Annual Report 2002

Transcription

Annual Report 2002

2002 in figures
millions of euros
Financial data
The “Ferrovial’s people” project commenced one Monday in July
2002, after photographer Roland Fischer had spent some weeks
mulling over the company’s proposal to capture the image of
Ferrovial.
In two weeks (one week in Spain and another in Poland, in
September), Fischer photographed the faces of 882 of Ferrovial’s
professionals with very diverse training and origin, chosen at
random: a sample of the numerous people who work on a dayto-day basis for Ferrovial, to make it one of the best companies
Annual Report 2002
Ferrovial´s people
in terms of earnings, profitability, innovation, transparency and
2002
2001
2000
%02/01
Net revenues
5,040
4,240
3,598
18%
18%
Operating income
485.1
389
271
44%
34%
Net income
455.8
218
159
37%
69%
Net income (1)
455.8
1.56
1.14
37%
69%
11,267
10,981
8.821
1,495
1,198
1,050
541
430
367
(303)
287
417
Total gross dividend
91.9
55.9
38.6
Total gross dividend (1 and 2)
64,.5
Earnings per share
3.25
Earnings per share (1)
1.84
Total assets
Shareholders’equity
Gross capital investments
Net debt (Cash)
Annual Report 2002
Group Description
Economic Analysis and Financial Statements
Operating data
2002
2001
2000
Number of employees
28,454
23,522
24,208
Construction backlog
Corporate Governance
Environment, Quality and Social Responsibility
5,922
5,599
5,283
Property pre-sales
655
603
601
Services backlog
816
718
729
2000
sustainable development.
Ratios
2002
2001
Operating margin
9.6%
8.8%
7.5%
Net margin
9.0%
5.1%
4.4%
ROE
33.9%
19.4%
16.1%
ROE (1)
20.7%
All the photographs are displayed on a 3 x 4 meter mural
dominating the lobby of Ferrovial’s headquarters. A closer look
reveals the name of each person.
The project will be part of a collection of photographs by
Leverage
international prestigious photographers about Ferrovial and its
Pay-out
21%
Pay-out (1)
26%
activities.
24%
39%
26%
24%
2002
2001
2000
Capitalization
3,387
2,762
1,908
Year-end closing price
24.15
19.69
13.60
Effective daily trading volume
10.2
6.3
4.6
Gross dividend per share
0.67
0.41
0.28
Per share data
Gross dividend per share (1)
0.47
Appreciation in the year
23%
45%
-6%
140,264,743
140,264,743
140,264,743
F E R R OV I A L
Number of shares at year-end
(1) Excluding the extraordinary result generated in the sale of 40% of Cintra
(2) Considering own shares at 31 December 2002
CAGR% 02/00
Ferrovial Group Performance 1996-2002
Main events in 2002 and 2003
millions of euros
15 January 2002. Ferrovial and Australian company Macquarie Infrastructure Group formalize their
alliance in the toll road business.
Net sales
CAGR: 21%
5,040
Operating income
CAGR: 51%
485
4,240
374
3,598
2,383
271
2,645
1,940
20 March 2002. Ferrovial, via subsidiary Cintra, strengthened its position in 407 ETR in Toronto (Canada)
by acquiring a further 5.8% of the road operating company to, increasing its stake to 67.1%.
195
1,593
122
42
‘96
‘97
‘98
‘99
‘00
‘01
Net income
CAGR: 45%
‘02
‘96
51
‘97
‘98
‘99
‘00
‘01
‘02
Net income*
CAGR: 32%
456
218
218
159
‘96
70
‘97
85
111
‘99
‘00
28 June 2002. Ferrovial is awarded a $200 million contract to expand Warsaw Airport. The project will
double the airport’s capacity to 12.5 million passengers.
159
49
‘98
5 June 2002. Ferrovial appoints Gabriele Burgio as independent director. Burgio is Executive President of
NH Hoteles.
25 June 2002. Ferrovial acquires the concession for Sydney airport, Australia’s largest, which handles more
than 25 million passengers per year. The transaction entails a total investment of 3.85 billion euros and
represents the largest airport privatization ever. Ferrovial has a 19,6% stake and its equity investment totals
233 million euros.
258
49
25 January 2002. Joaquín Ayuso appointed chief executive of Ferrovial Group in place of Santiago
Bergareche, who will remain on the Board as independent director and has also been appointed ViceChairman of the company.
‘01
‘02
‘96
70
‘97
85
‘98
111
‘99
‘00
‘01
‘02
31 July 2002. Autopista del Sol opens the Estepona-Guadiaro stretch to traffic eight months ahead of
schedule.This is the third toll road which Ferrovial has opened to traffic in 2002: after the M-45 (Madrid)
and the Artxanda tunnel (Bilbao).
31 July 2002. Ferrovial pre-qualified for 4 projects in the Greek Toll Road Plan worth 3 billion euros.
Shareholders’ equity
1,495
455
1,198
430
367
928
‘96
522
‘97
589
‘98
5,599
16 September 2002. Ferrovial groups its transport infrastructure concessions under Ferrovial
Infraestructuras: the new company owns 60% of Cintra (toll road management) and 100% of both
Ferrovial Aeropuertos and Cintra Aparcamientos.
178
‘99
‘00
‘01
‘02
Property pre-sales
5,283
541
543
1,050
456
4 September 2002. Ferrovial is the first Spanish construction group to be included in the Dow Jones
Sustainability indexes, the main reference worldwide of companies that are committed to operating under
criteria of sustainability.
Gross capital investment
‘97
‘98
‘99
‘00
‘01
10 October 2002. Ferrovial Inmobiliaria and Lar Grosvenor announce the OMEGA project, an ambitious
business park concept in Arroyo de la Vega, Alcobendas, on the outskirts of Madrid.
‘02
14 November 2002. Ferrovial awarded its first toll road concession in Ireland, the N4/N6 KinnegadKilcock Motorway, Ireland’s first privately-financed toll road. Furthermore, Ferrovial is short-listed for
another Irish Road Plan project: Dundalk Western Bypass.
Services backlog
816
655
5,922
600
603
729
718
586
3,796
4,022
430
476
2,946
421
306
2,476
182
14 January 2003. Ferrovial is the most transparent company in the Ibex-35 index, according to a report
published by Financial Dynamics, one of the market’s most prestigious financial consultants.
210
121
‘96
‘97
‘98
18 December 2002. Ferrovial celebrates its 50th anniversary as one of Europe’s largest construction
groups.
‘99
‘00
‘01
‘02
‘96
‘97
‘98
‘99
‘00
‘01
‘02
‘96
‘97
‘98
‘99
‘00
‘01
‘02
23 January 2003. Ferrovial contributes €500,000 to community projects to celebrate its 50th anniversary.
3 February 2003. Ferrovial and the National Institute of Industrial Safety and Hygiene to cooperate in the
design and implementation of an innovative workplace risk prevention system.
Ferrovial´s people
Art Project by
* Excluding extraordinary results of the Cintra transaction
CAGR: Compound Annual Growth Rate
Roland Fischer
Annual Report 2002
Letter to shareholders
2
Board of Directors
4
Management Committee
6
Group Description
Ferrovial and its strategy
10
Activities
- Construction
14
- Infrastructure
22
- Real Estate
34
- Services
40
- Telecommunications
45
Risk management
46
Sustainability
48
Management Report
- Business performance
52
- Share performance
69
- Audit and Control Committee Report
74
Consolidated Financial Statements
- Financial Statements and notes
- Auditors’ Report
Historical Financial Information
76
167
168
Corporate Governance Report
172
Environment
190
Quality
206
Social Responsibility
208
- Labor relations
209
- Community Involvement
218
Address List
224
Contents
1
Dear shareholder:
Ferrovial reached its 50th anniversary on 18 February 2002, and we celebrated it with a record year in terms of
earnings and share performance.
In 2002, net profit amounted to 456 million euros, an increase of 109% over 2001. It is important to note that
this figure includes the gains on the sale of a stake in Cintra to Australian group Macquarie. Excluding that effect,
earnings totaled 258 million euros, 18% higher than in 2001.
For the second year running, Ferrovial’s share appreciated considerably, gaining 23%. It was the second-best
performer in the Ibex 35 index and the best performer in the construction sector. Positive business
performance and a high level of transparency contributed decisively to this appreciation in the stock market.
As I stated last year, the company’s success was due to the right combination of factors: share performance in
the markets in which we operate, a judicious investment policy and the search for corporate excellence.
In 2002, all our business lines expanded significantly. Construction grew by 10%, boosted mainly by the projects
in Spain’s Infrastructure Plan, and the backlog was 6 billion euros at year-end. Outside Spain, we advanced
considerably with Budimex, which is the focus of our plans in Eastern Europe with a view to the future
expansion of the European Union.
New sections of road plus favorable traffic performance enabled the Infrastructure area (toll roads, airports and
car parks) to make a stable contribution to Group earnings, even after reducing our stake in Cintra to 60%. In
2002, this business was also strengthened by the acquisition of 19.6% of Sydney airport, the award of a toll road
concession in Ireland and the consolidation of our leading position in the Spanish car park market.
Our Real Estate business continued to advance at a good pace under a policy of rapid asset rotation.
Development of first homes, our core real estate business in Spain, was complemented in 2002 with property
brokerage, which generates services revenues and provides synergy with property development.
Services also increased rapidly, focusing on profitable growth in its activities, entering complementary markets
and acquiring companies in strategic business areas.
2
Annual Report 2002
The world was rocked by events in 2002. In addition to weakness in Europe’s largest economies, there was
uncertainty about the US economic recovery, a widespread crisis in Latin America, a pre-war climate in the
Persian Gulf and financial and accounting scandals in internationally-renowned companies.All those factors had
a negative effect on the markets, which fell considerably in the year.
The economic deceleration projected for 2003 will not have a negative impact on Ferrovial in the short term
since our bottom line this year is supported almost entirely by our existing backlog. Nevertheless, we will not
forget the importance of being leaders in efficiency in the businesses in which we operate, and we will continue
to invest in strategic activities from our very sound financial position.
In 2002, we also continued to improve our corporate governance practices and the transparency and quality of
the information supplied to the market, which have undoubtedly increased credibility and trust among our
investors. We also continued to innovate in our production and management processes using the latest
technology.As you can imagine, all those actions could not have been performed without the contribution of
our excellent human capital, which we must retain and develop in order to achieve sustainable growth.
On behalf of all of us at the Group, I thank our shareholders for the trust they have placed in Ferrovial and,
through this Annual Report, I am pleased to be able to inform them of our activities in 2002.
Rafael del Pino y Calvo-Sotelo
Chairman of Ferrovial
March 2003
3
Board of Directors
Chairman
Rafael del Pino y Calvo-Sotelo Chairman of the Board of Directors since 2000
Civil engineer.
MBA (Sloan School of Management. MIT)
Chief Executive Officer of Grupo Ferrovial from 1992 and Chairman since 2000.
Vice-Chairmen
Santiago Bergareche Busquet Member of the Board of Directors since 1999
Graduate in Economics and Law (Deusto Commercial University)
Chairman of Dinamia Capital Privado.
Joined Ferrovial in 1995 as Chairman of Agromán. He was the Chief Executive Officer
of Grupo Ferrovial between February 1999 and January 2002. Currently director and
member of the Executive Committee of Grupo Correo Prensa Española.
Jaime Carvajal y Urquijo Member of the Board of Directors since 1999
Graduate in Law (Madrid) and M.A. in Economics (Cambridge University, UK)
Chairman of Ford España, Advent International (Spain), Ericsson España and ABB, S.A.
Director of Lafarge Asland and Solvay Ibérica.Trustee of Patronato Príncipe de Asturias
and a member of the Trilateral Commission.
Chief Executive Officer
Joaquín Ayuso García Member of the Board of Directors since March 2002
Civil engineer
Joined Ferrovial in 1982. Chief Executive Officer of the group’s construction arm from
1999 to January 2002.
Directors
Fernando del Pino y Calvo-Sotelo Member of the Board of Directors since 1999
Graduate in Economics.
Worked in Chase Manhattan Bank until 1998, when he joined as a member of the
management team at the del Pino Group Family Office.
4
Annual Report 2002
Juan Arena de la Mora Member of the Board of Directors since 2000
Doctor in Engineering (ICAI), Graduate in Business and Psychology, Diploma in Tax
Studies and AMP (Harvard Business School).
Chairman of Bankinter since March 2002.
María del Pino y Calvo-Sotelo Member of the Board of Directors since 2000 (representing Profesa Investments, B.V.)
Graduate in Economics and Management Development Program (Instituto de
Estudios Superiores de la Empresa – IESE).
Vice-Chairwoman of Fundación Rafael del Pino.
Member of the Board and Executive Committee of Fundación Codespa.
Eduardo Trueba Cortés
Member of the Board of Directors since 2000 (representing Portman Baela, S.L.)
Graduate in Economics and Law (ICADE).
Head of the del Pino Group Family Office since 1993.
Santiago Eguidazu Mayor Member of the Board of Directors since 2001
Economist, Civil Service Economist and Trade Expert.
Chairman of Grupo Nmás1.
He has been a Partner, Chief Executive Officer and Vice-Chairman of AB Asesores
and Vice-Chairman of Morgan Stanley Dean Witter.
Gabriele Burgio Member of the Board of Directors since 2002
Graduate in Law and MBA by INSEAD (Fontainebleau).
Executive President of NH Hoteles since 1999.
He has been Chief Executive Officer of Cofir and worked for Bankers Trust in
New York and for Manufacturers Hanover in Italy.
Secretary to the Board and Legal Counsel
José María Pérez Tremps Member of the Board of Directors since 1992 and Secretary since 1990.
Graduate in Law.
Council of State Lawyer and member of the Senior Civil Service.
Former Secretary to the Board of Directors and Legal Counsel at the Instituto
Nacional de Industria.
Currently holds the post of General Secretary at Grupo Ferrovial.
Member of the Executive Committee
Member of the Audit and Control Committee
Member of the Nomination and Remuneration Committee
Board of Directors
5
Joaquín Ayuso García
Chief Executive Officer
Civil engineer. Born in 1955. Joined Ferrovial in 1982 and was General Manager of the Construction arm
between 1992 and January 2002.
José María Pérez Tremps
General Secretary
Lawyer. Council of State Lawyer and member of the Senior Civil Service. Born in 1952.
Joined Grupo Ferrovial in 1990 as General Secretary and was appointed to the Board of the Group
parent company in 1992.
Nicolás Villén Jiménez
Chief Financial Officer
Industrial engineer, Master of Business Administration (Columbia University), Master of Science
(University of Florida). Born in 1949. Joined Grupo Ferrovial in 1993.
Jaime Aguirre de Cárcer y Moreno
General Manager of Human Resources
Graduate in Law. MBA (ICADE-CAI). Born in 1951.
Joined Grupo Ferrovial in 2000.
Amalia Blanco Lucas
Head of External Relations and Communications
Graduate in Law and Economics & Business (ICADE). Born in 1961.
Joined Grupo Ferrovial in 2000.
Pedro Buenaventura Cebrián
General Manager - Construction
Civil engineer. Born in 1957. Joined Ferrovial in 1985 as Manager Cataluña and Area Manager. Country
Manager - Poland from 2000 to March 2002.
Juan Béjar Ochoa
General Manager - Infrastructure concessions
Graduate in Law and Business (ICADE). Born in 1957.
Joined Grupo Ferrovial in 1991; he has held the position of Diversification Manager and General
Manager - Development. General Manager of the Infrastructure division since 1998.
Álvaro Echániz Urcelay
General Manager - Property development
Graduate in Business. Born in 1960
Joined Ferrovial in 1995 when it acquired Agromán, where he had been Chief Financial Officer. Chief
Financial Officer at Cintra between 1999 and September 2002.
Íñigo Meirás Amusco
General Manager - Services
Graduate in Law and MBA (Instituto de Empresa). Born in 1963.
Joined Grupo Ferrovial in 1992. General Manager of Autopista del Sol and Manager of Toll Roads at
Cintra until November 2000.
6
Annual Report 2002
7
14
22
34
40
45
Risk management
Sustainability
46
48
Group Description
- Construction
- Infrastructure
- Real Estate
- Services
- Telecommunications
10
A construction
group which has
diversified into
infrastructure,
real estate
and services
Ferrovial was founded as a construction company in 1952. Fifty years later, while maintaining construction
as its core activity, Ferrovial is now a diversified group, with complementary businesses (infrastructure, real
estate and services) that provide synergy to its core business.
Ferrovial debuted on the stock market in May 1999 and was promoted to the Ibex-35 index two months
later. After an initial poor performance, in the last two years Ferrovial has become one of the best
One of the best
share performers
performers in the Spanish stock market: the share has rallied 23% in that period while the Ibex-35 has lost
28%.
50%
40%
30%
+22.7%
20%
10%
+4.2%
10%
jan
feb
mar
apr
may
jun
jul
aug
sep
oct
nov
dec
-10%
-20%
-30%
-40%
Ferrovial
Construction Sector
Ibex 35
EuroTop 300
-28.1%
-32.0%
Since its IPO, Ferrovial’s key aggregates have increased two-fold. Net earnings grew from 85 million euros
in 1998 to 455.8 million euros in 2002 (undiluted). Operating profit nearly quadrupled, from 122 million
euros to 485 million euros in 2002.
Non-construction
activities
contribute 68%
of operating
profit
10
Annual Report 2002
From an eminently construction company (construction represented 58% of operating profit in 1998),
Ferrovial has transformed itself into an industrial group in which non-construction activities now account
for 68%.The most stable businesses (infrastructure and services) provide 47% of operating profit.
EBIT by business 1998-2002
1998
2002
Services
4%
Services
3%
Real Estate
21%
Infrastructure
18%
Construction
32%
Construction
58%
Infrastructure
43%
Real Estate
21%
Construction continues to be Ferrovial’s mainstay due mainly to the investment arising under Spain’s
Infrastructure Plan, management experience and efficiency, and cash flow. Ferrovial’s strength in Spain, its
natural market, was boosted in recent years as a result of strong positioning outside Spain, hand in hand
with the infrastructure business in OECD countries and in Eastern Europe, through the acquisition of
Budimex, the largest construction group in Poland.
Cash flow and
investments in
infrastructure
are the key
factors for
the construction
business
Operating profit
Revenues
Construction
CAGR: 16%
% Operating margins
Construction
155
123
3,432
3,789
96
2,969
1,533
‘96
1,864
2,149
79
2,212
34
‘97
‘98
‘99
‘00
‘01
‘02
3.1%
3.6%
3.2%
‘98
‘99
‘00
40
2.2%
2.1%
‘96
‘97
4.1%
3.6%
67
‘01
‘02
Ferrovial has over 30 years’ experience in the infrastructure market since it obtained the Bilbao-Behobia
toll road through a consortium in 1968. Ferrovial is now one of the world’s largest private-sector
One of the world’s
largest infrastructure
groups
transport infrastructure development groups, with a committed investment of 1.7 billion euros in 16 toll
roads in Spain, Portugal, Ireland, Chile and Canada; 12 airports in Australia, the UK, Mexico and Chile; and
175,000 parking spaces in Spain.
The infrastructure business is one of Ferrovial’s key growth engines and is backed by an expanding market
that continues to demand experience, know-how and investment capacity from companies as well as the
One of the
main growth
engines
ability to respond to numerous private-sector infrastructure development projects throughout the world.
Ferrovial’s objective in this market is to create value through growth and dimension while capitalizing on
the opportunities afforded by expanding markets, especially OECD countries.
Strategy
11
Operating profit
Revenues
Infrastructure
CAGR: 60%
211
% Operating margins
450
Infrastructure
161
67%
346
257
104
179
63
41%
77
Active risk
management
and an industrial
approach
to property
27
18
‘96
‘97
40%
47%
47%
‘00
‘01
‘02
35%
11
12
‘96
‘97
21
27%
‘98
‘99
‘00
‘01
‘02
‘98
‘99
Real estate, which was boosted by a new strategy in the early 1990s, is also a key business at Ferrovial,
which tries to minimize the risks inherent to this market through very active risk management, an
industrial approach to the business and rapid land rotation. Ferrovial’s strategy in this market is based on
product type (first homes–considered to be less cyclical), new sales initiatives and development of real
estate services.
Operating profit
Revenues
Real Estate
CAGR: 43%
% Operating margins
620
Real Estate
104
24.6%
88
75
23.5%
375
305
43
17.6%
245
168
Expansion in
new markets
74
91
‘96
‘97
‘98
‘99
‘00
‘01
‘02
16.2%
16.5%
24
12
15
14.3%
‘96
‘97
‘98
16.8%
‘99
‘00
‘01
‘02
Ferrovial’s Services division, which was created well into the 1990s, focuses on urban services (street
cleaning, municipal solid waste collection and integrated water management), facility management and
infrastructure upkeep (it is Spain’s market leader in the latter two). Ferrovial plans to expand its Services
division through organic growth, entrance in new markets related to its core businesses and analysis of
investment possibilities that will enable the Group to grow rapidly.
18
Revenues
Services
CAGR: 54%
Operating profit
% Operating margins
Services
5.3%
12
5%
4.1%
3.6%
5.2%
5.6%
340
7
194
26
52
70
91
‘97
‘98
‘99
215
3
3
‘97
‘98
4
-5.2%
‘96
12
Annual Report 2002
‘00
‘01
‘02
-1
‘96
‘99
‘00
‘01
‘02
Ferrovial has made considerable progress outside Spain in recent years: it has focused on a selective
growth strategy in OECD countries, expanding in parallel with its Infrastructure business as a way of
entering new markets, and on acquisitions of streamlined companies that are market leaders with growth
potential. Ferrovial’s international presence is currently concentrated in Canada, Poland,Australia, the UK,
Portugal and Ireland. In Latin America, Ferrovial manages toll roads and airports in Chile and Mexico and
Selective
growth
in OECD
countries
focuses on civil engineering and building with multilateral financing in order to minimize risks.
At 2002 year-end, Ferrovial had 303 million euros in cash (the debt related to infrastructure projects is
without recourse). Because of this net cash position, the construction cash flow and its borrowing
capacity, Ferrovial is superbly placed to undertake future investments so that it can maintain steady rates
Superbly placed
to undertake
future
investments
of growth and value creation in the long term.
Ferrovial is Spain’s largest and Europe’s second-biggest construction company in terms of market
capitalization. In 2002, it entered the Morgan Stanley Capital International (MSCI) index and it was the
first Spanish construction group selected by the Dow Jones Sustainability Indexes (the world’s corporate
sustainability benchmark), which assigns Ferrovial the highest financial, social and environmental ratings in
No.1 in Spain
and no. 2 in Europe
in terms of market
capitalization
the sector worldwide. Consultancy company Financial Dynamics also rated Ferrovial as the most
transparent company of the Ibex-35 index in terms of financial disclosure, investor relations (off-line and
on-line) and corporate governance.
Ferrovial’s entire strategy revolves around its commitment to long-term value creation, so as to enable its
business project to be recognized as a world leader.This objective is based on the fundamental principles
of profitability, innovation, transparency, reduction of environmental impacts and social development in all
First Spanish
construction company
in the Dow Jones
Sustainability Indexes
its activities.
Strategy
13
Construction
Steady growth in revenues and earnings confirmed Ferrovial’s position as Spain’s largest construction
company in terms of size and profitability. Ferrovial engages in all areas of civil engineering, building and
industrial construction (where we are market leaders in water treatment plant engineering and
construction). Outside Spain, we have stable construction businesses in several countries in Europe and
North and South America.
Competitive situation
Main growth
engine
Construction was again one of the Spanish economy’s main growth engines in 2002: it grew 4.7%, 2.5
percentage points faster than Spain’s economy.
The increase in international trade and the new distribution and logistics processes require modern highperformance transport infrastructure networks, which are being boosted by Spain’s 2000-2007 Transport
Projected
investments
total 114
billion euros
Infrastructure Plan, aimed at reducing Spain’s chronic infrastructure deficit and attaining real convergence
with the more developed countries of Europe. The Plan has become an anti-cyclical and stabilizing
instrument in the medium term for the construction sector, which again reported sustained stable
development in 2002.The Plan envisages 114 billion euros in investment (through budget financing, EU
funds and private-sector investments), almost 2.5 times the amount invested in the last ten years.
Delicias high-speed railway station in Zaragoza
14
Annual Report 2002
2000-2007 Infrastructure Plan
Application of investments
Budget allocation
Source of funds
Health and education
17%
Private sector
18%
Water and
environment
17%
European funds
29%
Airports
12%
Transport
53%
Energy
7%
Telecommunications
5%
Public
sector
49%
Railway
infrastructure 36%
Other
4%
Ports
6%
Roads
42%
The 2000-2007 Infrastructure Plan envisages continued actions in order to complete the high-capacity
road network, modernize railway communications and expand high-speed railway, create new airport
Positive outlook
for government
tenders in 2003
infrastructure (to meet growing air traffic) and increase port capacity and competitiveness.
This Plan focuses on investments in civil engineering, i.e. the fastest-growing segment of the industry, taking
over from home building, which is showing signs of depletion for the second year running. In 2002, the
Development Ministry awarded projects worth 7.964 billion euros, principally roads (38%), railway
infrastructure (35.7%), airports (15%) and port infrastructure (7.7%). Despite economic deceleration, the
outlook for construction projects in 2003 continues to be positive: the Development Ministry’s
investments projections are 15.8% higher than in 2002 and those of the Environment Ministry are 10.8%
higher.
Growth rates
are faster than
the European
average
This steady growth rate indicates that the construction industry in Spain will grow faster than the
European average.
Growth projections for the European construction sector
Market volumes (compared with Spain)
1.0x
12.4x
1.7x
2.7x
1.6x
1.7x
5.9%
4.2%
3.7%
3.5%
1.3%
2001e
2002e
2003e
Spain
1.8% 1.9%
2.3% 3.1%
3.2%
2.1%
1.1%
2.1% 2.4% 1.6%
1.2%
-0.3%
-2.3%
EU
United Kingdom
Italy
France
Germany
Activities
15
Intense
activity by
the private
sector
The Infrastructure Plan will require the participation of private initiative (expected to reach 20% of the
total) and will strengthen the role of those construction groups that are capable of participating not just
as builders but also as developers, involved in designing, building, financing and operating the projects.
Within the construction industry, in 2002 ACS took control of Dragados. Also Spanish banks divested
several assets: construction company Sacyr acquired 23.5% of listed property company Vallehermoso. In
2003, the two companies have announced plans to merge.
From a business standpoint, the merger of these companies will not have a negative impact on their
competitors and could actually increase the market share of the latter.
Strategic positioning
Considerable
cash flow
capacity
Ferrovial continues to focus on construction as its core business because of this area's sizeable capacity to
generate cash with which to fund the Group's diversification and international expansion.
Ferrovial is taking advantage of the sector’s upswing and profitability improvements in the construction
area, with the following objectives:
- increase market share in new contracts from the public and private sector;
Taking advantage
of the upswing
and profitability
improvements
- take advantage of new financing formulae–for example, Private Finance Initiative (PFI)–and facility
management in international markets;
- seek investment opportunities in complementary segments;
- selectively expand business outside Spain;
- focus on concessions, R&D and internationalization of the water business;
- create value and competitive advantages by improving technology;
- use new technology in management to improve productivity and competitiveness.
Profitability will be increased by enhancing management skills through training; maintaining a culture of
cost control; actively managing working capital; and pursuing quality as a means of improving the bottom
line.
16
Annual Report 2002
Outside Spain, Ferrovial has a stable structure, principally in Portugal, Italy, Poland, Canada and Chile, and
its strategy focuses on four lines:
- new contracts in stable countries or specific projects with payment guaranteed through multilateral
financing;
Government
tenders in stable
countries and
projects with
guaranteed
collection
- selective growth in OECD countries, expanding with the Group’s Infrastructure business as a route
for market entry;
- investments by Spanish groups in international markets;
- acquisition of sound leading companies in markets with considerable growth potential (exemplified
by our acquisition of a controlling stake in Budimex, Poland’s largest construction company).
New terminal at Madrid-Barajas airport
Activities
17
Significant events in 2002
The rapid pace of production in both Spain and foreign markets enabled Ferrovial to retain its leading
Spain’s largest
construction
group
position in the construction industry in 2002. Revenues increased by 10.8% to 3.789 billion euros and the
construction backlog reached an all-time record: 5.922 billion euros, i.e. up 5.8% on 2001.
Main contracts
Record backlog
of close to 6
billion euros
Million euros
Radial R-4 shadow toll road (Madrid)
562.6
New terminal at Warsaw airport (Poland)
201.7
Operation of Ceuta desalination plant
116.1
Plana del Vent combined cycle plant (Tarragona)
76.3
Pesquera-Reinosa highway (Cantabria)
73.6
Mediterráneo highway,Albuñol-Adra section (Granada)
65.6
Alora-Cartama high-speed railway (Málaga)
62.6
Expansion of 1st runway at Barcelona airport
52.8
Pavilions 3 and 4 at the Valencia Trade Fair
51.9
El Papiol-Sant Vicenç dels Horts high-speed railway (Barcelona)
41.8
4-star hotel in Peñarroya (Málaga)
30.1
Largest construction contracts
Million euros
Estepona-Guadiaro toll road (Málaga)
120.7
Algarve shadow toll road (Portugal)
80.9
Siekierkowska highway (Poland)
69.3
Santiago-Talca toll road (Chile)
56.3
Radial R-4 shadow toll road (Madrid)
55.7
Metrosur in Getafe (Madrid)
51.4
Collipulli-Temuco toll road (Chile)
50.6
Rural Economics School in Warsaw
36.6
New terminal at Madrid-Barajas airport
35.4
Construction backlog by market
Construction backlog by customer
Total: 5.992 billion euros
Total: 1.306 billion euros
Spain
78%
Other 4%
Bolivia 3%
Italy 2%
Industrial
12%
Non-residential
16%
Chile
12%
Portugal
29%
Elsewhere
22%
18
Annual Report 2002
Construction backlog by segment
Poland
50%
Residential
15%
Civil engineering
57%
Consolidation outside Spain
As part of the strategy to internationalize in OECD countries, Ferrovial consolidated its presence in
Portugal and Poland, where considerable progress was made in order to ready Budimex, the construction
group acquired in 2000, for Poland’s accession to the European Union, which will offset the deceleration
in investment in Spain. Ferrovial is also performing construction work in other European countries such as
Stable presence
in Europe,
Canada and
Latin America
Italy and Ireland, where it will start construction of the 35-km N4-N6 Kinnegad Kilcock toll road in 2003.
In the Americas, Ferrovial is present mainly in Canada, Chile, Bolivia and the Dominican Republic.
In 2002, the member states ratified the expansion of the European Union to 25 countries (including
Poland) from 2004 onwards, which will create the world’s largest economic bloc (it will generate more
wealth than the US) and foster broader, more effective cooperation in order to face economic,
environmental and social challenges. From a business standpoint, the new Europe (which will be much
more competitive) will offer expansion opportunities in other markets and scale economies.
Poland’s construction market is the tenthlargest in Europe: it accounts for 10.7% of the
country’s GDP (vs. 12% in Spain) and grew by
Polish construction market
an average of 8.3% in the 1996-1999 period,
practically zero in 2000 and has been in a
recession in the last two years.The outlook is
7.5%
5.2%
4.0%
3.1%
4.1%
that it will pick up in 2003: about 3% growth in
1.0%
1.0%
4.9%
3.0%
0.8%
2003 and 6% in 2004. Road construction and
modernization will boost civil engineering as a
result of a 9.2 billion euros program until 2005
-8.2%
1999
2000
2001
GDP
Construction
-8.8%
2002e
2003e
The Polish
construction
sector is
recovering
2004e
(5 times the investments made in the last four
years). Investments planned for environmental
actions and the EU-funded road plan amount to
27.6 billion euros until 2010. Poland’s residential
Projected investments
ERDF (Transport/Environment)
Cohesion funds
property market is in its infancy; interest rates
1.707
are decreasing, though they are still higher than
748
the European average; the objective is 140,000
homes per year.
1.593
911
Poland 04-06
Spain 00-06
Million euros
Source: Central Statistics Office, Poland’s PreAdhesion Program (Jul. 02) and Euroconstruct
(Dec. 02); Copenhagen European Council (Dec.
02) and Berlin summit (Mar. 99).
Activities
19
Consolidation
and expansion
in other
businesses and
Central Europe
Ferrovial’s strategy in Poland is to consolidate its position in the construction market so as to continue
studying the possibility of engaging in other activities to which it can contribute its investment capacity,
know-how and experience, and to expand in Central Europe.
Work at Budimex has been aimed at modifying the corporate and functional structure, optimizing costs,
implementing Ferrovial's IT systems (for project management), taking advantage of synergy with the
Group (centralizing procurements, treasury and other services) and completing the training of Polish
engineers and economists (100 people) in the "Ferrovial way".
The new terminal
will double the
capacity of
Warsaw airport
In 2002, Budimex’s revenues amounted to 618.8 million euros and the backlog to 515 million euros.The
most significant projects were the S1 Bielsko Biala Skoczow-Cieszyn road (the main expressway towards
the Czech Republic and Austria), and the expansion of the new Warsaw airport terminal for 200 million
dollars (capacity will double, to 12.5 million passengers per year, in preparation for Poland’s entry into the
EU).
Know-how and technology
Improved technical solutions in all engineering projects, in bundled design and construction tenders and in
optimizing draft designs of the concessions awarded to the Group also contribute to adding value and
provide distinctive features in a competitive market.
The main projects developed by the Engineering Department were:
- the R-4 road project and the related stretch of the M-50 road, plus the Estepona-Guadiaro stretch
of the Costa del Sol toll road;
- technical assistance for the construction of Los Tilos arch which, with a span of 250m, will be one of
the world’s largest bridges;
- a novel project using marginal materials in the construction of embankments in the R-4/M-50 road;
- the Melonares dam, which includes a very important ecological action to increase the population of
the Spanish lynx;
- Puerta de América hotel, the new headquarters for the Madrid Chamber of Commerce and the
Snowdome in Arroyomolinos;
- the Delicias high-speed railway station in Zaragoza, whose roof is supported by 160m-span arches, is
a milestone of the Madrid-France railway line.
20
Annual Report 2002
Ferrovial has been involved in Obralia, the leading e-commerce portal for the construction industry, since
inception. Obralia provides greater flexibility in communications between companies, as well as
accessibility and transparency in terms of knowledge of the market, tenders and contracts, and it reduces
the cost of construction and procurement (materials and work units).
Transactions
amounted to 250
million euros
Obralia was consolidated in 2002, the year in which it began to market, deploy and charge for services at
a flat rate; it received 1,600 requests for proposals and processed transactions worth 250 million euros.
The projections are that transaction numbers will increase significantly, to 11,000 in 2003, performed by
4,000 companies, amounting to nearly 1 billion euros.
Bilbao metro
Activities
21
Infrastructure
Capital by activities
Ferrovial is one of the world’s largest private-sector developers
Car parks
10%
of transport infrastructure, with committed investments of over
1.7 billion euros. Infrastructure concessions are among
The world’s largest
infrastructure
group, with
committed
investment of over
1.7 billion euros
Ferrovial’s main growth drivers, backed by a steadily growing
Airports
16%
market that continues to demand companies with experience,
Toll roads
74%
know-how and investment capacity to respond to numerous
private-sector infrastructure development projects worldwide.
Capital by region
Based on over 30 years’ experience in the field, business strategy
is geared towards growth, and Ferrovial currently manages 16
toll roads (1,600 kilometers in Spain, Portugal, Ireland, Chile and
Australia
13%
Latin America
12%
Spain
35%
Canada), 12 airports (over 40 million passengers, in Australia,
the UK, Mexico and Chile) and over 175,000 parking spaces in
Spain.
Canada
31%
Rest of Europe
9%
Toll roads
In 2002, the sector was shaped by significant corporate transactions:Australian group Macquarie acquired
40% of Cintra; Áurea bid for Iberpistas and Acesa then made a counterbid, culminating in the ÁureaAcesa merger, which created Abertis; 49% of French company state-owned ASF was floated; and
Sizeable corporate
transactions and
market interest
Schemaventotto bid for Autostrade to increase its stake to 66%.
All those transactions had a common backdrop: the market’s enormous interest in infrastructure.Two
factors contributed to this:
• market instability and the slump by telecommunications and Internet stocks made infrastructure a
safe haven;
• low interest rates and the relatively low leverage of many infrastructure companies improved the
return on equity in leveraged buyouts.
22
Annual Report 2002
In 2002, there was intensive activity in privatization and tenders for new projects:
• the Spanish government started to privatize ENA: the process will foreseeably be completed
before June 2003;
• the French government commenced a privatization program: the first initiative was the privatization
of 49% of ASF, and the program is expected to continue in 2003;
• several European countries turned increasingly to the private sector to finance new public works:
Private
concessions
in civil
engineering
in Europe
the main ones, in terms of number and value of projects, are Greece (which is still shortlisting bids
and will make a decision in 2003) and Ireland (bids were made for three projects in 2002 and
Ferrovial was awarded one).
Nevertheless, those factors do not appear to justify an M&A strategy simply to increase size in the sector.
Operating synergy among toll road concession companies is scant.Toll road revenues do not change if the
same company owns other concessions, even if they are adjacent.The nature of toll road revenues means
that other scale economies arising from marketing and market share optimization strategies are not
applicable. Moreover, the bulk of costs are directly related to the toll road length and number of toll
plazas, and scale economies are insignificant insofar as the addition of new concessions proportionally
increases operating, toll collection and maintenance expenses.Additionally, the last few years have shown
that leverage and cost of debt can be optimized for individual projects but that consolidating projects
within the same company does not necessarily improve those parameters insofar as creditor guarantees
are not connected to productive assets.
M-45 road in Madrid
Activities
23
Ferrovial’s strategic objective in the toll road sector is based on the perception that size is not a key
Maintain
profitability
through
investments
success factor in itself if growth dilutes returns. Consequently, Ferrovial’s objective is not to be the world’s
largest toll road company in terms of size but to attain high returns and maintain them over time via
investment in new projects.
This strategy is based on:
- maintaining growth and investment capacity in order to bid for profitable projects.This capacity was
ensured in 2002 when Ferrovial formed an alliance with Australian group Macquarie which, in
addition to generating substantial capital gains, provided a cash injection and reduced debt, thereby
guaranteeing the availability of funds to continue growing;
- investing in projects that provide high returns, taking advantage of the company’s management and
financial capacity: new projects in which management capacity enables the company to reduce risks
and, therefore, increase returns throughout the life cycle, plus existing projects in which high debtbearing capacity enables the company to optimize the return on the acquisition;
- focusing future investment on the OECD countries so that Ferrovial can finance projects in local
Investments
focus on OECD
countries and
maintaining
control of
management
currency in the long term or hedge the exchange risks;
- acquiring sufficiently large stakes in order to manage the projects in which it invests;
- managing the various project phases in order to successively improve returns as risks are reduced
over time;
- controlling the construction risk by participating in building the infrastructure.
Artxanda tunnels in Vizcaya
24
Annual Report 2002
Terrassa-St. Cugat toll road (Autema)
In Spain, the main events were the completion and opening to traffic of three large projects: section II of
the M-45, the Estepona-Guadiaro stretch on the Autopista del Sol (opened eight months before
Three roads were
opened to traffic
in Spain
schedule) and the Artxanda tunnels (Vizcaya). Now the only project under construction in Spain is the R-4
Madrid South toll road.
In 2002, Bidegi and Interbiak (companies owned by the provincial governments of Guipúzcoa and Vizcaya)
called for bids to operate the Bilbao-Behobia A-8 toll road, whose concession expires in June 2003.
Europistas bid for both; in January 2003, the consortium headed by Europistas obtained the concession to
Operation of
the A-8 road
in Vizcaya
operate the A-8 toll road in the province of Vizcaya.
In November 2002, a consortium headed by Ferrovial (93%) obtained, for 400 million euros, a 30-year
concession to build, finance and operate its first toll road in Ireland–the N4/N6 Kinnegad Kilcock
Motorway, the first toll road to be tendered in Ireland for private finance and management. With 35
Ireland’s first
toll road
kilometers of new construction, the toll road will link Dublin and the northwest. Construction will
commence in spring 2003 and the road should be operational in October 2006.
Activities
25
407 ETR in Toronto (Canada)
Ferrovial’s toll road projects
Km
Investment
managed
%
Cintra
Cintra
investment
Status
Concession
period
73.8
Operational
1968-2003
Operational
1974-2017
Spain
Europistas (A8 Bilbao-Behobia)
Europistas (A1 Burgos-Armiñón)
106
845.7
32.5
84
333.7
32.5
Autema (Terrassa-St. Cugat)
48
213.0
77.7
59.1
Operational
1987-2036
Ausol I (Málaga-Estepona)
82
472.3
78.3
153.0
Operational
1996-2046
Ausol II (Estepona-Guadiaro)
23
200.6
78.3
Operational
1999-2054
3
94.8
36.5
Operational
1998-2048
M-45 (O'Donnell-N IV Madrid)
14
199.3
50.0
15.7
Operational
1998-2029
R 4 (Madrid-Ocaña)
96
762.3
53.1
106.7
Construction
2000-2065
108
2,520.2
67.1
489.0
Operational
1999-2098
Scut Algarve
127
275.7
71.1
32.1
Construction
2000-2030
Scut Norte Litoral
113
378.2
71.1
32.3
Construction
2001-2031
35
406.7
93.0
39.5
Under development
2002-2032
Artxanda tunnel (Bilbao)
9.8
Canada
407 ETR (Toronto)
Portugal
Ireland
N4/N6 Kinnegad Kilcock (*)
Chile
Route 5 Talca-Chillán
193
212.8
43.4
11.3
Operational
1996-2015
Route 5 Temuco-Río Bueno
172
178.4
75.0
34.4
Operational
1998-2023
Route 5 Collipulli-Temuco
144
206.9
100.0
73.7
Operational
1999-2024
Route 5 Santiago-Talca
237
644.2
100.0
183.5
1,585.0
7,944.8
TOTAL
Amounts in millions of euros
(*) Preferred Bidder at 10 March
26
Annual Report 2002
1,313.9
Operat.-Construction 1999-2024
In Canada, Cintra increased its stake in 407 Express Toll Route (ETR) in Toronto to 67.1% when it acquired
a further 5.8% from its partner SNC-Lavalin. Since May 1999, Ferrovial has managed 407 ETR, the world’s
Our position was
strengthened in
407 ETR in Canada
first all-electronic toll road that can freely set the tolls.The benchmark traffic figures were set in 2002;
consequently, in 2003 the concessionaire will be able to increase tolls regardless of inflation provided that
this does not negatively affect traffic.Tolls will be raised between 5% and 12%, depending on the time of
day.
In 2002, 407 ETR started building an additional lane along 3.6 kilometers to meet growing traffic demand.
The new stretch is planned to be operational in 2004. 407 ETR also completed a substantial improvement
in billing systems, which reduces toll collection costs and the number of unbilled transactions.
In Chile, all sections of the Temuco-Río Bueno (172 kilometers) and Collipulli-Temuco (144 kilometers)
concessions were opened; this, plus the concession that was already in operation (Talca-Chillán), means
that only two stretches of the Santiago-Talca concession remain to be opened. Moreover, the refinancing
of the Talca-Chillán concession was completed as a result of the change in the concession approved in
2001, which extended the concession term and substantially increased its value.
In 2002, Ferrovial bid for seven toll road projects and was shortlisted for seven others, including the toll
road plan in Greece. Cintra and another company have been shortlisted to present a Best and Final Offer
for another toll road project in Ireland (the Dundalk Western By-Pass).
Bid for seven
toll road projects
and shortlisted
for seven others
Artxanda tunnels in Vizcaya
Activities
27
Airports
In 2002, airport privatization decelerated worldwide due to the impact on air transport of the 11
Privatization
processes are
decelerating
September attacks.Airlines have suffered those events directly: they accumulated losses and reoriented
their strategies to reduce services and streamline costs, which has pressured airports to reduce landing
fees.
Large
transactions:
Sydney airport
Traffic in all markets did not recover as much as expected, the world’s largest airports concentrated
investments in improving security and most privatization plans were delayed or postponed indefinitely.
Despite this, there were significant transactions in 2002; for example, the concession of Sydney Airport,
which was acquired by a consortium involving Ferrovial.
Nevertheless, international experts believe that air travel will recover as soon as the uncertainties about
the world economy and the current geopolitical events are dispelled. IATA (International Air Transport
Association) has reduced its short-term growth projections, although it maintains its outlook for sizeable
growth in the medium term (5 years).
Ferrovial has advanced in its strategy of growth in the area of airport management. In 2002, it focused on
opportunities with the potential to add considerably to the value of its portfolio either because they had
sound growth projections or were in low-risk markets (e.g. Sydney Airport in 2002 and Bristol Airport,
the largest in Southwest England, acquired in 2001).
28
Annual Report 2002
Ferrovial’s objective is to be one of the world’s largest airport management companies.Therefore, it
participates in all the strategic decisions that affect business viability and profitability and compliance with
the contractual commitments of the concessions: definition and approval of the business plans, budgets,
investment plans, airport development programs and negotiations with the main customers.
One of the
world’s leading
airport
management
companies
Ferrovial’s airport division is now the world’s largest in airport privatization in terms of equity invested
and investment soundness. Its portfolio has good examples of profitability and diversification: one of the
world’s largest hubs (Sydney); regional airports in the EU (Bristol) and Latin America (Mexico and Chile);
and tourist airports (Mexico). Ferrovial is considering new investments based on its growth strategy while
hedging potential risk factors.
In June, Ferrovial made a giant step forward in airport management when, as part of a consortium, it
acquired the concession to operate Sydney Airport (Australia’s largest, with over 24 million passengers,
and the world’s largest airport privatization) for 6.3 billion Australian dollars (3.85 billion euros). Ferrovial
has a 19.6% stake in the consortium and invested 200 million euros, making it Spain’s largest private-
The world’s
largest airport
privatization
sector investor in Australia.The consortium includes a number of funds of the Macquarie group that invest
in airports, Hochtief Airports and other international financial institutions.
Sydney Airport is Australia’s main gateway and the region’s largest hub. It is the base of operations of
Qantas,Australia’s largest airline.The concessionaire obtained a 95-year contract to operate and manage
the airport and has pre-emptive rights to build a second airport if traffic demand exceeds Sydney’s
maximum capacity (foreseeably not before 2030). Located 8 kilometers from the central business district,
the airport handled 24.6 million passengers in 2002 (over 50% on international routes), it has three
runways and three terminals, and it covers about 890 hectares.
Sydney Airport has high growth potential, mainly in commercial and air traffic revenues, due to the
strategy that has already been implemented of attracting new companies and optimizing the transactions
of current customers. It will be one of the first airports in the world to handle code F aircraft (Airbus
380), which will increase passenger numbers and reduce operation numbers, thereby extending the life of
the current infrastructure. Ferrovial Aeropuertos actively manages the airport since it participates in the
company’s governing bodies and the strategy committees which set and monitor the airport’s business
plans.
Activities
29
In 2002, airline Go consolidated growth in Bristol Airport, after establishing its second base there in 2001.
This positive performance will be reinforced since Go was acquired by Easyjet, Europe’s largest budget
Traffic grew
by 12.5% at
Bristol airport
airline.Those circumstances boosted traffic through Bristol by 12.5%, despite the general situation in the
sector.Traffic growth led to an increase in the range of services: the airport’s car park was expanded and
the terminal layout was changed in order to encourage shopping by the growing number of passengers.
Special systems were designed to handle low-cost airlines, which operate with very short turnaround
times (20-30 minutes).
The airports in Southeast Mexico (Cancun and 8 regional airports) were affected by poor economic
performance in the US (their main international market) and deceleration in domestic flights by the
Mexican airlines (which were also impacted by 11 September). Overall, passenger numbers fell 2.3% yearon-year in 2002 and international traffic was the hardest hit (-3.5% vs. 2001).
In Chile, the economic deceleration also affected regional airports such as Antofagasta, where traffic fell
4.25% on 2001. However, measures have been implemented to return to the expected profitability level,
including additional commercial revenues.
Photography competition for employees in 2002. Carolina de la Vega
Airports managed by Ferrovial
Investment
managed
UK
Bristol international airport
Sydney
Sydney airport
Mexico
Aeropuertos del Sureste (9 airports)
Chile
Antofagasta airport
TOTAL
Amounts in millions of euros
30
Annual Report 2002
% Ferrovial
Ferrovial
investment
Status
Concession
period
325
50.0
35.1
Operational
Indefinite
3.850
19.6
201.5
Operational
2002-2097
120
24.5
37.7
Operational
1999-2049
10
100.0
1.3
Operational
2000-2010
4,305
275.6
Car parks
The car park sector in Spain is characterized by its diversification and the fragmentation of some activities.
Off-street car parks are developed and managed by a large number of local and family firms, which do not
plan to expand or grow, and by companies with nationwide coverage, such as Cintra Aparcamientos,
Growth strategy
and leading
position
which focuses on fast growth and is one of the market leaders.
The presence of construction companies in the car park sector is insignificant at the moment, except for
two large Spanish construction groups, although local mid-sized construction companies are increasing
their interest in developing off-street car parks as a way of diversifying.
Unlike other European countries, the presence of multinational car park companies in Spain is not very
significant, although in recent years large groups have begun to move in and plan to stay.
A Laxe automated car park in Vigo
Activities
31
Overall, car parks can be considered to be quite a stable consolidated sector in Spain and elsewhere, with
moderate growth and diversification prospects in the short term. Private-sector development of car park
infrastructure provides reasonable returns and it gives mid-sized companies the stability and funds to
promote other business areas, such as parking control services.
Largest and
most diversified
portfolio of
parking spaces
Ferrovial covers a range of activities in this sector: developing and operating car parks over the long term,
providing parking control and management services, developing and selling car parks for local residents,
and additional services, such as supplying and maintaining equipment.
Cintra Aparcamientos is Spain’s biggest car park company since it manages the largest number of parking
spaces (175,000) and contracts, it has the highest diversification in all the business segments and it has the
Vigo airport car park
most extensive presence in Spain (the only car park company in all 17 autonomous regions).
In the coming years, Cintra’s growth strategy will be based on:
• an increase in tenders by the public administrations and bodies that currently develop and manage
Developing car
parks for the
private sector
their car parks: airports, railway stations, ports, hospital, etc;
• development of business with large private-sector companies not related to the sector that manage
car parks in connection with their activity: shopping malls, department stores, hotel chains, etc; and
• cooperation with companies (especially at local level) that boost its positioning in certain regions.
Developments in the car park sector, in general, and regulated on-street parking, in particular, have been
paralyzed recently at municipal level due to the municipal elections in May 2003. Consequently, the
objective will be to obtain management contracts outside the municipal sphere, especially at airports,
ports, shopping malls and hospitals.
32
Annual Report 2002
Ferrovial obtained concessions to operate eight mixed car parks (off-street and residents) with a total of
3,603 parking spaces. With those contracts, a total of 22 car parks in Spain and Andorra are under
construction or will commence construction for future operation, with an investment of nearly 80 million
euros; they include Bilbao (987 parking spaces) and Pamplona (954), the largest underground car parks in
Spain. SMASSA, an investee of Cintra Aparcamientos, built four residential car parks in addition to bidding
for an off-street car park.
