 10.2% and EBITDA 9.3%. Important milestones during the period include: the issuance of Ferrovial s third corporate bond for EUR300mn with a 10-year maturity and a coupon of 2.5%, the rating upgrade on its corporate debt from BBB- to BBB with stable Outlook by the rating agency Fitch, and the negotiation of a new EUR750mn liquidity line for Ferrovial (in April) for five years at a cost of 80 basis points. There were some important contract awards in the Construction division that are not yet included in the backlog, worth approximately EUR800mn at current exchange rates. They include new contracts in Budimex (approx. EUR400mn), the widening of the I-77 toll road in North Carolina (approx. EUR355mn at 100%) or a section of a new urban toll road in Riyadh, Saudi Arabia (approx. EUR70mn for Ferrovial s share). During the period, HAH paid dividends to its shareholders totalling GBP203mn (EUR63mn of which corresponded to Ferrovial). The 407 ETR toll road paid dividends totalling CAD525mn (EUR163mn of which corresponded to Ferrovial), vs. CAD430mn in The net cash position at the end of September, excluding infrastructure projects, stood at EUR1,533mn. In the third quarter, Ferrovial paid a dividend equivalent to the 2013 complementary dividend, approved by the AGM in June, and introduced the new system of shareholder remuneration, the Ferrovial Dividendo Flexible (Ferrovial Scrip Dividend) (EUR0.291 per share). In October Ferrovial announced the payment of a second dividend within the same Scrip Dividend programme (equivalent to the 2014 interim dividend), which will be paid in November (EUR0.381 per share). The AGM also approved a capital reduction by means of a share buy-back and cancellation. By 30 September, Ferrovial had bought back 5.8 million of its own shares. In October 2014, Ferrovial made various corporate moves as part of its growth strategy. It made an indicative, non-binding offer for 100% of Transfield Services in Australia and also made an offer for a stake in Aena in the context of the potential privatisation of the latter, subject to the outcome of the IPO. Additionally, Ferrovial Aeropuertos reached an agreement, in a 50/50 consortium with Macquarie Infrastructure Fund 4, to acquire 100% of the airports of Aberdeen, Glasgow and Southampton (UK). Subject to the approval of the European competition authorities, this deal is expected to close no later than January Business performance During the period, the Services division consolidated its position as the largest division in the group in terms of revenues, with significant growth both in the UK and in Spain and continued margin improvement (7.7% vs. 6.7% in the first quarter). The backlog reached a new high of more than EUR20,000mn, including the equity-accounted contracts. At Construction there was a slight decline in revenues, principally as a reflection of the sale of Danwood (by Budimex) in 2013, as well as lower activity in Spain and the UK due to the completion of the Terminal 2 works at Heathrow Airport. Of note were the first contract awards in Brazil and the strengthening of Ferrovial s presence in Australia. The Construction backlog topped EUR7,700mn at the end of the period. Cintra Infraestructuras was awarded the I-77 toll road in North Carolina, USA (41.8km long), with an estimated investment of USD655mn. The principal equity-accounted assets continued to post strong growth, with EBITDA increases of 11.2% and 10.2% at Heathrow Holding and the 407 ETR toll road respectively. With regard to traffic, Heathrow reported an increase of 1.5% vs. the same period last year, with notable growth in long-haul flights. Traffic on the 407 ETR increased by 3.4%. The improving trend at the European toll roads seen since 4Q13 continued, with growth in Spain compared to the previous year (with the exception of the R4) and solid increases in Portugal and Ireland. In the USA the rising trend continued after the negative impact of snowstorms in the first quarter of the year. Sep-14 Dec-13 Var. Revenues 6,488 5, % 10.2% Construction Backlog 7,726 7, % EBITDA % 9.3% Services Backlog 19,371 17, % EBIT % 11.1% Net result % Traffic Sep-14 Sep-13 Var. Net debt Sep-14 Dec-13 ETR 407 (VKT 000) 1,820,860 1,760, % Net Debt Ex-Infrastructure Projects 1,533 1,675 Chicago Skyway (ADT) 41,424 41, % Total net debt -6,054-5,352 Indiana Toll Road (ADT) 28,692 28, % Ausol I (ADT) 12,177 11, % Ausol II (ADT) 14,368 14, % M4 (ADT) 26,670 25, % Heathrow (million pax.) % 1

2 INDEX GENERAL OVERVIEW... 1 Business performance... 1 INDEX... 2 TOLL ROADS... 3 Assets in operation... 3 Assets under development... 4 Tenders in progress... 5 Assets in insolvency proceedings ETR... 6 North Tarrant Express (1 2)... 7 SERVICES... 9 Spain... 9 UK... 9 International Backlog Corporate transactions CONSTRUCTION Budimex Webber Ferrovial Agroman Backlog AIRPORTS Corporate transactions HAH Traffic performance User satisfaction Profit & Loss Account Revenue breakdown Regulatory matters Net debt Dividends CONSOLIDATED PROFIT & LOSS ACCOUNT BALANCE SHEET & OTHER MAGNITUDES Net debt Credit rating Corporate bond issuance Dividends 2013 & Share buy-back programme (treasury stock) ANNEXES I: Significant events Events after the close II: Principal contract awards III: Exchange-rate movements 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). Investor Relations Department ADDRESS: Príncipe de Vergara Madrid TELEPHONE: FAX: WEB: ir@ferrovial.com 2

