The cash fl ow statement that forms part of these fi nancial statements has been prepared under IAS 7.
The cash fl ow statement explains the overall change in the consolidated Group’s cash situation, including all the activities of the Group companies and concession companies.
Consequently, cash fl ows from operating activities relate to
all the operating activities, including those of concession holder companies (basically tolls collected less operating costs), and cash fl ows from investing activities include all investments in property, plant, equipment and intangible assets, including in- vestments in concession assets by concession holder companies.
This notwithstanding, in order to provide a more appropriate explanation of the cash resources generated by the Group, a distinction is made (as in prior years) between:
a) Cash fl ows generated by the Group’s businesses, where con- cession holder companies are treated as fi nancial investments and therefore the relevant shareholdings are included in cash fl ows from investing activities and the returns obtained from those investments (dividends and other income) are included in cash fl ows from operating activities.
b) Cash fl ows obtained by the concession holder companies, including activity and fi nancing fl ows derived from those com- panies’ operations.
As may be observed in the accompanying tables, the sum of the two segments is the Group’s overall cash fl ow, after elimi- nating, through the adjustments column, the dividends received from concession companies, which are consolidated using the full and proportionate methods (390 million euro in 2008 and 182 million euro in 2007), and the investments made in their capital (55 million euro in 2008 and 139 million euro in 2007).
2008 2008 Million euro Cash fl ows ex. infrastructure projects Cash fl ows of infrastructure projects Adjustments Consolidated cash fl ows Held for sale Eliminations Consolidated cash fl ows + held for sale
EBITDA -29 552 - 523 170 - 693
Dividends collected 406 - -390 21 1 -16 1
Income tax paid 19 -42 - -23 -13 - -36
Change in receivables, payables and
other 11 24 - 30 -23 9 21
Cash fl ows from operating
activities 407 534 -390 551 135 -7 679
Investments in property, plant and
equipment and intangible assets -1 - - -1 -81 - -82
Investments in infrastructure projects - -514 - -514 -27 105 -436
Non-current fi nancial assets -48 - 55 7 - - 7
Divestment - - - -
Cash fl ows from investing
activities -49 -514 55 -508 -108 105 -511
Cash fl ows before fi nancing
activities 358 20 -335 43 27 98 168
Proceeds from capital and minority
interest - 73 -55 18 - - 18
Payment of dividends to parent
company -50 - - -50 -15 15 -50
Payment of minority interest
dividends to associates - -427 390 -37 -1 1 -37
Treasury shares acquired by Cintra -68 - - -68 - - -68
Cash fl ows from shareholders
and minority interest -118 -354 335 -137 -16 16 -137
Interest paid and received - -429 - -429 -60 - -489
Increase in bank borrowings -61 1,293 - 1,232 71 5 1,308
Decrease in bank borrowings - -600 - -600 -32 - -632
Cash fl ows from fi nancing
activities -179 -90 335 66 -37 21 50
Change in cash and cash
equivalents 179 -70 - 109 -10 119 218
Opening cash and cash equivalents 216 488 - 704 119 -119 704
Closing cash and cash equivalents 395 394 - 789 90 - 879
Impact of exchange rate on cash and
2008
2007
Million euro Cash fl ows ex.