The Group managed 116,763 on-street parking spaces in 2002, i.e. an increase of 24.9% over the 108,119
it managed in 2001, thereby consolidating its leading position in Spain with a 41% market share.That
increase was due mainly to SER (a regulated parking service) in Madrid, with a total of 10,565 parking
41% market
share
spaces. In addition to Madrid, the Group obtained the concession to operate regulated on-street parking
in Huelva and Palma de Mallorca (the latter is the second-largest contract of this type in Spain in terms of
business volume).
Ferrovial also obtained concessions outside the sphere of municipal government: for example, a long-stay
car park at Madrid-Barajas airport (the first of its type, with shuttle buses linking the car park and the
terminals) and the extension of the contracts with Palma de Mallorca and Vigo airports (making Ferrovial
one of the main car park management partners of AENA, the Spanish airports authority).
One of the
world’s largest
airport car park
managers
Through Fábrica Española de Máquinas Expendedoras de Tiques (Femet), which supplies and maintains
equipment, Ferrovial markets three types of products: ticket vending machines for regulated on-street
parking spaces (4,791 machines were sold or leased of the 13,000 currently on the streets, i.e. a 37%
market share); IT terminals and applications for imposing and processing parking fines with regard to
regulated on-street parking facilities; and car park access control systems.
Parking spaces in 2002
Total: 175,000
On-street
68%
Residents
11%
Off-street
21%
Mall car park in Marbella
Activities
33
Real Estate
After years of sustained growth in business volume and earnings, Ferrovial's Real Estate division is one of
Spain's leading home builders. Ferrovial focuses primarily on building first homes and brokering used
homes as well as on managing the urban planning process and property assets.
Real estate development continued to grow in 2002, with production considerably higher than in 2001.
However, this growth could not conceal that the market was flagging, in line with the economic slowdown, which looks likely to continue for some years.The various segments of the market performed
differently: demand for homes enabled this segment to grow much faster than other tertiary products,
Steady growth
in residential
property
where the slow-down in investment had a negative impact on the development of new industrial
property and (to a lesser extent) commercial property, while the office market also declined.
Since 1998, production of new homes in Spain has expanded the pool of housing by over 12%—an
increase unmatched by any other European country. During the year, there were a total of 470,000 new
housing starts, i.e. in line with the figures in previous years and almost double the average of the last 20
years. At the same time, home prices increased faster than other goods: by an accumulated 87% since
1997, compared with 16% accumulated by the CPI and 15% by wages. In 2002, new home prices rose by
Home prices
will continue to
grow, but more
moderately
16.6% on average, and used home prices rose by 18%.The sharpest price increases were observed in the
larger cities, particularly in newly-constructed homes, whereas prices of holiday homes began to ease.
There is every sign that home prices will continue to rise, albeit more slowly, in 2003.
The economic slow-down and the disappearance of the “euro effect” suggest that home prices will ease
off considerably to come into line with CPI growth, while the volume of housing starts in the next two
years is expected to tail off. Nevertheless, current pricing pressures coupled with sustained demand are
driving prices higher, and the increase could be close to 10% in 2003.
34
Annual Report 2002
Housing prices in Spain
16.6
14.8
Housing starts in Spain
15.0
533,700
510,637
523,747
470,000
12.4
407,380
322,732
278,112
6.8
2.3
1.3
‘96
‘97
‘98
‘99
‘00
‘01
‘02
Data provided by the Development Ministry
‘96
‘97
‘98
‘99
‘00
‘01
‘02
Data provided by the Development Ministry
Casa del Cordón in Burgos. Renovated by Ferrovial
Activities
35
Home
affordability
stands at 47.5%
Another factor driving prices higher is the fact that the decline in interest rates (which have reached a
record low of close to 2.7%), coupled with wage rises, increased household’s debt-bearing capacity in
2002.The rising trend in house prices nevertheless prevented these improvements from impacting the
home affordability ratios, which worsened as the year went on, to reach 47.5%.
The real estate market in Spain continues to be very fragmented, with many small companies and a
sizeable local component.The top ten property developers represent less than 5% of the total market,
despite the considerable growth experienced in recent years.
Signs of
strong
earnings
in the sector
Earnings in the sector remained strong in 2002, and there were concentration moves, mainly due to
divestments by two big banks of “non-strategic” industrial investments. In the first half, construction
company Sacyr acquired control of Vallehermoso and Bami took over Metrovacesa. At the end of the
year, Italian companies Quarta Iberica and Astrim launched a bid for 75% of Metrovacesa, while Sacyr and
Vallehermoso accelerated their plans to merge. In line with the domino effect, the sector expects further
concentration moves in the coming months (some players have expressed willingness), assisted by the
characteristics of the market: the big property companies are still small with respect to their European
peers and share prices have been sharply penalized, thus setting the scene for acquisitions.This situation
might also lead to the flotation of large unlisted real estate companies.
An industrial
approach
based on
asset rotation
In 2002, Ferrovial’s Real Estate division continued its strategy of recent years, i.e. focused on home building
(primarily first homes) with a clearly “industrial” approach.This strategy involves rapid rotation of assets in
order to reduce risk.
Ferrovial is not immune to the foreseeable drop in demand during 2003, when the number of housing
starts will be more reasonable than in previous years. For this reason, its strategy will focus basically on:
- effective selection of land, concentrating on good locations and immediate development, thereby
reducing the development risk as quickly as possible;
- after geographic consolidation, Ferrovial will boost its field offices as much as possible so as to take
full advantage of scale economies;
- development timetables will be optimized, with effective cost control and standardization of
products and materials;
36
Annual Report 2002
- an integrated approach to sales through the creation of Ferrovial Servicios Inmobiliarios to group
Integrated
commercial
management and
boosting sales
channels
the new and second-hand home sales and the management of franchises under the Don Piso brand;
- particular emphasis on product marketing, by maintaining a range of sales channels (on-site offices,
Multicasa stores, Don Piso network and department stores).
- boosting the Customer Services area in order to assure customers a personalized service.
In 2002, Ferrovial’s Real Estate division again increased revenues and earnings considerably and
consolidated its position as one of Spain’s leading home-builders; its revenues increased by 65.2% to 619.7
million euros.At year-end, the order book amounted to 955 million euros, ensuring sales throughout 2003
First homes in the Soto de Sanchinarro I development
and a large part of 2004.
Activities
37
Residential property development
Under the Casas para Vivir brand, Ferrovial’s real estate division markets a product and service
characterized by transparency, personalized customer care, assured financing and guaranteed after-sales
Over 3,500
homes
were sold
service. In addition to directly developing homes, Ferrovial also builds apartment blocks for
condominiums, which also generates a stable flow of administration revenues. Ferrovial is also the national
leader in this market, with a sizeable presence in Madrid and Barcelona; in 2002 it also made inroads into
Murcia and the Balearic Islands and will progressively expand into the other regions.
In 2002, Ferrovial’s Real Estate division delivered 3,022 homes and sold 3,508 units. Don Piso brokered
2,853 homes during the year.
Developing
19,824 homes
in 24 cities
Ferrovial maintained its policy of selective geographic diversification and it is now present nationwide: it is
currently developing 19,824 homes in 24 cities in Spain, Portugal and Chile. In the last two years, the
group has established itself in the real estate market in Bilbao, San Sebastián, Logroño, A Coruña,
Pamplona, Murcia, Alicante, Palma de Mallorca and Valladolid.The Group invested a total of 343 million
euros in land purchases in 2002.
The Sanchinarro project in Madrid is a prime example of Ferrovial’s approach to greenfield development
and it is a model to be replicated elsewhere in Spain. Ferrovial Inmobiliaria is also one of the largest landowners in Sanchinarro and, in the first quarter of 2003, will deliver Soto de Sanchinarro I, the first batch of
homes in Sanchinarro that are not price-controlled.
Real estate locations
Cantabria
Galicia
Asturias
Basque Country
Castilla y León
Navarra
Rioja
Aragón
Cataluña
Madrid
Lisbon
Extremadura
Valencia
Castilla la Mancha
Andalucía
Canary Islands
Murcia
Ferrovial Inmobiliaria offices (9)
Ferrovial Inmobiliaria sales offices (74)
Don Piso sales offices and franchises (316)
38
Annual Report 2002
Balearic Islands
Marketing channels
During the year, Ferrovial consolidated the marketing initiatives which had been launched the previous
year in order to strengthen sales capacity, increase the portfolio of committed sales and assure continued
Over 400 points
of sale
activity in spite of the cyclicality of the property market. Ferrovial’s Real Estate division currently has over
400 points of sale throughout Spain.
In 2002, Ferrovial opened sales offices at the El Corte Inglés department stores in Zaragoza, Barcelona
and the Canary Islands; it will progressively make its full nationwide property portfolio available through
such outlets.
Don Piso, Spain’s largest realty brokerage, continued to expand, opening 76 new branches and franchises
to reach a total of 316 nationwide. This drive to establish the brand throughout Spain involved
strengthening the network in certain regions and making inroads into new markets, opening up access to
Opening of 76
new Don Piso
offices and
franchises
additional business. Don Piso currently has offices (directly-operated and franchises) in all the
Autonomous Regions of Spain.
Integrating Don Piso into Ferrovial’s Real Estate division has improved management processes and
generated synergies in brokerage and new property development. Don Piso focuses on property
brokerage, rent-controlled housing, mini-developments, home rental and property management. In 2002,
Don Piso also commenced marketing new developments by Ferrovial’s Real Estate division. As well as
being a powerful sales channel, Don Piso generates new business through the sale of used homes and the
acquisition of sites on which to develop homes.
As part of the search for new distribution channels, Ferrovial added information about its property
development portfolio to property portals and contributed to web sites in this area, which received
nearly 315,000 visits in 2002.This strategy was furthered by the pilot implementation of an innovative IT
system which will connect all the over 400 points of sale.
Other activities
In addition to home building, Ferrovial also looks at new investment and development opportunities in
the tertiary segment. In conjunction with Lar Grosvenor, Ferrovial presented the Omega project, a new
concept of business park located in Arroyo de la Vega (Alcobendas, Madrid).The development will consist
of eight independent buildings, primarily for offices. Construction will commence in 2003 and investment
will total 100 million euros.
In 2002, Ferrovial Inmobiliaria and Morgan Stanley reached an agreement to sell the company which owns
the Recoletos 7 and 9 building in Madrid to Ponte Gadea, S.L. and Fonsagrada, S.L.
Activities
39
Services
Ferrovial’s Services division includes its urban services (street cleaning, municipal solid waste collection
and comprehensive water management), facility management and integral upkeep of infrastructure. In
recent years, the group’s progress in the latter two areas has established it as a firm leader in the Spanish
market.
Urban services have been progressively privatized in Spain in the last twenty years, the aim being to attain
professional management, technical and financial capabilities, and assured quality and responsiveness in the
Professional
management,
technical and
financial
capabilities and
assured response
provision of street cleaning, municipal solid waste collection and treatment, and integral water
management.
Out of this privatization process have come major business groups, both Spanish and international, with
sizeable market shares, competing in what is a very mature market with sizeable entry barriers. Mid-term
projections are for continued privatization of municipal companies and services, greater investment and
new opportunities for winning urban services contracts in Spain. Nevertheless, the pace of government
tenders and of granting administrative concessions may slow in 2003 due to the municipal elections in
Spain.
In the search for efficiency and the desire to optimize management, companies have turned to external
managers in charge of coordinating and earning a return on assets that are not part of the companies’
core activity (property and non-core activities, from cleaning to security, maintenance, gardening, etc.)
which are nevertheless seen as operational needs that have a decisive impact on the bottom line.
Cost and risk
control through
facility
management
Outsourcing facility management has evident advantages for the outsourcer : it reduces and controls
operating costs and management risks; the company can dispose of its assets in better conditions and can
focus on its core business, freeing internal resources. This trend involves professionalizing not only
maintenance but also management.The Administration was the first to outsource facility management
and this system is now widely used in the private sector, as evidenced by the fact that this highly
fragmented and local market is now worth over 12 billion euros per year.
In the integral management of infrastructure, the current policy of public investment in infrastructure
(specifically, Spain’s Road Maintenance and Upkeep Plan) is shifting attention towards rationalizing and
optimizing existing infrastructures while ensuring they are maintained appropriately.
40
Annual Report 2002
Budgets for this area have grown in recent years, thus increasing interest on the part of private companies
(mainly construction companies) in this activity, which will foreseeably receive sizeable investments.The
integral maintenance market requires a high degree of specialization and demands companies with the
resources, technology and services in all facets of the activity, ranging from preventive maintenance on
small civil engineering projects to improvements in road layout and environmental factors, surfacing and
signage, among others.
The Development Ministry is expected to hold a number of tenders in the next few years to complete
the process of outsourcing the integral maintenance of the existing network of highways as well as
awarding the maintenance contracts for the new sections of the original national highways, under the
newly-defined highway management contracts.
Ferrovial’s strategy in the services area is focused on consolidating and expanding in the area of urban
services (street cleaning, municipal solid waste management and integral water management) and
enhancing our leading position in the area of facility management and integral maintenance of
infrastructure.
In addition to organic growth, the Services area plans to expand and attain critical mass by entering new
Consolidation
and growth
in new markets
markets connected to our main and more traditional businesses, such as Private Finance Initiative (PFI)
projects and analyzing investment opportunities in Spain and elsewhere which will afford rapid growth.
Under this approach, the Group acquired Grupisa (integral infrastructure maintenance), Eurolimp (making
Ferrovial one of Spain’s largest facility cleaners) and Novipav (one of Portugal’s principal road
maintenance companies).
Activities
41
The Services division increased revenues by 58.2% to 340.1 million euros and had a backlog of 816 million
euros at 2002 year-end (13.6% more than in 2001).
Services
by line of business
Urban services
20%
Infrastructure
maintenance
26%
Facility
management
54%
Urban Services
In 2002, the urban services business continued to grow steadily, serving a population of over two and a
Serving over
two-and-a-half
million people
half million people.
Ferroser manages urban services in major Spanish cities such as A Coruña (one of the first to implement
waste selection at source), Huelva and Madrid, and towns and cities throughout the country, including
Basauri, Durango and the Almanzora-Levante Consortium, which groups 40 municipalities in the province
of Almería.
In 2002, the Group began operations in Madrid, Sevilla and Extremadura under contracts for street
cleaning in the Madrid district of Vicálvaro, for waste collection, waste container cleaning and maintenance
and street cleaning in Tomares (Sevilla), and the concession of the municipal water supply for Esparragosa
de Lares (Badajoz).We also landed new contracts, most notably the waste collection contract for the
towns in Sector II of Almería province, cleaning in the ports of Almería and Vigo, and waste management
and cleaning at Mercabilbao (Bilbao’s wholesale food market).
Ferroser provides water supply, sewage, quality control and customer management services in a number
of municipalities in Spain, including Ponferrada and San Andrés de Rabanedo, in Castilla-León; Estepona,
Úbeda and Velez Blanco, in Andalucía; and Plá de Mallorca, in the Balearic Islands.
Facility management
Ferrovial has a leading position in the growing market for facility management, which consists of
integrating and optimizing all the services, utilities and installations required by a building’s users, from
maintenance, cleaning, power, security and internal mail to gardening. This approach optimizes the
42
Annual Report 2002
efficiency and return on building usage and has proven its effectiveness at the over 2,300 buildings (over 4
million square meters) which Ferroser manages in Spain, which include hospitals, museums, universities,
prisons, shopping malls, sports facilities, factories, offices and landmark buildings.
Integrated
management of
over four million
square meters
Ferrovial is also one of Spain’s leading facility cleaning companies through its subsidiary, Eurolimp. Founded
in 1974 and with a presence throughout Spain, Eurolimp is specialized in indoor cleaning (offices,
installations, landmark buildings, etc.), mainly in the hospital segment, where it services 50 hospitals with a
total of over 20,000 beds.
Eurolimp’s main contracts include the Ramón y Cajal, Fundación Jiménez Díaz,Virgen de Arrixaca and
One of Spain’s
largest facility
cleaning
companies
Marqués de Valdecilla hospitals. It also works for other entities such as the Spanish railways (Renfe) and
Post Office, universities,Aena, INEM and Insalud. In 2002, Eurolimp obtained contracts for the Alcorcón
(Madrid), Santurtzi and San Eloy (Vizcaya) and Virgen de la Luz (Cuenca) hospitals, plus the cleaning
contract for the La Laguna campus, among others.
Ferroser also provides facility maintenance, a segment where demand from the private sector is growing
(AC Hoteles and several hospitals, including Clínica Santa Elena, La Princesa, Severo Ochoa, MotrilGranada General Hospital and the Valencia University Hospital); industrial maintenance, mainly in the
pharmaceutical, chemical, food and automobile industries (Alcon Cusí, Kraft, Heineken,Thyssen Krupp and
Pirelli); and gardening (green areas at the airports of Bilbao, Lanzarote, Fuerteventura and Tenerife Sur)
and forestry services (forests in Castilla-León, Madrid, Burgos and Castilla-La Mancha).
The following contracts were significant in 2002:
- maintenance and cleaning for Post Office building and offices;
- facility management for EDS in Cataluña;
- maintenance of building and installations for the Spanish Defense Ministry, including the Naval
headquarters in San Fernando (Cádiz);
- integral maintenance of several facilities for Iberia;
- integral maintenance of several prisons, including the 27 prisons in Castilla-León and the Canary
Islands;
- integral maintenance of hospitals, including Alcorcón and La Paz (both in Madrid) and the Valladolid
University Hospital.
Integrated infrastructure maintenance
With more than 25 years’ experience, Grupisa is one of the leading Spanish companies in its sector.The
group specializes in integrated infrastructure maintenance, the manufacture and installation of marking
and signage on roads and at airports and in cities, and road traffic management.
Activities
43
Integrated
maintenance of
over 5,600 km
of roads
Grupisa is in charge of the integrated maintenance of 1,240 km of highways and 4,380 km of roads in
Spain. In 2002, the group used more than 3,5 million kg of paint (produced in its Ajalvir plants) for road
marking and installed 67,700 road signs and 13,000 m2 of traffic signs (manufactured in the plant at Navas
del Rey).
In addition to its three core activities (manufacture, installation and road maintenance), Grupisa is studying
opportunities in the sphere of dynamic signage, urban signage and the upkeep and maintenance of other
infrastructures (e.g. waterworks, ports, networks).
As part of our strategy to grow and expand into other countries, Ferrovial acquired Novipav, one of
Novipav is one of
Portugal’s largest
infrastructure
maintenance
companies
Portugal’s leading infrastructure maintenance companies. Novipav maintains roads, repairs and maintains
machinery and manufactures bituminous emulsions.The development of Portugal’s roads with EU funding
will lead to additional investments in integrated maintenance; at present most road maintenance in
Portugal is provided by the government, using its own resources.
The main contracts obtained in 2002 are as follows:
- upkeep and operation of the M-40 (Madrid);
- upkeep of the A-7 toll road (Valencia);
- upkeep, maintenance, signage and marking of the roads in the city of Sevilla (Ferrovial obtained
contracts to provide these services in Málaga, Madrid,Valencia and Jerez in 1999-2001);
- upkeep and operation of the La Plata (Caceres) and Mediterráneo highways;
- supply and installation of signage at the Ordesa & Monte Perdido, Cabañeros, Cabrera and Sierra
Nevada national parks;
- special measures for traffic control and regulation in the accesses to the province of Madrid and its
hinterland and in Cataluña;
- integral upkeep of roads in the province of Álava—the first such contract awarded in Spain under
the “Quality Standards” model.
44
Annual Report 2002
Telecommunications
Ferrovial is present in the telecommunications market through its 10% stake in Ono, Spain's leading
integrated broadband operator.
Ono
Ono provides telephone, television and Internet services to residential customers in Valencia,Alicante,
Castellón, Murcia, Albacete, Huelva, Cádiz, Mallorca and Cantabria, with a potential market of 4 million
households. Ono offers the corporate market advanced communications services and applications
through its own nationwide network.
Ono became operational in 1998. In four years it has surpassed 500,000 customers, enabling it to be
Largest integrated
broadband
operator, with
500,000 customers
present in one out of three households in the regions where it operates. Ono already provides over
925,000 services and has over 8,600 corporate customers to which it provides advanced voice and data
services in the aforementioned provinces and elsewhere in Spain.
The Ono network is one of the largest broadband communications infrastructures in Spain; it has more
than 6,280 km of local network and nearly 6,300 km of backbone. Expansion of the infrastructure means
that Ono now covers 80 cities in Spain with over 1 million homes passed (i.e. ready to receive its
communications services).
In 2001, Ono obtained a financing package worth 1.1 billion euros which funds its entire business plan.The
deal consisted of a syndicated preferential and secured loan amounting to 800 million euros and a capital
contribution of 300 million euros by shareholders, in direct proportion to their respective holdings, in the
first quarter 2002.
As part of its financing, Ono issued high-yield bonds with a nominal value of about 950 million euros
between 1999 and 2001 at an annual interest rate of 14%. In 2002, Ono took advantage of the fact that its
bond was trading about 30% below nominal and repurchased the bonds, thereby reducing debt by about
530 million euros.The bond repurchase was financed with 95 million euros contributed by shareholders
Break even
and a bank loan of 50 million euros.
In 2002, Ono posted 15 million euros in earnings before interest, taxes, depreciation and amortization
(EBITDA) due to higher revenues, an improved gross margin and containment of operating expenses.
Activities
45
Risk management
This aim of this chapter is to give a brief summary of the main risks Ferrovial faces in its day-to-day business and the
policies in place to control them. Given that Ferrovial has ample operations experience, it has the technical capacity to
adequately carry out projects from the point of view of both bidding and execution.Accordingly, discounting the risk of
poor management of operations, the following types of risks are considered to exist:
1. Operating risks
Contruction
Apart from questions concerning the environment, quality and personnel, the main risk is collection from customers.To
that effect, there are strict contractual procedures in place. 60% of the backlog is made up of public works (no collection
risk), and there are no particularly large clients, with the exception of the public sector. In international operations, the
Group is par ticularly cautious and projects are only bid for when they are linked to concession companies, where a
stable presence can be relied on, or where collection is guaranteed by multilateral finance organizations.
Infrastructure
There are various risks depending on the concession's phase; the most important risks are construction, legal, financial and
operational. Construction risks are managed internally and, in cases of infrastructures outside Spain, we always collaborate
with local partners, who are required to participate in the equity of the concession company.
Our investment strategy is aimed at OECD countries with stable political and legal systems, where it is possible to finance
the project with local currency in the long term.The main operating risks are the initial traffic figures and their subsequent
trend, which we try to mitigate by carrying out various studies before bidding.
Real Estate
The main risk is in land investments and their potential depreciation. Our real estate business is based on a very industrial
approach, where precedence is given to the rapid rotation of assets.To that effect, 80% of land bought is zoned for
development in the short-term.There is also a cyclical risk and, to address it, we only operate in the new housing market,
which is considered the least cyclical of all real estate products.
Services
This area is very similar to Construction as regards environmental and personnel risks.
2. Market risks
Changes in interest rates
Excluding concessionaires’ debt, interest rate changes have a low impact on the bottom line. Sensitivity to a movement of
100 basis points will be less than 0.3 million euros in net income. Although the policy until now has been not to hedge
46
Annual Report 2002
changes in the interest rate, this may be reconsidered depending on the Group's financial structure and macroeconomic
variables.
The financing of infrastructure projects is characterized by being linked to project cash flow, without guarantees from
shareholders.The impact on the concession companies' debts could be greater.At the end of 2002, a rise or fall of 100
basis points in interest rates would cause a fluctuation in the region of 3 million euros in Group net income.
In this line of business, the main impact for the Group is perhaps in valuation, in that different discount rates are applied in
the financial models used to value infrastructure operations.
Changes in exchange rates
The hedging policy for exchange rate risks is designed to ensure that the projected cash flow is not affected by variations
in the exchange rate.The following are hedged specifically:
- multi-currency projects: where collections and payments are made in different currencies. Aim: to ensure the
outcome;
- expected profit, dividends or capital refunds from foreign subsidiaries. Aim: to accelerate repatriation and assure
projected cash flow in the short/medium term.
Ferrovial does not hedge the exchange rate risk in long-term investments made in currencies other than the euro.Apart
from the Chilean peso, all investments are made in stable countries and the main risk currencies are the Canadian dollar,
the Australian dollar and the Polish zloty. In 2002, these currencies represented just under 20% of total Group revenues
and around 15% of net income.The impact on net income of a 10% variation in the euro exchange rate with respect to
these currencies is approximately 4 million euros.The impact on equity would be greater (80 million euros) and would be
booked as translation differences.
3. Environmental risks
All operations carried out by Ferrovial have an important impact on the environment. Our policy regarding the
environment, including management systems, certificates obtained and any other relevant information, is presented in a
separate chapter of this Annual Report.
4. Legal risks
Ferrovial works within a very complex regulatory framework derived from the different business sectors and geographical
locations in which it operates. Reporting to the General Secretary, there are autonomous, decentralized legal departments
in each business area.When dealing with foreign investments, which are usually linked to concession projects, we rely on
prestigious external advisers.
5. Other risks
There are two other risks present in the majority of the company's operations: accidents in the workplace and quality.As
with environmental risks, this topic is covered elsewhere in the Annual Report.
Risk management
47
Sustainability
The incorporation of social responsibility policies into business management is becoming more and more
important internationally and it is a key competitive factor for companies, as environmental and social
A key
competitiveness
factor for
companies
performance is increasingly influential in the decision-making processes for large investments.This new
international trend ensures that best business practices in areas such as human rights and environmental
management influence companies’ share performance. There are currently many definitions of
sustainability but it is universally agreed that it represents a management framework which seeks
continuous improvement in a company’s mode of operation and products by integrating economic,
environmental and social objectives into day-to-day business and strategic planning.
Ferrovial understands that social responsibility should go hand in hand with issues such as continued
profitable growth, leadership, good practices in corporate governance, ethics, transparency, reduction in
environmental impact, quality, innovation and improvement, training, risk prevention, fight against
Align day-to-day
activities with
financial,
environmental
and community
objectives
discrimination, job creation, collaboration with underprivileged groups, equal opportunities, accessibility,
etc.The incorporation of these factors into the Annual Report, Ferrovial’s selection as the first Spanish
construction company to be included in the Dow Jones Sustainability Indexes, and our membership of
The Global Compact are all steps designed to make this commitment a reality, in the belief that a higher
level of socio-economic development is beneficial to business.This commitment should be maintained
with a constant flow of new proposals. Ferrovial has created a Sustainability Committee to monitor action
in this area, evaluate new proposals and ensure the continuous improvement of its policy in this field,
using new initiatives to contribute to development.
Annual Report
For the second consecutive year, Ferrovial has published an Annual Report which combines financial
information, the annual accounts and management report, with the policy, commitment and main steps
regarding the environment and community development, integrating human resources and community
We follow the
recommendations
of the GRI
involvement. A strategic decision was made to include all these items in a single report, following the
recommendations of the Global Reporting Initiative (GRI), a globally accepted sustainability information
model.
The Global Compact
In 2002, Ferrovial became a member of The Global Compact, an initiative promoted by Kofi A. Annan,
Secretary General of the United Nations, which is committed to promoting and respecting nine universal
principles in the fields of human rights, labor and the environment.
48
Annual Report 2002
Principles of The Global Compact::
Human Rights: business should support and respect the protection of internationally proclaimed
human rights within their sphere of influence; and make sure they are not complicit in human rights
abuses.
Labor: business should uphold the freedom of association and the effective recognition of the right to
Promote and
respect nine
universal
principles
collective bargaining; the elimination of all forms of forced and compulsory labor ; the effective
abolition of child labor; and eliminate discrimination in respect of employment and occupation.
Environment: business should support a precautionary approach to environmental challenges;
undertake initiatives to promote greater environmental responsibility; and encourage the
development and diffusion of environmentally friendly technologies.
Dow Jones Sustainability Indexes
Ferrovial is the first Spanish construction group to be included in the Dow Jones Sustainability Indexes, the
world’s main sustainability benchmarks.
The annual review of the indexes, which took place in Zurich (Switzerland) in September 2002, addressed
The world’s main
sustainability
benchmark
300 companies from 23 countries which manage their activities with sustainability in mind.The Dow Jones
STOXX Sustainability Indexes comprise a selection of the companies in the Dow Jones STOXX 600
which have the best performance in terms of sustainability.The selection process is conducted in line with
guidelines defined by Dow Jones Sustainability Indexes and subject to external review.
The components examined in each of the dimensions are as follows: Economic (corporate governance,
investor relations, strategic planning, risk management, code of conduct, etc.); Environmental (disclosure in
annual report, environmental management and performance, recycling and efficient energy use policies,
etc.); and Social (human capital indicators, human resources management, safety policy, and social
involvement in the surrounding community).
Industry Average on a Global Basis
FERROVIAL
Best Company on a Global Basis
Environmental Dimension
Total Score
0%
50%
100%
50%
100%
50%
100%
Social Dimension
Economic Dimension
0%
0%
50%
100%
0%
Dow Jones index data
Sustainability
49
Management Report
- Business performance
- Share performance
- Audit and Control Committee Report
52
69
74
- Financial Statements and notes
- Auditors’ Report
76
167
168
Management Report 2002
GRUPO FERROVIAL, S.A. AND DEPENDENT COMPANIES
I. BUSINESS PERFORMANCE IN 2002
I.1 Key aggregates
Ferrovial increased net income by 109% to 455.8 million euros. Excluding the effect of the extraordinary gain
due to Macquarie Infrastructure Group acquiring a stake in Cintra, Concesiones de Infraestructuras de
Transporte, S.A. and to extraordinary provisions, net income rose 18%.
Operating income increased by 29.9%, from 373.5 million euros to 485 million euros.
The key operating and financial aggregates are as follows:
Financials
Dec. 02
Dec. 01
Change (%)
Net income
455.8
218.3
108.8
Net income ex. Cintra deal
257.9
218.3
18.1
1.84
1.56
18.1
20.7%
19.4%
EPS ex. Cintra deal
ROE ex. Cintra deal
Operating income
Net revenues
Net financial debt / (Cash)
Leverage
Gross investments
52
Annual Report 2002
485.1
373.5
29.9
5,040.2
4,240.0
18.9
(303)
287
-
24%
541
430
Operating figures
Dec. 02
Dec. 01
5,922
5,599
Real Estate pre-sales
655
604
8.4
Real Estate backlog
955
767
24.6
Services backlog
816
718
13.6
Autema
15,007
13,773
9.0
Ausol I
15,397
13,201
16.6
254,978
235,952
8.1
Change (%)
5.8
Toll road traffic (ADT)
ETR 407 (Trips)
Highlights of 2002:
– The acquisition by Macquarie Infrastructure Group of a stake in Cintra was sealed in January 2002.
– An additional 5.8% stake in 407 ETR (Canada) was acquired in March.
– The M45 toll road and the Artxanda tunnel opened in May, and the Estepona-Guadiaro toll road in August.
– The concession for Sydney Airport (Australia) was obtained in June.
– The contract for the construction of Warsaw airport was awarded to Ferrovial Agromán and Budimex
(60/40) in June.
– Ferrovial was included in the Dow Jones Sustainability Index in September.
– Ferrovial was awarded the N4-N6 toll road in Ireland in November.
Management Report
53
I.2 RESULTS
Dec. 02
Net sales
Dec. 01
% of revenues
Change (%) Dec. 02
Dec. 01
5,040.2
4,240.0
18.9
100.0
100.0
36.2
32.5
8.5
0.7
0.8
4.4
5.9
-9.0
0.1
0.1
Total operating revenues
5,080.8
4,278.4
18.8
100.8
100.9
External and operating expenses
3,766.2
3,208.4
17.4
74.7
75.7
Personnel expenses
663.1
543.9
21.9
13.2
12.8
Period depreciation
82.5
88.8
-7.1
1.6
2.1
Provision to Reversion Fund
20.6
11.6
78.6
0.4
0.3
Change in operating provisions
63.4
52.2
21.5
1.3
1.2
4,595.8
3,904.9
17.7
91.2
92.1
485.0
373.5
29.9
9.6
8.8
Other revenues
Change in finished product and product in process inventories
Total operating expenses
NET OPERATING INCOME (1)
Financial revenues
60.3
59.7
1.0
1.2
1.4
Financial expenses
-85.0
-109.8
-22.5
-1.7
-2.6
Financial result
-24.7
-50.1
-50.6
-0.5
-1.2
12.4
10.5
18.4
0.2
0.2
Amortization of goodwill in consolidation
-24.0
-10.2
136.0
-0.5
-0.2
INCOME FROM ORDINARY ACTIVITIES
448.7
323.7
38.6
8.9
7.6
Extraordinary income
235.6
24.9
844.5
4.7
0.6
INCOME BEFORE TAXES
684.3
348.7
96.3
13.6
8.2
Income tax
-207.3
-112.0
85.1
-4.1
-2.6
CONSOLIDATED INCOME
477.0
236.7
101.5
9.5
5.6
Minority interests
-21.2
-18.4
15.0
-0.4
-0.4
NET ATTRIBUTABLE INCOME
455.8
218.3
108.8
9.0
5.1
Equity-accounted affiliates
(1) In line with Spanish and international regulations, financial expenses incurred during the construction of toll roads are capitalized.
Until December 2001, some companies complied with this rule by means of a credit to the P&L under "Capitalized in-house work on fixed assets" (a revenue
account), which forms part of operating income.
This distorted group operating income and, consequently, the overall percentage sales margin (by increasing both of them), without having any real impact on
group net income since it was netted against higher financial expenses.
In order to avoid this distortion of group operating income and ensure proper comparability between periods, it has been decided to book the capitalization
in the form of a credit to the financial expenses account, starting 1 January 2002.
The January-December 2002 figures are presented in line with this approach, and the figures for January-December 2001 have been adjusted to the same
approach to allow for comparison.
54
Annual Report 2002
a. Net revenues – Sales
Net revenues increased by 19%.
The individual lines of business performed as follows
Construction
Real Estate
Dec. 02
Dec. 01
Change (%)
3,788.9
3,431.7
10.4
619.7
375.2
65.2
Infrastructure
449.9
345.8
30.1
Services
340.1
215.5
57.8
-158.4
-128.2
5,040.2
4,240.0
Adjustments*
Total
18.9
(*) This item relates to consolidation adjustments for intra-group sales.
The main factors behind these growth figures were:
- Construction: a rapid pace of production, primarily in Spain (+22%) due to stepped-up execution of projects
under the Infrastructure Plan.
- Infrastructure: increase in revenues from 407 ETR (+18%) and Ausol (+27%), a larger contribution from the
Chilean toll roads and increased billings at Bristol airport.
- Real Estate: a sharp increase in the number of homes delivered and contribution from Don Piso (half year in
2001).
Sales by region
Dec. 02
Dec. 01
Change (%)
Spain
3,602
72%
2,821
67%
27.7
Other countries
1,439
28%
1,419
33%
1.4
Total
5,040 100%
4,240 100%
18.9
Although international sales rose by 1% (in a situation of adverse exchange rates), the rapid growth in all lines of
business in the domestic market reduced the weighting of international activities.
The foreign countries making the greatest contribution are Poland (12%), Portugal (5%), Canada (4%) and Chile (4%).
Management Report
55
b. Personnel expenses
The 21% increase in this item is due to the fact that the average labor force rose from 23,522 to 28,454,
primarily because of the addition of Eurolimp and other labor-intensive services businesses.
c. Operating income
Operating income grew by 30%.The breakdown by line of business is as follows:
Dec. 02
Dec. 01
Construction
155.2
122.5
26.7
Real Estate
103.8
88.0
18.0
Infrastructure
210.7
161.1
30.8
Services
18.4
11.8
55.9
Adjustments / Other
-3.1
-9.9
485.0
373.5
Total
Change (%)
29.9
The operating margin was 9.6%, up from 8.8% in December 2001.
This sizeable increase was due to rapid growth in sales in the various divisions and an improvement in
construction margins despite the decline in margins in Real Estate (from 24% to 17%) caused by the sizeable
land sales in 2001 (65 million euros) at a gross margin of 41%.
Operating income by division
Dec. 02
Dec. 01
Construction
32%
32%
Real Estate
21%
23%
Infrastructure
43%
42%
4%
3%
100%
100%
Services
Consolidated Group
The more recurring activities (Infrastructure and Services) contributed close to 50% of operating income.
d. Financial result
Dec. 02
Concession companies
Rest of group
Total
56
Annual Report 2002
Dec. 01
-34.6
-24.5
9.9
-25.5
-24.7
-50.0
Concession companies' net financial expenses increased as a result of higher debt due to full consolidation of the
Santiago-Talca project (US$ 421 million), which was equity-accounted up to September 2001.
The rest of the group recorded a positive financial result in 2002 due to the fact that the group had a net cash
balance, contrasting with a debt position in 2001.
The net cash balance at 2002 year-end arose from the sale of 40% of Cintra in January for 816 million euros.
The net cash balance at the end of the period was 302.9 million euros (excluding concessionaire's debt, which is
without recourse to Ferrovial), compared with a debt of 287 million euros in 2001.
Leverage is zero, compared with 24% in 2001.
e. Equity-accounted affiliates
Dec. 02
Construction
-0.5
Real Estate
6.7
Infrastructure
6.0
Services
0.2
Total
12.4
Earnings from equity-accounted affiliates reached 12.4 million euros, mainly from the Real Estate division (7
million euros), due to the sale of a building in the joint venture with Morgan Stanley, and Infrastructure (6 million
euros) because of the positive contribution by Europistas, whereas the inclusion of the results of Sydney Airport
in the July-December period had a negative impact amounting to 4.6 million euros.
f. Goodwill amortization
Goodwill amortization more than doubled with respect to 2001, from 10 million euros to 24 million euros, due
to amortization of goodwill arising on the increase in Ferrovial's holdings in Europistas and Ausol in December
2001, the increase in the stake in 407 ETR (March 2002), the acquisition of Eurolimp (December 2001) and the
amortization of goodwill at Bristol Airport.
Goodwill on the balance sheet went from 222.5 million euros to 335.7 million euros in 2002.
Management Report
57
g. Extraordinary results
Extraordinary items totaled 236 million euros, mainly from the Cintra transaction.The principal items are as
follows:
Detail of extraordinary items
Dec. 02
Cintra transaction
383.0
Provisions for Latin America (1)
-156.8
Budimex
-11.7
Portfolio provisions and other
-7.1
Sale of Wanadoo
11.2
Sale of treasury stock
17.0
Total extraordinary items
235.6
(1) This provision is to adjust the book value of Latin American countries in the Infrastructure division,
particularly the toll road operators in Chile.
Excluding the aforementioned effect and the Cintra transaction, extraordinary income amounted to 9.5 million
euros (25 million euros in 2001).
h. Taxes
The book expense for taxes amounts to 207 million euros, implying a tax rate of 30.3%.
i. Net income
At 456 million euros, net income increased by 109%.
Net income rose 18% excluding extraordinary gains on the sale of Cintra and the provisions for investments by
Grupo Ferrovial and Cintra in Latin America:
Income from ordinary activities
Extraordinary items
Income before taxes
tax rate
Taxes
Dec. 02
Dec. 01
448.7
323.7
9.5
24.9
458.2
348.7
-30.4%
-32.1%
-139.1
-112.0
Income before minority interests
319.1
236.7
Minority interests
-61.2
-18.4
Net income
257.9
218.3
Change (%)
38.6%
31.4%
34.8%
18.1%
An annex attached to the accompanying notes to the financial statements contains the income statement
broken down by division.
58
Annual Report 2002
I.3 ANALYSIS BY BUSINESS AREA
Note: For uniformity with 2001, the earnings before taxes (EBT) of the Construction and Infrastructure businesses do
not include the extraordinary gains on the Cintra transaction.
a. Construction
Dec. 02
Dec. 01
3,788.9
3,431.7
10.4
Operating income
155.2
122.5
26.7
Operating margin
4.1%
3.6%
178.8
147.2
4.7%
4.3%
5,922
5,599
63
57
Sales
EBT
EBT margin
Backlog
Investment
Change (%)
21.5
5.8
Production increased rapidly, principally in Spain (+22%) due to the faster pace of execution of the work linked
to the Infrastructure Plan.
The operating margin rose 50 basis point to 4.1% despite the limited (though positive) contribution by Budimex,
which improved considerably in the second half.
The backlog increased despite the rapid pace of production: it went from 5.6 billion euros to 5.9 billion euros
(+6% year-on-year).
• Construction data ex-Budimex
Sales
Dec. 02
Dec. 01
Change (%)
3,170.1
2.745.0
15.5
Operating income
152.4
123.9
23.0
Operating margin
4.8%
4.5%
195.5
167.2
6.2%
6.1%
EBT
EBT margin
16.9
Management Report
59
• Budimex figures
Dec. 02
Dec. 01
618.8
686.8
-9.9
2.8
-1.4
300.0
Operating margin
0.5%
-0.2%
EBT
-16.7
-20.0
EBT margin
-2.7%
-2.9%
515
745
Sales
Operating income
Backlog
Change (%)
16.5
-30.9
In local currency, sales fell 2%, compared with an estimated 8.8% decline in the overall Polish market in 2002.
Excluding the exchange rate effect, the backlog shrank by 23%. In addition to difficulties in the construction
market in Poland in the last two years (-8% and -8.8%), the decline in the backlog is also due to the
implementation of Ferrovial contracting methods.
Budimex quarterly performance
2002
Sales
January-March
Operating
income
Margin
69.1
-2.6
-3.8%
April-June
140.6
-2.7
-1.9%
July-September
169.4
-0.8
-0.5%
October-December
239.7
8.9
3.7%
January-December
618.8
2.8
0.5%
b. Real Estate
Sales
Change (%)
619.7
375.2
65.2
18.0
103.8
88.0
Operating margin
16.8%
23.5%
77.2
73.3
12.5%
19.5%
Presales in the year
655
603
8.6
Backlog
955
767
24.6
Land purchases
343
314
EBT margin
Annual Report 2002
Dec. 01
Operating income
EBT
60
Dec. 02
5.3
Sales increased by 65% due to the rapid pace of deliveries.This growth figure is particularly positive considering
that the December 2001 figure included 65 million euros of land sales, with a margin of 41%.
Eliminating this effect, the operating margin was approximately 19% in 2001.
Despite 18% EBIT growth, the increase in EBT was much lower due to provisions in 2002 (6.8 million euros),
contrasting with extraordinary gains in 2001 (5.7 million euros).
The backlog was 955 million euros, 25% more than at 2001 year-end; this backlog figure guarantees sales in 2003
and a sizeable part of 2004.
The pre-sales figure improved substantially in 2002, with a 9% increase, inverting the negative trend observed
earlier in the year (-11% through June) due to the improvement in the sale of new developments in the fourth
quarter.
The breakdown by activities is as follows:
Dec. 02
Dec. 01
Change (%)
437.6
84.5
19.3%
188
31.8
16.9%
133
166
76.2
31.9
41.9%
95.2
43.9
46.1%
-20
-27
38.1
2.1
5.5%
65.4
26.9
41.1%
-42
-92
69.4
18.1
26.0%
26.6
1.8
6.8%
161
903
5.5
5.3
96.4%
0
0
-7.1
0.0
0.2
0
Total sales
619.7
375.4
65
Total gross income
As % of sales
Operating expenses
141.9
22.9%
-38.1
104.4
27.8%
-16.4
36
Operating income
Operating margin
103.8
16.5%
88.0
23.4%
18
Direct home development
Sales
Gross income
As % of sales
Condominium development
Sales
Gross income
As % of sales
Land sales
Sales
Gross income
As % of sales
Realty brokerage (Don Piso)
Sales
Gross income
As % of sales
Tertiary
Sales
Gross income
As % of sales
Intra-group adjustments
Sales
Gross income
Management Report
61
c. Infrastructure
Dec. 02
Dec. 01
Change (%)
Sales
449.9
345.8
30.1
Operating income
210.7
161.1
30.8
Operating margin
46.8%
46.6%
EBT
155.3
117.4
EBT margin
34.5%
34.0%
Investment
417.7
312.0
32.3
Sales increased rapidly due to growth in revenues from 407 ETR (+18%) and Ausol (+27%), a greater
contribution from airports and the contribution from the Chilean toll roads.
Earnings before taxes do not include 232 million euros in extraordinary results due to the sale of 40% of Cintra
and an extraordinary provision.
Breakdown by business area
Dec. 02
Dec. 01
Change (%)
Toll roads
Revenues
337.5
252.9
33.5
Operating income
182
138.4
31.5
Operating margin
53.9%
54.7%
Car parks
Revenues
75
66.6
12.6
Operating income
14
13.6
2.9
Operating margin
18.7%
20.4%
Revenues
37.4
26.3
42.2
Operating income
14.6
9.1
60.4
Operating margin
39.0%
34.6%
Airports
62
Annual Report 2002
The key aggregates of the principal toll road concession companies are as follows:
407 ETR
Dec. 02
Dec. 01
%
Sales
Operating income
Operating margin
Number of trips
208.6
109.5
52.5%
254,978
176.4
97.5
55.3%
235,952
18
12
Ausol Total
8
Dec. 02
Dec. 01
%
Sales
Operating income
Operating margin
33.2
23.8
71.7%
26.2
17.4
66.4%
27
37
Ausol I
Sales
Operating income
Operating margin
ADT
30.6
22.0
71.9%
15,397
26.2
17.4
66.4%
13,201
17
26
Ausol II
Sales
Operating income
Operating margin
ADT
2.6
1.8
69.2%
12,295
Dec. 02
Dec. 01
%
27.0
23.0
85.2%
15,007
24.5
18.2
74.3%
13,773
10
7
Dec. 02
Dec. 01
%
51.6
32.8
63.6%
25.4
15.6
61.4%
103
110
Dec. 02
Dec. 01
340.1
18.4
5.2%
8.0
2.4%
816
17
215.5
11.8
5.5%
6.4
3.0%
718
17
Autema
Sales
Operating income
Operating margin
ADT
Chilean toll roads
Sales
Operating income
Operating margin
17
9
d. Services
Sales
Operating income
Operating margin
EBT
EBT margin
Backlog
Capital expenditure
Change (%)
57.8
55.9
25.0
13.6
There was a significant improvement in both sales and operating income.The addition of Eurolimp (acquired in
late 2001) contributed 86 million euros in sales and an operating loss of 0.2 million euros.
But for the addition of Eurolimp, sales would have risen by 18% and the operating margin would have been 7%.
Management Report
63
I.4 CONSOLIDATED BALANCE SHEET AND OTHER FINANCIALS
Dec. 02
Due from shareholders for uncalled capital
Dec. 01
9.2
12.2
5,753.9
5,781.4
GOODWILL IN CONSOLIDATION
355.7
222.5
DEFERRED EXPENSES
875.4
752.6
CURRENT ASSETS
4,272.3
4,212.6
Inventories
1,213.9
1,021.8
Accounts receivable
1,982.1
1,878.6
Cash and cash equivalents
1,013.6
1,252.2
Toll road concession companies
293.4
451.2
Other companies
720.3
801.3
62.7
60.1
11,266.6
10,981.3
1,494.6
1,197.7
774.3
425.3
9.2
8.4
68.8
51.6
FIXED ASSETS
Accrual accounts
TOTAL ASSETS
SHAREHOLDERS’ EQUITY
MINORITY INTERESTS
NEGATIVE DIFFERENCE IN CONSOLIDATION
DEFERRED REVENUES
PROVISIONS FOR CONTINGENCIES AND EXPENSES
LONG-TERM DEBT
Interest-bearing debt
289.4
105.5
4,816.6
5,641.3
4,315.3
5,245.4
4,000.4
4,348.6
Other companies
314.9
896.8
Trade accounts payable
501.3
395.9
3,663.4
3,460.2
393.8
348.3
290.8
157.2
Other companies
103.0
191.1
2,618.2
2,481.6
Other current liabilities
612.2
558.6
CURRENT LIABILITIES
Accrual accounts
TOTAL LIABILITIES
39.1
71.8
150.3
91.3
11,266.6
10,981.3
There is a detailed analysis of the change in all line-items of the balance sheet by division in the accompanying
notes to the financial statements.Additionally, a balance sheet detailing all the line-items by division is attached as
an annex.
64
Annual Report 2002
a. Net cash balance at 31-12-02
Ferrovial
Debt
Long term
Short term
Concessionaires
Total
417.9
4,291.2
4,709.1
314.9
4,000.4
4,315.3
103.0
290.8
393.8
Cash & cash equivalents
720.8
293.4
1,013.6
Net position
302.9
-3,997.8
-3,695.5
Ferrovial had a net cash balance of 302.9 million euros (the concessionaires' debt carried on the balance sheet is
without recourse to Ferrovial).
Change in cash balance
Debt at beginning of 2002
-287
Funds from operations
292
Funds from investments
Sale of CINTRA
Capital expenditure
Dividends paid
Minority interests
324
816
-492
-59
51
Other
-19
Debt at end of 2002
303
Change in cash balance
-590
Management Report
65
b. Cash flow by division
(with equity-accounted concession companies)
2002
2001
Funds from operations
292.2
401.7
Construction
355.3
428.4
-184.8
-99
121.1
59.3
0
5.3
0.3
7.7
Funds from investments
324.1
-149.2
Construction
-43.3
-11.8
-1.6
-0.2
Infrastructure
370.4
-147.7
Services
Real Estate
Infrastructure
Services
Corporation / Other
Real Estate
-10.9
-10.4
Corporation / Other
9.5
20.9
Funds from activities
616.2
252.5
In 2001, the annual recurring flow of funds from operations in Construction was boosted by extraordinary
collections in December.
The negative funds from operations figure in Real Estate reflects the acquisition of land for 384 million euros.
In Infrastructure, the net positive funds from investments reflect the 816 million euros collected in the Cintra
transaction.
c. Gross capital investment in the period
Construction
Real Estate
Infrastructure
417.7
16.6
Telecommunications
32.6
TOTAL
Annual Report 2002
8.8
Services
Other
66
62.6
3.1
541.4
In the January-December period, the main investments were in the Infrastructure area, principally 233 million
euros paid for a 19.6% stake in the Sydney airport concession and 127 million euros for an additional 5.8% of
407 ETR (Toronto).
The principal investment in telecommunications in the period was the capital increase at Ono in the first quarter.
d. Capitalization of financial expenses on infrastructure in operation under the Ministerial Order dated
10 December 1998 which approved the Spanish General Accounting Plan for toll road concession
companies
Under Spanish accounting regulations, and subject to certain conditions, toll road concession companies must
capitalize part of the financial expenses accrued after the end of the construction period.This regulation is
explained in detail in the accompanying notes to the financial statements.
At present, this method is not expressly regulated under International Accounting Standards, which will be
obligatory for listed consolidated groups from 2005 onwards.The purpose of this note is to disclose the impact
on the group's 2002 income of not capitalizing financial expenses accrued after the end of the construction
period.