3 TOLL ROADS Revenues % 2.0% EBITDA % 4.8% EBITDA Margin 62.7% 62.7% EBIT % 4.9% EBIT Margin 44.0% 44.4% The Toll Roads division reported positive growth (+1.6%) despite 2013 revenues being positively impacted by the reversal of provisions at the Norte Litoral toll road (EUR7mn), and 2014 revenues negatively impacted by the provisions made in 3Q at the same motorway for EUR4mn. The adverse weather conditions during the first quarter in the USA were offset by solid traffic growth in the second and third quarters of the year. Assets in operation TRAFFIC PERFORMANCE In the first nine months of 2014, traffic increased on practically all the group s toll roads. The exceptions were the Chicago Skyway (-0.6%), due to the negative impact of the snowstorms in the first quarter of the year, and in spite of the growth in the second and third quarters; and the Greek toll roads as a reflection of the impact of the sharp increase in tolls applied in February By country: In Canada traffic increased by 3.4% (+2.8% in the third quarter standalone), with positive growth in each quarter, reflecting the beneficial effect of the lane closures on alternative routes. (+21.4% in the third quarter standalone). The Chicago Skyway reported growth in the second and third quarters, but in the first nine months of the year posted a slight drop (-0.6%). The Indiana Toll Road posted growth in the first nine months of the year, with the second and third quarters compensating for the significant drop in the first quarter due to the extreme weather conditions, with heavy snowfall during January and February. In Spain, the improving trend observed since 3Q13 was confirmed, with traffic growth on the principal toll roads. Note the strong growth at Ausol (+5.2% and +5.5% on Ausol I and II, respectively) in the third quarter, showing the benefits of the uptick in tourism, very favourable weather conditions and a more stable macroeconomic environment than last year. There was a slight decline in traffic on the R4, which is suffering from being very expensive since the compensatory increase in tolls applied in January 2014, and continues to show no signs of recovery. The Portuguese concessions (Algarve and Azores) reported solid traffic growth, confirming the trend seen since October 2013 thanks to the recovery of the Portuguese economy. This was particularly the case at the Algarve concession, which reported a cumulative growth in traffic of 10% in the first nine months of Growth in traffic remains notable, although slightly moderated in the third quarter standalone (Algarve +8.9% and Azores +1.7%). In Ireland, traffic growth continues in the positive trend seen since the second quarter of 2013, although with a slight slowdown in the third quarter. The traffic growth for the first nine months of the year on the M4 remained positive due to the improvement in employment, in line with 2013, although with slower growth in the third quarter (+2.0%). Finally, in Greece the negative traffic growth on the Ionian Roads reflected the 60% increase in tolls introduced in February. In North America, we highlight the strong growth of the SH130 toll road, where traffic surged by 17.2% vs. the first nine months of 2013 Traffic Revenues EBITDA EBITDA Margin Net Debt 100% Global consolidation Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep- Sep Var. Sep-14 Sep-13 Sep-14 Share Intangible assets Chicago Skyway 41,424 41, % % % 87.1% 87.4% -1,160 55% SH-130 6,599 5, % % % 29.7% 39.4% % Ausol I 12,177 11, % % % 79.9% 72.3% % Ausol II 14,368 14, % M4 26,670 25, % % % 68.7% 68.7% % Algarve 10,384 9, % % % 90.8% 85.6% % Azores 8,207 8, % % % 80.2% 36.8% % Financial assets Autema % % 90.5% 89.9% % M % % 76.4% 76.2% % Norte Litoral % % 86.2% 89.2% % Via Livre % % 13.1% 6.7% 7 84% Equity accounted Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep- 14 Sep- 13 Var. Sep-14 Sep-13 Sep-14 Share 407 ETR (VKT 000) 1,820,860 1,760, % % % 84.4% 84.7% -4,166 43% Intangible assets Central Greece 17,723 18, % % % 68.1% 14.7% % Ionian Roads 24,064 27, % % % 73.4% 42.8% % Serrano Park % % 64.8% 58.0% % Note: traffic data in ADT (average daily traffic) except in Canada. 3

4 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 thanks 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% Intangible assets ,899 Share NTE % LBJ ,047 51% NTE 35W % Equity accounted Financial assets East % A-66 Benavente Zamora % LBJ: The project is on schedule; 90% of the construction is now complete and works are expected to be concluded in NTE 35W: Financing for the project was closed in September 2013; the project is on schedule and expected to open in mid East: Construction work started in the first week of March, and is now 45% complete. Work is expected to be concluded at the end of The credit rating agencies DBRS and S&P have affirmed the project s rating at A-, with stable outlook. I-77: The project received its NTP1 (Notice to Proceed) on 22 August. Preliminary expropriation activities have begun, together with the period to prepare the Business Plan and the workflow timetables. CONTRACT AWARDS Ferrovial, through the consortium led by its subsidiary Cintra Infraestructuras, has closed a contract with the North Carolina Department of Transportation (NCDOT) for the design, construction, financing, operation and maintenance of the widening of the I-77 toll road at a total cost of USD655mn (c.eur478mn). The new infrastructure concession has a life of 50 years from the date it opens to traffic. The contract was signed after NCDOT announced in April that the consortium was the preferred bidder. Cintra will be responsible for the development for the project, while the design and construction will be carried out by a Joint Venture that includes Ferrovial Agroman and the US construction company W.C. English. The design includes widening the carriageways in both directions over a 26m (41.8km) stretch of the I-77 toll road in the metropolitan area north of Charlotte, between the junctions with the I-277 in Charlotte and the NC-150 in Iredell County. The existing toll road will be rebuilt in three sections, adding capacity by creating variable electronic toll lanes that will improve the functioning of the corridor. NTE: Sections 1 and 2 of this toll road were opened to traffic on 4 October 2014, nine months ahead of schedule. 4