Infrastructure projects
Cash fl ows of infrastructure projects
Adjustments Consolidated cash fl ow
EBITDA 29 665 - 694
Dividends collected 182 - -182 -
Income tax paid 27 -43 - -16
Change in receivables, payables and other 31 74 - 105
Cash fl ows from operating activities 269 696 -182 783
Investments in property, plant and equipment and
intangible assets -47 - - -47
Investments in infrastructure projects - -571 - -571
Non-current fi nancial assets -181 - 139 -42
Divestment - - - -
Cash fl ows from investing activities -228 -571 139 -660
Cash fl ows before fi nancing activities 41 125 -43 123
Proceeds from capital and minority interest - 171 -139 32
Payment of dividends to parent company -50 - - -50
Payment of minority interest dividends to associates - -236 182 -54
Cash fl ows from shareholders and minority interest -50 -65 43 -72
Interest paid and received - -442 - -442
Increase in bank borrowings - 1,619 - 1,619
Decrease in bank borrowings -37 -1,286 - -1,323
Cash fl ows from fi nancing activities -87 -174 43 -218
Change in cash and cash equivalents -46 -49 - -95
Opening cash and cash equivalents 262 547 - 809
Closing cash and cash equivalents 216 488 - 704
Impact of exchange rates on cash and cash equivalents - 10 - 10
Set out below is an analysis of adjustments made to results for the year to arrive at gross operating results (EBITDA):
Items Million euro
2008 2007
Net result attributed to the parent company -56 -26
Minority interest 31 28
Depreciation and amortisation 122 185
Results of equity-consolidated companies - -1
Result from fi nancing 454 650
Income tax -80 -145
Other profi t and loss 6 3
Net result of discontinued operations 46 -
EBITDA 523 694
Cash fl ow (concession holder companies as fi nancial assets)
Cash fl ows for 2008 were signifi cantly affected by the purcha- se of treasury shares (68 million euro), the contribution of capital to R-4 to pay for expropriations (14 million euro), the capital increase in Autema due to the refi nancing process completed (11 million euro) and the investments made in the new toll roads under construction Autopista Central Greece (12 million euro) and Euroscut Azores (9 million euro).
However, despite the signifi cant volume of investments, the Group’s cash fl ows from activities were not signifi cantly affec- ted due to the considerable cash fl ows from operating activities generated by the company.
2008
Cash fl ows from operating activities
Cash fl ows from operating activities (407 million euro) include the amount of 406 million euro in dividends and capital reim- bursed by the toll road and car park concession companies, a breakdown of which is set out in the accompanying table. The remaining fl ows relate mainly to net tax infl ows and other collec- tions and payments relating to the Division’s parent companies.
Breakdown of dividends collected from infrastructure projects
Million euro
2008 2007
407 ETR 47 44
Autema - 13
Inca / Cinca (Autema transaction) 317 -
Ausol 5 19 Car parks 16 1 Trados 45 2 2 Euroscut Algarve 4 3 Cintra Chile 1 - A. Temuco-Río Bueno - 2 A. Santiago-Talca - 67 A. Talca-Chillán - 2 A. Chillán-Collipulli - 8 Total dividends 392 161 Trados 45 - 1 Chicago Skyway 3 9
Indiana Toll Road 11 11
Total capital reimbursements 14 21
Total 406 182
As refl ected in the above table, cash fl ows from operating activities include both dividends received and capital reimbursed, which is treated as investment income because it is not genera- ted by the sale of any share of the relevant business.
Cash fl ows from investing activities
The following table contains a breakdown of outlays arising from investments made:
Cash fl ows from investing activities of infrastructure projects Million euro 2008 2007 A. R-4 Madrid-Sur 14 34 Eurolink M3 5 34 SH-130 3 52 A. Madrid Levante 1 3 A. Chillán-Collipulli - 8 M-203 - 21 A. Ionian Roads - 18 Central Greece 12 2 Euroscut Azores 9 15 Autema 11 - A. Poludnie 6 - Car parks - 47 Other -12 -6 Total 49 228
The most signifi cant outlays during the year were the contri- bution of capital to A. R-4 Madrid Sur to pay for expropriations (14 million euro), the capital increase in Autema due to the refi - nancing process completed (11 million euro) and the investments in the toll roads under construction Central Greece (12 million euro) and Euroscut Azores (9 million euro).
Cash fl ows from shareholders and minority interest
Payments made to the shareholders of Grupo Cintra amoun- ting to -50 million euro in 2008 are carried as dividend fl ows.
Cash fl ows from shareholders and minority interest include the purchase of treasury shares by Cintra S.A. during 2008 in the amount of -68 million euro.
External fi nancing is addressed in Note 17.