Net sales
Operating income
Financial result - toll roads
Financial result - other companies
Dec. 2002
(a)
5,040.2
485.0
-34.6
Capitalization
of financial
expenses
(b)
Dec. 2002
(a+b)
5,040.2
485.0
-218.1
-252.7
9.9
9.9
Financial result
-24.7
-218.1
-242.8
Equity-accounted affiliates
12.4
2.3
14.7
-215.8
232.9
Amortization of goodwill
Income from ordinary activities
Extraordinary income
Income before taxes
Income tax
Income after tax
Minority interests
Net income
-24.0
448.7
-24.0
235.6
235.6
684.3
-215.8
468.5
207.3
-70.8
136.5
477.0
-145.0
332.0
-21.2
78.2
57.0
455.8
-66.8
389.0
Management Report
67
II. OUTLOOK
The worldwide situation increasingly affects the Spanish economy. It appears that there will be a slight
deceleration in 2003, as evidenced mainly by the low growth projections in Europe’s largest economies, the
uncertainties about the US recovery and the fall in the main stock markets.
This deceleration will not significantly impact Grupo Ferrovial’s figures in 2003 since its income statement is
driven mainly by the backlog. In order to face the challenges in subsequent years, the Group constantly invests in
diversification, where it can compete from a position of strength: its financial position (which provides it with high
investment capacity), a sound portfolio and solid results, and the fact that it is Spain’s largest construction group
in terms of market capitalization.
In the Construction division, the backlog amounted to 5.922 billion euros at 2002 year-end (+5.8% year-onyear), another record high. The major Infrastructure Plan pending development in Spain, the infrastructure
privatization plans in Europe and the future entrance of Poland into the European Union should enable Ferrovial
to obtain more new contracts.
In the Infrastructure division, positive performance is guaranteed due to the revenues from the toll road sections
opened in 2002 (Ausol’s Estepona-Guadiaro) and the planned opening of the first corridor (Txorierri) of the
Artxanda tunnels in 2003, which joined the growing revenues from fully-operational toll roads (particularly 407
ETR in Canada).The Airports area is also growing as a result of the acquisition of 19.6% of the Sydney Airport
concession in 2002.
In the Real Estate division, the sizeable backlog (955 million euros) ensures reasonable confidence in a market
that is showing signs of deceleration. In this scenario, Ferrovial has been developing new sales channels since
2001, such as selling homes through El Corte Inglés department stores and acquiring Don Piso’s franchise
network.
In the Services division, expansion is the order of the day: the group strengthened its cleaning and maintenance
business by acquiring Eurolimp at 2001 year-end and infrastructure upkeep company Novipav at 2002 year-end,
and it continues to analyze investment and growth opportunities.
68
Annual Report 2002
III. TECHNOLOGY
The subsidiaries’ technical expertise maintains Grupo Ferrovial at the forefront of construction technology;
additionally in the R&D area within the Water and Environment area, Cadagua has participated in several waste
water treatment projects and obtained energy from water treatment plants. Maintaining its commitment to
quality and the environment, Ferrovial continues to apply the production and management processes that
obtained AENOR certification (for ISO 9001 and 14001) five years ago.
IV. SHARE PERFORMANCE, OWN SHARES AND CORE SHAREHOLDERS
For the third year running, the Ibex-35 index fell considerably in 2002 (-28%), although by less than other
European stock markets (Frankfurt -44% and Paris -34%).The strong impact of the Argentinean and Brazilian
crises on the leading shares of the Spanish index, the crisis of heavily-indebted telecommunications companies, a
flow of profit warnings, accounting fraud, and doubts about corporate governance were the characteristics of
2002, which gave no signs of an economic recovery despite record low interest rates.
50%
40%
30%
+22.7%
20%
10%
+4.2%
10%
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
-10%
-20%
-30%
-40%
Ferrovial
Construction Industry
Ibex 35
EuroTop 300
-28.1%
-32%
Management Report
69
Ferrovial rallied 23% in 2002; as in 2001, it was the best performer of the construction sector and it was also the
second-best in the Ibex-35 index. After closing 2001 slightly below the record for that year, the share was
boosted in early 2002 due to the release of results and the 2002 profit target. Joining the MSCI index
accentuated that trend; the share reached its high for the year in May (up over 40% since the beginning of the
year).With capitalization of 3.387 billion euros, Ferrovial was Europe’s second-largest construction company on
31 December 2002.
Share performance
Ferrovial
2002
2001
2000
1999
Closing price
24.15
19.69
13.60
14.40
High
28.95
22.00
18.35
23.55
Low
19.70
13.53
11.75
14.20
Weighted average
Trading volume in the year*
No. of shares traded (year)
Average daily volume (effective)*
24.70
18.58
14.23
20.17
2,539.49
1,587.50
1,144.80
1,143.90
102,641,026
85,425,146
80,475,919
56,710,300
10.2
6.3
4.6
6.8
Capital rotation
73%
61%
57%
40%
Capitalization*
3,387
2,762
1,908
2,047
140,264,743
140,264,743
140,264,743
142,132,147
1 euro
1 euro
1 euro
1 euro
0.67
0.41
0.28
0.20
3.25
1.56
1.14
0.78
10.66
8.54
7.48
6.53
2.27
2.31
1.82
2.21
Number of shares in capital stock
Par value per share
Gross dividend per share
Multiples
Earnings per share (EPS)
Book value per share
Price/book value
P/E (price/earnings)
Total shareholder return (%)
* Millions of euros.
70
Annual Report 2002
7.43
12.62
11.93
18.41
26.05%
47.80%
-3.60%
-36.40%
Monthly closing price / Monthly trading volume
Euros
Millions of euros
30.00
500
28.00
400
26.00
300
24.00
200
22.00
100
0
20.00
Jan.
Feb.
Mar.
Apr.
Trading
volume
(RH scale)
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
Share
price
(LH scale)
Dividends
Dividends increased by 63%, from 0.41 euros to 0.67 euros gross per share.Two payments were made in 2002:
• 10 May - a supplementary dividend of 0.23 euros gross per share out of 2001 income.The interim dividend of
2001 (0.18 euros) was paid on 30 November 2001;
• 15 November - an interim dividend of 0.20 euros gross per share out of 2002 income.
Treasury stock
At 31 December 2002, Grupo Ferrovial, S.A. owned 2,757,942 own shares (1.97% of capital stock) and had a
provision amounting to 42,120 euros which is obligatory under mercantile legislation when a company owns
own shares.
In 2002, Grupo Ferrovial, S.A. acquired 16,605 own shares and sold 1,274,320 shares, generating 15,971,000
euros in capital gains on those sales.
Additionally, 100% investee Betonial, S.A. owned 346,975 shares (0.25% of capital stock) of Grupo Ferrovial, S.A.
at 31 December 2002 and had a provision amounting to 5,114 euros which is obligatory under mercantile
legislation. In 2002, Betonial sold 11,352 shares, generating 150,000 euros in capital gains.
In 2002, Ferrovial, S.A. acquired 358,160 shares, which it sold in addition to the 104,131 shares it owned at 31
December 2001.Those sales generated 864,000 euros in capital gains.
Management Report
71
Consequently, own shares at 31 December 2002 are as follows:
Number of shares:
3,104,917
% of capital:
2.22%
Cost per books:
47,234,000 euros
Cost per share:
15.21 euros
Ownership structure*
Shareholder
Country
Controlling shareholders
Shares
% of capital
Spain
81,784,259
58.3%
Fidelity Management
US
2,582,094
1.8%
AIM Advisors
US
1,250,510
0.9%
American Century
US
1,089,778
0.8%
Spain
600,650
0.4%
M Kinley Capital Management
US
597,260
0.4%
Texas Teacher Retirement Fund
US
350,000
0.2%
Scottish Widows
UK
269,391
0.2%
Pinnacle International Management
US
261,175
0.2%
Mr. Santiago Bergareche Busquet
C
KBC Fund Managers
Belgium
250,847
0.2%
Blackrock
US
247,000
0.2%
Pioneer Investments
US
231,291
0.2%
TIAA CREF
US
209,061
0.1%
89,723,316
64.0%
Total
* Data provided by Bloomberg, January 2003
Breakdown of capital
Breakdown of institutions by country
Minority shareholders
12.0%
United Kingdom
15.7%
Continental
Europe
15.9%
Institutional
27.7%
Own shares
2.0%
72
Annual Report 2002
Canada
0.6%
USA
38.7%
Controlling
shareholders
58.3%
Spain
29.1%
Board of Directors
The Board of Directors directly or indirectly owns 82,601,467 shares, as follows:
No. of shares
held directly
Mr. Rafael del Pino y Calvo-Sotelo
Mr. Fernando del Pino y Calvo-Sotelo
Mr. Santiago Bergareche Busquet
No. of shares
held indirectly
762
(1)
% of
capital
(1)
---
(1)
(1)
600,650
---
0.43
Mr. Jaime Carvajal Urquijo
6,000
390
0.0042
Mr. Joaquín Ayuso García
764
---
0.0005
Mr. José María Pérez Tremps
100
---
0.00007
56,854,686
---
40.53
1,000
---
0.0007
100
891
0.0007
1,001
---
0.0007
Portman Baela, S.L.
Represented by Mr. Eduardo Trueba Cortés
Mr. Juan Arena de la Mora
Mr. Santiago Eguidazu Mayor
Mr. Gabriele Burgio
(1) These directors are part of the family group who indirectly own 58.3% of capital stock through stakes owned by Portman Baela, S.L.
and Casa Grande de Cartagena, S.L.
Figures at the date the Board of Directors drafted the 2002 financial statements.
Ticker symbols
Bloomberg:
FER SM
Reuters:
FER.MC
Ferrovial is in the following indexes:
IGBM (Madrid General Stock Exchange index)
Madrid Stock Exchange construction index
IBEX-35
IBEX Industrial and Miscellaneous
Bloomberg European 500
Bloomberg European 500 Construction and Engineering
Bloomberg European Industrials Index
DJ Euro Stoxx Price Index
DJ Euro Stoxx Construction
DJ Stoxx 600
DJ Stoxx 600 Construction
Ferrovial joined the following indexes in 2002
Morgan Stanley Capital International (MSCI)
Ferrovial joined the following social responsibility indexes in 2002
DJSI - Dow Jones Sustainability Index
Ethibel
ASPI Eurozone®
Management Report
73
V. AUDIT AND CONTROL COMMITTEE REPORT
INTRODUCTION
The Audit and Control Committee was created through a resolution dated 23 March 1999 prior to the
company’s listing on the stock markets.
The rules and regulations of this Committee are set out in the Board of Directors Regulation.
Nevertheless, the next Shareholders’ Meeting will consider an amendment to the company bylaws, in
compliance with Law 44/2002, dated 22 November.
The Board of Directors proposal complies with all the legal provisions. It establishes the requirements that all
members of the Audit and Control Committee be external directors and that one of their duties be to
supervise compliance with the Code of Corporate Governance and the Internal Code of Conduct relating to
the Securities Markets.
COMPOSITION
The following external directors form part of this Committee:
- Mr. Santiago Eguidazu Mayor, Chairman
- Mr. Santiago Bergareche Busquet
- Profesa Investments, B.V., represented by Ms. María del Pino y Calvo-Sotelo
- Mr. Gabriele Burgio
In 2002, Messrs. Javier Vega de Seoane Azpilicueta (former Chairman), Manuel Azpilicueta Ferrer and Fernando
del Pino y Calvo-Sotelo were also members of this Committee.
This Committee held four meetings in 2002.
ACTIVITIES
The activities performed by the Audit and Control Committee in 2002 were in the following fields:
- Financial information
- Auditing
- Corporate governance
- Internal control systems
74
Annual Report 2002
Financial information
The Committee assisted the Board in its mission of safeguarding the accuracy, reliability and analysis of the
periodic financial information prior to its publication every quarter/half-year through the CNMV.
This prior verification of the financial information complies with the recommendations of the Code of Good
Governance in this regard.
Auditing
The Committee agreed to propose to the Board the reappointment of audit firm Arthur Andersen for 2002.
The representatives of that audit firm presented their work on the 2001 financial statements to the Committee.
They also informed the Committee about other matters such as the planned implementation of International
Accounting Standards for listed companies and their effect on Grupo Ferrovial’s accounting.
The audit firm also sent its report on the 2002 financial statements directly to the Audit and Control
Committee.
At the meeting on 23 October 2002, the Committee decided to commence a selection procedure to seek an
audit firm for the company’s 2003 financial statements.
That procedure included issuing terms and conditions for the new contract in order to define the auditor’s
scope, the audit calendar and the selection criteria, including the price, approach, commitment and compliance
with the calendar.This selection procedure concluded with a proposal to the Board of Directors, which will
submit it to the Shareholders’ Meeting.
Corporate governance
At the meeting on 18 February 2002, the Committee examined and approved the text on corporate
governance drafted by the Controlling Company for its annual report.
Internal control systems
In 2002, the Audit and Control Committee worked in the following fields:
- Budget criteria in the construction business
- Internal control procedure for work other than financial statements auditing by audit firms and related
companies
- Analysis and assessment of risks inherent to Group businesses and of existing contingencies, with a description
of the management systems and criteria implemented in this matter.
Management Report
75
GRUPO FERROVIAL, S.A. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2002 AND 2001
A S S E T S
DUE FROM SHAREHOLDERS FOR UNCALLED CAPITAL
FIXED AND OTHER NONCURRENT ASSETS
Start-up expenses (Note 7)
Intangible assets (Note 8)
Intangible assets and rights
Allowances and accumulated amortization
Tangible fixed assets (Note 9)
Investments in toll roads and airports
Land and buildings
Plant and machinery
Other tangible fixed assets
Provisions and accumulated depreciation
Long-term financial investments (Note 10)
Investments accounted for by the equity method
Long-term investment securities
Loans to companies accounted for by the equity method
Other loans
Provisions
Treasury stock (Note 16)
CONSOLIDATION GOODWILL (Note 10)
DEFERRED EXPENSES (Nota 11)
CURRENT ASSETS
Inventories (Note 12)
Accounts receivable
Customers receivables for sales and services (Note 13)
Receivable from companies carried by the equity method
Other accounts receivable (Note 14)
Provisions (Note 15)
Short-term financial investments (Note 21)
Toll road and airport concession-holders
Short-term investment securities
Loans to associated companies
Other loans
Provisions
Cash
Other
Accrual accounts
TOTAL ASSETS
S H A R E H O L D E R S’ E Q U I T Y A N D L I A B I L I T I E S
SHAREHOLDERS’ EQUITY (Note 16)
Capital stock
Share premium
Reserves for Treasury stock
Other reserves of the parent company
Unrestricted reserves
Restricted reserves
Reserves at fully consolidated companies
Reserves at companies accounted for by the equity method
Translation differences
Interim dividend paid during the year
Income attributable to the parent company
Consolidated income
Income attributed to minority interests
MINORITY INTERESTS (Note 17)
NEGATIVE CONSOLIDATION DIFFERENCE (Note 18)
Fully consolidated companies
DEFERRED REVENUES
Government grants (Note 19)
Exchange gains
Other deferred revenues (Note 19)
PROVISIONS FOR CONTINGENCIES AND EXPENSES (Note 20)
Reversion fund
Other provisions
LONG-TERM DEBT
Debentures and other marketable debt securities
Toll road and airport concession-holders (Note 21)
Payable to credit institutions (Note 21)
Other companies
Other financial debt
Other long-term debt
Uncalled capital payments payable
Associated companies
Other companies
Notes payable
CURRENT LIABILITIES
Other companies
Payable to associated companies (Note 22)
Trade accounts payable (Note 22)
Other nontrade payables (Note 22)
Operating provisions (Note 15)
Accrual accounts (Note 22)
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES
The accompanying Notes 1 to 40 are an integral part of the 2002 consolidated balance sheet.
76
Annual Report 2002
2002
9,199
5,753,889
9,404
147,657
170,069
(22,412)
4,878,107
4,614,004
188,999
298,790
104,558
(328,244)
671,487
351,812
123,887
954
209,363
(14,529)
47,234
355,724
875,422
4,272,350
1,213,919
1,982,125
1,612,179
1,342
454,422
(85,818)
783,847
234,380
528,749
116
20,747
(145)
229,798
59,012
170,786
62,661
11,266,584
Thousands of Euros
2001
12,181
5,781,405
5,547
176,653
193,469
(16,816)
4,907,028
4,664,680
166,816
238,032
81,066
(243,566)
624,070
205,507
88,620
2,695
335,707
(8,459)
68,107
222,455
752,612
4,212,629
1,021,786
1,878,584
1,485,878
1,154
444,141
(52,589)
974,537
368,619
587,890
250
17,961
(183)
277,663
82,582
195,081
60,059
10,981,282
1,494,577
140,265
193,192
47,234
236,940
213,490
23,450
533,601
(3,419)
(81,554)
(27,501)
455,819
477,001
21,182
774,312
9,195
9,195
68,778
21,245
12,204
35,329
289,441
46,879
242,562
4,816,558
1,197,715
140,265
193,192
68,107
226,294
207,583
18,711
314,833
43,400
17,905
(24,544)
218,263
236,676
18,413
425,337
8,364
8,364
51,597
8,134
5,835
37,628
105,472
29,413
76,059
5,641,289
2,853,580
1,461,719
1,146,835
309,588
5,296
420,393
(15)
3,453,009
1,792,355
895,568
896,787
(15)
80,881
3,813,723
41,354
352,488
249,472
99,320
3,696
33,232
2,584,991
612,212
150,314
39,132
11,266,584
349,315
723
723
45,887
3,551,508
90,563
257,757
66,677
191,080
30,434
2,451,119
558,614
91,268
71,753
10,981,282
2002 AND 2001 CONSOLIDATED STATEMENTS OF INCOME
Thousands of Euros
2002
2001
Net sales (Note 25)
Increase in finished goods and work-in-process inventories
Capitalized expenses of group work on fixed assets
Inventories included in fixed assets
Other operating revenues
5,040,224
4,364
21,045
995
14,193
4,240,008
5,886
27,236
9,322
11,372
TOTAL OPERATING REVENUES
5,080,821
4,293,824
Cost of materials used and other external expenses
Personnel expenses
a) Wages, salaries and similar expenses
b) Employee welfare expenses
Depreciation and amortization expense and reversion reserve
Variation in operating provisions
Other operating expenses
2,571,066
663,116
542,589
120,527
103,132
63,403
1,195,121
2,171,456
543,901
447,465
96,436
100,366
52,194
1,036,985
TOTAL OPERATING EXPENSES
4,595,838
3,904,902
484,983
388,922
Revenues from equity investments
Revenues from other securities
Other financial revenues
Other companies
Gains on short-term investments
Exchange gains
162
584
31,436
3,412
28,024
23,733
4,370
191
1,856
44,748
14,322
30,426
13,474
3,961
TOTAL FINANCIAL REVENUES
60,285
64,230
Financial expenses
Other companies
Variation in investment allowance
Exchange losses
78,380
38,020
40,360
(15)
6,667
114,208
41,026
73,182
15,558
OPERATING INCOME (NOTE 26)
TOTAL FINANCIAL EXPENSES
85,032
129,766
Financial loss of toll road and airport concession-holders
Financial gain (loss) at other companies
(34,608)
9,861
(26,704)
(38,832)
FINANCIAL LOSS (Note 27)
(24,747)
(65,536)
12,416
23,962
10,484
10,155
448,690
323,715
Capital subsidies transferred to income for the year (Note 19)
Gains on fixed assets (Note 28)
Extraordinary revenues or income
225
410,785
20,675
225
38,336
10,956
TOTAL EXTRAORDINARY REVENUES
431,685
49,517
Variation in allowances (Note 10-b)
Losses on fixed assets (Note 28)
Extraordinary expenses and losses
6,165
2,091
187,854
2,774
3,602
18,199
Share in income of companies carried by the equity method (Note 10-a)
Amortization of goodwill in consolidation (Note 10-e)
TOTAL EXTRAORDINARY EXPENSES (Note 10)
196,110
24,575
EXTRAORDINARY INCOME (Note 28)
235,575
24,942
CONSOLIDATED INCOME BEFORE TAXES (Note 29)
684,265
348,657
207,264
111,981
477,001
236,676
21,182
18,413
455,819
218,263
Corporate income tax
(Note 23)
CONSOLIDATED INCOME FOR THE YEAR
INCOME ATTRIBUTED TO MINORITY INTERESTS (Note 17)
INCOME FOR THE YEAR ATTRIBUTED TO
THE PARENT COMPANY (Note 30)
The accompanying Notes 1 to 40 are an integral part of the 2002 consolidated statement of income.
77
Notes to 2002 Consolidated Financial Statements
GRUPO FERROVIAL, S.A. AND DEPENDENT COMPANIES
(I) DESCRIPTION OF THE COMPANIES AND SCOPE OF
CONSOLIDATION
a) Companies composing the Group and their business operations
The Ferrovial Group comprises Grupo Ferrovial, S.A., which is the Parent Company, and its subsidiaries and
associated companies, which are detailed in Exhibit IV.
Through these companies, the Group engages mainly in the following business divisions:
a) Construction and execution of all types of public and private works in Spain and abroad, operating mainly
through Ferrovial Agromán, S.A., the company that heads this business division.As regards activities abroad,
noteworthy are those carried on in Poland through Budimex and its investees, the leading construction
Group in this market, in which there is a 59.06 % holding. Budimex’s shares are listed on the Warsaw Stock
Exchange.
b) Infrastructure development. This activity is carried on through the development and management of toll
roads, car parks and airport concessions in Spain and abroad. Until 2001 this business division was headed by
Cintra, Concesiones de Infraestructuras y Transporte, S.A. In 2002, as a result of the strategic alliance entered
into in January 2002 with the Macquarie Infraestructure Group (MIG) whereby the latter acquired a 40%
ownership interest in the toll road business, a corporate reorganization was carried out. As part of this
reorganization, the airport and car parks activities of Cintra Concesiones de Infraestructuras de Transporte
S.A. were separated, leaving Cintra at the head of the toll road business division (40%-owned by MIG), and
Grupo Ferrovial, S.A. created Ferrovial Infraestructuras S.A., which since then has headed the toll road,
parking lot and airport business divisions.
c) Real Estate: Property development in Spain and abroad, condominium management and real estate
brokerage.These activities are performed through Ferrovial Inmobiliaria, S.A. and its investees.
78
Annual Report 2002
d) Services in diverse areas, including urban services, facility management and infraestructure maintenance.
These are mainly performed through Ferrovial Servicios, S.A. and its subsidiaries.
e) Telecommunications.
Grupo Ferrovial, S.A.’s shares have been listed on the Spanish stock market since May 5, 1999, and form part
of the IBEX 35 index.
b) Variations in the scope of consolidation
The main changes in the scope of consolidation in 2002 were as follows:
• Infrastructures
– In January 2002 the Ferrovial Group sealed its alliance with the Australian concern known as the Macquarie
Infraestructure Group (MIG), which involved the acquisition by MIG of an ownership interest in the capital
stock of Cintra (40%) and the spin-off of the parking lot and airport businesses.This acquisition by MIG of
a 40% ownership interest in Cintra’s capital stock was instrumented through a capital increase of €816,000
thousand resolved by the Shareholders’ Meeting on January 15, 2002, which was fully subscribed by MIG
and consisted of capital stock of €11,930 thousand and additional paid-in capital of €804,070 thousand.
– In June 2002 the Ferrovial Group acquired 19.6% of Sydney Airport Corporation Ltd., concession-holder of
Sydney airport (Australia).This company was included in the accompanying consolidated financial statements
by the equity method.
– Increase of 5.81% in Cintra Concesiones de Infraestructuras de Transporte S.A.’s holding in the concessionholder 407 ETR International Inc.
• Real estate
– The companies forming the Don Piso Group (ALG 7 S.L., Fradopi S.L., Latitud 22 S.L., Living Gestión
Inmobiliaria S.L., Marno 96 S.L., Broken Hill S.L. and Castellana, S.L.), which were acquired in 2001, were grouped into a single company, Ferrovial Servicios Inmobiliarios S.A., through which real estate brokerage activities continue to be carried on under the trade name of Don Piso.
• Services
– In 2002 the income statement of Grupo Eurolimp, S.A. was consolidated for the first time. This Group
provides interior cleaning services (offices, facilities and hospitals) and was acquired in December 2001.
– Also, all the shares of Novipav Investimentos SGES, S.A, Sopovico Soc. Port.Vias de com, S.A., Maquirent
Máquinas de Aluguer, S.A. and Pavimental S.A. were acquired. This Group of companies engages in
infrastructure maintenance.
79
(2) BASIS OF PRESENTATION AND CONSOLIDATION
a) Accounting principles
The accounting principles and standards established by current Spanish corporate law were applied in preparing
the consolidated financial statements.
The European Union, in accordance with the European Council agreement reached in Lisbon in March 2000,
established the objective of drawing up uniform regulations on the preparation by listed companies of financial
information in any of its member states. As a result of this agreement, European Parliament Regulation
1606/2002 established the obligation to apply International Accounting Standards (IAS), now called International
Financial Reporting Standards (IFRS), approved by the International Accounting Standards Board (IASB) from
2005 for the consolidated information of listed Groups in European Union member states.
Accordingly, although accounting principles and standards established by current Spanish corporate law have
been applied in these financial statements (see Note 4), information disclosures have been amplified in order
to comply with IAS information requirements, including particularly those relating to:
-
Detail by business segment and geographical area, stipulated in IFRS 14, which is expanded on in these notes
to financial statements by including a balance sheet and income statement organized by business division and
by including details, by business division, in the main balance sheet and income statement notes and in Note
31 relating to cash flow. Also, a detailed explanation is provided of the methods used in recognition of the
revenues and expenses of each of the Group’s business divisions (see Note 4-u.).
-
Cash flow statement, stipulated in IFRS 7, which is presented in Note 31.
-
Statement of changes in equity stipulated in IFRS 1 and presented in Note 16.
-
Information relating to financial risk and hedging, stipulated in IFRS’s 32 and 39 and presented in Notes 5 and
21.
-
Information on remuneration systems linked to the share price, stipulated in IFRS 19 and presented in Note
34.
-
Information on the evolution of earnings per share, stipulated in IFRS 33 and included in Note 30.
-
Related parties disclosures, stipulated in IFRS 24, and presented in Note 36.This disclosure requirement is
also stipulated in Article 36 of Law 44 / 2002 on Financial System Reform Measures.
-
In addition, other new information disclosures introduced in 2002 by Spanish legislation have been included.
These include most notably:
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Annual Report 2002
– Detail of fees billed by auditors, stipulated in Additional Provision 14 of Law 44/ 2002 on Financial System
Reform Measures, included in Note 37.
– Information on the reflection in the financial statements of the Group’s environmental policy, pursuant to
the Spanish Accounting and Audit Institute (ICAC) Resolution of March 25, 2002.
b) True and fair view
The consolidated financial statements, which were prepared from the 2002 accounting records of Grupo
Ferrovial, S.A. and its subsidiaries, are presented in accordance with generally accepted accounting principles
and, accordingly, give a true and fair view of the consolidated Group's net worth, financial position and results
of operations.
These financial statements were approved by the Board of Directors on February 26, 2002 and it is considered
that they will be approved by the Shareholders' Meeting on March 21, 2002 without any changes.
c) Consolidation principles
The companies directly or indirectly more than 50% owned by Grupo Ferrovial, S.A. and/or whose management
is effectively controlled by it were fully consolidated.
The equity of minority interests in the net worth and results for the year of the fully consolidated subsidiaries
is presented under the "Minority Interests" caption in the consolidated balance sheet and the "Income
Attributed to Minority Interests" caption in the consolidated statement of income, respectively.
The financial statements of the foreign subsidiaries included in consolidation were translated to euros by
applying year-end exchange rates to the assets and liabilities, except for the equity of and investments in Group
and associated companies, which are valued at the exchange rate prevailing when they joined the Group, and
for their earnings, which are translated at the average exchange rate for the year.The difference resulting from
translating the equity and investment balances at the year-end exchange rate and at the historical exchange rate
is recorded under the "Shareholders' Equity - Translation Differences" caption.
The companies directly and indirectly not more than 50% owned and over which significant management
influence is exercised by the Parent Company (associated companies) are accounted for by the equity method
in the accompanying consolidated balance sheet.The share in the period results of these companies is reflected
as "Share in Losses/Income of Companies Accounted for by the Equity Method" in the accompanying
consolidated statement of income.
However, certain companies which are managed by the Group and are generally 50% owned by it were
proportionally consolidated. These companies are: Boremer, S.A., Constructora Delta Ferrovial, Ltd., Autopista
Trados M-45, S.A., Tidefast, Ltd., Bristol International Airport, Ltd, Setecampos Sociedade Inmobiliaria, S.A.,
81
Habitaria, S.A, Barrioverde, S.A., Malilla 2000, S.A., Infoser Estacionamientos, Estacionamientos Alhondiga, S.A.,
Bendijar, S.L., FLG Omega, B.V. and all their subsidiaries.
The minority-owned companies over which the Parent Company is not deemed to have significant
management influence, and those which are not material or are not held on a long-term basis (see Note 11),
are carried at cost.The related allowance for diminution in value is recorded on the basis of the underlying book
value of the holdings, adjusted by the amount of the unrealized gains disclosed at the time of acquisition and
still existing at the subsequent valuation date, and the goodwill associated with these acquisitions. Should the
estimated realizable value of these holdings be lower than the book value, the appropriate provision is recorded
for the difference.
The 2002 individual financial statements of the consolidated companies and the accompanying consolidated
financial statements have not yet been approved by the respective Shareholders' Meetings. However, the
companies' directors expect them to be approved without any changes.
(3) DISTRIBUTION OF INCOME
At its meeting of October 24, 2002, the Board of Directors of the Parent Company resolved to distribute an
interim dividend of €0.20 per share out of 2002 income. This dividend was paid on November 15, 2002 and
amounted to €27,501 thousand, excluding the shares of treasury stock held at the date of distribution. For this
purpose, the liquidity statement stipulated in Article 216 of the revised Corporations Law was prepared.
The proposal to distribute 2002 income also includes:
– a provision to the legal reserve of €6,550,346, and, accordingly, the amount of this reserve totals 20% of the
Company’s capital stock;
– the distribution of a final dividend of €0.47 per share, excluding the shares of treasury stock held at the date
of the Shareholders’ Meeting;
– the remaining income will be allocated to voluntary reserves.
Consequently, a total dividend of €0.67 per share would be distributed.
(4) VALUATION STANDARDS
4.a) Consolidation goodwill
Goodwill is defined as the positive difference between the cost of an investment and the underlying book value
at the date of the investee's inclusion in the Group, net of the amount of asset revaluations or liability value
adjustments directly allocated to the subsidiary’s or associated company’s assets and liabilities. Goodwill is
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Annual Report 2002
amortized systematically as and in the period during which it contributes to the obtainment of revenues, over
a maximum period of 20 years.
4.b) Negative consolidation difference
Negative consolidation difference is defined as the negative difference between the cost of an investment and
the underlying book value at the date of the investee's inclusion in the Group, net of the asset revaluations or
liability value adjustments directly allocated to the subsidiary’s or associated company’s assets and liabilities.
The negative consolidation differences recorded in the accompanying consolidated balance sheet as of
December 31, 2002, relate mainly to companies purchased by Budimex, S.A.
4.c) Uniformity of items
In order to uniformly present the items included in the accompanying consolidated financial statements, uniform
criteria were applied to the individual financial statements of the consolidated companies.
The main uniformity adjustments relate to the adaptation of the toll road concession-holders abroad to the
Ministerial Order dated December 10, 1998, enacting the regulations for the adaptation of the Spanish National
Chart of Accounts for toll road concession-holders. In cases where these uniformity adjustments had a material
effect, appropriate disclosure is made in the related note to consolidated financial statements.
4.d) Start-up expenses
Start-up expenses, which consist basically of preopening and capital increase expenses, are recorded at the
acquisition cost of the related services and are amortized on a straight-line basis over five years.
4.e) Intangible assets
Intangible assets are recorded at acquisition cost or production cost.
Intangible assets are amortized on a straight-line basis in the case of administrative concessions over the
concession period, and in the case of rights on leased assets and other items over their useful lives in a
maximum period of five years.Assets and rights paid by Cintra Chile S.L. arising from the concession agreements
of its subsidiaries are amortized by applying the percentage resulting from dividing the actual toll road traffic by
the total projected traffic for the concession period.
4.f) Tangible fixed assets
Tangible fixed assets are carried at cost, revalued at certain companies pursuant to Royal Decree-Law 7/1996.
83
The net increase in value resulting from the 1996 revaluation is being depreciated over the tax periods
remaining in the useful lives of the revalued assets.The effect on depreciation of each year is not material.
Regular upkeep, maintenance and repair expenses are expensed currently. The costs of tangible fixed asset
renewals, expansion or improvements are capitalized only if they lead to increased capacity or productivity or
to a lengthening of the useful lives of the assets.
In-house work on tangible fixed assets is valued, for each investment, by adding to the price of the materials
used the direct costs allocable to the investment, plus a proportion of the indirect costs.
The “Investments in Toll Roads” caption relates both to sections in operation and to sections under
construction, and includes technical and financial studies, designs, expropriations, indemnity payments for and
reinstatement of services and easement, construction work and installations, construction management and
administration expenses, interest incurred over the construction period and payable to financing sources which
are effectively funding the toll road investment, and all the costs required for the construction work incurred
before the toll road is ready for operation.
The Group companies depreciate mainly their machinery, plant and tools by the declining-balance method.The
other tangible fixed assets of the consolidated companies are depreciated by the straight-line method over the
years of estimated useful life of each asset.
The consolidated companies depreciate their tangible fixed assets basically over the following years of useful
life:
Years of Estimated Useful Life
Buildings and other structures
33 - 50
Machiner y plant and tools
5 - 18
Furniture and fixtures
10 - 15
Transpor t equipment
5 - 7
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Annual Report 2002
5
4.g) Deferred expenses
This caption includes mainly:
-
The amount of interest incurred on the financing of the investment in toll roads already in operation in
excess of that effectively allocated to income as described in section 4.u. 2.1.
-
The deferred interest on bonds issued at a discount, recorded as the difference between the redemption
value and the value received in the bond issue and allocated to income. In the case of the toll road
concession-holders, this interest is allocated to income by the method described in section 4.u.2.1 of this
Note.
4.h) Short-term investments
The short-term investments, which basically include investments in government debt securities and euro and
foreign currency deposits, are carried at cost and are realizable on demand.The revenues earned thereon are
recognized as period revenues by the interest method.
4.i) Marketable securities
Investments in unlisted nonconsolidated companies are carried at acquisition cost. Unrealized losses on these
investments disclosed by a positive difference between acquisition cost and the lower of underlying book value
(net of unrealized gains) or realizable value, are expensed currently and a balancing entry is recorded under the
“Long-Term Investments – Allowances” caption in the consolidated balance sheet.
4.j) Operating accounts receivable and payable
Short- and long-term operating accounts receivable and payable are recorded at face value. Interest on interestbearing debt is recorded on an accrual basis.
4.k) Inventories
Inventories are valued at the lower of cost or market, except for land lots and unbuilt land that are valued at
their acquisition cost revalued pursuant to Royal Decree-Law 7/1996. Cost is determined as follows:
– Raw and other materials acquired from third parties are valued at the lower of average acquisition cost or
net realizable value.
– Ancillary project facilities are valued at acquisition cost less the depreciation taken on the basis of the amount
of work completed.
85
The main investment under the “Inventories” caption relates to real estate developments. Below is a detailed
description of the methods followed for the inclusion of the main cost items in the value of real estate
inventories.
Land
Land is recorded at cost which, apart from the price paid for the land, includes the expenses incurred in the
purchase (notary, registration, taxes, etc.), preparation expenses such as enclosure, earthwork, sewerage and
demolition work when required to perform new construction work from scratch and also expenses relating to
inspection and surveying when carried out prior to land acquisition.
Construction
Production cost includes certificates and invoices relating to the construction work (including all permanent
fixtures and elements), rates inherent in construction work, design and site management fees and settlement of
expenses required for the declaration of new construction work and horizontal division.
Financial expenses
The capitalization of interest expenses accrued in relation to the acquisition of land and the construction of
housing is permitted provided that the following conditions are complied with:
-
Such capitalization is only permitted during the construction period, and, accordingly, it may only commence
on request of the construction permit (which requires the prior approval of the basic project) and will end
on completion of the construction work. In no case may interest expenses on land not incurred during the
construction period be capitalized.
-
Capitalization of interest expenses will only be permitted provided that specific external financing exists, and
is only permitted up to the limit of the financial loss incurred by the Company carrying out the real estate
development.
Commercial expenses
As a general rule, any commercial expenses, including advertising expenses or those relating to sales
management, are recorded in the statement of income on an accrual basis and, accordingly, are not treated as
an addition to inventories.
The recognition of sales fees in the statement of income may only be deferred at the time of delivery of the
housing unit, provided that these fees consist of a fixed sum per unit sold and that there are sufficient guarantees
as to their recovery should the asset not be delivered.
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Annual Report 2002
4.l) Parent Company shares
The Parent Company shares are valued at the lower of acquisition cost or market value. Market value is defined
as the lower of average market price in the last quarter of the year or year-end price. The related restricted
reserve is recorded under the “Shareholders’ Equity” caption (see Note 16).
In any valuation of net worth as of December 31, 2002, these balances must be deducted from the equity figure
shown in the accompanying consolidated balance sheet.
The result of the sale of Parent Company shares is recorded in the statement of income as Extraordinary
Income or Expense for the year (see Note 28).
4.m) Subsidies
Subsidies are recorded at the amount received. Capital subsidies granted and collected are allocated to period
income in proportion to the decline in value of the subsidized assets.
4.n) Obligations to employees
Under current labor regulations, the consolidated companies are required to pay severance indemnities to
employees terminated under certain conditions.
The "Other Nontrade Payables" caption in the accompanying consolidated balance sheet as of December 31,
2002, includes a provision of approximately €6,613 thousand to cover the cost, pursuant to current legislation,
of terminations of temporary employees upon completion of the project for which they were hired, and other
severance costs.
4.ñ) Other provisions for contingencies and expenses
Provisions are recorded for contingencies and other expenses at the estimated amount required for probable
or certain third-party liability arising from litigation in progress and from outstanding indemnity payments or
obligations of undetermined amount and aval and other similar guarantees.These provisions are recorded when
the liability or obligation giving rise to the indemnity or payment arises. Also, estimated losses in value arising in
the operations of fully or proportionally consolidated companies are recorded under this caption.
4.o) Reversion fund
The concession-holders are required to record an annual provision to the reversion reserve to cover the net
book value, on the concession expiration date, of the revertible assets that by their nature are nondepreciable
or whose useful life exceeds the concession term, plus the estimated expense required to enable these assets
to be returned in working condition as established in the concession contracts.
87
Pursuant to a Ministerial Order dated December 10, 1998, enacting the regulations for the adaptation of the
Spanish National Chart of Accounts for toll road concession-holders, the annual provision to the reversion
reserve has been recorded uniformly and systematically in proportion to expected revenues (see Note 4.u.2.1).
4.p) Classification of debt
In the accompanying consolidated balance sheets, debts maturing in under 12 months from the balance sheet
date are classified as current liabilities and those maturing at over 12 months as long-term debt.
Debts are valued at repayment value, including the unmatured interest payable, which has a balancing entry in
asset accounts and is classified on the same basis as the principal amount. Interest is recorded in the year in
which it is incurred.
4.q) Corporate income tax
The Ferrovial Group has been filing consolidated tax returns since 1993.
The corporate income tax expense for each company included in the consolidated tax return is calculated at
each company on the basis of its individual book income, increased or decreased, as appropriate, by the
permanent differences from taxable income, net of tax relief and tax credits, excluding tax withholdings and
prepayments.The companies taxed on a consolidated basis in 2002 are included in EXHIBIT IV.
4.r) Foreign currency transactions
Transactions in foreign currencies are translated to euros at the exchange rates ruling at the transaction date.
The balances payable and receivable in foreign currencies at year-end were translated at the exchange rates
then prevailing.
Unrealized exchange gains are recorded under the “Deferred Revenues” caption in the consolidated balance
sheet and exchange losses are recorded as expenses under the “Exchange Losses” caption in the consolidated
statement of income.
4.s) Derivatives
Realized year-end gains and losses on transactions with exchange rate hedges are recorded in the statement of
income.The gain or loss arising from settlement of such hedges is also recorded.The exchange difference thus
has no effect on income and only the financial effect of the transaction hedging the exchange rate is recorded.
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Annual Report 2002
Exchange gains or losses arising on unmatured hedging transactions are recorded as deferred revenues or
deferred charges, respectively. Also, the gain or loss arising from settlement of the hedge at year-end is recorded
as a deferred revenue or deferred charge, respectively. The amount recorded as a deferred revenue or a
deferred charge is thus the same for each of the unmatured transactions.
In the case of exchange rate hedging transactions performed to cover expected future dividend distributions
out of earnings already included in the Group’s net worth, the translation differences are calculated for the
hedged portion taking the hedged exchange rate as a reference.
4.t) Joint Ventures
The financial statements of the Parent Company and its subsidiaries include the effect of proportional inclusion
of the joint ventures in which they participate.
The joint ventures were included proportionally in each Group company's relevant balance sheet and income
statement captions, based on each company's percentage of ownership therein.
The main amounts contributed by the joint ventures to the consolidated balance sheet and statement of
income were as follows:
Thousands of Euros
Total assets
771,075
Fixed assets
41,165
Current assets
729,910
Total liabilities
737,288
Long-term debt
54,827
Current liabilities
682,461
Net sales
656,919
Net income
31,112
4.u) Recognition of revenues and expenses
Revenues and expenses are recognized on an accrual basis, i.e. when the actual flow of the related goods and
services occurs, regardless of when the resulting monetary or financial flow arises.
However, in accordance with the accounting principle of prudence, the companies only record realized income
at year-end, whereas foreseeable contingencies and losses are recorded as soon as they become known.
Below is a specific detail of the method followed for the recognition of revenues and expenses in each of the
areas of activity in which the Ferrovial Group operates.
89
4.U.1 CONSTRUCTION
General method for the recognition of earnings
The consolidated companies in the construction business use the so-called “actual costs and revenues method”
to recognize the result on construction projects, within the general percentage-of-completion method
established in the adaptation of the Spanish National Chart of Accounts for the construction industry.
This method may be used since all contracts include:
-
a definition of every single work unit required to be executed in order to complete the entire contract;
-
measurement of every single work unit, and
-
the price at which each unit is certified
The practical application of this method at the end of each month is as follows. In each construction project,
the units completed are measured and valued at the price contracted for each.The resulting total is the amount
of the construction work performed at the contractual price that should be recognized as project revenue from
the inception.The difference with respect to the corresponding figure a month earlier gives the production for
the month, which is the figure that is recorded as revenue.
Construction work costs are recognized for accounting purposes on an accrual basis, and the expenses actually
incurred in the execution of the project units completed and those that, although they may be incurred in the
future, have to be allocated to the project units now completed, are recognized as expense.
The application of this income recognition method is combined with the preparation of a budget made for each
construction work contract by project unit.This budget is used as a key management tool in order to maintain
detailed monitoring, project unit by project unit, of variances between actual and budgeted figures.
This budget also serves to anticipate possible future losses that may arise. Any losses so identified are
provisioned when they are foreseen, even if the project units have not yet been executed.
Recognition of changes to the prime contract
During performance of construction work unforeseen events not envisaged in the prime contract may occur
that increase the volume of work to be performed.
These changes to the contract initially entered into require the customer’s technical approval and subsequent
economic approval.This approval permits, from that moment, the issuance of certificates for and collection on
this additional work.
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Annual Report 2002
The method adopted by the Ferrovial Group in this connection is not to recognize revenues arising from this
additional work until approval thereof by the customer is reasonably assured.
However, the costs associated with these project units are recognized when they arise regardless of the degree
of customer approval of the work.
Late-payment interest
Late-payment interest arises from delays in the collection of certifications. Entitlement to collect this interest is
provided for by current legislation. However, normally the procedure for recognition and collection of this
interest is complicated and in many cases collection occurs when the project is completed.
On the basis of the principle of prudence, the Ferrovial Group recognizes late-payment interest as revenues
when there is absolute assurance as to its collection.
Such interest is recognized in the statement of income as financial revenues.
Machinery depreciation
As regards the depreciation of site machinery, the Ferrovial Group distinguishes between the following:
-
Machinery and other fixed assets acquired for a construction project and which in principle will only be used
during the duration thereof.These assets are depreciated over the life of the construction project based on
the work executed. This caption includes mainly small site machinery, hand and machine tools and site
facilities. Only if the repurchase of the asset at a certain price is contractually assured is the difference
between the initial acquisition cost and the repurchase price depreciated.
-
Machinery acquired for central management from the machinery pool.This heading includes mainly largescale civil engineering machinery.These assets are basically depreciated by the accelerated declining-balance
method and, accordingly, the depreciation is greater in the initial years of asset life.
Other provisions
These include most notably:
-
provisions for deferred charges,
-
provisions for contingencies and expenses,
-
provisions for doubtful customer receivables.
91
Deferred expenses are those normally incurred and paid on completion of construction work, such as those
for withdrawal of facilities and machinery.The Ferrovial Group estimates these expenses on commencement of
the work and from that time onwards the related provisions are recorded based on the work performed, so
that on final completion of the project the recorded allowance is equal to the total amount considered
necessary.
The method used by the Ferrovial Group to recognize provisions for contingencies and expenses consists of
recording the amount considered necessary to cover any liability which may be incurred at precisely the time
when it arises.
The method used by the whole Group is to record provisions for customer receivables as follows:
-
Private-sector customers: allowance equal to 100% of the debt in the case of chapter 11-type insolvency
proceedings, bankruptcy, legal claims or unpaid bills, promissory notes or checks. In the remaining cases, debts
more than six months old are analyzed individually and the required allowance is recorded to cover the
estimated risk.
-
Public-sector customers: in the case of past-due debts of municipal governments or those expressly agreed
as being free from late-payment interest, the debt is written down by the amount obtained from applying to
it the market interest rate for the time elapsed since maturity.
4.U.2 INFRASTRUCTURE
The three industries in which Ferrovial’s Infrastructure Division operates are toll roads, airports and car parks.
4.u.2.1. Toll roads
Only in the area of toll roads has Spanish accounting legislation laid down specific regulations, which were
included in the Ministerial Order dated December 10, 1998, enacting the rules for the adaptation of the Spanish
National Chart of Accounts for toll road concession-holders.
These regulations focus mainly, on the one hand, on the treatment of financial expenses incurred in the
operating period and, on the other, on the amortization of investments made and provisions to the reversion
fund.
These specific regulations are based on the characteristics of this industry, which are summarized as follows:
-
This is a highly regulated industry. Prices are established by the Government in accordance with an Economic
and Financial Plan which includes a forecast of the main aggregates in the economic and financial
management of the project for the total life of the concession (investments to be made, financing thereof,
projected revenues from toll road traffic, operating costs, financial expenses, etc.), as well as the assumptions
and hypotheses applied in their calculation.
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Annual Report 2002
-
In most cases the principle of risk and business venture on the part of the concession-holder coexists with
the principle of assurance of the concession’s economic and financial equilibrium on the part of the
Administration.
-
The concession projects generally require high volumes of investment (both initially and, to a lesser extent,
for replacement purposes) and always give rise to negative cash flows in the construction years and in the
first years of operation. A net contribution of funds by shareholders and lenders in this period is required,
which gives rise to initial high financial leverage of the project, and to a significant temporary mismatch
between financial costs (which decrease during the concession term as leverage decreases) and operating
revenues (which increase during the concession term).
Financial expenses
A major factor in the financial expenses of toll road concession-holders is the differing treatment given to those
incurred during construction of the toll road and to those incurred during the operating period.
Financial expenses incurred during the construction period:
These expenses are capitalized as an addition to the value of the toll road, in the same way as with any financial
expense relating to the financing of a fixed asset under construction or assembly.The accounting method used
for such capitalization in the statement of income was modified in 2002, as indicated in Note 26.
Financial expenses incurred after completion of construction:
As discussed previously, in accordance with the special characteristics of the industry, the Spanish National Chart
of Accounts stipulates that financial expenses accrued after completion of the construction period have to be
charged to income in proportion to the projected revenues over the concession term.
As an essential prerequisite for the use of this method, reasonable evidence must exist that these expenses will
be recovered through the rates charged in future years.
In this connection, the regulations deem there to be reasonable evidence that these expenses will be recovered
through future years’ rates if, apart from inclusion in the Economic and Financial Plan, the following two
conditions are met:
-
The possibility exists of obtaining future revenues of an amount which is at least equal to the financial
expenses capitalized through inclusion of these expenses as costs permitted for the purpose of determining
the rate.
-
Evidence is furnished that future revenues will permit the recovery of past costs. On this point the regulator’s
intention must clearly be that future revenues should enable the recovery of at least the capitalized amounts.
93
Once these conditions have been met, the method used to record these financial expenses in the statement
of income is as follows:
– The proportion of projected toll road revenues for each year to total projected revenues is calculated (on
the basis of the concession’s Economic and Financial Plan). If actual revenues for the year exceed projected
revenues for the year, this proportion will be calculated by taking the actual revenue as the numerator.
– This proportion will be applied to the total projected financial expenses during the concession period to
determine the amount of financial expenses that should be taken to the statement of income in the year.
– For each year the positive difference between the amount of the projected financial expense for the year per
the accrual method and that resulting from the preceding calculation will be capitalized as “Deferred
expenses”. Also, if the amount of the financial expenses in a given year differs from that envisaged in the
Economic and Financial Plan for that year, the difference will be treated as an addition to or reduction of the
financial expense for the year.
– These deferred expenses are recorded in the statement of income as a financial expense from the moment
in which the projected expense per the accrual method falls below that calculated by applying to the total
projected financial expenses the ratio of revenues in the period to total projected revenues.
The regulations establish that should changes occur in the Economic and Financial Plan, based on extraordinary
events that significantly modify the initial circumstances considered in the preparation of this plan, the effects of
the change will be treated without adjusting the financial expenses charged to income in prior years. In this case,
use will be made of the aforementioned method of allocation to the period remaining since approval of the
new Economic and Financial Plan, taking into account that the amount of the capitalized financial expenses not
yet taken to income should form part of total projected financial expenses.
Depreciation of fixed assets and reversion fund
Another basic characteristic of these companies is that they have to make significant investments in fixed assets,
which are then subject to future reversion to the granting Administration.
The fixed assets include items whose useful life exceeds the concession period and nondepreciable assets.The
full amount of the investment in the toll road on expiration of the concession must be depreciated in full, since
at the end of this period it has to be delivered to the granting government for no consideration.
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Annual Report 2002
This means that different treatment is needed for the allocation to income of:
-
The depreciation of the value of the depreciable assets whose useful life is lower than the concession term is
charged to income on a straight-line basis over the useful life of the assets.
-
Investments in assets whose useful life exceeds the concession term and nondepreciable assets. In this case,
on expiration of the concession, the amount of the projected net investment of the concession period
should have been included as reversion fund on the liability side of the balance sheet. This reserve is
recognized in the statement of income over the life of the concession. In accordance with the revenue and
expense matching principle, it is recognized in the proportion which results from taking the revenues in each
year as a percentage of total projected revenues in the concession period, following the above-mentioned
method for the allocation of financial expenses.