5 Tenders in progress Some recovery has been observed in development activity in some of Ferrovial s target international markets (North America, Europe, Australia and Latin America). In Canada, Infrastructure Ontario published a Request For Qualification (RFQ) in March 2013 for the 407 East Extension II. Cintra s consortium was prequalified in April The project comprises the design, construction, financing and maintenance of approximately 33km of toll road. The concession has a life of 35 years. The final bid was presented on 30 September. SH288 Toll Lanes (Houston, Texas): Cintra was prequalified in September The project comprises the design, construction, financing, operation and maintenance of 10.3 miles of 2 tolled lanes in each direction (new construction), under a real tolls regime. The contract also includes the operation and maintenance of the toll-free lanes and the existing service roads in the section. The final bid is expected to be presented at the beginning of Illinois Portion of the Illiana Corridor (Illinois, USA): Cintra was prequalified on 17 January The project comprises the design, construction, financing, operation and maintenance of 57km of toll road with two lanes in each direction, under an availability payment regime. The final bid is expected to be presented in the second quarter of Indiana Portion of the Illiana Corridor (Indiana, USA): Cintra was prequalified on 28 February The project comprises the design, construction, financing, operation and maintenance of 20km of toll road with two lanes in each direction, under an availability payment regime. The concession has a life of 35 years from the end of construction. The final bid is expected to be presented in the second quarter of Assets in insolvency proceedings Global consolidation Traffic Revenues EBITDA EBITDA Margin Net Debt 100% Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep-14 Sep-13 Sep-14 Share Intangible assets Ocaña-La Roda 3,287 3, % % % 21.6% 36.4% % Radial 4 4,852 5, % % % 46.6% 46.7% % Indiana Toll Road 28,692 28, % % % 71.8% 74.6% -3,064 50% RADIAL 4 On 14 September 2012, the Board of the Radial 4 agreed to request protection from its creditors through the courts. On 4 October 2012, this request for court-ordered insolvency proceedings 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 absolutely no negative impact whatsoever on Ferrovial s accounts. As a result of the filing for insolvency, the standstill agreements with the creditor banks were terminated. INDIANA TOLL ROAD OCAÑA - LA RODA The Ocaña-La Roda toll road filed for creditor protection on 19 October On 4 December 2012 this request for court-ordered insolvency proceedings was granted. The Creditor Committee meeting was set for 19 September 2014, but subsequently delayed again with a new date for 4 March 2015 as a consequence of the modifications introduced by the government to insolvency legislation, which among other measures, allows the Administration to present its own proposals. 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. The consensual creditor protection process (Chapter 11 pre-packaged) began with the request for the same on 22 September and it counted with the necessary support from creditors. The debtors and shareholders of ITR Concession Company LLL ("ITRCC") reached an agreement to restructure the company s debt. The agreement contemplates the sale of the company, or the recapitalisation of the balance sheet. 5

6 407 ETR PROFIT & LOSS ACCOUNT CAD Sep-14 Sep-13 Var. Revenues % EBITDA % EBITDA Margin 84.4% 84.7% -0.3% EBIT % EBIT Margin 76.7% 76.9% Financial results % EBT % Corporate income tax % Net Income % Contribution to Ferrovial equity accounted result ( ) % Note: after Ferrovial s disposal of 10% in 2010, the toll road switched to being consolidated by the equity method, in line with Ferrovial s stake (43.23%). 407 ETR reported strong growth in revenues (+10.5%) and EBITDA (+10.2%) in local currency terms. This positive growth reflects the combination of the toll increase on 1 February, an increase in the number of journeys (+2.7%) and an increase in the average distance travelled (+0.7%). Average revenues per journey increased by 7.5% vs. the first nine months of Financial expenses increased by CAD95mn vs. the previous year due to the increase in inflationary expectations (with no cash impact), compared to a decline last year. Additionally, interest expenses rose due to the two bond issues (for CAD200mn each) in June and October 2013, and the CAD250mn bond issuance carried out in May ETR made a contribution to Ferrovial s equity-accounted results of EUR39mn, after the annual amortisation of the goodwill generated by the sale of 10% of the asset in 2010, which is amortised over the life of the asset as a function of the traffic forecast. DIVIDENDS In the first nine months of 2014, the toll road paid dividends amounting to CAD525mn vs. CAD430mn in the same period last year. On 23 October 2014, it agreed a new payment of CAD205mn which has already been paid to the shareholders. CAD T T T T Total NET DEBT The concession s net debt as at 30 September stood at CAD5,898mn, with an average cost of 4.89%. In May, 407 ETR issued bonds for CAD250mn. This issuance matures in May 2024 and carries a coupon of 3.35%. After this issuance, 41% of the debt matures in more than 20 years time. Debt maturities in 2015 and 2016 amount to CAD770mn and CAD295mn 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). 