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  2. LETTER FROM THE CHAIRMAN

Ferrovial - Integrated Annual Report 2014 / LETTER FROM THE CHAIRMAN

Dear shareholder:

In 2014 the company had a net income of 402 million euro, an operating cash flow excluding infrastructure projects of 1,076 million euro, and increased revenues by 8% and EBITDA by 5%. Ferrovial ended the year with a net cash position of 1,632 million euro -excluding infrastructure projects- and does not have significant debt maturities at the corporate level until 2018. This strong performance allowed the company to appropriately remunerate shareholders, which combined with the share price appreciation gave a total return of 22%. The company also introduced the “Ferrovial Flexible Dividend” option for shareholders.

As in recent years, these results reflect the good performance of Ferrovial’s businesses in the international markets, which now account for almost 70% of consolidated revenues. During the year, the company obtained significant contracts in Services, Toll Roads and Construction, providing a sound basis for future activity and raising the backlog to a record 30,500 million euro. Our two main assets -Highway 407 ETR and Heathrow Airport- improved revenues and EBITDA, set new traffic records and achieved excellent levels of satisfaction among users. In addition in 2014 the company started operating the North Tarrant Express in Texas, a project that was delivered nine months ahead of schedule.

The credit rating upgrade to investment grade (BBB) with stable outlook by Fitch, in line with the rating granted by S&P almost two years ago, reflects the market confidence in the company. In 2014 Ferrovial completed its third bond issue: 300 million euro, 10 year maturity with a 2.5% annual coupon. Also during the year, the company arranged a new five-year liquidity line of 750 million euro at a cost of 80 basis points. The financial strength and liquidity position provides flexibility to seize investment opportunities, such as the acquisition of Aberdeen, Glasgow and Southampton airports.

For another year, Ferrovial was among the companies that met the demanding standards of the Dow Jones Sustainability Index, the FTSE4Good and the Carbon Disclosure Project. To provide greater transparency, this year the company presents the annual report in an integrated format that conforms to the standards of the International Integrated Reporting Council.

In summary, 2014 was another good year for the company. The commitment to grow in North America and the United Kingdom combined with the excellent performance of our professionals place Ferrovial in a more competitive, more international and stronger position. Ferrovial continues to focus on creating value for its shareholders, to whom once again I would like to express my gratitude for their support.

Firma de Rafael del Pino
Rafael del Pino