Cash fl ows from infrastructure projects
When preparing cash fl ow information for the concession hol- der companies, only the companies consolidated using the full or proportionate methods have been considered, by including 100% of fully-consolidated company fl ows and the proportional part of the fl ows of companies consolidated using the proportio- nate method, as refl ected in the balance sheet. Set out below is a breakdown of the main items that explain the companies’ net cash position:
2008
Concession companies Million euro
2008 2007
EBITDA 552 665
Dividends collected - -
Income tax paid -42 -43
Change in receivables, payables and other 24 74
Cash fl ows from discontinued operations
Cash fl ows from operating activities 534 696
Investments in property, plant and equipment and intangible assets
Investments in infrastructure projects -514 -571
Non-current fi nancial assets - -
Divestment - -
Net cash fl ows from investing activities of
discontinued operations - -
Cash fl ows from investing activities -514 -571
Cash fl ows before fi nancing activities 20 125
Proceeds from capital and minority interest 73 171
Payment of dividends to parent company - -
Payment of minority interest dividends to
associates -427 -236
Other movements in equity - -
Cash fl ows from shareholders and minority
interest -354 -65
Interest paid -429 -442
Increase in bank borrowings 1,293 1,619
Decrease in bank borrowings -600 -1,286
Cash fl ows from fi nancing activities -90 -174
Change in cash and cash equivalents -70 -49
Opening cash and cash equivalents 488 547
Closing cash and cash equivalents 394 488
Impact of exchange rates on cash and cash
equivalents 24 10
Cash fl ows from operating activities of the concession holder companies relate basically to cash infl ows of operational pro- jects, although they also include VAT refunds and payments of projects under construction. These companies’ cash fl ows from operating activities may be explained on the basis of EBITDA by adding the effect of working capital, as shown below:
Concession companies Million euro
2008 2007
Operating results of concession companies 424 498
Depreciation and amortisation 128 167
EBITDA 552 665
Income tax payment -42 -43
Change in working capital 24 74
Cash fl ows from operating activities 534 696
Cash fl ows from Investments in property, plant and equipment relate to outfl ows to increase PPE, relating mainly to concession companies in the construction phase in 2008, such as Eurolink M3 (190 million euro), SH-130 (96 million euro) the Greek toll roads (79 million euro).
Cash fl ows from shareholders and minority interest relate to dividends paid and equity reimbursed by the concession companies to their shareholders, as well as amounts received by these companies for capital increases. In the case of fully- consolidated concession companies, the fi gures relate to 100% of the amounts paid and received by the concession companies, irrespective of the Group’s interest in each company. No divi- dend or equity reimbursement is included in relation to equity- consolidated companies. Set out below is a breakdown of capital contributions received by the toll road companies:
Capital contributions to infrastructure projects Million euro 2008 2007 M-203 - 20 A. Madrid Levante 3 6 SH-130 4 76 A. Ionian Roads - 18 Central Greece 12 - Eurolink M3 5 34 A. R-4 Madrid-Sur 25 11 Autema 14 - Euroscut Azores 10 6 TOTAL 73 171
A breakdown of dividends paid by the toll road companies is set out below:
Breakdown of dividends paid by infrastructure projects
Million euro
2008 2007
407 ETR 79 83
Autema - 17
Inca / Cinca (Autema transaction) 317 -
Ausol 6 23 Trados 45 3 3 A. Temuco-Río Bueno 1 4 A. Talca-Chillán - 3 A. Santiago-Talca - 67 A. Chillán-Collipulli - 8 Euroscut Algarve 5 3 Chicago Skyway 6 15
Indiana Toll Road 10 10
TOTAL 427 236
2008
The impact on the net cash position of foreign exchange fl uc- tuations in 2008, when the fi nancial statements of companies denominated in different currencies were translated to euros, is also included. This relates basically to the Canadian company 407 ETR and the US companies Chicago Skyway and Indiana Toll Road. The overall impact of foreign exchange fl uctuations is a re- duction in debt and therefore an improvement in the concession companies’ net cash position in the amount of 386 million euro.
