Download - Ferrovial - Annual Report 2012

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Consolidated financial statements at 31 December 2011 Ferrovial S.A. and Subsidiaries o Interest Rate Swaps: due to the fall in long-term interest rates in the UK, the fair value of the IRSs amounted to EUR -698 million at 31 December 2011, a drop of EUR 255 milion with respect to the fair value of EUR -443 million at 2010 year-end. The main effect of this drop was a negative impact on reserves of EUR 344 million (a negative impact of EUR 129 million on the equity of Ferrovial), with a cash outflow of EUR 263 million as a result of settlements and borrowing costs of EUR 146 million (effect of EUR -55 mililon on the net profit of Ferrovial). The notional value arranged amounted to EUR 4,851 million at yearend (GBP 4,054 million). o Cross Currency Swaps: BAA has arranged certain Cross Currency Swaps aimed at hedging the GBP/EUR and GBP/USD foreign currency risk to which the foreign currency bonds are exposed. At 31 December 2011, the value of these derivatives was EUR 640 milion (31 December 2010: EUR 619 million). The main effects on these instruments were an impact of EUR -50 million due to the effect of exchange rate changes on the total notional value, borrowing costs on financing of EUR 39 million (effect of EUR 15 million on the net profit of Ferrovial) and EUR 96 million relating to fair value adjustments (effect of EUR 20 million on the net profit of Ferrovial). The notional value arranged amounted to EUR 3,300 million at year-end (GBP 2,758 million). o Equity swaps: BAA has arranged equity swaps relating to share option plans schemes linked to the Ferrovial share price. These swaps do not qualify for hedge accounting, and the changes in fair value, which amounted to EUR 24 million at 31 December 2011, were recognised as valuation adjustments (effect of EUR 9 million on net profit). ‐ Pension surplus/deficit At 31 December 2011, BAA had a pension plan surplus of EUR 12 million, as compared with a deficit of EUR 77 million at the end of 2010. This positive change was due mainly to, among other factors, an actual return on plan assets that was higher than expected. ‐ Equity Equity amounted to EUR 2,313 million at 31 December 2011, down EUR 239 million with respect to 2010 due mainly to the negative impact of EUR 276 million arising from the measurement of financial derivatives at fair value, the loss for the year of EUR 24 million and the adverse impact of EUR 5 million arising from the recognition of pension plans. However, translation differences increased equity by EUR 61 million. ‐ Bank borrowings In 2011 there were three bond issues. In May BAA placed bonds amounting to GBP 750 million (EUR 863 million) maturing in May 2041 and with an annual coupon of 5.875%. Also in May, the existing index-linked bond issue was extended by GBP 130 million (EUR 150 million), maturing in 2039 and with an base annual coupon of 3.334%. In addition, in June 2011 a bond issue of USD 1,000 million (EUR 714 million) was launched, with an annual coupon of 4.875% and maturing in 2021. Also, a new "class B" loan of GBP 50 million (EUR 57 million) maturing in 2019 was arranged and drawn down in full in December 2011. The funds obtained from the aforementioned issues were used mainly to repay substantially in full the Refinancing Facility of GBP 1,298 million (EUR 1,494 million) and to pay a portion (GBP 263 million -EUR 303 million-) of the interest capitalised through May 2011 on the Toggle facility. Moreover, GBP 39 million (EUR 45 million) of the payables to the European Investment Bank (EIB) and GBP 23 million (EUR 27 million) of the debt of the non-regulated airports were repaid. These transactions significantly improved BAA's debt profile, replacing short-term borrowings with debt maturing in 2019-2021 in the case of the new "class B" loan and the US dollar issue and in 2039-2041 in the case of the issues in pounds sterling. However, the bond issued in euros with a nominal value of EUR 1,000 million maturing in February 2012 was reclassified to short term. The EUR/GBP exchange rate effect increased borrowings by EUR 386 million in 2011. Lastly, the accompanying table shows a breakdown of BAA's debt, indicating the percentage of the debt that is considered to be hedged (either by a fixed rate or by derivatives): Ferrovial, S.A. Consolidated financial statements at 31 December 2011 38
Consolidated financial statements at 31 December 2011 Ferrovial S.A. and Subsidiaries Balance at Balance at Type of borrowing (*) 31/12/11 % 31/12/10 % BAA (100%) Millions of euros 14,908 100% 14,398 100% Fixed 1,642 11% 2,354 16% Index-linked fixed 6,770 45% 4,789 33% (*) Nominal debt ‐ Deferred tax liabilities Hedged 3,538 24% 3,393 24% Floating 2,959 20% 3,862 27% The decrease in BAA's deferred tax liabilities was due mainly to the effect of the reduction of the tax rate in the UK in 2011 from 27% to 25%, which had a positive impact on the income statement of EUR 186 million (EUR 104 million attributable to Ferrovial). Changes in the income statement 2011-2010 The following table shows the changes in BAA's income statement in 2011. BAA (100%) Millions of euros 12/11 12/10 Operating income 2,904 2,790 Operating expenses -1,412 -1,508 Gross profit from operations 1,492 1,282 Depreciation and amortisation charge -751 -715 Profit from operations before impairment and non-current 741 567 asset disposals Impairment and disposals of non-current assets 0 -678 PROFIT OR LOSS FROM OPERATIONS 741 -111 Financial loss -1,073 -1,035 Share of profits of companies accounted for using the 0 12 equity method Loss before tax -332 -1,134 Income tax 308 300 Net loss -25 -834 Loss attributable to Ferrovial -13 -467 The last heading in the foregoing table shows the loss attributable to Ferrovial. As indicated in Note 2, and pursuant to IFRS 5, the loss attributable to Ferrovial is reported in 2010 as loss from discontinued operations, whereas in 2011 the loss for the first ten months of the year (EUR 3 million) is reported as loss from discontinued operations and the loss for the last two months (EUR 10 million) is shown under "Share of Results of Companies Accounted for Using the Equity Method". Noteworthy in relation to the loss for 2011 were several non-recurring effects, including most notably the impact of fair value adjustments on derivatives (EUR 36.4 million before tax -effect of EUR 16.5 million on the net loss attributable to Ferrovial-) and the impact of the change of tax rate in the UK, which had an effect of EUR 186 milion on the balance of deferred tax liabilities (effect of EUR 104 million on the net loss attributable to Ferrovial). Also noteworthy was the increase in borrowing costs on financing in 2011 due to the rise in inflation in the UK. As regards the loss for 2010, the following impacts should be noted: impairment losses on assets of EUR 734 milion (effect of EUR - 366 on the net profit of Ferrovial) as a result of the update of the impairment tests; fair value adjustments to derivatives totalling EUR -51.1 milion (effect of EUR 20.6 million on the net loss attributable to Ferrovial); and adjustments to deferred tax liabilities amounting to EUR 103 million as a result of changes in the applicable tax rate. Ferrovial, S.A. Consolidated financial statements at 31 December 2011 39
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