407 ETR TOLLS The table below compares the 2013 and 2014 tolls (increased on 1 February) for light vehicles: CAD Regular Zone Peak Period Mon-Fri: 6am-7am, 9am-10am, 3pm-4pm, 6pm-7pm Peak Hours Mon-Fri: 7am-9am, 4pm-6pm Light Zone Peak Period Mon-Fri: 6am-7am, 9am-10am, 3pm-4pm, 6pm-7pm Peak Hours Mon-Fri: 7am-9am, 4pm-6pm Midday Rate Weekdays 10am-3pm Midday Rate Weekends and public holidays 11am-7pm Off-Peak Rate Weekdays 7pm-6am, Weekends and public holidays 7pm-11am 28,30 /km 30,20 /km 26,90 /km 28,70 /km 24,06 /km 22,25 /km 19,35 /km 26,20 /km 27,20 /km 24,90 /km 25,85 /km 22,70 /km 21,00 /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 TRAFFIC Traffic, total kilometres travelled, increased by 3.4% due to a 2.7% increase in the number of journeys and a 0.7% increase in the average distance travelled. Traffic is benefitting from maintenance works and lane closures on the parallel roads. 6

7 North Tarrant Express (1 2) On 4 October the NTE toll road (sections 1 and 2) in Texas (USA) was opened to traffic; this 21.4km toll road is on the Dallas-Fort Worth axis and provides a solution to the problem of congestion on a group of key toll roads in the area, such as the Interstate 820 and the State 121/183. The Dallas-Fort Worth axis is one of the most saturated in the USA. Key data of the concession company: Type Concessionaire Location Customer Equity structure Opening day NTE Mobility Partners Description Dallas/Fort Worth, North Texas Texas Department of Transportation 56.7% Cintra Infraestructuras S.A. 33.3% Meridiam 10% Dallas Police and Fire Pension System Oct-14 Concession start date 2009 Concession end date 2061 Duration Purpose 52 years Managed Investment 1,592.3 M Length of the highway Number of lanes Toll System Payment methods Plan, design, finance, construct, maintain and enhance Km (13.5miles) 2 tolled lanes and 2-3 free lanes each way Open (free flow) Transponder & video The toll road was designed as managed lanes, which involved upgrading and adapting the existing highway and the construction of completely electronic tolled lanes with no toll barriers, which offer an alternative to the congestion problem on roads carrying high volumes of traffic located in urban centers with no space to build new roads. The managed lanes have a dynamic toll system, which gives the operator the flexibility to determine the tariff depending on the level of congestion. The sensors installed along the toll road transmit data continuously on traffic conditions (volumes, speed, weather, level of congestion, etc.), which are used to determine the tariff with the aim of maintaining the traffic at a minimum speed of 50mph (80kmph) in the managed lanes. The toll charge can be updated every five minutes. Initial toll regime (for the first 180 days): the tolls are fixed for half-hour intervals in the peak periods and can be changed weekly. During this period the maximum toll is 75 cents per mile. The consortium comprises Cintra, the reference manager of the asset with a 56.7% stake, together with the infrastructure fund Meridiam (33.3%) and DPFPS, a local pension fund (10.0%). Definitive tariff regime (after the first 180 days): the tolls can be modified every five minutes. The maximum toll is 82 cents per mile (adjusted for inflation every year). There is cap of 82 cents per mile which can be exceeded under the following conditions: The traffic speed in the managed lanes falls below 50mph and/or traffic exceeds 1,650 cars per hour and per lane. 0, pce/h c/mi pce/h c/mi 50 mi/h 7

8 The construction of the toll road, which began at the end of 2010, was completed nine months ahead of schedule. During these four years, the corridor was kept open to traffic while the existing lanes were widened and improved and the managed lanes were built the length of the IH 820 and the SH 121/183 (non-toll roads) which link the IH 35W in Fort Worth with Dallas-Fort Worth Airport on the route to Dallas. Financial structure: Financing for the project came from four sources: USD398mn of Private Activity Bonds (PABs)* issuance, a USD704mn longterm TIFIA** loan from the US Department of Transportation; and the contributions made by the consortium members (USD427mn) and the Texas Department of Transportation (USD573mn). The NTE project was a winner of the Project of the Year 2010 award from the most respected association of transport infrastructure in the USA (ARTBA) for being one of the most innovative, complete and complex toll roads planned in the USA. The magazine Infrastructure Journal also selected this toll road for its Best Global Transport Deal of 2009 award. For more information on the concession, please click on the following related links: 4CROeRPnQ PAB issuance in 2009: NTE Mobility Partners LLC issued USD398mn (approximately EUR270mn) as part of the financing process for the toll road. Sources & Uses Funds (USDmn) Total Sources 2,102 % total Equity % Subsidies % PABs * % TIFIA ** % Total Uses 2,102 % total Construction, opex, capex and insurance 1, % Interest costs capitalized % Bidding costs % Reserve account % These tax-exempt bonds were issued in the US municipal