Finally, cash fl ows from fi nancing activities relate to interest paid by the concession companies, plus other commissions and costs closely related to the obtainment of fi nancing. These fl ows consist of interest expense for the period and other items that directly affect net debt for the period. This amount does not match the fi nancing results refl ected in the income statement, mainly due to differences between the accrual and payment of interest by the highway companies 407 ETR, Chicago Skyway and Indiana Toll Road.
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> 28. Directors’ remuneration
In accordance with the provisions of the Articles of Associa- tion and the Board of Directors’ Regulations, set out below is information on corporate regulations governing directors’ re- muneration, the items included in the remuneration and, where required, breakdowns of remuneration paid to the individual members of the Board of Directors.
a) Clauses in the Articles of Association relating to remuneration:
Article 36 of the Articles of Association relating to directors’ remuneration stipulates the following:
1. “The directors, in their capacity as members of the Board of Directors, shall receive remuneration from the Company consisting of a fi xed annual sum. The amounts that may be paid by the Company as directors’ remuneration shall be established by the General Meeting. The Board of Directors shall be responsible for specifying the exact amounts payable, subject to the aforementioned limit, the conditions that must be fulfi lled to obtain the remuneration and the allocation of the remuneration to each director.
2. Additionally, the directors that perform executive functions in the Company shall receive remuneration comprising: (a) a fi xed portion, based on the services and responsibilities assumed; (b) a variable portion, correlated to an indicator of the perfor- mance of the director or the Company; (c) a welfare-related portion; and (d) a severance indemnity in the event of dismis- sal not due to an infringement attributable to the director.
The amount pertaining to the fi xed portion, the indicators or calculation method for the variable portion, the cost of welfare benefi ts and the reference parameters for quantifying the severance indemnity shall be determined by the General Meeting.
Subject to the limits imposed by the General Meeting, the Board of Directors may determine individual remuneration packages for each director and defi ne other conditions to be fulfi lled in order to obtain the remuneration. The executive directors in question shall not attend or participate in delibera- tions during the relevant Board meeting. The Board shall ensu- re that the remuneration is in line with market conditions and takes into account the level of responsibility and commitment required in the role performed by each director.
3. The directors may also be remunerated in the form of shares in the Company or in another listed Group company, as well as in the form of options on or instruments linked to the price of those shares. In the case of shares in the Company, this remu- neration shall be agreed by the General Meeting. The resolu- tion in question shall state the number of shares to be handed over, if applicable, the strike price of the share options, the value of the reference shares and the duration of this form of remuneration.
4. The Company is authorised to contract a third-party liability insurance policy covering its directors.
5. The remuneration paid to external directors and executive di- rectors (in the latter case, the portion pertaining to their direc- torship, excluding their executive functions) shall be disclosed in the notes to the accounts for each individual director. The portion of the remuneration paid to the executive directors pertaining to their executive functions shall be disclosed as a total amount accompanied by an itemised breakdown.”
b) Resolutions of the General Meeting and the Board of Directors in connection with directors’ remuneration.
The Extraordinary General Shareholders’ Meeting of CINTRA held on 4 October 2004 adopted the following resolution, in accordance with Article 36 of the Articles of Association:
1. “Establish the maximum aggregate amount of remuneration payable annually by the Company to all of its directors, in accordance with Article 36.1 of the revised Articles of Associa- tion, at 1,000,000 euros.
2. In conformity with Article 36.2 of the revised Articles of Association, the maximum annual remuneration of each of the Company’s executive directors shall be determined as follows:
2008
i. Fixed portion.
The total gross amount payable for this item shall not exceed 500,000 euros per annum. Unless modifi ed by the General meeting, this amount shall rise annually in line with the Spanish consumer price index and/or any other market indicator for similar positions that may be prepared by a reputable independent human resources consultancy organi- sation.
ii. Variable portion.
This remuneration item is linked to the achievement of targets in terms of the parameters of the Company and/or the Group to which the executive belongs, such as:
a) Increase in net profi ts on the previous year.
b) Degree of fulfi lment of the pre-tax profi ts budgeted for the year in question.
c) Compliance with cash fl ow budgets. d) Evolution of structural costs.
e) Number and type of projects tendered, awarded or fi nanced.