4.u.2.2. Airports
Unlike the toll road business, no specific accounting regulations have been laid down in the airport business.
Accordingly, in the case of airport companies, income is recorded for accounting purposes in accordance with
general accrual methods, as follows:
-
Financial expenses are charged to the statement of income based on their accrual by the interest method,
except for those expenses accrued during the construction period, which may be capitalized.
-
Fixed assets are depreciated on the basis of the useful life of the asset.
4.u.2.3. Car Parks
The parking lot business division is divided as follows:
-
Car parks for local residents
-
On-street parking
-
Off-street parking
Car parks for local residents
This business involves the construction of parking lots whose spaces are sold directly to the end customer.
The accounting treatment is the same as that given to a real estate development and, in particular, the sale is
not recorded until the parking space is delivered.
On-street parking
This is a public service, normally operated under a concession system.
The revenues are usually the hourly parking rates paid or a price for the public service paid by the municipal
government.They are recorded when they become claimable.
95
In the case of concessions, the amount paid for the obtainment thereof is charged to the statement of income
in the concession period.
Off-street parking
In this case revenues arise from the use of parking spaces owned by the company or held under an
administrative concession.
These revenues are recorded, as in the previous case, as soon as they arise.
The fixed asset (parking lot) is depreciated on the basis of its useful life. For the nondepreciable part of the
investment or the part whose useful life exceeds the concession term, a reversion fund is recorded in order to
recover, on expiration of the concession, the total amount invested.
4.U.3. REAL
ESTATE
Companies engaging in real estate development activities present a peculiarity with respect to other industries
in the recognition for accounting purposes of sales and results, which is due to the time lag between the private
sale agreement (usually when the property is in the construction phase) and the completion of the project and
subsequent delivery of the property to the purchaser, which coincides in most cases with the signing of the
public deed.
This peculiarity is easier to understand if it is kept in mind that the private sale agreement creates an obligation
on the part of the buyer to pay the stipulated price and on the part of the seller to deliver the property with
the agreed-upon specifications. However the property is not delivered to the seller and ownership is not
transferred until the public deed is signed.
This peculiarity is included in the Adaptation of Valuation Standards of the Spanish National Chart of Accounts
for real estate companies.
These regulations establish a minimum limit (80% completion of construction work) on when the income from
sales made under a private agreement may be recorded. Above this 80% completion, the Spanish National
Chart of Accounts permits the company to decide the moment of recognition and to recognize the result when
all construction work has been completed and the property has been delivered to the owner (the general rule
applicable to any sale of goods in accordance with the accrual principle).
Ferrovial Group companies engaging in real estate development activities recognize the sales and results of real
estate developments when title is delivered to the buyer, which usually coincides with the formalization of the
transaction in a public deed.
This method signifies that the development has been completed and, accordingly, that substantially all costs have
been incurred. Therefore, the result of the sale is obtained immediately without the need for additional cost
estimates.
96
Annual Report 2002
As a balancing entry to the recognition of the sale, at this time the expense is recognized through the reduction
in value of inventories being sold.The main items included as an addition to real estate development inventories
are described in Note 4-k.
4.U.4. SERVICES
Recognition of revenues
From the point of view of the result, the variable is the moment when services provided to third parties are
recorded as revenues.
Below we detail the main aspects of this accounting entry for each type of service provided:
-
Urban Services include mainly contracts and concessions at fixed prices. Revenues are recorded on the basis
of the services provided. In the case of billings made more than once a month, the appropriate estimates of
the services provided under these agreements are made, and the related revenues are recognized, regardless
of whether the services have been billed or not.When services additional to those envisaged in the original
contract are performed, they are only recorded when there is reasonable certainty as to their subsequent
billing and collection, whereas expenses relating to these services are recorded as soon as they are incurred.
-
In the case of Facility Management, revenues are recorded on an accrual basis.As regards additional services, a
formal order is required to record such services as revenues.
-
In the case of Infrastructure Maintenance, due to the nature of such projects the method of recording sales is
similar to that used in construction projects: priced listing of the completed work detailing the units executed,
to which the contractually agreed prices are applied.A peculiarity of infrastructure upkeep contracts is that
they usually include the obligation to perform extraordinary work at the request of the customer, for which
there is also a budget allocation within the contract itself.These projects are recorded as revenues only when
approval of the completed work is considered to be assured.
Provisions and allowances
-
In the specific case of maintenance contracts including a total guarantee of a building’s fixtures, an estimate of
the potential risk is made at the beginning of the contract and a monthly guarantee provision is recorded in
order to cover the total estimated amount by the end of the contract. These estimates are reviewed
periodically and the monthly provision is adjusted accordingly.
-
Provisions for contingencies and expenses and allowances for customer receivables are recorded by the
same method as that used in the construction business.
97
(5) EXCHANGE RATE AND INTEREST RATE RISK-HEDGING POLICIES
In the course of its activities the Ferrovial Group is exposed to risks of a financial nature which arise from
variations in the interest and exchange rates of currencies other than the euro.
Exposure to interest rate variations
It is important to distinguish between the interest rate risk relating to the financing of infrastructure projects
(mainly toll roads and airports) and that arising from the Group’s other activities.
The financing of infrastructure concession projects is characterized by being related to project flows, without
any shareholder guarantees on completion of the construction phase. In this connection, when the project
enters the operation phase the objective is to attempt to establish as far as possible a fixed interest rate or
assure such a rate through hedging against possible interest rate variations, thereby avoiding possible subsequent
modifications in the project’s profitability as a result of such variations.These hedging mechanisms are included
within the obligations frequently imposed by financial institutions. Note 21 to the financial statements indicates
details of the financial costs applicable to the financing of each infrastructure concession project in which the
Group participates, and of the interest rate hedging contracts entered into.
In view of the Group’s current cash position, its policy in its other business activities is to maintain exposure to
interest rate variations. However, on the basis of the evolution of the Group’s financial structure and the
macroeconomic variables of the environment, the Ferrovial Group may consider totally or partially hedging its
exposure to interest rates.
Exposure to exchange rate variations
The exchange rate risk-hedging policy aims to ensure that projected cash flows are not affected by exchange
rate variations. Accordingly, hedging is specifically used for the following transactions:
– Multicurrency projects: Such projects are defined as those in which collections and payments are not made in
the same currency. The aim of hedging in such projects is to ensure that operating income (difference
between collections and payments) is not affected by exchange rate fluctuations.
– Income of foreign subsidiaries and dividends or refunds of capital expected to be received from foreign
subsidiaries.The objective in this case is to accelerate repatriation and hedge the flows anticipated at short
and medium term.
– Cash of foreign subsidiaries: hedging of surpluses in those countries where there is a risk of significant
currency variations.
98
Annual Report 2002
The risk arising from long-term investments denominated in currencies other than the euro (this risk is reflected
in the consolidated financial statements as changes in the “Translation Differences” caption) is, in principle, a risk
which is not hedged. Only the flows expected to arise in the form of distributions from these investments at
short and medium term are hedged.
Below is a breakdown of the exchange rate hedging contracts as of December 31, 2002:
– Through forward sale contracts, Cintra, Concesiones de Infraestructuras de Transporte, S.A. has hedged
against the Canadian dollar the amount of the transfers expected to be received through 2004 from the
concession-holder 407 ETR International Inc. for the refund of equity.The amount assured as of December
31, 2002, was 51,401 thousand Canadian dollars (approximately €34,309 thousand). Of this amount, 35,444
thousand Canadian dollars (approximately €24,147 thousand) mature in 2003 and 15,957 thousand
Canadian dollars (approximately €10,162 thousand) in 2004.
– In addition, in 2002 Cintra S.A. performed two hedging transactions to cover possible fluctuations of the euro
against the Polish zloty totaling 7,644 thousand zlotys (approximately €1,926 thousand), both maturing in
2003. The objective of these hedges is to assure the payments to be made by Cintra, Concesiones de
Infraestructuras de Transporte S.A. at Autoestrada Poludnie S.A., in which it has a 50% ownership interest,
along with 37.5% owned by Budimex and 12.5% owned by Ferrovial Agromán, S.A.
– Ferrovial Infraestructuras S.A. performed a hedging transaction to cover possible fluctuations of the euro
against the Australian dollar.The amount hedged was 5,322 thousand Australian dollars (approximately
€2,995 thousand).The aim of the hedge is to assure the exchange rate for the transfer of funds received
from Sydney Airport Corporation Ltd.
– As of December 31, 2002, Cadagua S.A. had various contracts to hedge fluctuations of the euro against the
U.S. dollar and the Japanese yen, the currencies in which the collection and payment flows of a contract in
Saudi Arabia are denominated. The amounts hedged are US$ 14,940 thousand (of which US$ 4,915
thousand or approximately €5,406 thousand mature in 2003, and the remaining, US$ 10,025 thousand or
approximately €11,029 thousand mature in 2004) and 567,290 thousand Japanese yen (approximately
€5,306 thousand) maturing in 2004.
– Ferrovial Agromán, S.A. entered into two hedging contracts maturing in 2003 to hedge possible fluctuations
of the euro against the U.S. dollar, the currency used in the collection of payments under various contracts in
the Dominican Republic.The volume hedged is US$ 1,911 thousand.
99
(6) IMPACT OF EXCHANGE RATE VARIATIONS ON ASSETS AND
LIABILITIES
Except in those significant cases expressly referred to in these notes to financial statements, the assets and
liabilities of each Group company are generally denominated in the currency of the country in which its
registered office is located. Accordingly, the main companies which contribute assets and liabilities denominated
in currencies other than the euro are as follows:
-
ETR 407 International Inc, a company with registered office in Toronto (Canada) and the concession-holder
of the ETR 407 toll road, in which Ferrovial has a 67.10% ownership interest. Its assets and liabilities are
denominated in Canadian dollars.
-
Budimex S.A. has its registered office in Poland and engages in construction. Ferrovial has a 59.06%
ownership interest in this company, whose assets and liabilities are denominated in zlotys.
-
The following companies are concession-holders of toll roads in Chile, and their assets and liabilities are
denominated in Chilean pesos:
– Ruta de Araucanía Sociedad Concesionaria S.A., concession-holder of the Collipulli-Temuco toll road and
wholly-owned subsidiary of Ferrovial.
– Ruta de los Ríos Sociedad Concesionaria S.A., concession-holder of the Temuco-Río Bueno toll road, in
which Ferrovial has a 75% ownership interest.
– Autopista del Maipo S.A., concession-holder of the Santiago-Talca toll road, a wholly-owned subsidiary of
Ferrovial.
– Talca Chillán, sociedad concesionaria S.A., concession-holder of the Talca-Chillán toll road, in which
Ferrovial has a 49.9% ownership interest.
-
Aeropuerto de Cerro Moreno Sociedad Concesionaria S.A. (wholly-owned subsidiary of Ferrovial);
Inversiones y Técnicas de Aeroportuarias S.A (company which manages various airports in Mexico, and in
which Ferrovial has a 24.5% ownership interest); Bristol International Airport PLC (which manages Bristol
airport, and in which Ferrovial has a 50% ownership interest); Sydney Airport Corporation Ltd, (which
manages Sydney airport, and in which Ferrovial has a 19.6% ownership interest).The assets and liabilities of
these companies are denominated in Chilean pesos, Mexican pesos, pounds sterling and Australian dollars,
respectively.
In 2002 the main currencies in which the assets and liabilities of Ferrovial Group investees are denominated
depreciated with respect to the euro.This depreciation was 17.3% in the case of the Canadian dollar, 24.7% in
the case of the Chilean peso, 11% in the case of the Polish zloty, 5% in the case of the pound sterling and 32.7%
in the case of the Mexican peso. As regards the Australian dollar, depreciation was 11.2% from June 2002, the
date of acquisition by the Group of 19.6% of Sydney Airport Corporation Ltd.
100
Annual Report 2002
This led to a decrease in assets and liabilities in the Group’s balance sheet, particularly the assets used in
concession activities in Canada and Chile and in construction activities in Poland. The tables in the following
notes to financial statements, which explain the variation in assets and liabilities, include a column relating to the
effect of the exchange rate in those cases in which its impact is significant.
The net impact of the variation in assets and liabilities, after deducting the impact on minority interests, is
included under the “Shareholders’ Equity - Translation Differences” caption (see Note 16). This led to a
reduction in equity of €99,459 thousand in 2002.
(7) START-UP EXPENSES
The variations in 2002 were as follows:
Thousands of Euros
Balance at
12/31/01
Changes in
Consolidated
Group
Additions/
Retirements
Amortization
Reclassification
5,547
6
9,676
-2,081
-3,621
Effect
Balance at
of Exchange 12/31/02
Rate
Start-up and
capital increase
-123
9,404
expenses
The main addition in the year relates to transfer tax settled by Cintra, Concesiones de Infraestructuras de
Transporte, S.A. arising from the capital increase made in the year, which was subscribed in full by the Macquarie
Infraestructure Group (see Note 1-b).
The reclassifications were mainly made at Bristol International Airport Ltd. (See Note 10-e).
101
(8) INTANGIBLE ASSETS
The variations in 2002 in the balance of this caption in the consolidated balance sheet were as follows:
Thousands of Euros
Balance at
12/31/01
Administrative concessions
Rights on leased assets
177,220
9,184
Total investment
Effect of
Exchange
Rate
Balance at
12/31/02
18
-
2,937
1,063
-1,740
-4,645
-1,922
-50
-23,017
-
153,496
5,552
882
7
234
-
-28
-
1,095
6,183
16
2,869
-33
1,253
-362
9,926
193,469
41
7,103
-6,418
-747
-23,379
170,069
Research and development expenses
Computer software and
other intangible assets
Change in
Consolidated Additions Retirements Reclassification
Group
Accumulated amortization
-16,816
-
-8,990
4,581
-1,681
494
-22,412
Total
176,653
41
-1,887
-1,837
-2,428
-22,885
147,657
The main item included under intangible assets relates to the “Administrative Concessions” caption, which
includes the payments made by Group companies as consideration for the obtainment of certain administrative
concession contracts.
Most of the balances relating to the “Rights on Leased Assets” caption are in the Services division and the leased
assets are mainly transport equipment and machinery required for the performance of infrastructure upkeep
activities.
The costs paid to third parties for the acquisition of computer software are recorded under the “Computer
Software” caption.The maximum amortization period for computer software is three years.The main addition
in 2002 arose in the Construction division as a result of the implementation of new financial information and
management applications at Budimex.
A more detailed breakdown, by business area, of the administrative concessions caption is as follows:
Thousands of Euros
Balance at Changes in
12/31/01 Consolidated
Group
Toll roads and airport
Car parks
18,804
Services
32,576
Other
Total concessions
102
123,445
Accumulated amortization
-11,463
Total
165,757
Annual Report 2002
2,022
-1,625
-1,922
Effect of Balance at
Exchange 12/3102
Rate
-23,017
98,903
18,804
18
2,395
177,220
Additions Retirements Reclassification
18
18
869
33,463
46
-115
2,937
-1,740
2,326
-1,922
-23,017
153,496
-2,058
451
-1,715
179
-14,606
879
-1,289
-3,637
-22,838
138,890
The main balance included under the “Administrative Concessions” caption relates to toll roads and airports,
and the largest amounts included in this balance are those paid for the assets and rights relating to toll road
concessions in Chile, the cost net of amortization of which amounted to €91,519 thousand as of December
31, 2002.The depreciation of the Chilean peso with respect to the euro in 2002 led to a reduction of €23,017
thousand in the balance with respect to December 2001. The main additions in 2002 relate to payments of
transfer tax relating to concession contracts held by Madrid Sur Concesionaria Española S.A. and Autopista del
Sol, C.E.S.A.
(9) TANGIBLE FIXED ASSETS
The detail of the tangible fixed assets and of the related accumulated depreciation as of December 31, 2002,
is as follows:
Thousands of Euros
Additions
Retirements
Reclassification
Exchange
12/31/02
Rate
Group
Investment
Investment in toll roads and airports 4,664,680
581,939
Plant and machinery
238,032
7,748
68,115
-22,094
81,066
4,235
38,795
-32,342
5,150,594
13,753
716,536
-63,239
-24,747
-70,530
16,986
-42,440
-35
-1,082
646,006
-46,253
-67,222
-575,205 4,878,107
Total investment
Accumulated depreciation
-242,519
Allowances
Total
27,687
-8,803
-1,047
4,907,028
13,753
5,870
-574,531 4,614,004
166,816
Other fixtures, tools and furniture
1,770
-58,084
Land and structures
-4,341
188,999
13,274
-6,285
298,790
14,193
-1,389
104,558
-586,546 5,206,351
11,341
-327,162
• Investment in toll roads and airports
The main balance under the “Tangible Fixed Assets” caption is “Investment in Toll Roads and Airports”, which
represented 93.5% of the total asset cost net of depreciation under this caption as of December 31, 2002.
This caption includes the investments in assets at transport infrastructure concession-holders (mainly
construction work performed). These assets are used directly in operations and have sufficient risk coverage
through the related insurance policies.
Most toll road and airport assets relate to administrative concession contracts. Under the concession contract,
these assets must revert to the Administration at the end of the concession term, being included in the Group’s
balance sheet until such time.
103
The following table shows the balances of and variations in the “Investments in Toll Roads and Airports” caption,
by company:
Thousands of euros
Additions
Retirements
Reclassification
Exchange
12/31/02
Rate
Group
407 ETR International, Inc.
Autopista del Sol, C.E.S.A.
2,796,073
19,185
561,695
123,397
-414,253
2,401,005
685,092
Autopista Terrasa-Manresa, S.A.
213,119
508
-4
213,623
Autopista Temuco Río Bueno. (c)
196,568
2,027
-39,231
159,364
Autopista Collipulli Temuco. (c)
205,538
22,087
-43,581
184,044
Autopista Santiago Talca. (c)
292,102
77,221
-68,613
304,054
Autopista R-4 Madrid-Sur, C.E.S.A.(a)
3,344
8,862
190,875
199,737
Euroscut Norte Litoral, S.A.
18,175
5,072
23,247
Autopista Trados M-45, S.A.
72,182
23,298
95,480
Euroscut-Soc. Conces. Da Escut do Algarve, S.A.
92,922
115,993
208,915
200,473
2,032
Bristol International Airport, Plc (b)
Aeropuerto Cerro Moreno Soc Conc, S.A.
Total
6,971
244
4,664,680
581,939
-61,428
-7,439
133,638
-1,410
5,805
-58,084
-574,531
4,614,004
a) Includes the balances of Inversora de Autopistas del Sur, S.L.
b) Includes the balances of Tidefast, Ltd.
c) The concession-holders are Ruta de los Ríos Sociedad Concesionaria S.A. (Temuco-Río Bueno toll road), Ruta de Araucania Sociedad Concesionaria S.A. (CollipulliTemuco toll road) and Autopista del Maipo S.A. (Santiago-Talca toll road). In these notes to consolidated financial statements these three companies will be referred
to by their names as included in the table above.
The main additions in the reporting period relate to toll roads under construction in 2002. In 2002 construction
work was completed and the Estepona-Guadiaro section of the Autopista del Sol, and the road operated by
Autopista Trados M-45, S.A. entered into operation. Also, Autopista Santiago Talca completed construction of
the Angostura trunk road, Autopista Temuco Río Bueno opened five access roads and Autopista Collipulli
Temuco opened the Quepe trunk road, the Temuco bypass and three access roads.
The reclassification made at Bristol International Airport Plc. is discussed in Note 10-e.
As discussed in Note 6, the variations in 2002 of the exchange rate of the euro against the currencies of
countries with significant fixed asset balances relating to toll roads and airports (mainly Canada and Chile) has
led to a considerable reduction in the balances of these assets.
The following table shows the breakdown, by company, of the ending balance of the “Investments in Toll Roads
and Airports” caption, and of the interest capitalized from inception in the construction period (see Notes
4.u.2.1 and 27) and the amount capitalized in the year. The table also shows the percentage of completion of
this construction work as of December 31, 2002.
104
Annual Report 2002
Investment in Toll Roads and Airports
Sections
in
operation
407 ETR International, Inc.
Sections
under
construction
Total
Capitalized Interest
Percentage
of completion
From
2002
of construction Inception
work
2,401,005
-
2,401,005
-
107,146
-
685,092
-
685,092
-
26,467
1,399
213,623
-
213,623
-
16,335
-
Autopista Temuco Río Bueno. (c)
159,364
-
159,364
-
12,021
100
Autopista Collipulli Temuco. (c)
184,044
-
184,044
-
17,672
807
Autopista Santiago Talca. (c)
304,054
-
304,054
-
29,587
13,424
Autopista R-4 Madrid-Sur, C.E.S.A. (a)
-
199,737
199,737
26,2%
2,428
2,224
-
23,247
23,247
2,1%
1,700
1,556
95,480
-
95,480
-
3,627
-
Euroscut-Soc. Conces. Da Escut do
Algarve, S.A.
-
208,915
208,915
75%
11,404
5,682
Bristol International Airport, Plc. (b)
133,638
-
133,638
-
-
5,805
-
5,805
99
-
4,182,105
431,899
4,614,004
228,486
25,192
Aeropuerto Cerro Moreno Soc.
Concesionaria, S.A.
Total
-
a) Includes the balances of Inversora de Autopistas del Sur, S.L
b) Includes the balances of Tidefast, Limited
c) The concession-holders are Ruta de los Ríos Sociedad Concesionaria S.A. (Temuco-Río Bueno toll road), Ruta de Araucania Sociedad Concesionaria S.A.
(Collipulli-Temuco toll road) and Autopista del Maipo S.A. (Santiago-Talca toll road). In these notes to financial statements these three companies will be
referred to by their names as included in the table above.
• Other investments in fixed assets
The following table shows the balances of and variations in the other tangible fixed assets, by business, net of
depreciation:
Thousands of Euros
Balance at
12/31/01
Changes in
Consolidated
Group
Additions
Retirements Reclassification Exchange 12/31/02
Rate
Construction
120,509
52,838
-19,627
516
-6,195
148,041
Infrastructure
106,446
25,525
-15,539
-5,077
-145
111,210
Real Estate
14,579
Services
27,516
Other
Total
13,753
8,473
277,523
13,753
11,519
-6,007
20,091
2,080
-14,208
29,141
4,380
-3,919
-1,085
96,342
-59,300
-5,646
7,849
-6,340
316,332
105
The variations in the consolidated Group relate mainly to assets included at companies in the Novipav Group.
The foregoing table shows that, excluding the investment in toll roads and airports, 46.8% of the other tangible
fixed assets net of depreciation were in the Ferrovial Group’s Construction Division, and consisted mainly of
construction machinery. Also noteworthy is the Infrastructure Division’s investment, mainly in off-street car
parks, which account for 35.2% of the total investment.
In the Real Estate division most assets are recorded under the “Land and Buildings” caption (€14,531 thousand),
mainly relating to office buildings owned by Setecampos, S.A., which are in the construction phase.
The other tangible fixed assets in the Services division relate mainly to plant, machinery and transport
equipment, together with a balance of €6,860 thousand recorded under the “Land and Buildings” caption
relating mainly to Grupisa Infraestructuras S.A. and Sopovico S.A.
Except for assets relating to off-street car parks (included in the Infrastructure line of business, the balance of
which amounted to €93,000 thousand as of December 31, 2002) and certain assets of the Services division
(for an approximate volume of €7,900 thousand), there are no restrictions on title to these assets. In the case
of off-street car parks, since they are administrative concessions with a limited duration, title to the assets is
subject to the same restrictions as toll roads and airports (reversion to the Administration at the end of the
concession term). Also, in the case of Services, in certain concession contracts for the Collection of Urban Solid
Waste and Street Cleaning, it is required that assets used in providing the service (normally transport
equipment and machinery) revert to the granting entity at the end of the concession contract.
Fully depreciated assets amounted to €67,659 thousand.
The tangible fixed assets not used in operations in 2002 were scantly material with respect to the consolidated
total ending balances.
The tangible fixed assets located abroad amounted to €3,448,571 thousand, net of depreciation, of which
€3,379,349 thousand related to toll road and airport concession-holders.
(10) LONG-TERM FINANCIAL INVESTMENTS
a) Investments in companies accounted for by the equity method
This caption includes the companies directly and indirectly more than 20% but not more than 50% owned, and
those in which a holding of less than 20% is owned and over which significant management influence is
exercised.
106
Annual Report 2002
The detail of the investments in the companies accounted for by the equity method as of December 31, 2002, is as
follows:
Balance at
12/31/01
Infrastructure
Europistas Concesionaria
Española, S.A.
Changes in
Consolidation
Group
Additions Retirements Income/
(Increase
(Decr.
Loss
%Invest.)
%Invest. for the year
Dividend/
Equity
Dist
Exchange 12/3102
Rate
-43,998
61,642
102,307
-3,268
6,601
Túneles de Artxanda, S.A.
7,327
2,556
-75
9,808
Aparcamientos Urbanos
de Sevilla, S.A
1,660
126
-4
1,782
Estacionamientos
Guipuzcoanos, S.A.
6,384
437
6,821
S. Munic. de Aparc. y Serv.
de Málaga, S.A.
3,889
3,634
255
Inversiones Técnicas
Aeroportuarias, S.A.
49,905
-263
Talca Chillán, Sociedad
Concesionaria, S.A.
19,938
-478
Infoser Estacionamientos, A.I.E.
60
Est. Urbanos de León, S.A.
25
Sydney Airport
Corporation, Ltd.
428
233,782
-2,000
-9,916
37,726
-4,519
14,941
-19
41
220
673
-4,690
-4,837
-22,711
201,544
Real Estate
Lusivial Promoçao e Gestao
Imobiliaria, S.A.
8,668
157
Inmobiliaria Urbecentro
Dos, S.A.
1,629
-136
MSF Madrid Holding Holanda,
B.V.
234
7,197
Recoletos 7-9, S.L.
148
-148
0
Ortega 22, S.L.
257
-257
0
8,825
-1,123
-7,060
370
371
Promovial, Promoçao
Inmobiliaria, Ltda
28
Domovial, S.L.
45
-45
0
Recoletos, 5, S.L.
22
-22
0
8
36
Services
Necrópolis Valladolid, S.A.
3,213
194
Other investments in companies accounted for
by the equity method
108
Total
205,507
74
232
233,941
74
-236
3,171
-242
-472
9,162
172
-58,131
-38,269
351,812
107
The share in income (loss) shown in the foregoing table is net of taxes. Corporate income tax amounted to
€3,254 thousand and is recorded under the “Corporate Income Tax” caption in the accompanying 2002
consolidated statement of income.
The main variations in 2002 were as follows:
In the Infrastructure division:
– Acquisition of 19.6% of Southern Cross Airports Corporation Holding, a wholly-owned subsidiary of Sydney
Airport Corporation Ltd and owner of the operating rights for Sydney airport.This company contributed a
financial loss of €4,690 thousand incurred as a result of the financial cost of the external financing used for
the acquisition of the company holding the airport concession. In 2002 this company paid dividends and
refunded equity, which is recorded in the table above.These amounts, which were repatriated to Spain in
January 2003, were assured through a hedging contract referred to in Note 5. The depreciation of the
Australian dollar against the euro since the date on which the Ferrovial Group acquired 19.6% led to a
reduction in the investment’s value of €22,711 thousand as of December 31, 2002.
– Refund of equity of Europistas for €30,224 thousand, and dividend distribution by this company for €13,774
thousand.
– Capital increase at Túneles de Artxanda of €2,556 thousand.
– Apart from the holding in Sydney airport, the holdings in Talca Chillán (Chilean peso) and ITA (Mexican peso)
are also denominated in foreign currency.The impact of the variation in the exchange rate on both holdings is
reflected in the table below.
Noteworthy in the Real Estate division was the following:
– Within the cooperation agreement with Morgan Stanley for investment in and renovation of office buildings
for subsequent lease or sale, gains were made by Madrid Holding Holanda B.V. as a result of the sale of the
companies holding title to office buildings in Madrid (Ortega and Gasset 22 and Recoletos 7-9).The income
from this sale was distributed via a dividend.
108
Annual Report 2002
b) Long-term investment securities
The variations in the net book value of these securities as of December 31, 2002, were as follows:
% of
Balance at
Ownership 31/12/01
Telecommunications
Grupo Corporativo ONO, S.A.
10.41 %
Wanadoo, S.A.
Additions
50,192
32,642
49,969
32,642
Retirements Reclass.
-223
Parque temático de Madrid, S.A.
5,872
1,048
2%
2,467
15.48 %
2,053
Terra Mítica-Parque
Temático de Benidorm, S.A.
0.64%
Budimex investments
50%
Other construction
Other
-223
12,016
Buil2Edifica
-1,562
Total Allowances
Long-term investment securities, net cost
-719
-668
14,939
3,515
2,053
1,352
7,072
3,462
424
10
1,352
-1,562
-719
-668
7,585
434
26,412
* Total long-term investment securities
82,611
82,611
223
Construction
Exchange 31/12/02
Rate
-75
88,620
38,514
-8,459
-6,070
80,161
32,444
-1,860
26,337
-719
-668
123,887
-14,529
-1,860
-719
-668
109,358
• Significant additions:
– The capital increase subscribed by Ferrovial Telecomunicaciones at Grupo Corporativo ONO for €32,642
thousand.
• Significant retirements:
– Sale by Ferrovial Telecomunicaciones of its holding in Wanadoo.This sale gave rise to income of €11,245
thousand, included under the “Gains on Fixed Assets” caption in the accompanying 2002 consolidated
The “Long-Term Investment Securities - Other” caption includes Burety, S.L.’s 49% holding in seven Economic
Interest Groupings engaging in the lease of ships for €20,141 thousand.
c) Loans to companies accounted for by the equity method
The balance of this caption relates mainly to the loan granted to MSF Madrid Holding Holanda, B.V., which is
25% owned by the Group and owns various office buildings in Madrid through different subsidiaries.
109
d) Other loans
The variations in this caption in 2002 were as follows:
Thousands of Euros
Net Cost
BEGINNING BALANCE
Additions
335,707
6,382
Reclassifications
-34,485
Effect of exchange rate
-35,201
Retirements
- 63,040
ENDING BALANCE
209,363
The main item in this caption is the long-term deposits placed by the toll road concession-holders as security
for their bond issues. Of the total amount recorded under this caption (€209,352 thousand), €191,543
thousand relate to this item.
Of this amount, €166,461 thousand relate to 407 ETR International Inc. The balances relating to concessionholders are mainly restricted and have to remain in the companies’ assets as security for bond and debenture
issues by the concession-holders.
The “Reclassifications” caption includes €32,302 thousand at Budimex relating to the balance of retentions by
way of guarantee to Budimex’s customers, which were reclassified as current assets.
This caption also includes €2,192 thousand of loans to employees granted at rates similar to market interest
rates, and long-term guarantees and deposits totaling €5,647 thousand, the largest balance of which is in the
Construction division (€3,014 thousand), mainly for guarantees given in construction tenders.
This caption includes €499 thousand relating to “Loans to Group Companies” for the amount of loans granted
to proportionally consolidated Group companies, and is included in the net cash position (see Note 21).
110
Annual Report 2002
e) Consolidation goodwill
The variations in this caption in 2002, by business division and company, were as follows:
Thousands of Euros
2001
Variations in the Year
Construction
Budimex, S.A.
Exchange
Investment
rate
Investment
Amort.
85,637
-5,186
715
-4,861
-2,048
84,304
-10,047
85,601
-5,185
715
-4,859
-2,048
84,268
-10,044
36
-1
36
-3
Bygging Encofrados Deslizantes, S.A.
Infrastructure
Addition/
Retirement
2002
Amort.
-2
104,412
-3,710
251,341
-20,501
Cintra Aparcamientos, S.A
36,068
-2,122
-2,121
36,068
-4,243
Dornier, S.A.
10,155
-844
-838
10,155
-1,682
336
-17
-18
335
-35
Soc. Munic. de Aparc. y Serv. de Sevilla, S.A.
Balsol 2001, S.A.
801
-13
Other (car parks)
1,199
-65
407 ETR International Inc.
3,684
Autopista Santiago Talca.
16,510
Autopista del Sol Conces. Española, S.A.
Europistas, Concesionaria Española, S.A.
Grupo Don Piso
Grupisa Infraestructuras, S.A.
Grupo Eurolimp
-5,352
-39
-12
801
-52
1,187
-65
-236
92,392
-4,947
-219
-759
-3,132
13,378
-978
22,278
-37
-1,114
22,278
-1,151
13,381
-393
-828
13,381
-1,221
61,366
-6,127
20,499
-1,504
63,350
-477
-6,127
-1,984
-1,027
20,499
-477
-1,027
20,499
-1,504
22,061
-781
11,635
-1,283
33,696
-2,064
14,372
-781
-3
-758
14,369
-1,539
-384
7,689
-384
7,689
Grupisa Chile
90
Grupo Novipav
Total
-16,791
-4,947
20,499
Services
-1
88,944
Tidefast, Ltda.
Real Estate
152,281
Amort.
232,609
-10,154
-40
11,548
-101
164,631
-23,962
90
-7,400
-40
11,548
-101
389,840
-34,116
Infrastructures
The main variations within this business division were as follows:
-
Acquisition by Cintra, Concesiones de Infraestructuras de Transporte, S.A. of 5.81% of 407 ETR International
Inc, giving rise to goodwill of €88,944 thousand.
-
The additional price paid in the acquisition of 50% of Bristol International Airport Ltd (full owner of Bristol
airport) was reclassified from tangible fixed assets (see Note 9) to goodwill. In 2001 this amount was
considered as an addition to assets.
111
Services
-
Goodwill arising in the acquisition of the Novipav Group amounting to €11,548 thousand.
(11) DEFERRED EXPENSES
Thousands of Euros
Balance at
12/31/01
Changes in
Consolidated
Group
Additions
Retirements
Reclass.
Effect of
Exchange
Rate
Balance at
12/31/02
-33,195
-104,303
848,749
Financial
expenses
capitalized
Other
on completion
of construction
Toll road and airport
concession-holders
728,821
199,148
59,417
-1,139
Other companies
Construction
128
128
Infrastructure
8,926
6,000
-635
14,291
Real estate
9,445
67
-1,645
7,867
Services
5,292
63
-993
4,362
Other
25
Ending Balance
752,612
199,148
65,572
25
-4,412
-33,195
-104,303
• Toll road and airport concession-holders
The balance under this caption arose as a result of the following:
– Financial expenses capitalized on completion of the construction period pursuant to the Ministerial Order
dated December 10, 1998, enacting the regulations for adaptation of the Spanish National Chart of Accounts
for toll road concession-holders - See Notes 4.g and 4.u.4.1.
– Differences between the face value of certain bonds issued at a discount and the cash amount received.This
amount reflects the financial expenses that will be incurred over the term of the issue.
Below is a detail, by company, of the variations in these items.
112
Annual Report 2002
875,422
• Other companies
The “Other Companies” caption includes mainly:
– The deferred charges arising from the acquisition of Fertilizantes Orgánicos de Galicia, S.A. in 1997 (Services
division) and Lar 2000, S.A. (Real Estate division) in 1998 for €4,300 thousand and €7,853 thousand,
respectively, net of amortization, as of December 31, 2002.
– The advance lease payment made by Cintra Aparcamientos, S.A., relating to the operating rights on two car
parks in Jerez amounting to €5,411 thousand.The concession period for which this advance has been paid
commences in 2005, the year in which this advance payment will begin to be amortized.
The variations in 2002 at toll road and airport concession-holders relate to:
Thousands of Euros
Balance at 12/31/01
Financial expenses Financial
capitalized on
expenses
completion
on discounted
of construction
bonds
Variations
Balance at 12/31/02
Financial expenses
Financial
Financial expenses
Financial
capitalized on
expenses
capitalized on expenses arising
Other
Other
Other
completion
on discounted
completion
on discounted
of construction
bonds
of construction
bonds
Toll roads
330,607
Autopista Terrasa
Manresa, S.A.
145,669
63,122
41,461
143,862
775
9,204
38,381
-33,195
-75,320
474,469
207
154,873
18,046
29,927
-33,859
982
56,427
Autopista Temuco
Río Bueno.
4,466
9,734
5,873
648
10,339
10,382
Autopista Collipulli Temuco.
2,807
28,104
10,526
4,283
13,333
32,387
0
726
1,368
-11
1,368
715
Euroscut-Soc Concs
Da Escut do Algarve, S.A.
11,249
-913
10,336
Euroscut Norte Litoral S.A.
3,823
1,365
5,188
631
47,019
10,269
23,500
10,900
70,519
Airports
Aeropuerto Cerro Moreno
Soc Concesionaria, S.A.
Total
247
522,561
63,122
143,138
216
199,148
-33,195
-46,025
463
721,709
29,927
97,113
The most significant variation in deferred charges of toll road and airport concession-holders arose from the
impact of the exchange rate variations in 2002.This impact is included in the “Other” column in the above table,
the balance of which decreased by €46,625 thousand in 2002.
113
The decrease in financial expenses on discounted bonds at 407 ETR International Inc relates to the financial
expense incurred in the year on bonds issued at a discount. The balancing entry on the liability side of the
balance sheet is an addition to financial debt.The balance as of December 31, 2002 of the financial expense on
discounted bonds included under the “Deferred Expenses” caption, with the related exchange rate impact
(which is reflected in the “Other” column in the foregoing table) is €23,912 thousand (see Note 27).
(12) INVENTORIES
The variations in the balances of the "Inventories" caption as of December 31, 2002, were as follows (amounts
in thousands of euros):
Balance at 12/31/01
Land lots and unbuilt land
180,275
Balance at 12/31/02
212,654
Variation
32,379
Raw materials and other purchases
57,361
72,430
15,069
Property developments in progress
678,975
819,995
141,020
Completed property developments and buildings acquired
74,849
70,925
-3,924
Initial expenses and site facilities
21,969
20,337
-1,632
Advances
10,659
19,584
8,925
Allowances
-2,302
-2,006
296
1,021,786
1,213,919
192,133
Total
The detail of inventories, by business line, is as follows (amounts in thousands of euros):
Balance at 12/31/01
Construction
Infrastructure
112,878
Balance at 12/31/02
109,780
Variation
-3,098
6,539
19,005
12,466
896,106
1,078,205
182,099
Land
591,001
715,727
124,726
Structures
305,105
362,478
57,373
Real Estate
Services
4,885
5,648
763
Other
1,378
1,281
-97
1,021,786
1,213,919
192,133
Total
The increase in the “Inventories” balance from 2001 to 2002 was mainly due to the real estate business. In 2002
this business line acquired new land for a total of €343,200 thousand.
As of December 31, 2002, €13,299 thousand of specific financial expenses of real estate developments were
capitalized in inventories, as indicated in Note 4.u.3.
114
Annual Report 2002
(13) CUSTOMERS RECEIVABLES FOR SALES AND SERVICES
The breakdown of the balance of the “Customers Receivables for Sales and Services” caption as of December
31, 2002, is as follows:
Balance at 12/31/01
Customer receivables
Variation
1,086,991
71,538
208,418
208,236
-182
63,885
64,192
307
Notes receivable
Retentions
Completed work pending certification
TOTAL
Balance at 12/31/02
1,015,453
198,122
252,760
54,638
1,485,878
1,612,179
126,301
The “Customer Receivables” caption is net of €6,642 thousand relating to the offset of certificates against taxes.
Approval had yet to be issued in this connection as of December 31, 2002.
Also, the balance is net of €70,257 thousand of certificates and other collection documents assigned without
recourse to financial institutions.
The breakdown, by business, of the balance of the “Trade Receivables for Sales and Services” caption as of
December 31, 2002, is as follows:
Balance at 12/31/01
Balance at 12/31/02
Variation
Construction
1,077,455
1,273,655
196,200
Infrastructure
73,177
80,265
7,078
Real Estate
192,897
69,452
-123,445
Services
142,169
188,411
46,242
180
396
216
1,485,878
1,612,179
126,301
Other
Total
The percentage distribution of commercial loans by customer type for 2002 is as follows:
Central
Government
Autonomous
Communities
Local
Councils
Private
Customers
Other and
Foreign
Total
Construction
20.08%
13.5%
9.09%
23.05%
34.28%
100%
Infrastructure
0.79%
0.19%
30.83%
64.84%
3.35%
100%
-
-
91.3%
8.7%
100%
20.00%
34.00%
25.00%
2.00%
100%
-
-
-
100%
100%
12.99%
12.89%
28.54%
27.51%
100%
Real Estate
Services
Other divisions
Total
19.00%
18.02%
115
The average age of total receivables from public authorities in the construction line of business in Spain is as
follows:
Months
Central government
2.3
Autonomous communities
3.2
Local councils
2.6
(14) OTHER RECEIVABLES
The following table shows the breakdown of the balance of the “Other Receivables” caption distinguishing the
“Receivable from Public Authorities” caption from the rest.
Thousands of Euros
Balance at 12/31/01
Balance at 12/31/02
Variation
Other receivables
150,836
123,518
-27,318
Receivable from public authorities
293,305
330,904
37,599
Total
444,141
454,422
10,281
The “Other Receivables” caption includes balances receivable arising from other than normal business activities.
The “Receivable from Public Authorities” caption includes the balances receivable from public authorities for
various items. The main balances are “VAT refundable” (€177,155 thousand) and “Corporate Income Tax
Receivable” (€134,448 thousand), mainly for prepayments made from 2002 income and for deferred income
tax assets.
(15) OPERATING PROVISIONS
The detail of the operating allowances balance on both the asset and the liability sides of the balance sheet is
as follows:
Thousands of Euros
Balance at 12/31/01
Balance at 12/31/02
Variation
ASSETS
Provision for doubtful customer receivables
Other provision for receivables
41,673
10,916
77,232
8,586
35,559
-2,330
Total
52,589
85,818
33,229
Provision for completion of construction work
Other provisions
87,284
3,984
134,350
15,964
47,066
11,980
Total
91,268
150,314
59,046
143,857
236,132
92,275
LIABILITIES
Ending balance
116
Annual Report 2002
The following table shows the “Operating Allowances” balance on both the asset and the liability sides by
business:
Thousands of Euros
Balance at 12/31/01 Balance at 12/31/02
Variation
Construction
116.034
195.456
79.422
Infrastructure
20.260
29.457
9.197
480
908
428
6,832
10,057
3,225
251
254
3
143,857
236,132
92,275
Real Estate
Services
Other
Total
The main operating allowance balances are in the Construction division and relate to “Allowances for Expenses
Arising from Completion of Construction Work” and “Allowances for Doubtful Customer Receivables”
recorded in accordance with the methods indicated in Note 4.u.1.
(16) SHAREHOLDERS’ EQUITY
The breakdown of and variations in consolidated equity in 2002 are as follows:
Reserves at the Parent Company
Balances at December
31, 2001
Capital
stock
Share
premium
Legal
Reserve
Other
reserve for treasury reserv.
stock
140,265
193,192
16,763
61,248
209,531
Reserves
Reserves Translation Interim
Total
consol. for shares of differences dividend Income Shareholders’
companies the parent
Equity
company
358,233
6,859
17,905
-24,544
218,263
1,197,715
24,544
-55,877
-31,333
Distribution of income
Dividends
Reserves
4,740
Reserves for Parent Company shares
-19,128
-13,222
170,868
19,128
1,745
-162,386
0
-99,459
Other
-99,459
-664
Interim dividend
0
-1,745
-664
0
-27,501
2002 income
-27,501
455,819
455,819
455,819
1,494,577
Balance at December
31, 2002
140,265
193,192
21,503
42,120
215,437
530,182
5,114
-81,554
-27,501
Capital stock and share premium
As of December 31, 2002, Grupo Ferrovial, S.A.’s capital stock consisted of 140,264,743 fully subscribed and
paid registered shares of €1 par value each, all carrying equal rights.
117
Additional paid-in capital amounted to €193,192 thousand and is unrestricted.
As of December 31, 2002, the shareholders owning more than 10% of Grupo Ferrovial, S.A.’s capital stock
were Casa Grande de Cartagena, S.L. with 17.77 % and Portman Baela, S.L. with 40.53%.
Legal reserve
Under the revised Corporations Law, 10% of income for each year must be transferred to the legal reserve
until the balance of this reserve reaches at least 20% of capital stock.
The legal reserve can be used to increase capital provided that the remaining reserve balance does not fall
below 10% of the increased capital stock amount.
Except as mentioned above, until the legal reserve exceeds 20% of capital stock, it can only be used to offset
losses, provided that sufficient other reserves are not available for this purpose.
The variation in 2002 relates to the amount allocated to the Legal Reserve in the distribution of 2001 income
of the Parent Company, amounting to €4,740 thousand.
Reserve for treasury stock and reserve for Parent Company shares
There are restricted reserves which are equivalent to the cost of own shares and Parent Company Shares
recorded on the asset side of the balance sheet and they must be maintained as long as the shares are not
disposed of or retired.
Reserve for treasury stock
As of December 31, 2002, Grupo Ferrovial, S.A. owned 2,757,942 shares of treasury stock representing 1.97%
of capital stock and had set up the reserve required under corporate legislation in the event of ownership of
treasury stock.
In 2002, Grupo Ferrovial, S.A. acquired 16,605 shares of treasury stock and sold 1,274,320 shares. Gains of
€15,971 thousand arose from these sales.
Reserve for Parent Company shares
Betonial, S.A. owns 346,975 Parent Company shares, representing 0.25% of its capital stock and has set up the
mandatory reserve required by corporate legislation in the event of ownership of Parent Company shares. In
2002 Betonial, S.A. sold 11,352 Grupo Ferrovial, S.A. shares, giving rise to net gains of €150 thousand.
Ferrovial S.A. did not own Grupo Ferrovial S.A. shares as of December 31, 2002. However, in 2002 this company
acquired 358,160 Grupo Ferrovial, S.A. shares, which were sold in that year together with the 104,131shares it
owned as of December 31, 2001, giving rise to net gains of €864 thousand.
118
Annual Report 2002
These variations gave rise to a decrease of €19,128 thousand in the Reserve for Parent Company Shares and
to an increase of the same amount in Consolidation Reserves.
Revaluation reserve (Royal Decree-Law 7/1996)
As permitted by the legislation in force as of December 31, 1996, certain Group companies revalued their
tangible fixed assets.
The balance of the revaluation reserve, which amounts to €1,948 thousand at the Parent Company, was
approved by the tax authorities in 1998 and can now be used, free of tax, as follows:
– To offset prior years’ losses
– To increase capital stock
– It can be taken to unrestricted reserves from December 31, 2006. However, this balance cannot be
distributed until the monetary surplus has been realized.The surplus will be deemed to have been realized in
respect of the portion on which depreciation has been taken for accounting purposes or when the revalued
assets have been sold or retired from the accounting records
Reserves at fully consolidated companies, reserves at companies accounted for by the
equity method and translation differences
EXHIBIT IV includes a breakdown, by company and business division, of the Consolidation Reserves.
The impact on the Group’s Shareholders’ Equity of the exchange rate variations discussed in Note 6 was a
reduction of €99,459 thousand therein (this reduction is reflected in the variation in the balance of “Translation
Differences”, which amounted to €+17,905 thousand in December 2001 and to €-81,554 thousand in
December 2002).
The breakdown, by company and business division, of translation differences as of December 31, 2002 is as
follows:
Translation
Difference
FULLY CONSOLIDATED COMPANIES
Construction
Budimex, S.A.
Ferrovial Agromán Internacional Canadá, S.A.
Ferrovial y Agromán Empresa Constructora, Ltda.
Ferrovial Agromán Chile, S.A.
Ferrovial Agromán Puerto Rico, S.A.
Delta Ferrovial, Ltd.
Other
2,041
-255
7,424
-1,406
116
-4,423
-261
Infrastructure
Autopista Temuco Río Bueno.
Cintra Chile, Limitada
-16,021
-6,565
-3,221
-21,168
-12,585
119
Cintra Aparcamientos, S.A.
377
Autostrada Poludnie, S.A.
-29
Other
-1,555
Real estate
Ferrovial Inmobiliaria Chile Limitada
-3,850
Services
Other
3
SUBTOTAL FULLY CONSOLIDATED COMPANIES
-61,378
COMPANIES ACCOUNTED FOR BY THE EQUITY METHOD
Infrastructures
Inversiones Técnicas Aeroportuarias, S.A.
36
Talca Chillán Sociedad Concesionaria, S.A.
-1,919
Sydney Airport Corporation Ltd.
-18,623
Other
256
Other
72
SUBTOTAL COMPANIESACCOUNTED FOR BYTHE EQUITY METHOD -20,178
Total
-81,554
(17) MINORITY INTERESTS
This caption in the consolidated balance sheet includes the proportional share in the equity of the companies
which are fully consolidated by the Group in which shareholders other than the Ferrovial Group have
ownership interests.
The detail of the variations in this caption is as follows:
Thousands of Euros
Beginning balance
425,337
Dividends
-15,213
Income
Capital increase
21,182
-102,787
52,000
Change in percentage of ownership
-32,751
Acquisition by Macquarie Infrastructure Group of holding in Cintra
428,507
Other variations
Ending balance
-1,963
774,312
Noteworthy was the €428,507 thousand increase in Minority Interests as a result of the acquisition by
Macquarie Infrastructure Group of a holding in the capital of Cintra, Concesiones de Infraestructuras de
Transporte, S.A. (see Note 1).
120
Annual Report 2002
The 2002 Capital Increase heading includes the capital increase subscribed to by Macquarie Infrastructure
Group at Cintra, S.A. and carried out to finance a further acquisition of a 5.81% holding in 407 ETR International
Inc.This capital increase amounted to €130,000 thousand and was 60% (€78,000 thousand) financed by Grupo
Ferrovial, S.A. and 40% (€52,000 thousand) financed by Macquarie Infrastructure Group.
As a result of this increase in the ownership interest in the Canadian concession-holder, the Changes in
Percentage of Ownership reflect the decrease in minority interests arising from this acquisition.
The breakdown of minority interests, by company and line of business, as of December 31, 2002 is as follows:
Thousands of Euros
COMPANY
Capital and Reserves Income (Loss)
Total
Construction
Budimex, S.A.
53,541
-6,600
46,941
163,714
44,032
207,746
Autopista de Toronto, S.L.
20,255
6,485
26,740
Autopista del Sol, C.E.S.A
32,316
7,102
39,418
Autopista Terrasa Manresa, S.A
24,327
5,369
29,696
9,507
2
9,509
13,272
5
13,277
Inversora de Autopistas del Sur, S.L.
29,714
Infrastructure
Euroscut-Sociedad Concesionaria da Escut do Algarve, S.A.
29,714
5,748
2,371
8,119
Cintra, Concesiones de Infraestructuras de Transporte, S.A.
409,259
-41,304
367,955
-12,446
3,231
-9,215
Cintra Chile, Ltda
-1,363
-2,728
-4,091
-9,985
550
-9,435
Europistas, C.E.S.A.
15,230
2,309
17,539
1,332
-405
927
Real estate
Nueva Marymontaña, S.A.