bond market. The issuance, with an average coupon of 6.98% was the first time PABs had been used by a private toll road concession. It comprised two issues: one for USD59.8mn with a 7.5% coupon maturing on 31 December 2031, and the other for USD340.2mn with a 6.875% coupon maturing on 31 December The issuance was very well-received by the market, with demand exceeding supply by 2.4x. * PAB: Tax-exempt bonds issued by or in the name of the local or state government intended to provide special tax benefits to the bond holders. This is a common form of financing for joint projects between privatesector entities and public authorities to infrastructure projects in America. ** Transportation Infrastructure Finance and Innovation Act (TIFIA) is a programme that provides Federal credit (including direct loans, guarantees, lines of credit) to finance transport infrastructure with a regional or national impact. TIFIA loans have the following characteristics: Long-term, low fixed cost Joint public/private investment Patient (soft) lender Builds up confidence in the project Flexible pay-back 8

9 SERVICES Revenues 3,202 2, % 18.5% EBITDA % 10.6% EBITDA Margin 7.7% 8.1% EBIT % 19.2% EBIT Margin 4.7% 4.4% EBITDA at Ferrovial % in equity accounted % 63.5% businesses Backlog* 19,371 17, % 4.6% JVs Backlog* 1, % 45.3% Global Backlog+JVs* 20,675 18, % 6.5% *Backlogs compared with December JV = joint-venture In pro-forma terms, EBITDA was 5.2% lower than in the same period last year (EUR7mn in absolute terms). In 2013, the division booked EUR8mn derived from the reversal of provisions after collecting on some bad debt. However, in 2014, EBITDA reflects a negative EUR5mn impact derived from regulatory changes that have resulted in an increase in Social Security contributions. Excluding both the provisions reversed in 2013 and the regulatory changes of 2014, EBITDA growth would have been approximately 5%, in line with the higher turnover. At end-september 2014, the EBITDA margin stood at 10.4% vs. 10.8% in June. The reason for the contraction was the seasonality of some personnel-intensive activities, where personnel expenses were higher in the summer due to having to replace staff during their holidays. Margins are expected to improve in the fourth quarter, principally as a reflection of contributions from the new contracts where margins have already stabilised after an initial start-up period. The P&L for 2014 includes the costs incurred in the integration of Amey and Enterprise in the UK (EUR13mn) and Spain (EUR0.3mn). In September 2013, these costs amounted to EUR17mn in the UK and EUR3mn in Spain. The comparable column reflects the variation vs excluding merger costs and FX movements, and resulted in revenue and EBITDA growth of 18.5% 10.6% respectively. The revenue growth vs is partially a consequence of the higher contribution from Enterprise (nine months in 2014 vs. six months in 2013). Excluding this impact, the organic growth at the Services division would have been 7.8% (by area: +11,3% in Spain, +5.3% in the UK and +30.3% International). In September, the EBITDA/Sales margin stood at 7.7% vs. 6.7% in March. Margins are expected to continue to improve in the fourth quarter, supported by the increased contributions from the contracts started in 2014, once they have got beyond the initial start-up stage; and the increased volume of synergies in the UK. Finally, the growth in the backlog continued at the same pace as in recent quarters, reaching EUR19,371mn. Including Ferrovial s share in equityaccounted investments, the backlog rises to EUR20,675mn, +11% vs. December 2013 (+6.5% in pro-forma terms). Spain Revenues 1,173 1, % 11.3% EBITDA % -5.2% EBITDA Margin 10.4% 12.1% EBIT % -3.0% EBIT Margin 5.2% 5.8% EBITDA at Ferrovial % in equity accounted 3 1 n.s n.s businesses Backlog* 6,349 6, % 0.3% JVs Backlog* % -0.6% Global Backlog+JVs* 6,697 6, % 0.2% *Backlogs compared with December Revenue growth reached 11.3% as a consequence of new contracts awarded in 2013 coming on stream, such as the maintenance of Valdecilla hospital in Cantabria and customer services for Renfe s longdistance services. UK Revenues 1,968 1, % 22.9% EBITDA % 31.5% EBITDA Margin 6.1% 5.2% EBIT % 37.9% EBIT Margin 4.5% 3.5% EBITDA at Ferrovial % in equity accounted % 45.0% businesses Backlog* 12,766 11, % 6.7% JVs Backlog* % n.s Global Backlog+JVs* 13,641 11, % 9.7% * Backlogs compared with December The 2013 P&L only included 6 months of Enterprise, given that the company was acquired in April Meanwhile, the costs of the Amey/Enterprise merger had risen to EUR13mn by end-september 2014 (vs. EUR17mn in 9M13).The estimated merger costs for FY14 are approximately GBP17mn (EUR20mn); from 2015, merger costs are no longer expected to represent a significant cost. The comparable column shows the performance vs excluding in both cases these one-off merger costs, as well as the impact of the foreign exchange rate. The revenue and sales growth vs were partially driven by the three additional months from Enterprise, which boosted revenues by EUR265mn and EBITDA by EUR13mn. Excluding the impact of these three additional months, revenues and EBITDA would have expanded 5.3% and 16.8% respectively vs The revenue growth was mainly thanks to new contracts awarded in 2013, including the contract for the maintenance of municipal buildings in London, the waste treatment in Milton Keynes and highway maintenance and cleaning for Liverpool. The EBITDA growth (+16.8%) is principally due to this higher turnover, and above all, to the savings derived from the merger of Amey and Enterprise. The merger process is on track with the schedule determined at the time, and will focus on procurement once the two companies have been merged into a single entity. 9

