Download - Ferrovial - Annual Report 2012

Consolidated financial statements at 31 December 2011
Ferrovial S.A. and Subsidiaries
- Result of companies accounted for using the equity method, which pursuant to accounting legislation is presented already net of the
related tax effect. The profit generated by these companies totalled EUR 20 million in 2011.
- Permanent differences: which relate to either profits or losses which are not subject to taxation or which do not generate deductible
expenses. The permanent differences totalled EUR 195 million in 2011 and related basically to the exemption on the gain arising from
the sale in February 2011 of the ownership interest held in the Swissport Group, as discussed in Note 1.2 on changes in the scope of
consolidation and due to the conditions established for application of the exemption on foreign-source transactions provided for in
Article 21 of the Consolidated Spanish Corporation Tax Law, approved by Legislative Royal Decree 4/2004, of 5 March, being met.
With these adjustments, the taxable profit amounted to EUR 270 million and, applying the effective rate of each country and
considering the tax credits for the year, the income tax expense totalled EUR 88 million, with an effective tax rate of 33%.
The difference between the income tax expense of EUR 88 million and the total expense recognised in the year totalling EUR 61 million
relates to the adjustment of deferred tax assets and liabilities of prior years and the reassessment of the recoverability of the deferred
tax assets recognised, giving rise to an income tax benefit of EUR 27 million, without any impact on cash.
The following table shows the reconciliation of the income tax expense/benefit for 2010:
Millions of euros
2010
Spain United Kingdom USA Other countries Total
Tax rate 30% 28% 40% 27%
Profit or loss before tax -401 124 -31 3,176 2,869
Results of companies accounted for using the
equity method
-12 -21 0 -7 -40
Permanent differences -14 3 -8 -2,850 -2,869
Taxable profit/ Tax loss -427 106 -38 320 -40
Tax at applicable tax rate -128 30 -15 79 -34
Tax credits 0 0 0 3 3
Other -5 -3 11 19 22
Tax expense for the year -133 27 -4 100 -10
Effective tax rate applicable to tax base 31% 25% 12% 31% 26%
Adjustment of prior years’ tax 85 33 16 96 231
Total tax expense -48 60 12 197 220
Total effective rate applicable to profit or loss
before tax
12% 48% -39% 6% 8%
In 2010 10% of the share capital held by the Group in 407 ETR, the Canadian toll road concession operator, and 40% of the equity
interest held in Cintra Chile were sold. These transactions gave rise to pre-tax gains of EUR 2,489 million and EUR 229 million,
respectively. The aforementioned transactions were considered permanent differences in the calculation of income tax since they are
not subject to taxation because they meet the conditions established for application of the exemption on foreign-source transactions
provided for in Article 21 of the Consolidated Spanish Corporation Tax Law, approved by Legislative Royal Decree 4/2004, of 5 March.
Ferrovial, S.A. Consolidated financial statements at 31 December 2011 74