Other
TOTAL
-1,291
763
-528
753,130
21,182
774,312
The balance of minority interests at Cintra, S.A. includes the share of Macquarie Infrastructure Group in the
equity of all Cintra, Concesiones de Infraestructuras de Transporte, S.A. investees.
121
Non-Group companies with significant holdings in group´s subsidiaries
The companies having ownership interests of 10% or more in the capital stock of the Group companies as of
December 31, 2002, were as follows:
COMPANIES
Percentage of
Ownership
Shareholder
Construction
Constructora Delta Ferrovial Limitada
Infrastructure
407 International Inc.
Cintra, Concesiones de Infraestructuras
de Transporte, S.A.
Autopista Terrasa Manressa, S.A.
50%
16.77%/16.13%
40%
Delta, S.A.
SNC Lavalin/Macquarie Infraestructure Group
Macquarie infraestructure Group
15%
Unicaja
22.33%
Acesa
Autopista Trados-45, S.A.
50%
ACS
Tidefast Limited
50%
Macquarie Airports (UK) Limited
25%
Fondo Las Américas
Inversora de Autopistas del Sur, S.L.
Túneles de Artxanda, S.A.
Estacionamientos Alhondiga, S.A.
10%/10%/10%
20%
25%/25%
E.N.A./Unicaja/Caja Castilla La Mancha
BBK
Construcciones Lauki/Construcciones Bazola
Guadiana Park
25%
Iniciativas Pacenses/BBK
Real estate
Lusivial, S.A.
50%
Vallehermoso
50%
Grupo Lucsick
Habitaria, S.A.
Nueva Marymontaña, S.A.
Setecampos Sociedade Inmobiliaria, S.A.
FLG Omega, B.V.
Malilla 2000
44.9%
50%
50%
11.25%/11.25%
11.25%/11.25%
Edificaciones Calpe S.A.
Caja de Madrid
Donizzeti Offices, B.V.
Edificios de Valencia, S.A., Cabilga, S.A., Actura, S.L.,
Maderas Jose María Ferrero Vidal, S.A.
Services
Grupisa Chile
30.77%
Inversiones los Toldos
(18) NEGATIVE CONSOLIDATION DIFFERENCES
This caption includes mainly the negative consolidation differences arising from the purchase of the toll road
Ruta – 5 Talca Chillán Sociedad Concesionaria, S.A. for €2,053 thousand and from the purchase of companies
by Budimex, amounting to €6,746 thousand.
122
Annual Report 2002
(19) DEFERRED REVENUES
Consolidated Additions Retirements Reclassification Exchange 12/31/02
12/31/01
Group
Rate
Government grants
8,134
13,455
-344
21,245
Other deferred revenues
37,628
4,445
-2,595
-4,149
35,329
Total
45,762
17,900
-2,939
-4,149
56,574
a) Governments Grants
The additions in 2002 arose in the Construction division (€5,928 thousand) and the Infrastructure division
(€7,508 thousand). In the Construction division the additions relate to grants from the Ministry of the
Environment received by a joint venture in which the aforementioned Group companies participate and which
engages in the construction and operation of a desalination plant in Alicante.The additions in the Infrastructure
division relate to a subsidy granted by the Autonomous Community of Madrid to the concession-holder
Autopista Trados M-45, S.A., in which Cintra, Concesiones de Infraestructuras de Transporte S.A. has a 50%
ownership interest.
These subsidies are recognized in income over the useful life or concession period of the subsidized assets or
in proportion to the depreciation taken on the subsidized assets.
b) Other deferred revenues
Substantially all the balance of the “Other Deferred Revenues” caption relates to the Infrastructures division
(€35,197 thousand).The main items recorded under this caption are:
– In the parking lot line of business, the revenues from the assignment of rights to use parking spaces that will
subsequently revert to the government, and which due to the special conditions of the contracts cannot be
recognized as sales at the time of delivery.
– In the toll road line of business and specifically in relation to 407 ETR International Inc (€21,394 thousand),
this caption includes the interest deferred by this company in connection with deposits securing its debt. In
accordance with the Ministerial Order dated December 10, 1998, enacting the regulations for the adaptation
of the Spanish National Chart of Accounts for toll road concession-holders, this interest is recognized in
income by the same method as that described for financial expenses in Note 4.u.2.1.
123
(20) PROVISIONS FOR CONTINGENCIES AND EXPENSES
The detail of the balance of this caption as of December 31, 2002, is as follows:
Thousands of Euros
Balance at
12/31/01
Reversion funds
Other provisions
TOTAL
Changes in
Consolidated
Group
Additions
20,652
-19
-3,167
46,879
76,059
114
186,694
-19,242
-1,063
242,562
105,472
114
207,346
-19,261
-4,230
289,441
29,413
Retirements
Effect of
Exchange
Rate
Balance at
12/31/02
Reversion funds
The additions to the “Reversion Reserve” account relate to the period provision recorded mainly by the toll
road concession-holders, according to Note 4.u.2.1.
Other provisions
The main addition in the year arose in the Infrastructure division, amounting to €156,828 thousand. This
provision arises from a value adjustment to the investments of the Infrastructure division in Latin America,
especially the toll road concession-holders in Chile.
Also the Construction division recorded an increase in the balance of the provisions for contingencies and
expenses due to provisions recorded for contingencies in relation to various lawsuits and claims identified
individually.
Lastly, in the Real Estate division, an increase was also recorded due to a value adjustment to the investments
in that area of activity in Chile and Portugal.
Finally there was an increase in the Services division arising from provisions recorded due to contingencies in
relation to various lawsuits and claims identified individually.
(21) NET CASH POSITION
To provide an overall analysis of the Group’s indebtedness situation, the following table shows the breakdown
by business division of the cash accounts (short-term investments and cash) and financial liability accounts
(debentures and short- and long-term payables to credit institutions) reflecting the Group’s net cash position.
In this table, the cash position of toll road and airport concession-holders is shown separately from that of the
other Group companies.
124
Annual Report 2002
Payable to
Credit
Institutions
Debentures
Loans Short-Term
Investments
Concession-holders
Long
Term
Short
Term
Long
Term
Short
Term
2,853,580
41,354
Long
Term
Short
Term
234,380
59,012
1,146,835
249,472
549,467
170,786
309,588
99,320
5,296
3,696
302,852
10,695
516,645
1,204
849
1,056
125,000
786,199
-384,560
125,514
1,276,483
129,292
19,712
38,087
1,019
1,030
1,471,441
1,173
Corporate
Infrastructure
Real estate
-15
Services
Telecommunications
Adjustments
Cash
499
Other companies
Construction
Adjusted
Net
Cash
Position
Other
payables
49,397
14,806
47,810
9,485
9,544
10,663
233,468
45,998
2,847
14,792
7,749
4,694
12,268
29
-135,695
-1,317,717
499
783,847
TOTAL GROUP
229,798
2,853,580
41,354
1,456,423
-3,997,849
8,405
-2,670
388,002
-647,276
3,690
124,051
-122,545
10,000
14,504
-12,207
-135,586
-1,318,495
669
5,296
3,696
-3,694,997
348,792
The variations in the net cash position in 2002 were as follows:
Thousands of Euros
Balance at 12/31/01
Balance at 12/31/02
Variation
-4,054,616
-3,997,849
56,767
-286,869
302,852
589,721
-106,632
-384,560
-277,928
Construction
890,408
1,471,441
581,033
Infrastructures
-554,089
-2,670
551,419
Real estate
-437,746
-647,276
-209,530
Services
-107,895
-122,545
-14,650
20,374
-12,207
-32,581
8,711
669
-8,042
-4,341,485
-3,694,997
646,488
Concession-holders
Other companies
Corporate
Telecommunications
Adjustments
TOTAL
The cash position of each business division includes its loans or financial debt maintained with the others in the
Group, which are eliminated in consolidation.
The variations in the net cash position are explained in Note 31, through the cash flow statement.
125
Payable to credit institutions
Thousands of Euros
Balance at 12/31/01
COMPANY
concession-holders
Long Term Short Term
895,568
Balance at 12/31/02
TOTAL
66,677
962,245
1,146,835
TOTAL
Variation
249,472
1,396,307
434,062
Autopista del Sol, C.E..S.A.
341,852
2,703
344,555
462,107
2,119
464,226
119,671
184,041
52,658
236,699
250,000
34,004
284,004
47,305
146,756
5,226
151,982
122,734
3,199
125,933
-26,049
123,921
123,921
123,921
354
4,314
-1,167
Euroscut-Sociedade Concesionaria da
Scut do Algarve, S.A.
5,584
2,677
62,055
5,481
5,481
81
5,665
-5,665
2,677
-2,677
528
3,960
62,583
74,021
150,984
150,984
146,056
1,619
1,619
3,144
3,144
1,525
5,822
5,822
Inversora Autopista Sur, S.L.
Tidefast, Limited
Bristol International Airport, P.L.C.
79,972
5,822
Algarve International, B.V.
74,021
11,438
79,972
79,972
146,056
-4,928
84,813
81
84,894
84,894
Other companies
896,787
191,080
1,087,867
309,588
99,320
408,990
-678,877
Construction
26,895
70,548
97,443
19,712
38,087
57,799
-39,644
Infrastructure
475,597
38,634
514,231
47,810
9,485
57,376
-456,855
Real estate
390,683
66,389
457,072
233,468
45,998
279,467
-177,605
3,612
12,565
16,177
7,749
4,694
8,805
-7,372
2,944
2944
849
1,056
5,543
2,599
257,757
2,050,112
1,456,423
348,792
1,805,297
-244,815
Services
Other companies
Total
1,792,355
The accounts payable to credit institutions by the concession-holders whose registered office is in non-eurozone countries are denominated in the local currency of each of the companies. The impact of the exchange
rate variations is shown in the “Variations” column and includes most notably that relating to Temuco Río Bueno.
“Concession-Holders” includes most notably the increased indebtedness of Autopista del Sol, C.E.S.A. after
entering into a syndicated loan agreement on May 22, 2002 with Chase Manhattan, with a drawable limit of
€150 million. The indebtedness of Inversora Autopista del Sur S.L. also increased as a result of the
commencement in 2002 of construction work on the Radial 4 toll road in Madrid; there was also an increase
at Algarve International B.V. due to construction work on the Scut toll road in the Algarve. At Autopista TerrasaManresa, S.A. the increased indebtedness to credit institutions resulted from the redemption in August 2002 of
the debenture issue carried out on August 2, 1994, amounting to €42,072 thousand. At 407 ETR International
Inc., the accounts payable to credit institutions at short term as of December 2002 related to the junior bond
issue maturing in 2003 (Series 01 c2).
126
Annual Report 2002
The indebtedness of the other companies to credit institutions decreased by €678,877 thousand, basically due
to the influx of funds when Macquarie Infraestructure Group acquired a holding in Cintra, Concesiones de
Infraestructuras de Transportes S.A. (see Note 1-b.)
Interest rate on accounts payable to credit institutions
With respect to concession-holders’ accounts payable, the following table shows the companies’ credit limits or
loans, and the interest rate on debt:
Concession Holder
Credit/Loan
Volume
Maturity
Toll road
Autopista del Sol, C.E.S.A (1)
Cost of Payables to
Credit Institutions
Fixed
Variable
360,000
150,000
2007
2007
Euribor+0.5%
Euribor+0.85%
90,000
160,000
24,000
2008
2006
2003
Euribor + 0.7%
Euribor + 0.5%
Euribor + 0.5%
Autopista Trados 45, S.A.
94,600
51,900
2008
2021
Euribor + 0.9%
Euribor + 1.1%
Inversora Autopista del Sur, S. L.
80,000
2003
Euribor + 1.175%
6,653
2006
Tab+1.4% (2)
Autopista Terrasa-Manresa, S.A (1)
128,642
Tab+1.75% (2)
Algarve Internacional B.V.
130,000
2025
Euroscut-Norte Litoral, S.A.
310,800
2026
340,462
2006
6%
Euribor + 1.35 %
Airports
Tidefast, Limited
Total
7.35%
1,927,238
(1) As of December 31, 2002, these companies had interest rate hedges
(2) Reference interest rate in Chilean market.
As of December 31, 2002, Autopista Terrasa-Manresa, S.A. had interest rate swap contracts to hedge the
interest rate risk on its debt. The volume of debt hedged was 79.25% of the total through various contracts
which assured a fixed interest rate payable by the concession-holder. The fixed interest rates payable by the
company vary from 3.928% to 5.33% depending on the contract and amount covered.
As of December 31, 2002, Autopista del Sol, C.E.S.A. had hedge contracts to limit the risk from interest-rate
variations.The hedge contracts entered into were interest rate swaps which covered Autopista del Sol, C.E.S.A.’s
total debt as follows: 5.9% at a fixed interest rate, of 5.265%, and of 5.9% at a fixed interest rate of 3.875%.
The credit limit and interest rate indicated in the foregoing table for Inversora Autopista del Sur, S.L. are those
in force as of December 31, 2002. Subsequently, in January 2003, this debt was replaced by a syndicated loan
127
for a maximum of €556.6 million, repayable at one time in January 2009, at a fixed interest rate of 5.13% for
€456.6 million, and a fixed interest rate of 5.48% for €100 million.
With respect to the other companies which are not toll road or airport concession-holders, as mentioned in
Note 5 the Ferrovial Group’s present policy on interest rate risk is to maintain exposure at a variable rate. As
of December 31, 2002, the only interest rate hedge at the Ferrovial Group subsidiaries was a fixed-rate hedge
for a loan of €18,655 thousand at Boremer, which is proportionally consolidated (50%). Approximately 80% of
the loan is hedged.
With respect to the other companies’ accounts payable to credit institutions, the limits and the amounts drawn
down of credit facilities and mortgage loans as of December 31, 2002, is as follows:
Thousands of Euros
Limit
Drawn Down
Undrawn
Maturing at short term
502,564
99,220
403,344
Maturing at long term
180,141
60,710
120,131
TOTAL
683,405
159,930
523,475
Mortgage loans
388,006
248,878
248,878
1,071,411
408,808
772,353
Credit facilities
TOTAL
Debentures
The following table shows the variation with respect to December 2001 in financial debt due to the issuance
of debentures:
Thousands of Euros
Balance at 12/31/01
COMPANY
concession-holders
3,453,009
193,378
Balance at 12/31/02
TOTAL
90,563
3,543,572
42,672
42,672
2,853,580
14,370
207,748
159,419
2,678,489
2,167,631
41,354
TOTAL
Variation
2,894,934
-648,638
-42,672
11,860
171,279
-36,469
2,167,631
-510,858
2,678,489
Algarve Internacional, B.V.
126,500
126,500
126,500
454,642
33,521
488,163
400,030
29,494
429,524
-58,639
3,453,009
90,563
3,543,572
2,853,580
41,354
2,894,934
-648,638
126,500
Other companies
Total
128
Annual Report 2002
The evolution of the euro-Canadian dollar and euro-chilean peso exchange rates in 2002 (see note 6) led to
a significant decrease in the balance of the “Debentures and Other Marketable Debt Securities Issued by Toll
Road and Airport Concession Holders” caption, basically at ETR 407 and the Chilean concession-holders (see
Note 31 on cash flows of concession-holders).
The main increase was at Algarve International BV, where the debenture issues finance the investment in the
toll road managed by Euroscut del Algarve.
At Autopista Terrasa-Manresa S.A., as mentioned earlier, the debenture issue which had been outstanding in
December 2001 was redeemed at maturity in August 2002 and, accordingly, as of December 31, 2002 there
were no unmatured debentures.
The detail of the amount of each issue, of the related interest rates (which in all cases were fixed rates) and of
the maturity dates is as follows.
Thousands of Euros
Company
Amount
Interest Rate
Maturity
Series 99 A1
241,404
6.05 %
2009
Series 99 A2
240,791
6.47 %
2029
Series 99 A3
163,282
6.75 %
Series 99 A4
99,529
5.33 %
(1)
2016
Series 99 A5
98,682
5.33 %
(1)
2021
Series 99 A6
97,919
5.33 %
(1)
2026
(1)
2039
Series 99 A7
97,232
5.33 %
Series 99 A8
241,356
6.55 %
2031
Series 00 A2
187,419
5.29 %
Series 00 A3
262,140
6.90 %
2007
Senior Bonds
1,729,754
Series 00 B1
99,579
7.00%
2010
2006
(1)
2039
Junior Bonds
99,579
Series 00 C1
181,500
9.00 %
2007
Series 01 C1
132,884
6.40 %
2004
Series 01 C2
123,921
4.50 %
2003
Subordinated
438,305
Maturing
at short term
-123,921
Bond
discount interest
+23,914
Subtotal 407 ETR
2,167,631
Autopista Santiago Talca, S.A.
429,524
7.37%
2022
171,279
7.37%
2020
126,500
6.4%
2027
Algarve Internacional, B.V.
126,500
Total
2,894,934
(1) Interest rate to which must be added the annual inflation rate in Canada.
129
At 407 ETR International Inc. the amount of the debentures maturing in 2003 was reclassified to the “Current
Liabilities – Payable to Credit Institutions” caption. Additionally, the balance of “Debenture Issues” includes the
financial expenses which accrue over the term of the debentures issued at a discount, the balancing entry for
which is recorded under the “Deferred Charges” caption (see Note 11).
The Santiago Talca concessions bond issues were in USD. In this issuance of bonds, the following exchange rate
hedge mechanism was arranged: appreciation of the USD with respect to the CLF of over 10% is covered by
the Ministry of Public Works of the Republic of Chile, whereas depreciation by over 10% is covered by the
concession-holder.
(22) OTHER CURRENT LIABILITIES
The detail of the other nonfinancial current liabilities is as follows:
Thousands of Euros
Balance at 12/31/01
Payable to associated companies
Other nontrade payables
Accrual accounts
Total
Balance at 12/31/02
Variation
30,434
33,232
2,798
2,451,119
2,584,991
133,872
558,614
612,212
53,598
71,753
39,132
-32,621
3,111,920
3,269,567
157,647
The “Other Nontrade Payables” account includes “Taxes Payable”, with a balance of €337,492 thousand as of
December 2002.
The detail of the “Trade Accounts Payable” by business is as follows:
Thousands of Euros
Balance at 12/31/01
Balance at 12/31/02
Variation
2,451,119
2,584,991
133,872
Construction
1,832,338
2,097,232
264,894
Infrastructure
109,528
99,513
-10,015
Real estate
440,793
232,183
-208,610
Services
50,861
80,421
29,560
Other
17,599
75,642
58,043
In the Real Estate division the decrease in the balance of “Trade Accounts Payable” was due mainly to the
payment of short-term debts existing as of December 2001 for purchases of land made in prior years with
deferred payment.
130
Annual Report 2002
(23) TAX MATTERS
As indicated earlier in Note 4-q, the Parent Company, together with certain companies which meet the
requirements contained in tax legislation, are taxed under the consolidated taxation system.
The reconciliation of the consolidated income for the year per books to the taxable income for corporate
income tax purposes is as follows:
Thousands of Euros
Increase
Decrease
Total
Consolidated income for the year per books before taxes
684,265
Permanent differences:
At individual companies
300,885
Due to consolidation adjustments
-173,967
126,918
-106,364
-106,364
Timing differences:
At individual companies:
Arising in the year
62,712
-375,798
-313,086
Arising in prior years
52,924
-86,615
-33,691
Prior years’ tax loss carryforwards
-1,668
Taxable income
356,375
The Group recorded under the “Corporate Income Tax” caption the tax withholdings abroad and the
adjustment of the corporate income tax expense for 2001. The net effect of these two items was €32,400
thousand.
The Ferrovial Group companies indicated in EXHIBIT IV are taxed under the consolidated taxation system.
The main permanent differences are due basically to nondeductible expenses, to tax-free gains arising on the
sale of equity investments abroad, to use of the reinvestment tax credit arising in the transaction with Macquarie
Infraestructure Group and to consolidation adjustments.
Most of the timing differences arose as a result of the difference between the accounting and tax methods used
in allocating the income of joint ventures and in recording certain provisions.
Certain companies in the consolidated tax group have tax losses available for carryforward amounting to
€31,709 thousand, of which €2,005 thousand were recognized as a tax asset in prior years.The detail of these
tax losses is as follows:
131
Year in Which Loss Arose
Thousands of Euros
1992
9
1993
94
1994
212
1995
44
1996
368
1997
474
1998
11,602
1999
12,352
2000
3,296
2001
3,258
Total
31,709
Additionally, the Group has unused investment and other tax credits amounting to €73,193 thousand.
The criteria that the tax inspection authorities might adopt in connection with the years open for review might
give rise to contingent tax liabilities which are not susceptible to objective quantification. However, the Parent
Company's directors consider that the liabilities arising in this connection will not be material.
The corporate income tax expense is calculated at the rates in force in each country: Spain 35%, Portugal 33%,
Colombia 35%, Uruguay 30%, Canada 38.62% and Chile 16%.
The companies included in the consolidated tax group have the years 1998, 1999, 2000, 2001 and 2002 open
for review for corporate income tax; 1999, 2000, 2001 and 2002 for VAT and personal income tax withholdings;
and the last four years for all other taxes.
The corporate income tax expense recorded by the Ferrovial Group in 2002 amounted to €207,263.8
thousand, which represents a tax rate of 30.29%.The tax rate in prior years amounted to 32.11% in 2001 and
24.02% in 2000.
The tax rate for 2002 is lower than the Spanish standard corporate income tax rate (35%), mainly due to the
fact that the Group has recorded an anticipated expense for the tax relating to the extraordinary income which
arose as a result of the acquisition by Macquarie Infraestructure Group of an ownership interest in the capital
stock of Cintra, Concesiones de Infraestructuras y Transporte, S.A. (see Notes 1-b and 28), taking into account
the application of a tax credit for reinvestment equal to 17% of the gain obtained. As a balancing entry for this
expense, a long-term liability was recorded as a deferred tax liability for the same amount under the “Other
Long-Term Debt” caption. The effective claimability of this liability depends upon whether the gain at
consolidated level arises in the future through a sale or other type of transaction leading to the taxable event.
This effect was reduced partially by the recording of provisions relating to concession-holders in Chile (see
132
Annual Report 2002
Note 20), which are not a tax deductible expense since they relate to contingencies which have not arisen to
date.
The resulting tax rate in the year is not comparable with the resulting rate in prior years due to the
circumstantial nature of the transactions described in the previous paragraph and the important effect which
the offset of the historical tax credits at Agromán, S.A. had on the rate in prior years, which had no impact on
2002.
In 2002 the tax rate in Canada was reduced from 44.62% to 38.62%.The impact of this reduction was recorded
in the “Corporate Income Tax” caption of the 2002 consolidated statement of income.
(24) CONTINGENT LIABILITIES
The companies' contingent liabilities include those normally encountered at construction companies for the
performance and completion of construction contracts entered into by the companies themselves or by the
joint ventures in which they participate. Also, the companies are the defendants in certain legal proceedings.
The directors consider that the possible effect of these matters on the accompanying consolidated financial
statements would in no case be material.
As of December 31, 2002, the companies had provided guarantees totaling €2,663,027 thousand, most of
which related to guarantees required for the award of construction contracts.
(25) NET SALES
The breakdown, by business division, of net sales in 2002 and the variations therein with respect to the previous
year are as follows:
Thousands of Euros
Construction
Spain
Civil engineering
2001
2002
Variation %
3,431,748
3,788,898
10.41%
2,180,181
2,667,335
22.34%
1,153,566
1,417,955
22.92%
11.48%
Residential building construction
558,457
622,556
Nonresidential building construction
468,158
626,824
33.89%
Abroad
479,567
416,235
-13.21%
Budimex Group
686,754
618,784
-9.90%
Industrial
87,115
89,683
2.95%
Intradivision adjustment
-1,869
-3,139
67.95%
Infrastructure
345,831
449,995
30.12%
Real Estate
375,179
619,679
65.17%
Services
215,529
340,057
57.78%
45,284
37,957
-16.18%
-173,563
-196,362
13.14%
4,240,008
5,040,224
18.87%
Other
Elimination of intercompany transactions
Total
133
In 2002 there was an increase in net sales in all the business divisions, arising most notably from the increases
in Real Estate, due to higher deliveries of housing units, and in Infrastructure, due to higher revenues mainly at
ETR 407 International Inc. and Autopista del Sol, C.E.S.A.The growth in the Group’s billings in 2002 is discussed
in greater detail in the Management Report.
The detail of billings by division and by the main countries in which the Ferrovial Group carries on its activities
is as follows:
Construction
SPAIN
POLAND
CHILE
PORTUGAL
OTHER
TOTAL
2,742,010
618,784
134,535
CANADA
3,773
186,453
103,343
3,788,898
30,779
449,995
Infrastructures
149,977
-
55,191
208,580
5,468
Real estate
533,948
-
18,253
-
67,478
-
1
-
5,984
Services
619,679
334,072
-
-
340,057
Other
-158,405
-
-
-
-
-
-158,405
Total
3,601,602
618,784
207,980
212,353
265,383
134,122
5,040,224
The billings recorded in each of the countries relate basically to transactions carried out in local currency. Of
the total billings, approximately 77% relate to billings in euros.
Backlog
As of December 31, 2002, the total Group’s construction backlog amounted to approximately €5,921,800
thousand.
The detail of the construction backlog and of the variations therein with respect to 2001 is as follows:
Thousands of Euros
LINE OF BUSINESS
2002
Variation %
4,007,200
3,370,800
636,400
18.88%
Civil engineering
2,426,900
1,946,500
480,400
24.68 %
788,500
677,200
111,300
16.44 %
Nonresidential building construction 791,800
747,100
44,700
5.98 %
772,400
1,020,200
-247,800
-24.29 %
719,200
923,300
-204,100
-22.11 %
27,900
40,500
-12,600
-31.11 %
Nonresidential building construction
25,300
56,400
-31,100
-55.14 %
Construction Abroad
Civil engineering
Industrial Construction
627,000
462,600
164,400
35.54 %
Construction
161,100
153,800
7,300
4.75 %
Maintenance
465,900
308,800
157,100
50.87 %
515,200
745,000
-229,800
-30.85 %
5,921,800
5,598,600
323,200
5.77 %
Budimex
Total
Annual Report 2002
Variation
Construction Spain
134
2001
(26) OPERATING INCOME
The variations in 2002 in “Operating Income” and “Operating Margin”, by business division, were as follows (in
thousands of euros):
2001
Income
2002
Margin
Income
Margin
Variation %
Construction
122,488
3.6%
155,239
4.10%
26.74%
Infrastructure
176,635
51.1%
210,657
46.81%
19.26%
Real Estate
87,997
23.5%
103,786
16.75%
20.08%
Services
11,843
5.5%
18,420
5.42%
67.76%
9.62%
24.70%
Other and adjustments
-10,041
Total Operating Income
388,922
-3,119
9.2%
484,983
In the Infrastructure division in 2002, unlike in 2001, the capitalization of the financial expenses on the toll roads
in the construction phase was not recorded in the consolidated statement of income and, accordingly, neither
the financial expense nor its capitalization is reflected as “Capitalized Expenses of In-House Work on Fixed
Assets”.This means that the operating margin of Infrastructure in 2002 is lower than in 2001. If this impact had
been adjusted in 2001 the operating margin of Infrastructure would have been 46.6%.
The variations in “Operating Income” and “Operating Margin” by business are discussed in detail in the
accompanying Management Report.
Of the total “External Consumables” and “Other Operating Expenses” balances, 78% relate to transactions
carried out in euros, 15% to Poland, 4% to Chile and 1% to Canada.
(27) FINANCIAL RESULT
The following table shows the detail of financial result, distinguishing between that relating to toll road and
airport concession-holders and that relating to other companies:
Thousands of Euros
2001
2002
Financial result of toll road and airport concession-holders
-26,704
-34,608
-29.60%
Financial result of other divisions
-38,832
9,861
+125.39%
Construction
32,206
44,988
39.69%
Infrastructure
-28,996
-10,926
+62.3%
Real Estate
-20,090
-23,828
-18.61%
-3,543
-4,158
-17.36%
Other
-18,409
3,785
+84.94%
Total
-65,536
-24,747
+62.24%
Services
Variation %
135
With respect to the financial result of the other companies, the improvement in financial result is due mainly to
lower financial indebtedness as a result of the funds obtained following the acquisition by Macquarie
Infraestructure Group of an ownership interest in the capital stock of Cintra, Concesiones de Infraestructuras
de Transportes, S.A.
With respect to the financial result from toll roads, the following table shows the detail by concession-holder
and airport.The table indicates which part of financial result is capitalized as an addition to tangible fixed assets
in the toll roads in the construction phase and which part is capitalized in the toll roads in operation pursuant
to the Ministerial Order dated December 10, 1998 (see Notes 4.u.2.1 and 11).
Financial
Expenses and
Revenues
Capitalized After
Construction in
Deferred Expenses
Financial
Expenses and
Financial
Accrued
Revenues
Expenses and Financial
Capitalized
Revenues in Expenses and
during the
Statement of Revenues
Construction
Income
Period in Fixed
Assets
Financial income of toll road and airport concession holders
Autopista del Sol, S.A.
143,862
18,046
1,399
-1,101
-144,963
-2,172
-21,617
9,204
-4,050
-13,254
1,368
-904
-2,272
2,224
292
-1,932
100
-3,521
-9,494
Autopista R-4 Madrid Sur, C.E.S.A.
5,873
10,526
807
-4,295
-15,628
10,269
13,424
-7,353
-31,046
1,556
0
-1,556
Euroscut-Soc. Conces. Da Escut do Algarve, S.A.
5,682
0
-5,682
Aeropuerto de Cerro Moreno Soc Concesionaria, S.A.
Tidefast, Ltd.
Other
Total
199,148
25,192
-419
-419
-11,046
-11,046
-38
-38
-34,607
-258,947
(28) EXTRAORDINARY INCOME
The main component of extraordinary income was that generated as a result of the acquisition by Macquarie
Infraestructure Group of an ownership interest in the capital stock of Cintra, Concesiones de Infraestructuras
de Transportes, S.A.The extraordinary income generated in this connection amounted to €387,493 thousand.
On the negative side, there was an extraordinary expense due to a provision of €156.828 thousand recorded
136
Annual Report 2002
as a result of a value adjustment to the investments of the Infrastructure division in Latin America, especially at
the toll road concession-holders in Chile (see Note 20).
Other extraordinary income recorded in 2002 arose from the disposal of treasury stock amounting to €16,985
thousand, and the gain of €11,245 thousand generated by the sale of the holding in Wanadoo (see Note 10-b).
Extraordinary losses included most notably the portfolio provisions of €6,172 thousand in Construction for
various holdings recorded under the division’s “Long-Term Investments–Investment Securities” caption (see
Note 10-b).
(29) INCOME BEFORE TAXES
The detail, by business division, of “Income Before Taxes” and of the variations therein is as follows (in thousands
of euros):
2001
2002
Variation %
Income
Margin
Income
Margin
Construction
147,183
4.29%
177,529
4.69%
20.62%
Infrastructure
117,485
33.97%
385,294
85.62%
227.95%
73,281
19.53%
77,172
12.45%
5.31%
Services
6,352
2.95%
7,983
2.35%
25.68%
4,356
13.58%
96.26%
Real Estate
Total
36,287
348,657
8,22%
684,265
(30) NET INCOME
The detail, by business division, of “Net Income” and of the variations therein is as follows:
2001
Construction
2002
Variation %
Income
Margin
Income
Margin
95,315
2.78%
120,524
3.18%
26.45%
Infrastructure
45,518
13.16%
256,693
57.04%
463.94%
Real Estate
48,683
12.98%
55,189
8.91%
13.36%
4,590
2.13%
4,194
1.23%
-8.63%
9.04%
108.84%
Services
Total net income
24,157
218,263
19,219
5.15%
455,819
The balance of the “Other and Adjustments” account includes the extraordinary income from the disposal of
treasury stock and the income generated by the sale of the holding in Wanadoo (see Note 28).
Income per share in 2002 was €3.25, in comparison with €1.56 per share in 2001.
137
(31) CASH FLOW
In order to adapt to the requirements of IFRS 7, these notes to the consolidated financial statements of the
Ferrovial Group include a statement of cash flows.
The first table of this statement of cash flows presents the changes in the net cash position, excluding that of
the toll road and airport concession-holders. This statement of cash flows classifies as operating flow the
dividends and refund of shareholders’ equity made by these concession-holders, and as investment flow the
disbursements made at these concession-holders in capital increases or acquisitions of additional ownership
interests therein. Another table presents the changes in the net cash position of the toll road and airport
concession-holders.
Thousands of Euros
STATEMENT OF CASH FLOWS
Net income
Adjustments to income
Minority interests
Corporate income tax
Amortization of goodwill
Depreciation and amortization expense
Allowances
Capitalized expenses of in-house work on fixed assets
Inventory variation
Income/loss at equity-method companies (*)
Other income which is not operating flow
Income/loss from financing
Variation in working capital
Variation in accounts receivable
Inventory variations
Variation in accounts payable
Variation in allowances/deferred revenues
Variations in tax accounts
Collection of dividends from concession-holders
Operating cash flow
Intangible asset investments
Tangible fixed asset investments
Long-term investments
Acquisition by MIG of ownership interest in Cintra, S.A
Investment cash flow
Dividend payment
Other variations in shareholders’ equity
Own financing cash flow
Net debt included
Variation in net cash position
Beginning cash position
Ending cash position
Ferrovial Group
12/31/2002
Ferrovial Group
12/31/2001
455.819
-240.530
-10.474
201.828
23.962
52.059
58.653
-14.062
-154.426
-141.245
-252.731
-4.094
-13.116
-66.847
-39.596
227.352
21.555
-155.580
90.014
292.187
-13.844
-62.167
-415.935
816.000
324.054
-58.834
29.200
-29.634
4.094
-980
589.721
-286.869
302.852
218.263
-131.532
-5.983
92.241
17.000
61.763
50.357
-16.400
-229.906
-99.489
-35.713
34.598
308.392
-183.396
23.891
526.537
-20.725
-37.915
6.578
401.701
-315
-46.854
-101.435
-149.204
-45.145
-900
-46.045
-34.598
-41.670
130.184
-417.053
-286,869
(*) Apart from income accounted for by the equity method in the statement of income, the equity-method income of all
concession-holders is also included at Ferrovial’s percentage of ownership interest therein.
138
Annual Report 2002
In 2002 the main impact on the variation of the net cash position of the Other Group Companies (excluding
that of toll road and airport concession-holders) arose from the inflow of funds due to the acquisition by
Macquarie Infraestructure Group of an ownership interest in Cintra, Concesiones de Infraestructuras de
Transporte S.A. The funds obtained through this transaction amounted to €816,000 thousand, which in the
previous table are reflected in the investment flow.
In addition to the funds obtained from this transaction, in 2002 there was an operating cash flow of €292,187
thousand, which included payments for the acquisition of new land amounting to €384,200 thousand.
Despite the high investment flow in fixed assets (especially in long-term investments in the Infrastructures
division), these two positive impacts on the net cash position enabled a final net cash position which as of
December 2002 amounted to +€302,852 thousand (€589,721 thousand higher than that of December 2001).
Operating cash flow
The variations in the operating flow, by business area in 2002 in comparison with 2001 were as follows:
Thousands of Euros
Construction
Infrastructure
2001 Operating Flow
2001 Operating Flow
Variation
428,400
355,309
-73,091
87,100
121,405
+34,305
-99,102
-184,803
-85,701
Services
5,278
-45
-5,323
Other
7,725
321
-7,404
429,401
292,187
-137,214
Real Estate
Total flow
In the Construction division the operating flow in 2002 was lower than in 2001, basically due to a lower
operating flow in the foreign business, which in 2001 was boosted by the very positive impact on the operating
flow in Chile due to collections arising from the construction of the Santiago-Talca toll road.
The operating flow of the Infrastructure division included €90,014 thousand from dividends and the refund
of shareholders’ equity of the toll road and airport concession-holders. The most significant items in this
connection were €43,998 thousand for the refund of shareholders’ equity and dividends from Europistas,
€25,292 thousand from 407 ETR International Inc, €5,251 thousand from Ausol, €4,739 thousand from
Australia (Sydney airport) and €3,280 thousand from Autema.
The Real Estate division records as operating flow the investment in inventories (land and construction). In
2002 the pace of investment was maintained in this division. The total land acquisition payments in the year
included in the operating flow of the Real Estate division amounted to €384,200 thousand. Had these payments
been excluded, the operating flow would have been €199,397 thousand.
139
In Services, the worse operating flow than in 2001 is due mainly to the impact on working capital of the new
companies included.
Apart from the funds obtained as a result of the acquisition by Macquarie Infraestructure Group of an
ownership interest in the capital stock of Cintra, Concesiones de Infraestructuras de Transportes S.A., the most
notable investment flow in 2002 was that in long-term investments, mainly in the Infrastructure division
(-€421,216 thousand).
The most significant disbursements made by the Infrastructure division were the acquisition of a 19.6%
ownership interest in the company which manages Sydney airport (€233,781 thousand) and the acquisition of
an additional 5.81% in 407 ETR International Inc (€127,391 thousand).
Most notable in the Telecommunications division was the capital increase carried out in 2002 at the Ono Group
for €32,642 thousand.
The investment in tangible fixed assets mainly included the investment in machinery by the Construction
division and the investment made in the parking lot line of business in off-street and on-street car parks.
Own financing flow
The dividend paid by Grupo Ferrovial, S.A. in 2002 amounted to €58,834 thousand.
The amount of the capital increase carried out at Cintra Concesiones de Infraestructuras de Transportes, S.A.
subscribed by Macquarie Infraestrure Group (+€52,000 thousand) in order to finance the acquisition of an
additional 5.81% of 407 ETR International Inc. was recorded as an inflow of capital in the own financing flow
(see Note 17).
The exchange rate fluctuations in 2002 had a negative impact of –€22,800 thousand on the net cash position
of the Group companies.
Cash flow of toll road and airport concession-holders
The following table shows the cash flow in 2002 of the toll road and airport concession-holders fully
consolidated in the Group’s balance sheet, distinguishing the main impacts explaining the variations in 2002:
140
Annual Report 2002
Thousands of Euros
STATEMENT OF CASH FLOW OF
CONCESSION-HOLDERS
12/31/2002
Operating cash flow
217,229
-570,756
53,349
-517,407
Impact of exchange rate on net cash position
536,069
Dividend payment
-49,068
Capital increases/disbursements pending
73,683
560,684
Loss from financing
-203,738
56,767
Beginning net cash position
-4,054,616
Ending net cash position
-3,997,849
The operating cash flow of the toll road and airport concession-holders includes the inflow of funds from those
in operation. The operating flow does not include the payment of interest for the financial debt of these
companies.The following table shows how the operating flow of the toll road and airport concession-holders
is obtained from the statement of income:
Thousands of Euros
OPERATING CASH FLOW OF
CONCESSION-HOLDERS
12/31/2002
Operating income of concession-holders
Depreciation and amortization/Provisions
198,352
44,894
-24,048
Operating flow
217,239
The investment flow in tangible fixed assets includes the increase in tangible fixed assets (see Note 9), most
of which arose from the concession-holders which were at the construction phase in 2001.
The divestment flow in long-term investments relates mainly to the drawdown of long-term deposits by 407
ETR International Inc.
The own financing flow includes the impact of the exchange rate fluctuations in 2002 on the net cash position
when the financial statements of the concession-holders in non-euro-area countries, basically at 407 ETR
International Inc. and the Chilean concession-holders, were translated to euros.The appreciation of the euro in
2002 against these currencies led to an improvement in the net cash position of these companies on making
141
the translation because they have high indebtedness. In order not to distort the operating flow and the tangible
asset investment flow, this impact is represented in the own financing flow.
Additionally, the own financing flow includes the dividend payments and refund of shareholders’ equity made by
the concession-holders to their shareholders.These are the amounts paid by the concession-holders, regardless
of the Group’s percentage of ownership of the concession-holders. The dividend payments and refund of
shareholders’ equity included in this amount relate to 407 ETR International Inc. (€37,693 thousand), Autopista
del Sol, C.E.S.A. (€7,002 thousand) and Autopista Terrassa Manresa (€4,373 thousand). No dividend payments
or refunds of shareholders’ equity made by companies accounted for by the equity method are included.
The amounts received by the toll road and airport concession-holders as a result of capital increases or capital
calls in 2002 are recorded as an inflow of funds to the own financing flow. As in the case of dividends, these
amounts relate to all the capital of the concession-holders, regardless of the Group’s percentage of ownership
of them.The amounts included relate to Autopista del Sol, C.E.S.A (€6,252 thousand), Euroscut Norte Litoral
(€20,069 thousand), Inversora Autopistas del Sur, S.A. (€37,700 thousand) and Autopista Trados M- 45 S.A.
(€9,662 thousand). As in the previous case, no capital increases carried out by companies accounted for by the
equity method are included.
Finally, the income or loss from financing relates to the interest paid by the concession-holders. It relates to the
financial expense incurred by the concession-holders (-€258,947 thousand, see Note 28), excluding the
financial expense on bonds issued at a discount at 407 ETR International Inc., which are not cash flow for the
year, amounting to €33,195 thousand (see Note 12), and the financial expense at the concession-holder
Santiago Talca for the depreciation of the Chilean peso against the U.S. dollar (the currency in which its debt is
denominated) which does not constitute a flow of interest (€22,014 thousand).
142
Annual Report 2002
(32) PERSONNEL
The variation in the average number of employees, by category, was as follows:
2002
2001
University, junior college and other graduates
2,897
2,689
Variation %
208
Clerical staff
2,333
1,830
503
Manual workers and line personnel without formal qualifications
23,224
19,003
4,221
Total
28,454
23,522
4,932
The variation in the average number of employees, by business division, was as follows:
2002
2001
179
168
11
Construction
14,345
16,665
-2,320
Infrastructure
2,157
1,799
358
Corporate
Real Estate
Variation %
794
440
354
Services
10,979
4,450
6,529
Total
28,454
23,522
4,932
The main decrease in the number of employees with respect to 2001 arose in the Construction division due
to the decrease in Budimex group’s headcount by 1,716 persons. In other countries Ferrovial Agromán reduced
its headcount by 616 persons.
The increase in the Real Estate division was mainly due to the inclusion of the employees of the Eurolimp
Group, which led to an increase of 5,907 persons.
(33) DIRECTORS’ COMPENSATION
In prior years, the Company’s financial statements included an explanation of the directors’ compensation in
terms of the effective payments in the year to which the financial statements referred.
With respect to 2002, in order to improve the transparency and relevance of this information, it was decided
to establish a system based on the following principles:
-
The information relating to directors’ compensation in 2002 is presented on the accrual basis of accounting
and, accordingly, includes the emoluments for the duties performed from January 1 through December 31,
2002, although a portion thereof will be settled and paid in 2003.
-
A breakdown is given of the various items comprising the individual compensation of each member of the
Board in his capacity as director.
143
-
Aggregate information is presented on the compensation of the persons comprising the Group’s senior
management team.
-
The executive directors’ compensation other than that received in their capacity as directors is included
together with that of the members of senior management, with a detail of the various items which comprise
it, the number of beneficiaries and the positions which they hold.
Accordingly, the compensation earned by the Board of Directors in 2002 can be summarized as follows:
-
The directors together earned directors’ fees of €1,186 thousand, made up as follows:
- Other items which include the compensation established for the First Vice-Chairman of the Board of
Directors and for the Chairmen of the Advisory Committees, amounting to €148 thousand.
- Attendance fees for meetings of the Board of Directors and of the Executive and Advisory Committees
(€557.9 thousand).
- Variable compensation based on earnings for the year (€217.1 thousand).
- Variable compensation based on share price (€263.5 thousand).
- The detail of the individual amounts for each of the members is as follows:
Attendance Fees for
Variable
Meetings of the Board of Compensation
Directors, and Executive
Based on
and Advisory Committees
Earnings
Variable
Compensation
Based on
Share Price
Other
Items
Total
52,921.77
19,736.43
23,960.00
Santiago Bergareche Busquet
60,421.77
19,736.43
23,960.00
96,618.20
Jaime Carvajal Urquijo
63,426.83
19,736.43
23,960.00
107,123.26
137,500.00
241,618.20
41,803.04
16,447.02
19,966.66
78,216.72
Fernando del Pino y Calvo-Sotelo
50,924.30
19,736.43
23,960.00
94,620.73
Profesa Investments BV
41,921.77
19,736.43
23,960.00
85,618.20
Portman Baela SL
39,419.24
19,736.43
23,960.00
83,115.67
44,924.30
19,736.43
23,960.00
4,000.00
92,620.73
48,419.24
19,736.43
23,960.00
3,000.00
95,115.67
Gabriele Burgios
21,000.00
11,512.91
13,976.66
46,489.57
52,921.77
19,736.43
23,960.00
96,618.20
Manuel Azpilicueta
22,426.83
6,578.81
7,986.66
2,000.00
17,429.36
4,934.10
5,990.00
1,500.00
29,853.46
557,960.22
217,100.71
263,559.98
148,000.00
1,186,620.91
2
Juan Arena de la Mora
3
Santiago Eguidazu Mayor
6
Javier Vega de Seoane
TOTAL
7
4
38,992.30
Had they been expressed in terms of effective payments, the directors’ fees in 2002 would have amounted to €1,123.89 thousand.
Duration of membership of the Board in 2002: 10 months.
3
Chairman of the Appointments and Compensation Committee.
4
Chairman of the Audit and Control Committee.
5
Duration of membership of the Board in 2002: 7 months.
6
Chairman of the Appointments and Compensation Committee until his resignation. Duration of membership of the Board in 2002: 4
months.
7
Chairman of the Audit and Control Committee until his resignation. Duration of membership of the Board in 2002: 3 months.
1
2
144
Annual Report 2002
-
The executive and outside directors of Grupo Ferrovial, S.A., who in turn are members of the management
bodies of other Group, multigroup or associated companies received total compensation of €187 thousand.
COMPENSATION OF MEMBERS OF THE BOARD OF DIRECTORS WITH EXECUTIVE FUNCTIONS8
INCLUDING THE COMPENSATION OF THE COMPANY’S SENIOR MANAGEMENT TEAM
-
In 2002 the Chairman of the Board of Directors, the Managing Director, the Director-Secretary and the nine
senior executives of the company with direct responsibility to the Chairman or Managing Director earned
total compensation for the items listed as follows:
Thousands of Euros
Cash compensation
Compensation in kind
Incentives for achievement of objectives
3,015
98
2,922
Compensation as members of
the governing bodies of other Group,
multigroup or associated companies
(excluding executive directors)
157
Indemnities and other compensation
276
Total
6,468
Compensation based on share price:
Also, a compensation system based on the Company’s share price is in place for the Company’s senior
management, including the members of the Board of Directors with executive functions, which as of the date
of this report had resulted in the total allocation to the executive directors of the rights on 624,204 shares and
to the other members of senior management of the rights on 797,292 shares.
This system was established in execution of the resolutions adopted in the Shareholders’ Meetings of March
31, 2000, and March 30, 2001.The Spanish National Securities Market Commission has been duly informed of
the approval of the system and of the rights assigned to each beneficiary.
The maximum number of shares for the purposes of calculating the compensation of all the executives
authorized by the Shareholders’ Meeting is 1,702,647, equal to 1.213% of the capital stock.
This system involves the granting of the right to receive the amount of the appreciation of the Company’s
shares in the stock market between the date the right was granted and the date on which it is exercised.Three
years must elapse from the date the right was granted before it can be exercised and it must be exercised
8
Termination of former Managing Director in January 2002 and appointment of new Managing Director in March 2002.
145
within six years.This right and the specific amount to be received will depend upon the obtainment of certain
minimum rates of consolidated return on equity.
To date no amounts have been paid under this system.
The compensation disclosed herein relates to the persons holding the following positions:
(*)
146
Annual Report 2002
-
Chairman of the Board of Directors
-
Managing Director (*)
-
Director-Secretary and Company Secretary
-
General Manager, Finance
-
General Manager, Human Resources
-
General Manager, Construction (*)
-
General Manager, Infrastructure
-
General Manager, Real Estate (*)
-
General Manager, Services
-
Manager of External Relations and Communication
-
General Manager,Telecommunications
-
Audit Manager
Certain holders of these positions were replaced in 2002
(34) COMPENSATION SYSTEM BASED ON SHARE PRICE
As indicated in Note 33 “Directors’ Compensation”, the Ferrovial Group has a compensation system linked to
share price performance for the members of the Board of Directors who carry out executive functions and
for the executives who form part of the Company’s Management Committee. This system was approved by
the Shareholders’ Meeting on March 31, 2000.
This system involves the granting of the right to receive the amount of the appreciation of the Company’s
shares in the stock market between the date the right was granted and the date on which it is exercised.Three
years must elapse from the date the right was granted before it can be exercised and it can be exercised within
six years.
Entitlement to these rights is conditional on continued employment at the company until the rights are
exercised, except in exceptional situations, and on the fulfillment of certain objectives in relation to the return
on average consolidated equity (ROE) for the years ended subsequent to the commencement date.To receive
all the compensation, ROE must be at least 15%. If ROE is between 10% and 15% the compensation received
will be proportional; however, if the average ROE in the three years is lower than 10%, no compensation will
be received.
This compensation system was finally assigned in June 2000. The executives participating in the system were
granted an amount equal to the appreciation of 1,402,647 shares, using as the reference price for the calculation
of the appreciation the market price on that date i.e. €13.85 per share.The term for execution of these rights
commences in June 2003.
The Shareholders’ Meeting on March 30, 2001 resolved to extend the aforementioned compensation system
to executives who, although they perform senior management functions with direct responsibility to the Board
or its delegated bodies, do not form part of the Company’s Management Committee. As a result, the number
of reference shares was increased to 1,702,647.
It was also resolved to set up a second compensation system the beneficiaries of which are a total of ninetyfour executives of the Group of companies headed by Grupo Ferrovial, S.A., with the same regulations and
operating mechanism as the system approved in 2000.
The second system was finally established in May 2001, and, accordingly, the period during which the rights
relating thereto can be exercised will commence in May 2004. A total of 1,401,000 shares was set for the
purposes of calculating the total compensation for the executives who are beneficiaries of the system, and the
reference share price set for the purposes of calculating the appreciation was €17.6015 per share.
In order to cover the possible loss to which the exercise of the rights under the two aforementioned
compensation systems could give rise, at the time of the establishment of the compensation plans (June 2000
and May 2001) the Ferrovial Group entered into two equity swap contracts with two financial institutions.
Through these contracts the Ferrovial Group is assured, on the date on which the compensation must be
147
settled, that it will receive an amount equal to the appreciation of the shares, from the date the compensation
is settled and, accordingly, the payment of this compensation will not have a significant impact on the Company’s
The main features of these contracts are as follows:
They are based on an equity swap contract through which the institution undertakes to pay the Ferrovial Group
amounts equal to the return on Ferrovial Group shares and the Ferrovial Group undertakes to pay the
institution amounts equal to the return on the theoretical financing used by the institution to acquire these
shares, such that:
– The number of shares forming the calculation base of the two returns is equal to the number of shares used
as a reference in calculating the compensation.
– The price per share for the calculation base of the two returns matches the reference price used as the base
for appreciation of the shares.