10 International Revenues % 30.3% EBITDA % -9.1% EBITDA Margin 5.6% 9.1% EBIT % 31.3% EBIT Margin -0.4% 0.2% EBITDA at Ferrovial % in equity accounted % 56.7% businesses Backlog* % 9.1% JVs Backlog* % 6.9% Global Backlog+JVs* % 8.5% *Backlogs compared with December The revenue breakdown by country in the International area is as follows: Chile (EUR35mn), Portugal (EUR19mn) and Poland (EUR6mn). Activity and results in the different countries is positive, with the main negative deviation vs. the previous year due to the consolidation in 2014 of the necessary structure to get this new activity created in 2013 up and running. The International business also includes the business in Qatar, although the results are equity-accounted. During 2013 three infrastructure maintenance contracts at Doha airport got underway, with Ferrovial s share in them share of the principle magnitudes as follows: revenues EUR19mn, EBITDA EUR4mn and backlog EUR81mn. Backlog At end-september, the backlog reached a new historical high of EUR20,675mn, or 11% more than in December 2013 (+6.5% excluding FX movements). By business line, in Spain the backlog pending execution stood at EUR6,697mn (+0.2% vs. December 2013). In the third quarter the highlight was the award of a contract for the maintenance, cleaning and energy management of the hospital complex in Orense worth EUR147mn over 15 years. In the UK, the portfolio reached EUR13,641mn (+17.3% vs. 2013, +9.7% in pro-forma terms). Note the close to 100% increase in the Joint-Venture backlog in the first nine months of the year. In the third quarter the highlights were: the renewal of a highway maintenance contract in Staffordshire, worth EUR776mn over 10 years, and a new contract for the maintenance of the Docklands Light Railway trains in London; this contract will be equity-accounted and Ferrovial s share will be EUR172mn over the 6.5 years of the life of the contract. In International, the backlog to September reached EUR337mn, +7.2% vs. 2013, or +8.5% in pro-forma terms. The highlight of the third quarter was the award of a new contract for waste collection in the city of Poznan, Poland, worth EUR11mn over three years. Corporate transactions In October 2014, Ferrovial made an indicative non-binding offer for 100% of the capital of Transfield Services in Australia, at a price of AUD1.95/share in cash. The price implies a premium of: 39% over the volume weighted average price over one week. 34% over the volume weighted average price over one month. 45% over the volume weighted average price over six months. The offer is subject to the usual conditions and requires no external financing. The offer is of an indicative nature and non-binding and does not guarantee that the transaction will take place. Ferrovial Servicios reserves the right to withdraw the said offer at any moment. On 20 October, the Board of Transfield Services issued a recommendation to its shareholders to take no action following Ferrovial s offer, allowing the latter to carry out a limited due diligence exercise on non-exclusive terms after signing a confidentiality agreement. 10

11 CONSTRUCTION Revenues 2,936 2, % 2.7% EBITDA % 15.0% EBITDA Margin 8.7% 7.5% EBIT % 13.9% EBIT Margin 7.8% 6.7% Backlog* 7,726 7, % -5.7% *Backlogs compared to December Revenues declined slightly, principally due to the deconsolidation of Danwood, a subsidiary of Budimex sold in the fourth quarter of 2013, together with weaker activity in Spain and the UK. In like-for-like terms, revenues increased +2.7%. International turnover accounted for 77% of the division s revenues. The division posted significant growth (+16.1%) at the EBITDA level. Budimex Revenues % 16.9% EBITDA % 42.3% EBITDA Margin 4.4% 4.1% EBIT % 54.9% EBIT Margin 3.9% 3.4% Backlog* 1,123 1, % 8.3% * Backlogs compared to December The data to September 2014 do not include Danwood, which was sold at the end of 2013, as noted above, and which in the first nine months of 2013 made a revenue contribution of c.eur72mn. Thus in like-for-like terms there was a notable increase in both revenues (+16.9%) and more particularly at EBITDA level (+42.3%), mainly due to better management of costs of materials and subcontractors. The backlog reached EUR1,123mn, or +8.3% in like-for-like terms vs. December This reflected some large new contracts, marking the beginning of a new expansion cycle supported by EU funds. These contracts include the power station project in Turow for EUR173mn and various toll road projects awarded by the General Highway Directorate worth approximately EUR254mn. Webber mitigation of construction risks on its key toll road contracts, such as the NTE, which on 30 September were close to completion. The backlog contracted due to the lower volume of new awards in the first nine months of the year. Ferrovial Agroman Revenues 1,558 1, % -3.3% EBITDA % -4.3% EBITDA Margin 10.8% 10.4% EBIT % -8.3% EBIT Margin 9.7% 9.6% Backlog* 5,662 5, % -5.0% * Backlogs compared to December Revenues at Ferrovial Agroman declined 3.3% in like-for-like terms, principally as a reflection of the Spanish market (-5.8%) and the lower output in the UK due to the completion of Terminal 2 at Heathrow Airport, which was inaugurated at the end of June The new contracts awarded to Ferrovial Agroman in new countries in the first half of the year (principally in Brazil and Australia) are in their initial states and have not