Download - Ferrovial - Annual Report 2012

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Consolidated financial statements at 31 December 2011 Ferrovial S.A. and Subsidiaries Section 23.4 of this Note provides further detail on these tax assets, which relate to the tax loss carryforwards (EUR 804 million), the most relevant of which relate to the Toll Roads Division (EUR 402 million), the Corporate Division (EUR 382 million) and to reinvestment and dividend double taxation tax credits (EUR 3 million). b) Assets and liabilities arising from timing differences between the accounting and tax income and expense recognition methods This item relates to the tax impact resulting from the fact that the timing of recognition of certain expenses or depreciation and amortisation charges is different for accounting and tax purposes. The recognition of a tax asset in this connection means that certain expenses have been recognised for accounting purposes before their recognition for tax purposes and, therefore, the Company will recover these expenses for tax purposes in future years. Conversely, a liability represents an expense that is recognised for tax purposes before its recognition for accounting purposes. Most notably "Deferred Tax Assets" includes the provisions amounting to EUR 266 million recognised for accounting purposes, which do not have any effect for tax purposes until they are used, and finance costs of EUR 126 million. Deferred tax liabilities relate mainly to accelerated depreciation for tax purposes, amounting to EUR 271 million. c) Deferred taxes from the revaluation of derivative instruments, pension funds and translation differences (valuation adjustments) This reflects the cumulative tax impact resulting from valuation adjustments recognised in reserves. This impact appears as an asset or liability since there is no tax payable or refundable until this amount in reserves is transferred to profit or loss. The asset balance relates to accumulated losses in reserves that will result in tax income when it is recognised in profit or loss. The liability balance relates to gains not yet recognised for tax purposes. Noteworthy is the deferred tax asset relating to financial derivatives, amounting to EUR 485 million. d) Other: The other deferred tax liabilities include most notably the tax provision for the shareholdings in the BAA Group (EUR 328 million) and in Cintra USA (EUR 125 million). The detail of the changes in the deferred tax assets and deferred tax liabilities in 2010 is as follows: Millions of euros Balance at 01/01/10 Transfers Adjustments and other Charge/Credit to income statement Assets held for sale Charge/Credit to equity Exchange rate effect Balance at 31/12/10 Deferred tax assets Tax assets 972 228 -111 83 -53 0 8 1,127 Temporary dif. (tax/accounting recognition 351 88 -5 104 -51 0 9 496 methods) Deferred tax assets arising from business 133 -25 -6 -14 0 0 5 93 combinations Deferred tax assets arising from 599 -3 44 38 -6 61 18 751 valuation adj. Other 135 -105 25 6 -9 0 8 59 Total 2,190 184 -53 217 -121 61 48 2,526 Millions of euros Balance at 01/01/10 Transfers Adjustments and other Charge/Credit to income statement Assets held for sale Charge/Credit to equity Exchange rate effect Balance at 12/31/10 Deferred tax liabilities Deferred tax liabilities arising from business 1,086 -13 59 -159 -8 0 39 1,003 combinations Temporary dif. (tax/accounting recognition 868 214 15 -53 -39 0 26 1,032 methods) Deferred tax assets arising from 23 0 67 -5 0 40 5 130 valuation adj. Industrial Building Allowance 1,539 -73 0 -130 0 0 56 1,392 Other 521 56 124 155 -8 0 3 852 Total 4,037 184 266 -192 -56 40 129 4,409 Ferrovial, S.A. Consolidated financial statements at 31 December 2011 76
Consolidated financial statements at 31 December 2011 Ferrovial S.A. and Subsidiaries 23.4 Tax assets: At 31 December 2011, the Ferrovial Group companies had tax loss carryforwards totalling EUR 3,435 million, giving a tax asset of EUR 1,080 million calculated at the tax rate applicable in each country. The detail of the tax loss carryforwards and of the related tax assets calculated at the tax rate applicable in each country is as follows: 2011 (Millions of euros) Tax Last year Maximum tax Tax asset Country losses for offset asset recognised Spain 2,244 2019-2029 673 656 United States 1,103 2026-2030 386 140 UK 47 No lapsing date 12 3 Poland 15 2011-2016 3 2 Ireland 10 No lapsing date 1 1 Portugal 10 2011-2015 3 1 Holland 1 2015-2020 0 0 Chile, construction 6 No lapsing date 2 1 Total 3,435 1,080 804 Additionally, Ferrovial had unused reinvestment and other tax credits of EUR 166 million at 31 December 2011 (EUR 198 million in 2010), of which EUR 3 million had been recognised at 31 December 2011. 23.5 Years open to tax audit Ferrovial S.A., Ferrovial Servicios S.A., Ferrovial Agromán S.A., Norvarem S.A., Ferrovial Aeropuertos S.A., Ferrovial Infraestructuras S.A. and Amey UK Plc. are currently being audited by the tax authorities for income tax for 2006. In addition to 2008, the last four years are open for review by the tax authorities for all the taxes applicable to the Group. Contingent tax liabilities may arise from the criteria that tax authorities may adopt in relation to the years open for review which cannot be objectively quantified. However, the directors of the Parent consider that such liabilities as might arise from a possible assessment by the tax authorities other than those for which a provision has already been recognised would not be significant. 24. Contingent liabilities, contingent assets and obligations a) Contingent liabilities The Group has contingent liabilities for of litigation arising in the ordinary course of business from which no significant liabilities are expected to arise other than those for which provisions have already been recognised. In this connection, the most significant litigation relating to contingent liabilities is as follows: Litigation and risk in relation to Spanish toll roads R-4 toll road The contingent liabilities in the toll road division relate to the cost of expropriations, mainly in connection with the valuation of land subject to expropriation required to build toll roads, since several claims have been filed in this regard. Therefore, a provision of EUR 421 million (see Note 19) was recognised, which relates mainly to the R-4 toll road in which Ferrovial has an ownership interest of 55%. However, this risk has been reduced by Additional Provision Forty-One of State Budget Law 26/2009 for 2010, which provides that toll-road concession operators may obtain a participating loan for expropriation cost overruns provided certain requirements are met, which is the case of the R-4 toll road concession operator. In addition to the problems relating to expropriations, the R-4 toll road was affected by significant reductions in vehicle numbers in recent years. Also, Additional Provision Eight of Law 43/2010, which attempted to mitigate the imbalance arising as a result of these reductions, introduced a measure consisting of the possibility of receiving from the concession grantor compensation equal to the difference between the toll revenue that would have been earned had 80% of the traffic projected in the tender specifications been reached and the toll revenue arising from actual traffic. This compensation will only be available for a period of three years and is subject to certain budget restrictions and maximum volume limits. Despite the aforementioned measures, the trend in expropriation processes and the ongoing fall in traffic in this project made it impossible to refinance the borrowings relating thereto (see Note 20), the original maturity date of which was January 2011 but was subsequently extended to July 2011. Subsequent agreements were entered into relating to the final maturity of the borrowings, which was extended initially to November 2011 and, subsequently, to 27 February 2012. Ferrovial, S.A. Consolidated financial statements at 31 December 2011 77
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