The variable portion shall accrue only once and shall not generate any vested rights. The annual maximum amount shall not in any event exceed twice the fi xed portion for the year in question.
iii. Welfare-related portion.
The annual maximum cost of pension plans, insurance policies and/or other welfare benefi ts shall not exceed 3,000 euros. That amount shall increase annually in the manner stipulated in point (i) above.
iv. Severance indemnity.
The amount of the severance indemnity payable in the event of a dismissal not attributable to an infringement by the director, during the fi rst eight years of service in the Company or Group, may not exceed three annual payments, i.e. three times the total fi xed remuneration for the year in question plus three times the last variable remuneration accrued prior to dismissal. This limit shall increase to four annual payments as from the ninth year of service.
In accordance with the fi nal paragraph of Article 36.2 of the Articles of Association, the Board of Directors is autho- rised to determine each executive director’s exact remune- ration subject to the limits stated in (i) to (iv) above, and to defi ne any other conditions that must be fulfi lled to obtain the remuneration.
3. The above-mentioned remuneration and, if applicable, any remuneration agreed by the General Meeting in accordance with Article 36.3 of the Articles of Association, are compatible with the stock option plans created by Grupo Ferrovial, S.A. for Company directors”.
• On 15 November 2004, the Board of Directors approved re- muneration of 60,000 euros per annum per director, applica- ble to each of the independent external directors and to the then executive director.
• On 19 February 2008, the Board of Directors approved remu- neration of 60,000 euros per annum per director, applicable to each of the independent external directors who have been Board members for at least two years.
c) Directors’ remuneration in 2008.
During 2008, the remuneration of Cintra’s Board of Directors comprised a number of items based on each director’s category, as follows:
1. Independent external directors:
Bonuses provided by the Articles of Association: These bonuses relate to the three independent external directors hol- ding offi ce in 2008.
2. Executive directors:
Remuneration for executive functions includes the following items: fi xed remuneration, variable remuneration, life insuran- ce premiums and other items.
3. Controlling external directors:
No remuneration of any kind was received in their capacity as Company directors.
Set out below is a detailed analysis of remuneration:
A.- Bonuses provided by the Articles of Association: Indivi- dual remuneration of the independent external directors was as follows:
- Mr José Fernando Sánchez-Junco Mans: 60 thousand euro. - Mr Fernando Abril-Martorell Hernández: 60 thousand euro.
- Mr Jaime Bergel Sainz de Baranda: 60 thousand euro.
B.- Remuneration for the Executive Directors’ executive functions: The executive directors received 805 thousand euro for the executive functions (fi xed remuneration of 450 thousand euro, variable remuneration of 353 thousand euro and life insurance premiums of 2 thousand euro) (1,249 thousand euro in 2007).
2008
C.- No remuneration accrued in this respect during 2008 to Board directors that are also members of the administrative bodies of other Group or multi-group companies or associa- tes. No advances or loans had been granted to the Company’s directors at 31 December 2008.
d) Remuneration for senior managers reporting directly to the Chief Executive Offi cer.
Remuneration received by the Company’s senior managers, excluding the CEO, in 2008 totalled 2,439 thousand euro, com- prising the following items:
Item Thousand euro
2008 2007
Fixed remuneration 1,759 1,692
Variable remuneration 577 511
Membership of other Boards of Group companies
or associates 84 150
Life insurance premiums 8 6
Other 11 19
TOTAL 2,439 2,378
The Company has granted loans to senior managers totalling 75 thousand euro.
e) Other information.
The employment contract between the Company and the Chief Executive Offi cer provides the right to receive the indemni- ties stipulated in Article 56 of the Labour Statute.
Additionally, in order to build loyalty and encourage perma- nence, senior managers are entitled to extraordinary deferred remuneration that will only be paid in one of the following circumstances:
- senior manager agrees to leave at a certain age.
- senior manager is dismissed unfairly or leaves the Company due to a decision by the latter, without cause for dismissal, prior to the date on which the senior manager reaches the agreed age, provided the amount in question exceeds the indemnity payable under the Labour Statute.
- death or disability.