yet translated into revenues. Backlog Sep-14 Dec-13 Var. Civil work 6,071 6, % Residential work % Non-residential work % Industrial % Total 7,726 7, % The backlog declined vs. December 2013 (-1.8%, or -5.7% in like-for-like terms). This reflected the high level of execution, but does not include the new contracts that will be added to the backlog in the coming months, worth in excess of EUR800mn including: new contracts in Budimex for approximately EUR400mn, the widening of the I-77 toll road in North Carolina (approximately EUR355mn at 100%) or the construction of a section of a new urban toll road access to Riyadh (Saudi Arabia), of which Ferrovial s share should be around EUR70mn. The International backlog reached EUR5,743mn, considerably more than the domestic backlog (EUR1,983mn), or 74% of the total. Revenues % 1.2% EBITDA % 150.7% EBITDA Margin 9.6% 3.9% EBIT % 198.5% EBIT Margin 8.6% 2.9% Backlog* 941 1, % -21.3% * Backlogs compared to December The decline in revenues was principally due to FX movements, as there was an increase in like-for-like terms (+1.2%). Webber posted very significant EBITDA growth, mainly as a reflection of the progressive 11

12 AIRPORTS HAH s contribution to Ferrovial s equity-accounted results was EUR35mn vs. EUR253mn in the same period in 2013, which included the EUR137mn capital gain on the disposal of Stansted Airport and non-recurrent items such as the effect of the change in the tax rate. Corporate transactions Ferrovial has made an offer for a stake in Aena in the context of its privatisation. This offer is subject to the outcome of the Initial Public Offering (IPO). The potential privatisation of Aena will be effected through the sale of 49% (28% in the IPO and 21% in a placement among qualified institutional investors). Additionally, in October, a consortium owned 50% by Ferrovial Aeropuertos and 50% by Macquarie Infrastructure Fund 4, reached an agreement to buy 100% of Aberdeen, Glasgow and Southampton airports. The transaction implies an EV of GBP1,048mn (EUR1,317mn), and is subject to the approval of the EU competition authorities. The deal is expected to close no later than January HAH Traffic performance During the first nine months of 2014, the number of passengers in HAH airports reached 65.8 million, an increase of 2.0%. This positive traffic growth was due to an increase in load-factors and the operation of larger aircraft. At Heathrow, traffic increased by 1.5%, with growth of 5.6% on domestic flights due to the impact of the launch of Virgin Atlantic Little Red in the summer of Long-haul traffic rose 2.1%, with growth of 1.6% in traffic to North America and 3.7% on the routes to the Middle East. Passenger load-factors in the first nine months of the year reached 77.2% vs. 77.0% in 2013 and the average number of seats per flight stood at per aircraft (202.3 in 2013). Heathrow operates at 98.1% of capacity. Heathrow s new Terminal 2 (The Queen s Terminal) was opened to traffic on 4 June. From October, 26 airlines operate out of this terminal. Terminal 2 operates approximately 350 flights per day. Heathrow has doubled its annual traffic growth forecast for 2014, from +0.7% to +1.5%. Traffic for the year is now expected to reach 73.4 million passengers versus a previous forecast of 72.8 million, and compared to the 72.3 million passengers in The non-regulated airports reported growth of 5.0%. Traffic growth by destination Sep-14 Sep-13 Var. UK % Europe % Long Haul % Total % User satisfaction User satisfaction reached record levels during the first nine months of the year, with 78% of passengers rating their level of satisfaction as very good or excellent, with 4.04 out of 5 points, reflecting the improvements in punctuality, security and immigration. For the third year running, Heathrow s Terminal 5 has been awarded the best airport terminal in the world by Skytrax World Airports Awards. GBP Traffic (million passengers) Revenues EBITDA EBITDA Margin Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. (bps) Heathrow % 1,988 1, % 1,166 1, % 58.7% 56.4% 225 Heathrow express % % 9.2% 9.2% 2 Adjustments n.s. 1 1 n.s. n.s. Heathrow SP % 1,986 1, % 1,172 1, % 59.0% 56.8% 221 Glasgow % % % 38.4% 36.3% 214 Aberdeen % % % 38.6% 37.3% 139 Southampton % % % 28.5% 30.0% -156 Non Designated % % % 37.1% 35.7% 140 Adjustments -2-3 n.s n.s. n.s. n.s. HAH total % 2,125 1, % 1,199 1, % 56.4% 54.8%

13 Profit & Loss Account GBP Sep-14 Sep-13 Var. Like-for- Like Revenues 2,125 1, % 8.1% EBITDA 1,199 1, % 11.2% EBITDA margin % 56.4% 54.8% Depreciation % 14.1% EBIT % 9.6% EBIT margin % 35.4% 34.9% Impairments & disposals 0 0 n.s. n.a. Financial results % -6.4% EBT n.s. 19.9% Corporate income tax % -27.5% Result from discontinued operations % n.a. Net income % 17.4% Contribution to Ferrovial equity accounted result ( ) % 17.4% In October, Heathrow agreed an extension to its contract with World Duty Free which is expected to have a positive impact from 2014 through the rest of the current regulatory period. Regulatory matters Regulatory Asset Base (RAB) At end-september 2014 the RAB reached GBP14,844mn (vs. GBP14,585mn in December 2013), which reflects the investment made (GBP540mn) and the inflation increase (GBP245mn), offset by the depreciation during the period (GBP490mn). New regulatory period The new regulatory period (Q6) started on 1 April 2014 and runs to 31 December The CAA approved a maximum annual increase in tariffs per passenger of RPI -1.5%. Revenue and EBITDA growth of 8.1% and 11.2%, respectively, at HAH reflected the combination of an 11.2% increase in aeronautical