– The Ferrovial Group pays the institution a return based on EURIBOR plus a margin of between 0.70% and
0.50% to be applied to the amount of the theoretical financing (number of shares x reference price).
– The financial institution will pay the Ferrovial Group an amount equal to all the dividends generated by these
shares in favor of Grupo Ferrovial, S.A.
– After three years have elapsed from the contract arrangement date (equal to the minimum period which
must elapse in order to receive compensation) the Ferrovial Group can decide to partially or fully terminate
the contract:
-
In this case, if the market share price is lower than the reference price for which the contract was
established, the Ferrovial Group must pay the granting financial institution the difference.
-
In the event that the market share price on that date is higher than the reference price, the Ferrovial
Group will receive the difference between the two amounts.
In relation to the flows described, in 2002, Grupo Ferrovial S.A. paid the granting institutions €1,931 thousand
and received €1,354 thousand.The two amounts were recognized, as a financial expense and a financial revenue
respectively, in the consolidated financial statements.
148
Annual Report 2002
(35) ENVIRONMENTAL POLICY
Environmental activity is defined as any action intended to prevent, reduce or repair environmental damage.
However, the activities in which the Ferrovial Group engages include street cleaning, solid urban waste
collection, water treatment and quality control and other activities which involve the provision of environmental
services to third parties. Also, a considerable proportion of the construction projects are subject to evaluation
of their environmental impact and include the performance of tasks to conserve, maintain and restore the
environment.
The Ferrovial Group does not treat the assets and expenses relating to the aforementioned provision of
services as environmental assets and expenses because these are performed for third parties. However,
environmental claims and obligations are included irrespective of whether they are in-house operations or
operations performed for third parties.
Investments arising from environmental activities are valued at acquisition cost and capitalized as an addition to
fixed asset cost in the year in which they are incurred according to the standards described in Note 4.
The expenses arising from protecting and improving the environment are expensed currently, regardless of
when the resulting monetary or financial flow arises.
The provisions for probable or certain environmental third-party liability, litigation in progress and outstanding
environmental indemnity payments or obligations of undetermined amount not covered by insurance policies
are recorded when the liability or obligation giving rise to the indemnity or payment arises.
Environmental assets
The main environmental assets recorded at the Ferrovial Group relate to the investment made in toll roads for
the purpose of analyzing environmental impact and protecting the environment.The amount capitalized in this
connection was €31,308 thousand.
This amount relates mainly to the investment made by Autopista del Sol, C.E.S.A. in landscape recovery,
evaluation of noise impact, and other general actions, mainly the construction of false tunnels which improve
the other actions, such as landscape recovery and evaluation of noise impact.Túneles de Artxanda S.A., which
is accounted for by the equity method in the Ferrovial Group, also made investments (€2,972 thousand)
relating to landscape activities and minimization of noise impact.
149
Environmental expenses
The ordinary environmental expenses incurred in 2002 included the following:
– Preliminary study expenses
– Training expenses
– Personnel expenses
– Facility maintenance expense
– Research and development expenses
Most of these expenses arose in the Construction division.The ordinary expenses incurred in 2002 amounted
to €1,440 thousand in this division.
The penalties paid by the construction division in the last 4 years amounted to €36 thousand, of which €9
thousand relate to 2002.
(36) RELATED PARTIES DISCLOSURE
Under Article 37 of Law 44/2002 on Financial System Reform Measures, companies issuing securities must
communicate to the Spanish National Securities Market Commission quantitative information on all their
transactions with related parties in such form as may be determined by the Ministry of Economy.
This obligation is also included in IAS 24 relating to the disclosures of related party transactions to be included
in the financial statements.
For the purposes of this Note and subject to pending regulatory developments, related party transactions are
considered to be the following:
– Transactions carried out with significant shareholders of the company
– Transactions carried out with directors of the company
– Transactions carried out with members of the Management Committee and with executives reporting
directly to the Chairman and to the Managing Director of Grupo Ferrovial, S.A.
Before specifying the transactions carried out in 2002, it is worth noting that the related party transactions were
not significant, and in all cases were carried out on an arm’s-length basis.
150
Annual Report 2002
a) Transactions with significant shareholders.
The transactions carried out by Grupo Ferrovial, S.A. or its investees with its main shareholders or with
investees of the controlling family Group in 2002 were as follows:
– Ferrovial Conservación, S.A. and Grupo Ferrovial, S.A. made rent payments for two office buildings for
which €314 thousand were billed in 2002.
– Ferrovial Servicios, S.A. provided maintenance and integral office building management services to Casa
Grande de Cartagena, S.L., a shareholder of the Parent Company. €99 thousand were billed in this
connection in 2002.
b) Transactions with Directors of Grupo Ferrovial, S.A.
This section includes the transactions carried out by the members of the Board of Directors of Grupo
Ferrovial, S.A., by relations who live with them, by holding companies or by entities in which they hold an
executive management position.
The transactions carried out in 2002 were the following:
In 2002 the Ferrovial Group companies engaged services relating to the normal hospitality activities carried
on by NH Hoteles, S.A. amounting to €73 thousand.
Additionally, Ferrovial Servicios, S.A. provided facility maintenance services to the aforementioned entity
amounting to €33 thousand.
At 2002 year-end, Grupo Ferrovial, S.A. and its investees had contracts with Bankinter Group companies
for lines of credit amounting to €600 thousand, without drawing down any amount.The balance invested
as of December 2002 in marketable securities recorded under the “Short-Term Investments” caption of
the balance sheet amounted to €10,000 thousand (1.3% of the total balance of this caption). Grupo
Bankinter S.A. had granted guarantee facilities to various Group companies amounting to a total of €12,000
thousand, which were fully used (0.4% of the total guarantees provided by the Group companies).
c) Transactions with members of the Management Committee and with executives reporting directly to the
Chairman and to the Managing Director of Grupo Ferrovial, S.A. in the year.
As in the previous case, this section includes the transactions carried out directly by members of the Board
of Directors of Grupo Ferrovial, S.A., and by relations who live with them or holding companies.
The amounts billed in this section relate to sales of housing units made by Ferrovial Inmobiliaria, S.A. or
certain of its investees under the general terms established for the employees of the Ferrovial Group and
which generated payments of €32 thousand in 2002.
151
(37) COMPENSATION TO AUDITORS
In compliance with the Fourteenth Additional Provision of Law 44/2002 on Financial System Reform Measures,
the total fees for the audit of the 2002 financial statements of Grupo Ferrovial S.A. and of all its fully and
proportionally consolidated investees in Spain and abroad are stated below. Also set forth below is the detail
of the fees billed in 2002 to all the companies composing the Ferrovial Group by the auditor of the individual
and consolidated financial statements of Grupo Ferrovial, S.A., as well as other items billed by that auditor:
€ 1.501 thousand
–
Total consolidated Group audit fees:
–
Audit fees billed by main auditor:
€ 586 thousand
–
Other items billed by main auditor
€ 179 thousand
The main audit fees represent 0.37% of the total billings of the audit firm in 2002
(38) SUBSEQUENT EVENTS
In January 2003 a financing contract was entered into for the concession-holder Autopista del Sur (R 4) for a
total of €560,000 thousand, of which €360,000 thousand are a loan from the European Investment Bank.
On January 31, 2003 the first section of the Scut del Algarve toll road was opened to traffic.The length of this
section is 9.8 kilometers.
152
Annual Report 2002
(39) COMMENTS ON EXHIBITS I, II AND III
Exhibit I below presents the consolidated balance sheet as of December 31, 2002, by business division.
Each division includes all the assets and liabilities relating to it, including the goodwill, if any, generated in each
division due to the acquisition of companies. The balance sheets for each division also include the minority
interests relating to it.
The shareholders’ equity in each division is the difference between the assets and liabilities assigned to that
division.
The “Other” column includes the assets and liabilities of the Corporate and Telecommunications divisions, and
the adjustments between divisions, which relate basically to accounts receivable and payable.
Exhibit II presents the 2002 consolidated income statement, by business division.
Each division includes the result contributed by that division to the Consolidated Group. All the consolidation
adjustments have been allocated among the divisions, except the elimination of the margin generated by
transactions between companies from the various divisions.
As in the case of the balance sheet, the “Other” column includes the statements of income of the Corporate
and Telecommunications divisions, and the adjustments between divisions, which, except for the elimination of
the margin obtained from the aforementioned intercompany transactions, do not represent any result, since
they are eliminations of revenues recorded in certain divisions which relate to the same amount of expenses
recorded in other divisions.
Exhibit III includes a cash flow statement, by business division. The internal flows generated by corporate
reorganization transactions, and the payment of dividends by the various divisions to Grupo Ferrovial S.A., are
recorded under the “Other Variations in Shareholders’ Equity” caption in the Own Financing Flow. Accordingly,
no impact of these internal transactions was transferred either to the operating flow or to the investment flow.
The impact of exchange rate variations on the net cash position for the cash balances denominated in
currencies other than the euro is also reflected under the “Other Variations in Shareholders’ Equity” caption.
(40) EXPLANATION ADDED FOR TRANSLATION TO ENGLISH
These consolidated financial statements are presented on the basis of accounting principles generally accepted
in Spain. Certain accounting practices applied by the Group that conform with generally accepted accounting
principles in Spain may not conform with generally accepted accounting principles in other countries.
153
EXHIBIT I
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2002 BY BUSINESS
Thousands of Euros
A S S E T S
CONSTRUCTION INFRASTRUCTURE REAL ESTATE
DUE FROM SHAREHOLDERS FOR UNCALLED CAPITAL
(8)
9,207
FIXED AND OTHER NONCURRENT ASSETS
294,223
5,326,467
Start-up expenses (Note 7)
Intangible assets (Note 8)
Intangible assets and rights
Allowances and accumulated amortization
Tangible fixed assets (Note 9)
Investments in toll roads and airports
Land and buildings
Plant and machinery
Provisions and accumulated depreciation
Long-term financial investments (Note 10)
Investments accounted for by the equity method
Long-term investment securities
Loans to companies accounted for by the equity method
Other loans
Provisions
Treasury stock (Note 16)
379
4,058
8,564
(4,506)
148,041
8,539
114,630
119,953
(5,323)
4,671,903
4,614,004
114,976
33,420
13,493
(103,990)
531,336
338,964
2,501
14,939
OTHER
31,832
62,827
38,540
342
65
608
(543)
20,091
144
27,696
38,181
(10,485)
29,141
1,208
2,763
(1,555)
8,931
14,531
8,464
3,210
(6,114)
11,334
9,603
19
954
758
6,860
23,020
36,013
(36,752)
5,846
3,245
5
7,230
5,239
6,349
(9,887)
(18,774)
2,596
(120,214)
(4,983)
47,175
TOTAL
9,199
106,423
5,753,889
9,404
147,657
170,069
(22,412)
4,878,107
4,614,004
188,999
298,790
104,558
(328,244)
671,487
351,812
123,887
954
209,363
(14,529)
47,234
134,031
(7,225)
192,192
(2,321)
59
74,257
230,840
18,995
31,632
128
863,040
7,867
4,362
25
875,422
3,034,935
639,282
1,267,392
216,091
(885,350)
4,272,350
Inventories (Note 12)
109,780
Accounts receivable
1,505,681
Customers receivables for sales and services (Note 13)
1,273,655
Receivable from companies carried by the equity method
2,943
Other accounts receivable (Note 14)
281,997
Provisions (Note 15)
(52,914)
Short-term financial investments (Note 21)
1,276,486
Short-term investment securities
465,491
Loans to associated companies
Other loans
811,080
Provisions
(85)
Cash
129,291
Other
129,291
Accrual accounts
13,697
19,005
228,159
80,265
833
171,321
(24,260)
283,776
234,380
48,593
2
861
(60)
73,819
59,012
14,807
34,523
1,078,205
152,506
69,452
165
83,590
(701)
9,543
5,648
191,456
188,411
1,319
9,415
(7,689)
2,846
1,281
(95,677)
396
(3,918)
(91,901)
(254)
(788,804)
9,232
149
162
2,107
739
3,326
(35)
(792,095)
10,663
14,792
1,233
10,663
16,475
14,792
1,349
1,233
(3,383)
1,213,919
1,982,125
1,612,179
1,342
454,422
(85,818)
783,847
234,380
528,749
116
20,747
(145)
229,798
59,012
170,786
62,661
7,068,836
1,326,086
314,912
(846,785)
11,266,584
CONSOLIDATION GOODWILL (Note 10)
DEFERRED EXPENSES (Note 11)
CURRENT ASSETS
TOTAL ASSETS
154
45,402
228,647
45,493
(171,501)
141,745
SERVICES
Annual Report 2002
3,403,535
355,724
EXHIBIT I (CONTINUED)
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2002 BY BUSINESS
Thousands of Euros
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY (Nota 16)
Capital stock
Share premium
Reserves for Treasury stock
Other reserves of the parent company
Unrestricted reserves
Restricted reserves
Reserves at fully consolidated companies
Reserves at companies accounted for by the equity method
Interim dividend paid during the year
Income attributable to the parent company
Consolidated income
Income attributed to minority interests
MINORITY INTERESTS (Note 17)
CONSTRUCTION INFRASTRUCTURE
479,853
971,899
REAL ESTATE
247,884
SERVICES
56,545
3,236
59
626,878
626,926
(48)
151,572
17,712
(81,015)
65,954
63,231
2,723
151,576
(21,057)
(3,778)
42,594
45,587
(2,993)
9,828
(74)
3
120,524
114,122
(6,402)
256,693
284,720
28,027
55,189
54,784
(405)
4,194
4,156
(38)
927
(343)
99,913
96,185
3,728
256,180
OTHER
TOTAL
(261,604)
1,494,577
140,265
193,192
47,175
(598,399)
(618,439)
20,040
(35,555)
140,265
193,192
47,234
236,940
213,490
23,450
533,601
(3,419)
(81,554)
(27,501)
455,819
477,001
21,182
(27,501)
19,219
19,219
47,739
725,990
NEGATIVE CONSOLIDATION DIFFERENCE (Note 18)
6,746
2,299
150
Fully consolidated companies
6,746
2,299
150
9,195
DEFERRED REVENUES
25,968
42,780
(113)
143
68,778
Goverment grants (Note 19)
Exchange gains
Other deferred revenues (Note 19)
13,836
12,132
7,398
185
35,197
11
(113)
21,245
12,204
35,329
PROVISIONS FOR CONTINGENCIES AND EXPENSES (Note 20) 49,738
227,508
8,514
3,658
23
289,441
Reversion fund
Other provisions
49,738
46,879
180,629
8,514
3,658
23
46,879
242,562
21,414
4,467,838
314,280
12,763
263
4,816,558
233,468
11,439
263
233,468
7,749
3,690
1,339
(15)
849
(586)
Other companies
Other long-term debt
Uncalled capital payments payable
Associated companies
Other companies
Notes payable
CURRENT LIABILITIES
20,731
19,712
1,019
683
2,853,580
1,195,818
1,146,835
47,810
1,173
418,340
(1)
9,195
132
31
(15)
2,772,077
2,853,580
1,461,719
1,146,835
309,588
5,296
420,393
(15)
(15)
80,881
100
80,781
630,522
754,594
241,996
(585,466)
434,000
128,745
(516,736)
45,998
388,002
48,650
232,183
37,916
207
1,638
4,694
124,051
1,145
80,421
27,671
2,368
1,646
1,056
(517,792)
(339,997)
75,642
195,622
3
41,354
352,488
249,472
99,320
3,696
33,232
2,584,991
612,212
150,314
39,132
1,326,086
314,912
(846,785)
11,266,584
Other companies
Payable to associated companies (Note 22)
Trade accounts payable (Note 22)
Other nontrade payables (Note 22)
Operating provisions (Note 15)
Accrual accounts (Note 22)
38,087
1,030
174,976
2,097,232
294,958
142,542
23,252
41,354
267,362
249,472
9,485
8,405
148,458
99,513
56,045
5,197
12,593
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES
3,403,535
7,068,836
39,117
774,312
3,813,723
The accompanying Notes 1 to 40 are an integral part of the 2002 consolidated balance sheet.
155
EXHIBIT II
2002 CONSOLIDATED STATEMENTS OF INCOME BY DIVISION
Thousands of Euros
SERVICES
OTHER
340,057
(158,405)
TOTAL
Net sales (Note 25)
Increase in finished goods
and work-in-process inventories
Capitalized expenses of group work on fixed assets
Inventories included in fixed assets
Other operating revenues
3,788,898
449,995
619,679
5,082
7,978
33
11,129
(718)
13,067
849
2,878
44
135
69
51
TOTAL OPERATING REVENUES
3,805,692
474,217
619,012
340,236
(158,336)
5,080,821
Cost of materials used and other external expenses
2,168,512
Personnel expenses
356,419
a) Wages, salaries and similar expenses
293,697
b) Employee welfare expenses
62,722
Depreciation and amortization expense and reversion reserve
31,496
Variation in operating provisions
49,216
Other operating expenses
1,044,810
47,222
67,072
58,591
8,481
57,629
10,965
80,672
427,189
29,370
24,548
4,822
1,902
812
55,953
85,758
192,059
149,145
42,914
7,988
2,410
33,601
(157,615)
18,196
16,608
1,588
4,117
(19,915)
2,571,066
663,116
542,589
120,527
103,132
63,403
1,195,121
3,650,453
263,560
515,226
321,816
(155,217)
4,595,838
155,239
12
160
32,116
210,657
103,786
18,420
120
3,937
3,412
525
1,018
240
135
1,498
83
1,982
(3,119)
150
86
(8,097)
1,498
323
1
1,982
66
(8,097)
762
484,983
162
584
31,436
3,412
28,024
23,733
4,370
TOTAL OPERATING EXPENSES
OPERATING INCOME (NOTE 26)
Revenues from equity investments
Revenues from other securities
Other financial revenues
Other companies
Gains on short-term investments
Exchange gains
32,116
21,564
4,129
TOTAL FINANCIAL REVENUES
Financial expenses
Other companies
Variation in investment allowance
Exchange losses
5,040,224
4,364
21,045
995
14,193
57,981
5,315
1,957
2,131
(7,099)
60,285
8,097
49,101
38,019
11,082
25,800
6,268
25,800
(15)
6,268
(10,886)
1
(10,887)
21
2
78,380
38,020
40,360
(15)
6,667
25,785
6,289
(10,884)
85,032
(34,608)
9,861
8,097
4,896
1,748
12,993
50,849
Financial loss of toll road and airport concession-holders
Financial gain (loss) at other companies
44,988
(34,607)
(10,927)
(23,828)
(4,158)
(1)
3,786
FINANCIAL LOSS (Note 27)
44,988
(45,534)
(23,828)
(4,158)
3,785
(24,747)
(451)
4,861
5,916
16,792
6,651
2,596
300
2,145
(2,432)
12,416
23,962
TOTAL FINANCIAL EXPENSES
Share in income of companies
carried by the equity method (Note 10.a.)
Amortization of goodwill in consolidation (Note 10.e) (*)
194,915
154,247
84,013
12,417
3,098
448,690
Capital subsidies transferred to income for the year (Note 19)
Gains on fixed assets (Note 28)
Extraordinary revenues or income
225
2,472
1,520
393,151
(366)
2,248
3,205
654
345
12,260
15,971
225
410,785
20,675
TOTAL EXTRAORDINARY REVENUE
4,217
392,785
5,453
999
28,231
431,685
85
12,209
(7)
534
4,906
24
(4,982)
6,165
2,091
187,854
Variation in allowances (Note 10-b)
Losses on fixed assets (Note 28)
Extraordinary expenses and losses
TOTAL EXTRAORDINARY EXPENSES (Note 10)
EXTRAORDINARY INCOME (Note 28)
CONSOLIDATED INCOME BEFORE TAXES
Corporate income tax (Note 23)
CONSOLIDATED INCOME FOR THE YEAR
INCOME ATTRIBUTED
TO MINORITY INTERESTS (Note 17)
INCOME FOR THE YEAR ATTRIBUTED TO
THE PARENT COMPANY (Note 30)
(Note 29)
6,172
1,432
13,999
16
161,722
21,603
161,738
12,294
5,433
(4,958)
196,110
(17,386)
231,047
(6,841)
(4,434)
33,189
235,575
177,529
385,294
77,172
7,983
36,287
684,265
63,407
100,574
22,388
3,827
17,068
207,264
114,122
284,720
54,784
4,156
19,219
477,001
(6,402)
28,027
(405)
(38)
120,524
256,693
55,189
4,194
21,182
19,219
455,819
The accompanying Notes 1 to 39 are an integral part of the 2002 consolidated statement of income.
(*) €1,275 thousand and €860 thousand were included as amortization of goodwill in the Real Estate and Services Divisions, respectively, and are reclassified
at consolidated level as period depreciation and amortization expenses.They relate to the amortization of deferred expenses for the acquisitions of Ferogasa
and LAR 2000, S.A. (see Note 11).
156
Annual Report 2002
EXHIBIT III
CASH FLOW BY DIVISION
Thousands of Euros
STATEMENT OF CASH FLOWS
Net result
Adjustments to result
Dividend payment
Other variations in shareholders’ equity
Net debt included
GROUP
256,693
55,189
4,194
19,219
455,819
99,898
-249,533
-105,998
23,115
-8,012
-240,530
24,231
-133,994
-27,353
-10,886
-13,116
134,887
Intangible asset investments
Acquisition by MIG of ownership interest in Cintra, S.A.
OTHER
120,524
Collection of dividends from concession-holders
Operating cash flow
SERVICES
90,014
90,014
355,309
121,405
-184,803
-45
321
292,187
-917
-38,565
-3,856
-11,341
-13,040
-421,216
816,000
292
-5,023
3,101
-956
-3,788
-6,133
-923
-1,752
12,171
-13,845
-62,168
-415,933
816,000
-43,338
370,403
-1,630
-10,877
9,496
324,054
236,896
62,865
-5,117
2,273
-58,834
-267,717
-58,834
29,200
236,896
62,865
-5,117
2,273
-326,551
-29,634
32,166
-3,264
-17,980
-5,021
-980
-1,807
4,094
-980
581,033
551,409
-209,530
-14,649
-318,542
589,721
157
EXHIBIT IV
SUBSIDIARIES (FULLY OR PROPORTIONALLY CONSOLIDATED COMPANIES)
(Figures in Thousands of Euros)
Individual Information
Consolidated Information
CORPORATE
COMPANIES
SPAIN
Grupo Ferrovial, S.A
Ferrovial, S.A. (a) (c.1)
Betonial, S.A. (a)
Burety, S.L. (a)
Can-Am, S.A, Sociedad Unipersonal (a)
Frin Gold, S.A. (a)
Inversiones Trenza, S.A. (a)
Promotora Ibérica de Negocios, S.A. (a)
Sotaverd, S.A.
Marliara, S.A. (a)
Sepriverma, S.A (a)
Helguina, S.A (a)
RESTO
Parent Company
Percentage of Net Cost of
Grupo Ferrovial,S.A. (1)
Grupo Ferrovial,S.A.
Grupo Ferrovial,S.A. (i)
Ownership
Holding
99.98
99.00
99.00
100.00
99.00
99.00
99.00
49.00
99.00
99.00
99.00
1,150
34,535
0
0
67
0
377
0
117
60
60
Location
Madrid
Madrid
Madrid
Madrid
Las Palmas
Madrid
Madrid
Madrid
Barcelona
Madrid
Madrid
Madrid
TOTAL
Consolidation
Attributed
Reserves
Result
320,565
-8,574
-7,509
-5,666
-7,954
-22
-6,613
-216
18,127
2,919
798
1,440
-104
2
7
12
-1
0
0
2,037
0
-1
-1
3,301
286,047
26,500
(i) Other 28.47% owned by Ferrovial, S.A
CONSTRUCTION
COMPANIES
Consolidation
Attributed
Reserves
Result
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Barcelona
Madrid
Cartagena
Bilbao
Madrid
Madrid
Madrid
Madrid
Bahamas
17,126
208
1,599
2,888
3,391
2,013
830
-1,927
-480
-58,423
-4
-1.055
-1
-7
7
119,051
-36
753
981
621
-234
20
85
0
2,859
878
647
0
331
-1
121
Canadá
1.404
372
100.00
97,585
The Netherlands
-15
-132
100.00
0
Puerto Rico
-4,661
-216
Ownership
Holding
SPAIN
Ferrovial Agromán, S.A.(a) (c.1)
Grupo Ferrovial,S.A.
Ferrovial Medioambiente y Energía, S.A (a)(c.1)
Ferrovial Agromán S.A (1)
Compañía de Obras Castillejos, S.A (a) (c.1)
Tecpresa, S.A (a)
Ditecpesa, S.A (a) (c.3)
Ferrovial Conservación, S.A (a) (c.1)
Aplicación de Recursos Naturales, S.A (a)
Karman Técnicas Especiales, S.A (c.6)
Urbaoeste, S.A (a)
Ferrovial Agromán S.A
Cadagua, S.A (a) (c.1)
Discota XXI, S.L unipersonal (a)
Bygging Encofrados Deslizantes, S.A (c.6)
Karman Técnicas Especiales, S.A (2)
Técnicas de Pretensado y serv. auxiliares, S.L (a)
Tecpresa, S.A (1)
Boremer, S.A
Cadagua, S.A (iii)
Fisa Limited
Ferrovial, S.A
99.90
99.00
99.95
99.00
99.95
99.00
99.98
50.00
100.00
99.95
100.00
82.47
99.99
40.00
100.00
66,887
879
8,252
1,532
1,201
2,976
247
265
889
78,616
97,586
842
3,276
872
10
CANADA
Ferrovial Agromán Canadá Inc. (c.5)
100.00
Discota XXI, S.L unipersonal
THE NETHERLANDS
Valivala Holdings B.V
PUERTO RICO
Ferrovial Agromán Int. Puerto Rico, S.A (c.3)
158
Parent Company
Annual Report 2002
Location
CONSTRUCTION
COMPANIES
CHILE
Ferrovial Agromán Chile, S.A (c.2)
Ferrovial Agromán Empresa Construc. Ltda.
Ferrovial Agromán sucursal Chile (c.2)
Constructora Agromán Ferrovial Ltda. (c.2)
Constructora Delta Ferrovial Ltda. (c.2)
Constructora Collipulli Temuco, Ltd. (c.2)
Constructora Santiago Talca, Ltd. (c.2)
Empresa Constructora Inela Agromán
Ltda. (c.2)
Chile Constructora ADC (c.2)
Cerro alto Ferrovial Limitada
Constructora Delta Agromán Ltda. (c.2)
POLAND
Budimex, S.A (c.5)
Budimex Projekt, Sp z.o.o. (c.6)
Budimex Nieruchomosci, Sp z.o.o. (c.5)
Budimex Dromex S.A
Budomont Pomorze S.A (c.5)
Budchem Sp z.o.o.
Budimex Poznan Developer Sp z.o.o. (c.5)
Budimex Olsztyn, S.A (c.5)
Unibud Podlaski Sp z.o.o.(c.5)
Dromex Cieszyn Sp z.o.o. (c.5)
Mk Centrum S.A (c.5)
Mk Kraty Sp z.o.o.
ZPREP Energetyka Czerwonak S.A
Mk Zaklad Sprzetowo Transportowy Sp z.o.o.
Bipromet S.A (c.6)
Zarat S.A (c.6)
Sulejkowka Sp z.o.o.
Centrum Kinferencyjne Budimex Sp z.o.o
Mk Nieruchomosci Sp z.o.o.
Przedsieblorstwo Budowlane Katowice S.A
Mk Krakmos Sp z.o.o
Consolidation
Attributed
Reserves
Result
Chile
Chile
Chile
Chile
-15,040
-33,730
142
8,433
-1,666
-50
8
Chile
15,952
485
89.00
6
Chile
459
-300
89.00
0
Chile
209
-221
Ferrovial Agromán sucursal Chile
Ferrovial Agromán Chile, S.A
90.00
49.50
50.00
50.00
0
0
0
0
Chile
Chile
Chile
Chile
Valivala Holdings B.V
Budimex, S.A
Budimex, S.A
Budimex, S.A
Budimex Dromex S.A
Budimex Dromex S.A
Budimex Dromex S.A
Budimex Dromex S.A
Budimex Dromex S.A
Budimex Dromex S.A
Budimex Dromex S.A
Budimex Dromex S.A
Budimex Dromex S.A
Budimex Dromex S.A
Budimex Dromex S.A
Budimex Nieruchomosci, Sp z.o.o.
Bipromet, S.A
Przedsieblorstwo Budowlane
Katowice S.A
58.91
69.00
100.00
100.00
100.00
51.04
100.00
99.30
100.00
98.90
100.00
75.64
81.37
100.00
97.04
79.80
100.00
100.00
100.00
60.00
79,506
161
34,624
231,823
2,668
153
2,840
602
4.909
581
2,772
497
982
2,964
2,658
732
8
126
891
418
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
32,489
-12,350
100.00
247
Poland
-36,626
120,524
Parent Company
Ownership
Holding
Ferrovial Agromán S.A (i)
Ferrovial Agromán S.A (ii)
Ferrovial Agromán Empresa
Constructora Limitada
Constructora Limitada (3)
Constructora Limitada (3)
52.63
99.00
100.00
50.00
4,499
0
0
0
50.00
Location
OTHER
TOTAL
(i)
(ii)
(iii)
214
Remaining 47.37% owned by Ferrovial Agromán Empresa Constructora Ltda. with a net cost of €7 thousand
Remainder relates to Ferrovial Agromán branch in Chile
Further 10% owned by Ferrovial Medioambiente y Energía for a net cost of €218 thousand
159
INFRASTRUCTURE
COMPANIES
SPAIN
Ferrovial Infraestructuras S.A
de transporte, S.A (c.1)
Cintra Aparcamientos, S.A (a) (c.1)
Ferrovial Aeropuertos, S.A (a) (c.1)
Autopista del Sol, C.E.S.A (c.1)
Autopista Terrasa Manresa, S.A (c.1)
Autopista Trados M-45, S.A (c.1)
M-45 Conservación, S.A
Autopista de Toronto S.L
Inversora de Autopistas del Sur, S.L (c.1)
Dornier, S.A (a) (c.1)
Femet, S.A (a) (c.1)
Guadianapark, S.A (a)
Balsol 2001, S.A (a)
Estacionamientos Alhóndiga, S.A
Aparcament Escaldes Centre, S.A
Autopista Madrid Sur C.E.S.A
PORTUGAL
Euroscut Norte Litoral, S.A (c.1)
Consolidation
Attributed
Reserves
Result
Madrid
753,168
-584
1,301,999
55,875
108,395
Madrid
Madrid
Madrid
-745,927
73,810
1,733
205,788
6,085
-425
75.00
141,741
Madrid
9,280
6,011
77.67
43,925
Barcelona
10,322
4,686
50.00
50.00
14,950
Madrid
Madrid
1
1,130
100.00
392,292
Madrid
15,398
10,481
45.00
100.00
0.50
75.00
50.00
50.00
100.00
100.00
28,522
21,313
7
1,268
1,496
1,050
72
139,582
Madrid
Madrid
Madrid
Madrid
Gerona
Bilbao
Andorra
Madrid
-1
-7,198
-259
-60
-818
1
0
0
0
960
540
117
-26
0
0
0
Ownership
Holding
99.99
970,392
Ferrovial Infraestructuras, S.A
Ferrovial Infraestructuras, S.A (1)
de transporte, S.A (vi)
de transporte, S.A
de transporte, S.A
Autopista Trados 45, S.A
de transporte, S.A
de transporte, S.A (viii)
Cintra Aparcamientos, S.A (iii)
Cintra Aparcamientos, S.A (iV)
Inverosra de Autopistas del Sur, S.L
60.00
99.92
99.00
Location
71.00
44,870
Portugal
1
5
Euroscut -Sociedade Concessionaria
da Scut do Algarve, S.A (c.1)
de transporte, S.A (v)
71.00
32,139
Portugal
3
2
AUSTRALIA
Ferrovial Sydney, Airport
Investment Trust (b) (c.1)
Ferrovial Aeropuertos Australia Ltd.
Ferrovial Aeropuertos, S.L
100.00
100.00
233,817
Sydney
Sydney
-4,094
4
Autopista de Toronto S.L
71.00
100.00
13
261,370
The Netherlands
The Netherlands
65
15,148
-752
de transportes, S.A (i)
99.99
300,362
Chile
2,487
-4,091
Cintra Chile Limitada (vii)
99.99
85,878
Chile
1,044
824
Cintra Chile Limitada
Cintra Chile Limitada
75.00
99.99
41,200
128,672
Chile
Chile
32
846
1,940
4,847
Ferrovial Aeropuertos, S.L (3)
99.99
1,914
Chile
-200
2
THE NETHERLANDS
Algarve International B.V. (c.1)
407 Toronto Highway B.V
CHILE
Cintra Chile Limitada (c.2)
Ruta de la Araucanía sociedad
concesionaria, S.A (c.2)
Ruta de los Ríos sociedad
concesionaria, S.A (c.2)
Autopista del Maipo, S.A (c.2)
Sociedad Concesionaria, S.A (c.2)
160
Parent Company
Annual Report 2002
INFRASTRUCTURE
Percentage of
Net Cost of
Ownership
Holding
COLOMBIA
Cintra Colombia Limitada (c.1)
Cintra, Concesiones de Infraestructuras de transporte, S.A (i)
Promotora de Proyectos de Infraestructuras (PROPISA) Cintra Colombia, S.L
Concesiones de Infraestructuras (CISA)Promotora de Proyectos de Infraestructuras (PROPISA) (ix)
99.99
59.90
94.00
0
0
0
Colombia
Colombia
Colombia
POLAND
Autostrada Poludnie, S.A
Cintra, Concesiones de Infraestructuras de transporte, S.A (ii)
50.00
6,118
Poland
2,830
0
Ferrovial Aeropuertos, S.L
Cintra Airports UK Limited
Tidefast Limited
100.00
50.00
100.00
0
56
21,661
UK
UK
UK
-68
-11,740
11,373
-2,795
-14,112
8,093
407 Toronto Highway B.V
407 Internacional Inc.
67.10
295,379
Canada
26,564
28,204
100.00
993,613
Canada
75.00
356
Puerto Rico
-22
-8
COMPANIES
UK
Cintra Airports UK Limited (c.4)
Tidefast Limited (b) (c.4)
Bristol Int. Airport PLC. (b) (c.4)
CANADA
407 International Inc. (c.1 y c.5)
407 ETR Concession Company
Limited (c.1 y c.5)
PUERTO RICO
Estacionamientos Río Piedras Inc.
Parent Company
Location
Consolidation Attributed
Reserves
0
OTHER
TOTAL
(i)
(ii)
(iii)
(iV)
(v)
(vi)
(vii)
(viii)
(ix)
Result
-2,217
153,719
254,709
0.01% of the remaining capital is owned by Grupo Ferrovial, S.A
37.5% of the remaining capital is owned by Budimex, S.A and 12.5% by Ferrovial Agromán, S.A
99.5% of the remaining capital is owned by Dornier, S.A with a net cost of 1,405
50% of the remaining capital is owned by Dornier, S.A with a net cost of 1,385
A further 8% is owned by Ferrovial Agromán, S.A
A further 10% is owned by Europistas C.E.S.A
Remainder Ferrovial Agromán branch in Chile
Further 25% owned by Europistas C.E.S.A
Further 3.58% through Cintra Colombia, Limitada
161
REAL ESTATE
COMPANIES
Parent Company
Ownership
Holding
Location
Consolidation
Attributed
Reserves
Result
SPAIN
Ferrovial Inmobiliaria, S.A
Lar 2000, S.A (a) (c.1)
Ferrovial Inmobiliaria, S.A (1)
Nueva Marymontaña, S.A
Promotora Residencial Oeste de Barcelona, S.L (a) Ferrovial Inmobiliaria, S.A (1)
Domovial, S.L
MSF Holding Madrid BV
Setecampos, S.A
Malilla 2000, S.A
Ferrovial Inmobiliaria, S.A (ii)
Mairena Desarrollo Inmobiliario, S.L (a)
Ferrovial Inmobiliaria, S.A (iii)
Ferrovial Servicios Inmobiliarios, S.L (a) (c.1)
Ferrovial Inmobiliaria Canarias, S.L (a)
Ferrovial Inmobiliaria, S.A (iv)
Fuenteberri, S.L
Ferrovial Inmobiliaria, S.A (v)
Promociones Bislar, S.A (a) (c.1)
Lar 2000, S.A (vi)
Bislar, S.A (a) (c.1)
Lar 2000, S.A (1)
Don Piso S.L (a) (c.1)
Ferrovial Servicios Inmobiliarios, S.L (ix)
Promociones Jadelu, S.L
Fuenteberri, S.L (viii)
INMOFEMA S.L.
Fuenteberri, S.L (x)
99.92
99.99
55.10
99.00
100.00
50.00
48.00
95.00
100.00
99.00
41.34
70.00
90.00
99.74
50.00
74.00
98,984
22,104
3,313
8,586
190
9,216
673
2,907
22,249
28,599
19,568
42
60
1,155
1,655
2
Madrid
Madrid
Benidorm
Madrid
Madrid
Portugal
Valencia
Madrid
Madrid
Canarias
San Sebastián
Madrid
Madrid
Barcelona
San Sebastián
San Sebastián
65,429
17,035
-2,563
4,930
21
-1,984
-59
0
-2,245
1
-16,514
5,979
548
1,158
-117
13,135
28,785
8,350
-497
2,225
-18
4,065
-10
-3
3,921
134
-472
693
226
845
-582
-1,064
PORTUGAL
Ferrovial Inmobiliaria sucursal Portugal (c.1)
Ferrovial 2000 Ltda. (c.1)
100.00
99.80
34,176
2,464
Portugal
Portugal
-2,949
108
2,819
244
THE NETHERLANDS
Ferrovial Holding Holland, B.V
100.00
17,366
The Netherlands
10.996
-28
Ferrovial Inmobiliaria, S.A (i)
Ferrovial Inmobiliaria Chile Ltda.
Habitaria, S.A (vii)
99.00
50.00
99.99
10,216
10,904
1,799
Chile
Chile
Chile
-2,896
0
0
-694
927
-13
-1,890
90,013
47,963
CHILE
Ferrovial Inmobiliaria Chile Ltda. (c.6)
Habitaria, S.A (c.5)
Barrioverde S.A (c.5)
OTHER
TOTAL
(i)
(ii)
(iii)
(iv)
(v)
Remaining 1% owned by Grupo Ferrovial, S.A
Further 7% owned by Promotora Residencial Oeste de Barcelona, S.L
Remaining 5% through Promociones Bislar, S.A
Remaining 0.1% owned by Promotora Residencial Oeste de Barcelona, S.L
26 % of the remaining capital of this company is owned by Ferrovial Holding Holland BV, 21.25 % by Promotora Residencial Oeste de Barcelona, S.L and 11.41 %
by Inmofema, S.L
(vi) 30 % of the remaining capital is owned by Bislar S.A with a net cost of 18
(vii) 0,005% is owned by Ferrovial Inmobiliaria Chile
(viii) The remaining 50% is owned by Inmofema, S.L with a net cost of 1,655
(ix) Remainder owned by Ferrovial Inmobiliaria,S.A
162
Annual Report 2002
SERVICES
COMPANIES
SPAIN
Ferrovial Servicios, S.A. (a)
Eurolimp, S.A (a) (c.3)
Grupisa Infraestructuras, S.A (a) (c.3)
Eurointegral, S.A (a)
Limpxan, S.A (a)
Seguridad Vial, S.A (a) (c.3)
Viales de Castilla y León, S.A (a) (c.3)
Viales de Navarra, S.A (a)
Andaluza de Señalizaciones, S.A (a)
Sitkol, S.A. (a)
PORTUGAL
Novipav Investimentos SGES, S,A
Sopovico Soc. Port.Vias de com., S.A
Maquierent Maquinas de Aluguer, S.A
Pavimental, S.A
Ferrovial Construçoes, Gestao
e Manutençao, S.A (c.1)
CHILE
Inversiones Grupisa Chile, S.A
Grupisa Chile, S.A
OTHER
Parent Company
Ownership
Holding
Location
Attributed
Reserves
Result
Ferrovial Servicios, S.A (1)
Eurolimp, S.A (ii)
Grupisa Infraestructuras, S.A
99.00
99.97
99.00
97.00
100.00
100.00
100.00
100.00
99.00
8-792
17-738
293
40
1-705
189
532
627
4-831
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Ávila
Navarra
Málaga
Madrid
10,720
19
2,875
4
-8
1,223
294
240
339
-822
6,544
-1,368
-3,858
-115
-11
2,407
14
391
735
141
Grupisa Infraestructuras, S.A (iii)
Novipav
Novipav (iv)
Novipav (v)
75.00
100.00
20.00
1.35
6,906
10,232
57
5
Portugal
Portugal
Portugal
Portugal
184
-299
90
24
-42
-633
-44
4
Ferrovial Servicios, S.A (i)
97.50
362
Portugal
254
106
Grupisa Infraestructuras, S.A (vi)
Inversiones Grupisa Chile, S.A
99.53
60.00
0
0
Chile
Chile
-785
-127
-145
14,352
3,999
TOTAL
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Consolidation
The remaining 2.5% owned by Grupo Ferrovial, S.A
2.97% of the remainder owned by Ferrovial Servicios,S.A and 0.03% by Can am, S.A.
The remaining 25% through Seguridad Vial, S.A
The remaining 80% ownded by Sopovico for a net cost of 197
The remaining 98.65% owned by Sopovico with a net cost of 395
Remainder owned by Seguridad Vial, S.A
TELECOMMUNICATIONS
COMPANIES
SPAIN
Ferrovial Telecomunicaciones, S.A.
Parent Company
Ownership
99.00
TOTAL
(1)
(2)
(3)
(a)
(b)
(c.1)
(c.2)
(c.3)
(c.4)
(c.5)
(c.6)
Holding
34,064
Location
Madrid
Consolidation
Attributed
Reserves
Result
26,106
-7,038
26,106
-7,038
The remaining percentage owned by Can-am, S.A
The remaining percentage owned by Tecpresa, S.A
The remaining percentage owned by Ferrovial Agromán Chile, S.A
Companies included in consolidated tax Group
All the companies' financial statements are as of 12/31/02 except those specified in this Note
Deloitte&Touche
Price Waterhouse Coopers
BDO Audiberia
KPMG
Ernst&Young
Other auditors
163
EXHIBIT IV
ASSOCIATED COMPANIES
CONSTRUCTION
COMPANIES
SPAIN
Getxo Kaia
Build2Edifica, S.A
Bocagua, S.A
CHILE
Ruta5, tramoTalca Chillán, S.A
POLAND
Budimex Trojmiasto Sp z.o.o.
Autostradi Poludnie, S.A
Ilbau-Budimex
ZRE Kraków Sp z.o.o
PW Hepamos Sp z.o.o.
PPHU Promos Sp z.o.o.
Montin S.A
OTHER
Parent Company
Ownership
Holding
Location
Ferrovial Agromán, S.A
Ferrovial Agromán, S.A
Cadagua, S.A
18,75
15,48
49,00
0
120
0
Delta Ferrovial Ltda.
13,14
2.105
Chile
Budimex, S.A
Budimex, S.A
Budimex, S.A
Budimex Dromex, S.A
Budimex Dromex, S.A
Budimex Dromex, S.A
Mk Nieruchomosci, Sp z.o.o.
100,00
37,50
40,00
26,61
23,00
25,53
81,90
501
1.428
251
380
154
170
956
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Consolidation
Attributed
Reserves
Result
Bilbao
Madrid
Canarias
-242
TOTAL
0
-242
INFRASTRUCTURE
COMPANIES
Parent Company
Ownership
Holding
Location
Consolidation
Attributed
Reserves
Result
SPAIN
Europistas, C.E.S.A
Cintra Concesiones de Intraestructuras
de Transportes, S.A (c.1)
Túneles de Artxanda, S.A (c.1)
Cintra Concesiones de Intraestructuras
de Transportes, S.A (i)
Inversora de Autopista del Sur, S.L (c.1)
Europistas, C.E.S.A
Autopista del Sol, C.E.S.A (c.1)
Europistas, C.E.S.A
Aparcamientos Urbanos de Sevilla, S.A
Cintra Aparcamientos S.A (ii)
Estacionamientos Guipuzcoanos S.A
Cintra Aparcamientos S.A
Sociedad Municipal de Aparcamientos y Servicios
Estacionamientos y Servicios Extremeños, S.A
Infoser Estacionamientos A.I.E.
Dornier, S.A
Estacionamientos Urbanos de León, S.A
Dornier, S.A
32.48
38,278
Madrid
30.00
25.00
10.00
16.75
42.89
24.50
25.00
33.33
43.00
8,136
15,846
14,216
1,280
5,363
3,757
90
60
452
Bilbao
Madrid
Madrid
Sevilla
San Sebastián
Málaga
Badajoz
Madrid
León
MEXICO
Inversiones y Técnicas Aeropuertos (c.2)
Ferrovial Aeropuertos, S.A
24.50
51,360
CHILE
Talca-Chillán, sociedad conceionaria S.A
Cintra Chile Ltda. (iii)
43.42
Ferrovial Sydney Airport Investment Trust
Southern Cross Airports Corporation Holding
19.60
100.00
Southern Cross Airports
100.00
AUSTRALIA
Southern Cross Airports Corporation
Holding (c.1)
Southern Cross Airports Corporation (c.1)
Sydney Airport Corporation Ltd. (c.1)
Corporation Holding
TOTAL
(i)
(ii)
(iii)
164
Further 20% owned by Europistas, C.E.S.A
Further 8.5% owned by Dornier
Constructora Delta Ferrovial Limitada owns 13.1%, and Ferrovial Agromán E.C. 0.07%
Annual Report 2002
9,376
6,601
-7
-75
-123
0
-298
0
0
0
-4
437
255
0
-19
220
Mexico
10,164
-263
20,053
Chile
-2,437
-478
224,856
Sydney
Sydney
Sydney
-4,690
16,675
1,984
(Data in thousands of Euros)
REAL ESTATE
COMPANIES
Parent Company
Ownership
Holding
Location
Consolidation
Attributed
Reserves
Result
SPAIN
Bendijar, S.L (c.1)
Recoletos 7-9, S.L
FGLG Omega 2, S.L (c.1)
FGLG Omega 6,S.L (c.1)
Recoletos 5, S.L
F.L.G Omega B.V
MSF Madrid Holding B.V
F.L.G Omega B.V
F.L.G Omega B.V
F.L.G Omega B.V
F.L.G Omega B.V
F.L.G Omega B.V
F.L.G Omega B.V
F.L.G Omega B.V
50.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
793
10
1,237
919
1,190
1,190
919
1,237
1,249
169
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
-43
0
0
0
0
0
0
0
0
-541
0
0
0
0
0
0
0
0
0
0
THE NETHERLANDS
F.L.G Omega B.V
MSF Lista 22, B.V
Ferrovial Holding Holland B.V.
Ferrovial Holding Holland B.V.
50.00
100.00
25.00
9,868
332
2,102
The Netherlands
The Netherlands
The Netherlands
0
0
-8,480
0
0
7,197
40.00
50.00
27.4
44,515
Portugal
Porttugal
0
-10,966
8
157
Habitaria, S.A
37.37
1,012
Chile
-20,030
7,226
PORTUGAL
Promovial, Promoçao Inmobilaria Ltda.
Lusivial Promoçao e Gestao Inmobiliaria, S.A (c.1)
CHILE
Inmobiliaria Urbecentro Dos S.A (c.5)
TOTAL
-136
165
SERVICES
COMPANIES
SPAIN
Asoc. Estudio Tecnologías
Equipamientos de Carreteras, S.A
Necrópolis de Valladolid (c.4)
CHILE
Grupisa Chile, S.A
Parent Company
Ownership
Holding
Location
Grupisa, S.A
Sitkol, S.A
22.16
49.00
60
3,064
Madrid
Valladolid
Ferrovial Servicios, S.A
9.00
0
Chile
TOTAL
Consolidation
Attributed
Reserves
Result
14
-88
194
-74
194
TELECOMMUNICATIONS
COMPANIES
Grupo Corporativo ONO, S.A
Parent Company
Ferrovial Telecomunicaciones
Ownership
10.41
TOTAL
(1)
(2)
(3)
(a)
(b)
(c.1)
(c.2)
(c.3)
(c.4)
(c.5)
(c.6)
166
The remaining percentage owned by Can-am, S.A
The remaining percentage owned by Tecpresa, S.A
The remaining percentage owned by Ferrovial Agromán Chile, S.A
Companies included in consolidated tax Group
All the companies' financial statements are as of 12/31/02 except those specified in this Note
Deloitte&Touche
Price Waterhouse Coopers
BDO Audiberia
KPMG
Ernst&Young
Other Auditors
Annual Report 2002
Holding
80,917
Location
Consolidation
Attributed
Reserves
Result
Madrid
0
0
Auditors’ Report
167
Consolidated Statements of Income
(millions of euros)
2002
2001
2000
1999
1998(1)
1997
1996
1995
1994
NET REVENUES
5,040.2
4,240.0
3,597.6
2,645.0
2,383.0
1,940.0
1,593.0
1,191.0
810.6
Other revenues
40.6
53.8
38.0
100.0
103.0
20.0
67.0
60.0
37.9
Total operating revenues
5,080.8
4,293.8
3,635.6
2,745.0
2,486.0
1,960.0
1,660.0
1,251.0
848.5
Outside and operating expenses
3,766.2
3,208.4
2,806.0
2,074.9
1,906.5
1,516.3
1,245.4
972.7
636.6
Personnel expenses
663.1
543.9
469.3
391.0
375.0
317.0
270.0
222.0
156.6
Provisions and depreciation and amortization
166.5
152.5
89.1
85.0
81.0
75.0
103.0
35.0
22.5
4,595.8
3,904.8
3,364.4
2,550.9
2,362.5
1,908.3
1,618.4
1,229.7
815.7
NET OPERATING INCOME
485.0
388.9
271.2
194.5
122.3
52.4
42.6
22.3
32.8
Financial result
-24.7
-65.6
-8.6
7.8
-19.7
17.7
14.6
12.9
11.7
12.4
10.5
11.8
7.9
6.1
2.8
7.4
3.9
-1.2
Amortization of goodwill in consolidation
-24.0
-10.2
-8.2
-3.0
-2.8
-25.7
-3.1
448.7
323.7
266.3
207.3
106.0
39.3
35.4
43.3
Total operating expenses
Share in income of equity-accounted affiliates
Extraordinary result
235.6
25.0
-29.8
-12.2
7.0
26.3
20.4
-7.5
-18.0
INCOME BEFORE TAXES
684.3
348.7
236.4
194.9
113.0
99.3
59.8
27.9
25.4
-207.3
-112.0
-56.8
-66.1
-22.1
-27.5
-10.0
-10.7
-4.8
Minority shareholders
-21.2
-18.4
-20.4
-17.5
-5.4
-1.0
0.3
1.0
-0.1
ATTRIBUTABLE NET INCOME
455.8
218.3
159.2
111.7
85.5
71.1
50.3
18.7
20.7
Company tax
168
72.9
Annual Report 2002
Consolidated Balance Sheet
(millions of euros)
ASSETS
2002
Due from shareholders for uncalled capital
FIXED ASSETS
Start-up expenses
Intangible assets
Tangible fixed assets
Long-term financial investments
Shares of the controlling company held for long term
2001
2000
9
12
5
5,754
5,781
4,864
1999
4,017
1998(1)
1,402
1997
1996
1995
1994
538
609
428
371
9
6
9
10
1
1
1
2
148
177
190
175
167
27
17
15
10
4,878
4,907
3,910
3,316
891
98
145
151
91
671
624
691
514
341
410
444
259
269
2
47
68
64
2
2
2
2
1
GOODWILL IN CONSOLIDATION
356
222
156
55
58
---
---
28
DEFERRED EXPENSES
875
753
795
428
28
10
1
1
4,272
4,213
3,000
2,418
2,107
1,670
1,249
1,113
759
CURRENT ASSETS
Inventories
1,214
1,022
737
463
365
262
247
214
164
Accounts receivable
1,982
1,879
1,622
1,538
1,254
1,006
853
695
414
Cash and cash equivalents
1,014
1,252
621
388
472
392
142
197
180
63
60
20
29
16
10
7
7
1
11,267
10,981
8,821
6,918
3,595
2,218
1,859
1,570
1,130
1,495
1,198
1,050
928
589
522
456
352
338
774
425
400
311
68
12
6
4
1
Accrual accounts
TOTAL ASSETS
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS´ EQUITY
MINORITY INTERESTS
NEGATIVE DIFFERENCE IN CONSOLIDATION
69
52
54
39
25
6
8
8
7
289
105
87
54
31
28
35
16
13
PROVISIONS FOR CONTINGENCIES AND EXPENSES 4,817
5,641
4,417
3,142
674
83
103
23
10
Long-term debt
1,543
1,919
1,583
1,503
560
20
13
8
8
3,274
3,722
2,817
1,635
83
7
17
14
2
0
1
18
4
31
56
73
1
0
3,814
3,552
2,809
2,444
2,208
1,567
1,251
1,167
762
353
258
270
202
292
30
20
22
23
3,272
3,131
2,438
2,110
1,824
1,453
1,157
1,086
708
Other current liabilities
150
91
67
85
82
74
66
53
27
39
72
34
47
10
10
8
6
5
9
8
4
11,267
10,981
8,821
6,918
3,595
2,218
1,859
1,570
1,130
DEFERRED REVENUES
CURRENT LIABILITIES
Accrual accounts
TOTAL LIABILITIES
169
172
Coinciding with its stock market debut in May 1999, Ferrovial approved a Board of Directors Regulation and an Internal Code of
Conduct in matters relating to the Securities Markets, which contain the regulation of corporate governance, the principles of the
Board of Directors actions, organization and functioning, the rules aimed at ensuring a high level of market transparency, and rules
of conduct that ensure that there is no interference in the company’s share performance.The ultimate goal is to align valueoriented management with respect for the ethical values commonly established in the Spanish market.