income, driven by the tariff increase (+10.4% in April 2013 and +11.3% in July 2014 at Heathrow), and the increase in passenger traffic (+2.0%); retail revenues rose 3.3% and Other revenues 3.1%. Revenue breakdown GBP Aeronautic 1,336 1, % 11.2% Retail % 3.3% Others % 3.1% TOTAL 2,125 1, % 8.1% 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 per year, vs. the present 80 million. The investment required is estimated at GBP16bn over 15 years. The Airport Commission will launch a public consultation in next months and is expected to publish its conclusions at the end of the summer of Net debt Aeronaut Retail Other GBP Sep-14 LfL Sep-14 LfL Sep-14 LfL Heathrow 1, % % % Glasgow % % % Aberdeen % % % Southampton % % 2 2.1% Adj & others 0 1 n.s. -3 n.s. Total airports 1, % % % Aeronautical revenues rose 11.6% at Heathrow, reflecting the combination of higher traffic and the tariff increase in April 2013 (+10.4%) and July 2014 (+11.3%). Average aeronautical revenue by passenger was 10.0% higher at GBP22.66 (GBP20.60 in 2013). At Heathrow, retail revenues increased 2.8%. Net retail revenues per passenger reached GBP6.34, or a rise of 1.7%. There was strong growth in parking revenues (+10.6%) thanks to commercial initiatives undertaken. Net retail spending by passenger was affected by works carried during the summer to extend the luxury shopping area in Terminal 5 and airlines changing terminals after the closure of Terminal 2, as well as the strength of sterling against other currencies in GBP Sep-14 Dec-13 Var. Senior loan facility % Subordinated % Securitized Group 11,324 11, % Non-Securitized Group % Other & adjustments n.s. Total 12,798 12, % At 30 September 2014, the average cost of Heathrow s external debt was 5.84%, taking into account all the hedges for interest rates, exchange rates and inflation. Dividends In the first nine months of 2014, HAH distributed GBP203mn vs. the GBP491mn in the same period last year (including GBP300mn of extraordinary dividends after the sale of Stansted Airport). The total dividends payable in 2014 are estimated at GBP270mn. In 2013, HAH paid its shareholders GBP255mn of ordinary dividends (vs. GBP240mn in 2012). 13

14 CONSOLIDATED PROFIT & LOSS ACCOUNT Before Fair value Adjustments Fair value Adjustments Sep-14 Before Fair value Adjustments Fair value Adjustments Sep-13 Revenues 6,488 6,488 5,889 5,889 Other income Total income 6,493 6,493 5,896 5,896 COGS 5,792 5,792 5,264 5,264 EBITDA EBITDA margin 10.8% 10.8% 10.7% 10.7% Period depreciation EBIT (ex disposals & impairments) EBIT margin 7.9% 7.9% 7.7% 7.7% Disposals & impairments EBIT EBIT margin 7.9% 7.9% 8.0% 8.0% FINANCIAL RESULTS Financial result from financings of infrastructures projects Derivatives, other fair value adjustments & other financial result from infrastructure projects Financial result from ex infra projects Derivatives, other fair value adjustments & other ex infra projects Equity-accounted affiliates EBT Corporate income tax Net Income from continued operations Net income from discontinued operations CONSOLIDATED NET INCOME Minorities NET INCOME ATTRIBUTED

15 REVENUES Construction 2,936 2, % 2.7% Airports % -20.5% Toll Roads % 2.0% Services 3,202 2, % 18.5% Others 21 3 n.s. n.s. Total 6,488 5, % 10.2% FINANCIAL RESULT Sep-14 Sep-13 Var. Infrastructure projects % Ex infra projects % Net financial result (financing) % Infrastructure projects n.s. Ex infra projects % EBITDA Construction % 15.0% Airports % -12.3% Toll Roads % 4.8% Services % 10.6% Others % -44.8% Total % 9.3% DEPRECIATION & AMORTISATION The figure was 4.7% higher in like-for-like terms vs. the same period last year, reaching EUR189mn. EBIT (before impairments and disposal of fixed assets) Derivatives, other fair value adjustments & other financial result % Financial Result % The net financial had a negative evolution (-12.8%), reflecting the combination of the following impacts: Lower interest expense excluding infrastructure projects, principally due to a lower non-recurrent impact of the amortisation of commissions (EUR3mn in 2014 vs. EUR16mn in 2013) after the debt retirement carried out in 2013, as well as the lower cost of debt due to lower interest rates and a different debt mix. Higher expenses on infrastructure projects due to assets coming into operation. Lower derivatives income due to the impact of the share price in relation to the company s stock option hedges (the share price rose from EUR11.20/share in December 2012 to EUR13.29/share in September 2013, and from EUR14.07/share in December 2013 to EUR15.35/share at end-september 2014). Construction % 13.9% Airports % -11.9% Toll Roads % 4.9% Services % 19.2% Others % -72.2% Total % 11.1% For purposes of analysis, all references to EBIT are before impairments and disposal of fixed assets. EQUITY-ACCOUNTED RESULTS Sep-14 Sep-13 Var. Construction % Services % Toll Roads % Airports % Total % IMPAIRMENTS AND DISPOSAL OF FIXED ASSETS In 2013, this element included the EUR20mn capital gain on Amey s jointventures. The companies consolidated by the equity method made a contribution of EUR91mn after tax (vs. EUR317mn in 2013). The 2013 result included a series of non-recurrent items, principally the capital gain on the sale of Stansted Airport at HAH (EUR137mn). TAXATION The tax rate stood at 24%. Excluding the equity-accounted results, which are included net of tax, it would stand at 34%. NET RESULT Net profit reached EUR270mn (vs. EUR485mn in 2013), due to the inclusion of non-recurrent results in 2013 such as the sale of Stansted airport and the sale of Amey s joint-ventures. 15