That Regulation duly conforms to the recommendations of the Code of Good Governance.
At the time of issuing this report, there were recent initiatives in Spain and elsewhere on the matter ; specifically, the European
Union has introduced new principles and elaborated upon existing corporate governance principles.
In particular, Law 44/2002 of Measures to Reform the Financial System (the “Finance Law”) established rules and the “Report by
the special commission to foster transparency and security in the markets and in listed companies” dated 8 January 2003 (the
“Aldama Report”) was published. Ferrovial has started to review its internal corporate governance regulation, focusing on
examining its suitability with respect to the rules established in the Finance Law and the recommendations of those instruments,
especially the Aldama Report, in order to fully comply with the Law and conform fully to those recommendations as soon as
possible.
Nevertheless, Ferrovial has already added new practices based on the recommendations of the Aldama Report which, in addition
to those previously established by the Group, means that, on the issue date of this report, it has achieved a high degree of
conformity.
The “Corporate Governance” section of Ferrovial’s web site has abundant information on the matter: composition and structure
of the Board of Directors, Executive Committee and Advisory Committees, the full text of the Bylaws, of the Board of Directors
Regulation and of the Internal Code of Conduct in matters relating to the Securities Markets, information about the
Shareholders’ Meetings of previous years and specifically the Shareholders’ Meeting in 2003, with all the content pertinent to the
Meeting.
The information sent to the CNMV for the second half of 2002 and the notes to the financial statements themselves include data
about related party transactions, as required by the Law of Measures to Reform the Financial System.
This Corporate Governance report and the notes to the financial statements contain individualized information on the
remuneration paid to directors as such, and the aggregate amounts of the different items that comprise the entire remuneration
of the members of the Group’s Board of Directors, including those of the executive directors.
172
Annual Report 2002
The Management Report drafted by the Board of Directors contains a list of the Audit and Control Committee’s activities.The
2002 individual and consolidated financial statements were certified by the Chairman, CEO and CFO.
The other factors of the Aldama Report which we have not yet decided to apply and those that are awaiting implementation of
the Law of Measures to Reform the Financial System will be analyzed in the coming months, so that the corresponding proposals
will be submitted to the Board of Directors and the decisions will be included in the text of the internal provisions on Corporate
Governance.The recommendation to approve a Shareholders’ Meeting Regulation will also be analyzed and a decision will be
made.
The 2002 corporate governance report is divided into seven main chapters, each with several sections:
1. Function and composition of the Board of Directors
2. Executive Committee and Advisory Committees
3.Working of the Board of Directors
4. Directors’ remuneration
5. Directors’ duties
6.Transparency in relations with shareholders, markets and auditors
7. Internal Code of Conduct
1. FUNCTIONS AND COMPOSITION OF THE BOARD OF DIRECTORS
1.1. Functions of the Board of Directors
The Board of Directors Regulation stipulates that the main function of the Board is supervisory, i.e. it:
- Directs company policy.
- Oversees management.
- Evaluates executive performance.
- Adopts the company’s most important decisions.
173
Without prejudice to the powers delegated to it, the Board reserves, directly or through its Committees, the sole power over
number of matters, including:
- Appointment, remuneration and, where appropriate, removal of senior managers.
- Approval and monitoring of the strategies established for the Company’s development.
- Control and evaluation of the executives' conduct of business.
- Incorporation of new companies and acquisitions or sales of stakes in existing companies, where the latter imply the gain or
loss of a majority stake, exceed certain percentages of ownership or represent the commencement or abandonment of
business lines.
- Mergers, spin-offs or concentrations involving the Company or any of its direct investees.
- Investment, divestment, financing or guarantee transactions involving substantial Group assets or for amounts above specific
thresholds.
- Policy of disclosure to shareholders, markets and public opinion.
1.2. Qualitative composition of the Board
The Bylaws and the Regulation state that the Board of Directors shall strive to ensure that external or non-executive Directors
represent a broad majority of the Board.The Board shall also strive to ensure that the majority group of external directors
includes owners of significant stable stakes in the Company or their representatives (Domanial Directors) and persons of
acknowledged prestige who are not related to the executive team or the core shareholders (Independent Directors).
In 2002, the Board of Directors consisted of eleven members (between the minimum of six and maximum of fifteen permitted
by the Bylaws), three of whom were executive and the other eight non-executive.
One of the executive directors and three of the non-executive directors represent the majority shareholders.The Board of
Directors considers that four of the other five non-executive directors are independent.
The Board of Directors of Grupo Ferrovial, S.A. currently has the following composition:
Chairman and CEO
Executive and domanial
Vice-Chairmen
(1)
External
External independent
CEO
(1)
174
Executive until 25 January 2002
Annual Report 2002
Executive
Directors
External domanial
PROFESA INVESTMENTS, B.V.,
represented by María del Pino y Calvo-Sotelo
External domanial
PORTMAN BAELA, S.L.,
represented by Eduardo Trueba Cortés
External domanial
Gabriele Burgio
Director and Secretary
Executive
Santiago Bergareche Busquet,Vice-Chairman of the Board of Directors, who is currently considered as an external director, was
the CEO of Grupo Ferrovial between February 1999 and January 2002, when he resigned from that office; he continues as
director and Vice-Chairman of the Board.
Two independent directors also resigned and were replaced by Joaquín Ayuso García (the current CEO) and Gabriele Burgio (a
new independent director).
1.3. Officers of the Board of Directors
- Rafael del Pino y Calvo-Sotelo has been the Company’s CEO since 1992. On 29 June 2000, the Board of Directors resolved
to appoint Rafael del Pino y Calvo-Sotelo as Chairman of the Board of Directors in addition to his position as CEO of the
Company.
The company appointed another CEO in February 1999.
- The Vice-Chairmen of the Board of Directors are not executives.
- In July 2000, the Board created an Executive Committee in accordance with the Bylaws, to which it expressly delegated all
the powers that correspond to the Board of Directors, except those undelegable by law and the Bylaws.
- The Secretary to the Board is also a director. His mission is to supervise the formal and material legality of the Board of
Directors’ actions and to ensure that the procedures and rules of governance are respected and regularly revised. His
functions include:
- Assisting the Chairman in his tasks.
- Ensuring the good functioning of the Board of Directors.
- Offering the directors any advice and information that may be necessary.
- Conserving the corporate documentation.
- Duly entering the contents of the Board of Directors’ meetings in the minutes.
- Certifying the Board of Directors’ resolutions.
- Ensuring that the procedures and rules of governance are respected and regularly revised.
175
2. EXECUTIVE COMMITTEE AND ADVISORY COMMITTEES
2.1. Executive Committee
On 28 July 2000, the Board of Directors resolved to create an Executive Committee comprising six members.
The Executive Committee currently comprises the following directors:
EXECUTIVE
Domanial
EXTERNAL
Santiago Bergareche Busquet (1)
Independent
Domanial
The Executive Committee is chaired by the Chairman of the Board of Directors and the Committee’s Secretary is the Secretary
of the Board of Directors.
The rules governing the Executive Committee are based on the same principles governing the Board of Directors and are
contained in the corresponding Regulation.
In the Board of Directors meeting immediately subsequent to a meeting of the Executive Committee, the Board members are
notified of the resolutions approved at the Executive Committee meeting and are supplied with a copy of the corresponding
minutes.
The Executive Committee held nine meetings in 2002.
2.2. Advisory Committees
The Advisory Committees to the Board of Directors are the Audit and Control Committee and the Nomination and
Remuneration Committee, which were created in 1999.
These Committees comprise external directors only, in accordance with the Regulation, and have the powers of information,
advice, supervision and proposal in the matters of their respective competence.
The Committees’ powers of proposal do not preclude the possibility of the Board deciding on such matters on its own initiative,
provided that it duly consults the corresponding Committee.
(1) Executive until 25 January 2002
176
Annual Report 2002
2.2.1. Audit and Control Committee
The current composition of the Audit and Control Committee is as follows:
Chairman
PROFESA INVESTMENTS, B.V.,
represented by María del Pino y Calvo-Sotelo
Gabriele Burgio
The main functions of the Audit and Control Committee are as follows:
- Proposing the appointment, conditions of engagement, extent of professional mandate and, where appropriate, revocation
or non-renewal of the auditor.
- Supervising compliance with the legal requirements and the correct application of generally accepted accounting principles.
- Liaising between the Board of Directors and external auditors, and evaluating the results of each audit.
- Supervising the information which the Board of Directors must approve and include in its annual public documentation.
- Assisting the Board in its mission of ensuring the correctness and reliability of the periodical financial information.
The Audit and Control Committee held four meetings in 2002. One of its main activities was to commence a process to select
the audit firm to review the 2003 financial statements of the company and its consolidated group; this matter will be submitted to
the next Shareholders’ Meeting. In this process, the suitability and incompatibility requirements established by the current Audit
Law, as amended by the Finance Law, were complied with.
One of the novelties regarding this matter in the Finance Law is that listed companies must include rules in their bylaws for the
creation, working and powers of an Audit Committee.
In accordance with this legal provision, an Audit Committee regulation that is very similar to the one contained in the Grupo
Ferrovial Board Regulation since 1999 will be submitted to the Shareholders’ Meeting.
The proposal envisages, for example, that all members of the Audit and Control Committee be external and that its Chairman be
an independent director.
177
2.2.2. Nomination and Remuneration Committee
The current composition of the Nomination and Remuneration Committee is as follows:
Chairman
The main functions of the Nomination and Remuneration Committee are as follows:
- Formulating and reviewing the criteria to be followed for the composition of the Board of Directors and the selection of
candidates.
- Informing the proposals for the appointment of directors.
- Proposing the members of each Committee.
- Informing the system and amount of annual remuneration for directors.
- Informing the appointment or dismissal of the executives who report directly to the CEO.
- Informing the remuneration system for senior management.
The Nomination and Remuneration Committee held seven meetings in 2002.
3. WORKING OF THE BOARD OF DIRECTORS
3.1. Board meetings
The Regulation establishes that the Board shall meet normally on a monthly basis or at the Chairperson’s initiative whenever the
latter sees fit in the interests of the good working of the Company, or whenever at least two Board members so request.
The Regulation also establishes the obligation to draft an annual schedule of ordinary meetings and envisages at least one
meeting per year to evaluate the functioning and quality of its work.
The Chairperson is charged with organizing the debate in such a way as to encourage the participation of all the directors in the
Board’s deliberations.
In 2002, all the meetings were convened in writing with due notice and remittal of the necessary documentation about the items
on the agenda.
It is considered that the information supplied to the Board of Directors in 2002 was appropriate and sufficient for it to familiarize
itself with the matters for deliberation; senior executives frequently attended Board meetings to present the matters in their
areas of responsibility.
The Board of Directors held eleven meetings in 2002.
178
Annual Report 2002
3.2. Appointment and re-appointment of Directors
The Regulation establishes a procedure for the appointment and re-appointment of directors, which commences with a proposal
by the Nomination and Remuneration Committee.
Candidates must be persons of acknowledged ability, competence and experience, and the appointment of independent
directors, which may only take place after a formal selection process, must be extremely rigorous.
The Board of Directors cannot propose or designate for the post of independent director a person:
- who occupies a management position in the Company.
- with family ties (up to third degree of kinship by blood or second degree by marriage) or linked in any other way of similar
significance to the executive directors or any other of the Company’s senior executives.
In 2002, a CEO and an independent director were appointed in accordance with these rules, at the proposal of the Nomination
and Remuneration Committee.
3.3. Resignation of Directors
Directors must resign from office upon completion of the period for which they were appointed and when so decided by the
Shareholders’ Meeting or the Board of Directors by virtue of the powers conferred upon them by law or the Bylaws.
The Regulation also establishes the reasons for which a director must tender his/her resignation to the Board of Directors.
- In the case of executive directors, whenever the Board of Directors sees fit.
- In the case of domanial directors, upon disposal of their holding in the Company.
- In the event of infringement of any of the incompatibility regulations or legal prohibitions.
- Upon request by the Board of Directors due to breach of the director’s obligations.
- When the director’s position on the Board of Directors may jeopardize the Company’s interests.
- Upon reaching the age of 70.The Chairperson and Vice-Chairperson (if executives), the CEO and Secretary of the Board
must resign at 65, but may continue as directors and hold the office of Chairperson or Vice-Chairperson if they are not
executives.
3.4. Information to Directors
The Company has established the appropriate channels to enable the directors to access the necessary information concerning
the Company and its Spanish and foreign subsidiaries.
The Regulation includes the power to freely and directly request information from all senior executives that report directly to the
CEO.Through the Chairperson,Vice-Chairperson, CEO or Secretary to the Board, directors may request such information as
they may reasonably require.
These persons must provide the information requested either directly or via the appropriate interlocutors. Directors may even
request the services, at the Company's expense, of legal, accounting, financial or other expert advisors.
179
4. DIRECTORS’ REMUNERATION
4.1. Applicable provisions
Article 25 of the Company Bylaws regulates this matter and its content is reproduced in article 26 of the Board of Directors
Regulation.
It establishes that the members of the Board of Directors “shall receive an amount equivalent to 3% of the year’s consolidated
results attributable to the Company and that the Board of Directors may decide not to apply this entire amount, in which case
directors do not accrue any rights in respect of the amount not applied”.
On 22 March 2002, the Shareholders’ Meeting approved the resolution to include in the bylaws the possibility of establishing
directors’ remuneration formulae consisting of delivery of shares or stock options or pegged to the share price, within the
aforementioned limits.
In accordance with that resolution, the Shareholders’ Meeting resolved that a part of directors’ remuneration be pegged to the
share price in accordance with the terms set out below.
4.2. Remuneration system in 2002
Within the limits established by the Bylaws and the Board Regulation, in 2002 the Company approved a remuneration structure
applicable to all the directors, with the following items:
- Per diems for attending Board of Directors, Executive Committee and Advisory Committee meetings.
- Variable remuneration based on the year’s earnings.
- Variable remuneration pegged to share price changes in the year.
4.2.1. Per diems for attendance
In the first quarter of 2002, the per diems for attendance applicable to each director, in accordance with the system originated in
prior years, was established at 1,803 euros gross for each Board of Directors meeting and at 1,502 euros gross for any of its
Committees.
Those amounts were changed, with effect from 1 April 2002, to 3,500 euros gross for attending the Board of Directors meeting
and 1,500 euros gross for attending the Executive and Advisory Committee meetings.
4.2.2. Earnings-based variable remuneration
This remuneration is quantified by applying the year-on-year increase in the group’s consolidated earnings in 2002 to 50% of the
total per diems1 for attending Board of Directors meetings.
This variable remuneration will be payable in 2003, once the 2002 consolidated results are approved by the Shareholders’
Meeting on 21 March 2003.
1
180
Per diems accrued to the Board amounted to 33,409.12 euros in 2002.
Annual Report 2002
Consolidated earnings increased by 18.1% year-on-year in 2002, excluding the extraordinary gains on the sale of 40% of Cintra.
Those are the consolidated earnings disclosed in the financial statements drafted by the Board of Directors on 26 February 2003;
consequently, based on his/her period of service on the Board in 2002, each director will receive annual remuneration of
19,736.43 euros.
4.2.3. Share-based variable remuneration
This is quantified by applying, to the 20,000 euros set for 2002, the increase in share price found by comparing the weighted
average prices in December 2001 and 2002.
This remuneration will also be received in 2003 and the applicable parameters have already been published.The weighted
average share price was 20.8 euros in December 2001 and 24.92 euros in December 2002, i.e. a 19.8% increase in 2002.
Consequently, each director will receive 23,960 euros this year, based on his/her period of service on the Board of Directors in
2002.
4.2.4. Remuneration of the First Vice-Chairperson and the Chairperson of the Advisory Committees
The First Vice-Chairperson receives an additional 150,000 euros per year.
The Chairpersons of the Audit and Control Committee and the Nomination and Remuneration Committee receive 6,000 euros
each per year.
4.3. Remuneration disclosed in the 2002 financial statements
In prior years, the company’s financial statements explained the Board of Directors remuneration in accordance with the
calculation method in force in the reporting year.
In order to improve the transparency and currency of that information, in 2002 a system was established based on the following
principles:
- The Board of Directors remuneration in 2002 is reported on an accrual basis, so it contains the remuneration allocated for
work performed between 1 January and 31 December 2002, even if some of it is settled and paid in 2003.
- The various remuneration items paid to each director by virtue of that position are detailed.
- Information about the remuneration of the Group’s senior management team is disclosed on an aggregated basis.
- Remuneration for executive directors other than that received in their capacity as directors is included together with the
remuneration for senior management and it is broken down by item, number of beneficiaries and positions.
181
Consequently, the remuneration accrued by the Company’s Board of Directors in 2002 is summarized as follows:
- The directors accrued an aggregate 1,186,0002 euros2 in bylaw mandated remuneration, broken down as follows:
- Per diems for attending Board of Directors, Executive Committee and Advisory Committee meetings: 557,960
euros.
- Variable remuneration based on the year’s earnings: 217,100 euros.
- Variable remuneration based on the share price: 263,559 euros.
- Other items including the remuneration established for the First Vice-Chairperson of the Board of Directors and
the Chairpersons of the Advisory Committees: 148,000 euros.
The amounts broken down by each member are as follows:
Board,Executive
Earnings-based
Committee and Advisory
variable
Committee per diems remuneration
Share-based
variable
remuneration
Other
items
Total
52,921.77
19,736.43
23,960.00
60,421.77
19,736.43
23,960.00
63,426.83
19,736.43
23,960.00
107,123.26
3
41,803.04
16,447.02
19,966.66
78,216.72
50,924.30
19,736.43
23,960.00
94,620.73
Profesa Investments BV
41,921.77
19,736.43
23,960.00
85,618.20
Portman Baela SL
39,419.24
19,736.43
23,960.00
83,115.67
44,924.30
19,736.43
23,960.00
4,000.00
92,620.73
48,419.24
19,736.43
23,960.00
3,000.00
95,115.67
21,000.00
11,512.91
13,976.66
46,489.57
52,921.77
19,736.43
23,960.00
96,618.20
22,426.83
6,578.81
7,986.66
2,000.00
38,992.30
17,429.36
4,934.10
5,990.00
1,500.00
29,853.46
557,960.22
217,100.71
263,559.98
148,000.00
1,186,620.91
4
Gabriele Burgio
5
6
Manuel Azpilicueta
7
Javier Vega de Seoane
8
TOTAL
96,618.20
137,500.00
241,618.20
- The executive and external directors of Grupo Ferrovial, S.A. who are also members of the governing bodies of other Group,
multi-group or associated undertaking received a combined total of 186,800 euros.
182
2
If the cash payment system had been applied in 2002, the Board of Directors remuneration according to the bylaws would have totaled 1,123,890 euros.
3
He served on the Board for 10 months in 2002.
4
Chairman of the Nomination and Remuneration Committee.
5
Chairman of the Audit and Control Committee.
6
He served on the Board for 7 months in 2002.
7
Chairman of the Nomination and Remuneration Committee until he resigned. He served on the Board for 4 months in 2002.
8
Chairman of the Audit and Control Committee until he resigned. He served on the Board for 3 months in 2002.
Annual Report 2002
4.4. Remuneration of the Board members with executive functions9, including senior management
The Chairman of the Board of Directors, the CEO, the Director-Secretary, and the senior executive of the Company immediately
answerable to the Chairman or CEO (of whom there are nine) accrued the following remuneration in 2002:
- Salary in cash:
3.014,900 euros
- Salary in kind:
97,600 euros
- Incentives for meeting objectives:
2,922,300 euros
- Remuneration for members of governing bodies of other Group, multi-group or
associated undertakings (excluiding executive directors):
157,300 euros
- Indemnities and other compensation:
276,400 euros
Share-based remuneration:
A share-based remuneration system was established for the company’s senior management, including the members of the Board
of Directors with executive functions. On the issue date of this report, executive directors had been allotted the rights
corresponding to 624,204 shares and the rest of senior management the rights corresponding to 797,292 shares.
This system was established due to the resolutions adopted by the Shareholders’ Meeting on 31 March 2000 and 31 March 2001.
The Comisión Nacional del Mercado de Valores was duly informed of the approval of the system and the rights assigned to each
beneficiary.
The maximum number of shares for the purposes of calculating the overall directors’ remuneration authorized by the
Shareholders’ Meeting is 1,702,647, i.e. 1.213% of capital stock.
This system consists of granting the right to receive the amount by which the share price appreciates between the date the right
was granted and the date it was exercised, which must be between three and six years from the date the right was granted.This
right and the specific amount to be received is conditional upon obtaining a minimum rate of return on consolidated equity.
To date no amount has been paid under this system.
The remuneration is payable to the persons with the following positions:
- Chairperson of the Board of Directors
- CEO (*)
- Director-Secretary and General Secretary
- CFO
- General Manager of Human Resources
- General Manager of Construction (*)
- General Manager of Infrastructure
- General Manager of Real Estate (*)
- General Manager of Services
- External Relations and Communications Manager
- General Manager of Telecommunications
- Audit Manager
9
The former CEO resigned in January 2002 and the new CEO was appointed in March 2002.
(*) There were changes in these positions in 2002.
183
5. DIRECTORS’ DUTIES
Article 27 and subsequent articles of the Regulation contain broad rules on directors’ obligations which arise from the general
duties of diligence and loyalty.
The main duties established by the company are as follows:
- Directors must keep secret the deliberations of the Board of Directors and the Advisory Committees and must not reveal
the information to which they have had access in the discharge of their duties.This obligation shall persist even after they
cease to be directors.
- A director may not be a director of a rival company.
- Directors may not provide representation or consultancy services to competitors of Grupo Ferrovial or its subsidiaries
unless the Board of Directors approves those services following a report by the Nomination and Remuneration
Committee.
- Directors are obliged to inform the company of:
- Directorships or senior management positions they have in other companies that do not compete.
- Shares they own of the company.
- Situations that may constitute a conflict of interests with the company.
- Directors may not enter into professional or commercial transactions with the Company unless the Board of Directors
approves said transactions following consultation with the Nomination and Remuneration Committee.
- Directors must refrain from attending meetings or intervening in deliberations which affect matters in which they have a
personal interest.
6. TRANSPARENCY IN RELATIONS WITH SHAREHOLDERS, MARKETS AND
AUDITORS
6.1. Transactions with significant shareholders
The Board Regulation contains provisions relating to significant shareholders, including the need for the Board of Directors to
approve material transactions by the Company with significant shareholders after consultation with the Nomination and
Remuneration Committee.
In compliance with the provisions of the Finance Law, the half-yearly information that the company provides to the markets must
contain the amount of the transactions performed with related parties, including significant shareholders, directors and senior
executives, in the second half of 2002.
That information is also included in the 2002 notes to the financial statements, which quantifies the transactions with related
parties in that year.
Those transactions were not significant and they were all performed under arm’s-length conditions.
184
Annual Report 2002
6.2. Information to markets
The Board of Directors has established the necessary mechanisms for informing shareholders, investors and the market in
general about the ownership structure, the corporate governance rules and the own share policy.
In addition to the extensive information on the company’s web site about share performance, significant events, communiqués to
the CNMV, periodic public disclosures and analysts’ reports, in February 2003 the Group posted extensive information about its
corporate governance, in line with the latest recommendations on the matter, including:
A. Corporate administration structure:
- Functions and composition of the Board of Directors, Executive Committee and Advisory Committees.
- Directors’ shareholdings.
- The company’s organization rules: the Bylaws, the Board Regulation, the Internal Code of Conduct, and the 2000 and
2001 annual corporate governance reports.
B. Shareholders’ Meeting:
- Information about the 2002 Shareholders’ Meeting, including the speech by the Chairman and CEO and the
presentation.
- The notice and the documentation for shareholders in connection with the 2003 Shareholders’ Meeting: the agenda, all
the proposals, individual and consolidated financial statements, auditors’ report and Board of Directors report about
the amendment to the bylaws regarding the addition of the Audit and Control Committee regulation, and the full text
thereof.
Another new feature in 2002 was the inclusion of information about the accounting standards applicable to the company’s
business lines in order to describe the accounting of certain financial events considered to be relevant for interpreting the results
of each business division, so that the standards applicable under the current regulation and those applied by other companies in
the sector may be compared.
The Board of Directors, with the support of the Audit and Control Committee, believes that the financial information conveyed
to the markets has been drafted in accordance with the same principles, criteria and professional practices as those used for the
financial statements and that they are equally reliable.
In 2002, all the periodic information supplied to the market was first analyzed at an Audit and Control Committee meeting.
Also in 2002, the following measures were adopted to provide the market with extensive information about the company’s and
subsidiaries’ activities and conduct of business.
185
In 2002, we held over 250 meetings with analysts and institutional investors, mainly in the US, UK, Germany, Switzerland, Italy,
France, Portugal, Holland, Scandinavia and Spain.We also participated in various construction industry conferences in January,
February, September, November and December in several European cities. We televised the release of 2001 results live to
analysts in February 2002 and the Ordinary Shareholders’ Meeting in March.We also held conference calls to present quarterly
results to foreign investors on the same day they were presented in Madrid.
6.3. Relations with external auditors
In 2002, the Audit and Control Committee examined the situations which might jeopardize the independence of the external
auditors.
The fees accrued to the audit firms relating to Grupo Ferrovial and its entities, subsidiaries and investees amounted to 1.501
million euros.
The remuneration received by the external auditor amounted to 765,400 euros, i.e. 0.37% of the firm's total revenues in Spain.
The breakdown of this amount is as follows:
- 586,000 euros in audit fees (91% of the total fees paid).
- 179,000 euros in fees for other consulting services.
6.4. Financial statements
The Board fully accepts the recommendation to ensure that the accounts drafted by it and submitted to the Shareholders'
Meeting should be free of audit qualifications.To date, the company has always presented a clean auditors’ report.
6.5. Information about the company’s governance rules
This report is to provide information about the governance rules applied by Grupo Ferrovial in 2002, disclose the action
principles, basic organizational and functional rules, and the code of conduct of the Board of Directors and to explain the changes
introduced in 2002 and to date in 2003.
186
Annual Report 2002
7. INTERNAL CODE OF CONDUCT
Simultaneously with the Board Regulation, the company approved an Internal Code of Conduct in matters relating to the
Securities Markets, applicable to directors and managers of Grupo Ferrovial and its main subsidiaries.
The main aspects of the code as applied in 2002 were as follows:
- Disclosure of sale and purchase of company shares. The new directors or managers appointed in 2002 received a
description of the applicable regulation, a share ownership disclosure form and the text of the Internal Code of Conduct.
At 2002 year-end, apart from the directors, 66 managers were affected by this regulation; they own a total of 41,324 shares,
i.e. 0.029% of capital.
- Restricted information. Persons subject to this Internal Code of Conduct in possession of any type of restricted
information must not:
- Trade with company shares.
- Divulge said information to third parties.
- Recommend that third parties buy or sell shares.
- Significant events. In 2002, Ferrovial continued with its policy of informing the markets about events, decisions and
resolutions that affect the company and group, such as significant investments and divestments, directors’ appointments or
resignations, Shareholders’ Meeting resolutions, dividend payments and strategic agreements with other groups.
- Own shares. Grupo Ferrovial, S.A. and its subsidiaries owned 4,478,115 own shares (3.20% of capital) at the beginning of
2002 and 3,104,917 own shares (2.22% of capital) at 2002 year-end.
The Internal Code of Conduct prohibits the Company from trading with own shares during the fifteen-day period prior to the
publication of company results.
In 2003, the Company will study several aspects of the Internal Code of Conduct in order to add principles as a result of new
legislation applicable in matters such as obligations while studying or negotiating significant transactions, the use of inside
information and the dissemination of significant information.
Madrid, 26 February 2003
187
Environment
Quality
- Labor relations
- Community Involvement
190
206
208
209
218
Environment
Ferrovial’s environmental policy and strategy
Our evolving commitment
Ferrovial made its first step towards sustainability in 1996, when the Strategic Quality Plan established that
one of its priorities was “respect for society and the environment” as a key criterion guiding its activities.
Maintaining profitability in the current situation means introducing changes in the company’s management
Innovate
production and
management
processes
systems and production processes in order to reduce
the negative effect on the environment and improve
Financial
the social impact of its activities.The idea is to obtain
RESULTS
profit via a commitment to society and to improve
environmental performance. In short, we must innovate
our production and management processes, learn to
Community
development
Environmental
performance
measure environmental and social results and transmit
them to society.
Ferrovial is moving forward in its commitment to responsibility: it has progressively integrated
environmental and social factors into its production activity in recent years. In the framework of this proactive innovative attitude, in 1997 Ferrovial was the
world’s first construction company to implement a
The world’s first
construction group
to implement an
environmental
management system
certified standards-compliant environmental management
system.
Ferrovial’s corporate strategy focuses on gradually
implementing certified ISO 14001-compliant environmental
management systems in all its main activities, since it
understands that the strict requirements of those
systems are the best guarantee that the Group can offer
its shareholders, customers, the government and society
at large about its sustainable performance.
190
Annual Report 2002
Implementation and certification of standards-compliant environmental management systems in the Group’s main activities
Company
Activity
Ferrovial Agromán
Construction
Ferroser
Maintenance and integrated service management
Ferrovial Inmobiliaria
Real estate development
Ferconsa
Construction
Cadagua
Water treatment
Tecpresa
Pre-stressing
Ditecpesa
Asphaltic bitumen manufacturing
Grupisa
Infrastructure maintenance
Eurolimp
Services
Certified
Being implemented
ISO 14001
Under development
Pending certification
Ferrovial maintains its commitment to be a leading innovative company in environmental matters: in 2001
it was the world’s first construction company to publish an Environmental Performance Index (EPI), which
was validated by an independent team of scientists at the King Juan Carlos University and has the support
of the Unesco Chair in Environment.
In the two years since it was launched, the EPI has proved
The Environmental
Performance Index,
validated by the
King Juan Carlos
University, is
supported by the
Unesco Chair in
Environment
to be a very effective management tool that not only
provides information about the effort put into
environmental
matters
and
the
environmental
performance of production centers, but also enables us
to draw conclusions, analyze the causes of any change,
monitor the performance of its variables and make
environmental decisions.
The EPI is also useful as a communications tool since it
transmits the results of the company’s environmental
management. Monthly and historical EPI data is displayed
and constantly updated on our web site.
Environment
191
Our environmental policy
Positive
contribution
to conservation
of natural
resources
The environment is a vital consideration to Ferrovial when defining our objectives and outlining our
activities.We intend to make a positive contribution to the conservation of our natural resources which
are of ecological, landscape, scientific, cultural and recreational interest by progressively building
environmental awareness into our actions, as well as by ensuring that we comply with current legislation
on the environment.
These principles, inculcated in all members of our staff, result in the following priorities:
- To integrate quality and environmental management systems into all our operations, activities and
services directly or indirectly connected with projects.
- To establish procedures so that we keep abreast of the most recent legal requirement and apply
them in all areas of production.
- To be aware of, and adhere to, the codes on good environmental practices currently in force in the
construction sector and those established in the future.
- To improve continuously by studying, from a technical and economic standpoint, new procedures,
measures and practices (preferably preventive) to steadily enhance our environmental
performance.
- To continue to increase the knowledge of our technical employees and managerial staff about the
environment through specialized training programs.
- To maintain internal audits as a tool for ensuring that our activities do not have an adverse effect
on the environment and guaranteeing the efficacy of the measures applied.
- To adapt our environmental policy to new requirements.
- To maintain an open dialogue with the relevant external bodies, informing them about our actions
to respect the environment.
- To participate actively in efforts made by governmental authorities to find new solutions for current
environmental concerns, and to work closely with the scientific community in order to maintain our
ability to innovate in the processes we perform and the services we provide to our customers.
192
Annual Report 2002
Results of environmental management
Environmental assessment of our production centers
Central services assess the effects of Ferrovial production centers on the environment on a continuous
basis.The assessment is conducted on-site by qualified technicians who identify and assess the impact of
the activity and the efficacy of the corrective measures being applied.
The environmental evaluation procedure is based on a comprehensive system of indicators validated by
an independent team from the King Juan Carlos University. Most of the indicators measure physical
magnitudes (volume of waste, noise levels, etc.) through the appropriate means.
This system provides objective quantified information about the Company’s environmental performance
and the results are included in the Environmental Performance Index as one of the variables used to
ascertain the Company’s environmental performance at its centers.
40
100%
35
80%
30
25
60%
20
15
The Pareto analysis
reflects the
environmental
impacts of
construction in 2002
40%
10
20%
5
0
Explosion risk
Water consumption
Alteration to fauna types
Risk of forest fire
Increase in vibration
Impact on livestock routes
Soil compacting
Atmospheric pollution (HC)
Hillside instability
Soil loss due to water erosion
Impact on historical and artistic heritage
Increase in water turbidity
Pollution due to surplus soil from digging
Occupation of public roads
Overload of sewage network
Occupation of farm/forest land
Pollution by urban waste
Alteration of river system
Direct impact on soil
Alteration of water quality
Impact on river banks
Impact on public roads
Alteration of sound levels
Atmospheric pollution (particles)
Pollution by inert waste
Direct impact on plant cover
Pollution by industrial waste
0%
Comparing the Pareto analysis of 2002 with that of previous years shows that the main environmental
impacts of the Company’s activities changed.The assessments at the centers show that industrial waste
(oils, packaging, polluted soil, etc.) is now the main impact, followed by inert waste (previously the main
impact).
Environment
193
This change is due to the fact that the impact of industrial waste increased with respect to other impacts,
such as inert waste, management of which improved considerably and whose relative weight fell with
We have implemented
a management plan
for inert waste in
buildings and for
industrial waste
respect to overall impacts.Anticipating the new regulation on inert waste management as a result of the
National Plan for Construction and Demolition Waste, Ferrovial implemented a specific inert waste
management plan in building projects to improve inert waste management and reduce its weight relative
to the overall impacts of construction activities.
In order to improve industrial waste management and, therefore, reduce its relative weight, early in 2003
Ferrovial implemented an industrial waste management plan which includes signing agreements on a
nationwide level with industrial waste managers, providing specific training to production center managers
and unifying industrial waste authorizations.
Some impacts, such as occupation of public roads, alteration of sound levels and pollution by urban waste,
Occupation of public
roads, alteration of
sound levels and
pollution by urban
waste have been
considerably reduced
have been considerably reduced.The reduction in their relative weight increased the weighting of other
impacts, such as alteration of water quality, whose impact increased slightly (see Pareto analysis).
The next figure shows the environmental impact of Ferrovial’s activities over time.The impact on plant
cover and river margins, the alteration of sound levels and pollution by urban waste are growing in
importance, evidencing the effect of ongoing improvement in some of the most significant environmental
aspects of the company’s activities.
Significant impacts
45
40
35
30
Pollution by industrial waste
25
Alteration of water quality
20
15
Impact on river banks
Direct impact on soil
10
Pollution by inert waste
194
Annual Report 2002
2002
Direct impact on plant cover
2001
0
2000
Alteration of sound levels
1999
5
Environmental Performance Index (EPI)
The EPI, validated by King Juan Carlos University and supported institutionally by the Unesco Chair in
Environment, provides objective, quantified information on the company’s environmental performance.
The EPI is essential to the effectiveness of our environmental management system (SIGMA), since it
supplies our executives with information about the real results of our environmental actions at all times
by means of clear, concise graphs.This means that we can also keep shareholders, customers and the
Conveys the
company’s
environmental
performance
general public informed about our environmental actions.
The EPI integrates and synthesizes the information provided by the environmental management system in
conjunction with other variables:
- environmental performance at the production centers (by monitoring their environmental impacts);
- establishment of environmental objectives and their performance over time.
- compliance with the applicable legislation and the current administrative actions in the context of
the environment.
The next graph shows the EPI and environmental performance in the last three years, which can be
accessed directly at www.ferrovial.com.
Environmental Performance Index
Endorsed by:
POOR
250
IMPROVABLE
200
2S
S
Recognized by:
150
ACCEPTABLE
Updated at
www.ferrovial.com
-S
-2S
100
GOOD
50
EXCELLENT
0
jan. 00
may 00
sep. 00
jan. 01
may 01
nov. 01
jan. 02
jul. 02
jan. 03
Note: the graph is distorted due to retroactive application of the EPI algorithm to data on file from before
2001.The actions implemented late in 2002, which were aimed mainly at improving waste management,
will contribute to progressively reducing the value of the EPI in 2003, in line with the trend visible in
January 2003.
Environment
195
Establishment of environmental objectives
Establishing environmental objectives continues to
Environmental work procedures
be one of the cornerstones for the functioning and
efficacy of Ferrovial’s management system. The
environmental
objectives
are
commitments
acquired by the centers (projects, services, etc.)
Communications
with interested
groups
The centers’
commitments
are aimed at
improving
environmental
performance
aimed at improving our environmental performance.
In accordance with Ferrovial procedures, each
Quality, Safety
and Environment
Managenent
project establishes objectives in an “Environmental
Objectives
Safety and Environment Department, which analyzes
Targets Guide” and notifies them to the Quality,
and integrates them into the organization’s other
Consultant
Center manager
objectives
and
reports
them
to
company
management and the interested parties.
Human Team
Results in 2002 of the main environmental objectives proposed by 121 production centers.
Re-use of wood at building sites (m3)
‘99
128,518
646
‘97
‘98
Re-use of other construction and
demolition waste at building sites (m3)
161
369
68,272
56,890 57,048
1,114
‘00
1,946
‘01
4,608
‘02
Reduction in landfill volume (m )
1,100
4,172
‘97
‘98
‘99
‘00
‘01
‘02
Re-use of topsoil in restoration (m )
3
3
6,719,389
1,137,689
5,276,970
985,065
2,368,384
1,802,199
287,838
223,543
484,500 657,100
‘97
196
Annual Report 2002
‘98
‘99
‘00
‘01
‘02
7,900
27,900
‘97
‘98
‘99
‘00
‘01
‘02
Environmental accounting
The decision to implement procedures for environmental cost analysis and environmental accounting not
only reflects the company’s desire to assume and know the economic effects of its impact on the
environment but is also a strategic management tool defined in terms of sustainability and social
responsibility.
A regulation approved in 2002 developed the aspects of environmental accounting, and all companies
must recognize and value environmental issues required in order to give a true and fair view of their net
worth, financial position and results.
Ferrovial is ahead of other companies in the sector since it gradually introduced new accounting criteria in
Qualitative analysis
of environmental
costs (facility
maintenance, waste
management,
organizational
structure, R&D, etc.)
its structure and management control systems.The “Financial information” chapter contains a qualitative
analysis of the environmental costs, including those arising from facility maintenance, waste management,
organization infrastructure and research & development.
In 2003, Ferrovial will continue to adapt its accounting structures to break down all the items with
material environmental effects so as to provide detailed information next year about all the matters
related to the company’s activities whose main objective is to prevent, reduce or undo environmental
damage and that may have an impact on the income statement.
Environment
197
Communications with interested groups
The experience gained in the first year of the web site through which the parties interested in Ferrovial’s
environmental management can send opinions, doubts, claims and complaints about environmental
aspects of its activities showed that it is difficult to effectively detect the actual demands for information
from some stakeholders.
Interactive web
tool for sending
opinions, doubts,
claims and
complaints about
environmental
aspects
Number and type of contacts through the web site
Complaints
5%
The information from the web site goes directly to
the Quality, Safety and Environment Department,
which monitors every communication that is
Information
requests
27%
received.
Professional
offers
(CV and others)
68%
Apart from the web site, external communications
received from other channels (notifications from the
Administration, penalty proceedings, reports in local
and national media, etc.) are also monitored.
Type of external communications received at Ferrovial since 1997: the Public Administration is our main interlocutor
Administration
notification
20%
Publication in local press 5%
Publication in national press 6%
Information
requests 13%
Notarial certificate 1%
e-mail 2%
Other 9%
Penalty
proceeding
38%
Only 3.26% of
the work in
progress received
an environmental
penalty proceeding
Circulars 5%
Communications 5%
Court documentation
3%
Written complaint 1%
Auditor’s report 1%
In 2002, 20 penalty proceedings were processed, accounting for 52% of the total external
communications received in the year. Only 3.26% of the work in progress in 2002 was the object of an
environmental penalty proceeding in that year.We were the subject of 6 penalty proceedings in 2001 and
10 in 2000.
Amount of fines
In 2002, Ferrovial companies were involved in 2
environmental cases, one of which was dismissed.
Ferrovial exhaustively controls and monitors
15,600
‘00
12,000
‘01
external communications of this type because of
their importance in providing relevant information
‘02
9,000
for environmental management.
Figures in euros
198
Annual Report 2002
Innovation in environmental matters
Environmental R&D
Ferrovial believes that it is essential to continue to face new challenges and objectives that will enable us
to stay ahead of our competitors and anticipate future pressures and social demands in environmental
matters.
This philosophy is expressed in the form of clearly-defined policies:
- investing in R&D&I to improve the efficacy of production processes related to environmental factors
and to solve the environmental problems facing the sector and those that affect society in general;
Improves
production
efficiency and
resolves
environmental
problems
- participating actively in forums, contributing our experience and opinions;
- progressively implementing standardized environmental management systems in Ferrovial’s main
activities;
- seeking the best environmental solutions for our customers and progressively implementing best
practices in our production processes, especially: minimizing the use of non-renewable resources;
reusing or recycling the waste we generate and increasingly implementing recyclable, re-usable or
environmentally-friendly materials and products in our processes.
Cooperation with government research centers
In the research of natural resources, defense against erosion and ecological restoration of land affected by
infrastructure works, Ferrovial collaborates with the Environmental Sciences Center of Spain’s Higher
Research Council (CSIC), Madrid Complutense University, Madrid Polytechnic University (Forestry
Engineering School), the Spanish Ornithology Society (SEO) and other institutions.
Ferrovial’s collaboration with the CSIC Environmental Sciences Center, one of the most productive
projects in this area, enters its third year in 2003. Since 2002, a prestigious CSIC research team has been
Performance
of spray seeding
on artificial taluses
studying the spray seeding of the artificial taluses on the Costa del Sol toll road (built and managed by
Ferrovial) as well as analyzing the efficacy of the techniques that were applied and their suitability for
restoring natural vegetation.
Ferrovial will collaborate with CSIC in the next three years as part of a broader project called TALMED
(the restoration of artificial taluses in a Mediterranean environment), which is financed by Spain’s National
R&D Program (Science and Technology Ministry) and involves scientists from the Environmental Sciences
Center (Madrid), the Desertification Research Center (CSIC-Valencia) and Madrid Complutense
University. Ferrovial participates as a promoter and observer of the project and contributes part of the
resources necessary for optimal development.TALMED is now one of CSIC’s principal initiatives in the
area of natural resources.
Environment
199
Through Cadagua, Ferrovial is the Spanish leader in engineering, construction and implementation of
water and waste treatment plants. Its technological leadership is based on continuous R&D activity in
cooperation with the most prestigious research centers.
The main research projects in 2002-2003 are summarized as follows:
Project
Advanced strategies for controlling
biological processes in waste water
treatment plants.Application on the
Galindo waste water treatment
plant (Phase 2)
Experiments at the Pedrola
pilot gasification plant
Treatment of water from gas
scrubbing
Research center
Collaborating bodies
and companies
Budget
(euros)
CEIT
MSI and Bilbao
Water Consotium
46,146
Chemical Engineering Department of
Zaragoza University and
Environment Technology Dept. of the
Higher Polytechnic Center
730,838
Gaiker
Study of alternatives to wet gas
scrubbing
BIOSEC,
an alternative to
the usual processes
for treating
solid waste from
waste water
treatment plants
200
Annual Report 2002
Chemical Engineering Department of
Zaragoza University and Environment
Technology Dept. of the Higher
Polytechnic Center
Application of submerged membrane Granada University (Water Institute,
bioreactors (SMBs) as a unified
Environmental Microbiology
municipal waste water treatment
Department of the Pharmacy School
and the Civil Engineering
Department of the Higher Civil
Engineering School)
Provincial government
of Granada and
Vivendi Water
183,297
The research project “Biosolid gasification process at waste water treatment plants” (Phase 1), registered
under the BIOSEC brand, is particularly notewortly and may become an alternative to the usual
treatment process for solid waste from waste water treatment plants.
Significant actions
Environmental Management Plans in offices
In 2002, selective waste collection was consolidated at our headquarters: household packaging, organic
waste, paper and cardboard, batteries, toner cartridges and medical waste (from the medical center).We
also finalized a systematic compiling and analysis procedure for data on waste generation and resource
consumption (energy, water, paper). In 2003, the Environmental Management Plan will be extended to
other offices with sufficient environmental responsibility and degree of control.
Selective waste
collection, and
compiling and
analysis of data on
waste generation
and resource
consumption
The system was designed to facilitate the monitoring of environmental issues in offices and establish
environmental objectives.
The following table summarizes waste generation and management and resource use at Group
headquarters in 2002. The system enables the company to periodically compile data and establish
environmental objectives at offices.
Waste
Consumption
Recycling
Ratios per employee
Consumption
Paper (kg)
Toner & other cartridges (unit)
Alkaline batteries (kg)
Watch batteries (g)
33,272
1,355
33.4
255
Other waste
Municipal (kg)
Medical (liters)
15,410
427
32.6
320
Generation
-
Resource consumption
Consumption
Water (m3/year)
Electricity (kWh/year)
4,928
2,180,800
72,000
38.5
Recycling
70.34
2.86
0.07
0.54
32.60
0.90
0.07
0.67
Kg/employee
-
152.2
0.08
Consumption/employee
10.42
4,610.6
Pilot project for construction and demolition waste management in the Madrid region
The publication of Madrid’s 2002-2011 Integrated Construction and Demolition Waste Management Plan
in February 2002 embodied the administration’s concern about alternative solutions for managing this
type of waste in order to reduce landfill usage, and it introduced a number of measures aimed at
Minimize the
cost and volume
of landfill waste
discouraging discharges and fostering the reuse and recycling of materials, which has substantially
increased the cost of inert waste management.
To adapt the management of this type of waste to the new regulation and minimize the cost and volume
of landfill waste, Ferrovial developed an integrated action plan for managing construction and demolition
waste at building sites in the Madrid region.The plan contains specific planning measures, agreements with
Environment
201
recyclers, employee and subcontractor training and awareness-raising, and measurement of results.This
experience is aimed at increasing the rigor and, consequently, the efficacy of construction and demolition
waste management at all the company’s building sites.
Significant actions in civil engineering
The main environmental actions in civil engineering projects in 2002 were:
• R-4 toll road
The Compensatory Measures Plan proposed in the design phase for the impact of the R-4 on several
Compensatory
measures for
the impact on
areas with
autochthonous
species
areas of environmental protection (e.g. Regajal-Mar de Ontígola and the Tagus valley) was delivered.
Noteworthy are the monitoring studies and work included in the collaboration agreements with the
Spanish Ornithology Society and the Spanish-Portuguese Lepidopterology Society to execute the
compensatory measures proposed for the impact on the feeding areas of the lesser kestrel and
several butterflies.
• Costa del Sol toll road. Estepona-Guadiaro section
The main environmental actions in this road in summer 2002 were as follows: installation of effluent
decantation tanks at the entrance of the Pedro Jiménez tunnel and the concrete plant; and installation
of acoustic screens between Santa María tunnel and Guadalobón viaduct.
Noteworthy was the excavation and extraction of the dolmens at the Corominas II site; a project for
restoration of these monuments was completed.
• Algarve shadow toll road (Portugal)
To take account of the complex hydrological characteristics of the land through which this road
passes and the high sensitivity of the environment, we designed a drainage network that collects and
We took account
of the high
sensitivity of the
environment
in the area
pipes rainwater and accidental spillages on the roadway to decantation tanks before discharge.
We also redesigned the replanting program in order to fully integrate the project into the
environment, respecting the existing vegetation and attending to the taluses with surface instability
problems; we designed additional protection measures such as placing 3D volumetric meshes and
organic networks made from coconut fiber.
202
Annual Report 2002
• Rehabilitation of the Villarpando Dam (Dominican Republic)
Ferrovial drafted an Environmental and Social Management Plan for this project which included the
following measures, among others: implementation of a manual of good environmental practices,
development of a waste management plan; specific protection measures for the water system;
Implementation of
an Environmental
and Social
Management Plan
implementation of a signage and staking plan for the site, and development of an environmental
training plan for technical and site personnel.
Environmental monitoring was performed internally (a specialist was designated on site) and
externally (the Environmental Department provided technical assistance) through an audit plan by
the National Institute for Water Resources, the project developer, and the InterAmerican
Development Bank, which financed it.
Water treatment
With over 180 water treatment facilities (drinking water, sewage treatment and desalination plants),
Ferrovial, through Cadagua, is Spain’s leading water treatment company.The capacity of its drinking water,
waste water and desalination facilities exceeds 8,800,000 m3/day.
Type of plant
Construction
Maintenance & Operation
m3/day
No. of plants
m3/day
No. of plants
Potable water treatment plants and
desalination plants
4,204,224
84
733,364
37
Solid waste treatment plant
1,023,456
31
-
-
229,536
54
-
-
4,634,752
98
3,365,475
135
Water treatment plants
Waste water treatment plants
Industrial waste water treatment plants 195,230
46
Environment
203
Municipal solid waste management and forest projects
Ferrovial has become one of the most technologically advanced companies in this business in Spain and
has received numerous awards due to its innovation efforts and abilities:
- The prestigious Bandera Verde-Ciudad Sostenible Award from FUCI (the Independent Users and
Consumers Federation) under the auspices of the Spanish Health & Consumer Affairs and
Environment Ministries was granted to Basauri (1998-2001), with an honorable mention in 2002,
Durango (2000-2002),A Coruña (2000 and 2001)—all cities where municipal waste collection is
managed by Ferrovial;
- UNESCO Nations in Bloom Award was granted to A Coruña in 2001;
- The Escoba de Plata Award was granted to A Coruña in 1998 and the Escoba de Oro in 2002 by
Collection of
570,000 tons of
municipal waste
per year
ATEGRUS (Waste and Environmental Management Association).
Ferrovial collects nearly 570,000 tons of municipal waste per year, including nearly 14,000 tons per year of
pre-separated paper and cardboard, glass, light containers and special household waste (e.g. batteries) for
recycling.
Collection and
separation of paper,
cardboard, glass, light
containers and special
household waste
(14,000 tons per year)
Ferrovial manages four recycling points in connection with the MSW contracts in Inca (Mallorca) and Vera,
Fines and Serón (Almería). We also manage two waste treatment plants with a total throughput of
163,094 tons per year.
Ferrovial’s Services division is very skillful in managing integrated forest projects in Segovia, Ávila and
Major step
forward in
the fight
against
forest fires
Burgos provinces. At the request of the Castilla y León regional government, a novel project was
established to improve knowledge about, and prevention of, forest fires.This initiative is a major step
forward in the fight against forest fires since it exhaustively investigates the causes and source of fires and
enables the authorities to adopt measures to better protect woodland.
In urban environment, Ferrovial’s Services area obtained a contract with public-sector company Gedesma
to manage the Madrid region’s environmental development.Within this framework, major actions were
performed in order to adapt and improve the region’s environment.
Participation in global forums
The Spanish Standards and Certification Association (AENOR)
- Technical Standards Committee (CTN) 165 on Corporate Social Responsibility management
systems, ethical financial instruments and environmental impact surveys.
204
Annual Report 2002
- A sub-working group on the construction sector, GT 1 AEN/CTN 150, in charge of ensuring the
application of the recently-published Reference guide on the use of the UNE-EN-ISO 14001:1996
standard by construction companies.
- Working group for the design of environmental indicators for the construction sector.
- AENOR’s Advisory Committee on construction companies.
Green Building Challenge (GBC)
Ferrovial participates in the Spanish Committee of the GBC. More than 20 countries are involved in this
initiative, which analyzes the life cycle of buildings with the aim of establishing criteria and tools for giving
buildings “ecological certification” in the future. A government-sponsored housing block designed and
Building designed
and built with
maximum energy
efficiency criteria
built with maximum energy efficiency criteria by Ferrovial was presented as an emblematic project at the
International Green Building Challenge Conference in Oslo (Norway) in 2002.
Participation in the 6th National Environment Congress
As in previous years, in 2002 Ferrovial sponsored the 6th National Environmental Congress, which has
become Spain’s main environmental forum.This congress is held every two years with the participation of
Administrations, institutions, scientists, companies and experts in order to analyze and present
environmental policies and actions aimed at sustainable development of the environment.
Ferrovial’s commitment to sustainability was reflected in its active participation in the congress through
numerous technical papers, work groups, round tables and other events. Ferrovial was the private-sector
institution which presented the largest number of technical papers.
Ferrovial organized a seminar on “Sustainability and listed companies” with the participation of Alexander
Barkawi, Managing Director of the Dow Jones Sustainability group Index and Allen White, CEO of Global
“Sustainability
and listed
companies”
seminar with
input from
Dow Jones and
GRI
Reporting Initiative.
Environment
205
Quality
Quality management
Quality is always present in all of Ferrovial's businesses. In fact, most companies in the main business lines
Standardized
management
systems in all
business lines
have implemented standardized quality management systems. All systems have been certified, most of
them by AENOR. In addition, all systems are audited internally by teams of qualified auditors who are
independent of the production arm.AENOR does not offer consultancy services, but limits its activities to
certification and standardization.
Certification status of Ferrovial’s quality systems
Company
Business
Ferrovial Agromán
Construction
Ferroser
Maintenance and integrated service management
Property development
Ferconsa
Construction
Cadagua
Water treatment
Tecpresa
Pre-stressed products
Ditecpesa
Asphaltic bitumen manufacturing
Grupisa
Eurolimp
Services
Ferrovial Infraestructuras
Infrastructure
Cintra
Infrastructure
Cintra Aparcamientos
Infrastructure
Dornier
Infrastructure
Femet
Infrastructure
Certified
ISO 9000
Pending certification
In Ferrovial, a quality assurance plan (PAC) must be drawn up and applied to every project and it is
applicable throughout the execution of each of the contracts.The PAC was designed as a preventive tool
which the team in charge of the project uses to state how the project is to be carried out, which
resources are to be used, how the project is to be organized and executed, and when the tests and
inspections designed to ensure quality in the construction process are to be held.The implementation of
the PAC means that, throughout the construction process, a register is kept of all tests and inspections
that fail to meet specifications. These registers are sent to the Quality, Safety and Environment
Department, where any faults detected are analyzed.
206
Annual Report 2002
Quality Awards
Ferrovial has received many prestigious quality awards:
2002
"Escoba de Oro" award to A Coruña city government for urban waste management
2001
Spanish architecture award from the Colegio Superior de Arquitectos de España for the Palacio
de Congresos de Cataluña (Barcelona)
VII Puente de Alcántara award for expansion and improvement of the Madrid Metro system
(jointly with other participating construction companies)
1999
National Architecture award for the refurbishment of the Health Sciences building (A Coruña)
VI Puente de Alcántara award for the Guggenheim Museum, Bilbao
1998
Quality, Architecture and Housing award for the General Services building of the Police
Headquarters (Madrid)
COAG award for the refurbishment of the Health Sciences building,A Coruña
“Escoba de Plata” award, awarded in 1998 to the A Coruña city government by ATEGRUS
(Asociación Técnica para la Gestión de Residuos y el Medio Ambiente) for the urban waste
management program
1997
V Puente de Alcántara award for the N-632 Novallana-Cadavedo road and the Arco de la
Regenta bridge
Construmat construction award for the IMPIVA, ALICER, and CEES institutional complex.
Castellón
1996
COAM award for architecture for the General Services building of the Police Headquarters.
Madrid
Quality
207
The two fundamental components of a company’s social commitments are its labor relations and its
community involvement.
Ferrovial’s social commitment is based on the following principles:
- priority must be given to safety and to the appropriate employee conditions and relations, not just in
Labor relations
and social
commitment
are fundamental
the company but, progressively too, at suppliers;
- social dialog must be developed at a global and local level;
- team work must stimulate social and economic development and access to employment, especially
for those who find it most difficult to enter the job market;
- we must commit ourselves to defending and respecting human rights, an area in which companies
play an increasingly prominent role due mainly to globalization.
Photograph competition for employees in 2002. José Antonio de la Fuente.
208
Annual Report 2002
Labor relations
Ferrovial seeks to generate and provide value to shareholders, customers and employees and to
contribute effectively to society’s development and wellbeing. Our human resources policy is based on
the principle that shareholder value is generated by enhancing employee value.
A company is seen as a sum of all those parts: people are the cornerstone of the business, and innovation
People are the
cornerstone
and entrepreneurship are the basis for our development.
Our people
Ferrovial is aware of working in an increasingly globalized and dynamic environment that is more
competitive and influenced by new technology and the new needs of society and the labor market.
Consequently, Ferrovial believes that the distinguishing feature that generates business success, both now
and in the future, focuses on quality and the contribution from the employees who make up the
organization.
In this context, Ferrovial believes that business performance depends on developing our key skills:
personal effectiveness, leadership and management skills.
Based on the importance of managing talent, Ferrovial devotes efforts to attracting, developing and
retaining our most valuable employees.We think it is vital to generate a value proposal for employees,
within a corporate culture that rewards performance and provides constant professional development.
Based on equal opportunities in an open participatory environment, our value proposal focuses on
corporate culture, management capability, a leading position, appropriate remuneration and sound
professional opportunities both in Spain and elsewhere in all the areas in which the company operates.
Rewarding
performance and
providing
professional
development
In 2002, our human resources efforts obtained awards from specialist media. Ferrovial was chosen by
Computerworld as one of The 100 Best Places to Work in IT Worldwide. Computerworld highlighted
that Ferrovial had developed and implemented information systems that improve company management
and competitiveness and that it had advanced in the implementation of tools that boost internal
communication and interdepartmental collaboration in a worldwide organization. Additionally, Capital
Humano (one of Spain’s most prestigious best-selling human resources magazine) granted Ferrovial’s
integated human resources policy a “Special Mention” in its 6th awards.
Labor relations
209
Average workforce by qualification
Total: 28,454 Clerical staff
Average workforce by business area
Average workforce by region
8.2%
Construction
50.4%
Services
38.6%
Spain
71.3%
Graduates
10.2%
Operators and
technical staff
81.6%
Real Estate 2.8%
Infrastructure 7.6%
Other countries
28.7%
Corporation 0.6%
New employees
Our corporate priority is to constantly hire young people based on their ability to generate value for our
company, and to employ the necessary resources for this purpose.We are involved mainly in two areas:
course sponsorships, and scholarship and work experience programs.
Ferrovial attends the main employment forums and is present in universities, promoting and actively
participating in training tomorrow’s professionals.We also have collaboration agreements with Spanish
and foreign universities and business schools.
Our most important actions in this area are as follows:
- Active sponsorships of educational centers and programs
Course
sponsorships,
scholarships and
work experience
programs
- M.A. in Building Management (CSA)
- M.A. in Intervention and Renovation (CSA)
- M.A. in Property & Facility Management (CSA)
- M.A. in Property Development (CSA)
- Advanced Course in Transport Economics (M.A. in Industrial Economics) at the Carlos III University
in Madrid
- Course on “Ferrovial Servicios in Facility Management” at the Industrial Engineering School in
Barcelona
210
Annual Report 2002
- Seminar on Property Training at IADE (Madrid Autonomous University)
- Advanced Course in Infrastructure and Public Services Management at the Civil Engineering School.
- Scholarships for studies outside Spain: in conjunction with the Fundación Agustín de Betancourt.
- University prizes at the Civil Engineering School in Madrid:“Best construction report as final year
project from a safety standpoint”, “Innovation in safety”.
- In-house courses “Ferrovial site manager course”: every year a selection of civil engineering students
are offered the chance to see how a site manager works, combining class time with visits to
construction sites.
Scholarships
Throughout the year, and particularly in the summer, Ferrovial offers finalyear students the possibility of rounding out their academic training via
680
internships, through which they perform similar tasks to those they will carry
400
460
680 scholarships
were granted
in 2002, up 48%
out in their professional career. Interns are assigned to carefully-selected sites
in order to improve their professional skills with a view to including them in
future selection processes once they graduate.
‘00
‘01
‘02
In 2002, 680 scholarships were granted, i.e. 48% more than in 2001.
Labor relations
211
Employee training and development
Ferrovial focuses on training employees to develop and achieve their maximum potential and make a
greater contribution to the company, which also facilitates their employability.
Training and development require annual planning to identify the professionals who are ready to be
promoted—a process governed by the principle of equal opportunity, which focuses on a person’s ability
Equal
opportunities,
focusing on
ability and merit
and merit, regardless of condition.
To facilitate and enhance our employees’ professional
Trainee numbers
careers, we have an employment office on the Intranet
12,687
called Ferronet, through which any person can apply for any
6,700
vacancy in any of the company’s areas.
7,242
In order to ensure career development for our
‘00
professionals, Ferrovial has ongoing training programs that
Implementation
of an e-learning
platform on
the Intranet
use not only traditional classroom methods but now also
use videoconferencing habitually, and it has introduced new
e-learning techniques (FerroAula) in its corporate intranet.
In 2002, 184,188 training hours were given in Spain alone
Investment
in training
increased 20%
‘02
‘01
Breakdown of training
Quality, safety and
environment 10%
New
technology
10%
with a total direct investment of 2.902 billion euros, i.e. 20%
more than in 2001.
Technical knowledge
33%
Languages
22%
Skill & management
25%
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Annual Report 2002
Workplace risk prevention
Ferrovial considers risk prevention in the workplace as a fundamental part of its operations because it
actively contributes to the attainment of a high level of health and safety at work.
In the construction field, more than 4,000 monitoring, control and consulting visits to sites were carried
out by safety specialists in 2002 to detect any anomalies and introduce appropriate safety measures to
correct them.This information was stored in an intranet application accessible to all those involved in the
Over 4,000
monitoring, control,
consulting and
other visits
safety program.
During 2002, the Workplace Risk Prevention Handbook, characterized by its simplicity and efficiency, as
shown in the results of the obligatory audit of safety in the workplace, was successfully implemented in
more than 250 workplaces in the Infrastructure, Real Estate and Corporate areas.As regards the Services
area, a management system has been implemented in a significant number of workplaces, where more
than 800 visits have been carried out. A control certificate was obtained for this work, following an
external audit of the workplace safety system as well as a reduction in the number of accidents in the
course of the year.
In the area of training, as well as courses taken by staff upon recruitment and during projects, all members
of middle management also take a 50-hour “Basic course in Workplace Risk Prevention” which enables
them to act as basic level safety specialists. In 2002, this requirement was expanded to include other
management levels with responsibility for the production line (group managers, site managers and
production managers, among others).The objective for 2003 is for all members of middle management
throughout the company to take that basic course.
In the services sector, more than 2,500 workers received training. Furthermore, in all workplaces with 10
or more staff, a designated worker will take a basic course in workplace safety, allowing him/her to act as a
basic level safety specialist.Training was also given to many center managers (site managers, technical
managers and road upkeep managers).
Over 2,500
services workers
were trained
Ferrovial has developed and implemented the first specific course in “Workplace Risk Prevention” for the
“Ferroaula” learning platform on the company intranet. By following the course, workers gain a basic
knowledge of the most common risks and the best methods to prevent them.The course’s innovative
nature lies in its interactive units, with subjects such as “Legislation”,“Workplace Geometry”,“Fatigue”,
“Stress and other psychosocial risks” and “Fire and First Aid”, among others.
Labor relations
213
Ferrovial’s accident rate statistics are below the sector average, according to the latest figures published by
the Ministry for Employment and Social Affairs:
Ferrovial *
Construction sector
FI
SI
II
87.9
1.3
101.4
102.7
2.3
183.1
* Personnel under the construction labor agreement
Frequency Index (FI): this represents the number of accidents requiring leave which occurred during the
working day for every million hours worked within the risk group.
Severity Index (SI): given that severity can be measured by the number of days' leave, the Severity Index is
defined as the number of working days lost as a result of accidents occurring in a fixed number of hours
worked by a group of workers.
Incidence Index (II): this represents the number of accidents requiring leave which occur for every
thousand workers over a fixed period of time.
Agreement with the National Institute of Industrial Safety and Hygiene
Innovative system
to improve safety
conditions at
construction sites
214
Annual Report 2002
At the end of 2002, Ferrovial established a collaboration agreement with the National Institute of
Industrial Safety and Hygiene (INSHT) to design and implement an innovative workplace risk prevention
system with the aim of improving project safety conditions.
As a primary source of data, this system will use risk situations detected on-site from representative
samples taken by safety specialists from projects in varying stages of construction, typology and location.
Once the information has been analyzed, critical points will be identified and standardized according to
the type of project, execution phase, etc. In cases where risk situations are particularly pertinent,
preventive action will be taken by developing a system of specific indicators to compile the data collected.
Furthermore, innovative safety measures will be established with the aim of monitoring these critical
points and improved economically-viable techniques will be introduced. Improvements in Health and
Safety studies will be incorporated into projects and appropriate safety measures will also be introduced
in construction projects.
The agreement includes the development of new training programs and materials which will be useful in
the prevention of workplace risks at construction sites.
Pilot project
for integrating
suppliers and
subcontractors
into the system
As regards the diffusion of information, INSHT and Ferrovial will cooperate in campaigns to divulge and
disseminate risk prevention knowledge and practices, and publish specific materials which are of common
interest. Furthermore, a pilot project will be implemented to integrate suppliers and subcontractors into
the company's safety system and new certification requisites will be imposed through contracts with an
elaborate content on health and safety.A steering committee will assess the degree of compliance with
the targets and related deadlines of each of the specific projects covered by the agreement and, if
necessary, the need to sign collaboration agreements with the competent agencies of the autonomous
regions and employers’ organizations.
Initial design of the future workplace risk prevention system
MANAGEMENT
NEW PROJECT
ANALYSIS
of results
SAFETY
PLANNING
PRODUCTION LINE
PROJECTS
DECISIONmaking
Safety technicians
SITE CONTROL AND
MONITORING VISITS
SYSTEMATIC
REPRESENTATIVE
Project type
Execution phase
ONGOING
Identification of
CRITICAL POINTS
Project type
Execution phase
Systematic RISK identification
New RISK
CLASSIFICATION
(adapted for the sector)
By activity
Data processing
(PICASSONET)
SCORECARDS
PROPOSED
PREVENTIVE
actions
STATISTICAL ANALYSIS
By project type By organization
SAFETY SERVICE
Quality, Safety and
Environment Department
Labor relations
215
Employee satisfaction
A key priority for Ferrovial’s human resources unit is to satisfy and retain employees and their wealth of
knowledge, and this depends essentially on the company’s ability to produce value proposals for all of
them.
The average length of service is 6.1 years in the workforce as a whole and 11.8 years for management.
The average age of the workforce as a whole is 39 years and that of management 44 years.
Appropriate
fair remuneration
and working
conditions
In addition to our culture, we seek to stimulate effective leadership in our organization on the
understanding that management quality is a key factor in personnel retention and satisfaction.This policy
combines with two other major factors: appropriate fair remuneration and working conditions for all
employees.
Ferrovial considers that the right combination of remuneration and benefits is fundamental, so it provides
fixed remuneration that is permanently cross-checked with the market in order to maintain
competitiveness.All employees also receive variable remuneration based on objectives.
These remuneration policies are complemented with other plans, including systems referenced to the
share price, personalized flexible compensation programs and a wide range of benefits, including the
Employee Club formed in 2002, which gives all employees access to outside products and services under
advantageous conditions.
Employee club
with access to
products and
services under
advantageous
conditions
In 2002, personnel expenses amounted to 663.111 million euros, of which 81.8% (542.589 million euros)
related to wages & salaries and the other 18.2% (120.527 million euros) to employee welfare expenses.
Overall, personnel expenses increased by 16% on 2001 (543.901 million euros).
Human resources commitment
Ferrovial is committed to defending human rights and fundamental freedoms, in line with the Declaration
on the right and responsibility of individuals, groups and organs of society to promote and protect
universally recognized human rights and fundamental freedoms (article 18 of United Nations resolution
53/144, dated 8 March 1999). In 2002, Ferrovial entered the Global Compact with specific social
commitments (see Sustainability chapter).
Regardless of geographical, political or social factors, Ferrovial’s basic employment policy involves the
following commitments:
- no action (hiring, training, promotion, dismissal, remuneration, etc.) will involve discrimination on the
basis of any condition other than professional capabilities and qualifications;
216
Annual Report 2002
- we will not use work that is forced, compulsory or subject to servitude of any type, or child labor.
- decent working conditions will be provided to ensure an appropriate lifestyle for employees and
their families and the necessary measures will be taken to ensure health and wellbeing at work.
- exercise of the right to freedom of expression, meeting and association will be guaranteed and there
will be no obstacles at any time to the exercise of the right to trade union freedom.
In order to comply with those commitments, the Human Resources Department has internal and
external analysis programs, including principally:
- Human Capital Index: a study that shows the high correlation between certain human resources
practices and the company’s market value, provides a comparative index regarding Europe’s best
human resources practices (i.e. those which produce the greatest shareholder value) and delves into
initiatives that directly increase company value.
- Labor Climate Study: a study that measures professionals’ perception of the strengths and weaknesses
of the company’s personnel management.The results are used as the basis for designing the action
plans to maintain the strengths and correct the weaknesses. Since this is a periodical study, it can
Analysis programs,
such as the
Human Capital Index
and the Labor
Climate Study
measure the improvements obtained by those action plans.The personnel satisfaction study takes
account of the following: intrinsic job motivation, organization and resources, leadership and
organization progress, team work and coordination, orientation towards results, customer and
quality orientation, information and communication, social conditions and general satisfaction.
Labor relations
217
Community Involvement
Ferrovial has designed its Strategic Community Action Plan in order to improve the alignment of its
activities with its strategic priorities, rationalize management in accordance with the standards of its other
Community
policies,
objectives and
programs
business areas and define its medium-term commitments.
The plan is based on the analysis of our activities and the main components of our environment and is
underpinned by community projects that are:
- developed in Ferrovial’s surrounding area and related to its activities;
- considered as an investment focused on obtaining results in the medium term;
- aimed at stimulating social development and not welfare actions.
Main Programs
Ferrovial’s Community Action Plan is structured into the following six programs:
- Employment - Support training and jobs for the disadvantaged.
- Public administrations - Prioritize support to community projects over cultural, sport or heritage
conservation programs whenever possible.
- Refurbishments - Refurbish small installations for community projects.
- Accessibility - Include accessibility requirements in building design and project execution when
possible.
- Employees - Facilitate community actions by employees.
- Business sector - Stimulate community actions by business.
Social and
economic
development
of the local
community
Other related programs are also included, such as the purchase of products and services at special
employment and integration companies, financial contributions, sponsorship and patronage, and donation
of used assets.
Main Actions
For many years, Ferrovial has been committed to fostering the social and economic development of the
local community, especially the disadvantaged, in terms of social work, healthcare, education, professional
training and employment.
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Annual Report 2002
Below is the detail of the main projects developed within the framework of the 2002 Community Action
Plan. As a special feature, to celebrate its 50th anniversary, Ferrovial will contribute a total of 500,000
“5 decades,
5 projects”
euros to five community projects. Under the slogan of "5 decades, 5 projects", Ferrovial will support and
promote initiatives chosen in consultation with Children’s Villages (reconstruction of a village in Sant Feliú
de Codines, Barcelona), UNICEF (a project to provide drinking water in Bolivia) and other development
projects with Fundación Reina Sofía and other programs for social integration.The fifth project, chosen
from among proposals by the Ferrovial Group’s own employees, will receive100,000 euros.
Employment program
Employment integration of disadvantaged groups (Spain)
In 2002, Ferrovial joined the Board of Trustees of Fundación Integra in order to support the insertion into
the labor market of persons at risk of social exclusion, especially drug addicts, prisoners, battered women
and minors with difficulties.
Bring persons
at risk of social
exclusion into the
labor market
In collaboration with several community organizations, Fundación Integra works to support
disadvantaged people through employment
In 2002, Fundación Integra sent 28 candidates to fill vacancies at the company. Ferrovial interviewed 13
and hired 5 of them to work in the Services area and in on-street car parks.The experience has been
positive.
Socioeconomic development (Venezuela)
Ferrovial and Fundación Codespa signed a collaboration agreement to finance the “Fondo Michiruy”
project, which is aimed at promoting rural tourism in the Tropical Andes.The project includes 22 farming
communities and two national parks in five municipalities in the states of Mérida,Trujillo and Barinas in
Venezuela.
Boost rural
tourism and
protect the Andean
environment
Codespa and Fundación Programa Andes Tropicales (PAT) have been involved in “Fondo Michiruy”, a
credit fund, for the last ten years in Venezuela; the fund’s objective is to create a tourist network in the
region so as to provide farmers with a source of income while protecting the Andean environment.
Ferrovial’s contribution to “Fondo Michiruy” will be used to fund training for the farming population, build
inns and other necessary infrastructure, promote conservation agriculture and produce handcrafts and
natural products.Those investments will benefit nearly 1,000 people directly and a further 1,200 indirectly.
The initiative develops and conserves the Tropical Andes by using community-based rural tourism to
generate employment in rural areas, improve farmers’ living conditions and encourage them to protect
natural resources.
219
Services program
Children’s Villages (Spain)
Ferrovial has a framework agreement with Children’s Villages until 2006.Within that framework, in 2002
Ferrovial and its employees:
- Provided premises for a new training center in Barcelona.
- Refurbished, improved and built homes and centers.
- Studied land acquisitions, designs and construction of future homes.
- Financed education activities.
- Set up voluntary teams to support leisure activities.
- Gave a private screening of the latest Harry Potter movie.
- Equipped an IT classroom and commenced training courses.
- Provided information about internal and external communication tools.
Accessibility programs
In 2002, Ferrovial was in contact with Fundación Adecco to develop job integration programs for disabled
Facilitate disabled
persons’ access to
the labor market
persons, which are planned to start in 2003.
Ferrovial is also in talks with Fundación Once-Fundosa to promote employment of disabled persons.
Ferrovial’s Services area plans to join the Inserta Program in order to progressively hire disabled people.
Ferrovial plans to sign and implement the agreement in 2003.
220
Annual Report 2002
2nd World Assembly on Ageing
Demographic change has profound economic and social implications that require a change of attitude.
The creation and implementation of policies to cater for this demand and enable seniors to live
productive, safe lives is, therefore, a vital priority for international policy.
As a result of this process of reflection, Ferrovial sponsored “Integrated Communities. A society for all
ages. The 2002 design competition for students”, organized by the International Council for Caring
Communities (ICCC) in the framework of the UN’s Second World Assembly on Ageing in 2002.
The inauguration, which was attended by Her Excellency, Mrs. Nane Annan, representing the UN
Secretary General, and Her Excellency Mrs. Ana Botella, displayed the work of 28 finalists, architecture
students from ten different countries from Azerbaijan to Bulgaria, Canada, China, Ecuador, Japan, Russia,
Thailand, United Arab Emirates and the United States
The competition was established in 1995 with the support of the United Nations Programme on Human
Settlements (UN-HABITAT) as an instrument to stimulate and illustrate innovative architectural concepts
and designs which provide creative approaches to the challenge of longevity and seek pragmatic solutions
to the needs and aspirations of multi-generational communities.
Employee program
To celebrate its 50th anniversary, Ferrovial allocated 100,000 euros to projects proposed by its employees.
The deadline for proposals was in February 2003, and they will be analyzed, selected and implemented in
100,000 euros for
projects proposed
by employees
2003. Precedence will be given to initiatives related to Ferrovial’s activity and the regions where it
operates and those in which employees or their immediate relatives are involved as volunteers or
partners of the NGO or promoting institution.
Future for the children (Poland)
Responding to Poland’s economic problems in recent years and the needs of the most disadvantaged
sectors, Ferrovial, together with its investee Budimex and International Cooperation ONG, collaborated
in the “Future for the children” program, whose main objective was to improve the quality of life of over
Improving the quality
of life of over 500
children and seniors
in Poland
500 children and seniors in Poland.
A total of 220 volunteers aged 15 to 30 participated in the projects, which ranged from accompanying
children and seniors to reconstructing welfare centers.
One of the main actions was to improve and refurbish the Salejánski hospital for disabled children in
order to double its capacity in time for winter, accompany sick children and organize activities and
courses. Similar activities were organized in a shelter in the small fishing town of Trzebiez which houses
about 60 children.
221
Four programs were set up to help children and seniors: in a pediatric hospital, in an orphanage and in
two retirement homes in Warsaw.The project’s objective was to respond to the social needs of over 350
hospitalized, orphaned or abandoned children and seniors through welfare, education, companionship
and entertainment activities.The installations were also improved and refurbished.
Business sector program
Contribute to the
development of
community actions
by companies
In 2002, Ferrovial joined the Board of Trustees of Fundación Empresa y Sociedad in order to contribute to
the development of community actions by companies in Spain.
Fundación Empresa y Sociedad is a non-profit organization created in 1995 whose purpose is to promote
community actions by companies in Spain. It is the Spanish member of CSR Europe.
Other actions
“Life as a house” (Spain)
In June 2002, Ferrovial sponsored the première of the feature film “Life as a house” in aid of the Madrid
Regional Government’s collaboration program with Associations and Homes for Children.
The film tells the lifelong ambition of the protagonist to achieve his dream: build his own house.
Support for culture
Ferrovial has financed the conservation of Spain’s historical heritage and the promotion of artistic
creativity to the amount of 1% of the total budget of concession-related public works, in accordance with
the National Historical Heritage Regulation Law 16/1985, dated 25 June.
The main actions in supporting culture were as follows:
- Refurbishment and decoration of the Prado Museum.
- Sponsorship of Bilbao Guggenheim Museum.
- Transfer of works of art to the National Institute for the Performing Arts.
- Web site design support for the Friends of the Prado Museum Foundation.
- Membership of the Royal Association of Friends of the Museo Nacional Centro de Arte Reina Sofía.
- Membership of the Royal Tapestry Factory.
- Patronage of Secot.
- Sponsorship of the Spanish Financial Journalist Association’s Diary.
222
Annual Report 2002
- Sponsorship of Fundación Liceo in Barcelona.
- Sponsorship of the Royal Theater in Madrid.
- Sponsorship of Fundación Orfeó Catalá.
- Sponsorship of the Palau de la Música Catalana.
- Sponsorship of Fundación Madrid Nuevo Siglo.
- Sponsorship of the 2012 Olympic candidature for Madrid.
- Sponsorship of the III AENA Madrid-Barajas Airport Golf Tournament.
- Sponsorship of Huelva basketball club.
- Sponsorship of Huelva volleyball club.
- Sponsorship of the Huelva city Latin American Film Festival.
- Sponsorship of the A Coruña Symphony Orchestra.
- Agreement with the Málaga municipal government to sponsor social, sports and cultural activities.
Photograph competition for employees 2002. Rodrigo Ruiz
223
Address list
ADDRESS
POST CODE & CITY
TEL.
FAX
HEAD OFFICE
Grupo Ferrovial
Príncipe de Vergara, 135
28002 Madrid
91 586 25 00
91 586 26 77
Ribera del Loira, 42
P.Empresarial Puerta de las Naciones
28042 Madrid
91 300 85 00
91 300 88 96
Ctra. de la Esclusa, 3
41011 Sevilla
95 499 13 90
95 499 05 25
West Andalucía
Building
41011 Sevilla
95 499 05 16
95 428 39 55
West Andalucía
Civil engineering
41011 Sevilla
95 499 05 18
95 428 01 26
East Andalucía
Building
Maestranza, 25 2º
29016 Málaga
952 21 76 73
952 22 69 47
East Andalucía
Civil engineering
San Antón, 72 4º
Edif. Real Center
18005 Granada
958 25 10 61
958 26 02 14
Autopista del Sol
Ctra. N-340 km 150,700
Apdo. 721 (frente Costa Natura)
29680 Estepona
(Málaga)
952 79 81 14
952 79 82 15
Extremadura
Marconi, Chalet 28
Urbanización Cruzcampo
06800 Mérida
(Badajoz)
924 37 03 47
924 37 01 77
91 586 24 70
CONSTRUCTION
Ferrovial Agromán
Zone I
Zone II
Velázquez, 105, 4º
28006 Madrid
91 586 24 50
Aragón/Navarra/Rioja
Avda. Independencia, 16 2º
50004 Zaragoza
976 23 88 97
976 23 07 89
Basque Country/Cantabria
Ercilla, 24 5º
48011 Bilbao (Vizcaya)
94 479 52 20
94 479 52 50
Cantabria
Cádiz, 20 –2ºD
39002 Santander (Cantabria)
94 231 09 57
94 222 74 87
Castilla-León
Juan García Hortelano, 19-21
47014 Valladolid
98 336 00 01
98 336 00 09
Railway (Renfe) and Transport II
Velázquez, 105 4º
28006 Madrid
91 586 24 50
91 586 24 70
Zone III
Príncipe de Vergara, 108, 4º
28002 Madrid
91 586 24 80
91 586 31 44
Building I
28002 Madrid
91 586 24 94
91 586 25 79
Building II
28002 Madrid
91 586 31 43
91 586 32 91
Building III
28002 Madrid
91 586 31 87
91 586 32 90
Civil engineering
28002 Madrid
91 586 24 80
91 586 24 85
Zone IV
Velázquez, 105 4º
28006 Madrid
91 586 24 50
91 586 24 70
Asturias
Telesforo Cuevas, 2 1º B
33005 Oviedo (Asturias)
98 523 11 00
98 525 97 09
Castilla-La Mancha
Oslo, 9
45003 Toledo
925 22 40 00
925 22 41 29
Railway (Renfe) and Transport I
Velázquez, 105 4º
28006 Madrid
91 586 24 50
91 586 24 70
Galicia
Torreiro, 13-15 4º C
15003 A Coruña
981 21 61 34
981 21 68 54
Murcia
Villaleal, 2, 8º - Edificio Centro
30001 Murcia
968 22 50 90
968 21 63 99
Zone V
224
Santaló, 10- 1º -1ª
08021 Barcelona
93 240 30 30
93 202 13 07
Catalunya building
08021 Barcelona
93 240 30 30
93 201 82 68
Catalunya civil engineering
08021 Barcelona
93 240 30 30
93 202 13 07
Valencia / Balearic Islands
Daniel Balaciart, 4 Entresuelo
46020 Valencia
96 361 78 52
96 361 31 94
Balearic Islands
Camino de la Escollera, 8
07012 Palma de Mallorca
(Balearic Islands)
97 172 29 33
97 171 09 21
Canary Islands
Rambla de Pulido, 73-1º Dcha.
38004 Santa Cruz de Tenerife
92 227 68 78
92 228 48 65
Annual Report 2002
ADDRESS
POST CODE & CITY
TEL.
FAX
Avda. General San Martín, 1.Piso 6.
Edificio Torre Equipetrol
Santa Cruz de la Sierra
591 3 336 74 74
591 3 334 05 21
1 905 361 28 05
1 905 361 27 05
5716304702
571 63 04 690
FOREIGN CONSTRUCTION
Bolivia
Canada
2425 Matheson Blvd.East
L4W 5K4 Toronto-Ontario
Colombia
Carrera 62, Nº 8245 Ofic.307
Bogotá
Chile
Avda.Andrés Bello, 2711 18º
Las Condes - Santiago
Italy
Via Vittor Pisani, 10 2º
20124 Milan
562 560 62 00
562 334 37 71
39 02 6707 7356
39 02 6707 7372
Ireland
Monastery Road, Clondalkin
Dublin 22
353 1 403 3238
Poland
Ul. Marzszalkowska 82
00-517 Warsaw
48 22 623 62 73
Portugal
Avda. Liberdade, 245 1º A
1250 Lisbon
351 21 319 11 00 351 21 352 91 38
Puerto Rico
Guadalupe Final,
Residencial Santiago Iglesias
00731 Ponce
San Juan de Puerto Rico
1787 8401 770/8
Dominican Republic
Avda. John F. Kennedy,
Edif. Hache 3º Este
Santo Domingo
1809 566 0181/2/3
1809 541 7586
Tunisia
2, Rue Mouawia Ibn Abi Soufyene,
Cité Jardin-1002
1002 Tunis
216 71 890 205
216 71 892 428
Uruguay
General Rivera, 2337
11200 Montevideo
598 2 401 19 99
598 2 402 71 58
48 22 623 62 71
1787 8402 576
INDUSTRIAL CONSTRUCTION
Cadagua
Ferrovial Medio Ambiente
y Energía
Gran Vía, 45 plantas 7ª y 8ª
94 481 73 00
94 481 73 01
28002 Madrid
91 586 25 00
91 586 31 54
28002 Madrid
91 586 25 00
91 586 28 24
Ul. Marszalkowska, 82
00-517- Warsaw
COMPANIES
Budimex
Ferroconservación
Suero de Quiñones, 42
28002 Madrid
Ditecpesa
28002 Madrid
Sector 30C Parcela 5
Polígono Industrial Mapfre
28806 Alcalá de Henares
(Madrid)
28002 Madrid
Sector 30C Parcela 5
Polígono Industrial Mapfre
Obralia
4 822 623 65 90 004 822 623 62 45
91 590 68 00
91 590 68 40
91 879 69 30
91 879 69 27
28806 Alcalá de Henares
(Madrid)
91 879 69 30
91 879 69 27
Avda. Europa, 20 A-3ª Pta.
Parque Empresarial La Moraleja
28108 Alcobendas (Madrid)
91 490 00 80
91 661 63 77
Karman Técnicas Especiales
Sierra de Guadarrama, 94
28830 San Fernando
de Henares (Madrid)
91 677 21 37
91 656 22 39
Bygging Encofrados Deslizantes
Sierra de Guadarrama, 94
28830 San Fernando
de Henares (Madrid)
91 656 50 12
91 656 22 39
Pza. Manuel Gómez Moreno, 2
Edificio Alfredo Mahou
28020 Madrid
91 418 56 00
91 555 12 41
28020 Madrid
91 418 56 00
91 555 12 41
35121 351 21 50
35121 315 14 62
562 560 62 50
562 335 78 06
Commercial and
administrative office
Tecpresa
Commercial and
administrative office
INFRASTRUCTURE
Ferrovial Infraestructuras
TOLL ROADS
Cintra
Portugal
Avda. Joao Crisostomo, 38C
1050 Lisbon
Chile
Avda.Andrés Bello, 2711 18º
Las Condes – Santiago
Europistas
Príncipe de Vergara, 132 10º
28002 Madrid
91 515 87 50
91 515 87 51
Cº Capuchino de Basurto, 6 4º D
94 439 63 00
94 439 63 01/2
Autema
Gran Vía 680 Atico
08010 Barcelona
93 318 72 80
93 317 12 81
Autopista del Sol
Concesionaria Española
Área de Peaje San Pedro –
Ctra. Del Pantano Roto, s/n
29670 San Pedro de
Alcántara (Málaga)
95 279 93 71
95 278 16 61
Address list
225
Trados (M-45)
ADDRESS
POST CODE & CITY
Apartado de Correos 38010
28080 Madrid
TEL.
FAX
91 305 20 14
91 332 35 22
Túneles de Artxanda
Cº Capuchino de Basurto, 6-4º D
94 439 63 06
94 439 63 02
Autopista Madrid-Sur
Concesionaria Española
Edificio Alfredo Mahou. Pl. 7
28020 Madrid
91 417 74 00
91 556 16 30
407 ETR
Operation Center,
6300 Steeles Avenue West
Woodbridge Ontario
L4H 1J1(Canada)
1905 265 40 70
1905 265 40 71
Euroscut
Rua 5 de Outubro, 17- 2º Izq.
Escritorio 3 Letra E
8500 Portimão
(Portugal)
351282410020
351282485200
Euroscut Norte
Rua Rosalía de Castro 130/132
4900-421 Viana do Castelo 351258806640
(Portugal)
Ferrovial Aeropuertos
28020 Madrid
Bristol International
Airport Limited
Bristol B S48 3F4
(England)
351258823570
AIRPORTS
91 418 56 00
91 555 12 41
4412 7547 3629
4412 7547 4800
Aeropuerto de Antofagasta
Antofagasta (Chile)
562 560 62 50
562 335 78 06
Asur
Torre Esmeralda Bulevar Avila
Camacho 40 6º
11560 Mexico City
5252 02 81 13
5252 02 81 13
Sydney Airport
241 O’Riordan Street
Mascot NSW 2020. P.O. Box 63
Mascot USW 1460
(Australia)
612 96 67 91 11
612 96 67 15 92
Cintra Aparcamientos
28020 Madrid
91 418 56 00
91 556 36 08
Madrid and Central Spain
28020 Madrid
91 418 56 03
91 556 36 08
North Spain
Escalantes, 5 ppal. Dcha.
39007 Santander
942 36 25 86
942 36 15 08
North East Spain
Escocia, 50/58. Esc. Dcha.
08016 Barcelona
93 243 44 10
93 243 44 11
North West Spain
Torreiro, 13/15 6º F
15003 A Coruña
981 21 69 23
981 21 68 92
Castilla-La Mancha
and Extremadura
Barrio del Rey, 9 2º dcha.
45001 Toledo
925 22 52 17
925 22 41 30
Levante
Avda. de Aragón, 25 entlo.
46010 Valencia
96 393 15 46
96 362 11 43
Andalucía
Isla de la Cartuja, s/n
Edif.World Trade Center
41092 Sevilla
954 48 83 99
954 48 82 83
Balearic and Canary Islands
Pascual Ribot, 3-1º
(Balearic Islands)
971 45 32 60
971 45 17 51
Dornier
28020 Madrid
91 418 56 00
91 556 36 08
Femet
Río Tormes, nave 73 Pol. Ind.
El Nogal
28110 Algete (Madrid)
91 628 22 20
91 628 12 32
Guadiana Park
Pza. San Antón, s/n.
06002 Badajoz
924 22 05 36
924 22 05 36
Estacionamientos Río Piedras
P.O. Box 20525 Río Piedras
00928 0525 Puerto Rico
1787 767 20 82
1787 763 37 62
Edison, 4- 6º
28006 Madrid
91 586 99 00
91 586 25 56
Catalunya
Bori i Fontestá, 39 Bajos
08017 - Barcelona
93 240 22 47
93 240 26 02
Canary Islands
Los Llanos Seis, 8 Edif. Cabollanos
1ª Planta- Oficina 5
38003 Santa Cruz de Tenerife
(Tenerife)
922 20 92 54
922 20 95 16
East Andalucía
Paseo de la Farola, 3, 2ª pl.- Módulo 3
29016 Málaga
952 21 09 34
952 60 39 96
West Andalucía
Avda. Ramón y Cajal, Edif.Viapol
Portal A-2º- Módulo 15
41018 Sevilla
95 465 30 01
95 465 28 14
CAR PARKS
REAL ESTATE
OFFICES
226
Annual Report 2002
ADDRESS
POST CODE & CITY
TEL.
FAX
Valencia
Pº Alameda, 34 7º D – Edif. Mozart
46023 Valencia
96 337 93 60
96 337 93 61
Zaragoza
Avda. Independencia, 24-26,
5º Oficina 4
50004 Zaragoza
976 79 47 30
976 79 47 31
Basque Country
Camino Nº 5- 1º A
20004 San Sebastián
(Guipúzcoa)
943 43 35 88
94 343 08 04
Portugal
Avda. Liberdade, 245, 1ºB
1250-143 Lisbon
(Portugal)
35121 356 34 12
35121 353 51 64
Habitaria
El Trovador, 4285 -9º
Comuna Las Condes
Santiago de Chile
(Chile)
562 206 16 10
562 207 68 69
Alicante
Avda. Maisonave, 41- 1º D
03003 Alicante
96 598 26 01
96 598 26 02
Granada
Recogidas, 18-2º Derecha
18002 Granada
958 53 63 41
958 53 63 42
Las Palmas de Gran Canaria
Luis Doreste Silva, 18B- 6ºB
35004 Las Palmas
de Gran Canaria
928 24 50 22
928 24 40 63
Oficina Multicasa
María de Molina, 66
28006 Madrid
91 515 95 11
91 515 95 12
Oficina Multicasa
Diego de León, 12
28006 Madrid
91 411 94 50
91 411 94 58
Lar 2000
López de Hoyos, 35
28002 Madrid
91586 12 00
91 586 02 60
Don Piso
Ronda Universidad, 22 B Ático
08007 Barcelona
93 306 90 90
93 306 90 75
Ferrovial Servicios Inmobiliarios
López de Hoyos, 35
28002 Madrid
91586 90 80
91 586 02 88
Ferrovial Inmobiliaria Canarias
Los Llanos Seis, 8
Edif. Cabollanos 1ª Planta -Oficina 5
38003-Santa Cruz de Tenerife
(Tenerife)
92 220 92 54
92 220 95 16
Ferrovial Servicios
Urban Services
28002 Madrid
28002 Madrid
91 586 25 00
91 586 25 00
91 586 25 30
91 586 25 30
West Andalucía
Ctra. Huelva-Ayamonte, Km. 4,5
21002 Huelva
95 915 92 99
95 915 88 88
95 027 82 13
BUSINESS OFFICES
COMPANIES
SERVICES
East Andalucía
Central Spain
Paseo Almería, 71- 1º Dcha.
04001 Almería
95 027 71 63
Real, 113
29680 Estepona (Málaga)
95279 46 78
95 279 61 37
Real, 12-14
23400 Úbeda (Jaén)
95 379 20 46
95 379 20 48
28002 Madrid
91 586 28 53
96 586 99 35
Rosario, 6-3º Oficina 5
Edificio Toscana
02001 Albacete
96 752 17 24
96 752 17 24
Emilio Pou, 36
07230-Montuiri (Baleares)
97 164 40 04
97 164 65 15
Ercilla, 24- 4º
48011- Bilbao (Vizcaya)
94 479 52 25
94 479 52 46
Prol. Severo Ochoa, s/n
La Grela-Bens
15008- A Coruña
98 127 11 07
98 126 98 55
Anunciata, 6 Bajo
Trobajo del Camino
Ortega y Gasset, 18 Bajo
24010- San Andrés
del Rabanedo (León)
24400 Ponferrada (León)
98 722 13 86
98 742 75 76
98 722 15 80
98 742 66 64
Facility Management
28002 Madrid
91 586 25 00
91 586 26 77
South Spain
North Spain
San Benito, 3 Bajo
41018 Sevilla
95 453 18 08
95 453 07 70
Extremadura
Marconi,28 Urb. Cruzcampo
06800-Mérida (Badajoz)
92 437 03 47
92 437 01 77
Canary Islands
Alonso Alvarado, 43 4ºB
35003 Las Palmas
de Gran Canaria
92 829 37 76
92 829 37 76
East Andalucía
Alameda Principal, 13
Edificio Mirasierra Pta. 3 Oficina 1 y 2
29001 Málaga
95 222 73 16
95 228 56 56
Prolongación Severo Ochoa, s/n.
La Grela-Bens
15008 A Coruña
981 27 11 07
981 26 98 55
Martín Santos Romero, 26 Parquesol
47014 Valladolid
98 340 93 41
98 340 88 38
Calvet, 30-32
08021 Barcelona
93 414 49 32
93 202 32 94
Paseo María Agustín, 33 Bis
50004 Zaragoza
97 621 54 08
97 621 06 92
North West Spain
Castilla-León
Catalunya and Aragón
Aragón and Navarra
Address list
227
ADDRESS
East Coast
Valencia
Balearic Islands
Central Spain
Castilla-La Mancha
POST CODE & CITY
TEL.
FAX
Villaleal, 2- 8º Edif. Centro
30001 Murcia
968 22 51 93
968 22 14 77
Daniel Balaciart,4 Entreplanta,Pta.23
46020 Valencia
96 362 94 54
96 361 87 06
Camino de la Escollera, 8
97 172 29 33
97 171 09 21
García Quintanilla, 26
28027 Madrid
91 741 49 00
91 320 21 39
Pza. Cardenal Silíceo, s/n
45002 Toledo
92 526 53 43
92 524 73 44
North Spain
Ercilla, 24. 2ª Pta. Despacho 7
94 415 08 68
94 415 08 68
Portugal
Avda. Liberdade, 245
01250 Lisbon
3512 1353 5301
3512 1353 5297
Gardening & Forest services
Eduardo Saavedra, s/n
28040 Madrid
91 543 71 24
91 543 45 21
Actúa
Doctor Zamenhof, 38-3º
28027 Madrid
91 837 56 57
91 837 69 91
Eurolimp
Avda.América, 35
28002 Madrid
91 413 41 81
91 416 98 23
Grupisa Infraestructuras
Avda. Fuente Nueva, 16
28700 San Sebastián
de los Reyes (Madrid)
91 651 11 00
91 651 90 51
Sevial
Soria, 44 Pol. Ind. De Ajalvir
28864 Ajalvir (Madrid)
91 884 43 84
91 884 45 93
Viales de Navarra
Polígono Industrial Talluntxe,
Calle B, Nave 63
31110- Noain (Navarra)
94 831 65 75
94 831 68 19
Viales de Castilla y León
Pol. Ind. Las Hervencias, Fase IV,
Parcela 21
05004 Ávila
92 025 55 88
92 025 46 61
Andaluza de Señalizaciones
San Cristóbal, Parcela 42 y 43
29200 Antequera (Málaga)
95 284 53 87
95 284 56 40
Ferrovial Telecomunicaciones
28002 Madrid
91 586 25 00
91 586 99 23
Cableuropa (ONO)
Basauri, 7. Edificio Belagua
28023 Aravaca (Madrid)
91 180 93 00
91 180 93 21
TELECOMMUNICATIONS
228
Annual Report 2002
Notes
Notes
229
Notes
230
Annual Report 2002
Photographs on divider pages:
Chema Alvargonzález
Group Description
Aitor Ortiz
Manuel Renau
Publisher: Grupo Ferrovial
Production: See the change
Design: Álvaro Reyero Pita
Translation: Versalia Traducción
Photomechanics: Cromotex
Printing: tf Artes Gráficas
D.L.: M-xxxxx-2003
231
Agenda
1. Examination and approval of the financial statements (balance sheet, income statement and notes to
financial statements) and the management report of the company for the year ended 31 December
2002.
2. Examination and approval of the financial statements (balance sheet, income statement and notes to
financial statements) and the management report of the consolidated group of companies for the
year ended 31 December 2002.
3. Proposed distribution of income for the year 2002.
4. Examination and approval of the conduct of business by the Board of Directors in 2002.
5. Ratification, re-appointment and appointment of directors.
6. Appointment of auditors for the company and consolidated group.
7. Amendment to the Bylaws in order to regulate the Audit and Control Committee.
8. Elimination of the part of the remuneration system for company directors that is referenced to the
share price.Authorization to the Board of Directors to establish the obligation to allocate part or all
of directors' remuneration to the acquisition of shares of the company.
9. Authorization so that, in conformity with articles 75 and related articles of the Spanish Corporations
Law (Ley de Sociedades Anónimas), the company may acquire own shares directly or via controlled
companies, and revocation of the previous authorization resolved by the Shareholders' Meeting on
22 March 2002.
10. Delegation of powers to formalize, register and execute the resolutions adopted by the
Shareholders' Meeting and empowerment to formalize the deposit of the financial statements as
referred to in article 218 of the Spanish Corporations Law (Ley de Sociedades Anónimas).
232
Annual Report 2002

Annual Report 2002

Transcription

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